In this Form 10-K, selected items of information and data are incorporated by reference to portions of Howmet Aerospace Inc.’s definitive proxy statement for its 20222024 Annual Meeting of Shareholders (the “Proxy Statement”), which we expect to file with the Securities and Exchange Commission within 120 days after Howmet Aerospace Inc.’s fiscal year ended December 31, 2021.2023. Unless otherwise provided herein, any reference in this report to disclosures in the Proxy Statement shall constitute incorporation by reference of only that specific disclosure into this Form 10-K.

Howmet is a leading global provider of advanced engineered solutions for the aerospace and transportation industries. The Company’s primary businesses focus on jet engine components, aerospace fastening systems, and airframe structural components necessary for mission-critical performance and efficiency in aerospace and defense applications, as well as forged aluminum wheels for commercial transportation. Howmet’s technological capabilities support the innovation and growth of next-generation aerospace programs. Its differentiated technologies enable lighter, more fuel-efficient aircraft and commercial trucks to operate with a lower carbon footprint and support more sustainable air and ground transportation.

Howmet is a global company operating in 20 countries. Based upon the country where the point of shipment occurred, the United StatesNorth America and Europe generated 68%70% and 22%23%, respectively, of Howmet’s sales in 2021.2023. In addition, Howmet has operating activities in numerous countries and regions outside the United Statesof North America and Europe, including Canada, Mexico, China and Japan.

The Company produces products that are used primarily in the aerospace (commercial and defense), commercial transportation, and industrial and other markets. Howmet seeks to provide its customers with innovative solutions through offering differentiated products such as airfoils with advanced cooling and coatings for extreme temperature applications; specially-designed fasteners for lightweight composite airframe construction, reduced assembly costs, and lightning strike protection; and lightweight aluminum commercial wheels. Its products and solutions include investment castings for jet engines and industrial gas turbines (nickel superalloys, titanium, and aluminum), including airfoils and structural parts; seamless rolled rings for jet engines (mostly nickel superalloys); fastening systems for aerospace, industrial and commercial transportation applications (titanium, steel, and nickel superalloys); forged jet engine components (e.g., jet engine disks); machined and forged aircraft parts (titanium and aluminum); and forged aluminum commercial vehicle wheels, all of which are sold directly to customers and/or through distributors.

Howmet has four reportable segments, which are organized by product on a worldwide basis: Engine Products, Fastening Systems, Engineered Structures and Forged Wheels.

Engine Products utilizes advanced designs and techniques to support next-generation engine programs and produces components primarily for aircraft engines and industrial gas turbines, including airfoils and seamless rolled rings. Engine Products produces rotating parts as well as structural parts. Engine Products principally serves the commercial and defense aerospace, markets as well as the industrial gas turbine, market.and oil and gas markets.

Engineered Structures produces titanium ingots and mill products for aerospace and defense applications and is vertically integrated to produce titanium forgings, extrusions, forming and machining services for airframe, wing, aero-engine, and landing gear components. Engineered Structures also produces aluminum forgings, nickel forgings, and aluminum machined components, and assemblies for aerospace and defense applications. The principal markets served by Engineered Structures are commercial aerospace, defense aerospace, and land and sea defense.

Forged Wheels manufactures forged aluminum wheels for trucks, buses, and trailers and related products for the global commercial transportation market. The Company’s portfolio of wheels is sold under the product brand name Alcoa® Wheels, andwhich are five times stronger and 47% lighter than steel wheels. The Ultra ONE® Wheel with MagnaForce® alloy is the lightest portfolio of wheels on the market. The Company’s proprietary Dura-Bright® surface treatment is unmatched in appearance and corrosion protection.

Important raw materials purchased in 20212023 for each of the Company’s reportable segments are listed below.

Generally, raw materials are purchased from third-party suppliers under competitively priced supply contracts or bidding arrangements. The Company believes that the raw materials necessary to its business are and will continue to be available.

The Company believes that its domestic and international patent, trade secret and trademark assets provide it with a significant competitive advantage. The Company’s rights under its patents, as well as the products made and sold under them, are important to the Company as a whole and, to varying degrees, important to each business segment. The patents owned by Howmet generally concern particular products, manufacturing equipment or techniques. Howmet’s business as a whole is not, however, materially dependent on any single patent, trade secret or trademark. As a result of product development and technological advancement, the Company continues to pursue patent protection in jurisdictions throughout the world. As of the end of 2021,2023, the Company’s worldwide patent portfolio consists of approximately 943940 granted patents and 184215 pending patent applications.

The Company’s segments - Engine Products, Fastening Systems, Engineered Structures, and Forged Wheels - are subject to substantial and intense competition in the markets they serve. Although Howmet believes its advanced technology, manufacturing processes and experience provide advantages to Howmet’s customers, such as high quality and superior mechanical properties that meet the Company’s customers’ most stringent requirements, many of the products Howmet makes can be produced by competitors using similar types of manufacturing processes as well as alternative forms of manufacturing. Despite intense competition, Howmet continues as a market leader in most of its principal markets. We believe that factors such as Howmet’s technological expertise, state-of-the-art capabilities, capacity, quality, engaged employees and long-standing customer relationships enable the Company to maintain its competitive position.

Principal competitors include Berkshire Hathaway Inc., through its 2016 acquisition of Precision Castparts Corporation and subsidiaries, for titanium and titanium-based alloys, precision forgings, seamless rolled rings, investment castings, including airfoils, and aerospace fasteners; VSMPO (Russia) for titanium and titanium-based alloys and precision forgings; theAllegheny Technologies, Inc.’s High-Performance Materials & Components segment of Allegheny Technologies, Inc. for titanium and titanium-based alloys and precision forgings; Lisi Aerospace (France) for aerospace fasteners; and Aubert & Duval (part of Eramet Group in France) for precision forgings. Other competitors include Doncasters Group Ltd. (UK)(U.K.) and Consolidated Precision Products Corp. (owned by Warburg Pincus and Berkshire Partners) for investment castings; Weber Metals (part of Otto Fuchs) for precision forgings; and Forgital and Frisa (Mexico) for seamless rings.

In recent years, Forged Wheels has seen an increase in the number of aluminum wheel suppliers (both forged and cast aluminum wheels) from China, Taiwan, India and South Korea attempting to penetrate the global commercial transportation market.

Several of Howmet’s largest customers have captive superalloy furnaces for producing airfoil investment castings for their own use. Many other companies around the world also produce superalloy investment castings, and some of these companies currently compete with Howmet in the aerospace and other markets, while others are capable of competing with the Company should they choose to do so.

To attract, recruit, attract, develop and retain world-class talent, the Company has created a culture that embraces diversity, drives inclusion, and empowers and engages our employees. Our Code of Conduct describes how we lead with integrity and work with one another while supporting our stakeholders. The Company provides competitive wages, benefits and terms of employment.

The Company enables our employees to own their development and create rewarding careers that draw on their aptitudes and support their ambitions.ambitions. Our development process framework provides tools and resources to identify career options, skills gaps and actions they can take to progress within the Company. Using a human capital management platform, employees can build a professional profile to share their career aspirations and learn new skills. This platform allows us to align employee goals and growth with the Company’s future business needs so that we can pinpoint potential successor candidates and build their readiness for their future roles. Our talent review and succession planning process is an ongoing priority and is sponsored and led by our CEO.Chief Executive Officer (“CEO”) with oversight by the Board of Directors.

