Alcoa 2003 Annual Report Download - page 59

The following tables summarize certain stock option information
at December 31, 2003: (shares in millions)
Options Outstanding
Range of
exercise price Number
We i g hted average
remaining life
We i g hted average
exercise price
$ 0.125 0.1 employment career $0.125
$ 4.38–$12.15 1.1 1.87 10.59
$12.16–$19.93 2.3 3.28 16.62
$19.94–$27.71 20.9 6.88 22.55
$27.72–$35.49 17.4 5.41 31.64
$35.50–$45.59 46.0 5.66 38.72
To tal 87.8 5.79 32.50
Options Exercisable
Range of
exercise price Number
We i g hted average
exercisable price
$ 0.125 0.1 $0.125
$ 4.38–$12.15 1.1 10.59
$12.16–$19.93 2.3 16.59
$19.94–$27.71 7.5 22.50
$27.72–$35.49 16.7 31.59
$35.50–$45.59 43.9 38.78
To tal 71.6 34.22
R. Earnings Per Share
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 equivalents outstanding.
The information used to compute basic and diluted EPS on
income from continuing operations follows. (shares in millions)
2003 2002 2001
Income from continuing operations $1,034 $476 $904
Less: preferred stock dividends 222
Income from continuing operations
available to common shareholders $1,032 $474 $902
Average shares outstanding—basic 853.4 845.4 858.0
Effect of dilutive securities:
Shares issuable upon exercise of
dilutive stock options 3.2 4.4 8.6
Average sharesoutstanding—diluted 856.6 849.8 866.6
Options to purchase51million shares of common stock at an
average exercise price of $38 persharewere outstanding as of
December 31, 2003 but were not included in the computation of
diluted
EPS because the option exercise price was greater than the
average market price of the common shares.
S. Income Taxes
Thecomponents of income from continuing operations before taxes
on income were:
2003 2002 2001
U.S. $ 322 $ (406) $ (28)
Foreig n 1,347 1,308 1,661
$1,669 $ 902 $1,633
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Q. Preferred and Common Stock
Preferred Stock. Alcoa has two classes of preferred stock. Serial
preferred stock has 557,740 shares authorized and 546,024 shares
outstanding, with a par value of $100 per share and an annual $3.75
cumulative dividend preference per share. Class B serial preferred
stock has 10 million shares authorized (none issued) and a par value
of $1 per share.
Common Stock. There are 1.8 billion shares authorized atapar
value of $1 per share. As of December 31, 2003, 100.9 million shares
of common stock were reserved for issuance under the long-term
stock incentiveplans.
Stock options under the company’s stock incentive plans have
been granted, generally at not less than market prices on the dates
of grant. Stock option features based on date of original grant are
as follows:
Date of
original grant Vesting Term Reload feature
2002 and prior One year 10 years One reload over option term
2003 3 years
(1/3 each year)
10 years One reload in 2004 for
1/3 vesting in 2004
2004 3 years
(1/3 each year)
6years None
Beginning in January of 2004, in addition to stock option
awards, the company has granted stock awards and performance
share awards thatvestinthreeyearsfrom the date of grant.
The transactions for shares under options were: (shares in
millions)
2003 2002 2001
Outstanding, beginning of year:
Number of options 81.6 73.5 74.8
We i g hted average exercise price $33.19 $32.02 $29.29
Granted:
Number of options 16.8 17.3 28.9
We i g hted average exercise price $24.93 $36.10 $36.19
Exercised:
Number of options (8.0) (7.1) (29.0)
We i g hted average exercise price $23.29 $26.77 $29.03
Expired or forfeited:
Number of options (2.6) (2.1) (1.2)
We i g hted average exercise price $32.58 $37.50 $32.50
Outstanding, end of year:
Number of options 87.8 81.6 73.5
We i g hted average exercise price $32.50 $33.19 $32.02
Exercisable, end of year:
Number of options 71.6 68.8 58.6
We i g hted average exercise price $34.22 $32.68 $31.88
Shares reserved forfuture options 13.1 25.6 21.0