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pn .2 Ii L PLAINTIFFS EXHIBIT Alcoa Year-End 1989 Fact Book AR 0855 Alcoa in Brief ZJ lcoa is the world's largest aluminum company, with 1989 Z JL revenues and assets each exceeding $11 billion. The company employs 61,000 people at 152 operating and sales locations in 20 countries. Products made by Alcoa are used around the world in airplanes, automobiles, beverage containers, buildings, chemicals, food packages and a wide array of other consumer and industrial applications. The company's aluminum production system encompasses operations at every step of the aluminum-making process: Alcoa mines bauxite, refines alumina from bauxite, smelts alumina into primary aluminum ingot, and fabricates ingot into semi-finished and finished products that are sold worldwide. Alumina and aluminum ingot also are sold to others. Other products include alumina chemicals and products that are engineered to add value to alumina, aluminum and other materials. In addition, the company leads the aluminum industry in collecting and recycling used aluminum beverage cans. Alcoa is a technology leader in the aluminum industry and operates the world's largest light metals research laboratory. The company also generates electricity for some of its smelters and operates shipping companies that transport Alcoa products. There are four principal sources of Alcoa's revenues: Metals and Chemicals, Aerospace and Industrial Products, Packaging Systems, and Materials Science. Contents 2 Alcoa in Brief 3 Financial Highlights 3 Corporate and Stock Data 4 Quality 4 Research and Development 5 The World of Alcoa 6 Operations 10 Operating Locations 12 Aluminum Industry Data 14 Recycling Sources of 1989 Revenues 37% Metals and Chemicals 28% Aerospace and Industrial Products ft 27% Packaging Systems 6% Materials Science 2% Other 2 AR 0856 Financial Highlights Alcoa and subsidiaries (dollars in millions, except per share amounts) Operating Results Revenues Net income Cash flow from operations Cost of goods as a percent of sales Return on shareholders' equity Return on invested capital Aluminum shipments (000 metric tons) Financial Position Working capital Total assets Noncurrent long-term debt Shareholders' equity Debt as a percent of invested capital Common Share Data Net income Dividends paid Book value Corporate and Stock Data 1989 $11,161.5 $944.9 $1,970.8 67.3% 19.1% 19.2% 2.579 1988 $9,935.6 $861.4 $1,717.1 66.6% 20.2% 16.2% 2,504 % Change Dividends per Common Share 12 10 15 1 (5) 19 3 S3-00 $1,594.9 $11,540.6 $1,316.3 SS.266.9 16% SI.307.9 $10,537.5 $1,524.7 S4.635.5 21% 22 10 (14) 14 (24) 89 $10.67 S2.72 $59.41 $9.74 SI.30 S51.76 10 109 15 Corporate Headquarters Alcoa 1501 Alcoa Building Pittsburgh, Pa. 15219 Office of the Secretary (412) 553-4707 Office of the Treasurer (412) 553-4705 Analyst contact (412) 553-2451 Stock Exchange Listings Ticker tape symbol--AA Alcoa common stock is traded on the New York Stock Exchange and European exchanges in Basel, Brussels, Frankfurt. Geneva, Lausanne, London and Zurich. Alcoa preferred stock is traded on the American Stock Exchange. Dividends Alcoa's dividend policy, established in 1989, provides a base quarterly dividend of 40 cents per common share and an additional dividend of 30% of annual earnings above $6.00 per share. Dividend Dates > Dividends are declared by Alcoa's board of directors at their meetings in January, March, July and September. > Common stock dividends are paid on the 25th of February, May, August and November. > Preferred stock dividends are paid on the first of January. April, July and October. > Dividend record dates are the first Fridays in February, May, August and November. Meetings of the Board of Directors On selected Fridays in January, March, May, July, September and November. Capital Stock (as of December 31, 1989) > $3.75 cumulative preferred stock: par value $100; 660,000 shares authorized; 659,909 shares outstanding > Class B serial preferred stock: par value $1; 10 million shares authorized; none issued > Common stock: par value $1; 300 million shares authorized; 