Slide 1: 3rd Quarter 2006 Analyst Conference
EXHIBIT 99.2 [Alcoa logo] 3rd Quarter 2006 Analyst Conference October 10, 2006
Slide 2: 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 actions may differ materia
Slide 3: Alain J. P. Belda, Chairman and Chief Executive Officer
[Alcoa logo] Alain J. P. Belda Chairman and Chief Executive Officer
Slide 4: Quarter and YTD 2006 Financial Highlights
3 Quarter and YTD 2006 Financial Highlights Income from continuing operations of $1.9b or $2.17 per share YTD and $540m or $0.62 per share for the quarter YTD revenues of $22.54b and $7.63b for the quarter YTD cash from operations of $1.23b and $748m for the quarter which includes a discretionary pe
Slide 5: Strong Performance Trends: Bloomberg ROC Trailing Months
Bloomberg ROC Trailing 12 Months Including Growth Capex Bloomberg ROC Trailing 12 Months Excluding Growth Capex Cash from Operations Strong Performance Trends
Slide 6: Safety - Year to Date
Safety - Year to Date Lost Work Days Total Recordables 48% Zero Incident Locations 52% 85% 15% No LWD LWD # of Locations No TRR TRR # of Locations
Slide 7: Operational Excellence, Innovation and New Products
Operational Excellence, Innovation and New Products Achieved production records for five refineries and the AWA system as a whole Achieved production and shipments records at the Russian mills Developed and validated Bauxite Residue Neutralization Continued work on defense industry products
Slide 8: Growth, Sustainable Development and Portfolio Management
Growth, Sustainable Development and Portfolio Management – Received formal environmental approval by the Western Australian government to proceed with the Wagerup refinery expansion project – Secured five-year power supply that will allow us to operate two- thirds of the Intalco smelter’s capacity –
Slide 9: Global Environment: Premiums Continue to Strengthen
Global Environment Premiums Continue to Strengthen Source: Platts
Slide 10: Global Environment: Days of Consumption
Source: IAI, Reuters and LME Global Environment Days of Consumption
Slide 11: LME 3-Month Price Remains Strong
LME 3-Month Price Remains Strong
Slide 12: Joseph Muscari, Executive Vice President, Chief Financial Officer
[Alcoa logo] Joseph Muscari Executive Vice President Chief Financial Officer
Slide 13: 3rd Quarter 2006 Financial Overview
Income from continuing operations of $540 million ($0.62 per share) Revenues of $7.63 billion Cash from operations of $748m which includes a discretionary pension contribution of $200m Capital expenditures were $737 million Debt-to-cap in target range at 32.8% Trailing four quarters ROC of 12.2%; RO
Slide 14: 3rd Quarter 2006 Financial Review
3 Quarter 2006 Financial Review In Millions 2Q'06 3Q'06 Change Sales $7,797 $7,631 ($166) Cost of Goods Sold $5,827 $6,015 $188 % of Sales 74.7% 78.8% 4.1 pts. SG&A $354 $326 ($28) % of Sales 4.5% 4.3% (0.2) pts. Restructuring and Other Charges ($9) ($3) $6 Interest Expense $98 $101 $3 Other Income,
Slide 15: Quarter vs. Quarter Bridge
3 Quarter vs. 2 Quarter Bridge Income from Continuing Operations ($) millions rd nd $300 $550 $800
Slide 16: 3rd Quarter 2006 Financial Review
rd Quarter 2006 Financial Review In Millions 3Q'05 3Q'06 Change Sales $6,401 $7,631 $1,230 Cost of Goods Sold $5,263 $6,015 $752 % of Sales 82.2% 78.8% (3.4) pts. SG&A $304 $326 $22 % of Sales 4.7% 4.3% (0.4) pts. Restructuring and Other Charges $7 ($3) ($10) Interest Expense $96 $101 $5 Other Incom
Slide 17: YTD 2005 vs. YTD 2006 ATOI Bridge
YTD 2005 vs. YTD 2006 ATOI Bridge ($) millions Segment ATOI 1,587 2,624 $1,250 $1,500 $1,750 $2,000 $2,250 $2,500 $2,750
Slide 18: 3rd Quarter 2006 Cash Flow Review
Working Capital / DWC Capex Debt to Capital Cash from Operations rd Quarter 2006 Cash Flow Review
Slide 19: Strong Performance Trends: Bloomberg ROC
Bloomberg ROC* Segment ATOI and Revenue Strong Performance Trends
Slide 20: Alumina
Alumina 3Q vs 3Q 3Q vs 2Q 3Q’06 74% (3%) ATOI ($MM) 38% 3% rd Party Sales ($MM) 5% 4% 3,890 Production (kmt) 9% 5% 2,205 3 Party Shipmts (kmt) 3 Quarter Highlights Increased shipments and quarterly production record for the entire system Energy cost inflation Customer contract mix 3 Quarter Dynamics
