SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 6, 2012 (December 31, 2011)
(Exact name of Registrant as specified in its charter)
(State or Other Jurisdiction
|390 Park Avenue, New York, New York||10022-4608|
|(Address of Principal Executive Offices)||(Zip Code)|
Office of Investor Relations 212-836-2674
Office of the Secretary 212-836-2732
(Registrants telephone number, including area code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
|¨||Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)|
|¨||Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)|
|¨||Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))|
|¨||Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))|
|Item 2.05||Costs Associated with Exit or Disposal Activities.|
On December 31, 2011, management approved the permanent shutdown and demolition of certain facilities at two U.S. locations, each of which was previously temporarily idled for different reasons. The identified facilities are the smelter located in Alcoa, Tennessee (capacity of 215,000 metric-tons-per-year) and two potlines (capacity of 76,000 metric-tons-per-year) at the smelter located in Rockdale, Texas (remaining capacity of 191,000 metric-tons-per-year composed of four potlines). Demolition and remediation activities related to these actions will begin in the first half of 2012 and are expected to be completed in 2015 for the Tennessee smelter and in 2013 for the two potlines at the Rockdale smelter.
This decision was made after a comprehensive strategic analysis was performed to determine the best course of action for each facility. Factors leading to this decision were in general focused on achieving sustained competitiveness and included specifically: lack of an economically viable, long-term power solution; changed market fundamentals; cost competitiveness; required future capital investment; and restart costs; among others.
As a result of this decision, management expects to record a charge of approximately $165 million ($105 million after-tax), composed of non-cash asset impairments of approximately $130 million ($85 million after-tax) and cash expenditures for environmental and asset retirement obligations of approximately $35 million ($20 million after-tax), in the quarter ended December 31, 2011. Additionally, management expects to record charges of $50 to $55 million for demolition costs and holding costs during the period from 2012 through 2016.
Amounts are still being finalized. Additional details of these actions will be provided in Alcoas 2011 Form 10-K.
A copy of Alcoas press release announcing these actions is attached hereto as Exhibit 99 and is incorporated herein by reference.
|Item 2.06||Material Impairments.|
The information set forth above in Item 2.05, Costs Associated with Exit or Disposal Activities relating to the asset impairment charges expected to be recorded by Alcoa in the quarter ended December 31, 2011 is incorporated herein by reference.
|Item 8.01||Other Events.|
Total restructuring-related charges for fourth quarter 2011, principally composed of the actions set forth above in Item 2.05, Costs Associated with Exit or Disposal Activities, are expected to be between $155 million and $165 million after-tax, or $0.15 to $0.16 per share, of which approximately 60% is non-cash.
|Item 9.01||Financial Statements and Exhibits.|
The following is filed as an exhibit to this report:
|99||Alcoa Inc. press release dated January 5, 2012.|
This report contains statements that relate to future events and expectations and, as such, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those containing such words as anticipates, believes, estimates, expects, forecasts, hopes, outlook, plans, projects, should, targets, will, will likely result, or other words of similar meaning. All statements that reflect Alcoas expectations, assumptions or projections about the future other than statements of historical fact are forward-looking statements, including, without limitation, forecasts concerning aluminum industry growth or other trend projections, anticipated financial results or operating performance, and statements about Alcoas strategies, objectives, goals, targets, outlook, and business and financial prospects. Forward-looking statements are subject to a number of known and unknown risks, uncertainties and other factors and are not guarantees of future performance. Actual results, performance or outcomes may differ materially from those expressed in or implied by those forward-looking statements. Important factors that could cause Alcoas actual results to differ materially from those expressed or implied in the forward-looking statements include: (a) the inability to complete the demolition, remediation or other activities related to the permanently closed facilities within the time periods anticipated, whether due to changes in regulations, technology or other factors; (b) changes in preliminary accounting estimates due to the significant judgments and assumptions required; and (c) the other risk factors discussed in Part I, Item 1A of Alcoas Form 10-K for the year ended December 31, 2010, as well as other reports filed with the Securities and Exchange Commission. Alcoa disclaims any intention or obligation to update publicly any forward-looking statements, whether in response to new information, future events or otherwise, except as required by applicable law.
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|Graeme W. Bottger|
|Vice President and Controller|
Dated: January 6, 2012
|99||Alcoa Inc. press release dated January 5, 2012.|
FOR IMMEDIATE RELEASE
|Michael E. Belwood|
Alcoa to Close or Curtail
531,000 Metric Tons of Smelting Capacity
12 Percent Reduction in System Capacity will improve cost position and competitiveness
NEW YORK Jan. 5, 2012 Alcoa (NYSE: AA) announced today that it intends to close or curtail approximately 531,000 metric tons, or 12 percent of its global smelting capacity, to lower the Companys position on the global aluminum cost curve and improve Alcoas competitiveness.
