SEC Filing | Howmet Aerospace Inc.

View:

                          FORM 10-Q

               SECURITIES AND EXCHANGE COMMISSION
                                
                     Washington, D.C.  20549
                                
                                

     (Mark One)
      / X /  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) 
                OF THE SECURITIES EXCHANGE ACT OF 1934

                              OR

      /   /  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934


For the Quarter Ended June 30, 1995  Commission File Number 1-3610


                   ALUMINUM COMPANY OF AMERICA
                                
                                
     (Exact name of registrant as specified in its charter)
                                

     PENNSYLVANIA                     25-0317820

(State of incorporation)  (I.R.S. Employer Identification No.)
                                
              425 Sixth Avenue - Alcoa Building, 
             Pittsburgh, Pennsylvania   15219-1850
             
(Address of principal executive offices)(Zip Code)
                                

           Office of Investor Relations  412-553-3042
           Office of the Secretary       412-553-4707
                                
       (Registrant's telephone number including area code)
                                
     Indicate by check mark whether the registrant (1) has 
filed all reports required to be filed by Section 13 or 
15(d) of the Securities Exchange Act of 1934 during the 
preceding 12 months, and (2) has been subject to such filing 
requirements for the past 90 days.

                                        Yes  X    No

     As of August 7, 1995, 178,494,892 shares of common 
stock, par value $1.00, of the Registrant were outstanding.

                          -1-


                 PART I - FINANCIAL INFORMATION




Alcoa and subsidiaries
Consolidated Balance Sheet
(in millions)



                                                          (unaudited)        
                                                           June 30,         December 31
ASSETS                                                       1995               1994
                                                        ----------------  ---------------        
                                                                    
Current assets:                                              
  Cash and cash equivalents (includes cash of $88.2 in 
  1995 and $177.5 in 1994)                                 $   700.6         $   619.2
  Short-term investments                                         6.5               5.5
  Accounts receivable from customers, less allowances:
    1995-$42.4; 1994-$37.4                                   1,638.1           1,440.6
  Receivable from Western Mining Corporation (WMC), net          -               366.9
  Other receivables                                            275.3             182.5
  Inventories (b)                                            1,499.1           1,144.2
  Deferred income taxes                                        386.0             235.6
  Prepaid expenses and other current assets                    189.4             158.7
                                                           ---------         ---------
    Total current assets                                     4,695.0           4,153.2
                                                             
Properties, plants and equipment, at cost                   14,658.8          14,502.3
Less, accumulated depreciation, depletion and                
  amortization                                               8,045.9           7,812.9
                                                           ---------         ---------
    Net properties, plants and equipment                     6,612.9           6,689.4
                                                           ---------         ---------
Other assets                                                 1,569.1           1,510.6
                                                           ---------         ---------
  Total assets                                             $12,877.0         $12,353.2
                                                           =========         =========
                                                             
LIABILITIES                                                  
Current liabilities:                                         
  Short-term borrowings                                    $   304.4         $   261.9
  Accounts payable, trade                                      758.7             739.3
  Accrued compensation and retirement costs                    354.6             363.9
  Taxes, including taxes on income                             355.4             393.0
  Provision for layoffs and impairments                         57.8              84.4
  Other current liabilities                                    330.3             557.0
  Long-term debt due within one year                           120.9             154.0
                                                           ---------         ---------
    Total current liabilities                                2,282.1           2,553.5
                                                           ---------         ---------
Long-term debt, less amount due within one year              1,043.6           1,029.8
Accrued postretirement benefits                              1,839.6           1,850.5
Other noncurrent liabilities and deferred credits            1,595.1           1,011.8
Deferred income taxes                                          269.4             220.6
                                                           ---------         ---------
    Total liabilities                                        7,029.8           6,666.2
                                                           ---------         ---------

MINORITY INTERESTS                                           1,581.8           1,687.8
                                                           ---------         ---------

SHAREHOLDERS' EQUITY
Preferred stock                                                 55.8              55.8
Common stock                                                   178.9             178.7
Additional capital                                             673.1             663.5
Translation adjustment                                         (91.2)            (68.6)
Retained earnings                                            3,493.8           3,173.9
Unfunded pension obligation                                     (3.6)             (4.0)
Treasury stock, at cost                                        (41.4)              (.1)
                                                           ---------         ---------
    Total shareholders' equity                               4,265.4           3,999.2
                                                           ---------         ---------
     Total liabilities and shareholders' equity            $12,877.0         $12,353.2
                                                           =========         =========


                        (see accompanying notes)


                          -2-




Alcoa and subsidiaries
Statement of Consolidated Income (unaudited)
(in millions, except per share amounts)



                                                 Second quarter         Six months
                                                     ended                 ended
                                                    June 30               June 30
                                                    -------               -------
                                                                    
                                                 1995       1994       1995      1994
                                                 ----       ----       ----      ----
                                                                   
REVENUES                                                        
Sales and operating revenues                  $3,117.3   $2,479.3   $6,127.1   $4,700.9
Other income                                      37.9       11.3       57.6       18.8
                                               -------    -------    -------    -------
                                               3,155.2    2,490.6    6,184.7    4,719.7
                                               -------    -------    -------    -------
COSTS AND EXPENSES
Cost of goods sold and operating expenses      2,312.9    1,977.3    4,491.7    3,725.2
Selling, general administrative and other
  expenses                                       169.5      157.5      337.3      297.7
Research and development expenses                 32.1       29.4       64.1       61.1
Provision for depreciation, depletion and                                  
  amortization                                   172.9      159.5      343.6      332.9
Interest expense                                  26.0       27.5       50.9       53.0
Taxes other than payroll and severance
  taxes                                           33.1       22.0       66.1       50.4
Special items (c)                                  -          -          -         79.7
                                               -------    -------    -------    -------
                                               2,746.5    2,373.2    5,353.7    4,600.0
                                               -------    -------    -------    -------

