EX-99.2 3 dex992.htm SLIDES PRESENTED DURING ALCOA INC. FOURTH QUARTER 2010 EARNINGS CALL

4 th Quarter 2010 Earnings Conference January 10, 2011 Alcoa Logo Exhibit 99.2

Alcoa Logo Cautionary Statement 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 words as “anticipates,” “estimates,” “expects,” “forecasts,” “intends,” “outlook,” “plans,” “projects,” “should,” “targets,” “will,” or other words of similar meaning. All statements that reflect Alcoa’s expectations, assumptions, or projections about the future other than statements of historical fact are forward-looking statements, including, without limitation, forecasts concerning global demand for aluminum, aluminum end-market growth, aluminum consumption rates, or other trend projections, targeted financial results or operating performance, and statements about Alcoa’s strategies, objectives, goals, targets, outlook, and business and financial prospects. Forward-looking statements are subject to a number of known and unknown risks, uncertainties, and other factors and are not guarantees of future performance. Actual results, performance, or outcomes may differ materially from those expressed in or implied by those forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include: (a) material adverse changes in aluminum industry conditions, including global supply and demand conditions and fluctuations in London Metal Exchange-based prices for primary aluminum, alumina, and other products, or the effect of the move toward index-based pricing for alumina; (b) unfavorable changes in general business and economic conditions, in the global financial markets, or in the markets served by Alcoa, including automotive and commercial transportation, aerospace, building and construction, distribution, packaging, oil and gas, defense, and industrial gas turbines; (c) the impact of changes in foreign currency exchange rates on costs and results, particularly the Australian dollar, Brazilian real, Canadian dollar, and Euro; (d) increases in energy costs, including electricity, natural gas, and fuel oil, or the unavailability or interruption of energy supplies; (e) increases in the costs of other raw materials, including caustic soda or carbon products; (f) Alcoa’s inability to achieve the level of revenue growth, cash generation, cost savings, improvement in profitability and margins, fiscal discipline, or strengthening of operations (including improving the position of its bauxite, refining and smelter system on the world cost curve), anticipated from its productivity improvement, cash sustainability and other initiatives; (g) Alcoa's inability to realize expected benefits from newly constructed, expanded or acquired facilities or from international joint ventures as planned and by targeted completion dates, including the joint venture in Saudi Arabia or the upstream operations in Brazil; (h) political, economic, and regulatory risks in the countries in which Alcoa operates or sells products, including unfavorable changes in laws and governmental policies; (i) the outcome of contingencies, including legal proceedings, government investigations, and environmental remediation; (j) the outcome of negotiations with, and the business or financial condition of, key customers, suppliers, and business partners; (k) changes in tax rates or benefits; and (l) the other risk factors summarized in Alcoa's Form 10-K for the year ended December 31, 2009, Forms 10- Q for the quarters ended March 31, 2010, June 30, 2010, and September 30, 2010, and other reports filed with the Securities and Exchange Commission (SEC). Alcoa disclaims any obligation to update publicly any forward-looking statements, whether in response to new information, future events or otherwise, except as required by applicable law. Non-GAAP Financial Measures Some of the information included in this presentation is derived from Alcoa’s consolidated financial information but is not presented in Alcoa’s financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP). Certain of these data are considered “non-GAAP financial measures” under SEC rules. These non-GAAP financial measures supplement our GAAP disclosures and should not be considered an alternative to the GAAP measure. Reconciliations to the most directly comparable GAAP financial measures and management’s rationale for the use of the non-GAAP financial measures can be found in the Appendix to this presentation and on our website at www.alcoa.com under the “Invest” section. Any reference during the discussion today to EBITDA means adjusted EBITDA, for which we have provided calculations and reconciliations in the Appendix and on our website. 2

Chuck McLane Executive Vice President and Chief Financial Officer Alcoa Logo

Alcoa Logo 4 th Quarter 2010 Financial Overview Income from Continuing Operations of $258 million, or $0.24 per share; Restructuring and other special items totaled a favorable $35 million, or $0.03 per share Cash from Operations of $1.4 billion; Free Cash Flow of $1.0 billion Revenue up 7% sequentially, 4% versus 4Q’09 Adjusted EBITDA of $782 million, 13.8% Margin Debt balance reduced; cash on hand at $1.5b Debt to Capital of 34.8%, 90 basis points lower sequentially 4

Alcoa Logo Sequential Income Statement Summary $ Millions 3Q’10 4Q’10 Change Sales $5,287 $5,652 $365 Cost of Goods Sold $4,413 $4,538 $125 COGS % Sales 83.5% 80.3% (3.2 % pts.) Selling, General Administrative, Other $232 $282 $50 SGA % Sales 4.4% 5.0% 0.6 % pts. Restructuring and Other Charges $2 ($12) ($14) Effective Tax Rate (81.7%) 16.1% NA Income from Continuing Operations $61 $258 $197 Income Per Diluted Share $0.06 $0.24 $0.18 5

Alcoa Logo $ Millions After-Tax & Non- Controlling Interests Earnings Per Share Income Statement Classification Segment Restructuring $8 Restructuring Corporate Discrete Tax Items $18 Taxes Corporate Mark-to-Market Derivatives $9 Other Income/Expense Corporate Total $35 $0.03 4 th Quarter Restructuring and Special Items 6

Alcoa Logo 4 th Quarter 2010 vs. 3 rd Quarter 2010 Earnings Bridge Income from Continuing Operations excluding Restructuring & Special Items ($ millions) 7 See appendix for reconciliation $96 $154 $14 $12 ($29) ($20) ($17) $35 ($22) $223 3Q10 LME Price/Mix Volume Raw Mat'l Costs Currency Energy Taxes Other 4Q10

