1. Annual Report Alcoa Co. Dustin Leslie ACG. 2071 fall A

2. Executive Summary Alcoa is the worlds largest leading producer of primary aluminum, fabricated aluminum, and alumina and is active in all major aspects of the industry. Alcoa is the worlds largest leading producer of primary aluminum, fabricated aluminum, and alumina and is active in all major aspects of the industry.

3. Part A Introduction Alcoa’s home office is located in Pittsburgh, Pennsylvania Alcoa’s home office is located in Pittsburgh, Pennsylvania The ending year of the last fiscal year is December 31, 2003 The ending year of the last fiscal year is December 31, 2003 Alcoa provides aluminum materials for the construction of aerospace, automotive, home and commercial building, and commercial transportation. Alcoa provides aluminum materials for the construction of aerospace, automotive, home and commercial building, and commercial transportation. Alcoa operates in more than 350 locations in 41 countries all over the world. Alcoa operates in more than 350 locations in 41 countries all over the world.

4. Part A. Audit Report Alcoa’s independent auditors are PriceWaterhouseCoopers.

5. Company Stock 1. Alcoa stock (AA) is traded on the New York Stock Exchange. 1. Alcoa stock (AA) is traded on the New York Stock Exchange. 2. The current stock price is $50.81 per share as of September 2004. 2. The current stock price is $50.81 per share as of September 2004. 3. Over the past year the price has varied from $35.33 to $65.15. 3. Over the past year the price has varied from $35.33 to $65.15. 4. The dividend rate is $1.40. 4. The dividend rate is $1.40.

6. Industry Situation and Company Plans In the past half dozen years, Alcoa has substantially increased its revenues and earnings and established the launching platform for significant growth to come. In the past half dozen years, Alcoa has substantially increased its revenues and earnings and established the launching platform for significant growth to come. Alcoa has added to their product lines and processing expertise. They have expanded and will expand further into the global share of markets for which Alcoa competes. Alcoa has added to their product lines and processing expertise. They have expanded and will expand further into the global share of markets for which Alcoa competes.

7. Part C: Income Statements Income Statements Income Statements 1. Alcoa is using a single-step income statement. 2. Gross Margin: 2000 - $6413.8 million 2002 - $6691 million 3. Income from Operations: 2001 $1667.5 million 2002 - $1664.7 million 4. Net Income: 2001 - $1928.8 million 2002 - $1067 million 5. Gross margin and Income from Operations stayed relatively the same for both years, but Net Income went down by almost 50% in 2002.

8. Part C: Balance Sheet Assets=Liabilities + Stockholders Equity Assets=Liabilities + Stockholders Equity 2001 – $12182.0 = $7086.6 + 5095.4 2001 – $12182.0 = $7086.6 + 5095.4 2002 -- $12609 = $7043.2 + 5565.8 2002 -- $12609 = $7043.2 + 5565.8

9. Part C: Statement Of Cash Flows 1. Cash has increased overall in the past two years. 2. 2001 cash flow from operations is less than net income, 2002 cash flow from operations is more than net income. 3. Alcoa is mainly investing in more property, plant and equipment, as well as software development. 4. Preferred and common stock is Alcoa’s main source of financing.

10. Accounting Policies: Topics in the notes to financial statements include: Topics in the notes to financial statements include: Summary of Significant Accounting Policies Summary of Significant Accounting Policies Cumulative Effect of Accounting Change Cumulative Effect of Accounting Change Mergers and Acquisitions Mergers and Acquisitions Financial Instruments and Investments Financial Instruments and Investments Debt Debt Stock Based Compensation Plans Stock Based Compensation Plans Employee Benefit Plans and Postretirement Benefits other than Pensions Employee Benefit Plans and Postretirement Benefits other than Pensions Merger and Integration Expenses and other Charges Merger and Integration Expenses and other Charges Other Comprehensive Income (Loss) Other Comprehensive Income (Loss)

11. Financial Policies Ratios2001-2003 Working Capital 495.6 million 482.7 million Current Ratio 1.41.4 Profit Margin 27%13.8% Asset Turnover.4.6 Return on Assets 10.8%8.5% Debt to Equity 1.27.70 Return on Equity 37%19.7%