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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, 2024
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 numbers, 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 November 4, 2024, there were 406,260,649 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)
(in millions, except per-share amounts)
Third quarter endedNine months ended
 September 30,September 30,
 2024202320242023
Sales (C)
$1,835 $1,658 $5,539 $4,909 
Cost of goods sold (exclusive of expenses below)1,253 1,183 3,830 3,543 
Selling, general administrative, and other expenses85 87 270 250 
Research and development expenses9 9 26 27 
Provision for depreciation and amortization68 68 204 204 
Restructuring and other (credits) charges (D)
(1)4 21 8 
Operating income421 307 1,188 877 
Loss on debt redemption (N)
6 — 6 1 
Interest expense, net44 54 142 166 
Other expense, net (F)
17 11 49 5 
Income before income taxes354 242 991 705 
Provision for income taxes (G)
22 54 150 176 
Net income$332 $188 $841 $529 
Amounts Attributable to Howmet Aerospace Common Shareholders (H):
Net income$331 $187 $839 $527 
Earnings per share:
Basic$0.81 $0.45 $2.06 $1.28 
Diluted$0.81 $0.45 $2.04 $1.27 
Average Shares Outstanding (H):
Basic408 412 408 412 
Diluted410 415 411 417 
    
The accompanying notes are an integral part of the consolidated financial statements.

3

Howmet Aerospace Inc. and subsidiaries
Statement of Consolidated Comprehensive Income (unaudited)
(in millions)
Third quarter endedNine months ended
 September 30,September 30,
2024202320242023
Net income$332 $188 $841 $529 
Other comprehensive income (loss), net of tax (I):
Change in unrecognized net actuarial loss and prior service benefit related to pension and other postretirement benefits8 10 15 19 
Foreign currency translation adjustments 71 (56)30 (18)
Net change in unrecognized (losses) gains on cash flow hedges(19)4 (13)(10)
Total Other comprehensive income (loss), net of tax 60 (42)32 (9)
Comprehensive income$392 $146 $873 $520 
The accompanying notes are an integral part of the consolidated financial statements.
4

Howmet Aerospace Inc. and subsidiaries
Consolidated Balance Sheet (unaudited)
(in millions)
September 30, 2024December 31, 2023
Assets
Current assets:
Cash and cash equivalents$475 $610 
Receivables from customers, less allowances of $— in both 2024 and 2023 (J)
757 675 
Other receivables18 17 
Inventories (K)
1,902 1,765 
Prepaid expenses and other current assets239 249 
Total current assets3,391 3,316 
Properties, plants, and equipment, net (L)
2,358 2,328 
Goodwill4,047 4,035 
Deferred income taxes39 46 
Intangibles, net484 505 
Other noncurrent assets (M)
239 198 
Total assets$10,558 $10,428 
Liabilities
Current liabilities:
Accounts payable, trade (Q)
$917 $982 
Accrued compensation and retirement costs288 263 
Taxes, including income taxes (G)
59 68 
Accrued interest payable25 65 
Other current liabilities (M)(Q)
227 200 
Long-term debt due within one year (N)
1 206 
Total current liabilities1,517 1,784 
Long-term debt (N)(O)
3,393 3,500 
Accrued pension benefits (E)
629 664 
Accrued other postretirement benefits (E)
84 92 
Other noncurrent liabilities and deferred credits (M)
432 351 
Total liabilities6,055 6,391 
Contingencies and commitments (Q)
Equity
Howmet Aerospace shareholders’ equity:
Preferred stock55 55 
Common stock407 410 
Additional capital3,386 3,682 
Retained earnings2,453 1,720 
Accumulated other comprehensive loss (I)
(1,798)(1,830)
Total equity4,503 4,037 
Total liabilities and equity$10,558 $10,428 
The accompanying notes are an integral part of the consolidated financial statements.
5

