Howmet Aerospace (HWM) 8-K AA - Q4 2007 ALCOA Inc Earnings Conference Call

[Alcoa logo]

January 9, 2008

4  Quarter 2007 Analyst Conference

Exhibit 99.2

th

2

[Alcoa logo]

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, 2006 and Forms 10-Q for the

quarters ended March 31, 2007, June 30, 2007 and September

30, 2007 filed with the Securities and Exchange Commission.

Forward Looking Statements

[Alcoa logo]

Executive Vice President and Chief Financial Officer

Charles D. McLane

4

[Alcoa logo]

Source:  IAI and LME

Global Days of Consumption

5

[Alcoa logo]

Primary Aluminum Consumption Growth Rates

Source:  Alcoa analysis

6

[Alcoa logo]

China Metal Balance

Source:  IAI and China Nonferrous Industry Association

7

[Alcoa logo]

4Q07 and 2007 Global Market Dynamics

8

[Alcoa logo]

4

th

Quarter 2007 Financial Overview

–

Income from continuing operations of $624m or      

$0.74 per share

–

Revenues of $7.4b

–

Cash from operations of $643m

–

Debt-to-cap at 30.2%

–

Trailing four quarters ROC of 12.7%

9

[Alcoa logo]

4

th

Quarter 2007 Financial Overview

$ In Millions

3Q'07

4Q'07

Change

Sales

$7,387

$7,387

$0

Cost of Goods Sold

$5,910

$6,153

$243

   % of Sales

80.0%

83.3%

3.3 pts.

SG&A

$365

$383

$18

   % of Sales

4.9%

5.2%

0.3 pts.

Restructuring and Other Charges

$577

($14)

($591)

Interest Expense

$151

$81

($70)

Other Income, Net

($1,731)

($78)

$1,653

Effective Tax Rate

63.0%

-44.8%

107.8 pts.

Minority Interests

$76

$64

($12)

GAAP Net Income

$555

$632

$77

(Loss) Income from Discontinued Operations

($3)

$8

$11

GAAP Income From Continuing Operations

$558

$624

$66

10

[Alcoa logo]

3

rd

Quarter vs. 4

th

Quarter Comparison

11

[Alcoa logo]

4

th

Quarter 2007 Cash Flow Review

$ In Millions

4Q'06

4Q'07

Net Income

$359

$632

DD&A

325

310

Change in Working Capital

362

519

Other Adjustments

340

(793)

Pension Contributions

(53)

(25)

Cash From Operating Activities

1,333

643

Dividends to Shareholders

(131)

(143)

Change in Debt

(676)

467

Dividends to Minority Interests

(119)

(58)

Contributions from Minority Interests

278

105

Share Repurchases

0

(948)

Share Issuances

14

16

Other Financing Activities

1

2

Cash From Financing Activities

(633)

(559)

Capital Expenditures

(1,147)

(1,021)

Sales of Investments

28

30

Other Investing Activities

350

72

Cash From Investing Activities

($769)

($919)

12

[Alcoa logo]

4Q’07

3Q’07

4Q’06

2,030

1,937

2,084

3    Party Shipments (kmt)

3,855

3,775

3,790

Production (kmt)

688

664

711

3  

Party Revenue ($MM)

205

215

259

ATOI ($MM)

2% production increase sequentially

Higher energy and freight costs

Unfavorable currency

Alumina

4

th

Quarter Highlights

1

st

Quarter Outlook

Prices to follow approximate two-month

lag

Anticipate slight production increase

Continued pressure from fuel oil and

natural gas prices

Currency risk

4

th

Quarter Business Conditions

rd

rd

13

[Alcoa logo]

4

th

Quarter Highlights

196

283

480

ATOI ($MM)

2,646

2,734

2,766

3    Party Price ($/MT)

1,597

1,600

1,698

3    Party Revenue ($MM)

4Q’07

3Q’07

4Q’06

624

584

556

3    Party Shipments (kmt)

959

934

908

Production (kmt)

