Slide 1: 2nd Quarter 2008 Analyst Conference
Exhibit 99.2 2nd Quarter 2008 Analyst Conference [Alcoa logo] July 8, 2008
Slide 2: Forward Looking Statements
[Alcoa logo] Forward Looking Statements Today’s discussion may include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements relate to future events and expectations and involve known and unknown risks and uncertainties. Alcoa’s actu
Slide 3: Chuck McLane, Executive Vice President and Chief Financial Officer
Chuck McLane [Alcoa logo] Executive Vice President and Chief Financial Officer
Slide 4: Profitability improvement across all segments
[Alcoa logo] Profitability improvement across all segments – Income from continuing operations of $546m or $0.66 per share – Revenues of $7.6 billion • 11% sequential increase, excluding Packaging • Higher revenue in all operating segments – Double digit profit increase across all operating segments
Slide 5: Strong revenue growth leads to 80% increase in profits
[Alcoa logo] Strong revenue growth leads to 80% increase in profits In Millions 1Q 08 2Q 08 Change Sales $7,375 $7,620 3% Cost of Goods Sold $5,892 $6,090 3% % of Sales 79.9% 79.9% -- SG&A $328 $306 (7%) % of Sales 4.4% 4.0% (0.4 pts) Restructuring and Other Charges $38 $2 (95%) Interest Expense $99
Slide 6: Volume & LME pricing offset input cost pressures
[Alcoa logo] Volume & LME pricing offset input cost pressures Income from Continuing Operations Excluding Restructuring millions $600 12 238 22 539 17 15 $500 361 $400 56 51 14 313 28 $300 17 $200 $100 $0 6
Slide 7: The industry is facing significant input cost escalation
[Alcoa logo] The industry is facing significant input cost escalation Caustic Soda (per dmt) Calcined Coke (per mt) Ocean Freight (Baltic Dry Index) $547 $342 8,557 67% 35% 61% $253 $328 5,310 1H 07 1H 08 1H 07 1H 08 1H 07 1H 08 Source: CMAI Source: PACE Source: Bloomberg Natural Gas (US Henry Hub p
Slide 8: Alumina
[Alcoa logo] Alumina nd nd 2 Quarter Highlights 2 Quarter Business Conditions 2Q 07 1Q 08 2Q 08 Higher LME pricing Production (kmt) 3,799 3,870 3,820 rd Net income impact of Western Australia 3 Party Shipments (kmt) 1,990 1,995 1,913 gas disruption was approximately $17m rd 3 Party Revenue ($ millio
Slide 9: Primary Metals
[Alcoa logo] Primary Metals nd nd 2 Quarter Highlights 2 Quarter Business Conditions 2Q 07 1Q 08 2Q 08 Higher realized pricing sequentially Production (kmt) 901 995 1,030 rd Record quarterly production 3 Party Shipments (kmt) 565 665 750 rd 3 Party Revenue ($ million) 1,746 1,877 2,437 Iceland runni
Slide 10: Flat-Rolled Products
[Alcoa logo] Flat-Rolled Products nd 2 Quarter Business Conditions ATOI ($ million) Weak end markets in North America & 2Q 07 1Q 08 2Q 08 Europe Global Rolled Products, Higher costs for magnesium & 106 73 74 exc Russia & China transportation Hard Alloy Extrusions 8 8 7 Productivity gains in North Am
Slide 11: Engineered Products and Solutions
[Alcoa logo] Engineered Products and Solutions nd ATOI ($ million) 2 Quarter Business Conditions 2Q 07 1Q 08 2Q 08 Record quarterly revenue & ATOI AFL, Auto Castings & Productivity improvements continue (7) (5) (9) Structures Volume improvements in aerospace, Investment Castings, 118 136 155 IGT, co
Slide 12: Strong cash generation driven by working capital improvements
[Alcoa logo] Strong cash generation driven by working capital improvements In Millions 2Q 07 1Q 08 2Q 08 Net Income $715 $303 $546 DD&A 317 319 321 Change in Working Capital 278 (467) 234 Other Adjustments 80 (424) (46) Pension Contributions (41) (19) (48) Cash From Operating Activities $1,349 $(288