EARNINGS                                                        
  Income before taxes on income                  408.7      117.4      831.0      119.7
Provision for taxes on income (d)                126.3       38.7      269.6       39.5
                                               -------    -------    -------    -------
  Income from operations                         282.4       78.7      561.4       80.2
Less: Minority interests' share                  (63.0)     (33.3)    (148.2)     (75.2)
                                               -------    -------    -------    -------
Income before extraordinary loss                 219.4       45.4      413.2        5.0
Extraordinary loss on debt prepayment,
  net of $40.4 tax benefit (e)                     -          -          -        (67.9)
                                               -------    -------    -------    -------
                                                                
NET INCOME (LOSS)                             $  219.4   $   45.4   $  413.2   $  (62.9)
                                               =======    =======    =======    =======

Earnings per common share: (f)                                  
  Before extraordinary loss                   $   1.23   $    .25   $   2.31   $    .02
  Extraordinary loss                              -          -          -          (.38)
                                               -------    -------    -------    -------
Earnings per common share                     $   1.23   $    .25   $   2.31   $   (.36)

Dividends paid per common share               $   .225   $    .20   $    .45   $    .40
                                               =======    =======    =======    =======

                                
                    (see accompanying notes)


                          -3-




Alcoa and subsidiaries
Statement of Consolidated Cash Flows (unaudited)
(in millions)
                                                                 Six months ended
                                                                      June 30
                                                                      -------
                                                               1995            1994
                                                            ---------       ---------
                                                                      
CASH FROM OPERATIONS                                         
Net income (loss)                                           $   413.4       $   (62.9)
Adjustments to reconcile net income (loss) to cash from 
operations:
  Depreciation, depletion and amortization                      352.2           340.9
  Reduction of assets to net realizable value                     -              32.8
  Change in deferred income taxes                               (35.6)         (127.3)
  Equity income before additional taxes, net of dividends       (18.4)           (5.8)
  Provision for special items                                     -              46.9
  Gains from financing and investing activities                  (1.5)           (1.9)
  Book value of asset disposals                                   7.6             6.6
  Extraordinary loss                                                -            67.9
  Minority interests                                            148.2            75.2
  Other                                                          12.6            21.6
  Increase in receivables                                      (188.5)         (153.8)
  (Increase) reduction in inventories                          (376.6)           54.6
  (Increase) reduction in prepaid expenses and other            (33.1)          103.3
    current assets
  Increase (reduction) in accounts payable and accrued         (229.0)           50.2
    expenses
  Reduction in taxes, including taxes on income                 (28.9)           (6.1)  
  Payment of amortized interest on deep discount bonds            -              (8.6)
  Net change in noncurrent assets and liabilities               491.6            32.5
                                                              -------         -------
    CASH FROM OPERATIONS                                        514.0           466.1
                                                              -------         -------
                                                             
FINANCING ACTIVITIES
Net changes in short-term borrowings                             44.0           (75.0)
Common stock issued and treasury stock sold                      30.5            29.2
Repurchase of common stock                                      (74.0)            -
Dividends paid to shareholders                                  (81.4)          (71.5)
Dividends paid to minority interests                            (55.2)          (68.9)
Additions to long-term debt                                      75.5           414.2
Payments on long-term debt                                      (95.5)         (637.7)
                                                              -------         -------
    CASH USED FOR FINANCING ACTIVITIES                         (156.1)         (409.7)
                                                              -------         -------
                                                             
INVESTING ACTIVITIES                                         
Capital expenditures                                           (340.3)         (257.8)
Additions to investments                                         (7.1)           (1.3)
Net change in short-term investments                             (1.0)          153.0
Changes in minority interests                                  (151.3)          (91.3)
Loan to WMC                                                    (121.8)            -
Net proceeds from Alcoa/WMC transaction                         366.9             -
Other - receipts                                                  3.9             3.0
      - payments                                                (18.3)          (16.6)
                                                              -------         -------
    CASH USED FOR INVESTING ACTIVITIES                         (269.0)         (211.0)
                                                              -------         -------
                                                             
EFFECT OF EXCHANGE RATE CHANGES ON CASH                          (7.5)           14.4
                                                              -------         -------
                                                             
CHANGES IN CASH                                              
Net change in cash and cash equivalents                          81.4          (140.2)
Cash and cash equivalents at beginning of year                  619.2           411.7
                                                              -------         -------
    CASH AND CASH EQUIVALENTS AT END OF PERIOD               $  700.6        $  271.5
                                                              =======         =======

                        (see accompanying notes)
   

                          -4-


           Notes to Consolidated Financial Statements
               (in millions, except share amounts)
   
Notes:
   
(a)  Summarized consolidated financial data for Alcoa 
     Aluminio S.A. (Aluminio) and Alcoa of Australia 
     Limited (AofA) begin on page 14.
   
(b)  Inventories consisted of:
                                   June 30        December 31
                                     1995            1994
                                 -----------     -------------
                                                 
     Finished goods              $  328.6          $  249.6
     Work in process                584.8             456.1
     Bauxite and alumina            242.8             195.2
     Purchased raw materials        226.0             131.0
     Operating supplies             116.9             112.3
                                  -------           -------
                                 $1,499.1          $1,144.2
   
     Approximately 54.4% of total inventories at June 30, 
     1995 was valued on a LIFO basis.  If valued on an 
     average cost basis, total inventories would have been 
     $757.5 and $691.9 higher at June 30, 1995 and 
     December 31, 1994, respectively.
   
