Alcoa 2012 Annual Report Download - page 121

The principal amount of long-term debt maturing in each of the next five years is $465 in 2013, $661 in 2014, $34 in
2015, $33 in 2016, and $780 in 2017.
Public Debt—In January 2012, Alcoa repaid the $322 in outstanding principal of its 6% Notes as scheduled using
available cash on hand.
In August 2012, Alcoa and the Iowa Finance Authority entered into a loan agreement for the proceeds from the
issuance of $250 in Midwestern Disaster Area Revenue Bonds Series 2012 due 2042 (the “Bonds”). The Bonds were
issued by the Iowa Finance Authority pursuant to the Heartland Disaster Tax Relief Act of 2008 for the purpose of
financing all or part of the cost of acquiring, constructing, reconstructing, and renovating certain facilities at Alcoa’s
rolling mill plant in Davenport, IA. Alcoa received $248 in net proceeds (reflecting payment of financing costs), which
was classified as restricted cash. This transaction is not reflected in the accompanying Statement of Consolidated Cash
Flows as it represents a non-cash financing and investing activity. At December 31, 2012, Alcoa had $171 of restricted
cash remaining, all of which was classified in Prepaid expenses and other current assets on the accompanying
Consolidated Balance Sheet. Interest on the Bonds is at a rate of 4.75% per annum and will be paid semi-annually in
February and August, which will commence in February 2013. Alcoa has the option through the loan agreement to
redeem the Bonds, as a whole or in part, on or after August 1, 2022, on at least 30 days, but not more than 60 days,
prior notice to the holders of the Bonds at a redemption price equal to 100% of the principal amount thereof, without
premium, plus accrued interest, if any, to the redemption date. The loan agreement ranks pari passu with Alcoa’s other
unsecured senior unsubordinated indebtedness.
In February 2011, 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 (filed in March 2008). As of December 31, 2012 and 2011, $1,250 in senior debt
securities were issued under the current shelf registration statement.
In April 2011, Alcoa completed a public debt offering under its current shelf registration statement (dated February 18,
2011) for $1,250 of 5.40% Notes due 2021 (the “2021 Notes”). Alcoa received $1,241 in net proceeds from the public
debt offering reflecting an original issue discount and payment of financing costs. The net proceeds were used for the
early retirement of $881 in outstanding notes (see below), early repayment of $101 in outstanding loans related to the
bauxite mine development in Brazil (see BNDES Loans below), and the remainder was used for general corporate
purposes. The original issue discount and financing costs were deferred and are being amortized to interest expense
over the term of the 2021 Notes. Interest on the 2021 Notes is paid semi-annually in April and October, which
commenced in October 2011. Alcoa has the option to redeem the 2021 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 2021 Notes at a
redemption price specified in the 2021 Notes. The 2021 Notes are subject to repurchase upon the occurrence of a
change in control repurchase event (as defined in the 2021 Notes) at a repurchase price in cash equal to 101% of the
aggregate principal amount of the 2021 Notes repurchased, plus any accrued and unpaid interest on the 2021 Notes
repurchased. The 2021 Notes rank pari passu with Alcoa’s other unsecured senior unsubordinated indebtedness.
In May 2011, Alcoa completed the following tender offers: (i) any and all of its 5.375% Notes due 2013 (the “5.375%
Notes”) and (ii) up to $400 of its 6.00% Notes due 2013 (the “6.00% Notes” and collectively with the 5.375% Notes,
the “Notes”). Upon expiration of the tender offers, $269 and $328 of the aggregate outstanding principal amount of the
5.375% Notes and 6.00% Notes, respectively, were validly tendered and accepted. Additionally in May 2011,
subsequent to the expiration of the tender offer for the 5.375% Notes, Alcoa elected to call for redemption the
remaining outstanding principal of $284 under the provisions of the 5.375% Notes. The total cash paid to the holders of
the tendered 5.375% Notes and 6.00% Notes and the called 5.375% Notes was $972, which consisted of $881 in debt
principal, $74 in purchase premiums, and $17 in accrued and unpaid interest from the respective last interest payment
dates up to, but not including, the respective settlement dates. The $74 was recorded in Interest expense on the
accompanying Statement of Consolidated Operations. Subsequent to the respective tender offer, the 6.00% Notes had a
remaining outstanding principal of $422.
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