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

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 income (ATOI)*					$	232			$	290		$	300		$	317		$	151		$	(41	)		$	(106	)		$	241		$	260		$	346			$	231
Add:
Depreciation, depletion, and amortization						190				200			220			223			227			216				227				238			237			229				168
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 EBITDA*					$	495			$	589		$	656		$	675		$	456		$	195			$	131			$	583		$	599		$	738			$	510
Total shipments (thousand metric tons) (kmt)						1,893				2,136			2,250			2,376			2,482			2,361				1,888				1,755			1,866			1,943				1,508
Adjusted EBITDA / Total shipments ($ per metric ton)*					$	261			$	276		$	292		$	284		$	184		$	83			$	69			$	332		$	321		$	380			$	338

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.

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