EX-99.2 3 dex992.htm SLIDES PRESENTED DURING ALCOA INC. THIRD QUARTER 2006 EARNINGS CALL Slides presented during Alcoa Inc. third quarter 2006 earnings call
EXHIBIT 99.2
[Alcoa logo]
3rd Quarter 2006
Analyst Conference
October 10, 2006

2
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, 2005 and Forms 10-Q for the
quarters ended March 31, 2006 and June 30, 2006 filed with the
Securities and Exchange Commission.
Forward-Looking Statements

[Alcoa logo]
Alain J. P. Belda
Chairman and Chief Executive Officer

4
3   Quarter and YTD 2006
Financial Highlights
Income from continuing operations
of $1.9b
or $2.17 per share YTD and $540m or $0.62
per share for the quarter
YTD
revenues
of
$22.54b
and
$7.63b
for
the
quarter
YTD cash from operations
of $1.23b and
$748m for the quarter which includes a
discretionary pension contribution of $200m
Debt to cap
was 32.8%
YTD
annualized
ROC
of
14.3%
well
in
excess
of cost of capital
rd

5
Bloomberg ROC Trailing 12 Months
Including Growth Capex
Bloomberg ROC Trailing 12 Months
Excluding Growth Capex
Cash from Operations
Strong Performance Trends

6
Safety  -
Year to Date
Lost Work Days
Total Recordables
48%
Zero Incident Locations
52%
85%
15%
317
57
0
50
100
150
200
250
300
350
No LWD
LWD
# of
Locations
178
196
0
50
100
150
200
250
300
350
No TRR
TRR
# of
Locations

7
Operational Excellence,
Innovation and New Products
Achieved production records for five refineries
and the AWA system as a whole
Achieved production and shipments records at
the Russian mills
Developed and validated Bauxite Residue
Neutralization
Continued work on defense industry products

8
Growth, Sustainable Development            
and Portfolio Management
–
Received formal environmental approval by the Western Australian
government to proceed with the Wagerup refinery expansion
project
–
Secured five-year power supply that will allow us to operate two-
thirds of the Intalco smelter’s capacity
–
Chosen for the fifth time as component of Dow Jones Sustainability
Index based on Alcoa’s economic, environmental and social
performance
–
Signed definitive agreement to sell Alcoa Home Exteriors
–
Continuing to evaluate alternative structures and options for our soft
alloy extrusion assets

9
Global Environment
Premiums Continue to Strengthen
Source:  Platts

10
Source:  IAI, Reuters and LME
Global Environment
Days of Consumption

11
LME 3-Month Price Remains Strong

12
[Alcoa logo]
Joseph Muscari
Executive Vice President
Chief Financial Officer

13
Income from continuing operations of $540
million  ($0.62 per share)
Revenues of $7.63 billion
Cash from operations of $748m which includes
a discretionary pension contribution of $200m
Capital expenditures were $737 million
Debt-to-cap in target range at 32.8%
Trailing four quarters ROC of 12.2%;  ROC
excluding growth investments of 14.1%
3  Quarter 2006 Financial Overview
rd

14
3  Quarter 2006 Financial Review
In Millions
2Q'06
3Q'06
Change
Sales
$7,797
$7,631
($166)
Cost of Goods Sold
$5,827
$6,015
$188
   % of Sales
74.7%
78.8%
4.1 pts.
SG&A
$354
$326
($28)
   % of Sales
4.5%
4.3%
(0.2) pts.
Restructuring and Other Charges
($9)
($3)
$6
Interest Expense
$98
$101
$3
Other Income, Net (Income)
($61)
($48)
$13
Effective Tax Rate
28.1%
24.7%
(3.4) pts.
Minority Interests
$124
$109
($15)
GAAP Net Income
$744
$537
($207)
(Loss) Income from Discontinued Operations
($5)
($3)
$2
Cumulative effect of Accounting Change
$0
$0
$0
GAAP Income From Continuing Operations
$749
$540
($209)
rd

15
3   Quarter vs. 2   Quarter Bridge
Income from Continuing Operations
($) millions
rd
nd
749
26
540
3
39
24
32
137
$300
$550
$800

16
3
rd
Quarter 2006 Financial Review
In Millions
3Q'05
3Q'06
Change
Sales
$6,401
$7,631
$1,230
Cost of Goods Sold
$5,263
$6,015
$752
   % of Sales
82.2%
78.8%
(3.4) pts.
SG&A
$304
$326
$22
   % of Sales
4.7%
4.3%
(0.4) pts.
Restructuring and Other Charges
$7
($3)
($10)
Interest Expense
$96
$101
$5
Other Income, Net (Income)
($92)
($48)
$44
Effective Tax Rate
24.1%
24.7%
0.6 pts.
Minority Interests
$59
$109
$50
GAAP Net Income
$289
$537
$248
(Loss) Income from Discontinued Operations
$4
($3)
($7)
Cumulative effect of Accounting Change
$0
$0
$0
GAAP Income From Continuing Operations
$285
$540
$255

17
YTD 2005 vs. YTD 2006 ATOI Bridge
($) millions
Segment ATOI
1,587
292
700
33
102
16
2,624
8
$1,250
$1,500
$1,750
$2,000
$2,250
$2,500
$2,750

18
Working Capital / DWC
Capex
Debt to Capital
Cash from Operations
3
rd
Quarter 2006 Cash Flow Review

19
Bloomberg ROC*
Segment ATOI and Revenue
Strong Performance Trends

20
Alumina
3Q vs 3Q
3Q vs 2Q
3Q’06
74%
(3%)
271
ATOI ($MM)
38%
3%
733
3
rd
Party Sales ($MM)
5%
4%
3,890
Production (kmt)
9%
5%
2,205
3   Party Shipmts (kmt)
3   Quarter Highlights
Increased shipments and quarterly
production record for the entire
system
Energy cost inflation
Customer contract mix
3   Quarter Dynamics
4   Quarter Outlook
ATOI Performance
Continued productivity gains
Pinjarra expansion at 90% by end
of year
Price based on 60 day lag (monthly
basis)
$100
$120
$140
$160
$180
$200
$220
$240
$260
$280
$300
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
$800
$900
$1,000
$1,100
$1,200
$1,300
$1,400
ATOI
Total Revenue
rd
rd
th
rd

21
Primary Metals
3
rd
Quarter Highlights
3
rd
Quarter Dynamics
4
th
Quarter Outlook
ATOI Performance
Lower LME price
Increased direct material costs
Unfavorable currency
Approximate 2% production
increase expected
LME linked costs will decrease
Average Sept cash LME = $2,472/MT
3Q vs 3Q
3Q vs 2Q
3Q’06
106%
(29%)
346
ATOI ($MM)
23%
(7%)
1,476
3
rd
Party Sales ($MM)
(1%)
1%
895
Production (kmt)
33%
(4%)
$2,620
3
rd
Party Price ($/MT)
(9%)
5%
535
3
rd
Party Shipmts (kmt)
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
$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

22
Flat-Rolled Products
Can Sheet
Aerospace
Automotive
Building &
Construction
Distribution
Industrial
3
rd
Quarter Highlights
3
rd
Quarter Dynamics
4
th
Quarter Outlook
ATOI Performance
Kitts Greens production fully
restored
Aerospace demand to remain
strong
Some weakness in common alloy
as distributors adjust year-end
inventories
Mill outages -
Kitts Green facility the
most significant
Seasonal impact of customer
shutdowns and European holiday
Higher costs for raw materials and
energy
3Q vs 3Q
3Q vs 2Q
3Q’06
(41%)
(39%)
48
ATOI ($MM)
26%
-
2,115
Revenue ($MM)
$0
$20
$40
$60
$80
$100
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
$1,500
$1,600
$1,700
$1,800
$1,900
$2,000
$2,100
$2,200
ATOI
Third Party Revenue

23
Engineered Solutions
(2)
(6)
(3)
Other
100
97
9
2Q06
Total
Investment Castings,
Forgings,  Fasteners
AFL, Auto Castings and
Structures
34
49
(12)
3Q05
75
86
(9)
3Q06
ATOI ($MM)
3
rd
Quarter Dynamics
4
th
Quarter Outlook
AFL, Auto Castings & Structures
Seasonal declines and North America
automotive production curtailment
Investment Castings, Forgings,
Fasteners
Aerospace and commercial
transportation markets remained strong
European summer slow downs
Weakness in North American
automotive market continues
Aerospace market continues to be
strong although we will see some
supply chain inventory adjustments
$0
$20
$40
$60
$80
$100
$120
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
$800
$900
$1,000
$1,100
$1,200
$1,300
$1,400
$1,500
ATOI
Third Party Revenue

24
Extruded & End Products
(2)
(1)
(3)
Alcoa Custom
Extruded Solutions
and Other
3Q06
2Q06
3Q05
16
17
16
Total
18
18
19
Global Engineered
Products, Building &
Construction Systems
and Russia
Commercial
Vehicle
Aerospace
Automotive
Building &
Construction
Distribution
Industrial
ATOI ($MM)
4
th
Quarter Outlook
Improved mix in hard alloy
aerospace and building &
construction
Seasonal volume decline
Seasonal decline in building and
construction
Volume declines expected in
extrusions due to lower automotive
demand
3
rd
Quarter Dynamics
-$5
$0
$5
$10
$15
$20
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
$800
$900
$1,000
$1,100
$1,200
ATOI
Third Party Revenue

25
Packaging & Consumer
(2)
(2)
(1)
Other
37
(1)
40
2Q06
Total
Reynolds Food
Packaging and 
Flexible Packaging
Closure Systems and
Consumer Products
28
1
28
3Q05
24
(4)
30
3Q06
ATOI ($MM)
3
rd
Quarter Dynamics
4
th
Quarter Outlook
Normal seasonal volume decreases
Cost inflation in resin
Positive lagged effect of passing
through material price increases
from Q3
Normal seasonal decrease in
Closures
Seasonal increase in Consumer
Consumer
Products
Closures
Flexible
Packaging
Reynolds Food
Packaging
$0
$20
$40
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
$500
$600
$700
$800
$900
ATOI
Third Party Revenue

26
4
th
Quarter 2006 Outlook Summary
Strong end markets with the exception of
N.A. automotive and housing construction
Strong market fundamentals continue
Strong and improving ROC trend
Energy costs remain a challenge; however,
LME linked costs will decrease
Strong cash generation

27
Bloomberg ROC Trailing 12 Months
Including Growth Capex
Bloomberg ROC Trailing 12 Months
Excluding Growth Capex
Cash from Operations
Strong Performance Trends

28
For Additional Information, Contact:
Tony Thene
Director, Investor Relations
Alcoa
390 Park Avenue
New York, N.Y. 10022-4608
Telephone:  (212) 836-2674
Facsimile:  (212) 836-2813
www.alcoa.com

[Alcoa logo]

[Alcoa logo]
Appendix

31
3
rd
Quarter 2006 Cash Flow Review
$ In Millions
3Q'05
3Q'06
Net Income
$289
$537
DD&A
320
325
Change in Working Capital
233
66
Other Adjustments
(31)
62
Pension Contributions
(318)
(242)
Cash From Operating Activities
493
748
Dividends to Shareholders
(131)
(131)
Change in Debt
(60)
334
Other Financing Activities
8
(130)
Cash From Financing Activities
(183)
73
Capital Expenditures
(542)
(737)
Acquisitions
0
0
Other Investing Activities
298
17
Cash From Investing Activities
($244)
($720)

32
Reconciliation of Return on Capital
Return on Capital (ROC) is presented based on Bloomberg Methodology which calculates ROC based on trailing four quarters.
3Q'06
2Q'06
1Q'06
4Q'05
3Q'05
2006 YTD
Bloomberg
3Q'06
Bloomberg
2Q'06
Bloomberg
1Q'06
Bloomberg
2005 YTD
Bloomberg
In Millions
Annlzd
Method
Annlzd
Method
Annlzd
Method
Annlzd
Method
Annlzd
Method
Net Income
$2,519
$2,113
$2,148
$1,865
$2,976
1,581
$2,432
$1,233
$1,345
$1,277
Minority Interest
$451
$418
$436
$368
$496
304
$420
$259
$239
$227
Interest Expense (After-tax)
$283
$272
$304
$268
$282
$274
$264
$261
$269
$263
Numerator (Sum Total)
$3,253
$2,803
$2,888
$2,501
$3,754
$2,159
$3,116
$1,753
$1,853
$1,767
Average Balances
Short-term borrowings
$371
$356
$401
$309
$366
$350
$335
$283
$269
$154
Short-term debt
$457
$451
$459
$55
$63
$53
$59
$58
$52
$272
Commercial paper
$1,553
$1,678
$2,046
$1,501
$1,785
$1,652
$1,292
$771
$896
$946
Long-term debt
$4,863
$4,916
$4,802
$5,335
$5,192
$5,246
$5,253
$5,312
$5,366
$5,382
Preferred Stock
$55
$55
$55
$55
$55
$55
$55
$55
$55
$55
Minority interests
$1,447
$1,416
$1,502
$1,340
$1,432
$1,280
$1,378
$1,391
$1,359
$1,332
Common equity
$13,984
$14,120
$14,508
$13,834
$14,120
$13,611
$13,596
$13,282
$13,418
$13,045
Denominator (Sum Total)
$22,730
$22,992
$23,773
$22,429
$23,013
$22,247
$21,968
$21,152
$21,415
$21,186
Return on Capital
14.3%
12.2%
12.1%
11.2%
16.3%
9.7%
14.2%
8.3%
8.7%
8.3%

33
Reconciliation of Adjusted Return on Capital
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.
3Q'06
2Q'06
1Q'06
4Q'05
3Q'05
2006 YTD
Bloomberg
3Q'06
Bloomberg
2Q'06
Bloomberg
1Q'06
Bloomberg
Bloomberg
In Millions
Annlzd
Method
Annlzd
Method
Annlzd
Method
Annlzd
Method
Method
Numerator (Sum Total)
$3,253
$2,803
$2,888
$2,501
$3,754
$2,159
$3,116
$1,753
$1,767
Russia & Bohai
Net Loss
($76)
($85)
($52)
($78)
($88)
($86)
($110)
($71)
($48)
Adjusted Net Income
$3,329
$2,888
$2,940
$2,579
$3,842
$2,245
$3,226
$1,824
$1,815
Average Balances
Denominator (Sum Total)
$22,730
$22,992
$23,773
$22,429
$23,013
$22,247
$21,968
$21,152
$21,186
Capital Projects in Progress,
Russia & Bohai
Capital Base
$3,308
$2,540
$3,801
$2,330
$3,220
$2,139
$2,892
$1,981
$1,736
Adjusted Capital Base
$19,422
$20,452
$19,972
$20,099
$19,793
$20,108
$19,076
$19,171
$19,450
Return on Capital Excluding
Growth Investments
17.1%
14.1%
14.7%
12.8%
19.4%
11.2%
16.9%
9.5%
9.3%

34
Days of Working Capital Definition
Days Working Capital
(in Millions)
3Q '05
4Q '05
3Q '06
Receivables from customers, less allowances
$2,997
$2,860
$3,523
Add: Inventories
$3,453
$3,392
$4,064
Less: Accounts payable, trade
$2,325
$2,570
$2,700
Working Capital
$4,125
$3,682
$4,887
Sales
$6,401
$6,536
$7,631
Days of Working Capital*
59.3 d
51.8 d
58.9 d
*Days Working Capital = Working Capital divided by (Sales/number of days in the quarter)
Quarter ended

35
Reconciliation of ATOI to Net Income
$  537
$  744
$  608
$1,233
$  224
$  289
$  460
$  260
Consolidated net income
(7)
51
50
161
(62)
20
261
(58)
Other (1)
(3)
(5)
(6)
(22)
13
4
(30)
(9)
Discontinued operations
2 
6  
(1)
(197)
(18)
(5)
(144)
(30)
Restructuring and other charges
(64)
(82)
(89)
(312)
(88)
(82)
(73)
(69)
Corporate expense
(109)
(124)
(105)
(259)
(80)
(59)
(60)
(60)
Minority interests
(66)
(63)
(60)
(220)
(51)
(62)
(56)
(51)
Interest expense
23
10
11
42
14
12
9
7
Interest income
(19)
(49)
(36)
(99)
(56)
(22)
(2)
(19)
Impact of LIFO (1)
Unallocated amounts (net of tax):
$  780
$1,000
$  844
$2,139
$  552
$  483
$  555
$  549
Total ATOI
3Q06
2Q06
1Q06
2005
4Q05
3Q05
2Q05
1Q05
Reconciliation of ATOI to consolidated net
income:
(1)
Certain amounts have been reclassified to Other so that this line reflects only the impact of LIFO.
Prior periods’
financial information has been reclassified to reflect the movement of the Hawesville, KY automotive casting facility and
the home exteriors business to discontinued operations in 2006.