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DATE

Thursday, July 30, 2026, at 8:30 a.m. ET

CALL PARTICIPANTS

• Vice President, Investor Relations - Michael Leithead
• President and Chief Executive Officer - David Sewell
• Chief Financial Officer - Tina Pierce

TAKEAWAYS

• Net Sales -- $1.15 billion, representing 11% growth year over year and exceeding the top end of management's guidance range.
• Adjusted EBITDA -- $290 million, a 2% increase year over year, driven by volume growth and favorable pricing.
• Adjusted EBITDA Margin -- 25.3%, reflecting a year-over-year decline primarily due to the timing of planned plant turnarounds and prior-year production incentive credits.
• Adjusted EPS -- $0.88, compared to reported GAAP diluted EPS of $0.75 for the second quarter.
• Refrigerants and Applied Solutions Sales -- $850 million, an increase of 12% year over year, driven by volume and pricing strength across the segment.
• Refrigerants and Applied Solutions Adjusted EBITDA -- $280 million, a 6% decline year over year, resulting from heavy plant turnaround activity and production incentive credit timing.
• Electronic and Specialty Materials Sales -- $298 million, rising 8% year over year, supported by volume growth in semiconductor applications.
• Electronic and Specialty Materials Adjusted EBITDA -- $64 million, a 24% increase year over year due to productivity improvements and volume growth in electronic materials.
• Refrigerant Sales -- $473 million, growing 13% year over year, reflecting strength in the transition to hydrofluoroolefin products and data center orders.
• Nuclear Sales -- $125 million, increasing 27% year over year, driven by favorable pricing and higher volumes.
• Healthcare Packaging Sales -- $73 million, rising 24% year over year following a recovery in customer demand patterns after prior destocking.
• Electronic Materials Sales -- $119 million, a 15% increase year over year, supported by demand for semiconductor applications.
• Safety and Defense Solutions Sales -- $43 million, growing 7% year over year as the business returned to growth in non-Armor applications.
• Full Year 2026 Net Sales Guidance -- $4.13 billion to $4.19 billion, raised from previous expectations due to strong first half performance.
• Full Year 2026 Adjusted EBITDA Guidance -- $1.04 billion to $1.06 billion, reflecting management's confidence in continued business momentum.
• Full Year 2026 Capital Expenditures Guidance -- $420 million to $440 million, an increase intended to accelerate growth in high-return areas such as the Spokane expansion.
• Operating Cash Flow -- $461 million for the first half of the year, supported by disciplined working capital management.
• Free Cash Flow -- $248 million for the first half of the year, inclusive of a significant year-over-year increase in growth capital expenditures.
• Total Liquidity -- $1.75 billion, consisting of $750 million in cash and cash equivalents and $1 billion of availability under a revolving credit facility.
• Third Quarter Revenue Guidance -- $990 million to $1.03 billion, assuming momentum in refrigerants and electronic materials with more modest nuclear performance.
• Nuclear Product Loan Returns -- Negative $30 million impact to second half revenue, with the impact skewed toward the fourth quarter of 2026.
• Metropolis Facility Capacity -- Management is exploring debottlenecking opportunities that could take capacity beyond 10,000 metric tons.
• Net Leverage Ratio -- 1.3x based on trailing 12-month adjusted EBITDA, maintaining a conservative leverage profile.

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RISKS

• Pierce stated, "Continued construction market softness weighed on the subsegment," referring to the 1% decline in net sales for Building Solutions and Intermediates.
• Pierce noted that the decline in Refrigerants and Applied Solutions adjusted EBITDA was "primarily attributable to the timing of certain plant turnaround activity and production incentive credits."
• Sewell stated, "We are raising our full year 2026 guidance even against an uncertain macroeconomic backdrop," acknowledging potential volatility in the global economy.

SUMMARY

Solstice Advanced Materials (SOLS +3.11%) management reported increased revenue and raised full-year financial guidance for 2026, citing demand across semiconductor, data center, and nuclear energy markets. The company is advancing a strategic acquisition of Element Solutions to expand its presence in electronic materials and artificial intelligence infrastructure. Operations in the second quarter were affected by planned plant turnarounds and the transition away from previous service agreements. The company maintains a focus on capital allocation through a quarterly dividend and investments in capacity expansions for electronic materials and nuclear conversion.

