Alcoa 1997 Annual Report Download - page 36

535
1,394
1,713
1,279
1,888
Ca s h from Op e ra tion s
m illion s of d olla rs
97
96
95
94
93
Th e 48% in crea s e in
ca sh from op era t ion s in
1997 wa s du e to h igh e r
ea rn in gs, a $240 ca s h
re ce ip t from a lon g-term
a lu m in a su p ply con tra ct
a n d bet ter m a n agem en t
of workin g ca pita l.
22.0
15.3
16.7
21.8
19.9
De b t a s a Pe r ce n t of In ve s te d Ca p ita l
97
96
95
94
93
Th e declin e in d e bt a s a
pe rcen t of inves t ed ca pita l
wa s prim arily du e to
th e 14% red u ct ion in
lon g-t erm d eb t in 1997
re la t ive to 1996.
34
Liq uid it y an d Cap it al Re so urce s
(dolla rs in m illion s, except sh are am ou n ts)
Ca s h fro m Op e r a t io n s
Cash from operat ion s for 1997 tot aled $1,888 versu s $1,279 in 1996.
Th e in crea se wa s pr im ar ily th e r esu lt of h igher ear n ings a nd a
p rep aym en t fr om a lon g-ter m a lum in a su p ply con t ract . Sp ecial ite m
ga in s in 1997 com p a red w it h los se s in 1996 p ar t ia lly offs et t h es e
ite m s. Low er wo rkin g cap it al requ ire m e nt s for 1997 r esu lt ed in n et
ca sh in flow s of $94, com p ared w it h cash out lays of $64 in 1996.
T h e d ec re a s e in w ork in g ca p it a l r equ ire m e n t s in 1997 r ela t ive to 1996
wa s e s se nt ia lly du e t o h igh e r le vels of a ccou n t s p aya ble a n d acc r u ed
exp en s es, p ar t ia lly offs et by a de cr ea s e in t a xe s.
Ca sh ou t lays relat ed to 1996 severa nce co st s h ave be en su bst a n-
t ia lly com p let ed . Th e m a jor it y of t h e 2,900 a ffect ed e m p loye es h ave
left t h e com p a ny.
Fin a n cin g Act iv it ie s
Fin a n cin g act iv it ie s du r in g 1997 r esu lt ed in ca sh ou t flow s of $ 989
com p ared w ith $535 in 1996. Th e 1997 tot al inclu ded $604 to rep u r-
ch a s e 8,077,267 sh a r es of t h e com p a n y’s com m on st ock a t a n ave ra ge
pr ice of $74.72 per sh a re. In 1996, Alcoa u sed $317 to repu rch ase
5,402,500 sh ar es. Stock p u rch a se s in 1997 w ere pa r t ly offs et by $203
of t r e a s u r y s t oc k is s u e d p r im a r ily fo r e m p lo ye e s t ock op t io n p la n s.
Divide nd s p a id t o sh a reh olde rs we re $170 in t h e 1997 p er iod ,
a de cr ea s e of $6 4 ove r 1996. T h e differen ce wa s du e to Alcoa’sbonus
d ivide nd p rogra m , wh ich p a id ou t 10.75 ce nt s in ad dit ion t o t h e
b as e d ivide n d in e ach qu a r t er of 1996. Th e bon u s p rogr am p r ov ide s
for t h e d ist r ibu t ion in t h e follow in g yea r of 30% of Alcoa’sannual
ear n ings in exces s of $3.00 per sh are. Th ere was no bonu s d ividen d
in 1997; h oweve r, in 1998 t h e b on u s p r ogr am w ill p ay ou t a n a dd i-
t ion a l 12.5 ce n ts p er qu a r t e r ab ove t h e b as e d ivid en d of 25 ce n t s. In
t h e 1997 fir st qu a r t er, Alcoa r a ise d t h e qu a r te rly ba se d ivid en d t o
25 ce nt s pe r sh a re, a n 11% in cr ease.
Dividen d s p a id a n d r et u r n of capital to m in or it y interest s tot aled
$343 a s
AWAC an d AofA ret u r ned fu n ds to t heir inve stors in 1997.
Of t h e $343, $20 6 r e la t e s t o p a y m e n t s m a d e b y Ao fA t o it s m in o r it y
s h a r eh o ld e r s , w h ile a p a ym e n t o f $96 w a s m a d e b y
AWAC .
Paym e nt s on lon g-te r m debt du r in g 1997 exce ede d a dd it ion s b y
$218. Du r in g t h e 1997 fou r t h qu ar t er,
AFL is s u e d a $250 five -ye a r
ter m loan an d enter ed into a $250 five-yea r, revolvin g-credit facilit y.
Th e ter m loa n wa s u sed to refin a n ce ex ist in g de bt , w h ile t h e
r evolv in g-cr ed it facilit y w ill be u s ed for gen e ra l cor p or ate p u r p ose s.
High e r sh or t-t er m b or r ow in gs in 1997 rela t ive to 1996 we re a r esu lt
of h igh e r b or r ow in gs at Alcoa It alia .
Fo r 1996, Alco a h a d n e t lon g-t er m bor r ow in gs of $289. Of t h is
a m ou n t , $400 relat es to n ot e s is su e d by Alu m in io. The proceed s were
u sed to pr epay Alu m in io’s 1995 n ot es a n d for it s gen e ra l co r p or at e
pu r p ose s.
Debt a s a p erce n tage of invest ed cap it a l wa s 19.9% at t h e e n d of
1997, com p ared w ith 21.8% for 1996 an d 16.7% for 1995.
In ve s t in g Act iv it ie s
Cash u sed for invest ing act ivit ies du r ing 1997 tot aled $679, com p ar ed
w it h $1,208 in 1996 a n d $1,072 in 1995. Ca p ita l ex p en d it u re s t ot a led