SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
Commission File Number 1-1430
REYNOLDS METALS COMPANY
A Delaware Corporation
(IRS Employer Identification No. 54-0355135)
6601 West Broad Street, P. O. Box 27003, Richmond, Virginia 23261-7003
Telephone: (804) 281-2000
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
Common Stock, no par value New York Stock Exchange
Chicago Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
Chicago Stock Exchange
SM
7% PRIDES , Convertible Preferred Stock New York Stock Exchange
Chicago Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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, and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ___
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [X]
As of February 22, 1994:
(a) the aggregate market value of the voting stock held by nonaffiliates
of the Registrant was approximately $2.18 billion*.
(b) the Registrant had 60,892,480 shares of Common Stock outstanding and
entitled to vote.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement for the Annual Meeting of Stockholders to
be held on April 20, 1994 - Part III
_____________________
* For this purpose, "nonaffiliates" are deemed to be persons other than
directors, officers and persons owning beneficially more than five percent
of the voting stock. The amount reported includes the market value of
11,000,000 shares of 7% PRIDES, Convertible Preferred Stock, each entitled
to 4/5 of a vote.
<PAGE>
NOTE
This copy includes only EXHIBIT 21 of those listed on pages 54 - 59.
In accordance with the Securities and Exchange Commission's requirements,
we will furnish copies of the remaining exhibits listed below upon payment
of a fee of 10 cents per page. Please remit the proper amount with your
request to:
Secretary
Reynolds Metals Company
P.O. Box 27003
Richmond, Virginia 23261-7003
Exhibits have the following number of pages:
EXHIBIT 3.1 73 EXHIBIT 10.5 3
EXHIBIT 3.2 19 EXHIBIT 10.6 3
EXHIBIT 4.1 73 EXHIBIT 10.7 3
EXHIBIT 4.2 19 EXHIBIT 10.8 2
EXHIBIT 4.3 165 EXHIBIT 10.9 7
EXHIBIT 4.4 6 EXHIBIT 10.10 6
EXHIBIT 4.5 138 EXHIBIT 10.11 10
EXHIBIT 4.6 18 EXHIBIT 10.12 14
EXHIBIT 4.7 32 EXHIBIT 10.13 7
EXHIBIT 4.8 24 EXHIBIT 10.14 7
EXHIBIT 4.9 5 EXHIBIT 10.15 12
EXHIBIT 4.10 74 EXHIBIT 10.16 13
EXHIBIT 4.11 2 EXHIBIT 10.17 1
EXHIBIT 4.12 2 EXHIBIT 10.18 2
EXHIBIT 4.13 2 EXHIBIT 10.19 1
EXHIBIT 4.14 2 EXHIBIT 10.20 1
EXHIBIT 4.15 10 EXHIBIT 10.21 1
EXHIBIT 4.16 14 EXHIBIT 10.22 4
EXHIBIT 4.17 9 EXHIBIT 10.23 3
EXHIBIT 4.18 33 EXHIBIT 10.24 3
EXHIBIT 4.19 23 EXHIBIT 10.25 3
EXHIBIT 4.20 89 EXHIBIT 10.26 3
EXHIBIT 4.21 12 EXHIBIT 10.27 2
EXHIBIT 10.1 21 EXHIBIT 10.28 1
EXHIBIT 10.2 16 EXHIBIT 23 1
EXHIBIT 10.3 19 EXHIBIT 24 28
EXHIBIT 10.4 6
<PAGE>
TABLE OF CONTENTS
PART I
ITEM PAGE
1. BUSINESS. . . . . . . . . . . . . . . . . . . . . . . . 1
GENERAL . . . . . . . . . . . . . . . . . . . . . . . 1
COMPETITION . . . . . . . . . . . . . . . . . . . . . 5
Principal Competitors. . . . . . . . . . . . . . . 5
Industry Conditions. . . . . . . . . . . . . . . . 5
RAW MATERIALS AND PRECIOUS METALS . . . . . . . . . . 5
Bauxite, Alumina and Related Materials . . . . . . 5
Australia . . . . . . . . . . . . . . . . . . . 6
Brazil. . . . . . . . . . . . . . . . . . . . . 6
Guinea. . . . . . . . . . . . . . . . . . . . . 6
Guyana. . . . . . . . . . . . . . . . . . . . . 7
Indonesia . . . . . . . . . . . . . . . . . . . 7
Jamaica . . . . . . . . . . . . . . . . . . . . 7
Precious Metals. . . . . . . . . . . . . . . . . . 7
ALUMINUM PRODUCTION . . . . . . . . . . . . . . . . . 8
FABRICATING OPERATIONS. . . . . . . . . . . . . . . . 8
ENERGY. . . . . . . . . . . . . . . . . . . . . . . . 9
ENVIRONMENTAL COMPLIANCE. . . . . . . . . . . . . . . 10
RESEARCH AND DEVELOPMENT. . . . . . . . . . . . . . . 11
EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . 11
2. PROPERTIES. . . . . . . . . . . . . . . . . . . . . . . 14
3. LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . 16
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS . . 17
4A. EXECUTIVE OFFICERS OF THE REGISTRANT. . . . . . . . . . 18
PART II
5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS . . . . . . . . . . . . . . . . . . 20
6. SELECTED FINANCIAL DATA . . . . . . . . . . . . . . . . 21
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS . . . . . . . . . . 22
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA . . . . . . 32
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE. . . . . . . . . 52
PART III
10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. . . 52
11. EXECUTIVE COMPENSATION. . . . . . . . . . . . . . . . . 52
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT. . . . . . . . . . . . . . . . . . . . . 52
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. . . . . 52
PART IV
14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K . . . . . . . . . . . . . . . . . . . . . . 53
<PAGE>
PART I
Item 1. BUSINESS
Reynolds Metals Company (the "Registrant") was incorporated in 1928 under
the laws of the State of Delaware. As used herein, "Reynolds" and
"Company" each means the Registrant and its consolidated subsidiaries
unless otherwise indicated.
GENERAL
Reynolds serves global markets as a supplier and recycler of aluminum and
other products, with its core business being as an integrated producer of a
wide variety of value-added aluminum products. Reynolds produces alumina,
carbon products and primary and reclaimed aluminum, principally to supply
the needs of its fabricating operations. These fabricating operations
produce aluminum foil, sheet, plate, cans and extruded products (including
heat exchanger tubing, driveshafts, bumpers and windows), flexible
packaging and wheels, among other items. Reynolds also produces a broad
range of plastic products, including film, bags, containers and lids, for
consumer products, foodservice and packaging uses. The Company markets an
extensive line of consumer products under the Reynolds brand name,
including the well-known Reynolds Wrap aluminum foil. Reynolds' largest
market for its products is the packaging and containers market, which
includes consumer products. Reynolds is also a gold producer through
operations in Western Australia.
To describe more fully the nature of its operations, Reynolds has separated
its vertically integrated operations into two areas -- (1) Finished
Products and Other Sales and (2) Production and Processing.
Finished Products and Other Sales includes the manufacture and distribution
of various finished aluminum products, such as cans, containers, flexible
packaging products, foodservice and household foils (including Reynolds
Wrap), laminated and printed foil and aluminum building products. Finished
Products and Other Sales also includes the sale of plastic bags and food
wraps (for example, Reynolds Plastic Wrap, Reynolds Crystal Color Plastic
Wrap, Reynolds Oven Bags and Presto disposer bags), plastic lidding and
container products, plastic film packaging, Reynolds Freezer Paper,
Reynolds Baker's Choice baking cups, Reynolds Cut-Rite wax paper and wax
paper sandwich bags, composite and nonaluminum building products, and
printing cylinders and machinery.
Production and Processing includes the refining of bauxite into alumina,
calcination of petroleum coke and production of prebaked carbon anodes, all
of which are vertically integrated with aluminum production and processing
plants. These plants produce and sell primary and reclaimed aluminum and a
wide range of semifinished aluminum mill products, including flat rolled
products, extruded and drawn products, cast products and other aluminum
products. Examples of flat rolled products include aluminum can stock and
machined plate. Examples of extruded and drawn products include heat
exchanger tubing, driveshafts and bumpers. Examples of cast products
include aluminum wheels. Production and Processing also includes the sale
of gold and other nonaluminum products, technology, and various licensing,
engineering and other services related to the production and processing of
aluminum.
In the second quarter of 1993, Reynolds completed the sale of its Benton
Harbor, Michigan aluminum reclamation plant to ALRECO Acquisition Corp., a
subsidiary of FFS Inc.
On November 1, 1993, Reynolds acquired the aluminum beverage can and end
manufacturing operations of Miller Brewing Company ("Miller"), increasing
Reynolds' U.S. aluminum can capacity by almost 50 percent to 16 billion
cans per year. Included in the purchase were five plants located in
Wisconsin, New York, Texas, North Carolina and Georgia, having a combined
annual capacity of 5 billion aluminum beverage cans and ends. Reynolds
also entered into a long-term supply agreement with Miller to supply
substantially all of Miller's aluminum beverage can requirements.
In the fourth quarter of 1993, Reynolds started production at a new
facility in Arkansas which converts spent potliner from Reynolds' and other
producers' North American aluminum smelting operations into an
environmentally safe material with potential for recycling. Reynolds has
entered into an agreement with a third party to market the treated residue
from the facility for such uses as refractories and road construction. The
facility, which is the only one of its kind, has the capacity to treat an
estimated 115,000 metric tons of spent potliner each year.
In late 1993, Reynolds decided to take actions to restructure certain of
its operations, principally in the fabricating area, to improve worldwide
performance at a time of extremely difficult market conditions in the
aluminum industry. The restructuring actions are in line with Reynolds'
strategy of redirecting resources to those areas that meet its goal of
profitable growth within its core businesses. The most significant
operations affected are portions of Reynolds' business conducted at its
McCook, Illinois sheet and plate plant, where a part of the plant's
aluminum sheet production will be discontinued by mid-1994. As a result of
its ongoing review of the economic viability of certain of its operations,
Reynolds also decided to discontinue production of extruded irrigation
tubing at its Torrance, California facility, idling the extrusion press at
that facility effective December 31, 1993, and to eliminate extruded shapes
operations at its Louisville, Kentucky extrusion plant, focusing instead on
production of heat exchanger tubing products. See the discussion under
"Costs and Expenses - Restructuring Charges" in Item 7, and under Note N to
the consolidated financial statements in Item 8, of this report regarding
the costs of these restructuring actions.
<PAGE>
Information on shipments and net sales by classes of similar products is
shown in Table 1.
<TABLE>
TABLE 1
<CAPTION>
Net Sales and Shipments
Net Sales Shipments
(in millions) (metric tons in thousands)
1993 1992 1991 1993 1992 1991
______________________________ ________________________
<S> <C> <C> <C> <C> <C> <C>
Finished products and other sales
Packaging and containers:
Aluminum $1,262.3 $1,357.2 $1,399.6 267.9 268.3 272.1
Nonaluminum 511.0 522.6 456.6
Other aluminum 359.2 339.9 311.9 123.6 111.1 96.2
Other nonaluminum 395.6 362.5 319.9
______________________________ ________________________
2,528.1 2,582.2 2,488.0 391.5 379.4 368.3
______________________________ ________________________
Production and processing
Primary aluminum 379.9 364.4 426.2 309.4 275.2 307.8
Flat rolled 1,075.8 1,187.4 1,225.2 455.9 455.6 430.7
Extruded and drawn 513.6 683.4 746.8 179.4 189.2 189.2
Other aluminum 352.1 398.4 409.1 157.7 174.7 173.3
Other nonaluminum 289.0 278.6 331.1
Gold 130.7 98.2 103.7
______________________________ ________________________
2,741.1 3,010.4 3,242.1 1,102.4 1,094.7 1,101.0
______________________________ ________________________
Net Sales $5,269.2 $5,592.6 $5,730.1 1,493.9 1,474.1 1,469.3
============================== ========================
Revenues per pound
Primary aluminum $0.56 $0.60 $0.63
Fabricated aluminum
products $1.45 $1.61 $1.72
</TABLE>
Financial information relating to Reynolds' operations and identifiable
assets by major operating and geographic areas is presented in Note J to
the consolidated financial statements in Item 8 of this report.
Reynolds' products are generally sold to producers and distributors of
industrial and consumer products in various markets. Information on sales
of products by principal geographic and business markets is shown in Tables
2 and 3.
TABLE 2
Principal Geographic Markets
Approximate
Percentage of Sales
_________________________
1993 1992 1991
____ ____ ____
United States 75% 75% 75%
Canada 6 5 5
Other (Principally Europe) 19 20 20
Total 100% 100% 100%
TABLE 3
Principal Business Markets
Approximate
Percentage of Sales
_________________________
1993 1992 1991
____ ____ ____
Packaging and Containers 45% 45% 44%
Distributors and Fabricators 13 15 15
Building and Construction 12 12 12
Automotive and Transportation 11 11 9
Electrical* 3 5 5
Other 16 12 15
Total 100% 100% 100%
_________________
*Reynolds sold its North American electrical cable operations in September,
1992.
COMPETITION
Principal Competitors
Reynolds' principal competitors in the sale in North America of products
derived from primary aluminum are ten other domestic companies, a Canadian
company and other foreign companies. Reynolds and many other companies
produce reclaimed aluminum.
In the sale of semifinished and finished products, Reynolds competes with
(i) other producers of primary and reclaimed aluminum, which are also
engaged in fabrication, (ii) other fabricators of aluminum and other
products and (iii) other producers of plastic products. Reynolds'
principal competitors in Europe are seven major multinational producers and
a number of smaller European producers of aluminum semifabricated products.
Aluminum and related products compete with various products, including
those made of iron, steel, copper, zinc, tin, titanium, lead, glass, wood,
plastic, magnesium and paper. Plastic products compete with products made
of glass, aluminum, steel, paper, wood and ceramics, among others.
Competition is based upon price, quality and service.
Reynolds' strategy is to continue improving its competitive position as an
integrated producer of value-added aluminum products, with emphasis on
growth opportunities in its core downstream fabricating operations, and to
expand its packaging and containers and engineered automotive components
businesses. Reynolds has undertaken continuing intensive cost reduction
and performance improvement programs to improve its competitiveness that
include work force reductions, permanent closures of higher cost
facilities, disposal of uneconomic and non-core assets, and operational and
organizational restructuring.
Industry Conditions
A worldwide oversupply of aluminum, caused by high exports from the
Commonwealth of Independent States ("CIS"), start-up of substantial new
capacity in the industry and economic weakness, has severely depressed the
price of aluminum on world commodity markets. This supply-demand
imbalance, with its resultant effect on prices, has dramatically affected
the aluminum industry and Reynolds. The timing and magnitude of any
improvements in these conditions cannot be predicted with certainty.
Multilateral government negotiations have been conducted to develop
strategies to integrate the CIS aluminum industries into the world market.
In late January, 1994, the governments of the six major aluminum-producing
countries announced acceptance of a Memorandum of Understanding (the "MOU")
addressing global supply-demand imbalance. The six governments finalized
the text of the MOU during the week of February 28 and agreed to meet again
on April 21, 1994 to review the global market situation. Among other
things, the MOU contemplates reductions in Russian primary aluminum
production of up to 500,000 metric tons per year for up to two years.
Whether the MOU or other multilateral negotiations will be successful, and
their ultimate effect on the supply-demand imbalance if successful, cannot
be predicted with certainty. If multilateral negotiations are
unsuccessful, unilateral trade sanctions (including, for example, import
quotas or anti-dumping actions) may be pursued by governments or private
parties. Such sanctions, if implemented, could result in improved prices
in certain countries or regions but could also negatively impact Reynolds'
globally integrated operations. The overall impact such sanctions might
have on Reynolds' results of operations or competitive position therefore
cannot be predicted with certainty.
RAW MATERIALS AND PRECIOUS METALS
Bauxite, Alumina and Related Materials
Bauxite, the principal raw material used in the production of aluminum, is
refined into alumina, which is then reduced by an electrolytic process into
primary aluminum.
Reynolds' bauxite requirements and a portion of its alumina requirements
are met from sources outside the United States.
Reynolds has long-term arrangements to obtain bauxite at negotiated prices
from sources in Australia, Brazil, Guinea and Jamaica. Reynolds also has a
long-term arrangement with the U.S. government under which Reynolds has
agreed to purchase at a negotiated price an aggregate of approximately
1,450,000 long dry tons of Jamaican bauxite stored next to Reynolds'
Sherwin alumina plant near Corpus Christi, Texas, for the period 1994
through 1998.
Reynolds refines bauxite into alumina at its Sherwin alumina plant.
Reynolds also acquires alumina from two joint ventures in which it has
interests, one located in Western Australia, known as the Worsley Joint
Venture ("Worsley"), and the other located in Stade, Germany, known as
Aluminium Oxid Stade ("Stade"). See Table 4 under this Item and the
discussion of Worsley under "Australia".
Production and purchases of bauxite and production of alumina are adjusted
from time to time in response to changes in demand for primary aluminum and
other factors. Reynolds has reduced production at its Sherwin plant in
connection with the curtailment of operations at its U.S. primary aluminum
production plants. See "Aluminum Production". At December 31, 1993, the
Sherwin plant was operating at 65% of capacity.
Australia
Reynolds has a 50% ownership interest in Worsley, which has a rated
capacity of 1,600,000 metric tons of alumina per year (expandable to
2,400,000 metric tons per year). Worsley has proven bauxite reserves
sufficient to operate the alumina plant at its rated capacity (taking
into account future expansions to increase rated capacity to up to
2,400,000 metric tons per year) for at least the next 50 years. The
joint venture has no specified termination date.
Reynolds has a long-term purchase arrangement under which it may
purchase from a third party an aggregate of approximately 18,000,000
dry metric tons of Australian bauxite for the period 1994 through
2021. Of this amount, Reynolds has agreed to purchase 1,000,000 dry
metric tons annually through 1996.
Reynolds has agreements under which it has agreed to purchase from two
other third parties 300,000 dry, and 65,000 wet, metric tons,
respectively, of Australian bauxite in 1994.
Brazil
Reynolds and various other companies are participants in the Trombetas
bauxite mining project in Brazil. Reynolds has a 5% equity interest
in the project and has agreed to purchase an aggregate of
approximately 2,400,000 dry metric tons of Brazilian bauxite from the
project for the period 1994 through 1999.
Reynolds is also maintaining an interest in other, undeveloped bauxite
deposits in Brazil.
Guinea
Reynolds owns a 6% interest in Halco (Mining), Inc. ("Halco"). Halco
owns 51% and the Guinean government owns 49% of Compagnie des Bauxites
de Guinee ("CBG"), which has the exclusive right through 2038 to
develop and mine bauxite in a 10,000 square-mile area in northwestern
Guinea. Reynolds has a bauxite purchase contract with CBG which will
provide Reynolds with an aggregate of approximately 1,200,000 dry
metric tons of Guinean bauxite for the period 1994 through 1995.
Guyana
Reynolds and the Guyanese government each own a 50% interest in a
bauxite mining project in the Berbice region of Guyana. Reynolds has
a bauxite purchase contract under which it has agreed to purchase
625,000 dry metric tons of Guyanese bauxite from the project in 1994.
Indonesia
Reynolds has a purchase arrangement under which it has agreed to
purchase from a third party 350,000 dry metric tons of Indonesian
bauxite in 1994.
Jamaica
Reynolds has a long-term purchase arrangement under which it has
agreed to purchase from a third party an aggregate of 3,000,000 dry
metric tons of Jamaican bauxite for the period 1994 through 1995.
Reynolds' present sources of bauxite and alumina are more than adequate to
meet the forecasted requirements of its primary aluminum production
operations for the foreseeable future. To utilize excess alumina capacity,
Reynolds enters into third-party sales arrangements. Reynolds also enters
into arrangements to sell bauxite in excess of its needs to third parties.
Other materials used in making aluminum are either purchased from others or
supplied from Reynolds' carbon products plants in Baton Rouge and Lake
Charles, Louisiana.
Precious Metals
Reynolds is currently a 40% participant in the Boddington gold project, and
the owner of the Mt. Gibson gold project and the Marvel Loch gold property,
all located in Western Australia. Mt. Gibson commenced production in late
1986; Boddington commenced production in mid-1987; and Reynolds acquired
Marvel Loch in 1991.
Reynolds announced on February 9, 1994 that it has reached an agreement to
sell Reynolds Australia Metals, Ltd., which holds its 40% interest in
Boddington, to Poseidon Gold, Limited. The transaction, which is subject
to certain conditions, was originally scheduled for completion in March,
1994. Another Boddington joint venturer has asserted that it has pre-
emptive rights with respect to the transaction. Legal proceedings have
been filed in the Supreme Court of Western Australia to resolve this issue.
These proceedings will likely delay completion of the transaction until the
second quarter of 1994 and, if adversely determined, could prevent
completion of the transaction.
In the second quarter of 1993, Reynolds acquired the remaining 50% interest
in the Mt. Gibson gold project that it did not previously own. In 1993,
Mt. Gibson produced for Reynolds' account 64,300 ounces of gold. Mt.
Gibson has a mining and processing capacity of up to 1.1 million metric
tons of ore annually using standard carbon-in-leach technology. In 1993,
Mt. Gibson commissioned a heap leach operation which has the capacity to
process an additional 2.0 million metric tons of ore annually.
In 1993, Boddington produced for Reynolds' account 149,700 ounces of gold.
Boddington has a mining and processing capacity of up to 7.2 million metric
tons of ore per year. In 1993, Boddington commissioned a new underground
mine which is supplying ore to its supergene/basement plant which has the
capacity to process up to 100,000 additional metric tons of ore annually.
The Marvel Loch gold property has a processing capacity of up to 1.0
million metric tons of ore annually. In 1993, Marvel Loch produced 145,200
ounces of gold.
Each of the Australian sites is being prospected for possible additional
reserves. Reynolds is also searching for gold at other sites in Australia
and in North America.
ALUMINUM PRODUCTION
Reynolds owns and operates three primary aluminum production plants in the
United States and one located at Baie Comeau, Quebec, Canada. Reynolds is
also entitled to a share of the primary aluminum produced at three joint
ventures in which it participates, one located in Quebec, Canada, known as
the Becancour joint venture ("Becancour"), one located in Hamburg, Germany,
known as Hamburger Aluminium-Werk GmbH ("Hamburg"), and the third in Ghana,
Africa, known as Volta Aluminium Company Limited ("Ghana"). See Table 5
under this Item and note (h) thereto for information on these primary
aluminum production plants. Reynolds also buys primary aluminum on the
open market.
Reynolds has a 25% equity interest in Becancour and is entitled to a
proportionate share of production. The plant currently consists of three
fully operational potlines, each with a capacity of 120,000 metric tons of
aluminum per year.
Production at the primary aluminum plants listed in Table 5 can vary due to
a number of factors, including changes in worldwide supply and demand. Due
to the continuing worldwide aluminum supply-demand imbalance, Reynolds has
temporarily shut down 88,000 metric tons of primary aluminum production
capacity at its Massena, New York (41,000 metric tons) and Longview,
Washington (47,000 metric tons) plants, effective in the fourth quarter of
1993. Taking into account these latest curtailments, Reynolds has idled a
total of 209,000 metric tons, or 21% of its 991,000 metric tons of primary
aluminum capacity. Reynolds' Troutdale, Oregon plant, with a capacity of
121,000 metric tons, has been idle since 1991. At December 31, 1993, the
U.S. plants listed in Table 5 were operating collectively at a rate of 53%
of capacity; all other plants listed in Table 5 were operating at full
capacity. See Table 6 under this Item. In order to balance its alumina
supply system, Reynolds temporarily reduced production by 20% at its
Sherwin alumina plant in Texas in connection with the latest curtailments.
Production at the Sherwin alumina plant was previously reduced in
connection with the Troutdale curtailment. See "Raw Materials and Precious
Metals - Bauxite, Alumina and Related Materials". (See the discussion of
threatened legal proceedings relating to the Massena, New York plant under
"Environmental Compliance" and in Item 3 of this report.)
Reynolds has an 8% equity interest in C.V.G. Aluminio del Caroni, S.A.,
which produces primary aluminum in Venezuela.
Reynolds has agreed to acquire a 10% equity interest in the Aluminum
Smelter Company of Nigeria (ALSCON), with the Nigerian government and
private interests holding the remaining equity. As part of the
arrangement, Reynolds will purchase at market-related prices 140,000 metric
tons of primary aluminum annually from a 180,000 metric ton smelter being
constructed by ALSCON in Nigeria.
Reynolds produces reclaimed aluminum from aluminum scrap at Bellwood,
Virginia and Sheffield, Alabama. See Table 6 under this Item. Scrap for
these facilities is obtained through Reynolds' nationwide recycling network
and other scrap purchases and from Reynolds' manufacturing operations. In
1993, Reynolds obtained approximately 299,000 metric tons of recycled
aluminum from its recycling network and other scrap purchases. Reynolds
sold its Benton Harbor, Michigan aluminum reclamation plant in the second
quarter of 1993. See "General".
FABRICATING OPERATIONS
Reynolds' semifinished and finished aluminum products and nonaluminum
products are produced at numerous domestic and foreign plants wholly or
partly owned by Reynolds. These plants are included in Table 7 under Item
2 of this report. The annual capacity of these plants depends upon the
variety and type of products manufactured.
In line with Reynolds' strategy to emphasize its downstream fabricating
operations, Reynolds has over the past three years (1) continued to upgrade
and modernize its extrusion, sheet, plate, foil, can, plastics and flexible
packaging manufacturing facilities, particularly facilities for production
of such value-added products as packaging, can stock and aerospace
components, (2) acquired in 1993 Miller Brewing Company's aluminum can and
end manufacturing operations, increasing its U.S. can-making capacity by
almost 50%, (3) completed an expansion in 1992 of a joint venture facility
to produce aluminum cans in Brazil and began a further expansion of the
facility in 1993, (4) announced in 1993 plans to further expand its can-
making capacity in South America by participating in the construction of
two can plants, one in Brazil and one in Chile, (5) initiated in 1993 a 50%
expansion of its Tampa can plant, (6) developed new types of, and
applications for, aluminum cans, (7) increased its investment in
manufacturing equipment and facilities for composite, vinyl and plastic
building products, (8) completed an expansion of a jointly-owned aluminum
wheel plant in Ontario, Canada in 1992, (9) completed in 1991 a new
aluminum casting facility at its Alloys Plant in Alabama, (10) completed in
1991 an expansion of its Bellwood extrusion plant in Virginia, (11)
completed in 1992 an expansion at its McCook plant in Illinois, increasing
machined aluminum plate capacity by 50% to serve the automotive, aircraft
and aerospace industries, (12) entered into an agreement with Mitsubishi
Materials Corporation, Mitsubishi Aluminum Co., Ltd. and Mitsubishi
Corporation, and an agreement with Sumitomo Light Metal Industries, Ltd.,
to pursue joint research and development work on new technologies and
processes in the production of aluminum extrusion and sheet applications,
respectively, for the worldwide automotive industry, both in 1992, (13)
constructed in Indiana a $26 million fabricating plant to produce aluminum
automotive extruded components, scheduled to reach full production in early
1994, and (14) commercialized in 1993 Spin Flow can necking technology
(perfected by Reynolds in conjunction with Ball Corporation) for forming
the neck of aluminum cans at high speeds.
