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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