Howmet Aerospace Inc.

Good day and welcome to the Helmet Aerospace second quarter of 2024 earnings call. Please note that today's event is being recorded and all participants will be in a listen-only mode. Should you need any assistance on today's call, 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. If you would like to ask a question, you may press star, then one on your telephone keypad. And to withdraw a question, please press star, then two. On today's call, we ask that you please limit yourself to only one question during Q&A. Also, please be aware that today's call is being recorded. I would like to now turn the call over to Paul Luther, Vice President of Investor Relations.

Please go ahead. Thank you, Joe. Good morning and welcome to the Hamet Aerospace Second Quarter 2024 Results Conference Call. I'm joined by John Plant, Executive Chairman and Chief Executive Officer, and Kenji Okobi, 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, operating income, and EPS mean adjusted EBITDA excluding special items, adjusted operating income 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.

Thank you, PT, and welcome, everyone, to the Howmet second quarter earnings call. Q2 was a strong quarter for the company, with metrics exceeding both guidance and prior year results. Year-over-year revenue growth was 14%, building on the 14% growth in the first quarter. Within this number, commercial aerospace growth was an outstanding 27%, continuing a strong trend. Other revenue markets will be covered later in the call. EBITDA was $483 million with a margin rate of 25.7%, while operating income was $414 million with a margin of 22%. Operating income was up 38% year-over-year and increased 370 basis points, with engines and fasteners performing at a high level, supported by an increasingly strong set of results in our structures business. Wheels was essentially flat, despite the market declines. Earnings per share were 67 cents, an increase of 52% year-on-year. Free cash flow was also strong at $342 million, resulting in a quarter-end cash balance of $752 million after share buybacks of $60 million, and furthermore, a $23 million bond repurchases of the 2025 bonds and also dividends of $21 million. The strong cash balance for an early retirement at par of the remaining $205 million of the 2024 bonds are on July 1st, one day after the quarter end. These actions will reduce annual interest costs by some $12 million and continue the march to reduce interest rate drag which is now well below 200 million with its increase in free cash flow yield. I'll provide commentary on the future dividend actions in the outlook section. You'll also note later in the increase in the capital expenditures in 2024 of a $30 million level. This takes the level towards 320 million for the year. And these expenditures are mainly the deposits on future new machine tools which are required to support even further new capacity growth for our engines business. This is necessary as we have now secured additional market share at the second engine manufacturer. These revenues will also commence during 2026, albeit at a quarter or so later than the previous discussions on this topic. I'll now pass the call across to Ken to provide additional details by end market and by business segments.