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 Third Quarter 2024 Results

Revenue

Up 11% Year Over Year; Strong Profit and Cash from Operations

Million Debt Reduction; $100 Million Deployed for Common Stock Repurchases

Preliminary Revenue Guidance: Up Approximately 7.5% Year over Year

Third Quarter 2024 GAAP Financial Results

·

Revenue

of $1.84 billion, up 11% year over year, driven by commercial aerospace, up 17%, partially offset by commercial transportation, down

·

Net income of $332 million versus $188 million in the third quarter 2023;

·

Operating income margin of 22.9%

·

Generated $244 million of cash from operations; $441 million of cash used

for financing activities; and $80 million of cash used for investing activities

·

Share repurchases of $100 million; $0.08 per share dividend on common stock

Third Quarter 2024 Adjusted Financial Results

·

Adjusted

EBITDA excluding special items of $487 million, up 27% year over year

·

Adjusted EBITDA margin excluding special items of 26.5%

·

Adjusted operating income margin excluding special items of 22.8%

·

Adjusted earnings per share excluding special items of $0.71, up 54% year

over year

·

Generated $162 million of free cash flow

Low

Baseline

High

Low

Baseline

High

G1Revenue

G2Adj. EBITDA*1

G3Adj. EBITDA Margin*1

G4Adj. Earnings per Share*1

G5Free Cash Flow1

* Excluding special items

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 “2024 Guidance” below.

1

Third Quarter Key Announcements

·

Redeemed

the remaining outstanding principal amount of $205 million of its 5.125% Notes due October 2024 with cash on hand

·

Issued $500 million aggregate principal amount of notes due 2031 (the “2031

Notes”)

·

Redeemed the remaining outstanding principal amount of $577 million of its

·

All combined debt actions year to date through the third quarter 2024 will

reduce annualized interest expense by approximately $33 million

·

Repurchased

$100 million of common stock at an average price of $94.22 per share

·

Increased

the common stock dividend by 60% to $0.08 per share

·

Raised

full year 2024 guidance for Adjusted EBITDA*1 and Adjusted earnings per share*1 above the third quarter 2024 outperformance

despite industry challenges

PITTSBURGH, PA, November 6, 2024 – Howmet Aerospace (NYSE:

HWM) today reported third quarter 2024 results. The Company reported third quarter 2024 revenue of $1.84 billion, up 11% year over year,

primarily driven by growth in the commercial aerospace market of 17%, partially offset by declines in the commercial transportation market

Howmet Aerospace reported net income of $332 million, or $0.81 per

share, in the third quarter 2024 versus $188 million, or $0.45 per share, in the third quarter 2023. Net income included approximately

$42 million in net benefits from special items in the third quarter 2024. Third quarter 2024 operating income was $421 million, up 37%

year over year. Operating income margin was 22.9%, up approximately 440 basis points year over year.

Howmet Aerospace reported adjusted net income excluding special items

of $290 million, or $0.71 per share, in the third quarter 2024 versus $192 million, or $0.46 per share, in the third quarter 2023. Adjusted

EBITDA excluding special items was $487 million, up 27% year over year. The year-over-year increase was driven by strong growth in the

commercial aerospace market. Adjusted EBITDA margin excluding special items was up approximately 350 basis points year over year at 26.5%.

Third quarter 2024 adjusted operating income excluding special items was $419 million, up 33% year over year. Adjusted operating income

margin excluding special items was 22.8%, up approximately 390 basis points year over year.

Howmet Aerospace Executive Chairman and Chief Executive Officer John

Plant said, “The Howmet team delivered a healthy set of results in the third quarter 2024. The results exceeded the high end of

guidance for Adjusted EBITDA*, Adjusted EBITDA margin* and Adjusted earnings per share*. Revenue growth of 11% year over year took account

of actions which restricted volumes shipped to the Boeing Company and notably weaker Europe market conditions impacting Forged Wheels.

We are pleased that the Boeing strike was settled on November 4th, and we look forward to Boeing’s gradual production

recovery. Engines spares volumes increased again in the quarter and are expected to be approximately $1.25 billion for the full year.

Adjusted EBITDA* grew faster than revenue, up 27% year over year, resulting in margins up approximately 350 basis points to 26.5%. Adjusted

earnings per share* grew 54%, while free cash flow was a third quarter record at $162 million.”

* Excluding special items

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 “2024 Guidance” below.

