Howmet Aerospace · Earnings release

FOR IMMEDIATE RELEASE

Investor Contact

Media Contact

Paul T. Luther

Rob Morrison

Paul.Luther@howmet.com

Rob.Morrison@howmet.com

Howmet Aerospace Reports Fourth Quarter and

FY 2024: Revenue Up 12% Year Over Year; Record

Revenue, Profit and Cash Generation

FY 2024: Approx. $975 Million Deployed for Common

Stock Repurchases, Debt Reduction, and Dividends

FY 2025: Raising Revenue Growth Guidance to

~8% YoY; Expect Improved Profit and Cash Generation

Fourth Quarter 2024 GAAP Financial Results

·

Revenue of $1.9 billion, up 9% year over year, driven by Commercial Aerospace,

·

Net Income of $314 million versus $236 million in the fourth quarter 2023;

Earnings Per Share of $0.77 versus $0.57 in the fourth quarter 2023

·

Operating Income Margin of 23.5%

·

Generated $480 million of cash from operations; $284 million of cash used

for financing activities; and $107 million of cash used for investing activities

Full Year 2024 GAAP Financial Results

·

Revenue of $7.4 billion, up 12% year over year, driven by Commercial Aerospace,

·

Net Income of $1.2 billion versus $765 million in the full year 2023; Earnings

·

Operating Income Margin of 22.0%

·

$1.3 billion cash from operations; $1.0 billion of cash used for financing

activities; and $316 million of cash used for investing activities; Free Cash Flow1 85% of Net Income

Fourth Quarter 2024 Adjusted Financial Results

·

Adj. EBITDA excluding special items of $507 million, up 27% year over year

·

Adj. EBITDA Margin excluding special items of 26.8%

·

Adj. Operating Income Margin excluding special items of 23.0%

·

Adj. Earnings Per Share excluding special items of $0.74, up 40% year over

year

·

$378 million of Free Cash Flow

Full Year 2024 Adjusted Financial Results

·

Adj. EBITDA excluding special items of $1.9 billion, up 27% year over year

·

Adj. EBITDA Margin excluding special items of 25.8%

·

Adj. Operating Income Margin excluding special items of 22.0%

·

Adj. Earnings Per Share excluding special items of $2.69, up 46% year over

year

·

$977 million of Free Cash Flow; 88% conversion of Net Income excluding special

items

1 Free Cash Flow = Cash provided from operations less

Capital expenditures

1

Low

Baseline

High

Low

Baseline

High

G1Revenue

G2Adj.

EBITDA*2

G3Adj. EBITDA Margin*2

G4Adj. Earnings per Share*2

G5Free Cash Flow2

Key Announcements

·

In

the fourth quarter 2024, the Company repurchased $190 million of common stock at an average price of $109.75 per share, retiring approximately

1.7 million shares.

·

In January 2025, the Company repurchased an additional $50 million of common

stock. As of January 31, 2025, total share repurchase authorization available was approximately $2.15 billion.

·

In

the fourth quarter 2024, the Company paid down $60 million of its US dollar-denominated Term Loan, resulting in annualized interest expense

savings of approximately $3 million.

·

On November 25, 2024, the Company paid a quarterly dividend of $0.08 per

share on its common stock.

·

The Company increased the quarterly dividend of its common stock by 25% to

PITTSBURGH, PA, February 13, 2025 – Howmet Aerospace (NYSE:

HWM) today reported fourth quarter and full year 2024 results. The Company reported fourth quarter 2024 revenues of $1.9 billion, up 9%

year over year, primarily driven by growth in the commercial aerospace market of 13%.

Howmet Aerospace reported Net Income of $314 million, or $0.77 per

share, in the fourth quarter 2024 versus $236 million, or $0.57 per share, in the fourth quarter 2023, and included approximately $11

million in net benefit from special items. Net Income excluding special items was $303 million, or $0.74 per share, in the fourth quarter

Fourth quarter 2024 Operating Income was $445 million, up 37% year

over year. Fourth quarter Adjusted Operating Income excluding special items was $434 million, up 32% year over year. Operating Income

Margin was up approximately 470 basis points year over year at 23.5% in the fourth quarter 2024. Fourth quarter Adjusted Operating Income

Margin excluding special items was 23.0%, up approximately 390 basis points year over year.

Fourth quarter 2024 Adjusted EBITDA excluding special items was $507

million, up 27% year over year. The year-over-year increase was driven by growth in the commercial aerospace and defense aerospace markets.

