Howmet Aerospace Inc.

Tax and financial reporting · Tax compliance and changes in tax law

Unanticipated changes in Howmet's tax provisions or exposure to additional tax liabilities could affect Howmet's future profitability. Changes in applicable domestic or foreign tax laws and regulations, including the Organization for Economic Cooperation and Development's Pillar 2 framework and related safe harbors, or their interpretation and application, could affect the Company's tax expense and profitability.

Industry regulation · Regulatory compliance and changes

Howmet is also subject to a variety of global legal and regulatory compliance risks in connection with its business and products. These risks include, among other things, potential claims, class action lawsuits or compliance issues, including those relating to securities laws, employment laws, intellectual property rights, cyber, security and privacy, insurance, commercial matters, antitrust and competition, human rights, third-party relationships, governance and sustainability rules and regulations.

Industry regulation · Safety and environmental regulations

Howmet is exposed to environmental, health, and safety risks and is subject to a broad range of health, safety, and environmental laws and regulations which may result in substantial costs and liabilities. The industrial activities conducted at Howmet's facilities present a significant risk of injury or death to our employees or third parties that may be on site.

Geopolitical and trade · International conflicts and tensions

Geopolitical tensions, conflicts, and wars have impacted, and may in the future impact, global energy markets, leading to high volatility and increasing prices for crude oil, natural gas, and other energy supplies. For example, as the Russia-Ukraine conflict continues, global titanium prices may continue to fluctuate.

Geopolitical and trade · Government funding and budget changes

Howmet's products are used in a variety of military applications, including military aircraft. Although many of the military programs in which Howmet participates extend several years, changes in military strategy, policy and priorities, or reductions in defense spending, may affect current and future funding of these programs and could reduce the demand for Howmet's products.

Natural and catastrophic events · Climate change and environmental impact

Howmet may be affected by global climate change or by legal, regulatory, customer, or supplier responses to such change. Increased concern over climate change has led to new and proposed legislative and regulatory initiatives, such as cap-and-trade systems and additional limits on emissions of greenhouse gases, which in turn may trigger customer decarbonization requirements.

Natural and catastrophic events · Natural disasters and extreme weather

Physical risks associated with the climate, such as flooding, extreme winds, and extreme precipitation, expose us to risks of damage of Howmet locations or those of its suppliers or customers. Prolonged periods of drought may result in wildfires and/or restrictions on process water use. These climate-related impacts may have an adverse effect on the production capacity of Howmet sites or those of its suppliers or customers.

Supply chain and procurement · Raw material availability and cost volatility

The costs of certain raw materials (including, but not limited to, nickel, titanium, aluminum, cobalt, and superalloy materials) necessary for the manufacture of Howmet's products and other manufacturing and operating costs are influenced by market forces, including inflation, supply and demand, and shortages.

Human capital and workforce · Labor relations and union negotiations

Labor disputes and other employee relations issues could adversely affect Howmet's business, financial condition, or results of operations. A significant portion of Howmet's employees are represented by labor unions in the United States and other countries under various collective bargaining agreements. Howmet may not be able to negotiate successor collective bargaining agreements upon expiration without a risk of labor disputes, including strikes or work stoppages.

Project and contract management · Government contract dependency

Our business may be adversely affected if we fail to comply with government contracting regulations. We derive a portion of our revenue from sales to U.S. and foreign governments and their respective agencies. Failure to comply with these laws, regulations or provisions in our government contracts could result in the imposition of various civil and criminal penalties, termination of contracts, forfeiture of profits, suspension of payments.

Human capital and workforce · Talent acquisition and retention

Howmet's global operations require qualified and skilled personnel with relevant industry and technical experience. Shortages in certain skills, in areas such as engineering, manufacturing, and technology, and other labor market inadequacies have created more competition for talent. A sustained labor shortage, lack of skilled labor, increased turnover, labor inflation, or increase in general labor costs could lead to higher labor, recruiting, or training costs.

Market position and competition · Market cyclicality and demand volatility

Howmet is subject to cyclical fluctuations in global economic conditions and lightweight metals end-use markets. Howmet sells many products to industries that are cyclical, such as the aerospace and commercial transportation industries, and the demand for our products is sensitive to, and quickly impacted by, demand for the finished goods manufactured by our customers in these industries.

Strategic execution · Merger acquisition and divestiture risks

On December 22, 2025, Howmet entered into a purchase agreement with Stanley Black & Decker, pursuant to which the Company has agreed to purchase CAM for a cash purchase price of approximately $1.8 billion. Howmet may not realize the expected benefits of the Proposed CAM Acquisition, including the anticipated synergies and favorable tax treatment of the proposed transaction and the anticipated broader offering of fastening solutions within the anticipated time frame, or at all.

Customer and revenue · Customer concentration and key customer dependence

Howmet could be adversely affected by the loss of key customers or significant changes in the business or financial condition of its customers. For example, quality control issues at The Boeing Company relating to which the Federal Aviation Administration did not approve production rate increases for the Boeing 737 MAX until October 2025 and a Boeing labor union work stoppage in late 2024 negatively impacted narrow body and wide body production rates.

Market position and competition · Industry consolidation and market concentration

Howmet may face increased competition due to industry consolidation. Companies that are strategic partners in some areas of Howmet's business may acquire or form alliances with Howmet's competitors, thereby reducing their business with Howmet. Consolidation within Howmet's customer base may result in customers who are better able to exert leverage in negotiating prices and other terms of sale.

Technology infrastructure · Technology systems and infrastructure failure

Howmet's information technology systems could be subject to damage or interruption from power outages; computer network and telecommunications failures; cyberattacks; catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes, acts of war, or terrorism; and usage errors by employees.

Cybersecurity and data protection · Data breaches and cyber attacks

Increased global cybersecurity vulnerabilities, threats, and more sophisticated and targeted cyberattacks pose a risk to the security of our systems and networks, and the confidentiality, availability, and integrity of our data. The Company has experienced cybersecurity attacks in the past, including breaches of its information technology systems in which information was taken, and may experience them in the future.

International and currency · International operations and emerging markets

Howmet has operations or activities in numerous countries and regions outside the United States, including Europe, Mexico, China, and Japan. Howmet's global operations are affected by economic, political, legal, and other conditions in the United States and foreign countries in which Howmet does business, including economic and commercial instability risks, geopolitical risks, wars, cyber threats, and terrorist activities.

Capital structure and performance · Dividend policy and capital allocation

Share repurchases and the declaration of dividends fall within the discretion of Howmet's Board of Directors, and the Board's decision regarding such matters depends on many factors, including Howmet's financial condition, earnings, capital requirements, debt service obligations, covenants associated with certain of the Company's debt obligations, industry practice, legal requirements, regulatory constraints, and other factors.

Market and investment · Investment portfolio performance

An adverse decline in the liability discount rate, lower-than-expected investment return on pension assets, and other factors could adversely affect Howmet's results of operations or amount of pension funding contributions in future periods. Adverse capital market conditions could result in reductions in the fair value of plan assets and increase the Company's liabilities related to such plans.