EX-99.2 3 dex992.htm SLIDES PRESENTED DURING ALCOA INC. FOURTH QUARTER 2008 EARNINGS CALL

[Alcoa logo] January 12, 2009 4 th Quarter 2008 Analyst Conference Exhibit 99.2

[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 actual results or actions may differ materially from those projected in the forward-looking statements. For a summary of the specific risk factors that could cause results to differ materially from those expressed in the forward-looking statements, please refer to Alcoa’s Form 10-K for the year ended December 31, 2007 and Forms 10-Q for the quarters ended March 31, 2008, June 30, 2008 and September 30, 2008 and other reports filed with the Securities and Exchange Commission. 2

[Alcoa logo] Executive Vice President and Chief Financial Officer Chuck McLane

[Alcoa logo] 4th Quarter 2008 Financial Overview – Loss from continuing operations of $929m or $1.16 per share • Restructuring, impairment and other special items of $708m or $0.88 per share – Revenue of $5.7 billion, down 18% – Sequential metal price reduction of 35% – Significant market deterioration – Cash from operations of $608m – Cash on hand at $762m – Incremental bank facility of $1.9b – Trailing 12-month ROC stands at 6.7%, excluding growth investments and restructuring charges 4

[Alcoa logo] Sequential Income Statement In Millions 3Q'08 4Q'08 Change Sales $6,970 $5,688 (18%) Cost of Goods Sold $5,648 $5,277 (7%) % of Sales 81.0% 92.8% 11.8 pts SG&A $275 $273 (1%) % of Sales 3.9% 4.8% 0.9 pts Restructuring and Other Charges $38 $863 nm Interest Expense $96 $125 30% Other Expense/(Income) $15 $(36) nm Effective Tax Rate 25.9% 20.4% (5.5 pts) Minority Interests $84 - (100%) GAAP Net Income/(Loss) $268 ($1,191) ($1,459) Loss from Discontinued Operations ($38) ($262) ($224) GAAP Income/(Loss) from Continuing Operations $306 ($929) ($1,235) GAAP Income/(Loss) from Continuing Operations per Diluted Share $0.37 ($1.16) ($1.53) 5

[Alcoa logo] Restructuring & Other Special Items After-Tax Earnings Income Statement Amount Per Share Classification Segment Loss from Continuing Operations ($929) ($1.16) Restructuring: Headcount ($97) ($0.12) Restructuring Corporate Global Foil (100) (0.13) Restructuring Corporate Europe Auto Structures (50) (0.06) Restructuring Corporate Sapa Exchange (223) (0.28) Restructuring Corporate Other Asset Write-offs (144) (0.18) Restructuring Corporate Restructuring Sub-Total ($614) ($0.76) Other Special Items: Shutdown Related Obsolete Inventory ($16) ($0.02) COGS Flat-Rolled/Engineered Products Environmental Reserve (26) (0.03) COGS Corporate Accounts Receivable Reserve (11) (0.02) SG&A Corporate Non-Cash Tax on Repatriated Earnings (65) (0.08) Tax Corporate Refund of Indemnification Payment 24 0.03 Other Income Corporate Other Special Items Sub-Total ($94) ($0.12) Total Restructuring & Other Special Items ($708) ($0.88) 6

[Alcoa logo] Minority After-Tax 4th Quarter 2008 Pre-Tax Tax $ Tax % Interest & M.I. Reported Effective Tax Rate ($1,167) ($238) 20.4% $0 ($929) Adjustments Restructuring ($863) ($226) 26.2% ($23) ($614) Non-Cash Tax on Repatriated Earnings 65 (65) Adjustments Sub-Total ($863) ($161) 18.7% ($23) ($679) Operational Effective Tax Rate ($304) ($77) 25.3% $23 ($250) Total Year 2008 Reported Effective Tax Rate $792 $342 43.2% $221 $229 Adjustments Restructuring ($939) ($246) 26.2% ($23) ($670) Non-Cash Tax on Repatriated Earnings 65 (65) Other Discrete Tax Items 33 (33) Adjustments Sub-Total ($939) ($148) 15.8% ($23) ($768) Operational Effective Tax Rate $1,731 $490 28.3% $244 $997 2008 Tax Reconciliation – 4 th Quarter & Full Year 7

