Slide 1: 3rd Quarter 2015 Earnings Conference
13rd Quarter Exhibit October [Alcoa logo] 99.2 Earnings Conference 8, 2015
Slide 2: Forward-Looking Statements
Forward-Looking Reform “seeks,” fact statements timing uncertainties, assurance and satisfied; separation additional aluminum exchange strengthening improving advanced acquisitions, outcome breaches; liquidity, 2014, future 2[Alcoa uncertainties areand events of logo] forward-looking Act “sees,” of
Slide 3: Important Information on Non-GAAP Financial Measures
rules. measures financial quantitative 3[Alcoa Important These logo] statements measures andInformation reconciliation non-GAAP management’s toprepared thefinancial (continued) most is available rationale indirectly accordance measures Non-GAAP for to comparable Alcoa the supplement with use without
Slide 4: Letter of Intent and Strengthening Portfolio
Klaus 54Chairman OctoberKleinfeld acquisitions and revenue, Gains: Launching Co: contract material Letter and Strengthening reconciliations. [Alcoa Attractive $508 of $287 logo] wins 8, Chief superalloy $153 Intent million 2015 Two and million Signed Executive Businesses Portfolio million with Stron
Slide 5: William Oplinger, Chief Financial Officer
Williamlogo] 6Executive [Alcoa October Oplinger 8, Vice 2015President and Chief Financial Officer
Slide 6: Income Statement Summary
e. A f ee 4 4 m William Oplinger Executive Vice President and Chief Financial Officer October 8, 2015
Slide 7: Income Statement and Special Items
See appendix $2,538 Selling,General $217 $0.02 7[Alcoa $66 ($0.10) logo] $2,180 ($143) for ($0.08) $1,901 Administrative, ($151) EBITDA Income ($637) Effective and($279) excl. Adjusted Other Tax Special Revenue Rate $243 Income Items 60.3% $224 $6,239 reconciliations $370 $261 26.6% $5,897 $250 $184
Slide 8: Special Items
Special 1) ($43) ($14) $109 8[Alcoa $See Millions, Net Restructuring ($5) appendix logo] Items Income ($22) except for SG&A/Interest perAdjusted and per-share Diluted OtherIncome Share amounts Charges/COGS Expense excl. reconciliation 3Q14 Special Corporate 2Q15 Corporate/ Items 3Q15 Mark-to-Market
Slide 9: Adjusted Net Income Bridge
Adjusted See Materials 9[Alcoa Netappendix Income logo] Earnings Pricefor excluding / Mix Adjusted Down -$144 Special on Income Productivity Pricing Items reconciliation Partly ($ Volume Millions) OffsetCurrency byMarket Productivity -$139 API -$19 Performance LME -$219+$61 3Q Cost 14 Headwinds -$18
Slide 10: Engineered Products and Solutions
1TheQuarter See EPS: 20.3% Industrial unfavorable gains, 3rd [Alcoa 10 appendix Record 3Q14 partially 4th logo] Gas Quarter amount Business RTI Revenue for Turbine offset purchase additional Year-over-Year has Highlights by up markets been currency 35% accounting information updated Year-Over-Year;
Slide 11: Transportation and Construction Solutions
TCS: 1The See 4th -$1 improvement Residential extrusions [Alcoa 11 Quarter Volume appendix 3Q14 Strong logo] Unfavorable Construction: amount Year-over-Year -$3 Productivity Productivity forCurrency additional has currency been uneven -$5 Offset gains Outlook information updated 3Q14 to by ATOI reco
Slide 12: Global Rolled Products
