Slides presented during Alcoa Inc. third quarter 2007 earnings call

[Alcoa logo]

Today’s discussion may include “forward-looking statements”

within the meaning of the Private Securities Litigation Reform

Act of 1995. Such statements relate to future events and

expectations and involve known and unknown risks and

uncertainties. Alcoa’s actual results or actions may differ

materially from those projected in the forward-looking

statements. For a summary of the specific risk factors that could

cause results to differ materially from those expressed in the

forward-looking statements, please refer to Alcoa’s Form 10-K

for the year ended December 31, 2006 and Forms 10-Q for the

quarters ended March 31, 2007 and June 30, 2007 filed with the

Securities and Exchange Commission.

Forward Looking Statements

[Alcoa logo]

Chalco Investment Monetized

500

1,000

1,500

2,000

2,500

Date

Alcoa Shares

Investment ($M)

12/12/01

828.2

146.5

1/11/02

840.2

2.1

1/6/04

884.2

31.9

Total Investment ($M)

180.5

Investment Performance

Alcoa’s Chalco Position

Total

Annualized

Total Shareholder Return

1050%

44%

Price Appreciation

989%

42%

Transaction yields $2.0 billion in proceeds

[Alcoa logo]

Quarter 2007 Financial Overview

$ In Millions

2Q'07

3Q'07

Change

Sales

$8,066

$7,387

($679)

Cost of Goods Sold

$6,178

$5,910

($268)

% of Sales

76.6%

80.0%

3.4 pts.

SG&A

$367

$365

($2)

% of Sales

4.5%

4.9%

0.4 pts.

Restructuring and Other Charges

($57)

$577

$634

Interest Expense

$86

$151

$65

Other Income, Net

($60)

($1,731)

($1,671)

Effective Tax Rate

30.0%

63.0%

33 pts.

Minority Interests

$110

$76

($34)

GAAP Net Income

$715

$555

($160)

Loss from Discontinued Operations

($1)

($3)

($2)

GAAP Income From Continuing Operations

$716

$558

($158)

[Alcoa logo]

Income

from

continuing

operations

–

excluding

restructuring

and

other

charges

and

transaction

costs

non-GAAP

financial

measure.

Management

believes

that

this

measure

is meaningful

investors

because

management

reviews

the

operating

results

Alcoa

excluding

the

impacts

restructuring

and

other

charges

and

transaction

costs.

There

can

no assurances

that

additional

restructuring

and

other

charges

and

transaction

costs

will

not

occur

future

periods.

compensate

for

this

limitation,

management

believes

that

is appropriate

consider

both

income

from

continuing

operations

determined

under

GAAP

well

income

from

continuing

operations

–

excluding

restructuring

and

other

charges

and

transaction costs.

Quarter 2007 Financial Overview

[Alcoa logo]

3Q’07

2Q’07

3Q’06

1,937

1,990

2,205

Party Shipments (kmt)

3,775

3,799

3,890

Production (kmt)

664

712

733

Party Revenue ($MM)

215

276

271

ATOI ($MM)

Hurricane Dean impact at Jamalco

Higher energy costs

Unfavorable currency

2Q technology royalty not repeated

Alumina

Quarter Highlights

Quarter Outlook

Prices to follow approximate two-month

lag

Anticipate 2-3% production increase

sequentially

Pressure from fuel oil and natural gas

prices continue

Australian dollar risk

Quarter Business Conditions

$100

$120

$140

$160

$180

$200

$220

$240

$260

$280

$300

1Q06

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

$800

$900

$1,000

$1,100

$1,200

$1,300

$1,400

ATOI

Total Revenue

[Alcoa logo]

Quarter Highlights

283

462

346

ATOI ($MM)

2,734

2,879

2,620

Party Price ($/MT)

1,600

1,746

1,476

Party Revenue ($MM)

3Q’07

2Q’07

3Q’06

584

565

535

Party Shipments (kmt)

934

901

895

Production (kmt)

Primary Metals

Quarter Outlook

Quarter Business Conditions

Lower realized pricing sequentially

Tennessee and Rockdale curtailment

costs

Iceland start-up costs

Seasonal energy increases

Unfavorable currency

Average Sept. cash LME = $2,391/MT

Anticipate 3% production increase

sequentially

Iceland start-up costs at same level

Tennessee and Rockdale at full strength

by year end

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

$550

1Q06

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

$1,500

$1,700

$1,900

$2,100

$2,300

$2,500

$2,700

$2,900

$3,100

$3,300

$3,500

ATOI

Total Revenue

[Alcoa logo]

