Alcoa 2001 Annual Report Download - page 40

0100999897
Revenues by Segment
billions of dollars
Packaging and Consumer
Alumina and Chemicals
Primary Metals
Other
Flat-Rolled Products
Engineered Products
0.5
0.9 0.8
2.1 2.7
2.0
1.8
1.9
2.1 2.0
1.6
2.1
2.2
3.7 3.4
2.9
2.5 2.6
4.1 3.7
4.2
4.9 5.1
5.4 5.0
2.1
3.1 3.7
5.5 6.1
13.3
15.3 16.3
22.9 22.9
38
Engineered Products
2001 2000 1999
Third-party aluminum shipments (mt) 932 1,061 989
Third-party sales $6,098 $5,471 $3,728
Intersegment sales 35 62 26
Total sales $6,133 $5,533 $3,754
After-tax operating income $ 173 $ 210 $ 180
This segment includes hard- and soft-alloy extrusions, including
architectural extrusions, super-alloy castings, steel and aluminum
fasteners, aluminum forgings and wheels. These products serve the
transportation, building and construction and distributor markets
and are sold directly to customers and through distributors.
In 2001, third-party sales increased 11% primarily due to a full-
year’s results of the 2000 acquisitions of Reynolds, Cordant and
British Aluminium, partially offset by a decrease in volume, mainly
in North America, due to weakness in the transportation and distrib-
utor markets. In 2000, third-party sales increased 47% primarily
due to the acquisitions of Reynolds and Cordant, as well as price
increases in other businesses. The aluminum shipment data for
this segment was not impacted in 2001 and 2000 by the additions
of Huck and Howmet, which produce revenues but do not have
third-party aluminum shipments.
ATOI for Engineered Products decreased 18% from 2000 to $173
in 2001. This decrease is primarily due to decreased volumes as a
result of weak market conditions and the impact of exchange rate
fluctuations in Brazil, partially offset by the positive impact of acqui-
sitions and cost-reduction efforts.
ATOI in 2000 increased by 17%
from 1999 to $210 due to the impact of acquisitions, primarily Huck
and Howmet, offset by a decline in other U.S. and European busi-
nesses as a result of the overall decline in the transportation market.
Packaging and Consumer
2001 2000 1999
Third-party aluminum shipments (mt) 143 119 9
Third-party sales $2,720 $2,084 $801
After-tax operating income $ 185 $ 131 $ 68
This segment includes foodservice, flexible packaging, consumer
products and packaging graphics design, as well as closures, PET
(polyethylene terephthalate) bottles and packaging machinery. The
principal products in this segment include aluminum foil; plastic
wraps and bags; metal and plastic beverage and food closures; pre-
press services; and plastic shrink film and wraps. Consumer products
are marketed under brands including Reynolds Wrap, Diamond姞,
Baco and Cut-Rite姞wax paper. Products are sold directly to custom-
ers, consisting of various retail chains and commercial foodservice
distributors. Sales in this segment are dependent on a relatively small
number of customers.
Third-party sales were $2,720 in 2001, an increase of $636 over
2000. The increase is primarily due to the full-year results of the
Reynolds acquisition, as well as several smaller acquisitions in 2000.
Third-party sales were $2,084 in 2000, up $1,283 from 1999 due
to the acquisition of Reynolds packaging and consumer businesses
in 2000.
ATOI increased 41% in 2001 from 2000 due primarily to acquisi-
tions as well as improved volumes in closures sales. ATOI increased by
93% in 2000 from 1999 due to the acquisition of the Reynolds pack-
aging and consumer businesses.
Seasonal increases generally occur in the third and fourth quarters
of the year for such products as consumer foil and plastic wraps and
bags, while seasonal slowdowns for closures generally occur in the
fourth quarter of the year.
Other
2001 2000 1999
Third-party aluminum shipments (mt) 228 187 56
Third-party sales $3,702 $4,071 $2,592
After-tax operating income $47 $ 164 $ 118
This group includes other Alcoa businesses that are not included
in the segments previously mentioned. This group includes AFL ,
which produces fiber-optic cable and provides services to the tele-
communications industry and produces electrical components for
the automotive industry; residential building products operations,
Alcoa Building Products
(ABP) ; automotive parts businesses; Thiokol,
a producer of solid rocket propulsion systems (Thiokol was sold
in April 2001); and Reynolds’ metal distribution business, RASCO
(in November 2001, the net assets of RASCO were contributed to a
joint venture, Integris Metals, Inc., in which Alcoa retains a 50%
equity interest). Products in this segment are generally sold directly
to customers or through distributors. AFL sales are dependent on
a relatively small number of customers. Seasonal increases in the
building products business generally occur in the second and third
quarters of the year.
In 2001, third-party sales were down 9% due primarily to the sale
of Thiokol in 2001, as well as lower volumes and prices in the
AFL
automotive and telecommunications businesses. These decreases