SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-1430
REYNOLDS METALS COMPANY
A Delaware Corporation
(I.R.S. Employer Identification No. 54-0355135)
6601 West Broad Street, P. O. Box 27003, Richmond, Virginia 23261-7003
Telephone Number (804) 281-2000
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No ___
As of April 30, 1995, the Registrant had 62,852,674 shares of Common Stock,
no par value, outstanding and entitled to vote.
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
___________________________________________________________________________
Reynolds Metals Company
Quarter Ended March 31
___________________________________________________________________________
(In millions, except per share amounts) 1995 1994
___________________________________________________________________________
Revenues
Net sales $1,651 $1,254
Equity, interest and other income 10 7
___________________________________________________________________________
1,661 1,261
___________________________________________________________________________
Costs and expenses
Cost of products sold 1,392 1,166
Selling, administrative and general expenses 107 92
Interest - principally on long-term obligations 43 36
___________________________________________________________________________
1,542 1,294
___________________________________________________________________________
Income (loss) before income taxes 119 (33)
Taxes on income (credit) 37 (12)
___________________________________________________________________________
Net income (loss) $82 $(21)
Preferred stock dividends 9 7
___________________________________________________________________________
Net income (loss) available to common stockholders $73 $(28)
===========================================================================
Income (loss) per share (Note B)
Average shares outstanding 72 61
Net income (loss) $1.13 $(0.46)
Cash dividends per common share $0.25 $0.25
___________________________________________________________________________
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
___________________________________________________________________________
Reynolds Metals Company
March 31 December 31
___________________________________________________________________________
(In millions) 1995 1994
___________________________________________________________________________
ASSETS
Current assets
Cash and cash equivalents $38 $308
Short-term investments 90 126
Receivables, less allowances of $20
(1994 - $19) 1,076 962
Inventories 1,029 873
Prepaid expenses 62 53
___________________________________________________________________________
Total current assets 2,295 2,322
Unincorporated joint ventures and associated companies 855 856
Property, plant and equipment 6,356 6,308
Less allowances for depreciation and amortization 3,244 3,200
___________________________________________________________________________
3,112 3,108
Deferred taxes and other assets 1,166 1,175
___________________________________________________________________________
Total assets $7,428 $7,461
===========================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable, accrued and other liabilities $1,182 $1,286
Short-term obligations 143 120
Long-term debt 18 18
___________________________________________________________________________
Total current liabilities 1,343 1,424
Long-term debt 1,849 1,848
Postretirement benefits 1,141 1,145
Environmental, deferred taxes and other liabilities 756 772
Stockholders' equity
Preferred stock 505 505
Common stock 881 870
Retained earnings 1,037 980
Cumulative currency translation adjustments (44) (43)
Pension liability adjustment (40) (40)
___________________________________________________________________________
Total stockholders' equity 2,339 2,272
___________________________________________________________________________
Total liabilities and stockholders' equity $7,428 $7,461
===========================================================================
<PAGE>
<TABLE>
CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED)
____________________________________________________________________________________________________
Reynolds Metals Company
<CAPTION>
Three Months Ended
March 31
____________________________________________________________________________________________________
(In millions) 1995 1994
____________________________________________________________________________________________________
<S> <C> <C>
Operating activities
Net income (loss) $82 $(21)
Adjustments to reconcile to net cash used in
operating activities:
Depreciation and amortization 76 71
Changes in operating assets and liabilities net
of effects from acquisitions and dispositions:
Accounts payable, accrued and other liabilities (109) 92
Receivables (111) (82)
Inventories (161) (75)
Other (23) (10)
____________________________________________________________________________________________________
Net cash used in operating activities (246) (25)
Investing activities
Capital investments (85) (52)
Proceeds from sales of assets 28 5
Maturities of investments in debt securities 36 -
Other investing activities - net 5 (20)
____________________________________________________________________________________________________
Net cash used in investing activities (16) (67)
Financing activities
Proceeds from preferred stock issue - 505
Increase (decrease) in short-term borrowings 18 (40)
Cash dividends paid (25) -
Reduction of long-term debt and other - net (1) (43)
____________________________________________________________________________________________________
Net cash provided by (used in) financing activities (8) 422
Cash and cash equivalents
Net increase (decrease) (270) 330
At beginning of period 308 19
____________________________________________________________________________________________________
At end of period $38 $349
====================================================================================================
/TABLE
<PAGE>
REYNOLDS METALS COMPANY AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Quarters Ended March 31, 1995 and 1994
Note A - Basis of presentation
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for
the three month period ended March 31, 1995 are not necessarily indicative of
the results that may be expected for the year ending December 31, 1995. For
further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's annual report on Form 10-K for
the year ended December 31, 1994.