Primary Metals

1

st

Quarter Outlook

4

th

Quarter Business Conditions

Lower realized pricing sequentially

Unfavorable currency

3% production increase sequentially

Positive impact of recovery at Rockdale

and Tennessee

Anticipate 5% production increase

sequentially

Higher energy costs

Currency risk

rd

rd

rd

14

[Alcoa logo]

Higher Russia ramp-up costs

Market weakness –

especially in Europe

Distributor de-stocking persists

Impact of currency / restructuring efforts

in Australia Rolled Products

Startup costs at Bohai

4Q’07

3Q’07

4Q’06

(16)

61

62

ATOI ($MM)

2,243

2,309

2,127

3

Party Revenue

($MM)

Flat-Rolled Products

4

th

Quarter Highlights

1

st

Quarter Outlook

4

th

Quarter Business Conditions

Improved market conditions

Improved Russia performance

Continued startup costs at Bohai

rd

15

[Alcoa logo]

(7)

(7)

(4)

Other

60

102

(35)

3Q’07

Total

Investment Castings,

Forgings,  Fasteners

AFL, Auto Castings and

Structures

73

61

16

4Q’06

58

76

(11)

4Q’07

Aerospace market remains strong but

shipments tempered by de-stocking

Continued weakness in North American

commercial transportation partially

mitigated by share gains

Decline in North American automotive

AFL turnaround progressing as planned

Engineered Solutions

ATOI ($MM)

4

th

Quarter Business Conditions

1

st

Quarter Outlook

Strong aerospace market to continue but

de-stocking still could have some impact

North American heavy truck downturn to

extend into 2008

Stronger IGT market

AFL restructuring to deliver improvement

16

[Alcoa logo]

0

(7)

18

Soft Alloy Joint Venture

and Other

4Q’07

3Q’07

4Q’06

16

13

27

Total

16

20

9

Global Hard Alloy

Extrusions, Building &

Construction Systems

and Russia

Comparable market and operating

conditions as 3Q

Extruded and End Products

ATOI ($MM)

4

th

Quarter Business Conditions

1

st

Quarter Outlook

Building & Construction markets could

be slightly weaker

Expect consistent operating conditions

17

[Alcoa logo]

17

0

(1)

Other

36

0

36

3Q’07

Total

Reynolds Food Packaging

and Flexible Packaging

Closure Systems and

Consumer Products

26

(9)

36

4Q’06

56

(3)

42

4Q’07

Packaging and Consumer

ATOI ($MM)

4

th

Quarter Business Conditions

1

st

Quarter Outlook

Sale

expected

to

close

by

end

of

1

st

quarter

–

Seasonal decline in Closures business

offset by seasonal improvement in

Consumer business

–

Improved consumer product mix

$0

$10

$20

$30

$40

$50

$60

1Q06

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

$500

$600

$700

$800

$900

ATOI

Third Party Revenue

18

[Alcoa logo]

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%

–

Total Shareholder Return

increase of 24%

19

[Alcoa logo]

2007 vs. 2006 Bridge

20

[Alcoa logo]

2007 Cash Flow Review

$ In Millions

2006

2007

Net Income

$2,248

$2,564

DD&A

1,280

1,269

Change in Working Capital

(903)

782

Other Adjustments

339

(1,182)

Pension Contributions

(397)

(322)

Cash From Operating Activities

2,567

3,111

Dividends to Shareholders

(523)

(590)

Change in Debt

679

654

Dividends to Minority Interests

(400)

(368)

Contributions from Minority Interests

342

474

Share Repurchases

(290)

(2,496)

Share Issuances

155

835

Other Financing Activities

17

(47)

Cash From Financing Activities

(20)

(1,538)

Capital Expenditures

(3,205)

(3,636)

Sales of Investments

35

2,011

Other Investing Activities

329

0

Cash From Investing Activities

($2,841)

($1,625)

21

[Alcoa logo]

Share Repurchase Program

Based on 870M Shares Outstanding

As of January 19, 2007

~8% repurchased as of 4Q 2007

~17% additional

authorized

–

10% repurchase program

authorized January 2007

–

~68M shares repurchased

through 4Q 2007

–

Expanded 25% repurchase

program authorized

October 2007

Timeline

Overview

653M

68M

149M

22

[Alcoa logo]

