Howmet Aerospace Inc. · NYSE:HWM
Howmet Aerospace — Investor Day (May 2022)
88 slides from Howmet Aerospace's investor day presentation, May 23, 2022
Slide 1: Howmet Aerospace Technology Day 2022
Howmet Aerospace Technology Day 2022 John Plant | Executive Chairman and Chief Executive Officer Ken Giacobbe | EVP and Chief Financial Officer May 23, 2022
Slide 2: Forward-Looking Statements
Forward – Looking Statements This presentation contains statements that relate to future events and expectations and as such constitute forward - looking state ments within the meaning of the Private Securities Litigation Reform Act of 1995. Forward - looking statements include those containing such
Slide 3: Important Information (continued)
Important Information (continued) Non - GAAP Financial Measures Some of the information included in this presentation is derived from Howmet Aerospace’s consolidated financial information b ut is not presented in Howmet Aerospace’s financial statements prepared in accordance with accounting principl
Slide 4: Agenda
Agenda 1. Company Overview 2. Engine Products 3. Fastening Systems 4. Engineered Structures 5. Forged Wheels 6. Financial Update 4
Slide 5: Today's Presenters
Today’s Presenters John Plant Executive Chairman & Chief Executive Officer Ken Giacobbe EVP and Chief Financial Officer 5
Slide 6: Unique Assets, Iconic Trusted Brand, Differentiated Technologies
Unique Assets, Iconic Trusted Brand, Differentiated Technologies Iconic, Trusted Brand 80 + year history : M ajor presence in jet engines Leading market position: H igh barriers to entry Collaborative relationships : B lue - chip customer base Differentiated Technologies with Rich IP Portfolio and P
Slide 7: Howmet Aerospace Strategy
Howmet Aerospace Strategy Focus on what we are good at to drive growth above market rate Underpin strategy with commercial and operational discipline Prioritize major differentiated products for resource allocation Execute a disciplined capital allocation strategy 7
Slide 8: Four Segments: ~85% of Revenue from Number One or Two Market Position
Four Segments: ~85% of Revenue from Number 1 or 2 Market Position Fastening Systems Forged Wheels Select Customers IGT Airfoils Engine Products ~$2.3B 2021 Revenue ~$1.0B 2021 Revenue ~$0.9B 2021 Revenue Global leader in jet engine components and seamless rolled rings 27 manufacturing plants and 1 d
Slide 9: Differentiated Products Provide Our Customers with Innovative Solutions
Differentiated Products Provide Our Customers with Innovative Solutions Customer Benefits: Innovative Solutions: Differentiated Products: Patented airfoils with advanced cooling and coatings for extreme temperature applications Specially - designed fasteners for lightweight composite airframe constr
Slide 10: Global Manufacturing Locations
65 Global Manufactiiring Locations ‘ebarberton, OH ieCanton, OH Eanaba oe Cleveland OF | Georgetown, ontario © 5 Tava audtec © © tigate, un ‘eNeworightor, MN 9 oy hh @ Lapactein a @ Whitehall, Mi ‘Fuerton, ca a beer cre “srenaink UNITE sare cca ‘erancho Cucmonge;ca—v@ Washington, MO—° en1s0n 2 Le Ha
Slide 11: FR HOWMET aes
FR HOWMET aes UnLJ AEROSPACE aaa
Slide 12: TSA Check-Ins Recovering From Pandemic Lows
TSA Check - Ins Recovering From Pandemic Lows Aero Recovery Continues TSA check - ins now ~10% below 2019 levels Recovery from Q1 2021 low of ~65% reduction in TSA data COVID impact largely transitory as shown by recovery from COVID Variant impact Expect recovery to continue through 2022 Source: TSA
Slide 13: Commercial Aerospace Recovery Led by Domestic Travel
Commercial Aerospace Recovery Led by Domestic Travel 13 RPK = Revenue Passenger Kilometers
Slide 14: Near-Term Aerospace Growth Driven by Narrowbody Builds
