Slides presented during Alcoa Inc. second quarter 2008 earnings call

[Alcoa logo]

Forward Looking Statements

Today’s

discussion

may

include

“forward-looking

statements”

within

the

meaning

the

Private

Securities

Litigation

Reform

Act

1995.

Such

statements

relate

future

events

and

expectations

and

involve

known

and

unknown

risks

and

uncertainties.

Alcoa’s

actual

results

actions

may

differ

materially

from

those

projected

the

forward-looking

statements.

For

summary

the

specific

risk

factors

that

could

cause

results

differ

materially

from

those

expressed

the

forward-looking

statements,

please

refer

Alcoa’s

Form

10-K

for

the

year

ended

December

31,

2007

and

Form

10-Q

for

the

quarter

ended

March

31,

2008

filed

with

the

Securities

and

Exchange

Commission.

[Alcoa logo]

Profitability improvement across all segments

–

Income from continuing operations of $546m or $0.66 per share

–

Revenues of $7.6 billion

•

11% sequential increase, excluding Packaging

•

Higher revenue in all operating segments

–

Double digit profit increase across all operating segments

sequentially

–

Input costs continue to climb

–

Cash from operations exceeds $1 billion

–

Debt-to-capital at 30.6%

–

ROC stands at 12.1%, excluding growth

–

Share repurchases reach 10%

[Alcoa logo]

Strong revenue growth leads to 80% increase in profits

In Millions

1Q 08

2Q 08

Change

Sales

$7,375

$7,620

Cost of Goods Sold

$5,892

$6,090

% of Sales

79.9%

SG&A

$328

$306

(7%)

% of Sales

4.4%

4.0%

(0.4 pts)

Restructuring and Other Charges

$38

(95%)

Interest Expense

$99

$87

(12%)

Other Expense/(Income)

$58

$(97)

Effective Tax Rate

35.6%

27.3%

(8.3 pts)

Minority Interests

$67

$70

Net Income

$303

$546

80%

Earnings per Diluted Share

$0.37

$0.66

78%

[Alcoa logo]

$44

$82

1H 07

1H 08

$7.36

$10.03

1H 07

1H 08

5,310

8,557

1H 07

1H 08

The industry is facing significant input cost escalation

Caustic Soda (per dmt)

67%

Calcined

Coke (per mt)

35%

Ocean Freight (Baltic Dry Index)

61%

Natural

Gas

(US

Henry

Hub

per

MMBtu)

36%

Fuel

Oil

(Low

Sulfur

Oil

Index

per

bbl)

86%

Source: CMAI

Source: PACE

Source: Bloomberg

US Dollar*

(15%)

Source: Bloomberg

* Relative USD value vs

weighted average of Alcoa exposure to AUD, CAD, BRL, & EUR

$253

$342

1H 07

1H 08

100

1H 07

1H 08

$328

$547

1H 07

1H 08

[Alcoa logo]

2Q 07

1Q 08

2Q 08

Production (kmt)

3,799

3,870

3,820

Party

Shipments

(kmt)

1,990

1,995

1,913

Party

Revenue

million)

712

680

717

ATOI ($ million)

276

169

190

Higher LME pricing

Net income impact of Western Australia

gas disruption was approximately $17m

Australian dollar up 4% vs

USD

Higher caustic & energy costs

Alumina

Quarter Highlights

Quarter Outlook

Prices to follow approximate two-month

lag

Higher caustic & energy costs anticipated

Net income impact of Western Australia

gas disruption expected to be $45m

Quarter Business Conditions

$100

$120

$140

$160

$180

$200

$220

$240

$260

$280

$300

1Q 07

2Q 07

3Q 07

4Q 07

1Q 08

2Q 08

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

ATOI

Total Revenue

[Alcoa logo]

Quarter Highlights

2Q 07

1Q 08

2Q 08

Production (kmt)

901

995

1,030

Party Shipments (kmt)

565

665

750

Party Revenue ($ million)

1,746

1,877

2,437

Party Price ($/mt)

2,879

2,801

3,058

ATOI ($ million)

462

307

428

Primary Metals

Quarter Outlook

Quarter Business Conditions

Higher realized pricing sequentially

Record quarterly production

Iceland running at capacity

Higher input costs

Net income impact of Rockdale power

interruptions was $22m

Additional efficiency gains anticipated in

Iceland

Higher input costs

Net income impact of Rockdale outage

expected to be $22m

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

$550

1Q 07

2Q 07

3Q 07

4Q 07

1Q 08

2Q 08

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

$5,000

ATOI

Total Revenue

[Alcoa logo]

