Slide 1: First Quarter 2008 Analyst Conference
Exhibit 99.2 April 7, 2008 st Quarter 2008 Analyst Conference
Slide 2: Forward Looking Statements
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
Slide 3: Chuck McLane, Executive Vice President and Chief Financial Officer
Executive Vice President and Chief Financial Officer Chuck McLane
Slide 4: First Quarter 2008 Financial Overview
4 st Quarter 2008 Financial Overview – Income from continuing operations of $303m or $0.37 per share - $361m or $0.44 per share excluding the impact of restructurings – Revenues of $7.4b – Currency impact of $68m or $0.08 per share sequentially, including $48m, or $0.06 per share non- cash translati
Slide 5: First Quarter 2008 Financial Overview
5 st Quarter 2008 Financial Overview $ In Millions 4Q'07 1Q'08 Change Sales $7,387 $7,375 ($12) Cost of Goods Sold $6,153 $5,892 ($261) % of Sales 83.3% 79.9% (3.4 pts) SG&A $383 $328 ($55) % of Sales 5.2% 4.4% (0.8 pts) Restructuring and Other Charges ($14) $38 $52 Interest Expense $81 $99 $18 Othe
Slide 6: 4th Quarter vs. 1st Quarter Comparison
6 th Quarter vs. 1 st Quarter Comparison
Slide 7: Alumina
7 1Q’08 4Q’07 1Q’07 1,995 2,030 1,877 3 Party Shipments (kmt) 3,870 3,855 3,655 Production (kmt) 3 Party Revenue ($MM) ATOI ($MM) Flat production sequentially Lower LME linked pricing Unfavorable currency & energy costs Pinjarra at targeted expansion production rate Alumina st Quarter Highlights nd
Slide 8: Primary Metals
8 st Quarter Highlights ATOI ($MM) 2,801 2,646 2,902 3 Party Price ($/MT) 1,877 1,597 1,633 3 Party Revenue ($MM) 1Q’08 4Q’07 1Q’07 3 Party Shipments (kmt) Production (kmt) Primary Metals nd Quarter Outlook st Quarter Business Conditions Higher realized pricing sequentially 4% production increase se
Slide 9: Flat-Rolled Products
9 Improved Russia results Weak automotive demand in North America Higher costs for alloying materials & transportation 1Q’08 4Q’07 1Q’07 (15) ATOI ($MM) 2,492 2,436 2,467 rd Party Revenue ($MM) Flat-Rolled Products st Quarter Highlights nd Quarter Outlook st Quarter Business Conditions Improved Russ
Slide 10: Engineered Products and Solutions
10 Engineered Products and Solutions Building and Construction and Other (11) 4Q’07 Total Investment Castings, Forgings, Fasteners AFL, Auto Castings and Structures (10) 1Q’07 (5) 1Q’08 Revenue and ATOI record quarter Aerospace and IGT markets continue to show strength Deteriorating North American a
Slide 11: First Quarter 2008 Cash Flow Review
11 st Quarter 2008 Cash Flow Review $ In Millions 1Q 07 1Q 08 Net Income $662 $303 DD&A Change in Working Capital (187) (467) Other Adjustments (202) (424) Pension Contributions (50) (19) Cash From Operating Activities $527 ($288) Dividends to Shareholders (148) (140) Change in Debt Dividends to Min
Slide 12: Primary Aluminum Consumption Growth Rates
12 Primary Aluminum Consumption Growth Rates Source: Alcoa analysis
Slide 13: Global Days of Consumption
13 Source: IAI and LME Global Days of Consumption
Slide 14: Supply / Demand Projection
14 Supply / Demand Projection Source: Alcoa analysis
Slide 15: 2008 Market Outlook and Impact
15 2008 Market Outlook and Impact
Slide 16: Alain J.P. Belda, Chairman and Chief Executive Officer
Chairman and Chief Executive Officer Alain J.P. Belda
Slide 17: Klaus Kleinfeld, President and Chief Operating Officer
President and Chief Operating Officer Klaus Kleinfeld
Slide 18: Global Mega Trends Generate Growth Opportunities
18 Infrastructure Investment Increasing Mobility Shortening of Natural Resources Demographics Shifting Economies Demand for Safety & Security Aging Population Globalization Urbanization Global Warming Global Mega Trends Generate Growth Opportunities Mega Trends Effects Opportunities Advanced Energy
Slide 19: Strong Demand for Aluminum Continues
19 6.7 3.6 9.2 8.6 29.1 6.7 5.2 12.0 2.5 8.2 10.6 4.6 7.3 5.6 Strong Demand for Aluminum Continues World Aluminum Consumption (million metric tons) Source: Brook Hunt, Alcoa analysis 1998 China Rest of Asia 2.8 North 2017 East Eur/ Mid East/ Africa W.Europe South 2007 Europe/ME/ Africa Americas Asia
