Good morning, and welcome to the Howmet Aerospace second quarter 2023 earnings conference call. All participants will be in 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. To ask a question, you may press star, then one on your touchtone phone. To withdraw from the question queue, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Paul Luther, Vice President of Investor Relations. Please go ahead. Thank you, Kate. Good morning, and welcome to the Howmet Aerospace second quarter 2023 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 today's presentation, references to EBITDA and EPS mean adjusted EBITDA, excl uding 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. Good morning, everyone. Q2 was another strong quarter for Howmet. Revenues were up 18% year-over-year and 3% sequentially, albeit Q2 is traditionally a stronger quarter seasonally than Q1 due to more effective production and sales days. Commercial aerospace increased by 23% year-over-year and continues to be the highlight of the quarter, and reflects some of the scheduled increases for the anticipated Boeing 737 build rates, which are slated to increase very soon. Defense sales were also strong at +17%. EBITDA was up 16% year-over-year and up sequentially. Earnings per share increased to $0.44 per share and exceeded the high end of guidance. This was an increase of 26% year-over-year. The cash balance was a healthy, healthy $536 million, and free cash flow was strong at $188 million, which started our consecutive quarters of cash generation. $100 million of cash flow was used to buy back shares at an average price of $45 per share. Net debt to EBITDA further improved to 2.5x leverage, and all bond debt is at a fixed rate, which provide predictable interest rate expenses into the future. Howmet has negligible exposure to floating interest rates. Regarding our revolver, we amended and extended our $1 billion undrawn credit facility to 2028, while realizing lower fees and a more favorable net debt to EBITDA covenant. Lastly, another notable item was the commercial settlement of a Lehman claim, $40 million, which is $25 million less than previously reserved, with a cash settlement to be paid in July 2023 and a further settlement in July 2024. This litigation was the most significant of all residual claims for Howmet, namely RemainCo, and dates back to 2008. Before turning it over to Ken, I want to cover three additional items. Firstly, in Q2, Howmet was impacted by approximately five days of production stoppage at our wheels plant in Hungary, due to a nine-day strike at Arconic Corporation, which is now resolved. The interruption of supplies of aluminum billet had an unfavorable effect of about $5 million to profitability, for which a claim has been lodged with Arconic under the terms of the supply agreement, and we expect to gain resolution shortly. Additionally, Howmet is assessing its significant reliance upon this source of supply. Secondly, while segment commentary is included in the finance portion of our call, let me address structures. The margin rate fell back for the first time in several quarters. The profit miss was essentially the result of adding costs for production rate increases, which we did not achieve. The cost of additional people, furnace preparation, and other rolling mill facilities preparation were unrecovered due to the production rate increases not being achieved. The main issue was bottlenecks in production at one plant. The backlog did increase since there was not a demand issue. Naturally, our plan is to achieve production rate increases and burn down the increased backlog as we move into the second half. This reduced production, combined with F-35 bulk and inventory burn down, was also not helpful, but it was in aggregate, not material in the context of the Howmet overall results, which were again, up, as I commented earlier. Finally, the Paris Air Show was held in June with the largest significant orders ever at an air show for commercial aircraft, which adds to the backlog of orders fulfilled, to be fulfilled once production rates are able to be further increased. The show was very successful for Howmet, with a combination of production meetings with both customers and investors, all reflecting the huge optimism for both the industry generally and for Howmet in particular. I'll now turn the call over to Ken, who will provide further market and segment commentary. Thank you, John. Let's move to slide five. All markets continue to be healthy, with revenue in the quarter up 18% year-over-year and 3% sequentially. Commercial aerospace continued to lead the growth, with an increase of 23% year-over-year, driven by all three aerospace segments. Commercial aerospace has grown for nine consecutive quarters and stands at 47% of total revenue. Commercial aerospace portion of total revenue is expected to increase due to the developing wide-body recovery, strong backlog of commercial aircraft orders, and spares growth. Spares for commercial aerospace continue to increase sequentially and are now trending to be approximately 95% of 2019 levels at year-end. Defense aerospace was up 17% year-over-year, driven by the F-35 and legacy fighter programs. Sequentially, defense aerospace was up 4% year-over-year, driven by Engine Products. Commercial transportation, which impacts both the Forged Wheels and Fastening Systems segments, was up 8% year-over-year and up 2% sequentially, driven by higher volumes. Finally, the industrial and other markets were up 20% year-over-year, driven by oil and gas, up 36%, IGT up 20%, and general industrial up 11%. Sequentially, these markets were up 4%, with general industrial up 9%, oil and gas up 4%, and IGT flat. In summary, another very strong quarter across all of our end markets. Now let's move to slide six. Starting with the P&L and enhanced profitability, revenue, EBITDA, and earnings per share all exceeded the high end of the guidance in the second quarter. Revenue was $1.65 billion, up 18% year-over-year. EBITDA was $368 million, up 16% year-over-year, including net headcount