87,548,433 shares outstanding Transfer Agents-Registrars > Common stock: Pittsburgh National Bank, First Chicago Trust Company of New York > Preferred stock: First Chicago Trust Company of New York Trading Ranges of Alcoa Common Stock vs. S&P 500 28 M9 85 86 87 88 89 Price/Earnings Ratios of Alcoa vs. S&P 500 Index Meunngt S&P 500 index range Loss in year--nol meaningful 85 86 67 88 89 3 AR 0857 Quality. uality at Alcoa is a permanent commit ment to be the best aluminum company in the world, a world o( escalating competition where "good enough" will never again be good enough to win. Quality at Alcoa is centered on customer satisfaction, employee involvement, continuous improvement and managing for quality. Customer Satisfaction Alcoa measures success by customer satisfac tion. Listening to customers, understanding their needs, and continuously improving products, processes and services are growing preoccupations. The customers for many in Alcoa are other Alcoa people who add value to products and services. Satisfying each inter nal customer ensures that the company's ultimate customers--those who purchase Alcoa's products and services--are satisfied. Continuous Improvement Quality at Alcoa is a process, replete with the tools, disciplines, training and tracking mechanisms to make it real and to make it work. Alcoa's 8-step Quality Improvement Process guides employees through a system atic, fact-based method of exploring and analyzing issues, and choosing and testing courses of action. This helps to ensure that improvement actions are based on facts and statistics, rather than on unverified intuition. Employee Involvement Quality improvement efforts often require cooperative effort among several people to be truly successful. Alcoa's quality process helps people come together in teams to draw on each person's talents and experiences to develop the right solutions and implement them effectively. Teamwork also improves communication and fosters stronger collective ownership of new ideas. Managing for Quality Everyone helps manage quality by knowing customer needs, understanding their roles and accountabilities, and planning how they can improve their processes. Beyond this, every Alcoa manager must: > foster open and effective two-way communications; > set clear priorities for quality improvements; > consider and respond to all recommendations; > accept the risks that go along with trying new approaches; > meet commitments to their customers; > set and achieve quality goals; > recognize outstanding individual and team efforts; and > provide the leadership, training, tools and support needed to be successful. Research and Development he three principal areas of focus for Alcoa's research and development programs and recent successes in each area are: 1) Provide current Alcoa businesses with competitive manufacturing advantages. Recent developments include: processes that improve current efficiency and reduce energy consumption in smelting; high-rate scrap melting; salt-aided melting to reduce melt losses; advanced sensors for automatic surface, ultrasonic and dimensional inspection of aluminum products; control systems for hot and cold rolling mills; mill scheduling systems; in-line metal treatment systems: automated ingot casting systems; advanced lubricants for ingot casting, hot and cold rolling, and forging operations; expert systems for maintenance diagnostics, statistical control, and forging die design; and computeraided product design for forging dies, and container ends and bodies. 