Howmet Aerospace : 2026 Q1 Earnings Presentation

Published: 2026-05-07 07:35:10 ET HWM

Published on 05/07/2026 at 07:35 am EDT

First Quarter 2026 Earnings Call

John Plant: Executive Chairman and Chief Executive Officer

Patrick Winterlich: EVP and Chief Financial Officer

May 7, 2026

Non-GAAP Financial Measures

Some of the information included in this presentation is derived from Howmet Aerospace's consolidated financial information but is not presented in Howmet Aerospace's financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). Certain of these data are considered "non-GAAP financial measures" under SEC rules. These non-GAAP financial measures supplement our GAAP disclosures and should not be considered an alternative to the GAAP measure. Reconciliations to the most directly comparable GAAP financial measures and management's rationale for the use of the non-GAAP financial measures can be found in the Appendix to this presentation. Howmet Aerospace has not provided reconciliations of any forward-looking non-GAAP financial measures (including Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Earnings per Share, and Free Cash Flow) to the most directly comparable GAAP financial measures because such reconciliations, as well as the directly comparable GAAP measures, are not available without unreasonable efforts due to the variability and complexity of the charges and other components excluded from the non-GAAP measures, such as gains or losses on sales of assets, taxes, and any future restructuring or impairment charges. These reconciling items are in addition to the inherent variability already included in the GAAP measures, which includes, but is not limited to, price/mix and volume. Howmet Aerospace believes such reconciliations of forward-looking non-GAAP financial measures would imply a degree of precision that would be confusing or misleading to investors.

Adjusted EBITDA is defined as Operating Income excluding Restructuring and other (credits) charges, Special Items and provision for depreciation and amortization. Special items, including Restructuring and other (credits) charges, are excluded from Adjusted EBITDA. Current and prior periods' Adjusted EBITDA calculations have not changed although the definitions have been simplified.

Other Information

In this presentation: where values are denoted, M=USD millions and B=USD billions; Howmet, Howmet Aerospace, or the Company=Howmet Aerospace Inc.; YTD=year to date; YoY=year over year; QoQ=quarter over quarter; Seq=sequential; FY=full year; Q=quarter; bps=basis points; Avg=average; EPS=Earnings Per Share; FCF=Free Cash Flow; Free Cash Flow Conversion=Free Cash Flow divided by Adjusted Net Income; M&A = mergers and acquisitions; and references to performance by Howmet Aerospace or its segments as "record" mean its best result since April 1, 2020 when Howmet Aerospace Inc. (previously named Arconic Inc.) separated from Arconic Corporation.

Revenue and Profitability

Q1 2025

Q4 2025

Q1 2026

Q1 YoY

Revenue

$1.942B

$2.168B

$2.313B

+19%

Adj EBITDA1

$560M

$653M

$740M

+32%

Adj EBITDA Margin1

28.8%

30.1%

32.0%

+320 bps

Adj Operating Income1

$491M

$580M

$666M

+36%

Adj Operating Income Margin1

25.3%

26.8%

28.8%

+350 bps

Adj Earnings Per Share2

$0.86

$1.05

$1.22

+42%

Q1 2026 Balance Sheet and Cash Flow

Record Q1 Free Cash Flow3 of $359M

Repurchased $300M of Common Stock at ~$230 Avg Price per Share; Repurchased Additional $150M in April

Net Debt-to-LTM EBITDA4 Improved to 0.9x Prior to CAM Acquisition

Closed Fastening Systems' Brunner Acquisition in February and Consolidated Aerospace Manufacturing (CAM) Acquisition in April

Divested Engineered Structures' Savannah Disk Forging Facility

Operating income (GAAP): Q1 2025 = $494M, Q4 2025 = $489M, Q1 2026 = $753M; Operating income margin (GAAP): Q1 2025 = 25.4%, Q4 2025 = 22.6%, Q1 2026 = 32.6% 2) EPS (GAAP): Q1 2025