Flat-Rolled Products

Quarter Outlook

Quarter Business Conditions

2Q 07

1Q 08

2Q 08

Global Rolled Products,

exc

Russia & China

106

Hard Alloy Extrusions

Russia, China & Other

(17)

(40)

(26)

Total

ATOI ($ million)

Higher costs expected for metals,

energy & coatings

Typical seasonal slowdown to impact

results

Weak end markets in North America &

Europe

Higher costs for magnesium &

transportation

Productivity gains in North America &

Europe

Improved Russia results

($20)

$20

$40

$60

$80

$100

$120

1Q 07

2Q 07

3Q 07

4Q 07

1Q 08

2Q 08

$1,600

$1,800

$2,000

$2,200

$2,400

$2,600

$2,800

$3,000

ATOI

Third Party Revenue

[Alcoa logo]

Engineered Products and Solutions

2Q 07

1Q 08

2Q 08

AFL, Auto Castings &

Structures

(7)

(5)

(9)

Investment Castings,

Forgings & Fasteners

118

136

155

Building and Construction

& Other

Total

119

138

157

Record quarterly revenue & ATOI

Productivity improvements continue

Volume improvements in aerospace,

IGT, commercial transportation, &

building & construction

Weaker demand in automotive

ATOI ($ million)

Quarter Business Conditions

Quarter Outlook

Inventory adjustments affecting

aerospace spares demand

Declining demand in European heavy

truck / trailer markets

Additional automotive headwinds

Typical seasonal slowdown to impact

results

$20

$40

$60

$80

$100

$120

$140

$160

$180

1Q 07

2Q 07

3Q 07

4Q 07

1Q 08

2Q 08

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

$2,200

ATOI

Third Party Revenue

[Alcoa logo]

Strong cash generation driven by working capital

improvements

In Millions

2Q 07

1Q 08

2Q 08

Net Income

$715

$303

$546

DD&A

317

319

321

Change in Working Capital

278

(467)

234

Other Adjustments

(424)

(46)

Pension Contributions

(41)

(19)

(48)

Cash From Operating Activities

$1,349

$(288)

$1,007

Dividends to Shareholders

$(149)

$(140)

Change in Debt

172

416

199

Dividends to Minority Interests

(46)

(39)

(78)

Contributions from Minority Interests

103

118

181

Share Repurchases

(165)

(430)

(175)

Share Issuances

346

154

Other Financing Activities

(2)

Cash From Financing Activities

$272

$(55)

$152

Capital Expenditures

$(891)

$(748)

$(796)

Sales of Assets/Investments

2,492

149

Additions to Investments

(30)

(1,215)

(22)

Other Investing Activities

(1)

(304)

(86)

Cash From Investing Activities

$(886)

$225

$(755)

[Alcoa logo]

Share repurchase program reaches 10%

Based on 870m Shares Outstanding

As of January 19, 2007

25% Repurchase Program Authorized

10% Repurchased as of 2Q 08

–

10% repurchase

program authorized

January 2007

–

~68m shares, or 8%,

repurchased in 2007

–

Expanded 25%

repurchase program

authorized October 2007

Timeline

Overview

–

~18m shares, or 2%,

repurchased YTD 2008

653m

86m

131m

[Alcoa logo]

8.2

10.6

4.6

7.3

5.6

Strong demand for aluminum will continue

World Aluminum Consumption

(million metric tons)

Source: Brook Hunt, Alcoa analysis

1998

China

Rest of

Asia

2.8

6.7

3.6

North

9.2

8.6

29.1

2017

E. Europe/

Mid East/

Africa

W.Europe

South

6.7

5.2

12.0

2007

6% CAGR

Europe/ME/

Africa

Americas

Asia

12%

2.5

0.8

1.3

2.6

[Alcoa logo]

Competition for energy has intensified

Energy/Infrastructure

curtailments

due

substantially increased local demand

•

China

•

South Africa

•

New Zealand

Natural gas has changed from stranded to mobile

energy source

Smelter delays –

all energy source related

•

750 kmt

Sarawak in Malaysia –

power shortages in country

•

750 kmt

Ma’aden

in Saudi Arabia –

delay in power plant

construction

•

720 kmt

Coega

in South Africa –

insufficient power supply

•

700 kmt

Ruwais

in Abu Dhabi –

unable to source adequate

power

•

150 kmt

Datun

Aluminum in China –

insufficient power

supply

[Alcoa logo]

