Alcoa and Alba Resolve Civil Litigation
Companies Also Enter Into Long-Term Alumina Supply Agreement
Alcoa (NYSE:AA) ('Alcoa?) confirmed today that 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.
Based on the settlement agreement with Alba, Alcoa recorded a $40
million charge ($15 million after-tax and noncontrolling interest) in
the third quarter in addition to the $45 million charge ($18 million
after-tax and noncontrolling interest) it recorded in the second
quarter. Alcoa estimates an additional possible after-tax charge of
approximately $25-30 million to reflect an agreement between the
shareholders of Alcoa World Alumina LLC regarding the cash costs of the
settlement of the Alba civil lawsuit; such charge would be recognized in
the event that a settlement is reached with the Department of Justice
and the Securities and Exchange Commission regarding their
investigations.
Alcoa and Alba have also resumed a commercial relationship and have
entered into an Alumina Price Index-based, long-term alumina supply
agreement, demonstrating a mutual desire to work together going forward
and the significant value that Alcoa brings to customers in the region
through superior quality and optimal logistics of its alumina.
About Alcoa
Alcoa is the world′s leading producer of primary aluminum and fabricated
aluminum, as well as the world′s 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 superalloys. Sustainability is an integral
part of Alcoa′s operating practices and the product design and
engineering it provides to customers. Alcoa has been a member of the Dow
Jones Sustainability Index for 11 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.
Forward-Looking Statements
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
'expects,? 'estimates,? 'would,? 'will,? or other words of similar
meaning. All statements that reflect Alcoa′s expectations, assumptions
or projections about the future other than statements of historical fact
are forward-looking statements. 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, and fluctuations in
indexed-based and spot prices for alumina; (b) deterioration in global
economic and financial market conditions generally, or unfavorable
changes in the markets served by Alcoa; (c) the outcome of
contingencies, including legal proceedings and government
investigations; and (d) the other risk factors summarized in Alcoa′s
Form 10-K for the year ended December 31, 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.
Alcoa
Investor Contact
Kelly Pasterick, 212-836-2674
or
Media
Contact
Libby Archell, 212-836-2719