We are committed to attracting, developing, and retaining a diverse and inclusive workforce, while providing equal opportunities for all. We have started to use a data-driven approach to track how our employees are progressing through our organization. We seek to identify high performers and support their development into potential future leaders, with a particular focus on providing equitable opportunities to individuals who are members of underrepresented groups. Our Employee Resource Groups, composed of the African Heritage, EurAsian Diversity & Inclusion, Latin+, Next Generation, Pride, Veterans, and Women’s Networks, continue to be fundamental to building our culture of inclusion. Focusing on Gender, LGBTQ+, African Heritage, Hispanic, Veteran, European and Next Generation, theseThese networks provide colleagues with valuable support and advice, create development opportunities, and provide leadership with feedback that raises awareness of issues and challenges. The Company also provides diversity awareness training and resources regarding implicit bias.resources. Our Board of Directors and Executive Leadership team review diversity, equity and inclusion activity on a regular basis.

The names, ages, positions and areas of responsibility of the executive officers of the Company as of February 14, 202213, 2024 are listed below. The Company’s executive officers are annually elected or appointed to serve until the next annual meeting of the Board of Directors (held in conjunction with the annual meeting of shareholders), except in the case of earlier death, retirement, resignation or removal.

Howmet is subject to cyclical fluctuations in global economic conditions and lightweight metals end-use markets. Howmet sells many products to industries that are cyclical, such as the aerospace and commercial transportation industries, and the demand for our products is sensitive to, and quickly impacted by, demand for the finished goods manufactured by our customers in these industries, which may change as a result of changes in regional or worldwide economies, currency exchange rates, interest rates, inflation, energy prices or other factors beyond our control. In particular, Howmet derives a significant portion of our revenue from products sold to the aerospace industry, which is cyclical and reflective of changes in the general economy. The commercial aerospace industry is historically driven by the demand from commercial airlines for new aircraft and spare parts. The U.S. and international commercial aviation industries may face challenges arising from competitive pressures and fuel costs. Demand for commercial aircraft and spare parts is influenced by airline industry profitability, trends in airline passenger traffic domestically and globally, the state of U.S., regional and world economies, the ability of aircraft purchasers to obtain required financing and numerous other factors. Changes and uncertainties in the timing and level of future aircraft production by OEMs may cause our future results to differ from prior periods due to changes in the Company’s product mix. The defense aerospace cycle is highly dependent on U.S. and foreign government funding; however, itfunding. It is also drivenimpacted by the effects of terrorism, a changing global geopolitical environment, U.S. foreign policy, the retirement ofwhether older military aircraft are retired, and technological improvements to new engines and airframes. Further, theThe demand for Howmet’s commercial transportation products is driven by the number of vehicles produced by commercial transportation manufacturers. Commercial transportation sales and production are affected by many factors, including the age of the vehicle fleet, labor relations issues, fuel prices, regulatory requirements, government initiatives, trade agreements, and levels of competition.

Howmet is unable to predict the future course of industry variables, the strength of the U.S., regional or global economies, or the effects of government actions. Negative economic conditions, such as a major economic downturn a prolonged recovery period,or recession, continued inflation, or disruptions in the financial markets, could have a material adverse effect on Howmet’s business, financial condition or results of operations.

If Howmet’s operations, particularly one of its key manufacturing facilities, were to be disrupted, including because of significant equipment failures, natural disasters, power outages, fires, explosions, terrorism, theft, sabotage, adverse weather conditions, public health crises, labor disputes, labor shortages or other reasons, Howmet may be unable to effectively meet its obligations to, or demand from, its customers. In addition, the manufacture of many of Howmet’s products is a complex process. Manufacturing problems arising from equipment failure or malfunction, inadvertent failure to follow regulatory or customer specifications and procedures, including those related to quality or safety, and problems with raw materials could have

an adverse impact on the Company’s ability to fulfill orders or meet product quality or performance requirements, which may result in negative publicity and damage to our reputation, adversely impacting product demand and customer relationships. Interruptions in production capability could increase Howmet’s costs and reduce its sales, including causing the Company to incur costs for premium freight, make substantial capital expenditures, or purchase alternative material at higher costs to fulfill customer orders. Additionally, a delivery delay by us due to production interruptions could subject us to liability from customer claims that such delay resulted in losses to the customer. Furthermore, product manufacturing or performance issues could result in recalls, customer penalties, contract cancellation and product liability exposure in addition to a material adverse effect on our business, financial condition or results of operations. Because of approval, license and qualification requirements applicable to manufacturers and/or their suppliers, sources of alternatives to mitigate manufacturing disruptions may not be readily available to Howmet or its customers.

Howmet is currently under contract to supply components for a number of newexisting and existingnew commercial, general aviation, military aircraft and aircraft engine programs. Many of these contracts contemplate production increases over the next several years. If Howmet fails to meet production targets and commitments, or encounters difficulty or unexpected costs in meeting such levels, it could have a material adverse effect on the Company’s reputation, business, operating results or financial condition. Similarly, to the extent demand for our products increases rapidly and significantly in future periods, whether as a result of general market conditions, the end of the COVID-19 pandemic or otherwise, we may not be able to ramp up production quickly enough to meet the demand. We may also face difficulties in competing for and recruiting qualified employees. These difficultiesdemand, which could result in significant delivery delays that could damage Howmet’s reputationlost opportunities for growth and adversely affect our business, financial condition, results of operations or competitive position.

Howmet’s global operations require qualified and skilled personnel with relevant industry and technical experience. Shortages in certain skills, in areas such as engineering, manufacturing and technology, and other labor market inadequacies have created more competition for talent. A sustained labor shortage, lack of skilled labor, increased turnover, labor inflation, or increase in general labor costs whether caused by COVID-19 or as a result of general macroeconomic factors, could lead to higher labor, recruiting or training costs to attract and retain personnel. In addition, the Company’s headcount reductions to align our operations with reduced demand due to COVID-19 could make it difficult to refill the eliminated positions as business recovers. If the Company fails to attract, train, develop and retain a global workforce with the skills and in the locations we need to operate and grow our business, our business and operations could be adversely impacted. Furthermore, the continuity of key personnel and the preservation of institutional knowledge are vital to the success of the Company’s growth and business strategy. The loss of key members of managementpersonnel could significantly harm Howmet’s business, and any unplanned turnover or failure to develop adequate succession plans for key positions could deplete the Company’s institutional knowledge base, result in loss of technical or other expertise, delay or impede the execution of the Company’s business plans and erode Howmet’s competitiveness.

Howmet has long-term contracts with a significant number of its customers, some of which are subject to renewal, renegotiation or re-pricing at periodic intervals or upon changes in competitive supply conditions. Howmet’s failure to successfully renew,

renegotiate or favorably re-price such agreements, or a material deterioration in or termination of these customer relationships, could result in a reduction or loss in customer purchase volume or revenue. Additionally, a significant downturn or deterioration in the business or financial condition or loss of a key customer supplied by Howmet could adversely affect Howmet’s financial results. Howmet’s customers may experience delays in the launch of new products, labor strikes, diminished liquidity or credit unavailability, weak demand for their products, decreases in production rates due to regulatory investigations or otherwise, supply chain constraints or other difficulties in their businesses. For example, our sales could continue to

Howmet’s products are used in a variety of military applications, including military aircraft. Although many of the military programs in which Howmet participates extend several years, changes in military strategy, policy and priorities, or reductions in defense spending, may affect current and future funding of these programs and could reduce the demand for Howmet’s products, which could adversely affect Howmet’s business, financial condition or results of operations.

