8-K

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): April 4, 2003

ALCOA INC.

(Exact name of Registrant as specified in its charter)

Pennsylvania	1-3610	25-0317820
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)
201 Isabella Street, Pittsburgh, Pennsylvania		15212-5858
(Address of Principal Executive Offices)		(Zip Code)

Office of Investor Relations	212-836-2674
Office of the Secretary	412-553-4707
(Registrant’s telephone number, including area code)

TABLE OF CONTENTS

	Item 9. REGULATION FD DISCLOSURE.
SIGNATURES
INDEX TO EXHIBITS
EX-99 PRESS RELEASE

Item 9. REGULATION FD DISCLOSURE.

     The following information is furnished pursuant to Item 12, "Disclosure of Results of Operations and Financial Condition."

     On April 4, 2003, Alcoa Inc. issued a press release announcing its earnings for the first quarter of 2003. A copy of the press release is attached hereto as Exhibit 99.

     Exhibits

          99      Press release, dated April 4, 2003, issued by Alcoa Inc.

2

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 undersigned hereunto duly authorized.

	ALCOA INC.
	By:	/s/ Lawrence R. Purtell
		Lawrence R. Purtell
		Executive Vice President and
		General Counsel
Dated: April 4, 2003

3

INDEX TO EXHIBITS

Exhibit No.	Description
99	Press release, dated April 4, 2003, issued by Alcoa Inc.

4 EX-99 3 j0011901exv99.htm EX-99 PRESS RELEASE

Exhibit 99

[Alcoa logo]

FOR IMMEDIATE RELEASE

Investor Contact	Media Contact
William F. Oplinger	Kevin Lowery
(212) 836-2674	(412)553-1424

Strong Cost Savings Help Offset Higher Energy Prices,
Driving Alcoa’s Income From Continuing Operations Higher
Sequentially and Year-Over-Year

Highlights of the quarter:

• Income from continuing operations was $0.23 per diluted share versus a loss of $0.15 in the previous quarter and income of $0.22 in the year-ago quarter

• Revenue was $5.11 billion, up from both the prior and year-ago quarters

• Gross margin expanded sequentially from 19.2 percent to 20.3 percent

• Cost savings were $52 million in the quarter, bringing the Company’s annual run rate on savings to $808 million

• Every segment of the business demonstrated improved sequential profitability except Packaging and Consumer, which experienced seasonal declines.

Pittsburgh, PA — April 4, 2003 — Alcoa today reported income from continuing operations in the first quarter of $195 million or $0.23 per diluted share compared to a loss from continuing operations of $125 million or $0.15 per diluted share in the previous quarter. The loss in the fourth quarter of 2002 included restructuring charges, goodwill impairment and losses on divestitures totaling $258 million. (See attached schedule.) Income from continuing operations was $184 million or $0.22 per diluted share in the first quarter of 2002.

“We are focused on managing what is under our control in a challenging business environment,” said Alain Belda, Chairman and CEO of Alcoa. “Despite significantly higher energy prices which offset more favorable metal prices, we achieved solid cost savings results from the restructuring undertaken over the last two years as well as synergies from acquired businesses. Every segment of the business demonstrated improved profitability except for Packaging and Consumer, which experienced typical seasonal declines. Given the uncertain economic and geopolitical outlook today, we will keep our focus on controlling costs, improving productivity, and building closer connections to our customers.”

Cost Savings

The company achieved $52 million in savings in the quarter. Consistent with Alcoa’s approach since its first cost challenge in 1998, the savings number

includes the effect of higher benefit costs, but excludes changes in energy prices due to volatility. Energy costs in the first quarter of 2003 were $75 million higher than the fourth quarter 2002 and $110 million higher than first quarter 2002. Benefit costs were $25 million higher than the previous quarter.

The cost savings were driven in large part by accelerating the benefits of prior years’ restructurings and the continued implementation of the Alcoa Business System. Despite higher energy and raw material costs, the company’s margin improved 110 basis points to 20.3 percent of sales in the quarter. Alcoa has now achieved $808 million toward its $1 billion cost savings goal by the end of 2003 and remains solidly on track to meet that challenge.

