Howmet Aerospace (HWM) 8-K AA - Q1 2015 Alcoa Inc Earnings Call

1

st

Quarter

Earnings

Conference

12

April 8, 2015

[Alcoa logo]

Exhibit 99.2

Important Information

2

[Alcoa logo]

This

communication

contains

statements

that

relate

to

future

events

and

expectations

and

as

such

constitute

forward-looking

statements

within

the

meaning

of

the

Private

Securities

Litigation

Reform

Act

of

1995.

Forward-looking

statements

include

those

containing

such

words

as

“anticipates,”

“believes,”

“could,”

“estimates,”

“expects,”

“forecasts,”

“intends,”

“may,”

“outlook,”

“plans,”

“projects,”

“seeks,”

“sees,”

“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,

supply/demand

balances,

and

growth

opportunities

for

aluminum

in

automotive,

aerospace,

and

other

applications;

targeted

financial

results

or

operating

performance;

statements

about

Alcoa’s

strategies,

outlook,

and

business

and

financial

prospects;

and

statements

regarding

the

acceleration

of

Alcoa’s

portfolio

transformation,

including

the

expected

benefits

of

acquisitions,

including

the

completed

acquisition

of

the

Firth

Rixson

business

and

TITAL,

and

the

pending

acquisition

of

RTI

International

Metals,

Inc.

(RTI).

These

statements

reflect

beliefs

and

assumptions

that

are

based

on

Alcoa’s

perception

of

historical

trends,

current

conditions

and

expected

future

developments,

as

well

as

other

factors

management

believes

are

appropriate

in

the

circumstances.

Forward-looking

statements

are

subject

to

a

number

of

risks,

uncertainties,

and

other

factors

and

are

not

guarantees

of

future

performance.

Important

factors

that

could

cause

actual

results

to

differ

materially

from

those

expressed

or

implied

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

and

premiums,

as

applicable,

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

aerospace,

automotive,

commercial

transportation,

building

and

construction,

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

or

the

unavailability

or

interruption

of

energy

supplies;

(f)

increases

in

the

costs

of

other

raw

materials;

(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

and

improving

margins

in

its

Global

Rolled

Products

and

Engineered

Products

and

Solutions

segments)

anticipated

from

its

restructuring

programs

and

productivity

improvement,

cash

sustainability,

technology,

and

other

initiatives;

(h)

Alcoa’s

inability

to

realize

expected

benefits,

in

each

case

as

planned

and

by

targeted

completion

dates,

from

acquisitions

(including

achieving

the

expected

levels

of

synergies,

revenue

growth,

or

EBITDA

margin

improvement),

sales

of

assets,

closures

or

curtailments

of

facilities,

newly

constructed,

expanded,

or

acquired

facilities,

or

international

joint

ventures,

including

the

joint

venture

in

Saudi

Arabia;

(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,

imposition

of

sanctions,

expropriation

of

assets,

or

other

events

beyond

Alcoa’s

control;

(j)

the

outcome

of

contingencies,

including

legal

proceedings,

government

or

regulatory

investigations,

and

environmental

remediation;

(k)

the

impact

of

cyber

attacks

and

potential

information

technology

or

data

security

breaches;

(l)

failure

to

receive

the

required

votes

of

RTI’s

shareholders

to

approve

the

merger

of

RTI

with

Alcoa;

(m)

failure

to

receive,

delays

in

the

receipt

of,

or

unacceptable

or

burdensome

conditions

imposed

in

connection

with,

all

required

regulatory

approvals

of

the

acquisition

of

RTI,

or

the

failure

to

satisfy

the

other

closing

conditions

to

the

acquisition;

(n)

the

risk

that

acquisitions

(including

Firth

Rixson,

TITAL

and

RTI)

will

not

be

integrated

successfully

or

such

integration

may

be

more

difficult,

time-consuming

or

costly

than

expected;

(o)

the

possibility

that

certain

assumptions

with

respect

to

RTI

or

the

acquisition

could

prove

to

be

inaccurate,

including

the

expected

timing

of

closing;

(p)

the

loss

of

customers,

suppliers

and

other

business

relationships

as

a

result

of

acquisitions,

competitive

developments,

or

other

factors;

(q)

the

potential

failure

to

retain

key

employees

of

Alcoa

or

acquired

businesses;

(r)

the

effect

of

an

increased

number

of

Alcoa

shares

outstanding

as

a

result

of

the

acquisition

of

RTI;

(s)

the

impact

of

potential

sales

of

Alcoa

common

stock

issued

in

the

RTI

acquisition;

(t)

failure

to

successfully

implement,

to

achieve

commercialization

of,

or

to

realize

expected

benefits

from,

new

or

innovative

technologies,

equipment,

processes,

or

products,

including

the

Micromill,

innovative

aluminum

wheels,

and

advanced

alloys;

and

(u)

the

other

risk

factors

summarized

in

Alco

a’s

Form

10-K

for

the

year

ended

December

31,

2014,

and

other

reports

filed

with

the

Securities

and

Exchange

Commission.

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.

Market

projections

are

subject

to

the

risks

discussed

above

and

other

risks

in

the

market.

Nothing

on

Alcoa’s

website

is

included

or

incorporated

by

reference

herein.

Forward-Looking Statements

Important Information (continued)

3

[Alcoa logo]

Non-GAAP Financial Measures

Additional Information and Where to Find It

Participants in the Solicitation

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

accounting

principles

generally

accepted

in

the

United

States

of

America

(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.

Any

reference

to

historical

EBITDA

means

adjusted

EBITDA,

for

which

we

have

provided

calculations

and

reconciliations

in

the

Appendix.

Alcoa

has

not

provided

a

reconciliation

of

any

forward-looking

non-GAAP

financial

measure

to

the

most

directly

comparable

GAAP

financial

measure,

due

primarily

to

variability

and

difficulty

in

making

accurate

forecasts

and

projections,

as

not

all

of

the

information

necessary

for

a

quantitative

reconciliation

is

available

to

Alcoa

without

unreasonable

effort.

This

communication

does

not

constitute

an

offer

to

sell

or

the

solicitation

of

an

offer

to

buy

any

securities

or

a

solicitation

of

any

vote

or

approval

nor

shall

there

be

any

sale

of

securities

in

any

jurisdiction

in

which

such

offer,

solicitation

or

sale

would

be

unlawful

prior

to

registration

or

qualification

under

the

securities

laws

of

any

such

jurisdiction.

The

proposed

business

combination

transaction

between

Alcoa

and

RTI

will

be

submitted

to

the

shareholders

of

RTI

for

their

consideration.

Alcoa

has

filed

with

the

Securities

and

Exchange

Commission

(SEC)

a

Registration

Statement

on

Form

S-4

(Registration

No.

333-203275)

containing

a

preliminary

proxy

statement

of

RTI

that

also

constitutes

a

prospectus

of

Alcoa.

These

materials

are

not

yet

final

and

will

be

amended.

RTI

will

provide

the

proxy

statement/prospectus

to

its

shareholders

after

the

registration

statement

has

become

effective.

Alcoa

and

RTI

also

plan

to

file

other

documents

with

the

SEC

regarding

the

proposed

transaction.

This

document

is

not

a

substitute

for

any

prospectus,

proxy

statement

or

any

other

document

which

Alcoa

or

RTI

may

file

with

the

SEC

in

connection

with

the

proposed

transaction.

INVESTORS

AND

SECURITY

HOLDERS

OF

RTI

ARE

URGED

TO

READ

THE

PROXY

STATEMENT/PROSPECTUS

AND

ANY

OTHER

RELEVANT

DOCUMENTS

THAT

WILL

BE

FILED

WITH

THE

SEC

CAREFULLY

AND

IN

THEIR

ENTIRETY

WHEN

THEY

BECOME

AVAILABLE

BECAUSE

THEY

WILL

CONTAIN

IMPORTANT

INFORMATION

ABOUT

THE

PROPOSED

TRANSACTION.

You

may

obtain

copies

of

all

documents

filed

with

the

SEC

regarding

this

transaction,

free

of

charge,

at

the

SEC’s

website

(www.sec.gov).

You

may

also

obtain

these

documents,

free

of

charge,

from

Alcoa’s

website

(www.alcoa.com).

You

may

also

obtain

these

documents,

free

of

charge,

from

RTI’s

website

(www.rtiintl.com).

Alcoa,

RTI,

and

certain

of

their

respective

directors,

executive

officers

and

other

members

of

management

and

employees

may

be

deemed

to

be

participants

in

the

solicitation

of

proxies

from

RTI

shareholders

in

connection

with

the

proposed

transaction.

Information

regarding

the

persons

who

may,

under

the

rules

of

the

SEC,

be

deemed

participants

in

the

solicitation

of

RTI

shareholders

in

connection

with

the

proposed

transaction

is

set

forth

in

the

proxy

statement/prospectus.

You

can

find

information

about

Alcoa’s

executive

officers

and

directors

in

its

definitive

proxy

statement

filed

with

the

SEC

on

March

19,

2015,

its

Annual

Report

on

Form

10-K

filed

with

the

SEC

on

February

19,

2015

and

in

the

above-referenced

Registration

Statement

on

Form

S-4.

