ALI: Alcoa Inc: Alcoa Reports $0.00 Per Share From Continuing Operations; Income Of $0.06 Per Share Excluding Special Items
ALI: Alcoa Inc: Alcoa Reports $0.00 Per Share From Continuing Operations;
Income Of $0.06 Per Share Excluding Special Items
UK Regulatory Announcement
Strong Revenue, Positive Free Cash Flow, Despite Lower Aluminum Prices
2Q 2012 Highlights
* Earnings per share of $0.00 based on a $2 million loss from continuing
operations; excluding special items, income from continuing operations of
$61 million, or $0.06 per share
* Revenue of $6.0 billion, steady sequentially despite decline in realized
aluminum prices
* Record quarterly results in Engineered Products and Solutions; record
first half results in Global Rolled Products, Engineered Products and
Solutions
* Cash from operations of $537 million
* Positive free cash flow of $246 million
* Days working capital a record low for second quarter
* Strong liquidity with cash on hand of $1.7 billion
* Company reaffirms global aluminum demand growth projection of 7 percent
and a global aluminum supply deficit in 2012
LONDON
Alcoa (NYSE:AA) today reported $0.00 earnings per share, based on a loss from
continuing operations of $2 million, which includes special items of $63
million. Excluding the impact of special items, income from continuing
operations was $61 million, or $0.06 per share.
The company reported strong revenue of $6.0 billion, solid free cash flow and
lower debt despite a 4 percent decline in realized aluminum prices
sequentially and 18 percent year-on-year.
“Alcoa maintained revenue strength and solid liquidity by driving high
profitability in our mid and downstream businesses and by reducing costs and
improving performance in our upstream businesses,” said Klaus Kleinfeld,
Chairman and CEO.
“Although aluminum prices are down, the fundamentals of the aluminum market
remain sound with strong demand and tight supply, and Alcoa is successfully
capitalizing on accelerating demand in high-growth end markets such as
aerospace and automotive.”
Second quarter 2012 net loss of $2 million, or $0.00 per share, compared to
net income of $94 million, or $0.09 per share, in first quarter 2012 and net
income of $322 million, or $0.28 per share, in second quarter 2011. Adjusted
EBITDA for the second quarter was $517 million, down 17 percent from first
quarter 2012, and 50 percent from second quarter 2011.
Special items in second quarter 2012 included reserves for environmental
remediation, uninsured losses related to the Massena fire, a net discrete tax
charge, and restructuring and other charges. In addition, during the quarter,
Alcoa proposed to settle the Alba civil suit by offering Alba a cash payment
of $45 million. Alcoa has also offered Alba a long-term alumina supply
contract. Based on the cash offer, Alcoa recorded a $45 million charge. Alcoa
currently estimates an additional possible charge of up to $75 million to
settle the suit. In addition, Alcoa has been in dialogue with the Department
of Justice and the Securities and Exchange Commission regarding their
investigations. If a settlement of the government's investigations can be
reached, it is probable that the amount would be material in a particular
period to Alcoa's results of operations.
Second quarter 2012 revenue was $6.0 billion, steady sequentially and down 9
percent compared with second quarter 2011, primarily due to an 18 and 17
percent year-on-year decline in the realized metal price and realized alumina
price, respectively.
Alcoa recorded revenue growth in the second quarter across global end markets,
including packaging (5 percent), aerospace (4 percent), and commercial
transportation (3 percent), compared to first quarter 2012.
Alcoa continues to project a global aluminum supply deficit in 2012 and
reaffirmed its forecast that global aluminum demand would grow 7 percent in
2012, on top of the 10 percent growth seen in 2011.
Strength in the midstream and downstream businesses continued to mitigate
volatility in the upstream businesses. Engineered Products and Solutions once
again turned in record results, with second quarter adjusted EBITDA margin at
19.4 percent, the highest to date. Despite continued European weakness, Global
Rolled Products achieved record first half adjusted EBITDA per metric ton of
$409, 74 percent higher than the 10-year average, and record first half ATOI
of $191 million.
