Howmet Aerospace (HWM) 10-K risk factor changes: FY2020 vs FY2019

[removed: Arconic’s] [added: Howmet’s] business, financial condition and results of operations may be impacted by a number of factors.

In addition to the factors discussed elsewhere in this report, the following risks and uncertainties could materially harm [removed: its] [added: the Company’s] business, financial condition or results of operations, including causing [removed: Arconic’s] [added: its] actual results to differ materially from those projected in any forward-looking statements.

The following list of [removed: significant] risk factors is not all-inclusive or necessarily in order of importance.

Additional risks and uncertainties not presently known to [removed: Arconic] [added: Howmet] or that [removed: Arconic] [added: Howmet] currently deems immaterial also may materially adversely affect the Company in future periods.

Risks Related to Our [removed: Business][added: Business and Operations]

The markets for [removed: Arconic’s] [added: Howmet’s] products are highly cyclical and are influenced by a number of factors, including global economic conditions.

[removed: Arconic] [added: Howmet] is subject to cyclical fluctuations in global economic conditions and lightweight metals end-use markets.

[removed: Arconic] [added: Howmet] sells many products to industries that are cyclical, such as the [removed: aerospace, automotive,] [added: aerospace and] commercial transportation [removed: and building and construction] industries, and the demand for its products is sensitive to, and quickly impacted by, demand for the finished goods manufactured by its customers in these industries, which may change as a result of changes in regional or worldwide economies, currency exchange rates, energy prices or other factors beyond its control.

In particular, [removed: Arconic] [added: Howmet] derives a significant portion of its revenue from products sold to the aerospace industry, which can be highly cyclical and reflective of changes in the general economy.

The commercial aerospace industry is historically driven by the demand from commercial airlines for new [removed: aircraft.][added: aircraft and spare parts.]

Demand for commercial aircraft [added: and spare parts] is influenced by airline industry profitability, trends in airline passenger traffic, the state of U.S., regional and world economies, the ability of aircraft purchasers to obtain required financing and numerous other factors including the effects of terrorism, health and safety [removed: concerns,] [added: concerns (including as a result of the COVID-19 pandemic),] environmental constraints imposed upon aircraft operators, the retirement of older aircraft, the performance and cost of alternative materials, and technological improvements to aircraft.

The military aerospace cycle is highly dependent on U.S. and foreign government funding; however, it is also driven by the effects of terrorism, a changing global [removed: political] [added: geopolitical] environment, U.S. foreign policy, the retirement of older military aircraft, and technological improvements to new engines.

Further, the demand for [removed: Arconic’s automotive and ground] [added: Howmet’s commercial] transportation products is driven by the number of vehicles produced by [removed: automotive and] commercial transportation [removed: manufacturers] and [removed: volume of aluminum content per vehicle.][added: automotive manufacturers.]

The automotive industry is [added: also] sensitive to general economic conditions, including credit markets and interest rates, and consumer spending and [added: preferences regarding vehicle ownership and usage, vehicle size, configuration and features.]

[removed: Automotive and commercial] [added: Commercial] transportation [added: and automotive] sales and production [removed: can also be] [added: are] affected by [removed: other] [added: many] factors, including the age of the vehicle fleet and related scrappage rates, labor relations issues, fuel prices, regulatory requirements, government initiatives, trade agreements and levels of [removed: competition both within and outside of the aluminum industry.][added: competition.]

[removed: Arconic] [added: Howmet] is unable to predict the future course of industry variables, the strength of the U.S., regional or global economies, or the effects of government actions.

Negative economic conditions, such as a major economic downturn, a prolonged recovery period, or disruptions in the financial markets, could have a material adverse effect on [removed: Arconic’s] [added: Howmet’s] business, financial condition or results of operations.

[removed: Arconic] [added: Howmet] faces significant competition, which may have an adverse effect on profitability.

As discussed in [Part I, [removed: Item 1.](#s4F41225C55C25FBBAC1F95009955909D)] [added: I](#if209ebc53ef94a25a993a2b3ddc0993f_13)[tem 1](#if209ebc53ef94a25a993a2b3ddc0993f_13)] (Business-Competitive Conditions) of this report, the markets for [removed: Arconic’s] [added: Howmet’s] products are highly competitive.

[removed: Arconic’s] [added: Howmet’s] competitors include a variety of both U.S. and non-U.S. companies in [removed: all major] [added: our product] markets.

New product offerings, new technologies in the marketplace or new facilities may compete with or replace [removed: Arconic] [added: Howmet] products.

The willingness of customers to accept substitutes for the products sold by [removed: Arconic,] [added: Howmet,] the ability of large customers to exert leverage in the marketplace to affect the pricing for [removed: Arconic’s] [added: Howmet’s] products, and technological advancements or other developments by or affecting [removed: Arconic’s] [added: Howmet’s] competitors or customers could adversely affect [removed: Arconic’s] [added: Howmet’s] business, financial condition or results of operations.

In addition, [removed: Arconic] [added: Howmet] may face increased competition due to industry consolidation.

Companies that are strategic alliance partners in some areas of [removed: Arconic’s] [added: Howmet’s] business may acquire or form alliances with [removed: Arconic’s] [added: Howmet’s] competitors, thereby reducing their business with [removed: Arconic.][added: Howmet.]

Consolidation within [removed: Arconic’s] [added: Howmet’s] customer base may result in customers who are better able to command increased leverage in negotiating prices and other terms of sale, which could adversely affect [removed: Arconic’s] [added: Howmet’s] profitability.

Moreover, if, as a result of increased leverage, customers require [removed: Arconic] [added: Howmet] to reduce its pricing such that its gross margins are diminished, [removed: Arconic] [added: Howmet] could decide not to sell certain products to a particular customer, or not to sell certain products at all, which would decrease [removed: Arconic’s revenue.][added: Howmet’s revenue and could benefit its competitors.]

Consolidation within [removed: Arconic’s] [added: Howmet’s] customer base may also lead to reduced demand for [removed: Arconic’s products,] [added: Howmet’s products if] a combined entity [removed: replacing Arconic’s] [added: replaces Howmet’s] products with those of [removed: Arconic’s] [added: Howmet’s] competitors [removed: and cancellations of orders.][added: with which it has prior relationships.]

The result of these developments could have a material adverse effect on [removed: Arconic’s] [added: Howmet’s] business, operating results and financial condition.

[removed: Arconic] [added: Howmet] could be adversely affected by [added: the loss of key customers or significant] changes in the business or financial condition [removed: or the loss] of [removed: a significant customer or] [added: its] customers.

[removed: Arconic] [added: Howmet] has long-term contracts with a significant number of its customers, some of which are subject to renewal, renegotiation or re-pricing at periodic intervals or upon changes in competitive supply conditions.

[removed: Arconic’s] [added: Howmet’s] failure to successfully renew, renegotiate or favorably re-price such agreements, or a material deterioration in or termination of these customer relationships, could result in a reduction or loss in customer purchase volume or revenue.

Additionally, a significant downturn or deterioration in the business or financial condition or loss of a key customer supplied by [removed: Arconic] [added: Howmet] could affect [removed: Arconic’s] [added: Howmet’s] financial results.

[removed: Arconic’s] [added: Howmet’s] customers may experience delays in the launch of new products, labor strikes, diminished liquidity or credit unavailability, weak demand for their products, or other difficulties in their businesses.

[removed: Arconic’s] [added: Howmet’s] customers may also change their business strategies or modify their business relationships with [removed: Arconic,] [added: Howmet,] including to reduce the amount of [removed: Arconic’s] [added: Howmet’s] products they purchase or to switch to alternative suppliers.

If [removed: Arconic’s] [added: Howmet’s] customers reduce, terminate or delay purchases from [removed: Arconic] [added: Howmet] due to the foregoing factors or otherwise and [removed: Arconic] [added: Howmet] is unsuccessful in enforcing its contract rights or replacing such business in whole or in part or replaces it with less profitable business, our financial condition and results of operations may be adversely affected.

[removed: Arconic] [added: Howmet] could encounter manufacturing difficulties or other issues that impact product performance, quality or safety, which could [added: adversely] affect [removed: Arconic’s] [added: Howmet’s] reputation, business and financial statements.

The manufacture of many of [removed: Arconic’s] [added: Howmet’s] products is a highly exacting and complex process.

Such problems could have an adverse impact on the Company’s ability to fulfill orders or [removed: on] [added: meet] product quality or [removed: on] performance.

[added: Because of approval, license and qualification] requirements applicable to manufacturers and/or their suppliers, alternatives to mitigate manufacturing disruptions may not be readily available to [removed: Arconic] [added: Howmet] or its customers.

[removed: Arconic’s] [added: Howmet’s] business depends, in part, on its ability to meet increased program demand successfully and to mitigate the impact of program cancellations, reductions and delays.

Our business, results of operations, financial condition and/or cash flows have been and could continue to be materially adversely affected by the effects of the COVID-19 pandemic.

Any outbreaks of contagious diseases, public health epidemics or pandemics and other adverse public health developments in countries where we, our employees, customers and suppliers operate could have a material and adverse effect on our business, results of operations, financial condition and/or cash flows.

Specifically, the COVID-19 pandemic affecting the global community, including the United States, Europe and South America, is adversely impacting our operations, and the nature and extent of the impact over time is highly uncertain and beyond our control.

The extent to which COVID-19 further affects our operations over time will depend on future developments, which are highly uncertain, including the duration of the pandemic, the continued severity of the virus, resurgences and emergence of variants of the virus, the efficacy and availability of vaccines, and the extent of actions that may be taken to contain its impact.

These actions include, but are not limited to, declarations of states of emergency, business closures, manufacturing restrictions and a prolonged period of travel, commercial and/or other similar restrictions and limitations, many of which have been implemented across much of the globe and all of which have negatively affected our business.

The longer the duration, the greater the impact on our business and the more heightened the risk of a continuing material adverse effect on our business, results of operations, financial conditions and/or cash flows, as well as on our business strategies and initiatives.

We continue to monitor guidelines proposed by federal, state and local, as well as foreign, governments with respect to measures for continued operation, which may change over time depending on public health, safety and other considerations.

We are continuing to focus on the safety and protection of our workforce by continuing to implement additional safety protocols in light of COVID-19.

As a result of COVID-19 and the measures designed to contain its spread, our global sales, including to customers in the aerospace and commercial transportation industries that are impacted by COVID-19, have been and are expected to continue to be negatively impacted due to the disruption in demand, which has had and over time could continue to have a material adverse effect on our business, results of operations, financial condition and/or cash flows.

The COVID-19 pandemic has subjected our operations, financial performance and financial condition to a number of risks, including, but not limited to, those discussed below:

- *Business and operations risks:* We continue to monitor the evolving situation relating to COVID-19 to determine whether we will need to significantly modify our business practices or take actions as may be required by government authorities or that we determine are in the best interests of our employees, customers, partners, suppliers and shareholders.

We have had a number of smaller manufacturing locations that have experienced periods of shutdowns.

Future shutdowns will be dependent on facts and circumstances as they unfold, including based on the restrictions and limitations noted above.

Additional shutdowns, while not required by governmental authorities, may be necessary to match our production to the reduced demand of our customers.

In addition, due to the foregoing factors and potential further disruptions, we may be unable to perform fully on our contracts and our costs may increase.

We may also face challenges in restoring our production levels if and when COVID-19 abates, including as a result of government-imposed or other limitations that prevent the return of all or a portion of our workforce, continue to disrupt demand and/or limit the capabilities of our suppliers.

As a result of COVID-19 and its potential impact on the aerospace industry, the possibility exists that a sustained impact to our operations, financial results and market capitalization may require material impairments of our assets, including, but not limited to, goodwill, intangible assets, long-lived assets, and right-of-use assets.

While we have already implemented plans to reduce costs, including certain headcount reductions, reductions in certain cash outflows, suspension of our common stock dividend and reductions in the levels of our capital expenditures, the longer-term impact of the COVID-19 pandemic is uncertain, but could continue to have a material adverse effect on our business, results of operations, financial condition and/or cash flows.

- *Customer and supplier risks*: We have limited visibility into future demand due to the disruptions resulting from COVID-19.

The sharp decrease in air travel resulting from the COVID-19 pandemic and the measures that governments and private organizations worldwide have implemented in an attempt to contain its spread is adversely affecting, and will likely continue to adversely affect, airlines and airframers and their respective demand for our customers’ products and services.

Aircraft manufacturers are reducing production rates due to fewer expected aircraft deliveries and, as a result, demand for products in the OEM market has significantly decreased.

Several of our aerospace and commercial transportation customers temporarily suspended operations at certain production sites,

reduced operations and production rates, and/or took cost-cutting actions, including, but not limited to, General Electric Company, Raytheon Technologies Corporation and The Boeing Company, which represented approximately 11%, 9% and 8%, respectively, of our third-party sales in 2020.

Due to the foregoing factors and other cost-cutting measures, we are experiencing, and expect to continue experiencing, lower demand and volume for our products, customer requests for potential payment deferrals, pricing concessions or other contract modifications, and delays in deliveries and the achievement of other billing milestones.

COVID-19 may also limit the ability of our counterparties generally to perform their obligations to us, including, but not limited to, our customers’ ability to make timely payments to us.

These trends may lead to charges, impairments and other adverse financial impacts over time, as noted above, as we have historically depended upon the strength of these industries, particularly the commercial aerospace industry.

In addition, the ongoing COVID-19 pandemic may negatively impact customer contract negotiations, including the ability to negotiate acceptable terms in contract renewal negotiations and our ability to obtain new customers.

Similarly, our suppliers may not have the materials, capacity, or capability to manufacture our products according to our schedule and specifications.

To date, we have not experienced significant disruption to our supply chain.

If our suppliers’ operations were to be impacted, we may need to seek alternate suppliers, which may be more expensive, may not be available or may result in delays in shipments to us and subsequently to our customers, each of which would adversely affect our business, results of operations, financial condition and/or cash flows.

The duration of the current disruptions to our customers and to our supply chain, and related financial impact to us, cannot be estimated at this time.

Should such disruption continue for an extended period of time, the impact will have a material adverse effect on our business, results of operations, financial condition and/or cash flows.

Ultimately, the demand for our products is, in turn, driven by demand for transportation and for people to travel within and between various countries.

Should the COVID-19 pandemic cause a long-term deterioration in demand for transportation or travel due to fear or anxiety related to health concerns, governmental restriction, economic hardships, or increased use of electronic communication technologies embraced during the COVID-19 related shutdowns, the effects on our business may extend well beyond the current COVID-19 health crisis and immediate related governmental actions.

- *Market risks*: The current financial market dynamics and volatility pose heightened risks to our liquidity.