Execution &

completion

2008-2010

Feasibility

2010-2015

Future options

Greenland

Australia

Surinam

Juruti

Wagerup

Vietnam

Sao Luis

Greenland

Massena

B. Comeau

Mosjoen

Fjardaal

Pinjarra

Mining

Refining

Power

Smelting

Well underway in securing growth

N. Iceland

Vietnam

June 26

MOU Extended

June 24

Cooperation

Agreement Signed

May 13

Parliament Agrees

to Next Phase

[Alcoa logo]

Cost pressures drive aluminum prices

Smelting Cash Cost Curve Movement

(per mt)

2005

2007 Increase

percentile

$ 1,281

$ 1,666 30%

percentile

$ 1,492

$ 1,851 24%

percentile

$ 1,808

$ 2,238 24%

Refining Cash Cost Curve Movement

(per mt)

2005

2007 Increase

percentile

$ 167

$ 210 26%

percentile

$ 196

$ 255 30%

percentile

$ 229

$ 308 34%

Source: CRU, Alcoa analysis, Bloomberg

Forward Curve of LME Aluminum Pricing (per mt)

+42%

$1,400

$1,600

$1,800

$2,000

$2,200

$2,400

$2,600

$2,800

$3,000

$3,200

$3,400

$3,600

3 mo

15 mo

27 mo

39 mo

51 mo

63 mo

Jun 30 2008

Jun 30 2007

Jun 30 2006

Jun 30 2005

[Alcoa logo]

Driving Performance Through Three Strategic Priorities

Alcoa Advantage

creating value for

all businesses

Profitable

Growth

in every business

•

Talent

•

Technology

•

Customer Intimacy

•

Purchasing

•

Operating System

Business Programs

that define:

•

3-year aspirations

•

Priority levers

•

Accountability

Disciplined Execution

across all activities

Alcoa’s Three Strategic Priorities

[Alcoa logo]

Diversified industrial products portfolio with leading

market positions

•

#1 in Specialty

Aerospace Fastener

Systems

•

Broadest range of

patented &

proprietary products

•

Successful

acquisition underway

•

#1 in Airfoils for

aerospace

•

#1 in Airfoils for

Industrial Gas

Turbines

•

#1 producer of

Aluminum Structural

Forgings

•

#1 supplier of

Aluminum Truck

Wheels globally

•

Industry leader in new

Aluminum Wheel

products and finishes

•

Globally driving

penetration vs

steel

wheels

•

#1 Commercial

Building Exterior

Systems supplier in

North America

(Kawneer)

•

Best in class

customer service

•

Growing positions in

Asia, Middle East

and Russia

•

#1 supplier to the

North America

heavy truck &

specialty vehicle

industries

$1.2

$0.9

$1.1

$1.5

Fastening

Systems

Power &

Propulsion

Wheel &

Transportation

Products

Building &

Construction

Systems

Electrical &

Electronic

Solutions

$2.0

2007 Sales (in billions)

Market Positions

[Alcoa logo]

A track record of profitable growth and productivity gains

$850m

organic

growth

•

$400m market growth

•

$450m

share growth

Portfolio management via

divestiture,

business

exits &

investments

rapidly growing segments

Return on Capital

Source: CMAI

Sales (in billions)

8% p.a.

ATOI (in millions)

28% p.a.

37% p.a.

Cost of

capital

Productivity

gains

expand

margin/sales

36%

via

ABS,

process

improvements

low

cost

country

expansions

$5.7

$6.7

2005

2007

$232

$382

2005

2007

2005

2007

[Alcoa logo]

Trend of record earnings and returns extends to 2008

Cost efficient capacity

expansions

fasteners

and investment castings

Strong market

positions

aerospace, IGT, B&C

offsetting

North

American truck and

automotive weakness

Productivity

improvements

accelerating

Return on Capital

Sales (in billions)

ATOI (in millions)

30%

28%

Cost of

capital

$3.4

$3.6

1H 07

1H 08

$224

$295

1H 07

1H 08

1H 07

1H 08

[Alcoa logo]

Driving Performance Through Three Strategic Priorities

Alcoa Advantage

creating value for

all businesses

Profitable

Growth

in every business

•

Talent

•

Technology

•

Customer Intimacy

•

Purchasing

•

Operating System

Business Programs

that define:

•

3-year aspirations

•

Priority levers

•

Accountability

Disciplined Execution

across all activities

Alcoa’s Three Strategic Priorities

[Alcoa logo]

–

Fasteners

–

Investment Castings

–

Forgings

–

Exterior Systems

–

Window Systems

–

Architectural Products

Strong market demand provides significant growth

opportunities

–

Fasteners

–

Wheels

–

Investment Castings

–

Electrical Systems

–

Forgings

Global Large Aircraft Deliveries

Global Heavy Truck Production

(in thousands)

Source:

The

Airline

Monitor

–

July

2008

Source: Global Insight

Global Non-Residential Structure

Spend (in billions)

Source: Global Insight

8% p.a.

10% p.a.

575

888

1,065

2003

2007

2011(F)

975

1,575

1,820

2003

2007

2011(F)

$1,244

$1,887

$2,693

2003

2007

2011(F)

[Alcoa logo]

–

Investment Castings

–

Forgings

Energy infrastructure provides opportunities for

profitable growth

–

Fasteners

–

Forgings

–

Integrated Product

Sub-components

Global Rig Count

Global Heavy Duty Turbine Builds

Source: Howmet analysis

Source: BHI, Spears

7% p.a.

15% p.a.

252

288

436

2003

2007

2011(F)

1,133

3,064

3,572

2003

2007

2011(F)

[Alcoa logo]

Defense

•

Joint Strike Fighter

•

Joint Light Tactical Vehicle

Industrial Equipment

•

Mold Plate

•

LCD Vacuum Chambers

Aerospace

•

A380 and 787

Fastening Systems

•

New Engine Programs

Industrial Gas Turbines

•

High Gradient Single Crystal

Ground

Transportation

•

AVDC Door System

•

EES Electronics

•

Dura-Bright®

Extensions

•

Huck Spin Fasteners

•

Wheel

•

Turbocharger Blades

Oil and Gas

•

Riser Systems

•

Drill Pipe Systems

Building and Construction

•

Ultra Thermal Doors and Windows

•

Integrated Exterior Systems

•

Advanced Surface Coatings

New product portfolio will drive profitable growth

Targeting

$1.3b with

new products and

in adjacent

markets

[Alcoa logo]

Oil & Gas –

Aluminum Drilling Systems: 50% advantage over steel

>10,000 ft

Alcoa

Advantage

50 ft

350 ft

<6,000 ft

1,500 ft

Steel limit

1,000 ft

Steel limit

Alcoa

Advantage

5 miles

(8 km)

2 miles

(3.2 km)

1 mile

(1.6 km)

Aluminum riser systems and auxiliary

equipment provides 20 -

50% extended

depth for current ships at a fraction of

new equipment costs & delivery time

Aluminum drill pipe systems allow up to

40% increased lineal distances over steel

systems

Land

Rig

Barge

Jackup

Fixed

Platform

Semi

Submersible

Drill Ship:

Deep Water (DW)

Drill Ship:

Ultra Deep Water (UDW)

Landscape of Exploration Drilling Equipment

[Alcoa logo]

Joint Strike Fighter –

Alcoa Advantage at work

•

Strong customer relationships provide

early design involvement

•

Leveraging Alcoa 7085 alloy technology in

forgings for weight reductions

•

“Multi –

Wall”

investment casting engine

airfoils

•

High strength titanium Mark IV and Spline

Lock Eddie Bolt fastening systems

Sales of $1.4m/shipset

$130m/year at full production

[Alcoa logo]

Disciplined execution will continue to drive productivity

gains

•

Significant runway remains in ABS

productivity and capacity improvements

•

Expand and grow investments in

Hungary, China, Russia and Mexico

•

New process investments in BCS,

fasteners and investment castings

•

Capital efficient brown-field expansion

opportunities

•

Leveraging cost efficient Alcoa business

systems for overhead productivity

•

Addressing structural changes in NA

automotive demand in EES capacity

ATOI (in millions)

28% p.a.

