Slide 1: 4th Quarter Earnings Conference
1 4th Quarter Earnings Conference January 9, 2014 [Alcoa logo] [Alcoa logo] Exhibit 99.2
Slide 2: Cautionary Statement
Cautionary Statement 2 Forward-Looking Statements This presentation contains statements that relate to future events and expectations and as such constitute forward-looking statements. Forward-looking statements include those containing such words as “anticipates,” “estimates,” “expects,” “forecasts
Slide 3: Putting Legacy Matters behind us, continuing Transformation
Putting Legacy Matters behind us, continuing Transformation Putting Legacy Matters behind us Repositioning the Company in the face of Headwinds 3 Non-cash Goodwill write-down ($1.7B) f or legacy acquisitions in smelting Discrete Tax items ($361M) Legacy Legal Matter ($243M) Capital projects write-of
Slide 4: William Oplinger
4 William Oplinger Executive Vice President and Chief Financial Officer January 9, 2014 [Alcoa logo] [Alcoa logo]
Slide 5: Income Statement Summary
Income Statement Summary See appendix for Adjusted Income reconciliation 5
Slide 6: Special Items
6 See appendix for Adjusted Income reconciliation Special Items
Slide 7: Market, volume, and cost headwinds lower earnings sequentially
Market, volume, and cost headwinds lower earnings sequentially 7 See appendix for Adjusted Income reconciliation 30 38 13 36 10 32 Net Income excluding Special Items ($ Millions) Market -$26 Performance -$6 Cost Headwinds -$48 Currency 3Q 13 4Q 13 Cost Increases / Other Raw Materials Energy Producti
Slide 8: 4th Quarter Cash Flow Overview
See appendix for Free Cash Flow and Days Working Capital reconciliations 4 th Quarter Cash Flow Overview 8 ($ Millions) 4Q12 3Q13 4Q13 Cash from Operations $933 $214 $920 Cash from Financing Activities ($712) ($93) ($65) Cash from Investing Activities $207 ($304) ($425) Net Income (Loss) $257 $44 ($
Slide 9: Engineered Products & Solutions year-over-year ATOI increase of 20%
Engineered Products & Solutions year-over-year ATOI increase of 20% Any reference in our presentations to EBITDA means adjusted EBITDA, for which we have provided calculations and reconciliations in the appendix. See appendix for Adjusted EBITDA reconciliation. * Prior period amounts have been revis
Slide 10: Global Rolled Products results
See appendix for Adjusted EBITDA reconciliation. * Prior period amounts have been revised to conform to the current period presentation. See appendix for additional information. Unfavorable volume and cost impact Global Rolled Products results 10
Slide 11: Strong Alumina performance offsets negative market impacts
Strong Alumina performance offsets negative market impacts 11
Slide 12: Continued Primary productivity gains offset sequential cost increases
Continued Primary productivity gains offset sequential cost increases 12
Slide 13: Robust demand continues, regional premiums responding
Robust demand continues, regional premiums responding 13
Slide 14: 2013 Full Year Results
14 2013 Full Year Results
Slide 15: Earnings rise 36% year-over-year despite $273M of market headwinds
Earnings rise 36% year-over-year despite $273M of market headwinds 15 See appendix for Adjusted Income reconciliation 57 172 445 507 753 Net Income excluding Special Items ($ Millions) Market -$273 Performance +$842 Cost Headwinds -$474 Price / Mix Volume Currency LME 2012 2013 Cost Increases / Othe
Slide 16: Continued strong productivity; $1.1 billion captured in 2013
Continued strong productivity; $1.1 billion captured in 2013 GPP: Combined Alumina and Primary Metals segments; GRP: Global Rolled Products; EPS: Engineered Products and Solutions *All figures are pretax and pre-minority interest. 2009/2010 represent net productivity; 2011-2013 represent gross produ
