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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 September 30, 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 October 27, 2022, there were 413,712,037 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)
Third quarter endedNine months ended
 September 30,September 30,
 2022202120222021
Sales (C)
$1,433 $1,283 $4,150 $3,687 
Cost of goods sold (exclusive of expenses below)1,056 928 2,993 2,658 
Selling, general administrative, and other expenses73 70 225 190 
Research and development expenses7 4 23 13 
Provision for depreciation and amortization65 68 198 203 
Restructuring and other charges (D)
4 8 12 22 
Operating income228 205 699 601 
Loss on debt redemption (N)
 118 2 141 
Interest expense, net57 63 172 201 
Other expense, net (F)(Q)
67 1 67 13 
Income before income taxes104 23 458 246 
Provision (benefit) for income taxes (G)
24 (4)100 65 
Net income$80 $27 $358 $181 
Amounts Attributable to Howmet Aerospace Common Shareholders (H):
Net income$79 $26 $356 $179 
Earnings per share:
Basic$0.19 $0.06 $0.86 $0.42 
Diluted$0.19 $0.06 $0.84 $0.41 
Average Shares Outstanding (in millions) (H):
Basic415 429 417 431 
Diluted420 434 422 437 
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)
Third quarter endedNine months ended
 September 30,September 30,
2022202120222021
Net income$80 $27 $358 $181 
Other comprehensive income (loss), net of tax (I):
Change in unrecognized net actuarial loss and prior service cost related to pension and other postretirement benefits7 13 39 90 
Foreign currency translation adjustments (128)(36)(273)(62)
Net change in unrecognized gains (losses) on cash flow hedges2 (4)(14)4 
Total Other comprehensive (loss) income, net of tax (119)(27)(248)32 
Comprehensive (loss) income$(39)$ $110 $213 
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)
September 30, 2022December 31, 2021
Assets
Current assets:
Cash and cash equivalents$453 $720 
Receivables from customers, less allowances of $ in both 2022 and 2021 (J)
550 367 
Other receivables (J)
50 53 
Inventories (K)
1,612 1,402 
Prepaid expenses and other current assets181 195 
Total current assets2,846 2,737 
Properties, plants, and equipment, net (L)
2,288 2,467 
Goodwill3,965 4,067 
Deferred income taxes106 184 
Intangibles, net523 549 
Other noncurrent assets (M)
201 215 
Total assets$9,929 $10,219 
Liabilities
Current liabilities:
Accounts payable, trade$812 $732 
Accrued compensation and retirement costs204 198 
Taxes, including income taxes56 61 
Accrued interest payable68 74 
Other current liabilities (M)(Q)
240 183 
Short-term debt (N)
1 5 
Total current liabilities1,381 1,253 
Long-term debt, less amount due within one year (N)(O)
4,170 4,227 
Accrued pension benefits (E)
689 771 
Accrued other postretirement benefits (E)
147 153 
Other noncurrent liabilities and deferred credits (M)
269 307 
Total liabilities6,656 6,711 
Contingencies and commitments (Q)
Equity
Howmet Aerospace shareholders’ equity:
Preferred stock55 55 
Common stock414 422 
Additional capital3,998 4,291 
Retained earnings917 603 
Accumulated other comprehensive loss (I)
(2,111)(1,863)
Total equity3,273 3,508 
Total liabilities and equity$9,929 $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)
Nine months ended
 September 30,
 20222021
Operating activities
Net income$358 $181 
Adjustments to reconcile net income to cash provided from operations:
Depreciation and amortization198 203 
Deferred income taxes58 24 
Restructuring and other charges12 22 
Net realized and unrealized losses12 7 
Net periodic pension cost (E)
17 13 
Stock-based compensation43 28 
Loss on debt redemption (N)
2 141 
Other26 28 
Changes in assets and liabilities, excluding effects of acquisitions, divestitures, and foreign currency translation adjustments:
Increase in receivables (J)
(246)(382)
(Increase) decrease in inventories(271)49 
Decrease in prepaid expenses and other current assets5 6 
Increase in accounts payable, trade130 63 
Increase (decrease) in accrued expenses 18 (121)
Decrease in taxes, including income taxes(1)(15)
Pension contributions (34)(68)
Increase in noncurrent assets(5)(1)
Decrease in noncurrent liabilities(44)(32)
Cash provided from operations278 146 
Financing Activities
Net change in short-term borrowings (original maturities of three months or less)(4) 
Additions to debt (original maturities greater than three months) (N)
 700 
Payments on debt (original maturities greater than three months) (N)
(60)(1,491)
Debt issuance costs (N)
 (11)
Premiums paid on early redemption of debt (N)
(2)(133)
Repurchase of common stock(335)(225)
Proceeds from exercise of employee stock options14 17 
Dividends paid to shareholders(27)(11)
Other(23)(20)
Cash used for financing activities(437)(1,174)
Investing Activities
Capital expenditures (C)
(148)(138)
Proceeds from the sale of assets and businesses42 8 
Sale of debt securities 5 
Cash receipts from sold receivables (J)
 267 
Other 2 
Cash (used for) provided from investing activities(106)144 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(3)(1)
Net change in cash, cash equivalents and restricted cash (268)(885)
Cash, cash equivalents and restricted cash at beginning of period 722 1,611 
Cash, cash equivalents and restricted cash at end of period$454 $726 
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)
 Preferred
stock
Common
stock
Additional
capital
Retained earningsAccumulated
other
comprehensive
loss
Total
Equity
Balance at June 30, 2021$55 $429 $4,481 $517 $(1,884)$3,598 
Net income— — — 27 — 27 
Other comprehensive loss (I)
— — — — (27)(27)
Cash dividends declared:
Preferred-Class A @ $0.9375 per share
— — — (1)— (1)
Common @ $0.02 per share
— — — (9)— (9)
Repurchase and retirement of common stock— (1)(24)— — (25)
Stock-based compensation — — 14 — — 14 
Common stock issued: compensation plans — — 2 — — 2 
Balance at September 30, 2021$55 $428 $4,473 $534 $(1,911)$3,579 

