Slide 1: Quarter Earnings Conference
1 [Alcoa Logo] Quarter Earnings Conference April 8, 2013 Exhibit 99.2 st
Slide 2: Cautionary Statement
2 Cautionary Statement 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,” “forecasts
Slide 3: Klaus Kleinfeld, Chairman and CEO
Klaus Kleinfeld Chairman and Chief Executive Officer April 8, 2013
Slide 4: Delivering Strong Quarterly Results
Delivering Strong Quarterly Results 4 All segments profitable; Best net income excluding special items since 3Q 2011 Adjusted EBITDA up 16% sequentially and 11% YoY Record profitability in the Downstream Improved Upstream performance YoY despite lower metal price Strong liquidity; $1.6 Billion cash
Slide 5: William Oplinger, EVP and CFO
5 William Oplinger Executive Vice President and Chief Financial Officer April 8, 2013
Slide 6: Income Statement Summary
Income Statement Summary 6 1Q12 4Q12 1Q13 Sequential Change $ Millions, except per-share amounts Revenue $6,006 $5,898 $5,833 ($65) Cost of Goods Sold $5,098 $4,968 $4,847 ($121) COGS % Revenue 84.9% 84.2% 83.1% (1.1 % pts.) Selling, General Administrative, Other $241 $277 $251 ($26) SGA % Revenue 4
Slide 7: Restructuring and Other Special Items
Restructuring and Other Special Items See appendix for Adjusted Income reconciliation 7
Slide 8: Profitability increases nearly 90% driven by performance
11 Profitability increases nearly 90% driven by performance See appendix for Adjusted Income reconciliation 8 45 15 44 21 15 Net Income Excluding Restructuring & Other Special Items ($ millions) 4Q 2012 1Q 2013 Raw Materials Energy Portfolio Actions Productivity Price /Mix Volume Currency LME Cost I
Slide 9: Record results for Engineered Products and Solutions
9 Record results for Engineered Products and Solutions See appendix for Adjusted EBITDA reconciliation. * Prior period amounts have been revised to conform to the current period presentation. See appendix for additional information. 1Q13 Actual and 2Q13 Outlook - EPS $ Millions 1Q 12 4Q 12 1Q 13 Par
Slide 10: Improved sequential performance for Global Rolled Products
Improved sequential performance for Global Rolled Products 10 1 st Quarter Results 1 st Quarter Business Highlights 2 nd Quarter Outlook 1 st Quarter Performance Bridge See appendix for Adjusted EBITDA reconciliation. * Prior period amounts have been revised to conform to the current period presenta
Slide 11: 41% ATOI improvement in the Alumina segment
41% ATOI improvement in the Alumina segment 11 1 Quarter Results st 1 st Quarter Business Highlights 2 Quarter Outlook 1 st Quarter Performance Bridge nd Raw Materials Energy Prod- uctivity Price /Mix Volume / Fixed Cost Currency LME 4Q 12 1Q 13 Cost Increase $1 $3 $5 $6 $7 $4 $27 $58 $6 $41 +$23m -
Slide 12: Primary Metals performance overcomes cost headwinds
Primary Metals performance overcomes cost headwinds 12 1 Quarter Business Highlights st 1 Quarter Results st 1 Quarter Performance Bridge st 2 Quarter Outlook nd Price/Mix improved as regional premiums rose and value-added product mix strengthened Productivity improvements continued Rockdale outage
Slide 13: Continued sustainable days working capital reductions
Continued sustainable days working capital reductions See appendix for days working capital reconciliation 13 7 days lower 2 days lower 14 days lower 4 days lower 27 days; $1.8 B 7 days lower Days Working Capital since Fourth Quarter 2008 2 days lower 14 days lower 4 days lower 27 days; $1.8 B
Slide 14: 1Q 2013 Cash Flow Overview
See appendix for Free Cash Flow, Net Debt and Net Debt-to-Capital reconciliations 1 Quarter Cash Flow Overview 14 Cash from Operations ($236) $933 ($70) Cash from Financing Activities $394 ($712) $47 Cash from Investing Activities ($350) $207 ($285) 1 Quarter 2013 Cash Flow Overview st ($ Millions)
Slide 15: Aggressive targets set to maximize cash in 2013
Aggressive targets set to maximize cash in 2013 15 Overarching 2013 Financial Target Taking the right actions 2013 Targets: Key Actions to Execute 2013 Cash Sustainability Program Maintain 30%-35% Debt-to-Capital Manage Growth Capital of $550M Generate Productivity Gains of $750M Target Saudi JV Inv