additions in Q2 of approximately 380 employees, which builds on additions made in Q1. Year-to-date, net headcount additions are approximately 865, which are in line with our targets. EBITDA margin was 22.3%. Adjusting for the year-over-year inflationary cost pass-through of approximately $25 million, EBITDA margin was 22.7%, and the flow-through of incremental revenue to EBITDA was approximately 22%, while absorbing near-term recruiting, training, and production costs. Earnings per share was $0.44, which was up 26% year-over-year. The second quarter represented the eighth consecutive quarter of growth in revenue, EBITDA, and earnings per share. Moving to the balance sheet, the ending cash balance was healthy at $536 million, after generating $188 million of free cash flow, which was our best Q2 of free cash flow generation. We continue to expect strong, positive free cash flow in the second half of 2023. $118 million of free cash flow generation was allocated to common stock repurchases and dividends. Net debt to EBITDA improved to a record low of 2.5 times. All bond debt is unsecured and at fixed rates, which will provide stability of interest rate expense into the future. Our next bond maturity is in October of 2024. Finally, we amended our $1 billion revolvers through 2028, while realizing lower fees and a more favorable financial covenant. The revolver remains undrawn. Moving to capital allocation. We continue to be balanced in our approach. In the quarter, capital expenditures were $41 million, with a focus on automation. Capital installed prior to COVID-19 puts us in a good position to support continued commercial aerospace recovery. In the second quarter, we repurchased $100 million of common stock at an average price of $44.52 per share, retiring approximately $2.2 million shares. This was the ninth consecutive quarter of common stock repurchases. Share buyback authority from the board of directors stands at approximately $822 million. Since separation in 2020, we have repurchased more than $1 billion of common stock. We continue to be confident in free cash flow. In the second quarter, the quarterly stock dividend was $0.04 per share, after it was doubled in the fourth quarter of last year. Finally, we issued a notice to redeem $200 million of our 2024 Notes with cash on hand. The redemption is expected to be complete at the end of September and will lower our annualized interest costs by approximately $10 million. As you will recall, we repurchased approximately $176 million of bonds last quarter, which will lower annualized interest costs by an additional $9 million. Therefore, year-to-date, bond repurchases are expected to decrease annualized interest costs by approximately $19 million. Now let's move to slide seven to cover the segment results for the second quarter. Engine Products continued its strong performance as the second quarter represented the eighth consecutive quarter of year-over-year growth in revenue and EBITDA. Revenue was $821 million, an increase of 26% year-over-year. Commercial aerospace was up 23%, defense aerospace was up 41%, and both markets were driven by higher build rates and spares growth. IGT was up 20%, and oil and gas was up 36%, as demand continues to be strong. EBITDA increased 25% year-over-year to a record for the segment of $223 million. EBITDA margin was 27.2%, despite the addition of approximately 350 net new employees year-to-date, and approximately 90 net additions in Q2. Across all of the aerospace segments, net headcount additions are needed for the continued revenue grant, ramp, but do carry near-term recruiting, training, and production costs. Finally, in the second quarter, the engines team finalized a new five-year collective bargaining agreement at our Whitehall, Michigan, facility. Let's move to slide eight. Fastening Systems, year-over-year revenue increased 19%. Commercial aerospace was 19% higher as the wide-body recovery starts to take effect. Defense aerospace was up 24%, commercial aerospace was up 17%, and general industrial was up 16%. Year-over-year segment EBITDA increased 14% as volume increases were partially offset by the addition of 430 net new employees year- to- date, and approximately 215 net additions in Q2. Now let's move to slide nine. Engineered Structures, year-over-year revenue was up 8%, with commercial aerospace up 31%, driven by higher build rates and approximately $35 million of Russian titanium share gain. Defense aerospace was down 33% year-over-year, driven by customer inventory corrections. Segment EBITDA decreased 23% year-over-year, while margins declined 410 basis points. The lower EBITDA was driven by higher costs associated with additional headcount, as well as operational costs for planned production rate increases, which were unrecovered due to production bottlenecks in one plant. Net headcount additions in the quarter were approximately 50 employees. Finally, in the third quarter, the structures team finalized a new four-year collective bargaining agreement at our Niles, Ohio, facility, which was ahead of schedule. Let's move to slide 10. Forged Wheels revenue year-over-year increased 7%. The $19 million increase in revenue year-over-year was driven by a 6% increase in volume. Segment EBITDA increased 8% year-over-year, despite the interruption of raw material for our wheels plant in Hungary, due to a nine-day strike at our Arconic Corporation supplier, which has now been resolved. Margin increased 30 basis points due to the impact of lower aluminum prices and inflationary cost pass-through. Finally, let's move to slide 11. We continue to be focused on improving our capital structure and liquidity. In July, we issued a notice to redeem $200 million of our 2024 debt tower with cash on hand, which is expected to be completed by the end of September. The October 2024 debt tower would be approximately $705 million after the redemption. Since the separation in 2020, including the redemption just announced in July, we will have paid down approximately $2.15 billion of debt with cash on hand and lowered our