In line with Reynolds' objective to expand its packaging and consumer
products business, Reynolds has over the past three years (1) substantially
increased marketing support behind its flagship Reynolds Wrap brand, (2)
increased PVC film capacity by 20% in 1992-1993 to serve the growing
Reynolon shrink film as well as consumer and foodservice film markets, (3)
introduced new products, including Regard stretch pallet overwrap film
(manufactured by Presto Products Company) and Reynolds Micro-Redi
microwavable containers, both in 1992, and, in 1993, a complete line of
Diamond plastic wraps and bags for selected international markets and (4)
reintroduced in 1991 Reynolds Cut-Rite wax paper sandwich bags.
ENERGY
Reynolds consumes substantial amounts of energy in refining bauxite into
alumina and in reducing alumina to aluminum.
Alumina is produced by a process requiring high temperatures at various
stages. These temperatures are achieved by burning natural gas or coal at
the alumina plants. Natural gas and coal are purchased under long- and
short-term contracts. See Table 4 under this Item.
Primary aluminum is produced from alumina by an electrolytic process
requiring large amounts of electric power. Electricity required for
Reynolds' primary aluminum production plants is purchased under long-term
contracts. See Table 5 under this Item.
Reynolds expects to meet its energy requirements for primary aluminum
production for the foreseeable future under long-term contracts. Under
these contracts, however, Reynolds may experience shortages of
interruptible power from time to time at its Washington, Oregon, New York
and Ghana reduction plants. Production at Ghana is dependent on
hydroelectric power and has from time to time been curtailed by drought.
ENVIRONMENTAL COMPLIANCE
Reynolds has spent and will spend substantial capital and operating amounts
relating to ongoing compliance with environmental laws. The area of
environmental management, including environmental controls, continues to be
in a state of scientific, technological and regulatory evolution.
Consequently, it is not possible for Reynolds to predict accurately the
total expenditures necessary to meet all future environmental requirements.
Reynolds expects, however, to add or modify environmental control
facilities at a number of its worldwide locations to meet existing and
certain anticipated regulatory requirements, including regulations to be
implemented under the Clean Air Act Amendments of 1990 (the "Clean Air
Act").
Based on information currently available, Reynolds estimates that
compliance with the Clean Air Act's hazardous air pollutant standards would
require in excess of $200 million of capital expenditures beginning in the
latter half of this decade at Reynolds' U.S. primary aluminum production
plants. The ultimate effect of the Clean Air Act on such plants and
Reynolds' other operations (and the actual amount of any such capital
expenditures) will depend on how the Clean Air Act is interpreted and
implemented pursuant to regulations that are currently being developed and
on such additional factors as the evolution of environmental control
technologies and the economic viability of such operations at the time. As
a result of threatened legal proceedings relating to Reynolds' Massena, New
York primary aluminum production plant, significant portions of these
capital expenditures might have to be accelerated. (See the discussion of
such threatened proceedings in Item 3 of this report.) If this occurs,
Reynolds would have to consider whether such expenditures would be prudent
under prevailing economic conditions and in light of the uncertainty as to
standards ultimately to be imposed by the Clean Air Act. If Reynolds
determined such expenditures were not prudent, its alternatives would
include curtailment of operations at the Massena plant. Any such
curtailment would not be expected to have a material adverse effect on
Reynolds' financial position or its ongoing results of operations.
Capital expenditures for equipment designed for environmental control
purposes were approximately $44 million in 1991, $63 million in 1992 and
$55 million in 1993. The portion of such amounts expended in the United
States was $28 million in 1991, $57 million in 1992 and $47 million in
1993. Expenditures in 1992 and 1993 included $32 million and $19 million,
respectively, for construction of a facility in Arkansas to convert spent
potliner from Reynolds' and other producers' aluminum smelting operations
into an environmentally safe material with potential for recycling. See
"General". Reynolds estimates that annual capital expenditures for
environmental control facilities will average approximately $35 million
through 1995. Future capital expenditures for environmental control
facilities cannot be predicted with accuracy for the reasons cited above;
however, it may be expected that environmental control standards will
become increasingly stringent and that the expenditures necessary to comply
with them could increase substantially.
Reynolds has been identified as a potentially responsible party ("PRP") and
is involved in remedial investigations and remedial actions under the
Comprehensive Environmental Response, Compensation and Liability Act
("Superfund") and similar state laws regarding the past disposal of wastes
at approximately 40 sites in the United States. Such statutes may impose
joint and several liability for the costs of such remedial investigations
and actions on the entities that arranged for disposal of the wastes, the
waste transporters that selected the disposal sites and the owners and
operators of such sites; responsible parties (or any one of them) may be
required to bear all of such costs regardless of fault, legality of the
original disposal or ownership of the disposal site. In addition, Reynolds
is investigating possible environmental contamination, which may also
require remedial action, at certain of its present and former United States
manufacturing facilities, including contamination by polychlorinated
biphenyls ("PCBs") at its Massena, New York primary aluminum production
plant which will require remediation. At most of the 40 sites referred to
above where Reynolds has been identified as a PRP, it is one of many PRPs,
and its share of the anticipated cleanup costs is expected to be small.
With respect to certain other sites (not included in the foregoing number)
where Reynolds has been identified as a PRP, Reynolds has either fully or
substantially settled or resolved actions related to such sites at minimal
cost or believes that it has no responsibility with regard to them.
Reynolds has been notified that it may be a PRP at certain additional
sites.
Reynolds' policy is to accrue remediation costs when it is probable that
remedial efforts will be required and the related costs can be reasonably
estimated. On a quarterly basis, Reynolds evaluates the status of all
sites, develops or revises estimates of costs to satisfy known remediation
requirements and adjusts its accruals accordingly. At December 31, 1993,
the accrual for known remediation requirements was $298 million. This
amount reflects management's best estimate of Reynolds' ultimate liability
for such costs. Potential insurance recoveries are not expected to be
material and therefore have not been considered. As a result of such
factors as the developing nature of administrative standards promulgated
under Superfund and other environmental laws; the unavailability of
information regarding the condition of potential sites; the lack of
standards and information for use in the apportionment of remedial
responsibilities; the numerous choices and costs associated with diverse
technologies that may be used in remedial actions at such sites; the
availability of insurance coverage; the ability to recover indemnification
or contribution from third parties; and the time periods over which
eventual remediation may occur, estimated costs for future environmental
compliance and remediation are necessarily imprecise and it is not possible
to predict the amount or timing of future costs of environmental
remediation which may subsequently be determined. Based on information
currently available, it is management's opinion that such future costs are
not likely to have a material adverse effect on Reynolds' competitive or
financial position or its ongoing results of operations. However, such
costs could be material to future quarterly or annual results of
operations.
See the discussion under "Costs and Expenses - Environmental Matters" in
Item 7, and under Note M to the consolidated financial statements in Item
8, of this report regarding the Company's anticipated costs of
environmental compliance.
RESEARCH AND DEVELOPMENT
Reynolds engages in a continuous program of basic and applied research and
development. This program deals with new and improved materials, products,
processes and related environmental compliance technologies. It includes
the development and expansion of products and markets which benefit from
aluminum's light weight, strength, resistance to corrosion, ease of
fabrication, high heat and electrical conductivity, recyclability and other
properties. Materials involving aluminum, plastics, ceramics and various
polymers and their processing are also included in the scope of Reynolds'
research and development activity. Expenditures for Reynolds-sponsored
research and development activities were approximately $37 million in 1991,
$38 million in 1992 and $36 million in 1993.
Reynolds owns certain patents relating to its products and processes based
predominantly upon its in-house research and development activities. The
patents owned by Reynolds, or under which it is licensed, generally concern
particular products or manufacturing techniques. Reynolds' business is
not, however, materially dependent on patents.
EMPLOYEES
At December 31, 1993, Reynolds had approximately 29,000 employees. In the
second quarter of 1993, Reynolds and the United Steelworkers of America and
the Aluminium, Brick and Glass Workers International Union agreed to new
labor contracts (involving approximately 7,000 employees) which will expire
in May, 1996. In 1993, approximately 600 salaried employees retired under
an early retirement window approved in 1992.
TABLE 4
Alumina Plants and Energy Supply
Rated
Capacity(a) at Principal
December 31, 1993 Energy Energy Contract
Plants Metric Tons Purchased(b) Expiration Date
______ _________________ ____________ _______________
Corpus Christi, Texas 1,700,000(c) Natural Gas 1994(d)
Worsley, Australia 800,000(e) Coal 2002
Stade, Germany 350,000(e) Natural Gas 1996
TABLE 5
Primary Aluminum Production Plants and Energy Supply
Rated
Capacity(a) at Principal
December 31, 1993 Energy Energy Contract
Plant Metric Tons Purchased(b) Expiration Date
_____ __________________ ____________ _______________
Baie Comeau, Canada 400,000 Electricity 2011 and 2014
Longview, Washington 204,000(f) Electricity 2001
Massena, New York 123,000(f) Electricity 2013(g)
Troutdale, Oregon 121,000(f) Electricity 2001
Becancour, Canada 90,000(h) Electricity 2014
Hamburg, Germany 33,000(h) Electricity 1995
Ghana, Africa 20,000(h) Electricity 1997(i)
TABLE 6
Aluminum Capacity and Production
(Metric Tons)
Primary Aluminum(j) Reclaimed Aluminum(k)
_____________________________ __________________________
Rated Rated
Year Capacity(a),(f) Production(f) Capacity(a) Production
____ _______________ _____________ ___________ __________
1991 991,000 948,000 510,000 414,000
1992 991,000 880,000 510,000 445,000
1993 991,000 869,000 462,000 386,000
NOTES TO TABLES 4, 5, and 6.
(a) Ratings are estimates at the end of the period based on designed
capacity and normal operating efficiencies and do not
necessarily represent maximum possible production.
(b) See "Energy".
(c) In order to balance its alumina supply system, Reynolds has
reduced production at its Sherwin alumina plant near Corpus
Christi, Texas in connection with the curtailment of operations
at its U.S. primary aluminum plants. See "Aluminum Production".
At December 31, 1993, the Sherwin plant was operating at 65% of
capacity.
(d) At current production levels, approximately 60% of the plant's
natural gas requirements is purchased under a one-year contract
and the remainder is purchased under short-term contracts. As
production increases, additional natural gas requirements will
be purchased under short-term contracts. The base term of the
one-year contract referred to above will conclude at the end of
1994, but the contract will extend from month to month unless
terminated by one of the parties.
(e) Reynolds is entitled to 50% of the production of Worsley and of
Stade. Capacity figures reflect Reynolds' share.
(f) Reynolds curtailed 70,500 metric tons of production at its
Troutdale primary aluminum plant in the third quarter of 1991
and the remainder of the plant's capacity in the fourth quarter
of 1991. The Troutdale plant remains idle. Reynolds curtailed
an aggregate of 88,000 metric tons of primary aluminum
production capacity at its Massena (41,000 metric tons) and
Longview (47,000 metric tons) plants effective in the fourth
quarter of 1993. See "Aluminum Production".
(g) The power contract terminates in 2013, subject to earlier
termination by the supplier in 2003 if its federal license for a
hydroelectric project is not renewed.
(h) Reynolds is entitled to 25% of the production of Becancour,
33-1/3% of the production of Hamburg, and 10% of the production
of Ghana. Capacity figures reflect Reynolds' share.
(i) The power contract provides for a 20-year extension at the
option of the smelter owners.
(j) Production is from Reynolds' primary aluminum production
operations listed in Table 5.
(k) Production through the second quarter of 1993 is from Reynolds'
Bellwood, Virginia; Sheffield, Alabama; and Benton Harbor,
Michigan reclamation facilities. Reynolds sold its Benton
Harbor, Michigan facility in the second quarter of 1993. See
"General".
Item 2. PROPERTIES
For information on the location and general nature of Reynolds' principal
domestic and foreign properties, see Item 1, BUSINESS. Table 7 lists as of
February 7, 1994 Reynolds' wholly-owned domestic and foreign operations and
shows the domestic and foreign locations of operations in which Reynolds
has interests. The properties listed are held in fee except as otherwise
indicated. Properties held other than in fee are not, individually or in
the aggregate, material to Reynolds' operations and the arrangements under
which such properties are held are not expected to limit their use.
Reynolds believes that its facilities are suitable and adequate for its
operations. With the exception of the Longview, Massena and Troutdale
primary aluminum production plants and the Sherwin alumina plant, as
explained above, there is no significant surplus or idle capacity at any of
Reynolds' major manufacturing facilities. The restructured operations at
Reynolds' McCook sheet and plate plant and Torrance and Louisville
extrusion facilities are not considered as surplus or idle capacity. See
Item 1 under the caption "General".
TABLE 7
Wholly-Owned Domestic and Foreign Operations
Manufacturing, Mining and Distribution
Alumina: Recycling:
Corpus Christi, Texas Recycling Plants and
Malakoff, Texas Centers (U.S.)(638)**
Calcined Coke: Reclamation:
Baton Rouge, Louisiana Sheffield, Alabama (2)
Lake Charles, Louisiana Bellwood, Virginia
Carbon Anodes: Mill Products:
Lake Charles, Louisiana Sheffield, Alabama
McCook, Illinois
Primary Aluminum: Bellwood, Virginia
Massena, New York Cap-de-la-Madeleine,
Troutdale, Oregon Quebec, Canada
Longview, Washington Hamburg, Germany***
Baie Comeau, Quebec, Canada Latina, Italy
Aluminum Cans:
Spent Potliner Treatment: San Francisco, California
Gum Springs, Arkansas Torrance, California
Tampa, Florida
Extruded Products: Moultrie, Georgia
Auburn, Indiana Honolulu, Hawaii
Louisville, Kentucky Kansas City, Missouri
El Campo, Texas Fulton, New York
Ashland, Virginia* Middletown, New York
Bellwood, Virginia Reidsville, North Carolina (cans and
Richmond Hill, Ontario, Canada ends)
Ste. Therese, Quebec, Canada Salisbury, North Carolina
Nachrodt, Germany* Fort Worth, Texas
Harderwijk, Netherlands Houston, Texas
Lelystad, Netherlands Seattle, Washington
Maracay, Venezuela Milwaukee, Wisconsin
Rocklin, California (ends)
Bristol, Virginia (ends)
Enzesfeld, Austria#
Guayama, Puerto Rico
Powder and Paste: Building and Construction
Louisville, Kentucky Products:
Eastman, Georgia*
Electrical Rod: Bourbon, Indiana
Becancour, Quebec, Canada Ashville, Ohio
Lynchburg, Virginia
Foil Feed Stock: Weston, Ontario, Canada
Hot Springs, Arkansas Merxheim, France*
Nachrodt, Germany
Packaging and Consumer Dublin, Ireland*
Products: Harderwijk, Netherlands
Beacon Falls, Connecticut Lisburn, Northern Ireland*
Louisville, Kentucky Service Centers (U.S.)(46)**
Mt. Vernon, Kentucky
Sparks, Nevada*
Downingtown, Pennsylvania
Lewiston, Utah
Bellwood, Virginia Printing Cylinders:
Grottoes, Virginia Longmont, Colorado*
Richmond, Virginia Atlanta, Georgia*
South Boston, Virginia Clarksville, Indiana*
Appleton, Wisconsin (2) Louisville, Kentucky
Little Chute, Wisconsin Newport, Kentucky*
Weyauwega, Wisconsin Battle Creek, Michigan*
Rexdale, Ontario, Canada St. Louis, Missouri
Cap-de-la-Madeleine, Phoenix, New York*
Quebec, Canada Wilmington, North Carolina*
Latina, Italy Exton, Pennsylvania*
Franklin, Tennessee*
Richmond, Virginia
Wheels: Can Machinery and Systems:
Ferrara, Italy Richmond, Virginia
Gold: Reynolds Aluminum Supply
Marvel Loch and Mt. Gibson, Company:
Western Australia, Australia Service Centers (U.S.)(22)**
Processing Centers (U.S.)(2)
Research and Development
Richmond, Virginia: Corpus Christi, Texas:
Can Development Center Alumina Technology
Corporate Research
and Development Sheffield, Alabama:
Central Laboratories Manufacturing Technology
Packaging Technology Laboratory
Other Operations
In Which Reynolds Has Interests
Australia: Guinea:
Bauxite and alumina, gold## Bauxite
Belgium: Guyana:
Building products and extrusions Bauxite*
Italy:
Brazil: Reclamation
Bauxite, aluminum cans
and ends, recycling Philippines:
Mill products, extrusions, foil
Canada:
Primary aluminum, electric Russia:
power generation, aluminum Foil feed stock
wheels
Colombia: Spain:
Mill products, extrusions, Mill products, extrusions, foil,
foil wire and cable, packaging
and consumer products, printing
Egypt: cylinders
Extrusions
Venezuela:
Germany: Primary aluminum, mill products,
Alumina, primary aluminum* foil, aluminum cans and ends,
recycling, aluminum wheels
Ghana:
Primary aluminum*
____________________________
* Leased.
** Recycling Plants and Centers - 629 leased.
Building and Construction Products Service Centers - 44 leased.
Reynolds Aluminum Supply Company Service Centers - 14 leased.
*** Held under an installment purchase arrangement.
# Reynolds announced on February 15, 1994 an agreement to sell its
Austria Dosen aluminum beverage can plant to PLM AB. The
transaction, which is subject to certain conditions, is expected
to be completed by the end of March, 1994.
## Reynolds has reached an agreement to sell Reynolds Australia
Metals, Ltd., which holds its 40% interest in the Boddington gold
project. See the discussion under Item 1 of this report under the
caption "Raw Materials and Precious Metals - Precious Metals".
The titles to Reynolds' various properties were not examined specifically
for this report.
Item 3. LEGAL PROCEEDINGS
On January 11, 1993, the Registrant received from the California Earth
Corps ("CEC") a 60-day notice of intent to sue under the "Proposition 65"
provision of the California Health and Safety Code. The notice alleges
that the Registrant's Torrance Can Plant failed to provide a required
warning of the public's exposure to certain chemicals listed pursuant to
California law. Under California law, CEC may take action against the
Registrant and receive a bounty if the action is successful. Penalties of
up to $2,500 per day of violation could be sought in the potential action.
The Registrant has responded to the notice, denying the alleged violations.
CEC has taken no action to date.
On July 29, 1992, the U.S. Environmental Protection Agency (the "EPA")
filed an administrative complaint against the Registrant alleging paperwork
violations and failure to determine whether certain materials in storage
constituted hazardous wastes under the federal Resource Conservation and
Recovery Act and state hazardous waste regulations at the Registrant's
Longview, Washington primary aluminum production plant. The EPA sought
$296,000 in civil penalties. Based on the Registrant's response to the
complaint, the EPA dropped certain claims and amended others. The parties
have tentatively agreed to a settlement of the matter under which the
Registrant would pay a penalty of $11,250 and agree to install certain
parts washing stations that would result in a reduction in the generation
of solvent wastes at the Longview plant. The parties are preparing
documents to finalize the settlement.
As previously reported in the Registrant's Report on Form 10-Q for the
Quarter ended March 31, 1993, on June 10, 1988, the Atlantic States Legal
Foundation ("Atlantic States") filed suit against the Registrant in the
U.S. District Court for the Western District of New York (the "Court")
under the "citizen suit" provision of the federal Clean Water Act. The
State of New York intervened in the case on December 1, 1989. The suit
involved the discharge of substances from the Registrant's Massena, New
York primary aluminum production plant. An agreement of the parties to
settle the suit for payments by the Registrant aggregating $515,000,
resolving claims for penalties and other costs, was approved by the Court
on May 12, 1992; however, the Court retained jurisdiction of the matter.
In a letter dated April 12, 1993, Atlantic States informed the Registrant
that it has withdrawn its waiver of enforcement, citing violations at the
Massena plant of interim effluent limits contained in the settlement
agreement and other effluent limit violations. Atlantic States has stated
that it would be providing the Registrant a settlement offer concerning
such violations, which the Registrant to date has not received.
On November 9, 1993, counsel for the St. Regis Mohawk Tribe served the
Registrant with a notice of intent to file a citizen suit for alleged
violations of the federal Clean Air Act and certain New York state air
emission standards at the Registrant's Massena, New York primary aluminum
production plant. At a meeting with tribal and state representatives in
December, 1993, the State of New York alleged that the Registrant's
emissions were causing a violation of ambient air standards for benzo-a-
pyrene. The state and Mohawk Tribe asked, among other things, that the
Registrant agree to accelerate capital investments to achieve compliance
with the Clean Air Act's Maximum Achievable Control Technology ("MACT")
standards (although the EPA is not expected to establish such standards
until 1996 or 1997). Discussions to resolve the matter are ongoing among
the parties. Capital expenditures to achieve MACT standards at the Massena
plant, together with related capital expenditures, could exceed $150
million. See the discussion of Clean Air Act compliance costs in Item 1
under the caption "Environmental Compliance".
See the discussion of legal proceedings related to the proposed sale of
Reynolds Australia Metals, Ltd. under the caption "Raw Materials and
Precious Metals - Precious Metals" in Item 1 of this report.
Various other suits and claims are pending against Reynolds. In the
opinion of Reynolds' management, after consultation with counsel,
disposition of these suits and claims and the actions referred to in the
preceding paragraphs, either individually or in the aggregate, will not
have a material adverse effect on Reynolds' 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, claims or
actions in a particular reporting period will not be material in relation
to the reported results for such period.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the Registrant's security holders
during the fourth quarter of 1993.
Item 4A. EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of the Registrant are as follows:
Name Age Positions Held During Past Five Years
Richard G. Holder 62 Chairman of the Board and Chief Executive
Officer since May 1992. President and Chief
Operating Officer 1988-1992. Director since
1984.
Yale M. Brandt 63 Vice Chairman since May 1992. Executive
Vice President, Fabricated Industrial
Products 1990-1992. Executive Vice
President, Fabricating Operations 1988-1990.
Director since 1988.
Randolph N. Reynolds 52 Vice Chairman since January 1994. Executive
Vice President, International 1990-1994.
Vice President 1985-1990. President,
Reynolds International, Inc., a subsidiary
of the Company, since November 1980, and
Chief Executive Officer of that subsidiary
since November 1981. Director since 1984.
Jeremiah J. Sheehan 55 President and Chief Operating Officer since
January 1994. Executive Vice President,
Fabricated Products 1993-1994. Executive
Vice President, Consumer and Packaging
Products 1990-1993. Vice President, Can
Division 1988-1990. Director since January
1994.
Henry S. Savedge, Jr. 60 Executive Vice President and Chief Financial
Officer since May 1992. Vice President,
Finance 1990-1992. Vice President, Planning
and Analysis 1987-1990. Director since
September 1992.
Donald T. Cowles 46 Executive Vice President, Human Resources
and External Affairs since February 1993.
Vice President, General Counsel and
Secretary 1989-1993. Secretary and
Assistant General Counsel 1985-1989.
J. Wilt Wagner 52 Executive Vice President, Raw Materials,
Metals and Industrial Products since March
1993. Executive Vice President, Fabricated
Industrial Products 1992-1993. Vice
President, Mill Products Division 1990-1992.
Mill Products Division General Manager
1989-1990. Mill Products Division
Operations Manager 1988-1989.
Thomas P. Christino 54 Vice President, Flexible Packaging Division
since November 1993. Flexible Packaging
Division General Manager 1992-1993.
Flexible Packaging Products National Sales
and Marketing Manager 1987-1992.
E. Jack Gates 52 Vice President, Raw Materials and Precious
Metals Division since April 1993. Raw
Materials and Precious Metals Division
General Manager 1993. Reduction Division
General Manager 1990-1993. Reduction
Division Operations Manager 1983-1990.
Rodney E. Hanneman 57 Vice President, Quality Assurance and
Technology Operations since March 1985.
Douglas M. Jerrold 43 Vice President, Tax Affairs since April
1990. Corporate Director of Tax Affairs
1987-1990.
D. Michael Jones 40 Vice President, General Counsel and
Secretary since February 1993. Associate
General Counsel and Assistant Secretary
1990-1993. Senior Attorney and Assistant
Secretary 1987-1990.
John B. Kelzer 57 Vice President, Extrusion Division since
April 1993. Extrusion Division General
Manager 1990-1993. Manager of the Company's
McCook, Illinois Sheet and Plate Plant 1985-
1990.
William E. Leahey, Jr. 44 Vice President, Can Division since April
1993. Can Division General Manager 1992-
1993. Can Division Sales and Marketing
Director 1990-1992. Vice President, Asia
Pacific Division, Continental Can
International 1986-1990.
John M. Lowrie 53 Vice President, Consumer Products Division
since October 1988.
John M. Noonan 60 Vice President, Construction Products and
Properties Divisions since January 1984.
William G. Reynolds, Jr. 54 Vice President, Government Relations and
Public Affairs since 1980.
Julian H. Taylor 50 Vice President, Treasurer since April 1988.
C. Stephen Thomas 54 Vice President, Mill Products Division since
May 1992. Vice President, Can Division
1990-1992. Vice President, Operations, Can
Division July-December 1990. Vice
President, Extrusion Division 1987-1990.
Nicholas D. Triano 62 Vice President, Materials Management since
April 1989. Corporate Director, Materials
Management 1987-1989.
Allen M. Earehart 51 Controller since March 1993. Director,
Corporate Accounting 1982-1993.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The Registrant's Common Stock is listed on the New York Stock Exchange and
the Chicago Stock Exchange. At February 22, 1994, there were 10,876
holders of record of the Registrant's Common Stock.
The high and low sales prices for shares of the Registrant's Common Stock
as reported on the New York Stock Exchange Composite Transactions Tape and
the dividends declared per share during the periods indicated are set forth
below:
High Low Dividends
1993
First Quarter $58-7/8 $48-5/8 $.45
Second Quarter 49 42 .25
Third Quarter 52-3/4 41-5/8 .25
Fourth Quarter 48-7/8 41-1/8 .25
1992
First Quarter $59-3/8 $48-7/8 $.45
Second Quarter 64-3/8 54 .45
Third Quarter 60-1/2 48-5/8 .45
Fourth Quarter 56-5/8 47 .45
On February 18, 1994, the Board of Directors declared a dividend of $0.25
per share of Common Stock, payable April 1, 1994 to stockholders of record
on March 4, 1994.
