Howmet Aerospace Inc.
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Item 1. Business.
General
Howmet Aerospace Inc. is a Delaware corporation with its principal office in Pittsburgh, Pennsylvania. In this report, unless the context otherwise requires, “Howmet”, the “Company”, “we”, “us”, and “our” refer to Howmet Aerospace Inc. and its consolidated subsidiaries.
The Company’s Internet address is https://www.howmet.com. Howmet makes available free of charge on or through its website its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as well as proxy statements, as soon as reasonably practicable after the Company electronically files such material with, or furnishes it to, the Securities and Exchange Commission (“SEC”). The Company’s website is included in this annual report on Form 10-K as an inactive textual reference only. The information on, or accessible through, the Company’s website is not a part of, or incorporated by reference in, this annual report on Form 10-K. The SEC maintains an Internet site that contains these reports at https://www.sec.gov.
Background
As described below, Howmet Aerospace Inc. was previously named Arconic Inc. and, prior to that, Alcoa Inc., a company formed in 1888.
The Arconic Inc. Separation Transaction. On April 1, 2020, Arconic Inc. separated its businesses (the “Arconic Inc. Separation Transaction”) into two independent, publicly traded companies: Howmet Aerospace Inc. (the new name for Arconic Inc.) and Arconic Corporation. Following this separation, Howmet retained the Engine Products, Fastening Systems, Engineered Structures, and Forged Wheels businesses; and its prior Rolled Products, Aluminum Extrusions, and Building and Construction Systems businesses were spun-off to Arconic Corporation. In connection with the Arconic Inc. Separation Transaction, Howmet and Arconic Corporation entered into several agreements that govern their post-separation relationship.
The 2017 Reincorporation in Delaware. On December 31, 2017, Arconic Inc., then a Pennsylvania corporation, changed its jurisdiction of incorporation from Pennsylvania to Delaware.
The Alcoa Inc. Separation Transaction. On November 1, 2016, Alcoa Inc. completed the separation of its businesses (the “Alcoa Inc. Separation Transaction”) into two independent, publicly traded companies: Arconic Inc. (the new name for Alcoa Inc., which, through the transactions described above, later became Howmet Aerospace Inc.) and Alcoa Corporation. Following this separation, the Company retained the Engineered Products and Solutions, Global Rolled Products, and Transportation and Construction Solutions businesses. In connection with the Alcoa Inc. Separation Transaction, the two companies entered into several agreements that govern their post-separation relationship.
Recent Developments
Consolidated Aerospace Manufacturing, LLC Acquisition Transaction. On December 22, 2025, the Company entered into an agreement with Stanley Black & Decker, Inc. (“Stanley Black & Decker”) to acquire Consolidated Aerospace Manufacturing, LLC (“CAM”), a wholly owned subsidiary of Stanley Black & Decker, for a cash purchase price of approximately $1.8 billion (the “Proposed CAM Acquisition”). The Proposed CAM Acquisition is expected to close in the first half of 2026, subject to customary closing conditions and regulatory approvals. See also “Liquidity and Capital Resources—Planned Financing for the Proposed CAM Acquisition” in Part II, Item 7 (Management’s Discussion and Analysis of Financial Condition and Results of Operations).
Brunner Manufacturing Co. Inc. Acquisition Transaction. On February 6, 2026, the Company acquired Brunner Manufacturing Co. Inc., a small privately-held manufacturer of high-quality fastener products located in the U.S., for an all-cash purchase price (the “Brunner acquisition”).
Overview
Howmet 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. Howmet’s technological capabilities support the innovation and growth of next-generation aerospace programs. Its differentiated technologies enable lighter, more fuel-efficient aircraft and commercial trucks to operate with a lower carbon footprint and support more sustainable air and ground transportation.
Howmet is a global company operating in 19 countries. Based upon the country where the point of shipment occurred, North America and Europe generated 72% and 22%, respectively, of Howmet’s sales in 2025. In addition to the United States, Canada, and Mexico in North America and France, United Kingdom, Hungary, and Germany in Europe, Howmet has operating activities in numerous other countries and regions, including Japan and China.
