SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
/ x / ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 /FEE REQUIRED/
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 33-23092
ALCOA INTERNATIONAL HOLDINGS COMPANY
(Exact name of registrant as specified in its charter)
Delaware 25-1563111
(State of incorporation) (I.R.S. Employer Identification No.)
5 Burlington Square, Fourth Floor, Burlington, Vermont 05402-1491
(Address of principal executive offices) (Zip Code)
Registrant's telephone number--802-658-2726
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months,
and (2) has been subject to such filing requirements for the past
90 days. Yes / x / No .
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / x /
As of March 15, 1994 there were 2,500,000 shares of voting
preferred stock, par value $100.00, of the Registrant
outstanding. The aggregate market value of such shares, other
than shares held by persons who may be deemed affiliates of the
Registrant, was approximately $250 million.
Documents incorporated by reference: None
ALCOA INTERNATIONAL HOLDINGS COMPANY
Unless the context otherwise requires, the "Company" or
"AIHC" means Alcoa International Holdings Company and all
subsidiaries consolidated for the purposes of presenting its
financial statements. "Alcoa" means Aluminum Company of America
and its consolidated subsidiaries other than the Company. "AofA"
means Alcoa of Australia Limited and all subsidiaries consolidated
for the purposes of presenting its financial statements.
PART I
Item 1. Business.
AIHC, formed in 1987 under the laws of the State of Delaware,
is a holding company headquartered in Burlington, Vermont. Its
principal operating subsidiaries mine bauxite; produce alumina,
alumina-based chemicals, primary aluminum, gold and fabricated
aluminum products outside the United States (U.S.); and sell these
products in world markets. Other subsidiaries of the Company
distribute and sell a broad range of alumina and aluminum products
in markets outside the U.S. and provide debt financing to related
parties.
AIHC's principal subsidiary, AofA, accounted for approximately
63% of consolidated revenues for 1993. AofA produces alumina,
alumina-based chemical products and primary aluminum ingot, and
fabricates aluminum products in Australia. AofA also recovers gold
from its mining leases. AofA sells these products to customers
worldwide. More than half of AofA's 1993 revenues were derived from
alumina, and the balance was derived principally from primary
aluminum, aluminum flat rolled products and gold.
AIHC holds a 51% interest in AofA. Western Mining Corporation
Holdings Limited (Western Mining), a leading Australian mining
company, owns approximately 48% of the capital stock of AofA. The
Company and Western Mining are parties to a Shareholders' Agreement
under which each has given to the other certain rights of first
refusal with respect to any future sale or other transfer of their
respective ownership interests in AofA.
AIHC provides strategic management to its operating, sales and
finance subsidiaries, including management of the subsidiaries'
relationships with partners and third party investors. It also
coordinates or arranges for technical, marketing, operating and
financial support as needed or required by the subsidiaries.
Operations management for manufacturing facilities is provided
locally within each subsidiary.
The Company's operations are divided into three segments:
Alumina, Aluminum, and Sales and Distribution. Revenues for each
segment are listed below and include sales and operating revenues
received from Alcoa. For other segment information, see Note I
to the consolidated financial statements of AIHC.
1993 Sales and
Segment Operating Revenues As a %
($ in millions) of Total
Alumina $1007.4 39%
Aluminum 1026.7 40
Sales and Distribution 536.1 21
------- ----
$2570.2 100%
======= ====
Alumina Segment
The Alumina segment includes mining bauxite, refining it into
smelter-grade alumina, producing alumina-based chemicals and
selling of alumina and alumina chemical products by AofA. The
segment also includes the mining, refining and selling of gold.
Alumina is extracted from bauxite in a chemical refining process
and is the principal raw material in the electro-chemical process
in which aluminum is produced. Most alumina is designated "smelter-
grade alumina" and is used to make aluminum.
Alumina produced by AofA generally is shipped either to AofA's
smelters at Point Henry and Portland, Australia, or to overseas
customers, principally in North America, the Middle East, Europe
and the Pacific Rim. Exports, including those to Alcoa, accounted
for more than 90% of AofA's total alumina shipments to customers
in 1993.
AofA has alumina supply contracts with several of its overseas
customers. The largest contract is for more than one million
metric tons (mt) of alumina per year. AofA also has a long-term
alumina supply contract with Alcoa under which Alcoa has the option
to purchase up to 800,000 mt of alumina per year.
AofA is the largest and one of the lowest cost producers of
alumina in the world. Its three alumina refineries, located in
the State of Western Australia, have an aggregate annual rated
capacity of approximately 6.1 million mt. The refineries have
operated at or above rated capacity over the past 5 years.
The alumina operations of AofA include the following:
Bauxite mining operations in the Darling Range located along
Australia's western coast, south of Perth, supply AofA's three
alumina refineries in Western Australia. Mined bauxite is
transported by rail to the refinery at Kwinana, or by overland
conveyor to the Pinjarra and Wagerup refineries.
An alumina refinery at Kwinana has an annual rated capacity of
approximately 1.7 million mt. The plant has its own shipping
facilities.
An alumina refinery at Pinjarra has an annual rated capacity of
approximately 2.9 million mt and is one of the world's largest
alumina refineries.
An alumina refinery at Wagerup has an annual rated capacity
of more than 1.5 million mt. The site can presently accommodate
a refinery with a total annual capacity of 2.0 million mt.
A storage and loading facility located at Bunbury Harbor near
Wagerup handles most shipping for the Pinjarra and Wagerup
refineries. Some Pinjarra production is shipped through the
shipping facilities at Kwinana.
AofA's rights to operate its bauxite mining and alumina
refining operations in Western Australia are established under
agreements with the State of Western Australia that are ratified
by the Parliament of Western Australia. The bauxite mineral
leases expire in 2003. Renewal options allow AofA to extend the
leases until 2045. Bauxite reserves held by AofA contain bauxite
sufficient to supply its requirements, based on current
production rates and refinery capacity, at least through the
expiration date of the leases. A 25-year mining plan,
established in 1986 and submitted to the State government,
addresses the broad direction and sequence of mining AofA's
bauxite reserves, taking into account social, environmental and
economic factors.
Alumina refining is energy intensive and AofA's refineries
use natural gas as their energy source. Nearly all of the
natural gas requirements for the refineries are supplied by the
State Energy Commission of Western Australia under a contract
that expires in 2005. AofA is required to purchase a minimum of
between 85% to 89% of its daily requirements as defined in the
contract. If alumina production were curtailed to the extent
that AofA could not take the minimum levels, gas quantities paid
for but not taken could be held in reserve and taken later. The
pricing mechanisms under the contract are designed to ensure that
natural gas remains competitive with alternative fuels.
Facilities to recover gold from AofA's mining leases were
constructed in 1988, and refined gold was first poured late that
year. AofA produced approximately 137,000 fine ounces of gold in
1993. Production has been declining since 1990, and the gold
deposit is expected to be depleted by 1997.
AofA also has an alumina chemicals business. Small
quantities of bulk alumina hydrate are currently produced at the
Kwinana refinery and shipped for distribution to the Pacific Rim
markets where it is principally used in water treatment filter
applications.
In 1993 the Company and AofA formed ACAP Australia Pty. Ltd.
(ACAP Australia) to market alumina-based and other chemicals in
Asia and other regional chemical markets. ACAP Australia
purchased a minority equity interest in Australian Fused
Materials, Ltd. (AFM) in 1993. AFM manufactures and markets
fused alumina as well as other chemicals for sale in Australian,
Asian and other regional markets. Fused alumina is used in the
manufacture of refractories.
In 1993 the Company and The Associated Cement Companies Ltd.
of Bombay, India formed a joint venture to import, process and
market tabular alumina and alumina-based chemicals for the
refractory and ceramic industries in India. The venture plans to
build a processing plant in Falta, West Bengal which is scheduled
for completion in 1994.
Aluminum Segment
The Aluminum segment includes the production and sale of
primary aluminum and fabricated aluminum products. AofA produces
primary aluminum and aluminum rigid container sheet (RCS). Alcoa-
Kofem Kft. (A-K) and subsidiaries of Alcoa Nederland Holding B.V.
(ANH) produce fabricated aluminum products. Although not
included in the financial results of this segment, Norsk Alcoa
A/S (Norsk Alcoa) derives equity earnings from its interest in a
Norwegian aluminum smelting partnership.
Australia. AofA operates the following facilities in the
State of Victoria in eastern Australia:
An aluminum smelter at Point Henry, near Geelong, has an
annual capacity of 180,000 mt. In early 1994, AofA announced a
reduction of 25,000 mt of production at its Point Henry smelter.
See "Competition" below.
A 150 megawatt steam electric generating station at Anglesea
supplies over 40% of the power required for the smelter at Point
Henry. Fuel for the power plant is brown coal from AofA's
deposits at Anglesea, which will last well past the year 2000 at
current usage levels.
An aluminum fabricating plant at Point Henry has the annual
capacity to produce 80,000 mt of aluminum sheet products. As
part of the strategy to focus on products where AofA has a
competitive advantage, the Point Henry rolling mill produces only
RCS for beverage can makers in Australia and the Pacific Rim.
Approximately 50% of the sheet products produced at Point Henry
are exported to Pacific Rim countries.
An aluminum smelter at Portland, approximately 150 miles west
of Point Henry, has an annual rated capacity of 320,000 mt. The
site can accommodate additional smelting capacity.
The Portland smelter is a joint venture currently owned 45%
by AofA, 25% by the State of Victoria, and 10% each by First
National Resource Trust (FNRT) in Australia, China International
Trust and Investment Corporation and Marubeni Aluminium Australia
Pty., Ltd. (Portland Smelter Participants). A wholly owned
subsidiary of AofA manages the operations of the Portland smelter
on behalf of the joint venture. Each participant is required to
contribute to the cost of operations and construction in
proportion to its interest in the joint venture, and each
participant is entitled to its proportionate share of the
smelter's output. AofA's share of Portland's production is sold
in ingot form in markets outside of Australia.
In early 1994, the joint venture smelter in Portland
announced a reduction of 26,000 mt of produciton. See
"Competition" below.
Electricity for the Portland smelter is purchased from the
State Electricity Commission of Victoria (SECV)under an agreement
which expires in 2016. The tariff applicable under the agreement
has a base component which reflects the cost of power generation
and transmission and a flexible or adjustable component which
would provide for adjustments to the base tariff rate based on
fluctuations in the market price for aluminum. The agreement
provides for a discount for interruptibility and a demand charge
equal to about two-thirds of the total tariff which may be
payable whether or not energy is taken.
Electricity not otherwise produced by the Anglesea generating
station and needed by the Point Henry smelter is available under
a contract with the SECV, similar to the Portland power
arrangement, that expires in 2014 at rates that change with the
world market price for aluminum. The contract includes a standby
demand charge for the purchase of electricity for periods when
the Anglesea generating station is not operating. An additional
energy charge is payable when this power is actually used.
The State Government of Victoria has announced its desire to
renegotiate the power contracts between AofA, the Portland
Smelter Participants and the SECV. AofA and the Portland Smelter
Participants have informed the State Government of Victoria that
they are willing to discuss ways to improve the operational
aspects of the power contracts.
The Netherlands. The Company owns 100% of ANH. Subsidiaries
of ANH produce aluminum sheet, extrusions and other products.
The principal subsidiary, Alcoa Nederland B.V. (ANL), produces
aluminum fabricated and semi-fabricated products for European
markets. ANL's manufacturing facilities, located in Drunen, The
Netherlands, have the capacity to produce approximately 35,000 mt
of sheet and 22,000 mt of extrusions annually. ANL also
manufactures innovative aluminum and other products such as
professional greenhouses, including interior logistical systems,
mushroom racks, lighting poles and balcony systems. ANL and
other ANH subsidiaries produce office interior wall systems,
aluminum louvers, products for the evacuation of industrial and
household gases and other building components. These products
are sold mainly in Europe, with occasional exports to the U.S.
and the Middle East.
In early 1993 ANH acquired a 100% interest in Compri-
Aluminium B.V. (Compri). Compri manufactures, sells and installs
aluminum and steel building products in Belgium and The
Netherlands.
Norway. Norsk Alcoa A/S is a 50% partner with Elkem A/S
(Elkem), a major Norwegian metals producer, in a partnership
known as Elkem Aluminium ANS (EA). Elkem is the managing partner
of EA.
EA owns a 120,000 mt smelter at Mosjoen, Norway and an
80,000 mt smelter at Lista, Norway.