<PAGE>
<TABLE>
Item 6. SELECTED FINANCIAL DATA
Consolidated Income Statements (In millions, except per share amounts)
<CAPTION>
1993 1992 1991 1990 1989
_______________________________________________________
<S> <C> <C> <C> <C> <C>
Net sales $5,269.2 $5,592.6 $5,730.1 $6,022.4 $6,143.1
Equity, interest and other income 25.0 27.7 54.4 53.3 68.0
Gain on sale of investment - 36.1 - - -
_______________________________________________________
5,294.2 5,656.4 5,784.5 6,075.7 6,211.1
Cost of products sold 4,930.3 5,031.8 5,010.3 5,023.6 4,962.7
Operational restructuring and asset
revaluation costs 348.2 106.4 - - -
Selling, administrative and general
expenses 371.6 382.8 393.0 384.1 377.1
Interest expense 159.2 166.8 160.9 96.1 113.0
Provision for estimated
environmental costs - 164.0 - 150.0 -
_______________________________________________________
5,809.3 5,851.8 5,564.2 5,653.8 5,452.8
Income (loss) before income taxes
and cumulative effects of
accounting changes (515.1) (195.4) 220.3 421.9 758.3
Taxes on income (credit) (193.0) (86.2) 66.2 125.3 225.6
_______________________________________________________
Income (loss) before cumulative
effects of accounting changes (322.1) (109.2) 154.1 296.6 532.7
Cumulative effects of accounting
changes (1) - (639.6) - - -
_______________________________________________________
Net income (loss) $(322.1) $(748.8) $154.1 $296.6 $532.7
=======================================================
Amounts per common share
Primary earnings (losses) $(5.38) $(12.56) $2.60 $5.01 $9.20
=======================================================
Cash dividends declared $1.20 $1.80 $1.80 $1.80 $1.70
=======================================================
Other items:
Total assets $6,708.6 $6,897.0 $6,685.3 $6,527.1 $5,555.6
=======================================================
Long-term debt $1,989.6 $1,797.7 $1,854.3 $1,741.5 $1,115.2
=======================================================
<FN>
(1) See Item 8. Financial Statements and Supplementary Data - Notes H and I.
</TABLE>
<PAGE>
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Item 7 should be read in conjunction with the consolidated financial
statements and notes thereto, and with the other sections of this report.
All tonnage figures in Item 7 are expressed in metric tons.
STATE OF THE INDUSTRY
The past year marked a continuation of one of the most difficult periods in
the history of the aluminum industry. One could best characterize our
business climate as structurally changed and extremely competitive.
On the positive side, Western world demand for aluminum continues to grow,
despite weakness in several major global economies, especially Europe and
Japan. Global consumption of aluminum has set records every year since
1983, and 1994 is forecast to be yet another record year. While the rate
of growth has slowed to an average of 1.5% over the last three years,
compared to an average of 3% over the last seven years, we believe
continued growth during this latest recession is an indicator of underlying
long-term demand strength.
The industry's problem is on the supply side. Aluminum's previous down
cycles were due primarily to excess capacity from overexpansion, a decline
in demand, or some combination of the two. Today's supply problems are
primarily the result of an extraordinary, unprecedented phenomenon in the
industry-exports from the Commonwealth of Independent States (CIS), mostly
from Russia.
CIS exports have increased from 250,000 tons annually in 1989 to 1.7
million tons in 1993. Even in the best of times, with strong demand
growth, there would be no way for the market to absorb this surge of
aluminum, which approaches 10% of total world capacity. As a result,
inventories on the London Metal Exchange ballooned during the same period
from 100,000 tons to over 2.5 million tons, and primary aluminum ingot
prices plummeted to an all-time low, on an inflation-adjusted basis. Low
ingot prices in turn have had a negative impact on most fabricated aluminum
prices.
While the industry's boom years during the mid-to-late 1980s led many
producers to increase primary aluminum capacity, this was largely offset by
closing uneconomic capacity. Except for Russia's unexpected increased
participation in the market, supply and demand essentially would be in
balance today, even with the capacity increases.
The state of the industry is painfully evident in our results, which have
deteriorated substantially since our third consecutive year of record
earnings in 1989 - the last year before the flood of aluminum from Russia
began.
OUR BUSINESS
Reynolds is a vertically integrated producer of aluminum products. We also
manufacture and sell a number of non-aluminum products which complement our
aluminum business. In addition to reporting results for the Company as a
whole, we provide a breakdown into two groups in order to more fully
describe our operations: "Finished Products and Other Sales" and
"Production and Processing".
<PAGE>
<TABLE>
OUR BOTTOM LINE RESULTS
<CAPTION>
(In millions, except per share amounts) 1993 1992 1991
____ ____ ____
<S> <C> <C> <C>
Net income (loss) before special items $ (94.6) $ 44.6 $ 154.1
Special items (227.5) (793.4) -
Net income (loss) (322.1) (748.8) 154.1
Earnings (loss) per share-before special items $(1.58) $ 0.75 $2.60
Earnings (loss) per share-net (5.38) (12.56) 2.60
</TABLE>
For additional information on results and special items, see Notes H, I, M,
N and the quarterly results of operations in Item 8 of this report.
Earnings (loss) - For 1993, we reported a loss before special items of $95
million, or $1.58 per share. We incurred after-tax charges of $228
million, or $3.80 per share, principally to cover the costs of a temporary
curtailment of primary aluminum capacity and restructuring our sheet, plate
and extrusion operations. Including these charges, the net loss for the
year was $322 million, or $5.38 per share.
This compares with net income before special items in 1992 of $45 million,
or 75 cents per share. After special items of $793 million, or $13.31 per
share, principally for the effects of adopting new accounting standards,
the net loss for 1992 was $749 million, or $12.56 per share.
Net Sales - The impact of low aluminum prices on our results cannot be
emphasized enough. Our loss from operations and decline in net sales are
attributable almost entirely to severely depressed prices for aluminum
products. Our revenues have fallen 15%, or close to $1 billion, since
1989.
Shipments - The adverse effect of low prices is underscored by the fact
that, despite extremely difficult business conditions, our shipments
increased in 1993 to 1.494 million tons, up from 1.474 million tons in 1992
and 1.469 million tons in 1991. In fact, 1993 marked our eighth
consecutive year of increased shipments.
Average Realized Prices - Even though shipments increased, it was
impossible to escape the effects of pricing on our bottom line. Our price
per pound for primary aluminum was 56 cents in 1993, down from 60 cents in
1992 and 63 cents in 1991. Lower ingot prices rippled through a broad
range of fabricated aluminum product prices, as evidenced by our price of
$1.45 per pound in 1993, down from $1.61 in 1992 and $1.72 in 1991.
Aluminum Products - Shipments of value-added aluminum fabricated products
accounted for approximately 70% of Reynolds total revenues over the last
three years. Shipments were up in both 1993 and 1992 for consumer
products, automotive materials and components, building and construction
products, and sheet and extrusions sold through distributors. Higher
shipping levels for these products were somewhat offset by a decline in can
and can stock shipments on a tonnage basis. This decline was due in part
to weather-related factors, which lessened demand for beer and soft drinks,
and to thinner gauges of can body and end stock made possible by continuing
advancements in our can production technology. Although downgauging
reduces the tonnage volume of shipments, actual beverage can unit shipments
were up in the last two years. Our foreign fabricating operations achieved
higher shipments in 1993 and 1992, despite weak foreign economies.
Non-aluminum Products - Sales of non-aluminum products continue strong.
These products accounted for approximately 23% of total revenues over the
last three years. They consist of plastics for the consumer, packaging and
construction markets; other metals like stainless steel and nickel sold
through our distributor business; raw materials such as carbon products
used in the production of primary aluminum; and gold.
OPERATING AREA ANALYSIS
Finished Products and Other Sales - Shipments increased approximately 3%
each year from 1991 to 1993, as higher shipments were realized for consumer
products, building and construction products, and distributor sheet and
extrusions. The decline in net sales in 1993 was due to lower aluminum
prices. In 1992, net sales increased due primarily to higher sales of non-
aluminum products, slightly offset by lower prices for aluminum products.
Operating profit declined in 1993 primarily because of lower aluminum
prices, which were partially offset by lower aluminum raw material costs.
Operating profit in 1992 was essentially flat compared to 1991, as
declining aluminum prices were generally offset by a reduction in the cost
of aluminum raw materials.
Production and Processing - Aluminum shipments have remained relatively
stable over the past three years. Declines in shipments of can stock in
both 1993 and 1992 were offset by increases in shipments of other sheet
products. Net sales and operating profits declined primarily due to lower
aluminum prices in 1993 and 1992 partially offset by lower raw material
costs. Gold production was approximately 360,000 ounces in 1993, 271,000
ounces in 1992 and 263,000 ounces in 1991.
Geographic - Declines in revenues and operating profits in the domestic and
European operating areas in 1993 and 1992 were due primarily to lower
aluminum prices. Operating profit in Canada decreased in 1993 due to lower
aluminum prices. Unfavorable price effects in Canada were offset in 1992
by higher shipments and lower raw material and other costs.
Financial information relative to Reynolds operations and identifiable
assets by geographic and operating areas is presented in Note J to the
consolidated financial statements. Please refer also to Table 1 in Item 1
of this report.
COSTS AND EXPENSES
Performance Improvement - We are managing our way through these difficult
times by focusing on things we can control. Among these is our continuing
effort to achieve performance improvements of all types. These go well
beyond just reducing costs and include streamlining operations, improving
customer service and product quality, exiting uneconomic businesses, and
selling non-core assets. We achieved performance improvements in 1993 at an
annual rate of approximately $260 million, pretax. We focused our efforts
on cost reduction and process improvement programs across our operations.
In addition, we lowered employment costs through an early retirement
program, which reduced our salaried work force. We changed our health care
plans by incorporating a managed care approach and we capped our liability
for retiree health care benefits. Additional benefits were realized through
restructuring efforts and other projects designed to strengthen our
operations. We expect to realize the full effect of these accomplishments
in 1994 and beyond, and remain committed to achieving long-term
competitiveness to provide a sound return on stockholders' investment.
Costs of Products Sold - In response to the oversupply of aluminum on world
markets, we temporarily curtailed 88,000 tons of our U.S. primary aluminum
production in 1993. This is in addition to 121,000 tons of U.S. capacity
that we idled in 1991. In total, we have idled 209,000 tons, or 21% of our
991,000-ton capacity. To balance our alumina supply system, we reduced
production at our Texas alumina refinery by 35%, including 15% in 1991 and
20% in 1993. All of this resulted in the layoff of 1,000 employees.
Ongoing fixed costs related to the temporary curtailments at these
facilities and underutilized capacity in our sheet and plate facilities had
a negative impact on costs in both 1993 and 1992. Costs in both years also
were affected adversely by the inflationary effects of health care costs
and the adoption of FAS 106 in 1992 relating to retiree health care
benefits. (See Note H to the consolidated financial statements.)
On the other hand, we benefitted from lower costs for energy and outside
purchases of aluminum scrap and other aluminum products that are related to
the price of primary aluminum, which declined in 1993 and 1992.
Additionally, we experienced lower costs in both years for some raw
materials used to produce primary aluminum.
Restructuring Charges - In 1993, we restructured operations that did not
support our long-term objective of growing our core businesses in key
markets. This action will affect an additional 1,000 employees.
The most significant operation involved is our Illinois sheet and plate
facility, where we will discontinue manufacturing various sheet products,
principally common alloy, by mid-1994. We will continue to produce aluminum
sheet and plate products there for the automotive, aircraft and aerospace
markets.
We also restructured our extrusion operations to increase competitiveness
and focus on those markets that offer the greatest potential for future
growth. As a result, we eliminated the extruded shapes operations at our
Kentucky plant to focus on the manufacture of products for the automotive
industry. In addition, we discontinued production of extruded irrigation
tubing at our California plant, but will continue to supply our distributor
customers through our existing depot operations there.
We took a charge of $348 million to reflect the estimated costs associated
with these decisions. The charge consists of asset revaluation of $189
million; employee termination costs of $116 million, including pension and
medical expenses; and other costs of $43 million. Estimated cash
requirements, including $72 million in 1994, are expected to be generated
from operations.
In 1992, we recorded charges of $106 million consisting of asset
revaluation of $50 million, an early retirement program of $21 million, and
other costs of $35 million.
These restructurings are part of the Company's performance improvement
program that have and will reduce employment and other operating costs. The
principal benefits are expected to be an improvement in pretax operating
results and the redirection of resources to the Company's core businesses.
(See the discussion under the captions "Costs and Expenses - Performance
Improvement" and "Outlook" and Note N to the consolidated financial
statements.)
Selling, Administrative and General Expenses - Our selling, administrative
and general expenses declined in 1993 and 1992 because of our early
retirement program and other cost reductions. We also froze merit increases
for salaried employees and did not award bonuses.
Interest - Interest expense declined in 1993 primarily because of lower
rates and our debt management strategies. The increase in 1992 was
primarily due to higher amounts of debt outstanding and lower amounts of
interest capitalized on major construction projects.
We use interest rate swap agreements to manage our exposure to interest
rate fluctuations, after considering market conditions and our levels of
variable-rate and fixed-rate debt outstanding. These arrangements caused
our interest expense to be slightly lower in 1993 and slightly higher in
1992 and 1991. The intent of these arrangements is to provide for lower
interest expense during economic downturns, with the potential for higher
interest cost during periods of economic growth. (See Note K to the
consolidated financial statements.)
Environmental Matters - We take very seriously our responsibility to
protect the environment, our employees and the communities where we have
plants. Reynolds has spent and will continue to spend substantial capital
and operating amounts on environmental compliance. Annual capital
expenditures for equipment designed for environmental control purposes,
excluding expenditures for the construction of our spent potliner facility,
averaged approximately $35 million over the last three years. Ongoing
environmental operating costs for the same period averaged approximately
$70 million per year. We estimate that capital and operating expenditures
for 1994 and 1995 will remain at approximately these same levels.
While it is impossible to predict all of the expenditures that may become
necessary to meet future environmental requirements, we do expect to add or
modify environmental control facilities at several of our locations to meet
existing and anticipated regulatory requirements. These include
regulations to be issued under the Clean Air Act Amendments of 1990.
Based on current information, we estimate that compliance with the Clean
Air Act's hazardous air pollutant standards will require at least $200
million of capital expenditures, beginning in the latter half of this
decade, at our U.S. primary aluminum plants. Because of threatened legal
proceedings relating to our primary plant in New York, significant portions
of these capital expenditures may be accelerated. If this occurs, we will
have to consider whether such expenditures are prudent in light of
prevailing economic conditions and the uncertainty of standards yet to be
imposed by the Act. An alternative would be to curtail operations at the
plant.
Reynolds is involved in remedial investigations and actions at various
locations, including EPA Superfund sites where we and, in most cases,
others have been designated as potentially responsible parties.
The Company accrues remediation costs when it establishes the probability
that such efforts will be required and the costs can be estimated. In 1992
and 1990, we recorded environmental charges of $164 million and $150
million, respectively. We evaluate the status of all significant existing
or potential environmental issues quarterly, develop or revise estimates of
costs to satisfy known remediation requirements, and adjust our accrual
accordingly. The accrual reflects management's best estimate of the
Company's ultimate liability for known remediation costs. In estimating
our anticipated costs, we consider the extent of the Company's involvement
at each site, joint and several liability provisions under applicable law,
and the likelihood of obtaining contributions from other potentially
responsible parties. Potential insurance recoveries are not expected to be
material and therefore have not been considered.
At Dec. 31, 1993, the accrual was $298 million. Based on information
currently available, remediation expenditures relating to costs currently
accrued are expected to be made over the next 15 to 20 years with the
majority spent by the year 2000. Cash flows from operations, supplemented
by specific-purpose borrowings, are expected to provide funds for capital,
operating and remediation expenditures.
Estimating future environmental compliance and remediation costs is
imprecise due to the continuing evolution of environmental laws and
regulatory requirements, the availability and application of technology,
the identification of currently unknown remediation sites, and the
allocation of costs among potentially responsible parties. We do not
expect future costs, or a possible closure of our New York plant, to have a
material adverse effect on the Company's competitive or financial position
or ongoing operating results. However, future costs of environmental
remediation requirements that may subsequently be determined could be
material to future quarterly or annual results of operations.
Taxes on Income - The Company pays U.S. federal and state taxes and foreign
taxes based on the laws of various jurisdictions in which it operates. Our
effective tax rates, reflected in the income statement, differ from the
U.S. federal statutory rate principally because of state and foreign taxes
and the effects of depletion allowances. In 1993, the effect of changes in
rates in the U.S. and Quebec, Canada, generally offset one another in terms
of the impact on Reynolds' results. A reconciliation of the effective
rates is included in Note I to the consolidated financial statements.
Certain items, such as accelerated depreciation, are deducted on our tax
return before the expense is reflected in recorded income, which results in
a deferred tax liability. Other expenses, such as employee health care
costs and accrual of restructuring costs, which have been recognized in
recorded income, are not deductible for tax purposes until they are paid.
These expenses result in deferred tax assets. Worldwide, the Company has
operations in many tax jurisdictions which generate deferred tax assets
and/or liabilities. Deferred tax assets and liabilities have been netted
by jurisdiction and this results in both a deferred tax asset and a
deferred tax liability being shown in the balance sheet.
At Dec. 31, 1993, the Company had recorded $925 million of deferred tax
assets which relate primarily to the Company's U.S. and Canadian tax
positions. The significant portions of these assets relate to costs for
employee health care, restructuring and other special charges. A major
portion of these assets will be realized through the reversal of temporary
differences in the future, principally depreciation. To the extent that
these assets are not covered by reversals of depreciation, the remainder is
expected to be realized through U.S. and Canadian income earned in future
periods. The Company has a long-term history of sustainable earnings
despite recent losses, which have been affected by a number of special
charges. However, even without considering the projections of income,
certain tax planning strategies, such as changing the method of valuing
inventories from LIFO to FIFO and/or sale lease-back transactions, would
generate sufficient taxable income to realize the portion of the asset
related to U.S. operations. Also, the majority of the U.S. tax
carryforward benefits, which are included as part of the deferred tax
asset, can be carried forward indefinitely. Tax planning strategies
related to our Canadian operations also could be used, if necessary, to
realize the Canadian deferred tax assets. Such strategies include the
flexibility provided in the Canadian tax laws for tax depreciation claimed
and the ability to generate income on advance sales of products to the U.S.
parent.
Based on its evaluation of the matters discussed above, the Company is
confident that these deferred tax assets will be realized and it is not
aware of events or uncertainties which significantly affect its conclusions
regarding realization. The Company reassesses the realization of deferred
tax assets quarterly and, if necessary, adjusts its valuation allowance
accordingly. (See Note I to the consolidated financial statements.)
Cumulative Effects of Accounting Changes - In 1992, the Company adopted
Financial Accounting Standards (FAS) No. 106 - Employers' Accounting for
Postretirement Benefits Other Than Pensions and No. 109 - Accounting for
Income Taxes. Charges of $610 million (FAS 106) and $30 million (FAS 109)
were recognized in 1992 for the cumulative effects of these accounting
changes. The adoption of FAS 109 enabled full recognition of the deferred
tax benefits associated with the adoption of FAS 106. Additional
information is included in the discussions of postretirement benefits and
deferred taxes. (See Notes H and I to the consolidated financial
statements.)
MANAGING OUR CASH FOR FUTURE GROWTH
Liquidity and Capital Resources - We worked especially hard in 1993 to
manage our cash and working capital to generate funds internally for our
capital investment programs. We made a strategic decision to use some of
our existing cash for capital projects, which we believed was a better use
of resources during these times of low interest rates. While we have
unused lines of credit in excess of $400 million available for future
needs, our cash management program has been critical to our goals of
remaining essentially debt neutral and protecting our good credit rating
during current business conditions.
Working Capital - Working capital, the difference between current assets
and current liabilities, was $409 million at the end of 1993, compared to
$572 million at the end of 1992. This mainly reflects a reduction in
inventories from our success in cycle time reduction, and the decrease in
cash and short-term investments. Our ratio of current assets to current
liabilities declined to 1.3-to-1 at Dec. 31, 1993, from 1.5-to-1 at
Dec. 31, 1992.
Operating Activities - Cash generated from operations in 1993, 1992 and
1991 amounted to $259 million, $301 million and $336 million, respectively.
Cash generated from operations in 1993 and 1992 generally provided the
amounts we needed for investing and financing activities. Cash on hand
also was used in 1993 to supplement the funds generated from operations.
Cash generated from operations in 1991 was supplemented with borrowings to
meet the needs of our investing activities.
Investing Activities - In 1991, we completed a five-year, $3 billion
expansion and modernization program to restructure our metal supply stream
and upgrade many of our fabricating facilities. We completed a major
expansion of our Canadian operations providing an additional 150,000 tons
of low-cost primary aluminum capacity. This only partially offset
high-cost capacity that we permanently closed during the 1980s. To support
our primary production capabilities, we also modernized and expanded
alumina and carbon anode operations.
To strengthen our value-added fabricating operations at our aluminum can
sheet operation in Alabama, we completed a new state-of-the-art casting
facility that began operation in 1991.
In 1992, we expanded our wheel production capabilities and completed
construction of a new plant that supplies redraw rod to electrical wire and
cable producers. We also upgraded our capability to serve the automotive,
aircraft and aerospace industries at our Illinois sheet and plate mill. In
addition, we improved our U.S. recycling operations and built a new
recycling plant in Italy.
In 1993, we spent $400 million on capital investments and acquisitions.
This included the purchase of Miller Brewing Company's five aluminum can
plants, which increased our U.S. capacity about 50%. We also have a
long-term agreement with Miller to supply nearly all of its can needs.
This increases our internal consumption of can stock, which buffers us from
overcapacity in that market. We also completed a capacity expansion and
quality improvement program at our can sheet operation in Alabama. Our
ability to serve the growing automotive market has been enhanced with a new
plant in Indiana that will produce bumpers and other extruded components
when it reaches full production in 1994. We completed a plant in Arkansas
that will process spent potliner into an environmentally acceptable
material for use in soil erosion control, road paving and other commercial
applications.
Our program to maintain our can plants as state-of-the-art facilities is
ongoing. We have expanded capacity at our plastic film, container and bag
facilities over the past three years to support increased sales to consumer
and packaging markets.
The investments we have made provide a foundation of low-cost operations
that use the latest technology in most of our base materials, industrial
and finished products operations. With this foundation in place, we can
now focus our capital investing on strategic areas for expansion and on
further quality and efficiency enhancements.
We expect 1994 capital investments to be approximately $425 to $450
million. They will consist of strategic acquisitions and investments,
continuing improvements at our Alabama sheet facility, modernization and
expansion of our can manufacturing plants, and equipment upgrades at a
number of other facilities. The investments will be funded primarily with
cash generated from operations, proceeds from the sale of non-core assets,
and part of the proceeds from a new preferred stock issue completed in
January 1994.
Asset Sales - Part of our strategy is to sell non-core assets and redeploy
the proceeds into our value-added businesses. We sold our North American
electrical wire and cable operations and our investment in Eskimo Pie
Corporation in 1992, and a reclamation facility in Michigan in 1993.
We recently reached an agreement to sell Reynolds Australia Metals, Ltd.,
which holds a 40% interest in the Boddington Gold Mine in Western
Australia. (See the discussion of this transaction and related legal
proceedings under Item 1 of this report under the caption "Raw Materials
and Precious Metals - Precious Metals".) We also have reached agreement to
sell our can plant in Enzesfeld, Austria. We plan to reinvest the proceeds
from these sales in our value-added businesses targeted for growth in key
geographic markets and expect the reinvestment to more than offset any
short-term effect these divestitures may have on our results.
Financing Activities - We believe that internally generated funds, together
with other financial resources available to the Company, will allow us to
meet our business needs now and in the future. We have worked diligently
to maintain the financial integrity of the Company during a very trying
period. We are well within the financial ratio requirements contained in
our financing arrangements, and we expect to continue this performance.
(See Notes F and G to the consolidated financial statements.)
The following is a summary of our financing activities over the past three
years:
1991
Issued $406 million of medium-term notes at an average rate of 9.1% that
mature in 1997 to 2006.
Issued $100 million of 9% debentures due 2003.
Borrowed $120 million under short-term credit facilities.
Increased our shelf registration for debt securities from $1 billion to
$1.65 billion.
The proceeds from these activities were used in our capital investment
program, the voluntary prepayment of $200 million of floating rate notes
and other net reductions in long-term obligations of $187 million.
1992
Issued $97 million of medium-term notes at an average rate of 8.3% that
mature in 1999 to 2007.
Issued $43 million of tax-exempt bonds at a variable rate that mature in
2022.
Increased net short-term borrowings by approximately $200 million made
primarily under a $285 million short-term credit facility ($230 million was
outstanding at Dec. 31, 1992, at a variable rate of 4.1%), of which $173
million was reclassified to long-term.
The proceeds from these activities were used in our voluntary prepayments
of higher-cost debt, scheduled debt payments and other financing
activities. Proceeds from the tax-exempt bonds were used to fund a portion
of the costs to construct the spent potliner facility in Arkansas.
1993
Issued $78 million of medium-term notes at an average rate of 7.5% that
mature in 2004 to 2013.
Issued $285 million of 6-5/8% amortizing notes due between 1998 and 2002.
Borrowed $150 million under a bank credit agreement that requires a single
repayment in 1998 and bears interest at a variable rate (4% at Dec. 31,
1993).
The proceeds from these activities were used in our voluntary prepayment of
$143 million of the term loan agreement, refinancing approximately $200
million of short-term obligations, scheduled payments on long-term
obligations of approximately $100 million and for general corporate
purposes.
At Dec. 31, 1993, $222 million of the Company's $1.65 billion shelf
registration remained available for the issuance of debt securities.
In January 1994 we issued eleven million shares of convertible preferred
stock which generated $505 million of net proceeds. This will provide
additional financial strength to make necessary investments to keep our
facilities competitive, for strategic acquisitions and to reduce debt over
the next several years.
Postretirement Benefits - For our employees, we continue to provide
extensive health care and pension benefits. We have taken actions to curb
our costs but not at the expense of coverage and security.
During 1993, we took an important step toward our goal of fully funding our
pension plans by 1998. We filed a registration statement relating to the
contribution of up to 3 million shares of common stock to our pension
plans, 600,000 of which were contributed to one of the plans. In addition,
during 1993 we contributed $120 million in cash to the plans and they paid
out $90 million in benefits. At Dec. 31, 1993, our unfunded long-term
liability was approximately $250 million.