Howmet Aerospace Inc. and subsidiaries
Statement of Consolidated Cash Flows (unaudited)
(in millions)
Nine months ended
 September 30,
 20242023
Operating activities
Net income$841 $529 
Adjustments to reconcile net income to cash provided from operations:
Depreciation and amortization204 204 
Deferred income taxes39 92 
Restructuring and other charges21 8 
Net realized and unrealized losses18 17 
Net periodic pension cost (E)
31 28 
Stock-based compensation54 39 
Loss on debt redemption (N)
6 1 
Other4 2 
Changes in assets and liabilities, excluding effects of acquisitions, divestitures, and foreign currency translation adjustments:
Increase in receivables (J)
(97)(211)
Increase in inventories(139)(148)
Decrease (increase) in prepaid expenses and other current assets9 (12)
Decrease in accounts payable, trade(67)(57)
Decrease in accrued expenses (42)(18)
(Decrease) increase in taxes, including income taxes(5)17 
Pension contributions (33)(19)
Increase in noncurrent assets(6)(2)
Decrease in noncurrent liabilities(20)(27)
Cash provided from operations818 443 
Financing Activities
Additions to debt (N)
500 — 
Repurchases and payments on debt (N)
(805)(376)
Debt issuance costs (N)
(5)— 
Premiums paid on early redemption of debt (N)
(5)(1)
Repurchases of common stock(310)(150)
Proceeds from exercise of employee stock options7 10 
Dividends paid to shareholders(76)(52)
Taxes paid for net share settlement of equity awards(48)(77)
Cash used for financing activities(742)(646)
Investing Activities
Capital expenditures (C)
(219)(164)
Proceeds from the sale of assets and businesses (D)(P)
9 1 
Other1 — 
Cash used for investing activities(209)(163)
Effect of exchange rate changes on cash, cash equivalents and restricted cash(2)(1)
Net change in cash, cash equivalents and restricted cash (135)(367)
Cash, cash equivalents and restricted cash at beginning of period 610 792 
Cash, cash equivalents and restricted cash at end of period$475 $425 
    
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)
(in millions, except per-share amounts)
 Preferred
stock		Common
stock		Additional
capital		Retained
earnings		Accumulated
other
comprehensive
loss		Total
Equity
Balance at June 30, 2023$55 $412 $3,782 $1,334 $(1,808)$3,775 
Net income— — — 188 — 188 
Other comprehensive loss (I)
— — — — (42)(42)
Cash dividends declared:
Preferred-Class A @ $0.9375 per share
— — — (1)— (1)
 Common @ $0.09 per share
— — — (36)— (36)
Repurchase and retirement of common stock (H)
— — (25)— — (25)
Stock-based compensation — — 13 — — 13 
Balance at September 30, 2023$55 $412 $3,770 $1,485 $(1,850)$3,872 

 Preferred
stock		Common
stock		Additional
capital		Retained
earnings		Accumulated
other
comprehensive
loss		Total
Equity
Balance at June 30, 2024$55 $408 $3,486 $2,186 $(1,858)$4,277 
Net income— — — 332 — 332 
Other comprehensive income (I)
— — — — 60 60 
Cash dividends declared:
Preferred-Class A @ $0.9375 per share
— — — (1)— (1)
 Common @ $0.16 per share
— — — (64)— (64)
Repurchase and retirement of common stock (H)
— (1)(101)— — (102)
Stock-based compensation — — 16 — — 16 
Common stock issued: compensation plans — — (15)— — (15)
Balance at September 30, 2024$55 $407 $3,386 $2,453 $(1,798)$4,503 

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
earnings		Accumulated
other
comprehensive
loss		Total
Equity
Balance at December 31, 2022
$55 $412 $3,947 $1,028 $(1,841)$3,601 
Net income— — — 529 — 529 
Other comprehensive loss (I)
— — — — (9)(9)
Cash dividends declared:
Preferred-Class A @ $2.8125 per share
— — — (2)— (2)
Common @ $0.17 per share
— — — (70)— (70)
Repurchase and retirement of common stock (H)
— (3)(147)— — (150)
Stock-based compensation — — 39 — — 39 
Common stock issued: compensation plans — 3 (69)— — (66)
Balance at September 30, 2023$55 $412 $3,770 $1,485 $(1,850)$3,872 