Alcoa has agreed with EA to supply, directly or through AofA,
approximately 230,000 mt of alumina annually to the EA smelters
for a seven year period that began January 1, 1991. Price is
determined by a formula which has a fixed component and a London
Metal Exchange (LME) based component. The final terms of this
alumina arrangement are negotiated between Alcoa and the manager
of the partnership. The manager also decides upon expansion of
EA's facilities in consultation with Norsk Alcoa. If Norsk Alcoa
elects not to participate in a proposed expansion, the expansion
may be undertaken unilaterally by Elkem, with a resulting
adjustment of the ownership interests in the partnership.
Hydro-based electric power for the smelters at Mosjoen and
Lista is purchased from the Norwegian state power system under
contracts expiring in the years 2007 and 2011, respectively.
Both demand and energy usage charges are payable under the
contracts.
EA has extensive aluminum casting facilities in Norway which
are used primarily to produce extrusion billet and slab for
sheet. These products, and a small amount of unalloyed aluminum
ingot, are sold by EA in Norway and other European countries,
including sales to ANL, the principal subsidiary of ANH.
Japan. AIHC holds a 50% interest in a joint venture Alcoa
formed with Kobe Steel, Ltd. (Kobe) of Tokyo, Japan in 1991. The
venture, KSL Alcoa Aluminum Company, Ltd., completed construction
of a cold rolling mill which began operation in 1993 adjacent to
Kobe's Moka, Japan plant. The facility manufactures and sells
RCS to Asian and Pacific Rim countries. Alcoa supplies aluminum
ingot to the joint venture.
In 1992 Alcoa and Kobe formed Kobe Alcoa Transportation
Products Ltd. (KATP) to manufacture and sell aluminum sheet
products for transportation markets in Asia. AIHC acquired a 50%
interest in KATP.
Hungary. In late 1992 AIHC acquired a 50.1% interest in
Kofem Kft., a subsidiary of the government-owned Hungarian
Aluminium Industrial Corporation (Hungalu). The new venture,
A-K, produces common alloy flat and coiled sheet, soft alloy
extrusions and end products for building, construction, food and
agricultural markets in central and western Europe. A-K will
invest up to $146 million, including part of AIHC's initial
investment, over the five year period from 1993 to 1998 for
product quality and environmental and safety upgrades at the A-K
facility.
Sales and Distribution Segment
The Sales and Distribution segment includes the worldwide
sales activities of certain of the Company's wholly owned
subsidiaries. These sales subsidiaries handle a broad range of
alumina and aluminum products in various markets worldwide.
The sales subsidiaries sell certain fabricated aluminum and
alumina-based chemical products produced worldwide by Alcoa and
by the Company's manufacturing subsidiaries. Fabricated aluminum
products sold by the selling companies are principally produced
in the U.S. by Alcoa; in Europe by Alcoa Manufacturing (G.B.)
Limited; and in Australia by AofA. In 1993 the Company's
subsidiary Alcoa International S.A., formerly known as Alcoa
International, Inc. (AISA), relocated to Switzerland from the
British Virgin Islands and established branch offices in Great
Britain and Germany in early 1994. AISA intends to establish
other branches in France and The Netherlands in 1994. In 1993,
the Company formed N.V. AISC Beligium operating as a warehouse
and service center for fabricated aluminum products. Alutodo,
S.A. de C.V., a subsidiary, buys and sells aluminum and aluminum
products through distribution centers at several locations in
Mexico. Alumina-based chemical products sold by the selling
companies are produced in Australia by AofA; in the U.S. by
Alcoa; and by Alcoa subsidiaries in The Netherlands, Germany and
Japan.
The regional selling companies purchase U.S.-origin products
from Alcoa for resale generally through the local selling
companies, other Alcoa-affiliated entities or independent
distributors and agents. For products produced in other
countries, the regional selling companies generally act as sales
representatives or agents. The local selling companies act as
distributors or sales representatives (agents) for the products
sold, and many deal through their own independent agents and
distributors. The regional and local selling companies purchase
at prices or receive sales commissions from Alcoa which the
Company believes are at least as favorable as those which could
be obtained from unaffiliated third parties. Purchases by AIHC's
selling companies from Alcoa totaled approximately $451 million
in 1993, $506 million in 1992 and $545 million in 1991.
Partnership and Minority Interests
Australia. The principal shareholders of AofA have reached
certain understandings regarding share ownership and control,
dividend policies and other shareholder matters. The AofA
Shareholders' Agreement provides that at least one-third of the
net profits of AofA (determined on the basis of Australian
generally accepted accounting principles) will be distributed as
dividends each fiscal year unless the directors of AofA
unanimously agree to pay a smaller dividend. The Company
received cash dividends from AofA in 1993 and 1992 of
approximately $131 million and $97 million, respectively.
Norway. Norsk Alcoa participates in the profits of EA in
direct proportion to its 50% ownership interest. No dividends
have been paid to the Company since 1990 due to low aluminum
prices.
Foreign Laws and Regulations
The Company's subsidiaries are subject to the laws of the
countries in which they are incorporated or operate. In addition
to the general taxing authority of those countries, the
operations of the subsidiaries may also be affected by other host
country laws and regulations including corporate environmental
activities, foreign exchange controls, foreign investment and
import and export controls.
In many countries in which the subsidiaries operate or are
incorporated, companies are required to maintain a legal reserve
as a stated percentage of shareholders' capital, including
retained earnings. Dividends may not be paid out of the legal
reserve, nor may dividends be paid to the extent that the legal
reserve is not fully funded. None of the Company's subsidiaries
has a legal reserve funding deficiency. Foreign investment laws
applicable to the Company's subsidiaries do not currently impose
any significant restriction or limitation on the subsidiaries'
repatriation of dividends or capital to the Company. However,
such laws may limit or otherwise restrict new investments or the
transfer of ownership of existing investments. Also, in several
of these countries, U.S. dollar remittances may only be made
through or with the approval of a central banking institution or
other governmental authority. Amounts actually remitted are
subject to the availability of sufficient uncommitted U.S. dollar
reserves in the host country.
A permit is required for the export of alumina from
Australia, and the Australian federal government has issued
export control guidelines with a view to ensuring that Australian
mineral exports are not sold on world markets at less than
prevailing world market prices. AofA has not experienced
difficulties in obtaining such permits in the past for the export
of its products.
Competition
Alumina. Smelter-grade alumina is produced both at
independent refineries and at refineries integrated with or
dedicated to aluminum smelting operations. Integrated capacity --
also referred to as "tied" capacity ---- accounts for well over
half of world alumina production capacity. The alumina
production from "untied" capacity is sold to smelters throughout
the world, often through commodity traders. Of AofA's
approximately 6.1 million mt of annual alumina capacity for 1993,
approximately 18% was dedicated capacity for the smelting
operations at Point Henry and Portland. The remainder is
"untied" capacity.
Aluminum smelters operate on a continuous schedule and must
have an assured source of alumina supply to maintain operations.
A failure in supply could result in potline shutdown, which can
lead to costly business interruption and high restart costs. As
a consequence, key competitive factors in the "untied" alumina
market include delivery and assurance of supply, as well as
price.
Most of AofA's alumina supply contracts are negotiated on the
basis of agreed volumes over a multi-year time period to assure a
continuous supply of alumina to the smelters which receive the
alumina. Most alumina is sold under contracts where prices are
negotiated periodically or based on formulas related to market
prices or to production costs of aluminum ingot. An imbalance of
alumina demand and supply has resulted in declining alumina
prices.
On the spot market, which presently accounts only for
incremental alumina sales for AofA, price is the predominant
competitive factor. Commodity traders play an important role in
the marketing of "untied" alumina.
Aluminum. Unalloyed aluminum ingot is a traded commodity.
For ingot traded on the LME and U.S. commodity exchanges, the
principal competitive factor is price. Quality is defined, and
delivery and reliability of supply are secondary factors. For
ingot supplied over time and for shaped or alloyed ingot,
delivery, reliability of supply and quality also may be
significant factors.
Price is an important competitive factor in the sale of
fabricated aluminum products, although product quality adds an
increasingly important competitive dimension for customers whose
facilities require uniform product specifications in order to
achieve maximum efficiency. RCS markets have become highly
competitive. Semi-fabricated and fabricated products are usually
manufactured close to final consuming markets since timely
delivery, customer service and other commercial considerations
are becoming more important in determining sales. Also,
competition in aluminum fabricated product markets is more varied
than in those for alumina or primary aluminum since the capital
costs of entry are lower than those for refining and smelting
facilities.
The dissolution of the Soviet Union and the lack of a
mechanism to integrate successfully its economy with market
economies significantly contributed to a global oversupply of
aluminum in recent years. Prior to 1991 former Soviet aluminum
producers primarily served internal markets. The internal market
weakened substantially after the collapse of the Soviet Union.
To earn hard currency, former Soviet aluminum producers began
exporting significant quantities of aluminum. These exports
caused an imbalance in demand and supply and resulted in severe
downward pressure on aluminum prices.
In late 1993, discussions among the governments of six major
primary aluminum producing nations were initiated to address the
global aluminum supply situation. A multi-government accord was
reached among Australia, Canada, the European Union (EU), Norway,
Russia and the U.S. in late January 1994 under which the Russian
industry will reduce its annual aluminum exports by 500,000 mt
per year for up to two years, the EU will refrain from renewing
import quotas on Russian ingot when the quotas expire at the end
of February 1994, and certain of the participating governments
will create a fund to assist in the modernization of the Russian
industry. The accord recognizes that there is currently an
excess of supply of between 1.5 and 2.0 million mt of annual
production.
In February 1994, AofA announced a reduction of 25,000 mt of
primary aluminum production at its Point Henry smelter. Also,
the joint venture smelter in Portland announced a reduction of
26,000 mt of production.
Sales and Distribution. The Company's sales and distribution
subsidiaries, which principally sell fabricated aluminum
products, compete with independent distributors and agents and
with integrated aluminum producers. Key competitive factors are
price, reliability and timeliness of supply. Other important
considerations include quality, knowledge of the geographical
markets served and technical services. The Company's sales
subsidiaries have established a reliable distribution network in
the various countries in which they sell.
Other Risk Factors
In addition to the risks inherent in the Company's business
and operations as described herein, the Company is exposed
generally to financial, market, political, business and economic
risks in connection with its worldwide operations.
Employees and Labor Relations
During 1993 the Company's subsidiaries employed an average of
approximately 10,300 persons. A-K employs approximately 2,300 in
Hungary. A-K has entered into an agreement with its unions for
wages and salaries in 1994.
AofA currently employs approximately 6,000 people. The
majority of AofA's non-management employees are members of labor
unions. Terms and conditions of employment are largely regulated
by enterprise agreements.
Approximately 1,300 persons are employed by the EA
partnership in Norway. Employees in Norway are represented on
management boards and work councils while employees in The
Netherlands are represented on work councils. Wages and benefits
of these employees are established by collective bargaining
agreements under which remuneration levels are set every year,
usually within levels established by the government. There have
been no work stoppages at the facilities of the EA partnership or
of ANL in the past decade.
Environmental Matters
The Company's plants are subject to the environmental laws
and regulations of the jurisdictions in which they are located.
The Company believes that the environmental standards maintained
at its locations meet or exceed all applicable regulatory
requirements.
Approximately $28 million was spent during 1993 for
facilities to control emissions or for the handling or storage of
discharge materials, principally by AofA for noise control, dust
abatement and residue disposal projects at its Western Australia
facilities. Capital expenditures for environmental facilities
for 1994 are expected to be about $24 million. The costs of
operating these facilities are not included in these figures.
Also, remediation expenses being incurred by the Company at
certain of its facilities are increasing.
The Company's operations, like those of others in manufacturing
industries, have in recent years become subject to increasingly
stringent legislation and regulations to protect human health
and the environment. This trend is expected to continue.
Compliance with new laws, regulations or policies could require
substantial expenditures by the Company, in addition to those
referred to above, could increase operating costs and could affect
the marketing of certain products. Certain products, especially
packaging, are increasingly being subjected to regulation in
markets where they are sold.
Environmental laws and regulations are important both to the
Company and to the communities where it operates. The Company
supports the use of sound scientific research and realistic risk
criteria to analyze environmental and human health effects and to
develop effective laws and regulations in all countries where it
operates. The Company also recognizes that recycling and waste
reduction offer real solutions to the solid waste problem and it
continues vigorously to pursue efforts in these areas.