• CEO Sewell stated that the acquisition of Element Solutions represents a "significant acceleration of our strategy to build an industry-leading advanced materials platform with increased exposure to high-growth electronics, AI infrastructure and other attractive end markets."
• The company reported positive momentum in the nuclear business, supported by new supply agreements with three small modular reactor developers and a "nuclear renaissance" in the industry.
• Management reported that data center cooling is the "fastest-growing aspect of our refrigerants business," with demand increasing by double digits as customers shift to hydrofluoroolefin solutions.
• Capacity expansion at the Spokane facility is being accelerated to meet demand for sputtering targets, which management identified as a primary product for leading-edge semiconductor nodes.
• CFO Pierce noted that the "most significant outage quarter" is now complete, with all sites returned to operational status and expected margin expansion in the second half of the year.
• The company anticipates achieving a net debt to EBITDA ratio of less than 3x within 18 months following the close of the Element Solutions acquisition.
• CEO Sewell noted that the company has increased R&D spending to develop next-generation molecules for two-phase direct-to-chip and immersion cooling applications.

INDUSTRY GLOSSARY

• HFC (Hydrofluorocarbon): A class of refrigerants being phased out globally due to their high global warming potential.
• HFO (Hydrofluoroolefin): A fourth-generation refrigerant with low global warming potential used as a sustainable alternative to HFCs.
• LGWP (Low Global Warming Potential): A measure of how much a chemical contributes to global warming relative to carbon dioxide.
• SMR (Small Modular Reactor): Advanced nuclear reactors that are smaller and more flexible than conventional nuclear power plants.
• Sputtering Target: A source material used in physical vapor deposition to create thin films in semiconductor and microelectronic manufacturing.
• TIMs (Thermal Interface Materials): Materials used to improve heat transfer between heat-generating components and cooling devices.
• TSA (Transition Service Agreement): A contract where a seller provides specific services to a buyer for a set period following a corporate spin-off or divestiture.

Full Conference Call Transcript

Operator: Greetings and welcome to the Solstice Advanced Materials Q2 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Mike Leithead, Vice President, Investor Relations. Mike, please go ahead.

Michael Leithead: Thank you, and good morning, everyone. Welcome to Solstice's Second Quarter 2026 Earnings Call. We released our second quarter 2026 financial results earlier this morning. Today's presentation, including non-GAAP reconciliations and our earnings press release are available on the Investor Relations portion of Solstice's website at investors.solstice.com. Our discussion today will include forward-looking statements that are based on our best view of the world and our businesses as we see them today and are subject to risks and uncertainties, including the ones described in our SEC filings. This includes statements regarding our pending acquisition of Element Solutions. Please see the additional disclosure in this morning's materials and our related SEC filings.

Joining me today are David Sewell, our President and CEO; and Tina Pierce, our CFO. David will open today's call with highlights of our second quarter results. Tina will then review our segment performance and financial outlook before turning the call back to David for closing remarks. We will then be happy to take your questions. With that, I'll now turn the call over to David.

David Sewell: Thank you, Mike, and thank you, everyone, for joining us today. During the second quarter, Solstice Advanced Materials again delivered strong top and bottom line results, reflecting ongoing robust demand trends across several of our key businesses, including nuclear energy, electronic materials, refrigerants and health care packaging. In fact, 6 of our 7 businesses grew this quarter, 4 of them at double-digit rates. I want to take a moment to thank our entire Solstice team whose execution this quarter speaks for itself. This performance demonstrates the strength of Solstice's portfolio, not only through our transition to a stand-alone company, but also in a dynamic macroeconomic environment.

This quarter, that resilience showed up in sound execution through macroeconomic volatility, a heavier slate of planned plant turnarounds and the largely complete exit of our transition service agreements. Our Specialty Materials assets and balance sheet strength continue to set us apart in this industry, allowing us to reinvest in growth at a time when many in the industry have needed to pare back. We continue to invest in compelling growth areas aligned with our strategic priorities, such as our Electronic Materials, Safety and Defense Solutions and nuclear businesses, consistent with what we believe are attractive long-term outlooks for demand.

That investment spans both CapEx and increased R&D spending as we advance the next generation of critical molecules for our customers. Together with our announced acquisition of Element Solutions, these high-return organic investments mark a clear acceleration of our growth strategy. We generated $461 million of operating cash in the first half, supported by disciplined working capital management, cash generation that funds our growth investments and supports returning cash to shareholders through our recently declared quarterly dividend. The strong cash generation of our business is what gives us confidence in the rapid deleveraging of net debt to less than 3x EBITDA that we anticipate within 18 months following the close of the Element Solutions acquisition.