Slide 21: Primary Metals
Primary Metals rd Quarter Highlights rd Quarter Dynamics th Quarter Outlook ATOI Performance Lower LME price Increased direct material costs Unfavorable currency Approximate 2% production increase expected LME linked costs will decrease Average Sept cash LME = $2,472/MT 3Q vs 3Q 3Q vs 2Q 3Q’06 106%
Slide 22: Flat-Rolled Products
Flat-Rolled Products Can Sheet Aerospace Automotive Building & Construction Distribution Industrial rd Quarter Highlights rd Quarter Dynamics th Quarter Outlook ATOI Performance Kitts Greens production fully restored Aerospace demand to remain strong Some weakness in common alloy as distributors adj
Slide 23: Engineered Solutions
Engineered Solutions (2) (6) (3) Other 2Q06 Total Investment Castings, Forgings, Fasteners AFL, Auto Castings and Structures (12) 3Q05 (9) 3Q06 ATOI ($MM) rd Quarter Dynamics th Quarter Outlook AFL, Auto Castings & Structures Seasonal declines and North America automotive production curtailment Inve
Slide 24: Extruded & End Products
Extruded & End Products (2) (1) (3) Alcoa Custom Extruded Solutions and Other 3Q06 2Q06 3Q05 Total Global Engineered Products, Building & Construction Systems and Russia Commercial Vehicle Aerospace Automotive Building & Construction Distribution Industrial ATOI ($MM) th Quarter Outlook Improved mix
Slide 25: Packaging & Consumer
Packaging & Consumer (2) (2) (1) Other (1) 2Q06 Total Reynolds Food Packaging and Flexible Packaging Closure Systems and Consumer Products 3Q05 (4) 3Q06 ATOI ($MM) rd Quarter Dynamics th Quarter Outlook Normal seasonal volume decreases Cost inflation in resin Positive lagged effect of passing throug
Slide 26: 4th Quarter 2006 Outlook Summary
th Quarter 2006 Outlook Summary Strong end markets with the exception of N.A. automotive and housing construction Strong market fundamentals continue Strong and improving ROC trend Energy costs remain a challenge; however, LME linked costs will decrease Strong cash generation
Slide 27: Strong Performance Trends: Bloomberg ROC Trailing Months
Bloomberg ROC Trailing 12 Months Including Growth Capex Bloomberg ROC Trailing 12 Months Excluding Growth Capex Cash from Operations Strong Performance Trends
Slide 28: 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
Slide 29: [Alcoa logo]
[Alcoa logo]
Slide 30: Appendix
[Alcoa logo] Appendix
Slide 31: 3rd Quarter 2006 Cash Flow Review
rd Quarter 2006 Cash Flow Review $ In Millions 3Q'05 3Q'06 Net Income $289 $537 DD&A Change in Working Capital Other Adjustments (31) Pension Contributions (318) (242) Cash From Operating Activities Dividends to Shareholders (131) (131) Change in Debt (60) Other Financing Activities (130) Cash From
Slide 32: Reconciliation of Return on Capital
Reconciliation of Return on Capital Return on Capital (ROC) is presented based on Bloomberg Methodology which calculates ROC based on trailing four quarters. 3Q'06 2Q'06 1Q'06 4Q'05 3Q'05 2006 YTD Bloomberg 3Q'06 Bloomberg 2Q'06 Bloomberg 1Q'06 Bloomberg 2005 YTD Bloomberg In Millions Annlzd Method
Slide 33: Reconciliation of Adjusted Return on Capital
Reconciliation of Adjusted Return on Capital Return on capital, excluding growth investments is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because it provides greater insight with respect to the underlying operating performance of the company’s pro
Slide 34: Days of Working Capital Definition
Days of Working Capital Definition Days Working Capital (in Millions) 3Q '05 4Q '05 3Q '06 Receivables from customers, less allowances $2,997 $2,860 $3,523 Add: Inventories $3,453 $3,392 $4,064 Less: Accounts payable, trade $2,325 $2,570 $2,700 Working Capital $4,125 $3,682 $4,887 Sales $6,401 $6,53
Slide 35: Reconciliation of ATOI to Net Income
Reconciliation of ATOI to Net Income $ 537 $ 744 $ 608 $1,233 $ 224 $ 289 $ 460 $ 260 Consolidated net income (7) (62) (58) Other (1) (3) (5) (6) (22) (30) (9) Discontinued operations (1) (197) (18) (5) (144) (30) Restructuring and other charges (64) (82) (89) (312) (88) (82) (73) (69) Corporate exp