Slide 13: Share repurchase program reaches 10%
[Alcoa logo] Share repurchase program reaches 10% Timeline Overview Based on 870m Shares Outstanding – 10% repurchase As of January 19, 2007 program authorized January 2007 25% Repurchase Program Authorized 10% Repurchased as of 2Q 08 – Expanded 25% 86m repurchase program authorized October 2007 131
Slide 14: Klaus Kleinfeld, President and Chief Executive Officer
Klaus Kleinfeld [Alcoa logo] President and Chief Executive Officer
Slide 15: Global growth expected despite US weakness
[Alcoa logo] Global growth expected despite US weakness Growth by Industry & Geography 2008 vs. 2007 Project +7.9% Global Aluminum Growth 15
Slide 16: Aluminum combines unique characteristics…
[Alcoa logo] Aluminum combines unique characteristics… Light Weight Relative High Strength Price Recyclable Durable Highly Conductive Malleable Non-Corrosive 16
Slide 17: …that create additional demand
[Alcoa logo] …that create additional demand Transportation Packaging Light Weight / Fuel Efficient Recyclable Non-Corrosive / Durable Light Weight / Logistics Cost Reduction Defense Consumer Electronics Light Weight / Fuel Efficient Aesthetics / Consumer Appeal Durable & Strong Recyclable & Durable
Slide 18: Strong demand for aluminum will continue
[Alcoa logo] Strong demand for aluminum will continue World Aluminum Consumption (million metric tons) 67 E. Europe/ Mid East/ 6% CAGR 7.3 Africa Europe/ME/ Africa 10.6 W.Europe 6% CAGR 2.6 South 9.2 North Americas 38 5% 4.6 Rest of 8.6 Asia 8.2 4% 22 6% 1.3 2.8 6.7 Asia 5.6 1% 8% 0.8 5.2 29.1 China
Slide 19: Competition for energy has intensified
[Alcoa logo] Competition for energy has intensified Energy/Infrastructure curtailments due to substantially increased local demand • China • South Africa • New Zealand Natural gas has changed from stranded to mobile energy source Smelter delays – all energy source related • 750 kmt Sarawak in Malays
Slide 20: Well underway in securing growth
[Alcoa logo] Well underway in securing growth June 26 MOU Extended June 24 Cooperation Agreement Signed N. Iceland Massena Vietnam B. Comeau Sao Luis Vietnam Greenland Fjardaal Pinjarra Greenland Mosjoen Juruti Wagerup 3 Australia May 13 Surinam Parliament Agrees Execution & to Next Phase completion
Slide 21: An unmatched record in sustainability
[Alcoa logo] An unmatched record in sustainability 2008 YTD LWD .08 TRR 1.07 21
Slide 22: Cost pressures drive aluminum prices
[Alcoa logo] Cost pressures drive aluminum prices Refining Cash Cost Curve Movement Smelting Cash Cost Curve Movement (per mt) 2005 2007 Increase (per mt) 2005 2007 Increase th th 25 percentile $ 167 $ 210 26% 25 percentile $ 1,281 $ 1,666 30% th th 50 percentile $ 196 $ 255 30% 50 percentile $ 1,49
Slide 23: Driving Performance Through Three Strategic Priorities
[Alcoa logo] Driving Performance Through Three Strategic Priorities Alcoa’s Three Strategic Priorities Profitable Growth Alcoa Advantage in every business creating value for all businesses Business Programs • Talent that define: • Technology • 3-year aspirations • Customer Intimacy • Priority levers
Slide 24: William Christopher, Group President - Engineered Products & Solutions
William Christopher [Alcoa logo] Executive Vice-President Group President - Engineered Products & Solutions
Slide 25: Diversified industrial products portfolio with leading market positions