With our strong first half performance and continued momentum across the business, we are raising our full year 2026 guidance even against an uncertain macroeconomic backdrop. Turning to Slide 4. I'd like to briefly update you on our acquisition of Element Solutions, which we announced on July 6. This combination represents a significant acceleration of our strategy to build an industry-leading advanced materials platform with increased exposure to high-growth electronics, AI infrastructure and other attractive end markets. The same secular trends powering our results this quarter include artificial intelligence, data centers, semiconductor manufacturing and thermal management are precisely what makes this combination so compelling.

Together, we believe we will be better positioned to serve electronics and AI infrastructure customers from early-stage development through high-volume manufacturing, while our refrigerant solutions, including data center cooling and our specialty positions such as nuclear remain core to the combined company. The logic here is grounded in what you are already seeing in our results. The customer expansion, secular demand and technical capability that are foundational to the strength of our business. Solstice and Element are a natural fit, not only because we support similar customer environments, but because of our complementary strengths.

When you combine our chemistry expertise with Element's formulation capabilities, you get what we expect to be a leading platform for innovation that will fuel the development of next-generation solutions. With Element, we believe we will also be positioned to collaborate with customers early in their project life cycles to develop solutions purpose-built to support their objectives. The synergies we outlined in our investor materials about the transaction build directly on those drivers, which is why we have confidence in the value this creates. The transaction remains subject to shareholder and regulatory approvals and other customary closing conditions, and we expect it to close in the first half of 2027.

We are very excited about what our 2 companies can build together. Turning to Slide 5. I'd like to discuss our second quarter 2026 consolidated results. In the second quarter of 2026, Solstice recorded $1.148 billion in net sales, up 11% year-over-year, which exceeded the top end of the guidance we provided for the quarter. In our Refrigerants & Applied Solutions segment, strong demand for refrigerants driven by the ongoing HFO transition and accelerating data center orders, together with continued strength in nuclear and a recovery in health care packaging drove double-digit top line growth for the segment.

In our Electronic and Specialty Materials segment, net sales growth was driven by robust demand in our electronic materials business for semiconductor applications. Adjusted EBITDA for the second quarter of 2026 was $290 million, up 2% year-over-year and exceeding the top end of the guidance we provided for the quarter. Adjusted EBITDA margin was 25.3%, in line with our expectations for the quarter. The decline in margin year-over-year was primarily driven by the timing of certain plant turnaround activity and prior year production incentive credits, partially offset by volume growth and favorable pricing. As a reminder, we continue to see ongoing strong demand for our low global warming potential products.

Now over a year into the 454B transition, we continue to expect our Refrigerants and Applied Solutions segment to deliver mid-30% adjusted EBITDA margins in the second half of 2026 as the aftermarket develops. We reported GAAP net income attributable to Solstice of $119 million for the second quarter of 2026, up from $97 million a year ago or $0.75 per diluted share. Consistent with what we signaled last quarter, noncontrolling interest declined sequentially to $15 million this quarter from the atypically high $20 million in the first quarter. This quarter, we also reported adjusted diluted EPS of $0.88 for the second quarter.

Finally, free cash flow for the first half of 2026 was $248 million, which is inclusive of the significant year-over-year increase in growth CapEx as we invest in high-return opportunities across the business, including the Spokane expansion to meet robust sputtering target demand. And with that, I'll now turn it over to Tina Pierce, our CFO, to discuss our financial results for the second quarter in more detail.

Tina Pierce: Thank you, David. Turning to Slide 6. I'd like to discuss in more detail the key drivers of our year-over-year net sales and adjusted EBITDA performance in the second quarter. Beginning with our net sales of $1.148 billion for the quarter. Organic net sales growth was approximately 11%, reflecting both volume growth and favorable pricing. This primarily reflects volume growth and favorable pricing in both nuclear and refrigerants as well as volume growth in Electronic Materials. Foreign currency translation was a modest tailwind of roughly 0.5 point. Turning to our adjusted EBITDA of $290 million for the quarter, up 2% versus the prior year period.

Year-over-year improvement in ESM, together with a favorable corporate and stand-alone comparison, more than offset a decline in RAS, which is primarily attributable to the timing of certain plant turnaround activity and production incentive credits that David just discussed. Turning to Slide 7. I'll now discuss the results in each of our 2 segments in more detail, beginning with Refrigerants and Applied Solutions. Overall, the segment achieved $850 million in net sales for the second quarter of 2026, reflecting 12% growth year-over-year, driven by volume growth and favorable pricing across the business. The segment posted $280 million in adjusted EBITDA for the second quarter of 2026, down 6% year-over-year and adjusted EBITDA margin of 32.9%, down 648 basis points year-over-year.

