Alcoa's Earnings Surge 24% Year-to-Year, Exceed $1 Billion for the First Time.Business Editors PITTSBURGH--(BUSINESS WIRE)--Jan. 10, 2000 Alcoa Alcoa U.S. company, the world's largest producer of aluminum. Established in Pittsburgh, Pa., in 1888, it adopted the name Aluminum Co. of America in 1907. Alcoa introduced aluminum foil in 1910 and found uses for aluminum in the emerging aviation and automobile industries. announced today that for the first time in its 110-year history, the company had over a billion-dollars in earnings for the year. For the year 1999, Alcoa's net income was $1.054 billion, or $2.82 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, up 24% from $853 million, or $2.42 per share for 1998. "Alcoa's excellent performance in 1999 reflects the growing success of Alcoans worldwide in aligning a·lign v. a·ligned, a·lign·ing, a·ligns v.tr. 1. To arrange in a line or so as to be parallel: align the tops of a row of pictures; aligned the car with the curb. our processes and systems with the Alcoa Business System," said CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Alain Alain: see Chartier, Émile Auguste. Belda. "Our processes are more efficient, with improved cycle time, less waste, and reduced inventories as we strive to produce what the customer wants, when it's it's 1. Contraction of it is. 2. Contraction of it has. See Usage Note at its. it's it is or it has it's be ~have wanted."
Fourth Quarter Year
1999 1998 %Change 1999 1998 %Change
Revenues $4,253.1 $4,198.8 1% $16,322.8 $15,339.8 6%
Net Income 333.9 218.3 53 1,054.1 853.0 24
Earnings
per share $.89 $.59 51 $2.82 $2.42 17
Debt as a % of
Invested Capital 28.3% 31.7% (11)
(dollars in millions, except for share amounts)
Net income for the 1999 fourth quarter was $333.9 million, or 89 cents per diluted share, up 53% from $218.3 million, or 59 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , for the 1998 fourth quarter. Revenues for the 1999 fourth quarter were $4.3 billion, compared with $4.2 billion in the year ago quarter. For the full year 1999, revenues were a record $16.3 billion, compared with $15.3 billion for 1998. "We continued to make progress on our $1.1 billion cost-reduction initiative," noted CEO Belda. At the end of 1999, the company had achieved $728 million in annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. cost savings towards its $1.1 billion target. Announced in mid- mid- pref. Middle: midbrain. 1998, this aggressive target is to be achieved by January January: see month. 1, 2001. The quarterly run rate at the end of the 1999 fourth quarter was $182 million, compared with $159 million for the 1999 third quarter. Results for the 1999 fourth quarter were affected positively by $31 million, or 8 cents per share, related to LIFO (Last In-First Out) A queueing method in which the next item to be retrieved is the item most recently placed in the queue. Contrast with FIFO. LIFO - stack inventory reductions which are tangible Possessing a physical form that can be touched or felt. Tangible refers to that which can be seen, weighed, measured, or apprehended by the senses. A tangible object is something that is real and substantial. An automobile is an example of tangible Personal Property. results coming from the Alcoa Production System, and a decrease in Alcoa's effective tax rate from 32% to 29.9% for the year as a result of a decrease in the Australian Australian pertaining to or originating in Australia. Australian bat lyssavirus disease see Australian bat lyssavirus disease. Australian cattle dog a medium-sized, compact working dog used for control of cattle. income tax rate. The quarter was affected negatively by an uptick Uptick A transaction occurring at price above its previous transaction. In order for an uptick to occur, a transaction price must be followed by an increased transaction price. in administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. which is substantially attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to higher acquisition expenses and incentive accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. for exceptional performance. Return on shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. was 17.2% for 1999 and 16.3% for 1998. Founded in 1888, Alcoa is the world's leading producer of aluminum and alumina alumina (əl  `mĭnə) or aluminum oxide, Al2O3, chemical compound with m.p. about 2,000°C; and sp. gr. about 4.0. and a major participant ParticipantA party of a funding. It usually refers to the lowest rank or smallest level of funding. in all segments of the industry: mining, refining refining, any of various processes for separating impurities from crude or semifinished materials. It includes the finer processes of metallurgy, the fractional distillation of petroleum into its commercial products, and the purifying of cane, beet, and maple sugar , smelting smelting, in metallurgy, any process of melting or fusion, especially to extract a metal from its ore. Smelting processes vary in detail depending on the nature of the ore and the metal involved, but they are typified in the use of the blast furnace. , fabricating and recycling recycling, the process of recovering and reusing waste products—from household use, manufacturing, agriculture, and business—and thereby reducing their burden on the environment. . Alcoa serves customers worldwide in the packaging, automotive, aerospace, construction and other markets with a great variety of fabricated fab·ri·cate tr.v. fab·ri·cat·ed, fab·ri·cat·ing, fab·ri·cates 1. To make; create. 2. To construct by combining or assembling diverse, typically standardized parts: and finished products. The company has 250 operating locations in 31 countries. Alcoa Inc. (NYSE NYSE See: New York Stock Exchange :AA) Financial and operating data for Alcoa and its subsidiaries follow.
