Slide 1: 3rd Quarter 2009 Earnings Conference
Exhibit 99.2 Alcoa Logo 3rd Quarter 2009 Earnings Conference October 7, 2009
Slide 2: Forward-Looking Statements
Alcoa Logo 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
Slide 3: Chuck McLane, Executive Vice President and Chief Financial Officer
Alcoa Logo Chuck McLane Executive Vice President and Chief Financial Officer
Slide 4: 3rd Quarter 2009 Financial Overview
rd Alcoa Logo 3 Quarter 2009 Financial Overview Income from continuing operations of $73 million, or $0.07 per share – Excluding restructuring and special items, income from continuing operations of $39 million, or $0.04 per share Revenue up 9% sequentially Cash Sustainability initiatives exceeding
Slide 5: Revenue Change by Market
Alcoa Logo Revenue Change by Market Sequential Year-Over-Year 3Q’09 Third Party Revenue Change Change Aerospace (9%) (27%) 30% 15% Automotive 13% (41%) 2% B&C 3% (36%) Comm. Transport 14% (41%) 7% Industrial Products 24% (39%) 4% IGT (5%) (8%) 4% Packaging 5% (24%) 4% 11% Distribution/Other 10% (52%
Slide 6: Sequential Income Statement Summary
Alcoa Logo Sequential Income Statement Summary $ Millions 2Q’09 3Q’09 Change Sales $4,244 $4,615 $371 Cost of Goods Sold $3,966 $3,888 ($78) COGS % Sales 93.4% 84.2% (9.2 % pts.) Selling, General Administrative, Other $240 $234 ($6) SGA % Sales 5.7% 5.1% (0.6 % pts.) Restructuring and Other Charges
Slide 7: 3rd Quarter Restructuring and Special Items
Alcoa Logo 3rd Quarter Restructuring and Special Items After-Tax and EPS $ Millions Non-controlling Interests ($/Share) Segment Restructuring ($1) ($0.00) Corporate Gain on Suralco $35 $0.04 Alumina / Corporate Transaction Total Restructuring $34 $0.03 and Special Items 7
Slide 8: Rapid Reduction in Headcount In 2009
Alcoa Logo Rapid Reduction in Headcount In 2009 Headcount Reductions Announced by Quarter Completed Not Yet Completed 1,950 550 22,200 4,400 15,300 2009 cash savings of $320 million - Run rate savings of $540 million 2H'08 Q1'09 Q2'09 Q3'09 Total Charges 224 48 38 5 315 ($ Millions) 8
Slide 9: 3Q 2009 vs. 2Q 2009 Earnings Bridge
Alcoa Logo 3Q 2009 vs. 2Q 2009 Earnings Bridge Income(Loss)fromContinuing Operationsexcluding Restructuring & OtherSpecialItems($ millions) $43 $39 $244 $7 ($11) ($256) $16 ($78) $74 See Appendix for Reconciliation 9
Slide 10: YTD 2009 vs. YTD 2008 Earnings Bridge
Alcoa Logo YTD 2009 vs. YTD 2008 Earnings Bridge Income(Loss)fromContinuing Operationsexcluding Restructuring & OtherSpecialItems($ millions) $867 $1,232 ($670) $350 ($201) $117 ($694) ($2,378) ($113) $102 See Appendix for Reconciliation 10
Slide 11: Alumina
Alcoa Logo Alumina 3 rd Quarter Highlights 3rd Quarter Business Conditions rd 3Q 08 2Q 09 3Q 09 Production up 9% on improved 3 party demand and the inclusion of Suralcoat 100% Production (kmt) 3,790 3,309 3,614 Realized 3rd party Alumina price up 13% versus 3 rd Party Shipments (kmt) 2,010 2,011 2,1
Slide 12: Primary Metals
Alcoa Logo Primary Metals 3 rd Quarter Highlights 3 rd Quarter Business Conditions 3Q 08 2Q 09 3Q 09 Realized pricing up 18% Production (kmt) 1,011 906 881 Production down 3% as the full impact of 3 rd Party Shipments (kmt) 704 779 698 curtailments is realized Negative currency impact of $29 million
Slide 13: Flat-Rolled Products
Alcoa Logo Flat-Rolled Products 3 rd Quarter Highlights 3 rd Quarter Business Conditions ATOI $ Millions 3Q 08 2Q 09 3Q 09 Improved order intake – shipments up 6% Flat-Rolled Products, versus last quarter excl Russia, China & Other 56 2 37 Moderate revenue increases in all key end markets Russia, Ch
