Slide 1: 1st Quarter 2011 Earnings Conference
st Quarter 2011 Earnings Conference April 11, 2011 Exhibit 99.2
Slide 2: Forward-Looking Statements
__F Forward-Looking Statements This presentation contains statements that relate to future events and expectations and as such constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those containing such wo
Slide 3: Chuck McLane, Executive Vice President and Chief Financial Officer
Chuck McLane Executive Vice President and Chief Financial Officer
Slide 4: 1st Quarter 2011 Financial Overview
1 st Quarter 2011 Financial Overview Income from Continuing Operations of $309 million, or $0.27 per share; Restructuring and other special items totaled an unfavorable $8 million, or $0.01 per share Revenue up 22% versus first quarter and 5% sequentially Adjusted EBITDA of $955 million , up 22% fro
Slide 5: Income Statement Summary
Income Statement Summary $ Millions 1Q’10 4Q’10 1Q’11 Year Change Sequential Change Sales $4,887 $5,652 $5,958 $1,071 $306 Cost of Goods Sold $4,013 $4,538 $4,715 $702 $177 COGS % Sales 82.1% 80.3% 79.1% (3.0 % pts.) (1.2 % pts.) Selling, General Administrative, Other $239 $282 $245 $6 ($37) SGA % S
Slide 6: Restructuring and Other Special Items
Restructuring and Other Special Items See appendix for Adjusted Income reconciliation
Slide 7: Sequential and Prior Year Improvements in All Segments
Sequential and Prior Year Improvements in All Segments * These amounts represent the sum of all reconciling items (excluding discontinued operations) within the Reconciliation of ATOI included in the appendix
Slide 8: 1st Quarter 2011 vs. 4th Quarter 2010 Earnings Bridge
1 st Quarter 2011 vs. 4 th Quarter 2010 Earnings Bridge Income from Continuing Operations excluding Restructuring & Other Special Items ($ millions) See appendix for reconciliation $223 $81 $81 $41 ($21) ($14) ($22) ($31) ($7) ($9) ($5) $317 4Q10 LME Price/ Mix Productivity Energy Currency Raw Mater
Slide 9: Alumina 1st Quarter Highlights and 2nd Quarter Outlook
Alumina 1 st Quarter Highlights 2 nd Quarter Outlook 1 st Quarter Business Conditions 1 st Quarter Performance Bridge 1Q 10 4Q 10 1Q 11 Production (kmt) 3,866 4,119 4,024 rd Party Shipments (kmt) 2,126 2,433 2,206 rd Party Revenue ($ Millions) ATOI ($ Millions) Realized third-party alumina price up
Slide 10: Primary Metals 1st Quarter Highlights and 2nd Quarter Outlook
Primary Metals 1 st Quarter Highlights 1 st Quarter Business Conditions 2 nd Quarter Outlook 1 st Quarter Performance Bridge 1Q 10 4Q 10 1Q 11 Production (kmt) rd Party Shipments (kmt) rd Party Revenue ($ Millions) 1,702 1,970 1,980 rd Party Price ($/MT) 2,331 2,512 2,682 ATOI ($ Millions) Realized
Slide 11: Flat-Rolled Products 1st Quarter Highlights and 2nd Quarter Outlook
2 nd Quarter Outlook 1 st Quarter Business Conditions 1 st Quarter Highlights 1 st Quarter Performance Bridge Flat-Rolled Products $29 $17 ($2) ($2) ($7) ($7) $53 $81 ATOI $ Millions 1Q 10 4Q 10 1Q 11 Flat-Rolled Products, excl Russia, China & Other Russia, China & Other (17) (2) (3) Total ATOI 32%
Slide 12: Engineered Products and Solutions 1st Quarter Highlights
Engineered Products and Solutions 1 st Quarter Performance Bridge 1 st Quarter Business Conditions 1 st Quarter Highlights 2 nd Quarter Outlook $ Millions 1Q 10 4Q 10 1Q 11 rd Party Revenue 1,074 1,215 1,247 ATOI Adjusted EBITDA Margin 14% 17% 18% $ Millions Building and construction market with con
Slide 13: 1st Quarter 2011 Cash Flow Overview
1 st Quarter 2011 Cash Flow Overview See appendix for Free Cash Flow reconciliation 1Q’11 FCF ($0.4) billion $0.9 billion of cash Debt-to-Cap in target range at 33.6% DWC better by two Days from Q1 ($ Millions) 1Q'10 4Q'10 1Q'11 Net Income ($179) $292 $366 DD&A Change in Working Capital (336) (646)
Slide 14: Sustainable Reductions in Days Working Capital
Sustainable Reductions in Days Working Capital 1Q 1Q 1Q Sustained historically low days working capital performance 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q See appendix for Free Cash Flow reconciliation GPP GRP EPS
Slide 15: We Are Focused on Achieving Our 2011 Goals
Sustaining Capital Growth Capital Ma’aden Invest Debt-to-cap Free Cash Flow We Are Focused on Achieving Our 2011 Goals 2011 Cash Sustainability Operational Targets and Actual Performance $400 $ Millions $197 $ Millions $ Millions % Actual Target YTD $85 35.0% 34.9% Actual Target YTD 33.6% $500 $445