As mentioned previously, this decrease was primarily driven by the timing of plant turnaround activity and prior year production incentive credits, which more than offset volume growth and favorable pricing in the segment. Turning to the performance of our subsegments. Refrigerant net sales increased 13% year-over-year to $473 million, driven by both favorable pricing and volume growth across our product offerings. Beyond the 454 strength that David highlighted, data center orders remain robust again this quarter, underscoring how this business sits at the intersection of several key secular growth trends. Our nuclear business had $125 million in net sales, up 27% year-over-year, reflecting both favorable pricing and increased volumes.

We are seeing positive momentum in this business, reinforced by new supply agreements with 3 small modular reactor developers. For the first time in decades, we are seeing meaningful innovation from entrepreneurs across the nuclear ecosystem. We remain excited about this differentiated business and the critical role we believe it will play in the nuclear renaissance now clearly taking shape. Building Solutions and Intermediates net sales were $180 million, down 1% year-over-year. Continued construction market softness weighed on the subsegment, but we remain focused on advancing our LGWP solutions and maintaining disciplined operational execution to ensure we are well positioned to serve our customers upon a return to more normalized demand in key end markets.

Lastly, for Healthcare Packaging, net sales were $73 million, up 24% year-over-year. The increase was driven by a recovery in customer demand patterns following the destocking we saw in the second half of 2025 as well as favorable net pricing. Now turning to our Electronic and Specialty Materials segment on Slide 8. The segment achieved $298 million in net sales for the second quarter of 2026, reflecting 8% growth year-over-year, driven by volume growth in Electronic Materials. The segment posted $64 million in adjusted EBITDA for the second quarter of 2026, up 24% year-over-year and adjusted EBITDA margin of 21.6%, up 280 basis points year-over-year. The increase was primarily driven by volume growth in Electronic Materials and productivity improvements.

Looking at the performance of our subsegments, Electronic Materials net sales increased 15% year-over-year to $119 million, driven by volume growth and robust customer demand across semiconductor applications. We were also recently recognized with the top supplier award from SK Hynix, a strong external validation of the strength of our technology and execution. As David noted, we are expanding electronic materials capacity to meet AI and data center-driven semiconductor demand, which we see as a significant multiyear opportunity for Solstice. Safety and Defense Solutions had $43 million in net sales, up 7% year-over-year.

As we anticipated last quarter, the business returned to growth driven by non-Armor applications, and we continue to invest in capacity expansion to support long-term market demand for our Spectra line of solutions. Finally, Research and Performance Chemicals net sales increased 3% year-over-year to $135 million with growth in Fine Chemicals, partially offset by ongoing end market softness in Specialty Additives. Moving to Slide 9 to discuss Solstice's balance sheet and capital management. Our strong balance sheet, cash flow generation and conservative leverage position continue to enable financial flexibility and fuel Solstice's many attractive growth investments. I would like to start with cash, with Solstice generating $461 million of operating cash flow in the first half of the year.

In addition to healthy earnings generation, we were able to execute strong working capital management, reducing our dollar inventory despite the healthy increase in revenue and rising input costs. Our capital expenditures for the first half were $186 million, a 32% increase compared to the prior year period due to planned increases in capital spending to drive long-term growth in high-return areas of the business. As a reminder, beyond the electronic materials expansion in Spokane, we are actively investing in our Spectra ballistic fibers expansion in Virginia as well as advancing further expansion of our nuclear conversion business.

As we work through debottlenecking at our Metropolis facility, we are exploring attractive incremental opportunities that we believe can take capacity beyond 10,000 metric tons, and we expect to share more later this year. Turning to our capital structure. We have maintained a conservative leverage profile and strong liquidity position. As of June 30, 2026, our total debt was approximately $2 billion, and we had cash and cash equivalents of $750 million, resulting in net debt of approximately $1.25 billion and a net leverage ratio of approximately 1.3x based on a trailing 12-month adjusted EBITDA. As of June 30, 2026, we also had $1 billion of availability under our revolving credit facility.

