Slide 1: Second Quarter Earnings Conference
1 [ [Alcoa logo] nd Quarter Earnings Conference July 8, 2014 Exhibit 99.2
Slide 2: Cautionary Statement
Cautionary Statement 2 [Alcoa logo] Forward-Looking Statements This presentation contains statements that relate to future events and expectations and as such constitute forward-looking statements. Forward-looking statements include those containing such words as “anticipates,” “estimates,” “expects
Slide 3: 2Q 2014 Overview
3 Transformation Accelerates - All Groups Improve QoQ and YoY 1) $8.1 billion debt and $518 million cash from operations 2) Alcoa Minerals of Jamaica bauxite mine and alumina refinery Any reference in our presentation to historical EBITDA means adjusted EBITDA, for which we have provided calculation
Slide 4: William Oplinger, EVP and Chief Financial Officer
4 [ [Alcoa logo] William Oplinger Executive Vice President and Chief Financial Officer July 8, 2014
Slide 5: Income Statement Summary
Income Statement Summary 5 Any reference in our presentation to EBITDA means adjusted EBITDA, for which we have provided calculations and reconciliations in the appendix. See appendix for Adjusted Income reconciliation. 2Q13 1Q14 2Q14 Prior Year Change Sequential Change [ [Alcoa logo] $ Millions, ex
Slide 6: Special Items
Special Items 1) Total restructuring-related charges in 2Q14 of $54 million (83 percent non-cash, 17 percent cash) See appendix for Adjusted Income reconciliation 6 1Q14 2Q14 Income Statement Classification Segment [ [Alcoa logo] $ Millions, except per-share amounts Net Income (Loss) ($178) $138 Net
Slide 7: Volume, productivity and price drives sequential improvement
Volume, productivity and price drives sequential improvement 7 See appendix for Adjusted Income reconciliation [ [Alcoa logo] Net Income excluding Special Items ($ Millions) Market +$33 Performance +$81 Cost Headwinds/Other +$4 2Q 14 Price / Mix Cost Increases / Other Raw Materials Energy Productivi
Slide 8: Earnings nearly triple year-over-year on productivity and pricing
Earnings nearly triple year-over-year on productivity and pricing 8 See appendix for Adjusted Income reconciliation [ [Alcoa logo] Net Income excluding Special Items ($ Millions) Market -$10 Performance +$263 Cost Headwinds/Other -$113 2Q 14 Cost Increases / Other Raw Materials Energy Productivity P
Slide 9: Record results for Engineered Products and Solutions
Any reference in our presentation to EBITDA means adjusted EBITDA, for which we have provided calculations and reconciliations in the appendix. Record results for Engineered Products and Solutions 9 [ [Alcoa logo] 2 nd Quarter Results 2 nd Quarter Business Highlights 3 rd Quarter Outlook 2 nd Quarte
Slide 10: GRP improves on higher seasonal volume and productivity
GRP improves on higher seasonal volume and productivity 10 Any reference in our presentation to EBITDA means adjusted EBITDA, for which we have provided calculations and reconciliations in the appendix. AIVs = Aluminum intensive vehicles. [ [Alcoa logo] 2 nd Quarter Results 2 nd Quarter Business Hig
Slide 11: Alumina earnings reflect portfolio actions, lower volumes, cost increases
Alumina earnings reflect portfolio actions, lower volumes, cost increases 11 [ [Alcoa logo]
Slide 12: Strong Primary earnings reflect portfolio actions, power sales, premiums
Strong Primary earnings reflect portfolio actions, power sales, premiums 12 [ [Alcoa logo]
Slide 13: Four day year-over-year increase in average DWC
Four day year-over-year increase in average DWC See appendix for days working capital reconciliation 13 [ [Alcoa logo] days lower Average Days Working Capital since Second Quarter 2009 days lower days lower days lower days higher 18 day reduction since 2Q09 4 day increase since 2Q2013 Driver Horizon
Slide 14: Second Quarter Cash Flow Overview
2 nd Quarter Cash Flow Overview 14 See appendix for Free Cash Flow reconciliation ($ Millions) 2Q13 1Q14 2Q14 Cash from Operations $514 ($551) $518 Cash from Financing Activities ($568) $10 $281 Cash from Investing Activities ($276) ($240) ($286) [ [Alcoa logo] Net Income before Noncontrolling Inter
Slide 15: Debt, Net Debt, and Debt-to-Capital
15 See appendix for Net Debt reconciliation Lowest Net Debt since September 2007 7,082 6,872 6,882 8,338 9,816 6,968 7,432 7,622 [ [Alcoa logo] 1,481 1,543 1,939 1,861 1,437 1,183 2Q14 8,055 1Q14 7,747 2013 8,319 2012 8,829 2011 9,371 2010 9,165 2009 9,819 2008 10,578 (Millions) Debt to Cap Cash Net