Item 2. Properties.
See "Item 1 - Business." The Company believes that its
facilities, substantially all of which are owned, are suitable
and adequate for its operations.
Item 3. Legal Proceedings.
In the ordinary course of its business, the Company is
involved in a number of suits and claims, both actual and
potential, including some which it has asserted against others.
Management currently believes that the outcome of such suits and
claims will not have a material effect on the Company's
operations or its consolidated financial position.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of the Company's security
holders during the fourth quarter of 1993.
PART II
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters.
There is no established public trading market for the
Company's common stock. Alcoa and one of its subsidiaries own
all of the outstanding shares of common stock of the Company.
The Company has not adopted a policy regarding the payment of
dividends on its common stock. A provision in the Company's
certificate of incorporation does, however, affect the ability of
the Company to pay dividends on the common or preferred stock of
the Company. The provision states that AIHC and its subsidiaries
may not incur aggregate indebtedness in excess of 150% of the
Company's consolidated net worth. The payment of cash dividends
by AIHC reduces consolidated net worth. In addition, and for the
benefit of the Company's preferred shareholders, the Company does
not intend to pay common stock dividends except out of the
Company's retained earnings.
Applicable law and restrictive provisions in shareholder and
partner agreements applicable to certain subsidiaries also may
affect the amount or timing of dividend payments.
Item 6. Selected Financial Data.
ALCOA INTERNATIONAL HOLDINGS COMPANY AND SUBSIDIARIES
(in millions, except ratios)
For the year ended December 31
1993 1992 1991 1990 1989
Sales and operating revenues $2,570.2 $2,446.4 $2,838.4 $3,200.6 $3,083.1
Other income (loss)* 78.9 85.5 101.0 127.3 158.0
Cost of goods sold and operating
expenses 1,962.5 1,916.0 2,135.5 2,052.3 1,923.2
Selling general administrative and
other expenses 88.7 63.7 64.9 64.9 60.8
Provision for depreciation and
depletion 117.7 108.2 105.6 121.0 114.0
Interest expense 23.4 20.6 30.3 47.1 51.3
Taxes on income 100.3 147.7 216.0 359.3 418.7
Income before other items 356.5 275.7 387.1 683.3 673.1
Equity earnings (losses) (15.5) (9.7) (.4) (6.7) 24.6
Minority interests (155.0) (105.9) (154.6) (305.5) (303.8)
Accounting changes - 27.3 - - -
Net income 186.0 187.4 232.1 371.1 393.9
Working capital 540.1 519.6 433.4 490.0 339.8
Properties, plants and equipment,
net 1,591.0 1,482.8 1,528.7 1,658.8 1,664.8
Investments 155.0 157.2 137.4 121.2 152.7
Other assets and liabilities, net 869.1 811.5 748.3 704.7 425.6
Total assets 3,872.6 3,581.2 3,770.6 3,908.7 3,413.2
Long-term debt (noncurrent) 302.1 304.6 172.8 179.0 228.3
Minority interests 680.1 596.6 628.1 812.2 729.3
Shareholders' equity 1,949.0 1,800.0 1,696.6 1,629.6 1,274.0
Ratio of earnings to fixed charges
and preferred stock dividend
requirements 10.0 7.03 8.45 11.94 12.18
<FN>
*Principally interest income and translation and exchange adjustments
Item 7. Management's Discussion and Analysis of Results of
Operations and Financial Condition.
(in millions, except as noted)
Results of Operations
1993 1992 1991
Sales and operating revenues by segment:
Alumina $1,007.4 $ 958.3 $1,069.2
Aluminum 1,026.7 891.0 1,120.7
Sales and Distribution 536.1 597.1 648.5
-------- -------- --------
Total $2,570.2 $2,446.4 $2,838.4
======= ======= =======
Income before accounting changes $ 186.0 $ 160.1 $ 232.1
Net income $ 186.0 $ 187.4 $ 232.1
1993 Overview
AIHC's 1993 net income before accounting changes increased
16% from 1992. The 1993 earnings included a favorable adjustment
of $26.3, after minority interest, through June from a reduction
in Australia's corporate tax rate from 39% to 33%. This credit
is AIHC's share of AofA's adjustment, mainly to the provision for
future taxes.
AIHC's 1993 revenues increased 5% from 1992, primarily
reflecting revenues from A-K which began operations at the
beginning of 1993. A-K produces flat-rolled and extruded
products used mostly in industrial and construction markets, as
well as primary aluminum. Higher revenues due to increased
alumina shipments from AofA were essentially offset by lower
prices on aluminum products sold by AIHC's selling companies.
Alumina Segment
Revenues from the Alumina segment, which includes alumina,
alumina-based chemicals and gold, account for approximately 40%
of total revenues. Revenues increased 5% over 1992, primarily
reflecting increased alumina shipments by AofA. Revenues in 1992
decreased 10% from 1991, reflecting lower prices for both alumina
and alumina-based chemicals.
Alumina shipments from AofA rose 9% from 1992, mainly due to
additional production from AofA's Wagerup refinery expansion
completed late in 1992. Alumina revenues increased 6% from 1992,
reflecting the improved shipments offset by a 2% decrease in
average realized prices. Revenues in 1992 fell 9% from 1991 due
to a 15% drop in average realized price. An imbalance of alumina
supply and demand during 1992 continued into 1993. The
oversupply of alumina is expected to continue well into 1995, and
there is little expectation of improvement in alumina prices in
the near term.
Revenues from alumina-based chemicals increased 5% from
1992, reflecting higher shipments offset by a minor decline in
price. Revenues in 1992 declined 26% from 1991 due to lower
shipments and prices of 10% and 18%, respectively.
Gold revenues decreased 12% from 1992. Gold production has
declined annually since 1990, partly because of lower grade ore
which resulted in corresponding shipment reductions. Shipments
declined 12% from 1992, following a 6% decrease from 1991 to
1992. With no further exploration discoveries, the gold deposit
is expected to be mined out in 1997. Gold prices remained even
with 1992 after dropping 9% from 1991 to 1992. Revenues in 1992
were down 15% from 1991.
Operating profit for the Alumina segment was $300 in 1993,
representing a 37% increase from 1992. Factors contributing to
the improvement were increased alumina shipments from the Wagerup
refinery expansion, productivity gains, lower raw material costs
and a weaker Australian currency. The 1992 operating profit of
$220 was 43% lower than 1991. The decrease was principally due
to lower alumina prices.
Aluminum Segment
Revenues from the Aluminum segment increased 15% from 1992.
The increase is primarily due to the acquisition of A-K. The
1992 revenues from this segment dropped 20% from 1991 due to
lower shipments and prices.
Aluminum ingot represented 65% of shipments, and 46% of
revenues for this segment in 1993. Ingot shipments increased 10%
from 1992, mainly because of higher AofA shipments to Japan and
the addition of A-K. Despite the increase in shipments, ingot
revenues increased only 3% due to a 7% drop in average realized
ingot price. Both lower prices and shipments contributed to a
32% drop in ingot revenues from 1991 to 1992.
Revenues from the sale of rigid container sheet (RCS) for
beverage cans declined $19, or 11% from 1993. The change was
caused by a 4% decrease in shipments combined with a 7% reduction
in prices. RCS revenues declined 10% from 1991 to 1992,
primarily because of lower prices partially offset by higher
shipments to Southeast Asia.
Revenues from Alcoa Nederland Holding B.V. (ANH) declined 3%
in 1993. Even though local currency revenues increased,
strengthening of the U.S. dollar resulted in a decrease in U.S.
dollar revenues. The primary cause of the local currency revenue
growth was the acquisition of Compri-Aluminium B.V. (Compri)
early in 1993. Compri manufactures and sells aluminum building
products in Belgium and the Netherlands. Shipments were down 4%
from 1992. The decrease reflects weak European demand in the
construction, transportation and agricultural markets. Both
revenues and shipments improved slightly from 1991 to 1992. The
higher shipments and favorable exchange rate changes helped to
generate the revenue increase.
Operating profit for the Aluminum segment increased $83, or
6% from 1992. The impact of favorable exchange rates from AofA,
partly offset by start-up losses from A-K, was the primary cause
of the increase. Operating profit in 1992 was $79, or an 8%
decrease from 1991. Significantly lower aluminum prices, partly
offset by improved production costs, were the major reasons for
the decline.
Sales and Distribution Segment
This segment includes companies that sell aluminum products
and alumina-based chemicals purchased from Aluminum Company of
America and its subsidiaries (Alcoa), and products produced by
AIHC. Revenues in 1993 declined to $536 from $597 in 1992, a
decrease of 10%. Even though shipments increased slightly, a
decline in unit revenues for aluminum products more than offset
the effect of the higher volume. In 1992 revenues for this
segment declined 8% from 1991, reflecting lower sales of aluminum
products in Canada, primarily those for the aerospace industry,
and lower RCS sales in Canada and the Far East.
Operating profit for the Sales and Distribution segment
dropped 37% from 1992. Lower unit prices on sales of aluminum
products, particularly sales of RCS to Latin America, were the
major cause of the decrease. Operating profit in 1992 of $44 was
25% lower than in 1991, mostly because of translation losses and
higher administrative costs associated with the acquisition of
Alutodo S.A. de C.V.
Accounting changes
In 1992 AIHC implemented two new accounting rules that were
applied retroactively to January 1. The first relates to
accounting for income taxes and resulted in a one-time, non-cash
credit of $29.5. The credit was principally due to adjusting
deferred taxes that were accrued at various tax rates in prior
years to the current tax rate of the countries where AIHC has
operations.
The second rule relates to accounting for post retirement
benefits other than pensions and requires accruing those benefits
over the period the employee provides services to the company.
This resulted in a one-time, non-cash charge of $2.2 for the
cumulative net liability up to January 1.
Other Income and Expense Items
Other income was $79 for 1993, an 8% decrease from 1992.
The major factors in the decline were lower interest income due
to decreased interest rates, and a favorable insurance claim
settlement in 1992 by AofA, partially offset by foreign currency
exchange gains. Other income in 1992 declined $16 from 1991,
principally due to foreign currency exchange losses and lower
interest income from AofA. These were partially offset by the
insurance claim settlement.
Included in other income is interest income earned by a
subsidiary of AIHC, Alcoa International Finance Company (AIFC),
from loans to ACOA. AIFC earned $32 in 1993, $36 in 1992 and $41
in 1991 from such loans.
Cost of goods sold and operating expenses increased 2% from
1992. The impact of lower aluminum product costs to the
international selling companies and favorable exchange rate
effects from AofA were more than offset by the addition of A-K.
Cost of goods sold and operating expenses in 1992 were down 10%
from 1991 primarily due to lower aluminum production costs. Cost
of goods sold as a percentage of sales and operating revenues was
76% in 1993, 78% in 1992 and 75% in 1991. The improvement in the
1993 ratio is primarily due to improved margins in the alumina
segment. The higher ratio in 1992 compared to 1991 was caused by
price declines for most products.
Selling, general administrative and other expense increased
$25 from 1992. Most of the increase was due to the addition of
subsidiaries, particularly A-K.
Depreciation expense in 1993 increased 9% from 1992. The
increase is almost entirely due to the addition of A-K.
Depreciation expense increased $3 in 1992, reflecting
capitalization of AofA's alumina refinery expansion at Wagerup.
Interest expense increased $3 from 1992 reflecting a
significant drop in capitalized interest, partially offset by
lower interest rates. Capitalized interest in 1993, 1992 and
1991 was $.3, $7.1 and $5.2, respectively. Interest expense in
1992 was down $10 from 1991 largely due to lower interest rates.
The provision for taxes on income reflects a weighted
average of the statutory tax rates of countries where AIHC
operates, primarily Australia and the U.S. Included in 1993
income taxes is the effect of a change in Australia's tax rate
from 39% to 33%. The decrease resulted in a $65 reduction in
AofA's taxes and primarily related to adjusting deferred taxes
initially recorded at the higher rate. The effective tax rate
for 1993 was 22.0%. The difference between this rate and the
U.S. statutory rate of 35% is due primarily to the Australia tax
rate change.
Equity losses in 1993 related primarily to AIHC's aluminum
ventures in Japan. The ventures manufacture and sell RCS and
aluminum products for the transportation industry. In 1992,
equity losses primarily related to AIHC's Norwegian smelting
partnership.
Minority interests' share of earnings in 1993 increased $49
from 1992 and was $49 lower in 1992 compared to 1991. The
changes were due primarily to changes in AofA earnings.