Near - Term Aerospace Growth Driven by Narrowbody Builds Narrowbody Expectations OE build rates surpassing pre - pandemic levels in 2024 Airbus A320 rate to exceed 2019 levels in 2024, Boeing 737 rate near pre - pandemic levels in 2025 Widebody Expectations Widebody expansion in 2023, 2024, & 2025 O
Slide 15: Defense Growth Driven by F-35 Production Rates
Defense Growth Driven by F - 35 Production Rates Volumes remain fully funded by US Government and supported by increased foreign military sales Production plan remains a growth avenue Content across Bulkheads, Fasteners, and Engine Components Spares growth expected to increase ~40% of Howmet 2021 De
Slide 16: Engine Products
Engine Products 16
Slide 17: Engine Products Video
Engine Products Video 17
Slide 18: Engine Products: Multiple Techniques to Meet Customer Needs
Engine Products: Multiple Techniques to Meet Customer Needs We Deliver Through: Major Drivers to Achieve: Market Needs: Improved Fuel Efficiency Reduced Emissions Reduced Weight Predictable Overhaul Cycles Fuel Flexibility Speed to Market Operating Temperature Aerodynamic Shapes Airflow Control Envi
Slide 19: Engine Products: Maintaining Leading Positions Across All Product Lines
Engine Products: Maintaining Leading Positions Across All Product Lines Market Segment Products (in order of complexity) Competitive Position Highlights Revenue % of FY21 Total Aero Airfoils Single Crystal (SC) Enhanced Equiax Equiax Directionally Solidified (DS) World’s largest single crystal airfo
Slide 20: Increasing Temperature Capability
Increasing Temperature Capability Engine Products Materials Expertise Engine OEM is responsible for alloy selection, design, and specifications Produced to achieve targeted life, efficiency & emissions targets; highest operating temperature with maximum cooling Casting and rolling of over 100 differ
Slide 21: Investment Casting Process Controls Microstructure and Properties
Investment Casting Process Controls Microstructure and Properties Nickel base superalloys are complex : Greater than 15 element alloys, including refractory and rare earth elements Very tight control (Less than 1ppm) on tramp elements, which degrade properties Equiax and Directionally Solidified All
Slide 22: The Technology Behind the Solution: Manage Component Temperature
Air blown through high pressure turbine (HPT) components enables operation in environments above their melting point Competitors Howmet Gen 2 Howmet Gen 1 Howmet Current Core Distortion 3D Cooling “Multiwall” 2D Cooling The Technology Behind the Solution: Manage Component Temperature 3 Wall Design 4
Slide 23: Sole Provider for Highest Temperature Engines in F-35
Sole Provider for Highest Temperature Engines in F - 35 (Joint Strike Fighter) 1) American Society of Engineers. 2) Fundamentals of Jet Propulsion with Applications , Cambridge Aerospace Series. Ronald D. Flack. 2005 FUTURE TECHNOLOGY FLOW Joint Strike Fighter’s F135 Turbine Inlet Temperature ~3,600
Slide 24: Aero-Engine Capabilities Scaled to Land-Based Industrial Gas Turbines
Aero - Engine Capabilities Scaled to Land - Based Industrial Gas Turbines (IGT) Land - based turbines used for power generation Efficiency approaching industry - leading 65% combined cycle Fuel flexibility, low NOx operation (40% reduction) Base load and peaking with rapid ramp to full power Aero -
Slide 25: The Technology Behind the Solution: Seamless Rings
The Technology Behind the Solution: Seamless Rings Forged and Rolled R ings are critical for structural support and containment during engine operation High strength alloys with strict microstructure requirements Seamless rings employed to increase properties Thin walls required to reduce weight Rin
Slide 26: The Technology Behind the Solution: Coatings
The Technology Behind the Solution: Coatings Corrosion, oxidation and thermal barrier coatings Fuel and environmental contaminants necessitate corrosion - resistant coatings Oxidation and thermal barrier coatings enable higher temperature operation Solutions Patented hafnium bond coat improves Therm
