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  • 1. Annual Shareholders Meeting May 8, 2008
  • 2. Safety
  • 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.
  • 9. Annual Shareholders Meeting May 8, 2008
  • 10. Committed to Safety 2008 YTD LWD .09 TRR 0.99
  • 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
  • 14. Total Shareholder Return (%) -10% 0% 10% 20% 30% 40% 50% 60% 70% 1 2 /3 1 /0 6 Source: Thomson Financial 1 /3 1 /0 7 2 /2 8 /0 7 3 /3 1 /0 7 AA 4 /3 0 /0 7 DJIA 5 /3 1 /0 7 6 /3 0 /0 7 S&P 500 7 /3 1 /0 7 8 /3 1 /0 7 S&P Industrials 9 /3 0 /0 7 1 0 /3 1 /0 7 1 1 /3 0 /0 7 1 2 /3 1 /0 7 Total Shareholder Return for 2007 +12.5% DJIA +8.9% Alcoa +24.1% S&P Industrials S&P 500 +5.5%
  • 15. Total Shareholder Return (%) -25% -20% -15% -10% -5% 0% 5% 10% 1 2 /3 1 /0 7 1 /4 /0 8 Source: Thomson Reuters 1 /9 /0 8 1 /1 4 /0 8 1 /1 7 /0 8 1 /2 3 /0 8 1 /2 8 /0 8 1 /3 1 /0 8 (As of 5/7/08) 2 /5 /0 8 Alcoa 2 /8 /0 8 2 /1 3 /0 8 2 /1 9 /0 8 DJIA 2 /2 2 /0 8 2 /2 7 /0 8 3 /3 /0 8 3 /6 /0 8 S&P 500 3 /1 1 /0 8 3 /1 4 /0 8 3 /1 9 /0 8 3 /2 5 /0 8 3 /2 8 /0 8 4 /2 /0 8 S&P Industrials 2008 Total Shareholder Return 4 /7 /0 8 4 /1 0 /0 8 4 /1 5 /0 8 4 /1 8 /0 8 4 /2 3 /0 8 4 /2 8 /0 8 5 /1 /0 8 5 /6 /0 8 -2.4% DJIA -2.6% Alcoa +5.3% S&P Industrials S&P 500 -4.5%
  • 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 $20.3B 2003 2004 2005 2006 2007
  • 20. Markets Drive Growth Over Past 50 Years Commercial Airplanes Global Auto Production (Millions) 80 18,000 70 16,000 60 14,000 50 12,000 40 10,000 8,000 30 6,000 20 4,000 10 2,000 0 0 07 50 61 64 67 70 73 76 79 82 85 88 91 94 03 06 97 00 07 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 19 19 19 19 19 19 19 19 19 19 19 19 19 19 20 20 20 Aluminum Beverage Cans 220 200 180 160 140 120 100 80 60 40 20 89 91 93 95 97 99 01 03 05 07 19 19 19 19 19 19 20 20 20 20 Source: CRU Beverage Packaging Material Report
  • 21. Historical Perspective World Aluminum Consumption 67 (million metric tons) East Eur/ 6% CAGR 7.3 Mid East/ 6% CAGR Africa Europe/ME/ Africa W.Europe 10.6 6% CAGR 6% CAGR 2.6 South 38 Americas 9.2 5% North 5% 4.6 Rest of 8.6 5% CAGR 5% CAGR Asia 4% 4% 8.2 22 6% 1.3 6% 2.8 6.7 Asia 5.6 8% 8% 1% 1% 5.2 29.1 China 0.8 5% 5% 3 6.7 4% 12.0 4% 0.7 12% 3.6 12% 0.8 0.06 2.5 1.4 0.11 1998 2007 2017 1958 Source: Brook Hunt, Alcoa analysis
  • 22. Last time U.S. aluminum demand grew (2006) it only represented 1% of global demand Source: HARBOR Intelligence
  • 23. As demand in U.S. & Japan has stayed flat consumption in China has increased 9-fold since 1993 Source: HARBOR Intelligence
  • 24. China not alone… others catching-up too PRIMARY ALUMINUM DEMAND PER CAPITA ´07 PRIMARY ALUMINUM DEMAND PER CAPITA ´07 (kg per capita) (kg per capita) 30 30 Germany 25.7 25.3 25.0 South Korea Canada 25 25 21.1 Taiwan 19.3 18.6 20 20 Japan 18.0 Italy USA 15 15 France China 9.1 10 10 8.1 Russia 6.9 6.6 Thailand Venezuela 4.3 5 Brazil 5 3.5 Argentina India 1.5 1.1 1.0 Indonesia Mexico 0.3 0 0 0 Philippines Venezuela Mexico Italy USA Argentina Brazil Germany Japan South Korea Canada Taiwan China Thailand India Philippines Indonesia 10 20 30 40 50 Russia GDP per capita ($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
  • 27. Strategies For Growth Alcoa Fjardaal Started Last Pot on April 9th
  • 28. Targeted Repowering Efforts… Update April 2008 Projected Status Year-end 2008 Progress in Quebec 100% Power Market Efforts Repowering 90% Exposure 2012 2009 - 80% % of Equity Capacity Remaining targeted in 2008 70% Repowered 60% 50% Contracted 40% Power Contracted Power & MOUs 30% 20% 10% Self-Generated Power 0% 2008 2015 2020 2009 2010 2011 2012 2013 2014 2016 2017 2018 2019 Excludes Curtailed Capacity
  • 29. Self-Sufficiency Energy Investment Warrick $600 Million Investment Reduce Emissions and Increase Energy Generation Brazil Hydro Projects
  • 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
  • 36. Making a Difference in Climate Change
  • 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
  • 38. Annual Shareholders Meeting May 8, 2008
  • 39. Appendix
  • 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.