-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, f5C/VssTt5/atdwj9Hqy7B8PmPRpG+EWMbG6MIgoFXKtHYoIcY1n/n/QUYZPIa3t xYOkPbagdq+d+IHdZULfIA== 0000083604-95-000010.txt : 19950516 0000083604-95-000010.hdr.sgml : 19950516 ACCESSION NUMBER: 0000083604-95-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950515 SROS: MSE SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: REYNOLDS METALS CO CENTRAL INDEX KEY: 0000083604 STANDARD INDUSTRIAL CLASSIFICATION: PRIMARY PRODUCTION OF ALUMINUM [3334] IRS NUMBER: 540355135 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-01430 FILM NUMBER: 95538451 BUSINESS ADDRESS: STREET 1: 6601 W BROAD ST STREET 2: PO BOX 27003 CITY: RICHMOND STATE: VA ZIP: 23261 BUSINESS PHONE: 8042812000 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-1430 REYNOLDS METALS COMPANY A Delaware Corporation (I.R.S. Employer Identification No. 54-0355135) 6601 West Broad Street, P. O. Box 27003, Richmond, Virginia 23261-7003 Telephone Number (804) 281-2000 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ___ As of April 30, 1995, the Registrant had 62,852,674 shares of Common Stock, no par value, outstanding and entitled to vote. PART I - FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) ___________________________________________________________________________ Reynolds Metals Company Quarter Ended March 31 ___________________________________________________________________________ (In millions, except per share amounts) 1995 1994 ___________________________________________________________________________ Revenues Net sales $1,651 $1,254 Equity, interest and other income 10 7 ___________________________________________________________________________ 1,661 1,261 ___________________________________________________________________________ Costs and expenses Cost of products sold 1,392 1,166 Selling, administrative and general expenses 107 92 Interest - principally on long-term obligations 43 36 ___________________________________________________________________________ 1,542 1,294 ___________________________________________________________________________ Income (loss) before income taxes 119 (33) Taxes on income (credit) 37 (12) ___________________________________________________________________________ Net income (loss) $82 $(21) Preferred stock dividends 9 7 ___________________________________________________________________________ Net income (loss) available to common stockholders $73 $(28) =========================================================================== Income (loss) per share (Note B) Average shares outstanding 72 61 Net income (loss) $1.13 $(0.46) Cash dividends per common share $0.25 $0.25 ___________________________________________________________________________ CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) ___________________________________________________________________________ Reynolds Metals Company March 31 December 31 ___________________________________________________________________________ (In millions) 1995 1994 ___________________________________________________________________________ ASSETS Current assets Cash and cash equivalents $38 $308 Short-term investments 90 126 Receivables, less allowances of $20 (1994 - $19) 1,076 962 Inventories 1,029 873 Prepaid expenses 62 53 ___________________________________________________________________________ Total current assets 2,295 2,322 Unincorporated joint ventures and associated companies 855 856 Property, plant and equipment 6,356 6,308 Less allowances for depreciation and amortization 3,244 3,200 ___________________________________________________________________________ 3,112 3,108 Deferred taxes and other assets 1,166 1,175 ___________________________________________________________________________ Total assets $7,428 $7,461 =========================================================================== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable, accrued and other liabilities $1,182 $1,286 Short-term obligations 143 120 Long-term debt 18 18 ___________________________________________________________________________ Total current liabilities 1,343 1,424 Long-term debt 1,849 1,848 Postretirement benefits 1,141 1,145 Environmental, deferred taxes and other liabilities 756 772 Stockholders' equity Preferred stock 505 505 Common stock 881 870 Retained earnings 1,037 980 Cumulative currency translation adjustments (44) (43) Pension liability adjustment (40) (40) ___________________________________________________________________________ Total stockholders' equity 2,339 2,272 ___________________________________________________________________________ Total liabilities and stockholders' equity $7,428 $7,461 =========================================================================== CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED) ____________________________________________________________________________________________________ Reynolds Metals Company
