![]() 4 th Quarter Earnings Conference January 9 th , 2012 Exhibit 99.2 |
![]() Cautionary Statement 2 Forward-Looking Statements This presentation contains statements that relate to future events and expectations and as such constitute forward-looking statements. 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 growth for aluminum, end- market conditions, and growth opportunities for aluminum in automotive, aerospace and other applications, trend projections, targeted financial results or operating performance, and statements about Alcoa’s strategies, 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. 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, and fluctuations in indexed-based and spot prices for alumina; (b) deterioration in global economic and financial market conditions generally; (c) unfavorable changes in the markets served by Alcoa, including automotive and commercial transportation, aerospace, building and construction, distribution, packaging, defense, and industrial gas turbine; (d) the impact of changes in foreign currency exchange rates on costs and results, particularly the Australian dollar, Brazilian real, Canadian dollar, euro, and Norwegian kroner; (e) increases in energy costs, including electricity, natural gas, and fuel oil, or the unavailability or interruption of energy supplies; (f) increases in the costs of other raw materials, including calcined petroleum coke, caustic soda, and liquid pitch; (g) Alcoa’s inability to achieve the level of revenue growth, cash generation, cost savings, improvement in profitability and margins, fiscal discipline, or strengthening of competitiveness and operations (including moving its alumina refining and aluminum smelting businesses down on the industry cost curves and increasing revenues in its Flat-Rolled Products and Engineered Products and Solutions segments) anticipated from its restructuring programs and productivity improvement, cash sustainability, and other initiatives; (h) Alcoa's inability to realize expected benefits from newly constructed, expanded, or acquired facilities or from international joint ventures as planned and targeted completion dates, including the joint venture in Saudi Arabia, the upstream operations in Brazil, and the investments in hydropower projects in Brazil; (i) political, economic, and regulatory risks in the countries in which Alcoa operates or sells products, including unfavorable changes in laws and governmental policies, civil unrest, or other events beyond Alcoa’s control; (j) the outcome of contingencies, including legal proceedings, government investigations, and environmental remediation; (k) the business or financial condition of key customers, suppliers, and business partners; (l) adverse changes in tax rates or benefits; (m) adverse changes in discount rates or investment returns on pension assets; and (n) the other risk factors summarized in Alcoa's Form 10-K for the year ended December 31, 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. |
![]() Chuck McLane Executive Vice President and Chief Financial Officer |
![]() 4 4 th Quarter 2011 Financial Overview Loss from Continuing Operations of $193 million, or $0.18 per share; Excluding impact of restructuring and other special items: Loss from continuing operations of $34 million, or $0.03 per share Revenue down 7% sequentially and up 6% versus fourth quarter 2010 Adjusted EBITDA of $445 million Free Cash Flow of $656 million Days Working Capital at a record low 27 days Debt-to-Capital at 35% Net debt balance reduced by $547 million, Cash on hand of $1.9 billion Achieved every Cash Sustainability Target in 2011 See appendix for reconciliations to GAAP and additional information |