Alcoa Logo Alumina 4 th Quarter Highlights 1 st Quarter Outlook 4 th Quarter Business Conditions 8 4Q 09 3Q 10 4Q 10 Production (kmt) 3,897 4,047 4,119 3 rd Party Shipments (kmt) 2,716 2,423 2,433 3 rd Party Revenue ($MM) 760 717 759 ATOI ($MM) 19 70 65 Adjusted EBITDA rises by 23% over Q3 Record quarterly production Realized third-party alumina price up 9% Negative currency impact of $25 million primarily driven by Australian dollar Higher raw material costs Negative impact from discrete Q3 tax benefit in Brazil Sao Luis recovery costs similar to Q3 Production to remain flat Pricing to follow two-month lag on LME Higher maintenance costs of $15m on scheduled outages Sao Luis ramp-up stabilizes with no further recovery costs Productivity improvements to continue 4 th Quarter Performance Bridge $ Millions $70 $65 $50 $1 ($25) $3 ($11) ($29) $6

Alcoa Logo Primary Metals 4 th Quarter Highlights 4 th Quarter Business Conditions 1 st Quarter Outlook 9 4Q 09 3Q 10 4Q 10 Production (kmt) 897 891 913 3 rd Party Shipments (kmt) 878 708 743 3 rd Party Revenue ($MM) 1,900 1,688 1,970 3 rd Party Price ($/MT) 2,155 2,261 2,512 ATOI ($MM) (214) 78 178 Realized pricing up 11% sequentially Aviles returned to full production as planned Negative currency impact in all regions Higher energy and raw material costs Pricing to follow 15-day lag to LME Restart cost of $10 million for US smelters Higher raw material costs Production flat, and productivity improvements to continue 4 th Quarter Performance Bridge $ Millions $78 ($28) ($2) $178 $147 $5 ($11) $5 $8 ($24)

Alcoa Logo 10 1 st Quarter Outlook 4 th Quarter Business Conditions 4 th Quarter Highlights ATOI $ Millions 4Q 09 3Q 10 4Q 10 Flat-Rolled Products, excl Russia, China & Other 64 61 55 Russia, China & Other (27) 5 (2) Total ATOI 37 66 53 Seasonal volume declines in North America and Europe Russia profitable for third consecutive quarter despite lower volumes Scrap and alloying cost pressures Strengthened demand in most regions Improvements in price and mix Higher energy costs expected Productivity improvements to continue 4 th Quarter Performance Bridge $ Millions Flat-Rolled Products $66 $8 ($11) $1 ($2) ($6) ($3) $ 53

Alcoa Logo Engineered Products and Solutions 4 th Quarter Business Conditions 1 st Quarter Outlook 4 th Quarter Highlights 11 Markets remain stable across the portfolio Slight increase in Commercial Transportation offset by Building and Construction seasonality Productivity improvements to continue $ Millions 4Q 09 3Q 10 4Q 10 3 rd Party Revenue 1,097 1,173 1,215 ATOI 57 114 113 Adjusted EBITDA % of Revenue 12% 18% 17% 4 th Quarter Performance Bridge $ Millions $114 $4 $5 $1 ($11) $113 Adjusted EBITDA margin up 5% vs. Q4 '09 Volume improvements in Aerospace and Commercial Transportation Seasonal shutdowns and weather delays impacted results

Alcoa Logo 4 th Quarter 2010 Cash Flow Overview 12 See appendix for free cash flow reconciliation 4Q’10 FCF $1.0 billion $1.5 billion of cash ($ Millions) 4Q'09 3Q'10 4Q'10 Net Income ($268) $109 $292 DD&A 369 358 371 Change in Working Capital 523 213 564 Pension Contributions (26) (26) (43) Taxes / Other Adjustments 526 (262) 186 Cash From Operations $1,124 $392 $1,370 Dividends to Shareholders (30) (31) (31) Change in Debt (286) (555) (113) Distributions to Noncontrolling Interest (47) (41) (102) Contributions from Noncontrolling Interest 153 57 41 Other Financing Activities 0 (4) 4 Cash From Financing Activities ($210) ($574) ($201) Capital Expenditures (363) (216) (365) Other Investing Activities (137) (128) (109) Cash From Investing Activities ($500) ($344) ($474) Debt-to-Cap in target range at 34.8%

Alcoa Logo 2010 Full-Year Financial Overview 13 Exceeded all Cash Sustainability targets Income from Continuing Operations of $262 million, or $0.25 per share; Restructuring and other special items totaled an unfavorable $297 million, or $0.29 per share Cash from operations of $2.3 billion; Free Cash Flow of $1.2 billion, best result since 2003 Selling, General Administrative, Other Expenses less than $1.0b, lowest level since 1999 Adjusted EBITDA of $2.7b, 655% improved from 2009 and Adjusted EBITDA Margins of 12.9%, 11.0% points better than 2009 Debt balance reduced by $654m, debt maturity extended Debt to Capital of 34.8%, 390 basis points lower than Q4 2009

Alcoa Logo 2010 vs. 2009 Earnings Bridge Income (Loss) from Continuing Operations excluding Restructuring & Special Items ($ millions) 14 See appendix for reconciliation ($685) $1,386 $221 ($170) ($333) $371 ($251) $20 $559 YTD09 LME Price / Mix Energy Currency Productivity LIFO Taxes / Other YTD10

Alcoa Logo Exceeded All Cash Sustainability Targets Procurement 1 Overhead $500 Total Capex 2 $1,250 Working Capital 35 2010 Cash Sustainability Operational Targets and Actual Performance $ Millions $509 $1,212 34 $ Millions $ Millions Days Working Capital $2,500 $2,643 2010 Actual 2010 Target 2010 Actual 2010 Target 2010 Actual 2010 Target 2010 Actual 2010 Target 1 Procurement and other productivity 2 Total Capex includes investments in Ma’aden project 15