For example, dramatically lower interest rates and lower expected asset valuations and returns can materially impact the calculation of long-term liabilities such as our pension.

In addition, extreme volatility in financial markets has had and may continue to have adverse impacts on other asset valuations such as the value of the investment portfolios supporting our pension.

Our long-term liabilities are sensitive to numerous factors and assumptions that can move in offsetting directions and should be considered as of the time of a relevant measurement event.

- *Liquidity and credit risks*: We currently have the ability to borrow up to $1.0 billion under our Five-Year Revolving Credit Agreement (the “Credit Agreement”), which was amended in June 2020.

A prolonged period of generating lower financial results and cash from operations could adversely affect our financial condition, including in respect of satisfying both required and voluntary pension funding requirements, could result in potential increases in net debt or reductions in EBITDA, and could otherwise negatively affect our ability to achieve our strategic objectives.

preferences regarding vehicle ownership and usage, vehicle size, configuration and features.

For example, in 2019, Boeing announced a temporary reduction in the production rate of, and subsequently announced a temporary suspension of production of, the Boeing 737 MAX aircraft, which has resulted in, and is expected to continue to result in, a reduction in sales of aluminum sheet and plate and other products that Arconic produces for Boeing airplanes.

As no firm timeline has been established for either the adjustment of Boeing’s manufacturing plans, or for returning the aircraft into service, we are currently unable to definitively quantify any such potential impact.

Because of approval, license and qualification

For further discussion of potential liability associated with some of our products, including proceedings and investigations relating to the June 13, 2017 fire at the Grenfell Tower in London, U.K., see [Part I, Item 3](#sE4498AA1E27A5E59AE61AB67CAF21E95).

(Legal Proceedings) of this report.

| | |

| --- | --- |

| • | war or terrorist activities; |

| • | kidnapping of personnel; |

| • | labor unrest, including strikes; |

Furthermore, because customers may be dependent on planned deliveries from us, customers that have to reschedule their own production due to our delivery delays may be able to pursue financial claims against us, and we may incur costs to correct such problems in addition to any liability resulting from such claims.

Future targets and goals reflect the Company’s beliefs and assumptions and its perception of historical trends, then current conditions and expected future developments, as well as other factors appropriate in the circumstances.

There can be no assurance that any targets or goals established by the Company will be accomplished at the levels or by the dates targeted, if at all.

trigger letter of credit or other collateral postings, or otherwise impair its business, financial condition, and results of operations.

On May 1, 2017, Standard and Poor’s Ratings Services (S&P) affirmed Arconic’s long-term debt at BBB-, an investment grade rating, with a stable outlook, and its short-term debt at A-3.

On February 7, 2019, S&P placed the rating on negative credit watch and, subsequently, on April 26, S&P affirmed the long-term debt rating at BBB- but changed the outlook to negative.

On January 28, 2020, S&P affirmed the long-term debt rating at BBB- but changed the outlook to stable in expectation of the Separation impact.

On November 1, 2016, Moody’s Investor Service (Moody’s) downgraded Arconic’s long-term debt rating from Ba1, a non-investment grade, to Ba2 with a stable outlook and its short-term debt rating from Speculative Grade Liquidity-1 to Speculative Grade Liquidity-2.

Moody’s ratings and outlooks were affirmed on November 2, 2017, October 8, 2018, and October 9, 2019.

On January 24, 2020, Moody’s affirmed the long-term debt rating at Ba2 but changed the outlook to negative.

On April 21, 2016, Fitch affirmed Arconic’s long-term debt rating at BB+, a non-investment grade, and short-term debt at B.

Additionally, Fitch changed the outlook from positive to evolving.

On July 7, 2016, Fitch changed the outlook from evolving to stable (ratings and outlook were affirmed on July 3, 2017).

On September 27, 2018, Fitch changed the outlook from stable to positive (ratings and outlook were affirmed on October 8, 2019).

liabilities, which may result in a significant charge to shareholders’ equity.

(Management’s Discussion and Analysis of Financial Condition and Results of Operations) and Note [F](#s2DB91AED44975C118BBB41DF8AEE9BFF) to the Consolidated Financial Statements-Pension and Other Postretirement Benefits in [Part II, Item 8](#sF2632D3E53605B1596C942D86FA3D8E0).

(Financial Statements and Supplementary Data).

In 2014, the Highway and Transportation Funding Act (HATFA) was signed into law.

BBA 2015 extends the relief period provided by HATFA.

These changes to the U.S. corporate tax system could have a substantial impact, positive or negative, on Arconic’s future effective tax rate, cash tax expenditures, and deferred tax assets and liabilities.

national governments, or other stakeholders.

Whether or not Arconic holds majority interests or maintains operational control in such arrangements, its partners may:

| • | have economic or business interests or goals that are inconsistent with or opposed to those of the Company; |

| • | exercise veto rights to block actions that Arconic believes to be in our or the joint venture’s or strategic alliance’s best interests; |

| • | take action contrary to Arconic’s policies or objectives with respect to investments; or |

| • | as a result of financial or other difficulties, be unable or unwilling to fulfill their obligations under the joint venture, strategic alliance or other agreements, such as contributing capital to expansion or maintenance projects. |

Arconic derives a significant portion of its revenue from aluminum-based products.

The price of primary aluminum has historically been subject to significant cyclical price fluctuations and the timing of changes in the market price of aluminum is largely unpredictable.

Although the Company’s pricing of products is generally intended to pass substantially all the risk of metal price fluctuations on to the Company’s customers or is otherwise hedged, there are situations where Arconic is unable to pass on the entire cost of increases to its customers and there is a potential time lag on certain products between increases in costs for aluminum and the point when the Company can implement a corresponding increase in price to its customers and/or there are other timing factors that may result in Arconic's exposure to certain price fluctuations which could have a material adverse effect on Arconic’s business, financial condition or results of operations.

(dollars in millions, except per-share [removed: amounts; shipments in thousands of metric tons \[kmt\])][added: amounts)]

[removed: Arconic Inc. (“Arconic” or the “Company”)] [added: Howmet] is a global leader in lightweight metals engineering and manufacturing.

[removed: Arconic’s] [added: Howmet’s] innovative, multi-material products, which include [removed: aluminum,] [added: nickel,] titanium, [added: aluminum,] and [removed: nickel,] [added: cobalt,] are used worldwide in [removed: aerospace, automotive,] [added: the aerospace (commercial and defense),] commercial transportation, [removed: building] and [removed: construction,] industrial [removed: applications, defense,] and [removed: packaging.][added: other end markets.]

[removed: Arconic] [added: Howmet] is a global company operating in [removed: 18] [added: 20] countries.

Based upon the country where the point of [removed: sale] [added: shipment] occurred, the United States and Europe generated [removed: 67%] [added: 68%] and [removed: 23%,] [added: 21%,] respectively, of [removed: Arconic’s] [added: Howmet’s] sales in [removed: 2019.][added: 2020.]

In addition, [removed: Arconic] [added: Howmet] has operating activities in numerous countries and regions outside the United [removed: States, including] [added: States and] Europe, [added: including] Canada, [removed: China, Japan,] [added: Mexico, China] and [removed: Russia.][added: Japan.]

Governmental policies, laws and regulations, and other economic factors, including inflation and fluctuations in foreign currency exchange rates and interest rates, affect the results of operations in countries with such operating [removed: activities.][added: activities.]

Management Review [removed: of 2019 and] [added: of 2020 and] Outlook for the Future

This focus and the related results enabled [removed: Arconic] [added: Howmet] to end [removed: 2019] [added: 2020] with a solid financial position.

The following financial information reflects certain key highlights of [removed: Arconic’s 2019] [added: Howmet’s 2020] results:

[removed: | • |] [added: -] Cash on hand at the end of the year of [removed: $1,648;] [added: $1,610;] and [removed: |]

[removed: (1) *For] [added: See below for] the reconciliation of [removed: Total segment operating profit to Consolidated income] [added: Income from continuing operations] before income taxes [removed: and related information, see page 43.*][added: to Total segment operating profit.]

The Company rapidly executed on the separation plan that was announced [removed: in] [added: during] February 2019 [removed: and is targeting] [added: with] completion of the separation on April 1, 2020.

The [removed: company will separate] [added: Company separated] into two independent, publicly-traded companies, [removed: to be named] Howmet Aerospace Inc. [removed: (Remain Co.)] and Arconic Corporation [removed: (Spin Co.)] (the [removed: “Separation of Arconic”).][added: “Arconic Inc. Separation Transaction”).]

[removed: Remain Co. will be] [added: Howmet Aerospace is] comprised of the [removed: Company’s] Engineered Products and Forgings businesses (engine products, fastening systems, engineered [removed: structures] [added: structures,] and forged wheels) and [removed: will be renamed Howmet Aerospace Inc. at separation and change its] [added: is listed under the] stock ticker [removed: from “ARNC” to] [added: of] “HWM.” [removed: Spin Co. will be] [added: Arconic Corporation is] comprised of the [removed: Company’s] [added: former] Global Rolled Products [removed: businesses] [added: segment] (global rolled products, aluminum [removed: extrusions] [added: extrusions,] and building and construction systems) and [removed: will be held by a] [added: is under the] new company [removed: that will be named] [added: name] Arconic [removed: Corporation at separation and that intends to list its common stock] [added: Corporation, listed] on the New York Stock Exchange under the symbol “ARNC.”

[removed: Sales.] Sales for 2019 were [removed: $14,192] [added: $7,098] compared with [removed: $14,014] [added: $6,778] in 2018, an increase of [removed: $178,] [added: $320,] or [removed: 1%.][added: 5%.]

The increase was primarily due to volume growth in [removed: the] aerospace, [removed: packaging,] commercial transportation, and industrial end markets; [removed: favorable product pricing] and [removed: mix in the GRP segment; and] favorable [removed: product] pricing [removed: in the EP&F segment] when fulfilling volume above contractual [removed: share, renewing contracts,] [added: share] and [removed: selling non-contractual spot business;] [added: renewing contracts;] partially offset by lower [removed: aluminum prices; lower] sales [removed: of $216] from the [removed: completed ramp down of Arconic's North American packaging operations (in December 2018) and the] divestitures of forgings businesses in the United Kingdom (divested in December 2019) and Hungary (divested in December [removed: 2018), and the Latin America extrusions business (divested in April] 2018); and unfavorable foreign currency movements.

[removed: Cost of Goods Sold (COGS).] COGS as a percentage of Sales was [removed: 79.1%] [added: 73.5%] in 2019 compared with [removed: 81.3%] [added: 75.4%] in 2018.

The decrease was primarily due to lower raw material [removed: costs including aluminum prices;] [added: costs;] net [removed: cost] [added: costs] savings; favorable product pricing; and costs incurred in 2018 that did not recur in 2019 related to settlements of certain customer [removed: claims of $38 noted above] [added: claims, partially offset by an unfavorable product mix] and [removed: a charge related to a physical inventory adjustment at one plant in] the [removed: GRP segment] [added: impairment] of [removed: $23.][added: energy business assets of $10.]

The Company submitted an insurance claim and received [removed: a] partial settlement of $25, which was in excess of its $10 insurance deductible.

Selling, General Administrative, and Other Expenses (SG&A). SG&A expenses were [removed: $704,] [added: $277,] or [removed: 5.0%] [added: 5.3%] of Sales, in [removed: 2019] [added: 2020] compared with [removed: $604,] [added: $400,] or [removed: 4.3%] [added: 5.6%] of Sales, in [removed: 2018.][added: 2019.]

The increase in SG&A of [removed: $100,] [added: $29,] or [removed: 17%,] [added: 8%,] was primarily due to costs associated with the [removed: planned Separation of] Arconic [added: Inc. Separation Transaction] of [removed: $78] [added: $5] and higher annual incentive compensation accruals and executive compensation costs, partially offset by lower costs driven by overhead cost reductions and lower net legal and other advisory costs related to Grenfell Tower of $10, primarily due to insurance reimbursements.

Research and Development Expenses (R&D). R&D expenses were [removed: $70] [added: $17] in [removed: 2019] [added: 2020] compared with [removed: $103] [added: $28] in [removed: 2018.][added: 2019.]

The decrease of [removed: $33,] [added: $13,] or 32%, was primarily due to the consolidation of the Company's primary R&D facility in conjunction with ongoing cost reduction efforts.

[removed: Provision for Depreciation and Amortization (D&A).] The provision for D&A was [removed: $536] [added: $295] in 2019 compared with [removed: $576] [added: $314] in 2018.

The decrease of [removed: $40,] [added: $19,] or [removed: 7%,] [added: 6%] was primarily due to the impact of divestitures, as well as asset impairments [removed: in] [added: of] the [removed: EP&F segment] [added: Disks long-lived asset group] during the second quarter of 2019 (see Note [removed: [M](#sC671688584E8565FB69B015B8859DB9B)] [added: [O](#if209ebc53ef94a25a993a2b3ddc0993f_139) and [P](#if209ebc53ef94a25a993a2b3ddc0993f_142)] to the Consolidated Financial Statements in Part II, Item 8.

[removed: (Financial] [added: Financial] Statements and Supplementary [removed: Data)] [added: Data] of this Form [removed: 10-K).][added: 10-K.]

Restructuring and Other Charges. Restructuring and other charges were [removed: $620] [added: $182] in [removed: 2019] [added: 2020] compared with [removed: $9] [added: $582] in [removed: 2018] [added: 2019] and [removed: $165] [added: $163] in [removed: 2017.][added: 2018.]

Restructuring and other charges in 2019 [added: consisted] primarily [removed: included asset impairments] of [removed: $556, related to] [added: a $428 charge for impairment of] the Disks [added: long-lived] asset [removed: group] [added: group; a $69 charge for layoff costs; a $46 charge for impairment] of [removed: $428, agreements] [added: assets associated with an agreement] to sell the [removed: Company’s Brazilian rolling mill operations, the] U.K. forgings [removed: business, and] [added: business;] a [removed: small additive business] [added: $14 charge for impairment] of [removed: $112, and a trade name intangible asset and] properties, [removed: plant,] [added: plants,] and equipment related to the Company’s primary research and development [removed: facility] [added: facility; a $13 loss on sale] of [removed: $25; and] [added: assets primarily related to] a [added: small additive business; a $12] charge for [removed: layoff] [added: other exit] costs [added: from lease terminations primarily related to the exit] of [removed: $103, including] the [removed: separation] [added: corporate aircraft; a $9 settlement accounting charge for U.S. pension plans; a $5 charge for impairment] of [removed: approximately 1,310 employees;] [added: a cost method investment; and a $7 charge for other exit costs; which were] partially offset by a benefit [removed: from] [added: of $16 related to] the elimination of the life insurance benefit for the U.S. salaried and non-bargaining hourly retirees of the Company and its [removed: subsidiaries of $58; and a gain for contingent consideration received from the sale of the Texarkana rolling mill of $20.][added: subsidiaries.]