Slide 14: Engineered Products and Solutions
Alcoa Logo Engineered Products and Solutions 3 rd Quarter Highlights 3rd Quarter Business Conditions $ Millions 3Q 08 2Q 09 3Q 09 Weaker Aerospace market as destocking rd 3 Party Revenue 1,596 1,194 1,128 continues throughout the supply chain Decline in Commercial Building and ATOI 140 88 75 Constru
Slide 15: Strengthened Liquidity and Cash Position
Alcoa Logo Strengthened Liquidity and Cash Position Cash Flow Free Cash Flow (in millions) ($ Millions) 3Q'08 2Q'09 3Q'09 $200 $0 Net Income (Loss) $352 ($459) $124 -$200 -$400 DD&A 312 317 342 -$600 -$800 Change in Working Capital (361) 329 100 -$1,000 3Q'08 4Q'08 1Q'09 2Q'09 3Q'09 Taxes 146 (138)
Slide 16: Strengthened Capital Market Position
Alcoa Logo Strengthened Capital Market Position Alcoa Debt & Equity Alcoa Credit Default Swaps 17.00 1,300 Alcoa Share Price ($) 16.00 1,200 Alcoa 5-Year CDS Alcoa July 2013 Debt Yield (%) (basis points) 15.00 1,100 14.00 1,000 13.00 900 12.00 800 11.00 700 10.00 600 9.00 500 8.00 400 7.00 300 6.00
Slide 17: Klaus Kleinfeld, President and Chief Executive Officer
Alcoa Logo Klaus Kleinfeld President and Chief Executive Officer
Slide 18: Market Conditions in 2009
Alcoa Logo Market Conditions in 2009 Alcoa End Markets: Current Assessment of 2009 Conditions Source: Alcoa analysis 18
Slide 19: Improving Market Conditions in 2nd Half 2009
Alcoa Logo Improving Market Conditions in 2nd Half 2009 Alcoa End Markets: Assessment of 2 nd Half 2009 VS 1st Half 2009 Conditions Source: Alcoa analysis 19
Slide 20: Consumption Outlook Slightly Improved
Alcoa Logo Consumption Outlook Slightly Improved 2009 Projected Primary Aluminum Consumption by Region (in mmt) 35.0 Brazil 0.8 -5% 5% Russia 0.9 -15% 10% Other* 4.0 -2% -1% 4.3 -12% - 5% Asia w/o China 2008 Global Demand Growth Rate: -3% - 15% - 12% (2008 ex China: -8%) 5.0 North America 2009 Globa
Slide 21: 2H'09 Consumption Increasing 11% From 1H'09
Alcoa Logo 2H’09 Consumption Increasing 11% From 1H’09 2009 Projected Primary Aluminum Consumption by Region (in mmt) 18.4 2H’09 vs. 1H’09 16.6 +6% 2.0 0.4 +18% Other* 1.9 0.4 +1% Brazil 0.3 2.4 +22% Russia 0.4 Asia w/o China 2.0 2.6 +11% North America 2.4 2H’09 vs. 1H’09 3.4 +16% Growth Rate: 11% E
Slide 22: Aluminum Market in Surplus
Alcoa Logo Aluminum Market in Surplus 2009E Primary Metal Supply / Demand Balance (in kmt) China Western World Surplus Surplus Jan-July 09 Primary Production Run 12,000 Jan-July 09 Primary Production 23,375 Rate (Annualized) Run Rate (Annualized) Announced Restarts & New Capacity 850 Announced Curta
Slide 23: Modest Surplus in 2H'09 as WW Moves To Balanced
Alcoa Logo Modest Surplus in 2H’09 as WW Moves To Balanced July – December 2009 Estimated Primary Metal Supply / Demand Balance (in kmt) China Western World Modest Modest Surplus Surplus July-Dec 09 Primary Production 6,405 July-Dec 09 Primary Production 11,515 nd nd (July Run Rate x 2 Half ) (July
Slide 24: Alumina Market Reaches Equilibrium in 2009
Alcoa Logo Alumina Market Reaches Equilibrium in 2009 2009E Alumina Supply / Demand Balance (in kmt) Balanced China Western World Jan-Jul 09 Alumina Production 20,200 Jan-Jul 09 Alumina Production 49,100 Run Rate (Annualized) Run Rate (Annualized) Announced restarts 400 Announced restarts 450 Import
Slide 25: Alumina Market in Balance in 2H'09
