Alcoa 2012 Annual Report Download - page 8

ALCOA 2012 Annual Report6
Integrity is the fundamental principle that guides everything we do.
During 2012, we hired an expert on corporate governance, Audrey
Strauss, as our Chief Legal and Compliance Offi cer. Audrey’s mission
is to ensure that every Alcoan understands and lives by both the spirit
and the laws that form our concept of integrity at Alcoa.
Innovation is the core value upon which our Company was founded
by inventor Charles Martin Hall, along with the dedicated support of
his sister Julia. With a greater emphasis on commercial applications
and licensing, Alcoans are innovating to continuously create growth
opportunities for our customers and our Company.
Respect is a very personal value defi ned by an appreciation for
human dignity and diversity. We are proud that Alcoa was chosen
in 2012 for the coveted Catalyst award, which is given each year to
only three companies worldwide who are deemed best-in-class for
providing opportunities to women in the workplace.
Environment, Health and Safety is a combined value for
which Alcoa is widely known and respected. Building on our
reputation for being best-in-class for safety, during 2012 we launched
a global wellness program to improve the health and longevity of
every Alcoan.
Excellence is a broad term that is lived by Alcoans who go the extra
mile in whatever they do. It explains why Alcoa exceeded our fi nancial
goals in this very challenging year. And it explains why our vision of
Advancing Each Generation will remain believable and achievable for
the next 125 years and beyond.
On the back cover of this report, you can fi nd an exact replica of the
values statement that is framed on the walls of every Alcoa plant and
offi ce around the world. Following this letter, we highlight some examples
of how Alcoans lived the values every day, everywhere during 2012.
You can see in the adjoining pages how Alcoans live our vision to create
innovations for our customers. This is why I am so optimistic about
Alcoa’s future. Alcoa is a great company, built on strong values and
run by excellent people. We make a product for the ages. More than
a century ago, Alcoa’s aluminum enabled the Wright brothers to build
an aircraft that could fl y just a few hundred feet off the ground. Half
a century ago, Alcoa’s aluminum enabled astronauts to fl y hundreds
of miles into the unknown of outer space. Today, Alcoa’s aluminum is
millions of miles away on a vehicle called Curiosity, exploring the surface
of the planet Mars. In every market we serve – from aerospace to
automotive, from construction to consumer electronics, from industrial
to packaging – Alcoa is literally “reaching for the stars.”
Thanks to the light weight, recyclability and durability of aluminum,
we expect strong growth in each of our end-markets through 2020.
While LME prices are currently driven by macroeconomic factors
that largely ignore underlying market fundamentals, we have every
confi dence that customer needs will once again drive the markets.
And when they do, aluminum will be the metal of choice. It is this
bright future for Alcoa and for our miracle metal that should give our
shareholders confi dence that their investment in Alcoa will grow for
many years to come. And, it is the steady progress in the face of the
economic volatility of the past year that should give our shareholders
confi dence that Alcoa has the structure, strategy and leadership to
ensure that, in good times and bad, their investment will prosper.
I am fi rmly committed to that goal. In the meantime, our investors can
be assured that “steady progress” does not mean simply hanging
on to the wheel and hoping for fair weather. It means holding to our
tried and true values during adversity as we pursue new approaches
to value creation with determination and urgency.
Alcoa’s Bright Future
Klaus Kleinfeld
Chairman of the Board and Chief Executive Offi cer
March 2013
”
LEVERAGING THE ALCOA PLATFORM
FOR PROFITABLE GROWTH
Our strategic direction is clear. We have a long-term view and the
demonstrated ability to adjust quickly to changing conditions and
deliver continuous and sustainable improvement. In this volatile and
uncertain economic environment, Alcoa is focusing on the things
we can control.
We will continue to execute our long-term strategy, driving profi table
growth by improving our cost competitiveness, growing in our strong
end markets and gaining share through product innovation.
We remain focused on annual fi nancial targets with the overarching
goal of positive free cash fl ow regardless of metal price.
• We have a target to capture productivity gains and overhead
savings of $750 million.
• We will remain focused on disciplined spend with specifi c targets
established for growth capital ($550 million), sustaining capital
($1 billion), and on the Ma’aden-Alcoa joint venture ($350 million).
•
We will continue to manage our capital structure and maintain a
debt-to-capital ratio in the range of 30%-35%.
We are committed to investment-grade credit status. Alcoa’s balance
sheet and liquidity position are strong, and we will continue to decrease
debt and manage cash conservatively to ensure ongoing liquidity.
2013 Focus