Howmet Aerospace Inc. is a leading global provider of advanced engineered solutions for the aerospace and transportation industries, operating in 19 countries. 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. 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. The Company's largest market is aerospace, which represented approximately 70% of the Company's revenue in 2025. The commercial transportation market represented approximately 15% of the Company's revenue in 2025, the gas turbines market represented approximately 11% of the Company's revenue in 2025, and the other market represented approximately 4% of the Company's revenue in 2025.

Howmet continues as a market leader in most of its principal markets despite intense competition. Principal competitors include Berkshire Hathaway Inc., through its 2016 acquisition of Precision Castparts Corporation and subsidiaries, for titanium and titanium-based alloys, precision forgings, seamless rolled rings, investment castings, including airfoils, and aerospace fasteners; VSMPO (Russia) for titanium and titanium-based alloys and precision forgings; ATI Inc.'s High-Performance Materials & Components segment for titanium and titanium-based alloys and precision forgings; Lisi Aerospace (France) for aerospace fasteners; and Aubert & Duval (part of Airbus, Safran, and Tikehau Capital) for precision forgings. Other competitors include Doncasters Group Limited (U.K.) and Consolidated Precision Products Corp. for investment castings; Weber Metals, Inc. (part of Otto Fuchs) for precision forgings; and Forgital Group and Frisa (Mexico) for seamless rings. Forged Wheels competes against aluminum and steel wheel suppliers, with larger aluminum wheel competitors including Accuride Corporation, Speedline, Nippon Steel Corporation, Dicastal North America, Inc., Alux Co., Ltd., and Wheels India Limited. In 2025, RTX Corporation and GE Aerospace each represented approximately 11% of the Company's third-party sales.

Howmet generates revenue through the manufacture and sale of advanced engineered products, including 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. The Company's products 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.

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 and principally serves the commercial and defense aerospace and gas turbines markets. For the year ended December 31, 2025, Engine Products reported third-party sales of $4,320 ¹ and Segment Adjusted EBITDA of $1,438 ² with a Segment Adjusted EBITDA Margin of 33.3% ³. Fastening Systems produces aerospace and industrial fastening systems as well as commercial transportation fasteners and installation tools, supplying the commercial transportation, renewable, and material handling industries. For the year ended December 31, 2025, Fastening Systems reported third-party sales of $1,745 ⁴ and Segment Adjusted EBITDA of $530 ⁵ with a Segment Adjusted EBITDA Margin of 30.4% ⁶.

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, also producing aluminum forgings, nickel forgings, and aluminum machined components and assemblies for aerospace and defense applications. For the year ended December 31, 2025, Engineered Structures reported third-party sales of $1,148 ⁷ and Segment Adjusted EBITDA of $243 ⁸ with a Segment Adjusted EBITDA Margin of 21.2% ⁹. Forged Wheels manufactures lightweight, high-strength forged aluminum wheels for trucks, buses, and trailers, serving the global transportation market under the Alcoa® Wheels brand, utilizing its MagnaForce® alloy and Dura-Bright® surface treatment. For the year ended December 31, 2025, Forged Wheels reported third-party sales of $1,039 ¹⁰ and Segment Adjusted EBITDA of $296 ¹¹ with a Segment Adjusted EBITDA Margin of 28.5% ¹².

On December 22, 2025, the Company entered into an agreement with Stanley Black & Decker, Inc. to acquire Consolidated Aerospace Manufacturing, LLC for a cash purchase price of approximately $1.8 billion ¹³, expected to close in the first half of 2026. 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. During 2025, the Company repurchased approximately 4.4 million shares ¹⁴ of its common stock under the Share Repurchase Program for approximately $700 ¹⁵. The Company redeemed all 546,024 ¹⁶ outstanding shares of Class A preferred stock at a redemption price of $100 per share ¹⁷ plus dividends. Total debt was $3,050 ¹⁸, a net decrease of $265 ¹⁹ from 2024, reflecting the early redemption of the 5.900% Notes due February 2027 of $625 ²⁰ and the early prepayment of its USD Term Loan Facility during various periods in 2025 of $140 ²¹, partially offset by the November 2025 issuance of $500 ²² aggregate principal amount of the 4.550% Notes due 2032.

