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August 10, 2001

Alcoa Announces Subsequent Event, Revises Second Quarter Earnings

PITTSBURGH--(BUSINESS WIRE)--Aug. 10, 2001--Alcoa Inc. (NYSE:AA) today announced that as a result of customer bankruptcy filings in early August, second quarter earnings have been revised from those reported on July 6. In accordance with the accounting requirement for subsequent events, Alcoa is recording a charge of $12 million ($8 million after tax) in its second quarter 2001 financial results.

Earnings for the second quarter were revised to $421 million (from $429 million reported on July 6), before special charges. The second quarter 2001 remains a record quarter for Alcoa's earnings. Second quarter 2001 earnings, after special charges, were revised to $307 million (from $315 million reported on July 6).

Revised financial tables are attached.

FINANCIAL REPORT
                        Alcoa and subsidiaries
              (in millions except share and ton amounts)
                              (UNAUDITED)

                                                   Second quarter
                                                   --------------
For the period ended June 30                     2001          2000
                                                 ----          ----
Sales                                       $     5,991   $     5,569

Cost of goods sold                                4,607         4,216
Selling, general administrative
 and other expenses                                 326           272
Research and development expenses                    55            48
Provision for depreciation, depletion
 and amortization                                   309           290
Special items                                       212             -
Interest expense                                     93            95
Other income,net                                   (107)          (52)
                                            ------------  ------------

                                                  5,495         4,869

   Income from operations before
    taxes on income                                 496           700
Provision for taxes on income                       157           238
                                            ------------  ------------
     Income from operations                         339           462

Less: Minority interests' share                      32            85
                                            ------------  ------------

   Income before cumulative effect                  307           377
     Cumulative effect of accounting
     Change for revenue recognition                   -             -
                                            ------------  ------------

NET INCOME                                  $       307   $       377

Earnings per common share:
   Basic                                    $      0.36   $      0.47

   Diluted                                  $      0.35   $      0.47

Average number of shares used to compute:

   Basic earnings per common share          861,633,715   796,962,243
   Diluted earnings per common share        872,074,474   804,964,628

Translation and exchange adjustments
 included in net income                     $        26   $         0
Shipments of aluminum
 products (metric tons)                       1,292,000     1,361,000



                           FINANCIAL REPORT
                        Alcoa and subsidiaries
              (in millions except share and ton amounts)
                              (UNAUDITED)

                                                  Six months ended
                                                  ----------------
For the period ended June 30                     2001          2000(a)
                                                 ----          ----
Sales                                       $    12,167   $    10,078

Cost of goods sold                                9,320         7,530
Selling, general administrative
 and other expenses                                 649           499
Research and development expenses                   104            87
Provision for depreciation depletion
 and amortization                                   630           515
Special items                                       212             -
Interest expense                                    208           146
Other income,net                                   (199)          (93)
                                            ------------  ------------

                                                 10,924         8,684

   Income from operations before
    taxes on income                               1,243         1,394
Provision for taxes on income                       404           475
                                            ------------  ------------
    Income from operations                          839           919

Less: Minority interests' share                     128           190
                                            ------------  ------------

   Income before cumulative effect                  711           729
    Cumulative effect of accounting
    Change for revenue recognition                    -            (5)
                                            ------------  ------------

NET INCOME                                  $       711   $       724

Earnings per common share:
   Basic                                    $      0.82   $      0.94

   Diluted                                  $      0.81   $      0.93

Average number of shares used to compute:

   Basic earnings per common share          863,462,208   770,119,801
   Diluted earnings per common share        873,156,282   780,233,133

Translation and exchange adjustments
 included in net income                     $        40   $         3
Shipments of aluminum
 products (metric tons)                       2,612,000     2,494,000

Return on average shareholders' equity            13.1%         17.0%


(a) The amounts have been restated for the effects of the change in
    accounting for revenue recognition. Amounts originally reported
    were as follows: Sales $10,100; Income from operations $1,398; Net
    income $732; Earnings per share basic $.95 and diluted $.94


Alcoa and subsidiaries
Condensed Consolidated Balance Sheet
(in millions)

                                              (unaudited)
                                                June 30    December 31
                                                  2001        2000
                                               ----------- -----------
ASSETS
Current assets:
Cash and cash equivalents                        $    385    $    315
Short-term investments                                 13          56
Receivables from customers, less
 allowances: $83 in 2001 and $69 in 2000            3,015       3,461
Other receivables                                     310         354
Inventories                                         2,790       2,703
Deferred income taxes                                 350         385
Prepaid expenses and other current assets             499         304
                                               ----------- -----------
   Total current assets                             7,362       7,578

Properties, plants and equipment, at cost          22,028      22,600
Less, accumulated depreciation, depletion
 and amortization                                  10,033       9,750
                                               ----------- -----------
Net properties, plants and equipment               11,995      12,850
                                               ----------- -----------
Goodwill, net of accumulated amortization of
 $433 in 2001 and $344 in 2000                      5,763       6,003
Other assets, including assets held for sale        3,303       5,260
                                               ----------- -----------
   Total assets                                  $ 28,423    $ 31,691
                                               =========== ===========