![]() 5 Income Statement Summary $ Millions, except per-share amounts 4Q’10 3Q’11 4Q’11 Year Change Sequential Change Sales $5,652 $6,419 $5,989 $337 ($430) Cost of Goods Sold $4,538 $5,290 $5,228 $690 ($62) COGS % Sales 80.3% 82.4% 87.3% 7.0 % pts. 4.9 % pts. Selling, General Administrative, Other $282 $261 $268 ($14) $7 SGA % Sales 5.0% 4.1% 4.5% (0.5 % pts.) 0.4 % pts. Restructuring and Other Charges ($12) $9 $232 $244 $223 Effective Tax Rate 16.1% 19.6% 31.0% 14.9 % pts. 11.4 % pts. Income (Loss) from Continuing Operations $258 $172 ($193) ($451) ($365) Income (Loss) Per Diluted Share $0.24 $0.15 ($0.18) ($0.42) ($0.33) |
![]() 6 Restructuring and Other Special Items $ Millions, except for per-share amounts 4Q’10 3Q’11 4Q’11 Income (Loss) from Continuing Operations $258 $172 ($193) Income (Loss) Per Diluted Share $0.24 $0.15 ($0.18) Restructuring Related $8 ($5) ($159) Discrete Tax Items $18 $10 ($12) Mark-to-Market Energy Contracts $9 $13 $8 Australia Asset Sale - - $18 Uninsured Losses - ($11) ($14) Special Items $35 $7 ($159) Income (Loss) from Continuing Ops excl Special Items $223 $165 ($34) Income (Loss) per Diluted Share excl Special Items $0.21 $0.15 ($0.03) See appendix for Adjusted Income (Loss) reconciliation |
![]() 4 th Quarter 2011 vs. 3 rd Quarter 2011 Earnings Bridge 7 See appendix for Adjusted Income (Loss) reconciliation -$125m +$5m -$79m Income (Loss) from Continuing Operations Excluding Restructuring & Other Special Items ($ millions) |
![]() Alumina 4Q 10 3Q 11 4Q 11 Production (kmt) 4,119 4,140 4,178 3 rd Party Shipments (kmt) 2,433 2,256 2,378 3 rd Party Revenue ($ Millions) 759 879 847 ATOI ($ Millions) 65 154 125 8 4 th Quarter Results 1 st Quarter Outlook 4 th Quarter Business Highlights Days working capital down 3 days from 3Q 2011 and 4Q 2010 Performance gains more than offset cost increases Caustic inflation continued Land sale in Australia contributed positively to segment ATOI 4 th Quarter Performance Bridge See appendix for reconciliations to GAAP and additional information 33% of 3 rd party shipments on spot or alumina price index Other pricing to follow two-month lag on LME Raw materials inflation to continue with $10 million ATOI impact Australian maintenance and overhauls with $20 million ATOI impact Productivity improvements to continue |
![]() Primary Metals 4Q 10 3Q 11 4Q 11 Production (kmt) 913 964 962 3 rd Party Shipments (kmt) 743 754 805 3 rd Party Revenue ($ Millions) 1,970 2,124 1,991 3 rd Party Price ($/MT) 2,512 2,689 2,374 ATOI ($ Millions) 178 110 (32) 9 4 th Quarter Results 4 th Quarter Business Highlights 1 st Quarter Outlook Realized pricing down 12% sequentially Higher raw materials cost, principally alumina Record days working capital, down 7 days from 3Q 2011 and 4 days from 4Q 2010 4 th Quarter Performance Bridge $ Millions See appendix for reconciliations to GAAP and additional information -$115m +$21m -$48m market performance cost increases Pricing to follow 15-day lag to LME Falling regional premiums will impact ATOI by $20 million at current levels Seasonal increases in smelting energy and scheduled maintenance at power plants for $25 million ATOI impact Productivity improvements continue |
![]() 10 1 st Quarter Outlook 4 th Quarter Business Highlights 4 th Quarter Results ATOI $ Millions 4Q 10 3Q 11 4Q 11 Flat-Rolled Products, excl Russia, China & Other 55 57 32 Russia, China & Other (2) 3 (6) Total ATOI 53 60 26 4 th Quarter Performance Bridge Global Rolled Products See appendix for reconciliations to GAAP and additional information $ Millions Seasonal decline in beverage can volumes in North America and Russia (NA -12%, RUS -23%) European market declined 16% Aerospace and automotive demand remain stable Productivity improvements generated $4m $5m impact from customer credit losses Aerospace and automotive demand expected to remain strong Productivity improvements will continue Can stock demand expected to recover from seasonal low European outlook continues to be weak Negative impacts from higher energy and transportation costs |
