Good morning, ladies and gentlemen, and welcome to the Howmet Aerospace Q1 2022 results conference call. My name is Eli, and I will be your operator for today. As a reminder, today's conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Paul Luther, Vice President of Investor Relations. Please proceed, sir. Thank you, Eli. Good morning, and welcome to the Howmet Aerospace Q1 2022 results conference call. I'm joined by John Plant, Executive Chairman and Chief Executive Officer, and Ken Giacobbe, 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 addition, we've included some non-GAAP financial measures 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. I would also like to point out that starting this quarter, we are moving our segment profitability measure from segment operating profit to segment-adjusted EBITDA. We will use this measure to assess the segment's performance going forward. We will continue to provide depreciation and amortization by segment, giving investors the ability to continue to calculate segment operating profit. EBITDA for previous period segment profitability are included for comparison purposes. You can find these numbers in our earnings press release and on slides 19 and 20 in today's presentation deck. With that, I'd like to turn the call over to John. Thanks, PT. Good morning, everyone and welcome. Please move to slide number 4. The Q1 was another strong quarter for Howmet. Revenue was above the high end of guidance, and profit was near the high end of guidance, which provided a very healthy start to the year. As expected, revenue was a little higher than the Q4 of 2021, with higher sales to commercial aerospace due to narrow body programs. These were partially offset by sales to the Boeing 787 platform and inventory takeout for structures on the F-35 program. Revenue played out as expected, and the good news is that we now have a new Boeing skyline production plan for the 787. The other good news is the improved outlook for COVID, with large reductions in cases and deaths in the Western world. This has led to reduced testing for international travel, which is an important precursor to the pickup in wide body commercial aerospace programs. The tragic Russian invasion of Ukraine has led to further increases in commodity inflation, notably for oil and materials. The effects of this will be outlined in my guidance comments. Moving to specific numbers. Revenue for the quarter was $1.3 billion, an increase of 10% year-over-year, which included additional material pass-through of approximately $40 million. Clearly, this pass-through is excellent. However, it does unfavorably reflect in the EBITDA margin percentage by 70 basis points year-over-year. Without this effect, Q1 EBITDA margin was 23.4%, which was well ahead of Q1 of 2021. On a sequential basis, we also had an EBITDA margin improvement of 10 basis points, adjusting for material pass-through. Adjusted EBITDA was strong at $300 million, and earnings per share of $0.31, both of which were ahead of the midpoint of guidance. Free cash flow in the Q1 was essentially break even and resulted in cash on hand of $522 million after buying back $175 million of shares in the quarter. This buyback included an additional $75 million over and above the January buyback of $100 million noted in our February earnings call. The average diluted share count improved to 425 million in Q1, with an exit rate of 423 million shares. Lastly, we reduced pension and OPEB liabilities by approximately $200 million year-over-year and reduced cash contributions by approximately 60%. I'll now pass the call commentary over to Ken to detail the market dynamics and provide commentary on segment performance. Great. Thank you, John. Please move to slide 5 for an update on the end markets. Q1 revenue was up 10% year-over-year. The commercial aerospace recovery continued in the Q1 with commercial aerospace revenue up 29% year-over-year and 4% sequentially, driven by the Engine Products segment and the narrow-body recovery. Commercial aerospace was 44% of total revenue. Although an improvement from 2021, it continues to be far short of the pre-COVID level, which was 60% of total revenue. Moving to defense aerospace, revenue was down 16% year-over-year and essentially flat sequentially, driven by customer inventory corrections for the F-35. Commercial transportation, which impacts both the Forged Wheels and Fastening Systems segment, was up 10% year-over-year and 4% sequentially, driven by higher aluminum prices. Finally, the industrial and other markets, which is composed of IGT, oil and gas, and general industrial, was flat year-over-year. Going deeper within the industrial and other markets sector, IGT continues to be strong and was up 14% year-over-year and 3% sequentially. Please move to slide 6. Let's start with the P&L, with the focus on enhanced profitability. In the Q1, we had a healthy start to the year with adjusted EBITDA of $300 million, which exceeded the guidance midpoint. Margin was 22.7% and in line with guidance. Excluding the year-over-year revenue impact of higher material passthrough, EBITDA margin was 23.4%. Incremental flow through of the higher revenue was in line with expectations at 33%. Adjusted earnings per share was strong at $0.31, up 41% year-over-year. Moving to the balance sheet. Free cash flow for the Q1 was essentially break even, while building approximately $85 million of inventory in anticipation of the commercial aerospace recovery. Cash on hand was $522 million after buying back $175 million of common stock. The average diluted share count improved to a Q1 exit rate of 423 million shares. On a year-over-year basis, net pension and OPEB liabilities were reduced by $200 million, and cash contributions were reduced by 60% to $13 million. Annual cash contributions