Alcoa Earnings Up 60% From 1999 First Quarter.Business Editors PITTSBURGH--(BUSINESS WIRE)--April 6, 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. (NYSE NYSE See: New York Stock Exchange :AA) today reported net income of $355 million (95 cents 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) for the first quarter of 2000 compared with net income of $221 million (60 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 1999 first quarter. "The combination of operating efficiencies and higher prices resulted in the strongest quarter Alcoa has ever had," noted President and 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. "The improvement is significant, with net income up 60% from the year ago quarter."
First Quarter
2000 1999 %Change
Revenues $4,531 $3,985 14%
Net Income 355 221 61%
Earnings
per share $.95 $.60 58%
Return on Share-
Holders' Equity 21.5% 14.1% 52%
(annualized)
(dollars in millions, except for share amounts)
"Comparing the first quarter 2000 with the fourth quarter of 1999, net income increased 26%, excluding the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impact of 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 and tax adjustments in the '99 fourth quarter," continued Mr. Belda. Revenues for the 2000 first quarter were $4.5 billion compared with $4.0 billion for the 1999 first quarter. 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. for the first three months of 2000, 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. , was 21.5%, compared with 14.1% for the year-ago period. Alcoa also stated that, at the end of the 2000 first quarter, the company had achieved $832 million in annualized 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 quarter was $208 million, compared with $182 million for the 1999 fourth quarter. Alcoa continued to improve after tax operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. (ATOI ATOI ASCII to Integer ATOI After Tax Operating Income ATOI Average Time on Ice (hockey) ), which was up 35% from the fourth quarter of 1999. ATOI improved in all of the company's five business segments, with the majority of the improvement in two segments: primary 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. . Higher prices
and productivity improvements were the key drivers in these two
segments.Alcoa noted that GA&SE expense in the 2000 quarter is in line with the company's target at 5% of sales. Regarding Alcoa's pending acquisitions, Mr. Belda stated, "We are confident that the acquisitions of Reynolds Metals Reynolds Metals Company (RMC) was the second largest aluminum company in the United States, and the third largest in the world. The company became well-known for the consumer product Reynolds Wrap as well as being a leader in developing and promoting new uses for aluminum; and Cordant Technologies will receive regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. approval. We expect both transactions to be completed in the second quarter." Alcoa noted that last night, the waiting period for a second request from the U.S. regulatory agency regulatory agency Independent government commission charged by the legislature with setting and enforcing standards for specific industries in the private sector. The concept was invented by the U.S. regarding Cordant Technologies expired ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. ; Alcoa anticipates no U.S. regulatory problems. Regulatory filings in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). regarding Cordant will be made shortly.Founded in 1888, Alcoa is the world's leading producer of primary aluminum, 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: aluminum and alumina, and a major participant Participant A 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 and finished products. The company has 228 operating locations in 32 countries. Financial and operating data for Alcoa and its subsidiaries follow.
FINANCIAL REPORT
Alcoa and subsidiaries
(in millions except share and ton amounts)
(UNAUDITED)
First quarter
For the period ended March 31 2000 1999
Sales and operating revenues $ 4,531 $ 3,985
Other income (loss) 41 (4)
4,572 3,981
Cost of goods sold 3,332 3,128
Selling, general administrative
and other expenses 227 192
Research and development expenses 39 27
Provision for depreciation and
depletion 225 219
Interest expense 51 52
3,874 3,618
Income from operations before
taxes on income 698 363
Provision for taxes on income 238 116
Income from operations 460 247
Less: Minority interests' share (105) (26)