Markets

Sales were $5.11 billion up from $5.06 billion in the fourth quarter of last year – and up 4% from $4.9 billion in the first quarter of 2002. Sequentially, higher upstream pricing and the inclusion of Fairchild Fasteners revenues offset seasonal declines in the packaging and consumer markets. While the aerospace, industrial gas turbine and commercial building markets remain soft, the company benefited from aggressive cost cutting in businesses serving those markets. Automotive markets remained strong in the quarter while residential construction weakened due to severe winter weather in the U.S.

Acquisitions and Divestitures

Fairchild Fasteners, a part of Alcoa Fastening Systems since December 2002, has already achieved $19 million in annualized synergies. These savings are excluded from the $1 billion cost challenge. Alcoa continues to pursue the divestiture of non-core businesses announced earlier this year, and expects to use proceeds from those sales to pay down debt.

Customers

Alcoa continues to strengthen its performance by developing innovative products that add value for its customers. Introduced last summer, Reynolds Wrap® Release®, an innovative new non-stick foil, has now established a strong presence in the North American market. Almost five million households throughout the United States have already tried Reynolds Wrap® Release® and almost 50% of these consumers have plans to come back for more — twice the number of consumers who typically make a repeat purchase of a new product in this market.

Alcoa Dura-Bright® wheels continue to gain acceptance in the market and are on track to triple sales from the previous year. Dura-Bright® wheels have been used primarily in transit bus and motor home applications, and are now being rapidly adopted in trucks and trailers. They were named as one of the top 50 new products for 2002 by Heavy Duty Trucking magazine.

Alcoa was also selected to supply metallic solutions for regional and business jets to Bombardier.

Accounting Change and Other Items

In the first quarter of 2003, Alcoa adopted Financial Accounting Standard No. 143, “Accounting for Asset Retirement Obligations.” The cumulative effect of adopting this standard was a one-time, non-cash charge of $47 million. Including this charge, Alcoa’s net income for the quarter was $151 million. Net income in the first quarter of 2002 included a one time, non-cash gain of $34 million upon adoption of FAS No. 142.

Sequentially, the negative impact of foreign currency translation and lower non-operating income were partially offset by higher equity earnings.

About Alcoa

Alcoa is the world’s leading producer of primary aluminum, fabricated aluminum and alumina, and is active in all major aspects of the industry. Alcoa serves the aerospace, automotive, packaging, building and construction, commercial transportation and industrial markets, bringing design, engineering, production and other capabilities of Alcoa’s businesses to customers. In addition to aluminum products and components, Alcoa also markets consumer brands including Reynolds Wrap® foils and plastic wraps, Alcoa® wheels, and Baco® household wraps. Among its other businesses are vinyl siding, closures, precision castings, and electrical distribution systems for cars and trucks. The company has 127,000 employees in 40 countries. More information can be found at www.alcoa.com

Alcoa Business System

The Alcoa Business System is an integrated set of systems, tools and language organized to encourage unencumbered transfer of knowledge across businesses and borders. It focuses on serving customer demand by emphasizing the elimination of all waste and making what the customer wants, when the customer wants it.

Forward Looking Statement
Certain statements in this release relate to future events and expectations and as such constitute forward-looking statements involving known and unknown risks and uncertainties that may cause actual results, performance or achievements of Alcoa to be different from those expressed or implied in the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include the company’s inability to achieve the level of cost savings or productivity improvements anticipated by management, including possible increases in the cost of doing business resulting from war or terrorist activities; and other risk factors summarized in Alcoa’s SEC reports.

