Highlights:
-
Income from continuing operations of $326 million, or $0.28 per share,
up 138 percent compared to second quarter 2010; excluding negative
impact of special items, income from continuing operations of $364
million, or $0.32 per share -
Revenue of $6.6 billion, up 27 percent over second quarter 2010 and 11
percent over first quarter 2011 - Record profitability in mid- and down-stream businesses
- Cash from operations of $798 million
- Free cash flow of $526 million
- Debt-to-capital ratio of 32.6 percent and cash on hand of $1.3 billion
- Reduced days working capital from 43 in second quarter 2010 to 37
-
Reaffirm projection for 12 percent growth in global aluminum demand
for 2011
NEW YORK–Alcoa’s (NYSE: AA) second quarter 2011 income from continuing operations
jumped 138 percent compared to a year ago on growing revenue, record
quarterly alumina revenue and record mid- and down-stream performance,
the Company announced today.
Income from continuing operations was $326 million for second quarter
2011, or $0.28 per share. Excluding the negative impact for special
items of $38 million, income from continuing operations was $364
million, or $0.32 per share.
Second quarter 2011 income from continuing operations was up 138 percent
from second quarter 2010 income of $137 million, or $0.13 per share, and
up 6 percent from first quarter 2011 income of $309 million, or $0.27
per share.
Net income for second quarter 2011 was $322 million, or $0.28 per share,
compared to net income in second quarter 2010 of $136 million, or $0.13
per share, and net income in first quarter 2011 of $308 million, or
$0.27 per share.
“We turned in another strong quarter, with solid revenue and earnings
growth,” said Alcoa Chairman and CEO Klaus Kleinfeld. “Across the
Company, our team is delivering outstanding results through our constant
focus on execution and by reinventing what customers believe is possible
through innovation.
“Although the economic recovery is uneven, the overall outlook for Alcoa
– and for aluminum – remains positive,” Kleinfeld said. “Demand for
aluminum continues to rise and so does growth in our major markets.
These factors support our projection that aluminum demand will grow 12
percent this year and will double by 2020.”
The sequential increase in income from continuing operations was driven
by higher quarterly revenue (up 11 percent), higher alumina shipments
(up 8 percent), and higher realized pricing for both alumina (up 7
percent) and aluminum (up 6 percent), along with improved productivity
and continued strong growth in major markets served by mid- and
down-stream businesses. This was somewhat offset by a weaker U.S.
dollar, along with higher energy and materials costs.
Special items in second quarter 2011 included costs associated with
restructuring and Alcoa’s recent debt tender offers, somewhat offset by
the positive impact of mark-to-market changes on certain power
derivative contracts.
Revenue for second quarter 2011 was $6.6 billion, up 27 percent from the
year-ago quarter and 11 percent from first quarter 2011.
Compared to first quarter 2011, end market revenue increased in
packaging (13 percent), aerospace (6 percent), building and construction
(12 percent), commercial transportation (16 percent), industrial
products (9 percent), industrial gas turbines (8 percent) and automotive
(5 percent).
For the quarter, adjusted EBITDA was $1.04 billion, up 44 percent from
the second quarter of 2010 and up 9 percent from first quarter 2011.
Both Flat-Rolled Products and Engineered Products and Solutions segments
once again turned in record quarterly performance. Flat-Rolled Products
set a record for adjusted EBITDA at $193 million, while Engineered
Products and Solutions’ 19 percent adjusted EBITDA margin was an
all-time quarterly best.
Alcoa is also well ahead of the Company’s 2011 financial targets. The
Company’s debt-to-capital ratio at the end of the quarter was 32.6
percent, a 100 basis-point improvement over first quarter 2011. For the
first half of 2011, capital spending was $476 million, on track at 32
percent of the 2011 target. Expenditures on the Ma’aden-Alcoa investment
were also on track at $152 million, 38 percent of target. Free cash flow
was $526 million in second quarter 2011, putting Alcoa on pace through
the first half of the year. The Company ended the quarter with cash on
hand of $1.3 billion. Days working capital were reduced from 43 in
second quarter 2010 to 37 in second quarter 2011.
