NEW YORK Alcoa Inc. is
committed to its investment-grade rating and entered 2012
"managing for cash," the aluminum producers executive
vice president and chief financial officer said.
Chuck McLane told investors at a
New York briefing that Alcoas cash sustainability program
has helped the company achieve a net debt reduction of 30
percent since 2008.
Net debt fell to $7.43 billion
last year from $9.82 billion in 2008, he said.
Alcoa expects its net debt for
this year to land between $6.8 billion and $7.1 billion.
"We were (affected) very quickly
by the downturn, and weve been continually trying to
manage cash and (take) the right actions to be a stronger, more
resilient company," McLane said.
This includes disciplined
capital management to sustain and grow capital, action to
manage the companys debt maturity schedule and cash
sustainability, allowing the company to significantly
strengthen its liquidity position, he added.
The Pittsburgh-based company
exceeded its 2012 productivity target of $800 million, reaching
$838 million; and beat its $50-million overheads target,
reaching $57 million.
The company is taking a "very
prudent approach to growth capital expenditure," McLane said,
but without risking taking advantage of good opportunities that
"Weve got lots of tools at
our disposal to push for productivity gains, disciplined
capital management, reducing our days working capital and,
where necessary, asset sales," he told investors. "Were
not going to do anything stupid; itll be a disciplined
Alcoas desire to maintain
an investment-grade rating comes down to three factors: cost,
reputation and flexibility, McLane said.
Flexibility is the most
important of these, he added.
"We can easily trade in the
commercial paper market: we have no collateral issues on
joint-venture or supply agreements and we have access to
short-term loans, for instance," McLane said. "All of these
things would be challenged if we dropped below investment-grade