Howmet Aerospace Inc. — Earnings Release 2000

Jan 10, 2000

SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): January 10, 2000 ALCOA INC. (Exact name of registrant as specified in its charter) Pennsylvania 1-3610 25-0317820 (State or other jurisdiction (Commission File (I.R.S. Employer of incorporation) Number) Identification No.) 201 Isabella Street, Pittsburgh, Pennsylvania 15212-5858 (Address of principal executive offices) (Zip code) Office of Investor Relations 412-553-3042 Office of the Secretary 412-553-4707 (Registrant's telephone number including area code) Item 5. Other Events. The Registrant issued the following press releases on January 10, 2000: Alcoa's Earnings Surge 24% Year-to-Year, Exceed $1 Billion for the First Time PITTSBURGH, January 10, 2000 -- Alcoa announced today that for the first time in its 110-year history, the company had over a billion-dollars in earnings for the year. For the year 1999, Alcoa's net income was $1.054 billion, or $2.82 per diluted share, up 24% from $853 million, or $2.42 per share for 1998. "Alcoa's excellent performance in 1999 reflects the growing success of Alcoans worldwide in aligning our processes and systems with the Alcoa Business System," said CEO Alain Belda. "Our processes are more efficient, with improved cycle time, less waste, and reduced inventories as we strive to produce what the customer wants, when it's wanted."

Net income for the 1999 fourth quarter was $333.9 million, or 89 cents per diluted share, up 53% from $218.3 million, or 59 cents per share, for the 1998 fourth quarter. Revenues for the 1999 fourth quarter were $4.3 billion, compared with $4.2 billion in the year ago quarter. For the full year 1999, revenues were a record $16.3 billion, compared with $15.3 billion for 1998. "We continued to make progress on our $1.1 billion cost-reduction initiative," noted CEO Belda. At the end of 1999, the company had achieved $728 million in annualized cost savings towards its $1.1 billion target. Announced in mid-1998, this aggressive target is to be achieved by January 1, 2001. The quarterly run rate at the end of the 1999 fourth quarter was $182 million, compared with $159 million for the 1999 third quarter. Results for the 1999 fourth quarter were affected positively by $31 million, or 8 cents per share, related to LIFO inventory reductions which are tangible results coming from the Alcoa Production System, and a decrease in Alcoa's effective tax rate from 32% to 29.9% for the year as a result of a decrease in the Australian income tax rate. The quarter was affected negatively by an uptick in administrative costs which is substantially attributable to higher acquisition expenses and incentive accruals for exceptional performance. Return on shareholders' equity was 17.2% for 1999 and 16.3% for 1998. Founded in 1888, Alcoa is the world's leading producer of aluminum and alumina and a major participant in all segments of the industry: mining, refining, smelting, fabricating and recycling. Alcoa serves customers worldwide in the packaging, automotive, aerospace, construction and other markets with a great variety of fabricated and finished products. The company has 250 operating locations in 31 countries. Alcoa Inc. (NYSE: AA) Financial and operating data for Alcoa and its subsidiaries follow.

Alcoa Announces 33% Increase in Base Dividend, 2-for-1 Stock Split PITTSBURGH, January 10, 2000 - Alcoa today announced that its Board of Directors approved a base quarterly dividend increase of 33.3%, to 25 cents per common share from 18.75 cents per share. For a full year, base dividends will now total $1.00 compared with 75 cents before the increase. The company also announced that it will maintain its variable dividend, linked directly to financial performance. The variable dividend is 30% of the company's annual earnings when these earnings exceed a threshold. The threshold is changed to $3.00 per basic share from $2.25 per share. The variable dividend is paid in the following year in four equal quarterly installments with the base quarterly dividends. Under the new policy, the Board declared a quarterly common stock dividend of 25 cents per share that is payable on February 25, 2000, to shareholders of record at the close of business on February 4, 2000. The 2000 dividend, based on the new formula, is a 24% increase from the 1999 dividend payment. The directors also voted a regular dividend of 93.75 cents per share on Alcoa's $3.75 cumulative preferred stock, payable April 1, 2000 to shareholders of record on March 10, 2000. 2-for-1 Stock Split The Board declared a two-for-one split of Alcoa's common stock. The stock split is subject to approval of Alcoa share- holders who must approve an amendment to the company's articles to increase the authorized shares of common stock at Alcoa's annual meeting on May 12, 2000. Shareholders of record on May 26, 2000, will receive an additional common share for each share held, which will be distributed on June 9, 2000. Commitment to Stock Repurchase Program Alcoa restated its commitment to its previously authorized share repurchase program which it announced last year. Because of restrictions imposed by U.S. securities laws, the company has not repurchased its shares since October and is precluded from doing so until after the Reynolds shareholder meeting scheduled for February 11, 2000. It is Alcoa's intention to restart the stock repurchase program at that time. In addition to the foregoing press releases, Alcoa reiterated that it is targeting, and plans to achieve, cost and efficiency savings of approximately $200 million (pre-tax) by the end of the second year after the closing of the stock-for-stock merger transaction with Reynolds Metals Company. The projected cost synergies, approximately half of which are anticipated for the first year after closing, will be in addition to Alcoa's ongoing $1.1 billion (pre-tax) cost-reduction program. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the following authorized officer. ALCOA INC. By /s/Richard B. Kelson Date: January 10, 2000 Richard B. Kelson Executive Vice President and Chief Financial Officer