Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 01, 2022 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 1-3610 | |
Entity Registrant Name | HOWMET AEROSPACE INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 25-0317820 | |
Entity Address, Address Line One | 201 Isabella Street, Suite 200 | |
Entity Address, City or Town | Pittsburgh | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 15212-5872 | |
City Area Code | 412 | |
Local Phone Number | 553-1940 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 415,403,018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0000004281 | |
Current Fiscal Year End Date | --12-31 | |
Common stock | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Common Stock, par value $1.00 per share | |
Trading Symbol | HWM | |
Security Exchange Name | NYSE | |
Preferred stock | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | $3.75 Cumulative Preferred Stock, par value $100.00 per share | |
Trading Symbol | HWM PR | |
Security Exchange Name | NYSEAMER |
Statement of Consolidated Opera
Statement of Consolidated Operations (unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement [Abstract] | ||||
Sales | $ 1,393 | $ 1,195 | $ 2,717 | $ 2,404 |
Cost of goods sold (exclusive of expenses below) | 987 | 857 | 1,937 | 1,730 |
Selling, general administrative, and other expenses | 83 | 55 | 152 | 120 |
Research and development expenses | 9 | 4 | 16 | 9 |
Provision for depreciation and amortization | 67 | 67 | 133 | 135 |
Restructuring and other charges | 6 | 5 | 8 | 14 |
Operating income | 241 | 207 | 471 | 396 |
Loss on debt redemption | 2 | 23 | 2 | 23 |
Interest expense, net | 57 | 66 | 115 | 138 |
Other (income) expense, net | (1) | 8 | 0 | 12 |
Income before income taxes | 183 | 110 | 354 | 223 |
Provision for income taxes | 36 | 36 | 76 | 69 |
Net income | 147 | 74 | 278 | 154 |
Amounts Attributable to Howmet Aerospace Common Shareholders: | ||||
Net income | 147 | 74 | 277 | 153 |
Net income | $ 147 | $ 74 | $ 277 | $ 153 |
Earnings per share: | ||||
Basic (in usd per share) | $ 0.35 | $ 0.17 | $ 0.66 | $ 0.35 |
Diluted (in usd per share) | $ 0.35 | $ 0.17 | $ 0.66 | $ 0.35 |
Average Shares Outstanding: | ||||
Basic (in shares) | 417 | 432 | 418 | 433 |
Diluted (in shares) | 422 | 437 | 423 | 438 |
Statement of Consolidated Compr
Statement of Consolidated Comprehensive Income (unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 147 | $ 74 | $ 278 | $ 154 |
Other comprehensive income (loss), net of tax: | ||||
Change in unrecognized net actuarial loss and prior service cost related to pension and other postretirement benefits | 22 | 35 | 32 | 77 |
Foreign currency translation adjustments | (114) | 18 | (145) | (26) |
Net change in unrecognized (losses) gains on cash flow hedges | (36) | 4 | (16) | 8 |
Total Other comprehensive (loss) income, net of tax | (128) | 57 | (129) | 59 |
Comprehensive income | $ 19 | $ 131 | $ 149 | $ 213 |
Consolidated Balance Sheet (una
Consolidated Balance Sheet (unaudited) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 537 | $ 720 |
Receivables from customers, less allowances of $— in 2022 and 2021 | 501 | 367 |
Other receivables | 49 | 53 |
Inventories | 1,563 | 1,402 |
Prepaid expenses and other current assets | 187 | 195 |
Total current assets | 2,837 | 2,737 |
Properties, plants, and equipment, net | 2,340 | 2,467 |
Goodwill | 4,012 | 4,067 |
Deferred income taxes | 118 | 184 |
Intangibles, net | 534 | 549 |
Other noncurrent assets | 211 | 215 |
Total assets | 10,052 | 10,219 |
Current liabilities: | ||
Accounts payable, trade | 814 | 732 |
Accrued compensation and retirement costs | 198 | 198 |
Taxes, including income taxes | 58 | 61 |
Accrued interest payable | 75 | 74 |
Other current liabilities | 176 | 183 |
Short-term debt | 1 | 5 |
Total current liabilities | 1,322 | 1,253 |
Long-term debt, less amount due within one year | 4,169 | 4,227 |
Accrued pension benefits | 710 | 771 |
Accrued other postretirement benefits | 150 | 153 |
Other noncurrent liabilities and deferred credits | 280 | 307 |
Total liabilities | 6,631 | 6,711 |
Contingencies and commitments | ||
Howmet Aerospace shareholders’ equity: | ||
Preferred stock | 55 | 55 |
Common stock | 416 | 422 |
Additional capital | 4,079 | 4,291 |
Retained earnings | 863 | 603 |
Accumulated other comprehensive loss | (1,992) | (1,863) |
Total equity | 3,421 | 3,508 |
Total liabilities and equity | $ 10,052 | $ 10,219 |
Consolidated Balance Sheet (u_2
Consolidated Balance Sheet (unaudited) (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 0 | $ 0 |
Statement of Consolidated Cash
Statement of Consolidated Cash Flows (unaudited) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Operating activities | ||
Net income | $ 278 | $ 154 |
Adjustments to reconcile net income to cash provided from operations: | ||
Depreciation and amortization | 133 | 135 |
Deferred income taxes | 52 | 15 |
Restructuring and other charges | 8 | 14 |
Net realized and unrealized losses | 7 | 4 |
Net periodic pension cost | 11 | 9 |
Stock-based compensation | 29 | 14 |
Loss on debt redemption | (2) | (23) |
Other | 27 | 23 |
Changes in assets and liabilities, excluding effects of acquisitions, divestitures, and foreign currency translation adjustments: | ||
Increase in receivables | (169) | (231) |
(Increase) decrease in inventories | (191) | 19 |
Decrease in prepaid expenses and other current assets | 1 | 10 |
Increase in accounts payable, trade | 118 | 48 |
Decrease in accrued expenses | (40) | (93) |
Increase in taxes, including income taxes | 1 | 24 |
Pension contributions | (20) | (61) |
Increase in noncurrent assets | (1) | (4) |
Decrease in noncurrent liabilities | (33) | (24) |
Cash provided from operations | 213 | 79 |
Financing Activities | ||
Net change in short-term borrowings (original maturities of three months or less) | (4) | (1) |
Payments on debt (original maturities greater than three months) | (60) | (838) |
Debt issuance costs | 0 | (1) |
Premiums paid on early redemption of debt | (2) | (22) |
Repurchase of common stock | (235) | (200) |
Proceeds from exercise of employee stock options | 10 | 15 |
Dividends paid to shareholders | (18) | (1) |
Other | (22) | (20) |
Cash used for financing activities | (331) | (1,068) |
Investing Activities | ||
Capital expenditures | (106) | (91) |
Proceeds from the sale of assets and businesses | 42 | 8 |
Sale of debt securities | 0 | 5 |
Cash receipts from sold receivables | 0 | 172 |
Other | (1) | 0 |
Cash (used for) provided from investing activities | (65) | 94 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (1) | 0 |
Net change in cash, cash equivalents and restricted cash | (184) | (895) |
Cash, cash equivalents and restricted cash at beginning of period | 722 | 1,611 |
Cash, cash equivalents and restricted cash at end of period | $ 538 | $ 716 |
Statement of Changes in Consoli
Statement of Changes in Consolidated Equity (unaudited) - USD ($) $ in Millions | Total | Class A | Preferred stock | Common stock | Additional capital | Retained earnings | Retained earnings Class A | Accumulated other comprehensive loss |
Beginning balance at Dec. 31, 2020 | $ 3,577 | $ 55 | $ 433 | $ 4,668 | $ 364 | $ (1,943) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 154 | 154 | ||||||
Other comprehensive income (loss) | 59 | 59 | ||||||
Cash dividends declared: | ||||||||
Preferred dividends declared, value | $ (1) | $ (1) | ||||||
Repurchase and retirement of common stock | (200) | (6) | (194) | |||||
Stock-based compensation | 14 | 14 | ||||||
Common stock issued: compensation plans | (5) | 2 | (7) | |||||
Ending balance at Jun. 30, 2021 | 3,598 | 55 | 429 | 4,481 | 517 | (1,884) | ||
Beginning balance at Mar. 31, 2021 | 3,662 | 55 | 434 | 4,671 | 443 | (1,941) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 74 | 74 | ||||||
Other comprehensive income (loss) | 57 | 57 | ||||||
Cash dividends declared: | ||||||||
Repurchase and retirement of common stock | (200) | (6) | (194) | |||||
Stock-based compensation | 8 | 8 | ||||||
Common stock issued: compensation plans | (3) | 1 | (4) | |||||
Ending balance at Jun. 30, 2021 | 3,598 | 55 | 429 | 4,481 | 517 | (1,884) | ||
Beginning balance at Dec. 31, 2021 | 3,508 | 55 | 422 | 4,291 | 603 | (1,863) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 278 | 278 | ||||||
Other comprehensive income (loss) | (129) | (129) | ||||||
Cash dividends declared: | ||||||||
Preferred dividends declared, value | $ (1) | $ (1) | ||||||
Common share, value | (17) | (17) | ||||||
Repurchase and retirement of common stock | (235) | (7) | (228) | |||||
Stock-based compensation | 29 | 29 | ||||||
Common stock issued: compensation plans | (12) | 1 | (13) | |||||
Ending balance at Jun. 30, 2022 | 3,421 | 55 | 416 | 4,079 | 863 | (1,992) | ||
Beginning balance at Mar. 31, 2022 | 3,457 | 55 | 418 | 4,123 | 725 | (1,864) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 147 | 147 | ||||||
Other comprehensive income (loss) | (128) | (128) | ||||||
Cash dividends declared: | ||||||||
Common share, value | (9) | (9) | ||||||
Repurchase and retirement of common stock | (60) | (2) | (58) | |||||
Stock-based compensation | 18 | 18 | ||||||
Common stock issued: compensation plans | (4) | (4) | ||||||
Ending balance at Jun. 30, 2022 | $ 3,421 | $ 55 | $ 416 | $ 4,079 | $ 863 | $ (1,992) |
Statement of Changes in Conso_2
Statement of Changes in Consolidated Equity (unaudited) (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | |
Common stock, dividends per share (in usd per share) | $ 0.02 | $ 0.04 | |
Class A | |||
Preferred, dividends per share (in usd per share) | $ 1.8750 | $ 1.8750 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The interim Consolidated Financial Statements of Howmet Aerospace Inc. and subsidiaries (“Howmet” or the “Company” or “we” or “our”) are unaudited. These Consolidated Financial Statements include all adjustments, consisting only of normal recurring adjustments, considered necessary by management to fairly state the Company’s results of operations, financial position, and cash flows. The results reported in these Consolidated Financial Statements are not necessarily indicative of the results that may be expected for the entire year. The 2021 year-end balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). This Form 10-Q report should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2021, which includes all disclosures required by GAAP. Certain amounts in previously issued financial statements were reclassified to conform to the current period presentation. In the second quarter of 2022, the Company derived approximately 45% of its revenue from products sold to the commercial aerospace market which is substantially less than the pre-pandemic 2019 annual rate of approximately 60%. Due to the global COVID-19 pandemic and its impact on the commercial aerospace industry to date, there has been a decrease in domestic and international air travel, which in turn has adversely affected demand for narrow-body and wide-body aircraft. Although domestic air travel is increasing, it still is below pre-pandemic 2019 levels on an average monthly basis. International travel also continues to be lower than pre-pandemic 2019 levels. Narrow-body demand is returning faster than wide-body demand and the commercial wide-body aircraft market is taking longer to recover, which is creating a shift in our product mix compared to pre-pandemic conditions. In addition to the impact from the pandemic, the timing and level of future aircraft builds by original equipment manufacturers are subject to changes and uncertainties, such as declines in Boeing 787 production rates due to delays in its recertification, which may cause our future results to differ from prior periods due to changes in product mix in certain segments. The preparation of the Consolidated Financial Statements of the Company in conformity with GAAP requires management to make certain judgments, estimates, and assumptions. These estimates are based on historical experience and, in some cases, assumptions based on current and future market experience, including considerations relating to the impact of COVID-19 and changes in the aerospace industry as a result of the pandemic. The impact of these changes is rapidly changing and of unknown duration and macroeconomic impact and, as a result, these considerations remain highly uncertain. Management has made its best estimates using all relevant information available at the time, but it is possible that our estimates will differ from our actual results and affect the Consolidated Financial Statements in future periods and potentially require adverse adjustments to the recoverability of goodwill, intangible and long-lived assets, the realizability of deferred tax assets and other judgments and estimations and assumptions that may be impacted by COVID-19 and changes in the aerospace industry. |