Alcoa Logo Alumina Market in Balance in 2H’09 2009E Alumina Supply / Demand Balance (in kmt) Balanced China Western World Jul-Dec 09 Alumina Production 10,700 Jul-Dec 09 Alumina Production 24,600 Run Rate Run Rate Announced restarts 400 Announced restarts 450 Imports from Western World 2,300 Exports
Slide 26: Rise In LME Stocks Slows As Non-LME Stocks Decline
Alcoa Logo Rise In LME Stocks Slows As Non-LME Stocks Decline Inventory Producer $/MT 70 Japan Port $3,500 67 days of consumption Shanghai $3,250 60 LME $3,000 50 LME 3 Mon $2,750 40 $2,500 LME at 49 days 30 $2,250 $2,000 20 Japan Port $1,750 Non-LME at Producer stocks at 15- 18 days 10 year lows le
Slide 27: Destocking Has Left The Supply Chain Depleted
Alcoa Logo Destocking Has Left The Supply Chain Depleted The Impact of Destocking on the Supply Chain OEM Distributor Rolling Mill Smelter Time Line 3 Months 6 Months 9 Months Refrigerator Rolled Sheet Rolled Sheet Primary Aluminum – 1 Week of Inventory – 3 months of Inventory – 2 months of Inventor
Slide 28: Thin Supply Chain, Rising Shipments Driving Premiums
Alcoa Logo Thin Supply Chain, Rising Shipments Driving Premiums 2009 Cumulative Change in Shipments Regional Premiums Beginning to Improve Cumulative 2009 YTD Change Shipments Europe Japan United States KMT Midwest +30% 180% Japan +114% Shipments 150 +14% Europe +209% 160% 140% 100 120% February 100
Slide 29: Demonstrating Solid Execution of Holistic Approach
Alcoa Logo Demonstrating Solid Execution of Holistic Approach Holistic Alcoa Approach: Improved Cost Structure and Balance Sheet Operational Financial Procurement Efficiencies Asset Dispositions – Cost savings by 2010 – Net proceeds $1,100M $2,000M Overhead Rationalizations Dividend Reduction $430M
Slide 30: Overcoming Headwinds to Exceed Procurement Target
Alcoa Logo Overcoming Headwinds to Exceed Procurement Target Procurement Efficiencies: Reduction Targets Reduction Targets by Spend Category Savings (millions) $2,000 2009E 2010E Strategic Raw Materials - $1,610 15% 18% Alumina and Primary Metals $1,500 Strategic Raw Materials - 2% 7% Flat-Rolled Pr
Slide 31: Achieved 94% of 2010 Overhead Reduction Target
Alcoa Logo Achieved 94% of 2010 Overhead Reduction Target Overhead Rationalization: Reduction Targets and Savings Overhead Savings Target Savings (millions) 100% $400 $400M $375 94% of 80% 2010 188% of target 2009 target $200 2008 A 2010 Target 2009 YTD 2009 Savings 2010 Savings Target vs. 2008 Targ
Slide 32: Year-to-date 2009 Capital Expenditures of $1.3 Billion
Alcoa Logo Year-to-date 2009 Capital Expenditures of $1.3 Billion Capital Expenditure Reduction: Annual CapEx ($ millions) $3,438 -48% $1,800 -53% $541 $850 2008 2009E 2010E 32
Slide 33: Working Capital Savings Despite Increases in LME
Alcoa Logo Working Capital Savings Despite Increases in LME Working Capital Initiatives: Targets and Year-to-date Results Working Capital 2009 YTD Working Capital Days Reduction Targets Change ($ millions) $463 ($736) 98% of 100% 2009 -28% target $1,053 72% $800 $780 $800M decrease in working capita
Slide 34: Strengthening Our Upstream Position In the Downturn
Alcoa Logo Strengthening Our Upstream Position In the Downturn Juruti Mine and Alumar Refinery Expansion Commissioned in Q3’09 Juruti Alumar Benchmark in Sustainable Development Strengthened Refining Position in Brazil Railroad Washing Plant Ship loader Alumina Silo Cogeneration Calciners Alcoa shar