 
 Preferred
stock		Common
stock		Additional
capital		Retained
earnings		Accumulated
other
comprehensive
loss		Total
Equity
Balance at December 31, 2023
$55 $410 $3,682 $1,720 $(1,830)$4,037 
Net income— — — 841 — 841 
Other comprehensive income (I)
— — — — 32 32 
Cash dividends declared:
Preferred-Class A @ $2.8125 per share
— — — (2)— (2)
Common @ $0.26 per share
— — — (106)— (106)
Repurchase and retirement of common stock (H)
— (4)(309)— — (313)
Stock-based compensation — — 54 — — 54 
Common stock issued: compensation plans — 1 (41)— — (40)
Balance at September 30, 2024$55 $407 $3,386 $2,453 $(1,798)$4,503 

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 share and per-share amounts)
A. Basis of Presentation
The interim Consolidated Financial Statements of Howmet Aerospace Inc. and its 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 2023 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, 2023 (the “Form 10-K”), 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 nine months ended September 30, 2024, the Company derived approximately 52% of its revenue from products sold to the commercial aerospace market which is less than the pre-pandemic 2019 annual rate of approximately 60%. Aircraft production in the commercial aerospace industry continues to recover based on increases in demand for narrow body and wide body aircraft. We expect our commercial aerospace wide body and narrow body demand, including engine spares, also to continue to grow. Quality control issues at The Boeing Company (“Boeing”) are expected to negatively impact narrow body and wide body production rates in the near term. For instance, the Federal Aviation Administration stated that it will not approve production rate increases or additional production lines for the Boeing 737 MAX until it is satisfied that Boeing is in full compliance with required quality control procedures. In addition, a labor union work stoppage at Boeing has negatively impacted results. Boeing production levels have a material impact on the financial performance of Howmet. The timing and level of future aircraft builds by original equipment manufacturers are subject to changes and uncertainties, 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 expectations, including considerations relating to changes in the aerospace industry. The impact of these changes, including the macroeconomic considerations, remains 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.
B. Recently Adopted and Recently Issued Accounting Guidance
Adopted
In September 2022, the Financial Accounting Standards Board (“FASB”) issued guidance to enhance the transparency of disclosures regarding supplier finance programs (See Note Q). These changes became 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.
Issued
In November 2024, the FASB issued guidance to improve disclosures about an entity’s expenses including more detailed information about the components of expenses in commonly presented expense captions. These changes become effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Management is currently evaluating the impact of these changes on the Consolidated Financial Statements.
In December 2023, the FASB issued guidance to enhance the transparency of income tax disclosures including additional details on the rate reconciliation and taxes paid by jurisdiction. These changes become effective for fiscal years beginning after December 15, 2024. Management is currently evaluating the impact of these changes on the Consolidated Financial Statements.
In November 2023, the FASB issued guidance to enhance disclosures related to significant segment expenses and other matters related to reportable segments. These changes become effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Management is currently evaluating the 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. 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 (credits) 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 turbine applications. 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, and construction, industrial, and renewable energy equipment.
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, 2024
Sales:
Third-party sales$945 $392 $253 $245 $1,835 
Inter-segment sales3 — 3 — 6 
Total sales$948 $392 $256 $245 $1,841 
Profit and loss:
Provision for depreciation and amortization$34 $12 $10 $10 $66 
Segment Adjusted EBITDA307 102 38 64 511 
Restructuring and other charges1 1 1 1 4 
Capital expenditures55 5 5 14 79 
Third quarter ended September 30, 2023
Sales:
Third-party sales$798 $348 $227 $285 $1,658 
Inter-segment sales5 — — — 5 
Total sales$803 $348 $227 $285 $1,663 
Profit and loss:
Provision for depreciation and amortization$33 $12 $12 $10 $67 
Segment Adjusted EBITDA219 76 30 77 402 
Restructuring and other charges— 1 1 — 2 
Capital expenditures30 9 6 9 54 
Engine ProductsFastening SystemsEngineered StructuresForged WheelsTotal
Segment
Nine months ended September 30, 2024
Sales:
Third-party sales$2,763 $1,175 $790 $811 $5,539 
Inter-segment sales6 — 7 — 13 
Total sales$2,769 $1,175 $797 $811 $5,552 
Profit and loss:
Provision for depreciation and amortization$100 $36 $32 $30 $198 
Segment Adjusted EBITDA848 295 115 221 1,479 
Restructuring and other charges— 3 15 1 19 
Capital expenditures143 17 16 35 211 
Nine months ended September 30, 2023
Sales:
Third-party sales$2,414 $989 $634 $872 $4,909 
Inter-segment sales12 — 1 — 13 
Total sales$2,426 $989 $635 $872 $4,922 
Profit and loss:
Provision for depreciation and amortization$97 $35 $36 $29 $197 
Segment Adjusted EBITDA654 198 80 237 1,169 
Restructuring and other (credits) charges(1)1 7 — 7 
Capital expenditures84 23 21 25 153 
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,
2024202320242023
Total Segment Adjusted EBITDA$511 $402 $1,479 $1,169 
Segment provision for depreciation and amortization(66)(67)(198)(197)
Unallocated amounts:
Restructuring and other credits (charges)1 (4)(21)(8)
Corporate expense(25)(24)(72)(87)
Operating income$421 $307 $1,188 $877 
Loss on debt redemption(6)— (6)(1)
Interest expense, net(44)(54)(142)(166)
Other expense, net(17)(11)(49)(5)
Income before income taxes$354 $242 $991 $705 
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,
2024202320242023
Total segment capital expenditures$79 $54 $211 $153 
Corporate3 5 8 11 
Capital expenditures$82 $59 $219 $164 
12

