• $2 Billion in Procurement Efficiencies by 2010
• $400 Million in Overhead Rationalization by 2010
• Capital Expenditures Reduced to $850 Million Sustaining Rate in 2010
• $800 Million of Working Capital Cash Improvement in 2009
• Quarterly Dividend Reduced from $.17 to $.03, Saving More Than $400
  Million Annually
• Public Offering of Approximately $1.1 Billion of Common Stock and
  Convertible Notes

NEW YORK–Alcoa (NYSE:AA) announced today a series of operational and financial
actions to significantly improve the Company’s cost structure and
liquidity. The operational actions will reduce costs by more than $2.4
billion annually, reduce capital expenditures an additional $1.0 billion
in 2010, and improve working capital by $800 million in 2009. The
Company is reducing the quarterly common stock dividend from $0.17 to
$0.03 per share, saving more than $400 million annually, and launching a
public offering of common stock and convertible notes planned to yield
proceeds of approximately $1.1 billion.

“By taking quick and decisive actions, Alcoa has been able to stay ahead
of the evolving economic crisis,” said Klaus Kleinfeld, President and
CEO of Alcoa. “Today’s actions better prepare Alcoa to manage through a
prolonged downturn and position the Company for the future. We believe
that we now have in place the strategic and operational fundamentals
that will enable Alcoa to emerge even stronger when the economy
recovers.”

Operational Initiatives

Alcoa has launched a new series of operational measures to enhance the
Company’s 2009-2010 performance and improve the Company’s cost
structure. The targeted results of these operational measures are: by
2010, procurement efficiencies reducing costs by $2 billion annually and
overhead rationalization, reducing costs by $400 million annually; in
2009, working capital efficiency initiatives yielding $800 million in
cash improvements; and by the second half of 2009, a 50 % reduction of
capital spending to a sustaining level of $850 million annually. As
previously announced, the Company is exiting four mid and downstream
businesses and the Shining Prospect special purpose vehicle that held
shares in Rio Tinto with an expected yield of approximately $1.1 billion
in cash in connection with these two actions. These initiatives,
together with the dividend reduction and new financings, will further
strengthen Alcoa’s balance sheet and enhance its liquidity.

Dividend Reduction

Alcoa’s Board of Directors is reducing the Company’s quarterly common
stock dividend to $0.03 per share from $0.17 per share, payable May 25,
2009 to shareholders of record at the close of business May 8, 2009. The
decision will preserve more than $400 million of cash annually.

“Given the impact of the economy on Alcoa’s capital structure, the Board
of Directors decided to reduce the dividend,” said Kleinfeld. “This
decision was made after comparisons to peer companies and consideration
of the interests of our shareholders. We are pleased to be able to
continue Alcoa’s record of paying a dividend every quarter for the past
60 years.”

New Financings

Alcoa plans to offer, subject to market and other conditions, 150
million shares of common stock in an underwritten registered public
offering. In connection with this offering, Alcoa intends to grant the
underwriters an over-allotment option with respect to an additional 22.5
million shares of common stock. Based on the closing price of Alcoa’s
common stock on the New York Stock Exchange on March 13, 2009, the
offering (without giving effect to any exercise of the over-allotment
option) is expected to result in proceeds of approximately $850 million.

Alcoa also plans to offer, subject to market and other conditions, $250
million aggregate principal amount of convertible notes due 2014 in a
concurrent underwritten registered public offering. In connection with
this offering, Alcoa intends to grant the underwriters an over-allotment
option with respect to an additional $37.5 million aggregate principal
amount of convertible notes. The convertible notes will be convertible
at the holder’s option into shares of Alcoa common stock at a
conversion rate to be determined in connection with the pricing of the
proposed offering.

Neither the completion of the convertible notes offering nor the
completion of the common stock offering will be contingent on the
completion of the other. The Company intends to use the net proceeds
from the offerings to repay outstanding indebtedness under its senior
unsecured 364-day revolving credit facility. The Company intends to use
any remaining proceeds for general corporate purposes.

Alcoa has filed a registration statement (including a separate
preliminary prospectus supplement for each of the common stock and
convertible notes offerings) with the SEC for the offering to which this
communication relates. Before you invest, you should read the applicable
preliminary prospectus supplement included in that registration
statement and other documents we have filed with the SEC for more
complete information about us and these offerings. You may get these
documents for free by visiting EDGAR on the SEC website at www.sec.gov.
Alternatively, we or the underwriters will arrange to send you either of
the prospectuses if you request them by calling toll-free: Credit Suisse
1-800-221-1037 or Morgan Stanley 1-866-718-1649.

Alcoa is the world leader in the production and management of primary
aluminum, fabricated aluminum and alumina combined, through its active
and growing participation in all major aspects of the industry. Alcoa
serves the aerospace, automotive, packaging, building and construction,
commercial transportation and industrial markets, bringing design,
engineering, production and other capabilities of Alcoa’s businesses to
customers. In addition to aluminum products and components including
flat-rolled products, hard alloy extrusions, and forgings, Alcoa also
markets Alcoa® wheels, fastening systems, precision and investment
castings, and building systems. The Company has been named one of the
top most sustainable corporations in the world at the World Economic
Forum in Davos, Switzerland and has been a member of the Dow Jones
Sustainability Index for seven consecutive years. More information can
be found at www.alcoa.com.

Forward-Looking Statements

Certain statements in this release relate to future events and
expectations and as such constitute forward-looking statements involving
known and unknown risks and uncertainties that may cause actual results,
performance or achievements of Alcoa to be different from those
expressed or implied in the forward-looking statements. Forward-looking
statements include those containing such words as “anticipates,”
“believes,” “estimates,” “expects,” “goal,” “hopes,” “intends,” “plans,”
“targets,” “should,” “will,” “will likely result,” “forecast,”
“outlook,” “projects” or other words of similar meaning. 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. Important factors that could cause
actual results to differ materially from those in the forward-looking
statements include: (a) material adverse changes in economic or aluminum
industry conditions generally, including global supply and demand
conditions and fluctuations in London Metal Exchange-based prices for
primary aluminum, alumina and other products; (b) material adverse
changes in the markets served by Alcoa, including automotive and
commercial transportation, aerospace, building and construction,
distribution, packaging, and industrial gas turbine markets; (c) Alcoa’s
inability to achieve the level of cost reductions, cash generation or
conservation, return on capital improvement, improvement in
profitability and margins, or strengthening of operations anticipated by
management in connection with its restructuring, portfolio streamlining
and liquidity strengthening actions; (d) continued volatility or
deterioration in the financial markets, including disruptions in the
commercial paper, capital and credit markets; (e) Alcoa’s inability to
mitigate impacts from increased energy, transportation and raw materials
costs, including caustic soda, calcined petroleum coke and natural gas,
or from other cost inflation; (f) Alcoa’s inability to complete its
Brazilian growth and portfolio streamlining projects or achieve
efficiency improvements at newly constructed or acquired facilities as
planned and by targeted completion dates; (g) unfavorable changes in
laws, governmental regulations or policies, foreign currency exchange
rates or competitive factors in the countries in which Alcoa operates;
(h) significant legal proceedings or investigations adverse to Alcoa,
including environmental, product liability, safety and health and other
claims; and (i) the other risk factors summarized in Alcoa’s Form 10-K
for the year ended December 31, 2008 and other reports filed with the
Securities and Exchange Commission.