Three Months Ended March 31 ____________________________________________________________________________________________________ (In millions) 1995 1994 ____________________________________________________________________________________________________ Operating activities Net income (loss) $82 $(21) Adjustments to reconcile to net cash used in operating activities: Depreciation and amortization 76 71 Changes in operating assets and liabilities net of effects from acquisitions and dispositions: Accounts payable, accrued and other liabilities (109) 92 Receivables (111) (82) Inventories (161) (75) Other (23) (10) ____________________________________________________________________________________________________ Net cash used in operating activities (246) (25) Investing activities Capital investments (85) (52) Proceeds from sales of assets 28 5 Maturities of investments in debt securities 36 - Other investing activities - net 5 (20) ____________________________________________________________________________________________________ Net cash used in investing activities (16) (67) Financing activities Proceeds from preferred stock issue - 505 Increase (decrease) in short-term borrowings 18 (40) Cash dividends paid (25) - Reduction of long-term debt and other - net (1) (43) ____________________________________________________________________________________________________ Net cash provided by (used in) financing activities (8) 422 Cash and cash equivalents Net increase (decrease) (270) 330 At beginning of period 308 19 ____________________________________________________________________________________________________ At end of period $38 $349 ==================================================================================================== /TABLE REYNOLDS METALS COMPANY AND CONSOLIDATED SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Quarters Ended March 31, 1995 and 1994 Note A - Basis of presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 1995 are not necessarily indicative of the results that may be expected for the year ending December 31, 1995. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 1994. Note B - Earnings per share In the first quarter of 1995, earnings per share equals net income divided by the weighted-average number of common shares and common share equivalents outstanding during the period. The number of common share equivalents outstanding was based on the assumed conversion of the Company's 7% PRIDES(SM), Convertible Preferred Stock ("PRIDES"). In the first quarter of 1994, earnings per share equals net income, minus PRIDES dividends, divided by the weighted-average number of common shares outstanding during the period. Common share equivalents relating to the PRIDES were not included in the first quarter of 1994 since their effect would have been anti-dilutive. Note C - Financing Arrangements In the first quarter of 1995, the Company amended its $500 million revolving credit facility to extend the term and lower the cost. The expiration date of the facility was extended from 1999 to 2000. The annual commitment fee on the unused portion of the facility was lowered from .20% to .125%. No amounts were outstanding under the facility at March 31, 1995. Note D - Contingent liabilities As previously disclosed in the Company's annual report on Form 10-K for the year ended December 31, 1994, the Company is involved in various worldwide environmental improvement activities resulting from past operations, including designation as a potentially responsible party, with others, at various EPA designated Superfund sites. The Company has recorded amounts which, in management's best estimate, will be sufficient to satisfy anticipated costs of known remediation requirements. As a result of factors such as the continuing evolution of environmental laws and regulatory requirements, the availability and application of technology, the identification of presently unknown remediation sites and the allocation of costs among potentially responsible parties, estimated costs for future environmental compliance and remediation are necessarily imprecise. Based upon information presently available, such future costs are not expected to have a material adverse effect on the Company's competitive or financial position or its ongoing results of operations. However, such costs could be material to future quarterly or annual results of operations. Note E - Canadian Reynolds Metals Company, Limited Summarized financial information for Canadian Reynolds Metals Company, Limited is as follows: Quarter ended March 31 _______________________ 1995 1994 _______________________ Net Sales: Customers $113 $73 Parent company 179 116 _______________________ 292 189 Cost of products sold 215 181 Net income (loss) $50 $5 March 31 December 31 1995 1994 _______________________ Current assets $310 $238 Noncurrent assets 1,004 1,015 Current liabilities (79) (83) Noncurrent liabilities (579) (564) Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS INTRODUCTION The following discussion and analysis should be read in conjunction with the consolidated financial statements and notes thereto included in or referred to in this report. RESULTS OF OPERATIONS The Company had net income of $82 million ($1.13 per share) in the first quarter of 1995 compared to a net loss of $21 million ($.46 per share) in the first quarter of 1994. The strengthening global economy has resulted in increased aluminum consumption, declining worldwide inventories and higher demand and stronger prices for the Company's products. These factors, together with intensive cost reduction efforts, are reflected in the Company's significantly improved results. Shipments and Revenues Shipments, net sales and revenues per pound for the first quarter of 1995 and 1994 were as follows (metric tons in thousands and dollars in millions, except per pound amounts): First Quarter 1995 1994 _________________ Aluminum product shipments 392 345 Net sales: Aluminum $1,334 $926 Nonaluminum 317 328 _________________ Total $1,651 $1,254 ================= Revenues per pound: Fabricated aluminum products $1.73 $1.37 Primary aluminum $0.99 $0.61 Higher shipments were realized for most aluminum products, particularly cans and ends, sheet and primary and recycled ingot. In addition to the increase in demand, higher shipments of cans and ends and aluminum sheet were also attributable to the 1994 acquisitions of a