![]() $ Millions 4Q 10 3Q 11 4Q 11 3rd Party Revenue 1,215 1,373 1,355 ATOI 113 138 122 Adjusted EBITDA Margin 17% 18% 16% Engineered Products and Solutions 11 4 th Quarter Performance Bridge 4 th Quarter Business Highlights 4 th Quarter Results 12% revenue growth year-over-year and down 1% sequentially 8% improvement in ATOI year-over-year and down 12% sequentially Favorable productivity driven by process improvements and procurement savings Cost increases driven by Cleveland press outage and lower yield at certain businesses Other non-operational cost predominantly obsolete inventory 1 st Quarter Outlook See appendix for reconciliations to GAAP and additional information Productivity gains quarter-over-quarter Aerospace market remains strong Building & Construction market continuing to decline Commercial Transportation market remains soft in Europe Share gains through innovation continue across all market sectors |
![]() ($ Millions) 4Q’10 3Q’11 4Q’11 Net Income $292 $225 ($163) DD&A $371 $377 $368 Change in Working Capital $569 ($93) $797 Pension Contributions ($43) ($114) ($119) Taxes / Other Adjustments $181 $94 $259 Cash from Operations $1,370 $489 $1,142 Dividends to Shareholders ($31) ($33) ($33) Change in Debt ($113) $72 $52 Distributions to Noncontrolling Interest ($102) ($66) ($4) Contributions from Noncontrolling Interest $41 $8 $33 Other Financing Activities $4 ($8) $1 Cash from Financing Activities ($201) ($27) $49 Capital Expenditures ($365) ($325) ($486) Other Investing Activities ($109) ($42) ($97) Cash from Investing Activities ($474) ($367) ($583) 12 4Q’11 FCF $656 million $1.9 billion of cash Debt-to-Cap at 35% DWC at historical low in 4Q 2011 See appendix for Free Cash Flow reconciliation 4 th Quarter 2011 Cash Flow Overview |
![]() Solid Performance in a Turbulent Year 13 See appendix for Adjusted EBITDA reconciliations |
![]() 2011 Actions Compensate for Significant Headwinds 14 See appendix for Adjusted Income reconciliation Income from Continuing Operations excluding Restructuring & Other Special Items ($ millions) |
![]() 2011 Cash from Ops $2.2 billion 2011 Cash on Hand $1.9 billion ($ Millions) 2010 2011 Net Income $392 $805 DD&A $1,451 $1,481 Change in Working Capital $9 ($60) Pension Contributions ($113) ($336) Taxes / Other Adjustments $522 $303 Cash from Operations $2,261 $2,193 Dividends to Shareholders ($125) ($131) Change in Debt ($675) $255 Distributions to Noncontrolling Interest ($256) ($257) Contributions from Noncontrolling Interest $162 $169 Other Financing Activities ($58) $26 Cash from Financing Activities ($952) $62 Capital Expenditures ($1,015) ($1,287) Other Investing Activities ($257) ($565) Cash from Investing Activities ($1,272) ($1,852) 15 2010 FCF $1.2 billion 2011 FCF $906 million See appendix for Free Cash Flow reconciliation Full Year 2011 Cash Flow Overview |
![]() Generates $1.1B Cash Sustainable Reductions Maintained in Days Working Capital 16 16 Days Working Capital Reduction 4Q 2009 4Q 2010 4Q 2011 4Q 2008 Days Working Capital: Sustained Improvements |
![]() 2011 Cash Sustainability Financial Targets and Actual Performance Alcoa Continues to Meet Our Financial Targets 17 *Target is to be free cash flow positive. See appendix for Free Cash Flow reconciliation |
![]() Balance Sheet Is Strong: Alcoa Enters 2012 Managing for Cash 18 See appendix for Free Cash Flow reconciliation |
![]() Alcoa Meets Required Funding Status With Cash and Equity 19 |
![]() Alcoa Enters 2012 Managing for Cash: Cash Sustainability 20 3 Strategic Priorities & Key Levers of Cash Sustainability Program 2012 |
