Slide 1: 3rd Quarter Earnings Conference
1 3rd Quarter Earnings Conference October 8, 2013 [Alcoa logo] [Alcoa logo] Exhibit 99.2
Slide 2: Cautionary Statement
Cautionary Statement o [Alcoa logo] 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
Slide 3: Strong Operational Performance in 3Q 2013
Strong Operational Performance in 3Q 2013 Strong third quarter driven by performance – Repositioning working 3 Increased earnings sequentially and YoY – Downstream: Strong Profitability - ATOI up 22% YoY – Upstream: Improved performance consecutive quarters – Productivity: $825 million across all se
Slide 4: William Oplinger, Executive Vice President and Chief Financial Officer
4 [Alcoa logo] William Oplinger Executive Vice President and Chief Financial Officer October 8, 2013 [Alcoa logo]
Slide 5: Income Statement Summary
Income Statement Summary 5 See appendix for Adjusted Income reconciliation 3Q12 2Q13 3Q13 Prior Year Change Sequential Change $ Millions, except aluminum prices and per-share amounts rd Party Realized Aluminum Price ($/MT) $2,222 $2,237 $2,180 Revenue $5,833 $5,849 $5,765 Cost of Goods Sold $5,266 $
Slide 6: Restructuring and Other Special Items
Restructuring and Other Special Items See appendix for Adjusted Income reconciliation 6 2Q13 3Q13 Income Statement Classification Segment $ Millions, except per-share amounts Net (Loss) Income ($119) $24 Net (Loss) Income Per Diluted Share ($0.11) $0.02 Restructuring-Related ($113) ($109) Restructur
Slide 7: Strong performance drives 58% sequential earnings improvement
Strong performance drives 58% sequential earnings improvement 7 See appendix for Adjusted Income reconciliation 38 21 22 23 41 11 Net Income excluding Restructuring & Other Special Items ($ Millions) Market +$17 Performance +$27 Cost Headwinds $0 Currency +58% 2Q 13 3Q 13 Cost Decreases / Other Raw
Slide 8: Earnings rise $88M year-over-year despite LME and cost headwinds
Earnings rise $88M year-over-year despite LME and cost headwinds 8 See appendix for Adjusted Income reconciliation 62 108 19 160 35 62 Net Income excluding Restructuring & Other Special Items ($ Millions) Market +$0 Performance +$206 Cost Headwinds -$118 LME 3Q 12 +275% Raw Materials Energy Producti
Slide 9: Engineered Products & Solutions year-over-year ATOI increase of 22%
9 Engineered Products & Solutions year-over- year ATOI increase of 22% See appendix for Adjusted EBITDA reconciliation. * Prior period amounts have been revised to conform to the current period presentation. See appendix for additional information. 3 Quarter Results 3 Quarter Business Highlights 4 Q
Slide 10: Volume and price headwinds impact Global Rolled Products
10 See appendix for Adjusted EBITDA reconciliation. * Prior period amounts have been revised to conform to the current period presentation. See appendix for additional information. Volume and price headwinds impact Global Rolled Products 3 Quarter Business Highlights 4 Quarter Outlook 3 Quarter Resu
Slide 11: Alumina delivers performance improvement
Alumina delivers performance improvement 11 Quarter Results 3 rd Quarter Business Highlights 4 th Quarter Outlook Quarter Performance Bridge 3 rd 3 rd Production increase due to additional day Higher rd party shipment volume offsets lower Alumina prices Productivity improvements continued Cost incre
Slide 12: Primary Metals drives productivity gains to the bottom line
Primary Metals drives productivity gains to the bottom line 12 3 rd Quarter Results 3 rd Quarter Business Highlights 4 th Quarter Outlook Quarter Performance Bridge 3 rd $ Millions Market Performance -$8 +$42 3Q13 Actual and 4Q13 Outlook – Primary Metals 3Q 13 $8 Anglesea/ US power outages $23 Cost
