FY 2024: Revenue Up 12% Year Over Year; Record
Revenue, Profit and Cash Generation
FY 2024: Approx. $975 Million Deployed for
Common Stock Repurchases, Debt Reduction, and Dividends
Q1 2025: Increased Common Stock Dividend 25%
from Fourth Quarter 2024
FY 2025: Raising Revenue Growth Guidance to ~8%
YoY; Expect Improved Profit and Cash Generation
Howmet Aerospace (NYSE:HWM):
Fourth Quarter 2024 GAAP Financial Results
- Revenue of $1.9 billion, up 9% year over year, driven by
Commercial Aerospace, up 13%
- Net Income of $314 million versus $236 million in the fourth
quarter 2023; Earnings Per Share of $0.77 versus $0.57 in the
fourth quarter 2023
- Operating Income Margin of 23.5%
- Generated $480 million of cash from operations; $284 million of
cash used for financing activities; and $107 million of cash used
for investing activities
Full Year 2024 GAAP Financial Results
- Revenue of $7.4 billion, up 12% year over year, driven by
Commercial Aerospace, up 20%
- Net Income of $1.2 billion versus $765 million in the full year
2023; Earnings per Share of $2.81 versus $1.83 in the full year
2023
- Operating Income Margin of 22.0%
- $1.3 billion cash from operations; $1.0 billion of cash used
for financing activities; and $316 million of cash used for
investing activities; Free Cash Flow1 85% of Net Income
Fourth Quarter 2024 Adjusted Financial Results
- Adj. EBITDA excluding special items of $507 million, up 27%
year over year
- Adj. EBITDA Margin excluding special items of 26.8%
- Adj. Operating Income Margin excluding special items of
23.0%
- Adj. Earnings Per Share excluding special items of $0.74, up
40% year over year
- $378 million of Free Cash Flow
Full Year 2024 Adjusted Financial Results
- Adj. EBITDA excluding special items of $1.9 billion, up 27%
year over year
- Adj. EBITDA Margin excluding special items of 25.8%
- Adj. Operating Income Margin excluding special items of
22.0%
- Adj. Earnings Per Share excluding special items of $2.69, up
46% year over year
- $977 million of Free Cash Flow; 88% conversion of Net Income
excluding special items
________________________
1 Free Cash Flow = Cash provided from
operations less Capital expenditures
2025 Guidance
Q1 2025 Guidance
FY 2025 Guidance
Low
Baseline
High
Low
Baseline
High
Revenue
$1.925B
$1.935B
$1.945B
$7.930B
$8.030B
$8.130B
Adj. EBITDA*2
$515M
$520M
$525M
$2.105B
$2.130B
$2.155B
Adj. EBITDA Margin*2
26.8%
26.9%
27.0%
26.5%
26.5%
26.5%
Adj. Earnings per Share*2
$0.75
$0.76
$0.77
$3.13
$3.17
$3.21
Free Cash Flow2
$1.025B
$1.075B
$1.125B
Key Announcements
- In the fourth quarter 2024, the Company repurchased $190
million of common stock at an average price of $109.75 per share,
retiring approximately 1.7 million shares.
- In January 2025, the Company repurchased an additional $50
million of common stock. As of January 31, 2025, total share
repurchase authorization available was approximately $2.15
billion.
- In the fourth quarter 2024, the Company paid down $60 million
of its US dollar-denominated Term Loan, resulting in annualized
interest expense savings of approximately $3 million.
- On November 25, 2024, the Company paid a quarterly dividend of
$0.08 per share on its common stock.
- The Company increased the quarterly dividend of its common
stock by 25% to $0.10 per share in the first quarter 2025.
Howmet Aerospace (NYSE: HWM) today reported fourth quarter and
full year 2024 results. The Company reported fourth quarter 2024
revenues of $1.9 billion, up 9% year over year, primarily driven by
growth in the commercial aerospace market of 13%.
Howmet Aerospace reported Net Income of $314 million, or $0.77
per share, in the fourth quarter 2024 versus $236 million, or $0.57
per share, in the fourth quarter 2023, and included approximately
$11 million in net benefit from special items. Net Income excluding
special items was $303 million, or $0.74 per share, in the fourth
quarter 2024, versus $218 million, or $0.53 per share, in the
fourth quarter 2023.
Fourth quarter 2024 Operating Income was $445 million, up 37%
year over year. Fourth quarter Adjusted Operating Income excluding
special items was $434 million, up 32% year over year. Operating
Income Margin was up approximately 470 basis points year over year
at 23.5% in the fourth quarter 2024. Fourth quarter Adjusted
Operating Income Margin excluding special items was 23.0%, up
approximately 390 basis points year over year.
Fourth quarter 2024 Adjusted EBITDA excluding special items was
$507 million, up 27% year over year. The year-over-year increase
was driven by growth in the commercial aerospace and defense
aerospace markets. Adjusted EBITDA Margin excluding special items
was up approximately 380 basis points year over year at 26.8%.
________________________
* Excluding special items
2 Reconciliations of the forward-looking
non-GAAP measures to the most directly comparable GAAP measures, 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 – for further detail, see “2025 Guidance” below.
Howmet Aerospace reported full year 2024 revenues of $7.4
billion, up 12% year over year, primarily driven by growth in the
commercial aerospace market of 20%.
The Company reported Net Income of $1.2 billion, or $2.81 per
share, in the full year 2024 versus $765 million, or $1.83 per
share, in the full year 2023, and included approximately $48
million in net benefit from special items. Net Income excluding
special items was $1.1 billion, or $2.69 per share, in the full
year 2024, versus $766 million, or $1.84 per share, in the full
year 2023.
