-
Income from continuing operations of $309 million, or $0.27 per share;
best since second quarter 2008, up 20 percent over fourth quarter 2010
and a $503 million turnaround compared to first quarter 2010 -
Income from continuing operations, excluding a negative impact for
special items of $8 million, or $0.01 per share, of $0.28 per share - Net income of $308 million, or $0.27 per share
-
Adjusted EBITDA of $955 million, up 22 percent from fourth quarter
2010, up 60 percent compared to first quarter 2010 and best since
third quarter 2008 - Record profitability in midstream and downstream businesses
-
Revenue of $6.0 billion, up 22 percent over first quarter 2010, up 5
percent over fourth quarter 2010 and best revenue since third quarter
2008 -
Strong end market revenue growth, led by double-digit increases in
packaging, automotive, commercial transportation and industrial
products -
Company reaffirms 2011 global aluminum demand growth projection of 12
percent
NEW YORK–Alcoa (NYSE: AA) announced today first quarter 2011 income from
continuing operations of $309 million, or $0.27 per share, a 20 percent
improvement over fourth quarter 2010, led by improved pricing and
growing demand for aluminum in major end markets. Income from continuing
operations, excluding a negative impact for special items of $8 million,
or $0.01 per share, was $0.28 per share.
First quarter 2011 income from continuing operations was the highest
since second quarter 2008, and compares to fourth quarter 2010 income
from continuing operations of $258 million, or $0.24 per share, and a
first quarter 2010 loss from continuing operations of $194 million, or
$0.19 per share. Fourth quarter 2010 income from continuing operations
included a $35 million, or $0.03 per share, positive impact for special
items, while the loss from continuing operations in first quarter 2010
included a $295 million, or $0.29 per share, negative impact for special
items.
Special items in first quarter 2011 included costs associated with
restructuring, the acquisition of the aerospace fastener business of the
TransDigm group and the acquisition of full ownership of carbothermic
aluminum production technology, partially offset by favorable
mark-to-market changes on certain power derivative contracts.
Net income for first quarter 2011 was $308 million, or $0.27 per share,
compared to net income in fourth quarter 2010 of $258 million, or $0.24
per share, and a net loss in first quarter 2010 of $201 million, or
$0.20 per share.
The improvement over fourth quarter 2010 results was driven by higher
realized prices for alumina and aluminum and growing demand for aluminum
products in major end markets, along with productivity improvements.
These were offset somewhat by a weaker U.S. dollar, along with higher
energy and materials costs. Alcoa reaffirmed the Company’s projection
that global aluminum demand would grow 12 percent in 2011 on top of the
13 percent growth rate in 2010.
“It was an excellent first quarter as we improved profitability across
all business segments, set profit records in our midstream and
downstream businesses and grew substantially,” said Alcoa Chairman and
CEO Klaus Kleinfeld. “This was a total team effort.
“Our outlook for the rest of 2011 and beyond remains very positive due
to the world’s growing population, increasing urbanization, and
aluminum’s advantages as a light, strong and recyclable material.”
Adjusted EBITDA for the first quarter was $955 million, up 22 percent
from fourth quarter 2010, up 60 percent from first quarter 2010, and the
best quarterly performance since third quarter 2008. Adjusted EBITDA
margin improved to 16.0 percent for the quarter, compared to 13.8
percent in fourth quarter 2010 and 12.2 percent in first quarter 2010.
Revenue for first quarter 2011 was $6.0 billion, an increase of 22
percent over first quarter 2010 and 5 percent over fourth quarter 2010.
Third-party pricing increased in the quarter for alumina (15 percent)
and aluminum (7 percent) compared to fourth quarter 2010. Third-party
pricing also increased compared to first quarter 2010 for both alumina
(21 percent) and aluminum (15 percent).
End markets showed continued revenue growth in the first quarter,
including automotive (30 percent), aerospace (7 percent), packaging (14
percent), industrial products (13 percent), and commercial
transportation (12 percent), compared to fourth quarter 2010. Compared
to first quarter 2010, revenues were up in aerospace (20 percent),
packaging (45 percent), building and construction (26 percent), and
commercial transportation (37 percent).
Both Flat-Rolled Products and Engineered Products and Solutions segments
turned in record performance for the quarter. Flat-Rolled Products’
adjusted EBITDA was a first-quarter record at $173 million. Engineered
Products and Solutions set a record for highest-ever adjusted EDITDA
margin at 18.4 percent.