annualized interest costs by more than $120 million. Gross debt is expected to be less than $3.8 billion after the redemption in September, while long-term debt continues to be unsecured and at fixed rates. Finally, we amended our $1 billion five-year unsecured revolving credit facility through 2028. The amendment provides lower fees and more favorable covenants. Details can be found in the 10-Q, which is expected to be filed later today. The revolver remains undrawn. Lastly, before turning it back to John, let me highlight 1 item. In the appendix on slide 18, it covers our operational tax rate, which was approximately 22.6% for the quarter. The second quarter rate represents approximately a 500 basis point improvement in the operational tax rate since the separation in 2020. Now, let me turn it back to John for the outlook and summary. Thanks, Ken, let's move to slide number 12. The outlook for Howmet continues to be very strong and supported, in particular, by the extraordinary backlog of commercial aircraft orders at both Boeing and Airbus. Demand increases have moved further to the right, constrained by current aircraft production, but all go well for revenue increases to come in 2024, 2025, and beyond. This growth in absolute aircraft quantity is further enhanced by the increased sophistication of engine technology upgrades being brought to market by both GE and Pratt & Whitney to the narrow-body market. These turbine improvements address fuel efficiency and time on wing issues, which enhance the value of Howmet's differentiated products. This combines well with the upcoming improvement in wider body production, which increasingly features composite technology, which again increases the value of Howmet's differentiated products of titanium structures and fasteners. Wide-body aircraft also feature improved aerospace engine content for the company. Defense markets continue to be robust, and we envisage increased revenue growing into 2024 as the destocking for bulkheads is completed and engine spares continue to increase significantly as shop visits increase. The F-35 backlog continues to increase to approximately 420 aircraft, with recent orders of 126 aircraft for the U.S. Government's Joint Program Office, plus 25 for Israel and a further 25 aircraft for the Czech Republic. Industrial revenue continues to grow for both IGT and oil and gas in particular. The outlook for wheels is also healthy for the current quarter, and in Q3, underlying demand continues to be strong, albeit Q3 is notably the weakest quarter for revenue due to European vacations, which are also a feature of our aerospace plants in Europe, in both France, Germany, and Hungary in particular. This seasonal effect, the seasonal offset, is seen to be approximately $50 million of revenue between Q2 and Q3. My final markets comment is regarding spares, where we see spares of commercial aircraft closing in on 95% of the 2019 levels by year-end, and approximately 130% of the defense and IGT market of 2019 levels. This puts aggregate spares for this year in excess of 2019 levels, with higher rates to come as we see the rates increasing as we close out the year. A cautious stance has been taken relative to Q4 until the demand is more clear for commercial trucks in the quarter and aircraft parts for the first half of 2024. While the backlog is there, we find difficulty in planning for rate increases and the inventory impact if that's not achieved. Specifically, we are raising guidance once again for the year by another significant step. To give you an example of guidance assumptions, we have lifted our Boeing 737 MAX assumption from 30 per month and nudged it into the 30s, but not anywhere near the rate 38 for the second half. This number is intentionally loose, given all the moving parts for the business and also the lack of clarity over very soon. When we plan for the second half, we are increasing people recruitment further, but at a reduced rate than the first half as we hope to use the productivity improvements to come. Regarding Q3, revenue is expected to be $1.59 billion, ±$10 million. EBITDA, $360 million, ±$5 million. Earnings per share, $0.42, ±$0.01. Regarding the year, revenues increased from $6.25 billion - $6.44 billion, a significant increase, let's say then ±$30 million-$40 million around that range. Then EBITDA was increased to $1.445 billion, ±$10 million. Earnings per share is increased to $1.70, ±$0.01. Free cash flow is held at $635, having absorbed the settlement for the Lehman Brothers claim. In conclusion to my outlook commentary, we're pleased to demonstrate both excellent Q2 achievements, supplemented by further optimistic outlooks with very solid increases to come in the future. Let's move to the summary on slide 13. Q2 was another strong quarter for Howmet. Revenue is up 18%, EBITDA 16%, earnings per share 26%. EBITDA margin, adjusted for material pass-through, was strong at 22.7%. Everything continues to be heading in a healthy direction. Liquidity is healthy, with very positive free cash flow, with more to come in the second half. We've continued to deploy that cash, both to share repurchase in the second quarter, and as you can see, we've turned to debt repayment in the third quarter. Guidance has been increased. We expect year-over-year improvement in annual revenue, EBITDA, and earnings per share, as stated. Also, we expect very positive free cash flow generation in the third and fourth quarters. Regarding debt, I already mentioned the $200 million. As we complete that with the EBITDA improvements, we'll be improving our net debt to EBITDA leverage from the 2.5x record that we talked about in the Q2, and we'll see improvements in Q3 and Q4, heading towards 2x levered by the end of the year. Finally, we expect to increase the quarterly common dividend by 25% from $0.04 a share to $0.05 a share in the fourth quarter of 2023. Thank you all very much. Let's move across to question and answer. We will now begin the question and answer session. To ask a question, you may press star, then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw from the question queue, please press star, then two. We ask that you limit yourself to one question. The first question is from Sheila Kahyaoglu of Jefferies. Please go ahead. Good morning, guys, and thank you. John, maybe first one for you here, just on the incrementals as we go forward, obviously 22% in the quarter, given structures after 25% in Q1. You commented last quarter about how difficult it is to convert at a 30%+ rate, just given where aerospace build rates are, and you'll be climbing through at least the middle of the decade here. How do you think about when you put cost into the system, when it converts into higher profitability? Do you have to wait till build rates peak for that to convert to higher operating profit than revenue? Okay. Thank you, Sheila. first of all, we don't have to wait. The extraordinary levels of recruitment during the last couple of years have certainly weighed upon us, and probably of all the things that we've been doing, driving labor productivity has been amongst the most difficult. It's certainly been more difficult than what we believe we've overcome by way of scrap and yield, and also driving through on the volume. If you look at our midpoint of guidance, we believe we're gonna raise the incremental to about 28% in Q3, and we're hopeful at about 34% in Q4. That takes account of what we believe to be, hopefully, a slowing of recruitment and an improved retention ratios. As the denominators got bigger, the employees we've taken on. We're optimistic that the incremental drop-through begins to improve, and then, hopefully improve again in 2024, you know, with the combined volume, the pull-through from the automation programs, the, say, the bigger denominator of recently, you know, recruited employees and the mix effect of wide body. You know, it's a future statement. You know, we're hopeful, we're optimistic, we're planning for it. I would be very disappointed if we had to wait till we had stability for improvements in that drop-through. Thank you for the color. Just to follow up, you know, in terms of the structure, structures margins in the quarter, how do we think about that bumping up in the second half? How quickly does it improve? I mean, when I think about how Howmet is more like a relentless machine, I always try to bring color to my commentary. Last time I tried a wet paper tissue, and that didn't work so well, as you know. This time I think to myself, you know, Howmet, we're a fairly relentless machine, rolling forward and delivering results. We're not that flash bang and, you know, full of jumpy noises like Chinese firecrackers. Within the, within the Q2, there is one thing we overcame, which I, I'm proud in the way we overcame it, which is the consequences of the strike in one of our suppliers of aluminum billet. That nine-day stoppage cost us heavy, and yet we marched straight through and delivered really solid margins in our wheels business. I think of that as a really great performance by Howmet in that, in that regard. Conversely, when I think of structures, you know, we, we took a much bigger hit than the strike in the margin rate and the lack of achievement of the volume. I put that more in the, let's say, almost like a $10 million, complete, complete face plant for the business. I, I just think to myself, you know, if you want to use the, the, a play on the taglines for the thing, you know, Howmet face planted in our structures business. It, you know, I, I'm not proud of what we really didn't achieve there. We, we thought we'd prepped well. We thought we'd begun to put labor in place. We thought we'd got the improvements made to improve throughput in our furnaces then rolling mills, basically completely bottlenecked in one area. It didn't work well. Despite all of that, let's call it, if you want to, I never like the excuse me, the combination of a structures face planting and a supplier strike, we out delivered the guide on EBITDA. When all said and done, you know, any one of those is multiples. When we talk about margin rate of 20 basis points difference, that's worth $3 million. It's not like it's hardly worth commenting on. It's a bit like me saying, "Yeah, we did really good apart from that." I generally choose not to, I'm trying to be responsive to your question. I'll say, wheels did great, and structures was a big face plant. It's like you read my mind. I'm gonna go with the relentless march rather than face plant, though. Thank God. Thank you. The next question- Anything else? Is from Robert. Oh. Oh, I'm sorry. The next question is from Robert Stallard of Vertical Research. Please go ahead. Thanks so much. Good morning. Hey, Rob. Johnny, it sounds like I cut you off there. Was there something else you wanted to add? I was probably on a roll, and I was getting carried away, so no, I'm, I'm done. You can carry on with- I'm done. ... Chinese Chinese firecrackers if you want. I don't like asking questions you haven't asked me, so no. Please start, please start over, and do your damnedest. Okay. Thanks for the update, you noted on the 737 MAX rate assumptions. I was wondering if you made any further changes on either Boeing or Airbus build rates within your guidance? Whether this, in relation to that, whether what Airbus said about direct and indirect risk from this latest GTF issue could have any flow-through to Howmet? Thank you. Yeah. First of all, no, no rate assumption changes for elsewhere. I mean, Airbus have been, I'll say, plowing ahead, but struggling to get to their production numbers, but you know, getting close, and certainly the Q2 deliveries was, was, was much healthier. So, you know, I, I think things are getting better, generally, and I think everybody's believing that we're gonna see higher rate increases. Really, it's a question of when and trying to, you know, get ready for it. You know, we think we've prepped for it. We've built capability and capacity in labor terms. We had, I'd say, machine capacity. As you know, on 737, originally it was gonna be January 1st, then May 1st, then July 1st, and