For the first half of 2011, revenues were $12.5 billion, up 25 percent
over the first half of 2010. Income from continuing operations in the
first half of 2011 was $635 million, or $0.56 per share, compared to a
loss from continuing operations of $57 million, or $0.06 per share, in
the first half of 2010. Net income in the first half of 2011 was $630
million, or $0.55 per share.
Looking ahead, Alcoa projects continued growth in all major end markets
on a global basis, including aerospace (7 percent), automotive (4-8
percent), commercial transportation (7-12 percent), packaging (2-3
percent), building and construction (1-3 percent), and industrial gas
turbines (5-10 percent). For the year, Alcoa projects aluminum demand to
grow 12 percent on top of the 13 percent growth seen in 2010. Alcoa
projects that, from a 2010 baseline, aluminum demand will double by 2020
on 6.5 percent annual growth.
Segment Information
Alumina
After-tax operating income (ATOI) in the second quarter was $186
million, an increase of 31 percent compared to first quarter 2011.
Adjusted EBITDA rose to $335 million, a sequential increase of 17
percent. A 7 percent improvement in realized alumina price was partially
offset by higher raw materials and energy costs, as well as a negative
currency impact. Alumina production in the second quarter increased from
the previous quarter to a record 4.1 million metric tons (mt).
Primary Metals
ATOI in the second quarter was $201 million, essentially flat from first
quarter 2011. During the second quarter, improved realized pricing and
profits from restarts at Massena, NY, and Intalco and Wenatchee, WA,
were offset by higher energy and raw materials cost, as well as a
negative currency impact. Overall primary production increased by 5
percent. Primary Metals continues to trend above its 10-year average
performance for EBITDA per metric ton and also improved by $142 per mt
over the year-ago quarter.
Flat-Rolled Products
Third-party revenue in the second quarter was $2.1 billion, up 32
percent year-over-year and 10 percent sequentially. ATOI in the second
quarter was $99 million, an increase of 23 percent compared to first
quarter 2011 and a record quarterly performance. Adjusted EBITDA also
came in at a record level of $193 million, up 12 percent sequentially.
Sequential ATOI and adjusted EBITDA growth were driven by volume
strength along with productivity improvements. Both Russia and China
continue to see positive trends, with record ATOI and EBITDA in second
quarter 2011 and third-party volumes up 41 percent in Russia and 30
percent in China, compared to second quarter 2010.
Engineered Products and Solutions
Revenue in the second quarter was $1.37 billion, up 22 percent
year-over-year and 10 percent sequentially. ATOI in the second quarter
was $149 million, up 15 percent from first quarter 2011, driven by
increased volume and productivity improvements. Adjusted EBITDA margin
came in at a record 19 percent, up 60 basis points from first quarter
2011 and up 180 basis points from second quarter 2010. 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
July 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 61,000 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
“estimates,” “expects,” “forecasts,” “foresees,” “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,
