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April 6, 2005

Alcoa Announces First Quarter 2005 Revenues of $6.3 Billion, Income From Continuing Operations of $273 Million, or $.31 a Share; Strong Results Despite Negative Impacts from Elkem Tax, Restructuring, and Russian Investments Totaling $0.09 per Share

NEW YORK--(BUSINESS WIRE)--April 6, 2005--Alcoa (NYSE:AA)

First Quarter 2005 Highlights:

-- Income from continuing operations of $273 million, or $0.31 per diluted share;

-- Solid operational results include $0.09 per share negative impact from restructuring charges, tax on Elkem, and integration and start-up costs of Russian facilities;

-- Sales increased by 13% over 1st quarter of 2004 to $6.3 billion, up 4% from the sequential quarter;

-- Four of six segments achieved double-digit improvements in profitability over the sequential quarter;

-- Smelting restarts at Wenatchee, ABI and Massena contributed 43,000 metric tons of production in the quarter.

Alcoa (NYSE:AA) announced today income from continuing operations for the first quarter 2005 of $273 million, or $0.31 per diluted share. Net income for the quarter was $260 million, or $0.30. Income from continuing operations for the first quarter 2004 was $0.41, or $0.39, in the fourth quarter 2004. For the first quarter 2004 net income was $0.41, or $0.30, in the fourth quarter 2004.

Both first quarter 2005 income measures include negative impacts totaling $0.09 per share for: the tax impact on Alcoa's sale of its Elkem investment ($39 million after tax); restructuring charges ($25 million after tax); and costs of integrating the recently acquired Russian business ($12 million after tax). The fourth quarter of 2004 included a gain of $37 million, or $0.04, on the Juruti transfer, while the first quarter of 2004 include a gain of $58 million, or $0.07, on the sale of specialty chemicals.

"Underlying business performance improved in the quarter as we captured the benefits of higher metal prices and a stronger economy in North America," said Alcoa Chairman and CEO Alain Belda. "We were able to regain traction on the cost initiative, overcoming cost inflation increases, to deliver savings to the bottom line.

"As we move forward, we will continue to tackle costs, to benefit from strong demand in end markets and the sustained high commodity prices," said Belda. "We are focused on delivering near-term results while we continue to build for the future."

Results Overview

Sales in the first quarter rose to $6.289 billion, up 13 percent over the first quarter of 2004, and the highest in four years. On a sequential quarter basis, revenue increased 4 percent, driven by higher primary metal and alumina prices as well as strength in the flat rolled products, extruded products, and engineered solutions segments.

Four of the company's six reporting segments achieved double-digit improvements in profitability over the fourth quarter of last year. Primary metals, flat-rolled products, extruded products, and engineered solutions all grew profits sharply with both higher volumes and favorable pricing. Strong end markets kept demand high in both upstream and downstream businesses. On an operational basis, the alumina segment also achieved double-digit profit improvement, excluding the Juruti gain in the fourth quarter 2004, as higher contract prices drove stronger profitability. The packaging segment was slowed by seasonal declines and increased costs.

The company's cost-savings initiatives offset cost inflation and achieved an additional $15 million of savings in the quarter, or $60 million annualized, toward the company's cost-savings goal. The company also announced a restructuring plan that will be completed over the next twelve months, resulting in an after-tax charge of $25 million and approximately $45 million in annualized savings when complete. The company is contemplating additional charges in the second quarter as further restructuring initiatives are finalized.

The company's trailing twelve month return on capital stood at 7.8 percent.

Update on Primary Metal Restarts

In order to take advantage of higher metal prices, the company continued to implement re-start initiatives at its North American smelters. Capacity restarts were completed ahead of schedule at the Wenatchee smelter in Washington, USA and the Massena East and West smelters in New York, USA. The restart at the ABI smelter in Quebec will be completed in April. Restarts at the three facilities contributed 43,000 additional metric tons in the first quarter with costs totaling $5 million after taxes. Following the restarts, Alcoa will have 343,000 metric tons idled of its total capacity of approximately 4 million metric tons.

Strategic Acquisitions and Divestitures

Alcoa completed the acquisition of Rusal's interests in Russian fabricating facilities in Samara and Belaya Kalitva, allowing Alcoa's leading flat-rolled products business to serve the growing Russian market and export to its global customers from a competitive cost base. The integration of these plants had a negative impact of $12 million after tax in the first quarter due to integration expenses and operating losses.

