DBRS Releases Report on Alcoa Inc.

DBRS Limited (DBRS) has today released a report on Alcoa Inc. (Alcoa or the Company) that provides support to DBRS’s September 9, 2015, confirmation of the Company’s ratings and the change in the trend of the ratings to Stable from Negative as well as DBRS’s subsequent discontinuance and withdrawal of DBRS’s Commercial Paper and Preferred Shares ratings of the Company.

Alcoa is one of the world’s largest integrated aluminum producers with significant interests in aluminum-related mining, refining, smelting, processing, fabrication, marketing and recycling facilities. It is also a significant producer and fabricator of other light metals, alloys and related products.

Alcoa has enhanced its business profile over the last several years through investing in new production capacity in its Alumina business unit and in its Primary Metals unit (together, Upstream businesses), adding new low-cost capacity but, more importantly, closing old high-cost capacity. The Company has followed a similar course in its Global Rolled Products (GRP) unit (Midstream business), rationalizing capacity, and it has expanded its Engineered Products and Solutions business (EPS) through organic growth and acquisitions (Downstream businesses on its own or with GRP). The result has been Alcoa’s more competitive position on industry cost curves for its Primary Metals unit and steady profit growth for its EPS unit. Furthermore, Alcoa closed the acquisition of RTI International Metals (RTI) in July 2015 and is close to completing construction at the Saudi Arabian Mining Company (Ma’aden) integrated aluminum project in Saudi Arabia, which will add to equity earnings and reduce Ma’aden construction/investment outflows.

DBRS expects that Alcoa’s earnings and key financial metrics will improve in 2015 with the equity issuance and added earnings related to the RTI acquisition as well as ongoing growth in its Downstream units, partially offset by reduced earnings from Upstream units as aluminum prices and regional premiums continue to deteriorate. Over the longer term, acquisitions, the realization of synergy, organic growth, cost improvements in its Upstream operations and other efficiencies are expected to help Alcoa to continue to improve its financial metrics.

Today’s report and the September 9, 2015, press release are available at www.dbrs.com or by contacting us at info@dbrs.com.