Slide 17: Achieved record low Days Working Capital
Achieved record low Days Working Capital See appendix for days working capital reconciliation 17
Slide 18: Strengthened our balance sheet; lowest year-end net debt since 2006
Strengthened our balance sheet; lowest year-end net debt since 2006 See appendix for Net Debt-to-Capital reconciliation * Excludes goodwill impairment and deferred tax valuation allowances recorded in fourth quarter 2013 18
Slide 19: Executed against targets to achieve Positive FCF in a tough environment
Executed against targets to achieve Positive FCF in a tough environment *Excludes goodwill impairment and deferred tax valuation allowances recorded in fourth quarter 2013 19
Slide 20: The right actions drive growth and operational performance in 2014
The right actions drive growth and operational performance in 2014 Deliver Operational Performance Invest in the Future; Actively Manage the Base Strengthen the Balance Sheet 20 2014 annual financial targets Drive Productivity Gains of $850M Process productivity Procurement savings Overhead cost red
Slide 21: Klaus Kleinfeld
21 Klaus Kleinfeld Chairman and Chief Executive Officer January 9, 2014 [Alcoa logo] [Alcoa logo]
Slide 22: Alcoa End Markets: Current Assessment of 2014 vs. 2013
Source: Alcoa analysis 2014 Market Conditions 22 North America China Global Europe 7% to 8% sales growth 2% to 3% sales growth 4% to 6% sales growth 8% to 12% airfoil market decline 6% to 10% prod growth 8% to 12% sales growth 7% to 9% sales growth 2% to 3% sales growth 2% to 3% sales decline -1% to
Slide 23: Repositioning working: Growing value-add and lowering cost base
Repositioning working: Growing value-add and lowering cost base CRU Cost Model, Alcoa Analysis. Any reference in our presentations to EBITDA means adjusted EBITDA, for which we have provided calculations and reconciliations in the appendix 23
Slide 24: Aluminum Wheels Lower Operating Cost vs. Steel
{( Aluminum Wheels Lower Operating Cost vs. Steel + 35% Lighter = Up to 5% lower fuel cost = No Rust, no Strip & Repaint = Up to 3% more Payload
Slide 25: Capitalizing on historic Auto industry shift to lightweight vehicles
Capitalizing on historic Auto industry shift to lightweight vehicles Sources: Consumer Federation of America (CFA) survey April 2013; Ducker Worldwide CAFE = Corporate Average Fuel Economy 25
Slide 26: Saudi Arabia JV construction progressing as planned
Phase 1 Phase 2 Saudi Arabia JV construction progressing as planned; world’s lowest cost 26 Smelter Rolling Mill Mine Refinery 77% complete 190kmt production in 2013 550kmt production in 2014 At full capacity in 2014 Lowest cost smelter 2% point reduction on the smelting cost curve First hot coil in
Slide 27: Repositioning accelerates with new three-year targets
Repositioning accelerates with new three-year targets CRU Cost Model, Alcoa Analysis. Any reference in our presentations to EBITDA means adjusted EBITDA, for which we have provided calculations and reconciliations in the appendix 27
Slide 28: The right actions drive growth and operational performance in 2014
The right actions drive growth and operational performance in 2014 Deliver Operational Performance Invest in the Future; Actively Manage the Base Strengthen the Balance Sheet 28 2014 annual financial targets Drive Productivity Gains of $850M Process productivity Procurement savings Overhead cost red
Slide 29: Repositioning gaining traction and creating value for the future
Repositioning gaining traction and creating value for the future Alcoa Advantage and Disciplined Execution drive profitable growth in 2014 Building out the value-add businesses while lowering cost base in the commodity businesses Putting legacy matters behind us 29
Slide 30: Advancing each generation.
Advancing each generation.
