EX-99.2 3 d852816dex992.htm EX-99.2 EX-99.2
4
th
Quarter Earnings Conference
12
January 12, 2015
[Alcoa logo]
Exhibit 99.2

Cautionary Statement
2
[Alcoa logo]
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,”
“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
Alcoa’s
portfolio
transformation,
including
the
expected
benefits
of
acquisitions.
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
and
uncertainties
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,
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
costs
of
other
raw
materials,
or
the
unavailability
or
interruption
of
energy
supplies;
(f)
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
increasing
revenues
and
improving
margins
in
its
Engineered
Products
and
Solutions
and
Global
Rolled
Products
segments
and
moving
its
alumina
refining
and
aluminum
smelting
businesses
down
on
the
industry
cost
curves)
anticipated
from
its
restructuring
programs
and
productivity
improvement,
cash
sustainability,
technology,
and
other
initiatives;
(g)
failure
to
advance
or
successfully
implement,
to
achieve
commercialization
of,
or
to
realize
expected
benefits
from,
new
or
innovative
technologies,
equipment,
processes,
or
products,
including,
without
limitation,
the
Alcoa
Micromill
TM
continuous
casting
process,
whether
due
to
changes
in
the
regulatory
environment,
competitive
developments,
unexpected
events,
such
as
failure
of
equipment
or
processes
to
meet
specifications,
or
other
factors;
(h)
Alcoa’s
inability
to
realize
expected
benefits,
in
each
case
as
planned
and
by
targeted
completion
dates,
from
sales
of
non-
core
assets,
or
from
newly
constructed,
expanded,
or
acquired
facilities,
or
from
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
investigations,
and
environmental
remediation;
(k)
the
impact
of
cyber
attacks
and
potential
information
technology
or
data
security
breaches;
(l)
failure
to
receive,
delays
in
the
receipt
of,
or
unacceptable
or
burdensome
conditions
imposed
in
connection
with,
required
regulatory
approvals
or
the
inability
to
satisfy
the
other
closing
conditions
to
the
proposed
TITAL
acquisition;
(m)
the
risk
that
Firth
Rixson
or
other
acquired
businesses
will
not
be
integrated
successfully
or
such
integration
may
be
more
difficult,
time-consuming
or
costly
than
expected;
(n)
the
loss
of
customers,
suppliers
and
other
business
relationships
as
a
result
of
acquisitions,
competitive
developments,
or
other
factors;
and
(o)
the
other
risk
factors
summarized
in
Alcoa’s
Form
10-K
for
the
year
ended
December
31,
2013
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.
Market
projections
are
subject
to
the
risks
discussed
above
and
other
risks
in
the
market.
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
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.

Klaus Kleinfeld
Chairman and Chief Executive Officer
3
January 12, 2015
[Alcoa logo]

Transformation Delivering Results; Profitability Up YOY
1) 2014 Cash from Operations of $1.7 billion
2) Jamaica bauxite mine and alumina refinery owned 55% by Alcoa Minerals of Jamaica, L.L.C.
4
[Alcoa logo]
Delivering Strong
Operational
Performance
Strong Operational performance:
–
Downstream: 19
th
Consecutive Quarter of YOY ATOI growth
excluding
Firth
Rixson
–
Midstream: ATOI of $71 million
(+238%
YOY)
–
Upstream: Improved Performance
–
13
Consecutive
Quarters
Alumina
segment: 
ATOI of $178 million                                            
Primary Metals
segment:
ATOI of $267 million
4Q14 Cash from Operations of $1.5 billion,
highest quarter in history
4Q14 Free Cash Flow of $989 million,
highest quarter since 4Q 2010
2014 Productivity: $1.2 billion
Across All Segments
2014 Free Cash Flow
1
: $455 million
,
18% improvement over 2013
4Q 2014 Overview
Accelerating
Portfolio
Transformation
Closed
$3.0
billion
Firth Rixson
acquisition
Announced
TITAL
acquisition
;
expected
to
close
by end of
1Q 2015
Expands
global
growth
platform
for
titanium aerospace
components
Unveiled
Micromill™
for the World’s
most advanced aluminum alloy
Finalized
sale
of three
European rolling mills
to a subsidiary of Atlas Holdings, L.L.C.
Safely Executed
Australian
rolling
mill
closures
of
200
kmt
capacity
Sold Jamalco
ownership interest
2
to Noble Group Ltd for
$140
million
Saudi Arabia
refinery
fully
operational
;
first alumina
from Saudi Arabian bauxite
Sold
stake in
Mt. Holly smelter
to Century Aluminum Company for
$67.5
million

William Oplinger
Executive Vice President and Chief Financial Officer
5
January 12, 2015
[Alcoa logo]

Income Statement Summary
6
See appendix for Adjusted Income reconciliation.
[Alcoa logo]
$ Millions, except aluminum prices and per-share amounts
4Q13
3Q14
4Q14
Prior Year
Change
Sequential
Change
Realized Aluminum Price ($/MT)
$2,157
$2,538
$2,578
$421
$40
Revenue
$5,585
$6,239
$6,377
$792
$138
Cost of Goods Sold
$4,708
$4,904
$4,973
$265
$69
COGS % Revenue
84.3%
78.6%
78.0%
(6.3 % pts.)
(0.6 % pts.)
Selling,
General Administrative, Other
$255
$243
$271
$16
$28
SGA % Revenue
4.6%
3.9%
4.2%
(0.4 % pts.)
0.3 % pts.
Other
(Income) Expenses
, Net
($10)
$23
($6)
$4
($29)
Impairment of Goodwill
$1,731
-
-
($1,731)
-
Restructuring and Other Charges
$380
$209
$388
$8
$179
Effective Tax Rate
(15.6%)
60.3%
51.3%
66.9% pts.
(9.0% pts.)
EBITDA
$565
$1,035
$1,073
$508
$38
Net (Loss) Income
($2,339)
$149
$159
$2,498
$10
Net (Loss) Income Per Diluted Share
($2.19)
$0.12
$0.11
$2.30
($0.01)
Income
per Diluted
Share excl
Special Items
$0.04
$0.31
$0.33
$0.29
$0.02

