3. Directors: nominees to serve until 2011
Joseph T. Gorman Ratan N. Tata
Klaus Kleinfeld James W. Owens
Chairman and CEO, Chairman,
President and Chairman and CEO,
Moxahela Enterprises, LLC Tata Sons Limited
COO, Alcoa Caterpillar Inc.
Director since 1991 Director since 2007
Director since 2003 Director since 2005
4. Directors
Kathryn S. Fuller Carlos Ghosn Judith M. Gueron
Chair, The Ford Foundation President and CEO, Scholar in Residence at MDRC
Director since 2002 Nissan Motor Co. and Director since 1988
Renault S.A.
Director since 2002
Michael G. Morris E. Stanley O'Neal
Chairman, President and CEO, Former Chairman
American Electric and CEO,
Power Company, Inc. Merrill Lynch & Co., Inc.
Director since 2008 Director since 2008
5. Directors
Henry B. Schacht Franklin A. Thomas Ernesto Zedillo Alain J.P. Belda
Managing Director Consultant, The Study Director, Yale Center Chairman and CEO,
and Senior Advisor, Group; and Advisor, for the Study of Alcoa Inc.
Warburg Pincus LLC the UN Fund for Globalization Director since 1998
Director since 1994 International Partnerships Director since 2002
Director since 1977
6. Executive Council
Alain Belda Chairman & Chief Executive Officer
William Christopher EVP and Group President,
Engineered Products & Solutions
Regina Hitchery VP, Human Resources
Barbara Jeremiah EVP, Chairman’s Counsel
Klaus Kleinfeld President and Chief Operating
Officer, Director
Charles McLane EVP and Chief Financial Officer
Lawrence Purtell EVP, Chairman’s Counsel
7. Executive Council, cont.
Bernt Reitan EVP and Group President, Global
Primary Products
Mike Schell EVP, Business Development and Law
Jake Siewert VP, EHS, Global Communications
and Public Strategy
Helmut Wieser EVP and Group President, Global
Rolled Products and Hard Alloy
Extrusions and Asia
Mohammad Zaidi EVP, Market Strategy, Technology
and Quality
8. 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 Form 10-Q for the quarter ended
March 31, 2008 filed with the Securities and Exchange Commission.
11. 2007 Financial Performance
• Record income from continuing
operations of $2.6b or $2.95 per share
• Record revenues of $30.7b
• Record cash from operations of $3.1b
• Debt to cap of 30.2%
• Trailing twelve months ROC of 16.1%
excluding impact of growth projects
• Dividend increase of 13%
12. 1st Quarter 2008 Financial
Overview
• Income from continuing operations of $303m or $0.37
per share - $361m or $0.44 per share excluding the
impact of restructurings
• Revenues of $7.4b
• Currency impact of $68m or $0.08 per share
sequentially, including $48m, or $0.06 per share non-
cash translation
• Segment ATOI increased 42% excluding Packaging
• Debt-to-cap at 31.5%
• Trailing four quarters ROC of 10.7%; 13.5% excluding
growth
13. Share Repurchase Program
Timeline Overview
Based on 868M Shares Outstanding
– 10% repurchase program
As of January 19, 2007
authorized January 2007
9.4% repurchased as of 3.31.08
82M
– Expanded 25% repurchase
program authorized 15.6% additional
authorized
October 2007 135M
– ~68M shares, or 7.8%,
repurchased in 2007
– ~14M shares, or 1.6%,
repurchased in Q1 2008
653M
16. Alcoa: A History of Growth
& Innovation
We reshaped
We innovated
We invented the industry
markets
the industry
1888 1900 1950 2008
17. Historical Perspective
Alcoa has grown from a $753 Million US- $30.7
based Company to a $30.7 Billion Global
Enterprise since 1958
Revenue in billions
$0.753
1958 1965 1972 1979 1986 1993 2000 2007
18. Historical Perspective
$30.7
Growth over the last 20 Years
has also been strong
Revenues in 1987 – $7.8 billion
Revenue in billions
$7.8
87
89
91
93
95
97
99
01
03
05
07
19
19
19
19
19
19
19
20
20
20
20
19. Last 5 Years
2007 Revenues + 50% vs. 2003
$30.7B
$30.4B
$25.6B
