Alcoa finished its fourth quarter 2009 with a positive free cash flow, the first such quarterly achievement since the second quarter of 2008, when the economic downturn began to impact results. The company is ahead of its key financial goals for 2009, including being free cash flow neutral by the end of the year.
In the fourth quarter of 2009, Alcoa generated free cash flow of $761 million, a $947 million improvement from the third quarter of 2009, driven by strong cash from operations performance of $1.1 billion, a $940 million increase from the third quarter of 2009. The company also surpassed targets for each of its Cash Sustainability Program initiatives in 2009, a major contributor to the strong cash performance.
The fourth quarter of 2009 showed a loss from continuing operations of $266 million, or $0.27 per share. The results include net charges for restructuring, special items and discrete tax items of $275 million, or $0.28 per share. Excluding these charges, the company demonstrated its second consecutive profitable quarter. The third quarter of 2009 had income from continuing operations of $73 million, or $0.07 per share. The fourth quarter of 2008 showed a loss from continuing operations of $929 million, or $1.16 per share.
Net income for the fourth quarter of 2009 was a loss of $277 million, or $0.28 per share, which includes the unfavorable impact of $275 million, or $0.28 per share, for restructuring, special items and discrete tax items. Net income for the third quarter of 2009 was $77 million, or $0.08 per share, and net income for the fourth quarter of 2008 was a loss of $1.19 billion, or $1.49 per share.
Revenues for the fourth quarter of 2009 were $5.4 billion, an 18% increase from the third quarter of 2009. Except for aerospace, commercial building and construction, and industrial gas turbines, all markets improved from the previous quarter. Revenues in the 2008 fourth quarter were $5.7 billion.
For the full year 2009, revenues were $18.4 billion, compared to $26.9 billion in 2008. Income from continuing operations for 2009 showed a loss of $985 million, or $1.06 per share, compared with income of $229 million, or $0.27 per share, in 2008. The full year 2009 showed a net loss of $1.15 billion, or $1.23 per share, compared to a net loss of $74 million, or $0.10 per share, in 2008.
After-tax operating income (ATOI) for the Alumina segment in the fourth quarter was $19 million, a decline of $46 million compared with third quarter ATOI of $65 million. The prior period included a $58 million benefit from the company’s acquisition of the remaining share of its business in Suriname. Increased pricing and all-time record production and third-party shipments, along with lower costs driven by productivity and lower caustic prices, were partially offset by a weaker U.S. dollar. Additionally, a tax settlement related to an equity investment in Brazil yielded a $30 million charge while Juruti start-up costs negatively affected the segment by $14 million sequentially.
Additional details are available at www.alcoa.com