This is a summary of the third quarter fiscal 2007 earnings call conducted by Alcoa Inc. (AA: chart) on October 9th, 2007.

Management:
Chairman and Chief Executing Officer: Alain Belda
Chief Financial Officer: Charles McLane
IR: Tony Thene

Key Investor Issues

- Earnings were $555 million, or 63 cents per share, compared with $537 million, or 61 cents per share, during the same period a year ago.
- Revenue slid more than 3 percent, to $7.39 billion from $7.63 billion last year.
- Alcoa''s board authorized the repurchase of up to 25% of the company''s outstanding common stock, about 217 million shares worth about $8.6 billion.

Third Quarter Highlights

The company had a seasonal slowdown in Europe and the softening of key markets in the U.S. and continued cost pressures with energy and the U.S. dollar devaluation, as well as lower metal prices. To offset these external pressures, the company continued to focus on productivity improvement, market share gains and new products.

In addition, the company did a lot of portfolio management and restructuring.

- Alcoa sold its 7% equity holding in Chalco and received $2 billion in proceeds.
- The company withdrew its offer for Alcan and took the charges related to that offering. - The company announced the sale of two businesses and continued to restructure its downstream.

For the packaging and consumer business the company has received indicative offers from several potential buyers and is confident enough with the process to state that Alcoa intends to close by the end of this year or early in 2008.

For the AFL business, the most prudent course of action has been to implement a significant restructuring aimed at reducing the cost structure and returning this business to an acceptable return. The management will then determine the best course of going forward with that business.

On a year-to-date basis through these three quarters Alcoa has established all-time records for revenue, earnings, EPS and cash from operations.

The board authorized a significant increase in the current share repurchase program, moving from 10% to 25%, underscoring the company’s belief in the inherent value of the company and its long-term potential.

Details of the Chalco Decision

The company does not normally take minority stake, but it did participate in the Chalco IPO six years ago. The management saw that at the time as an opportunity and a way to help Chalco enter the equity market. The transaction yielded proceeds of $2 billion and a total shareholder return of greater than 1000%, or 44% on an annualized return basis.

The company opened its first office in China in 1993 and currently operates 17 manufacturing facilities there.

Alcoa is in the midst of a major expansion of the Bohai rolling mill where the company is investing approximately $300 million in an advanced hot rolling mill. The management anticipates having this mill commissioned early next year.

Aluminum Market Update

- Visible stocks are higher with the LME up to more than 100,000 tons in September. Most of that increase came in the U.S. and Europe, while the Asia region declined.
- Metal being placed in warrant should not be confused with metal being sold to the LME cash market.

This move from off warrant to warrant was driven by increases in the cost of credit which forced more visibility on stock and kept off the warehouses. Even with these increases, total inventory defined in days of consumption is still at a healthy level, more than three days lower than it was at the same period last year of about 35 to 37 days total.

On the demand side, China remains a major driver of growth.