[Alcoa logo] 4Q vs. 3Q 2008 Earnings Bridge Income From Continuing Operations Excluding Restructuring & Other Special Items 4Q 2008 Other Special Items = Obsolete Inventory, Environmental Reserve, A/R Reserve, Non-Cash Tax on Repatriated Earnings and Refund of Indemnification Payment (net $94m in total) See Slide 42 for Reconciliation $331 $560 ($221) $339 $164 $88 $191 $69 ($300) ($200) ($100) $0 $100 $200 $300 $400 $500 $600 $700 3Q08 Energy Currency Price/Mix Volume LME 4Q08 8

[Alcoa logo] 4Q 08 3Q 08 4Q 07 2,123 2,010 2,030 3 rd Party Shipments (kmt) 3,776 3,790 3,855 Production (kmt) 722 805 688 3 rd Party Revenue ($ million) 162 206 205 ATOI ($ million) 16% lower realized pricing Point Comfort curtailment led to lower production Sequential benefit of $33 million from Western Australia gas disruption recovery Stronger US dollar benefit of $64 million through lower cost base Lower energy costs realized Alumina 4 th Quarter Highlights 1 st Quarter Outlook Prices to follow approximate two-month lag Anticipate 5% lower production due to curtailments Current US dollar slightly weaker than 4Q average Lower fuel oil costs 4 th Quarter Business Conditions $50 $100 $150 $200 $250 $300 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q08 4Q08 $0 $300 $600 $900 $1,200 $1,500 $1,800 ATOI Total Revenue 9

[Alcoa logo] Refining Cost Overview Composition of Refining Production Costs Pricing convention Inventory flow Input Cost 6 - 9 month lag 2 - 3 months Bauxite Spot & semi- annual 3 - 6 months Caustic soda Rolling 16 quarters 1 – 2 months Natural gas Prior month 1 – 2 months Fuel oil Fuel Oil 14% Natural gas 15% Caustic 10% Bauxite 25% Conversion 36% 10

[Alcoa logo] 4 th Quarter Highlights (101) 297 196 ATOI ($ million) 2,125 2,945 2,646 3 rd Party Price ($/mt) 1,580 2,127 1,597 3 rd Party Revenue ($ million) 4Q 08 3Q 08 4Q 07 807 704 624 3 rd Party Shipments (kmt) 971 1,011 959 Production (kmt) Primary Metals 1 st Quarter Outlook 4 th Quarter Business Conditions Realized pricing down 28% sequentially LME-linked costs declining but on lagged basis Stronger US dollar benefit of $94 million through lower cost base Sequential negative $21 million impact of Rockdale curtailment Favorable sequential energy of $23 million Realized pricing trending closer to spot Anticipate 8% lower production due to curtailments LME linked costs to continue decline Current US dollar slightly weaker than 4Q average Cost savings from procurement actions on carbon products start to hit bottom line 11 -$250 -$150 -$50 $50 $150 $250 $350 $450 $550 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q08 4Q08 $1,350 $1,850 $2,350 $2,850 $3,350 $3,850 ATOI Total Revenue

[Alcoa logo] Smelting Cost Overview Pricing convention Inventory flow Input Cost 1 – 3 month lag 1 - 2 months Materials Spot & semi-annual 1 - 2 months Carbon 40% LME linked – 3 month lag 1 – 2 months Power 2 – 3 month lags 1 – 2 months Alumina Several significant input costs lag average primary metal revenue by up to 3 months 12

[Alcoa logo] Flat-Rolled Products 1 st Quarter Outlook 4 th Quarter Business Conditions (97) (38) (67) Russia, China & Other 29 7 60 3Q 08 Total Hard Alloy Extrusions 8 Global Rolled Products, excl Russia & China (15) 44 4Q 07 (98) 8 (9) 4Q 08 ATOI ($ million) Continued weakness in end markets Input costs expected to decline Sharp decline in demand as economic environment worsened 11% lower shipments on top of a seasonally weak 3Q Non can sheet shipments down 20% Boeing strike impact of $10 million Bohai start-up costs of $9 million Divestiture related inventory obsolescence $12 million ($120) ($80) ($40) $0 $40 $80 $120 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q08 4Q08 $1,600 $1,800 $2,000 $2,200 $2,400 $2,600 $2,800 ATOI Third Party Revenue 13

