Alcoa Reports Progress Towards Business Targets and Path to Separation at 2015 Investor Day

November 4, 2015

Company on track to complete separation into two industry-leading, public companies in second half 2016

Lightweight metals leader Alcoa (NYSE:AA) today reported progress on the
Company’s performance against three-year financial targets and its
continuing transformation as it prepares to separate into two
industry-leading, publicly-traded companies. Alcoa also outlined a clear
roadmap to complete its separation in the second half of 2016. The
Company delivered the update at its 2015 Investor Day event in Grand
Rapids, Michigan.

“Alcoa’s transformation continues to create exciting profitable growth
in our Value-Add business and lower the cost position of our Upstream
business to ensure success throughout the cycle,” said Klaus Kleinfeld,
Chairman and Chief Executive Officer. “Culminating our successful
multi-year transformation, we have now set a clear path to separating
the portfolios into two strong, industry-leading public companies. We
are gratified at the positive feedback we have received from analysts,
long-term investors and many new investors who recognize the enhanced
value that the separation will create; we look forward to launching two
strong companies in the second half of next year.”

Progress Towards Three-Year Targets

As the Company prepares for the separation, both the Value-Add
businesses and the Upstream businesses reported progress against 2016
targets set at the end of 2013.

The Value-Add businesses:

  • Global Rolled Products forecast approximately $1 billion of revenue
    growth for the three-year period, with 2016 adjusted EBITDA per metric
    ton at or above average historical highs of $344;
  • Engineered Products and Solutions (EPS) forecast approximately $3.1
    billion of revenue growth between 2013 and 2016, with adjusted EBITDA
    margin of approximately 23 percent next year; and
  • Transportation and Construction Solutions, the new segment formed in
    third quarter 2015 comprising two businesses formerly part of
    EPS—Alcoa Wheel and Transportation Products and Alcoa Building and
    Construction Solutions—and the Latin American Extrusions business,
    forecast approximately $500 million revenue growth over the three-year
    period, with adjusted EBITDA margin of at least 15 percent in 2016.

The Upstream businesses:

  • Moved down two points on the global alumina cost curve to the 23rd
    percentile in 2015 with goal to improve position to the 21st
    percentile in 2016;
  • On track to achieve its 38th percentile target on the
    global aluminum cost curve in 2016, from the 43rd
    percentile this year; and
  • Increased margins by $1.5 billion from 2010 through 2015 through
    shaped products from casthouses by boosting production to 70 percent
    of sales estimated in 2015, on target to reach 74 percent in 2016; and
    grew exports of third-party bauxite sales, on target to double
    shipments in 2016.

In addition, Alcoa projected a 2016 global aluminum deficit of 360,000
metric tons, down from a 551,000 metric ton surplus in 2015 estimated in
third quarter 2015, driven by strong aluminum demand, smaller production
increases and smelter curtailments. The Company also projected a 1
million metric ton alumina deficit in 2016 from a 2.2 million metric ton
surplus in 2015 estimated in third quarter 2015, due to record global
alumina demand and refinery curtailments.

Separation Update

Alcoa also provided an update on its separation plans. The Company has
established a well-defined governance structure led by a steering
committee, a separation program office and functional teams to separate
Alcoa into two standalone companies. The separation program office is
ensuring that all deliverables and deadlines will be met to make the
separation effective in the second half of 2016. Alcoa is targeting a
Form 10 filing with the U.S. Securities and Exchange Commission by

A replay of the Alcoa 2015 Investor Day webcast and archived slides are
available on

About Alcoa

A global leader in lightweight metals technology, engineering and
manufacturing, Alcoa innovates multi-material solutions that advance our
world. Our technologies enhance transportation, from automotive and
commercial transport to air and space travel, and improve industrial and
consumer electronics products. We enable smart buildings, sustainable
food and beverage packaging, high performance defense vehicles across
air, land and sea, deeper oil and gas drilling and more efficient power
generation. We pioneered the aluminum industry over 125 years ago, and
today, our more than 60,000 people in 30 countries deliver value-add
products made of titanium, nickel and aluminum, and produce
best-in-class bauxite, alumina and primary aluminum products. For more
information, visit,
follow @Alcoa on Twitter at and
follow us on Facebook at

