What Changed
Risk factors · Feb 14, 2025 → Feb 12, 202626 added · 6 removed between the two most recent 10-Ks. The risks a company starts — or stops — disclosing are often the story.
Newly disclosed
- For example, quality control issues at The Boeing Company (“Boeing”) relating to which the Federal Aviation Administration did not approve production rate increases for the Boeing 737 MAX until October 2025 and a Boeing labor union work stoppage in late 2024 negatively impacted narrow body and wide body production rates.
- Additionally, while the use of AI can be beneficial to the Company, AI algorithms are currently known to sometimes produce unexpected results or behave in unpredictable ways that can generate, among other things, irrelevant, nonsensical, inaccurate, harmful, discriminatory or infringing results, which could harm the Company’s business, reputation, or result in legal or regulatory actions.
- These conditions may impact the ability of the Company to complete the Proposed CAM Acquisition on the expected terms and within the anticipated closing time period or at all because required regulatory approval or other conditions to closing are not received or satisfied on a timely basis or at all.
- Howmet may not realize the expected benefits of the Proposed CAM Acquisition, including the anticipated synergies and favorable tax treatment of the proposed transaction and the anticipated broader offering of fastening solutions within the anticipated time frame, or at all.
- However, no assurance can be given that Howmet will obtain the intended financing for the Proposed CAM Acquisition on commercially reasonable terms or terms acceptable to us, and the Company may be required to finance a portion of the purchase price of the Proposed CAM Acquisition at interest rates higher than currently expected.
- Any failure to complete the Proposed CAM Acquisition on the anticipated time frame or at all, and any limitations on Howmet’s ability to obtain financing and related reductions in the Company’s liquidity or increases in the Company’s borrowing costs may adversely affect Howmet’s business, financial condition, or results of operations.
- Acquisitions, including the planned Proposed CAM Acquisition, present significant operational challenges and risks, including the effective integration of the business into the Company, which may be more difficult, time consuming or more costly than expected and may divert management attention from the Company’s existing business.
- Acquisitions, including the Proposed CAM Acquisition, may increase operating costs, expose the Company to potential unforeseen issues and legal liabilities, including the assumption of liabilities (including unforeseen liabilities) of acquired companies or businesses, increase cybersecurity issues or vulnerabilities or result in customer loss and business disruption (including, without limitation, difficulties in retaining or maintaining relationships with employees, customers or suppliers).
- In addition, laws and regulations focused on the development, use and provision of certain new technologies, such as AI (including generative AI) technologies, and the enforcement thereof are growing worldwide and may impose certain obligations on Howmet, may limit how we use these technologies and could result in reputational damage, monetary penalties or other regulatory actions to the extent Howmet uses such technologies and fails to comply with such obligations.
- Furthermore, unauthorized use, misuse or increased use of AI may increase the risk of a loss of intellectual property, including, for instance, if an employee inputs confidential information, such as trade secrets, into AI or machine learning technologies, resulting in such information becoming accessible by third parties, including competitors.
- Howmet intends to finance the Proposed CAM Acquisition through utilizing a variety of financing sources, which may include borrowing under its commercial paper program or debt facilities, the issuance of debt securities and cash on hand.
- The Company's competitors may adopt new technological initiatives and implement technological advancements using AI to pursue new or improved products and services more quickly, profitably, successfully and effectively than the Company.
No longer disclosed
- For example, quality control issues and a recent labor union work stoppage at The Boeing Company (“Boeing”) have negatively impacted, and are expected to negatively impact, narrow body and wide body production rates in the near term.
- Limitations on Howmet’s ability to access global capital markets, a reduction in Howmet’s liquidity or an increase in borrowing costs could materially and adversely affect Howmet’s ability to maintain or grow its business, which in turn may adversely affect its financial condition, liquidity and results of operations. 13 Table of Contents An adverse decline in the liability discount rate, lower-than-expected investment return on pension assets, and other factors could adversely affect Howmet’s results of operations or amount of pension funding contributions in future periods.
- If our government contracts are terminated, if we are suspended from government work, or if our 14 Table of Contents ability to compete for new contracts is adversely affected, our financial condition and results of operation could be adversely affected.
- Failure to attract and retain a qualified workforce and key personnel or to provide adequate succession planning could adversely affect Howmet’s operations and competitiveness.
- 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.
- Howmet may face challenges to its intellectual property rights which could adversely affect the Company’s reputation, business, and competitive position.