Seasonality impact

Distributor de-stocking

Bohai pre-operating costs

Flat-Rolled Products

Quarter Highlights

Quarter Outlook

Quarter Business Conditions

Continued short-term impact of

distributor de-stocking

Continued weakness in the North

American and European distribution

market

$20

$40

$60

$80

$100

1Q06

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

$1,500

$1,600

$1,700

$1,800

$1,900

$2,000

$2,100

$2,200

$2,300

$2,400

ATOI

Third Party Revenue

3Q’07

2Q’07

3Q’06

ATOI ($MM)

2,309

2,344

2,115

Party Revenue

($MM)

[Alcoa logo]

(7)

(5)

(2)

Other

105

118

(8)

2Q’07

Total

Investment Castings,

Forgings, Fasteners

AFL, Auto Castings and

Structures

(9)

3Q’06

102

(35)

3Q’07

Negative impact of seasonality

Statutory tax rate change and costs

related to the restructuring in AFL

Continued productivity improvement in

the Investment Castings and Fasteners

business

Engineered Solutions

ATOI ($MM)

Quarter Business Conditions

Quarter Outlook

Continued short-term impact of

distributor de-stocking

Decline in Class 8 truck will be

marginally more pronounced vs. 3

quarter

Restructuring will begin to improve AFL

results

$20

$40

$60

$80

$100

$120

1Q06

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

$800

$900

$1,000

$1,100

$1,200

$1,300

$1,400

$1,500

ATOI

Third Party Revenue

[Alcoa logo]

(7)

Soft Alloy Joint Venture

and Other

3Q’07

2Q’07

3Q’06

Total

Global Hard Alloy

Extrusions, Building &

Construction Systems

and Russia

Soft Alloy joint venture depreciation re-

started

Seasonality in the Soft Alloy joint venture

Commercial building and construction

market remained strong

Extruded and End Products

ATOI ($MM)

Quarter Business Conditions

Quarter Outlook

Some recovery in the Soft Alloy volume

likely

Anticipate Hard Alloy and Building

Construction Systems to remain strong

$10

$15

$20

$25

$30

$35

$40

$45

$50

1Q06

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

$200

$400

$600

$800

$1,000

$1,200

$1,400

ATOI

Third Party Revenue

[Alcoa logo]

(2)

Other

(1)

2Q’07

Total

Reynolds Food Packaging

and Flexible Packaging

Closure Systems and

Consumer Products

(4)

3Q’06

3Q’07

Packaging and Consumer

ATOI ($MM)

Quarter Business Conditions

Quarter Outlook

Normal seasonal decrease in Closures

Normal seasonal increase in Consumer

Products

Continued year over year productivity

improvement

–

Year over year productivity improvement

in all businesses

–

Slight sequential seasonality impact

$10

$20

$30

$40

$50

$60

1Q06

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

$500

$600

$700

$800

$900

ATOI

Third Party Revenue

[Alcoa logo]

Quarter 2007 Cash Flow Review

$ In Millions

3Q'06

3Q'07

Net Income

$537

$555

DD&A

324

338

Change in Working Capital

207

Other Adjustments

104

(302)

Pension Contributions

(242)

(206)

Cash From Operating Activities

748

592

Dividends to Shareholders

(130)

(150)

Change in Debt

334

(494)

Dividends to Minority Interests

(81)

(106)

Contributions from Minority Interests

152

Share Repurchases

(80)

(1,295)

Share Issuances

391

Other Financing Activities

Cash From Financing Activities

(1,461)

Capital Expenditures

(737)

(941)

Sale of Investments

1,954

Other Investing Activities

(5)

Cash From Investing Activities

($720)

$1,008

[Alcoa logo]

Share Repurchase Program

Based on 870M Shares Outstanding

As of January 19, 2007

5% repurchased as of 3Q’07

15% additional

authorized

–

10% repurchase program

authorized January 2007

–

~43M shares repurchased

through 3Q’07

–

Authorization for increase

of repurchase program to

25%

Timeline

5% remaining on Jan ’07 Program

Overview

130M

43M

44M

[Alcoa logo]

(1)

Certain amounts for the first and second quarter of 2006 have been reclassified to Other so that this line reflects only the impact of LIFO. Presenting the Impact of

LIFO as

separate

line

the

Reconciliation

ATOI

started

the

third

quarter

2006.

Financial information for the first and second quarter of 2006 has been reclassified to reflect the movement of the home exteriors business to discontinued operations in

the third quarter of 2006.

