Slide 1: 1st Quarter 2006 Analyst Conference
[Alcoa Logo] 1st Quarter 2006 Analyst Conference April 10, 2006 Exhibit 99.2
Slide 2: 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 results or actions may differ materia
Slide 3: 1st Quarter 2006 Highlights
1 Quarter 2006 Highlights Record income from continuing operations of $615m or $0.70 per share Highest quarterly revenues in company history of $7.24b Record profits in the Alumina, Primary Metals and Engineered Solutions segments Q1 annualized ROC of 14.2%, well in excess of cost of capital st
Slide 4: Safety - 1st Quarter 2006
Safety - 1 Quarter 2006 Lost Work Days Total Recordables 92% 8% 61% 39% Zero Incident Locations No LWD LWD # of Locations No TRR TRR # of Locations st
Slide 5: Operational Excellence
Operational Excellence Production records set in Alumina Segment Quarterly production record for the refinery system Five refineries achieved quarterly production records Flat-Rolled Products Segment excels Record shipments in the automotive heat exchanger market out of Kofem Record shipments out of
Slide 6: Innovation and New Products
Innovation and New Products Dura-Bright Fuel Tanks: Greater than a $100 million revenue opportunity - to be launched in the next 12 months Smart Box – Power Distribution System: Launch in progress of a new AFL product developed jointly with the customer for efficient automotive power distribution -
Slide 7: Growth, Sustainable Development and Portfolio Management
Growth, Sustainable Development and Portfolio Management – Alumar smelter expansion completed and fully operational – Mechanical completion of the Pinjarra refinery expansion – Increased our stake in the Estreito hydropower project in Northern Brazil from 19.08% to 25.49% – Signed Agreement in Princ
Slide 8: Global Environment: Worldwide Alumina/Aluminum Supply & Demand
Global Environment Worldwide Alumina/Aluminum Supply & Demand (200) (400) (1,300) (300) Long / (Short) Alumina 68,300 64,600 61,800 57,300 Demand 68,100 64,200 60,500 57,000 Supply Aluminum (200) (500) (700) Long / (Short) 35,200 33,600 31,700 30,000 Demand 35,000 33,100 31,700 29,300 Supply 000 ton
Slide 9: Global Environment: Regional Premiums
Global Environment Regional Premiums Source: Platts Regional Premiums $25 $45 $65 $85 $105 $125 $145 $165 $185 Prompt Midwest $/mt CIF Japan Duty Paid Europe
Slide 10: Global Environment: Aluminum Inventory History
Global Environment Aluminum Inventory History Sources: IAI, LME LME & IAI Stock Implied Days of Global Consumption Consumption February 2006 : 27.7 Days DOWN from 29.9 Days IAI Global Days of Consumption LME Global Days Consumption 19.2 Days 8.5 Days
Slide 11: Joseph Muscari, Chief Financial Officer
[Alcoa Logo] Joseph Muscari Executive Vice President Chief Financial Officer
Slide 12: Record income from continuing operations of $615 million
Record income from continuing operations of $615 million ($0.70 per share) was 190% and 129% higher than the previous and prior year quarter respectively Highest quarterly revenues of $7.24 billion – 9% and 16% higher than the previous and prior year quarter respectively Capital expenditures were $5
Slide 13: 1st Quarter Financial Review
Quarter Financial Review In Millions 4Q'05 1Q'06 Change Sales $6,666 $7,244 $578 Cost of Goods Sold $5,453 $5,459 $6 % of Sales 81.8% 75.4% (6.4 pts) SG&A $362 $369 $7 % of Sales 5.4% 5.1% (0.3 pts) Restructuring and Other Charges $26 $1 ($25) Interest Expense $78 $92 $14 Other Income, Net (Gain) ($
Slide 14: 1st Quarter Cash Flow Review
Quarter Cash Flow Review Capital Expenditures Debt-to-Capital $ In Millions 1Q'05 1Q'06 Net Income $260 $608 DD&A Change in Working Capital (769) (1,030) Other Adjustments (27) (23) Pension Contributions (18) (77) Cash From Operating Activities (239) (213) Dividends to Shareholders (131) (131) Other
Slide 15: Revenue and ATOI Performance
Revenue and ATOI Performance Historical Performance of Combined Segments ($million) Total ATOI is the sum of the segment ATOI. 1,000 2,500 5,000 7,500 10,000 ATOI Revenue
Slide 16: Alumina
Alumina Benefit from higher LME on an approximate 2 to 3 month lag Productivity gains continue Pinjarra expansion ramping up Realized benefit of strong LME Production record for entire system as well as 5 out of 9 refineries achieved quarterly records Higher energy costs Quarter Dynamics ATOI Perfor