AIHC continues to participate in environmental assessments
and cleanups at a number of locations, including operating
facilities and adjoining properties; at previously owned and
operated facilities; and at other waste sites. AIHC records a
liability for environmental remediation costs or damages when a
cleanup program becomes probable and the costs can be reasonably
estimated. As assessments and cleanups proceed, these
liabilities are adjusted based on progress in determining the
extent of remedial actions and related costs and damages. The
liabilities can change substantially due to factors such as the
nature and extent of contamination, changes in remedial
requirements and technological changes.
The Company's environmental remediation reserve balance at
the end of 1993 was $17 and reflects AIHC's most probable cost to
remediate identified environmental conditions.
Liquidity and Capital Resources
Cash From Operations
Cash and cash equivalents at year-end were $164, a $215
decline from 1992. Short-term investments at year-end 1993
included $244 with maturities greater than three months. Such
investments do not qualify as cash equivalents. All short-term
investments in 1992 were considered to be cash equivalents.
Cash from operations and net income were relatively constant
in 1993, 1992 and 1991. However, there were some notable changes
in components of working capital and minority interests. In
1993, decreases in inventory, prepaid expenses and other current
assets, and accounts payable and accrued expenses were
significantly lower than in 1992. Receivables went up slightly
in 1993 while they declined in 1992. Minority interests' share
of 1993 earnings was $155, an increase of $49 from 1992.
Financing Activities
Dividends to preferred shareholders were $14 in 1993, $16 in
1992 and $21 in 1991. The declines reflect lower dividend rates
which are reset periodically by an auction process (see note G on
page 25). AIHC has paid no dividends on common stock in the past
three years. Dividends paid by AofA were $257 in 1993, $190 in
1992 and $310 in 1991. Of these amounts, AIHC received $131, $97
and $158, respectively.
Long-term debt was essentially unchanged from 1992. Long-
term debt increased by $83 in 1992, principally to fund forward
foreign exchange activities. Debt as a percentage of invested
capital was 10.3% in 1993, 11.3% in 1992 and 6.9% in 1991.
In 1991 AIHC purchased the remaining interest in ANH for
$80.
Investing Activities
Capital expenditures were $182 in 1993 compared to $205 in
1992 and $245 in 1991. The 1993 capital expenditures were mainly
to sustain or improve existing facilities. A large portion of
the capital expenditures in 1992 and 1991 were for the Wagerup
alumina refinery expansion which was completed in late 1992.
AIHC plans to invest up to $146, including part of AIHC's initial
investment, over the five year period from 1993 though 1998 for
product quality and environmental and safety upgrades at its A-K
facilities.
Cash held by AIFC is loaned to Alcoa through interest-
bearing notes. The amount loaned totaled $915 at year-end 1993,
up $155 from 1992. Since Alcoa controls AIHC and currently
intends to continue renewing these notes, they are classified as
noncurrent. See Note J for information regarding the amounts and
terms of the notes.
AofA had investments of $244 in short-term securities with
maturities greater than three months at the end of 1993.
Other investing activities declined significantly from 1992.
Acquisitions in 1993 included an Alcoa Nederland subsidiary with
operations in Belgium and The Netherlands, which produces
aluminum and steel products for the building and construction
markets. Investments and acquisitions in 1992 included capital
funding for AIHC's investments in Japan for KSL Alcoa Aluminum
Company Ltd. and Kobe Alcoa Transportation Products, Ltd., and in
Hungary for A-K. In Australia, AofA made an investment in First
National Resource Trust, which holds a 10% investment in the
Portland Smelter in Australia. Late in 1992 AIHC acquired
Alutodo S.A. de C.V. which sells aluminum products through metal
distribution centers in Mexico.
Subsequent Event
In February 1994, AofA announced reductions of 25,000 mt at
the Point Henry smelter in Geelong, Australia and 26,000 mt at
the Portland, Australia smelter. AofA has a 45% interest in the
Portland smelter.
Item 8. Financial Statements and Supplementary Data.
Independent Auditor's Report
To the Shareholders and Board of Directors
Alcoa International Holdings Company (AIHC)
We have audited the consolidated financial statements and
the financial statement schedules of AIHC listed in Item 14(A) of
this Form 10-K. These financial statements and financial
statement schedules are the responsibility of AIHC's management.
Our responsibility is to express an opinion on these financial
statements and financial statement schedules based on our audits.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of AIHC at December 31, 1993 and 1992, and the
consolidated results of its operations and its cash flows for
each of the three years in the period ended December 31, 1993 in
conformity with generally accepted accounting principles. In
addition, in our opinion, the financial statement schedules
referred to above, when considered in relation to the basic
financial statements taken as a whole, present fairly, in all
material respects, the information required to be included
therein.
As discussed in Notes A and N to the consolidated financial
statements, AIHC changed its methods of accounting for income
taxes and post retirement benefits other than pensions in 1992.
/s/Coopers & Lybrand
COOPERS & LYBRAND
600 Grant Street
Pittsburgh, Pennsylvania
January 11, 1994, except for Note P
for which the date is February 7, 1994
STATEMENTS OF CONSOLIDATED INCOME AND RETAINED EARNINGS
AIHC and subsidiaries
(in millions)
For the year ended December 31 1993 1992 1991
Statement of Consolidated Income
REVENUES
Sales and operating revenues (I) $2,449.1 $2,321.3 $2,628.9
Revenues from related parties (I and J) 121.1 125.1 209.5
Other income, principally interest (J) 78.9 85.5 101.0
------- ------- -------
2,649.1 2,531.9 2,939.4
======= ======= =======
COSTS AND EXPENSES
Cost of goods sold and operating expenses (J) 1,962.5 1,916.0 2,135.5
Selling, general administrative and other
expenses (J) 88.7 63.7 64.9
Provision for depreciation, depletion
and amortization 117.7 108.2 105.6
Interest expense (K) 23.4 20.6 30.3
------- ------- -------
2,192.3 2,108.5 2,336.3
======= ======= =======
Income before taxes on income 456.8 423.4 603.1
Provision for taxes on income (N) 100.3 147.7 216.0
------- ------- -------
EARNINGS
Income before other items 356.5 275.7 387.1
Equity losses (C) (15.5) (9.7) (.4)
Minority interests (155.0) (105.9) (154.6)
------- ------- -------
Income before accounting changes 186.0 160.1 232.1
Cumulative effect of accounting changes for:
Income taxes (A and N) - 29.5 -
Postretirement benefits, net of $1.6 tax
benefit (A) - (2.2) -
------- ------- -------
Net income $ 186.0 $ 187.4 $ 232.1
======= ======= =======
Statement of Consolidated Retained Earnings
Retained earnings at beginning of year $1,655.6 $1,484.3 $1,270.4
Net income for year 186.0 187.4 232.1
------- ------- -------
1,841.6 1,671.7 1,502.5
======= ======= =======
Less:
Preferred dividends declared 13.8 16.1 18.2
------- ------- -------
Retained earnings at year-end $1,827.8 $1,655.6 $1,484.3
======= ======= =======
The accompanying notes are an integral part of the financial statements.
CONSOLIDATED BALANCE SHEET
AIHC and subsidiaries
(in millions, except share amounts)
December 31 1993 1992
ASSETS
Current assets:
Cash $ 13.3 $ 17.3
Short-term investments (all cash equivalents except $243.6 in
1993) 394.7 362.1
Receivables from customers, less allowances: 1993-$11.3; 351.5 315.1
1992-$7.6 (J)
Inventories (B) 333.0 307.0
Prepaid expenses and other current assets 19.3 32.0
------- -------
Total current assets 1,111.8 1,033.5
Notes receivable - Aluminum Company of America (J) 914.8 759.8
Investments (C) 155.0 157.2
Properties, plants and equipment (D) 1,591.0 1,482.8
Other assets and deferred charges 100.0 147.9
------- -------
Total assets $3,872.6 $3,581.2
======= =======
LIABILITIES
Current liabilities:
Short-term borrowings (J) $ 129.5 $ 86.3
Accounts payable, trade (J) 197.8 171.9
Accrued compensation and retirement costs 30.1 33.5
Taxes, including taxes on income 167.8 154.9
Future taxes on income 14.1 28.4
Other current liabilities 32.4 38.9
------- -------
Total current liabilities 571.7 513.9
Long-term debt (E) 302.1 304.6
Noncurrent liabilities and deferred credits 145.7 96.2
Deferred income taxes (N) 224.0 269.9
------- -------
Total liabilities 1,243.5 1,184.6
------- -------
MINORITY INTERESTS (A) 680.1 596.6
------- -------
Contingent liabilities (F)
SHAREHOLDERS' EQUITY
Preferred stock, $100 par value, 5,000,000 shares authorized;
2,500,000 shares issued and outstanding (G) 250.0 250.0
Common stock, $1 par value, 8,000 shares authorized in 1993,
10,000,000 in 1992; 7,634 shares issued and outstanding in
1993, 7,634,085 in 1992 (G) - 7.6
Additional capital 85.9 78.3
Translation adjustment (A and H) (214.7) (191.5)
Retained earnings 1,827.8 1,655.6
------- -------
Total shareholders' equity 1,949.0 1,800.0
------- -------
Total liabilities and equity $3,872.6 $3,581.2
======= =======
The accompanying notes are an integral part of the financial statements.
STATEMENT OF CONSOLIDATED CASH FLOWS
AIHC and subsidiaries
(in millions)
For the year ended December 31 1993 1992 1991
Cash from Operations
Net income $186.0 $187.4 $232.1
Adjustments to reconcile net income to cash from operations:
Depreciation, depletion and amortization 117.7 108.2 105.6
Increase (reduction) in deferred income taxes (48.6) (17.5) 15.6
Equity losses before additional taxes, net of dividends 16.2 15.0 2.6
Accounting changes - (27.3) -
Minority interests 155.0 105.9 154.6
Other 7.9 7.6 (6.6)
(Increase) decrease in receivables (2.6) 52.3 109.6
(Increase) decrease in inventories 23.8 75.9 (28.9)
(Increase) decrease in prepaid expenses and
other current assets 5.3 66.4 (1.6)
Decrease in accounts payable and
accrued expenses (61.5) (141.2) (9.0)
Decrease in taxes, including taxes on income (8.9) (16.3) (154.8)
Net change in noncurrent assets and liabilities 60.7 27.2 22.0
----- ----- -----
Cash from operations 451.0 443.6 441.2
----- ----- -----
Financing Activities
Net additions to (reductions of) short-term borrowings 73.6 (27.3) 59.9
Reductions to minority interests - - (80.0)
Dividends paid to shareholders (13.8) (16.3) (21.3)
Dividends paid to minority interests (126.1) (93.1) (152.0)
Additions to long-term debt 87.5 323.7 264.6
Payments on long-term debt (86.8) (241.2) (191.7)
----- ----- -----
Cash used for financing activities (65.6) (54.2) (120.5)
----- ----- -----
Investing Activities
Capital expenditures (182.2) (205.3) (245.0)
Loans by finance subsidiary to related parties (172.5) (82.6) (163.9)
Payments received on finance subsidiary loans 17.5 39.0 54.4
Acquisition of subsidiaries, net of cash acquired (9.8) (57.7) (3.4)
Additions to investments (7.4) (36.2) (18.8)
Short-term investments, excluding cash equivalents (243.6) - -
----- ----- -----
Cash used for investing activities (598.0) (342.8) (376.7)
----- ----- -----
Effect of exchange rate changes on cash (2.4) (39.2) (7.0)
----- ----- -----
Changes in Cash
Net change in cash and cash equivalents (215.0) 7.4 (63.0)
Cash and cash equivalents at beginning of year 379.4 372.0 435.0
----- ----- -----
Cash and cash equivalents at year-end $164.4 $379.4 $372.0
===== ===== =====
The accompanying notes are an integral part of the financial statements.
NOTES TO FINANCIAL STATEMENTS
(dollars in millions, except share amounts)
A. Summary of Significant Accounting Policies
Principles of Consolidation - The consolidated financial
statements include the accounts of Alcoa International Holdings
Company (AIHC) and companies more than 50% owned. Also included are
joint ventures in which AIHC has an undivided interest. Investments
in other entities are accounted for principally on the equity basis.
Inventories - Inventories are carried at the lower of average
cost or market.