Slide 27: Next Generation Technologies Developed to Maintain Advantage
Next Generation Technologies Developed to Maintain Advantage Cast Film Cooling Holes Howmet has developed and patented a capability to cast film cooling holes Produce holes the diameter of “2 human hairs” Removes line - of - sight manufacturing constraint Produce complex, non - drillable shapes with
Slide 28: Superior Manufacturing Technology to Achieve Quality and Yields
Superior Manufacturing Technology to Achieve Quality and Yields Start Ship Shell Wax Cast X - Ray (Incl. CT) Finish Cut Robotic Water Jet Cutting & Shell Removal High Speed CNC Finishing Blue Light Digital Measurement Automated Digital X - Ray, CT Advanced Wax Press / Tooling & 3 - D Printing Automa
Slide 29: Engine Products: Key Messages
Engine Products: Key Messages Continue to develop and expand material, process, and manufacturing expertise Enable Turbine Performance by Controlling Shape, Structure, and Managing Temperature/Airflow Processes: Equiax, Directionally Solidified and Single Crystal Casting , Coatings , and Seamless Ro
Slide 30: Fastening Systems
Fastening Systems HOWMET AEROSPACE
Slide 31: Fastening Systems Video
Fastening Systems Video HOWMET ‘AEROSPACE
Slide 32: Fastening Systems Advantage
Fastening Systems Advantage Broad Product Offering – One Stop Proprietary Products Industry leading brands including Camloc ® and Huck® Anti Vibration Ease of Assembly and Rework Low Profile (Stealth) ‘Faraday Cages’ – Composites Lower Maintenance Costs Automated Tools 32
Slide 33: Fastening Systems: Whole System Solutions to Meet Customer Needs
Fastening Systems: Whole System Solutions to Meet Customer Needs We Deliver Through: Major Drivers to Achieve: Automated Assembly Ease of Assembly Composite Materials Aerodynamic Shapes One - Sided Installation (Blind Fasteners) Smart Installation Tools Lightning Strike Protection (LSP) Fasteners Le
Slide 34: Fastening Systems: Leading Positions Across All Market Segments
Fastening Systems: Leading Positions Across All Market Segments Market Segment Products (In order of Complexity) Competitive Position Highlights Revenue % of FY21 Total Aerospace (Airframe, Engine, Specialty) Latches Panel Fasteners Single Sided Sleeved Pin Systems Lockbolts and Collars Threaded Pin
Slide 35: Fastening Systems: Industry Leader in Innovation
Fastening Systems: Industry Leader in Innovation Industry Leading Brands Innovation Investment and Activity Outpacing Our Peers Camloc® Delron® Huck® Kaynar® Mairoll ® Major Peer Howmet ~2.7x Patents 1 Howmet Major Peer ~3.4x Trademarks 1 Pending Granted Strong Intellectual Property Position RAM® Re
Slide 36: Flite-Tite Fasteners Address Challenges for Composite Aircraft
Flite - Tite® Fasteners Address Challenges for Composite Aircraft Composite Usage in Airframes Has Grown Exponentially Challenges Offer Opportunity for High - Value Fastener Applications 3x 2x 787 vs 767 350 vs 330 Howmet fastener content value is significantly higher on composite aircraft Howmet va
Slide 37: Ergo-Tech Blind Bolt Enables Automated Assembly
Ergo - Tech® Blind Bolt Enables Automated Assembly One side access fastener for metallic or composite structures Ergo - Tech ® - Advantages Automation METALLIC COMPOSITE HYBRID 95 KSI SHEAR ALTERNATIVE TO PINS AND COLLARS Low Installed Cost – No secondary ops. Adaptable to Metallic, Composite, Hybri
Slide 38: FC43 Panel Fastener Self-Retains for Maintenance Ease
FC43® Panel Fastener Self - Retains for Maintenance Ease Self - retaining/self - captivated (stays attached) and has “hold - out” capability in all positions Eliminates Foreign Object Debris (FOD) Strength - to - size ratio results in higher weight savings potential FC43® - Advantages Ease of Access
Slide 39: Huck BobTail Lockbolt: Fast Installation and Maintenance-Free
