Alcoa Corporation · NYSE:AA
Alcoa — Shareholder Meeting (May 2015)
32 slides from Alcoa's shareholder meeting presentation, May 1, 2015
Slide 1: Annual Meeting of Shareholders
Annual Meeting of Shareholders May 1, 2015 1
Slide 2: Safety Instructions
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Slide 3: Agenda
Agenda Welcome and Call Meeting to Order – Klaus Kleinfeld, Chairman and Chief Executive Officer Introduce Alcoa Directors Introduce Executive Council Items of Business – Audrey Strauss, Executive Vice President, Chief Legal Officer and Secretary Voting / Preliminary Results of Voting – Audrey S
Slide 4: Director Nominees
Director Nominees Kathryn S. Fuller L. Rafael Reif Chair, Smithsonian President, National Massachusetts Museum of Natural Institute of History Technology Director since 2002 Director since 2015 Ernesto Zedillo Patricia F. Russo Director, Yale Center for the Former CEO, Study of Globalization Alcatel
Slide 5: Directors
Directors Arthur D. Collins, Jr. Michael G. Morris Former Chairman and CEO Former Chairman and Medtronic, Inc. President and CEO Director since 2010 American Electric Power Company, Inc. Director since 2008 E. Stanley O'Neal Carol L. Roberts Former Chairman and Senior Vice President CEO and CFO Merr
Slide 6: Directors
Directors Klaus James W. Owens Kleinfeld Former Chairman and Chairman and CEO CEO Caterpillar Inc. Alcoa Inc. Director since 2005 Director since 2003 Sir Martin Sorrell Ratan N. Tata Founder, CEO and Director Chairman Emeritus WPP plc Tata Sons Limited Director since 2012 Director since 2007 6
Slide 7: Distinguished Service Judith M. Gueron
Distinguished Service Judith M. Gueron Lead Director since 2010 Director since 1988 7
Slide 8: Executive council
Executive council Libby Archell VP, Chief Communications Officer John Bergen VP, Corporate Projects Graeme Bottger EVP & President, Alcoa Global Business Services Daniel Cruise VP, Government Affairs and Business Development Leigh Ann Fisher Chief Financial Officer, Global Primary Products Ken Giaco
Slide 9: Items of Business
Items of Business Election of the Four Director Nominees to Serve for a Three-Year Term Expiring in 2018 Ratification of Appointment of PricewaterhouseCoopers LLP as the Company’s Independent Registered Public Accounting Firm for 2015 Advisory Vote to Approve Executive Compensation 9
Slide 10: Voting and Preliminary Results of Voting
Voting and Preliminary Results of Voting Ballots Opening of voting polls Closing of voting polls Preliminary results 10
Slide 11: Important Information
Important Information 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 thos
Slide 12: Important Information
Important Information Non-GAAP Financial Measures Some of the information included in this presentation is derived from Alcoa’s consolidated financial information but is not presented in Alcoa’s financial statements prepared in accordance with accounting principles generally accepted in the United S
Slide 13: Klaus Kleinfeld
Klaus Kleinfeld Chairman and Chief Executive Officer Annual Meeting of Shareholders May 1, 2015 13
Slide 14: Heightening Efforts on Safety
Heightening Efforts on Safety Alcoa Safety Statistics and Action Plans Safety Performance Aggressive Action Plans to Eliminate Fatalities Incident Existing Programs/Tools Rate 10.0 9.05 8.0 6.0 4.0 2.72 Redoubling Efforts 2.0 New Hazard Recognition Tools 0.85 0.0 0.22 Find It, Fix It, Share It P
Slide 15: Alcoa Delivers on its Commitments: 6th Straight Year Achieving Targets
Alcoa Delivers on its Commitments: 6th Straight Year Achieving Targets Examples of Operational and Financial Execution and 2014 Performance Multi-Year Successful Execution Track Record (2009-2014) 2014 Performance Operating Tripled $7.9B of Productivity1 Earnings3 Year-on-Year Operational 9 Days
Slide 16: Transformation Focus on Driving Shareholder Returns for the Near to Long-term
Transformation Focus on Driving Shareholder Returns for the Near to Long-term Alcoa Relative TSR Performance vs. Indices “The company has benefited from a significant 85% restructuring of its businesses producing basic aluminium commodities… It has shifted its focus towards higher-value components,
Slide 17: Alcoa Transformation – Creating Compelling Sustainable Shareholder Value
Alcoa Transformation – Creating Compelling Sustainable Shareholder Value Building a Lightweight Multi-Material Creating a Globally Competitive Innovation Powerhouse Commodity Business Increasing share in exciting Increasing competitiveness, growth markets mitigating downside risk (e.g., aerospac
