Slide 1: 2nd Quarter 2006 Analyst Conference
Exhibit 99.2 [Alcoa logo] 2nd Quarter 2006 Analyst Conference July 10, 2006
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
[Alcoa logo] Alain J. P. Belda Chairman and Chief Executive Officer
Slide 4: 2nd Quarter 2006 Financial Highlights
2nd Quarter 2006 Financial Highlights Record income from continuing operations of $752m or $0.86 per share Highest quarterly revenues in company history of $7.96b Record profits in the Alumina, Primary Metals and Engineered Solutions segments Year to date annualized ROC of 15.4% well in excess of co
Slide 5: Safety - 1st Half of 2006
Safety - 1st Half of 2006 Zero Incident Locations Lost Work Days Total Recordables # of Locations 88% # of Locations 350 329 350 300 300 52% 250 48% 250 194 200 200 178 150 150 12% 100 100 43 50 50 0 0 No LWD LWD No TRR TRR 5
Slide 6: Operational Excellence
Operational Excellence Production records set in Alumina Segment Quarterly production record for the refinery system Flat-Rolled Products Segment excels Record production at our Texarkana rolling mills Engineered Solutions Segment has record results Record production at Cleveland and Kofem facilitie
Slide 7: Innovation and New Products
Innovation and New Products Vino-Seal™: First commercial use in the U.S. of new Alcoa designed glass wine closure Nike’s Aero Torque® and Aero Strobe®: Multi-year contract to supply specialty aluminum drawn tube using custom alloys for premium brand baseball bats Reynobond® with KEVLAR® : Successful
Slide 8: Growth, Sustainable Development and Portfolio Management
Growth, Sustainable Development and Portfolio Management – Formed aluminum brazing sheet joint venture in China – Signed an MOU to explore the feasibility of a bauxite mine and alumina refinery in Vietnam – Opened a new Consumer Products plant in Bulgaria – “First Pour” of Howmet’s newly installed v
Slide 9: Global Environment: Premiums have Firmed
Global Environment Premiums have Firmed 9 Source: Platts
Slide 10: Global Environment: Days of Consumption
Global Environment Days of Consumption 10 Source: IAI, Reuters and LME
Slide 11: Global Environment: Aluminum Price Lags Other Base Metals
Global Environment Aluminum Price Lags Other Base Metals 11 Source: LME and Dow Jones Steel Index
Slide 12: Joseph Muscari, Executive Vice President, Chief Financial Officer
[Alcoa logo] Joseph Muscari Executive Vice President Chief Financial Officer 12
Slide 13: 2nd Quarter 2006 Financial Overview
2nd Quarter 2006 Financial Overview Record income from continuing operations of $752 million ($0.86 per share) was 22% and 52% higher than the previous and prior year quarter respectively Included in the results is the negative impact of strike prep and settlement costs of $35m or $0.04 per share Hi
Slide 14: Impact of Strike Prep & Settlement Costs
Impact of Strike Prep & Settlement Costs Signing Bonus $12.5 MM Strike preparation and other contract settlement costs $22.5 MM Total $35.0 MM Earnings per share $0.04 14
Slide 15: 2nd Quarter 2006 Financial Review
2nd Quarter 2006 Financial Review In Millions 1Q'06 2Q'06 Change Sales $7,244 $7,959 $715 Cost of Goods Sold $5,459 $5,967 $508 % of Sales 75.4% 75.0% (0.4) pts SG&A $369 $368 ($1) % of Sales 5.1% 4.6% (0.5 pts) Restructuring and Other Charges $1 ($9) ($10) Interest Expense $92 $98 $6 Other Income,
Slide 16: 2nd Quarter 2006 Cash Flow Review
2nd Quarter 2006 Cash Flow Review Cash from Operations Working Capital / DWC Capex Debt to Capital 16
Slide 17: Revenue and ATOI Performance
Revenue and ATOI Performance Historical Performance of Combined Segments ($million) 1,200 10,000 1,000 7,500 800 600 5,000 400 2,500 200 0 0 ATOI Revenue Total ATOI is the sum of the segment ATOI. 17
Slide 18: Alumina
Alumina 2nd Quarter Highlights 2nd Quarter Dynamics 2Q’06 2Q vs 1Q 2Q vs 2Q Realized benefit of strong LME 3rd Party Sales ($MM) 713 14% 34% ATOI ($MM) 278 15% 53% Production record for the entire system Production (kmt) 3,746 1% 3% 3rd Party Shipmts (kmt) 2,108 4% 8% Unfavorable currency ATOI Perfo