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Description of the Business
The Company produces products that are used in the aerospace (commercial and defense), commercial transportation, gas turbines, and other markets. Howmet seeks to provide its customers with innovative solutions through offering differentiated products such as airfoils with advanced cooling and coatings for extreme temperature applications; specially-designed fasteners for lightweight composite airframe construction, reduced assembly costs, and lightning strike protection; and lightweight aluminum commercial wheels. Its products and solutions include investment castings for jet engines and industrial gas turbines (nickel superalloys, titanium, and aluminum), including airfoils and structural parts; seamless rolled rings for jet engines (mostly nickel superalloys); fastening systems for aerospace, industrial and commercial transportation applications (titanium, steel, and nickel superalloys); forged jet engine components (e.g., jet engine disks); machined and forged aircraft parts (titanium and aluminum); and forged aluminum commercial vehicle wheels, all of which are sold directly to customers or through distributors.
Aerospace (Commercial and Defense) Market. Howmet’s largest market is aerospace, which represented approximately 70% of the Company’s revenue in 2025. The Company produces a range of high performance multi-materials, highly engineered products, and vertically integrated machined solutions for aero engines and airframe structures, ranging from investment castings, advanced coatings, seamless rings, forgings, titanium extrusions, and titanium mill products, to fasteners that hold aircraft together. Wingtip to wingtip, nose to tail, Howmet can produce more than 90% of all structural and rotating aero engine components. Modernization of the commercial and defense platforms is driven by an array of challenging performance requirements. With its precision engineering, materials science expertise, and advanced manufacturing processes, Howmet aims to help its customers achieve greater fuel economies, reduced emissions, passenger comfort, and maintenance efficiencies.
Commercial Transportation Market. The commercial transportation market represented approximately 15% of the Company’s revenue in 2025. The Company invented the forged aluminum truck wheel in 1948, and continues to advance technology to deliver breakthrough solutions that make trucks and buses lighter, more fuel efficient and sharper-looking. Howmet’s forged aluminum wheels are a leading choice for commercial trucks and mass transportation vehicles because they can reduce weight and save fuel. The strength of the Company’s rivets, bolts and fasteners offers another light-weighting solution that delivers performance.
Gas Turbines Market. The gas turbines market includes industrial gas turbines and oil and gas, which represented approximately 11% of the Company’s revenue in 2025. The gas turbines market constitutes turbine parts with advanced cooling and coatings for use in heavy-duty gas turbine units as well as small- to mid-sized gas turbine units. Turbines across these size ranges serve growing demand for electricity generation, driven by accelerating data center build-out.
In the fourth quarter 2025, the Company combined the revenue disclosure for the industrial gas turbine and oil & gas end markets into Gas Turbines. As a result of this change, the Company will no longer disclose the Industrial & Other end market. The revenue previously classified as general industrial is now classified as Other in our end market disclosures.
Other Market. The other market includes all other areas, which represented approximately 4% of the Company’s revenue in 2025.
Howmet has four reportable segments, which are organized by product on a worldwide basis: Engine Products, Fastening Systems, Engineered Structures and Forged Wheels.
Engine Products
Engine Products utilizes advanced designs and techniques to support next-generation engine programs and produces components primarily for aircraft engines and industrial gas turbines, including airfoils and seamless rolled rings. Engine Products produces rotating parts as well as structural parts. Engine Products principally serves the commercial and defense aerospace and gas turbines markets.
Fastening Systems
Fastening Systems produces aerospace and industrial fastening systems as well as commercial transportation fasteners and installation tools. In addition to highly engineered aerospace fasteners with a broad range of fastening systems, the segment also supplies the commercial transportation, renewable, and material handling industries. The business’s high-tech, multi-material fastening systems are found nose to tail on commercial and military aircraft, as well as on jet engines, industrial gas turbines, commercial transportation vehicles, wind turbines, solar power systems, and construction and industrial equipment. The Brunner acquisition will be included in the operations of the Fastening Systems segment after February 6, 2026. Upon completion of the announced Proposed CAM Acquisition, CAM operations are expected to be included in our Fastening Systems segment.