Slide 20: Alcoa: A History of Growth & Innovation
20 Alcoa: A History of Growth & Innovation 2008 1950 We reshaped the industry We innovated markets We invented the industry 1888 1900
Slide 21: We Have Strengthened the Foundation
21 Executed Growth Projects Adjusted Portfolio Applied Disciplined Capital Management We Have Strengthened the Foundation
Slide 22: We Have Been Investing For Profitable Growth
22 Expand Mining & Refining Start-up Fjaardaal Smelter Grow Power Self-Generation Power Contract Extensions Expand Rolling Footprint Two Fastening System Acquisitions We Have Been Investing For Profitable Growth
Slide 23: We Have a Robust Portfolio of Development Options
23 Surinam Vietnam Juruti Greenland Massena B. Comeau Mosjoen Sao Luis Fjardaal N Iceland Execution & completion 2008-2010 Feasibility 2010-2015 Future options Greenland Australia Wagerup 3 Vietnam Sao Luis Jamaica Pinjarra Mining Refining Power Smelting We Have a Robust Portfolio of Development Opt
Slide 24: We Have Focused Our Portfolio
24 Completed Packaging Sale Created Soft Alloy Extrusion JV Sold Auto Castings Business Chinalco Partnership We Have Focused Our Portfolio
Slide 25: Alcoa & Chinalco Have a History of Partnership
25 Builds on a history of cooperation Global partners of choice Flexibility to deliver shareholder value Active dialogue on next steps Alcoa & Chinalco Have a History of Partnership
Slide 26: We Demonstrate Disciplined Capital Management
26 We Demonstrate Disciplined Capital Management – Restructured debt portfolio – doubled average maturity at same cost – Increased dividend by 13% – Maintained target debt levels during peak capex period – Initiated & acting on 25% share repurchase Debt to Total Capital Percentage Target Debt/Cap Ra
Slide 27: Driving Performance through Three Strategic Priorities
27 creating value for all businesses in every business – Talent – Technology – Customer Intimacy – Purchasing – Operating System Business Programs that define: – 3 - year aspirations – Priority levers – Accountability across all activities Driving Performance through Three Strategic Priorities Alcoa
Slide 28: Slide 28
Slide 29: Slide 29
Slide 30: Slide 30
Slide 31: Slide 31
Slide 32: Strategic Priority #1: Profitable Growth
28 across all activities – Talent – Technology – Customer Intimacy – Purchasing – Operating System creating value for all businesses in every business Business Programs that define: – 3 - year aspirations – Priority levers – Accountability Strategic Priority #1: Profitable Growth Disciplined Executi
Slide 33: Slide 33
Slide 34: Slide 34
Slide 35: Slide 35
Slide 36: Great Opportunities for Primary Business
29 – Attractive industry fundamentals – World class positions in bauxite and refining – Long-term energy supply – Balanced greenfield/brownfield growth opportunities – Sustainability Leader = Partner of Choice Operational Excellence Growth Asset Management Strategic Levers – Maximize repowered asset
Slide 37: Targeted Repowering Efforts
[Ateoa togo} . mee! Targeted Repowering Efforts January 2008 Status 100% 90% Repowering Efforts 80% aus 5 S 70% 3 60% 6 zB 50% g 40% 3 30% * 20% 10% 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Slide 38: Targeted Repowering Efforts: Update April 2008
SESE Targeted Repowering Efforts. ...Update April 2008 (Aleoa logo] Progress in Quebec 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Repowering Efforts % of Equity Capacity ee Le
Slide 39: Slide 39
Slide 40: Slide 40
Slide 41: Slide 41
Slide 42: Flat Rolled Business is Excellently Positioned
32 – Unique capabilities, equipment, and proprietary alloys – Demonstrated ability to achieve operational excellence – Global footprint to support expanding customers’ growth Operational Excellence Growth Asset Management Strategic Levers – Deliver on China & Russia – Leverage distinctive R&D capabi
Slide 43: Slide 43
Slide 44: Slide 44
Slide 45: Slide 45
Slide 46: Great Value Potential in Engineered Products & Solutions