See Note [removed: [C](#sD9CA82AEB8D2531F8E367A74B8644F4A) to the] [added: [E](#if209ebc53ef94a25a993a2b3ddc0993f_100)] to the Consolidated Financial Statements in Part II, Item 8.

[removed: (Financial Statements and] Supplementary [removed: Data)] [added: Data] of this Form [removed: 10-K.][added: 10-K)) and $119 in dividends to shareholders.]

[removed: Interest Expense.] Interest expense was $338 in 2019 compared with [removed: $378] [added: $377] in 2018.

The decrease of [removed: $40,] [added: $39,] or [removed: 11%,] [added: 10%,] was primarily due to lower debt outstanding, driven by the repayment of the aggregate outstanding principal amount of the 1.63% Convertible Notes of approximately $403 on October 15, 2019, as well as costs incurred of $19 in 2018 related to the premium paid on the early redemption of the Company’s then outstanding 5.72% Senior Notes due [added: in] 2019 that did not recur in 2019.

[removed: Other Expense (Income), Net.] Other [removed: expense,] [added: expense (income),] net was [removed: $122] [added: $31] in 2019 compared with [removed: $79] [added: Other expense (income), net of $(30)] in 2018.

The increase [added: in Other expense, net] of [removed: $43] [added: $61] was primarily due to an increase in deferred compensation [removed: arrangements and related investment performance] [added: expense of $32] and the benefit recognized in 2018 from establishing a tax indemnification receivable reflecting Alcoa Corporation’s 49% share of a Spanish tax reserve of [removed: $29 that did not recur in 2019, partially offset by favorable foreign currency movements.][added: $29.]

[added: Other Expense (Income), Net.] Other [removed: expense,] [added: expense (income),] net was [removed: $79] [added: $74] in [removed: 2018] [added: 2020] compared with [removed: Other income, net of $486] [added: $31] in [removed: 2017.][added: 2019.]

(Financial Statements and Supplementary [removed: Data) of this Form 10-K),] [added: Data));] and [added: dividends paid to shareholders of $57.]

[removed: Income Taxes. Arconic’s] [added: Howmet’s] effective tax rate was [removed: 18.3%] [added: 40.0% (provision on pre-tax income)] in 2019 compared with the U.S. federal statutory rate of 21%.

[removed: Arconic’s] [added: Howmet’s] effective tax rate was [removed: 26.0%] [added: 27.8% (provision on pre-tax income)] in 2018 compared with the U.S. federal statutory rate of 21%.

The effective tax rate differs from the U.S. federal statutory rate primarily as a result of a $60 charge to establish a tax reserve in Spain, a $59 net charge resulting from the [removed: Company’s] [added: Company's] finalized analysis of the U.S. Tax Cuts and Jobs [removed: Acts] [added: Act] of 2017 [removed: ("the 2017] [added: (the "2017] Act"), [removed: a $13 charge for U.S. state taxes,] [added: and] foreign income taxed in higher rate [removed: jurisdictions,] [added: jurisdictions] and [removed: foreign losses with no tax benefit,] [added: subject to U.S. taxes including GILTI,] partially offset by a $74 benefit related to the reversal of a foreign recapture obligation, a $38 benefit to reverse a foreign tax reserve that [removed: is] [added: was] effectively settled, and a $10 benefit for the release of U.S. valuation allowances.

In 2020, Sales decreased 26% over 2019 primarily as a result of lower volumes in the commercial aerospace and commercial transportation markets driven by the impacts of COVID-19 and 737 MAX and 787 production declines along with a decrease in sales of $116 due to the divestiture of the forgings business in the United Kingdom in December 2019, all partially offset by 14% and 28% sales growth in the defense aerospace and industrial gas turbine markets, respectively, as well as favorable product pricing.

In the segments, Segment operating profit decreased 36% from 2019 due to lower volumes in the commercial aerospace and commercial transportation markets driven by the impacts of COVID-19 and 737 MAX and 787 production declines and unfavorable product mix, partially offset by favorable product pricing, net cost savings and 14% and 28% sales growth in the defense aerospace and industrial gas turbine markets, respectively.

- Sales of $5,259 down 26% from 2019, with significant reductions in sales in commercial aerospace and commercial transportation markets, driven by COVID-19 and 737 MAX and 787 production declines;

- Net income from continuing operations of $211, or $0.48 per diluted share;

- Income from continuing operations before income taxes of $171, a decrease of $39, or 19%, from 2019;

- Total segment operating profit of $890, a decrease of $500, or 36%, from 2019(1);

- Cash provided from operations of $9; cash used for financing activities of $369; and cash provided from investing activities of $271;

- Total debt of $5,075, primarily due to a decrease of $865 from 2019, reflecting repayments of $2,040 along with $20 of other debt, partially offset by issuance of debt during the second quarter of 2020 of $1,200 notes due 2025.

(1) *See below in Results of Operations for the reconciliation of Total segment operating profit to Income from continuing operations before income taxes.*

Sales. Sales for 2020 were $5,259 compared with $7,098 in 2019, a decrease of $1,839, or 26%.

The decrease was primarily a result of lower volumes in the commercial aerospace and commercial transportation markets driven by the impacts of

COVID-19 and 737 MAX and 787 production declines along with a decrease in sales of $116 due to the divestiture of the forgings business in the U.K. in December 2019, all partially offset by growth in the defense aerospace and industrial gas turbine markets and favorable product pricing.

Cost of Goods Sold (COGS). COGS as a percentage of Sales was 73.7% in 2020 compared with 73.5% in 2019.

The increase was primarily due to the impact of COVID-19 and lower volumes, partially offset by net cost savings, favorable product pricing, intentional product exits, and the impairment of energy business assets of $10 in the second quarter of 2019.

In 2019, the Company sustained a fire at a fasteners plant in France.

Additionally, in mid-February 2020, a fire occurred at the Company's forged wheels plant located in Barberton, Ohio.

The Company submitted insurance claims related to these plant fires and received partial settlements of $39 in 2020 compared to $25 in 2019, which were in excess of the insurance deductible.

In 2020, the Company recorded charges of $41 related to plant fires compared to $26 in 2019.

The downtime reduced production levels and affected productivity at the plants.

The decrease in SG&A of $123, or 31%, was primarily due to overhead cost reductions and lower net legal and other advisory costs related to Grenfell Tower of $20, partially offset by higher costs associated with the Arconic Inc. Separation Transaction through June 30, 2020 of $2.

SG&A expenses were $400, or 5.6% of Sales, in 2019 compared with $371, or 5.5% of Sales, in 2018.

The decrease of $11, or 39%, was primarily due to the continued consolidation of the Company's primary R&D facility in conjunction with ongoing cost reduction efforts.

R&D expenses were $28 in 2019 compared with $41 in 2018.

Provision for Depreciation and Amortization (D&A). The provision for D&A was $279 in 2020 compared with $295 in 2019.

The decrease of $16, or 5%, was primarily driven by asset impairments of the Disks long-lived assets group during the second quarter of 2019 (see Notes [O](#if209ebc53ef94a25a993a2b3ddc0993f_139) and [P](#if209ebc53ef94a25a993a2b3ddc0993f_142) to the Consolidated Financial Statements in Part II, Item 8.

(Financial Statements and Supplementary Data) of this Form 10-K) and the impact of divestitures as well as lower corporate software amortization and research center depreciation, which were partially offset by increased Forged Wheels D&A due to the capacity expansion in Hungary, capacity expansions at two U.S. facilities and an additional $6 D&A related to the Barberton fire.

Restructuring and other charges in 2020 consisted primarily of a $113 charge for layoff costs, a $74 charge for U.K. and U.S. pension plans' settlement accounting; a $5 post-closing adjustment related to the sale of the Company’s U.K. forgings business; a $5 charge for impairment of assets associated with an agreement to sell an aerospace components business in the U.K that did not occur and the business was returned to held for use; $5 charge related to the impairment of a cost method investment, which were partially offset by a benefit of $21 related to the reversal of a number of prior period programs;

Restructuring and other charges in 2018 consisted primarily of a $96 charge for pension plan settlement accounting; a $23 charge for pension curtailment; a $43 loss on sale of a Hungary forgings business; a $18 charge for layoff costs; a $12 charge for contract termination costs and asset impairments associated with the shutdown of a facility in Acuna, Mexico; which were offset partially by a $28 postretirement curtailment benefit.

Interest Expense. Interest expense was $381 in 2020 compared with $338 in 2019.

The increase of $43, or 13%, was primarily due to premiums paid on the early redemption of debt of $59 which was offset by lower debt outstanding in 2020 driven by the early redemption of $1,000, $889 and $151 of the principal amount of the 6.150% Notes, 5.400% Notes due in 2021 and 5.870% Notes due in 2022, respectively, in April and May 2020, which was offset by the issuance on April 24, 2020 of the 6.875% Notes due 2025 in the aggregate principal amount of $1,200.

On January 15, 2021, the Company completed the early redemption of all of the remaining $361 aggregate principal amount of the 5.400% Notes due in April 2021 (the "5.400% Notes") as well as $5 in accrued interest.

The redemption of these 5.400% Notes will save approximately $5 in Interest expense, net in the first quarter of 2021 and $19 annually.

The increase in expense of $43 was primarily driven by the write-off of an indemnification receivable related to a Spanish tax reserve reflecting Alcoa Corporation's 49% share and Arconic Corporation's 33.66% share of a Spanish tax reserve of $53 and lower interest income of $19, which were partially offset by lower deferred compensation expense of $14 and favorable foreign currency movements of $16.

The effective rate differs from the U.S. federal statutory rate primarily as a result of a $64 benefit related to the release of an income tax reserve following a favorable Spanish tax case decision, a $30 benefit related to the recognition of a previously uncertain U.S. tax position, and a $30 benefit for a U.S. tax law change related to the issuance of final regulations that provide for an exclusion of certain high-taxed foreign earnings from the calculation of Global Intangible Low-Taxed Income ("GILTI"), partially offset by U.S. tax on foreign earnings, $8 of charges related to the remeasurement of deferred tax balances as a result of the Arconic Inc. Separation Transaction, the tax impact of $49 of nondeductible loss related to the reversal of indemnification receivables associated with the favorable Spanish tax case decision, and the tax impact of other nondeductible expenses.

The effective rate differs from the U.S. federal statutory rate primarily as a result of foreign income taxed in higher rate

jurisdictions and subject to U.S. taxes including GILTI, foreign losses with no tax benefit, and other nondeductible expenses, partially offset by a $24 benefit associated with the deduction of foreign taxes that were previously claimed as a U.S. foreign tax credit, and a $12 benefit for a foreign tax rate change.

Net Income from Continuing Operations. Net income from continuing operations was $211, or $0.48 per diluted share, for 2020 compared to $126, or $0.27 per diluted share, in 2019.

The increase in results of $85, or 67%, was primarily due to the non-recurring 2019 impact of the $428 charge for impairment of the Disks long-lived asset group included in Restructuring and other charges, a decrease of $123 due to lower SG&A costs, favorable product pricing, and a net $10 related to the settlement of the Spanish corporate income tax audit, partially offset by a decrease in volumes in the commercial aerospace and commercial transportation markets, the impact of COVID-19, and an increase in premiums paid on the early redemption of debt of $59.

Net income from continuing operations was $126, or $0.27 per diluted share, for 2019 compared to $309, or $0.63 per diluted share, for 2018.

Net Income. Net income was $261 for 2020 composed of $211 of income from continuing operations and $50 from discontinued operations, or $0.48 and $0.11 per diluted share, respectively.

In 2019, Sales increased 1% over 2018 as a result of volume growth in the aerospace, packaging, commercial transportation, and industrial end markets; and favorable product pricing in the Global Rolled Products (GRP) and Engineered Products and Forgings (EP&F) segments; partially offset by lower aluminum prices; and lower sales of $216 from divestitures of forgings businesses in the United Kingdom (divested in December 2019) and Eger, Hungary (divested in December 2018), Latin America extrusions (divested in April 2018), and the completed ramp down of Arconic's North American packaging operations (in December 2018).

In the segments, Segment operating profit increased 27% from 2018 due to favorable product pricing, net cost savings, lower raw material costs including aluminum price, and higher volumes, partially offset by the impact of the Tennessee plant transition to industrial production, operational challenges at one aluminum extrusions plant, and higher variable compensation costs.

| | |

| --- | --- |

| • | Sales of $14,192, up 1% from 2018, with growth in key end markets, and Net income of $470, or $1.03 per diluted share; |

| • | Total segment operating profit of $2,015, an increase of $429, or 27%, from 20181; |

| • | Cash provided from operations of $406; cash used for financing activities of $1,568, reflecting the Company’s repurchase of $1,150 of its common stock and the repayment of convertible notes in 2019; and cash provided from investing activities of $583; |

| • | Total debt of $5,940, a decrease of $390 from 2018, reflecting repayment of $403 of convertible notes in October 2019. |

On February 5, 2020, Arconic’s Board of Directors approved the completion of the Separation of Arconic by means of a pro rata distribution by the Company of all of the outstanding common stock of Arconic Corporation, with each Arconic Inc. stockholder of record as of the close of business on March 19, 2020 receiving one share of Arconic Corporation common stock for every four shares of the Company’s common stock held as of the record date.

On February 7, 2020, the Company announced that Arconic Rolled Products Corporation (the “Issuer”), which is currently a wholly-owned subsidiary of Arconic,

closed its offering of $600 aggregate principal amount of 6.125% second-lien notes due 2028.

The proceeds will be used to make a payment to Arconic to fund the transfer of certain assets to the Issuer in connection with the separation and for general corporate purposes.

On February 13, 2020, the Registration Statement on Form 10 for Arconic Rolled Products Corporation was declared effective by the Securities and Exchange Commission.

In conjunction with the Separation of Arconic, the Company realigned its reporting segments in the third quarter of 2019 by eliminating its Transportation and Construction Solutions segment and transferring the forged wheels business to the EP&F segment and transferring the building and construction systems business to the GRP segment.

The Company also executed on its plan to sell businesses that do not best fit into one of its two segments, having signed or closed on divestitures in 2019 resulting in proceeds of approximately $190.

Sales for 2018 were $14,014 compared with $12,960 in 2017, an increase of $1,054, or 8%.

The increase was the result of strong volume growth across both segments, primarily in the aerospace engines and defense, automotive, commercial transportation, industrial, and building and construction end markets; higher aluminum prices and favorable product mix primarily in the GRP segment; and favorable foreign currency movements; partially offset by a decline in volumes in the industrial gas turbine end market; lower sales of $190 from the divestitures of the Latin America extrusions business, the rolling mill in Fusina, Italy (divested in March 2017), and the ramp down of Arconic's North American packaging operations; and costs of $38 in 2018 related to settlements of certain customer claims primarily related to product introductions.