you know, we, we just wanna be cautious. That's why I said, all we've done is just nudged into the early 30s and see where it goes, and be ready, capable of supplying, but not willing to, you know, be clear, we're not gonna put rate 38 in until it's achieved. Just, to follow up, any, anything, to say on the GTF issues? Well, certainly this powder metal issue that we read about, it seems to be historical. I'm sure that Pratt & Whitney have got a good plan about taking those engines down from aircraft wing and looking at them in detail, because I think borescopes don't work for that sort of level of crack. I think the bigger impact for Howmet is, I want to say impact, I mean, positive, not, because the impact the word impact with it has negative connotation, is the time on wing issue, which is present for both current narrow bodies engines of the GTF and the LEAP-1A/1B. Where while each of them, I think, are doing better for that relative point in their life cycle compared to the predecessor engines of, I'll say V2500 and the CFM56, is that they're still well below the, the, you know, the exit point of the, of the predecessor engines. So, that in itself is leading to, what we believe will become increased demand for replacement parts. Also it's combining with, what I referred to, maybe not in sufficient detail, which was the improvements that we have worked on to help resolve the issues. So where the high pressure turbine blades have been seeing elevated temperatures from, let's say, combustors that don't have sufficient holes left after particulates have blocked them up, and then causing degradation issues. I'd say another issue, especially in, I'll say Far East and Middle East climates for, for, for LEAP, is that, you know, we are, I describe, intimate with those improvements. We have worked on them. We are prepping for their introduction and commensurate with our customers' needs. Then we are now assessing how that demand combines with the increased demand for wide bodies moving to 2024, the increased wide bodies move to 2024, and so it's all setting up well. In terms of what I think is good demand is clearly where aircraft production increases, less good demand, you know, you could call it bad if you want to, is where it's a, it's a replacement part for a period of time. Then, you know, we're rather more cautious on that, and where we need to increase capacity rapidly to achieve that in the coming months into 2024, and maybe into 2025, is that, you know, we certainly don't wanna take capacity up and then take it back down. Therefore, we're in, I'll say, deep into commercial discussions with our customers to ensure that doesn't happen. A long way of saying, GTF, powder metal, no issue for us. Nothing to do with us. Time on wing, it's, it's, it's leading to the sort of content improvement growth that we talk about as we make improvements to the, to those, turbine blades and introduce some pretty sophisticated technologies and certainly indicated GTF, looking at things we've done elsewhere on those engines and the more advanced engines, and, seeking to deploy that, which, which is great for the future robustness of the engine, its fuel efficiency, and also good for Howmet. That's great. Thanks a lot, John. Thank you. The next question is from David Strauss of Barclays. Please go ahead. Thanks. Good morning. Hey, David. Hey, John. I just wanted to clarify on the MAX. While you've upped the guidance from 30 into the 30s, are you actually at 38 a month in terms of what you're shipping to Boeing today? Depends upon the parts. We supply so many different parts that, while I recognize that we've received schedule rate, schedules for parts increasing to rate 38, is that my scenario, which I don't like, is where should they not achieve that rate, then the parts we've supplied, then because there will be bloated inventories, they will then take them out just in the same way as they would parts were taken out September, October, November, December of 2022. Is that I'm blending it all together and saying my average assumption is, you know, I'm in the 30s, but being deliberately loose about it. I'm very clear that our guidance is not based upon full rate increase of 38 from the 1st of July. That's not the case. It doesn't mean to say I don't believe that Boeing can do it. I'd love them to do it. Do it, and then, you know, I'll feel more comfortable, you know, about our guidance. I mean, our guidance, I've tried to describe in the past, tends to be something that you can rely upon, and I want to see aircraft produced, and then at that point, I'll feel confident that we're not going to be on the wrong side of inventory takeouts as in the remaining few months of the year. Okay. I, I got it. Sound, sounds like, after what you went through in Q4 of last year, it, you're just erring on the cautious side. I got it. Yeah, I mean, I mean, you know, Q4 last year was pretty good. The year was really good. You know, it's not, it's not worrying. It's just, you know, I'm not putting it all out there. Why would I? Okay. as a follow-up, can you dig in a little on what's going on at, at Fasteners? I mean, we've seen a pretty good revenue pickup here on the, you know, within the business on the aero side. I know, I know 787 rates are still low, but, you know, kind of the drop through that we've seen there or the, the lack thereof in terms of the margin drop through and Fasteners. Well, don't really like using these so-called Chinese proverbs, but I don't really know what it's Chinese about. You know, the, and then it begins with small steps, and our margin rate did increase in Q2 despite the large infestation of labor to prep for the balance of the year. It's always a bit of a hostage to fortune, but I'm feeling confident that we're gonna see both revenue and margin accretion in the second half beyond Q2. I, you know, in that sense, I'm really pleased with the rate and direction of the business, which I wouldn't have been able to say that six months ago. You know, I'm feeling increasingly confident that, I mean, there's me saying