2. Forward Looking Statements
Today’s discussion may include “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of 1995.
Such statements relate to future events and expectations and
involve known and unknown risks and uncertainties. Alcoa’s actual
results or actions may differ 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
4. 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
5. 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
6. 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
8. 4Q vs. 3Q 2008 Earnings Bridge
Income From Continuing Operations Excluding Restructuring & Other Special Items
$700
$191 $88
$600
$164
$500
$69
$400
$331 $339 $560
$300
$200
$100
$0
3Q08 Energy Currency Price/Mix Volume LME 4Q08
($100)
($200)
($221)
($300)
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
8
9. Alumina
4th Quarter Highlights 4th Quarter Business Conditions
− 16% lower realized pricing
4Q 07 3Q 08 4Q 08
− Point Comfort curtailment led to lower
Production (kmt) 3,855 3,790 3,776
production
3rd Party Shipments (kmt) 2,030 2,010 2,123
− Sequential benefit of $33 million from Western
3rd Party Revenue ($ million) 688 805 722
Australia gas disruption recovery
ATOI ($ million) 205 206 162
− Stronger US dollar benefit of $64 million
through lower cost base
− Lower energy costs realized
$300 $1,800
$1,500
$250
$1,200
1st Quarter Outlook
Total Revenue (million)
$200
ATOI (million)
$900
− Prices to follow approximate two-month lag
$150
$600
− Anticipate 5% lower production due to
curtailments
$100
$300
− Current US dollar slightly weaker than 4Q
$50 $0
average
1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q08 4Q08
− Lower fuel oil costs
ATOI Total Revenue
9
10. Refining Cost Overview
Input Cost Inventory flow Pricing convention
Composition of Refining Production Costs
Fuel oil 1 – 2 months Prior month
Fuel Oil
Natural gas 1 – 2 months Rolling 16 quarters
14%
Conversion
Natural gas
36%
Caustic soda 3 - 6 months Spot & semi-
15%
annual
Bauxite 2 - 3 months 6 - 9 month lag
Caustic
10%
Bauxite
25%
10
11. Primary Metals
4th Quarter Highlights 4th Quarter Business Conditions
4Q 07 3Q 08 4Q 08
− Realized pricing down 28% sequentially
Production (kmt) 959 1,011 971
− LME-linked costs declining but on lagged
basis
3rd Party Shipments (kmt) 624 704 807
− Stronger US dollar benefit of $94 million
3rd Party Revenue ($
1,597 2,127 1,580
million)
through lower cost base
3rd Party Price ($/mt) 2,646 2,945 2,125
− Sequential negative $21 million impact of
Rockdale curtailment
ATOI ($ million) 196 297 (101)
− Favorable sequential energy of $23 million
$550
$3,850
$450
1st Quarter Outlook
$3,350
$350
− Realized pricing trending closer to spot
$250
Total Revenue (million)
ATOI (million)
$2,850
− Anticipate 8% lower production due to
$150
curtailments
$2,350
$50
− LME linked costs to continue decline
1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q08 4Q08
-$50
− Current US dollar slightly weaker than 4Q
$1,850
-$150
average
-$250 $1,350
− Cost savings from procurement actions on
ATOI Total Revenue
carbon products start to hit bottom line
11
12. Smelting Cost Overview
Composition of Smelting Production Costs
Input Cost Inventory flow Pricing convention
Conversion
22% Alumina
Alumina 1 – 2 months 2 – 3 month lags
36%
Materials
Power 1 – 2 months 40% LME linked –
3%
3 month lag
Carbon 1 - 2 months Spot & semi-annual
Materials 1 - 2 months 1 – 3 month lag
Power Carbon
26% 13%
Several significant input costs lag average primary metal revenue by up to 3 months
12
13. Flat-Rolled Products
4th Quarter Business Conditions
ATOI ($ million)
− Sharp decline in demand as economic
4Q 07 3Q 08 4Q 08
environment worsened
Global Rolled Products,
− 11% lower shipments on top of a seasonally
44 60 (9)
excl Russia & China
weak 3Q