These positive impacts were partially offset by unfavorable product mix; a charge for environmental remediation at Grasse River of $25; the impairment of energy business assets of $10; and a charge primarily for a one-time signing bonus for employees associated with the collective bargaining agreement negotiation of $9.

In June of 2019 the Company and the United Steelworkers reached a tentative three-year labor agreement covering approximately 3,400 employees at four U.S. locations; the previous labor agreement expired on May 15, 2019.

The tentative agreement was ratified on July 11, 2019.

The Company anticipates a charge of approximately $10 to $15 in the first quarter of 2020, with additional impacts in subsequent quarters as the business continues to recover from the fire, which are also expected to be covered by insurance proceeds.

COGS as a percentage of Sales was 81.3% in 2018 compared with 78.9% in 2017.

The increase was the result of higher aluminum prices; unfavorable aerospace product mix; higher transportation costs; manufacturing inefficiencies in Engineered Structures; performance shortfalls in the Disks asset group; costs related to settlements of certain customer claims noted above; and the impact of a charge related to a physical inventory adjustment at one plant in the GRP segment of $23 that was recorded in the second quarter of 2018.

While a portion of this charge for the physical inventory adjustment related to prior years, the majority related to the first half of 2018.

The out-of-period amounts were not material to any interim or annual periods.

SG&A expenses were $604, or 4.3% of Sales, in 2018 compared with $715, or 5.5% of Sales, in 2017.

The decrease in SG&A of $111, or 16%, was the result of proxy, advisory and governance-related costs of $58, costs related to the Separation of Alcoa Inc. of $18, and costs associated with the Company’s Delaware reincorporation of $3 in 2017, none of which recurred in 2018.

Additionally, lower expenses driven by lower annual incentive compensation accruals and overhead cost reductions were somewhat offset by an increase in legal and other advisory costs related to Grenfell Tower of $4 as well as strategy and portfolio review costs of $7 in 2018.

R&D expenses were $103 in 2018 compared with $109 in 2017.

The decrease of $6, or 6%, was the result of lower spending.

The provision for D&A was $576 in 2018 compared with $551 in 2017.

The increase of $25, or 5%, was primarily due to capital projects placed into service.

Impairment of Goodwill. In 2017, the Company recognized an impairment of goodwill of $719 related to the annual impairment review of its Arconic Forgings and Extrusions (AFE) business (see Goodwill under Critical Accounting Policies and Estimates below).

Restructuring and other charges in 2018 primarily included a charge for pension and other postretirement benefits net settlements and curtailments of $91; a loss on the sale of the Hungary forgings business of $43; and a charge for layoff costs of $20, including the separation of approximately 125 employees; partially offset by a gain on the asset sale of the Texarkana rolling mill of $154.

Restructuring and other charges in 2017 primarily included a charge for layoff costs of $69, including the separation of approximately 880 employees; a charge related to the sale of the Italy rolling mill of $60; and a charge for the impairment of assets associated with the sale of the Latin America extrusions business of $41.

Interest expense was $378 in 2018 compared with $496 in 2017.

The decrease of $118, or 24%, was the result of higher costs incurred in 2017 related to the early redemption of the Company’s outstanding debt than were incurred during 2018, as well as lower debt outstanding.

The decrease in Other income, net of $565 was the result of gains recorded during 2017 related to the sale of a portion of Arconic’s investment in Alcoa Corporation common stock of $351, the Debt-for-Equity Exchange (in April and May 2017, the Company acquired a portion of its outstanding notes held by two investment banks (the “Investment Banks”) in exchange for cash and the Company’s remaining 12,958,767 shares (valued at $35.91 per share) in Alcoa Corporation stock and recorded a gain of $167), income associated with an adjustment to the contingent earn-out liability related to the Firth Rixson acquisition of $81 (see Note [S](#sAB6AFBDCB1595BF083BB1852A6CBD598) to the Consolidated Financial Statements in Part II, Item 8.

income due to the reversal of a liability associated with a separation-related guarantee of $25, none of which recurred in 2018, and unfavorable foreign currency movements, somewhat offset by lower non-service related net periodic benefit cost and the benefit of $29 from establishing a tax indemnification receivable reflecting Alcoa Corporation’s 49% share of a Spanish tax reserve (see Note [T](#s2A85739D7FC7592FABE89F6D193202CB) to the Consolidated Financial Statements in Part II, Item 8.

The effective rate differs from the U.S. federal statutory rate primarily as a result of a $94 net benefit related to a U.S. tax election which caused the deemed liquidation of a foreign subsidiary’s assets into its U.S. tax parent, a $24 net benefit associated with the deduction of foreign taxes that were previously claimed as a U.S. foreign tax credit, and a $12 net benefit for foreign tax rate changes, partially offset by the tax impact of $89 of non-deductible executive compensation and transaction costs, $53 of impairment charges related to the Company’s Brazilian rolling mill operations and other foreign losses with no tax benefit, a $14 charge for U.S. state taxes, and by foreign income subject to U.S. taxes.

[removed: Arconic] [added: Howmet Aerospace] Inc. [added: (formerly known as Arconic Inc.)] is a Delaware corporation with its principal office in Pittsburgh, Pennsylvania and the successor to Arconic Pennsylvania (as defined below) which was formed in 1888 and formerly known as Alcoa Inc. In this report, unless the context otherwise requires, [removed: “Arconic” or] [added: “Howmet”,] the [removed: “Company” means Arconic] [added: “Company”, “we”, “us” and “our” refer to Howmet Aerospace] Inc., a Delaware corporation, and [removed: all subsidiaries consolidated for the purposes of] its [removed: financial statements.][added: consolidated subsidiaries.]

The Company’s Internet address is [removed: [http://www.arconic.com](#).][added: http://www.howmet.com.]

[removed: Arconic] [added: Howmet] makes available free of charge on or through its website its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of [removed: 1934] [added: 1934,] as [added: well as proxy statements, as] soon as reasonably practicable after the Company electronically files such material with, or furnishes it to, the Securities and Exchange Commission [removed: (SEC).][added: ("SEC").]

The information [removed: on] [added: on, or accessible through,] the Company’s [removed: Internet site] [added: website] is not a part of, or incorporated by reference in, this annual report on Form 10-K.

The SEC maintains an Internet site that contains these reports at [removed: [http://www.sec.gov](#).][added: http://www.sec.gov.]

This report contains (and oral communications made by [removed: Arconic] [added: Howmet] may contain) statements that relate to future events and expectations and, as such, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

All statements that reflect [removed: Arconic’s] [added: Howmet’s] expectations, assumptions or projections about the future, other than statements of historical fact, are forward-looking statements, including, without limitation, [added: statements,] forecasts [added: and outlook] relating to the [removed: growth] [added: condition] of [removed: the aerospace, automotive, commercial transportation and other] end markets; [removed: statements and guidance regarding] future financial [removed: results or] [added: results,] operating [removed: performance; statements about Arconic’s] [added: performance, or estimated or expected future capital expenditures; future strategic actions; and Howmet's] strategies, outlook, [added: and] business and financial [removed: prospects; and statements regarding potential share gains.][added: prospects.]

Although [removed: Arconic] [added: Howmet] believes that the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that these expectations will be attained and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks and uncertainties.

For a discussion of some of the specific factors that may cause [removed: Arconic’s] [added: Howmet’s] actual results to differ materially from those projected in any forward-looking statements, see the following sections of this report: [Part I, Item [removed: 1A.](#s37AD6CCE74325EF2812B0C3EAC0942D4)] [added: 1A](#if209ebc53ef94a25a993a2b3ddc0993f_16)] (Risk Factors), [Part II, Item [removed: 7.](#s25186CBC7A5D52B2907CADC3BA1E73D5)] [added: 7](#if209ebc53ef94a25a993a2b3ddc0993f_40)] (Management’s Discussion and Analysis of Financial Condition and Results of Operations), including the disclosures under Segment Information and Critical Accounting Policies and Estimates, and Note [removed: [T](#s2A85739D7FC7592FABE89F6D193202CB)] [added: [V](#if209ebc53ef94a25a993a2b3ddc0993f_172)] to the Consolidated Financial Statements in Part II, Item 8.

[removed: Arconic] [added: Howmet] disclaims any intention or obligation to update publicly any forward-looking statements, whether in response to new information, future events or otherwise, except as required by applicable law.

[removed: Arconic] [added: Howmet] is a global company operating in [removed: 18] [added: 20] countries.

Based upon the country where the point of [removed: sale] [added: shipment] occurred, the United States and Europe generated [removed: 67%] [added: 68%] and [removed: 23%,] [added: 21%,] respectively, of [removed: Arconic’s] [added: Howmet’s] sales in [removed: 2019.][added: 2020.]

In addition, [removed: Arconic] [added: Howmet] has operating activities in numerous countries and regions outside the United [removed: States, including] [added: States and] Europe, [added: including] Canada, [removed: China, Japan,] [added: Mexico, China] and [removed: Russia.][added: Japan.]

Governmental policies, laws and regulations, and other economic factors, including inflation and fluctuations in foreign currency exchange rates and interest rates, affect the results of operations in countries with such operating [removed: activities.][added: activities.]

[removed: Arconic] [added: Howmet] has [removed: two] [added: four] reportable segments, which are organized by product on a worldwide basis: [added: Engine Products, Fastening Systems,] Engineered [removed: Products and Forgings (EP&F)] [added: Structures] and [removed: Global Rolled Products (GRP).][added: Forged Wheels.]

On December 31, 2017 (the “Effective Date”), Arconic Inc., a Pennsylvania corporation (“Arconic [removed: Pennsylvania” or, prior to the Reincorporation (as defined below), the “Company”),] [added: Pennsylvania”),] effected the change of [removed: the Company’s] [added: Arconic Pennsylvania’s] jurisdiction of incorporation from Pennsylvania to Delaware (the “Reincorporation”) by merging (the “Reincorporation Merger”) with a direct wholly owned Delaware subsidiary, Arconic [added: Inc.] (in this section, “Arconic Delaware” or, following the Reincorporation, the “Company”), pursuant to an Agreement and Plan of [removed: Merger (the “Reincorporation Merger Agreement”),] [added: Merger,] dated as of October 12, 2017, by and [added: between Arconic Pennsylvania and Arconic Delaware.]

As a result of the Reincorporation, (i) Arconic Pennsylvania [removed: has] ceased to exist, (ii) Arconic Delaware automatically inherited the reporting obligations of Arconic Pennsylvania under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and (iii) Arconic Delaware is deemed to be the successor issuer to Arconic Pennsylvania.

The common stock, par value $1.00 per share, of Arconic Pennsylvania (the “Arconic Pennsylvania Common Stock”) was listed for trading on the New York Stock Exchange and traded under the symbol “ARNC.” As of the Effective Date, this symbol, without interruption, [removed: represents] [added: represented] shares of common stock, par value $1.00 per share, of Arconic Delaware (the “Arconic Delaware Common Stock”).

As of the Effective Date, the rights of the Company’s stockholders began to be governed by the General Corporation Law of the State of Delaware, the Certificate of Incorporation of Arconic Delaware [removed: (the “Delaware Certificate”)] and the Bylaws of Arconic [removed: Delaware (the “Delaware Bylaws”).][added: Delaware.]

On the Effective Date, (i) the directors and officers of Arconic Pennsylvania prior to the Reincorporation continued as the directors and officers of Arconic Delaware after the Reincorporation, (ii) each outstanding share of Arconic Pennsylvania Common Stock was automatically converted into one share of Arconic Delaware Common Stock, (iii) each outstanding share of Serial Preferred Stock, par value $100 per share, of Arconic Pennsylvania [removed: (the “Arconic Pennsylvania Preferred Stock”)] was automatically converted into one share of Serial Preferred Stock, par value $100 per share, of Arconic Delaware [removed: (the “Arconic Delaware Preferred Stock”)] and (iv) all of Arconic Pennsylvania’s employee benefit and compensation plans immediately prior to the Reincorporation were continued by Arconic Delaware, and each outstanding equity award and notional share unit relating to shares of Arconic Pennsylvania Common Stock was converted into an equity award or notional share unit, as applicable, relating to an equivalent number of shares of Arconic Delaware Common Stock on the same terms and subject to the same conditions.

Beginning [removed: at the effective time of] [added: on] the [removed: Reincorporation,] [added: Effective Date,] each certificate representing Arconic Pennsylvania Common Stock or Arconic Pennsylvania Preferred Stock was deemed for all corporate purposes to evidence ownership of Arconic Delaware Common Stock or Arconic Delaware Preferred Stock, as applicable.

[removed: *Alcoa Corporation] [added: *The Alcoa Inc.] Separation Transaction*

On November 1, 2016, Alcoa Inc. completed the separation of its business into two independent, publicly traded companies (the [removed: “Separation of Alcoa”)] [added: “Alcoa Inc. Separation Transaction”)] – [removed: Alcoa Corporation and] Arconic Inc. (the new name for Alcoa [removed: Inc.).][added: Inc. and which, through the transactions described above, later became Howmet Aerospace Inc.) and Alcoa Corporation.]

[removed: Following] the [removed: Separation of Alcoa, Alcoa Corporation holds the Alumina and Primary Metals segments, the] rolling mill at the Warrick, Indiana [removed: operations] [added: operations,] and the 25.1% stake in the Ma’aden Rolling Company in Saudi Arabia previously held by the Company.

[removed: The] [added: Following the Alcoa Inc. Separation Transaction, the] Company retained the Global Rolled Products (other than the rolling mill at the Warrick, Indiana operations and the 25.1% ownership stake in the Ma’aden Rolling Company), [added: the] Engineered Products and Solutions and [added: the] Transportation and Construction Solutions segments.

The [removed: Separation of] Alcoa [added: Inc. Separation Transaction] was effected by a pro rata distribution of 80.1% of the outstanding shares of Alcoa Corporation common stock to the Company’s shareholders (the “Distribution of Alcoa”).

The Company’s shareholders of record as of the close of business on October 20, 2016 (the [removed: “Record] [added: “2016 Record] Date”) received one share of Alcoa Corporation common stock for every three shares of the Company’s common stock held as of the [added: 2016] Record Date.

As a result of the Distribution of Alcoa, Alcoa Corporation became an independent public company trading under the symbol “AA” on the New York Stock Exchange, and the Company [removed: trades] [added: traded] under the symbol “ARNC” on the New York Stock Exchange.

During 2017, the Company disposed [added: all] of its retained interest in Alcoa Corporation.