(c)  The special charge of $79.7 in the 1994 six-month period 
     was for closing part of a forgings and extrusion plant 
     in Vernon, California.  The charge included $32.8 for 
     asset write-offs and $46.9 related mostly to severance 
     costs.
   
(d)  The income tax provision for the period is based on the 
     effective tax rate expected to be applicable for the 
     full year.  The difference between the 1995 estimated 
     effective tax rate of 32.5% and the U.S. statutory rate 
     of 35% is primarily due to lower taxes on income earned 
     outside the U.S.
   
(e)  The extraordinary loss in the 1994 six-month period of 
     $67.9, or 38 cents per common share, resulted from the 
     early redemption of $225 face value of 7% deep discount 
     debentures due 2011.
   
(f)  The following formula is used to compute primary
     earnings per common share (EPS):
   
     EPS = Net income - preferred dividend requirements
           --------------------------------------------
           Weighted average number of common shares
           outstanding for the period
   
     The average number of shares used to compute primary 
     earnings per common share was 178,424,528 in 1995 and 
     177,414,490 in 1994.  Fully diluted earnings per 
     common share are not stated since the dilution is not 
     material.
   
     Per share amounts for 1994 have been restated to
     reflect the two-for-one stock split which occurred 
     in February, 1995.
   
                          -5-
   
   ------------------------
    In the opinion of the company, the financial statements
    and summarized financial data in this Form 10-Q report
    include all adjustments, including those of a normal
    recurring nature, necessary to fairly state the results
    for the periods.  This Form 10-Q report should be read
    in conjunction with the company's annual report on Form
    10-K for the year ended December 31, 1994.
   
    The financial data required in this Form 10-Q by Rule
    10-01 of Regulation S-X have been reviewed by Coopers &
    Lybrand L.L.P., the company's independent certified
    public accountants, as described in their report on
    page 7.
   
                          -6-

   
Independent Auditor's Review Report
   
To the Shareholders and Board of Directors
Aluminum Company of America (Alcoa)
   
   
     We have reviewed the unaudited consolidated balance
sheet of Alcoa and subsidiaries as of June 30, 1995, the
unaudited statements of consolidated income for the three-
month and six-month periods ended June 30, 1995 and 1994,
and consolidated cash flows for the six-month periods
ended June 30, 1995 and 1994, which are included in
Alcoa's Form 10-Q for the period ended June 30, 1995.
These financial statements are the responsibility of
Alcoa's management.
   
     We conducted our review in accordance with standards
established by the American Institute of Certified Public
Accountants.  A review of interim financial information
consists principally of applying analytical procedures to
financial data and making inquiries of persons
responsible for financial and accounting matters.  It is
substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards,
the objective of which is the expression of an opinion
regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
 
     Based on our review, we are not aware of any material
modifications that should be made to the consolidated
financial statements referred to above for them to be in
conformity with generally accepted accounting principles.
 
     We have previously audited, in accordance with
generally accepted auditing standards, the consolidated
balance sheet of Alcoa and subsidiaries as of December 31, 
1994, and the related statements of consolidated income, 
shareholders' equity, and cash flows for the year then 
ended (not presented herein).  In our report dated 
January 11, 1995, we expressed an unqualified opinion on
those consolidated financial statements.  In our opinion,
the information set forth in the accompanying condensed
consolidated balance sheet as of December 31, 1994 is
fairly stated, in all material respects, in relation to
the consolidated balance sheet from which it has been
derived.
   
   
   
/s/ COOPERS & LYBRAND L.L.P.
   
   
COOPERS & LYBRAND L.L.P.
   
Pittsburgh, Pennsylvania
July 7, 1995
   
                          -7-

   


Management's Discussion and Analysis of the
Results of Operations and Financial Condition
(dollars in millions, except share amounts)

Results of Operations

Principal income and operating data follow.

                                     Second quarter ended    Six months ended
                                           June 30                June 30
                                           -------                -------
                                        1995      1994         1995      1994
                                        ----      ----         ----      ----
                                                           
 Sales and operating revenues        $3,117.3  $2,479.3     $6,127.1  $4,700.9
 Income before extraordinary loss       219.4      45.4        413.2       5.0
 Net income (loss)                      219.4      45.4        413.2     (62.9)
 Earnings (loss) per common share
    Before extraordinary loss            1.23       .25         2.31       .02
    Net income (loss)                    1.23       .25         2.31      (.36)
 Shipments of aluminum products (1)       627       661        1,281     1,261
__________________________

(1)  in thousands of metric tons (mt)



Overview
Alcoa earned $219.4, or $1.23 per common share, for the 
second quarter of 1995.  For the comparable 1994 quarter, 
earnings were $45.4, or 25 cents per share.  For the first 
half of 1995, earnings were $413.2 million, or $2.31 per 
share, compared with $55.0 million or 30 cents per share 
before after-tax charges for the 1994 period.  After the 
charges, the company reported a loss of $62.9 million or 
36 cents per share for the 1994 period.

The two charges included in the 1994 first half were: a 
special charge of $50.0 ($79.7 pretax), or 28 cents per 
share, for closing part of a forgings and extrusion plant 
in Vernon, California; and an extraordinary loss of $67.9, 
or 38 cents per share, for the early redemption of 7% 
debentures due 2011 that carried an effective interest rate 
of 14.7%.

AofA's pretax income from operations for the 1995 second 
quarter and year-to-date periods increased $27.6 and $62.3, 
respectively, from the comparable 1994 periods.  The increase 
was primarily due to higher shipments and prices for ingot 
and flat-rolled products along with higher prices for alumina 
and higher shipments of chemical products.

