Howmet Aerospace HWM Form 10-Q filing Q2 FY2026

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements and Supplementary Data.

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

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

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

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

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

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

Howmet Aerospace Inc. and subsidiaries

Notes to the Consolidated Financial Statements (unaudited)

(U.S. dollars in millions, except share and per-share amounts)

A. Basis of Presentation

The interim Consolidated Financial Statements of Howmet Aerospace Inc. and its subsidiaries (“Howmet” or the “Company” or “we” or “our”) are unaudited. These Consolidated Financial Statements include all adjustments, consisting only of normal recurring adjustments, considered necessary by management to fairly state the Company’s results of operations, financial position, and cash flows. The results reported in these Consolidated Financial Statements are not necessarily indicative of the results that may be expected for the entire year. The 2025 year-end balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). This Form 10-Q report should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2025 (the “Form 10-K”), which includes all disclosures required by GAAP, and with Exhibit 99.1 to the Company’s Current Report on Form 8-K dated May 28, 2026, which provides recast historical segment information. Certain amounts in previously issued financial statements were reclassified to conform to the current period presentation.

In the six months ended June 30, 2026, the Company derived approximately 68% of its revenue from products sold to the commercial and defense aerospace markets. The timing and level of future aircraft builds by original equipment manufacturers (“OEMs”) are subject to changes and uncertainties, including but not limited to geopolitical tensions or volatility in global energy and raw material markets, which may cause our future results to differ from prior periods due to changes in product mix in certain segments.

The timing, extent, application, and level of tariffs by various governments and our ability to recover tariffs are subject to changes and uncertainties in all segments. While the tariff situation remains fluid, we expect to pass along the costs associated with tariffs to our customers in the form of a cost pass through mechanism. There may be a delay between an increase in our costs and our ability to recover the higher costs that could impact our margins.

The preparation of the Consolidated Financial Statements of the Company in conformity with GAAP requires management to make certain judgments, estimates, and assumptions. These estimates are based on historical experience and, in some cases, assumptions based on current and future market expectations, including considerations relating to changes in the aerospace industry. The impact of these changes, including the macroeconomic considerations, remains highly uncertain. Management has made its best estimates using all relevant information available at the time, but it is possible that our estimates will differ from our actual results and affect the Consolidated Financial Statements in future periods and potentially require adverse adjustments to the recoverability of goodwill, intangible and long-lived assets, the realizability of deferred tax assets and other judgments and estimations and assumptions.

B. Recently Issued Accounting Guidance

Issued

In May 2026, the Financial Accounting Standards Board (“FASB”) issued guidance to improve the financial accounting for and disclosure of environmental credits and environmental credit obligations. These changes become effective for fiscal years beginning after December 15, 2027 for interim and annual reporting periods. Management is currently evaluating the impact of these changes on the Consolidated Financial Statements.

In September 2025, the FASB issued guidance to simplify the requirements for the capitalization of costs surrounding internally-developed software. These changes become effective for fiscal years beginning after December 15, 2027 for interim and annual reporting periods. Management is currently evaluating the impact of these changes on the Consolidated Financial Statements.

In November 2024, the FASB issued guidance to improve disclosures about an entity’s expenses including more detailed information about the components of expenses in commonly presented expense captions. These changes become effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Management is currently evaluating the impact of these changes on the Consolidated Financial Statements.

C. Acquisitions and Divestitures

Acquisitions

On April 6, 2026, Howmet completed its previously announced stock purchase of Consolidated Aerospace Manufacturing, LLC (“Consolidated Aerospace Manufacturing” or “CAM”), a wholly-owned subsidiary of Stanley Black & Decker, Inc. (“Stanley Black & Decker”), for a cash purchase price of approximately $1,812, net of cash and cash equivalents acquired of $1, subject to customary adjustments (the “CAM Acquisition”). CAM is a global aerospace manufacturer focused on highly-engineered, mission-critical parts used in aerospace markets, such as fasteners, fluid fittings and connectors, and other engineered products. This acquisition expands Howmet’s aerospace fastening systems portfolio and increases exposure to key aircraft and defense programs. Howmet financed the CAM Acquisition through utilizing a variety of financing sources, which include the notes issued in March 2026, borrowings under its commercial paper program (See Note O), and cash on hand. A portion of the goodwill relating to this transaction will be deductible for income tax purposes.

On February 6, 2026, the Company acquired all of the stock of Brunner Manufacturing Co. Inc. (“Brunner”), a privately-held manufacturer of high-quality fastener products in Wisconsin, for an all-cash purchase price of approximately $120, net of cash and cash equivalents acquired of $2.

The Company’s preliminary allocation of the purchase price for both the CAM and Brunner acquisitions, based upon the estimated fair value of assets acquired and liabilities assumed, is as follows:

The final allocations of purchase price will be based on management’s best estimates. Valuations of the assets acquired, other studies related to potential environmental and contingent liabilities, and other liabilities assumed may result in the identification of other intangible assets or liabilities. The valuations are expected to be completed by the end of 2026. The CAM and Brunner acquisitions have been included in the operations of the Fastening Systems segment, with revenue primarily included within Aerospace - Commercial, Aerospace - Defense, and Other in end-market revenue (See Note D). The aforementioned acquisitions’ combined third-party sales were approximately 2% of the Company’s consolidated sales and approximately 1% of consolidated net income from the respective acquisition dates through June 30, 2026.

Divestitures

On March 31, 2026, the Company completed the sale of its disk forging facility in Savannah, Georgia for $230 (of which approximately $225 was received in the first quarter of 2026, with the remainder expected in the fourth quarter of 2026). This resulted in a gain of $93 in the first quarter of 2026 that was recorded in Restructuring and other credits in the Statement of Consolidated Operations. This business had net assets of approximately $92, and the sale resulted in a reduction of goodwill in the Engineered Structures reporting unit of approximately $41. The sale remains subject to certain post-closing adjustments. This business was reclassified to assets and liabilities of operations held for sale, primarily included in Prepaid expenses and other current assets in the fourth quarter of 2025 and generated sales of approximately $130 for the year ended December 31, 2025 and had approximately 160 employees at the time of divestiture.

D. Segment Information

Howmet is a global leader in lightweight metals engineering and manufacturing. Howmet’s innovative, multi-material products, which include nickel, titanium, aluminum, and cobalt, are used worldwide in the aerospace (commercial and defense), commercial transportation, gas turbines, and other markets. Segment performance under Howmet’s management reporting system is evaluated based on Segment Adjusted EBITDA. The Company’s Chief Executive Officer, who has been determined to be our Chief Operating Decision Maker (“CODM”), believes that Segment Adjusted EBITDA provides information with respect to the Company’s operating performance and the Company’s ability to meet its financial obligations. Howmet’s definition of Segment Adjusted EBITDA is defined as Operating Income excluding Restructuring and other credits, Provision for depreciation and amortization, and Special items. Special items, including Restructuring and other credits, are excluded from Segment Adjusted EBITDA. The Company’s CODM considers forecast-to-actual variances for Segment Adjusted EBITDA when allocating resources across the Company’s reportable segments. Segment Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Differences between the total segment and consolidated totals are in Corporate.

In the first quarter of 2026, the Company’s CODM 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.

Howmet’s operations consist of four worldwide reportable segments as follows:

Engine Products

Engine Products produces investment castings, including airfoils, and seamless rolled rings primarily for aircraft engines and gas turbine applications. Engine Products produces rotating parts, as well as structural parts.

Fastening Systems

Fastening Systems produces aerospace fastening systems, as well as commercial transportation, industrial, and other fasteners. The business’s high-tech, multi-material fastening systems are found nose to tail on aircraft and aero engines. Fastening Systems’ products are also critical components of commercial transportation vehicles and construction, industrial, and renewable energy equipment.

Engineered Structures

Engineered Structures produces titanium ingots and mill products for aerospace and defense applications and is vertically integrated to produce titanium forgings, titanium extrusions, and machining services for airframe, wing, aero-engine, and landing gear components. Engineered Structures also produces aluminum forgings and aluminum machined components and assemblies for aerospace and defense applications.

Forged Wheels

Forged Wheels provides forged aluminum wheels and related products for heavy-duty trucks and the commercial transportation market.