2) Provide design, manufacturing, tests, evaluation and characterization lor new materials and products. Recent developments include: lightweight aluminum beverage cans that weigh 25 pounds per 1,000 cans; aluminum food cans; aluminum foil and foil laminate products for packaging containers and lids; microwavable aluminum trays; ductile die castings, thin-wall extrusions and joining techniques for aluminum-intensive vehicles; reflective aluminum sheet for light fixtures; highly formable aluminum sheet products for automobile bodies; high-strength, brighter automotive trim products; new aluminum alloys for aircraft wings and fuse lages; arall Laminates for aircraft; aluminumlithium alloys for aircraft; specialty chemicals for wastewater treatment, hazardous waste remediation and fire retardant applications; ceramic matrix composite products for airframes and engines; polymer matrix com posites for aerospace applications; armor systems; and manufacturing methods for composite materials. Research and Development Expenditures (millions of dollars) 3) Develop and apply the scientific knowledge base required to satisfy demands for consis tent, high quality materials, manufacturing processes and products. Recent developments include: fundamental physical and chemical understanding of materials; mathematic models and simulations of material structures and processing methods; and better integration of design of materials, processes and products. 4 AR 0858 The World ofAlcoa The numbers shown represent the number of operations for each category in each country. Bauxite, alumina and chemicals Primary aluminum Fabricated aluminum products Other products and power generation Laboratories and sales offices World headquarters A lcoa's 152 operating and sales locations Z-l in 20 countries serve markets in J. -L. developing and industrialized econo mies around the world. In developing economies--such as those in Latin America, the Pacific Rim and Asia--typical uses for Alcoa products are in household utensils, buildings for farms and homes, cars and trucks, tractors and electrical power lines. In industrialized nations such as Japan, the U.S. and West Germany, uses for Alcoa products expand to include highly-engineered aluminum beverage cans and bottle caps, aircraft wings and fuselage skins, automobile components, aluminum and vinyl building products for homes, and fire-retardant chemi cal additives. Increased demand for aluminum in both types of economies, accompanied by higher alumina and aluminum prices, have contributed to Alcoa's worldwide earnings growth in recent years. The U.S. is the largest market for aluminum and the home of 56% of Alcoa's assets. Operating profits from Alcoa's U.S. operations, excluding special items, grew at a 25% compound annual rate from 1985-1989 and accounted for 31% of 1989 operating profits. Alcoa's businesses outside the U.S. have increased their profitability at a faster rate, mainly due to higher prices and increased shipments of alumina and primary aluminum ingot. Operating profits from these operations grew at a 63% compound annual rate from 1985-1989 and accounted for 69% of the 1989 total. As worldwide aluminum demand continues to grow, Alcoa is positioned to grow with it. 5 AR 0859 Operations Aluminum Production and Shipments (thousands of metric tons) Primary aluminum capacity Consolidated Total, including affiliates and joint ventures Primary aluminum production Consolidated Total, including affiliates and joint ventures Consolidated aluminum shipments Primary Fabricated and finished products Total 1989 1,894 2,395 1.876 2,391 960 1.619 2.579 1988 1,756 2.231 1.814 2,250 796 1.708 2.504 1987 1.689 2.076 1.498 1,851 493 1.720 2.213 1986 1.659 2.046 1.401 1.662 452 1.563 2.015 1985 1.481 1.739 L492 1,735 521 1.624 2,145 Revenues (dollars in millions) Metals and Chemicals $4,066 Operations* Uses of Products Alumina Australia, Brazil, Jamaica, Suriname, U.S. Primary aluminum, alumina chemicals Primary aluminum Consolidated: Australia, Brazil, Suriname, U.S. Affiliates and joint ventures: Australia, Brazil, Mexico. Norway Fabricated aluminum products Alumina chemicals Australia, Brazil, Japan, The Netherlands, Singapore, U.S., West Germany Adhesives, calcium aluminate cement, catalysts, ceramics, chemicals, china, coatings, cosmetics, counter top materials, crystal, cultured marble, dentures, detergents, fire retardant fillers for acrylics and plastics, glass, paper, plastics, polishes, refractories, separations systems, toothpaste, waxes Aluminum powder Brazil, U.S. Aluminum powder metallurgy alloys, explosives, propellants, paint pigments Magnesium US. Bauxite Australia, Brazil, Jamaica, Suriname, U.S. Aluminum alloys Alumina Aluminum fluoride US. Aluminum smelting Refractory systems U.S. Molten metal melting and conveying systems 'Listed in order of contribution to revenues. 