Note B - Earnings per share
In the first quarter of 1995, earnings per share equals net income divided by
the weighted-average number of common shares and common share equivalents
outstanding during the period. The number of common share equivalents
outstanding was based on the assumed conversion of the Company's 7%
PRIDES(SM), Convertible Preferred Stock ("PRIDES"). In the first quarter of
1994, earnings per share equals net income, minus PRIDES dividends, divided
by the weighted-average number of common shares outstanding during the
period. Common share equivalents relating to the PRIDES were not included in
the first quarter of 1994 since their effect would have been anti-dilutive.
Note C - Financing Arrangements
In the first quarter of 1995, the Company amended its $500 million revolving
credit facility to extend the term and lower the cost. The expiration date
of the facility was extended from 1999 to 2000. The annual commitment fee on
the unused portion of the facility was lowered from .20% to .125%. No
amounts were outstanding under the facility at March 31, 1995.
Note D - Contingent liabilities
As previously disclosed in the Company's annual report on Form 10-K for the
year ended December 31, 1994, the Company is involved in various worldwide
environmental improvement activities resulting from past operations,
including designation as a potentially responsible party, with others, at
various EPA designated Superfund sites. The Company has recorded amounts
which, in management's best estimate, will be sufficient to satisfy
anticipated costs of known remediation requirements. As a result of factors
such as the continuing evolution of environmental laws and regulatory
requirements, the availability and application of technology, the
identification of presently unknown remediation sites and the allocation of
costs among potentially responsible parties, estimated costs for future
environmental compliance and remediation are necessarily imprecise. Based
upon information presently available, such future costs are not expected to
have a material adverse effect on the Company's competitive or financial
position or its ongoing results of operations. However, such costs could be
material to future quarterly or annual results of operations.
Note E - Canadian Reynolds Metals Company, Limited
Summarized financial information for Canadian Reynolds Metals Company,
Limited is as follows:
Quarter ended March 31
_______________________
1995 1994
_______________________
Net Sales:
Customers $113 $73
Parent company 179 116
_______________________
292 189
Cost of products sold 215 181
Net income (loss) $50 $5
March 31 December 31
1995 1994
_______________________
Current assets $310 $238
Noncurrent assets 1,004 1,015
Current liabilities (79) (83)
Noncurrent liabilities (579) (564)
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
INTRODUCTION
The following discussion and analysis should be read in
conjunction with the consolidated financial statements and notes thereto
included in or referred to in this report.
RESULTS OF OPERATIONS
The Company had net income of $82 million ($1.13 per share) in
the first quarter of 1995 compared to a net loss of $21 million ($.46
per share) in the first quarter of 1994.
The strengthening global economy has resulted in increased
aluminum consumption, declining worldwide inventories and higher demand
and stronger prices for the Company's products. These factors, together
with intensive cost reduction efforts, are reflected in the Company's
significantly improved results.
Shipments and Revenues
Shipments, net sales and revenues per pound for the first
quarter of 1995 and 1994 were as follows (metric tons in thousands and
dollars in millions, except per pound amounts):
First Quarter
1995 1994
_________________
Aluminum product shipments 392 345
Net sales:
Aluminum $1,334 $926
Nonaluminum 317 328
_________________
Total $1,651 $1,254
=================
Revenues per pound:
Fabricated aluminum products $1.73 $1.37
Primary aluminum $0.99 $0.61
Higher shipments were realized for most aluminum products,
particularly cans and ends, sheet and primary and recycled ingot. In
addition to the increase in demand, higher shipments of cans and ends
and aluminum sheet were also attributable to the 1994 acquisitions of a
can manufacturing facility and a metals distribution business.