Alcoa tendered its 46.5 percent stake in Elkem ASA for $870 million in cash, and will record a $220 million gain after taxes on the transaction in the second quarter. In the first quarter, the company had a charge of $39 million related to the tax impact on previously undistributed equity earnings and related transaction costs. Alcoa continues to hold a 50 percent stake in two Norwegian aluminum smelters in Norway with combined capacity of 282,000 metric tons per year. Alcoa is also developing a new jointly owned anode plant that will serve the Norwegian smelters and Alcoa's greenfield Icelandic smelter.

Alcoa completed its agreement with Fujikura, Ltd. to acquire full ownership of the Alcoa Fujikura ("AFL") automotive business. In return, Fujikura has obtained complete ownership of the AFL telecommunications business and a cash balancing contribution of $176 million.

Earlier this quarter, Alcoa and its partner completed the sale of Integris Metals to Ryerson Tull for $410 million in cash. Alcoa had owned 50 percent of Integris Metals.

Balance Sheet and Growth Projects

In the quarter, capital expenditures were $347 million, 108 percent of depreciation. Full year capital spending is estimated to be approximately $2.5 billion, with approximately $1.6 billion dedicated to growth projects.

During the quarter, the company continued to invest in the upstream businesses, completing the Suriname alumina refinery expansion, and making significant progress on the expansion of the Pinjarra refinery in Australia. Work on the new smelter in Iceland and the expansion of the Alumar smelter in Brazil continues, and the company also signed an agreement with the Republic of Ghana to re-start the Valco smelter. Details of that restart are still being negotiated.

Debt to capital stood at 33.3% at the end of the first quarter, a 160 basis point improvement from the first quarter of 2004. Debt increased from the end of 2004 to fund acquisitions and working capital. The company has already received payment of $870 million in cash in the second quarter of 2005 for the Elkem transaction.

Segment and Other Results

Segment Changes

In conjunction with the global realignment of its organization structure, the composition of certain of Alcoa's segments has changed. The businesses within the former Engineered Products segment and the Other "group" have been realigned to form the new Extruded and End Products segment and the Engineered Solutions segment.

Extruded and End Products - This segment consists of extruded
   products, some of which are further fabricated into a variety of 
   end products, and includes hard- and soft-alloy extrusions, 
   architectural extrusions, and vinyl siding. These products 
   primarily serve the building and construction, distribution and 
   transportation markets. These products are sold directly to 
   customers and through distributors.

   Engineered Solutions - This segment includes titanium, aluminum and
   super-alloy investment castings, forgings and fasteners; electrical
   distribution systems; aluminum wheels; and integrated aluminum 
   structural systems used in the aerospace, automotive, commercial 
   transportation and power generation markets. These products are 
   sold directly to customers and through distributors

Prior period segment amounts have been restated to reflect these changes.

(All comparisons are on a sequential quarter basis, unless noted.)

Alumina - Segment profitability was $161 million, down from $177 million. The previous quarter's results included a $37 million gain associated with the Juruti transaction. Excluding that gain, segment profitability increased $21 million or 15% as higher prices offset lower shipments and caustic costs. Alumina production for the quarter was 3,583 thousand metric tons ("kmt"), compared to 3,623 kmt in the fourth quarter of 2004.

Primary Metals - Segment profitability increased by $27 million or 14 percent, largely due to higher metal prices and shipments. Restart costs at the three restarted facilities totaled $5 million after tax. Higher energy costs (up $16 million after taxes) partially offset the benefit of higher aluminum prices. Primary metal production for the quarter rose 27 kmt for the quarter to 851 kmt. The company purchased roughly 185 kmt of primary metal for internal use as part of its strategy to sell value-added products.

Flat Rolled Products - Segment profitability increased to $75 million, despite an $11 million loss associated with integration costs for the Russian rolling mills. Excluding this loss, improved segment performance was driven by favorable pricing and mix in both North America and Europe.

Extruded and End Products - Segment ATOI grew sharply to $15 million, due to stronger demand in Europe extrusions and seasonal strengthening of the home exteriors business.

Engineered Solutions - Segment profitability in the Engineered Solutions segment rose sharply to $59 million, due to stronger demand in the aerospace and commercial vehicle markets.

Packaging and Consumer - Segment ATOI fell to $22 million due to the seasonal decline in the consumer products business and increased raw material costs, primarily resin. Compared to the year ago quarter, cost inflation, particularly raw materials and freight drove profitability lower.

ATOI to Net Income Reconciliation

The largest variances in reconciling items were in the "minority interest," "discontinued operations," and "other" line items. "Minority Interest" expense increased due to strong earnings in the AWAC business. "Discontinued Operations" includes a charge associated with reduction of the fair value of the assets held for sale. "Other" includes the tax charge associated with the sale of the Elkem shares, compared to the tax benefits from the Juruti transaction and the reversal of a valuation reserve for foreign net operating losses recorded in the fourth quarter of 2004.

