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April 10, 2006

Alcoa Announces 1st Quarter 2006 Income from Continuing Operations of $615M, or $0.70 Per Share

NEW YORK--(BUSINESS WIRE)--April 10, 2006--Alcoa (NYSE:AA):



Highlights:

-- Highest quarterly income in company history.

-- Highest quarterly revenues in company history.

-- Five of six business segments achieved higher volumes vs. a year ago.

-- Alumina and Primary Metals segments achieved record quarterly ATOI, up 32 and 84 percent, respectively.

-- Engineered Solutions segment achieved highest quarterly ATOI, up 77 percent from the previous quarter.

-- Debt-to-capital ratio at 32.4 percent, within target range while continuing significant investment in strategic growth projects.

-- Cost of goods sold as a percent of sales improved 640 basis points from prior quarter.

Alcoa (NYSE:AA) today announced first quarter 2006 income from continuing operations of $615 million, or $0.70 per diluted share, the highest quarterly profit in the company's history.

Income from continuing operations of $615 million, or $0.70, was 190 percent higher than $212 million, or $0.24, in the previous quarter, and 129 percent better than $268 million, or $0.31, in the first quarter of 2005.

Net income for the quarter was a record $608 million, or $0.69, a 171 percent increase from the sequential quarter and 134 percent higher than the first quarter of 2005.

Revenues for the quarter increased 9 percent sequentially to $7.24 billion, the highest quarterly revenues in the Company's history. Compared to the year ago quarter, sales have grown 16 percent, as five of the company's six business segments achieved higher volumes.

"We had excellent top and bottom line results, driven by strong demand, favorable metal prices, and productivity programs implemented through the Alcoa Business System," said Alain Belda, Alcoa Chairman and CEO. "Our upstream alumina and primary metals businesses, as well as our downstream engineered solutions -- led by truck wheels, investment castings, forged products, and fasteners -- all turned in record performances this quarter.

"While we are still fighting inflationary pressures, cost increases have slowed from last year, and our restructuring and efficiency initiatives have helped strengthen profitability," said Belda.

"Our aerospace and commercial transportation markets are particularly robust this year, and we expect overall market conditions to remain strong," Belda added.

Cost of goods sold as a percent of sales improved 640 basis points this quarter compared to the fourth quarter of 2005.

Included in the quarter's results are costs for stock-based compensation of $20 million, or $0.02 per share. Stock re-purchases offset any dilution related to stock compensation in the quarter.

Balance Sheet and Growth Projects

With global aluminum consumption projected to double by 2020, Alcoa is pursuing growth projects in its upstream and downstream businesses to seize this opportunity. In the quarter, capital expenditures were $592 million, 63 percent of which, or approximately $370 million, was devoted to growth projects. Two capital projects were essentially completed in the quarter -- the 657,000 metric ton per year (mtpy) efficiency upgrade to the Pinjarra alumina refinery in Australia and the 63,000 mtpy expansion of the Alumar smelter in Sao Luis, Brazil - and will contribute to the second quarter. Growth capital continued to be deployed at the 341,000 mtpy Alcoa Fjardaal smelter in Iceland and the Mosjoen anode plant in Norway. Those projects are on-schedule and are approximately 50 percent complete.

Days of working capital improved three days in the quarter compared to the first quarter of last year. Working capital dollars increased from the previous quarter due to improved market conditions, higher prices, and the building of targeted, strategic inventories in the event of a work stoppage. The potential work stoppage relates to the negotiations of the master contract agreement involving approximately 9,000 of the more than 45,000 U.S. employees. The contract expires May 31st and the key issue is health care. The debt-to-capital ratio stood at 32.4 percent at the end of the quarter, within the Company's target range.

The Company's annualized first quarter 2006 ROC stood at 14.2 percent when including growth investments. On a trailing four quarters basis return on capital for the first quarter 2006 was 11.2 percent after excluding investments on growth.

As part of its growth strategy, the Company also began first phase feasibility studies for a 341,000 mtpy greenfield smelter in Trinidad, began feasibility studies on a second 250,000 mtpy greenfield smelter in Iceland, and increased its stake in the Estreito hydropower facility in Brazil during the quarter.

