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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549 
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-3610
HOWMET AEROSPACE INC.
(Exact name of registrant as specified in its charter)
Delaware25-0317820
(State of incorporation)  (I.R.S. Employer Identification No.)

201 Isabella Street, Suite 200, Pittsburgh, Pennsylvania 15212-5872
(Address of principal executive offices)      (Zip code)

Investor Relations 412-553-1950
Office of the Secretary 412-553-1940
(Registrant’s telephone number including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading SymbolName of each exchange on which registered 
Common Stock, par value $1.00 per shareHWMNew York Stock Exchange
$3.75 Cumulative Preferred Stock,
par value $100.00 per share
HWM PRNYSE American
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes      No     
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes      No      
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
x
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes     No  x
As of April 29, 2022, there were 417,914,089 shares of common stock, par value $1.00 per share, of the registrant outstanding.







TABLE OF CONTENTS 
  Page
Part I
Item 1.
Item 2.
Item 3.
Item 4.
Part II
Item 1.
Item 1A.
Item 2.
Item 6.




PART I – FINANCIAL INFORMATION
Item 1. Financial Statements and Supplementary Data.
Howmet Aerospace Inc. and subsidiaries
Statement of Consolidated Operations (unaudited)
(U.S. dollars in millions, except per-share amounts)
First quarter ended
 March 31,
 20222021
Sales (C)
$1,324 $1,209 
Cost of goods sold (exclusive of expenses below)950 873 
Selling, general administrative, and other expenses69 65 
Research and development expenses7 5 
Provision for depreciation and amortization66 68 
Restructuring and other charges (D)
2 9 
Operating income230 189 
Interest expense, net58 72 
Other expense, net (F)
1 4 
Income before income taxes171 113 
Provision for income taxes (G)
40 33 
Net income$131 $80 
Amounts Attributable to Howmet Aerospace Common Shareholders (H):
Net income$130 $79 
Earnings per share:
Basic$0.31 $0.18 
Diluted$0.31 $0.18 
Average Shares Outstanding (H):
Basic419 434 
Diluted425 439 
The accompanying notes are an integral part of the consolidated financial statements.

3


Howmet Aerospace Inc. and subsidiaries
Statement of Consolidated Comprehensive Income (unaudited)
(U.S. dollars in millions)
First quarter ended
 March 31,
20222021
Net income$131 $80 
Other comprehensive (loss) income, net of tax (I):
Change in unrecognized net actuarial loss and prior service cost related to pension and other postretirement benefits10 42 
Foreign currency translation adjustments (31)(44)
Net change in unrecognized gains on cash flow hedges20 4 
Total Other comprehensive (loss) income, net of tax (1)2 
Comprehensive income$130 $82 
The accompanying notes are an integral part of the consolidated financial statements.
4


Howmet Aerospace Inc. and subsidiaries
Consolidated Balance Sheet (unaudited)
(U.S. dollars in millions)
March 31, 2022December 31, 2021
Assets
Current assets:
Cash and cash equivalents$520 $720 
Receivables from customers, less allowances of $1 in 2022 and $ in 2021 (J)
479 367 
Other receivables (J)
50 53 
Inventories (K)
1,483 1,402 
Prepaid expenses and other current assets250 195 
Total current assets2,782 2,737 
Properties, plants, and equipment, net (L)
2,400 2,467 
Goodwill4,053 4,067 
Deferred income taxes149 184 
Intangibles, net543 549 
Other noncurrent assets (M)
202 215 
Total assets$10,129 $10,219 
Liabilities
Current liabilities:
Accounts payable, trade$777 $732 
Accrued compensation and retirement costs172 198 
Taxes, including income taxes63 61 
Accrued interest payable69 74 
Other current liabilities (M)
171 183 
Short-term debt (N)
3 5 
Total current liabilities1,255 1,253 
Long-term debt, less amount due within one year (N and O)
4,228 4,227 
Accrued pension benefits (E)
746 771 
Accrued other postretirement benefits (E)
152 153 
Other noncurrent liabilities and deferred credits (M)
291 307 
Total liabilities6,672 6,711 
Contingencies and commitments (Q)
Equity
Howmet Aerospace shareholders’ equity:
Preferred stock55 55 
Common stock418 422 
Additional capital4,123 4,291 
Retained earnings725 603 
Accumulated other comprehensive loss (I)
(1,864)(1,863)
Total equity3,457 3,508 
Total liabilities and equity$10,129 $10,219 
The accompanying notes are an integral part of the consolidated financial statements.
5