For the first half of 2012, revenues were $12.0 billion, down 5 percent over
the first half of 2011. Income from continuing operations in the first half of
2012 was $92 million, or $0.08 per share, compared to $635 million, or $0.56
per share, in the first half of 2011. Net income in the first half of 2012 was
$92 million, or $0.08 per share, compared with net income in the first half of
2011 of $630 million, or $0.55 per share.
Alcoa continues to deliver on its Cash Sustainability Program in 2012,
maintaining a stable balance sheet in a volatile economic environment. The
Company generated free cash flow in the quarter of $246 million, an
improvement of $752 million sequentially. Following the record low in days
working capital achieved for first quarter 2012, Alcoa also achieved a record
low in working capital for the second quarter at 33 days, five days lower than
the previous second quarter record set in 2011. The quarterly trend in
reduction of days working capital has been ongoing since first quarter 2009.
The Company continued strong productivity growth across all businesses this
quarter, driven by higher utilization rates, process innovations, lower scrap
rates, and usage reductions.
Debt-to-capital ratio stood at 36.1 percent, while liquidity remained strong
with cash on hand of $1.7 billion. Capital spending was $291 million in the
quarter, compared to $270 million in first quarter 2012. Expenditures on the
Saudi Arabia joint venture project were also on track at $55 million.
Alcoa remains on track to meet its 2012 pension obligations, with year-to-date
cash contributions of $352 million representing more than 50 percent of total
2012 estimated payments.
Alcoa is executing on its previously announced curtailments in the upstream
business, improving competitiveness and driving toward the Company’s stated
goal of moving down the cost curve 10 percentage points in smelting and 7
percentage points in refining by 2015. In second quarter 2012, 390,000 metric
tons of Alcoa’s system refining capacity was taken offline. Previously
announced smelter curtailments are on track and expected to be complete by the
end of the year.
Segment Information
Alumina
After-tax operating income (ATOI) was $23 million, down $12 million from first
quarter 2012 and $163 million versus second quarter 2011. Adjusted EBITDA was
$127 million, down from $147 million in first quarter 2012. Sequentially,
continued productivity gains and favorable currency offset the impact of lower
volumes due to curtailments, and higher costs from raw materials, fuel oil,
and planned maintenance.
Primary Metals
ATOI in the second quarter was a negative $3 million, a $13 million decrease
sequentially and a $204 million decrease from the year-ago quarter. Adjusted
EBITDA decreased to $119 million from $134 million in the previous quarter.
Third-party realized prices during the second quarter were down 4 percent
sequentially and 18 percent year-over-year. Sequentially, regional premiums
and continued strength in our value-added sales helped offset the decrease in
aluminum prices this quarter. Strong performance improvements delivered
sequential productivity gains, in addition to reductions in raw materials and
energy costs.
Global Rolled Products
ATOI for the second quarter was $95 million, down 1 percent sequentially and 4
percent compared with second quarter 2011. Sequentially, higher volumes and
productivity gains offset less favorable price/mix and increased costs. Third
party shipments were up 7 percent over first quarter 2012, with adjusted
EBITDA per metric ton of $390. Days working capital was a record for the
second quarter at 40.3 days, down 6 days year-over-year.
Engineered Products and Solutions
ATOI in the second quarter was $160 million, up $5 million, or 3 percent,
sequentially from first quarter 2012 and up $11 million, or 7 percent, from
the year-ago quarter despite the negative impact of the Massena fire. Adjusted
EBITDA of $276 million increased $9 million sequentially and $15 million
year-on-year. The sequential increase in ATOI was driven by continued
productivity improvements and improved volume, partially offset by higher
costs and the unfavorable impact from Massena. Despite the Massena impact,
adjusted EBITDA margin was still a quarterly record at 19.4 percent.
Alcoa will hold its quarterly conference call at 5:00 PM Eastern Time on July
9, 2012 to present quarterly 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 aluminum 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 superalloys.