are estimated to be approximately $60 million versus expense of $20 million. We continue to focus on reducing pension and OPEB gross and net liabilities. Comparing to the year of separation in 2020, annual cash contributions were approximately $240 million and are expected to improve to $60 million this year, a substantial improvement. Additionally, expense is expected to be reduced from $35 million in 2020 to $20 million this year. Moving to capital allocation. We continue to be balanced in our approach. Howmet's improved financial leverage and strong cash generation were recently reflected in Moody's April 27 credit rating upgrade from Ba2 to Ba1. Capital expenditures were approximately 94% of depreciation in the Q1, with productivity CapEx focused on automation projects in engines and fastener segments to improve yields and mitigate labor risk. We purchased approximately 5 million shares of common stock in the quarter for $175 million, with an average acquisition price of $34 per share. Lastly, we continue to be confident in our free cash flow and paid the quarterly dividend of $0.02 per share of common stock. Now let's move to slide 7 to cover the segment results. As previously mentioned, starting this quarter, we're moving our segment profitability measure from segment operating profit to segment adjusted EBITDA. We will use this measure to assess the segment's performance going forward while continuing to provide segment D&A in the appendix. Moving to Engine Products. Year-over-year revenue was up 18% in the Q1. Commercial aerospace was up 45%, driven by the narrow body recovery. IGT was 14% higher as demand for cleaner energy continues. Defense aerospace was down 9% year-over-year. Segment adjusted EBITDA increased 31% year-over-year, and margin improved 270 basis points while adding approximately 325 employees in the Q1 which now brings the total adds to 1,275 employees since Q1 of 2021. Now let's move to slide 8. Fastening Systems year-over-year revenue was 3% lower in the Q1. Commercial aerospace was flat as the narrow-body recovery was offset by continued production declines for the 787. Defense aerospace was down 24%, while commercial transportation was up 15%. Segment adjusted EBITDA decreased 2% year-over-year, while margin improved 20 basis points. The quarter was impacted by inflationary costs and the addition of approximately 135 employees to support future growth. Now let's move to slide 9. Engineered Structures year-over-year revenue was 3% higher in the Q1. Commercial aerospace was 36% higher as the narrow-body recovery more than offset the impact of the declines for the 787. The defense aerospace market was down 26% year-over-year, driven by customer inventory corrections for the F-35. Segment adjusted EBITDA increased 5% year-over-year, while margin improved 10 basis points. Finally, please move to slide 10. Forged Wheels year-over-year revenue was 9% higher in the Q1. The $20 million increase in revenue year-over-year was driven by higher aluminum prices of $29 million, somewhat offset by lower volumes. Pass-through of higher aluminum prices did not impact EBITDA dollars, but unfavorably impacted margin by approximately 360 basis points. Commercial transportation demand remains strong, but volumes continue to be impacted by customer supply chain issues limiting commercial truck production. One final comment on the segments. Consistent with our expected revenue growth, we are now hiring in every segment except for Engineered Structures, which is expected to commence in the second half of the year. Before turning it back over to John to discuss guidance, I'd like to point out one additional item related to tax. There's a slide in the appendix that covers the operational tax rate. In 2021, the annual operational tax rate improved to 25%. The rate further improved to 24.6% in the Q1 of 2022. When comparing sequential performance, the Q1 rate of 24.6% compares to 20.7% in Q4 of 2021. The 390 basis points sequential increase in operational tax rate unfavorably impacted Q1 earnings per share by approximately $0.015. Now, let me turn it back over to John. Thanks, Ken. Let's move to slide 11. Moving to ESG, I'd encourage you to read our sustainability report found at howmet.com in the investor section. Howmet is committed to improving our environmental footprint, and actions taken in 2021 have reduced Howmet's greenhouse gas emissions, energy consumption, wastewater use, and landfill waste. We have funded approximately 100 projects, which are expected to reduce Howmet Scope 1 and Scope 2 greenhouse gas emissions by 21.5% by 2024 compared to our 2019 baseline. Howmet is also committed to a safe workplace while fostering a diverse, equitable, and inclusive work environment where all of our employees can thrive. Our safety record is five times better than the industry average. Moreover, Howmet was named one of the best places to work for LGBT equality by the Human Rights Campaign Foundation. Regarding governance, the company was recognized by 50/50 Women on Boards for having 40% of our board of directors made up of women. Lastly, 81% of our key suppliers have sustainability programs considered to be leading or active. Howmet's portfolio of advanced energy-efficient products span several markets and contribute to substantial reductions in emissions. We will discuss Howmet's IP rich portfolio and several of our differentiated products at Howmet's Technology Day on Monday, May 23rd in New York. Let's move to slide number 12 on our Q2 guidance. The revenue outlook continues to show improvement. Let me start with commercial aerospace. Airline load factors show improvements in North America and Europe. China is lagging, but is expected to show improvements later in 2022. This is leading to solid narrow body build projections for