Howmet Aerospace Inc. and subsidiaries
Statement of Consolidated Cash Flows (unaudited)
(U.S. dollars in millions)
Three months ended
 March 31,
 20222021
Operating activities
Net income$131 $80 
Adjustments to reconcile net income to cash provided from (used for) operations:
Depreciation and amortization66 68 
Deferred income taxes28 10 
Restructuring and other charges2 9 
Net loss from investing activities—asset sales3 3 
Net periodic pension cost (E)
6 4 
Stock-based compensation11 6 
Other22 14 
Changes in assets and liabilities, excluding effects of acquisitions, divestitures, and foreign currency translation adjustments:
Increase in receivables (J)
(123)(144)
(Increase) decrease in inventories(87)20 
Decrease in prepaid expenses and other current assets5 23 
Increase in accounts payable, trade68 26 
Decrease in accrued expenses (54)(92)
Increase in taxes, including income taxes6 12 
Pension contributions (11)(29)
Increase in noncurrent assets(1)(2)
Decrease in noncurrent liabilities(17)(14)
Cash provided from (used for) operations55 (6)
Financing Activities
Net change in short-term borrowings (original maturities of three months or less)(3)(2)
Payments on debt (original maturities greater than three months) (N)
 (361)
Debt issuance costs (N)
 (1)
Repurchase of common stock(175) 
Proceeds from exercise of employee stock options7 8 
Dividends paid to shareholders(9)(1)
Other(14)(11)
Cash used for financing activities(194)(368)
Investing Activities
Capital expenditures (C)
(62)(55)
Proceeds from the sale of assets and businesses 1  
Cash receipts from sold receivables (J)
 57 
Other 1 
Cash (used for) provided from investing activities(61)3 
Effect of exchange rate changes on cash, cash equivalents and restricted cash (1)
Net change in cash, cash equivalents and restricted cash (200)(372)
Cash, cash equivalents and restricted cash at beginning of period 722 1,611 
Cash, cash equivalents and restricted cash at end of period$522 $1,239 
The accompanying notes are an integral part of the consolidated financial statements.
6


Howmet Aerospace Inc. and subsidiaries
Statement of Changes in Consolidated Equity (unaudited)
(U.S. dollars in millions, except per-share amounts)
 Howmet Aerospace Shareholders 
 Preferred
stock
Common
stock
Additional
capital
Retained earningsAccumulated
other
comprehensive
loss
Total
Equity
Balance at December 31, 2020$55 $433 $4,668 $364 $(1,943)$3,577 
Net income— — — 80 — 80 
Other comprehensive income (I)
— — — — 2 2 
Cash dividends declared:
Preferred-Class A @ $0.9375 per share
— — — (1)— (1)
Stock-based compensation — — 6 — — 6 
Common stock issued: compensation plans — 1 (3)— — (2)
Balance at March 31, 2021$55 $434 $4,671 $443 $(1,941)$3,662 
 Howmet Aerospace Shareholders 
 Preferred
stock
Common
stock
Additional
capital
Retained earningsAccumulated
other
comprehensive
loss
Total
Equity
Balance at December 31, 2021$55 $422 $4,291 $603 $(1,863)$3,508 
Net income— — — 131 — 131 
Other comprehensive income (I)
— — — — (1)(1)
Cash dividends declared:
Preferred-Class A @ $0.9375 per share
— — — (1)— (1)
Common @ $0.02 per share
— — — (8)— (8)
Repurchase and retirement of common stock— (5)(170)— — (175)
Stock-based compensation — — 11 — — 11 
Common stock issued: compensation plans — 1 (9)— — (8)
Balance at March 31, 2022$55 $418 $4,123 $725 $(1,864)$3,457 