Depreciation and Depletion - Depreciation is recorded on the
straight-line method at rates based on the estimated useful lives
of the assets. The book value of obsolete assets is charged to
depreciation expense when they are scrapped. Profits or losses
from the sale of assets are included in other income. Repairs and
maintenance are charged to expense as incurred.
Depletion is taken over the periods the estimated mineral
reserves are extracted.
Environmental Expenditures - Expenditures that relate to
current operations are expensed or capitalized, as appropriate.
Expenditures that relate to an existing condition caused by past
operations, and which do not contribute to future revenues, are
expensed. Liabilities are recorded when remedial efforts are
probable and the costs can be reasonably estimated.
The liability for remediation expenditures may include, as
appropriate, elements of costs such as site investigations,
consultant's fees, feasibility studies, outside contractor
expenses and monitoring expenses. Estimates are not discounted,
nor are claims for recovery recognized. The liability is
periodically reviewed and adjusted to reflect current remediation
progress, prospective estimates of required activity, and other
factors that may be relevant, including changes in technology
or regulations.
Interest Costs - Interest related to construction of
qualifying assets is capitalized as part of construction costs.
Futures Contracts - AIHC periodically enters into forward
and futures contracts for foreign exchange, interest rate and
commodities which are primarily accounted for as hedges of its
revenues and costs. The gains and losses on these contracts
are reflected in earnings concurrently with the hedged revenues
or costs. The cash flows from these contracts are classified
in a manner consistent with the underlying nature of the
transactions.
Exploration Costs - Exploration costs are generally deferred
and amortized over the period during which the resources are
extracted on either a time or production basis. Applicable
exploration costs are charged to expense in the year any program
is abandoned.
Income Taxes - Effective January 1992 AIHC adopted SFAS 109 -
"Accounting for Income Taxes". A tax credit of $29.5 was recorded
as a cumulative effect of an accounting change for the net decrease
to the deferred tax liability. See Note N.
Postretirement Benefit Plans Other Than Pensions - Effective
January 1992 AIHC adopted accounting for these benefits as prescribed
by SFAS No. 106. An after tax charge of $2.2 was recorded as a
cumulative effect of an accounting change. Footnote disclosure is
not presented because these costs are immaterial.
Foreign Currency - The U.S. dollar is the functional
currency of AIHC, AIFC, Alcoa Inter-America, Inc., Alcoa
International, Inc. and Alcoa International (Asia) Limited.
As of January 1, 1991, AIHC adopted the Australian dollar as
the functional currency for translating financial statements
of Alcoa of Australia (AofA). The change had the effect of
reducing AIHC's consolidated shareholders' equity at January 1
by $133 and minority interests by $128. As of January 1,
1992, the Norwegian kroner became the functional currency for
Norsk Alcoa A/S. The functional currencies of the remaining
companies are their local currencies and translation of their
financial statements gives rise to a translation adjustment in
the balance sheet. The amount of this adjustment varies from
year to year based on the exchange rates at the time of
translation.
Cash Flows - Short-term investments includes items that
qualify as cash equivalents. AIHC considers all investments
purchased with a maturity of three months or less to be cash
equivalents. Cash equivalents were $151.1 and $362.1 in 1993
and 1992, respectively. Cash payments in 1993, 1992 ,and 1991
for interest were $20.1, $29.3 and $32.8, respectively. Cash
payments for income taxes for the same respective periods were
$131.8, $202.6 and $346.4.
Reclassification - Certain amounts in previously issued
financial statements were reclassified to conform to 1993
presentations.
B. Inventories
December 31 1993 1992
Finished goods $ 67.6 $ 56.9
Work in process 39.2 20.6
Bauxite and alumina 91.5 95.1
Purchased raw materials 58.7 68.2
Operating supplies 76.0 66.2
------ ------
$ 333.0 $ 307.0
====== ======
C. Investments
AIHC's share of undistributed earnings of less than majority-
owned entities was $31.0, $47.6 and $62.0 at December 31, 1993,
1992 and 1991, respectively.
D. Properties, Plants and Equipment, at Cost
December 31 1993 1992
Land and land rights, including mines $ 48.0 $ 46.5
Structures 710.3 654.7
Machinery and equipment 1,731.4 1,589.8
------- -------
2,489.7 2,291.0
Less accumulated depreciation and depletion 971.4 876.7
------- -------
1,518.3 1,414.3
Construction work in progress 72.7 68.5
------- -------
$1,591.0 $1,482.8
======= =======
E. Long-term Debt
December 31 1993 1992
AofA:
Revolving credit agreements:
Euro-Commercial Paper
London Programme, due 1996-1997
(average rates: 1993-3.4%, 1992-3.74%) $302.0 $297.0
London Programme - A$, due 1995
(average rate: 1992-5.7%) - 2.1
Hong Kong Programme - due 1995
(average rate: 1992-3.48%) - 4.9
Other .1 .6
----- -----
Long-term debt $302.1 $304.6
===== =====
All long-term debt matures in the next five years. Amounts due
are less than $.1 in 1994 and 1995, $102 in 1996 and $200 in 1997.
AofA issues variable rate notes under a $400 Euro-Commercial
Paper Programme (ECP) based in London and a $102 ECP based in Hong
Kong. Standby facilities for both ECPs are provided under a $200
Revolving Underwriting Facility and a $102 Australian Bank Bill
Facility.
AofA has uncommitted lines of credit available with major
Australian banks. In addition, AIHC has unused short-term
lines of credit aggregating $4 with banks and $4 with related
parties (see Footnote J).
F. Contingent Liabilities
In the ordinary course of its business, AIHC is involved
in a number of suits and claims, both actual and potential,
including some which it has asserted against others. Management
currently believes that the outcome of such suits and claims will
not have a material effect on AIHC's operations, liquidity, or
its consolidated financial position.
G. Preferred and Common Stock
Preferred Stock - In 1988 AIHC sold five series of cumulative
voting preferred stock with an aggregate value of $250. In 1991
the preferred stock was, by its terms, restructured into four series
as follows:
Shares Aggregate Year term
Outstanding par value Dividend rate* expires
Variable Term Voting:
Series A 800,000 $ 80.0 2.6% -
Series B 700,000 70.0 4.8% -
Voting:
Series I 500,000 50.0 8.0% 1994
Series II 500,000 50.0 6.9% 1995
--------- -----
2,500,000 $250.0
========= =====
<FN>
*Annual dividend rates:
Series A - The annual dividend rate is a weighted average of
an auction rate reset every 49 days.
Series B - In 1993 the Series B preferred converted from its
initial term to a 49 day auction rate preferred. The
annual dividend rate represented a weighted average of
8.625% through May 10 and 49 day auction rates for the
balance of the year.
Series I and Series II - The annual dividend rate will be
reset by an auction process at the end of the respective
term.
Common Stock - As a result of an amendment in May 1993 to
AIHC's Certificate of Incorporation, its common shares were
reverse split at a 1/1,000 ratio, reducing outstanding common
shares to 7,634. Authorized common shares were reduced to
8,000 shares and authorized preferred shares were reduced to
2,500,000 shares.
H. Translation Adjustment
An analysis of the translation adjustment component of
shareholders' equity follows.
1993 1992
Balance at beginning of year $(191.5) $(123.6)
Functional currency change (See Note A) - (.4)
Translation adjustments during the year (23.2) (67.5)
------ ------
Balance at end of year $(214.7) $(191.5)
====== ======
I. Segment and Geographic Area Information
AIHC's operations consist of three segments:
The Alumina segment includes the mining of bauxite, refining
it into smelter-grade alumina, and the production and sale of
alumina and alumina-based chemical products. It also includes
operations to extract gold present in a portion of AofA's
bauxite reserves.
The Aluminum segment includes the production and sale of
primary aluminum and fabricated aluminum products. Also
included are power and other services.
The Sales and Distribution segment consists of an
international network of regional and local selling companies
which act as distributors or agents for both AIHC's and
Alcoa's products.
Segment information
1993 1992 1991
Sales and operating revenues:
Alumina
Customers (1) $ 968.8 $ 910.6 $ 928.6
Alcoa and affiliated companies 38.6 47.7 140.6
Intersegment (2) 104.6 103.7 130.2
------- ------- -------
1,112.0 1,062.0 1,199.4
------- ------- -------
Aluminum
Customers 1,011.6 876.0 1,117.8
Alcoa and affiliated companies 15.1 15.0 2.9
------- ------- -------
1,026.7 891.0 1,120.7
------- ------- -------
Sales and distribution
Customers 468.7 534.7 582.5
Alcoa and affiliated companies 67.4 62.4 66.0
------- ------- -------
536.1 597.1 648.5
------- ------- -------
Eliminations (104.6) (103.7) (130.2)
------- ------- -------
Total sales and operating revenues $2,570.2 $2,446.4 $2,838.4
======= ======= =======
Operating profit:
Alumina $ 300.3 $ 219.8 $ 388.6
Aluminum 83.1 78.6 85.7
Sales and distribution 28.1 44.3 58.7
------- ------- -------
Total operating profit 411.5 342.7 533.0
Other income 69.8 102.5 102.0
Interest expense 23.4 20.6 30.3
Corporate (1.1) (1.2) (1.6)
------- ------- -------
Income before taxes on income $ 456.8 $ 423.4 $ 603.1
======= ======= =======
Identifiable assets:
Alumina $1,471.3 $1,411.6 $1,443.9
Aluminum 1,159.3 1,068.5 1,319.7
Sales and distribution 168.1 183.9 153.2
Corporate assets 925.8 760.0 716.4
Investments 148.1 157.2 137.4
------- ------- -------
Total assets $3,872.6 $3,581.2 $3,770.6
======= ======= =======
Depreciation and depletion:
Alumina $ 59.7 $ 55.4 $ 56.8
Aluminum 57.5 52.3 48.3
Sales and distribution .5 .5 .5
------- ------- -------
Total depreciation and depletion $ 117.7 $ 108.2 $ 105.6
======= ======= =======
Capital expenditures:
Alumina $ 146.9 $ 156.2 $ 188.6
Aluminum 34.1 47.8 56.0
Sales and distribution 1.2 1.3 .4
------- ------- -------
Total capital expenditures $ 182.2 $ 205.3 $ 245.0
======= ======= =======
<FN>
(1) Includes sales to one U.S. customer of $201.9 in 1993, $213.2 in
1992, and 234.5 in 1991.
(2) Transfers between segments are based on generally prevailing
market prices.
Geographic area information
1993 1992 1991
Revenues from customers and related parties:
Pacific $1,674.5 $1,647.9 $1,977.2
Europe 496.2 374.7 382.2
The Americas (1) 399.5 423.8 479.0
------- ------- -------
Total sales and operating revenues $2,570.2 $2,446.4 $2,838.4
======= ======= =======
Operating profit:
Pacific $ 390.2 $ 301.7 $ 466.4
Europe (1.6) .6 19.7
The Americas 22.9 40.4 46.9
------- ------- -------
Total operating profit $ 411.5 $ 342.7 $ 533.0
======= ======= =======
Identifiable assets:
Pacific $2,298.7 $2,260.9 $2,559.0
Europe 400.3 308.1 289.3
The Americas 99.7 95.0 68.5
Corporate assets 925.8 760.0 716.4
Investments 148.1 157.2 137.4
------- ------- -------
Total assets $3,872.6 $3,581.2 $3,770.6
======= ======= =======
Capital expenditures:
Pacific $ 159.6 $ 181.6 $ 228.3
Europe 22.2 22.6 16.6
The Americas .4 1.1 .1
------- ------- -------
Total capital expenditures $ 182.2 $ 205.3 $ 245.0
======= ======= =======
<FN>
(1) Principally export sales
J. Related Party Transactions
AIHC is controlled by Alcoa. The terms for all transactions
between Alcoa and AIHC were established by negotiation between the
parties and reflect terms comparable to transactions with unrelated
third parties.
AIHC incurred charges of $452.7 in 1993, $507.3 in 1992 and
$549.5 in 1991 from Alcoa, principally for products purchased by
the selling companies.
Receivables from Alcoa totaled $28.5 at year-end 1993 and
$30.9 at year-end 1992. Trade accounts payable to Alcoa totaled
$52.5 at year-end 1993 and $58.3 at year-end 1992.