Recently Adopted and Recently I
Recently Adopted and Recently Issued Accounting Guidance | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Recently Adopted and Recently Issued Accounting Guidance | Recently Adopted and Recently Issued Accounting Guidance Adopted On January 1, 2021, the Company adopted changes issued by the Financial Accounting Standards Board (“FASB”) that were intended to simplify various aspects of accounting for income taxes by eliminating certain exceptions contained in existing guidance and amending other guidance to simplify several other income tax accounting matters. The adoption of this new guidance did not have a material impact on the Consolidated Financial Statements. Issued In March 2020, the FASB issued amendments that provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform, if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference London Inter-bank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. Based upon the provisions of our agreements that were amended to date, management does not believe that the impact of these changes will have a material impact on the Consolidated Financial Statements. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2022 | |
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. Prior to the first quarter of 2022, the Company used Segment operating profit as its primary measure of performance. However, the Company’s Chief Executive Officer believes that Segment Adjusted EBITDA is now a better representation of its business because it provides additional information with respect to the Company’s operating performance and the Company’s ability to meet its financial obligations. 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 also 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 turbines. 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, automobiles, construction and industrial equipment, and renewable energy sectors. 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 Products Fastening Systems Engineered Structures Forged Wheels Total Second quarter ended June 30, 2022 Sales: Third-party sales $ 652 $ 277 $ 185 $ 279 $ 1,393 Inter-segment sales 1 — 1 — 2 Total sales $ 653 $ 277 $ 186 $ 279 $ 1,395 Profit and loss: Provision for depreciation and amortization $ 31 $ 11 $ 12 $ 10 $ 64 Segment Adjusted EBITDA 179 56 26 75 336 Restructuring and other charges 4 — 1 — 5 Capital expenditures 24 8 2 5 39 Second quarter ended June 30, 2021 Sales: Third-party sales $ 544 $ 262 $ 160 $ 229 $ 1,195 Inter-segment sales 1 — 2 — 3 Total sales $ 545 $ 262 $ 162 $ 229 $ 1,198 Profit and loss: Provision for depreciation and amortization $ 30 $ 13 $ 13 $ 9 $ 65 Segment Adjusted EBITDA 130 63 24 70 287 Restructuring and other charges 5 3 — — 8 Capital expenditures 16 9 5 13 43 Engine Products Fastening Systems Engineered Structures Forged Wheels Total Six months ended June 30, 2022 Sales: Third-party sales $ 1,283 $ 541 $ 367 $ 526 $ 2,717 Inter-segment sales 2 — 2 — 4 Total sales $ 1,285 $ 541 $ 369 $ 526 $ 2,721 Profit and loss: Provision for depreciation and amortization $ 62 $ 23 $ 24 $ 20 $ 129 Segment Adjusted EBITDA 352 112 49 142 655 Restructuring and other charges (credits) 7 (3) 3 — 7 Capital expenditures 51 23 9 14 97 Six months ended June 30, 2021 Sales: Third-party sales $ 1,078 $ 534 $ 336 $ 456 $ 2,404 Inter-segment sales 2 — 3 — 5 Total sales $ 1,080 $ 534 $ 339 $ 456 $ 2,409 Profit and loss: Provision for depreciation and amortization $ 61 $ 25 $ 25 $ 19 $ 130 Segment Adjusted EBITDA 262 120 46 150 578 Restructuring and other charges 10 5 1 — 16 Capital expenditures 27 14 10 22 73 The following table reconciles Total Segment Adjusted EBITDA to Income before income taxes: Second quarter ended Six months ended June 30, June 30, 2022 2021 2022 2021 Total Segment Adjusted EBITDA $ 336 $ 287 $ 655 $ 578 Segment provision for depreciation and amortization (64) (65) (129) (130) Unallocated amounts: Restructuring and other charges (6) (5) (8) (14) Corporate expense (25) (10) (47) (38) Operating income $ 241 $ 207 $ 471 $ 396 Loss on debt redemption (2) (23) (2) (23) Interest expense, net (57) (66) (115) (138) Other income (expense), net 1 (8) — (12) Income before income taxes $ 183 $ 110 $ 354 $ 223 Differences between the total segment and consolidated totals are in Corporate. The following table reconciles total segment capital expenditures with Capital expenditures as presented in the Statement of Consolidated Cash Flows: Second quarter ended Six months ended June 30, June 30, 2022 2021 2022 2021 Total segment capital expenditures $ 39 $ 43 $ 97 $ 73 Corporate 5 (7) 9 18 Capital expenditures $ 44 $ 36 $ 106 $ 91 The following table disaggregates segment revenue by major market served. Differences between the total segment and consolidated totals are in Corporate. Engine Products Fastening Systems Engineered Structures Forged Wheels Total Second quarter ended June 30, 2022 Aerospace - Commercial $ 362 $ 155 $ 108 $ — $ 625 Aerospace - Defense 123 37 63 — 223 Commercial Transportation — 53 — 279 332 Industrial and Other 167 32 14 — 213 Total end-market revenue $ 652 $ 277 $ 185 $ 279 $ 1,393 Second quarter ended June 30, 2021 Aerospace - Commercial $ 260 $ 129 $ 79 $ — $ 468 Aerospace - Defense 121 41 64 — 226 Commercial Transportation — 49 — 229 278 Industrial and Other 163 43 17 — 223 Total end-market revenue $ 544 $ 262 $ 160 $ 229 $ 1,195 Six months ended June 30, 2022 Aerospace - Commercial $ 691 $ 303 $ 217 $ — $ 1,211 Aerospace - Defense 260 69 120 — 449 Commercial Transportation — 106 — 526 632 Industrial and Other 332 63 30 — 425 Total end-market revenue $ 1,283 $ 541 $ 367 $ 526 $ 2,717 Six months ended June 30, 2021 Aerospace - Commercial $ 487 $ 277 $ 159 $ — $ 923 Aerospace - Defense 272 83 141 — 496 Commercial Transportation — 95 — 456 551 Industrial and Other 319 79 36 — 434 Total end-market revenue $ 1,078 $ 534 $ 336 $ 456 $ 2,404 The Company derive d 61% and 59% of its revenue from the aerospace market for the six months ended June 30, 2022 and 2021, respectively. General Electric Company represented approximately 13% and 12% of the Company’s third-party sales for the six months ended June 30, 2022 and 2021 , respectively, primarily from Engine Products. |
Restructuring and Other Charges
Restructuring and Other Charges | 6 Months Ended |
Jun. 30, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Charges | Restructuring and Other Charges Second quarter ended Six months ended June 30, June 30, 2022 2021 2022 2021 Layoff costs $ — $ 2 $ — $ 2 Reversals of previously recorded layoff reserves — (2) (1) (1) Pension and Other post-retirement benefits - net settlements ( E ) 3 3 4 6 Non-cash asset impairments — 4 — 4 Net loss related to divestitures of assets and businesses ( P ) — — — 4 Other 3 (2) 5 (1) Restructuring and other charges $ 6 $ 5 $ 8 $ 14 charges for U.S. pension plan settlements of $3 and exit related costs, including accelerated depreciation, of $3. In the six months ended June 30, 2022, the Company recorded Restructuring and other charges of $8, which were primarily due to exit related costs, including accelerated depreciation, of $5 and charges for U.S. pension plan settlements of $4, partially offset by a reversal of $1 for a layoff reserve related to a prior period. In the second quarter and six months ended June 30, 2021, the Company recorded Restructuring and other charges of $5 and $14, respectively, which was primarily due to charges for pension plan settlements and exit related costs. Layoff costs Other exit costs Total Reserve balances at December 31, 2021 $ 17 $ 2 $ 19 Cash payments (8) (4) (12) Restructuring charges 3 5 8 Other (1) (4) (1) (5) Reserve balances at June 30, 2022 $ 8 $ 2 $ 10 (1) In the six months ended June 30, 2022, Other for layoff costs included a $4 charge for U.S. pension plan settlements and Other exit costs included a $1 charge for accelerated depreciation. The majority of the layoff cost and other exit cost reserves is expected to be paid in cash during 2022 and 2023, with small amounts to be paid through 2024. |
Pension and Other Postretiremen
Pension and Other Postretirement Benefits | 6 Months Ended |
Jun. 30, 2022 | |
Retirement Benefits [Abstract] | |
Pension and Other Postretirement Benefits | Pension and Other Postretirement Benefits The components of net periodic cost (benefit) were as follows: Second quarter ended Six months ended June 30, June 30, 2022 2021 2022 2021 Pension benefits Service cost $ 1 $ 1 $ 2 $ 2 Interest cost 13 12 25 24 Expected return on plan assets (21) (23) (41) (46) Recognized net actuarial loss 12 15 25 29 Settlements 3 3 4 6 Net periodic cost (1) $ 8 $ 8 $ 15 $ 15 Other postretirement benefits Service cost $ 1 $ 1 $ 1 $ 1 Interest cost 1 2 2 3 Recognized net actuarial loss 1 — 1 — Amortization of prior service benefit (3) (3) (5) (4) Net periodic benefit (1) $ — $ — $ (1) $ — (1) Service cost was included within Cost of goods sold, Selling, general administrative, and other expenses, and Research and development expenses; settlements were included in Restructuring and other charges; and all other cost components were recorded in Other (income) expense, net in the Statement of Consolidated Operations. Pension benefits The Company applied settlement accounting to certain U.S. pension plans due to lump sum payments made to participants, which resulted in settlement charges of $3 and $4 in the second quarter and six months ended June 30, 2022, respectively, and $3 and $6 in the second quarter and six months ended June 30, 2021, respectively, that were recorded in Restructuring and other charges in the Statement of Consolidated Operations. On March 11, 2021, the American Rescue Plan Act of 2021 (“ARPA 2021”) was signed into law in the United States. ARPA 2021, in part, provides temporary relief for employers who sponsor defined benefit pension plans related to funding contributions under the Employee Retirement Income Security Act of 1974. For the second quarter and six months ended June 30, 2022, Howmet’s combined pension contributions and other postretirement benefit payments were approximately $12 and $25, respectively. For the second quarter and six months ended June 30, 2021, Howmet’s combined pension contributions and other postretirement benefit payments were approximately $36 and $69, respectively. Other postretirement benefits In the first quarter of 2021, the Company announced a plan administration change of certain of its Medicare-eligible prescription drug benefits to an Employer Group Waiver Plan with a wrap-around secondary plan effective July 1, 2021. The administration change is expected to reduce costs to the Company through the usage of Medicare Part D and drug manufacturer subsidies. Due to this amendment, along with the associated plan remeasurements, the Company recorded a decrease to its Accrued other postretirement benefits liability of $39, which was offset in Accumulated other comprehensive loss in the Consolidated Balance Sheet. |
Other (Income) Expense, Net
Other (Income) Expense, Net | 6 Months Ended |
Jun. 30, 2022 | |
Other Income and Expenses [Abstract] | |