The accompanying notes are an integral part of the consolidated financial statements.
7


Howmet Aerospace Inc. and subsidiaries
Notes to the Consolidated Financial Statements (unaudited)
(U.S. dollars in millions, except share and per-share amounts)
A. Basis of Presentation
The interim Consolidated Financial Statements of Howmet Aerospace Inc. and subsidiaries (“Howmet” or the “Company” or “we” or “our”) are unaudited. These Consolidated Financial Statements include all adjustments, consisting only of normal recurring adjustments, considered necessary by management to fairly state the Company’s results of operations, financial position, and cash flows. The results reported in these Consolidated Financial Statements are not necessarily indicative of the results that may be expected for the entire year. The 2021 year-end balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). This Form 10-Q report should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2021, which includes all disclosures required by GAAP. Certain amounts in previously issued financial statements were reclassified to conform to the current period presentation.
In the first quarter of 2022 and 2021, the Company derived approximately 61% and 60%, respectively, of its revenue from products sold to the aerospace market. Due to the global COVID-19 pandemic and its impact on the aerospace industry to date, there has been a decrease in domestic and international air travel. As a result, the demand for narrow body and wide body aircraft has been adversely affected. Narrow body demand is returning faster than wide body demand, creating a shift in product mix compared to pre-pandemic conditions. Since the duration of the pandemic is uncertain, management has taken a series of actions to address the financial impact, including fixed and variable cost reductions, such as headcount reductions in certain segments, and reducing the level of capital expenditures to preserve cash and maintain liquidity.
The preparation of the Consolidated Financial Statements of the Company in conformity with GAAP requires management to make certain judgments, estimates, and assumptions. These estimates are based on historical experience and, in some cases, assumptions based on current and future market experience, including considerations relating to the impact of COVID-19. The impact of COVID-19 is rapidly changing and of unknown duration and macroeconomic impact and, as a result, these considerations remain highly uncertain. Management has made its best estimates using all relevant information available at the time, but it is possible that our estimates will differ from our actual results and affect the Consolidated Financial Statements in future periods and potentially require adverse adjustments to the recoverability of goodwill, intangible and long-lived assets, the realizability of deferred tax assets and other judgments and estimations and assumptions that may be impacted by COVID-19.
B. Recently Adopted and Recently Issued Accounting Guidance
Adopted
On January 1, 2021, the Company adopted changes issued by the Financial Accounting Standards Board (“FASB”) that were intended to simplify various aspects of accounting for income taxes by eliminating certain exceptions contained in existing guidance and amending other guidance to simplify several other income tax accounting matters. The adoption of this new guidance did not have a material impact on the Consolidated Financial Statements.
Issued
In March 2020, the FASB issued amendments that provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform, if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference London Inter-bank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. Based upon the provisions of our agreements that were amended to date, management does not believe that the impact of these changes will have a material impact on the Consolidated Financial Statements.
C. Segment Information
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, and industrial and other markets. Segment performance under Howmet’s management reporting system is evaluated based on a number of factors; however, the primary measure of performance is Segment Adjusted EBITDA. Prior to the first quarter of 2022, the Company used Segment operating profit as its primary measure of performance. However, the Company’s Chief Executive Officer believes that Segment Adjusted EBITDA is now a better representation of its business because it provides additional 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 (Earnings before interest, taxes, depreciation, and amortization) is net margin plus an add-back for depreciation and amortization. Net margin is equivalent to
8