The increase in net sales for aluminum products was due to the
higher shipping volume and higher prices for most aluminum products.
The decline in nonaluminum sales was due to the divestiture of
gold mining operations in mid-1994 and early 1995 and lower sales of
real estate. This decline was somewhat offset by higher sales of
stainless steel due to improved demand and the acquisition of a metals
distribution business in 1994.
Revenues by principal markets were:
First Quarter
1995 1994
______________
Packaging and Containers 41% 45%
Distributors and Fabricators 16 13
Automotive and Transportation 15 11
Building and Construction 13 11
Electrical 3 3
Other 12 17
______________
Total 100% 100%
==============
Sales to the packaging and containers market improved 18% in the
first quarter of 1995 but provided a lower percentage of total revenues
due to substantial gains in sales to other markets. Higher sales were
realized to the distributors and fabricators market (up 57%), the
automotive and transportation market (up 72%) and the building and
construction market (up 51%).
For further information concerning shipments and revenues, see the
discussion under "Operating Area Analysis".
Costs and Expenses
The increase in cost of products sold was due to the higher
shipping volume and higher costs for purchased materials. Costs were
favorably impacted by performance improvement programs and higher
capacity utilization at aluminum fabricating facilities.
Selling, administrative and general expenses increased due to the
higher level of business activity but declined from 7.3% to 6.5% of net
sales. The increase in interest expense was due to higher rates.
On a quarterly basis, the Company evaluates the status of all
significant existing or potential environmental issues, develops or
revises estimates of costs to satisfy known remediation requirements and
adjusts its accruals accordingly. Based upon information presently
available, such future costs are not expected to have a material adverse
effect on the Company's competitive or financial position or its ongoing
results of operations. However, it is not possible to predict the
amount or timing of future costs of environmental remediation
requirements which may subsequently be determined. Such costs could be
material to future quarterly or annual results of operations.
On August 29, 1994 and March 30, 1995, the Company received civil
investigative demands from the U.S. Department of Justice relating to
production of primary aluminum and the pricing of aluminum can stock,
respectively. The Company is cooperating with both inquiries and is
confident that its conduct has been in compliance with U.S. antitrust
laws.
Various suits and claims are pending against the Company. In the
opinion of management, after consultation with counsel, disposition of
these suits and claims, either individually or in the aggregate, will
not have a material adverse effect on the Company's competitive or
financial position or its ongoing results of operations. No assurance
can be given, however, that the disposition of one or more of such suits
or claims in a particular reporting period will not be material in
relation to the reported results for such period.
Taxes on Income
The effective tax rates reflected in the income statement differ
from the U.S. federal statutory rate because of state and foreign taxes
and the effects of percentage depletion allowances.
OPERATING AREA ANALYSIS
(Metric tons in thousands, dollars in millions)
FIRST QUARTER
______________________________
Net Sales Shipments
1995 1994 1995 1994
_____________________________
Finished products and other sales
Packaging and containers:
Aluminum $402 $337 82 76
Nonaluminum 123 121
Other aluminum 151 92 44 33
Other nonaluminum 128 110
_____________________________
804 660 126 109
_____________________________
Production and Processing
Primary aluminum 133 74 61 55
Flat rolled 330 217 106 98
Extruded and drawn 195 131 56 51
Other aluminum 123 75 43 32
Other nonaluminum 66 63
Gold - 34
_____________________________
847 594 266 236
_____________________________
Net sales $1,651$1,254 392 345
=============================
Finished Products and Other Sales
Higher shipments were realized for most products, particularly
cans and ends and aluminum sheet. The increase in aluminum sales
reflects the higher shipping volume and stronger prices for aluminum
products. The increase in nonaluminum sales is principally attributable
to stainless steel. In addition to the increase in demand, higher
shipments and sales of cans, ends, aluminum sheet and stainless steel
were also attributable to the 1994 acquisitions of a can manufacturing
facility and a metals distribution business.
Production and Processing
Higher shipments were realized for most products, particularly
primary and recycled ingot, electrical rod and can sheet. The increase
in aluminum sales reflects the higher shipping volume and stronger
prices. The Company sold a portion of its gold mining operations in
mid-1994 and the remainder in early 1995.