Slide 16: Capital Flows Into Equities from Commodities
16 Capital Flows Into Equities from Commodities 2013 Global Aluminum Demand Will Grow at 7% Supply and Demand Tightening On Curtailments Inventories Are Stable, Premiums Remain Strong
Slide 17: Capital flows into equities and out of commodities
Capital flows into equities and out of commodities 17 Source: Bloomberg, CFTC COT Reports (excl. energy futures) …attracting capital from commodities Major equity exchanges rally… Net Managed Money Positions ($ billion) 95% 100% 105% 110% 115% 120% 125% S&P 500 Index FTSE 100 NIKKEI ~50% decline in
Slide 18: Market fundamentals are stable
Market fundamentals are stable 18 Market Tightening On Curtailments Inventory is Stable Regional Premiums Remain Strong See appendix for full scale charts 2013E Alumina Supply/Demand Balance 2013E Aluminum Supply/Demand Balance Global Aluminum Demand Growth at 7% 2013 Primary Aluminum Consumption (m
Slide 19: Klaus Kleinfeld, Chairman and CEO
Klaus Kleinfeld Chairman and Chief Executive Officer April 8, 2013
Slide 20: Growth continues in global end markets
Source: Alcoa analysis Growth continues in global end markets 20 Alcoa End Markets: Current Assessment of 2013 vs. 2012 North America China Global Europe - Aerospace Automotive Heavy Truck & Trailer Beverage Can Packaging Commercial Building and Construction Industrial Gas Turbine 9% - 10% sales gro
Slide 21: Value add businesses driving 71% of segment profits
Value add businesses driving 71% of segment profits 21 EPS: Continuing to Grow Profitability Business mix shifted toward value add GRP: Generating Record Margins GPP: Combined Alumina and Primary Metals segments, GRP: Global Rolled Products, EPS: Engineered Products and Solutions. Prior period amoun
Slide 22: Aerospace accounts for $3.8B of value add revenue
Aerospace accounts for $3.8B of value add revenue 22 3.8 0.7 Breakdown of 2012 Alcoa value-add revenue by market ($B) Other Aerospace Automotive 3.2 Packaging 1.4 Building and Construction 4.1 End Market Highlights $13.2B 11.6% End Market CAGR (2012 - 2015) ~ (at 2012 rates) year backlog of producti
Slide 23: Vibrant growth projected for the aerospace market
Sources: The Airline Monitor February 2013 Vibrant growth projected for the aerospace market 23 Aero market growth: Commercial Jet Deliveries and Value in $B Notes: (1) All figures include both Large Commercial Aircraft & Regional Jets
Slide 24: Alcoa Blue Flies From Nose to Tail
Alcoa Blue Flies From Nose to Tail 24 Wing ribs (plate and extrusions) Wing tips Hydraulic vessels Fuel connectors Torque rods Seat frames Window and door frames Wheels, brakes and torque tubes Fuselage to wing connection Wing box fasteners Engine pylon structure and fasteners Wing spars (forgings a
Slide 25: Alcoa is well positioned on both Aluminum and CFRP planes
Sources: 1) The Airline Monitor February 2013 Notes: All figures include both Large Commercial Aircraft & Regional Jets. CFRP refers to carbon fiber reinforced plastic Alcoa is well positioned on both Aluminum and CFRP planes 25 Commercial jet deliveries and Alcoa Indexed Revenue by aircraft type
Slide 26: Innovation creating long term value for Alcoa
Innovation creating long term value for Alcoa Aluminum Lithium Meeting Customer Needs 26 Al-Li Revenue quadrupling by 2019 Reduce inspection Improve comfort 20% fuel efficiency improvement Lower capital costs Customer Needs Al-Li Value Proposition Improved corrosion and fatigue properties 2X inspect
Slide 27: Automotive accounts for $700M of value add revenue
Automotive accounts for $700M of value add revenue 27 0.7 3.8 Breakdown of 2012 Alcoa value-add revenue by market ($B) Building and Construction 1.4 Packaging 3.2 Automotive Aerospace Other 4.1 $13.2B End Market Highlights 2-3% End Market CAGR (2012 - 2015) 30-35% CAGR for NA Auto Sheet ( - ) 3.6x i
Slide 28: Alcoa's content runs from bumper to bumper
Alcoa’s content runs from bumper to bumper 28 Alcoa participation in automotive parts Current Future
Slide 29: Aluminum intensity amplifying automotive market growth