You

can

find

information

about

RTI’s

executive

officers

and

directors

in

the

proxy

statement/prospectus

and

in

RTI’s

Annual

Report

on

Form

10-K

filed

with

the

SEC on

February

26,

2015.

You

can

obtain

free

copies

of

these

documents

from

Alcoa

and

RTI

as

described

in

the

preceding

paragraph.

Klaus Kleinfeld

Chairman and Chief Executive Officer

4

April 8, 2015

[Alcoa logo]

Strong Operational Results

+

Transformation Fully on Track

Note: Close of RTI transaction expected in 2-5 months subject to regulatory approvals and RTI shareholder approval.

Delivering Strong

Operational

Performance

1Q 2015 Overview

Portfolio

Transformation

Fully On Track

Revenue

up

7%

Y-O-Y

($5.8B):

Driven

primarily

by

organic

growth

in

auto

&

aero;

positive

market

factors

partially

offset

by

capacity

reductions

and

portfolio

actions

Profits

substantially

up

Downstream:

ATOI

of

$191

million,

first

quarter

record

result

Midstream:

ATOI

of

$34

million,

challenge

in

can

sheet

+

record

auto

shipments

Upstream:

Improved

Performance

–

14

Consecutive

Quarters

Alumina

segment:

ATOI

of

$221

million,

more

than

double

Y-O-Y

Primary

Metals

segment:

ATOI

of

$187

million,

+

$200

million

Y-O-Y

Productivity:

$238

million

across

all

segments

Cash

on

Hand:

$1.2

billion

Integration

of

Firth

Rixson

on

track

–

Doubles

Aero-Engine

Content

Completed

TITAL

acquisition

–

Titanium/aluminum

structural

castings

in

Europe

Announced

RTI

acquisition

–

Titanium

+

Complements

mid

and

downstream

Value

Chain

Expected

to

close

in

2

to

5

months

Sold

Belaya

Kalitva

(Russia

rolling

mill)

Secured

75%

of

long

term

gas

needs

for

Western

Australia

refineries

Announced

12-month

capacity

review:

2.8

MMT

Refining,

500

kmt

Smelting

São

Luís

(Alumar)

smelting

curtailment

of

remaining

74

kmt

Suriname

refining

curtailment

of

443

kmt;

exploring

sale

to

Suriname

government

[Alcoa logo]

William Oplinger

Executive Vice President and Chief Financial Officer

6

April 8, 2015

[Alcoa logo]

Income Statement Summary

7

See appendix for Adjusted Income reconciliation.

$ Millions, except aluminum prices and per-share amounts

1Q14

4Q14

1Q15

Prior Year

Change

Sequential

Change

Realized Aluminum Price ($/MT)

$2,205

$2,578

$2,420

$215

($158)

Revenue

$5,454

$6,377

$5,819

$365

($558)

Cost of Goods Sold

$4,495

$4,973

$4,443

($52)

($530)

COGS % Revenue

82.4%

78.0%

76.4%

(6.0 % pts.)

(1.6 % pts.)

Selling,

General Administrative, Other

$236

$271

$232

($4)

($39)

SGA % Revenue

4.3%

4.2%

4.0%

(0.3 % pts.)

(0.2 % pts.)

Other

(Income) Expenses, Net

$25

($6)

($12)

($37)

($6)

Restructuring and Other Charges

$461

$388

$177

($284)

($211)

Effective Tax Rate

28.1%

51.3%

47.0%

18.9% pts.

(4.3% pts.)

EBITDA

$672

$1,073

$1,089

$417

$16

Net (Loss) Income

($178)

$159

$195

$373

$36

Net (Loss) Income Per Diluted Share

($0.16)

$0.11

$0.14

$0.30

$0.03

Income

per Diluted

Share excl

Special Items

$0.09

$0.33

$0.28

$0.19

($0.05)

[Alcoa logo]

Special Items

1)  Total restructuring-related charges in 1Q15 of $158 million  (88 percent non-cash,  12 percent cash)                                       

See appendix for Adjusted Income reconciliation       

8

[Alcoa logo]

$ Millions, except per-share amounts

1Q14

4Q14

1Q15

Income Statement

Classification

Segment

Net (Loss) Income

($178)

$159

$195

Net (Loss) Income Per Diluted Share

($0.16)

$0.11

$0.14

Restructuring

-Related

1

($296)

($200)

($158)

Restructuring

and Other

Charges/COGS

Corporate / All

Tax Items

$22

($53)

($4)

Income Taxes

Corporate

Acquisition Costs

-

($22)

($7)

SG&A/Interest Expense

Corporate

Mark-to-Market Energy Contracts

-

$2

$1

Other (Income) Expenses, Net

Corporate

Surgold

Gain

$11

-

-

Other Expenses, Net

Alumina

Saudi JV Potline

Impact/Massena Fire

($13)

-

-

COGS

/ Other Income, Net

Primary Metals

Special Items

($276)

($273)

($168)

Net Income excl Special Items

$98

$432

$363

Net

Income

per Diluted

Share excl Special Items

$0.09

$0.33

$0.28

Operating results more than triple Y-O-Y on Performance and Market factors

See appendix for Adjusted Income reconciliation

9

Net Income excluding Special Items ($ Millions)

Market

+$153

Performance

+$243

Cost Headwinds

-$131

10

156

45

42

97

1

55

363

98

-110

Raw

Materials

Energy

-31

Productivity

Price

/ Mix

Volume

Currency

API

LME

1Q 14

1Q 15

Cost

Increases

/ Other

[Alcoa logo]

EPS:  Higher volumes, productivity offset currency and cost headwinds

10

[Alcoa logo]

$ Millions

1Q 14

4Q 14*

1Q 15*

3

Party Revenue ($ Millions)

1,443

1,566

1,689

ATOI ($ Millions)

189

165

191

EBITDA Margin

22.2%

18.9%

20.1%

1

st

Quarter Results

1

st

Quarter Business Highlights

2

nd

Quarter Outlook

1

st

Quarter Performance Bridge

1Q15 Actual and 2Q15 Outlook –

Engineered Products and Solutions

$53

$22

$191

$189

1Q 15

Cost

Increases

-$45

Productivity

Price / Mix

-$18

Volume

Currency

-$10

1Q 14

* Includes Firth Rixson. EPS Base Business EBITDA Margin: 20.6% for 4Q14, 21.5% for 1Q15

Revenue

up

17%

year-over-year,

EBITDA

margin

of

20.1%

Revenue

growth

driven

by

Firth

Rixson

and

share

gains

in

Aerospace,

Heavy

Duty

Truck

and

N.A.

Non-Residential

Construction

Unfavorable

currency

impact

due

to

stronger

U.S.

Dollar

Year-over-year

improvement

driven

by

productivity,

strong

Aerospace,

Commercial

Transportation

revenues

Aerospace

market

remains

strong

Continued

recovery

in

N.A.

Non-Residential

Construction;

European

weakness

continues,

outlook

varies

across

regions

Strong

N.A.

Heavy

Duty

Truck

build

rates,

partially

offset

by

Europe

Share

gains

through

innovation

and

productivity

continue

across

all

sectors

ATOI

is

expected

to

increase

3%

to

8%

year-over-year,

including

$13m

of

currency

pressure

rd

See appendix for EBITDA reconciliation

GRP = Global Rolled Products

11

GRP: Productivity and record Auto offset by cost increases and pricing

[Alcoa logo]

$ Millions

1Q 14

4Q 14

1Q 15

3

Party Revenue ($ Millions)

1,677

1,888

1,621

ATOI ($ Millions)

59

71

34

EBITDA/MT ($)

315

317

280

1

Quarter Business Highlights

2

Quarter Outlook

1

Quarter Performance Bridge

1Q15 Actual and 2Q15 Outlook –

Global Rolled Products

1

Quarter Results

Price / Productivity

Mix

Volume

Currency

LME

1Q14

1Q15

Portfolio

Actions

Cost

Increases

/ Other

Energy

Strong

productivity

and

record

Auto

shipments

Unfavorable

metal

price

lag

impact

Russia

impacted

by

higher

metal

premiums

Continued

pricing

pressures

in

Packaging

Cost

increases

due

to

Micromill

TM

R&D

and

Saudi

JV

ramp-up

1Q14

costs

associated

with

portfolio

actions

did

not

repeat

Auto

demand

expected

to

remain

strong,

combined

with

seasonal

volume

increases

in

Packaging

Russia

impacts

and

negative

packaging

price

pressures

continue ($19M)

Costs

associated

with

ramp-up

of

Saudi

Arabia

rolling

mill

and

Micromill

TM

R&D

($13m)

At

current

prices,

metal

lag

will

be

a

negative

impact

of

$15m

ATOI

is

expected

to

decrease

30%

year-over-year,

assuming

current

metal

price

and

currency

rates

rd

st

st

nd

st

Alumina:  Stronger US dollar and lower energy costs

12

[Alcoa logo]