6 - ~~ 7 AR 0860 Revenues (dollars in millions) Aerospace and Industrial Products 28% $3,088 85 86 87 88 69 Operations* Fabricated products Aluminum extrusions Brazil, Spain, The Netherlands, UK.. US. Aluminum sheet Brazil, The Netherlands, U.S. Aluminum plate US. Aluminum, magnesium, titanium and steel forgings France, U.S. Aluminum wire, rod and bar U.S. Aluminum tube US. Aluminum castings US. Finished products Building products-- aluminum and vinyl siding, downspouts, gutters, fascia, shutters and accessories; wood windows US. Aluminum wheels US. Refrigerators and small appliances US. Memory disks U.S. Aluminum bumpers and trim U.S. Reflective light fixtures US. continued on next page Uses of Products Aircraft parts; door and window frames for automobiles, trucks and buildings; interior building structures--shower stalls, partitions, wall panels, ceilings; electrical bus bar, conductor and piping; automobile radiators Aircraft fuselages, wings and other parts; automobile bumpers, bodies and trim; appliances and electronic equipment: air conditioners, computers and computer memory disks, heaters, refrigerators; boats and ships; building products: architectural sheet, siding, shingles, fascia, trim, gutters, downspouts; lithographic printing plates; military vehicles; pipe jackets; railroad cars; reflectors for fluorescent light fixtures; spiral ducts; Venetian blinds; wrap for cable Aircraft wings and structural parts; boats and ships: bowling alleys; bus bar used in electrical transmission: forms and molds; machining and tooling; military vehicles; space vehicles: trucks Aircraft landing gear, engine, fan and structural parts; automobile wheels and suspension parts; machinery and equipment parts; military vehicles; missiles; truck wheels Aircraft and defense parts: hydraulic connectors, cartridge cases, fuse bodies, sonar devices and optical scanners; automotive brake parts, valves and pistons; nails; rivets, particularly for aircraft; screens for windows and doors; screws; welding and brazing electrode and rod; zippers Automobile transmission parts; baseball bats; electrical transmission bus conductor; pipes; printing and copying machines Aircraft parts; automobile suspension parts and wheels Homes Aircraft, automobiles, recreational vehicles and trucks Boats; homes and businesses: recreational vehicles Mainframe computers, cad-cam systems Automobiles Commercial buildings: offices, stores, hospitals 7 , AR 0861 ---------------- ^------ - - riiimii ' ~7 Revenues (dollars in millions) Aerospace and Industrial Products (continued) Revenues (dollars in millions) Packaging Systems 52.218 52.231 $2,880 S2.904 85 86 87 88 89 Operations* Uses of Products 1 ARALL Laminates US. Aircraft structures Greenhouse systems The Netherlands Commercial growers of Sowers, mushrooms, vegetables Ceiling systems The Netherlands Office buildings Forged engine blades France Jet engine compressors Forged pistons France Automobile engines Aluminum poles The Netherlands Lights, flags 'Listed in order o( contribution to revenues. Operations* Uses of Products Rigid packaging Aluminum sheet Australia, U.K., U.S. Beverage cans; food cans Closures and closure equipment Aluminum closures Japan, Spain, U.S., West Germany Bottles of soft drinks, beer, wine, juices, water and food Plastic closures Japan, Spain, U.S., West Germany Bottles of soft drinks, liquor, wine, juices, water and food; containers for pharmaceuticals, motor oil and chemicals Capping and decapping machines, bottle sorters, plastic cap molding machines, accessory equipment U.S., West Germany Bottling lines Flexible packaging Foil laminates US. Gift wrap: household insulation; packages for snacks, juices, cereal, candy, cigarettes and other products; packaging labels Aluminum foil Brazil, Mexico, US. Fin stock for heaters and air conditioners; formed containers for frozen foods, some of which can be used in microwave ovens; foil laminates Packaging machinery Packaging machinery and equipment U.S. Beverage and food production and filling lines *Listed in order of contribution to revenues. 