2

Mr. Plant continued, “Turning to 2025, the demand outlook for

commercial aerospace remains robust, driven by healthy air traffic growth. The under-production of aircraft in recent years has resulted

in a very large order backlog which, combined with the significant needs for additional engine spare parts, is supportive of future revenue

growth. We expect above-trend growth in commercial aerospace to continue in 2025, while we continue to take a cautious approach to the

assumed pace of new aircraft builds. We expect growth in 2025 in our defense aerospace and industrial end markets, while we assume that

the commercial transportation end market will remain soft until the second half 2025. G6Our 2025 outlook envisions total revenue growth

of approximately 7.5% year over year.”

“Howmet Aerospace’s balance sheet remains a source of strength,

with leverage at a record low and free cash flow generation of approximately $600 million year to date through the third quarter 2024.

Debt actions year to date will reduce annualized interest expense by approximately $33 million. The Company repurchased $100 million of

common stock in the third quarter 2024 and repurchased an additional $90 million in October 2024, bringing October year-to-date repurchases

to $400 million. Subject to Board approval, we also expect to increase the common stock dividend by 25% in the first quarter 2025 to $0.10

per share.”

Third Quarter 2024 Segment Performance

Engine Products

(in U.S. dollar millions)

Third-party sales

$

$

$

$

$

Inter-segment sales

$

5

$

1

$

2

$

1

$

3

Provision for depreciation and amortization

$

$

$

$

$

Segment Adjusted EBITDA

$

$

$

$

$

Segment Adjusted EBITDA Margin

%

%

%

%

%

Restructuring and other credits

$

—

$

(1

)

$

—

$

(1

)

$

1

Capital expenditures

$

$

$

$

$

Engine Products reported revenue of $945 million, an increase of 18%

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

Adjusted EBITDA was a record $307 million, up 40% year over year, driven by growth in the commercial aerospace, defense aerospace, industrial

gas turbine and oil & gas markets. The Segment absorbed approximately 235 net headcount in the quarter and 985 year to date through

the third quarter 2024 in support of expected revenue increases. Segment Adjusted EBITDA margin increased approximately 510 basis points

year over year to a record 32.5%.

Fastening Systems

(in U.S. dollar millions)

Third-party sales

$

$

$

$

$

Provision for depreciation and amortization

$

$

$

$

$

Segment Adjusted EBITDA

$

$

$

$

$

Segment Adjusted EBITDA Margin

%

%

%

%

%

Restructuring and other charges

$

1

$

—

$

—

$

2

$

1

Capital expenditures

$

9

$

8

$

7

$

5

$

5

3

Fastening Systems reported revenue of $392 million, an increase of

13% year over year due to growth in the commercial aerospace market, including wide body aircraft recovery. Segment Adjusted EBITDA was

$102 million, up 34% year over year, driven by growth in the commercial aerospace market. Segment Adjusted EBITDA margin increased approximately

420 basis points year over year to 26.0%.

Engineered Structures

(in U.S. dollar millions)

Third-party sales

$

$

$

$

$

Inter-segment sales

$

—

$

2

$

1

$

3

$

3

Provision for depreciation and amortization

$

$

$

$

$

Segment Adjusted EBITDA

$

$

$

$

$

Segment Adjusted EBITDA Margin

%

%

%

%

%

Restructuring and other charges

$

1

$

$

—

$

$

1

Capital expenditures

$

6

$

5

$

6

$

5

$

5

Engineered Structures reported revenue of $253 million, an increase

of 11% year over year due to growth in the commercial aerospace and defense aerospace markets. Segment Adjusted EBITDA was $38 million,

up 27% year over year, driven by growth in the commercial aerospace and defense aerospace markets. Segment Adjusted EBITDA margin increased

approximately 180 basis points year over year to 15.0%.

Forged Wheels

(in U.S. dollar millions)

Third-party sales

$

$

$

$

$

Provision for depreciation and amortization

$

$

$

$

$

Segment Adjusted EBITDA

$

$

$

$

$

Segment Adjusted EBITDA Margin

%

%

%

%

%

Restructuring and other charges

$

—

$

—

$

—

$

—

$

1

Capital expenditures

$

9

$

$

$

9

$

Forged Wheels reported revenue of $245 million, a decrease of 14% year

over year due to lower volumes in the commercial transportation market as well as a decrease in aluminum cost pass through. Segment Adjusted

EBITDA was $64 million, a decrease of approximately 17% year over year. Segment Adjusted EBITDA margin decreased approximately 90 basis

points year over year to 26.1%.

On July 1, 2024, Howmet Aerospace completed the redemption of the remaining

outstanding principal amount of $205 million of its 5.125% Notes due October 2024 (the “2024 Notes”). The 2024 Notes were

redeemed with cash on hand at an aggregate redemption price of approximately $208 million, including accrued interest of approximately

$3 million.