Howmet’s information technology systems could be subject to damage or interruption from power outages; computer network and telecommunications failures; computer viruses;cyberattacks; catastrophic events, such as fires, floods, earthquakes, tornadoes, hurricanes, acts of war or terrorism; and usage errors by employees. If Howmet’s information technology systems are damaged or cease to function properly, the Company may have to make a significant investment to fix or replace them, and Howmet may suffer loss of critical data and interruptions or delays in its operations. Any material disruption in the Company’s information technology systems, or delays or difficulties in implementing or integrating new systems or enhancing current systems, could have an adverse effect on Howmet’s business, financial condition or results of operations.

Increased global cybersecurity vulnerabilities, threats and more sophisticated and targeted cyberattacks pose a risk to the security of our and our customers’, suppliers’ and third-party service providers’ products, systems and networks, and the confidentiality, availability and integrity of our data.data, as well as those of our customers, suppliers and other counterparties. The Company believes that it faces threats of cyberattacks due to the industries it serves, the locations of its operations, and its technological innovations. The Company has experienced cybersecurity attacks in the past, including breaches of its information technology systems in which information was taken, and may experience them in the future, potentially with more frequency or sophistication. Although past attacks havedid not resultedresult in known losses of any critical data or hadhave a material impact on Howmet’s financial condition or results of operations, the scope and impact of any future incident cannot be predicted. While the Company continually works to safeguard its systems and mitigate potential risks, there is no assurance that such actions will be sufficient to prevent cyberattacks or security breachescybersecurity incidents that manipulate or improperly use the Company’s systems or networks, compromise confidential, personal or otherwise protected information, destroy or corrupt data, block access to its systems, or otherwise disrupt its operations. The occurrence of such events could negatively impact Howmet’s reputation and its competitive position and could result in litigation with third parties, regulatory action, loss of business, potential liability and increased remediation costs, any of which could have a material adverse effect on its financial condition and results of operations.

In addition, Howmet may face increased competition due to industry consolidation. As companies attempt to strengthen or maintain their market positions, companies could be acquired or merged. Companies that are strategic partners in some areas of Howmet’s business may acquire or form alliances with Howmet’s competitors, thereby reducing their business with Howmet. Industry consolidation may result in stronger competitors who are better able to obtain favorable terms from suppliers or who are better able to compete as sole-source vendors for customers. Consolidation within Howmet’s customer base may result in customers who are better able to command increasedexert leverage in negotiating prices and other terms of sale, which could adversely affect Howmet’s profitability. Consolidation within Howmet’s customer baseor may also lead to

reduced demand for Howmet’s products if a combined entity replaces Howmet’s productsHowmet with those of Howmet’s competitorsa Howmet competitor with which it hashad prior relationships. The result of these developmentscircumstances could have a material adverse effect on Howmet’s business, operating results and financial condition.

Howmet has operations or achieveactivities in numerous countries and maintain technological advantages.regions outside the United States, including Europe, Mexico, China, and Japan. As a result, Howmet’s global operations are affected by economic, political, legal, and other conditions in the United States and foreign countries in which Howmet does business, including (i) economic and commercial instability risks, including changes in local government laws, regulations and policies, such as those related to tariffs, sanctions and trade barriers, taxation, exchange controls, employment regulations and repatriation of assets or earnings; (ii) geopolitical risks such as political instability, civil unrest, expropriation, nationalization of properties by a government, imposition of sanctions, and renegotiation or nullification of existing agreements; (iii) wars such as those in Ukraine and the Middle East, cyber threats, terrorist activities or other dangerous conditions; (iv) compliance with applicable U.S. and foreign laws, including antitrust and competition regulations, the Foreign Corrupt Practices Act and other anti-bribery and corruption laws, and laws concerning trade, including the International Traffic in Arms Regulations, the Export Administration Regulations, and the sanctions, regulations and embargoes administered by the U.S. Department of Treasury’s Office of Foreign Assets Control; (v) aggressive, selective or lax enforcement of laws and regulations by foreign governmental authorities; (vi) exposure to fluctuations in foreign currency exchange rates and interest rates, as well as inflation, economic factors, and currency controls in the countries in which it operates; and (vii) major public health issues, such as an outbreak of a pandemic or epidemic. Although the effect of any of the foregoing factors is difficult to predict, any one or more of them could adversely affect Howmet’s business, financial condition or results of operations.

Adverse capital market conditions could result in reductions in the fair value of plan assets and increase the Company’s liabilities related to such plans. Additionally, unpredictable future declines in the discount rate or lower-than-expected investment returns on plan assets could lead to a decline in the plans’ funded status and result in higher than expected pension contributions. The foregoing factors may adversely affect the Company’s financial condition, liquidity and results of operations.

Share repurchases and the declaration of dividends fall within the discretion of Howmet’s Board of Directors, and the Board’s decision regarding such matters depends on many factors, including Howmet’s financial condition, earnings, capital requirements, debt service obligations, covenants associated with certain of the Company’s debt obligations, industry practice, legal requirements, regulatory constraints and other factors that the Board deems relevant. In addition, under the Credit Agreement, during the year ending December 31, 2022 (unless the Company ends this period earlier in accordance with the agreement or otherwise), common stock dividends and share repurchases are permitted only if no borrowings are outstanding under the Credit Agreement and are limited to an aggregate amount of $500 million. The Company previously suspended dividends in April 2020 to preserve cash and provide flexibility in light of the impact of the COVID-19 pandemic but resumed dividend payments in the third quarter of 2021. There can be no assurance that the Company will declare dividends or repurchase stock in the future in any particular amounts, or at all.

We derive a portion of our revenue from sales to U.S. and foreign governments and their respective agencies. Such contracts are subject to various procurement laws and regulations and contract provisions relating to their formation, administration and performance. New laws and regulations or changes to existing ones (including, but not limited to, those related to subcontracting, cybersecurity and specialty metals) can increase our risks and/or costs. Failure to comply with these laws, regulations or provisions in our government contracts could result in the imposition of various civil and criminal penalties, termination of contracts, forfeiture of profits, suspension of payments, increased pricing pressure or suspension from future government contracting. If our government contracts are terminated, if we are suspended from government work, or if our ability to compete for new contracts is adversely affected, our financial condition and results of operation could be adversely affected.

Howmet owns important intellectual property, including patents, trademarks, copyrights and trade secrets. The Company’s intellectual property plays an important role in maintaining Howmet’s competitive position in a number of the markets that the Company serves. Howmet’s competitors may develop technologies that are similar or superior to Howmet’s proprietary technologies, or design around the patents Howmet owns or licenses. Despite its controls and safeguards, Howmet’s technology may be misappropriated by its employees, its competitors or other third parties. The pursuit of remedies for any misappropriation of Howmet intellectual property is expensive and the ultimate remedies may be deemed insufficient. Further, in jurisdictions where the enforcement of intellectual property rights is less robust, the risk of misappropriation of Howmet intellectual property increases, despite efforts the Company undertakes to protect it. Developments or assertions by or against

Howmet is subject to income taxes in both the United States and various non-U.S. jurisdictions. Its domestic and international tax liabilities are dependent upon the distribution of income among these different jurisdictions. Changes in applicable domestic or foreign tax laws and regulations, including enactment of the Organization for Economic Cooperation and Development’s Pillar 2 framework, or their interpretation and application, including the possibility of retroactive effect, could affect the Company’s tax expense and profitability. Howmet’s tax expense includes estimates of additional tax that may be incurred for

tax exposures and reflects various estimates and assumptions. The assumptions include assessments of future earnings of the Company that could impact the valuation of its deferred tax assets. The Company’s future results of operations could be adversely affected by changes in the effective tax rate as a result of a change in the mix of earnings in countries with differing statutory tax rates, changes in the overall profitability of the Company, changes in tax legislation and rates, changes in generally accepted accounting principles, changes in the valuation of deferred tax assets and liabilities, the results of tax audits and examinations of previously filed tax returns or related litigation and continuing assessments of its tax exposures.

