Alcoa 2010 Annual Report Download - page 73

pension plans in a private placement transaction. Additionally, Alcoa estimates that it will contribute an additional
$200 in cash to its U.S pension plans during 2011. Together, these contributions satisfy the minimum required and
provide additional funding for Alcoa to maintain an approximately 80% funded status of its U.S. pension plans (the
preceding table only reflects the minimum contributions required by law). Other postretirement benefit payments are
expected to approximate $275 annually, net of the estimated subsidy receipts related to Medicare Part D, and are
reflected in the preceding table through 2020. Alcoa has determined that it is not practicable to present pension funding
and other postretirement benefit payments beyond 2015 and 2020, respectively.
Layoff and other restructuring payments primarily relate to severance costs and are expected to be paid within one
year. Amounts scheduled to be paid beyond one year are related to ongoing site remediation work, special termination
benefit payments, and lease termination costs.
Deferred revenue arrangements require Alcoa to deliver alumina over the specified contract period through 2027.
While these obligations are not expected to result in cash payments, they represent contractual obligations for which
the Company would be obligated if the specified product deliveries could not be made.
Uncertain tax positions taken or expected to be taken on an income tax return may result in additional payments to tax
authorities. The amount in the preceding table includes interest and penalties accrued related to such positions as of
December 31, 2010. The total amount of uncertain tax positions is included in the “Thereafter” column as the
Company is not able to reasonably estimate the timing of potential future payments. If a tax authority agrees with the
tax position taken or expected to be taken or the applicable statute of limitations expires, then additional payments will
not be necessary.
Obligations for Financing Activities
Total debt amounts in the preceding table represent the principal amounts of all outstanding debt, including short-term
borrowings and long-term debt. Maturities for long-term debt extend to 2037.
Alcoa has historically paid quarterly dividends on its preferred and common stock. Including dividends on preferred
stock, Alcoa paid $125 in dividends to shareholders during 2010. Because all dividends are subject to approval by
Alcoa’s Board of Directors, amounts are not included in the preceding table until such authorization has occurred. As
of December 31, 2010, there were 1,022,025,965 and 546,024 shares of outstanding common stock and preferred stock,
respectively. The annual preferred stock dividend is at the rate of $3.75 per share and the annual common stock
dividend is $0.12.
Obligations for Investing Activities
Capital projects in the preceding table only include amounts approved by management as of December 31, 2010.
Funding levels may vary in future years based on anticipated construction schedules of the projects. It is expected that
significant expansion projects will be funded through various sources, including cash provided from operations. Total
capital expenditures are anticipated to be approximately $1,500 in 2011.
Equity contributions represent Alcoa’s committed investment related to a joint venture in Saudi Arabia. In December
2009, Alcoa signed an agreement to enter into a joint venture to develop a new aluminum complex in Saudi Arabia,
comprised of a bauxite mine, alumina refinery, aluminum smelter, and rolling mill, which will require the Company to
contribute approximately $1,100 over a four-year period (2010 through 2013). As of December 31, 2010, Alcoa has
made equity contributions of $160. The timing of the amounts included in the preceding table may vary based on
changes in anticipated construction schedules of the project.
Payments related to acquisitions are based on provisions in certain acquisition agreements that state additional funds
are due to the seller from Alcoa if the businesses acquired achieve stated financial and operational thresholds. Amounts
are only presented in the preceding table if it is has been determined that payment is more likely than not to occur. In
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