SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 8, 1999
ALCOA INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 1-3610 25-0317820
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
201 Isabella Street, Pittsburgh, Pennsylvania 15212-5858
(Address of principal executive offices) (Zip code)
Office of Investor Relations 412-553-3042
Office of the Secretary 412-553-4707
(Registrant's telephone number including area code)
Item 5. Other Events.
The Registrant issued the following press releases on January 8, 1999:
PITTSBURGH, January 8, 1999 - Paul O'Neill, Chairman and CEO
of Alcoa, announced today that Alcoa's Board of Directors has
approved:
- a 50% increase in the company's base quarterly dividend;
- a 10 million share repurchase program, pre-split; and
- a 2-for-1 stock split.
Commenting on the measures approved today by Alcoa's Board,
Paul O'Neill said, "These changes reflect our conviction that we
have achieved a new base level of operating performance and that
further major improvements will be realized this year and into the
future as we aggressively implement the Alcoa Business System and
the Alcoa Production System in our worldwide operations."
Dividend Increased
The Board approved two changes in the company's common stock
dividend policy: a 50% increase in the company's base quarterly
dividend and an increase in the threshold on the variable
dividend.
The base quarterly dividend is increased to 37.5 cents per
common share on a pre-split basis (the base dividend was 25 cents
per share). For a full year, base dividends will now total $1.50
compared with $1.00 before the increase. The variable dividend,
which is linked directly to financial performance, is 30% of the
company's annual earnings when these earnings exceed a threshold
of $4.50 per share on a pre-split basis (the previous threshold
was $3.00 per share). The variable dividend is paid in the
following year in four equal quarterly installments with the base
quarterly dividends.
Under the new policy, the Board declared a quarterly common
stock dividend of 40.25 cents per share, on a pre-split basis,
that is payable on February 25, 1999, to shareholders of record
at the close of business on February 8, 1999. This includes the
new base dividend and a variable dividend.
Earnings per share for 1998 were $4.87 on a pre-split basis,
resulting in a variable dividend of 11 cents. The variable
dividend will be paid in four installments of 2.75 cents per
share on a pre-split basis during 1999, with payment and record
dates the same as those for base quarterly dividends.
The directors also voted a regular dividend of 93.75 cents
per share on Alcoa's $3.85 cumulative preferred stock, payable
April 1, 1999 to shareholders of record on March 12, 1999.
Share Repurchase Authorized
In addition, the Board authorized 10 million shares of Alcoa
common stock, on a pre-split basis, to be repurchased by the
company. Alcoa will from time to time buy back shares of the
company's outstanding common stock with open-market purchases.
The stock will be used for employee benefits plans and other
corporate purposes.
2-for-1 Stock Split
The Board also declared a two-for-one split of Alcoa's
common stock. The new stock will be distributed on February 25
to shareholders of record at the close of business on February 8.
The stock was split to encourage a wider distribution of
Alcoa common stock. Following the stock split, Alcoa will have
approximately 367 million common shares outstanding.
PITTSBURGH, JANUARY 8, 1999 -- Alcoa today announced 1998
fourth quarter net income of $218.3 million, or $1.19 per common
share, on revenues of $4.2 billion.
For the full year 1998, Alcoa's net income was $853.0 million,
or $4.87 per share, on record revenues of $15.3 billion.
"1998 was a year of exceptional performance for Alcoa," said
Chairman and CEO Paul O'Neill. "The growth we achieved and the
rapid integration of Inespal and Alumax into Alcoa, as well as
our successful focus on cost reductions, helped the company
overcome a 20% decline in aluminum prices since the beginning
of the year. We will rely on our own internal actions - not
outside forces - to achieve our goals in 1999."
<TABLE>
<CAPTION>
Fourth Quarter Year
1998 1997 %Change 1998 1997 %Change
--------------------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenues $4,198.8 $3,298.6 27% $15,339.8 $13,319.2 15%
Net Income
Before special
items 218.3 177.6 23 853.0 761.2 12
As reported 218.3 210.3 4 853.0 805.1 6
Reported earnings
per share $ 1.19 $ 1.23 (3) $ 4.87 $ 4.66 5
(in millions except share amounts)
</TABLE>
Net income for the 1998 fourth quarter was up 23% from the
comparable 1997 period, excluding special items. The 1997 quarter
included a special after-tax gain of $32.7 million ($72.9 million
pretax) or 19 cents per share, from the sale of a majority interest
in Alcoa's Brazilian cable business and a land sale in Japan.
Excluding the one-time gain, 1997 fourth quarter earnings were
$177.6 million, or $1.04 per share.
For the 1998 fourth quarter, net income included after-tax
losses of $0.9 million as a result of marking to market certain
aluminum commodity contracts, compared with after-tax losses of
$11.7 million, or 7 cents per share, for these contracts for the
comparable 1997 quarter.
Earnings for the full year 1998 were up 12% from 1997,
excluding special items. The 1997 year also included a net gain
of $43.9 million ($95.5 million pretax), or 25 cents per share,
related to the sale of various assets, partially offset by
increases to environmental reserves. Excluding these gains and
charges, the company earned $761.2 million, or $4.41 per share,
for all of 1997.
Results for the full year 1998 included net after-tax
losses of $44.5 million, or 25 cents per share, for the above-
mentioned aluminum commodity contracts. For the 1997 full year,
these losses were $12.7 million, or 7 cents per share.
Shipments of aluminum products during the 1998 fourth
quarter were 1,174,000 metric tons (mt) compared with 734,000
mt in the year ago quarter. For all of 1998, shipments were a
record 3,951,000 mt compared with 2,956,000 mt in 1997.
Excluding one-time items, return on shareholders' equity
was 16.3% for 1998 and 17.1% for 1997.
Founded in 1888, Alcoa is the world's leading producer of
aluminum and alumina and a major participant in all segments
of the industry: mining, refining, smelting, fabricating and
recycling. Alcoa serves customers worldwide in the packaging,
automotive, aerospace, construction and other markets with a
great variety of fabricated and finished products. The
company has 250 operating locations in 30 countries.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the following authorized officer.
ALCOA INC.
By /s/Richard B. Kelson
Date: January 8, 1999 Richard B. Kelson
Executive Vice President
and Chief Financial Officer
