-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DZO0YAI4+jqxJ+lW73FgkO9NeqmHbOyc6yEJX7GfbZYvSGZN/unEVZm7qtLncMKa lHHISiQDBWRiQgVUCvrXPQ== 0001193125-09-076995.txt : 20090410 0001193125-09-076995.hdr.sgml : 20090410 20090410112223 ACCESSION NUMBER: 0001193125-09-076995 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20090410 ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20090410 DATE AS OF CHANGE: 20090410 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALCOA INC CENTRAL INDEX KEY: 0000004281 STANDARD INDUSTRIAL CLASSIFICATION: ROLLING DRAWING & EXTRUDING OF NONFERROUS METALS [3350] IRS NUMBER: 250317820 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-03610 FILM NUMBER: 09744505 BUSINESS ADDRESS: STREET 1: 201 ISABELLA ST STREET 2: ALCOA CORPORATE CTR CITY: PITTSBURGH STATE: PA ZIP: 15212-5858 BUSINESS PHONE: 4125532576 MAIL ADDRESS: STREET 1: 801 ISABELLA ST STREET 2: ALCOA CORPORATE CTR CITY: PITTSBURGH STATE: PA ZIP: 15212-5858 FORMER COMPANY: FORMER CONFORMED NAME: ALUMINUM CO OF AMERICA DATE OF NAME CHANGE: 19920703 8-K 1 d8k.htm FORM 8-K Form 8-K

 

 

UNITED STATES

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 10, 2009

 

 

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)

 

390 Park Avenue, New York, New York   10022-4608
(Address of Principal Executive Offices)   (Zip Code)

Office of Investor Relations 212-836-2674

Office of the Secretary 212-836-2732

(Registrant’s telephone number, including area code)

 

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 8.01. Other Events.

Attached as Exhibit 100 to this Current Report on Form 8-K is the following financial information from Alcoa Inc.’s Annual Report on Form 10-K for the year ended December 31, 2008, filed with the Securities and Exchange Commission (the “SEC”) on February 17, 2009, formatted in XBRL (eXtensible Business Reporting Language): (i) the Statement of Consolidated Operations for the years ended December 31, 2008, 2007, and 2006, (ii) the Consolidated Balance Sheet at December 31, 2008 and 2007, (iii) the Statement of Consolidated Cash Flows for the years ended December 31, 2008, 2007, and 2006, (iv) the Statement of Shareholders’ Equity for the years ended December 31, 2008, 2007, and 2006, and (v) the Notes to the Consolidated Financial Statements, tagged as blocks of text.

Users of this data are advised pursuant to Rule 401 of Regulation S-T that the financial information contained in the XBRL-Related Documents is unaudited and these are not the financial statements of Alcoa Inc. as filed with the SEC. The purpose of submitting these XBRL-Related Documents is to test the related format and technology and, as a result, investors should not rely on the information in this Current Report on Form 8-K, including Exhibit 100, in making investment decisions.

In accordance with Rule 402 of Regulation S-T, the information in this Current Report on Form 8-K, including Exhibit 100, shall not be deemed to be “filed” for purposes of Section 11 of the Securities Act of 1933, as amended (the “Securities Act”), or Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of these sections, and is not part of any registration statement to which it may relate, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such filing.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

The following financial information from Alcoa Inc.’s Annual Report on Form 10-K for the year ended December 31, 2008, filed with the SEC on February 17, 2009, formatted in XBRL: (i) the Statement of Consolidated Operations for the years ended December 31, 2008, 2007, and 2006, (ii) the Consolidated Balance Sheet at December 31, 2008 and 2007, (iii) the Statement of Consolidated Cash Flows for the years ended December 31, 2008, 2007, and 2006, (iv) the Statement of Shareholders’ Equity for the years ended December 31, 2008, 2007, and 2006, and (v) the Notes to the Consolidated Financial Statements, tagged as blocks of text, are furnished as exhibits to this Current Report on Form 8-K and are collectively referred to as Exhibit 100:

 

100.INS    XBRL Instance Document
100.SCH    XBRL Taxonomy Extension Schema Document
100.CAL    XBRL Taxonomy Extension Calculation Linkbase Document
100.DEF    XBRL Taxonomy Extension Definition Linkbase Document
100.LAB    XBRL Taxonomy Extension Label Linkbase Document
100.PRE    XBRL Taxonomy Extension Presentation Linkbase Document

 

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/ Tony R. Thene

  Tony R. Thene
  Vice President and Controller

Dated: April 10, 2009

 

3


EXHIBIT INDEX

 

Exhibit No.

  

Description

100.INS

   XBRL Instance Document

100.SCH

   XBRL Taxonomy Extension Schema Document

100.CAL

   XBRL Taxonomy Extension Calculation Linkbase Document
100.DEF    XBRL Taxonomy Extension Definition Linkbase Document

100.LAB

   XBRL Taxonomy Extension Label Linkbase Document

100.PRE

   XBRL Taxonomy Extension Presentation Linkbase Document

 