Adjusted EBITDA Margin excluding special items was up approximately 380 basis points year over year at 26.8%.

* Excluding special items

2 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.

2

Howmet Aerospace reported full year 2024 revenues of $7.4 billion,

up 12% year over year, primarily driven by growth in the commercial aerospace market of 20%.

The Company reported Net Income of $1.2 billion, or $2.81 per share,

in the full year 2024 versus $765 million, or $1.83 per share, in the full year 2023, and included approximately $48 million in net benefit

from special items. Net Income excluding special items was $1.1 billion, or $2.69 per share, in the full year 2024, versus $766 million,

Full year 2024 Operating Income was $1.6 billion, up 36% year over

year. Full year Adjusted Operating Income excluding special items was $1.6 billion, up 32% year over year. Operating Income Margin was

up approximately 390 basis points year over year at 22.0% in the full year 2024. Full year Adjusted Operating Income Margin excluding

special items was 22.0%, up approximately 340 basis points year over year.

Full year 2024 Adjusted EBITDA excluding special items was $1.9 billion,

up 27% year over year. The year-over-year increase was driven by growth in the commercial aerospace and defense aerospace markets. Adjusted

EBITDA Margin excluding special items was up approximately 310 basis points year over year at 25.8%.

Howmet

Aerospace Executive Chairman and Chief Executive Officer John Plant said, “Howmet drove a healthy set of results to close out the

year, exceeding the high end of guidance. Revenue in the fourth quarter 2024 grew 9% year over year to a record $1.9 billion, with commercial

aerospace growth of 13% supported by engine spares volumes. Adjusted EBITDA* grew

27% to $507 million and Adjusted EBITDA Margin* increased

approximately 380 basis points to 26.8%, also records. Adjusted Earnings per Share* grew

Mr.

Plant continued, “Robust cash generation continues to support Howmet’s strong balance sheet as well as an attractive shareholder

return profile. In full year 2024, the Company generated $977 million of Free Cash Flow for an 88% conversion of Net Income*,

and deployed approximately $975 million of cash in the form of common stock repurchases, debt reduction, and dividends. On January 27,

the Board of Directors approved a 25% increase in the common stock dividend to $0.10 per share.”

“The

outlook for commercial aerospace remains solid with rising OEM production rates supported by strong demand as well as continued healthy

growth in engine spares demand. We expect continued growth in the defense aerospace and industrial end markets, with the commercial transportation

market anticipated to be soft until the second half of 2025. The mid-point of our 2025 revenue growth guidance is increased to approximately

8% year over year compared to the 7.5% outlook provided at third quarter 2024 earnings, and this extra growth is on top of a strong finish

to 2024. We continue to employ a cautious view on underlying build rates in our guidance, assuming The Boeing Company produces approximately

25 737-MAX aircraft per month and 6 787 aircraft per month on average across 2025 and Airbus averages mid-50s per month on the A320 and

approximately 6 per month on the A350. Free Cash Flow in 2025 is expected to exceed $1 billion with approximately 85% conversion of Net

Income*, while investing in additional capital

expenditures for growth.”

* Excluding special items

3

Fourth Quarter and Full Year 2024 Segment Performance

Engine Products

(in U.S. dollar amounts)

Third-party sales

Inter-segment sales

$ 1

$ 3

$ 1

$7

Provision for depreciation and amortization

Segment Adjusted EBITDA

Segment Adjusted EBITDA Margin

Restructuring and other (credits) charges

$ (1)

$ (2)

$ 1

$ 1

$1

Capital expenditures

Engine Products reported fourth quarter 2024 revenue of $972 million,

an increase of 14% year over year, due to growth in the commercial aerospace, defense aerospace, oil & gas, and industrial gas turbine

markets. Segment Adjusted EBITDA was $302 million, up 30% year over year, driven by growth in the commercial aerospace, defense aerospace,

oil & gas, and industrial gas turbine markets. The segment absorbed approximately 220 net headcount in the quarter and approximately

1,205 in full year 2024 in support of expected revenue increases. Segment Adjusted EBITDA margin increased approximately 380 basis points

year over year to 31.1%.

