Slide 1: Second Quarter 2007 Analyst Conference
[Alcoa logo] July 9, 2007 nd Quarter 2007 Analyst Conference Exhibit 99.2
Slide 2: Forward Looking Statements
2 Forward Looking Statements The information discussed on this call contains forward-looking statements that involve future events and known and unknown risks and uncertainties, including current expectations regarding Alcoa’s future performance and the potential benefits of the combination of Alcoa
Slide 3: Chuck McLane, Vice President and Chief Financial Officer
[Alcoa logo] Vice President and Chief Financial Officer Chuck McLane
Slide 4: Second Quarter 2007 Financial Overview
4 nd Quarter 2007 Financial Overview – Income from continuing operations of $716m or $0.81 per share – Revenues of $8.1b – Cash from operations of $1.35b – Debt-to-cap at 29.4% – Trailing four quarters ROC of 11.8%
Slide 5: Second Quarter 2007 Financial Overview
5 nd Quarter 2007 Financial Overview In Millions 1Q'07 2Q'07 Change Sales $7,908 $8,066 $158 Cost of Goods Sold $6,007 $6,178 $171 % of Sales 76.0% 76.6% 0.6 pts. SG&A $357 $367 $10 % of Sales 4.5% 4.5% 0.0 pts. Restructuring and Other Charges $26 ($57) ($83) Interest Expense $83 $86 $3 Other Income
Slide 6: Second Quarter vs. First Quarter Comparison
6 st Quarter vs. 2 nd Quarter Comparison
Slide 7: Alumina
7 2Q’07 1Q’07 2Q’06 1,990 1,877 2,108 3 Party Shipments (kmt) 3,799 3,655 3,746 Production (kmt) 3 Party Revenue ($MM) ATOI ($MM) Production 4% higher sequentially Higher prices Reduced impact from Guinea strike Stronger Australian dollar Alumina nd Quarter Highlights rd Quarter Outlook Prices to fo
Slide 8: Primary Metals
8 nd Quarter Highlights ATOI ($MM) 2,879 2,902 2,728 3 Party Price ($/MT) 1,746 1,633 1,589 3 Party Revenue ($MM) 2Q’07 1Q’07 2Q’06 3 Party Shipments (kmt) Production (kmt) Primary Metals rd Quarter Outlook nd Quarter Business Conditions Lower realized pricing sequentially Tennessee and Rockdale cur
Slide 9: Flat-Rolled Products
9 Increased volumes and favorable mix Productivity increases Improved Russia performance 2Q’07 1Q’07 2Q’06 ATOI ($MM) 2,344 2,275 2,115 rd Party Revenue ($MM) Flat-Rolled Products nd Quarter Highlights rd Quarter Outlook nd Quarter Business Conditions Scheduled outages and seasonal slowdown – Europe
Slide 10: Engineered Solutions
10 (5) (6) (6) Other (8) 1Q’07 Total Investment Castings, Forgings, Fasteners AFL, Auto Castings and Structures 2Q’06 (8) 2Q’07 North America Class 8 truck builds off 50% year over year – partially offset by continued share gains and new product sales Weakness continued in the North American automot
Slide 11: Extruded and End Products
11 Alcoa Custom Extruded Solutions, US Industrial and Other 2Q’07 1Q’07 2Q’06 Total Global Hard Alloy Extrusions, Building & Construction Systems and Russia Soft alloy extrusion joint venture completed Strong markets in Europe Improved productivity Extruded and End Products ATOI ($MM) nd Quarter Bus
Slide 12: Packaging & Consumer
12 (2) (1) (2) Other (3) 1Q’07 Total Reynolds Food Packaging and Flexible Packaging Closure Systems and Consumer Products (1) 2Q’06 (1) 2Q’07 Packaging & Consumer ATOI ($MM) nd Quarter Business Conditions rd Quarter Outlook Benefits of the prior year restructuring program and productivity improvemen
Slide 13: Second Quarter 2007 Cash Flow Review
13 nd Quarter 2007 Cash Flow Review $ In Millions 2Q'06 2Q'07 Net Income $744 $715 DD&A Change in Working Capital (399) Other Adjustments (116) Pension Contributions (25) (41) Cash From Operating Activities 1,349 Dividends to Shareholders (131) (149) Change in Debt Dividends to Minority Interests (8
Slide 14: Strong Performance Trends
14 Strong Performance Trends
Slide 15: Performance targets
ROC Exceed cost of capital Cash from Operations Exceed capital expenditures Volume/Mix/Productivity Exceed cost inflation Exceed 2006 in every EBITDA Margins downstream segment Debt to Capital Not to exceed 30% — 35% Capital Expenditures $3.0 — $3.2 Billion AEE eee
Slide 16: Alain J.P. Belda, Chairman and Chief Executive Officer
|| Alain J.P. Belda Chairman and Chief Executive Officer
Slide 17: Safety: lost work day and recordable rates
SPP PP MPH PH HPA SAP OS SAH HK HGS ‘Mi Lost Work Day Rate ill Total Recordable Rate
Slide 18: Aluminum Consumption Growth Rates
18 Aluminum Consumption Growth Rates Source: Alcoa analysis
Slide 19: Supply / Demand Projections
19 Source: Alcoa analysis Supply / Demand Projections
Slide 20: Global Days of Consumption
20 Source: IAI and LME Global Days of Consumption
Slide 21: Financial Performance
Financial Performance Dividend Increase Record Revenue Record Earnings Record Cash fram Operations Downstream Performance Margin Improvement in All Downstream Businesses improvement in Russian Rolling Mills Upstream Growth Projects Pinjarra Refinery Expansion iceland Smelter Sao Luis Refinery Expans
Slide 22: Bloomberg ROC Trailing 12 Months