can manufacturing facility and a metals distribution business. The increase in net sales for aluminum products was due to the higher shipping volume and higher prices for most aluminum products. The decline in nonaluminum sales was due to the divestiture of gold mining operations in mid-1994 and early 1995 and lower sales of real estate. This decline was somewhat offset by higher sales of stainless steel due to improved demand and the acquisition of a metals distribution business in 1994. Revenues by principal markets were: First Quarter 1995 1994 ______________ Packaging and Containers 41% 45% Distributors and Fabricators 16 13 Automotive and Transportation 15 11 Building and Construction 13 11 Electrical 3 3 Other 12 17 ______________ Total 100% 100% ============== Sales to the packaging and containers market improved 18% in the first quarter of 1995 but provided a lower percentage of total revenues due to substantial gains in sales to other markets. Higher sales were realized to the distributors and fabricators market (up 57%), the automotive and transportation market (up 72%) and the building and construction market (up 51%). For further information concerning shipments and revenues, see the discussion under "Operating Area Analysis". Costs and Expenses The increase in cost of products sold was due to the higher shipping volume and higher costs for purchased materials. Costs were favorably impacted by performance improvement programs and higher capacity utilization at aluminum fabricating facilities. Selling, administrative and general expenses increased due to the higher level of business activity but declined from 7.3% to 6.5% of net sales. The increase in interest expense was due to higher rates. On a quarterly basis, the Company evaluates the status of all significant existing or potential environmental issues, develops or revises estimates of costs to satisfy known remediation requirements and adjusts its accruals accordingly. Based upon information presently available, such future costs are not expected to have a material adverse effect on the Company's competitive or financial position or its ongoing results of operations. However, it is not possible to predict the amount or timing of future costs of environmental remediation requirements which may subsequently be determined. Such costs could be material to future quarterly or annual results of operations. On August 29, 1994 and March 30, 1995, the Company received civil investigative demands from the U.S. Department of Justice relating to production of primary aluminum and the pricing of aluminum can stock, respectively. The Company is cooperating with both inquiries and is confident that its conduct has been in compliance with U.S. antitrust laws. Various suits and claims are pending against the Company. In the opinion of management, after consultation with counsel, disposition of these suits and claims, either individually or in the aggregate, will not have a material adverse effect on the Company's competitive or financial position or its ongoing results of operations. No assurance can be given, however, that the disposition of one or more of such suits or claims in a particular reporting period will not be material in relation to the reported results for such period. Taxes on Income The effective tax rates reflected in the income statement differ from the U.S. federal statutory rate because of state and foreign taxes and the effects of percentage depletion allowances. OPERATING AREA ANALYSIS (Metric tons in thousands, dollars in millions) FIRST QUARTER ______________________________ Net Sales Shipments 1995 1994 1995 1994 _____________________________ Finished products and other sales Packaging and containers: Aluminum $402 $337 82 76 Nonaluminum 123 121 Other aluminum 151 92 44 33 Other nonaluminum 128 110 _____________________________ 804 660 126 109 _____________________________ Production and Processing Primary aluminum 133 74 61 55 Flat rolled 330 217 106 98 Extruded and drawn 195 131 56 51 Other aluminum 123 75 43 32 Other nonaluminum 66 63 Gold - 34 _____________________________ 847 594 266 236 _____________________________ Net sales $1,651$1,254 392 345 ============================= Finished Products and Other Sales Higher shipments were realized for most products, particularly cans and ends and aluminum sheet. The increase in aluminum sales reflects the higher shipping volume and stronger prices for aluminum products. The increase in nonaluminum sales is principally attributable to stainless steel. In addition to the increase in demand, higher shipments and sales of cans, ends, aluminum sheet and stainless steel were also attributable to the 1994 acquisitions of a can manufacturing facility and a metals distribution business. Production and Processing Higher shipments were realized for most products, particularly primary and recycled ingot, electrical rod and can sheet. The increase in aluminum sales reflects the higher shipping volume and stronger prices. The Company sold a portion of its gold mining operations in mid-1994 and the remainder in early 1995. LIQUIDITY AND CAPITAL RESOURCES Working Capital Working capital totalled $952 million at March 31, 1995, compared to $898 million at December 31, 1994. The ratio of current assets to current liabilities was 1.7/1 at March 31, 1995, compared to 1.6/1 at December 31, 1994. The increase in working capital reflects the higher level of business activity. Inventories have increased due to anticipated higher shipping levels in the second quarter of 1995. Operating Activities In the first quarter of 1995, cash generated from operations was supplemented with cash on hand to finance increases in