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
Third quarter ended September 30, 2024
Aerospace - Commercial$534 $245 $183 $— $962 
Aerospace - Defense 189 43 57 — 289 
Commercial Transportation— 65 — 245 310 
Industrial and Other222 39 13 — 274 
Total end-market revenue$945 $392 $253 $245 $1,835 
Third quarter ended September 30, 2023
Aerospace - Commercial$446 $209 $165 $— $820 
Aerospace - Defense 165 41 45 — 251 
Commercial Transportation— 67 — 285 352 
Industrial and Other187 31 17 — 235 
Total end-market revenue$798 $348 $227 $285 $1,658 
Nine months ended September 30, 2024
Aerospace - Commercial$1,554 $740 $575 $— $2,869 
Aerospace - Defense 566 119 174 — 859 
Commercial Transportation— 199 — 811 1,010 
Industrial and Other643 117 41 — 801 
Total end-market revenue$2,763 $1,175 $790 $811 $5,539 
Nine months ended September 30, 2023
Aerospace - Commercial$1,324 $563 $458 $— $2,345 
Aerospace - Defense 502 131 131 — 764 
Commercial Transportation— 192 — 872 1,064 
Industrial and Other588 103 45 — 736 
Total end-market revenue$2,414 $989 $634 $872 $4,909 
The Company derived 67% and 63% of its revenue from the aerospace (commercial and defense) markets for the nine months ended September 30, 2024 and 2023, respectively.
On April 2, 2024, General Electric Company, one of our largest customers, completed the spin-off of its energy-focused business into GE Vernova, a new publicly traded company. Since then, General Electric Company operates as GE Aerospace. GE Aerospace and RTX Corporation each represented approximately 10% of the Company’s third-party sales in the nine months ended September 30, 2024. General Electric Company and RTX Corporation represented approximately 13% and 10%, respectively, of the Company’s third-party sales in the nine months ended September 30, 2023. These sales were primarily from the Engine Products segment.
13

