Other investments are primarily comprised of Alcoa’s 8% interest in Aluminum Corporation of China (Chalco). The Chalco investment is classified as an available-for-sale security and is carried at fair value. The decrease in other investments in 2004 was primarily due to a revaluation of the Chalco investment with the offset recorded in accumulated other comprehensive income, slightly offset by an additional investment in Chalco of $32. in connection with the achievement of certain 2003 operating targets. Fairchild is part of the Engineered Products segment. In connection with certain acquisitions made during 2002, Alcoa could be required to make additional payments of approximately $67 from 2005 through 2006 based upon the achievement of various financial and operating targets. Pro forma results of the company, assuming all acquisitions had been made at the beginning of each period presented, would not have been materially different from the results reported. December 31 2004 2003 Finished goods $ 913 $ 742 Work in process 909 787 Bauxite and alumina 456 337 Purchased raw materials 472 429 Operating supplies 218 210 $2,968 $2,505 December 31 2004 2003 Intangibles (E) $ 852 $ 788 Deferred income taxes 1,606 1,343 Prepaid pension benefit (W) 83 108 Deferred charges and other 1,166 1,049 $3,707 $3,288 December 31 2004 2003 Floating-rate notes, due 2004 (1.5% average rate) $ — $ 467 6.125% Bonds, due 2005 — 200 7.25% Notes, due 2005 — 500 5.875% Notes , due 2006 — 500 4.25% Notes, due 2007 800 800 6.625% Notes, due 2008 150 150 7.375% Notes, due 2010 1,000 1,000 6.5% Notes, due 2011 1,000 1,000 6% Notes, due 2012 1,000 1,000 5.375% Notes , due 2013 600 600 6.5% Bonds, due 2018 250 250 6.75% Bonds, due 2028 300 300 Tax-exempt revenue bonds ranging from 5.7% to 5.9%, due 2007–2031 28 49 Medium-term notes, due 2005–2013 (8.2% and 7.6% average rates) 142 176 Alcoa Aluminio 7.5% Export notes, due 2005–2008 74 89 Fair value adjustments 33 104 Other 26 31 5,403 7,216 Less: amount due within one year 57 523 $5,346 $6,693 December 31 2004 2003 Land and land rights, including mines $ 462 $ 445 Structures 6,177 5,834 Machinery and equipment 18,004 17,436 24,643 23,715 Less: accumulated depreciation and depletion 13,273 12,275 11,370 11,440 Construction work in progress* 1,222 1,060 $12,592 $12,500 December 31 2004 2003 Equity investments $1,517 $1,346 Other investments 549 659 $2,066 $2,005 ● a premium paid for early retirement of debt and related expenses of $67; ● a gain of $48 from previously settled interest rate swaps that hedged the retired debt and was reflected as an increase in its carrying value; and 51 In 2004, Alcoa retired early $1,200 of debt securities, consisting of the following: $200 of 6.125% Bonds due in 2005,$500of7 .25%Notesduein2005,and$500of5.875% Notes due in 2006. These debt securities were retired primarily with proceeds from commercial paper borrowings and cash provided from operations. Alcoa recognized a net gain of $58 in other income on the early retirement of long-term debt and the associated settlement of interest rate swaps. The net gain of $58 is comprised of the following: The increase in equity investments in 2004 was attributed to higher earnings at Elkem and favorable foreign currency exchange movements. Equity investments represent investments in affiliates in which Alcoa has a noncontrolling ownership interest between twenty and fifty percent and are comprised of the following: 46.5% investment in Elkem ASA (Elkem), a Norwegian producer of aluminum; 50% investment in Elkem Aluminium ANS, a joint venture between Alcoa and Elkem that owns and operates two aluminum smelters in Norway; 50% interest in Integris Metals, Inc., a metals distribution joint venture with BHP Billiton (which was subsequently sold in January 2005); and investments in several hydroelectric power construction projects in Brazil. See Note N for additional information. The amount of long-term debt maturing in each of the next five years is $57 in 2005, $69 in 2006, $863 in 2007, $204 in 2008, and $33 in 2009. *Project costs associated with EBS are included in this balance, and at December 31, 2004 and 2003, totaled $231 and $233, respectively. Upon completion, these software costs are capitalized and recorded as intangible assets. Approximately 45% of total inventories at December 31, 2004 were valued on a LIFO basis. If valued on an average-cost basis, total inventories would have been $700 and $558 higher at the end of 2004 and 2003, respectively. J. Other Assets G. Inventories K. Debt H. Properties, Plants, and Equipment, at Cost I. Investments