2007 Financial Targets

[Alcoa logo]

Chairman and Chief Executive Officer

Alain J.P. Belda

24

[Alcoa logo]

2007 Accomplishments

–

Environmental, Health and Safety

–

Innovation and Technology

–

Portfolio Management

–

Long-Term Growth

–

Financial Performance

25

[Alcoa logo]

Sustainability, Environment, Health and Safety

–

Named a component of the Dow Jones Sustainability Index

for the sixth year

–

Recognized as “Best in Class”

in response to climate

change by the Carbon Disclosure Project

–

Earned “Best in Class”

status by Storebrand

Investments

–

Ranked 1

st

in the Metals and Mining sector and 5

th

overall

in the Covalence Ethical Ranking

26

[Alcoa logo]

–

New generation of aluminum-lithium alloys

–

New generation of energy-efficient,

environmentally friendly transportation

–

New market penetration in oil and gas

–

Stronger, lighter, faster defense solutions

Innovation and Technology

27

[Alcoa logo]

Portfolio Management

–

Signed agreement to sell the packaging business

–

Monetized Chalco

investment

–

Finalized the soft alloy extrusions joint venture

–

Restructured the Electrical and Electronic Solutions

business

–

Closed on the auto castings sale

28

[Alcoa logo]

Portfolio Management

29

[Alcoa logo]

Long-Term Growth

–

Opened our 3

rd

FRP facility (Kunshan) in China

–

Continued

to

expand

the

Bohai

plant

in

China

–

Continued to make progress on the Russia assets

–

Continued

the

construction

of

the

Juruti

and

Sao

Luis

projects

–

Invested

in

the

Serra

do

Facao

hydroelectric project

–

Opened the anode plant in Norway and our smelter in Iceland

30

[Alcoa logo]

Long-Term Growth

Re-Powering the Smelter Portfolio

31

[Alcoa logo]

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%

–

Total Shareholder Return

increase of 24%

32

[Alcoa logo]

2007 Challenges

–

Higher input costs

–

Unfavorable currency

–

Primary curtailments

–

Progress in Russia

–

Higher construction costs

33

[Alcoa logo]

2008 Outlook

–

Market Fundamentals

–

Market Conditions

–

Portfolio Improvements

–

Catalysts

34

[Alcoa logo]

LME Forward Price Curve

Source:  LME

35

[Alcoa logo]

Primary Aluminum Consumption Growth Rates

Source:  Alcoa analysis

36

[Alcoa logo]

2008 Market Outlook and Impact

37

[Alcoa logo]

2008 Catalysts

38

[Alcoa logo]

Tony Thene

Director, Investor Relations

Alcoa

390 Park Avenue

New York, N.Y. 10022-4608

Telephone:  (212) 836-2674

Facsimile:  (212) 836-2813

www.alcoa.com

For Additional Information, Contact:

39

[Alcoa logo]

[Alcoa logo]

40

[Alcoa logo]

APPENDIX

[Alcoa logo]

41

[Alcoa logo]

Reconciliation of ATOI to

Consolidated Net Income

$  2,564

$     632

$     555

$     715

$     662

$  2,248

$     359

Consolidated net income

702

306

456

(50)

(10)

104

10

Other

(7)

8

(3)

(1)

(11)

87

101

Discontinued operations

(307)

1

(311)

21

(18)

(379)  

(386)

Restructuring and other charges

(388)

(100)

(101)

(101)

(86)

(317)

(82)

Corporate expense

(365)

(64)

(76)

(110)

(115)

(436)

(98)

Minority interests

(261)

(53)

(98)

(56)

(54)

(250)

(61)

Interest expense

40

10

10

9

11

58

14

Interest income

(24)

9

10

(16)

(27)

(170)

(66)

Impact of LIFO

Unallocated amounts (net of tax):

$  3,174

$     515

$     668

$  1,019

$     972

$  3,551

$     927

Total segment ATOI

2007

4Q07

3Q07

2Q07

1Q07

2006

4Q06

42

[Alcoa logo]

Return on Capital (ROC) is presented based on Bloomberg Methodology which calculates ROC based on trailing

four quarters.

