2020 Annual Report

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2020 Annual Report HOWMET AEROSPACE | 2020 ANNUAL REPORT HOWMET AEROSPACE | 2020 ANNUAL REPORT COVER IMAGE: Howmet is a global leader in advanced engineered solutions — such as these aero engine blades — providing differentiated technologies to enable lighter, more fuel-efficient aircraft and commercial vehicles to operate with a lower carbon footprint. 2020 ANNUAL REPORT THIS PAGE: Aero engine blade ring wwww.howmet.com Printed with permission of Honeywell International SHAREHOLDERSHAREHOLDER INFORMATION INFORMATION COMPANYCOMPANY NEWS NEWS DIRECTDIRECT DEPOSIT DEPOSIT OF DIVIDENDS OF DIVIDENDS Visit Visitwww.howmet.com www.howmet.com for Howmet for Howmet Aerospace’s Aerospace’s ShareholdersShareholders may mayhave have their their quarterly quarterly dividends dividends SecuritiesSecurities and Exchangeand Exchange Commission Commission filings, filings, quarterly quarterly depositeddeposited directly directly to their to their checking, checking, savings savings or money or money earningsearnings reports, reports, and otherand other Company Company news. news. marketmarket accounts accounts at any at financialany financial institution institution that that participatesparticipates in the in Automated the Automated Clearing Clearing House House system. system. CopiesCopies of the of Company’s the Company’s annual annual report, report, proxy proxy statement,statement, and Formsand Forms 10-K 10-Kand 10-Qand 10-Q may maybe requested be requested SHAREHOLDERSHAREHOLDER SERVICES SERVICES at noat cost no costby visiting by visiting www.howmet.com/investors, www.howmet.com/investors, by by ShareholdersShareholders with withquestions questions on account on account balances, balances, writingwriting to Howmet to Howmet Aerospace, Aerospace, Attention: Attention: Corporate Corporate dividenddividend checks, checks, reinvestment, reinvestment, direct direct deposit, deposit, address address Secretary’sSecretary’s Office, Office, 201 Isabella201 Isabella Street, Street, Suite Suite 200, 200, changes,changes, lost orlost misplaced or misplaced stock stock certificates, certificates, or other or other Aero engineAero engine component component AerospaceAerospace forgings forgings Pittsburgh,Pittsburgh, PA 15212, PA 15212, or by or emailing by emailing shareholdershareholder account account matters matters may maycontact contact Howmet Howmet [email protected]@howmet.com. Aerospace’sAerospace’s stock stock transfer transfer agent, agent, registrar, registrar, and and dividend-disbursingdividend-disbursing agent, agent, Computershare: Computershare: INVESTORINVESTOR INFORMATION INFORMATION SecuritiesSecurities analysts analysts and investorsand investors may maywrite write to Howmet to Howmet By telephone:By telephone: Aerospace,Aerospace, Attention: Attention: Investor Investor Relations, Relations, 201 Isabella201 Isabella 1.800.851.96771.800.851.9677 (in the (in United the United States States and Canada)and Canada) Street,Street, Suite Suite 200, 200,Pittsburgh, Pittsburgh, PA 15212, PA 15212, 1.201.680.65781.201.680.6578 (all other (all other callers) callers) call 1.412.553.1950,call 1.412.553.1950, or email or email 1.800.231.54691.800.231.5469 (Telecommunications (Telecommunications Device Device for the for the [email protected]@howmet.com. Deaf:Deaf: TDD) TDD) OTHEROTHER PUBLICATIONS PUBLICATIONS On theOn web:the web: For moreFor more information information on Howmet on Howmet Aerospace Aerospace www.computershare.comwww.computershare.com FoundationFoundation and Howmetand Howmet Aerospace Aerospace community community investments,investments, visit www.howmet.com/foundation.visit www.howmet.com/foundation. By regularBy regular mail: mail: ComputershareComputershare Investor Investor Services Services For HowmetFor Howmet Aerospace’s Aerospace’s Environmental, Environmental, Social Social and and P.O. P.O.Box 505000Box 505000 GovernanceGovernance Report, Report, visit visit Louisville,Louisville, KY 40233-5000 KY 40233-5000 www.howmet.com/esg-report/,www.howmet.com/esg-report/, write write to Howmet to Howmet Aerospace,Aerospace, Attention: Attention: Corporate Corporate Sustainability, Sustainability, 201 201 By overnightBy overnight correspondence: correspondence: IsabellaIsabella Street, Street, Suite Suite 200, 200,Pittsburgh, Pittsburgh, PA 15212, PA 15212, or email or email ComputershareComputershare Investor Investor Services Services [email protected]@howmet.com. 462 South462 South 4th Street 4th Street ForgedForged wheel wheel TitaniumTitanium aero seataero track seat track SuiteSuite 1600 1600 DIVIDENDSDIVIDENDS Louisville,Louisville, KY 40202 KY 40202 CashCash dividend dividend decisions decisions are made are made by Howmet by Howmet Aerospace’sAerospace’s