Howmet’s operations worldwide are subject to numerous complex and increasingly stringent health, safety and environmental laws and regulations. The costs of complying with such laws and regulations, as well as participation in assessments and cleanups of sites, and internal voluntary programs, have been, and in the future could be, significant. Environmental matters for which Howmet may be liable may arise in the future at its present sites, at sites owned or operated by its predecessors or affiliates, at sites that it may acquire in the future, or at third-party sites used by Howmet, its predecessors or affiliates for material and waste handling and disposal. Compliance with health, safety and environmental laws and regulations, including remediation obligations, may impact Howmet’s results of operations or liquidity in a particular period.

In addition, the industrial activities conducted at Howmet’s facilities present a significant risk of injury or death to our employees or third parties that may be on site. Our operations are subject to regulation by various federal, state and local agencies in the United States, including the Occupational Safety and Health Administration, and regulation by foreign government entities abroad responsible for employee health and safety, including the Occupational Safety and Health Administration.safety. Material liabilities relating to injury, death or other workers’ compensation claims could have a material adverse effect on our results of operations and financial condition or result in negative publicity and/or significant reputational harm.

Increased concern over climate change has led to new and proposed legislative and regulatory initiatives, such as cap-and-trade systems and additional limits on emissions of greenhouse gases, and Corporate Average Fuel Economy (“CAFE”) standardswhich in the United States.turn may trigger customer decarbonization requirements. New or revised laws, regulations and regulationspolicies in this area and customer decarbonization requirements could directly and indirectly affect Howmet and its customers and suppliers, including by increasing the costs of production or impacting demand for certain products, which could result in an adverse effect on our financial condition, results of operations and cash flows. Additionally, Howmet utilizes natural gas, electricity and other fuels to operate its facilities. Significant increased energy costs includingand/or costs to transition to renewable energy sources, as a result of new laws, such as carbon pricing or product energy efficiency requirements, or as a result of customer requirements, could be passed along to the Company and its customers and suppliers. Compliance with any new or more stringent laws or regulations, or stricter interpretations of existing laws, could require additional expenditures by the Company or its customers or suppliers.

Physical risks associated with climate change may result in an increase of the exposure to, and impact of, events with damage due to flooding, extreme winds and extreme precipitation for Howmet locations, suppliers or customers. Prolonged periods of drought may result in wildfires whichand/or restrictions on process water use. These climate-related impacts may have an adverse effect on production capacity of Howmet sites, suppliers and customers. These types of incidents could have a material adverse effect on our results of operations and financial condition.

In connection with the Arconic Inc. Separation Transaction and the Alcoa Inc. Separation Transaction,our separation transactions, we entered into various agreements with Arconic Corporation and Alcoa Corporation, respectively, including separationrespective Separation and distributionDistribution agreements tax matters agreements, employee matters agreements, intellectual property license agreements,pursuant to which Arconic Corporation and metal supply agreements.Alcoa

Corporation agreed to indemnify us for certain liabilities, and we agreed to indemnify those parties for certain liabilities. We rely on Arconic Corporation and Alcoa Corporationthese parties to satisfy their performance and payment obligations under these agreements. If either Arconic Corporation or Alcoa Corporationparty is unable or unwilling to satisfy its obligations under its applicable agreements, we could incur operational difficulties and/or material losses.

The Arconic Inc. Separation Transaction could result in substantial tax liability.

In the distribution, together with certain related transactions, asevent of a “reorganization” within the meaning of Sections 355potential material cybersecurity incident or ransomware demand, Howmet has adopted a policy to respond to such event, which includes protocols and 368(a)(1)(D) of the Internal Revenue Code of 1986, as amended (the “Code”). This condition was satisfied priorprocedures to, the Distribution of Arconic. However, the opinion of counsel was based upon and relied on, among other things, various facts and assumptions, as well as certain representations, statements and undertakings by us and Arconic Corporation, including those relating toescalate the past and future conduct by us and Arconic Corporation. If any of these facts, assumptions, representations, statementsincident or undertakings is, or becomes, inaccurate or incomplete, or if we or Arconic Corporation breach any of our representations or covenants contained in the separation agreement and certain other agreements and documents or in any documents relating to the opinion of counsel, the opinion of counsel may be invalid and the conclusions reached therein could be jeopardized.

Howmet’s principal office and corporate center is located at 201 Isabella Street, Suite 200, Pittsburgh, Pennsylvania 15212-5872. In the second quarter of 2022, the Company sold this property and entered into a 12-year lease with the purchaser for a portion of the property.

Howmet leases some of its facilities; however, it is the opinion of management that the leases do not materially affect the continued use of the properties or the properties’ values.

Not applicable.

The Company’s common stock is listed on the New York Stock Exchange under the symbol “HWM.” Prior to the Arconic Inc. Separation Transaction on April 1, 2020, the Company was known as Arconic Inc. and was listed under the stock symbol “ARNC.”

The number of holders of record of common stock was 10,2788,883 as of February 11, 2022.12, 2024.

The graph assumes, in each case, an initial investment of $100 on December 31, 2016,2018, and the reinvestment of dividends. The historical prices of the Company presented in the graph and table have been adjusted to reflect the impact of the April 2020 Arconic Inc. Separation Transaction. Because the starting point of the graph is December 31, 2016, the effect of the November 2016 Alcoa Inc. Separation Transaction is already reflected in the Company’s stock price on December 31, 2016. The graph, table and related information shall not be deemed to be “filed” with the SEC, nor shall such information be incorporated by reference into future filings under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that the Company specifically incorporates it by reference into such filing.

Reserved.

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

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, and industrial and other markets.

Howmet is a global company operating in 20 countries. Based upon the country where the point of shipment occurred, the United StatesNorth America and Europe generated 68%70% and 22%23%, respectively, of Howmet’s sales in 2021.2023. In addition, Howmet has operating activities in numerous countries and regions outside the United Statesof North America and Europe, including Canada, Mexico, China and Japan. Governmental policies, laws and regulations, and other economic factors, including inflation and fluctuations in foreign currency exchange rates and interest rates, affect the results of operations in countries with such activities.

In 2021,2023, Sales decreased 5%increased 17% over 20202022 primarily as a result of lowerhigher sales volumes infrom the commercial aerospace, market driven by the impact of COVID-19 and Boeing 787 production declines, and lower sales volumes in the defense aerospace, market, partially offset by growth in the commercial transportation, and industrial gas turbineand other markets, as well as favorable product pricing of $97. Price$105, and an increase in inflationary cost pass through of approximately $90. Product price increases are in excess of material and inflationary cost pass through to our customers.

Management continued its focus on liquidity and cash flows as well as improving its operating performance through cost reductions, streamlined organizational structures, margin enhancement, and profitable revenue, generation.efficient operations, and margin enhancement. Management has also continued its intensified focus on capital efficiency. Management’s focus and the related results enabled Howmet to end 20212023 with a solid financial position.

The following financial information reflects certain key highlights of Howmet’s 20212023 results:

In 2022,2024, management projects sales to increase as we expect robustsolid growth in most of the Company’s key markets,commercial aerospace market, and the Company’s strong position in those marketsthat market is expected to continue. The Company expects higher metal costs to also contribute to increased sales in 2022. Earnings per share is expected to grow as management continues to focus on revenue growth and operational performance. Cash provided from operations is expected to increase for the full year in 20222024 compared with 2021,2023, resulting from a continued focus on operating performance and on capital efficiency. Capital expenditures are expected to be less than depreciation and amortization.increase with additional investments in capacity expansions.