2[Alcoa 1The See and China shipments be ATOI 12 flat GRP: appendix 4Q15 3Q14 Results and Auto Sheet year-over-year, logo] Outlook expected packaging amount for $62 Sales additional $34 –has to Global Strong including be $13 been up$69 +133%; information Rolled 25% productivity updated -$21 $6M Expec
Slide 13: Alumina
Alumina: Q2’15 party excluding 320 [Alcoa 13 $337 Millions alumina Lower logo] 323 Best theATOI 3Q15 pricing impacts shipments YTD($Actual Profitability partially Millions) of on pricing and APIoffset 4Q15 62 or and Since 215 spot by currency Outlook 212 2007 favorable pricing 3rd3Q –Quarter for Alu
Slide 14: Primary Metals
Primary declines lag 701 Business [Alcoa 14 $to700 Millions LME logo] Metals: 3rd ~13% Highlights Production Party 3Q15 sequentially Pricing Shipments Actual 3rdlevel Pressures Quarter and Productivity similar (kmt) 4Q15 ATOI Drive 642 toOutlook Performance 3rd 630 Loss and quarter 615 cost – Primar
Slide 15: Base Business Days Working Capital
Base See 3Q14 from [Alcoa 15 4appendix days base Business 2Q14 logo] lower business 1Q14 for DWC Average days 4Q13 1 Improves day working 3Q13 Days higher2Q13 Working Year-over-Year, capital 1Q13 reconciliation Capital 4Q12Acquisitions since 1Q11Third 4Q10Quarter Add 3Q10 9 days 52010 days4lower day
Slide 16: Strong Cash Generation
Strong See Working Dividends Activities from 16 appendix Investing Cash Capital $2 toGeneration; $2 Shareholders for Activities ($2) ($411) FreeCash Cash $44 Cash ($281) from ($36) Flow $38 Balance Financing ($220) Pension ($55) reconciliation ($40) at$82 Expense $1.7 Activities Free Issuance Billio
Slide 17: Leverage
LTM =7,478 Leverage 7,622 [Alcoa 17 logo] last within twelve 8,789target 2Q15 months; range ($ Millions) See of appendix 2.25 to Net 2.75 for Debt 1,543 Net Cash Debt 1,939 Debt-to-LTM and 1,861 LTM1,437 EBITDA EBITDA 1,877reconciliations. 1,191 3.27 3.39 1,3112.87 1,739 Debt, 3Q15 Net9,277 Debt,7,5
Slide 18: Maintaining Control: 2015 Financial Targets
Maintaining See Actions [Alcoa 18 appendix logo] Control Our forSustaining 2015 EBITDA Financial reconciliation. Capital Targets of $725M Attain Target 2.25$500M to 2.75 Free Debt-to-EBITDA Cash Flow $849M Manage YTD: Return-Seeking $408M $389M Capital 2.44 2015 of $750M Annual Drive Financial Produ
Slide 19: Aluminum Market Fundamentals
6.5% Market Aluminum Global Continued See $175/MT Warrant peak; $1,992/MT Consumption Balance 0.6% 19 $0 appendix 2015E 1.3% -2 $100 Inventories Fundamentals Cancelled 2015E days Average Weakness and 762 $200 29.1 Demand YoY for (mmt), Alumina 326 6.7 $300 full 3Q15 Days Warrants atExpect 6.7 Annual
Slide 20: Klaus Kleinfeld, Chairman and CEO
Klaus Kleinfeld Chairman October 20 [Alcoa logo] 8,and 2015 Chief Executive Officer
Slide 21: Aerospace and Automotive Markets
Aerospace 2015; Commercial commitments +5.5% E.U. Production +2.1% YTD [Alcoa 21 1% and U.S. YTD; Cargo logo] to-2.1% Remains sales, Up: 3% Aircraft W. Demand, from China +2.8% YoY Eur inventory China Strong; continues segment Aug 1% YTD Dramatic to (a onand Steady 2% new (11.6M softening Growth to
Slide 22: Heavy Duty Truck and Packaging Markets
Heavy Source: W. China in and +10.4% Production: from [Alcoa 22 Western Eur Trailer end 8% Duty logo] Registrations Alcoa YTD, 2014 toEurope, N.A. +15.8% Truck 12% analysis. Registrations • Solid 9% •–partially Demand YTD to U.S.: asFundamentals: 11% Heavy of though Aug Strong, +20.7% E.U. offset de