Alcoa Logo Procurement and Overhead – Sustainable Reductions 16 2009 2010 $ Millions $2,000 $ Millions $1,998 $1,500 2009 Target 2009 Actual 1 Procurement and other productivity Procurement 1 2010 Original Target 2010 Revised Target Overhead $2,500 $2,643 2010 Actual 2009 2010 $ Millions $400 $ Millions $412 $200 2009 Target 2009 Actual 2010 Original Target 2010 Revised Target $500 $509 2010 Actual

Alcoa Logo Maintaining Discipline in Capital Expenditures 17 Total Capex includes investments in Ma’aden project 2009 $ Millions 2009 Target 2009 Actual Total Capital Expenditures 2010 $ Millions $1,212 $1,250 2010 Target 2010 Actual $1,622 $1,800

Alcoa Logo 43 73 83 47 37 53 75 37 34 49 65 34 GPP GRP EPS Alcoa Sustainable Reductions in Days Working Capital 18 2008 2009 2010 2008 2009 2010 2008 2009 2010 2008 2009 2010 1 day better than 2010 target Yearly Improvement in Each Group Reduction in 13 Days Working Capital

Alcoa Logo Liquidity and Financial Positions Continue to Strengthen 19 Drove Cash Sustainability savings to the bottom line… …efficiently managed cash flows and capex… …strengthened the balance sheet Adjusted Income (Loss) ($ Millions) Free Cash Flow ($ Millions) Debt ($ Millions) & Debt-to-Capital % …improved liquidity… Cash on Hand ($ Millions) (221) (477) (256) 39 9 101 139 96 223 4Q'08 1Q'09 2Q'09 3Q'09 4Q'09 1Q'10 2Q'10 3Q'10 4Q'10 (409) (742) (90) (186) 761 (22) 87 176 1,005 4Q'08 1Q'09 2Q'09 3Q'09 4Q'09 1Q'10 2Q'10 3Q'10 4Q'10 762 1,131 851 1,066 1,481 1,292 1,344 843 1,543 4Q'08 1Q'09 2Q'09 3Q'09 4Q'09 1Q'10 2Q'10 3Q'10 4Q'10 10,578 10,205 10,265 10,073 9,819 9,757 9,800 9,309 9,165 42.5% 38.7% 34.8% 4Q'08 1Q'09 2Q'09 3Q'09 4Q'09 1Q'10 2Q'10 3Q'10 4Q'10 Gross Debt Debt to Cap

Klaus Kleinfeld Chairman and Chief Executive Officer 20 Alcoa Logo

Alcoa Logo Seizing Opportunity and Accelerating Value 21 2008: Extraordinary Times; Extraordinary Measures 2009: Turning Crisis into Opportunity 2010: Seizing Opportunity; Accelerating Value Strategic Growth Estreito Samara Bohai Upstream Mid- and Down-Stream Seven Promises Sao Luis and Juruti 2015 Refining Cost Curve Position 2015 Smelting Cost Curve Position

Alcoa Logo Sustainability Leadership Best Ever Safety Performance Alcoa Lives Its Values Every Day 22 Lost Workday Incident Rate 9 th Consecutive Year Safety Incident Rate History and Significant Accreditations in 2010 Ranked Third of 339 Companies Named to World & North American Indexes Alcoa Primary Aluminum, Can and bottle Sheet and Kawneer products Certified 82% of Alcoa locations had no LWD in 2010 Sustainable Company of the Year by Exame Magazine 0.29 0.31 0.19 0.19 0.13 0.13 0.11 0.15 0.14 0.15 0.12

Alcoa Logo Alcoa Continues To Exceed Its Aggressive Targets Procurement 1 Overhead $500 Total Capex 2 $1,250 Working Capital 35 2010 Cash Sustainability Operational Targets and Actual Performance $ Millions $509 $1,212 34 $ Millions $ Millions Days Working Capital $2,500 $2,643 2010 Actual 2010 Target 2010 Actual 2010 Target 2010 Actual 2010 Target 2010 Actual 2010 Target 1 Procurement and other productivity 2 Total Capex includes investments in Ma’aden project 23

Alcoa Logo Driving Bauxite and Refining To 1 st Quartile by 2015 24 Alumina Production Capacity: 18 mmt Source: CRU Adjusted EBITDA per Metric Ton – Sao Luis operating at full capacity – Record production in 2010 with unparalleled growth potential – Ma’aden, lowest cost refinery online in 2014 – Current capacity of 18 MMT – Move to index pricing continues The Alumina Leader 10 Yr Average ~ $70/MT LME Adjusted EBITDA/MT 72 62 44 48 68 75 110 104 81 20 47 1,549 1,447 1,350 1,433 1,719 1,900 2,570 2,641 2,572 1,664 2,173 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Alcoa Logo Aluminum Production Capacity: 4.5 mmt Driving Smelting Business To 2 nd Quartile by 2015 25 Source: CRU – Optimizing smelter portfolio; reducing costs – Leveraging casthouse system to capture higher value-added – Ma’aden, lowest cost smelter online in 2013 – Improving cost curve position – Repowered asset base – Restart of 200,000 tonnes of production Restructuring for Profitable Growth Adjusted EBITDA per Metric Ton 487 460 321 336 418 398 784 626 392 (159) 320 1,549 1,447 1,350 1,433 1,719 1,900 2,570 2,641 2,572 1,664 2,173 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 10 YR Average ~ $410/MT

