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Good afternoon and welcome to the Alcoa Corporation First Quarter 2026 Earnings Presentation and Conference Call. All participants will be in a listen-only mode. 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 am joined today by William F. Oplinger, our Alcoa Corporation President and Chief Executive Officer, and Molly S. 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 the company's actual results to differ materially from these statements are included in today's presentation and in 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 to EBITDA means adjusted EBITDA. Finally, as previously announced, the earnings press release and slide presentation are available on our website. Now I would like to turn over the call to Bill.

Thank you, Louis, and welcome to our first quarter 2026 earnings conference call. Today, we will review our strong first quarter performance, discuss our markets, and highlight the progress we are making on our strategic priorities. Let me start with the headline. We had a strong start to 2026 driven by execution. We are well positioned to deliver a strong second quarter and full-year 2026 performance. Starting with safety, we continued making progress with improved total injury rates in the first quarter. While we are never satisfied, both our leading and lagging indicators are moving in the right direction. Our focus remains clear: fatality and critical risk management combined with leader time in the field. Our leaders are expected to be on the production floor or mine site, interacting, coaching, and reinforcing standards. Safety is not an initiative. It is the foundation of everything we do. Operationally, we delivered. We maintained stable performance across the system and captured higher metal prices. Despite significant disruption in the Middle East, our teams ensured continuity of supply for our operations. Our flexible cast house network continues to unlock value-add opportunities, and the depth of our commercial, procurement, and logistics capabilities was evident this quarter. Strategically, we kept moving forward. In Western Australia, we advanced our mine approvals, completing responses from the public comment period and continuing to work collaboratively with stakeholders. We continue to anticipate ministerial approvals by year-end 2026, consistent with the timeline we have previously shared. We are in advanced discussions on the monetization of our former Massena East smelter site for a data center project. The potential developer has applied for public review. We are still finalizing terms and will not comment on value today, but we will provide additional details later in the process. Additionally, we are making progress on two other sites in parallel. Our momentum continues into the second quarter. On April 7, we successfully and safely completed the restart of the San Ciprián smelter. And on April 14, we issued notice to redeem the remaining $219 million outstanding of our 2028 notes—another clear example of disciplined capital allocation supported by our strong cash balance of $1.4 billion at the end of the first quarter. Looking ahead, we are focused on increasing profitability through higher shipments, continued operational performance, and realizing the benefit of strong market conditions in the Aluminum segment. At the same time, we will maintain momentum on the company's strategic initiatives aimed at creating value. Now I will turn it over to Molly to take us through the financial results.