8 AR 0862 Revenues (dollars in minions) Materials Science $637 $631 $641 86 66 87 88 89 Operations' Electrical products Uses of Products Wire harnesses and power distribution systems Mexico, U.S. Automobiles and trucks Fiber optic products US. Electrical transmission in automobiles and from electric utilities; voice and data communications for commercial and military computer and telecommunications systems, including long-distance telephone carrier systems; grounding of electrical lines Aluminum and copper electrical conductor Brazil Electrical transmission systems Electrical conductor accessories US. Electrical transmission systems Separations products Materials, filters, membranes, equipment components and systems France, U.S. Removing elements from liquids and gases in industrial processes; purifying foods, beverages and drugs; treating and purifying water; removing contaminants and valuable materials from industrial wastes: recovering and treating elements that leach from municipal landfills; removing water from oil extracted at offshore oil drilling sites Aerospace and defense products Helicopter blades, missile domes, aircraft wing flaps, and carrier doors US. Military helicopters, missiles, commercial and military aircraft, naval ships Manufacturing equipment US. Production of composite materials and aerospace structures made from these materials Ceramic products Electronic packages US. Housings for semiconductor chips and other electronic circuits within computers Listed in order of contribution to revenues. 9 AR 0863 Operating Locations Australia Alcoa of Australia Limited: Del Park, Hunlly Jarrahdolc. Willowdale Kwinana, Ptnjarra Point Henry Portlandt Wagerup Brazil Alcoa Aluminio S.A.: Cotia Guarulhos Pxndamonhangaba Pocos de Caldas Sorocaba Tubardo Alconor S.A.: llapissuma Alumar Consortium: Sdo Luis Forest Nordeste. S.A.: Cabo lfema S.A.: Vargrem Grande France Forges de Bologne: Bologne Societe de Ceramique Technique: Tarbes Guinea Halco (Mining). Inc.: Sangaredil Jamaica Alcoa Minerals of Jamaica. Inc.: Clarendon Japan Alcoa Kasei Limited: Naoetsu Moraico, Limited: Iwakuni City Shibazaki Seisakusho Limited: Tokyo Alexico Alcoa Fujikura Ltd.: Acuna, Piedras Ncgras Almexa Aluminio. S.A. de C.V.: Pueblat Tulpetlac + Mexico Cityl Aluminio. S.A. de C.V.: Veracruzt The Netherlands Alcoa Chemie Nederland B.V.: Rotterdam Alcoa Nederland B.V.: Drunen Burgerhout B.V.: Assen Intal B.V.: Geldermalsen Sypla Systeemplanning B.V.: Vlaardingen Norway Mosal Aluminium: Listat. Mosjoenl Spain Capsulas Metalicas S.A.: Barcelona Extrudal. S.A.: Vails, Tarapona Suriname Suriname Aluminum Co.: Moengo Paranam / ^_C;-? A?' of * if *' <?* J0 c/ /5* iVC oc*A&-V* dC^ir*^5Vc* fCr <f ^ d N Jf ^ <e <*?* <- <fS & __ L2_ I 1 I l i i || | 1 | | I I i | | 11 l1 ii * |1 i1 1 I 10 AR 0864 /* sJ- /v /A //: /,4/ i.> J-' it Jr ., V a? <* ^ & ? ^ United Kingdom Alcoa Manufacturing (G.B.) Ltd.: Swansea United States Alcoa: Alcoa, Tenn.; Evansville, Ind. Badin, N.C. Bauxite. Ark.; Fort Meade, Fla.; Mobile, Ala. Cleveland, Ohio Davenport, Iowa Lafayette, Ind. Lebanon. Pa. Massena, N. Y. Point Comfort, Texas Richmond, Ind. Rockdale, Texas Vernon, Ca. Vidalia, La. Wenatchee, Wash. Alcoa/Coastal Products Co.: Houston, Texas Alcoa Composites, Inc.: Monrovia. Ca. Springdale, Utah; Santa Ana, Ca. Alcoa Electronic Packaging, Inc.: San Diego, Ca. Alcoa Fujikura Ltd.: Houston, Miss. Maltawan, Mich.; Nashville. Tenn. North Royalton, Ohio; Ripley, Miss. Spartanburg. S.C. Alcoa Packaging Machinery. Inc.: Denver, Colo. Randolph, N. Y. Alcotec Wire Co.: Traverse City, Mich. Autoprod, Inc.: Clearwater, Fla. Dalton Alumina and Chemicals Co.: Dalton, Go. H-C Industries, Inc.: Crawfordsville, Ind. Olive Branch. Miss. Illinois Water Treatment Co.: Rockford. III. Lancy International, Inc.: Warrendale, Pa. ML Systems, Inc.: Vahalla, N. Y. Northwest Alloys, Inc.: Addy, Wash. Norton/Alcoa Proppant Co.: Fort Smith. Ark. Permatech, Inc.: Graham, N.C. Pimalco. Inc.: Chandler. Ariz. Southco Metal Services. Inc.: Atlanta, Ga. Texas Engineered Products Co.: El Paso, Texas The StoUe Corp.: Sidney, Ohio Dayton, Ohio: Denison, Texas; Drew, Miss. Gaffney, 5.C.; Medford, Ore.; Princeville, lit. Rantout, III.; South Bend, Ind.; Stuarts Draft, Va. Tifton Aluminum Co., Inc.: Delhi, La.; Tifton, Ga. Vancouver Extrusion Co., Inc.: Vancouver, Wash. m West Germany Alcoa Chemie GmbH: Ludwigsha/cn Alcoa Deutschland GmbH: Tellig, Viernheim, Worms am Rhein * Includes aluminum fluoride, computer memory disks, gold mining, magnesium, pigments and powder tMinority interest 1 1 1 ! 1 1 1 I ! 1 1 1 u AR 0865 Aluminum Industry Data Major U.S. Markets for Aluminumt (millions of pounds) Market Containers and packaging Transportation Building and construction Electrical Consumer durables Machinery and equipment Exports Other (including statistical adjustment) 1986 Amount of total 4.247 3.025 3.157 1.381 1.190 845 911 584 27.7 19.7 20.6 9.0 7.8 5.5 5.9 3.8 Total 15,340 100.0 Source: The Aluminum Association Aluminum Statistical Review for 1938 tLatest data available at time of publication Average annual compound growth rate. 1978*1988 NM--not meaningful U.S. Aluminum Industry Shipments 1987 Amount % of total 4,524 3.307 3,177 1,368 1.271 883 1.255 491 27.8 20.3 19.5 8.4 7.8 5.5 7.7 3.0 16,276 100.0 1988 Amount % of total 4.489 3.456 2.905 1.485 1.309 973 1.734 7 16.358 27.4 21.1 17.8 9.1 8.0 5.9 10.6 0.1 100.0 Growth rate* 3.6% 0.9 -1.0 -0.1 0.8 -0.8 8.8 NM 1.3 Average U.S. Market Price for Primary Unalloyed Ingot (millions of pounds; excludes mill product imports to consumers) Product Ingot Castings 1987 3.141.0 2.231.2 1988 3,180.7 2.430.1 1989 3,076.3 NA Growth rate*: -0.7% : NA Mill Products Foil, plate, sheet Sheet Foil Plate Extrusions and tube Bar, rod. wire Forgings and impacts Powder and paste 12.233.9 8.245.0 7.110.2 866.3 268.5 2.754.9 985.6 156.3 92.1 11.614.5 8.333.0 7.085.5 949.5 298.0 2.724.3 301.0 165.9 90.3 11,656.5 8.490.3 7.292.1 887.9 310.3 2.671.2 244.9 157.1 93.0 0.4 >7 2.0 0 0.4 0.6 -14.9 -0.1 -3.0 ! ! ' ! | Total 15.374.9 14,795.2 14,732.8 0.1 ! Sources: 1987 and 1988--The Aluminum Association Aluminum Statistical Review for 1988 1989--The Aluminum Association The Aluminum Situation, February 7990<preliminary data) Average annual compound growth rate. 1979*1989 na--not available at time of publication Year 1979 19S0 1981 1982 1984 1985 1986 1987 1988 1989 Source: McGraw-Hill Metals Week Cents per pound 70.7 j76.1 59.8 46.8 68.3 ; 61.1 48.8 55.9 72.3 110.1 87.8 U.S. Aluminum Exports and Imports (millions of pounds) Exports Ingot Mill products Other (including scrap) Total 1987 619.9 635.7 812.3 2,067.9 1988 882.0 851.5 1.072.8 2,806.3 1989 1.310.6 1.095.8 1.292.3 3,698.7 Growth rate* I 12.6% 5.8 7.7 8.5 Imports Ingot Mill products Other (including scrap) Total 2.745.9 1.005.1 420.5 4,171.5 2.264.7 969.9 457.1 3.691.7 2.040.6 942.2 490.6 3.473.4 6.0 8.3 12.8 7.3 Sources: 1987 and 1988--The Aluminum Association Aluminum Statistical Review for 1988 1989---The Aluminum Association The Aluminum Situation, February J990(preliminary data) Average annual compound growth rate. 1979-1989 12 AR 0866 World Primary Aluminum Production (thousands of metric tons) Country 1987 1988 North America Canada Mexico United States 4,943 1,540 60 3.343 5,548 1,535 68 3,945 Europe Common Market Countries France Greece Italy Netherlands United Kingdom West Germany European Free Trade Association Austria Iceland Norway Sweden Switzerland 3,114 1.983 323 126 233 269 294 738 1.131 93 85 798 82 73 3,195 2,018 328 149 226 271 300 744 1.177 96 83 827 99 72 South America Argentina Brazil Suriname Venezuela 1,441 155 844 2 440 1,484 157 874 10 443 Oceania Australia New Zealand 1,276 1,024 252 1,397 1,141 256 Asia Bahrain India Indonesia Iran Japan South Korea Turkey United Arab Emirates Africa Cameroon Egypt Ghana South Africa Other China--People's Republic Czechoslovakia East Germany Hungary Poland Romania Spain USSR Yugoslavia World Total 950 180 268 201 45 41 17 42 156 572 72 179 150 171 3,980 550 32 62 74 48 260 341 2.370 243 