AIFC earned interest income of $31.9 in 1993, $35.6 in 1992
and $41.0 in 1991 from loans to Alcoa which totaled $914.8 at
year-end 1993. Since Alcoa controls AIHC, and currently intends
to continue renewing these notes, they have been classified as
noncurrent. The terms of the notes are:
Face amount Maturity date Annual Interest rate
$400.0 June 30, 1996 3.64% *
100.0 March 31, 1994 3.75%
50.0 March 31, 1994 3.66%
50.0 March 31, 1994 3.92%
314.8 On Demand 3.91% **
-----
$914.8
=====
<FN>
* Effective rate as of December 31, 1993. Rate varies quarterly
based on market rates.
**Effective rate as of December 31, 1993. Rate varies monthly
based on market rates.
Alcoa Nederland Finance B.V. (ANF), an Alcoa subsidiary, has
loan commitments to subsidiaries of AIHC for 50 million Dutch
guilders, 11 million pounds sterling, 5 million deutschmarks
and 25 million Belgian francs. At December 31, 1993 ANF had
loaned 44 million Dutch guilders at 6.09%, 6.7 million pounds
sterling at 5.8%, 4 million deutschmarks at 6.81% and 15
million Belgian francs at 6.74%, or the equivalent of $35.7.
K. Interest Cost Components
1993 1992 1991
Charged to expense $ 23.4 $ 20.6 $ 30.3
Capitalized .3 7.1 5.2
----- ----- -----
Total $ 23.7 $ 27.7 $ 35.5
===== ===== =====
L. Lease Expense
Certain equipment, and warehousing and office space, are
under operating lease agreements. Total expense for all
leases was $13.5 in 1993, $14.8 in 1992 and $12.6 in 1991.
Under long-term leases, minimum annual rentals are $5.5 in
1994, $4.6 in 1995, $4.6 in 1996, $3.4 in 1997, $4.4 in 1998
and a total of $5.3 for 1999 and thereafter.
M. Pension Plans
AofA maintains pension plans covering most of its
employees. Pension benefits generally depend upon length of
service, job grade or remuneration and certain other benefits.
Substantially all benefits are paid through pension trusts
that are sufficiently funded to ensure that all plans have
adequate funds to pay benefits to retirees as they become due.
Pension costs for AofA's plans include the following
components:
1993 1992 1991
Benefits earned $21.0 $20.3 $21.5
Interest accrued on projected benefit
obligation 13.3 13.5 14.3
Net amortization (1.4) (1.8) .1
---- ---- ----
32.9 32.0 35.9
Less: Expected return on plan assets* 17.0 17.9 15.7
Employee contributions 5.5 6.1 6.2
---- ---- ----
Total $10.4 $ 8.0 $14.0
==== ==== ====
<FN>
*The actual returns were higher than the expected return by
$29.5 in 1993, $1.8 in 1992 and $15.0 in 1991 and were deferred
as actuarial gains.
The status of AofA's pension plans at December 31 follows.
1993 1992
Accumulated benefit
obligation, primarily vested $185.8 $168.4
===== =====
Plan assets, primarily stocks and bonds, at market 222.5 175.4
Projected benefit obligation 201.8 176.9
----- -----
Plan assets greater (less) than
projected benefit obligation 20.7 (1.5)
Unrecognized:
Transition (assets) obligations (19.3) (22.1)
Prior service costs 6.0 6.9
Actuarial losses, net (2.8) 20.3
----- -----
Prepaid (accrued) pension cost $ 4.6 $ 3.6
===== =====
The following assumptions were used to determine the projected
benefit obligation and plan assets.
December 31 1993 1992 1991
Settlement discount rate 8.0% 8.5% 9.0%
Long-term rate for compensation increases 6.0% 6.5% 8.0%
Long-term rate of return on plan assets 9.5% 10.0% 10.5%
N. Provision for Income Taxes
As discussed in Note A, AIHC implemented SFAS 109 as of
January 1, 1992 and the cumulative effect of this change is
reported in 1992 earnings. Prior years' financial statements
have not been restated.
The components of income before taxes on income were:
1993 1992 1991
U.S. $ 30.8 $ 34.8 $ 40.9
Foreign 426.0 388.6 562.2
----- ----- -----
$456.8 $423.4 $603.1
===== ===== =====
The provision for taxes on income consisted of:
1993 1992 1991
Current
U.S. Federal* $ 14.5 $ 32.2 $ 30.6
Foreign 134.3 132.1 168.6
State and local .1 .9 1.2
----- ----- -----
148.9 165.2 200.4
Deferred
Foreign (48.6) (17.5) 15.6
----- ----- -----
Total $100.3 $147.7 $216.0
===== ===== =====
<FN>
* Includes U.S. taxes related to foreign income
Deferred taxes in 1993 included a credit of $41.6 for statutory
tax rate adjustments in Australia.
The reconciliation of the effective tax rate to the U.S. federal
statutory rate follows.
1993 1992 1991
U.S. federal statutory rate (%) 35.0 34.0 34.0
Taxes on foreign income (2.7) (1.3) 1.2
Adjustment of prior years' U.S. tax (.2) 2.1 .6
Australia tax rate change (9.1) - -
Other (1.0) .1 -
---- ---- ----
Effective tax rate (%) 22.0 34.9 35.8
The components of net deferred tax assets and liabilities at
December 31,1993 and 1992 follow.
1993 Deferred 1993 Deferred 1992 Deferred 1992 Deferred
tax assets tax liabilities tax assets tax liabilities
Depreciation - $255.8 - $293.1
Employee benefits $23.4 - $19.5 -
Loss provisions 15.7 - 9.1 -
Deferred income 16.1 28.8 15.7 51.5
Tax loss carryforwards 22.1 - 19.7 -
Other 3.3 12.9 12.1 9.2
---- ----- ---- -----
80.6 297.5 76.1 353.8
Valuation allowance (21.3) - (9.1) -
---- ----- ---- -----
$59.3 $297.5 $67.0 $353.8
==== ===== ==== =====
Of the tax loss carryforwards, $16.5 expire over the next 10 years
and $5.6 is unlimited. A substantial portion of the valuation
allowance is for these carryforwards because the ability to utilize a
portion of them is uncertain.
Deferred income taxes provided for timing differences in the
recognition of revenue and expenses for tax and financial statement
purposes prior to the new accounting rules follow.
1991
Depreciation $ 25.6
Other (10.0)
-----
$ 15.6
=====
The cumulative amount of undistributed earnings for which no
deferred taxes have been provided was $892.9 at December 31, 1993.
Management has no plans to distribute such earnings in the
foreseeable future. It is not practicable to determine the deferred
tax liability on these earnings.
O. Financial Instruments
At December 31, 1993 AIHC had open currency exchange commitments
consisting of purchase contracts of $291.6 and sell contracts of
$864.0. These contracts are part of a worldwide program to minimize
volatility in foreign exchange operating income and balance sheet
exposure. These contracts generally mature within twelve months and
are principally unsecured forward exchange contracts.
The methods used to determine the fair value of certain financial
instruments follow.
Cash and Short-term Investments. The carrying amount
approximates fair value because of the short maturity of the
instruments.
Investments and Non-current Receivables. The majority of
AIHC's investments represent equity interests in various
companies and joint ventures for which there is no quoted market
price. To estimate the fair value of these investments, AIHC
would have had to incur excessive costs. The fair value of non-
current receivables is based on anticipated cash flows.
Long-term Debt. The fair value of long-term debt is based
on interest rates that are currently available to AIHC for
issuance of debt with similar terms and remaining maturities.
The fair value of recorded financial instruments, excluding
investments, does not materially differ from the values reflected
on the books.
P. Subsequent Event
In February 1994, AofA announced reductions of 25,000 mt at
the Point Henry smelter in Geelong, Australia and 26,000 mt at
the Portland, Australia smelter. AofA has a 45% interest in the
Portland smelter.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
None.
PART III
Item 10. Directors and Executive Officers of the Registrant.
The information regarding Executive Officers and Directors is
set forth below.
Richard L. Fischer--Director and President of AIHC. Mr. Fischer,
57, has served as a director since the Company's formation in
1987 and as Vice President until 1991 when he was elected
President of the Company. He is Executive Vice President-
Chairman's Counsel of Alcoa and served as Senior Vice President
and General Counsel from 1984 to 1991. From 1985 through 1989
Mr. Fischer also had responsibility for Government and Public
Affairs for Alcoa. He was given additional responsibilities in
1986 for Corporate Development and in 1989 for Alcoa's expansion
activities in Europe and Asia.
Jeffrey J. Hodgman--Director of AIHC. Mr. Hodgman, 50, is Senior
Vice President - Corporate Investmenst of Metropolitan Life
Insurance Company. He has served as a director of the Company
since August 1988. He became Senior Vice President - Corporate
Investments of Metropolitan on January 1, 1993 after having
served as Senior Vice President - Corporate Planning of
Metropolitan since January 1990, Senior Vice President -
Portfolio Strategies since 1986 and Vice President - Asset
Management Group since 1983. He is President and Chief Executive
Officer of Metropolitan Series Fund, Inc., and is a director of
several other Metropolitan subsidiaries.
Jan H. M. Hommen--Director and Executive Vice President of AIHC.
Mr. Hommen, 50, is Executive Vice President and Chief Financial
Officer of Alcoa. He served as Alcoa Vice President and
Treasurer from 1986 to 1991 and Assistant Treasurer-Corporate
Finance beginning in 1979. Prior to 1979, Mr. Hommen was
Financial Director of Alcoa Nederland B.V.
John E. Wilson, Jr.--Director, Vice President and Treasurer of
AIHC (not an executive officer). Mr. Wilson, 38, was elected to
his current positions in 1991. Prior to that, he served as an
employee of Alcoa in various positions including Manager of
Finance from 1990-1991, Analyst-Corporate Finance from 1985-1990,
Credit Representative from 1982-1985 and Product Accountant from
1980-1982. Prior to working for Alcoa, Mr. Wilson was Adjunct
Professor of Finance and Economics at Clarkson College.
Item 11. Executive Compensation.
One individual who serves as a director and officer receives
compensation from the Company in his capacity as an officer. The
remaining directors and executive officers of the Company do not
and will not receive any compensation from the Company except
that directors who are not also employees or officers of Alcoa or
one of Alcoa's subsidiaries may be entitled to directors' fees in
amounts established from time to time by the Board. All
directors will be reimbursed for expenses reasonably incurred in
connection with their services as directors of the Company. None
of the directors and executive officers of the Company receives
or will receive any additional compensation from Alcoa or any of
its affiliates for services rendered on behalf of the Company.
The Company will compensate Alcoa for the time during which any
salaried officer or employee of Alcoa performs services for the
Company. There are no family relationships among or between the
Company's directors and officers.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
No officer or director of the Company owns any shares of its
capital stock.
The following table sets forth information regarding
beneficial ownership of the Company's voting securities as of
March 15, 1994 by each person who is known to the Company to be
the owner of more than five percent of either class of the
Company's voting securities, based on the records of the Company
and the position listing of such securities held in nominee name.
Title of Class Name and Address of Number of Percent
Owner or Participant Shares Owned of Class
Common Stock Aluminum Company of America *7,634 100
425 Sixth Avenue
Alcoa Building
Pittsburgh, PA 15219-1850
Preferred Stock Metropolitan Life Insurance 1,000,000 40
Company
One Madison Avenue
New York, NY 10010
Chemical Bank/MHT 295,000 11.8
270 Park Avenue
31st Floor
New York, NY 10017
Chase Manhattan Bank, N.A. 220,000 8.8
1 Chase Manhattan Plaza
3-B/Proxy Department
New York, NY 10081
Citibank, N.A. 201,000 8.0
111 Wall Street
20th Floor, Zone 9
New York, NY 10043
Bankers Trust Company 171,000 6.8
Corporate Securities Services
16 Wall Street - Level D
New York, NY 10005
Continental Bank, National 150,000 6.0
Association-Trust
231 S. LaSalle Street
Proxy/18th Floor
Chicago, IL 60697
<FN>
*Alcoa Securities Corporation, a wholly owned Alcoa subsidiary, holds a
portion of the securities.
Item 13. Certain Relationships and Related Transactions.
AIHC and its subsidiaries are parties to certain purchase,
sale, administrative service, management, loan and other
agreements and arrangements with Alcoa. Alcoa is the principal
supplier of products sold by the Company's sales and distribution
subsidiaries. Alcoa is one of the largest customers for alumina
produced by AofA. In 1993 purchases by Alcoa from and fees paid
to subsidiaries of the Company totaled $121 million; sales by
Alcoa to such entities (principally for resale) and commissions
on agency sales totaled $453 million. At February 28, 1994
outstanding loans of $891 million had been made to Alcoa by a
wholly owned Delaware subsidiary, AIFC, on terms, including
interest rates, believed by the Company to approximate those
available to Alcoa for comparable short-term borrowings from
unrelated parties. See Note J.