Quarterly Conference Call

Alcoa will hold its quarterly conference call at 5:00 PM Eastern Time on April 6th to present the quarter's results. The meeting will be webcast via alcoa.com. Call information and related details are available at www.alcoa.com under "Invest."

About Alcoa

Alcoa is the world's leading producer and manager of primary aluminum, fabricated aluminum and alumina facilities, and is active 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, Alcoa also markets consumer brands including Reynolds Wrap(R) foils and plastic wraps, Alcoa(R) wheels, and Baco(R) household wraps. Among its other businesses are vinyl siding, closures, fastening systems, precision castings, and electrical distribution systems for cars and trucks. The company has 131,000 employees in 43 countries and has been a member of the Dow Jones Industrial Average for 45 years and the Dow Jones Sustainability Indexes since 2001. More information can be found at www.alcoa.com

Forward Looking Statement

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. 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 prices for primary aluminum, alumina and other products; (b) material adverse changes in the markets served by Alcoa, including the transportation, building, construction, distribution, packaging, industrial gas turbine and other markets; (c) Alcoa's inability to achieve the level of cost savings, productivity improvements or earnings growth anticipated by management, whether due to significant increases in energy, raw materials or employee benefits costs, labor disputes or other factors; (d) changes in laws, governmental regulations or policies, currency exchange rates or competitive factors in the countries in which Alcoa operates; (e) a significant downturn in the business or financial condition of a key customer or customers supplied by Alcoa; (f) significant legal proceedings or investigations adverse to Alcoa, including environmental, product liability, safety and health and other claims; and (g) the other risk factors summarized in Alcoa's Form 10-K for the year ended December 31, 2004 and other reports filed with the Securities and Exchange Commission.

Alcoa and subsidiaries
Condensed Statement of Consolidated Income (unaudited)
(in millions, except per-share, share, and metric ton amounts)

                                           Quarter ended
                               March 31     December 31    March 31
                                 2004          2004          2005
                             ------------- ------------- -------------
Sales                        $      5,588  $      6,041  $      6,289

Cost of goods sold                  4,343         4,879         4,981
Selling, general
 administrative, and other
 expenses                             333           336           333
Research and development
 expenses                              44            53            46
Provision for depreciation,
 depletion, and amortization          299           311           317
Restructuring and other
 charges                              (31)            1            45
Interest expense                       63            70            78
Other income, net                     (22)          (67)          (36)
                             ------------- ------------- -------------
  Total costs and expenses          5,029         5,583         5,764

Income from continuing
 operations before taxes on
 income                               559           458           525
Provision for taxes on income         155            65           192
                             ------------- ------------- -------------
Income from continuing
 operations before minority
 interests' share                     404           393           333
Less:  Minority interests'
 share                                 51            48            60
                             ------------- ------------- -------------

Income from continuing
 operations                           353           345           273

Income (loss) from
 discontinued operations                2           (77)          (13)
                             ------------- ------------- -------------

NET INCOME                   $        355  $        268  $        260
                             ============= ============= =============

Earnings (loss) per common
 share:
 Basic:
   Income from continuing
    operations               $        .41  $        .40  $        .31
   Loss from discontinued
    operations                          -          (.09)         (.01)
                             ------------- ------------- -------------
      Net income             $        .41  $        .31  $        .30
                             ============= ============= =============

 Diluted:
   Income from continuing
    operations               $        .41  $        .39  $        .31
   Loss from discontinued
    operations                          -          (.09)         (.01)
                             ------------- ------------- -------------
      Net income             $        .41  $        .30  $        .30
                             ============= ============= =============

Average number of shares used
 to compute:
   Basic earnings per common
    share                     869,402,685   870,608,606   871,534,867
   Diluted earnings per
    common share              878,755,125   877,423,613   878,883,569

Common stock outstanding at
 the end of the period        869,356,569   870,980,083   872,011,266

Shipments of aluminum
 products (metric tons)         1,285,000     1,266,000     1,290,000


Alcoa and subsidiaries
Condensed Consolidated Balance Sheet (unaudited)
(in millions)

                                              December 31   March 31
                                                  2004        2005
                                              ----------- ------------
ASSETS
Current assets:
  Cash and cash equivalents                   $      457  $       497
  Receivables from customers, less allowances:
    $87 in 2004, and $81 in 2005                   2,738        3,159
  Other receivables                                  261          263
  Inventories                                      2,968        3,370
  Deferred income taxes                              279          191
  Prepaid expenses and other current assets          790          944
                                              ----------- ------------
     Total current assets                          7,493        8,424
                                              ----------- ------------

