Alcoa 2000 Annual Report Download - page 55

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J. Cash Flow Information
Cash payments for interest and income taxes follow.
2000 1999 1998
Interest $388 $225 $199
Income taxes 419 394 371
The details of cash payments related to acquisitions follow.
2000 1999 1998
Fair value of assets acquired $14,991 $ 282 $ 5,511
Liabilities assumed (7,075) (159) (2,554)
Stock options issued (182) ——
Stock issued (4,502) — (1,321)
Cash paid 3,232 123 1,636
Less: cash acquired 111 1 173
Net cash paid for acquisitions $ 3,121 $ 122 $ 1,463
K. Commitments and Contingencies
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 contin-
gencies. 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 a 23.75% participant in a hydroelectric construction
project in Brazil. The total estimated costs of the project are $532, of
which $422 has been expended to date. Aluminio has contributed
$41 to the project in the form of equity and $31 in the form of short-
term financing. Aluminio has also guaranteed $42 of a bridge loan
to the project as of December 31, 2000. Long-term financing in
the amount of $342 is currently being negotiated for the project.
Upon completion of this long-term financing in 2001, Aluminio
will receive repayment of its short-term loan and will provide a guar-
antee equal to 34% of the project’s total outstanding indebtedness,
estimated at $342. As a result of this participation, Aluminio will
receive a share of the output upon completion of the project. In the
event that other participants in this project fail to fulfill their financial
responsibilities, Aluminio may be liable for a portion of the deficiency.
In accordance with the agreement, if Aluminio funds any such
deficiency, its participation and share of the output from the project
will increase proportionately.
Alcoa of Australia (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$184in2001,$177in2002,$173in2003,$174in2004,$154
in 2005 and $2,120 thereafter. Expenditures under these contracts
totaled$188in2000,$179in1999and$171in1998.
In 2000, Alcoa issued $1,500 of notes. Of these notes, $1,000
mature in 2010 and carry a coupon rate of 7.375%, and $500 mature
in 2005 and carry a coupon rate of 7.25%. In addition, Alcoa issued
$3,711 of commercial paper. The proceeds from these borrowings
were used to fund acquisitions, refinance debt and for general
corporate purposes.
In 2000, Alcoa entered into a new $2,490 revolving-credit facility
that expires in April 2001 and a $510 revolving-credit facility
that expires in August 2005. In 1998, Alcoa entered into a $2,000
revolving-credit facility, half of which expired in August 2000,
while the other half expires in August 2003. Under these agreements,
certain levels of consolidated net worth must be maintained while
commercial paper balances are outstanding. A portion of the
commercial paper issued by Alcoa is classified as long-term debt
because it is backed by the revolving-credit facilities.
Alcoa Fujikura Ltd.
(AFL) and Aluminio are required to maintain
certain financial ratios under the terms of the term loan and export
note agreements, respectively.
Short-term borrowings of $2,719 consisted of commercial paper
of $2,201, extendible commercial notes of $280 and bank and other
borrowings of $238 at December 31, 2000. Short-term borrowings
of $343 at December 31, 1999 consisted of commercial paper of
$108 and bank and other borrowings of $235. The weighted average
interest rate on short-term borrowings was 6.6% in 2000 and 5.1%
in 1999.
G. Other Assets
December 31 2000 1999
Investments, principally equity investments $ 954 $ 630
Assets held for sale 1,473 —
Intangibles, net of accumulated amortization
of$238in2000and$177in1999 821 117
Noncurrent receivables 118 43
Deferred income taxes 360 424
Deferred charges and other 1,534 591
$5,260 $1,805
H. Other Noncurrent Liabilities and Deferred Credits
December 31 2000 1999
Deferred alumina sales revenue $ 212 $ 220
Environmental remediation 369 111
Deferred credits 317 283
Other noncurrent liabilities 1,228 859
$2,126 $1,473
I. Minority Interests
The following table summarizes the minority shareholders’ interests
in the equity of consolidated subsidiaries.
December 31 2000 1999
Alcoa of Australia $ 462 $ 439
Alcoa Aluminio 256 253
Alcoa World Alumina and Chemicals 260 290
Alcoa Fujikura Ltd. 309 260
Other majority-owned companies 227 216
$1,514 $1,458
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