Other (Income) Expense, Net | Other (Income) Expense, Net Second quarter ended Six months ended June 30, June 30, 2022 2021 2022 2021 Non-service related net periodic benefit cost $ 3 $ 3 $ 7 $ 6 Interest income (1) (1) (1) (1) Foreign currency (gains) losses, net (1) 1 (4) 3 Net realized and unrealized losses 4 1 7 4 Deferred compensation (6) 4 (9) 6 Other, net — — — (6) Other (income) expense, net $ (1) $ 8 $ — $ 12 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s year-to-date tax provision is comprised of the most recent estimated annual effective tax rate applied to year-to-date pre-tax ordinary income. The tax impacts of unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, are recorded discretely in the interim period in which they occur. In addition, the tax provision is adjusted for the interim period impact of non-benefited pre-tax losses. The estimated annual effective tax rate, before discrete items, applied to ordinary income was 23.9% in both the second quarter and six months ended June 30, 2022 and 29.1% in both the second quarter and six months ended June 30, 2021. The 2022 and 2021 rates were higher than the U.S. federal statutory rate of 21% primarily due to additional estimated U.S. tax on Global Intangible Low-Taxed Income (“GILTI”) and other foreign earnings, incremental state tax and foreign taxes on earnings also subject to U.S. federal income tax, and nondeductible expenses. For the second quarter of 2022 and 2021, the tax rate including discrete items was 19.7% and 32.7%, respectively. For the second quarter of 2022, the Company recorded a discrete tax benefit of $7 attributable to a $6 benefit to release a valuation allowance related to an interest carryforward tax attribute in the U.K. and a net benefit of $1 for other small items. For the second quarter of 2021, the Company recorded a discrete tax charge of $4 attributable to a $2 charge for a U.K. tax rate change and a net charge of $2 for other small items. For the six months ended June 30, 2022 and 2021, the tax rate including discrete items was 21.5% and 30.9%, respectively. For the six months ended June 30, 2022, the Company recorded a discrete net tax benefit of $9 attributable to a $6 benefit to release a valuation allowance related to an interest carryforward tax attribute in the U.K., a $5 excess benefit for stock compensation and a net charge of $2 for other small items. For the six months ended June 30, 2021, the Company recorded a discrete tax charge of $3 attributable to a $2 charge for a U.K. tax rate change and a net charge of $1 for other small items. The tax provision was comprised of the following: Second quarter ended Six months ended June 30, June 30, 2022 2021 2022 2021 Pre-tax income at estimated annual effective income tax rate before discrete items $ 44 $ 32 $ 85 $ 65 Impact of change in estimated annual effective tax rate on previous quarter’s pre-tax income (1) (1) — — Interim period treatment of operational losses in foreign jurisdictions for which no tax benefit is recognized — 1 — 1 Other discrete items (7) 4 (9) 3 Provision for income taxes $ 36 $ 36 $ 76 $ 69 |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share (“EPS”) amounts are computed by dividing earnings, after the deduction of preferred stock dividends declared, by the average number of common shares outstanding. Diluted EPS amounts assume the issuance of common stock for all potentially dilutive share equivalents outstanding. The information used to compute basic and diluted EPS attributable to Howmet common shareholders was as follows (shares in millions): Second quarter ended Six months ended June 30, June 30, 2022 2021 2022 2021 Net income attributable to common shareholders $ 147 $ 74 $ 278 $ 154 Less: preferred stock dividends declared — — 1 1 Net income available to Howmet Aerospace common shareholders - basic and diluted $ 147 $ 74 $ 277 $ 153 Average shares outstanding - basic 417 432 418 433 Effect of dilutive securities: Stock options — 1 — 1 Stock and performance awards 5 4 5 4 Average shares outstanding - diluted 422 437 423 438 Common stock outstanding at June 30, 2022 and 2021 was approximately 416 million and 429 million, respectively. On August 18, 2021, the Company announced that its Board of Directors authorized a share repurchase program of up to $1,500 of the Company's outstanding common stock. In the quarter ended June 30, 2022, the Company repurchased approximately 2 million shares of its common stock at an average price of $33.89 per share (excluding commissions cost) for $60 in cash. For the six months ended June 30, 2022, the Company repurchased approximately 7 million shares for $235 in cash. All of the shares repurchased have been retired. After giving effect to the share repurchases made through June 30, 2022, approximately $1,112 Board authorization remains available. Under the Company’s share repurchase programs (the “Share Repurchase Programs”), the Company may repurchase shares 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 and/or accelerated share repurchase agreements, or other derivative transactions. There is no stated expiration for the Share Repurchase Programs. Under its Share Repurchase Programs, the Company may repurchase shares from time to time, in amounts, at prices, and at such times as the Company deems appropriate, subject to market conditions, legal requirements and other considerations, including limits under its Five-Year Revolving Credit Agreement (the “Credit Agreement”) (see Note N ). The Company is not obligated to repurchase any specific number of shares or to do so at any particular time, and the Share Repurchase Programs may be suspended, modified or terminated at any time without prior notice. The approximately 15 million decrease in average shares outstanding (basic) for the second quarter of 2022 compared to the second quarter of 2021 was primarily due to the approximately 20 million shares repurchased between July 1, 2021 and June 30, 2022. As average shares outstanding are used in the calculation for both basic and diluted EPS, the full impact of share repurchases was not realized in EPS in the second quarter and six months ended June 30, 2022 as share repurchases occurred at varying points during the quarter. In July 2022, the Company repurchased approximately 1 million shares of its common stock under the Share Repurchase Programs at an average price of $32.22 per share (excluding commissions cost) for approximately $30 in cash. After the share repurchases made through July 31, 2022, approximately $1,082 remains authorized for common stock share repurchases. There were no stock options shares excluded from the calculation of average shares outstanding – diluted for the second quarter and six months ended June 30, 2022 and 2021. Additionally, there were no anti-dilutive stock options shares as of June 30, 2022 and 2021. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 6 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The following table details the activity of the three components that comprise Accumulated other comprehensive loss: Second quarter ended Six months ended June 30, June 30, 2022 2021 2022 2021 Pension and other postretirement benefits ( E ) Balance at beginning of period $ (789) $ (938) $ (799) $ (980) Other comprehensive income: Unrecognized net actuarial gain and prior service cost/benefit 15 30 16 67 Tax expense (3) (7) (3) (15) Total Other comprehensive income before reclassifications, net of tax 12 23 13 52 Amortization of net actuarial loss and prior service cost (1) 13 15 25 31 Tax expense (2) (3) (3) (6) (6) Total amount reclassified from Accumulated other comprehensive loss, net of tax (3) 10 12 19 25 Total Other comprehensive income 22 35 32 77 Balance at end of period $ (767) $ (903) $ (767) $ (903) Foreign currency translation Balance at beginning of period $ (1,093) $ (1,010) $ (1,062) $ (966) Other comprehensive (loss) income (114) 18 (145) (26) Balance at end of period $ (1,207) $ (992) $ (1,207) $ (992) Cash flow hedges Balance at beginning of period $ 18 $ 7 $ (2) $ 3 Other comprehensive income (loss): Net change from periodic revaluations (36) 11 (11) 19 Tax income (expense) 8 (2) 2 (4) Total Other comprehensive (loss) income before reclassifications, net of tax (28) 9 (9) 15 Net amount reclassified to earnings (11) (5) (10) (8) Tax benefit (2) 3 — 3 1 Total amount reclassified from Accumulated other comprehensive loss, net of tax (3) (8) (5) (7) (7) Total Other comprehensive (loss) income (36) 4 (16) 8 Balance at end of period $ (18) $ 11 $ (18) $ 11 Accumulated other comprehensive loss $ (1,992) $ (1,884) $ (1,992) $ (1,884) (1) These amounts were recorded in Other (income) expense, net (see Note F ) and Restructuring and other charges (see Note D ) in the Statement of Consolidated Operations. (2) These amounts were included in Provision for income taxes (see Note G ) in the Statement of Consolidated Operations. (3) A positive amount indicates a corresponding charge to earnings and a negative amount indicates a corresponding benefit to earnings. |
Receivables
Receivables | 6 Months Ended |
Jun. 30, 2022 | |
Receivables [Abstract] | |
Receivables | Receivables Sale of Receivables Programs The Company maintains an accounts receivables securitization arrangement through a wholly-owned special purpose entity (“SPE”). The Company previously had a second arrangement which terminated on August 30, 2021. The net cash funding from the sale of accounts receivable was neither a use of cash nor a source of cash for any quarter of 2022 or 2021. The terminated arrangement was with financial institutions to sell certain customer receivables without recourse on a revolving basis. The Company had $22 net cash repayments ($41 in draws and $63 in repayments) for the six months ended June 30, 2021 in connection with this arrangement. The total cash receipts from both customer payments on sold receivables (which were cash receipts on the underlying trade receivables that had been previously sold) and net cash repayments under the program were presented as cash receipts from sold receivables within investing activities in the Statement of Consolidated Cash Flows for the six months ended June 30, 2021. The current accounts receivables securitization arrangement is one in which the Company, through an SPE, has a receivables purchase agreement (the “Receivables Purchase Agreement”) such that the SPE may sell certain receivables to financial institutions until the earlier of August 30, 2024 or a termination event. The Receivables Purchase Agreement also contains customary representations and warranties, as well as affirmative and negative covenants. Pursuant to the Receivables Purchase Agreement, the Company does not maintain effective control over the transferred receivables, and therefore accounts for these transfers as sales of receivables. This accounts receivable securitization arrangement totaled $325 at both June 30, 2022 and December 31, 2021 of which $250 was drawn as of both June 30, 2022 and December 31, 2021. As collateral against the sold receivables, the SPE maintains a certain level of unsold receivables, which were $130 and $79 at June 30, 2022 and December 31, 2021, respectively. The Company sold $437 and $901 of its receivables without recourse and received cash funding under this program during the second quarter and six months ended June 30, 2022, respectively, resulting in derecognition of the receivables from the Company’s Consolidated Balance Sheet. Costs associated with the sales of receivables are reflected in the Company’s Statement of Consolidated Operations for the periods in which the sales occur. Cash receipts from sold receivables under the Receivables Purchase Agreement are presented within operating activities in the Statement of Consolidated Cash Flows. Other Customer Receivable Sales In the second quarter and six months ended June 30, 2022, the Company sold $117 and $223, respectively, of certain customers’ receivables in exchange for cash ( $125 was outstanding from customers at June 30, 2022), the proceeds from which are presented in changes in receivables within operating activities in the Statement of Consolidated Cash Flows. In the second quarter and six months ended June 30, 2021, the Company sold $98 and $164, respectively, of certain customers’ receivables in exchange for cash, the proceeds from which are presented in changes in receivables within operating activities in the Statement of Consolidated Cash Flows. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories June 30, 2022 December 31, 2021 Finished goods $ 486 $ 478 Work-in-process 725 631 Purchased raw materials 307 256 Operating supplies 45 37 Total inventories $ 1,563 $ 1,402 |
Properties, Plants, and Equipme
Properties, Plants, and Equipment, net | 6 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Properties, Plants, and Equipment, net | Properties, Plants, and Equipment, net June 30, 2022 December 31, 2021 Land and land rights (1) $ 87 $ 91 Structures (1) 973 1,034 Machinery and equipment 3,905 3,932 4,965 5,057 Less: accumulated depreciation and amortization (1) 2,779 2,772 2,186 2,285 Construction work-in-progress 154 182 Properties, plants, and equipment, net $ 2,340 $ 2,467 (1) In the first quarter of 2022, the Company reached an agreement to sell the corporate headquarters in Pittsburgh, PA. The proceeds from the sale of the corporate headquarters were $44, excluding $3 of transaction costs, and the carrying value at the time of sale was $41. A loss of less than $1 was recorded in Restructuring and other charges in the Statement of Consolidated Operations upon finalization of the sale in the second quarter of 2022. The Company entered into a 12-year lease with the purchaser for a portion of the property. The Company incurred capital expenditures which remained unpaid at June 30, 2022 and June 30, 2021 of $30 and $39, respectively, and will result in cash outflows within investing activities in the Statement of Consolidated Cash Flows in subsequent periods. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