inventories and receivables and to reduce accounts payable, accrued and other liabilities. Investing Activities Capital investments of $85 million in the first quarter of 1995 included $34 million for operating requirements (i.e., replacement equipment, capital maintenance, environmental control projects, etc.). The remainder was for continuing performance improvement and strategic investment projects including modernization of can manufacturing facilities; improvements at the can sheet facility in Alabama; a new wheel facility in Wisconsin; expansion of foil rolling capacity at a facility in Kentucky; and equipment upgrades at a number of other facilities. In the first quarter of 1995, the Company sold its remaining gold mining assets in Australia for $28 million. The proceeds from the sale, which approximated book value, will be redeployed into value-added businesses. The sale is not expected to have a material effect on the Company's ongoing results of operations. Financing Activities In the first quarter of 1995, the Company amended its $500 million revolving credit facility to extend the term and lower the cost. The expiration date of the facility was extended from 1999 to 2000. The annual commitment fee on the unused portion of the facility was lowered from .20% to .125%. No amounts were outstanding under the facility at March 31, 1995. In the first quarter of 1995, the Company contributed 206,000 shares of common stock, valued at approximately $10 million, to its pension plans. Financial Outlook Capital investments in 1995 are expected to total $575 million. Approximately 35% of this amount will be for operating requirements. The remainder will be for performance improvement and strategic investment projects. In addition to those projects where expenditures were made in the first quarter of 1995, performance improvement and strategic investment projects also include participation in the construction of foreign can plants; capacity expansion at a plastic film plant in Virginia; capacity expansion at a fabricated aluminum automotive components plant in Indiana (see below); and equipment upgrades at a number of other facilities. Capital investments in 1995 will be funded primarily with cash generated from operations, proceeds from the sale of non-core assets and a portion of the remaining proceeds from the Company's preferred stock issued in early 1994. Rates for electricity charged by the Bonneville Power Administration ("BPA"), which serves the Company's Troutdale, Oregon and Longview, Washington primary aluminum production plants, have been settled through October, 1996. However, the longer-term outlook for BPA's rates remains uncertain, due in part to ongoing political, regulatory and judicial developments relating to endangered species listings of Snake River salmon and the effect of such developments on BPA's hydroelectric operations. Further increases in power rates which are already relatively high by worldwide standards could jeopardize the long-term competitiveness of the Company's Troutdale and Longview plants. The Company would have to consider whether paying increased power rates for its smelter operations in the Pacific Northwest would be prudent under prevailing economic conditions. The Company is exploring competitive alternatives to BPA power. In the first quarter of 1995, the Company announced plans for a $12 million expansion that will more than double annual production capacity at its fabricated aluminum automotive components plant in Indiana. The start-up of the additional capacity is set for early 1996. The expansion will allow the facility to keep up with a growing customer base. The Company believes its available financial resources (including cash and investments of over $100 million), together with internally generated funds, are sufficient to meet its business needs at the present time and for the foreseeable future. The Company continues to exceed the financial ratio requirements contained in its financing arrangements and expects to do so for the foreseeable future. At March 31, 1995, $222 million of the Company's $1.65 billion shelf registration remained available for the issuance of debt securities. OTHER INFORMATION The Financial Accounting Standards Board issued in March, 1995, FAS No. 121 - Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of. The Company is in the process of evaluating the provisions of this pronouncement and has not made a determination as to the impact, if any, on the Company's financial position and/or results of operations. PART II - OTHER INFORMATION Item 1. LEGAL PROCEEDINGS On March 30, 1995, the registrant received a civil investigative demand from the U.S. Department of Justice relating to the pricing of aluminum can stock. The registrant is cooperating with the inquiry and is confident that its conduct has been in compliance with U.S. antitrust laws. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The Annual Meeting of Stockholders of the Company was held on April 19, 1995. The stockholders (i) elected the sixteen nominees named in the Company's proxy statement to serve as Directors, (ii) approved amendment of the Company's Performance Incentive Plan and (iii) ratified the selection of Ernst & Young LLP as independent auditors of the Company for 1995. The number of votes cast for, against or withheld, and the number of abstentions, as applicable, with respect to each of the foregoing matters were as set forth below. There were no broker nonvotes with respect to any of the foregoing matters. No other matters were voted upon at the meeting. (i) Election of Directors Name Number Of Votes Number Of Votes Cast "For" Withheld Patricia C. Barron 62,176,628 332,022 William O. Bourke 61,810,979 697,671 Yale M. Brandt 62,173,805 334,845 John R. Hall 62,181,371 327,279 Robert L. Hintz 62,179,513 329,137 Richard G. Holder 62,177,042 331,608 William H. Joyce 62,096,706 411,944 Mylle Bell Mangum 62,091,638 417,012 D. Larry Moore 62,096,598 412,052 Randolph N. Reynolds 62,178,040 330,610 James M. Ringler 62,180,592 328,058 Charles A. Sanders 62,179,692 328,958 Henry S. Savedge, Jr. 62,179,637 329,013 Jeremiah J. Sheehan 62,182,749 325,901 Robert J. Vlasic 62,174,826 333,824 Joe B. Wyatt 62,176,876 331,774 (ii) Approval of Amendment of Performance Incentive Plan Number of Votes Cast "For" 60,345,128 Number of Votes Cast "Against" 1,722,440 Number of Abstentions 442,781 (iii) Ratification of Selection of Ernst & Young LLP as Independent Auditors Number of Votes Cast "For" 61,862,443 Number of Votes Cast "Against" 242,529 Number of Abstentions 404,179 Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits See Index to Exhibits. (b) Reports on Form 8-K During the first quarter of 1995, the Registrant filed with the Commission a Current Report on Form 8-K dated March 30, 1995 reporting under Item 5 that it had (i) completed the sale of its wholly owned subsidiary, Reynolds Australian Gold Operations, Ltd. (which at the time of the sale held the Registrant's principal remaining gold mining assets), to Sons of Gwalia Ltd. and Camelot Resources N.L. and (ii) received a civil investigative demand from the U.S. Department of Justice relating to the pricing of aluminum can stock. 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 thereunto duly authorized. REYNOLDS METALS COMPANY By Allen M. Earehart Allen M. Earehart Vice President, Controller (Principal Accounting Officer) DATE: May 12, 1995 INDEX TO EXHIBITS EXHIBIT 2 - None * EXHIBIT 3.1 - Restated Certificate of Incorporation, as amended to the date hereof. (File No. 1-1430, 1994 Form 10-K Report, EXHIBIT 3.1) * EXHIBIT 3.2 - By-Laws, as amended to the date hereof. (File No. 1-1430, 1994 Form 10-K Report, EXHIBIT 3.2) EXHIBIT 4.1 - Restated Certificate of Incorporation. See EXHIBIT 3.1. EXHIBIT 4.2 - By-Laws. See EXHIBIT 3.2. * EXHIBIT 4.3 - Indenture dated as of April 1, 1989 (the "Indenture") between Reynolds Metals Company and The Bank of New York, as Trustee, relating to Debt Securities. (File No. 1-1430, Form 10-Q Report for the Quarter Ended March 31, 1989, EXHIBIT 4(c)) * EXHIBIT 4.4 - Amendment No. 1 dated as of November 1, 1991 to the Indenture. (File No. 1-1430, 1991 Form 10-K Report, EXHIBIT 4.4) * EXHIBIT 4.5 - Rights Agreement dated as of November 23, 1987 (the "Rights Agreement") between Reynolds Metals Company and The Chase Manhattan Bank, N.A. (File No. 1-1430, Registration Statement on Form 8-A dated November 23, 1987, pertaining to Preferred Stock Purchase Rights, EXHIBIT 1) * EXHIBIT 4.6 - Amendment No. 1 dated as of December 19, 1991 to the Rights Agreement. (File No. 1-1430, 1991 Form 10-K Report, EXHIBIT 4.11) * EXHIBIT 4.7 - Form of 9-3/8% Debenture due June 15, 1999. (File No. 1-1430, Form 8-K Report dated June 6, 1989, EXHIBIT 4) * EXHIBIT 4.8 - Form of Fixed Rate Medium-Term Note. (Registration Statement No. 33-30882 on Form S-3, dated August 31, 1989, EXHIBIT 4.3) * EXHIBIT 4.9 - Form of Floating Rate Medium-Term Note. (Registration Statement No. 33-30882 on Form S-3, dated August 31, 1989, EXHIBIT 4.4) * EXHIBIT 4.10 - Form of Book-Entry Fixed Rate Medium-Term Note. (File No. 1-1430, 1991 Form 10-K Report, EXHIBIT 4.15) * EXHIBIT 4.11 - Form of Book-Entry Floating Rate Medium-Term Note. (File No. 1-1430, 1991 Form 10-K Report, EXHIBIT 4.16) * EXHIBIT 4.12 - Form of 9% Debenture due August 15, 2003. (File No. 1-1430, Form 8-K Report dated August 16, 1991, Exhibit 4(a)) * EXHIBIT 4.13 - Articles of Continuance of Canadian Reynolds Metals Company, Limited -- Societe Canadienne de Metaux Reynolds, Limitee ("CRM"), as amended to the date hereof. (Registration Statement No. 33-59168 on Form S-3, dated March 5, 1993, EXHIBIT 4.1) * EXHIBIT 4.14 - By-Laws of CRM, as amended to the date hereof. (File No. 1-1430, Form 10-Q Report for the Quarter Ended September 30, 1993, EXHIBIT 4.19) * EXHIBIT 4.15 - Indenture dated as of April 1, 1993 among CRM, Reynolds Metals Company and The Bank of New York, as Trustee. (File No. 1-1430, Form 8-K Report dated July 14, 1993, EXHIBIT 4(a)) * EXHIBIT 4.16 - Form of 6-5/8% Guaranteed Amortizing Note due July 15, 2002. (File No. 1-1430, Form 8-K Report dated July 14, 1993, EXHIBIT 4(d)) * EXHIBIT 10.1 - Reynolds Metals Company 1982 Nonqualified Stock Option Plan, as amended through May 17, 1985. (File No. 1-1430, 1985 Form 10-K Report, EXHIBIT 10.2) * EXHIBIT 10.2 - Reynolds Metals Company 1987 Nonqualified Stock Option Plan. (Registration Statement No. 33-13822 on Form S-8, dated April 28, 1987, EXHIBIT 28.1) * EXHIBIT 10.3 - Reynolds Metals Company 1992 Nonqualified Stock Option Plan. (Registration Statement No. 33-44400 on Form S-8, dated December 9, 1991, EXHIBIT 28.1) EXHIBIT 10.4 - Reynolds Metals Company Performance Incentive Plan, as amended and restated effective January 1, 1996 * EXHIBIT 10.5 - Agreement dated December 9, 1987 between Reynolds Metals Company and Jeremiah J. Sheehan. (File No. 1-1430, 1987 Form 10-K Report, EXHIBIT 10.9) * EXHIBIT 10.6 - Supplemental Death Benefit Plan for Officers. (File No. 1-1430, 1986 Form 10-K Report, EXHIBIT 10.8) * EXHIBIT 10.7 - Financial Counseling Assistance Plan for Officers. (File No. 1-1430, 1987 Form 10-K Report, EXHIBIT 10.11) * EXHIBIT 10.8 - Management Incentive Deferral Plan. (File No. 1-1430, 1987 Form 10-K Report, EXHIBIT 10.12) * EXHIBIT 10.9 - Deferred Compensation Plan for Outside Directors as Amended