Alcoa 2011 Annual Report Download - page 74

There were no amounts outstanding at December 31, 2011 and no amounts were borrowed during 2011 under the
Credit Facility. There were no amounts outstanding at December 31, 2010 and no amounts were borrowed during 2011
and 2010 under the Former Credit Agreement.
In February 2011, Alcoa filed an automatic shelf registration statement with the Securities and Exchange Commission
for an indeterminate amount of securities for future issuance. This shelf registration statement replaced Alcoa’s
existing shelf registration statement (filed in March 2008). As of December 31, 2011 and 2010, $1,250 and $3,075 in
senior debt securities were issued under the respective shelf registration statements.
Alcoa’s cost of borrowing and ability to access the capital markets are affected not only by market conditions but also
by the short- and long-term debt ratings assigned to Alcoa’s debt by the major credit rating agencies.
On April 12, 2011, Standard and Poor’s Ratings Services (S&P) affirmed the following ratings for Alcoa: long-term
debt at BBB- and short-term debt at A-3. Additionally, S&P changed the current outlook from negative to stable.
On March 2, 2011, Moody’s Investors Service (Moody’s) confirmed the following ratings for Alcoa: long-term debt at
Baa3 and short-term debt at Prime-3. Additionally, Moody’s changed the current outlook from negative to stable. On
September 7, 2011, Moody’s affirmed the ratings and outlook published in its March 2, 2011 report.
On February 22, 2011, Fitch Ratings (Fitch) affirmed the following ratings for Alcoa: long-term debt at BBB- and
short-term debt at F3. Additionally, Fitch changed the current outlook from negative to stable.
Investing Activities
Cash used for investing activities was $1,852 in 2011 compared with $1,272 in 2010 and $721 in 2009.
The use of cash in 2011 was principally due to $1,287 in capital expenditures (includes costs related to environmental
control in new and expanded facilities of $148), 28% of which related to growth projects, including the Estreito
hydroelectric power project and Juruti bauxite mine development; $374 in additions to investments, mostly for the
equity contributions of $249 related to the aluminum complex joint venture in Saudi Arabia and purchase of $41 in
available-for-sale securities held by Alcoa’s captive insurance company; and $239 (net of cash acquired for the
acquisition of an aerospace fastener business); slightly offset by $54 in sales of investments, primarily related to
available-for-sale securities held by Alcoa’s captive insurance company; and $38 in proceeds from the sale of assets,
mainly attributable to the sale of land in Australia.
The use of cash in 2010 was primarily due to $1,015 in capital expenditures (includes costs related to environmental
control in new and expanded facilities of $87), 44% of which related to growth projects, including the Estreito
hydroelectric power project, Juruti bauxite mine development, and São Luís refinery expansion; $352 in additions to
investments, mostly for the equity contributions of $160 related to the joint venture in Saudi Arabia and purchase of
$126 in available-for-sale securities held by Alcoa’s captive insurance company; and $72 for acquisitions, principally
related to the purchase of a new building and construction systems business; slightly offset by $141 in sales of
investments, virtually all of which related to the sale of available-for-sale securities held by Alcoa’s captive insurance
company.
The use of cash in 2009 was mainly due to $1,622 in capital expenditures (includes costs related to environmental
control in new and expanded facilities of $59), 68% of which related to growth projects, including the São Luís
refinery expansion, Juruti bauxite mine development, and Estreito hydroelectric power project; $181 in additions to
investments, mostly for $83 in available-for-sale securities held by Alcoa’s captive insurance company and an $80
interest in a new joint venture in Saudi Arabia; and a net cash outflow of $65 for the divestiture of assets and
businesses, including a cash outflow of $204 for the EES business, cash inflows of $111 for the collection of a note
related to the 2007 sale of the Three Oaks mine and the sale of property in Vancouver, WA, and a cash inflow of $20
for the sale of the Shanghai (China) foil plant; all of which was partially offset by $1,031 from sales of investments,
mostly related to the receipt of $1,021 for the sale of an equity investment; and a net cash inflow of $112 from
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