The operating results of the Company’s reportable segments were as follows:

(1)Segment Adjusted cost of goods sold is exclusive of Provision for depreciation and amortization, Restructuring and other credits, and Corporate expenses.

(2) Other segment items includes Selling, general administrative, and other expenses, and Research and development expenses; exclusive of Provision for depreciation and amortization, and Restructuring and credits.

The following table reconciles Total Segment Adjusted EBITDA to Income before income taxes. Differences between the total segment and consolidated totals are in Corporate.

(1) Corporate expense includes selling, general administrative and other expenses, costs of corporate headquarters, acquisition and acquisition-related costs, costs associated with closures, supply chain disruptions, and other items.

The following table reconciles total segment capital expenditures with Capital expenditures as presented in the Statement of Consolidated Cash Flows.

The following table disaggregates segment revenue by major market served. Differences between the total segment and consolidated totals are in Corporate.

The Company derived 68% and 69% of its revenue from the aerospace (commercial and defense) markets for the six months ended June 30, 2026 and 2025, respectively.

GE Aerospace and RTX Corporation represented approximately 14% and 10%, respectively, of the Company’s third-party sales in the six months ended June 30, 2026. RTX Corporation and GE Aerospace represented approximately 11% and 10%, respectively, of the Company’s third-party sales in the six months ended June 30, 2025. These sales were primarily from the Engine Products segment.

E. Restructuring and Other Credits

In the second quarter of 2026, the Company recorded Restructuring and other charges of less than $1.

In the six months ended June 30, 2026, the Company recorded Restructuring and other credits of $93, which were primarily due to a gain on the sale of its disk forging facility in Savannah, Georgia within Engineered Structures of $93 in the first quarter of 2026.

In the second quarter of 2025, the Company recorded Restructuring and other charges of less than $1, which were primarily due to a charge for layoff costs of $3, including the separation of 119 employees (79 in Fastening Systems and 40 in Forged Wheels), partially offset by a gain on the sale of assets at a previously closed facility in Forged Wheels of $2 and a reversal of $1 for layoff reserves related to a prior period.

In the six months ended June 30, 2025, the Company recorded Restructuring and other credits of $4, which were primarily due to a gain on the sale of assets at a small U.K. manufacturing facility in Engineered Structures of $3, a gain on the sale of assets at a previously closed facility in Forged Wheels of $2, and a reversal of $2 for layoff reserves related to a prior period, partially offset by a charge for layoff costs of $3.

(1) In the six months ended June 30, 2026, other for other exit costs were primarily due to a gain on the sale of the disk forging facility in Savannah, Georgia within Engineered Structures of $93.

The remaining reserves as of June 30, 2026 are expected to be paid in cash in 2026 and 2027.

F. Retirement and Other Postretirement Benefits

The components of net periodic cost (benefit) were as follows:

(1) Service cost was included within Cost of goods sold; all other cost components were recorded in Other expense, net in the Statement of Consolidated Operations.

For the second quarter and six months ended June 30, 2026, Howmet’s combined pension contributions and other postretirement benefit payments were approximately $24 and $27, respectively. For the second quarter and six months ended June 30, 2025, Howmet’s combined pension contributions and other postretirement benefit payments were approximately $18 and $19, respectively.

G. Other Expense, Net

H. Income Taxes

The Company’s year-to-date tax provision is comprised of the most recent estimated annual effective tax rate applied to year-to-date, pre-tax ordinary income. The tax impacts of unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, are recorded discretely in the interim period in which they occur. In addition, the tax provision is adjusted for the interim period impact of non-benefited, pre-tax losses.

The estimated annual effective tax rate, before discrete items, applied to ordinary income was 20.9% in the second quarter and six months ended June 30, 2026, and 20.8% in the second quarter and six months ended June 30, 2025.

The 2026 rate was lower than the U.S. federal statutory rate of 21% primarily due to a U.S. deduction on Foreign-Derived Deduction Eligible Income (“FDDEI”) formerly known as Foreign-Derived Intangible Income (“FDII”), and a net benefit related to U.S. federal and state research and development (“R&D”) credits, partially offset by incremental state income tax, nondeductible expenses, and foreign earnings subject to tax in jurisdictions with tax rates higher than the U.S. federal statutory rate of 21%. The 2025 rate was lower than the U.S. federal statutory rate of 21% primarily due to a U.S. deduction on FDII, a net benefit related to U.S. federal and state R&D credits, and a U.S. tax benefit recognized for foreign tax credits, partially offset by incremental state income tax, additional U.S. tax on Global Intangible Low-Taxed Income (“GILTI”) and other foreign earnings, nondeductible expenses, and foreign earnings subject to tax in jurisdictions with tax rates higher than the U.S. federal statutory rate of 21%. The 2026 rate is consistent with the 2025 rate.

For the second quarter of 2026 and 2025, the tax rate including discrete items was 17.7% and 13.2%, respectively. In the second quarter of 2026, the Company recorded a discrete net tax benefit of $20 attributable to a benefit to release a valuation allowance related to U.S. foreign tax credits of $22, a benefit to release a valuation allowance related to U.S. state tax losses of $10, a benefit to release a tax reserve in Germany of $3, and an excess tax benefit for stock compensation of $1, reduced by a charge to establish an international withholding tax reserve of $16. In the second quarter of 2025, the Company recorded a discrete net tax benefit of $35 attributable to benefits related to U.S. tax accounting method changes for the deduction of certain prior period transaction and other costs of $17, an excess benefit for stock compensation of $13, and a net benefit related to U.S. federal and state R&D credits claimed for prior years of $5.

For both the six months ended June 30, 2026 and June 30, 2025, the tax rate including discrete items was 17.9%. In the six months ended June 30, 2026, the Company recorded a discrete net tax benefit of $41 attributable to a benefit to release a valuation allowance related to U.S. foreign tax credits of $22, an excess tax benefit for stock compensation of $22, a benefit to release a valuation allowance related to U.S. state tax losses of $10, and a benefit to release a tax reserve in Germany of $3, reduced by a charge to establish an international withholding tax reserve of $16. In the six months ended June 30, 2025, the Company recorded a discrete net tax benefit of $26 attributable to benefits related to U.S. tax accounting method changes for the deduction of certain prior period transaction and other costs of $17, an excess benefit for stock compensation of $14, and a net benefit related to U.S. federal and state R&D credits claimed for prior years of $5, reduced by a net charge related to the expiration of a tax holiday in China of $6, a charge for a tax reserve established in Germany of $2, and a net charge for other small items of $2.

The tax provision was comprised of the following:

I. Earnings Per Share and Common Stock

Basic earnings per share (“EPS”) amounts are computed by dividing earnings, after the deduction of preferred stock dividends declared, by the average number of common shares outstanding. Diluted EPS amounts assume the issuance of common stock for all potentially dilutive share equivalents outstanding.

The information used to compute basic and diluted EPS attributable to Howmet common shareholders was as follows (shares in millions in the table below):

There were no shares relating to outstanding stock options excluded from the calculation of average shares outstanding - diluted for the second quarter and six months ended June 30, 2026 and 2025.

Common stock outstanding as of June 30, 2026 and 2025 was 400 million and 404 million, respectively. Howmet redeemed all outstanding shares of its $3.75 Cumulative Class A Preferred Stock on December 17, 2025. There is no preferred stock outstanding as of June 30, 2026.

The Company has a Share Repurchase Program (the “Share Repurchase Program”) under which the Company may repurchase shares by means of trading plans established from time to time in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, block trades, private transactions, open market repurchases and/or accelerated share repurchase agreements, or other derivative transactions. There is no stated expiration for the Share Repurchase Program. Under the 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, and the Share Repurchase Program may be suspended, modified, or terminated at any time without prior notice.

The following table provides details for share repurchases made for the periods presented:

(1) All of the shares repurchased have been retired.

(2)Excludes commissions cost.

The Share Repurchase Program was authorized by the Company’s Board of Directors in August 2021 at $1,500, which was increased by $2,000 by the Board in July 2024 to a total authorization of $3,500. As of August 3, 2026, the Company has approximately $697 in Board authorization remaining available after giving effect to the additional $200 share repurchases made in July 2026 at an average price per share of $276.61, which retired approximately 0.7 million additional shares.