− Non can sheet shipments down 20%
Hard Alloy Extrusions 8 7 8
− Boeing strike impact of $10 million
Russia, China & Other (67) (38) (97)
− Bohai start-up costs of $9 million
(98)
Total (15) 29
− Divestiture related inventory obsolescence
$12 million
$120 $2,800
1st Quarter Outlook
$80 $2,600
$40 $2,400
illion)
Third Party Revenue (m
− Continued weakness in end markets
I illion)
ATO (m
$0 $2,200
1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q08 4Q08
− Input costs expected to decline
($40) $2,000
($80) $1,800
($120) $1,600
ATOI Third Party Revenue
13
14. Downturn Evident in Flat-Rolled Products
Global Rolling Demand Collapse
Global Rolling Order Rates 2008 & 2007
Demand 2007 vs. 2008
Demand 2007 vs. 2008
2007
2008
• 2008 demand well below 2007
• No sign of seasonal up-lift
• Dramatic deterioration in 4Q
orders over the last 3 weeks
lity
sona
l Sea
a
Norm
Apr May Jun Jul Aug Sep Oct Nov Dec
14
16. Engineered Products and Solutions
4th Quarter Highlights 4th Quarter Business Conditions
− Market declines adversely affected all
4Q 07 3Q 08 4Q 08
businesses
Third Party Revenue 1,311 1,451 1,258
− Boeing strike ($5 million effect) & seasonal
impacts resulted in lower aerospace demand
ATOI 77 133 65
ATOI% / Revenue 5.9 9.2 5.2
$180 $2,200
1st Quarter Outlook
$160
$2,000
$140
$1,800
− Further weakness expected in commercial
$120
Third Party Revenue (million)
$1,600
ATOI (million)
$100
transportation and commercial construction markets
$80
− Revenue from automotive market reduced to 5% of
$1,400
$60
total segment as a result of portfolio moves
$1,200
$40
− Productivity initiatives expected to gain momentum
$1,000
$20
$0 $800
1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q08 4Q08
ATOI Third Party Revenue
16
17. Record earnings despite market headwinds
Engineered Products & Solutions Financial Metrics
ATOI (in millions)
Sales (in billions) Return on Capital
16%
7% 23% $503
$5.6
$5.3
$409
2007 2008 2007 2008 2007 2008
Strong market positions Productivity improvements Cost efficient capacity
in aerospace, IGT, B&C continue to accelerate and expansions in fasteners
and fastener acquisition yield bottom line benefits and investment castings
offset unprecedented along with working capital
decline in North American efficiencies
& European truck and
automotive markets
17
18. 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
19. Capital Expenditures
Capital Expenditure History 2009 Capital Expenditures Forecast
$4,000 150% $1,500
Values $ Millions Values $ Millions
71%
$3,500
$3,000 100% $1,000
876
$2,500
29%
$2,000 50%
$500
187
$1,500
393 328
$1,000 0%
$0
FY06 FY07 FY08 FY09
2009 First Half 2009 Second Half
Total Capital Expenditures
Non‐Growth Growth
Non‐Growth Capex as % of Depreciation
19
20. Liquidity Remains Strong
Added revolver amid financial market crisis Good performance in difficult CP markets
5.2
Values $ Billions % of Period Issuance with Maturity One Week or Greater
96%
87%
3.3
3.3
3.3
59%
43%
34%
33%
1.5
1.5 1.2 1.2
October November December
1Q 08 2Q 08 3Q 08 4Q 08
Alcoa Tier II Issuers
Commercial Paper Additional Revolver Availability
Source: The Federal Reserve Board 20
23. Accomplishments: Clear strategy, speed & execution
2008 Accomplishments
Three Strategic Priorities
Secured long-term power contracts for
nearly half of smelting system
Profitable Growth Alcoa Advantage
Completed successful start-up of
in every business creating value for
Fjardaal, first greenfield smelter in two
all businesses
decades
– Talent
Record earnings in Engineered
Business Programs that
– Technology
define:
Products & Solutions
– Customer Intimacy
– 3-year aspirations
– Purchasing
– Priority levers
Completed Packaging divestiture
– Operating System
– Accountability
Fast response to early signals, e.g.:
Disciplined Execution across all activities
Reached agreement for soft alloy
extrusion swap
Increased debt capacity and
improved debt structure
Named to Dow Jones Sustainability
Index for 7th straight year
23
24. Historic collapse in metal price – (56%) over 5 months
LME cash price/ton, in US$ and global inventory1, in days
50
$3,500
45
40
Days of Consumption
$3,000
35
LME Price/mt
30
$2,500
25
- 56%
20 $2,000
15
10 $1,500
5
$1,000
0
12/08
01/05
04/05
07/05
10/05
01/06
04/06
07/06
10/06
01/07
04/07
07/07
10/07
01/08
04/08
07/08
10/08
1 Reported Stocks : Comex, IAI, Japan Port , LME, & SME Reported Stocks,
LME Cash Price
Days of Consumption
Source: IAI and Bloomberg 24
25. Expect global demand decline of 2% in 2009
Primary Aluminum Consumption Growth Rates, 2009, in million mt
Brazil 0.9 1% 5%
-2%
1.0 3%
CIS
-4%
4.9 -2%
Asia w/o China
5.3 -12% -10%
North America
Global Demand Growth Rates:
2008: -3%
Europe
7.0 -9% -7%
2009: -2%
3% 9%
13.1
China
2009 Projected 2008 vs. 2009
Consumption Projected Growth Rates
2008 Actual 2009 Forecast
Source: Alcoa analysis Note: 2009 Projected Global Consumption: 36.2 million mt 25
26. Curtailment announcements – 13% of global output
Global Smelting Curtailment Announcements1
By Month By Region
Region Aug 08 Announced Percentage
Production1 Curtailment1 Curtailed
679 5,020
920
China 14,000 (3,000) 21%
840 North America 5,700 (840) 15%
Eastern 4,650 (574) 12%
1,139
Europe/Russia
1,442 Western Europe 4,600 (230) 5%
Asia/Middle East 3,950 (80) 2%
800
Latin America 2,700 (93) 3%
completed
Oceania 2,300 (102) 4%
Sep Oct Nov Dec Jan Total
2008 2008 2008 2008 2009 Africa 1,700 (100) 6%
& Prev
Total 39,600 (5,020) 13%
13% of total
global output
1 Annualized kmt
26
27. 2009 – Aluminum Surplus or Deficit?
Aluminum Supply / Demand Balance (in kmt)
2008 Consumption 37,000
2008 Production 38,800
Lower 2009 consumption (800)
Estimated 2009 600
(2%)
incremental production
Stimulus effects ??
Announced curtailments (3,500)
Total 2009 Consumption ??
Total 2009 Production 35,900
Supply Demand
Source: Alcoa analysis, CRU, IAI 27
28. Managing downturn along the three strategic priorities
Three Strategic Priorities and Downturn Management
Accelerated R&D
Profitable Growth Alcoa Advantage
portfolio technology
in every business creating value for
moves (in & refocus
all businesses
out)
Share growth
– Talent
Curtailments Business Programs that
– Technology
define:
Procurement
– Customer Intimacy
– 3-year aspirations
Plant shut – Purchasing savings
– Priority levers
MENT
downs – Operating System
– Accountability
Corporate
DOW
Headcount overhead
Disciplined Execution across all activities
reduction reduction
Additional Increased
flexibility debt capacity
Speedy execution
Focus on cash and bottom line
Capital spend reduction
N
TURN MANAG
E
28
29. Getting ahead of the curve
Alcoa Downturn Actions: Timeline
2008/09 Alcoa Downturn Actions
Nov 10 Dec 22
Sep 17 Sep 30 Oct 6 Oct 7 Oct 23 Jan 6, 2009
Jul 11
Curtailed Agreement
Suspended Curtailed Announced Reduced Announced
Downsized Power & additional with Orkla to
150,000 mt halting of production wide-ranging
Electrical share Propulsion 350,000 mt swap soft
all at Point actions to
and at Rockdale announced aluminum alloy
repurchases non-critical Comfort address
Electronic smelter headcount production extrusion
capital refinery economic
Solutions reductions over global share
spend by 25% downturn
Honduran & in response smelting for Elkem
(550,000 mt)
Mexican to market system smelter
operations conditions share
29
30. Restructuring actions incorporate all improvement levers
Restructuring Announcement: Levers and Actions
Restructuring Announcement – January 6, 2009
Cost &
Portfolio Production
Procurement Liquidity Initiatives
Streamlining Curtailments
Efficiencies