Reconciliation of ATOI to

Consolidated Net Income

$ 555

$ 715

$ 662

$ 2,248

$ 359

$ 537

$ 744

$ 608

Consolidated net income

456

(50)

(10)

104

(7)

Other

(3)

(1)

(11)

101

(3)

(5)

(6)

Discontinued operations

(311)

(18)

(379)

(386)

(1)

Restructuring and other charges

(101)

(86)

(317)

(82)

(64)

(82)

(89)

Corporate expense

(76)

(110)

(115)

(436)

(98)

(109)

(124)

(105)

Minority interests

(98)

(56)

(54)

(250)

(61)

(66)

(63)

(60)

Interest expense

Interest income

(16)

(27)

(170)

(66)

(19)

(49)

(36)

Impact of LIFO (1)

Unallocated amounts (net of tax):

$ 668

$ 1,019

$ 972

$ 3,551

$ 927

$ 780

$ 1,000

$ 844

Total segment ATOI

3Q07

2Q07

1Q07

2006

4Q06

3Q06

2Q06

1Q06

[Alcoa logo]

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

four quarters.

Reconciliation of Return on Capital

3Q'07

2Q'07

1Q'07

4Q'06

3Q'06

2Q'06

1Q'06

4Q'05

3Q'05

2Q'05

1Q'05

Bloomberg

(In Millions)

Method

Net income

$2,291

$2,273

$2,302

$2,248

$2,113

$1,865

1,581

$1,233

$1,270

$1,271

$1,215

Minority interests

$399

$432

$446

$436

$418

$368

304

$259

$230

$239

$252

Interest expense (after-tax)

$246

$270

$281

$291

$272

$268

$274

$261

$263

$234

$206

Numerator (sum total)

$2,936

$2,975

$3,029

$2,975

$2,803

$2,501

$2,159

$1,753

$1,763

$1,744

$1,673

Average Balances

Short-term borrowings

$497

$451

$441

$386

$349

$303

$342

$279

$155

$152

$185

Short-term debt

$525

$359

$360

$451

$449

$55

$53

$58

$272

$273

$269

Commercial paper

$1,275

$1,169

$972

$1,192

$1,678

$1,501

$1,652

$771

$581

$553

$815

Long-term debt

$5,390

$5,709

$5,767

$4,861

$4,915

$5,333

$5,243

$5,309

$5,746

$5,920

$6,023

Preferred stock

$55

Minority interests

$1,927

$1,809

$1,669

$1,583

$1,416

$1,340

$1,280

$1,391

$1,332

$1,253

$1,263

Common equity

$15,255

$15,571

$14,621

$13,947

$14,120

$13,834

$13,611

$13,282

$13,045

$12,761

$12,766

Denominator (sum total)

$24,924

$25,123

$23,885

$22,475

$22,982

$22,421

$22,236

$21,144

$21,185

$20,967

$21,376

Return on Capital

11.8%

12.7%

13.2%

12.2%

11.2%

9.7%

8.3%

7.8%

[Alcoa logo]

Return on capital, excluding growth investments is a non-GAAP financial measure. Management believes that this measure

is meaningful to investors because it provides greater insight with respect to the underlying operating performance of the

company’s productive assets. The company has significant growth investments underway in its upstream and downstream

businesses, as previously noted, with expected completion dates over the next several years. As these investments

generally require a period of time before they are productive, management believes that a return on capital measure

excluding these growth investments is more representative of current operating performance.

Reconciliation of Adjusted Return on Capital

3Q'07

2Q'07

1Q'07

4Q'06

3Q'06

2Q'06

1Q'06

4Q'05

3Q'05

2Q'05

1Q'05

Bloomberg

(In Millions)

Method

Numerator (sum total)

$2,936

$2,975

$3,029

$2,975

$2,803

$2,501

$2,159

$1,753

$1,763

$1,744

$1,673

Russia, Bohai, and Kunshan

net losses

($57)

($51)

($79)

($74)

($85)

($78)

($86)

($71)

($48)

($41)

($12)

Adjusted numerator

$2,993

$3,026

$3,108

$3,049

$2,888

$2,579

$2,245

$1,824

$1,811

$1,785

$1,685

Average Balances

Denominator (sum total)

$24,924

$25,123

$23,885

$22,475

$22,982

$22,421

$22,236

$21,144

$21,185

$20,967

$21,376

Capital projects in progress and

Russia, Bohai, and Kunshan

capital base

$4,430

$4,521

$3,945

$3,655

$2,540

$2,330

$2,139

$1,913

$1,776

$1,478

$1,403

Adjusted denominator

$20,494

$20,602

$19,940

$18,820

$20,442

$20,091

$20,097

$19,231

$19,409

$19,489

$19,973

Return on capital, excluding

growth investments

14.6%

14.7%

15.6%

16.2%

14.1%

12.8%

11.2%

9.5%

9.3%

9.2%

8.4%

[Alcoa logo]