The Company will permanently close its smelter in Alcoa, Tennessee, which was curtailed in 2009, along with two of the six idled potlines at its Rockdale, Texas smelter. Together, these closures will reduce Alcoas global smelting capacity of 4.5 million metric tons per year by 291,000 metric tons, or about 7 percent.
The curtailments, to be announced in the near future, will reduce Alcoas global smelting capacity by an additional 240,000 metric tons, or about 5 percent.
These are difficult but necessary steps to improve Alcoas competitiveness, preserve and grow shareholder value and protect jobs in the rest of the Alcoa system, said Alcoa Chairman and CEO Klaus Kleinfeld.
Aluminum prices have fallen more than 27 percent from their peak in 2011. In addition to the curtailments, the Company will accelerate actions to reduce the escalating cost of raw materials.
Kleinfeld added that Alcoa will work with all affected communities to explore ways to redevelop closed facilities and will consult with employees and work unions/councils impacted by curtailments. We recognize our responsibility to the people and communities of the affected facilities, he said.
The curtailments are expected to be complete by the first half of 2012. Alcoas alumina production will be reduced across the global refining system to reflect the final curtailments in
smelting as well as prevailing market conditions. The curtailments will contribute to the Companys long-term goal of lowering Alcoas position on the world aluminum production cost curve by 10 percentage points.
Total restructuring-related charges for fourth quarter 2011, principally composed of the above actions, are expected to be between $155 million and $165 million after-tax, or $0.15 to $0.16 per share, of which approximately 60 percent is non-cash.
Alcoa is the worlds leading producer of primary and fabricated aluminum, as well as the worlds largest miner of bauxite and refiner of alumina. In addition to inventing the modern-day aluminum industry, Alcoa innovation has been behind major milestones in the aerospace, automotive, packaging, building and construction, commercial transportation, consumer electronics and industrial markets over the past 120 years. Among the solutions Alcoa markets are flat-rolled products, hard alloy extrusions, and forgings, as well as Alcoa® wheels, fastening systems, precision and investment castings, and building systems in addition to its expertise in other light metals such as titanium and nickel-based super alloys. Sustainability is an integral part of Alcoas operating practices and the product design and engineering it provides to customers. Alcoa has been a member of the Dow Jones Sustainability Index for 10 consecutive years and approximately 75 percent of all of the aluminum ever produced since 1888 is still in active use today. Alcoa employs approximately 61,000 people in 31 countries across the world. More information can be found at www.alcoa.com.
This release contains statements that relate to future events and expectations and as such constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those containing such words as anticipates, estimates, expects, goal, plans, should, will or other words of similar meaning. All statements that reflect Alcoas expectations, assumptions or projections about the future other than statements of historical fact are forward-looking statements, including, without limitation, forecasts concerning global demand for aluminum or other trend projections, anticipated financial results or operating performance, and statements about Alcoas strategies, goals, targets, outlook and business and financial prospects. Forward-looking statements are subject to a number of known and unknown risks, uncertainties, and other factors and are not guarantees of future performance. Important factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements include: (a) material adverse changes in aluminum industry conditions, including global supply and demand conditions and fluctuations in London Metal Exchange-based prices for primary aluminum, alumina and other products; (b) deterioration in global economic or financial market conditions generally; (c) unfavorable changes in the end markets served by Alcoa, including automotive, aerospace, building and construction, distribution, packaging, and industrial gas turbine markets; (d) Alcoas inability to mitigate impacts from increases in energy costs or the costs of other raw materials, including aluminum fluoride, calcined petroleum coke, cathodes, anodes, caustic soda or liquid pitch; (e) Alcoas inability to achieve the level of cost savings, improvement in profitability and margins, revenue growth, cash generation, fiscal discipline, or strengthening of operations (including moving its smelting and refining businesses down on the industry cost curve and increasing revenues in its Flat-Rolled Products and Engineered Products and Solutions segments) anticipated from its restructuring programs, productivity improvement, cash sustainability and other initiatives; (f) political, economic, and regulatory risks in the countries in which Alcoa operates or sells products, including the impact of changes in foreign currency exchange rates on
costs and results, and unfavorable changes in laws and governmental policies, civil unrest, and other events beyond Alcoas control; (g) the outcome of contingencies, including legal proceedings, government investigations, and environmental remediation; and (h) the other risk factors summarized in Alcoas Form 10-K for the year ended December 31, 2010, Forms 10-Q for the quarters ended March 31, 2011, June 30, 2011 and September 30, 2011, and other reports filed with the Securities and Exchange Commission. Alcoa disclaims any obligation to update publicly any forward-looking statements, whether in response to new information, future events or otherwise, except as required by applicable law.
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