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| April 5, 2001
Alcoa Announces Record Quarterly Earnings
PITTSBURGH--(BUSINESS WIRE)--April 5, 2001--Alcoa today announced
net income for the 2001 first quarter of $404 million, or 46 cents per
diluted share, compared with $347 million, or 47 cents per diluted
share, for the 2000 first quarter.
"We are pleased with our results, particularly in light of
continued weak economic conditions. We have achieved the highest
quarterly earnings in the company's history. Our entire organization
has worked hard to respond to the current economic environment and to
focus on those items within our control," commented Chairman and CEO
Alain Belda.
First Quarter
2001 2000 %Change
-------------------------------------
Sales $6,176 $4,509 37%
Net Income 404 347 16
Earnings
per share $ .46 $ .47
(dollars in millions, except share amounts)
Comparing the first quarter of 2001 with the first quarter of
2000, the company stated that a significant drop in demand from
certain end markets, lower metal prices and previously noted increases
in energy costs reduced the benefits derived from its successful cost
reduction programs and the positive impact of acquisitions. Year over
year results reflect more than a 25% volume decline in the
distribution, ground transportation and building and construction
markets, and a 5% decline in LME primary aluminum prices. Energy costs
were flat compared with the fourth quarter of 2000.
Alcoa stated that it had achieved $124 million in annualized cost
savings against its $1.0 billion 2003 target and held capital
expenditures to $241 million in the current quarter. For the year
2001, capital expenditures are expected to be contained at last year's
level, despite adding 17 acquisitions in the year 2000.
In addition, the company curtailed production at various locations
and sold several small non-core businesses. The net impact of these
actions was an increase in earnings of approximately 2 cents per
share.
"The continuing application of the Alcoa Business System and
strong focus on results is allowing us to control both costs and
capital expenditures in this difficult environment," stated Mr. Belda.
Quarterly Analysts' Meeting
Alcoa's quarterly analysts' meeting and conference call will be at
4:00 p.m. EDST on Tuesday, April 17, 2001. The meeting will be webcast
via alcoa.com.
Alcoa is the world's leading producer of primary aluminum,
fabricated aluminum, and alumina and participates in all major aspects
of the industry: technology, mining, refining, smelting, fabricating
and recycling. Alcoa serves customers worldwide in the packaging,
consumer, automotive, aerospace, construction and distribution
markets. The company has 142,000 employees in 37 countries.
Editor's Note: The Alcoa Business System is Alcoa's worldwide
performance standard. It is an integrated set of systems and tools
organized to provide a common language and unencumbered transfer of
knowledge across businesses and geographies. It focuses on serving
customer demand by emphasizing the elimination of all waste and making
what the customer wants when the customer wants it.
Certain statements relate to future events and expectations and as
such constitute forward-looking statements involving known and unknown
risks, uncertainties and other factors 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 other risk factors
summarized in Alcoa's SEC reports.
FINANCIAL REPORT
Alcoa and subsidiaries
(in millions except share and ton amounts)
(UNAUDITED)
First quarter
-------------------------
For the period ended March 31 2001 2000(a)
------------ ------------
Sales $ 6,176 $ 4,509
Cost of goods sold 4,713 3,314
Selling, general administrative
and other expenses 323 227
Research and development expenses 49 39
Provision for depreciation and depletion 321 225
Interest expense 115 51
Other (income) expense (92) (41)
------------ ------------
5,429 3,815
Income from operations before
taxes on income 747 694
Provision for taxes on income 247 237
------------ ------------
Income from operations 500 457
Less: Minority interests' share 96 105
------------ ------------
Income before cumulative effect 404 352
Cumulative effect of accounting
Change for revenue recognition 0 (5)
------------ ------------
NET INCOME $ 404 $ 347
Earnings per common share:
Basic $ 0.47 $ 0.47
Diluted $ 0.46 $ 0.47
Average number of shares used to compute:
Basic earnings per common share 865,440,328 732,872,349
Diluted earnings per common share 874,197,629 744,597,159
Translation and exchange adjustments included
in net income $ 14 $ 3
Shipments of aluminum
products (metric tons) 1,315,000 1,133,000
Return on average shareholders' equity 13.8% 21.5%
(a) The amounts have been restated for the effects of the change in
accounting for revenue recognition. Amounts originally reported
were as follows: Sales, $4,531; Income from operations, $460; Net
income, $355; Earnings per share, basic and diluted, $.48.
