Slide 1: 2nd Quarter 2011 Earnings Conference
Exhibit 99.2 2nd Quarter 2011 Earnings Conference July 11, 2011
Slide 2: Cautionary Statement
Cautionary Statement Forward-Looking Statements This presentation contains statements that relate to future events and expectations and as such constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those c
Slide 3: Chuck McLane, Executive Vice President and Chief Financial Officer
Chuck McLane Executive Vice President and Chief Financial Officer
Slide 4: Q2 2011 – Giving A Success Story Its Due
Q2 2011 – Giving A Success Story Its Due YOY Sequential $ Millions (except per share and /MT amounts) 2Q’10 1Q’11 2Q’11 Change Change Alumina rd 3 Party Sales $701 $810 $926 32% 14% Record ATOI $94 $142 $186 98% 31% Adjusted EBITDA/MT $61 $71 $81 33% 14% Primary Metals rd 3 Party Sales $1,710 $1,980
Slide 5: 2nd Quarter 2011 Financial Highlights
2 nd Quarter 2011 Financial Highlights Income from Continuing Operations of $326 million, or $0.28 per share; Excluding impact of restructuring and other special items, income from continuing operations of $364 million, or $0.32 per share, up 14% sequentially and up 146% from second quarter 2010 Rev
Slide 6: Income Statement Summary
Income Statement Summary YOY Sequential $ Millions (except per share amounts) 2Q’10 1Q’11 2Q’11 Change Change Sales $5,187 $5,958 $6,585 $1,398 $627 Cost of Goods Sold $4,210 $4,715 $5,247 $1,037 $532 COGS % Sales 81.2% 79.1% 79.7% (1.5 % pts.) 0.6 % pts. Selling, General Administrative, Other $208
Slide 7: Restructuring and Other Special Items
Restructuring and Other Special Items $ Millions (except per share amounts) 2Q’10 1Q’11 2Q’11 Income from Continuing Operations $137 $309 $326 Income Per Diluted Share $0.13 $0.27 $0.28 Restructuring Related ($20) ($5) ($16) Acquisition costs - ($8) - Discrete Tax Items $16 - - Mark-to-Market Deriva
Slide 8: 2nd Quarter 2011 vs. 1st Quarter 2011 Earnings Bridge
nd st 2 Quarter 2011 vs. 1 Quarter 2011 Earnings Bridge Income from Continuing Operations excluding Restructuring & Other Special Items ($ millions) $15 $26 $43 $72 $40 $41 $20 $14 $364 $317 +$32 +$87 -$72 1Q11 LME Currency Volume Restarts Productivity Energy Raw Other 2Q11 Materials See appendix fo
Slide 9: Alumina Segment Results and Outlook
Alumina Segment Results and Outlook nd nd 2 Quarter Results 2 Quarter Business Highlights Record quarterly production, shipments and 2Q 10 1Q 11 2Q 11 revenues Production (kmt) 3,890 4,024 4,144 Realized third-partyalumina price up 7% rd Continued improvement in Adjusted EBITDA/MT, 3 Party Shipments
Slide 10: Alumina Segment Cost Structure and Sensitivity
Alumina Segment Cost Structure and Sensitivity Refining Cost Structure Input Cost Inventory Pricing Annual ATOI flow convention Sensitivity Fuel oil $4m per 1 – 2 months Prior month $1/bbl $16m per Natural gas N/A Spot4 $1/GJ4 Caustic Spot & semi- $9m per 3 - 6 months soda annual $10/DMT Index Price
Slide 11: Primary Metals
Primary Metals nd nd 2 Quarter Results 2 Quarter Business Highlights 2Q 10 1Q 11 2Q 11 Production up 5% driven by U.S. restarts Realized pricing up 6% sequentially Production (kmt) 893 904 945 Adjusted EBITDA/MT of $422, $32 better than 10 rd 3 Party Shipments (kmt) 699 698 724 -year average rd 3 Pa
Slide 12: Primary Metals Segment Cost Structure and Sensitivity
Primary Metals Segment Cost Structure and Sensitivity Smelting Cost Structure Annual Input Inventory Pricing ATOI Cost flow convention Sensitivity Spot, quarterly & $9m per Coke 1 - 2 months semi-annual $10/MT Pitch 1 - 2 months Spot, quarterly & $2.5m per semi-annual $10/MT Index Prices Aluminum $