![]() Working Capital DWC reduction Operational Targets Financial Targets Swift Action Taken: Improved Cost Structure and Balance Sheet New Aggressive Targets to Maximize Cash Through 2012 21 Capacity Optimization Productivity Gains Cost savings in 2012 Controlled Overhead Cost savings in 2012 Positive Free Cash Flow Disciplined Capital Spend Sustaining Capex Growth Capex Saudi Arabia JV Maintain Capital Structure Debt-to-Capital Ratio 30-35% $725M $625M $350M $800M $50M 1.5 days 531 kmt closed or curtailed |
![]() Klaus Kleinfeld Chairman and Chief Executive Officer |
![]() 2011 YEAR IN REVIEW 23 |
![]() 15% 1% 6% 10% 15% 10% 3% 4% 5.3 3.3 1.8 1.0 0.9 China Europe North America Asia ex. China Other India Brazil Russia 19.0 6.7 5.7 2011 Forecast 2010 Global Demand Growth Rate: 13 % 2011 Global Demand Growth Rate 10% vs. 2010 (2011 ex China: 7%) *Other consists of: Middle East, Latin America ex Brazil and Rest of the World 2011 Projected Primary Aluminum Consumption (mmt) and Growth Rates (%) by Region Global Demand Remains Strong, 2H11 Experienced Slowdown 43.7 2011 Estimated Consumption 24 |
![]() Overall Supply/Demand Balance Meets Projections 25 Primary Aluminum Source: Alcoa estimates, Brook Hunt, CRU, CNIA, IAI (000 mt) China Rest of World Supply 17,800 26,000 Demand (19,000) (24,650) Net Balance (1,200) 1,350 Alumina (000 mt) China Rest of World Supply 34,100 52,200 Demand (34,100) (52,200) Net Balance 0 0 2011 Supply/Demand Balance (in kmt) |
![]() Solid Performance in a Turbulent Year 26 See appendix for Adjusted EBITDA reconciliations |
![]() Leveraging Our Strategic Growth Investments Juruti, Brazil – Bauxite Mine Sao Luis – Refinery Estreito – Hydro Dam Strategic Investments: Driving Profitable Growth 27 Saudi Arabia Joint Venture 30% Cash Cost Reduction At Nameplate Capacity Lowest Cost Integrated Facility 277 MW by 2012 On Time On Budget |
![]() GRP Growth Projects Capturing Global Opportunity 28 Russia Grows Profitably China Positioned For Growth Davenport Growth Capacity utilization will reach 70% by 2012 Key domestic supplier into growing markets Positive EBITDA in 2011, focusing on differentiation End & Tab Line, Samara Bohai Flat Rolled Products Davenport Rolling Mill $300M investment to meet rising US auto demand Capturing 7.5x increase in auto sheet demand 2011-2020 Growing capacity to support higher aerospace build rates Improving cost position Improving mix of products 23% YOY increase in volume $150 million turnaround in Russia profit from 2008 |
![]() Innovation and Acquisitions Drive EPS Profitable Growth 29 Innovative Solutions Fastener Acquisitions Expand global aerospace fastener footprint 4% pt increase in EBITDA margins 4% - 7% market share gains across different product categories Traco Most comprehensive product portfolio in the industry Increased North America commercial windows share gains by 18% in 2011 Incremental revenue of $75M in 2011 Bolt On Acquisitions >90% of fastening solutions are specialty fasteners; 55% patented or proprietary Product designs that provide solutions: 3D Multi-wall airfoil cooling • Customized cooling • Improves heat transfer • Higher firing temperature capability EcoClean 10,000 sq ft pollution reduction = 80 trees per day 14” Wide base wheels vs. dual steel wheels: 1,350 lbs lighter = 3% - 5% fuel savings |
![]() Achieved 2011 Financial Targets Met Aggressive Targets for Third Consecutive Year 30 • Sustaining Capex • Growth Capex • Saudi Arabia JV • Debt to Capital • Free Cash Flow Target: $1.0b Actual: $924m Target: $500m Actual: $363m Target: $400m Actual: $249m Target: 30-35% Actual: 35% Target: $0 Actual: $906m |
![]() 2012 OUTLOOK 31 |
![]() 2012 Market Conditions 32 32 Alcoa End Markets: Current Assessment of 2012 vs. 2011 Source: Alcoa analysis |
