Slide 1: 2nd Quarter 2005 Analyst Conference
Exhibit 99.2 2nd Quarter 2005 Analyst Conference July 7, 2005
Slide 2: Forward-Looking Statements
Forward-Looking Statements Today’s discussion may include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements relate to future events and expectations and involve known and unknown risks and uncertainties. Alcoa’s actual results or
Slide 3: Alain J. P. Belda, Chairman and Chief Executive Officer
Alain J. P. Belda Chairman and Chief Executive Officer
Slide 4: 1H 2005 Achievements
1H 2005 Achievements Financial Strong earnings Cost control Record revenue Debt-to-cap within target range Operational Record safety Targeted restructuring initiated Smelting capacity restarted Growth Alumar, Iceland on schedule Suriname complete, Pinjarra on schedule Integrating Russia Progress in
Slide 5: Top Priorities
Top Priorities Capitalize on the current market environment Strong Aero/Commercial Vehicle recovery Robust upstream markets Strong demand in key geographies Execute the Productivity Projects Further deploy ABS, focused on margin improvement Capture the restructuring benefits Accelerate global compet
Slide 6: Richard B. Kelson, Executive Vice President and Chief Financial Officer
Richard B. Kelson Executive Vice President and Chief Financial Officer
Slide 7: 2nd Quarter Overview: Financial
2nd Quarter Overview Financial Income from continuing operations of $0.54/share Revenue up 8% sequentially to $6.8 billion All segments experienced sequential and year ago quarter increases in third party revenue Record high Alumina segment profits 2Q’05 ROC of 11.0%, trailing 4 quarters ROC of 8.3%
Slide 8: 2nd Quarter Overview: Growth and Restructuring
2nd Quarter Overview Growth Integration of recently acquired Russian facilities continues Completed purchase of full ownership in Shanghai rolling mill Progress made in construction of Iceland and Brazil smelter projects Efficiency project at Pinjarra continues and Jamaica expansion underway Aerospa
Slide 9: Safety
Safety LWD Incident Rate 0.6 0.4 0.2 0.0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005YTD 2005 Milestone 0.49 0.46 0.36 0.23 0.18 0.16 0.15 0.12 0.09 0.08 0.075 54 LWD in 133 million hours worked in 2005 Rate (injuries per 200,000 hrs. worked)
Slide 10: 2nd Quarter 2005 Financial Review
2nd Quarter 2005 Financial Review In Millions 1Q’05 2Q’05 Fav/(Unfav) LME 3-Month Average ($/MT) $1,892 $1,797 ($95) Sales $6,289 $6,763 $474 Cost of Goods Sold $4,981 $5,456 ($475) % of Sales 79.2% 80.7% (1.5 pts) SG&A $333 $357 ($24) % of Sales 5.3% 5.3% 0.0 pts Restructuring and Other Charges $45
Slide 11: 2nd Quarter 2005 Events
2nd Quarter 2005 Events Elkem $219 million after-tax gain Tax Benefits $120 million from the finalization of certain tax reviews and audits Environmental Reserve $14 million after-tax related to a closed facility Russia $29 million after-tax due to integration costs, general market softness and the
Slide 12: 2nd Quarter 2005 Events: Restructuring/Impairment Charges
2nd Quarter 2005 Events Restructuring/Impairment charges After-tax impact of ~$230 million ~50% cash, ~50% non-cash Affects approximately 6,300 personnel Targeting $150 million in pre-tax savings annually Key Components Positions Total Charges Pre-tax Savings Engineered Solutions 3,326 $80 $48 milli
Slide 13: 2nd Quarter 2005 Cash Flow Review
2nd Quarter 2005 Cash Flow Review $ In Millions 1Q’05 2Q’05 Net Income 260 460 DD&A 320 317 Change in Working Capital (774) (270) Other Adjustments (45) (123) Cash From Operating Activities (239) 384 Dividends to Shareholders (131) (131) Other Financing Activities 1,000 (437) Cash From Financing Act