On October 31, 2016, in connection with the [removed: Separation of] Alcoa [removed: and the Distribution of Alcoa,] [added: Inc. Separation Transaction,] Arconic [added: Inc.] entered into several agreements with Alcoa Corporation or its subsidiaries that govern the relationship of the parties following the Distribution of Alcoa, including the following: Separation and Distribution Agreement, [removed: Transition Services Agreement,] Tax Matters Agreement, Employee Matters Agreement, [added: and] certain Patent, Know-How, Trade Secret License and Trademark License [removed: Agreements, Toll Processing and Services Agreement, Master Agreement for the Supply of Primary Aluminum, Massena Lease and Operations Agreement, Fusina Lease and Operations Agreement, and Stockholder and Registration Rights Agreement.][added: Agreements.]

The [removed: Separation of] Arconic [removed: will occur] [added: Inc. Separation Transaction was effected] by [removed: means of] a [removed: pro rata] distribution [removed: by Arconic Inc. (which will be renamed Howmet Aerospace Inc.)] of all [removed: of the] outstanding [removed: common stock] [added: shares] of Arconic Corporation [added: common stock to the Company’s stockholders] (the “Distribution of Arconic”).

[removed: At] [added: The Company’s stockholders of record as of] the [removed: time] [added: close] of [removed: separation, Arconic Inc. stockholders are expected to receive] [added: business on March 19, 2020 (the “2020 Record Date”) received] one share of Arconic Corporation common stock for every four shares of [removed: Arconic Inc.] [added: the Company’s] common stock held as of the [removed: record date.][added: 2020 Record Date.]

[removed: Products that contributed 10% or more to consolidated sales] [added: Sales by end markets] for the years ended December 31, [added: 2020,] 2019, [removed: 2018,] and [removed: 2017,] [added: 2018,] were:

| | [added: | |] For the Year [removed: Ended December] [added: Ended December] 31, | | | | | | | | [added: | | | | | | |]

| | [added: | | 2020 | | | | | |] 2019 | | | [removed: 2018] | | | [removed: 2017] [added: 2018] | | [added: |]

[removed: | Engine products | 24 | % | | 21 | % | | 21 | % |][added: Engine Products]

[removed: | Fastening systems | 11 | % | | 11 | % | | 11 | % |][added: Fastening Systems]

[removed: | Engineered structures | 8 | % | | 13 | % | | 13 | % |][added: Engineered Structures]

[removed: Arconic’s Engineered Products and Forgings segment (“EP&F”)] [added: The Company] produces products that are used primarily in the aerospace (commercial and defense), [removed: industrial,] commercial transportation, and [removed: power generation] [added: industrial and other] end markets.

Such products include fastening systems (titanium, steel, and nickel [removed: superalloys) and] [added: superalloys),] seamless rolled rings (mostly nickel superalloys); investment castings (nickel superalloys, titanium, and aluminum), including [removed: airfoils;] [added: airfoils and structural parts;] forged jet engine components (e.g., jet engine disks); [removed: extruded,] machined and forged aircraft parts (titanium and aluminum); and forged aluminum commercial vehicle wheels, all of which are sold directly to customers [removed: and] [added: and/or] through distributors.

The Company's website is included in this annual report on Form 10-K as an inactive textual reference only.

These statements reflect beliefs and assumptions that are based on Howmet’s perception of historical trends, current conditions and expected future developments, as well as other factors Howmet believes are appropriate in the circumstances.

Howmet is a leading global provider of advanced engineered solutions for the aerospace and transportation industries.

The Company’s primary businesses focus on jet engine components, aerospace fastening systems, and titanium structural parts necessary for mission-critical performance and efficiency in aerospace and defense applications, as well as forged wheels for commercial transportation.

*The Arconic Inc. Separation Transaction*

Howmet Aerospace Inc. is the new name for Arconic Inc., following Arconic Inc.’s separation of its businesses on April 1, 2020 (the “Arconic Inc. Separation Transaction”) into two independent, publicly traded companies – Howmet Aerospace Inc. and Arconic Corporation.

Following this separation, Howmet retains the Engine Products, Fastening Systems, Engineered

Structures, and Forged Wheels businesses; and Arconic Corporation holds the Rolled Products, Aluminum Extrusions, and Building and Construction Systems businesses.

The Company trades under the symbol “HWM” on the New York Stock Exchange, and Arconic Corporation trades under the symbol “ARNC” on the New York Stock Exchange.

The Company did not issue fractional shares of Arconic Corporation common stock in the Distribution of Arconic.

Instead, each stockholder otherwise entitled to receive a fractional share of Arconic Corporation common stock received cash in lieu of fractional shares.

In connection with the Arconic Inc. Separation Transaction, Howmet and Arconic Corporation entered into several agreements that govern the relationship of the parties following the separation, including the following: Separation and Distribution Agreement, Tax Matters Agreement, Employee Matters Agreement, certain Patent, Know-How and Trade Secret License Agreements, certain Trademark License Agreements, Raw Material Supply Agreements, Second Supplemental Tax and Project Certificate and Agreement, and Lease and Property Management Agreement.

*The 2017 Reincorporation of Howmet (then known as Arconic Inc.)*

Alcoa Corporation comprised the Alumina and Primary Metals segments,

*Aerospace (Commercial and Defense) End Market.* Howmet’s largest end market is aerospace, which represented approximately 69% of the Company’s revenue in 2020.

The Company produces a range of high performance multi-materials, highly engineered products, and vertically integrated machined solutions for aero engines and airframe structures, ranging from investment castings, advanced coatings, seamless rings, forgings, titanium extrusions, and titanium mill products, to fasteners that hold aircraft together.

Wingtip to wingtip, nose to tail, Howmet can produce more than 90% of all structural and rotating aero engine components.

Modernization of the commercial and defense platforms is driven by an array of challenging performance requirements.

With its precision engineering, materials science expertise and advanced manufacturing processes, Howmet aims to help its customers achieve greater fuel economies, reduced emissions, passenger comfort and maintenance efficiencies.

*Commercial Transportation End Market*.

The commercial transportation end market represented approximately 16% of the Company’s revenue in 2020.

The Company invented the forged aluminum wheel in 1948, and continues to advance technology to deliver breakthrough solutions that make trucks and buses lighter, more fuel efficient and sharper-looking.

Howmet’s forged aluminum wheels are a leading choice for commercial trucks and mass transportation vehicles because they can reduce weight and save fuel.

The strength of the Company’s rivets, bolts and fasteners offers another light-weighting solution that delivers performance.

*Industrial and Other End Markets.* Industrial and other end markets include industrial gas turbines, oil and gas, and other industrials, which represented approximately 15% of the Company’s revenue in 2020.

Engine Products produces rotating parts as well as structural parts.

Engine Products principally serves the commercial and defense aerospace as well as industrial gas turbine end markets.

Fastening Systems produces aerospace and industrial fasteners, latches, bearings, fluid fittings and installation tools.

A leading producer of highly engineered aerospace fasteners with a broad range of fastening systems, the segment also supplies the commercial transportation, renewable, and material handling industries.

systems are found nose to tail on commercial and military aircraft, as well as on jet engines, industrial gas turbines, automobiles, commercial transportation vehicles, wind turbines, solar power systems, and construction and industrial equipment.

Engineered Structures also produces aluminum forgings, nickel forgings, and aluminum machined components and assemblies for aerospace and defense applications.

The principal end markets served by Engineered Structures are commercial aerospace, defense aerospace, and land and sea defense.

Forged Wheels

The Company’s portfolio of wheels is sold under the product brand name Alcoa® Wheels.

Its Ultra ONE® Wheel with MagnaForce® alloy is the lightest portfolio of wheels on the market.

The Company’s proprietary Dura-Bright® surface treatment is unmatched in appearance and corrosion protection.

Sales by End Market and Significant Customer Revenue

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Aerospace - Commercial | | | 50 | | % | | | | 59 | | % | | | | 59 | | % |

(Financial Statements and Supplementary Data).

Arconic Inc. (“Arconic” or the “Company”) is a global leader in lightweight metals engineering and manufacturing.

Arconic’s innovative, multi-material products, which include aluminum, titanium, and nickel, are used worldwide in aerospace, automotive, commercial transportation, building and construction, industrial applications, defense, and packaging.

*Arconic Inc. Reincorporation*

between Arconic Pennsylvania and Arconic Delaware.

The foregoing descriptions of the Arconic Delaware Common Stock, the Arconic Delaware Preferred Stock, the Delaware Certificate and the Delaware Bylaws are qualified in their entirety by the full text of the Delaware Certificate and the Delaware Bylaws, which are filed as Exhibits 3(a) and 3(b), respectively, to this report.

In February 2017, the Company sold 23,353,000 shares of Alcoa Corporation stock at $38.03 per share, which resulted in cash proceeds of $888 million and a gain of $351 million.

In April and May 2017, the Company acquired a portion of its outstanding notes held by two investment banks (the “Investment Banks”) in exchange for cash and the Company’s remaining 12,958,767 shares (valued at $35.91 per share) in

Alcoa Corporation stock (the “Debt-for-Equity Exchange”) and recorded a gain of $167 million.

The gains of $351 million and $167 million associated with the disposition of the Alcoa Corporation shares were recorded in Other expense (income), net in the accompanying Statement of Consolidated Operations in [Part II, Item 8](#sF2632D3E53605B1596C942D86FA3D8E0) (Financial Statements and Supplementary Data).

The Toll Processing and Services Agreement expired by its terms at the end of 2018.

Recent Developments

On January 22, 2019, the Company announced that its Board of Directors (the Board) had determined to no longer pursue a potential sale of Arconic as part of its strategy and portfolio review.

Management and the Board had been conducting a rigorous and comprehensive strategy and portfolio review over the past year and as part of that process had considered a sale of the Company, among other matters.

However, the Company did not receive a proposal for a full-Company transaction that management and the Board believed would be in the best interest of Arconic’s shareholders and other stakeholders.

Management and the Board remain confident in Arconic’s significant potential and are strongly focused on enhancing value for shareholders, through continued operational improvements and through other potential initiatives which had been previously identified in the strategy and portfolio review.

On February 8, 2019, Arconic announced, as part of its strategy and portfolio review, a separation of its portfolio into two independent, publicly-traded companies (the “Separation of Arconic”).

The Engineered Products and Forgings (EP&F) businesses (engine products, fastening systems, engineered structures and forged wheels) will remain in the existing company, which will be renamed Howmet Aerospace Inc. and change its stock ticker from “ARNC” to “HWM” in connection with the separation.

The Global Rolled Products (GRP) businesses (global rolled products, aluminum extrusions and building and construction systems) will be held by a new company that will be named Arconic Corporation at separation and that intends to list its common stock on the New York Stock Exchange under the symbol “ARNC.”

On February 6, 2020, the Company announced that its Board of Directors has approved the completion of the Separation of Arconic.

Timothy D.

Myers will serve as Arconic Corporation Chief Executive Officer.

The Arconic Inc. Board has also named new directors to the Arconic Corporation and Howmet Aerospace Boards:

| | |

| --- | --- |

| • | Joining the Arconic Corporation Board of Directors will be: Timothy Myers; William Austen; Christopher Ayers*; Margaret Billson; Austin Camporin; Jacques Croisetiere; Elmer Doty*; Carol Eicher; Fritz Henderson; E. Stanley O’Neal*; and Jeffrey Stafeil. |

Will resign from the Arconic Inc. Board*

| • | Joining the Howmet Aerospace Board will be: Joseph Cantie; Robert Leduc; Jody Miller; and Nicole Piasecki. |

The Distribution of Arconic is intended to qualify as a tax-free transaction to Arconic Inc. stockholders for U.S. federal income tax purposes.

*Distribution of Arconic Information*

The record date will be March 19, 2020 and the time of the distribution will be 12:01 A.M. on April 1, 2020.

At the time of separation, stockholders of Arconic Inc. will retain their shares of Arconic Inc. Due to the name change of Arconic Inc. to Howmet Aerospace Inc. upon separation, these shares will become Howmet Aerospace Inc. shares.

No fractional shares of Arconic Corporation common stock will be issued in the distribution, and stockholders will receive cash in lieu of fractional shares.

The separation distribution is expected to be paid on April 1, 2020 to Arconic Inc. stockholders of record as of the close of business on the record date.

The distribution remains subject to the satisfaction or waiver of the conditions described in Arconic Rolled Products Corporation’s Registration Statement on Form 10, as amended.

The Form 10 has been filed by Arconic Rolled Products Corporation with the SEC and is available at www.arconic.com.

No action is required by Arconic Inc. stockholders to receive shares of Arconic Corporation common stock in the distribution.

Arconic Inc. expects to make available an information statement to all stockholders entitled to receive the distribution of shares of Arconic Corporation common stock.

The information statement is filed as an exhibit to Arconic Rolled Products Corporation’s Registration Statement on Form 10 and describes Arconic Corporation and certain risks of owning Arconic Corporation common stock and provides other information regarding the separation and distribution.

*Trading Common Stock*

In the ordinary course of its business, [removed: Arconic] [added: Howmet] is involved in a number of lawsuits and claims, both actual and potential.

[removed: Environmental Matters][added: *Environmental Matters*]

[removed: Arconic] [added: Howmet] is involved in proceedings under the Comprehensive Environmental Response, Compensation and Liability Act, also known as Superfund [removed: (CERCLA)] [added: (“CERCLA”)] or analogous state provisions regarding the usage, disposal, storage or treatment of hazardous substances at a number of sites in the U.S. The Company has committed to participate, or is engaged in negotiations with federal or state authorities relative to its alleged liability for participation, in clean-up efforts at several such sites.

[added: Alcoa*] complaint.

[removed: Other Matters][added: *Other Matters*]

As previously reported, [removed: Arconic Inc. and] [added: Howmet,] its subsidiaries and former subsidiaries are defendants in lawsuits filed on behalf of persons alleging injury as a result of occupational or other exposure to asbestos.

[removed: Arconic,] [added: Howmet,] its subsidiaries and former subsidiaries have numerous insurance policies over many years that provide coverage for asbestos related claims.

[removed: Arconic] [added: The Company] has significant insurance coverage and believes that [removed: Arconic’s] [added: Howmet’s] reserves are adequate for its known asbestos exposure related liabilities.

[removed: Pursuant to the Tax Matters] [added: The Separation and Distribution] Agreement, dated [removed: as of] October 31, 2016, entered into between the Company and Alcoa Corporation in connection with the [added: Alcoa Inc.] Separation [removed: of Alcoa,] [added: Transaction, provides for cross-indemnities between] the Company [removed: shares responsibility with Alcoa Corporation for,] and Alcoa Corporation [removed: has agreed] [added: for claims subject] to [removed: partially indemnify the Company with respect to, the following matter.][added: indemnification.]