Form 10-Q for the quarter ended March 31, 2011 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 | ||||||||||||
| June 30, | March 31, | June 30, | ||||||||||
|
2010 |
2011 |
2011 |
||||||||||
| Sales | $ | 5,187 | $ | 5,958 | $ | 6,585 | ||||||
| Cost of goods sold (exclusive of expenses below) | 4,210 | 4,715 | 5,247 | |||||||||
| Selling, general administrative, and other expenses | 208 | 245 | 253 | |||||||||
| Research and development expenses | 45 | 43 | 46 | |||||||||
| Provision for depreciation, depletion, and amortization | 363 | 361 | 375 | |||||||||
| Restructuring and other charges | 30 | 6 | 34 | |||||||||
| Interest expense | 119 | 111 | 163 | |||||||||
| Other income, net | (16 | ) | (28 | ) | (50 | ) | ||||||
| Total costs and expenses | 4,959 | 5,453 | 6,068 | |||||||||
| Income from continuing operations before income taxes | 228 | 505 | 517 | |||||||||
| Provision for income taxes | 57 | 138 | 136 | |||||||||
| Income from continuing operations | 171 | 367 | 381 | |||||||||
| Loss from discontinued operations | (1 | ) | (1 | ) | (4 | ) | ||||||
| Net income | 170 | 366 | 377 | |||||||||
| Less: Net income attributable to noncontrolling interests | 34 | 58 | 55 | |||||||||
| NET INCOME ATTRIBUTABLE TO ALCOA | $ | 136 | $ | 308 | $ | 322 | ||||||
|
AMOUNTS ATTRIBUTABLE TO ALCOA COMMON SHAREHOLDERS: |
||||||||||||
| Income from continuing operations | $ | 137 | $ | 309 | $ | 326 | ||||||
| Loss from discontinued operations | (1 | ) | (1 | ) | (4 | ) | ||||||
| Net income | $ | 136 | $ | 308 | $ | 322 | ||||||
|
EARNINGS PER SHARE ATTRIBUTABLE TO ALCOA COMMON SHAREHOLDERS: |
||||||||||||
|
Basic: |
||||||||||||
| Income from continuing operations | $ | 0.13 | $ | 0.29 | $ | 0.31 | ||||||
| Loss from discontinued operations | – | – | (0.01 | ) | ||||||||
| Net income | $ | 0.13 | $ | 0.29 | $ | 0.30 | ||||||
| Diluted: | ||||||||||||
| Income from continuing operations | $ | 0.13 | $ | 0.27 | $ | 0.28 | ||||||
| Loss from discontinued operations | – | – | – | |||||||||
| Net income | $ | 0.13 | $ | 0.27 | $ | 0.28 | ||||||
| Average number of shares used to compute: | ||||||||||||
| Basic earnings per common share | 1,021,064,062 | 1,051,966,282 | 1,063,850,843 | |||||||||
| Diluted earnings per common share | 1,116,861,304 | 1,152,509,018 | 1,165,059,389 | |||||||||
| Shipments of aluminum products (metric tons) | 1,182,000 | 1,212,000 | 1,268,000 | |||||||||
| Alcoa and subsidiaries | ||||||||
| Statement of Consolidated Operations (unaudited), continued | ||||||||
| (in millions, except per-share, share, and metric ton amounts) | ||||||||
| Six months ended | ||||||||
|
June 30, |
||||||||
|
2010 |
2011 |
|||||||
| Sales | $ | 10,074 | $ | 12,543 | ||||
| Cost of goods sold (exclusive of expenses below) | 8,223 | 9,962 | ||||||
| Selling, general administrative, and other expenses | 447 | 498 | ||||||
| Research and development expenses | 84 | 89 | ||||||
| Provision for depreciation, depletion, and amortization | 721 | 736 | ||||||
| Restructuring and other charges | 217 | 40 | ||||||
| Interest expense | 237 | 274 | ||||||
| Other expenses (income), net | 5 | (78 | ) | |||||
| Total costs and expenses | 9,934 | 11,521 | ||||||
| Income from continuing operations before income taxes | 140 | 1,022 | ||||||