Sales for 20202022 were $5,259$5,663 compared with $7,098$4,972 in 2019, a decrease2021, an increase of $1,839,$691, or 26%14%. The decreaseincrease was primarily a result of lowerdue to higher sales volumes in the commercial aerospace market, an increase in material cost pass through of $225, and commercial transportation markets driven by the impactsfavorable product pricing of COVID-19 and Boeing 737 MAX (“737 MAX”) and Boeing 787 production declines along with a decrease in sales of $116 due to the divestiture of the forgings business in the U.K. in December 2019, all$67, partially offset by growthlower sales in the defense aerospace and industrial gas turbine markets and favorable product pricing.market. Product price increases are in excess of inflationary pass through to our customers.

COGS as a percentage of Sales was 73.7%72.5% in 20202022 compared with 73.5%72.3% in 2019.2021. The increase was primarily due to increased costs related to three plant fires, as well as material cost pass through and increased net headcount, primarily in the impactEngine Products and Fastening Systems segments, in anticipation of COVID-19 and lower sales volumes,future revenue increases, partially offset by net cost savings,higher volumes and favorable product pricing, intentional product exits,pricing. The Company had total COGS charges of $59 in 2022, offset by partial insurance claims reimbursements of $23, related to the France Plant Fire, Barberton Plant Fire, and the impairmentBarberton Cast House Incident, compared to total COGS charges of energy business assets$28 in 2021, offset by partial insurance claims reimbursements of $10 in the second quarter of 2019. The Company submitted insurance claims$32, related to the France Plant Fire and the Barberton Plant Fire, and received partial settlements of $39 in 2020 comparedFire. The insurance claims related to $25 in 2019, whichthese three plant fires were in excess of the insurance deductible. In 2020, the Company recorded charges of $41The downtime related to thethese plant fires compared to $26 in 2019. The downtime2022 and 2021 reduced production levels and affected productivity at the plants.

SG&A expenses were $288, or 5.1% of Sales, in 2022 compared with $251, or 5.0% of Sales, in 2021 compared with $277, or 5.3% of Sales, in 2020.2021. The decreaseincrease in SG&A of $26,$37, or 9%15%, was primarily due to overhead cost reductionshigher employment, travel, and lease costs in 2021 and costs incurred in 2020 associated with the Arconic Inc. Separation Transaction.

R&D expenses were $32 in 2022 compared with $17 in 2020 compared with $28 in 2019.2021. The decreaseincrease of $11,$15, or 39%88%, was primarily due to the consolidation of the Company's primary R&D facility in conjunction with ongoing cost reduction efforts.higher spending on technology projects across all segments.

Restructuring and other charges in 20202023 consisted primarily of a $12 charge for impairment of assets primarily related to decommissioned fixed assets in Engineered Structures, a $5 charge for U.S. and $582Canadian pension plans’ settlement accounting, a $3 charge for layoff costs, a $3 charge for various other exit related costs primarily for the closures of small manufacturing facilities, and a $2 charge for accelerated depreciation primarily related to the closure of a small Engineered Structures facility in 2019.the U.K. The Company has closed some small manufacturing facilities and may in the future close additional small facilities in order to consolidate operations, reduce fixed costs, and exit less profitable businesses.

Interest expense, net was $317$229 in 20202022 compared with $338$259 in 2019.2021. The decrease of $21,$30, or 6%12%, was primarily due to a reduced average level of debt for the year ended December 31, 20202022 compared to the year ended December 31, 2019.2021.

Loss on debt redemption was $2 in 2022 compared with $146 in 2021 compared with $64 in 2020.2021. The increasedecrease of $82, or 128%,$144 was primarily due to debt premiums paid in 2021 onrelated to the repurchases of the 6.875% Notes in 2021, partially offset by debt redemption or tender premiums, as applicable, paid in 2020 on the 6.150% Notes due 20202025 (the “6.150%“6.875% Notes”) and the 5.400% Notes.

Other expense, net was $82 in 2022 compared with $19 in 2021. The increase in expense of $63 was primarily driven by the adverse judgment of $65 related to the LBIE swaps, an increase from net realized and unrealized losses of $9, primarily related to mark-to-market adjustments on exchange-traded fixed income securities and losses on sales of receivables, and higher non-service related net periodic benefit costs related to pension and other postretirement benefit plans in 2022 of $7, partially offset by the impacts of deferred compensation arrangements of $16 and higher interest income of $4.

Howmet’s effective tax rate was 22.6% (provision on pre-tax income) in 2022 compared with the U.S. federal statutory rate of 21%. The effective tax rate differs from the U.S. federal statutory rate primarily as a result of a $12 charge related to an increase in expensethe valuation allowance on a foreign tax credit carryforward in the U.S., $8 of $43 was primarily drivencharges related to U.S. tax on Global Intangible Low-Taxed Income (“GILTI”) and other foreign earnings, $8 of charges related to nondeductible expenses, and $5 of incremental state tax and foreign taxes on earnings also subject to U.S. federal income tax, partially offset by a $6 benefit for the write-offrelease of an indemnification receivable of $53a valuation allowance on interest deduction carryforwards in the U.K., a $5 benefit related to a Spanish tax reserve, reflecting Alcoa Corporation's 49% shareaccounting method change, a $5 excess benefit for stock compensation, and Arconic Corporation's 33.66% share,a $3 benefit related to a distribution of foreign earnings. The Inflation Reduction Act of 2022 (the “Act”) was signed into law on August 16, 2022. The Act includes various tax provisions, including a 1% excise tax on net stock repurchases, expanded tax credits for clean energy incentives, and lower interesta corporate alternative minimum tax that generally applies to U.S. corporations with average adjusted financial statement income over a three-year period in excess of $19, which were partially offset by lower deferred compensation expense of $14 and favorable foreign currency movements of $16.$1,000. The Company does not expect the Act to materially impact its financial statements.

The Company produces aerospace engine partshas aligned its operations consistent with how the CEO assesses operating performance and components and aerospace fastening systems for 737 MAX airplanes. In late December 2019, Boeing announced a temporary suspension of the production of 737 MAX airplanes. This decline in production had a negative impact on sales and segment operating profit in the Engine Products, Fastening Systems and Engineered Structures segments in 2020 and the first half of 2021. While regulatory authorities in the United States and certain other jurisdictions lifted grounding orders beginning in late 2020, our sales remained at lower levels through the first half of 2021 due to the residual impacts of the 737 MAX grounding.

Engine Products produces investment castings, including airfoils, and seamless rolled rings primarily for aircraft engines (aerospace commercial and defense) and industrial gas turbines.turbine applications. Engine Products produces rotating parts as well as structural parts, which are sold directly to customers. Generally, the sales and costs and expenses of this segment are transacted in the local currency of the respective operations, which are mostly the U.S. dollar, British pound, Euro,euro, and Japanese yen.

Third-party sales for the Engine Products segment decreased $124,increased $568, or 5%21%, in 20212023 compared with 2020,2022, primarily due to lower saleshigher volumes in the commercial aerospace, market driven by the impact of COVID-19 and Boeing 787 production declines and lower sales volumes in the defense aerospace, market, partially offset by higher sales volumes in the industrial gas turbine, market.and oil and gas markets.