We also had a long-term liability of just over $1 billion at Dec. 31, 1993,
related to our health care and life insurance plans. This liability is
funded on a pay-as-you-go basis, as it has been in the past.
To more accurately reflect current economic conditions, we changed the
interest (discount) rate we used to calculate all of our postretirement
liabilities at Dec. 31, 1993. This change from 8.5% to 7.5% increased our
pension obligation by approximately $134 million and our health care
obligation by $86 million. In addition, our 1994 costs will increase by
approximately $15 million.
OUTLOOK
We expect continued difficult business conditions until grossly inflated
worldwide primary aluminum inventories are reduced.
Late in January 1994, the governments of the six major aluminum-producing
countries announced acceptance of a memorandum of understanding addressing
global supply-demand imbalance. The six governments finalized the text of
the memorandum during the week of February 28 and agreed to meet again on
April 21, 1994 to review the global market situation. Among other things,
the memorandum contemplates reductions in Russian primary aluminum
production of up to 500,000 metric tons per year for up to two years.
Whether this arrangement or other multilateral negotiations will succeed,
and their ultimate effect on the supply-demand imbalance, cannot be
predicted with certainty. If they are unsuccessful, unilateral trade
sanctions may be imposed by governments or private parties. Such
sanctions, if implemented, could result in higher prices in certain
countries or regions, but could also have a negative impact on our globally
integrated operations.
Longer term, Russia and other Eastern European countries are expected to
consume more fabricated aluminum products as they progress toward market
economies.
With the foundation outlined in this report, we believe that Reynolds is
well positioned to capitalize on the many global growth opportunities that
exist for aluminum products. Improved prices, combined with our
performance improvements and capital investments, should enable us to show
a strong recovery.
As we move ahead, our strategic priorities will be:
- - - - to grow our can, consumer products, packaging and transportation
businesses, through innovation, expansions and acquisitions,
- - - - to continue our performance improvement program, concentrating on our
cost reduction and announced restructuring efforts, with a goal of
realizing additional improvements at an annual rate of $200 million
pretax by the end of 1994, and
- - - - to further strengthen our financial position.
We are on a sound course that is designed to lead us to strategic
profitable growth and enable us to achieve improved performance for our
stockholders when business conditions turn around.<PAGE>
<TABLE>
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
<CAPTION>
CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS (In millions, except per share amounts)
Years ended December 31 1993 1992 1991
____________________________________________________________________________________________________
<S> <C> <C> <C>
REVENUES
Net sales (Note A) $5,269.2 $5,592.6 $5,730.1
Equity, interest and other income 25.0 27.7 54.4
Gain on sale of investment - 36.1 -
________________________________
5,294.2 5,656.4 5,784.5
________________________________
COSTS AND EXPENSES
Cost of products sold 4,930.3 5,031.8 5,010.3
Operational restructuring and asset revaluation costs (Note N) 348.2 106.4 -
Selling, administrative and general expenses 371.6 382.8 393.0
Interest - principally on long-term obligations (Notes F and K) 159.2 166.8 160.9
Provision for estimated environmental costs (Note M) - 164.0 -
________________________________
5,809.3 5,851.8 5,564.2
EARNINGS
Income (loss) before income taxes and cumulative
effects of accounting changes (515.1) (195.4) 220.3
Taxes on income (credit) (Note I) (193.0) (86.2) 66.2
________________________________
Income (loss) before cumulative effects of
accounting changes (322.1) (109.2) 154.1
Cumulative effects of accounting changes (Notes H and I) - (639.6) -
________________________________
NET INCOME (LOSS) (322.1) (748.8) 154.1
RETAINED EARNINGS
Balance at beginning of year 1,347.8 2,203.9 2,156.6
________________________________
1,025.7 1,455.1 2,310.7
Cash dividends (Note G) 71.9 107.3 106.8
________________________________
Retained earnings at end of year $953.8 $1,347.8 $2,203.9
================================
EARNINGS PER COMMON SHARE
Average shares outstanding 59.9 59.6 59.3
Income (loss) before cumulative effects of
accounting changes $(5.38) $(1.83) $2.60
Cumulative effects of accounting changes (Notes H and I) - (10.73) -
________________________________
Net income (loss) $(5.38) $(12.56) $2.60
================================
CASH DIVIDENDS PER COMMON SHARE (Note G) $1.20 $1.80 $1.80
================================
<FN>
See notes to consolidated financial statements
</TABLE>
<TABLE>
CONSOLIDATED BALANCE SHEET (In millions)
====================================================================================================
<CAPTION>
December 31 1993 1992
____________________________________________________________________________________________________
<S> <C> <C>
ASSETS
Current assets
Cash and short-term investments $19.2 $80.4
Receivables
Customers, less allowances of $16.7 (1992 - $16.2) 670.4 673.8
Other 123.8 123.8
____________________________
Total receivables 794.2 797.6
Inventories (Note B) 731.8 818.1
Prepaid expenses 44.8 60.7
____________________________
Total current assets 1,590.0 1,756.8
Unincorporated joint ventures and associated
companies (Note C) 832.5 849.8
Property, plant and equipment - net (Note D) 3,081.2 3,210.2
Deferred taxes (Note I) 408.2 246.8
Other assets 796.7 833.4
____________________________
Total assets $6,708.6 $6,897.0
============================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities (Note E)
Accounts payable, accrued and other liabilities $979.9 $824.3
Indebtedness 201.0 361.0
____________________________
Total current liabilities 1,180.9 1,185.3
Long-term debt (Note F) 1,989.6 1,797.7
Postretirement benefits (Note H) 1,260.9 1,196.5
Environmental (Note M) 258.9 287.5
Deferred taxes (Note I) 156.8 165.9
Other liabilities 238.6 204.1
Stockholders' equity
Common stock (Note G) 784.2 750.2
Retained earnings 953.8 1,347.8
Cumulative currency translation adjustments (Note G) (49.9) (1.7)
Pension liability adjustment (Note H) (65.2) (36.3)
____________________________
Total stockholders' equity 1,622.9 2,060.0
Contingent liabilities and commitments (Notes L and M) ____________________________
Total liabilities and stockholders' equity $6,708.6 $6,897.0
============================
<FN>
See notes to consolidated financial statements
</TABLE>
<TABLE>
CONSOLIDATED STATEMENT OF CASH FLOWS (In millions)
====================================================================================================
<CAPTION>
Years ended December 31 1993 1992 1991
____________________________________________________________________________________________________
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $(322.1) $(748.8) $154.1
Adjustments to reconcile to net cash provided by
operating activities:
Cumulative effects of accounting changes - 639.6 -
Depreciation and amortization (Note D) 287.0 284.0 265.1
Estimated operational restructuring, asset
revaluation and environmental costs 344.3 268.2 -
Deferred taxes (160.6) (119.1) (19.1)
Other 105.9 64.4 65.3
Changes in operating assets and liabilities net
of effects from acquisitions and dispositions:
Accounts payable, accrued and other liabilities 50.1 (2.5) (49.9)
Receivables (55.3) 31.9 7.1
Inventories 70.0 (34.6) (26.7)
Other (60.6) (81.9) (60.4)
_____________________________
Net cash provided by operating activities 258.7 301.2 335.5
INVESTING ACTIVITIES
Capital investments (400.5) (325.4) (460.6)
Proceeds from sales of assets 35.5 95.6 -
Other 59.9 (21.8) (43.2)
_____________________________
Net cash used in investing activities (305.1) (251.6) (503.8)
FINANCING ACTIVITIES
Proceeds from long-term obligations 544.8 316.3 517.4
Reduction of long-term debt and other financing
liabilities (467.8) (276.8) (387.0)
Net increase (decrease) in short-term borrowings (19.9) 31.6 122.2
Cash dividends paid (Note G) (71.9) (107.3) (106.8)
_____________________________
Net cash provided by (used in) financing activities (14.8) (36.2) 145.8
CASH AND SHORT-TERM INVESTMENTS
NET INCREASE (DECREASE) (61.2) 13.4 (22.5)
AT BEGINNING OF YEAR 80.4 67.0 89.5
_____________________________
AT END OF YEAR $19.2 $80.4 $67.0
=============================
<FN>
See notes to consolidated financial statements
</TABLE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except share amounts. Certain amounts have been reclassified
to conform to the 1993 presentation.)
- - - ---------------------------------------------------------------------------
NOTE A - ACCOUNTING POLICIES
Certain of the Company's accounting policies are shown in boldface type and
discussed below. Accounting policies which relate to a specific disclosure
are shown in boldface type with such disclosure.
Principles of Consolidation
THE ACCOUNTS OF THE COMPANY AND ITS MAJORITY-OWNED SUBSIDIARIES ARE
INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS AFTER ELIMINATION OF
INTERCOMPANY TRANSACTIONS AND PROFITS AND LOSSES.
Revenue Recognition
REVENUES ARE RECOGNIZED AT THE TIME PRODUCTS ARE SHIPPED AND TITLE AND RISK
OF OWNERSHIP PASS TO THE CUSTOMER.
Investments in Debt Securities
THE COMPANY CLASSIFIES ITS INVESTMENTS IN DEBT SECURITIES AS TRADING
SECURITIES AND RECOGNIZES UNREALIZED GAINS AND LOSSES IN EARNINGS IN EACH
ACCOUNTING PERIOD.
Postemployment Benefits
THE COMPANY ACCRUES THE EXPECTED COST OF POSTEMPLOYMENT BENEFITS WHEN IT
BECOMES PROBABLE THAT SUCH BENEFITS WILL BE PAID.
Statement of Cash Flows
FOR PURPOSES OF THE STATEMENT OF CASH FLOWS, THE COMPANY CONSIDERS ALL
HIGHLY LIQUID SHORT-TERM INVESTMENTS PURCHASED WITH A MATURITY OF THREE
MONTHS OR LESS TO BE CASH EQUIVALENTS.
Hedging
THE COMPANY USES FORWARD, FUTURES AND OPTION CONTRACTS AND SWAP AGREEMENTS
TO MANAGE A PORTION OF ITS EXPOSURES IN THE ALUMINUM, GOLD, NATURAL GAS,
FOREIGN CURRENCY AND DEBT MARKETS. THE EFFECTS OF THESE CONTRACTS ARE
RECOGNIZED OR ACCRUED AS A COMPONENT OF THE RELATED TRANSACTIONS.
NOTE B - INVENTORIES
INVENTORIES ARE STATED AT THE LOWER OF COST OR MARKET. COST OF INVENTORIES
OF $270.5 MILLION IN 1993 AND $307.6 MILLION IN 1992 IS DETERMINED BY THE
LAST-IN, FIRST-OUT (LIFO) METHOD. REMAINING INVENTORIES OF $461.3 MILLION
IN 1993 AND $510.5 MILLION IN 1992 ARE DETERMINED BY THE AVERAGE OR
FIRST-IN, FIRST-OUT (FIFO) METHODS.
If the FIFO method were applied to LIFO inventories, the amount for
inventories would increase by $417.4 million at December 31, 1993, and
$447.0 million at December 31, 1992. Since certain inventories of the
Company may be sold at various stages of processing, no practical
distinction can be made between finished products, in-process products and
other materials. Inventories are therefore presented as a single
classification.
NOTE C - UNINCORPORATED JOINT VENTURES AND ASSOCIATED COMPANIES
UNINCORPORATED JOINT VENTURES ARE PRODUCTION FACILITIES WHICH HAVE NO
MARKETING OR SALES ACTIVITIES AND ARE ACCOUNTED FOR ON AN INVESTMENT COST
BASIS ADJUSTED FOR THE COMPANY'S SHARE OF THE NON-CASH PRODUCTION CHARGES
OF THE OPERATION. INVESTMENTS IN ASSOCIATED (20% TO 50% OWNED) COMPANIES
ARE CARRIED AT COST, ADJUSTED FOR THE COMPANY'S EQUITY IN THEIR
UNDISTRIBUTED NET INCOME.
The Company has interests in unincorporated joint ventures which produce
alumina and gold. It also has interests in foreign-based associated
companies which provide the Company with bauxite, alumina, primary aluminum
and hydroelectric power. At December 31 the Company's investment in these
activities consisted of the following:
1993 1992
____________________
Unincorporated joint ventures
Current assets $18.1 $28.9
Current liabilities (13.5) (12.7)
Property, plant and equipment and other assets 578.0 602.3
____________________
Net investment 582.6 618.5
____________________
Associated companies
Investments 237.0 225.8
Advances 12.9 5.5
____________________
Net investment 249.9 231.3
____________________
Total $832.5 $849.8
====================
NOTE D - PROPERTY, PLANT AND EQUIPMENT - AT COST
DEPRECIATION OF PLANT AND EQUIPMENT IS PROVIDED BY THE STRAIGHT-LINE METHOD
OVER THEIR ESTIMATED USEFUL LIVES. IMPROVEMENTS TO LEASED PROPERTIES ARE
AMORTIZED GENERALLY ON THE BASIS OF THE SHORTER OF THE TERMS OF THE
RESPECTIVE LEASES OR THE ESTIMATED USEFUL LIVES OF THE RELATED FACILITIES.
Components of property, plant and equipment are as follows:
1993 1992
____________________
Land, land improvements and
mineral properties $302.8 $287.8
Buildings and leasehold improvements 993.0 988.3
Machinery and equipment 4,587.0 4,417.3
Construction in progress 210.3 183.3
Funds designated for capital expenditures - 25.6
_____________________
6,093.1 5,902.3
Less: Allowances for depreciation and amortization 3,011.9 2,692.1
_____________________
Net property, plant and equipment $3,081.2 $3,210.2
=====================
NOTE E - CURRENT LIABILITIES
1993 1992
______________________
Trade payables $386.7 $370.6
Accrued compensation and related amounts 218.7 223.5
Restructuring 71.9 11.4
Payables to associated companies 71.8 46.4
Other liabilities 230.8 172.4
______________________
Accounts payable, accrued and other liabilities 979.9 824.3
Notes payable to banks 158.4 191.2
Long-term obligations 42.6 169.8
______________________
Indebtedness 201.0 361.0
______________________
Total current liabilities $1,180.9 $1,185.3
======================
NOTE F - FINANCING ARRANGEMENTS
Long-term debt outstanding at December 31:
1993 1992
______________________
Public debt securities:
Medium-term notes $976.5 $933.5
9% debentures due 2003 100.0 100.0
9-3/8% debentures due 1999 99.9 99.8
6-5/8% amortizing notes 283.6 -
Industrial and environmental control
revenue bonds 227.7 220.9
Commercial paper 50.0 25.0
Other issues:
Bank credit agreement 150.0 -
Term loan agreement 91.8 274.2
Mortgages and other notes payable 52.7 141.1
Short-term borrowings, reclassified - 173.0
______________________
2,032.2 1,967.5
Amounts due within one year 42.6 169.8
______________________
Long-term debt $1,989.6 $1,797.7
======================
Maturities of long-term debt are $52.0 million in 1995, $96.0 million in
1996, $42.4 million in 1997, $291.6 million in 1998 and $1,507.6 million
from 1999 to 2022. Interest paid amounted to $159.0 million, $169.6
million and $157.2 million during 1993, 1992 and 1991, respectively, net of
interest capitalized of $8.0 million, $13.6 million and $19.4 million.
NOTE F - FINANCING ARRANGEMENTS - continued
In 1993, the Company borrowed $150 million under a bank credit agreement,
issued $78 million of medium-term notes and issued $285 million of 6-5/8%
amortizing notes due July 15, 2002. The proceeds were used to voluntarily
prepay $142.6 million of the term loan agreement, to refinance
approximately $200 million of short-term obligations, to make scheduled
payments on long-term obligations of approximately $100 million and for
general corporate purposes.
The Company has on file a shelf registration to issue up to $1.65 billion
of debt securities. The medium- term notes, 9% debentures and 9-3/8%
debentures were issued under the shelf registration. The medium-term notes
bear interest at an average rate of 9.0% and have maturities ranging from
1995 to 2013. At December 31, 1993, $222 million of debt securities
remained unissued under the Company's shelf registration.
The 6-5/8% amortizing notes were issued at a discount (99.48%) and have an
effective interest rate of 6.7%. The notes require annual principal
repayments of $57 million each year between 1998 and 2002.
Industrial and environmental control revenue bonds consist principally of
variable rate debt averaging approximately 3% at December 31, 1993. These
bonds require principal repayment periodically or in a lump sum through
2022. $215 million of these bonds are supported by bank letters of credit.
At December 31, 1993, $65.0 million of commercial paper was outstanding at
an average rate of 3.4%. Commercial paper of $50 million is classified as
long-term debt since it is the Company's intent (supported by $200 million
in revolving credit facilities) to refinance the debt on a long-term basis.
The Company has an additional $290 million in revolving credit facilities,
of which $250 million expire in 1995.
The bank credit agreement bears interest at a variable rate (4.0% at
December 31, 1993) and requires a single repayment in 1998.
The term loan agreement bears interest at a variable rate (3.6% at December
31, 1993) and requires principal repayment through 1996.
Mortgages and other notes payable consist of fixed rate debt at an average
rate of 7.4% and require principal repayment through 2009.
Certain of the Company's financing arrangements contain restrictions which,
among other things, require maintenance of specified financial ratios.
These restrictions do not inhibit the Company's operations or the use of
fixed assets. At December 31, 1993, the Company exceeded all such
requirements.
NOTE G - STOCKHOLDERS' EQUITY
Preferred stock
The Company has 21,000,000 shares of preferred stock authorized of which
2,000,000 shares have been designated Series A Junior Participating
Preferred and 11,000,000 have been designated 7% PRIDES(SM), Convertible
Preferred Stock. At December 31, 1993, none of the Company's preferred
stock was issued or outstanding.
NOTE G - STOCKHOLDERS' EQUITY - continued
In early 1994, the Company issued 11,000,000 shares of 7% PRIDES for $47.25
(stated value) per share. The PRIDES mature on December 31, 1997, at which
time they mandatorily convert into shares of the Company's common stock on
a one for one basis. Dividends will be cumulative from the date of
issuance and will be payable quarterly in arrears. Holders may convert
each share of PRIDES into 0.82 shares of common stock (to be adjusted under
certain circumstances) at any time prior to December 31, 1997. The Company
has the option of redeeming the PRIDES at any time after December 31, 1996,
at a value equal to the issue price plus accrued dividends plus a small
premium. The redemption price is payable in common stock equal to the fair
market value at the time of the redemption, but will in no event be less
than 0.82 shares of common stock per share of PRIDES. The holders of
shares of PRIDES will have the right with the holders of common stock to
vote in the election of Directors and upon each other matter coming before
any meeting of the holders of common stock on the basis of 4/5 of a vote
for each share of PRIDES. The Company received net proceeds of $505.0
million which it intends to use to repay short-term debt, finance capital
expenditures and strategic investments, and for general corporate purposes.
The PRIDES will be considered as common stock equivalents for the purpose
of calculating earnings per share.
Common stock
Shares Amount
_________________________
Authorized, without par value 200,000,000
Outstanding:
At beginning of 1991 59,494,139 $734.2
Shares issued under employee benefit plans:
1991 112,821 7.8
1992 153,259 8.2
1993 728,644 34.0
_________________________
At end of 1993 60,488,863 $784.2
=========================
The Company filed a registration statement in the fourth quarter of 1993
relating to the contribution of up to three million shares of common stock
to one or more of its pension plans and contributed 600,000 shares to one
of the plans in 1993 at a value of $28.1 million.
In the second quarter of 1993, the Board of Directors of the Company
reduced the quarterly dividend on the common stock from $0.45 to $0.25 per
share, citing current and expected business conditions in the near term.
The decrease in the dividend reduced the Company's annual cash outlays by
approximately $48 million.
<PAGE>
NOTE G - STOCKHOLDERS' EQUITY - continued
Stock option plan
The Company has a non-qualified stock option plan under which stock options
may be granted to key employees of the Company at a price equal to the fair
market value at the date of grant. Transactions involving the plan are
summarized as follows:
1993 1992 1991
________________________________________
Outstanding January 1 3,138,856 2,609,856 2,063,506
Granted 673,100 620,700 622,600
Cancelled (33,250) (26,550) (4,750)
Exercised (22,900) (65,150) (71,500)
________________________________________
Outstanding at December 31 3,755,806 3,138,856 2,609,856
========================================
Exercisable at December 31 3,084,356 2,531,056 1,987,256
========================================
Options available for grant 2,016,000 2,655,850 3,250,000
========================================
Weighted average prices:
Granted $45.50 $57.25 $57.13
Exercised 35.25 36.50 41.00
Outstanding at December 31 51.50 52.75 51.25
Exercisable at December 31 52.75 51.50 49.50
Shareholder rights plan
Each share of the Company's common stock has one right attached. The
rights trade with the common stock and are exercisable only if a person or
group buys 20% or more of the Company's common stock, or announces a tender
offer for 30% or more of the outstanding common stock. When exercisable,
each right will entitle a holder to buy one-hundredth of one share of the
Company's Series A Junior Participating Preferred Stock at an exercise
price of $125.
If at any time after the rights become exercisable, the Company is acquired
in a merger or other business combination or if 50% of its assets or
earning power is sold or transferred, each right would enable its holder to
buy common stock of the acquiring company at a 50% discount. In addition,
if a person or group acquires 30% or more of the common stock or if certain
other events occur, each right would enable its holder to buy common stock
of the Company at a 50% discount. The rights, which do not have voting
privileges, expire in 1997, but may be redeemed by action of the Board of
Directors before then, under certain circumstances, for $0.05 per right.
Until the rights become exercisable, they have no dilutive effect on
earnings per share.
Although these rights should not interfere with a business combination
approved by the Board of Directors, they will cause substantial dilution to
a person or group that attempts to acquire the Company without conditioning
the offer on redemption of the rights or acquiring a substantial number of
the rights.
Cumulative currency translation adjustments
1993 1992 1991
___________________________________
At beginning of year $(1.7) $14.2 $37.6
Currency translation adjustments (49.1) (15.0) (24.2)
Income taxes .9 (.9) .8
___________________________________
At end of year $(49.9) $(1.7) $14.2
===================================
NOTE H - POSTRETIREMENT BENEFITS
Pensions
The Company has several noncontributory defined benefit pension plans
covering substantially all employees. Plans covering salaried employees
provide pension benefits that are based on a formula which considers length
of service and earnings during years of service. Plans covering hourly
employees generally provide a specific amount of benefits for each year of
service.
Net pension costs were as follows:
1993 1992 1991
_________________________________
Service cost $26.8 $27.1 $24.1
Interest cost 116.8 107.7 100.1
Actual return on plan assets (162.8) (43.5) (181.3)
Net amortization and deferrals 83.9 (27.1) 117.6
Other 9.8 12.8 9.9
_________________________________
Total $74.5 $77.0 $70.4
=================================
Assumptions used in accounting for the Company's principal pension plans
are as follows:
1993 1992 1991
_________________________
Weighted average discount rate 7.5% 8.5% 8.75%
Approximate weighted average rate
of increase in compensation levels
(salaried plan only) 4.5% 4.5% 5.0%
Expected long-term rate of return
on assets 9.25% 9.25% 9.0%
The following table sets forth information on the Company's principal
pension plans where the accumulated benefit obligation exceeds assets at
December 31:
1993 1992
___________________
Actuarial present value of pension benefit obligation:
Vested $1,375.7 $1,109.3
Nonvested 168.2 130.5
___________________
Accumulated $1,543.9 $1,239.8
===================
Projected $1,660.7 $1,346.9
Plan assets at fair value 1,329.2 1,110.8
___________________
Plan assets less than pension benefit obligation 331.5 236.1
Items not yet recognized:
Unrecognized net loss (253.7) (151.4)
Unamortized plan change benefits (104.5) (102.8)
Recognition of minimum liability 153.0 163.0
___________________
Net pension liability $126.3 $144.9
===================
NOTE H - POSTRETIRMENT BENEFITS - continued
Reflected in the Company's balance sheet is the additional minimum
liability relative to its underfunded plans in the amount of $153 million
in 1993 ($163 million in 1992). A corresponding amount is recognized as an
intangible asset, to the extent it does not exceed unamortized plan change
benefits, while the excess, net of tax, has been charged to stockholders'
equity. The increase in the charge to stockholders' equity resulted
primarily from increased pension obligations (due primarily to lowering the
discount rate to 7.5% at the end of 1993). The Company's funding policies
meet or exceed all regulatory requirements.
At December 31, 1993, approximately 60% of the plans' assets were invested
in corporate equity securities (including 600,000 shares of common stock of
the Company), 20% in corporate bonds, 14% in government debt securities and
cash equivalents and 6% in real estate.
Other postretirement benefits
IN THE FOURTH QUARTER OF 1992, THE COMPANY ELECTED EARLY ADOPTION OF FAS
NO. 106 - EMPLOYERS' ACCOUNTING FOR POSTRETIREMENT BENEFITS OTHER THAN
PENSIONS. FAS 106 GENERALLY REQUIRES THE ACCRUAL OF THE EXPECTED COST OF
POSTRETIREMENT BENEFITS (HEALTH CARE AND LIFE INSURANCE) BY THE DATE
EMPLOYEES ATTAIN FULL ELIGIBILITY FOR BENEFITS TO BE RECEIVED. PREVIOUSLY,
THE EXPENSE FOR THESE BENEFITS WAS RECOGNIZED WHEN COSTS WERE INCURRED OR
CLAIMS WERE RECEIVED.
A charge of $610.0 million ($975.0 million before tax) was recognized in
1992 for the cumulative effects of this accounting change. In addition,
adoption resulted in a decrease in income before the cumulative effects of
accounting changes for 1992 of $32.5 million ($52.0 million before tax) or
$0.54 per share.
The Company provides health care and life insurance benefits to most
domestic retired employees. Substantially all of the Company's domestic
employees may become eligible for these benefits if they reach retirement
age while working for the Company. In late 1992 and in 1993 the Company
changed the plans to provide for additional cost-sharing features with
future retirees. These include the elimination of certain reimbursements
and requiring retiree contributions based upon age and service criteria and
at specified cost levels. These changes reduced the cost of providing
these benefits by approximately $39 million in 1993. The Company's policy
is to fund the cost of these benefits when actual expenses are incurred.