1Q15 Actual and 2Q15 Outlook –

Alumina

1

Quarter Results

1

Quarter Business Highlights

Quarter Performance Bridge

1Q15

Jamalco

sale

Cost

Decreases

/ Other

Energy

Prod

-

uctivity

Price

/ Mix

Volume

Currency

API

LME

4Q14

1Q 14

4Q 14

1Q 15

Production (kmt)

4,172

4,161

3,933

3

Party Shipments (kmt)

2,649

2,928

2,538

3

Party Revenue ($ Millions)

845

1,017

887

3

Party Price ($/MT)

314

343

344

92

178

221

2

Quarter Outlook

Production

down

due

to

Jamaica

refinery

sale

and

fewer

days

Favorable

currency

movements

in

production

regions

Energy

benefit

from

lower

oil

and

gas

prices,

and

San

Ciprian

refinery conversion to natural gas

Lower

LME-based

contract

prices

~75%

of

3 

party

shipments

on

API

or

spot

pricing

for

2015

API

pricing

follows

30-day

lag;

LME

pricing

follows

60-day

lag

Production

down

74

kmt

due

to

Suriname

curtailment,

offset

by one

additional production day

Saudi

Arabia

refinery

start-up

costs

will

continue

Maintenance

costs

will

increase

$9M

for

scheduled

outages

Productivity,

volume,

and

lower

energy

prices

will

offset

cost

increases

st

st

st

nd

rd

rd

rd

$ Millions

1

ATOI ($ Millions)

rd

Primary Metals:  Lower LME prices and energy headwinds

13

* Based on published prices as of April 1, 2015

[Alcoa logo]

$ Millions

1Q15 Actual and 2Q15 Outlook –

Primary Metals

1

Quarter Results

1

Quarter Business Highlights

1

Quarter Performance Bridge

$9

$7

$2

$4

$22

1Q15

$187

Mt Holly

sale

-$4

Cost

Decreases

/ Other

Energy

-$19

Prod-

uctivity

Price

/ Mix

Volume

Currency

API

-$17

LME

-$84

4Q14

$267

1Q 14

4Q 14

1Q 15

Production (kmt)

839

731

711

3

Party Shipments (kmt)

617

637

589

3

Party Revenue ($ Millions)

1,424

1,852

1,572

3

Party Price ($/MT)

2,205

2,578

2,420

ATOI ($ Millions)

(15)

267

187

2

Quarter Outlook

Unfavorable

LME

pricing

driver

to

sequential

decline

Favorable

currency

movements

in

production

regions

Lower

energy

sales

prices

in

Brazil;

lower

energy

cost

in

Spain

Production

down

due

to

Mt.

Holly

sale

Cost

decreases

due

to

closed

locations

and

lower

overhead

Pricing

follows

a

15-day

lag

to

LME

Production

down

18kmt

due

to

Sao

Luis

curtailment,

partially

offset

by

one

additional

production

day

Regional

premium

decline

impact

of

$65m*

Net

Energy

impact

slightly

positive;

lower

costs

and

additional

Brazil

sales

offset

lower

energy

sales

in

other

regions

Productivity

and

favorable

energy

will

offset

impacts

of

lower

volume

and

other

cost

increases

rd

rd

rd

st

st

nd

st

Organic DWC maintained year-over-year, acquisition adds 3 days

See appendix for days working capital reconciliation

14

[Alcoa logo]

6 days

lower

Average Days Working Capital since First Quarter 2010

2 days

lower

33

32

33

30

28

31

29

32

36

35

34

36

40

40

40

44

43

42

28

30

37

2 days

lower

3 days

higher

9 day

reduction

since 1Q10

2 days

lower

Acquisition (3 days)

Alcoa ex Acquisition (30 days)

30

1

st

Quarter Cash Flow Overview

15

See appendix for Free Cash Flow reconciliation

($ Millions)

1Q14

4Q14

1Q15

Net (Loss) Income before Noncontrolling

Interests

($197)

$114

$255

DD&A

$340

$336

$321

Change in Working Capital

($687)

$656

($595)

Pension Expense in Excess of Contributions

$18

$47

$37

Other Adjustments

($25)

$305

($193)

Cash from Operations

($551)

$1,458

($175)

Dividends to Shareholders

($33)

($56)

($54)

Change in Debt

($14)

($110)

$24

Net (Distributions)/Contributions from Noncontrolling

Interests

($15)

($36)

($29)

Other Financing Activities

$72

$21

$33

Cash from Financing Activities

$10

($181)

($26)

Capital Expenditures

($209)

($469)

($247)

Acquisitions/Divestitures/Asset Sales

-

($2,138)

($212)

Other Investing Activities

($31)

($46)

($6)

Cash from Investing Activities

($240)

($2,653)

($465)

Free Cash Flow

($760)

$989

($422)

Cash on Hand

$665

$1,877

$1,191

1Q14, 4Q14 & 1Q15 Cash Flow

[Alcoa logo]

16

LTM = last twelve months;  See appendix for Net Debt reconciliation

Maintained Strong Balance Sheet

1,543

1,939

1,861

1,437

1,877

1,191

1Q15

8,817

7,626

2014

8,852

7,432

2010

9,165

7,622

6,975

2013

6,882

8,319

2012

8,829

6,968

2011

9,371

(Millions)

Net Debt

Cash

Debt-to-LTM EBITDA

3.27

3.39

2.87

Debt, Net Debt, and Debt-to-LTM EBITDA

2.49

4.20

2.22

[Alcoa logo]

2015 Annual Financial Targets

Aggressive targets drive growth and operational performance in 2015

Deliver

Operational

Performance

Drive Productivity Gains of $900M

Process productivity

Procurement savings

Overhead cost reductions

Invest in the

Future; Actively

Manage the

Base

Manage Return-Seeking Capital of $750M

Control Sustaining Capital of $725M

Strengthen the

Balance Sheet

Generate $500M+ of Free Cash Flow

Attain 2.25 to 2.75 Debt-to-EBITDA

17

[Alcoa logo]

Market fundamentals remain strong

See appendix for full scale charts

18

[Alcoa logo]

Klaus Kleinfeld

Chairman and Chief Executive Officer

19

April 8, 2015

[Alcoa logo]

Another Strong year for Aerospace; Steady growth in Automotive

Source: Alcoa analysis

1) International Air Transport Association 2015 Expectations

20

[Alcoa logo]

Heavy Duty Truck –

Strong U.S., Weak China; Packaging Stable

Source: Alcoa analysis

21

[Alcoa logo]

Solid Commercial B&C Growth; Global Airfoil Market Improves

Source: Alcoa analysis

B&C  = Building and construction

22

[Alcoa logo]

Building a Lightweight Multi-Material

Innovation Powerhouse

Transforming Alcoa –

Creating Compelling Sustainable Value

Creating a Globally Competitive

Commodity Business

Increasing

share

in

exciting

growth markets                            

(e.g., aerospace, automotive, heavy duty truck and

trailer, building and construction)

Full

pipeline

of

innovative

products

and solutions

Using all growth levers

Shifting

mix

to

higher

value-add

Expanding multi-material,

technology

and

process

expertise

Increasing competitiveness,

mitigating

downside

risk

Optimizing

the

casthouse

value-add

portfolio

Shifting

pricing

to

reflect

market

fundamentals

Continuing to drive productivity

improvements

23

[Alcoa logo]

24

Organic and Inorganic Growth Expands Higher Value-Add Portfolio

[Alcoa logo]

Summary of Key Innovations, Growth Projects, and Inorganic Investments

25

Firth Rixson Enhances Leadership Position in Jet Engine Components

1) On track to reach 2019 gross synergy target of $105M offset by $5M integration costs (66% productivity, 26% procurement, 8%

overhead). 2) Growth from $1B in 2013 to $2B in 2019; 70% secured by long term agreement. AA = Alcoa; FR = Firth Rixson

[Alcoa logo]

Firth Rixson Strategic and Financial Benefits and Alcoa’s Expanded Jet Engine Suite

Portfolio Enhancing: Expands Jet Engine Suite

Multi-Material

Edge

Leading-Edge

Technology

Building

Capabilities

Financial

Benefits

Doubles Engine Content

(e.g. turbine blades & vanes, structural castings, rings,

disks, shafts and front fan blades)

Multi-Material

Ni and Ti-Al in hot section

Ti, Al and Steel in cold section

AA

Products

FR

Products

Enables

+

70°F

+

40%

combustion

efficiency

Critical

rotating

Disks

from

Superalloys

and

Titanium

alloys

One

of

the

largest,

most

advanced

closed-die

forge

presses

$40M

net

synergies

in

year

2;

$100M¹

net

in

year

5

Visibility

of

$1B

2

revenue

growth:

70%

secured

Global

leader

in

seamless

rolled

Rings

Largest

seamless

Rings

200”

in

diameter

Full

range

of

aero

Engine

Disks

(12”

to

53”

diameter)

Multi-Material

mix:

60%

Ni,

25%

Ti,

15%

Steel/Al

Integrated

Nickel

Supply

of

cast

stick,

bar

and

billet

Specialized

Isothermal

forgings

from

Powder

Metal

alloys

Can Produce >90% of

Structural and Rotating Components

2016E

$1.6B

revenue

$350M

EBITDA

Alcoa Advantage Track Record Drives Post-Merger Integration

1) 2009-2014 Productivity figures, pretax and pre-minority interest. 2009/2010 represent net productivity. 2011-2014 represent gross productivity.  