Full year 2024 Operating Income was $1.6 billion, up 36% year
over year. Full year Adjusted Operating Income excluding special
items was $1.6 billion, up 32% year over year. Operating Income
Margin was up approximately 390 basis points year over year at
22.0% in the full year 2024. Full year Adjusted Operating Income
Margin excluding special items was 22.0%, up approximately 340
basis points year over year.
Full year 2024 Adjusted EBITDA excluding special items was $1.9
billion, up 27% year over year. The year-over-year increase was
driven by growth in the commercial aerospace and defense aerospace
markets. Adjusted EBITDA Margin excluding special items was up
approximately 310 basis points year over year at 25.8%.
Howmet Aerospace Executive Chairman and Chief Executive Officer
John Plant said, “Howmet drove a healthy set of results to close
out the year, exceeding the high end of guidance. Revenue in the
fourth quarter 2024 grew 9% year over year to a record $1.9
billion, with commercial aerospace growth of 13% supported by
engine spares volumes. Adjusted EBITDA* grew 27% to $507 million
and Adjusted EBITDA Margin* increased approximately 380 basis
points to 26.8%, also records. Adjusted Earnings per Share* grew
40% to a record $0.74.”
Mr. Plant continued, “Robust cash generation continues to
support Howmet’s strong balance sheet as well as an attractive
shareholder return profile. In full year 2024, the Company
generated $977 million of Free Cash Flow for an 88% conversion of
Net Income*, and deployed approximately $975 million of cash in the
form of common stock repurchases, debt reduction, and dividends. On
January 27, the Board of Directors approved a 25% increase in the
common stock dividend to $0.10 per share.”
“The outlook for commercial aerospace remains solid with rising
OEM production rates supported by strong demand as well as
continued healthy growth in engine spares demand. We expect
continued growth in the defense aerospace and industrial end
markets, with the commercial transportation market anticipated to
be soft until the second half of 2025. The mid-point of our 2025
revenue growth guidance is increased to approximately 8% year over
year compared to the 7.5% outlook provided at third quarter 2024
earnings, and this extra growth is on top of a strong finish to
2024. We continue to employ a cautious view on underlying build
rates in our guidance, assuming The Boeing Company produces
approximately 25 737-MAX aircraft per month and 6 787 aircraft per
month on average across 2025 and Airbus averages mid-50s per month
on the A320 and approximately 6 per month on the A350. Free Cash
Flow in 2025 is expected to exceed $1 billion with approximately
85% conversion of Net Income*, while investing in additional
capital expenditures for growth.”
________________________
* Excluding special items
Fourth Quarter and Full Year 2024 Segment Performance
Engine
Products
Q4 2023
FY 2023
Q3 2024
Q4 2024
FY 2024
(in U.S. dollar amounts)
Third-party sales
$852
$3,266
$945
$972
$3,735
Inter-segment sales
$1
$13
$3
$1
$7
Provision for depreciation and
amortization
$33
$130
$34
$39
$139
Segment Adjusted EBITDA
$233
$887
$307
$302
$1,150
Segment Adjusted EBITDA Margin
27.3%
27.2%
32.5%
31.1%
30.8%
Restructuring and other (credits)
charges
$(1)
$(2)
$1
$1
$1
Capital expenditures
$28
$112
$55
$76
$219
Engine Products reported fourth quarter 2024 revenue of $972
million, an increase of 14% year over year, due to growth in the
commercial aerospace, defense aerospace, oil & gas, and
industrial gas turbine markets. Segment Adjusted EBITDA was $302
million, up 30% year over year, driven by growth in the commercial
aerospace, defense aerospace, oil & gas, and industrial gas
turbine markets. The segment absorbed approximately 220 net
headcount in the quarter and approximately 1,205 in full year 2024
in support of expected revenue increases. Segment Adjusted EBITDA
margin increased approximately 380 basis points year over year to
31.1%.
Engine Products reported full year 2024 revenue of $3.7 billion,
up 14% year over year, due to growth in the commercial aerospace,
defense aerospace, oil and gas, and industrial gas turbine markets.
Segment Adjusted EBITDA was a record $1.2 billion, up 30% year over
year, driven primarily by growth in the commercial aerospace,
defense aerospace, oil and gas, and industrial gas turbine markets.
Segment Adjusted EBITDA margin increased approximately 360 basis
points year over year to 30.8%.
Fastening
Systems
Q4 2023
FY 2023
Q3 2024
Q4 2024
FY 2024
(in U.S. dollar amounts)
Third-party sales
$360
$1,349
$392
$401
$1,576
Inter-segment sales
$—
$—
$—
$1
$1
Provision for depreciation and
amortization
$11
$46
$12
$11
$47
Segment Adjusted EBITDA
$80
$278
$102
$111
$406
Segment Adjusted EBITDA Margin
22.2%
20.6%
26.0%
27.7%
25.8%
Restructuring and other charges
$—
$1
$1
$2
$5
Capital expenditures
$8
$31
$5
$9
$26
Fastening Systems reported fourth quarter 2024 revenue of $401
million, an increase of 11% year over year due to growth in the
commercial aerospace market, including wide body aircraft recovery.
Segment Adjusted EBITDA was $111 million, up 39% year over year,
driven by growth in the commercial aerospace market as well as
productivity gains. Segment Adjusted EBITDA margin increased
approximately 550 basis points year over year to 27.7%.
Fastening Systems reported full year 2024 revenue of $1.6
billion, up 17% year over year, due to growth in the commercial
aerospace market, including wide body recovery. Segment Adjusted
EBITDA was $406 million, up 46% year over year, driven primarily by
growth in the commercial aerospace market as well as productivity
gains. Segment Adjusted EBITDA margin increased approximately 520
basis points year over year to 25.8%.