FINANCIAL REPORT
Alcoa and subsidiaries
Supplemental Net Income and EPS Information (unaudited)
(in millions, except per-share amounts)

			Net Income									Diluted EPS
			1Q03			4Q02			1Q02			1Q03		4Q02			1Q02
GAAP Net income (loss)			$	151		$	(223	)	$	218		$	0.17	$	(.27	)	$	.26
	Cumulative effect of accounting change			47			—			(34	)		0.06		—			(.04	)
	Discontinued operations – operating (income) loss			(3	)		20			—			—		.03			—
	Discontinued operations – loss on Divestitures			—			78			—			—		.09			—
GAAP Income (loss) from continuing operations			$	195		$	(125	)	$	184		$	0.23	$	(.15	)	$	.22
	One-time charges:
		Special items – restructurings		(3	)		95			—
		Special items – loss on divestitures		—			143			—
		Goodwill impairment		—			20			—
Income from continuing operations excluding one-time charges (1)			$	192		$	133		$	184		$	0.23	$	0.16		$	0.22
Average diluted shares outstanding													846		844			854

(1) Alcoa believes that presenting income from continuing operations excluding one-time charges is an additional measure of performance that investors can use to compare operating results between reporting periods. The schedule above allows for ease of analysis in reviewing Alcoa’s earnings performance using these measures. Income from continuing operations excluding one-time charges can provide a more relevant view of a company’s performance.

Alcoa and subsidiaries
Condensed Statement of Consolidated Income (unaudited)
(in millions, except per-share, share and metric ton amounts)

					Quarter ended
					March 31			March 31			December 31
					2003			2002			2002
Sales					$	5,112		$	4,900		$	5,061
Cost of goods sold						4,073			3,968			4,088
Selling, general administrative and other expenses						294			273			339
Research and development expenses						50			51			58
Provision for depreciation, depletion and
	Amortization					285			259			297
Impairment of goodwill						—			—			44
Special items						(4	)		—			368
Interest expense						88			75			97
Other income, net						(37	)		(55	)		(67	)
						4,749			4,571			5,224
Income (loss) from continuing operations before taxes on income						363			329			(163	)
(Provision) benefit for taxes on income						(109	)		(104	)		36
Income (loss) from continuing operations before minority interests’ share						254			225			(127	)
Less: Minority interests’ share						59			41			(2	)
Income (loss) from continuing operations						195			184			(125	)
Income (loss) from discontinued operations						3			—			(98	)
Cumulative effect of accounting change						(47	)		34			—
NET INCOME (LOSS)					$	151		$	218		$	(223	)
Earnings (loss) per common share:
		Basic:
			Income (loss) from continuing operations		$	.23		$	.22		$	(.15	)
			Loss from discontinued operations			—			—			(.12	)
			Cumulative effect of accounting change			(.06	)		.04			—
				Net income (loss)	$	.17		$	.26		$	(.27	)
		Diluted:
			Income (loss) from continuing operations		$	.23		$	.22		$	(.15	)
			Loss from discontinued operations			—			—			(.12	)
			Cumulative effect of accounting change			(.06	)		.04			—
				Net income (loss)	$	.17		$	.26		$	(.27	)
Average number of shares used to compute:
		Basic earnings per common share				845,065,093			847,105,553			844,456,673
		Diluted earnings per common share				846,328,622			854,151,135			844,456,673
Common stock outstanding at the end of the period						845,157,381			846,809,997			844,819,462

Currency translation adjustments included in net income	$	(13	)	$	2	$	2
Shipments of aluminum products (metric tons)		1,192,000			1,251,000		1,320,000

Alcoa and subsidiaries
Condensed Consolidated Balance Sheet
(in millions)

				(unaudited)
				March 31			December 31
				2003			2002
ASSETS
Current assets:
	Cash and cash equivalents			$	370		$	344
	Receivables from customers, less allowances:
		$127 in 2003 and $120 in 2002			2,611			2,378
	Other receivables				253			174
	Inventories				2,557			2,441
	Deferred income taxes				457			468
	Prepaid expenses and other current assets				437			508
			Total current assets		6,685			6,313
Properties, plants and equipment, at cost					23,606			23,120
Less: accumulated depreciation, depletion and Amortization					11,420			11,009
Net properties, plants and equipment					12,186			12,111
Goodwill					6,365			6,365
Other assets					4,511			4,446
Assets held for sale					609			575
			Total assets	$	30,356		$	29,810
LIABILITIES
Current liabilities:
	Short-term borrowings			$	32		$	37
	Accounts payable, trade				1,762			1,618
	Accrued compensation and retirement costs				846			933
	Taxes, including taxes on income				817			818
	Other current liabilities				865			970
	Long-term debt due within one year				75			85
			Total current liabilities		4,397			4,461
Long-term debt, less amount due within one year					8,672			8,365
Accrued postretirement benefits					2,304			2,320
Other noncurrent liabilities and deferred credits					2,931			2,878
Deferred income taxes					509			502
Liabilities of operations held for sale					90			64
			Total liabilities		18,903			18,590
MINORITY INTERESTS					1,370			1,293
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY
Preferred stock					55			55
Common stock					925			925
Additional capital					6,098			6,101
Retained earnings					7,451			7,428
Treasury stock, at cost					(2,819	)		(2,828	)
Accumulated other comprehensive loss					(1,627	)		(1,754	)
			Total shareholders’ equity		10,083			9,927
			Total liabilities and equity	$	30,356		$	29,810