Slide 14: 2nd Quarter Market Conditions
2nd Quarter Market Conditions Revenue by Market As of 2Q’05 Primary Products 24% Packaging 25% Industrial Products 4% Other (Distr., IGT) 10% Building & Construction 10% Commercial Transportation 7% Automotive 10% Aerospace 10% Market Conditions Change from Change from 2Q’04 1Q’05 Realized Prices Al
Slide 15: Alumina
Alumina Bauxite mining and alumina refining Markets 3rd Party Revenue Intersegment Revenue Current Business Conditions Positives ATOI Performance $ Millions 205 180 155 130 105 80 2Q04 3Q04 4Q04 1Q05 2Q05 ATOI LME LME $/MT 1950 1850 1750 1650 +14% +13% Negatives Lower LME negatively affects price
Slide 16: Primary Metals
Primary Metals 4.0 million mt of smelting capacity, with 380,000 mt currently idled Markets 3rd Party Revenue Intersegment Revenue Current Business Conditions Positives ATOI Performance $ Millions 280 240 200 160 120 80 40 0 2Q 04 3Q 04 4Q04 1Q05 2Q05 ATOI LME LME $/MT 1950 1850 1750 1650 -19% -17%
Slide 17: Flat Rolled Products
Flat Rolled Products Aluminum sheet and plate for aerospace applications, rigid container sheet for beverage cans, and mill products Markets Distribution & Other Building & Construction Commercial Vehicle Aero Auto Can Sheet Current Business Conditions Positives Strong aerospace and commercial vehic
Slide 18: Extruded and End Products
Extruded and End Products Hard- and soft-alloy extrusions, architectural extrusions, and vinyl siding Markets Distribution & Other Auto Aero Commercial Vehicle Building & Construction ATOI Performance $ Millions 30 20 10 0 -10 2Q04 3Q04 4Q04 1Q05 2Q05 ATOI Boxed ATOI includes Russia losses -13%* +16
Slide 19: Engineered Solutions
Engineered Solutions Solutions used in the automotive, aerospace, commercial transportation, and industrial markets Markets Industrial & Other IGT Commercial Vehicle Aero Auto Current Business Conditions Positives Strength in aerospace and commercial vehicle markets *Excludes Russia losses Negatives
Slide 20: Packaging & Consumer
Packaging & Consumer Consumer products, closures, food packaging, flexible packaging, and packaging graphics design Markets Flexible Packaging & Other Consumer Products Food Packaging Closures Current Business Conditions Positives Strong overall consumer demand ATOI Performance $ Millions 60 50 40 3
Slide 21: Outlook Summary: 3Q '05 Outlook
Outlook Summary 3Q ‘05 Outlook Positives Aerospace and commercial vehicle markets are strong Seasonal upswing in building and construction Focus of cost reduction and productivity programs Negatives Current metal prices lower than 2Q’05 average Seasonal shutdowns and maintenance outages Continued Ru
Slide 22: For Additional Information, contact
For Additional Information, contact: William F. Oplinger Director, Investor Relations Alcoa Park Avenue New York, N.Y. 10022-4608 Telephone: (212) 836-2674 Facsimile: (212) 836-2813 www.alcoa.com
Slide 23: Appendix
Appendix
Slide 24: Reconciliation of Return on Capital
Reconciliation of Return on Capital In Millions 2Q’05 Bloomberg Method 2Q’05 Annlzd 1Q’05 Bloomberg Method 1Q’05 Annlzd 4Q’04 Bloomberg Method 4Q’04 Annlzd 3Q’04 Bloomberg Method 3Q’04 Annlzd 2Q’04 Bloomberg Method 2Q’04 Annlzd Net Income $1,271 $1,840 $1,215 $1,040 $1,310 $1,072 $1,333 $1,132 $1,33
Slide 25: Segment ATOI Reconciliation
Segment ATOI Reconciliation In Millions 2Q’05 1Q’05 Flat Rolled Products ATOI excluding Russia losses $91 $86 Russia losses $21 $11 Segment ATOI $70 $75 Extruded and End Products ATOI excluding Russia losses $26 $10 Russia losses $6 $0 Segment ATOI $20 $10 Engineered Solutions ATOI excluding Russia