Alcoa is well on track to meet the Company’s 2011 financial targets,
with debt-to-capital ratio improving to 33.6 percent, 130 basis points
better than fourth quarter 2010. Capital spending excluding the Ma’aden
project was $204 million in the quarter, 14 percent of the 2011 target.
Expenditures on the Ma’aden project were also on track at $85 million.
An investment in working capital to support continued strong growth in
end markets, coupled with higher realized pricing, resulted in cash used
in operations of $236 million and negative free cash flow of $440
million.
Segment Information
Alumina
After-tax operating income (ATOI) in the first quarter was $142 million,
an increase of 118 percent compared with fourth quarter 2010. Adjusted
EBITDA rose to $286 million, a sequential increase of 59 percent. A 15
percent improvement in realized alumina price was partially offset by
higher raw material and energy costs, as well as the cost of a labor
contract settlement in Australia. Alumina production in the first
quarter declined slightly from the previous quarter to 4 million metric
tons (mt).
Primary Metals
ATOI in the first quarter was $202 million, an increase of 13 percent
over fourth quarter 2010. During the first quarter, improved realized
pricing and productivity were offset by higher energy, energy derivative
and raw material costs. As previously announced, capacity was restarted
at the Massena, Intalco and Wenatchee plants, resulting in $9 million of
associated start-up costs. Primary production was down 9,000 mt this
quarter, but up slightly on a per-day basis. Adjusted EBITDA per metric
ton continues to demonstrate consistent improvement, increasing to $438
per metric ton in the first quarter, up from $436 per metric ton in
fourth quarter 2010.
Flat-Rolled Products
Revenue in the first quarter was $1,961 million, up 32 percent
year-over-year and 17 percent sequentially. ATOI in the first quarter
was $81 million, an increase of 53 percent compared to fourth quarter
2010 and a record first quarter performance. Adjusted EBITDA also came
in at a record level of $173 million, up 25 percent sequentially.
Sequential ATOI and adjusted EBITDA growth were driven by stronger
pricing in North America and Europe, a better mix of products and higher
volumes, somewhat offset by alloying cost pressure and rising regional
premiums. Both Russia and China continue to see positive trends, with
third-party volumes up approximately 60 percent in Russia and
approximately 90 percent in China, compared to first quarter 2010.
Engineered Products and Solutions
Revenue in the first quarter was $1,247 million, up 16 percent
year-over-year and 3 percent sequentially. ATOI in the first quarter was
$130 million, up 15 percent sequentially from fourth quarter 2010,
driven by volume and productivity improvements. Adjusted EBITDA margin
came in at a record 18.4 percent, up 170 basis points from fourth
quarter 2010 adjusted EBITDA margin of 16.7 percent. EPS continues to
deliver record results compared to previous years, supported by a strong
portfolio of innovative products and productivity improvements.
Alcoa will hold its quarterly conference call at 5:00 PM Eastern Time
on April 11, 2011 to present the quarter’s results. The meeting
will be webcast via alcoa.com. Call information and related
details are available at www.alcoa.com
under “Invest.”
About Alcoa
Alcoa is the world’s leading producer of primary and fabricated
aluminum, as well as the world’s largest miner of bauxite and refiner of
alumina. In addition to inventing the modern-day aluminum industry,
Alcoa innovation has been behind major milestones in the aerospace,
automotive, packaging, building and construction, commercial
transportation, consumer electronics, and industrial markets over the
past 120 years. Among the solutions Alcoa markets are flat-rolled
products, hard alloy extrusions, and forgings, as well as Alcoa® wheels,
fastening systems, precision and investment castings, and building
systems in addition to its expertise in other light metals such as
titanium and nickel-based super alloys. Sustainability is an integral
part of Alcoa’s operating practices and the product design and
engineering it provides to customers. Alcoa has been a member of the Dow
Jones Sustainability Index for nine consecutive years and approximately
75 percent of all of the aluminum ever produced since 1888 is still in
active use today. Alcoa employs approximately 59,000 people in 31
countries across the world. More information can be found at www.alcoa.com.