Engineered
Structures
Q4 2023
FY 2023
Q3 2024
Q4 2024
FY 2024
(in U.S. dollar amounts)
Third-party sales
$244
$878
$253
$275
$1,065
Inter-segment sales
$2
$3
$3
$3
$10
Provision for depreciation and
amortization
$11
$47
$10
$10
$42
Segment Adjusted EBITDA
$33
$113
$38
$51
$166
Segment Adjusted EBITDA Margin
13.5%
12.9%
15.0%
18.5%
15.6%
Restructuring and other charges
(credits)
$14
$21
$1
$(3)
$12
Capital expenditures
$5
$26
$5
$4
$20
Engineered Structures reported fourth quarter 2024 revenue of
$275 million, an increase of 13% year over year due to growth in
the commercial aerospace and defense aerospace markets. Segment
Adjusted EBITDA was $51 million, up 55% year over year, driven by
growth in the commercial aerospace and defense aerospace markets.
Segment Adjusted EBITDA margin increased approximately 500 basis
points year over year to 18.5%.
Engineered Structures reported full year 2024 revenue of $1.1
billion, up 21% year over year, due to growth in the commercial
aerospace and defense aerospace markets. Segment Adjusted EBITDA
was $166 million, up 47% year over year, driven primarily by growth
in the commercial aerospace and defense aerospace markets. Segment
Adjusted EBITDA margin increased approximately 270 basis points
year over year to 15.6%.
Forged
Wheels
Q4 2023
FY 2023
Q3 2024
Q4 2024
FY 2024
(in U.S. dollar amounts)
Third-party sales
$275
$1,147
$245
$243
$1,054
Provision for depreciation and
amortization
$10
$39
$10
$12
$42
Segment Adjusted EBITDA
$72
$309
$64
$66
$287
Segment Adjusted EBITDA Margin
26.2%
26.9%
26.1%
27.2%
27.2%
Restructuring and other charges
$—
$—
$1
$—
$1
Capital expenditures
$11
$36
$14
$10
$45
Forged Wheels reported fourth quarter 2024 revenue of $243
million, a decrease of 12% year over year due to lower volumes in
the commercial transportation market. Segment Adjusted EBITDA was
$66 million, a decrease of approximately 8% year over year, driven
by lower volumes in the commercial transportation market. Segment
Adjusted EBITDA margin increased approximately 100 basis points
year over year to 27.2%.
Forged Wheels reported full year 2024 revenue of $1.1 billion,
down 8% year over year, due to lower volumes in the commercial
transportation market as well as a decrease in aluminum and other
inflationary cost pass through. Segment Adjusted EBITDA was $287
million, down 7% year over year, driven primarily by lower volumes
in the commercial transportation market. Segment Adjusted EBITDA
margin increased approximately 30 basis points year over year to
27.2%.
Key Announcements
Repurchased $190 Million of Common Stock in Fourth Quarter
2024, $500 Million in Full Year 2024; $50 Million in January
2025
In the fourth quarter 2024, Howmet Aerospace repurchased $190
million of common stock at an average price of $109.75 per share,
retiring approximately 1.7 million shares.
In the full year 2024, the Company repurchased $500 million of
common stock at an average price of $86.65 per share, retiring
approximately 5.8 million shares.
In January 2025, the Company repurchased an additional $50
million of common stock at an average price of $116.39 per share,
retiring approximately 0.4 million shares.
As of January 31, 2025, total share repurchase authorization
available was approximately $2.15 billion.
Paid Down $60 Million of US Dollar-Denominated Term Loan;
Reduced Debt $365 Million in Full Year 2024
In the fourth quarter 2024, the Company paid down $60 million of
its US dollar-denominated Term Loan, resulting in annualized
interest expense savings of approximately $3 million. The Company
has $140 million remaining outstanding on the USD Term Loan due
November 2026.
In the full year 2024, the Company reduced gross debt by $365
million, resulting in annualized interest expense savings of
approximately $37 million.
Quarterly Common Stock Dividend of $0.08 Per Share in Fourth
Quarter 2024; $0.10 Per Share in First Quarter 2025
On November 25, 2024, the Company paid a quarterly dividend of
$0.08 per share on its common stock to holders of record at the
close of business November 8, 2024.
On January 27, 2025, the Board of Directors declared a dividend
of $0.10 per share on the Company’s common stock to be paid on
February 25, 2025 to holders of record as of the close of business
on February 7, 2025. The quarterly dividend represents a 25%
increase from the prior dividend of $0.08 per share.
2025 Guidance
Q1 2025 Guidance
FY 2025 Guidance
Low
Baseline
High
Low
Baseline
High
Revenue
$1.925B
$1.935B
$1.945B
$7.930B
$8.030B
$8.130B
Adj. EBITDA*1
$515M
$520M
$525M
$2.105B
$2.130B
$2.155B
Adj. EBITDA Margin*1
26.8%
26.9%
27.0%
26.5%
26.5%
26.5%
Adj. Earnings per Share*1
$0.75
$0.76
$0.77
$3.13
$3.17
$3.21
Free Cash Flow1
$1.025B
$1.075B
$1.125B
* Excluding Special Items
1 Reconciliations of the
forward-looking non-GAAP financial measures to the most directly
comparable GAAP financial measures, 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. In addition, there is inherent variability
already included in the GAAP measures, including, but not limited
to, price/mix and volume. Howmet Aerospace believes such
reconciliations would imply a degree of precision that would be
confusing or misleading to investors.
Howmet Aerospace will hold its quarterly conference call at
10:00 AM Eastern Time on Thursday, February 13, 2025. The call will
be webcast via www.howmet.com. The press release and presentation
materials will be available at approximately 7:00 AM ET on February
13, via the “Investors” section of the Howmet Aerospace
website.