Combined with the cash on our balance sheet, this results in approximately $1.75 billion of total liquidity. As David mentioned earlier, we announced on July 17, approval of a quarterly dividend of $0.075 per share, in line with last quarter, which will be payable on September 10 to shareowners of record as of August 27. We continue to view returning excess capital to shareholders as a key piece of our overall capital allocation approach. This same balance sheet strength is what allows us to finance the Element Solutions transaction from a position of discipline.

We have structured the acquisition to preserve our current credit rating profile and our cash generation supports a clear path back to our target leverage in the periods following close. Turning to Slide 10. I'd like to discuss our outlook and financial guidance for both the full year and the third quarter of 2026. Importantly, we did what we said we would do during this quarter, delivering above the range we set and converting that into strong cash generation. This kind of execution is the foundation for the confidence we are expressing today, both in raising our full year outlook and in our continued ability to drive growth.

For the full year 2026, we now expect to deliver net sales between $4.125 billion and $4.185 billion, adjusted EBITDA between $1.035 billion and $1.055 billion and adjusted diluted earnings per share between $2.75 and $2.95. Additionally, we now expect capital expenditures between $420 million and $440 million. Today, we are also providing guidance for the third quarter of 2026 as we want to help investors better understand our business and our first year as a public company. In the third quarter, we expect to deliver net sales between $990 million and $1.03 billion.

Our outlook for the third quarter assumes continued momentum in refrigerants and Electronic Materials and more modest nuclear performance, reflecting the timing of final product loan returns and order patterns with consistent margin performance. A few additional modeling points for the second half. We expect a negative revenue of approximately $30 million from the final return of nuclear product loans skewed modestly toward the fourth quarter. I'd now like to pass it back over to David for some closing remarks.

David Sewell: Thank you, Tina, and please turn to Slide 11. With strong performance in the first half and solid momentum heading into the remainder of the year, we are well positioned to deliver on our full year 2026 guidance. As we discussed today, we are seeing continued strong demand in our businesses that serve key end markets aligned with secular growth trends, including artificial intelligence, data centers, semiconductor manufacturing and nuclear energy and thermal management. These are core strategic areas for Solstice where we have both a clear right to play and right to win. Solstice is a strong growing business today with durable pricing power, high returns on capital and robust free cash flow.

We are putting that cash flow to work with disciplined reinvesting in our businesses, both in terms of expanding our R&D pipeline as well as high-return growth CapEx while returning excess capital to shareholders through our quarterly dividend. Our pending acquisition of Element Solutions builds on that momentum, accelerating a strategy that is already working. We are energized by both delivering on our current business quarter after quarter and bringing these 2 companies together to create even more value. We have work well underway to develop an integration road map to seamlessly bring our businesses together after this transaction closes in order to unlock the compelling opportunities we see ahead for our combined company.

We remain excited about the significant opportunities ahead in 2026 and beyond. We look forward to sharing additional updates throughout the year. And with that, we are now happy to take your questions.

Operator: [Operator Instructions] Our first question today is coming from Kevin McCarthy from Vertical Research Partners.

Matthew Hettwer: This is Matt Hettwer on for Kevin McCarthy. Congrats on the nice quarter. And in Refrigerants, how do you see sales and EBITDA growth unfolding in the back half of the year? And what kind of margin impact do you expect from incremental unit sales given the transition to HFO?

David Sewell: Thanks, Matt. What we talked about for our refrigerants business is continued sequential margin expansion. I think we talked about mid-30s for the second half of the year, which we feel very confident in. We talked about some of the margin impacts in second quarter. With that behind us, we see the margin expansion continuing. We did have sequential margin expansion in refrigerants in Q2 over Q1. And from a volume standpoint, we feel very confident in continued strong demand for our refrigerants. We're actually seeing a little bit of an acceleration to HFOs from HFCs, which we think is a continued positive. And for the most part, the aftermarket for HFOs in North America has not kicked in yet.

So that's additional upside that we see moving forward.

Matthew Hettwer: And then as a follow-up, maybe you could discuss how your development of next-generation non-PFAS refrigerant molecules is progressing?

David Sewell: So we're doing a lot of work on next-generation yf molecule, and we're really excited about the development that we have. We're currently in testing that looks very promising, and we have already begun conversations with customers on this as well. Part of the refrigerants that Tina talked about on the margins, we did increase our R&D spend earlier this year. And a big chunk of that is going to the next-generation yf molecule as well as next-generation molecules in development for things like 2-phase direct-to-chip, immersion cooling. So we feel really well positioned to continue to innovate in next generation.

Operator: Our next question today is coming from Josh Spector from UBS.