Thank you, Bill. Revenue decreased 7% sequentially to $3.2 billion. In the Alumina segment, third-party revenue decreased 33% due to typically lower first-quarter shipments, lower purchased and resold alumina to satisfy third-party commitments, as well as vessel constraints related to the Middle East conflict and vessel loading issues caused by Cyclone Narelle in Western Australia. Realized prices were also lower for both alumina and bauxite. In the Aluminum segment, third-party revenue increased 3% primarily due to an increase in average realized third-party price and increased shipments from the San Ciprián smelter. These impacts were partially offset by seasonally lower shipping volumes from other sites as well as timing impacts from proactively repositioning inventory within North America. The repositioning creates a timing difference deferring revenue recognition until the second quarter, while providing cast house flexibility for additional value-add product production and shipments which yield higher margins. Related to my comments on typically or seasonally lower first-quarter shipments in both segments, it is important to note that our first-quarter shipments are historically only 23% to 24% of the annual outlook and our fourth-quarter shipments are typically 26% to 27%, depending on portfolio changes. Coming off the strong fourth-quarter 2025 shipment levels, the first quarter of 2026 was mostly in line with our expectations even if consensus analysts projected higher. First-quarter net income attributable to Alcoa Corporation was $425 million versus the prior quarter of $213 million, with earnings per common share increasing to $1.60 per share. The sequential improvement reflects realized aluminum prices and a favorable mark-to-market change on the Ma’aden shares. These impacts are partially offset by the net unfavorable sequential impact from non-recurring items in 2025 including CO2 compensation recognition in Spain and Norway, the reversal of a valuation allowance on deferred tax assets in Brazil, and a goodwill impairment charge. On an adjusted basis, net income attributable to Alcoa Corporation was $373 million, or $1.40 per share, excluding net special items of $52 million. Notable special items include a mark-to-market gain of $88 million on the Ma’aden shares due to an increase in price during the period. Adjusted EBITDA was $595 million. Let us look at the key drivers of EBITDA. The sequential increase in adjusted EBITDA of $68 million is primarily due to higher metal prices, mainly driven by increases in LME and the Midwest premium, partially offset by lower sequential shipping volumes in both segments. The Alumina segment adjusted EBITDA decreased $52 million primarily due to lower alumina prices and lower bauxite offtake margins, partially offset by the non-recurrence of a fourth-quarter charge related to the announced agreements with the Australian federal government to further modernize the mining approval framework. The Aluminum segment adjusted EBITDA increased $174 million primarily due to higher metal prices and lower alumina costs. These impacts were partially offset by the non-recurrence of CO2 compensation in Spain and Norway recognized in the fourth quarter, lower shipping volumes including the impact of inventory repositioning which deferred EBITDA recognition on 30 thousand metric tons to the second quarter, and higher costs associated with the San Ciprián restart. Other costs outside the segment were unfavorable $54 million sequentially, primarily due to unfavorable intersegment eliminations. Moving on to cash flow activities for 2026. We ended March with a strong cash balance of $1.4 billion despite consuming cash as we typically do in the first quarter. The $595 million of adjusted EBITDA generated in the first quarter was mostly offset by an increase in working capital. The seasonal working capital build resulted from lower accounts payable, inventory replenishment, and higher alumina inventory due to shipping delays at the end of the quarter and an increase in accounts receivable primarily on higher metal prices. On a days basis, the working capital increase is consistent with prior years and is likewise expected to decrease as we move through the year. Capital expenditures were $119 million which reflect our typical trend of lower spending in the first quarter. We maintain our 2026 outlook for capital expenditures. Environmental and ARO payments were $85 million, which include progress on the Kwinana site remediation. Net additions to debt reflect short-term borrowings related to inventory repositioning, which will be repaid when the sale of the inventory is recognized in the second quarter. Now let us take a look at the key financial metrics for the first quarter. Return on equity through the first quarter was 21.9% reflecting a strong start to the year. During the quarter, we returned $27 million in cash to stockholders through our regular quarterly dividend. Free cash flow was negative $298 million for the quarter, primarily reflecting seasonal working capital build, capital expenditures, and environmental and ARO payments, offsetting the quarter's strong EBITDA. We finished the quarter with a cash balance of $1.4 billion and adjusted net debt of $1.8 billion. As announced on April 14, the company issued notice to redeem in May the remaining $219 million outstanding on our 2028 notes. The notes will be redeemed at par value. This announcement is aligned with our goal to delever and further strengthen our balance sheet. We will continue with disciplined execution of our capital allocation framework where excess cash will be evaluated in competition between value-creating growth opportunities and additional returns to stockholders. Now let us turn to the outlook. We have two updates to our 2026 full-year outlook. Interest expense will decrease slightly to $135 million with the redemption of our 2028 notes in May. Additionally, our estimate for environmental and ARO payments has increased to approximately $360 million, up from $325 million, to reflect the cash requirements from the announced agreements to modernize the mining approvals framework in Australia. For 2026 at the segment level, Alumina segment performance is expected to be unfavorable by approximately $15 million due to lower price and volumes from bauxite offtake agreements, and higher energy prices, primarily diesel, associated with the Middle East conflict. Aluminum segment performance is expected to be favorable by $55 million due to inventory repositioning actions taken in the first quarter, higher shipments and product premiums, and lower production costs due to the completion of the San Ciprián smelter restart, partially offset by seasonally lower third-party energy sales. Based on recent pricing, we expect second-quarter benefits from higher LME and Midwest premium pricing as well as higher shipments, but this results in higher Section 232 tariff cost on our Canadian metal imported to the U.S. We expect tariff costs to increase by approximately $35 million. Alumina costs in the Aluminum segment are expected to be favorable by $20 million. Regarding intersegment profit elimination, any further decrease in API prices is estimated to result in no intersegment profit elimination. If API increases, our prior guidance applies. Below EBITDA within other expenses, 2026 included favorable currency impacts of approximately $30 million, which may not recur. Based on last week's pricing, we expect the 2026 operational tax expense to approximate $110 million to $120 million. Now I will turn it back to Bill.

