Alcoa Corporation BMO Capital Markets 28 th Global Metals & - PDF document

Alcoa Corporation BMO Capital Markets 28 th Global Metals & Mining Conference February 26, 2019 at 11:00 AM Eastern CORPORATE PARTICIPANTS Roy Harvey - Chief Executive Officer

Alcoa Corporation February 26, 2019 11:00 AM EST Page 1 Dave Gagliano, BMO: We're going to switch gears a little bit, switch over to Alcoa. Alcoa ranks among the largest aluminum, or aluminium -- aluminum producers and alumina producers globally. Vertically integrated production base, bauxite, alumina, primary aluminum. Operations spread throughout Australia, Europe, Iceland, South America, North America. Joining us today from Alcoa is President and CEO Roy Harvey. Roy Harvey: Thank you, Dave. Good. So I've decided not to be tied behind the lectern, so let me just make a quick sound check. Can everybody hear me? It's all okay. Good. Perfect. Thank you so much for joining us. I do want to spend a few minutes today here in general comments. I'm targeting about 20 minutes so that we have lots of time for questions and answers. I want to hit on a little bit about who Alcoa is, what are some key topics that we've been seeing over the course of this conference and then also dive into some -- what we think are special items of interest. And so with that, let me start off. Cautionary statement, everybody is aware of that. You can read that at your leisure. And let's jump in. Let me start by just giving you the three minute pitch about who Alcoa is, what is it that we do and why we do it. And so the idea here is to wrap into one slide some of those key things that I believe is in the DNA of each and every Alcoan and it certainly is the reason that I feel so excited to be part of Alcoa. Let me start on the right-hand side of this slide. And let me start with our values. Now, values aren't necessarily the first thing we talk about with our stockholders, however it is the fundamental and most important aspect about what it means to be an Alcoan. As we emerged from separation with the, what is now Arconic, as we started to think through who we needed to be and how we protect our reputation, we started off very clear with values. And we have three simple things that we try to do. We act with integrity, which means we all do the right thing, given the information that we have. We operate with excellence, which means that we are always looking to improve each and every one of our operations. And we care for people. Now caring for people doesn't mean that we avoid hard decisions. What it does mean is that we understand and react to the conditions in our plants and the conditions that the choices and decisions that we make have on people and our communities.

Alcoa Corporation February 26, 2019 11:00 AM EST Page 2 So that bedrock of values, particularly in a moment today where we're talking so much about tailings and the safety of communities around our tailings, I think is a differentiating factor inside of Alcoa. Now on top of those values, what we've built is a set of assets that spans from bauxite to alumina and finally to cast and rolled aluminum products. And so it covers a broad swath of the aluminum industry. And so we'll talk more about each of these products. We'll also talk a little bit about the supply and demand fundamentals, but we are a vertically integrated chain, always stepping back and thinking about the value in each one of those businesses. Now let me look over to the left. As part of what we've been doing in order to simplify our company, we've been very focused on having key and very simple messages for each and every Alcoan as they go through their day. And so we have three strategic objectives. The first one is to reduce complexity. And what that means is that we simplify everything. And in every decision that we make, we look for ways to make the company simpler, have a lower cost structure and operate through the cycle in the commodity environment. The second thing we do is that we recognize that we are stewards of shareholders' capital. So it means with every dollar of sustaining capital, every dollar of return seeking capital with our maintenance expenditures, each one of those must drive a return. Each one of those investments needs to make our shareholders, our stockholders, needs to have a clear purpose. And the third thing is that we are very focused on strengthening our balance sheet, or strengthening our company and preparing it for the cycle. So the final point on the right-hand side of this slide, very clearly shows the outcome of two years since separation of working very hard and living through what was a good cycle of earnings and cash flow that has allowed us to accelerate that strengthening of the balance sheet. It gives us a stronger financial position, it has allowed us to work through some long-term liabilities and legacy issues, and most importantly, it has prepared us and set us up for a brighter future. That's important, because right now for all those who are looking and watching the aluminum price as we do, it is important that we are prepared for rougher times, so that we can make the best long-term decisions possible through the cycle. Tightening the belt when the cycle goes down and investing when the cycle goes up and preparing ourselves and ensuring that we have the right maintenance and reliability

Alcoa Corporation February 26, 2019 11:00 AM EST Page 3 systems, et cetera, but always being sure that we are operating smartly through the cycle. Now just let me give you a brief window of our global operations. So you can see here that we stretch across the globe from Brazil to Suriname, United States, Canada, Iceland, Norway, Spain, Saudi Arabia and Australia, and of course, Guinea. So we cover a good portion of the globe. We have really strong Alcoans in each of these locations. We have opportunities and challenges in each of these locations as well. But the important thing is that as we step back and we think about how we can operate smartly in each of these locations, and how we can look to a future where we can improve our plants, where we can expand our plants, and where someday we can start thinking about growth projects, our reputation is based on how we operate, how we interact with each and every one of the communities where we operate. Also, our interactions with stockholders, our interactions with the governments, our host governments, each one of these contributes to our reputation. Our global footprint is focused on openness, on transparency and on having an open door policy so our communities understand what we're doing it and why we're doing it. And that is particularly important, given the discussion that's going on around the world right now, in this conference, and in each of our host governments about what happens in response to this latest tragedy in Brazil. Now most importantly, we need to recognize the fact that there was a serious loss of life and we feel for each one of those families. At the same time, it redoubles our focus and our effort inside of Alcoa, inside of our joint ventures to never let that happen at one of our facilities. And so as we step back and think about our footprint and Alcoa, while it was recently spun from Arconic, has 130 years of legacy and history, we need to be sure that we are managing those tailings, that we are managing those residues in the best and most efficient way possible to ensure that we have the right outcomes, which is a safe tailings facility, a safe residue facility. So two important points here, and you can see it on the right and the left. We'll start with the right. This is an inventory of the tailings and residue disposal areas that we have around the world. And I'll tell you that some of those are located in Brazil, so our upstream facilities that you can see here, some of those are in Brazil. They happen to be residue disposal areas, rather than tailings facilities. The footprint is very different, the engineering is also very different.