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Engineered Structures
Engineered Structures produces titanium ingots and mill products for aerospace and defense applications and is vertically integrated to produce titanium forgings, titanium extrusions, and machining services for airframe, wing, aero-engine, and landing gear components. Engineered Structures also produces aluminum forgings, nickel forgings, and aluminum machined components, and assemblies for aerospace and defense applications. The principal markets served by Engineered Structures are commercial aerospace, defense aerospace, and land and sea defense.
Forged Wheels
Forged Wheels manufactures lightweight, high-strength forged aluminum wheels for trucks, buses, and trailers, serving the global transportation market. The Company’s portfolio, sold under the Alcoa® Wheels brand, includes advanced wheel designs utilizing its MagnaForce® alloy, offering superior durability and performance. Compared to standard steel wheel configurations, our aluminum wheels deliver up to 59% weight savings per tractor-trailer, enabling greater payload capacity. Our proprietary Dura-Bright® surface treatment resists corrosion and significantly reduces maintenance requirements, helping fleets maintain a professional appearance while lowering operational costs.
For additional discussion of each segment's business, see “Results of Operations—Segment Information” in Part II, Item 7 (Management’s Discussion and Analysis of Financial Condition and Results of Operations) and Note C to the Consolidated Financial Statements in Part II, Item 8.
Sales by Market and Significant Customer Revenue
Sales by market for the years ended December 31, 2025, 2024, and 2023, were:
| For the Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Aerospace - Commercial | 53 | % | 52 | % | 49 | % | |||||||||||
| Aerospace - Defense | 17 | % | 16 | % | 15 | % | |||||||||||
| Commercial Transportation | 15 | % | 17 | % | 21 | ||||||||||||
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
(U.S. dollars in millions, except per share amounts)
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand our results of operations and financial condition. The MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and notes thereto included in Part I, Item 1 (Financial Statements and Supplementary Data) of this Form 10-Q.
Overview
Howmet is a global leader in lightweight metals engineering and manufacturing. Howmet’s innovative, multi-material products, which include nickel, titanium, aluminum, and cobalt, are used worldwide in the aerospace (commercial and defense), commercial transportation, gas turbines, and other markets.
In the first quarter ended March 31, 2026, the Company derived approximately 68% of its revenue from products sold to the commercial and defense aerospace markets. The timing and level of future aircraft builds by original equipment manufacturers (“OEMs”) are subject to changes and uncertainties, including but not limited to geopolitical tensions or volatility in global energy and raw material markets, which may cause our future results to differ from prior periods due to changes in product mix in certain segments.
For additional information regarding the ongoing risks related to our business, see section Part I, Item 1A, “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
Results of Operations
Earnings Summary:
Sales. Sales were $2,313 in the first quarter of 2026 compared to $1,942 in the first quarter of 2025. The increase of $371, or 19%, in the first quarter of 2026 was primarily due to growth in the commercial aerospace, defense aerospace, and gas turbines markets, including engine spares, favorable product pricing, and cost pass through, partially offset by lower volumes in the commercial transportation market. Product price increases are in excess of material and inflationary cost pass through to our customers.
Cost of goods sold (“COGS”). COGS as a percentage of Sales was 63.1% in the first quarter of 2026 compared to 66.4% in the first quarter of 2025. The decrease in the first quarter of 2026 was primarily due to favorable product pricing and volume growth, partially offset by cost pass through and increased net headcount, primarily in the Engine Products segment, in support of expected revenue increases.
Selling, general administrative, and other expenses (“SG&A”). SG&A expenses were $111 in the first quarter of 2026 compared to $85 in the first quarter of 2025. The increase of $26, or 31%, in the first quarter of 2026 was primarily due to higher employment costs, acquisition and acquisition-related costs, and various other administrative expenses.
Restructuring and other credits. Restructuring and other credits were $93 in the first quarter of 2026 compared to Restructuring and other credits of $4 in the first quarter of 2025. Restructuring and other credits for the first quarter of 2026 were primarily due to a gain on the sale of the Company’s disk forging facility in Savannah, Georgia within Engineered Structures of $93.