Thanks, Molly. Let us begin with the Alumina segment dynamics. The current environment remains challenging with the Middle East conflict exacerbating margin pressure across global refineries. FOB Western Australia alumina prices stayed relatively weak through the quarter. At the same time, disruptions tied to the Middle East conflict, including the closure of the Strait of Hormuz, have pushed energy and freight costs higher, while related demand losses are weighing on refinery margins outside of China. Our alumina cost position provides resilience in a low-price environment, and we have insulated ourselves from spot energy volatility through long-term contracts and financial hedges. In China, pressure on margins has been more muted. Higher domestic alumina prices, lower bauxite costs, and stable coal pricing, largely unaffected by the conflict, have supported refinery margins. That said, we do expect costs to rise as the caustic market tightens and higher freight costs begin to flow through seaborne bauxite supply. To date, in 2026 roughly 4 million metric tons of annual refining capacity has been curtailed in China. With cargoes originally intended for Middle East smelters rerouting into China, we expect pressure on China prices in the near term. Forthcoming supply from new refinery projects in coastal China and Indonesia, along with the weaker demand from Middle East smelters, will continue to weigh on the global alumina market through the first half of the year. Finally, on bauxite, prices remained weak through the first quarter on ample Guinea supply. Elevated freight rates related to the Middle East conflict have lent some support to CIF China pricing, despite soft FOB levels. And the market is now closely watching Guinea's export policy for the next directional signal. Now let us look at the conflict in the Middle East and why it matters to the Alumina segment. The Middle East is the largest alumina importing region in the world, with supply routes for raw materials heavily dependent on the Strait of Hormuz. Each year, roughly 8.8 million tons of alumina and 6 million tons of bauxite transit through the Strait. That changed on February 27. As a result of the conflict, more than 2.5 million tons of annual smelting capacity and nearly 2 million tons of refining capacity are offline year to date. That is a meaningful disruption to the global system. Alumina refineries in the region are integrated with aluminum smelters. However, approximately half the region's bauxite requirements are imported from outside the Middle East. This structure leaves the regional aluminum system particularly exposed to shipping disruptions and logistical constraints. And it does not stop at bauxite and alumina. Several smelters in the region also rely on imported anodes, calcined coke, and coal tar pitch. With transit through the Strait restricted, those materials are harder to move, raising costs and increasing uncertainty. Given the Middle East's important role in global green petroleum coke exports, these disruptions are already rippling through the global calcined coke market. The takeaway is clear: structural dependencies in the Middle East mean that disruption there does not stay local. It moves quickly through the aluminum value chain, tightening supply, increasing cost volatility, and elevating risk well beyond the region itself. Let us now move on to aluminum. LME prices rose approximately 10% sequentially and have continued to increase, recently exceeding $3,600 per metric ton, driven by tight inventories and supply disruptions. Announced curtailments have already tightened the 2026 balance; any further disruption in the Middle East has the potential to constrain supply even more. And that matters because the Middle East is the largest primary aluminum exporting region in the world. Disruptions to metal flows from the region are not only lifting LME prices, they are also driving higher regional premiums across Europe, North America, and Asia. Higher oil prices and the resulting impact on raw materials are increasing production costs globally. But importantly, these cost pressures have been more than offset by higher aluminum prices. For Alcoa Corporation, our exposure to spot electricity prices is less than 1% of our electricity consumption, thanks to our long-term power contracts and financial hedges. That gives us real margin advantage in this environment. These disruptions are occurring when the market was already tight following the announced smelter curtailment in Mozambique and disruptions in Iceland. Aluminum inventories were already at historically