Leases | Leases Operating lease cost, which includes short-term leases and variable lease payments and approximates cash paid, was $14 and $16 in the second quarter of 2022 and 2021, respectively. Operating lease cost, which includes short-term leases and variable lease payments and approximates cash paid, was $30 and $33 in the six months ended June 30, 2022 and 2021, respectively. Operating lease right-of-use assets and lease liabilities in the Consolidated Balance Sheet were as follows: June 30, 2022 December 31, 2021 Right-of-use assets classified in Other noncurrent assets $ 109 $ 108 Current portion of lease liabilities classified in Other current liabilities $ 32 $ 33 Long-term portion of lease liabilities classified in Other noncurrent liabilities 82 81 Total lease liabilities $ 114 $ 114 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt June 30, 2022 December 31, 2021 5.125% Notes, due 2024 $ 1,090 $ 1,150 6.875% Notes, due 2025 600 600 5.900% Notes, due 2027 625 625 6.750% Bonds, due 2028 300 300 3.000% Notes, due 2029 700 700 5.950% Notes, due 2037 625 625 4.750% Iowa Finance Authority Loan, due 2042 250 250 Other (1) (20) (18) 4,170 4,232 Less: amount due within one year 1 5 Total long-term debt $ 4,169 $ 4,227 (1) Includes various financing arrangements related to subsidiaries, unamortized debt discounts, and unamortized debt issuance costs related to outstanding notes and bonds listed in the table above. Public Debt On January 15, 2021, the Company completed the early redemption of all the remaining $361 of its 5.400% Notes due 2021 at par and paid $5 in accrued interest. On May 3, 2021, the Company completed the early redemption of all the remaining $476 aggregate principal amount of its 5.870% Notes due 2022 and paid an aggregate of $503, including $5 of accrued interest. The Company also incurred an early termination premium and other costs of $23, which was recorded in Loss on debt redemption in the Statement of Consolidated Operations. In the second quarter of 2022, the Company repurchased in the open market approximately $60 aggregate principal amount of its 5.125% Notes due 2024 and paid approximately $62, including an early termination premium of approximately $2, which was recorded in Loss on debt redemption in the Statement of Consolidated Operations. Credit Facility On September 28, 2021, the Company amended and restated its Credit Agreement. The Credit Agreement provides a $1,000 senior unsecured revolving credit facility that matures on September 28, 2026, unless extended or earlier terminated in accordance with the provisions of the Credit Agreement. Capitalized terms used in this “Credit Facility” section but not otherwise defined shall have the meanings given to such terms in the Credit Agreement. Under the Credit Agreement, the Company’s ratio of Consolidated Net Debt to Consolidated EBITDA as of the end of each fiscal quarter for the period of the four fiscal quarters of the Company most recently ended, is required to be no greater than 3.50 to 1.00; provided, however, that during the Covenant Relief Period through December 31, 2022 (unless the Company elects to terminate the Covenant Relief Period earlier in accordance with the Credit Agreement), the Company’s Consolidated Net Debt to Consolidated EBITDA ratio cannot exceed the levels set forth below: No greater than (i) for the quarter ending June 30, 2022 4.50 to 1.00 (ii) for the quarter ending September 30, 2022 4.25 to 1.00 (iii) for the quarter ending December 31, 2022 3.75 to 1.00 During the Covenant Relief Period, common stock dividends and share repurchases (see Note H ) are permitted only if no loans under the Credit Agreement are outstanding at the time and are limited to an aggregate amount not to exceed $500 during the year ending December 31, 2022. Common stock dividends and share repurchases were $252 for the six months ended June 30, 2022. There were no amounts outstanding under the Credit Agreement at June 30, 2022 or December 31, 2021, and no amounts were borrowed during 2022 or 2021 under the Credit Agreement. At June 30, 2022, the Company was in compliance with all covenants under the Credit Agreement. Availability under the Credit Agreement could be reduced in future periods if the Company fails to maintain the required ratios referenced above. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying values of Cash and cash equivalents, restricted cash, derivatives, noncurrent receivables, and Short-term debt included in the Consolidated Balance Sheet approximate their fair value. The Company holds exchange-traded fixed income securities which are considered available-for-sale securities that are carried at fair value which is based on quoted market prices which are classified in Level 1 of the fair value hierarchy and are included in Prepaid expenses and other current assets in the Consolidated Balance Sheet. The fair value of Long-term debt, less amount due within one year was based on quoted market prices for public debt and on interest rates that are currently available to Howmet for issuance of debt with similar terms and maturities for non-public debt. The fair value amounts for all Long-term debt were classified in Level 2 of the fair value hierarchy. June 30, 2022 December 31, 2021 Carrying Fair Carrying Fair Long-term debt, less amount due within one year $ 4,169 $ 4,037 $ 4,227 $ 4,707 Restricted cash, which is included in Prepaid expenses and other current assets in the Consolidated Balance Sheet, was $1 and $2 at June 30, 2022 and December 31, 2021, respectively. |
Divestiture
Divestiture | 6 Months Ended |
Jun. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Divestiture | Divestiture2021 DivestitureOn March 15, 2021, the Company reached an agreement to sell a small manufacturing plant in France within the Fastening Systems segment, which resulted in a charge of $4 related to the non-cash impairment of the net book value of the business, primarily goodwill, in the first quarter of 2021 which was recorded in Restructuring and other charges in the Statement of Consolidated Operations. On June 1, 2021, the Company completed the sale for $10 (of which $8 of cash was received in the second quarter of 2021). The remaining $2 in escrow will be received no later than July 2023. |
Contingencies and Commitments
Contingencies and Commitments | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Commitments | Contingencies and Commitments Contingencies The following information supplements and, as applicable, updates the discussion of the contingencies and commitments in Note V to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2021 (the “Form 10-K”), and should be read in conjunction with the complete descriptions provided in the Form 10-K. Environmental Matters. Howmet participates in environmental assessments and cleanups at more than 30 locations. These include owned or operating facilities and adjoining properties, previously owned or operated facilities and adjoining properties, and waste sites, including Superfund (Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”)) sites. A liability is recorded for environmental remediation when a cleanup program becomes probable and the costs can be reasonably estimated. As assessments and cleanups proceed, the liability is adjusted based on progress made in determining the extent of remedial actions and related costs. The liability can change substantially due to factors such as the nature and extent of contamination, changes in remedial requirements, and technological changes, among others. The Company’s remediation reserve balance was $15 at both June 30, 2022 and December 31, 2021, and was recorded in Other noncurrent liabilities and deferred credits in the Consolidated Balance Sheet (of which $6 was classified as a current liability for both periods), and reflects the most probable costs to remediate identified environmental conditions for which costs can be reasonably estimated. Payments related to remediation expenses applied against the reserve were less than $1 in the second quarter ended June 30, 2022 and included expenditures currently mandated, as well as those not required by any regulatory authority or third party. Included in annual operating expenses are the recurring costs of managing hazardous substances and environmental programs. These costs are estimated to be less than 1% of Cost of goods sold. Indemnified Matters. The Separation and Distribution Agreement, dated October 31, 2016, that the Company entered into with Alcoa Corporation in connection with its separation from Alcoa Corporation, provides for cross-indemnities between the Company and Alcoa Corporation for claims subject to indemnification. The Separation and Distribution Agreement, dated March 31, 2020, that the Company entered into with Arconic Corporation in connection with its separation from Arconic Corporation, provides for cross-indemnities between the Company and Arconic Corporation for claims subject to indemnification. Among other claims that are covered by these indemnities, Arconic Corporation indemnifies the Company (f/k/a Arconic Inc. and f/k/a Alcoa Inc.) for all potential liabilities associated with the fire that occurred at the Grenfell Tower in London, U.K. on June 14, 2017, including the following legal proceedings, as updated from the Form 10-K: United Kingdom Litigation (various claims on behalf of survivors and estates of decedents). The suits are stayed. A case management conference was held during the week of April 26, 2022. On July 28, 2022, the stay was extended. Behrens et al. v. Arconic Inc. et al. (various claims on behalf of survivors and estates of decedents). On September 16, 2020, the court dismissed the U.S. case, determining that the U.K. is the appropriate jurisdiction for the case. On July 8, 2022, the Third Circuit Court of Appeals affirmed the dismissal. A petition for a rehearing was filed before the Third Circuit Court. Howard v. Arconic Inc. et al. (securities law related claims). On July 29, 2022, the court denied the Company’s motion for certification of an interlocutory appeal. The court also ordered the parties to submit a pre-scheduling conference report and a stipulation selecting an alternative dispute resolution process. With respect to the Raul v. Albaugh, et al. (derivative related claim) proceeding, the regulatory investigations and the stockholder demands specified in the Form 10-K, there are no updates. Lehman Brothers International (Europe) (“LBIE”) Legal Proceeding. Lehman Brothers International (Europe) (“LBIE”) Proceeding . On June 26, 2020, LBIE filed formal proceedings against two Firth Rixson entities (“Firth”) in the High Court of Justice, Business and Property Courts of England and Wales. The proceedings relate to interest rate swap transactions that Firth entered into with LBIE in 2007 to 2008. In 2008, LBIE commenced insolvency proceedings, an event of default under the agreements, rendering LBIE unable to meet its obligations under the swaps and suspending Firth’s payment obligations. In the court proceedings, LBIE seeks a declaration that Firth has a contractual obligation to pay the amounts owing to LBIE under the agreements upon its emergence from insolvency proceedings which is expected to occur by 2023, which LBIE claims to be approximately $64, plus applicable interest. Firth will continue to maintain its position that multiple events of default under the agreements related to LBIE’s insolvency proceeding cannot be cured or continue indefinitely, which the Company believes are meritorious defenses. A virtual hearing in this matter occurred on January 13 and 14, 2021 in London, England, and a ruling has yet to be issued to date. Given the importance of the case for LBIE and Firth, it is expected that, irrespective of the outcome of the most recent hearing, the case will be appealed and any requirement for the parties to pay amounts under the agreements will be stayed. An appeal of the case could continue into 2023. The Company intends to vigorously defend against these claims. Other. In addition to the matters discussed above, various other lawsuits, claims, and proceedings have been or may be instituted or asserted against the Company, including those pertaining to environmental, product liability, safety and health, employment, tax and antitrust matters. While the amounts claimed in these other matters may be substantial, the ultimate liability cannot currently be determined because of the considerable uncertainties that exist. Therefore, it is possible that the Company’s liquidity or results of operations in a period could be materially affected by one or more of these other matters. However, based on facts currently available, management believes that the disposition of these other matters that are pending or asserted will not have a material adverse effect, individually or in the aggregate, on the results of operations, financial position or cash flows of the Company. Commitments Guarantees At June 30, 2022, Howmet had outstanding bank guarantees related to tax matters, outstanding debt, workers’ compensation, environmental obligations, energy contracts, and customs duties, among others. The total amount committed under these guarantees, which expire at various dates between 2022 and 2040, was $13 at June 30, 2022. 