Annua Report Financial and Operating Highlights Dollars in Millions Except Per-Share Amounts

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Annua Report Financial and Operating Highlights Dollars in Millions Except Per-Share Amounts 1\\\l\l\\l\\ll\\l\\l\ll\\\\ll\\\ll\l\\\l\\11\ 12026001 AD 201 Annua Report Financial and Operating Highlights dollars in millions except per-share amounts 2011 2010 2009 Sales $24951 $21013 $18439 Income Loss from continuing operations 614 262 985 Per common share data Basic Income Loss from continuing operations 0.58 0.25 1.06 Net income Ioss 0.51 0.25 1.23 Diluted Income Loss from continuing operations 0.55 0.25 1.06 Net income loss 0.55 0.24 1.23 Dividends paid 0.12 0.12 0.26 Total assets 40120 39293 38472 Capital expenditures 1281 1015 1617 Cash provided from operations 2193 2261 1365 Book value per sharea 12.96 13.26 12.70 Common stock outstanding end of year 000 1064412 1022026 974379 Estimated number of shareholders 319000 325000 301000 Book value ohare Total shareholders minuo Preferred divided Common stock eod of per equity stock by outstandiog year These estimates are based on the record date of the annual shareholders held in the thu listed include meeting year following year and registered shareholders and beneficial owners holding stuck through baoks brokers or other nominees 2011 Sales $25.0 Billion Alcoa at Glance Alcoa is the worlds leading producer of primary aluminum and fabricated aluminum as well as the worlds largest miner of bauxite and refiner of alumina In addition to inventing the modern-day aluminum industry Alcoa innovation has been behind milestones in the maior aerospace automotive packaging building and construction commercial transportation consumer electronics and industrial markets the 120 over pant years the solutions Alcoa markets flat-rolled Among are products hard alloy and as well extrusions forgingo as Alcoawheels fastening systems and iovestment precision castings and building nystemo in addition to ito expertise in other light metals ouch as titanium and nickel-based ouperalloys in of Alcoas and the sustainability an integral part operating practices product design and engineering it provides to customers By Segment By Geographic Area Alcoa has been member of the Dow Jones sustainability Index for 10 $8.2 Primary Metals 49h United States consecutive and years approximately 75 percent of all of the aluminum ever $7.6 Flat-Rolled Products 27h Europe produced since 1888 is still inactive use today $5.4 Products Engineered 17% Pacific Alcoa employs approximately 61000 people in 31 countries acruss the world and Solutions 7% Other Americas In 201 1Alcoa and Alcoa Foundation contributed more than $38 million to $3.5 Alumina nonprofit organizations throughout the world to enhance communities improve the environment and tomorrows leaders for in $0.3 Other prepare careers science mathematico technology engineering and manufacturing record 56 percent of Alcoa employees took part in the companys annual Month of Service and contributed 900000 hours to community service year-round Learn more by scanning OR codes More information can be found at www.alcua.com found in this report Number of Open your mobile phones browser Employees go to get.beefagg.com download the free launch the click app app 2011 2010 2009 scan center your camera on the U.S 26.000 24000 23000 coded found in this images report Europe 17.000 17000 19000 and click to launch the content DtherAmericas 11.000 11000 10000 .4r Pacific 7000 7000 7000 61000 59000 59000 On the Cover left bottom Top to right Teens de Ia Alcoa Tvchnical Center Becancoer Smelter Vega Pittsburgh Pennsylvania IABII Qsebec Canada Abner Wilsov Goes Juruti Mine Paid Brazil and teeings 737 MAJ Kaus Keinfed Chairman of the Board and Chief Executive Officer in 2011 the bad news was that for the bad news first For Alcoa and bad news always ask Whenever someone tells me have good news the world As Europe showed substantial became for the uncertainty in economy aluminum one of the worlds most liquid commodity assets proxy in from Metal dropped dramatically May forward of aluminum on the London Exchange LME weakness in the second half of the year and the price of Alcoa and our companies metric ton December so too did the stock performance peer $2800 to roughly $2000 per by was had on so people For you out shareholders parbcuarly that Alcoas share price drop many We are acutely aware of the dramatic impact all Dow Jones in total shareholder return among risen to be one of the top three performers that earlier in the Alcoa had disappointing given year the work were that external factors overshadowed good they and employees it was frustrating Industrial Average DJIA companies For our managers for the events of 2011 for Alcoa and and hard on the implications of the unusual floor and with our customers have reflected long doing on the shop with aluminum industry Let me share