the Airbus A320 and 321, and the Airbus 321XLR family of aircraft. Moreover, there is a notable order input for the Airbus 220 aircraft, for which Howmet has a very healthy shipset value, roughly in line with the A320. We also expect to see further value content improvements later in 2022, when we begin to transition to the improved Pratt & Whitney geared turbofan engine, having both increased thrust and fuel efficiency. The volumes for the Boeing 737 MAX continue to grow, with the rate improving to 31 per month compared to the exit rate in 2021 of 17 per month. As the rate moves towards this 31 per month range, the remaining inventory overhang will be extinguished. We also note by the middle of 2023, the Airbus A320/A321 rate of 65 per month will require Howmet to be at this rate as we transition into 2023, which is another pickup from the mid-50s rate in the middle of 2022. Revenue for the defense sector is solid, and after the stocking of the structural bulkheads for the F-35, driven by lower than planned Lockheed build in 2020 and 2021, we expect growth will resume in 2023. We note the selection of the F-35 programs for the air forces in Germany, Switzerland, Canada, and Finland in recent months, which is going to drive future volume projections. Moving to industrial and other markets, revenue for IGT remains strong, notably with average shipset values increasing with the larger, more sophisticated turbine blades for the aging GE J-Class turbines. One good aspect of the oil price increase is the expectation for Howmet will show growth later in the year. Class 8 truck and trailer manufacturing are also expected to begin to grow as the supply chain constraints begin to ease, especially in the second half, but in fact, beginning in the Q2. Specifically to address numbers for Q2 and the year, revenue is expected in Q2 to be $1.37 billion ±$20 million. EBITDA of $310 million ±$8 million. EBITDA margin of 22.6% plus thirty basis points, minus twenty basis points, and earnings per share of $0.32 ±$0.01. For the year, revenue of $5.64 billion ±$80 million. EBITDA of $1.3 billion ±$35 million. EBITDA margin of 23% +30 basis points, -20. Earnings per share are expected to be in the range of $1.39 ±6 cents. Free cash flow $625 million ±$50 million. Implicit in these numbers is capital expenditure of approximately $235 million and an improved tax rate of approximately 24.5%. In order to provide color on the near term, revenues reflect the reduction of the Boeing 787 volumes and also increases for commodity inflation recoveries. There's a similar impact on EBITDA and EBITDA margin. You'll note that the guidance leads to another very solid year for Howmet with growth and profit improvement and is setting this, the company up well to address the further growth expected in 2023 across all of our markets, and especially the start of growth in the wide body market. Also, as Ken mentioned, notably, we are now recruiting in three of our four segments. The Q1 was a healthy start to the year. We delivered strong results that met or exceeded guidance. Year-over-year revenue grew 10% and earnings per share grew 41%. Free cash flow was essentially break even after approximately $85 million increase in inventory to support the aerospace recovery, plus the commensurate increase in AR as a result of the increased sales. Liquidity is strong and cash generation is expected to be very positive in the remaining quarters of 2022. The Q2 outlook for revenue is expected to be approximately $45 million higher than in Q1, with margins of approximately 22.5%-23%, setting a platform for a healthy 2022. Full year adjusted earnings per share guidance has also been increased. Now we can move to Q&A. Thank you. We will now begin the question and answer session. We request that you limit yourself to one question. Please hold while we compile the Q&A roster. Our first question is from Robert Stallard from Vertical Research. Your line is open. Thanks so much. Good morning. Hey, Rob. John, there's obviously been a lot of talk about titanium, and the Russian sanctions, on VSMPO-AVISMA. It sounds like you're in discussions with a lot of potential customers. I was wondering if you could give us an idea, firstly of the timing on this, when you think these things will be sorted out. Secondly, do you think you'll be needing to spend more CapEx to add additional capacity? Thank you. Okay. For titanium, let me provide a slightly broader context for everybody on the call. I think everybody knows that Russia has been historically the largest supplier of titanium products in the world, coming from a low-cost country base. The business of VSMPO-AVISMA is contained within their industrial and military complex. Clearly, it's pretty tough for companies to support this at this time, given the invasion and I'll say casualties as resulting from that invasion. Specifically regarding inquiries, we've been responsive to many RFQs, of which we expect to update you later in the year. Our thought is it's more likely to be a Q4 item and then increasingly a pickup of sales into 2023. Currently, we have not built any sales into our guidance for the year, but expect to update you in August when we provide our Q2 earnings. There are zero in the revenue currently, but we do expect to show that when we've got things that we are clear on a guide that we would give you. Currently, our thought is that the aerospace customers, both aircraft builders and engine builders and other industrial markets, they're currently building products, living off their inventories. Albeit some of those customers do continue to buy from VSMPO-AVISMA just as normal. Regarding capital expenditure, Rob, we have no need to buy capital. Our thought is that we have enough available capacity to provide a very substantial supply to the industry, not