As average shares outstanding are used in the calculation for both basic and diluted EPS, the full impact of share repurchases and issuances is not fully realized in EPS in the period of repurchase or issuance since share activity may occur at varying points during a period.

For excise tax on net repurchases, the Company recorded $3 in the second quarter ended June 30, 2026 and $5 in the six months ended June 30, 2026 and $1 in the second quarter and $2 in the six months ended June 30, 2025 to additional capital.

J. Accumulated Other Comprehensive Loss

The following table details the activity of the three components that comprise Accumulated other comprehensive loss:

(1) These amounts were recorded in Other expense, net (See Note G) in the Statement of Consolidated Operations.

(2) These amounts were included in Provision for income taxes (See Note H) in the Statement of Consolidated Operations.

(3)A positive amount indicates a corresponding charge to earnings and a negative amount indicates a corresponding benefit to earnings.

(4)In all periods presented, no amounts were reclassified to earnings.

(5) Includes the change in the cross-currency swaps related to the 6.750% Bonds due 2028 and the 4.850% Notes due 2031 (See Note O). In all periods presented, no amounts related to the changes were reclassified to earnings. The cross-currency swaps were recorded in Other noncurrent assets and Other noncurrent liabilities and deferred credits respectively, in the Consolidated Balance Sheet.

(6) These amounts were recorded in Cost of goods sold in the Statement of Consolidated Operations.

K. Receivables

Sale of Receivables Programs

The Company maintains an accounts receivables securitization arrangement through a wholly-owned special purpose entity (“SPE”). The net cash funding from the sale of accounts receivable was neither a use of cash nor a source of cash for the second quarter or six months ended June 30, 2026 or June 30, 2025.

The accounts receivables securitization arrangement is one in which the Company, through an SPE, has a receivables purchase agreement (the “Receivables Purchase Agreement”) pursuant to which the SPE may sell certain receivables to financial institutions. On October 9, 2025, the Company extended the Receivables Purchase Agreement to the earlier of October 8, 2027 or a termination event. The Receivables Purchase Agreement contains customary representations and warranties, as well as affirmative and negative covenants. Pursuant to the Receivables Purchase Agreement, the Company does not maintain effective control over the transferred receivables, and therefore accounts for these transfers as sales of receivables. The Receivables Purchase Agreement also contains a provision that allows the Company to increase the facility limit to $325.

The facility limit under the Receivables Purchase Agreement was $250 as of both June 30, 2026 and December 31, 2025, of which $250 was drawn as of both June 30, 2026 and December 31, 2025. As collateral against the sold receivables, the SPE maintains a certain level of unsold receivables, which were $296 and $217 as of June 30, 2026 and December 31, 2025, respectively.

The Company sold $294 and $651 during the second quarter and six months ended June 30, 2026, respectively, and $359 and $829 during the second quarter and six months ended June 30, 2025, respectively, of its receivables without recourse and received cash funding under this program, resulting in derecognition of the receivables from the Company’s Consolidated Balance Sheet. Costs associated with the sales of receivables are reflected in the Company’s Statement of Consolidated Operations in Other expense, net for the periods in which the sales occur. Cash receipts from sold receivables under the Receivables Purchase Agreement are presented in changes in receivables within operating activities in the Statement of Consolidated Cash Flows.

Other Customer Receivable Sales

In the second quarter and six months ended June 30, 2026, the Company sold certain customers’ receivables without recourse of $348 and $671, respectively, in exchange for cash. In the second quarter and six months ended June 30, 2025, the Company sold certain customers’ receivables without recourse of $223 and $406, respectively, in exchange for cash. The Company has no continuing involvement in the aforementioned amounts sold or outstanding, resulting in the derecognition of the receivables from the Company’s Consolidated Balance Sheet. The net proceeds are presented in changes in receivables within operating activities in the Statement of Consolidated Cash Flows and the costs associated with the sales of receivables are reflected in the Company’s Statement of Consolidated Operations in Other expense, net for the periods in which the sales occur.

L. Inventories

As of June 30, 2026 and December 31, 2025, the portion of inventories valued on a last-in, first-out (“LIFO”) basis was $707 and $642, respectively. If valued on an average-cost basis, total inventories would have been $376 and $333 higher as of June 30, 2026 and December 31, 2025, respectively.

M. Properties, Plants, and Equipment, net

The Company had unpaid capital expenditures of $55, $101, and $85 as of June 30, 2026, December 31, 2025, and June 30, 2025, respectively, which results in cash outflows within investing activities in the Statement of Consolidated Cash Flows in subsequent periods.

N. Leases

Operating lease cost, which includes short-term leases and variable lease payments and approximates cash paid, was $20 and $18 in the second quarter of 2026 and 2025, respectively, and $39 and $35 in the six months ended June 30, 2026 and June 30, 2025.

Operating lease right-of-use assets and lease liabilities in the Consolidated Balance Sheet were as follows:

O. Debt

(1) On May 22, 2026, the Company completed the early prepayment of the remaining amount outstanding under the JPY Term Loan Facility. The Company had entered into an interest rate swap to exchange the floating interest rate of the JPY Term Loan Facility to a fixed interest rate of 1.794% as of December 31, 2025, based on the Company’s long-term debt ratings. This swap was settled upon the prepayment of the JPY Term Loan Facility with an impact to the Consolidated Financial Statements of less than $1.

(2) The Company entered into a cross-currency swap to synthetically convert the 6.750% Bonds due 2028 (the “2028 Bonds”) into a Japanese Yen liability of approximately ¥47,760 million with a fixed annual interest rate of 3.880%.

(3) The Company entered into a cross-currency swap to synthetically convert the 4.850% Notes due 2031 (the “2031 Notes”) into a Euro liability of approximately €458 million with a fixed annual interest rate of 3.720%.

(4) Includes unamortized debt discounts and unamortized debt issuance costs related to outstanding notes and bonds listed in the table above and various financing arrangements related to subsidiaries.

Debt

Term Loan Facility. The Company maintained a Japanese yen-denominated, senior unsecured term loan facility (the “JPY Term Loan Facility”). As of June 30, 2026 and December 31, 2025, the Company was in compliance with all applicable covenants under the JPY Term Loan Facility.

On May 22, 2026, the Company completed the early prepayment of the remaining outstanding principal amount under its JPY Term Loan Facility of ¥29,702 million (approximately $186) with cash on hand.

There were no amounts outstanding under the JPY Term Loan Facility as of June 30, 2026 and ¥29,702 million ($191) outstanding as of December 31, 2025.

Public Debt. On March 3, 2026 the Company completed the offerings of aggregate principal amounts of $400 of 3.750% Notes due 2028 (the “2028 Notes”), $300 of 3.900% Notes due 2029 (the “2029 Notes”) and $500 of 4.750% Notes due 2036 (the “2036 Notes”). The Company utilized the net proceeds of $1,193 from these debt issuances as part of the financing for the CAM Acquisition (see Note C).

On May 22, 2026, the Company entered into a cross-currency swap to synthetically convert the outstanding $300 aggregate principal amount of its 2028 Bonds into a Japanese Yen liability of approximately ¥47,760 million. The fixed interest rate on the Japanese Yen liability is 3.880% per annum. Amounts payable to holders of these bonds remain unchanged.

Short-term Borrowings

Commercial Paper. The Company maintains a $1,000 commercial paper program, under which $450 was outstanding with a weighted average interest rate of 4.018% as of June 30, 2026, and no amounts were outstanding as of December 31, 2025. The Company had no commercial paper borrowings with original maturities greater than 90 days in 2026 or 2025. Amounts outstanding under the commercial paper program are supported by the unused commitments under the Company’s $600 364-Day Revolving Credit Facility and $1,000 5-Year Revolving Credit Facility.

Credit Agreements

Credit Facilities. On February 9, 2026, the Company entered into the Third Amended and Restated Five-Year Revolving Credit Agreement (as so amended and restated, the “5-Year Revolving Credit Agreement”) and the 364-Day Revolving Credit Agreement (the “364-Day Revolving Credit Agreement”). The 364-Day Revolving Credit Agreement and the 5-Year Revolving Credit Agreement are jointly referred to as the “Revolving Credit Agreements.”