2)   Reflects 2009 –

2014. 3) Gross synergies of $44M offset by $4M integration costs.

DWC = Days Working Capital FCF = Free Cash Flow CT = Commercial Transportation.

26

[Alcoa logo]

190%    

deployed          

versus  2016E

synergy target

3

Alcoa Strategic Priorities

ALCOA ADVANTAGE

Creating value for all businesses

DISCIPLINED EXECUTION

Across all activities

Degrees of Implementation

methodology for rigorous

management from idea to cash

Talent

Purchasing

Customer

Intimacy

Operating

System

Technology

On Track to Deliver $40M Synergies in 2016

3

IT

Human Resources

Finance

Credit

Successful Execution Track Record

Operational Excellence

drive $7.9B of

Productivity

1

Sustainable DWC reduction:       

28 days 4Q14; -9 days since 4Q09

Generated $3B

FCF 2;

5

consecutive

years

of

achieving

positive FCF

Capital Allocation for Growth

Auto: Aluminum intensive vehicles

Aero: World’s first Al-Li fan blade

CT: World’s lightest wheel

Commercializing Innovation

3D Core Platform technology

Alcoa 951 bonding technology

MagnaForceTM

alloy

150%

deployed

Examples of Operational, Financial, and Productivity Execution and Expertise to Capture Firth Rixson Synergies

250%

deployed

200%

deployed

Operational Productivity $22M

titanium, nickel, and aluminum value chains

Productivity initiatives deployed through          

Alcoa daily management system

Procurement Savings $14M

e.g., Leverage existing contracts

Consolidate global supply base

Overhead Reductions $8M

e.g., Integrate shared services Center of  

Excellence

Update on Isothermal Press

Received isothermal forge, heat treat and testing

methods approval from customer and cleared for

qualification

Successfully forged 6 qualification batches for first

customer –

first revenue 2H 2015

PROFITABLE GROWTH

in every business

Business Programs that define:

3-year aspirations

Priority levers

Accountability

Standardized operating systems

e.g., Optimization of revert utilization across

27

Alcoa + RTI Combination Expands Titanium Customer Solutions

1) Growth from 14.5% in 2014 to 25.0% projected in 2019; 2) Projected revenue in 2019  3) Representative of mid and downstream

capabilities; not intended to reflect a market position.

[Alcoa logo]

~65%

of

$1.2B

2

revenue

supported

by

contracts

Strategic and Financial Benefits of RTI and Mid and Downstream Titanium Value Chain

Enhances

Offerings:

Expands

Ti,

Value-Add

Solutions

Plasma

and

Electron

Beam

melting

Titanium billetizing and mill products

Machining

and

subassembly

Production of near net shape components from

Titanium and Metal Matrix Composites powders through

cold and hot isostatic pressing

Multi-Material

Edge

Leading-Edge

Technology

Building

Capabilities

Intellectual

property

in

multi-Material

3-D

printing

(Ti, Ni, Steel and Al)

Closed

loop

scrap

processing

Financial

Benefits

Complements

Mid

and

Downstream

Value

Chain

Capabilities

3

None

Limited

Moderate

Significant

Full

Melting

(Ingot, Cast Slab)

Billetizing,

Rolling

(Mill Products)

Conversion

(Closed

-Die

Forging, Extruding,

Investment Casting)

Machining,

Subassembly

INGOT

PLATE

FORGING

MACHINING

+

$30M

net

synergies

in

year

2;

$100M

net

in

year

4

+10% point

1

growth

in EBITDA margins

Ti-Al

ingot

for

technically

advanced

Ti-Al

low

pressure

turbine

blades

2019E

$1.2B

revenue

25%

EBITDA

margin

Alcoa Advantages to Drive Synergies and Further Growth Opportunities

1) Figure reflects net synergies after $9M merger integration costs.

28

[Alcoa logo]

Examples of RTI Synergy Levers, Growth Technologies, and Expanding End Markets

Overhead

Cost

Reductions

$20M

Procurement

Savings

$20M

Growth

$25M

Process

Productivity

$44M

Expand selection of machined parts                            

(e.g., plate, forgings, extrusions)

Migrate from Ti ingot directed buy programs

Offer Ti

-Al for high-growth engine components

Integrate Shared Services Center of Excellence

Leverage Alcoa’s $18B global spend                            

(

e.g.,

commodities, production, maintenance supplies )

Standardize payment terms

Maximize internal metal supply

Decrease outsourced machining

Increase utilization of capacity                               

(e.g., melting, billetizing, rolling, machining)

Optimize revert metal loop

Finance

Credit

Meaningful RTI Synergies Identified

Direct

access

to

RTI Ti-Al ingot for

AA’s

investment

casting

and

forging

technology

Ti-Aluminide (Ti-Al)

Growth from Foundational Technologies

Upside from Additional End Market Potential

Information Technology

Human Resources

Operational and

commercial

expertise in additive

manufactured

part

production

Additive Mfg.

Manufacturer

in

minimally

invasive

surgical

tools

precision

machining

Medical

`

Attractive

titanium

and

steel

products for

production wells

Complementary

to

Alcoa’s

aluminum drilling

products

Oil & Gas

bed, multi-spindle

machining

subassemblies/kits

Machining

High-speed

long-

State-of-the-art

robotic

Flight

critical

Net

Synergies

$100M

1

30%

in

year

2

100%

in

year

4

Transitioning GRP Portfolio From Lower Margin Markets…

29

GRP = Global Rolled Products

[Alcoa logo]

Invest

in

$190M

Very

Thick

Plate

stretcher

Upgrading Portfolio to Drive Higher Profitability

15%

27%

42%

14%

27%

21%

38%

16%

Can Sheet Supply/Demand Dynamics and Actions to Shift Portfolio

Oversupply, Weaker Demand Weighs on Can Sheet

Result:

Compressed Margins and Lower Volumes

% of GRP Revenues

14A                 16E    

On track for              

$344/MT EBITDA or        

Higher by 2016

Shift to Higher Margin, Differentiated Products

to Drive GRP Y-o-Y Profit Lift in 2016 vs. 2015

Market Sector

Invest combined ~$600M in

auto sheet plant expansions

Sold 3 rolling mills in Spain

and France

Sold rolling mill in Russia

2 mills closed in Australia

Expand aseptic foil mill in

Brazil

Portfolio Actions

Aero/Defense

Transportation

Industrial

Packaging

31%

41%

69%

59%

Demand

Supply

Overcapacity

+

Convert

capacity

to

auto from

packaging

(US)

Declining

carbon-

ated

soft drink

(US)

+

Beer

growth (US &

China)

+

Conversion to Al

from steel (Europe)

…To Higher Growth and Higher Margin End Markets

Source: Automotive from Ducker Worldwide 2014

1)

Annual

Savings

=

((15,000

Hwy

Miles/Yr

÷

17

Hwy

MPG)

–

(15,000

Hwy

Miles/Yr

÷

26

Hwy

MPG))

x

$3/gal;

$2/gal

cost

=

$611

savings.

30

[Alcoa logo]

OEMs Need Fuel Economy…

U.S. Light Truck CAFE Targets (MPG)

…And Consumers Benefit

813

659

451

1,155

2018E

2020E

2016E

2015E

Aluminum Auto Demand Drivers, Alcoa Auto Sheet Investments and Revenue Growth 

North America Aluminum

Auto Sheet Demand (kMT)

~3x

$660

$1,050

$340

Projected Alcoa                      

Auto Sheet Revenues ($M)

Davenport Fully Operational

~3x

Lighter, less fuel consumption

Additional

payload/ towing capacity

(e.g., 700 lbs)

Faster

acceleration;

improved

braking

distance

9

MPG

$916/yr

savings

1

43.8

29.8

26.3

2025E

2016E

2014

+67%

Al auto

sheet

demand

expected to reach

>1MMT by 2020

2014A

2015E

2016E

Result:

Automotive

Revenues:

10%

of

GRP

in

2014

to

20%

in

2016E

Auto

Sheet

Shipments:

+65%

CAGR

(2013-16E)

Higher

Margins

and

Volumes

~2x

Auto Sheet Investments a Key Driver of Growth

Lightweighting Trend Accelerates Al Sheet Demand

•

•

•

31

Looking Forward: Alcoa Invents for Next-Generation Automotive

1) In late stage of development; 2) In early stage of development.