| Provision for income taxes | 141 | 274 | ||||||
| (Loss) income from continuing operations | (1 | ) | 748 | |||||
| Loss from discontinued operations | (8 | ) | (5 | ) | ||||
| Net (loss) income | (9 | ) | 743 | |||||
| Less: Net income attributable to noncontrolling interests | 56 | 113 | ||||||
| NET (LOSS) INCOME ATTRIBUTABLE TO ALCOA | $ | (65 | ) | $ | 630 | |||
| AMOUNTS ATTRIBUTABLE TO ALCOA COMMON SHAREHOLDERS: | ||||||||
| (Loss) income from continuing operations | $ | (57 | ) | $ | 635 | |||
| Loss from discontinued operations | (8 | ) | (5 | ) | ||||
| Net (loss) income | $ | (65 | ) | $ | 630 | |||
|
EARNINGS PER SHARE ATTRIBUTABLE TO ALCOA COMMON
SHAREHOLDERS: |
||||||||
| Basic: | ||||||||
| (Loss) income from continuing operations | $ | (0.06 | ) | $ | 0.60 | |||
| Loss from discontinued operations | – | (0.01 | ) | |||||
| Net (loss) income | $ | (0.06 | ) | $ | 0.59 | |||
| Diluted: | ||||||||
| (Loss) income from continuing operations | $ | (0.06 | ) | $ | 0.56 | |||
| Loss from discontinued operations | – | (0.01 | ) | |||||
| Net (loss) income | $ | (0.06 | ) | $ | 0.55 | |||
| Average number of shares used to compute: | ||||||||
| Basic earnings per common share | 1,014,138,578 | 1,057,837,076 | ||||||
| Diluted earnings per common share | 1,014,138,578 | 1,158,709,043 | ||||||
| Common stock outstanding at the end of the period | 1,021,204,374 | 1,064,103,706 | ||||||
| Shipments of aluminum products (metric tons) | 2,316,000 | 2,480,000 | ||||||
| Alcoa and subsidiaries | |||||||||
| Consolidated Balance Sheet (unaudited) | |||||||||
| (in millions) | |||||||||
| December 31, | June 30, | ||||||||
|
2010 |
2011 |
||||||||
| ASSETS | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 1,543 | $ | 1,260 | |||||
|
Receivables from customers, less allowances of
$45 in 2010 and $41 in 2011 |
1,565 | 2,083 | |||||||
| Other receivables | 326 | 365 | |||||||
| Inventories | 2,562 | 3,201 | |||||||
| Prepaid expenses and other current assets | 873 | 959 | |||||||
| Total current assets | 6,869 | 7,868 | |||||||
| Properties, plants, and equipment | 37,446 | 38,939 | |||||||
| Less: accumulated depreciation, depletion, and amortization | 17,285 | 18,216 | |||||||
| Properties, plants, and equipment, net | 20,161 | 20,723 | |||||||
| Goodwill | 5,119 | 5,329 | |||||||
| Investments | 1,340 | 1,596 | |||||||
| Deferred income taxes | 3,184 | 3,247 | |||||||
| Other noncurrent assets | 2,521 | 2,625 | |||||||
| Assets held for sale | 99 | 106 | |||||||
| Total assets | $ | 39,293 | $ | 41,494 | |||||
| LIABILITIES | |||||||||
| Current liabilities: | |||||||||
| Short-term borrowings | $ | 92 | $ | 65 | |||||
| Accounts payable, trade | 2,322 | 2,605 | |||||||
| Accrued compensation and retirement costs | 929 | 915 | |||||||
| Taxes, including income taxes | 461 | 506 | |||||||
| Other current liabilities | 1,201 | 1,199 | |||||||
| Long-term debt due within one year | 231 | 510 | |||||||
| Total current liabilities | 5,236 | 5,800 | |||||||
| Long-term debt, less amount due within one year | 8,842 | 8,773 | |||||||
| Accrued pension benefits | 2,923 | 2,297 | |||||||
| Accrued other postretirement benefits | 2,615 | 2,609 | |||||||
| Other noncurrent liabilities and deferred credits | 2,560 | 2,669 | |||||||
