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Proc-Type: 2001,MIC-CLEAR
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SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13
or 15(d) of the Securities
Exchange Act of 1934 Date of Report: September 11, 2003 Alcan Inc. (Exact name of Registrant as
specified in its charter) Canada (State or other jurisdiction of incorporation) Inapplicable 1188 Sherbrooke Street West, Montreal, Quebec, Canada H3A
3G2 (Address of principal executive offices, including postal
code) (514) 848-8000 (Registrant's telephone number, including area code)
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits. -2- Alcan Inc.'s (the "Company", "we", "us" and "our")
Management's Discussion and Analysis of Financial Condition and Results of
Operations in our 2002 Annual Report, which is incorporated by reference in our
Form 10-K for the fiscal year ended December 31, 2002, as amended by our
Amendment to Report on Form 10-K/A dated September 11, 2003
(the "Amended Form 10-K"), includes certain financial measures that do not have
uniform definitions and whose titles do not describe how they are calculated.
These financial measures are effective average interest rate, free cash flow,
and debt as a percent of invested capital. The following explanations and tables present, for each such financial
measure, a clear description of its calculation and a reconciliation to figures
reported in our GAAP financial statements and certain supplemental information
concerning each measure that are in response to recent rules adopted by the
Securities and Exchange Commission regarding non-GAAP financial measures. The
table at page 7 presents certain information concerning our stock-based
compensation plans that supplements the information in note 20 of the Company's
consolidated financial statements. -3- Reconciliation of the calculation of effective average interest rate The reconciliation below explains the derivation of the
Company's effective average interest rate disclosed in the Company's Amended
Form 10-K. The Company believes that information about the effective average
interest rate paid by the Company may be a useful supplement to the information
about interest expense included in the Company's consolidated financial
statements because it represents the average cost of debt for the period in
question. The measure may facilitate the comparison and evaluation of the
cost-effectiveness of the Company's debt portfolio with that of other companies
and market benchmarks. The effective average interest rate is equal to the ratio
of interest expense to debt. Interest expense is total interest expense before
the deduction of capitalized interest and excluding interest charges not
relating to debt. Debt is equal to the average of total debt (that is,
short-term borrowings, debt maturing within one year, debt not maturing within
one year and debt of operations held for sale) for the quarterly period reported
and for the prior four quarters. Management believes that a five quarter average
result provides a more accurate representation of the average debt balance
outstanding for the entire period. -4- Effective Average Interest Rate In millions of US$, except where indicated 2002 Dec. 31, Mar. 31, Jun. 30, Sep. 30, Dec. 31, 2001 2002 2002 2002 2002 Short-term borrowings 553 408 396 384 381 Debt maturing within one year 652 516 678 612 295 Debt not maturing within one year 2,884 3,005 3,037 3,042 3,186 Debt of operations held for sale 2 2 2 2 5 Total 4,091 3,931 4,113 4,040 3,867 Average 5 Quarters 4,008 Interest expense 202 Interest expense - discontinued operations 1 Capitalized interest 1 Less: Interest charges not relating to debt (4) 200 Effective average interest rate 5.0% 2001 Dec. 31, Mar. 31, Jun. 30, Sep. 30, Dec. 31, 2000 2001 2001 2001 2001 Short-term borrowings 1,078 1,277 748 913 553 Debt maturing within one year 333 60 57 81 652 Debt not maturing within one year 3,195 3,638 3,909 3,787 2,884 Debt of operations held for sale 2 1 1 1 2 Total 4,608 4,976 4,715 4,782 4,091 Average 5 Quarters 4,634 Interest expense 252 Interest expense - discontinued operations 2 Capitalized interest 30 Less: Interest charges not relating to debt (1) 283 Effective average interest rate 6.1% 2000 Dec. 31, Mar. 31, Jun. 30, Sep. 30, Dec. 31, 1999 2000 2000 2000 2000 Short-term borrowings 167 159 586 355 1,078 Debt maturing within one year 311 322 232 204 333 Debt not maturing within one year 1,011 877 803 1,394 3,195 Debt of operations held for sale - - - - 2 Total 1,489 1,358 1,621 1,953 4,608 Average 5 Quarters 2,206 Interest expense 78 Interest expense - discontinued operations - Capitalized interest 81 Less: Interest charges not relating to debt (3) 156 Effective average interest rate 7.1% -5- Reconciliation of the calculation of free cash flow The table below reconciles the Company's free cash flow
information, as disclosed in the Company's Amended Form 10-K, to its
consolidated statement of cash flows. The term does not have a uniform
definition. As a result, the Company's measure of free cash flow may not be
comparable to other issuers' measures of free cash flow. The Company defines
free cash flow as the amount equal to cash from operating activities net of uses
of that cash for dividends and investments in property, plant and equipment. The
Company believes that free cash flow is a useful supplemental measure as it
presents the cash available to the Company for financing and business
acquisition activities. In millions of US$ Year Ended 2002 2001 2000 1999 1998 Cash from operating activities 1,614 1,387 1,066 1,182 739 Dividends Alcan shareholders (including
preference) (197) (200) (155) (140) (146) Minority interests (6) (2) (2) (8) (2) Additions to Property, plant and equipment (711) (1,091) (1,482) (1,169) (805) Additions to Property, plant and equipment - discontinued operations (17) (19) (9) - - Free Cash Flow 683 75 (582) (135) (214) -6- Reconciliation of the calculation of debt as a percent of
invested capital This reconciliation is presented to explain our calculation
of debt as a percent of invested capital disclosed in the Company's Amended Form
10-K. Debt as a percent of invested capital does not have a uniform definition.