The Company's accumulated postretirement benefit obligation is comprised of
the following at December 31:
1993 1992
___________________
Retirees $748.0 $589.1
Active employees fully eligible 57.2 117.7
Active employees not fully eligible 176.4 249.3
Unamortized plan change benefits 207.4 102.0
Unrecognized net loss (115.9) (31.1)
___________________
Total $1,073.1 $1,027.0
===================
Net periodic postretirement benefit cost
was (1991 - $40 million):
1993 1992
_______________
Service cost $ 9.4 $16.6
Interest cost 73.7 84.7
Net amortization (14.5) -
________________
Total $68.6 $101.3
================
NOTE H - POSTRETIREMENT BENEFITS - continued
The annual assumed rate of increase in the per capita cost of covered
benefits (i.e., health care cost trend rate) is 11% for 1994 (12.5% in 1993
and 13% in 1992) and is assumed to decrease gradually to 6% for 2002 and
remain at that level thereafter. The health care cost trend rate
assumption has a significant effect on the amounts reported. For example,
each one percentage point change in the assumed health care cost trend rate
would change the accumulated postretirement benefit obligation as of
December 31, 1993, by approximately $67 million and the aggregate of the
service and interest cost components of net periodic postretirement benefit
cost for 1993 by approximately $5 million.
The weighted-average discount rate used in determining the accumulated
postretirement benefit obligation was 7.5% at December 31, 1993, and 8.5%
at December 31, 1992.
NOTE I - TAXES ON INCOME
EFFECTIVE JANUARY 1, 1992, THE COMPANY CHANGED ITS METHOD OF ACCOUNTING FOR
INCOME TAXES FROM THE DEFERRED METHOD TO THE LIABILITY METHOD AS REQUIRED
BY FAS NO. 109 - ACCOUNTING FOR INCOME TAXES. AS PERMITTED UNDER THE NEW
RULES, PRIOR YEARS' FINANCIAL STATEMENTS HAVE NOT BEEN RESTATED BUT PRIOR
INTERIM PERIODS OF 1992 WERE RESTATED TO REFLECT THE CHANGES.
A charge of $30 million was recognized in the first quarter of 1992 for the
cumulative effects of the accounting change. Adoption of FAS 109 enabled
full recognition of the deferred tax benefits associated
with the adoption of FAS 106.
At December 31, 1993, the Company had various U.S., Canadian and German
income tax carryforward benefits of $84 million that expire at various
times through 2008 and $106 million that can be carried forward
indefinitely. The Company has deferred tax assets primarily relating to
certain foreign entities of approximately $44 million against which a full
valuation reserve has been recorded. The Company is continuing to evaluate
alternatives which may result in the ultimate realization of a portion of
these assets.
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. At
December 31, 1993, the Company had $925 million (1992 - $784 million) of
deferred tax assets and $656 million (1992 - $703 million) of deferred tax
liabilities which have been netted with respect to tax jurisdictions for
presentation purposes. The significant components of these amounts as
shown on the balance sheet are as follows:
<PAGE>
<TABLE>
<CAPTION>
1993 1992
___________________________________________
Asset Liability Asset Liability
___________________________________________
<S> <C> <C> <C> <C>
Retiree health benefits $412.3 - $384.5 -
Tax carryforward benefits 182.2 $(52.1) 108.7 $(62.4)
Environmental, restructuring and other costs 168.8 (2.9) 140.9 -
Other 27.8 13.9 50.9 12.6
Tax over book depreciation (321.1) 198.0 (398.2) 215.7
Valuation reserve relating to tax carryforward benefits (44.0) - (40.0) -
__________________________________________
Total deferred tax assets and liabilities 426.0 156.9 246.8 165.9
Amount included as current in balance sheet 17.8 .1 - -
____________________________________________________
Noncurrent deferred tax assets and liabilities $408.2 $156.8 $246.8 $165.9
====================================================
</TABLE>
<PAGE>
NOTE I - TAXES ON INCOME - continued
Significant components of the provision for income taxes are as follows:
Deferred
Liability Method Method
____________________ _________
1993 1992 1991
____________________ _________
Current:
Federal $(55.8) $10.8 $29.7
Foreign 14.3 19.8 23.2
State 4.3 2.4 5.5
____________________ _________
Total current (37.2) 33.0 58.4
____________________ _________
Deferred:
Federal (98.4) (89.0) 8.8
Foreign (33.3) (16.9) (10.2)
State (28.9) (17.7) 4.7
____________________ _________
Total deferred (160.6) (123.6) 3.3
____________________ _________
Equity 4.8 4.4 4.5
____________________ _________
Total $(193.0) $(86.2) $66.2
==================== =========
The deferred tax provision includes state and foreign operating loss
carryforward benefits of $25.1 million.
The major components of the deferred tax provision under the deferred
method, which was used in 1991, consisted of tax loss, AMT and other tax
credits of ($56.4) million; depreciation and amortization of $37.5 million
and facility closing and environmental costs and other items of $22.2
million.
The Company has not provided taxes on the undistributed earnings ($667
million) of foreign subsidiaries as it is the intent of the Company to use
such earnings to finance foreign expansion, reduce foreign debt and support
foreign operating requirements.
The Company's effective income tax rate varied from the United States
statutory rate as follows:
<PAGE>
Deferred
Liability Method Method
_________________ _________
1993 1992 1991
_________________ _________
United States rate (35)% (34)% 34%
Income taxed at other than U.S. rate 3 (3) (2)
Domestic and foreign depletion allowances (1) (2) (3)
State income taxes and other (4) (5) 1
_________________ _________
Effective rate (37)% (44)% 30%
=================== =========
Income taxes paid, net of refunds, were $5.7 million, $17.1 million and
$89.9 million in 1993, 1992 and 1991, respectively.
<PAGE>
NOTE J - COMPANY OPERATIONS
The Company is a vertically integrated enterprise operating predominantly
in the aluminum industry in both domestic and foreign areas. In order to
more fully describe the nature of its operations and to supplement the
foregoing, the Company has separated its vertically integrated operations
into two groups referred to as finished products and other sales, and
production and processing. Summarized financial information relating to
the Company's operations and investments is as follows:
<PAGE>
<TABLE>
<CAPTION>
Domestic Canada
_____________________________ ____________________________
GEOGRAPHIC DATA 1993 1992 1991 1993 1992 1991
_____________________________ ____________________________
<S> <C> <C> <C> <C> <C> <C>
Products and services sold
Customers $3,966.5 $4,212.6 $4,272.1 $293.5 $276.8 $282.1
Transfers between areas 224.1 276.4 301.4 377.4 425.5 395.5
_____________________________ ____________________________
Total products and services sold $4,190.6 $4,489.0 $4,573.5 $670.9 $702.3 $677.6
============================= ============================
Operating profit (loss) $(16.8) $76.4 $264.5 $(9.3) $19.4 $(38.5)
Equity in income of companies
not consolidated 8.5 8.3 11.5
Interest and other income 6.0 44.7 18.2 .7 1.2 1.1
Interest expense (116.1) (130.6) (122.3) (23.5) (19.4) (23.0)
_____________________________ ____________________________
Income (loss) before income taxes
and cumulative effects of
accounting changes $(126.9) $(9.5) $160.4 $(23.6) $9.5 $(48.9)
============================= ============================
Identifiable assets $3,991.1 $3,969.7 $3,757.0 $1,215.8 $1,250.5$1,305.1
____________________________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Finished products and other sales
_________________________________
<S> <C> <C> <C>
OPERATING DATA 1993 1992 1991
_________________________________
Products and services sold
Customers $2,528.1 $2,582.2 $2,488.0
Internal transfers 2.1 3.8 4.0
_________________________________
Total products and services sold $2,530.2 $2,586.0 $2,492.0
=================================
Operating profit (loss) $146.5 $214.1 $215.9
Equity in income of companies not consolidated
Interest and other income
Interest expense
Income (loss) before income taxes and
cumulative effects of accounting changes
Operating profit (loss) includes depreciation and amortization of $71.1 $71.8 $63.5
Identifiable assets $1,252.9 $1,156.3 $1,213.7
Capital investments $173.1 $63.6 $71.7
<CAPTION>
Other foreign (principally Europe) Eliminations, etc. Consolidated
_________________________________ _______________________________ _____________________________
1993 1992 1991 1993 1992 1991 1993 1992 1991
_________________________________ _______________________________ _____________________________
<C> <C> <C> <C> <C> <C> <C> <C> <C>
$1,009.2 $1,103.2 $1,175.9 $5,269.2 $5,592.6 $5,730.1
160.7 178.8 195.8 $(762.2) $(880.7) $(892.7)
_________________________________ ______________________________ _____________________________
$1,169.9 $1,282.0 $1,371.7 $(762.2) $(880.7) $(892.7) $5,269.2 $5,592.6 $5,730.1
================================= ============================= ============================
$(5.1) $74.9 $80.1 $(349.7) $(263.1) $20.7 $(380.9) $(92.4) $326.8
8.6 8.1 7.0 (8.5) (8.3) 8.6 8.1 18.5
9.8 13.8 17.7 (.1) (4.0) (1.1) 16.4 55.7 35.9
(19.7) (20.8) (16.7) .1 4.0 1.1 (159.2) (166.8) (160.9)
_________________________________ ______________________________ ______________________________
$(6.4) $76.0 $88.1 $(358.2) $(271.4) $20.7 $(515.1) $(195.4) $220.3
================================= ============================== ==============================
$748.2 $941.4 $914.8 $(79.0) $(114.4) $(124.2) $5,876.1 $6,047.2 $5,852.7
____________________________________________________________________________________________________
<CAPTION>
Production and processing Eliminations, etc. Consolidated
_____________________________ ______________________________ ________________________________
1993 1992 1991 1993 1992 1991 1993 1992 1991
_____________________________ ______________________________ ________________________________
<C> <C> <C> <C> <C> <C> <C> <C> <C>
$2,741.1 $3,010.4 $3,242.1 $5,269.2 $5,592.6 $5,730.1
659.4 770.6 783.8 $(661.5) $(774.4) $(787.8)
_____________________________ ______________________________ ________________________________
$3,400.5 $3,781.0 $4,025.9 $(661.5) $(774.4) $(787.8) $5,269.2 $5,592.6 $5,730.1
============================= ============================== ================================
$(188.2) $(53.6) $103.4 $(339.2) $(252.9) $7.5 $(380.9) $(92.4) $326.8
17.1 16.4 18.5 (8.5) (8.3) 8.6 8.1 18.5
16.4 55.7 35.9
(159.2) (166.8) (160.9)
________________________________
$(515.1) $(195.4) $220.3
================================
$215.9 $212.2 $201.6 $287.0 $284.0 $265.1
$3,686.3 $4,117.3 $4,151.5 $(15.2) $(14.4) $(33.1) $4,924.0 $5,259.2 $5,332.1
$227.4 $261.8 $388.9 $400.5 $325.4 $460.6
</TABLE>
NOTE J - COMPANY OPERATIONS - continued
Approximately 27% of products transferred between operating areas and all
transfers from other foreign areas are reflected at cost-related prices.
Other transfers between operating areas and transfers between Canada and
domestic areas are reflected at market-related prices.
Operating profit is after allocation of selling, administrative and general
expenses. It does not reflect interest expense or other items of income or
expense considered to be general corporate in nature.
The Company has investments in and advances to associated companies and
unincorporated joint ventures not consolidated amounting to $832.5 million
in 1993, $849.8 million in 1992 and $832.6 million in 1991. Such
investments and advances relate principally to Australian and Canadian
entities in the production and processing area. Corporate assets
associated with operating data of $952.1 million in 1993, $788.0 million in
1992 and $520.6 million in 1991 consist principally of cash, investments,
deferred taxes and other assets.
Research and development expenditures were $36.1 million in 1993, $37.7
million in 1992 and $37.4 million in 1991.
NOTE K - FINANCIAL INSTRUMENTS
The Company uses forward contracts and swap agreements to manage a portion
of its exposure to fluctuations in foreign currencies relating to certain
committed aluminum sales and raw material acquisitions in foreign markets.
At December 31, 1993, the Company had $514 million of these arrangements
(1992 - $281 million) which mature in 1994 to 2002.
The Company uses interest rate swap agreements to manage a portion of its
exposure to interest rate fluctuations after considering outstanding levels
of variable-rate and fixed-rate debt. In 1993 the Company entered into new
agreements, terminated certain agreements and revised the rates in certain
other agreements, the net result being to increase the amount of agreements
outstanding and to extend terms. The Company received $16 million for the
rate revisions referred to above which is being amortized (through 1996)
over the original terms of the revised agreements. At December 31, 1993,
the Company had $230 million of interest rate swap agreements (1992 - $225
million) which effectively convert a portion of its debt from variable-rate
to fixed-rate. Under these agreements the Company receives payments based
on a variable rate (3.8% at December 31, 1993) and makes payments based on
a fixed rate (6.5%). $55 million of these agreements expire in 1994 and
$175 million expire in 1998. The Company also had $742 million of interest
rate swap agreements (1992 - $300 million) which effectively convert a
portion of its debt from fixed-rate to variable-rate. Under these
agreements the Company receives payments based on a fixed rate (5.0%) and
makes payments based on a variable rate (3.6% at December 31, 1993). These
agreements expire in 1996 ($517 million), 1997 ($125 million) and 1998
($100 million).
The fair value of financial instruments was estimated based upon quoted
prices for comparable contracts and discounted cash flow analyses and
varies from period to period based on a number of factors, principally
interest rates. At the end of 1993 and 1992, the fair value of the
financial instruments discussed above was approximately the same as
carrying value. The Company is exposed to certain losses if the other
parties to these agreements do not perform, but the Company expects the
counterparties to perform their obligations. The carrying amount of long-
term debt was approximately $140 million lower than its fair value in 1993
and approximately equal to fair value in 1992.
NOTE L - CONTINGENT LIABILITIES AND COMMITMENTS
Various suits and claims are pending against the Company. In the opinion
of the Company's 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.
In order to assure an adequate supply of certain raw material requirements,
the Company has committed to pay its proportionate share of annual
production charges (including debt service) relating to its interests in
certain unincorporated joint ventures and associated companies. These
arrangements include minimum commitments of approximately $50 million
annually through 1998 and additional amounts thereafter which together, at
present value, aggregate $226 million at December 31, 1993, after excluding
interest of $62 million and variable operating costs of the facilities.
During 1993 the Company purchased approximately $195 million (1992 - $200
million, 1991 - $230 million) of raw materials under these arrangements.
The Company leases certain items of property, plant and equipment under
long-term operating leases. Lease expense was approximately $46 million
per year for the years 1991 to 1993. Lease commitments at December 31,
1993, were approximately $63 million. Leases covering major items contain
renewal and/or purchase options which may be exercised by the Company.
NOTE M - ENVIRONMENTAL EXPENDITURES
THE COMPANY'S POLICY IS TO ACCRUE REMEDIATION COSTS WHEN IT IS PROBABLE
THAT SUCH EFFORTS WILL BE REQUIRED AND THE RELATED COSTS CAN BE REASONABLY
ESTIMATED.
The Company is involved in various worldwide environmental improvement
activities resulting from past operations, including designation as a
potentially responsible party (PRP) with others, at various EPA designated
Superfund sites. In developing its estimate of environmental remediation
costs, the Company considers, among other things, currently available
technological solutions, alternative cleanup methods and risk-based
assessments of the contamination and, as applicable, an estimation of its
proportionate share of remediation costs. The Company may also make use of
external consultants, and consider, when available, estimates by other
PRP's and governmental agencies and information regarding the financial
viability of other PRP's. Based upon information currently available, the
Company believes it is unlikely that it will incur substantial additional
costs as a result of failure by other PRP's to satisfy their
responsibilities for remediation costs.
The Company has recorded amounts which, in management's best estimate, will
be sufficient to satisfy anticipated costs of known remediation
requirements. At December 31, 1993, the Company had accrued $298 million
for estimated environmental remediation costs. Expenditures relating to
costs currently accrued are expected to be made over the next 15 to 20
years with the majority to be spent by the year 2000. 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 and it is not possible to predict the amount or timing of future
costs of environmental remediation requirements which may subsequently be
determined. 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 results of operations in a future
period.
NOTE N - OPERATIONAL RESTRUCTURING AND ASSET REVALUATION COSTS
The Company recorded $348.2 million in 1993 and $106.4 million in 1992 in
operational restructuring and asset revaluation costs. These costs
resulted from the Company's estimate of the ultimate realization of the
carrying value of certain assets, liabilities related to the offering of an
early retirement program for certain salaried employees, and the employee
termination and other costs associated with disposal or restructuring of
certain uneconomic operations. The components of these charges are as
follows:
1993 1992
_____________________
Asset revaluation $188.6 $50.5
Early retirement and employee termination costs 116.4 21.2
Other operational restructuring costs 43.2 34.7
_____________________
Total $348.2 $106.4
=====================
NOTE O - CANADIAN REYNOLDS METALS COMPANY, LIMITED
Financial statements and financial statement schedules for Canadian
Reynolds Metals Company, Limited have been omitted because the securities
it has registered under the Securities Act of 1933 (thus subjecting it to
reporting requirements under Section 13 or 15(d) of the Securities Exchange
Act of 1934) are fully and unconditionally guaranteed by Reynolds Metals
Company. Financial information relating to Canadian Reynolds Metals
Company, Limited is presented herein in accordance with Staff Accounting
Bulletin 53 as an addition to the footnotes to the financial statements of
Reynolds Metals Company. Summarized financial information is as follows:
Year ended December 31
__________________________________
1993 1992 1991
__________________________________
Net Sales:
Customers $293.5 $276.8 $282.1
Parent company 377.5 425.5 395.5
__________________________________
671.0 702.3 677.6
Cost of products sold and depreciation 666.4 683.5 698.5
Income (loss) before cumulative effect
of accounting change (35.7) 22.2 (43.7)
Net income (loss) $(35.7) $28.6 $(43.7)
December 31
1993 1992
Current assets $146.9 $139.2
Noncurrent assets 1,056.1 1,094.5
Current liabilities (99.8) (245.8)
Noncurrent liabilities (540.7) (385.9)
<PAGE>
<TABLE>
Quarterly Results of Operations (Unaudited)
(In millions, except per share amounts)
<CAPTION>
1993 1992
____________________________________ ______________________________________
Quarter 1st 2nd 3rd 4th 1st 2nd 3rd 4th
____________________________________ ______________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales $1,230.7 $1,356.0 $1,336.2 $1,346.3 $1,284.2 $1,489.8 $1,472.9 $1,345.7
Taxes on income (credit) (18.4) (12.9) (16.9) (144.8) 4.6 7.9 (1.3) (97.4)
Income (loss) before cumulative
effects of accounting changes (32.7) (22.8) (28.0) (238.6) 5.2 25.0 12.7 (152.1)
Cumulative effects of accounting
changes (639.6)
Net income (loss) $(32.7) $(22.8) $(28.0) $(238.6) $(634.4) $25.0 $12.7 $(152.1)
===================================== ======================================
Earnings per common share
Income (loss) before cumulative
effects of accounting changes $(0.55) $(0.38) $(0.47) $(3.98) $0.09 $0.42 $0.21 $(2.55)
Net income (loss) (0.55) (0.38) (0.47) (3.98) (10.64) 0.42 0.21 (2.55)
<FN>
___________________________
Net income (loss) for 1993 includes a charge of $8.0 million in the third quarter of 1993 to cover the costs of the
temporary curtailment of 88,000 metric tons of primary aluminum production and a charge of $219.5 million in the fourth
quarter of 1993 for operational restructuring and asset revaluation costs. Net income (loss) for 1992 includes charges
for estimated environmental costs and operational restructuring and asset revaluation costs of $21.4 million and $155.0
million in the first quarter and fourth quarter, respectively, and a gain on the sale of an investment of $22.6 million
in the first quarter.
</TABLE>
<PAGE>
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
Stockholders and Board of Directors
Reynolds Metals Company
We have audited the accompanying consolidated balance sheets of
Reynolds Metals Company as of December 31, 1993 and 1992, and the
related consolidated statements of income and retained earnings,
and cash flows for each of the three years in the period ended
December 31, 1993. Our audits also included the financial
statement schedules listed in the Index at Item 14(a). These
financial statements and schedules are the responsibility of the
Company's management. Our responsibility is to express an
opinion on these financial statements and schedules based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of Reynolds Metals Company at December 31,
1993 and 1992, and the consolidated results of its operations and
its cash flows for each of the three years in the period ended
December 31, 1993, in conformity with generally accepted
accounting principles. Also, in our opinion, the related
financial statement schedules, when considered in relation to the
basic financial statements taken as a whole, present fairly in
all material respects the information set forth therein.
As discussed in the notes to the consolidated financial
statements, the Company changed its methods of accounting for
postretirement benefits other than pensions (Note H) and income
taxes (Note I) in 1992.
Ernst & Young
Richmond, Virginia
February 18, 1994
<PAGE>
<PAGE>
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
For information concerning the directors and nominees for
directorship, see the information under the caption "Election of
Directors" in the Registrant's Proxy Statement for the Annual
Meeting of Stockholders to be held on April 20, 1994, which
information is incorporated herein by reference.
Information concerning executive officers of the Registrant is
shown in Part I - Item 4A of this report.
Item 11. EXECUTIVE COMPENSATION
For information required by this item, see the information under
the captions "Election of Directors - Board Compensation and
Benefits", "Election of Directors - Other Compensation", "Report
of Compensation Committee on Executive Compensation",
"Performance Graphs" and "Executive Compensation" in the
Registrant's Proxy Statement for the Annual Meeting of
Stockholders to be held on April 20, 1994, which information is
incorporated herein by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
For information required by this item, see the information under
the caption "Beneficial Ownership of Securities" in the
Registrant's Proxy Statement for the Annual Meeting of
Stockholders to be held on April 20, 1994, which information is
incorporated herein by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
For information required by this item, see the information under
the captions "Election of Directors - Other Compensation" and
"Executive Compensation - Pension Plan Table" in the Registrant's
Proxy Statement for the Annual Meeting of Stockholders to be held
on April 20, 1994, which information is incorporated herein by
reference.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
(a) The consolidated financial statements, financial
statement schedules and exhibits listed below are filed
as a part of this report.
(1) Consolidated Financial Statements: Page
Consolidated statement of income and retained
earnings - Years ended December 31, 1993, 1992
and 1991. 32
Consolidated balance sheet - December 31, 1993
and 1992. 33
Consolidated statement of cash flows - Years
ended December 31, 1993, 1992 and 1991. 34
Notes to consolidated financial statements. 35
Report of Ernst & Young, Independent Auditors. 51
(2) Financial Statement Schedules S-1
Schedule No.
V. Property, plant and equipment
1993
1992
1991
VI. Accumulated depreciation, depletion and
amortization of property, plant and
equipment
1993
1992
1991
IX. Short-term borrowings
1993, 1992, 1991
X. Supplementary income statement information
1993, 1992, 1991
All other schedules for which provision is made in the
applicable accounting regulations of the Securities and
Exchange Commission have been omitted because they are not
required, are inapplicable or the required information has
otherwise been given.
Individual financial statements of Reynolds Metals Company
have been omitted because the restricted net assets (as
defined in Accounting Series Release 302) of all
subsidiaries included in the consolidated financial
statements filed, in the aggregate, do not exceed 25% of
the consolidated net assets shown in the consolidated
balance sheet as of December 31, 1993.
Financial statements of all associated companies (20% to
50% owned) have been omitted because no associated company
is individually significant. Summarized financial
information of all associated companies has been omitted
because associated companies in the aggregate are not
significant.
(3) Exhibits
EXHIBIT 2 - None
* EXHIBIT 3.1 - Restated Certificate of Incorporation, as
amended to the date hereof. (File No.
1-1430, Registration Statement on Form 8-A
dated February 23, 1994, pertaining to
Common Stock and Preferred Stock Purchase
Rights, EXHIBIT 1)
* EXHIBIT 3.2 - By-Laws, as amended to the date hereof.
(File No. 1-1430, Registration Statement
on Form 8-A dated February 23, 1994,
pertaining to Common Stock and Preferred
Stock Purchase Rights, EXHIBIT 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 - $1,100,000,000 Credit Agreement (the
"Credit Agreement") dated as of
November 24, 1987 among Reynolds Metals
Company, Canadian Reynolds Metals Company,
Limited - Societe Canadienne de Metaux
Reynolds, Limitee, the several banks
parties thereto, Manufacturers Hanover
Bank (Delaware), The Bank of Nova Scotia,
Manufacturers Hanover Trust Company, and
Manufacturers Hanover Agent Bank Services
Corporation. (Registration Statement No.
33-20498 on Form S-8, dated March 7, 1988,
EXHIBIT 4.4)
* EXHIBIT 4.6 - Amendment No. 1 dated as of July 1, 1988
to the Credit Agreement. (File No.
1-1430, Form 10-Q Report for the Quarter
Ended June 30, 1988, EXHIBIT 4(e))
* EXHIBIT 4.7 - Amendment No. 2 dated as of February 8,
1989 to the Credit Agreement. (File No.
1-1430, 1988 Form 10-K Report, EXHIBIT
4.6)
* EXHIBIT 4.8 - Amendment No. 3 dated as of August 4, 1989
to the Credit Agreement. (File No.
1-1430, Form 10-Q Report for the Quarter
Ended June 30, 1989, EXHIBIT 4(g))
* EXHIBIT 4.9 - Amendment No. 4 dated as of November 1,
1990 to the Credit Agreement.
(Registration Statement No. 33-38020 on
Form S-3, dated November 30, 1990, EXHIBIT
4.12)
* EXHIBIT 4.10 - 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 4.11 - 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 4.12 - 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 4.13 - Form of Fixed Rate Medium-Term Note.
(Registration Statement No. 33-30882 on
Form S-3, dated August 31, 1989, EXHIBIT
4.3)
* EXHIBIT 4.14 - Form of Floating Rate Medium-Term Note.
(Registration Statement No. 33-30882 on
Form S-3, dated August 31, 1989, EXHIBIT
4.4)
* EXHIBIT 4.15 - Form of Book-Entry Fixed Rate Medium-Term
Note. (File No. 1-1430, 1991 Form 10-K
Report, EXHIBIT 4.15)
* EXHIBIT 4.16 - Form of Book-Entry Floating Rate Medium-
Term Note. (File No. 1-1430, 1991 Form
10-K Report, EXHIBIT 4.16)
* EXHIBIT 4.17 - Form of 9% Debenture due August 15, 2003.
(File No. 1-1430, Form 8-K Report dated
August 16, 1991, Exhibit 4(a))
* EXHIBIT 4.18 - 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 4.19 - 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 4.20 - 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 4.21 - 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 9 - None
#* 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, 1985. (File No.