Forward-Looking Statements
This release contains statements that relate to future events and
expectations and, as such, constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include those containing such words as
“anticipates,” “estimates,” “expects,” “forecasts,” “intends,”
“outlook,” “plans,” “projects,” “should,” “targets,” “will,” or other
words of similar meaning. All statements that reflect Alcoa’s
expectations, assumptions, or projections about the future other than
statements of historical fact are forward-looking statements, including,
without limitation, forecasts concerning global demand for aluminum,
aluminum end market growth, aluminum consumption rates, or other trend
projections, targeted financial results or operating performance, and
statements about Alcoa’s strategies, objectives, goals, targets,
outlook, and business and financial prospects. Forward-looking
statements are subject to a number of known and unknown risks,
uncertainties, and other factors and are not guarantees of future
performance. Important factors that could cause actual results to differ
materially from those expressed or implied in the forward-looking
statements include: (a) material adverse changes in aluminum industry
conditions, including global supply and demand conditions and
fluctuations in London Metal Exchange-based prices for primary aluminum,
alumina, and other products; (b) unfavorable changes in general business
and economic conditions, in the global financial markets, or in the
markets served by Alcoa, including automotive and commercial
transportation, aerospace, building and construction, distribution,
packaging, oil and gas, defense, and industrial gas turbines; (c) the
impact of changes in foreign currency exchange rates on costs and
results, particularly the Australian dollar, Brazilian real, Canadian
dollar, and Euro; (d) increases in energy costs, including electricity,
natural gas, and fuel oil, or the unavailability or interruption of
energy supplies; (e) increases in the costs of other raw materials,
including caustic soda or carbon products; (f) Alcoa’s inability to
achieve the level of revenue growth, cash generation, cost savings,
improvement in profitability and margins, fiscal discipline, or
strengthening of operations (including moving its refining and smelting
businesses down on the industry cost curve and increasing revenues in
its Flat-Rolled Products and Engineered Products and Solutions
segments), anticipated from its productivity improvement, cash
sustainability, and other initiatives; (g) Alcoa’s inability to realize
expected benefits from newly constructed, expanded or acquired
facilities or from international joint ventures as planned and by
targeted completion dates, including the joint venture in Saudi Arabia
or the upstream operations in Brazil; (h) political, economic, and
regulatory risks in the countries in which Alcoa operates or sells
products, including unfavorable changes in laws and governmental
policies, civil unrest, and other events beyond Alcoa’s control; (i) the
outcome of contingencies, including legal proceedings, government
investigations, and environmental remediation; (j) the business or
financial condition of key customers, suppliers, and business partners;
(k) changes in tax rates or benefits; and (l) the other risk factors
summarized in Alcoa’s Form 10-K for the year ended December 31, 2010 and
other reports filed with the Securities and Exchange Commission. Alcoa
disclaims any obligation to update publicly any forward-looking
statements, whether in response to new information, future events or
otherwise, except as required by applicable law.
|
Alcoa and subsidiaries Statement of Consolidated Operations (unaudited) (in millions, except per-share, share, and metric ton amounts) |
||||||||||||