Alcoa Logo Distribution 14% Automotive 7% B&C 6% Commercial Transport 5% Industrial /Other 14% Packaging 43% Aerospace 11% Rolled Products Positioned To Add $2.5b in Revenue by 2013 Flat Rolled Products financial and strategic overview Adjusted EBITDA & Adjusted EBITDA % Sales 26 573 541 495 479 531 620 536 498 254 224 551 Adjusted EBITDA $Millions Adjusted EBITDA % Sales 2010 3 rd Party Sales by Market 80% Utilization – Targeting $2.5b in revenue growth by 2013, growing 50% faster than market – Aerospace growth from robust build rates – Russia and China to capture growth in emerging markets – Innovation in automotive, consumer electronics and packaging – Ma’aden, lowest cost rolling mill online in 2013 Leveraging our strategic asset base 11% 11% 11% 10% 9% 9% 6% 5% 3% 4% 9% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Alcoa Logo Aerospace 47% IGT 11% B&C 19% Commercial Transport 13% Automotive 4% Other 6% Engineered Products Targeting $1.6b in Revenue by 2013 Engineered Products & Solutions financial and strategic overview Adjusted EBITDA & Adjusted EBITDA % Sales 27 368 436 287 356 495 536 676 783 922 630 762 Adjusted EBITDA $Millions Adjusted EBITDA % Sales 2010 3 rd Party Sales by Market 72% Utilization 65% Utilization Strong Platform for Profitable Growth – Targeting $1.6b in revenue growth by 2013 from market growth, new product introductions, and share gains – Selected acquisitions in target markets – Increased aluminum wheel penetration – Product innovations accelerate growth 11% 11% 8% 9% 12% 11% 12% 13% 15% 13% 17% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Alcoa Logo 28 Ma’aden and Alcoa Pour Concrete for the Middle East’s First Integrated Smelter and Rolling Mill First Concrete Pour and Financing Secured in Ma’aden Poured first concrete on October 24, 2010 Successful, heavily over-subscribed bank financing for smelter and rolling mill announced November 30, 2010 All major equipment has been ordered Smelter and rolling mill on-line in 2013 and bauxite mine and refinery in 2014

Alcoa Logo Market Conditions In 2011 Alcoa End Markets: Current Assessment of 2011 vs. 2010 Conditions Source: Alcoa analysis 29

Alcoa Logo 4% 15% 2011 Projected Primary Aluminum Consumption by Region (in mmt) 2011 Growth Maintains 2010 Momentum With 12% Increase Russia Brazil Asia w/o China North America Europe China 2010 vs. 2011 2011 Estimated Consumption 4% 6% 10% 21% 16% 15% *Other 24% 44.5 2010 Forecast 2011 Forecast 15% 30 6% 2010 Global Demand Growth Rate: 13% 2011 Global Demand Growth Rate 12% vs. 2010 (2011 ex China: 11%) 10% India 6% 15% 7% *Other consists of: Middle East, Latin America ex Brazil, and Rest of World including unallocated global increase 14% 19.0 6.9 5.6 5.45 3.6 1.9 1.1 1.0

Alcoa Logo Consumption Driving Inventory Decline and High Premiums 31 Regional Premiums Near All-Time Highs Global Inventories Falling $113 / MT $205 / MT $137 / MT Source: Alcoa estimates, LME, SHFE, IAI, Marubeni, Platt’s Metals Week and Metal Bulletin 0% 100% 200% 300% 400% 500% 600% 700% 800% 900% Midwest Japan Europe

Alcoa Logo Western World Annualized Production (Nov 2010) 25,225 Restarts and Expanded Capacity 1,260 Total Supply 26,485 Western World Consumption (25,540) (Deficit) Surplus 945 China Annualized Production (Nov 2010) 14,575 Restarted and Expanded Capacity 3,700 Total Supply 18,275 Consumption (18,975) (Deficit) Surplus (700) 2011 Primary Aluminum Balances 32 China Western World Production Demand Surplus Source: Alcoa estimates, Brook Hunt, CRU, CNIA, IAI Deficit Production Demand 2011E Aluminum Supply / Demand Balance (in kmt)

Alcoa Logo 2011 Global Alumina Balances 33 Source: Alcoa estimates, Brook Hunt, CRU, CNIA, IAI China Western World 2011 Annualized Production 32,600 Imports from Western World 4,000 Supply 36,600 Demand (36,600) (Deficit) / Surplus 0 2011 Annualized Production 56,400 Exports to China (4,000) Supply 52,400 Demand (52,400) (Deficit) / Surplus 0 Production Demand Balanced 2011E Alumina Supply / Demand Balance (in kmt)

Alcoa Logo Copper Up Pressure to Replace Aluminum Wins 34 Copper Prices Moving Up Low Voltage Electrical wiring & cable Transportation Cladding Other Sources: Bank of America / Merrill Lynch, International Copper Study Group and Alcoa Analysis Potential 20% substitution 3.8 mmt per year 320% 19 mmt Refined Cu Aluminum Is The Natural Substitute •Heat sinks for electronics, PCB’s •Building façades •Bussed electrical center components •Wire harnesses •High Voltage Cables •Utility buss bars •Low voltage installations in cities, industrial or commercial buildings •Battery cables Aluminum Replacement Examples High Voltage $2,321 $9,740 12/31/03 12/31/10

Alcoa Logo Aluminum’s Advantages Recognized In Consumer Electronics 35 Samsung 9 Series Notebook (anodized / brushed cover) Samsung 8000 Series LED TV (coated / brushed bezel) Advantages of Aluminum Aluminum-Intensive Devices CES 2011 Nokia N Series Smartphone (color anodized case) Panasonic Viera TV (brushed bezel)