Because other issuers may calculate debt as a percent of invested capital
differently, our calculation may not be comparable to other issuers'
calculations. The reconciliations of borrowings, equity and invested capital in
the table below are presented to explain our calculation. The figure is
calculated by dividing borrowings into total invested capital. Total invested
capital is equal to the sum of borrowings and equity. Borrowings is the sum of
the amounts for short-term borrowings, debt maturing within one year, debt not
maturing within one year and debt of operations held for sale. Equity is the sum
of the amounts for common shareholders' equity, redeemable non-retractable
preference shares and minority interests. Minority interests, which represent
the equity in the Company's consolidated subsidiaries that is owned by third
parties, are included in equity as the Company believes that, for purposes of
calculating debt as a percent of invested capital, minority interests have
characteristics that are more similar to equity than to debt. Minority interests
do not have characteristics such as fixed payment terms or interest terms that
are associated with debt. The full amount of debt of consolidated subsidiaries
is included in borrowings and accordingly, equity, for purposes of calculating
debt as a percent of invested capital, includes both the Company's equity in
consolidated subsidiaries and the minority interest shareholders' equity in the
Company's consolidated subsidiaries. The Company believes that debt as a percent
of invested capital can be a useful supplemental measure of the Company's
financial leverage because it indicates the extent to which it is financed by
debtholders. The measure is widely used to assess the relative amounts of
capital put at risk by debtholders and equity investors. In millions of US$, except where
indicated December 31 2002 2001 2000 1999 1998 Borrowings 381 553 1,078 167 86 295 652 333 311 166 3,186 2,884 3,195 1,011 1,537 5 2 2 - - 3,867 4,091 4,608 1,489 1,789 8,465 8,610 8,849 5,371 5,359 160 160 160 160 160 150 132 244 207 110 8,775 8,902 9,253 5,738 5,629 12,642 12,993 13,861 7,227 7,418 31% 32% 33% 21% 24% -7- Set forth below is supplemental information concerning our equity
compensation plans (all of which have been approved by shareholders) as of
December 31, 2002. Equity Compensation Plan
Information (a) (b) (c) Number of Common shares to be issued upon exercise of
outstanding options (in thousands) Weighted average exercise price of outstanding options
Number of Common shares remaining available for future
issuance under equity compensation plans (excluding securities reflected in
column (a)) (in thousands) 8,687 CAN$ 46.08 6,722 -8-
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits. -9- SIGNATURES Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized. ALCAN INC. Date: September 11,
1-3677
Commission File Number
(I.R.S. Employer Identification No.)
Short-term borrowings
Debt
maturing within one year
Debt not maturing within one year
Debt of
operations held for sale
Borrowings
Equity
Common shareholders' equity
Redeemable non-retractable preference shares
Minority interests
Equity
Total invested capital
Debt as a percent of invested capital (%)
(c)
Exhibits
(99)
Cautionary statement for purposes of the "Safe
Harbor" provisions of the Private Securities Litigation Reform Act of 1995.
By
/s/ Roy Millington
Roy Millington
Corporate Secretary
-10-
EXHIBIT INDEX
Exhibit Number |
Description |
(99) | Cautionary statement for purposes of the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. |
-11-
EXHIBIT NO. 99: CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Written or oral statements made by Alcan or its representatives, including statements set forth in Alcan's current report on Form 8-K, which describe the Company's or management's objectives, projections, estimates, expectations or predictions of the future may be "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995, which can be identified by the use of forward-looking terminology such as "believes," "expects," "may," "will," "should," "estimates," "anticipates" or the negative thereof or other variations thereon. The Company cautions that, by their nature, forward-looking statements involve risk and uncertainty and that the Company's actual results could differ materially from those expressed or implied in such forward-looking statements or could affect the extent to which a particular projection is realized.
Important factors which could cause the Company's actual performance to differ materially from projections or expectations included in forward-looking statements include global aluminum supply and demand conditions, aluminum ingot prices and changes in other raw materials costs and availability, cyclical demand and pricing within the principal markets for the Company's products, changes in government regulations, particularly those affecting environmental, health or safety compliance, economic developments and other factors within the countries in which the Company operates or sells its products and other factors relating to the Company's ongoing operations including, but not limited to, litigation, labour negotiations and fiscal regimes.
Copies of the Company's filings may be obtained by contacting the Company or the United States Securities and Exchange Commission.