| Liabilities of operations held for sale | 31 | 29 | |||||||
| Total liabilities | 22,207 | 22,177 | |||||||
| EQUITY | |||||||||
| Alcoa shareholders’ equity: | |||||||||
| Preferred stock | 55 | 55 | |||||||
| Common stock | 1,141 | 1,178 | |||||||
| Additional capital | 7,087 | 7,522 | |||||||
| Retained earnings | 11,149 | 11,714 | |||||||
| Treasury stock, at cost | (4,146 | ) | (3,959 | ) | |||||
| Accumulated other comprehensive loss | (1,675 | ) | (910 | ) | |||||
| Total Alcoa shareholders’ equity | 13,611 | 15,600 | |||||||
| Noncontrolling interests | 3,475 | 3,717 | |||||||
| Total equity | 17,086 | 19,317 | |||||||
| Total liabilities and equity | $ | 39,293 | $ | 41,494 | |||||
| Alcoa and subsidiaries | ||||||||
| Statement of Consolidated Cash Flows (unaudited) | ||||||||
| (in millions) | ||||||||
| Six months ended | ||||||||
|
June 30, |
||||||||
|
2010 |
2011 |
|||||||
| CASH FROM OPERATIONS | ||||||||
| Net (loss) income | $ | (9 | ) | $ | 743 | |||
| Adjustments to reconcile net (loss) income to cash from operations: | ||||||||
| Depreciation, depletion, and amortization | 722 | 736 | ||||||
| Deferred income taxes | 156 | (42 | ) | |||||
| Equity income, net of dividends | (19 | ) | (27 | ) | ||||
| Restructuring and other charges | 217 | 40 | ||||||
| Net loss from investing activities – asset sales | – | 1 | ||||||
| Loss from discontinued operations | 8 | 5 | ||||||
| Stock-based compensation | 50 | 45 | ||||||
| Excess tax benefits from stock-based payment arrangements | (1 | ) | (6 | ) | ||||
| Other | 81 | 5 | ||||||
|
Changes in assets and liabilities, excluding effects of acquisitions, divestitures, and foreign currency translation adjustments: |
||||||||
| (Increase) in receivables | (570 | ) | (435 | ) | ||||
| (Increase) in inventories | (189 | ) | (519 | ) | ||||
| Decrease (increase) in prepaid expenses and other current assets | 67 | (23 | ) | |||||
| Increase in accounts payable, trade | 1 | 198 | ||||||
| (Decrease) in accrued expenses | (246 | ) | (147 | ) | ||||
| Increase in taxes, including income taxes | 190 | 79 | ||||||
| Pension contributions | (44 | ) | (103 | ) | ||||
| (Increase) in noncurrent assets | (4 | ) | (106 | ) | ||||
| Increase in noncurrent liabilities | 104 | 129 | ||||||
| (Increase) in net assets held for sale | (20 | ) | (5 | ) | ||||
| CASH PROVIDED FROM CONTINUING OPERATIONS | 494 | 568 | ||||||
| CASH PROVIDED FROM (USED FOR) DISCONTINUED OPERATIONS | 5 | (6 | ) | |||||
| CASH PROVIDED FROM OPERATIONS | 499 | 562 | ||||||
| FINANCING ACTIVITIES | ||||||||
| Net change in short-term borrowings | (41 | ) | (28 | ) | ||||
| Net change in commercial paper | 74 | – | ||||||
| Additions to long-term debt | 83 | 1,254 | ||||||
| Debt issuance costs | – | (7 | ) | |||||
| Payments on long-term debt | (123 | ) | (1,095 | ) | ||||
| Proceeds from exercise of employee stock options | 7 | 34 | ||||||
| Excess tax benefits from stock-based payment arrangements | 1 | 6 | ||||||
| Dividends paid to shareholders | (63 | ) | (65 | ) | ||||
| Distributions to noncontrolling interests | (113 | ) | (187 | ) | ||||
| Contributions from noncontrolling interests | 64 | 128 | ||||||
| Acquisitions of noncontrolling interests | (66 | ) | – | |||||
| CASH (USED FOR) PROVIDED FROM FINANCING ACTIVITIES | (177 | ) | 40 | |||||