Special Items
1)  Total restructuring-related charges in 4Q14 of $200 million  (80 percent non-cash,  20 percent cash)                                       
See appendix for Adjusted Income reconciliation       
7
[Alcoa logo]
$ Millions, except per-share amounts
4Q13
3Q14
4Q14
Income Statement
Classification
Segment
Net (Loss) Income
($2,339)
$149
$159
Net (Loss) Income Per Diluted Share
($2.19)
$0.12
$0.11
Restructuring
-Related
($46)
($202)
($200)
Restructuring
and Other
Charges/COGS
Corporate /
Primary Metals
Tax Items
($361)
-
($53)
Income Taxes
Corporate
Acquisition Costs
-
($14)
($22)
SG&A/Interest Expense
Corporate
Mark-to-Market Energy Contracts
$7
($14)
$2
Other (Income) Expenses, Net
Corporate
Gain on
Asset Sale
-
$9
-
Other Expenses, Net
Corporate
Government Investigations
Resolution
($243)
-
-
Restructuring
and Other
Charges
Corporate
Goodwill Impairment
($1,719)
-
-
Impairment of
Goodwill
Corporate
Capital Projects Write-off
($13)
-
-
Restructuring
and Other
Charges
Corporate
Saudi JV Potline
Impact/Massena Fire
($4)
-
-
COGS
/ Other Income, Net
Primary Metals /
EPS / Corporate
Special Items
($2,379)
($221)
($273)
Net Income excl Special Items
$40
$370
$432
Net
Income
per Diluted
Share excl Special Items
$0.04
$0.31
$0.33
1

Earnings Growth Driven by Performance and Pricing
8
See appendix for Adjusted Income reconciliation
Net Income excluding Special Items ($ Millions)
Market
+$170
Performance
+$390
Cost Headwinds/Other
-$168
158
16
26
210
153
27
37
133
432
40
Volume
LME
4Q 13
Energy
Raw
Materials
Currency
Price
/ Mix
Productivity
Cost
Increases
/ Other
4Q 14
[Alcoa logo]

4
th
Quarter Cash Flow Overview
9
See appendix for Free Cash Flow reconciliation
($ Millions)
4Q13
3Q14
4Q14
Net (Loss) Income before Noncontrolling
Interests
($2,310)
$131
$114
DD&A
$350
$346
$336
Change in Working Capital
$522
($411)
$642
Pension Contributions
($108)
($164)
($55)
Other Adjustments
$2,466
$347
$421
Cash from Operations
$920
$249
$1,458
Dividends to Shareholders
($33)
($36)
($56)
Equity Issuance
-
$1,213
-
Change in Debt
($14)
$981
($110)
Net (Distributions)/Contributions from Noncontrolling
Interests
($29)
($20)
($36)
Other Financing Activities
$11
$2
$21
Cash from Financing Activities
($65)
$2,140
($181)
Capital Expenditures
($422)
($283)
($469)
Acquisitions/Divestitures/Asset Sales
$5
$5
($2,138)
Other Investing Activities
($8)
($3)
($46)
Cash from Investing Activities
($425)
($281)
($2,653)
Cash on Hand
$1,437
$3,272
$1,877
4Q13, 3Q14 & 4Q14 Cash Flow
4Q14 CFO
$1.5 billion
Highest quarter
in history
$1.9 billion
cash on hand
[Alcoa logo]

10
Share Gains Drive Engineered Products and Solutions Revenue Growth
See appendix for EBITDA reconciliation
[Alcoa logo]
$ Millions
* Excluding Firth Rixson
4Q 13
3Q 14
4Q 14*
Party Revenue ($ Millions)
1,405
1,495
1,566
ATOI ($ Millions)
168
209
165
EBITDA Margin
20.3%
23.5%
18.9%
4
th
Quarter Results
4
th
Quarter Business Highlights
1
st
Quarter Outlook
4
th
Quarter Performance Bridge
4Q14 Actual and 1Q15 Outlook –
Engineered Products and Solutions
$61
$15
4Q14
$165
Firth Rixson
-$12
Cost
Increases
-$47
Productivity
Price / Mix
-$13
Volume
Currency
-$7
4Q13
$168
* EBITDA Margin excluding Firth Rixson of 20.6%
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
up
15%
to
20%
sequentially;
0%
to
5%
year-over-year
as
forex
pressures
are
expected
to
continue
($9M)
Revenue
up
11%
year-over-year
(organic
up
6%)
driven
by
strong
share
gains
across
all
markets
19
th
consecutive
quarter
of
year-over-year
ATOI
growth*
Firth
Rixson
integration
ATOI
impact
of
$12M
Year-over-year
improvement
driven
by
productivity,
strong
Aero,
Commercial
Transportation,
Building
&
Construction
revenues*

See appendix for EBITDA reconciliation
GRP = Global Rolled Products
11
Aero Mix, Auto Sheet Growth, Productivity Drive Strong GRP Earnings
[Alcoa logo]
$ Millions
4Q 13
3Q 14
4Q 14
Party Revenue ($ Millions)
1,645
1,926
1,888
ATOI ($ Millions)
21
103
71
EBITDA/MT ($)
185
409
317
4
th
Quarter Business Highlights
1
st
Quarter Outlook
4
th
Quarter Performance Bridge
4Q14 Actual and 1Q15 Outlook –
Global Rolled Products
4
th
Quarter Results
$60
$21
$29
$71
$21
4Q14
Cost
Increases
/ Other
-$47
Energy
-$5
Productivity
Price /
Mix
-$7
Volume
Currency
-$1
LME
4Q13

Alumina Earnings Nearly Triple Sequentially
12
[Alcoa logo]
$ Millions
4Q14 Actual and 1Q15 Outlook –
Alumina
4
th
Quarter Results
4
th
Quarter Business Highlights
4
th
Quarter Performance Bridge
$13
$10
$55
$1
$40
$16
$178
$62
4Q14
Cost
Increases
/ Other
-$19
Energy
Prod-
uctivity
Price
/ Mix
Volume
Currency
LME
3Q14
4Q 13
3Q 14
4Q 14
Production (kmt)
4,249
4,196
4,161
Party Shipments (kmt)
2,578
2,714
2,928
Party Revenue ($ Millions)
832
886
1,017
Party Price ($/MT)
316
320
343
ATOI ($ Millions)
70
62
178
1
st
Quarter Outlook