Segment operating profitAdjusted EBITDA for the Engine Products segment increased $23,$158, or 6%22%, in 20212023 compared with 2020,2022, primarily due to cost reductions and favorable product pricing, partially offset by lower saleshigher volumes in the commercial aerospace, market driven by the impact of COVID-19 and Boeing 787 production declines, and lower sales volumes in the defense aerospace, market.industrial gas turbine, and oil and gas markets. The segment addedabsorbed approximately 9501,030 net headcount since the first quarterend of 20212022 in anticipationsupport of expected revenue increases, into 2022.resulting in unfavorable near-term recruiting, training and operational costs.

Segment operating profitAdjusted EBITDA for the Engine Products segment decreased $204,increased $165, or 33%29%, in 20202022 compared with 2019,2021, primarily due to lowerhigher volumes in the commercial aerospace salesand oil and gas markets as well as productivity gains and favorable product pricing.

Segment Adjusted EBITDA Margin for the Engine Products segment increased approximately 20 basis points in 2023 compared with 2022, primarily due to higher volumes fromin the suspension of 737 MAX productioncommercial aerospace, defense aerospace, industrial gas turbine, and COVID-19 productivity impacts,oil and gas markets, partially offset by cost reductions, favorable product pricing,an increase in headcount and favorable salesinflationary costs.

Segment Adjusted EBITDA Margin for the Engine Products segment increased approximately 230 basis points in 2022 compared with 2021, primarily due to higher volumes in the defensecommercial aerospace and industrialoil and gas turbine markets.

In 2022,2024, as compared to 2021,2023, demand in the commercial aerospace, defense aerospace, oil and gas, and industrial gas turbine markets is expected to increase.

Fastening Systems produces aerospace and industrial fastening systems, as well as commercial transportation fasteners. The business’s high-tech, multi-material fastening systems are found nose to tail on aircraft and aero engines. The business’s

products are also critical components of automobiles, commercial transportation vehicles and construction and industrial equipment. Fastening Systems are sold directly to customers and through distributors. Generally, the sales and costs and expenses of this segment are transacted in the local currency of the respective operations, which are mostly the U.S. dollar, British pound, and Euro.euro.

Third-party sales for the Fastening Systems segment decreased $201,increased $232, or 16%21%, in 20212023 compared with 2020,2022, primarily due to lower saleshigher volumes in the commercial aerospace, market, driven byincluding the impact of COVID-19 and Boeing 787 production declines, partially offset by higher sales volumes in theemerging wide body recovery, commercial transportation, defense aerospace, and industrial markets.

Third-party sales for the Fastening Systems segment decreased $316,increased $73, or 20%7%, in 20202022 compared with 2019,2021, primarily due to lower saleshigher volumes in the commercial aerospace market, driven by the impact of COVID-19 and the suspension of 737 MAXwith narrow body recovery more than offsetting Boeing 787 production as well as lower salesdeclines, higher volumes in the commercial transportation market, which was also impacted by the effects of COVID-19,and an increase in material cost pass through, partially offset by sales volume growthlower volumes in the industrial market and favorable product pricing.market.

Segment operating profitAdjusted EBITDA for the Fastening Systems segment increased $44, or 19%, in 2023 compared with 2022, primarily due to higher volumes in the commercial aerospace, commercial transportation, defense aerospace, and industrial markets. The segment absorbed approximately 435 net headcount since the end of 2022 in support of expected revenue increases, resulting in unfavorable near-term recruiting, training and operational costs.

Segment Adjusted EBITDA for the Fastening Systems segment decreased $57,$5, or 23%2%, in 20212022 compared with 2020,2021, primarily due to lower sales volumes in the commercial aerospace market, driven by the impact of COVID-19 and Boeing 787 production declines, lower volumes in the industrial market, and inflationary costs, partially offset by cost reductions and favorable saleshigher volumes in the narrow body commercial aerospace and commercial transportation and industrial markets.

Segment operating profitAdjusted EBITDA Margin for the Fastening Systems segment decreased $149, or 38%,approximately 30 basis points in 20202023 compared with 2019,2022, primarily due to an increase in headcount and inflationary costs, partially offset by higher volumes in the commercial aerospace, commercial transportation, defense aerospace, and industrial markets.

Segment Adjusted EBITDA Margin for the Fastening Systems segment decreased approximately 200 basis points in 2022 compared with 2021, primarily due to Boeing 787 production declines, lower volumes in the industrial market, and inflationary costs, partially offset by favorable volumes in the narrow body commercial aerospace and commercial transportation sales volumes and COVID-19 productivity impacts, partially offset by cost reductions and favorable product pricing.markets.

In 2022,2024, as compared to 2021,2023, demand in the commercial aerospace and commercial transportationindustrial markets is expected to increase.

Third-party sales for the Engineered Structures segment decreased $202,increased $88, or 22%11%, in 20212023 compared with 2020,2022, primarily due to lower saleshigher volumes in the commercial aerospace market, drivenincluding Russian titanium share gains and the emerging wide body recovery, partially offset by the impact of COVID-19 and Boeing 787 production declines, and lower sales volumes in the defense aerospace market including lower F-35 program volumes.associated with legacy fighter programs.

Third-party sales for the Engineered Structures segment decreased $328,increased $65, or 26%9%, in 20202022 compared with 2019,2021, primarily due to lower saleshigher volumes in the narrow body commercial aerospace market driven by COVID-19as well as an increase in material cost pass through and Boeing 787 production declines and the 737 MAX production suspension,favorable product pricing, partially offset by an increase in defense aerospace sales volumes and favorable product pricing.

In 2022,2024, as compared to 2021,2023, demand in the commercial aerospace market is expected to increase. However, demand in the defense aerospace market is expected to be down.

Forged Wheels produces forged aluminum wheels and related products globally for heavy-duty trucks, trailers, and buses globally.buses. Forged Wheels'Wheels’ products are sold directly to OEMs and through distributors. Generally, the sales and costs and expenses of this segment are transacted in the local currency of the respective operations, which are mostly the U.S. dollar and Euro.euro.

Third-party sales for the Forged Wheels segment increased $242,$89, or 36%8%, in 20212023 compared with 2020,2022, primarily due to higher sales volumes in the commercial transportation market and higher metal prices.market.

Third-party sales for the Forged Wheels segment decreased $290,increased $137, or 30%15%, in 20202022 compared with 2019,2021, primarily due to lower sales volumesan increase in thealuminum material and other inflationary cost pass through and higher commercial transportation market drivenvolumes, partially offset by COVID-19 and production downtime related to the Barberton Plant Fire (discussed below).unfavorable foreign currency movements.

In mid-February 2020, a fire occurred at the Company’s forged wheels plant located in Barberton, Ohio. The downtime reduced production levels and affected productivity at the plant. TheDuring the fourth quarter of 2022, the Company hassettled the insurance with a deductibleclaim related to the Barberton Plant Fire.

In 2022,2024, as compared to 2021,2023, demand in the commercial transportation markets served by Forged Wheels is expected to increasedecrease in most regions. An increaseregions due to lower OEM builds. A decrease in metal costsaluminum price pass through is expected to contribute to an increasea net decrease in sales as the Company generally passes through metal costs. However, sales in the Forged Wheels segment could be negatively impacted by customer supply chain constraints.sales.

See Restructuring and other charges, D&A, Loss on debt redemption, Interest expense, net, and Other expense, net discussions above under “Results of Operations” for reference.