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 10 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,”
“outlook,” “plans,” “predicts,” “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, end
market conditions, growth opportunities for aluminum in automotive, aerospace
and other applications, 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, and fluctuations in
indexed-based and spot prices for alumina; (b) deterioration in global
economic and financial market conditions generally; (c) unfavorable changes in
the markets served by Alcoa, including automotive and commercial
transportation, aerospace, building and construction, packaging, consumer
electronics, and industrial gas turbine; (d) the impact of changes in foreign
currency exchange rates on costs and results, particularly the Australian
dollar, Brazilian real, Canadian dollar, euro, and Norwegian kroner;
(e) increases in energy costs, including electricity, natural gas, and fuel
oil, or the unavailability or interruption of energy supplies; (f) increases
in the costs of other raw materials, including aluminum fluoride, caustic soda
or carbon products; (g) Alcoa’s inability to achieve the level of revenue
growth, cash generation, cost savings, improvement in profitability and
margins, fiscal discipline, or strengthening of competitiveness and operations
(including moving its refining and smelting businesses down on the industry
cost curves and increasing revenues in its Global Rolled Products and
Engineered Products and Solutions segments), anticipated from its
restructuring programs, productivity improvement, cash sustainability, and
other initiatives; (h) 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 and investments in
hydropower projects in Brazil; (i) 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; (j) the outcome of contingencies, including
legal proceedings, government investigations, and environmental remediation;
(k) the business or financial condition of key customers, suppliers, and
business partners; (l) changes in tax rates or benefits; (m) adverse changes
in discount rates or investment returns on pension assets; and (n) the other
risk factors summarized in Alcoa’s Form 10-K for the year ended December 31,
2011, Form 10-Q for the quarter ended March 31, 2012, 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,
2011 2012 2012
Sales $ 6,585 $ 6,006 $ 5,963
Cost of goods sold
(exclusive of 5,247 5,098 5,154
expenses below)
Selling, general
administrative, 253 241 245
and other expenses
Research and
development 46 43 47
expenses
Provision for
depreciation, 375 369 363
depletion, and
amortization
Restructuring and 34 10 15
other charges
Interest expense 163 123 123
Other (income) (50 ) (16 ) 22
expenses, net
Total costs and 6,068 5,868 5,969
expenses
Income (loss) from
continuing 517 138 (6 )
operations before
income taxes
Provision for 136 39 13
income taxes
Income (loss) from
continuing 381 99 (19 )
operations
Loss from
discontinued (4 ) – –
operations
Net income (loss) 377 99 (19 )
Less: Net income
(loss)
attributable to 55 5 (17 )
noncontrolling
interests
NET INCOME (LOSS)
ATTRIBUTABLE TO $ 322 $ 94 $ (2 )
ALCOA
AMOUNTS
ATTRIBUTABLE TO
ALCOA COMMON
SHAREHOLDERS:
Income (loss) from
continuing $ 326 $ 94 $ (2 )
operations
Loss from
discontinued (4 ) – –
operations
Net income (loss) $ 322 $ 94 $ (2 )
EARNINGS PER SHARE
ATTRIBUTABLE TO
ALCOA COMMON
SHAREHOLDERS:
Basic:
Income (loss) from
continuing $ 0.31 $ 0.09 $ –
operations
Loss from
discontinued (0.01 ) – –
operations
Net income (loss) $ 0.30 $ 0.09 $ –
Diluted:
Income (loss) from
continuing $ 0.28 $ 0.09 $ –
operations
Loss from
discontinued – – –
operations
Net income (loss) $ 0.28 $ 0.09 $ –
Average number of
shares used to
compute:
Basic earnings per 1,063,850,843 1,065,810,615 1,066,763,022
common share