Slide 18: Commodity Strategy Yielding Positive Results
Commodity Strategy Yielding Positive Results Commodity Business Metrics: 2010 and 2014 Actual, 2016 Targets, 2015 12-Month Strategic Review, and 2010-2014 Actual Results Lower Cost and Enhance Revenue… …On Track 5% Global Alumina Cost Curve API/spot1 % EBITDA/MT points lower on Alumina 30th 2015: $7
Slide 19: Value-Add Growth Driving Strong Results
Value-Add Growth Driving Strong Results Key Value-Add Business Metrics: 2013 Actual, 2016 Targets and 2010-2014 Actual Results Grow from Innovation and Share Gains… …On Track EBITDA Margin Record Downstream Revenue: +$2.8B High $8.5B1 2016 Target: 21.5% 21.9% $5.7B 19.1% EBITDA margin exceeding 16.8
Slide 20: Organic and Inorganic Growth Expands Higher Value-Add Portfolio
Organic and Inorganic Growth Expands Higher Value-Add Portfolio Summary of Key Innovations, Growth Projects, and Inorganic Investments Organic Growth through Innovation Inorganic Growth in Robust Aerospace Market Automotive Building & Construction Alcoa 951 Leading product portfolio across all OptiQ
Slide 21: Game Changing Innovation: Alcoa Invents Next-Gen Automotive Solutions
Game Changing Innovation: Alcoa Invents Next-Gen Automotive Solutions Micromill’s Innovation in Automotive Alloys, Value Proposition, and Development Progress Breakthrough Al Alloy + Casting Technology Stronger, Better, Faster: Win for the Customer and Alcoa 2x more formable, while 30% lighter Adv
Slide 22: Advancing each generation.
Advancing each generation. FY ALCOA
Slide 23: Advancing Each Generation; Alcoa's Transformation Continues
Advancing Each Generation; Alcoa’s Transformation Continues Invented Aluminum Aluminum Applications & Multi-Material Globalization Solutions 23
Slide 24: Reconciliations
RECONCILIATIONS 24
Slide 25: Days Working Capital
Days Working Capital ($ in millions) Quarter ended 31-Mar-12 30-Jun-12 30-Sep-12 31-Dec-12 31-Mar-13 30-Jun-13 30-Sep-13 31-Dec-13 31-Mar-14 30-Jun-14 30-Sep-14 31-Dec-14 Receivables from customers, less allowances $1,709 $1,650 $1,600 $1,573 $1,704 $1,483 $1,427 $1,383 $1,391 $1,401 $1,526 $1,513 A
Slide 26: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow Year ended (in millions) December 31, December 31, December 31, December 31, December 31, December 31, Total 2009 2010 2011 2012 2013 2014 2009-2014 Cash from $1,365 $2,261 $2,193 $1,497 $1,578 $1,674 $10,568 operations Capital expenditures (1,622) (1,015) (1,287) (1
Slide 27: Reconciliation of Adjusted Income
Reconciliation of Adjusted Income (in millions, except per- Income Diluted EPS share amounts) Year ended Year ended December 31, December 31, December 31, December 31, 2013 2014 2013 2014 Net (loss) income attributable to Alcoa $(2,285) $268 $(2.14) $0.21 Restructuring and other charges 585 703 Disc
Slide 28: Reconciliation of Alumina Adjusted EBITDA
Reconciliation of Alumina Adjusted EBITDA ($ in millions, except per metric ton amounts) 2010 2011 2012 2013 2014 After-tax operating income (ATOI) $301 $607 $90 $259 $370 Add: Depreciation, depletion, and amortization 406 444 455 426 387 Equity (income) loss (10) (25) (5) 4 29 Income taxes 60 179 (
Slide 29: Reconciliation of Primary Metals Adjusted EBITDA
Reconciliation of Primary Metals Adjusted EBITDA ($ in millions, except per metric ton amounts) 2010 2011 2012 2013 2014 After-tax operating income (ATOI) $488 $481 $309 $(20) $594 Add: Depreciation, depletion, and amortization 571 556 532 526 494 Equity (income) loss (1) 7 27 51 34 Income taxes 96
Slide 30: Reconciliation of Engineered Products and Solutions Adjusted EBITDA
Reconciliation of Engineered Products and Solutions Adjusted EBITDA ($ in millions) 2010 2011 2012 2013 2014 After-tax operating income (ATOI) $419 $537 $612 $726 $767 Add: Depreciation, depletion, and amortization 154 158 158 159 173 Equity loss (income) (2) (1) – – – Income taxes 198 258 297 348 3
Slide 31: Reconciliation of Global Rolled Products Adjusted EBITDA
Reconciliation of Global Rolled Products Adjusted EBITDA ($ in millions, except per metric ton amounts) 2010* 2011 2012 2013 2014 After-tax operating income (ATOI) $241 $260 $346 $252 $312 Add: Depreciation, depletion, and amortization 238 237 229 226 235 Equity loss – 3 6 13 27 Income taxes 103 98
Slide 32: Advancing each generation.
Advancing each generation. FY ALCOA