Corporate expense increased $19,decreased $20, or 23%17%, in 20212023 compared with 20202022, primarily due to lower net costs related to the France Plant Fire, the Barberton Plant Fire, and the Barberton Cast House Incident of $48, partially offset by costs associated with closures, shutdowns, and other items of $32 and$10, costs related to collective bargaining agreement negotiations of $8, legal and other advisory reimbursements received in 2020 that2022 of $3 which did not recur in 2023, and higher employment costs in 2023.

Corporate expense increased $18, or 18%, in 2022 compared with 2021, aggregatingprimarily due to $8, partially offset by lowerhigher net costs related to the France Plant Fire, the Barberton Plant Fire, and the France Plant FireBarberton Cast House Incident of $6$39, higher employment, travel, and lowerlease costs drivenin 2022, and higher nonrecurring legal and other advisory reimbursements received in 2021 compared to 2022 of $1, partially offset by overhead cost reductions, as well as2021 costs incurred in 2020of $32 associated with the Arconic Inc. Separation Transaction of $7 thatclosures, shutdowns, and other items which did not recur in 2021.2022.

Howmet maintains a disciplined approach to cash management and the strengthening of its balance sheet. Management continued to focus on actions to improve Howmet’s cost structure and liquidity, providing the Company with the ability to operate effectively. Such actions included procurement efficiencies and overhead rationalization to reduce costs, working capital initiatives, and maintaining a sustainable level of capital expenditures.

Cash provided from operations and financing activities is expected to be adequate to cover Howmet'sHowmet’s operational and business needs over the next 12 months. For an analysis of long-term liquidity, see “Contractual Obligations”Obligations and “Off-BalanceOff-Balance Sheet Arrangements” below.

AtAs of December 31, 2021,2023, cash and cash equivalents of Howmet were $720,$610, of which $199$384 was held by Howmet'sHowmet’s non-U.S. subsidiaries. If the cash held by non-U.S. subsidiaries were to be repatriated to the U.S., the Company does not expect there to be additional material income tax consequences.

Cash provided from operations in 20212023 was $449$901 compared with $9$733 in 20202022 and $461$449 in 2019.2021.

The increase in cash provided from operations of $440,$168, or 4,889%23%, between 20212023 and 20202022 was due to higher operating results of $303, lower working capitalpayments on noncurrent liabilities of $357,$26, and lower pension contributions of $161, and lower noncurrent liabilities of $12,$7, partially offset by lower operating resultshigher working capital of $38 and the write-off$163.

The components of the change in working capital included favorableunfavorable changes in accounts payable of $525, accrued expenses of $71, and$253, prepaid expenses and other current assets of $13,$18, and receivables of $3, including collections of employee retention credit receivables, partially offset by inventories of $92, accrued expenses of $14, and taxes, including income taxes, of $139, receivables of $99 including employee retention credit receivables, and inventories of $14.$5.

The decreaseincrease in cash provided from operations of $452,$284, or 98%63%, between 20202022 and 20192021 was primarily due to lower operating results of $874, partially offset by lower working capital of $355, lower noncurrent assets$165, higher operating results of $46, lower noncurrent liabilities of $10,$89, and lower pension contributions of $11.$53, partially offset by higher payments on noncurrent liabilities of $37. The components of the change in working capital included favorable changes in receivables of $739,$176, including collections of employee retention credit receivables, accrued expenses of $169, accounts payable of $102, and taxes, including income taxes, of $100, and$29, partially offset by inventories of $77, offset by accounts payable of $380, accrued expenses of $175$294 and prepaid expenses and other current assets of $6.$17.

Cash used for financing activities was $868 in 2023 compared with $526 in 2022 and $1,444 in 2021 compared with $3692021.

The use of cash in 20202023 was primarily related to the repayments on the aggregate outstanding principal amount of long-term debt of approximately $876, the repurchase of common stock of $250, taxes paid for net share settlement of equity awards of $77, and $1,568dividends paid to shareholders of $73. These items were partially offset by proceeds from term loan facilities of $400 and the exercise of employee stock options of $11. On an annual basis, the 2023 debt reduction and refinancing activities will decrease Interest expense, net by approximately $29.

The use of cash in 2019.2022 was primarily related to the repurchase of common stock of $400, the repayments on the aggregate outstanding principal amount of long-term debt of approximately $69, and dividends paid to shareholders of $44. These items were partially offset by proceeds from the exercise of employee stock options of $16.

The use of cash in 2021 was primarily related to the repayments on the aggregate outstanding principal amount of long-term debt of approximately $1,537, repurchase of common stock of $430, premiums paid on the redemption of debt of $138, dividends paid to shareholders of $19, and debt issuance costs of $11. These items were partially offset by long-term debt issuance of $700 and proceeds from the exercise of employee stock options of $22. On an annual basis,

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 under such registration statement or otherwise in accordance with securities laws includingor utilize commercial paper in order to, but not limited to, in orderrefinance existing indebtedness. The Company continues to evaluate whether, when and to what extent it may access capital markets, including any plans to refinance existing indebtedness.

TheIn the future, the Company may, in the futurefrom time to time, redeem portions of its debt securities or repurchase additional portions of its debt or equity securities from time to time, 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 purchases 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-short-term and long-term debt ratings assigned to the Company by the major credit rating agencies. The Company believes that its cash on hand, cash provided from operations and availability of the Credit Facility and its accounts receivables securitization program will continue to be sufficient to fund our operating and capital allocation activities, including repayments of indebtedness.

The Company's credit ratings from the three major credit rating agencies are as follows: 

On August 18, 2021, Moody’s affirmed the following ratings for Howmet:23, 2023, Fitch upgraded Howmet’s long-term debt at Ba2rating to BBB, citing the Company’s improved financial leverage, and affirmed the current outlook asat stable.

Cash used for investing activities was $215 and $135 in 2023 and 2022, respectively, compared with cash provided from investing activities wasof $107 in 2021 compared2021.

The use of cash in 2022 was capital expenditures of $193 primarily related to various automation projects, information technology upgrades, and sustaining capital projects across all segments, partially offset by proceeds from the sale of assets of $58, which was primarily due to the sale of the corporate center and a manufacturing facility in Engine Products. In the second quarter of 2022, the Company sold the corporate headquarters in Pittsburgh, PA. The proceeds from the sale of the corporate headquarters were $44, excluding $3 of transaction costs, and a carrying value of $41. The Company entered into a 12-year lease with $271the purchaser for a portion of the property. Additionally, in 2020the fourth quarter of 2022, the Company sold the property of a manufacturing facility in the Engine Products segment. The proceeds from the sale of this property were $15 and $528 in 2019.a carrying value of $7.

Howmet is required to make future payments under various contracts, including long-term purchase obligations, financing arrangements, and lease agreements. Howmet also has commitments to fund its pension plans, provide payments for other postretirement benefit plans, and fund capital projects.

Operating leases represent multi-year obligations for certain land and buildings, plant equipment, vehicles, and computer equipment.

Interest related to total debt is based on fixed interest rates in effect as of December 31, 20212023 and is calculated on debt with maturities that extend to 2042.

Estimated minimum required pension funding and other postretirement benefit payments are based on actuarial estimates using current assumptions for discount rates, long-term rate of return on plan assets, and health care cost trend rates, among others. It is Howmet’s policy to fund amounts for pension plans sufficient to meet the minimum requirements set forth in the benefits laws and tax laws of the applicable country. Periodically, Howmet contributes additional amounts as deemed appropriate.

Howmet has determined that it is not practicable to present pension funding and other postretirement benefit payments beyond 20262029 and 2031,2033, respectively.

Layoff and other restructuring payments to be paid within one year primarily relate to severance costs.