1-1430, 1985 Form 10-K Report, EXHIBIT
10.3)
#* EXHIBIT 10.5 - Consulting Agreement dated April 16, 1986
between Reynolds Metals Company and
David P. Reynolds. (File No. 1-1430, Form
10-Q Report for the Quarter Ended
March 31, 1986, EXHIBIT 19)
#* EXHIBIT 10.6 - Form of Deferred Compensation Agreement
dated February 17, 1984 between Reynolds
Metals Company and David P. Reynolds.
(File No. 1-1430, 1983 Form 10-K Report,
EXHIBIT 10.9)
#* EXHIBIT 10.7 - Deferred Compensation Agreement dated
May 16, 1986 between Reynolds Metals
Company and David P. Reynolds. (File No.
1-1430, Form 10-Q Report for the Quarter
Ended June 30, 1986, EXHIBIT 19)
#* EXHIBIT 10.8 - 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 10.9 - Supplemental Death Benefit Plan for
Officers. (File No. 1-1430, 1986 Form 10-K
Report, EXHIBIT 10.8)
#* EXHIBIT 10.10 - Financial Counseling Assistance Plan for
Officers. (File No. 1-1430, 1987 Form
10-K Report, EXHIBIT 10.11)
#* EXHIBIT 10.11 - Management Incentive Deferral Plan. (File
No. 1-1430, 1987 Form 10-K Report, EXHIBIT
10.12)
# EXHIBIT 10.12 - Deferred Compensation Plan for Outside
Directors as Amended and Restated
Effective December 1, 1993
#* EXHIBIT 10.13 - Retirement Plan for Outside Directors.
(File No. 1-1430, 1986 Form 10-K Report,
EXHIBIT 10.10)
#* EXHIBIT 10.14 - Death Benefit Plan for Outside Directors.
(File No. 1-1430, 1986 Form 10-K Report,
EXHIBIT 10.11)
#* EXHIBIT 10.15 - Form of Indemnification Agreement for
Directors and Officers. (File No. 1-1430,
Form 8-K Report dated April 29, 1987,
EXHIBIT 28.3)
#* EXHIBIT 10.16 - Form of Executive Severance Agreement
between Reynolds Metals Company and key
executive personnel, including each of the
individuals listed in Item 4A hereof
(other than Messrs. Christino, Jones,
Leahey and Earehart). (File No. 1-1430,
1987 Form 10-K Report, EXHIBIT 10.18)
#* EXHIBIT 10.17 - Renewal dated February 21, 1992 of
Consulting Agreement dated April 16, 1986
between Reynolds Metals Company and
David P. Reynolds. (File No. 1-1430, 1991
Form 10-K Report, EXHIBIT 10.19)
#* EXHIBIT 10.18 - 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 10.19 - 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 10.20 - 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 10.21 - 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 10.22 - 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 10.23 - 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 10.24 - 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 10.25 - 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 10.26 - 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 10.27 - 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 10.28 - Renewal dated February 18, 1994 of
Consulting Agreement dated May 1, 1992
between Reynolds Metals Company and
William O. Bourke
EXHIBIT 11 - Omitted; see Item 8 for computation of
earnings per share
EXHIBIT 12 - Not applicable
EXHIBIT 13 - Not applicable
EXHIBIT 16 - Not applicable
EXHIBIT 18 - None
EXHIBIT 21 - List of Subsidiaries of Reynolds Metals
Company
EXHIBIT 22 - None
EXHIBIT 23 - Consent of Independent Auditors
EXHIBIT 24 - Powers of Attorney
EXHIBIT 27 - Not applicable
EXHIBIT 28 - Not applicable
____________________________
* Incorporated by reference.
# Management contract or compensatory plan or arrangement required to be
filed as an exhibit pursuant to Item 601 of Regulation S-K.
Pursuant to Item 601 of Regulation S-K, certain instruments
with respect to long-term debt of the Company are omitted
because such debt does not exceed 10 percent of the total
assets of the Company and its subsidiaries on a consolidated
basis. The Company agrees to furnish a copy of any such
instrument to the Commission upon request.
(b) Reports on Form 8-K
During the fourth quarter of 1993, the Registrant filed with
the Commission Current Reports on Form 8-K dated (i)
November 23, 1993 reporting that it had filed with the
Commission a Registration Statement on Form S-3 relating to the
offer and resale from time to time by The Chase Manhattan Bank
(National Association), as trustee of the Reynolds Metals
Company Pension Plans Master Trust (the "Master Trust"), of up
to 3,000,000 shares of Common Stock, without par value, of the
Registrant proposed to be issued and contributed from time to
time by the Registrant to one or more of the pension plans the
assets of which are held by the Master Trust; (ii) December 10,
1993 reporting that the Registrant was considering actions to
restructure certain of its operations, principally in the
fabricating area; and (iii) December 30, 1993 reporting that
the Registrant had filed with the Commission pre-effective
Amendment No. 1 to Registration Statement No. 33-51631 on Form
S-3 relating to the public offering of shares of convertible
preferred stock of the Registrant.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 *Richard G. Holder
Richard G. Holder, Chairman of
the Board and Chief Executive
Officer
Date March 15, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
By *Henry S. Savedge, Jr. By *Richard G. Holder
Henry S. Savedge, Jr., Director, Richard G. Holder, Director,
Executive Vice President and Chairman of the Board and Chief
Chief Financial Officer Executive Officer
Date March 15, 1994 Date March 15, 1994
By *William O. Bourke By Yale M. Brandt
William O. Bourke, Director Yale M. Brandt, Director
Date March 15, 1994 Date March 15, 1994
By *Thomas A. Graves, Jr. By *Gerald Greenwald
Thomas A. Graves, Jr., Director Gerald Greenwald, Director
Date March 15, 1994 Date March 15, 1994
By *John R. Hall By *Robert L. Hintz
John R. Hall, Director Robert L. Hintz, Director
Date March 15, 1994 Date March 15, 1994
By *David P. Reynolds By *Randolph N. Reynolds
David P. Reynolds, Director Randolph N. Reynolds, Director
Date March 15, 1994 Date March 15, 1994
By *Charles A. Sanders, M.D. By Jeremiah J. Sheehan
Charles A. Sanders, M.D., Director Jeremiah J. Sheehan, Director
Date March 15, 1994 Date March 15, 1994
By *Ralph S. Thomas By *Robert J. Vlasic
Ralph S. Thomas, Director Robert J. Vlasic, Director
Date March 15, 1994 Date March 15, 1994
By *Joe B. Wyatt By Allen M. Earehart
Joe B. Wyatt, Director Allen M. Earehart, Controller
Date March 15, 1994 Date March 15, 1994
*By D. Michael Jones
D. Michael Jones, Attorney-in-Fact
Date March 15, 1994
<PAGE>
FINANCIAL STATEMENT SCHEDULES
AND OTHER FINANCIAL INFORMATION
YEAR ENDED DECEMBER 31, 1993
REYNOLDS METALS COMPANY
RICHMOND, VIRGINIA
<PAGE>
<TABLE>
REYNOLDS METALS COMPANY AND CONSOLIDATED SUBSIDIARIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT (NOTE A)
Year Ended December 31, 1993
(In millions)
<CAPTION>
___________________________________________________________________________________________________________________
COL. A COL. B COL. C COL. D COL. E COL. F
___________________________________________________________________________________________________________________
Balance at Other Changes - Balance at
Beginning Additions Add (Deduct) - End of
CLASSIFICATION of Period at Cost Retirements Describe Period
___________________________________________________________________________________________________________________
<S> <C>
Land, land improvements and mineral properties $302.8
Buildings and leasehold improvements 993.0
Machinery and equipment 4,587.0
Construction in progress 210.3
_________
$6,093.1
=========
<FN>
________________________
(A) The information required by Columns B, C, D and E has been omitted as neither the total additions ($384.6) nor the total
retirements ($112.2) during the year amounted to more than 10% of the December 31, 1993 balance. Information concerning
significant additions and retirements is provided under the caption "Investing Activities" in Item 7, Management's
Discussion and Analysis of Financial Condition and Results of Operations.
</TABLE>
<TABLE>
REYNOLDS METALS COMPANY AND CONSOLIDATED SUBSIDIARIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT (NOTE A)
Year Ended December 31, 1992
(In millions)
<CAPTION>
__________________________________________________________________________________________________________________
COL. A COL. B COL. C COL. D COL. E COL. F
__________________________________________________________________________________________________________________
Balance at Other Changes - Balance at
Beginning Additions Add (Deduct) - End of
CLASSIFICATION of Period at Cost Retirements Describe Period
__________________________________________________________________________________________________________________
<S> <C>
Land, land improvements and mineral properties $287.8
Buildings and leasehold improvements 988.3
Machinery and equipment 4,417.3
Construction in progress 183.3
Funds designated for capital expenditures 25.6
________
$5,902.3
========
<FN>
________________________
(A) The information required by Columns B, C, D and E has been omitted as neither the total additions
($302.2) nor the total retirements ($185.3) during the year amounted to more than 10% of the
December 31, 1992 balance. Information concerning significant additions and retirements is
provided under the caption "Investing Activities" in Item 7, Management's Discussion and Analysis
of Financial Condition and Results of Operations.
</TABLE>
<TABLE>
REYNOLDS METALS COMPANY AND CONSOLIDATED SUBSIDIARIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT (NOTE A)
Year Ended December 31, 1991
(In millions)
<CAPTION>
__________________________________________________________________________________________________________________
COL. A COL. B COL. C COL. D COL. E COL. F
__________________________________________________________________________________________________________________
Balance at Other Changes - Balance at
Beginning Additions Add (Deduct) - End of
CLASSIFICATION of Period at Cost Retirements Describe Period
__________________________________________________________________________________________________________________
<S> <C>
Land, land improvements and mineral properties $297.2
Buildings and leasehold improvements 987.3
Machinery and equipment 4,301.3
Construction in progress 199.4
Funds designated for capital expenditures 3.7
__________
$5,788.9
==========
<FN>
______________________
(A) The information required by Columns B, C, D and E has been omitted as neither the total additions ($411.0) nor
the total retirements ($99.4) during the year amounted to more than 10% of the December 31, 1991 balance.
Information concerning significant additions and retirements is provided under the caption "Investing
Activities" in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations.
</TABLE>
<TABLE>
REYNOLDS METALS COMPANY AND CONSOLIDATED SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
Year Ended December 31, 1993
(In millions)
<CAPTION>
____________________________________________________________________________________________________________________________
COL. A COL. B COL. C COL. D COL. E COL. F
____________________________________________________________________________________________________________________________
Additions Charged
Balance at to Costs and Other Changes - Balance at
Beginning Expenses Add (Deduct) - End of
DESCRIPTION of Period (Note A) Retirements Describe Period
____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Land, land improvements and mineral properties $106.8 $7.6 $(1.5) $(0.2) $112.7
Buildings and leasehold improvements 343.1 27.6 (7.8) (4.2) 358.7
Machinery and equipment 2,212.0 251.8 (77.5) (11.8) 2,374.5
Operational restructuring and asset revaluation costs 30.2 135.8 166.0
______________________________________________________________________
$2,692.1 $287.0 $(86.8) $119.6 $3,011.9
======================================================================
<FN>
___________________________
(A) Depreciation is provided by the straight-line method over the estimated useful lives of the assets. The assets have
lives that vary, resulting in numerous annual rates for each classification.
</TABLE>
<TABLE>
REYNOLDS METALS COMPANY AND CONSOLIDATED SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
Year Ended December 31, 1992
(In millions)
<CAPTION>
____________________________________________________________________________________________________________________________
COL. A COL. B COL. C COL. D COL. E COL. F
____________________________________________________________________________________________________________________________
Additions Charged
Balance at to Costs and Other Changes - Balance at
Beginning Expenses Add (Deduct) - End of
DESCRIPTION of Period (Note A) Retirements Describe Period
____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Land, land improvements and mineral properties $110.2 $7.4 $(1.4) $(9.4) $106.8
Buildings and leasehold improvements 328.8 27.4 (9.7) (3.4) 343.1
Machinery and equipment 2,065.9 249.2 (112.3) 9.2 2,212.0
Operational restructuring and asset revaluation costs 29.9 0.3 30.2
______________________________________________________________________
$2,534.8 $284.0 $(123.4) $(3.3) $2,692.1
======================================================================
<FN>
___________________________
(A) Depreciation is provided by the straight-line method over the estimated useful lives of the assets. The assets have
lives that vary, resulting in numerous annual rates for each classification.
</TABLE>
<TABLE>
REYNOLDS METALS COMPANY AND CONSOLIDATED SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
Year Ended December 31, 1991
(In millions)
<CAPTION>
____________________________________________________________________________________________________________________________
COL. A COL. B COL. C COL. D COL. E COL. F
____________________________________________________________________________________________________________________________
Additions Charged
Balance at to Costs and Other Changes - Balance at
Beginning Expenses Add (Deduct) - End of
DESCRIPTION of Period (Note A) Retirements Describe Period
____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Land, land improvements and mineral properties $104.6 $8.0 $(2.1) $(0.3) $110.2
Buildings and leasehold improvements 304.0 27.7 (1.0) (1.9) 328.8
Machinery and equipment 1,920.1 229.4 (68.3) (15.3) 2,065.9
Operational restructuring and asset revaluation costs 50.2 (20.3) 29.9
______________________________________________________________________
$2,378.9 $265.1 $(71.4) $(37.8) $2,534.8
======================================================================
<FN>
___________________________
(A) Depreciation is provided by the straight-line method over the estimated useful lives of the assets. The assets have
lives that vary, resulting in numerous annual rates for each classification.
</TABLE>
<TABLE> REYNOLDS METALS COMPANY AND CONSOLIDATED SUBSIDIARIES
SCHEDULE IX - SHORT-TERM BORROWINGS
Years Ended December 31
(In millions)
<CAPTION>
_____________________________________________________________________________________________________________________________
COL. A COL. B COL. C COL. D COL. E COL. F
_____________________________________________________________________________________________________________________________
Balance at Weighted Maximum Amount Average Amount Weighted Average
CATEGORY OF AGGREGATE End of Average Outstanding During Outstanding During Interest Rate
SHORT-TERM BORROWINGS (A) Period Interest Rate the Period the Period (B) During the Period (C)
<S> <C> <C> <C> <C> <C>
1993
Payable to banks $143.4 7.5% $294.5 $194.1 9.1%
Commercial paper 15.0 3.4% 63.7 27.7 3.3%
________
$158.4
========
1992
Payable to banks $191.2 8.6% $222.6 $190.1 9.2%
Commercial paper 0.0 N/A 76.6 37.1 3.9%
________
$191.2
========
1991
Payable to banks $169.9 7.4% $169.9 $130.2 9.6%
<FN>
_______________________
(A) Short-term borrowings from banks represent borrowings under arrangements which have no termination date but are
reviewed annually for renewal. Payable to banks and commercial paper excludes amounts classified as noncurrent.
(B) Average of month-end balances.
(C) Interest incurred divided by weighted average amount outstanding during the period.
</TABLE>
<TABLE>
REYNOLDS METALS COMPANY AND CONSOLIDATED SUBSIDIARIES
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
Years Ended December 31
(In millions)
<CAPTION>
_____________________________________________________________________________________
COL. A COL. B
_____________________________________________________________________________________
Charged to Costs
ITEM and Expenses
_____________________________________________________________________________________
1993 1992 1991
<S> <C> <C> <C>
Maintenance and repairs $411.8 $410.0 $403.5
===========================================
Taxes, other than payroll and income $62.9 $67.1 $61.2
===========================================
</TABLE>
<PAGE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
TO
FORM 10-K
For the fiscal year ended December 31, 1993
Commission File No. 1-1430
REYNOLDS METALS COMPANY
Attached herewith are Exhibits 10.12, 10.28, 23 and 24
INDEX
Sequential
Page No.
___________
EXHIBIT 2 - None
*EXHIBIT 3.1 - Restated Certificate of Incorporation, as
amended to the date hereof. (File
No. 1-1430, Registration Statement on
Form 8-A dated February 23, 1994,
pertaining to Common Stock and Preferred
Stock Purchase Rights, EXHIBIT 1)
*EXHIBIT 3.2 - By-Laws, as amended to the date hereof.
(File No. 1-1430, Registration Statement on
Form 8-A dated February 23, 1994, pertaining
to Common Stock and Preferred Stock Purchase
Rights, EXHIBIT 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 - $1,100,000,000 Credit Agreement (the
"Credit Agreement") dated as of November 24,
1987 among Reynolds Metals Company,
Canadian Reynolds Metals Company, Limited -
Societe Canadienne de Metaux Reynolds,
Limitee, the several banks parties thereto,
Manufacturers Hanover Bank (Delaware),
The Bank of Nova Scotia, Manufacturers
Hanover Trust Company, and Manufacturers
Hanover Agent Bank Services Corporation.
(Registration Statement No. 33-20498 on
Form S-8, dated March 7, 1988, EXHIBIT 4.4)
*EXHIBIT 4.6 - Amendment No. 1 dated as of July 1, 1988
to the Credit Agreement. (File No. 1-1430,
Form 10-Q Report for the Quarter Ended
June 30, 1988, EXHIBIT 4(e))
*EXHIBIT 4.7 - Amendment No. 2 dated as of February 8,
1989 to the Credit Agreement. (File No.
1-1430, 1988 Form 10-K Report, EXHIBIT 4.6)
*EXHIBIT 4.8 - Amendment No. 3 dated as of August 4, 1989
to the Credit Agreement. (File No. 1-1430,
Form 10-Q Report for the Quarter Ended
June 30, 1989, EXHIBIT 4(g))
*EXHIBIT 4.9 - Amendment No. 4 dated as of November 1,
1990 to the Credit Agreement. (Registration
Statement No. 33-38020 on Form S-3, dated
November 30, 1990, EXHIBIT 4.12)
*EXHIBIT 4.10 - 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 4.11 - 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 4.12 - 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 4.13 - Form of Fixed Rate Medium-Term Note.
(Registration Statement No. 33-30882 on
Form S-3, dated August 31, 1989,
EXHIBIT 4.3)
*EXHIBIT 4.14 - Form of Floating Rate Medium-Term Note.
(Registration Statement No. 33-30882 on
Form S-3, dated August 31, 1989,
EXHIBIT 4.4)
*EXHIBIT 4.15 - Form of Book-Entry Fixed Rate Medium-Term
Note. (File No. 1-1430, 1991 Form 10-K
Report, EXHIBIT 4.15)
*EXHIBIT 4.16 - Form of Book-Entry Floating Rate Medium-
Term Note. (File No. 1-1430, 1991 Form
10-K Report, EXHIBIT 4.16)
*EXHIBIT 4.17 - Form of 9% Debenture due August 15, 2003.
(File No. 1-1430, Form 8-K Report dated
August 16, 1991, Exhibit 4(a))
*EXHIBIT 4.18 - 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 4.19 - 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 4.20 - 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 4.21 - 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 9 - None
*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, 1985. (File No.
1-1430, 1985 Form 10-K Report, EXHIBIT 10.3)
*EXHIBIT 10.5 - Consulting Agreement dated April 16, 1986
between Reynolds Metals Company and
David P. Reynolds. (File No. 1-1430,
Form 10-Q Report for the Quarter Ended
March 31, 1986, EXHIBIT 19)
*EXHIBIT 10.6 - Form of Deferred Compensation Agreement
dated February 17, 1984 between Reynolds
Metals Company and David P. Reynolds.
(File No. 1-1430, 1983 Form 10-K Report,
EXHIBIT 10.9)
*EXHIBIT 10.7 - Deferred Compensation Agreement dated
May 16, 1986 between Reynolds Metals
Company and David P. Reynolds.
(File No. 1-1430, Form 10-Q Report for
the Quarter Ended June 30, 1986, EXHIBIT 19)
*EXHIBIT 10.8 - 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 10.9 - Supplemental Death Benefit Plan for Officers.
(File No. 1-1430, 1986 Form 10-K Report,
EXHIBIT 10.8)
*EXHIBIT 10.10 - Financial Counseling Assistance Plan for
Officers. (File No. 1-1430, 1987 Form 10-K
Report, EXHIBIT 10.11)
*EXHIBIT 10.11 - Management Incentive Deferral Plan.
(File No. 1-1430, 1987 Form 10-K Report,
EXHIBIT 10.12)
EXHIBIT 10.12 - Deferred Compensation Plan for Outside ------
Directors as Amended and Restated
Effective December 1, 1993
*EXHIBIT 10.13 - Retirement Plan for Outside Directors.
(File No. 1-1430, 1986 Form 10-K Report,
EXHIBIT 10.10)
*EXHIBIT 10.14 - Death Benefit Plan for Outside Directors.
(File No. 1-1430, 1986 Form 10-K Report,
EXHIBIT 10.11)
*EXHIBIT 10.15 - Form of Indemnification Agreement for
Directors and Officers. (File No. 1-1430,
Form 8-K Report dated April 29, 1987,
EXHIBIT 28.3)
*EXHIBIT 10.16 - Form of Executive Severance Agreement
between Reynolds Metals Company and key
executive personnel, including each of the
individuals listed in Item 4A hereof
(other than Messrs. Christino, Jones,
Leahey and Earehart). (File No. 1-1430,
1987 Form 10-K Report, EXHIBIT 10.18)
*EXHIBIT 10.17 - Renewal dated February 21, 1992 of
Consulting Agreement dated April 16,
1986 between Reynolds Metals Company
and David P. Reynolds. (File No. 1-
1430, 1991 Form 10-K Report, EXHIBIT
10.19)
*EXHIBIT 10.18 - 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 10.19 - 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 10.20 - 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 10.21 - 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 10.22 - 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 10.23 - 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 10.24 - 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 10.25 - 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 10.26 - 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 10.27 - 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 10.28 - Renewal dated February 18, 1994 of ______
Consulting Agreement dated May 1,
1992 between Reynolds Metals Company
and William O. Bourke
EXHIBIT 11 - Omitted; see Item 8 for computation
of earnings per share
EXHIBIT 12 - Not applicable
EXHIBIT 13 - Not applicable
EXHIBIT 16 - Not applicable
EXHIBIT 18 - None
EXHIBIT 21 - List of Subsidiaries of Reynolds
Metals Company
EXHIBIT 22 - None
EXHIBIT 23 - Consent of Independent Auditors ______
EXHIBIT 24 - Powers of Attorney ______
EXHIBIT 27 - Not applicable
EXHIBIT 28 - Not applicable
____________________________
* Incorporated by reference.
EXHIBIT 10.12
REYNOLDS METALS COMPANY
DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS
As Amended and Restated
Effective December 1, 1993
<PAGE>
ARTICLE I
PURPOSE OF THE PLAN
The purpose of the Plan is to assist the Company in attracting and
retaining qualified individuals to serve as Directors and to assist
Directors in planning for their retirement.
ARTICLE II
DEFINITIONS
2.01 "Beneficiary" shall mean the individual or entity designated
by the Participant to receive any amounts remaining in the Plan upon the
Participant's death. If no such designation is made, or if the designated
individual predeceases the Participant or the entity no longer exists, then
the Beneficiary shall be the Participant's estate.
2.02 "Company" shall mean Reynolds Metals Company, a Delaware
corporation.
2.03 "Company Stock" shall mean the Common Stock of the Company,
without par value.
2.04 "Current Compensation" shall mean that portion of Director
Compensation which the Participant elects to accept immediately in return
for services performed for the Company.
2.05 "Deferred Compensation" shall mean that portion of Director
Compensation which the Participant elects to defer in the manner provided
for herein, until the time or times selected for payment in accordance with
Section 4.02.
2.06 "Deferral Termination Date" shall mean one of the following
dates, as elected by the Participant: (a) the date on which the Participant
ceases to be a member of the Board of Directors of the Company, (b) the
date of the Participant's seventieth (70th) birthday, or (c) the last day
of such specified year as the Participant shall elect.
2.07 "Director" shall mean a member of the Board of Directors of
the Company who is not an employee of the Company or of one of its
subsidiaries.
2.08 "Director Compensation" shall mean all compensation received
for services on and after January l, 1987, as a member of the Board of
Directors of the Company, as Chairman of the Board, and as chairman or a
member of a committee of the Board, including retainers and meeting fees
duly authorized by the Board of Directors, but shall not include payments
made in reimbursement of travel and other out-of-pocket expenses.
2.09 "Effective Date" shall mean December l, 1986.
2.10 "Participant" shall mean a Director who submits a written
request pursuant to the terms of this Plan for deferral of Director
Compensation.
2.11 "Plan" shall mean this Reynolds Metals Company Deferred
Compensation Plan for Outside Directors.
2.12 "Plan Committee" shall mean the committee appointed by the
Chief Executive Officer of the Company to administer the Plan.
ARTICLE III
ELECTIONS TO DEFER DIRECTOR COMPENSATION
3.01 Before the start of each calendar year during the term of
the Plan, each Director, whether or not then a Participant, shall have the
right to elect to defer the receipt of 25%, 50%, 75% or 100% of Director
Compensation to be earned by such Director in respect of such calendar
year. At the time of such election, the Director shall also elect with
respect to such Deferred Compensation:
(a) The Deferral Termination Date, as provided in Section 2.06;
provided, however, that if the Participant elects Additional
Compensation in the form of Stock Equivalent Additional Compensation
as provided in Section 4.01(b), the Deferral Termination Date must be
the date described in Section 2.06(a);
(b) The form of Additional Compensation, as provided in Section
4.01; and
(c) The method of payment, as provided in Section
4.02.
3.02 An individual who becomes a Director after the
beginning of a calendar year may make the elections referred to
in Section 3.01 with respect to any Director Compensation to be
earned in respect of the remaining portion of such calendar year.
Any such election must be made within forty-five (45) days of the
date the Director first becomes eligible hereunder.
3.03 An election made under Section 3.01 or 3.02 shall
be irrevocable as to the Director Compensation to which such
election applies, except as otherwise provided herein.
ARTICLE IV
PAYMENT OF DEFERRED COMPENSATION
4.01 Deferred Compensation shall be paid in cash
following the applicable Deferral Termination Date in accordance
with the provisions of Section 4.02. There shall be added to all
Deferred Compensation payments an amount of additional
compensation (hereinafter referred to as "Additional
Compensation") computed under subsection (a) or (b) below, as
elected by the Participant with regard to the Deferred
Compensation being paid:
(a) "Interest Equivalent Additional Compensation"
shall be computed at a specified rate and compounded semi-
annually on June 30th and December 31st from the date the
compensation would have been paid if it were Current
Compensation to the date of payment. Interest Equivalent
Additional Compensation shall be computed as follows:
(i) For Director Compensation deferred on and
after January 1, 1988, the rate at which Interest
Equivalent Additional Compensation is computed shall be
determined pursuant to this subsection (i). Before the
start of each calendar year, and before the elections
referred to in Section 3.01 are made with regard to
Director Compensation to be earned in respect of such
year, the Plan Committee shall determine the rate
applicable to Director Compensation deferred for that
year. This rate shall apply to amounts deferred during
that year until all such amounts are paid out.
(ii) For Director Compensation deferred during
1987, the rate at which Interest Equivalent Additional
Compensation is computed shall continue to be
determined pursuant to the terms of the Plan in effect
on January l, 1987.
(b) "Stock Equivalent Additional Compensation" shall
be computed in accordance with this Section 4.01(b).
(i) As of each date when Director Compensation
would have been paid if it were Current Compensation,
each Participant who elected to receive Stock
Equivalent Additional Compensation shall have his
account under this Plan credited with a number of
equivalent shares of Company Stock determined by
dividing (A) the total dollar amount of such Deferred
Compensation by (B) the arithmetic average of the high
and low sales prices of Company Stock as reported on
New York Stock Exchange - Composite Transactions on
such date. Fractional equivalent shares shall be
calculated to three decimal places.
(ii) As of each date when cash dividends are
paid on Company Stock, each Participant who elected to
receive Stock Equivalent Additional Compensation shall
also have his account under this Plan adjusted to
reflect dividend equivalents computed pursuant to this
subsection (ii). The dollar amount of the dividend
equivalent for each Participant shall equal the cash
dividends that would have been paid on the number of
equivalent shares of Company Stock credited to the
Participant's account as of the dividend record date if
that number of equivalent shares had actually been
issued and outstanding on the record date. This
dividend equivalent for each Participant shall be
converted into a number representing equivalent shares
of Company Stock by dividing (A) the total dollar
amount of the Participant's dividend equivalent by (B)
the arithmetic average of the high and low sales prices
of Company Stock as reported on New York Stock Exchange
- Composite Transactions on the date when the cash
dividends are paid. The Participant's account under
this Plan shall then be credited with the determined
number of equivalent shares of Company Stock, including
fractional shares calculated to three decimal places.
(iii) If any stock dividend is declared upon
Company Stock, or if there is any stock split, stock
distribution, or other recapitalization of the Company
with respect to its Company Stock resulting in a split-
up or combination or exchange of shares, the aggregate
number and kind of equivalent shares of Company Stock
credited to the account of a Participant under the Plan
shall be proportionately adjusted as the Plan Committee
may deem appropriate.
4.02 A Participant's Deferred Compensation and Addi-
tional Compensation shall be paid to such Participant in a single
lump sum payment or in annual installments over a period of
between two (2) and ten (10) years, as elected by the
Participant, following the applicable Deferral Termination Date.
Such election as to payment period shall be made by the
Participant at the same time as the election of the Deferral
Termination Date in accordance with Sections 3.01 and 3.02 of
this Plan. The following rules shall apply to payments under
this Section 4.02:
(a) If Interest Equivalent Additional Compensation is
being paid on the Deferred Compensation, lump sum payments
shall be paid as soon as administratively feasible following
the year in which the Deferral Termination Date occurs.
Annual installments shall consist of equal amounts of
Deferred Compensation, and, together with the Interest
Equivalent Additional Compensation applicable thereto, shall
be paid as soon as administratively feasible in each
calendar year following the year in which the Deferral
Termination Date occurs. For purposes of this Plan, the
Interest Equivalent Additional Compensation applicable to
any installment payment shall equal (i) the total amount of
Interest Equivalent Additional Compensation then accrued and
applicable to the total Deferred Compensation being paid in
installments, divided by (ii) the number of installment
payments remaining, including the installment about to be
paid.
(b) If Stock Equivalent Additional Compensation is
being paid on the Deferred Compensation, the amount of a
lump sum payment shall be equal to (i) the total number of
equivalent shares of Company Stock credited to the
Participant's account under this Plan as of the last day on
which the New York Stock Exchange, Inc. is open in the year
the Deferral Termination Date occurs, multiplied by (ii) the
closing sales price of Company Stock as reported on New York
Stock Exchange - Composite Transactions on such date. This
lump sum payment shall be paid as soon as administratively
feasible following the end of the year. If annual
installments are elected instead of a lump sum, the amount
of the installment payment to be made in a calendar year
shall be computed by taking (y) the amount that would have
been payable after the end of the preceding year had the
entire amount remaining as of the end of such year been paid
as a single lump sum, divided by (z) the number of
installment payments remaining, including the installment
about to be paid. Annual installments shall be paid as soon
as administratively feasible in each calendar year following
the year in which the Deferral Termination Date occurs.
4.03 Payments in Case of Death. In the event of a
Participant's death, the remaining unpaid portion of such
Participant's Deferred Compensation and Additional Compensation
shall be accelerated and paid to the Participant's Beneficiary as
soon as practicable after the Participant's death.
4.04 Acceleration of Payments.
(a) Subject to the provisions of Section 4.04(d),
upon receipt of a written request from a Participant or a
Participant's legal representative, if the Participant is not
competent to manage his affairs, the Plan Committee may direct
that all or any part of the undelivered portion of Deferred
Compensation (together with the Additional Compensation
applicable thereto) be accelerated and paid in a lump sum if it
finds, in its sole discretion, that continued deferral of such
Deferred Compensation will cause such Participant severe
financial hardship.
(b) Subject to the provisions of Section 4.04(d), the
Plan Committee may direct that all unpaid Deferred Compensation
(together with the Additional Compensation applicable thereto) be
accelerated and paid in a lump sum if it finds, in its sole
discretion, that a major challenge to the control of the Company
exists.
(c) Subsections (a) and (b) above shall apply both to
Director Compensation deferred in previous years and to Director
Compensation being deferred during the year in which the
acceleration of payments is approved, except that no Deferred
Compensation shall be paid out prior to the date such Deferred
Compensation would be payable if it were Current Compensation.
(d) Anything herein to the contrary notwithstanding,
the Plan Committee shall not accelerate any payment of Deferred
Compensation with respect to which Stock Equivalent Additional
Compensation is to be paid unless the Plan Committee determines
that such accelerated payments comply with Rule 16a-l(c)(3) under
Section 16 of the Securities Exchange Act of 1934.
ARTICLE V
ADMINISTRATION
The Plan Committee shall have full responsibility and
authority to interpret and administer the Plan, including the
power to promulgate rules of Plan administration, the power to
settle any disputes as to rights or benefits arising from the
Plan, the power to appoint agents and delegate its duties, and
the power to make such decisions or take such actions as the Plan
Committee, in its sole discretion, deems necessary or advisable
to aid in the proper administration of the Plan. Actions and
determinations by the Plan Committee shall be final, binding and
conclusive for all purposes of this Plan.
ARTICLE VI
AMENDMENT, SUSPENSION AND TERMINATION OF THE PLAN
The Board of Directors of the Company may from time to
time amend, suspend or terminate the Plan, in whole or in part,
except that no such amendment, suspension or termination shall
materially adversely affect the rights of any Participant in
respect of Deferred Compensation previously earned by such
Participant and not yet paid.
ARTICLE VII
FUNDING
No promises under this Plan shall be secured by any
specific assets of the Company, nor shall any assets of the
Company be designated as attributable or allocated to the
satisfaction of such promises. Benefit payments shall be made
from the Company's general assets.
ARTICLE VIII
GENERAL PROVISIONS
8.01 All elections by a Participant hereunder shall be
made in writing by the completion and delivery to the Company of
forms prescribed for such purpose within the time limits set
forth herein with respect to such election. In the event the
federal income tax treatment of deferred compensation is
unfavorably changed or interpreted, the Plan Committee may, in
its sole discretion, authorize Participants to change their
elections; provided, however, that the Plan Committee shall not
allow Participants to change their elections regarding any
Deferred Compensation with respect to which Stock Equivalent
Additional Compensation is to be paid unless the Plan Committee
determines that such change of elections complies with Rule 16a-
1(c)(3) under Section 16 of the Securities Exchange Act of 1934.
8.02 Neither the establishment of the Plan nor the
payment of any benefits hereunder nor any action of the Company,
including its Board of Directors, in connection therewith shall
be held or construed to confer upon any individual any legal
right to remain on the Board of Directors of the Company.
8.03 No benefit under the Plan shall be subject in any
manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge, except by will or the laws of
descent and distribution, and any attempt thereat shall be void.
No such benefit shall, prior to receipt thereof, be in any manner
liable for or subject to the recipient's debts, contracts,
liabilities, engagements, or torts.
8.04 This Plan shall inure to the benefit of, and be
binding upon, the Company and each Participant, and upon the
successors and assigns of the Company and of each Participant.
8.05 The Company shall deduct from the amount of any
payments hereunder all taxes required to be withheld by
applicable laws.
8.06 This Plan shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Virginia.
<PAGE>
Executed and adopted this 21st day of December, 1993,
pursuant to action taken by the Executive Committee of the Board
of Directors of Reynolds Metals Company at its meeting on
December 2, 1993.
REYNOLDS METALS COMPANY
By Donald T. Cowles
Title Executive Vice President,
Human Resources and
External Affairs
EXHIBIT 10.28
February 18, 1994
Mr. William O. Bourke
Round Hill
P. O. Box 169, Rt. 743
Earlysville, Virginia 22936
RE: Renewal of Consulting Contract
Dear Bill:
The Consulting Agreement dated May 1, 1992 between you and
Reynolds Metals Company will expire on April 30, 1994.
This will confirm that Reynolds wishes to renew the 1992
Consulting Agreement for an additional three year period, that is, through
April 30, 1997. All the other terms and conditions of the 1992 Consulting
Agreement will therefore remain in full force and effect through April 30,
1997.
If the renewal of the 1992 Consulting Agreement as set forth in
this letter is acceptable to you, please sign and return the enclosed copy
of this letter.
Very truly yours,
Dick
Richard G. Holder
ACCEPTED:
William O. Bourke
Date: 2/17/94
EXHIBIT 23
CONSENT OF ERNST & YOUNG, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the:
1. Registration Statement (Form S-8 No. 2-76789) pertaining to the
Reynolds Metals Company 1982 Nonqualified Stock Option Plan;
2. Registration Statement (Form S-8 No. 33-13822) pertaining to the
Reynolds Metals Company 1987 Nonqualified Stock Option Plan;
3. Registration Statement (Form S-8 No. 33-44400) pertaining to the
Reynolds Metals Company 1992 Nonqualified Stock Option Plan;
4. Registration Statement (Form S-8 No. 33-20498) pertaining to the
Reynolds Metals Company Savings and Investment Plan for Salaried
Employees;
5. Registration Statement (Form S-3 No. 33-43443) pertaining to the shelf
registration of debt securities of Reynolds Metals Company;
6. Registration Statement (Form S-8 No. 33-66032) pertaining to the
Reynolds Metals Company Savings Plan for Hourly Employees; and
7. Registration Statement (Form S-3 No. 33-51153) pertaining to the offer
and resale of shares of Reynolds Metals Company Common Stock by the
Trustee of the Reynolds Metals Company Pension Plans Master Trust
and in the related prospectuses of our report dated February 18, 1994, with
respect to the consolidated financial statements and schedules of Reynolds
Metals Company included in this Annual Report (Form 10-K) for the year
ended December 31, 1993.
ERNST & YOUNG
Richmond, Virginia
March 10, 1994
F:\BFH\SEC\10K\EX-23
EXHIBIT 24
1. Powers of Attorney from the following persons are attached:
Richard G. Holder
Henry S. Savedge, Jr.
William O. Bourke
Thomas A. Graves, Jr.
Gerald Greenwald
John R. Hall
Robert L. Hintz
David P. Reynolds
Randolph N. Reynolds
Charles A. Sanders
Ralph S. Thomas
Robert J. Vlasic
Joe B. Wyatt
2. A certified copy of resolutions adopted by the Board of Directors of
Reynolds Metals Company on February 18, 1994 is attached.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead,
in any and all capacities (including without limitation in any capacity on
behalf of Reynolds Metals Company (the "Company")), to
(i) Sign the Annual Report on Form 10-K of the Company for the
year ended December 31, 1993 and any and all amendments thereto, and
to file the same, with all exhibits thereto, and all documents in
connection therewith, if any, with the Securities and Exchange
Commission (the "SEC"), and to take all such other action which they
or either of them may consider necessary or desirable in connection
therewith, all in accordance with the Securities Exchange Act of 1934,
as amended; and
(ii) Sign any and all post-effective amendments to the Company's
Registration Statements relating to (a) the offer and sale of
interests in the Reynolds Metals Company Savings and Investment Plan
for Salaried Employees and an indefinite number of shares of the
Company's common stock, without par value (the "Common Stock") in
connection therewith, (b) the offer and sale of up to 900,000 shares
of Common Stock together with an indeterminate amount of interests to
be offered and sold in connection therewith under the Reynolds Metals
Company Savings Plan for Hourly Employees, (c) the offer and sale of
1,200,000 shares of Common Stock under the Reynolds Metals Company
1982 Nonqualified Stock Option Plan, (d) the offer and sale of
3,000,000 shares of Common Stock under the Reynolds Metals Company
1987 Nonqualified Stock Option Plan, and (e) the offer and sale of
3,250,000 shares of Common Stock under the Reynolds Metals Company
1992 Nonqualified Stock Option Plan, and to file the same, with all
exhibits thereto, and all documents in connection therewith, with the
SEC; and
(iii) Sign any and all Registration Statements on Form S-3, or on
such other form as may be appropriate, for registration of the shares
of Common Stock and Series A Junior Participating Preferred Stock
(without par value) of the Company, issuable upon exercise of Rights
(as defined in the Rights Agreement between the Company and The Chase
Manhattan Bank, N.A., dated as of November 23, 1987, as amended from
time to time) and any and all amendments (including post-effective
amendments) to such Registration Statements, and to file the same,
with all exhibits thereto, and all preliminary prospectuses,
prospectuses, prospectus supplements and documents in connection
therewith, with the SEC; and
(iv) Sign any and all post-effective amendments to the Company's
Registration Statements relating to the offer and sale of up to
$1,650,000,000 principal amount of unsecured debt securities of the
Company, and to file the same, with all exhibits thereto, and all
prospectuses, prospectus supplements, pricing supplements and
documents in connection therewith, with the SEC; and
(v) Sign any and all post-effective amendments to the Company's
Registration Statement relating to the offer and resale from time to
time of up to 3,000,000 shares of Common Stock by the Trustee of the
Reynolds Metals Company Pension Plans Master Trust, and to file the
same, with all exhibits thereto, and all prospectuses, prospectus
supplements, pricing supplements and documents in connection
therewith, with the SEC;
granting unto each of said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and confirming
all that each of said attorneys-in-fact and agents, or his or her
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
This Power of Attorney shall expire on the 28th day of February,
1995.
IN WITNESS WHEREOF, the undersigned has executed and delivered
this Power of Attorney on the 18th day of February, 1994.
Richard G. Holder
Richard G. Holder
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead,
in any and all capacities (including without limitation in any capacity on
behalf of Reynolds Metals Company (the "Company")), to
(i) Sign the Annual Report on Form 10-K of the Company for the
year ended December 31, 1993 and any and all amendments thereto, and
to file the same, with all exhibits thereto, and all documents in
connection therewith, if any, with the Securities and Exchange
Commission (the "SEC"), and to take all such other action which they
or either of them may consider necessary or desirable in connection
therewith, all in accordance with the Securities Exchange Act of 1934,
as amended; and
(ii) Sign any and all post-effective amendments to the Company's
Registration Statements relating to (a) the offer and sale of
interests in the Reynolds Metals Company Savings and Investment Plan
for Salaried Employees and an indefinite number of shares of the
Company's common stock, without par value (the "Common Stock") in
connection therewith, (b) the offer and sale of up to 900,000 shares
of Common Stock together with an indeterminate amount of interests to
be offered and sold in connection therewith under the Reynolds Metals
Company Savings Plan for Hourly Employees, (c) the offer and sale of
1,200,000 shares of Common Stock under the Reynolds Metals Company
1982 Nonqualified Stock Option Plan, (d) the offer and sale of
3,000,000 shares of Common Stock under the Reynolds Metals Company
1987 Nonqualified Stock Option Plan, and (e) the offer and sale of
3,250,000 shares of Common Stock under the Reynolds Metals Company
1992 Nonqualified Stock Option Plan, and to file the same, with all
exhibits thereto, and all documents in connection therewith, with the
SEC; and
(iii) Sign any and all Registration Statements on Form S-3, or on
such other form as may be appropriate, for registration of the shares
of Common Stock and Series A Junior Participating Preferred Stock
(without par value) of the Company, issuable upon exercise of Rights
(as defined in the Rights Agreement between the Company and The Chase
Manhattan Bank, N.A., dated as of November 23, 1987, as amended from
time to time) and any and all amendments (including post-effective
amendments) to such Registration Statements, and to file the same,
with all exhibits thereto, and all preliminary prospectuses,
prospectuses, prospectus supplements and documents in connection
therewith, with the SEC; and
(iv) Sign any and all post-effective amendments to the Company's
Registration Statements relating to the offer and sale of up to
$1,650,000,000 principal amount of unsecured debt securities of the
Company, and to file the same, with all exhibits thereto, and all
prospectuses, prospectus supplements, pricing supplements and
documents in connection therewith, with the SEC; and
(v) Sign any and all post-effective amendments to the Company's
Registration Statement relating to the offer and resale from time to
time of up to 3,000,000 shares of Common Stock by the Trustee of the
Reynolds Metals Company Pension Plans Master Trust, and to file the
same, with all exhibits thereto, and all prospectuses, prospectus
supplements, pricing supplements and documents in connection
therewith, with the SEC;
granting unto each of said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and confirming
all that each of said attorneys-in-fact and agents, or his or her
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
This Power of Attorney shall expire on the 28th day of February,
1995.
IN WITNESS WHEREOF, the undersigned has executed and delivered
this Power of Attorney on the 18th day of February, 1994.
Henry S. Savedge, Jr.
Henry S. Savedge, Jr.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead,
in any and all capacities (including without limitation in any capacity on
behalf of Reynolds Metals Company (the "Company")), to
(i) Sign the Annual Report on Form 10-K of the Company for the
year ended December 31, 1993 and any and all amendments thereto, and
to file the same, with all exhibits thereto, and all documents in
connection therewith, if any, with the Securities and Exchange
Commission (the "SEC"), and to take all such other action which they
or either of them may consider necessary or desirable in connection
therewith, all in accordance with the Securities Exchange Act of 1934,
as amended; and
(ii) Sign any and all post-effective amendments to the Company's
Registration Statements relating to (a) the offer and sale of
interests in the Reynolds Metals Company Savings and Investment Plan
for Salaried Employees and an indefinite number of shares of the
Company's common stock, without par value (the "Common Stock") in
connection therewith, (b) the offer and sale of up to 900,000 shares
of Common Stock together with an indeterminate amount of interests to
be offered and sold in connection therewith under the Reynolds Metals
Company Savings Plan for Hourly Employees, (c) the offer and sale of
1,200,000 shares of Common Stock under the Reynolds Metals Company
1982 Nonqualified Stock Option Plan, (d) the offer and sale of
3,000,000 shares of Common Stock under the Reynolds Metals Company
1987 Nonqualified Stock Option Plan, and (e) the offer and sale of
3,250,000 shares of Common Stock under the Reynolds Metals Company
1992 Nonqualified Stock Option Plan, and to file the same, with all
exhibits thereto, and all documents in connection therewith, with the
SEC; and
(iii) Sign any and all Registration Statements on Form S-3, or on
such other form as may be appropriate, for registration of the shares
of Common Stock and Series A Junior Participating Preferred Stock
(without par value) of the Company, issuable upon exercise of Rights
(as defined in the Rights Agreement between the Company and The Chase
Manhattan Bank, N.A., dated as of November 23, 1987, as amended from
time to time) and any and all amendments (including post-effective
amendments) to such Registration Statements, and to file the same,
with all exhibits thereto, and all preliminary prospectuses,
prospectuses, prospectus supplements and documents in connection
therewith, with the SEC; and
(iv) Sign any and all post-effective amendments to the Company's
Registration Statements relating to the offer and sale of up to
$1,650,000,000 principal amount of unsecured debt securities of the
Company, and to file the same, with all exhibits thereto, and all
prospectuses, prospectus supplements, pricing supplements and
documents in connection therewith, with the SEC; and
(v) Sign any and all post-effective amendments to the Company's
Registration Statement relating to the offer and resale from time to
time of up to 3,000,000 shares of Common Stock by the Trustee of the
Reynolds Metals Company Pension Plans Master Trust, and to file the
same, with all exhibits thereto, and all prospectuses, prospectus
supplements, pricing supplements and documents in connection
therewith, with the SEC;
granting unto each of said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and confirming
all that each of said attorneys-in-fact and agents, or his or her
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
This Power of Attorney shall expire on the 28th day of February,
1995.
IN WITNESS WHEREOF, the undersigned has executed and delivered
this Power of Attorney on the 18th day of February, 1994.
William O. Bourke
William O. Bourke
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead,
in any and all capacities (including without limitation in any capacity on
behalf of Reynolds Metals Company (the "Company")), to
(i) Sign the Annual Report on Form 10-K of the Company for the
year ended December 31, 1993 and any and all amendments thereto, and
to file the same, with all exhibits thereto, and all documents in
connection therewith, if any, with the Securities and Exchange
Commission (the "SEC"), and to take all such other action which they
or either of them may consider necessary or desirable in connection
therewith, all in accordance with the Securities Exchange Act of 1934,
as amended; and
(ii) Sign any and all post-effective amendments to the Company's
Registration Statements relating to (a) the offer and sale of
interests in the Reynolds Metals Company Savings and Investment Plan
for Salaried Employees and an indefinite number of shares of the
Company's common stock, without par value (the "Common Stock") in
connection therewith, (b) the offer and sale of up to 900,000 shares
of Common Stock together with an indeterminate amount of interests to
be offered and sold in connection therewith under the Reynolds Metals
Company Savings Plan for Hourly Employees, (c) the offer and sale of
1,200,000 shares of Common Stock under the Reynolds Metals Company
1982 Nonqualified Stock Option Plan, (d) the offer and sale of
3,000,000 shares of Common Stock under the Reynolds Metals Company
1987 Nonqualified Stock Option Plan, and (e) the offer and sale of
3,250,000 shares of Common Stock under the Reynolds Metals Company
1992 Nonqualified Stock Option Plan, and to file the same, with all
exhibits thereto, and all documents in connection therewith, with the
SEC; and
(iii) Sign any and all Registration Statements on Form S-3, or on
such other form as may be appropriate, for registration of the shares
of Common Stock and Series A Junior Participating Preferred Stock
(without par value) of the Company, issuable upon exercise of Rights
(as defined in the Rights Agreement between the Company and The Chase
Manhattan Bank, N.A., dated as of November 23, 1987, as amended from
time to time) and any and all amendments (including post-effective
amendments) to such Registration Statements, and to file the same,
with all exhibits thereto, and all preliminary prospectuses,
prospectuses, prospectus supplements and documents in connection
therewith, with the SEC; and
(iv) Sign any and all post-effective amendments to the Company's
Registration Statements relating to the offer and sale of up to
$1,650,000,000 principal amount of unsecured debt securities of the
Company, and to file the same, with all exhibits thereto, and all
prospectuses, prospectus supplements, pricing supplements and
documents in connection therewith, with the SEC; and
(v) Sign any and all post-effective amendments to the Company's
Registration Statement relating to the offer and resale from time to
time of up to 3,000,000 shares of Common Stock by the Trustee of the
Reynolds Metals Company Pension Plans Master Trust, and to file the
same, with all exhibits thereto, and all prospectuses, prospectus
supplements, pricing supplements and documents in connection
therewith, with the SEC;
granting unto each of said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and confirming
all that each of said attorneys-in-fact and agents, or his or her
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
This Power of Attorney shall expire on the 28th day of February,
1995.
IN WITNESS WHEREOF, the undersigned has executed and delivered
this Power of Attorney on the 18th day of February, 1994.
Thomas A. Graves, Jr.
Thomas A. Graves, Jr.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead,
in any and all capacities (including without limitation in any capacity on
behalf of Reynolds Metals Company (the "Company")), to
(i) Sign the Annual Report on Form 10-K of the Company for the
year ended December 31, 1993 and any and all amendments thereto, and
to file the same, with all exhibits thereto, and all documents in
connection therewith, if any, with the Securities and Exchange
Commission (the "SEC"), and to take all such other action which they
or either of them may consider necessary or desirable in connection
therewith, all in accordance with the Securities Exchange Act of 1934,
as amended; and
(ii) Sign any and all post-effective amendments to the Company's
Registration Statements relating to (a) the offer and sale of
interests in the Reynolds Metals Company Savings and Investment Plan
for Salaried Employees and an indefinite number of shares of the
Company's common stock, without par value (the "Common Stock") in
connection therewith, (b) the offer and sale of up to 900,000 shares
of Common Stock together with an indeterminate amount of interests to
be offered and sold in connection therewith under the Reynolds Metals
Company Savings Plan for Hourly Employees, (c) the offer and sale of
1,200,000 shares of Common Stock under the Reynolds Metals Company
1982 Nonqualified Stock Option Plan, (d) the offer and sale of
3,000,000 shares of Common Stock under the Reynolds Metals Company
1987 Nonqualified Stock Option Plan, and (e) the offer and sale of
3,250,000 shares of Common Stock under the Reynolds Metals Company
1992 Nonqualified Stock Option Plan, and to file the same, with all
exhibits thereto, and all documents in connection therewith, with the
SEC; and
(iii) Sign any and all Registration Statements on Form S-3, or on
such other form as may be appropriate, for registration of the shares
of Common Stock and Series A Junior Participating Preferred Stock
(without par value) of the Company, issuable upon exercise of Rights
(as defined in the Rights Agreement between the Company and The Chase
Manhattan Bank, N.A., dated as of November 23, 1987, as amended from
time to time) and any and all amendments (including post-effective
amendments) to such Registration Statements, and to file the same,
with all exhibits thereto, and all preliminary prospectuses,
prospectuses, prospectus supplements and documents in connection
therewith, with the SEC; and
(iv) Sign any and all post-effective amendments to the Company's
Registration Statements relating to the offer and sale of up to
$1,650,000,000 principal amount of unsecured debt securities of the
Company, and to file the same, with all exhibits thereto, and all
prospectuses, prospectus supplements, pricing supplements and
documents in connection therewith, with the SEC; and
(v) Sign any and all post-effective amendments to the Company's
Registration Statement relating to the offer and resale from time to
time of up to 3,000,000 shares of Common Stock by the Trustee of the
Reynolds Metals Company Pension Plans Master Trust, and to file the
same, with all exhibits thereto, and all prospectuses, prospectus
supplements, pricing supplements and documents in connection
therewith, with the SEC;
granting unto each of said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and confirming
all that each of said attorneys-in-fact and agents, or his or her
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
This Power of Attorney shall expire on the 28th day of February,
1995.