Slide 13: Record third quarter days working capital level
Record third quarter days working capital level See appendix for days working capital reconciliation 13 5 days lower Days Working Capital since Fourth Quarter 2008 5 days lower 5 days lower 5 days lower 20 days; $1.3 Billion
Slide 14: 3rd Quarter 2013 Cash Flow Overview
3 Quarter Cash Flow overview 14 See appendix for Free Cash Flow and Net Debt reconciliations ($ Millions) 3Q12 2Q13 3Q13 Cash from Operations $263 $514 $214 Cash from Financing Activities ($282) ($568) ($93) Cash from Investing Activities ($262) ($276) ($304) 7,327 7,157 7,370 6,968 7,432 7,622 8,33
Slide 15: On track to meet all of our targets
On track to meet all of our targets 15 Overarching 2013 Financial Target Taking the right actions Key Actions to Execute 2013 Cash Sustainability Program and year-to-date results Maintain 30%-35% Debt-to-Capital Manage Growth Capital of $550M Generate Productivity Gains of $750M Target Saudi JV Inve
Slide 16: Market Fundamentals are stable; pricing pressure continues
Market Fundamentals are stable; pricing pressure continues 16 Global Aluminum Demand Growth at 7% Market Essentially Balanced Inventory is Stable 23.1 6.5 6.2 4.0 2.0 1.9 1.9 1.0 1.0 1.9 Lower Regional Premiums 12% -1% 4% 4% 7% 9% 8% 5% 6% 6% 2013E 49.5 mmt (1) Other includes Africa, E.Europe, Latin
Slide 17: Advancing each generation.
Advancing each generation.
Slide 18: Klaus Kleinfeld, Chairman and Chief Executive Officer
18 [Alcoa logo] [Alcoa logo] Klaus Kleinfeld Chairman and Chief Executive Officer October 8, 2013 [Alcoa logo]
Slide 19: Alcoa end markets: Current assessment of 2013 vs. 2012
Source: Alcoa Analysis Growth continues in global end markets 19 Alcoa end markets: Current assessment of 2013 vs. 2012
Slide 20: Contributions from Value-Add businesses continue to grow
20 Contributions from Value-Add businesses continue to grow 1) Pro forma 2003 amounts reflect current structure of EPS and GRP; 2) YTD results annualized; does not represent a forecast of 4Q 2013 results; 3) ATOI for the respective periods: 2003 $358M, 2012 $956M and 2013 annualized $1,056M Value-ad
Slide 21: Aero, Auto and Commercial B&C account for $5.9B of value-add revenue
Aero, Auto and Commercial B&C account for $5.9B of value-add revenue 21 1) McGraw Hill Construction, Green Outlook 2013. 3.2 0.7 1.4 Breakdown of 2012 Alcoa value-add revenue by market ($B) 8% End Market CAGR (2012 - 2015) ~ 8 year production backlog (’12 rates) for large commercial aircraft segment
Slide 22: New A330 strengthens Alcoa's metallic aero opportunity
New A330 strengthens Alcoa’s metallic aero opportunity 22 Airbus tailors new A330 for Asian markets Opportunities to apply Alcoa solutions Images: Airbus. 2013 Airbus A330 Updates and Alcoa Solutions September 2013: New variant of all-metallic A330 - 300 announced by Airbus Target short, high-densit
Slide 23: Alcoa technology powers next generation jet engine performance
Alcoa technology powers next generation jet engine performance 23 Customer needs Alcoa provides high temperature airfoil solutions Increases coating life 3.0 - 3.5X Enhances airfoil hot corrosion protection 3D Multi-wall Airfoils Provides customized targeted cooling of critical areas of the engine b
Slide 24: Aluminum Intensive Vehicles have the competitive edge
