Alcoa 2013 Annual Report Download - page 203

Days Working Capital
Quarter ended
March 31,
2012
June 30,
2012
September 30,
2012
December 31,
2012
March 31,
2013
June 30,
2013
September 30,
2013
December 31,
2013
Receivables from
customers, less
allowances $1,526 $1,575 $1,619 $1,399 $1,680 $1,354 $1,422 $1,221
Add: Deferred purchase
price receivable* 254 141 81 18 15 377 285 248
Receivables from
customers, less
allowances, as adjusted 1,780 1,716 1,700 1,417 1,695 1,731 1,707 1,469
Add: Inventories 3,097 3,051 2,973 2,825 2,982 2,905 2,893 2,705
Less: Accounts payable,
trade 2,734 2,633 2,590 2,702 2,860 2,920 2,816 2,960
Working capital $2,143 $2,134 $2,083 $1,540 $1,817 $1,716 $1,784 $1,214
Sales $6,006 $5,963 $5,833 $5,898 $5,833 $5,849 $5,765 $5,585
Days working capital 32 33 33 24 28 27 28 20
Days Working Capital = Working Capital divided by (Sales/number of days in the quarter).
* The deferred purchase price receivable relates to an arrangement to sell certain customer receivables to several financial
institutions on a recurring basis. Alcoa is adding back this receivable for the purposes of the Days Working Capital calculation.
Reconciliation of Net Debt
December 31,
2013 2012 2011 2010 2009 2008 2007 2006
Short-term borrowings $ 57 $ 53 $ 62 $ 92 $ 176 $ 478 $ 563 $ 460
Commercial paper – – 224 – – 1,535 856 1,472
Long-term debt due within one year 655 465 445 231 669 56 202 510
Long-term debt, less amount due within
one year 7,607 8,311 8,640 8,842 8,974 8,509 6,371 4,777
Total debt 8,319 8,829 9,371 9,165 9,819 10,578 7,992 7,219
Less: Cash and cash equivalents 1,437 1,861 1,939 1,543 1,481 762 483 506
Net debt $ 6,882 $ 6,968 $ 7,432 $ 7,622 $ 8,338 $ 9,816 $ 7,509 $ 6,713
Net Debt is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because
management assesses Alcoa’s leverage position after factoring in available cash that could be used to repay outstanding debt.
Reconciliation of Adjusted EBITDA
Year ended
December 31,
2013 2012
Net (loss) income attributable to Alcoa $ (2,285) $ 191
Add:
Net income (loss) attributable to noncontrolling interests 41 (29)
Provision for income taxes 428 162
Other income, net (25) (341)
Interest expense 453 490
Restructuring and other charges* 782 172
Impairment of goodwill 1,731 –
Provision for depreciation, depletion, and amortization 1,421 1,460
Adjusted EBITDA $ 2,546 $ 2,105
Alcoa’s definition of Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) is net margin plus an add-
back for depreciation, depletion, and amortization. Net margin is equivalent to Sales minus the following items: Cost of goods
sold; Selling, general administrative, and other expenses; Research and development expenses; and Provision for depreciation,
depletion, and amortization. Adjusted EBITDA is a non-GAAP financial measure. Management believes that this measure is
meaningful to investors because Adjusted EBITDA provides additional information with respect to Alcoa’s operating performance
and the Company’s ability to meet its financial obligations. The Adjusted EBITDA presented may not be comparable to similarly
titled measures of other companies.
* A charge for the civil portion of a legal matter was reclassified in the 2012 period to conform to the presentation of related
charges in the 2013 period (see Notes D and N to the Consolidated Financial Statements in Part II Item 8 of Alcoa’s 2013
Form 10-K).