Alcoa and subsidiaries
Segment Information (unaudited)
(in millions, except realized prices)

Consolidated Third-Party Revenues:				1Q02			2Q02			3Q02			4Q02			2002			1Q03
	Alumina and Chemicals				425			419			469			430			1,743			449
	Primary Metals				764			788			792			830			3,174			732
	Flat-Rolled Products				1,156			1,192			1,162			1,130			4,640			1,152
	Engineered Products				1,319			1,330			1,238			1,131			5,018			1,361
	Packaging and Consumer				618			672			752			840			2,882			750
	Other				618			757			731			700			2,806			668
			Total		4,900			5,158			5,144			5,061			20,263			5,112
Consolidated Intersegment
Revenues:					1Q02			2Q02			3Q02			4Q02			2002			1Q03
	Alumina and Chemicals				229			233			235			258			955			240
	Primary Metals				629			770			637			619			2,655			840
	Flat-Rolled Products				15			18			21			14			68			20
	Engineered Products				8			10			8			8			34			9
	Packaging and Consumer				—			—			—			—			—			-
	Other				—			—			—			—			—			-
			Total		881			1,031			901			899			3,712			1,109
Consolidated Third-Party Shipments
(KMT’s):					1Q02			2Q02			3Q02			4Q02			2002			1Q03
	Alumina and Chemicals				1,825			1,796			1,939			1,926			7,486			1,794
	Primary Metals				503			507			517			546			2,073			453
	Flat-Rolled Products				439			456			446			433			1,774			434
	Engineered Products				221			244			223			203			891			217
	Packaging and Consumer				30			31			46			55			162			36
	Other				58			87			80			83			308			52
			Total Aluminum		1,251			1,325			1,312			1,320			5,208			1,192
Average realized price - -Primary					0.66			0.67			0.66			0.66			0.66			0.69
After-Tax Operating Income (ATOI):					1Q02			2Q02			3Q02			4Q02			2002			1Q03
	Alumina and Chemicals				65			73			93			84			315			91
	Primary Metals				143			175			175			157			650			166
	Flat-Rolled Products				61			66			46			47			220			53
	Engineered Products				58			44			33			(28	)		107			29
	Packaging and Consumer				28			55			51			64			198			53
	Other				7			19			8			(43	)		(9	)		9
			Total		362			432			406			281			1,481			401
Reconciliation of ATOI to
Consolidated Net Income:					1Q02			2Q02			3Q02			4Q02			2002			1Q03
	Total ATOI				362			432			406			281			1,481			401
	Impact of intersegment profit eliminations				(3	)		(1	)		(5	)		3			(6	)		7
	Unallocated amounts (net of tax):
		Interest income			10			9			7			5			31			5
		Interest expense			(49	)		(54	)		(62	)		(62	)		(227	)		(57	)
		Minority interests			(41	)		(47	)		(49	)		2			(135	)		(59	)
		Corporate expense			(58	)		(53	)		(40	)		(83	)		(234	)		(57	)
		Special items			—			—			(25	)		(261	)		(286	)		4

	Discontinued operations	—		(5	)	(9	)	(98	)	(112	)	3
	Accounting change	34		—		—		—		34		(47	)
	Other	(37	)	(49	)	(30	)	(10	)	(126	)	(49	)
Consolidated net income		218		232		193		(223	)	420		151

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EX-99

EX-99    PRESS RELEASE