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,” “believes,” “could,” “estimates,” “expects,” “forecasts,”
“intends,” “may,” “outlook,” “plans,” “projects,” “seeks,” “sees,”
“should,” “targets,” “will,” “would,” 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, supply/demand balances,
and growth of the aerospace, automotive, and other end markets;
statements regarding targeted financial results or operating
performance; statements about Alcoa’s strategies, outlook, business and
financial prospects, and the acceleration of Alcoa’s portfolio
transformation; and statements regarding the separation transaction,
including the future performance of the two independent companies if the
separation is completed, the expected benefits of the separation, the
expected timing of completion of the separation, and the expected
qualification of the separation as a tax-free transaction.
Forward-looking statements are not guarantees of future performance and
are subject to risks, uncertainties, and changes in circumstances that
are difficult to predict. Although Alcoa believes that the expectations
reflected in any forward-looking statements are based on reasonable
assumptions, it can give no assurance that these expectations will be
attained and it is possible that actual results may differ materially
from those indicated by these forward-looking statements due to a
variety of risks and uncertainties. Such risks and uncertainties
include, but are not limited to: (a) uncertainties as to the timing of
the separation and whether it will be completed; (b) the possibility
that various closing conditions for the separation may not be satisfied;
(c) failure of the separation to qualify for the expected tax treatment;
(d) the possibility that any third-party consents required in connection
with the separation will not be received; (e) the impact of the
separation on the businesses of Alcoa; (f) the risk that the businesses
will not be separated successfully or such separation may be more
difficult, time-consuming or costly than expected, which could result in
additional demands on Alcoa’s resources, systems, procedures and
controls, disruption of its ongoing business and diversion of
management’s attention from other business concerns; (g) material
adverse changes in aluminum industry conditions; (h) deterioration in
global economic and financial market conditions generally; (i)
unfavorable changes in the markets served by Alcoa; (j) the impact of
changes in foreign currency exchange rates on costs and results; (k)
increases in energy costs; (l) the 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 and improving margins in its Global Rolled Products,
Engineered Products and Solutions, and Transportation and Construction
Solutions segments) anticipated from restructuring programs and
productivity improvement, cash sustainability, technology advancements
(including, without limitation, advanced aluminum alloys, Alcoa
Micromill, and other materials and processes), and other initiatives;
(m) Alcoa’s inability to realize expected benefits, in each case as
planned and by targeted completion dates, from acquisitions,
divestitures, facility closures, curtailments, or expansions, or
international joint ventures; (n) political, economic, and regulatory
risks in the countries in which Alcoa operates or sells products; (o)
the outcome of contingencies, including legal proceedings, government or
regulatory investigations, and environmental remediation; (p) the impact
of cyber attacks and potential information technology or data security
breaches; (q) the potential failure to retain key employees while the
separation transaction is pending or after it is completed; (r) the risk
that increased debt levels, deterioration in debt protection metrics,
contraction in liquidity, or other factors could adversely affect the
targeted credit ratings for the two proposed independent companies; and
(s) the other risk factors discussed in Alcoa’s Form 10-K for the year
ended December 31, 2014, and other reports filed with the U.S.
Securities and Exchange Commission (SEC). 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. Market projections are subject to the risks discussed
above and other risks in the market.

Non-GAAP Financial Measures

Alcoa has not provided a reconciliation of any forward-looking non-GAAP
financial measures to the most directly comparable GAAP financial
measures, due primarily to variability and difficulty in making accurate
forecasts and projections, as not all of the information necessary for a
quantitative reconciliation is available to the Company without
unreasonable effort.

Investor Contact
Nahla Azmy, 212-836-2674
Media Contact
Monica Orbe, 212-836-2632