| Quarter ended | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| 2010 | 2010 | 2011 | ||||||||||
| Sales | $ | 4,887 | $ | 5,652 | $ | 5,958 | ||||||
| Cost of goods sold (exclusive of expenses below) | 4,013 | 4,538 | 4,715 | |||||||||
| Selling, general administrative, and other expenses | 239 | 282 | 245 | |||||||||
| Research and development expenses | 39 | 50 | 43 | |||||||||
| Provision for depreciation, depletion, and amortization | 358 | 371 | 361 | |||||||||
| Restructuring and other charges | 187 | (12 | ) | 6 | ||||||||
| Interest expense | 118 | 118 | 111 | |||||||||
| Other expenses (income), net | 21 | (43 | ) | (28 | ) | |||||||
| Total costs and expenses | 4,975 | 5,304 | 5,453 | |||||||||
| (Loss) income from continuing operations before income taxes | (88 | ) | 348 | 505 | ||||||||
| Provision for income taxes | 84 | 56 | 138 | |||||||||
| (Loss) income from continuing operations | (172 | ) | 292 | 367 | ||||||||
| Loss from discontinued operations | (7 | ) | – | (1 | ) | |||||||
| Net (loss) income | (179 | ) | 292 | 366 | ||||||||
| Less: Net income attributable to noncontrolling interests | 22 | 34 | 58 | |||||||||
| NET (LOSS) INCOME ATTRIBUTABLE TO ALCOA | $ | (201 | ) | $ | 258 | $ | 308 | |||||
|
AMOUNTS ATTRIBUTABLE TO ALCOA COMMON SHAREHOLDERS: |
||||||||||||
| (Loss) income from continuing operations | $ | (194 | ) | $ | 258 | $ | 309 | |||||
| Loss from discontinued operations | (7 | ) | – | (1 | ) | |||||||
| Net (loss) income | $ | (201 | ) | $ | 258 | $ | 308 | |||||
|
EARNINGS PER SHARE ATTRIBUTABLE TO ALCOA COMMON SHAREHOLDERS: |
||||||||||||
| Basic: | ||||||||||||
| (Loss) income from continuing operations | $ | (0.19 | ) | $ | 0.25 | $ | 0.29 | |||||
| Loss from discontinued operations | (0.01 | ) | – | – | ||||||||
| Net (loss) income | $ | (0.20 | ) | $ | 0.25 | $ | 0.29 | |||||
| Diluted: | ||||||||||||
| (Loss) income from continuing operations | $ | (0.19 | ) | $ | 0.24 | $ | 0.27 | |||||
| Loss from discontinued operations | (0.01 | ) | – | – | ||||||||
| Net (loss) income | $ | (0.20 | ) | $ | 0.24 | $ | 0.27 | |||||
| Average number of shares used to compute: | ||||||||||||
| Basic earnings per common share | 1,007,221,162 | 1,021,697,163 | 1,051,966,282 | |||||||||
| Diluted earnings per common share | 1,007,221,162 | 1,119,285,945 | 1,152,509,018 | |||||||||
| Common stock outstanding at the end of the period | 1,020,819,182 | 1,022,025,965 | 1,063,466,414 | |||||||||
| Shipments of aluminum products (metric tons) | 1,134,000 | 1,218,000 | 1,212,000 | |||||||||
|
Alcoa and subsidiaries Consolidated Balance Sheet (unaudited) (in millions) |
||||||||
|
December 31,
2010 |
March 31,
2011 |
|||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 1,543 | $ | 887 | ||||
|
Receivables from customers, less allowances of $45 in 2010 and 2011 |
1,565 | 2,001 | ||||||
| Other receivables | 326 | 373 | ||||||
| Inventories | 2,562 | 2,995 | ||||||
| Prepaid expenses and other current assets | 873 | 953 | ||||||
| Total current assets | 6,869 | 7,209 | ||||||
| Properties, plants, and equipment | 37,446 | 38,120 | ||||||
| Less: accumulated depreciation, depletion, and amortization | 17,285 | 17,753 | ||||||
| Properties, plants, and equipment, net | 20,161 | 20,367 | ||||||
| Goodwill | 5,119 | 5,363 | ||||||
| Investments | 1,340 | 1,469 | ||||||
| Deferred income taxes | 3,184 | 3,264 | ||||||
| Other noncurrent assets | 2,521 | 2,561 | ||||||
| Assets held for sale | 99 | 103 | ||||||
| Total assets | $ | 39,293 | $ | 40,336 | ||||
| LIABILITIES | ||||||||
| Current liabilities: | ||||||||
| Short-term borrowings | $ | 92 | $ | 221 | ||||
| Accounts payable, trade | 2,322 | 2,488 | ||||||
| Accrued compensation and retirement costs | 929 | 854 | ||||||
| Taxes, including income taxes | 461 | 475 | ||||||
| Other current liabilities | 1,201 | 1,107 | ||||||