See Note E to the Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q for additional detail.
Interest expense, net. Interest expense, net was $43 in the first quarter of 2026 compared to $39 in the first quarter of 2025. The increase of $4, or 10%, in the first quarter of 2026 was primarily due to the March 2026 issuance of $1,200 in total notes with interest rates ranging from 3.750% to 4.750% and the November 2025 issuance of $500 of 4.550% Notes, partially offset by the early redemption of $625 of 5.900% Notes and prepayments of the USD Term Loan Facility during various periods in 2025. On an annual basis, the current year additions to Long-term debt are expected to increase Interest expense, net by approximately $50.
See Note O to the Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q for additional detail related to the Company’s debt.
Other expense, net. Other expense, net was $2 in the first quarter of 2026 compared to $9 in the first quarter of 2025. The decrease in expense of $7 in the first quarter of 2026 was primarily due to an increase in interest income of $6 resulting from additional cash on hand prior to the acquisition of Consolidated Aerospace Manufacturing. Non-service related net periodic benefit costs related to defined benefit plans and other postretirement benefit plans is expected to increase by approximately $5 for the full year 2026 versus 2025.
See Note G to the Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q for additional detail.
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Provision for income taxes. The estimated annual effective tax rate, before discrete items, applied to ordinary income was 21.1% in the first quarter ended March 31, 2026 compared to 20.8% in the first quarter ended March 31, 2025. The tax rate including discrete items was 18.1% in the first quarter of 2026 compared to 22.9% in the first quarter of 2025. A discrete net tax benefit of $21, primarily for stock-based compensation, was recorded in the first quarter of 2026 compared to a discrete net tax charge of $9 in the first quarter of 2025. The 2026 estimated annual effective tax rate was higher than the 2025 rate primarily due to increased state income tax and nondeductible expenses.
See Note H to the Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q for additional detail.
Net income. Net income was $580, or $1.44 per diluted share, in the first quarter of 2026 compared to $344, or $0.84 per diluted share, in the first quarter of 2025. The increase of $236 in the first quarter of 2026 was primarily due to growth in the commercial aerospace, defense aerospace, and gas turbines markets, including engine spares, as well as favorable product pricing, partially offset by lower volumes in the commercial transportation market.
Segment Information
The Company’s operations consist of four worldwide reportable segments: Engine Products, Fastening Systems, Engineered Structures, and Forged Wheels. Segment performance under Howmet’s management reporting system is evaluated based on Segment Adjusted EBITDA. The Company’s Chief Executive Officer, who has been determined to be our Chief Operating Decision Maker (“CODM”), believes that Segment Adjusted EBITDA provides information with respect to the Company’s operating performance and the Company’s ability to meet its financial obligations. Howmet’s definition of Segment Adjusted EBITDA is defined as Operating Income excluding Restructuring and other credits, Provision for depreciation and amortization, and Special items. Special items, including Restructuring and other credits, are excluded from Segment Adjusted EBITDA. Current and prior periods’ Segment Adjusted EBITDA calculations have not changed although the definitions have been simplified. The Company’s CODM considers forecast-to-actual variances for Segment Adjusted EBITDA when allocating resources across the Company’s reportable segments. Segment Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Differences between the total segment and consolidated totals are in Corporate. (See Note D to the Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q for a description of each segment).
The Company has aligned its operations consistent with how the Chief Executive Officer assesses operating performance and allocates capital.
In the first quarter of 2026, the Company’s CODM 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.
Engine Products
| First quarter ended | |||||||||||||||||||
| March 31, | |||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||
| Third-party sales | $ | 1,253 | $ | 974 | |||||||||||||||
| Segment Adjusted EBITDA | 458 | 318 | |||||||||||||||||
| Segment Adjusted EBITDA Margin | 36.6 | % | 32.6 | % | |||||||||||||||
Third-party sales for the Engine Products segment increased $279, or 29%, in the first quarter of 2026 compared to the first quarter of 2025, primarily due to growth in the commercial aerospace, defense aerospace, and gas turbines markets, including engine spares growth.