[Alcoa logo] Global Rolling Demand Collapse • 2008 demand well below 2007 • No sign of seasonal up-lift • Dramatic deterioration in 4Q orders over the last 3 weeks Downturn Evident in Flat-Rolled Products 14 Apr May Jun Jul Aug Sep Oct Nov Dec 2007 2008 Global Rolling Order Rates 2008 & 2007

[Alcoa logo] Flat-Rolled Products Market Drivers +7% - 37% - 11% - 26% - 18% - 36% - 23% Total -17% Revenue Composition Sequential Revenue Change 15

[Alcoa logo] Engineered Products and Solutions 5.2 9.2 5.9 ATOI% / Revenue 133 1,451 3Q 08 ATOI Third Party Revenue 77 1,311 4Q 07 65 1,258 4Q 08 Market declines adversely affected all businesses Boeing strike ($5 million effect) & seasonal impacts resulted in lower aerospace demand 4 th Quarter Highlights 4 th Quarter Business Conditions 1 st Quarter Outlook Further weakness expected in commercial transportation and commercial construction markets Revenue from automotive market reduced to 5% of total segment as a result of portfolio moves Productivity initiatives expected to gain momentum $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q08 4Q08 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 $2,200 ATOI Third Party Revenue 16

[Alcoa logo] Record earnings despite market headwinds Cost efficient capacity expansions in fasteners and i nvestment castings along with working capital efficiencies Strong market positions in aerospace, IGT, B&C and fastener acquisition offset unprecedented decline in North American & European truck and automotive markets Productivity improvements continue to accelerate and yield bottom line benefits Return on Capital Sales (in billions) 7% ATOI (in millions) 23% 16% Engineered Products & Solutions Financial Metrics $5.3 $5.6 2007 2008 $409 $503 2007 2008 2007 2008 17

[Alcoa logo] Cash Flow Statement In Millions 4Q'07 3Q'08 4Q'08 Net Income $632 $268 $(1,191) DD&A 312 311 292 Change in Working Capital 385 (552) 590 Other Adjustments (661) 298 955 Pension Contributions (25) (418) (38) Cash From Operating Activities $643 $(93) $608 Dividends to Shareholders $(143) $(140) $(136) Change in Debt 467 1,573 444 Dividends to Minority Interests (58) (76) (102) Contributions from Minority Interests 105 130 214 Share Repurchases (948) (477) - Share Issuances 16 1 - Other Financing Activities 2 (7) (43) Cash From Financing Activities $(559) $1,004 $377 Capital Expenditures $(1,021) $(877) $(1,017) Sales of Assets/Investments 126 115 26 Additions to Investments (8) (39) (27) Other Investing Activities (16) (56) (5) Cash From Investing Activities $(919) $(857) $(1,023) 18

[Alcoa logo] Capital Expenditures Capital Expenditure History 2009 Capital Expenditures Forecast Values $ Millions Values $ Millions 71% 29% $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 FY06 FY07 FY08 FY09 0% 50% 100% 150% Total Capital Expenditures Non-Growth Capex as % of Depreciation 393 328 876 187 $0 $500 $1,000 $1,500 2009 First Half 2009 Second Half Non-Growth Growth 19

[Alcoa logo] 59% 87% 96% 33% 43% 34% October November December Alcoa Tier II Issuers Liquidity Remains Strong Added revolver amid financial market crisis Good performance in difficult CP markets Values $ Billions Source: The Federal Reserve Board % of Period Issuance with Maturity One Week or Greater 1.5 1.2 1.2 1.5 5.2 3.3 3.3 3.3 1Q 08 2Q 08 3Q 08 4Q 08 Commercial Paper Additional Revolver Availability 20