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A
Slide 17: Klaus Kleinfeld, Chairman and Chief Executive Officer
Klaus Kleinfeld Chairman and Chief Executive Officer
Slide 18: Market Conditions in 2011 Continue to Strengthen
Market Conditions in 2011 Continue to Strengthen Source: Alcoa analysis Alcoa End Markets: Current Assessment of 2011 vs. 2010 Conditions 9%-13% sales growth 0%-5% sales growth 9%-14% sales growth 5%-11% sales growth 45%-50% sales growth 16%-21% sales growth 0%-3% sales growth 5%-10% sales growth Re
Slide 19: End Market Developments Support Strong Demand Growth
*Other consists of: Middle East, Latin America ex Brazil, and Rest of World including unallocated global increase End Market Developments Support Strong Demand Growth
Slide 20: Inventories Increase, but Premiums Attest Physical Tightness
Inventories Increase, but Premiums Attest Physical Tightness Source: Alcoa estimates, LME, SHFE, IAI, Marubeni, Platt’s Metals Week and Metal Bulletin Regional Premiums Near All-Time Highs Global Inventories Increase in Q1 2011 $114 / MT $204 / MT $145 / MT 0% 100% 200% 300% 400% 500% 600% 700% 800%
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Slide 22: 12th Five Year Plan Accelerates Change in Aluminum Industry
12 th Five Year Plan Accelerates Change in Aluminum Industry
Slide 23: 2011 Primary Aluminum Balances Unchanged
2011 Primary Aluminum Balances Unchanged China Western World Source: Alcoa estimates, Brook Hunt, CRU, CNIA, IAI Western World Annualized Production (Feb 2011) 25,385 Restarts and Expanded Capacity 1,100 Total Supply 26,485 Western World Consumption (25,540) (Deficit) Surplus China Annualized Produc
Slide 24: 2011 Global Alumina Balance Unchanged
2011 Global Alumina Balance Unchanged Source: Alcoa estimates, Brook Hunt, CRU, CNIA, IAI China Western World 2011 Annualized Production 31,500 Imports from Western World 3,500 Supply 35,000 Demand (35,000) (Deficit) / Surplus 2011 Annualized Production 55,900 Exports to China (3,500) Supply 52,400
Slide 25: Alumina: Strong Performance and Strengthening Pricing
Alumina: Strong Performance and Strengthening Pricing 2015 Cost Curve Targets Source: CRU; Platt’s Index Adjusted EBITDA per Metric Ton Global Capacity: 18,100 kmt per year Strengthening Alumina Index Prices – Sao Luis and Juruti continue to break production records – Volume increases at Suriname an
Slide 26: Aluminum: Continued Strength but Looking to the Future
2015 Cost Curve Targets Aluminum: Continued Strength but Looking to the Future Source: CRU Global Capacity: 4,500 kmt Adjusted EBITDA per Metric Ton US Production Captures LME Increase Aluminum Cost Curve – Driving down the cost curve – US restarts on-track, increasing US-based production and captur
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Slide 29: Ma'aden Project is progressing very well
Ma’aden Project is progressing very well Alcoa Logo Potline #1 Electrical Switch Building Cathode Sealing Plant Paste Plant Port Rail
Slide 30: Rolled Products: Strong Start to Targeted Revenues & Margin
Rolled Products: Strong Start to Targeted Revenues & Margin Adjusted EBITDA & Adjusted EBITDA Margin 2011 YTD 3 rd Party Sales by Market Leveraging our strategic asset base Strong Growth in Adjusted EBITDA per Tonne Distribution 15% Automotive 7% B&C 6% Commercial Transport 5% Industrial /Other 12%
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Slide 33: Russia Profitable Since Q2 2010; GRP Growth Projects in Russia and China
Russia Profitable Since Q2 2010 Solid Progress on GRP Growth Projects in Russia and China China Ramping Up by 2012 Solid Growth in all segments, especially can stock 60% volume growth from Q1 2010 Improving mix of products and customers drives higher realized conversion revenue Focus on increasing a
Slide 34: Engineered Products: Record Margins and Focus on Growth
Aerospace 48% Engineered Products: Record Margins and Focus on Growth Adjusted EBITDA & Adjusted EBITDA Margin 2011 YTD 3 rd Party Sales by Market Strong Platform for Profitable Growth Continued Innovation in All of our Businesses IGT 10% B&C 18% Commercial Transport 15% Automotive 3% Other 6% Adjus
Slide 35: Alcoa Aerospace: A History of Growth and Innovation