Sustainability and Innovation/New Products

During the quarter, Alcoa was cited again as one of the most sustainable companies in the world at the World Economic Forum in Davos, Switzerland. The Company was also named by CERES, a national coalition of investors, environmental and public interest organizations, as one of the leaders in climate change and governance.

The Alcoa Foundation launched the $8.6 million Alcoa Conservation and Sustainability Fellowship program during the first quarter. The program will fund the study of global conservation and sustainability research by 30 Academic and 60 non-governmental organization fellows from around the world over the next six years.

Alcoa continued its leadership position in applying technologies to generate innovation on behalf of customers. Examples this quarter included: the introduction of four new product concepts to the fast growing commercial transportation market including Alcoa Dura-Bright(R) Fuel Tanks, aluminum landing gear, an aluminum fifth wheel, and Alcoa Aluplate(TM) aluminum composite panels for trailers; the use of Alcoa Mill Products' Translite exterior clear-coated, polished aluminum side skin as an option on trailers; the selection by Ferrari to use an Alcoa spaceframe made in Modena, Italy for the new Ferrari 599 GTB Fiorano, introduced at the Geneva Auto Show; the supplying of cast aluminum components using vacuum riser-less technology to Hyundai for the 2007 Santa Fe automobile; and selection of Alcoa Wheel Products for new production model vehicles including the Nissan Altima SE-R, Chrysler 300C SRT8, Dodge Charger SRT8, Dodge Ram 2500, Dodge Magnum SRT8, Dodge Viper and Jeep Grand Cherokee SRT8.

Segment and Other Results

Alumina - After-tax operating income ("ATOI") was $242 million, up 32% over the prior quarter. Higher pricing and improved productivity was partially offset by $16 million of energy cost increases. Alumina production for the quarter was 3,702 thousand metric tons (kmt), on par with the prior quarter despite two less days in the first quarter. On a tons per day basis, both the Atlantic and Australia systems achieved production records for the quarter.

Primary Metals - Segment ATOI increased by $203 million, or 84%, to $445 million. The ATOI increase was driven by higher LME prices, premiums, and productivity gains, partially offset by higher energy costs. Third party realized metal prices increased $357 per ton, or 16 percent, to $2,534 per ton. Primary metal production for the quarter declined 33 kmt to 867 kmt, as production from the Alumar, Brazil expansion was offset by the Eastalco, Maryland smelter's December 2005 curtailment and the Portland, Australia smelter outage. The company purchased roughly 157 kmt of primary metal for internal use as part of its strategy to sell value-added products.

Flat-Rolled Products - ATOI for the segment increased $4 million to $66 million in the quarter. Higher volumes associated with continued strong aerospace and industrial products demand were offset by energy and other input cost inflation.

Extruded and End Products - ATOI improved $3 million in the quarter. Improved volumes and profitability in building and construction and extrusions were partially offset by higher losses in Russia.

Engineered Solutions - ATOI for the segment rose 77 percent from the previous quarter to an all-time high of $83 million. This result follows a robust fourth quarter where ATOI had risen by 38 percent sequentially. Strong productivity gains, market growth, new product introductions and a favorable mix drove results in the quarter. Additionally, the investment in 2005 to restructure the portfolio resulted in significant improvement, particularly in the automotive business.

Packaging and Consumer - Segment ATOI was $8 million, a decline of $12 million as a result of normal seasonally weaker volume and mix. Benefits of higher volumes at Closure Systems and improved performance of our Flexible Packaging business were more than offset by the seasonal declines.

Alcoa will hold its quarterly conference call at 5:00 PM Eastern Time on April 10th 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 129,000 employees in 42 countries and has been named one of the top sustainable corporations in the world at the World Economic Forum in Davos, Switzerland. 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) Alcoa's inability to realize the full extent of the expected savings or benefits from its restructuring activities or to complete such activities in accordance with its planned timetable; (e) Alcoa's inability to complete its expansion projects and investment activities outside the U.S. as planned and by targeted completion dates, or to assure that the anticipated integration costs at its recently acquired Russian facilities will not exceed its estimates; (f) unfavorable changes in laws, governmental regulations or policies, currency exchange rates or competitive factors in the countries in which Alcoa operates; (g) significant legal proceedings or investigations adverse to Alcoa, including environmental, product liability, safety and health and other claims; and (h) the other risk factors summarized in Alcoa's Form 10-K for the year ended December 31, 2005 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
                                    2005 (a)    2005 (a)      2006
                                   --------- -------------- --------
Sales                                  $6,221      $6,666      $7,244