*Matters [removed: Previously Reported –] [added: Related to] Alcoa Corporation*

[added: Prior to the Alcoa Inc. Separation Transaction on November 1, 2016, the Company was known as Alcoa Inc.] We have included the matters discussed below in which the Company remains party to proceedings relating to Alcoa [removed: Corporation in accordance with SEC regulations.][added: Corporation.]

St. Croix Alumina, L.L.C., et al.* [removed: As previously reported, on] [added: On] January 14, 2010, [removed: Arconic] [added: Alcoa Inc.] was served with a multi-plaintiff action complaint involving several thousand individual persons claiming to be residents of St. Croix who are alleged to have suffered personal injury or property damage from Hurricane Georges or winds blowing material from the St. Croix Alumina, L.L.C. (“SCA”) facility on the island of St. Croix (U.S. Virgin Islands) since the time of the hurricane.

This complaint, [removed: Abednego,] [added: *Abednego,] et al.

[added: Alcoa*, et al.,] was filed in the Superior Court of the Virgin Islands, St. Croix Division.

Following an unsuccessful attempt by [removed: Arconic] [added: Alcoa Inc.] and SCA to remove the case to federal court, the case has been lodged in the Superior Court.

[removed: Also as previously reported, on] [added: On] March 1, 2012, [removed: Arconic] [added: Alcoa Inc.] was served with a separate multi-plaintiff action complaint involving approximately 200 individual persons alleging claims essentially identical to those set forth in the [removed: Abednego] [added: *Abednego] v.

This complaint, [removed: Abraham,] [added: *Abraham,] et al.

Alcoa, et [removed: al.,] [added: al.*,] was filed on behalf of plaintiffs previously dismissed in the federal court proceeding involving the original litigation over Hurricane Georges impacts.

[removed: Arconic] [added: Alcoa Inc.] and other defendants in the [removed: Abraham] [added: *Abraham*] and [removed: Abednego] [added: *Abednego*] cases filed or renewed motions to dismiss each case in March 2012 and August 2012 following service of the [removed: Abraham] [added: *Abraham*] complaint on [removed: Arconic] [added: Alcoa Inc.] and remand of the [removed: Abednego] [added: *Abednego*] complaint to [removed: Superior Court, respectively.]

For a discussion of legal proceedings, see Note [V](#if209ebc53ef94a25a993a2b3ddc0993f_172) to the Consolidated Financial Statements in Part II, Item 8, in addition to the matters set forth below.

See the Environmental Matters section of Note [V](#if209ebc53ef94a25a993a2b3ddc0993f_172) to the Consolidated Financial Statements for more information.

Superior Court, respectively.

The most significant of these matters, the remediation of the Grasse River in Massena, NY, is discussed in the Environmental Matters section of Note [T](#s2A85739D7FC7592FABE89F6D193202CB) to the Consolidated Financial Statements under the caption “Environmental Matters”.

Reynobond PE

As previously reported, on June 13, 2017, the Grenfell Tower in London, U.K. caught fire resulting in fatalities, injuries and damage.

A French subsidiary of Arconic, Arconic Architectural Products SAS (AAP SAS), supplied a product, Reynobond PE, to its customer, a cladding system fabricator, which used the product as one component of the overall cladding system on Grenfell Tower.

The fabricator supplied its portion of the cladding system to the façade installer, who then completed and installed the system under the direction of the general contractor.

Neither Arconic nor AAP SAS was involved in the design or installation of the system used at the Grenfell Tower, nor did it have a role in any other aspect of the building’s refurbishment or original design.

Regulatory investigations into the overall Grenfell Tower matter are being conducted, including a criminal investigation by the London Metropolitan Police Service (the “Police”), a Public Inquiry by the British government and a

consumer protection inquiry by a French public authority.

The Public Inquiry was announced by the U.K. Prime Minister on June 15, 2017 and subsequently was authorized to examine the circumstances leading up to and surrounding the Grenfell Tower fire in order to make findings of fact and recommendations to the U.K. Government on matters such as the design, construction, and modification of the building, the role of relevant public authorities and contractors, the implications of the fire for the adequacy and enforcement of relevant regulations, arrangements in place for handling emergencies, and the handling of concerns from residents, among other things.

Hearings for Phase 1 of the Public Inquiry began on May 21, 2018 and concluded on December 12, 2018.

Phase 2 hearings of the Public Inquiry began in early 2020, following which a final report will be written and subsequently published.

AAP SAS is participating as a Core Participant in the Public Inquiry and is also cooperating with the ongoing parallel investigation by the Police.

The Company no longer sells the PE product for architectural use on buildings.

Given the preliminary nature of these investigations and the uncertainty of potential future litigation, the Company cannot reasonably estimate at this time the likelihood of an unfavorable outcome or the possible loss or range of losses in the event of an unfavorable outcome.

*Behrens et al.

v.

Arconic Inc. et al.* As previously reported, on June 6, 2019, 247 plaintiffs comprised of survivors and estates of decedents of the Grenfell Tower fire filed a complaint against “Arconic Inc., Alcoa Inc., and Arconic Architectural Products, LLC” (collectively, for purposes of the description of such proceeding, the “Arconic Defendants”), as well as Saint-Gobain Corporation, d/b/a Celotex and Whirlpool Corporation, in the Court of Common Pleas of Philadelphia County.

The complaint alleges claims under Pennsylvania state law for products liability and wrongful death related to the fire.

In particular, the plaintiffs allege that the Arconic Defendants knowingly supplied a dangerous product (Reynobond PE) for installation on the Grenfell Tower despite knowing that Reynobond PE was unfit for use above a certain height.

The Arconic Defendants removed the case to the United States District Court for the Eastern District of Pennsylvania on June 19, 2019.

On August 29, 2019, the Arconic Defendants moved to dismiss the complaint on the bases, among other things, that: (i) the case should be heard in the United Kingdom, not the United States; (ii) there is no jurisdiction over necessary parties; and (iii) Pennsylvania products liability law does not apply to manufacture and sale of product overseas.

On December 23, 2019, the Court issued an order denying the motion to dismiss the complaint on bases (ii) and (iii) and suggesting a procedure for limited discovery followed by further briefing on those subjects.

Discovery is ongoing on defendants’ motion to have the case dismissed in favor of a UK forum (forum non conveniens).

On January 23, 2020, the Court ordered that the parties complete discovery relating to forum non conveniens by March 16, 2020, and that briefing conclude on April 13, 2020.

The Court will hold oral argument on this motion on May 7, 2020.

Given the preliminary nature of this matter and the uncertainty of litigation, the Company cannot reasonably estimate at this time the likelihood of an unfavorable outcome or the possible loss or range of losses in the event of an unfavorable outcome.

*Howard v.

Arconic Inc. et al.* As previously reported, a purported class action complaint related to the Grenfell Tower fire was filed on August 11, 2017, in the United States District Court for the Western District of Pennsylvania against Arconic Inc. and Klaus Kleinfeld.

A related purported class action complaint was filed in the United States District Court for the Western District of Pennsylvania on September 15, 2017, under the caption *Sullivan v.

Arconic Inc. et al.*, against Arconic Inc. three former Arconic executives, several current and former Arconic directors, and banks that acted as underwriters for Arconic’s September 18, 2014 preferred stock offering (the “Preferred Offering”).

The plaintiff in *Sullivan* had previously filed a purported class action against the same defendants on July 18, 2017 in the Southern District of New York and, on August 25, 2017, voluntarily dismissed that action without prejudice.

On February 7, 2018, on motion from certain putative class members, the court consolidated *Howard* and *Sullivan*, closed *Sullivan*, and appointed lead plaintiffs in the consolidated case.

On April 9, 2018, the lead plaintiffs in the consolidated purported class action filed a consolidated amended complaint.

The consolidated amended complaint alleged that the registration statement for the Preferred Offering contained false and misleading statements and omitted to state material information, including by allegedly failing to disclose material uncertainties and trends resulting from sales of Reynobond PE for unsafe uses and by allegedly expressing a belief that appropriate risk management and compliance programs had been adopted while concealing the risks posed by Reynobond PE sales.

The consolidated amended complaint also alleged that between November 4, 2013 and June 23, 2017 Arconic and Kleinfeld made false and misleading statements and failed to disclose material information about the Company’s commitment to safety, business and financial prospects, and the risks of the Reynobond PE product, including in Arconic’s Form 10-Ks for the fiscal years ended December 31, 2013, 2014, 2015, and 2016, its Form 10-Qs and quarterly financial press releases from the fourth quarter of 2013 through the first quarter of 2017, its 2013, 2014, 2015, and 2016 Annual Reports, its 2016 Annual Highlights Report, and on its official website.

The consolidated amended complaint sought, among other things, unspecified compensatory damages and an award of attorney and expert fees and expenses.

On June 8, 2018, all defendants moved to dismiss the consolidated amended complaint for failure to state a claim.

On June 21, 2019, the Court granted the defendants’ motion to dismiss in full, dismissing the consolidated amended complaint in its entirety without prejudice.

On July 23, 2019, the lead plaintiffs filed a second amended complaint.

The second amended complaint alleges generally the same claims as the consolidated amended complaint with certain additional allegations, as well as claims that the risk factors set forth in the registration statement for the Preferred Offering were inadequate and that certain additional statements in the sources identified above were misleading.

[removed: FORM 10-K][added: FORM 10-K]

For The Fiscal Year [removed: Ended December] [added: Ended December] 31, [removed: 2019][added: 2020]

| Delaware | | [added: | | | |] 25-0317820 | [added: | |]

| (State of incorporation) | | [added: | | | |] (I.R.S. Employer Identification No.) | [added: | |]

201 Isabella Street, Suite [removed: 200, Pittsburgh, Pennsylvania 15212-5872][added: 200, Pittsburgh, Pennsylvania 15212-5872]

Office of the [removed: Secretary-----------(412) 553-1940][added: Secretary-----------(412) 553-1940]

| Title of each class | [added: | |] Trading Symbol | [added: | |] Name of each exchange on which registered | [added: | |]

| Common Stock, par value $1.00 per share | [removed: ARNC] | [added: | HWM | | |] New York Stock Exchange | [added: | |]

| $3.75 Cumulative Preferred Stock, par value $100.00 per share | [removed: ARNC] [added: | | HWM] PR | [added: | |] NYSE American | [added: | |]

Large accelerated filer [removed: \[✓\]] [added: ☑] Accelerated filer [removed: \[\]] [added: ☐] Non-accelerated filer [removed: \[\]][added: ☐]

The aggregate market value of the outstanding common stock, other than shares held by persons who may be deemed affiliates of the registrant, as of the last business day of the registrant’s most recently completed second fiscal quarter was approximately [removed: $11] [added: $7] billion.

As of February [removed: 21, 2020,] [added: 12, 2021,] there were [removed: 435,918,568] [added: 433,614,667] shares of common stock, par value $1.00 per share, of the registrant outstanding.

Part III of this Form 10-K incorporates by reference certain information from the registrant’s definitive Proxy Statement for its [removed: 2020] [added: 2021] Annual Meeting of Shareholders to be filed pursuant to Regulation 14A (Proxy Statement).

| | | [added: | | | |] Page(s) | [added: | |]

| Part I | | | [added: | | | | | |]

| Item 1. | [removed: [Business](#s4F41225C55C25FBBAC1F95009955909D)] | [removed: [1](#s4F41225C55C25FBBAC1F95009955909D)] | [added: [Business](#if209ebc53ef94a25a993a2b3ddc0993f_13) | | | [1](#if209ebc53ef94a25a993a2b3ddc0993f_13) | | |]

| Item 1A. | [added: | |] [Risk [removed: Factors](#s37AD6CCE74325EF2812B0C3EAC0942D4)] [added: Factors](#if209ebc53ef94a25a993a2b3ddc0993f_16)] | [removed: [15](#s37AD6CCE74325EF2812B0C3EAC0942D4)] | [added: | [11](#if209ebc53ef94a25a993a2b3ddc0993f_16) | | |]

| Item 1B. | [added: | |] [Unresolved Staff [removed: Comments](#sF0017534B23256E4BA3F4A89CBB0A70B)] [added: Comments](#if209ebc53ef94a25a993a2b3ddc0993f_19)] | [removed: [29](#sF0017534B23256E4BA3F4A89CBB0A70B)] | [added: | [25](#if209ebc53ef94a25a993a2b3ddc0993f_19) | | |]

| Item 2. | [removed: [Properties](#s00CE4FE3AA2959C4A04C464CB28B94D9)] | [removed: [29](#s00CE4FE3AA2959C4A04C464CB28B94D9)] | [added: [Properties](#if209ebc53ef94a25a993a2b3ddc0993f_22) | | | [26](#if209ebc53ef94a25a993a2b3ddc0993f_22) | | |]

| Item 3. | [added: | |] [Legal [removed: Proceedings](#sE4498AA1E27A5E59AE61AB67CAF21E95)] [added: Proceedings](#if209ebc53ef94a25a993a2b3ddc0993f_25)] | [removed: [29](#sE4498AA1E27A5E59AE61AB67CAF21E95)] | [added: | [26](#if209ebc53ef94a25a993a2b3ddc0993f_25) | | |]

| Item 4. | [added: | |] [Mine Safety [removed: Disclosures](#s0406674959D25E1DB3727F2F065156A6)] [added: Disclosures](#if209ebc53ef94a25a993a2b3ddc0993f_28)] | [removed: [32](#s0406674959D25E1DB3727F2F065156A6)] | [added: | [27](#if209ebc53ef94a25a993a2b3ddc0993f_28) | | |]

| Part II | | | [added: | | | | | |]

| Item 5. | [added: | |] [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s4B1C309ACA5D5AA9B817AA4A0AF2F460)] [added: Securities](#if209ebc53ef94a25a993a2b3ddc0993f_34)] | [removed: [33](#s4B1C309ACA5D5AA9B817AA4A0AF2F460)] | [added: | [28](#if209ebc53ef94a25a993a2b3ddc0993f_34) | | |]

| Item 6. | [added: | |] [Selected Financial [removed: Data](#s4E7E18A6EEC456049A7AF5BF3718D673)] [added: Data](#if209ebc53ef94a25a993a2b3ddc0993f_2240) [Financial Data](#if209ebc53ef94a25a993a2b3ddc0993f_37)] | [removed: [36](#s4E7E18A6EEC456049A7AF5BF3718D673)] | [added: | [30](#if209ebc53ef94a25a993a2b3ddc0993f_2240) | | |]

| Item 7. | [added: | |] [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s25186CBC7A5D52B2907CADC3BA1E73D5)] [added: Operations](#if209ebc53ef94a25a993a2b3ddc0993f_40)] | [removed: [37](#s25186CBC7A5D52B2907CADC3BA1E73D5)] | [added: | [31](#if209ebc53ef94a25a993a2b3ddc0993f_40) | | |]