and Restated Effective December 1, 1993. (File No. 1-1430, 1993 Form 10-K Report, EXHIBIT 10.12) * EXHIBIT 10.10 - Retirement Plan for Outside Directors. (File No. 1-1430, 1986 Form 10-K Report, EXHIBIT 10.10) * EXHIBIT 10.11 - Death Benefit Plan for Outside Directors. (File No. 1-1430, 1986 Form 10-K Report, EXHIBIT 10.11) * EXHIBIT 10.12 - Form of Indemnification Agreement for Directors and Officers. (File No. 1-1430, Form 8-K Report dated April 29, 1987, EXHIBIT 28.3) * EXHIBIT 10.13 - Form of Executive Severance Agreement between Reynolds Metals Company and key executive personnel, including each of the individuals listed in Item 4A of the Reynolds Metals Company 1994 Form 10-K Report, Paul S. Hayden and John F. Rudin. (File No. 1-1430, 1987 Form 10-K Report, EXHIBIT 10.18) * EXHIBIT 10.14 - Amendment to Reynolds Metals Company 1987 Nonqualified Stock Option Plan effective May 20, 1988. (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1988, EXHIBIT 19(a)) * EXHIBIT 10.15 - Amendment to Reynolds Metals Company 1987 Nonqualified Stock Option Plan effective October 21, 1988. (File No. 1-1430, Form 10-Q Report for the Quarter Ended September 30, 1988, EXHIBIT 19(a)) * EXHIBIT 10.16 - Amendment to Reynolds Metals Company 1987 Nonqualified Stock Option Plan effective January 1, 1987. (File No. 1-1430, 1988 Form 10-K Report, EXHIBIT 10.22) * EXHIBIT 10.17 - Amendment to Reynolds Metals Company Performance Incentive Plan effective January 1, 1989. (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1989, EXHIBIT 19) * EXHIBIT 10.18 - Form of Stock Option and Stock Appreciation Right Agreement, as approved February 16, 1990 by the Compensation Committee of the Company's Board of Directors. (File No. 1-1430, 1989 Form 10-K Report, EXHIBIT 10.24) * EXHIBIT 10.19 - Amendment to Reynolds Metals Company 1982 Nonqualified Stock Option Plan effective January 18, 1991. (File No. 1-1430, 1990 Form 10-K Report, EXHIBIT 10.25) * EXHIBIT 10.20 - Amendment to Reynolds Metals Company 1987 Nonqualified Stock Option Plan effective January 18, 1991. (File No. 1-1430, 1990 Form 10-K Report, EXHIBIT 10.26) * EXHIBIT 10.21 - Letter Agreement dated January 18, 1991 between Reynolds Metals Company and William O. Bourke. (File No. 1-1430, 1990 Form 10-K Report, EXHIBIT 10.29) * EXHIBIT 10.22 - Form of Stock Option Agreement, as approved April 22, 1992 by the Compensation Committee of the Company's Board of Directors. (File No. 1-1430, Form 10-Q Report for the Quarter Ended March 31, 1992, EXHIBIT 28(a)) * EXHIBIT 10.23 - Consulting Agreement dated May 1, 1992 between Reynolds Metals Company and William O. Bourke. (File No. 1-1430, Form 10-Q Report for the Quarter Ended March 31, 1992, EXHIBIT 28(b)) * EXHIBIT 10.24 - Renewal dated February 18, 1994 of Consulting Agreement dated May 1, 1992 between Reynolds Metals Company and William O. Bourke. (File No. 1-1430, 1993 Form 10-K Report, EXHIBIT 10.28) * EXHIBIT 10.25 - Reynolds Metals Company Restricted Stock Plan for Outside Directors. (Registration Statement No. 33-53851 on Form S-8, dated May 27, 1994, EXHIBIT 4.6) * EXHIBIT 10.26 - Reynolds Metals Company New Management Incentive Deferral Plan. (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1994, EXHIBIT 10.30) * EXHIBIT 10.27 - Reynolds Metals Company Salary Deferral Plan for Executives. (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1994, EXHIBIT 10.31) * EXHIBIT 10.28 - Reynolds Metals Company Supplemental Long Term Disability Plan for Executives. (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1994, EXHIBIT 10.32) * EXHIBIT 10.29 - Amendment to Reynolds Metals Company 1982 Nonqualified Stock Option Plan effective August 19, 1994. (File No. 1-1430, Form 10-Q Report for the Quarter Ended September 30, 1994, EXHIBIT 10.33) * EXHIBIT 10.30 - Amendment to Reynolds Metals Company 1987 Nonqualified Stock Option Plan effective August 19, 1994. (File No. 1-1430, Form 10-Q Report for the Quarter Ended September 30, 1994, EXHIBIT 10.34) * EXHIBIT 10.31 - Amendment to Reynolds Metals Company 1992 Nonqualified Stock Option Plan effective August 19, 1994. (File No. 1-1430, Form 10-Q Report for the Quarter Ended September 30, 1994, EXHIBIT 10.35) * EXHIBIT 10.32 - Amendment to Reynolds Metals Company New Management Incentive Deferral Plan effective January 1, 1995. (File No. 1-1430, 1994 Form 10-K Report, EXHIBIT 10.36) * EXHIBIT 10.33 - Amendment to Reynolds Metals Company New Management Incentive Deferral Plan effective January 1, 1995 through December 31, 1996. (File No. 1-1430, 1994 Form 10-K Report, EXHIBIT 10.37) * EXHIBIT 10.34 - Amendment to Reynolds Metals Company Salary Deferral Plan for Executives effective January 1, 1995 through December 31, 1996. (File No. 1-1430, 1994 Form 10-K Report, EXHIBIT 10.38) EXHIBIT 11 - Computation of Earnings Per Share EXHIBIT 15 - None EXHIBIT 18 - None EXHIBIT 19 - None EXHIBIT 22 - None EXHIBIT 23 - None EXHIBIT 24 - None EXHIBIT 27 - Financial Data Schedule ____________________________ * Incorporated by reference. Pursuant to Item 601 of Regulation S-K, certain instruments with respect to long-term debt of Reynolds Metals Company (the "Registrant") and its consolidated subsidiaries are omitted because such debt does not exceed 10 percent of the total assets of the Registrant and its subsidiaries on a consolidated basis. The Registrant agrees to furnish a copy of any such instrument to the Commission upon request. EX-10 2 EXHIBIT 10.4 REYNOLDS METALS COMPANY Performance Incentive Plan As Amended and Restated Effective January 1, 1996 TABLE OF CONTENTS Page 1. PURPOSE 1 2. ADMINISTRATION 1 3. PARTICIPATION 2 4. TARGET AWARD LEVELS 2 5. PERFORMANCE GOALS 2 6. DETERMINATION OF AWARDS 3 7. COMMUNICATION 3 8. PAYMENT OF AWARDS 3 9. COMPANY STOCK 6 10. EFFECTIVE DATE OF PLAN 7 1. PURPOSE The purpose of the Performance Incentive Plan (the "Plan") is to promote the financial success of Reynolds Metals Company (the "Company") by: (a) providing compensation opportunities which are competitive with those of other major companies; (b) supporting the Company's goal-setting and strategic planning process; and (c) motivating key executives to achieve annual business goals by allowing them to share in the risks and rewards of the business. 