[Alcoa logo] Diversified industrial products portfolio with leading market positions Fastening Power & Wheel & Building & Electrical & Systems Propulsion Transportation Construction Electronic Products Systems Solutions 2007 Sales (in billions) $1.2 $2.0 $0.9 $1.1 $1.5 Market Positions • #1 in Speci
Slide 26: A track record of profitable growth and productivity gains
[Alcoa logo] A track record of profitable growth and productivity gains Sales (in billions) ATOI (in millions) Return on Capital $382 8% p.a. 28% p.a. $6.7 Cost of $5.7 $232 capital 37% p.a. Source: CMAI 2005 2007 2005 2007 2005 2007 $850m of organic growth Productivity gains Portfolio management vi
Slide 27: Trend of record earnings and returns extends to 2008
[Alcoa logo] Trend of record earnings and returns extends to 2008 Sales (in billions) ATOI (in millions) Return on Capital 6% 30% 28% Cost of $3.4 $3.6 $295 capital $224 1H 07 1H 08 1H 07 1H 08 1H 07 1H 08 Strong market Productivity improvements Cost efficient capacity positions in accelerating expa
Slide 28: Driving Performance Through Three Strategic Priorities
[Alcoa logo] Driving Performance Through Three Strategic Priorities Alcoa’s Three Strategic Priorities Profitable Growth Alcoa Advantage in every business creating value for all businesses Business Programs • Talent that define: • Technology • 3-year aspirations • Customer Intimacy • Priority levers
Slide 29: Strong market demand provides significant growth opportunities
[Alcoa logo] Strong market demand provides significant growth opportunities Global Large Aircraft Deliveries Global Heavy Truck Production Global Non-Residential Structure (in thousands) Spend (in billions) 8% p.a. 8% p.a. 10% p.a. 1,065 1,820 $2,693 888 1,575 $1,887 575 975 $1,244 2003 2007 2011(F)
Slide 30: Energy infrastructure provides opportunities for profitable growth
[Alcoa logo] Energy infrastructure provides opportunities for profitable growth Global Heavy Duty Turbine Builds Global Rig Count 7% p.a. 15% p.a. 3,572 436 3,064 288 252 1,133 2003 2007 2011(F) 2003 2007 2011(F) Source: Howmet analysis Source: BHI, Spears – Investment Castings – Fasteners – Forging
Slide 31: New product portfolio will drive profitable growth
[Alcoa logo] New product portfolio will drive profitable growth Defense Industrial Gas Turbines Industrial Equipment • Joint Strike Fighter • High Gradient Single Crystal • Mold Plate • Joint Light Tactical Vehicle • LCD Vacuum Chambers Ground Transportation • AVDC Door System • EES Electronics Targ
Slide 32: Oil & Gas – Aluminum Drilling Systems: 50% advantage over steel
[Alcoa logo] Oil & Gas – Aluminum Drilling Systems: 50% advantage over steel Landscape of Exploration Drilling Equipment Land Barge Jackup Fixed Semi Drill Ship: Drill Ship: Rig Platform Submersible Deep Water (DW) Ultra Deep Water (UDW) 50 ft 1 mile 350 ft 1,000 ft 1,500 ft (1.6 km) <6,000 ft Steel
Slide 33: Joint Strike Fighter – Alcoa Advantage at work
[Alcoa logo] Joint Strike Fighter – Alcoa Advantage at work Sales of $1.4m/shipset $130m/year at full production • Strong customer relationships provide early design involvement • Leveraging Alcoa 7085 alloy technology in forgings for weight reductions • “Multi – Wall” investment casting engine airf
Slide 34: Disciplined execution will continue to drive productivity gains
[Alcoa logo] Disciplined execution will continue to drive productivity gains • Significant runway remains in ABS ATOI (in millions) productivity and capacity improvements • Expand and grow investments in 28% p.a. $382 Hungary, China, Russia and Mexico • New process investments in BCS, $232 fasteners