LIQUIDITY AND CAPITAL RESOURCES
Working Capital
Working capital totalled $952 million at March 31, 1995, compared
to $898 million at December 31, 1994. The ratio of current assets to
current liabilities was 1.7/1 at March 31, 1995, compared to 1.6/1 at
December 31, 1994. The increase in working capital reflects the higher
level of business activity. Inventories have increased due to
anticipated higher shipping levels in the second quarter of 1995.
Operating Activities
In the first quarter of 1995, cash generated from operations was
supplemented with cash on hand to finance increases in inventories and
receivables and to reduce accounts payable, accrued and other
liabilities.
Investing Activities
Capital investments of $85 million in the first quarter of 1995
included $34 million for operating requirements (i.e., replacement
equipment, capital maintenance, environmental control projects, etc.).
The remainder was for continuing performance improvement and strategic
investment projects including modernization of can manufacturing
facilities; improvements at the can sheet facility in Alabama; a new
wheel facility in Wisconsin; expansion of foil rolling capacity at a
facility in Kentucky; and equipment upgrades at a number of other
facilities.
In the first quarter of 1995, the Company sold its remaining gold
mining assets in Australia for $28 million. The proceeds from the sale,
which approximated book value, will be redeployed into value-added
businesses. The sale is not expected to have a material effect on the
Company's ongoing results of operations.
Financing Activities
In the first quarter of 1995, the Company amended its $500 million
revolving credit facility to extend the term and lower the cost. The
expiration date of the facility was extended from 1999 to 2000. The
annual commitment fee on the unused portion of the facility was lowered
from .20% to .125%. No amounts were outstanding under the facility at
March 31, 1995.
In the first quarter of 1995, the Company contributed 206,000
shares of common stock, valued at approximately $10 million, to its
pension plans.
Financial Outlook
Capital investments in 1995 are expected to total $575 million.
Approximately 35% of this amount will be for operating requirements.
The remainder will be for performance improvement and strategic
investment projects. In addition to those projects where expenditures
were made in the first quarter of 1995, performance improvement and
strategic investment projects also include participation in the
construction of foreign can plants; capacity expansion at a plastic film
plant in Virginia; capacity expansion at a fabricated aluminum
automotive components plant in Indiana (see below); and equipment
upgrades at a number of other facilities. Capital investments in 1995
will be funded primarily with cash generated from operations, proceeds
from the sale of non-core assets and a portion of the remaining proceeds
from the Company's preferred stock issued in early 1994.
Rates for electricity charged by the Bonneville Power
Administration ("BPA"), which serves the Company's Troutdale, Oregon and
Longview, Washington primary aluminum production plants, have been
settled through October, 1996. However, the longer-term outlook for
BPA's rates remains uncertain, due in part to ongoing political,
regulatory and judicial developments relating to endangered species
listings of Snake River salmon and the effect of such developments on
BPA's hydroelectric operations. Further increases in power rates which
are already relatively high by worldwide standards could jeopardize the
long-term competitiveness of the Company's Troutdale and Longview
plants. The Company would have to consider whether paying increased
power rates for its smelter operations in the Pacific Northwest would be
prudent under prevailing economic conditions. The Company is exploring
competitive alternatives to BPA power.
In the first quarter of 1995, the Company announced plans for a
$12 million expansion that will more than double annual production
capacity at its fabricated aluminum automotive components plant in
Indiana. The start-up of the additional capacity is set for early 1996.
The expansion will allow the facility to keep up with a growing customer
base.
The Company believes its available financial resources (including
cash and investments of over $100 million), together with internally
generated funds, are sufficient to meet its business needs at the
present time and for the foreseeable future. The Company continues to
exceed the financial ratio requirements contained in its financing
arrangements and expects to do so for the foreseeable future. At March
31, 1995, $222 million of the Company's $1.65 billion shelf registration
remained available for the issuance of debt securities.
OTHER INFORMATION
The Financial Accounting Standards Board issued in March, 1995,
FAS No. 121 - Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of. The Company is in the process of
evaluating the provisions of this pronouncement and has not made a
determination as to the impact, if any, on the Company's financial
position and/or results of operations.