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 fair value of $6 at both June 30, 2022 and December 31, 2021, 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 at both June 30, 2022 and December 31, 2021 in the event of an Alcoa Corporation default. In December 2021, a surety bond with a limit of $80 relating to this guarantee was obtained by Alcoa Corporation to protect Howmet’s obligation. This surety bond will be renewed on an annual basis by Alcoa Corporation. Letters of Credit The Company has outstanding letters of credit primarily related to workers’ compensation, environmental obligations, and leasing obligations. The total amount committed under these letters of credit, which automatically renew or expire at various dates, mostly in 2022 and 2023, was $123 at June 30, 2022. Pursuant to the Separation and Distribution Agreements between the Company and Arconic Corporation and between the Company and Alcoa Corporation, the Company is required to retain letters of credit of $53 (which are included in the $123 in the above paragraph) that had previously been provided related to the Company, Arconic Corporation, and Alcoa Corporation workers’ compensation claims that occurred prior to the respective separation transactions of April 1, 2020 and November 1, 2016. Arconic Corporation and Alcoa Corporation workers’ compensation and letters of credit fees paid by the Company are proportionally billed to, and are reimbursed by, Arconic Corporation and Alcoa Corporation, respectively. Also, the Company was required to provide letters of credit for certain Arconic Corporation environmental obligations and, as a result, the Company has $17 of outstanding letters of credit relating to such liabilities (which are also included in the $123 in the above paragraph). Surety Bonds The Company has outstanding surety bonds primarily related to tax matters, contract performance, workers’ compensation, environmental-related matters, and customs duties. The total amount committed under these annual surety bonds, which expire and automatically renew at various dates, primarily in 2022 and 2023, was $46 at June 30, 2022. Pursuant to the Separation and Distribution Agreements between the Company and Arconic Corporation and between the Company and Alcoa Corporation, the Company is required to provide surety bonds of $25 (which are included in the $46 in the above paragraph) that had previously been provided related to the Company, Arconic Corporation, and Alcoa Corporation workers’ compensation claims that occurred prior to the respective separation transactions of April 1, 2020 and November 1, |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Management evaluated all activity of Howmet and concluded that no subsequent events have occurred that would require recognition in the Consolidated Financial Statements or disclosure in the Notes to the Consolidated Financial Statements, except as noted below: See Note H for the common stock repurchases made subsequent to the second quarter of 2022. On July 30, 2022, the Company’s cast house in Barberton, Ohio, which produces aluminum ingot used in the production of wheels for the North American commercial transportation market, experienced a mechanical failure resulting in substantial heat and fire-related damage to equipment. The facility is temporarily closed due to this event. An estimate of the impact is on-going and not currently available. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The interim Consolidated Financial Statements of Howmet Aerospace Inc. and subsidiaries (“Howmet” or the “Company” or “we” or “our”) are unaudited. These Consolidated Financial Statements include all adjustments, consisting only of normal recurring adjustments, considered necessary by management to fairly state the Company’s results of operations, financial position, and cash flows. The results reported in these Consolidated Financial Statements are not necessarily indicative of the results that may be expected for the entire year. The 2021 year-end balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). This Form 10-Q report should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2021, which includes all disclosures required by GAAP. Certain amounts in previously issued financial statements were reclassified to conform to the current period presentation. In the second quarter of 2022, the Company derived approximately 45% of its revenue from products sold to the commercial aerospace market which is substantially less than the pre-pandemic 2019 annual rate of approximately 60%. Due to the global COVID-19 pandemic and its impact on the commercial aerospace industry to date, there has been a decrease in domestic and international air travel, which in turn has adversely affected demand for narrow-body and wide-body aircraft. Although domestic air travel is increasing, it still is below pre-pandemic 2019 levels on an average monthly basis. International travel also continues to be lower than pre-pandemic 2019 levels. Narrow-body demand is returning faster than wide-body demand and the commercial wide-body aircraft market is taking longer to recover, which is creating a shift in our product mix compared to pre-pandemic conditions. In addition to the impact from the pandemic, the timing and level of future aircraft builds by original equipment manufacturers are subject to changes and uncertainties, such as declines in Boeing 787 production rates due to delays in its recertification, which may cause our future results to differ from prior periods due to changes in product mix in certain segments. The preparation of the Consolidated Financial Statements of the Company in conformity with GAAP requires management to make certain judgments, estimates, and assumptions. These estimates are based on historical experience and, in some cases, assumptions based on current and future market experience, including considerations relating to the impact of COVID-19 and changes in the aerospace industry as a result of the pandemic. The impact of these changes is rapidly changing and of unknown duration and macroeconomic impact and, as a result, these considerations remain highly uncertain. Management has made its best estimates using all relevant information available at the time, but it is possible that our estimates will differ from our actual results and affect the Consolidated Financial Statements in future periods and potentially require adverse adjustments to the recoverability of goodwill, intangible and long-lived assets, the realizability of deferred tax assets and other judgments and estimations and assumptions that may be impacted by COVID-19 and changes in the aerospace industry. |
Recently Adopted and Recently Issued Accounting Guidance | Recently Adopted and Recently Issued Accounting Guidance Adopted On January 1, 2021, the Company adopted changes issued by the Financial Accounting Standards Board (“FASB”) that were intended to simplify various aspects of accounting for income taxes by eliminating certain exceptions contained in existing guidance and amending other guidance to simplify several other income tax accounting matters. The adoption of this new guidance did not have a material impact on the Consolidated Financial Statements. Issued In March 2020, the FASB issued amendments that provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform, if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference London Inter-bank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. Based upon the provisions of our agreements that were amended to date, management does not believe that the impact of these changes will have a material impact on the Consolidated Financial Statements. |
Earnings Per Share | Basic earnings per share (“EPS”) amounts are computed by dividing earnings, after the deduction of preferred stock dividends declared, by the average number of common shares outstanding. Diluted EPS amounts assume the issuance of common stock for all potentially dilutive share equivalents outstanding. |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Operating Results of Arconic's Reportable Segments | The operating results of the Company’s reportable segments were as follows: Engine Products Fastening Systems Engineered Structures Forged Wheels Total Second quarter ended June 30, 2022 Sales: Third-party sales $ 652 $ 277 $ 185 $ 279 $ 1,393 Inter-segment sales 1 — 1 — 2 Total sales $ 653 $ 277 $ 186 $ 279 $ 1,395 Profit and loss: Provision for depreciation and amortization $ 31 $ 11 $ 12 $ 10 $ 64 Segment Adjusted EBITDA 179 56 26 75 336 Restructuring and other charges 4 — 1 — 5 Capital expenditures 24 8 2 5 39 Second quarter ended June 30, 2021 Sales: Third-party sales $ 544 $ 262 $ 160 $ 229 $ 1,195 Inter-segment sales 1 — 2 — 3 Total sales $ 545 $ 262 $ 162 $ 229 $ 1,198 Profit and loss: Provision for depreciation and amortization $ 30 $ 13 $ 13 $ 9 $ 65 Segment Adjusted EBITDA 130 63 24 70 287 Restructuring and other charges 5 3 — — 8 Capital expenditures 16 9 5 13 43 Engine Products Fastening Systems Engineered Structures Forged Wheels Total Six months ended June 30, 2022 Sales: Third-party sales $ 1,283 $ 541 $ 367 $ 526 $ 2,717 Inter-segment sales 2 — 2 — 4 Total sales $ 1,285 $ 541 $ 369 $ 526 $ 2,721 Profit and loss: Provision for depreciation and amortization $ 62 $ 23 $ 24 $ 20 $ 129 Segment Adjusted EBITDA 352 112 49 142 655 Restructuring and other charges (credits) 7 (3) 3 — 7 Capital expenditures 51 23 9 14 97 Six months ended June 30, 2021 Sales: Third-party sales $ 1,078 $ 534 $ 336 $ 456 $ 2,404 Inter-segment sales 2 — 3 — 5 Total sales $ 1,080 $ 534 $ 339 $ 456 $ 2,409 Profit and loss: Provision for depreciation and amortization $ 61 $ 25 $ 25 $ 19 $ 130 Segment Adjusted EBITDA 262 120 46 150 578 Restructuring and other charges 10 5 1 — 16 Capital expenditures 27 14 10 22 73 |
Schedule of Segment Reporting Information to Consolidated Income Before income Taxes | The following table reconciles Total Segment Adjusted EBITDA to Income before income taxes: Second quarter ended Six months ended June 30, June 30, 2022 2021 2022 2021 Total Segment Adjusted EBITDA $ 336 $ 287 $ 655 $ 578 Segment provision for depreciation and amortization (64) (65) (129) (130) Unallocated amounts: Restructuring and other charges (6) (5) (8) (14) Corporate expense (25) (10) (47) (38) Operating income $ 241 $ 207 $ 471 $ 396 Loss on debt redemption (2) (23) (2) (23) Interest expense, net (57) (66) (115) (138) Other income (expense), net 1 (8) — (12) Income before income taxes $ 183 $ 110 $ 354 $ 223 |
Reconciliation of Capital Expenditures from Segments to Consolidated | The following table reconciles total segment capital expenditures with Capital expenditures as presented in the Statement of Consolidated Cash Flows: Second quarter ended Six months ended June 30, June 30, 2022 2021 2022 2021 Total segment capital expenditures $ 39 $ 43 $ 97 $ 73 Corporate 5 (7) 9 18 Capital expenditures $ 44 $ 36 $ 106 $ 91 |
Disaggregation of Revenue by Major End Market Served | The following table disaggregates segment revenue by major market served. Differences between the total segment and consolidated totals are in Corporate. Engine Products Fastening Systems Engineered Structures Forged Wheels Total Second quarter ended June 30, 2022 Aerospace - Commercial $ 362 $ 155 $ 108 $ — $ 625 Aerospace - Defense 123 37 63 — 223 Commercial Transportation — 53 — 279 332 Industrial and Other 167 32 14 — 213 Total end-market revenue $ 652 $ 277 $ 185 $ 279 $ 1,393 Second quarter ended June 30, 2021 Aerospace - Commercial $ 260 $ 129 $ 79 $ — $ 468 Aerospace - Defense 121 41 64 — 226 Commercial Transportation — 49 — 229 278 Industrial and Other 163 43 17 — 223 Total end-market revenue $ 544 $ 262 $ 160 $ 229 $ 1,195 Six months ended June 30, 2022 Aerospace - Commercial $ 691 $ 303 $ 217 $ — $ 1,211 Aerospace - Defense 260 69 120 — 449 Commercial Transportation — 106 — 526 632 Industrial and Other 332 63 30 — 425 Total end-market revenue $ 1,283 $ 541 $ 367 $ 526 $ 2,717 Six months ended June 30, 2021 Aerospace - Commercial $ 487 $ 277 $ 159 $ — $ 923 Aerospace - Defense 272 83 141 — 496 Commercial Transportation — 95 — 456 551 Industrial and Other 319 79 36 — 434 Total end-market revenue $ 1,078 $ 534 $ 336 $ 456 $ 2,404 |