[Alcoa logo] Cash Conservation Efforts Wide-Ranging Actions Taken 21

[Alcoa logo] President and Chief Executive Officer Klaus Kleinfeld

[Alcoa logo] Accomplishments: Clear strategy, speed & execution 2008 Accomplishments Secured long-term power contracts for nearly half of smelting system Completed successful start-up of Fjardaal, first greenfield smelter in two decades Record earnings in Engineered Products & Solutions Completed Packaging divestiture Fast response to early signals, e.g.: Reached agreement for soft alloy extrusion swap Increased debt capacity and improved debt structure Named to Dow Jones Sustainability Index for 7 straight year Three Strategic Priorities 23 Disciplined Execution across all activities Alcoa Advantage creating value for all businesses – Talent – Technology – Customer Intimacy – Purchasing – Operating System Profitable Growth in every business Business Programs define: –3-year aspirations –Priority levers –Accountability Disciplined Execution across all activities Alcoa Advantage creating value for all businesses – Talent – Technology – Customer Intimacy – Purchasing – Operating System Profitable Growth in every business Business Programs that define: –3-year aspirations –Priority levers –Accountability th

[Alcoa logo] Historic collapse in metal price – (56%) over 5 months LME cash price/ton, in US$ and global inventory 1 , in days Reported Stocks, Days of Consumption LME Cash Price 1 Reported Stocks : Comex, IAI, Japan Port , LME, & SME 0 5 10 15 20 25 30 35 40 45 50 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 - 56% 0 5 10 15 20 25 30 35 40 45 50 0 5 10 15 20 25 30 35 40 45 50 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 - 56% 24 Source: IAI and Bloomberg

[Alcoa logo] Expect global demand decline of 2% in 2009 Source: Alcoa analysis Note: 2009 Projected Global Consumption: 36.2 million mt Asia w/o China North America 2008 Actual 2009 Forecast Global Demand Growth Rates: 2008: -3% 2009: -2% Brazil China CIS Europe 2009 Projected Consumption 5% 1% 3% -2% -7% -4% 9% -12% -9% -2% -10% 2008 vs. 2009 Projected Growth Rates 3% Primary Aluminum Consumption Growth Rates, 2009, in million mt 0.9 1.0 4.9 5.3 7.0 13.1 0.9 1.0 4.9 5.3 7.0 13.1 25

[Alcoa logo] Curtailment announcements – 13% of global output Global Smelting Curtailment Announcements 1 15% (840) 5,700 North America Region Aug 08 Production¹ Announced Curtailment¹ Percentage Curtailed China 14,000 (3,000) 21% Eastern Europe/Russia 4,650 (574) 12% Western Europe 4,600 (230) 5% Asia/Middle East 3,950 (80) 2% Latin America 2,700 (93) 3% Oceania 2,300 (102) 4% Africa 1,700 (100) 6% Total 39,600 (5,020) 13% 1,442 Sep 2008 & Prev 5,020 1,139 679 By Month Oct 2008 Nov 2008 Dec 2008 Jan 2009 Total 840 920 1 Annualized kmt By Region 13% of total global output 800 completed 26

[Alcoa logo] 2009 – Aluminum Surplus or Deficit? Supply Demand 2008 Production 38,800 Estimated 2009 incremental production 600 Announced curtailments (3,500) Total 2009 Production 35,900 2008 Consumption 37,000 Lower 2009 consumption (2%) (800) Stimulus effects ?? Total 2009 Consumption ?? Aluminum Supply / Demand Balance (in kmt) Source: Alcoa analysis, CRU, IAI 27

[Alcoa logo] Managing downturn along the three strategic priorities Three Strategic Priorities and Downturn Management Disciplined Execution across all activities Alcoa Advantage creating value for all businesses – Talent – Technology – Customer Intimacy – Purchasing – Operating System Profitable Growth in every business Business Programs that define: – 3-year aspirations – Priority levers – Accountability Disciplined Execution across all activities Alcoa Advantage creating value for all businesses – Talent – Technology – Customer Intimacy – Purchasing – Operating System Profitable Growth in every business Business Programs that define: – 3-year aspirations – Priority levers – Accountability Accelerated portfolio moves (in & out) Curtailments Plant shut downs Headcount reduction Additional flexibility R&D technology refocus Share growth Procurement savings Corporate overhead reduction Increased debt capacity Speedy execution Focus on cash and bottom line Capital spend reduction T U R N M A N A G 28