![]() 0% 6% 3% 2012 15% 12% 1% 3% 10% 10% 5% 9% 10% 4% 4% 2011 5% China Europe North America Asia ex. China Other India Brazil Russia 21.3 6.7 5.9 5.8 3.4 1.9 1.0 0.9 2011 Forecast 2012 Forecast 2011 Global Demand Growth Rate: 10 % 2012 Global Demand Growth Rate 7% vs. 2011 (2012 ex China: 4 %) *Other consists of: Middle East, Latin America ex Brazil and ROW 2012 Projected Primary Aluminum Consumption (mmt) Growth Rates (%) by Region 2012 Demand Growth Continues, But at a Slower Pace 47.0 2012 Estimated Consumption 33 15% |
![]() Inventories 4 Days Higher Year-on-Year Premiums Off Highs But Strong Historically Premiums Decline But Remain Strong, Inventory Increases 34 $112 /MT $170 /MT $163 /MT Source: Alcoa estimates, LME, SHFE, IAI, Marubeni, Platt’s Metals Week and Metal Bulletin LME at 40 days Non-LME at 17 days Global Inventories Rose 4 days vs. 3Q’11 57 days of consumption Regional Premiums and Aluminum Inventories |
![]() Demand Slowdown, Shift in Ownership Increases LME Inventories 35 Off-warrant China Japan Port Producer-held LME on-warrant Total Global Inventories (mmt) Source: Alcoa analysis 9.4 9.8 |
![]() 2012 Primary Aluminum Moves into Deficit, Alumina Balanced 36 Primary Aluminum Source: Alcoa estimates, Brook Hunt, CRU, CNIA, IAI (000 mt) China Rest of World 2011 Production Run Rate 17,800 26,000 2012 Production Additions 3,750 700 2012 Capacity Curtailments (1,100) (700) Total Supply 20,450 26,000 Demand (21,300) (25,750) Net Balance (850) 250 Alumina (000 mt) China Rest of World Supply 36,700 57,200 Demand (39,200) (54,700) Net Balance (2,500) 2,500 Import/(Exports) 2,500 (2,500) Net Balance 0 0 2012E Supply/Demand Balance (in kmt) |
![]() Chinese Primary Metal Production by Full Operating Cost (million, tonnes) Unprofitable Smelter Production by Province (million, tonnes) Estimate More Than 1/3 of Chinese Smelters Operating Under Water at End of 2011 * 17% VAT inclusive in the price and cost ** Full operating cost excludes depreciation and capital charge 37 Source: CRU, AMM, Aladdiny, Alcoa analysis Henan Guizhou Yunnan Sichuan Shandong Guangxi Shaanxi Liaoning Zhejiang Unprofitable Costs At Or Above SHFE $2,400 5.7MnT, 32% Profitable Costs Below SHFE $2,400 12.1MnT, 68% |
![]() Aluminum Continues to Be an Attractive Asset Class Sources: Bloomberg, Dow UBS, Reuters, Marketwatch 38 Asset Allocation By Commodity Sector Dow UBS Commodity Index $90B Composition of Base Metal Sector |
![]() Macro Environment Putting Downward Pressure on Prices 39 Sources: Bloomberg, *Confidence figures set at 100 in January 2011 for comparability ; 1 EC Commission EU Confidence, 2 National Bureau of Statistics China Consumer Confidence, 3 University of Michigan Consumer Sentiment . PMI: Institute for Supply Management , Markit, China Federation of Logistics & Purchasing |
![]() Combination of Factors Signals Likely Pricing Rebound 7% global aluminum demand growth in 2012 Primary aluminum balance moves to deficit Aluminum continues to be an attractive asset class Macro economic indicators showing positive signals 40 |
![]() Taking Decisive Action With Cash Sustainability Program 41 3 Strategic Priorities & Key Levers of Cash Sustainability Program 2012 |
![]() Maximize cash position for ramp down and ramp up, considering: • Operational flexibility • Power flexibility • Repowering impact • Community impact Smelting: Utilize material in inventory to reline, but do not restart pots Targeted smaller curtailments based upon cost & strategic situation Full curtailment of selected plants Permanent shutdowns of selected plants Curtailment Steps Production Curtailments: Tiered Approach Guiding Principle Curtailments Improve Cost Position and Competitiveness 42 Portovesme Dependent on business conditions Tennessee Rockdale (2 lines) Curtailment: 5% Shutdown: 7% Refinery output matched to curtailments and market conditions La Coruña Avilés |