Swap of Sapa stake Initiate smelting Workforce reduction Suspend share
for Elkem smelters curtailments 13,500 repurchases
totaling 750 kmt headcount
Divest four mid & 1,700 Limit capital
downstream Adjust refining contractors spending
businesses capacity downward Comply with law
Electrical & by 1.5 million mt Global salary & Fulfill customer
Electronic per year hiring freeze requirements
Solutions Complete
Global Foil Procurement Brazilian growth
Cast Auto actions on key
Wheels inputs Secured additional
Transportation credit facility
Products Europe Continued success
on repowering
smelting assets
1.9 million mt
Extensions as
long as 2043
30
31. Gaining upstream strength through cash-free swap
Portfolio Streamlining: Sapa / Elkem Swap
Equity Swap
Sapa JV Elkem Aluminium
Sapa JV Elkem Aluminium
Alcoa Orkla Alcoa Orkla
Current Current
45.45% 54.55% 50% 50%
Ownership Ownership
(operator) (operator)
Sapa JV Elkem Aluminium
Soft Alloy Extrusions Norway Smelters
46 plants Lista and Mosjoen smelters (282 kmt)
North America and Europe 18% of new Mosjoen anode plant (Alcoa
owns the remaining 82%)
Major customer segments:
LME-linked power (mostly hydro) to 2019
– Building and construction
– Industrial Both smelters are middle of cost curve
– Commercial transportation
BENEFITS
Complete planned exit of soft alloy extrusions in difficult market
Building out leading upstream position through adding quality assets (e.g., hydro-based)
31
32. Smelting curtailments taken to maximize cash position
Smelting Production Curtailments: Tiered Approach
Smelting Curtailment Steps Guiding Principle
Full curtailment of Maximize cash position
selected plant(s)
for ramp down and ramp
up, considering:
Targeted smaller
curtailments at
•Operational flexibility
several locations
based upon cost
& strategic
Utilize material in
•Power flexibility
situation
inventory to reline,
but do not restart
pots
Reduce amperage
and eliminate end •Repowering impact
pots
•Community impact
Intalco* Rockdale*
7 plants* 10 plants*
18% (750 kmt)
Baie Comeau* Tennessee**
Pocos **
reduction
by end 1Q 09
* Completed
** In process
32
33. Increase labor and materials productivity
Cost & Procurement Efficiencies: Initiatives
Labor Initiatives Procurement Initiatives
•Supply chain management
Headcount reductions Utilizing Alcoa’s global presence
and logistics expertise, demonstrate
Alumina & Primary 2,300 ability to employ non-traditional
sourcing from numerous
Flat Rolled Products 2,900
geographies – e.g., coke & caustic
Engineered Products 8,100
& Solutions
•Change of specifications, e.g.,
Corporate 200
• Coke
Total 13,500
• Cathodes
• Backward integration
• Reduce 1,700 contractor positions
• Agreements reached covering
• Fluoride
• Global salary and hiring freeze
• Caustic
• Coke
20% reduction
vs late 2008
market levels
33
35. Reaping substantial benefits
Restructuring Announcement: Benefits of Actions
Restructuring Announcement – January 6, 2009
Cost &
Portfolio Production
Procurement Liquidity Initiatives
Streamlining Curtailments
Efficiencies
Benefits of Actions
Benefits of Actions
•• 25% lower cost per ton in refining & smelting (1Q 09 vs 3Q 08), e.g.,
25% lower cost per ton in refining & smelting (1Q 09 vs 3Q 08), e.g.,
•• $1.3 billion annualized from procurement & energy
$1.3 billion annualized from procurement & energy
•• Headcount reductions
Headcount reductions
•• Improved overall cost position from curtailments
Improved overall cost position from curtailments
•• $450 million before tax annualized benefit comprised of:
$450 million before tax annualized benefit comprised of:
•• $150 million from divested businesses
$150 million from divested businesses
•• $200 million from mid/downstream & corporate headcount reductions
$200 million from mid/downstream & corporate headcount reductions