Joshua Spector: I just wanted to ask about the second half guidance. So you gave sales but not EBITDA for 3Q. So I'm not sure why you didn't give that, just considering we don't have a ton of history. So can you help us either with a specific kind of range for 3Q EBITDA or a way to think about phasing just given the moving parts here?

Tina Pierce: Josh, yes, the reason is that our margins have been very consistent throughout 2026. We've got now one quarter and second quarter as well as the full year guidance. But I would just say that the way we look at it is our margin rate has been right around that 25% range.

David Sewell: So Josh, you could probably just back into it with low 25% margin range with that revenue.

Tina Pierce: With the revenue range that we guided.

David Sewell: Yes.

Joshua Spector: And you expect that consistent 3Q and 4Q then?

David Sewell: We do -- we are -- as we've talked about, we do expect to see sequential growth in our margins as we move forward. But we're -- as we come off the TSAs and some of the other aspects, we don't anticipate that changing, but I would anticipate small sequential growth in our margin expansion.

Joshua Spector: Okay. And if I could just ask a follow-up on refrigerants. I mean you noted data center growth. I'm just curious, are you at a point now where you could talk about the exposure there in terms of how much of refrigerant sales are exposed to data centers, what the growth is? And is that outside the data center cooling? Or is this liquid cooling inside that's driving some of the upside there?

David Sewell: So our data center cooling, it's still a smaller piece of our overall refrigerants, which is why we just haven't broken it out. However, saying that, it's the fastest-growing aspect of our refrigerants business. It's growing strong double digits. Most of that is still in standard cooling that we do in data centers, chillers. The work we're doing in things like 2-phase and immersion cooling is really to be coming in the future. But the expansive growth of data centers and the technology we have in our refrigerants for data centers is really compelling, and that's why we're seeing such tremendous growth.

Operator: Our next question is coming from John McNulty from BMO Capital Markets.

John McNulty: Congrats on some solid results. So I wanted to dig into the RAS margins. Admittedly, they came in a little lighter than we expected in 2Q and yet you're looking for mid-30s in the back half. And that, I think, comes despite that uranium loan giveback. So I guess, can you help unpack the 2Q maybe coming in a little bit on the lighter side and how you get to those mid-30 margins even with that loan giveback, which I would think is at least a little bit of a drag.

Tina Pierce: Yes. So John, first off, we did have -- as we had signaled in quarter one, we did have very heavy plant turnarounds in the quarter. Good news is all sites are back up and operating well. We did have one campaign that did shift from second quarter to the second half, and there is an absorption benefit from that shift. And then we also had some production incentive credit timing, as David alluded. So last year, in second quarter, we secured some of these incentives, and it was a cumulative impact in second quarter of last year, which made for some difficult comps for this year.

Going forward, that will be more linear as we recognize each of it each quarter. I would say that second quarter was our most significant outage quarter. We tend not to do that much during the summer months when it's extremely warm. We'll have some more minor planned outages in the fall of the year, but not to the same scale as what we had in second quarter. And then as David mentioned, we do anticipate being mid-30s for the second half of this year.

John McNulty: Okay. Fair enough. And then I guess maybe just as a follow-up on the nuclear platform. I know the EPC work, you're not expecting to kind of have any major announcements until kind of the late fall, early winter. But I guess, can you help us to understand if you're maybe leaning toward either brownfield versus greenfield? And also, any potential updates around either support from the federal government and/or support that you may be seeing from your customers?

David Sewell: Yes, John, good question. And you hit on the key 3 areas which the team is working extremely hard on. So if you take the first question on the engineering work, that's progressing extremely well. And whether it's a brownfield or greenfield, I would also add, and I think Tina alluded to it briefly in her comments, because of the debottlenecking work we're doing this year to get to that 10,000-plus tons, we're really encouraged that there may be the potential to do additional debottlenecking in Metropolis. So I think you'll see more information coming out on additional debottlenecking.

And then on a brownfield versus greenfield, it's -- we're right in the heat of all the analysis and where that's going to come out. One of the things we're also looking at is kind of a modular design, bringing in capacity at certain stages. So I think we'll have more for you in the next few months exactly where that's coming in. But I would tell you, there's just an enormous amount of work going on. And directionally, I think we'll be able to give you a lot more information when the study is completed over the next few months. But we're very encouraged by everything we've seen.