= $0.84, Q4 2025 = $0.92, Q1 2026 = $1.44 3) Free Cash Flow = Cash provided from operations less Capital expenditures; Q1 2026: Cash provided from operations = $453M, Cash provided from financing activities = $1,226M, Cash provided from investing activities = $14M 4) Last twelve months (LTM) Adj. EBITDA See appendix for reconciliations

Q1 2026 Revenue by Market

(% of total)

Other

Revenue by Market

(% change)

YoY Seq

Gas Turbines

12%

Commercial Aerospace 20% 7%

Defense Aerospace 10% Flat

Commercial Transportation

15%

16%

$2.313B

Total Revenue

53%

Commercial Transportation 13% 12%

Gas Turbines 39% 7%

Defense Aerospace

Commercial Aerospace

Total Revenue 19% 7%

Enhanced Profitability

Revenue Up 19% YoY, driven by Comm Aero Up 20%, Defense Aero Up 10%, and Gas Turbines Up 39% YoY

Adj EBITDA1 of $740M, Up 32% YoY. Adj EBITDA Margin1 of 32.0%, Up ~320 bps YoY

Adj Earnings Per Share2 of $1.22, Up 42% YoY

Strong Balance Sheet and Cash Flow

Free Cash Flow3 of $359M; Ending Cash Balance of ~$2.4B

Added $1.65B of Debt and Commercial Paper to Fund CAM Acquisition of ~$1.8B

Net Debt-to-LTM EBITDA4 Improved to 0.9x Prior to CAM Acquisition

Fitch Upgrade to A-; All Credit Ratings Remain at least Three Notches into Investment Grade

Capital Deployment

Capex of $94M; Continued Growth Investments in Engine Products Segment

M&A Activity includes ~$230M for Sale of Savannah and ~$120M for Acquisition of Brunner

Repurchased $300M of Common Stock at ~$230 Avg Price per Share; Repurchased Additional $150M in April

Paid $48M in Dividends; Common Stock Dividend at $0.12 Per Share, Up ~20% YoY

1) Operating income (GAAP): Q1 2025 = $494M, Q1 2026 = $753M; Operating income margin (GAAP): Q1 2025 = 25.4%, Q1 2026 = 32.6% 2) EPS (GAAP): Q1 2025 = $0.84, Q1 2026 = $1.44

+29%

$974M

$1,038M

$1,087M

$1,143M

$1,253M

3rd Party Revenue

Q1 Revenue by Market (% of total)

Other

Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026

Gas Turbines

Defense Aerospace

23%

19%

56%

Commercial Aerospace

Segment Adjusted EBITDA

and Margin

$318M

+44%

$343M $362M $393M

$458M

Q1 2026 YoY

34.4%

33.3%

33.0%

32.6%

36.6%

+ Commercial Aerospace Growth

Q1 2025

Q2 2025 Q3 2025 Q4 2025

Q1 2026

Defense Aerospace Growth

+ Gas Turbines Growth

+ Spares Growth Across All Markets

+ Net Headcount Up ~235 QoQ; Up ~1,175 YoY

$412M

$431M

$448M

$454M

$471M

3rd Party Revenue

Q1 Revenue by Market

+14%

(% of total)

Other

10%

Commercial Transportation

11%

68%

Commercial Aerospace

Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026

Defense Aerospace

11%

Segment Adjusted EBITDA

and Margin

Q1 2025

+18%

Q2 2025 Q3 2025 Q4 2025 Q1 2026

Q1 2026 YoY

31.8%

30.6%

30.8%

29.2%

30.8%

$150M

$139M

$138M

$126M

$127M

+ Commercial Aerospace Growth

+ Defense Aerospace Growth

+ Sustaining Productivity Gains

-3%

Q1 Revenue by Market (% of total)

