Fellow Shareowners: Alain Belda, Chairman and Chief Executive Officer L ast year I wrote about how  Alcoa’s Vision of aspiring to be  the best company in the world  is about delivering sustained financial  performance, while building for the future  and delivering on all of Alcoa’s seven Values. This is the goal that  all 131,000 Alcoans across the globe  are striving for every day. A favorable external business  environment contributed to our per- formance. The global economy grew  at its fastest pace (+4.4%) in the last  two decades. Aluminum consumption increased by almost 9%, and aluminum prices were up 21%. Several of our  key markets – notably aerospace and commercial vehicles – moved to a  cyclical upturn after declining trends over the past two to three years. However, these favorable trends were countered by a weakening  U.S. dollar and significant cost issues, notably energy and input costs such  as resins, carbon-based materials, and alloy materials. Currency and energy alone in 2004 negatively impacted our earnings by more than $300 million compared to 2003. In 2004 – facing the headwinds  of rising costs and currency challenges – Alcoans delivered the highest annual  revenue and the second-highest prof- itability in the Company’s history. Strong cash flows allowed us to not only reduce debt by approximately $2 billion over  the last two years, but also to invest in numerous growth projects around the world for the Company’s future. And we did all of this while we continued to live the Values that are the core of our Company, achiev- ing, for example, a Lost Workday rate of 0.09  for the first time, while improving our Total Recordable Rate for the 18th year in a row. On our ROC goal, we again improved this year, but we have more work to do. Our 2004 ROC was 8.4%, which improved from 7.0% a year ago. However, the first quintile entry point is currently 18.5%, so we will continue to work to profitably grow and improve our results.  Our cost-savings program, as  previously mentioned, was held back by rising costs in 2004. We expect this to contin- ue to be a challenge in 2005. We project approx- imately $600 million in cost increases from ener- gy, labor, raw materials, and currencies. Our  cost-savings plans for 2005 indicate we will be able to offset most, if not all, of these increases. But this will require substantial effort in planning, focusing effort, and execution at all levels of  the organization and across our global businesses, which is why our structure and culture are so vital. As strong as our 2004 financial results were, we are confident we can  do better. The ultimate measure of  success is growth in shareholder value  during the year and over a period. Our 2004 return was –15.7%, obviously a disappointment. However, the combined 2003/04 return is +44% compared to +31% for the S&P 500.  In 2004 – facing the headwinds of rising costs and currency challenges – Alcoans delivered  the highest annual revenue and the second-highest profitability in the Company’s history. Our 2004 financial results included: Stock performance is a mix of past performance, future expectations, and shareholder options. The best answer to improved shareowner returns is consis- tent, transparent, and improved perfor- mance. And this is what our plans are all about. We remain committed to our key financial goals: We have taken many steps to position and align your Company to capture growth opportunities and expand –  both through new geographies as well  as expanding current assets.  In late 2004, we realigned the  Company along six global platforms to better serve customers and increase the ability to capture efficiencies. We also centralized purchasing on a global basis to improve our costs and better use our leverage. As we moved to strengthen the global business structures, we also creat- ed strong regional leadership to ensure that we maintain optimum relationships. 1 Building for the Future 2004 Financial Results • Profitable Growth – Continuing the drive to profitably grow revenues  as well as to join the first quintile of the S&P Industrials, measured in terms of ROC; and  • Cost Savings –  Achieving $1.2 billion in cost savings by 2006. In 2005, this cost-savings initiative – our third three- year program since 1998 – will be  used to help offset cost increases across the business and bolster profitability. • Income from continuing operations  of $1.4 billion, a 33% increase vs. 2003, and our second straight year of double-digit earnings growth; • Revenue of $23.5 billion, an 11% increase vs. 2003; • A debt-to-capital ratio decline  to 30.0%, the lowest in five years; • Disciplined use of capital to fuel growth projects. 2004 capital spending was $1.1 billion, or 95% of deprecia- tion, with approximately one-third used on growth initiatives. In 2005,  we expect to invest approximately  $2.5 billion on capital projects,  with nearly two-thirds dedicated  to growth projects; and • Improving the Company’s return on capital (ROC) to 8.4%, up 140 basis points from last year.