The 5-Year Revolving Credit Agreement provides a $1,000 senior unsecured revolving credit facility (the “5-Year Revolving Credit Facility”) that matures on February 7, 2031, unless extended or earlier terminated in accordance with the provisions of the 5-Year Revolving Credit Agreement. The Company may make two one-year extension requests during the term of the 5-Year Revolving Credit Facility, with any extension being subject to the lender consent requirements set forth in the 5-Year Revolving Credit Agreement. Subject to the terms and conditions of the 5-Year Revolving Credit Agreement, the Company may from time to time request increases in commitments under the 5-Year Revolving Credit Facility, not to exceed $500 in aggregate principal amount, and may also request the issuance of letters of credit, subject to a letter of credit sublimit of $500 of the 5-Year Revolving Credit Facility. Under the provisions of the 5-Year Revolving Credit Agreement, based on Howmet’s current long-term debt ratings, Howmet pays an annual fee of 0.090% of the total commitment to maintain the 5-Year Revolving Credit Facility.

The 364-Day Revolving Credit Agreement provides a $600 senior unsecured revolving credit facility (the “364-Day Revolving Credit Facility” and, together with the 5-Year Revolving Credit Facility, the “Revolving Credit Facilities”) that matures on February 8, 2027, unless extended or earlier terminated in accordance with the provisions of the 364-Day Revolving Credit Agreement. Under the provisions of the 364-Day Revolving Credit Agreement, based on Howmet’s current long-term debt ratings, Howmet pays an annual fee of 0.070% of the total commitment to maintain the 364-Day Revolving Credit Facility.

The Revolving Credit Facilities are unsecured and amounts payable under them will rank pari passu with all other unsecured, unsubordinated indebtedness of the Company. U.S. dollar denominated loans under the Revolving Credit Facilities will bear interest at a base rate, or a rate equal to the Term Secured Overnight Financing Rate (“SOFR”) plus adjustment and Euro-denominated loans will bear interest at the Euro inter-bank offered rate (“EURIBOR”), plus in each case, an applicable margin based on the credit ratings of the Company’s outstanding senior unsecured long-term debt. Based on the Company’s current long-term debt ratings, which are subject to change, there would be no applicable margin on base rate loans for either of the Revolving Credit Facilities. The applicable margin on Term SOFR and EURIBOR loans would be 0.910% per annum for the 5-Year Revolving Credit Facility and 0.930% per annum for the 364-Day Revolving Credit Facility. Loans under the Revolving Credit Facilities may be prepaid without premium or penalty, subject to customary breakage costs.

The obligation of the Company to pay amounts outstanding under the Revolving Credit Facilities may be accelerated upon the occurrence of an “Event of Default” as defined in the applicable Revolving Credit Agreement. Such Events of Default include, among others, (a) non-payment of obligations; (b) breach of any representation or warranty in any material respect; (c) non-performance of covenants and obligations; (d) with respect to other indebtedness in a principal amount in excess of $100, a default thereunder that causes such indebtedness to become due prior to its stated maturity or a default in the payment at maturity of any principal of such indebtedness; (e) the bankruptcy or insolvency of Howmet; and (f) a change in control of the Company.

The Revolving Credit Agreements contain covenants, including, among others, (a) limitations on the Company’s ability to incur liens securing indebtedness for borrowed money; (b) limitations on the Company’s ability to consummate a consolidation, merger or sale of all or substantially all of its assets; (c) limitations on the Company’s ability to change the nature of its business; and (d) a limitation requiring the ratio of Consolidated Net Debt to Consolidated EBITDA (each as defined in the Revolving Credit Agreements, as applicable) as of the end of each fiscal quarter for the period of the four fiscal quarters most recently ended, to be less than or equal to 3.75 to 1.00, which may be increased to 4.25 to 1.00, at Howmet’s option, upon the occurrence of a material acquisition for the four consecutive fiscal quarters following the consummation thereof.

As of June 30, 2026 and December 31, 2025, the Company was in compliance with all covenants under the Revolving Credit Agreements.

There were no amounts outstanding as of June 30, 2026 or December 31, 2025, and no amounts were borrowed during 2026 or 2025 under the Revolving Credit Facilities.

P. Fair Value of Financial Instruments

The carrying values of Cash and cash equivalents, restricted cash, derivatives, noncurrent receivables, Long-term debt due within one year, and short-term borrowings included in the Consolidated Balance Sheet approximate their fair value. The aforementioned derivatives were included in Prepaid expenses and other current assets, Other noncurrent assets, Other current liabilities, and Other noncurrent liabilities and deferred credits in the Consolidated Balance Sheet, as applicable. The Company holds available-for-sale, exchange-traded fixed income securities, which were included in Other noncurrent assets in the Consolidated Balance Sheet.

The Company holds a held-to-maturity, real estate debt investment purchased from the U.K. pension plan’s trust in 2025, of which $2 was redeemed during the first quarter of 2026. These activities are presented as Investing Activities in the Statement of Consolidated Cash Flows, and the remaining investment is included in Prepaid expenses and other current assets and Other noncurrent assets, in the Consolidated Balance Sheet.

The fair value of Long-term debt, less long-term debt due within one year, was based on quoted market prices for public debt with similar terms, interest rates and maturities available to Howmet.

Restricted cash, which is included in Prepaid expenses and other current assets in the Consolidated Balance Sheet, was $1 as of both June 30, 2026 and December 31, 2025.

Q. Contingencies, Commitments, and Other Liabilities

Contingencies

The following information supplements and, as applicable, updates the discussion of the contingencies and commitments in Note U to the Consolidated Financial Statements in our Form 10-K, and should be read in conjunction with the complete descriptions provided in the Form 10-K.

Environmental Matters. Howmet participates in environmental assessments and/or cleanups at more than 30 locations. These include owned or operating facilities and adjoining properties, previously owned or operated facilities and adjoining properties, and waste sites, including Superfund (Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”)) sites.

A liability is recorded for environmental remediation when a cleanup program becomes probable and the costs can be reasonably estimated. As assessments and cleanups proceed, the liability is adjusted based on progress made in determining the extent of remedial actions and related costs. The liability can change substantially due to factors such as the nature and extent of contamination, changes in remedial requirements, and technological changes, among others.

The Company’s remediation reserve balance was $16 as of both June 30, 2026 and December 31, 2025 and was recorded in Other noncurrent liabilities and deferred credits in the Consolidated Balance Sheet (of which $7 as of both June 30, 2026 and December 31, 2025 was classified as a current liability), and reflects the most probable costs to remediate identified environmental conditions for which costs can be reasonably estimated. Payments related to remediation expenses applied against the reserve were $1 in both the second quarter and six months ended June 30, 2026, and included expenditures currently mandated, as well as those not required by any regulatory authority or third party.

Included in annual operating expenses are the recurring costs of managing hazardous substances and environmental programs. These costs are estimated to be less than 1% of Cost of goods sold.

Tax. In December 2013 and 2014, the Company received audit assessment notices from the French Tax Authority (“FTA”) for the 2010 through 2012 tax years. In 2016, the Company appealed to the Committee of the Abuse of Tax Law, where it received a favorable nonbinding decision. The FTA disagreed with the Committee of the Abuse of Tax Law’s opinion, and the Company appealed to the Montreuil Administrative Court, where in 2020 the Company prevailed on the merits. The FTA appealed this decision to the Paris Administrative Court of Appeal in 2021. On March 31, 2023, the Company received an adverse decision from the Paris Administrative Court of Appeal. The Company appealed this decision to the French Administrative Supreme Court. The assessment amount was $17 (€16 million), including $10 (€9 million) of tax and interest up through 2017 and $7 (€7 million) of penalties. The Company estimated additional interest to be $2 (€2 million). On July 23, 2024, the Company received the French Administrative Supreme Court’s decision. That decision upheld the assessment of $10 (€9 million) of tax and interest, while cancelling the penalties of $7 (€7 million) and remanding the penalty assessment issue to the Paris Administrative Court of Appeal for reexamination. On April 16, 2026, the Paris Administrative Court of Appeal reduced the penalties assessed to $4 (€3 million).