Segment Adjusted EBITDA for the Engine Products segment increased $140, or 44%, in the first quarter of 2026 compared to the first quarter of 2025, primarily due to growth in the commercial aerospace, defense aerospace, and gas turbines markets. The segment absorbed approximately 235 net headcount in the first quarter of 2026 in support of expected revenue increases.
Segment Adjusted EBITDA Margin for the Engine Products segment increased approximately 400 basis points in the first quarter of 2026 compared to the first quarter of 2025, primarily due to growth in the commercial aerospace, defense aerospace, and gas turbines markets.
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In 2026, as compared to 2025, demand in the commercial aerospace, defense aerospace, and gas turbines markets is expected to increase, including engine spares growth in these markets. Capital expenditures are expected to remain elevated, with additional investments in capacity expansions to support aerospace and gas turbines market growth. Governmental policies, laws and regulations, and other geopolitical and economic factors, including inflation, customer requirements, tariffs, and fluctuations in foreign currency exchange rates and interest rates, may affect future results of operations and cash flow. The timing, extent, application, and level of tariffs by various governments and our ability to recover tariffs are subject to changes and uncertainties.
Fastening Systems
| First quarter ended | |||||||||||||||||||
| March 31, | |||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||
| Third-party sales | $ | 471 | $ | 412 | |||||||||||||||
| Segment Adjusted EBITDA | 150 | 127 | |||||||||||||||||
| Segment Adjusted EBITDA Margin | 31.8 | % | 30.8 | % | |||||||||||||||
Third-party sales for the Fastening Systems segment increased $59, or 14%, in the first quarter of 2026 compared to the first quarter of 2025, primarily due to growth in the commercial aerospace and defense aerospace markets.
Segment Adjusted EBITDA for the Fastening Systems segment increased $23, or 18%, in the first quarter of 2026 compared to the first quarter of 2025, primarily due to growth in the commercial aerospace and defense aerospace markets.
Segment Adjusted EBITDA Margin for the Fastening Systems segment increased approximately 100 basis points in the first quarter of 2026 compared to the first quarter of 2025, primarily due to growth in the commercial aerospace and defense aerospace markets.
In 2026, as compared to 2025, demand in the commercial aerospace market is expected to increase. Demand in the commercial transportation market is expected to remain low with modest recovery in the second quarter of 2026, amid energy-related, economic, and regulatory uncertainty in North America. Governmental policies, laws and regulations, and other geopolitical and economic factors, including inflation, customer requirements, tariffs, and fluctuations in foreign currency exchange rates and interest rates, may affect future results of operations and cash flow. The timing, extent, application, and level of tariffs by various governments and our ability to recover tariffs are subject to changes and uncertainties.
The Brunner acquisition has been included in the operations of the Fastening Systems segment starting in February 2026. The CAM operations will be included in our Fastening Systems segment starting in the second quarter of 2026.
Engineered Structures
| First quarter ended | |||||||||||||||||||
| March 31, | |||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||
| Third-party sales | $ | 294 | $ | 304 | |||||||||||||||
| Segment Adjusted EBITDA | 66 | 67 | |||||||||||||||||
| Segment Adjusted EBITDA Margin | 22.4 | % | 22.0 | % | |||||||||||||||
Third-party sales for the Engineered Structures segment decreased $10, or 3%, in the first quarter of 2026 compared to the first quarter of 2025, primarily due to further product rationalization. The Engineered Structures segment continues to focus on the optimization of its manufacturing footprint and rationalization of product mix in order to maximize profitability.
Segment Adjusted EBITDA for the Engineered Structures segment was flat in the first quarter of 2026 compared to the first quarter of 2025.
Segment Adjusted EBITDA Margin for the Engineered Structures segment increased approximately 40 basis points in the first quarter of 2026 compared to the first quarter of 2025, primarily due to operational improvement efforts and lower net headcount.