Slide 13: Flat-Rolled Products
Flat-Rolled Products nd 2nd Quarter Results 2 Quarter Business Highlights ATOI $ Millions 2Q 10 1Q 11 2Q 11 Record ATOI, Adjusted EBITDA and adjusted EBITDA/MT, led by volume increases Flat-Rolled Products, 71 84 86 excl Russia, China & Other Significant improvements in Russia and China on top-line,
Slide 14: Engineered Products and Solutions
Engineered Products and Solutions nd nd 2 Quarter Results 2 Quarter Business Highlights $ Millions 2Q 10 1Q 11 2Q 11 22% revenue growth from Q2 2010, supported by rising volumes 3 rd Party Revenue 1,122 1,247 1,370 15% sequential improvement in ATOI, highest since Q2 2008 ATOI 107 130 149 Record Adj
Slide 15: 2nd Quarter 2011 Cash Flow Overview
nd 2 Quarter 2011 Cash Flow Overview ($ Millions) 2Q’10 1Q’11 2Q’11 Net Income $170 $366 $377 DD&A $364 $361 $375 2Q’11 FCF $526 million Change in Working Capital ($422) ($646) ($110) Pension Contributions ($22) ($31) ($72) Taxes / Other Adjustments $210 ($286) $228 $1.3 billion Cash from Operations
Slide 16: Sustainable Reductions in Days Working Capital
Sustainable Reductions in Days Working Capital Sustained 82 historically low days working capital 67 68 performance 62 59 50 49 47 47 43 39 37 29 29 25 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2009 2010 2011 2009 2010 2011 2009 2010 2011 2009 2010 2011 2009 2010 2011 Alumina Primary FRP EPS Alco
Slide 17: Meeting Our 2011 Goals
Meeting Our 2011 Goals 2011 Cash Sustainability Operational Targets and Actual Performance Sustaining Capital Growth Capital Ma’aden Invest Debt-to-cap Free Cash Flow $ Millions $ Millions $ Millions % $ Millions $1,000 34.9% 35.0% $570 $1,246 $500 32.6% $445 $400 $318 30.0% $197 $158 $152 $86 $0 20
Slide 18: Klaus Kleinfeld, Chairman and Chief Executive Officer
Klaus Kleinfeld Chairman and Chief Executive Officer 18
Slide 19: Market Conditions in 2011 Continue Strong
Market Conditions in 2011 Continue Strong Alcoa End Markets: Current Assessment of 2011 vs. 2010 Conditions 7% sales growth 8%-11% 1%-3% 5%-8% 4%-8% sales growth sales growth sales growth sales growth 60%-65% 26%-31% 0%-3% 7%-12% sales growth sales growth sales growth sales growth 2%-3% 4%-5% 15%-20
Slide 20: End Market Developments Support Strong Demand Growth
End Market Developments Support Strong Demand Growth 2011 Projected Primary Aluminum Consumption by Region (in mmt) Russia 1.0 6% 10% Brazil 1.1 16% 10% India 14% 15% *Other 7% 17% Asia w/o China 10% 15% North America 6% 6% 2010 Global Demand Growth Rate: 13% Europe 4% 4% 2011 Global Demand Growth R
Slide 21: Inventories Flat Sequentially, but Higher Regional Premiums
Inventories Flat Sequentially, but Higher Regional Premiums Inventories 7 days Lower Year-on-Year Regional Premiums Continue Upwards 56 days of consumption $215 /MT Global Inventories Flat vs. 1Q’11 LME at 38 days $121 /MT $187 /MT Non-LME at 18 days Source: Alcoa estimates, LME, SHFE, IAI, Marubeni
Slide 22: 2011 Primary Aluminum Surplus Tightens to 115 kmt
2011 Primary Aluminum Surplus Tightens to 115 kmt 2011E Aluminum Supply / Demand Balance (in kmt) China Western World Deficit Surplus Production Demand Demand Production Western China World Annualized Production (May 2011) 18,144 Annualized Production (May 2011) 25,515 Restarted and Expanded Capacit
Slide 23: China: Recent Data Supports our 2011 Forecast
China: Recent Data Supports our 2011 Forecast China Visible Stock (kmt) Key Issues for Chinese Production Producers are challenged by cost pressures and inefficiencies Smelting: – 45% of smelters are in the top quartile of the cost curve 50% reduction – 20% use outdated and inefficient technologies
