Alcoa 2009 Annual Report Download - page 65

realized in all businesses. ATOI for this segment climbed 23% in 2008 compared with 2007, mainly due to continued
strong demand and productivity improvements in the aerospace and industrial gas turbine markets, favorable foreign
currency movements due to a stronger euro, and the positive contribution of the acquired fastener businesses, all of
which was somewhat offset by significantly lower volumes in the commercial transportation market.
In 2010, continued benefits from cost savings initiatives are anticipated; however, weak end markets and destocking in
the aerospace fastener and industrial gas turbine markets are expected to continue. Also, management continues to
explore divestiture alternatives for the Transportation Products Europe business.
Packaging and Consumer
2009 2008 2007
Third-party aluminum shipments (kmt) - 19 157
Third-party sales $ - $516 $3,288
ATOI $ - $ 11 $ 148
The businesses within this segment were sold to Rank Group Limited in 2008; therefore, this segment no longer
contains any operations. 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®, Diamond®, Baco®, and Cut-Rite®. 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.
Reconciliation of ATOI to Consolidated Net (Loss) Income Attributable to Alcoa
Items required to reconcile segment ATOI to consolidated net (loss) income attributable to Alcoa include: the impact
of LIFO inventory accounting; interest income and expense; noncontrolling 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 intersegment profit eliminations and other metal adjustments, differences
between tax rates applicable to the segments and the consolidated effective tax rate, the results of the soft alloy
extrusions business in Brazil, and other nonoperating items such as foreign currency translation gains/losses.
The following table reconciles total segment ATOI to consolidated net (loss) income attributable to Alcoa:
2009 2008 2007
Total segment ATOI $ (234) $2,199 $3,162
Unallocated amounts (net of tax):
Impact of LIFO 235 (7) (24)
Interest income 12 35 40
Interest expense (306) (265) (261)
Noncontrolling interests (61) (221) (365)
Corporate expense (304) (328) (388)
Restructuring and other charges (155) (693) (201)
Discontinued operations (166) (303) (250)
Other (172) (491) 851
Consolidated net (loss) income attributable to Alcoa $(1,151) $ (74) $2,564
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