Alcoa Logo Accelerating Shareholder Value in 2011 and Beyond 36 Upstream 2015 Cost Curve Changes Refining Cost Curve Position Smelting Cost Curve Position Midstream 2013 Revenue Targets Downstream 2013 Revenue Targets 2011 Financial Targets Sustaining Capex $1.0b Growth Capex $0.5b Debt-to-cap Ratio 30 to 35% Positive Free Cash Flow Ma’aden Investment $0.4b

Alcoa Logo Continued Acceleration of Shareholder Value in 2011 Market Environment All global end- markets showing improvement from 2010 Aluminum supply / demand surplus continues to shrink from 2010 Currency and energy cost headwinds persist Alcoa Actions Upstream assets focusing on restructuring and long-term cost curve improvement and better prices Midstream continuing with improved margins and growth Downstream assets building on improved margins and growth Maintaining fiscal discipline Leveraging strategic growth investments 37 Aggressive Targets

Alcoa Logo Roy Harvey Director, Investor Relations 390 Park Avenue New York, NY 10022-4608 Telephone: (212) 836-2674 www.alcoa.com Additional Information 38 Alcoa Logo

Alcoa Logo

Alcoa Logo Annual Sensitivity Summary 40 Currency Annual Net Income Sensitivity +/- 10% versus USD Australian $ +/- $75 million Brazilian $ +/- $50 million Euro € +/- $40 million Canadian $ +/- $35 million +/- $100/MT = +/- $200 million LME Aluminum Annual Net Income Sensitivity

Alcoa Logo Effective Tax Rate 41 Effective tax rate, excluding discrete tax items is a non-GAAP financial measure. Management believes that the Effective tax rate, excluding discrete tax items is meaningful to investors because it provides a view of Alcoa’s operational tax rate. $ Millions 1Q’10 2Q’10 3Q’10 4Q’10 YTD’10 (Loss) income from continuing operations before income taxes ($88) $228 $60 $348 $548 Provision for income taxes $84 $57 ($49) $56 $148 Effective tax rate as reported (95.5%) 25.0% (81.7%) 16.1% 27.0% Discrete tax provisions: Medicare Part-D $79 - - - $79 Transaction-related and other items $33 ($16) ($38) ($18) ($39) Discrete tax items attributable to Noncontrolling Interest - - ($30) ($2) ($32) Subtotal - Discrete tax (benefits) provisions $112 ($16) ($68) ($20) $8 (Benefit) Provision for income taxes excluding discrete tax (benefits) provisions ($28) $73 $19 $76 $140 Effective tax rate excluding discrete tax (benefits) provisions 31.8% 32.0% 31.7% 21.8% 25.5%

Alcoa Logo Reconciliation of ATOI to Consolidated Net (Loss) Income Attributable to Alcoa 42 (in millions) 4Q09 2009 1Q10 2Q10 3Q10 4Q10 2010 Total segment ATOI $ (101) $ (234) $ 306 $ 381 $ 328 $ 409 $ 1,424 Unallocated amounts (net of tax): Impact of LIFO 87 235 (14) (3) (2) 3 (16) Interest income 4 12 3 3 3 3 12 Interest expense (79) (306) (77) (77) (91) (76) (321) Noncontrolling interests (9) (61) (22) (34) (48) (34) (138) Corporate expense (92) (304) (67) (59) (71) (94) (291) Restructuring and other charges (50) (155) (122) (21) 1 8 (134) Discontinued operations (11) (166) (7) (1) – – (8) Other (26) (172) (201) (53) (59) 39 (274) Consolidated net (loss) income attributable to Alcoa $ (277) $ (1,151) $ (201) $ 136 $ 61 $ 258 $ 254