Income before extraordinary loss $ 355 $ 221
Net Income $ 355 $ 221
Earnings per common share:
Basic $ 0.97 $ 0.60
Diluted $ 0.95 $ 0.60
Shares outstanding 364,249,880 366,998,243
Average number of shares used to compute:
Basic earnings per common share 366,436,174 366,961,230
Diluted earnings per common share 372,298,580 369,750,394
Translation and exchange adjustments
included in net income $ 3 $ (9)
Shipments of aluminum
products (metric tons) 1,133,000 1,132,000
Return on average shareholders' equity 21.5% 14.1%
ALCOA 2000 1st QUARTER SUPPLEMENTAL INFORMATION
Consolidated Third-Party
Revenues 1Q99 2Q99 3Q99 4Q99 1999 1Q00
Alumina and chemicals 420 456 474 492 1,842 540
Primary metals 534 519 560 628 2,241 611
Flat-rolled products 1,270 1,258 1,273 1,312 5,113 1,404
Engineered products 942 939 917 930 3,728 1,053
Other 813 861 828 891 3,393 923
-------------------------------------------
Total 3,979 4,033 4,052 4,253 16,317 4,531
Consolidated Intersegment
Revenues
Alumina and chemicals 231 221 214 259 925 250
Primary metals 740 714 671 668 2,793 850
Flat-rolled products 15 11 14 11 51 13
Engineered products 3 3 6 14 26 13
Other 0 0 0 0 0 0
-------------------------------------------
Total Aluminum 989 949 905 952 3,795 1,126
Consolidated Third-Party
Shipments (KMT's)
Alumina and chemicals 1,664 1,836 1,814 1,740 7,054 1,833
Primary metals 370 354 335 383 1,442 339
Flat-rolled products 487 496 496 503 1,982 507
Engineered products 258 249 249 233 989 266
Other 17 18 20 10 65 21
-------------------------------------------
Total Aluminum 1,132 1,117 1,100 1,129 4,478 1,133
Average realized price
- Primary 0.63 0.64 0.71 0.72 0.67 0.79
After-Tax Operating Income
Alumina and chemicals 60 62 83 102 307 155
Primary metals 97 106 159 173 535 227
Flat-rolled products 65 72 74 70 281 73
Engineered products 45 61 42 32 180 53
Other 28 70 50 38 186 50
-------------------------------------------
Total 295 371 408 415 1,489 558
Reconciliation of after-tax
operating income to
consolidated net income:
Total after-tax
operating income 295 371 408 415 1,489 558
Elimination of
intersegment
(profit) loss (9) (10) (8) 3 (24) (20)
Unallocated amounts
(net of tax):
Interest income 5 8 7 6 26 7
Interest expense (34) (32) (33) (27) (126) (33)
Minority interest (26) (54) (54) (108) (242) (106)
Corporate expense (35) (41) (34) (61) (171) (56)
Other 25 (2) (27) 106 102 5
-------------------------------------------
Consolidated net income 221 240 259 334 1,054 355
Alcoa and subsidiaries
Condensed Consolidated Balance Sheet
(in millions)
(unaudited)
March 31 December 31
ASSETS 2000 1999
-------- --------
Current assets:
Cash and cash equivalents (includes
cash of $58 in 2000 and $67 in 1999) $ 208 $ 237
Short-term investments 81 77
Receivables from customers, less
allowances: 2000-$58; 1999-$58 2,366 2,199
Other receivables 172 165
Inventories 1,645 1,618
Deferred income taxes 230 233
Prepaid expenses and other current assets 259 271
-------- --------
Total current assets 4,961 4,800
-------- --------
Properties, plants and equipment, at cost 18,363 18,436
Less, accumulated depreciation,
depletion and Amortization 9,360 9,303
-------- --------
Net properties, plants and equipment 9,003 9,133
-------- --------
Goodwill, net of accumulated amortization
of $232 in 2000 and $221 in 1999 1,338 1,328
Other assets 1,808 1,805
-------- --------
Total assets $ 17,110 $ 17,066
-------- --------
-------- --------
LIABILITIES
Current liabilities:
Short-term borrowings $ 684 $ 343
Accounts payable, trade 1,202 1,219
Accrued compensation and retirement costs 518 582
Taxes, including taxes on income 411 368
Other current liabilities 509 424
Long-term debt due within one year 302 67
-------- --------
Total current liabilities 3,626 3,003
-------- --------
Long-term debt, less amount due
within one year 2,406 2,657
Accrued postretirement benefits 1,705 1,720
Other noncurrent liabilities and
deferred credits 1,471 1,473
Deferred income taxes 430 437
-------- --------
Total liabilities 9,638 9,290
-------- --------
MINORITY INTERESTS 1,475 1,458
-------- --------
CONTINGENT LIABILITIES -- --
SHAREHOLDERS' EQUITY
Preferred stock 56 56
Common stock 395 395
Additional capital 1,758 1,704
Retained earnings 6,232 6,061
Treasury stock, at cost (1,727) (1,260)
Accumulated other comprehensive income (717) (638)
-------- --------
Total shareholders' equity 5,997 6,318
-------- --------
Total liabilities and shareholders' equity $ 17,110 $ 17,066
-------- --------
-------- --------
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