2. ADMINISTRATION (a) The Plan shall be administered by the Compensation Committee (the "Committee") of the Board of Directors (the "Board"). No member of the Committee shall be eligible to participate in the Plan. (b) The Committee shall have the power and authority to adopt, amend and rescind any administrative guidelines, rules, regulations, and procedures deemed appropriate to the administration of the Plan, and to interpret and rule on any questions relating to any provision of the Plan. (c) The decisions of the Committee shall be final, conclusive and binding on all parties, including the Company and participating employees. (d) The Board may from time to time amend, suspend or terminate the Plan, in whole or in part. Notwithstanding the foregoing, the Board may, in any circumstance where it deems such approval necessary or desirable, and shall, to the extent necessary to maintain compliance with Rule 16b-3 under the Securities Exchange Act of 1934 as in effect from time to time, require stockholder approval as a condition to the effectiveness of any amendment or modification of the Plan. 3. PARTICIPATION Company officers and other key employees of the Company and its subsidiaries who are recommended by the Chief Executive Officer of the Company and who are approved by the Committee shall be eligible for participation in the Plan during a Plan year. 4. TARGET AWARD LEVELS After consultation with management, the Committee may designate target award levels to be earned by participants for a given Plan year. Such target awards may vary by management level. 5. PERFORMANCE GOALS To the fullest extent possible, management shall establish performance goals for participants to help it determine the awards it will recommend for the Plan year. Such goals may relate to corporate performance, divisional performance, and individual performance as appropriate to the purpose of the Plan and the positions and responsibilities of the participants. 6. DETERMINATION OF AWARDS As soon as practicable following the close of each Plan year, the Committee shall, after consultation with management, determine the award earned by each participant for the Plan year. In special cases of meritorious performance, after consultation with management, the Committee may make awards to individuals who were not previously designated as eligible for participation during the Plan year. If a participant has died during the Plan year, an award may be made to the participant's spouse or legal representative if the Committee so determines. 7. COMMUNICATION Participants shall be advised in writing of their participation in the Plan and of any performance goals applicable to their awards. 8. PAYMENT OF AWARDS Awards shall be payable in cash as soon after the close of the Plan year as feasible; provided, however, that payment of part or all of any award may be deferred in accordance with the terms of any incentive deferral plan maintained from time to time by the Company. (c) Any other provision of the Plan to the contrary notwithstanding, except as otherwise determined by the Committee in accordance with Paragraph 6(a) of the Company's Stock Ownership Guidelines for Officers (the "Guidelines"), the following provisions shall apply to the payment of an award to any participant who is subject to the Guidelines and who had not met the applicable minimum stock ownership level of the Guidelines as of the December 31 immediately preceding the date of payment of an award under the Plan. The award to any such participant shall be paid part in cash and part in the form of shares of Common Stock of the Company ("Shares"). The number of Shares issued under this provision shall be equal to the number of Shares that would have been necessary to bring the participant into compliance with the Guidelines as of the December 31 immediately preceding the date of payment of the award; provided, however, that in no event shall more than half of the value of a participant's award be paid in the form of Shares; and provided, further, that the part of the award for any participant that is payable in Shares shall not exceed the annual rate of base salary in effect for the participant at the time of the award. The remainder of the participant's award shall be paid in cash. Awards of Shares shall be made without payment of a purchase price. Any payment in accordance with this subsection (c) shall be subject to the following terms and conditions: (i) An award shall be converted into Shares by dividing (y) the cash value of the part of the award to be paid in Shares by (z) the arithmetic average of the high and low sales prices of the Shares as reported on New York Stock Exchange Composite Transactions on the date preceding the date on which the award is paid. Any fractional Share shall be paid in cash. (ii) The mandatory share award provisions of this subsection (c) shall not apply to the extent the participant has already elected under the Company's New Management Incentive Deferral Plan (y) to defer a portion of his or her award under the Plan and (z) to have such deferred award be credited with additional income based on shares