$232

$382

2005

2007

[Alcoa logo]

Unlocking the great value potential in

Engineered Products & Solutions

–

Technically complex products & processes providing

differentiation opportunities

–

Differentiated

positions

attractive

core

markets

•

Aerospace & power generation components

•

Commercial transportation

•

Architectural solutions

–

Consistent

growth

earnings

returns

–

New

product

focus

Operational

Excellence

Growth

Asset

Management

Strategic

Levers

–

Disciplined

deployment

of profitable

growth

targets

–

Restructure

automotive

businesses

–

Achieve Best

in Class

each

business

–

Capitalize on

Mega Trends

•

Transport

•

Aero

•

B&C

•

Energy

–

Optimize

global

presence

–

Efficient

brown-field

expansions

Priorities

Foundation

[Alcoa logo]

Driving Performance Through Three Strategic Priorities

Alcoa Advantage

creating value for

all businesses

Profitable

Growth

in every business

•

Talent

•

Technology

•

Customer Intimacy

•

Purchasing

•

Operating System

Business Programs

that define:

•

3-year aspirations

•

Priority levers

•

Accountability

Disciplined Execution

across all activities

Alcoa’s Three Strategic Priorities

[Alcoa logo]

Adjusted Income Statement Items

(in millions)

Third

-party Sales

Quarter ended

March 31,

2008

June 30

2008

Alcoa

$ 7,375

$ 7,620

Packaging and Consumer

497

Alcoa, excluding Packaging and

Consumer

$ 6,878

$ 7,601

After-tax Operating Income

Quarter ended

March 31,

2008

June 30

2008

Segment total

$ 666

$ 830

Packaging and Consumer

–

Segment total, excluding

Packaging and Consumer

$ 655

$ 830

Third-party sales and segment after-tax operating income excluding the Packaging and Consumer segment are non-GAAP financial measures.

Management believes that these measures are meaningful to investors because management reviews the operating results of Alcoa excluding the

Packaging and Consumer segment due to the sale of the businesses within this segment in February 2008.

[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

2Q'08

1Q'08

4Q'07

3Q'07

2Q'07

1Q'07

Bloomberg

(In Millions)

Method

Net income

$2,036

$2,205

$2,564

$2,291

$2,273

$2,302

Minority interests

$277

$317

$365

$399

$432

$446

Interest expense (after-tax)

$267

$266

$262

$246

$270

$281

Numerator (sum total)

$2,580

$2,788

$3,191

$2,936

$2,975

$3,029

Average Balances

Short-term borrowings

$568

$524

$516

$497

$451

$441

Short-term debt

$352

$358

$356

$525

$359

$360

Commercial paper

$819

$864

$1,164

$1,275

$1,169

$972

Long-term debt

$6,523

$6,374

$5,574

$5,390

$5,709

$5,767

Preferred stock

$55

Minority interests

$2,519

$2,320

$2,130

$1,927

$1,809

$1,669

Common equity

$16,695

$15,563

$15,269

$15,255

$15,571

$14,621

Denominator (sum total)

$27,531

$26,058

$25,064

$24,924

$25,123

$23,885

Return on Capital

9.4%

10.7%

12.7%

11.8%

12.7%

[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

2Q'08

1Q'08

4Q'07

3Q'07

2Q'07

1Q'07

Bloomberg

(In Millions)

Method

Numerator (sum total)

$2,580

$2,788

$3,191

$2,936

$2,975

$3,029

Russia, Bohai, and Kunshan

net losses

($118)

($96)

($91)

($57)

($51)

($79)

Adjusted numerator

$2,698

$2,884

$3,282

$2,993

$3,026

$3,108

Average Balances

Denominator (sum total)

$27,531

$26,058

$25,064

$24,924

$25,123

$23,885

Capital projects in progress and

Russia, Bohai, and Kunshan

capital base

$5,289

$4,730

$4,620

$4,430

$4,521

$3,945

Adjusted denominator

$22,242

$21,328

$20,444

$20,494

$20,602

$19,940

Return on capital, excluding

growth investments

12.1%

13.5%

16.1%

14.6%

14.7%

15.6%

[Alcoa logo]

Reconciliation of Adjusted Income

(in mi

llions

)

Quarter ended

1Q08

2Q08

Net income

$ 303

$ 546

Loss

from

discontinued

operations

–

Income from

continuing

operations

303

546

Discrete tax

items

(9)

Restructuring

and other

charges

Income from

continuing

operations

–

excluding

restructuring

and other

charges

and

discrete tax

items

$ 361

$ 539

Income

from

continuing

operations

–

excluding

restructuring

and

other

charges

and

discrete

tax

items

non-GAAP

financial

measure.

Management

believes

that

this

measure

meaningful

investors

because

management

reviews

the

operating

results

Alcoa

excluding

the

impacts

restructuring

and

other

charges

and

discrete

tax

items.