low levels, and have been further exacerbated by the disruptions in the Middle East. We expect global demand to grow sequentially this year driven by ex-China markets, albeit at a slower pace than previously anticipated as the conflict poses downside risks. However, given the scale of supply disruptions, softer demand will be outweighed by supply impacts in the market. Underlying market conditions remain largely consistent, with packaging and electrical markets leading demand growth while automotive and construction remain soft. Most importantly, our core regions, North America and Europe, remain in substantial deficit and are particularly exposed to potential supply disruptions due to their strong reliance on imports from the Middle East. Turning to our quarterly highlights, value-add product volumes increased sequentially alongside a rise in customers reaching out to us across both North America and Europe as they look to domestic supply in the face of ongoing disruptions and heightened supply uncertainty. North America and Europe are meaningfully exposed to Middle East supply, particularly for billet, slab, and foundry products. In North America, roughly half of imports come from the Middle East. In Europe, reliance is even more pronounced in certain value-add products. Since the escalation of the conflict, regional premiums have moved materially higher. In North America, foundry and billet markets are experiencing an uptick in spot demand as customers look to backfill Middle East supply. Similarly, in Europe, demand for billet, slab, and foundry is increasing, supported by the same driver. The full impact of the supply reduction has not yet been felt by North America customers since most of the aluminum manufactured before the Middle East conflict is just reaching North America now. Overall, the current environment reinforces the value of secure, diversified supply and highlights the strategic advantage of Alcoa Corporation’s regional footprint and ability to serve customers in our key regions with both primary metal and value-add products. Let me step back and connect the dots. In volatile markets, it is easy to focus on the headlines. At Alcoa Corporation, value creation starts with disciplined execution anchored in safety and operational strength. And that discipline is paying off. First, safety. We are driving a step change in our safety culture across the company. By reinforcing critical risk management and increasing leaders’ presence in the field, we are focusing on learnings and ultimately getting ahead of incidents. This is more than doing the right thing; it is also about operational excellence and reliability, resulting in long-term value. Second, license to operate. In Australia, we have advanced our mine approvals with confidence. We have completed responses from the public comment period, and we are working constructively with the WA EPA and the timeline remains unchanged. Longer term, the strategic assessment will provide a clear pathway for operations through 2045. And in Brazil, our partnership with government continues to support communities through social services and health care programs. This is how we build trust, and keep it. And finally, execution. ABS is delivering value every day. Disciplined execution, clear leadership, and accountability are embedded in how we operate. That integrated performance framework is driving productivity, supporting full-year financial targets, and helping us adapt quickly even in times of disruption. Here is the bottom line. A safer workplace, a stronger license to operate, and disciplined execution—that is how we create long-term value. Let me close with a simple summary. Execution matters, and we are delivering. In the first quarter, we got important things done. We strengthened safety, delivered strong operational performance, and stayed agile in the face of disruption in the Middle East, all while continuing to support our customers. We safely completed the San Ciprián smelter restart, and we proactively managed the balance sheet by issuing notice to redeem our 2028 notes. This is disciplined execution in action. As we look ahead, our direction is clear. We remain relentlessly focused on safety, stability, and operational excellence. We will continue to be a trusted supplier of choice, supporting our customers even in times of disruption. The message is straightforward: consistent execution and steady progress on our strategic priorities. This is how we create long-term value at Alcoa Corporation. We will now open the call for questions. Operator, please begin the Q&A session.