In order to address certain potential conflicts of interest
between the Company and Alcoa, the Company's Restated Certificate
of Incorporation contains provisions regulating and defining the
conduct of certain affairs of the Company as they may involve
Alcoa and its officers and directors, and the powers, rights,
duties and liabilities of the Company and its officers, directors
and stockholders in connection therewith. In general, these
provisions recognize that from time to time the Company and Alcoa
may engage in the same or similar activities or lines of
business, have an interest in the same areas of corporate
opportunities, and enter into contracts and otherwise transact
business with each other. The provisions also describe the
obligations of officers and directors of the Company with respect
to corporate opportunities and contracts and limit the liability
of directors of the Company to the Company or its stockholders to
the fullest extent permitted by the law. Directors of the
Company who are also officers or directors of Alcoa will not be
liable to the Company or its stockholders for breach of any
fiduciary duty if the directors comply with the provisions of the
Restated Certificate of Incorporation.
The Company's By-laws contain detailed indemnification rights
and procedures for its directors and officers and the Company has
entered into or will enter into individual indemnity agreements
with each of its present and future directors and officers which
provide for indemnification to the fullest extent permitted by
law.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K.
(a) The financial statements, financial statement schedules
and exhibits listed below are filed as part of this Form 10-K.
(1) Financial Statements.
Report of Independent Certified Public Accountants
Statements of consolidated income and retained earnings
for the years ended December 31, 1993, 1992 and 1991
Consolidated balance sheet, December 31, 1993 and 1992
Statement of consolidated cash flows for the years
ended December 31, 1993, 1992 and 1991
Notes to financial statements
(2) Financial Statement Schedules.
Schedules V, VI, VIII, IX and X for the fiscal years ended
December 31, 1993, 1992 and 1991.
Schedule No. Schedule Title
V Properties, Plants and Equipment
VI Accumulated Depreciation, Depletion and
Amortization of Properties, Plants
and Equipment
VIII Valuation and Qualifying Accounts
IX Short-Term Borrowings
X Supplementary Income Statement Information
Schedules other than those referred to above are omitted
because they are not required or the information is included in
the notes to financial statements.
(b) Reports on Form 8-K. None were filed in the fourth
quarter of 1993.
(c) Exhibits.
Exhibit
Number
Description*
3(i). Amended Certificate of Incorporation of the Registrant.
3(ii). By-Laws of the Registrant.
4(a). Certificate of Designation with respect to the
Registrant's Variable Term Voting Preferred Stock
(Exchange), Series A, Series B and Series C, as amended,
incorporated by reference to exhibit 4(a) to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1988.
4(b). Certificate of Designation with respect to the
Registrant's Voting Preferred Stock, Series I and Series
II, incorporated by reference to exhibit 4.3 to
Registration Statement No. 33-23092 on Form S-4.
4(c). Revolving Underwriting Facility Agreement, dated January
12, 1990, among Alcoa of Australia Limited and various
financial institutions, incorporated by reference to
exhibit 4(c) to the Company's Annual Report on Form 10-K
for the year ended December 31, 1989.
4(d). Euro-Commercial Paper Programme, dated January 12, 1990,
among Alcoa of Australia Limited and various financial
institutions, incorporated by reference to exhibit 4(d)
to the Company's Annual Report on Form 10-K for the year
ended December 31, 1989.
4(e). Dealer Agreement with respect to the Euro-Commercial
Paper Programme, dated June 20, 1990, among Alcoa of
Australia Limited and various financial institutions,
incorporated by reference to exhibit 4(e) the Company's
Annual Report on Form 10-K for the year ended December
31, 1990.
4(f). Certificate of Amendment of Certificate of Designations
with respect to the Registrant's Variable Term Voting
Preferred Stock (Exchange), Series A, Series B and
Series C, as amended, incorporated by reference to
exhibit 4(f) of the Company's Annual Report on Form 10-K
for the year ended December 31, 1991.
10(a). Alcoa of Australia Limited Shareholders' Agreement,
dated December 16, 1987, between the Registrant and
Western Mining Corporation Holdings Limited,
incorporated by reference to exhibit 10.1 to
Registration Statement No. 33-23092 on Form S-4.
10(b). Form of Indemnity Agreement between the Registrant and
each of its directors and officers, incorporated by
reference to exhibit 10.2 to Registration Statement No.
33-23092 on Form S-4.
10(c). Amended and Restated Term Loan Agreement, dated as of
December 1, 1991, between Alcoa International Finance
Company and Aluminum Company of America, incorporated by
reference to exhibit 10(c) of the Company's Annual
Report on Form 10-K for the year ended December 31,
1991.
10(d). Management Services Agreement between the Registrant and
Aluminum Company of America, effective as of December
31, 1987, incorporated by reference to exhibit 10.5 to
Registration Statement No. 33-23092 on Form S-4.
10(e). Secret Process and Technical Information Agreement,
dated November 13, 1961, between Alcoa of Australia
Proprietary Limited (now Alcoa of Australia Limited) and
Aluminum Company of America, incorporated by reference
to exhibit 10.6 to Registration Statement No. 33-23092
on Form S-4.
10(f). Alumina Refinery Agreements--Western Australia,
incorporated by reference to exhibit 10.7 to
Registration Statement No. 33-23092 on Form S-4.
10(g). Alumina Supply Agreement, dated January 3, 1989, between
Alcoa of Australia Limited and Aluminum Company of
America, incorporated by reference to exhibit 10(h) to
the Company's Annual Report on Form 10-K for the year
ended December 31, 1988.
10(h). Third Amendment, effective as of September 1, 1991, to
the Management Services Agreement between the Registrant
and Aluminum Company of America dated as of December 31,
1987, incorporated by reference to exhibit 10(h) of the
Company's Annual Report on Form 10-K for the year ended
December 31, 1991.
10(i). Amended and Restated Demand Loan Agreement, dated as of
April 1, 1990, between Alcoa International Finance
Company and Aluminum Company of America, incorporated by
reference to exhibit 10(j) to the Company's Annual
Report on Form 10-K for the year ended December 31,
1990.
10(j). Amendment to Amended and Restated Demand Loan Agreement,
dated as of December 1, 1991, between Alcoa
International Finance Company and Aluminum Company of
America, incorporated by reference to exhibit 10(j) of
the Company's Annual Report on Form 10-K for the year
ended December 31, 1991.
10(k). Management Services Agreement between the Registrant and
Three Rivers Insurance Company, effective as of
September 1, 1991, incorporated by reference to exhibit
10(k) of the Company's Annual Report on Form 10-K for
the year ended December 31, 1991.
10(l). Management Services Agreement between Three Rivers
Insurance Company and the Registrant, effective as of
September 1, 1991, incorporated by reference to exhibit
10(l) of the Company's Annual Report on Form 10-K for
the year ended December 31, 1991.
10(m). Amendment to the Dealer Agreement with respect to the
Euro-Commercial Paper Programme, dated January 14, 1991,
among Alcoa of Australia Limited and various financial
institutions, incorporated by reference to exhibit 10(m)
of the Company's Annual Report on Form 10-K for the year
ended December 31, 1991.
12. Computation of Ratio of Earnings to Fixed Charges and
Preferred Stock Dividend Requirements.
21. Subsidiaries of the Registrant.
*There are no management contracts or compensatory plans filed as
Exhibits to this Form 10-K.
Amendments and modifications to other Exhibits previously
filed have been omitted when in the opinion of the Registrant
such Exhibits as amended or modified are no longer material or,
in certain instances, are no longer required to be filed as
exhibits.
No other instruments defining the rights of holders of long-
term debt of the Registrant or its subsidiaries have been filed
as exhibits because no such instruments met the threshold
materiality requirements under Regulation S-K. The Registrant
agrees, however, to furnish a copy of any such instruments to the
Commission upon request.
(d) Financial Statement Schedules.
SCHEDULE V - PROPERTIES, PLANTS AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31
(in millions)
Col. A Col. B Col. C Col. D Col. E Col. F
Balance at Other Balance at
beginning of Additions changes add end of
Classification period at cost Retirements (deduct) (C) period
Year 1993:
Land and land rights, $ 46.5 $ .8 $ .2 $ (1.2) $ 48.0
including mines 2.1 (E)
Structures 654.7 37.0 .7 (18.4) 710.3
(13.1)(D)
50.8 (E)
Machinery and equipment 1,589.8 138.8 24.1 (39.9) 1,731.4
(9.4)(D)
76.2 (E)
Construction work in progress 68.5 5.3(B) - (2.4) 72.7
1.3 (E)
------- ----- ---- ----- -------
$2,359.5 $181.9 $25.0 $ 46.0 $2,562.4
======= ===== ==== ===== =======
Year 1992:
Land and land rights, $ 50.4 $ .4 $ .1 $ (4.2) $ 46.5
including mines
Structures 664.8 52.6 .9 (61.8) 654.7
Machinery and equipment 1,504.6 243.1 17.7 (140.2) 1,589.8
Construction work in progress 180.9 (90.9)(B) - (21.2) 68.5
(.3)(D)
------- ----- ---- ----- -------
$2,400.7 $205.2 $18.7 $(227.7) $2,359.5
======= ===== ==== ====== =======
Year 1991:
Land and land rights, $ 63.4 $ .2 $ .1 $ (14.2) $ 50.4
including mines 1.1 (E)
Structures 846.8 20.0 1.6 (202.2) 664.8
.1 (D)
1.7 (E)
Machinery and equipment 1,790.8 88.8 21.4 (339.8) 1,504.6
(14.6)(D)
.8 (E)
Construction work in progress 50.4 135.4(B) - (4.9) 180.9
------- ----- ---- ------ -------
$2,751.4 $244.4 $23.1 $(572.0) $2,400.7
======= ===== ==== ====== =======
<FN>
Notes: (A) Depreciation of structures, machinery and equipment is provided on
the straight-line method at rates ranging from 2% to 25%
(B) Net increase (decrease) during period
(C) Translation (including AofA functional currency change in 1991),
unless otherwise noted
(D) Transfers from other accounts
(E) Sale or acquisition of subsidiaries
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND
AMORTIZATION OF PROPERTIES, PLANTS AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31
(in millions)
Col. A Col. B Col. C Col. D Col. E Col. F
Additions Other
Balance at charged to changes Balance at
beginning of costs and add end of
Classification period expenses Retirements (deduct) (A) period
Year 1993:
Land and land rights, including mines $ 5.8 $ .6 - $ (.1) $ 6.3
Structures 256.2 25.7 $ .5 (4.9) 280.2
2.9 (C)
.8 (D)
Machinery and equipment 614.7 87.9 21.2 (15.2) 684.9
14.2 (C)
4.5 (D)
------- ----- ---- ------- -----
$ 876.7 $114.2(B) $21.7 $ 2.2 $971.4
======= ===== ==== ======= =====
Year 1992:
Land and land rights, including mines $ 5.6 $ .7 - $ (.5) $ 5.8
Structures 255.7 25.7 $ .6 (24.6) 256.2
Machinery and equipment 610.7 77.9 15.7 (58.2) 614.7
------- ----- ---- ------ -----
$ 872.0 $104.3(B) $16.3 $ (83.3) $876.7
======= ===== ==== ====== =====
Year 1991:
Land and land rights, including mines $ 6.7 $ .8 - $ (1.9) $ 5.6
Structures 326.0 25.5 $ 1.0 (95.1) 255.7
.3 (C)
Machinery and equipment 759.9 75.2 16.3 (206.1) 610.7
.4 (C)
(2.4)(D)
------- ----- ---- ------ -----
$1,092.6 $101.5(B) $17.3 $(304.8) $872.0
======= ===== ==== ====== =====
<FN>
Notes: (A) Translation (including AofA functional currency change in
1991), unless otherwise noted
(B) Depreciation expense shown on the income statement includes
amortization of patents and other intangibles of $3.5 in
1993, $3.9 in 1992 and $4.1 in 1991
(C) Sale or acquisition of subsidiaries
(D) Transfers from other accounts
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31
(in millions)
Col. A Col. B Col. C Col. D Col. E
Additions
Balance at Charged to Charged to
beginning of costs and other Balance at
Description period expenses accounts (A) Deductions (B) end of period
Allowance for doubtful accounts:
1993 $7.6 $ 4.7 $ (.4) $ .7 $11.3
.1 (C)
1992 $7.5 $ 1.4 $ (.6) $ .7 $ 7.6
1991 $7.3 $ 1.1 $ .1 (C) $ 1.0 $ 7.5
Income tax valuation allowance:
1993 $9.1 $12.2 - - $21.3
1992 - $ 9.1 - - $ 9.1
<FN>
Notes: (A) Translation adjustments, unless otherwise noted
(B) Uncollectible accounts written off
(C) Acquisition of subsidiaries
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE YEARS ENDED DECEMBER 31
(in millions)
Col. A Col. B
Item Charged to costs and expenses
1993 1992 1991
Maintenance and repairs $214.1 $222.5 $228.1
SCHEDULE IX - SHORT-TERM BORROWINGS
FOR THE YEARS ENDED DECEMBER 31
(in millions)
Col. A Col. B Col. C Col. D Col. E Col. F
Maximum Average Weighted
amount amount average
Balance at Weighted outstanding outstanding interest rate
Category of aggregate end of average during the during the during the
short-term borrowings (A) period interest rate period period (B) period (C)
Year 1993:
Payable to banks:
Australia $ - - $ 14.4 $ 9.9 4.77%
Other 19.1 7.91% 19.0 8.6 7.41
Related Parties 34.5 6.06 46.2 40.2 6.79
Commercial paper 75.9 3.39 132.8 87.7 3.41
-----
$129.5
=====
Year 1992:
Payable to banks:
Australia $ 12.8 10.00% $ 15.7 $12.0 10.67%
Other 3.2 8.99 13.0 7.1 10.22
Related parties 37.2 8.94 47.2 40.4 9.60
Commercial paper 33.1 3.48 50.0 28.4 5.85
-----
$ 86.3
=====
Year 1991:
Payable to banks:
Australia $ 21.6 12.25% $ 83.4 $19.9 14.25%
Other 3.3 12.33 51.7 42.7 15.31
Related parties 48.4 10.00 48.4 33.0 9.50
Commercial paper 40.3 12.45 64.7 23.0 9.62
-----
$113.6
=====
<FN>
Notes: (A) Terms range from demand to 90 days
(B) Computed by calculating an arithmetical average of month-
end borrowings during the year
(C) Computed by dividing interest expense applicable to the
debt by average borrowings outstanding
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
ALCOA INTERNATIONAL HOLDINGS
COMPANY
March 24, 1994 By /s/John E. Wilson, Jr.
