Howmet’s Protection of the F-35 Program Despite Lockheed Martin’s Actions

Howmet Aerospace (NYSE:HWM) wishes to briefly comment on the lawsuit filed by Lockheed Martin yesterday concerning the F-35 Joint Strike Fighter Program (the “F-35 Program”). Contrary to the allegations in Lockheed Martin’s complaint, Howmet takes its contractual and regulatory obligations seriously and believes it has complied with those obligations in all material respects.

Howmet has been a proud supplier to Lockheed Martin and other entities that participate in the F-35 Program for decades. Howmet supplies titanium ingot, billet, sheet and plate (the “Products”) to Lockheed Martin and other customers that also serve as suppliers to Lockheed Martin (collectively, and including Lockheed Martin, the “Customers”). The Products are made by mixing titanium sponge and titanium scrap metal that is reverted back to Howmet by its Customers to recycle into new Product.

Russia’s invasion of Ukraine in early 2022 dramatically reduced global titanium sponge supply. As a result, Howmet’s titanium sponge suppliers drastically increased their prices, contrary to their agreements with Howmet.

At the same time, further exacerbating the situation, Lockheed Martin permitted Customers to sell their revert scrap metal to third parties rather than provide it to Howmet as contractually required. This allowed the Customers to profit from highly inflated prices on the open market.

Despite these significant challenges, Howmet continued to purchase titanium sponge and titanium scrap metal on the open market in order to supply the F-35 Program and our Customers, including Lockheed Martin.

Since 2022, Howmet has been transparent with Lockheed Martin about these challenges and has acted in good faith to attempt to reach a reasonable resolution for the benefit and long-term health of the F-35 Program. While such discussions were still ongoing, Lockheed Martin unfortunately chose to file a meritless lawsuit seeking to compel Howmet to continue to supply Product at prices that no longer reflect commercial reality and on terms that Howmet believes it is not contractually obligated to provide. Howmet looks forward to defending itself vigorously in court against Lockheed Martin’s claims. In the meantime, Howmet remains open to discussing a reasonable resolution.