Thank you. We will now begin the question and answer session. If you are using a speakerphone, please pick up your handset before pressing the keys. When called upon, please limit yourself to two questions. Our first question will come from Carlos De Alba with Morgan Stanley. Please go ahead.

Yes, hello, Molly and Bill. Thanks for taking the question. The first one is maybe can you comment on what is the impact of the Middle East smelters reducing operating rate for your cost alumina shipments. I think around 30% of your annual shipments go to that region. So it would be great to get color on how you are handling that. You kept your volumes unchanged for the year, but presumably you are redirecting shipments to Asia or other regions. Any impact on profitability or margins as you do that? And just to confirm, as you redirect these shipments to China, does the API pricing remain, or would you be changing to a different pricing mechanism? And any progress on the gallium project in Western Australia?

Carlos, thanks for the question. We are working with our customers to redirect those shipments. As you said, we held our full-year guidance consistent with where we were in January, and we are working with those Middle East customers who continue to take the product to redirect it. That is being redirected, as you mentioned, mostly into Asia, largely into China. There are no direct impacts on profitability from the redirection itself. Obviously, our profit in the alumina market is impacted by API pricing, and API pricing has declined, so our profitability in that segment follows the impact of API pricing, which you have sensitivity to in the back of the deck. But no impact other than that. And to your pricing question, we still price based on API. On the gallium project in Western Australia, we are making progress. We are continuing to work with the major stakeholders, which are the Japanese government, the Australian government, and the U.S. government, to finalize the documents. I am confident that we will progress the gallium project successfully.

The next question will come from William Peterson with JPMorgan. Please go ahead.

Yes, hi, good afternoon. Thanks for taking the questions and strong execution navigating everything that is going on right now. Within the second-quarter guidance of the Alumina segment, you mentioned that there are some unfavorable impacts of $15 million due to price as well as higher energy prices. Can you unpack this further—how much is pricing, how much is energy? And maybe stepping back on the cost side, carbon products, freight, and diesel were flagged as driving cost pressure. Where is Alcoa Corporation most exposed on these fronts, and how are you looking to mitigate? And second, you are keeping your production and shipment guidance for aluminum fixed. Do you see any opportunities within your footprint to increase production in light of the shortfalls from the Middle East—Alumar, San Ciprián, other sites—to meet the demand?

Hi, Bill. I will take your question. First, on the Alumina segment guidance, we are going down $15 million—lower price and volumes from bauxite offtake agreements represent $10 million of that $15 million. Then on the energy prices, that is primarily diesel within our mining operations. On raw materials in general, we do not have concerns at this point on supply. Our procurement and logistics teams have done a great job navigating the challenges of the conflict. We only have a small portion of caustic soda that we were sourcing from the Middle East, and that has already been redirected to alternate supply. On the price side, in addition to that diesel price that we talked about, we do expect to have price increases in the second quarter, but because of inventory lags, those purchase prices will not flow through to the P&L until beyond the second quarter. If you look at caustic, we do expect rising prices with the lower petrochemicals processing that impacts chlorine production, where caustic is a byproduct. Caustic is on a five- to six-month lag. Carbon prices are also rising due to higher green petroleum coke pricing and availability dynamics, so we will have some exposure there, but not within the second quarter. We also have elevated oil prices that are impacting our freight. There is a portion of that that will flow through, but it will be fairly small. A lot of the freight cost goes into inventory; again the lag, so that will be experienced a bit later. Then we also have energy exposure within our São Luís refinery. We have some indexed fuel oil there, but we have under $5 million incorporated in the outlook. Even though we did not call it out because it was too small.

Thanks, Molly. I would also add to a comment that Molly made. We have had tremendous teamwork with our procurement, logistics, and commercial teams. When you consider the fact that we have a conflict in the Middle East that has massive impacts on shipping schedules, and in addition to that we had a cyclone that was nearly a direct hit in Western Australia, the teams have done a fantastic job of making sure that we do not stock out of anything across our entire portfolio, have ships available for shipping—which is a nontrivial task these days—and get product to our customers. In addition to that, as I alluded to on the CNBC call earlier, we are seeing a lot of spot order requests coming to us based on the disruption in the Middle Eastern supply chain. Both in Europe and North America, our commercial teams have been extremely busy trying to see whether we can match up our excess capacity with what our customers are needing currently. On your second question, we are increasing smelting production at Portland—adding pots in Australia. We are steadily increasing production in São Luís in Brazil. We have completed the restart at San Ciprián, which will have a full second-quarter benefit versus the first quarter. We have a similar situation as in Lista; we have been quietly restarting pots at Lista and getting that back to full production capacity. That is on the smelting side. But probably more importantly, what we are seeing today is on the value-add side. We are matching up some excess capacity that we have in places like Québec and to some extent in Europe with the needs of customers that have struggled given the supply chain disruptions.