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
On March 30, 1995, the registrant received a civil investigative
demand from the U.S. Department of Justice relating to the pricing of
aluminum can stock. The registrant is cooperating with the inquiry and
is confident that its conduct has been in compliance with U.S. antitrust
laws.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Stockholders of the Company was held on
April 19, 1995. The stockholders (i) elected the sixteen nominees named
in the Company's proxy statement to serve as Directors, (ii) approved
amendment of the Company's Performance Incentive Plan and (iii) ratified
the selection of Ernst & Young LLP as independent auditors of the
Company for 1995. The number of votes cast for, against or withheld,
and the number of abstentions, as applicable, with respect to each of
the foregoing matters were as set forth below. There were no broker
nonvotes with respect to any of the foregoing matters. No other matters
were voted upon at the meeting.
(i) Election of Directors
Name Number Of Votes Number Of Votes
Cast "For" Withheld
Patricia C. Barron 62,176,628 332,022
William O. Bourke 61,810,979 697,671
Yale M. Brandt 62,173,805 334,845
John R. Hall 62,181,371 327,279
Robert L. Hintz 62,179,513 329,137
Richard G. Holder 62,177,042 331,608
William H. Joyce 62,096,706 411,944
Mylle Bell Mangum 62,091,638 417,012
D. Larry Moore 62,096,598 412,052
Randolph N. Reynolds 62,178,040 330,610
James M. Ringler 62,180,592 328,058
Charles A. Sanders 62,179,692 328,958
Henry S. Savedge, Jr. 62,179,637 329,013
Jeremiah J. Sheehan 62,182,749 325,901
Robert J. Vlasic 62,174,826 333,824
Joe B. Wyatt 62,176,876 331,774
(ii) Approval of Amendment of Performance Incentive Plan
Number of Votes Cast "For" 60,345,128
Number of Votes Cast "Against" 1,722,440
Number of Abstentions 442,781
(iii) Ratification of Selection of Ernst & Young LLP as
Independent Auditors
Number of Votes Cast "For" 61,862,443
Number of Votes Cast "Against" 242,529
Number of Abstentions 404,179
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
See Index to Exhibits.
(b) Reports on Form 8-K
During the first quarter of 1995, the Registrant filed with the
Commission a Current Report on Form 8-K dated March 30, 1995 reporting
under Item 5 that it had (i) completed the sale of its wholly owned
subsidiary, Reynolds Australian Gold Operations, Ltd. (which at the time
of the sale held the Registrant's principal remaining gold mining
assets), to Sons of Gwalia Ltd. and Camelot Resources N.L. and (ii)
received a civil investigative demand from the U.S. Department of
Justice relating to the pricing of aluminum can stock.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
REYNOLDS METALS COMPANY
By Allen M. Earehart
Allen M. Earehart
Vice President, Controller
(Principal Accounting Officer)
DATE: May 12, 1995
INDEX TO EXHIBITS
EXHIBIT 2 - None
* EXHIBIT 3.1 - Restated Certificate of Incorporation, as
amended to the date hereof. (File No. 1-1430,
1994 Form 10-K Report, EXHIBIT 3.1)
* EXHIBIT 3.2 - By-Laws, as amended to the date hereof. (File
No. 1-1430, 1994 Form 10-K Report, EXHIBIT 3.2)
EXHIBIT 4.1 - Restated Certificate of Incorporation. See
EXHIBIT 3.1.
EXHIBIT 4.2 - By-Laws. See EXHIBIT 3.2.
* EXHIBIT 4.3 - Indenture dated as of April 1, 1989 (the
"Indenture") between Reynolds Metals Company
and The Bank of New York, as Trustee, relating
to Debt Securities. (File No. 1-1430, Form
10-Q Report for the Quarter Ended March 31,
1989, EXHIBIT 4(c))
* EXHIBIT 4.4 - Amendment No. 1 dated as of November 1, 1991 to
the Indenture. (File No. 1-1430, 1991 Form
10-K Report, EXHIBIT 4.4)
* EXHIBIT 4.5 - Rights Agreement dated as of November 23, 1987
(the "Rights Agreement") between Reynolds
Metals Company and The Chase Manhattan Bank,
N.A. (File No. 1-1430, Registration Statement
on Form 8-A dated November 23, 1987, pertaining
to Preferred Stock Purchase Rights, EXHIBIT 1)
* EXHIBIT 4.6 - Amendment No. 1 dated as of December 19, 1991
to the Rights Agreement. (File No. 1-1430,
1991 Form 10-K Report, EXHIBIT 4.11)
* EXHIBIT 4.7 - Form of 9-3/8% Debenture due June 15, 1999.
