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 February 9, 2016 (furnished to the Commission as a part of this Form 8-K). | ||
99.2 | Presentation materials, dated February 9, 2016 (furnished to the Commission as a part of this Form 8-K). | ||
NOVELIS INC. | ||||
Date: February 9, 2016 | 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 February 9, 2016 (furnished to the Commission as a part of this Form 8-K). | ||
99.2 | Presentation materials, dated February 9, 2016 (furnished to the Commission as a part of this Form 8-K). |
• | Net income of $6 million; excluding special items, net income $32 million |
• | Excluding metal price lag, Adjusted EBITDA increased 4% YoY to $238 million |
• | Record automotive shipments up 52% YoY |
• | Global FRP shipments of 779 kilotonnes, up 3% YoY |
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 December 31, | Nine Months Ended December 31, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Net sales | $ | 2,354 | $ | 2,847 | $ | 7,470 | $ | 8,358 | |||||||
Cost of goods sold (exclusive of depreciation and amortization) | 2,051 | 2,498 | 6,692 | 7,310 | |||||||||||
Selling, general and administrative expenses | 104 | 108 | 304 | 319 | |||||||||||
Depreciation and amortization | 88 | 87 | 264 | 266 | |||||||||||
Interest expense and amortization of debt issuance costs | 82 | 85 | 244 | 248 | |||||||||||
Research and development expenses | 13 | 14 | 39 | 38 | |||||||||||
Gain on assets held for sale | — | (12 | ) | — | (23 | ) | |||||||||
Loss on extinguishment of debt | — | — | 13 | — | |||||||||||
Restructuring and impairment, net | 10 | 25 | 29 | 38 | |||||||||||
Equity in net loss of non-consolidated affiliates | — | 2 | 2 | 4 | |||||||||||
Other (income) expense, net | (16 | ) | (9 | ) | (78 | ) | 14 | ||||||||
2,332 | 2,798 | 7,509 | 8,214 | ||||||||||||
Income (loss) before income taxes | 22 | 49 | (39 | ) | 144 | ||||||||||
Income tax provision | 16 | 3 | 28 | 25 | |||||||||||
Net income (loss) | 6 | 46 | (67 | ) | 119 | ||||||||||
Net income attributable to noncontrolling interests | — | — | — | — | |||||||||||
Net income (loss) attributable to our common shareholder | $ | 6 | $ | 46 | $ | (67 | ) | $ | 119 |
December 31, 2015 | March 31, 2015 | ||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 457 | $ | 628 | |||
Accounts receivable, net | |||||||
— third parties (net of uncollectible accounts of $3 as of December 31, 2015 and March 31, 2015) | 1,110 | 1,289 | |||||
— related parties | 56 | 53 | |||||
Inventories | 1,277 | 1,431 | |||||
Prepaid expenses and other current assets | 107 | 112 | |||||
Fair value of derivative instruments | 64 | 77 | |||||
Deferred income tax assets | 95 | 79 | |||||
Assets held for sale | 5 | 6 | |||||
Total current assets | 3,171 | 3,675 | |||||
Property, plant and equipment, net | 3,465 | 3,542 | |||||
Goodwill | 607 | 607 | |||||
Intangible assets, net | 545 | 584 | |||||
Investment in and advances to non–consolidated affiliate | 452 | 447 | |||||
Deferred income tax assets | 109 | 95 | |||||
Other long–term assets | |||||||
— third parties | 109 | 137 | |||||
— related parties | 17 | 15 | |||||
Total assets | $ | 8,475 | $ | 9,102 | |||
LIABILITIES AND SHAREHOLDER’S DEFICIT | |||||||
Current liabilities | |||||||
Current portion of long–term debt | $ | 47 | $ | 108 | |||
Short–term borrowings | 932 | 846 | |||||
Accounts payable | |||||||
— third parties | 1,384 | 1,854 | |||||
— related parties | 49 | 44 | |||||
Fair value of derivative instruments | 111 | 149 | |||||
Accrued expenses and other current liabilities | 514 | 572 | |||||
Deferred income tax liabilities | 8 | 20 | |||||
Total current liabilities | 3,045 | 3,593 | |||||
Long–term debt, net of current portion | 4,442 | 4,349 | |||||
Deferred income tax liabilities | 243 | 261 | |||||
Accrued postretirement benefits | 749 | 748 | |||||
Other long–term liabilities | 168 | 221 | |||||
Total liabilities | 8,647 | 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 December 31, 2015 and March 31, 2015 | — | — | |||||
Additional paid–in capital | 1,404 | 1,404 | |||||
Accumulated deficit | (992 | ) | (925 | ) | |||