Primary Earnings Up on Productivity, Pricing and Currency
13
[Alcoa logo]
$ Millions
4Q14 Actual and 1Q15 Outlook –
Primary Metals
4
th
Quarter Results
4
th
Quarter Business Highlights
4
th
Quarter Performance Bridge
$30
$11
$33
$23
$1
$267
$245
Cost
Increases
/ Other
-$7
Energy
-$61
Prod-
uctivity
Price
/ Mix
Volume
-$8
Currency
LME
3Q14
4Q14
3Q
Portfolio
actions
4Q 13
3Q 14
4Q 14
Production (kmt)
866
760
731
3
rd
Party Shipments (kmt)
717
642
637
3
rd
Party Revenue ($ Millions)
1,618
1,865
1,852
3
rd
Party Price ($/MT)
2,157
2,538
2,578
ATOI ($ Millions)
(35)
245
267
1
st
Quarter Outlook

Transformation Leads to Change in Net Income Sensitivities
14
Alcoa Net Income Sensitivities
LME
API
AUD
BRL
EUR
CAD
NOK
Benchmark
+/-
$100/MT
+/-
$10/MT
+/-
0.01 USD/AUD
+/-
0.01 BRL/USD
+/-
0.01 USD/EUR
+/-
0.01 CAD/USD
+/-
0.10 NOK/USD
2014
Sensitivity
$240M
N/A
$11M
$3M
$2M
$5M
$5M
2015
Sensitivity
$190M
$20M
$11M
$1M
$2M
$4M
$4M
[Alcoa logo]

Strong Performance Drives Earnings Growth, Highest Since 2008
15
See appendix for Adjusted Income reconciliation
Net Income excluding Special Items ($ Millions)
Market
+$107
Performance
+$1,113
Cost Headwinds
-$461
292
757
540
1,116
357
2013
Cost
Increases
/ Other
2014
Raw
Materials
48
Energy
31
Productivity
Price
/  Mix
Volume
64
Currency
123
LME
16
[Alcoa logo]

Sustained Working Capital Excellence
See appendix for days working capital reconciliation
16
[Alcoa logo]

17
See appendix for Net Debt reconciliation
Maintained Strong Balance Sheet
9,816
8,338
6,882
6,975
762
1,481
1,543
1,939
1,861
1,437
1,877
7,432
2010
9,165
7,622
2009
9,819
2008
10,578
2013
8,319
2012
8,829
6,968
2011
9,371
2014
8,852
(Millions)
Debt to Cap
Cash
Net Debt
38.1%
42.5%
38.7%
34.9%
35.3%
Debt, Net Debt, and Debt-to-Capital %
37.4%
34.8%
[Alcoa logo]

18
Achieved Overarching Free Cash Flow Goal; Actions Deployed for 2015
See appendix for Free Cash Flow reconciliation
$1,194M
$484M
$735M
$91M
37.4%
Achieved overarching Free Cash Flow goal
Productivity
$850M
Growth Capital
$500M
Sustaining Capital
$750M
Saudi JV
Investment
$125M
Debt-to-Cap
30-35%
Positive
Free
Cash
Flow
Actual
2014 and 2015 annual financial targets and 2014 full year results
$455M
Attain 2.25 to 2.75 Debt-to-EBITDA
Capture Productivity Gains of $900M
Control Sustaining Capital of $725M
Taking the right actions in 2015
Manage Return-Seeking Capital of $750M
Generate $500M+ of Free Cash Flow
[Alcoa logo]

Market fundamentals remain positive
7% global demand growth
Alumina surplus, Aluminum balanced
Inventory at lowest level since Nov 2008
Premiums remain high
See appendix for full scale charts
19
$1,000
$1,500
$2,000
$2,500
$3,000
0
7
14
21
28
35
42
49
56
63
70
77
84
91
98
105
China Incl SRB
Producer
Japan Port
LME On Warrant
Cancelled Warrants
Off Exchange
LME 3 Month
Days of
Consumption
108 days
LME Cash Price
$2,180/MT
Days of
Consumption
83 days
LME Cash Price
$2,663/MT
Global Inventories
Decline 45 days
from the ’09 peak
Days of
Consumption
Days of
Consumption
63 days
LME Cash Price
$1,913/MT
$ per metric ton
Global inventories vs. LME price over time $
[Alcoa logo]
28.0
6.7
6.7
4.3
2.2
2.1
2.2
1.1
1.0
7%
4%
1.5%
1%
10%
1.5%
5%
1%
8%
7%
56.4 mmt
1
Other includes Africa, E. Europe, Latin America ex Brazil, and Oceania
2015E Primary Aluminum Consumption (mmt), Annualized Growth (%)
China
Europe
North America
North Asia
India
SE Asia
MENA
Russia
Brazil
Other ¹
2.1
2015 demand +7%
World ex China +4%
2015E Aluminum Supply/Demand Balance
’000 mt
China
Rest of World
2015 Production
26,773
25,996
2015 Production to be added
4,400
716
2015 Capacity (curtailed) or restarted
(1,700)
226
Total Supply
29,473
26,938
Demand
(28,060)
(28,389)
Net Balance
1,413
(1,451)
2015E Alumina Supply/Demand Balance
’000 mt
China
Rest of World
2015 Production
47,522
55,407
2015 Production to be added
5,030
3,113
2015 Capacity (curtailed) or restarted
1,331
(496)
Imports/(exports)
3,000
(3,000)
Total supply
56,883
55,024
Demand
(56,883)
(52,101)
Net Balance
0
2,923
Supply/Demand Analysis
2014
Surplus
490
2014
Deficit
(948)
Deficit
(38)
SURPLUS
2,923

Klaus Kleinfeld
Chairman and Chief Executive Officer
20
January 12, 2015
[Alcoa logo]

Another Strong year for Aerospace; Steady growth in Automotive
Source:  Alcoa analysis
1) International Air Transport Association 2015 Expectations
21
[Alcoa logo]