4

EX-100.INS 2 aa-20081231.xml XBRL INSTANCE DOCUMENT 762000000 13373000000 925000000 -773000000 5720000000 55000000 9345000000 -1899000000 506000000 14631000000 925000000 -1233000000 5817000000 55000000 11066000000 -1999000000 38803000000 856000000 0 925000000 -337000000 545000000 1098000000 2644000000 5774000000 68000000 2381000000 7574000000 483000000 1587000000 286000000 994000000 4799000000 73000000 3084000000 20327000000 38803000000 7037000000 202000000 6371000000 2460000000 1126000000 2438000000 869000000 1866000000 2753000000 427000000 55000000 16541000000 13039000000 563000000 16016000000 623000000 3440000000 3826000000 2038000000 657000000 925000000 -337000000 5774000000 55000000 13039000000 -3440000000 37822000000 1535000000 0 925000000 -3169000000 321000000 2941000000 2518000000 5850000000 65000000 1883000000 8150000000 762000000 2688000000 461000000 866000000 4981000000 586000000 3238000000 23490000000 37822000000 7279000000 56000000 8509000000 2597000000 973000000 2386000000 987000000 1580000000 2730000000 708000000 55000000 17455000000 12400000000 478000000 11735000000 378000000 4326000000 247000000 1915000000 130000000 925000000 -3169000000 5850000000 55000000 12400000000 -4326000000 -77000000 -256000000 522000000 2000000 2.59 2.57 0.60 877000000 21955000000 -3000000 -72000000 1252000000 38000000 17000000 17000000 71000000 2226000000 3515000000 2.56 2.54 22000000 0.03 0.03 89000000 853000000 47000000 -345000000 509000000 -19000000 0 175000000 85000000 384000000 436000000 -20000000 -2841000000 2567000000 2644000000 2248000000 236000000 -222000000 417000000 -8000000 290000000 0 524000000 400000000 1000000 -8000000 58000000 23000000 3182000000 397000000 560000000 29000000 342000000 35000000 156000000 22000000 36000000 201000000 507000000 28950000000 1372000000 72000000 177000000 290000000 101000000 1252000000 2662000000 56000000 372000000 126000000 25435000000 72000000 3.75 38000000 2665000000 2248000000 98000000 53000000 -524000000 152000000 659000000 -184000000 104000000 51000000 -473000000 877000000 417000000 -13000000 72000000 38000000 522000000 2000000 0.60 -3000000 2248000000 3.75 190000000 290000000 36000000 -23000000 589000000 2000000 2.98 2.95 0.68 22803000000 311000000 1244000000 29000000 79000000 79000000 1806000000 2814000000 4802000000 3.27 3.23 -250000000 -0.29 -0.28 116000000 1623000000 177000000 -79000000 -169000000 201000000 -93000000 134000000 -501000000 401000000 365000000 -1538000000 -1625000000 3111000000 3075000000 2564000000 1920000000 -81000000 896000000 34000000 2496000000 126000000 590000000 368000000 3000000 15000000 131000000 22000000 3614000000 322000000 -617000000 2050000000 474000000 2011000000 835000000 14000000 873000000 238000000 268000000 29280000000 1444000000 97000000 915000000 2496000000 -185000000 1245000000 3179000000 -24000000 183000000 94000000 24478000000 97000000 3.75 3460000000 2564000000 -412000000 222000000 506000000 153000000 -78000000 30000000 880000000 9000000 1159000000 -69000000 747000000 896000000 -140000000 97000000 589000000 2000000 0.68 2564000000 3.75 1055000000 2496000000 <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>P. Cash Flow Information </B></FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Cash payments for interest and income taxes are as follows: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="76%"></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2006</B></FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Interest, net of amount capitalized</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>367</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>359</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>423</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Income taxes, net of amount refunded</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>730</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,376</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>695</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The details related to acquisitions are as follows: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="80%"></TD> <TD vAlign=bottom width="6%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2006</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Fair value of assets acquired</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>352</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>19</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>84</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Liabilities assumed</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(5</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(3</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(91</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Minority interests acquired</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>70</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>3</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Cash paid (received)</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>417</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>19</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(7</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Less: cash acquired</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Net cash paid (received)</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>417</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>18</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(7</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In 2007, Alcoa sold its Three Oaks Mine for $140, which consisted of $70 in cash and a $70 note receivable. The $70 in cash is reflected in the Proceeds from the sale of assets and businesses on the accompanying Statement of Consolidated Cash Flows. The $70 note receivable is not reflected in the accompanying Statement of Consolidated Cash Flows as it represents a non-cash activity. </FONT></P> 133000000 279000000 554000000 2000000 <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>B. Discontinued Operations and Assets Held for Sale </B></FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>For all periods presented in the accompanying Statement of Consolidated Operations, the Electrical and Electronic Solutions (EES) business was classified as discontinued operations. The home exteriors business and the Hawesville, KY automotive casting facility were also included in discontinued operations in 2006. There were no other active businesses classified as discontinued operations in the three-year period ended December&nbsp;31, 2008. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Late in 2008, Alcoa reclassified its EES business to discontinued operations based on the decision to sell the business. The Consolidated Financial Statements for all prior periods presented were reclassified to reflect the EES business in discontinued operations. The EES business designs and manufactures electrical and electronic systems, wire harnesses and components for the ground transportation industry worldwide. In 2008, the EES business generated sales of $1,218 and had approximately 19,000 employees as of December&nbsp;31, 2008. During 2006, Alcoa reclassified its home exteriors business to discontinued operations upon the signing of a definitive sale agreement with Ply Gem Industries, Inc. The sale of the home exteriors business was completed in October 2006 (see Note F for additional information). Also during 2006, Alcoa reclassified the Hawesville automotive casting facility to discontinued operatio ns upon closure of the facility. The results of the Engineered Products and Solutions segment were reclassified to reflect the movement of EES, the home exteriors business, and the Hawesville automotive casting facility into discontinued operations. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The following table details selected financial information for the businesses included within discontinued operations: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="74%"></TD> <TD vAlign=bottom width="6%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2006</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Sales</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,218</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,468</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,946</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Loss from operations</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(199</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(107</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(109</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>(Loss) gain on sale of businesses</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(16</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>176</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Loss from impairment</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(225</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(210</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(1</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Pretax (loss) income</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(424</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(333</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>66</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Benefit (provision) for income taxes</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>121</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>83</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(44</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>(Loss) income from discontinued operations</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(303</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(250</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>22</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In 2008, the loss from discontinued operations of $303 all related to the EES business comprised of asset impairments of $162 to reflect the estimated fair value of the business and a net operating loss of $141, which includes restructuring charges of $39 ($53 pretax) for headcount reductions of approximately 6,200 and a charge of $16 for obsolete inventory. In 2007, the loss from discontinued operations of $250 consisted of a $243 loss related to the EES business, including severance charges of $36 ($53 pretax) for headcount reductions of approximately 5,900 as part of a strategic business review to restructure EES and impairment charges of $93 ($133 pretax) for goodwill and $60 ($74 pretax) for various fixed assets as the forecasted future earnings and cash flows of the EES business no longer supported the carrying values of such assets; an $11 loss related to working capital and other adjustments associated with the 2006 sale of the home exteriors business; and net operating income of $4 of other discontinued businesses. In 2006, the income from discontinued operations of $22 was comprised of a $110 gain related to the sale of the home exteriors business; a $65 operating loss related to the EES business, including severance charges of $30 ($37 pretax) for headcount reductions of approximately 4,800; net operating losses of $20 of other discontinued businesses; and a loss of $3 related to the 2005 sale of the imaging and graphics communications business. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>For both periods presented in the accompanying Consolidated Balance Sheet, the assets and liabilities of operations classified as held for sale include EES, Global Foil, and the Transportation Products Europe businesses, the Hawesville automotive casting facility, the wireless component of the divested telecommunications business, and a small automotive casting business in the U.K. Additionally, the assets and related liabilities of the businesses within the Packaging and Consumer segment and a soft alloy extrusion facility in the U.S. that was not contributed to the Sapa AB joint venture were also classified as held for sale as of December&nbsp;31, 2007. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Late in 2008, Alcoa reclassified its Global Foil and Transportation Products Europe businesses to held for sale based on the decision to sell these businesses (see Note D for additional information). These two businesses do not qualify as discontinued operations because Alcoa may have significant continuing involvement with these businesses subsequent to their divestiture. The assets of the Flat-Rolled Products and Engineered Products and Solutions segments were reclassified to reflect the movement of the Global Foil and Transportation Products Europe businesses, respectively, into assets held for sale. During 2007, Alcoa classified the assets and related liabilities of the businesses within the Packaging and Consumer segment as held for sale based upon management’s decision to sell these businesses (see Notes D and F for additional information). </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The major classes of assets and liabilities of operations held for sale are as follows: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="82%"></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2><B>December&nbsp;31,</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Assets:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Receivables, less allowances</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>99</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>553</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Inventories</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>102</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>618</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Properties, plants, and equipment, net</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>30</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,082</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Goodwill</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,101</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Intangibles</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>377</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Other assets</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>15</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>95</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Assets held for sale</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>&nbsp;247</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>&nbsp;3,826</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Liabilities:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Accounts payable, trade</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>101</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>454</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Accrued expenses</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>28</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>167</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Other liabilities</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>36</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Liabilities of operations held for sale</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>130</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>657</FONT></TD></TR></TBODY></TABLE> -0.09 -0.09 <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>N. Commitments and Contingencies </B></FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Litigation.</B> On February&nbsp;27, 2008, Alcoa Inc. received notice that Aluminium Bahrain B.S.C. (“Alba”) had filed suit against Alcoa Inc. and Alcoa World Alumina LLC (collectively, “Alcoa”), and others, in the U.S. District Court for the Western District of Pennsylvania (the “Court”), Civil Action number 08-299, styled Aluminium Bahrain B.S.C. v. Alcoa Inc., Alcoa World Alumina LLC, William Rice, and Victor Phillip Dahdaleh. The complaint alleges that certain Alcoa entities and their agents, including Victor Phillip Dahdaleh, have engaged in a conspiracy over a period of 15 years to defraud Alba. The complaint further alleges that Alcoa and its employees or agents (1)&nbsp;illegally bribed officials of the government of Bahrain and (or) officers of Alba in order to force Alba to purchase alumina at excessively high prices, (2)&nbsp;illegally bribed officials of the government of Bahrain and (or) officers of Alba and issued threats in order to pressure Alba to enter into an agreement by which Alcoa would purchase an equity interest in Alba, and (3)&nbsp;assigned portions of existing supply contracts between Alcoa and Alba for the sole purpose of facilitating alleged bribes and unlawful commissions. The complaint alleges that Alcoa and the other defendants violated the Racketeer Influenced and Corrupt Organizations Act (“RICO”) and committed fraud. Alba’s complaint seeks compensatory, consequential, exemplary, and punitive damages, rescission of the 2005 alumina supply contract, and attorneys’ fees and costs. Alba seeks treble damages with respect to its RICO claims. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>On February&nbsp;26, 2008, Alcoa Inc. had advised the U.S. Department of Justice (the “DOJ”) and the Securities and Exchange Commission (the “SEC”) that it had recently become aware of these claims, had already begun an internal investigation, and intended to cooperate fully in any investigation that the DOJ or the SEC may commence. On March&nbsp;17, 2008, the DOJ notified Alcoa that it had opened a formal investigation and Alcoa has been cooperating with the government. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In response to a motion filed by the DOJ on March&nbsp;27, 2008, the Court ordered the suit filed by Alba to be administratively closed and that all discovery be stayed to allow the DOJ to fully conduct an investigation without the interference and distraction of ongoing civil litigation. The Court further ordered that the case will be reopened at the close of the DOJ’s investigation. The Company is unable to reasonably predict an outcome or to estimate a range of reasonably possible loss. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In November 2006, in Curtis v. Alcoa Inc., Civil Action No.&nbsp;3:06cv448 (E.D. Tenn.), a class action was filed by plaintiffs representing approximately 13,000 retired former employees of Alcoa or Reynolds Metals Company and spouses and dependents of such retirees alleging violation of the Employee Retirement Income Security Act (ERISA) and the Labor-Management Relations Act by requiring plaintiffs, beginning January&nbsp;1, 2007, to pay health insurance premiums and increased co-payments and co-insurance for certain medical procedures and prescription drugs. Plaintiffs allege these changes to their retiree health care plans violate their rights to vested health care benefits. </FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Plaintiffs additionally allege that Alcoa has breached its fiduciary duty to plaintiffs under ERISA by misrepresenting to them that their health benefits would never change. Plaintiffs seek injunctive and declaratory relief, back payment of benefits, and attorneys’ fees. Alcoa has consented to treatment of plaintiffs’ claims as a class action. During the fourth quarter of 2007, following briefing and argument, the court ordered consolidation of the plaintiffs’ motion for preliminary injunction with trial, certified a plaintiff class, bifurcated and stayed the plaintiffs’ breach of fiduciary duty claims, struck the plaintiffs’ jury demand, but indicated it would use an advisory jury, and set a trial date of September&nbsp;17, 2008. In August 2008, the court set a new trial date of March&nbsp;24, 2009 and, subsequently, the trial date was moved to September&nbsp;22, 2009 . Alcoa estimates that, in the event of an unfavorable outcome, the maximum exposure would be an additional postretirement benefit liability of approximately $300 and approximately $40 of expense (includes an interest cost component) annually, on average, for the next 11 years. Alcoa believes that it has valid defenses and intends to defend this matter vigorously. However, at this stage of the proceeding, the Company is unable to reasonably predict the outcome. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In addition to the litigation discussed above, various other lawsuits, claims, and proceedings have been or may be instituted or asserted against Alcoa, including those pertaining to environmental, product liability, and safety and health matters. While the amounts claimed may be substantial, the ultimate liability cannot now be determined because of the considerable uncertainties that exist. Therefore, it is possible that the Company’s financial position, liquidity, or results of operations in a particular period could be materially affected by certain contingencies. However, based on facts currently available, management believes that the disposition of matters that are pending or asserted will not have a material adverse effect, individually or in the aggregate, on the financial position, liquidity, or the results of operations of the Company. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Environmental Matters. </B>Alcoa continues to participate in environmental assessments and cleanups at a number of locations. These include 31 owned or operating facilities and adjoining properties, 33 previously owned or operating facilities and adjoining properties, and 71 waste sites, including Superfund sites. A liability is recorded for environmental remediation when a cleanup program becomes probable and the costs or damages can be reasonably estimated (see Note A for additional information). </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>As assessments and cleanups proceed, the liability is adjusted based on progress made in determining the extent of remedial actions and related costs and damages. The liability can change substantially due to factors such as the nature and extent of contamination, changes in remedial requirements, and technological changes. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The following discussion provides details regarding the current status of certain significant reserves related to current or former Alcoa sites. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Massena, NY—</B>Alcoa has been conducting investigations and studies of the Grasse River, adjacent to Alcoa’s Massena plant site, under a 1989 order from the U.S. Environmental Protection Agency (EPA) issued under the Comprehensive Environmental Response, Compensation and Liability Act, also known as Superfund. Sediments and fish in the river contain varying levels of polychlorinated biphenyls (PCBs). </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Alcoa submitted various Analysis of Alternatives Reports to the EPA starting in 1998 through 2002 that reported the results of river and sediment studies, potential alternatives for remedial actions related to the PCB contamination, and additional information requested by the EPA. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In June 2003, the EPA requested that Alcoa gather additional field data to assess the potential for sediment erosion from winter river ice formation and breakup. The results of these additional studies, submitted in a report to the EPA in April 2004, suggest that this phenomenon has the potential to occur approximately every 10 years and may impact sediments in certain portions of the river under all remedial scenarios. The EPA informed Alcoa that a final remedial decision for the river could not be made without substantially more information, including river pilot studies on the effects of ice formation and breakup on each of the remedial techniques. Alcoa submitted to the EPA, and the EPA approved, a Remedial Options Pilot Study (ROPS) to gather this information. The scope of this study included sediment removal and capping, the installation of an ice control structure, and significant monitoring. </FONT>& lt;/P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>From 2004 through 2008, Alcoa completed the work outlined in the ROPS. In November 2008, Alcoa submitted an updated Analysis of Alternatives Report to the EPA incorporating the new information obtained from the ROPS related to the feasibility and costs associated with various capping and dredging alternatives, including options for ice control. As a result, Alcoa increased the reserve associated with the Grasse River by $40 for the estimated costs of a proposed ice control remedy and for partial settlement of potential damages of natural resources. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>This new information will be used by the EPA to select a remedy for the entire river. The EPA’s ultimate selection of a remedy could result in additional liability. Alcoa may be required to record a subsequent reserve adjustment at the time the EPA’s Record of Decision is issued, which is expected in 2009 or later. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Sherwin, TX—</B>In connection with the sale of the Sherwin alumina refinery, which was required to be divested as part of the Reynolds merger in 2000, Alcoa agreed to retain responsibility for the remediation of the then existing environmental conditions, as well as a pro rata share of the final closure of the active waste disposal areas, which remain in use. Alcoa’s share of the closure costs is proportional to the total period of operation of the active waste disposal areas. Alcoa estimated its liability for the active disposal areas by making certain assumptions about the period of operation, the amount of material placed in the area prior to closure, and the appropriate technology, engineering, and regulatory status applicable to final closure. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>East St. Louis, IL—</B>In response to questions regarding environmental conditions at the former East St. Louis operations, Alcoa and the City of East St. Louis, the owner of the site, entered into an administrative order with the EPA in December 2002 to perform a remedial investigation and feasibility study of an area used for the disposal of bauxite residue from historic alumina refining operations. A draft feasibility study was submitted to the EPA in April 2005. The feasibility study included remedial alternatives that ranged from no further action to significant grading, stabilization, and water management of the bauxite residue disposal areas. As a result, Alcoa increased the environmental reserve for this location by $15 in 2005. The EPA’s ultimate selection of a remedy could result in additional liability. Alcoa may be required to record a subsequent reserve adjustment at the t ime the EPA’s Record of Decision is issued, which is expected late in 2009 or later. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Vancouver, WA—</B>In 1987, Alcoa sold its Vancouver smelter to a company that is now known as Evergreen Aluminum (Evergreen). The purchase and sale agreement contained a provision that Alcoa retain liability for any environmental issues that arise subsequent to the sale that pre-date 1987. As a result of this obligation, Alcoa recorded a reserve for the Vancouver location at that time. Evergreen decommissioned the smelter and cleaned up its portion of the site under a consent order with the Washington Department of Ecology (WDE). In February 2008, Evergreen notified Alcoa that it had identified numerous areas containing contamination that predated 1987. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Separately, in September 2008, Alcoa completed a Remedial Investigation/Feasibility Study (RI/FS) under the Washington State Model Toxics Control Act and negotiated a consent decree with WDE, which requires Alcoa to complete cleanup of PCB contaminated sediments in the Columbia River as well as remediate soil contamination in upland portions of the Vancouver property. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Late in 2008, Alcoa started cleanup work on the Columbia River and discovered additional contamination and waste materials along the shoreline area and in upland areas. In addition, Evergreen presented additional cost estimates for contaminated areas that were discovered since March 2008. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>As a result of all of the above items related to the former Vancouver site, Alcoa increased the environmental reserve by $16 in 2008. As cleanup work progresses and final remedies are negotiated with WDE, a subsequent reserve adjustment may be necessary. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Based on the foregoing, it is possible that Alcoa’s financial position, liquidity, or results of operations, in a particular period, could be materially affected by matters relating to these sites. However, based on facts currently available, management believes that adequate reserves have been provided and that the disposition of these matters will not have a materially adverse effect on the financial position, liquidity, or the results of operations of the Company. </FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Alcoa’s remediation reserve balance was $316 and $279 at December&nbsp;31, 2008 and December&nbsp;31, 2007 (of which $39 and $51 was classified as a current liability), respectively, and reflects the most probable costs to remediate identified environmental conditions for which costs can be reasonably estimated. In 2008, the remediation reserve was increased by $69, mostly due to the adjustments related to the Grasse River and former Vancouver property discussed above. In 2007, the remediation reserve was decreased by $10 consisting of a $15 adjustment for the liabilities associated with a previously owned smelter site and a $5 adjustment for liabilities at the Russian rolling mills and extrusion plants, both of which were partially offset by a net increase of $10 in liabilities associated with various locations. The $15 and $5 adjustments were made after further investigations were completed and Alc oa was able to obtain additional information about the environmental condition and the associated liabilities related to these sites. The changes to the remediation reserve were recorded in Cost of goods sold on the accompanying Statement of Consolidated Operations in both periods. Payments related to remediation expenses applied against the reserve were $32 and $30 in 2008 and 2007, respectively. These amounts include expenditures currently mandated, as well as those not required by any regulatory authority or third party. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Included in annual operating expenses are the recurring costs of managing hazardous substances and environmental programs. These costs are estimated to be approximately 2% of cost of goods sold. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Investments.</B> Alumínio is a participant in several hydroelectric power construction projects in Brazil for purposes of increasing its energy self-sufficiency and providing a long-term, low-cost source of power for its facilities. Two of these projects, Machadinho and Barra Grande, were completed in 2002 and 2006, respectively. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Alumínio committed to taking a share of the output of the Machadinho and Barra Grande projects each for 30 years at cost (including cost of financing the project). In the event that other participants in either one of these projects fail to fulfill their financial responsibilities, Alumínio may be required to fund a portion of the deficiency. In accordance with the respective agreements, if Alumínio funds any such deficiency, its participation and share of the output from the respective project will increase proportionately. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In January 2007, Alumínio exercised pre-emptive rights to acquire an additional ownership interest of 4.67% in Machadinho for $18. This additional investment provides an additional 15 megawatts of assured energy. This transaction was approved by the Brazilian Energy Agency, antitrust regulators, and other third parties. In September 2007, Alumínio’s ownership interest of 31.89% was reduced by 0.9% due to the admission of a new investor to the Machadinho consortium. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>With Machadinho and Barra Grande, Alumínio’s current power self-sufficiency is approximately 40%, to meet a total energy demand of approximately 690 megawatts from Brazilian primary plants. Alumínio accounts for the Machadinho and Barra Grande hydroelectric projects on the equity method. Alumínio’s investment participation in these projects is 30.99% for Machadinho and 42.18% for Barra Grande. Its total investment in these projects was $182 (R$436) and $241 (R$426) at December&nbsp;31, 2008 and 2007, respectively. Alcoa’s maximum exposure to loss on these completed projects is approximately $400 (R$990), which represents Alcoa’s investment and guarantees of debt as of December&nbsp;31, 2008. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In the first quarter of 2006, Alumínio acquired an additional 6.41% share in the Estreito hydroelectric power project, reaching 25.49% of total participation in the consortium. This additional share entitles Alumínio to 38 megawatts of assured energy. Alumínio’s share of the project is estimated to have installed capacity of approximately 280 megawatts and assured power of approximately 150 megawatts. In December 2006, the consortium obtained the environmental installation license, after completion of certain socioeconomic and cultural impact studies as required by a governmental agency. Construction began in the first quarter of 2007 and is expected to be completed in 2011. Total estimated project costs are approximately $1,500 (R$3,600) and Alumínio’s share is approximately $380 (R$920). As of December&nbsp;31, 2008, Alumínio has contributed $140 (R$330) towards the $38 0 commitment. </FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In the first quarter of 2007, construction began on the Serra do Facão hydroelectric power project. Construction of this facility is expected to be completed in 2010. The implementation of construction activities had been temporarily suspended in 2004 due to the temporary suspension of the project’s installation permit by legal injunction issued by the Brazilian Judicial Department (Public Ministry). Since 2004, this project was placed on hold due to unattractive market conditions. In mid-2006, market conditions became favorable and Alumínio proceeded with plans to begin construction. In September 2006, the national environmental agency renewed the installation permit allowing construction to commence. Alumínio’s share of the Serra do Facão project is 34.97%, which decreased by 4.53% in the first quarter of 2007 due to the approval of a new shareholder structure, and entitles Alum& #xeD;nio to approximately 65 megawatts of assured power. Total estimated project costs are approximately $340 (R$820) and Alumínio’s share is approximately $120 (R$290). As of December&nbsp;31, 2008, Alumínio has contributed $80 (R$180) towards the $120 commitment. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In 2004, Alcoa acquired a 20% interest in a consortium, which subsequently purchased the Dampier to Bunbury Natural Gas Pipeline (DBNGP) in Western Australia, in exchange for an initial cash investment of $17 (A$24). The investment in the DBNGP was made in order to secure a competitively priced long-term supply of natural gas to Alcoa’s refineries in Western Australia. This investment was classified as an equity investment. Alcoa has made additional contributions of $84 (A$109), including $9 (A$12) and $31 (A$38) in 2008 and 2007, respectively, and committed to invest an additional $49 (A$74) to be paid as the pipeline expands through 2011. In March 2008, additional equity contributions of $38 (A$40) were approved to support further expansion of the gas transmission capacity. In addition to its equity ownership, Alcoa has an agreement to purchase gas transmission services from the DBNGP. Alcoa’s maxi mum exposure to loss on the investment and the related contract is approximately $340 (A$490) as of December&nbsp;31, 2008. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Purchase Obligations.</B> Alcoa is party to unconditional purchase obligations for energy that expire between 2012 and 2028. Commitments related to these contracts total $101 in 2009, $99 in 2010, $96 in 2011, $125 in 2012, $114 in 2013, and $1,658 thereafter. Expenditures under these contracts totaled $96 in 2008, $110 in 2007, and $86 in 2006. Additionally, Alcoa has entered into other purchase commitments for energy, raw materials, and other goods and services, which total $2,089 in 2009, $1,939 in 2010, $1,220 in 2011, $846 in 2012, $826 in 2013, and $13,472 thereafter. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Operating Leases.</B> Certain computer equipment, plant equipment, vehicles, and buildings are under operating lease agreements. Total expense from continuing operations for all leases was $275 in 2008, $286 in 2007, and $265 in 2006. Under long-term operating leases, minimum annual rentals are $398 in 2009, $320 in 2010, $215 in 2011, $113 in 2012, $139 in 2013, and $321 thereafter. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Letters of Credit.</B> Alcoa has outstanding letters of credit primarily related to workers’ compensation, derivative contracts, and leasing obligations. The total amount committed under these letters of credit, which expire at various dates mostly in 2009, was $600 at December&nbsp;31, 2008. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Guarantees.</B> Alcoa has outstanding bank guarantees related to legal, customs duties, and leasing obligations, among others. The total amount committed under these guarantees, which expire at various dates, was $389 at December 31, 2008. Alcoa has also issued guarantees of third-party obligations related to project financing for hydroelectric power projects in Brazil, which expire in 2015 through 2018, that total $230 at December&nbsp;31, 2008. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Surety Bonds.</B> Alcoa has outstanding surety bonds primarily related to customs duties, self-insurance, and legal obligations. The total amount committed under these bonds, which automatically renew or expire at various dates in 2009, was $41 at December 31, 2008. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Other.</B> In July 2006, the European Commission (EC) announced that it has opened an investigation to establish whether an extension of the regulated preferential electricity tariff granted by Italy to some energy-intensive industries complies with European Union (EU) state aid rules. The new Italian power tariff modifies the preferential tariff that was in force until December&nbsp;31, 2005 and extends it through 2010. Alcoa has been operating in Italy for more than 10 years under a power supply structure approved by the EC in 1996. That measure, like the new one, was based on Italian state legislation that provides a competitive power supply to the primary aluminum industry and is not considered state </FONT><FONT face="Times New Roman" size=2>aid by the Italian Government. The EC’s announcement states that it has doubts about the measure’s compatibility with EU legi slation and concerns about distortion of competition in the European market of primary aluminum, where energy is an important part of the production costs. The opening of an in-depth investigation gives interested parties the opportunity to comment on the proposed measures; it does not prejudge the outcome of the procedure. It is Alcoa’s understanding that the Italian Government’s continuation of the electricity tariff was done in conformity with all applicable laws and regulations. Alcoa believes that the total potential impact from a loss of the tariff would be approximately $21 pretax (€15)&nbsp;per month in higher power costs at its Italian smelters. While Alcoa believes that any additional cost would only be assessed prospectively from the date of the EC’s decision on this matter, it is possible that the EC could rule that the assessment must be retroactively applied to January 2006. A decision by the EC is expected in 2009. On November&nbsp;29, 2006, Alcoa filed an a ppeal before the European Court of First Instance seeking the annulment of the decision of the EC to open the investigation alleging that such decision did not follow the applicable procedural rules. This appeal, which may be withdrawn by Alcoa at any time, is expected to be resolved in 2009. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In January 2007, the EC announced that it has opened an investigation to establish whether the regulated electricity tariffs granted by Spain comply with EU state aid rules. Alcoa has been operating in Spain for more than nine years under a power supply structure approved by the Spanish Government in 1986, an equivalent tariff having been granted in 1983. The investigation is limited to the year 2005 and it is focused both on the energy-intensive consumers and the distribution companies. The investigation provided 30 days to any interested party to submit observations and comments to the EC. With respect to the energy-intensive consumers, the EC is opening the investigation on the assumption that prices paid under the tariff in 2005 were lower than the pool price mechanism, therefore being, in principle, artificially below market conditions. Alcoa has submitted comments in which the company has provided evidence t hat prices paid by energy-intensive consumers were in line with the market, in addition to various legal arguments defending the legality of the Spanish tariff system. It is Alcoa’s understanding that the Spanish tariff system for electricity is in conformity with all applicable laws and regulations, and therefore no state aid is present in that tariff system. Alcoa believes that the total potential impact from an unfavorable decision would be approximately $11 pretax (€8). While Alcoa believes that any additional cost would only be assessed for the year 2005, it is possible that the EC could extend its investigation to later years. A decision by the EC is expected in 2009. If the EC’s investigation concludes that the regulated electricity tariffs for industries are unlawful, Alcoa will have an opportunity to challenge the decision in the EU courts. </FONT></P> 0.68 <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>K. Debt </B></FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Long-Term Debt. </B></FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="82%"></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2><B>December&nbsp;31,</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>6.625% Notes, due 2008</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>150</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>7.375% Notes, due 2010</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>511</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>511</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>6.5% Notes, due 2011</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>584</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>584</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>6% Notes, due 2012</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>517</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>517</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>5.375% Notes, due 2013</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>600</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>600</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>6% Notes, due 2013</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>750</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>5.55% Notes, due 2017</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>750</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>750</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>6.5% Bonds, due 2018</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>250</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>250</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>6.75% Notes, due 2018</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>750</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>5.72% Notes, due 2019</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>750</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>750</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>5.87% Notes, due 2022</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>627</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>627</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>5.9% Notes, due 2027</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>625</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>625</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>6.75% Bonds, due 2028</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>300</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>300</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>5.95% Notes due 2037</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>625</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>625</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>BNDES Loans, due 2009-2029 (8.1% weighted average rate in 2008)</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>546</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Medium-term Notes, due 2009-2013 (7.1% weighted average rate in 2008 and 2007)</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>23</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>43</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Alcoa Alumínio S.A. 7.5% Export Notes, due 2008</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>21</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Derivative fair value adjustments</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>168</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>20</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Other</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>189</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>200</FONT></TD></TR> <TR> <TD vAlign=top></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>8,565</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>6,573</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Less: amount due within one year</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>56</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>202</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>8,509</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>6,371</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The amount of long-term debt maturing in each of the next five years, including the effects of fair value adjustments, is $56 in 2009, $651 in 2010, $752 in 2011, $648 in 2012, and $1,500 in 2013. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In March 2008, Alumínio entered into two separate loan agreements (the “Loans”) with BNDES (Brazil’s National Bank for Economic and Social Development). It is important to note that the interest rates presented below are based on amounts that will be borrowed in Brazil and are not equivalent to the interest rates Alcoa would pay if such amounts were borrowed in the U.S. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The first loan provides for a commitment of $209 (R$500), which is divided into five subloans, and will be used to pay for certain expenditures of the Juruti bauxite mine development. Interest on four of the subloans (R$470) is equal to BNDES’ long-term interest rate, currently 6.25%, plus a weighted-average margin of 2.13%. Interest on the fifth subloan (R$30) is equal to the average cost incurred by BNDES in raising capital outside of Brazil, currently 4.46%, plus a margin of 2.40%. Principal and interest are payable monthly beginning in September 2009 and ending in November 2014 for the four subloans totaling R$470 and beginning in November 2009 and ending in January 2015 for the subloan totaling R$30. Prior to these beginning payment dates, interest is payable quarterly on borrowed amounts. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The second loan provides for a commitment of $271 (R$650), which is divided into three subloans, and will be used to pay for certain expenditures of the São Luís refinery expansion. Interest on two of the subloans (R$589) is equal to BNDES’ long-term interest rate plus a weighted-average margin of 1.99%. Interest on the third subloan (R$61) is equal to the average cost incurred by BNDES in raising capital outside of Brazil plus a margin of 2.02%. Principal and interest are payable monthly beginning in December 2009 and ending in February 2015 for the two subloans totaling R$589 and beginning in February 2010 and ending in April 2015 for the subloan totaling R$61. Prior to these beginning payment dates, interest is payable quarterly on borrowed amounts. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The Loans may be repaid early without penalty with the approval of BNDES. Also, the Loans include a financial covenant that states that Alcoa must maintain a debt-to-equity ratio of 1.5 or lower. As of December&nbsp;31, 2008, Alumínio borrowed $196 (R$469) and $250 (R$600) under the loans associated with the Juruti and São Luís growth projects, respectively. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In June 2008, Alumínio finalized certain documents related to another loan agreement with BNDES. This loan provides for a commitment of $287 (R$687), which is divided into three subloans, and will be used to pay for certain expenditures of the Estreito hydroelectric power project. Interest on the three subloans is equal to BNDES’ long-term interest rate plus a weighted-average margin of 1.48%. Principal and interest are payable monthly beginning in October 2011 and ending in September 2029 for the two subloans totaling R$667 and beginning in January 2011 and ending in December 2016 for the subloan totaling R$20. Prior to these beginning payment dates, interest is payable quarterly on borrowed amounts. This loan may be repaid early without penalty with the approval of BNDES. As of December&nbsp;31, 2008, $100 (R$240) was borrowed under this loan. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Also in March 2008, Alcoa filed an automatic shelf registration statement with the Securities and Exchange Commission for an indeterminate amount of securities for future issuance. This shelf registration statement replaced Alcoa’s existing shelf registration statement. As of December&nbsp;31, 2008, $1,500 in senior debt securities were issued under the new shelf registration statement as follows. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In July 2008, Alcoa completed a public debt offering under its existing shelf registration statement (filed in March 2008) for $1,500 in new notes. The $1,500 is comprised of $750 of 6.00% Notes due 2013 (the “2013 Notes”) and $750 of 6.75% Notes due 2018 (the “2018 Notes” and, collectively with the 2013 Notes, the “Notes”). Alcoa received $1,489 in net proceeds from the public debt offering reflecting original issue discounts and the payment of financing costs. The net proceeds were used for general corporate purposes, including the reduction of outstanding commercial paper, purchases of outstanding common stock under the current stock repurchase program, working capital requirements, and capital expenditures. The original issue discounts and financing costs were deferred and will be amortized to interest expense using the effective interest method over the respective ter ms of the Notes. Interest on the Notes is paid semi-annually in January and July, commencing January 2009. Alcoa has the option to redeem the Notes, </FONT><FONT face="Times New Roman" size=2>as a whole or in part, at any time or from time to time, on at least 30 days, but not more than 60 days, prior notice to the holders of the Notes at a redemption price specified in the Notes. The Notes are subject to repurchase upon the occurrence of a change in control repurchase event (as defined in the Notes) at a repurchase price in cash equal to 101% of the aggregate principal amount of the Notes repurchased, plus any accrued and unpaid interest on the Notes repurchased. The Notes rank <I>pari passu</I> with Alcoa’s other unsecured senior unsubordinated indebtedness. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Also, in July 2008, Alcoa entered into $800 of forward starting swaps to hedge interest rates in anticipation of the Notes issuances. The swaps hedged equal amounts of the 2013 Notes and the 2018 Notes ($400 each). These swaps were terminated in conjunction with the issuances of the Notes at a loss of $11. This loss will be amortized over the life of the Notes as additional interest expense. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In January 2007, Alcoa completed a public debt offering under its existing shelf registration statement for $2,000 in new senior notes. The $2,000 is comprised of $750 of 5.55% Notes due 2017, $625 of 5.9% Notes due 2027, and $625 of 5.95% Notes due 2037 (collectively, the “Senior Notes”). Alcoa received $1,979 in net proceeds from the public debt offering reflecting original issue discounts and the payment of financing costs. A portion of the net proceeds from the Senior Notes was used by Alcoa to repay $1,132 of its commercial paper outstanding as of December&nbsp;31, 2006 in January 2007. Additionally, Alcoa used a portion of the net proceeds to pay $338 related to a tender offer of its 4.25% Notes due 2007 (see below). The remaining net proceeds were used to repay new commercial paper that was borrowed in January 2007 prior to the issuance of the Senior Notes and for general corporate purpose s. Alcoa paid $15 in financing costs associated with the issuance of the Senior Notes. These costs were deferred and will be amortized, along with the original issue discounts, to interest expense using the effective interest method over the respective terms of the Senior Notes. Interest on the Senior Notes is paid semi-annually in February and August, which commenced in August 2007. Alcoa has the option to redeem the Senior Notes, as a whole or in part, at any time or from time to time, on at least 30 days but not more than 60 days prior notice to the holders of the Senior Notes at a redemption price specified in the Senior Notes. The Senior Notes are subject to repurchase upon the occurrence of a change in control repurchase event (as defined in the Senior Notes) at a repurchase price in cash equal to 101% of the aggregate principal amount of the Senior Notes repurchased, plus any accrued and unpaid interest on the Senior Notes repurchased. The Senior Notes rank <I>pari passu</I> with Alcoa 019;s other senior unsecured unsubordinated indebtedness. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Also in January 2007, Alcoa commenced a tender offer (the “Offer”) to purchase for cash any and all of its 4.25% Notes due 2007 (the “2007 Notes”). Upon expiration of the Offer, $333 of the aggregate outstanding principal amount of the 2007 Notes was validly tendered and accepted. At December&nbsp;31, 2006, the 2007 Notes had an outstanding balance of $792 and an original maturity of August&nbsp;15, 2007. The $333 was reflected as long-term on the December&nbsp;31, 2006 Consolidated Balance Sheet due to the fact that this amount was refinanced with new long-term debt instruments. Alcoa paid a total of $338, which consisted of the purchase price of $331 for the tendered 2007 Notes plus $7 in accrued and unpaid interest, to the holders of the tendered 2007 Notes in February 2007. An immaterial gain was recognized for the early retirement of the $333 principal amount. In August 2007, Alcoa repaid the $459 of outstanding principal of the 2007 Notes that was not tendered under the Offer. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Lastly, in January 2007, Alcoa commenced offers to exchange up to $500 of each of its outstanding 7.375% Notes due 2010 (2010 notes), 6.5% Notes due 2011 (2011 notes), and 6% Notes due 2012 (2012 notes), (collectively, the “old notes”), for up to $1,500 of new Notes due 2019 and 2022. At December&nbsp;31, 2006, each of the old notes had an outstanding balance of $1,000. Upon expiration of the exchange offers in February 2007, principal amounts of $489 of 2010 notes, $416 of 2011 notes, and $483 of 2012 notes were validly tendered and accepted. In exchange for the tendered amounts, Alcoa issued $750 of 5.72% Notes due 2019 and $627 of 5.87% Notes due 2022 (collectively, the “new notes”), and paid $98 in cash. The $98 consisted of $75 for the exchange price, which included an early participation incentive for those holders that tendered old notes by February&nbsp;5, 2007, $11 in p rincipal to retire tendered old notes not exchanged, and the remainder was for accrued and unpaid interest on the tendered old notes. The $75, along with $6 in financing costs associated with the exchange offers plus the remaining unamortized debt issuance costs, original issue discounts, and terminated interest rate swaps associated with the old notes, were deferred and will be amortized to interest expense using the effective interest method over the respective terms of the new notes. Alcoa recognized an immaterial loss for the early retirement of the $11 in old notes. Interest on the new notes is paid semi-</FONT><FONT face="Times New Roman" size=2>annually in February and August, which commenced in August 2007. Alcoa has the option to redeem the new notes, as a whole or in part, at any time or from time to time, on at least 30 days but not more than 60 days prior notice to the holders of the new notes at a redemption price specified in the new notes. The new notes are subject to repurchase up on the occurrence of a change in control repurchase event (as defined in the new notes) at a repurchase price in cash equal to 101% of the aggregate principal amount of the new notes repurchased, plus any accrued and unpaid interest on the new notes repurchased. The new notes rank <I>pari passu</I> with Alcoa’s other senior unsecured unsubordinated indebtedness. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In February 2007, Alcoa entered into a registration rights agreement (the “Agreement”) related to the new notes. Under the Agreement, Alcoa agreed to file a registration statement in order to exchange the new notes for registered securities having terms identical in all material respects to the new notes, except that the registered securities would not contain transfer restrictions. Alcoa filed the registration statement with the Securities and Exchange Commission (SEC) in March 2007 and it was declared effective in April 2007. The registered exchange offer was made in April 2007 and expired in May 2007. Upon expiration of the registered exchange offer, virtually all of the new notes were exchanged for registered securities. This exchange had no impact on the accompanying Consolidated Financial Statements. Under the Agreement, Alcoa also agreed that under certain circumstances it would file a shelf r egistration statement with the SEC covering resales by holders of the new notes in lieu of the registered exchange offer. In the event of a registration default, as defined in the Agreement, additional interest would accrue on the aggregate principal amount of the new notes affected by such default at a rate per annum equal to 0.25% during the first 90 days immediately following the occurrence of any registration default, and would increase to a maximum of 0.50% thereafter. As of December&nbsp;31, 2008, Alcoa is not in default under the Agreement and management has determined that the likelihood of such a default is remote. The Agreement had no impact on the accompanying Consolidated Financial Statements. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Alumínio’s export notes are collateralized by receivables due under an export contract. Certain financial ratios must be maintained, including the maintenance of a minimum debt service ratio, as well as a certain level of tangible net worth of Alumínio and its subsidiaries. The tangible net worth calculation excludes the effects of foreign currency changes. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The derivative fair value adjustments result from changes in the carrying amounts of certain fixed-rate borrowings that have been designated as fair value hedges. Of the $168 in 2008, $159 related to outstanding hedges and $9 related to hedges that were settled early. Of the $20 in 2007, $5 related to outstanding hedges and $15 related to hedges that were settled early. The outstanding hedges effectively convert the interest rate from fixed to floating on $1,890 of debt through 2018. The adjustments for hedges that were settled early are being recognized as reductions of interest expense over the remaining maturity of the related debt (through 2028). See Note X for additional information on interest rate swaps. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Commercial Paper.</B> Commercial paper was $1,535 at December&nbsp;31, 2008 and $856 at December&nbsp;31, 2007. Commercial paper matures at various times within one year and had an annual weighted average interest rate of 4.0% and 5.4% during 2008 and 2007, respectively. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In October 2007, Alcoa entered into a Five-Year Revolving Credit Agreement, dated as of October&nbsp;2, 2007 (the “Credit Agreement”), with a syndicate of lenders and issuers named therein. The Credit Agreement provides a $3,250 senior unsecured revolving credit facility (the “Credit Facility”), the proceeds of which are to be used to provide working capital or for other general corporate purposes of Alcoa, including support of Alcoa’s commercial paper program. Subject to the terms and conditions of the Credit Agreement, Alcoa may from time to time request increases in lender commitments under the Credit Facility, not to exceed $500 in aggregate principal amount, and may also request the issuance of letters of credit, subject to a letter of credit sub-limit of $500 under the Credit Facility. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The Credit Facility matures on October&nbsp;2, 2012, unless extended or earlier terminated in accordance with the provisions of the Credit Agreement. Alcoa may make two one-year extension requests during the term of the Credit Facility, with any extension being subject to the lender consent requirements set forth in the Credit Agreement. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The Credit Facility is unsecured and amounts payable under it will rank <I>pari passu</I> with all other unsecured, unsubordinated indebtedness of Alcoa. Borrowings under the Credit Facility may be denominated in U.S. dollars or </FONT><FONT face="Times New Roman" size=2>Euros. Loans will bear interest at (i)&nbsp;a base rate or (ii)&nbsp;a rate equal to LIBOR plus an applicable margin based on the credit ratings of Alcoa’s outstanding senior unsecured long-term debt. The applicable margin on LIBOR loans will be 0.33%&nbsp;per annum based on Alcoa’s long-term debt ratings, as of December 31, 2008. Loans may be prepaid without premium or penalty, subject to customary breakage costs. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The Credit Facility replaces $3,000 in aggregate principal amount of revolving credit facilities maintained by Alcoa under the following credit agreements, which were terminated effective October&nbsp;2, 2007: (i)&nbsp;$1,000 Five-Year Revolving Credit Agreement dated as of April&nbsp;22, 2005, (ii)&nbsp;$1,000 Five-Year Revolving Credit Agreement dated as of April&nbsp;23, 2004, as amended, and (iii)&nbsp;$1,000 Five-Year Revolving Credit Agreement dated as of April&nbsp;25, 2003, as amended (collectively, the “Former Credit Agreements”). </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The Credit Agreement includes covenants substantially similar to those in the Former Credit Agreements, including, among others, (a)&nbsp;a leverage ratio, (b)&nbsp;limitations on Alcoa’s ability to incur liens securing indebtedness for borrowed money, (c)&nbsp;limitations on Alcoa’s ability to consummate a merger, consolidation or sale of all or substantially all of its assets and (d)&nbsp;limitations on Alcoa’s ability to change the nature of its business. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The obligation of Alcoa to pay amounts outstanding under the Credit Facility may be accelerated upon the occurrence of an “Event of Default” as defined in the Credit Agreement. Such Events of Default include, among others, (a)&nbsp;Alcoa’s failure to pay the principal of, or interest on, borrowings under the Credit Facility, (b)&nbsp;any representation or warranty of Alcoa in the Credit Agreement proving to be materially false or misleading, (c)&nbsp;Alcoa’s breach of any of its covenants contained in the Credit Agreement, and (d)&nbsp;the bankruptcy or insolvency of Alcoa. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In July 2008, Alcoa increased the capacity of the Credit Facility by $175 as provided for under the Credit Agreement. In October 2008, Lehman Commercial Paper Inc. (LCPI), a lender under the Credit Agreement with $150 in commitments, filed for bankruptcy protection under section 11 of the United States Bankruptcy Code. It is not certain if LCPI will honor its obligations under the Credit Agreement. The total capacity of the Credit Facility, excluding LCPI’s commitment, is $3,275. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>There were no amounts outstanding under the Credit Facility at December&nbsp;31, 2008 and 2007. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Short-Term Borrowings. </B>Short-term borrowings were $478 and $563 at December&nbsp;31, 2008 and 2007, respectively. These amounts included $236 and $314 at December&nbsp;31, 2008 and 2007, respectively, related to accounts payable settlement arrangements with certain vendors and third-party intermediaries. These arrangements provide that, at the vendor’s request, the third-party intermediary advances the amount of the scheduled payment to the vendor, less an appropriate discount, before the scheduled payment date and Alcoa makes payment to the third-party intermediary on the date stipulated in accordance with the commercial terms negotiated with its vendors. Alcoa records imputed interest related to these arrangements as interest expense in the Statement of Consolidated Operations. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In January 2008, Alcoa entered into a Revolving Credit Agreement (RCA-1) with two financial institutions. RCA-1 provided a $1,000 senior unsecured revolving credit facility (RCF-1), with a stated maturity of March&nbsp;28, 2008. RCA-1 contained a provision that if there were amounts borrowed under RCF-1 at the time Alcoa received the proceeds from the sale of the Packaging and Consumer businesses, the company must use the net cash proceeds to prepay the amount outstanding under RCF-1. Additionally, upon Alcoa’s receipt of such proceeds, the lenders’ commitments under RCF-1 would be reduced by a corresponding amount, up to the total commitments then in effect under RCF-1, regardless of whether there was an amount outstanding under RCF-1. In February 2008, Alcoa borrowed $1,000 under RCF-1 and used the proceeds to reduce outstanding commercial paper and for general corporate purposes. Subsequent to the $1,000 borrowing, Alcoa completed the sale of its Packaging and Consumer businesses in February 2008 (see Note F for additional information). As a result, Alcoa also repaid the $1,000 under RCF-1 in February 2008, and the lenders’ commitments under RCF-1 were reduced to zero effectively terminating RCA-1. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Also in January 2008, Alcoa entered into a Revolving Credit Agreement (RCA-2) with LCPI, as administrative agent, and Lehman Brothers Commercial Bank (LBCB), as lender. RCA-2 provided a $1,000 senior unsecured revolving </FONT><FONT face="Times New Roman" size=2>credit facility (RCF-2), which would have matured on January&nbsp;31, 2009. In October 2008, LCPI filed for bankruptcy protection under section 11 of the United States Bankruptcy Code. To Alcoa’s knowledge, LBCB has not filed for bankruptcy protection. As a result, in October 2008, Alcoa gave notice in accordance with the provisions of RCA-2 to permanently terminate in whole LBCB’s total commitments under RCF-2 effective October&nbsp;30, 2008. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>On October&nbsp;14, 2008, Alcoa entered into a Revolving Credit Agreement (RCA-3) with a syndicate of lenders. RCA-3 provides a $1,150 senior unsecured revolving credit facility (RCF-3), which matures on October&nbsp;12, 2009. Loans will bear interest at (i)&nbsp;a base rate or (ii)&nbsp;a rate equal to LIBOR, plus an applicable margin based on the credit ratings of Alcoa’s outstanding senior unsecured long-term debt. The applicable margin on base rate and LIBOR loans will be 1.375% and 1.875%, respectively, per annum based on Alcoa’s long-term debt ratings, as of December 31, 2008. Alcoa will also pay a facility fee, currently 0.375%, on the aggregate commitments, whether used or unused, based on its long-term debt ratings. Additionally, if there is an amount outstanding under RCF-3 on the last calendar day of any of the next three quarterly periods, Alcoa will pay a duration fee to the lenders. The duration fee is equal to 0.5% of such outstanding amount on the respective day starting on December&nbsp;31, 2008 and increases by 0.5% each quarter thereafter. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Loans may be prepaid without premium or penalty, subject to customary breakage costs. RCA-3 also provides for a mandatory prepayment, not to exceed the amount outstanding under RCF-3 at such time, equal to 100% of the net proceeds Alcoa receives from certain future debt or equity issuances in capital markets transactions or 50% of the net proceeds Alcoa receives from asset sales (other than those in the ordinary course of business), if the proceeds from all asset sales exceed $50. Any prepayments made related to the net proceeds from assets sales or that would have been made if amounts were outstanding under RCF-3 also reduce the lenders’ commitments by a corresponding amount. Amounts payable under RCF-3 will rank <I>pari passu</I> with all other unsecured, unsubordinated indebtedness of Alcoa. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>RCA-3 includes the following covenants, among others, (a)&nbsp;a leverage ratio, (b)&nbsp;limitations on Alcoa’s ability to incur liens securing indebtedness for borrowed money, (c)&nbsp;limitations on Alcoa’s ability to consummate a merger, consolidation, or sale of all or substantially all of its assets, and (d)&nbsp;limitations on Alcoa’s ability to change the nature of its business. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The obligation of Alcoa to pay amounts outstanding under RCF-3 may be accelerated upon the occurrence of an “Event of Default” as defined in RCA-3. Such Events of Default include, among others, (a)&nbsp;Alcoa’s failure to pay the principal of, or interest on, borrowings under RCF-3, (b)&nbsp;any representation or warranty of Alcoa in RCA-3 proving to be materially false or misleading, (c)&nbsp;Alcoa’s breach of any of its covenants contained in RCA-3, and (d)&nbsp;the bankruptcy or insolvency of Alcoa. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In October and November 2008, Alcoa increased the capacity of RCF-3 by $500 and $250, respectively, as provided for under RCA-3. Alcoa paid a total of $43 in financing costs, which were deferred and will be amortized to interest expense over the term of the facility, for the initial capacity under RCF-3 as well as for the $750 in increased capacity. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>There were no amounts outstanding under RCF-3 at December&nbsp;31, 2008 (see Note Y for additional information). </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>C. Asset Retirement Obligations </B></FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Alcoa has recorded AROs related to legal obligations associated with the normal operations of bauxite mining, alumina refining, and aluminum smelting facilities. These AROs consist primarily of costs associated with spent pot lining disposal, closure of bauxite residue areas, mine reclamation, and landfill closure. Alcoa also recognizes AROs for any </FONT><FONT face="Times New Roman" size=2>significant lease restoration obligation, if required by a lease agreement, and for the disposal of regulated waste materials related to the demolition of certain power facilities. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The following table details the carrying value of recorded AROs by major category: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="86%"></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2><B>December&nbsp;31,</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Spent pot lining disposal</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>155</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>176</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Closure of bauxite residue areas</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>89</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>73</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Mine reclamation</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>45</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>49</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Land fill closure</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>11</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>11</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Other</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>302</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>311</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The following table details the changes in the total carrying value of recorded AROs: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="86%"></TD> <TD vAlign=bottom width="6%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2><B>December&nbsp;31,</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Balance at beginning of year</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>311</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>291</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Accretion expense</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>15</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>13</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Payments</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(35</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(42</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Liabilities incurred</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>41</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>34</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Translation and other</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(30</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>15</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Balance at end of year</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>302</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>311</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In addition to the above AROs, certain CAROs related to alumina refineries, aluminum smelters, and fabrication facilities have not been recorded in the Consolidated Financial Statements due to uncertainties surrounding the ultimate settlement date. Such uncertainties exist as a result of the perpetual nature of the structures, maintenance and upgrade programs, and other factors. At the date a reasonable estimate of the ultimate settlement date can be made, Alcoa would record a retirement obligation for the removal, treatment, transportation, storage, and (or) disposal of various regulated assets and hazardous materials such as asbestos, underground and aboveground storage tanks, PCBs, various process residuals, solid wastes, electronic equipment waste, and various other materials. If Alcoa was required to demolish all such structures immediately, the estimated CARO as of December&nbsp;31, 2008 ranges from less than $1 to $52 per structure (157 structures) in today’s dollars. </FONT></P> 22175000000 -261000000 1234000000 -23000000 9000000 <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>I. Investments </B></FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="82%"></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2><B>December&nbsp;31,</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Equity investments</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,885</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,952</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Other investments</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>30</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>86</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,915</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,038</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Equity Investments. </B>Equity investments are primarily comprised of a 45.45% investment in Sapa AB; a 50% investment in Elkem Aluminium ANS (Elkem); an 8.5% investment in Shining Prospect Pte. Ltd. (SPPL); and investments in several hydroelectric power construction projects in Brazil (see Note N for additional information). </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>On February&nbsp;1, 2008, Alcoa joined with the Aluminum Corporation of China to acquire 12% of the U.K. common stock of Rio Tinto plc (RTP) for approximately $14,000. The investment was made through a special purpose vehicle called SPPL, which is a private limited liability company, created solely for the purpose of acquiring the RTP shares. The RTP shares were purchased by SPPL in the open market through an investment broker. The following is a description of the transaction structure between Alcoa and SPPL and the related accounting impacts. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>On February&nbsp;6, 2008, Alcoa contributed $1,200 of the $14,000 through the purchase of a Convertible Senior Secured Note (the “Note”) executed on January&nbsp;30, 2008 by SPPL which is convertible into approximately 8.5% of the equity shares of SPPL. Under the Note, Alcoa has the right, at any time on or before the close of business on the maturity date of the Note (February 1, 2011), to convert the Note, in whole or in part, for a number of shares of SPPL that will result </FONT><FONT face="Times New Roman" size=2>in Alcoa having a debt-to-equity ratio in SPPL equal to the debt-to-equity ratio of all investors, in the aggregate, in SPPL. The unpaid principal amount of the Note will be proportionately reduced to reflect any conversion. The Note further provides that Alcoa is permitted at any time to increase the number of shares of SPPL which Alcoa would acquire on full convers ion of the Note up to a maximum of 25% of the outstanding shares of SPPL by increasing the unpaid outstanding principal of the Note or acquiring shares of SPPL directly. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Additionally, under the Note, Alcoa has the right, at any time following the period ending six months from the issuance date of the Note or upon the liquidation or winding-up of SPPL, to require SPPL to either (i)&nbsp;distribute, in exchange for cancellation of the Note and any equity interests into which it may have been converted, to Alcoa a specified number of ordinary shares of RTP (the “Ordinary Shares”) or (ii)&nbsp;to purchase Alcoa’s debt and equity interest in SPPL at a price equal to the then-current market value of such specified number of Ordinary Shares. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The Note provides that SPPL will secure the principal, interest, and other obligations of SPPL to Alcoa under the Note with the number of Ordinary Shares it purchases with the proceeds it received from the issuance of the Note. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Alcoa’s investment in SPPL through the Note is in-substance an investment in common stock of SPPL. Additionally, investments of three to five percent or greater in limited liability companies that are essentially equivalent to partnerships are considered to be more than minor, and, therefore, are accounted for under the equity method. As a result, Alcoa accounted for its $1,200 investment in SPPL as an equity method investment. In 2008, Alcoa recorded $14 in equity income, which represents Alcoa’s share of the semiannual dividends that SPPL received as a shareholder of RTP. Also, Alcoa recorded an unrealized loss in other comprehensive income of $427 ($658 pretax) in 2008, representing its share of SPPL’s total unrealized loss related to the decrease in fair value of the RTP shares, which are accounted for as available-for-sale securities by SPPL. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Lehman Brothers International Europe (LBIE) was the custodian of the RTP shares for SPPL. In November 2008, SPPL transferred the RTP shares to a new custodian. </FONT></P> <P style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>See Note Y for additional information related to Alcoa’s investment in SPPL. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Effective June&nbsp;1, 2007, Alcoa completed the formation of a joint venture with Sapa combining Alcoa’s soft alloy extrusion business (excluding three facilities each in the U.S. and Brazil) with Sapa’s Profiles extruded aluminum business. The new joint venture, Sapa AB, is majority-owned and operated by Sapa. As of December&nbsp;31, 2007, Alcoa’s ownership percentage in the joint venture was 46% (during 2008, Alcoa and Sapa reached an agreement on the final ownership percentages with Alcoa’s estimated at 45.45%) and the carrying value of the investment was $814. The equity income from Alcoa’s ownership share was reflected in Corporate. Prior to June&nbsp;1, 2007, the assets and liabilities of Alcoa’s soft alloy extrusion business were classified as held for sale. In conjunction with the contribution of the soft alloy extrusion business to the joint venture, Alcoa recorded a $62 ($23 after-tax) reduction to the original impairment charge recorded in 2006. This adjustment was primarily the result of a higher estimated fair value of the soft alloy extrusion business than what was reflected in the original impairment charge, and was recorded as income in Restructuring and other charges on the accompanying Statement of Consolidated Operations (see Note D for additional information). </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The three facilities in Brazil that were excluded from the joint venture are being retained by Alcoa. The net assets of the three U.S. facilities not contributed to the joint venture were classified as held for sale in all periods prior to October 2007. In October 2007, Alcoa completed the sale of two of the three U.S. facilities for approximately $15 in cash while the third such U.S. facility ceased operations. An immaterial loss was recognized on the sale. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In December 2008, Alcoa entered into an agreement with Orkla ASA (Orkla) to exchange their stakes in the Sapa AB and Elkem joint ventures. Alcoa will receive Orkla’s 50% stake in Elkem while Orkla will receive Alcoa’s 45.45% stake in Sapa AB. Once the transaction is complete, Alcoa will own 100% of Elkem and Orkla will own 100% of Sapa&nbsp;AB. Elkem includes aluminum smelters in Lista and Mosjøen, Norway with a combined output of 282 kmt and the anode plant in Mosjøen in which Alcoa already holds an 82% stake. In 2008, as a result of this agreement, Alcoa recorded a charge of $333 ($223 after-tax) in Restructuring and other charges on the accompanying Statement of Consolidated Operations to adjust the carrying value of its investment in Sapa AB to the estimated fair value (see Note&nbsp;D for additional information). As of December&nbsp;31, 2008, the carrying value of Alcoa 019;s Sapa AB investment was $475. This transaction is expected to be completed in the first quarter of 2009. </FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B></B></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Other Investments. </B>Other investments are primarily comprised of available-for-sale securities and are carried at fair value with unrealized gains and losses recorded in other comprehensive income. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In September 2007, Alcoa sold its investment in Chalco for $1,942 in cash proceeds, net of transaction fees, which is reflected in Sales of investments on the accompanying Statement of Consolidated Cash Flows. Prior to its sale, the Chalco investment was classified and accounted for as an available-for-sale security. Alcoa’s original cost basis of its 7% interest in Chalco was $184 and this transaction resulted in a gain of $1,754 ($1,140 after-tax), net of transaction fees and other expenses, which was recorded in Other income, net on the accompanying Statement of Consolidated Operations and is reflected in Gains from investing activities – asset sales on the accompanying Statement of Consolidated Cash Flows. Alcoa reclassified $1,159 (after-tax) in cumulative unrealized holding gains from other comprehensive income to net income (see Statement of Shareholders’ Equity), as these gains were re alized through the sale transaction. </FONT></P> 15000000 15000000 50000000 <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>E. Goodwill and Other Intangible Assets </B></FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The following table details the changes in the carrying amount of goodwill: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="82%"></TD> <TD vAlign=bottom width="6%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2><B>December&nbsp;31,</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Balance at beginning of year</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>4,799</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>4,746</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Acquisition of businesses</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>335</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>8</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Divestiture of businesses</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(9</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Translation</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(160</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>50</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Other adjustments</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>7</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>4</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Balance at end of year</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>4,981</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>4,799</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Other intangible assets, which are included in Other assets on the accompanying Consolidated Balance Sheet, are as follows: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="79%"></TD> <TD vAlign=bottom width="7%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="7%"></TD> <TD></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2><B>December&nbsp;31, 2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Gross<BR>carrying<BR>amount</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Accumulated<BR>amortization</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Computer software</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>872</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(398</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Patents and licenses</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>150</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(68</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Other intangibles</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>73</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(41</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Total amortizable intangible assets</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,095</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(507</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Indefinite-lived trade names and trademarks</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>22</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Total other intangible assets</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,117</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(507</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD height=16></TD> <TD colSpan=3 height=16></TD> <TD colSpan=4 height=16></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2><B>December&nbsp;31, 2007</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Gross<BR>carrying<BR>amount</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Accumulated<BR>amortization</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Computer software</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>811</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(343</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Patents and licenses</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>139</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(73</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Other intangibles</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>77</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(31</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Total amortizable intangible assets</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,027</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(447</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Indefinite-lived trade names and trademarks</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>22</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Total other intangible assets</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,049</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(447</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Computer software consists primarily of software costs associated with an enterprise business solution (EBS) within Alcoa to drive common systems among all businesses. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Amortization expense related to the intangible assets in the tables above for the years ended December&nbsp;31, 2008, 2007, and 2006 was $76, $74, and $67, respectively. Amortization expense is expected to be in the range of approximately $80 to $95 annually from 2009 to 2013. </FONT></P> 229000000 792000000 0.28 0.28 -303000000 -0.37 -0.37 48000000 <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>T. Income Taxes </B></FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The components of income from continuing operations before taxes on income were as follows: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="73%"></TD> <TD vAlign=bottom width="6%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="6%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2006</B></FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>U.S.</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(999</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,960</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>404</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Foreign</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,791</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,842</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,111</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>792</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>4,802</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,515</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The provision (benefit) for taxes on income from continuing operations before minority interests’ share consisted of the following: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="75%"></TD> <TD vAlign=bottom width="7%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2006</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Current:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Federal*</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>516</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>56</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Foreign</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>598</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>774</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>913</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>State and local</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>22</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(44</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>603</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,312</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>925</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD height=8></TD> <TD colSpan=4 height=8></TD> <TD colSpan=4 height=8></TD> <TD colSpan=4 height=8></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Deferred:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Federal*</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(184</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>231</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(128</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Foreign</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(77</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>87</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(21</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>State and local</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(7</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>77</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(261</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>311</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(72</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Total</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>342</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,623</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>853</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0> <TBODY> <TR> <TD vAlign=top align=left width="1%"><FONT face="Times New Roman" size=2>*</FONT></TD> <TD vAlign=top align=left><FONT face="Times New Roman" size=2>Includes U.S. taxes related to foreign income </FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Included in discontinued operations is a tax benefit of $121 in 2008 and $83 in 2007 and a tax expense of $44 in 2006. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The exercise of employee stock options generated a tax benefit of $20 in 2008, $95 in 2007, and $17 in 2006. This amount was credited to additional capital and reduced current taxes payable. </FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>A reconciliation of the U.S. federal statutory rate to Alcoa’s effective tax rate for continuing operations is as follows: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="78%"></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle><FONT face="Times New Roman" size=2><B>2006</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>U.S. federal statutory rate</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>35.0</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>35.0</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>35.0</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Taxes on foreign income</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(10.1</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(4.3</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(7.5</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Permanent differences on restructuring charges and asset disposals</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>11.8</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3.4</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.5</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Audit and other adjustments to prior years’ accruals</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(2.8</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(0.1</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(3.3</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)*</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Minority interests</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>5.0</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.4</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.4</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Statutory tax rate changes</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3.5</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.2</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.1</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Other</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.8</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(0.8</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(0.9</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Effective tax rate</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>43.2</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>33.8</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>24.3</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0> <TBODY> <TR> <TD vAlign=top align=left width="1%"><FONT face="Times New Roman" size=2>*</FONT></TD> <TD vAlign=top align=left><FONT face="Times New Roman" size=2>This figure includes the finalization of certain tax reviews and audits, decreasing the effective tax rate by approximately 1.7% in 2006. </FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The components of net deferred tax assets and liabilities are as follows: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="54%"></TD> <TD vAlign=bottom width="7%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="7%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="9%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="7%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=6><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=6><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2><B>December&nbsp;31,</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align=center><FONT face="Times New Roman" size=2><B>Deferred</B></FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align=center><FONT face="Times New Roman" size=2><B>tax</B></FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 1px" align=center><FONT face="Times New Roman" size=2><B>assets</B></FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align=center><FONT face="Times New Roman" size=2><B>Deferred</B></FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align=center><FONT face="Times New Roman" size=2><B>tax</B></FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 1px" align=center><FONT face="Times New Roman" size=2><B>liabilities</B></FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align=center><FONT face="Times New Roman" size=2><B>Deferred</B></FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align=center><FONT face="Times New Roman" size=2><B>tax</B></FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 1px" align=center><FONT face="Times New Roman" size=2><B>assets</B></FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align=center><FONT face="Times New Roman" size=2><B>Deferred</B></FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align=center><FONT face="Times New Roman" size=2><B>tax</B></FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 1px" align=center><FONT face="Times New Roman" size=2><B>liabilities</B></FONT></P></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Depreciation</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,188</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,394</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Employee benefits</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,313</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,548</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Loss provisions</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>475</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>17</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>257</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Deferred income/expense</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>18</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>113</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>32</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>103</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Tax loss carryforwards</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,017</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>691</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Tax credit carryforwards</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>320</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>335</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Derivatives and hedging activities</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>394</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>212</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Other</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>234</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>224</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>217</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>127</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>4,771</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,542</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,292</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,624</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Valuation allowance</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(713</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(517</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>4,058</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,542</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,775</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,624</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Of the total deferred tax assets associated with the tax loss carryforwards, $283 expires over the next 10 years (of which $196 has been reserved for through the valuation allowance), $379 over the next 20 years, and $355 is unlimited. Generally, the valuation allowance relates to loss carryforwards because the ability to generate sufficient future income in some jurisdictions is uncertain. Of the tax credit carryforwards, $279 expires over the next 10 years (most of this amount relates to foreign tax credits that do not begin to expire until 2015), with the balance expiring over the next 15 to 20 years. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The cumulative amount of Alcoa’s foreign undistributed net earnings for which no deferred taxes have been provided was $8,664 at December&nbsp;31, 2008. Management has no plans to distribute such earnings in the foreseeable future. It is not practical to determine the deferred tax liability on these earnings. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Alcoa and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. With a few minor exceptions, Alcoa is no longer subject to income tax examinations by tax authorities for years prior to 2002. All U.S. tax years prior to 2008 have been audited by the Internal Revenue Service. Various state and foreign jurisdiction tax authorities are in the process of examining Alcoa’s income tax returns for various tax years through 2007. </FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>As described in Note A, Alcoa adopted FIN 48 and FSP FIN 48-1 effective January&nbsp;1, 2007. The adoption of FIN 48 and FSP FIN 48-1 did not have an impact on the accompanying Consolidated Financial Statements. A reconciliation of the beginning and ending amount of unrecognized tax benefits (excluding interest and penalties) is as follows: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="85%"></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="6%"></TD> <TD></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2><B>December&nbsp;31,</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Balance at beginning of year</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>33</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>22</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Additions based on tax positions related to the current year</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Additions for tax positions of prior years</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>11</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>14</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Reductions for tax positions of prior years</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(10</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(7</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Settlements</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(7</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Foreign currency translation</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(3</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Balance at end of year</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>24</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>33</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>As of December&nbsp;31, 2008 and 2007, a portion of the $24 and $33 balance, respectively, pertains to state tax liabilities, which are stated before any offset for federal tax benefits. The effect of unrecognized tax benefits, if recorded, that would impact the 2008 and 2007 annual effective tax rate is approximately 2% and less than 1%, respectively, of pretax book income. Alcoa does not anticipate that changes in its unrecognized tax benefits will have a material impact on the Statement of Consolidated Operations during 2009. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>It is Alcoa’s policy to recognize interest and penalties related to income taxes as a component of the Provision for income taxes on the accompanying Statement of Consolidated Operations. In 2008 and 2007, Alcoa recognized $1 and $2, respectively, in interest and penalties. As of December&nbsp;31, 2008 and 2007, the amount accrued for the payment of interest and penalties was $9. </FONT></P> 342000000 21000000 -288000000 353000000 -135000000 0 97000000 -150000000 407000000 <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>G. Inventories </B></FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="82%"></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2><B>December&nbsp;31,</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Finished goods</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>747</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>792</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Work in process</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>960</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,005</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Bauxite and alumina</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>724</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>652</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Purchased raw materials</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>575</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>410</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Operating supplies</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>232</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>225</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,238</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,084</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>At December&nbsp;31, 2008 and 2007, 39% and 43% of total inventories, respectively, were valued on a LIFO basis. If valued on an average-cost basis, total inventories would have been $1,078 and $1,069 higher at December&nbsp;31, 2008 and 2007, respectively. During 2008 and 2007, LIFO inventory quantities were reduced, which resulted in a partial liquidation of the LIFO base. The impact of this liquidation increased net income by $25 in 2008 and $20 in 2007. </FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>M. Minority Interests </B></FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The following table summarizes the minority shareholders’ interests in the equity of Alcoa’s majority-owned consolidated subsidiaries: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="82%"></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2><B>December&nbsp;31,</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Alcoa of Australia</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>957</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,189</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Alcoa World Alumina LLC</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,450</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>965</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Norsk Anodes ANS</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>162</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>206</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Other</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>28</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>100</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,597</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,460</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In 2008, Alcoa received $643 in contributions from the minority shareholder of Alcoa World Alumina LLC. During 2007, Alcoa received $474 in contributions from minority shareholders related to Alcoa World Alumina LLC and other interests in Norway, Russia, and China. </FONT></P> 221000000 1478000000 -2410000000 1234000000 1101000000 -74000000 59000000 <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>A. Summary of Significant Accounting Policies </B></FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Basis of Presentation.</B> The Consolidated Financial Statements of Alcoa Inc. and its subsidiaries (“Alcoa” or the “Company”) are prepared in conformity with accounting principles generally accepted in the United States of America and require management to make certain estimates and assumptions. These may affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements. They also may affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates upon subsequent resolution of identified matters. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Principles of Consolidation.</B> The Consolidated Financial Statements include the accounts of Alcoa and companies in which Alcoa has a controlling interest. Intercompany transactions have been eliminated. The equity method of accounting is used for investments in affiliates and other joint ventures over which Alcoa has significant influence but does not have effective control. Investments in affiliates in which Alcoa cannot exercise significant influence are accounted for on the cost method. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Alcoa also evaluates consolidation of entities under Financial Accounting Standards Board (FASB) Interpretation No.&nbsp;46, “Consolidation of Variable Interest Entities” (FIN 46). FIN 46 requires management to evaluate whether an entity or interest is a variable interest entity and whether Alcoa is the primary beneficiary. Consolidation is required if both of these criteria are met. Alcoa does not have any variable interest entities requiring consolidation. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Cash Equivalents.</B> Cash equivalents are highly liquid investments purchased with an original maturity of three months or less. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Inventory Valuation.</B> Inventories are carried at the lower of cost or market, with cost for a substantial portion of U.S. and Canadian inventories determined under the last-in, first-out (LIFO) method. The cost of other inventories is principally determined under the average-cost method. See Note G for additional information. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Properties, Plants, and Equipment. </B>Properties, plants, and equipment are recorded at cost. Depreciation is recorded principally on the straight-line method at rates based on the estimated useful lives of the assets. For greenfield smelters, the units of production method is used to record depreciation. The following table details the weighted-average useful lives of structures and machinery and equipment by reporting segment (numbers in years): </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="64%"></TD> <TD vAlign=bottom width="16%"></TD> <TD></TD> <TD vAlign=bottom width="16%"></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2><B>Segment</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle><FONT face="Times New Roman" size=2><B>Structures</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle><FONT face="Times New Roman" size=2><B>Machinery&nbsp;and&nbsp;equipment</B></FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Alumina</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>33</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>26</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Primary Metals</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>35</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>21</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Flat-Rolled Products</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>31</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>20</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Engineered Products and Solutions</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>28</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>16</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Gains or losses from the sale of assets are generally recorded in other income (see policy that follows for assets classified as held for sale and discontinued operations). Repairs and maintenance are charged to expense as incurred. Interest related to the construction of qualifying assets is capitalized as part of the construction costs. Depletion related to mineral reserves is recorded using the units of production method. See Notes H and V for additional information. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>During 2008, Alcoa completed a review of the estimated useful lives of its alumina refining and aluminum smelting facilities. Such a review was performed because considerable engineering data and other information (readily available due to the recent construction of the Iceland smelter as well as various expansions and other growth projects in-process or completed over the past two years) indicated that the useful lives of many of the assets in these businesses were no longer appropriate. As a result of this review, for the majority of its refining and smelting locations, Alcoa extended the useful lives of structures to an average of 26 and 32 years (previously 23 and 29 years), respectively, and machinery and equipment to an average of 27 and 20 years (previously 17 and 19 years), respectively. </FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Also during 2008, Alcoa completed a review of the estimated useful lives of its flat-rolled products and engineered products and solutions facilities. As a result of this review, for a portion of its flat-rolled products locations, Alcoa extended the useful lives of structures to an average of 33 years (previously 29 years) and machinery and equipment to an average of 18 years (previously 16 years). No change was made to the useful lives related to the engineered products and solutions locations as the study determined that the average useful lives of structures (26 years) and machinery and equipment (17 years) were appropriate. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The extension of depreciable lives qualifies as a change in accounting estimate and was made on a prospective basis effective January&nbsp;1, 2008 for the alumina refining and aluminum smelting facilities and July&nbsp;1, 2008 for the flat-rolled products facilities. In 2008, Depreciation, depletion, and amortization expense was $35 (after-tax and minority interests) less than it would have been had the depreciable lives not been extended. The effect of this change on both basic and diluted earnings per share was $0.04. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Properties, plants, and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets (asset group) may not be recoverable. Recoverability of assets is determined by comparing the estimated undiscounted net cash flows of the operations related to the assets (asset group) to their carrying amount. An impairment loss would be recognized when the carrying amount of the assets (asset group) exceeds the estimated undiscounted net cash flows. The amount of the impairment loss to be recorded is calculated as the excess of the carrying value of the assets (asset group) over their fair value, with fair value determined using the best information available, which generally is a discounted cash flow model (DCF model). </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Goodwill and Other Intangible Assets.</B> Goodwill and intangible assets with indefinite useful lives are not amortized. Intangible assets with finite useful lives are amortized generally on a straight-line basis over the periods benefited. The following table details the weighted-average useful lives of software and other intangible assets by reporting segment (numbers in years): </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="70%"></TD> <TD vAlign=bottom width="13%"></TD> <TD></TD> <TD vAlign=bottom width="13%"></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2><B>Segment</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle><FONT face="Times New Roman" size=2><B>Software</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle><FONT face="Times New Roman" size=2><B>Other&nbsp;intangible&nbsp;assets</B></FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Alumina</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>10</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Primary Metals</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>10</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>37</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Flat-Rolled Products</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>10</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>9</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Engineered Products and Solutions</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>10</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>35</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Goodwill is not amortized; instead, it is tested for impairment annually (in the fourth quarter) or more frequently if indicators of impairment exist or if a decision is made to sell a business. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include a decline in expected cash flows, a significant adverse change in legal factors or in the business climate, unanticipated competition, or slower growth rates, among others. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Goodwill is allocated among and evaluated for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment. Alcoa has 10 reporting units, of which three are included in the Flat-Rolled Products segment and five are included in the Engineered Products and Solutions segment. The remaining two reporting units are the Alumina and Primary Metals segments. Almost 90% of Alcoa’s total goodwill is allocated to three reporting units as follows: Alcoa Fastening Systems (AFS) ($1,014) and Alcoa Power and Propulsion (APP) ($1,601) businesses, both of which are included in the Engineered Products and Solutions segment, and Primary Metals ($1,767). These amounts include an allocation of Corporate goodwill. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The evaluation of impairment involves comparing the current fair value of each reporting unit to its carrying value, including goodwill. Alcoa uses a discounted cash flow model (DCF model) to estimate the current fair value of its reporting units when testing for impairment. A number of significant assumptions and estimates are involved in the application of the DCF model to forecast operating cash flows, including markets and market share, sales volumes and prices, costs to produce, tax rates, capital spending, discount rate, and working capital changes. Most of these assumptions vary significantly among the reporting units. Cash flow forecasts are generally based on approved </FONT><FONT face="Times New Roman" size=2>business unit operating plans for the early years’ cash flows and historical relationships in later years. The betas used in calculating the individual reporting units’ wei ghted average cost of capital (WACC) rate are estimated for each business with the assistance of valuation experts. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In 2008, the estimated fair value of nine of the ten reporting units, including AFS and APP, were well in excess of the carrying value of these businesses resulting in no impairment. For Primary Metals, while the estimated fair value of this business exceeded its carrying value, the excess was significantly impacted due to the historic drop in the LME price that occurred in the second half of 2008. Management performed an updated goodwill impairment test for Primary Metals in late December 2008, which again resulted in no impairment (the tests for the other nine reporting units were also updated). </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Historically, LME pricing levels and the corresponding input costs (e.g., raw materials, energy) have generally trended in the same manner, resulting in relatively consistent cash margins over time. As a result, the estimated fair value of Primary Metals traditionally has been well in excess of its carrying value. However, during the second half of 2008, the LME price decreased at an unprecedented rate, significantly outpacing any decreases in associated input costs. As a result of this near-term disruption in the historical relationship between LME and input costs, the expected cash margins in the early years in the DCF model were lower than normal and lower than long-term expectations. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In the event the estimated fair value of a reporting unit per the DCF model is less than the carrying value, additional analysis would be required. The additional analysis would compare the carrying amount of the reporting unit’s goodwill with the implied fair value of that goodwill, which may involve the use of valuation experts. The implied fair value of goodwill is the excess of the fair value of the reporting unit over the fair value amounts assigned to all of the assets and liabilities of that unit as if the reporting unit was acquired in a business combination and the fair value of the reporting unit represented the purchase price. If the carrying value of goodwill exceeds its implied fair value, an impairment loss equal to such excess would be recognized, which could significantly and adversely impact reported results of operations and stockholders’ equity. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>With Alcoa’s common stock price at extraordinary lows late in 2008, management analyzed the valuations derived from the DCF models in relation to Alcoa’s market capitalization. In management’s judgment, a significant portion of the recent decline in Alcoa’s stock price is related to the current unprecedented liquidity crisis in the overall economy and is not reflective of the underlying cash flows of the reporting units. As a result, management believes the Company’s forecasted cash flows constitute a better indicator of the current fair value of Alcoa’s reporting units than the current pricing of its common shares. The sum of the individual estimated fair values of Alcoa’s reporting units per the DCF models is greater than the market value of Alcoa’s common stock. However, fair values that could be realized in an actual transaction may differ from those used to evaluate the impairment of goodwill. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Revenue Recognition.</B> Alcoa recognizes revenue when title, ownership, and risk of loss pass to the customer, all of which occurs upon shipment or delivery of the product and is based on the applicable shipping terms. The shipping terms vary across all businesses and depend on the product, the country of origin, and the type of transportation (truck, train, or vessel). </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Alcoa periodically enters into long-term supply contracts with alumina and aluminum customers and receives advance payments for product to be delivered in future periods. These advance payments are recorded as deferred revenue, and revenue is recognized as shipments are made and title, ownership, and risk of loss pass to the customer during the term of the contracts. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Environmental Expenditures.</B> Expenditures for current operations are expensed or capitalized, as appropriate. Expenditures relating to existing conditions caused by past operations, and which do not contribute to future revenues, are expensed. Liabilities are recorded when remediation efforts are probable and the costs can be reasonably estimated. The liability may include costs such as site investigations, consultant fees, feasibility studies, outside contractors, and monitoring expenses. Estimates are generally not discounted or reduced by potential claims for recovery. Claims for recovery are recognized as agreements are reached with third parties. The estimates also include costs related to other </FONT><FONT face="Times New Roman" size=2>potentially responsible parties to the extent that Alcoa has reason to believe such parties will not fully pay their proportionate share. The li ability 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. See Note N for additional information. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Asset Retirement Obligations.</B> Alcoa recognizes asset retirement obligations (AROs) related to legal obligations associated with the normal operation of Alcoa’s bauxite mining, alumina refining, and aluminum smelting facilities. These AROs consist primarily of costs associated with spent pot lining disposal, closure of bauxite residue areas, mine reclamation, and landfill closure. Alcoa also recognizes AROs for any significant lease restoration obligation, if required by a lease agreement, and for the disposal of regulated waste materials related to the demolition of certain power facilities. The fair values of these AROs are recorded on a discounted basis, at the time the obligation is incurred, and accreted over time for the change in present value. Additionally, Alcoa capitalizes asset retirement costs by increasing the carrying amount of the related long-lived assets and depreciating t hese assets over their remaining useful life. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Certain conditional asset retirement obligations (CAROs) related to alumina refineries, aluminum smelters, and fabrication facilities have not been recorded in the Consolidated Financial Statements due to uncertainties surrounding the ultimate settlement date. A CARO is a legal obligation to perform an asset retirement activity in which the timing and (or) method of settlement are conditional on a future event that may or may not be within Alcoa’s control. Such uncertainties exist as a result of the perpetual nature of the structures, maintenance and upgrade programs, and other factors. At the date a reasonable estimate of the ultimate settlement date can be made, Alcoa would record a retirement obligation for the removal, treatment, transportation, storage, and (or) disposal of various regulated assets and hazardous materials such as asbestos, underground and aboveground storage tanks, polychlorinated biph enyls (PCBs), various process residuals, solid wastes, electronic equipment waste, and various other materials. Such amounts may be material to the Consolidated Financial Statements in the period in which they are recorded. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Income Taxes. </B>The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, the provision for income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid, and result from differences between the financial and tax bases of Alcoa’s assets and liabilities and are adjusted for changes in tax rates and tax laws when enacted. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. Deferred tax assets for which no valuation allowance is recorded may not be realized upon changes in facts and circumstances. Tax benefits related to uncerta in tax positions taken or expected to be taken on a tax return are recorded when such benefits meet a more likely than not threshold. Otherwise, these tax benefits are recorded when a tax position has been effectively settled, which means that the appropriate taxing authority has completed their examination even though the statute of limitations remains open, or the statute of limitation expires. Interest and penalties related to uncertain tax positions are recognized as part of the provision for income taxes and are accrued beginning in the period that such interest and penalties would be applicable under relevant tax law until such time that the related tax benefits are recognized. Alcoa also has unamortized tax-deductible goodwill of $397 resulting from intercompany stock sales and reorganizations (generally at a 30% to 34% rate). Alcoa recognizes the tax benefits associated with this tax-deductible goodwill as it is being amortized for local income tax purposes rather than in the period in which the tran saction is consummated. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Stock-Based Compensation.</B> Alcoa recognizes compensation expense for employee equity grants using the non-substantive vesting period approach, in which the expense (net of estimated forfeitures) is recognized ratably over the requisite service period based on the grant date fair value. The fair value of each new stock option is estimated on the date of grant using a lattice-pricing model. Determining the fair value of stock options at the grant date requires judgment, including estimates for the average risk-free interest rate, dividend yield, volatility, annual forfeiture rate, and exercise behavior. If any of these assumptions differ significantly from actual, stock-based compensation expense could be impacted. </FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>As part of Alcoa’s stock-based compensation plan design, individuals who are retirement-eligible have a six-month requisite service period in the year of grant. Equity grants are issued in January each year. As a result, a larger portion of expense will be recognized in the first and second quarters of each year for these retirement-eligible employees. Compensation expense recorded in 2008, 2007, and 2006 was $94 ($63 after-tax), $97 ($63 after-tax), and $72 ($48 after-tax), respectively. Of this amount, $19, $19, and $20 in 2008, 2007, and 2006, respectively, pertains to the acceleration of expense related to retirement-eligible employees. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>On December&nbsp;31, 2005, Alcoa accelerated the vesting of 11&nbsp;million unvested stock options granted to employees in 2004 and on January&nbsp;13, 2005. The 2004 and 2005 accelerated options had weighted average exercise prices of $35.60 and $29.54, respectively, and in the aggregate represented approximately 12% of Alcoa’s total outstanding options. The decision to accelerate the vesting of the 2004 and 2005 options was made primarily to avoid recognizing the related compensation expense in future Consolidated Financial Statements upon the adoption of a new accounting standard. The accelerated vesting of the 2004 and 2005 stock options reduced Alcoa’s after-tax stock option compensation expense in 2007 and 2006 by $7 and $21, respectively. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Beginning in 2006, plan participants can choose whether to receive their award in the form of stock options, stock awards, or a combination of both. This choice is made before the grant is issued and is irrevocable. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Derivatives and Hedging.</B> Derivatives are held as part of a formally documented risk management program. The derivatives are straightforward and are held for purposes other than trading. For derivatives designated as fair value hedges, Alcoa measures hedge effectiveness by formally assessing, at least quarterly, the historical high correlation of changes in the fair value of the hedged item and the derivative hedging instrument. For derivatives designated as cash flow hedges, Alcoa measures hedge effectiveness by formally assessing, at least quarterly, the probable high correlation of the expected future cash flows of the hedged item and the derivative hedging instrument. The ineffective portions of both types of hedges are recorded in revenues or other income or expense in the current period. A gain of $2 was recorded in 2008 (gains of $4 and $10 in 2007 and 2006, respectively) for the ineffecti ve portion of aluminum hedges. If the hedging relationship ceases to be highly effective or it becomes probable that an expected transaction will no longer occur, future gains or losses on the derivative are recorded in other income or expense. No significant hedging transactions ceased to qualify as hedges in 2008, 2007 or 2006. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Alcoa accounts for interest rate swaps related to its existing long-term debt and hedges of firm customer commitments for aluminum as fair value hedges. As a result, the fair values of the derivatives and changes in the fair values of the underlying hedged items are reported in other current and noncurrent assets and liabilities in the Consolidated Balance Sheet. Changes in the fair values of these derivatives and underlying hedged items generally offset and are recorded each period in sales or interest expense, consistent with the underlying hedged item. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Alcoa accounts for hedges of foreign currency exposures and certain forecasted transactions as cash flow hedges. The fair values of the derivatives are recorded in other current and noncurrent assets and liabilities in the Consolidated Balance Sheet. The effective portions of the changes in the fair values of these derivatives are recorded in other comprehensive loss (losses of $125 and $565 at December&nbsp;31, 2008 and 2007, respectively) and are reclassified to sales, cost of goods sold, or other income in the period in which earnings are impacted by the hedged items or in the period that the transaction no longer qualifies as a cash flow hedge. These contracts cover the same periods as known or expected exposures, generally not exceeding five years. Assuming market rates remain constant with the rates at December&nbsp;31, 2008, a gain of $45 is expected to be recognized in earnings over the next 12 mon ths. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>If no hedging relationship is designated, the derivative is marked to market through earnings. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Cash flows from financial instruments are recognized in the Statement of Consolidated Cash Flows in a manner consistent with the underlying transactions. See Notes K and X for additional information. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Foreign Currency.</B> The local currency is the functional currency for Alcoa’s significant operations outside the U.S., except certain operations in Canada, Brazil, Russia and Iceland, where the U.S. dollar is used as the functional currency. The determination of the functional currency for Alcoa’s operations is made based on the appropriate economic and management indicators. </FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B></B></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Acquisitions.</B> Alcoa’s acquisitions are accounted for using the purchase method. The purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair values. Any excess purchase price over the fair value of the net assets acquired is recorded as goodwill. For all acquisitions, operating results are included in the Statement of Consolidated Operations since the dates of the acquisitions. See Note F for additional information. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Discontinued Operations and Assets Held For Sale. </B>For those businesses where management has committed to a plan to divest, each business is valued at the lower of its carrying amount or estimated fair value less cost to sell. If the carrying amount of the business exceeds its estimated fair value, an impairment loss is recognized. The fair values are estimated using accepted valuation techniques such as a DCF model, valuations performed by third parties, earnings multiples, or indicative bids, when available. A number of significant estimates and assumptions are involved in the application of these techniques, including the forecasting of markets and market share, sales volumes and prices, costs and expenses, and multiple other factors. Management considers historical experience and all available information at the time the estimates are made; however, the fair values that are ultimately realize d upon the sale of the businesses to be divested may differ from the estimated fair values reflected in the Consolidated Financial Statements. Depreciation is no longer recorded on assets of businesses to be divested once they are classified as held for sale. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Businesses to be divested are classified in the Consolidated Financial Statements as either discontinued operations or assets held for sale. For businesses classified as discontinued operations, the balance sheet amounts and income statement results are reclassified from their historical presentation to assets and liabilities of operations held for sale on the Consolidated Balance Sheet and to discontinued operations in the Statement of Consolidated Operations, respectively, for all periods presented. The gains or losses associated with these divested businesses are recorded in income (loss) from discontinued operations in the Statement of Consolidated Operations. The Statement of Consolidated Cash Flows is also reclassified for assets held for sale and discontinued operations for all periods presented. Additionally, segment information does not include the operating results of businesses classified as discontinue d operations. Management does not expect any continuing involvement with these businesses following the sales, and these businesses are expected to be disposed of within one year. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>For businesses classified as assets held for sale that do not qualify for discontinued operations treatment, the balance sheet and cash flow amounts are reclassified from their historical presentation to assets and liabilities of operations held for sale. The income statement results continue to be reported in the historical income statement categories as income from continuing operations. The gains or losses associated with these divested businesses are recorded in restructuring and other charges in the Statement of Consolidated Operations. The segment information includes the operating results of businesses classified as assets held for sale for all periods presented. Management expects that Alcoa will have continuing involvement with these businesses following the sale, primarily in the form of equity participation, or ongoing aluminum or other significant supply contracts. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Recently Adopted Accounting Standards.</B> On January&nbsp;1, 2008, Alcoa adopted Statement of Financial Accounting Standards (SFAS) No.&nbsp;159, “The Fair Value Option for Financial Assets and Financial Liabilities – including an amendment of FASB Statement No.&nbsp;115,” (SFAS 159). SFAS 159 permits entities to choose to measure many financial instruments and certain other assets and liabilities at fair value on an instrument-by-instrument basis (the fair value option) with changes in fair value reported in earnings. Alcoa already records marketable securities at fair value in accordance with SFAS No.&nbsp;115, “Accounting for Certain Investments in Debt and Equity Securities,” and derivative contracts and hedging activities at fair value in accordance with SFAS No.&nbsp;133, “Accounting for Derivative Instruments and Hedging Activitie s,” as amended (SFAS 133). The adoption of SFAS 159 had no impact on the Consolidated Financial Statements as management did not elect the fair value option for any other financial instruments or certain other assets and liabilities. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>On January&nbsp;1, 2008, Alcoa adopted SFAS No.&nbsp;157, “Fair Value Measurements,” (SFAS 157) as it relates to financial assets and financial liabilities. In February 2008, the FASB issued FASB Staff Position (FSP) No. FAS 157-2, “Effective Date of FASB Statement No.&nbsp;157,” which delayed the effective date of SFAS 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on at least an annual basis, until January&nbsp;1, 2009 for calendar year-end entities. Also in February 2008, the FASB issued FSP </FONT><FONT face="Times New Roman" size=2>No. FAS 157-1, “Application of FASB Statement No.&nbsp;157 to FASB Statement No.&nbsp;13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurem ent under Statement 13,” which states that SFAS No.&nbsp;13, “Accounting for Leases,” (SFAS 13) and other accounting pronouncements that address fair value measurements for purposes of lease classification or measurement under SFAS 13 are excluded from the provisions of SFAS 157, except for assets and liabilities related to leases assumed in a business combination that are required to be measured at fair value under SFAS No.&nbsp;141, “Business Combinations,” (SFAS 141) or SFAS No.&nbsp;141 (revised 2007), “Business Combinations,” (SFAS 141(R)). </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>SFAS 157 defines fair value, establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (GAAP), and expands disclosures about fair value measurements. The provisions of this standard apply to other accounting pronouncements that require or permit fair value measurements and are to be applied prospectively with limited exceptions. The adoption of SFAS 157, as it relates to financial assets, had no impact on the Consolidated Financial Statements. Management has determined that the adoption of SFAS 157, as it relates to nonfinancial assets and nonfinancial liabilities, will not have an impact on the Consolidated Financial Statements. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>SFAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This standard is now the single source in GAAP for the definition of fair value, except for the fair value of leased property as defined in SFAS 13. SFAS 157 establishes a fair value hierarchy that distinguishes between (1)&nbsp;market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2)&nbsp;an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priori ty to unobservable inputs (Level 3). The three levels of the fair value hierarchy under SFAS 157 are described below: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0> <TBODY> <TR> <TD width="5%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left width="2%"><FONT face="Times New Roman" size=2>•</FONT></TD> <TD vAlign=top width="1%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left> <P align=left><FONT face="Times New Roman" size=2>Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. </FONT></P></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0> <TBODY> <TR> <TD width="5%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left width="2%"><FONT face="Times New Roman" size=2>•</FONT></TD> <TD vAlign=top width="1%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left> <P align=left><FONT face="Times New Roman" size=2>Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. </FONT></P></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0> <TBODY> <TR> <TD width="5%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left width="2%"><FONT face="Times New Roman" size=2>•</FONT></TD> <TD vAlign=top width="1%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left> <P align=left><FONT face="Times New Roman" size=2>Level 3 – Inputs that are both significant to the fair value measurement and unobservable. </FONT></P></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The following sections describe the valuation methodologies used by Alcoa to measure different financial instruments at fair value, including an indication of the level in the fair value hierarchy in which each instrument is generally classified. Where appropriate the description includes details of the valuation models, the key inputs to those models, and any significant assumptions. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Available-for-sale securities.</B> Alcoa uses quoted market prices to determine the fair value of available-for-sale securities. These financial instruments consist of exchange-traded fixed income and equity securities, and are classified in Level 1 of the fair value hierarchy. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Derivative contracts.</B> Derivative contracts are valued using quoted market prices and significant other observable and unobservable inputs. Such financial instruments consist of aluminum, interest rate, commodity (principally energy-related), and foreign currency contracts. The fair values for the majority of these derivative contracts are based upon current quoted market prices. These financial instruments are typically exchange-traded and are generally classified within Level 1 or Level 2 of the fair value hierarchy depending on whether the exchange is deemed to be an active market or not. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>For certain derivative contracts whose fair values are based upon trades in liquid markets, such as aluminum options, valuation model inputs can generally be verified and valuation techniques do not involve significant management judgment. The fair values of such financial instruments are generally classified within Level 2 of the fair value hierarchy. </FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Alcoa has other derivative contracts that do not have observable market quotes. For these financial instruments, management uses significant other observable inputs (i.e., information concerning time premiums and volatilities for certain option type embedded derivatives and regional premiums for swaps). For periods beyond the term of quoted market prices for aluminum, Alcoa uses a macroeconomic model that estimates the long-term price of aluminum based on anticipated changes in worldwide supply and demand. Where appropriate, valuations are adjusted for various factors such as liquidity, bid/offer spreads, and credit considerations. Such adjustments are generally based on available market evidence (Level 2). In the absence of such evidence, management’s best estimate is used (Level 3). </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The following table presents Alcoa’s assets and liabilities that are measured and recognized at fair value on a recurring basis classified under the appropriate level of the fair value hierarchy as of December&nbsp;31, 2008: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="54%"></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="7%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="7%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="7%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Level&nbsp;1</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Level&nbsp;2</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Level&nbsp;3</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Collateral*</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Total</B></FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Assets:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Available-for-sale securities</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>27</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>27</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Derivative contracts</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>79</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>160</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(67</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>172</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Total assets</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>106</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>160</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(67</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>199</FONT></TD></TR> <TR> <TD style="BORDER-TOP: #000000 1px solid" height=8>&nbsp;</TD> <TD style="BORDER-TOP: #000000 1px solid" colSpan=3 height=8>&nbsp;</TD> <TD style="BORDER-TOP: #000000 1px solid" colSpan=3 height=8>&nbsp;</TD> <TD style="BORDER-TOP: #000000 1px solid" colSpan=3 height=8>&nbsp;</TD> <TD style="BORDER-TOP: #000000 1px solid" colSpan=4 height=8>&nbsp;</TD> <TD style="BORDER-TOP: #000000 1px solid" colSpan=3 height=8>&nbsp;</TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Liabilities:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Derivative contracts</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>569</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>30</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>341</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(119</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>821</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0> <TBODY> <TR> <TD vAlign=top align=left width="1%"><FONT face="Times New Roman" size=2>*</FONT></TD> <TD vAlign=top align=left><FONT face="Times New Roman" size=2>These amounts represent cash collateral paid ($119) and held ($67) that Alcoa elected to net against the fair value amounts recognized for certain derivative instruments executed with the same counterparties under master netting arrangements. This election was made under the provisions of FSP FIN 39-1, which was adopted by Alcoa on January&nbsp;1, 2008 (see below). The collateral paid of $119 relates to derivative contracts for aluminum included in Level 1 and the collateral held of $67 relates to derivative contracts for interest rates included in Level 2. </FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Financial instruments classified as Level 3 in the fair value hierarchy represent derivative contracts in which management has used at least one significant unobservable input in the valuation model. The following table presents a reconciliation of activity for such derivative contracts on a net basis: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="82%"></TD> <TD vAlign=bottom width="16%"></TD> <TD></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Year ended<BR>December&nbsp;31,&nbsp;2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Balance at beginning of period</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>408</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Total realized/unrealized (losses) or gains included in:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Sales</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(54</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Cost of goods sold</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Other comprehensive loss</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(35</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Purchases, sales, issuances, and settlements</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>19</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Transfers in and (or) out of Level 3</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Balance at end of period</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>341</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD height=8></TD> <TD colSpan=4 height=8></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Total (losses) or gains included in earnings attributable to the change in unrealized gains or losses relating to derivative contracts still held at December&nbsp;31, 2008:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Sales</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(54</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Cost of goods sold</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>3</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>As reflected in the table above, the net unrealized loss on derivative contracts using Level 3 valuation techniques was $341 as of December&nbsp;31, 2008. This loss is mainly attributed to embedded derivatives in a power contract that index the price of power to the LME price of aluminum. These embedded derivatives are primarily valued using observable market prices. However, due to the length of the contract, the valuation model also requires management to estimate the long-term price of aluminum based upon anticipated changes in worldwide supply and demand. The embedded derivatives have been designated as hedges of forward sales of aluminum and their realized gains and losses are included in Sales on the accompanying Statement of Consolidated Operations. Also, included within Level 3 </FONT><FONT face="Times New Roman" size=2>measurements are derivative financial instruments that hedge the cost o f electricity. Transactions involving on-peak power are observable as there is an active market. However, due to Alcoa’s power consumption, there are certain off-peak times when there is not an actively traded market for electricity. Therefore, management utilizes various forecast services, historical relationships, and near term market actual pricing to determine the fair value. Gains and losses realized for the electricity contracts are included in Cost of goods sold on the accompanying Statement of Consolidated Operations. Additionally, an embedded derivative in a power contract that indexes the difference between the long-term debt ratings of Alcoa and the counterparty from any of the three major credit rating agencies is included in Level 3. Management uses forecast services, historical relationships, and market prices to determine fair value. None of the Level 3 positions on hand at December&nbsp;31, 2008 resulted in any unrealized gains in the accompanying Statement of Consolidated Operatio ns. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Effective September&nbsp;30, 2008, Alcoa adopted FSP No. FAS 157-3, “Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active” (FSP FAS 157-3), which was issued on October&nbsp;10, 2008. FSP FAS 157-3 clarifies the application of SFAS 157 in a market that is not active and provides an example to illustrate key considerations in determining the fair value of a financial asset when the market for that financial asset is not active. The adoption of FSP FAS 157-3 had no impact on the Consolidated Financial Statements. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>On January&nbsp;1, 2008, Alcoa adopted FSP No. FIN 39-1, “Amendment of FASB Interpretation No.&nbsp;39,” (FSP FIN 39-1). FSP FIN 39-1 amends FIN No.&nbsp;39, “Offsetting of Amounts Related to Certain Contracts,” by permitting entities that enter into master netting arrangements as part of their derivative transactions to offset in their financial statements net derivative positions against the fair value of amounts (or amounts that approximate fair value) recognized for the right to reclaim cash collateral or the obligation to return cash collateral under those arrangements. As a result, management elected to net cash collateral against fair value amounts recognized for derivative instruments executed with the same counterparty when a master netting arrangement exists. The provisions of FSP FIN 39-1 are to be applied retroactively for all financial statement periods presente d. As of December&nbsp;31, 2008, the obligation to return cash collateral in the amount of $67 was netted against the fair value of derivative contracts, of which $4 is included in Prepaid expenses and other current assets and $63 is included in Other assets on the accompanying Consolidated Balance Sheet, and the right to receive cash collateral in the amount of $119 was netted against the fair value of derivative contracts included in Other current liabilities on the accompanying Consolidated Balance Sheet. The adoption of FSP FIN 39-1 did not impact the Consolidated Balance Sheet as of December&nbsp;31, 2007 as no cash collateral was held or posted. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>On January&nbsp;1, 2008, Alcoa adopted Emerging Issues Task Force (EITF) Issue No.