| INVESTING ACTIVITIES | ||||||||
| Capital expenditures | (434 | ) | (476 | ) | ||||
| Acquisitions, net of cash acquired (a) | 5 | (240 | ) | |||||
| Proceeds from the sale of assets and businesses (b) | (11 | ) | 1 | |||||
| Additions to investments | (159 | ) | (199 | ) | ||||
| Sales of investments | 138 | 5 | ||||||
| Other | 7 | 7 | ||||||
| CASH USED FOR INVESTING ACTIVITIES | (454 | ) | (902 | ) | ||||
|
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH
EQUIVALENTS |
(5 |
) |
17 |
|||||
| Net change in cash and cash equivalents | (137 | ) | (283 | ) | ||||
| Cash and cash equivalents at beginning of year | 1,481 | 1,543 | ||||||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 1,344 | $ | 1,260 | ||||
| (a) |
Acquisitions, net of cash acquired for the six months ended June 30, 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. |
|
| (b) |
Proceeds from the sale of assets and businesses for the six months ended June 30, 2010 was a cash outflow as this line item includes cash paid to settle former customer contracts of the divested Electrical and Electronic Solutions and Automotive Castings businesses. |
|
| Alcoa and subsidiaries | ||||||||||||||||||||||||||||
| Segment Information (unaudited) | ||||||||||||||||||||||||||||
|
(dollars in millions, except realized prices; production and shipments in thousands of metric tons [kmt]) |
||||||||||||||||||||||||||||
|
1Q10 |
2Q10 |
3Q10 |
4Q10 |
2010 |
1Q11 |
2Q11 |
||||||||||||||||||||||
| Alumina: | ||||||||||||||||||||||||||||
| Alumina production (kmt) | 3,866 | 3,890 | 4,047 | 4,119 | 15,922 | 4,024 | 4,144 | |||||||||||||||||||||
| Third-party alumina shipments (kmt) | 2,126 | 2,264 | 2,423 | 2,433 | 9,246 | 2,206 | 2,378 | |||||||||||||||||||||
| Third-party sales | $ | 638 | $ | 701 | $ | 717 | $ | 759 | $ | 2,815 | $ | 810 | $ | 926 | ||||||||||||||
| Intersegment sales | $ | 591 | $ | 530 | $ | 506 | $ | 585 | $ | 2,212 | $ | 633 | $ | 723 | ||||||||||||||
| Equity income | $ | 2 | $ | 4 | $ | 1 | $ | 3 | $ | 10 | $ | 3 | $ | 22 | ||||||||||||||
| Depreciation, depletion, and amortization | $ | 92 | $ | 107 | $ | 100 | $ | 107 | $ | 406 | $ | 103 | $ | 112 | ||||||||||||||
| Income taxes | $ | 27 | $ | 41 | $ | (22 | ) | $ | 14 | $ | 60 | $ | 44 | $ | 60 | |||||||||||||
| After-tax operating income (ATOI) | $ | 72 | $ | 94 | $ | 70 | $ | 65 | $ | 301 | $ | 142 | $ | 186 | ||||||||||||||
| Primary Metals: | ||||||||||||||||||||||||||||
| Aluminum production (kmt) | 889 | 893 | 891 | 913 | 3,586 | 904 | 945 | |||||||||||||||||||||
| Third-party aluminum shipments (kmt) | 695 | 699 | 708 | 743 | 2,845 | 698 | 724 | |||||||||||||||||||||
| Alcoa’s average realized price per metric ton of aluminum |
$ |
2,331 |
$ |
2,309 |
$ |
2,261 |
$ |
2,512 |
$ |
2,356 |
$ |
2,682 |
$ |
2,830 |
||||||||||||||
| Third-party sales | $ | 1,702 | $ | 1,710 | $ | 1,688 | $ | 1,970 | $ | 7,070 | $ | 1,980 | $ | 2,145 | ||||||||||||||
| Intersegment sales | $ | 623 | $ | 693 | $ | 589 | $ | 692 | $ | 2,597 | $ | 839 | $ | 922 | ||||||||||||||
| Equity income (loss) | $ | – | $ | 1 | $ | – | $ | – | $ | 1 | $ | 1 | $ | (1 | ) | |||||||||||||
| Depreciation, depletion, and amortization | $ | 147 | $ | 142 | $ | 142 | $ | 140 | $ | 571 | $ | 141 | $ | 142 | ||||||||||||||