About Howmet Aerospace
Howmet Aerospace Inc., headquartered in Pittsburgh,
Pennsylvania, is a leading global provider of advanced engineered
solutions for the aerospace and transportation industries. 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. With approximately 1,170
granted and pending patents, the Company’s differentiated
technologies enable lighter, more fuel-efficient aircraft and
commercial trucks to operate with a lower carbon footprint. For
more information, visit www.howmet.com.
Dissemination of Company Information
Howmet Aerospace intends to make future announcements regarding
Company developments and financial performance through its website
at www.howmet.com.
Forward-Looking Statements
This release contains statements that relate to future events
and expectations and as such constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements include those containing such
words as "anticipates", "believes", "could", “envisions”,
"estimates", "expects", "forecasts", "goal", "guidance", "intends",
"may", "outlook", "plans", "projects", "seeks", "sees", "should",
"targets", "will", "would", or other words of similar meaning. All
statements that reflect Howmet Aerospace’s expectations,
assumptions or projections about the future, other than statements
of historical fact, are forward-looking statements, including,
without limitation, statements, forecasts and outlook relating to
the condition of end markets; future financial results or operating
performance; future strategic actions; Howmet Aerospace's
strategies, outlook, and business and financial prospects; and any
future dividends, debt issuances, debt reduction and repurchases of
its common stock. These statements reflect beliefs and assumptions
that are based on Howmet Aerospace’s perception of historical
trends, current conditions and expected future developments, as
well as other factors Howmet Aerospace believes are appropriate in
the circumstances. Forward-looking statements are not guarantees of
future performance and are subject to risks, uncertainties and
changes in circumstances that are difficult to predict, which could
cause actual results to differ materially from those indicated by
these statements. Such risks and uncertainties include, but are not
limited to: (a) deterioration in global economic and financial
market conditions generally; (b) unfavorable changes in the markets
served by Howmet Aerospace; (c) the impact of potential cyber
attacks and information technology or data security breaches; (d)
the loss of significant customers or adverse changes in customers’
business or financial conditions; (e) manufacturing difficulties or
other issues that impact product performance, quality or safety;
(f) inability of suppliers to meet obligations due to supply chain
disruptions or otherwise; (g) failure to attract and retain a
qualified workforce and key personnel, labor disputes or other
employee relations issues; (h) the inability to achieve revenue
growth, cash generation, restructuring plans, cost reductions,
improvement in profitability, or strengthening of competitiveness
and operations anticipated or targeted; (I) inability to meet
increased demand, production targets or commitments; (j)
competition from new product offerings, disruptive technologies or
other developments; (k) geopolitical, economic, and regulatory
risks relating to Howmet Aerospace’s global operations, including
geopolitical and diplomatic tensions, instabilities, conflicts and
wars, as well as compliance with U.S. and foreign trade and tax
laws, sanctions, embargoes and other regulations; (l) the outcome
of contingencies, including legal proceedings, government or
regulatory investigations, and environmental remediation, which can
expose Howmet Aerospace to substantial costs and liabilities; (m)
failure to comply with government contracting regulations; (n)
adverse changes in discount rates or investment returns on pension
assets; and (o) the other risk factors summarized in Howmet
Aerospace’s Form 10-K for the year ended December 31, 2023 and
other reports filed with the U.S. Securities and Exchange
Commission. Market projections are subject to the risks discussed
above and other risks in the market. Under its share repurchase
program, the Company may repurchase shares from time to time, in
amounts, at prices, and at such times as the Company deems
appropriate, subject to market conditions, legal requirements and
other considerations. The Company is not obligated to repurchase
any specific number of shares or to do so at any particular time.
The declaration of any future dividends is subject to the
discretion and approval of the Board of Directors after the Board’s
consideration of all factors it deems relevant and subject to
applicable law. The Company may modify, suspend, or cancel its
share repurchase program or its dividend policy in any manner and
at any time that it may deem necessary or appropriate. Credit
ratings are not a recommendation to buy or hold any Howmet
Aerospace securities, and they may be revised or revoked at any
time at the sole discretion of the credit rating organizations. The
statements in this release are made as of the date of this release,
even if subsequently made available by Howmet Aerospace on its
website or otherwise. Howmet Aerospace disclaims any intention or
obligation to update publicly any forward-looking statements,
whether in response to new information, future events, or
otherwise, except as required by applicable law.
Non-GAAP Financial Measures
Some of the information included in this release 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 schedules to this
release.
Other Information
In this press release, the acronym “FY” means “full year”; “Q”
means “quarter”; “YoY” means year over year; “Adj.” means adjusted;
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.
Howmet Aerospace Inc. and
subsidiaries
Statement of Consolidated Operations
(unaudited)
(in U.S. dollar millions, except
per-share and share amounts)
Quarter ended
December 31, 2024
September 30, 2024
December 31, 2023
Sales
$
1,891
$
1,835
$
1,731
Cost of goods sold (exclusive of expenses
below)
1,289
1,253
1,230
Selling, general administrative, and other
expenses
77
85
83
Research and development expenses
7
9
9
Provision for depreciation and
amortization
73
68
68
Restructuring and other (credits)
charges
—
(1
)
15
Operating income
445
421
326
Loss on debt redemption
—
6
1
Interest expense, net
40
44
52
Other expense, net
13
17
3
Income before income taxes
392
354
270
Provision for income taxes
78
22
34
Net income
$
314
$
332
$
236
Amounts Attributable to Howmet
Aerospace Common Shareholders:
Earnings per share - basic(1):
Net income per share
$
0.77
$
0.81
$
0.57
Average number of shares(2)(3)
406
408
411
Earnings per share - diluted(1):
Net income per share
$
0.77
$
0.81
$
0.57
Average number of shares(2)(3)
408
410
414
Common stock outstanding at the end of the
period
405
407
410
(1)
In order to calculate both basic and
diluted earnings per share, preferred stock dividends declared of
less than $1 for the quarters presented need to be subtracted from
Net income.
