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TheStreet Open House

Alcoa Reports Loss From Continuing Operations Of $0.13 Per Share; Income Of $0.03 Per Share Excluding Special Items

Alcoa (NYSE:AA) today reported a loss from continuing operations of $143 million, or $0.13 per share, which includes special items of $175 million, primarily related to environmental remediation of the Grasse River in New York State, and the settlement of a civil lawsuit brought by Aluminium Bahrain (Alba) that had been pending in the U.S. District Court in Pittsburgh. Excluding the negative impact of special items, income from continuing operations was $32 million, or $0.03 per share.

The Company reported performance improvements across all segments and solid revenue of $5.8 billion despite a 5 percent decline in realized aluminum prices sequentially and 17 percent year-on-year.

“Markets seem to be driven more by headlines than fundamentals right now, but Alcoa remains focused on the things within our control”, said Klaus Kleinfeld, Chairman and CEO.

“We’re capitalizing on pockets of strong growth and achieving record profitability in our mid and downstream businesses. We’re improving performance in the upstream while optimizing our assets, and across the board we’re driving productivity gains.”

Third quarter 2012 net loss of $143 million, or $0.13 per share, compared to a net loss of $2 million, or $0.00 per share, in second quarter 2012, and net income of $172 million, or $0.15 per share, in third quarter 2011. Adjusted EBITDA for the third quarter was $282 million, down 45 percent from second quarter 2012 mainly due to lower realized prices and special items.

Special items in third quarter 2012 included reserves for environmental remediation, a net discrete tax charge, uninsured losses related to a fire at the Massena, New York site, the negative impact of mark-to-market changes on certain energy contracts, and restructuring and other charges.

Additionally, Alcoa confirmed it has entered into a settlement agreement with Aluminium Bahrain B.S.C. ("Alba") resolving a civil lawsuit that had been pending in the U.S. District Court for the Western District of Pennsylvania since 2008. Without admitting any liability, Alcoa agreed to make a cash payment to Alba of $85 million payable in two installments. One half was made at settlement and the other half will be made one year later. The settlement amount is within the range Alcoa previously estimated as its reasonably possible losses, which it disclosed in its second quarter 2012 earnings announcement. Alcoa said the settlement with Alba represents the best possible outcome and avoids the time and expense of complex litigation.

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