HSS = High Strength Steel

[Alcoa logo]

Breakthrough Al Alloy + Casting Technology

Stronger, Better, Faster: Win for the Customer and Alcoa

Micromill’s Innovation in Automotive Alloys, Value Proposition and Development Progress

Current alloys

(1)

High strength

(2)

Advanced impact

(2)

High formability

(1)

Advanced impact

: equivalent to

steel crash resistance at

30-40%

lighter

vs. HSS

Higher formability

: allows multiple

parts to

single piece

consolidation;

reduces

costs 4-

8%

vs.

ingot based Al

Higher strength

: can replace HSS

parts;

eliminates

dissimilar metal

joining issues;

reduces

weight

25-

35%

vs. HSS

2x

more

formable

, while

30% lighter

than HSS

Reduces

OEM

system cost

from

streamlined alloy portfolio

Attack share of

$3.5B

of

steel

auto

applications

20 day

rolling process

to 20 minutes

50% lower energy

use

1/4

the

footprint

of

conventional

mill

Completed

successful

customer trials

Qualification in

progress at first

customer

Executed

agreements to

qualify with

5

additional OEMs

First                             

commercial coil

Completed

In

Process

Exploring                      

Full Scale Capacity

Expansion Options

Micromill™

assembly

Sources: CRU and Alcoa analysis

API = Alumina Price Index

Commodity Strategy is Working: Lowering Costs and Enhancing Revenue

32

[Alcoa logo]

Lower Cost…

…

Enhance Revenue

Global Aluminum Cost Curve

Global Alumina Cost Curve

Key Commodity Business Metrics: 2010 and 2014 Actual and 2016 Targets

Alumina

Primary Metals

2010

2016

2014

57%

65%

70%

Value-add %

2010

2016

2014

5%

68%

84%

API/spot %

% of total shipments

2014

$55

EBITDA/MT

2014

$422

EBITDA/MT

%

of

3

rd

party

shipments

Executing Robust Process to Maximize Global Competitiveness

1)

Includes

74

kmt

of

Sao

Luis

smelting

capacity

to

be

executed

by

April

15

th

W.A. = Western Australia

33

[Alcoa logo]

Strategic Review Process and Capacity Actions Executed Against 2015 Strategic Review

Guiding Principles

Maximize cash position for

ramp-down and ramp-up

considering:

Operational flexibility

Power flexibility

Repowering impact

Community impact

33% reduction in smelting

operating

capacity

since

2007

1

March 6, 2015

2.8 mmt refining

500 kmt smelting

under strategic review

To Take Quick, Decisive Action

12

Months

Global Businesses Focused on Upstream Value Creation

34

[Alcoa logo]

Explore

opportunities in

external markets

Improve

competitiveness;

transform pricing

Leverage assets;

Secure long

-term

solutions

Lower cost;

enhance

operational

excellence

Grow value-add

product mix

Global Primary Products Global Business Units

Increases performance transparency

Focuses Centers of Excellence, enhances best practice sharing

Improves commercial and operational alignment

Optimizes capital allocation

MINING

REFINING

CASTING

SMELTING

ENERGY

Alumina

Primary Metals

Profitable

Growth

from

Organic

&

Inorganic

–

Fully

on

Track

Disciplined Execution Improves Upstream Competitiveness

Continue to Deliver Strong Operational Results

35

Creating Sustainable Value for Shareholders

[Alcoa logo]

Nahla Azmy

Vice President, Investor Relations

Alcoa

390 Park Avenue

New York, NY 10022-4608

Telephone:  (212) 836-2674

Email: nahla.azmy@alcoa.com

www.alcoa.com

Additional Information

36

[Alcoa logo]

Annual Sensitivity Summary

Currency Annual Net Income Sensitivity

+/-

$100/MT = +/-

$190 million

LME Aluminum Annual Net Income Sensitivity

Australian $

+/-

$11 million

per 0.01 change in USD / AUD

Brazilian $

+/-

$  1 million

per 0.01 change in BRL / USD

Euro €

+/-

$  2 million

per 0.01 change in USD / EUR

Canadian $

+/-

$  4 million

per 0.01 change in CAD / USD

Norwegian Kroner

+/-

$  4 million

per 0.10 change in NOK / USD

37

+/-

$10/MT = +/-

$20 million

API/Spot Alumina Annual Net Income Sensitivity

[Alcoa logo]

Composition of Regional Premium Pricing Convention

38

[Alcoa logo]

39

Alcoa Segment Bridges

EPS = Engineered Products and Solutions

GRP = Global Rolled Products

$ Millions

$ Millions

$ Millions

$ Millions

EPS Sequential Quarter Bridge

GRP Sequential Quarter Bridge

API

$34

LME

$13

1Q14

$92

Energy

-$16

$8

Prod-

uctivity

$33

Price /

Mix

$14

Volume

-$8

FX

$69

Cost

Increases

/ Other

Surgold

sale

$221

1Q15

-$18

1Q15

Cost

Increases

/ Other

$43

Saudi

JV /

Portfolio

actions

$187

$26

-$41

Energy

$8

$45

FX

$7

Volume

$71

Price /

Mix

API

LME

-$15

1Q14

$62

-$19

Prod-

uctivity

1Q15

$191

Cost

Increases/

Other

-$14

Productivity

$27

Price / Mix

-$2

Volume

$20

Currency

-$5

4Q14

$165

Portfolio

Actions

-10

Cost

Increases

/ Other

-2

Energy

2

0

34

Price /

Mix

1Q15

Productivity

4

Volume

9

Currency

-3

LME

-36

4Q14

71

Alumina Year-over-Year Bridge

Primary Metals Year-over-Year Bridge

[Alcoa logo]

Special Items

See appendix for Adjusted Income reconciliation.

NCI: Non-controlling interest

40

Pre-tax, Before NCI

After-tax, After NCI

$ Millions, except per-share amounts

4Q14

1Q15

4Q14

1Q15

Income Statement

Classification

Segment

Income from Continuing Operations

$234

$481

$159

$195

Income Per Diluted Share

-

-

$0.11

$0.14

Restructuring-Related

($388)

($177)

($200)

($158)

Restructuring and

Other Charges/COGS

Corporate / All

Tax Items

-

-

($53)

($4)

Income Taxes

Corporate

Acquisition Costs

($25)

($9)

($22)

($7)

SG&A/Interest

Expense

Corporate

Mark-to-Market Energy Contracts

$2

$2

$2

$1

Other Expenses, Net

Corporate

Special Items

($411)

($184)

($273)

($168)

Income from Continuing Ops excl Special Items

$645

$665

$432

$363

Income

per Diluted

Share excl

Special Items

-

-

$0.33

$0.28

[Alcoa logo]

Revenue Change by Market

41

14%

7%

(23%)

3%

(25%)

(13%)

(15%)

(9%)

(13%)

(15%)

24%

46%

(18%)

13%

(28%)

(5%)

(5%)

43%

5%

10%

21%

5%

5%

7%

6%

1%

11%

2%

15%

27%

Aerospace

Automotive

B&C

Comm. Transport

Industrial Products

IGT

Packaging

Distribution/Other

Alumina

Primary Metals

1Q15 Third-Party Revenue

Sequential

Change

Year-Over-Year

Change

[Alcoa logo]

Revenue Change by Market

42

3%

17%

3%

15%

(3%)

(11%)

1%

24%

6%

3%

17%

4%

6%

6%

8%

2%

13%

1%

15%

28%

Aerospace

Automotive

B&C

Comm. Transport

Industrial Products

IGT

Packaging

Distribution/Other

Alumina

Primary Metals

FY 2014 Third-Party Revenue

Year-Over-Year

Change

[Alcoa logo]

Composition of Upstream Production Costs

1

Natural gas information corresponds to Point Comfort, as Australia is priced on a rolling 16 quarter average

43

[Alcoa logo]

Fuel Oil

7%

Natural gas

13%

Caustic

9%

Bauxite

27%

Conversion

44%

Input Cost

Inventory flow

Pricing

convention

Annual ATOI

Sensitivity

Fuel oil

1 –

2 months

Prior month

$2m per $1/bbl

Natural gas

N/A

Spot

$13m per $1/GJ

1

Caustic soda

3 -

6 months

Spot & semi-

annual

$8m per

$10/DMT

Refining Cost Structure

Alumina

34%

Carbon

12%

Power

25%

Materials

7%

Conversion

22%

Smelting Cost Structure

Input Cost

Inventory flow

Pricing convention

Annual ATOI

Sensitivity

Coke

1 -

2 months

Spot, quarterly &

semi-annual

$7m per

$10/MT

Pitch

1 -

2 months

Spot, quarterly &

semi-annual

$2m per

$10/MT

1

Alcoa Upstream capacity closed, sold and idled

44

1) Includes 74 kmt curtailment announced on March 30, 2015; Execute by April 15, 2015.  2) Includes 443 kmt curtailment announced on March 17,

2015; Execute by April 30, 2015.  Does not include a potential sale transaction with the Government of Suriname.