[Alcoa logo] Getting ahead of the curve 2008/09 Alcoa Downturn Actions Jul 11 Downsized Electrical and Electronic Solutions Honduran & Mexican operations Sep 30 Curtailed 150,000 mt at Rockdale smelter Oct 7 Announced halting of all non-critical capital spend Oct 23 Reduced production at Point Comfort refinery by 25% (550,000 mt) Nov 10 Curtailed additional 350,000 mt aluminum production over global smelting system Jan 6, 2009 Announced wide-ranging actions to address economic downturn Sep 17 Suspended share repurchases Oct 6 Power & Propulsion announced headcount reductions in response to market conditions Dec 22 Agreement with Orkla to swap soft alloy extrusion share for Elkem smelter share Alcoa Downturn Actions: Timeline 29

[Alcoa logo] Portfolio Streamlining Production Curtailments Cost & Procurement Efficiencies Liquidity Initiatives Suspend share repurchases Limit capital spending Comply with law Fulfill customer requirements Complete Brazilian growth Secured additional credit facility Restructuring actions incorporate all improvement levers Initiate smelting curtailments totaling 750 kmt Adjust refining capacity downward by 1.5 million mt per year Workforce reduction 13,500 headcount 1,700 contractors Global salary & hiring freeze Procurement actions on key inputs Continued success on repowering smelting assets 1.9 million mt Extensions as long as 2043 Swap of Sapa stake for Elkem smelters Divest four mid & downstream businesses Electrical & Electronic Solutions Global Foil Cast Auto Wheels Transportation Products Europe Restructuring Announcement – January 6, 2009 Restructuring Announcement: Levers and Actions 30

[Alcoa logo] Gaining upstream strength through cash-free swap Elkem Aluminium Sapa JV Equity Swap 46 plants North America and Europe Major customer segments: – Building and construction – Industrial – Commercial transportation Sapa JV Soft Alloy Extrusions Elkem Aluminium Norway Smelters Alcoa Orkla Alcoa Orkla Lista and Mosjoen smelters (282 kmt) 18% of new Mosjoen anode plant (Alcoa owns the remaining 82%) LME-linked power (mostly hydro) to 2019 Both smelters are middle of cost curve 45.45% 54.55% 50% 50% Current Ownership Current Ownership Complete planned exit of soft alloy extrusions in difficult market Building out leading upstream position through adding quality assets (e.g., hydro-based) (operator) (operator) BENEFITS Portfolio Streamlining: Sapa / Elkem Swap 31

[Alcoa logo] 18% (750 kmt) reduction by end 1Q 09 Smelting curtailments taken to maximize cash position Maximize cash position for ramp down and ramp up, considering: •Operational flexibility •Power flexibility •Repowering impact •Community impact Reduce amperage and eliminate end pots Utilize material in inventory to reline, but do not restart pots Targeted smaller curtailments at several locations based upon cost & strategic situation Full curtailment of selected plant(s) Smelting Curtailment Steps 7 plants* 10 plants* Intalco* Baie Comeau* Pocos ** Rockdale* Tennessee** Smelting Production Curtailments: Tiered Approach Guiding Principle * Completed ** In process 32

[Alcoa logo] Increase labor and materials productivity Labor Initiatives Procurement Initiatives Alumina & Primary 2,300 Flat Rolled Products 2,900 Engineered Products & Solutions 8,100 Corporate 200 Total 13,500 •Supply chain management Utilizing Alcoa’s global presence and logistics expertise, demonstrate ability to employ non-traditional sourcing from numerous geographies – e.g., coke & caustic •Change of specifications, e.g., • Coke • Cathodes • Backward integration • Agreements reached covering • Fluoride • Caustic • Coke Headcount reductions • Reduce 1,700 contractor positions • Global salary and hiring freeze 20% reduction vs late 2008 market levels Cost & Procurement Efficiencies: Initiatives 33

