Slide 1: 2nd Quarter 2010 Earnings Conference
Exhibit 99.2 [Alcoa Logo] 2nd Quarter 2010 Earnings Conference July 12, 2010
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 actu
Slide 3: Chuck McLane, Executive Vice President and CFO
[Alcoa Logo] Chuck McLane Executive Vice President and Chief Financial Officer
Slide 4: 2nd Quarter 2010 Financial Overview
[Alcoa Logo] nd 2 Quarter 2010 Financial Overview Income from Continuing Operations of $137 million, or $0.13 per share Revenue increase of 6% driven by higher volumes Cash Sustainability Initiatives continued to deliver EBITDA of $724 million, EBITDA Margin of 14.0% Free Cash Flow positive Debt to
Slide 5: Revenue Change by Market
[Alcoa Logo] Revenue Change by Market Sequential Year-Over-Year 2Q’10 Third Party Revenue Change Change Aerospace 5% (7%) 33% 14% Automotive (7%) 67% 3% B&C 9% 5% Comm. Transport 10% 50% 7% Industrial Products (1%) 47% 4% IGT 5% (32%) 5% Packaging 17% (14%) 2% Distribution/Other 23% 48% 13% 13% Alum
Slide 6: Sequential Income Statement Summary
[Alcoa Logo] Sequential Income Statement Summary $ Millions 1Q’10 2Q’10 Change Sales $4,887 $5,187 $300 Cost of Goods Sold $4,013 $4,210 $197 COGS % Sales 82.1% 81.2% (0.9 % pts.) Selling, General Administrative, Other $239 $208 ($31) SGA % Sales 4.9% 4.0% (0.9 % pts.) Restructuring and Other Charge
Slide 7: 2nd Quarter Restructuring and Special Items
[Alcoa Logo] nd 2 Quarter Restructuring and Special Items After-Tax & Non- Earnings Income Statement $ Millions Controlling Interests Per Share Classification Segment Restructuring ($20) Restructuring Corporate Discrete Tax Items $16 Taxes Corporate Special Items: $2 Revenue & Rockdale Luminant Liti
Slide 8: 2nd Quarter 2010 vs. 1st Quarter 2010 Earnings Bridge
[Alcoa Logo] nd st 2 Quarter 2010 vs. 1 Quarter 2010 Earnings Bridge Income (Loss) from Continuing Operations excluding Restructuring & Special Items ($ millions) $23 ($14) $139 $9 $16 $101 ($36) $40 See appendix for reconciliation 8
Slide 9: Alumina
[Alcoa Logo] Alumina nd nd 2 Quarter Highlights 2 Quarter Business Conditions 2Q 09 1Q 10 2Q 10 Realized third-party alumina price up 1% Production (kmt) 3,309 3,866 3,890 Currency benefit of $18 million, primarily driven by stronger USD against Australian dollar rd 3 Party Shipments (kmt) 2,011 2,1
Slide 10: Primary Metals
[Alcoa Logo] Primary Metals nd nd 2 Quarter Highlights 2 Quarter Business Conditions 2Q 09 1Q 10 2Q 10 Realized pricing down 1% sequentially Production (kmt) 906 889 893 Higher alumina and LME-linked power costs based rd on quarter lag 3 Party Shipments (kmt) 779 695 699 rd Positive currency impact
Slide 11: Flat-Rolled Products
[Alcoa Logo] Flat-Rolled Products nd nd 2 Quarter Highlights 2 Quarter Business Conditions ATOI $ Millions 2Q 09 1Q 10 2Q 10 Higher volumes especially in Russia, North Global Rolled Products, America, and China 2 47 71 excl Russia, China & Other North American RPD margin and volume improvement Russi
Slide 12: Engineered Products and Solutions
[Alcoa Logo] Engineered Products and Solutions nd nd 2 Quarter Highlights 2 Quarter Business Conditions $ Millions 2Q 09 1Q 10 2Q 10 EBITDA margin up 2.7% points vs. Q2’09 despite rd $72 million in lower sales 3 Party Revenue 1,194 1,074 1,122 Productivity benefit of $14 million on continued ATOI 88
