Alcoa Corporation

Good afternoon and welcome to the Alcoa Corporation second quarter 2026 earnings presentation and conference call. All participants will be in a 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 phone. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Louis Langlois, Senior Vice President of Treasury and Capital Markets. Please go ahead.

Thank you and good day, everyone. I'm joined today by William Oplinger, Alcoa Corporation President and Chief Executive Officer, and Molly Beerman, Executive Vice President and Chief Financial Officer. We will take your questions after comments by Bill and Molly. As a reminder, today's discussion will contain forward-looking statements relating to future events and expectations that are subject to various assumptions and caveats. Factors that may cause a company's actual results to differ materially from these statements are included in today's presentation and our SEC filings. In addition, we have included some non-GAAP financial measures in this presentation. For historical non-GAAP financial measures, reconciliations to the most directly comparable GAAP financial measures can be found in the appendix to today's presentation. We have not presented quantitative reconciliations of certain forward-looking non-GAAP financial measures for reasons noted on this slide. Any reference in our discussion today to EBITDA means adjusted EBITDA. Finally, as previously announced, the earnings press release and slide presentation are available on our website. Now I'd like to turn over the call to Bill.

Thank you, Louis, and welcome to our second quarter 2026 earnings conference call. Today we'll review our second quarter performance, discuss our markets, and provide an update on strategic initiatives, including the previously announced acquisition of South32's upstream aluminum value chain assets. Starting with safety, our top priority. Our performance remains stable and we continue to see improving trends with key injury metrics declining on a 12-month rolling basis. We are maintaining a strong focus on operational discipline, leadership presence in the field, and fatality risk management to sustain our progress. We have initiated an effort to eliminate fatality risks associated with live work from our operations and expanded our global fatality prevention team to further strengthen our safety culture and risk management capabilities. Operationally, we delivered another quarter of stable and reliable performance across most of our system. Our focus on operational excellence resulted in year-to-date production records at four smelters and one refinery. Sequentially, we increased primary aluminum production by 30,000 metric tons, including the completion of several restarts, and achieved the highest year-to-date shipment volume at the Alumar smelter since its 2022 restart. This allowed us to fully benefit from higher metal prices during the quarter. We also achieved significant labor relations milestones in the quarter, securing multi-year collective agreements through 2030 with the AWU in Western Australia and with the United Steelworkers for our two U.S. smelters and the ABI smelter in Quebec. We also successfully concluded negotiations in Norway and at Alumar in Brazil. These agreements provide important workforce stability and support our long-term operating plans. Strategically, we continue to advance initiatives that strengthen and grow our business. In May, we announced a $65 million investment to expand the Mosjen Cast House in Norway. The project will increase annual production capacity by up to 75,000 metric tons, while adding the capability to incorporate post-consumer recycled aluminum into the casting process, further enhancing our value-added product portfolio. Just a few days ago, we announced the final investment decision to construct a gallium production facility to be co-located at our WagerUp alumina refinery in Western Australia. Largely funded by the governments of Australia, Japan, and the United States, this facility will create a new Western-aligned source of a critical mineral which supports semiconductor, advanced manufacturing, and defense supply chains. It also reinforces the strategic importance of Alcoa's Australian refining assets beyond aluminum production alone. Last and most importantly, we announced the largest transaction for Alcoa Corporation. The strategic acquisition of SAL32's interest in bauxite, alumina, and aluminum assets, which we will refer to as Alley Group. This acquisition is about creating long-term shareholder value. First, the strategic fit is compelling. We're bringing together highly complementary assets that are mostly in close geographic proximity to our existing portfolio. This creates opportunities to improve performance by leveraging our combined expertise and scale. Second, the acquisition unlocks significant value through synergies. We have identified approximately $900 million of net present value synergies, including roughly $50 million of run rate cost savings starting in the first year following closing. These synergies are backed by numerous initiatives identified during due diligence