Slide 23: Building and Construction, Gas Turbines
SolidChina Source: B&C -3% rolling YoY production fired [Alcoa 23 Jul; generation Commercial =average) logo] Building Alcoa Growth 4% growthat analysis to+19.7% •and moderated Architectural 6% B&C +6.1% construction. 4%Growth; YTD to Aug 6% since Jul Billings Global and Global driving 1Q14 End +6%sa
Slide 24: Completing the Separation Path
Completing SEC: Built to retained Path [Alcoa 24 theto for Securities tax-free logo] Successful by Success the Transformation nature Value-Add and Throughout Completion Exchange of theCompany transaction – the Creating Commission Will Cycle provide • Upstream •Two Timing: Effectiveness Premier Indus
Slide 25: Two Premier Companies
1) CRU BDMT Launching Upstream commercial value-add World’s with markets [Alcoa 25 operational logo] =analysis. largest, Committed Bone Business Robust Two transportation, Dry Strong low flexibility 2) margins Premier Metric to Mined cost disciplined Companies—Driving bauxite and Optimized Ton build
Slide 26: Value-Add Co: Premier Provider of Innovative Solutions
Value-Add Middle signif products in Bringing industrial Engineered forged [Alcoa 26 the automotive icant aluminum logo] East and breakthrough gas Co: customer Products and solutions turbine Premier North commercial & aerospace Vertically synergies airfoils Successfully Africa products Provider Faste
Slide 27: RTI Acquisition: Titanium Integration and Synergies
Alcoa productivity, MidstreamDownstream MACHINING supplier engine margin [Alcoa 27 1) Represents +to logo] Net RTI ofaircraft milled Synergies4: =$20M Integrated + Ti mid body products procurement Ingot and Alcoa Melting $100M Ti Supply downstream for Forging now airframe 30% (Ingot, savings, Soluti
Slide 28: Aero Fasteners and Vertical Tail Plane
Aero Fasteners: VTP: Leader high-growth performance Assembly application [Alcoa 28 vertical logo] in Innovation cost designs (e.g., intail reduction multi-material High plane A350, Custom Broadest Tech—Multi Multi-material A320neo) #1 solutions Global applications fastener Material—Customer and Lead
Slide 29: Automotive Growth
Automotive 1) FCA Operational with 100% [Alcoa 29 Indexed changing =Up Fiat logo] ~60% to Chrysler Tennessee Growth 3Q2014 market ~1.4xshifts Automobiles demands YTD Growing Online Rolling shipments. Fully Revenues auto GM Business ramped business = General ($M) to upsupplies Higher At YTD Motors ca
Slide 30: Micromill: HSS in Development
Micromill: HSS in Development more Gen complex [Alcoa 30 Q4Alloys =formable 2015 High logo] structures Disruptive Qualification Micromillmaterial Strength Progress and for 30% Steel. … F-150 Letter lighter agreements Material Al=Aluminum Use oftovs. Intent debut of –HSS Process Micromillmaterial inw
Slide 31: Upstream Co Updates
Upstream World’s Updates bauxite flexibility to [Alcoa 31 disciplined 1) CRU logo] miner largest ALUMINA Co: Optimized analysis. capital at Cost bauxite theCompetitive 19th ALUMINUM 2) allocation smelting Mined miner1 percentile1 in capacity Flexibility and Industry 2014, Key prudent onincluding (3.