Reconciliation of EBITDA Margin

Year ended

December 31,

2006

Ninemonths

ended

September30,

2007

Year ended

December 31,

2006

Ninemonths

ended

September30,

2007

Year ended

December 31,

2006

Ninemonths

ended

September30,

2007

Flat

Rolled Products

Extruded and End Products

Engineered Solutions

After-tax operating income (ATOI)(1)

$ 255

$ 216

$ 60

$ 331

$ 258

Add: Income taxes

101

129

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

(26)

(6)

(5)

–

Net margin

349

312

114

437

387

Add: Depreciation, depletion

and amortization

219

168

118

169

129

Earnings before interest, taxes, depreciation,

and amortization (EBITDA) (3)

$ 568

$ 480

$ 194

$ 144

$ 606

$ 516

Third-party sales

$ 8,297

$ 6,928

$ 4,419

$ 2,703

$ 5,456

$ 4,334

Intersegment

sales

246

182

–

Total Sales

$ 8,543

$ 7,110

$ 4,518

$ 2,784

$ 5,456

$ 4,334

EBITDA Margin

(4)

6.6%

6.8%

4.3%

5.2%

11.1%

11.9%

(1)

See Slide 33

for a reconciliation of segment ATOI to consolidated net income.

(2)

Other income and (expenses), net, include equity income (loss), gain or loss on sale of assets, markto-market activities and otheritems.

-to-market activities and otheritems.

(3)

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

other expenses; and research and development

expenses.

(4)

EBITDA Margin is calculated by dividing EBITDA by Total Sales.

[Alcoa logo]

Reconciliation of EBITDA Margin –

P&C

Year ended

December 31,

2006

Nine months

ended

September 30,

2007

Packaging and Consumer:

After-tax operating income (ATOI) (1)

$ 95

$ 92

Add: Income taxes

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

Net margin

122

131

Add: Depreciation, depletion, and amortization

124

Earnings before interest, taxes, depreciation, and

amortization (EBITDA) (3)

$ 246

$ 220

Third-party sales

$ 3,235

$ 2,401

EBITDA Margin (4)

7.6%

9.2%

(1)

See Slide 33 for a reconciliation of segment ATOI to consolidated net income.

(2)

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

(3)

Alcoa’s definition of EBITDA is net margin plus depreciation, depletion, and amortization. Net margin is equivalent to sales minus the following items: cost of

goods sold; selling, general administrative, and other expenses; and research and development expenses.

(4)

EBITDA Margin is calculated by dividing EBITDA by Third-party Sales.

[Alcoa logo]

45.3

43.1

47.7

Days of Working Capital

$ 7,387

$ 8,066

$ 7,631

Sales

$ 3,638

$ 3,819

$ 3,956

Working Capital

2,649

2,388

2,209

Less: Accounts payable, trade

3,311

3,216

3,363

Add: Inventories

$ 2,976

$ 2,991

$ 2,802

Receivables from customers, less allowances

September 30,

2007

June 30,

2007 (a)

September 30,

2006 (a)

Quarter ended

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

(a) Certain financial information for the quarters ended September 30, 2006 and June 30, 2007 has been reclassified to reflect the

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

certain

financial

information

for

the

quarter

ended

September

30,

2006

has

been

reclassified

reflect

the

movement

the

soft

alloy

extrusions business to held for sale in the fourth quarter of 2006.

Days of Working Capital

[Alcoa logo]

Reconciliation of Income, excluding Restructuring

Charges & Transaction Costs

Income

from

continuing

operations

–

excluding

restructuring

and

other

charges

and

transaction

costs

non-GAAP

financial

measure.

Management

believes

that

this

measure is

meaningful

investors

because

management

reviews

the

operating

results

Alcoa

excluding

the

impacts

restructuring

and

other

charges

and

transaction

costs.

There can

assurances

that

additional

restructuring

and

other

charges

and

transaction

costs

will

not

occur

future

periods.

compensate

for

this

limitation,

management believes

that

appropriate

consider

both

income

from

continuing

operations

determined

under

GAAP

well

income

from

continuing

operations

–

excluding

restructuring

and

other

charges

and

transaction

costs.

Transaction

costs

(investment

banking,

legal,

audit-related,

and

other

third-party

expenses

the

Alcan

offer)

are

included

Selling,

general

administrative,

and

other expenses on the Condensed Statement of Consolidated Income.

$ 712

Income from

continuing

operations –

excluding

restructuring and

other charges and

transaction costs

(21)

Restructuring and

other charges

Transaction costs*

716

Income from

continuing

operations

(1)

Loss from

discontinued

operations

$ 715

Net income

2Q07

Quarter ended