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Segment Information
 9 Months Ended
Sep. 30, 2024
Segment Reporting [Abstract]  
Segment Information Segment Information
Howmet is a global leader in lightweight metals engineering and manufacturing. Howmet’s innovative, multi-material products, which include nickel, titanium, aluminum, and cobalt, are used worldwide in the aerospace (commercial and defense), commercial transportation, and industrial and other markets. Segment performance under Howmet’s management reporting system is evaluated based on a number of factors; however, the primary measure of performance is Segment Adjusted EBITDA. Howmet’s definition of Segment Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) is net margin plus an add-back for depreciation and amortization. Net margin is equivalent to Sales minus the following items: Cost of goods sold; Selling, general administrative, and other expenses; Research and development expenses; and Provision for depreciation and amortization. Special items, including Restructuring and other (credits) charges, are excluded from net margin and Segment Adjusted EBITDA. Segment Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Differences between the total segment and consolidated totals are in Corporate.
Howmet’s operations consist of four worldwide reportable segments as follows:
Engine Products
Engine Products produces investment castings, including airfoils, and seamless rolled rings primarily for aircraft engines and industrial gas turbine applications. Engine Products produces rotating parts as well as structural parts.
Fastening Systems
Fastening Systems produces aerospace fastening systems, as well as commercial transportation, industrial and other fasteners. The business’s high-tech, multi-material fastening systems are found nose to tail on aircraft and aero engines. Fastening Systems’ products are also critical components of commercial transportation vehicles, and construction, industrial, and renewable energy equipment.
Engineered Structures
Engineered Structures produces titanium ingots and mill products for aerospace and defense applications and is vertically integrated to produce titanium forgings, 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.
Forged Wheels
Forged Wheels provides forged aluminum wheels and related products for heavy-duty trucks and the commercial transportation market.
The operating results of the Company’s reportable segments were as follows:
Engine ProductsFastening SystemsEngineered StructuresForged WheelsTotal
Segment
Third quarter ended September 30, 2024
Sales:
Third-party sales$945 $392 $253 $245 $1,835 
Inter-segment sales3 — 3 — 6 
Total sales$948 $392 $256 $245 $1,841 
Profit and loss:
Provision for depreciation and amortization$34 $12 $10 $10 $66 
Segment Adjusted EBITDA307 102 38 64 511 
Restructuring and other charges1 1 1 1 4 
Capital expenditures55 5 5 14 79 
Third quarter ended September 30, 2023
Sales:
Third-party sales$798 $348 $227 $285 $1,658 
Inter-segment sales5 — — — 5 
Total sales$803 $348 $227 $285 $1,663 
Profit and loss:
Provision for depreciation and amortization$33 $12 $12 $10 $67 
Segment Adjusted EBITDA219 76 30 77 402 
Restructuring and other charges— 1 1 — 2 
Capital expenditures30 9 6 9 54 
Engine ProductsFastening SystemsEngineered StructuresForged WheelsTotal
Segment
Nine months ended September 30, 2024
Sales:
Third-party sales$2,763 $1,175 $790 $811 $5,539 
Inter-segment sales6 — 7 — 13 
Total sales$2,769 $1,175 $797 $811 $5,552 
Profit and loss:
Provision for depreciation and amortization$100 $36 $32 $30 $198 
Segment Adjusted EBITDA848 295 115 221 1,479 
Restructuring and other charges— 3 15 1 19 
Capital expenditures143 17 16 35 211 
Nine months ended September 30, 2023
Sales:
Third-party sales$2,414 $989 $634 $872 $4,909 
Inter-segment sales12 — 1 — 13 
Total sales$2,426 $989 $635 $872 $4,922 
Profit and loss:
Provision for depreciation and amortization$97 $35 $36 $29 $197 
Segment Adjusted EBITDA654 198 80 237 1,169 
Restructuring and other (credits) charges(1)1 7 — 7 
Capital expenditures84 23 21 25 153 
The following table reconciles Total Segment Adjusted EBITDA to Income before income taxes. Differences between the total segment and consolidated totals are in Corporate.
Third quarter endedNine months ended
September 30,September 30,
2024202320242023
Total Segment Adjusted EBITDA$511 $402 $1,479 $1,169 
Segment provision for depreciation and amortization(66)(67)(198)(197)
Unallocated amounts:
Restructuring and other credits (charges)1 (4)(21)(8)
Corporate expense(25)(24)(72)(87)
Operating income$421 $307 $1,188 $877 
Loss on debt redemption(6)— (6)(1)
Interest expense, net(44)(54)(142)(166)
Other expense, net(17)(11)(49)(5)
Income before income taxes$354 $242 $991 $705 
The following table reconciles total segment capital expenditures with Capital expenditures as presented in the Statement of Consolidated Cash Flows.
Third quarter endedNine months ended
September 30,September 30,
2024202320242023
Total segment capital expenditures$79 $54 $211 $153 
Corporate3 5 8 11 
Capital expenditures$82 $59 $219 $164 
The following table disaggregates segment revenue by major market served. Differences between the total segment and consolidated totals are in Corporate.
Engine ProductsFastening SystemsEngineered StructuresForged WheelsTotal
Segment
Third quarter ended September 30, 2024
Aerospace - Commercial$534 $245 $183 $— $962 
Aerospace - Defense 189 43 57 — 289 
Commercial Transportation— 65 — 245 310 
Industrial and Other222 39 13 — 274 
Total end-market revenue$945 $392 $253 $245 $1,835 
Third quarter ended September 30, 2023
Aerospace - Commercial$446 $209 $165 $— $820 
Aerospace - Defense 165 41 45 — 251 
Commercial Transportation— 67 — 285 352 
Industrial and Other187 31 17 — 235 
Total end-market revenue$798 $348 $227 $285 $1,658 
Nine months ended September 30, 2024
Aerospace - Commercial$1,554 $740 $575 $— $2,869 
Aerospace - Defense 566 119 174 — 859 
Commercial Transportation— 199 — 811 1,010 
Industrial and Other643 117 41 — 801 
Total end-market revenue$2,763 $1,175 $790 $811 $5,539 
Nine months ended September 30, 2023
Aerospace - Commercial$1,324 $563 $458 $— $2,345 
Aerospace - Defense 502 131 131 — 764 
Commercial Transportation— 192 — 872 1,064 
Industrial and Other588 103 45 — 736 
Total end-market revenue$2,414 $989 $634 $872 $4,909 
The Company derived 67% and 63% of its revenue from the aerospace (commercial and defense) markets for the nine months ended September 30, 2024 and 2023, respectively.
On April 2, 2024, General Electric Company, one of our largest customers, completed the spin-off of its energy-focused business into GE Vernova, a new publicly traded company. Since then, General Electric Company operates as GE Aerospace. GE Aerospace and RTX Corporation each represented approximately 10% of the Company’s third-party sales in the nine months ended September 30, 2024. General Electric Company and RTX Corporation represented approximately 13% and 10%, respectively, of the Company’s third-party sales in the nine months ended September 30, 2023. These sales were primarily from the Engine Products segment.