$304M

$308M

$307M

$294M

Other

3rd Party Revenue

Defense Aerospace

26%

65%

Commercial Aerospace

Q1 2025

Q2 2025

Q3 2025

Q4 2025

Q1 2026

Segment

$67M

$68M

-1%

$64M

$66M

Q1 2026 YoY

+ Further Product Rationalization

Adjusted EBITDA

and Margin

22.0%

22.1%

20.8%

21.5%

22.4%

Focused Operational Improvement

Net Headcount Down ~65 QoQ

Q1 2025

Q2 2025

Q3 2025

Q4 2025

Q1 2026

3rd Party Revenue

+17%

Q1 Revenue by Region (% of total)

Other

13%

50%

37%

North America

Europe

$252M

$276M

$247M

$264M

$295M

Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026

Segment Adjusted EBITDA

and Margin

Q1 2025

Q2 2025 Q3 2025 Q4 2025

Q1 2026

Q1 2026 YoY

29.9%

27.5%

29.6%

27.0%

30.5%

$90M

$79M

$73M

+32%

$68M

$76M

Commercial Transportation Market Down

Volume Down 11%

+ Cost Flexing

+ Net Headcount ~Flat QoQ, Down ~125 YoY

+ Higher Cost Pass Through

Q2 2026 Guidance

FY 2026 Guidance

What we expect in 2026

Low

Baseline

High

Low

Baseline

High

Revenue

$2.390B

$2.400B

$2.410B

$9.575B

$9.650B

$9.725B

▪

FY 2026 Revenue up ~17% vs. FY 2025

Baseline Change

+$550M

Adj EBITDA

$760M

$765M

$770M

$3.025B

$3.060B

$3.095B

▪

FY 2026 Adj EBITDA up ~27% vs. FY 2025

Adj EBITDA Margin

31.8%

31.9%

32.0%

31.6%

31.7%

31.8%

Baseline

Change

+$300M

+140 bps

▪

FY 2026 Adj EPS up ~31% vs. FY 2025

Adj Earnings per Share

$1.22

$1.23

$1.24

$4.88

Baseline Change

$4.94

+$0.49

$5.00

▪

FY 2026 Capex of ~$490M, ~5% of Revenue

Free Cash Flow

$1.700B

Change

$1.750B

+$150M

$1.800B

▪

FY 2026 Free Cash Flow Conversion ~90%

Baseline

Revenue / Profit

Q1 2026

Revenue Up 19% YoY, driven by Comm Aero Up 20%, Defense Aero Up 10%, and Gas Turbines Up 39% YoY

Adj EBITDA1 of $740M, Up 32% YoY. Adj EBITDA Margin1 of 32.0%, Up ~320 bps YoY

Adj Earnings Per Share2 of $1.22, Up 42% YoY

Cash Generation / Deployment Q1 2026

Free Cash Flow3 of $359M; Ending Cash Balance of ~$2.4B

Added $1.65B of Debt and Commercial Paper to Fund CAM Acquisition of ~$1.8B

Net Debt-to-LTM EBITDA4 Improved to 0.9x Prior to CAM Acquisition

Capital Deployment: ~$350M Common Stock Repurchases and Quarterly Dividends

Guidance Expectations FY 2026

Expect Revenue Up ~17% YoY, Adj EBITDA1 Up ~27% YoY, Adj Earnings Per Share2 Up ~31% YoY

Expect Free Cash Flow3 of ~$1.75B, Up ~22% YoY, with Free Cash Flow Conversion5 of ~90%

1) Operating income (GAAP): Q1 2025 = $494M, Q1 2026 = $753M; Operating income margin (GAAP): Q1 2025 = 25.4%, Q1 2026 = 32.6% 2) EPS (GAAP): Q1 2025 = $0.84, Q1 2026 = $1.44