Engine Products reported full year 2024 revenue of $3.7 billion, up

14% year over year, due to growth in the commercial aerospace, defense aerospace, oil and gas, and industrial gas turbine markets. Segment

Adjusted EBITDA was a record $1.2 billion, up 30% year over year, driven primarily by growth in the commercial aerospace, defense aerospace,

oil and gas, and industrial gas turbine markets. Segment Adjusted EBITDA margin increased approximately 360 basis points year over year

Fastening Systems

(in U.S. dollar amounts)

Third-party sales

Inter-segment sales

$ —

$ —

$ —

$ 1

$1

Provision for depreciation and amortization

Segment Adjusted EBITDA

Segment Adjusted EBITDA Margin

Restructuring and other charges

$ —

$ 1

$ 1

$ 2

$5

Capital expenditures

$ 8

$ 5

$ 9

Fastening Systems reported fourth quarter 2024 revenue of $401 million,

an increase of 11% year over year due to growth in the commercial aerospace market, including wide body aircraft recovery. Segment Adjusted

EBITDA was $111 million, up 39% year over year, driven by growth in the commercial aerospace market as well as productivity gains. Segment

Adjusted EBITDA margin increased approximately 550 basis points year over year to 27.7%.

4

Fastening Systems reported full year 2024 revenue of $1.6 billion,

up 17% year over year, due to growth in the commercial aerospace market, including wide body recovery. Segment Adjusted EBITDA was $406

million, up 46% year over year, driven primarily by growth in the commercial aerospace market as well as productivity gains. Segment Adjusted

EBITDA margin increased approximately 520 basis points year over year to 25.8%.

Engineered Structures

(in U.S. dollar amounts)

Third-party sales

Inter-segment sales

$ 2

$ 3

$ 3

$ 3

Provision for depreciation and amortization

Segment Adjusted EBITDA

Segment Adjusted EBITDA Margin

Restructuring and other charges (credits)

$ 1

$ (3)

Capital expenditures

$ 5

$ 5

$ 4

Engineered Structures reported fourth quarter 2024 revenue of $275

million, an increase of 13% year over year due to growth in the commercial aerospace and defense aerospace markets. Segment Adjusted EBITDA

was $51 million, up 55% year over year, driven by growth in the commercial aerospace and defense aerospace markets. Segment Adjusted EBITDA

margin increased approximately 500 basis points year over year to 18.5%.

Engineered Structures reported full year 2024 revenue of $1.1 billion,

up 21% year over year, due to growth in the commercial aerospace and defense aerospace markets. Segment Adjusted EBITDA was $166 million,

up 47% year over year, driven primarily by growth in the commercial aerospace and defense aerospace markets. Segment Adjusted EBITDA margin

increased approximately 270 basis points year over year to 15.6%.

Forged Wheels

(in U.S. dollar amounts)

Third-party sales

Provision for depreciation and amortization

Segment Adjusted EBITDA

Segment Adjusted EBITDA Margin

Restructuring and other charges

$ —

$ —

$ 1

$ —

$1

Capital expenditures

Forged Wheels reported fourth quarter 2024 revenue of $243 million,

a decrease of 12% year over year due to lower volumes in the commercial transportation market. Segment Adjusted EBITDA was $66 million,

a decrease of approximately 8% year over year, driven by lower volumes in the commercial transportation market. Segment Adjusted EBITDA

margin increased approximately 100 basis points year over year to 27.2%.

5

Forged Wheels reported full year 2024 revenue of $1.1 billion, down

8% year over year, due to lower volumes in the commercial transportation market as well as a decrease in aluminum and other inflationary

cost pass through. Segment Adjusted EBITDA was $287 million, down 7% year over year, driven primarily by lower volumes in the commercial

transportation market. Segment Adjusted EBITDA margin increased approximately 30 basis points year over year to 27.2%.

Key Announcements

Repurchased $190 Million of Common Stock in Fourth Quarter 2024,

In the fourth quarter 2024, Howmet Aerospace repurchased $190 million

of common stock at an average price of $109.75 per share, retiring approximately 1.7 million shares.

In the full year 2024, the Company repurchased $500 million of common

stock at an average price of $86.65 per share, retiring approximately 5.8 million shares.

In January 2025, the Company repurchased an additional $50 million

of common stock at an average price of $116.39 per share, retiring approximately 0.4 million shares.

As of January 31, 2025, total share repurchase authorization available

was approximately $2.15 billion.

Paid Down $60 Million of US Dollar-Denominated Term Loan; Reduced

In the fourth quarter 2024, the Company paid down $60 million of its

US dollar-denominated Term Loan, resulting in annualized interest expense savings of approximately $3 million. The Company has $140 million

remaining outstanding on the USD Term Loan due November 2026.