Alcoa Logo Reconciliation of Adjusted Income 43 (in millions) Quarter ended Year ended December 31, 2009 March 31, 2010 June 30, 2010 September 30, 2010 December 31, 2010 December 31, 2009 December 31, 2010 Net (loss) income attributable to Alcoa $ (277) $ (201) $ 136 $ 61 $ 258 $ (1,151) $ 254 Loss from discontinued operations (11) (7) (1) – – (166) (8) (Loss) income from continuing operations attributable to Alcoa (266) (194) 137 61 258 (985) 262 Restructuring and other charges 49 119 20 (1) (8) 152 130 Discrete tax items* (82) 112 (16) (38) (18) (110) 40 Special items** 308 64 (2) 74 (9) 258 127 Income (loss) from continuing operations attributable to Alcoa – as adjusted $ 9 $ 101 $ 139 $ 96 $ 223 $ (685) $ 559 Income (loss) from continuing operations attributable to Alcoa – as adjusted is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because management reviews the operating results of Alcoa excluding the impacts of restructuring and other charges, discrete tax items, and special items. There can be no assurances that additional restructuring and other charges, discrete tax items, and special items will not occur in future periods. To compensate for this limitation, management believes that it is appropriate to consider both Income (loss) from continuing operations attributable to Alcoa determined under GAAP as well as Income (loss) from continuing operations attributable to Alcoa – as adjusted. * Discrete tax items include the following: for the quarter ended December 31, 2010, a benefit for the reversal of the remaining valuation allowance related to net operating losses of an international subsidiary ($16) (a portion was initially reversed in the quarter ended September 30, 2010) and a net benefit for other small items ($2); for the quarter ended September 30, 2010, a benefit for the reversal of a valuation allowance related to net operating losses of an international subsidiary that are now realizable due to a settlement with a tax authority ($41); a charge for a tax rate change in Brazil ($11); and a benefit for the recovery of a portion of the unfavorable impact included in the quarter ended March 31, 2010 related to unbenefitted losses in Russia, China, and Italy ($8); for the quarter ended June 30, 2010, a benefit for a change in a Canadian provincial tax law permitting tax returns to be filed in U.S. dollars ($24), a charge based on settlement discussions of several matters with international taxing authorities ($18), and a benefit for the recovery of a portion of the unfavorable impact included in the quarter ended March 31, 2010 related to unbenefitted losses in Russia, China, and Italy ($10); for the quarter ended March 31, 2010, charges for a change in the tax treatment of federal subsidies received related to prescription drug benefits provided under certain retiree health benefit plans ($79), unbenefitted losses in Russia, China, and Italy ($22), interest due to the IRS related to a previously deferred gain associated with the 2007 formation of the former soft alloy extrusions joint venture ($6), and a change in the anticipated sale structure of the Transportation Products Europe business ($5); for the quarter ended December 31, 2009, a benefit for the reorganization of an equity investment in Canada ($71), a charge for the write-off of deferred tax assets related to operations in Italy ($41), a benefit for a tax rate change in Iceland ($31), and a benefit for the reversal of a valuation allowance on net operating losses in Norway ($21); and, for the year ended December 31, 2009, the previously mentioned items for the quarter ended December 31, 2009 ($82) and a benefit for a change in a Canadian national tax law permitting tax returns to be filed in U.S. dollars ($28). ** Special items include the following: for the quarter ended December 31, 2010, unfavorable mark-to-market changes in derivative contracts; for the quarter ended September 30, 2010, unfavorable mark-to-market changes in derivative contracts ($29), recovery costs associated with the São Luís, Brazil facility due to a power outage and failure of a ship unloader in the first half of 2010 ($23), restart costs and lost volumes related to a June 2010 flood at the Avilés smelter in Spain ($13), and a net charge for the early repayment of Notes set to mature in 2011 through 2013 due to the premiums paid under the tender offers and call option (partially offset by gains from the termination of related in-the-money interest rate swaps) ($9); for the quarter ended June 30, 2010, favorable mark-to-market changes in derivative contracts ($22), a charge for costs associated with the potential strike and successful execution of a new agreement with the USW ($13), and a charge related to an unfavorable decision in Alcoa’s lawsuit against Luminant related to the Rockdale, TX facility ($7); for the quarter ended March 31, 2010, charges related to unfavorable mark-to-market changes in derivative contracts ($31), power outages at the Rockdale, TX and São Luís, Brazil facilities ($17), an additional environmental accrual for the Grasse River remediation in Massena, NY ($11), and the write off of inventory related to the permanent closures of certain U.S. facilities ($5); for the quarter ended December 31, 2009, charges related to a recent European Commission’s ruling on electricity pricing for smelters in Italy ($250), a tax settlement related to an equity investment in Brazil ($24), an estimated loss on excess power at our Intalco smelter ($19), and an environmental accrual for smelters in Italy ($15); and, for the year ended December 31, 2009, the previously mentioned items for the quarter ended December 31, 2009 ($308), a gain on an acquisition in Suriname ($35), a gain on the Elkem/SAPA swap ($133), and a loss on the sale of Shining Prospect ($118).

Alcoa Logo Reconciliation of Adjusted Income, con’t 44 (in millions) Quarter ended December 31, 2008 March 31, 2009 June 30, 2009 September 30, 2009 Net (loss) income attributable to Alcoa $ (1,191) $ (497) $ (454) $ 77 (Loss) income from discontinued operations (262) (17) (142) 4 (Loss) income from continuing operations attributable to Alcoa (929) (480) (312) 73 Restructuring and other charges 614 46 56 1 Discrete tax items* 65 (28) – – Special items** 29 (15) – (35) (Loss) income from continuing operations attributable to Alcoa – as adjusted $ (221) $ (477) $ (256) $ 39 Income (loss) from continuing operations attributable to Alcoa – as adjusted is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because management reviews the operating results of Alcoa excluding the impacts of restructuring and other charges, discrete tax items, and special items. There can be no assurances that additional restructuring and other charges, discrete tax items, and special items will not occur in future periods. To compensate for this limitation, management believes that it is appropriate to consider both Income (loss) from continuing operations attributable to Alcoa determined under GAAP as well as Income (loss) from continuing operations attributable to Alcoa – as adjusted. * Discrete tax items include the following: for the quarter ended March 31, 2009, a benefit for a change in a Canadian national tax law permitting tax returns to be filed in U.S. dollars; and, for the quarter ended December 31, 2008, a charge for non-cash tax on repatriated earnings. ** Special items include the following: for the quarter ended September 30, 2009, a gain on an acquisition in Suriname; for the quarter ended March 31, 2009, a gain on the Elkem/SAPA swap ($133) and a loss on the sale of Shining Prospect ($118); and, for the quarter ended December 31, 2008, charges for environmental reserve ($26), obsolete inventory ($16), and accounts receivable reserve ($11), and a refund of an indemnification payment ($24).

Alcoa Logo Reconciliation of Free Cash Flow 45 (in millions) Quarter ended Year ended December 31, 2008 March 31, 2009 June 30, 2009 September 30, 2009 December 31, 2009 March 31, 2010 June 30, 2010 September 30, 2010 December 31, 2010 December 31, 2010 Cash provided from operations $ 608 $ (271) $ 328 $ 184 $ 1,124 $ 199 $ 300 $ 392 $ 1,370 $ 2,261 Capital expenditures (1,017) (471) (418) (370) (363) (221) (213) (216) (365) (1,015) Free cash flow $ (409) $ (742) $ (90) $ (186) $ 761 $ (22) $ 87 $ 176 $ 1,005 $ 1,246 Free Cash Flow is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because management reviews cash flows generated from operations after taking into consideration capital expenditures due to the fact that these expenditures are considered necessary to maintain and expand Alcoa’s asset base and are expected to generate future cash flows from operations. It is important to note that Free Cash Flow does not represent the residual cash flow available for discretionary expenditures since other non-discretionary expenditures, such as mandatory debt service requirements, are not deducted from the measure.