Full Year 2026

2026 Comments

Corporate Overhead

~$100M

Included in Adj EBITDA

Depreciation and Amortization

~$320M

Previous: ~$300M

Includes Acquisitions and Divestitures

Interest Expense

~$190M

Previous: ~$135M

Includes Acquisitions and Divestitures

Excludes borrowing, breakage, and redemption/tender fees

Operational Tax Rate

20.5% - 21.5%

Cash Tax Rate ~18% with Acquisitions and Divestitures

Pension / OPEB Expense

~$35M

~$5M Service Costs (included in Adj EBITDA)

~$30M Non-Service Costs (excluded from Adj EBITDA)

Miscellaneous Other Expenses

$15M - $20M

Previous: ~$25M

Included in Other expense (income), net

Examples are deferred compensation and foreign currency impacts

Pension / OPEB Contributions

~$65M

Capex

$470M - $510M

Previous: $450M - $490M

Engine Products Capacity Expansions

Includes Acquisitions and Divestitures

Diluted Share Count Average

~402M

Previous: ~403M

Q1 2026 Diluted Share exit rate of ~402M

Common share buyback in Q1 2026: $300M; in April 2026: $150M

Excludes any potential additional common stock repurchases

Added $400M 2028 Notes, $300M 2029 Notes, $500M 2036 Notes, and

$450M Commercial Paper to finance the CAM Acquisition

Total Debt of ~$4.7B with a Weighted Average Rate of ~4.3%

$1,000M

$1,000

$700

$636

Nov

~1.8%

$186

Jan 6.75%

$300

Jan 3.0%

$700

Feb 5.95%

$625

Oct 3.72%

$500

Nov 4.55%

$500

Apr

$500

.75%

~4.0%

$450

Mar 3.75%

$400

Aug 4.75%

$250

Apr 3.9%

$300

2026

2027

2028

2029

2030

2031

2032

2036

2037

2042

$800M

$600M

$400M

$200M

As of March 31, 2026

($ in millions, except per-share amounts)

Q1 2025

Q4 2025

Q1 2026

Net income

Diluted Earnings Per Share ("EPS") Average number of diluted shares

Special items:

Restructuring and other (credits) charges(1) Loss on debt redemption

Acquisition and acquisition-related costs(2)

Costs associated with closures, supply chain disruptions, and other items

Subtotal: Pre-tax special items

Tax impact of Pre-tax special items(3)

Subtotal

Discrete and other tax special items(4)

Total: After-tax special items

$344

$0.84 407

$(4)

$(3) 1

$(2)

$372

$0.92 404

$88 15

$106 (26)

$80

$(26)

$54

$580

$1.44 403

$(93)

$(86)

$(56)

$(30)

$(86)

Adjusted Net income

Adjusted EPS

$351

$0.86

$426

$1.05

$494

$1.22

Adjusted Net income and Adjusted EPS are non-GAAP financial measures. Management believes that these measures are meaningful to investors because management reviews the operating results of the Company excluding the impacts of Restructuring and other (credits) charges, Discrete tax items, and Other special items (collectively, "Special items"). There can be no assurances that additional Special items will not occur in future periods. To compensate for this limitation, management believes that it is appropriate to consider both Net income and Diluted EPS determined under GAAP as well as Adjusted Net income and Adjusted EPS. The change in the titles of and removal of "excluding special items" from Net income excluding Special items and Diluted EPS excluding Special items to Adjusted Net income and Adjusted EPS has not changed the definition of these measures.

(1) Restructuring and other (credits) charges for Q1 2026 included a gain on the sale of the Company's disk forging facility in Savannah, Georgia within Engineered Structures. Restructuring and other (credits) charges for Q4 2025 included a non-cash pension settlement charge of $89 primarily resulting from the purchase of group annuity contracts with a third-party carrier to pay and administer future annuity payments for its U.K. pension plan which reduced gross pension obligations.

(2) Includes legal and advisory costs, amortization expense of inventory step-up recorded in accordance with purchase accounting, and other acquisition-related costs. Additionally, includes interest expense related to the Consolidated Aerospace Manufacturing, LLC acquisition.