In the full year 2024, the Company reduced gross debt by $365 million,

resulting in annualized interest expense savings of approximately $37 million.

Quarterly Common Stock Dividend of $0.08 Per Share in Fourth Quarter

On November 25, 2024, the Company paid a quarterly dividend of $0.08

per share on its common stock to holders of record at the close of business November 8, 2024.

On January 27, 2025, the Board of Directors declared a dividend of

$0.10 per share on the Company’s common stock to be paid on February 25, 2025 to holders of record as of the close of business on

February 7, 2025. The quarterly dividend represents a 25% increase from the prior dividend of $0.08 per share.

6

Low

Baseline

High

Low

Baseline

High

Revenue

Adj. EBITDA*1

Adj. EBITDA Margin*1

Adj. Earnings per Share*1

Free Cash Flow1

* Excluding Special Items

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, February 13, 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 February 13, 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 and transportation industries.

The Company’s primary businesses focus on jet engine components, aerospace fastening systems, and airframe structural components

necessary for mission-critical performance and efficiency in aerospace and defense applications, as well as forged aluminum wheels for

commercial transportation. With approximately 1,170 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.

7

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", "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 end 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; (b) unfavorable changes in the markets served by Howmet Aerospace; (c) the impact of potential

cyber attacks and information technology or data security breaches; (d) the loss of significant customers or adverse changes in customers’

business or financial conditions; (e) manufacturing difficulties or other issues that impact product performance, quality or safety; (f)

inability of suppliers to meet obligations due to supply chain disruptions or otherwise; (g) failure to attract and retain a qualified

workforce and key personnel, labor disputes or other employee relations issues; (h) the inability to achieve revenue growth, cash generation,

restructuring plans, cost reductions, improvement in profitability, or strengthening of competitiveness and operations anticipated or

targeted; (I) inability to meet increased demand, production targets or commitments; (j) competition from new product offerings, disruptive

technologies or other developments; (k) 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; (l) the outcome of contingencies, including legal proceedings, government or regulatory

investigations, and environmental remediation, which can expose Howmet Aerospace to substantial costs and liabilities; (m) failure to

comply with government contracting regulations; (n) adverse changes in discount rates or investment returns on pension assets; and (o)

the other risk factors summarized in Howmet Aerospace’s Form 10-K for the year ended December 31, 2023 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 its 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.

8

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.

Other Information

In this press release, the acronym “FY” means “full

year”; “Q” means “quarter”; “YoY” means year over year; “Adj.” means adjusted; 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.

9

Howmet Aerospace Inc. and subsidiaries

Statement of Consolidated Operations (unaudited)

(in U.S. dollar millions, except per-share and share amounts)

Quarter ended

Sales

$

$

$

Cost of goods sold (exclusive of expenses below)

Selling, general administrative, and other expenses

Research and development expenses

7

9

9

Provision for depreciation and amortization

Restructuring and other (credits) charges

—

(1

)

Operating income

Loss on debt redemption

—

6

1

Interest expense, net

Other expense, net

3

Income before income taxes

Provision for income taxes

Net income

$

$

$

Amounts Attributable to Howmet Aerospace Common Shareholders:

Earnings per share - basic(1):

Net income per share

$

$

$

Average number of shares(2)(3)

Earnings per share - diluted(1):

Net income per share

$

$

$

Average number of shares(2)(3)

Common stock outstanding at the end of the period

(1)

In order to calculate both basic and diluted earnings per share, 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.

Howmet Aerospace Inc. and subsidiaries

Statement of Consolidated Operations (unaudited)

(in U.S. dollar millions, except per-share and share amounts)

For the year ended December 31,

Sales

$

$

Cost of goods sold (exclusive of expenses below)

Selling, general administrative, and other expenses

Research and development expenses

Provision for depreciation and amortization

Restructuring and other charges

Operating income

Loss on debt redemption

6

2

Interest expense, net

Other expense, net

8

Income before income taxes

Provision for income taxes

Net income

$

$

Amounts Attributable to Howmet Aerospace Common Shareholders:

Earnings per share - basic(1)(2):

Net income per share

$

$

Average number of shares(3)

Earnings per share - diluted1)(2):

Net income per share

$

$

Average number of shares(3)

(1)

In order to calculate both basic and diluted EPS, preferred stock dividends declared of $2 for the years presented need to be subtracted

from Net income.