Properties, plants and equipment, at cost         25,865       26,080
Less: accumulated depreciation, depletion and
 amortization                                     13,273       13,345
                                              ----------- ------------
Net properties, plants and equipment              12,592       12,735
                                              ----------- ------------
Goodwill                                           6,541        6,574
Investments                                        2,066        1,897
Other assets                                       3,707        3,975
Assets held for sale                                 210          109
                                              ----------- ------------
     Total assets                             $   32,609  $    33,714
                                              =========== ============

LIABILITIES
Current liabilities:
  Short-term borrowings                       $      267  $       330
  Commercial paper                                   630        1,632
  Accounts payable, trade                          2,226        2,428
  Accrued compensation and retirement costs        1,021          946
  Taxes, including taxes on income                 1,019        1,029
  Other current liabilities                        1,078        1,038
  Long-term debt due within one year                  57           47
                                              ----------- ------------
     Total current liabilities                     6,298        7,450
                                              ----------- ------------
Long-term debt, less amount due within one
 year                                              5,346        5,267
Accrued pension benefits                           1,513        1,546
Accrued postretirement benefits                    2,150        2,141
Other noncurrent liabilities and deferred
 credits                                           1,727        1,792
Deferred income taxes                                790          886
Liabilities of operations held for sale               69           60
                                              ----------- ------------
     Total liabilities                            17,893       19,142
                                              ----------- ------------

MINORITY INTERESTS                                 1,416        1,169
                                              ----------- ------------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY
Preferred stock                                       55           55
Common stock                                         925          925
Additional capital                                 5,775        5,762
Retained earnings                                  8,636        8,765
Treasury stock, at cost                           (1,926)      (1,887)
Accumulated other comprehensive loss                (165)        (217)
                                              ----------- ------------
     Total shareholders' equity                   13,300       13,403
                                              ----------- ------------
     Total liabilities and equity             $   32,609  $    33,714
                                              =========== ============


Alcoa and subsidiaries
Condensed Statement of Consolidated Cash Flows (unaudited)
(in millions)

                                                  Three months ended
                                                       March 31
                                                     2004      2005
                                                 ---------- ---------
CASH FROM OPERATIONS
Net income                                            $355      $260
Adjustments to reconcile net income to cash from
 operations:
   Depreciation, depletion, and amortization           301       320
   Noncash restructuring and other charges             (31)       45
   Minority interests                                   51        60
   Other                                               (60)       31
Changes in assets and liabilities, excluding
 effects of acquisitions and divestitures:
   Increase in receivables                            (280)     (501)
   Increase in inventories                            (302)     (370)
   Increase in accounts payable and accrued
    expenses                                           166        97
   Cash paid on long-term aluminum supply
    contract                                             -       (95)
   Net change in noncurrent assets and
    liabilities                                       (118)      (65)
   Net change in net assets held for sale               31         -
   Other                                               (24)       (4)
                                                 ---------- ---------
      CASH PROVIDED FROM (USED FOR) CONTINUING
       OPERATIONS                                       89      (222)
      CASH PROVIDED FROM (USED FOR) DISCONTINUED
       OPERATIONS                                        1       (17)
                                                 ---------- ---------
      CASH PROVIDED FROM (USED FOR) OPERATIONS          90      (239)
                                                 ---------- ---------

FINANCING ACTIVITIES
Net changes to short-term borrowings                   (33)       63
Dividends paid to shareholders                        (130)     (131)
Dividends paid to minority interests                   (39)      (72)
Net change in commercial paper                           -     1,002
Other                                                  (75)        7
                                                 ---------- ---------
      CASH (USED FOR) PROVIDED FROM FINANCING
       ACTIVITIES                                     (277)      869
                                                 ---------- ---------

INVESTING ACTIVITIES
Capital expenditures                                  (193)     (347)
Acquisitions, net of cash acquired                       -      (434)
Proceeds from the sale of assets                       309         -
Sale of investments                                      -       206
Other                                                  (46)       (9)
                                                 ---------- ---------
      CASH PROVIDED FROM (USED FOR) INVESTING
       ACTIVITIES                                       70      (584)
                                                 ---------- ---------

      EFFECT OF EXCHANGE RATE CHANGES ON CASH            -        (6)
                                                 ---------- ---------
Net change in cash and cash equivalents               (117)       40

