Aluminum Sheet Outlook in Auto

Randall Scheps

Alcoa

1

1.14.2014

Cautionary Statement

2

Cautionary Statement

2

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,” “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, global auto body sheet consumption, and growth opportunities for aluminum in automotive, commercial transportation 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 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 automotive and commercial transportation, aerospace, building and construction, distribution, packaging, defense, and industrial gas

turbine; (d) unfavorable changes in aluminum recycling rates or Alcoa’s recycling capabilities; (e) the impact of changes in foreign currency exchange

rates on costs and results; (f) increases in energy costs or in the costs of other raw materials, or the interruption of energy supplies; (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 and

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, such as the auto expansions in

Davenport, IA and Alcoa, TN, 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. Any forecast or other forward-looking statement set forth in the following slides speaks as

of the date such forecast or statement was originally presented as indicated on the slide. Alcoa is not updating or affirming any of such

information as of today’s date. The provision of this information shall not create any implication that the information has not changed since

it was originally presented.

May 2013

Source: Detroit News, May 2013

Historic auto industry shift to lightweight vehicles

Consumers/OEMs preferences, projected aluminum content per vehicle

Increasing sheet intensity

North America aluminum body sheet

content per vehicle (in lbs)

136

55

14

2015 2025 2012

Actual

Projected

~10x

~4x

Al auto sheet

demand

expected to grow

to 1MMT by 2025

Consumers want fuel economy

OEMs need fuel economy

54.535.5

27.2

2025 2011 2016

US CAFE regulations (MPG)

+100%

And 88% say fuel

economy will be

an important

factor in their next

vehicle purchase

% supporting higher fuel economy regulations

4 Sources: Alcoa Earnings Presentation, Jan 9, 2014

8566

2013 2010

Aluminum’s march through the car continues

0

100

200

300

400

500

600

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Engines

Wheels

BODY-IN- WHITE

Hoods

Source: Ducker Worldwide 2011

Heat

Exchangers

550 lbs

343 lbs

Pounds Per

Vehicle

Total aluminum content history and forecast, Lbs / veh

Based on our current understanding, we

believe we’re approaching the practical limits

of the application of high-strength steels…” –Frank Paluch, Senior Vice President,Honda R&D Americas

Aluminum intensity is growing and driving auto sheet demand

North American Market Demand (kMT)

Sources: Ducker Worldwide , IHS , Alcoa analysis *) Extrapolated based on IHS 2020 forecast 6

2,300

2,720

3,425

3,150

430

2012

2,400

2025*

4,550

1,125

2015

100

Other Auto Aluminum

(Castings, etc.)

Auto Sheet

4x increase in

auto sheet already

locked into designs

of 2015 models

$275M investment

Enables flexible production

Much of volume secured

Broke ground in Aug. 2013

Complete by mid-2015

Alcoa’s auto triple play: 3 smart investments to capitalize on AIV growth

$300M investment

Supported by secured contracts

On time and on budget

First coil by Dec. 2013

7

Davenport

Phase 1 Auto Expansion

Auto Treatment Line – Davenport, IA

Saudi Arabia JV

Automotive growth projects

$380M total investment*

Addition to can sheet mill

Cold mill, heat treat, finishing

Broke ground in Dec. 2012

First auto coil by Dec. 2014

Positioning for growth in MENA

Tennessee

Phase 2 Auto Expansion

Alcoa TN facility– Alcoa, TN Saudi Arabia JV – KSA

Source: November 7, 2013 Investor Day

*Total investment relates to rolling mill capability expansion to include auto sheet, building and construction sheet

and foil stock. Alcoa’s investment portion is ~$95M

Tesla Model S • World Car of the Year

Award Winner

• Automobile Magazine’s

Car of the Year

• 5 Star Safety Rated

Range Rover • World’s First All-

Aluminum SUV

• 39% lighter body

Aluminum Bodies Already on the Road

Corvette Stingray • Aluminum Frame 100lbs

lighter than prior

• 57% stiffer

Next Step…

Mass Market

• 647,000 units sold (2013)

• New design launching this

year

• All new military grade

aluminum body

• 700 lbs lighter

• No compromises

The Biggest News for Aluminum in Decades

Video

2015 Ford F-150

“Over time, aluminum absolutely will

move across our product line. It will be

the material of choice.” – Alan Mulally

•Aluminum intensive body SUV

•No compromises: size, function safety,

performance

•28% (1050 lbs) total mass reduction vs. steel

•Aluminum body, doors, hood, chassis,

suspension, brakes

• 4.8 MPG fuel economy improvement

The typical car of the (near) future

All aluminum body in white

Based on our current understanding, we believe

we’re approaching the practical limits of the

application of high-strength steels…”

–Frank Paluch, Senior Vice President,Honda R&D Americas

A Major Shift in Material Mix Underway

Steel 59%

Aluminum 9%

Mg 0%

Iron 8%

Plastics 9%

Glass 3%

All Other 12%

Today’s SUV

Steel 30%

Aluminum 37%

Mg 4%

Iron 4%

Plastics 10%

Glass 3%

All Other 12%

Tomorrow’s SUV

Total Mass: 1,711Kg

28% Mass

Reduction Total Mass: 1,237 Kg

Source: ATG AIV

• Ample primary metal supply

• Hot and cold rolling can capacity flex to

auto

• Heat treat and finishing capacity is

unique to auto must be added

• Existing suppliers investing heavily

• Early involvement of supply base is

critical

• Experienced suppliers in best position

Supply Considerations

Typical heat treat and finishing line

Alcoa technology leading the way

Shift to aluminum sheet is accelerating 1MMT by 2025 (NA)

Aluminum saves more weight than steel up to 28%

Lower lifecycle CO2 17% Lower

Better fuel economy 4.8 MPG

No compromises for the end customer

Summary

When we put it all together, to have the F-150 do what

we wanted, there was only one answer: ALUMINUM -Raj Nair, Ford VP Global Product Development