Diluted earnings 1,165,059,389 1,164,213,063 1,066,763,022
per common share
Shipments of
aluminum products 1,268,000 1,295,000 1,305,000
(metric tons)
Alcoa and subsidiaries
Statement of Consolidated Operations (unaudited), continued
(in millions, except per-share, share, and metric ton amounts)
Six months ended
June 30,
2011 2012
Sales $ 12,543 $ 11,969
Cost of goods sold (exclusive of 9,962 10,252
expenses below)
Selling, general administrative, and 498 486
other expenses
Research and development expenses 89 90
Provision for depreciation, depletion, 736 732
and amortization
Restructuring and other charges 40 25
Interest expense 274 246
Other (income) expenses, net (78 ) 6
Total costs and expenses 11,521 11,837
Income from continuing operations 1,022 132
before income taxes
Provision for income taxes 274 52
Income from continuing operations 748 80
Loss from discontinued operations (5 ) –
Net income 743 80
Less: Net income (loss) attributable 113 (12 )
to noncontrolling interests
NET INCOME ATTRIBUTABLE TO ALCOA $ 630 $ 92
AMOUNTS ATTRIBUTABLE TO ALCOA COMMON
SHAREHOLDERS:
Income from continuing operations $ 635 $ 92
Loss from discontinued operations (5 ) –
Net income $ 630 $ 92
EARNINGS PER SHARE ATTRIBUTABLE TO
ALCOA COMMON SHAREHOLDERS:
Basic:
Income from continuing operations $ 0.60 $ 0.09
Loss from discontinued operations (0.01 ) –
Net income $ 0.59 $ 0.09
Diluted:
Income from continuing operations $ 0.56 $ 0.08
Loss from discontinued operations (0.01 ) –
Net income $ 0.55 $ 0.08
Average number of shares used to
compute:
Basic earnings per common share 1,057,837,076 1,066,242,896
Diluted earnings per common share 1,158,709,043 1,075,454,724
Common stock outstanding at the end of 1,064,103,706 1,066,881,927
the period
Shipments of aluminum products (metric 2,480,000 2,600,000
tons)
Alcoa and subsidiaries
Consolidated Balance Sheet (unaudited)
(in millions)
December 31, June 30,
2011 (a) 2012
ASSETS
Current assets:
Cash and cash equivalents $ 1,939 $ 1,712
Receivables from customers, less allowances of $46 1,571 1,575
in 2011 and $42 in 2012
Other receivables 371 481
Inventories 2,899 3,051
Prepaid expenses and other current assets 933 948
Total current assets 7,713 7,767
Properties, plants, and equipment 37,608 37,219
Less: accumulated depreciation, depletion, and 18,326 18,483
amortization
Properties, plants, and equipment, net 19,282 18,736
Goodwill 5,157 5,141
Investments 1,626 1,775
Deferred income taxes 3,546 3,443
Other noncurrent assets 2,796 2,636
Total assets $ 40,120 $ 39,498
LIABILITIES
Current liabilities:
Short-term borrowings $ 62 $ 559
Commercial paper 224 318
Accounts payable, trade 2,692 2,633
Accrued compensation and retirement costs 985 942
Taxes, including income taxes 438 406
Other current liabilities 1,167 1,175
Long-term debt due within one year 445 118
Total current liabilities 6,013 6,151
Long-term debt, less amount due within one year 8,640 8,547
Accrued pension benefits 3,261 2,899
Accrued other postretirement benefits 2,583 2,536
Other noncurrent liabilities and deferred credits 2,428 2,451
Total liabilities 22,925 22,584
EQUITY
Alcoa shareholders’ equity:
Preferred stock 55 55
Common stock 1,178 1,178
Additional capital 7,561 7,538
Retained earnings 11,629 11,655
Treasury stock, at cost (3,952 ) (3,890 )
Accumulated other comprehensive loss (2,627 ) (2,878 )
Total Alcoa shareholders' equity 13,844 13,658
Noncontrolling interests 3,351 3,256
Total equity 17,195 16,914
Total liabilities and equity $ 40,120 $ 39,498
In June 2012, Alcoa reached an agreement to sell its Tapoco
Hydroelectric Project. As a result, the Consolidated Balance Sheet as of
(a) December 31, 2011 was revised to reflect the movement of the Tapoco
Hydroelectric Project’s assets to held for sale classification in the
second quarter of 2012. Assets held for sale are included in the Other
noncurrent assets line item.
