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Segment Information
 6 Months Ended
Jun. 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 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
Second quarter ended June 30, 2024
Sales:
Third-party sales$933 $394 $275 $278 $1,880 
Inter-segment sales1 — 3 — 4 
Total sales$934 $394 $278 $278 $1,884 
Profit and loss:
Provision for depreciation and amortization$33 $13 $11 $10 $67 
Segment Adjusted EBITDA292 101 40 75 508 
Restructuring and other (credits) charges(1)2 14 — 15 
Capital expenditures33 5 5 9 52 
Second quarter ended June 30, 2023
Sales:
Third-party sales$821 $329 $200 $298 $1,648 
Inter-segment sales5 — 1 — 6 
Total sales$826 $329 $201 $298 $1,654 
Profit and loss:
Provision for depreciation and amortization$32 $12 $12 $10 $66 
Segment Adjusted EBITDA223 64 20 81 388 
Restructuring and other (credits) charges(1)— 5 — 4 
Capital expenditures21 5 5 7 38 
Engine ProductsFastening SystemsEngineered StructuresForged WheelsTotal
Segment
Six months ended June 30, 2024
Sales:
Third-party sales$1,818 $783 $537 $566 $3,704 
Inter-segment sales3 — 4 — 7 
Total sales$1,821 $783 $541 $566 $3,711 
Profit and loss:
Provision for depreciation and amortization$66 $24 $22 $20 $132 
Segment Adjusted EBITDA541 193 77 157 968 
Restructuring and other (credits) charges(1)2 14 — 15 
Capital expenditures88 12 11 21 132 
Six months ended June 30, 2023
Sales:
Third-party sales$1,616 $641 $407 $587 $3,251 
Inter-segment sales7 — 1 — 8 
Total sales$1,623 $641 $408 $587 $3,259 
Profit and loss:
Provision for depreciation and amortization$64 $23 $24 $19 $130 
Segment Adjusted EBITDA435 122 50 160 767 
Restructuring and other (credits) charges(1)— 6 — 5 
Capital expenditures54 14 15 16 99 
The following table reconciles Total Segment Adjusted EBITDA to Income before income taxes. Differences between the total segment and consolidated totals are in Corporate.
Second quarter endedSix months ended
June 30,June 30,
2024202320242023
Total Segment Adjusted EBITDA$508 $388 $968 $767 
Segment provision for depreciation and amortization(67)(66)(132)(130)
Unallocated amounts:
Restructuring and other charges(22)(3)(22)(4)
Corporate expense(21)(34)(47)(63)
Operating income$398 $285 $767 $570 
Loss on debt redemption— — — (1)
Interest expense, net(49)(55)(98)(112)
Other (expense) income, net(15)13 (32)6 
Income before income taxes$334 $243 $637 $463 
The following table reconciles total segment capital expenditures with Capital expenditures as presented in the Statement of Consolidated Cash Flows.
Second quarter endedSix months ended
June 30,June 30,
2024202320242023
Total segment capital expenditures$52 $38 $132 $99 
Corporate3 3 5 6 
Capital expenditures$55 $41 $137 $105 
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
Second quarter ended June 30, 2024
Aerospace - Commercial$528 $251 $200 $— $979 
Aerospace - Defense 192 37 61 — 290 
Commercial Transportation— 68 — 278 346 
Industrial and Other213 38 14 — 265 
Total end-market revenue$933 $394 $275 $278 $1,880 
Second quarter ended June 30, 2023
Aerospace - Commercial$446 $184 $141 $— $771 
Aerospace - Defense 174 46 42 — 262 
Commercial Transportation— 62 — 298 360 
Industrial and Other201 37 17 — 255 
Total end-market revenue$821 $329 $200 $298 $1,648 
Six months ended June 30, 2024
Aerospace - Commercial$1,020 $495 $392 $— $1,907 
Aerospace - Defense 377 76 117 — 570 
Commercial Transportation— 134 — 566 700 
Industrial and Other421 78 28 — 527 
Total end-market revenue$1,818 $783 $537 $566 $3,704 
Six months ended June 30, 2023
Aerospace - Commercial$878 $354 $293 $— $1,525 
Aerospace - Defense 337 90 86 — 513 
Commercial Transportation— 125 — 587 712 
Industrial and Other401 72 28 — 501 
Total end-market revenue$1,616 $641 $407 $587 $3,251 
The Company derived 67% and 63% of its revenue from the aerospace (commercial and defense) markets for the six months ended June 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 six months ended June 30, 2024. General Electric Company and RTX Corporation represented approximately 13% and 10%, respectively, of the Company’s third-party sales in the six months ended June 30, 2023. These sales were primarily from the Engine Products segment.