just the aerospace industry, maybe also for some industrial markets as well. It's unlikely that at this point until I knew the full outcome of the trajectory of this conflict that we place capital, because I don't want to do that and then have people forget the current situation and rush back to sourcing in Russia. Basically, we're treating this as a serious opportunity and should see benefits in the back end of the year going into 2023. More specifically, I'll give you a revenue picture of that on the next call hopefully. That's great. Thanks so much, John. Thank you. Next, we have Seth Seifman with, from JP Morgan. Your line is now open. Oh, hi. Thanks very much. Good morning, everyone. John, you mentioned I think early on in the call, you talked about 787 production plan. You talked about wide body as a driver into 2023. I think You know, said relatively shortly that you'd be hiring in all of the segments. You know, what can you tell us about that 787 outlook? What gives you confidence that this schedule will stick, and also that given the level of inventory at Boeing that we'll be able to see a meaningful increase in production? Okay. Clearly, as each month goes by and each quarter goes by, our assumption is that Boeing are getting that much closer to resolution of this. We follow closely what they say. I noticed, for example, CNBC interviews held recently at the South Carolina plant showing 787 tails on that. You know, I think we can be a little bit more optimistic that things are gaining pace to get resolution. Clearly certification is not yet there, although we again follow what the FAA say and say that they will certify each individual plane delivered to the customers. We've heard that those deliveries are gonna commence by the end of the Q2 and so have revised our guidance and also future outlook in accordance with the guideline issued by Boeing. Essentially that's taken down the total number of Boeing 787 aircraft produced this year from, I think, 35 down to 24 or 25, something like that, and taken that revenue hit, but as you see, maintained our guide for the year. Clearly we'll feel a lot more comfortable when we see those deliveries actually commence rather than just hear you say they're gonna be commenced because that will be then an absolutely clear sign that those I'll say retrofitting and correction of their planes and then the current production is in, let's call it an okay condition. I think we should be optimistic for the future, as I said before. It's a great aircraft and there's clearly a customer need for it. I think to gain the economics around wide body long-haul transportation or passenger transportation for the world, we need that aircraft. Optimistic that the current timeline is the one that's gonna happen. Great. Thanks very much. Thank you. Next, we have Myles Walton from UBS. Your line is now open. Thanks. Good morning. John, you mentioned inflationary effects running through the business. I wonder if you can just delve a little bit deeper of what maybe is not getting covered in your pricing. I noticed that the metal pass through outside of the wheel segment. I guess it's about $11 million and growing. Where is that disproportionately falling? Well, we've seen increases in the last year from aluminum, nickel, cobalt, and more recently, titanium. Plus, you see rare metals like rhenium, et cetera. It's been pretty widespread, the commodity inflation. You'll have noted the halting of nickel trading during the last quarter, although that's now sort of recommenced. Our statement that we've made previously that we pass through 95% of metals holds and that has been seen to hold as we've moved through the last few quarters. That, that's to the good. On the labor side, we know clearly we seek to offset that in terms of productivity as we do each year. Clearly some of the other costs we are seeking to pass through as well and indeed have some agreements, but again, I've not really detailed those out and don't plan to do so today. They do cover things like the cost of natural gas and electricity and freight, et cetera, et cetera. Clearly the management of inflation is key. I think the good news is you've seen Howmet to maintain its margins and in fact without it would have posted increased margins. I think the secret or the key to all of this is can you move through this inflationary period, stay whole in terms of your absolute profits, and if you can also increment margin or at least not go backwards fundamentally, then that's a huge success in this environment, and that's what we're seeking to do. Okay. The $125 million placeholder, what is that currently in 2022 for? You can assume it's probably up $50 million at this stage, give or take. You know, these are very approximate numbers because it will change on a daily basis. But clearly, the 125 was correct three months ago or two months ago, and since then things have moved on. I think you know that the effects of the war that Russia launched on Ukraine has also had a fundamental effect on commodity prices starting with oil, but also into metals as well. It's moving rapidly at the moment again, albeit I'm hoping that some of this volatility begins to quieten down as we move into the second half of the year. Thank you. Next we have David Strauss from Barclays. Your line is open. Thanks. Good morning. Hey, David. Hey, John. The headcount increases. It seems like you're hiring back faster maybe than you had initially talked about a quarter or two ago. Could you just talk about kind of what the plan is for headcount now? I guess where you stand in each of the businesses relative to where you were pre-pandemic and the plan from here. Then, Ken, could you just talk about working capital, how you would expect the Q1 build to kind of unwind during the course of the rest