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, are also excluded from Net margin and Segment Adjusted EBITDA. 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.
Howmet’s operations consist of four worldwide reportable segments as follows:
Engine Products
Engine Products produces investment castings, including airfoils, and seamless rolled rings primarily for aircraft engines and industrial gas turbines. Engine Products produces rotating parts as well as structural parts.
Fastening Systems
Fastening Systems produces aerospace fastening systems, as well as commercial transportation, industrial and other fasteners. The business’s high-tech, multi-material fastening systems are found nose to tail on aircraft and aero engines. Fastening Systems’ products are also critical components of commercial transportation vehicles, automobiles, construction and industrial equipment, and renewable energy sectors.
Engineered Structures
Engineered Structures produces titanium ingots and mill products for aerospace and defense applications and is vertically integrated to produce titanium forgings, extrusions, forming 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.
Forged Wheels
Forged Wheels provides forged aluminum wheels and related products for heavy-duty trucks and the commercial transportation market.
The operating results of the Company’s reportable segments were as follows.
Engine ProductsFastening SystemsEngineered StructuresForged WheelsTotal
Segment
First quarter ended March 31, 2022
Sales:
Third-party sales$631 $264 $182 $247 $1,324 
Inter-segment sales1  1  2 
Total sales$632 $264 $183 $247 $1,326 
Profit and loss:
Provision for depreciation and amortization31 12 12 10 65 
Segment Adjusted EBITDA173 56 23 67 319 
Restructuring and other charges (credits)3 (3)2  2 
Capital expenditures27 15 7 9 58 
First quarter ended March 31, 2021
Sales:
Third-party sales$534 $272 $176 $227 $1,209 
Inter-segment sales1  1  2 
Total sales$535 $272 $177 $227 $1,211 
Profit and loss:
Provision for depreciation and amortization31 12 12 10 65 
Segment Adjusted EBITDA132 57 22 80 291 
Restructuring and other charges5 2 1  8 
Capital expenditures11 5 5 9 30 
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The following table reconciles Total Segment Adjusted EBITDA to Income before income taxes:
First quarter ended
March 31,
20222021
Total Segment Adjusted EBITDA$319 $291 
Segment provision for depreciation and amortization(65)(65)
Unallocated amounts:
Restructuring and other charges(2)(9)
Corporate expense(22)(28)
Operating income$230 $189 
Interest expense, net(58)(72)
Other expense, net(1)(4)
Income before income taxes$171 $113 
Differences between the total segment and consolidated totals are in Corporate. The following table reconciles total segment capital expenditures with Capital expenditures as presented in the Statement of Consolidated Cash Flows.
First quarter ended
March 31,
20222021
Total segment capital expenditures$58 $30 
Corporate4 25 
Capital expenditures$62 $55 
The following table disaggregates segment revenue by major market served. Differences between the total segment and consolidated totals are in Corporate.
Engine ProductsFastening SystemsEngineered StructuresForged WheelsTotal
Segment
First quarter ended March 31, 2022
Aerospace - Commercial$329 $148 $109 $ $586 
Aerospace - Defense 137 32 57  226 
Commercial Transportation 53  247 300 
Industrial and Other165 31 16  212 
Total end-market revenue$631 $264 $182 $247 $1,324 
First quarter ended March 31, 2021
Aerospace - Commercial$227 $148 $80 $ $455 
Aerospace - Defense 151 42 77  270 
Commercial Transportation 46  227 273 
Industrial and Other156 36 19  211 
Total end-market revenue$534 $272 $176 $227 $1,209 
The Company derived 61% and 60% of its revenue from the aerospace market for the first quarter ended March 31, 2022 and 2021, respectively.
General Electric Company represented approximately 13% and 11% of the Company’s third-party sales for the first quarter ended March 31, 2022 and 2021, respectively, primarily from Engine Products.