(2)
For the quarters presented, the difference
between the diluted average number of shares and the basic average
number of shares relates to share equivalents associated with
outstanding restricted stock unit awards and employee stock
options.
(3)
As average shares outstanding are used in
the calculation of both basic and diluted earnings per share, the
full impact of share repurchases is not fully realized in earnings
per share ("EPS") in the period of repurchase since share
repurchases may occur at varying points during a period.
Howmet Aerospace Inc. and
subsidiaries
Statement of Consolidated Operations
(unaudited)
(in U.S. dollar millions, except
per-share and share amounts)
For the year ended December 31,
2024
2023
Sales
$
7,430
$
6,640
Cost of goods sold (exclusive of expenses
below)
5,119
4,773
Selling, general administrative, and other
expenses
347
333
Research and development expenses
33
36
Provision for depreciation and
amortization
277
272
Restructuring and other charges
21
23
Operating income
1,633
1,203
Loss on debt redemption
6
2
Interest expense, net
182
218
Other expense, net
62
8
Income before income taxes
1,383
975
Provision for income taxes
228
210
Net income
$
1,155
$
765
Amounts Attributable to Howmet
Aerospace Common Shareholders:
Earnings per share - basic(1)(2):
Net income per share
$
2.83
$
1.85
Average number of shares(3)
408
412
Earnings per share - diluted(1)(2):
Net income per share
$
2.81
$
1.83
Average number of shares(3)
410
416
(1)
In order to calculate both basic and
diluted EPS, preferred stock dividends declared of $2 for the years
presented need to be subtracted from Net income.
(2)
For the years presented, the difference
between the diluted average number of shares and the basic average
number of shares related to share equivalents associated with
outstanding awards and employee stock options.
(3)
As average shares outstanding are used in
the calculation of both basic and diluted earnings per share, the
full impact of share repurchases is not realized in EPS in the year
of repurchase for the years presented.
Howmet Aerospace Inc. and
subsidiaries
Consolidated Balance Sheet
(unaudited)
(in U.S. dollar millions)
December 31, 2024
December 31, 2023
Assets
Current assets:
Cash and cash equivalents
$
564
$
610
Receivables from customers, less
allowances of $— in both 2024 and 2023
689
675
Other receivables
20
17
Inventories
1,840
1,765
Prepaid expenses and other current
assets
249
249
Total current assets
3,362
3,316
Properties, plants, and equipment, net
2,386
2,328
Goodwill
4,010
4,035
Deferred income taxes
35
46
Intangibles, net
475
505
Other noncurrent assets
251
198
Total assets
$
10,519
$
10,428
Liabilities
Current liabilities:
Accounts payable, trade
$
948
$
982
Accrued compensation and retirement
costs
305
263
Taxes, including income taxes
60
68
Accrued interest payable
59
65
Other current liabilities
171
200
Short-term debt
6
206
Total current liabilities
1,549
1,784
Long-term debt, less amount due within one
year
3,309
3,500
Accrued pension benefits
625
664
Accrued other postretirement benefits
54
92
Other noncurrent liabilities and deferred
credits
428
351
Total liabilities
5,965
6,391
Equity
Howmet Aerospace shareholders’ equity:
Preferred stock
55
55
Common stock
405
410
Additional capital
3,206
3,682
Retained earnings
2,766
1,720
Accumulated other comprehensive loss
(1,878
)
(1,830
)
Total equity
4,554
4,037
Total liabilities and equity
$
10,519
$
10,428
Howmet Aerospace and
subsidiaries
Statement of Consolidated Cash Flows
(unaudited)
(in U.S. dollar millions)
Year ended December
31,
2024
2023
Operating activities
Net income
$
1,155
$
765
Adjustments to reconcile net income to
cash provided from operations:
Depreciation and amortization
277
272
Deferred income taxes
55
108
Restructuring and other charges
21
23
Net realized and unrealized losses
25
22
Net periodic pension cost
40
37
Stock-based compensation
63
50
Loss on debt redemption
6
2
Other
1
3
Changes in assets and liabilities,
excluding effects of acquisitions, divestitures, and foreign
currency translation adjustments:
Increase in receivables
(57
)
(164
)
Increase in inventories
(106
)
(142
)
Increase in prepaid expenses and other
current assets
(14
)
(24
)
Decrease in accounts payable, trade
(49
)
(7
)
Increase in accrued expenses
5
37
Decrease in taxes, including income
taxes
(14
)
(7
)
Pension contributions
(79
)
(36
)
Increase in noncurrent assets
(3
)
(4
)
Decrease in noncurrent liabilities
(28
)
(34
)
Cash provided from operations
1,298
901
Financing Activities
Additions to debt
500
400
Repurchases and payments on debt
(865
)
(876
)
Debt issuance costs
(5
)
(2
)
Premiums paid on early redemption of