Cost of goods sold                      4,933       5,453       5,459
Selling, general administrative,
 and other expenses                       325         362         369
Research and development expenses          46          50          48
Provision for depreciation,
 depletion, and amortization              312         316         308
Restructuring and other charges            45          26           1
Interest expense                           78          78          92
Other income, net                         (36)         (5)        (35)
                                  ------------      ------     -------
  Total costs and expenses              5,703       6,280       6,242

Income from continuing operations
 before taxes on income                   518         386       1,002
Provision for taxes on income             190          94         282
                                  ------------      ------     -------
Income from continuing operations
 before minority interests' share         328         292         720
Less:  Minority interests' share           60          80         105
                                  ------------      ------     -------

Income from continuing operations         268         212         615

(Loss) income from discontinued
 operations                                (8)         14          (7)

Cumulative effect of accounting
 change                                     -          (2)          -
                                  ------------      ------     -------

NET INCOME                               $260        $224        $608
                                  ============      ======     =======

Earnings (loss) per common share:
   Basic:
     Income from continuing
      operations                         $.31        $.24        $.71
     (Loss) income from
      discontinued operations            (.01)        .02        (.01)
     Cumulative effect of
      accounting change                     -           -           -
                                  ------------      ------     -------
        Net income                       $.30        $.26        $.70
                                  ============      ======     =======

   Diluted:
     Income from continuing
      operations                         $.31        $.24        $.70
     (Loss) income from
      discontinued operations            (.01)        .02        (.01)
     Cumulative effect of
      accounting change                     -           -           -
                                  ------------      ------     -------
        Net income                       $.30        $.26        $.69
                                  ============      ======     =======

Average number of shares used to
 compute:
  Basic earnings per common share 871,534,867 871,135,611 870,560,769
  Diluted earnings per common
   share                          878,883,569 874,617,798 875,971,920

Common stock outstanding at the
 end of the period                872,011,266 870,268,513 870,119,484

Shipments of aluminum products
 (metric tons)                      1,289,000   1,387,000   1,359,000

(a) Prior periods financial statements have been reclassified to
    reflect the Hawesville, KY automotive casting facility in
    discontinued operations in 2006.


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


                                                 December 31 March 31
                                                   2005 (b)    2006
                                                 ----------- ---------
ASSETS
Current assets:
  Cash and cash equivalents                            $762      $459
  Receivables from customers, less allowances:
     $80 in 2005 and $81 in 2006                      2,914     3,380
  Other receivables                                     427       411
  Inventories                                         3,446     3,778
  Fair value of derivative contracts                    520       465
  Prepaid expenses and other current assets             713       889
                                                 ----------- ---------
     Total current assets                             8,782     9,382
                                                 ----------- ---------

Properties, plants and equipment, at cost            26,944    27,507
Less: accumulated depreciation, depletion and
 amortization                                        13,787    14,016
                                                 ----------- ---------
 Net properties, plants and equipment                13,157    13,491
                                                 ----------- ---------
Goodwill                                              6,249     6,262
Investments                                           1,370     1,644
Other assets                                          4,090     4,115
Assets held for sale                                     48        35
                                                 ----------- ---------
     Total assets                                   $33,696   $34,929
                                                 =========== =========

LIABILITIES
Current liabilities:
  Short-term borrowings                                $300      $370
  Commercial paper                                      912     1,672
  Accounts payable, trade                             2,659     2,691
  Accrued compensation and retirement costs           1,102       946
  Taxes, including taxes on income                      874       867
  Other current liabilities                           1,460     1,325
  Long-term debt due within one year                     58        59
                                                 ----------- ---------
     Total current liabilities                        7,365     7,930
                                                 ----------- ---------
Long-term debt, less amount due within one year       5,279     5,226
Accrued pension benefits                              1,500     1,533
Accrued postretirement benefits                       2,105     2,090
Other noncurrent liabilities and deferred credits     1,823     1,919
Deferred income taxes                                   875       907
Liabilities of operations held for sale                  11         4
                                                 ----------- ---------
     Total liabilities                               18,958    19,609
                                                 ----------- ---------