(3) The Tax impact of Pre-tax special items is based on the applicable statutory rates whereby the difference between such rates and the Company's consolidated estimated annual effective tax rate is itself a Special item.

(4) Discrete tax items for Q1 2026 are discussed further in the Reconciliation of the Operational Tax Rate. Discrete tax items for Q1 2025 included a net charge related to the expiration of a tax holiday in China $6, a charge for a tax reserve established in Germany $2, and a net charge for other small items $1. Discrete tax items for Q4 2025 included a benefit to release a valuation allowance related to U.S. foreign tax credits ($8), a benefit to release a valuation allowance related to U.S. state tax losses and credits ($6), a net benefit for prior year tax adjustments ($4), an excess benefit for stock compensation ($3), a benefit related to re-establishing a tax holiday in China ($4), a net benefit for other small items ($2), and a charge related to the expiration of a tax holiday in China $2.

($ in millions)

20.6%

18.1%

Tax rate

$128

Provision for income taxes

$622

$(86)

$708

Income before income taxes

Operational tax rate, as adjusted

Q1 2026

Special items(1)(2)

Effective tax rate, as reported

Operational tax rate is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because management reviews the operating results of the Company excluding the impacts of Special items. There can be no assurances that additional Special items will not occur in future periods. To compensate for this limitation, management believes that it is appropriate to consider both the Effective tax rate determined under GAAP as well as the Operational tax rate.

(1) Pre-tax special items for Q1 2026 included Restructuring and other credits ($93) and Acquisition and acquisition-related costs $7.

(2) Tax Special items includes discrete tax items, the tax impact on Special items based on the applicable statutory rates, the difference between such rates and the Company's consolidated estimated annual effective tax rate and other tax related items. Discrete tax items for Q1 2026 included an excess benefit for stock compensation ($21). (Tax deduction is based on stock price at vesting date while book expense is based on stock price at grant date.)

Engine Products

Fastening Systems

Engineered Structures

Forged Wheels

Total Segment

($ in millions)

Q1 2025

Aerospace - Commercial

$535

$275

$206

$1,016

Aerospace - Defense

$211

$42

$80

$333

Commercial Transportation

$53

$252

$305

Gas Turbines

$204

Other

$24

$42

$18

$84

Total end-market revenue

$974

$412

$304

$252

$1,942

Q4 2025

Aerospace - Commercial

$617

$320

$200

$1,137

Aerospace - Defense

$232

$46

$89

$367

Commercial Transportation

$46

$264

$310

Gas Turbines

$266

Other

$28

$42

$18

$88

Total end-market revenue

$1,143

$454

$307

$264

$2,168

Q1 2026

Aerospace - Commercial

$702

$322

$191

$1,215

Aerospace - Defense

$238

$51

$77

$366

Commercial Transportation

$51

$295

$346

Gas Turbines

$284

Other

$29

$47

$26

$102

Total end-market revenue

$1,253

$471

$294

$295

$2,313

Revenue includes impacts of foreign currency and material and other inflationary cost pass through.

In the first quarter of 2026, the Company reorganized Howmet's segments by moving a titanium alloy location from Engine Products to Engineered Structures as it better aligns with the operations of the Engineered Structures segment. The comparable periods of Engine Products and Engineered Structures have been recast to reflect the new alignment. The recasting had no impact on the Company's consolidated results, financial position or cash flows.