On August 22, 2024 the Company issued $500 million aggregate principal

amount of 4.850% Notes due October 2031 (the “2031 Notes”). The Company entered into a cross-currency swap to synthetically

convert the 2031 Notes into a Euro liability of approximately €458 million with a fixed annual interest rate of 3.72%.

4

On August 23, 2024 the Company redeemed the remaining outstanding principal

amount of $577 million of its 6.875% Notes due May 2025 (the “2025 Notes”). The 2025 Notes were redeemed with proceeds from

the 2031 Notes plus cash on hand at an aggregate redemption price of approximately $594 million, including accrued interest of approximately

All combined debt actions year to date through the third quarter 2024

will reduce annualized interest expense by approximately $33 million.

All of the Company’s outstanding debt is unsecured and at fixed

interest rates. The Company’s next debt maturity is in November 2026.

Repurchased $100 Million of Common Stock in Third Quarter 2024,

In the third quarter 2024, Howmet Aerospace repurchased $100 million

of common stock at an average price of $94.22 per share, retiring approximately 1.1 million shares. Through the third quarter 2024, the

Company has repurchased $310 million of common stock at an average price of $76.75 per share, retiring approximately 4 million shares.

In October 2024, the Company repurchased an additional $90 million of common stock at an average price of $103.15 per share, retiring

approximately 0.9 million shares. As of October 31, 2024, total share repurchase authorization available was $2,297 million.

Quarterly Common Stock Dividend of $0.08 Per Share

On September 25, 2024, the Board of Directors declared a dividend of

$0.08 per share on the Company’s common stock, an increase of 60% from the second quarter 2024 dividend of $0.05 per share.

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 the effects of foreign currency movements, 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 Wednesday, November 6, 2024. 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 November 6, via the “Investors” section of the Howmet Aerospace website.

5

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 1,150 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", "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.

6

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” and “Q” means “quarter”; and references to Howmet Aerospace performance that is “record”

means its best result since April 1, 2020 when Howmet Aerospace Inc. (previously named Arconic Inc.) separated from Arconic Corporation.

7

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

9

7

9

Provision for depreciation and amortization

Restructuring and other (credits) charges

(1

)

4

Operating income

Loss on debt redemption

6

—

—

Interest expense, net

Other expense, net

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.

8

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

1

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

$

$

9

Howmet Aerospace and subsidiaries

Statement of Consolidated Cash Flows (unaudited)

(in U.S. dollar millions)

Nine months ended September 30,

Operating activities

Net income

$

$

Adjustments to reconcile net income to cash provided from operations:

Depreciation and amortization

Deferred income taxes

Restructuring and other charges

8

Net realized and unrealized losses

Net periodic pension cost

Stock-based compensation

Loss on debt redemption

6

1

Other

4

2

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

Increase in receivables

)

)

Increase in inventories

)

)

Decrease (increase) in prepaid expenses and other current assets

9

)

Decrease in accounts payable, trade

)

)

Decrease in accrued expenses

)

)

(Decrease) increase in taxes, including income taxes

(5

)

Pension contributions

)

)

Increase in noncurrent assets

(6

)

(2

)

Decrease in noncurrent liabilities

)

)

Cash provided from operations

Financing Activities

Additions to debt

—

Repurchases and payments on debt

)

)

Debt issuance costs

(5

)

—

Premiums paid on early redemption of debt

(5

)

(1

)

Repurchases of common stock

)

)

Proceeds from exercise of employee stock options

7

Dividends paid to shareholders

)

)

Taxes paid for net share settlement of equity awards

)

)

Cash used for financing activities

)

)

Investing Activities

Capital expenditures

)

)

Proceeds from the sale of assets and businesses

9

1

Other

1

—

Cash used for investing activities

)

)

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

(2

)

(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

Provision for depreciation and amortization

$

$

$

$

$

$

$

$

Segment Adjusted EBITDA

$

$

$

$

$

$

$

$

Segment Adjusted EBITDA Margin

%

%

%

%

%

%

%

%

Restructuring and other (credits) charges

$

—

$

(1

)

$

—

$

(1

)

$

(2

)

$

—

$

(1

)