Accumulated other comprehensive loss | (594 | ) | (561 | ) | |||
Total deficit of our common shareholder | (182 | ) | (82 | ) | |||
Noncontrolling interests | 10 | 12 | |||||
Total deficit | (172 | ) | (70 | ) | |||
Total liabilities and deficit | $ | 8,475 | $ | 9,102 |
Nine Months Ended December 31, | |||||||
2015 | 2014 | ||||||
OPERATING ACTIVITIES | |||||||
Net (loss) income | $ | (67 | ) | $ | 119 | ||
Adjustments to determine net cash provided by operating activities: | |||||||
Depreciation and amortization | 264 | 266 | |||||
(Gain) loss on unrealized derivatives and other realized derivatives in investing activities, net | (25 | ) | 6 | ||||
Gain on assets held for sale | — | (23 | ) | ||||
Loss on sale of assets | 2 | 4 | |||||
Impairment charges | 8 | 7 | |||||
Loss on extinguishment of debt | 13 | — | |||||
Deferred income taxes | (60 | ) | (46 | ) | |||
Amortization of fair value adjustments, net | 9 | 9 | |||||
Equity in net loss of non-consolidated affiliates | 2 | 4 | |||||
Gain on foreign exchange remeasurement of debt | (5 | ) | (4 | ) | |||
Amortization of debt issuance costs and carrying value adjustments | 15 | 19 | |||||
Changes in assets and liabilities including assets and liabilities held for sale (net of effects from divestitures): | |||||||
Accounts receivable | 166 | (176 | ) | ||||
Inventories | 146 | (437 | ) | ||||
Accounts payable | (422 | ) | 427 | ||||
Other current assets | 6 | (62 | ) | ||||
Other current liabilities | (42 | ) | (6 | ) | |||
Other noncurrent assets | 21 | 3 | |||||
Other noncurrent liabilities | (30 | ) | (23 | ) | |||
Net cash provided by operating activities | 1 | 87 | |||||
INVESTING ACTIVITIES | |||||||
Capital expenditures | (282 | ) | (368 | ) | |||
Proceeds from sales of assets, third party, net of transaction fees and hedging | 2 | 100 | |||||
Outflows from investments in and advances to non-consolidated affiliates, net | (5 | ) | (17 | ) | |||
(Outflows) proceeds from settlement of other undesignated derivative instruments, net | (11 | ) | 1 | ||||
Net cash used in investing activities | (296 | ) | (284 | ) | |||
FINANCING ACTIVITIES | |||||||
Proceeds from issuance of long-term and short-term borrowings | 151 | 303 | |||||
Principal payments of long-term and short-term borrowings | (194 | ) | (209 | ) | |||
Revolving credit facilities and other, net | 178 | 238 | |||||
Return of capital to our common shareholder | — | (250 | ) | ||||
Dividends, noncontrolling interest | (1 | ) | (1 | ) | |||
Debt issuance costs | (15 | ) | (3 | ) | |||
Net cash provided by financing activities | 119 | 78 | |||||
Net decrease in cash and cash equivalents | (176 | ) | (119 | ) | |||
Effect of exchange rate changes on cash | 5 | (3 | ) | ||||
Cash and cash equivalents — beginning of period | 628 | 509 | |||||
Cash and cash equivalents — end of period | $ | 457 | $ | 387 |
(in millions) | Three Months Ended December 31, | Nine Months Ended December 31, | |||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Net income (loss) attributable to our common shareholder | $ | 6 | $ | 46 | $ | (67 | ) | $ | 119 | ||||||
Income tax provision | (16 | ) | (3 | ) | (28 | ) | (25 | ) | |||||||
Interest, net | (77 | ) | (84 | ) | (235 | ) | (244 | ) | |||||||
Depreciation and amortization | (88 | ) | (87 | ) | (264 | ) | (266 | ) | |||||||
EBITDA | 187 | 220 | 460 | 654 | |||||||||||
Unrealized (losses) gains on change in fair value of derivative instruments, net | (2 | ) | 12 | 18 | 12 | ||||||||||
Realized gains (losses) on derivative instruments not included in segment income | 1 | (3 | ) | (1 | ) | (4 | ) | ||||||||
Adjustment to eliminate proportional consolidation | (7 | ) | (10 | ) | (22 | ) | (27 | ) | |||||||
Loss on sale of fixed assets | (1 | ) | (1 | ) | (2 | ) | (4 | ) | |||||||
Gain on assets held for sale | — | 12 | — | 23 | |||||||||||
Loss on extinguishment of debt | — | — | (13 | ) | — | ||||||||||
Restructuring and impairment, net | (10 | ) | (25 | ) | (29 | ) | (38 | ) | |||||||
Other expense, net | (6 | ) | (1 | ) | (12 | ) | (9 | ) | |||||||
Adjusted EBITDA | $ | 212 | $ | 236 | $ | 521 | $ | 701 | |||||||
Metal price lag | (26 | ) | 8 | (165 | ) | 19 | |||||||||
Adjusted EBITDA excluding metal price lag | $ | 238 | $ | 228 | $ | 686 | $ | 682 |
Nine Months Ended December 31, | |||||||
2015 | 2014 | ||||||
Net cash provided by operating activities | $ | 1 | $ | 87 | |||
Net cash used in investing activities | (296 | ) | (284 | ) | |||
Less: Proceeds from sales of assets, net of transaction fees and hedging | (2 | ) | (100 | ) | |||
Free cash flow | $ | (297 | ) | $ | (297 | ) | |
Ending cash and cash equivalents | $ | 457 | $ | 387 |
December 31, | March 31, | ||||||
2015 | 2015 | ||||||
Cash and cash equivalents | $ | 457 | $ | 628 | |||
Availability under committed credit facilities | 489 | 510 | |||||
Total liquidity | $ | 946 | $ | 1,138 |
Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Net income (loss) attributable to our common shareholder | $ | 6 | $ | 46 | $ | (67 | ) | $ | 119 | ||||||
Special Items: | |||||||||||||||
Gain on assets held for sale | — | 12 | — | 23 | |||||||||||
Loss on extinguishment of debt | — | — | (13 | ) | — | ||||||||||
Metal price lag | (26 | ) | 8 | (165 | ) | 19 | |||||||||
Restructuring and impairment, net | (10 | ) | (25 | ) | (29 | ) | (38 | ) | |||||||
Tax effect on Special Items | 10 | (3 | ) | 59 | (3 | ) | |||||||||
Net income attributable to our common shareholder, excluding special items | $ | 32 | $ | 54 | $ | 81 | $ | 118 |
Selected Operating Results Three Months Ended December 31, 2015 | North America | Europe | Asia | South America | Eliminations and Other | Total | ||||||||||||||||||
Adjusted EBITDA | $ | 68 | $ | 37 | $ | 30 | $ | 77 | $ | — | $ | 212 | ||||||||||||
Metal price lag | (16 | ) | (8 | ) | (3 | ) | 1 | — | (26 | ) | ||||||||||||||
Adjusted EBITDA excluding metal price lag | $ | 84 | $ | 45 | $ | 33 | $ | 76 | $ | — | $ | 238 | ||||||||||||
Shipments | ||||||||||||||||||||||||
Rolled products - third party | 253 | 220 | 183 | 123 | — | 779 | ||||||||||||||||||
Rolled products - intersegment | — | 12 | 10 | 9 | (31 | ) | — | |||||||||||||||||
Total rolled products | 253 | 232 | 193 | 132 | (31 | ) | 779 |
Selected Operating Results Three Months Ended December 31, 2014 | North America | Europe | Asia | South America | Eliminations and Other | Total | ||||||||||||||||||
Adjusted EBITDA | $ | 71 | $ | 57 | $ | 33 | $ | 75 | $ | — | $ | 236 | ||||||||||||
Metal price lag | 2 | (5 | ) | 8 | 3 | — | 8 | |||||||||||||||||
Adjusted EBITDA excluding metal price lag | $ | 69 | $ | 62 | $ | 25 | $ | 72 | $ | — | $ | 228 | ||||||||||||
Shipments | ||||||||||||||||||||||||
Rolled products - third party | 255 | 205 | 177 | 120 | — | 757 | ||||||||||||||||||
Rolled products - intersegment | — | 13 | 21 | 9 | (43 | ) | — | |||||||||||||||||
Total rolled products | 255 | 218 | 198 | 129 | (43 | ) | 757 |
Selected Operating Results Nine Months Ended December 31, 2015 | North America | Europe | Asia | South America | Eliminations and Other | Total | ||||||||||||||||||
Adjusted EBITDA | $ | 163 | $ | 69 | $ | 100 | $ | 190 | $ | (1 | ) | $ | 521 | |||||||||||
Metal price lag | (79 | ) | (78 | ) | (10 | ) | 2 | — | (165 | ) | ||||||||||||||
Adjusted EBITDA excluding metal price lag | $ | 242 | $ | 147 | $ | 110 | $ | 188 | $ | (1 | ) | $ | 686 | |||||||||||
Shipments | ||||||||||||||||||||||||
Rolled products - third party | 782 | 686 | 538 | 329 | — | 2,335 | ||||||||||||||||||
Rolled products - intersegment | 1 | 48 | 35 | 27 | (111 | ) | — | |||||||||||||||||
Total rolled products | 783 | 734 | 573 | 356 | (111 | ) | 2,335 |
Selected Operating Results Nine Months Ended December 31, 2014 | North America | Europe | Asia | South America | Eliminations and Other | Total | ||||||||||||||||||
Adjusted EBITDA | $ | 211 | $ | 211 | $ | 106 | $ | 171 | $ | 2 | $ | 701 | ||||||||||||
Metal price lag | 7 | 2 | 9 | 1 | — | 19 | ||||||||||||||||||
Adjusted EBITDA excluding metal price lag | $ | 204 | $ | 209 | $ | 97 | $ | 170 | $ | 2 | $ | 682 | ||||||||||||
Shipments | ||||||||||||||||||||||||
Rolled products - third party | 762 | 665 | 528 | 337 | — | 2,292 | ||||||||||||||||||
Rolled products - intersegment | 2 | 33 | 44 | 22 | (101 | ) | — | |||||||||||||||||
Total rolled products | 764 | 698 | 572 | 359 | (101 | ) | 2,292 |