[Alcoa logo]

Facility

Year

kmt

Baie Comeau

2008

53

Eastalco

2010

195

Badin

2010

60

Warrick

2010

40

Tennessee

2011

215

Rockdale

2011

76

Baie Comeau

2013

105

Fusina

2013

44

Massena East

2013

41

Massena East

2014

84

Point Henry

2014

190

Portovesme

2014

150

Mt. Holly

(sale of 50.33% interest)

2014

115

Total

1,368

Closed/sold since December 2007

Facility

kmt

Rockdale

191

Sao Luis

1

268

Pocos

96

Intalco

49

Wenatchee

41

Aviles

32

Portland

30

La Coruna

24

Total

731

Smelting Capacity

Idled

Refining Capacity

Facility

Year

kmt

Jamalco

(sale of 55% interest)

2014

779

Total

779

Closed/sold since December 2007

Facility

kmt

Suriname

2

1,319

Point Comfort

295

Total

1,614

Idled

Source: Alcoa estimates, CRU, Harbor, Wood Mackenzie

6.5% 2015 demand growth on higher base

45

29.2

6.7

6.7

4.3

2.2

2.1

2.1

1.1

1.0

5%

9.5%

5%

7%

4%

1%

0.5%

1.5%

8%

-2%

57.5 mmt

1

Other includes Africa, E. Europe, Latin America ex Brazil, and Oceania

2015 Primary Aluminum Consumption (mmt), Annualized Growth (%) 

China

Europe

North America

North Asia

India

SE Asia

MENA

Russia

Brazil

Other ¹

2.1

2015 demand +6.5%

on higher base

Higher

Final 2014 global demand growth

+9%  vs. +7%

[Alcoa logo]

46

Source: Alcoa analysis,  Alladiny, CNIA, CRU, China Customs, Harbor, Wood Mackenzie

Alumina surplus tightens, Aluminum in balance

[Alcoa logo]

2015E Aluminum Supply/Demand Balance

2015E Alumina Supply/Demand Balance

’000 mt

China

Rest of World

2015 Production

47,522

54,921

2015 Production to be added

5,030

3,006

2015 Capacity curtailed or restarted

1,331

(462)

Imports/(exports)

3,000

(3,000)

Total supply

56,883

54,465

Demand

(56,883)

(51,766)

Net Balance

0

2,699

Supply/Demand Analysis

4Q14

Surplus

2,932

4Q14

Deficit

(38)

’000 mt

China

Rest of World

2015 Production

27,998

25,955

2015 Production to be added

4,400

868

2015 Capacity curtailed or *restarted

(1,415)

0

Total Supply

30,983

26,823

Demand

(29,171)

(28,309)

Net Balance

1,812

(1,486)

Surplus

326

Surplus

2,699

Source: Alcoa estimates, IAI, LME, Marubeni, Shanghai Metal Exchange

Global inventories have fallen to 66 days; down 10 days year-over year

47

[Alcoa logo]

Premiums down from record highs; remain above 2014 levels

48

Source:

Graph

shows

monthly

average

of

daily

prices

-

Platts

Metals

Week

1Q15

and

1Q14

bubble/table

data

shows

quarterly

average

of

daily

prices

[Alcoa logo]

Reconciliation

of

ATOI

to

Consolidated

Net

(Loss)

Income

Attributable

to

Alcoa

(in millions)

1Q14

2Q14

3Q14

4Q14

2014

1Q15

Total segment ATOI

$325

$418

$619

$681

$2,043

$633

Unallocated amounts (net of tax):

Impact of LIFO

(7)

(8)

(18)

(21)

(54)

7

Interest expense

(78)

(69)

(81)

(80)

(308)

(80)

Noncontrolling interests

19

9

18

45

91

(60)

Corporate expense

(67)

(70)

(74)

(83)

(294)

(64)

Restructuring and other charges

(321)

(77)

(189)

(307)

(894)

(161)

Other

(49)

(65)

(126)

(76)

(316)

(80)

Consolidated net (loss) income attributable to Alcoa

$(178)

$138

$149

$159

$268

$195

49

[Alcoa logo]

Reconciliation of Adjusted Income

50

(in millions, except

per-share amounts)

(Loss) Income

Diluted

EPS

(3)

Quarter ended

Quarter ended

March 31,

December 31,

March 31,

March 31,

December 31,

March 31,

2014

2014

2015

2014

2014

2015

Net (loss) income

attributable to Alcoa

$(178)

$159

$195

$(0.16)

$0.11

$0.14

Restructuring and

other charges

274

200

158

Discrete tax items

(1)

(6)

16

­

Other special items

(2)

8

57

10

Net income

attributable to Alcoa

–

as adjusted

$98

$432

$363

0.09

0.33

0.28

[Alcoa logo]

Net income attributable to Alcoa – as adjusted 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, discrete tax items, and

other special items (collectively, “special items”).  There can be no assurances that additional special items will not occur in future periods.  To compensate for this limitation, management believes that it is appropriate to consider both Net (loss) income attributable to Alcoa determined under

GAAP as well as Net income attributable to Alcoa – as adjusted.

(1)

Discrete tax items include the following:

•

for the quarter ended December 31, 2014, a charge for the remeasurement of certain deferred tax assets of a subsidiary in Spain due to a tax rate change ($16), a benefit for an adjustment to the remeasurement of certain deferred tax assets of a subsidiary in Brazil due to a tax rate change

($3), and a net charge for a number of small items ($3); and

•

for the quarter ended March 31, 2014, a net benefit for a number of small items.

(2)

Other special items include the following:

•

for the quarter ended March 31, 2015, an unfavorable tax impact related to the interim period treatment of operational losses in certain foreign jurisdictions for which no tax benefit was recognized ($35), a favorable tax impact resulting from the difference between Alcoa’s consolidated

estimated annual effective tax rate and the statutory rates applicable to special items ($31), costs associated with current and future acquisitions of aerospace businesses ($7), and a net favorable change in certain mark-to-market energy derivative contracts ($1);

•

for the quarter ended December 31, 2014, an unfavorable tax impact resulting from the difference between Alcoa’s consolidated estimated annual effective tax rate and the statutory rates applicable to special items ($81), a favorable tax impact related to the interim period treatment of

operational losses in certain foreign jurisdictions for which no tax benefit was recognized ($44), costs associated with current and future acquisitions of aerospace businesses ($22), and a net favorable change in certain mark-to-market energy derivative contracts ($2); and

•

for the quarter ended March 31, 2014, a favorable tax impact resulting from the difference between Alcoa’s consolidated estimated annual effective tax rate and the statutory rates applicable to special items ($72), an unfavorable tax impact related to the interim period treatment of

operational losses in certain foreign jurisdictions for which no tax benefit was recognized ($56), a write-down of inventory related to the permanent closure of a smelter and two rolling mills in Australia and a smelter in the United States ($20), an unfavorable impact related to the restart of one

potline at the joint venture in Saudi Arabia that was previously shut down due to a period of pot instability ($13), a gain on the sale of a mining interest in Suriname ($11), and a loss on the write-down of an asset to fair value ($2).

(3)

The average number of shares applicable to diluted EPS for Net (loss) income attributable to Alcoa excludes certain share equivalents as their effect was anti-dilutive (see footnote 3 to the Statement of Consolidated Operations).  However, certain of these share equivalents become dilutive in

the EPS calculation applicable to Net income attributable to Alcoa – as adjusted due to a larger, positive numerator.  Specifically, these share equivalents were associated with outstanding employee stock options and awards for the quarter ended March 31, 2014 and mandatory convertible

preferred stock for the quarters ended December 31, 2014 and March 31, 2015.  As a result, the average number of shares applicable to diluted EPS for Net income attributable to Alcoa – as adjusted was 1,115,941,470; 1,294,701,805; and 1,315,558,890 for the quarters ended March 31, 2014,

December 31, 2014, and March 31, 2015, respectively.  Additionally, the subtraction of preferred stock dividends declared from the numerator (see footnote 1 to the Statement of Consolidated Operations) needs to be reversed for the quarters ended December 31, 2014 and March 31, 2015

since the related mandatory convertible preferred stock was dilutive in the EPS calculation for Net income attributable to Alcoa – as adjusted.