In Brazil, Aluminio's second quarter 1995 pretax income from
operations was $42.6, an increase of $26.4 from the 1994 
second quarter.  Year-to-date, pretax income was $102.2, up 
$74.8 from the 1994 period.  Revenues grew 41% and 58%, 
respectively, from the 1994 periods.  This was largely due 
to higher prices for ingot and fabricated products along with 
continued strong growth in Aluminio's plastic closures 
business.
                          -8-

Alumina and Chemicals Segment
Total revenues for the Alumina and Chemicals segment were 
$410 in the 1995 second quarter, up 14% from the comparable 
1994 quarter.  Year-to-date, revenues increased 12% from the 
1994 period to $809.

Alumina revenues for the 1995 second quarter and year-to-date
periods increased 4% and 3% from the comparable 1994 periods.
Alumina shipments for the 1995 quarter and six-month periods 
were 7% and 8% lower than those for the respective 1994 
periods.  Alumina prices in the respective periods increased 
approximately 12% from 1994 levels.

Chemicals revenues continued their strong recent performance,
posting a 34% and 32% increase from the 1994 quarter and 
year-to-date periods.  The increase is due to higher growth 
in shipments, particularly in Europe.

In December 1994, Alcoa and Western Mining Corporation Limited
(WMC) entered into a transaction to combine ownership of their
respective worldwide bauxite, alumina and inorganic chemicals
businesses into a group of companies (the Enterprise) owned 
60% by Alcoa and 40% by WMC.  As part of the agreement, Alcoa
acquired an additional 9% interest in AofA, bringing its 
total interest to 60%.  During the 1995 second quarter, the 
Enterprise produced 2,493 mt of alumina.  Of this amount, 
1,539 was shipped to third-party customers.




Aluminum Processing Segment

                                Second quarter ended    Six months ended
                                       June 30             June 30
                                       -------             -------
 Product classes                  1995        1994      1995        1994
 ---------------                  ----        ----      ----        ----
                                                           
 Shipments (000 metric tons)
   Flat-rolled products           356           354       730         675
   Aluminum ingot                 142           178       282         345
   Engineered products            111           114       236         206
   Other aluminum products         18            15        33          35
                               ------        ------    ------      ------
 Total                            627           661     1,281       1,261
                                                          
 Revenues                                                 
   Flat-rolled products        $1,129        $  815    $2,209      $1,539
   Aluminum ingot                 245           233       502         444
   Engineered products            585           459     1,183         848
   Other aluminum products        101           119       181         224
                               ------        ------    ------      ------
 Total                         $2,060        $1,626    $4,075      $3,055
                                                          


Flat-rolled products - The majority of revenues and shipments 
for flat-rolled products are derived from rigid container 
sheet (RCS).  Shipments of RCS in the 1995 quarter were flat 
compared with the 1994 second quarter, as canmakers worked 
off excess inventory.  Year-to-date, shipments were up 10%.  
Revenues from RCS increased 39% and 51%, respectively, from 
the 1994 second quarter and six-month periods, reflecting a 
38% increase in prices from the 1994 six-month period.

Sheet and plate shipments in the 1995 second quarter were 
flat compared with the 1994 quarter, while year-to-date ship-
ments increased 9% from 1994 levels.  Prices were up 29% and 
21% from the 1994 quarter and year-to-date periods, 
resulting in a 30% increase in revenues for both periods.

Revenues from other flat-rolled products, including sheet 
and foil used in a variety of applications, were 6% higher 
than the 1994 first half as prices rose 43%.

                          -9-

Aluminum ingot - Ingot shipments for the 1995 second quarter 
and six-month periods fell 20% and 18%, respectively, from 
those in the comparable 1994 periods.  The declines reflect 
the lower production levels brought about due to previously 
idled capacity.  Realized prices in 1995 increased 31% and 
38%, respectively, from the 1994 second quarter and year-to-
date periods.  These factors resulted in a 5% increase in 
revenues from the 1994 second quarter and 13% from the 1994 
year-to-date period.

Engineered products - These products include extrusions used 
in the transportation and construction markets; aluminum 
forgings and wheels; wire, rod and bar; and automobile 
bumpers.  Revenues from the sale of engineered products 
increased 27% in the 1995 second quarter while shipments 
declined 3%.  Average prices rose by 31% from the 1994 
quarter.  Year-to-date, revenues and shipments were up 39% 
and 15%, respectively.

Revenues for extruded products improved 44% and 56% from 
the 1994 second quarter and six-month periods.  Prices were 
up approximately 28% in both periods while shipments 
increased 12% and 24%, respectively.  The increases reflect 
strengthening in the hard-alloy market as the aerospace 
industry begins to experience a turnaround.

Shipments of building products declined 19% from the 1994 
second quarter but were up 9% from the 1994 six-month 
period.  Prices increased 13% and 8%, respectively, from 
the 1994 second quarter and year-to-date periods.  Revenues 
for the 1995 second quarter were down 9% from the 1994 
quarter but were up 17% from the 1994 six-month period.  
The second quarter decline can be attributed to a generally 
weak construction market, due in part to the effect of 
higher interest rates in 1994 and early 1995.

Other aluminum products - Shipments of other aluminum 
products during the 1995 six-month period were 6% less than 
those in 1994.  Lower aluminum closures volumes, partially 
offset by higher scrap prices, resulted in a 19% decrease in 
revenues for the six-month period.