In 2023, the Company recorded an income tax reserve in Provision for income taxes in the Statement of Consolidated Operations of $21 (€19 million), which includes tax, estimated interest and penalties, for the 2010 through 2012 tax years, as well as the remaining tax years open for reassessment (2020-2023). In accordance with FTA dispute resolution practices, the Company paid the assessment amount including tax, interest, and penalties, to the FTA in December 2023. The Company expects to pay the additional interest related to the assessment in 2026. The Company also paid the estimated tax related to the 2020-2023 tax years in 2023. As of the third quarter of 2024, the Company no longer recorded an uncertain tax position related to the tax and interest assessed. In October 2024, the Company received a refund of the penalties that were remanded. Based on the April 2026 decision, the Company expects to pay the reduced penalties in 2026.

Legal Proceedings.

Indemnified Matters. The Separation and Distribution Agreement, dated October 31, 2016, that the Company entered into with Alcoa Corporation in connection with its separation from Alcoa Corporation, and the Separation and Distribution Agreement, dated March 31, 2020, that the Company entered into with Arconic Corporation in connection with its separation from Arconic Corporation, provide for cross-indemnities for claims subject to indemnification between the Company and Alcoa Corporation and between the Company and Arconic Corporation, respectively. To date, Alcoa Corporation and Arconic Corporation have fulfilled their respective indemnification obligations to the Company, and claims subject to indemnification by Alcoa Corporation or Arconic Corporation have not impacted the Company financially. Among other claims that are covered by these indemnities, Arconic Corporation indemnifies the Company (previously named Arconic Inc. and, prior to that, Alcoa Inc.) for all potential liabilities associated with the fire that occurred at the Grenfell Tower in London, U.K. on June 14, 2017, including the following legal proceedings, as updated from the Form 10-K:

United Kingdom Litigation. All personal injury claims on behalf of survivors and estates of decedents have been settled pursuant to terms of confidential settlement agreements and are discontinued and closed. On June 21, 2024, the Company was joined as a party to proceedings initiated by the Royal Borough of Kensington and Chelsea (RBKC) and Kensington and Chelsea Tenant Management Organisation (KCTMO) against AAP SAS and Whirlpool. On February 14, 2025, RBKC and KCTMO served their Particulars of Claim and Schedule of Loss on the defendants, which they updated on February 27, 2026. On July 18, 2025, the Company and AAP SAS filed their defense and counterclaim against RBKC and KCTMO, and contribution claims against various co-defendants and other third parties, as updated on March 13, 2026. The next case management conference is scheduled for December 13, 2027. Trial is anticipated to occur between October 2028 and July 2029.

Raul v. Albaugh, et al. (United States District Court for the District of Delaware). On June 22, 2018, a derivative complaint was filed nominally on behalf of Arconic Inc. by a purported Arconic Inc. stockholder against the then directors and certain officers of Arconic Inc., naming Arconic Inc. as a nominal defendant. The complaint alleged violations of federal securities laws relating to the Grenfell Fire, as well as claims under Delaware state law. On February 10, 2026, the court held a final settlement approval hearing, and the parties’ Stipulation of Settlement was approved. The Stipulation of Settlement had no material impact on the Company’s results of operations or cash flows.

With respect to the regulatory investigations in the U.K. described in the Form 10-K, there are no updates.

Other. In addition to the matters discussed above, various other lawsuits, claims, and proceedings have been or may be instituted or asserted against the Company, including those pertaining to environmental, product liability, safety and health, employment, tax and antitrust matters. While the amounts claimed in these other matters may be substantial, the ultimate liability cannot currently be determined because of the considerable uncertainties that exist. Therefore, it is possible that the Company’s liquidity or results of operations in a period could be materially affected by one or more of these other matters. However, based on facts currently available, management believes that the disposition of these other matters that are pending or asserted will not have a material adverse effect, individually or in the aggregate, on the results of operations, financial position or cash flows of the Company.

Commitments

Letters of Credit. The Company has outstanding letters of credit primarily related to workers’ compensation, environmental obligations, tax matters, and insurance obligations. The total amount committed under these letters of credit, which automatically renew or expire at various dates, primarily in 2026 and 2027, was $76 as of June 30, 2026.

Pursuant to the Separation and Distribution Agreements between the Company and Arconic Corporation and between the Company and Alcoa Corporation, the Company is required to retain letters of credit of $43, which are included in the $76 in the above paragraph, that had previously been provided related to the Company, Arconic Corporation, and Alcoa Corporation workers’ compensation claims that occurred prior to the respective separation transactions of April 1, 2020 and November 1, 2016. Arconic Corporation and Alcoa Corporation workers’ compensation and letters of credit fees paid by the Company are proportionally billed to, and are reimbursed by, Arconic Corporation and Alcoa Corporation, respectively. Also, the Company was required to provide letters of credit for certain Arconic Corporation environmental obligations and, as a result, the Company has $8 of outstanding letters of credit relating to such liabilities, which are also included in the $76 in the above paragraph. Arconic Corporation is being billed for these letter of credit fees paid by the Company and will reimburse the Company for any payments made under these letters of credit.

Surety Bonds. The Company has outstanding surety bonds primarily related to customs duties, workers’ compensation, pension, environmental-related matters, and contract performance. The total amount committed under these annual surety bonds, which automatically renew or expire at various dates, primarily in 2026 and 2027, was $43 as of June 30, 2026.

Pursuant to the Separation and Distribution Agreements between the Company and Arconic Corporation and between the Company and Alcoa Corporation, the Company is required to provide surety bonds of $19, which are included in the $43 in the above paragraph, that had previously been provided related to the Company, Arconic Corporation, and Alcoa Corporation workers’ compensation claims that occurred prior to the respective separation transactions of April 1, 2020 and November 1, 2016. Arconic Corporation and Alcoa Corporation workers’ compensation claims and surety bond fees paid by the Company are proportionately billed to, and are reimbursed by, Arconic Corporation and Alcoa Corporation, respectively.

Guarantees. Pursuant to the Separation and Distribution Agreement between the Company and Alcoa Corporation, Howmet was required to provide certain guarantees for Alcoa Corporation, which were included in Other noncurrent liabilities and deferred credits in the Consolidated Balance Sheet. The remaining guarantee which had a fair value of $5 as of both June 30, 2026 and December 31, 2025, relates to a long-term energy supply agreement that expires in 2047 at an Alcoa Corporation facility, for which the Company is secondarily liable in the event of a payment default by Alcoa Corporation. If the Company incurs any liability under this guarantee, Arconic Corporation is obligated to indemnify the Company for 50% of such liability. The Company currently views the risk of an Alcoa Corporation payment default on its obligations under the contract to be remote. The Company is required to provide a guarantee up to an estimated present value amount of approximately $1,141 as of both June 30, 2026 and December 31, 2025 in the event of an Alcoa Corporation default. In the fourth quarter of 2025, a surety bond with a limit of $80 relating to this guarantee was obtained by Alcoa Corporation to protect Howmet’s obligation. This surety bond will be renewed on an annual basis by Alcoa Corporation.

As of June 30, 2026, Howmet had other outstanding bank guarantees related to customs duties, rental, plant expansion, and environmental obligations. The total amount committed under these guarantees, which expire at various dates between 2026 and 2028, was $4 as of June 30, 2026.

Other Liabilities

Supplier Financing Arrangements. We offer voluntary supplier finance programs to suppliers who may elect to sell their receivables to third parties at the sole discretion of both the suppliers and the third parties. The program is at no cost to the Company and provides additional liquidity to our suppliers, if they desire, at their cost. Under these programs, the Company pays the third-party bank, rather than the supplier, the stated amount of the confirmed invoices on the original maturity date of the invoices. The Company or the third-party bank may terminate a program upon at least 30 days’ notice. Supplier invoices under the program require payment in full no more than approximately 120 days of the invoice date. As of June 30, 2026 and December 31, 2025, supplier invoices that are subject to future payment under these programs were $377 and $266, respectively, and are included in Accounts payable, trade in the Consolidated Balance Sheet.

R. Subsequent Events

Management evaluated all activity of Howmet and concluded that no subsequent events have occurred that would require recognition in the Consolidated Financial Statements or disclosure in the Notes to the Consolidated Financial Statements, except as noted below:

See Note I regarding share repurchases made in July 2026.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

(U.S. dollars in millions, except per share amounts)

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand our results of operations and financial condition. The MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and notes thereto included in Part I, Item 1 (Financial Statements and Supplementary Data) of this Form 10-Q.