Slide 13: 2nd Quarter 2010 Cash Flow Overview
[Alcoa Logo] 2nd Quarter 2010 Cash Flow Overview ($ Millions) 2Q'09 1Q'10 2Q'10 Net (Loss) Income ($459) ($179) $170 2Q’10 FCF DD&A 317 358 364 $87 million Change in Working Capital 329 (336) (422) Pension Contributions (35) (22) (22) $1.34 billion Taxes / Other Adjustments 176 378 210 of cash Cash
Slide 14: We Are Focused on Achieving Our 2010 Goals
[Alcoa Logo] We Are Focused on Achieving Our 2010 Goals *Procurement reduction of $2.5 billion Overhead reduction of $500 million Capital expenditures of $1.25 billion Days Working Capital reduction of 2 days Driving Positive Free Cash Flow *Procurement and other productivity 14
Slide 15: Klaus Kleinfeld, Chairman and CEO
[Alcoa Logo] Klaus Kleinfeld Chairman and Chief Executive Officer
Slide 16: Strong Mid- and Long-Term Aluminum Fundamentals
[Alcoa Logo] Strong Mid- and Long-Term Aluminum Fundamentals Aluminum Outlook Mega Trends The Aluminum Proposition Aluminum Demand Demographics In MMT 73.0 Global population rising Light Weight – 2006: 6.6 billion – 2025: 7.9 billion EMEA – 2050: 9.1 billion High 6% CAGR Recyclable Strength Americas
Slide 17: Aluminum: Key To Light Weighting Vehicles
[Alcoa Logo] Aluminum: Key To Light Weighting Vehicles MPG Improvement Fuel Economy Improvement (MPG) Levers 3x Benefit vs. HSS 2.7 CAFE Legislation Powertrain 0.9 2016: 0.0 35.5 MPG Steel High Strength Aluminum Drivetrain Baseline Steel Intensive Intensive Life Cycle CO2 Emission Savings (Kilograms
Slide 18: Automotive: A 10 MMT+ Opportunity For Aluminum
[Alcoa Logo] Automotive: A 10 MMT+ Opportunity For Aluminum Aluminum Intensive Vehicle Will Drive Significant Aluminum Penetration Opportunity Aluminum Demand Automotive Aluminum Consumption by Component Automotive Aluminum Consumption (in MMT) KMT 12,000 2020-2030: Currently Aluminum Auto 17.9 10,0
Slide 19: Market Conditions in 2010
[Alcoa Logo] Market Conditions in 2010 Alcoa End Markets: Current Assessment of 2010 vs. 2009 Conditions Source: Alcoa Analysis 19
Slide 20: Raising 2010 Demand Growth Forecast to 12%
[Alcoa Logo] Raising 2010 Demand Growth Forecast to 12% 2010 Projected Primary Aluminum Consumption by Region (in mmt) Brazil 39.2 0.9 -5% 12% Russia 0.9 -15% 4% India 1.4 0% 14% *Other 2.9 -2% 9% Asia w/o China -5% 8% North America -15% 6% 2009 Global Demand Growth Rate: -6% 2010 Global Demand Grow
Slide 21: Inventories Lower, Regional Premiums Higher
[Alcoa Logo] Inventories Lower, Regional Premiums Higher Global Inventory Days of Consumption and Regional Premiums Regional Premium (1-Year Change) Midwest 54% 450% Japan 108% Europe 298% $179 / MT 400% 350% 300% 250% $122 / MT 200% 150% $143 / MT 100% 50% 0% Source: Bloomberg, IAI 21
Slide 22: 2010 Primary Aluminum Surplus Is Manageable
[Alcoa Logo] 2010 Primary Aluminum Surplus Is Manageable 2010E Aluminum Supply / Demand Balance (in kmt) China Western World Surplus Surplus 2010 Annualized Production 16,500 2010 Annualized Production 23,950 Demand (16,500) Demand (22,750) Imports from West, Net 200 Exports to China, Net (200) Net
Slide 23: China: Rational Response To Changing Aluminum Dynamics