MINORITY INTERESTS                                    1,365     1,391
                                                 ----------- ---------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY
Preferred stock                                          55        55
Common stock                                            925       925
Additional capital                                    5,720     5,810
Retained earnings                                     9,345     9,818
Treasury stock, at cost                              (1,899)   (1,933)
Accumulated other comprehensive loss                   (773)     (746)
                                                 ----------- ---------
     Total shareholders' equity                      13,373    13,929
                                                 ----------- ---------
     Total liabilities and equity                   $33,696   $34,929
                                                 =========== =========

(b) Prior periods financial statements have been reclassified to
    reflect the Hawesville, KY automotive casting facility in
    discontinued operations in 2006.


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


                                                   Three months ended
                                                        March 31
                                                   2005 (c)    2006
                                                   --------- ---------
CASH FROM OPERATIONS
Net income                                             $260      $608
Adjustments to reconcile net income to cash from
 operations:
   Depreciation, depletion, and amortization            315       309
   Change in deferred income taxes                       36        (4)
   Equity income, net of dividends                      (11)       (9)
   Restructuring and other charges                       45         1
   Provision for doubtful accounts                        4         3
   Loss from discontinued operations                      8         7
   Minority interests                                    60       105
   Stock-based compensation                               5        28
   Other                                                (13)        1
Changes in assets and liabilities, excluding
 effects of acquisitions and divestitures:
   Increase in receivables                             (499)     (412)
   Increase in inventories                             (371)     (323)
   Increase in prepaid expenses and other current
    assets                                              (53)      (86)
   Increase (decrease) in accounts payable and
    accrued expenses                                    101      (295)
   Increase (decrease) in taxes, including taxes on
    income                                               50       (43)
   Cash paid on long-term aluminum supply contract      (93)        -
   Pension contributions                                (18)      (77)
   Net change in other noncurrent assets and
    liabilities                                         (54)      (26)
                                                   --------- ---------
      CASH USED FOR CONTINUING OPERATIONS              (228)     (213)
      CASH USED FOR DISCONTINUED OPERATIONS             (11)        -
                                                   --------- ---------
      CASH USED FOR OPERATIONS                         (239)     (213)
                                                   --------- ---------

FINANCING ACTIVITIES
Net changes to short-term borrowings                     63        69
Common stock issued for stock compensation plans         23        46
Repurchase of common stock                                -       (60)
Dividends paid to shareholders                         (131)     (131)
Dividends paid to minority interests                    (72)     (115)
Net change in commercial paper                        1,002       760
Additions to long-term debt                              45         6
Payments on long-term debt                              (61)       (5)
                                                   --------- ---------
      CASH  PROVIDED FROM FINANCING ACTIVITIES          869       570
                                                   --------- ---------

INVESTING ACTIVITIES
Capital expenditures                                   (347)     (592)
Acquisition of minority interests                      (176)       (1)
Acquisitions, net of cash acquired                     (257)        -
Sale of investments                                     206         -
Changes in short-term investments and restricted
 cash                                                    (7)      (59)
Additions to investments                                 (5)      (33)
Other                                                     2        18
                                                   --------- ---------
      CASH USED FOR INVESTING ACTIVITIES               (584)     (667)
                                                   --------- ---------

      EFFECT OF EXCHANGE RATE CHANGES ON CASH            (6)        7
                                                   --------- ---------
Net change in cash and cash equivalents                  40      (303)
Cash and cash equivalents at beginning of year          457       762
                                                   --------- ---------
      CASH AND CASH EQUIVALENTS AT END OF PERIOD       $497      $459
                                                   ========= =========

(c) Prior periods financial statements have been reclassified to
    reflect the Hawesville, KY automotive casting facility in
    discontinued operations in 2006.