Alcoa Logo Days Working Capital 46 Days Working Capital ($ in millions) Working Capital Components Calculation Month ended Quarter ended October 31, 2010 November 30, 2010 December 31, 2010 December 31, 2010 Receivables from customers, less allowances $ 2,104 $ 2,111 $ 1,565 Less: Accounts receivable programs 1 200 226 – Receivables from customers, less allowances, as adjusted $ 1,904 $ 1,885 $ 1,565 $ 1,785 Add: Inventories 2,570 2,477 2,562 2,536 Less: Accounts payable, trade 2,186 2,185 2,322 2,231 Working Capital $ 2,288 $ 2,177 $ 1,805 $ 2,090 Sales $ 5,652 Days Working Capital 34.0 Days Working Capital = Working Capital (average of three month end amounts) divided by (Sales/number of days in the quarter) 1 During the fourth quarter of 2009, each of the monthly balances of Receivables from customers reflected the sale of $250 million under the Company's accounts receivable securitization program, which was terminated in the first quarter of 2010. In calculating the average Receivables from customers balance for the fourth quarter of 2010, the balances for October and November were reduced on a pro forma basis by the estimated impact of the accounts receivable programs implemented during the fourth quarter of 2010 to ensure all three months were comparable with the fourth quarter of 2009 for purposes of this calculation.

Alcoa Logo Reconciliation of Alcoa Adjusted EBITDA 47 ($ in millions) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 4Q10 2010 Net income (loss) attributable to Alcoa $ 1,484 $ 908 $ 420 $ 938 $ 1,310 $ 1,233 $ 2,248 $ 2,564 $ (74) $ (1,151) $ 258 $ 254 Add: Net income attributable to noncontrolling interests 306 205 181 212 233 259 436 365 221 61 34 138 Cumulative effect of accounting changes 5 – (34) 47 – 2 – – – – – – (Income) loss from discontinued operations (73) 5 101 – 27 50 (22) 250 303 166 – 8 Provision (benefit) for income taxes 859 524 307 367 546 464 853 1,623 342 (574) 56 148 Other (income) expenses, net (136) (295) (175) (278) (266) (478) (236) (1,920) (59) (161) (43) 5 Interest expense 427 371 350 314 271 339 384 401 407 470 118 494 Restructuring and other charges (1) 530 398 (28) (29) 266 507 268 939 237 (12) 207 Provision for depreciation, depletion, and amortization 1,123 1,144 1,037 1,110 1,142 1,227 1,252 1,244 1,234 1,311 371 1,450 Adjusted Earnings before interest, taxes, depreciation, and amortization (EBITDA) $ 3,994 $ 3,392 $ 2,585 $ 2,682 $ 3,234 $ 3,362 $ 5,422 $ 4,795 $ 3,313 $ 359 $ 782 $ 2,704 Sales $19,947 $19,906 $17,691 $18,879 $21,370 $24,149 $28,950 $29,280 $26,901 $18,439 $ 5,652 $21,013 Adjusted EBITDA Margin 20% 17% 15% 14% 15% 14% 19% 16% 12% 2% 14% 13% Alcoa’s definition of Adjusted EBITDA is net margin plus an add-back for depreciation, depletion, and amortization. Net margin is equivalent to Sales minus the following items: Cost of goods sold; Selling, general administrative, and other expenses; Research and development expenses; and Provision for depreciation, depletion, and amortization. Adjusted EBITDA is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because Adjusted EBITDA provides additional information with respect to Alcoa’s operating performance and the Company’s ability to meet its financial obligations. The Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies.

Alcoa Logo Reconciliation of Alumina Adjusted EBITDA 48 ($ in millions) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 3Q10 4Q10 2010 After-tax operating income (ATOI) $ 585 $ 471 $ 315 $ 415 $ 632 $ 682 $ 1,050 $ 956 $ 727 $ 112 $ 70 $ 65 $ 301 Add: Depreciation, depletion, and amortization 163 144 139 147 153 172 192 267 268 292 100 107 406 Equity (income) loss (3) (1) (1) – (1) – 2 (1) (7) (8) (1) (3) (10) Income taxes 279 184 130 161 240 246 428 340 277 (22) (22) 14 60 Other (12) (17) (14) (55) (46) (8) (6) 2 (26) (92) (1) (3) (5) Adjusted Earnings before interest, taxes, depreciation, and amortization (EBITDA) $ 1,012 $ 781 $ 569 $ 668 $ 978 $ 1,092 $ 1,666 $ 1,564 $ 1,239 $ 282 $ 146 $ 180 $ 752 Production (thousand metric tons) (kmt) 13,968 12,527 13,027 13,841 14,343 14,598 15,128 15,084 15,256 14,265 4,047 4,119 15,922 Adjusted EBITDA/Production ($ per metric ton) $ 72 $ 62 $ 44 $ 48 $ 68 $ 75 $ 110 $ 104 $ 81 $ 20 $ 36 $ 44 $ 47 Alcoa’s definition of Adjusted EBITDA is net margin plus an add-back for depreciation, depletion, and amortization. Net margin is equivalent to Sales minus the following items: Cost of goods sold; Selling, general administrative, and other expenses; Research and development expenses; and Provision for depreciation, depletion, and amortization. The Other line in the table above includes gains/losses on asset sales and other nonoperating items. Adjusted EBITDA is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because Adjusted EBITDA provides additional information with respect to Alcoa’s operating performance and the Company’s ability to meet its financial obligations. The Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies.