10


D. Restructuring and Other Charges
First quarter ended
March 31,
20222021
(Reversals of) adjustments to previously recorded layoff reserves$(1)$1 
Pension and Other post-retirement benefits - net settlements (E)
1 3 
Net loss related to divestitures of assets and businesses (P)
 4 
Other2 1 
Restructuring and other charges$2 $9 
In the first quarter of 2022, the Company recorded Restructuring and other charges of $2, which were primarily due to exit related costs of $2 and charges for a U.S. pension plan settlement of $1, partially offset by a reversal of $1 for a layoff reserve related to a prior period.
In the first quarter of 2021, the Company recorded Restructuring and other charges of $9, which included a $4 charge for impairment of assets associated with an agreement to sell a small manufacturing business in France, a $3 charge for U.S. pension plans' settlement accounting, a $1 adjustment related to a number of prior period program reserves and a $1 charge for exit costs including accelerated depreciation.
Layoff costsOther exit costsTotal
Reserve balances at December 31, 2021$17 $2 $19 
Cash payments(2)(2)(4)
Restructuring charges 2 2 
Other(1)
(1) (1)
Reserve balances at March 31, 2022$14 $2 $16 
(1)In the first quarter of 2022, Other for layoff costs included a $1 charge for a pension plan settlement.
The majority of the layoff cost and other exit cost reserves is expected to be paid in cash during 2022, with small amounts to be paid through 2024.
E. Pension and Other Postretirement Benefits
The components of net periodic cost (benefit) were as follows:
First quarter ended
 March 31,
20222021
Pension benefits
Service cost$1 $1 
Interest cost12 12 
Expected return on plan assets(20)(23)
Recognized net actuarial loss13 14 
Settlements1 3 
Net periodic cost(1)
$7 $7 
Other postretirement benefits  
Service cost$ $ 
Interest cost1 1 
Recognized net actuarial loss  
Amortization of prior service benefit(2)(1)
Net periodic benefit(1)
$(1)$ 
 
(1)Service cost was included within Cost of goods sold, Selling, general administrative, and other expenses, and Research and
11