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


                            1Q05   2Q05   3Q05   4Q05    2005   1Q06
                            ----   ----   ----   ----    ----   ----
Alumina:
 Third-party shipments
  (Kmt)                     1,923  1,951  2,017  1,966   7,857  2,023
 Alumina production (Kmt)   3,583  3,621  3,688  3,706  14,598  3,702
 Third-party sales         $  505 $  533 $  531 $  561 $ 2,130 $  628
 Intersegment sales        $  393 $  439 $  424 $  451 $ 1,707 $  555
 ATOI                      $  161 $  182 $  156 $  183 $   682 $  242
 Depreciation, depletion
  and amortization         $   41 $   43 $   44 $   44 $   172 $   43
 Income taxes              $   61 $   66 $   47 $   72 $   246 $   93
 Equity (loss) income      $   (1)$    - $    - $    1 $     - $   (1)
======================================================================

Primary Metals:
 Third-party realized price
  - aluminum               $2,042 $1,977 $1,963 $2,177 $ 2,044 $2,534
 Third-party shipments
  (Kmt)                       487    520    590    557   2,154    488
 Aluminum production (Kmt)    851    899    904    900   3,554    867
 Third-party sales         $1,089 $1,124 $1,204 $1,281 $ 4,698 $1,408
 Intersegment sales        $1,303 $1,215 $1,108 $1,182 $ 4,808 $1,521
 ATOI                      $  225 $  187 $  168 $  242 $   822 $  445
 Depreciation, depletion
  and amortization         $   90 $   90 $   93 $   95 $   368 $   96
 Income taxes              $   92 $   75 $   50 $   90 $   307 $  197
 Equity income (loss)      $   18 $  (76)$   20 $   26 $   (12)$   20
======================================================================

Flat-Rolled Products:
 Third-party shipments
  (Kmt)                       509    560    543    544   2,156    562
 Third-party sales         $1,655 $1,763 $1,679 $1,739 $ 6,836 $1,940
 Intersegment sales        $   34 $   36 $   29 $   29 $   128 $   49
 ATOI                      $   75 $   70 $   81 $   62 $   288 $   66
 Depreciation, depletion
  and amortization         $   52 $   54 $   57 $   54 $   217 $   50
 Income taxes              $   24 $   27 $   30 $   30 $   111 $   26
======================================================================

Extruded and End Products:
 Third-party shipments
  (Kmt)                       221    237    224    212     894    232
 Third-party sales         $1,037 $1,153 $1,092 $1,022 $ 4,304 $1,170
 Intersegment sales        $   14 $   19 $   14 $   17 $    64 $   23
 ATOI                      $   10 $   20 $   23 $   (3)$    50 $    -
 Depreciation, depletion
  and amortization (1)     $   31 $   32 $   31 $   32 $   126 $   30
 Income taxes              $   (2)$   18 $   10 $    2 $    28 $    2
======================================================================

Engineered Solutions:
 Third-party shipments
  (Kmt)                        38     37     36     34     145     37
 Third-party sales         $1,237 $1,282 $1,242 $1,271 $ 5,032 $1,360
 ATOI                      $   61 $   61 $   34 $   47 $   203 $   83
 Depreciation, depletion
  and amortization         $   47 $   45 $   42 $   42 $   176 $   40
 Income taxes              $   26 $   30 $   23 $   10 $    89 $   37
 Equity income             $    1 $    - $    - $    - $     1 $    -
======================================================================

Packaging and Consumer:
 Third-party shipments
  (Kmt)                        34     46     31     40     151     40
 Third-party sales         $  708 $  827 $  806 $  798 $ 3,139 $  749
 ATOI                      $   16 $   41 $   28 $   20 $   105 $    8
 Depreciation, depletion
  and amortization (1)     $   32 $   31 $   31 $   32 $   126 $   31
 Income taxes              $   10 $   18 $   14 $    8 $    50 $    5
 Equity income             $    1 $    - $    - $    - $     1 $    -
======================================================================


(1) Segment depreciation, depletion and amortization has been adjusted
    from the previously reported annual amounts to reflect the
    movement of certain amounts to Corporate.