The next question will come from Katja Jancic with BMO Capital Markets. Please go ahead.

Hi, thank you for taking my questions. Maybe just as a follow-up to the commentary about increasing production: I assume that is already embedded in the guide, or how should we think about it? And as a follow-up, I was saying that the upside there will probably be less prime P1020 production and higher value-add production, so higher premiums would be expected. And on San Ciprián, given that it is now restarted, in the current environment do the operations—both refinery and smelter—run profitably?

It is embedded in the guide that we have provided. On your point about product mix, yes, that is right—less P1020 and more value-add supports higher premiums. The smelter is doing very well now that it has completed the full restart. Unfortunately, though, we are continuing to have significant losses at the refinery, and within 2026, the smelter will not generate enough cash flow to cover the refinery’s free cash flow losses. We remain on our plan, we are meeting our commitments under the viability agreement, and we are working toward our objective of achieving a neutralization of our cash flows there by 2027. But at current pricing, the refinery remains very challenged.

To tag on to that, the fact that we repositioned metal in the first quarter is looking smarter today than it did even when we did it because of the demand for value-add products. That allows us to free up our cast houses a bit to create incremental capacity for VAP for our customers.

The next question will come from Nick Giles with B. Riley Securities. Please go ahead.

Thanks, operator. Good evening. Obviously, there is a lot of volatility, but Alcoa Corporation has the opportunity to generate a lot of cash in price environments like this, and net debt reversed a bit in 1Q, but you are ultimately nearing your target. How has the impact of the conflict changed the way you are weighing M&A versus shareholder returns? Could buybacks appear less attractive and M&A across refining appear more compelling, just as one example? And second, an update on the monetization of idled sites—if I heard you correctly, I think Massena East is furthest along, with two other sites in the works. Are terms still being worked through on Massena East, and should we assume the highest-value opportunities would be monetized first when we think about your $500 million to $1 billion range across multiple sites?

The conflict has not changed our capital allocation framework. To reiterate, first and foremost is to sustain the operations that we have—it is even more important today than it has ever been given the margins in the smelting business. Secondly, it is to maintain a strong balance sheet, and we have a strong balance sheet, but we have put out a range of $1 billion to $1.5 billion of target net debt, so we still have room to get into that. Beyond that, we will balance between shareholder returns and growth opportunities. So short answer, no, the conflict has not changed that, and we will balance those items. On the idled sites, do not assume that the highest value will be monetized first. Each site has a set of parameters to work with buyers on. In the case of Massena East, it is a buyer we have worked with in the past at the site, and that has accelerated the opportunity to sell Massena East. We are still finalizing terms and will provide additional details later in the process, and we are progressing two other sites in parallel.

The next question will come from Daniel Major with UBS. Please go ahead.

Hi, thanks. Can you hear me okay?

Yes.

Great, thanks. First question, just to follow up on how well you are covered with respect to fuel and other energy input costs. You mentioned financial hedges and supply contracts. What is the duration of those financial hedges? Secondly, how much inventory do you hold in Western Australia, in particular in the scenario that supply out of Asian refineries is constrained?

Before Molly gives you a more quantitative answer, I want to step back and make sure that everyone listening understands our major exposures to energy around the world. Smelting is electricity intensive, and we have less than 1% of our total electricity needs subject to spot purchases. That is the first and foremost largest energy use and we have a very small exposure to spot. On natural gas, we have rolling natural gas contracts in Australia. In Spain, we have hedged our natural gas exposure for the production that is running in San Ciprián, and we have hedged that out through 2027, which, in hindsight, looks really good given some of the dynamics we are seeing in energy in Europe. On fuel oil, we have some exposure in Brazil, but it is not significant. And lastly, we have diesel exposure, and we have baked our best knowledge around diesel into the second quarter. Right now, we have commitments from our suppliers that we will have diesel through May. I do not know that they have the foresight to be able to commit past that, but at this point we are feeling pretty good about our supply of diesel.