of the year? Thanks. In Q2 of last year, you'll recall us stating we were gonna hire, I think it was, 400 or 500 people, which we started with and then continued. This is in our Engine Products business. By the end of the year, we'd recruited some 950 net additional people. I think starting early as we did and providing the base level of training, as clearly you can see, it's paid dividends in you looking at our Engine margins today, which have shown, I'll say, a good outcome in the light of us taking on some of that pain last year. We continued to recruit in Engine Products in the Q1 of this year and added, I'm gonna say, about another 250 heads. But you know, again, it's an approximate number. Wheels, as you know, we already started recruiting even before engine, and that has continued. As I mentioned earlier in my remarks, we do see the start of some improvements in the commercial truck build in the Q2, as a precursor to a stronger second half in that business and a robust 2023. Again, there's a willingness to recruit an increasing headcount in that business as well. I think the relative surprise to us was the decision that we made mid Q1 to commence hiring in our fastener business. That's a little bit ahead of what we thought because of the demand outlook that we see, again, starting in Q2 and balance of the year. Those are the three businesses that are recruiting, albeit about 130 heads, give or take. I'll say the recruiting in fasteners is about 130 heads, give or take. A modest step, but an important step, again, preparing the ground as we did prepare the ground for our engine business a few months ago. The only business so far that we have not taken any recruitment steps on is our structures business as we burn off in the first half of this year some of the overhang, particularly on the titanium and aluminum bulkheads for the F-35 program. You know, have a view that mid of the second half of the year, so let's call it end of Q3 or early Q4, and obviously that'll be finessed as we get closer to the time, then we expect to commence hiring. Some of that is also tied up in the locking down of the scale of the additional orders for titanium, which we expect to talk to you about in August. Again, in summary, three areas of recruitment and an expectation with stronger sales of our normal structural products, the resumption of the 787 in the second half of production and some improvement in our F-35 outlook, plus the titanium should enable us to consider recruitment in the second half. Ken, do you wanna just touch on inventory? Yeah. David, good morning. Your working capital question. I'll start with free cash flow for the quarter was essentially breakeven. Embedded in that number was a working capital burn of around $140 million. The biggest chunk of that was inventory, $85 million of incremental inventory to get ready for the aero build here. We wanna be prepared for our customers, be able to deliver on time and in full. You'll see that working capital number improve as we go through the year. As John mentioned, each quarter should generate positive free cash flow, Q2 to Q4. As we exit the year we've projected that we'll have midpoint of around $625 million of free cash flow. Embedded in that number is around a $50 million burn associated with working capital. We'll make a call as we get through the second part of the year. Do we wanna even build more inventory? That'd be a good problem for us to have. Right now, it's about a $50 million cash burn as we exit the year, $625 million of free cash flow, and that's a free cash flow conversion of net income of over 100%. Great. Thanks very much. Thank you. Next we have Kristine Liwag from Morgan Stanley. Your line is open. Hey, good morning. John, following up on the titanium question, earlier. I mean, we've seen Russia turn off gas to Poland and Bulgaria. When you kind of think of ways Russia could potentially pressure the West, I mean, VSMPO-AVISMA's annual revenue is only about $1.5 billion, and you can't ship 99% of an airplane, that's not a deliverable airplane. When you think about that, in that context, how much urgency are you seeing from your customer base to solve the VSMPO-AVISMA problem? Again, we have a bit of a bifurcation. Those, I'll say, customers which are continuing to buy from VSMPO-AVISMA and those which have decided to take the step, either voluntary or because of sanctions or quality certifications, that VSMPO-AVISMA will no longer be part of their supply situation. Where we are at the moment is they've placed a lot of inquiries on us. We've been responsive to those inquiries in the last couple of months, laying out our commercial response to those requests. We're in that decision-making process with the customers over which of the orders that they wanna place with us and therefore, what we plan to fulfill as we exit this year and go into next. Clearly there was a buildup of inventories in recent months as people assessed that a conflict was potentially about to occur. Also, just before sanctions is that I think a lot of inventory was pulled out of VSMPO-AVISMA, that was available, in that organization. Clearly that's given a level of security stocks that will be burnt off over the next few months. Clearly there is going to be a supply situation emerging for us and some of our competitors, I guess, I'm gonna call it Q4 is the expectation and then into 2023. Given the tensions for those customers who have taken the decision that VSMPO-AVISMA will no longer be part of their supply situation, I just cannot imagine them moving back given what I expect to be ongoing tensions with Russia. I don't think anybody's gonna say, "Oh, well, it's maybe the war's now over, but we can all go back to normal." I don't think that's a realistic scenario for us. Indeed, I note that, if for