debt
(5
)
(1
)
Repurchases of common stock
(500
)
(250
)
Proceeds from exercise of employee stock
options
8
11
Dividends paid to shareholders
(109
)
(73
)
Taxes paid for net share settlement of
equity awards
(49
)
(77
)
Other
(1
)
—
Cash used for financing
activities
(1,026
)
(868
)
Investing Activities
Capital expenditures
(321
)
(219
)
Acquisitions, net of cash acquired
(5
)
—
Proceeds from the sale of assets and
businesses
9
2
Proceeds from the sales of securities
—
2
Other
1
—
Cash used for investing
activities
(316
)
(215
)
Effect of exchange rate changes on
cash, cash equivalents and restricted cash
(1
)
—
Net change in cash, cash equivalents and
restricted cash
(45
)
(182
)
Cash, cash equivalents and restricted cash
at beginning of period
610
792
Cash, cash equivalents and restricted
cash at end of period
$
565
$
610
Howmet Aerospace Inc. and
subsidiaries
Segment Information (unaudited)
(in U.S. dollar millions)
1Q23
2Q23
3Q23
4Q23
2023
1Q24
2Q24
3Q24
4Q24
2024
Engine
Products
Third-party sales
$
795
$
821
$
798
$
852
$
3,266
$
885
$
933
$
945
$
972
$
3,735
Inter-segment sales
$
2
$
5
$
5
$
1
$
13
$
2
$
1
$
3
$
1
$
7
Provision for depreciation and
amortization
$
32
$
32
$
33
$
33
$
130
$
33
$
33
$
34
$
39
$
139
Segment Adjusted EBITDA
$
212
$
223
$
219
$
233
$
887
$
249
$
292
$
307
$
302
$
1,150
Segment Adjusted EBITDA Margin
26.7%
27.2%
27.4%
27.3%
27.2%
28.1%
31.3%
32.5%
31.1%
30.8%
Restructuring and other (credits)
charges
$
—
$
(1
)
$
—
$
(1
)
$
(2
)
$
—
$
(1
)
$
1
$
1
$
1
Capital expenditures
$
33
$
21
$
30
$
28
$
112
$
55
$
33
$
55
$
76
$
219
Fastening
Systems
Third-party sales
$
312
$
329
$
348
$
360
$
1,349
$
389
$
394
$
392
$
401
$
1,576
Inter-segment sales
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
1
$
1
Provision for depreciation and
amortization
$
11
$
12
$
12
$
11
$
46
$
11
$
13
$
12
$
11
$
47
Segment Adjusted EBITDA
$
58
$
64
$
76
$
80
$
278
$
92
$
101
$
102
$
111
$
406
Segment Adjusted EBITDA Margin
18.6%
19.5%
21.8%
22.2%
20.6%
23.7%
25.6%
26.0%
27.7%
25.8%
Restructuring and other charges
$
—
$
—
$
1
$
—
$
1
$
—
$
2
$
1
$
2
$
5
Capital expenditures
$
9
$
5
$
9
$
8
$
31
$
7
$
5
$
5
$
9
$
26
Engineered
Structures
Third-party sales
$
207
$
200
$
227
$
244
$
878
$
262
$
275
$
253
$
275
$
1,065
Inter-segment sales
$
—
$
1
$
—
$
2
$
3
$
1
$
3
$
3
$
3
$
10
Provision for depreciation and
amortization
$
12
$
12
$
12
$
11
$
47
$
11
$
11
$
10
$
10
$
42
Segment Adjusted EBITDA
$
30
$
20
$
30
$
33
$
113
$
37
$
40
$
38
$
51
$
166
Segment Adjusted EBITDA Margin
14.5%
10.0%
13.2%
13.5%
12.9%
14.1%
14.5%
15.0%
18.5%
15.6%
Restructuring and other charges
(credits)
$
1
$
5
$
1
$
14
$
21
$
—
$
14
$
1
$
(3
)
$
12
Capital expenditures
$
10
$
5
$
6
$
5
$
26
$
6
$
5
$
5
$
4
$
20
Forged
Wheels
Third-party sales
$
289
$
298
$
285
$
275
$
1,147
$
288
$
278
$
245
$
243
$
1,054
Provision for depreciation and
amortization
$
9
$
10
$
10
$
10
$
39
$
10
$
10
$
10
$
12
$
42
Segment Adjusted EBITDA
$
79
$
81
$
77
$
72
$
309
$
82
$
75
$
64
$
66
$
287
Segment Adjusted EBITDA Margin
27.3%
27.2%
27.0%
26.2%
26.9%
28.5%
27.0%
26.1%
27.2%
27.2%
Restructuring and other charges
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
1
$
—
$
1
Capital expenditures
$
9
$
7
$
9
$
11
$
36
$
12
$
9
$
14
$
10
$
45
Differences between the total segment and
consolidated totals are in Corporate.
Howmet Aerospace Inc. and
subsidiaries
Calculation of Financial Measures
(unaudited)
(in U.S. dollar millions)
Reconciliation of Total Segment
Adjusted EBITDA to Consolidated Income Before Income Taxes
1Q23
2Q23
3Q23
4Q23
2023
1Q24
2Q24
3Q24
4Q24
2024
Income before income taxes
$
220
$
243
$
242
$
270
$
975
$
303
$
334
$
354
$
392
$
1,383
Loss on debt redemption
1
—
—
1
2
—
—
6
—
6
Interest expense, net
57
55
54
52
218
49
49
44
40
182
Other expense (income), net
7
(13
)
11
3
8
17
15
17
13
62
Operating income
$
285
$
285
$
307
$
326
$
1,203
$
369
$
398
$
421
$
445
$
1,633
Segment provision for depreciation and
amortization
64
66
67
65
262
65
67
66
72
270
Unallocated amounts:
Restructuring and other charges
(credits)
1
3
4
15
23
—
22
(1
)
—
21
Corporate expense(1)
29
34
24
12
99
26
21
25
13
85
Total Segment Adjusted EBITDA
$
379
$
388
$
402
$
418
$
1,587
$
460
$
508
$
511
$
530
$
2,009
Total Segment Adjusted EBITDA is a non-GAAP financial measure.
Management believes that this measure is meaningful to investors
because Total Segment Adjusted EBITDA provides 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 (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 (credits), are
excluded from net margin and Segment Adjusted EBITDA. Differences
between the total segment and consolidated totals are in
Corporate.
