AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 18/10/2026
Moat50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 2/4 · Specialized components, patents and manufacturing trade secrets support differentiation, corroborated by realized pricing above cost pass-through. Relative technical superiority and barriers to replication remain insufficiently demonstrated.
durability · 2/4 · Ongoing patent development and lack of dependence on a single intellectual-property asset support persistence. Missing patent lives and customer commitments, together with substitution risk, prevent a stronger durability assessment.
customer dependency · 2/4 · Engine-spares demand across successive reporting periods provides indirect evidence of recurring product need. It does not establish dependency on Howmet specifically; customers may switch suppliers, and Howmet is sensitive to customer production.
erosion resilience · 2/4 · Pricing above pass-through and operating improvements demonstrate current resilience. Highly competitive markets, possible substitution and limited evidence through a prolonged downturn leave longer-term resistance to erosion mixed.
Pricing power63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 3/4 · Howmet reports actual product price increases exceeding inflationary cost pass-through in 2025 and material and inflationary pass-through in 2026. This is strong observed pricing evidence, although the contribution is not quantified by customer or product.
retention · 2/4 · Growth including engine spares in successive periods supports repeat demand indirectly while favorable pricing was reported. Acquisitions and market growth confound the inference; no customer retention rate or renewal outcome is disclosed.
margin resilience · 3/4 · COGS relative to sales improved from 2023 through 2025 and again in the first half of 2026. Forged Wheels also improved adjusted profitability through cost reductions during weak demand. Volume, currency and portfolio effects limit attribution to pricing and prevent an exceptional grade.
contractual freedom · 2/4 · Disclosed contractual pass-through arrangements and realized increases beyond pass-through indicate some pricing latitude. Recovery can lag, competition can constrain increases, and unilateral repricing rights are not supplied.
Predictability98
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 2.38
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 4.08
Financial strength89
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 83.84
- netDebtEbitGrade
- 77.44
- interestCoverageGrade
- 96.59
- currentRatioGrade
- 100.00
- Debt / FCF (x)
- 2.13
- Net debt / operating income (x)
- 1.13
- Interest coverage (x)
- 11.63
- Current ratio (x)
- 2.13
Capital allocation95
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 22.34
- 3-year average dilution (%)
- -0.97
- 3-year average SBC / revenue (%)
- 0.83
- cashConversionGrade
- 90.14
Management69
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Actual capital spending, retired repurchased shares and covenant compliance support financial discipline. Substantial acquisition spending and new debt alongside increased repurchases create a mixed assessment; acquisition returns and comprehensive cash funding coverage are unestablished.
incentive alignment · 3/4 · Actual long-term compensation combines time-vested and performance-based equity with multi-year financial and relative shareholder-return measures. Disclosed performance-linked payouts and hedging restrictions support alignment. Missing ownership details and special CEO award terms limit completeness.
execution · 3/4 · Successive pricing improvements, lower COGS relative to sales and cost reductions in a weak transportation market demonstrate execution through operating evidence. Growth also reflects favorable markets and acquisitions, while first-half operating income includes restructuring credits; acquisition integration success is not yet established.
governance · 3/4 · Independent committees, an independent lead director, high actual Board attendance and absence of supermajority provisions support strong governance arrangements. Combined executive chairman and CEO roles concentrate authority, and disclosed structures alone do not prove exceptional oversight effectiveness.
Evidence
Engine Products Engine Products utilizes advanced designs and techniques to support next-generation engine programs and produces components primarily for aircraft engines and industrial gas turbines, including airfoils and seamless rolled rings.
Business—Engine Products; advanced designs and engine programs · Filed 12/02/2026
As of the end of 2025, the Company’s worldwide patent portfolio consisted of approximately 1,020 granted patents and 180 pending patent applications.
Business—Patents, Trade Secrets, and Trademarks; year-end 2025 portfolio · Filed 12/02/2026
The Company also has a significant number of trade secrets, mostly regarding manufacturing processes and material compositions that give many of its businesses important advantages in their markets.
Business—Patents, Trade Secrets, and Trademarks; manufacturing and materials know-how · Filed 12/02/2026
Howmet’s business as a whole is not, however, materially dependent on any single patent, trade secret, or trademark.
Business—Patents, Trade Secrets, and Trademarks; single-asset dependency · Filed 12/02/2026
As a result of product development and technological advancement, the Company continues to pursue patent protection in jurisdictions throughout the world.
Business—Patents, Trade Secrets, and Trademarks; continuing patent development · Filed 12/02/2026
Product price increases are in excess of inflationary cost pass through to our customers.
MD&A—2025 product pricing above inflationary cost pass-through · Filed 12/02/2026
Product price increases are in excess of material and inflationary cost pass through to our customers.