Global Heavy Duty Truck and Packaging Markets Stable
Source:  Alcoa analysis
22
[Alcoa logo]

Solid Commercial B&C Growth; Global Airfoil Market Improves
Source:  Alcoa analysis
B&C  = Building and construction
23
[Alcoa logo]

Transforming Alcoa –
Creating Compelling Sustainable Value
24
[Alcoa logo]

Driving Value-Add Growth: Revenues Up, Profits Up
1)
Includes
forecasted
Firth
Rixson
revenue
of
$1.6B
in
2016
2)
Adjusted
to
exclude
~$975M
related
to
5
rolling
mills
closed
or
sold
in
Australia,
Spain
and
France
in
2014
3)
Represents
average
of
the
EBITDA/MT
for
years
2010
through
2012
25
[Alcoa logo]
Key value-add business metrics: 2014 actual and 2013-2016 targets
EPS
EBITDA margin exceeding
historical high of 21.5%
21.9%
EBITDA Margin
Executed in 2014…
…Strong progress toward 2016
targets
$6.0B
Revenue
2016
$5.7B
2013
$8.5B¹
GRP
$900M
from
innovation and
share gains
+$2.8B
$7.4B
Revenue
$339
EBITDA/MT
EBITDA/MT at or above
average historical high
of $344/MT
3
$8.1B
2013
$7.1B
2016
$7.1B
$6.1B²
$900M
from
innovation and
share gains
+$1.0B
Revenue
Revenue
Firth Rixson Revenue
Divestiture/Closure

Expanding Multi-Material Portfolio through Smart Investments
1)  Expected to close in 1Q2015
APP = Alcoa Power & Propulsion   CFRP = carbon fiber reinforced polymer
26
[Alcoa logo]
Davenport $190M: Advances Aero/Industrial Offerings
Drives
Al penetration
on
CFRP
platforms;                 
enables industry’s
largest monolithic wing ribs
Hampton/La Porte $125M: Extends Jet Engine Reach
Firth Rixson: Grows multi-material engine capability
Establishes
Ti casting capabilities
in EU
Expands
Al casting
capacity in EU
TITAL
Ti revenue
expected to
increase
70%
by 2019
Alcoa’s recent multi-material investments to capture growth
TITAL
1
: Expands structural casting offerings
Organic growth extends material range
World’s
first
Al-Li fan blade
;                             
-
FAA Certifies P&W
PurePower
®
Engine
for
A320 neo
Largest
Al-Li
ingots
50%
larger
than
the nearest competitor
)
Lafayette $90M+: Grows Al-Lithium Capability
Drives growth
in aero, transportation,   
auto and consumer electronics markets
Metal
Disks
2016
$1.6B
revenue
$350M
EBITDA
Hampton: Cuts
blade
weight 20%
;
improved
aerodynamics
La Porte:
Structural castings 
~60% larger
Primarily
Ni-based
Super alloys
~$100M
revenue
APP
$2.2B
revenue
in 2016
(December 19, 2014)
Global Leader
in seamless rolled
rings
Largest
seamless
Rings
200”
in diameter
Rings
Multi-Material
mix: 60%
Ni
, 25%
Ti
, 15%
Steel/Al
Integrated Nickel Supply
of cast stick and billet
Specialized Isothermal
process from
Powder Metal
Rotating
disks
from
Super
alloys and
Ti
alloys
Full Range
forged closed-die aero
Engine Disks

Lightweighting: OEMs Need It, Consumers Like It
Annual
Savings
=
((15,000
Hwy
Miles/Yr
÷
17
Hwy
MPG)
–
(15,000
Hwy
Miles/Yr
÷
26
Hwy
MPG))
x
$X/gal
27
[Alcoa logo]

Micromill™
Differentiated Alloy: Win-Win for Customers and Alcoa
28
HSS = High Strength Steel
[Alcoa logo]
World’s most advanced aluminum alloy for Next-Gen automotive products
40%
STRONGER
LIGHTER
vs. HSS
vs. ingot
based Al
vs. ingot
based Al
vs. HSS
Creating value for the customer
Creating additional opportunity for  Alcoa
MORE FORMABLE
Lower weight,
, improved
formability
and
design options
Stronger
for
improved dent resistance
Reduces
complexity
of scrap separation
Lowers
OEM system
cost
from
streamlined alloy
portfolio
Validated
Class A
surface quality
for
external
panels
Micromill™
alloy characteristics and benefits to the customer and Alcoa
2X
30%
30%
Unique
Alloy
Micro
Structure
Completed
successful
customer
trials
Qualifying
material for
next-gen
auto
platforms
Anticipate
value-add, premium
margins
Secured strategic
development customer
Enables Alcoa to attack the
$3.5B
total
market
for      
steel
automotive
applications with
differentiated
metal
Hood Inner

Breakthrough
Casting
Technology:
Fast
and
Flexible;
Small
and
Powerful
29
WIP = Work In Process
[Alcoa logo]

Improving Strong Alumina Position: Lower Cost, Continuing Price Shift
30
1)
Jamaica
bauxite
mine
and
alumina
refinery
owned
55%
by
Alcoa
Minerals
of
Jamaica,
L.L.C.
NG = Natural Gas
[Alcoa logo]

Reshaping the Smelting Portfolio: More Competitive, Growing Value-Add
31
[Alcoa logo]
Generate
additional productivity
gains
Sale
of
Mt. Holly complete
in 4Q14;
115
kmt
Alcoa
capacity
Executing to improve global competitiveness
2014 actions
Reduced
high cost
capacity
by
549 kmt
Generated
$269M
in
productivity gains
Quebec energy
contracts = $38/MT
savings
2014 cost position stable, 5% pts to go
$/MT
Production (MMT)
Growing value-add products to meet end market demand
Value-add products as % of total shipments
Source:  CRU and Alcoa analysis
57%
65%
70%
2010
2014
2016E
e.g.,
Slab
casting
supporting
automotive
growth
Global aluminum cost curve, actions to lower cost position, and value-add cast house product growth
2,500
3,000
1,000
1,500
500
0
65
60
55
50
45
2,000
40
35
30
25
20
15
10
5
0
2010:
51
st
Percentile
2013:
43
rd
Percentile
2014:
43
rd
Percentile
2016:
38
th
Percentile

The Right Actions to Drive Growth, Operational Performance in 2015
32
[Alcoa logo]
2015 annual financial targets
Deliver
Operational
Performance
Capture Productivity Gains of $900M
Invest in Growth;
Manage the Base
Manage Return-Seeking Capital of $750M
Control Sustaining Capital of $725M
Strengthen the
Balance Sheet
Attain 2.25 to 2.75 Debt-to-EBITDA
Generate
$500M+       
of Free
Cash Flow

Transformation is Creating Compelling Sustainable Value
33
[Alcoa logo]

Kelly Pasterick
Vice President, Investor Relations
Alcoa
390 Park Avenue
New York, NY 10022-4608
Telephone:  (212) 836-2674
www.alcoa.com
Additional Information
34
[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
35
+/-
$10/MT = +/-
$20
million
API/Spot Alumina Annual Net Income Sensitivity
[Alcoa logo]

Revenue Change by Market
36
6%
28%
(3%)
(1%)
(5%)
9%
(11%)
24%
15%
(1%)
10%
43%
6%
19%
3%
(5%)
10%
28%
22%
15%
17%
4%
6%
6%
7%
1%
12%
2%
16%
29%
Aerospace
Automotive
B&C
Comm. Transport
Industrial Products
IGT
Packaging
Distribution/Other
Alumina
Primary Metals
4Q14 Third-Party Revenue
Sequential
Change
Year-Over-Year
Change
[Alcoa logo]

Special Items
See appendix for Adjusted Income reconciliation.
37
Pre-tax, Before NCI
After-tax, After NCI
$ Millions, except per-share amounts
3Q14
4Q14
3Q14
4Q14
Income Statement
Classification
Segment
Income from Continuing Operations
$330
$234
$149
$159
Income Per Diluted Share
-
-
$0.12
$0.11
Restructuring-Related
($242)
($388)
($202)
($200)
Restructuring and
Other Charges/COGS
Corporate / All
Tax Items
-
-
-
($53)
Income Taxes
Corporate
Acquisition Costs
($20)
($25)
($14)
($22)
SG&A/Interest
Expense
Corporate
Mark-to-Market Energy Contracts
($27)
$2
($14)
$2
Other Expenses, Net
Corporate
Gain on Asset Sale
$15
-
$9
-
Other Expenses, Net
Corporate
Special Items
($274)
($411)
($221)
($273)
Income from Continuing Ops excl Special Items
$604
$645
$370
$432
Income
per Diluted
Share excl
Special Items
-
-
$0.31
$0.33
[Alcoa logo]

38
Alcoa Segment Bridges
EPS = Engineered Products and Solutions
GRP = Global Rolled Products
$ Millions
$ Millions
Alumina Year-over-Year Bridge
$ Millions
$ Millions
EPS Sequential Quarter Bridge
3Q14
$103
4Q14
$71
Cost
Increases/
Other
-$32
Energy
-$5
Prod-
uctivity
$12
Price / Mix
$10
Volume
-$2
Currency
-$2
Metal
-$13
GRP Sequential Quarter Bridge
4Q14
$267
Cost
Increases
/ Other
-$28
Raw Mat
$12
Energy
-$8
Prod-
uctivity
$47
Price /
Mix
$159
Volume
$0
FX
$29
LME
$91
4Q13
-$35
Primary Metals Year-over-Year Bridge
4Q14
$178
Cost
Increases
/ Other
-$60
Raw Mat
$17
Energy
-$15
Prod-
uctivity
$45
Price /
Mix
$14
Volume
-$16
FX
$45
LME
$78
4Q13
$70
4Q14
$165
Cost
Increases/
Other
-$20
Price / Mix
-$14
Volume
Prod-
uctivity
$7
Currency
-$3
3Q14
-$2
$209
-$12
Firth Rixson
[Alcoa logo]

Composition of Regional Premium Pricing Convention
39
[Alcoa logo]
2015E Shipments
Regional Premiums
Estimated Pricing Convention
50%
Midwest
–
Platts
15-day lag
35%
Rotterdam DDP
–
Metal Bulletin
45-day lag
10%
CIF Japan
–
Platts
Month prior to Quarter start
5%
Negotiated
Annual

Alcoa smelting closures and curtailments
40
*  In 4Q14 Alcoa sold its ownership stake in the Mt. Holly smelter
Location
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*
2014
115
Total
1,368
Alcoa smelting capacity closures, since Dec 2007
Location
kmt
Rockdale
191
Sao Luis
194
Pocos
96
Intalco
49
Wenatchee
41
Aviles
36
Portland
30
La Coruna
28
Total
665
Alcoa smelting capacity curtailments
[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
41
[Alcoa logo]
Fuel Oil
9%
Natural gas
12%
Caustic
9%
Bauxite
27%
Conversion
43%
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
1
$13m per $1/GJ
1
Caustic soda
3 -
6 months
Spot & semi-
annual
$8m per
$10/DMT
Refining Cost Structure
Alumina
35%
Carbon
12%
Power
26%
Materials
7%
Conversion
20%
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

Source: Alcoa estimates, CRU, Harbor, Wood Mackenzie, SMM
2015 growth maintains momentum from 2014
42
[Alcoa logo]
28.0
6.7
6.7
4.3
2.2
2.1
2.2
1.1
1.0
7%
4%
1.5%
1%
10%
1.5%
5%
1%
8%
7%
56.4 mmt
1
Other includes Africa, E. Europe, Latin America ex Brazil, and Oceania
2015E Primary Aluminum Consumption (mmt), Annualized Growth (%)
China
Europe
North America
North Asia
India
SE Asia
MENA
Russia
Brazil
Other ¹
2.1
2015 demand +7%
World ex China +4%

43
Source: Alcoa analysis, Brook Hunt, CRU, CNIA, NBS, Chinese Customs
Alumina in surplus; Aluminum remains essentially balanced
[Alcoa logo]
2015E Aluminum Supply/Demand Balance
’000 mt
China
Rest of World
2015 Production
26,773
25,996
2015 Production to be added
4,400
716
2015 Capacity (curtailed) or restarted
(1,700)
226
Total Supply
29,473
26,938
Demand
(28,060)
(28,389)
Net Balance
1,413
(1,451)
2015E Alumina Supply/Demand Balance
’000 mt
China
Rest of World
2015 Production
47,522
55,407
2015 Production to be added
5,030
3,113
2015 Capacity (curtailed) or restarted
1,331
(496)
Imports/(exports)
3,000
(3,000)
Total supply
56,883
55,024
Demand
(56,883)
(52,101)
Net Balance
0
2,923
Supply/Demand Analysis
2014
Surplus
490
2014
Deficit
(948)
Deficit
(38)
SURPLUS
2,923

Source: Alcoa estimates, IAI, LME, Marubeni, Shanghai Metal Exchange
Inventory declines 7 days in 2H, lowest level since Nov 2008
44
[Alcoa logo]
Global inventories vs. LME price over time $

Premiums remain at record highs
Source:
Monthly
average
of
daily
prices
-
Platts
Metals
Week
45
[Alcoa logo]

Reconciliation
of
ATOI
to
Consolidated
Net
(Loss)
Income
Attributable
to
Alcoa
46
(in millions)
4Q13
2013
1Q14
2Q14
3Q14
4Q14
2014
Total segment ATOI
$224
$1,217
$325
$418
$619
$681
$2,043
Unallocated amounts (net of tax):
Impact of LIFO
40
52
(7)
(8)
(18)
(21)
(54)
Interest expense
(73)
(294)
(78)
(69)
(81)
(80)
(308)
Noncontrolling interests
(29)
(41)
19
9
18
45
91
Corporate expense
(72)
(284)
(67)
(70)
(74)
(83)
(294)
Impairment of goodwill
(1,731)
(1,731)
–
–
–
–
–
Restructuring and other charges
(283)
(607)
(321)
(77)
(189)
(307)
(894)
Other
(415)
(597)
(49)
(65)
(126)
(76)
(316)
Consolidated net (loss)
income attributable to Alcoa
$(2,339)
$(2,285)
$(178)
$138
$149
$159
$268
[Alcoa logo]

Reconciliation of Adjusted Income
47
[Alcoa logo]
(in millions, except per-
share amounts)
Income
Diluted EPS
Quarter ended
Quarter ended
December 31,
September 30,
December 31,
December 31,
September 30,
December 31,
2013
2014
2014
2013
2014
2014
Net (loss) income
attributable to Alcoa
$(2,339)
$149
$159
$(2.19)
$0.12
$0.11
Restructuring and
other charges
302
175
200
Discrete tax items*
364
25
16
Other special items**
1,713
21
57
Net income
attributable to Alcoa
–
as adjusted
$40
$370
$432
0.04
0.31
0.33
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.
* 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);
•
for
the
quarter
ended
September
30,
2014,
a
charge
for
the
remeasurement
of
certain
deferred
tax
assets
of
a
subsidiary
in
Brazil
due
to
a
tax
rate
change
($34)
and
a
net
benefit
for
a
number
of
small
items
($9);
and
•
for
the
quarter
ended
December
31,
2013,
a
charge
for
valuation
allowances
related
to
certain
Spain
and
U.S.
deferred
tax
assets
($372)
and
a
net
benefit
for
other
miscellaneous
items
($8).
** Other special items include the following:
•
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);
•
for the quarter ended September 30, 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 ($33), a
write-down of inventory related to the permanent closure of smelters in Italy and Australia ($27), costs associated with a planned acquisition of an aerospace business ($14), a net unfavorable change in certain mark-to-
market energy derivative contracts ($14), a gain on the sale of an equity investment in a China rolling mill ($9), and an unfavorable tax impact related to the interim period treatment of operational losses in certain foreign
jurisdictions for which no tax benefit was recognized ($8); and
•
for the quarter ended December 31, 2013, an impairment of goodwill ($1,719), an unfavorable impact related to a temporary shutdown of one of the two smelter potlines at the joint venture in Saudi Arabia due to a period of
pot instability ($9), a net favorable change in certain mark-to-market energy derivative contracts ($7), an insurance recovery related to the March 2012 cast house fire at the Massena, NY location ($5), and a favorable tax
impact related to the interim period treatment of operational losses in certain foreign jurisdictions for which no tax benefit was recognized during the nine months ended September 30, 2013 ($3).

Reconciliation of Adjusted Income, continued
48
[Alcoa logo]
(in millions, except per-
share amounts)
Income
Diluted EPS
Year ended
Year ended
December 31,
December 31,
December 31,
December 31,
2013
2014
2013
2014
Net (loss) income
attributable to Alcoa
$(2,285)
$268
$(2.14)
$0.21
Restructuring and
other charges
585
703
Discrete tax items*
360
33
Other special items**
1,697
112
Net income
attributable to Alcoa
–
as adjusted
$357
$1,116
0.33
0.92
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.
*
Discrete
tax
items
include
the
following:
•
for
the
year
ended
December
31,
2014,
a
charge
for
the
remeasurement
of
certain
deferred
tax
assets
of
a
subsidiary
in
Brazil
due
to
a
tax
rate
change
($31),
a
charge
for
the
remeasurement
of
certain
deferred
tax
assets
of
a
subsidiary
in
Spain
due
to
a
tax
rate
change
($16),
and
a
net
benefit
for
a
number
of
other
items
($14);
and 
•
for
the
year
ended
December
31,
2013,
a
charge
for
valuation
allowances
related
to
certain
Spain
and
U.S.
deferred
tax
assets
($372),
a
benefit
related
to
the
reinstatement
under
the
American
Taxpayer
Relief
Act
of
2012
of
two
tax
provisions
that
were
applied
in
2013
to
Alcoa’s
U.S
income
tax
return
for
calendar
year
2012
($19),
a
charge
related
to
prior
year
taxes
in
Spain
and
Australia
($10),
and
a
net
benefit
for
other
miscellaneous
items
($3).
**
Other
special
items
include
the
following:
•
for
the
year
ended
December
31,
2014,
the
write-down
of
inventory
related
to
the
permanent
closure
of
a
smelter
in
Italy,
a
smelter
and
two
rolling
mills
in
Australia,
and
a
smelter
in
the
United
States
($47),
costs
associated
with
current
and
future
acquisitions
of
aerospace
businesses
($47),
a
gain
on
the
sale
of
both
a
mining
interest
in
Suriname
and
an
equity
investment
in
a
China
rolling
mill
($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
($19),
costs
associated
with
preparation
for
and
ratification
of
a
new
labor
agreement
with
the
United
Steelworkers
($11),
a
net
unfavorable
change
in
certain
mark-to-market
energy
derivative
contracts
($6),
and
a
loss
on
the
write-down
of
an
asset
to
fair
value
($2);
and
•
for
the
year
ended
December
31,
2013,
an
impairment
of
goodwill
($1,719),
a
net
insurance
recovery
related
to
the
March
2012
cast
house
fire
at
the
Massena,
NY
location
($22),
a
net
favorable
change
in
certain
mark-to-
market
energy
derivative
contracts
($15),
an
unfavorable
impact
related
to
a
temporary
shutdown
of
one
of
the
two
smelter
potlines
at
the
joint
venture
in
Saudi
Arabia
due
to
a
period
of
pot
instability
($9),
and
a
write-down
of
inventory
related
to
the
permanent
closure
of
two
potlines
at
a
smelter
in
Canada
and
a
smelter
in
Italy
($6).

Reconciliation of Alcoa Adjusted EBITDA
49
[Alcoa logo]
($ in millions)
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
4Q13
3Q14
4Q14
Net income (loss) attributable to Alcoa
$1,310
$1,233
$2,248
$2,564
$(74)
$(1,151)
$254
$611
$191
$(2,285)
$268
$(2,339)
$149
$159
Add:
Net income (loss) attributable to noncontrolling
interests
233
259
436
365
221
61
138
194
(29)
41
(91)
29
(18)
(45)
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
312
199
120
Other (income) expenses, net
(266)
(478)
(236)
(1,920)
(59)
(161)
5
(87)
(341)
(25)
47
(10)
23
(6)
Interest expense
271
339
384
401
407
470
494
524
490
453
473
112
126
122
Restructuring
and other charges
(29)
266
507
268
939
237
207
281
172
782
1,168
380
209
388
Impairment
of goodwill
–
–
–
–
–
–
–
–
–
1,731
–
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
350
347
335
Adjusted EBITDA
$3,234
$3,362
$5,422
$4,795
$3,313
$359
$2,704
$3,260
$2,105
$2,546
$3,556
$565
$1,035
$1,073
Sales
$21,370
$24,149
$28,950
$29,280
$26,901
$18,439
$21,013
$24,951
$23,700
$23,032
$23,906
$5,585
$6,239
$6,377
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%
10.1%
16.6%
16.8%
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.

Reconciliation of Alumina Adjusted EBITDA
50
[Alcoa logo]
($ in millions, except per metric ton amounts)
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
4Q13
3Q14
4Q14
After-tax operating income (ATOI)
$632
$682
$1,050
$956
$727
$112
$301
$607
$90
$259
$370
$70
$62
$178
Add:
Depreciation
, depletion, and amortization
153
172
192
267
268
292
406
444
455
426
387
102
100
90
Equity
(income) loss
(1)
–
2
(1)
(7)
(8)
(10)
(25)
(5)
4
29
2
7
10
Income
taxes
240
246
428
340
277
(22)
60
179
(27)
66
153
21
26
75
Other
(46)
(8)
(6)
2
(26)
(92)
(5)
(44)
(8)
(6)
(28)
(1)
(2)
2
Adjusted EBITDA
$978
$1,092
$1,666
$1,564
$1,239
$282
$752
$1,161
$505
$749
$911
$194
$193
$355
Production (thousand metric tons) (kmt)
14,343
14,598
15,128
15,084
15,256
14,265
15,922
16,486
16,342
16,618
16,606
4,249
4,196
4,161
Adjusted EBITDA / Production
($ per metric ton)
$68
$75
$110
$104
$81
$20
$47
$70
$31
$45
$55
$46
$46
$85
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.

Reconciliation of Primary Metals Adjusted EBITDA
51
[Alcoa logo]
($ in millions, except per metric ton amounts)
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
4Q13
3Q14
4Q14
After-tax operating income (ATOI)
$808
$822
$1,760
$1,445
$931
$(612)
$488
$481
$309
$(20)
$594
$(35)
$245
$267
Add:
Depreciation
, depletion, and amortization
326
368
395
410
503
560
571
556
532
526
494
128
124
117
Equity
(income) loss
(58)
12
(82)
(57)
(2)
26
(1)
7
27
51
34
22
–
(11)
Income
taxes
314
307
726
542
172
(365)
96
92
106
(74)
203
(34)
95
89
Other
20
(96)
(13)
(27)
(32)
(176)
(7)
2
(422)
(8)
(6)
(6)
1
(2)
Adjusted EBITDA
$1,410
$1,413
$2,786
$2,313
$1,572
$(567)
$1,147
$1,138
$552
$475
$1,319
$75
$465
$460
Production (thousand metric tons) (kmt)
3,376
3,554
3,552
3,693
4,007
3,564
3,586
3,775
3,742
3,550
3,125
866
760
731
Adjusted EBITDA / Production
($ per metric ton)
$418
$398
$784
$626
$392
$(159)
$320
$301
$148
$134
$422
$87
$612
$629
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.

Reconciliation of Global Rolled Products Adjusted EBITDA
52
[Alcoa logo]
($ in millions, except per metric ton amounts)
2004
2005
2006
2007
2008
2009
2010*
2011*
2012*
2013
2014
4Q13
3Q14
4Q14
After-tax operating income (ATOI)
$290
$300
$317
$151
$(41)
$(106)
$241
$260
$346
$252
$312
$21
$103
$71
Add:
Depreciation
, depletion, and amortization
200
220
223
227
216
227
238
237
229
226
235
58
62
57
Equity
loss
1
–
2
–
–
–
–
3
6
13
27
4
8
8
Income
taxes
97
135
113
77
14
12
103
98
159
108
124
5
42
25
Other
1
1
20
1
6
(2)
1
1
(2)
–
(1)
1
–
–
Adjusted EBITDA
$589
$656
$675
$456
$195
$131
$583
$599
$738
$599
$697
$89
$215
$161
Total shipments (thousand metric tons) (kmt)
2,136
2,250
2,376
2,482
2,361
1,888
1,755
1,866
1,943
1,989
2,056
481
526
508
Adjusted EBITDA / Total shipments
($ per metric ton
)
$276
$292
$284
$184
$83
$69
$332
$321
$380
$301
$339
$185
$409
$317
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.
* The average Adjusted EBITDA per metric ton of these three years equals $344.

Reconciliation of Engineered Products and Solutions Adjusted EBITDA
53
[Alcoa logo]
($ in millions)
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014*
4Q13
3Q14
4Q14*
After-tax operating income (ATOI)
$161
$276
$382
$423
$522
$311
$419
$537
$612
$726
$767
$168
$209
$165
Add:
Depreciation
, depletion, and
amortization
168
160
152
163
165
177
154
158
158
159
173
40
40
52
Equity
loss (income)
–
–
6
–
–
(2)
(2)
(1)
–
–
–
–
–
–
Income
taxes
70
120
164
184
215
138
198
258
297
348
374
79
100
81
Other
106
(11)
(2)
(7)
2
1
–
(1)
(9)
(2)
–
(2)
2
(2)
Adjusted EBITDA
$505
$545
$702
$763
$904
$625
$769
$951
$1,058
$1,231
$1,314
$285
$351
$296
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
$1,405
$1,495
$1,566
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%
20.3%
23.5%
18.9%
*
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,
EBITDA
Margin
was
20.6%
and
22.3%
for
the
quarter
and
year
ended
December
31,
2014,
respectively.
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.

Reconciliation of Free Cash Flow
54
[Alcoa logo]
(in millions)
Quarter ended
March 31,
2012
June 30, September 30, December 31,
2012
2012
2012
March 31,
2013
June 30, September 30,
2013
2013
December 31,
2013
March 31,
2014
June 30,
2014
September 30,
2014
December 31,
2014
Cash from
operations
$(236)
$537
$263
$933
$(70)
$514
$214
$920
$(551)
$518
$249
$1,458
Capital
expenditures
(270)
(291)
(302)
(398)
(235)
(286)
(250)
(422)
(209)
(258)
(283)
(469)
Free cash flow
$(506)
$246
$(39)
$535
$(305)
$228
$(36)
$498
$(760)
$260
$(34)
$989
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 Free Cash Flow, continued
55
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(in millions)
Quarter ended
March 31,
2009
June 30, September 30, December 31,
2009
2009
2009
March 31,
2010
June 30, September 30,
2010
2010
December 31,
2010
March 31,
2011
June 30,
2011
September 30,
2011
December 31,
2011
Cash from
operations
$(271)
$328
$184
$1,124
$199
$300
$392
$1,370
$(236)
$798
$489
$1,142
Capital
expenditures
(471)
(418)
(370)
(363)
(221)
(213)
(216)
(365)
(204)
(272)
(325)
(486)
Free cash flow
$(742)
$(90)
$(186)
$761
$(22)
$87
$176
$1,005
$(440)
$526
$164
$656
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.

Days Working Capital
56
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($ 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
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
Add: Deferred purchase price receivable*
85
144
104
53
50
223
347
339
238
371
438
395
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
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
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
Working Capital**
$2,213
$2,297
$2,259
$1,933
$2,059
$1,835
$1,960
$1,689
$1,790
$2,093
$2,142
$1,951
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
Days Working Capital
34
35
36
30
32
29
31
28
30
33
32
28
Days
Working
Capital
=
Working
Capital
divided
by
(Sales/number
of
days
in
the
quarter).
*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.
**
Beginning
January
1,
2014,
management
changed
the
manner
in
which
Working
Capital
is
measured
by
moving
from
an
end
of
quarter
Working
Capital
to
an
average
quarter
Working
Capital. 
This
change
will
now
reflect
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.

Reconciliation of Net Debt
57
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,
2008
2009
2010
2011
2012
2013
2014
Short-term borrowings
$478
$176
$92
$62
$53
$57
$54
Commercial paper
1,535
–
–
224
–
–
–
Long-term debt due within one year
56
669
231
445
465
655
29
Long-term debt, less amount due within
one year
8,509
8,974
8,842
8,640
8,311
7,607
8,769
Total debt
10,578
9,819
9,165
9,371
8,829
8,319
8,852
Less: Cash and cash equivalents
762
1,481
1,543
1,939
1,861
1,437
1,877
Net debt
$9,816
$8,338
$7,622
$7,432
$6,968
$6,882
$6,975
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Reconciliation of Net Debt-to-Capital
58
[Alcoa logo]
($ in millions)
December 31, 2013*
December 31, 2014
Debt-to-Capital
Cash and Cash
Equivalents
Net Debt-to-Capital
Debt-to-Capital
Cash and Cash
Equivalents
Net Debt-to-Capital
Total Debt
Short
-term borrowings
$57
$54
Long
-term debt due within
one year
655
29
Long
-term debt, less
amount
due within one
year
7,607
8,769
Numerator
$8,319
$1,437
$6,882
$8,852
$1,877
$6,975
Total Capital
Total debt
$8,319
$8,852
Total equity
13,512
14,813
Denominator
$21,831
$1,437
$20,394
$23,665
$1,877
$21,788
Ratio
38.1%
33.7%
37.4%
32.0%
*
In
the
fourth
quarter
of
2013,
Alcoa
recorded
an
impairment
of
goodwill
and
valuation
allowances
related
to
certain
Spain
and
U.S.
deferred
tax
assets,
which
represent
significant,
unusual
noncash
items
that
are
relevant
to
this
metric.
As
such,
if
these
items
were
excluded
from
the
denominator,
Debt-to-Capital
and
Net
Debt-to-Capital
at
December
31,
2013
would
be
34.8%
and
30.6%,
respectively.
Net
debt-to-capital
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.

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