Sales for 2025 were $8,252 ²³ compared with $7,430 ²⁴ in 2024, an increase of $822, or 11%. Net income was $1,508 ²⁵ in 2025 compared to $1,155 ²⁶ in 2024, an increase of 31%. Diluted earnings per share were $3.71 ²⁷ in 2025 compared to $2.81 ²⁸ in 2024, an increase of 32%. Income before income taxes was $1,840 ²⁹ in 2025 compared to $1,383 ³⁰ in 2024, an increase of $457, or 33%. Total Segment Adjusted EBITDA was $2,507 ³¹ in 2025 compared to $2,009 ³² in 2024, an increase of $498, or 25%. Cash provided from operations was $1,884 ³³ in 2025 compared to $1,298 ³⁴ in 2024. Cash on hand and restricted cash at the end of the year was $743 ³⁵.

Management projects sales to increase in 2026 as solid growth is expected in the commercial aerospace, defense aerospace, and gas turbines markets, including engine spares. Earnings per share is expected to grow as management continues to focus on revenue growth and operational performance. Cash provided from operations is expected to increase for the full year in 2026 compared with 2025. Capital expenditures are expected to remain elevated with additional investments in capacity expansions to support aerospace and gas turbines market growth and share gains. The Company anticipates that the effective tax rate in 2026 will be between 20.5% and 21.5% ³⁶.

In the Engine Products segment, demand in the commercial aerospace, defense aerospace, and gas turbines markets is expected to increase in 2026 as compared to 2025, including engine spares growth in commercial aerospace, defense aerospace and gas turbines. Capital expenditures are expected to remain elevated with additional investments in capacity expansions to support aerospace and gas turbines market growth and share gains. In the Fastening Systems segment, demand in the commercial aerospace market is expected to increase in 2026, while demand in the commercial transportation market is expected to remain low with recovery beginning in the second half of 2026, given tariff-related, economic, and regulatory uncertainty in North America. The Brunner acquisition will be included in the operations of the Fastening Systems segment after February 6, 2026, and upon completion of the announced Proposed CAM Acquisition, CAM operations are expected to be included in the Fastening Systems segment.

In the Engineered Structures segment, demand in the commercial aerospace market is expected to increase in 2026 as compared to 2025. The segment is focusing on the optimization of its manufacturing footprint and rationalization of product mix in order to maximize profitability. In the Forged Wheels segment, demand in the commercial transportation markets served is expected to remain low with recovery beginning in the second half of 2026.

Cost of goods sold as a percentage of Sales was 65.8% ³⁷ in 2025 compared with 68.9% ³⁸ in 2024, with the decrease primarily due to higher volumes, favorable product pricing and productivity gains, partially offset by increased net headcount, primarily in the Engine Products segment, in support of expected revenue increases. The Engine Products segment absorbed approximately 1,445 ³⁹ net headcount throughout 2025 in support of expected revenue increases, resulting in unfavorable near-term recruiting, training, and operational costs. Non-service related net periodic benefit cost related to defined benefit plans and other postretirement benefit plans is expected to remain relatively flat from 2025 to 2026. Excluding settlements and curtailments, net periodic benefit cost of pension and other postretirement benefits is expected to be approximately $35 ⁴⁰ in 2026 compared to $29 ⁴¹ and $33 ⁴² in 2025 and 2024, respectively.

Cash pension contributions in 2026 are expected to be approximately $60 ⁴³. Total capital expenditures are anticipated to be approximately 5% of sales in 2026 and include capital expenditures related to capacity expansions for aerospace and gas turbines. For 2026, management anticipates that the expected long-term rate of return for global plan assets will remain at approximately 7% ⁴⁴. A change in the assumption for the expected long-term rate of return on plan assets of 1/4 of 1% would impact earnings by approximately $2 ⁴⁵ for 2026.

The Company has a share repurchase program that, after giving effect to the additional $150 ⁴⁶ share repurchases made in January and February 2026 at an average price per share of $215.28 ⁴⁷, retiring approximately 0.7 million ⁴⁸ shares, has approximately $1,347 million ⁴⁹ in Board authorization remaining available as of February 6, 2026. The current Share Repurchase Program was authorized by the Company's Board of Directors on August 18, 2021 at $1,500 million ⁵⁰, which was increased by the Board by $2,000 million ⁵¹ on July 30, 2024 to a total authorization of $3,500 million ⁵². On January 20, 2026, the Board of Directors declared a dividend of $0.12 per share ⁵³ on its common stock to be paid on February 25, 2026 to holders of record as of the close of business on February 6, 2026.

