careers    contact us 
 go 
Worldwide
Sustainability Home 
Overview
Shareholder Value
Approach
Programs & Actions
Performance Data
Customers
Procurement
Shareholder Information
Contact Us


Shareholder Value—Programs & Actions

 Alcoa Share Price Performance
Alcoa has been listed on the New York Stock Exchange (ticker symbol: AA) since 1951 and had an estimated 233,000 common shareholders that owned, on average, 861 million common shares in 2007.

In 2007, our total shareholder return (stock appreciation plus dividends reinvested) was 24%, far outperforming the Dow Jones Industrial Average and the Standard and Poor’s 500 indices.

We have delivered returns to shareholders, in part, through quarterly dividends, which have been paid uninterrupted since 1939. Our Board of Directors determines whether dividends will be paid and, if so, the amounts, taking into account various factors that include operational performance and capital requirements. The annual common stock dividend was increased by more than 13% to US$0.68 per share at the beginning of 2007.

To further improve our returns to shareholders, our Board of Directors authorized a new share repurchase program that became effective in October 2007. The new program authorizes the purchase of approximately 217 million shares and expires on December 31, 2010.

This new program superseded the share repurchase program that was approved by the Board of Directors in January 2007 and which authorized the repurchase of up to 87 million shares of common stock. The shares repurchased under the January 2007 program count against the shares authorized for repurchase under the new program. During 2007, we repurchased 68 million shares, including 43 million shares under the January 2007 program.

Performance data
go


Return on Capital
One of the most important indicators of how we are performing in a capital-intensive industry such as ours is return on capital (ROC). As such, constantly improving ROC remains a key goal of the company.

After excluding growth investments and construction work in progress, our ROC in 2007 was 16.1%. Including such items, our ROC stood at 12.7%—well above the cost of capital.

Performance data
go


Positioning for Growth
A strong balance sheet—measured in terms of the relationship between debt and total capitalization—is crucial to enabling profitable growth through both the general economic and aluminum cycles. Our target debt-to-total capitalization is between 30% and 35%. In 2007, our debt-to-total capitalization stood well within this range at 30.2%.

Our strong balance sheet has allowed us to retain an investment grade rating with major agencies, such as Standard and Poor’s Ratings Services (S&P) and Moody’s Investors Service (Moody’s), for more than 30 years. At the end of 2007, our long-term debt was rated “BBB+” by S&P and “Baa1” by Moody’s.


Driving Growth
Economic value is the engine that drives our company and the benefits to our stakeholders. To increase this value, we continue to manage our investment decisions and portfolio actions on the basis of contribution to profitable growth.

Upstream Growth Initiatives
We opened our first greenfield smelter in two decades following a three-year construction project that set environmental and safety benchmarks. The 344,000 metric-tons-per-year (mtpy) Fjarðaál smelter in east Iceland is the most modern and technologically advanced smelter in the world.

We expanded our presence in Norway with the startup of a 280,000 mtpy plant in Mosjøen that will produce anodes for the Fjarðaál and Mosjøen aluminum smelters. This facility is one of the world’s largest and most environmentally friendly facilities of its type.

The world’s largest alumina refinery expansion at the Alumar consortium plant in São Luís, Brazil, is nearly 60% complete. When finished, the US$2.2 billion investment will increase production at the refinery from 1.4 million mtpy to 3.5 million mtpy.

Construction of the bauxite mine, port, and railway in Juruti, Brazil, is underway, with the first bauxite shipment to our Alumar refinery scheduled for late 2008.

Construction is also progressing at two hydroelectric power projects in Brazil in which we hold an equity interest. One such project, the 1,087-megawatt Estreito plant, will bring 149 megawatts of power to our Alumar smelter when it is completed in 2011. The other project, the 210-megawatt Serra do Facão plant, will bring 64 megawatts of power when it is completed in 2010.