my thoughts you that in an ironic Alcoa The good news is way sneer AiumLeum Peers validated the in that volatile year actually performance Alcoa of and the strong Meter ais index fundamental strength our Company seeeesere 5P 500 LME and for aluminum Even as the prospects for Alcoa demand for aluminum remained price dropped physical worldwide 10 overthe course strong and grew by percent alhtime of 2011 while regional premiums approached to the economic highs Because of how we responded with Cash Sustainability crisis of 20DB2009 our with balance sheet Program we began 2011 strong cash Our rise as top performer in and solid position lb 2011 and the fact that we the DJIA in the beginning of better than our and alumina producing companies with market ended the year with our stock performing Aluminum peers include aluminum traded shares Aluminum olaf least $3 billion as of 2610 and some publicly aluminum reinforced Alcoas resilience in coping capitalization peers Alumina Limited United RUSAL Norsk l-lydro ASA Corporation of China Limited Company fundamentals with adversity and our strong investment Nanshun Aluminium Co Ltd National Aluminum Company Limited and Shandong 2011 Finanda Performance external forces in the markets in 2011 We didnt allow is for Alcoas operating performance The theme of this report Alcoa Wont Wait appropriate Productivity volume and price what do best making money by producing quality products forces that we couldnt control to distract us from doing we in and drove 19 percent increase revenues in over 2010 strong organic growth than $1 billion resulted doubling profits mix improvements of more of 2010 more cash and less net debt than at the end us to end 2011 with significantly and capital expenditures helped reductions in working capital financial measures of certain non-GASP th itter for rexancdia ions Sea calculaiisn of Firenciel Measures fofowing amounts in this letter EBITDA free cash flow und net debt presented adjusted income adjusted Alcoa 2011 Annual Report Balance Sheet Shows Strong Liquidity and Financial Positions Millions Sustaining Capital Millions Growth Capita Millions 1246 257 2000 2009 2010 2011 2008 2080 2010 2811 2008 2080 2010 2011 Gross Debt Millions Debt-to-Dsp 2000 2000 2010 2011 2000 2800 2010 2011 Every one ot our tour business delivered for Alcoa segments Flat-Rol ed Products and Engineered Products and Solutions each achieved historic in highs profitability and drove strong organic growth Adjusted EB IDA/MT -- LME ii 2011 In our upstream operations the Alumina bumness continued to return to historic high profit 2641 2571 2522 leve and our Primary Metals business where the LME price drop and rise in raw materials cost had the greatest impact finished the about 20 below the 10 1.401433ii year percent year average profitability For each of our three operating groups 2011 also created base 62 68 strong to meet our longer term 84 48 47 growth goals 28 2001 2002 2003 2004 2005 2006 2007 2000 2009 2010 2011 Goba Products Primary GPP In our busness have been upstream we driving operational efficiences and aggressively managing costs to drive our smelters energy and refineries down Adjusted EBITDA/MT LYE the cost curve and For mprove our cash flow in GPO example 2011 reduced Days 2641 Working 2570 2522 2300 four Capoal DWC by days and reduced its total working capital by $130 million or 12 percent Our long-term objective is to improve our from the 30th 1433 refinery position percentile in 2010 to 784 the 23rd percentile 2015 and our smelter 626 position from the 51st in 2010 to the 41st 466 percentile 321 336 418 398 392 328 381 percentile in 2015 Given the long-term nature ol this busness these 2015 targets cannot be reached overreght and investment restructuring programs are in to achieve them place 2001 2002 2003 2004 2405 2006 202008 2009 2011 FIatRo led Products In cur midstream FRP business we achieved $1.4 billion organic Adjusted EBjTDAJMT in growth 2011 which is 55 of our $2.5 billion 2013 percent incremental revenue growth target 3even percent increase in volume with shifts in along the Groups portfolio towards 327 higher margin 290 314 273 216 253 249 products drove FRPs historic and 226 291 profit performance record adjusted EBITDA/MT Growth projects in Russia China and 119 Davenport Iowa are capturing global opportunities that will contribute to our iot top- me growth while achieving higher profitability 2001 2002 2003 2004 2005 2006 2007 2000 2009 2010 2811 Engmeered Products and Solutions Our downstream business EPS achieved 44 percent of its 2013 Adjusted EBITDA Mar9ln revenue increase target of $1.6 billion with approximately $700 million in organic growth 18% in the first year Every downstream business unit Fasteners Forgings Power and Propulsion 16 13% 12% 12% 13% and lto Wheels Building and Construccion contributed to that 11% success hf driving
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