Slide 16: On track to meet our 2014 targets
16 On track to meet our 2014 targets [ [Alcoa logo] Overarching 2014 Financial Target Taking the right actions On track to meet our 2014 targets Attain 30%-35% Debt-to-Capital Build Value-Add with Growth Capital of $500M Drive Productivity Gains of $850M Invest in Saudi JV $125M Manage Sustaining Ca
Slide 17: Market fundamentals remain positive
17 Market fundamentals remain positive See appendix for full scale charts [Alcoa logo]
Slide 18: Klaus Kleinfeld, Chairman and CEO
Klaus Kleinfeld Chairman and Chief Executive Officer July 8, 2014 [Alcoa logo]
Slide 19: Aerospace and Automotive markets remain strong; forecast unchanged
Aerospace and Automotive markets remain strong; forecast unchanged 19 Source: Alcoa analysis 1) International Air Transport Association 2014 Expectations [ [Alcoa logo]
Slide 20: Global HDT market steady, stronger N.A.; Packaging +2% to 3% globally
Global HDT market steady, stronger N.A.; Packaging +2% to 3% globally 20 Source: Alcoa analysis HDT = Heavy duty truck and trailer [ [Alcoa logo]
Slide 21: Solid commercial B&C growth; Global airfoil market down YoY
Solid commercial B&C growth; Global airfoil market down YoY 21 Source: Alcoa analysis B&C = Building and construction [ [Alcoa logo] End Market Growth Global and Regional Commentary Industrial Gas Turbines Building and Construction -8% to -12% Global airfoil market decline • • • N.A.: Natural gas pr
Slide 22: Executing our Strategy - Alcoa's Transformation Continues
Executing our Strategy - Alcoa’s Transformation Continues 22 Invented Aluminum Process Aluminum Applications & Globalization Lightweight Multi-Material Innovation Powerhouse Highly Competitive Commodity Business [ [Alcoa logo] Multi-Material Solutions
Slide 23: Lightweight Solutions: Fuel Efficiency + High Performance
Lightweight Solutions: Fuel Efficiency + High Performance 1) Versus conventional aluminum 2) Based on conversion from Standard Steel to Wide-Base Aluminum 3) EDAG April 2013 AIV = Aluminum intensive vehicle 23 [ [Alcoa logo] Alcoa’s innovative lightweighting solutions Ultra ONE™: World ’ s Lightest
Slide 24: Expertise provides solutions in a Multi-Material Environment
24 Expertise provides solutions in a Multi-Material Environment 1) The graphics represent a sample metallic and composite wing ; not attributed to a specific aircraft platform 2) Spars on composite wings are primarily CFRP (Carbon Fiber Reinforced Polymer), with some Al and Ti applications Note: Rev
Slide 25: Alcoa's Innovation Expertise Shines in our product offerings
Advanced Coatings: High Temp Protection Dura-Bright ® EVO™: Low Maintenance Reynobond ® : Unique Building Panels Alcoa 951: Breakthrough Durable Bonding Alcoa’s Innovation Expertise Shines in our product offerings 25 1) $900M each from Engineered Products and Solutions and Global Rolled Products inn
Slide 26: Capturing Growth in Advanced Jet Engine Components via Investments
26 Capturing Growth in Advanced Jet Engine Components via Investments APP = Alcoa Power and Propulsion
Slide 27: Firth Rixson Acquisition: Strengthening Alcoa's Value-Add Suite
Firth Rixson Acquisition: Strengthening Alcoa’s Value-Add Suite 27 [ [Alcoa logo] Strong Aerospace Offering Array of Material Composition Leading Edge Technology Firth Rixson portfolio overview Largest seamless Rings (Ni-based alloys, TI) 200” in diameter Full Range of forged closed -die aero Engine
Slide 28: Remaining Cost Focused; Improving a Strong Alumina Position
Remaining Cost Focused; Improving a Strong Alumina Position 1) All figures are pretax and pre-minority interest. 2009/2010 represent net productivity; 2011-2014 represent gross productivity 2) Alcoa Minerals of Jamaica bauxite mine and alumina refinery 28 [ [Alcoa logo] 1 2 3 Targeting 21 st Percent
Slide 29: Building a Highly Competitive Smelting Business
Building a Highly Competitive Smelting Business 1) All figures are pretax and pre-minority interest. 2009/2010 represent net productivity; 2011-2014 represent gross productivity 2) Pt. Henry closure of 190 kmt will occur in 3Q 2014 Operating capacity = Alcoa total base capacity less idled capacity 2
Slide 30: Transforming Alcoa – Creating Compelling Sustainable Value
Transforming Alcoa – Creating Compelling Sustainable Value 30 [ [Alcoa logo] Value-Add and Upstream transformation strategy
Slide 31: Advancing each generation.