of phantom stock of the Company. (iii) Except to the extent a participant has elected to have a deferred award be credited with additional income based on shares of phantom stock of the Company, any voluntary deferral of the payment of part or all of an award under the Plan shall apply only to the part of the award that is payable in cash after the application of this subsection (c); provided, however, that any such voluntary deferral shall be reduced as necessary to ensure the payment of all applicable payroll taxes. (iv) To the extent a participant is subject to a mandatory deferral of the payment of part or all of an award under the Plan, the mandatory deferral shall apply first to the part of the award that is payable in cash. To the extent the award that would be paid in Shares remains subject to the mandatory deferral, the payment that would otherwise be made in the form of Shares shall instead be deferred under the Company's New Management Incentive Deferral Plan to earn income based on shares of phantom stock of the Company. 9. COMPANY STOCK Shares reserved for issuance under the Plan may be authorized but unissued shares, shares reacquired by the Company, or a combination of both, as the Board may from time to time determine. If any stock dividend is declared upon the Shares, or if there is any stock split, stock distribution, or other recapitalization of the Company with respect to the Shares, resulting in a split-up or combination or exchange of shares, the Shares reserved for issuance under the Plan shall be proportionately and appropriately adjusted. 10. EFFECTIVE DATE OF PLAN The Plan as originally adopted was effective for the fiscal year commencing January 1, 1983 and continued in effect thereafter as amended from time to time. This amended and restated Plan shall be effective January 1, 1996, subject to stockholder approval at the 1995 Annual Meeting, and shall continue in effect, as amended from time to time, until it is terminated by the Board. Executed and adopted this 21st day of April, 1995, pursuant to action taken by the Board of Directors of Reynolds Metals Company at its meeting on November 18, 1994, and approved by the Stockholders of Reynolds Metals Company at the 1995 Annual Meeting. REYNOLDS METALS COMPANY By: Donald T. Cowles Executive Vice President, Human Resources and External Affairs EX-11 3 EXHIBIT 11 REYNOLDS METALS COMPANY AND CONSOLIDATED SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE (In millions, except share data) EARNINGS PER SHARE: In the first quarter of 1995, earnings per share equals net income divided by the weighted-average number of common shares and common share equivalents outstanding during the period. The number of common share equivalents outstanding was based on the assumed conversion of the Company's preferred stock ("PRIDES"). For the purpose of this computation, the conversion rate of .93 share of common stock for each share of PRIDES was based on the average market value of the Company's common stock during the period ($50.65 per share). In the first quarter of 1994, earnings per share equals net income, minus PRIDES dividends, divided by the weighted-average number of common shares outstanding during the period. Common share equivalents relating to the PRIDES were not included in the first quarter of 1994 since their effect would have been anti-dilutive. QUARTERS ENDED MARCH 31 _______________________________ 1995 1994 _______________________________ Weighted-average shares outstanding: Common shares 62,220,000 60,961,000 Common share equivalents 10,261,000 - _______________________________ Total 72,481,000 60,961,000 =============================== Net income (loss) $82 $(21) Less preferred stock dividends - 7 =============================== $82 $(28) =============================== Earnings per share $1.13 $(0.46) =============================== EARNINGS PER SHARE (FULLY DILUTED): Earnings per share (fully diluted) equals net income divided by the weighted-average number of common shares and common share equivalents outstanding during the period. The number of common share equivalents outstanding was based on the maximum potential issuance of common shares upon conversion of PRIDES, which is one share of common for each share of PRIDES. This computation was made for presentation purposes only since its effect was not material in 1995 and was anti-dilutive in 1994. The difference between the number of common share equivalents for the 1995 and 1994 periods is due to the PRIDES having been issued on January 25, 1994. QUARTERS ENDED MARCH 31 _______________________________ 1995 1994 _______________________________ Weighted-average shares outstanding: Common shares 62,220,000 60,961,000 Common share equivalents 11,000,000 8,067,000 _______________________________ Total 73,220,000 69,028,000 =============================== Net income (loss) $82 $(21) =============================== Earnings per share (fully diluted) $1.12 $(0.30) =============================== EX-27 4
5 This schedule contains summary financial information extracted from the Reynolds Metals Company Condensed Consolidated Balance Sheet (Unaudited) for March 31, 1995 and Consolidated Statement of Income (Unaudited) for the Quarter ended March 31, 1995 and is qualified in its entirety by reference to such financial statements. 1,000,000 3-MOS DEC-31-1995 MAR-31-1995 38 90 1096 20 1029 2295 6356 3244 7428 1343 1849 881 0 505 953 7428 1651 1661 1392 1392 107 0 43 119 37 82 0 0 0 82 1.13 0 This amount represents total receivables, since trade receivables are not broken out separately at interim dates, in accordance with S-X 10-01(2).
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