| Long-term debt due within one year | 231 | 572 | ||||||
| Total current liabilities | 5,236 | 5,717 | ||||||
| Long-term debt, less amount due within one year | 8,842 | 8,501 | ||||||
| Accrued pension benefits | 2,923 | 2,309 | ||||||
| Accrued other postretirement benefits | 2,615 | 2,606 | ||||||
| Other noncurrent liabilities and deferred credits | 2,560 | 2,770 | ||||||
| Liabilities of operations held for sale | 31 | 29 | ||||||
| Total liabilities | 22,207 | 21,932 | ||||||
| EQUITY | ||||||||
| Alcoa shareholders’ equity: | ||||||||
| Preferred stock | 55 | 55 | ||||||
| Common stock | 1,141 | 1,178 | ||||||
| Additional capital | 7,087 | 7,508 | ||||||
| Retained earnings | 11,149 | 11,424 | ||||||
| Treasury stock, at cost | (4,146 | ) | (3,973 | ) | ||||
| Accumulated other comprehensive loss | (1,675 | ) | (1,418 | ) | ||||
| Total Alcoa shareholders’ equity | 13,611 | 14,774 | ||||||
| Noncontrolling interests | 3,475 | 3,630 | ||||||
| Total equity | 17,086 | 18,404 | ||||||
| Total liabilities and equity | $ | 39,293 | $ | 40,336 | ||||
|
Alcoa and subsidiaries Statement of Consolidated Cash Flows (unaudited) (in millions) |
||||||||
|
Three months ended
March 31, |
||||||||
| 2010 | 2011 | |||||||
| CASH FROM OPERATIONS | ||||||||
| Net (loss) income | $ | (179 | ) | $ | 366 | |||
| Adjustments to reconcile net (loss) income to cash from operations: | ||||||||
| Depreciation, depletion, and amortization | 358 | 361 | ||||||
| Deferred income taxes | 68 | (119 | ) | |||||
| Equity income, net of dividends | (15 | ) | (4 | ) | ||||
| Restructuring and other charges | 187 | 6 | ||||||
| Net (gain) loss from investing activities – asset sales | (2 | ) |
1 |
|||||
| Loss from discontinued operations | 7 | 1 | ||||||
| Stock-based compensation | 25 | 23 | ||||||
| Excess tax benefits from stock-based payment arrangements | – | (5 | ) | |||||
| Other | 65 |
6 |
||||||
|
Changes in assets and liabilities, excluding effects of acquisitions, divestitures, and foreign currency translation adjustments: |
||||||||
| (Increase) in receivables | (176 | ) | (404 | ) | ||||
| (Increase) in inventories | (105 | ) | (355 | ) | ||||
| Decrease (increase) in prepaid expenses and other current assets | 14 | (71 | ) | |||||
| (Decrease) increase in accounts payable, trade | (55 | ) | 113 | |||||
| (Decrease) in accrued expenses | (326 | ) | (267 | ) | ||||
| Increase in taxes, including income taxes | 321 | 134 | ||||||
| Pension contributions | (22 | ) | (31 | ) | ||||
| (Increase) in noncurrent assets | (9 | ) | (61 | ) | ||||
| Increase in noncurrent liabilities | 53 | 76 | ||||||
| (Increase) in net assets held for sale | (17 | ) | (5 | ) | ||||
| CASH PROVIDED FROM (USED FOR) CONTINUING OPERATIONS | 192 | (235 | ) | |||||
| CASH PROVIDED FROM (USED FOR) DISCONTINUED OPERATIONS | 7 | (1 | ) | |||||
| CASH PROVIDED FROM (USED FOR) OPERATIONS | 199 | (236 | ) | |||||
| FINANCING ACTIVITIES | ||||||||
| Net change in short-term borrowings | (9 | ) | 129 | |||||
| Additions to long-term debt | 53 | 5 | ||||||
| Payments on long-term debt | (86 | ) | (33 | ) | ||||
| Proceeds from exercise of employee stock options | 5 | 28 | ||||||
| Excess tax benefits from stock-based payment arrangements | – | 5 | ||||||
| Dividends paid to shareholders | (32 | ) | (33 | ) | ||||
| Distributions to noncontrolling interests | (72 | ) | (97 | ) | ||||
| Contributions from noncontrolling interests | 27 | 121 | ||||||
| Acquisitions of noncontrolling interests | (66 | ) | – | |||||
| CASH (USED FOR) PROVIDED FROM FINANCING ACTIVITIES | (180 | ) | 125 | |||||
| INVESTING ACTIVITIES | ||||||||
| Capital expenditures | (221 | ) | (204 | ) | ||||
| Acquisitions, net of cash acquired (a) | 5 | (239 | ) | |||||
| Additions to investments | (129 | ) | (118 | ) | ||||
| Sales of investments | 137 | 5 | ||||||
| Other | – | 4 | ||||||