Cash and cash equivalents at beginning of year         576       457
                                                 ---------- ---------
      CASH AND CASH EQUIVALENTS AT END OF PERIOD      $459      $497
                                                 ========== =========


Alcoa and subsidiaries
Segment Information (unaudited) (1)
(in millions, except metric ton amounts and realized prices)

Consolidated Third-Party
 Revenues:                  1Q04   2Q04   3Q04   4Q04    2004   1Q05
                           -------------------------------------------
 Alumina                   $  463 $  486 $  490 $  536 $ 1,975 $  505
 Primary Metals               878    959    930  1,039   3,806  1,089
 Flat-Rolled Products       1,450  1,490  1,520  1,502   5,962  1,655
 Extruded and End Products    943  1,027  1,028    976   3,974  1,037
 Engineered Solutions       1,149  1,189  1,106  1,159   4,603  1,241
 Packaging and Consumer       721    821    797    827   3,166    771
----------------------------------------------------------------------
    Total (2)              $5,604 $5,972 $5,871 $6,039 $23,486 $6,298
======================================================================

Consolidated Intersegment
 Revenues:                  1Q04   2Q04   3Q04   4Q04    2004   1Q05
                           -------------------------------------------
 Alumina                   $  338 $  349 $  341 $  390 $ 1,418 $  393
 Primary Metals             1,038  1,129  1,039  1,129   4,335  1,303
 Flat-Rolled Products          23     23     25     18      89     34
 Extruded and End Products     15     12     14     13      54     14
 Engineered Solutions           -      -      -      -       -      -
 Packaging and Consumer         -      -      -      -       -      -
----------------------------------------------------------------------
    Total                  $1,414 $1,513 $1,419 $1,550 $ 5,896 $1,744
======================================================================

Consolidated Third-Party
 Shipments (Kmt):           1Q04   2Q04   3Q04   4Q04    2004   1Q05
                           -------------------------------------------
  Alumina (3)               1,838  1,981  2,030  2,213   8,062  1,923
  Primary Metals              469    472    459    482   1,882    487
  Flat-Rolled Products        515    517    521    493   2,046    509
  Extruded and End Products   225    235    225    210     895    221
  Engineered Solutions         34     33     31     35     133     39
  Packaging and Consumer       38     41     39     46     164     34
----------------------------------------------------------------------
    Total Aluminum          1,281  1,298  1,275  1,266   5,120  1,290
======================================================================

Alcoa's average realized
 price-Primary             $ 0.81 $ 0.85 $ 0.85 $ 0.88 $  0.85 $ 0.93
======================================================================

After-Tax Operating Income
 (ATOI):                    1Q04   2Q04   3Q04   4Q04    2004   1Q05
                           -------------------------------------------
 Alumina                   $  127 $  159 $  169 $  177 $   632 $  161
 Primary Metals               192    230    188    198     808    225
 Flat-Rolled Products          66     59     62     59     246     75
 Extruded and End Products     17     30     28     (2)     73     15
 Engineered Solutions          62     69     39     41     211     59
 Packaging and Consumer        35     54     41     38     168     22
----------------------------------------------------------------------
    Total                  $  499 $  601 $  527 $  511 $ 2,138 $  557
======================================================================

Reconciliation of ATOI to
 consolidated
 net income:                  1Q04 2Q04   3Q04   4Q04    2004   1Q05
                           -------------------------------------------
   Total ATOI              $  499 $  601 $  527 $  511 $ 2,138 $  557
   Impact of intersegment
    profit adjustments         23      8      3     18      52     17
   Unallocated amounts (net
    of tax):
     Interest income            7      5      8      6      26      7
     Interest expense         (41)   (45)   (44)   (46)   (176)   (51)
     Minority interests       (51)   (74)   (72)   (48)   (245)   (60)
     Corporate expense        (74)   (63)   (68)   (78)   (283)   (69)
     Restructuring and
      other charges            31     (4)    (3)    (1)     23    (30)
     Discontinued
      operations                2     (1)   (16)   (77)    (92)   (13)
     Other                    (41)   (23)   (52)   (17)   (133)   (98)
----------------------------------------------------------------------
   Consolidated net income $  355 $  404 $  283 $  268 $ 1,310 $  260
======================================================================

(1) Segment information for all prior periods has been restated to
    reflect the change in segments due to a global realignment within
    the company, effective January 2005.

(2) The difference between the segment total and consolidated
    third-party revenues is in Corporate.

(3) Alumina third-party shipments have been restated to reflect total
    alumina shipments rather than only smelter-grade alumina
    shipments, as was previously disclosed.