Non-Aluminum Segment
Revenues for the Non-Aluminum segment were $647 in the 1995
second quarter, up 31% from the 1994 quarter.  The increase 
was due to higher sales at Alcoa Fujikura Ltd. (AFL), a 
producer of automotive electrical system components.  Also, 
sales of plastic closures showed strong growth over the 1994 
second quarter, particularly in Brazil.  Year-to-date, 
revenues for this segment were $1,243, a 35% increase from 
the 1994 period.

Cost of Goods Sold
Cost of goods sold increased $335.6, or 17% from the 1994 
second quarter.  Year-to-date, the increase was $766.5, or 
21%.  The increases reflect higher costs for purchased metal 
and raw materials and increased volume.  These were partly 
offset by improved cost performance.  Cost of goods sold as 
a percentage of revenues was 73.3% or 5.9 points lower than 
in the 1994 period.  The lower ratio is primarily due to 
higher prices for all aluminum products.

Other Income & Expenses
Other income was up $26.6 and $38.8 from the year-ago quarter 
and six-month periods.  The primary causes were increased 
equity and interest income partially offset by unfavorable 
mark-to-market metal trading losses during the 1995 periods.  
Equity income for the 1995 second quarter increased $17 from 
the 1994 period due to continued strong results at Norsk 
Alcoa.  With more funds available for investment, interest 
income increased $14 and $18 from the 1994 second quarter 
and six-month periods.  Losses from mark-to-market metal 
trading activities increased $7 and $21 in the 1995 quarter 
and year-to-date periods.  

                          -10-

Selling, general and administrative expenses increased $12 
and $40, from the year-ago quarter and six-month periods 
due to higher salary and benefits expenses, particularly at 
Aluminio.  Higher sales commissions also contributed to the 
increases.

Research and development expenses increased $2.7 and $3.0 
from the year-ago quarter and six-month periods largely 
because of increased research at AofA.

Interest expense was down $1.5 from the 1994 second quarter 
and $2.1 year-to-date, primarily due to lower borrowings by 
Aluminio and lower short-term interest rates.

The estimated effective tax rate for 1995 is 32.5%.  The
difference between this rate and the U.S. statutory rate 
of 35% is primarily due to taxes on income outside of the 
U.S.

In May 1995, the Australian government passed legislation 
to increase Australia's corporate income tax rate from 33% 
to 36%, retroactive to the beginning of the year.  The 
legislation is expected to be enacted during the third 
quarter.  AofA's results, in the period in which the legis-
lation will be enacted, will be negatively affected by an 
adjustment of approximately $22 to its deferred taxes and 
to the extent its year-to-date taxes on earnings are 
adjusted for the higher rate.

Minority interests' share of income from operations 
increased 89% from the 1994 second quarter and 97% year-
to-date, primarily reflecting higher earnings by AofA, 
Aluminio and Alcoa Kofem.

Commodity Risks
Alcoa is a leading global producer of aluminum ingot and
fabricated products.  Aluminum ingot is an internationally
priced, sourced and traded commodity.  The principal trading
market for ingot is the London Metal Exchange (LME).  Alcoa
participates in this market by buying and selling forward
portions of its aluminum requirements and output.

In 1994, the company had entered into longer-term contracts 
with a variety of customers in the U.S. for the supply of
approximately 1.5 million mt of aluminum products over the 
next several years.  As a hedge against the economic risk 
associated with these contracts, Alcoa entered into long 
positions using principally futures and options contracts.  
At December 31, 1994 these contracts totaled approximately 
1.4 million mt.  At June 30, 1995, such contracts totaled 
1.3 million mt.  These contracts limit the unfavorable 
effect of price increases on metal purchases and likewise 
limit the favorable effect from price declines.  The 
futures and options contracts are with creditworthy 
counterparties and are further supported by cash, treasury 
bills, or irrevocable letters of credit issued by carefully 
chosen banks, as appropriate.

In addition, Alcoa had 14,000 mt of LME contracts out-
standing at year-end 1994 that cover fixed-price commitments 
to supply customers with metal from internal sources.  At 
June 30, 1995, such contracts totaled 112,000 mt.  
Accounting convention requires that these contracts be 
marked-to-market.

Alcoa purchases other commodities, such as natural gas and
copper, for its operations and enters into forward contracts 
to eliminate volatility in the prices of such products.  
None of these contracts are material.

                          -11-

Environmental Matters
Alcoa continues to participate in environmental assessments
and cleanups at a number of locations, including operating
facilities and their adjoining property; at previously owned
or operated facilities; and at Superfund and other waste
sites.  Alcoa records a liability for environmental
remediation costs and/or damages when a cleanup program or
liability becomes probable and the costs/damages can be
reasonably estimated.

As assessments and cleanups proceed, these liabilities are
adjusted based on progress in determining the extent of
remedial actions and the related costs and damages.  The
liability can change substantially due to factors such as the
nature or extent of contamination, changes in remedial
requirements and technological improvements.

For example, there are certain matters, including several
related to alleged natural resource damage or alleged off-
site contaminated sediments, where investigations are
ongoing.  It is not possible to determine the outcomes or to
estimate with any degree of certainty the ranges of potential
costs for these matters.

Alcoa's remediation reserve balance at the end of the 1995
second quarter was $339 and reflects Alcoa's most probable
cost to remediate identified environmental conditions for
which costs can be reasonably estimated.  About a third of
the reserve relates to Alcoa's Massena, N.Y. plant site.
Remediation expenditures charged to the reserve for the 1995
six-month period were $24.  Expenditures include those
currently mandated as well as those not required by any
regulatory authority or third party.

Included in ongoing operating expenses are the recurring
costs of managing hazardous substances and pollution.  Alcoa
estimates that these costs will be about 2% of cost of goods
sold in 1995.