| CASH USED FOR INVESTING ACTIVITIES | (208 | ) | (552 | ) | ||||
|
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS |
– |
7 |
||||||
| Net change in cash and cash equivalents | (189 | ) | (656 | ) | ||||
| Cash and cash equivalents at beginning of year | 1,481 | 1,543 | ||||||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 1,292 | $ | 887 | ||||
| (a) |
Acquisitions, net of cash acquired for the three months ended March 31, 2010 was a cash inflow as this line item includes cash received as a result of post-closing adjustments related to the acquisition of a BHP Billiton subsidiary that holds interests in four bauxite mines and one refining facility in the Republic of Suriname, which was completed on July 31, 2009. |
|
|
Alcoa and subsidiaries Segment Information (unaudited)
(dollars in millions, except realized prices; production and |
||||||||||||||||||||||||
| 1Q10 | 2Q10 | 3Q10 | 4Q10 | 2010 | 1Q11 | |||||||||||||||||||
| Alumina: | ||||||||||||||||||||||||
| Alumina production (kmt) | 3,866 | 3,890 | 4,047 | 4,119 | 15,922 | 4,024 | ||||||||||||||||||
| Third-party alumina shipments (kmt) | 2,126 | 2,264 | 2,423 | 2,433 | 9,246 | 2,206 | ||||||||||||||||||
| Third-party sales | $ | 638 | $ | 701 | $ | 717 | $ | 759 | $ | 2,815 | $ | 810 | ||||||||||||
| Intersegment sales | $ | 591 | $ | 530 | $ | 506 | $ | 585 | $ | 2,212 | $ | 633 | ||||||||||||
| Equity income | $ | 2 | $ | 4 | $ | 1 | $ | 3 | $ | 10 | $ | 3 | ||||||||||||
| Depreciation, depletion, and amortization | $ | 92 | $ | 107 | $ | 100 | $ | 107 | $ | 406 | $ | 103 | ||||||||||||
| Income taxes | $ | 27 | $ | 41 | $ | (22 | ) | $ | 14 | $ | 60 | $ | 44 | |||||||||||
| After-tax operating income (ATOI) | $ | 72 | $ | 94 | $ | 70 | $ | 65 | $ | 301 | $ | 142 | ||||||||||||
| Primary Metals: | ||||||||||||||||||||||||
| Aluminum production (kmt) | 889 | 893 | 891 | 913 | 3,586 | 904 | ||||||||||||||||||
| Third-party aluminum shipments (kmt) | 695 | 699 | 708 | 743 | 2,845 | 698 | ||||||||||||||||||
| Alcoa’s average realized price per metric ton of aluminum |
$ |
2,331 |
$ |
2,309 |
$ |
2,261 |
$ |
2,512 |
$ |
2,356 |
$ |
2,682 |
||||||||||||
| Third-party sales | $ | 1,702 | $ | 1,710 | $ | 1,688 | $ | 1,970 | $ | 7,070 | $ | 1,980 | ||||||||||||
| Intersegment sales | $ | 623 | $ | 693 | $ | 589 | $ | 692 | $ | 2,597 | $ | 839 | ||||||||||||
| Equity income | $ | – | $ | 1 | $ | – | $ | – | $ | 1 | $ | 1 | ||||||||||||
| Depreciation, depletion, and amortization | $ | 147 | $ | 142 | $ | 142 | $ | 140 | $ | 571 | $ | 141 | ||||||||||||
| Income taxes | $ | 18 | $ | – | $ | (3 | ) | $ | 81 | $ | 96 | $ | 53 | |||||||||||
| ATOI | $ | 123 | $ | 109 | $ | 78 | $ | 178 | $ | 488 | $ | 202 | ||||||||||||
| Flat-Rolled Products: | ||||||||||||||||||||||||
| Third-party aluminum shipments (kmt) | 379 | 420 | 448 | 411 | 1,658 | 446 | ||||||||||||||||||
| Third-party sales | $ | 1,435 | $ | 1,574 | $ | 1,645 | $ | 1,623 | $ | 6,277 | $ | 1,892 | ||||||||||||
| Intersegment sales | $ | 46 | $ | 40 | $ | 46 | $ | 48 | $ | 180 | $ | 69 | ||||||||||||
| Depreciation, depletion, and amortization | $ | 59 | $ | 57 | $ | 57 | $ | 65 | $ | 238 | $ | 58 | ||||||||||||
| Income taxes | $ | 18 | $ | 28 | $ | 26 | $ | 20 | $ | 92 | $ | 33 | ||||||||||||
| ATOI | $ | 30 | $ | 71 | $ | 66 | $ | 53 | $ | 220 | $ | 81 | ||||||||||||
| Engineered Products and Solutions: | ||||||||||||||||||||||||
| Third-party aluminum shipments (kmt) | 46 | 50 | 51 | 50 | 197 | 55 | ||||||||||||||||||
| Third-party sales | $ | 1,074 | $ | 1,122 | $ | 1,173 | $ | 1,215 | $ | 4,584 | $ | 1,247 | ||||||||||||
| Equity income | $ | 1 | $ | – | $ | 1 | $ | – | $ | 2 | $ | 1 | ||||||||||||
| Depreciation, depletion, and amortization | $ | 41 | $ | 38 | $ | 37 | $ | 38 | $ | 154 | $ | 38 | ||||||||||||
| Income taxes | $ | 31 | $ | 48 | $ | 63 | $ | 53 | $ | 195 | $ | 62 | ||||||||||||