D. Restructuring and Other (Credits) Charges
Third quarter endedNine months ended
September 30,September 30,
2024202320242023
Layoff costs$1 $1 $8 $1 
Reversals of previously recorded layoff reserves(1)— (1)(1)
Pension and Other post-retirement benefits - net settlements (E)
— 2 — 5 
Net (gain) loss related to divestitures of assets and businesses (P)
(1)— 12 — 
Other— 1 2 3 
Total restructuring and other (credits) charges$(1)$4 $21 $8 
In the third quarter of 2024, the Company recorded Restructuring and other credits of $1, which were primarily due to a $1 gain related to the resolution of post-closing adjustments from the May 2024 sale of a small U.K. manufacturing facility in Engineered Structures and a reversal of $1 for a layoff reserve related to a prior period, partially offset by a $1 charge for layoff costs.
In the nine months ended September 30, 2024, the Company recorded Restructuring and other (credits) charges of $21, which were primarily due to a net loss on the sale of a small U.K. manufacturing facility in Engineered Structures of $13, an $8 charge for layoff costs, including the separation of 293 employees (144 in Fastening Systems, 111 in Engineered Structures and 38 in Forged Wheels), and exit related costs, including accelerated depreciation, of $2, partially offset by a gain on the sale of assets at a small U.K. manufacturing facility in Engine Products of $1 and a reversal of $1 for a layoff reserve related to a prior period.
In the third quarter of 2023, the Company recorded Restructuring and other (credits) charges of $4, which were primarily due to charges for a Canadian pension plan settlement of $2, layoff charges of $1, and exit related costs, including accelerated depreciation of $1.
In the nine months ended September 30, 2023, the Company recorded Restructuring and other (credits) charges of $8, which were primarily due to charges for a U.S. and Canadian pension plan settlements of $5, exit related costs, including accelerated depreciation of $3, and layoff charges of $1, partially offset by a reversal of $1 for a layoff reserve related to a prior period.
Layoff costsOther exit costsTotal
Reserve balances at December 31, 2023$5 $2 $7 
Cash payments(6)(1)(7)
Restructuring charges7 14 21 
Other(1)
— (14)(14)
Reserve balances at September 30, 2024$6 $1 $7 
(1)In the nine months ended September 30, 2024, other for other exit costs included a net loss of $13 on the sale of a small U.K. manufacturing facility and a charge of $2 for accelerated depreciation, partially offset by a gain on the sale of assets at a small U.K. manufacturing facility in Engine Products of $1.
The remaining reserves as of September 30, 2024 are expected to be paid in cash during the remainder of 2024 and 2025.
14

E. Pension and Other Postretirement Benefits
The components of net periodic cost (benefit) were as follows:
Third quarter endedNine months ended
 September 30,September 30,
2024202320242023
Pension benefits
Service cost$1 $— $2 $2 
Interest cost18 20 56 60 
Expected return on plan assets(17)(18)(52)(55)
Recognized net actuarial loss9 7 25 21 
Settlements— 2 — 5 
Net periodic cost(1)
$11 $11 $31 $33 
Other postretirement benefits    
Service cost$— $1 $— $1 
Interest cost1 2 4 5 
Recognized net actuarial gain(1)(1)(2)(2)
Amortization of prior service benefit(2)(3)(7)(7)
Net periodic benefit(1)
$(2)$(1)$(5)$(3)
 