Overview

Howmet is a global leader in lightweight metals engineering and manufacturing. Howmet’s innovative, multi-material products, which include nickel, titanium, aluminum, and cobalt, are used worldwide in the aerospace (commercial and defense), commercial transportation, gas turbines, and other markets.

In the six months ended June 30, 2026, the Company derived approximately 68% of its revenue from products sold to the commercial and defense aerospace markets. The timing and level of future aircraft builds by original equipment manufacturers (“OEMs”) are subject to changes and uncertainties, including but not limited to geopolitical tensions or volatility in global energy and raw material markets, which may cause our future results to differ from prior periods due to changes in product mix in certain segments.

For additional information regarding the ongoing risks related to our business, see section Part I, Item 1A, “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Results of Operations

Earnings Summary:

Sales. Sales were $2,547 in the second quarter of 2026 compared to $2,053 in the second quarter of 2025, and $4,860 in the six months ended June 30, 2026 compared to $3,995 in the six months ended June 30, 2025. The increase of $494, or 24%, in the second quarter of 2026 and the increase of $865, or 22% in the six months ended June 30, 2026, was primarily due to growth in the commercial and defense aerospace and gas turbines markets, including engine spares, favorable product pricing, cost pass through, and sales from the Consolidated Aerospace Manufacturing, LLC (“CAM”) and Brunner Manufacturing Co. Inc. (“Brunner”) acquisitions from the dates they were acquired by the Company, partially offset by lower volumes in the commercial transportation market and the disk forging facility divestiture on March 31, 2026. Product price increases are in excess of material and inflationary cost pass through to our customers.

Cost of goods sold (“COGS”). COGS as a percentage of Sales was 62.7% in the second quarter of 2026 compared to 66.5% in the second quarter of 2025 and 62.9% in the six months ended June 30, 2026 compared to 66.5% in the six months ended June 30, 2025. The decrease in the second quarter and six months ended June 30, 2026 was primarily due to growth in the commercial and defense aerospace and gas turbines markets, favorable product pricing, partially offset by lower volumes in the commercial transportation market, higher cost pass through, and increased net headcount, primarily in the Engine Products segment, in support of expected revenue increases. Additionally, the decrease includes the impact of the acquisitions and divestiture completed this year, including amortization expense of inventory step-up recorded in accordance with the allocation of purchase price under accounting principles generally accepted in the United States of America (“GAAP”).

Selling, general administrative, and other expenses (“SG&A”). SG&A expenses were $148 in the second quarter of 2026 compared to $89 in the second quarter of 2025 and $259 in the six months ended June 30, 2026 compared to $174 in the six months ended June 30, 2025. The increase of $59, or 66%, in the second quarter of 2026 and the increase of $85, or 49%, in the six months ended June 30, 2026 was primarily due to higher employment costs, including incremental headcount from the acquisitions, acquisition and acquisition-related costs, and various other administrative expenses.

Provision for depreciation and amortization (“D&A”). The provision for D&A was $84 in the second quarter of 2026 compared to $69 in the second quarter of 2025 and $158 in the six months ended June 30, 2026 compared to $138 in the six months ended June 30, 2025. The increase of $15, or 22%, in the second quarter of 2026 and the increase of $20, or 14%, in the six months ended June 30, 2026 was primarily due to higher depreciation from additional capital investments in capacity expansions within the Engine Products segment, the CAM and Brunner acquisitions from the dates they were acquired by the Company, and amortization expense of inventory step-up recorded in accordance with the allocation of purchase price under GAAP.

Restructuring and other credits. Restructuring and other charges were less than $1 in the second quarter of 2026 compared to Restructuring and other charges of less than $1 in the second quarter of 2025. Restructuring and other credits were $93 in the six months ended June 30, 2026 compared to Restructuring and other credits of $4 in the six months ended June 30, 2025. Restructuring and other credits for the six months ended June 30, 2026 were primarily due to a gain on the sale of the Company’s disk forging facility in Savannah, Georgia within Engineered Structures of $93. Restructuring and other charges for the second quarter of 2025 were primarily due to a charge for layoff costs of $3, partially offset by a gain on the sale of assets at a previously closed facility in Forged Wheels of $2 and a reversal of $1 for a layoff reserve related to a prior period. Restructuring and other credits for the six months ended June 30, 2025 were primarily due to a gain on the sale of assets at a small U.K. manufacturing facility in Engineered Structures of $3, a gain on the sale of assets at a previously closed facility in Forged Wheels of $2, and a reversal of $2 for a layoff reserve related to a prior period, partially offset by a charge for layoff costs of $3.

See Note E to the Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q for additional detail.

Interest expense, net. Interest expense, net was $51 in the second quarter of 2026 compared to $38 in the second quarter of 2025 and $94 in the six months ended June 30, 2026 compared to $77 in the six months ended June 30, 2025. The increase of $13, or 34%, in the second quarter of 2026 and $17, or 22%, in the six months ended June 30, 2026 was primarily due to the March 2026 issuance of $1,200 aggregate principal amount of notes that have interest rates ranging from 3.750% to 4.750% and the November 2025 issuance of $500 of 4.550% Notes due 2032, partially offset by the early prepayment of the JPY Term Loan Facility, the cross-currency swap that synthetically converted the 6.750% Bonds due 2028 into a lower fixed-interest-rate Japanese Yen liability, the early redemption of $625 of 5.900% Notes in December 2025, and prepayments of the USD Term Loan Facility during various periods in 2025. On an annual basis, the current year debt actions are expected to increase Interest expense, net by approximately $38.

See Note O to the Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q for additional detail related to the Company’s debt.

Other expense, net. Other expense, net was $11 in the second quarter of 2026 compared to $14 in the second quarter of 2025 and $13 in the six months ended June 30, 2026 compared to $23 in the six months ended June 30, 2025. The decrease in expense of $3 in the second quarter of 2026 and $10 in the six months ended June 30, 2026 was primarily due to an increase in interest income resulting from additional cash on hand prior to the acquisition of CAM. Non-service related net periodic benefit costs related to defined benefit plans and other postretirement benefit plans are expected to increase by approximately $5 for the full year 2026 versus 2025.

See Note G to the Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q for additional detail.

Provision for income taxes. The estimated annual effective tax rate, before discrete items, applied to ordinary income was 20.9% in the second quarter ended June 30, 2026 compared to 20.8% in the second quarter ended June 30, 2025. The tax rate including discrete items was 17.7% in the second quarter of 2026 compared to 13.2% in the second quarter of 2025. A discrete net tax benefit of $20 was recorded in the second quarter of 2026 compared to a discrete net tax benefit of $35 in the second quarter of 2025. The tax rate including discrete items was 17.9% in the six months ended June 30, 2026 and June 30, 2025. A discrete net tax benefit of $41 was recorded in the six months ended June 30, 2026 compared to a discrete net tax benefit of $26 recorded in the six months ended June 30, 2025. The 2026 estimated annual effective tax rate remains consistent with the 2025 rate.

See Note H to the Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q for additional detail.

Net income. Net income was $534, or $1.33 per diluted share, in the second quarter of 2026 compared to $407, or $1.00 per diluted share, in the second quarter of 2025 and $1,114, or $2.77 per diluted share, in the six months ended June 30, 2026 compared to $751, or $1.84 per diluted share, in the six months ended June 30, 2025. The increase of $127 in the second quarter of 2026 and $363 in the six months ended June 30, 2026 was primarily due to growth in the commercial and defense aerospace and gas turbines markets, including engine spares, as well as favorable product pricing and the CAM and Brunner acquisitions, partially offset by lower volumes in the commercial transportation market.

Segment Information

The Company’s operations consist of four worldwide reportable segments: Engine Products, Fastening Systems, Engineered Structures, and Forged Wheels. Segment performance under Howmet’s management reporting system is evaluated based on Segment Adjusted EBITDA. The Company’s Chief Executive Officer, who has been determined to be our Chief Operating Decision Maker (“CODM”), believes that Segment Adjusted EBITDA provides information with respect to the Company’s operating performance and the Company’s ability to meet its financial obligations. Howmet’s definition of Segment Adjusted EBITDA is defined as Operating Income excluding Restructuring and other credits, Provision for depreciation and amortization, and Special items. Special items, including Restructuring and other credits, are excluded from Segment Adjusted EBITDA. The Company’s CODM considers forecast-to-actual variances for Segment Adjusted EBITDA when allocating resources across the Company’s reportable segments. Segment Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Differences between the total segment and consolidated totals are in Corporate. (See Note D to the Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q for a description of each segment).