Reconciliation of Alcoa Adjusted EBITDA

($ in millions)

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

1Q14

4Q14

1Q15

Net

income

(loss)

attributable

to

Alcoa

$1,310

$1,233

$2,248

$2,564

$(74)

$(1,151)

$254

$611

$191

$(2,285)

$268

$(178)

$159

$195

Add:

233

259

436

365

221

61

138

194

(29)

41

(91)

(19)

(45)

60

Cumulative

effect

of

accounting

changes

–

2

–

–

–

–

–

–

–

–

–

–

–

–

Loss

(income)

from

discontinued

operations

27

50

(22)

250

303

166

8

3

–

–

–

–

–

–

Provision

(benefit)

for

income

taxes

546

464

853

1,623

342

(574)

148

255

162

428

320

(77)

120

226

Other

(income)

expenses,

net

(266)

(478)

(236)

(1,920)

(59)

(161)

5

(87)

(341)

(25)

47

25

(6)

(12)

Interest

expense

271

339

384

401

407

470

494

524

490

453

473

120

122

122

Restructuring

and

other

charges

(29)

266

507

268

939

237

207

281

172

782

1,168

461

388

177

Impairment

of

goodwill

–

–

–

–

–

–

–

–

–

1,731

–

–

–

–

Provision

for

depreciation,

depletion,

and

amortization

1,142

1,227

1,252

1,244

1,234

1,311

1,450

1,479

1,460

1,421

1,371

340

335

321

Adjusted

EBITDA

$3,234

$3,362

$5,422

$4,795

$3,313

$359

$2,704

$3,260

$2,105

$2,546

$3,556

$672

$1,073

$1,089

Sales

$21,370

$24,149

$28,950

$29,280

$26,901

$18,439

$21,013

$24,951

$23,700

$23,032

$23,906

$5,454

$6,377

$5,819

Adjusted

EBITDA

Margin

15.1%

13.9%

18.7%

16.4%

12.3%

1.9%

12.9%

13.1%

8.9%

11.1%

14.9%

12.3%

16.8%

18.7%

Alcoa’s definition of Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) is net margin plus an add-back for depreciation, depletion, and amortization.  Net margin

is equivalent to Sales minus the following items: Cost of goods sold; Selling, general administrative, and other expenses; Research and development expenses; and Provision for depreciation,

depletion, and amortization.  Adjusted EBITDA is a non-GAAP financial measure.  Management believes that this measure is meaningful to investors because Adjusted EBITDA provides

additional information with respect to Alcoa’s operating performance and the Company’s ability to meet its financial obligations.  The Adjusted EBITDA presented may not be comparable to

similarly titled measures of other companies.

51

[Alcoa logo]

Net

income

(loss)

attributable

to

noncontrolling

interests

Reconciliation of Alumina Adjusted EBITDA

($ in millions, except per metric ton amounts)

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

1Q14

4Q14

1Q15

After-tax operating income (ATOI)

$632

$682

$1,050

$956

$727

$112

$301

$607

$90

$259

$370

$92

$178

$221

Add:

Depreciation, depletion, and amortization

153

172

192

267

268

292

406

444

455

426

387

97

90

80

Equity (income) loss

(1)

–

2

(1)

(7)

(8)

(10)

(25)

(5)

4

29

5

10

7

Income taxes

240

246

428

340

277

(22)

60

179

(27)

66

153

40

75

92

Other

(46)

(8)

(6)

2

(26)

(92)

(5)

(44)

(8)

(6)

(28)

(28)

2

–

Adjusted EBITDA

$978

$1,092

$1,666

$1,564

$1,239

$282

$752

$1,161

$505

$749

$911

$206

$355

$400

Production (thousand metric tons) (kmt)

14,343

14,598

15,128

15,084

15,256

14,265

15,922

16,486

16,342

16,618

16,606

4,172

4,161

3,933

Adjusted EBITDA / Production

($ per metric ton)

$68

$75

$110

$104

$81

$20

$47

$70

$31

$45

$55

$49

$85

$102

Alcoa’s definition of Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) is net margin plus an add-back for depreciation, depletion, and amortization.  Net margin is

equivalent

to

Sales

minus

the

following

items:

Cost

of

goods

sold;

Selling,

general

administrative,

and

other

expenses;

Research

and

development

expenses;

and

Provision

for

depreciation,

depletion, and amortization.  The Other line in the table above includes gains/losses on asset sales and other non-operating items.  Adjusted EBITDA is a non-GAAP financial measure. 

Management

believes

that

this

measure

is

meaningful

to

investors

because

Adjusted

EBITDA

provides

additional

information

with

respect

to

Alcoa’s

operating

performance

and

the

Company’s

ability to meet its financial obligations.  The Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies.

52

[Alcoa logo]

Reconciliation of Primary Metals Adjusted EBITDA

($ in millions, except per metric ton amounts)

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

1Q14

4Q14

1Q15

After-tax operating income (ATOI)

$808

$822

$1,760

$1,445

$931

$(612)

$488

$481

$309

$(20)

$594

$(15)

$267

$187

Add:

Depreciation, depletion, and amortization

326

368

395

410

503

560

571

556

532

526

494

124

117

109

Equity (income) loss

(58)

12

(82)

(57)

(2)

26

(1)

7

27

51

34

28

(11)

3

Income taxes

314

307

726

542

172

(365)

96

92

106

(74)

203

(11)

89

57

Other

20

(96)

(13)

(27)

(32)

(176)

(7)

2

(422)

(8)

(6)

–

(2)

(1)

Adjusted EBITDA

$1,410

$1,413

$2,786

$2,313

$1,572

$(567)

$1,147

$1,138

$552

$475

$1,319

$126

$460

$355

Production (thousand metric tons) (kmt)

3,376

3,554

3,552

3,693

4,007

3,564

3,586

3,775

3,742

3,550

3,125

839

731

711

Adjusted EBITDA / Production

($ per metric ton)

$418

$398

$784

$626

$392

$(159)

$320

$301

$148

$134

$422

$150

$629

$499

Alcoa’s definition of Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) is net margin plus an add-back for depreciation, depletion, and amortization.  Net margin is

equivalent

to

Sales

minus

the

following

items:

Cost

of

goods

sold;

Selling,

general

administrative,

and

other

expenses;

Research

and

development

expenses;

and

Provision

for

depreciation,

depletion, and amortization.  The Other line in the table above includes gains/losses on asset sales and other non-operating items.  Adjusted EBITDA is a non-GAAP financial measure. 

Management

believes

that

this

measure

is

meaningful

to

investors

because

Adjusted

EBITDA

provides

additional

information

with

respect

to

Alcoa’s

operating

performance

and

the

Company’s ability to meet its financial obligations.  The Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies.

53

[Alcoa logo]

Reconciliation of Global Rolled Products Adjusted EBITDA

($ in millions, except per metric ton amounts)

2004

2005

2006

2007

2008

2009

2010*

2011*

2012*

2013

2014

1Q14

4Q14

1Q15

After-tax operating income (ATOI)

$290

$300

$317

$151

$(41)

$(106)

$241

$260

$346

$252

$312

$59

$71

$34

Add:

Depreciation, depletion, and amortization

200

220

223

227

216

227

238

237

229

226

235

58

57

56

Equity loss

1

–

2

–

–

–

–

3

6

13

27

5

8

9

Income taxes

97

135

113

77

14

12

103

98

159

108

124

34

25

26

Other

1

1

20

1

6

(2)

1

1

(2)

–

(1)

(2)

–

–

Adjusted EBITDA

$589

$656

$675

$456

$195

$131

$583

$599

$738

$599

$697

$154

$161

$125

Total shipments (thousand metric tons) (kmt)

2,136

2,250

2,376

2,482

2,361

1,888

1,755

1,866

1,943

1,989

2,056

489

508

447

Adjusted EBITDA / Total shipments

($ per metric ton)

$276

$292

$284

$184

$83

$69

$332

$321

$380

$301

$339

$315

$317

$280

Alcoa’s definition of Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) is net margin plus an add-back for depreciation, depletion, and amortization.  Net margin is

equivalent

to

Sales

minus

the

following

items:

Cost

of

goods

sold;

Selling,

general

administrative,

and

other

expenses;

Research

and

development

expenses;

and

Provision

for

depreciation,

depletion, and amortization.  The Other line in the table above includes gains/losses on asset sales and other non-operating items.  Adjusted EBITDA is a non-GAAP financial measure. 

Management

believes

that

this

measure

is

meaningful

to

investors

because

Adjusted

EBITDA

provides

additional

information

with

respect

to

Alcoa’s

operating

performance

and

the

Company’s ability to meet its financial obligations.  The Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies.

54

*

The

average

Adjusted

EBITDA

per

metric

ton

of

these

three

years

equals

$344

and

represents

the

average

historical

high

for

the

Global

Rolled

Products

segment.

Alcoa

has

a

2016

target

to meet or exceed this average historical high.

[Alcoa logo]

Reconciliation of Engineered Products and Solutions Adjusted EBITDA

($ in millions)

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

1Q14

4Q14

1Q15

After-tax operating income (ATOI)

$161

$276

$382

$423

$522

$311

$419

$537

$612

$726

$767

$189

$165

$191

Add:

Depreciation, depletion, and amortization

168

160

152

163

165

177

154

158

158

159

173

40

52

60

Equity loss (income)

–

–

6

–

–

(2)

(2)

(1)

–

–

–

–

–

–

Income taxes

70

120

164

184

215

138

198

258

297

348

374

91

81

89

Other

106

(11)

(2)

(7)

2

1

–

(1)

(9)

(2)

–

–

(2)

–

Adjusted EBITDA

$505

$545

$702

$763

$904

$625

$769

$951

$1,058

$1,231

$1,314

$320

$296

$340

Third-party sales

$4,283

$4,773

$5,428

$5,834

$6,199

$4,689

$4,584

$5,345

$5,525

$5,733

$6,006

$1,443

$1,566

$1,689

Adjusted EBITDA Margin

11.8%

11.4%

12.9%

13.1%

14.6%

13.3%

16.8%

17.8%

19.1%

21.5%

21.9%

22.2%

18.9%

20.1%

Alcoa’s definition of Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) is net margin plus an add-back for depreciation, depletion, and amortization.  Net margin is

equivalent

to

Sales

minus

the

following

items:

Cost

of

goods

sold;

Selling,

general

administrative,

and

other

expenses;

Research

and

development

expenses;

and

Provision

for

depreciation,

depletion, and amortization.  The Other line in the table above includes gains/losses on asset sales and other non-operating items.  Adjusted EBITDA is a non-GAAP financial measure. 