Slide 31: Additional Information
Additional Information 31 Kelly Pasterick Director, Investor Relations Alcoa 390 Park Avenue New York, NY 10022-4608 Telephone: (212) 836-2674 www.alcoa.com
Slide 32: Annual Sensitivity Summary
Annual Sensitivity Summary Currency Annual Net Income Sensitivity LME Aluminum Annual Net Income Sensitivity 32 +/- $100/MT = +/- $240 million Australian $ +/- $11 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
Slide 33: Revenue Change by Market
Revenue Change by Market 33 4Q’13 Third-Party Revenue Sequential Change Year-Over-Year Change 0% 1% (7%) (6%) (8%) 1% (14%) 13% (2%) 1% 4% 6% 2% 12% (13%) (8%) (9%) (17%) 4% (14%) 18% 3% 6% 6% 7% 2% 12% 2% 15% 29% Aerospace Automotive B&C Comm. Transport Industrial Products IGT Packaging Distributio
Slide 34: Reconciliation of ATOI to Consolidated Net Income (Loss) Attributable to Alcoa
Reconciliation of ATOI to Consolidated Net Income (Loss) Attributable to Alcoa 34 (in millions) 4Q12 2012 1Q13 2Q13 3Q13 4Q13 2013 Total segment ATOI* $ $ 1,357 $ $ $ $ 224 $ 1,217 Unallocated amounts (net of tax): Impact of LIFO (2) Interest expense (78) (319) (75) (76) (70) (73) (294) Noncontrolli
Slide 35: Reconciliation of Adjusted Income
Reconciliation of Adjusted Income 35
Slide 36: Reconciliation of Alcoa Adjusted EBITDA
Reconciliation of Alcoa Adjusted EBITDA
Slide 37: Reconciliation of Alumina Adjusted EBITDA
Reconciliation of Alumina Adjusted EBITDA 37
Slide 38: Reconciliation of Primary Metals Adjusted EBITDA
Reconciliation of Primary Metals Adjusted EBITDA 38
Slide 39: Reconciliation of Global Rolled Products Adjusted EBITDA
Reconciliation of Global Rolled Products Adjusted EBITDA 39
Slide 40: Reconciliation of Engineered Products and Solutions Adjusted EBITDA
Reconciliation of Engineered Products and Solutions Adjusted EBITDA 40 ($ in millions) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 4Q12 3Q13 4Q13 After-tax operating income (ATOI)* $ 126 $ 161 $ 276 $ 382 $ 423 $ 522 $ 311 $ 419 $ 537 $ 612 $ 726 $ 140 $ 192 $ 168 Add: Depreciation, deple
Slide 41: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow 41
Slide 42: Reconciliation of Free Cash Flow, con't
Reconciliation of Free Cash Flow, con’t 42
Slide 43: Days Working Capital
Days Working Capital 43
Slide 44: Reconciliation of Net Debt
Reconciliation of Net Debt 44
Slide 45: Reconciliation of Debt-to-Capital
Reconciliation of Debt-to-Capital 45
Slide 46: Composition of Upstream Production Costs
Composition of Upstream Production Costs Refining Cost Structure Smelting Cost Structure 46 Natural gas information corresponds to Point Comfort, as Australia is priced on a rolling 16 quarter average
Slide 47: 2014 global aluminum demand growth outlook remains strong
6.6 25.5 6.4 4.2 2.1 2.0 2.0 1.1 1.9 Source: Alcoa estimates, Brook Hunt, CRU, Harbor 2014 global aluminum demand growth outlook remains strong 47 1.0 10% 1% 5% 3% 7% 8% 8% 4% 5% 6% 2014E 52.8 mmt (1) Other includes Africa, E.Europe, Latin America ex Brazil, and Oceania 2014 Primary Aluminum Consump
Slide 48: Alumina moves to surplus in 2014; aluminum market balanced
48 Source: Alcoa analysis, Brook Hunt, CRU, CNIA, NBS, Chinese Customs Alumina moves to surplus in 2014; aluminum market balanced
Slide 49: Inventory is stable with LME cancelled warrants rising
Inventory is stable with LME cancelled warrants rising 49
Slide 50: Regional premiums move higher
Regional premiums move higher 50 Source: Monthly average of daily prices - Platts Metals Week