($ in millions)

FY 2024

Engine Products

Third-party sales

$ 3,671

Inter-segment sales

$ 6

Provision for depreciation and amortization

$ 138

Segment Adjusted EBITDA

$ 1,129

Segment Adjusted EBITDA Margin

30.8

Depreciation and amortization % of Revenue

3.8

Restructuring and other charges

$ 1

Capital expenditures

$ 216

Fastening Systems

Third-party sales

$ 1,576

Inter-segment sales

$ 1

Provision for depreciation and amortization

$ 47

Segment Adjusted EBITDA

$ 406

Segment Adjusted EBITDA Margin

25.8

Depreciation and amortization % of Revenue

3.0

Restructuring and other charges (credits)

$ 5

Capital expenditures

$ 26

Q1 2025

Q2 2025

Q3 2025

Q4 2025

FY 2025

Q1 2026

$ 974

$ 1,038

$ 1,087

$ 1,143

$ 4,242

$ 1,253

$ 2

$ 3

$ 2

$ 1

$ 8

$ 2

$ 33

$ 35

$ 37

$ 39

$ 144

$ 38

$ 318

$ 343

$ 362

$ 393

$ 1,416

$ 458

32.6 %

33.0 %

33.3 %

34.4 %

33.4 %

36.6 %

3.4 %

3.0 %

$ -

$ 88

$ -

$ 85

$ 74

$ 73

$ 84

$ 316

$ 59

$ 412

$ 431

$ 448

$ 454

$ 1,745

$ 471

$ -

$ 1

$ -

$ 12

$ 48

$ 13

$ 127

$ 126

$ 138

$ 139

$ 530

$ 150

30.8 %

29.2 %

30.8 %

30.6 %

30.4 %

31.8 %

2.9 %

2.8 %

2.7 %

2.6 %

2.8 %

$ -

$ 1

$ -

$ (1)

$ -

$ 10

$ 9

$ 13

$ 20

$ 52

$ 17

comparable periods of Engine Products and Engineered Structures have been recast to reflect the new alignment. The recasting had no impact on the Company's consolidated results, financial position or cash flows.

($ in millions)

FY 2024

Engineered Structures

Third-party sales

$ 1,129

Inter-segment sales

$ 28

Provision for depreciation and amortization

$ 43

Segment Adjusted EBITDA

$ 187

Segment Adjusted EBITDA Margin

16.6

Depreciation and amortization % of Revenue

3.8

Restructuring and other charges (credits)

$ 12

Capital expenditures

$ 23

Forged Wheels

Third-party sales

$ 1,054

Provision for depreciation and amortization

$ 42

Segment Adjusted EBITDA

$ 287

Segment Adjusted EBITDA Margin

27.2

Depreciation and amortization % of Revenue

4.0

Restructuring and other charges (credits)

$ 1

Capital expenditures

$ 45

Q1 2025

Q2 2025

Q3 2025

Q4 2025

FY 2025

Q1 2026

$ 304

$ 308

$ 307

$ 1,226

$ 294

$ 7

$ 8

$ 7

$ 4

$ 26

$ 8

$ 13

$ 10

$ 43

$ 10

$ 67

$ 68

$ 64

$ 66

$ 265

$ 66

22.0 %

22.1 %

20.8 %

21.5 %

21.6 %

22.4 %

4.3 %

3.2 %

3.3 %

3.5 %

3.4 %

$ (4)

$ -

$ (4)

$ (93)

$ 6

$ 7

$ 10

$ 13

$ 36

$ 12

$ 252

$ 276

$ 247

$ 264

$ 1,039

$ 295

$ 10

$ 11

$ 42

$ 11

$ 68

$ 76

$ 73

$ 79

$ 296

$ 90

27.0 %

27.5 %

29.6 %

29.9 %

28.5 %

30.5 %

4.0 %

3.6 %

4.5 %

4.2 %

4.0 %

3.7 %

$ -

$ (1)

$ -

$ (1)

$ -

$ 15

$ 8

$ 9

$ 4

$ 36

$ 3

($ in millions)

Q1 2025

Q2 2025

Q3 2025

Q4 2025

FY 2025

Q1 2026

Operating income

$494

$521

$542

$489

$2,046

$753

Segment provision for depreciation and amortization

277

Unallocated amounts:

Restructuring and other (credits) charges

(4)

(93)

Corporate expense(1)