Huck BobTail® Lockbolt: Fast Installation and Maintenance - Free Huck BobTail® lockbolt delivers up to 5x the fatigue strength of conventional nuts and bolts, unmatched installation speed, and industry - leading vibration resistance More power, faster Enables hundreds of thousands of dollars in high
Slide 40: Industrial Fasteners are a Growth Opportunity
Industrial Fasteners are a Growth Opportunity Key Customers Fasteners Advantage ▪ Rapid assembly ▪ Vibration resistance ▪ Maintenance - free 40
Slide 41: Fastening Systems: Key Messages
Fastening Systems: Key Messages Market Share Growth in Aerospace and Expansion into adjacent Industrial Markets Have broadest portfolio of customer - qualified sites and products Capability to provide system solution including fasteners, installation tooling, post - installation gauging, and custome
Slide 42: Engineered Structures
Engineered Structures HOWMET AEROSPACE
Slide 43: Engineered Structures Video
Engineered Structures Video 43
Slide 44: Engineered Structures: Multiple Techniques to Meet Customer Needs
Engineered Structures: Multiple Techniques to Meet Customer Needs We Deliver Through: Major Drivers to Achieve: Market Needs: Improved Fuel Efficiency Reduced Emissions Predictable Overhaul Cycles Speed to Market Operating Temperature Compatibility with Composites Environmental Resistance Component
Slide 45: Engineered Structures: Global Leader in Aerospace & Defense Structures
Engineered Structures: Global Leader in Aerospace & Defense Structures Market Segment Products (In Order of Differentiation) Competitive Position Highlights Revenue % of FY21 Total Ti - Mill Structures Plate / Sheet Billet / Bloom Ingot Value Add Ti Services Vertically integrated with alloys, forgin
Slide 46: Key Products for Lightweight Structures and Highly Efficient Engines
Key Products for Lightweight Structures and Highly Efficient Engines Proprietary Alloys & Processes with Robust & Unique Assets Ti and Al - 7085 F - 35 Bulkheads Forged Fan Blades and Engine Disks 50,000 - Ton Forging Press Robust & Unique Assets “Ramp Up Ready” Patented & Proprietary Alloys and Pro
Slide 47: Isothermal Forging Press and Heat Treat Cell
Isothermal Forging Press and Heat Treat Cell Near - net shape isothermal forging in vacuum to meet newest jet engine requirements Unique isothermal forging press with “quick” die change capability High Speed Air System quench cell Allows localized control of quench rate to achieve required balance o
Slide 48: Aluminum & Titanium Die Forgings
Aluminum & Titanium Die Forgings 400 lbs weight savings and 20% cost savings compared to built - up structure on F - 35 bulkheads Leading producer of Aircraft Wheel and Brake Forgings Leading producer of Aluminum Engine Fan Blades Multi - Material & Multi - Process Expertise for Aero Structural Appl
Slide 49: Differentiated Ti-Sheet Products
Differentiated Ti - Sheet Products Mill - friendly Fine Grain Sheet in multiple Ti - alloys Targeted at pylon and heat shield applications Enables forming of complex Ti - parts at lower temperatures (up to 200 ° F) Enables more complex shapes and thinner gauges Provides cost savings and enhanced too
Slide 50: Engineered Structures: Key Messages
Engineered Structures: Key Messages Global Market Leader : ▪ Large Aluminum and Titanium Forgings ▪ Aircraft Wheel & Brake Forgings ▪ Forged Aluminum Fan Blades ▪ Ti Mill Products Leading market positions are supported by Patented and Proprietary Alloys and Processes supported by Robust & Unique Ass
Slide 51: Forged Wheels
Forged Wheels HOWMET AEROSPACE
Slide 52: Forged Wheels Video
Forged Wheels Video 52
Slide 53: Forged Wheels Expertise and Market Position
Forged Wheels Expertise and Market Position • Brand: Most recognized truck wheel globally • Patents: Over 150 patents and trade secrets • Unmatched Global Scale • Most applications, models, and wheel designs • Powertrains - > Fossil, electric, fuel cell • Megatrends require Aluminum Wheels Different