development expenses; settlements were included in Restructuring and other charges; and all other cost components were recorded in Other expense, net in the Statement of Consolidated Operations.
Pension benefits
For the first quarter of 2022 and 2021, the Company applied settlement accounting to certain U.S. pension plans due to lump sum payments made to participants, which resulted in settlement charges for the quarter of $1 and $3, respectively, that were recorded in Restructuring and other charges in the Statement of Consolidated Operations.
On March 11, 2021, the American Rescue Plan Act of 2021 (“ARPA 2021”) was signed into law in the United States. ARPA 2021, in part, provides temporary relief for employers who sponsor defined benefit pension plans related to funding contributions under the Employee Retirement Income Security Act of 1974. For the first quarter of 2022 and 2021, Howmet’s pension contributions and other postretirement benefit payments were approximately $13 and $33, respectively.
Other postretirement benefits
In the first quarter of 2021, the Company announced a plan administration change of certain of its Medicare-eligible prescription drug benefits to an Employer Group Waiver Plan with a wrap-around secondary plan effective July 1, 2021. The administration change is expected to reduce costs to the Company through the usage of Medicare Part D and drug manufacturer subsidies. Due to this amendment, along with the associated plan remeasurements, the Company recorded a decrease to its Accrued other postretirement benefits liability of $39, which was offset in Accumulated other comprehensive loss in the Consolidated Balance Sheet.
F. Other Expense, Net
First quarter ended
 March 31,
20222021
Non-service related net periodic benefit cost$4 $3 
Foreign currency (gains) losses, net(3)2 
Net loss from asset sales3 3 
Deferred compensation(3)2 
Other, net (6)
Other expense, net$1 $4 
G. Income Taxes
The Company’s year-to-date tax provision is comprised of the most recent estimated annual effective tax rate applied to year-to-date pre-tax ordinary income. The tax impacts of unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, are recorded discretely in the interim period in which they occur. In addition, the tax provision is adjusted for the interim period impact of non-benefited pre-tax losses.
The estimated annual effective tax rate, before discrete items, applied to ordinary income was 24.3% in the first quarter of 2022 and 30.4% in the first quarter of 2021. The 2022 and 2021 rates were higher than the U.S. federal statutory rate of 21% primarily due to additional estimated U.S. tax on Global Intangible Low-Taxed Income (“GILTI”) and other foreign earnings, incremental state tax and foreign taxes on earnings also subject to U.S. federal income tax, and nondeductible expenses.
For the first quarter of 2022 and 2021, the tax rate including discrete items was 23.4% and 29.2%, respectively. For the first quarter of 2022, the Company recorded a discrete net tax benefit of $2 for other items. For the first quarter of 2021, the Company recorded a discrete net tax benefit of $1 for other items.
The tax provision for the first quarter ended March 31, 2022 and 2021 was comprised of the following:
First quarter ended
 March 31,
 20222021
Pre-tax income at estimated annual effective income tax rate before discrete items$42 $34 
Other discrete items(2)(1)
Provision for income taxes$40 $33 
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H. Earnings Per Share
Basic earnings per share (“EPS”) amounts are computed by dividing earnings, after the deduction of preferred stock dividends declared, by the average number of common shares outstanding. Diluted EPS amounts assume the issuance of common stock for all potentially dilutive share equivalents outstanding.
The information used to compute basic and diluted EPS attributable to Howmet common shareholders was as follows (shares in millions):
First quarter ended
 March 31,
 20222021
Net income attributable to common shareholders$131 $80 
Less: preferred stock dividends declared1 1 
Net income available to Howmet Aerospace common shareholders - basic and diluted$130 $79 
Average shares outstanding - basic419 434 
Effect of dilutive securities:
Stock options 1 
Stock and performance awards6 4 
Average shares outstanding - diluted425 439 
Common stock outstanding at March 31, 2022 and 2021 was approximately 418 million and 434 million, respectively.
On August 18, 2021, the Company announced that its Board of Directors authorized a share repurchase program of up to $1,500 of the Company's outstanding common stock. In the quarter ended March 31, 2022, the Company repurchased approximately 5 million shares of its common stock at an average price of $34.00 per share (excluding commissions cost) for $175 in cash. All of the shares repurchased have been retired. After giving effect to the share repurchases made through March 31, 2022, approximately $1,172 Board authorization remains available. Under the Company’s share repurchase programs (the “Share Repurchase Programs”), the Company may repurchase shares 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 and/or accelerated share repurchase agreements or other derivative transactions. There is no stated expiration for the Share Repurchase Programs. Under its Share Repurchase Programs, 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, including limits under its Five-Year Revolving Credit Agreement (the “Credit Agreement”) (see Note N). The Company is not obligated to repurchase any specific number of shares or to do so at any particular time, and the Share Repurchase Programs may be suspended, modified or terminated at any time without prior notice.
The approximately 15 million decrease in average shares outstanding (basic) for the first quarter of 2022 compared to the first quarter of 2021 was primarily due to the approximately 19 million shares repurchased during 2021 and 2022. As average shares outstanding are used in the calculation for both basic and diluted EPS, the full impact of share repurchases was not realized in EPS in the first quarter of 2022 as share repurchases occurred at varying points during the quarter.
The following shares were excluded from the calculation of average shares outstanding – diluted as their effect was anti-dilutive (shares in millions):
First quarter ended
 March 31,
 20222021
Stock options(1)
 1 
(1)There were no anti-dilutive shares as of March 31, 2022. The weighted average exercise price per share of options excluded from diluted EPS was $31.86 as of March 31, 2021.

13


I. Accumulated Other Comprehensive Loss
The following table details the activity of the three components that comprise Accumulated other comprehensive loss:
First quarter ended
March 31,
20222021
Pension and other postretirement benefits (E)
Balance at beginning of period$(799)$(980)
Other comprehensive income:
Unrecognized net actuarial gain and prior service cost/benefit1 37 
Tax expense (8)
Total Other comprehensive income before reclassifications, net of tax1 29 
Amortization of net actuarial loss and prior service cost(1)
12 16 
Tax expense(2)
(3)(3)
Total amount reclassified from Accumulated other comprehensive loss, net of tax(3)
9 13 
Total Other comprehensive income10 42 
Balance at end of period$(789)$(938)
Foreign currency translation
Balance at beginning of period$(1,062)$(966)
Other comprehensive loss(31)(44)
Balance at end of period$(1,093)$(1,010)
Cash flow hedges
Balance at beginning of period$(2)$3 
Other comprehensive income (loss):
Net change from periodic revaluations25 8 
Tax expense(6)(2)
Total Other comprehensive income before reclassifications, net of tax19 6 
Net amount reclassified to earnings1 (3)
Tax benefit(2)
 1 
Total amount reclassified from Accumulated other comprehensive income (loss), net of tax(3)
1 (2)
Total Other comprehensive income20 4 
Balance at end of period$18 $7 
Accumulated other comprehensive loss$(1,864)$(1,941)