Reconciliation of Return on Capital

4Q'07

3Q'07

2Q'07

1Q'07

4Q'06

3Q'06

2Q'06

1Q'06

4Q'05

3Q'05

2Q'05

1Q'05

Bloomberg

Bloomberg

Bloomberg

Bloomberg

Bloomberg

Bloomberg

Bloomberg

Bloomberg

Bloomberg

Bloomberg

Bloomberg

Bloomberg

(In Millions)

Method

Method

Method

Method

Method

Method

Method

Method

Method

Method

Method

Method

Net income

$2,564

$2,291

$2,273

$2,302

$2,248

$2,113

$1,865

1,581

$1,233

$1,270

$1,271

$1,215

Minority interests

$365

$399

$432

$446

$436

$418

$368

304

$259

$230

$239

$252

Interest expense (after-tax)

$262

$246

$270

$281

$291

$272

$268

$274

$261

$263

$234

$206

Numerator (sum total)

$3,191

$2,936

$2,975

$3,029

$2,975

$2,803

$2,501

$2,159

$1,753

$1,763

$1,744

$1,673

Average Balances

Short-term borrowings

$516

$497

$451

$441

$386

$349

$303

$342

$279

$155

$152

$185

Short-term debt

$356

$525

$359

$360

$284

$449

$55

$53

$58

$272

$273

$269

Commercial paper

$1,164

$1,275

$1,169

$972

$1,192

$1,678

$1,501

$1,652

$771

$581

$553

$815

Long-term debt

$5,574

$5,390

$5,709

$5,767

$5,027

$4,915

$5,333

$5,243

$5,309

$5,746

$5,920

$6,023

Preferred stock

$55

$55

$55

$55

$55

$55

$55

$55

$55

$55

$55

$55

Minority interests

$2,130

$1,927

$1,809

$1,669

$1,583

$1,416

$1,340

$1,280

$1,391

$1,332

$1,253

$1,263

Common equity

$15,269

$15,255

$15,571

$14,621

$13,947

$14,120

$13,834

$13,611

$13,282

$13,045

$12,761

$12,766

Denominator (sum total)

$25,064

$24,924

$25,123

$23,885

$22,474

$22,982

$22,421

$22,236

$21,144

$21,185

$20,967

$21,376

Return on Capital

12.7%

11.8%

11.8%

12.7%

13.2%

12.2%

11.2%

9.7%

8.3%

8.3%

8.3%

7.8%

43

[Alcoa logo]

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.

Reconciliation of Adjusted Return on Capital

4Q'07

3Q'07

2Q'07

1Q'07

4Q'06

3Q'06

2Q'06

1Q'06

4Q'05

3Q'05

2Q'05

1Q'05

Bloomberg

Bloomberg

Bloomberg

Bloomberg

Bloomberg

Bloomberg

Bloomberg

Bloomberg

Bloomberg

Bloomberg

Bloomberg

Bloomberg

(In Millions)

Method

Method

Method

Method

Method

Method

Method

Method

Method

Method

Method

Method

Numerator (sum total)

$3,191

$2,936

$2,975

$3,029

$2,975

$2,803

$2,501

$2,159

$1,753

$1,763

$1,744

$1,673

Russia, Bohai, and Kunshan

net losses

($91)

($57)

($51)

($79)

($74)

($85)

($78)

($86)

($71)

($48)

($41)

($12)

Adjusted numerator

$3,282

$2,993

$3,026

$3,108

$3,049

$2,888

$2,579

$2,245

$1,824

$1,811

$1,785

$1,685

Average Balances

Denominator (sum total)

$25,064

$24,924

$25,123

$23,885

$22,474

$22,982

$22,421

$22,236

$21,144

$21,185

$20,967

$21,376

Capital projects in progress

and Russia, Bohai, and

Kunshan

capital base

$4,620

$4,430

$4,521

$3,945

$3,655

$2,540

$2,330

$2,139

$1,913

$1,776

$1,478

$1,403

Adjusted denominator

$20,444

$20,494

$20,602

$19,940

$18,819

$20,442

$20,091

$20,097

$19,231

$19,409

$19,489

$19,973

Return on capital, excluding

growth investments

16.1%

14.6%

14.7%

15.6%

16.2%

14.1%

12.8%

11.2%

9.5%

9.3%

9.2%

8.4%

44

[Alcoa logo]