Slide 17: Primary Metals
Primary Metals 1Q vs 1Q 98% 29% ATOI Performance Increases in LME and premiums driven by strong demand Lower shipments and production due to Eastalco curtailment and Portland outage Full benefit of Alumar expansion Portland not back to 100% Power costs will be challenging April sales on a 30 day LME
Slide 18: Flat-Rolled Products
Flat-Rolled Products 1Q vs 1Q 1Q vs 4Q $MM (12%) 6% ATOI 17% 12% 1,940 Revenue Quarter Highlights Quarter Dynamics Quarter Outlook ATOI Performance Aerospace and commercial transportation demand remains strong Seasonal increase in can sheet volumes Russia will continue to be challenging Strong deman
Slide 19: Extruded & End Products
Extruded & End Products Quarter Dynamics ATOI Performance Seasonal increase in B&C and soft alloy extrusion demand Stronger volumes over prior quarter Lower Russia volumes Commercial Vehicle Aerospace Automotive Building & Construction Distribution Industrial 1Q vs 1Q 1Q vs 4Q $MM NM NM (0) ATOI 13%
Slide 20: Packaging & Consumer
Seasonal declines in Consumer Products, although volumes higher year over year Weaker volume and pricing in Food Packaging Packaging & Consumer 1Q vs 1Q 1Q vs 4Q $MM (50%) (60%) ATOI 6% (6%) Revenue Quarter Dynamics ATOI Performance Strong seasonal demand in Consumer Products and Closures Consumer P
Slide 21: Engineered Solutions
Engineered Solutions 36% 10% 1Q vs 1Q 77% ATOI 1Q vs 4Q $MM 7% 1,360 Revenue Quarter Highlights Quarter Dynamics ATOI Performance Strong productivity gains across all businesses of the segment Market growth supported by record production in Forged Products, and Fasteners New products & favorable mix
Slide 22: Engineered Solutions – Next Level of Detail
Engineered Solutions – Next Level of Detail ($1) ($5) ($5) Other $47 $65 ($13) 4Q05 Total Investment Castings, Forgings, Fasteners AFL, Auto Castings and Structures $83 $93 ($5) 1Q06 $61 $58 $4 1Q05 ATOI ($ Millions) AFL performance significantly improved from 2H05 Launches stabilized Large producti
Slide 23: 2nd Quarter Outlook Summary
Quarter Outlook Summary Industry fundamentals expected to remain strong Economic conditions expected to remain positive globally Operating improvements to stay on track Continued energy cost pressures Other input costs stabilizing U.S. labor negotiations nd
Slide 24: For Additional Information, Contact:
For Additional Information, Contact: Tony Thene Director, Investor Relations Alcoa 390 Park Avenue New York, N.Y. 10022-4608 Telephone: (212) 836-2674 Facsimile: (212) 836-2813 www.alcoa.com
Slide 25: [Alcoa Logo]
[Alcoa Logo]
Slide 26: Appendix
[Alcoa Logo] Appendix
Slide 27: Reconciliation of Return on Capital
Reconciliation of Return on Capital Return on Capital (ROC) is presented based on Bloomberg Methodology which calculates ROC based on trailing four quarters. 1Q'06 4Q'05 3Q'05 2Q'05 1Q'05 Bloomberg 1Q'06 Bloomberg 4Q'05 Bloomberg 3Q'05 Bloomberg 2Q'05 Bloomberg 1Q'05 In Millions Method Annlzd Method
Slide 28: Reconciliation of Adjusted Return on Capital
Reconciliation of Adjusted Return on Capital Return on capital, excluding growth investments is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because it provides greater insight with respect to the underlying operating performance of the company’s pro
Slide 29: Days of Working Capital Definition
Days of Working Capital Definition In Millions 1Q'05 4Q'05 1Q'06 Add: Receivables from customers, less allowances $ 3,110 $ 2,914 $ 3,380 Add: Inventories $ 3,365 $ 3,446 $ 3,778 Less: Accounts payable, trade $ 2,418 $ 2,659 $ 2,691 Working Capital $ 4,057 $ 3,701 $ 4,467 Sales $ 6,221 $ 6,666 $ 7,2
Slide 30: Segment Information
Segment Information ‘party reeked price ~ akueminum Ss 2042 S 4977 $ 1909 S 2477 S204 Ss 2oae Thicd-party ohipmonte Gamo) or 20 Boe ‘bor BSea ‘fon Snuarparyesion = 1000 so niee gs 1208 ses Seon ston 3 tSes $ take $ yen Fes S Meon Fat 3 “Sas $ “iar $ “ten 3 “daa 3 “nee 3 SAS 3 coed cad os § oe 3 Son
Slide 31: Reconciliation of ATOI to Net Income
Reconciliation of ATO! to Net Income Reconailiation of ATO! to consolidated netincor = 1005 205 35 AUS, 2005 Tota ATO. $ SBS BIS 40S Bi $F 210 $ Inrpadt of LIFOand intersegrrert profit Q (18) @) (19) @ adjustments (2) Undlocated arourts (net of ta): Interest income 7 9 12 14 a Interest expense 61) 6