Alcoa and subsidiaries
Statement of Consolidated Cash Flows (unaudited)
(in millions)
Six months ended
June 30,
2011 (b) 2012
CASH FROM OPERATIONS
Net income $ 743 $ 80
Adjustments to reconcile net income to cash from
operations:
Depreciation, depletion, and amortization 736 733
Deferred income taxes (42 ) (103 )
Equity income, net of dividends (27 ) (9 )
Restructuring and other charges 40 25
Net loss from investing activities – asset sales 1 1
Loss from discontinued operations 5 –
Stock-based compensation 45 39
Excess tax benefits from stock-based payment (6 ) (1 )
arrangements
Other 5 83
Changes in assets and liabilities, excluding effects
of acquisitions, divestitures, and
foreign currency translation adjustments:
(Increase) in receivables (438 ) (215 )
(Increase) in inventories (522 ) (188 )
(Increase) decrease in prepaid expenses and other (22 ) 13
current assets
Increase (decrease) in accounts payable, trade 196 (33 )
(Decrease) in accrued expenses (146 ) (75 )
Increase (decrease) in taxes, including income taxes 78 (9 )
Pension contributions (103 ) (352 )
(Increase) decrease in noncurrent assets (104 ) 74
Increase in noncurrent liabilities 129 242
(Increase) in net assets held for sale – (2 )
CASH PROVIDED FROM CONTINUING OPERATIONS 568 303
CASH USED FOR DISCONTINUED OPERATIONS (6 ) (2 )
CASH PROVIDED FROM OPERATIONS 562 301
FINANCING ACTIVITIES
Net change in short-term borrowings (original (28 ) 44
maturities of three months or less)
Net change in commercial paper – 94
Additions to debt (original maturities greater than 1,254 735
three months)
Debt issuance costs (7 ) (3 )
Payments on debt (original maturities greater than (1,095 ) (659 )
three months)
Proceeds from exercise of employee stock options 34 10
Excess tax benefits from stock-based payment 6 1
arrangements
Dividends paid to shareholders (65 ) (66 )
Distributions to noncontrolling interests (187 ) (70 )
Contributions from noncontrolling interests 128 110
CASH PROVIDED FROM FINANCING ACTIVITIES 40 196
INVESTING ACTIVITIES
Capital expenditures (476 ) (561 )
Acquisitions, net of cash acquired (240 ) –
Proceeds from the sale of assets and businesses 1 13
Additions to investments (199 ) (187 )
Sales of investments 5 11
Other 7 20
CASH USED FOR INVESTING ACTIVITIES (902 ) (704 )
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH 17 (20 )
EQUIVALENTS
Net change in cash and cash equivalents (283 ) (227 )
Cash and cash equivalents at beginning of year 1,543 1,939
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,260 $ 1,712
The Statement of Consolidated Cash Flows for the six months ended June
30, 2011 was revised to reflect the movement of the Global Foil business
(one remaining plant located in Brazil) from held for sale
(b) classification in the fourth quarter of 2011. Management is no longer
committed to a plan to sell the location and has refocused their efforts
to drive higher profitability and is evaluating expanding the
functionality of the plant so that it can manufacture certain products
aimed at capturing new growth in Brazil.
Alcoa and subsidiaries
Segment Information (unaudited)
(dollars in millions, except realized prices; production and shipments in thousands of metric tons
[kmt])
1Q11 2Q11 3Q11 4Q11 2011 1Q12 2Q12
Alumina:
Alumina
production 4,024 4,144 4,140 4,178 16,486 4,153 4,033
(kmt)
Third-party
alumina 2,206 2,378 2,256 2,378 9,218 2,293 2,194