by our subject matter experts. The estimates are not high-level consultant projections. They are each highly actionable and based on areas where Alcoa has a demonstrated track record of execution. Third, the acquisition delivers compelling financial results. These assets enhance our ability to generate stronger cash flow through the cycle and improve our position on the global alumina and aluminum cost curves. We expect the acquisition to be accretive to our earnings per share and cash flow metrics immediately after close, with additional upside as synergies are captured over time. Let me provide some additional context on the transaction based on questions we've received from investors. About our rationale for the mix of cash and equity considerations, $3.1 billion and $1 billion, respectively. In our view, the stock consideration, as well as the contingent value right, provides for risk sharing between the buyer and seller. Commodity prices can and will change, and we believe this structure adapts to that dynamic, mitigating Alcoa's exposure to those market-driven value changes. This results in a fair transaction, one that is appreciated by both sets of shareholders. In addition, Alcoa shares not distributed to SAL32 shareholders must be liquidated in an orderly manner to mitigate volatility from SAL32's liquidation. The agreement prevents SAL32 from selling shares in excess of 20% of our average daily trading volume on any one trading day for three months following completion. Considering our leverage post-close, we set the cash consideration to a level that allows us to limit debt and not exceed a leverage ratio of 2.0 times based on recent pricing. Both Moody's and S&P recently affirmed Alcoa's current credit ratings and outlook based on the pro forma transaction. Additionally, we want to clarify certain elements of the transaction structure, which includes three important components. The locked box, the ticking fee, and the contingent value right, or CVR. Starting with the locked box, this structure allows Alcoa to benefit from the cash flow generated by the acquired assets going back to April 1, 2026. As the assets generate cash, those amounts accrue to Alcoa and offset the cash consideration to be paid at closing. Based on publicly available information, we estimate the locked box to hold more than $200 million as of June 30th, 2026. This value will fluctuate until closing, but it gives a sense of the magnitude this mechanism could generate for Alcoa. Second, there is a ticking fee. Beginning after SAL32 shareholder approval in October or November, we will pay a negotiated 5% annualized fee on the $3.1 billion cash consideration to compensate SAL32 for its cost of capital. We estimate approximately $80 to $100 million in ticking fees to be paid at closing. Third, there is a CVR that aligns revenue sharing with market performance. If alumina or aluminum prices exceed agreed thresholds, SAL32 can participate in a portion of that upside, up to a maximum of $750 million over four years. Between July 1st and closing of the transaction, market prices will impact the calculation of both the locked box and the CVR. If markets remain strong, Alcoa benefits through higher earnings and cash flow from these assets in the locked box. and if markets are exceptionally strong, we will retain most of the value for our shareholders while a portion of that value will be shared with SAL32 through the CVR that is capped at $750 million. The acquisition strengthens our leadership position in the upstream value chain. We expect to increase our annual production capacity by approximately 5.2 million metric tons of alumina, a pro forma 53% increase. and approximately 900,000 metric tons of primary aluminum, a pro forma 37% increase. The transaction represents a meaningful expansion of our portfolio in markets where we continue to see attractive long-term fundamentals. At our investor day last year, we outlined our long-term view that the world will need more alumina and more aluminum Thank you for joining us today. These are significant growth opportunities, particularly in regions where customers increasingly value secure, reliable and sustainable supply. The challenge is that new supply will be difficult and expensive to bring online. While we expect additional capacity to be built through restarts and expansions, the capital required to develop new refining and smelting capacity today is substantially higher than historical costs, especially when you compare with past expansions in China. That's where the acquisition of the Ali Group assets is particularly attractive. Rather than spending years developing new assets, we are acquiring high quality, large scale operations that are already producing and integrated into the value chain. Importantly, we are acquiring that capacity to evaluation that is well below replacement cost. Simply put, the acquisition allows Alcoa to participate more fully in the long term growth of the aluminum industry through acquiring assets that would be difficult, time consuming, and more costly to replicate today. Now I'll turn it over to Molly to take us through the financial results.