33 – Differentiated positions in attractive core markets • Aerospace & power generation components • Commercial transportation • Architectural solutions – Consistent growth in earnings & returns – New product focus Operational Excellence Growth Asset Management Strategic Levers – Pursue profitable g
Slide 47: Alcoa Fastening Systems – Successful & Growing
34 Alcoa Fastening Systems – Successful & Growing Profitable Growth Driven By: – Innovation leadership – Superior products – Customer intimacy – ABS deployment Republic/Van Petty Acquisitions: – Increased scale in aero-engine and airframe fasteners – Cost synergies through ABS deployment – Opportuni
Slide 48: Slide 48
Slide 49: Slide 49
Slide 50: _ _
_ _
Slide 51: _ _
_ _
Slide 52: Gain Traction Through More Disciplined Execution
35 • across all activities creating value for all businesses Talent Technology Customer Intimacy Purchasing Operating System in every business Business Programs that define: 3-year aspirations Priority levers Accountability Gain Traction Through More Disciplined Execution Disciplined Execution Alcoa
Slide 53: Slide 53
Slide 54: Slide 54
Slide 55: _ |
_ | 2
Slide 56: _ |
_ | 2
Slide 57: _ |
_ | 2
Slide 58: Slide 58
Slide 59: Our Innovation & Technology Continue to Lead to Market Potential
38 Recycling Alloy Development Surface Enhancements Process Improvements Design Expertise Customer Solutions Our Innovation & Technology Continue to Lead to Market Potential
Slide 60: Slide 60
Slide 61: Alcoa: Great Past, Present, and Future
40 Alcoa: Great Past, Present, and Future 2008 We reshaped the industry We innovated markets We invented the industry 1888 1900 Alcoa can’t wait Alcoa can’t wait for tomorrow for tomorrow
Slide 62: For Additional Information, Contact
41 Greg Aschman Director, Investor Relations Alcoa 390 Park Avenue New York, N.Y. 10022-4608 Telephone: (212) 836-2674 Facsimile: (212) 836-2813 www.alcoa.com For Additional Information, Contact:
Slide 63: 42
42
Slide 64: Appendix
43 APPENDIX
Slide 65: Reconciliation of Adjusted Income
44 Reconciliation of Adjusted Income (in millions, except per share amounts)
Slide 66: Reconciliation of ATOI to Consolidated Net Income
45 Reconciliation of ATOI to Consolidated Net Income $ 303 $ 2,564 $ 632 $ 555 $ 715 $ 662 Consolidated net income (98) (22) Other – (7) (3) (1) (11) Discontinued operations (30) (307) (311) (18) Restructuring and other charges (82) (388) (100) (101) (101) (86) Corporate expense (67) (365) (64) (76)
Slide 67: Reconciliation of Return on Capital
46 Return on Capital (ROC) is presented based on Bloomberg Methodology which calculates ROC based on trailing four quarters. Reconciliation of Return on Capital 1Q'08 4Q'07 3Q'07 2Q'07 1Q'07 4Q'06 3Q'06 2Q'06 1Q'06 Bloomberg Bloomberg Bloomberg Bloomberg Bloomberg Bloomberg Bloomberg Bloomberg Bloom
Slide 68: Reconciliation of Adjusted Return on Capital
47 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 productive assets. The company has significan
Slide 69: Days of Working Capital
48 Days of Working Capital $ 6,878 $ 6,482 $ 6,472 Adjusted Sales (b) 50.7 44.6 55.5 Days of Working Capital 1,436 Packaging and Consumer, Soft Alloy Extrusions, and Auto Castings $ 7,375 $ 7,387 $ 7,908 Sales $ 3,832 $ 3,141 $ 3,992 Working Capital 2,895 2,787 2,287 Less: Accounts payable, trade 3,
Slide 70: Segment Realignment Detail
49 FLAT-ROLLED PRODUCTS SEGMENT 1Q06 2Q06 3Q06 4Q06 2006 1Q07 2Q07 3Q07 4Q07 2007 ENGINEERED PRODUCTS AND SOLUTIONS SEGMENT 1Q06 2Q06 3Q06 4Q06 2006 1Q07 2Q07 3Q07 4Q07 2007 Segment Realignment Detail In the first quarter of 2008, management approved a realignment of Alcoa's reportable segments to b
Slide 71: Reconciliation of Segment Information
50 Reconciliation of Segment Information (aluminum shipments in thousands of metric tons; dollars in millions) Reconciliation of third-party aluminum shipments: 1Q07 2Q07 3Q07 4Q07 2007 1Q08 Total segment third-party aluminum shipments 1,205 1,269 1,304 1,318 5,096 1,342 Corporate: Automotive Castin
Slide 72: Adjusted Income Statement Items
51 Adjusted Income Statement Items