100

Total Segment Adjusted EBITDA

$580

$613

$637

$677

$2,507

$764

Total Segment third-party sales

1,942

2,053

2,089

2,168

8,252

2,313

Total Segment Adjusted EBITDA margin

29.9%

30.5%

31.2%

30.4%

33.0%

Total Segment Adjusted EBITDA and Total Segment Adjusted EBITDA margin are non-GAAP financial measures. Management believes that these measures are meaningful to investors because Total Segment Adjusted EBITDA and Total Segment Adjusted EBITDA margin provide additional information with respect to the Company's operating performance and the Company's ability to meet its financial obligations. The Total Segment Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies. Howmet's definition of Total Segment Adjusted EBITDA is defined as Operating Income excluding Restructuring and other (credits) charges and Special items and Provision for depreciation and amortization. Special items, including Restructuring and other (credits) charges, are excluded from Adjusted EBITDA. Current and prior periods' Segment Adjusted EBITDA calculations have not changed although the definitions have been simplified. Differences between the total segment and consolidated totals are in Corporate.

(1) Pre-tax special items included in Corporate expense

Q1 2025

Q2 2025

Q3 2025

Q4 2025

FY 2025

Q1 2026

Acquisition and acquisition-related costs(1)

Costs (benefits) associated with closures, supply chain disruptions, and other items

(1)

Total Pre-tax special items included in Corporate expense

$(1)

(1) Excludes interest expense related to the Consolidated Aerospace Manufacturing, LLC acquisition.

($ in millions)

Q1 2025

Q2 2025

Q3 2025

Q4 2025

FY 2025

Q1 2026

Corporate expense

$22

$25

$28

$100

$32

Provision for depreciation and amortization

Acquisition and acquisition-related costs(1)

Costs (benefits) associated with closures, supply chain disruptions, and other items

(1)

Adjusted Corporate expense

$20

$24

$23

$24

$91

$24

Adjusted Corporate expense is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because management reviews the operating results of the Company excluding the impacts of depreciation and Special items. There can be no assurances that additional Special items will not occur in future periods. To compensate for this limitation, management believes that it is appropriate to consider both Corporate expense determined under GAAP as well as Adjusted Corporate expense. The removal of "excluding special items" from Adjusted Corporate expense has not changed the definition of this measure.

(1) Excludes interest expense related to the Consolidated Aerospace Manufacturing, LLC acquisition.

($ in millions)

Q1 2025

Q2 2025

Q3 2025

Q4 2025

FY 2025

Q1 2026

Third-party sales

$1,942

$2,053

$2,089

$2,168

$8,252

$2,313

Operating income

$494

$521

$542

$489

$2,046

$753

Operating income margin

25.4%

25.9%

22.6%

24.8%

32.6%

Operating income

$494

$521

$542

$489

$2,046

$753

Add:

Restructuring and other (credits) charges

$(4)

$88

$84

$(93)

Provision for depreciation and amortization

283

Acquisition and acquisition-related costs(1)

Costs (benefits) associated with closures, supply chain disruptions, and other items

(1)

Adjusted EBITDA

$560

$589

$614

$653

$2,416

$740

Adjusted EBITDA margin

28.8%

28.7%

29.4%

30.1%

29.3%

32.0%

Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. The removal of "excluding special items" from Adjusted EBITDA and Adjusted EBITDA margin has not changed the definition of these measures. Management believes that these measures are meaningful to investors because they provide additional information with respect to the Company's operating performance and the Company's ability to meet its financial obligations. The Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies. The Company's definition of Adjusted EBITDA is defined as Operating Income excluding Restructuring and other (credits) charges and Special items and Provision for depreciation and amortization. Special items, including Restructuring and other (credits) charges, are excluded from Adjusted EBITDA. Current and prior periods' Adjusted EBITDA calculations have not changed although the definitions have been simplified.

(1) Excludes interest expense related to the Consolidated Aerospace Manufacturing, LLC acquisition.