![]() Working Capital DWC reduction Operational Targets Financial Targets Swift Action Taken: Improved Cost Structure and Balance Sheet New Aggressive Targets to Maximize Cash Through 2012 43 Capacity Optimization Productivity Gains Cost savings in 2012 Controlled Overhead Cost savings in 2012 Positive Free Cash Flow Disciplined Capital Spend Sustaining Capex Growth Capex Saudi Arabia JV Maintain Capital Structure Debt to Capital Ratio 30-35% $725M $625M $350M $800M $50M 1.5 days 531 kmt closed or curtailed |
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![]() Additional Information Kelly Pasterick Director, Investor Relations Alcoa 390 Park Avenue New York, NY 10022-4608 Telephone: (212) 836-2674 www.alcoa.com 45 |
![]() Annual Sensitivity Summary 46 Currency Annual Net Income Sensitivity +/- $100/MT = +/- $220 million LME Aluminum Annual Net Income Sensitivity Australian $ +/- $11 million per 0.01 change in USD / AUD Brazilian $ +/- $ 3 million per 0.01 change in BRL / USD Euro € +/- $ 2 million per 0.01 change in USD / EUR Canadian $ +/- $ 5 million per 0.01 change in CAD / USD Norwegian Kroner +/- $ 5 million per 0.10 change in NOK / USD |
![]() Reconciliation of Effective Tax Rate 47 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. ($ in millions) 4Q’11 2011 (Loss) income from continuing operations before income taxes ($239) $1,063 (Benefit) provision for income taxes ($74) $255 Effective tax rate as reported 31.0% 24.0% Discrete tax charges (benefits) $11 ($2) (Benefit) provision for income taxes excluding discrete tax items ($85) $257 Effective tax rate excluding discrete tax items 35.6% 24.2% |
![]() Revenue Change by Market 5% (2%) (15%) (8%) (15%) 1% (17%) (7%) (4%) (6%) 21% 22% (7%) 30% 2% (6%) 2% (8%) 12% 1% 4Q’11 Third-Party Revenue Sequential Change Year-Over-Year Change 48 |
![]() Reconciliation of ATOI to Consolidated Net Income (Loss) Attributable to Alcoa (in millions) 4Q10 2010 1Q11 2Q11 3Q11 4Q11 2011 Total segment ATOI $ 409 $ 1,424 $ 555 $ 635 $ 462 $ 241 $ 1,893 Unallocated amounts (net of tax): Impact of LIFO 3 (16) (24) (27) 2 11 (38) Interest expense (76) (321) (72) (106) (81) (81) (340) Noncontrolling interests (34) (138) (58) (55) (53) (28) (194) Corporate expense (94) (291) (67) (76) (76) (71) (290) Restructuring and other charges 8 (134) (6) (22) (7) (161) (196) Discontinued operations – (8) (1) (4) – 2 (3) Other 42 (262) (19) (23) (75) (104) (221) Consolidated net income (loss) attributable to Alcoa $ 258 $ 254 $ 308 $ 322 $ 172 $ (191) $ 611 49 |
![]() Reconciliation of Adjusted Income 50 |
![]() Reconciliation of Free Cash Flow 51 (in millions) Quarter ended Year ended December 31, 2010 September 30, 2011 December 31, 2011 December 31, 2008 December 31, 2009 December 31, 2010 December 31, 2011 Cash provided from operations $ 1,370 $ 489 $ 1,142 $ 1,234 $ 1,365 $ 2,261 $ 2,193 Capital expenditures (365) (325) (486) (3,438) (1,622) (1,015) (1,287) Free cash flow $ 1,005 $ 164 $ 656 $(2,204) $ (257) $ 1,246 $ 906 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. |
![]() Reconciliation of Alcoa Adjusted EBITDA 52 |
![]() Reconciliation of Alumina Adjusted EBITDA 53 |
![]() Reconciliation of Primary Metals Adjusted EBITDA 54 |
![]() Reconciliation of Flat-Rolled Products Adjusted EBITDA 55 |
![]() Reconciliation of Engineered Products and Solutions Adjusted EBITDA 56 |
![]() Reconciliation of Net Debt 57 (in millions) Quarter ended December 31, 2008 September 30, 2011 December 31, 2011 Short-term borrowings $ 478 $ 57 $ 62 Commercial paper 1,535 107 224 Long-term debt due within one year 56 489 445 Long-term debt, less amount due within one year 8,509 8,658 8,640 Total debt 10,578 9,311 9,371 Less: Cash and cash equivalents 762 1,332 1,939 Net debt $ 9,816 $ 7,979 $ 7,432 Net debt is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because management assesses Alcoa’s leverage position after factoring in available cash that could be used to repay outstanding debt. |