Alcoa and subsidiaries
Condensed Consolidated Balance Sheet
(in millions)
(unaudited)
March 31 December 31
ASSETS 2001 2000
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents (includes cash of
$175 in 2001 and $169 in 2000) $ 421 $ 315
Short-term investments 34 56
Receivables from customers, less allowances:
2001-$72 2000-$69 3,265 3,461
Other receivables 326 354
Inventories 2,869 2,703
Deferred income taxes 372 385
Prepaid expenses and other current assets 599 304
------------ ------------
Total current assets 7,886 7,578
------------ ------------
Properties, plants and equipment, at cost 22,216 22,600
Less, accumulated depreciation, depletion and
Amortization 9,765 9,750
------------ ------------
Net properties, plants and equipment 12,451 12,850
------------ ------------
Goodwill, net of accumulated amortization of
$404 in 2001 and $344 in 2000 6,058 6,003
Other assets, including assets held for sale 3,572 5,260
------------ ------------
Total assets $ 29,967 $ 31,691
============ ============
LIABILITIES
Current liabilities:
Short-term borrowings $ 1,700 $ 2,719
Accounts payable, trade 1,815 1,876
Accrued compensation and retirement costs 775 928
Taxes, including taxes on income 856 702
Other current liabilities 1,575 1,302
Long-term debt due within one year 225 427
------------ ------------
Total current liabilities 6,946 7,954
------------ ------------
Long-term debt, less amount due within one year 4,918 4,987
Accrued postretirement benefits 2,667 2,719
Other noncurrent liabilities and deferred credits 2,192 2,126
Deferred income taxes 909 969
------------ ------------
Total liabilities 17,632 18,755
------------ ------------
MINORITY INTERESTS 1,316 1,514
------------ ------------
CONTINGENT LIABILITIES - -
SHAREHOLDERS' EQUITY
Preferred stock 56 56
Common stock 925 925
Additional capital 5,816 5,927
Retained earnings 7,227 7,127
Treasury stock, at cost (1,134) (1,717)
Accumulated other comprehensive loss (1,871) (896)
------------ ------------
Total shareholders' equity 11,019 11,422
------------ ------------
Total liabilities and shareholders'
equity $ 29,967 $ 31,691
============ ============
Consolidated Third-
Party Revenues 1Q00 2Q00 3Q00 4Q00 2000 1Q01
------ ------ ------ ------ ------ ------
Alumina and Chemicals 540 515 529 524 2,108 547
Primary Metals 611 852 1,049 1,244 3,756 967
Flat-Rolled Products 1,404 1,394 1,361 1,287 5,446 1,343
Engineered Products 1,053 1,296 1,586 1,536 5,471 1,593
Packaging and Consumer 203 524 631 726 2,084 646
Other 698 988 1,142 1,243 4,071 1,080
------ ------ ------ ------ ------ ------
Total 4,509 5,569 6,298 6,560 22,936 6,176
Consolidated Intersegment
Revenues 1Q00 2Q00 3Q00 4Q00 2000 1Q01
------ ------ ------ ------ ------ ------
Alumina and Chemicals 250 274 294 286 1,104 283
Primary Metals 850 832 936 886 3,504 867
Flat-Rolled Products 13 29 29 26 97 16
Engineered Products 13 15 18 16 62 9
Packaging and Consumer 0 0 0 0 0 0
Other 0 0 0 0 0 0
------ ------ ------ ------ ------ ------
Total 1,126 1,150 1,277 1,214 4,767 1,175
Consolidated Third-Party
Shipments (KMT's) 1Q00 2Q00 3Q00 4Q00 2000 1Q01
------ ------ ------ ------ ------ ------
Alumina and Chemicals 1,833 1,801 1,893 1,945 7,472 2,031
Primary Metals 339 493 574 665 2,071 471
Flat-Rolled Products 507 504 492 457 1,960 470
Engineered Products 266 282 258 255 1,061 254
Packaging and Consumer 2 32 37 48 119 42
Other 19 50 58 60 187 78
------ ------ ------ ------ ------ ------
Total Aluminum 1,133 1,361 1,419 1,485 5,398 1,315
Average realized price
-Primary 0.79 0.74 0.77 0.77 0.77 0.78
After-Tax Operating Income 1Q00 2Q00 3Q00 4Q00 2000 1Q01
------ ------ ------ ------ ------ ------
Alumina and Chemicals 155 140 146 144 585 166
Primary Metals 227 225 254 294 1,000 294
Flat-Rolled Products 73 74 83 69 299 65
Engineered Products 53 62 49 46 210 40
Packaging and Consumer 17 35 38 41 131 43
Other 30 46 39 49 164 50
------ ------ ------ ------ ------ ------
Total 555 582 609 643 2,389 658
Reconciliation of after-tax
operating income to
consolidated net income:
After-Tax Operating Income 1Q00 2Q00 3Q00 4Q00 2000 1Q01
------ ------ ------ ------ ------ ------
Total after-tax operating
income 555 582 609 643 2,389 658
Elimination of intersegment
(profit) loss (20) 7 (2) (5) (20) 4
Unallocated amounts
(net of tax)
Interest income 7 19 4 10 40 8
Interest expense (33) (69) (85) (91) (278) (75)
Minority interest (106) (85) (90) (100) (381) (96)
Corporate expense (56) (51) (66) (54) (227) (66)
Other 0 (26) (2) (11) (39) (29)
------ ------ ------ ------ ------ ------
Consolidated net income 347 377 368 392 1,484 404
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