to you publicly, our margin rate is going to increase. That's pretty good. I got it. I'll take the hint. Thanks. The next question is from Peter Arment of Baird. Please go ahead. Yeah, thanks. Good morning, John, Ken, PT. Hi, John. Yeah. Just within Engineered Structures, you, the $45 million year-to-date gain on the Russian titanium share seems like it's tracking right towards your expectations. Just maybe any of your updated thoughts on that, and how should we think about that, you know, as we go into next year? Thanks. In terms of demand, the previous metric I'd given was $20 million for Q4 last year, multiply it by four for 2023, then add on, I think 25%. That took you to around about the $100 million mark, and therefore implicit, if you did $45 million in H1, it's $55 million in H2. Right now, I'm actually feeling a little bit more confident than that. Instead of about a 25% lift, I can see us potentially getting to a 40% lift. Certainly, I think the demand is there, it's gonna be above $100 million, well above $100 million. The thing that I've got to see is Structures standing up and making the stuff. Then I think we're gonna realize the market share we've and the business we've obtained and won commercially. At the moment, demand and I'll say our commercial win position is, is healthy. Without trying to repeat myself, you know, we, we had a, I'll say, a hiccup in Q2, of which neither the structures team nor myself are proud of, of what we did, or rather didn't do. Appreciate the call. Thank you. Thank you. The next question is from Robert Spingarn of Melius Research. Please go ahead. Hey, good morning. Good morning. Two follow-up things on, on what you just discussed. First, on the question of the improvements to GTF and LEAP, how are these affecting or impacting your ship set content? How do those changes factor into your LTAs? That's, that's the first question. Then just on the titanium, as we move further ahead, you talked about 40% uplift, but as the wide body rates rise, let's talk about maybe 2025, when Boeing and Airbus are targeting these higher rates, I would imagine even greater uplift. Can you talk about that? Yeah, I'll do it in reverse order. You're absolutely correct. As wide body moves up, then that is highly beneficial for us, both for our structures business and for our fastener business, both in terms of the value delivered. I'm going to say in the case of fasteners, the value proposition of what's delivered, where the, I'll say the value set is, is substantially higher just from the additional sophistication of the fastener sets that go with, you know, combining composites, composite skins and titanium structures. Assuming that Boeing at a, from rate three to four, to four to five, and then, you know, I think higher than that in 2024, and assuming they get close to the 10, or maybe by then we'll be feeling a lot more optimistic, you know, because I think fundamental demand is above rate 10. Similarly, for the A350, that's got to go up to at least, at least a nine a month, I think, to meet the market demand. All that is really healthy for our titanium business. And I'm expecting not just the more, I'll say, straightforward sheet and plate, but also some of the forgings, which we are able to bring to bear for that. You know, there's, there's a optimism for that. Again, if, if everything that we see as potentially could happen by way of volume, wide body mix, then, you know, our structures, margins, and you know, I have commented that I do see them moving towards the high teens, as we move to the middle or second part of the decade. You know, everything is there for us to do. Now, you just gotta make it. So demand is not the issue, neither for what we've won from the titanium opportunity because of the VSMPO and tariff and restriction issues, but also the increasing demand from wide body. In terms of the increased, I'll say, sophistication that I refer to, yeah, that goes to shipset value. As we move forward, the engine value for Howmet will increase as we move to supply the products for the changes required for the, I'll say, the solution for the GTF issues, for which we've the part we're playing in it, which is on the Advantage engine, and we'll see shipset value increase there, and similarly for the improvements we're making on the LEAP blades. As you know, normally in engines, while very long run items, we normally do upgrade about every five to six years. We had an upgrade planned with our customer, but the upgrades are, I'll say, a little bit more, given the issues in terms of durability that have been found on, let's call it, the generation one part of the turbine. Not necessarily issues with our part per se, but because of basically as you drive the, the temperatures up, because of, and then shop blast them with particulates that have got through. That, those are problems which require even enhanced solutions to be able to improve time on wing. Thanks, John. Thank you. The next question is from Myles Walton of Wolfe Research. Please go ahead. Thanks. Good morning. Hey, John, I know- Miles. The guidance raise on sales, you gave some color, but I was hoping you'd put a finer point on it. The $190 million, did you, did you imply it was maybe $40 million or $50 million add back on wheels, a little bit on industrial and the bulk, from Aero? Is that the way to think about the $190 million? I, I didn't really break it down. You know, I, I think my aggregate feeling is we see commercial and the, there's the, let's say, move the, the 737 rates, that's a, a positive assumption. Defense is proving quite robust and strong. I mean, that something percent on top of what we printed in Q1 is really strong. You know, we are beginning to see the early stages of the defense spares increases, in particular, you know, I think as we go into, through into 2024 and 2025, we'll begin to see spares increases for F-35 as an example. So, so defense has been really good for us, and I think we continue to see that. Wheels, we think, again, stronger than private assumptions in Q3. So, you know, we're