Liquidity and Capital Resources

Cash from Operations

Cash from operations during the 1995 six-month period was 
$514, $48 higher than in the 1994 period.  The higher cash 
was generated primarily by improved earnings, partly offset 
by increases in working capital.  Working capital was nega-
tively affected by increases in receivables and inventory 
brought about by a higher level of operations, which was 
partially offset by an increase in noncurrent liabilities.  
The increase in noncurrent liabilities is partially due to 
cash received from the settlement of metal trading activity.  
The gains and losses associated with these metal contracts 
are reflected in earnings concurrently with the hedged 
revenues or costs.

Financing Activities

Financing activities used $156 of cash during the first six
months of 1995.  This included $74 to repurchase 1,751,400 
shares of the company's common stock.  Stock purchases were 
partially offset by $31 of common stock issued, primarily 
for employee benefit plans.

Dividends paid to shareholders were $81 in the 1995 year-
to-date period, an increase of $10 from 1994 as Alcoa 
increased its quarterly dividend from 20 cents to 22.5 cents 
per share.  Dividends paid to minority interests totaled $55.  
Additional borrowings net of debt payments generated $24.

                          -12-

Investing Activities

Capital expenditures for the 1995 period were $340, up from 
$258 in the 1994 period.  Capital expenditures were mostly 
for sustaining operations.  Alcoa continues to focus on 
improving its manufacturing processes with a minimum of 
capital spending.  As a result of the formation of a world-
wide bauxite, alumina and alumina-based chemicals business, 
WMC paid Alcoa a net amount of $367 in January 1995.  Alcoa 
in turn loaned WMC $122 in January 1995.  The loan is due on 
demand and carries an interest rate of LIBOR plus 10 basis 
points.  The $151 reduction in minority interests relates 
primarily to the redemption of all of the outstanding 
preferred stock of Alcoa International Holdings Company.

Subsequent Event

On July 1, 1995, AFL acquired the operations of Electro-Wire
Products, Inc.  AFL and Electro-Wire Products manufacture
electrical distribution systems (EDS) for autos, trucks and 
farm equipment.  Combining these two businesses will create a
worldwide enterprise that will have annual revenues of
approximately $1.35 billion, including equity companies, and 
will be the largest supplier of EDS to Ford Motor Company's 
worldwide operations.  The combined enterprise will also be 
the largest supplier of EDS to the heavy truck industry.  
AFL, owned 51% by Alcoa and 49% by Fujikura Ltd, is based in 
Brentwood, TN.

AFL financed the acquisition by entering into a $450 syndi-
cated bank facility comprised of a $300, seven year term 
loan and a $150, seven year revolving credit facility.  As 
of July 3, 1995, AFL had borrowed $300 against the term loan 
and $35 against the revolving credit facility.  The funds 
were used to finance the acquisition as well as refinance 
existing debt.  The term loan carries an initial interest 
rate of 6.56%.

In July, Alcoa Alumina & Chemicals, L.L.C., owned 60 percent 
by Alcoa and 40 percent by WMC, acquired substantially all 
of the assets of the Virgin Islands Alumina Corporation 
(Vialco), a subsidiary of Glencore International AG.  The 
assets consist of the alumina refinery located on St. Croix, 
U.S. Virgin Islands.  The refinery has an operating capacity 
of 600,000 mt per year and has been idled since late 1994 
due to economic conditions.  Alcoa has formed a new subsi-
diary, St. Croix Alumina, L.L.C., to own the refinery.

                          -13-

Alcoa and subsidiaries

Summarized consolidated financial data for Aluminio, a 
Brazilian subsidiary effectively owned 59% by Alcoa, follow.



                                     
                                              (unaudited) 
                                                June 30    December 31
                                                -------    -----------
                                                 1995          1994
                                                 ----          ----
                                                
                                                      
Cash and short-term investments              $   140.8      $    34.5
Other current assets                             328.0          376.4
Properties, plants and equipment, net (1)        807.4          929.0
Other assets                                     147.2          161.8
                                               -------        -------
                                                
      Total assets                             1,423.4        1,501.7
                                               -------        -------
                                                
Current liabilities                              380.9          415.2
Long-term debt (2)                               187.4          222.2
Other liabilities                                 32.6           33.3
                                               -------        -------
                                                
      Total liabilities                          600.9          670.7
                                               -------        -------
                                                
            Net assets                       $   822.5      $   831.0
                                               =======        =======


                                             (unaudited)                  (unaudited)
                                         Second quarter ended          Six months ended
                                               June 30                     June 30
                                          ------------------          ------------------
                                          1995          1994          1995          1994
                                          ----          ----          ----          ----

                                                                         
Revenues                                $  280.3      $  198.8      $  593.5      $  375.0
                                                   
Costs and expenses                        (238.2)       (173.9)       (494.6)       (332.3)
Translation and exchange adjustments          .5          (8.7)          3.3         (15.3)
Income tax (expense) benefit                (4.7)         (1.5)        (12.2)         (2.5)
                                          ------        ------        ------        ------ 
                                                            
     Net income                         $   37.9      $   14.7      $   90.0      $   24.9
                                          ======        ======        ======        ======
                                                            
Alcoa's share of net income             $   22.4      $    8.7      $   53.1      $   14.7
                                          ======        ======        ======        ======


(1) Effective January 1, 1995, the portion of Aluminio's operations included
    in the WMC transaction were transferred to a new Alcoa subsidiary which is
    not included in Aluminio's consolidated financials.  Likewise, Aluminio's
    closure operations outside of Brazil were transferred to another Alcoa
    subsidiary effective March 1, 1995.