Restructuring and Other Charg_2
Restructuring and Other Charges (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Other Charges | Second quarter ended Six months ended June 30, June 30, 2022 2021 2022 2021 Layoff costs $ — $ 2 $ — $ 2 Reversals of previously recorded layoff reserves — (2) (1) (1) Pension and Other post-retirement benefits - net settlements ( E ) 3 3 4 6 Non-cash asset impairments — 4 — 4 Net loss related to divestitures of assets and businesses ( P ) — — — 4 Other 3 (2) 5 (1) Restructuring and other charges $ 6 $ 5 $ 8 $ 14 |
Schedule of Activity and Reserve Balances for Restructuring Charges | Layoff costs Other exit costs Total Reserve balances at December 31, 2021 $ 17 $ 2 $ 19 Cash payments (8) (4) (12) Restructuring charges 3 5 8 Other (1) (4) (1) (5) Reserve balances at June 30, 2022 $ 8 $ 2 $ 10 (1) In the six months ended June 30, 2022, Other for layoff costs included a $4 charge for U.S. pension plan settlements and Other exit costs included a $1 charge for accelerated depreciation. |
Pension and Other Postretirem_2
Pension and Other Postretirement Benefits (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Benefit Cost | The components of net periodic cost (benefit) were as follows: Second quarter ended Six months ended June 30, June 30, 2022 2021 2022 2021 Pension benefits Service cost $ 1 $ 1 $ 2 $ 2 Interest cost 13 12 25 24 Expected return on plan assets (21) (23) (41) (46) Recognized net actuarial loss 12 15 25 29 Settlements 3 3 4 6 Net periodic cost (1) $ 8 $ 8 $ 15 $ 15 Other postretirement benefits Service cost $ 1 $ 1 $ 1 $ 1 Interest cost 1 2 2 3 Recognized net actuarial loss 1 — 1 — Amortization of prior service benefit (3) (3) (5) (4) Net periodic benefit (1) $ — $ — $ (1) $ — |
Other (Income) Expense, Net (Ta
Other (Income) Expense, Net (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Other Income and Expenses [Abstract] | |
Schedule of Other (Income) Expense, Net | Second quarter ended Six months ended June 30, June 30, 2022 2021 2022 2021 Non-service related net periodic benefit cost $ 3 $ 3 $ 7 $ 6 Interest income (1) (1) (1) (1) Foreign currency (gains) losses, net (1) 1 (4) 3 Net realized and unrealized losses 4 1 7 4 Deferred compensation (6) 4 (9) 6 Other, net — — — (6) Other (income) expense, net $ (1) $ 8 $ — $ 12 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Provisions | The tax provision was comprised of the following: Second quarter ended Six months ended June 30, June 30, 2022 2021 2022 2021 Pre-tax income at estimated annual effective income tax rate before discrete items $ 44 $ 32 $ 85 $ 65 Impact of change in estimated annual effective tax rate on previous quarter’s pre-tax income (1) (1) — — Interim period treatment of operational losses in foreign jurisdictions for which no tax benefit is recognized — 1 — 1 Other discrete items (7) 4 (9) 3 Provision for income taxes $ 36 $ 36 $ 76 $ 69 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Information Used to Compute Basic and Diluted EPS | The information used to compute basic and diluted EPS attributable to Howmet common shareholders was as follows (shares in millions): Second quarter ended Six months ended June 30, June 30, 2022 2021 2022 2021 Net income attributable to common shareholders $ 147 $ 74 $ 278 $ 154 Less: preferred stock dividends declared — — 1 1 Net income available to Howmet Aerospace common shareholders - basic and diluted $ 147 $ 74 $ 277 $ 153 Average shares outstanding - basic 417 432 418 433 Effect of dilutive securities: Stock options — 1 — 1 Stock and performance awards 5 4 5 4 Average shares outstanding - diluted 422 437 423 438 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive (Loss) by Component | The following table details the activity of the three components that comprise Accumulated other comprehensive loss: Second quarter ended Six months ended June 30, June 30, 2022 2021 2022 2021 Pension and other postretirement benefits ( E ) Balance at beginning of period $ (789) $ (938) $ (799) $ (980) Other comprehensive income: Unrecognized net actuarial gain and prior service cost/benefit 15 30 16 67 Tax expense (3) (7) (3) (15) Total Other comprehensive income before reclassifications, net of tax 12 23 13 52 Amortization of net actuarial loss and prior service cost (1) 13 15 25 31 Tax expense (2) (3) (3) (6) (6) Total amount reclassified from Accumulated other comprehensive loss, net of tax (3) 10 12 19 25 Total Other comprehensive income 22 35 32 77 Balance at end of period $ (767) $ (903) $ (767) $ (903) Foreign currency translation Balance at beginning of period $ (1,093) $ (1,010) $ (1,062) $ (966) Other comprehensive (loss) income (114) 18 (145) (26) Balance at end of period $ (1,207) $ (992) $ (1,207) $ (992) Cash flow hedges Balance at beginning of period $ 18 $ 7 $ (2) $ 3 Other comprehensive income (loss): Net change from periodic revaluations (36) 11 (11) 19 Tax income (expense) 8 (2) 2 (4) Total Other comprehensive (loss) income before reclassifications, net of tax (28) 9 (9) 15 Net amount reclassified to earnings (11) (5) (10) (8) Tax benefit (2) 3 — 3 1 Total amount reclassified from Accumulated other comprehensive loss, net of tax (3) (8) (5) (7) (7) Total Other comprehensive (loss) income (36) 4 (16) 8 Balance at end of period $ (18) $ 11 $ (18) $ 11 Accumulated other comprehensive loss $ (1,992) $ (1,884) $ (1,992) $ (1,884) (1) These amounts were recorded in Other (income) expense, net (see Note F ) and Restructuring and other charges (see Note D ) in the Statement of Consolidated Operations. (2) These amounts were included in Provision for income taxes (see Note G ) in the Statement of Consolidated Operations. (3) A positive amount indicates a corresponding charge to earnings and a negative amount indicates a corresponding benefit to earnings. |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory Components | June 30, 2022 December 31, 2021 Finished goods $ 486 $ 478 Work-in-process 725 631 Purchased raw materials 307 256 Operating supplies 45 37 Total inventories $ 1,563 $ 1,402 |
Properties, Plants, and Equip_2
Properties, Plants, and Equipment, net (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Properties, Plants, and Equipment, Net | June 30, 2022 December 31, 2021 Land and land rights (1) $ 87 $ 91 Structures (1) 973 1,034 Machinery and equipment 3,905 3,932 4,965 5,057 Less: accumulated depreciation and amortization (1) 2,779 2,772 2,186 2,285 Construction work-in-progress 154 182 Properties, plants, and equipment, net $ 2,340 $ 2,467 (1) In the first quarter of 2022, the Company reached an agreement to sell the corporate headquarters in Pittsburgh, PA. The proceeds from the sale of the corporate headquarters were $44, excluding $3 of transaction costs, and the carrying value at the time of sale was $41. A loss of less than $1 was recorded in Restructuring and other charges in the Statement of Consolidated Operations upon finalization of the sale in the second quarter of 2022. The Company entered into a 12-year lease with the purchaser for a portion of the property. |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheet Information Related to Leases | Operating lease right-of-use assets and lease liabilities in the Consolidated Balance Sheet were as follows: June 30, 2022 December 31, 2021 Right-of-use assets classified in Other noncurrent assets $ 109 $ 108 Current portion of lease liabilities classified in Other current liabilities $ 32 $ 33 Long-term portion of lease liabilities classified in Other noncurrent liabilities 82 81 Total lease liabilities $ 114 $ 114 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | June 30, 2022 December 31, 2021 5.125% Notes, due 2024 $ 1,090 $ 1,150 6.875% Notes, due 2025 600 600 5.900% Notes, due 2027 625 625 6.750% Bonds, due 2028 300 300 3.000% Notes, due 2029 700 700 5.950% Notes, due 2037 625 625 4.750% Iowa Finance Authority Loan, due 2042 250 250 Other (1) (20) (18) 4,170 4,232 Less: amount due within one year 1 5 Total long-term debt $ 4,169 $ 4,227 (1) Includes various financing arrangements related to subsidiaries, unamortized debt discounts, and unamortized debt issuance costs related to outstanding notes and bonds listed in the table above. |
Schedule Of Debt Covenant Information | the Company’s Consolidated Net Debt to Consolidated EBITDA ratio cannot exceed the levels set forth below: No greater than (i) for the quarter ending June 30, 2022 4.50 to 1.00 (ii) for the quarter ending September 30, 2022 4.25 to 1.00 (iii) for the quarter ending December 31, 2022 3.75 to 1.00 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Values and Fair Values of Financial Instruments | The carrying values of Cash and cash equivalents, restricted cash, derivatives, noncurrent receivables, and Short-term debt included in the Consolidated Balance Sheet approximate their fair value. The Company holds exchange-traded fixed income securities which are considered available-for-sale securities that are carried at fair value which is based on quoted market prices which are classified in Level 1 of the fair value hierarchy and are included in Prepaid expenses and other current assets in the Consolidated Balance Sheet. The fair value of Long-term debt, less amount due within one year was based on quoted market prices for public debt and on interest rates that are currently available to Howmet for issuance of debt with similar terms and maturities for non-public debt. The fair value amounts for all Long-term debt were classified in Level 2 of the fair value hierarchy. June 30, 2022 December 31, 2021 Carrying Fair Carrying Fair Long-term debt, less amount due within one year $ 4,169 $ 4,037 $ 4,227 $ 4,707 |
Basis of Presentation (Details)
Basis of Presentation (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2019 | |
Aerospace | Revenue Benchmark | Customer Concentration Risk | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 45% | 61% | 59% | 60% |
Segment Information - Narrative
Segment Information - Narrative (Details) - segment | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | 4 | |||
Revenue Benchmark | Customer Concentration Risk | Aerospace | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk, percentage | 45% | 61% | 59% | 60% |
Revenue Benchmark | Customer Concentration Risk | Aerospace | General Electric Company | Engine Products | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk, percentage | 13% | 12% |
Segment Information - Schedule
Segment Information - Schedule of Operating Results of Reportable Segments (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Sales | $ 1,393 | $ 1,195 | $ 2,717 | $ 2,404 |
Provision for depreciation and amortization | 67 | 67 | 133 | 135 |
Restructuring and other charges | 6 | 5 | 8 | 14 |
Capital expenditures | 44 | 36 | 106 | 91 |
Third-party sales | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1,393 | 1,195 | 2,717 | 2,404 |
Intersegment sales | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 2 | 3 | 4 | 5 |
Total segment capital expenditures | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1,395 | 1,198 | 2,721 | 2,409 |
Provision for depreciation and amortization | 64 | 65 | 129 | 130 |
Segment Adjusted EBITDA | 336 | 287 | 655 | 578 |
Restructuring and other charges | 5 | 8 | 7 | 16 |
Capital expenditures | 39 | 43 | 97 | 73 |
Engine Products | Third-party sales | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 652 | 544 | 1,283 | 1,078 |
Engine Products | Intersegment sales | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1 | 1 | 2 | 2 |
Engine Products | Total segment capital expenditures | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 653 | 545 | 1,285 | 1,080 |
Provision for depreciation and amortization | 31 | 30 | 62 | 61 |
Segment Adjusted EBITDA | 179 | 130 | 352 | 262 |
Restructuring and other charges | 4 | 5 | 7 | 10 |
Capital expenditures | 24 | 16 | 51 | 27 |
Fastening Systems | Third-party sales | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 277 | 262 | 541 | 534 |
Fastening Systems | Intersegment sales | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 0 | 0 | 0 | 0 |
Fastening Systems | Total segment capital expenditures | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 277 | 262 | 541 | 534 |
Provision for depreciation and amortization | 11 | 13 | 23 | 25 |
Segment Adjusted EBITDA | 56 | 63 | 112 | 120 |
Restructuring and other charges | 0 | 3 | (3) | 5 |
Capital expenditures | 8 | 9 | 23 | 14 |
Engineered Structures | Third-party sales | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 185 | 160 | 367 | 336 |