Governmental policies, laws and regulations, 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 the Company's ability to recover tariffs are subject to changes and uncertainties. The global trade landscape is growing more volatile, including as a result of 2025 and early 2026 executive orders in the U.S. for the imposition of new tariffs, the retaliatory counter measures by other countries and the likelihood and unpredictability of further tariffs and related countermeasures.

The Company intends to finance the Proposed CAM Acquisition through utilizing a variety of financing sources, which may include borrowing under its commercial paper program or debt facilities, the issuance of debt securities and cash on hand. No assurance can be given that the Company will obtain the intended financing for the Proposed CAM Acquisition on commercially reasonable terms, or terms acceptable to us. 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. 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 from operations, cash on hand and availability under the Revolving Credit Facilities and its commercial paper program will enable the Company to repay the JPY Term Loan Facility.

Management's message emphasizes a continued focus on liquidity and cash flows as well as improving operating performance through profitable revenue, efficient operations, and margin enhancement, with an intensified focus on capital efficiency. Management projects sales to increase in 2026 as solid growth is expected in the commercial aerospace, defense aerospace, and gas turbines markets, including engine spares, and earnings per share is expected to grow as management continues to focus on revenue growth and operational performance. Cash provided from operations is expected to increase for the full year in 2026 compared with 2025, resulting from a continued focus on operating performance. The Company anticipates that the effective tax rate in 2026 will be between 20.5% and 21.5% ⁵⁵. The strategic priorities emphasized for the period ahead include revenue growth in the commercial aerospace, defense aerospace, and gas turbines markets, operational performance improvement, and capital efficiency.

For the year ended December 31, 2025, total revenue was $8,252 ⁵⁶ compared to $7,430 ⁵⁷ in 2024. Net income was $1,508 ⁵⁸ in 2025 compared to $1,155 ⁵⁹ in 2024. Diluted earnings per share were $3.71 ⁶⁰ in 2025 compared to $2.81 ⁶¹ in 2024. Operating income was $2,046 ⁶² in 2025 compared to $1,633 ⁶³ in 2024. Cash provided from operations was $1,884 ⁶⁴ in 2025 compared to $1,298 ⁶⁵ in 2024. Cash and cash equivalents were $742 ⁶⁶ as of December 31, 2025 compared to $564 ⁶⁷ as of December 31, 2024. Total debt was $3,050 ⁶⁸ as of December 31, 2025 compared to $3,315 ⁶⁹ as of December 31, 2024. Restructuring and other charges were $84 ⁷⁰ in 2025, which included $89 ⁷¹ charges for U.K. pension plan settlement accounting and a $3 ⁷² charge for layoff costs partially offset by $5 ⁷³ in gains on the sales of assets at two small previously closed facilities. For segment performance, Engine Products reported third-party sales of $4,320 ⁷⁴ and Segment Adjusted EBITDA of $1,438 ⁷⁵; Fastening Systems reported third-party sales of $1,745 ⁷⁶ and Segment Adjusted EBITDA of $530 ⁷⁷; Engineered Structures reported third-party sales of $1,148 ⁷⁸ and Segment Adjusted EBITDA of $243 ⁷⁹; and Forged Wheels reported third-party sales of $1,039 ⁸⁰ and Segment Adjusted EBITDA of $296 ⁸¹.

Howmet is subject to cyclical fluctuations in global economic conditions and lightweight metals end-use markets, deriving a significant portion of revenue from the aerospace industry, which is cyclical and reflective of changes in the general economy. The commercial aerospace industry is historically driven by demand from commercial airlines for new aircraft and spare parts, and changes in the timing and level of future aircraft production by OEMs may cause future results to differ. The Company is dependent on a limited number of suppliers for materials and services essential to operations, including raw materials, and for certain raw materials and services depends on a number of limited source or sole source suppliers, such as for titanium sponge and specialized metal alloys. Howmet faces significant competition from a variety of both U.S. and non-U.S. companies, and new entrants, new product offerings, or new technologies may compete with or replace Howmet products. The Company may not realize the expected benefits of the Proposed CAM Acquisition on the anticipated time frame or at all, as completion is subject to a number of conditions, some of which are beyond the Company's control, and the cash purchase price is approximately $1.8 billion ⁵⁴. A decline in the Company's financial performance or outlook could negatively impact its credit profile, its access to capital markets and its borrowing costs, and a downgrade of Howmet's credit ratings could result in negative consequences including limiting its ability to obtain future financing on favorable terms.