| Item 7A. | [added: | |] [Quantitative and Qualitative Disclosures About Market [removed: Risk](#sC181B387496D5785923468562FCCA7CE)] [added: Risk](#if209ebc53ef94a25a993a2b3ddc0993f_55)] | [removed: [52](#sC181B387496D5785923468562FCCA7CE)] | [added: | [45](#if209ebc53ef94a25a993a2b3ddc0993f_55) | | |]

| Item 8. | [added: | |] [Financial Statements and Supplementary [removed: Data](#sF2632D3E53605B1596C942D86FA3D8E0)] [added: Data](#if209ebc53ef94a25a993a2b3ddc0993f_58)] | [removed: [53](#sF2632D3E53605B1596C942D86FA3D8E0)] | [added: | [46](#if209ebc53ef94a25a993a2b3ddc0993f_58) | | |]

| Item 9. | [added: | |] [Changes in and Disagreements [removed: With] [added: with] Accountants on Accounting and Financial [removed: Disclosure](#sD9C9B2F8D857520487E0EB464B669D5F)] [added: Disclosure](#if209ebc53ef94a25a993a2b3ddc0993f_187)] | [removed: [107](#sD9C9B2F8D857520487E0EB464B669D5F)] | [added: | [101](#if209ebc53ef94a25a993a2b3ddc0993f_187) | | |]

| Item 9A. | [added: | |] [Controls and [removed: Procedures](#s774B45F04E22531889F3E61D9350B875)] [added: Procedures](#if209ebc53ef94a25a993a2b3ddc0993f_190)] | [removed: [107](#s774B45F04E22531889F3E61D9350B875)] | [added: | [101](#if209ebc53ef94a25a993a2b3ddc0993f_190) | | |]

| Item 9B. | [added: | |] [Other [removed: Information](#s10090BBAF90559DEA658847AEF8E16AF)] [added: Information](#if209ebc53ef94a25a993a2b3ddc0993f_193)] | [removed: [107](#s10090BBAF90559DEA658847AEF8E16AF)] | [added: | [101](#if209ebc53ef94a25a993a2b3ddc0993f_193) | | |]

| Part III | | | [added: | | | | | |]

| Item 10. | [added: | |] [Directors, Executive Officers and Corporate [removed: Governance](#s1F55709BD0245972B33D77195F1BCE90)] [added: Governance](#if209ebc53ef94a25a993a2b3ddc0993f_199)] | [removed: [107](#s1F55709BD0245972B33D77195F1BCE90)] | [added: | [101](#if209ebc53ef94a25a993a2b3ddc0993f_199) | | |]

| Item 11. | [added: | |] [Executive [removed: Compensation](#s437F313B8C235B158D8572FF5054909C)] [added: Compensation](#if209ebc53ef94a25a993a2b3ddc0993f_202)] | [removed: [107](#s437F313B8C235B158D8572FF5054909C)] | [added: | [101](#if209ebc53ef94a25a993a2b3ddc0993f_202) | | |]

| Item 12. | [added: | |] [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#sE1216C4546C85120A59DB1CC86E98128)] [added: Matters](#if209ebc53ef94a25a993a2b3ddc0993f_205)] | [removed: [107](#sE1216C4546C85120A59DB1CC86E98128)] | [added: | [102](#if209ebc53ef94a25a993a2b3ddc0993f_205) | | |]

| Item 13. | [added: | |] [Certain Relationships and Related Transactions, and Director [removed: Independence](#s2B533F945AAC5F0B9D2C09FDAA66A9A5)] [added: Independence](#if209ebc53ef94a25a993a2b3ddc0993f_208)] | [removed: [108](#s2B533F945AAC5F0B9D2C09FDAA66A9A5)] | [added: | [102](#if209ebc53ef94a25a993a2b3ddc0993f_208) | | |]

| Item 14. | [added: | |] [Principal Accounting Fees and [removed: Services](#s528CC64121F25D96A707EABA55592F98)] [added: Services](#if209ebc53ef94a25a993a2b3ddc0993f_211)] | [removed: [108](#s528CC64121F25D96A707EABA55592F98)] | [added: | [102](#if209ebc53ef94a25a993a2b3ddc0993f_211) | | |]

| Part IV | | | [added: | | | | | |]

| Item 15. | [added: | |] [Exhibits, Financial Statement [removed: Schedules](#s3F2DD8BA588356749639148AF0337433)] [added: Schedules](#if209ebc53ef94a25a993a2b3ddc0993f_217)] | [removed: [108](#s3F2DD8BA588356749639148AF0337433)] | [added: | [103](#if209ebc53ef94a25a993a2b3ddc0993f_217) | | |]

| Item 16. | [added: | |] [Form 10-K [removed: Summary](#s5F37D352DF955B8582B13012ACC0AF38)] [added: Summary](#if209ebc53ef94a25a993a2b3ddc0993f_220)] | [removed: [117](#s5F37D352DF955B8582B13012ACC0AF38)] | [added: | [111](#if209ebc53ef94a25a993a2b3ddc0993f_220) | | |]

HOWMET AEROSPACE INC.

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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

Explanatory Note

On April 1, 2020, Arconic Inc. completed the separation of its business into two independent, publicly-traded companies: Howmet Aerospace Inc. (the new name for Arconic Inc.) and Arconic Corporation.

The financial results of Arconic Corporation for all periods prior to April 1, 2020, have been retrospectively reflected in the Statement of Consolidated Operations as discontinued operations and, as such, have been excluded from continuing operations and segment results for all periods prior to April 1, 2020.

Additionally, the related assets and liabilities associated with Arconic Corporation in the December 31, 2019 Consolidated Balance Sheet are classified as assets and liabilities of discontinued operations.

The cash flows, comprehensive income, and equity related to Arconic Corporation have not been segregated and are included in the Statement of Consolidated Cash Flows, Statement of Consolidated Comprehensive Income, and Statement of Changes in Consolidated Equity, respectively, for all periods prior to April 1, 2020.

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| | | | [Signatures](#if209ebc53ef94a25a993a2b3ddc0993f_223) | | | [112](#if209ebc53ef94a25a993a2b3ddc0993f_223) | | |

ARCONIC INC.

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\[ \]

| | [Signatures](#sE434883E219C5D5592FC2E71EADA486A) | [118](#sE434883E219C5D5592FC2E71EADA486A) |

[removed: Arconic’s] [added: Howmet’s] principal office and corporate center is located at 201 Isabella Street, Suite 200, Pittsburgh, Pennsylvania 15212-5858.

[removed: Arconic] [added: Howmet] leases some of its facilities; however, it is the opinion of management that the leases do not materially affect the continued use of the properties or the properties’ values.

[removed: Arconic] [added: Howmet] believes that its facilities are suitable and adequate for its operations.

Although no title examination of properties owned by [removed: Arconic] [added: Howmet] has been made for the purpose of this report, the Company knows of no material defects in title to any such properties.

See Notes [removed: [A](#s792B3A61CBD854F4B7F52195BE220AB9)] [added: [A](#if209ebc53ef94a25a993a2b3ddc0993f_91)] and [removed: [M](#sC671688584E8565FB69B015B8859DB9B)] [added: [O](#if209ebc53ef94a25a993a2b3ddc0993f_139)] to the Consolidated Financial Statements in [Part II, Item [removed: 8.](#sF2632D3E53605B1596C942D86FA3D8E0) (Financial Statements and Supplementary Data)] [added: 8](#if209ebc53ef94a25a993a2b3ddc0993f_58)] of this Form 10-K.

[removed: Arconic] [added: Howmet] has active plants and holdings [removed: under the following segments and] in [removed: the following] [added: various] geographic [removed: areas:][added: areas.]

See the table regarding the Company's principal facilities in Part I, Item 1.

(Business).

The Arconic Technology Center for research and development is located at 100 Technical Drive, New Kensington, Pennsylvania 15069-0001.

ENGINEERED PRODUCTS AND FORGINGS

See the table and related text in the Engineered Products and Forgings Facilities section on page 7 of this report.

GLOBAL ROLLED PRODUCTS

See the table and related text in the Global Rolled Products Facilities section on page 10 of this report.

The Company’s common stock is listed on the New York Stock [removed: Exchange.][added: Exchange under the symbol “HWM.”]

Prior to the [removed: Separation of] Alcoa [removed: Corporation from the Company, the Company’s common stock traded under the symbol “AA.” In connection with the] [added: Inc.] Separation [removed: of Alcoa,] [added: Transaction] on November 1, 2016, the Company [removed: changed its stock symbol] [added: was known as Alcoa Inc.] and [removed: its common stock began trading] [added: was listed] under the [added: stock] symbol [removed: “ARNC.”][added: “AA.”]

[removed: As] [added: The Company’s common stock began trading on] a [removed: result of the] Reverse Stock [removed: Split,] [added: Split-adjusted basis on October 6, 2016, in which] every three shares of issued and outstanding common stock were combined into one issued and outstanding share of common stock, without any change in the par value per share.

The number of holders of record of common stock was approximately [removed: 10,874] [added: 10,920] as of February [removed: 21, 2020.][added: 12, 2021.]

The following graph compares the most recent five-year performance of the Company’s common stock with (1) the Standard & Poor’s (S&P) 500® Index, (2) the S&P 500® Industrials Index, a group of [removed: 70] [added: 73] companies categorized by Standard & Poor’s as active in the “industrials” market sector, and (3) the S&P Aerospace & Defense [removed: Select Industry] Index, [removed: a group of 32 companies categorized by Standard & Poor’s as active in the “aerospace & defense” industry.][added: which comprises General Dynamics Corporation, Howmet Aerospace Inc., Huntington Ingalls Industries, L3Harris Technologies, Inc., Lockheed Martin Corporation, Northrop Grumman Corporation, Raytheon Technologies Corporation, Teledyne Technologies Incorporated, Textron Inc., The Boeing Company, and Transdigm Group Inc.]

The graph assumes, in each case, an initial investment of $100 on December 31, [removed: 2014,] [added: 2015,] and the reinvestment of dividends.

[removed: ][added: ]

| As of December 31, | [removed: 2014] | | | | [added: | | | |] 2015 | | | | [added: | |] 2016 | | | | [added: | |] 2017 | | | | [added: | |] 2018 | | | | [added: | |] 2019 | | | [added: | | | 2020 | | |]

| Period | | [added: | | | |] Total [removed: Number of] [added: Number of] Shares Purchased | | | [added: | | |] Average Price Paid Per [removed: Share] [added: Share(1)] | | | | [added: | |] Total [removed: Number of Shares Purchased as Part] [added: Number] of [removed: Publicly Announced Repurchase Plans or Programs(1)] [added: Shares Purchased as Part of Publicly Announced Repurchase Plans or Programs] | | | [added: | | |] Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or [removed: Programs] [added: Programs(1)(2)] | | |

| Total for quarter ended December 31, [removed: 2019] [added: 2020] | | [removed: 1,626,681] | | | | [added: 937,831] | | | | | | [added: $] | [added: 23.99] | | [added: | | | 937,831 | | | | | | | | |]

After giving effect to the [removed: November 2019] share [removed: repurchase program, $350] [added: repurchases made through December 31, 2020, approximately $277] million remains available under the prior [removed: authorizations] [added: authorization] by the Board for [removed: share repurchases through] the [removed: end of 2020.][added: Share Repurchase Program.]

Prior to the Arconic Inc. Separation Transaction on April 1, 2020, the Company was known as Arconic Inc. and was listed under the stock symbol “ARNC.”

The historical prices of the Company presented in the graph and table have been adjusted to reflect the impact of the Arconic Inc. Separation Transaction, the Reverse Stock Split, and the Alcoa Inc. Separation Transaction.

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| Howmet Aerospace, Inc. | | | | | | | | | $ | 100.00 | | | | | $ | 84.78 | | | | | $ | 125.78 | | | | | $ | 78.70 | | | | | $ | 144.47 | | | | | $ | 151.66 | |

| S&P 500® Index | | | | | | | | | 100.00 | | | | | | 111.96 | | | | | | 136.40 | | | | | | 130.42 | | | | | | 171.49 | | | | | | 203.04 | | |

| S&P 500® Industrials Index | | | | | | | | | 100.00 | | | | | | 118.86 | | | | | | 143.86 | | | | | | 124.74 | | | | | | 161.38 | | | | | | 179.23 | | |

| S&P Aerospace & Defense Index | | | | | | | | | 100.00 | | | | | | 118.90 | | | | | | 168.11 | | | | | | 154.54 | | | | | | 201.41 | | | | | | 169.05 | | |

The following table presents information with respect to the Company’s open-market repurchases of its common stock during the quarter ended December 31, 2020:

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| | | | | | | (in millions except share and per share amounts) | | | | | | | | | | | | | | | | | | | | |

| October 1 - October 31, 2020 | | | | | | — | | | | | | $ | — | | | | | — | | | | | | $ | 299.5 | |

| November 1 - November 30, 2020 | | | | | | 937,831 | | | | | | $ | 23.99 | | | | | 937,831 | | | | | | $ | 277.0 | |

| December 1 - December 31, 2020 | | | | | | — | | | | | | $ | — | | | | | — | | | | | | $ | 277.0 | |

(1) Excludes commissions cost

(2) On May 20, 2019, the Company announced that its Board of Directors authorized the repurchase of $500 million of the Company's outstanding common stock (the "Share Repurchase Program") 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 was no stated expiration for the Share Repurchase Program under which the Company may repurchase shares from time to time and pursuant to such terms, as and if it deems appropriate.

The Share Repurchase Program may be suspended, modified or terminated at any time without prior notice.

The amount of share repurchases by the Company may be limited under the terms of the Five-Year Revolving Credit Agreement (See Note [R](#if209ebc53ef94a25a993a2b3ddc0993f_151) to the Consolidated Financial Statements for additional detail).

The Reverse Stock Split reduced the number of shares of common stock outstanding from approximately 1.3 billion shares to approximately 0.4 billion shares, and proportionately decreased the number of authorized shares of common stock from 1.8 billion to 0.6 billion shares.

The Company’s common stock began trading on a Reverse Stock Split-adjusted basis on October 6, 2016.

On November 1, 2016, the Company completed the Separation of Alcoa.

The Separation of Alcoa was effected by means of a pro rata distribution by the Company of 80.1% of the outstanding shares of Alcoa Corporation common stock to the Company’s shareholders.

The Company’s shareholders of record as of the close of business on October 20, 2016 (the “Record Date”) received one share of Alcoa Corporation common stock for every three shares of the Company’s common stock held as of the Record Date.

The Company retained 19.9% of the outstanding common stock of Alcoa Corporation immediately following the Separation of Alcoa.