getting a much clearer picture for the final outcomes for the 2023 order book closeout. The truck manufacturers have not even opened the order books yet for 2024. You know, we haven't got a read on that. You know, we're hoping that they're robust, you know, my guesstimated picture is there'll be, in the coming, let's say, 12 months, there'll be some weakness in the trailer market, some distribution, and relative strength in the European truck market, and possibly some weakness in the North American truck market. In aggregate, slightly better than I'd previously anticipated. Just a quick one on the structures bottleneck. You know, it's good to have the assumptions that are conservative and not counting on the OEMs coming through the purchase orders, but was the bottleneck in any way a result of some hesitation to go up in rate, and having to- No. run more quickly than, Okay. No, we. To drive the bottleneck? We added people. We're adding more people. We're optimistic that the, that the, everything we could have wished for by way of, I'll say, volume requirements for our customer, are there. We added the people. We'd spent money to increase furnace capacity. As an example, moving to triple sticks and double stick furnaces. We added some additional automation in. We, in, in what we thought we were improving our, I'll say, roller mill, capacity and throughput. As I said, it didn't work out. You know, I just accept that sometimes in life, things don't go exactly as planned. You know, I said, "Yeah, we face planted," but at least we know it and don't pretend we didn't do it, and now it's for us to stand up and do it. it's not a volume issue, it's not a demand issue, it's just, we've got to make the stuff. We're expecting to do so in Q3. I guess every management says that, you know, we think we're gonna do better. I mean, it's always better in the future than the past. Q2, for that business, we cannot be proud, that's for sure. Thanks for the call. Thank you. The next question is from Kristine Liwag of Morgan Stanley. Please go ahead. Hey, good morning, guys. Hey, Kristine. You know, John, on the, the issue that you called out, on Engineered Structures, can you just provide more specific details on what caused a plant bottleneck? Then how do we think about recovery? The other part to that would be, depending on what the problem actually is, is there a risk that we could see this spread to the other segments? Like, how do we think about all that? Well, first of all, absolutely no risk, it spreading to other segments. It was, totally inside one segment, inside one plant. It's not like a disease. It's not contagious. It just, you know, it just is for that singular plant. I've, I sort of done my best to dance around every question on this topic, and because I think it's probably getting, I guess, excessive airtime for what is like, irrelevant in the total results of Howmet and, you know, what we achieved, which we already exceeded everything that we said we're going to achieve. You know, it, it does come down to, you know, there's a huge sequencing process within to make titanium. In one of the early stages of that process, our work in progress buffers broke down, and we ended up with the labor we recruited, I'll say, standing idle. The equipment wasn't working, subsequently, we starved every subsequent process during the course of the three months. You know, we believe we've got things back on track. You know, there's details, there's like an analysis going into. As recently again, was re-reviewing it once again last week, which is, you know, my scrutiny of every work in progress buffer of every important production stage for that particular product. In terms of daylight being the best disinfectant and a high degree of engagement, you know, by the plant management, the head of operations, the business unit leadership, and then for me to be scrutinizing, I'll say, work in progress buffers for each of the production stages, that's a pretty high level of scrutiny for something which, you know, again, while it's worthy of comment, it's not worth getting too carried away about. I'm hopeful it's gonna respond. If it's brute force alone, it'll respond, and hopefully with a bit of sophistication as well, we might make some improvements this quarter. Thanks, John. That's really helpful color. I mean, it sounds like a very isolated issue for that specific segment. In terms of the recovery pace, like, how long does this issue like this usually get resolved? Like, by 4Q, is this largely resolved, and you're back to where you were for margins, like last quarter, about 400-500 basis points higher? How should we think about that pace of recovery? Yeah, I, I don't normally give segment commentary, but, you know, I'd be upset if we're not doing at least 10%-15% improved volume in Q3, in, in that, in, in that business. As soon we do that, then we'll see a large restoration of margin, because we'd worked long and hard to establish that 14% as the, let's call it the line, for that business and held it no matter what was thrown at us by way of F-35 bulkheads, you know, 787, dropping to nothing. You know, through thick and thin, we've done it. Then as soon as we got the volume to do what we did, it was, it was not good. You know, at least I just think it's, it's best to be straightforward about it and say, "You know, we didn't do good. We know what we've got to do. Everybody knows what they've got to do." We've prepped long and hard to make sure that we, we succeed and make substantial improvement in Q3, and, and then, you know, to be played again and more in Q4. I really appreciate the detail you provided, John. Thanks. Thank you. The next question is from Gautam Khanna of Cowen. Please go ahead. Hey, good morning. Thanks, guys. Hey, Gautam. I wanted to follow up, I think it was Sheila's question, just directionally looking at next year. In the past, you've opined on incremental margin potential, given you've already done a lot of hiring and incrementally, that's not as big of a headwind as those people get more productive and the