Aluminum Intensive Vehicles have the competitive edge 1) Aluminum Association. 2) Oak Ridge National Laboratory. 2013 24 Safe and Durable Reduces CO 2 emissions Improves fuel efficiency Comparison between baseline steel and aluminum intensive vehicles “Aluminum offers the most promise for cutting to
Slide 25: Aluminum intensity is accelerating auto sheet demand
Aluminum intensity is accelerating auto sheet demand Sources: Ducker Worldwide , IHS , Alcoa analysis 25 1,125 430 100 Increasing Aluminum Intensity Drives Auto Sheet Demand Projected aluminum content per vehicle (lbs) and auto sheet demand (kMT) 2025 2015 2012 North America Aluminum Body Sheet Cont
Slide 26: Alcoa's auto triple play: smart investments to capitalize on AIV growth
Alcoa’s auto triple play: 3 smart investments to capitalize on AIV growth 26 Phase 1 Auto Expansion Positioning for growth in MENA Phase 2 Auto Expansion AIV = Aluminum Intensive Vehicle; MENA = Middle East and North Africa * Total investment relates to rolling mill capability expansion to include a
Slide 27: Alcoa delivers in a world demanding greener buildings
Alcoa delivers in a world demanding greener buildings 27 U.S. vs. EU Building Facts (1,2) Increasing energy requirements 1) LEED Gold Building vs. avg. U.S. commercial building, LEED Green Building Fact Sheet 2013, McGraw Hill. 2) Buildings Performance Institute Europe (BPIE), 2011. 3) U.S. EIA, 201
Slide 28: Enhancing competitiveness in the upstream business
Enhancing competitiveness in the upstream business 28 Alumina Aluminum 1) Performance includes the following factors in ATOI: price/mix, volume, productivity, and cost impacts Largest low-cost global bauxite producer, and world leader in refining $171M in refinery gross productivity gains YTD, Perfo
Slide 29: Saudi Arabia JV construction update
29 Phase 1 Phase 2 Construction progressing as planned; world’s lowest cost facility Smelter Rolling Mill Mine Refinery 99% complete 67% complete 38% complete 250kMT production in 2013 At full capacity in 2014 Lowest cost smelter 2% point reduction on the smelting cost curve First hot coil in 4Q 201
Slide 30: Creating value by executing our strategy
Creating value by executing our strategy 30 Focusing on controllable items to increase upstream profitability Investing to capture growth and improve cost position Leveraging the Alcoa Advantage to deliver Value-Add products
Slide 31: Advancing each generation.
Advancing each generation.
Slide 32: Additional Information
Additional Information 32 Kelly Pasterick Director, Investor Relations Alcoa Park Avenue New York, NY 10022-4608 Telephone: (212) 836-2674 www.alcoa.com
Slide 33: Annual Sensitivity Summary
Annual Sensitivity Summary 33 Currency Annual Net Income Sensitivity LME Aluminum Annual Net Income Sensitivity +/- $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 34: Revenue Change by Market
Revenue Change by Market 34 3Q’13 Third-Party Revenue Sequential Change Year-Over-Year Change (3%) (6%) 3% 2% (9%) (9%) (3%) 22% 3% (1%) 5% 7% 9% 7% (9%) (5%) (3%) (1%) 11% (11%) 17% 3% 7% 6% 7% 2% 14% 1% 15% 28% Aerospace Automotive B&C Comm. Transport Industrial Products IGT Packaging Distribution
Slide 35: Reconciliation of ATOI to Consolidated Net Income (Loss) Attributable to Alcoa
Reconciliation of ATOI to Consolidated Net Income (Loss) Attributable to Alcoa 35
Slide 36: Reconciliation of Adjusted Income
Reconciliation of Adjusted Income 36
Slide 37: Reconciliation of Alcoa Adjusted EBITDA
Reconciliation of Alcoa Adjusted EBITDA 37
Slide 38: Reconciliation of Alumina Adjusted EBITDA
Reconciliation of Alumina Adjusted EBITDA 38