The Company has aligned its operations consistent with how the Chief Executive Officer assesses operating performance and allocates capital.

In the first quarter of 2026, the Company’s CODM 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. The recast historical segment information is available in Exhibit 99.1 to the Company’s Current Report on Form 8-K dated May 28, 2026.

Engine Products

Third-party sales for the Engine Products segment increased $335, or 32%, in the second quarter of 2026 compared to the second quarter of 2025, primarily due to growth in the commercial and defense aerospace and gas turbines markets, including engine spares growth.

Third-party sales for the Engine Products segment increased $614, or 31%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to growth in the commercial and defense aerospace and gas turbines markets, including engine spares growth.

Segment Adjusted EBITDA for the Engine Products segment increased $174, or 51%, in the second quarter of 2026 compared to the second quarter of 2025, primarily due to growth in the commercial and defense aerospace and gas turbines markets. The segment absorbed approximately 485 net headcount in the second quarter of 2026 in support of expected revenue increases.

Segment Adjusted EBITDA for the Engine Products segment increased $314, or 48%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to growth in the commercial and defense aerospace and gas turbines markets. The segment absorbed approximately 720 net headcount in the six months ended June 30, 2026, in support of expected revenue increases.

Segment Adjusted EBITDA Margin for the Engine Products segment increased approximately 470 basis points in the second quarter of 2026 compared to the second quarter of 2025, primarily due to growth in the commercial and defense aerospace and gas turbines markets.

Segment Adjusted EBITDA Margin for the Engine Products segment increased approximately 420 basis points in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to growth in the commercial and defense aerospace and gas turbines markets.

In 2026, as compared to 2025, demand in the commercial and defense aerospace and gas turbines markets is expected to increase, including engine spares growth in these markets. Capital expenditures are expected to remain elevated, with additional investments in capacity expansions to support aerospace and gas turbines market growth. Governmental policies, laws and regulations, and other geopolitical and 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 our ability to recover tariffs are subject to changes and uncertainties.

Fastening Systems

Third-party sales for the Fastening Systems segment increased $158, or 37%, in the second quarter of 2026 compared to the second quarter of 2025, primarily due to the CAM and Brunner acquisitions as well as growth in the commercial aerospace and defense aerospace markets.

Third-party sales for the Fastening Systems segment increased $217, or 26%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to the CAM and Brunner acquisitions as well as growth in the commercial aerospace and defense aerospace markets.

Segment Adjusted EBITDA for the Fastening Systems segment increased $51, or 40%, in the second quarter of 2026 compared to the second quarter of 2025, primarily due to growth in the commercial aerospace and defense aerospace markets as well as the CAM and Brunner acquisitions.

Segment Adjusted EBITDA for the Fastening Systems segment increased $74, or 29%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to growth in the commercial aerospace and defense aerospace markets as well as the CAM and Brunner acquisitions.

Segment Adjusted EBITDA Margin for the Fastening Systems segment increased approximately 90 basis points in the second quarter of 2026 compared to the second quarter of 2025, primarily due to growth in the commercial aerospace market, partially offset by the impacts of the CAM and Brunner acquisitions.

Segment Adjusted EBITDA Margin for the Fastening Systems segment increased approximately 80 basis points in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to growth in the commercial aerospace and defense aerospace markets, partially offset by the impacts of the CAM and Brunner acquisitions.

In 2026, as compared to 2025, demand in the commercial aerospace and defense aerospace markets is expected to increase, and results will also include the impacts of the CAM and Brunner acquisitions. Modest recovery in the commercial transportation market began in the second quarter of 2026 and is expected to continue into the second half of 2026, amid energy-related, economic, and regulatory uncertainty in North America. Governmental policies, laws and regulations, and other geopolitical and 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 our ability to recover tariffs are subject to changes and uncertainties.

The Brunner acquisition has been included in the operations of the Fastening Systems segment starting in February 2026. The CAM acquisition has been included in our Fastening Systems segment starting in the second quarter of 2026.

Engineered Structures

Third-party sales for the Engineered Structures segment decreased $39, or 13%, in the second quarter of 2026 compared to the second quarter of 2025, primarily due to the disk forging facility divestiture and product rationalization. The Engineered Structures segment continues to focus on the optimization of its manufacturing footprint and rationalization of product mix in order to maximize profitability.

Third-party sales for the Engineered Structures segment decreased $49, or 8%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to the disk forging facility divestiture and product rationalization. The Engineered Structures segment is focusing on the optimization of its manufacturing footprint and rationalization of product mix in order to maximize profitability.

Segment Adjusted EBITDA for the Engineered Structures segment decreased $4, or 6%, in the second quarter of 2026 compared to the second quarter of 2025 due to the disk forging facility divestiture and product rationalization, partially offset by productivity gains.

Segment Adjusted EBITDA for the Engineered Structures segment decreased $5, or 4% in the six months ended June 30, 2026 compared to the six months ended June 30, 2025 due to the disk forging facility divestiture and product rationalization, partially offset by productivity gains.

Segment Adjusted EBITDA Margin for the Engineered Structures segment increased approximately 170 basis points in the second quarter of 2026 compared to the second quarter of 2025, primarily due to operational improvement efforts and lower net headcount.

Segment Adjusted EBITDA Margin for the Engineered Structures segment increased approximately 100 basis points in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to operational improvement efforts and lower net headcount.

The Engineered Structures segment continues to focus on the optimization of its manufacturing footprint, including the sale of its disk forging facility in Savannah, Georgia on March 31, 2026, and rationalization of product mix in order to maximize profitability. In 2026, as compared to 2025, this is expected to result in lower revenue in the commercial aerospace and defense aerospace markets. Governmental policies, laws and regulations, and other geopolitical and 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 our ability to recover tariffs are subject to changes and uncertainties.

Forged Wheels

Third-party sales for the Forged Wheels segment increased $40, or 14%, in the second quarter of 2026 compared to the second quarter of 2025 primarily due to an increase in aluminum and other inflationary cost pass through, partially offset by lower volumes in the commercial transportation market.

Third-party sales for the Forged Wheels segment increased $83, or 16%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to an increase in aluminum and other inflationary cost pass through and favorable foreign currency exchange rates, partially offset by lower volumes in the commercial transportation market.

Segment Adjusted EBITDA for the Forged Wheels segment increased $12, or 16%, in the second quarter of 2026 compared to the second quarter of 2025, primarily due to cost reductions, including lower net headcount, partially offset by lower volumes in the commercial transportation market.

Segment Adjusted EBITDA for the Forged Wheels segment increased $34, or 24%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to cost reductions, including lower net headcount, as well as favorable foreign currency exchange rates, partially offset by lower volumes in the commercial transportation market.

Segment Adjusted EBITDA Margin for the Forged Wheels segment increased approximately 30 basis points in the second quarter of 2026 compared to the second quarter of 2025, primarily due to cost reductions, including lower net headcount in response to lower volumes in the commercial transportation market, partially offset by higher aluminum and other inflationary cost pass through.

Segment Adjusted EBITDA Margin for the Forged Wheels segment increased approximately 180 basis points in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to cost reductions, including lower net headcount in response to lower volumes in the commercial transportation market, as well as favorable foreign currency exchange rates, partially offset by higher aluminum and other inflationary cost pass through.

In 2026, as compared to 2025, demand in the commercial transportation markets served by Forged Wheels is expected to remain low. Modest recovery in the commercial transportation market began in the second quarter and is expected to continue into the second half of 2026, amid volatile aluminum metal pricing and energy-related, economic, and regulatory uncertainty in North America. Governmental policies, laws and regulations, and geopolitical 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 our ability to recover tariffs are subject to changes and uncertainties.

Reconciliation of Total Segment Adjusted EBITDA to Income before income taxes

(1) Corporate expense includes selling, general administrative and other expenses, costs of corporate headquarters, acquisition and acquisition-related costs, costs associated with closures, supply chain disruptions, and other items.