(File No. 1-1430, Form 8-K Report dated June 6,
1989, EXHIBIT 4)
* EXHIBIT 4.8 - Form of Fixed Rate Medium-Term Note.
(Registration Statement No. 33-30882 on Form
S-3, dated August 31, 1989, EXHIBIT 4.3)
* EXHIBIT 4.9 - Form of Floating Rate Medium-Term Note.
(Registration Statement No. 33-30882 on Form
S-3, dated August 31, 1989, EXHIBIT 4.4)
* EXHIBIT 4.10 - Form of Book-Entry Fixed Rate Medium-Term Note.
(File No. 1-1430, 1991 Form 10-K Report,
EXHIBIT 4.15)
* EXHIBIT 4.11 - Form of Book-Entry Floating Rate Medium-Term
Note. (File No. 1-1430, 1991 Form 10-K Report,
EXHIBIT 4.16)
* EXHIBIT 4.12 - Form of 9% Debenture due August 15, 2003.
(File No. 1-1430, Form 8-K Report dated August
16, 1991, Exhibit 4(a))
* EXHIBIT 4.13 - Articles of Continuance of Canadian Reynolds
Metals Company, Limited -- Societe Canadienne
de Metaux Reynolds, Limitee ("CRM"), as amended
to the date hereof. (Registration Statement
No. 33-59168 on Form S-3, dated March 5, 1993,
EXHIBIT 4.1)
* EXHIBIT 4.14 - By-Laws of CRM, as amended to the date hereof.
(File No. 1-1430, Form 10-Q Report for the
Quarter Ended September 30, 1993, EXHIBIT 4.19)
* EXHIBIT 4.15 - Indenture dated as of April 1, 1993 among CRM,
Reynolds Metals Company and The Bank of New
York, as Trustee. (File No. 1-1430, Form 8-K
Report dated July 14, 1993, EXHIBIT 4(a))
* EXHIBIT 4.16 - Form of 6-5/8% Guaranteed Amortizing Note due
July 15, 2002. (File No. 1-1430, Form 8-K
Report dated July 14, 1993, EXHIBIT 4(d))
* EXHIBIT 10.1 - Reynolds Metals Company 1982 Nonqualified Stock
Option Plan, as amended through May 17, 1985.
(File No. 1-1430, 1985 Form 10-K Report,
EXHIBIT 10.2)
* EXHIBIT 10.2 - Reynolds Metals Company 1987 Nonqualified Stock
Option Plan. (Registration Statement No.
33-13822 on Form S-8, dated April 28, 1987,
EXHIBIT 28.1)
* EXHIBIT 10.3 - Reynolds Metals Company 1992 Nonqualified Stock
Option Plan. (Registration Statement No.
33-44400 on Form S-8, dated December 9, 1991,
EXHIBIT 28.1)
EXHIBIT 10.4 - Reynolds Metals Company Performance Incentive
Plan, as amended and restated effective January
1, 1996
* EXHIBIT 10.5 - Agreement dated December 9, 1987 between
Reynolds Metals Company and Jeremiah J.
Sheehan. (File No. 1-1430, 1987 Form 10-K
Report, EXHIBIT 10.9)
* EXHIBIT 10.6 - Supplemental Death Benefit Plan for Officers.
(File No. 1-1430, 1986 Form 10-K Report,
EXHIBIT 10.8)
* EXHIBIT 10.7 - Financial Counseling Assistance Plan for
Officers. (File No. 1-1430, 1987 Form 10-K
Report, EXHIBIT 10.11)
* EXHIBIT 10.8 - Management Incentive Deferral Plan. (File No.