(1)Service cost was included within Cost of goods sold and Selling, general administrative, and other expenses; settlements were included in Restructuring and other (credits) charges; all other cost components were recorded in Other expense, net in the Statement of Consolidated Operations.
Pension benefits
In the third quarter and nine months ended September 30, 2023, the Company applied settlement accounting to its Canadian pension plan due to lump sum payments made to participants, reducing gross pension obligations by $12. In June 2023, the Company also undertook additional actions to reduce gross pension obligations by $19 by purchasing group annuity contracts from a third-party carrier to pay and administer future annuity payments of a U.S. pension plan. Settlement charges of $2 and $5 were recognized in the third quarter and nine months ended September 30, 2023, respectively. All settlement charges were recorded in Restructuring and other (credits) charges in the Statement of Consolidated Operations.
For the third quarter and nine months ended September 30, 2024, Howmet’s combined pension contributions and other postretirement benefit payments were approximately $19 and $41, respectively. For the third quarter and nine months ended September 30, 2023, Howmet’s combined pension contributions and other postretirement benefit payments were approximately $9 and $28, respectively.
F. Other Expense, Net
Third quarter endedNine months ended
 September 30,September 30,
2024202320242023
Non-service costs - pension and other postretirement benefits (E)
$8 $7 $24 $22 
Interest income(4)(5)(15)(15)
Foreign currency losses, net2 5 9 3 
Net realized and unrealized losses5 6 18 17 
Deferred compensation6 (1)14 5 
Other, net— (1)(1)(27)
Total other expense, net$17 $11 $49 $5 
In the nine months ended September 30, 2023, Other, net primarily includes the reversal of $25, net of legal fees of $1, of the $65 pre-tax charge taken in the third quarter of 2022 related to the Lehman Brothers International (Europe) legal proceeding (See Note Q) due to the final settlement of such proceeding in June 2023.
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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 20.9% in both the third quarter and nine months ended September 30, 2024, and 23.0% in both the third quarter and nine months ended September 30, 2023. The 2024 rate was lower than the 2023 rate and the U.S. federal statutory rate of 21% primarily due to a net benefit related to U.S. federal and state research and development (“R&D”) credits, a U.S. deduction on Foreign Derived Intangible Income (“FDII”), and a U.S. tax benefit recognized for foreign tax credits, partially offset by additional U.S. tax on Global Intangible Low-Taxed Income (“GILTI”), incremental state tax, nondeductible expenses, and foreign earnings subject to tax in jurisdictions with tax rates higher than the U.S. federal statutory rate of 21%. The 2023 rate was higher than the U.S. federal statutory rate of 21% primarily due to additional U.S. tax on GILTI and other foreign earnings, incremental state tax and foreign taxes on earnings also subject to U.S. federal income tax, nondeductible expenses, and foreign earnings subject to tax in jurisdictions with tax rates higher than the U.S. federal statutory rate of 21%.
For the third quarter of 2024 and 2023, the tax rate including discrete items was 6.2% and 22.3%, respectively. In the third quarter of 2024, the Company recorded a discrete net tax benefit of $46 primarily attributable to a $44 net benefit related to additional U.S. federal and state R&D credits claimed for prior years upon completion of the Company’s R&D study, the substantial portion of which are U.S. federal credits which have been approved under audit by the U.S. Internal Revenue Service, and a $2 excess tax benefit for stock compensation. In the third quarter of 2023, the Company recorded a discrete net tax benefit of $1 for other small items.
For the nine months ended September 30, 2024 and 2023, the tax rate including discrete items was 15.1% and 25.0%, respectively. For the nine months ended September 30, 2024, the Company recorded a discrete net tax benefit of $58 primarily attributable to a $44 net benefit related to additional U.S. federal and state R&D credits claimed for prior years upon completion of the Company’s R&D study, the substantial portion of which are U.S. federal credits which have been approved under audit by the U.S. Internal Revenue Service, a $9 excess tax benefit for stock compensation, a $6 benefit to release a valuation allowance related to U.S. foreign tax credits, and a net tax charge of $1 for other small items. For the nine months ended September 30, 2023, the Company recorded a discrete net tax charge of $13 attributable to a $20 charge for a tax reserve established in France (See Note Q) and a net tax charge of $1 for other small items, reduced by an $8 excess tax benefit for stock compensation.
The tax provision was comprised of the following:
Third quarter endedNine months ended
 September 30,September 30,
 2024202320242023
Pre-tax income at estimated annual effective income tax rate before discrete items$74 $55 $207 $162 
Impact of change in estimated annual effective tax rate on previous quarter’s pre-tax income(5)— — — 
Interim period treatment of operational losses in foreign jurisdictions for which no tax benefit is recognized(1)— 1 1 
Tax reserve (Q)
— — —