| Income taxes | $ | 18 | $ | – | $ | (3 | ) | $ | 81 | $ | 96 | $ | 53 | $ | 55 | |||||||||||||
| ATOI | $ | 123 | $ | 109 | $ | 78 | $ | 178 | $ | 488 | $ | 202 | $ | 201 | ||||||||||||||
| Flat-Rolled Products: | ||||||||||||||||||||||||||||
| Third-party aluminum shipments (kmt) | 379 | 420 | 448 | 411 | 1,658 | 446 | 473 | |||||||||||||||||||||
| Third-party sales | $ | 1,435 | $ | 1,574 | $ | 1,645 | $ | 1,623 | $ | 6,277 | $ | 1,892 | $ | 2,085 | ||||||||||||||
| Intersegment sales | $ | 46 | $ | 40 | $ | 46 | $ | 48 | $ | 180 | $ | 69 | $ | 62 | ||||||||||||||
| Depreciation, depletion, and amortization | $ | 59 | $ | 57 | $ | 57 | $ | 65 | $ | 238 | $ | 58 | $ | 60 | ||||||||||||||
| Income taxes | $ | 18 | $ | 28 | $ | 26 | $ | 20 | $ | 92 | $ | 33 | $ | 35 | ||||||||||||||
| ATOI | $ | 30 | $ | 71 | $ | 66 | $ | 53 | $ | 220 | $ | 81 | $ | 99 | ||||||||||||||
| Engineered Products and Solutions: | ||||||||||||||||||||||||||||
| Third-party aluminum shipments (kmt) | 46 | 50 | 51 | 50 | 197 | 55 | 57 | |||||||||||||||||||||
| Third-party sales | $ | 1,074 | $ | 1,122 | $ | 1,173 | $ | 1,215 | $ | 4,584 | $ | 1,247 | $ | 1,370 | ||||||||||||||
| Equity income | $ | 1 | $ | – | $ | 1 | $ | – | $ | 2 | $ | 1 | $ | – | ||||||||||||||
| Depreciation, depletion, and amortization | $ | 41 | $ | 38 | $ | 37 | $ | 38 | $ | 154 | $ | 38 | $ | 41 | ||||||||||||||
| Income taxes | $ | 31 | $ | 48 | $ | 63 | $ | 53 | $ | 195 | $ | 62 | $ | 72 | ||||||||||||||
| ATOI | $ | 81 | $ | 107 | $ | 114 | $ | 113 | $ | 415 | $ | 130 | $ | 149 | ||||||||||||||
|
Reconciliation of ATOI to consolidated net (loss) income attributable to Alcoa: |
||||||||||||||||||||||||||||
| Total segment ATOI | $ | 306 | $ | 381 | $ | 328 | $ | 409 | $ | 1,424 | $ | 555 | $ | 635 | ||||||||||||||
| Unallocated amounts (net of tax): | ||||||||||||||||||||||||||||
| Impact of LIFO | (14 | ) | (3 | ) | (2 | ) | 3 | (16 | ) | (24 | ) | (27 | ) | |||||||||||||||
| Interest expense | (77 | ) | (77 | ) | (91 | ) | (76 | ) | (321 | ) | (72 | ) | (106 | ) | ||||||||||||||
| Noncontrolling interests | (22 | ) | (34 | ) | (48 | ) | (34 | ) | (138 | ) | (58 | ) | (55 | ) | ||||||||||||||
| Corporate expense | (67 | ) | (59 | ) | (71 | ) | (94 | ) | (291 | ) | (67 | ) | (76 | ) | ||||||||||||||
| Restructuring and other charges | (122 | ) | (21 | ) | 1 | 8 | (134 | ) | (6 | ) | (22 | ) | ||||||||||||||||
| Discontinued operations | (7 | ) | (1 | ) | – | – | (8 | ) | (1 | ) | (4 | ) | ||||||||||||||||
| Other | (198 | ) | (50 | ) | (56 | ) | 42 | (262 | ) | (19 | ) | (23 | ) | |||||||||||||||
| Consolidated net (loss) income attributable to Alcoa |
$ |
(201 |
) |
$ |
136 |
$ |
61 |
$ |
258 |
$ |
254 |
$ |
308 |
$ |
322 |
|||||||||||||
|
The difference between certain segment totals and consolidated amounts is in Corporate. |
| Alcoa and subsidiaries | ||||||||||||
| Calculation of Financial Measures (unaudited) | ||||||||||||
| (dollars in millions) | ||||||||||||
| Adjusted EBITDA | Quarter ended | |||||||||||
|
June 30, |
March 31, |
June 30, |
||||||||||
| Net income attributable to Alcoa | $ | 136 | $ | 308 | $ | 322 | ||||||
| Add: | ||||||||||||
| Net income attributable to noncontrolling interests | 34 | 58 | 55 | |||||||||
| Loss from discontinued operations | 1 | 1 | 4 | |||||||||