[Alcoa logo] Decreased capital spending and increased debt capacity Commercial Paper balance Credit Revolver availability 1Q 08 2Q 08 3Q 08 4Q 08 Capital Spending ($ millions) Debt Maturities ($ millions) Commercial Paper & Debt Capacity ($ billions) 99% of LT Debt maturities beyond 2009 2 half $0.5b 1 half $1.3b Liquidity Initiatives: Results -50% $0 $1 $2 $3 $4 $5 $6 $1.5 $1.2 $1.2 $1.5 $3.3 $3.3 $3.3 $5.2 $0 $1 $2 $3 $4 $5 $6 $1.5 $1.2 $1.2 $1.5 $3.3 $3.3 $3.3 $5.2 34 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 st nd

[Alcoa logo] Reaping substantial benefits Portfolio Streamlining Production Curtailments Cost & Procurement Efficiencies Liquidity Initiatives Restructuring Announcement – January 6, 2009 Restructuring Announcement: Benefits of Actions Benefits of Actions • 25% lower cost per ton in refining & smelting (1Q 09 vs 3Q 08), e.g., • $1.3 billion annualized from procurement & energy • Headcount reductions • Improved overall cost position from curtailments • $450 million before tax annualized benefit comprised of: • $150 million from divested businesses • $200 million from mid/downstream & corporate headcount reductions • $100 million from upstream headcount reductions • Cash-free swap of soft alloy extrusion • Expected $100 million proceeds from divestiture of four businesses • Increase of nearly 60% in short-term debt capacity • Cash preservation through 50% lower capital spending 35

[Alcoa logo] Environment • Total energy consumption to increase by 54% until 2025 – >60% from developing countries • Person Transport rates +40% by 2030 Aluminum prospects remain bright Light Weight High Strength Durable Highly Conductive Non- Corrosive Malleable Recyclable Relative Price 37 70 2008 2018 Demographics Urbanization Aluminum Benefits Aluminum Demand (million mt) 1 Mega Trends Global population • 2006: 6.6 billion • 2025: 7.9 billion • 2050: 9.1 billion 6% CAGR Aluminum Outlook Population living in cities • 2006: > 50% • 2030: > 60% 1 Source: Alcoa analysis 36

[Alcoa logo] … … … Alcoa 25th Alcoa is well-positioned for the future Worst Best … … Alcoa 30th … Current Post Juruti/Sao Luis World class refining system Outstanding power position Bauxite Mining #1 Refining #1 Smelting Capacity #1 End & Tab Can Sheet #1 Can Body Stock #2 Aerospace Sheet & Plate #1 Hard Alloy Extrusions – Advanced #1 General Engineering Plate #1 Aerospace Fastener Systems #1 Aerospace Airfoils #1 IGT Airfoils #1 Aluminum Structural Forgings #1 Aluminum Truck Wheels #1 Commercial Building Systems (NA) #1 Refining Cost Position World leading businesses Alcoa’s Competitive & Power Position Above businesses account for 90% of Alcoa’s overall revenue Contracted power and MOUs Self-generated power Repowering efforts 2009 - 2012 Contracted power and MOUs Self-generated power Repowering efforts 2009 - 2012 37

[Alcoa logo] 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: 38

[Alcoa logo] 39 [Alcoa logo]

[Alcoa logo] APPENDIX 40 [Alcoa logo]