There

can

assurances

that

additional

restructuring

and

other

charges

and

discrete

tax

items

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

discrete

tax

items.

[Alcoa logo]

Quarter ended

(in millions)

June 30,

2007 (a)

March 31,

2008

June 30,

2008

Receivables from customers, less allowances

$ 2,991

$ 3,048

$ 3,063

Add: Inventories

3,216

3,679

3,813

Less: Accounts payable, trade

2,388

2,895

3,121

Working Capital

$ 3,819

$ 3,832

$ 3,755

Sales

$ 8,066

$ 7,375

$ 7,620

Packaging and Consumer, Soft Alloy Extrusions, and

Auto Castings

1,309

497

Adjusted Sales (b)

$ 6,757

$ 6,878

$ 7,601

Days of Working Capital

51.4

50.7

45.0

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

(a)

Certain financial information for the quarter ended June 30, 2007 was reclassified to reflect the movement of the automotive castings and

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

(b)

Adjusted Sales is a non-GAAP financial measure and is being used to calculate Days of Working Capital to be consistent with the fact that the

working capital components of the above-mentioned divested businesses were classified as held for sale, and, therefore, are not included in the

Working Capital amounts above.

Days of Working Capital

[Alcoa logo]

Reconciliation of ATOI to Consolidated Net Income

(in millions)

1Q07

2Q07

3Q07

4Q07

2007

1Q08

2Q08

Total segment ATOI

$ 948

$ 991

$ 678

$ 518

$ 3,135

$ 666

$ 830

Unallocated amounts (net of tax):

Impact of LIFO

(27)

(16)

(24)

(31)

(44)

Interest income

Interest expense

(54)

(56)

(98)

(53)

(261)

(64)

(57)

Minority interests

(115)

(110)

(76)

(64)

(365)

(67)

(70)

Corporate expense

(86)

(101)

(100)

(388)

(82)

(91)

Restructuring and other charges

(18)

(311)

(307)

(30)

(2)

Discontinued operations

(11)

(1)

(3)

(7)

–

Other

(22)

446

303

741

(98)

(32)

Consolidated net income

$ 662

$ 715

$ 555

$ 632

$ 2,564

$ 303

$ 546

In the first quarter of 2008, management approved a realignment of Alcoa's reportable segments to better reflect the core businesses in which Alcoa operates and how

it is managed. This realignment consisted of eliminating the Extruded and End Products segment, and realigning its component businesses as follows: the building and

construction systems business is reported in the Engineered Products and Solutions segment; the hard alloy extrusions business and the Russian extrusions business

are reported in the Flat-Rolled Products segment; and the remaining segment components, consisting primarily of the equity investment/income of Alcoa's interest in

the Sapa

AB joint venture, and the Latin American extrusions business, are reported in Corporate. Additionally, the Russian forgings business was moved from the

Engineered Products and Solutions segment to the Flat-Rolled Products segment, where total Russian operations are now reported. Prior period amounts were

reclassified to reflect the new segment structure. Also, the Engineered Solutions segment was renamed the Engineered Products and Solutions segment.

[Alcoa logo]

Engineered Products & Solutions Segment

Realignment Summary

EPS SEGMENT

RESTATED

SEGMENT

INFO

2005

($ in millions, shipments in thousands of metric tons)

ENGINEERED PRODUCTS AND SOLUTIONS SEGMENT

2005

Third-Party Shipments, as previously reported

145

Add: Building and construction systems

Less: Russia Forgings and other

Third-Party Shipments, as reclassified

222

Third-Party Sales, as previously reported

5,032

Add: Building and construction systems

Less: Russia Forgings and other

685

Third-Party Sales, as reclassified

5,717

ATOI, as previously reported

203

Add: Building and construction systems

Less: Russia Forgings and other

ATOI, as reclassified

232

In the first quarter of 2008, management approved a realignment of Alcoa's reportable segments to better reflect the core businesses in which Alcoa operates and how it is

managed. This realignment consisted of eliminating the Extruded and End Products segment, and realigning its component businesses, which had the following effect on the

Engineered Products and Solutions segment: the building and construction systems business is now reported in the Engineered Products and Solutions segment and the

Russian forgings business was moved from the Engineered Products-and Solutions segment to the Flat-Rolled Products segment, where total Russian operations are now

reported. Prior period amounts were reclassified to reflect the new segment structure. Also, the Engineered Solutions segment was renamed the Engineered Products and

Solutions segment.