Slide 32: World's Largest Bauxite and Alumina Refining Position
World’s 1) and export BDMT) Largest refineries 2016E [Alcoa 32 CRU Refining trial 21st logo] & and Most China through First bauxite Target Alcoa Overview Attractive imports Quartile 2032 -9% analysis, shipments 40%-60% points San and Alumina Bauxite Business Ciprian including cost from and Refiner o
Slide 33: Energy and Casting Overview
Energy 1) and used capacity products Value-Add [Alcoa 33 Alcoa Casting forlogo] and metal of has as portfolio ~1,550 % Casting—Profitability Overview anof production) equity total MWprovides shipments interest and Casthouses Sell Business profits inremaining 65% the Through shifting Updates majority
Slide 34: Primary Metals Financial Resilience
Primary 1) 2010 Building power reduction optimization $130M assets [Alcoa 34 Includes and Primary contract logo] Improvement Metals: Financial $462M $40—$45M energy Casting Metals (279 $110—$130M inassets, Resilience LTM kmt5) technology in 353 Procurement 2016 2015 smelting, 320 Optimized 33% Year
Slide 35: Managing Headwinds; Transformation on Course
Managing Transformation [Alcoa 35 logo] Headwinds; on Course Continues Portfolio on Path ResilientUpstream to Separation Portfolio Less Vulnerable to Downswings Managing Headwinds; Portfolio Resilient
Slide 36: Additional Information / Investor Relations
Nahla Vice 390 Alcoa New Telephone: Email: Additional www.alcoa.com [Alcoa 36 Park President, York, Azmy nahla.azmy@alcoa.com logo] Avenue Information NY (212)10022-4608 Investor 836-2674 Relations
Slide 37: Annual Net Income Sensitivity Summary
Annual Currency 0.01 $10/MT [Alcoa 37 change logo] Sensitivity =Annual +/-in$20 BRL Net million Summary / USD Income API/Spot Euro Sensitivity € +/- Alumina $ 2+/- million $100/MT Annual per Net 0.01 = +/- Income change $190 Sensitivity million in USDLME / EUR Aluminum CanadianAnnual $ +/- $ 4Net mi
Slide 38: Composition of Metal Pricing Convention
Composition 50% 35% 10% 5% 38 Negotiated Midwest Rotterdam CIF Japan of–Annual –Regional DDP Platts Platts –15-day Metal Month Premium lag Bulletin priorPricing to 45-day Quarter Convention lag start 2015E Shipments Regional Premiums Estimated Pricing Convention
Slide 39: Value-Add Co. Segment Bridges
Value-Add Bridge Mix [Alcoa 39 -$4logo] GRP Volume Co. Sequential Segment -$11 Currency Quarter Bridges$5 Bridge – 2Q15 3Q 2015 3Q15 $76EPS $151 Millions = RTI Engineered -$7 TCSCost Sequential Products Increases/ and Quarter Other Solutions Bridge -$9 Productivity GRP Cost=Increases/ Global $9 Rol
Slide 40: Upstream Co. Segment Bridges
Upstream Portfolio Year-over-Year [Alcoa 40 logo] actions Co. Segment Bridge $30 -$59 Bridges Cost Increases – 3Q 2015/ Other $ Millions 3Q15$-$10 Millions Energy -$3-$82 Currency Prod-uctivity $115 API$46 $-15 Price LME / Mix -$13-$134 3Q14Volume $62 3Q15 -$7 $212 FX $40 Cost APIIncreases -$10 LME/
Slide 41: Third-Party Revenue Change by Market, 3Q 2015
Revenue Automotive [Alcoa 41 logo] Change B&Cby Comm. Market—3Q Transport 2015 Industrial 3% (11%)Products 0% (5%) IGT(12%) Packaging 13% Distribution/Other (2%) 21% (1%) (19%) Alumina 27% Primary 32% (21%) Metals 0% 3Q15 (38%)Third-Party 24% (26%)Revenue 24% 3% Sequential (33%) 23%Change 5% 6%Year-
Slide 42: Third-Party Revenue Change by Market, YTD 2015
Revenue Year-Over-Year Distribution/Other [Alcoa 42 logo] ChangeChange byAlumina Market 25%Primary –44% YTD(20%) 2015 Metals 6%3Q (33%) YTD2% Third-Party (17%) 27% Revenue 9% (12%) 22% 5% 5% 7% 5% 2% 11% 2% 16%25% Aerospace Automotive B&C Comm. Transport Industrial Products IGT Packaging
Slide 43: Upstream Cost Structure and Sensitivities