On our energy contracts, 99% of them are on long-term commitments, and they do differ by date as disclosed in the 10-K. A couple of the nearer-term ones: we will have an upcoming price negotiation in Iceland for 2027, and we have our Canadian contracts coming up for renewal in 2029. The others are beyond those dates, and of course we just renewed at Massena recently, so we are set there for ten years plus another two five-year increments.

Okay, thanks. Just to follow up, specifically on the diesel in Western Australia, you have certainty on supply through May—is that what you said?

Yes, and just to put that in perspective, we are very focused on diesel in Australia. We would typically have that type of line of sight. I am suggesting we feel pretty confident about our diesel position in Australia.

We are a preferred customer there, so we have a long relationship with the supplier. They know we will be first in the queue.

Okay, that is clear, thank you. And then a follow-up on value-add products: can you give us a breakdown of the $55 million positive benefit in the Aluminum segment? And on shipments versus premiums, what proportion of sales are exposed to the billet premium, and what assumptions have you embedded in the $55 million for premiums during 2Q?

I have some of those details, but not all of them. In the $55 million that we guided favorable for the Aluminum segment, we have about $30 million of benefit coming from the inventory repositioning—actions that we took in the first quarter but that will result in sales in the second. Generally, higher shipments and product premiums together are $35 million. We will have better production cost after completing the San Ciprián restart—that will be about $10 million of the improvement. That is partially offset by seasonally lower third-party energy sales of about $20 million, split between our Warwick power plant resale and our Brazil hydro resales.

Very clear. Maybe just one follow-up. So that $30 million reposition of inventory—that is simply moving the lower sales reflected in 1Q into Q2?

Correct.

The next question will come from Alexander Nicholas Hacking with Citi. Please go ahead.

Hi, thanks for the call. I apologize if I missed this, but did you quantify the cadence of aluminum shipments as we head into 2Q given the deferrals from 1Q? What should the delta be there? And any update on the Canada Section 232? It seemed like we were making some progress last year, but kind of radio silence—any comments around that?

Alex, of course we had lower seasonal sales in the first quarter, but if we look at what was actually missed related to the Middle East shuffling as well as Cyclone Narelle, it was only about 60 thousand metric tons—on a revenue basis about $20 million.

On Section 232, no updates on specific progress. As we go into USMCA negotiations during the course of the summer, we will have to keep an eye on that. Clearly, when the administrations—both the Canadian and the U.S. administrations—talk to us, our position is we would like to see an integrated market across all of North America. That is our position because of the dedicated supply lines that go from Canada straight to our customers in the U.S. So no real updates on any Section 232 changes at this point.

The next question will come from Glyn Lawcock with Barrenjoey. Please go ahead.

Good morning, Bill and Molly. Bill, I just wanted to go back to the mine approvals. Obviously, in your comments, you said there is no change to the timeline, and you have been in discussions with the EPA. Any red flags coming up at all? And maybe just remind us of the timeline—is it still end of this year for approval? As a follow-up, I believe there is another mine move beyond Holyoake and Myara North for the other refinery—is that true, and what timeline does that come through? When would you start to apply for that—two or three years in advance as well?

The timeline is still targeting ministerial approval at the end of this year. We have done significant work to ensure that the comments from the public comment period have been replied to. We continue to provide information to the EPA and to work in support of their decision-making process, and at this point, we are continuing to hold to an expectation of ministerial approval by year-end. My recollection is that there is a Larego mine move in the early 2030s that will occur—that will commence in late 2031. We would have to get back to you on the specific timing of the application process for that move.

The next question will come from Timna Tanners with Wells Fargo. Please go ahead.

Hey, good afternoon, Bill and Molly. I wanted to circle back on some comments that Bill made last quarter about substitution of aluminum for copper. Do you have any observations on that dynamic given the change in prices, and anything you are seeing on substitution away from aluminum given the rise in price as well? And on capital allocation, the last couple of months’ dynamics have changed and potentially a bigger amount of free cash flow—any updated thoughts or any timeframe when you might have updated thoughts on allocation of that additional cash or key uses going forward?

