Alcoa 1998 Annual Report Download - page 55

Employees by Geographic Area
1998: 103,500
0
2020
40 40 60 60 8080
100
100
39%
38%
18%
5%
Other Americas
U.S.
Europe
Pacific
53
Pt. Comfort/Lavaca Bay. In 1990, Alcoa began discussions
with certain state and federal natural resource trustees concerning
alleged releases of mercury from its Pt. Comfort, Texas facility
into the adjacent Lavaca Bay. In March 1994,
EPA listed the ‘‘Alcoa
(Point Comfort)/Lavaca Bay Site’’ on the National Priorities List and,
shortly thereafter, Alcoa and
EPA entered into an administrative
order on consent under which Alcoa is obligated to conduct certain
remedial investigations and feasibility studies. In accordance with
this order, Alcoa recently submitted a draft remedial investigation
and a draft baseline risk assessment to
EPA . Alcoa expects to submit
a draft feasibility study during 1999. In addition, Alcoa recently
commenced construction of the
EPA -approved project to fortify an
offshore dredge disposal island. The probable and estimable costs
of these actions are fully reserved. Additional costs to complete
a remedy currently cannot be estimated since they will depend
on the extent of remediation required, if any, the remedial method
chosen and the time frame to complete any remediation activity.
Since the order with
EPA , Alcoa and the natural resource trustees
have continued efforts to understand natural resource injury
and ascertain appropriate restoration alternatives. That process
is expected to be completed within the next 12 to 24 months.
Based on the above, it is possible that results of operations in
a particular period could be materially affected by certain of
these matters. However, based on facts currently available, manage-
ment believes that the disposition of these matters will not have
a materially adverse effect on the financial position or liquidity of
the company.
Alcoa’s remediation reserve balance at the end of 1998 and 1997
was $217.0 and $243 (of which $84.6 and $72.7 were classified as a
current liability), respectively, and reflects the most probable costs
to remediate identified environmental conditions for which costs
can be reasonably estimated. About 20% of the 1998 balance relates
to the Massena plant site and 16% of the 1998 balance relates to
the Pt. Comfort plant site. Remediation expenses charged to the
reserve were $63 in 1998, $64 in 1997 and $72 in 1996. They include
expenditures currently mandated, as well as those not required by
any regulatory authority or third party.
Included in annual operating expenses are the recurring costs
of managing hazardous substances and environmental programs.
These costs are estimated to be about 2% of cost of goods sold.
Supplemental Financial Information
Quarterly Data (unaudited)
(dollars in millions, except per-share amounts)
1998 First Second Third Fourth Year
Sales $3,445.1 $3,587.0 $4,108.9 $4,198.8 $15,339.8
Income from
operations 279.7 269.5 266.2 275.9 1,091.3
Net income 209.9 207.1 217.7 218.3* 853.0
Earnings per share:
Basic .63 .62 .61 .59 2.44
Diluted .62 .62 .61 .59 2.42
*The 1998 fourth quarter included an after-tax credit of $31.6 related to
changes in the LIFO index.
1997 First Second Third Fourth Year
Sales $3,231.1 $3,432.0 $3,357.5 $3,298.6 $13,319.2
Income from
operations 220.8 276.0 286.4 289.8 1,073.0
Net income 159.1 207.6 228.1 210.3* 805.1
Earnings per share:
Basic .46 .60 .66 .62 2.33
Diluted .45 .59 .65 .61 2.31
*The 1997 fourth quarter included an after-tax credit of $19.1 related to
changes in the LIFO index.
Number of Employees (unaudited)
1998 1997 1996
Other Americas 40,900 36,200 29,800
U. S. 38,900 27,200 28,900
Europe 18,200 11,900 12,500
Pacific 5,500 6,300 5,600
103,500 81,600 76,800