(1)These amounts were recorded in Other expense, net (see Note F) and Restructuring and other charges (see Note D) in the Statement of Consolidated Operations.
(2)These amounts were included in Provision for income taxes (see Note G) in the Statement of Consolidated Operations.
(3)A positive amount indicates a corresponding charge to earnings and a negative amount indicates a corresponding benefit to earnings.
J. Receivables
Sale of Receivables Programs
The Company has historically maintained two accounts receivables securitization arrangements. The net cash funding from the sale of accounts receivable was neither a use of cash nor a source of cash for the first quarter of 2022 or 2021.
The first was an arrangement with financial institutions to sell certain customer receivables without recourse on a revolving basis (the “Receivables Sale Program”) and was terminated on August 30, 2021. This arrangement historically provided up to a maximum funding of $300 for receivables sold. Cash receipts from customer payments on sold receivables (which were cash receipts on the underlying trade receivables that had been previously sold) as well as cash receipts and cash disbursements from
14


draws and repayments under the program were presented as cash receipts from sold receivables within investing activities in the Statement of Consolidated Cash Flows. The Company had $26 net cash repayments ($18 in draws and $44 in repayments) for the three months ended March 31, 2021 in connection with this arrangement.
The second accounts receivables securitization arrangement is one in which the Company, through a wholly-owned special purpose entity (“SPE”), has a receivables purchase agreement (the “Receivables Purchase Agreement”) such that the SPE may sell certain receivables to financial institutions until the earlier of August 30, 2024 or a termination event. The Receivables Purchase Agreement also contains customary representations and warranties, as well as affirmative and negative covenants. Pursuant to the Receivables Purchase Agreement, the Company does not maintain effective control over the transferred receivables, and therefore accounts for these transfers as sales of receivables. This accounts receivable securitization arrangement totaled $325 at both March 31, 2022 and December 31, 2021 of which $250 was drawn as of both March 31, 2022 and December 31, 2021. As collateral against the sold receivables, the SPE maintains a certain level of unsold receivables, which were $100 and $79 at March 31, 2022 and December 31, 2021, respectively.
The Company sold $464 and $84 of its receivables without recourse and received cash funding under this program during the three months ended March 31, 2022 and March 31, 2021, respectively, resulting in derecognition of the receivables from the Company’s Consolidated Balance Sheet. Costs associated with the sales of receivables are reflected in the Company’s Statement of Consolidated Operations for the periods in which the sales occur. Cash receipts from sold receivables under the Receivables Purchase Agreement are presented within operating activities in the Statement of Consolidated Cash Flows.
Other Customer Receivable Sales
In the first quarter of 2022, the Company sold $106 of certain customers’ receivables in exchange for cash ($110 was outstanding from customers at March 31, 2022), the proceeds from which are presented in changes in receivables within operating activities in the Statement of Consolidated Cash Flows. In the first quarter of 2021, the Company sold $66 of certain customers’ receivables in exchange for cash, the proceeds from which are presented in changes in receivables within operating activities in the Statement of Consolidated Cash Flows.
K. Inventories
March 31, 2022December 31, 2021
Finished goods$487 $478 
Work-in-process676 631 
Purchased raw materials279 256 
Operating supplies41 37 
Total inventories$1,483 $1,402 

At March 31, 2022 and December 31, 2021, the portion of inventories valued on a last-in, first-out (“LIFO”) basis was $588 and $523, respectively. These amounts exclude the effects of LIFO valuation reductions, which were $201 and $192 at March 31, 2022 and December 31, 2021, respectively.
L. Properties, Plants, and Equipment, net
March 31, 2022December 31, 2021
Land and land rights(1)
$90 $91 
Structures(1)
959 1,034 
Machinery and equipment3,961