Slide 54: Forged Wheels: Meeting Multiple Customer Needs
Forged Wheels: Meeting Multiple Customer Needs We Deliver Through: Major Drivers to Achieve: Market Needs: Fuel Efficiency Payload Reduced Emissions Enhanced Aesthetics Reduced Maintenance Reliability Resale Value Weight Optimization Product Integrity Value - Based Features Proprietary Alloy Enginee
Slide 55: Forged Wheels: Global Leader in Aluminum Forged Wheels
Market Segment Products Competitive Position Highlights Revenue % of FY21 Total Ultra ONE® Dura - Bright® Integrated Aerodynamic Solutions vHub ® Bore Technology Howmet aluminum wheel market share ~75% Proprietary MagnaForce ® Alloy enables continued light - weighting across global portfolio 70+ yea
Slide 56: Forged Wheels: Technology – More Than Just Metal
1996 1999 2004 2009 2014 2020 2022 Lighter = Lower Cost for Howmet and Higher Value for Fleets Forged Wheels: Technology – More Than Just Metal Competitor Finish Alcoa® Wheels Finish Superior Finishes Wheel Weight (lbs.) Reflective Clarity Comparison Customer Benefits 45% lighter than steel wheels 5
Slide 57: Forged Wheels: Innovations
Forged Wheels: Innovations ▪ 36 Pound Wheel with Patent pending design ▪ Proprietary MagnaForce ® Alloy ▪ 7,400 lbs load capacity ▪ Five year unlimited mile warranty Ultra ONE® 36: Industry’s Lightest Wheel ▪ Easy installation, maintenance and inspection ▪ Minimizes drag ▪ Improves fuel efficiency s
Slide 58: Forged Wheels: Product Integrity
Forged Wheels: Product Integrity Long Term Durability Test High Impact Test ▪ Rigorous product validation and certification process ▪ Track testing and fleet trials ▪ Best in Class analysis and testing tools ▪ Product and Process 3 rd party certified ▪ Multiple regional wheel certification standards
Slide 59: Aluminum Wheels are the Perfect Partner for Alternative Energy Vehicles
Aluminum Wheels are the Perfect Partner for Alternative Energy Vehicles Alcoa® Wheels Offset Added Weight • Increase freight efficiency • Increase fuel economy • Extend battery life & range • Aluminum is 100% recyclable • Closed loop aluminum and ingot casting operations 47% lighter than steel = fre
Slide 60: Emission Reduction Goals are a Secular Tailwind for Aluminum Wheels
Emission Reduction Goals are a Secular Tailwind for Aluminum Wheels Governments are Mandating Environmental Policies • European Green D eal (2019); Target EU Greenhouse Gas neutral by 2050 • Truck OEMs responsible to reduce emissions by 50% in 2030 Zero Emission Vehicles to Increase in Prevalence •
Slide 61: Global Scale - Unmatched Global Network Creates Cost Advantage
HOWMET CLOSEST COMPETITOR Forged Aluminum Wheel Capacity 4x More Global Scale - Unmatched Global Network Creates Cost Advantage MEXICO OHIO (2) BRAZIL SOUTH AFRICA HUNGARY JAPAN CHINA Distribution & Commercial Operations Manufacturing Operations 4x more capacity than next largest competitor Majority
Slide 62: Forged Wheels: Key Messages
Forged Wheels: Key Messages Technology Advantage Brand Strongest and lightest commercial vehicle wheels portfolio in the world Protected globally by patents, trade secrets, and extensive expertise Alcoa® Wheels is the most recognized truck wheel brand globally Growth Opportunity | Global Scale Large
Slide 63: Financial Overview
Financial Overview fF HOWMET Gay AEROSPACE
Slide 64: Progress 2019-2021
Progress 2019 - 2021 Gross debt reduction of ~$2.1B over last 3 years; ~ $845M in 2021 Annualized interest savings of ~$110M through debt actions over last 3 years; ~$70M in 2021 Share repurchases of ~$1.7B over last 3 years; $430M in 2021 Pension Net liability reduction of ~25% Pension and OPEB cas
Slide 65: 2019 vs 2022: Revenue Reduction, Margin Increase, Adjusted EPS Increase