Slide 24: 2011 Global Alumina Balance Remains at Equilibrium
2011 Global Alumina Balance Remains at Equilibrium 2011E Alumina Supply / Demand Balance (in kmt) Balanced Production Demand China Western World 2011 Annualized Production 34,100 2011 Annualized Production 53,700 Imports from Western World 1,600 Exports to China (1,600) Supply 35,700 Supply 52,100 D
Slide 25: Alumina: Improving Performance from Strong Portfolio
Alumina: Improving Performance from Strong Portfolio 2015 Cost Curve Targets Adjusted EBITDA per Metric Ton Alumina Cost Curve Adjusted EBITDA/MT LME 10 Yr Average ~ $66/MT Alcoa Alcoa end 2015 end 2010 th 23 rd 30 Percentile Percentile th 25th 50th 75 percentile percentile percentile Cumulative Pro
Slide 26: Aluminum: Strong Performance Despite Stiff Headwinds
Aluminum: Strong Performance Despite Stiff Headwinds Adjusted EBITDA per Metric Ton Adjusted EBITDA/MT LME 10 YR Average ~ $390/MT 2015 Cost Curve Targets Aluminum Cost Curve Global Capacity: 4,500 kmt per year – Driving down the cost curve – Ma’aden Alcoa Project, lowest cost smelter online in 2013
Slide 27: Ma'aden Alcoa Project Progresses On Schedule and Budget
Ma’aden Alcoa Project Progresses On Schedule and Budget Potlines Port Rolling Mill Ground Breaking Paste Plant First Locomotive Rolling Mill Earth Works 27
Slide 28: Flat Rolled Products: Strong Top- and Bottom-Line Growth
Flat Rolled Products: Strong Top- and Bottom-Line Growth rd Adjusted EBITDA & Adjusted EBITDA Margin 2011 YTD 3 Party Sales by Market Adjusted EBITDA $Millions 541 495 479 531 620 536 498 254 224 551 173 193 Adjusted EBITDA % Sales 85% Utilization Leveraging our strategic asset base Record Adjusted
Slide 29: Engineered Products: Continued Growth in Our Margins
Engineered Products: Continued Growth in Our Margins rd Adjusted EBITDA & Adjusted EBITDA Margin 2011 YTD 3 Party Sales by Market Adjusted EBITDA $Millions 436 287 356 495 536 676 783 922 630 762 229 261 76% Utilization 68% Utilization Record Adjusted EBITDA Margins Strong Platform for Profitable Gr
Slide 30: Miracle Metal + Alcoa's Innovations = Strong Growth for Alcoa
Miracle Metal + Alcoa’s Innovations = Strong Growth for Alcoa Aluminum truck wheels are better… Alcoa’s innovations go beyond… Fuel Efficiency & Cargo Capacity +3% 1,350 pounds saved per truck/trailer LvL ONE® Wheels Dura-Bright® Proprietary coating 5% lighter than Reduced Steel Aluminum 26 month al
Slide 31: Alcoa Takes Flight with Innovations in Aerospace
Alcoa Takes Flight with Innovations in Aerospace Technology: Re-Defining the Possible Transforming Technology into Orders Weight Savings Alcoa solutions are deployed in all of Airbus’ programs -10% Multi-year, ~$1 billion agreement with Airbus Carbon Alcoa First use of Alcoa’s Al/Li Alloy Plate 1 Fi
Slide 32: Q2: Sets a Successful Milestone
Q2: Sets a Successful Milestone Giving a Success Story its Due Meeting our Aggressive Targets Total Revenue (billion) GRP: $2.5b in Revenue Growth by 2013 ($b) – Aluminum demand Income from Continuing Ops* continues to grow at (million) 12% in 2011, end $3.4 to $6.6 markets remain $3.8 $8.8 11% $6.3
Slide 33: Alcoa can't wait
A That's why … Alcoa can't wait …for tomorrow
Slide 34: ALCOA
ALCOA
Slide 35: Additional Information
Additional Information Roy Harvey Director, Investor Relations A 390 Park Avenue New York, NY 10022-4608 Telephone: (212) 836-2674 www.alcoa.com 35
Slide 36: Annual Sensitivity Summary