example, in Europe, they're taking steps now to gain increased energy independence, given the threats that have been exacted, and you mentioned the cessation of gas supplies into Poland et cetera. Just by way of, supplemental information, clearly the price of natural gas has skyrocketed in Europe and maybe a factor of ten, and clearly pressurizing industrial companies, including Howmet, as we cope with these energy prices. Great. John, if I could do a follow-up question. I mean, you, as you highlighted, VSMPO-AVISMA is a low-cost provider of titanium. So for you to take on incremental work, do you need to see customers change existing economics where maybe they'll award you sole source contracts going forward or have a take or pay type contract to make it more attractive? I don't think that sole source needs to be an insistence. I think a long-term contract with guaranteed share of a requirements contract is important. I certainly have no intentions of just picking up spot business for a moment in time. The most important thing for myself is to see longevity of contract through into the future such that any efforts that we make by way of bringing equipment back online and recruitment of people is there for the long haul. I've no intentions of recruiting people and then to terminate them just for a moment flash of business. Great. Thank you. Thank you. Next we have Gautam Khanna from Cowen. Your line is open. Hi, good morning, guys. Morning, Gautam. Wondering if you could. You know, there's been speculation or discussion about forgings and castings, pinch points in the supply chain. Wondering if you guys can talk about whether that's presented opportunity for you guys to pick up share, or did you see an increase in past dues this quarter, and maybe if you could quantify it. As a follow-up, just wanted to get your views on LEAP production next year. Maybe your thoughts on the 737 MAX and where that might go, just 'cause at some point, you gotta be ahead of that, to your point earlier. You talked about the A320neo, but what's your view on the MAX and how much and how quickly that rises above 31? Thank you. Okay. So, let's deal with castings and forgings because there has been commentary from some of our customers, in fact, published in the press, about they see that as a pinch point. I'm gonna repeat what I've said in that it's great now that some of our customers recognize just how difficult and exacting these products are. It's not something you can just turn on or off because of the skill, precision, and knowledge that needs to be brought to bear to make these products in volume with the tolerances and, I'll say, specifications that are extraordinary. You know, I've seen that comment. I know that one of our customers commented this week in their earnings call that they have seen some concerns around titanium castings and restricted some of their build. I suppose the relative good news for us is that we don't make titanium castings, so that puts that one to bed. In terms of volume, certainly volumes are up. You can see that in our engine business and continue to be strong both in the current quarter and outlook. Clearly there are always going to be pinch points, and when you look across the tens of thousands of different part numbers that we supply is that it's over the next 18 months, two years, three years I have no doubt that we'll have pinch points that will occur. I've seen some of the details 'cause I'm pretty intimate with some of the some of our plants and those also even anything that gets tight. So I tend to be intimate with what's going on. My sense is that we've been asked because of the change in volumes that are a little bit higher than I've seen in terms of engine build. I think that or I suspect that we're being asked to produce a little bit more than our normal share, which I guess is good. Inevitably, as we try to provide commitments against those, some of those commitments are gonna get tight and indeed have got tight. For one customer which is commenting in the press, is that, I know at the end of last month, there were parts available to be delivered, just required quality sign off, but they're just left on our dock. A general sweep through would be we're in a relatively good condition, inevitably some pinch points here or there. I expect that we will begin to see, and in fact, we are expecting to see some spot business occur in the second half of this year, where either customers haven't scheduled on us or maybe it'll occur because we may have a supply ability, whereas others may not, given our investments into the two new engine plants that we made during the 2019 year, going into early 2020. A relatively healthy position. You've seen the hiring that we've done now, let's call it around about 1,200 people into our engine business. It's all been to provide our ability to respond to the industry. Clearly part of the inventory increase that Ken's talked to, the $85 million that we put into inventory in the Q1 a significant amount of that is in our engine business such that we can respond to future demand. I hope that gives you a pretty good picture over castings and forgings and how Howmet currently. The second part of your question concerned the MAX and where's MAX going? I mean, clearly that's more a question for Boeing than it is for Howmet. You know, we are clear that the 31 is the number for this year. You know, our thoughts about it is that, assuming that 737 MAX deliveries do occur into China in the second half, which is an important step that we're still waiting to see, when that occurs and the inventories of MAX aircraft reduce at Boeing, then I'll have some confidence and the rate may tick above 31. Boeing have been in contact with us and talked about a higher number, and we note for the engine manufacturers of a