Advancing each generation.
Slide 32: Additional Information
Additional Information 32 [ [Alcoa logo] Kelly Pasterick Vice President, Investor Relations Alcoa 390 Park Avenue New York, NY 10022-4608 Telephone: (212) 836-2674 www.alcoa.com
Slide 33: Annual Sensitivity Summary
Annual Sensitivity Summary 33 Currency Annual Net Income Sensitivity LME Aluminum Annual Net Income Sensitivity [ [Alcoa logo] +/- $100/MT = +/- $240 million Australian $ +/- $11 million per 0.01 change in USD / AUD Brazilian $ +/- $ 3 million per 0.01 change in BRL / USD Euro € +/- $ 2 million per
Slide 34: Revenue Change by Market
Revenue Change by Market 34 2Q’14 Third-Party Revenue Sequential Change Year-Over-Year Change [ [Alcoa logo] 1% 5% 9% 11% 7% 15% 14% 5% (10%) 17% (1%) 4% 4% 17% (5%) (9%) (5%) 27% (7%) 2% 17% 4% 7% 7% 8% 2% 13% 1% 13% 28% Aerospace Automotive B&C Comm. Transport Industrial Products IGT Packaging Dis
Slide 35: Special Items
Special Items See appendix for Adjusted Income reconciliation. 35 Pre-tax, Before NCI After-tax, After NCI 1Q14 2Q14 1Q14 2Q14 Income Statement Classification Segment [ [Alcoa logo] $ Millions, except per-share amounts Net Income (Loss) ($274) $207 ($178) $138 Net Income (Loss) Per Diluted Share ($0
Slide 36: Composition of Regional Premium Pricing Convention
Composition of Regional Premium Pricing Convention 36 [ [Alcoa logo] 2014E Shipments Regional Premiums Estimated Pricing Convention 55% Midwest – Platts 15-day lag 30% Rotterdam DDP – Metal Bulletin 45-day lag 10% CIF Japan – Platts Month prior to Quarter start 5% Negotiated Annual
Slide 37: Alcoa smelting closures and curtailments
Alcoa smelting closures and curtailments when announced actions are complete (1) Announced, but not executed 37 [ [Alcoa logo] Location Year kmt Baie Comeau 2008 Eastalco 2010 Badin 2010 Warrick 2010 Tennessee 2011 Rockdale 2011 Baie Comeau 2013 Fusina 2013 Massena East 2013 Massena East 2014 Point
Slide 38: All-in prices down despite increase in regional premiums
All-in prices down despite increase in regional premiums 38 [ [Alcoa logo]
Slide 39: Composition of Upstream Production Costs
Composition of Upstream Production Costs 1 Natural gas information corresponds to Point Comfort, as Australia is priced on a rolling 16 quarter average 39 [ [Alcoa logo] Refining Cost Structure Smelting Cost Structure Fuel Oil 13% Natural gas 11% Caustic 10% Bauxite 24% Conversion 42% Input Cost Inv
Slide 40: Reaffirm 7% global demand growth
Reaffirm 7% global demand growth 40 Source: Alcoa estimates, Brook Hunt, CRU, Harbor [ [Alcoa logo] 25.4 6.6 6.4 4.2 2.1 2.0 2.0 1.1 2.0 1.0 3% 10% 4% 2% 5% 5% 8% 8% 4% 5% 2014E 52.8 mmt * Other includes Africa, E.Europe , Latin America ex Brazil, and Oceania 2014 Primary Aluminum Consumption (mmt),
Slide 41: Metal deficit rising, alumina surplus shrinking
Source: Alcoa analysis, Brook Hunt, CRU, CNIA, NBS, Chinese Customs Metal deficit rising, alumina surplus shrinking 41 [ [Alcoa logo]
Slide 42: Inventories declined 5 days in 2Q
Source: Alcoa estimates, IAI, LME, Marubeni, Shanghai Metal Exchange Inventories declined 5 days in 2Q 42 [ [Alcoa logo]
Slide 43: Premiums move to record highs
Premiums move to record highs Source: Monthly average of daily prices - Platts Metals Week 43 [ [Alcoa logo]
Slide 44: Reconciliation of ATOI to Consolidated Net Income (Loss) Attributable to Alcoa
Reconciliation of ATOI to Consolidated Net Income (Loss) Attributable to Alcoa 44 [ [Alcoa logo] (in millions) 1Q13 2Q13 3Q13 4Q13 2013 1Q14 2Q14 Total segment ATOI $351 $304 $338 $224 $1,217 $325 $418 Unallocated amounts (net of tax): Impact of LIFO (2) (7) (8) Interest expense (75) (76) (70) (73)
Slide 45: Reconciliation of Adjusted Income
Reconciliation of Adjusted Income 45 [ [Alcoa logo] (in millions, except per - share amounts) (Loss) Income Diluted EPS Quarter ended Quarter ended June 30, March 31, June 30, June 30, March 31, June 30, 2013 2014 2014 2013 2014 2014 Net (loss) income attributable to Alcoa $(119) $(178) $138 $(0.11)
Slide 46: Reconciliation of Alcoa Adjusted EBITDA
Reconciliation of Alcoa Adjusted EBITDA 46 [ [Alcoa logo] ($ in millions) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2Q13 1Q14 2Q14 Net income (loss) attributable to Alcoa $938 $1,310 $1,233 $2,248 $2,564 $(74) $(1,151) $254 $611 $191 $(2,285) $(119) $(178) $138 Add: Net income (loss) at
Slide 47: Reconciliation of Alumina Adjusted EBITDA
Reconciliation of Alumina Adjusted EBITDA 47 [ [Alcoa logo] ($ in millions, except per metric ton amounts) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2Q13 1Q14 2Q14 After-tax operating income (ATOI) $415 $632 $682 $1,050 $956 $727 $112 $301 $607 $90 $259 $64 $92 $38 Add: Depreciation, de
Slide 48: Reconciliation of Primary Metals Adjusted EBITDA
Reconciliation of Primary Metals Adjusted EBITDA 48 [ [Alcoa logo] ($ in millions, except per metric ton amounts) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2Q13 1Q14 2Q14 After-tax operating income (ATOI) $657 $808 $822 $1,760 $1,445 $931 $(612) $488 $481 $309 $(20) $(32) $(15) $97 Add:
Slide 49: Reconciliation of Global Rolled Products Adjusted EBITDA
Reconciliation of Global Rolled Products Adjusted EBITDA 49 [ [Alcoa logo] ($ in millions, except per metric ton amounts) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2Q13 1Q14 2Q14 After-tax operating income (ATOI) $232 $223 $232 $290 $300 $317 $151 $(41) $(106) $241 $260 $346 $
Slide 50: Reconciliation of Engineered Products and Solutions Adjusted EBITDA
Reconciliation of Engineered Products and Solutions Adjusted EBITDA 50 [ [Alcoa logo] ($ in millions) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2Q13 1Q14 2Q14 After-tax operating income (ATOI) $126 $161 $276 $382 $423 $522 $311 $419 $537 $612 $726 $193 $189 $204 Add: Depreciation, deple
Slide 51: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow 51 [ [Alcoa logo] (in millions) Quarter ended 30-Sep-11 31-Dec-11 31-Mar-12 30-Jun-12 30-Sep-12 31-Dec-12 31-Mar-13 30-Jun-13 30-Sep-13 31-Dec-13 31-Mar-14 30-Jun-14 Cash from operations $489 $1,142 $(236) $537 $263 $933 $(70) $514 $214 $920 $(551) $518 Capital expen
Slide 52: Reconciliation of Free Cash Flow, continued
Reconciliation of Free Cash Flow, continued 52 [ [Alcoa logo] (in millions) Quarter ended 31-Dec-08 31-Mar-09 30-Jun-09 30-Sep-09 31-Dec-09 31-Mar-10 30-Jun-10 30-Sep-10 31-Dec-10 31-Mar-11 30-Jun-11 Cash from operations $608 $(271) $328 $184 $1,124 $199 $300 $392 $1,370 $(236) $798 Capital expendit
Slide 53: Days Working Capital
Days Working Capital 53 [ [Alcoa logo] Days Working Capital = Working Capital divided by (Sales/number of days in the quarter). *The deferred purchase price receivable relates to an arrangement to sell certain customer receivables to several financial institutions on a recurring basis. Alcoa is addi
Slide 54: Reconciliation of Net Debt
Reconciliation of Net Debt 54 [ [Alcoa logo] Net debt is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because management assesses Alcoa’s leverage position after factoring in available cash that could be used to repay outstanding debt. (in millions)
Slide 55: Reconciliation of Net Debt-to-Capital
Reconciliation of Net Debt-to-Capital 55 [ [Alcoa logo] ($ in millions) March 31, 2014 June 30, 2014 Debt-to-Capital Cash and Cash Equivalents Net Debt-to-Capital Debt-to-Capital Cash and Cash Equivalents Net Debt-to-Capital Total Debt Short-term borrowings $53 $133 Commercial paper – Long-term debt