| ATOI | $ | 81 | $ | 107 | $ | 114 | $ | 113 | $ | 415 | $ | 130 | ||||||||||||
|
Reconciliation of ATOI to consolidated net (loss) income attributable to Alcoa: |
||||||||||||||||||||||||
| Total segment ATOI | $ | 306 | $ | 381 | $ | 328 | $ | 409 | $ | 1,424 | $ | 555 | ||||||||||||
| Unallocated amounts (net of tax): | ||||||||||||||||||||||||
| Impact of LIFO | (14 | ) | (3 | ) | (2 | ) | 3 | (16 | ) | (24 | ) | |||||||||||||
| Interest expense | (77 | ) | (77 | ) | (91 | ) | (76 | ) | (321 | ) | (72 | ) | ||||||||||||
| Noncontrolling interests | (22 | ) | (34 | ) | (48 | ) | (34 | ) | (138 | ) | (58 | ) | ||||||||||||
| Corporate expense | (67 | ) | (59 | ) | (71 | ) | (94 | ) | (291 | ) | (67 | ) | ||||||||||||
| Restructuring and other charges | (122 | ) | (21 | ) | 1 | 8 | (134 | ) | (6 | ) | ||||||||||||||
| Discontinued operations | (7 | ) | (1 | ) | – | – | (8 | ) | (1 | ) | ||||||||||||||
| Other | (198 | ) | (50 | ) | (56 | ) | 42 | (262 | ) | (19 | ) | |||||||||||||
| Consolidated net (loss) income attributable to Alcoa |
$ |
(201 |
) |
$ |
136 |
$ |
61 |
$ |
258 |
$ |
254 |
$ |
308 |
|||||||||||
|
The difference between certain segment totals and consolidated |
||||||||||||||||||||||||
|
Alcoa and subsidiaries Calculation of Financial Measures (unaudited) (dollars in millions) |
||||||||||||
| Adjusted EBITDA Margin | Quarter ended | |||||||||||
|
March 31,
2010 |
December 31,
2010 |
March 31,
2011 |
||||||||||
| Net (loss) income attributable to Alcoa | $ | (201 | ) | $ | 258 | $ | 308 | |||||
| Add: | ||||||||||||
| Net income attributable to noncontrolling interests | 22 | 34 | 58 | |||||||||
| Loss from discontinued operations | 7 | – | 1 | |||||||||
| Provision for income taxes | 84 | 56 | 138 | |||||||||
| Other expenses (income), net | 21 | (43 | ) | (28 | ) | |||||||
| Interest expense | 118 | 118 | 111 | |||||||||
| Restructuring and other charges | 187 | (12 | ) | 6 | ||||||||
| Provision for depreciation, depletion, and amortization | 358 | 371 | 361 | |||||||||
| Adjusted EBITDA | $ | 596 | $ | 782 | $ | 955 | ||||||
| Sales | $ | 4,887 | $ | 5,652 | $ | 5,958 | ||||||
| Adjusted EBITDA Margin | 12.2 | % | 13.8 | % | 16.0 | % | ||||||
Alcoa’s definition of Adjusted EBITDA (Earnings before interest, taxes,
depreciation, and amortization) is net margin plus an add-back for
depreciation, depletion, and amortization. Net margin is equivalent to
Sales minus the following items: Cost of goods sold; Selling, general
administrative, and other expenses; Research and development expenses;
and Provision for depreciation, depletion, and amortization. Adjusted
EBITDA is a non-GAAP financial measure. Management believes that this
measure is meaningful to investors because Adjusted EBITDA provides
additional information with respect to Alcoa’s operating performance and
the Company’s ability to meet its financial obligations. The Adjusted
EBITDA presented may not be comparable to similarly titled measures of
other companies.
| Free Cash Flow | Quarter ended | |||
|
March 31,
2011 |
||||
| Cash provided from operations | $ | (236 | ) | |
| Capital expenditures |
(204 |
) |
||
| Free cash flow | $ | (440 | ) | |
Free Cash Flow is a non-GAAP financial measure. Management believes that
this measure is meaningful to investors because management reviews cash
flows generated from operations after taking into consideration capital
expenditures due to the fact that these expenditures are considered
necessary to maintain and expand Alcoa’s asset base and are expected to
generate future cash flows from operations. It is important to note that
Free Cash Flow does not represent the residual cash flow available for
discretionary expenditures since other non-discretionary expenditures,
such as mandatory debt service requirements, are not deducted from the
measure.