potentially higher number. But at the moment we are not responsive to that given the fact that we have no guideline that that states anything greater than 31. For me, the way I think about it, which, again, may not be correct, but it's the way I think about it, is that the gating item is deliveries of the MAX into China and in the fleet for Chinese airlines. When we see that, our confidence will begin to increase. I guess that will trigger for us the thoughts around further recruitment to support LEAP engine production as we go forward into the future. Thank you. Thank you. Next, we have Robert Spingarn from Melius Research. Your line is open. Morning. John, just on these large structural castings that we've heard about and that you just referred to, is there an opportunity to get into that business or move further into that? As the competitor may just simply not be able to catch up. In the short term, only where it's currently dual-sourced would we have the opportunity. If we don't have the current tooling for the required specific dies, then there is no possibility of us being responsive to that. It would take, I'll say some time to prepare tooling and gain quality certification for any increases in that. Clearly, we have an ambition to further increase our share in that segment. It's not really a short-term issue except when there's a dual source contract. Right. I guess the reason I'm bringing it up is for a very long time, the other guy has dominated that business, and there's really been no reason for Howmet to try to go there. I'm wondering if this whole situation creates a window, and maybe as LTAs expire or a new engine comes along this is something you wanna pursue. In 2015, Howmet actually built a second plant in our LaPorte, Indiana facility, which we, I'm not quite sure why, but we call it BC two. It's not very innovative because the first one was called BC one. But basically, at that time, our first plant made relatively smaller structural castings, and I'll get this number wrong, but I'm gonna say up to 20 inches in diameter. And we make a virtue of making round castings, structural castings. We have an expertise in that. And BC two, we increased the capacity and capabilities to make larger structural castings. And I'm gonna call those out at maybe up to 40 inches. But again, that's probably a very approximate number. I need to refresh my mind about exactly what size we can. Clearly, we have the capabilities and capacity to move into further in that segment and take on board, and indeed have been taking on board some of the larger structural castings, albeit, we're not at the outer extremes of, I'm gonna say 50 or 60 inches currently. That facility is seeing increased work. You know, we have been recruiting a lot in both our first and second plants at that site and continue to do so in the future. You know, we expect to see good things come from that and also hope that upon LTA renewal, that we'll see increased business again coming towards that plant. Any timing on that last part? No, nothing that I wanna comment on today, but you know, let's say this is not a one-year thing. It's over the next I'll say 2-4 years. Okay. Thanks very much. Thank you. Next, we have Noah Poponak from Goldman Sachs. Your line is open. Hi, good morning, everyone. Hi, Noah. John, could you spend a little bit more time on the Engine Products margin and the Forged Wheels margin, just given those had a decent variance versus at least what we were looking for in the quarter? How sustainable is that engine margin? What does it take to get forged recovered as you move through the year? Okay. First of all, as a general rule, we don't guide at a sub-segment level and didn't provide that guidance in the Q1. You know, not surprisingly, I'm gonna say we were pretty much exactly where we thought we would be. First of all, the volume leverage that we are seeing in our engine business. The reason why we expected that, if you remember, we had signaled it. We talked about recruitment, we talked about metal passthrough and the upside benefit relative to volume. For us that segmental strength was, I'm gonna say, pretty much in line, if anything, towards the top end of, if not at the top end of what we thought was possible. Clearly what we'd like to see is that maintained during the course of this year. If we're able to take another step next year, well, all well and good, albeit we're not again talking and guiding at the sub-segment level. For the wheels, again, we had flagged to you and the increase in metal would have a very significant effect on the margins in that segment. With the price of aluminum, I'm just gonna refresh everybody, is that 18 months, two years ago, that was about $1,900 a ton. And that peaked in the Q1, and I'm hopefully it's peaked because it was $4,500 a ton. More than doubling of the metal inputs to that segment. I think I told you that we would be resetting prices in that segment every six months. It's probably one of the long lag items in terms of, I'll say repricing for base metal. That takes effect and took effect on the first of January as signaled to you. The reset to the increased metal prices of the second half of last year reflected in the Q1 of this year was exactly in line with what we said. I think Ken called out like 350, 360 basis points of metal impact, and that reconciles it exactly for you. Again, as we see it all is in order for that segment as well. It's the one segment that we have, which does have higher metals volatility. In normal times, I'm gonna say that's not really very significant and not significant for the company really at all. When you've had such extreme movements, and I think anybody that's going from below 2,000 to well in the between 4,000-5,000, that in my book is an extreme movement. We've seen, I