(1) Pre-tax special items included in
Corporate expense
1Q23
2Q23
3Q23
4Q23
2023
1Q24
2Q24
3Q24
4Q24
2024
Plant fire costs (reimbursements), net
$
4
$
(4
)
$
1
$
(13
)
$
(12
)
$
—
$
(6
)
$
—
$
(12
)
$
(18
)
Collective bargaining agreement
negotiation
—
7
1
—
8
—
—
—
—
—
Costs (benefits) associated with closures,
supply chain disruptions, and other items
1
9
1
2
13
1
—
(1
)
1
1
Total Pre-tax special items included in
Corporate expense
$
5
$
12
$
3
$
(11
)
$
9
$
1
$
(6
)
$
(1
)
$
(11
)
$
(17
)
Howmet Aerospace Inc. and
subsidiaries
Calculation of Financial Measures
(unaudited), continued
(in U.S. dollars millions)
Reconciliation of Free cash
flow
Quarter ended
Year ended
1Q24
2Q24
3Q24
4Q24
4Q24
Cash provided from operations
$
177
$
397
$
244
$
480
$
1,298
Capital expenditures
(82
)
(55
)
(82
)
(102
)
(321
)
Free cash flow (a)
$
95
$
342
$
162
$
378
$
977
Net income (b)
$
243
$
266
$
332
$
314
$
1,155
Free cash flow conversion as a percentage
of Net income(1) (a)/(b)
85
%
Net income excluding Special items(2)
(c)
$
238
$
276
$
290
$
303
$
1,107
Free cash flow conversion as a percentage
of Net income excluding Special items(1) (a)/(c)
88
%
The Accounts Receivable Securitization program remains unchanged
at $250 outstanding.
Free cash flow and Free cash flow conversion as a percentage of
Net income excluding Special items are non-GAAP financial measures.
Management believes that these measures are 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.
(1)
We compute free cash flow conversion on an
annual basis only due to the cycle of our business.
(2)
Please refer to the Reconciliation of Net
income excluding Special items for the reconciliation from Net
income to Net income excluding Special items.
Howmet Aerospace Inc. and
subsidiaries
Calculation of Financial Measures
(unaudited), continued
(in U.S. dollar millions, except
per-share and share amounts)
Reconciliation of Net income excluding
Special items
Quarter ended
Year ended
4Q23
3Q24
4Q24
December 31, 2023
December 31, 2024
Net income
$
236
$
332
$
314
$
765
$
1,155
Diluted earnings per share ("EPS")
$
0.57
$
0.81
$
0.77
$
1.83
$
2.81
Special items:
Restructuring and other charges
(credits)
15
(1
)
—
23
21
Loss on debt redemption and related
costs
1
6
—
2
6
Plant fire reimbursements, net
(13
)
—
(12
)
(12
)
(18
)
Collective bargaining agreement
negotiations
—
—
—
8
—
Settlement from legal proceeding(1)
—
—
—
(24
)
—
Costs (benefits) associated with closures,
supply chain disruptions, and other items
2
(1
)
1
13
1
Subtotal: Pre-tax special items(2)
5
4
(11
)
10
10
Tax impact of Pre-tax special items(3)
—
(1
)
2
—
1
Subtotal
5
3
(9
)
10
11
Discrete and other tax special
items(4)
(23
)
(45
)
(2
)
(9
)
(59
)
Total: After-tax special items
(18
)
(42
)
(11
)
1
(48
)
Net income excluding Special items
$
218
$
290
$
303
$
766
$
1,107
Diluted EPS excluding Special items
$
0.53
$
0.71
$
0.74
$
1.84
$
2.69
Average number of shares - diluted EPS
excluding Special items
414
410
408
416
410
Net income excluding Special items and Diluted EPS excluding
Special items 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 charges (credits), 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 Net income excluding
Special items and Diluted EPS excluding Special items.
(1)
Year ended December 31, 2023 related to
the reversal in the second quarter of 2023 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.
(2)
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.
(3)
Year ended December 31, 2023 included
costs for site closures and inventory disposal, an impact from
supply disruptions, and remediation and separation expenses.
(4)
Discrete tax items for the quarter ended
December 31, 2024, year ended December 31, 2023, and year ended
December 31, 2024 are discussed further in the Reconciliation of
the Operational Tax Rate. Discrete tax items for the remaining
periods included the following:
- for the quarter ended December 31, 2023, a benefit to release a
valuation allowance related to U.S. foreign tax credits ($14), a
net benefit for other small items ($4), a benefit to release a
valuation allowance related to U.S. state tax losses and tax
credits ($2), and a benefit to revalue deferred taxes for changes
to apportioned U.S. state tax rates ($2); and
- for the quarter ended September 30, 2024, a net benefit related
to additional U.S. federal and state research and development
("R&D") credits claimed for prior years upon completion of the
Company's R&D study ($44), and an excess tax benefit for stock
compensation ($2).
Howmet Aerospace Inc. and
subsidiaries
Calculation of Financial Measures
(unaudited), continued
(in U.S. dollar millions)
Reconciliation of Operational tax
rate
4Q24
YTD 2023
YTD 2024
Effective tax rate, as
reported
Special items(1)(3)
Operational tax rate, as
adjusted
Effective tax rate, as
reported
Special items(2)(3)
Operational tax rate, as
adjusted
Effective tax rate, as
reported
Special items(2)(3)
Operational tax rate, as
adjusted
Income before income taxes
$
392
$
(11
)
$
381
$
975
$
10
$
985
$
1,383
$
10
$
1,393
Provision for income taxes
$
78
$
—
$
78
$
210
$
9
$
219
$
228
$
58
$
286
Tax rate
19.9
%
20.5
%
21.5
%
22.2
%
16.5
%
20.5
%
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 4Q24 included
Plant fire reimbursements, net ($12), partially offset by Costs
associated with closures, supply chain disruptions, and other items
$1.