Engineered Structures | Intersegment sales | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1 | 2 | 2 | 3 |
Engineered Structures | Total segment capital expenditures | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 186 | 162 | 369 | 339 |
Provision for depreciation and amortization | 12 | 13 | 24 | 25 |
Segment Adjusted EBITDA | 26 | 24 | 49 | 46 |
Restructuring and other charges | 1 | 0 | 3 | 1 |
Capital expenditures | 2 | 5 | 9 | 10 |
Forged Wheels | Third-party sales | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 279 | 229 | 526 | 456 |
Forged Wheels | Intersegment sales | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 0 | 0 | 0 | 0 |
Forged Wheels | Total segment capital expenditures | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 279 | 229 | 526 | 456 |
Provision for depreciation and amortization | 10 | 9 | 20 | 19 |
Segment Adjusted EBITDA | 75 | 70 | 142 | 150 |
Restructuring and other charges | 0 | 0 | 0 | 0 |
Capital expenditures | $ 5 | $ 13 | $ 14 | $ 22 |
Segment Information - Schedul_2
Segment Information - Schedule of Segment Operating Profit to Consolidated Income before Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Segment operating profit | $ 241 | $ 207 | $ 471 | $ 396 |
Loss on debt redemption | (2) | (23) | (2) | (23) |
Interest expense, net | (57) | (66) | (115) | (138) |
Other income (expense), net | 1 | (8) | 0 | (12) |
Income before income taxes | 183 | 110 | 354 | 223 |
Total segment capital expenditures | ||||
Segment Reporting Information [Line Items] | ||||
Segment operating profit | 336 | 287 | 655 | 578 |
Segment provision for depreciation and amortization | (64) | (65) | (129) | (130) |
Restructuring and other charges | ||||
Segment Reporting Information [Line Items] | ||||
Segment operating profit | (6) | (5) | (8) | (14) |
Corporate expense | ||||
Segment Reporting Information [Line Items] | ||||
Segment operating profit | $ (25) | $ (10) | $ (47) | $ (38) |
Segment Information - Reconcili
Segment Information - Reconciliation of Capital Expenditures (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Capital expenditures | $ 44 | $ 36 | $ 106 | $ 91 |
Total segment capital expenditures | ||||
Segment Reporting Information [Line Items] | ||||
Capital expenditures | 39 | 43 | 97 | 73 |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Capital expenditures | $ 5 | $ (7) | $ 9 | $ 18 |
Segment Information - Disaggreg
Segment Information - Disaggregation of Revenue by Major End Market Served (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue, Major Customer [Line Items] | ||||
Sales | $ 1,393 | $ 1,195 | $ 2,717 | $ 2,404 |
Third-party sales | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 1,393 | 1,195 | 2,717 | 2,404 |
Third-party sales | Engine Products | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 652 | 544 | 1,283 | 1,078 |
Third-party sales | Fastening Systems | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 277 | 262 | 541 | 534 |
Third-party sales | Engineered Structures | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 185 | 160 | 367 | 336 |
Third-party sales | Forged Wheels | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 279 | 229 | 526 | 456 |
Third-party sales | Aerospace - Commercial | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 625 | 468 | 1,211 | 923 |
Third-party sales | Aerospace - Commercial | Engine Products | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 362 | 260 | 691 | 487 |
Third-party sales | Aerospace - Commercial | Fastening Systems | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 155 | 129 | 303 | 277 |
Third-party sales | Aerospace - Commercial | Engineered Structures | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 108 | 79 | 217 | 159 |
Third-party sales | Aerospace - Commercial | Forged Wheels | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 0 | 0 | 0 | 0 |
Third-party sales | Aerospace - Defense | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 223 | 226 | 449 | 496 |
Third-party sales | Aerospace - Defense | Engine Products | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 123 | 121 | 260 | 272 |
Third-party sales | Aerospace - Defense | Fastening Systems | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 37 | 41 | 69 | 83 |
Third-party sales | Aerospace - Defense | Engineered Structures | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 63 | 64 | 120 | 141 |
Third-party sales | Aerospace - Defense | Forged Wheels | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 0 | 0 | 0 | 0 |
Third-party sales | Commercial Transportation | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 332 | 278 | 632 | 551 |
Third-party sales | Commercial Transportation | Engine Products | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 0 | 0 | 0 | 0 |
Third-party sales | Commercial Transportation | Fastening Systems | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 53 | 49 | 106 | 95 |
Third-party sales | Commercial Transportation | Engineered Structures | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 0 | 0 | 0 | 0 |
Third-party sales | Commercial Transportation | Forged Wheels | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 279 | 229 | 526 | 456 |
Third-party sales | Industrial and Other | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 213 | 223 | 425 | 434 |
Third-party sales | Industrial and Other | Engine Products | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 167 | 163 | 332 | 319 |
Third-party sales | Industrial and Other | Fastening Systems | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 32 | 43 | 63 | 79 |
Third-party sales | Industrial and Other | Engineered Structures | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 14 | 17 | 30 | 36 |
Third-party sales | Industrial and Other | Forged Wheels | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | $ 0 | $ 0 | $ 0 | $ 0 |
Restructuring and Other Charg_3
Restructuring and Other Charges - Summary (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Restructuring and Related Activities [Abstract] | ||||
Layoff costs | $ 0 | $ 2 | $ 0 | $ 2 |
Reversals of previously recorded layoff reserves | 0 | (2) | (1) | (1) |
Pension, Other post-retirement benefits - net settlements | 3 | 3 | 4 | 6 |
Non-cash asset impairments | 0 | 4 | 0 | 4 |
Net loss related to divestitures of assets and businesses | 0 | 0 | 0 | 4 |
Other | 3 | (2) | 5 | (1) |
Restructuring and other charges | $ 6 | $ 5 | $ 8 | $ 14 |
Restructuring and Other Charg_4
Restructuring and Other Charges - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | $ 6 | $ 5 | $ 8 | $ 14 |
Accelerated depreciation | 3 | 5 | ||
Reversal of Prior Period Programs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | 1 | |||
Asset Impairment Associated Facility Closure | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | 14 | |||
U.S. Pension Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | 3 | $ 3 | 4 | $ 6 |
Pension, other post-retirement benefits (costs) and deferred compensation - net settlement and curtailments | $ 3 | $ 4 |
Restructuring and Other Charg_5
Restructuring and Other Charges - Activity and Reserve Balances for Restructuring Charges (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Restructuring Reserve [Roll Forward] | ||||
Restructuring reserve beginning balance | $ 19 | |||
Cash payments | (12) | |||
Restructuring charges | $ 6 | $ 5 | 8 | $ 14 |
Other | (5) | |||
Restructuring reserve ending balance | 10 | 10 | ||
Settlement charges | (3) | (3) | (4) | (6) |
Accelerated depreciation | 3 | 5 | ||
Pension benefits | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring charges | 3 | 3 | 4 | 6 |
Settlement charges | (3) | $ (3) | (4) | $ (6) |
Layoff costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring reserve beginning balance | 17 | |||
Cash payments | (8) | |||
Restructuring charges | 3 | |||
Other | (4) | |||
Restructuring reserve ending balance | 8 | 8 | ||
Layoff costs | Pension benefits | ||||
Restructuring Reserve [Roll Forward] | ||||
Settlement charges | (4) | |||
Other exit costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring reserve beginning balance | 2 | |||
Cash payments | (4) | |||
Restructuring charges | 5 | |||
Other | (1) | |||
Restructuring reserve ending balance | $ 2 | 2 | ||
Accelerated depreciation | $ 1 |
Pension and Other Postretirem_3
Pension and Other Postretirement Benefits - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Settlements | $ 3 | $ 3 | $ 4 | $ 6 |
Pension benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 1 | 1 | 2 | 2 |
Interest cost | 13 | 12 | 25 | 24 |
Expected return on plan assets | (21) | (23) | (41) | (46) |
Recognized net actuarial loss | 12 | 15 | 25 | 29 |
Settlements | 3 | 3 | 4 | 6 |
Net periodic benefit | 8 | 8 | 15 | 15 |
Other postretirement benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 1 | 1 | 1 | 1 |
Interest cost | 1 | 2 | 2 | 3 |
Recognized net actuarial loss | 1 | 0 | 1 | 0 |
Amortization of prior service benefit | (3) | (3) | (5) | (4) |
Net periodic benefit | $ 0 | $ 0 | $ (1) | $ 0 |
Pension and Other Postretirem_4
Pension and Other Postretirement Benefits - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restructuring and other charges | $ 6 | $ 5 | $ 8 | $ 14 | |
Pension benefits | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restructuring and other charges | 3 | 3 | 4 | 6 | |
Contributions and payments | $ 12 | $ 36 | $ 25 | $ 69 | |
Other postretirement benefits | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Decrease in obligation, pension benefits | $ 39 |
Other (Income) Expense, Net (De
Other (Income) Expense, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Other Income and Expenses [Abstract] | ||||
Non-service related net periodic benefit cost | $ 3 | $ 3 | $ 7 | $ 6 |
Interest income | (1) | (1) | (1) | (1) |
Foreign currency (gains) losses, net | (1) | 1 | (4) | 3 |
Net realized and unrealized losses | 4 | 1 | 7 | 4 |
Deferred compensation | (6) | 4 | (9) | 6 |
Other, net | 0 | 0 | 0 | (6) |
Other (income) expense, net | $ (1) | $ 8 | $ 0 | $ 12 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate reconciliation (percent) | 23.90% | 29.10% | 23.90% | 29.10% |
Effective income tax rate reconciliation, including discrete items (percent) | 19.70% | 32.70% | 21.50% | 30.90% |
Discrete income tax (benefit) charge | $ (7) | $ 4 | $ (9) | $ 3 |
Benefit from release of valuation allowance | 6 | 6 | ||
Excess benefit for stock compensation | 5 | |||
Other items (benefit) charge | $ (1) | 2 | $ 2 | 1 |
Charge from tax rate change | $ 2 | $ 2 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Provisions (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Pre-tax income at estimated annual effective income tax rate before discrete items | $ 44 | $ 32 | $ 85 | $ 65 |
Impact of change in estimated annual effective tax rate on previous quarter’s pre-tax income | (1) | (1) | 0 | 0 |
Interim period treatment of operational losses in foreign jurisdictions for which no tax benefit is recognized | 0 | 1 | 0 | 1 |
Other discrete items | (7) | 4 | (9) | 3 |
Provision for income taxes | $ 36 | $ 36 | $ 76 | $ 69 |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation of Information Used to Compute Basic and Diluted EPS (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Earnings Per Share [Abstract] | ||||
Net income attributable to common shareholders | $ 147 | $ 74 | $ 278 | $ 154 |
Less: preferred stock dividends declared | 0 | 0 | 1 | 1 |
Net income available to Howmet Aerospace common shareholders - basic | 147 | 74 | 277 | 153 |
Net income available to Howmet Aerospace common shareholders - diluted | $ 147 | $ 74 | $ 277 | $ 153 |
Average shares outstanding - basic (in shares) | 417 | 432 | 418 | 433 |
Effect of dilutive securities: | ||||
Stock options (in shares) | 0 | 1 | 0 | 1 |
Stock and performance awards (in shares) | 5 | 4 | 5 | 4 |
Average shares outstanding - diluted (in shares) | 422 | 437 | 423 | 438 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jul. 31, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Aug. 18, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Common stock outstanding (in shares) | 416,000,000 | 429,000,000 | 416,000,000 | 429,000,000 | ||
Authorized repurchase amount | $ 1,500 | |||||
Share repurchases (in shares) | 2,000,000 | 7,000,000 | ||||
Treasury stock acquired, average price per share (in usd per share) | $ 33.89 | |||||
Repurchase of common stock | $ 60 | $ 235 | $ 200 | |||
Remaining authorized repurchase amount | $ 1,112 | $ 1,112 | ||||
Decrease in average shares outstanding (in shares) | 15,000,000 | |||||
Incremental common shares attributable to dilutive effect of accelerated share repurchase agreements (in shares) | 20,000,000 | |||||
