Alcoa Delivers Strong Value-Add Revenue Growth and Improved Upstream Portfolio, Sets New Business Targets at 2013 Investor Day

  Alcoa Delivers Strong Value-Add Revenue Growth and Improved Upstream
  Portfolio, Sets New Business Targets at 2013 Investor Day

Business Wire

CLEVELAND -- November 7, 2013

Alcoa (NYSE: AA) today announced new three-year business targets through 2016,
building on the Company’s strong execution of its strategy to grow its
value-add businesses and lower the cost structure of its commodity business.
Alcoa executives confirmed their new targets, and reviewed achievements
against existing three-year goals, at the Company’s annual Investor Day event
in Cleveland, Ohio.

For the 2010 to 2013 period, Alcoa is on track to generate an additional
combined $1.8 billion in revenue through innovation and market share gains at
historically high profitability levels in the mid and downstream businesses.
The Company also reported a strengthened commodity business, with lower cost
positions in both alumina and aluminum.

“Alcoa’s strategy to grow our value-add businesses while lowering the cost
base of our commodity business is working,” said Alcoa Chairman and CEO, Klaus
Kleinfeld. “We have made significant strides to reposition the Company and are
announcing a clear road map to further strengthen our competitive position
while driving value-add growth at historic profitability levels.”

The following business performance highlights for the 2010 to 2013 period were
confirmed:

  *Engineered Products and Solutions, Alcoa’s downstream business, is on
    track to generate $1 billion incremental revenue from share gains through
    innovation, and grow adjusted EBITDA margins on an annualized basis to a
    record high of 21.9 percent in 2013, up from 16.8 percent in 2010.
  *Global Rolled Products, Alcoa’s midstream business, is expected to
    generate $800 million incremental value-add revenue at historically high
    average adjusted EBITDA levels for the 2010 to 2013 period.
  *Global Primary Products, Alcoa’s upstream business, has significantly
    lowered its cost position in both aluminum smelting and alumina refining,
    having now reached the 43rd percentile on the global aluminum cost curve,
    and 27th percentile on the global alumina cost curve. These shifts
    represent an 8 point movement and 3 point movement respectively since
    2010.

The following new business targets were announced for the 2013 to 2016 time
period:

Engineered Products and Solutions

  *$1.2 billion in incremental revenue growth by 2016; $900 million coming
    from share gains through innovations
  *Adjusted EBITDA margin percent exceeding historical highs in 2016

Global Rolled Products

  *$1.0 billion in incremental revenue growth by 2016; $900 million through
    share gains and innovations
  *Adjusted EBITDA per metric ton at or above average historical highs in
    2016

Global Primary Products

  *Improve position on global alumina cost curve by 6 percentage points, from
    27^th percentile to 21^st percentile
  *Improve position on global aluminum cost curve by 5 percentage points,
    from 43^rd percentile to 38^th percentile

The webcast of the Alcoa Investor Day event is available for replay and the
presentations archived at www.alcoa.com/investorday.

About Alcoa
Alcoa is the world’s leading producer of primary and fabricated aluminum, as
well as the world’s largest miner of bauxite and refiner of alumina. In
addition to inventing the modern-day aluminum industry, Alcoa innovation has
been behind major milestones in the aerospace, automotive, packaging, building
and construction, commercial transportation, consumer electronics, and
industrial markets over the past 125 years. Among the solutions Alcoa markets
are flat-rolled products, hard alloy extrusions, and forgings, as well as
Alcoa® wheels, fastening systems, precision and investment castings, and
building systems in addition to its expertise in other light metals such as
titanium and nickel-based super alloys. Sustainability is an integral part of
Alcoa’s operating practices and the product design and engineering it provides
to customers. Alcoa has been a member of the Dow Jones Sustainability Index
for 12 consecutive years and approximately 75 percent of all of the aluminum
ever produced since 1888 is still in active use today. Alcoa employs
approximately 61,000 people in 30 countries across the world. For more
information, visit www.alcoa.com, follow @Alcoa on Twitter at
www.twitter.com/Alcoa and follow Alcoa on Facebook at www.facebook.com/Alcoa.

Forward-Looking Statements This release contains statements that relate to
future events and expectations and as such constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements include those containing such words as
“anticipates,” “estimates,” “expects,” “forecasts,” “intends,” “outlook,”
“plans,” “projects,” “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, trend projections, targeted financial
results or operating performance, and statements about Alcoa’s strategies,
outlook, and business and financial prospects. Forward-looking statements are
subject to a number of known and unknown risks, uncertainties, and other
factors 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,
distribution, packaging, defense, 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, including electricity,
natural gas, and fuel oil, or the unavailability or interruption of energy
supplies; (f) increases in the costs of other raw materials, including
calcined petroleum coke, caustic soda, and liquid pitch; (g) 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 moving its alumina refining and
aluminum smelting businesses down on the industry cost curves and increasing
revenues in its Global Rolled Products and Engineered Products and Solutions
segments) anticipated from its restructuring programs, productivity
improvement, cash sustainability, and other initiatives; (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, including facilities supplying
aluminum-lithium capacity, 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, or other
events beyond Alcoa’s control; (j) the outcome of contingencies, including
legal proceedings, government investigations, and environmental remediation;
(k) the business or financial condition of key customers, suppliers, and
business partners; (l) adverse changes in tax rates or benefits; (m) adverse
changes in discount rates or investment returns on pension assets; (n) the
impact of cyber attacks and potential information technology or data security
breaches; and (o) the other risk factors summarized in Alcoa’s Form 10-K for
the year ended December 31, 2012, and other reports filed with the Securities
and Exchange Commission. 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.