On parts 2 and 3 of your question, our customer discussions to secure longer-term contracts well into the mid-2030s is going very well. We're really encouraged by the reception we've had from customers because they fully understand the need for us to secure that volume to commit to the build, and they want us to do this. They love our experience with a 60-year history of working with them, the confidence that we can start up a new facility quickly. So that's going extremely well.

And then the last piece on the government discussions, really encouraged by the feedback we're getting from the Department of Energy and NRC and across the government because you know the passion the current administration has to increase nuclear capacity, and they are certainly wanting to continue the partnership that we have with them as we move forward with the potential expansion. So -- when we look at all 3 of the levers, we feel great about all of them as we move forward. And I think we'll be able to share more over the next few months.

Operator: Our next question is coming from John Roberts from Mizuho Securities.

John Ezekiel Roberts: It looks like the revenue guide for the September quarter and the December quarter are roughly the same, but the nuclear payback is skewed to the fourth quarter, and I think refrigerants is normally seasonally lower. So why would the revenue be similar between the 2 quarters?

Tina Pierce: Well, yes, in terms of how we're looking at the second half of the year, as you mentioned, quarter 2 does tend to be the largest quarter for refrigerants. Nuclear, there was a little bit of timing of the orders, a little bit lighter in the second half due to the loan repayments that we mentioned. Electronics, though, we're seeing continued growth there. And also, we're starting to see some of the capacity unlock in the second half of the year. And then as we mentioned in last quarter's call, our Safety and Defense business, we were flat in quarter one, and we anticipated that, that would pick up through the remainder of the year.

So those [indiscernible] the good thing is there's really no assumed significant improvement in our construction businesses as well.

John Ezekiel Roberts: Okay. And then since you were talking about maintenance downtime in the first half, I assume Metropolis was not part of the maintenance downtime, but maybe I'm wrong there. When is the next Metropolis planned maintenance downtime? And do you build inventory in advance of that? I don't think we've experienced one of those cycles yet. So how do you handle that?

Tina Pierce: Yes. Actually, Metropolis was part of the turnaround in quarter 2. And so that's really an annualized process. We don't anticipate any more for this year. And yes, we do try to build some inventory in anticipation of that turnaround.

Operator: Our next question today is coming from Hassan Ahmed from Alembic Global.

Hassan Ahmed: Just wanted to sort of revisit the full year guidance again. I mean, from the sounds of it, you guys are obviously expecting a sequential decline in revenues Q2 to Q3. And obviously, then you have the nuclear repayment in Q4. It just seems that the EBITDA seems to be quite skewed for Q4 despite the nuclear element there and the like. So just trying to understand what gives you that confidence. I understand that the turnarounds are behind you guys and the like. But why are you expecting a Q4 to be, I guess, materially larger than Q3?

Tina Pierce: Yes. Hassan, as I mentioned, it's really the growth in our electronics business and some of the capacity unlock in addition to just the volumes that we're seeing in that business. Safety and Defense, very light for quarter one. We knew that it was going to be stronger for the remainder of the year. And we do continue to expect good things from our refrigerants business. We now have lapped a full 12 months in terms of the 454B transition, but we're continuing to see growth. David talked about the data centers. So a lot of positive growth trends in that business as well.

David Sewell: I would also add, we feel pretty good about some of the share gains that the team has executed on, and I think we'll start to see continued volume momentum in that area.

Hassan Ahmed: Very helpful. And as a follow-up, I mean, obviously, a lot of macro uncertainty and volatility. How are you guys now thinking about sort of marketing for the permanent debt for the Element Solutions acquisition? Any sort of considerations around the time line?

Tina Pierce: Yes. Well, we have a few windows. One would be in September and then kind of that October, November time frame and then, of course, first half. So we're going to be very opportunistic when we go to market.

Operator: Our next question is coming from Arun Viswanathan from RBC Capital Markets.

Arun Viswanathan: I guess my first question is just on electronics. You did see strong 15% growth there. Could you just elaborate a little bit on that? And I guess as a related point, I know you have the expansion going on at Spokane. So I guess maybe if you could provide some more details there, where are you on that? And I think you had previously mentioned that much of that was kind of spoken for. So is there an opportunity to continue to expand that facility? Or what can you offer on that side?

David Sewell: Yes. Thanks, Arun. I appreciate the question. So if you look at our electronics business, it's really not only our sputtering targets, it's also our TIMs and heat spreaders. It's really strong across the board. To the point on our Spokane expansion, the reason for some of that elevated CapEx that we alluded to is because we're pulling in some of that to accelerate the expansion of Spokane because the demand is just so strong. So we will be -- we believe, increasing our output in the second half, which also goes to why we're more bullish on the second half of the year with our new guidance levels. So we feel great about that.