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The Engineered Structures segment continues to focus on the optimization of its manufacturing footprint, including the recent sale of its disk forging facility in Savannah, Georgia, and rationalization of product mix in order to maximize profitability. In 2026, as compared to 2025, this is expected to result in lower revenue in the commercial aerospace and defense aerospace markets. Governmental policies, laws and regulations, and other geopolitical and economic factors, including inflation, customer requirements, tariffs, and fluctuations in foreign currency exchange rates and interest rates, may affect future results of operations and cash flow. The timing, extent, application, and level of tariffs by various governments and our ability to recover tariffs are subject to changes and uncertainties.
Forged Wheels
| First quarter ended | |||||||||||||||||||
| March 31, | |||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||
| Third-party sales | $ | 295 | $ | 252 | |||||||||||||||
| Segment Adjusted EBITDA | 90 | 68 | |||||||||||||||||
| Segment Adjusted EBITDA Margin | 30.5 | % | 27.0 | % | |||||||||||||||
Third-party sales for the Forged Wheels segment increased $43, or 17%, in the first quarter of 2026 compared to the first quarter of 2025 primarily due to an increase in aluminum and other inflationary cost pass through and favorable foreign currency exchange rates, partially offset by lower volumes in the commercial transportation market.
Segment Adjusted EBITDA for the Forged Wheels segment increased $22, or 32%, in the first quarter of 2026 compared to the first quarter of 2025, primarily due to cost reductions, including lower net headcount, as well as favorable foreign currency exchange rates, partially offset by lower volumes in the commercial transportation market.
Segment Adjusted EBITDA Margin for the Forged Wheels segment increased approximately 350 basis points in the first quarter of 2026 compared to the first quarter of 2025, primarily due to cost reductions, including lower net headcount in response to lower volumes in the commercial transportation market, as well as favorable foreign currency exchange rates, partially offset by higher aluminum and other inflationary cost pass through.
In 2026, as compared to 2025, demand in the commercial transportation markets served by Forged Wheels is expected to remain low with modest recovery in the second quarter of 2026, amid energy-related, economic, and regulatory uncertainty in North America. Governmental policies, laws and regulations, and geopolitical and other economic factors, including inflation, customer requirements, tariffs, and fluctuations in foreign currency exchange rates and interest rates, may affect future results of operations and cash flow. The timing, extent, application, and level of tariffs by various governments and our ability to recover tariffs are subject to changes and uncertainties.
Reconciliation of Total Segment Adjusted EBITDA to Income before income taxes
| First quarter ended | |||||||||||||||||||
| March 31, | |||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||
| Income before income taxes | $ | 708 | $ | 446 | |||||||||||||||
| Interest expense, net | 43 | 39 | |||||||||||||||||
| Other expense, net | 2 | 9 | |||||||||||||||||
| Operating income | $ | 753 | $ | 494 | |||||||||||||||
| Segment provision for depreciation and amortization | 72 | 68 | |||||||||||||||||
| Unallocated amounts: | |||||||||||||||||||
| Restructuring and other credits | (93) | (4) | |||||||||||||||||
Corporate expense(1) | 32 | 22 | |||||||||||||||||
| Total Segment Adjusted EBITDA | $ | 764 | $ | 580 | |||||||||||||||
(1) Corporate expense includes selling, general administrative and other expenses, costs of corporate headquarters, acquisition and acquisition-related costs, costs associated with closures, supply chain disruptions, and other items.
Total Segment Adjusted EBITDA is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because it provides additional information with respect to the Company’s operating performance and the Company’s ability to meet its financial obligations. Differences between the total segment and consolidated totals are in Corporate.
See Restructuring and other credits discussion above under “Results of Operations” for reference.
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Corporate expense increased $10, or 45%, in the first quarter of 2026 compared to the first quarter of 2025 primarily due to employment costs as well as acquisition and acquisition-related costs.
Environmental Matters
See the Environmental Matters section of Note Q to the Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q.
Subsequent Events
See Note R to the Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q for subsequent events.