think, quite extraordinary movements in all sorts of commodities in recent times. You know, you can start with oil $40-$50 a barrel to over $100. We've seen it $125. It's now like $104. I mean, these things are moving at a pace. At a sub-segment level, everything that you saw is something that we had anticipated. I'm not saying that we've got the crystal ball or foresight for everything because we don't. Same time what we'd planned out for our engine business occurred, what we said was gonna happen for margins in our wheels business occurred. For us it was just exactly as planned. Appreciate all that detail. It's helpful. Thank you. Thank you. All right. Next we have Matthew Akers from Wells Fargo. Your line is now open. Hi. Good morning. Thanks for the question. Just on the wheels business, maybe just leaving the metal price aside, like how much is volume there depressed now versus what it would be if some of these supply chain constraints weren't in the way or how much upside is there once those lift? Also it sounds like you're seeing some positive signs in that into Q2 and maybe the second half. I wonder if you could elaborate on what you're seeing there. Yeah. I've forgotten the exact number for truck build this year. I'm gonna take a swag at it and say I think we're gonna see a minimum of a 15% volume lift as we go into next year. It could be higher than that. I think there's tremendous pent-up demand for trucks. Now, I've read articles recently saying, no truck drivers are available to trucks, and our customers in fact have not been taking orders because they can't deliver. It's not a lack of willingness by fleets to order, and the backlog is bigger than it's ever been. My expectation is I'll just give like a North American number. I think we're gonna see some trucks level at like 300,000 trucks maybe as we go into next year or slightly more. It's gonna be governed by the responsiveness to capacity and the willingness to take on orders given the availability of in particular silicon for some of the semiconductors. Silicon hasn't been the only issue. It's been one of tires and resins and even windshields as well. The signs are that this is beginning to ease. It's still very constrained, but we do expect a volume pickup in Q2 and in the second half of the year building what we hope for, but we don't yet know, is gonna be a very healthy 2023 and 2024. The traditional pull ahead for emissions which you get from a North American emissions regs change for 2024, I don't believe that can realistically happen in 2023 given the capacity constraints. That's gonna mean a pretty healthy both for markets for 2023 and 2024 for both in North America and for Europe. Maybe when I'm talking about trucks, I think it's probably reasonable to give you like a headline outlook for the future. Given the requirements for CO2 reduction in Europe, then the changes which are being brought to bear over the next say five-seven years for commercial trucks in Europe, in terms of the different, I'll say power generation or, say, not from fossil fuel, but maybe from electrification or hydrogen engines or whatever it is, then that's taking a pace. All of that is really friendly towards us because you're not gonna invest in very expensive new powertrains, take on board some of those costs and the weight that those solutions involve, like heavy battery packs, without taking the advantage of the massive reduction in weight coming from aluminum wheels. My expectation is that those volume changes for those because of those emissions requirements are gonna be very healthy to the share of aluminum wheels, its penetration against steel over the next all the years up to 2030, because of these changes. I just want to give you that as a supplement to just the here and now of volume this year and into next. Yeah, that's great color. Thank you. Thank you. Next, we have Philip Gibbs from KeyBanc Capital Markets. Your line is open. Hey, thanks very much. Good morning. Phil. There was a $26 million sequential pickup in Engine Products revenues and a $23 million pickup in operating income despite further headcount additions. I think you made mention of that. What drove the near dollar for dollar conversion for revs into profits? Was that a lot of pricing, a lot of mix, timing of costs? Just trying to think about that. My guess is all of those things is that we got volume leverage. We also priced healthily. You know, efficiency in our operations as well. Basically every aspect of that business, whether it was a top line in terms of unit price or just efficiency and then volume leverage to the upside, every one of those things was coming to bear to give us the outcome that we saw, which as you saw was above guidance for the whole company, and some of that came from engine. We were, I would say, quite pleased with it. Our job is can we operate at that level going forward and hold it for the next couple of quarters, to see whether we can take further steps. That remains to be seen yet. I'm not ready to commit that or I just can't. You know, I'll just give you a guidance at the company level, which shows further EBITDA improvements in absolute profit and revenue. All's good. John, I just wanted to double-check a comment you made earlier. You said anything you may win in titanium from an RFQ standpoint is not embedded in either your revenue or CapEx thoughts for this year. Yes. 0 in the revenue line, and I have no CapEx thought at all regarding titanium at this point. There'll be no change at all for that on the CapEx line. According to how we how successful we are or also it's gonna reflect in the robustness and believability of customer schedules as we get into the back half, that I'll reflect that in guidance when we get to August. Thank you. Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.