Non-GAAP Financial Measures
Some of the information included in this release is derived from Alcoa’s
consolidated financial information but is not presented in Alcoa’s financial
statements prepared in accordance with U.S. generally accepted accounting
principles (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 schedules to this release and on our website at
www.alcoa.com under the “Invest” section.



Alcoa and subsidiaries

Reconciliation of Engineered Products and Solutions Adjusted EBITDA

($ in millions)

                  2003       2004       2005       2006       2007       2008       2009       2010       2011       2012       3Q13
                                                                                                                                              YTD
                                                                                                                                              
After-tax
operating             $ 126       $ 161       $ 276       $ 382       $ 423       $ 522       $ 311       $ 419       $ 537       $ 612       $ 558
income
(ATOI)*
                                                                                                                                              
Add:
Depreciation,                                                                                                                         
depletion,
and                     166         168         160         152         163         165         177         154         158         158         119
amortization
Equity loss             –           –           –           6           –           –           (2    )     (2    )     (1    )     –           –
(income)
Income taxes*           57          70          120         164         184         215         138         198         258         296         269
Other*                 11        106       (11   )    (2    )    (7    )    2         1         –         (1    )    (8    )    –     
                                                                                                                                              
Adjusted              $ 360      $ 505      $ 545      $ 702      $ 763      $ 904      $ 625      $ 769      $ 951      $ 1,058    $ 946   
EBITDA*
                                                                                                                                              
Third-party           $ 3,905     $ 4,283     $ 4,773     $ 5,428     $ 5,834     $ 6,199     $ 4,689     $ 4,584     $ 5,345     $ 5,525     $ 4,328
sales
                                                                                                                                              
Adjusted
EBITDA                  9.2   %     11.8  %     11.4  %     12.9  %     13.1  %     14.6  %     13.3  %     16.8  %     17.8  %     19.1  %     21.9  %
Margin*
                                                                                                                                              

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 nonoperating 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.

* On January 1, 2013, management revised the inventory-costing method used by
certain locations within the Engineered Products and Solutions segment, which
affects the determination of the segment’s profitability measure, ATOI.
Management made the change in order to improve internal consistency and
enhance industry comparability. This revision does not impact the consolidated
results of Alcoa. Segment information for all prior periods presented was
revised to reflect this change.



Alcoa and subsidiaries

Reconciliation of Global Rolled Products Adjusted EBITDA

($ in millions, except per metric ton amounts)

                  2003       2004     2005     2006     2007     2008       2009       2010     2011     2012       3Q13
                                                                                                                                  YTD
                                                                                                                                  
After-tax
operating             $ 232       $ 290     $ 300     $ 317     $ 151     $ (41   )   $ (106  )   $ 241     $ 260     $ 346       $ 231
income
(ATOI)*
                                                                                                                                  
Add:
Depreciation,                                                                                                             
depletion,
and                     190         200       220       223       227       216         227         238       237       229         168
amortization
Equity loss             1           1         –         2         –         –           –           –         3         6           9
Income taxes*           77          97        135       113       77        14          12          103       98        159         103
Other                  (5    )    1        1        20       1        6         (2    )    1        1        (2    )    (1    )
                                                                                                                                  
Adjusted              $ 495      $ 589     $ 656     $ 675     $ 456     $ 195      $ 131      $ 583     $ 599     $ 738      $ 510   
EBITDA*
                                                                                                                                  
Total
shipments                                                                                                                 
(thousand
metric tons)            1,893       2,136     2,250     2,376     2,482     2,361       1,888       1,755     1,866     1,943       1,508
(kmt)
                                                                                                                                  
Adjusted
EBITDA /                                                                                                       
Total
shipments ($          $ 261       $ 276     $ 292     $ 284     $ 184     $ 83        $ 69        $ 332     $ 321     $ 380       $ 338
per metric
ton)*
                                                                                                                                  

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 nonoperating 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.

* On January 1, 2013, management revised the inventory-costing method used by
certain locations within the Global Rolled Products segment, which affects the
determination of the segment’s profitability measure, ATOI. Management made
the change in order to improve internal consistency and enhance industry
comparability. This revision does not impact the consolidated results of
Alcoa. Segment information for all prior periods presented was revised to
reflect this change.

Contact:

Alcoa
Investor Contact:
Kelly Pasterick, 212-836-2674
Kelly.Pasterick@alcoa.com
or
Media Contact:
Monica Orbe, 212-836-2632
Monica.Orbe@alcoa.com