Bloomberg ROC Traling 12 Months Induding Growth Capex us Bloomberg ROC Tiailing 12 Months Excluding Growah Capex ae ie 19% age ASS RK NS TQH 2QMS GOS TORS 20H JOO kes TOE? 2097 Cash fom Operations $ Miioes ae 1325 $200 1086 ARES aQDE AAO TAGS AONE AOE OES OP 2007 4348 sto $800 $600 af sae $20
Slide 23: Alcan Offer Update
23 Alcan Offer Update – Synergies – Growth Opportunities – Commitment to Quebec and Canada – Regulatory Approvals
Slide 24: A Winning Strategic Combination
24 A Winning Strategic Combination – Creates the premier fully integrated aluminum company – Enhanced cash flow and $1 billion in annual synergies – Significant scale to compete in a changing environment – Optimized portfolio of upstream assets – Enhanced capacity for growth – Strong technology, ope
Slide 25: Tony Thene, Director, Investor Relations
25 Tony Thene Director, Investor Relations Alcoa 390 Park Avenue New York, N.Y. 10022-4608 Telephone: (212) 836-2674 Facsimile: (212) 836-2813 www.alcoa.com For Additional Information, Contact:
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Slide 27: Forward-Looking Statements
27 Forward-Looking Statements Certain statements and assumptions in this communication contain or are based on "forward-looking" information and involve risks and uncertainties. Forward-looking statements may be identified by their use of words like "anticipates," "believes," "estimates," "expects,"
Slide 28: Forward-Looking Statements
28 Forward-Looking Statements Additional risks, uncertainties and other factors affecting forward looking statements include, but are not limited to, the following: •Alcoa is, and the combined company will be, subject to cyclical fluctuations in London Metal Exchange primary aluminum prices, economi
Slide 29: Additional information on the Alcan offer
29 In connection with the offer by Alcoa to purchase all of the issued and outstanding common shares of Alcan (the “Offer”), Alcoa has filed with the Securities and Exchange Commission (the “SEC”) a registration statement on Form S-4 (the “Registration Statement”), which contains a prospectus relati
Slide 30: Appendix
30 APPENDIX
Slide 31: Reconciliation of ATOI to Consolidated Net Income
31 (1) Certain amounts for the first and second quarter of 2006 have been reclassified to Other so that this line reflects only the impact of LIFO. Presenting the Impact of LIFO as a separate line in the Reconciliation of ATOI started in the third quarter of 2006. Financial information for the first
Slide 32: Reconciliation of Return on Capital
Reconciliation of Return on Capital ~ 2007 = 1007S 406 3006 2008S 1006 «4S 3005 20051005 Bloomberg Bloomberg Bloomberg Bloomberg Bloomberg Bloomberg Bloomberg Bloomberg Bloomberg Bloomberg (In Millions) Method Method Method Method © Method © Method © Method © Method © Method © Method Net income $2,2
Slide 33: Reconciliation of Adjusted Return on Capital
Reconciliation of Adjusted Return on Cap roor = 1007-406 «3008-2006 «1064S 3005-005. 10105 Bloomberg Bloomberg Bloomberg Bloomberg Bloomberg Bloomberg Bloomberg Bloomberg Bloomberg Bloomberg (In Milions) Method Method Method Method Method © Method © Method © Method © Method © Method Numerator (sum t
Slide 34: Reconciliation of Income and EPS excluding special items
Reconciliation of Income and EPS, exe luding = oniCostsal\ = Net Income Diluted EPS Quarter ended Six months ended ‘Quarter ended Six months ended 2a06" 4907 2a07 2Q06" 2Q07 2Q06" 4Q07 2907 2Q06" 2Q07 Net income $744 $662 $75] $135 sis77| sos $075 $ost $154 $1.56 Loss from discontinued operations (5
Slide 35: Reconciliation of EBITDA Margin
35 Reconciliation of EBITDA Margin Year ended December 31, 2006 Six months ended June 30, 2007 Year ended December 31, 2006 Six months ended June 30, 2007 Year ended December 31, 2006 Six months ended June 30, 2007 Flat-Rolled Products Extruded and End Products Engineered Solutions After-tax operati
Slide 36: Reconciliation of EBITDA Margin – P&C
36 Reconciliation of EBITDA Margin – P&C Quarter ended June 30, 2006 Quarter ended June 30, 2007 Year ended December 31, 2006 Six months ended June 30, 2007 Packaging and Consumer: After-tax operating income (ATOI) (1) $ 37 $ 37 $ 95 $ 56 Add: Income taxes Less: Other income and (expenses), net (2)
Slide 37: Days of Working Capital
37 48.9 51.5 51.7 Days of Working Capital $ 8,066 $ 7,908 $ 7,797 Sales $ 4,335 $ 4,524 $ 4,427 Working Capital 2,668 2,570 2,536 Less: Accounts payable, trade 3,633 3,780 3,820 Add: Inventories $ 3,370 $ 3,314 $ 3,143 Receivables from customers, less allowances June 30, 2007 March 31, 2007 June 30,
Slide 38: Reconciliation of Sales
38 Reconciliation of Sales (a) This amount represents the sales for the month of June 2007 related to Alcoa’s soft alloy extrusions business that was contributed to the joint venture formed with Orkla ASA’s Sapa Group on June 1, 2007. (b) Management believes that this measure is meaningful to invest