We reached agreement on new power contracts for our aluminum smelters in Massena, New York, and Wenatchee, Washington, in the United States. These power contracts will provide a long-term, stable source of competitively-priced, renewable hydropower. Both agreements allow for production expansion and modernization projects to secure the future of the facilities and keep them competitive in the global smelting system. Other re-powering negotiations are underway across the entire smelter system to extend the life of our facilities.

Several business objectives were achieved for the planned alumina refinery in Guinea. Some of the more notable accomplishments were the selection of the location for the refinery and the completion of resettlement agreements with the government. Port and berth agreements are in process. The 1.65 million mtpy refinery will be jointly owned by Guinea, Alcoa, and Rio Tinto Alcan.
We have signed memorandums of understanding to develop smelters in Greenland and North Iceland. We are also pursuing smelter positions in China and the Middle East, most likely through joint ventures.

Downstream Growth Initiatives
The expansion project at our Bohai plant in Qinhuangdao, China, is scheduled for completion in mid-2008. The nearly US$280 million expansion includes a new hot mill, cold mill, and finishing equipment, as well as a lithographic line. With this new capacity, we will be able to produce high-quality aluminum sheet products for the beverage, printing, transportation, and industrial and electronics markets throughout Asia.

We completed the installation of a new lithographic cleaning line at our Warrick Operations in Indiana. This US$47 million line is designed specifically to clean, level, and trim lithographic sheet that is used in the high-end printing market for products that include magazines, periodicals, brochures, and newspaper inserts.

We broke ground on a new US$22 million project at our can reclamation facility in Knoxville, Tennessee. This project will include a new crusher and delacquering furnace and supporting building enclosures, utilities, and environmental systems. The project will increase our recycling capacity by nearly 50% and is expected to be completed in 2009.

We completed the US$30 million expansion of our rolling mill in Itapissuma, Brazil. The investment was aimed at increasing production by 30%, mainly to supply a major packaging customer.

Other
Late in 2007, we agreed to sell the businesses included in our Packaging and Consumer segment to New Zealand’s Rank Group Limited for US$2.7 billion in cash. These businesses included flexible packaging, closures, consumer products, and food packaging. The sale was completed in February 2008.

Also in 2007, we sold our investment in the Aluminum Corporation of China Limited (Chalco) for US$1.9 billion in cash, completed the sale of our Automotive Castings business to Compass Automotive Group, LLC for US$33 million in cash, and completed the formation of our soft alloy extrusion joint venture, in which we now hold a 46% stake, with Orkla ASA’s Sapa Group.

In May 2007, following nearly two years of discussions with Alcan management, we made an offer to acquire that company. Our offer subsequently was topped by Rio Tinto by more than US$10 billion. We chose at that time to withdraw our offer and instead re-focus our efforts on delivering results.

On February 1, 2008, we announced that we joined with the Aluminum Corporation of China (Chinalco) to acquire 12% of the U.K. common stock of Rio Tinto plc (RTP) for approximately US$14 billion. Of this amount, we contributed US$1.2 billion on February 6, 2008. The investment was made through a special purpose vehicle called Shining Prospect Pte. Ltd. (SPPL), which is a private limited liability company created for the purpose of acquiring the RTP shares.


Case Studies
Measuring the Financial Impact of Alcoa's Presence
City-Initiated Sustainability Initiative Reduces Environmental Impact, Costs
Kaizen Event Reduces Pump Changeover Time
Walking the Flow Path, Three in a Row
A Stakeholder Perspective on Alcoa
Suggestion Systems Reduce Costs, Improve EHS, Engage Employees
Smelter Effort Reduces Emissions, Costs with No Capital Investment
Alcoa Business System Opens Window to Waste Elimination
Asbestos Removal Technique Increases Protection, Reduces Costs
Coating Reformulation Brings Environmental, Economic Benefits
New Rolling Method Win for Environment, Alcoa Business
Process Changes Result in 85% Reduction in Water Usage, Discharge
Waste Elimination Effort Reaps Environmental, Financial Benefits
Copyright © 2008 Alcoa Inc.
country sites
customer login

Sitemap | Privacy | Legal Notices