FINANCIAL REPORT
Alcoa and subsidiaries
(in millions except share and ton amounts)
(UNAUDITED)
Fourth quarter
For the period ended December 31 1999 1998
Sales $4,253.1 $4,198.8
Other income 45.9 55.4
4,299.0 4,254.2
Cost of goods sold 3,147.8 3,262.8
Selling, general administrative
and other expenses 254.7 251.2
Research and development expenses 36.6 47.2
Provision for depreciation and depletion 224.4 238.3
Interest expense 42.0 57.9
3,705.5 3,857.4
Income from operations before
taxes on income 593.5 396.8
Provision for taxes on income 151.1 120.9
Income from operations 442.4 275.9
Less: Minority interests' share (108.5) (57.6)
NET INCOME $333.9 $218.3
Earnings per common share:
Basic $0.91 $0.59
Diluted $0.89 $0.59
Average number of shares used to compute:
Basic earnings per common share 366,913,979 366,838,176
Diluted earnings per common share 375,375,259 369,341,168
Translation and exchange adjustments included
in net income $2.8 $(3.8)
Shipments of aluminum products
(metric tons) 1,129,000 1,174,000
FINANCIAL REPORT
Alcoa and subsidiaries
(in millions except share and ton amounts)
(UNAUDITED)
Twelve months
For the period ended December 31 1999 1998
Sales $16,322.8 $15,339.8
Other income 123.6 149.6
16,446.4 15,489.4
Cost of goods sold 12,535.5 11,933.4
Selling, general administrative and
other expenses 851.2 782.5
Research and development expenses 128.0 128.4
Provision for depreciation and depletion 887.6 842.4
Interest expense 195.2 197.9
14,597.5 13,884.6
Income from operations before taxes
on income 1,848.9 1,604.8
Provision for taxes on income 552.8 513.5
Income from operations 1,296.1 1,091.3
Less: Minority interests' share (242.0) (238.3)
Net Income $1,054.1 $853.0
Earnings per common share:
Basic $2.87 $2.44
Diluted $2.82 $2.42
Average number of shares used to compute:
Basic earnings per common share 366,944,365 349,113,644
Diluted earnings per common share 373,644,872 351,616,636
Shares outstanding at end of period 367,748,998 366,809,078
Translation and exchange adjustments included
in net income $(8.3) $(8.0)
Shipments of aluminum products
(metric tons) 4,478,000 3,951,000
ALCOA 4th QUARTER SUPPLEMENTAL INFORMATION
Consolidated
Revenues 4Q98 1Q99 2Q99 3Q99 4Q99 1999
Alumina and
chemicals 452.7 420.3 455.8 473.9 492.0 1,842.0
Primary metals 629.8 533.7 518.6 559.9 634.9 2,247.1
Flat-rolled
products 1,291.8 1,269.6 1,257.6 1,273.0 1,312.3 5,112.5
Engineered
products 978.8 942.3 939.3 917.1 921.7 3,720.4
Other 839.4 812.8 861.1 828.4 890.5 3,392.8
Total 4,192.5 3,978.7 4,032.4 4,052.3 4,253.1 16,316.5
Consolidated Shipments (KMT's)
Alumina and
chemicals 1,783 1,664 1,836 1,814 1,740 7,054
Primary metals 441 370 354 335 383 1,442
Flat-rolled
products 479 487 496 496 503 1,982
Engineered
products 240 258 249 249 233 989
Other 14 17 18 20 10 65
Total Aluminum 1,174 1,132 1,117 1,100 1,129 4,478
Average realized
price - Primary 0.64 0.63 0.64 0.71 0.72 0.673
Alcoa and subsidiaries
Condensed Consolidated Balance Sheet
(in millions)
December 31 December 31
ASSETS 1999 1998
----------- -----------
Current assets:
Cash and cash equivalents
(includes cash of $67.4 in
1999 and $131.1 in 1998) $ 236.9 $ 342.2
Short-term investments 76.8 39.4
Receivables from customers,
less allowances:
1999-$58.0; 1998-$61.4 2,199.5 2,163.2
Other receivables 164.6 171.0
Inventories 1,618.4 1,880.5
Deferred income taxes 232.9 198.0
Prepaid expenses and other
current assets 270.9 230.8
----------- -----------
Total current assets 4,800.0 5,025.1
----------- -----------
Properties, plants and
equipment, at cost 18,435.6 18,224.5
Less, accumulated depreciation,
depletion and Amortization 9,302.7 9,091.0
----------- -----------
Net properties, plants
and equipment 9,132.9 9,133.5
----------- -----------
Goodwill, net of accumulated
amortization of $220.5 in
1999 and $179.3 in 1998 1,328.4 1,414.1
Other assets 1,804.5 1,889.8
----------- -----------
Total assets $ 17,065.8 $ 17,462.5
----------- -----------
----------- -----------
LIABILITIES
Current liabilities:
Short-term borrowings $ 342.7 $ 431.0
Accounts payable, trade 1,218.9 1,044.3
Accrued compensation and
retirement costs 582.5 553.2
Taxes, including taxes on income 368.2 431.3
Other current liabilities 423.6 627.4
Long-term debt due within one year 67.4 181.1
----------- -----------
Total current liabilities 3,003.3 3,268.3
----------- -----------
Long-term debt, less amount
due within one year 2,656.9 2,877.0
Accrued postretirement benefits 1,720.2 1,840.1
Other noncurrent liabilities
and deferred credits 1,472.8 1,587.1
Deferred income taxes 437.0 358.1
----------- -----------
Total liabilities 9,290.2 9,930.6
----------- -----------
MINORITY INTERESTS 1,457.9 1,476.0
----------- -----------
CONTINGENT LIABILITIES -- --
SHAREHOLDERS' EQUITY
Preferred stock 55.8 55.8
Common stock 394.7 394.7
Additional capital 1,703.7 1,675.9
Retained earnings 6,061.4 5,305.1
Treasury stock, at cost (1,259.6) (1,028.7)
Accumulated other comprehensive
loss (638.3) (346.9)
----------- -----------
Total shareholders' equity 6,317.7 6,055.9
----------- -----------
Total liabilities and
shareholders' equity $ 17,065.8 $ 17,462.5
----------- -----------
----------- -----------
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