Liquidity and Capital Resources
Operating Activities
Cash provided from operations was $453 in the first quarter ended March 31, 2026 compared to $253 in the first quarter ended March 31, 2025. The increase of $200, or 79%, was primarily due to higher operating results of $156 and lower working capital of $47. The components of the change in working capital primarily included favorable changes in accounts payable of $162 and receivables of $25, partially offset by unfavorable changes in inventories of $61, prepaid expenses and other current assets of $36, taxes, including income taxes, of $34, and other accrued expenses, including timing of interest payments on long-term debt and deferred revenue, of $9.
Management expects Howmet’s estimated pension contributions and other postretirement benefit payments in 2026 to be approximately $65.
Financing Activities
Cash provided from financing activities was $1,226 in the first quarter ended March 31, 2026 compared to cash used for financing activities of $167 in the first quarter ended March 31, 2025. The increase of $1,393, or 834%, was primarily due to additions to debt of $1,200, and a net increase in commercial paper of $450, partially offset by increased common stock repurchases of $175, increased taxes paid for the net share settlement of equity awards of $64 primarily due to the timing of payments year over year, debt issuance costs of $12, and increased dividends paid to common stock shareholders of $6 due to a $0.02 increase in dividends per common share, from $0.10 per share in the first quarter of 2025 to $0.12 per share in the first quarter of 2026. On an annual basis, the current year additions to Long-term debt are expected to increase Interest expense, net by approximately $50.
The declaration of future common stock dividends is subject to the discretion and approval of the Board of Directors of Howmet after the Board’s consideration of all factors it deems relevant and subject to applicable law.
The Company has entered into a Five-Year Revolving Credit Agreement that provides a $1,000 senior unsecured revolving credit facility (the “5-Year Revolving Credit Facility”) and a 364-Day Revolving Credit Agreement that provides a $600 senior unsecured revolving credit facility (the “364-Day Revolving Credit Facility” and, together with the 5-Year Revolving Credit Facility, the “Revolving Credit Facilities”) with a syndicate of lenders and issuers named therein (See Note O to the Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q for reference). There were no amounts outstanding as of March 31, 2026 or December 31, 2025, and no amounts were borrowed during 2026 or 2025 under these revolving credit agreements.
The Company has a commercial paper program under which the Company may issue unsecured commercial paper from time to time up to a maximum aggregate face amount of $1,000. The Company had $450 of commercial paper outstanding as of March 31, 2026, and no amounts were outstanding under the commercial paper program as of December 31, 2025. The Company had no commercial paper borrowings with original maturities greater than 90 days in 2026 or 2025. The Company’s commercial paper is sold on customary terms in the U.S. commercial paper market on a private placement basis. The proceeds of the commercial paper are used for general corporate purposes, including the CAM acquisition. In conjunction with the commercial paper program, the Company was assigned short-term credit ratings by Moody’s Investors Service, Inc., S&P Global Ratings, and Fitch Ratings, Inc.
The Company has an effective shelf registration statement on Form S-3, filed with the SEC, which allows for offerings of debt securities from time to time. The Company may opportunistically issue new debt securities in accordance with securities laws or utilize commercial paper in order to, but not limited to, refinance existing indebtedness. The Company continues to evaluate whether, when, and to what extent it may access capital markets, including any plans to refinance the JPY Term Loan Facility due November 2026. Our ability to refinance our indebtedness or enter into alternative financings in adequate amounts on commercially reasonable terms, or terms acceptable to us, may be affected by circumstances and economic events outside of our control. In the event that a refinancing does not occur before the November 2026 maturity date of the JPY Term Loan Facility, the Company believes that its projected cash on hand, and/or availability under the Revolving Credit Facilities will enable the Company to repay the JPY Term Loan Facility.
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In the future, the Company may, from time to time, redeem portions of its debt securities or repurchase portions of its debt or equity securities, in either the open market or through privately negotiated transactions, in accordance with applicable SEC and other legal requirements. The timing, prices, and sizes of purchases depend upon prevailing trading prices, general economic and market conditions, and other factors, including applicable securities laws. Such purchases may be completed by means of trading plans established from time to time in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, block trades, private transactions, open market repurchases, tender offers, and/or accelerated share repurchase agreements, or other derivative transactions.