Timna, thanks for the question. At a high level, with copper pricing where it is, there are still real reasons to substitute into aluminum. Aluminum prices have gone up sharply in this conflict, but we believe there are still good reasons to substitute into aluminum. On the other side, on the margin, we have seen some small substitution out of aluminum into steel for applications that can do that. But the larger automotive applications—because they are multiyear platforms—we have not seen that substitution yet. And when you consider things like packaging, the alternative is PET, and with oil prices at current levels, PET would not look attractive to substitute for aluminum. On capital allocation, I get excited about getting into our target net debt level. Our leverage ratios are low; getting into that range translates to the lowest WACC, and once you have the lowest WACC, you have the highest firm value. We are paying down debt—as of the April 14 notice—and in cash in the first quarter we did see a large working capital build. We typically see that, and over time working capital should come back out and into cash. So we will continue to delever and get into that range, which, to me, maximizes firm value.

As we look at our outlook for the second quarter and the second half of the year, we see strong benefits in cash generation, and we expect to have growth options that will compete with shareholder returns in the rest of the year.

The next question will come from John Tumazos with John Tumazos Very Independent Research. Please go ahead.

Thank you for taking my question. It is great that the Middle Eastern customers honor the contracts in this period of war and do not allege force majeure. Are you able to help them resell the alumina or redirect the cargoes, or do they do that on their own? How do they do it where the war disrupts about 400 thousand tons a month, and the shutdown of Mussafah disrupts about 100 thousand tons a month of alumina? It feels like it requires great skill. And separately, Kwinana was idled brilliantly a year or so ago—does everything you have now run full?

John, up until now, our customers are all honoring their commitments, and we assist them with timing of loading and shipping. If they need flexibility around when ships can be loaded, we provide that flexibility. We will also provide flexibility around size of shipments—if they need larger or smaller shipments, to the best of our ability we will do that. It is a pretty dynamic, fluid situation. Molly and I just reviewed today all of the forward bauxite and all of the forward alumina shipments out of Western Australia, looking at the laydays and making sure that the ships are coming in correctly. Up until now, we have been able to do that smoothly by supporting our customers. Everything we have now is ramping back up to full. Remember we had Cyclone Narelle—it was nearly a direct hit in Western Australia and shut down the gas system to a large extent. We curtailed our sites in Western Australia to conserve natural gas to be used in other parts of the community, and we are now in the process of ramping both Wagerup and Pinjarra back up to full volume. Spain, as we all know, runs at half volume—Spain is there to largely support the smelter restart. And Alumar has had a fantastic first quarter and had a fantastic fourth quarter; on the refinery, knock on wood, the smelter has very good stability.

The next question is a follow-up from Nick Giles with B. Riley Securities.

Thanks for taking my follow-up. Can you clarify how you are thinking about Warrick in terms of a restart? What would it take from here for you to move forward, and do you have any rough estimate for the CapEx requirements? And on February’s significant revisions on downstream trade measures the other week, what are you hearing from your customers—any sensitivity to those changes?

Warrick—glad you asked. We talked about restarting capacity in Australia, the ramp-up in Brazil, ramping up capacity in Lista, and we just completed the ramp-up at San Ciprián. So you should be asking about those 50 thousand tons at Warrick. First, the condition of the curtailed line at Warrick is pretty poor. It will require about $100 million of capital, and we think it will be one to two years for that restart. There are some long lead time items, specifically around the electrical equipment, required to restart Warrick. On paper, the restart looks positive at this point. However, we are weighing availability of short-term and long-term electricity, and our ability to successfully run that plant at a four-line operation safely. If you have followed us long enough, you know we were running five lines, went down to three lines, ultimately went down to two lines, and restarted back to three lines. We have good stability and good safety there today, and we will factor all that into an analysis of a potential restart of that fourth line. On the downstream trade changes, my understanding is they allow downstream customers in the U.S. to have a level playing field with imports, and that has been favorably received.

This concludes our question and answer session. I would like to turn the conference back over to Mr. Oplinger for closing remarks.

Thank you for joining our call. Molly and I look forward to sharing further progress when we speak again in July. That concludes the call. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.