•• $100 million from upstream headcount reductions
$100 million from upstream headcount reductions
•• Cash-free swap of soft alloy extrusion
Cash-free swap of soft alloy extrusion
•• Expected $100 million proceeds from divestiture of four businesses
Expected $100 million proceeds from divestiture of four businesses
•• Increase of nearly 60% in short-term debt capacity
Increase of nearly 60% in short-term debt capacity
•• Cash preservation through 50% lower capital spending
Cash preservation through 50% lower capital spending
35
36. Aluminum prospects remain bright
Aluminum Outlook
Aluminum Benefits Mega Trends Aluminum Demand (million mt) 1
Demographics 70
ME / Africa
Global population
Europe /
Light
• 2006: 6.6 billion 6% CAGR
6% CAGR
Weight
• 2025: 7.9 billion
Relative
Price • 2050: 9.1 billion
High
Americas
Strength
Urbanization
37
Recyclable Population living in cities
• 2006: > 50%
Durable
• 2030: > 60%
Asia
Malleable
Environment
Highly
• Total energy consumption to
Conductive
Non-
increase by 54% until 2025 –
Corrosive
>60% from developing
countries
• Person Transport rates +40%
by 2030
2008 2018
1 Source: Alcoa analysis 36
37. Alcoa is well-positioned for the future
Alcoa’s Competitive & Power Position
World class refining system World leading businesses
Bauxite Mining #1
Refining Cost Position
Refining #1
Smelting Capacity #1
Worst
… End & Tab Can Sheet #1
…
… Can Body Stock #2
…
… Aerospace Sheet & Plate #1
Alcoa 30th
Alcoa 25th Hard Alloy Extrusions – Advanced #1
…
Best
General Engineering Plate #1
Current Post Juruti/Sao Luis
Aerospace Fastener Systems #1
Outstanding power position
Aerospace Airfoils #1
Repowering efforts 2009 - 2012
IGT Airfoils #1
% of Equity Capacity
Aluminum Structural Forgings #1
Contracted power
Aluminum Truck Wheels #1
and MOUs
Commercial Building Systems (NA) #1
Self-generated power
Above businesses account for 90% of
Alcoa’s overall revenue
37
38. For Additional Information, Contact:
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
38
41. Reconciliation of Return on Capital
Bloomberg Return on Capital,
Bloomberg Return on Capital (1) 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
Short-term borrowings $ 521 Short-term borrowings $ 521
Short-term debt 129 Short-term debt 129
Commercial paper 1,196 Commercial paper 1,196
Long-term debt 7,440 Long-term debt 7,440
Preferred stock 55 Preferred stock 55
Minority interests 2,529 Minority interests 2,529
Common equity (2) 13,821 Common equity (3) 13,821
Denominator $ 25,691 Denominator 25,691
Restructuring charges (3) (436)
Capital projects in progress
and capital base of growth
investments (4) (5,117)
Adjusted denominator $ 20,138
Return on capital,
excluding growth
investments and
Return on capital restructuring charges
1.5% 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.
41
42. Reconciliation of Adjusted Income
(in millions) Quarter ended
September 30, December 31,
2008* 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).
42
43. Reconciliation of ATOI to Consolidated Net Income
(in millions) 4Q07 2007 1Q08 2Q08 3Q08 4Q08 2008
Total segment ATOI $ 519 $ 3,162 $ 668 $ 838 $ 665 $ 28 $ 2,199
Unallocated amounts (net of tax):
Impact of LIFO 9 (24) (31) (44) (5) 73 (7)
Interest income 10 40 9 12 10 4 35
Interest expense (53) (261) (64) (57) (63) (81) (265)
Minority interests (64) (365) (67) (70) (84) (1) (222)
Corporate expense (100) (388) (82) (91) (77) (78) (328)
Restructuring and other charges 8 (201) (30) (1) (25) (637) (693)
Discontinued operations (6) (250) 4 (7) (38) (262) (303)
Other 309 851 (104) (34) (115) (237) (490)
Consolidated net income $ 632 $ 2,564 $ 303 $ 546 $ 268 $(1,191) $ (74)
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.
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