Board Board of Directors, of Directors, and areand reviewed are reviewed on a on a For shareholderFor shareholder questions questions on other on other matters matters related related to to regularregular basis. basis. HowmetHowmet Aerospace, Aerospace, write write to: to: HowmetHowmet Aerospace, Aerospace, Attention: Attention: Corporate Corporate Secretary’s Secretary’s DIVIDENDDIVIDEND REINVESTMENT REINVESTMENT Office,Office, 201 Isabella201 Isabella Street, Street, Suite Suite 200, 200,Pittsburgh, Pittsburgh, PA PA HowmetHowmet Aerospace’s Aerospace’s transfer transfer agent agent sponsors sponsors and and 15212,15212, call 1.412.553.1940call 1.412.553.1940 administersadministers a Dividend a Dividend Reinvestment Reinvestment and Stockand Stock or emailor email [email protected]. [email protected]. PurchasePurchase Plan Planfor shareholders for shareholders of Howmet of Howmet Aerospace’s Aerospace’s commoncommon stock stock and $3.75and $3.75 cumulative cumulative preferred preferred stock. stock. STOCKSTOCK LISTING LISTING CommonCommon Stock Stock The planThe planallows allows shareholders shareholders to reinvest to reinvest all or all part or partof of NewNew York York Stock Stock Exchange Exchange | Ticker | Ticker symbol: symbol: HWM HWM theirtheir quarterly quarterly dividends dividends in shares in shares of Howmet of Howmet AerospaceAerospace common common stock. stock. Shareholders Shareholders may mayalso also $3.75$3.75 Cumulative Cumulative Preferred Preferred Stock Stock (Class (Class A) A) purchasepurchase additional additional shares shares of common of common stock stock under under the the NYSENYSE American American | Ticker | Ticker symbol: symbol: HWM HWM PR PR plan planwith withcash cash contributions. contributions. AerospaceAerospace and industrial and industrial fasteners fasteners HOWMET AEROSPACE | 2020 ANNUAL REPORT | 01 2020 OVERVIEW 2020 TOTAL REVENUE $5.3 Billion REVENUE BY MARKET COMMERCIAL AEROSPACE 50% Howmet Aerospace is a leading global DEFENSE provider of advanced engineered solutions AEROSPACE for the aerospace and transportation industries. 19% Headquartered in Pittsburgh, Pennsylvania, the Company’s primary businesses focus on jet engine components, aerospace fastening COMMERCIAL systems and titanium structural parts TRANSPORTATION necessary for mission-critical performance and efficiency in aerospace and defense 16% applications, as well as forged wheels for commercial transportation. INDUSTRIAL With nearly 1,150 granted and pending AND OTHER patents, the Company’s differentiated technologies enable lighter, more fuel-efficient aircraft to operate with a lower 15% carbon footprint. GLOBAL PROFILE For more information: www.howmet.com 19,700 EMPLOYEES 61 LOCATIONS* 20 COUNTRIES * Not including 20 locations that serve as sales and administrative offices, distribution centers or warehouses. FOLLOW @HOWMETAEROSPACE LINKED IN | TWITTER | FACEBOOK | INSTAGRAM | YOUTUBE 02 2020 Howmet Aerospace Our strict and disciplined approach to costs and Shareholder Letter spending also enabled us to generate Adjusted Free Cash Flow of $487 million from second quarter 2020 through fourth quarter 2020. Full year Adjusted Free Cash Flow including pre-separation allocations as a percentage of adjusted income from continuing operations was approximately 115 percent, well above our outlook of approximately 90 percent. We ended the year in a strong liquidity position with approximately $1.6 billion of cash. On January 15, 2021, we redeemed early the outstanding $361 million notes due 2021. Our $1 billion revolving credit facility remains undrawn and our next significant debt maturity is not until October 2024. This positions us well as opportunities for cash deployment emerge. April 15, 2021 Since our April 1, 2020 separation from Arconic Corporation, our stock rose 116 percent in 2020, as compared to the Standard & Poor’s (S&P) 500 Index Dear Shareholder, increase of 52 percent and the S&P’s Aerospace & Defense exchange-traded funds increase of 61 Howmet Aerospace was launched on April 1, 2020, without a Lost Workday incident. This is a percent over the same time frame. after separating and spinning out Arconic tremendous testament to the dedication and focus Corporation. Howmet is a global leader in advanced of our talented workforce. Despite the impact of the pandemic on the engineered solutions, providing differentiated commercial aerospace industry’s foreseeable technologies to enable lighter, more fuel-efficient The operating and fiscal discipline we have built into future, we remain confident in the value of Howmet aircraft and commercial vehicles to operate with a the culture of Howmet allowed us to offset a Aerospace. We have spent the last year working
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