Howmet has historically paid quarterly dividends on its preferred and common stock. The Company paid an aggregate of $19$73 in common stock and preferred stock dividends to shareholders during 2021.2023. Because all dividends are subject to approval by Howmet’s Board of Directors, amounts are not included in the preceding table unless such authorization has occurred. As of December 31, 2021,2023, there were 421,691,912409,914,461 shares of outstanding common stock and 546,024 shares of outstanding Class A preferred stock. In 2021,2023, the preferred stock dividend was $3.75 per share. A dividend of $0.04$0.17 per share on the Company’s common stock was paid in 20212023 ($0.020.04 per share in each of the thirdfirst, second, and fourththird quarters of 2021)2023 and $0.05 in the fourth quarter of 2023). Fully diluted shares outstanding as of December 31, 20212023 were 427,526,370.412,897,456.

Capital projects in the preceding table only include amounts approved by management as of December 31, 2021.2023. Funding levels may vary in future years based on the anticipated construction schedules of the projects. It is expected that significant expansion projects will be funded through various sources, including cash provided from operations. Total capital expenditures are anticipated to be approximately 4% of sales in 2022.2024 and include additional capital expenditures related to the Engine Products capacity and Forged Wheels expansions.

Pursuant to the Separation and Distribution Agreement, dated as of October 31, 2016, between Howmet and Alcoa Corporation, Howmet was required to provide certain guarantees for Alcoa Corporation, which had a combined fair value of $6 and $12 atas of both December 31, 20212023 and 2020, respectively,2022, and were included in Other noncurrent liabilities and deferred credits in the Consolidated Balance Sheet. The remaining guarantee, for which the Company and Arconic Corporation are secondarily liable in the event of a payment default by Alcoa Corporation, relates to a long-term energy supply agreement that expires in 2047 at an Alcoa Corporation facility. The Company currently views the risk of an Alcoa Corporation payment default on its obligations under the contract to be remote. The Company and Arconic Corporation are required to provide a guarantee up to an estimated present value amount of approximately $1,406$1,131 and $1,398 at$1,040 as of December 31, 20212023 and 2020,2022, respectively, in the event of an Alcoa Corporation payment default. In December 2021, December 2022, and 2020,December 2023, a surety bond with a limit of $80 relating to this guarantee was obtained by Alcoa Corporation to protect Howmet'sHowmet’s obligation. This surety bond is expected towill be renewed on an annual basis by Alcoa Corporation.

Howmet has outstanding surety bonds primarily related to tax matters, contract performance, workers’ compensation, environmental-related matters, energy contracts, and customs duties. The total amount committed under these annual surety bonds, which expire and automatically renew or expire at various dates, primarily in 20222024 and 2023,2025, was $47 at$43 as of December 31, 2021.2023.

The preparation of the Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America requires management to make certain judgments, estimates, and assumptions regarding uncertainties that affect the amounts reported in the Consolidated Financial Statements and disclosed in the accompanying Notes. These estimates are based on historical experience and, in some cases, assumptions based on current and future market experience, including considerations relating to changes in the impact of COVID-19. The impact of COVID-19 is rapidly changing and of unknown duration and macroeconomic impact and as a result, these considerations remain highly uncertain.aerospace industry. Areas that require significant judgments, estimates, and assumptions include the testing of goodwill, other intangible assets, and properties, plants, and equipment, and other intangible assets for impairment; estimating fair value of businesses acquired or divested; pension plans and other postretirement benefits obligations; stock-based compensation; income taxes; and income taxes.litigation and contingent liabilities.

Management uses historical experience and all available information to make these judgments, estimates, and assumptions, and actual results may differ from those used to prepare the Company’s Consolidated Financial Statements at any given time. Despite these inherent limitations, management believes that Management’s Discussion and Analysis of Financial Condition and Results of Operations and the Consolidated Financial Statements and accompanying Notes provide a meaningful and fair perspective of the Company.

The determination of what constitutes an asset group, the associated estimated undiscounted net cash flows, and the estimated useful lives of the assets also require significant judgments.

The expected long-term rate of return on plan assets is generally applied to a five-year market-related value of plan assets (a fair value at the plan measurement date is used for certain non-U.S. plans).assets. The process used by management to develop this assumption is one that relies on a combination of historical asset return information and forward-looking returns by asset class. As it relates to historical asset return information, management focuses on various historical moving averages when developing this assumption. While consideration is given to recent performance and historical returns, the assumption represents a long-term, prospective return. Management also incorporates expected future returns on current and planned asset allocations using information from various external investment managers and consultants, as well as management’s own judgment.

Compensation expense recorded in 2023, 2022, and 2021 2020,was $50 ($44 after-tax), $54 ($49 after-tax), and 2019 was $40 ($36 after-tax), $46 ($42 after-tax), and $69 ($63 after-tax), respectively.

Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. In evaluating the need for a valuation allowance, management considers all potential sources of taxable income, including income available in carry-back periods, future reversals of taxable temporary differences, projections of taxable income, and income from tax planning strategies, as well as all available positive and negative evidence. Positive evidence includes factors such as a history of profitable operations, projections of future profitability within the carryforward period, including from tax planning strategies, and Howmet’s experience with similar operations. Existing favorable contracts and the ability to sell products into established markets are additional positive evidence. Negative evidence includes items such as cumulative losses, projections of future losses, or carryforward periods that are not long enough to allow for the utilization of a deferred tax asset based on existing projections of income. Deferred tax assets for which no valuation allowance is recorded may not be realized upon changes in facts and circumstances, resulting in a future charge to establish a valuation allowance. Existing valuation allowances are re-examined under the same standards of positive and negative evidence. If it is determined that it is more likely than not that a deferred tax asset will be realized, the appropriate amount of the valuation allowance, if any, is released. Deferred tax assets and liabilities are also re-measuredremeasured to reflect changes in underlying tax rates due to law changes and the granting and lapse of tax holidays.

It is Howmet’s policy to apply a tax law ordering approach when considering the need for a valuation allowance on net operating losses expected to offset GILTI inclusions. Under this approach, reductions in cash tax savings are not considered as part of the valuation allowance assessment. Instead, future GILTI inclusions are considered a source of taxable income that support the realizability of deferred tax assets.

It is Howmet’s policy to treat taxes due from future inclusions in U.S. taxable income related to GILTI as a current period expense when incurred.

Tax benefits related to uncertain tax positions taken or expected to be taken on a tax return are recorded when such benefits meet a more likely than not threshold. Otherwise, these tax benefits are recorded when a tax position has been effectively settled, which means that the statute of limitations has expired or the appropriate taxing authority has completed their examination even though the statute of limitations remains open. Interest and penalties related to uncertain tax positions are recognized as part of the provision for income taxes and are accrued beginning in the period that such interest and penalties would be applicable under relevant tax law until such time that the related tax benefits are recognized.

Not material.

The accompanying Consolidated Financial Statements of Howmet Aerospace Inc. and its subsidiaries (the “Company”) were prepared by management, which is responsible for their integrity and objectivity. The statements were prepared in accordance with accounting principles generally accepted in the United States of America and include amounts that are based on management’s best judgments and estimates. The other financial information included in the annual report is consistent with that in the financial statements.

Management also recognizes its responsibility for conducting the Company’s affairs according to the highest standards of personal and corporate conduct. This responsibility is characterized and reflected in key policy statements issued from time to time regarding, among other things, conduct of its business activities within the laws of the host countries in which the Company operates and potentially conflicting outside business interests of its employees. The Company maintains a systematic program to assess compliance with these policies.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.