$22.6B
$20.3B
2003 2004 2005 2006 2007
21. Historical Perspective
World Aluminum Consumption
67
(million metric tons)
East Eur/
6% CAGR 7.3 Mid East/
6% CAGR Africa Europe/ME/
Africa
W.Europe
10.6
6% CAGR
6% CAGR 2.6 South
38 Americas
9.2
5% North
5%
4.6 Rest of
8.6
5% CAGR
5% CAGR Asia
4%
4%
8.2
22 6% 1.3
6%
2.8 6.7 Asia
5.6 8%
8%
1%
1% 5.2 29.1 China
0.8
5%
5%
3 6.7
4% 12.0
4%
0.7
12%
3.6 12%
0.8
0.06
2.5
1.4
0.11
1998 2007 2017
1958
Source: Brook Hunt, Alcoa analysis
22. Last time U.S. aluminum demand grew
(2006) it only represented 1% of global
demand
Source: HARBOR Intelligence
23. As demand in U.S. & Japan has stayed flat
consumption in China has increased 9-fold
since 1993
Source: HARBOR Intelligence
24. China not alone…
others catching-up too
PRIMARY ALUMINUM DEMAND PER CAPITA ´07 PRIMARY ALUMINUM DEMAND PER CAPITA ´07
(kg per capita) (kg per capita)
30
30
Germany 25.7 25.3 25.0
South Korea Canada 25
25
21.1
Taiwan 19.3 18.6
20
20
Japan 18.0
Italy USA
15
15
France
China 9.1
10
10 8.1
Russia 6.9 6.6
Thailand Venezuela 4.3
5 Brazil 5 3.5
Argentina
India 1.5 1.1 1.0
Indonesia Mexico
0.3
0 0
0 Philippines
Venezuela
Mexico
Italy
USA
Argentina
Brazil
Germany
Japan
South Korea
Canada
Taiwan
China
Thailand
India
Philippines
Indonesia
10 20 30 40 50
Russia
GDP per capita ($Thousands; PPP 2007 basis)
Source: HARBOR Intelligence
25. Global market boom expected to continue
PRIMARY ALUMINUM DEMAND PER CAPITA ´07
(kg per capita)
30
South Korea Germany
25
Taiwan
20
USA
Japan
15 China
Russia
10
Brazil
5
40 50
30 60
20
10
India GDP per capita ($ thousands; PPP 2007 basis)
Urbanizing &
Mature- Service/Tech
Agricultural
Industrializing
Source: HARBOR Intelligence
26. Our Strategies For Growth – Then and Now
20 Years Ago We Were Building for Growth
Sao Luis
30. Parental Advantage - Infrastructure
• Investments in IT/Oracle/ABS
• Back-office consolidation
• Increased connectivity
• Real-time safety data
• World-class EHS systems
• Integrated purchasing systems
– Req to Pay
31. Globalization Laid Groundwork for
Brownfield and Greenfield Investments
Upstream Examples
• Pinjarra
• Sao Luis
• Jamalco
• Juruti
• Iceland
32. Globalization Laid Groundwork for
Brownfield and Greenfield Investments
Downstream Examples
• Bohai – September 2008
• Russia – Belaya Kaltiva
and Samara
• Aerospace HT Sheet
and Plate +50%
33. We’ve Expanded into Additional
Areas to Serve Customers
• Purchased Howmet
• Added Fastening Systems
• Expanded Wheels
• New Capabilities For Customers
34. Our Innovation & Technology
Continue to Lead to Market Potential
Recycling Alloy Development Surface Enhancements
Recycling Alloy Development Surface Enhancements
Process Improvements Design Expertise Customer Solutions
Process Improvements Design Expertise Customer Solutions
35. Sustainability of Aluminum
Customers Want to Make Their Products
Green
• Green Buildings
• Aluminum Bottles vs. PET
• Recycling
• Trains, Planes and Autos
– Light-Weighting, Right-Weighting
37. Focusing on Climate Change
Leader in Public Policy
Founding Member USCAP
Alcoa CO2
31.1 mmt direct
27.9 mmt indirect
Alcoa is Favorably Positioned to Help Customers with GHG Emissions
40. Return on Capital
(in millions)
Bloomberg Return on Capital,
Bloomberg Return on Capital (1) Excluding Growth Investments (1)
Twelve months ended Twelve months ended
December 31, March 31, December 31, March 31,
2007 2008 2007 2008
Net income $ 2,564 $ 2,205 Net income $ 2,564 $ 2,205
Minority interests 365 317 Minority interests 365 317
Interest expense Interest expense
(after tax) 262 266 (after tax) 262 266
Numerator $ 3,191 $ 2,788 Numerator 3,191 2,788
Net losses of growth
investments (3) 91 96
Adjusted numerator $ 3,282 $ 2,884
Average Balances Average Balances