|
Alcoa and subsidiaries Calculation of Financial Measures (unaudited), continued (in millions, except per-share amounts) |
|||||||
| Adjusted Income | Quarter ended March 31, 2011 | ||||||
|
Income |
Diluted
EPS |
||||||
| Net income attributable to Alcoa | $ | 308 | $ | 0.27 | |||
| Loss from discontinued operations | (1 | ) | |||||
| Income from continuing operations attributable to Alcoa |
309 |
0.27 |
|||||
| Restructuring and other charges | 5 | ||||||
| Other special items* | 3 | ||||||
| Income from continuing operations attributable to Alcoa – as adjusted |
$ |
317 |
0.28 |
||||
Income from continuing operations attributable to Alcoa – as adjusted is
a non-GAAP financial measure. Management believes that this measure is
meaningful to investors because management reviews the operating results
of Alcoa excluding the impacts of restructuring and other charges,
discrete tax items, and other special items. There can be no assurances
that additional restructuring and other charges, discrete tax items, and
other special items will not occur in future periods. To compensate for
this limitation, management believes that it is appropriate to consider
both Income from continuing operations attributable to Alcoa determined
under GAAP as well as Income from continuing operations attributable to
Alcoa – as adjusted.
| * |
Other special items include the following: costs related to |
|
|
Alcoa and subsidiaries Calculation of Financial Measures (unaudited), continued (dollars in millions, except per metric ton amounts) |
||||||||||||||||||||||||||||||
| Segment Measures | Alumina | Primary Metals | Flat-Rolled Products |
Engineered Products and |
||||||||||||||||||||||||||
| Adjusted EBITDA | Quarter ended | |||||||||||||||||||||||||||||
|
December 31,
2010 |
March 31,
2011 |
December 31,
2010 |
March 31,
2011 |
December 31,
2010 |
March 31,
2011 |
December 31,
2010 |
March 31,
2011 |
|||||||||||||||||||||||
| After-tax operating income (ATOI) | $ | 65 | $ | 142 | $ | 178 | $ | 202 | $ | 53 | $ | 81 | $ | 113 | $ | 130 | ||||||||||||||
| Add: | ||||||||||||||||||||||||||||||
|
Depreciation, depletion, and amortization |
107 |
103 |
140 |
141 |
65 |
58 |
38 |
38 |
||||||||||||||||||||||
| Equity income |
(3 |
) |
(3 |
) |
– |
(1 |
) |
– |
– |
– |
(1 |
) |
||||||||||||||||||
| Income taxes | 14 | 44 | 81 | 53 | 20 | 33 | 53 | 62 | ||||||||||||||||||||||
| Other | (3 | ) | – | (1 | ) | 1 | – | 1 | (1 | ) | – | |||||||||||||||||||
| Adjusted EBITDA |
$ |
180 |
$ |
286 |
$ |
398 |
$ |
396 |
$ |
138 |
$ |
173 |
$ |
203 |
$ |
229 |
||||||||||||||
| Production (thousand metric tons) (kmt) |
913 |
904 |
||||||||||||||||||||||||||||
| Adjusted EBITDA / Production ($ per metric ton) |
$ |
436 |
$ |
438 |
||||||||||||||||||||||||||
| Total sales | $ | 1,215 | $ | 1,247 | ||||||||||||||||||||||||||
| Adjusted EBITDA Margin |
16.7 |
% |
18.4 |
% |
||||||||||||||||||||||||||
Alcoa’s definition of Adjusted EBITDA (Earnings before interest, taxes,
depreciation, and amortization) is net margin plus an add-back for
depreciation, depletion, and amortization. Net margin is equivalent to
Sales minus the following items: Cost of goods sold; Selling, general
administrative, and other expenses; Research and development expenses;
and Provision for depreciation, depletion, and amortization. The Other
line in the table above includes gains/losses on asset sales and other
nonoperating items. Adjusted EBITDA is a non-GAAP financial measure.
Management believes that this measure is meaningful to investors because
Adjusted EBITDA provides additional information with respect to Alcoa’s
operating performance and the Company’s ability to meet its financial
obligations. The Adjusted EBITDA presented may not be comparable to
similarly titled measures of other companies.