Management

believes

that

this

measure

is

meaningful

to

investors

because

Adjusted

EBITDA

provides

additional

information

with

respect

to

Alcoa’s

operating

performance

and

the

Company’s

ability to meet its financial obligations.  The Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies.

55

(1)

The

Adjusted

EBITDA

Margin

for

the

year

ended

December

31,

2013

represents

the

historical

high

for

the

Engineered

Products

and

Solutions

segment.

Alcoa

has

a

2016

target

to

exceed

this historical high.

(2)

In the quarter and year ended December 31, 2014, the Third-party sales and Adjusted EBITDA of Engineered Products and Solutions includes $81 and $(10), respectively, related to the

acquisition

of

an

aerospace

business,

Firth

Rixson.

Excluding

these

amounts,

Adjusted

EBITDA

Margin

was

20.6%

and

22.3%

for

the

quarter

and

year

ended

December

31,

2014,

respectively.

(3)

In the quarter ended March 31, 2015, the Third-party sales and Adjusted EBITDA of Engineered Products and Solutions includes $233 and $27, respectively, related to Firth Rixson.  Excluding

these amounts, Adjusted EBITDA Margin was 21.5% for the quarter ended March 31, 2015.

[Alcoa logo]

(1)

(2)

(2)

(3)

Reconciliation of Free Cash Flow

(in millions)

Year ended

Quarter ended

December 31,

2009

December 31,

2010

December 31,

2011

December 31,

2012

December 31,

2013

December 31,

2014

March 31,

2014

December 31,

2014

March 31,

2015

Cash from

operations

$1,365

$2,261

$2,193

$1,497

$1,578

$1,674

$(551)

$1,458

$(175)

Capital

expenditures

(1,622)

(1,015)

(1,287)

(1,261)

(1,193)

(1,219)

(209)

(469)

(247)

Free cash flow

$(257)

$1,246

$906

$236

$385

$455

$(760)

$989

$(422)

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.

56

[Alcoa logo]

Days Working Capital

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

(1)

The deferred purchase price receivable relates to an arrangement to sell certain customer receivables to several financial institutions on a recurring basis.  Alcoa is adding back this receivable

for the purposes of the Days Working Capital calculation.

(2)

The

Working

Capital

for

each

period

presented

represents

an

average

quarter

Working

Capital,

which

reflects

the

capital

tied

up

during

a

given

quarter.

As

such,

the

components

of

Working

Capital

for

each

period

presented

represent

the

average

of

the

ending

balances

in

each

of

the

three

months

during

the

respective

quarter.

(3)

In the quarter ended March 31, 2015, Working Capital and Sales include $279 and $233, respectively, related to the acquisition of two aerospace businesses, Firth Rixson and TITAL.  Excluding

these

amounts,

Days

Working

Capital

was

30

for

the

quarter

ended

March

31,

2015.

57

($ in millions)

Quarter ended

31-Mar-12

30-Jun-12

30-Sep-12

31-Dec-12

31-Mar-13

30-Jun-13

30-Sep-13

31-Dec-13

31-Mar-14

30-Jun-14

30-Sep-14

31-Dec-14

31-Mar-15

(3)

Receivables from customers, less

allowances  

$1,709

$1,650

$1,600

$1,573

$1,704

$1,483

$1,427

$1,383

$1,391

$1,401

$1,526

$1,513

$1,487

Add: Deferred purchase price

receivable

(1)

85

144

104

53

50

223

347

339

238

371

438

395

389

Receivables from customers, less

allowances, as adjusted

1,794

1,794

1,704

1,626

1,754

1,706

1,774

1,722

1,629

1,772

1,964

1,908

1,876

Add: Inventories

3,079

3,097

3,051

2,894

2,961

2,949

2,932

2,783

2,974

3,201

3,194

3,064

3,189

Less: Accounts payable, trade

2,660

2,594

2,496

2,587

2,656

2,820

2,746

2,816

2,813

2,880

3,016

3,021

2,936

Working Capital

(2)

$2,213

$2,297

$2,259

$1,933

$2,059

$1,835

$1,960

$1,689

$1,790

$2,093

$2,142

$1,951

$2,129

Sales

$6,006

$5,963

$5,833

$5,898

$5,833

$5,849

$5,765

$5,585

$5,454

$5,836

$6,239

$6,377

$5,819

Days Working Capital

34

35

36

30

32

29

31

28

30

33

32

28

33

[Alcoa logo]

Reconciliation of Net Debt

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.

(in millions)

December 31,

March 31,

2010

2011

2012

2013

2014

2015

Short-term borrowings

$92

$62

$53

$57

$54

$80

Commercial paper

–

224

–

–

–

–

Long-term debt due within one year

231

445

465

655

29

26

Long-term debt, less amount due within one year

8,842

8,640

8,311

7,607

8,769

8,711

Total debt

9,165

9,371

8,829

8,319

8,852

8,817

Less: Cash and cash equivalents

1,543

1,939

1,861

1,437

1,877

1,191

Net debt

$7,622

$7,432

$6,968

$6,882

$6,975

$7,626

58

[Alcoa logo]

Reconciliation of Debt-to-Adjusted EBITDA Ratio

($ in millions)

2010

2011

2012

2013

2014

1Q15*

Net income (loss) attributable to Alcoa

$254

$611

$191

$(2,285)

$268

$641

Add:

138

194

(29)

41

(91)

(12)

Loss from discontinued operations

8

3

–

–

–

–

Provision for income taxes

148

255

162

428

320

623

Other expenses (income), net

5

(87)

(341)

(25)

47

10

Interest expense

494

524

490

453

473

475

Restructuring and other charges

207

281

172

782

1,168

884

Impairment of goodwill

–

–

–

1,731

–

–

Provision for depreciation, depletion, and

amortization

1,450

1,479

1,460

1,421

1,371

1,352

Adjusted EBITDA

$2,704

$3,260

$2,105

$2,546

$3,556

$3,973

Total Debt

$9,165

$9,371

$8,829

$8,319

$8,852

$8,817

Debt-to-Adjusted EBITDA Ratio

3.39

2.87

4.20

3.27

2.49

2.22

Alcoa’s definition of Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) is net margin plus an add-back for depreciation, depletion, and amortization.  Net margin

is equivalent to Sales minus the following items: Cost of goods sold; Selling, general administrative, and other expenses; Research and development expenses; and Provision for depreciation,

depletion, and amortization.  Adjusted EBITDA is a non-GAAP financial measure.  Management believes that this measure is meaningful to investors because Adjusted EBITDA provides

additional information with respect to Alcoa’s operating performance and the Company’s ability to meet its financial obligations.  The Adjusted EBITDA presented may not be comparable to

similarly titled measures of other companies.

59

*

The

calculation

of

Adjusted

EBITDA

for

the

quarter

ended

March

31,

2015

is

based

on

the

trailing

twelve

months.

[Alcoa logo]

Net income (loss) attributable to noncontrolling

interests

Reconciliation of RTI Adjusted EBITDA

($ in thousands)

2014*

Net income

$31,093

Add:

608

Provision for income taxes

10,037

Interest expense

31,055

Interest income

(310)

Other income, net

(2,156)

Depreciation and amortization

44,877

Adjusted EBITDA

$115,204

Net sales

$793,579

Adjusted EBITDA Margin

14.5%

60

* The calculation of Adjusted EBITDA for RTI is based on Alcoa’s definition of Adjusted EBITDA (see below) and does not purport to be the manner in which RTI’s management

would calculate RTI’s Adjusted EBITDA.  Additionally, this calculation of Adjusted EBITDA is not intended to suggest that RTI’s management uses Adjusted EBITDA as a measure of

RTI’s profitability.  The amounts used in this calculation were obtained from RTI’s Annual Report on Form 10-K for the year ended December 31, 2014 filed with the U.S. Securities

and Exchange Commission on February 26, 2015.

Alcoa’s definition of Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) is net margin plus an add-back for depreciation, depletion, and amortization. 

Net margin is equivalent to Sales minus the following items: Cost of goods sold; Selling, general administrative, and other expenses; Research and development expenses; and

Provision for depreciation, depletion, and amortization.  Adjusted EBITDA is a non-GAAP financial measure.  Management believes that this measure is meaningful to investors

because Adjusted EBITDA provides additional information with respect to Alcoa’s operating performance and the Company’s ability to meet its financial obligations.  The Adjusted

EBITDA presented may not be comparable to similarly titled measures of other companies.

Net loss attributable to discontinued operations

[Alcoa logo]

[Alcoa logo]