($ in millions)

Q1 2025

Q2 2025

Q3 2025

Q4 2025

FY 2025

Q1 2026

Third-party sales

$1,942

$2,053

$2,089

$2,168

$8,252

$2,313

Operating income

$494

$521

$542

$489

$2,046

$753

Operating income margin

25.4%

25.9%

22.6%

24.8%

32.6%

Operating income

$494

$521

$542

$489

$2,046

$753

Add:

Restructuring and other (credits) charges

$(4)

$88

$84

$(93)

Acquisition and acquisition-related costs(1)

Costs (benefits) associated with closures, supply chain disruptions, and other items

(1)

Adjusted operating income

$491

$520

$542

$580

$2,133

$666

Adjusted operating income margin

25.3%

25.9%

26.8%

25.8%

28.8%

Adjusted operating income and Adjusted operating income margin are non-GAAP financial measures. Special items, including Restructuring and other (credits) charges, are excluded from Adjusted operating income. Management believes that these measures are meaningful to investors because management reviews the operating results of the Company excluding the impacts of Special items. There can be no assurances that additional Special items will not occur in future periods. To compensate for this limitation, management believes that it is appropriate to consider both Operating income and Operating Income margin determined under GAAP as well as Adjusted operating income and Adjusted operating income margin. The removal of "excluding special items" from Adjusted operating income and Adjusted operating income margin has not changed the definition of these measures.

(1) Excludes interest expense related to the Consolidated Aerospace Manufacturing, LLC acquisition.

($ in millions)

Q1 2025

Q1 2026

Cash provided from operations

Capital expenditures

$253

(119)

$453

(94)

Free cash flow

$134

$359

Cash (used for) provided from financing activities

$(167)

$1,226

Cash (used for) provided from investing activities

$(115)

$14

The Accounts Receivable Securitization program remains unchanged at $250 outstanding.

Free cash flow is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because management reviews cash flows generated from operations after taking into consideration capital expenditures (due to the fact that these expenditures are considered necessary to maintain and expand the Company's asset base and are expected to generate future cash flows from operations). It is important to note that Free cash flow does not represent the residual cash flow available for discretionary expenditures since other non-discretionary expenditures, such as mandatory debt service requirements, are not deducted from the measure.

($ in millions)

Trailing-12 months ended

March 31, 2026

Net income

$1,508

$1,744

Add:

Provision for income taxes

332

358

Other expense, net

Loss on debt redemption

Interest expense, net

151

155

Restructuring and other charges (credits)

(5)

Provision for depreciation and amortization

283

288

Acquisition and acquisition-related costs(1)

Costs associated with closures, supply chain disruptions, and other items

Adjusted EBITDA

$2,416

$2,596

Long-term debt due within one year Short-term borrowings

Long-term debt, less amount due within one year

$191

$2,859

$186

$450

$4,050

Total Debt, at period end

$3,050

$4,686

Less: Cash, cash equivalents, and restricted cash, at period end

$743

$2,436

Net Debt, at period end

$2,307

$2,250

Total Debt to Net Income

2.0

2.7

Net Debt to Adjusted EBITDA

1.0

0.9

Net debt, Net debt to Adjusted EBITDA, and Adjusted EBITDA are non-GAAP financial measures. The Company's definition of Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization), which is defined in accordance with the Company's term loan and revolving credit agreements, 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. The Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies. The removal of "excluding special items" from Net debt to Adjusted EBITDA and Adjusted EBITDA has not changed the definition of these measures.

Management believes that these measures are meaningful to investors because management assesses the Company's leverage position after factoring in cash that could be used to repay

outstanding debt, and also because they provide additional information with respect to the Company's operating performance and the Company's ability to meet its financial obligations.

(1) Excludes interest expense related to the Consolidated Aerospace Manufacturing, LLC acquisition. 27

Disclaimer

Howmet Aerospace Inc. published this content on May 07, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 07, 2026 at 11:32 UTC.