MD&A—2026 product pricing above material and inflationary cost pass-through · Filed 06/08/2026
Howmet’s customers may also change their business strategies or modify their business relationships with Howmet, including to reduce the amount of Howmet’s products they purchase, to switch to alternative suppliers, or to enter into the markets themselves to compete with Howmet.
Risk Factors—customer switching and potential customer integration · Filed 12/02/2026
As discussed in “Competitive Conditions” in Part I, Item 1 (Business) of this report, the markets for Howmet’s products are highly competitive.
Risk Factors—highly competitive product markets · Filed 12/02/2026
The willingness of customers to accept alternative solutions for the products sold by Howmet, pricing pressure from competitors, and technological advancements or other developments, including the use of AI, by or affecting Howmet’s competitors or customers could adversely affect Howmet’s business, financial condition, or results of operations.
Risk Factors—alternative solutions, pricing pressure and technological change · Filed 12/02/2026
Additionally, we may not be able to increase the prices of our products due to competitive pricing pressure and other factors.
Risk Factors—competitive constraints on price increases · Filed 12/02/2026
While we generally intend to pass along higher raw material and energy costs to our customers through contractual agreements in the form of price increases, there can be a delay between an increase in our costs and our ability to increase the prices of our products.
Risk Factors—contractual cost pass-through intentions and timing delays · Filed 12/02/2026
The increase was primarily due to higher sales in the commercial aerospace, defense aerospace, and gas turbines markets, including engine spares, and favorable product pricing, partially offset by lower volumes in the commercial transportation market.
MD&A—2025 sales drivers, engine spares and commercial transportation weakness · Filed 12/02/2026
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.
MD&A—second-quarter and first-half 2026 growth drivers, including acquisitions · Filed 06/08/2026
Cost of goods sold (“COGS”). COGS as a percentage of Sales was 65.8% in 2025 compared with 68.9% in 2024.
MD&A—2025 versus 2024 COGS relative to sales · Filed 12/02/2026
COGS as a percentage of Sales was 68.9% in 2024 compared with 71.9% in 2023.
MD&A—2024 versus 2023 COGS relative to sales · Filed 12/02/2026
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.
MD&A—second-quarter and first-half 2026 COGS relative to sales · Filed 06/08/2026
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.
MD&A—2026 COGS improvement drivers and offsetting costs · Filed 06/08/2026
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”).
MD&A—acquisition and divestiture effects on COGS comparisons · Filed 06/08/2026
31 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.
Segment results—Forged Wheels cost reductions during weak demand · Filed 06/08/2026
Second quarter ended Six months ended June 30, June 30, 2026 2025 2026 2025 Total segment capital expenditures $ 100 $ 98 $ 191 $ 214 Corporate 4 4 7 7 Capital expenditures $ 104 $ 102 $ 198 $ 221 13 The following table disaggregates segment revenue by major market served.
Note D—actual segment and consolidated capital expenditures · Filed 06/08/2026
The following table provides details for share repurchases made for the periods presented: Number of shares(1) Average price per share(2) Total Q1 2026 open market repurchase 1,301,914 $ 230.43 $ 300 Q2 2026 open market repurchase 1,197,056 $ 250.61 $ 300 2026 open market repurchases as of June 30, 2026 2,498,970 $ 240.10 $ 600 Q1 2025 open market repurchase 1,006,102 $ 124.24 $ 125 Q2 2025 open market repurchase 1,229,313 $ 142.36 $ 175 2025 open market repurchases as of June 30, 2025 2,235,415 $ 134.20 $ 300 (1)All of the shares repurchased have been retired.
Note I—actual share repurchases and retirement · Filed 06/08/2026
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.
MD&A—financing activity, debt additions and shareholder distributions · Filed 06/08/2026
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.
MD&A—acquisition spending, divestiture proceeds and capital expenditures · Filed 06/08/2026
As of June 30, 2026 and December 31, 2025, the Company was in compliance with all covenants under the Revolving Credit Agreements.
Note O—revolving credit covenant compliance · Filed 06/08/2026
Individual NEO performance is assessed, and an individual multiplier is applied to the funded payout results, thus allocating the incentive pool across the eligible population Long- Term LONG-TERM INCENTIVE COMPENSATION ▪ Make LTI equity the most significant portion of total compensation for senior executives and managers ▪ Set equity target grant levels in line with industry peers that are competitive to attract, retain and motivate executives and factor in individual performance and future potential for long-term retention ▪ NEO long-term incentives are granted as 40% time-vested restricted share units (RSUs) and 60% performance-based restricted share units (PRSUs) ▪ Financial metrics used are aligned with driving long-term stock price performance and are measured over three years ▪ A standalone relative Total Shareholder Return (“TSR”) metric is used to further reinforce shareholder alignment COMPENSATION LEVELS Base salaries and target incentive compensation levels are designed to attract, motivate, reward and retain executive talent, as well as to align pay with performance.
