Alcoa 2000 Annual Report Download - page 59

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The following reconciles segment information to consolidated totals.
2000 1999 1998
Sales:
Total sales $27,703 $20,112 $18,735
Elimination of intersegment sales (4,767) (3,795) (3,411)
Other revenues —616
Consolidated sales $22,936 $16,323 $15,340
Net income:
Total after-tax operating income $ 2,389 $ 1,489 $ 1,344
Elimination of intersegment profit (20) (24) (16)
Unallocated amounts (net of tax):
Interest income 40 26 64
Interest expense (278) (126) (129)
Minority interests (381) (242) (238)
Corporate expense (227) (171) (197)
Other (39) 102 25
Consolidated net income $ 1,484 $ 1,054 $ 853
Assets:
Total assets $26,569 $15,576 $16,609
Elimination of intersegment
receivables (530) (362) (378)
Unallocated amounts:
Cash, cash equivalents and
short-term investments 371 314 381
Deferred tax assets 745 657 703
Corporate goodwill 1,570 558 480
Corporate fixed assets 414 278 315
LIFO reserve (658) (645) (703)
Operations to be divested 1,473 ——
Other 1,737 690 56
Consolidated assets $31,691 $17,066 $17,463
Geographic information for revenues, based on country of origin,
and long-lived assets follows:
2000 1999 1998
Revenues:
U.S. $15,487 $10,392 $ 9,212
Australia 1,690 1,398 1,470
Spain 1,146 1,059 965
Brazil 885 730 934
Germany 713 521 554
Other 3,015 2,223 2,205
$22,936 $16,323 $15,340
Long-lived assets:
U.S. $14,276 $ 6,650 $ 6,726
Australia 1,458 1,585 1,441
Brazil 698 712 967
Canada 2,844 948 890
Germany 213 165 213
Other 1,700 1,122 1,023
$21,189 $11,182 $11,260
O. I n c o m e Ta x e s
The components of income before taxes on income were:
2000 1999 1998
U.S. $ 756 $ 631 $ 595
Foreign 2,056 1,218 1,010
$2,812 $1,849 $1,605
The provision for taxes on income consisted of:
2000 1999 1998
Current:
U.S. federal * $217 $175 $159
Foreign 568 306 219
State and local 22 18 26
807 499 404
Deferred:
U.S. federal * 90 74 81
Foreign 42 (25) 25
State and local 354
135 54 110
Total $942 $553 $514
*Includes U.S. taxes related to foreign income
In the 1999 fourth quarter, Australia reduced its corporate income
taxratefrom36%to34%for2000and30%for2001.
The exercise of employee stock options generated a tax benefit
of $108 in 2000 and $145 in 1999. This amount was credited to
additional capital and reduced current taxes payable.
Reconciliation of the U.S. federal statutory rate to Alcoa’s effective
tax rate follows.
2000 1999 1998
U.S. federal statutory rate 35.0% 35.0% 35.0%
Taxes on foreign income (3.5) (2.4) (4.1)
State taxes net of federal benefit .5 .5 .7
Tax rate changes —(2.4) —
Other 1.5 (.8) .4
Effective tax rate 33.5% 29.9% 32.0%
The components of net deferred tax assets and liabilities follow.
December 31
2000
Deferred
tax
assets
Deferred
tax
liabilities
1999
Deferred
tax
assets
Deferred
tax
liabilities
Depreciation $ — $2,263 — $ 951
Employee benefits 1,127 — $ 872 —
Loss provisions 588 — 214 —
Deferred income/expense 237 166 91 138
Tax loss carryforwards 272 — 185 —
Tax credit carryforwards 144 — 2—
Other 262 304 111 64
2,630 2,733 1,475 1,153
Valuation allowance (165) — (134) —
$2,465 $2,733 $1,341 $1,153
Of the total deferred tax assets associated with the tax loss carry-
forwards, $57 expires over the next 10 years, $99 over the next
20 years and $116 is unlimited. Of the tax credit carryforwards,
$107 is unlimited with the balance expiring over the next 10 years.
A substantial portion of the valuation allowance relates to the loss
carryforwards because the ability to generate sufficient foreign
taxable income in future years is uncertain. Approximately $60 of
the valuation allowance relates to acquired companies for which
subsequently recognized benefits will reduce goodwill.
The cumulative amount of Alcoa’s share of undistributed
earnings for which no deferred taxes have been provided was $3,861
at December 31, 2000. Management has no plans to distribute such
earnings in the foreseeable future. It is not practical to determine
the deferred tax liability on these earnings.