And just the demand we're seeing in addition to accelerating the CapEx, we're already having initial discussions on are we going to need to do another expansion even beyond this. So the demand is just that strong for our copper manganese sputtering targets, which has really become the go-to product for leading-edge nodes. And so we are accelerating -- our customers are increasing their forecast multiple times over the last several months. And these forecasts go out multiple years. So we feel really good about the investments we're making in Spokane, and we'll continue to accelerate and expand capacity as quickly and safely as we possibly can.

Arun Viswanathan: Great. And then just as a follow-up, I think the corporate came in a little bit lower than what we were expecting. How are you looking at that now for the full year? And have you guys -- is that a result of some optimization and productivity actions that you're taking? And do you see line of sight to more of those opportunities as well to reduce corporate expense? Or maybe you can just comment on that.

Tina Pierce: Yes. So for the first half, the team has done an absolutely terrific job in terms of cost management of our corporate functions. Also, I'd say that we've -- as David mentioned in his opening comments, we've -- we're largely through the TSAs at this point. Second quarter was particularly heavy in that regard, but we have the most significant ones behind us at this point. As we look forward, we've said it's going to be roughly $60 million per quarter. Now with that being said, with the integration with ESI, we will obviously be looking at all of that spend and see if it's better spent and whether we can scale it in a much more significant way.

But right now, we're forecasting at $60 million per quarter. But we're going to be very prudent in our cost in the second half as we were in the first half.

Operator: Our next question is coming from Pete Osterland from Truist Securities.

Peter Osterland: So first, I just wanted to ask about portfolio optimization. Are you actively exploring potential noncore divestitures? And are there any businesses in particular that might be noncore, but would be difficult to sell due to dis-synergies involved with the separation? I guess, broadly, how are you thinking about the portfolio at this stage?

David Sewell: So Pete, thanks for the question. We -- when we spun out of Honeywell, we laid out a long-term strategic plan to our Board on the portfolio and being really a leader in these secular growth trends with a strong right to win and value proposition. And with that, the first step of that was the Advanced Electronics segment. We just felt so strongly about it and the new infrastructure that's needed around AI literally over the next decade plus. I mean we just see that growth so strong.

And when you tie in our core capabilities around synthetic chemistry and our refrigerants business, our fluorine business and our electronics, we just think that, along with nuclear, just was such a great core for those secular growth trends. As we've talked about, we love the businesses we're in. We think it's a little premature to start talking about the portfolio, but we will certainly continue to optimize where we think it's appropriate as moving forward. But if you think about the financial profile of our company, where we want to go and really be a differentiated advanced materials company that's just so powerful in what we can provide our customers.

We think we have a great portfolio that does that, but we'll certainly continue to look at optimizing in the future as any company would as you look forward.

Michael Leithead: Pete, this is Mike. I would just add the one other caveat on top of what David said. Just as a reminder, as part of our tax-free spin-off from Honeywell late last year, there is some guardrails in the very near term around what we can do from a portfolio optimization standpoint. So just keep that in mind as well.

Peter Osterland: Understood. And then just as a follow-up, you called out some raw material inflation baked into your expectations for the second half. Any specific inputs where inflation is most significant for you right now? And for which businesses are you seeing the greatest need to push through higher pricing in order to maintain your margins?

David Sewell: Well, I would say -- I'll make a comment and certainly turn it over to Tina. We do pass through anything on our precious metals. So that's a straight pass-through. So as we see inflation in that area, we are able to pass that through to customers. Obviously, you see some core inflationary areas in diesel fuel, transportation. But I would say one of the biggest areas we're seeing inflation is sulfur in our refrigerants business. That has had an impact, but we -- the team has done a great job ensuring they're able to secure price to offset that inflation.

Tina Pierce: And then yes, that's exactly right. I would say good execution in covering our price cost in second quarter, and we anticipate the same for the remainder of the year.

Operator: We reached the end of our question-and-answer session. I'd like to turn the floor back over to Mike for any further or closing comments.

Michael Leithead: Great. Well, look, I really appreciate everybody joining us on quite a busy morning. If you need anything else or if you'd like to follow up, please reach out to myself or the Investor Relations inbox and always happy to spend some time to chat through it. So appreciate it, and have a good day.

Operator: Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.