Stock options | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Number of anti-dilutive securities (in shares) | 0 | 0 | 0 | 0 | ||
Subsequent Event | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Share repurchases (in shares) | 1,000,000 | |||||
Treasury stock acquired, average price per share (in usd per share) | $ 32.22 | |||||
Repurchase of common stock | $ 30 | |||||
Remaining authorized repurchase amount | $ 1,082 | |||||
Revolving Credit Agreement | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Credit agreement term | 5 years |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 3,508 | |||
Other comprehensive income: | ||||
Total Other comprehensive (loss) income, net of tax | $ (128) | $ 57 | (129) | $ 59 |
Ending balance | 3,421 | 3,421 | ||
Accumulated other comprehensive loss | ||||
Other comprehensive income: | ||||
Total Other comprehensive (loss) income, net of tax | (128) | 57 | (129) | 59 |
Ending balance | (1,992) | (1,884) | (1,992) | (1,884) |
Pension and other postretirement benefits | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (789) | (938) | (799) | (980) |
Other comprehensive income: | ||||
Unrecognized net actuarial gain and prior service cost/benefit | 15 | 30 | 16 | 67 |
Tax expense | (3) | (7) | (3) | (15) |
Total Other comprehensive (loss) income before reclassifications, net of tax | 12 | 23 | 13 | 52 |
Amortization of net actuarial loss and prior service cost | 13 | 15 | 25 | 31 |
Tax benefit (expense) | (3) | (3) | (6) | (6) |
Total amount reclassified from Accumulated other comprehensive loss, net of tax | 10 | 12 | 19 | 25 |
Total Other comprehensive (loss) income, net of tax | 22 | 35 | 32 | 77 |
Ending balance | (767) | (903) | (767) | (903) |
Foreign currency translation | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (1,093) | (1,010) | (1,062) | (966) |
Other comprehensive income: | ||||
Total Other comprehensive (loss) income, net of tax | (114) | 18 | (145) | (26) |
Ending balance | (1,207) | (992) | (1,207) | (992) |
Cash flow hedges | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 18 | 7 | (2) | 3 |
Other comprehensive income: | ||||
Unrecognized net actuarial gain and prior service cost/benefit | (36) | 11 | (11) | 19 |
Tax expense | 8 | (2) | 2 | (4) |
Total Other comprehensive (loss) income before reclassifications, net of tax | (28) | 9 | (9) | 15 |
Amortization of net actuarial loss and prior service cost | (11) | (5) | (10) | (8) |
Tax benefit (expense) | 3 | 0 | 3 | 1 |
Total amount reclassified from Accumulated other comprehensive loss, net of tax | (8) | (5) | (7) | (7) |
Total Other comprehensive (loss) income, net of tax | (36) | 4 | (16) | 8 |
Ending balance | $ (18) | $ 11 | $ (18) | $ 11 |
Receivables (Details)
Receivables (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Customer One | |||||
Schedule Of Financial Receivables [Line Items] | |||||
Accounts receivables sold | $ 117 | $ 223 | |||
Accounts receivable remaining outstanding | 125 | 125 | |||
Customer Two | |||||
Schedule Of Financial Receivables [Line Items] | |||||
Accounts receivables sold | $ 98 | $ 164 | |||
Receivables Sale Program | |||||
Schedule Of Financial Receivables [Line Items] | |||||
Net cash funding received during the period | 22 | ||||
Amount of cash draws under arrangement during the period | 41 | ||||
Amount of cash repayments under arrangement during the period | $ 63 | ||||
Receivables Purchase Agreement | |||||
Schedule Of Financial Receivables [Line Items] | |||||
Accounts receivable securitization | 325 | 325 | $ 325 | ||
Accounts receivable securitization amount drawn | 250 | 250 | 250 | ||
Financing receivables, held as collateral | 130 | 130 | $ 79 | ||
Accounts receivables sold | $ 437 | $ 901 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventory Components (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 486 | $ 478 |
Work-in-process | 725 | 631 |
Purchased raw materials | 307 | 256 |
Operating supplies | 45 | 37 |
Total inventories | $ 1,563 | $ 1,402 |
Inventories - Narrative (Detail
Inventories - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Inventories valued on a LIFO basis | $ 627 | $ 523 |
Total inventories valued on an average-cost basis | $ 203 | $ 192 |
Properties, Plants, and Equip_3
Properties, Plants, and Equipment, net (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, gross | $ 4,965 | $ 4,965 | $ 5,057 | |
Less: accumulated depreciation and amortization | 2,779 | 2,779 | 2,772 | |
Properties, plants and equipment excluding construction work in progress | 2,186 | 2,186 | 2,285 | |
Construction work-in-progress | 154 | 154 | 182 | |
Properties, plants, and equipment, net | 2,340 | 2,340 | 2,467 | |
Capital expenditures incurred but not yet paid | $ 30 | $ 39 | ||
Corporate Center | Disposed of by Sale | ||||
Property, Plant and Equipment [Line Items] | ||||
Proceeds from the sales of businesses | 44 | |||
Transaction costs | 3 | |||
Loss on sale | $ 1 | |||
Purchaser lease term | 12 years | 12 years | ||
Land and land rights | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, gross | $ 87 | $ 87 | 91 | |
Structures | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, gross | 973 | 973 | 1,034 | |
Structures | Corporate Center | Disposed of by Sale | ||||
Property, Plant and Equipment [Line Items] | ||||
Properties, plants, and equipment, net | 41 | 41 | ||
Machinery and equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, gross | $ 3,905 | $ 3,905 | $ 3,932 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Leases [Abstract] | ||||
Operating lease cost | $ 14 | $ 16 | $ 30 | $ 33 |
Leases - Operating Lease Assets
Leases - Operating Lease Assets and Liabilities in the Consolidated Balance Sheet (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other Assets, Noncurrent | Other Assets, Noncurrent |
Right-of-use assets classified in Other noncurrent assets | $ 109 | $ 108 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other current liabilities | Other current liabilities |
Current portion of lease liabilities classified in Other current liabilities | $ 32 | $ 33 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other noncurrent liabilities and deferred credits | Other noncurrent liabilities and deferred credits |
Long-term portion of lease liabilities classified in Other noncurrent liabilities | $ 82 | $ 81 |
Total lease liabilities | $ 114 | $ 114 |
Debt - Schedule of Long-Term De
Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Other | $ (20) | $ (18) |
Long-term debt | 4,170 | 4,232 |
Less: amount due within one year | 1 | 5 |
Total long-term debt | $ 4,169 | 4,227 |
5.125% Notes, due 2024 | ||
Debt Instrument [Line Items] | ||
Long-term debt, interest rate | 5.125% | |
Amount outstanding | $ 1,090 | 1,150 |
6.875% Notes, due 2025 | ||
Debt Instrument [Line Items] | ||
Long-term debt, interest rate | 6.875% | |
Amount outstanding | $ 600 | 600 |
5.900% Notes, due 2027 | ||
Debt Instrument [Line Items] | ||
Long-term debt, interest rate | 5.90% | |
Amount outstanding | $ 625 | 625 |
6.750% Bonds, due 2028 | ||
Debt Instrument [Line Items] | ||
Long-term debt, interest rate | 6.75% | |
Amount outstanding | $ 300 | 300 |
3.000% Notes, due 2029 | ||
Debt Instrument [Line Items] | ||
Long-term debt, interest rate | 3% | |
Amount outstanding | $ 700 | 700 |
5.950% Notes, due 2037 | ||
Debt Instrument [Line Items] | ||
Long-term debt, interest rate | 5.95% | |
Amount outstanding | $ 625 | 625 |
4.750% Iowa Finance Authority Loan, due 2042 | ||
Debt Instrument [Line Items] | ||
Long-term debt, interest rate | 4.75% | |
Amount outstanding | $ 250 | $ 250 |
Debt - Public Debt (Details)
Debt - Public Debt (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
May 03, 2021 | Jan. 15, 2021 | Jun. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | |
Debt Instrument [Line Items] | |||||
Payment for early redemption of debt | $ 2 | $ 22 | |||
5.400% Notes, due 2021 | |||||
Debt Instrument [Line Items] | |||||
Early redemption of debt | $ 361 | ||||
Long-term debt, interest rate | 5.40% | ||||
Accrued interest paid | $ 5 | ||||
5.870% Notes, due 2022 | |||||
Debt Instrument [Line Items] | |||||
Early redemption of debt | $ 476 | ||||
Long-term debt, interest rate | 5.87% | ||||
Accrued interest paid | $ 5 | ||||
Payment for early redemption of debt | 503 | ||||
Early termination premium | $ 23 | ||||
5.125% Notes, due 2024 | |||||
Debt Instrument [Line Items] | |||||
Early redemption of debt | $ 60 | ||||
Long-term debt, interest rate | 5.125% | 5.125% | |||
Payment for early redemption of debt | $ 62 | ||||
Early termination premium | $ 2 |
Debt - Credit Facility (Details
Debt - Credit Facility (Details) - Revolving Credit Agreement $ in Millions | 6 Months Ended | 12 Months Ended | |
Sep. 28, 2021 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Debt Instrument [Line Items] | |||
Long-term line of credit | $ 1,000 | ||
Debt covenants, net debt to consolidated EBITDA ratio | 3.50 | ||
Amount outstanding | $ 0 | $ 0 | |
Amount borrowed | 0 | $ 0 | |
Year Ending December 2022 | |||
Debt Instrument [Line Items] | |||
Debt covenants, net debt to consolidated EBITDA ratio | 3.75 | ||
Maximum common stock dividends and share repurchases | 500 | ||
Common stock dividends and share repurchases | $ 252 |
Debt - Schedule of Net Debt To
Debt - Schedule of Net Debt To Consolidated EBITDA Ratio (Details) - Revolving Credit Agreement | Sep. 28, 2021 |
Debt Conversion [Line Items] | |
Debt covenants, net debt to consolidated EBITDA ratio | 3.50 |
Quarter ending June 30, 2022 | |
Debt Conversion [Line Items] | |
Debt covenants, net debt to consolidated EBITDA ratio | 4.50 |
Quarter ending September 30, 2022 | |
Debt Conversion [Line Items] | |
Debt covenants, net debt to consolidated EBITDA ratio | 4.25 |
Quarter ending December 31, 2022 | |
Debt Conversion [Line Items] | |
Debt covenants, net debt to consolidated EBITDA ratio | 3.75 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Derivative [Line Items] | ||
Restricted cash | $ 1 | $ 2 |
Carrying value | ||
Derivative [Line Items] | ||
Long-term debt, less amount due within one year | 4,169 | 4,227 |
Fair value | ||
Derivative [Line Items] | ||
Long-term debt, less amount due within one year | $ 4,037 | $ 4,707 |
Divestiture (Details)
Divestiture (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Jul. 31, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 01, 2021 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Asset impairment charges | $ 0 | $ 4 | $ 0 | $ 4 | |||
Fastening Systems | Small Manufacturing Facility in France | Disposed of by Sale | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Asset impairment charges | $ 4 | ||||||
Consideration | $ 10 | ||||||
Proceeds from the sales of businesses | $ 8 | ||||||
Fastening Systems | Small Manufacturing Facility in France | Disposed of by Sale | Forecast | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Escrow deposits | $ 2 |
Contingencies and Commitments (
Contingencies and Commitments (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | |
Dec. 31, 2021 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) location | Jun. 26, 2020 USD ($) entity | |
Loss Contingencies [Line Items] | ||||
Number of cleanup locations | location | 30 | |||
Remediation reserve balance | $ 15 | $ 15 | $ 15 | |
Remediation reserve balance, classified as a current liability | 6 | 6 | 6 | |
Payments related to remediation expenses applied against the reserve (less than) | 1 | |||
Guarantees of third party related to project financing | 13 | 13 | ||
Combined fair value of guarantees | 6 | 6 | 6 | |
Coverage limit | 80 | |||
Total amount committed under outstanding surety bonds | 46 | 46 | ||
Surety bonds, amount outstanding | 25 | 25 | ||
Bank Loan Obligations | ||||
Loss Contingencies [Line Items] | ||||
Letters of credit, total amount | 123 | 123 | ||
Other Noncurrent Liabilities and Deferred Credits | Separation Agreement | ||||
Loss Contingencies [Line Items] | ||||
Guarantees of third party related to project financing | $ 1,406 | 1,406 | 1,406 | |
Lehman Brothers International (Europe) (“LBIE”) Claims | ||||
Loss Contingencies [Line Items] | ||||
Number of entities | entity | 2 | |||
Estimate of claim | $ 64 | |||
Alcoa Corporation Workers Compensation Claims | ||||
Loss Contingencies [Line Items] | ||||
Letters of credit, total amount outstanding | 53 | 53 | ||
Arconic Corporation Environmental Obligations | ||||
Loss Contingencies [Line Items] | ||||
Letters of credit, total amount outstanding | $ 17 | $ 17 | ||
Maximum | Recurring Costs of Managing Hazardous Substances and Environmental Programs | ||||
Loss Contingencies [Line Items] | ||||
Percentage of cost of goods sold (percent) | 1% |