Alcoa Logo Reconciliation of Primary Metals Adjusted EBITDA 49 ($ in millions) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 3Q10 4Q10 2010 After-tax operating income (ATOI) $ 1,000 $ 905 $ 650 $ 657 $ 808 $ 822 $ 1,760 $ 1,445 $ 931 $ (612) $ 78 $ 178 $ 488 Add: Depreciation, depletion, and amortization 311 327 300 310 326 368 395 410 503 560 142 140 571 Equity (income) loss (50) (52) (44) (55) (58) 12 (82) (57) (2) 26 – – (1) Income taxes 505 434 266 256 314 307 726 542 172 (365) (3) 81 96 Other (41) (8) (47) 12 20 (96) (13) (27) (32) (176) (7) (1) (7) Adjusted Earnings before interest, taxes, depreciation, and amortization (EBITDA) $ 1,725 $ 1,606 $ 1,125 $ 1,180 $ 1,410 $ 1,413 $ 2,786 $ 2,313 $ 1,572 $ (567) $ 210 $ 398 $ 1,147 Production (thousand metric tons) (kmt) 3,539 3,488 3,500 3,508 3,376 3,554 3,552 3,693 4,007 3,564 891 913 3,586 Adjusted EBITDA/Production ($ per metric ton) $ 487 $ 460 $ 321 $ 336 $ 418 $ 398 $ 784 $ 626 $ 392 $ (159) $ 236 $ 436 $ 320 Alcoa’s definition of Adjusted EBITDA is net margin plus an add-back for depreciation, depletion, and amortization. Net margin is equivalent to Sales minus the following items: Cost of goods sold; Selling, general administrative, and other expenses; Research and development expenses; and Provision for depreciation, depletion, and amortization. The Other line in the table above includes gains/losses on asset sales and other nonoperating items. Adjusted EBITDA is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because Adjusted EBITDA provides additional information with respect to Alcoa’s operating performance and the Company’s ability to meet its financial obligations. The Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies.

Alcoa Logo Reconciliation of Flat-Rolled Products Adjusted EBITDA 50 ($ in millions) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 After-tax operating income (ATOI) $ 296 $ 253 $ 225 $ 222 $ 254 $ 278 $ 233 $ 178 $ (3) $ (49) $ 220 Add: Depreciation, depletion, and amortization 153 167 184 190 200 220 223 227 216 227 238 Equity (income) loss (3) 2 4 1 1 – 2 – – – – Income taxes 126 124 90 71 75 121 58 92 35 48 92 Other 1 (5) (8) (5) 1 1 20 1 6 (2) 1 Adjusted Earnings before interest, taxes, depreciation, and amortization (EBITDA) $ 573 $ 541 $ 495 $ 479 $ 531 $ 620 $ 536 $ 498 $ 254 $ 224 $ 551 Total sales $ 5,167 $ 4,868 $ 4,571 $ 4,768 $ 6,042 $ 7,081 $ 8,610 $ 9,597 $ 9,184 $ 6,182 $ 6,457 Adjusted EBITDA Margin 11% 11% 11% 10% 9% 9% 6% 5% 3% 4% 9% Alcoa’s definition of Adjusted EBITDA is net margin plus an add-back for depreciation, depletion, and amortization. Net margin is equivalent to Sales minus the following items: Cost of goods sold; Selling, general administrative, and other expenses; Research and development expenses; and Provision for depreciation, depletion, and amortization. The Other line in the table above includes gains/losses on asset sales and other nonoperating items. Adjusted EBITDA is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because Adjusted EBITDA provides additional information with respect to Alcoa’s operating performance and the Company’s ability to meet its financial obligations. The Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies.

Alcoa Logo Reconciliation of Engineered Products and Solutions Adjusted EBITDA 51 ($ in millions) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 4Q09 3Q10 4Q10 2010 After-tax operating income (ATOI) $ 125 $ 189 $ 63 $ 124 $ 156 $ 271 $ 365 $ 435 $ 533 $ 315 $ 57 $ 114 $ 113 $ 415 Add: Depreciation, depletion, and amortization 165 186 150 166 168 160 152 163 165 177 50 37 38 154 Equity (income) loss (1) – – – – – 6 – – (2) (1) (1) – (2) Income taxes 79 61 39 55 65 116 155 192 222 139 20 63 53 195 Other – – 35 11 106 (11) (2) (7) 2 1 – 1 (1) – Adjusted Earnings before interest, taxes, depreciation, and amortization (EBITDA) $ 368 $ 436 $ 287 $ 356 $ 495 $ 536 $ 676 $ 783 $ 922 $ 630 $ 126 $ 214 $ 203 $ 762 Total sales $ 3,386 $ 4,141 $ 3,492 $ 3,905 $ 4,283 $ 4,773 $ 5,428 $ 5,834 $ 6,199 $ 4,689 $ 1,097 $ 1,173 $ 1,215 $ 4,584 Adjusted EBITDA Margin 11% 11% 8% 9% 12% 11% 12% 13% 15% 13% 11% 18% 17% 17% Alcoa’s definition of Adjusted EBITDA is net margin plus an add-back for depreciation, depletion, and amortization. Net margin is equivalent to Sales minus the following items: Cost of goods sold; Selling, general administrative, and other expenses; Research and development expenses; and Provision for depreciation, depletion, and amortization. The Other line in the table above includes gains/losses on asset sales and other nonoperating items. Adjusted EBITDA is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because Adjusted EBITDA provides additional information with respect to Alcoa’s operating performance and the Company’s ability to meet its financial obligations. The Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies.