content_image/60572.jpg content_image/60575.jpg content_image/60576.jpg
serve the aerospace, automotive, commercial transportation, industrial gas turbine, building and construction, and distribu- tor markets (mainly used in the production of machinery and equipment) and are sold directly to customers and through distributors. 

Third-party sales for the Engineered Products segment increased 13% in 2004 compared with 2003, principally due to increased volumes in the commercial transportation, automotive, building and construction, and aerospace markets; higher prices; and favorable foreign currency exchange movements. Third-party sales increased 9% in 2003 compared with 2002, primarily as a result of the Fairchild acquisition, which contrib- uted approximately $560 in 2003. Additionally, higher sales in Europe, driven by the favorable impact of foreign currency exchange movements, contributed to the increase in 2003. These increases were somewhat offset by volume declines in businesses serving the industrial gas turbine and commercial building and construction markets. 

ATOI for this segment increased 61% in 2004 compared with 2003, principally resulting from increased volumes due to improved market conditions as noted previously, higher prices, and strong productivity gains. ATOI increased 48% in 2003 compared with 2002, primarily due to cost savings, the contri- bution of Fairchild results in 2003, and favorable foreign currency exchange movements in Europe. These favorable results were somewhat offset by higher employee benefit costs. 

In 2004, Alcoa continued to pursue expansion of the production of soft-alloy extrusions in Europe through additional production in Hungary and the construction of a new facility in Romania, to be completed in 2005. 

<img src='content_image/60572.jpg'>

## Packaging and Consumer 

<img src='content_image/60575.jpg'>

This segment includes consumer, foodservice, and flexible packaging products; food and beverage closures; plastic sheet and film for the packaging industry; and imaging and graphic communications for the packaging industry. The principal 

products in this segment include aluminum foil; plastic wraps and bags; plastic beverage and food closures; flexible packaging products; design and prepress services; gravure and flexographic image carrier products; thermoformed plastic containers and extruded plastic sheet and film. Consumer products are marketed under brands including Reynolds Wrap GLYPH<H23006> , Diamond GLYPH<H23006> , Baco GLYPH<H23006> , and Cut-Rite GLYPH<H23006> wax paper. Seasonal increases generally occur in the second and fourth quarters of the year for such products as consumer foil and plastic wraps and bags, while seasonal slowdowns for closures generally occur in the fourth quarter of the year. Products are generally sold directly to customers, consisting of supermarkets, beverage companies, food processors, retail chains, and commercial foodservice distributors. 

Third-party sales for the Packaging and Consumer segment increased 2% in 2004 compared with 2003, primarily due to increased volumes in the closures, plastic sheet and film, and the imaging and graphic communications businesses and higher prices. These positive contributions were partly offset by the impact of the sale of Alcoa’s Latin America PET business. In 2003, sales increased 11% compared with 2002, primarily as a result of the Ivex acquisition, which contributed approximately $305 more in 2003 than in 2002. Higher volumes in the closures business also contributed to the sales increase in 2003. 

ATOI for this segment in 2004 decreased 21% compared with 2003, primarily due to significantly higher resin and metal costs, unfavorable foreign currency exchange movements, and the divestitures of the Latin America PET business and Latasa, which were somewhat offset by increased volumes as noted above. In 2003, increased volumes in the closures business and positive results in Latin America due to improved economic conditions contributed to the 9% increase in ATOI compared with 2002, despite significantly higher resin prices and the divestitures of the Latin America PET business and Latasa. 

During 2004, Alcoa continued its globalization of the closures business with new operations in Asia and Egypt. In 2005, higher input costs are anticipated for resin and metal. 

## Other 

<img src='content_image/60576.jpg'>

This group includes other Alcoa businesses that are not included in the segments previously mentioned. This group includes the automotive business of Alcoa Fujikura, Ltd. (AFL), which produces electrical components for the automotive industry; the residential building products operations, Alcoa Home Exteriors; and automotive parts businesses. Products in this segment are generally sold directly to customers or through distributors. AFL sales are dependent on a relatively small number of customers. Seasonal increases in the building products business generally occur in the second and third 

