Alcoa 2012 Annual Report Download - page 78

The major components of the lower net cash inflow in working capital were as follows: an additional outflow of $122
in inventories, mostly due to higher production as a result of increased demand and rising input costs; a higher inflow
of $47 in prepaid expenses and other current assets, primarily driven by the absence of collateral posted related to a
mark-to-market energy contract that ended in September 2011; an additional inflow of $66 in accounts payable, trade,
principally the result of higher purchasing needs and timing of vendor payments; a lower outflow of $201 in accrued
expenses, mostly related to fewer cash payments for restructuring programs and the absence of a reduction in collateral
held related to mark-to-market energy contracts; and a smaller inflow of $385 in taxes, including income taxes, mainly
due to the absence of a $347 federal income tax refund for the carryback of Alcoa’s 2009 net loss to prior tax years.
Financing Activities
Cash used for financing activities was $798 in 2012 compared with cash provided from financing activities of $62 in
2011 and cash used for financing activities of $952 in 2010.
The use of cash in 2012 was principally the result of $1,489 in payments on debt, mainly related to $600 for the
repayment of borrowings under four new short-term facilities (see below), $322 for the repayment of 6% Notes due
2012 as scheduled, $280 for the repayment of the new short-term loans to support the export operations of a subsidiary
in Brazil, and $272 for previous borrowings on the loans supporting the São Luís refinery expansion, Juruti bauxite
mine development, and Estreito hydroelectric power project in Brazil; a change of $224 in commercial paper; and $131
in dividends paid to shareholders. These items were partially offset by $972 in additions to debt, due to $600 in
borrowings under four new short-term facilities (see below), $280 in new short-term loans to support the export
operations of a subsidiary in Brazil, and $92 in borrowings under loans that support the Estreito hydroelectric power
project in Brazil; and net cash received from noncontrolling interests of $76, all of which relates to Alumina Limited’s
share of AWAC.
The source of cash in 2011 was mostly driven by $1,256 in additions to long-term debt, of which $1,248 was for the
issuance of 5.40% Notes due 2021, and a change of $224 in commercial paper. These items were mostly offset by
$1,194 in payments on long-term debt, principally related to $881 for the early retirement of all of the 5.375% Notes
due 2013 and a portion of the 6.00% Notes due 2013, $217 for previous borrowings on the loans supporting the São
Luís refinery expansion, Juruti bauxite mine development, and Estreito hydroelectric power project in Brazil, and $45
for a loan associated with the Samara, Russia facility; net cash distributed to noncontrolling interests of $88, all of
which relates to Alumina Limited’s share of AWAC; and $131 in dividends paid to shareholders.
The use of cash in 2010 was primarily due to $1,757 in payments on long-term debt, mostly related to $511 for the
repayment of 7.375% Notes due 2010 as scheduled, $825 for the early retirement of all of the 6.50% Notes due 2011
and a portion of the 6.00% Notes due 2012 and 5.375% Notes due 2013, and $287 related to previous borrowings on
the loans supporting the São Luís refinery expansion and Juruti bauxite mine development in Brazil; $125 in dividends
paid to shareholders; net cash paid to noncontrolling interests of $94, all of which relates to Alumina Limited’s share of
AWAC; $66 in acquisitions of noncontrolling interests, mainly the result of the $60 paid to redeem the convertible
securities of a subsidiary that were held by Alcoa’s former partner related to the joint venture in Saudi Arabia; and a
change of $44 in short-term borrowings. These items were partially offset by $1,126 in additions to long-term debt, of
which $998 was for the issuance of 6.150% Notes due 2020 and $76 was related to borrowings under the loans that
support the Estreito hydroelectric power project in Brazil.
As a result of an agreement between Alcoa and Alumina Limited in September 2012, Alcoa of Australia (part of the
AWAC group of companies) will make minimum dividend payments to Alumina Limited of $100 in 2013.
On July 25, 2011, Alcoa entered into a Five-Year Revolving Credit Agreement (the “Credit Agreement”) with a
syndicate of lenders and issuers named therein. The Credit Agreement provides a $3,750 senior unsecured revolving
credit facility (the “Credit Facility”), the proceeds of which are to be used to provide working capital or for other
general corporate purposes of Alcoa, including support of Alcoa’s commercial paper program. Subject to the terms and
conditions of the Credit Agreement, Alcoa may from time to time request increases in lender commitments under the
67