Annual Sensitivity Summary LME Aluminum Annual Net Income Sensitivity +/- $100/ = +/ - $200 Million Currency Annual Net Income Sensitivity Australian $ +/- $10 million per 0.01 change in USD / AUD Brazilian $ +/- $ 3 million per 0.01 change in BRL / USD Euro € +/- $ 2 million per 0.01 change in USD
Slide 37: Revenue Change by Market
Revenue Change by Market Sequential Year-Over-Year 2Q’11 Third Party Revenue Change Change 6% 21% 5% 18% 12% 27% 16% 45% 9% 8% 8% 12% 13% 41% 19% 21% 14% 32% 8% 25% 37
Slide 38: Reconciliation of ATOI to Consolidated Net (Loss) Income Attributable to Alcoa
Reconciliation of ATOI to Consolidated Net (Loss) Income Attributable to Alcoa (in millions) 1Q10 2Q10 3Q10 4Q10 2010 1Q11 2Q11 Total segment ATOI $ 306 $ 381 $ 328 $ 409 $ 1,424 $ 555 $ 635 Unallocated amounts (net of tax): Impact of LIFO (14) (3) (2) 3 (16) (24) (27) Interest expense (77) (77) (91
Slide 39: Reconciliation of Adjusted Income
Reconciliation of Adjusted Income (in millions, except per- Income Diluted EPS share amounts) Quarter ended June 30, March 31, June 30, June 30, March 31, June 30, 2010 2011 2011 2010 2011 2011 Net income attributable to Alcoa $ 136 $ 308 $ 322 $ 0.13 $ 0.27 $ 0.28 Loss from discontinued operations
Slide 40: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow (in millions) Six months Quarter ended Year ended ended June 30, December 31, June 30, 2011 2010 2011 Cash provided from $ 798 $ 2,261 $ 562 operations Capital expenditures (272) (1,015) (476) Free cash flow $ 526 $ 1,246 $ 86 Free Cash Flow is a non-GAAP financial m
Slide 41: Reconciliation of Alcoa Adjusted EBITDA
Reconciliation of Alcoa Adjusted EBITDA ($ in millions) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2Q10 1Q11 2Q11 Net income (loss) attributable to Alcoa $ 908 $ 420 $ 938 $ 1,310 $ 1,233 $ 2,248 $ 2,564 $ (74) $ (1,151) $ 254 $ 136 $ 308 $ 322 Add: Net income attributable to noncontrolling i
Slide 42: Reconciliation of Alumina Adjusted EBITDA
Reconciliation of Alumina Adjusted EBITDA ($ in millions, except per 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2Q10 1Q11 2Q11 metric ton amounts) After-tax operating income (ATOI) $ 471 $ 315 $ 415 $ 632 $ 682 $ 1,050 $ 956 $ 727 $ 112 $ 301 $ 94 $ 142 $ 186 Add: Depreciation, depletion, and
Slide 43: Reconciliation of Primary Metals Adjusted EBITDA
Reconciliation of Primary Metals Adjusted EBITDA ($ in millions, except 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2Q10 1Q11 2Q11 per metric ton amounts) After-tax operating income (ATOI) $ 905 $ 650 $ 657 $ 808 $ 822 $ 1,760 $ 1,445 $ 931 $ (612) $ 488 $ 109 $ 202 $ 201 Add: Depreciation, de
Slide 44: Reconciliation of Flat-Rolled Products Adjusted EBITDA
Reconciliation of Flat-Rolled Products Adjusted EBITDA ($ in millions, 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2Q10 1Q11 2Q11 2011 except per metric Annualized ton amounts) After-tax operating income (ATOI) $ 253 $ 225 $ 222 $ 254 $ 278 $ 233 $ 178 $ (3) $ (49) $ 220 $ 71 $ 81 $ 99 $ 360 A
Slide 45: Reconciliation of Engineered Products and Solutions Adjusted EBITDA
Reconciliation of Engineered Products and Solutions Adjusted EBITDA ($ in millions) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2Q10 1Q11 2Q11 2011 Annualized After-tax operating income (ATOI) $ 189 $ 63 $ 124 $ 156 $ 271 $ 365 $ 435 $ 533 $ 315 $ 415 $ 107 $ 130 $ 149 $ 558 Add: Depreciation,
Slide 46: Reconciliation of Alcoa Net Debt
Reconciliation of Alcoa Net Debt (in millions) Quarter ended March 31, June 30, 2011 2011 Short-term borrowings $ 221 $ 65 Long-term debt due within one year 572 510 Long-term debt, less amount due within one year 8,501 8,773 Total debt 9,294 9,348 Less: Cash and cash equivalents 887 1,260 Net debt