&nbsp;06-10, “Accounting for Collateral Assignment Split-Dollar Life Insurance Arrangements,” (EITF 06-10). Under the provisions of EITF 06-10, an employer is required to recognize a liability for the postretirement benefit related to a collateral assignment split-dollar life insurance arrangement in accordance with either SFAS No.&nbsp;106, “Employers’ Accounting for Postretirement Benefits Other Than Pensions,” or Accounting Principles Board Opinion No.&nbsp;12, “Omnibus Opinion – 1967,” if the employer has agreed to maintain a life insurance policy during the employee’s retirement or provide the employee with a death benefit based on the substantive arrangement with the employee. The provisions of EITF 06-10 also require an employer to recognize and mea sure the asset in a collateral assignment split-dollar life insurance arrangement based on the nature and substance of the arrangement. The adoption of EITF 06-10 had no impact on the Consolidated Financial Statements. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>On January&nbsp;1, 2008, Alcoa adopted Statement 133 Implementation Issue No. E23, “Hedging—General: Issues Involving the Application of the Shortcut Method under Paragraph 68” (Issue E23). Issue E23 provides guidance on certain practice issues related to the application of the shortcut method by amending paragraph 68 of SFAS 133 with respect to the conditions that must be met in order to apply the shortcut method for assessing hedge effectiveness of interest rate swaps. In addition to applying the provisions of Issue E23 on hedging arrangements designated on or after January&nbsp;1, 2008, an assessment was required to be made on January&nbsp;1, 2008 to determine whether preexisting hedging arrangements met the provisions of Issue E23 as of their original inception. Management performed such an assessment and determined that the adoption of Issue E23 had no impact on preexisting he dging arrangements. Alcoa will apply the provisions of Issue E23 on future hedging arrangements so designated. </FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>On January&nbsp;1, 2007, Alcoa adopted FASB Interpretation (FIN) No.&nbsp;48, “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No.&nbsp;109,” (FIN 48). FIN 48 prescribes a comprehensive model for how a company should recognize, measure, present, and disclose in its financial statements, uncertain tax positions that it has taken or expects to take on a tax return. This Interpretation requires that a company recognize in its financial statements the impact of tax positions that meet a “more likely than not” threshold, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Effective January&nbsp;1, 2007, Alcoa adopted FSP No. FIN 48-1, “Definition of Settlement in FASB Interpretation No.&nbsp;48,” (FSP FIN 48-1), which was issued on May&nbsp;2, 2007. FSP FIN 48-1 amends FIN 48 to provide guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits. The term “effectively settled” replaces the term “ultimately settled” when used to describe recognition, and the terms “settlement” or “settled” replace the terms “ultimate settlement” or “ultimately settled” when used to describe measurement of a tax position under FIN 48. FSP FIN 48-1 clarifies that a tax position can be effectively settled upon the completion of an examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The adoption of FIN 48 and FSP FIN 48-1 did not have an impact on the accompanying Consolidated Financial Statements. See Note T for the required disclosures in accordance with the provisions of FIN 48. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Alcoa adopted SFAS No.&nbsp;158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements No.&nbsp;87, 88, 106 and 132(R),” (SFAS 158), effective December&nbsp;31, 2006. The adoption of SFAS 158 resulted in the following impacts: a reduction of $119 in existing prepaid pension costs and intangible assets, the recognition of $1,234 in accrued pension and postretirement liabilities, and a charge of $1,353 ($877 after-tax) to accumulated other comprehensive loss. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Additionally, SFAS 158 requires an employer to measure the funded status of each of its plans as of the date of its year-end statement of financial position. This provision became effective for Alcoa for its December&nbsp;31, 2008 year-end and resulted in a charge of $9, which was recorded as an adjustment to December&nbsp;31, 2008 retained earnings. See Note W for additional information. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In September 2006, the Securities and Exchange Commission issued Staff Accounting Bulletin No.&nbsp;108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” (SAB 108). SAB 108 was issued to provide interpretive guidance on how the effects of the carryover or reversal of prior year misstatements should be considered in quantifying a current year misstatement. The provisions of SAB 108 were effective for Alcoa for its December&nbsp;31, 2006 year-end. The adoption of SAB 108 did not have a material impact on Alcoa’s Consolidated Financial Statements. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>On January&nbsp;1, 2006, Alcoa adopted SFAS No.&nbsp;123 (revised 2004), “Share-Based Payment,” (SFAS 123(R)), which requires the company to recognize compensation expense for stock-based compensation based on the grant date fair value. SFAS 123(R) revises SFAS No.&nbsp;123, “Accounting for Stock-Based Compensation,” and supersedes Accounting Principles Board Opinion No.&nbsp;25, “Accounting for Stock Issued to Employees,” and related interpretations. Alcoa elected the modified prospective application method for adoption, and prior period financial statements have not been restated. As a result of the implementation of SFAS 123(R), Alcoa recognized additional compensation expense of $29 ($19 after-tax) in 2006 comprised of $11 ($7 after-tax) and $18 ($12 after-tax) related to stock options and stock awards, respectively. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Effective January&nbsp;1, 2006, Alcoa adopted EITF Issue No.&nbsp;04-6, “Accounting for Stripping Costs Incurred During Production in the Mining Industry,” (EITF 04-6). EITF 04-6 requires that stripping costs incurred during the production phase of a mine are to be accounted for as variable production costs that should be included in the costs of </FONT><FONT face="Times New Roman" size=2>the inventory produced (that is, extracted) during the period that the stripping costs are incurred. Upon adoption, Alcoa recognized a cumulative effect adjustment in the opening balance of retained earnings of $3, representing the reduction in the net book value of post-production stripping costs of $8, offset by a related deferred tax liability of $3 and minority interests of $2. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Recently Issued Accounting Standards.</B> In March 2008, the FASB issued SFAS No.&nbsp;161, “Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No.&nbsp;133,” (SFAS 161). SFAS 161 requires enhanced disclosures about an entity’s derivative and hedging activities, including (i)&nbsp;how and why an entity uses derivative instruments, (ii)&nbsp;how derivative instruments and related hedged items are accounted for under SFAS 133, and (iii)&nbsp;how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. This standard becomes effective for Alcoa on January&nbsp;1, 2009. Earlier adoption of SFAS 161 and, separately, comparative disclosures for earlier periods at initial adoption are encouraged. As SFAS 161 only requires enhanced disclos ures, management has determined that the adoption of SFAS 161 will not have an impact on the Consolidated Financial Statements. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In December 2007, the FASB issued SFAS No.&nbsp;160, “Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No.&nbsp;51,” (SFAS 160). SFAS 160 amends Accounting Research Bulletin No.&nbsp;51, “Consolidated Financial Statements,” to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. This standard defines a noncontrolling interest, sometimes called a minority interest, as the portion of equity in a subsidiary not attributable, directly or indirectly, to a parent. SFAS 160 requires, among other items, that a noncontrolling interest be included in the consolidated statement of financial position within equity separate from the parent’s equity; consolidated net income to be reported at amounts inclusive of both the parent’s and noncontrolling int erest’s shares and, separately, the amounts of consolidated net income attributable to the parent and noncontrolling interest all on the consolidated statement of income; and if a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary be measured at fair value and a gain or loss be recognized in net income based on such fair value. SFAS 160 becomes effective for Alcoa on January&nbsp;1, 2009. Management has determined that the adoption of SFAS 160 will not have an impact on the Consolidated Financial Statements. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In December 2007, the FASB issued SFAS 141(R), which replaces SFAS 141 and retains the fundamental requirements in SFAS 141, including that the purchase method be used for all business combinations and for an acquirer to be identified for each business combination. This standard defines the acquirer as the entity that obtains control of one or more businesses in the business combination and establishes the acquisition date as the date that the acquirer achieves control instead of the date that the consideration is transferred. SFAS 141(R) requires an acquirer in a business combination, including business combinations achieved in stages (step acquisition), to recognize the assets acquired, liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date, with limited exceptions. It also requires the recognition of assets acquired and liabili ties assumed arising from certain contractual contingencies as of the acquisition date, measured at their acquisition-date fair values. Additionally, SFAS 141(R) requires acquisition-related costs to be expensed in the period in which the costs are incurred and the services are received instead of including such costs as part of the acquisition price. SFAS 141(R) becomes effective for Alcoa for any business combination with an acquisition date on or after January&nbsp;1, 2009. Management has determined that the adoption of SFAS 141(R) will result in a charge of $18 ($12 after-tax) in the Statement of Consolidated Operations for the write off of third-party costs related to potential business acquisitions. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In April 2008, the FASB issued FSP No. FAS 142-3, “Determination of the Useful Life of Intangible Assets,” (FSP FAS 142-3). FSP FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No.&nbsp;142, “Goodwill and Other Intangible Assets,” (SFAS 142) in order to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS 141(R) and other GAAP. FSP FAS 142-3 becomes effective for Alcoa on January&nbsp;1, 2009. Management has determined that the adoption of FSP FAS 142-3 will not have an impact on the Consolidated Financial Statements. </FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In June 2008, the FASB issued FSP No. EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities,” (FSP EITF 03-6-1). FSP EITF 03-6-1 states that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. FSP EITF 03-6-1 becomes effective for Alcoa on January&nbsp;1, 2009. Management has determined that the adoption of FSP EITF 03-6-1 will not have an impact on the Consolidated Financial Statements. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In December 2008, the FASB issued FSP No. FAS 132(R)-1, “Employers’ Disclosures about Postretirement Benefit Plan Assets,” (FSP FAS 132(R)-1). FSP FAS 132(R)-1 amends SFAS No.&nbsp;132 (revised 2003), “Employers’ Disclosures about Pensions and Other Postretirement Benefits,” to provide guidance on an employer’s disclosures about plan assets of a defined benefit pension or other postretirement plan. This guidance is intended to ensure that an employer meets the objectives of the disclosures about plan assets in an employer’s defined benefit pension or other postretirement plan to provide users of financial statements with an understanding of the following: how investment allocation decisions are made; the major categories of plan assets; the inputs and valuation techniques used to measure the fair value of plan assets; the effect of fair value measurements using significant unobservable inputs on changes in plan assets; and significant concentrations of risk within plan assets. FSP FAS 132(R)-1 becomes effective for Alcoa on December&nbsp;31, 2009. As FSP FAS 132(R)-1 only requires enhanced disclosures, management has determined that the adoption of FSP FAS 132(R)-1 will not have an impact on the Consolidated Financial Statements. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Reclassification.</B> Certain amounts in previously issued financial statements were reclassified to conform to the 2008 presentation. See Note B for additional information. </FONT></P> -362000000 -2832000000 <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>O. Other Income, Net </B></FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="78%"></TD> <TD vAlign=bottom width="6%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2006</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Equity income</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>41</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>71</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>72</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Interest income</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>53</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>61</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>87</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Dividend income</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>31</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>45</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Foreign currency losses, net</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(74</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(26</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(48</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Gains from asset sales</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>50</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,806</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>71</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Other, net</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(12</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(23</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>9</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>59</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,920</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>236</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In 2007, Gains from asset sales included a $1,754 gain on the sale of Alcoa’s investment in Chalco (see Note I for additional information). The dividend income in 2007 and 2006 is virtually all related to Alcoa’s former stake in Chalco. </FONT></P> 34000000 1082000000 56000000 556000000 295000000 141000000 276000000 1303000000 25000000 3413000000 523000000 <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>W. Pension Plans and Other Postretirement Benefits </B></FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Alcoa maintains pension plans covering most U.S. employees and certain employees in foreign locations. Pension benefits generally depend on length of service, job grade, and remuneration. Substantially all benefits are paid through pension trusts that are sufficiently funded to ensure that all plans can pay benefits to retirees as they become due. Most U.S. salaried and non-union hourly employees hired after March&nbsp;1, 2006 will participate in a defined contribution plan instead of a defined benefit plan. </FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Alcoa maintains health care and life insurance benefit plans covering eligible U.S. retired employees and certain retirees from foreign locations. Generally, the medical plans pay a percentage of medical expenses, reduced by deductibles and other coverages. These plans are generally unfunded, except for certain benefits funded through a trust. Life benefits are generally provided by insurance contracts. Alcoa retains the right, subject to existing agreements, to change or eliminate these benefits. All U.S. salaried and certain hourly employees hired after January&nbsp;1, 2002 will not have postretirement health care benefits. All U.S. salaried and certain hourly employees that retire on or after April&nbsp;1, 2008 will not have postretirement life insurance benefits. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Alcoa adopted SFAS 158 effective December&nbsp;31, 2006. SFAS 158 requires an employer to recognize the funded status of each of its defined pension and postretirement benefit plans as a net asset or liability in its statement of financial position with an offsetting amount in accumulated other comprehensive income, and to recognize changes in that funded status in the year in which changes occur through comprehensive income. Following the adoption of SFAS 158, additional minimum pension liabilities (AML) and related intangible assets are no longer recognized. The adoption of SFAS 158 resulted in the following impacts: a reduction of $119 in existing prepaid pension costs and intangible assets, the recognition of $1,234 in accrued pension and postretirement liabilities, and a charge of $1,353 ($877 after-tax) to accumulated other comprehensive loss. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Additionally, SFAS 158 requires an employer to measure the funded status of each of its plans as of the date of its year-end statement of financial position. This provision became effective for Alcoa for its December&nbsp;31, 2008 year-end and resulted in a charge of $9, which was recorded as an adjustment to December&nbsp;31, 2008 retained earnings. Prior to the effective date of this provision, the funded status of most of Alcoa’s pension and other postretirement benefit plans were already measured as of December&nbsp;31st. </FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B></B></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Obligations and Funded Status </B></FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="64%"></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD> <TD></TD></TR> <TR> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=6><FONT face="Times New Roman" size=2><B>Pension benefits</B></FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=6><FONT face="Times New Roman" size=2><B>Postretirement&nbsp;benefits</B></FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2><B>December&nbsp;31,</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>&nbsp;&nbsp;&nbsp;&nbsp;2008&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>&nbsp;&nbsp;&nbsp;&nbsp;2007&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2><B>Change in benefit obligation</B></FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Benefit obligation at beginning of year</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>11,601</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>11,614</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,260</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,511</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Service cost</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>185</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>200</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>25</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>28</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Interest cost</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>693</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>666</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>193</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>195</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Amendments</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>11</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>67</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(27</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Actuarial gains</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(457</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(311</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(16</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(153</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Divestitures</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(71</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(5</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(58</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(5</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Settlements</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(27</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(62</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Curtailments</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(2</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(9</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Benefits paid, net of participants’ contributions</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(771</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(710</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(308</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(303</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Medicare Part D subsidy receipts</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>29</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>20</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Other transfers, net</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>23</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(51</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Exchange rate</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(420</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>193</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(7</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>3</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Benefit obligation at end of year</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>10,765</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>11,601</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,121</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,260</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2><B>Change in plan assets</B></FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Fair value of plan assets at beginning of year</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>10,652</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>10,097</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>203</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>189</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Actual return on plan assets</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(2,058</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>836</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(41</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>14</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Employer contributions</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>523</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>374</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Participants’ contributions</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>33</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>36</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Benefits paid</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(769</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(716</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Administrative expenses</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(22</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(19</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Divestitures</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(46</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(3</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Settlements</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(27</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(64</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Other transfers, net</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>18</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(51</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Exchange rate</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(396</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>162</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Fair value of plan assets at end of year</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>7,908</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>10,652</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>162</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>203</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2><B>Funded status</B></FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(2,857</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(949</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(2,959</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(3,057</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Amounts attributed to joint venture partners</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>14</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>16</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>9</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>9</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Net funded status</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(2,843</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(933</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(2,950</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(3,048</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2><B>Amounts recognized in the Consolidated Balance Sheet consist of:</B></FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Noncurrent assets</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>122</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>216</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Current liabilities</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(24</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(24</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(220</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(295</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Noncurrent liabilities</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(2,941</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(1,098</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(2,730</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(2,753</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Liabilities of operations held for sale</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(27</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Net amount recognized</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(2,843</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(933</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(2,950</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(3,048</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2><B>Amounts recognized in Accumulated Other Comprehensive Loss consist of:</B></FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Net actuarial loss</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,650</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,385</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>724</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>784</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Prior service cost (benefit)</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>89</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>118</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(143</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(150</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Total, before tax effect</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,739</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,503</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>581</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>634</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Less: Amounts attributed to joint venture partners</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>13</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>11</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Net amount recognized, before tax effect</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,726</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,492</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>579</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>632</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2><B>Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Loss (Income) consist of: </B></FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Net loss (gain)</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,364</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(344</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(16</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(160</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Amortization of net loss</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(99</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(127</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(44</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(55</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Prior service (benefit) cost</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(11</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>67</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(4</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(30</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Amortization of prior service (cost) benefit</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(18</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(15</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>11</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>3</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Total, before tax effect</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,236</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(419</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(53</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(242</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Less: Amounts attributed to joint venture partners</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(2</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Net amount recognized, before tax effect</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,234</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(419</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(53</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(240</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B></B></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B></B></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Pension Plan Benefit Obligations </B></FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="80%"></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=5><FONT face="Times New Roman" size=2><B>Pension benefits</B></FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>The projected benefit obligation and accumulated benefit obligation for all defined benefit pension plans was as follows:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Projected benefit obligation</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>10,765</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>11,601</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Accumulated benefit obligation</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>10,485</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>11,216</FONT></TD></TR> <TR> <TD height=8></TD> <TD colSpan=3 height=8></TD> <TD colSpan=3 height=8></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>The aggregate projected benefit obligation and fair value of plan assets for pension plans with projected benefit obligations in excess of plan assets was as follows:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Projected benefit obligation</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>10,233</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>9,933</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Fair value of plan assets</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>7,256</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>8,771</FONT></TD></TR> <TR> <TD height=8></TD> <TD colSpan=3 height=8></TD> <TD colSpan=3 height=8></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>The aggregate accumulated benefit obligation and fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets was as follows:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Accumulated benefit obligation</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>9,660</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>9,550</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Fair value of plan assets</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>6,923</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>8,771</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Components of Net Periodic Benefit Costs </B></FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="63%"></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="3%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="3%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="3%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="3%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="3%"></TD> <TD></TD> <TD></TD> <TD></TD></TR> <TR> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=10><FONT face="Times New Roman" size=2><B>Pension benefits</B></FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=10><FONT face="Times New Roman" size=2><B>Postretirement&nbsp;benefits</B></FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2006</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2006</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Service cost</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>166</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>200</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>209</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>24</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>28</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>32</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Interest cost</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>678</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>666</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>628</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>193</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>195</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>208</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Expected return on plan assets</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(805</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(787</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(740</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(18</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(17</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(15</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Amortization of prior service cost (benefit)</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>18</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>15</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>14</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(11</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(3</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>10</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Recognized actuarial loss</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>99</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>127</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>118</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>44</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>55</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>63</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Settlements</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>20</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Curtailments</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>9</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(3</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Net periodic benefit costs</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>178</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>221</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>229</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>241</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>255</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>298</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Amounts Expected to be Recognized in Net Periodic Benefit Costs </B></FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="62%"></TD> <TD vAlign=bottom width="17%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="17%"></TD> <TD></TD> <TD></TD> <TD></TD></TR> <TR> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Pension&nbsp;benefits</B></FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Postretirement&nbsp;benefits</B></FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2009</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2009</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Prior service cost (benefit) recognition</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>16</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(11</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Actuarial loss recognition</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>104</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>51</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>As disclosed in Note F, Alcoa completed the sale of its Packaging and Consumer businesses to Rank in February&nbsp;2008. In September 2008, Alcoa announced that it was temporarily idling the remaining production at its smelter in Rockdale (see Note D for additional information). As a result, certain U.S. and non-U.S. pension and postretirement benefit plans were remeasured and Alcoa recognized curtailment losses of $2 and $9, respectively, due to the significant reduction in the expected aggregate years of future service of the employees of the Packaging and Consumer businesses and the Rockdale smelter. The curtailment losses include recognition of the change in the pension plans’ projected benefit obligation (PBO) or the postretirement benefit plans’ accumulated postretirement benefit obligation (APBO) and a portion of the previously unrecognized prior service cost reflecting the reduction in ex pected future service. The remeasurement of these pension and postretirement benefit plans generated an increase and decrease in 2008 annual net periodic benefit cost of $23 and $10 for pension plans and postretirement benefit plans, respectively. Also, the pension plans’ PBO and plan assets decreased by $26 and $248, respectively, and the postretirement benefit plans’ APBO and plan assets decreased by $131 and $10, respectively. </FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Also in 2008, as part of the sale of the Packaging and Consumer businesses, Rank assumed the obligations of certain other U.S. and non-U.S. pension plans with PBOs of $71 and plan assets of $46. Rank’s assumption of these obligations resulted in a settlement of the pension plan obligations for Alcoa. The settlement of these obligations resulted in the recognition of previously deferred actuarial losses in the amount of $14. Additionally, Alcoa recorded $4 less in 2008 annual net periodic benefit cost due to the settlement of these pension plans. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Due to the remeasurement of these curtailed and settled plans, Alcoa recorded a charge of $220 ($144 after-tax) for pension plans and a credit of $107 ($69 after-tax) for postretirement benefit plans to accumulated other comprehensive loss in 2008. In addition, a charge of $30 was recorded in accumulated other comprehensive loss due to the reclassification of deferred taxes related to the Medicare Part D prescription drug subsidy. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Lastly in 2008, Alcoa recorded a settlement charge of $6 as a component of net periodic benefit cost related to its pension benefits due to significant lump sum benefit payments. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In 2007, Alcoa recorded a curtailment charge of $2 and curtailment income of $3 as a component of net periodic benefit cost related to its pension benefits and postretirement benefits, respectively. The curtailment charge of $2 was due to the contribution of Alcoa’s soft alloy extrusion business to the Sapa AB joint venture (see Note I for additional information). The curtailment income of $3 consisted of income of $7 due to the elimination of the retiree life insurance benefit for certain U.S. employees who retire on or after April&nbsp;1, 2008 and a charge of $4 related to Alcoa’s soft alloy extrusion business. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Also in 2007, Alcoa recorded a settlement credit of $2 as a component of net periodic benefit cost related to its pension benefits due to significant lump sum benefit payments. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>For pension plan benefits, in 2008, a net charge of $2,234 ($1,406 after-tax) was recorded in accumulated other comprehensive loss primarily due to the decrease in the fair value of plan assets, which was somewhat offset by the decrease in the accumulated benefit obligation (as a result of a 20 basis-point increase in the discount rate) and the recognition of actuarial losses and prior service costs. Also included in this net charge is the $220 ($144 after-tax) impact related to the remeasured pension plans due to the sale of the Packaging and Consumer businesses. In 2007, a net credit of $419 ($268 after-tax) was recorded in accumulated other comprehensive loss due to a decrease in the accumulated benefit obligations (as a result of a 25 basis-point increase in the discount rate, which was partially offset by plan amendments) and the recognition of actuarial losses and prior service costs. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>For postretirement benefits, in 2008, a credit of $53 ($32 after-tax) was recorded in accumulated other comprehensive loss due to a decease in the accumulated benefit obligation (as a result of a 20 basis-point increase in the discount rate) and the recognition of actuarial losses and prior service costs. In addition, a charge of $8 was recorded in accumulated other comprehensive loss due to the reclassification of deferred taxes related to the Medicare Part D prescription drug subsidy. In 2007, a credit of $240 ($158 after-tax) was recorded in accumulated other comprehensive loss due to a decrease in the accumulated benefit obligations (as a result of a 25 basis-point increase in the discount rate) plan amendments, and the recognition of actuarial losses and prior service costs. In addition, a credit of $80 was recorded in accumulated other comprehensive loss due to the reclassification of deferred taxes related to the Medicare Part D prescription drug subsidy. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The unrecognized net actuarial loss of $3,650 for pension benefit plans at December&nbsp;31, 2008 primarily resulted from the decrease in plan assets. The unrecognized net actuarial loss of $724 for postretirement benefit plans at December&nbsp;31, 2008 primarily resulted from the overall decline in interest rates over the past seven years. To the extent these losses exceed certain thresholds, the excess generally will be amortized over the estimated future service of plan participants, which is 10 years. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Alcoa pays a portion of the prescription drug cost for eligible retirees under certain of its postretirement benefit plans. These benefits were determined to be actuarially equivalent to the Medicare Part D prescription drug benefit of the Medicare Prescription Drug, Improvement and Modernization Act of 2003. As a result, the net periodic benefit cost for </FONT><FONT face="Times New Roman" size=2>postretirement benefits for the years ended December&nbsp;31, 2008, 2007, and 2006 reflected a reduction of $42, $58, and $53, respectively, related to the recognition of the federal subsidy awarded under Medicare Part D. Future net periodic postretirement benefit costs will be adjusted to reflect the lower interest cost due to the reduction in the APBO resulting from the impact of the federal subsidy. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Assumptions </B></FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Weighted average assumptions used to determine benefit obligations are as follows: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="86%"></TD> <TD vAlign=bottom width="6%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="6%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2><B>December&nbsp;31,</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Discount rate</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>6.4</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>6.2</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Rate of compensation increase</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>4.0</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>4.0</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The discount rate is determined using a yield curve model developed with the assistance of the Company’s external actuaries. The plans’ projected benefit obligation cash flows are discounted using yields on high quality corporate bonds to produce a single equivalent rate. In 2008, the yield curve model was refined to exclude certain corporate bonds affected by recent market conditions, as they were deemed not to be representative of equivalent yields on high-quality fixed income investments. Once the credit markets stabilize, Alcoa will revert back to the use of its historic yield curve model to determine the discount rate. The plans’ cash flows have an average duration of 10 years. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The rate of compensation increase is based upon actual experience. Alcoa does not expect its recent global salary freeze to significantly impact this rate since it is a long-term assumption. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Weighted average assumptions used to determine the net periodic benefit cost are as follows: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="79%"></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle><FONT face="Times New Roman" size=2><B>2006</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Discount rate</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>6.20</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>5.95</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>5.70</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Expected long-term rate of return on plan assets</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>9.00</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>9.00</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>9.00</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Rate of compensation increase</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>4.00</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>4.00</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>4.00</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The expected long-term rate of return on plan assets is based on historical performance as well as expected future rates of return on plan assets. Although the 10-year moving average of actual performance fell below 9% for the first time in 20 years, the 20-year moving average has continued to exceed 9%. The expected long-term rate of return on plan assets will be reduced to 8.75% for 2009 reflecting recent market conditions. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Assumed health care cost trend rates are as follows: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="79%"></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle><FONT face="Times New Roman" size=2><B>2006</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Health care cost trend rate assumed for next year</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>6.5</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>7.0</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>7.0</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Rate to which the cost trend rate gradually declines</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>5.0</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>5.0</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>5.0</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Year that the rate reaches the rate at which it is assumed to remain</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2013</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2012</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2011</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The health care cost trend rate in the calculation of the 2007 benefit obligation was 7.0% from 2007 to 2008 and 6.5% from 2008 to 2009. Actual annual Company health care cost trend experience over the past three years has ranged from (6.2)% to 4.1%. Due to the decline in Alcoa’s health care cost trend experience in recent years, a 6.5% trend rate will be used for 2009. Recently, the low-end of the range of actual annual health care costs turned favorable; however this change was not considered indicative of expected future actual costs. As a result, the assumed health care cost trend rate for next year was not significantly impacted. </FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Assumed health care cost trend rates have an effect on the amounts reported for the health care plan. A one-percentage point change in these assumed rates would have the following effects: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="83%"></TD> <TD vAlign=bottom width="7%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="7%"></TD> <TD></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align=center><FONT face="Times New Roman" size=2><B>1%</B></FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 1px" align=center><FONT face="Times New Roman" size=2><B>increase</B></FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>1%<BR>decrease</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Effect on total of service and interest cost components</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>4</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(4</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Effect on postretirement benefit obligations</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>61</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(55</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Plan Assets </B></FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Alcoa’s pension and postretirement plans’ investment policy and weighted average asset allocations at December&nbsp;31, 2008 and 2007, by asset category, are as follows: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="74%"></TD> <TD vAlign=bottom width="7%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="7%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="7%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=4><FONT face="Times New Roman" size=2><B>Plan assets</B></FONT><BR><FONT face="Times New Roman" size=2><B>at<BR>December&nbsp;31,</B></FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2><B>Asset category</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle><FONT face="Times New Roman" size=2><B>Policy&nbsp;range</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Equity securities</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>30–60</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>38</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>54</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Debt securities</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>30–55</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>47</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>35</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Real estate</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>5–15</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>7</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>6</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Other</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>0–15</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>8</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>5</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Total</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>100</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>100</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The principal objectives underlying the investment of the pension and postretirement plans’ assets are to ensure that Alcoa can properly fund benefit obligations as they become due under a broad range of potential economic and financial scenarios, maximize the long-term investment return with an acceptable level of risk based on such obligations, and to broadly diversify investments across and within the capital markets to protect asset values against adverse market movements in any one market. Alcoa’s strategy balances the requirement to maximize returns using potentially higher return generating assets, such as equity securities, with the need to control the risk versus the benefit obligations with less volatile assets, such as fixed-income securities. In 2009, Alcoa expects to modify its pension plans’ investment strategy by reducing equity securities and increasing debt securities by five percent to help reduce the future volatility of the plans’ funded status. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Investment practices must comply with the requirements of the Employee Retirement Income Security Act of 1974 (ERISA) and any other applicable laws and regulations. The use of derivative instruments is permitted where appropriate and necessary for achieving overall investment policy objectives. Currently, the use of derivative instruments is not significant when compared to the overall investment portfolio. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Cash Flows </B></FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>It is Alcoa’s policy to fund amounts for pension plans sufficient to meet the minimum requirements set forth in applicable benefits laws and local tax laws, including the Pension Protection Act of 2006 for U.S. plans. From time to time, Alcoa contributes additional amounts as deemed appropriate. In 2008 and 2007, contributions to Alcoa’s pension plans were $523 and $322, of which $433 and $158 were voluntary, respectively. The minimum required cash contribution to the pension plans in 2009 is estimated to be $140, comprised of $55 for U.S. plans and $85 for international plans. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Benefit payments expected to be paid to pension and postretirement benefit plans’ participants and expected Medicare Part D subsidy receipts are as follows: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="57%"></TD> <TD vAlign=bottom width="7%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="7%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="7%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="7%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2><B>Year ended December&nbsp;31,</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Pension<BR>benefits</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Gross&nbsp;Post-<BR>retirement<BR>benefits</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align=center><FONT face="Times New Roman" size=2><B>Medicare&nbsp;Part&nbsp;D<BR>subsidy</B></FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 1px" align=center><FONT face="Times New Roman" size=2><B>receipts</B></FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Net Post-<BR>retirement<BR>benefits</B></FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>2009</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>770</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>320</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>25</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>295</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>2010</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>780</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>325</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>30</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>295</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>2011</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>790</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>330</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>30</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>300</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>2012</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>800</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>325</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>30</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>295</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>2013</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>810</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>325</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>35</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>290</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>2014 through 2018</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>4,200</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,525</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>155</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,370</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>8,150</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,150</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>305</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,845</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B></B></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Defined Contribution Plans </B></FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Alcoa sponsors savings and investment plans in several countries, including the U.S. and Australia. Expenses related to these plans were $134 in 2008, $139 in 2007, and $134 in 2006. </FONT></P> 679000000 2253000000 643000000 72000000 177000000 <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>H. Properties, Plants, and Equipment, at Cost </B></FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="80%"></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2><B>December&nbsp;31,</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Land and land rights, including mines</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>447</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>460</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Structures</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>7,825</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>7,226</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Machinery and equipment</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>18,471</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>19,003</FONT></TD></TR> <TR> <TD vAlign=top></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>26,743</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>26,689</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Less: accumulated depreciation, depletion, and amortization</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>13,846</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>14,104</FONT></TD></TR> <TR> <TD vAlign=top></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>12,897</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>12,585</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Construction work in progress</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>4,558</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,956</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>17,455</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>16,541</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>As of December&nbsp;31, 2008 and 2007, the net carrying value of idled assets was $453 and $227, representing 807 kmt and 452 kmt of idle smelter capacity, respectively.</FONT></P> 31000000 <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align=center><FONT face="Times New Roman" size=2><B>Supplemental Financial Information (unaudited) </B></FONT></P> <P style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px" align=center><FONT face="Times New Roman" size=2><B>Quarterly Data </B></FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align=center><FONT face="Times New Roman" size=2><B>(dollars in millions, except per-share amounts) </B></FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="62%"></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="3%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="3%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="3%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="3%"></TD> <TD></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>First</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Second</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Third</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Fourth</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Year</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2><B>2008</B></FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Sales</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>6,998</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>7,245</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>6,970</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>5,688</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>26,901</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD height=8></TD> <TD colSpan=4 height=8></TD> <TD colSpan=4 height=8></TD> <TD colSpan=4 height=8></TD> <TD colSpan=4 height=8></TD> <TD colSpan=4 height=8></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Income (loss) from continuing operations</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>299</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>553</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>306</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(929</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>229</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Income (loss) from discontinued operations (B)</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>4</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(7</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(38</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(262</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(303</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Net income (loss)</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>303</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>546</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>268</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(1,191</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(74</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Earnings (loss) per common share:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Basic:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Income (loss) from continuing operations</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.37</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.68</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.38</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(1.16</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.28</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Income (loss) from discontinued operations</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(0.01</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(0.05</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(0.33</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(0.37</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 7em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Net income (loss)</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.37</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.67</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.33</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(1.49</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(0.09</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Diluted:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Income (loss) from continuing operations</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.36</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.67</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.37</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(1.16</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.28</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Income (loss) from discontinued operations</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.01</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(0.01</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(0.04</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(0.33</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(0.37</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top noWrap> <P style="MARGIN-LEFT: 7em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Net income (loss)</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.37</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.66</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.33</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(1.49</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(0.09</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD height=16></TD> <TD colSpan=4 height=16></TD> <TD colSpan=4 height=16></TD> <TD colSpan=4 height=16></TD> <TD colSpan=4 height=16></TD> <TD colSpan=4 height=16></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>First</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Second</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Third</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Fourth</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Year</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2><B>2007</B></FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Sales</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>7,525</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>7,684</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>7,039</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>7,032</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>29,280</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD height=8></TD> <TD colSpan=4 height=8></TD> <TD colSpan=4 height=8></TD> <TD colSpan=4 height=8></TD> <TD colSpan=4 height=8></TD> <TD colSpan=4 height=8></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Income from continuing operations</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>680</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>716</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>780</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>638</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,814</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Loss from discontinued operations (B)</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(18</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(1</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(225</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(6</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(250</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Net income</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>662</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>715</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>555</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>632</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,564</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Earnings (loss) per common share:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Basic:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Income from continuing operations</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.78</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.82</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.90</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.76</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3.27</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Loss from discontinued operations</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(0.02</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(0.26</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(0.01</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(0.29</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 7em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Net income</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.76</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.82</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.64</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.75</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>2.98</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Diluted:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Income from continuing operations</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.78</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.81</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.89</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.75</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3.23</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top noWrap> <P style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Loss from discontinued operations</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(0.03</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(0.26</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(0.28</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top noWrap> <P style="MARGIN-LEFT: 7em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Net income</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.75</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.81</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.63</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.75</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2.95</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT size=1>&nbsp;</FONT></P> 204000000 246000000 939000000 <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>D. Restructuring and Other Charges </B></FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Restructuring and other charges for each of the three years in the period ended December&nbsp;31, 2008 were comprised of the following: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="80%"></TD> <TD vAlign=bottom width="6%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2006</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Asset impairments</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>670</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>214</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>442</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Layoff costs</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>183</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>35</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>71</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Other exit costs</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>109</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>47</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>35</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Reversals of previously recorded layoff and other exit costs*</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(23</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(28</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(41</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Restructuring and other charges</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>939</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>268</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>507</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0> <TBODY> <TR> <TD vAlign=top align=left width="1%"><FONT face="Times New Roman" size=2>*</FONT></TD> <TD vAlign=top align=left><FONT face="Times New Roman" size=2>Reversals of previously recorded layoff and other exit costs resulted from changes in facts and circumstances that led to changes in estimated costs. </FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Employee termination and severance costs were recorded based on approved detailed action plans submitted by the operating locations that specified positions to be eliminated, benefits to be paid under existing severance plans, union contracts or statutory requirements, and the expected timetable for completion of the plans. </FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B></B></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>2008 Restructuring Program. </B>Late in 2008, Alcoa took specific actions to reduce costs and strengthen its portfolio, partly due to the current economic downturn. Such actions include targeted reductions, curtailments, and plant closures and consolidations, which will reduce headcount by approximately 5,400 by the end of 2009, resulting in severances charges of $138 ($98 after-tax and minority interests), asset impairments of $156 ($88 after-tax and minority interests), and other exit costs of $58 ($57 after-tax). The significant components of these actions were as follows: </FONT></P> <P style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>– As a result of recent market conditions, the Primary Metals segment will reduce production by 483 thousand metric tons (kmt) and the Alumina segment will reduce production by a total of 1,500 kmt, all of which will be fully implemented by the end of the first quarter of 2009. These production curtailments as well as targeted reductions will result in the elimination of approximately 1,110 positions totaling $23 in severance costs. Asset impairments of $116 related to these two segments were also recognized, including the write off of $84 in engineering costs related to a 1,500 kmt planned expansion of Jamalco’s Clarendon, Jamaica refinery. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>– The Flat-Rolled Products segment was restructured through the following actions: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0> <TBODY> <TR> <TD width="5%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left width="2%"><FONT face="Times New Roman" size=2>•</FONT></TD> <TD vAlign=top width="1%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left> <P align=left><FONT face="Times New Roman" size=2>Restructuring and downsizing of the Mill Products businesses in Europe and North America, resulting in severance charges of $53 for the reduction of approximately 850 positions; </FONT></P></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0> <TBODY> <TR> <TD width="5%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left width="2%"><FONT face="Times New Roman" size=2>•</FONT></TD> <TD vAlign=top width="1%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left> <P align=left><FONT face="Times New Roman" size=2>Optimization of the Global Hard Alloy Extrusion operations, resulting in severance charges of $13 for a headcount reduction of approximately 240 and asset impairments of $3; </FONT></P></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0> <TBODY> <TR> <TD width="5%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left width="2%"><FONT face="Times New Roman" size=2>•</FONT></TD> <TD vAlign=top width="1%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left> <P align=left><FONT face="Times New Roman" size=2>Alignment of production with demand at operations in Russia, through the elimination of approximately 1,400 positions resulting in severance charges of $7; </FONT></P></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0> <TBODY> <TR> <TD width="5%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left width="2%"><FONT face="Times New Roman" size=2>•</FONT></TD> <TD vAlign=top width="1%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left> <P align=left><FONT face="Times New Roman" size=2>The shutdown of the Foil business in Bohai, resulting in severance charges of $6 for the reduction of approximately 400 positions, asset impairments of $24, and other exits costs of $54, primarily related to lease termination costs. </FONT></P></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>– The Engineered Products and Solutions segment was restructured through the following actions: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0> <TBODY> <TR> <TD width="5%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left width="2%"><FONT face="Times New Roman" size=2>•</FONT></TD> <TD vAlign=top width="1%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left> <P align=left><FONT face="Times New Roman" size=2>Exiting of the Auto Cast Wheel business, through the closure of the only remaining facility, which employs approximately 270, by June 2009 for severance costs of $2; </FONT></P></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0> <TBODY> <TR> <TD width="5%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left width="2%"><FONT face="Times New Roman" size=2>•</FONT></TD> <TD vAlign=top width="1%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left> <P align=left><FONT face="Times New Roman" size=2>Consolidation of operations in the Building and Construction Systems business to maximize operating efficiencies and align capacity with the decline in the commercial building and construction markets, resulting in severance charges of $6 for the elimination of approximately 500 positions; </FONT></P></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0> <TBODY> <TR> <TD width="5%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left width="2%"><FONT face="Times New Roman" size=2>•</FONT></TD> <TD vAlign=top width="1%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left> <P align=left><FONT face="Times New Roman" size=2>Alignment of production with demand across the Power and Propulsion business, resulting in the reduction of approximately 250 positions for a cost of $6; </FONT></P></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0> <TBODY> <TR> <TD width="5%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left width="2%"><FONT face="Times New Roman" size=2>•</FONT></TD> <TD vAlign=top width="1%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left> <P align=left><FONT face="Times New Roman" size=2>Other severance charges of $8 for the elimination of approximately 250 positions, asset impairments of $13, and other exit costs of $1. </FONT></P></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>– In order to reduce overhead serving various businesses, approximately 130 positions will be eliminated at Corporate, resulting in severance charges of $14 and other exits costs of $3. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In addition to the above actions, Alcoa intends to sell its Global Foil and Transportation Products Europe businesses in order to streamline its portfolio. As a result of this decision, the assets and related liabilities of the Global Foil and Transportation Products Europe businesses were classified as held for sale (see Note B for additional information). Asset impairments of $129 ($100 after-tax) and $52 ($49 after-tax) were recognized to reflect the estimated fair values of the Global Foil and Transportation Products Europe businesses, respectively. Also, Alcoa and Orkla agreed to exchange their stakes in the Sapa AB and Elkem Aluminium ANS joint ventures (see Note I for additional information). This portfolio action resulted in an impairment charge of $333 ($223 after-tax) to reflect the estimated fair value of Alcoa’s investment in Sapa AB. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Earlier in 2008, Alcoa recorded $48 ($31 after-tax) in charges, which consists of $44 ($29 after-tax) for the layoff of approximately 870 employees and related curtailment of postretirement benefits and $4 ($2 after-tax) for other exit </FONT><FONT face="Times New Roman" size=2>costs, associated with the complete production curtailment of the Rockdale, TX smelter (267 kmt) due to ongoing power supply issues with Rockdale’s onsite supplier and the uneconomical power that Alcoa was forced to purchase in the open market as a result of such issues. Also during 2008, Alcoa recorded a loss of $43 ($32 after-tax) on the sale of its Packaging and Consumer businesses (see Note F for additional information). The remaining net charges in 2008 were comprised of $1 ($1 after-tax and minority interests) for severance related to a reduction in headcount of approximately 30, $4 for other exit costs ($6 after-ta x), and $23 ($15 after-tax and minority interests) for reversals of previously recorded costs, slightly more than half of which related to the reversal of a reserve related to a shutdown facility. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>As of December&nbsp;31, 2008, approximately 1,000 of the 6,300 employees were terminated. Cash payments of $7 were made against the 2008 program reserves in 2008. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>2007 Restructuring Program. </B>In 2007, Alcoa recorded restructuring and other charges of $268 ($201 after-tax and minority interests), which were comprised of the following components: $257 ($174 after-tax) in asset impairments associated with a strategic review of certain businesses; a $62 ($23 after-tax) reduction to the original impairment charge recorded in 2006 related to the estimated fair value of the soft alloy extrusion business, which was contributed to a joint venture effective June&nbsp;1, 2007 (see the 2006 Restructuring Program for additional information); and $73 ($50 after-tax and minority interests) in net charges comprised of severance charges of $35 ($26 after-tax and minority interests) related to the elimination of approximately 400 positions and asset impairments of $19 ($12 after-tax) of various other businesses and facilities, other exit costs of $47 ($31 after-tax and minority interests), primarily for accelerated depreciation associated with the shutdown of certain facilities in 2007 related to the 2006 Restructuring Program, and reversals of previously recorded layoff and other exit costs of $28 ($19 after-tax and minority interests) due to normal attrition and changes in facts and circumstances. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In April 2007, Alcoa announced it was exploring strategic alternatives for the potential disposition of the businesses within the Packaging and Consumer segment and the Automotive Castings business. In September 2007, management completed its review of strategic alternatives and determined that the best course of action was to sell the Packaging and Consumer and Automotive Castings businesses. As a result of this decision, the assets and related liabilities of the Packaging and Consumer and Automotive Castings businesses were classified as held for sale (see Note B for additional information). In the third quarter of 2007, Alcoa recorded impairment charges of $215 ($140 after-tax) related to the Packaging and Consumer businesses and $68 ($51 after-tax) for the Automotive Castings business to reflect the write-down of the carrying value of the assets of these businesses to their respective estimated fair values. In addition, Alcoa recorded a $464 discrete income tax charge related to goodwill associated with the planned sale of the Packaging and Consumer businesses that would have been non-deductible for tax purposes under the transaction structure contemplated at the time. In November 2007, Alcoa completed the sale of the Automotive Castings business and recognized a loss of $4 ($2 after-tax) in Restructuring and other charges on the accompanying Statement of Consolidated Operations (see Note F for additional information). In December 2007, Alcoa agreed to sell the Packaging and Consumer businesses for $2,700 in cash, and reduced the impairment charge by $26 ($17 after-tax) and the discrete income tax charge by $322 as a result of the structure of the agreed upon sale (this sale was completed in 2008 – see Note F for additional information). </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>As of December&nbsp;31, 2008, the terminations associated with the 2007 restructuring program were essentially complete. Cash payments of $20 and $13 were made against the 2007 program reserves in 2008 and 2007, respectively. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>2006 Restructuring Program.</B> In November 2006, Alcoa executed a plan to re-position several of its downstream operations in order to further improve returns and profitability, and to enhance productivity and efficiencies through a targeted restructuring of operations, and the creation of a soft alloy extrusion joint venture. The restructuring program encompassed identifying assets to be disposed of, plant closings and consolidations, that led to the elimination of approximately 1,800 positions across the company’s global businesses. Restructuring charges of $507 ($347 after-tax and minority interests) were recorded in 2006 and were comprised of the following components: $71 of charges for employee termination and severance costs spread globally across the company; $442 related to asset impairments for structures, machinery, equipment, and goodwill, more than half of which relates to the so ft alloy extrusion business; </FONT><FONT face="Times New Roman" size=2>and $35 for other exit costs, consisting primarily of accelerated depreciation associated with assets for which the useful life has been changed due to plans to close certain facilities in the near term and environmental clean-up costs. Partially offsetting these charges was $41 of income related to the reversal of previously recorded layoff and other exit costs resulting from new facts and circumstances that arose subsequent to the original estimates. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The significant components of the 2006 restructuring program were as follows: </FONT></P> <P style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>– The hard and soft alloy extrusion businesses, included within the former Extruded and End Products segment, were restructured through the following actions: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE style="MARGIN-TOP: -2px; PADDING-BOTTOM: 8px; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0> <TBODY> <TR> <TD width="5%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left width="2%"> <P style="VERTICAL-ALIGN: top; LINE-HEIGHT: 95%"><FONT face="Times New Roman" size=2>•</FONT></P></TD> <TD vAlign=top width="1%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left> <P style="VERTICAL-ALIGN: top; LINE-HEIGHT: 95%" align=left><FONT face="Times New Roman" size=2></FONT><FONT face="Times New Roman" size=1><SUP></SUP></FONT><FONT face="Times New Roman" size=2>Alcoa signed a letter of intent with Orkla ASA’s SAPA Group (Sapa) to create a joint venture that would combine its soft alloy extrusion business with Sapa’s Profiles extruded aluminum business. Effective June&nbsp;1, 2007, the joint venture was completed. The new venture is majority-owned by Orkla ASA and operated by Sapa. In 2006, Alcoa recorded an impairment charge of $301 to reduce the carrying value of the soft alloy extrusion business’ assets to their estimated fair value. In conjunction with the contribution of the soft alloy extrusion business to the joint venture, Alcoa recorded a $62 ($23 after-tax) reduction to the original impairment charge recorded in 2006. See Note I for additional information. </FONT></P></TD></ TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE style="MARGIN-TOP: -2px; PADDING-BOTTOM: 8px; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0> <TBODY> <TR> <TD width="5%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left width="2%"> <P style="VERTICAL-ALIGN: top; LINE-HEIGHT: 95%"><FONT face="Times New Roman" size=2>•</FONT></P></TD> <TD vAlign=top width="1%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left> <P style="VERTICAL-ALIGN: top; LINE-HEIGHT: 95%" align=left><FONT face="Times New Roman" size=2></FONT><FONT face="Times New Roman" size=1><SUP></SUP></FONT><FONT face="Times New Roman" size=2>Consolidation of selected operations within the global hard alloy extrusion production operations serving the aerospace, automotive and industrial products markets, resulting in charges of $7 for severance costs associated with the elimination of approximately 325 positions, primarily in the U.S. and Europe. </FONT></P></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>– Operations within the Flat-Rolled Products segment were affected by the following actions: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE style="MARGIN-TOP: -2px; PADDING-BOTTOM: 8px; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0> <TBODY> <TR> <TD width="5%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left width="2%"> <P style="VERTICAL-ALIGN: top; LINE-HEIGHT: 95%"><FONT face="Times New Roman" size=2>•</FONT></P></TD> <TD vAlign=top width="1%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left> <P style="VERTICAL-ALIGN: top; LINE-HEIGHT: 95%" align=left><FONT face="Times New Roman" size=2></FONT><FONT face="Times New Roman" size=1><SUP></SUP></FONT><FONT face="Times New Roman" size=2>Restructuring of the can sheet operations resulting in the elimination of approximately 320 positions, including the closure of the Swansea facility in the U.K. in the first quarter of 2007, resulting in charges of $33, comprised of $16 for severance costs and $17 for other exit costs, including accelerated depreciation. </FONT></P></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE style="MARGIN-TOP: -2px; PADDING-BOTTOM: 8px; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0> <TBODY> <TR> <TD width="5%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left width="2%"> <P style="VERTICAL-ALIGN: top; LINE-HEIGHT: 95%"><FONT face="Times New Roman" size=2>•</FONT></P></TD> <TD vAlign=top width="1%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left> <P style="VERTICAL-ALIGN: top; LINE-HEIGHT: 95%" align=left><FONT face="Times New Roman" size=2></FONT><FONT face="Times New Roman" size=1><SUP></SUP></FONT><FONT face="Times New Roman" size=2>Conversion of the temporarily-idled San Antonio, TX rolling mill into a temporary research and development facility serving Alcoa’s global flat-rolled products business, resulting in a $53 asset impairment charge as these assets have no alternative future uses. </FONT></P></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE style="MARGIN-TOP: -2px; PADDING-BOTTOM: 8px; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0> <TBODY> <TR> <TD width="5%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left width="2%"> <P style="VERTICAL-ALIGN: top; LINE-HEIGHT: 95%"><FONT face="Times New Roman" size=2>•</FONT></P></TD> <TD vAlign=top width="1%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left> <P style="VERTICAL-ALIGN: top; LINE-HEIGHT: 95%" align=left><FONT face="Times New Roman" size=2></FONT><FONT face="Times New Roman" size=1><SUP></SUP></FONT><FONT face="Times New Roman" size=2>Charges for asset impairments of $47 related to a global flat-rolled product asset portfolio review and rationalization. </FONT></P></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>– Reduction within the Primary Metals and Alumina segments’ operations by approximately 330 positions to further strengthen the company’s position on the global cost curve. This action resulted in charges of $44, consisting of $24 for asset impairments, $14 for severance costs and $6 for other exit costs. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>– Consolidation of selected operations within the Packaging and Consumer segment, resulting in the elimination of approximately 440 positions and charges of $19, consisting of $10 related to severance costs and $9 for other exit costs, consisting primarily of accelerated depreciation. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>– Restructuring at various other locations accounted for the remaining charges of $35, more than half of which are for severance costs related to approximately 400 layoffs and the remainder for asset impairments and other exit costs. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>As of December&nbsp;31, 2008, the terminations associated with the 2006 restructuring program were essentially complete. Cash payments of $9 and $37 were made against the 2006 program reserves in 2008 and 2007, respectively.</FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Alcoa does not include restructuring and other charges in the segment results. The pretax impact of allocating restructuring and other charges to the segment results would have been as follows: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="79%"></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="3%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2006</B></FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Alumina</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>89</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>4</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Primary Metals</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>94</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(2</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>26</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Flat-Rolled Products</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>289</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>56</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>139</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Engineered Products and Solutions</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>88</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>67</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Packaging and Consumer</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>45</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>189</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>15</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Segment total</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>605</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>310</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>184</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Corporate</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>334</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(42</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>323</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Total restructuring and other charges</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>939</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>268</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>507</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The remaining reserves are expected to be paid in cash during 2009, with the exception of approximately $90 to $95, which is expected to be paid over the next several years for ongoing site remediation work, special termination benefit payments, and lease termination costs. Activity and reserve balances for restructuring charges are as follows (the amounts in the table below include activity for the EES business because the related reserve balances are not included in liabilities of operations held for sale – see Note B for additional information): </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="70%"></TD> <TD vAlign=bottom width="8%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="8%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="8%"></TD> <TD></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align=center><FONT face="Times New Roman" size=2><B>Employee</B></FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align=center><FONT face="Times New Roman" size=2><B>termination&nbsp;and</B></FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 1px" align=center><FONT face="Times New Roman" size=2><B>severance&nbsp;costs</B></FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Other<BR>exit&nbsp;costs</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Total</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Reserve balances at December&nbsp;31,&nbsp;2005</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>121</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>38</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>159</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2><B>2006:</B></FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Cash payments</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(39</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(2</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(41</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Restructuring charges</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>100</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>16</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>116</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Other*</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(29</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(12</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(41</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Reserve balances at December&nbsp;31,&nbsp;2006</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>153</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>40</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>193</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2><B>2007:</B></FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Cash payments</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(101</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(13</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(114</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Restructuring charges</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>88</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>22</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>110</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Other*</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(25</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(7</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(32</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Reserve balances at December&nbsp;31,&nbsp;2007</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>115</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>42</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>157</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2><B>2008:</B></FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Cash payments</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(91</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(19</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(110</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Restructuring charges</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>236</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>65</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>301</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Other*</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(9</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(11</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(20</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Reserve balances at December&nbsp;31,&nbsp;2008</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>251</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>77</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>328</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0> <TBODY> <TR> <TD vAlign=top align=left width="1%"><FONT face="Times New Roman" size=2>*</FONT></TD> <TD vAlign=top align=left><FONT face="Times New Roman" size=2>Other includes reversals of previously recorded restructuring charges. </FONT></TD></TR></TBODY></TABLE> 26901000000 <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Y. Subsequent Event </B></FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>On February&nbsp;5, 2009, Alumínio borrowed a total of $120 in new loans with a weighted-average interest rate of 5.13% and a weighted-average maturity of 322 days from four financial institutions. The purpose of the new borrowings is to support Alumínio’s export operations. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>On February&nbsp;10, 2009, Standard and Poor’s Ratings Services (S&amp;P) changed its long-term debt rating of Alcoa from BBB+ to BBB- and its short-term debt rating from A-2 to A-3. S&amp;P’s rating report stated that the changes in Alcoa’s ratings reflect uncertainties regarding the length and depth of the ongoing economic downturn; expectations of a long, slow economic recovery; S&amp;P’s belief that Alcoa’s credit metrics will deteriorate significantly during 2009; and S&amp;P’s concerns regarding Alcoa’s liquidity position. S&amp;P removed all ratings from negative creditwatch; however, the current outlook remains negative based on expected weak earnings in 2009 and weak credit metrics based on the new S&amp;P ratings. The report further stated that the S&amp;P ratings reflect Alcoa’s strong business position as one of the largest integrated aluminum producers in the world, with broad product, business, and geographic diversity and efficient alumina operations. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>On February&nbsp;12, 2009, Alcoa and the Aluminum Corporation of China (Chinalco) entered into an agreement in which Chinalco will redeem the Note issued by SPPL. Alcoa will receive $1,021 in cash in three installments over a six-month period ending July&nbsp;31, 2009. As a result of this transaction, Alcoa will recognize a non-cash after-tax loss of approximately $120 related to its investment in SPPL. This transaction will also result in the reversal of the unrealized loss recognized in accumulated other comprehensive income through the transaction date (see Note I for additional information). </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>On February&nbsp;13, 2009, Moody’s Investors Service (Moody’s) changed its long-term debt rating of Alcoa from Baa1 to Baa3 and its short-term debt rating from Prime-2 to Prime-3. Moody’s rating report stated that the changes in Alcoa’s ratings reflect the relatively weak debt protection measures, increased debt levels and leverage ratios, and negative cash flow position of Alcoa going into a major economic downturn. Moody’s removed all ratings from negative creditwatch and the current outlook was changed from negative to stable. The change in the outlook was based on Moody’s view that Alcoa will be able to materially reduce short-term debt outstanding due to the monetization of Alcoa’s investment in SPPL (see above), the anticipation that Alcoa will continue to focus on reducing cash consumption, and that liquidity will remain comfortably above requirements. &l t;/FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>On February&nbsp;13, 2009, Fitch Ratings (Fitch) changed its long-term debt rating of Alcoa from BBB to BBB- and its short-term debt rating from F2 to F3. Fitch’s rating report stated that the changes in Alcoa’s ratings reflect lower earnings coupled with higher than expected debt levels resulting in higher financial leverage. Fitch also changed the current outlook from stable to negative. The report further stated that the Fitch ratings reflect Alcoa’s leading position in the industry, its strength in low-cost alumina production, and the operating flexibility afforded by the scope of the Company’s operations. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Through February&nbsp;13, 2009, Alcoa has borrowed approximately $1,100 under RCA-3 (364-day revolving credit facility—see Note K for additional information), while reducing its outstanding commercial paper as of December 31, 2008 by approximately $900.</FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Q. Segment and Geographic Area Information </B></FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In 2008, management approved a realignment of Alcoa’s reportable segments to better reflect the core businesses in which Alcoa operates and how it is managed. This realignment consisted of eliminating the Extruded and End Products segment and realigning its component businesses as follows: the building and construction systems business is reported in the Engineered Products and Solutions segment; the hard alloy extrusions business and the Russian extrusions business are reported in the Flat-Rolled Products segment; and the remaining segment components, consisting primarily of the equity investment/income of Alcoa’s interest in the Sapa AB joint venture, and the Latin American extrusions business, are reported in Corporate. Additionally, the Russian forgings business was moved from the Engineered Products and Solutions segment to the Flat-Rolled Products segment, where all Russian operations are now r eported. Prior period amounts were reclassified to reflect the new segment structure. Also, the Engineered Solutions segment was renamed the Engineered Products and Solutions segment. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Alcoa is primarily a producer of aluminum products. Aluminum and alumina represent more than three-fourths of Alcoa’s revenues. Nonaluminum products include precision castings and aerospace and industrial fasteners. Alcoa’s segments are organized by product on a worldwide basis. Segment performance under Alcoa’s management reporting system is evaluated based on a number of factors; however, the primary measure of performance is the after-tax operating income (ATOI) of each segment. Certain items such as the impact of LIFO inventory accounting; interest income and expense; minority interests; corporate expense (general administrative and selling expenses of operating the corporate headquarters and other global administrative facilities, along with depreciation and amortization on corporate-owned assets); restructuring and other charges; discontinued operations; and other items, including inters egment profit and other metal adjustments, differences between tax rates used in the segments and the corporate effective tax rate, and other nonoperating items such as foreign currency translation gains/losses are excluded from segment ATOI. Segment assets exclude, among others, cash and cash equivalents, deferred income taxes, goodwill allocated to corporate, corporate fixed assets, LIFO reserves, and assets held for sale. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The accounting policies of the segments are the same as those described in the Summary of Significant Accounting Policies (see Note A). Transactions among segments are established based on negotiation among the parties. Differences between segment totals and Alcoa’s consolidated totals for line items not reconciled are in Corporate. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Alcoa’s products are used worldwide in packaging, transportation (including aerospace, automotive, truck, trailer, rail, and shipping), building and construction, oil and gas, defense, and industrial applications. Total export sales from the U.S. included in continuing operations were $2,732 in 2008, $3,060 in 2007, and $2,517 in 2006. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Alcoa’s reportable segments are as follows: </FONT></P> <P style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Alumina.</B> This segment consists of Alcoa’s worldwide alumina system, including the mining of bauxite, which is then refined into alumina. Alumina is sold directly to internal and external smelter customers worldwide or is processed into </FONT><FONT face="Times New Roman" size=2>industrial chemical products. Slightly more than half of Alcoa’s alumina production is sold under supply contracts to third parties worldwide, while the remainder is used internally. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Primary Metals.</B> This segment consists of Alcoa’s worldwide smelter system. Primary Metals receives alumina, primarily from the Alumina segment, and produces primary aluminum used by Alcoa’s fabricating businesses, as well as sold to external customers, aluminum traders, and commodity markets. Results from the sale of aluminum powder, scrap, and excess power are also included in this segment, as well as the results of aluminum derivative contracts. Primary aluminum produced by Alcoa and used internally is transferred to other segments at prevailing market prices. The sale of primary aluminum represents more than 90% of this segment’s third-party sales. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Flat-Rolled Products.</B> This segment’s principal business is the production and sale of aluminum plate, sheet, foil, and hard alloy extrusions. This segment includes rigid container sheet (RCS), which is sold directly to customers in the packaging and consumer market and is used to produce aluminum beverage cans. Seasonal increases in RCS sales are generally experienced in the second and third quarters of the year. This segment also includes sheet and plate used in the transportation, building and construction, and distribution markets (mainly used in the production of machinery and equipment and consumer durables), which is sold directly to customers and through distributors. Additionally, hard alloy extrusions products, which are also sold directly to customers and through distributors, serve the distribution, aerospace, automotive, and commercial transportation markets. Approximately one - -third of the third-party sales in this segment consist of RCS, while the remaining two-thirds of third-party sales are derived from sheet and plate, foil used in industrial markets, and hard alloy extrusions. While the customer base for flat-rolled products is large, a significant amount of sales of RCS, sheet, and plate is to a relatively small number of customers. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Engineered Products and Solutions.</B> This segment includes titanium, aluminum, and super alloy investment castings; forgings and fasteners; aluminum wheels; integrated aluminum structural systems; and architectural extrusions used in the aerospace, automotive, building and construction, commercial transportation, and power generation markets. These products are sold directly to customers and through distributors. The Electrical and Electronic Solutions business was classified as discontinued operations; therefore, all periods presented exclude the results of this business. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; PADDING-BOTTOM: 3px; VERTICAL-ALIGN: top; LINE-HEIGHT: 95%"><FONT face="Times New Roman" size=2><B>Packaging and Consumer.</B> The businesses within this segment were sold to Rank in 2008; therefore, this segment no longer contains any operations (see Note F for additional information). Prior to the sale of these businesses, this segment included consumer, foodservice, and flexible packaging products; food and beverage closures; and plastic sheet and film for the packaging industry. The principal products in this segment included aluminum foil; plastic wraps and bags; plastic beverage and food closures; flexible packaging products; thermoformed plastic containers; and extruded plastic sheet and film. Consumer products were marketed under brands including Reynolds Wrap<FONT face="Times New Roman" size=1><SUP>®</SUP></FONT>, Diamond<FONT face="Times New Roman" size=1><SUP>®</SUP></FONT >, Baco<FONT face="Times New Roman" size=1><SUP>®</SUP></FONT>, and Cut-Rite<FONT face="Times New Roman" size=1><SUP>®</SUP></FONT>. Seasonal increases generally occurred in the second and fourth quarters of the year for such products as consumer foil and plastic wraps and bags, while seasonal slowdowns for closures generally occurred in the fourth quarter of the year. Products were generally sold directly to customers, consisting of supermarkets, beverage companies, food processors, retail chains, and commercial foodservice distributors. </FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Alcoa’s reportable segments, reclassified to exclude discontinued operations and assets held for sale (see Note B for additional information), are as follows: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="43%"></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Alumina</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align=center><FONT face="Times New Roman" size=2><B>Primary</B></FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 1px" align=center><FONT face="Times New Roman" size=2><B>Metals</B></FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align=center><FONT face="Times New Roman" size=2><B>Flat-<BR>Rolled</B></FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 1px" align=center><FONT face="Times New Roman" size=2><B>Products</B></FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Engineered<BR>Products&nbsp;and<BR>Solutions</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Packaging<BR>and<BR>Consumer</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Total</B></FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2><B>2008</B></FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Sales:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Third-party sales</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,924</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>8,021</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>9,563</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>5,602</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>516</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>26,626</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Intersegment sales</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,803</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,927</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>249</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>6,979</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Total sales</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>5,727</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>11,948</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>9,812</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>5,602</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>516</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>33,605</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Profit and loss:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Equity income</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>7</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>2</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>9</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Depreciation, depletion, and amortization</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>268</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>503</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>232</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>149</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,152</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Income taxes</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>277</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>172</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>49</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>209</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>10</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>717</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>ATOI</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>727</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>931</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>27</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>503</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>11</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,199</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Assets:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Capital expenditures</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,589</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>858</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>597</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>180</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,224</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Equity investments</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>285</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>900</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,185</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Goodwill</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>15</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>931</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>232</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,445</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,623</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Total assets</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>7,800</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>11,684</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>5,535</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>4,664</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>29,683</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2><B>2007</B></FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Sales:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Third-party sales</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,709</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>6,576</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>9,932</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>5,251</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,288</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>27,756</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Intersegment sales</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,448</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>4,994</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>283</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>7,725</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Total sales</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>5,157</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>11,570</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>10,215</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>5,251</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,288</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>35,481</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Profit and loss:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Equity income</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>57</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>58</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Depreciation, depletion, and amortization</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>267</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>410</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>244</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>146</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>89</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,156</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Income taxes</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>340</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>542</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>107</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>177</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>68</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,234</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>ATOI</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>956</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,445</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>204</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>409</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>148</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,162</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Assets:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Capital expenditures</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,207</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,313</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>568</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>164</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,252</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Equity investments</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>292</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>835</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,127</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Goodwill</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>17</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>938</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>226</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,267</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,448</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Total assets</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>6,875</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>11,858</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>5,759</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>5,274</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>29,766</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2><B>2006</B></FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Sales:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Third-party sales</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,785</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>6,171</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>8,995</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>4,877</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,235</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>26,063</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Intersegment sales</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,144</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>6,208</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>253</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>8,605</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Total sales</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>4,929</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>12,379</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>9,248</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>4,877</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,235</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>34,668</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Profit and loss:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Equity (loss) income</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(2</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>82</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(2</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(6</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>73</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Depreciation, depletion, and amortization</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>192</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>395</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>240</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>135</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>124</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,086</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Income taxes</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>428</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>726</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>64</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>146</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>33</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,397</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>ATOI</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,050</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,760</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>244</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>356</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>95</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,505</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Assets:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Capital expenditures</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>837</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,440</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>428</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>112</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,817</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Equity investments</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>238</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>568</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>806</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Goodwill</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>16</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>930</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>222</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,242</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,410</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Total assets</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>5,250</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>10,530</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>5,640</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>5,202</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>26,622</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The following tables reconcile certain segment information to consolidated totals: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="71%"></TD> <TD vAlign=bottom width="6%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2006</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Sales:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Total sales</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>33,605</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>35,481</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>34,668</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Elimination of intersegment sales</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(6,979</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(7,725</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(8,605</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Corporate*</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>275</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,524</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,887</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Consolidated sales</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>26,901</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>29,280</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>28,950</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0> <TBODY> <TR> <TD vAlign=top align=left width="1%"><FONT face="Times New Roman" size=2>*</FONT></TD> <TD vAlign=top align=left><FONT face="Times New Roman" size=2>For all periods presented, the Corporate amount includes third-party sales of the three soft alloy extrusion facilities located in Brazil that were not contributed to the Sapa AB joint venture. In 2007 and 2006, the Corporate amount also includes the third-party sales of the soft alloy extrusion business that was contributed to the Sapa AB joint venture (see Note I for additional information). </FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="71%"></TD> <TD vAlign=bottom width="6%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD> <TD></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-TOP: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Net (loss) income:</FONT></P></TD> <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Total segment ATOI</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,199</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,162</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,505</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Unallocated amounts (net of tax):</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Impact of LIFO</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(7</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(24</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(170</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Interest income</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>35</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>40</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>58</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Interest expense</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(265</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(261</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(250</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Minority interests</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(221</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(365</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(436</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Corporate expense</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(328</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(388</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(317</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Restructuring and other charges</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(693</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(201</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(347</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Discontinued operations</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(303</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(250</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>22</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Other</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(491</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>851</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>183</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 7em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Consolidated net (loss) income</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(74</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,564</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,248</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Assets:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Total segment assets</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>29,683</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>29,766</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>26,622</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Elimination of intersegment receivables</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(355</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(640</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(727</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Unallocated amounts:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Cash and cash equivalents</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>762</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>483</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>506</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Deferred income taxes</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,929</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,880</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,241</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Corporate goodwill</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,358</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,351</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,337</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Corporate fixed assets</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>779</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>956</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>791</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>LIFO reserve</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(1,078</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(1,069</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(1,028</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Assets held for sale</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>247</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,826</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>5,349</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Other</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,497</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,250</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,058</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 7em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Consolidated assets</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>37,822</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>38,803</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>37,149</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Geographic information for revenues, which is based upon the country where the point of sale occurred, is as follows: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="70%"></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2006</B></FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Revenues:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>U.S.</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>14,335</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>16,124</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>16,447</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Australia</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,228</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,224</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,160</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Spain</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,733</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,844</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,813</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Brazil</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,287</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,213</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,068</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Netherlands</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,263</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>595</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>560</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Hungary</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>940</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,321</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,147</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>France</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>854</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>779</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>663</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Italy</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>674</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>767</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>762</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Russia</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>597</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>583</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>363</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>United Kingdom</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>576</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>730</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>956</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Germany</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>403</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>463</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>413</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Other</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,011</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,637</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,598</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>26,901</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>29,280</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>28,950</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Geographic information for long-lived assets, which is based upon the physical location of the assets, is as follows: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="80%"></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Long-lived assets:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>U.S.</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>5,007</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>4,595</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Brazil</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3,373</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,238</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Australia</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,328</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,868</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Iceland</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,747</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,776</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Canada</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,586</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,701</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Russia</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>601</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>477</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Spain</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>542</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>488</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Jamaica</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>468</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>541</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Norway</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>454</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>582</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>China</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>396</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>267</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Other</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>953</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,008</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>17,455</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>16,541</FONT></TD></TR></TBODY></TABLE> 1167000000 94000000 178000000 <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>U. Accounts Receivable Securitizations </B></FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In November 2007, Alcoa entered into a program to sell a senior undivided interest in certain customer receivables, without recourse, on a continuous basis to a third-party for cash. In August 2008, Alcoa increased the capacity of this program from $100 to $250. As of December&nbsp;31, 2008 and 2007, Alcoa received $250 and $100, respectively, in cash proceeds, which reduced Receivables from customers on the accompanying Consolidated Balance Sheet. Alcoa services the customer receivables for the third-party at market rates; therefore, no servicing asset or liability was recorded. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Alcoa had an existing program with a different third-party to sell certain customer receivables. The sale of receivables under this program was conducted through a qualifying special purpose entity (QSPE) that was bankruptcy remote, and, therefore, was not consolidated by Alcoa. Effective August&nbsp;31, 2008, Alcoa terminated this program and all outstanding accounts receivable were collected by the QSPE through the end of 2008. As of December&nbsp;31, 2007, Alcoa sold trade receivables of $139 to the QSPE. </FONT></P> 1082000000 <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>S. Earnings Per Share </B></FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Basic earnings per common share (EPS) amounts are computed by dividing earnings after the deduction of preferred stock dividends by the average number of common shares outstanding. Diluted EPS amounts assume the issuance of common stock for all potentially dilutive share equivalents outstanding. </FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The information used to compute basic and diluted EPS on income from continuing operations is as follows (shares in millions): </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="74%"></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2006</B></FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Income from continuing operations</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>229</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,814</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,226</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Less: preferred stock dividends</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Income from continuing operations available to common shareholders</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>227</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,812</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,224</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Average shares outstanding—basic</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>810</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>861</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>869</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Effect of dilutive securities:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Potential shares of common stock, attributable to stock options, stock awards, and performance awards </FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>8</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>8</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>6</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Average shares outstanding—diluted</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>818</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>869</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>875</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Options to purchase 46&nbsp;million, 21&nbsp;million, and 59&nbsp;million shares of common stock at a weighted average exercise price of $35.65, $41.52, and $37.03 per share were outstanding as of December&nbsp;31, 2008, 2007, and 2006, respectively, but were not included in the computation of diluted EPS because they were anti-dilutive, as the exercise prices of the options were greater than the average market price of Alcoa’s common stock. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>V. Interest Cost Components </B></FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="78%"></TD> <TD vAlign=bottom width="3%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2006</B></FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Amount charged to expense</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>407</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>401</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>384</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Amount capitalized</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>167</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>199</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>128</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>574</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>600</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>512</FONT></TD></TR></TBODY></TABLE> 28000000 1234000000 450000000 -16000000 2710000000 -96000000 26109000000 <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>J. Other Assets </B></FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="82%"></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2><B>December&nbsp;31,</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Intangibles, net (E)</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>610</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>602</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Prepaid pension benefit (W)</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>122</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>216</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Prepaid gas transmission contract</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>217</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>261</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Cash surrender value of life insurance</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>394</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>470</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Deferred charges and other</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,043</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>889</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,386</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2,438</FONT></TD></TR></TBODY></TABLE> 94000000 3.75 <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>X. Derivatives and Other Financial Instruments </B></FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Derivatives.</B> Alcoa uses derivative financial instruments for purposes other than trading. Fair value (losses) gains of outstanding derivative contracts were as follows: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="86%"></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Aluminum*</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(632</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(896</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Interest rates*</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>70</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>5</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Other commodities, principally energy related</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(34</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(30</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Currencies</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>65</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0> <TBODY> <TR> <TD vAlign=top align=left width="1%"><FONT face="Times New Roman" size=2>*</FONT></TD> <TD vAlign=top align=left><FONT face="Times New Roman" size=2>Aluminum reflects $119 of cash collateral paid that Alcoa elected to net against the fair value amounts recognized for certain derivative instruments executed with the same counterparties under master netting arrangements. Interest rates reflect $67 of cash collateral held that Alcoa elected to net against the fair value amounts recognized for certain derivative instruments executed with the same counterparties under master netting arrangements. These elections were made under the provisions of FSP FIN 39-1, which was adopted by Alcoa on January&nbsp;1, 2008 (see Recently Adopted Accounting Standards in Note A). There was no cash collateral held or posted as of December&nbsp;31, 2007. </FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Aluminum consists primarily of losses on hedge contracts, embedded derivatives in power contracts in Iceland and Brazil, and Alcoa’s share of gains and losses on hedge contracts of Norwegian smelters that are accounted for under the equity method. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Fair Value Hedges </B></FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B><I>Aluminum.</I></B> Customers often require Alcoa to enter into long-term, fixed-price commitments. These commitments expose Alcoa to the risk of higher aluminum prices between the time the order is committed and the time that the order is shipped. Alcoa’s aluminum commodity risk management policy is to manage, principally through the use of futures and options contracts, the aluminum price risk associated with a portion of its firm commitments. These contracts cover known exposures, generally within two years. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B><I>Interest Rates</I></B><I>.</I> Alcoa uses interest rate swaps to help maintain a strategic balance between fixed- and floating-rate debt and to manage overall financing costs. As of December&nbsp;31, 2008, the company had pay floating, receive fixed interest rate swaps that were designated as fair value hedges. These hedges effectively convert the interest rate from fixed to floating on $1,890 of debt through 2018 (see Note K for additional information). </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B><I>Currencies.</I></B> Alcoa uses cross-currency interest rate swaps that effectively convert its U.S. dollar denominated debt into Brazilian real debt at local interest rates. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>There were no significant transactions that ceased to qualify as a fair value hedge in 2008 and 2007. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Cash Flow Hedges </B></FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B><I>Commodities.</I></B> Alcoa anticipates the continued requirement to purchase aluminum and other commodities such as natural gas, fuel oil, and electricity for its operations. Alcoa enters into futures and forward contracts to reduce volatility in the price of these commodities. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B><I>Interest Rates.</I></B> There were no cash flow hedges of interest rate exposures outstanding as of December&nbsp;31, 2008 and 2007. </FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B><I></I></B></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B><I>Currencies.</I></B> Alcoa is subject to exposure from fluctuations in foreign currency exchange rates. Foreign currency exchange contracts may be used from time to time to hedge the variability in cash flows from the forecasted payment or receipt of currencies other than the functional currency. These contracts cover periods consistent with known or expected exposures through 2009. The U.S. dollar notional amount of all foreign currency exchange contracts was $59 as of December&nbsp;31, 2007. These contracts were hedging foreign currency exposure in Brazil. No such contracts were outstanding as of December&nbsp;31, 2008. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Other </B></FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Alcoa has also entered into certain derivatives to minimize its price risk related to other customer sales and pricing arrangements. Alcoa has not qualified these contracts for hedge accounting treatment and therefore, the fair value gains and losses on these contracts are recorded in earnings. The impact to earnings was a gain of $10 in 2008, a loss of $12 in 2007, and a gain of $37 in 2006. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Alcoa has entered into power supply and other contracts that contain pricing provisions related to the London Metal Exchange (LME) aluminum price. The LME-linked pricing features are considered embedded derivatives. A majority of these embedded derivatives have been designated as cash flow hedges of future sales of aluminum. Gains and losses on the remainder of these embedded derivatives are recognized in earnings. The impact to earnings was a gain of $56 in 2008, and a loss of $25 in 2007 and $38 in 2006. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Material Limitations </B></FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The disclosures with respect to commodity prices, interest rates, and foreign currency exchange risk do not take into account the underlying commitments or anticipated transactions. If the underlying items were included in the analysis, the gains or losses on the futures contracts would be offset. Actual results will be determined by a number of factors that are not under Alcoa’s control and could vary significantly from those factors disclosed. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Alcoa is exposed to credit loss in the event of nonperformance by counterparties on the above instruments, as well as credit or performance risk with respect to its hedged customers’ commitments. Although nonperformance is possible, Alcoa does not anticipate nonperformance by any of these parties. Contracts are with creditworthy counterparties and are further supported by cash, treasury bills, or irrevocable letters of credit issued by carefully chosen banks. In addition, various master netting arrangements are in place with counterparties to facilitate settlement of gains and losses on these contracts. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>See Notes A and K for additional information on Alcoa’s hedging and derivatives activities. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Other Financial Instruments.</B> The carrying values and fair values of Alcoa’s financial instruments are as follows: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="68%"></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=5><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=5><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2><B>December&nbsp;31,</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Carrying<BR>value</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Fair<BR>value</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Carrying<BR>value</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Fair<BR>value</B></FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Cash and cash equivalents</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>762</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>762</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>483</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>483</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Noncurrent receivables</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>14</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>14</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>90</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>90</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Available-for-sale investments</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>27</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>27</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>81</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>81</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Long-term debt due within one year</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>56</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>56</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>202</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>202</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Short-term borrowings</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>478</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>478</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>563</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>563</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Commercial paper</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,535</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,535</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>856</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>856</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Long-term debt</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>8,509</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>7,345</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>6,371</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>6,277</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The methods used to estimate the fair values of certain financial instruments follow. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B><I>Cash and Cash Equivalents, Long-Term Debt Due Within One Year, Short-Term Borrowings, and Commercial Paper.</I></B> The carrying amounts approximate fair value because of the short maturity of the instruments. </FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B><I></I></B></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B><I>Noncurrent Receivables.</I></B> The fair value of noncurrent receivables is based on anticipated cash flows which approximates carrying value. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B><I>Available-for-Sale Investments.</I></B> The fair value of such investments is based on readily available market values. Investments in marketable equity securities are classified as “available-for-sale” and are carried at fair value. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B><I>Long-Term Debt.</I></B> The fair value is based on interest rates that are currently available to Alcoa for issuance of debt with similar terms and remaining maturities. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>R. Preferred and Common Stock </B></FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Preferred Stock.</B> Alcoa has two classes of preferred stock. Serial preferred stock has 660,000 shares authorized at a par value of $100 per share with an annual $3.75 cumulative dividend preference per share. There were 546,024 of such shares outstanding at December&nbsp;31, 2008 and 2007. Class B serial preferred stock has 10&nbsp;million shares authorized (none issued) and a par value of $1 per share. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Common Stock.</B> There are 1.8 billion shares authorized at a par value of $1 per share, and 924,574,538 shares were issued at December&nbsp;31, 2008 and 2007. As of December&nbsp;31, 2008, 92&nbsp;million shares of common stock were reserved for issuance under Alcoa’s stock-based compensation plans. Alcoa issues treasury shares upon the exercise of stock options and the conversion of stock awards. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In October 2007, Alcoa’s Board of Directors approved a new share repurchase program. The new program authorizes the purchase of up to 25% (or approximately 217&nbsp;million shares) of the outstanding common stock of Alcoa at December&nbsp;31, 2006, in the open market or though privately negotiated transactions, directly or through brokers or agents, and expires on December&nbsp;31, 2010. This new program superseded the share repurchase program that was approved by Alcoa’s Board of Directors in January 2007, which authorized the repurchase of up to 87&nbsp;million shares of Alcoa common stock. The shares repurchased under the January 2007 program count against the shares authorized for repurchase under the new program. During 2008 and 2007, Alcoa repurchased 33&nbsp;million and 68&nbsp;million shares (including 43&nbsp;million shares under the January 2007 program), respect ively. In October 2008, Alcoa elected to temporarily suspend share repurchases to preserve liquidity in light of the global economic downturn. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Share Activity </B>(number of shares)<B> </B></FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="72%"></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="3%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=4><FONT face="Times New Roman" size=2><B>Common stock</B></FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle><FONT face="Times New Roman" size=2><B>Treasury</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle><FONT face="Times New Roman" size=2><B>Outstanding</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2><B>Balance at end of 2005</B></FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(54,306,025</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>870,268,513</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Treasury shares purchased</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(9,100,000</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(9,100,000</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Stock issued:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Compensation plans</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>6,571,031</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>6,571,031</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2><B>Balance at end of 2006</B></FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(56,834,994</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>867,739,544</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Treasury shares purchased</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(67,712,689</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(67,712,689</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Stock issued:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Compensation plans</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>27,374,945</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>27,374,945</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2><B>Balance at end of 2007</B></FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(97,172,738</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>827,401,800</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Treasury shares purchased</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(33,421,626</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(33,421,626</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Stock issued:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Compensation plans</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>6,337,194</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>6,337,194</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2><B>Balance at end of 2008</B></FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>(124,257,170</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>800,317,368</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Stock options under Alcoa’s stock-based compensation plans have been granted at not less than market prices on the dates of grant. Beginning in 2006, performance stock options were granted to certain individuals. The final number of options granted is based on the outcome of Alcoa’s annual return on capital results against the results of a comparator group of companies. However, an individual can earn a minimum number of options if Alcoa’s return on capital meets or exceeds its cost of capital. Stock option features based on date of original grant are as follows: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="56%"></TD> <TD vAlign=bottom width="1%"></TD> <TD width="12%"></TD> <TD vAlign=bottom width="1%"></TD> <TD width="7%"></TD> <TD vAlign=bottom width="1%"></TD> <TD width="22%"></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Date of</B></FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 1px"><FONT face="Times New Roman" size=2><B>original grant</B></FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle><FONT face="Times New Roman" size=2><B>Vesting</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle><FONT face="Times New Roman" size=2><B>Term</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle><FONT face="Times New Roman" size=2><B>Reload&nbsp;feature</B></FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>2002 and prior</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=top noWrap align=right><FONT face="Times New Roman" size=2>One&nbsp;year</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=top noWrap align=right><FONT face="Times New Roman" size=2>10&nbsp;years</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=top noWrap align=right> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align=right><FONT face="Times New Roman" size=2>One reload</FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 1px" align=right><FONT face="Times New Roman" size=2>over&nbsp;option&nbsp;term</FONT></P></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>2003</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=top noWrap align=right> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align=right><FONT face="Times New Roman" size=2>3 years</FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 1px" align=right><FONT face="Times New Roman" size=2>(1/3&nbsp;each&nbsp;year)</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=top noWrap align=right><FONT face="Times New Roman" size=2>10 years</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=top noWrap align=right> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align=right><FONT face="Times New Roman" size=2>One&nbsp;reload&nbsp;in&nbsp;2004&nbsp;for&nbsp;1/3</FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align=right><FONT face="Times New Roman" size=2>vesting in</FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 1px" align=right><FONT face="Times New Roman" size=2>2004</FONT></P></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>2004 and forward</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top noWrap align=right> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align=right><FONT face="Times New Roman" size=2>3 years</FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 1px" align=right><FONT face="Times New Roman" size=2>(1/3 each year)</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top noWrap align=right><FONT face="Times New Roman" size=2>6 years</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top noWrap align=right><FONT face="Times New Roman" size=2>None</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In addition to the stock options described above, Alcoa granted stock awards that vest in three years from the date of grant. Certain of these stock awards were granted with the same performance conditions described above for performance stock options. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Beginning in 2006, plan participants can choose whether to receive their award in the form of stock options, stock awards, or a combination of both. This choice is made before the grant is issued and is irrevocable. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The following table summarizes the total compensation expense recognized for all stock options and stock awards (there was no stock-based compensation expense capitalized in 2008, 2007, or 2006): </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="79%"></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2006</B></FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Compensation expense reported in income:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Stock option grants</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>15</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>31</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>11</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Stock award grants</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>79</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>66</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>61</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Total compensation expense before income taxes</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>94</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>97</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>72</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Income tax benefit</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>31</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>34</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>24</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Total compensation expense, net of income tax benefit</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>63</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>63</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>48</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The fair value of each new option is estimated on the date of grant using a lattice-pricing model with the following assumptions: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="65%"></TD> <TD vAlign=bottom width="11%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="9%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="9%"></TD> <TD></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2006</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Weighted average fair value per option</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom noWrap align=right><FONT face="Times New Roman" size=2>6.41</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom noWrap align=right><FONT face="Times New Roman" size=2>6.04</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom noWrap align=right><FONT face="Times New Roman" size=2>5.98</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Average risk-free interest rate</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom noWrap align=right><FONT face="Times New Roman" size=2>3.01-3.66</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom noWrap align=right><FONT face="Times New Roman" size=2>4.75-5.16</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom noWrap align=right><FONT face="Times New Roman" size=2>4.42-4.43</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Dividend yield</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom noWrap align=right><FONT face="Times New Roman" size=2>2.1</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom noWrap align=right><FONT face="Times New Roman" size=2>2.2</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom noWrap align=right><FONT face="Times New Roman" size=2>2.0</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Volatility</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom noWrap align=right><FONT face="Times New Roman" size=2>31-34</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom noWrap align=right><FONT face="Times New Roman" size=2>22-29</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom noWrap align=right><FONT face="Times New Roman" size=2>27-32</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Annual forfeiture rate</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom noWrap align=right><FONT face="Times New Roman" size=2>3</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom noWrap align=right><FONT face="Times New Roman" size=2>3</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom noWrap align=right><FONT face="Times New Roman" size=2>3</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Exercise behavior</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom noWrap align=right><FONT face="Times New Roman" size=2>39</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom noWrap align=right><FONT face="Times New Roman" size=2>35</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom noWrap align=right><FONT face="Times New Roman" size=2>23</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>%</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Life (years)</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=right><FONT face="Times New Roman" size=2>4.0</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=right><FONT face="Times New Roman" size=2>3.8</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap align=right><FONT face="Times New Roman" size=2>3.6</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The fair value of each reload option grant is estimated on the reload date using the lattice-pricing model. In 2007, the weighted average fair value per reload option grant was $5.56 based on the following assumptions: an average risk-free interest rate of 4.94-5.11%; dividend yield of 2.2%; volatility of 22-24%; exercise behavior of 26%; and life of 1.5 years. In 2008 and 2006, the fair value and related assumptions for reload option grants were the same as the new option grants reflected in the table above. </FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The following assumption descriptions are applicable to both new option grants and reload option grants. The range of average risk-free interest rates is based on a yield curve of interest rates at the time of the grant based on the contractual life of the option. Dividend yield is based on a five-year average. Volatility is based on historical and implied volatilities over the term of the option. Alcoa utilizes historical option exercise and forfeiture data to estimate annual pre- and post-vesting forfeitures. The exercise behavior assumption represents a weighted average exercise ratio of the intrinsic value resulting from historical employee exercise behavior, which is based on exercise patterns for grants issued in the most recent six years. The life of an option is an output of the lattice-pricing model based upon the other assumptions used in the determination of the fair value. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The activity for stock options is as follows (options in millions): </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="74%"></TD> <TD vAlign=bottom width="6%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="4%"></TD> <TD></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2006</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Outstanding, beginning of year:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Number of options</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>52.3</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>80.0</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>88.6</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Weighted average exercise price</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>35.63</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>33.97</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>33.50</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD height=8></TD> <TD colSpan=4 height=8></TD> <TD colSpan=4 height=8></TD> <TD colSpan=4 height=8></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Granted:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Number of options</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>2.9</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>6.1</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3.2</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Weighted average exercise price</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>31.20</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>41.14</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>29.15</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD height=8></TD> <TD colSpan=4 height=8></TD> <TD colSpan=4 height=8></TD> <TD colSpan=4 height=8></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Exercised:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Number of options</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(6.0</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(28.8</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(6.8</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Weighted average exercise price</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>32.68</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>31.88</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>23.82</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD height=8></TD> <TD colSpan=4 height=8></TD> <TD colSpan=4 height=8></TD> <TD colSpan=4 height=8></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Expired or forfeited:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Number of options</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(3.0</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(5.0</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(5.0</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Weighted average exercise price</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>37.64</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>37.19</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>35.99</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD height=8></TD> <TD colSpan=4 height=8></TD> <TD colSpan=4 height=8></TD> <TD colSpan=4 height=8></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Outstanding, end of year:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Number of options</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>46.2</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>52.3</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>80.0</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Weighted average exercise price</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>35.61</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>35.63</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>33.97</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD height=8></TD> <TD colSpan=4 height=8></TD> <TD colSpan=4 height=8></TD> <TD colSpan=4 height=8></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Exercisable, end of year:</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD> <TD vAlign=bottom></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Number of options</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>42.3</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>44.9</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>77.0</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Weighted average exercise price</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>36.19</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>35.16</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>34.17</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The total intrinsic value of options exercised during the years ended December&nbsp;31, 2008, 2007, and 2006 was $86, $269, and $61, respectively. The cash received from exercises for the year ended December&nbsp;31, 2008 was $177, and the tax benefit realized was $20. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The following tables summarize certain stock option information at December&nbsp;31, 2008 (options and intrinsic value in millions): </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Options Fully Vested and/or Expected to Vest* </B></FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="61%"></TD> <TD vAlign=bottom width="7%"></TD> <TD></TD> <TD vAlign=bottom width="7%"></TD> <TD></TD> <TD vAlign=bottom width="7%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="7%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Range of</B></FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 1px"><FONT face="Times New Roman" size=2><B>exercise price</B></FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle><FONT face="Times New Roman" size=2><B>Number</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align=center><FONT face="Times New Roman" size=2><B>Weighted<BR>average</B></FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 1px" align=center><FONT face="Times New Roman" size=2><B>remaining<BR>contractual<BR>life</B></FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Weighted<BR>average<BR>exercise<BR>price</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Intrinsic<BR>Value</B></FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>$9.91&nbsp;- $19.93</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.1</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>4.16</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>13.19</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>$19.94&nbsp;- $27.71</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3.5</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3.37</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>22.39</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>$27.72&nbsp;- $35.49</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>13.1</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>2.73</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>30.37</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>$35.50&nbsp;- $48.37</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>29.5</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1.54</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>39.58</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Total</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>46.2</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>2.02</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>35.61</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0> <TBODY> <TR> <TD vAlign=top align=left width="1%"><FONT face="Times New Roman" size=2>*</FONT></TD> <TD vAlign=top align=left><FONT face="Times New Roman" size=2>Expected forfeitures are immaterial to the company and are not reflected in the table above. </FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B></B></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Options Fully Vested and Exercisable </B></FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="61%"></TD> <TD vAlign=bottom width="7%"></TD> <TD></TD> <TD vAlign=bottom width="7%"></TD> <TD></TD> <TD vAlign=bottom width="7%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="7%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>Range of</B></FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 1px"><FONT face="Times New Roman" size=2><B>exercise price</B></FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle><FONT face="Times New Roman" size=2><B>Number</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align=center><FONT face="Times New Roman" size=2><B>Weighted<BR>average</B></FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align=center><FONT face="Times New Roman" size=2><B>remaining</B></FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 1px" align=center><FONT face="Times New Roman" size=2><B>contractual<BR>life</B> </FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align=center><FONT face="Times New Roman" size=2><B>Weighted<BR>average</B></FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 1px" align=center><FONT face="Times New Roman" size=2><B>exercise<BR>price</B></FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Intrinsic<BR>Value</B></FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>$9.91&nbsp;- $19.93</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.0</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.40</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>17.65</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>$19.94&nbsp;- $27.71</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3.5</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3.37</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>22.37</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>$27.72&nbsp;- $35.49</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>9.4</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1.95</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>30.81</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>$35.50&nbsp;- $48.37</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>29.4</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1.53</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>39.58</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Total</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>42.3</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1.78</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>36.19</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Beginning in January of 2004, in addition to stock option awards, the company has granted stock awards and performance share awards. Both vest three years from the date of grant. Performance share awards are issued at target and the final award amount is determined at the end of the performance period. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>The following table summarizes the outstanding stock and performance share awards (awards in millions): </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="63%"></TD> <TD vAlign=bottom width="6%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="6%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="6%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="6%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle><FONT face="Times New Roman" size=2><B>Stock<BR>Awards</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle><FONT face="Times New Roman" size=2><B>Performance<BR>Share&nbsp;Awards</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle><FONT face="Times New Roman" size=2><B>Total</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>Weighted<BR>average<BR>FMV<BR>per&nbsp;award</B></FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Outstanding, January&nbsp;1, 2008</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>5.6</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>1.0</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>6.6</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>30.14</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Granted</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>2.7</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.5</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>3.2</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>29.01</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Converted</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(0.9</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(0.3</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(1.2</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>29.33</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Forfeited</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(0.5</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>(0.5</FONT></TD> <TD vAlign=bottom noWrap><FONT face="Times New Roman" size=2>)</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>29.79</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Performance share adjustment</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>-</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.1</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>0.1</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>30.30</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Outstanding, December&nbsp;31, 2008</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>6.9</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1.3</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>8.2</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>29.89</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>At December&nbsp;31, 2008, there was $9 (pretax) of unrecognized compensation expense related to non-vested stock option grants, and $63 (pretax) of unrecognized compensation expense related to non-vested stock award grants. These expenses are expected to be recognized over a weighted average period of 1.7 years. As of December&nbsp;31, 2008, the following table summarizes the unrecognized compensation expense expected to be recognized in future periods: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="75%"></TD> <TD vAlign=bottom width="23%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom>&nbsp;<FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align=center><FONT face="Times New Roman" size=2><B>Stock-based&nbsp;compensation</B></FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 1px" align=center><FONT face="Times New Roman" size=2><B>expense (pretax)</B></FONT></P></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>2009</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>46</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>2010</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>25</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>2011</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Totals</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>72</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>L. Other Noncurrent Liabilities and Deferred Credits </B></FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE cellSpacing=0 cellPadding=0 width="100%" align=center border=0> <TBODY> <TR> <TD width="82%"></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD> <TD vAlign=bottom width="5%"></TD> <TD></TD> <TD></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2><B>December&nbsp;31,</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2008</B></FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=middle colSpan=2><FONT face="Times New Roman" size=2><B>2007</B></FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Deferred alumina and aluminum sales revenue</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>140</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>187</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Environmental remediation (N)</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>277</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>228</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Asset retirement obligations</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>273</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>282</FONT></TD></TR> <TR> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Fair value of derivative contracts</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>360</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>599</FONT></TD></TR> <TR bgColor=#cceeff> <TD vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Accrued compensation and retirement costs</FONT></P></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>267</FONT></TD> <TD vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD vAlign=bottom align=right><FONT face="Times New Roman" size=2>367</FONT></TD></TR> <TR> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top> <P style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><FONT face="Times New Roman" size=2>Other noncurrent liabilities</FONT></P></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>263</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>203</FONT></TD></TR> <TR bgColor=#cceeff> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top><FONT size=1>&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,580</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT size=1>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom><FONT face="Times New Roman" size=2>$</FONT></TD> <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right><FONT face="Times New Roman" size=2>1,866</FONT></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT size=1>&nbsp;</FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>F. Acquisitions and Divestitures </B></FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>2008 Acquisitions. </B>In March 2008, Alcoa acquired the remaining outstanding minority interest of four percent in the Belaya Kalitva fabricating facility in Russia for $15 in cash. Based on the allocation of the purchase price, Alcoa recorded $6 in goodwill, all of which is non-deductible for income tax purposes. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Also in March 2008, Alcoa acquired the stock of Republic Fastener Manufacturing Corporation (“Republic”) and Van Petty Manufacturing (“Van Petty”) from The Wood Family Trust for $276 in cash. The two aerospace fastener manufacturing businesses are located in Newbury Park, California, and employ a combined 240 people. Republic offers a wide variety of sheet metal and aerospace fasteners and Van Petty produces high performance precision aerospace fasteners, and, combined, the businesses had revenue of $51 in 2007. These businesses are included in the Engineered Products and Solutions segment. Based on the current purchase price allocation, $248 of goodwill was recorded for these transactions, all of which is deductible for income tax purposes. The final allocation of the purchase price will be based upon valuation and other studies, including environmental and other contingent liabilities , which will be completed early in 2009. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Lastly in March 2008, Alcoa received formal approval from regulators in China for the acquisition of the 27% outstanding minority interest in Alcoa Bohai Aluminum Industries Company Limited. In May 2008, Alcoa completed the purchase of such minority interest for $79 in cash. Based on the allocation of the purchase price, Alcoa recorded $24 in goodwill, all of which is non-deductible for income tax purposes. The final allocation of the purchase price will be based upon valuation and other studies, which will be completed early in 2009. </FONT></P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2></FONT>&nbsp;</P> <P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In connection with the August 2003 acquisition of 40.9% of Alcoa Alumínio S.A. (Alumínio), which was held by Camargo Corrêa Group (Camargo), the acquisition agreement provided for a contingent payment to Camargo based on the five-year performance of Alumínio limited by the appreciation in the market price of Alcoa’s common stock. In July 2008, Alcoa paid Camargo $47 under the contingent payment provisions in the acquisition agreement. This payment resulted in $47 of goodwill, all of which is non-deductible for income tax purposes, representing an increase in the original purchase price. Alcoa is no longer subject to contingent payments related to the Alumínio acquisition. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>2008 Divestitures. </B>In February 2008, Alcoa completed the sale of its Packaging and Consumer businesses to Rank Group Limited (Rank). During 2008, Alcoa received $2,693 in cash in exchange for a combination of assets and shares of stock in certain subsidiaries and recognized a loss of $43 ($32 after-tax) in Restructuring and other charges on the accompanying Statement of Consolidated Operations (see Note D for additional information). The loss was mainly the result of changes in the net book value of the businesses, additional transaction costs, and various post-closing adjustments. Also, a net discrete income tax charge of $19 was recognized in 2008 primarily due to the allocation of the sale proceeds to higher tax rate jurisdictions as opposed to the allocation previously contemplated, changes in tax assumptions surrounding transaction costs, and the finalization of the divestiture of certain f oreign locations. Furthermore, Alcoa paid Rank a net $42 as a result of working capital and certain other post-closing adjustments as defined in the sales agreement. This transaction is no longer subject to working capital and other post-closing adjustments. Alcoa will sell metal to Rank under a supply agreement that was entered into in conjunction with the sale agreement in December 2007. This metal supply agreement constitutes significant continuing involvement in the sold businesses by Alcoa, and, therefore, the results of operations of the Packaging and Consumer businesses were not classified as discontinued operations (see Note B for additional information). The Packaging and Consumer segment generated sales of $3,288 in 2007 and had approximately 9,300 employees in 22 countries. This segment no longer contains any operations. The following is a description of the four businesses that were included in this segment: </FONT></P> <P style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE style="MARGIN-TOP: -2px; PADDING-BOTTOM: 8px; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0> <TBODY> <TR> <TD width="5%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left width="2%"> <P style="VERTICAL-ALIGN: top; LINE-HEIGHT: 95%"><FONT face="Times New Roman" size=2>•</FONT></P></TD> <TD vAlign=top width="1%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left> <P style="VERTICAL-ALIGN: top; LINE-HEIGHT: 95%" align=left><FONT face="Times New Roman" size=2></FONT><FONT face="Times New Roman" size=1><SUP></SUP></FONT><FONT face="Times New Roman" size=2>Flexible Packaging, manufacturers of laminated, printed, and extruded non-rigid packaging materials such as pouch, blister packaging, unitizing films, high quality shrink labels, and foil lidding for the pharmaceutical, food and beverage, tobacco, and industrial markets; </FONT></P></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE style="MARGIN-TOP: -2px; PADDING-BOTTOM: 8px; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0> <TBODY> <TR> <TD width="5%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left width="2%"> <P style="VERTICAL-ALIGN: top; LINE-HEIGHT: 95%"><FONT face="Times New Roman" size=2>•</FONT></P></TD> <TD vAlign=top width="1%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left> <P style="VERTICAL-ALIGN: top; LINE-HEIGHT: 95%" align=left><FONT face="Times New Roman" size=2></FONT><FONT face="Times New Roman" size=1><SUP></SUP></FONT><FONT face="Times New Roman" size=2>Closure Systems International, a leading global manufacturer of plastic and aluminum packaging closures and capping equipment for beverage, food, and personal care customers; </FONT></P></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE style="MARGIN-TOP: -2px; PADDING-BOTTOM: 8px; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0> <TBODY> <TR> <TD width="5%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left width="2%"> <P style="VERTICAL-ALIGN: top; LINE-HEIGHT: 95%"><FONT face="Times New Roman" size=2>•</FONT></P></TD> <TD vAlign=top width="1%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left> <P style="VERTICAL-ALIGN: top; LINE-HEIGHT: 95%" align=left><FONT face="Times New Roman" size=2></FONT><FONT face="Times New Roman" size=1><SUP></SUP></FONT><FONT face="Times New Roman" size=2>Consumer Products, a leading manufacturer of branded and private label foil, wraps and bags, and includes the Reynolds<FONT face="Times New Roman" size=1><SUP>®</SUP></FONT> and Baco<FONT face="Times New Roman" size=1><SUP>®</SUP></FONT> branded products; </FONT></P></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">&nbsp;</P> <TABLE style="MARGIN-TOP: -2px; PADDING-BOTTOM: 8px; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0> <TBODY> <TR> <TD width="5%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left width="2%"> <P style="VERTICAL-ALIGN: top; LINE-HEIGHT: 95%"><FONT face="Times New Roman" size=2>•</FONT></P></TD> <TD vAlign=top width="1%"><FONT size=1>&nbsp;</FONT></TD> <TD vAlign=top align=left> <P style="VERTICAL-ALIGN: top; LINE-HEIGHT: 95%" align=left><FONT face="Times New Roman" size=2></FONT><FONT face="Times New Roman" size=1><SUP></SUP></FONT><FONT face="Times New Roman" size=2>Food Packaging, makers of stock and customer products for the foodservice, supermarket, food processor, and agricultural markets, including foil, film, and both plastic and foil food containers. </FONT></P></TD></TR></TBODY></TABLE> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>2007 Acquisitions. </B>In connection with the 2005 acquisition of the Belaya Kalitva and Samara fabricating facilities located in Russia, Alcoa entered into a long-term aluminum supply contract with the seller of these facilities and made a prepayment of $93. In January 2007, this $93 was repaid to Alcoa as provided for in the contract, and is reflected in the cash from operations section on the accompanying Statement of Consolidated Cash Flows. The long-term aluminum supply contract is still in place and none of the provisions of the contract changed due to the receipt of the $93. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In May 2007, Alcoa announced an offer to purchase all of the outstanding common shares of Alcan Inc. (Alcan), for a combination of cash and stock. In July 2007, Alcan’s board of directors agreed to recommend acceptance of a takeover offer by Rio Tinto plc, and Alcoa effectively withdrew its offer for Alcan due to said agreement. In 2007, Alcoa recorded $46 ($30 after-tax) in transaction costs (investment banking, legal, audit-related, and other third-party expenses) related to the offer for Alcan in Selling, general administrative, and other expenses on the accompanying Statement of Consolidated Operations. In addition, in July 2007, Alcoa fully amortized $30 ($19 after-tax) in commitment fees that were paid and capitalized in June 2007 and expensed $37 ($24 after-tax) in commitment fees that were paid in July 2007. These commitment fees were paid to secure an 18-month $30,000 senior unsecured credit facili ty associated with the offer for Alcan. The $67 in commitment fees was recorded in Interest expense on the accompanying Statement of Consolidated Operations. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>During 2007, Alcoa completed two acquisitions, including one for an outstanding minority interest in Russia, and made a final contingent payment related to its 2002 acquisition of Fairchild Fasteners (Fairchild), all for a total cash cost of $18. None of these transactions had a material impact on Alcoa’s Consolidated Financial Statements. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>2007 Divestitures. </B>In November 2007, Alcoa completed the sale of its Automotive Castings business to Compass Automotive Group, LLC (Compass), a portfolio company of Monomoy Capital Partners, L.P. for $33 in cash, which is included in Proceeds from the sale of assets and businesses on the accompanying Statement of Consolidated Cash Flows. A loss of $72 ($53 after-tax) was recognized in Restructuring and other charges on the accompanying Statement of Consolidated Operations, of which $68 ($51 after-tax) was recorded in the third quarter of 2007 as an impairment charge to reflect the write-down of the carrying value of the assets of the business to its estimated fair value (see Note D for additional information). This business produced cast aluminum components, including steering knuckles, swing arms and control arms through a Vacuum Riserless Casting/Pressure Riserless Casting (VRC/PRC) process. T he Automotive Castings business employed approximately 530 employees and consisted of two operating locations, one in Fruitport, MI (the Michigan Casting Center) and one in Farsund, Norway (the Scandinavian Casting Center). This business generated approximately $150 in sales in 2006. Separately from the sale transaction, Alcoa entered into an agreement with Compass to supply metal to the Michigan Casting Center. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In September 2007, Alcoa completed the sale of a lignite mine in Texas to TXU Mining Company LP for $140, which consisted of $70 in cash and a $70 note receivable due in 2009. No material gain or loss was recognized on the transaction. The cash proceeds are included in Proceeds from the sale of assets and businesses on the accompanying Statement of Consolidated Cash Flows and the note receivable was recorded in Other assets on the accompanying Consolidated Balance Sheet. In conjunction with this transaction, Alcoa entered into a supply agreement with TXU Mining Company LP to supply lignite for use at Alcoa’s power plant in Rockdale, TX. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>2006 Acquisitions. </B>In September 2006, Alcoa completed the acquisition of its 70% interest in the aluminum brazing sheet venture in Kunshan City, China. Alcoa will be the managing partner in the venture, with the remaining 30% shares held by Shanxi Yuncheng Engraving Group. The total acquisition price was approximately $61. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In June 2006, Alcoa completed the acquisition of the minority interests (including the purchase of certain raw material inventories) in its Intalco and Eastalco aluminum smelters in Ferndale, Washington, and Frederick, Maryland, respectively, in exchange for the assumption of certain liabilities related to the facilities and receipt of a net cash payment of $25. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2><B>2006 Divestitures. </B>In October 2006, Alcoa completed the sale of the home exteriors business to Ply Gem Industries, Inc. for $305 in cash and recognized a gain of $181 ($110 after-tax). In 2007, Alcoa adjusted the gain by $17 ($11 after-tax), primarily related to working capital and other post-closing adjustments. The home exteriors business was reflected in discontinued operations in the Consolidated Financial Statements. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>In 2008, Alcoa made a $47 contingent payment related to a 2003 acquisition (see 2008 Acquisitions). During both 2007 and 2006, Alcoa made a contingent payment of $13 related to the Fairchild acquisition. These payments were recorded as adjustments to goodwill and are included in Acquisitions, net of cash acquired on the accompanying Statement of Consolidated Cash Flows. Alcoa is no longer subject to contingent payments related to the Fairchild acquisition. In connection with the 2005 acquisition of two fabricating facilities in Russia, Alcoa could be required to make additional contingent payments of approximately $85 through 2015 based upon the achievement of various financial and operating targets. </FONT></P> <P style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><FONT face="Times New Roman" size=2>Pro forma results of the company, assuming all acquisitions were made at the beginning of each period presented, would not have been materially different from the results reported. </FONT></P> -2906000000 -74000000 -432000000 233000000 -1382000000 799000000 439000000 180000000 -1457000000 -157000000 282000000 -2832000000 -18000000 94000000 554000000 2000000 0.68 9000000 -74000000 3.75 196000000 1082000000 10-K false 2008-12-31 2008 FY ALCOA INC. 0000004281 AA, AA.PR --12-31 Yes No Yes Large Accelerated Filer 29000000000 801774739 0000004281 2008-12-31 0000004281 2008-01-01 2008-12-31 0000004281 us-gaap:TreasuryStockMember 2008-01-01 2008-12-31 0000004281 us-gaap:RetainedEarningsMember 2008-01-01 2008-12-31 0000004281 us-gaap:AdditionalPaidInCapitalMember 2008-01-01 2008-12-31 0000004281 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2008-01-01 2008-12-31 0000004281 us-gaap:ComprehensiveIncomeMember 2008-01-01 2008-12-31 0000004281 2008-01-01 2008-12-31 0000004281 us-gaap:TreasuryStockMember 2007-01-01 2007-12-31 0000004281 us-gaap:RetainedEarningsMember 2007-01-01 2007-12-31 0000004281 us-gaap:AdditionalPaidInCapitalMember 2007-01-01 2007-12-31 0000004281 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2007-01-01 2007-12-31 0000004281 us-gaap:ComprehensiveIncomeMember 2007-01-01 2007-12-31 0000004281 2007-01-01 2007-12-31 0000004281 us-gaap:TreasuryStockMember 2006-01-01 2006-12-31 0000004281 us-gaap:RetainedEarningsMember 2006-01-01 2006-12-31 0000004281 us-gaap:AdditionalPaidInCapitalMember 2006-01-01 2006-12-31 0000004281 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2006-01-01 2006-12-31 0000004281 us-gaap:ComprehensiveIncomeMember 2006-01-01 2006-12-31 0000004281 2006-01-01 2006-12-31 0000004281 us-gaap:TreasuryStockMember 2008-12-31 0000004281 us-gaap:RetainedEarningsMember 2008-12-31 0000004281 us-gaap:PreferredStockMember 2008-12-31 0000004281 us-gaap:AdditionalPaidInCapitalMember 2008-12-31 0000004281 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2008-12-31 0000004281 us-gaap:CommonStockMember 2008-12-31 0000004281 2008-12-31 0000004281 us-gaap:TreasuryStockMember 2007-12-31 0000004281 us-gaap:RetainedEarningsMember 2007-12-31 0000004281 us-gaap:PreferredStockMember 2007-12-31 0000004281 us-gaap:AdditionalPaidInCapitalMember 2007-12-31 0000004281 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2007-12-31 0000004281 us-gaap:CommonStockMember 2007-12-31 0000004281 2007-12-31 0000004281 us-gaap:TreasuryStockMember 2006-12-31 0000004281 us-gaap:RetainedEarningsMember 2006-12-31 0000004281 us-gaap:PreferredStockMember 2006-12-31 0000004281 us-gaap:AdditionalPaidInCapitalMember 2006-12-31 0000004281 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2006-12-31 0000004281 us-gaap:CommonStockMember 2006-12-31 0000004281 2006-12-31 0000004281 us-gaap:TreasuryStockMember 2005-12-31 0000004281 us-gaap:RetainedEarningsMember 2005-12-31 0000004281 us-gaap:PreferredStockMember 2005-12-31 0000004281 us-gaap:AdditionalPaidInCapitalMember 2005-12-31 0000004281 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2005-12-31 0000004281 us-gaap:CommonStockMember 2005-12-31 0000004281 2005-12-31 iso4217:USD iso4217:USD shares shares Comprised of unrecognized losses and prior service cost, net, related to pension and postretirement benefit plans of $(2,690); unrealized foreign currency translation adjustments of $74; unrealized losses on available-for-sale securities of $(428); and unrecognized net losses on derivatives of $(125); all net of tax and applicable minority interests. 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