$

1

Capital expenditures

$

$

$

$

$

$

$

$

Fastening Systems

Third-party sales

$

$

$

$

$

$

$

$

Provision for depreciation and amortization

$

$

$

$

$

$

$

$

Segment Adjusted EBITDA

$

$

$

$

$

$

$

$

Segment Adjusted EBITDA Margin

%

%

%

%

%

%

%

%

Restructuring and other charges

$

—

$

—

$

1

$

—

$

1

$

—

$

2

$

1

Capital expenditures

$

9

$

5

$

9

$

8

$

$

7

$

5

$

5

Engineered Structures

Third-party sales

$

$

$

$

$

$

$

$

Inter-segment sales

$

—

$

1

$

—

$

2

$

3

$

1

$

3

$

3

Provision for depreciation and amortization

$

$

$

$

$

$

$

$

Segment Adjusted EBITDA

$

$

$

$

$

$

$

$

Segment Adjusted EBITDA Margin

%

%

%

%

%

%

%

%

Restructuring and other charges

$

1

$

5

$

1

$

$

$

—

$

$

1

Capital expenditures

$

$

5

$

6

$

5

$

$

6

$

5

$

5

Forged Wheels

Third-party sales

$

$

$

$

$

$

$

$

Provision for depreciation and amortization

$

9

$

$

$

$

$

$

$

Segment Adjusted EBITDA

$

$

$

$

$

$

$

$

Segment Adjusted EBITDA Margin

%

%

%

%

%

%

%

%

Restructuring and other charges

$

—

$

—

$

—

$

—

$

—

$

—

$

—

$

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

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

)

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

Nine months ended

Cash provided from operations

$

$

$

$

Capital expenditures

)

)

)

)

Free cash flow

$

$

$

$

The Accounts Receivable Securitization program remains unchanged at

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.

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

Net income

$

$

$

Diluted earnings per share ("EPS")

$

$

$

Special items:

Restructuring

and other charges (credits)(1)

4

(1

)

Loss on debt redemption and related costs

—

—

6

Plant fire costs (reimbursements), net

1

(6

)

—

Collective bargaining agreement negotiations

1

—

—

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

1

—

(1

)

Subtotal: Pre-tax special items

7

4

Tax impact of Pre-tax special items(2)

(1

)

—

(1

)

Subtotal

6

3

Discrete and other tax special items(3)

(2

)

(6

)

)

Total: After-tax special items

4

)

Net income excluding Special items

$

$

$

Diluted EPS excluding Special items

$

$

$

Average number of shares - diluted EPS excluding Special items

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)

Q2 2024 includes non-cash Special items of a loss on sale of a small manufacturing facility in Engineered Structures $14 and other

exit costs, including accelerated depreciation $1.

(2)

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.

(3)

Discrete tax items for each period included the following:

•

for the quarter ended September 30, 2023, a net benefit for other small items ($1);

•

for the quarter ended June 30, 2024, an excess tax benefit for stock compensation ($5);

•

for the quarter ended September 30, 2024, a net benefit related to additional U.S. federal and state research and development ("R&D")

credits claimed for prior years upon completion of the Company's R&D study ($44), and an excess tax benefit for stock compensation

($2);

Howmet Aerospace Inc. and subsidiaries

Calculation of Financial Measures (unaudited), continued

(in U.S. dollar millions)

Reconciliation of Operational tax rate

Effective tax

rate, as

reported

Special

Operational

tax rate, as

adjusted

Effective tax

rate, as

reported

Special

Operational

tax rate, as

adjusted

Income before income taxes

$

$

4

$

$

$

$

Provision for income taxes

$

$

$

$

$

$

Tax rate

%

%

%

%

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 the quarter ended September 30, 2024 included Loss on debt redemption and related costs $6 offset by Restructuring

and other charges (credits) ($1) and Costs (benefits) associated with closures, supply chain disruptions, and other items ($1). Pre-tax

special items for the nine months ended September 30, 2024 included Restructuring and other charges (credits) $21 and Loss on debt redemption

and related costs $6 offset by Plant fire costs (reimbursements) ($6).

(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 each period included the following:

•

for the quarter ended September 30, 2024, a net benefit related to additional U.S. federal and state R&D credits claimed for prior

years upon completion of the Company's R&D study ($44), and an excess tax benefit for stock compensation ($2); and

•

for the nine months ended September 30, 2024, a net benefit related to additional U.S. federal and state R&D credits claimed for

prior years upon completion of the Company's R&D study ($44), an excess tax benefit for stock compensation ($9), a benefit to release

a valuation allowance related to U.S. foreign tax credits ($6), and a net charge for other small items $1.

Howmet Aerospace Inc. and subsidiaries

Calculation of Financial Measures (unaudited), continued

(in U.S. dollars millions)

Reconciliation of Adjusted EBITDA and Adjusted EBITDA margin excluding Special items

Sales

$

$

$

Operating income

$

$

$

Operating income margin

%

%

%

Net income

$

$

$

Add:

Provision for income taxes

$

$

$

Other expense, net

Loss on debt redemption

—

—

6

Interest expense, net

Restructuring and other charges (credits)

4

(1

)