[Alcoa Logo] China: Rationale Response To Changing Aluminum Dynamics Price Falls => Curtailments Follow End of Power Subsidy Raises Costs Production (KMT) SHFE Price ($/MT) China Aluminum Cash Cost by Province 20,000 Production 20,000 SHFE ~5.7 MMT with 15,000 15,000 RMB/MT Cash Cost Cash Cost Above
Slide 24: 2010 Global Alumina in Balance
[Alcoa Logo] 2010 Global Alumina in Balance 2010E Alumina Supply / Demand Balance (in kmt) Balanced China Western World 2010 Annualized Production 28,500 2010 Annualized Production 50,000 Imports from Western World 4,000 Exports to China (4,000) Supply 32,500 Supply 46,000 Demand (31,800) Demand (46
Slide 25: Significant Value Creation From The Alumina Leader
[Alcoa Logo] Significant Value Creation From The Alumina Leader Alumina financial and strategic overview rd EBITDA per Metric Ton Alcoa 3 Party Alumina Sales Price % LME EBITDA/MT LME 2,641 110% 2,572 2,570 105% 2,163 100% 1,900 2,096 95% 1,664 1,719 1,549 1,447 1,433 1,350 110 104 Alcoa: The Alumin
Slide 26: Driving Primary Metal To A New Profitability Level
[Alcoa Logo] Driving Primary Metal To A New Profitability Level Primary Metals financial and strategic overview EBITDA per Metric Ton Growing Self-Generated Energy EBITDA/MT LME Self-Generated Long-Term Contracts 2,641 2,570 2,572 2010 2011 1,900 2,163 21% 79% 26% 74% 2,096 1,664 1,719 1,549 784 1,4
Slide 27: Rolled Products Positioned to Substantially Improve Returns
[Alcoa Logo] Rolled Products Positioned to Substantially Improve Returns Flat Rolled Products financial and strategic overview rd EBITDA & EBITDA % Sales YTD 2010 3 Party Sales by Market EBITDA $Millions 573 541 495 479 531 620 536 498 254 224 107 157 75% Utilization EBITDA % Sales Packaging 42% Ind
Slide 28: EPS Strong Platform for Profitable Growth
[Alcoa Logo] EPS Strong Platform for Profitable Growth Engineered Products & Solutions financial and strategic overview rd EBITDA & EBITDA % Sales YTD 2010 3 Party Sales by Market EBITDA $Millions 368 436 287 356 495 536 676 783 922 630 152 194 EBITDA % Sales 17% 70% Utilization 15% 14% Aerospace IG
Slide 29: Aggressively Pursuing 2010 Operational Targets
[Alcoa Logo] Aggressively Pursuing 2010 Operational Targets 2010 Cash Sustainability Operational Targets and Actual Performance 1 2 Procurement Overhead Total Capex Working Capital $ Millions $ Millions $ Millions Days Working Capital $2,500 $1,414 $1,250 42 35 $514 $500 $311 2010 2010 2010 2010 201
Slide 30: Alcoa Is Driving Value Today And Over The Long-Term
[Alcoa Logo] Alcoa Is Driving Value Today And Over The Long-Term Alcoa Performance Strengthening (EBITDA Margin) 20% 19% Alcoa: Driving Value 17% 16% 15% 14% 14% 13% 14% 12% 12% – Global alumina leader leveraging low cost production base 2% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Q1'10 Q2'
Slide 31: Additional Information
[Alcoa Logo] Additional Information Matthew E. Garth Director, Investor Relations [Alcoa Logo] 390 Park Avenue New York, NY 10022-4608 Telephone: (212) 836-2674 www.alcoa.com 31
Slide 32: [Alcoa Logo]
* * * * * * [Alcoa Logo] * * * * * *
Slide 33: Annual Sensitivity Summary
[Alcoa Logo] Annual Sensitivity Summary LME Aluminum Annual Net Income Sensitivity +/- $100/MT = +/- $200 million Currency Annual Net Income Sensitivity +/- 10% versus USD Australian $ +/- $75 million Brazilian $ +/- $50 million Euro € +/- $40 million Canadian $ +/- $35 million 33