Reconciliation of ATOI to        1Q05   2Q05  3Q05  4Q05  2005   1Q06
 consolidated net income:        ----   ----  ----  ----  ----   ----

   Total ATOI                     $548  $561  $490  $551 $2,150  $844
   Impact of LIFO and
    intersegment profit
      adjustments (2)               (2)  (18)  (23)  (19)   (62)   24
   Unallocated amounts (net of
    tax):
      Interest income                7     9    12    14     42    11
      Interest expense             (51)  (56)  (62)  (51)  (220)  (60)
      Minority interests           (60)  (60)  (59)  (80)  (259) (105)
      Corporate expense            (69)  (73)  (82)  (88)  (312)  (89)
      Restructuring and other
       charges                     (30) (144)   (5)  (18)  (197)   (1)
      Discontinued operations       (8)  (36)   (3)   14    (33)   (7)
      Other  (2)                   (75)  277    21   (99)   124    (9)
----------------------------------------------------------------------
   Consolidated net income        $260  $460  $289  $224 $1,233  $608
======================================================================

Prior periods segment information has been reclassified to reflect the
movement of the Hawesville, KY automotive casting facility to
discontinued operations in 2006.

The difference between total segment third-party sales and
consolidated third-party sales is in Corporate.

(2) Prior periods Corporate LIFO expense has been reclassified from
    "Other" to combine the total impact of inventory related items.

Alcoa and subsidiaries
Calculation of Financial Measures (unaudited)
(in millions)

     Return on Capital                         Return on Capital,
                                                Excluding Growth
                                                   Investments
              Bloomberg (1) Annualized (2)
              ------------- --------------
Net income          $1,581         $2,432  Net income          $1,581
Minority
 interests             304            420  Minority interests     304
Interest
 expense                                   Interest expense
 (after tax)           274            264   (after tax)           274
              ------------- --------------                   ---------

Numerator (sum                             Numerator (sum
 total)             $2,159         $3,116   total)             $2,159
                                           Russia and Bohai
                                            net loss               86
                                                             ---------
                                           Adjusted net
                                            income             $2,245

Average Balances                           Average Balances(1)
Short-term                                 Short-term
 borrowings           $350           $335   borrowings           $350
Short-term
 debt                   53             59  Short-term debt         53
Commercial
 paper               1,652          1,292  Commercial paper     1,652
Long-term debt       5,246          5,253  Long-term debt       5,246
Preferred
 stock                  55             55  Preferred stock         55
Minority
 interests           1,280          1,378  Minority interests   1,280
Common equity
 (3)                13,611         13,596  Common equity (3)   13,611
              ------------- --------------                   ---------

Denominator                                Denominator (sum
 (sum total)       $22,247        $21,968   total)            $22,247
              ------------- --------------                   ---------

                                           Capital projects
                                            in progress and
                                            Russia and Bohai
                                            capital base       (2,139)
                                                             ---------

                                           Adjusted capital
                                            base              $20,108

                                           Return on capital,
Return on                                   excluding growth
 Capital               9.7%          14.2%  investments          11.2%


Return on capital, excluding growth investments is a non-GAAP
financial measure. Management believes that this measure is
meaningful to investors because it provides greater insight with
respect to the underlying operating performance of the company's
productive assets. The company has significant growth investments
underway in its upstream and downstream businesses, as previously
noted, with expected completion dates over the next several years. As
these investments generally require a period of time before they are
productive, management believes that a return on capital measure
excluding these growth investments is more representative of current
operating performance.

(1) The Bloomberg Methodology calculates ROC based on trailing four
    quarters. Average balances are calculated as (March 2005 ending
    balance + March 2006 ending balance) divided by 2

(2) The Annualized Methodology numerator amounts are calculated using
    the first quarter 2006 balances and multiplying by 4. Average
    balances are calculated as (March 2006 ending balance + December
    2005 ending balance) divided by 2

(3) Calculated as total shareholders' equity, less preferred stock

Days of Working Capital
                                     March 31   December 31  March 31
                                       2005        2005        2006

Receivables from customers, less
 allowances                             $3,110      $2,914     $3,380
Add: Inventories                         3,365       3,446      3,778
Less: Accounts payable, trade            2,418       2,659      2,691
                                   ------------ ----------- ----------
Working Capital                         $4,057      $3,701     $4,467

Sales                                    6,221       6,666      7,244

Days of Working Capital                   58.7        51.1       55.5


Days of Working Capital = Working Capital divided by (Sales/number of
days in the quarter)