Alcoa and subsidiaries Statement of Consolidated Income (in millions, except per-share amounts) The accompanying notes are an integral part of the consolidated financial s t atements. For the year ended December 31 2004 2003 2002 Sales (A and Q) $23,478 $21,092 $19,934 Cost of goods sold 18,623 16,754 15,928 Selling, general administrative, and other expenses 1,284 1,250 1,108 Research and development expenses 182 190 209 Provision for depreciation, depletion, and amortization (A and E) 1,204 1,175 1,096 Restructuring and other charges (D) (21) (27) 414 Interest expense (V) 270 314 350 Other income, net (O) (268) (274) (178 ) 21,274 19,382 18,927 Income from continuing operations before taxes on income 2,204 1,710 1,007 Provision for taxes on income (T) 557 417 317 Income from continuing operations before minority interests’ share 1,647 1,293 690 Less: Minority interests’ share 245 238 172 Income from continuing operations 1,402 1,055 518 Loss from discontinued operations (B) (92) (70) (132 ) Cumulative effect of accounting change (C and E) — (47) 34 Net Income $ 1,310 $ 938 $ 420 Earnings (loss) per Share (S) Basic: Income from continuing operations $ 1.61 $ 1.23 $ .61 Loss from discontinued operations (.11) (.08) (.16 ) Cumulative effect of accounting change — (.06) .04 Net income $ 1.50 $ 1.09 $ .49 Diluted: Income from continuing operations $ 1.60 $ 1.22 $ .61 Loss from discontinued operations (.11) (.08) (.16 ) Cumulative effect of accounting change — (.06) .04 Net income $ 1.49 $ 1.08 $ .49 41