Reconciliation of EBITDA Margin

Year ended

December 31,

Year ended

December 31,

Year ended

December 31,

2006

2007

2006

2007

2006

2007

Flat-Rolled Products

Extruded and End Products

Engineered Solutions

After-tax operating income (ATOI)

(1)

$     255

$     200

$       60

$     109

$     331

$     316

Add: Income taxes

68

95

18

54

101

140

Less: Other income and (expenses), net (2)

(26)

(4)

2

34

(5)

(2)

Net margin

349

299

76

129

437

458

Add: Depreciation, depletion,

and amortization

219

223

118

39

169

172

Earnings before interest, taxes, depreciation,

and amortization (EBITDA) (3)

$     568

$     522

$     194

$     168

$     606

$     630

Third-party sales

$  8,297

$  9,171

$  4,419

$  3,246

$  5,456

$  5,725

Inter

segment

sales

246

241

99

88

–

–

Total Sales

$  8,543

$  9,412

$  4,518

$  3,334

$  5,456

$  5,725

EBITDA Margin (4)

6.6%

5.5%

4.3%

5.0%

11.1%

11.0%

(1)

See Slide 41

for a reconciliation of segment ATOI to consolidated net income.

(2)

Other income and (expenses), net, include equity income (loss), gain or loss on sale of assets, mark-

to-

market activities and other items.

(3)

Alcoa’s definition of EBITDA is net margin excludingdepreciation, depletion, and amortization.  Net margin is equivalent to sales minus the following items: cost of goods sold; selling, general

administrative,

and

other

expenses;

and

research

and

development

expenses.

(4)

EBITDA Margin is calculated by dividing EBITDA by Total Sales.

45

[Alcoa logo]

Reconciliation

of

EBITDA

Margin

–

P&C

Year

ended

December 31,

2006

2007

Packaging and Consumer:

After-tax

operating

income

(ATOI)

(1)

$       95

$     148

Add: Income taxes

33

68

Less: Other income and (expenses), net (2)

6

2

Net margin

122

214

Add: Depreciation, depletion,

124

89

Earnings before interest, taxes, depreciation, and

amortization (EBITDA) (3)

$     246

$     303

Third-party sales

$  3,235

$  3,288

EBITDA Margin (4)

7.6%

9.2%

See Slide 41 for a reconciliation of segment ATOI to consolidated net income.

Other income and (expenses), net, include equity income (loss), gain or loss on sale of assets, mark-to-market

activities and other items.

Alcoa’s definition of EBITDA is net margin excluding depreciation, depletion, and amortization. Net margin is equivalent

to sales minus the following items: cost of  goods sold; selling, general administrative, and other expenses; and

research and development expenses.

EBITDA Margin is calculated by dividing EBITDA by Third-party Sales. The Packaging and Consumer segment does

not have intersegment

sales.

(1)

(2)

(3)

(4)

and amortization

46

[Alcoa logo]

39.1

45.3

44.1

Days of Working Capital

$   7,387

$   7,387

$   7,840

Sales

$   3,141

$   3,638

$   3,761

Working Capital

2,787

2,649

2,407

Less: Accounts payable, trade

3,326

3,311

3,380

Add: Inventories

$   2,602

$   2,976

$   2,788

Receivables from customers, less allowances

December 31,

2007

September 30,

2007

December 31,

2006 (a)

Quarter ended

Days of Working Capital = Working Capital divided by (Sales/number of days in the quarter)

(a) Certain

financial

information

for

the

quarter

ended

December

31,

2006

has

been

reclassified

to

reflect

the

movement

of

the

automotive castings and packaging and consumer businesses to held for sale in the third quarter of 2007. 