Slide 34: Effective Tax Rate
[Alcoa Logo] Effective Tax Rate $ Millions 1Q’10 2Q’10 (Loss) income from continuing operations before income taxes ($88) $228 Provision for income taxes $84 $57 Effective tax rate as reported (95.5%) 25.0% Discrete tax provisions: Medicare Part-D $79 -- Transaction-related and other items $33 ($16)
Slide 35: Reconciliation of ATOI to Consolidated Net (Loss) Income Attributable to Alcoa
[Alcoa Logo] Reconciliation of ATOI to Consolidated Net (Loss) Income Attributable to Alcoa (in millions) 1Q09 2Q09 3Q09 4Q09 2009 1Q10 2Q10 Total segment ATOI $ (143) $ (132) $ 142 $ (101) $ (234) $ 306 $ 381 Unallocated amounts (net of tax): Impact of LIFO 29 39 80 87 235 (14) (3) Interest income
Slide 36: Reconciliation of Adjusted Income
[Alcoa Logo] Reconciliation of Adjusted Income (in millions) Quarter ended March 31, June 30, 2010 2010 Net (loss) income attributable to Alcoa $ (201) $ 136 Loss from discontinued operations (7) (1) (Loss) income from continuing operations attributable to Alcoa (194) 137 Restructuring and other cha
Slide 37: Reconciliation of Free Cash Flow
[Alcoa Logo] Reconciliation of Free Cash Flow (in millions) Quarter ended June 30, 2010 Cash provided from operations $ 300 Capital expenditures (213) Free cash flow $ 87 Free Cash Flow is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because manageme
Slide 38: Reconciliation of Alcoa EBITDA
[Alcoa Logo] Reconciliation of Alcoa EBITDA ($ in millions) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1Q10 2Q10 Net income (loss) attributable to Alcoa $ 1,484 $ 908 $ 420 $ 938 $ 1,310 $ 1,233 $ 2,248 $ 2,564 $ (74) $ (1,151) $ (201) $ 136 Add: Net income attributable to noncontrolling inte
Slide 39: Reconciliation of Alumina EBITDA
[Alcoa Logo] Reconciliation of Alumina EBITDA ($ in millions) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1Q10 2Q10 Alumina After-tax operating income (ATOI) $ 585 $ 471 $ 315 $ 415 $ 632 $ 682 $ 1,050 $ 956 $ 727 $ 112 $ 72 $ 94 Add: Depreciation, depletion, and amortization 163 144 139 147 1
Slide 40: Reconciliation of Primary Metals EBITDA
[Alcoa Logo] Reconciliation of Primary Metals EBITDA ($ in millions) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1Q10 2Q10 Primary Metals After-tax operating income (ATOI) $ 1,000 $ 905 $ 650 $ 657 $ 808 $ 822 $ 1,760 $ 1,445 $ 931 $ (612) $ 123 $ 109 Add: Depreciation, depletion, and amortiza
Slide 41: Reconciliation of Flat-Rolled Products EBITDA
[Alcoa Logo] Reconciliation of Flat-Rolled Products EBITDA ($ in millions) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1Q10 2Q10 Flat-Rolled Products After-tax operating income (ATOI) $ 296 $ 253 $ 225 $ 222 $ 254 $ 278 $ 233 $ 178 $ (3) $ (49) $ 30 $ 71 Add: Depreciation, depletion, and amort
Slide 42: Reconciliation of Engineered Products and Solutions EBITDA
[Alcoa Logo] Reconciliation of Engineered Products and Solutions EBITDA ($ in millions) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2Q09 1Q10 2Q10 Engineered Products and Solutions After-tax operating income (ATOI) $ 125 $ 189 $ 63 $ 124 $ 156 $ 271 $ 365 $ 435 $ 533 $ 315 $ 88 $ 81 $ 107 Add: