Slides presented during Alcoa Inc. fourth 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, June 30, 2007 and September

30, 2007 filed with the Securities and Exchange Commission.

Forward Looking Statements

[Alcoa logo]

Quarter 2007 Financial Overview

$ In Millions

3Q'07

4Q'07

Change

Sales

$7,387

Cost of Goods Sold

$5,910

$6,153

$243

% of Sales

80.0%

83.3%

3.3 pts.

SG&A

$365

$383

$18

% of Sales

4.9%

5.2%

0.3 pts.

Restructuring and Other Charges

$577

($14)

($591)

Interest Expense

$151

$81

($70)

Other Income, Net

($1,731)

($78)

$1,653

Effective Tax Rate

63.0%

-44.8%

107.8 pts.

Minority Interests

$76

$64

($12)

GAAP Net Income

$555

$632

$77

(Loss) Income from Discontinued Operations

($3)

$11

GAAP Income From Continuing Operations

$558

$624

$66

[Alcoa logo]

Quarter 2007 Cash Flow Review

$ In Millions

4Q'06

4Q'07

Net Income

$359

$632

DD&A

325

310

Change in Working Capital

362

519

Other Adjustments

340

(793)

Pension Contributions

(53)

(25)

Cash From Operating Activities

1,333

643

Dividends to Shareholders

(131)

(143)

Change in Debt

(676)

467

Dividends to Minority Interests

(119)

(58)

Contributions from Minority Interests

278

105

Share Repurchases

(948)

Share Issuances

Other Financing Activities

Cash From Financing Activities

(633)

(559)

Capital Expenditures

(1,147)

(1,021)

Sales of Investments

Other Investing Activities

350

Cash From Investing Activities

($769)

($919)

[Alcoa logo]

4Q’07

3Q’07

4Q’06

2,030

1,937

2,084

3 Party Shipments (kmt)

3,855

3,775

3,790

Production (kmt)

688

664

711

Party Revenue ($MM)

205

215

259

ATOI ($MM)

2% production increase sequentially

Higher energy and freight costs

Unfavorable currency

Alumina

Quarter Highlights

Quarter Outlook

Prices to follow approximate two-month

lag

Anticipate slight production increase

Continued pressure from fuel oil and

natural gas prices

Currency risk

Quarter Business Conditions

[Alcoa logo]

Quarter Highlights

196

283

480

ATOI ($MM)

2,646

2,734

2,766

3 Party Price ($/MT)

1,597

1,600

1,698

3 Party Revenue ($MM)

4Q’07

3Q’07

4Q’06

624

584

556

3 Party Shipments (kmt)

959

934

908

Production (kmt)

Primary Metals

Quarter Outlook

Quarter Business Conditions

Lower realized pricing sequentially

Unfavorable currency

3% production increase sequentially

Positive impact of recovery at Rockdale

and Tennessee

Anticipate 5% production increase

sequentially

Higher energy costs

Currency risk

[Alcoa logo]

Higher Russia ramp-up costs

Market weakness –

especially in Europe

Distributor de-stocking persists

Impact of currency / restructuring efforts

in Australia Rolled Products

Startup costs at Bohai

4Q’07

3Q’07

4Q’06

(16)

ATOI ($MM)

2,243

2,309

2,127

Party Revenue

($MM)

Flat-Rolled Products

Quarter Highlights

Quarter Outlook

Quarter Business Conditions

Improved market conditions

Improved Russia performance

Continued startup costs at Bohai

[Alcoa logo]

(7)

(4)

Other

102

(35)

3Q’07

Total

Investment Castings,

Forgings, Fasteners

AFL, Auto Castings and

Structures

4Q’06

(11)

4Q’07

Aerospace market remains strong but

shipments tempered by de-stocking

Continued weakness in North American

commercial transportation partially

mitigated by share gains

Decline in North American automotive

AFL turnaround progressing as planned

Engineered Solutions

ATOI ($MM)

Quarter Business Conditions

Quarter Outlook

Strong aerospace market to continue but

de-stocking still could have some impact

North American heavy truck downturn to

extend into 2008

Stronger IGT market

AFL restructuring to deliver improvement

[Alcoa logo]

(7)

Soft Alloy Joint Venture

and Other

4Q’07

3Q’07

4Q’06

Total

Global Hard Alloy

Extrusions, Building &

Construction Systems

and Russia

Comparable market and operating

conditions as 3Q

Extruded and End Products

ATOI ($MM)

Quarter Business Conditions

Quarter Outlook

Building & Construction markets could

be slightly weaker

Expect consistent operating conditions

[Alcoa logo]

(1)

Other

3Q’07

Total

Reynolds Food Packaging

and Flexible Packaging

Closure Systems and

Consumer Products

(9)

4Q’06

(3)

4Q’07

Packaging and Consumer

ATOI ($MM)

Quarter Business Conditions

Quarter Outlook

Sale

expected

end

quarter

–

Seasonal decline in Closures business

offset by seasonal improvement in

Consumer business

–

Improved consumer product mix

$10

$20

$30

$40

$50

$60

1Q06

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

$500

$600

$700

$800

$900

ATOI

Third Party Revenue

[Alcoa logo]

2007 Cash Flow Review

$ In Millions

2006

2007

Net Income

$2,248

$2,564

DD&A

1,280

1,269

Change in Working Capital

(903)

782

Other Adjustments

339

(1,182)

Pension Contributions

(397)

(322)

Cash From Operating Activities

2,567

3,111

Dividends to Shareholders

(523)

(590)

Change in Debt

679

654

Dividends to Minority Interests

(400)

(368)

Contributions from Minority Interests

342

474

Share Repurchases

(290)

(2,496)

Share Issuances

155

835

Other Financing Activities

(47)

Cash From Financing Activities

(20)

(1,538)

Capital Expenditures

(3,205)

(3,636)

Sales of Investments

2,011

Other Investing Activities

329

Cash From Investing Activities

($2,841)

($1,625)

[Alcoa logo]

Sustainability, Environment, Health and Safety

–

Named a component of the Dow Jones Sustainability Index

for the sixth year

–

Recognized as “Best in Class”

in response to climate

change by the Carbon Disclosure Project

–

Earned “Best in Class”

status by Storebrand

Investments

–

Ranked 1

in the Metals and Mining sector and 5

overall

in the Covalence Ethical Ranking

[Alcoa logo]

Long-Term Growth

–

Opened our 3

FRP facility (Kunshan) in China

–

Continued

expand

the

Bohai

plant

China

–

Continued to make progress on the Russia assets

–

Continued

the

construction

the

Juruti

and

Sao

Luis

projects

–

Invested

the

Serra

Facao

hydroelectric project

–

Opened the anode plant in Norway and our smelter in Iceland

[Alcoa logo]

Reconciliation of ATOI to

Consolidated Net Income

$ 2,564

$ 632

$ 555

$ 715

$ 662

$ 2,248

$ 359

Consolidated net income

702

306

456

(50)

(10)

104

Other

(7)

(3)

(1)

(11)

101

Discontinued operations

(307)

(311)

(18)

(379)

(386)

Restructuring and other charges

(388)

(100)

(101)

(86)

(317)

(82)

Corporate expense

(365)

(64)

(76)

(110)

(115)

(436)

(98)

Minority interests

(261)

(53)

(98)

(56)

(54)

(250)

(61)

Interest expense

Interest income

(24)

(16)

(27)

(170)

(66)

Impact of LIFO

Unallocated amounts (net of tax):

$ 3,174

$ 515

$ 668

$ 1,019

$ 972

$ 3,551

$ 927

Total segment ATOI

2007

4Q07

3Q07

2Q07

1Q07

2006

4Q06

[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

4Q'07

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

$2,564

$2,291

$2,273

$2,302

$2,248

$2,113

$1,865

1,581

$1,233

$1,270

$1,271

$1,215

Minority interests

$365

$399

$432

$446

$436

$418

$368

304

$259

$230

$239

$252

Interest expense (after-tax)

$262

$246

$270

$281

$291

$272

$268

$274

$261

$263

$234

$206

Numerator (sum total)

$3,191

$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

$516

$497

$451

$441

$386

$349

$303

$342

$279

$155

$152

$185

Short-term debt

$356

$525

$359

$360

$284

$449

$55

$53

$58

$272

$273

$269

Commercial paper

$1,164

$1,275

$1,169

$972

$1,192

$1,678

$1,501

$1,652

$771

$581

$553

$815

Long-term debt

$5,574

$5,390

$5,709

$5,767

$5,027

$4,915

$5,333

$5,243

$5,309

$5,746

$5,920

$6,023

Preferred stock

$55

Minority interests

$2,130

$1,927

$1,809

$1,669

$1,583

$1,416

$1,340

$1,280

$1,391

$1,332

$1,253

$1,263

Common equity

$15,269

$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)

$25,064

$24,924

$25,123

$23,885

$22,474

$22,982

$22,421

$22,236

$21,144

$21,185

$20,967

$21,376

Return on Capital

12.7%

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

4Q'07

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)

$3,191

$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

($91)

($57)

($51)

($79)

($74)

($85)

($78)

($86)

($71)

($48)

($41)

($12)

Adjusted numerator

$3,282

$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)

$25,064

$24,924

$25,123

$23,885

$22,474

$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

$4,620

$4,430

$4,521

$3,945

$3,655

$2,540

$2,330

$2,139

$1,913

$1,776

$1,478

$1,403

Adjusted denominator

$20,444

$20,494

$20,602

$19,940

$18,819

$20,442

$20,091

$20,097

$19,231

$19,409

$19,489

$19,973

Return on capital, excluding

growth investments

16.1%

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,

Year ended

December 31,

Year ended

December 31,

2006

2007

2006

2007

2006

2007

Flat-Rolled Products

Extruded and End Products

Engineered Solutions

After-tax operating income (ATOI)

(1)

$ 255

$ 200

$ 60

$ 109

$ 331

$ 316

Add: Income taxes

101

140

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

(26)

(4)

(5)

(2)

Net margin

349

299

129

437

458

Add: Depreciation, depletion,

and amortization

219

223

118

169

172

Earnings before interest, taxes, depreciation,

and amortization (EBITDA) (3)

$ 568

$ 522

$ 194

$ 168

$ 606

$ 630

Third-party sales

$ 8,297

$ 9,171

$ 4,419

$ 3,246

$ 5,456

$ 5,725

Inter

segment

sales

246

241

–

Total Sales

$ 8,543

$ 9,412

$ 4,518

$ 3,334

$ 5,456

$ 5,725

EBITDA Margin (4)

6.6%

5.5%

4.3%

5.0%

11.1%

11.0%

(1)

See Slide 41

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 excludingdepreciation, 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

EBITDA

Margin

–

P&C

Year

ended

December 31,

2006

2007

Packaging and Consumer:

After-tax

operating

income

(ATOI)

(1)

$ 95

$ 148

Add: Income taxes

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

Net margin

122

214

Add: Depreciation, depletion,

124

Earnings before interest, taxes, depreciation, and

amortization (EBITDA) (3)

$ 246

$ 303

Third-party sales

$ 3,235

$ 3,288

EBITDA Margin (4)

7.6%

9.2%

See Slide 41 for a reconciliation of segment ATOI to consolidated net income.

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

activities and other items.

Alcoa’s definition of EBITDA is net margin excluding 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.

EBITDA Margin is calculated by dividing EBITDA by Third-party Sales. The Packaging and Consumer segment does

not have intersegment

sales.

(1)

(2)

(3)

(4)

and amortization

[Alcoa logo]

39.1

45.3

44.1

Days of Working Capital

$ 7,387

$ 7,840

Sales

$ 3,141

$ 3,638

$ 3,761

Working Capital

2,787

2,649

2,407

Less: Accounts payable, trade

3,326

3,311

3,380

Add: Inventories

$ 2,602

$ 2,976

$ 2,788

Receivables from customers, less allowances

December 31,

2007

September 30,

2007

December 31,

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

quarter

ended

December

31,

2006

has

been

reclassified

reflect

the

movement

the

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

Days of Working Capital

[Alcoa logo]

Reconciliation

Adjusted

Income

Quarter

Quarter ended

3Q07

4Q07

Net income

$ 555 $ 632

(Loss) income

from

discontinued

operations

(3)

Income from

continuing

operations

558

624

Gain on sale of

Chalco

investment

(1,140)

–

Transaction

costs*

Restructuring

and other

charges**

867

(323)

Income from

continuing

operations –

excluding

restructuring

and other

charges,

transaction

costs

and

Chalco

gain

$ 340

$ 302

Transaction

costs

include

investment

banking,

legal,

accounting,

and

other

third-party

expense,

and

interest

expense

the

Alcan

offer.

All

costs

expect

for

interest

expense

are

included

Selling,

general

administrative,

and

other

expenses

the

Statement

Consolidated

Income.

Restructuring

and

other

charges

include

discrete

income

tax

adjustments

the

sale

the

Packaging

and

Consumer

businesses.

These

tax

adjustments

are

included

the

Provision

for

taxes

income

the

Statement

Consolidated

Income.

[Alcoa logo]

Reconciliation of Adjusted Income –

Annual

Year

ended

2006

2007

Net income

$ 2,248

$ 2,564

Income

(loss)

from

discontinued

operations

(7)

Income from

continuing

operations

2,161

2,571

Transaction

costs*

–

Restructuring

and other

charges**

379

542

Income from

continuing

operations –

excluding

restructuring

and other

charges

and

transaction

costs

$ 2,540

$ 3,186

Transaction

costs

include

investment

banking,

legal,

accounting,

and

other

third-party

expenses,

and

interest

expense

the

Alcan

offer.

All

costs except for interest expense are included in Selling, general administrative, and other expenses on the Statement of Consolidated Income.

Restructuring and other charges include discrete income tax adjustments related to the sale of the Packaging and Consumer businesses. These tax

adjustments

are

included

the

Provision

for

taxes

income

the

Statement

Consolidated

Income.

[Alcoa logo]

Portfolio Management

Soft Alloy

Packaging

Automotive

2007

Extrusions

& Consumer

Castings

As Adjusted

Sales

$ 30,748

$ 1,041

$ 3,288

$ 132

$ 26,287

Selling, general administrative, and other

expenses (SG&A)

$ 1,472

$ 30

$ 216

$ 3

$ 1,223

SG&A / Sales

4.8%

2.9%

6.6%

2.3%

4.7%

EBITDA Margin:

Net income (loss)

$ 2,564

$ 145

$ (50)

$ 2,400

Add:

Loss from discontinued operations

–

Minority interests

365

–

364

Provision (benefit) for taxes on income

1,555

(25)

1,478

Other income, net

(1,913)

(67)

(2)

–

(1,844)

Interest expense

401

–

399

Restructuring and other charges

399

(2)

328

Goodwill impairment charge

133

–

133

Provision for depreciation, depletion, and

amortization

1,268

1,134

Earnings before interest, taxes, depreciation,

and amortization (EBITDA) (1

)

$ 4,779

$ 70

303

$ 7

$ 4,399

EBITDA Margin (EBITDA / Sales)

15.5%

6.7%

9.2%

5.3%

16.7%

Return on Capital(2)

Numerator

3,191

$ 69

$ 145

$ (50)

$ 3,027

Denominator

$ 25,064

–

$ 2,600

$ –

$ 22,464

Return on Capital

12.7%

13.5%

(1)

Alcoa’s

definition

EBITDA

net

margin

excluding

depreciation,

depletion,

and

amortization.

Net

margin

equivalent

sales

minus

the

following

items:

cost

goods

sold;

selling,

general

administrative,

and

other

expenses;

and

research

and

development

expenses.

(2)

See Slide 42

for

the

calculation

the

numerator

and

denominator in the 2007 column. The $2,600 in the Packaging & Consumer column represents the estimated sale proceeds

minus estimated cash taxes of $100 and is reducing the denominator as it is assumed that the net cash proceeds will be used to repay debt or repurchase stock