2019 1 vs 2022 2 : ~21% Revenue Reduction, ~ 9 0 bps Margin Increase; ~8 % Adjusted EPS Increase ~21% Reduction in Revenue 2019 1 ~ $5,640 M $7,106 M 2022 - 21% 2022 22.1% ~ 23.0% + 90 bps $1.29 2022 2019 ~$1.39 +8% ~9 0 bps Improvement in Adjusted EBITDA Margin ~8 % Increase in Adjusted EPS ~ 40 %
Slide 66: Strategy Underpinned by Operating Play Book for Enhanced Margins & Cash
Strategy Underpinned by Operating Play Book for Enhanced Margins & Cash Operational Discipline Commercial Discipline Talent Management Continue to flex variable costs Strict focus on maintaining fixed cost reductions Daily Centralized Purchasing Tracking Accounts Receivable 95%+ current Basic lean m
Slide 67: Segment Adjusted EBITDA Margin
Segment Adjusted EBITDA Margin 2019 2020 2021 Q1 22 Future Engine Products 22.7% 22.4% 24.7 % 27.4 % • Increased Airfoil sophistication • Recovery of Rings volumes • Efficiency and throughput Fastening Systems 28.4% 23.7 % 22.9 % 21.2 % • Widebody recovery • Efficiency and throughput Engineered Stru
Slide 68: Capital Discipline & Operational Excellence Driving Free Cash Flow Improvement
Capital Discipline & Operational Excellence Driving Free Cash Flow Improvement Adjusted EBITDA margins improved ~220 basis points in 2021 YoY driving higher Adjusted Free Cash Flow Y ield Pension and OPEB cash contributions expected to improve from ~$240M in 2020 to ~$60M in 2022 Debt actions taken
Slide 69: Balanced Capital Allocation Strategy
Balanced Capital Allocation Strategy Capex Focus on automation projects to improve yields and mitigate labor risk Capex less than depreciation in the near term; net source of cash Debt Paydown Long - term Leverage Target 1.5x - 2.0x Net Debt / Adj. EBITDA Opportunistically Reduce Debt, Gross Pension
Slide 70: Howmet Aerospace Strategy
Howmet Aerospace Strategy Focus on what we are good at to drive growth above market rate Underpin strategy with commercial and operational discipline Prioritize major differentiated products for resource allocation Execute a disciplined capital allocation strategy 70
Slide 71: Howmet Aerospace Management Team
Howmet Aerospace Management Team John Plant , Executive Chairman & Chief Executive Officer Held his role as CEO since February 2019. Mr. Plant has served as a director since 2016 and Chairman of the Board since 2017. Mr. Plant is the former Chairman of the Board, President and Chief Executive Office
Slide 72: Howmet Aerospace Management Team (continued)
Howmet Aerospace Management Team (continued) Merrick Murphy , President, Engine Products Held his current role since March 2022. Prior to this appointment, Mr. Murphy was President, Engineered Structures. Previously, Mr. Murphy was President, Forged Wheels. Mr. Murphy joined the company in 1997. B.A
Slide 73: Q&A
Q&A John C. Plant Executive Chairman & CEO Ken Giacobbe EVP & Chief Financial Officer Vitaliy Rusakov President, Fastening Systems Merrick Murphy President, Engine Products Randall Scheps President, Forged Wheels Ramiro Gutierrez President, Engineered Structures 73
Slide 74: Appendix
Appendix fF HOWMET Gay AEROSPACE
Slide 75: 2022 Guidance
2022 Guidance Q2 2022 Guidance FY 2022 Guidance What we expect in 2022 Low Midpoint High Low Midpoint High ▪ FY 2022 Revenue up ~13% vs. FY 2021, includes material pass through ▪ FY 2022 Adj EBITDA up ~15% vs. FY 2021 ▪ FY 2022 Adj EPS up ~38% vs. FY 2021 ▪ Pension/OPEB Contributions of ~$60M ▪ Cape
Slide 76: Superior Margin Performance During the Aerospace Downturn
0.7% 2.7% - 1.0% - 1.6% - 3.6% - 0.5% - 8.4% - 3.1% - 0.3% Howmet Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 22.8% 11.7% 17.8% 18.6% 17.6% 18.1% 15.7% 22.4% 10.4% Howmet Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 - 30.0% - 26.7% - 36.7% - 9.5% - 26.7% - 24.2% - 43.8% - 12.4
Slide 77: Reconciliation of Income from Continuing Operations Excluding Special Items