Slide 35: Unlocking the great value potential in Engineered Products & Solutions
[Alcoa logo] Unlocking the great value potential in Engineered Products & Solutions – Technically complex products & processes providing differentiation opportunities Foundation – Differentiated positions in attractive core markets • Aerospace & power generation components • Commercial transportatio
Slide 36: Driving Performance Through Three Strategic Priorities
[Alcoa logo] Driving Performance Through Three Strategic Priorities Alcoa’s Three Strategic Priorities Profitable Growth Alcoa Advantage in every business creating value for all businesses Business Programs • Talent that define: • Technology • 3-year aspirations • Customer Intimacy • Priority levers
Slide 37: For Additional Information, Contact: Greg Aschman
[Alcoa logo] For Additional Information, Contact: Greg Aschman Director, Investor Relations Alcoa 390 Park Avenue New York, N.Y. 10022-4608 Telephone: (212) 836-2674 Facsimile: (212) 836-2813 www.alcoa.com 37
Slide 38: [Alcoa logo]
[Alcoa logo] [Alcoa logo] 38
Slide 39: Appendix
[Alcoa logo] [Alcoa logo] APPENDIX 39
Slide 40: Adjusted Income Statement Items
[Alcoa logo] Adjusted Income Statement Items (in millions) Third-party Sales Quarter ended March 31, June 30 , 2008 2008 Alcoa $ 7,375 $ 7,620 Packaging and Consumer 497 19 Alcoa, excluding Packaging and Consumer $ 6,878 $ 7,601 After-tax Operating Income Quarter ended March 31, June 30 , 2008 2008
Slide 41: Reconciliation of Return on Capital
[Alcoa logo] Reconciliation of Return on Capital 2Q'08 1Q'08 4Q'07 3Q'07 2Q'07 1Q'07 Bloomberg Bloomberg Bloomberg Bloomberg Bloomberg Bloomberg (In Millions) Method Method Method Method Method Method Net income $2,036 $2,205 $2,564 $2,291 $2,273 $2,302 Minority interests $277 $317 $365 $399 $432 $4
Slide 42: Reconciliation of Adjusted Return on Capital
[Alcoa logo] Reconciliation of Adjusted Return on Capital 2Q'08 1Q'08 4Q'07 3Q'07 2Q'07 1Q'07 Bloomberg Bloomberg Bloomberg Bloomberg Bloomberg Bloomberg (In Millions) Method Method Method Method Method Method Numerator (sum total) $2,580 $2,788 $3,191 $2,936 $2,975 $3,029 Russia, Bohai, and Kunshan
Slide 43: Reconciliation of Adjusted Income
[Alcoa logo] Reconciliation of Adjusted Income (in millions) Quarter ended 1Q08 2Q08 Net income $ 303 $ 546 Loss from discontinued operations – – Income from continuing operations 303 546 Discrete tax items 28 (9) Restructuring and other charges 30 2 Income from continuing operations – excluding res
Slide 44: Days of Working Capital
[Alcoa logo] Days of Working Capital Quarter ended June 30, March 31, June 30, (in millions) 2007 (a) 2008 2008 Receivables from customers, less allowances $ 2,991 $ 3,048 $ 3,063 Add: Inventories 3,216 3,679 3,813 Less: Accounts payable, trade 2,388 2,895 3,121 Working Capital $ 3,819 $ 3,832 $ 3,7
Slide 45: Reconciliation of ATOI to Consolidated Net Income
[Alcoa logo] Reconciliation of ATOI to Consolidated Net Income (in millions) 1Q07 2Q07 3Q07 4Q07 2007 1Q08 2Q08 Total segment ATOI $ 948 $ 991 $ 678 $ 518 $ 3,135 $ 666 $ 830 Unallocated amounts (net of tax): Impact of LIFO (27) (16) 10 9 (24) (31) (44) Interest income 11 9 10 10 40 9 12 Interest ex
Slide 46: Engineered Products & Solutions Segment Realignment Summary
[Alcoa logo] Engineered Products & Solutions Segment Realignment Summary EPS SEGMENT RESTATED SEGMENT INFO - 2005 ($ in millions, shipments in thousands of metric tons) ENGINEERED PRODUCTS AND SOLUTIONS SEGMENT 2005 Third-Party Shipments, as previously reported 145 Add: Building and construction sys