Composition month 7%Conversion quarterly [Alcoa 43 $2m logo] & per semi-annual of22%Smelting $1/bbl Upstream Natural $2m Production Cost per gas$10/MT Structure N/ACosts Spot1 1Natural Fuel Input $13m Oil Cost gas per 6%Inventory information $1/GJ1 NaturalCaustic gas flow corresponds 13% Pricing sod
Slide 44: Upstream Capacity Closed or Sold
Alcoa Closed/sold Includes Rockdale 1,464 Jamalco 44 Upstream (sale 887 2011kmt of7655% capacity announced since Baieinterest) Comeau December closed, Sept 2014 2013 sold 14th, 2007 779 and 105 2015; Total Facility idled Fusina expected 779kmt 2013 Closed/sold Rockdale 44 to be Massena executed sinc
Slide 45: 2015E Primary Aluminum Consumption
Source: 6.5% 29.1 Annualized [Alcoa 45 6.7 2015E logo] Alcoa 6.7 Growth 4.3 Demand estimates, 2.3 2.1 (%) Growth 2.1 China CRU, 1.0 0.9 Europe Harbor, 9.3%North Wood 1.5%America Mackenzie 5% 1% 10% North7% Asia 4%India 5% -3% SE Asia -3%MENA 57.4 mmt Russia 1 Other Brazil includes Other Af ¹ 2.1 ric
Slide 46: Global Inventories and LME Price
Source: Global $1,000 days Cash [Alcoa 46 LME Price logo] Inventories $1,500 Alcoa Cash $1,601/MT estimates, $2,000 Price at 62 $2,180/MT $2,500 $ days; per IAI,metric LME, $3,000 Down Days ton Marubeni, 207days Global of 14Consumption 21 YoY 28 inventories Shanghai 35 42 49 83 Metal vs. 56 days LME
Slide 47: Regional Premiums
Continued Source: 3Q15 Region [Alcoa 47 and logo] 3Q15Average Graph 3Q14 Weakness shows bubble/table in monthly Europe Regional data $156/MT average Premiums shows of Japan quarterly daily$96/MT prices—Platts average Midwest of daily Metals USA prices Week $175/MT $0 $100 Average $200 $300 3Q15$400
Slide 48: Aluminum and Alumina Supply/Demand Balance
Source: 2015 Surplus of 48 market Alumina Alcoa Deficit / mmt analysis, and Expect Surplus Aluminum 2016 CRU, Deficit Balance CNIA, Surplus [Alcoa 1Q NBS, Tightening logo] Estimate SMM 2015E 2Q Estimate Aluminum 3Q Estimate Supply/Demand 0.0 0.5 1.0 Balance 1.5 2.02015E 2.5 551 Alumina 1.0% 0.6% Sup
Slide 49: China and Rest of World Supply/Demand
Source: 2015 be Surplus (29,100) [Alcoa 49 added Alumina logo] Alcoa 2,428 (28,282) 1,4532Q15 analysis, and 1,752 Net Aluminum Surplus 2015 Balance CRU, Capacity 762 CNIA, Surplus 2,014 ’000curtailed (1,463) NBS, mt Tightening China SMM Surplus orRest restarted 2015E of 551World Aluminum Surplus 0 (
Slide 50: Special Items
Special NCI: See Pre-tax, Diluted Sale Corporate [Alcoa 50 appendix $28 Non-controlling logo] Items Share Before $38 Special $19 for —NCI Adjusted $0.10 $25 Items After-tax, interest Other $0.02 ($203) Income Income, Restructuring-Related After ($98) reconciliation NCI Net ($110) Corporate $ Million
Slide 51: Reconciliations
[Alcoa logo] RECONCILIATIONS 51
Slide 52: Reconciliation of Segment ATOI
Reconciliation (in (65) Alcoa art Construction reflect (now Metal reported Segment [Alcoa 52 omillions) (67) fEngineered Alcoa’s price $(178) the logo] as information (72) new alag lag(2) 1Q14 sep Solutions $138 (80) business of segment describes arate Products ATOI 7(284) 2Q14 $149 11for line 38 se
Slide 53: Reconciliation of Segment ATOI
Reconciliation (in Metal (66) (276) Alcoa’s Latin information). the enhance when As charges, offset World support and impact 53 millions) aresults environmental (58) result, American (78) purchased each price Alumina of locations, Engineered the discrete (68) the (221) of other this lag(2) visibilit
Slide 54: Reconciliation of Adjusted Income
Reconciliation (in attributable $250 results in as items; ($9). and RTI inventory interim International unfavorable quarter down energy jurisdictions [Alcoa 54 future adjusted. millions, the International (2) $109 of and of derivative logo] ended period statutory inventory Other periods. Alcoa relat