(2)
Pre-tax special items for YTD 2023
included Restructuring and other charges $23, Costs associated with
closures, supply chain disruptions, and other items $13, costs
related to Collective bargaining agreement negotiations $8, and
Loss on debt redemption and related costs $2, partially offset by
Net settlement from legal proceeding ($24) and Plant fire
reimbursements, net ($12). Pre-tax special items for YTD 2024
included Restructuring and other charges $21, Loss on debt
redemption $6, Costs associated with closures, supply chain
disruptions, and other items $1, partially offset by Plant fire
reimbursements, net ($18).
(3)
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 each period
included the following:
- for 4Q24, a benefit to release a valuation allowance related to
U.S. state tax losses and credits ($6), an excess tax benefit for
stock compensation ($1), a charge for prior year audit assessments
and tax adjustments $4, and a charge to adjust a valuation
allowance related to U.S. foreign tax credits $2; and
- for YTD 2023, a charge for a tax reserve established in France
$20, a benefit to release a valuation allowance related to U.S.
foreign tax credits ($14), an excess benefit for stock compensation
($9), a benefit to release a valuation allowance related to U.S.
state tax losses and tax credits ($2), a benefit to revalue
deferred taxes for changes to apportioned U.S. state tax rates
($2), and a net benefit for other small items ($2); and
- for YTD 2024, a net benefit related to additional U.S. federal
and state research and development ("R&D") credits claimed for
prior years upon completion of the Company's R&D study ($44),
an excess tax benefit for stock compensation ($10), a benefit to
release a valuation allowance related to U.S. state tax losses and
credits ($6), a benefit to release a valuation allowance related to
U.S foreign tax credits ($4), a net charge for prior year audit
assessments and tax adjustments $4, and a charge for other small
items $1.
Howmet Aerospace Inc. and
subsidiaries
Calculation of Financial Measures
(unaudited), continued
(in U.S. dollars millions)
Reconciliation of Adjusted EBITDA and
Adjusted EBITDA margin excluding Special items
Quarter ended
Year ended
4Q23
3Q24
4Q24
4Q23
4Q24
Sales
$
1,731
$
1,835
$
1,891
$
6,640
$
7,430
Operating income
$
326
$
421
$
445
$
1,203
$
1,633
Operating income margin
18.8
%
22.9
%
23.5
%
18.1
%
22.0
%
Net income
$
236
$
332
$
314
$
765
$
1,155
Add:
Provision for income taxes
$
34
$
22
$
78
$
210
$
228
Other expense, net
3
17
13
8
62
Loss on debt redemption
1
6
—
2
6
Interest expense, net
52
44
40
218
182
Restructuring and other charges
(credits)
15
(1
)
—
23
21
Provision for depreciation and
amortization
68
68
73
272
277
Adjusted EBITDA
$
409
$
488
$
518
$
1,498
$
1,931
Add:
Plant fire reimbursements, net
$
(13
)
$
—
$
(12
)
$
(12
)
$
(18
)
Collective bargaining agreement
negotiations
—
—
—
8
—
Costs (benefits) associated with closures,
supply chain disruptions, and other items
2
(1
)
1
14
1
Adjusted EBITDA excluding Special
items
$
398
$
487
$
507
$
1,508
$
1,914
Adjusted EBITDA margin excluding Special
items
23.0
%
26.5
%
26.8
%
22.7
%
25.8
%
Incremental margin
Quarter ended
Year Ended
December 31, 2023
December 31, 2024
Q4 2024 YoY
December 31, 2023
December 31, 2024
FY 2024 YoY
Third-party sales (a)
$1,731
$1,891
$160
$6,640
$7,430
$790
Operating income (b)
$326
$445
$119
$1,203
$1,633
$430
Adjusted EBITDA excluding Special items
(c)
$398
$507
$109
$1,508
$1,914
$406
Incremental operating income margin
(b)/(a)
74%
54%
Incremental margin (c)/(a)
68%
51%
Adjusted EBITDA, Adjusted EBITDA excluding Special items,
Adjusted EBITDA margin excluding Special items, Third-party sales,
and Incremental margin are non-GAAP financial 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 (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 (credits), are excluded from Adjusted EBITDA.
Howmet Aerospace Inc. and
subsidiaries
Calculation of Financial Measures
(unaudited), continued
(in U.S. dollar millions)
Reconciliation of Adjusted Operating
Income Excluding Special Items and Adjusted Operating Income Margin
Excluding Special Items
Quarter ended
Year ended
4Q23
3Q24
4Q24
December 31, 2023
December 31, 2024
Sales
$
1,731
$
1,835
$
1,891
$
6,640
$
7,430
Operating income
$
326
$
421
$
445
$
1,203
$
1,633
Operating income margin
18.8
%
22.9
%
23.5
%
18.1
%
22.0
%
Add:
Restructuring and other charges
(credits)
$
15
$
(1
)
$
—
$
23
$
21
Plant fire reimbursements, net
(13
)
—
(12
)
(12
)
(18
)
Collective bargaining agreement
negotiations
—
—
—
8
—
Costs (benefits) associated with closures,
supply chain disruptions, and other items
2
(1
)
1
14
1
Adjusted operating income excluding
Special items
$
330
$
419
$
434
$
1,236
$
1,637
Adjusted operating income margin excluding
Special items
19.1
%
22.8
%
23.0
%
18.6
%
22.0
%
Adjusted operating income excluding Special items and Adjusted
operating income margin excluding Special items 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 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 determined under GAAP as well as Operating income
excluding Special items.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250213125921/en/
Investor Contact Paul T. Luther (412) 553-1950
Paul.Luther@howmet.com
Media Contact Rob Morrison (412) 553-2666
Rob.Morrison@howmet.com
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