16,276 1,016 183 335 185 40 35 18 57 163 597 80 181 164 172 4,085 610 32 61 75 48 250 294 2.440 275 17,322 Source: World Bureau of Metal Statistics World Metal Statistics Yearbook 1990 Average annual compound growth rate, 1979-1989 NA--not available NM--not meaningful 1989 5,669 1,555 84 4.030 3,224 2,015 335 148 219 274 297 742 1,209 93 89 859 97 71 1,608 162 888 12 546 1,501 1.241 260 1,123 186 422 199 40 35 16 57 168 604 87 160 169 168 NA 700 27 NA 75 NA NA 352 NA 293 NA Growth rate 0.4% 6.1 6.9 -1.2 0.2 -0.7 -1.6 0.5 -2.0 0.7 -1.9 0 1.9 0 2.1 2.5 1.7 -1.5 9.9 3.2 14.1 -15.3 10.3 13.5 16.5 5.4 -2.2 4.0 7.3 NM 13.8 -28.6 -1.2 5.9 NM 4.3 7.6 5.9 0 6.9 NA 6.9 -3.1 NA 0.4 NA NA 3.1 NA 5.7 NA Western World Primary Aluminum Capacity--1989 M% North Amcnca 27% Europe 13% Asia and Atnca 12% South America 10% Oceania Source: Alcoa estimate 13 AR 0867 Recycling A lcoa's largest volume product line is ZJ aluminum sheet used in beverage cans J- JL and food cans. The company is the leader in the U.S. aluminum can sheet market, the world's largest, and has growing positions in Europe and Asia. Over 95% of the beverage cans and about 10% of the food cans in the U.S. are aluminum. Can makers like aluminum because of its quality and light weight that help reduce can making costs. Consumers prefer aluminum cans over containers made from other mate rials, because aluminum cans chill quickly, are unbreakable, easy to open, can be easilyrecycled, and have a higher recycling value. Of the estimated 125 billion beverage cans sold in the world each year, 80% are alumi num. About half of the aluminum cans made in the world each year are recycled. In the U.S., over 80 billion aluminum cans were produced in 1989, and 61% of these were recycled. Aluminum cans are recycled at an estimated 10,000 recycling centers in the U.S. and at many others throughout the world, including several European nations, Australia, Canada and Japan. Recycling centers are operated by metals producers, supermarkets, entre preneurs, bottlers, brewers, can makers, beaprage distributors, scrap dealers and dpouinity groups. Can recycling: > has created more than 40,000 jobs in the U.S. and countless others around the world at recycling centers, aluminum companies, railroads, trucking companies and processing equipment builders; > reduces litter and waste disposed of at municipal landfills; > saves natural resources by providing a source of aluminum without mining bauxite; > saves 95% of the energy required to produce aluminum from bauxite: and > lowers capital costs because recycling facilities can be built at a fraction of the cost and time required to build new refining and smelting facilities. Alcoa annually recycles more aluminum cans in the U.S. than any other aluminum producer. Alcoa's network consists of over 2,400 aluminum can recycling centers. Alcoa recycling centers recycle aluminum food cans as well as aluminum beverage cans. Alcoa's recycling network collected 17.1 billion used cans for recycling in 1989, or about 68 cans for each American. This accounted for 35% of the aluminum cans recycled in the country in 1989. Aluminum supplied to Alcoa through recycling reduces the company's primary aluminum requirements. In 1989, recycled cans provided 277,000 metric tons of alumi num to Alcoa. This amount is greater than the annual capacity of an average aluminum smelter and equals about 15% of Alcoa's 1989 primary aluminum production. In the 1980s, Alcoa recycled 126 billion cans in the U.S., or 39% of the total recycled by the aluminum industry during the decade. All told, the U.S. aluminum industry recycled 323 billion aluminum cans in the U.S. in the decade, or about 51% of the estimated 627 billion aluminum cans made during that time. World Aluminum Can Recycling* U.S. Europe japan Canada Australia U.S. and Europe: 1989 Japan. Canada and Australia: 1988 Billions of cans produced 81.3 7.1 7.0 3.2 2.3 ' % Recycled 61 16 42 65 56 Aluminum Cans Recycled in the U.S. (billions of cans) 0 ALCOA Alcoa 1501 Alcoa Building Pittsburgh. Pa. 15219 (412) 553*4545 14 Printed in USA 9005 Form A04-12288 ( AR 0868