Howmet Aerospace Inc.

Good day and welcome to the HowMet Aerospace Third Quarter 2022 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions, and please note that this event is being recorded. I would now like to turn the call over to Paul Luther, Vice President of Investor Relations. Please go ahead.

Thank you, Cole. Hello. Good morning and welcome to the HowMet Aerospace Third Quarter 2022 Results Conference Call. I'm joined by John Plant, Executive Chairman and Chief Executive Officer, and Ken Giacobi, Executive Vice President and Chief Financial Officer. After comments by John and Ken, we will have a question and answer session. I would like to remind you that today's discussion will contain forward-looking statements relating to future events and expectations. You can find factors that could cause the company's actual results to differ materially from these projections listed in today's presentation and earnings press release and in our most recent SEC filings. In today's presentation, references to EBITDA and EPS mean adjusted EBITDA excluding special items and adjusted EPS excluding special items. These measures are among the non-GAAP financial measures that we've included in our discussion. Reconciliations to the most directly comparable GAAP financial measures can be found in today's press release and in the appendix in today's presentation. With that, I'd like to turn the call over to John.

Thanks, PT, and welcome, everyone. Let's move to slide four. Hammett continued to perform well in the third quarter. Earnings per share were in line with guidance midpoint, and EBITDA margin was strong at 22.5%. Revenue, EBITDA, and earnings per share all grew for the fifth consecutive quarter. Q3 revenue was $1.433 billion and was fractionally lower compared to the midpoint of guidance of $1.44 billion. All aerospace segments showed strong performance with sequential growth in the third quarter. Commercial transportation was lower, reflecting normal seasonality and the effect of the wheels bar and cast house bill, which has now been resolved and production at the site brought back fully online as of the third week of October. In September, we saw commercial aerospace customers rebase their schedules, notably in engine products, reflecting two dynamics. Firstly, a lower narrow-body engine build over the summer and early fall than was originally envisaged, and due partially to the availability of structural castings. And secondly, customers bringing airfoil inventory levels in line by year end. I'll provide further commentary in the outlook section of my remarks. EBITDA was $323 million and further progression on Q1 and Q2 of the year. Free cash flow was positive as forecast. however, impacted by carrying higher commercial aerospace inventory levels, again, due to the scheduled rebalances of our customers. Q3 ending cash was a healthy $454 million after repurchasing approximately 2.8 million shares for $100 million, at an average price of $36.17 per share, and also paying the quarterly dividend. Legacy pension and OPEB liabilities continue to be reduced, which resulted in a reduced year-to-date cash contributions of approximately 45%. I'll now pass the call to Ken for commentary by end markets and by each business segment.