Short-term Short-term
borrowings $ 516 $ 524 borrowings $ 516 $ 524
Short-term debt 356 358 Short-term debt 356 358
Commercial paper 1,164 864 Commercial paper 1,164 864
Long-term debt 5,574 6,374 Long-term debt 5,574 6,374
Preferred stock 55 55 Preferred stock 55 55
Minority interests 2,130 2,320 Minority interests 2,130 2,320
Common equity (2) 15,269 15,563 Common equity (2) 15,269 15,563
Denominator $ 25,064 $ 26,058 Denominator 25,064 26,058
Capital projects in
progress and capital base
of growth investments (3) (4,620) (4,730)
Adjusted denominator $ 20,444 $ 21,328
Return on capital,
excluding growth
Return on capital investments
12.7% 10.7% 16.1% 13.5%
Return on capital, excluding growth investments is a non-GAAP financial measure. Management believes that this
measure is meaningful to investors because it provides greater insight with respect to the underlying operating
performance of the company’s productive assets. The company has significant growth investments underway in its
upstream and downstream businesses, as previously noted, with expected completion dates over the next several
years. As these investments generally require a period of time before they are productive, management believes that
a return on capital measure excluding these growth investments is more representative of current operating
performance.
(1) The Bloomberg Methodology calculates ROC based on the trailing four quarters. Average balances are
calculated as (March 2008 ending balance + March 2007 ending balance) divided by 2 for the twelve months
ended March 31, 2008, and (December 2007 ending balance + December 2006 ending balance) divided by 2 for
the twelve months ended December 31, 2007.
(2) Calculated as total shareholders’ equity less preferred stock.
(3) For all periods presented, growth investments include Russia, Bohai, and Kunshan.
41. Reconciliation of Adjusted Income
(in millions, except per-share amounts)
Net Income Diluted EPS
Quarter ended Quarter ended
1Q08 1Q08
Net income $ 303 $ 0.37
(Loss) income
from
discontinued
–
operations
Income from
continuing
303 0.37
operations
Discrete tax
items 28
Restructuring
and other
charges 30
Income from
continuing
operations –
excluding
restructuring
and other
charges and
discrete tax
$ 361
items 0.44
Income from continuing operations – excluding restructuring and other charges and discrete tax items 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 and discrete tax items. There can be
no assurances that additional restructuring and other charges and discrete tax items will not occur in future periods. To
compensate for this limitation, management believes that it is appropriate to consider both income from continuing
operations determined under GAAP as well as income from continuing operations – excluding restructuring and other
charges and discrete tax items.
42. After-tax Operating Income (ATOI)
(in millions)
4Q07 1Q08
Total segment ATOI $ 518 $ 666
Unallocated amounts (net of tax):
Impact of LIFO 9 (31)
Interest income 10 9
Interest expense (53) (64)
Minority interests (64) (67)
Corporate expense (100) (82)
Restructuring and other charges 1 (30)
Discontinued operations 8 –
Other 303 (98)
Consolidated net income $ 632 $ 303
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 total 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.
Quarter ended
December 31, March 31,
2007 2008
Total segment ATOI $ 518 $ 666
Packaging and Consumer 56 11
Total segment ATOI, excluding
Packaging and Consumer $ 462 $ 655
Total segment ATOI excluding the Packaging and Consumer segment 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 Packaging and Consumer
segment due to the sale of the businesses within this segment in February 2008.