LIABILITIES
Current liabilities:
Short-term borrowings                            $    101    $  2,719
Accounts payable, trade                             1,648       1,876
Accrued compensation and retirement costs             749         928
Taxes, including taxes on income                      689         702
Other current liabilities                           1,329       1,302
Long-term debt due within one year                    217         427
                                               ----------- -----------
   Total current liabilities                        4,733       7,954
Long-term debt, less amount due within one year     5,977       4,987
Accrued postretirement benefits                     2,561       2,719
Other noncurrent liabilities and deferred credits   2,111       2,126
Deferred income taxes                                 748         969
                                               ----------- -----------
   Total liabilities                               16,130      18,755
                                               ----------- -----------

MINORITY INTERESTS                                  1,251       1,514
                                               ----------- -----------

CONTINGENT LIABILITIES                                  -           -

SHAREHOLDERS' EQUITY
Preferred stock                                        56          56
Common stock                                          925         925
Additional capital                                  6,109       5,927
Retained earnings                                   7,533       7,127
Treasury stock, at cost                            (2,341)     (1,717)
Accumulated other comprehensive loss               (1,240)       (896)
                                               ----------- -----------
   Total shareholders' equity                      11,042      11,422
                                               ----------- -----------
   Total liabilities and shareholders' equity    $ 28,423    $ 31,691
                                               =========== ===========




Consolidated Third-
Party Revenues
                       1Q00   2Q00   3Q00   4Q00   2000   1Q01   2Q01
                       ----   ----   ----   ----   ----   ----   ----
Alumina and Chemicals   540    515    529    524  2,108    547    490
Primary Metals          611    852  1,049  1,244  3,756    967    972
Flat-Rolled Products  1,404  1,394  1,361  1,287  5,446  1,343  1,255
Engineered Products   1,053  1,296  1,586  1,536  5,471  1,593  1,582
Packaging and Consumer  203    524    631    726  2,084    646    701
Other                   698    988  1,142  1,243  4,071  1,080    991
                     ------ ------ ------ ------ ------ ------ ------
Total                 4,509  5,569  6,298  6,560 22,936  6,176  5,991


Consolidated
Intersegment Revenues
                       1Q00   2Q00   3Q00   4Q00   2000   1Q01   2Q01
                       ----   ----   ----   ----   ----   ----   ----
Alumina and Chemicals   250    274    294    286  1,104    283    275
Primary Metals          850    832    936    886  3,504    867    887
Flat-Rolled Products     13     29     29     26     97     16     15
Engineered Products      13     15     18     16     62      9      8
Packaging and Consumer    0      0      0      0      0      0      0
Other                     0      0      0      0      0      0      0
                     ------ ------ ------ ------ ------ ------ ------
Total                 1,126  1,150  1,277  1,214  4,767  1,175  1,185


Consolidated Third-
Party Shipments (KMT's)
                       1Q00   2Q00   3Q00   4Q00   2000   1Q01   2Q01
                       ----   ----   ----   ----   ----   ----   ----
Alumina and Chemicals 1,833  1,801  1,893  1,945  7,472  2,031  1,730
Primary Metals          339    493    574    665  2,071    476    494
Flat-Rolled Products    507    504    492    457  1,960    470    450
Engineered Products     266    282    258    255  1,061    254    242
Packaging and Consumer    2     32     37     48    119     42     41
Other                    19     50     58     60    187     78     65
                     ------ ------ ------ ------ ------ ------ ------
Total Aluminum        1,133  1,361  1,419  1,485  5,398  1,320  1,292

Average realized price
-Primary               0.79   0.74   0.77   0.77   0.77   0.77   0.73

After-Tax Operating
Income
                       1Q00   2Q00   3Q00   4Q00   2000   1Q01   2Q01
                       ----   ----   ----   ----   ----   ----   ----
Alumina and Chemicals   155    140    146    144    585    166    130
Primary Metals          227    225    254    294  1,000    294    264
Flat-Rolled Products     73     74     83     69    299     65     74
Engineered Products      53     62     49     46    210     40     60
Packaging and Consumer   17     35     38     41    131     43     47
Other                    30     46     39     49    164     50     45
                     ------ ------ ------ ------ ------ ------ ------
Total                   555    582    609    643  2,389    658    620


Reconciliation of after-
tax operating income to
consolidated net income:
After-Tax Operating
Income
                       1Q00   2Q00   3Q00   4Q00   2000   1Q01   2Q01
                       ----   ----   ----   ----   ----   ----   ----
Total after-tax
 operating income       555    582    609    643  2,389    658    620
Elimination of
 intersegment
 (profit) loss           19    (10)     7      8     24      4     (8)

Unallocated amounts
(net of tax)
Interest income           7     19      4     10     40      8     12
Interest expense        (33)   (69)   (85)   (91)  (278)   (75)   (61)
Minority interest      (105)   (85)   (90)  (100)  (380)   (96)   (32)
Corporate expense       (56)   (51)   (66)   (54)  (227)   (66)   (66)
Special items             -      -      -      -      -      -   (148)
Other                   (40)    (9)   (11)   (24)   (84)   (29)   (10)
                     ------ ------ ------ ------ ------ ------ ------
Consolidated
 net income             347    377    368    392  1,484    404    307