Aluminum intensity amplifying automotive market growth Sources: Ducker Worldwide , IHS , Alcoa analysis, *) Extrapolated based on IHS 2020 forecast 29 Growth in Automotive Market… …amplified by increasing Al intensity Auto industry growth and projected incremental aluminum content Global light vehic
Slide 30: Consumers and regulations drive auto light-weighting
Consumers and regulations drive auto light-weighting 30 Consumers want it Regulations demand it Consumers Outpace Regulation Safety benefits 1) National Highway Traffic Safety Admin. Source: Ducker Worldwide , Consumer Reports, The Aluminum Association , NHTSA 1) September 17, 2012, Alcoa Analysis U
Slide 31: Alcoa is capturing auto sheet opportunity
Alcoa is capturing auto sheet opportunity Source: Ducker Worldwide , IHS , Alcoa analysis 31 Auto Sheet Driving Growth Delivers ~4x Revenue Increase 1,090 420 100 Positioned to Capture Demand $300M expansion to capture auto demand Supported by secured contracts On time and on budget First coil by De
Slide 32: We continue to focus on coming down the cost curves
We continue to focus on coming down the cost curves 32 Alcoa 2010 30 Percentile Refining Cost Curve Holding Steady Alcoa 2012 30 Percentile Smelting Cost Curve Down 4% Points Alcoa 2010 51 Percentile Alcoa 2012 47 Percentile -10 points 7 points - th th th st Alumina and Aluminum cost curves and Alco
Slide 33: Saudi Arabia JV Construction Progressing As Planned
Phase 1 and 2 Construction Progressing As Planned Mine Refinery 33 Smelter Rolling Mill Phase 2 Phase 1 First hot coil 4Q 2013 Auto hot coil 4Q 2014 First alumina 4Q 2014 Lowest cost refinery 2% point reduction on the refining cost curve On track to provide bauxite in 2014 First Hot Metal December F
Slide 34: Executing on our targets to deliver long term value
Executing on our targets to deliver long term value 34 All segments achieved solid financial performance Strong commitment to cash generation Capturing opportunities in growing markets
Slide 35: Appendix
[Alcoa Logo]
Slide 36: Additional Information
Additional Information 36 Kelly Pasterick Director, Investor Relations Alcoa 390 Park Avenue New York, NY 10022-4608 Telephone: (212) 836-2674 www.alcoa.com
Slide 37: Annual Sensitivity Summary
Annual Sensitivity Summary Currency Annual Net Income Sensitivity LME Aluminum Annual Net Income Sensitivity 37 +/- $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 0.01 change in
Slide 38: Revenue Change by Market
Revenue Change by Market 1Q’13 Third-Party Revenue Sequential Change Year-Over-Year Change 38 4% 3% 0% 9% 7% 2% (2%) (39%) 3% (7%) 6% 0% (1%) (11%) (4%) 17% (5%) 1% 7% (10%) 17% 3% 6% 5% 9% 2% 13% 1% 14% 30% Aerospace Automotive B&C Comm. Transport Industrial Products IGT Packaging Distribution/Othe
Slide 39: Reconciliation of ATOI to Consolidated Net Income Attributable to Alcoa
Reconciliation of ATOI to Consolidated Net Income (Loss) Attributable to Alcoa 39 * On January 1, 2013, management revised the inventory-costing method used by certain locations within the Global Rolled Products and Engineered Products and Solutions segments in order to improve internal consistency
Slide 40: Reconciliation of Adjusted Income
Reconciliation of Adjusted Income 40 (in millions, except per-share amounts) Income Diluted EPS Quarter ended Quarter ended March 31, December 31, March 31, March 31, December 31, March 31, Net income attributable to Alcoa $ 94 $ 242 $ 149 $ 0.09 $ 0.21 $ 0.13 Restructuring and other charges Discret
Slide 41: Reconciliation of Alcoa Adjusted EBITDA
Reconciliation of Alcoa Adjusted EBITDA 41 ($ in millions) 1Q12 4Q12 1Q13 Net income (loss) attributable to Alcoa $ 938 $ 1,310 $ 1,233 $ 2,248 $ 2,564 $ (74) $ (1,151) $ 254 $ 611 $ 191 $ 94 $ 242 $ 149 Add: Net income (loss) attributable to noncontrolling interests (29) Cumulative effect of accoun
Slide 42: Reconciliation of Alumina Adjusted EBITDA
Reconciliation of Alumina Adjusted EBITDA 42 ($ in millions, except per metric ton amounts) 1Q12 4Q12 1Q13 After-tax operating income (ATOI) $ 415 $ 632 $ 682 $ 1,050 $ 956 $ 727 $ 112 $ 301 $ 607 $ 90 $ 35 $ 41 $ 58 Add: Depreciation, depletion, and amortization Equity (income) loss – (1) – (1) (7)
Slide 43: Reconciliation of Primary Metals Adjusted EBITDA
