Slide 1: 2nd Quarter 2009 Earnings Conference
Exhibit 99.2 Alcoa Logo 2 nd Quarter 2009 Earnings Conference July 8, 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: 2nd Quarter 2009 Financial Overview
Alcoa Logo 2nd Quarter 2009 Financial Overview Loss from continuing operations of $312 million, or $0.32 per share – Excluding restructuring, loss of $256 million or $0.26 per share Realized aluminum price of $1,667/MT – Increase of 6% sequentially Cash from operations of $328 million – Increase of
Slide 5: Sequential Income Statement Summary
Alcoa Logo Sequential Income Statement Summary $ Millions 1Q’09 2Q’09 Change Sales $4,147 $4,244 $97 Cost of Goods Sold $4,143 $3,966 ($177) COGS % Sales 99.9% 93.4% (6.5 % pts.) Selling, General Administrative, Other $244 $240 ($4) SGA % Sales 5.9% 5.7% (0.2 % pts.) Restructuring and Other Charges
Slide 6: 2Q 2009 vs. 1Q 2009 Earnings Bridge
Alcoa Logo 2Q 2009 vs. 1Q 2009 Earnings Bridge Loss from Continuing Operations excluding Restructuring & Other Special Items (in millions) 1Q09 Volume Price/Mix Currency Productivity LME Curtailment Taxes Other 2Q09 ($23) ($256) ($49) $39 ($327) $104 ($477) $27 $153 ($8) ($22) See Appendix for Recon
Slide 7: YTD 2009 vs. YTD 2008 Earnings Bridge
Alcoa Logo YTD 2009 vs. YTD 2008 Earnings Bridge Income(Loss)fromContinuingOperationsexcluding Restructuring & OtherSpecialItems(inmillions) YTD 2008 Volume Price/Mix Currency Productivity LME Curtailments Other YTD 2009 $599 $1,185 $902 ($442) $275 ($149) ($1,810) ($90) ($18) ($733) See Appendix fo
Slide 8: Rapid Reduction in Headcount In 1H'09
Alcoa Logo Rapid Reduction in Headcount In 1H’09 Headcount Reductions Announced by Quarter Completed Not Yet Completed 1,950 21,650 4,400 15,300 2009 cash savings of $320 million - Run rate savings of $520 million 2H'08 Q1'09 Q2'09 Total Charges 224 48 38 310 ($ Millions) 8
Slide 9: Alumina
Alcoa Logo Alumina 2nd Quarter Highlights 2 nd Quarter Business Conditions 2Q 08 1Q 09 2Q 09 Improved operations globally – including record production at Pinjarra Production (kmt) 3,820 3,445 3,309 Productivity and material cost improvements partially offset currency impacts 3 rd Party Shipments (k
Slide 10: Primary Metals
Alcoa Logo Primary Metals 2 nd Quarter Highlights 2 nd Quarter Business Conditions 2Q 08 1Q 09 2Q 09 Realized pricing up 6% Production (kmt) 1,030 880 906 Increased production 3% due to full quarter of rd Norwegian smelters and record Iceland output, 3 Party Shipments (kmt) 750 683 779 partially off
Slide 11: Flat-Rolled Products
Alcoa Logo Flat-Rolled Products 2nd Quarter Highlights 2 nd Quarter Business Conditions $ Millions 2Q 08 1Q 09 2Q 09 Realized productivity gains from procurement Flat-Rolled Products, and headcount reduction – Year-to-date, excl Russia, China & Other 69 3 2 reduced headcount by 3,000 of which 40% in
Slide 12: Engineered Products and Solutions
Alcoa Logo Engineered Products and Solutions 2 nd Quarter Highlights 2 nd Quarter Business Conditions $ Millions 2Q 08 1Q 09 2Q 09 Productivity gains help partially offset weak market conditions Third Party Revenue 1,660 1,270 1,194 Weaker Aerospace and Building and ATOI 172 95 88 Construction deman
Slide 13: Significant Improvement in Free Cash Flow
Alcoa Logo Significant Improvement in Free Cash Flow Cash Flow Free Cash Flow (in millions) ($ Millions) 2Q'08 1Q'09 2Q'09 $200 $0 Net Income (Loss) $546 ($497) ($454) -$200 -$400 DD&A 317 283 317 -$600 -$800 Change in Working Capital 233 351 329 -$1,000 2Q'08 3Q'08 4Q'08 1Q'09 2Q'09 Taxes (113) (36
Slide 14: Strengthened Capital Market Position
Alcoa Logo Strengthened Capital Market Position Alcoa Debt & Equity Alcoa Credit Default Swaps 17.00 1,300 Alcoa Share Price ($) Alcoa 5-Year CDS (basis points) 16.00 Alcoa July 2013 Debt Yield (%) 1,200 15.00 1,100 14.00 1,000 13.00 900 12.00 11.00 800 10.00 700 9.00 600 8.00 500 7.00 400 6.00 5.00
Slide 15: Klaus Kleinfeld, President and Chief Executive Officer
Alcoa Logo Klaus Kleinfeld President and Chief Executive Officer
Slide 16: Challenging Market Conditions in 2009
Alcoa Logo Challenging Market Conditions in 2009 Alcoa End Markets: Current Assessment of 2009 Conditions Source: Alcoa analysis 16
Slide 17: Global Demand -7%, Unchanged From Q1'09 Outlook
Alcoa Logo Global Demand -7%, Unchanged From Q1’09 Outlook 2009 Projected Primary Aluminum Consumption by Region (in mmt) 34.5 Brazil 0.8 -5% 5% Russia 0.9 -8% 10% Other* 4.0 -2% -1% 4.3 -12% -5% Asia w/o China 2008 Global Demand Growth Rate: -3% (2008 ex China: -8%) 5.0 -15% -12% North America 2009
Slide 18: Shifting Inventory Patterns – Metal Moving to LME
Alcoa Logo Shifting Inventory Patterns – Metal Moving to LME Global Reported Primary Inventories Days Inventory Location 64 days of 70 consumption LME 60 Shanghai Japan Port 50 Producer 40 LME at 45 Days 30 20 10 Non-LME at 19 Days 0 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Source: IAI, Bloomberg 18
Slide 19: Product Inventories Have Seen Substantial Drawdown
Alcoa Logo Product Inventories Have Seen Substantial Drawdown U.S. Metal Service Center Inventory U.S. distributor Short Tons, stocks have declined Thousands 51% from October 600 2006 peak 500 400 -51% 300 200 100 0 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Source: MSCI 19
Slide 20: Premiums Responding to Tightness in the Supply Chain
Alcoa Logo Premiums Responding to Tightness in the Supply Chain Scrap Prices Have Increased Regional Premiums Beginning to Improve Scrap Price % 2009 YTD Change LME Oct-08 Midwest +15% 85% % Change Japan +87% Jun-09 150% Europe +134% 80% +5% pts 75% +13% pts +4% pts 100% 70% +6% pts 65% 60% 50% 55%
Slide 21: Global Supply and Demand Comparisons: 2009
Alcoa Logo Global Supply and Demand Comparisons: 2009 2009E Aluminum Supply / Demand Balance (in kmt) China Western World Deficit Surplus Jan-May 09 Primary Production Run 10,900 Jan-May 09 Primary Production 23,800 Rate (Annualized) Run Rate (Annualized) Announced Restarts to be implemented 1,300 A
Slide 22: Alumina Market Reaches Equilibrium in 2009
Alcoa Logo Alumina Market Reaches Equilibrium in 2009 2009E Alumina Supply / Demand Balance (in kmt) Global Equilibrium China Western World Jan-Mar 09 Alumina Production Run Jan-Mar 09 Alumina Production Run 19,000 51,500 Rate Rate Announced curtailments to be Announced curtailments to be 0 (1,400)
Slide 23: 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 24: $1 Billion Procurement Savings Realized to Date
Alcoa Logo $1 Billion Procurement Savings Realized to Date Procurement Efficiencies: Reduction Targets Reduction Targets by Spend Category Savings (millions) $2,000 2009E 2010E Strategic Raw Materials - 15% 18% 2/3 of full Alumina and Primary Metals year $1,500 Strategic Raw Materials - Flat- 2% tar
Slide 25: On Track for Carbon Products and Ahead on Caustic
Alcoa Logo On Track for Carbon Products and Ahead on Caustic Strategic Raw Material Performance and Reduction Targets Alcoa Global Coke Cost Alcoa Global Caustic Cost -34% -26% -58% -59% -37% -62% 2H'08 Q2'09 Target Year- Forecast Year- 2H'08 Q2'09 Target Year- Forecast Year- End 2009 End 2009 End 2
Slide 26: Leveraging Best Practices to Achieve Procurement Savings
Alcoa Logo Leveraging Best Practices to Achieve Procurement Savings Creating Competitive Alternatives for Coal Tar Pitch Levers Actions Alcoa Global Pitch Cost Expanding specifications Specifications Deploying best practices to mitigate industry wide pitch -7% -17% quality deterioration Expanding gl
Slide 27: Exceeded Full-Year Overhead Reduction Target in First Six Months
Alcoa Logo Exceeded Full-Year Overhead Reduction Target in First Six Months Overhead Rationalization: Reduction Targets and Savings Overhead Savings Target Savings (millions) 100% $400 $400M 134% of full year 80% target $268 $200 2008 A 2010 Target 2009 YTD 2009 Savings 2010 Savings Target vs. 2008
Slide 28: Year-to-date 2009 Capital Expenditures of $889 million
Alcoa Logo Year-to-date 2009 Capital Expenditures of $889 million Capital Expenditure Reduction: Annual CapEx ($ millions) $3,438 Growth Projects Project Start-Date - 48% Juruti Q3'09 São Luis Q3'09 Estreito Q4'10 $1,800 -53% $911 $850 2008 2009E 2010E 28
Slide 29: Achieved 85% of Working Capital Target in 1H'09
Alcoa Logo Achieved 85% of Working Capital Target in 1H’09 Working Capital Initiatives: Targets and Year-to-date Results Working Capital 2009 YTD Working Capital Days Reduction Targets Change ($ millions) $428 ($690) 85% of 100% full year -28% target 72% $942 $800 $680 $800M decrease in working capi
Slide 30: Aluminum is Infinitely Recyclable
Alcoa Logo Aluminum is Infinitely Recyclable Benefits of Aluminum Can Over PET bottles & Recycling Lifecycles 60 days 60 days Aluminum Can vs. PET bottles Recyclability 100% Recyclable, Infinitely. Recycling Rate is 2X of PET bottles Infinitely Only 3.5% of PET gets recycled Recyclable back into PET
Slide 31: Alcoa: One Stop Shop for Consumer Electronics Solutions
Alcoa Logo Alcoa: One Stop Shop for Consumer Electronics Solutions Customer Needs & Alcoa Offerings & Points of Differentiation Customer Needs Alcoa Offerings Differentiation Bold palette Longer lasting colors Colors Brushed and Anodized Superior look & feel vs. Magnesium or Plastic options Finish v
Slide 32: Alcoa Solutions for the Oshkosh M-ATV
Alcoa Logo Alcoa Solutions for the Oshkosh M-ATV High Strength Forged Suspension Components, Fasteners and CR56 Armor: Customer Needs Alcoa Solutions Maneuverability – on rugged terrain New Forged Suspensions Components - light weight and rugged for off road capability Blast Protection – against Imp
Slide 33: Signs of Stabilization Emerge From Near-term Catalysts
Alcoa Logo Signs of Stabilization Emerge From Near-term Catalysts Catalysts for Aluminum Industry Growth Near-Term Catalysts Signs of Stabilization China Supply / demand balance Key end-markets stabilizing off Urban construction +32% Light vehicles sales +14% 1Q’09 lows Curtailment Continued executi
Slide 34: 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
Slide 35: Alcoa Logo
Alcoa Logo 35
Slide 36: Announced Industry Curtailments Nearly Complete
Alcoa Logo Announced Industry Curtailments Nearly Complete Aluminum Supply: Curtailment Announcements by Producer (annualized kmt) Curtailment % of Production 0% 5% 10% 15% 20% 25% 30% 38,759 Hydro 1,769 513 513 Chalco 2,317 570 570 Alcoa 3,990 852 852 Rio Tinto Alcan 4,049 122 124 246 UC Rusal 4,49
Slide 37: 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 1Q09 2Q09 Total segment ATOI $ 668 $ 838 $ 665 $ 28 $ 2,199 $ (143) $ (132) Unallocated amounts (net of tax): Impact of LIFO (31) (44) (5) 73 (7) 29 39 Interest income 9 1
Slide 38: Reconciliation of Segment Information
Alcoa Logo Reconciliation of Segment Information (aluminum shipments in thousands of metric tons; dollars in millions) Flat-Rolled Products 1Q08 2Q08 3Q08 4Q08 2008 1Q09 Third-party aluminum shipments: As previously reported 610 591 580 515 2,296 455 Less: Global Hard Alloy Extrusions 21 20 18 16 75
Slide 39: Reconciliation of Adjusted (Loss) Income
Alcoa Logo Reconciliation of Adjusted (Loss) Income (in millions, except per share amounts) (Loss) Income (Loss) Income per Share Quarter ended Six months ended Quarter ended Six months ended March 31, June 30, June 30, June 30, March 31, June 30, June 30, June 30, 2009 2009 2008 * 2009 2009 2009 20
Slide 40: Reconciliation of Free Cash Flow
Alcoa Logo Reconciliation of Free Cash Flow (in millions) Quarter ended June 30, September 30, December 31, March 31, June 30, 2008 2008 2008 2009 2009 Cash from operations $ 1,007 $ (93) $ 608 $ (271) $ 328 Total capital expenditures (796) (877) (1,017) (471) (418) Free cash flow $ 211 $ (970) $ (4
Slide 41: Other Reconciliations
Alcoa Logo Other Reconciliations (in millions) Earnings before interest, taxes, depreciation, and amortization (EBITDA)* Quarter ended March 31, June 30, 2009 2009 Change Net loss attributable to Alcoa $ (497) $ (454) $ 43 Add: Noncontrolling interests 10 (5) (15) Loss from discontinued operations 1