Days of Working Capital

47

[Alcoa logo]

Reconciliation

of

Adjusted

Income

-

Quarter

Quarter ended

3Q07

4Q07

Net income

$   555      $   632

(Loss) income

from

discontinued

operations

(3)

8

Income from

continuing

operations

558

624

Gain on sale of

Chalco

investment

(1,140)

–

Transaction

costs*

55

1

Restructuring

and other

charges**

867

(323)

Income from

continuing

operations   –

excluding

restructuring

and other

charges,

transaction

costs

and

Chalco

gain

$   340

$   302

**

*

Transaction

costs

include

investment

banking,

legal,

accounting,

and

other

third-party

expense,

and

interest

expense

related

to

the

Alcan

offer.

All

costs

expect

for

interest

expense

are

included

in

Selling,

general

administrative,

and

other

expenses

on

the

Statement

of

Consolidated

Income.

Restructuring

and

other

charges

include

discrete

income

tax

adjustments

related

to

the

sale

of

the

Packaging

and

Consumer

businesses.

These

tax

adjustments

are

included

in

the

Provision

for

taxes

on

income

on

the

Statement

of

Consolidated

Income.

48

[Alcoa logo]

Reconciliation of Adjusted Income –

Annual

Year

ended

2006

2007

Net income

$ 2,248

$ 2,564

Income

(loss)

from

discontinued

operations

87

(7)

Income from

continuing

operations

2,161

2,571

Transaction

costs*

–

73

Restructuring

and other

charges**

379

542

Income from

continuing

operations   –

excluding

restructuring

and other

charges

and

transaction

costs

$ 2,540

$ 3,186

Transaction

costs

include

investment

banking,

legal,

accounting,

and

other

third-party

expenses,

and

interest

expense

related

to

the

Alcan

offer.

All

costs except for interest expense are included in Selling, general administrative, and other expenses on the Statement of Consolidated Income.

Restructuring and other charges include discrete income tax adjustments related to the sale of the Packaging and Consumer businesses. These tax

adjustments

are

included

in

the

Provision

for

taxes

on

income

on

the

Statement

of

Consolidated

Income.

*

*

49

[Alcoa logo]

Portfolio Management

Soft Alloy

Packaging

Automotive

2007

2007

Extrusions

& Consumer

Castings

As Adjusted

Sales

$ 30,748

$   1,041

$   3,288

$      132

$ 26,287

Selling, general administrative, and other

expenses (SG&A)

$   1,472

$        30

$      216

$          3

$   1,223

SG&A / Sales

4.8%

2.9%

6.6%

2.3%

4.7%

EBITDA Margin:

Net income (loss)

$   2,564

$ 

69

$      145

$       (50)

$   2,400

Add:

Loss from discontinued operations

7

–

–

–

7

Minority interests

365

–

1

–

364

Provision (benefit) for taxes on income

1,555

35

67

(25)

1,478

Other income, net

(1,913)

(67)

(2)

–

(1,844)

Interest expense

401

–

1

1

399

Restructuring and other charges

399

(2)

2

71

328

Goodwill impairment charge

133

–

–

–

133

Provision for depreciation, depletion, and

amortization

1,268

35

89

10

1,134

Earnings before interest, taxes, depreciation,

and amortization (EBITDA) (1

)

$   4,779

$        70

$

303

$          7

$   4,399

EBITDA Margin (EBITDA / Sales)

15.5%

6.7%

9.2%

5.3%

16.7%

Return on Capital(2)

:

Numerator

$

3,191

$        69

$      145

$       (50)

$   3,027

Denominator

$ 25,064

$       

–

$   2,600

$          –

$ 22,464

Return on Capital

12.7%

13.5%

(1)

Alcoa’s

definition

of

EBITDA

is

net

margin

excluding

depreciation,

depletion,

and

amortization.

Net

margin

is

equivalent

to

sales

minus

the

following

items:

cost

of

goods

sold;

selling,

general

administrative,

and

other

expenses;

and

research

and

development

expenses.

(2)

r

See Slide 42

for

the

calculation

of

the

numerator

and

denominator in the 2007 column.  The $2,600 in the Packaging & Consumer column represents the estimated sale proceeds

minus estimated cash taxes of $100 and is reducing the denominator as it is assumed that the net cash proceeds will be used to repay debt or repurchase stock

.

50

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