| Provision for income taxes | 57 | 138 | 136 | |||||||||
| Other income, net | (16 | ) | (28 | ) | (50 | ) | ||||||
| Interest expense | 119 | 111 | 163 | |||||||||
| Restructuring and other charges | 30 | 6 | 34 | |||||||||
| Provision for depreciation, depletion, and amortization | 363 | 361 | 375 | |||||||||
| Adjusted EBITDA | $ | 724 | $ | 955 | $ | 1,039 | ||||||
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 | |||||||||||||||||
|
June 30, |
March 31, |
June 30, |
||||||||||||||||
| Cash provided from operations | $ | 300 | $ | (236 | ) | $ | 798 | |||||||||||
| Capital expenditures |
(213 |
) |
(204 |
) |
(272 |
) |
||||||||||||
| Free cash flow | $ | 87 | $ | (440 | ) | $ | 526 | |||||||||||
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 |
|||||||
|
Income |
Diluted |
|||||||
| Net income attributable to Alcoa | $ | 322 | $ | 0.28 | ||||
| Loss from discontinued operations | (4 | ) | ||||||
| Income from continuing operations attributable to Alcoa |
326 |
0.28 |
||||||
| Restructuring and other charges | 16 | |||||||
| Other special items* | 22 | |||||||
| Income from continuing operations attributable to Alcoa – as adjusted |
$ |
364 |
0.32 |
|||||
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 (collectively, “special
items”). There can be no assurances that additional 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: a net charge comprised of expenses for the early repayment of Notes set to mature in 2013 due to the premiums paid under the tender offers and call option and gains from the termination of related “in-the-money” interest rate swaps ($32) and favorable mark-to-market changes in certain power derivative contracts ($10). |
|
| 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 Solutions | |||||||||||||||||||||||||||||||||
|
Adjusted EBITDA |
Quarter ended | ||||||||||||||||||||||||||||||||||||
|
March 31, 2011 |
June 30, 2011 |
June 30, 2010 |
March 31, 2011 |
June 30, 2011 |
March 31, 2011 |
June 30, 2011 |
June 30, 2010 |
March 31, 2011 |
June 30, 2011 |
||||||||||||||||||||||||||||
| After-tax operating income (ATOI) | $ | 142 | $ | 186 | $ | 109 | $ | 202 | $ | 201 | $ | 81 | $ | 99 | $ | 107 | $ | 130 | $ | 149 | |||||||||||||||||
| Add: | |||||||||||||||||||||||||||||||||||||
| Depreciation, depletion, and amortization |
103 |
112 |
142 |
141 |
142 |
58 |
60 |
38 |
38 |
41 |
|||||||||||||||||||||||||||
| Equity (income) loss |
(3 |
) |
(22 |
) |
(1 |
) |
(1 |
) |
1 |
– |
– |
– |
(1 |
) |
– |
||||||||||||||||||||||
| Income taxes | 44 | 60 | – | 53 | 55 | 33 | 35 | 48 | 62 | 72 | |||||||||||||||||||||||||||
| Other | – | (1 | ) | – | 1 | – | 1 | (1 | ) | – | – | (1 | ) | ||||||||||||||||||||||||
| Adjusted EBITDA |
$ |
286 |
$ |
335 |
$ |
250 |
$ |
396 |
$ |
399 |
$ |
173 |
$ |
193 |
$ |
193 |
$ |
229 |
$ |
261 |
|||||||||||||||||
| Production (thousand metric tons) (kmt) |
893 |
904 |
945 |
||||||||||||||||||||||||||||||||||
| Adjusted EBITDA / Production ($ per metric ton) |
$ |
280 |
$ |
438 |
$ |
422 |
|||||||||||||||||||||||||||||||
| Total sales | $ | 1,122 | $ | 1,247 | $ | 1,370 | |||||||||||||||||||||||||||||||
| Adjusted EBITDA Margin |
17.2 |
% |
18.4 |
% |
19.0 |
% |
|||||||||||||||||||||||||||||||
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. 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.