Alcoa Aerospace: A History of Growth and Innovation Growth in Aerospace Revenue ($b) Deep Product Breadth Alcoa Content: Tip to Tail – Wing to Wing 1 Aerospace revenues are 48% of overall EPS; 2 Aerospace revenues are 11% of overall GRP $1.5 $0.7 $0.9 $2.9 2X EPS Fastening Systems Forgings & Extrusi
Slide 36: Strong Start to 2011 is Just the Beginning
Strong Start to 2011 is Just the Beginning Strengthening Markets Strong Performance Meeting our Aggressive Targets EPS: $1.6b in Revenue Growth by 2013 ($b) GRP: $2.5b in Revenue Growth by 2013 ($b) $6.3 $1.9 $4.6 $1.2 Sales • 22% revenue growth from Q1 2010 Alumina •$71 Adjusted EBITDA/mt, 8% bette
Slide 37: That's why … Alcoa can't wait …for tomorrow
That's why … Alcoa can't wait …for tomorrow That's why … Alcoa can't wait …for tomorrow Alcoa Logo
Slide 38: Additional Information
Additional Information Roy Harvey Director, Investor Relations A 390 Park Avenue New York, NY 10022-4608 Telephone: (212) 836-2674 www.alcoa.com
Slide 39: Annual Sensitivity Summary
Annual Sensitivity Summary Currency Annual Net Income Sensitivity LME Aluminum Annual Net Income Sensitivity +/- $0.01 versus USD Australian $ (USD to AUD) +/- $10 million Brazilian $ (BRL to USD) +/- $ 3 million Euro € (USD to EUR) +/- $ 2 million Canadian $ (CAD to USD) +/- $ 4 million +/- $100/MT
Slide 40: Revenue Change by Market
Revenue Change by Market 1Q’11 Third Party Revenue Sequential Change Year-Over-Year Change 7% 30% 2% 12% 13% (12%) 14% (1%) 7% 1% 20% 5% 26% 37% (2%) 8% 45% 25% 27% 16% 13% 3% 7% 5% 4% 2% 14% 5% 14% 33% Aerospace Automotive B&C Comm. Transport Industrial Products IGT Packaging Distribution/Other Alu
Slide 41: Reconciliation of ATOI to Consolidated Net (Loss) Income Attributable to Alcoa
Reconciliation of ATOI to Consolidated Net (Loss) Income Attributable to Alcoa (in millions) 1Q10 2Q10 3Q10 4Q10 1Q11 Total segment ATOI $ 306 $ 381 $ 328 $ $ 1,424 $ Unallocated amounts (net of tax): Impact of LIFO (14) (3) (2) (16) (24) Interest expense (77) (77) (91) (76) (321) (72) Noncontrollin
Slide 42: Reconciliation of Adjusted Income
Reconciliation of Adjusted Income (in millions, except per- share amounts) Income Diluted EPS Quarter ended March 31, December 31, March 31, March 31, December 31, March 31, Net (loss) income attributable to Alcoa $ (201) $ 258 $ 308 $ (0.20) $ 0.24 $ 0.27 Loss from discontinued operations (7) – (1)
Slide 43: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow (in millions) Quarter ended Year ended March 31, December 31, Cash provided from operations $ (236) $ 2,261 Capital expenditures (204) (1,015) Free cash flow $ (440) $ 1,246 Free Cash Flow is a non-GAAP financial measure. Management believes that this measure is mean
Slide 44: Reconciliation of Alcoa Adjusted EBITDA
Reconciliation of Alcoa Adjusted EBITDA ($ in millions) 1Q10 4Q10 1Q11 Net income (loss) attributable to $ 908 $ 420 $ 938 $ 1,310 $ 1,233 $ 2,248 $ 2,564 $ (74) $ (1,151) $ 254 $ (201) $ 258 $ 308 Add: Net income attributable to noncontrolling interests Cumulative effect of accounting changes – (34
Slide 45: Reconciliation of Alumina Adjusted EBITDA
Reconciliation of Alumina Adjusted EBITDA ($ in millions, except per metric ton amounts) 4Q10 1Q11 After-tax operating income (ATOI) $ 471 $ 315 $ 415 $ 632 $ 682 $ 1,050 $ 956 $ 727 $ 112 $ 301 $ 65 $ 142 Add: Depreciation, depletion, and amortization Equity (income) loss (1) (1) – (1) – (1) (7) (8
Slide 46: Reconciliation of Primary Metals Adjusted EBITDA
Reconciliation of Primary Metals Adjusted EBITDA ($ in millions, except per metric ton amounts) 1Q11 After-tax operating income (ATOI) $ 905 $ 650 $ 657 $ 808 $ 822 $ 1,760 $ 1,445 $ 931 $ (612) $ 488 $ 202 Add: Depreciation, depletion, and amortization Equity (income) loss (52) (44) (55) (58) (82)
Slide 47: Reconciliation of Flat-Rolled Products Adjusted EBITDA
Reconciliation of Flat-Rolled Products Adjusted EBITDA ($ in millions, except per metric ton amounts) 1Q11 After-tax operating income (ATOI) $ 253 $ 225 $ 222 $ 254 $ 278 $ 233 $ 178 $ (3) $ (49) $ $ 81 Add: Depreciation, depletion, and amortization Equity loss – – – – – – Income taxes Other (5) (8)
Slide 48: Reconciliation of Engineered Products and Solutions Adjusted EBITDA
Reconciliation of Engineered Products and Solutions Adjusted EBITDA Alcoa’s definition of Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) is net margin plus an add-back for depreciation, depletion, and amortization. Net margin is equivalent to Sales minus the follow