Alcoa 1998 Annual Report Download - page 48

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H. Other Assets
December 31 1998 1997
Investments, principally equity investments $ 586.2 $ 464.7
Intangibles, net of accumulated amortization
of $139.0 in 1998 and $104.0 in 1997 127.3 119.8
Noncurrent receivables 66.8 83.9
Deferred income taxes 504.8 387.9
Deferred charges and other 604.7 443.3
$1,889.8 $1,499.6
I. Other Noncurrent Liabilities and Deferred Credits
December 31 1998 1997
Deferred hedging gains $55.2 $ 101.6
Deferred alumina sales revenue 228.0 235.9
Environmental remediation 124.1 170.3
Deferred credits 335.5 161.3
Other noncurrent liabilities 844.3 602.1
$1,587.1 $1,271.2
The deferred hedging gains are associated with metal contracts
and will be reflected in future earnings concurrent with the hedged
revenues or costs.
J. Minority Interests
The following table summarizes the minority shareholders’ interests
in the equity of consolidated subsidiaries.
December 31 1998 1997
Alcoa of Australia $ 376.3 $ 390.7
Alcoa Aluminio 366.0 387.7
Alcoa Alumina and Chemicals 290.2 320.9
Alcoa Fujikura 232.6 182.7
Other majority-owned companies 210.9 157.7
$1,476.0 $1,439.7
K. Cash Flow Information
Cash payments for interest and income taxes follow.
1998 1997 1996
Interest $198.8 $145.9 $136.4
Income taxes 371.0 342.5 265.8
The details of cash payments related to acquisitions follow.
1998 1997 1996
Fair value of assets $ 5,511.0 — $365.2
Liabilities (2,554.6) — (62.4)
Stock issued (1,320.9) ——
Cash paid 1,635.5 — 302.8
Less: cash acquired 172.6 —.5
Net cash paid for acquisitions $ 1,462.9 — $302.3
L. Contingent Liabilities
Various lawsuits, claims and proceedings have been or may be
instituted or asserted against Alcoa, including those pertaining to
environmental, product liability and safety and health matters.
While the amounts claimed may be substantial, the ultimate liability
cannot now be determined because of the considerable uncertainties
that exist. Therefore, it is possible that results of operations or
liquidity in a particular period could be materially affected by
certain contingencies. However, based on facts currently available,
management believes that the disposition of matters that are
pending or asserted will not have a materially adverse effect on
the financial position of the company.
Aluminio is currently party to a hydroelectric construction
project in Brazil. Total estimated construction costs are $600, of
which the company’s share is 24%. In the event that other partici-
pants in this project fail to fufill their financial responsibilities,
Aluminio may be liable for its pro rata share of the deficiency.
AofA is party to a number of natural gas and electricity
contracts that expire between 2001 and 2022. Under these take-or-
pay contracts, AofA is obligated to pay for a minimum amount of
natural gas or electricity even if these commodities are not required
for operations. Commitments related to these contracts total $163
in1999,$166in2000,$162in2001,$158in2002,$156in2003and
$2,125 thereafter. Expenditures under these contracts totaled $171
in1998,$219in1997and$229in1996.
M. Earnings Per Share
Basic earnings per common share (EPS) amounts are computed by
dividing earnings after the deduction of preferred stock dividends
by the average number of common shares outstanding. Diluted
EPS
amounts assume the issuance of common stock for all potentially
dilutive equivalents outstanding. See Note N for additional
information.
The details of basic and diluted earnings per common share
follow.
1998 1997 1996
Net income $853.0 $805.1 $514.9
Less: preferred stock dividends 2.1 2.1 2.1
Income available to common
stockholders $850.9 $803.0 $512.8
Weighted average shares
outstanding 349,113,644 344,451,592 348,667,048
Basic
EPS $ 2.44 $ 2.33 $ 1.47
Effect of dilutive securities:
Shares issuable upon exercise
of dilutive outstanding
stock options 2,502,992 3,267,850 3,692,430
Fully diluted shares outstanding 351,616,636 347,719,442 352,359,478
Diluted EPS $ 2.42 $ 2.31 $ 1.46
N. Preferred and Common Stock
Preferred Stock. Alcoa has two classes of preferred stock. Serial
preferred stock has 557,740 shares authorized, with a par value of
$100 per share and an annual $3.75 cumulative dividend preference
per share. Class B serial preferred stock has 10 million shares
authorized (none issued) and a par value of $1 per share.
Common Stock. There are 600 million shares authorized at a par
value of $1 per share. As of December 31, 1998, 38,670,464 shares
of common stock were reserved for issuance under the long-term
stock incentive plan.