77 Reconciliation of Income from Continuing Operations Excluding Special Items ($ in millions, except per - share amounts) FY 2019 FY 2020 FY 2021 Income from continuing operations $126 $211 $258 Diluted EPS $1.03 $0. 48 $0.59 Special items: Restructuring and other charges $582 $182 $90 Discrete tax
Slide 78: Reconciliation of 2021 Adjusted Free Cash Flow
Reconciliation of 2021 Adjusted Free Cash Flow ($ in millions) FY 2021 Cash provided from operations $449 Cash receipts from sold receivables 267 Capital expenditures (199) Adjusted free cash flow (1) $517 The net cash funding from the sale of accounts receivables was neither a use of cash nor a sou
Slide 79: Reconciliation of 2020 Adjusted Free Cash Flow
Reconciliation of 2020 Adjusted Free Cash Flow ($ in millions) FY 2020 Cash provided from operations $9 Cash receipts from sold receivables 422 Capital expenditures (267) Adjusted free cash flow (1) $ 164 Costs associated with the Arconic Inc. Separation Transaction 77 Allocation adjustments (2) 146
Slide 80: Reconciliation of Adjusted EBITDA Excluding Special Items and Allocation Adjustments
Reconciliation of Adjusted EBITDA Excluding Special Items and Allocation Adjustments ($ in millions) FY 20 19 FY 2020 FY 2021 Income from continuing operations after income taxes $ 126 $211 $258 Add: Provision (benefit) for income taxes $ 84 $(40) $66 Other expense, net 31 74 19 Loss on debt redempt
Slide 81: Reconciliation of 2021 Operational Tax Rate
Reconciliation of 2021 Operational Tax Rate ($ in millions) Year ended December 31, 2021 As reported Special items (1)(2) As adjusted Income from continuing operations before income taxes $324 $265 $589 Provision for income taxes $66 $81 $147 Operational tax rate 20.4% 25.0% Operational tax rate is
Slide 82: Reconciliation of 2020 Operational Tax Rate
Reconciliation of 2020 Operational Tax Rate ($ in millions) Year ended December 31, 202 0 As reported Special items (1)(2) As adjusted Income from continuing operations before income taxes $ 171 $ 317 $ 488 Provision for income taxes $ (40) $ 174 $ 134 Operational tax rate (23.4) % 2 7.5 % Operation
Slide 83: Reconciliation of 2020 Adjusted Free Cash Flow Conversion
Reconciliation of 2020 Adjusted Free Cash Flow including Pre - Separation Allocations as a Percentage of Adjusted Income from Continuing Operations (Adjusted Free Cash Flow Conversion) ($ in millions) FY 2020 Cash provided from operations $ 9 Cash receipts from sold receivables 422 Capital expenditu
Slide 84: Reconciliation of 2021 Adjusted Free Cash Flow Conversion
Reconciliation of 2021 Adjusted Free Cash Flow as a Percentage of Income from Continuing Operations (Adjusted Free Cash Flow Conversion) ($ in millions) FY 2021 Cash provided from operations $449 Cash receipts from sold receivables 267 Capital expenditures (199) Adjusted free cash flow (a) $517 Inco
Slide 85: Calculation of Segment Adjusted EBITDA Margin
Calculation of Segment Adjusted EBITDA Margin ($ in millions) FY 2019 FY 2020 FY 2021 Q1 2022 Engine Products Third - party sales $ 3,320 $ 2,406 $ 2,282 $ 631 Segment Adjusted EBITDA $ 752 $ 540 $ 564 $ 173 Segment Adjusted EBITDA Margin 22.7 % 22.4 % 24.7 % 27.4 % Fastening Systems Third - party s
Slide 86: Calculation of Total Segment Adjusted EBITDA and Margin
Calculation of Total Segment Adjusted EBITDA and Margin ($ in millions) FY 2019 FY 2020 FY 2021 Q1 2022 Third - party sales – Engine Products $3,320 $2,406 $2,282 $631 Third - party sales – Fastening Systems $1,255 $1,245 $1,044 $264 Third - party sales – Engineered Structures $1,561 $927 $725 $182
Slide 87: Reconciliation of Total Segment to Consolidated Totals
Reconciliation of Total Segment to Consolidated Totals Reconciliation of Total Segment Adjusted EBITDA to Consolidated Income Before Income Taxes ($ in millions) FY 2019 FY 2020 FY 2021 Q1 2022 Income before income taxes $210 $171 $324 $171 Loss on debt redemption — 64 146 — Interest expense 338 317
Slide 88: rr) HOWMET
rr) HOWMET AEROSPAC