Slide 19: Primary Metals
Primary Metals 2nd Quarter Highlights 2nd Quarter Dynamics 2Q’06 2Q vs 1Q 2Q vs 2Q Increases in LME and premiums 3rd Party Sales ($MM) 1,589 13% 41% driven by strong demand ATOI ($MM) 489 10% 162% Higher production at Alumar and Production (kmt) 882 2% (2%) Portland 3rd Party Shipmts (kmt) 508 4% (2
Slide 20: Flat-Rolled Products
Aerospace Flat-Rolled Products 2nd Quarter Highlights 2nd Quarter Dynamics 2Q vs 2Q vs Strong demand in the aerospace, Automotive 2Q’06 1Q 2Q commercial transportation and Revenue ($MM) 2,115 9% 20% distribution markets ATOI ($MM) 79 20% 13% Building & Construction Seasonal jump in North America can
Slide 21: Extruded & End Products
Aerospace Extruded & End Products 2nd Quarter Highlights 2nd Quarter Dynamics 2Q vs 2Q vs Stronger volumes in commercial Automotive 2Q’06 1Q 2Q transportation, building & Revenue ($MM) 1,328 14% 15% construction and distribution across ATOI ($MM) 20 NM 0% all businesses Building & Construction Impro
Slide 22: Engineered Solutions
Engineered Solutions ATOI ($MM) 2nd Quarter Dynamics 2Q06 1Q06 2Q05 AFL, Auto Castings & Structures AFL, Auto. Castings Continued improved performance at AFL 9 (5) (8) and Structures Strong productivity gains Investment Castings, 2005 restructuring generates benefits 97 93 74 Forgings, Fasteners Inv
Slide 23: Packaging & Consumer
Packaging & Consumer Consumer Products ATOI ($MM) 2nd Quarter Dynamics 2Q06 1Q06 2Q05 Closures Record revenue of $834 million Closure Systems and 40 20 41 Seasonal volume increases, Consumer Products especially in Closure Systems Reynolds Food Flexible Packaging Packaging and (1) (11) 1 Productivity
Slide 24: 3rd Quarter 2006 Outlook Summary
3rd Quarter 2006 Outlook Summary Continued strong operational performance Continued downstream market strength Traditional seasonality Metal sensitivity Strong market fundamentals 24
Slide 25: For Additional Information, Contact:
For Additional Information, Contact: Tony Thene Director, Investor Relations Alcoa 390 Park Avenue New York, N.Y. 10022-4608 Telephone: (212) 836-2674 Facsimile: (212) 836-2813 www.alcoa.com 25
Slide 26: [Alcoa logo]
[Alcoa logo]
Slide 27: Appendix
[Alcoa logo] Appendix
Slide 28: 2nd Quarter 2006 Cash Flow Review
2nd Quarter 2006 Cash Flow Review $ In Millions 2Q'05 2Q'06 Net Income $460 $744 DD&A 312 325 Change in Working Capital (270) (428) Other Adjustments (90) 83 Pension Contributions (28) (25) Cash From Operating Activities 384 699 Dividends to Shareholders (132) (131) Change in Debt (430) 191 Other Fi
Slide 29: Reconciliation of Return on Capital
Reconciliation of Return on Capital 2Q'06 1Q'06 4Q'05 3Q'05 2Q'05 2006 YTD Bloomberg 2Q'06 Bloomberg 1Q'06 Bloomberg Bloomberg Bloomberg In Millions Annlzd Method Annlzd Method Annlzd Method Method Method Net Income $2,704 $1,865 $2,976 1,581 $2,432 $1,233 $1,277 $1,271 Minority Interest $458 $368 $
Slide 30: Reconciliation of Adjusted Return on Capital
Reconciliation of Adjusted Return on Capital 2Q'06 1Q'06 4Q'05 3Q'05 2Q'05 2006 YTD Bloomberg 2Q'06 Bloomberg 1Q'06 Bloomberg Bloomberg Bloomberg In Millions Annlzd Method Annlzd Method Annlzd Method Method Method Numerator (Sum Total) $3,435 $2,501 $3,754 $2,159 $3,116 $1,753 $1,767 $1,748 Russia &
Slide 31: Days of Working Capital Definition
Days of Working Capital Definition In Millions 2Q'05 4Q'05 2Q'06 Add: Receivables from customers, less allowances$ 3,195 $ 2,914 $ 3,625 Add: Inventories $ 3,462 $ 3,446 $ 4,087 Less: Accounts payable, trade $ 2,339 $ 2,659 $ 2,822 Working Capital $ 4,318 $ 3,701 $ 4,890 Sales $ 6,693 $ 6,666 $ 7,95
Slide 32: Reconciliation of ATOI to Net Income
Reconciliation of ATOI to Net Income Reconciliation of ATOI to consolidated net income: 1Q05 2Q05 3Q05 4Q05 2005 1Q06 2Q06 Total ATOI $548 $561 $490 $551 $2,150 $844 $1,003 Impact of LIFO and intersegment (2) (18) (23) (19) (62) 24 13 profit adjustments (2) Unallocated amounts (net of tax): Interest