 Preferred
stock
Common
stock
Additional
capital
Retained earningsAccumulated
other
comprehensive
loss
Total
Equity
Balance at June 30, 2022$55 $416 $4,079 $863 $(1,992)$3,421 
Net income— — — 80 — 80 
Other comprehensive loss (I)
— — — — (119)(119)
Cash dividends declared:
Preferred-Class A @ $0.9375 per share
— — — (1)— (1)
Common @ $0.06 per share
— — — (25)— (25)
Repurchase and retirement of common stock— (3)(97)— — (100)
Stock-based compensation — — 14 — — 14 
Common stock issued: compensation plans — 1 2 — — 3 
Balance at September 30, 2022$55 $414 $3,998 $917 $(2,111)$3,273 

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


Howmet Aerospace Inc. and subsidiaries
Statement of Changes in Consolidated Equity (unaudited)
(U.S. dollars in millions, except per-share amounts)
 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— — — 181 — 181 
Other comprehensive income (I)
— — — — 32 32 
Cash dividends declared:
Preferred-Class A @ $2.8125 per share
— — — (2)— (2)
Common @ $0.02 per share
— — — (9)— (9)
Repurchase and retirement of common stock— (7)(218)— — (225)
Stock-based compensation — — 28 — — 28 
Common stock issued: compensation plans — 2 (5)— — (3)
Balance at September 30, 2021$55 $428 $4,473 $534 $(1,911)$3,579 

 
 Preferred
stock
Common
stock
Additional
capital
Retained
earnings
Accumulated
other
comprehensive
loss
Total
Equity
Balance at December 31, 2021$55 $422 $4,291 $603 $(1,863)$3,508 
Net income— — — 358 — 358 
Other comprehensive loss (I)
— — — — (248)(248)
Cash dividends declared:
Preferred-Class A @ $2.8125 per share
— — — (2)— (2)
Common @ $0.10 per share
— — — (42)— (42)
Repurchase and retirement of common stock— (10)(325)— — (335)
Stock-based compensation — — 43 — — 43 
Common stock issued: compensation plans — 2 (11)— — (9)
Balance at September 30, 2022$55 $414 $3,998 $917 $(2,111)$3,273 

The accompanying notes are an integral part of the consolidated financial statements.
8