(2) Held by Alcoa Brazil Holdings Company - $22.5 



                          -14-

Alcoa and subsidiaries

Summarized consolidated financial data for AofA, an Australian
subsidiary, follow.  At January 1, 1995, Alcoa's ownership
interest in AofA increased from 51% to 60%.



                                             
                                           (unaudited)  
                                             June 30      December 31
                                             -------      -----------
                                              1995           1994
                                              ----           ----
                                                    
Cash and short-term investments             $    52.9     $    88.2
Other current assets                            505.3         484.9
Properties, plants and equipment, net         1,497.7       1,645.3
Other assets                                     99.5         102.5
                                              -------       -------
                                              
Total assets                                  2,155.4       2,320.9
                                              -------       -------
                                              
Current liabilities                             269.9         317.9
Long-term debt                                  168.9         150.2
Other liabilities                               362.5         382.6
                                              -------       -------
                                              
Total liabilities                               801.3         850.7
                                              -------       -------
                                              
Net assets                                  $ 1,354.1     $ 1,470.2
                                              =======       =======

                                            (unaudited)              (unaudited)
                                        Second quarter ended      Six months ended
                                               June 30                June 30
                                          ----------------        ----------------
                                          1995        1994        1995        1994
                                          ----        ----        ----        ----

                                                                
Revenues (1)                            $  403.7    $  349.4    $  832.5    $  710.2
Costs and expenses                        (324.1)     (298.5)     (632.9)     (574.9)
Translation and exchange adjustments         -           1.1         -           2.0
Income tax (expense) benefit               (25.5)      (16.0)      (63.9)      (44.2)
                                          ------      ------      ------      ------
                                                              
            Net income                  $   54.1    $   36.0    $  135.7    $   93.1
                                          ======      ======      ======      ======
                                                              
Alcoa's share of net income             $   32.5    $   18.4    $   81.4    $   47.5
                                          ======      ======      ======      ======


(1) Revenues from Alcoa and its subsidiaries, the terms of which were
    established by negotiations between the parties, follow.

      Second quarter ended June 30:    1995 - $15.1, 1994 - $5.7
      Six months ended June 30:        1995 - $24.7, 1994 - $13.7



                          -15-

                   PART II - OTHER INFORMATION
Item 1.  Legal Proceedings.

As previously reported, on March 27, 1995, the United States
Department of Justice (DOJ) issued a Civil Investigative 
Demand requesting information regarding pricing policies on 
aluminum rigid container sheet in 1994 and 1995.  Alcoa 
complied with the document request and provided interroga-
tory answers on June 1, 1995.

On June 13, 1995, the company was served with a class action
complaint in the matter of John P. Cooper, et al. v. Aluminum
Company of America, Case Number 3-95-CV-10074, pending in the
United States District Court for the Southern District of 
Iowa.  The named plaintiffs allege violation of federal and 
state civil rights laws prohibiting discrimination on the 
basis of race and gender.  Plaintiffs seek class action 
status for five classes of employees or prospective employees 
of Alcoa at its Davenport, Iowa facility.  Plaintiffs seek a 
permanent injunction against allegedly discrimnatory 
practices, restitution of claimed benefits and income, and 
unspecified compensatory and punitive damages, Alcoa has not 
yet answered or otherwise responded to the allegations in 
the Complaint; however, the company denies any alleged 
violation of federal or state law and intends to defend
against plaintiffs'claims.

Item 4.  Submission of Matters to a Vote of Security Holders.

At the annual meeting of Alcoa shareholders held on May 12, 
1995, Sir Arvi Parbo, Henry B. Schacht, Forrest N. Shumway 
and Franklin A. Thomas were reelected to serve for three-
year terms as directors of Alcoa.  Sir Ronald Hampel was 
elected to serve for a one-year term as a director.  Votes 
cast for Sir Arvi Parbo were 153,573,559 and votes withheld 
were 768,515; votes cast for Mr. Schacht were 153,632,599 
and votes withheld were 709,475; votes cast for Mr. Shumway 
were 153,598,240 and votes withheld were 743,834; votes cast 
for Mr. Thomas were 153,581,668 and votes withheld were 
760,406; and votes cast for Sir Ronald Hampel were 
153,625,520 and votes withheld were 716,554.

Also at that annual meeting, a proposal to approve amendments 
to Alcoa's Long Term Stock Incentive Plan was adopted.  Total 
votes cast for the proposal were 135,905,964 and votes cast 
against were 17,222,909.  There were 1,213,201 abstentions.
Additionally, a proposal submitted by a shareholder regarding
certain charitable contributions by Alcoa was defeated.  
Total votes cast for the shareholder proposal were 4,664,983 
and votes cast against were 128,832,166.  Abstentions and 
broker nonvotes totaled 12,776,973 and 806,795, respectively.  
Abstentions and broker nonvotes, however, are not counted for 
voting purposes under Pennsylvania law, the jurisdiction of 
Alcoa's incorporation.

The company's definitive proxy statement, dated March 14, 
1995, and filed with the Securities and Exchange Commission 
contains, on pages 17-18, a description of the proposal to 
amend Alcoa's Long Term Stock Incentive Plan, and, on 
page 18, a description of the proposal regarding certain 
charitable contributions by Alcoa, which are incorporated 
herein by reference.

Item 6.  Exhibits and Reports on Form 8-K.

(a)  Exhibits
       11.  Computation of Earnings per Common Share
       12.  Computation of Ratio of Earnings to Fixed Charges
       15.  Independent Accountants' letter regarding 
            unaudited financial information
       27.  Financial Data Schedule

(b)  No reports on Form 8-K were filed by Alcoa during the
     quarter covered by this report.