Slide 55: Reconciliation of Adjusted EBITDA
Reconciliation ($ $140 discontinued (266) 782 $23,906 in general that Adjusted [Alcoa 55 terest, inthis 1,168 millions) $44 (478) logo] administrative, measure $6,239 taxes, EBITDA Add: 209 (236) operations 2004 217 of Net d$5,897 epreciation, is Alcoa (1,920) $3,234 presented 66 income meaningful 2
Slide 56: Reconciliation of Alumina Adjusted EBITDA
Reconciliation ($ $259 246 Production $20 amortization. depletion, measure EBITDA [Alcoa 56 in$47 428 millions, $370 logo] 340 $70 ispresented and meaningful $62 (thousand 277 $31 Net except amortization. of $215 (22) $45 Alumina margin may $212 per $55 metric 60 tonot 179 metric is investors $46 Ad
Slide 57: Reconciliation of Primary Metals Adjusted EBITDA
Reconciliation $488 51 $1,147 ($ margin development GAAP Company’s September [Alcoa 57 in per 34millions, $481 –metric financial logo] $1,138 p5 lus 7$309 30, 4ability anadd-back ton) expenses; Income except $552 2015. ofmeasure. $(20) Primary $418 to$475 meet per taxes $594 $398 and for metric $1,3
Slide 58: Reconciliation of Global Rolled Products Adjusted EBITDA
Reconciliation ($ $358 167 2,250 definition following above EBITDA titled visibility purchased change equals [Alcoa 58 in123 millions, $292 measures 2,376 includes $344 logo] does 89 of provides of items: by $245 26 the 2,482 and not Adjusted this except 25 of gains/losses of underlying impact repre
Slide 59: Reconciliation of Engineered Products Adjusted EBITDA
Reconciliation ($ Depreciation, Adjusted amortization) expenses; EBITDA and approved moving Latin Alcoa 2015) lag of segment. impact [Alcoa 59 infrom thethe millions) American Alcoa underlying business Forgings logo] the Company’s both the The $334 is EBITDA aResearch consolidated realignment aFaste
Slide 60: Reconciliation of Transportation and Construction Adjusted EBITDA
Reconciliation ($ depletion, (1) $523 depreciation, administrative, operating Alcoa’s quarter This Solutions. Solutions acquired business the to when this [Alcoa 60 enhance in(9) impact change realignment millions) $492 purchased (2) logo] of operating acquired initems. segment 2015, and Additionall
Slide 61: Reconciliation of Free Cash Flow
Reconciliation (in operations Flow expenditures Cash [Alcoa measure. 61 millions) Flow islogo] a non-GAAP $2,261 does Year due ofnot to Free ended $2,193 the represent financial Cash fact Quarter $1,497 that Flow the measure. these ended $1,578 residual expenditures December Management $1,674 cash f
Slide 62: Days Working Capital
Days institutions Capital, the respectively, quarters 30-Jun-14 $1,548 1,774 2,587 $6,006 [Alcoa 62 respective Working 1,722 2,656 logo] $1,489 $5,963 which ended 30-Sep-14 on 1,629 2,820 related quarter. Add: a$5,833 Capital reflects March recurring 1,772 2,746 Deferred to31-Dec-14 31, $5,898 (3) =
Slide 63: Reconciliation of Net Debt
Reconciliation Net –used 8,319 [Alcoa 63224 debt to8,852 –logo] repay –is– a–8,817 non-GAAP –outstanding of – Long-term Net 8,789 Debt 9,277 financial debt. debt Less: (indue measure. millions) Cash within and Management December one cash year equivalents 231 31,believes 445 March 465 1,543 that 31,
Slide 64: Reconciliation of Debt-to-Adjusted EBITDA
Reconciliation ($ 138 expense 1,479 EBITDA depletion, depreciation, information companies. [Alcoa 64 in194 millions) 1,460 logo] 494 (29) Ratio and *with 1,421 524 41 depletion, The amortization. 2010 of 3.39 (91) 490 respect Debt-to-Adjusted calculation 1,371 2011 2.87 (12) 453 and 1,352 to 4.20 20
Slide 65: Alcoa: Advancing each generation.
Advancing each generation.