Howmet Aerospace Inc. and subsidiaries
Notes to the Consolidated Financial Statements (unaudited)
(U.S. dollars in millions, except 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 third quarter of 2022, the Company derived approximately 47% of its revenue from products sold to the commercial aerospace market which is substantially less than the pre-pandemic 2019 annual rate of approximately 60%. Due to the global COVID-19 pandemic and its impact on the commercial aerospace industry to date, there has been a decrease in domestic and international air travel, which in turn has adversely affected demand for narrow-body and wide-body aircraft. Although domestic air travel is increasing, it is still below pre-pandemic 2019 levels on an average monthly basis. Year-to-date international travel also continues to be lower than pre-pandemic 2019 levels. Narrow-body demand is returning faster than wide-body demand and the commercial wide-body aircraft market is taking longer to recover, which is creating a shift in our product mix compared to pre-pandemic conditions. In addition to the impact from the pandemic, the timing and level of future aircraft builds by original equipment manufacturers are subject to changes and uncertainties, such as declines in Boeing 787 production rates due to delays in its recertification, which may cause our future results to differ from prior periods due to changes in product mix in certain segments.
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 and changes in the aerospace industry as a result of the pandemic. The impact of these changes 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 and changes in the aerospace industry.
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. The FASB is currently working on a project to extend the date to December 31, 2024. Management does not believe that the impact of these changes will have a material impact on the Consolidated Financial Statements.
In September 2022, the FASB issued guidance to enhance the transparency of disclosures regarding supplier finance programs. These changes become effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023. Management is currently evaluating the potential impact of these changes on the Consolidated Financial Statements.
9



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 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 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.
10


The operating results of the Company’s reportable segments were as follows:
Engine ProductsFastening SystemsEngineered StructuresForged WheelsTotal
Segment
Third quarter ended September 30, 2022
Sales:
Third-party sales$683 $291 $193 $266 $1,433 
Inter-segment sales1  3  4 
Total sales$684 $291 $196 $266 $1,437 
Profit and loss:
Provision for depreciation and amortization$31 $11 $12 $10 $64 
Segment Adjusted EBITDA186 64 28 64 342 
Restructuring and other charges2  1  3 
Capital expenditures23 7 3 6 39 
Third quarter ended September 30, 2021
Sales:
Third-party sales$599 $254 $199 $231 $1,283 
Inter-segment sales1  1  2 
Total sales$600 $254 $200 $231 $1,285 
Profit and loss:
Provision for depreciation and amortization$31 $12 $12 $10 $65 
Segment Adjusted EBITDA151 59 26 72 308 
Restructuring and other charges5 3   8 
Capital expenditures21 8 3 15 47 
Engine ProductsFastening SystemsEngineered StructuresForged WheelsTotal
Segment
Nine months ended September 30, 2022
Sales:
Third-party sales$1,966 $832 $560 $792 $4,150 
Inter-segment sales3  5  8 
Total sales$1,969 $832 $565 $792 $4,158 
Profit and loss:
Provision for depreciation and amortization$93 $34 $36 $30 $193 
Segment Adjusted EBITDA538 176 77 206 997 
Restructuring and other charges (credits)9 (3)4  10 
Capital expenditures74 30 12 20 136 
Nine months ended September 30, 2021
Sales:
Third-party sales$1,677 $788 $535 $687 $3,687 
Inter-segment sales3  4  7 
Total sales$1,680 $788 $539 $687 $3,694 
Profit and loss:
Provision for depreciation and amortization$92 $37 $37 $29 $195 
Segment Adjusted EBITDA413 179 72 222 886 
Restructuring and other charges15 8 1  24 
Capital expenditures48 22 13 37 120 
11


The following table reconciles Total Segment Adjusted EBITDA to Income before income taxes. Differences between the total segment and consolidated totals are in Corporate.
Third quarter endedNine months ended
September 30,September 30,
2022202120222021
Total Segment Adjusted EBITDA$342 $308 $997 $886 
Segment provision for depreciation and amortization(64)(65)(193)(195)
Unallocated amounts:
Restructuring and other charges(4)(8)(12)(22)
Corporate expense(46)(30)(93)(68)
Operating income$228 $205 $699 $601 
Loss on debt redemption (118)(2)(141)
Interest expense, net(57)(63)(172)(201)
Other expense, net (Q)
(67)(1)(67)(13)
Income before income taxes$104 $23 $458 $246 
The following table reconciles total segment capital expenditures with Capital expenditures as presented in the Statement of Consolidated Cash Flows.
Third quarter endedNine months ended
September 30,September 30,
2022202120222021
Total segment capital expenditures$39 $