shipments
(kmt)
Third-party $ 810 $ 926 $ 879 $ 847 $ 3,462 $ 775 $ 750
sales
Intersegment $ 633 $ 723 $ 751 $ 620 $ 2,727 $ 617 $ 576
sales
Equity income $ 3 $ 22 $ 2 $ (2 ) $ 25 $ 1 $ 1
(loss)
Depreciation,
depletion, and $ 103 $ 112 $ 117 $ 112 $ 444 $ 114 $ 114
amortization
Income taxes $ 44 $ 60 $ 42 $ 33 $ 179 $ (1 ) $ (6 )
After-tax
operating $ 142 $ 186 $ 154 $ 125 $ 607 $ 35 $ 23
income (ATOI)
Primary
Metals:
Aluminum
production 904 945 964 962 3,775 951 941
(kmt)
Third-party
aluminum 698 724 754 805 2,981 771 749
shipments
(kmt)
Alcoa’s
average
realized price $ 2,682 $ 2,830 $ 2,689 $ 2,374 $ 2,636 $ 2,433 $ 2,329
per metric ton
of aluminum
Third-party $ 1,980 $ 2,145 $ 2,124 $ 1,991 $ 8,240 $ 1,944 $ 1,804
sales
Intersegment $ 839 $ 922 $ 798 $ 633 $ 3,192 $ 761 $ 782
sales
Equity income $ 1 $ (1 ) $ (4 ) $ (3 ) $ (7 ) $ (2 ) $ (9 )
(loss)
Depreciation,
depletion, and $ 141 $ 142 $ 137 $ 136 $ 556 $ 135 $ 133
amortization
Income taxes $ 53 $ 55 $ 21 $ (37 ) $ 92 $ (13 ) $ (19 )
ATOI $ 202 $ 201 $ 110 $ (32 ) $ 481 $ 10 $ (3 )
Global Rolled
Products:
Third-party
aluminum 446 473 454 407 1,780 452 484
shipments
(kmt)
Third-party $ 1,892 $ 2,085 $ 1,974 $ 1,691 $ 7,642 $ 1,845 $ 1,913
sales
Intersegment $ 69 $ 62 $ 48 $ 39 $ 218 $ 44 $ 44
sales
Equity loss $ – $ – $ – $ (3 ) $ (3 ) $ (1 ) $ (2 )
Depreciation,
depletion, and $ 58 $ 60 $ 61 $ 58 $ 237 $ 57 $ 57
amortization
Income taxes $ 33 $ 35 $ 26 $ 10 $ 104 $ 49 $ 43
ATOI $ 81 $ 99 $ 60 $ 26 $ 266 $ 96 $ 95
Engineered
Products and
Solutions:
Third-party
aluminum 55 57 56 53 221 58 59
shipments
(kmt)
Third-party $ 1,247 $ 1,370 $ 1,373 $ 1,355 $ 5,345 $ 1,390 $ 1,420
sales
Equity income $ 1 $ – $ – $ – $ 1 $ – $ –
Depreciation,
depletion, and $ 38 $ 41 $ 40 $ 39 $ 158 $ 40 $ 39
amortization
Income taxes $ 62 $ 72 $ 67 $ 59 $ 260 $ 72 $ 77
ATOI $ 130 $ 149 $ 138 $ 122 $ 539 $ 155 $ 160
Reconciliation
of ATOI to
consolidated
net income
(loss)
attributable
to Alcoa:
Total segment $ 555 $ 635 $ 462 $ 241 $ 1,893 $ 296 $ 275
ATOI
Unallocated
amounts (net
of tax):
Impact of LIFO (24 ) (27 ) 2 11 (38 ) – 19
Interest (72 ) (106 ) (81 ) (81 ) (340 ) (80 ) (80 )
expense
Noncontrolling (58 ) (55 ) (53 ) (28 ) (194 ) (5 ) 17
interests
Corporate (67 ) (76 ) (76 ) (71 ) (290 ) (64 ) (69 )
expense
Restructuring
and other (6 ) (22 ) (7 ) (161 ) (196 ) (7 ) (10 )
charges
Discontinued (1 ) (4 ) – 2 (3 ) – –
operations
Other (19 ) (23 ) (75 ) (104 ) (221 ) (46 ) (154 )
Consolidated
net income
(loss) $ 308 $ 322 $ 172 $ (191 ) $ 611 $ 94 $ (2 )
attributable
to Alcoa
The difference between certain segment totals and consolidated amounts is in
Corporate.
Alcoa and subsidiaries
Calculation of Financial Measures (unaudited)
(dollars in millions)
Quarter ended
Adjusted EBITDA Margin June 30, March 31, June 30,
2011 2012 2012
Net income attributable to Alcoa $ 322 $ 94 $ (2 )
Add:
Net income (loss) attributable to 55 5 (17 )
noncontrolling interests
Loss from discontinued operations 4 – –
Provision for income taxes 136 39 13
Other (income) expenses, net (50 ) (16 ) 22
Interest expense 163 123 123
Restructuring and other charges 34 10 15
Provision for depreciation, depletion, and 375 369 363
amortization
Adjusted EBITDA $ 1,039 $ 624 $ 517
Sales $ 6,585 $ 6,006 $ 5,963
Adjusted EBITDA Margin 15.8 % 10.4 % 8.7 %
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.