Slide 39: Reconciliation of Primary Metals Adjusted EBITDA
Reconciliation of Primary Metals Adjusted EBITDA 39 ($ in millions , except per metric ton amounts ) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 3Q12 2Q13 3Q13 After-tax operating income (ATOI) $ 657 $ 808 $ 822 $ 1,760 $ 1,445 $ 931 $ (612) $ 488 $ 481 $ 309 $ (14) $ (32) $ 8 Add: Depreciatio
Slide 40: Reconciliation of Global Rolled Products Adjusted EBITDA
Reconciliation of Global Rolled Products Adjusted EBITDA 40 ($ in millions, except per metric ton amounts) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 3Q12 2Q13 3Q13 After-tax operating income (ATOI)* $ 232 $ 290 $ 300 $ 317 $ 151 $ (41) $ (106) $ 241 $ 260 $ 346 $ 89 $ 79 $ 71 Add: Depreciati
Slide 41: Reconciliation of Engineered Products and Solutions Adjusted EBITDA
Reconciliation of Engineered Products and Solutions Adjusted EBITDA 41 ($ in millions) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 3Q12 2Q13 3Q13 After-tax operating income (ATOI)* $ 126 $ 161 $ 276 $ 382 $ 423 $ 522 $ 311 $ 419 $ 537 $ 612 $ 158 $ 193 $ 192 Add: Depreciation, depletion, and a
Slide 42: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow 42
Slide 43: Reconciliation of Free Cash Flow, con't
Reconciliation of Free Cash Flow, con’t 43
Slide 44: Days Working Capital reconciliation
(So mitions) ‘March 37, June 30, ‘2012 Receivables from customers, less $1,526 ‘lowances ‘Add: Deferred purchase price receivabl 284 Recelvabies from customers, ess, ‘allowances, as adjusted 1.780 ‘Add: Inventories 31007 Coss: Accounts payable, wade 2734 Working Capital S249 Sales $6,006 Days Workin
Slide 45: Reconciliation of Net Debt
Reconciliation of Net Debt 45
Slide 46: Reconciliation of Net Debt-to-Capital
Reconciliation of Net Debt-to-Capital 46
Slide 47: Composition of Upstream Production Costs
Composition of Upstream Production Costs Refining Cost Structure Smelting Cost Structure Fuel Oil 14% Natural gas 10% Caustic 11% Bauxite 24% Conversion 41% Input Cost Inventory flow Pricing convention Annual ATOI Sensitivity Fuel oil 1 – 2 months Prior month $4m per $1/bbl Natural gas N/A Spot $16m
Slide 48: Global aluminum demand growth at 7%
48 Source: Alcoa estimates, Brook Hunt, CRU, Harbor Global aluminum demand growth at 7% 6.5 6.2 4.0 1.0 1.0 1.9 1.9 2.0 23.1 1.9 7% 5% 12% -1% 4% 9% 6% 4% 8% 6% 2013E 49.5 mmt (1) Other includes Africa, E.Europe, Latin America ex Brazil and Oceania 2013 Primary Aluminum Consumption (mmt), Annualized
Slide 49: China: Market essentially balanced
49 Source: Alcoa analysis, Brook Hunt, CRU, CNIA, NBS, Chinese Customs Market essentially balanced 2013E Aluminum Supply/Demand Balance 2013E Alumina Supply/Demand Balance ‘000 mt China Rest of World 2013 Production (August annualized) 22,775 25,447 2013 Production to be added 2013 Capacity to be cu
Slide 50: Inventory is Stable
Inventory is Stable 50 $1,000 $1,500 $2,000 $2,500 $3,000 China Incl SRB Producer Japan Port LME On Warrant Cancelled Warrants Off Exchange LME 3 Mon Days of Consumption 108 days LME Price $2,214/MT Days of Consumption 83 days LME Price $2,686/MT Global Inventories Decline 34 days from the ’09 peak
Slide 51: Lower regional premiums
Lower regional premiums 51 Source: Month end pricing - Platts Metals Week and Metal Bulletin $0 $50 $100 $150 $200 $250 $300 $0 $50 $100 $150 $200 $250 $300 Regional Premiums over time $ per metric ton $ per metric ton Region End of 3Q Europe $240/MT Japan $246/MT Midwest USA $216/MT Year on Year Ch
Slide 52: Advancing each generation.
Advancing each generation.