8-KFinancial EventsExhibits & Filings

Howmet Aerospace Inc. 8-K Report, Exit or Disposal Costs (Jan 21, 2014)

Filed January 21, 2014For Securities:HWM

Summary

This 8-K filing from Alcoa Inc. (now Howmet Aerospace Inc. under a different corporate structure, but the filing is under Alcoa at this time) reports on the decision to permanently shut down and demolish two remaining Soderberg technology potlines at its Massena East smelter in New York. This action is a continuation of a broader review of smelting capacity and is expected to be completed by the end of the first quarter of 2014. Investors should note that Alcoa anticipates recording significant restructuring-related charges in the first quarter of 2014, estimated between $90 million and $110 million ($60 million to $70 million after-tax), which translates to approximately $0.06 per diluted share. A portion of these charges, estimated between $55 million and $65 million, will result in future cash outlays. Further details and potential additional charges will be disclosed in subsequent filings.

Key Highlights

  • 1Alcoa Inc. is permanently shutting down and demolishing two Soderberg technology potlines at its Massena East smelter.
  • 2The shutdown is expected to be completed by the end of Q1 2014.
  • 3Demolition and remediation activities are scheduled from Q2 2014 through 2020.
  • 4Restructuring charges are estimated between $90 million and $110 million ($60-70 million after-tax) in Q1 2014.
  • 5The charges translate to an estimated impact of $0.06 per diluted share.
  • 6Approximately $55-$65 million of these charges will involve future cash outlays.
  • 7This action is part of a larger review of smelting capacity initiated in May 2013.

Frequently Asked Questions

The main event is Alcoa Inc.'s decision to permanently shut down and demolish two remaining potlines at its Massena East smelter in New York, which use Soderberg technology.

Alcoa expects to record restructuring charges between $90 million and $110 million in the first quarter of 2014. After-tax, this is estimated at $60 million to $70 million, or approximately $0.06 per diluted share.

Yes, approximately $55 million to $65 million of the total charges are expected to result in future cash outlays, with $25 million to $35 million anticipated in 2014.

Additional details, including any further charges recognized in future periods, will be provided in Alcoa's Form 10-Q for the quarterly period ended March 31, 2014.