Alcoa Corporation · NYSE:AA
Alcoa — Merrill Lynch Global Metals, Mining and Steel Conference 2005
20 slides from Alcoa's conference presentation, May 10, 2005
Slide 1: Merrill Lynch Global Metals, Mining and Steel Conference
Exhibit Merrill Richard Executive May 10,Lynch 99.2 B. 2005 Vice Kelson Global President, Metals, Chief Mining Financial and Steel Officer Conference
Slide 2: Forward-Looking Statements
Forward-Looking Today’s involve factors for 2 the quarter that known discussion could ended andcause Statements may unknown March results include 31, risks to2005 “forward-looking differ andfiled uncertainties. materially with thestatements” from Securities Alcoa’s thoseactual expressed and within E
Slide 3: The Alcoa Investment Opportunity
The Alcoa Values Broad Unmatched 3 market driven Investment growth and organization geographic opportunities Opportunity presence Significant Commitment upside potential to operational excellence through the application of ABS
Slide 4: Values Driven Organization: Safety Lost Workday Rate
Values Lost 24 0.0 0.2 0.4 0.6 1996 0.075 0.07 0.09 0.12 0.15 0.16 0.18 0.23 0.36 0.46 0.49 Rate 4 LWD Work (injuries 1997 Driven inDay 1998 66per Organization million Incident 1999 200,000 2000 hours Rate hrs. 2001 worked worked) 2002 in 2003 1Q,2005 Excludes 2004recently 2005 1Qacquired 2005 Miles
Slide 5: Overview: Sales, EPS, ROC, CFO, Capex
2002 Overview Sales EPS ROC CFO Capex * Engineered Extruded 14% 20% Flat 17% Primary 2004 8% Alumina 16% Building Other Commercial 11% Total 25% Upstream 26% Packaging 12% Auto 9% Aero 6% 5 Income Rolled *$1.8 2003 Sales does 4.1% $19.9 $0.61 $1.3 Metals and and from Bnot 2004 by 7.0% Products Solut
Slide 6: Broad Geographic Presence
Broad 450 2004 6 6% 11% 22% 61% US ROW Europe Pacific Locations Sales Geographic by Geography 131,000 Presence Employees
Slide 7: Global Alumina
Global Alumina US: Europe: Latin Australia: Alcoa Low In-situ Growth Targeting Brownfield 2002 Production Total (mmt) ATOI ATOI% 7 sales1cost 2003 Sales America, $315 2.3 Advantages bauxite Refining & of 1production 3-4% mmt 1.3 3Margin 11.7% 2004 13.0 $2.7 $415 opportunities 7.8 mmt for Caribbean:
Slide 8: Primary Metals
Primary Global Canada: US: Europe: Latin Africa: Australia: 2002 Production Total (mmt) ATOI Alcoa sales Largest Growth Capacity 8 opportunity 10 2003 Sales America: $650 Advantages Smelting 1.8 1global & 8Metals 3restarts 0.1 0.8 2% 1.0 Margin 2004 mmt 3.5 $5.8 $657 0.4 mmt of mmt mmt smelting 3.5
Slide 9: Flat-Rolled Products
Flat Global 15 11 2 4 2002 Shipments Total (mmt) ATOI lb Alcoa Integrated Growth Aerospace practice 9 Sites (cents) Sites Rolled 2003 Sales $220 per Advantages Rolling & implementation 5.6 aluminum Margin build 1.77 2004 $4.7 Products $221 5.5 System 1.82 Brates $246 5.4 Improvement $4.9 2.05 supply
Slide 10: Extruded Products
Extruded 36 5 24 1 2002 Shipments Total (kmt) ATOI lb Alcoa Integrated Growth system Low Global 10Sites Site (cents) Sites cost 2003 Sales $33 per Advantages Extrusions best &and country 1.7 $52 aluminum Margin 882 2004 $3.4 practice 2.7 End $73 891 $3.6 3.7 sourcing Products and Improvement 895 imp
Slide 11: Engineered Solutions
Engineered Global 61 7 32 4 2 2002 Total ATOI Alcoa sales Premier #1 distribution High Growth Strong 11 Honduras Sites Sites in 2003 growth aluminum Sales $128 Advantages organic Engineered & position % Margin 2004 $4.0 $180 Solutions systems opportunities ofgrowth 3.2% truck $4.4 in $211 Improvemen
Slide 12: Packaging and Consumer
Packaging 76 14 9 2002 Total ATOI Alcoa sales Leading Global Growth Increasing 12Sites Sites 2003 Sales $195 Advantages Packaging reach & brands % Margin ability and 2004 $2.8 $214 of inConsumer Closures 7.0% B$168 to and Improvement $3.1 cover 6.9% Consumer Bproduction $3.2 raw 5.3%material BOpport
Slide 13: A History of Value Creation
A History Metals 1995 CSFB Source: 2004 2003 2002 Alcoa Economic Steel, Terbuka, 13 1996 Alcan, has Holt Industry Mittal of created Profit 1997 Value Anglo Steel, 1998 Pool* isvalue defined Creation American Nippon 1999 –inMetals six as 2000 the Platinum, Steel, of and the 2001 sumNoranda, last Mini
Slide 14: Consistent Cash Generation
Consistent 2001 Cash ($ Capex Debt 50% 14 1Q05 1Q04 1Q03 1Q02 1Q01 1Q00 1Q99 1Q98 billions) 45% to 2002 From Total 40% Cash 2003 Operations Ops Capital 35% Generation 200430% & Capital 25%Provides Spending Opportunities $2.4 $1.2for $1.8 Growth $1.3 $2.4 $0.9 $2.2 $1.1
Slide 15: Growth Opportunities and Costs
Opportunities Costs Cost Both Markets Primary Growth 15 savings alumina & metal Expenditures targeted and in restarts 2005 aluminum towill morecontribute projected than offset ~to220 input remain kmtand Alumina in energy deficitproduction Aerospace cost increases increases (20%) Global andofpurchasi
Slide 16: Progress from First Quarter Income Initiatives
Progressfrom Income Financial initiative Restarts Growth Continued Telecommunications 16 atin On ABI, progress the acontinuing sequential 1st Wenatchee Quarter ontransaction projects operations basis, and in four Massena Divested Australia, of of$0.31/share, six Integris segments Brazil,and includin
Slide 17: Second Quarter 2005 Outlook
Outlook 2Q Upstream Positives construction, Continued Negatives 17 ‘05 Outlook Summary demand input cancost sheet, stillpressure strong closures Restarts (energy, and consumer in caustic, primary carbon, products metalsresin, will coatings) contributeGM additional and Fordvolume build Aerospace, rat
Slide 18: The Alcoa Investment Opportunity
The Alcoa Values Broad Unmatched 18 market driven Investment growth and organization geographic opportunities Opportunity presence Significant Commitment upside potential to operational excellence through the application of ABS
Slide 19: Appendix
Appendix
Slide 20: Return on Capital Reconciliation
Reconciliation In Net Interest Numerator (After-tax) ST LT Preferred Minority Common Denominator Total) ROC Note: 20 Millions Borrowings Income 8.4% Bloomberg $20,852 Expense Interest Equity (Sum 7.0% 2004 $1,310 (Sum of $20,194 $6,019 $767 $55 $201 $12,633 4.1% 2003 Total) $242 $1,378 Return Method
Alcoa — Merrill Lynch Global Metals, Mining and Steel Conference 2005 on 6ix