Alcoa Announces Pricing of Public Offering of Mandatory Convertible Preferred Stock

September 16, 2014

Alcoa (NYSE:AA) today announced the pricing of its public offering of
25,000,000 of its depositary shares (“Depositary Shares”) at $50 per
Depositary Share. Each Depositary Share represents a 1/10th interest in
a share of Alcoa’s 5.375% Class B Mandatory Convertible Preferred Stock,
Series 1, par value $1.00 per share (“Mandatory Convertible Preferred
Stock”). Each share of Mandatory Convertible Preferred Stock has a
liquidation preference of $500 (equivalent to $50 per Depositary Share).
In addition, the underwriters of the offering have an option to purchase
up to an additional 3,750,000 Depositary Shares to cover
over-allotments, if any. The offering is expected to close on September
22, 2014, subject to customary closing conditions.

The Depositary Shares entitle the holders, through the depositary, to a
proportional fractional interest in the rights and preferences of the
shares of the Mandatory Convertible Preferred Stock underlying the
Depositary Shares, including conversion, dividend, liquidation and any
voting rights, subject to certain limited exceptions. Unless converted
or redeemed earlier, each share of Mandatory Convertible Preferred Stock
will convert automatically, on October 1, 2017, into between 25.7838 and
30.9406 shares of Alcoa’s common stock (and, correspondingly, each
Depositary Share will automatically convert into between 2.57838 and
3.09406 shares of Alcoa’s common stock), subject to anti-dilution and
other adjustments.

Dividends on the Mandatory Convertible Preferred Stock will be payable
on a cumulative basis when, as and if declared by the Board of Directors
of Alcoa or an authorized committee of Alcoa’s Board, at an annual rate
of 5.375% on the liquidation preference of $500 per share of Mandatory
Convertible Preferred Stock (equivalent to $26.8750 per annum per share
of Mandatory Convertible Preferred Stock, corresponding to $2.6875 per
annum per Depositary Share). The declared dividends may be paid in cash,
or subject to certain limitations, in Alcoa’s common stock or any
combination of cash and common stock on January 1, April 1, July 1 and
October 1 of each year, commencing on January 1, 2015 and to, and
including, October 1, 2017.

Net proceeds from this offering, after deducting underwriting discount
and commissions and estimated offering expenses, are expected to be
approximately $1.2 billion. If the underwriters exercise their
over-allotment option in full, net proceeds are expected to be
approximately $1.4 billion. Alcoa intends to use the net proceeds of the
offering, if completed, as partial consideration to finance the
previously announced proposed acquisition of the Firth Rixson business
and to pay related fees and expenses. The completion of the offering is
not contingent on the completion of the acquisition.

Morgan Stanley & Co. LLC and Credit Suisse Securities (USA) LLC are
acting as joint book-running managers of the offering. Citigroup Global
Markets Inc., Goldman, Sachs & Co., and J.P. Morgan Securities LLC are
acting as book-running managers for the offering.

The offering is being made pursuant to an effective shelf registration
statement filed with the Securities and Exchange Commission (“SEC”). The
offering may be made only by means of a prospectus supplement and the
accompanying prospectus. A copy of the final prospectus supplement and
the accompanying prospectus related to the offering may be obtained,
when available, by contacting: Morgan Stanley & Co. LLC, 180 Varick
Street, New York, New York 10014, Attention: Prospectus Department,
telephone: (866) 718-1649; Credit Suisse Securities (USA) LLC, One
Madison Avenue, New York, New York 10010, Attention: Prospectus
Department, telephone: (800) 221-1037. These documents will also be
filed with the SEC and will be available at the SEC’s Web site at

This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be any
sale of these securities, in any state or jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state or

About Alcoa

Alcoa is a global leader in lightweight metals technology, engineering
and manufacturing. Alcoa’s innovative, multi-material products, which
include aluminum, titanium, and nickel, are used worldwide in aircraft,
automobiles, commercial transportation, packaging, building and
construction, oil and gas, defense, consumer electronics, and industrial
applications. Alcoa is also the world leader in the production and
management of primary aluminum, fabricated aluminum, and alumina
combined, through its active participation in all major aspects of the
industry: technology, mining, refining, smelting, fabricating, and

Cautionary Language Regarding Forward-Looking Statements

This press release contains statements about future events and
expectations, or “forward-looking statements,” all of which are
inherently uncertain. Alcoa has based these forward-looking statements
on management’s current expectations and assumptions and not on
historical facts. Examples of these statements include, but are not
limited to, Alcoa’s ability to complete the offering, our anticipated
use of proceeds from the offering, and our ability to close the proposed
Firth Rixson acquisition. These forward-looking statements involve a
number of risks and uncertainties. Among the important factors that
could cause actual results to differ materially from those indicated in
such forward-looking statements include prevailing market conditions and
other factors. For more information about potential risk factors that
could affect Alcoa and its results, we refer you to the information
contained in the prospectus supplement for this offering and the risk
factors summarized in our Form 10-K for the year ended December 31, 2013
and in our Form 10-Q for the quarters ended March 31, 2014 and June 30,
2014. Alcoa undertakes no obligation to update the information contained
in this press release to reflect subsequently occurring events or

Investor Contact:
Kelly Pasterick, 212-836-2674
Media Contact:
Monica Orbe, 212-836-2632