Canada | 001-32312 | 98-0442987 |
(State or Other Jurisdiction of Incorporation) | (Commission File No.) | (IRS Employer Identification No.) |
3560 Lenox Road, Suite 2000, Atlanta, GA 30326, Atlanta, GA | 30326 |
(Address of Principal Executive Offices) | (Zip Code) |
Not Applicable | ||
(Former Name or Former Address, If Changed Since Last Report) |
• do not reflect the company’s cash expenditures or requirements for capital expenditures or capital commitments; | ||||
• do not reflect changes in, or cash requirements for, the company’s working capital needs; and | ||||
• do not reflect any costs related to the current or future replacement of assets being depreciated and amortized. |
• as measures of operating performance to assist the company in comparing its operating performance on a consistent basis because it removes the impact of items not directly resulting from the company’s core operations; | |
• for planning purposes, including the preparation of the company’s internal annual operating budgets and financial projections; | |
• to evaluate the performance and effectiveness of the company's operational strategies; and | |
• to calculate incentive compensation payments for the company’s key employees. |
(d) | Exhibits | ||
99.1 | Press release, dated November 9, 2015 (furnished to the Commission as a part of this Form 8-K). | ||
99.2 | Presentation materials, dated November 9, 2015 (furnished to the Commission as a part of this Form 8-K). | ||
NOVELIS INC. | ||||
Date: November 9, 2015 | By: | /s/ Leslie J. Parrette, Jr. | ||
Leslie J. Parrette, Jr. | ||||
General Counsel, Corporate Secretary and Compliance Officer |
Exhibit | |||
Number | Description | ||
99.1 | Press release, dated November 9, 2015 (furnished to the Commission as a part of this Form 8-K). | ||
99.2 | Presentation materials, dated November 9, 2015 (furnished to the Commission as a part of this Form 8-K). |
• | Net loss of $13 million; excluding special items, net income $25 million |
• | Adjusted EBITDA excluding metal price lag of $236 million, up 7% YoY, up 11% versus Q1 |
• | Record global FRP shipments of 788 kilotonnes up 3% YoY and versus Q1 |
• | Record automotive shipments up 59% YoY, up 6% versus Q1 |
• | Generated $140 million of free cash flow |
(in $M) | Three Months Ended | ||||||||||
9/30/2015 | 9/30/2014 | ||||||||||
Free Cash Flow | $ | 140 | $ | (108 | ) | ||||||
Capital Expenditures | $ | 75 | $ | 126 |
Media Contact: | Investor Contact: | |
Charles Belbin | Megan Cochard | |
+1 404 760 4122 | +1 404 760 4170 | |
charles.belbin@novelis.com | megan.cochard@novelis.com |
Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Net sales | $ | 2,482 | $ | 2,831 | $ | 5,116 | $ | 5,511 | |||||||
Cost of goods sold (exclusive of depreciation and amortization) | 2,241 | 2,483 | 4,641 | 4,812 | |||||||||||
Selling, general and administrative expenses | 100 | 103 | 200 | 211 | |||||||||||
Depreciation and amortization | 89 | 90 | 176 | 179 | |||||||||||
Interest expense and amortization of debt issuance costs | 82 | 82 | 162 | 163 | |||||||||||
Research and development expenses | 13 | 12 | 26 | 24 | |||||||||||
Gain on assets held for sale | — | — | — | (11 | ) | ||||||||||
Loss on extinguishment of debt | — | — | 13 | — | |||||||||||
Restructuring and impairment, net | 4 | 7 | 19 | 13 | |||||||||||
Equity in net loss of non-consolidated affiliates | 1 | — | 2 | 2 | |||||||||||
Other (income) expense, net | (32 | ) | 18 | (62 | ) | 23 | |||||||||
2,498 | 2,795 | 5,177 | 5,416 | ||||||||||||
(Loss) income before income taxes | (16 | ) | 36 | (61 | ) | 95 | |||||||||
Income tax (benefit) provision | (3 | ) | (2 | ) | 12 | 22 | |||||||||
Net (loss) income | (13 | ) | 38 | (73 | ) | 73 | |||||||||
Net income attributable to noncontrolling interests | — | — | — | — | |||||||||||
Net (loss) income attributable to our common shareholder | $ | (13 | ) | $ | 38 | $ | (73 | ) | $ | 73 |
September 30, 2015 | March 31, 2015 | ||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 462 | $ | 628 | |||
Accounts receivable, net | |||||||
— third parties (net of uncollectible accounts of $3 as of September 30, 2015 and March 31, 2015) | 1,155 | 1,289 | |||||
— related parties | 55 | 53 | |||||
Inventories | 1,349 | 1,431 | |||||
Prepaid expenses and other current assets | 104 | 112 | |||||
Fair value of derivative instruments | 102 | 77 | |||||
Deferred income tax assets | 43 | 79 | |||||
Assets held for sale | 5 | 6 | |||||
Total current assets | 3,275 | 3,675 | |||||
Property, plant and equipment, net | 3,488 | 3,542 | |||||
Goodwill | 607 | 607 | |||||
Intangible assets, net | 566 | 584 | |||||
Investment in and advances to non–consolidated affiliate | 464 | 447 | |||||
Deferred income tax assets | 95 | 95 | |||||
Other long–term assets | |||||||
— third parties | 116 | 137 | |||||
— related parties | 19 | 15 | |||||
Total assets | $ | 8,630 | $ | 9,102 | |||
LIABILITIES AND SHAREHOLDER’S DEFICIT | |||||||
Current liabilities | |||||||
Current portion of long–term debt | $ | 102 | $ | 108 | |||
Short–term borrowings | 901 | 846 | |||||
Accounts payable | |||||||
— third parties | 1,435 | 1,854 | |||||
— related parties | 49 | 44 | |||||
Fair value of derivative instruments | 159 | 149 | |||||
Accrued expenses and other current liabilities | 593 | 572 | |||||
Deferred income tax liabilities | 1 | 20 | |||||
Total current liabilities | 3,240 | 3,593 | |||||
Long–term debt, net of current portion | 4,418 | 4,349 | |||||
Deferred income tax liabilities | 196 | 261 | |||||
Accrued postretirement benefits | 765 | 748 | |||||
Other long–term liabilities | 185 | 221 | |||||
Total liabilities | 8,804 | 9,172 | |||||
Commitments and contingencies | |||||||
Shareholder’s deficit | |||||||
Common stock, no par value; unlimited number of shares authorized; 1,000 shares issued and outstanding as of September 30, 2015 and March 31, 2015 | — | — | |||||
Additional paid–in capital | 1,404 | 1,404 | |||||
Accumulated deficit | (998 | ) | (925 | ) | |||
Accumulated other comprehensive loss | (589 | ) | (561 | ) | |||
Total deficit of our common shareholder | (183 | ) | (82 | ) | |||
Noncontrolling interests | 9 | 12 | |||||
Total deficit | (174 | ) | (70 | ) | |||
Total liabilities and deficit | $ | 8,630 | $ | 9,102 |
Six Months Ended September 30, | |||||||
2015 | 2014 | ||||||
OPERATING ACTIVITIES | |||||||
Net (loss) income | $ | (73 | ) | $ | 73 | ||
Adjustments to determine net cash used in operating activities: | |||||||
Depreciation and amortization | 176 | 179 | |||||
(Gain) loss on unrealized derivatives and other realized derivatives in investing activities, net | (12 | ) | 14 | ||||
Gain on assets held for sale | — | (11 | ) | ||||
Loss on sale of assets | 1 | 3 | |||||
Impairment charges | 2 | — | |||||
Loss on extinguishment of debt | 13 | — | |||||
Deferred income taxes | (44 | ) | (18 | ) | |||
Amortization of fair value adjustments, net | 6 | 6 | |||||
Equity in net loss of non-consolidated affiliates | 2 | 2 | |||||
Gain on foreign exchange remeasurement of debt | (6 | ) | (3 | ) | |||
Amortization of debt issuance costs and carrying value adjustments | 10 | 13 | |||||
Other, net | — | (1 | ) | ||||
Changes in assets and liabilities including assets and liabilities held for sale (net of effects from divestitures): | |||||||
Accounts receivable | 127 | (187 | ) | ||||
Inventories | 87 | (369 | ) | ||||
Accounts payable | (384 | ) | 295 | ||||
Other current assets | 10 | (29 | ) | ||||
Other current liabilities | 25 | 27 | |||||
Other noncurrent assets | 19 | (2 | ) | ||||
Other noncurrent liabilities | (22 | ) | (5 | ) | |||
Net cash used in operating activities | (63 | ) | (13 | ) | |||
INVESTING ACTIVITIES | |||||||
Capital expenditures | (204 | ) | (264 | ) | |||
Proceeds from sales of assets, third party, net of transaction fees and hedging | 1 | 34 | |||||
Outflows from investments in and advances to non-consolidated affiliates, net | (4 | ) | (11 | ) | |||
(Outflows) proceeds from settlement of other undesignated derivative instruments, net | (14 | ) | 3 | ||||
Net cash used in investing activities | (221 | ) | (238 | ) | |||
FINANCING ACTIVITIES | |||||||
Proceeds from issuance of long-term and short-term borrowings | 140 | 198 | |||||
Principal payments of long-term and short-term borrowings | (135 | ) | (126 | ) | |||
Revolving credit facilities and other, net | 123 | 248 | |||||
Return of capital to our common shareholder | — | (250 | ) | ||||
Dividends, noncontrolling interest | (1 | ) | (1 | ) | |||
Debt issuance costs | (13 | ) | — | ||||
Net cash provided by financing activities | 114 | 69 | |||||
Net decrease in cash and cash equivalents | (170 | ) | (182 | ) | |||
Effect of exchange rate changes on cash | 4 | (1 | ) | ||||
Cash and cash equivalents — beginning of period | 628 | 509 | |||||
Cash and cash equivalents — end of period | $ | 462 | $ | 326 |
(in millions) | Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Net (loss) income attributable to our common shareholder | $ | (13 | ) | $ | 38 | $ | (73 | ) | $ | 73 | |||||
Income tax benefit (provision) | 3 | 2 | (12 | ) | (22 | ) | |||||||||
Interest, net | (80 | ) | (80 | ) | (158 | ) | (160 | ) | |||||||
Depreciation and amortization | (89 | ) | (90 | ) | (176 | ) | (179 | ) | |||||||
EBITDA | 153 | 206 | 273 | 434 | |||||||||||
Unrealized (losses) gains on change in fair value of derivative instruments, net | (15 | ) | (1 | ) | 20 | — | |||||||||
Realized losses on derivative instruments not included in segment income | (3 | ) | — | (2 | ) | (1 | ) | ||||||||
Adjustment to eliminate proportional consolidation | (8 | ) | (9 | ) | (15 | ) | (17 | ) | |||||||
Loss on sale of fixed assets | — | (2 | ) | (1 | ) | (3 | ) | ||||||||
Gain on assets held for sale | — | — | — | 11 | |||||||||||
Loss on extinguishment of debt | — | — | (13 | ) | — | ||||||||||
Restructuring and impairment, net | (4 | ) | (7 | ) | (19 | ) | (13 | ) | |||||||
Other expense, net | 1 | (5 | ) | (6 | ) | (8 | ) | ||||||||
Adjusted EBITDA | $ | 182 | $ | 230 | $ | 309 | $ | 465 | |||||||
Metal price lag | (54 | ) | 9 | (139 | ) | 11 | |||||||||
Adjusted EBITDA excluding metal price lag | $ | 236 | $ | 221 | $ | 448 | $ | 454 |
Six Months Ended September 30, | |||||||
2015 | 2014 | ||||||
Net cash used in operating activities | $ | (63 | ) | $ | (13 | ) | |
Net cash used in investing activities | (221 | ) | (238 | ) | |||
Less: Proceeds from sales of assets, net of transaction fees and hedging | (1 | ) | (34 | ) | |||
Free cash flow | $ | (285 | ) | $ | (285 | ) | |
Ending cash and cash equivalents | $ | 462 | $ | 326 |
September 30, | March 31, | ||||||
2015 | 2015 | ||||||
Cash and cash equivalents | $ | 462 | $ | 628 | |||
Availability under committed credit facilities | 506 | 510 | |||||
Total liquidity | $ | 968 | $ | 1,138 |
Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Net (loss) income attributable to our common shareholder | $ | (13 | ) | $ | 38 | $ | (73 | ) | $ | 73 | |||||
Special Items: | |||||||||||||||
Gain on assets held for sale | — | — | — | (11 | ) | ||||||||||
Loss on extinguishment of debt | — | — | 13 | — | |||||||||||
Metal price lag | 54 | (9 | ) | 139 | (11 | ) | |||||||||
Restructuring and impairment, net | 4 | 7 | 19 | 13 | |||||||||||
Tax effect on Special Items | (20 | ) | — | (49 | ) | — | |||||||||
Net income attributable to our common shareholder, excluding special items | $ | 25 | $ | 36 | $ | 49 | $ | 64 |
Selected Operating Results Three Months Ended September 30, 2015 | North America | Europe | Asia | South America | Eliminations and Other | Total | ||||||||||||||||||
Adjusted EBITDA | $ | 53 | $ | 41 | $ | 34 | $ | 54 | $ | — | $ | 182 | ||||||||||||
Metal price lag | (37 | ) | (15 | ) | (5 | ) | 3 | — | (54 | ) | ||||||||||||||
Adjusted EBITDA excluding metal price lag | $ | 90 | $ | 56 | $ | 39 | $ | 51 | $ | — | $ | 236 | ||||||||||||
Shipments | ||||||||||||||||||||||||
Rolled products - third party | 268 | 235 | 173 | 112 | — | 788 | ||||||||||||||||||
Rolled products - intersegment | 1 | 15 | 14 | 5 | (35 | ) | — | |||||||||||||||||
Total rolled products | 269 | 250 | 187 | 117 | (35 | ) | 788 |
Selected Operating Results Three Months Ended September 30, 2014 | North America | Europe | Asia | South America | Eliminations and Other | Total | ||||||||||||||||||
Adjusted EBITDA | $ | 76 | $ | 75 | $ | 36 | $ | 41 | $ | 2 | $ | 230 | ||||||||||||
Metal price lag | 6 | 2 | — | 1 | — | 9 | ||||||||||||||||||
Adjusted EBITDA excluding metal price lag | $ | 70 | $ | 73 | $ | 36 | $ | 40 | $ | 2 | $ | 221 | ||||||||||||
Shipments | ||||||||||||||||||||||||
Rolled products - third party | 259 | 225 | 173 | 108 | — | 765 | ||||||||||||||||||
Rolled products - intersegment | 1 | 9 | 13 | 8 | (31 | ) | — | |||||||||||||||||
Total rolled products | 260 | 234 | 186 | 116 | (31 | ) | 765 |
Selected Operating Results Six Months Ended September 30, 2015 | North America | Europe | Asia | South America | Eliminations and Other | Total | ||||||||||||||||||
Adjusted EBITDA | $ | 95 | $ | 32 | $ | 70 | $ | 113 | $ | (1 | ) | $ | 309 | |||||||||||
Metal price lag | (63 | ) | (70 | ) | (8 | ) | 2 | — | (139 | ) | ||||||||||||||
Adjusted EBITDA excluding metal price lag | $ | 158 | $ | 102 | $ | 78 | $ | 111 | $ | (1 | ) | $ | 448 | |||||||||||
Shipments | ||||||||||||||||||||||||
Rolled products - third party | 529 | 466 | 355 | 206 | — | 1,556 | ||||||||||||||||||
Rolled products - intersegment | 1 | 36 | 25 | 18 | (80 | ) | — | |||||||||||||||||
Total rolled products | 530 | 502 | 380 | 224 | (80 | ) | 1,556 |
Selected Operating Results Six Months Ended September 30, 2014 | North America | Europe | Asia | South America | Eliminations and Other | Total | ||||||||||||||||||
Adjusted EBITDA | $ | 140 | $ | 154 | $ | 73 | $ | 96 | $ | 2 | $ | 465 | ||||||||||||
Metal price lag | 5 | 7 | — | (1 | ) | — | 11 | |||||||||||||||||
Adjusted EBITDA excluding metal price lag | $ | 135 | $ | 147 | $ | 73 | $ | 97 | $ | 2 | $ | 454 | ||||||||||||
Shipments | ||||||||||||||||||||||||
Rolled products - third party | 507 | 460 | 351 | 217 | — | 1,535 | ||||||||||||||||||
Rolled products - intersegment | 2 | 20 | 23 | 13 | (58 | ) | — | |||||||||||||||||
Total rolled products | 509 | 480 | 374 | 230 | (58 | ) | 1,535 |