Slide 35: Alcoa Bohai Well Positioned to Serve Chinese Markets
Alcoa Logo Alcoa Bohai Well Positioned to Serve Chinese Markets Alcoa Bohai Operations Launched in Q3’09 Alcoa Bohai Facility Lithographic Strong footing to serve Chinese domestic market for lithographic, transportation, Transportation electronic and packaging markets Electronics World’s most sophis
Slide 36: Russian Coating Line Makes Alcoa the Can Leader
Alcoa Logo Russian Coating Line Makes Alcoa the Can Leader Alcoa Samara Coating Line Commissioned in Q2’09 Samara Coating Line Consumer Packaging Tab Stock EndStock Body Stock State-of-the-art coating line serving Russian and European packaging and building & construction markets Only domestic can s
Slide 37: Aluminum is The Material of Choice in Aerospace
Alcoa Logo Aluminum is The Material of Choice in Aerospace Aluminum is a superior solution for the transportation sector Mitsubishi Regional Jet Aluminum in Aerospace Nearly 100 years of proven structural performance Unparalleled strength, weight and cost characteristics Equal fuel efficiency to com
Slide 38: Strengthening Our Position As Industry Stabilizes
Alcoa Logo Strengthening Our Position As Industry Stabilizes Aluminum Fundamentals Markets Stabilizing Demand Improving Supply / Demand Balance LME Stocks Stabilizing Alcoa Strengthening in the Downturn Procurement 107% of Target Samara Overhead 188% of Target Bohai Capex On Target Alumar Working Ca
Slide 39: For Additional Information, Contact: Matthew E. Garth
Alcoa Logo For Additional Information, Contact: Matthew E. Garth Director, Investor Relations Alcoa 390 Park Avenue New York, NY 10022-4608 Telephone: (212) 836-2674 www.alcoa.com 39
Slide 40: Alcoa Logo
Alcoa Logo 40
Slide 41: Effective Tax Rate
Alcoa Logo Effective Tax Rate $ Millions 1Q’09 2Q’09 3Q’09 YTD 2009 Income (loss) from continuing operations before taxes on income ($777) ($425) $98 ($1,104) Provision (benefit) for taxes on income ($307) ($108) ($22) ($437) Effective tax rate 39.5% 25.4% (22.4%) 39.6% Discrete tax provisions (bene
Slide 42: Reconciliation of ATOI to Consolidated Net Income (Loss) Attributable to Alcoa
Alcoa Logo Reconciliation of ATOI to Consolidated Net Income (Loss) Attributable to Alcoa (in millions) 1Q08 2Q08 3Q08 4Q08 2008 1Q0 9 2Q09 3Q09 Total segment ATOI $ 668 $ 838 $ 665 $ 28 $ 2,199 $ (143) $ (132) $ 142 Unallocated amounts (net of tax): Impact of LIFO (31) (44) (5) 73 (7 ) 29 39 80 Int
Slide 43: Reconciliation of Adjusted Income (Loss)
Alcoa Logo Reconciliation of Adjusted Income (Loss) (in millions, except per share amounts) (Loss) Income (Loss) Earnings per Diluted Share Quarter ended Nine months ended Quarter ended Nine months ended June 30, September 30, September 30, September 30, June 30, September 30, September 30, Septembe
Slide 44: Reconciliation of Free Cash Flow
Alcoa Logo Reconciliation of Free Cash Flow (in millions) Quarter ended September 30, December 31, March 31, June 30, September 30, 2008 2008 2009 2009 2009 Cash from operations $ (93) $ 608 $ (271) $ 328 $ 184 Total capital expenditures (877) (1,017) (471) (418) (370) Free cash flow $ (970) $ (409)
Slide 45: Reconciliation of EBITDA
Alcoa Logo Reconciliation of EBITDA (in millions) Earnings before interest, taxes, depreciation, and amortization (EBITDA) Quarter ended June 30, September 30, 2009 2009 Change (Loss) income from continuing operations $ (317) $ 120 $ 437 Benefit for income taxes (108) (22) 86 Other income, net (89)