The Company’s costs of borrowing and ability to access the capital markets are affected not only by market conditions but also by the short-term and long-term debt ratings assigned to the Company by the major credit rating agencies. The Company believes that its projected cash on hand and availability of its Revolving Credit Facilities, its commercial paper program, and its accounts receivables securitization program will continue to be sufficient to fund our operating and capital allocation activities.
The three major credit rating agencies have rated Howmet’s debt with investment grade ratings. The Company’s most recent short-term and long-term credit ratings, as well as the current outlook from the three major credit rating agencies are as follows:
| Short-Term | Long-Term | Outlook | |||||||||||||||
| S&P Global Ratings (“S&P”) | A-2 | BBB+ | Stable | ||||||||||||||
| Moody’s Investors Service, Inc. (“Moody’s”) | P-2 | Baa1 | Stable | ||||||||||||||
| Fitch Ratings, Inc. (“Fitch”) | F1 | A- | Stable | ||||||||||||||
On February 13, 2026, Fitch upgraded Howmet’s long-term debt rating from BBB+ to A-, citing conservative capital allocation and strong deleveraging momentum.
On September 8, 2025, S&P upgraded Howmet’s long-term debt rating from BBB to BBB+, and affirmed the current short-term debt rating and outlook at A-2 and stable, respectively, citing strong demand for commercial aerospace components, margin gains, and debt reduction.
On August 6, 2024, Moody’s upgraded Howmet’s short-term debt rating from P-3 to P-2, further upgraded Howmet’s long-term debt rating two notches from Baa3 to Baa1 citing demand in the markets served by Howmet along with the Company’s improved financial leverage, and updated the current outlook from positive to stable.
Investing Activities
Cash provided from investing activities was $14 in the first quarter ended March 31, 2026 compared to cash used for investing activities of $115 in the first quarter ended March 31, 2025. The increase of $129, or 112%, was primarily due to an increase in proceeds from the sale of assets and businesses of $220, a decrease in capital expenditures of $25, partially offset by acquisitions, net of cash acquired, of $118.
Total capital expenditures are anticipated to be approximately 5% of sales in 2026.
Recently Adopted and Recently Issued Accounting Guidance
29
Forward-Looking Statements
This report contains (and oral communications made by Howmet may contain) 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’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’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’s perception of historical trends, current conditions and expected future developments, as well as other factors Howmet 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, including due to escalating tariff and other trade policies and energy costs, and the resulting impacts on Howmet’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’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’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 it 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 report are made as of the date of the filing of this report. Howmet 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.
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-05-11 | Marchuk Neil Edward | EVP, CAO | Sell | -41,932 | $269.50 | -$11,300,536 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-08-01 10-Q expected by 2026-08-09 (in 47 days)
- ~2026-10-31 10-Q expected by 2026-11-08 (in 138 days)
- ~2027-02-11 10-K expected by 2027-02-26 (in 241 days)
- ~2027-05-08 10-Q expected by 2027-05-16 (in 327 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-05-28 8-K Other Events; Financial Statements and Exhibits
- 2026-05-28 S-3ASR S-3ASR
- 2026-05-07 8-K Earnings Release; Financial Statements and Exhibits
- 2026-05-07 10-Q Quarterly Report
- 2026-04-06 DEF 14A Proxy Statement
- 2026-04-06 8-K Completion of Acquisition/Disposition
- 2026-03-03 8-K Material Financial Obligation; Other Events; Financial Statements and Exhibits
- 2026-02-17 8-K Other Events; Financial Statements and Exhibits
- 2026-02-17 8-K Other Events
- 2026-02-12 10-K Annual Report
- 2026-02-12 8-K Earnings Release; Financial Statements and Exhibits
- 2025-12-22 8-K Regulation FD Disclosure; Other Events; Financial Statements and Exhibits
- 2025-11-17 8-K Other Events
- 2025-11-12 8-K Material Financial Obligation; Other Events; Financial Statements and Exhibits
- 2025-11-03 8-K Other Events; Financial Statements and Exhibits