See disposition of retained shares in Note [U](#sB66B10D9998E59BFAEA8A8C459F071E4) to the Consolidated Financial Statements in [Part II Item 8](#sF2632D3E53605B1596C942D86FA3D8E0) of this Form 10-K.

In conjunction with the Separation of Arconic, the Company will remain publicly traded and will change its name to “Howmet Aerospace Inc.” (“Howmet Aerospace”) and its stock symbol from “ARNC” to “HWM”, and “Arconic Rolled Products Corporation” will change its name to “Arconic Corporation” and its common stock will be listed on the New York Stock Exchange under the symbol “ARNC.”

Historical prices prior to the Separation of Alcoa on November 1, 2016, have been adjusted to reflect the value of the Separation transaction.

Copyright© 2020 Standard & Poor's, a division of S&P Global.

All rights reserved.

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| Arconic Inc. | $ | 100 | | | $ | 63.15 | | | $ | 53.54 | | | $ | 79.44 | | | $ | 49.70 | | | $ | 91.24 | |

| S&P 500® Index | 100 | | | | 101.38 | | | | 113.51 | | | | 138.29 | | | | 132.23 | | | | 173.86 | | |

| S&P 500® Industrials Index | 100 | | | | 97.47 | | | | 115.85 | | | | 140.22 | | | | 121.58 | | | | 157.29 | | |

| S&P Aerospace & Defense Select Industry Index | 100 | | | | 105.43 | | | | 125.36 | | | | 177.24 | | | | 162.93 | | | | 212.35 | | |

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| October 1 - October 31, 2019 | | — | | | $ | — | | | — | | | $ | 400,000,000 | |

| November 1 - November 30, 2019(2) | | 1,626,681 | | | $ | 30.74 | | | 1,626,681 | | | $ | 350,000,000 | |

| December 1 - December 31, 2019 | | — | | | $ | — | | | — | | | $ | 350,000,000 | |

(1) On February 5, 2018, the Company announced that its Board of Directors (the Board) had authorized the repurchase of up to $500 million of the Company's outstanding common stock (the "February 2018 Share Repurchase Program").

There was no stated expiration for the February 2018 Share Repurchase Program, and no shares were repurchased during 2018.

On February 8, 2019, the Company announced that the Board had authorized the repurchase of an additional $500 million of the Company's outstanding common stock, effective through the end of 2020.

On May 20, 2019, the Company announced that the Board had authorized the repurchase of a further $500 million of the Company's outstanding common stock (the "May 2019 Share Repurchase Program").

There was no stated expiration for the May 2019 Share Repurchase Program.

(2) On November 14, 2019, the Company entered into an agreement with Citigroup Global Markets Inc. to repurchase $50 million of its common stock (the “November 2019 share repurchase program”), pursuant to the share repurchase programs previously authorized by its Board.

All of the shares repurchased were immediately retired.

The Company has elected to comply with the Regulation S-K amendment to eliminate Item 301.

(dollars in millions, except per-share amounts)

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| For the year ended December 31, | 2019 | | | | 2018 | | | | 2017 | | | | 2016 | | | | 2015 | | |

| Sales | $ | 14,192 | | | $ | 14,014 | | | $ | 12,960 | | | $ | 12,394 | | | $ | 12,413 | |

| Amounts attributable to Arconic: | | | | | | | | | | | | | | | | | | | |

| Income (loss) from continuing operations | $ | 470 | | | $ | 642 | | | $ | (74 | ) | | $ | (1,062 | ) | | $ | (157 | ) |

| Income (loss) from discontinued operations | — | | | | — | | | | — | | | | 121 | | | | (165 | | ) |

| Net income (loss) | $ | 470 | | | $ | 642 | | | $ | (74 | ) | | $ | (941 | ) | | $ | (322 | ) |

| Earnings (loss) per share attributable to Arconic common shareholders: | | | | | | | | | | | | | | | | | | | |

| Basic: | | | | | | | | | | | | | | | | | | | |

| Income (loss) from continuing operations | $ | 1.05 | | | $ | 1.33 | | | $ | (0.28 | ) | | $ | (2.58 | ) | | $ | (0.54 | ) |

| Income (loss) from discontinued operations | — | | | | — | | | | — | | | | 0.27 | | | | (0.39 | | ) |

| Net income (loss) | $ | 1.05 | | | $ | 1.33 | | | $ | (0.28 | ) | | $ | (2.31 | ) | | $ | (0.93 | ) |

| Diluted: | | | | | | | | | | | | | | | | | | | |

| Income (loss) from continuing operations | $ | 1.03 | | | $ | 1.30 | | | $ | (0.28 | ) | | $ | (2.58 | ) | | $ | (0.54 | ) |

| Net income (loss) | $ | 1.03 | | | $ | 1.30 | | | $ | (0.28 | ) | | $ | (2.31 | ) | | $ | (0.93 | ) |

| Cash dividends declared per common share | $ | 0.12 | | | $ | 0.24 | | | $ | 0.24 | | | $ | 0.36 | | | $ | 0.36 | |

| Total assets | 17,578 | | | | 18,693 | | | | 18,718 | | | | 20,038 | | | | 36,477 | | |

| Total debt | 5,940 | | | | 6,330 | | | | 6,844 | | | | 8,084 | | | | 8,827 | | |

| Cash provided from (used for) operations | 406 | | | | 217 | | | | (39 | | ) | | 95 | | | | 764 | | |

| Capital expenditures: | | | | | | | | | | | | | | | | | | | |

| Capital expenditures—continuing operations | 586 | | | | 768 | | | | 596 | | | | 827 | | | | 789 | | |

| Capital expenditures—discontinued operations | — | | | | — | | | | — | | | | 298 | | | | 391 | | |

| Total capital expenditures | $ | 586 | | | $ | 768 | | | $ | 596 | | | $ | 1,125 | | | $ | 1,180 | |

Effective November 1, 2016, Alcoa Inc. separated into two standalone, publicly-traded companies, Arconic Inc. (the new name for Alcoa Inc.) and Alcoa Corporation (the “Separation of Alcoa”).

The results of operations of Alcoa Corporation for all periods prior to the Separation of Alcoa were retrospectively reflected in the table above as discontinued operations and, as such, were excluded from continuing operations for all prior periods presented prior to the Separation of Alcoa.

The cash flow information presented in the table above included the cash flows related to Alcoa Corporation for the first ten months of 2016 and full year 2015.

The data presented in the Selected Financial Data table should be read in conjunction with the information provided in Management’s Discussion and Analysis of Financial Condition and Results of Operations in [Part II, Item 7](#s25186CBC7A5D52B2907CADC3BA1E73D5).

and the Consolidated Financial Statements and Notes in [Part II, Item 8](#sF2632D3E53605B1596C942D86FA3D8E0).

(Financial Statements and Supplementary Data) of this Form 10-K.

Management’s Reports to [removed: Arconic] [added: Howmet] Shareholders

The accompanying Consolidated Financial Statements of [removed: Arconic] [added: Howmet Aerospace] Inc. and its subsidiaries (the “Company”) were prepared by management, which is responsible for their integrity and objectivity.

In order to evaluate the effectiveness of internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act, management has conducted an assessment, including testing, using the criteria in *Internal Control—Integrated Framework (2013)*, issued by the Committee of Sponsoring Organizations of the Treadway Commission [removed: (COSO).][added: ("COSO").]

Based on the assessment, management has concluded that the Company maintained effective internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on criteria in *Internal Control—Integrated Framework (2013)* issued by the COSO.

The effectiveness of the Company’s internal control over financial reporting as of December 31, [removed: 2019] [added: 2020] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which is included herein.

| /s/ John C. Plant | [added: | |]

| John C. Plant [added: Executive] Chairman and [removed: Chief] [added: Co-Chief] Executive Officer | [added: | |]

| /s/ Ken Giacobbe | [added: | |]

| Ken Giacobbe Executive Vice President and Chief Financial Officer | [added: | |]

To the Board of Directors and Shareholders of [removed: Arconic] [added: Howmet Aerospace] Inc.

We have audited the accompanying consolidated balance sheet of [removed: Arconic] [added: Howmet Aerospace] Inc. and its subsidiaries (the “Company”) as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] and the related consolidated statements of operations, of comprehensive [removed: income (loss),] [added: income,] of changes in equity and of cash flows for each of the three years in the period ended December 31, [removed: 2019,] [added: 2020,] including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on criteria established in [removed: *Internal] [added: Internal] Control - Integrated [removed: Framework*] [added: Framework] (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2019] [added: 2020] in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on criteria established in [removed: *Internal] [added: Internal] Control - Integrated [removed: Framework*] [added: Framework] (2013) issued by the COSO.

As discussed in Note [removed: A] [added: B] to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019.

The critical audit [removed: matters] [added: matter] communicated below [removed: are matters] [added: is a matter] arising from the current period audit of the consolidated financial statements that [removed: were] [added: was] communicated or required to be communicated to the audit committee and that (i) [removed: relate] [added: relates] to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit [removed: matters] [added: matter] below, providing [added: a] separate [removed: opinions] [added: opinion] on the critical audit [removed: matters] [added: matter] or on the accounts or disclosures to which [removed: they relate.][added: it relates.]

*Goodwill Impairment [removed: Assessment - Engine Products and] [added: Assessments –] Engineered Structures Reporting [removed: Units*][added: Unit*]

As described in Notes A and [removed: N] [added: P] to the consolidated financial statements, the Company’s consolidated goodwill balance was [removed: $4,493] [added: $4,102] million as of December 31, [removed: 2019,] [added: 2020,] and the amount of the goodwill associated with the [removed: Engine Products and] Engineered Structures reporting [removed: units] [added: unit] was [removed: $2,164 million and $289 million, respectively.][added: $304 million.]

The determination of fair value using this technique requires management to use significant estimates and assumptions related to forecasting operating cash flows, including sales [removed: growth (volumes and pricing),] [added: growth,] production costs, capital spending, and discount rate.

The principal considerations for our determination that performing procedures relating to the goodwill impairment [removed: assessment] [added: assessments] of the [removed: Engine Products and] Engineered Structures reporting [removed: units] [added: unit] is a critical audit matter are [removed: there was] [added: the] significant judgment by management when developing the fair value measurements of the reporting [removed: units.][added: unit.]

This in turn led to a high degree of auditor judgment, effort and subjectivity in performing procedures and evaluating audit evidence related to management’s cash flow projections and significant [removed: assumptions, including] [added: assumptions related to] sales [removed: growth (volumes and pricing),] [added: growth,] production costs, and discount [removed: rates.][added: rate for the first quarter assessment, and sales growth and production costs for the annual impairment assessment.]

In addition, the audit effort involved the use of professionals with specialized skill and [removed: knowledge to assist in performing these procedures and evaluating the audit evidence obtained.][added: knowledge.]

These procedures included testing the effectiveness of controls relating to management’s [removed: annual] goodwill impairment [removed: assessment,] [added: assessments,] including controls over the valuation of the Company’s [added: Engineered Structures] reporting [removed: units.][added: unit.]

These procedures also included, among others, testing management’s process for developing the fair value estimates; evaluating the appropriateness of the discounted cash flow [removed: model] [added: models] and performing sensitivity analyses over the [removed: assumptions in the model;] [added: assumptions;] testing the [removed: completeness, accuracy,] [added: completeness] and [removed: relevance] [added: accuracy] of underlying data used in the [removed: model;] [added: models;] and evaluating the [added: reasonableness of the] significant assumptions used by [removed: management, including] [added: management related to] sales [removed: growth (volumes and pricing),] [added: growth,] production costs, and discount [removed: rates.][added: rate for the first quarter assessment and sales growth and production costs for the annual impairment assessment.]

Evaluating management’s assumptions related to sales growth [removed: (volumes] and [removed: pricing) and] production costs involved evaluating whether the assumptions used by management were reasonable by considering [added: (i)] the current and past performance of the reporting [removed: units, obtaining evidence to support the reasonableness of] [added: unit, (ii)] the [removed: assumptions,] [added: consistency with relevant industry data,] and [added: (iii)] considering whether the assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in the evaluation of the discounted cash flow models [removed: and certain significant assumptions, including] [added: and, for] the [added: first quarter assessment, the] discount [removed: rates.][added: rate assumption.]

[removed: February 26, 2020][added: | 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

[removed: Arconic] [added: Howmet] and subsidiaries

| For the year ended December 31, | [removed: 2019] | | [added: 2020] | | [removed: 2018] | | | | [removed: 2017] [added: 2019] | | | [added: | | | 2018 | | |]

| Cost of goods sold (exclusive of expenses below) | [removed: 11,227] | | [added: 3,878] | | [removed: 11,397] | | | | [removed: 10,221] [added: 5,214] | | | [added: | | | 5,114 | | |]

| Selling, general administrative, and other expenses | [removed: 704] | | [added: 277] | | [removed: 604] | | | | [removed: 715] [added: 400] | | | [added: | | | 371 | | |]

| Research and development expenses | [removed: 70] | | [added: 17] | | [removed: 103] | | | | [removed: 109] [added: 28] | | | [added: | | | 41 | | |]

| [removed: Provision for depreciation] [added: Depreciation] and amortization | [removed: 536] | | [added: 338] | | [removed: 576] | | | | [removed: 551] [added: 536] | | | [added: | | | 576 | | |]

| Restructuring and other charges [removed: ([C](#sD9CA82AEB8D2531F8E367A74B8644F4A))] | [removed: 620] | | [added: 164] | | [removed: 9] | | | | [removed: 165] [added: 620] | | | [added: | | | 9 | | |]

| Other [removed: expense (income),] [added: (expense) income,] net [removed: ([E](#sB73D2DA032F053F0835BFA582375C547))] | [removed: 122] | | [added: (74)] | | [removed: 79] | | | | [removed: (486] [added: (31)] | | [removed: )] | [added: | | | 30 | | |]

| Provision for income taxes [removed: ([G](#s1DC690E617575A6EB9DE2E8429251B9A))] | [removed: 105] | | | | [removed: 226] | [added: 38] | | | [removed: 544] | | | [added: 21 | | | | | | 107 | | |]

| Net income [removed: (loss)] | [added: | |] $ | [removed: 470] [added: 261] | | | [added: | |] $ | [removed: 642] [added: 470] | | | [added: | |] $ | [removed: (74] [added: 642] | [removed: )] |

| Amounts Attributable to [removed: Arconic] [added: Howmet Aerospace] Common Shareholders [removed: ([I](#s6A59BB18819152BB9DD38BDE67BE35E3)):] [added: ([K](#if209ebc53ef94a25a993a2b3ddc0993f_127)):] | | | | | | | | | | | | [added: | | | | | |]