                          -16-

                           SIGNATURES
   
   
   Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.
   
   
   
                               ALUMINUM COMPANY OF AMERICA
   
   
   
August 7, 1995                 By /s/ JAN H. M. HOMMEN
Date                           Jan H. M. Hommen
                               Executive Vice President and
                               Chief Financial Officer
                               (Principal Financial Officer)
   
   

August 7, 1995                 By /s/ EARNEST J. EDWARDS
   Date                        Earnest J. Edwards
                               Vice President and Controller
                               (Chief Accounting Officer)
   
                          -17-
   
                            EXHIBITS
   
                                                        Page
                                                        
11. Computation of Earnings per Common Share             19
12. Computation of Ratio of Earnings to Fixed Charges    20
15. Independent Accountants' letter regarding unaudited  21
        financial information
27. Financial Data Schedule

                          -18-

Alcoa and subsidiaries                                 EXHIBIT 11




         Computation of Earnings (Loss) per Common Share
                For the six months ended June 30
               (in millions, except share amounts)

                                                        
                                                      1995         1994
                                                   ----------   ----------
                                                                   

 1. Income (loss) applicable to common stock
      before extraordinary loss *                        $412.2         $4.0

 2. Weighted average number of common shares
      outstanding during the period                 178,424,528  177,414,490
                                                                   
 3. Primary earnings (loss) per common share
      before extraordinary loss (1 divided by 2)          $2.31         $.02
      
 4. Fully diluted earnings (loss) before
      extraordinary loss (1)                             $412.2         $4.0
                                                                   
 5. Shares issuable under compensation plans             24,046       87,576
                                                        
 6. Shares issuable upon exercise of dilutive
      outstanding stock options (treasury stock
      method)                                         1,194,010      485,308
                                                                   
 7. Fully diluted shares (2 + 5 + 6)                179,642,584  177,987,374

 8. Fully diluted earnings (loss) per common
      share before extraordinary loss (4
      divided by 7)                                       $2.29         $.02



Per share amounts for 1994 have been restated to reflect the two-
for-one stock split which occurred in February, 1995.


*  After preferred dividend requirement

Alcoa and subsidiaries                           EXHIBIT 12




        Computation of Ratio of Earnings to Fixed Charges
             For the six months ended June 30, 1995
                   (in millions, except ratio)


                                                               1995
                                                               ----
                                                        

Earnings:                                        
   Income before taxes on income                           $  831.0
   Minority interests' share of earnings of majority-
      owned subsidiaries without fixed charges                   .1
   Equity income                                              (35.0)
   Fixed charges                                               66.3
   Proportionate share of income (loss) of 50%-owned                                           
     persons                                                   34.9
     Distributed income of less than 50%-owned persons          -
   Amortization of capitalized interest                        12.1
                                                             ------
                                                 
      Total earnings                                       $  909.4
                                                 
Fixed Charges:                                   
   Interest expense:                             
      Consolidated                                         $   50.9
      Proportionate share of 50%-owned persons                  3.8
                                                             ------
                                                               54.7
                                                             ------
                                                 
   Amount representative of the interest factor in rents:      
        Consolidated                                           11.5
      Proportionate share of 50%-owned persons                   .1
                                                             ------
                                                               11.6
                                                             ------
                                                 
   Fixed charges added to earnings                             66.3
                                                             ------
                                                 
   Interest capitalized:                         
      Consolidated                                               .9
      Proportionate share of 50%-owned persons                  -
                                                             ------
                                                                 .9
                                                             ------
                                                 
   Preferred stock dividend requirements of      
      majority-owned subsidiaries                               5.0
                                                             ------
                                                 
      Total fixed charges                                  $   72.2
                                                             ======
                                                 
Ratio of earnings to fixed charges                             12.6
                                                             ======

                                                EXHIBIT 15

July 7, 1995




Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C.  20549

RE:  Aluminum Company of America

     1.   Form S-8  (Registration No. 33-24846)
          Alcoa Savings Plan for Salaried Employees

     2.   Form S-8  (Registration No. 33-60305)
          Long Term Stock Incentive Plan

     3.   Form S-3  (Registration No. 33-49997) and
          Form S-3 (Registration No. 33-60045)
          Debt Securities and Warrants to Purchase Debt
          Securities, Preferred Stock and Common Stock

We are aware that our report dated July 7, 1995,
accompanying interim financial information of Aluminum
Company of America (Alcoa) and subsidiaries for the three-
month period ended June 30, 1995, is incorporated by
reference in the registration statements referred to above.
Pursuant to Rule 436 (c) under the Securities Act of 1933,
this report should not be considered as part of a
registration statement prepared or certified by us within
the meaning of Sections 7 and 11 of that Act.

Very truly yours,



/s/  COOPERS & LYBRAND L.L.P.

COOPERS & LYBRAND L.L.P.

  

 5
 1,000
       
                             
                   6-MOS
                          DEC-31-1995
                             JAN-01-1995
                               JUN-30-1995
                                         700,600
                                     6,500
                                1,638,100
                                    42,400
                                  1,499,100
                             4,695,000
                                      14,658,800
                               8,045,900
                              12,877,000
                        2,282,100
                                      1,164,500
                                       178,900
                                0
                                     55,800
                                   4,030,700
                12,877,000
                                      6,127,100
                             6,184,700
                                        4,491,700
                                4,491,700
                               343,600
                                     0
                              50,900
                                831,000
                                   269,600
                            413,200
                                       0
                                      0
                                            0
                                   413,200
                                     2.31
                                     2.29