Total Segment Adjusted EBITDA is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because it provides additional information with respect to the Company’s operating performance and the Company’s ability to meet its financial obligations. Differences between the total segment and consolidated totals are in Corporate.

See Restructuring and other credits discussion above under “Results of Operations” for reference.

Corporate expense increased $27, or 108%, in the second quarter of 2026 compared to the second quarter of 2025 primarily due to acquisition and acquisition-related costs of $22 as well as employment costs.

Corporate expense increased $37, or 79%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily due to acquisition and acquisition-related costs of $28 as well as employment costs.

Environmental Matters

See the Environmental Matters section of Note Q to the Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q.

Subsequent Events

See Note R to the Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q for subsequent events.

Liquidity and Capital Resources

Operating Activities

Cash provided from operations was $1,036 in the six months ended June 30, 2026 compared to $699 in the six months ended June 30, 2025. The increase of $337, or 48%, was primarily due to higher operating results of $311 and lower working capital of $17, partially offset by higher pension contributions of $6. The components of the change in working capital primarily included favorable changes in accounts payable of $205, partially offset by unfavorable changes in inventories of $84, prepaid expenses and other current assets of $59, receivables of $26, other accrued expenses, including timing of interest payments on long-term debt and deferred revenue, of $12, and taxes, including income taxes, of $7.

Management expects Howmet’s estimated pension contributions and other postretirement benefit payments in 2026 to be approximately $65.

Financing Activities

Cash provided from financing activities was $685 in the six months ended June 30, 2026 compared to cash used for financing activities of $506 in the six months ended June 30, 2025. The increase of $1,191, or 235%, was primarily due to additions to debt of $1,200 and a net increase in commercial paper of $450, partially offset by increased common stock repurchases of $300, increased payments on debt of $109, increased taxes paid for the net share settlement of equity awards of $21 primarily due to the timing of payments year over year, and increased dividends paid to common stock shareholders of $14 due to a $0.02 increase in dividends per common share, from $0.10 per share in the second quarter of 2025 to $0.12 per share in the second quarter of 2026, and debt issuance costs of $12. On an annual basis, the current year debt actions are expected to increase Interest expense, net by approximately $38.

The declaration of future common stock dividends is subject to the discretion and approval of the Board of Directors of Howmet after the Board’s consideration of all factors it deems relevant and subject to applicable law.

The Company maintains a Five-Year Revolving Credit Agreement that provides a $1,000 senior unsecured revolving credit facility (the “5-Year Revolving Credit Facility”) and a 364-Day Revolving Credit Agreement that provides a $600 senior unsecured revolving credit facility (the “364-Day Revolving Credit Facility” and, together with the 5-Year Revolving Credit Facility, the “Revolving Credit Facilities”) with a syndicate of lenders and issuers named therein (See Note O to the Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q for reference). There were no amounts outstanding as of June 30, 2026 or December 31, 2025, and no amounts were borrowed during 2026 or 2025 under these revolving credit agreements.

The Company has a commercial paper program under which the Company may issue unsecured commercial paper from time to time up to a maximum aggregate face amount of $1,000. The Company had $450 of commercial paper outstanding as of June 30, 2026, and no amounts were outstanding under the commercial paper program as of December 31, 2025. The Company had no commercial paper borrowings with original maturities greater than 90 days in 2026 or 2025. The Company’s commercial paper is sold on customary terms in the U.S. commercial paper market on a private placement basis. The proceeds of the commercial paper are used for general corporate purposes, including the CAM acquisition. In conjunction with the commercial paper program, the Company was assigned short-term credit ratings by Moody’s Investors Service, Inc., S&P Global Ratings, and Fitch Ratings, Inc.

The Company has an effective shelf registration statement on Form S-3, filed with the SEC, which allows for offerings of debt securities from time to time. The Company may opportunistically issue new debt securities in accordance with securities laws or utilize commercial paper in order to, but not limited to, refinance existing indebtedness. The Company continues to evaluate whether, when, and to what extent it may access capital markets, including any plans to refinance the $300 million aggregate principal amount of its 6.750% Bonds due January 2028 (the “2028 Bonds”). Our ability to refinance our indebtedness or enter into alternative financings in adequate amounts on commercially reasonable terms, or terms acceptable to us, may be affected by circumstances and economic events outside of our control. In the event that a refinancing does not occur before the maturity date of the 2028 Bonds, the Company believes that its projected cash on hand, and/or availability under the Revolving Credit Facilities will enable the Company to repay the 2028 Bonds.

In the future, the Company may, from time to time, redeem portions of its debt securities or repurchase portions of its debt or equity securities, in either the open market or through privately negotiated transactions, in accordance with applicable SEC and other legal requirements. The timing, prices, and sizes of purchases depend upon prevailing trading prices, general economic and market conditions, and other factors, including applicable securities laws. Such securities repurchases may be completed by means of trading plans established from time to time in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, block trades, private transactions, open market repurchases, tender offers, and/or accelerated share repurchase agreements, or other derivative transactions.

The Company’s costs of borrowing and ability to access the capital markets are affected not only by market conditions but also by the short-term and long-term debt ratings assigned to the Company by the major credit rating agencies. The Company believes that its projected cash on hand and availability of its Revolving Credit Facilities, its commercial paper program, and its accounts receivables securitization program will continue to be sufficient to fund our operating and capital allocation activities.

The three major credit rating agencies have rated Howmet’s debt with investment grade ratings. The Company’s most recent short-term and long-term credit ratings, as well as the current outlook from the three major credit rating agencies are as follows:

Short-Term Long-Term Outlook

S&P Global Ratings (“S&P”) A-2 BBB+ Stable

Moody’s Investors Service, Inc. (“Moody’s”) P-2 Baa1 Positive

Fitch Ratings, Inc. (“Fitch”) F1 A- Stable

On May 7, 2026, Moody’s updated Howmet’s rating outlook from stable to positive, citing strong demand for aerospace components, potential for free cash flow growth and sustained, low financial leverage.

On February 13, 2026, Fitch upgraded Howmet’s long-term debt rating from BBB+ to A-, citing conservative capital allocation and strong deleveraging momentum.

On September 8, 2025, S&P upgraded Howmet’s long-term debt rating from BBB to BBB+, and affirmed the current short-term debt rating and outlook at A-2 and stable, respectively, citing strong demand for commercial aerospace components, margin gains, and debt reduction.

Investing Activities

Cash used for investing activities was $1,900 in the six months ended June 30, 2026 compared to $212 in the six months ended June 30, 2025. The increase of $1,688, or 796%, was primarily due to cash used for the CAM and Brunner acquisitions, net of cash acquired, of $1,929, partially offset by an increase in proceeds from the sale of assets and businesses of $217, primarily due to the sale of its disk forging facility, and a decrease in capital expenditures of $23.

Total capital expenditures are anticipated to be approximately 5% of sales in 2026 including continued growth investments in the Engine Products segment.

Recently Adopted and Recently Issued Accounting Guidance

See Note B to the Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Not material.

Item 4. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures

The Company's Chief Executive Officer and Chief Financial Officer have evaluated the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this report, and they have concluded that these controls and procedures are effective.

(b) Changes in Internal Control over Financial Reporting

There have been no changes in internal control over financial reporting during the second quarter of 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

See Note Q to the Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q.

Item 1A. Risk Factors.

There have been no material changes from the risk factors previously disclosed in Part I, Item 1A, “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

The following table presents information with respect to the Company’s repurchases of its common stock during the quarter ended June 30, 2026:

(1) Excludes commissions cost.

(2) The Company has a Share Repurchase Program (the “Share Repurchase Program”) under which the Company may repurchase shares by means of trading plans established from time to time in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, block trades, private transactions, open market repurchases and/or accelerated share repurchase agreements, or other derivative transactions. There is no stated expiration for the Share Repurchase Program. Under the 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, and the Share Repurchase Program may be suspended, modified, or terminated at any time without prior notice. The Share Repurchase Program was authorized by the Company’s Board of Directors in August 2021 at $1,500 million, which was increased by the Board by $2,000 million in July 2024 to a total authorization of $3,500 million. As of August 3, 2026, the Company has approximately $697 million in Board authorization remaining available after giving effect to the additional $200 million share repurchases made in July 2026 at an average price per share of $276.61, which retired approximately 0.7 million additional shares.

Item 6. Exhibits.