IN WITNESS WHEREOF, the undersigned has executed and delivered
this Power of Attorney on the 18th day of February, 1994.
Gerald Greenwald
Gerald Greenwald
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead,
in any and all capacities (including without limitation in any capacity on
behalf of Reynolds Metals Company (the "Company")), to
(i) Sign the Annual Report on Form 10-K of the Company for the
year ended December 31, 1993 and any and all amendments thereto, and
to file the same, with all exhibits thereto, and all documents in
connection therewith, if any, with the Securities and Exchange
Commission (the "SEC"), and to take all such other action which they
or either of them may consider necessary or desirable in connection
therewith, all in accordance with the Securities Exchange Act of 1934,
as amended; and
(ii) Sign any and all post-effective amendments to the Company's
Registration Statements relating to (a) the offer and sale of
interests in the Reynolds Metals Company Savings and Investment Plan
for Salaried Employees and an indefinite number of shares of the
Company's common stock, without par value (the "Common Stock") in
connection therewith, (b) the offer and sale of up to 900,000 shares
of Common Stock together with an indeterminate amount of interests to
be offered and sold in connection therewith under the Reynolds Metals
Company Savings Plan for Hourly Employees, (c) the offer and sale of
1,200,000 shares of Common Stock under the Reynolds Metals Company
1982 Nonqualified Stock Option Plan, (d) the offer and sale of
3,000,000 shares of Common Stock under the Reynolds Metals Company
1987 Nonqualified Stock Option Plan, and (e) the offer and sale of
3,250,000 shares of Common Stock under the Reynolds Metals Company
1992 Nonqualified Stock Option Plan, and to file the same, with all
exhibits thereto, and all documents in connection therewith, with the
SEC; and
(iii) Sign any and all Registration Statements on Form S-3, or on
such other form as may be appropriate, for registration of the shares
of Common Stock and Series A Junior Participating Preferred Stock
(without par value) of the Company, issuable upon exercise of Rights
(as defined in the Rights Agreement between the Company and The Chase
Manhattan Bank, N.A., dated as of November 23, 1987, as amended from
time to time) and any and all amendments (including post-effective
amendments) to such Registration Statements, and to file the same,
with all exhibits thereto, and all preliminary prospectuses,
prospectuses, prospectus supplements and documents in connection
therewith, with the SEC; and
(iv) Sign any and all post-effective amendments to the Company's
Registration Statements relating to the offer and sale of up to
$1,650,000,000 principal amount of unsecured debt securities of the
Company, and to file the same, with all exhibits thereto, and all
prospectuses, prospectus supplements, pricing supplements and
documents in connection therewith, with the SEC; and
(v) Sign any and all post-effective amendments to the Company's
Registration Statement relating to the offer and resale from time to
time of up to 3,000,000 shares of Common Stock by the Trustee of the
Reynolds Metals Company Pension Plans Master Trust, and to file the
same, with all exhibits thereto, and all prospectuses, prospectus
supplements, pricing supplements and documents in connection
therewith, with the SEC;
granting unto each of said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and confirming
all that each of said attorneys-in-fact and agents, or his or her
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
This Power of Attorney shall expire on the 28th day of February,
1995.
IN WITNESS WHEREOF, the undersigned has executed and delivered
this Power of Attorney on the 18th day of February, 1994.
John R. Hall
John R. Hall
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead,
in any and all capacities (including without limitation in any capacity on
behalf of Reynolds Metals Company (the "Company")), to
(i) Sign the Annual Report on Form 10-K of the Company for the
year ended December 31, 1993 and any and all amendments thereto, and
to file the same, with all exhibits thereto, and all documents in
connection therewith, if any, with the Securities and Exchange
Commission (the "SEC"), and to take all such other action which they
or either of them may consider necessary or desirable in connection
therewith, all in accordance with the Securities Exchange Act of 1934,
as amended; and
(ii) Sign any and all post-effective amendments to the Company's
Registration Statements relating to (a) the offer and sale of
interests in the Reynolds Metals Company Savings and Investment Plan
for Salaried Employees and an indefinite number of shares of the
Company's common stock, without par value (the "Common Stock") in
connection therewith, (b) the offer and sale of up to 900,000 shares
of Common Stock together with an indeterminate amount of interests to
be offered and sold in connection therewith under the Reynolds Metals
Company Savings Plan for Hourly Employees, (c) the offer and sale of
1,200,000 shares of Common Stock under the Reynolds Metals Company
1982 Nonqualified Stock Option Plan, (d) the offer and sale of
3,000,000 shares of Common Stock under the Reynolds Metals Company
1987 Nonqualified Stock Option Plan, and (e) the offer and sale of
3,250,000 shares of Common Stock under the Reynolds Metals Company
1992 Nonqualified Stock Option Plan, and to file the same, with all
exhibits thereto, and all documents in connection therewith, with the
SEC; and
(iii) Sign any and all Registration Statements on Form S-3, or on
such other form as may be appropriate, for registration of the shares
of Common Stock and Series A Junior Participating Preferred Stock
(without par value) of the Company, issuable upon exercise of Rights
(as defined in the Rights Agreement between the Company and The Chase
Manhattan Bank, N.A., dated as of November 23, 1987, as amended from
time to time) and any and all amendments (including post-effective
amendments) to such Registration Statements, and to file the same,
with all exhibits thereto, and all preliminary prospectuses,
prospectuses, prospectus supplements and documents in connection
therewith, with the SEC; and
(iv) Sign any and all post-effective amendments to the Company's
Registration Statements relating to the offer and sale of up to
$1,650,000,000 principal amount of unsecured debt securities of the
Company, and to file the same, with all exhibits thereto, and all
prospectuses, prospectus supplements, pricing supplements and
documents in connection therewith, with the SEC; and
(v) Sign any and all post-effective amendments to the Company's
Registration Statement relating to the offer and resale from time to
time of up to 3,000,000 shares of Common Stock by the Trustee of the
Reynolds Metals Company Pension Plans Master Trust, and to file the
same, with all exhibits thereto, and all prospectuses, prospectus
supplements, pricing supplements and documents in connection
therewith, with the SEC;
granting unto each of said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and confirming
all that each of said attorneys-in-fact and agents, or his or her
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
This Power of Attorney shall expire on the 28th day of February,
1995.
IN WITNESS WHEREOF, the undersigned has executed and delivered
this Power of Attorney on the 18th day of February, 1994.
Robert L. Hintz
Robert L. Hintz
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead,
in any and all capacities (including without limitation in any capacity on
behalf of Reynolds Metals Company (the "Company")), to
(i) Sign the Annual Report on Form 10-K of the Company for the
year ended December 31, 1993 and any and all amendments thereto, and
to file the same, with all exhibits thereto, and all documents in
connection therewith, if any, with the Securities and Exchange
Commission (the "SEC"), and to take all such other action which they
or either of them may consider necessary or desirable in connection
therewith, all in accordance with the Securities Exchange Act of 1934,
as amended; and
(ii) Sign any and all post-effective amendments to the Company's
Registration Statements relating to (a) the offer and sale of
interests in the Reynolds Metals Company Savings and Investment Plan
for Salaried Employees and an indefinite number of shares of the
Company's common stock, without par value (the "Common Stock") in
connection therewith, (b) the offer and sale of up to 900,000 shares
of Common Stock together with an indeterminate amount of interests to
be offered and sold in connection therewith under the Reynolds Metals
Company Savings Plan for Hourly Employees, (c) the offer and sale of
1,200,000 shares of Common Stock under the Reynolds Metals Company
1982 Nonqualified Stock Option Plan, (d) the offer and sale of
3,000,000 shares of Common Stock under the Reynolds Metals Company
1987 Nonqualified Stock Option Plan, and (e) the offer and sale of
3,250,000 shares of Common Stock under the Reynolds Metals Company
1992 Nonqualified Stock Option Plan, and to file the same, with all
exhibits thereto, and all documents in connection therewith, with the
SEC; and
(iii) Sign any and all Registration Statements on Form S-3, or on
such other form as may be appropriate, for registration of the shares
of Common Stock and Series A Junior Participating Preferred Stock
(without par value) of the Company, issuable upon exercise of Rights
(as defined in the Rights Agreement between the Company and The Chase
Manhattan Bank, N.A., dated as of November 23, 1987, as amended from
time to time) and any and all amendments (including post-effective
amendments) to such Registration Statements, and to file the same,
with all exhibits thereto, and all preliminary prospectuses,
prospectuses, prospectus supplements and documents in connection
therewith, with the SEC; and
(iv) Sign any and all post-effective amendments to the Company's
Registration Statements relating to the offer and sale of up to
$1,650,000,000 principal amount of unsecured debt securities of the
Company, and to file the same, with all exhibits thereto, and all
prospectuses, prospectus supplements, pricing supplements and
documents in connection therewith, with the SEC; and
(v) Sign any and all post-effective amendments to the Company's
Registration Statement relating to the offer and resale from time to
time of up to 3,000,000 shares of Common Stock by the Trustee of the
Reynolds Metals Company Pension Plans Master Trust, and to file the
same, with all exhibits thereto, and all prospectuses, prospectus
supplements, pricing supplements and documents in connection
therewith, with the SEC;
granting unto each of said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and confirming
all that each of said attorneys-in-fact and agents, or his or her
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
This Power of Attorney shall expire on the 28th day of February,
1995.
IN WITNESS WHEREOF, the undersigned has executed and delivered
this Power of Attorney on the 18th day of February, 1994.
David P. Reynolds
David P. Reynolds
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead,
in any and all capacities (including without limitation in any capacity on
behalf of Reynolds Metals Company (the "Company")), to
(i) Sign the Annual Report on Form 10-K of the Company for the
year ended December 31, 1993 and any and all amendments thereto, and
to file the same, with all exhibits thereto, and all documents in
connection therewith, if any, with the Securities and Exchange
Commission (the "SEC"), and to take all such other action which they
or either of them may consider necessary or desirable in connection
therewith, all in accordance with the Securities Exchange Act of 1934,
as amended; and
(ii) Sign any and all post-effective amendments to the Company's
Registration Statements relating to (a) the offer and sale of
interests in the Reynolds Metals Company Savings and Investment Plan
for Salaried Employees and an indefinite number of shares of the
Company's common stock, without par value (the "Common Stock") in
connection therewith, (b) the offer and sale of up to 900,000 shares
of Common Stock together with an indeterminate amount of interests to
be offered and sold in connection therewith under the Reynolds Metals
Company Savings Plan for Hourly Employees, (c) the offer and sale of
1,200,000 shares of Common Stock under the Reynolds Metals Company
1982 Nonqualified Stock Option Plan, (d) the offer and sale of
3,000,000 shares of Common Stock under the Reynolds Metals Company
1987 Nonqualified Stock Option Plan, and (e) the offer and sale of
3,250,000 shares of Common Stock under the Reynolds Metals Company
1992 Nonqualified Stock Option Plan, and to file the same, with all
exhibits thereto, and all documents in connection therewith, with the
SEC; and
(iii) Sign any and all Registration Statements on Form S-3, or on
such other form as may be appropriate, for registration of the shares
of Common Stock and Series A Junior Participating Preferred Stock
(without par value) of the Company, issuable upon exercise of Rights
(as defined in the Rights Agreement between the Company and The Chase
Manhattan Bank, N.A., dated as of November 23, 1987, as amended from
time to time) and any and all amendments (including post-effective
amendments) to such Registration Statements, and to file the same,
with all exhibits thereto, and all preliminary prospectuses,
prospectuses, prospectus supplements and documents in connection
therewith, with the SEC; and
(iv) Sign any and all post-effective amendments to the Company's
Registration Statements relating to the offer and sale of up to
$1,650,000,000 principal amount of unsecured debt securities of the
Company, and to file the same, with all exhibits thereto, and all
prospectuses, prospectus supplements, pricing supplements and
documents in connection therewith, with the SEC; and
(v) Sign any and all post-effective amendments to the Company's
Registration Statement relating to the offer and resale from time to
time of up to 3,000,000 shares of Common Stock by the Trustee of the
Reynolds Metals Company Pension Plans Master Trust, and to file the
same, with all exhibits thereto, and all prospectuses, prospectus
supplements, pricing supplements and documents in connection
therewith, with the SEC;
granting unto each of said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and confirming
all that each of said attorneys-in-fact and agents, or his or her
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
This Power of Attorney shall expire on the 28th day of February,
1995.
IN WITNESS WHEREOF, the undersigned has executed and delivered
this Power of Attorney on the 18th day of February, 1994.
Randolph N. Reynolds
Randolph N. Reynolds
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead,
in any and all capacities (including without limitation in any capacity on
behalf of Reynolds Metals Company (the "Company")), to
(i) Sign the Annual Report on Form 10-K of the Company for the
year ended December 31, 1993 and any and all amendments thereto, and
to file the same, with all exhibits thereto, and all documents in
connection therewith, if any, with the Securities and Exchange
Commission (the "SEC"), and to take all such other action which they
or either of them may consider necessary or desirable in connection
therewith, all in accordance with the Securities Exchange Act of 1934,
as amended; and
(ii) Sign any and all post-effective amendments to the Company's
Registration Statements relating to (a) the offer and sale of
interests in the Reynolds Metals Company Savings and Investment Plan
for Salaried Employees and an indefinite number of shares of the
Company's common stock, without par value (the "Common Stock") in
connection therewith, (b) the offer and sale of up to 900,000 shares
of Common Stock together with an indeterminate amount of interests to
be offered and sold in connection therewith under the Reynolds Metals
Company Savings Plan for Hourly Employees, (c) the offer and sale of
1,200,000 shares of Common Stock under the Reynolds Metals Company
1982 Nonqualified Stock Option Plan, (d) the offer and sale of
3,000,000 shares of Common Stock under the Reynolds Metals Company
1987 Nonqualified Stock Option Plan, and (e) the offer and sale of
3,250,000 shares of Common Stock under the Reynolds Metals Company
1992 Nonqualified Stock Option Plan, and to file the same, with all
exhibits thereto, and all documents in connection therewith, with the
SEC; and
(iii) Sign any and all Registration Statements on Form S-3, or on
such other form as may be appropriate, for registration of the shares
of Common Stock and Series A Junior Participating Preferred Stock
(without par value) of the Company, issuable upon exercise of Rights
(as defined in the Rights Agreement between the Company and The Chase
Manhattan Bank, N.A., dated as of November 23, 1987, as amended from
time to time) and any and all amendments (including post-effective
amendments) to such Registration Statements, and to file the same,
with all exhibits thereto, and all preliminary prospectuses,
prospectuses, prospectus supplements and documents in connection
therewith, with the SEC; and
(iv) Sign any and all post-effective amendments to the Company's
Registration Statements relating to the offer and sale of up to
$1,650,000,000 principal amount of unsecured debt securities of the
Company, and to file the same, with all exhibits thereto, and all
prospectuses, prospectus supplements, pricing supplements and
documents in connection therewith, with the SEC; and
(v) Sign any and all post-effective amendments to the Company's
Registration Statement relating to the offer and resale from time to
time of up to 3,000,000 shares of Common Stock by the Trustee of the
Reynolds Metals Company Pension Plans Master Trust, and to file the
same, with all exhibits thereto, and all prospectuses, prospectus
supplements, pricing supplements and documents in connection
therewith, with the SEC;
granting unto each of said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and confirming
all that each of said attorneys-in-fact and agents, or his or her
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
This Power of Attorney shall expire on the 28th day of February,
1995.
IN WITNESS WHEREOF, the undersigned has executed and delivered
this Power of Attorney on the 18th day of February, 1994.
Charles A. Sanders
Charles A. Sanders
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead,
in any and all capacities (including without limitation in any capacity on
behalf of Reynolds Metals Company (the "Company")), to
(i) Sign the Annual Report on Form 10-K of the Company for the
year ended December 31, 1993 and any and all amendments thereto, and
to file the same, with all exhibits thereto, and all documents in
connection therewith, if any, with the Securities and Exchange
Commission (the "SEC"), and to take all such other action which they
or either of them may consider necessary or desirable in connection
therewith, all in accordance with the Securities Exchange Act of 1934,
as amended; and
(ii) Sign any and all post-effective amendments to the Company's
Registration Statements relating to (a) the offer and sale of
interests in the Reynolds Metals Company Savings and Investment Plan
for Salaried Employees and an indefinite number of shares of the
Company's common stock, without par value (the "Common Stock") in
connection therewith, (b) the offer and sale of up to 900,000 shares
of Common Stock together with an indeterminate amount of interests to
be offered and sold in connection therewith under the Reynolds Metals
Company Savings Plan for Hourly Employees, (c) the offer and sale of
1,200,000 shares of Common Stock under the Reynolds Metals Company
1982 Nonqualified Stock Option Plan, (d) the offer and sale of
3,000,000 shares of Common Stock under the Reynolds Metals Company
1987 Nonqualified Stock Option Plan, and (e) the offer and sale of
3,250,000 shares of Common Stock under the Reynolds Metals Company
1992 Nonqualified Stock Option Plan, and to file the same, with all
exhibits thereto, and all documents in connection therewith, with the
SEC; and
(iii) Sign any and all Registration Statements on Form S-3, or on
such other form as may be appropriate, for registration of the shares
of Common Stock and Series A Junior Participating Preferred Stock
(without par value) of the Company, issuable upon exercise of Rights
(as defined in the Rights Agreement between the Company and The Chase
Manhattan Bank, N.A., dated as of November 23, 1987, as amended from
time to time) and any and all amendments (including post-effective
amendments) to such Registration Statements, and to file the same,
with all exhibits thereto, and all preliminary prospectuses,
prospectuses, prospectus supplements and documents in connection
therewith, with the SEC; and
(iv) Sign any and all post-effective amendments to the Company's
Registration Statements relating to the offer and sale of up to
$1,650,000,000 principal amount of unsecured debt securities of the
Company, and to file the same, with all exhibits thereto, and all
prospectuses, prospectus supplements, pricing supplements and
documents in connection therewith, with the SEC; and
(v) Sign any and all post-effective amendments to the Company's
Registration Statement relating to the offer and resale from time to
time of up to 3,000,000 shares of Common Stock by the Trustee of the
Reynolds Metals Company Pension Plans Master Trust, and to file the
same, with all exhibits thereto, and all prospectuses, prospectus
supplements, pricing supplements and documents in connection
therewith, with the SEC;
granting unto each of said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and confirming
all that each of said attorneys-in-fact and agents, or his or her
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
This Power of Attorney shall expire on the 20th day of April,
1994.
IN WITNESS WHEREOF, the undersigned has executed and delivered
this Power of Attorney on the 18th day of February, 1994.
Ralph S. Thomas
Ralph S. Thomas
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead,
in any and all capacities (including without limitation in any capacity on
behalf of Reynolds Metals Company (the "Company")), to
(i) Sign the Annual Report on Form 10-K of the Company for the
year ended December 31, 1993 and any and all amendments thereto, and
to file the same, with all exhibits thereto, and all documents in
connection therewith, if any, with the Securities and Exchange
Commission (the "SEC"), and to take all such other action which they
or either of them may consider necessary or desirable in connection
therewith, all in accordance with the Securities Exchange Act of 1934,
as amended; and
(ii) Sign any and all post-effective amendments to the Company's
Registration Statements relating to (a) the offer and sale of
interests in the Reynolds Metals Company Savings and Investment Plan
for Salaried Employees and an indefinite number of shares of the
Company's common stock, without par value (the "Common Stock") in
connection therewith, (b) the offer and sale of up to 900,000 shares
of Common Stock together with an indeterminate amount of interests to
be offered and sold in connection therewith under the Reynolds Metals
Company Savings Plan for Hourly Employees, (c) the offer and sale of
1,200,000 shares of Common Stock under the Reynolds Metals Company
1982 Nonqualified Stock Option Plan, (d) the offer and sale of
3,000,000 shares of Common Stock under the Reynolds Metals Company
1987 Nonqualified Stock Option Plan, and (e) the offer and sale of
3,250,000 shares of Common Stock under the Reynolds Metals Company
1992 Nonqualified Stock Option Plan, and to file the same, with all
exhibits thereto, and all documents in connection therewith, with the
SEC; and
(iii) Sign any and all Registration Statements on Form S-3, or on
such other form as may be appropriate, for registration of the shares
of Common Stock and Series A Junior Participating Preferred Stock
(without par value) of the Company, issuable upon exercise of Rights
(as defined in the Rights Agreement between the Company and The Chase
Manhattan Bank, N.A., dated as of November 23, 1987, as amended from
time to time) and any and all amendments (including post-effective
amendments) to such Registration Statements, and to file the same,
with all exhibits thereto, and all preliminary prospectuses,
prospectuses, prospectus supplements and documents in connection
therewith, with the SEC; and
(iv) Sign any and all post-effective amendments to the Company's
Registration Statements relating to the offer and sale of up to
$1,650,000,000 principal amount of unsecured debt securities of the
Company, and to file the same, with all exhibits thereto, and all
prospectuses, prospectus supplements, pricing supplements and
documents in connection therewith, with the SEC; and
(v) Sign any and all post-effective amendments to the Company's
Registration Statement relating to the offer and resale from time to
time of up to 3,000,000 shares of Common Stock by the Trustee of the
Reynolds Metals Company Pension Plans Master Trust, and to file the
same, with all exhibits thereto, and all prospectuses, prospectus
supplements, pricing supplements and documents in connection
therewith, with the SEC;
granting unto each of said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and confirming
all that each of said attorneys-in-fact and agents, or his or her
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
This Power of Attorney shall expire on the 28th day of February,
1995.
IN WITNESS WHEREOF, the undersigned has executed and delivered
this Power of Attorney on the 18th day of February, 1994.
Robert J. Vlasic
Robert J. Vlasic
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead,
in any and all capacities (including without limitation in any capacity on
behalf of Reynolds Metals Company (the "Company")), to
(i) Sign the Annual Report on Form 10-K of the Company for the
year ended December 31, 1993 and any and all amendments thereto, and
to file the same, with all exhibits thereto, and all documents in
connection therewith, if any, with the Securities and Exchange
Commission (the "SEC"), and to take all such other action which they
or either of them may consider necessary or desirable in connection
therewith, all in accordance with the Securities Exchange Act of 1934,
as amended; and
(ii) Sign any and all post-effective amendments to the Company's
Registration Statements relating to (a) the offer and sale of
interests in the Reynolds Metals Company Savings and Investment Plan
for Salaried Employees and an indefinite number of shares of the
Company's common stock, without par value (the "Common Stock") in
connection therewith, (b) the offer and sale of up to 900,000 shares
of Common Stock together with an indeterminate amount of interests to
be offered and sold in connection therewith under the Reynolds Metals
Company Savings Plan for Hourly Employees, (c) the offer and sale of
1,200,000 shares of Common Stock under the Reynolds Metals Company
1982 Nonqualified Stock Option Plan, (d) the offer and sale of
3,000,000 shares of Common Stock under the Reynolds Metals Company
1987 Nonqualified Stock Option Plan, and (e) the offer and sale of
3,250,000 shares of Common Stock under the Reynolds Metals Company
1992 Nonqualified Stock Option Plan, and to file the same, with all
exhibits thereto, and all documents in connection therewith, with the
SEC; and
(iii) Sign any and all Registration Statements on Form S-3, or on
such other form as may be appropriate, for registration of the shares
of Common Stock and Series A Junior Participating Preferred Stock
(without par value) of the Company, issuable upon exercise of Rights
(as defined in the Rights Agreement between the Company and The Chase
Manhattan Bank, N.A., dated as of November 23, 1987, as amended from
time to time) and any and all amendments (including post-effective
amendments) to such Registration Statements, and to file the same,
with all exhibits thereto, and all preliminary prospectuses,
prospectuses, prospectus supplements and documents in connection
therewith, with the SEC; and
(iv) Sign any and all post-effective amendments to the Company's
Registration Statements relating to the offer and sale of up to
$1,650,000,000 principal amount of unsecured debt securities of the
Company, and to file the same, with all exhibits thereto, and all
prospectuses, prospectus supplements, pricing supplements and
documents in connection therewith, with the SEC; and
(v) Sign any and all post-effective amendments to the Company's
Registration Statement relating to the offer and resale from time to
time of up to 3,000,000 shares of Common Stock by the Trustee of the
Reynolds Metals Company Pension Plans Master Trust, and to file the
same, with all exhibits thereto, and all prospectuses, prospectus
supplements, pricing supplements and documents in connection
therewith, with the SEC;
granting unto each of said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and confirming
all that each of said attorneys-in-fact and agents, or his or her
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
This Power of Attorney shall expire on the 28th day of February,
1995.
IN WITNESS WHEREOF, the undersigned has executed and delivered
this Power of Attorney on the 18th day of February, 1994.
Joe B. Wyatt
Joe B. Wyatt
<PAGE>
I, Brenda A. Hart, an Assistant Secretary of REYNOLDS METALS COMPANY,
a Delaware corporation (the "Company"), do hereby certify that the
following is a true and complete copy of resolutions relating to the filing
of the Company's Annual Report on Form 10-K for the year ended December 31,
1993, duly adopted by the Board of Directors of the Company at its meeting
held on February 18, 1994, and that said resolutions are now in full force
and effect:
RESOLVED, that the form presented to the meeting of the 1993
Annual Report on Form 10-K (the "Report") to be filed by the
corporation with the Securities and Exchange Commission is hereby
approved; and
FURTHER RESOLVED, that the Chief Executive Officer, the
Chief Operating Officer, the Chief Financial Officer, the
Controller, and the Vice President, General Counsel and Secretary
are each hereby authorized on behalf of this corporation to
execute and file the Report with the Securities and Exchange
Commission, in the form or substantially the form presented, with
such changes therein and amendments thereto as such officers deem
appropriate to comply with requirements of law, and to take all
such further actions and proceedings as they deem necessary or
appropriate to carry out the purpose of these resolutions; and
FURTHER RESOLVED, that each director or officer who may be
required to execute the Report or any amendments thereto is
hereby authorized to execute a power of attorney appointing D.
MICHAEL JONES and BRENDA A. HART, and each of them, his true and
lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, to execute and deliver the
Report and amendments on his behalf and on behalf of the
corporation and to act on his behalf and on behalf of the
corporation in all matters relating to the Report, as fully to
all intents and purposes as if he himself were personally
present.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the
corporate seal of the Company to this certificate this 9th day of March,
1994.
Brenda A. Hart
Brenda A. Hart
Assistant Secretary
SEAL