[Alcoa logo] Reconciliation of Return on Capital 41 Bloomberg Return on Capital (1) Bloomberg Return on Capital, Excluding Growth Investments (1) Year ended Year ended December 31, December 31, 2008 2008 Net income (loss) $ (74) Net income (loss) $ (74) Minority interests 221 Minority interests 221 Interest expense Interest expense (after tax) 231 (after tax) 231 Numerator $ 378 Numerator 378 Restructuring charges (3) 670 Net losses of growth investments (4) 300 Adjusted numerator $ 1,348 Average Balances Average Balances $ 521 $ 521 129 129 1,196 1,196 7,440 7,440 55 55 2,529 2,529 13,821 13,821 Denominator $ 25,691 Denominator 25,691 Restructuring chares (3) (436) Capital projects in progress and capital base of growth Investments (4) (5,117) Adjusted denominator $ 20,138 Return on capital 1.5% Return on capital, excluding growth investments and restructuring charges 6.7% (1) The Bloomberg Methodology calculates ROC based on the trailing four quarters. Average balances are calculated as (December 2008 ending balance + December 2007 ending balance) divided by 2 for the year ended December 31, 2008, and (December 2007 ending balance + December 2006 ending balance) divided by 2 for the year ended December 31, 2007. (2) Calculated as total shareholders’ equity less preferred stock. (3) Restructuring charges after-tax and minority interests for the years ended December 31, 2008 and 2007 were $670 million and $201 million, respectively. The pretax amounts are in Restructuring and other charges on Alcoa’s Statement of Consolidated Income. The $436 million is the average of the restructuring charges after-tax and minority interests for the years ended December 31, 2008 and 2007. (4) For all periods presented, growth investments include Russia, Bohai, and Kunshan. Short-term borrowings Short-term debt Commercial paper Long-term debt Preferred stock Minority interests Common equity (2) Short-term borrowings Short-term debt Commercial paper Long-term debt Preferred stock Minority interests Common equity (3)

[Alcoa logo] Reconciliation of Adjusted Income 42 (in millions) Quarter ended September 30, 2008* December 31, 2008 Net income (loss) $ 268 $ (1,191) Loss from discontinued operations (38 ) (262) Income (loss) from continuing operations 306 (929) Restructuring and other charges 25 614 Other special items** – 94 Income (loss) from continuing operations – as adjusted $ 331 $ (221) * Information for the quarter ended September 30, 2008 was reclassified to reflect the movement of the Electrical and Electronic Solutions business to discontinued operations in the fourth quarter of 2008. ** Other special items include obsolete inventory, environmental reserve, accounts receivable reserve, non-cash tax on repatriated earnings, and refund of indemnification payment (see Slide 6 for additional information).

[Alcoa logo] Reconciliation of ATOI to Consolidated Net Income $ (74) $(1,191) $ 268 $ 546 $ 303 $ 2,564 $ 632 Consolidated net income (490) (237) (115) (34) (104) 851 309 Other (303) (262) (38) (7) 4 (250) (6) Discontinued operations (693) (637) (25) (1) (30) (201) 8 Restructuring and other charges (328) (78) (77) (91) (82) (388) (100) Corporate expense (222) (1) (84) (70) (67) (365) (64) Minority interests (265) (81) (63) (57) (64) (261) (53) Interest expense 35 4 10 12 9 40 10 Interest income (7) 73 (5) (44) (31) (24) 9 Impact of LIFO Unallocated amounts (net of tax): $ 2,199 $ 28 $ 665 $ 838 $ 668 $ 3,162 $ 519 Total segment ATOI 2008 4Q08 3Q08 2Q08 1Q08 2007 4Q07 (in millions) 43 In the first quarter of 2008, management approved a realignment of Alcoa's reportable segments to better reflect the core businesses in which Alcoa operates and how it is managed. This realignment consisted of eliminating the Extruded and End Products segment and realigning its component businesses as follows: the building and construction systems business is reported in the Engineered Products and Solutions segment; the hard alloy extrusions business and the Russian extrusions business are reported in the Flat-Rolled Products segment; and the remaining segment components, consisting primarily of the equity investment/income of Alcoa's interest in the Sapa AB joint venture, and the Latin American extrusions business, are reported in Corporate. Additionally, the Russian forgings business was moved from the Engineered Products and Solutions segment to the Flat-Rolled Products segment, where all Russian operations are now reported. Prior period amounts were reclassified to reflect the new segment structure. Also, the Engineered Solutions segment was renamed the Engineered Products and Solutions segment. Prior period information was reclassified to reflect the movement of the Electrical and Electronic Solutions business to discontinued operations in the fourth quarter of 2008.