like, and then the crosscurrents of Forged Wheels and what have you. Do you have the same confidence in the 30%-40% incrementals next year that you did kind of heading into this year? What do you opine on that? It's pretty, it's pretty, I'll say soon to be imagining 2024s, and so we don't normally comment much on 2024. I suspect that I'll give you some sort of demand outlook when we get to November, you know, time and give Q3 results. We've done that the last couple of years. I think, I think the most interesting question for, I'll say, for when we deliver our Q3 results and decide about giving some color for 2024, is, is, is like, do we achieve 2019 levels of revenue? That's the most interesting question. Mm-hmm. Bear in mind, as we all know, is that there's a significant mix drag, you know, because it's not all things being equal. It's gonna be all things being unequal, where, you know, wide body will be, let's say, I don't know, a couple of 100 planes down, and narrow body might be a couple of 100 planes up, and that's probably getting towards a $500 million revenue drag. Can we overcome all of that with all the stuff we've been talking about in terms of, I'll say, content, price, you know, just driving through and improving our shares and all the rest of it? So that, for me, is the most interesting question about 2024, is that do we get there? Therefore, it'll be like a whole year early. So fascinating. Of course, I'm asking the question, I'm not giving you the answer because it's too early. In terms of margins, you know, 35% ±5 was appropriate for when we were talking that clearly in, I think it was in 2021-2022. You know, I'll say heading that way, maybe it's more like a 30 ± for, for 2023. I, I, you know, again, too early to say, and it's gonna depend upon, hopefully seeing positive volume, combine that with productivity coming through from a more stable workforce and, you know, having really, I'll say, bore down on that problem, which for me, it's only like 25% of the problem belongs in the whole recruitment, retention, and the rest is just in fundamental productivity of the, of the workforce, as some of our parts are so sophisticated that the training times are elevated, and therefore we should start to see some of the benefits, you know, come through on that, add together with the wide-body demand. A lot of moving parts, Gautam, but so at the moment, you know, I, I think it's more like a 30 ± range around it. Okay. I, I, I don't know that yet. I mean, that's no more than me thinking directionally, where, where are we, without any benefit of any detailed financial analysis, and therefore, it's just, it's just talking with you. I appreciate that. Just as part of that, how do you think pricing changes year- to- year? Year- to- year? Correct. Well, we haven't told, we haven't told you Q2 yet. Nobody's asked a question, but so Q2, yeah, everything was, everything was in line with what we'd said before, and the year is in line with what we said before, and our Q will be published this afternoon, and you'll be able to see it. Everything's in order on that front. 2023 now is essentially completed for negotiations. Again, all in order, and 2024 coming rapidly into focus. Commensurate with what I said on the last call is that 2024 gonna be similar and good. It's similar and good. Thank you, John. Appreciate it. Thank you. The next question is from Ronald Epstein of Bank of America. Please go ahead. Hey, good morning, guys. Well. I, I think pretty much everything's been asked, maybe just a quick follow-on here. When rates actually get to 38, or maybe way down the road, they get to 50 or higher on 737s, how should we think about the evolution of incrementals then? I think, you know, that's, that's at, on the top of a lot of investors' minds, because it can help draw out the trajectory of where, where earnings and cash flow for the company could ultimately go as the ramp goes. Yeah. I, I think the most difficult thing that we've ultimately, is, is look through all the issues we faced of stop, start, stop, start, supply chain, labor, COVID-19, all, all post-COVID-19, and all those things that have, let's say, tested us over the last, let's say two or three years. Then I, I think when I bring it right down to how do we now see it as we've grappled with each one of them, that fundamental labor productivity has probably been the most difficult for us in what's, you know, parts of our business have extremely high learning curves. And, and to stabilize that, deliver good quality to our customers, which is paramount, you know, we're trying very hard on that front and to meet schedule. You know, I, I think that we've heard very little from the industry about any inability for Howmet not to meet customers' needs. Putting that labor productivity into place and seeing everything smooth out, and I'm hopeful that as Boeing moves towards achieving the 737 at rate 50, as Airbus move from the, let's call it early 50s through to something towards rate 75, is that, that's gonna help smooth out things and we'll be in a much improved condition to deliver at a higher productive level. Similarly with the, the wide body increases. You know, I've used this, a phrase which I'm not sure how apt it really is, but called state of grace. I do see that maybe as we move into the second half of 2024, we get close to that state of grace where productivity is, you know, smoothed out, you know, production volume is increasing, content increasing, price is in the right shape, and so then we begin to print optimal margins and, and cash flow, and, and hopefully just continue to, you know, then improve as the, as the further rate increase in 2025 and 2026. Yeah, everything tells me we should be, you know, fundamentally optimistic. At the same time, you know, we've currently got issues to overcome, of which I think that labor issue is the, is the most, been the most protracted. Got it. Thank you. Thank you. This concludes our question and answer session and today's conference. Thank you for attending today's presentation. You may now disconnect.