Quarter ended
Free Cash Flow June 30, March 31, June 30,
2011 2012 2012
Cash from operations $ 798 $ (236 ) $ 537
Capital expenditures (272 ) (270 ) (291 )
Free cash flow $ 526 $ (506 ) $ 246
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
(dollars in millions, except per-share amounts)
Quarter ended
June 30,
Adjusted Income 2012
(Loss) Diluted
EPS
Income
Net loss attributable to Alcoa $ (2 ) $ –
Loss from discontinued operations –
Loss from continuing operations attributable to Alcoa (2 ) –
Restructuring and other charges 10
Discrete tax items* 10
Other special items** 43
Income from continuing operations attributable to Alcoa – as $ 61 0.06
adjusted
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 Loss from continuing operations attributable to Alcoa
determined under GAAP as well as Income from continuing operations
attributable to Alcoa – as adjusted.
Discrete tax items include a charge for the true-up of a
* deferred tax liability related to depletable assets in Jamaica
($8) and a net charge for other miscellaneous items ($2).
Other special items include a litigation reserve ($18), uninsured losses
related to fire damage to the cast house at the Massena, NY location ($12),
** and a net increase in the environmental reserve related to the Grasse River
remediation in Massena, NY and remediation at two former locations, East
St. Louis, IL and Sherwin, TX ($13).
Quarter ended
Days Working Capital June 30, March 31, June 30,
2011 2012 2012
Receivables from customers, less allowances $ 2,114 $ 1,526 $ 1,575
Add: Deferred purchase price receivable^* – 254 141
Receivables from customers, less allowances, 2,114 1,780 1,716
as adjusted
Add: Inventories 3,227 3,097 3,051
Less: Accounts payable, trade 2,614 2,734 2,633
Working Capital $ 2,727 $ 2,143 $ 2,134
Sales $ 6,585 $ 6,006 $ 5,963
Days Working Capital 38 32 33
Days Working Capital = Working Capital divided by (Sales/number of days in the
quarter).
The deferred purchase price receivable relates to an arrangement to sell
* certain customer receivables to a financial institution on a recurring
basis. Alcoa is adding back this receivable for the purposes of the Days
Working Capital calculation.
Alcoa and subsidiaries
Calculation of Financial Measures (unaudited), continued
(dollars in millions, except per metric ton amounts)
Engineered
Segment Alumina Primary Metals Global Rolled Products Products
Measures and
Solutions
Quarter ended
Adjusted March 31, June 30, March June June March June June 30,
EBITDA 31, 30, 30, 31, 30,
2012 2012 2012
2012 2012 2011 2012 2012
After-tax
operating $ 35 $ 23 $ 10 $ (3 ) $ 99 $ 96 $ 95 $ 160
income (ATOI)
Add:
Depreciation,
depletion, 114 114 135 133 60 57 57 39
and
amortization
Equity (1 ) (1 ) 2 9 – 1 2 –
(income) loss
Income taxes (1 ) (6 ) (13 ) (19 ) 35 49 43 77
Other – (3 ) – (1 ) (1 ) – – –
Adjusted $ 147 $ 127 $ 134 $ 119 $ 193 $ 203 $ 197 $ 276
EBITDA
Production
(thousand
metric tons)
(kmt)
4,153 4,033 951 941
Adjusted
EBITDA /
Production ($
per metric
ton)
$ 35 $ 31 $ 141 $ 126
Total
shipments
(thousand
metric tons)
(kmt)
491 472 505
Adjusted
EBITDA/Total
shipments ($
per metric
ton)
$ 393 $ 430 $ 390
Total sales $ 1,420
Adjusted
EBITDA Margin
19 %
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.
Alcoa
Investor Contact
Kelly Pasterick, 212-836-2674
or
Media Contact
Libby Archell, 212-836-2719
Contact:
Alcoa
Sponsored Links
Advertisement
Advertisements
Sponsored Links
Advertisement
Rate this Page