Executive Compensation—long-term award structure and performance period · Filed 06/04/2026
Payout Level Measure Threshold (payout = 50%) Target (payout = 100%) Maximum (payout = 200%) Result Weighted Payout Three-Year Increase in Adjusted EBITDA excluding special items (1/3 Weight) $160M $240M $320M 2022 Baseline = $1,276M 2025 Result = $2,416M Increase = $1,140M ~67% Three-Year Cumulative Adjusted EPS excluding special items (1/3 Weight) $4.38 $5.15 $5.92 2022 EPS = $1.84 2024 EPS = $2.69 2025 EPS = $3.77 Cumulative EPS = $8.30 ~67% Relative TSR (1/3 Weight) 25th Percentile of PRSU Peer Group Median PRSU Peer Group 75th Percentile of PRSU Peer Group Final TSR = +423% 100th Percentile of PRSU Peer Group ~67% Result: 200% The payout for the 2023 PRSUs was 200% as performance for all the metrics exceeded maximum.
Executive Compensation—2023 PRSU performance results and actual payout · Filed 06/04/2026
NO SHORT SALES, DERIVATIVE TRANSACTIONS OR HEDGING We do not allow short sales or derivative or speculative transactions in, or hedging of, Company securities by our directors, officers or employees.
Executive Compensation—prohibition on hedging and speculative transactions · Filed 06/04/2026
BOARD LEADERSHIP ▪ Current Board leadership structure comprises an Executive Chairman of the Board, an independent Lead Director and independent chairs of each Board Committee.
Corporate Governance—current Board leadership structure · Filed 06/04/2026
BOARD ENGAGEMENT ▪ Attendance: ▫ All directors attended more than 75% of Board and their respective Committee meetings in 2025; director attendance in 2025 averaged 96.4%.
Corporate Governance—actual 2025 Board and committee attendance · Filed 06/04/2026
26 | HOWMET AEROSPACE 2026 PROXY STATEMENT TABLE OF CONTENTS Corporate Governance HOWMET AEROSPACE 2026 PROXY STATEMENT | 27 TABLE OF CONTENTS Corporate Governance COMMITTEES OF THE BOARD Each of the Audit, Compensation and Benefits, Governance and Nominating, Cybersecurity, and Finance Committees is composed solely of directors who have been determined by the Board of Directors to be independent in accordance with SEC regulations, NYSE listing standards and the Company’s Director Independence Standards (including the heightened independence standards for members of the Audit and Compensation and Benefits Committees).
Corporate Governance—independent Board committees · Filed 06/04/2026
▪ No supermajority voting provisions in the Company’s Certificate of Incorporation or Bylaws.
Corporate Governance—absence of supermajority voting provisions · Filed 06/04/2026
and subsidiaries Statement of Consolidated Operations (unaudited) (in millions, except per-share amounts) Second quarter ended Six months ended June 30, June 30, 2026 2025 2026 2025 Sales (D) $ 2,547 $ 2,053 $ 4,860 $ 3,995 Cost of goods sold (exclusive of expenses below) 1,596 1,365 3,055 2,655 Selling, general administrative, and other expenses 148 89 259 174 Research and development expenses 8 9 17 17 Provision for depreciation and amortization 84 69 158 138 Restructuring and other credits (E) — — (93) (4) Operating income 711 521 1,464 1,015 Interest expense, net 51 38 94 77 Other expense, net (G) 11 14 13 23 Income before income taxes 649 469 1,357 915 Provision for income taxes (H) 115 62 243 164 Net income $ 534 $ 407 $ 1,114 $ 751 Amounts Attributable to Howmet Aerospace Common Shareholders (I): Net income $ 534 $ 407 $ 1,114 $ 750 Earnings per share: Basic $ 1.33 $ 1.01 $ 2.78 $ 1.85 Diluted $ 1.33 $ 1.00 $ 2.77 $ 1.84 Average Shares Outstanding (I): Basic 400 404 400 404 Diluted 402 406 402 407 The accompanying notes are an integral part of the consolidated financial statements.
Unaudited consolidated operations—2026 and 2025 sales, earnings and restructuring credits · Filed 06/08/2026
Boeing production rates have had and are expected to have a material impact on the financial performance of Howmet.
Risk Factors—actual and expected financial sensitivity to Boeing production · Filed 12/02/2026