Reconciliation of Primary Metals Adjusted EBITDA 43 ($ in millions, except per metric ton amounts)` 1Q12 4Q12 1Q13 After-tax operating income (ATOI) $ 657 $ 808 $ 822 $ 1,760 $ 1,445 $ 931 $ (612) $ 488 $ 481 $ 309 $ 10 $ 316 $ 39 Add: Depreciation, depletion, and amortization Equity (income) loss (
Slide 44: Reconciliation of Global Rolled Products Adjusted EBITDA
Reconciliation of Global Rolled Products Adjusted EBITDA 44 ($ in millions, except per metric ton amounts) 1Q12 4Q12 1Q13 After-tax operating income (ATOI)* $ 232 $ 290 $ 300 $ 317 $ 151 $ (41) $ (106) $ 241 $ 260 $ 346 $ 102 $ 77 $ 81 Add: Depreciation, depletion, and amortization Equity loss – – –
Slide 45: Reconciliation of Engineered Products and Solutions Adjusted EBITDA
Reconciliation of Engineered Products and Solutions Adjusted EBITDA 45 ($ in millions) 1Q12 4Q12 1Q13 After-tax operating income (ATOI)* $ 126 $ 161 $ 276 $ 382 $ 423 $ 522 $ 311 $ 419 $ 537 $ 612 $ 157 $ 140 $ 173 Add: Depreciation, depletion, and amortization Equity loss (income) – – – – – (2) (2)
Slide 46: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow 46 (in millions) Quarter ended March 31, June 30, September 30, December 31, March 31, June 30, September 30, December 31, March 31, Cash from operations $ (236) $ 798 $ 489 $ 1,142 $ (236) $ 537 $ 263 $ 933 $ (70) Capital expenditures (204) (272) (325) (486) (270) (
Slide 47: Reconciliation of Free Cash Flow, con't
Reconciliation of Free Cash Flow, con’t 47 (in millions) Quarter ended December 31, March 31, June 30, September 30, December 31, March 31, June 30, September 30, December 31, Cash from operations $ 608 $ (271) $ 328 $ 184 $ 1,124 $ 199 $ 300 $ 392 $ 1,370 Capital expenditures (1,017) (471) (418) (3
Slide 48: Days Working Capital
Days Working Capital 48 ($ in millions) Quarter ended March 31, June 30, September 30, December 31, March 31, Receivables from customers, less allowances $ 1,526 $ 1,575 $ 1,619 $ 1,399 $ 1,680 Add: Deferred purchase price receivable * Receivables from customers, less allowances, as adjusted 1,780 1
Slide 49: Reconciliation of Net Debt
Reconciliation of Net Debt 49 (in millions) December 31, March 31, Short-term borrowings $ 478 $ 176 $ 92 $ 62 $ 53 $ 51 Commercial paper 1,535 – – – Long-term debt due within one year 1,025 Long-term debt, less amount due within one year 8,509 8,974 8,842 8,640 8,311 7,745 Total debt 10,578 9,819 9
Slide 50: Reconciliation of Net Debt-to-Capital
Reconciliation of Net Debt-to-Capital 50 ($ in millions) December 31, 2012 March 31, 2013 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 $ Commercial paper – Long-term debt due within
Slide 51: Composition of Upstream Production Costs
Composition of Upstream Production Costs 51 Refining Cost Structure Smelting Cost Structure Natural gas information corresponds to Point Comfort, as Australia is priced on a rolling 16 quarter average Input Cost Inventory flow Pricing convention Annual ATOI Sensitivity Fuel oil 1 – 2 months Prior mo
Slide 52: Global Aluminum Demand Growth at 7%
Global Aluminum Demand Growth at 7% 52 3.8 2.0 1.0 1.0 23.0 6.5 6.2 5.9 Source: Alcoa analysis 2013 Primary Aluminum Consumption (mmt), Annualized Growth (%) and Change (% pts) by Region (1) Other includes Middle East, Latin America ex Brazil, Eastern Europe and Rest of World 4.0% 5% 6% -1% -2% 11%
Slide 53: 2013E Aluminum and Alumina Supply/Demand Balance
53 2013E Aluminum Supply/Demand Balance 2013E Alumina Supply/Demand Balance Source: Alcoa analysis, Brook Hunt, CRU, CNIA, NBS, Chinese Customs Market Tightening On Curtailments Supply Demand Surplus ‘000 mt China Rest of World 2013 Production (Feb annualized) 21,330 25,360 2013 Production to be add
Slide 54: Global Inventories vs. LME Price Over Time
54 Source: Alcoa analysis, LME, SHFE, CRU, IAI, Marubeni Corp. Inventory is Stable Global Inventories vs. LME Price Over Time $
Slide 55: Regional Premiums Remain Strong
Regional Premiums Remain strong 55 Source: Month end pricing - Platts Metals Week and Metal Bulletin Regional Premiums over time $ per metric ton $ per metric ton Region End of Q1’13 Europe $283/MT Japan $249/MT Midwest USA $253/MT Year on Year Change Europe +35% Japan +96% Midwest USA +27% $0 $50 $