(2)

For the years presented, the difference between the diluted average number of shares and the basic average number of shares related

to share equivalents associated with outstanding 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 realized in EPS in the year of repurchase for the years presented.

Howmet Aerospace Inc. and subsidiaries

Consolidated Balance Sheet (unaudited)

(in U.S. dollar millions)

Assets

Current assets:

Cash and cash equivalents

$

$

Receivables from customers, less allowances of $— in both 2024 and 2023

Other receivables

Inventories

Prepaid expenses and other current assets

Total current assets

Properties, plants, and equipment, net

Goodwill

Deferred income taxes

Intangibles, net

Other noncurrent assets

Total assets

$

$

Liabilities

Current liabilities:

Accounts payable, trade

$

$

Accrued compensation and retirement costs

Taxes, including income taxes

Accrued interest payable

Other current liabilities

Short-term debt

6

Total current liabilities

Long-term debt, less amount due within one year

Accrued pension benefits

Accrued other postretirement benefits

Other noncurrent liabilities and deferred credits

Total liabilities

Equity

Howmet Aerospace shareholders’ equity:

Preferred stock

Common stock

Additional capital

Retained earnings

Accumulated other comprehensive loss

)

)

Total equity

Total liabilities and equity

$

$

Howmet Aerospace and subsidiaries

Statement of Consolidated Cash Flows (unaudited)

(in U.S. dollar millions)

Year ended December 31,

Operating activities

Net income

$

$

Adjustments to reconcile net income to cash provided from operations:

Depreciation and amortization

Deferred income taxes

Restructuring and other charges

Net realized and unrealized losses

Net periodic pension cost

Stock-based compensation

Loss on debt redemption

6

2

Other

1

3

Changes in assets and liabilities, excluding effects of acquisitions, divestitures, and foreign currency translation adjustments:

Increase in receivables

)

)

Increase in inventories

)

)

Increase in prepaid expenses and other current assets

)

)

Decrease in accounts payable, trade

)

(7

)

Increase in accrued expenses

5

Decrease in taxes, including income taxes

)

(7

)

Pension contributions

)

)

Increase in noncurrent assets

(3

)

(4

)

Decrease in noncurrent liabilities

)

)

Cash provided from operations

Financing Activities

Additions to debt

Repurchases and payments on debt

)

)

Debt issuance costs

(5

)

(2

)

Premiums paid on early redemption of debt

(5

)

(1

)

Repurchases of common stock

)

)

Proceeds from exercise of employee stock options

8

Dividends paid to shareholders

)

)

Taxes paid for net share settlement of equity awards

)

)

Other

(1

)

—

Cash used for financing activities

)

)

Investing Activities

Capital expenditures

)

)

Acquisitions, net of cash acquired

(5

)

—

Proceeds from the sale of assets and businesses

9

2

Proceeds from the sales of securities

—

2

Other

1

—

Cash used for investing activities

)

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(1

)

—

Net change in cash, cash equivalents and restricted cash

)

)

Cash, cash equivalents and restricted cash at beginning of period

Cash, cash equivalents and restricted cash at end of period

$

$

Howmet Aerospace Inc. and subsidiaries

Segment Information (unaudited)

(in U.S. dollar millions)

Engine Products

Third-party sales

$

$

$

$

$

$

$

$

$

$

Inter-segment sales

$

2

$

5

$

5

$

1

$

$

2

$

1

$

3

$

1

$

7

Provision for depreciation and amortization

$

$

$

$

$

$

$

$

$

$

Segment Adjusted EBITDA

$

$

$

$

$

$

$

$

$

$

Segment Adjusted EBITDA Margin

Restructuring and other (credits) charges

$

—

$

(1

)

$

—

$

(1

)

$

(2

)

$

—

$

(1

)

$

1

$

1

$

1

Capital expenditures

$

$

$

$

$

$

$

$

$

$

Fastening Systems

Third-party sales

$

$

$

$

$

$

$

$

$

$

Inter-segment sales

$

—

$

—

$

—

$

—

$

—

$

—

$

—

$

—

$

1

$

1

Provision for depreciation and amortization

$

$

$

$

$

$

$

$

$

$

Segment Adjusted EBITDA

$

$

$

$

$

$

$

$

$

$

Segment Adjusted EBITDA Margin

Restructuring and other charges

$

—

$

—

$

1

$

—

$

1

$

—

$

2

$

1

$

2

$

5

Capital expenditures

$

9

$

5

$

9

$

8

$

$

7

$

5

$

5

$

9

$

Engineered Structures

Third-party sales

$

$

$

$

$

$

$

$

$

$

Inter-segment sales

$

—

$

1

$

—

$

2

$

3

$

1

$

3

$

3

$

3

$

Provision for depreciation and amortization

$

$

$

$

$

$

$

$

$

$

Segment Adjusted EBITDA

$

$

$

$

$

$

$

$

$

$

Segment Adjusted EBITDA Margin

Restructuring and other charges (credits)

$

1

$

5

$

1

$

$

$

—

$

$

1

$

(3

)

$

Capital expenditures

$

$

5

$

6

$

5

$

$

6

$

5

$

5

$

4

$

Forged Wheels

Third-party sales

$

$

$

$

$

$

$

$

$

$

Provision for depreciation and amortization

$

9

$

$

$

$

$

$

$

$

$

Segment Adjusted EBITDA

$

$

$

$

$

$

$

$

$

$

Segment Adjusted EBITDA Margin

Restructuring and other charges

$

—

$

—

$

—

$

—

$

—

$

—

$

—

$

1

$

—

$

1

Capital expenditures

$

9

$

7

$

9

$

$

$

$

9

$

$

$

Differences between the total segment and consolidated

totals are in Corporate.

Howmet Aerospace Inc. and subsidiaries

Calculation of Financial Measures (unaudited)

(in U.S. dollar millions)

Reconciliation of Total Segment Adjusted EBITDA to Consolidated Income Before Income Taxes

Income before income taxes

$

$

$

$

$

$

$

$

$

$

Loss on debt redemption

1

—

—

1

2

—

—

6

—

6

Interest expense, net

Other expense (income), net

7

)

3

8

Operating income

$

$

$

$

$

$

$

$

$

$

Segment provision for depreciation and amortization

Unallocated amounts:

Restructuring and other charges (credits)

1

3

4

—

(1

)

—

Corporate expense(1)

Total Segment Adjusted EBITDA

$

$

$

$

$

$

$

$

$

$

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

Plant fire costs (reimbursements), net

$

4

$

(4

)

$

1

$

)

$

)

$

—

$

(6

)

$

—

$

)

$

)

Collective bargaining agreement negotiation

—

7

1

—

8

—

—

—

—

—

Costs (benefits) associated with closures, supply chain disruptions, and other items

1

9

1

2

1

—

(1

)

1

1

Total Pre-tax special items included in Corporate expense

$

5

$

$

3

$

)

$

9

$

1

$

(6

)

$

(1

)

$

)

$

)

Howmet Aerospace Inc. and subsidiaries

Calculation of Financial Measures (unaudited), continued

(in U.S. dollars millions)

Reconciliation of Free cash flow

Quarter ended

Year ended

Cash provided from operations

$

$

$

$

$

Capital expenditures

)

)

)

)

)

Free cash flow (a)

$

$

$

$

$

Net income (b)

$

$

$

$

$

Free cash flow conversion as a percentage of Net income(1) (a)/(b)

%

Net income excluding Special items(2) (c)

$

$

$

$

$

Free cash flow conversion as a percentage of Net income excluding Special items(1) (a)/(c)

%

The Accounts Receivable Securitization program remains unchanged at

Free cash flow and Free cash flow conversion as a percentage of Net

income excluding Special items are non-GAAP financial measures. Management believes that these measures are 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.

(1)

We compute free cash flow conversion on an annual basis only due to the cycle of our business.

(2)

Please refer to the Reconciliation of Net income excluding Special items for the reconciliation from Net income to Net income excluding

Special items.

Howmet Aerospace Inc. and subsidiaries

Calculation of Financial Measures (unaudited), continued

(in U.S. dollar millions, except per-share and share amounts)

Reconciliation of Net income excluding Special items

Quarter ended

Year ended

Net income

$

$

$

$

$

Diluted earnings per share ("EPS")

$

$

$

$

$

Special items:

Restructuring and other charges (credits)

(1

)

—

Loss on debt redemption and related costs

1

6

—

2

6

Plant fire reimbursements, net

)

—

)

)

)

Collective bargaining agreement negotiations

—

—

—

8

—

Settlement from legal proceeding(1)

—

—

—

)

—

Costs (benefits) associated with closures, supply chain disruptions, and other items

2

(1

)

1