SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (earliest event reported): July 8, 1998
ALUMINUM COMPANY OF AMERICA
(Exact name of registrant as specified in its charter)
Pennsylvania 1-3610 25-0317820
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
425 Sixth Avenue, Alcoa Building, Pittsburgh, Pennsylvania 15219-1850
(Address of principal executive offices) (Zip code)
Office of Investor Relations 412-553-3042
Office of the Secretary 412-553-4707
(Registrant's telephone number including area code)
Item 5. Other Events.
The Registrant issued press releases on July 8, July 10 and
July 14, 1998 as follows:
July 8, 1998
Strong Earnings Continue Despite Lower Metal Prices
Alcoa today announced net income of $207.1 million, or $1.24
per common share, for the second quarter of 1998, compared with
net income of $207.6 million, or $1.19 per share, in the 1997
second quarter.
For the first half of 1998, net income was $417.0 million, or
$2.49 per common share, up 14% from $366.7 million, or $2.11
per share, for the comparable 1997 period.
"We are very pleased with our earnings performance for the
first half of the year since we have been able to more than
offset a 16% drop in aluminum prices on the LME since the
beginning of 1998," said Paul O'Neill, chairman and chief
executive officer. "We look forward to the addition of Alumax in
the next quarter and have been hard at work with Alumax employees
to make the acquisition very beneficial to Alcoa customers and
shareholders."
Return on shareholders' equity for the 1998 first half,
annualized, was 18.3%, compared with 15.7% in the first half of
1997.
Second quarter 1998 revenues were $3.6 billion compared with
$3.4 billion in the 1997 second quarter. Year-to-date, 1998
revenues were $7.0 billion compared with $6.7 billion for the
1997 first half.
Aluminum shipments rose to a record 866,000 metric tons (mt)
for the 1998 second quarter on the strength of the company's
European businesses, compared with 760,000 mt in the year-ago
quarter. Shipments of 1,644,000 mt for the first half of 1998,
also a record, were up 11% from 1, 480,000 mt in the 1997 period.
Second quarter 1998 earnings were $228 million before after-tax
losses of $21.1 million, or 13 cents per share, as a result of
marking to market certain aluminum commodity contracts. Of these
losses, $16.5 million, or 10 cents per share, is related to fabri-
cated product sales contracts that will be shipped in future
quarters. For the comparable 1997 quarter, after-tax losses
resulting from marking to market these contracts were $7.1 million,
or four cents per share.
Founded in 1888, Alcoa is the world's leading producer of
aluminum and alumina and a major participant in all segments of
the industry: mining, refining, smelting, fabricating and
recycling. Alcoa serves customers worldwide in the packaging,
automotive, aerospace, construction and other markets with a
great variety of fabricated and finished products. The company
has 187 operating locations in 28 countries.
Editor's Note: Alcoa acquired approximately 51% of Alumax on
June 17, 1998. Alcoa's share of Alumax's results for the 13-day
period are not included.
Financial and operating data for Alcoa and its subsidiaries
follow.
<TABLE>
<CAPTION>
FINANCIAL REPORT
Alcoa and subsidiaries
in millions except share and ton amounts
(UNAUDITED)
Second quarter
For the period ended June 30 1998 1997
<S> <C> <C>
Sales $ 3,587.0 $ 3,432.0
Other income 18.3 37.7
3,605.3 3,469.7
Cost of goods sold 2,760.0 2,602.1
Selling, general administrative
and other expenses 154.2 160.5
Research and development
expenses 27.9 34.7
Provision for depreciation and
depletion 186.1 181.1
Special items 0.0 0.0
Interest expense 41.8 33.4
Taxes other than payroll and
severance taxes 30.0 33.9
3,200.0 3,045.7
Income from operations before
taxes on income 405.3 424.0
Provision for taxes on income 135.8 148.0
Income from operations 269.5 276.0
Less: Minority interests' share (62.4) (68.4)
Net Income $ 207.1 $ 207.6
Earnings per common share:
Basic $ 1.24 $ 1.19
Diluted $ 1.24 $ 1.18
Translation and exchange
adjustments included in
net income $ (1.8) $ 3.5
Shipments of aluminum products
(metric tons) 866,000 760,000
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL REPORT
Alcoa and subsidiaries
in millions except share and ton amounts
(UNAUDITED)
Six months
For the period ended June 30 1998 1997
<S> <C> <C>
Sales $ 7,032.1 $ 6,663.1
Other income 46.4 79.0
7,078.5 6,742.1
Cost of goods sold 5,378.2 5,091.1
Selling, general administrative
and other expenses 308.0 319.5
Research and development expenses 52.4 70.3
Provision for depreciation and
depletion 370.9 363.7
Special items 0.0 (4.6)
Interest expense 81.0 70.7
Taxes other than payroll and
severance taxes 62.1 67.7
6,252.6 5,978.4
Income from operations before
taxes on income 825.9 763.7
Provision for taxes on income 276.7 266.9
Income from operations 549.2 496.8
Less: Minority interests' share (132.2) (130.1)
Net Income $ 417.0 $ 366.7
Earnings per common share:
Basic $ 2.49 $ 2.11
Diluted $ 2.48 $ 2.09
Average number of shares
used to compute:
Basic earnings per common
share 166,993,591 173,139,325
Diluted earnings per
common share 168,011,240 174,871,324
Shares outstanding 164,798,342 173,323,794
Translation and exchange
adjustments included
in net income $ (4.8) $ 3.1
Shipments of aluminum products
(metric tons) 1,644,000 1,480,000
Return on average shareholders'
equity 18.3% 15.7%
</TABLE>
July 10, 1998
The Board of Directors of Alcoa today declared a quarterly
common stock dividend of 37.5 cents per share that is payable
August 25, 1998 to shareholders of record at the close of
business on August 7, 1998.
The Directors also voted a regular divided of 93.75 cents
per share on Alcoa's $3.75 cumulative preferred stock, payable
October 1, 1998 to shareholders of record on September 11, 1998.
Editor's Note: The common stock dividend is comprised of a base
quarterly dividend, currently 25 cents per share, and a quarterly
installment of 12.5 cents per share for a previously reported
bonus dividend.
July 14, 1998
Alcoa Announces 2001 Cost-Cutting Goal of $1.1 Billion
Alcoa Chairman Paul O'Neill speaking to security analysts
today announced that the company had set a new target: to cut
costs by $1.1 billion by January 1, 2001.
"Our goal is to generate $800 million in operating
improvements in our existing businesses," said Mr. O'Neill.
"In addition, we expect to achieve $300 million in savings
from efficiency opportunities as a result of our merger with
Alumax."
Each of Alcoa's business units will have specific
objectives with a target of achieving an annual running rate
by the end of the year 2000. Compensation incentives are
linked to reaching these targets.
"This aggressive, turn of the century target to reduce
costs by $1.1 billion will require us to step up the pace
of our performance, and integrate and leverage our global
franchise while working with our customers to maximize the
value we bring to the marketplace," continued Mr. O'Neill.
"The contributions of Alcoa employees worldwide - their
energy, their ideas, their ingenuity - are needed to meet
this challenge. This is not a people reduction initiative."
Founded in 1888, Alcoa is the world's leading producer of
aluminum and alumina and a major participant in all segments of
the industry: mining, refining, smelting, fabricating and
recycling. The company has 250 locations in 30 countries.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the following authorized officer.
ALUMINUM COMPANY OF AMERICA
By /s/ Earnest J. Edwards
Date July 15, 1998 Earnest J. Edwards
Senior Vice President and
Controller
(Principal Accounting
Officer)