John E. Wilson, Jr.
Vice President and Treasurer
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities and on
the dates indicated.
Signature Title Date
/s/ RICHARD L. FISCHER
Richard L. Fischer President and Director March 24, 1994
(Principal Executive
Officer)
/s/ JAN H. M. HOMMEN
Jan H. M. Hommen Director and March 24, 1994
Executive Vice
President (Principal
Financial Officer and
Principal Accounting
Officer)
/s/ JOHN E. WILSON, JR.
John E. Wilson, Jr. Director March 24, 1994
/s/ JEFFREY J. HODGMAN
Jeffrey J. Hodgman Director March 24, 1994
Supplemental Information to be Furnished With Reports Filed Pursuant
to Section 15(d) of the Act by Registrants Which Have Not Registered
Securities Pursuant to Section 12 of the Act.
No annual report, proxy statement, form of proxy or other proxy
soliciting materials have been sent to the Company's security
holders. The Company intends to furnish to security holders
subsequent to the filing of this Annual Report on Form 10-K a
copy of this Annual Report along with proxy soliciting materials.
The Company intends to provide the Commission with copies of such
proxy materials at a later date when they have been sent to
security holders.
Exhibit 12
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND PREFERRED STOCK DIVIDEND REQUIREMENTS
(in millions, except ratios)
For the years ended December 31 1993 1992 1991 1990 1989
Earnings:
Income before taxes on income, equity
income and accounting changes $456.8 $423.4 $603.1 $1,042.6 $1,091.8
Fixed charges added to net income 31.0 30.6 41.4 58.1 61.5
Proportionate share of income (loss)
of 50%-owned persons (15.1) (13.5) (2.5) (6.8) 24.6
Distributed income of less than
50%-owned persons - - - - -
Amortization of capitalized interest 4.8 5.4 5.0 .9 5.9
----- ----- ----- ------- -------
Total earnings $477.5 $445.9 $647.0 $1,094.8 $1,183.8
===== ===== ===== ======= =======
Fixed Charges:
Interest expense:
Consolidated $ 23.4 $ 20.6 $ 30.3 $ 47.1 $ 51.3
Proportionate share of 50%-owned
persons 4.6 6.0 7.6 7.1 7.5
----- ----- ----- ------- -------
28.0 26.6 37.9 54.2 58.8
----- ----- ----- ------- -------
Amount representative of the interest
factor in rent:
Consolidated 3.0 3.9 3.2 3.8 2.5
Proportionate share of 50%-owned
persons - .1 .3 .1 .2
----- ----- ----- ------- -------
3.0 4.0 3.5 3.9 2.7
----- ----- ----- ------- -------
Fixed charges added to net income 31.0 30.6 41.4 58.1 61.5
Interest capitalized .3 7.1 5.2 - -
Preferred stock dividend requirements 16.6 25.7 30.0 33.6 35.7
----- ----- ----- ------- -------
Total fixed charges $ 47.9 $ 63.4 $ 76.6 $ 91.7 $ 97.2
===== ===== ===== ======= =======
Ratio 10.0 7.03 8.45 11.94 12.18
===== ===== ===== ======= =======
Exhibit 21
SUBSIDIARIES AND EQUITY ENTITIES OF THE REGISTRANT
(As of December 31, 1993)
State or
country of
Name organization
Alcoa Asia Limited Delaware
Alcoa Inter-America, Inc. Delaware
Alcoa International Finance Company Delaware
Alcoa International, S.A. Switzerland
Alcoa International (Asia) Limited Hong Kong
Alcoa S.A. Switzerland
Alcoa Italia S.p.A. Italy
Alcoa Japan Limited Japan
Alcoa-Kofem Kft Hungary
Alcoa Nederland Holding B.V. The Netherlands
Alcoa Extruded Products (UK) Limited United Kingdom
Alcoa Systems (UK) Limited United Kingdom
Alcoa Nederland France S.A.R.L. France
Alcoa Nederland Investments B.V. The Netherlands
Alcoa Nederland B.V. The Netherlands
Alcoa Systems B.V. The Netherlands
Allpro B.V. The Netherlands
Alumet Etten B.V. The Netherlands
Burgerhout B.V. The Netherlands
Intal B.V. The Netherlands
Intransit B.V. The Netherlands
Sypla Systeem-Planning B.V. The Netherlands
Extrusion De Aluminio S.A. Spain
Alcoa of Australia Limited Australia
A.F.P. Pty. Limited Australia
Hedges Gold Pty. Ltd. Australia
Alcoa of Australia (Asia) Limited Hong Kong
Coala Insurance Company Limited Cayman Islands
Portland Smelter Services Pty. Ltd. Australia
Alutodo, S.A. de C.V. Mexico
Kobe Alcoa Transportation Products, Ltd. Japan
KSL Alcoa Aluminum Company, Ltd. Japan
Norsk Alcoa A/S Norway
Elkem Aluminium ANS Norway
The names of certain subsidiaries which, considered in the
aggregate, would not constitute a significant subsidiary, have
been omitted from the above list.
EXHIBIT INDEX
Exhibit
Number
Description
3(i). Amended Certificate of Incorporation of the Registrant.
3(ii). By-Laws of the Registrant.
4(a). Certificate of Designation with respect to the
Registrant's Variable Term Voting Preferred Stock
(Exchange), Series A, Series B and Series C, as amended,
incorporated by reference to exhibit 4(a) to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1988.
4(b). Certificate of Designation with respect to the
Registrant's Voting Preferred Stock, Series I and Series
II, incorporated by reference to exhibit 4.3 to
Registration Statement No. 33-23092 on Form S-4.
4(c). Revolving Underwriting Facility Agreement, dated January
12, 1990, among Alcoa of Australia Limited and various
financial institutions, incorporated by reference to
exhibit 4(c) to the Company's Annual Report on Form 10-K
for the year ended December 31, 1989.
4(d). Euro-Commercial Paper Programme, dated January 12, 1990,
among Alcoa of Australia Limited and various financial
institutions, incorporated by reference to exhibit 4(d)
to the Company's Annual Report on Form 10-K for the year
ended December 31, 1989.
4(e). Dealer Agreement with respect to the Euro-Commercial
Paper Programme, dated June 20, 1990, among Alcoa of
Australia Limited and various financial institutions,
incorporated by reference to exhibit 4(e) the Company's
Annual Report on Form 10-K for the year ended December
31, 1990.
4(f). Certificate of Amendment of Certificate of Designations
with respect to the Registrant's Variable Term Voting
Preferred Stock (Exchange), Series A, Series B and
Series C, as amended, incorporated by reference to
exhibit 4(f) of the Company's Annual Report on Form 10-K
for the year ended December 31, 1991.
10(a). Alcoa of Australia Limited Shareholders' Agreement,
dated December 16, 1987, between the Registrant and
Western Mining Corporation Holdings Limited,
incorporated by reference to exhibit 10.1 to
Registration Statement No. 33-23092 on Form S-4.
10(b). Form of Indemnity Agreement between the Registrant and
each of its directors and officers, incorporated by
reference to exhibit 10.2 to Registration Statement No.
33-23092 on Form S-4.
10(c). Amended and Restated Term Loan Agreement, dated as of
December 1, 1991, between Alcoa International Finance
Company and Aluminum Company of America, incorporated by
reference to exhibit 10(c) of the Company's Annual
Report on Form 10-K for the year ended December 31,
1991.
10(d). Management Services Agreement between the Registrant and
Aluminum Company of America, effective as of December
31, 1987, incorporated by reference to exhibit 10.5 to
Registration Statement No. 33-23092 on Form S-4.
10(e). Secret Process and Technical Information Agreement,
dated November 13, 1961, between Alcoa of Australia
Proprietary Limited (now Alcoa of Australia Limited) and
Aluminum Company of America, incorporated by reference
to exhibit 10.6 to Registration Statement No. 33-23092
on Form S-4.
10(f). Alumina Refinery Agreements--Western Australia,
incorporated by reference to exhibit 10.7 to
Registration Statement No. 33-23092 on Form S-4.
10(g). Alumina Supply Agreement, dated January 3, 1989, between
Alcoa of Australia Limited and Aluminum Company of
America, incorporated by reference to exhibit 10(h) to
the Company's Annual Report on Form 10-K for the year
ended December 31, 1988.
10(h). Third Amendment, effective as of September 1, 1991, to
the Management Services Agreement between the Registrant
and Aluminum Company of America dated as of December 31,
1987, incorporated by reference to exhibit 10(h) of the
Company's Annual Report on Form 10-K for the year ended
December 31, 1991.
10(i). Amended and Restated Demand Loan Agreement, dated as of
April 1, 1990, between Alcoa International Finance
Company and Aluminum Company of America, incorporated by
reference to exhibit 10(j) to the Company's Annual
Report on Form 10-K for the year ended December 31,
1990.
10(j). Amendment to Amended and Restated Demand Loan Agreement,
dated as of December 1, 1991, between Alcoa
International Finance Company and Aluminum Company of
America, incorporated by reference to exhibit 10(j) of
the Company's Annual Report on Form 10-K for the year
ended December 31, 1991.
10(k). Management Services Agreement between the Registrant and
Three Rivers Insurance Company, effective as of
September 1, 1991, incorporated by reference to exhibit
10(k) of the Company's Annual Report on Form 10-K for
the year ended December 31, 1991.
10(l). Management Services Agreement between Three Rivers
Insurance Company and the Registrant, effective as of
September 1, 1991, incorporated by reference to exhibit
10(l) of the Company's Annual Report on Form 10-K for
the year ended December 31, 1991.
10(m). Amendment to the Dealer Agreement with respect to the
Euro-Commercial Paper Programme, dated January 14, 1991,
among Alcoa of Australia Limited and various financial
institutions, incorporated by reference to exhibit 10(m)
of the Company's Annual Report on Form 10-K for the year
ended December 31, 1991.
12. Computation of Ratio of Earnings to Fixed Charges and
Preferred Stock Dividend Requirements.
21. Subsidiaries of the Registrant.