1-1430, 1987 Form 10-K Report, EXHIBIT 10.12)
* EXHIBIT 10.9 - Deferred Compensation Plan for Outside
Directors as Amended and Restated Effective
December 1, 1993. (File No. 1-1430, 1993 Form
10-K Report, EXHIBIT 10.12)
* EXHIBIT 10.10 - Retirement Plan for Outside Directors. (File
No. 1-1430, 1986 Form 10-K Report, EXHIBIT
10.10)
* EXHIBIT 10.11 - Death Benefit Plan for Outside Directors. (File
No. 1-1430, 1986 Form 10-K Report, EXHIBIT
10.11)
* EXHIBIT 10.12 - Form of Indemnification Agreement for Directors
and Officers. (File No. 1-1430, Form 8-K
Report dated April 29, 1987, EXHIBIT 28.3)
* EXHIBIT 10.13 - Form of Executive Severance Agreement between
Reynolds Metals Company and key executive
personnel, including each of the individuals
listed in Item 4A of the Reynolds Metals
Company 1994 Form 10-K Report, Paul S. Hayden
and John F. Rudin. (File No. 1-1430, 1987 Form
10-K Report, EXHIBIT 10.18)
* EXHIBIT 10.14 - Amendment to Reynolds Metals Company 1987
Nonqualified Stock Option Plan effective May
20, 1988. (File No. 1-1430, Form 10-Q Report
for the Quarter Ended June 30, 1988, EXHIBIT
19(a))
* EXHIBIT 10.15 - Amendment to Reynolds Metals Company 1987
Nonqualified Stock Option Plan effective
October 21, 1988. (File No. 1-1430, Form 10-Q
Report for the Quarter Ended September 30,
1988, EXHIBIT 19(a))
* EXHIBIT 10.16 - Amendment to Reynolds Metals Company 1987
Nonqualified Stock Option Plan effective
January 1, 1987. (File No. 1-1430, 1988 Form
10-K Report, EXHIBIT 10.22)
* EXHIBIT 10.17 - Amendment to Reynolds Metals Company
Performance Incentive Plan effective January 1,
1989. (File No. 1-1430, Form 10-Q Report for
the Quarter Ended June 30, 1989, EXHIBIT 19)
* EXHIBIT 10.18 - Form of Stock Option and Stock Appreciation
Right Agreement, as approved February 16, 1990
by the Compensation Committee of the Company's
Board of Directors. (File No. 1-1430, 1989
Form 10-K Report, EXHIBIT 10.24)
* EXHIBIT 10.19 - Amendment to Reynolds Metals Company 1982
Nonqualified Stock Option Plan effective
January 18, 1991. (File No. 1-1430, 1990 Form
10-K Report, EXHIBIT 10.25)
* EXHIBIT 10.20 - Amendment to Reynolds Metals Company 1987
Nonqualified Stock Option Plan effective
January 18, 1991. (File No. 1-1430, 1990 Form
10-K Report, EXHIBIT 10.26)
* EXHIBIT 10.21 - Letter Agreement dated January 18, 1991 between
Reynolds Metals Company and William O. Bourke.
(File No. 1-1430, 1990 Form 10-K Report,
EXHIBIT 10.29)
* EXHIBIT 10.22 - Form of Stock Option Agreement, as approved
April 22, 1992 by the Compensation Committee of
the Company's Board of Directors. (File No.
1-1430, Form 10-Q Report for the Quarter Ended
March 31, 1992, EXHIBIT 28(a))
* EXHIBIT 10.23 - Consulting Agreement dated May 1, 1992 between
Reynolds Metals Company and William O. Bourke.
(File No. 1-1430, Form 10-Q Report for the
Quarter Ended March 31, 1992, EXHIBIT 28(b))
* EXHIBIT 10.24 - Renewal dated February 18, 1994 of Consulting
Agreement dated May 1, 1992 between Reynolds
Metals Company and William O. Bourke. (File
No. 1-1430, 1993 Form 10-K Report, EXHIBIT
10.28)
* EXHIBIT 10.25 - Reynolds Metals Company Restricted Stock Plan
for Outside Directors. (Registration Statement
No. 33-53851 on Form S-8, dated May 27, 1994,
EXHIBIT 4.6)
* EXHIBIT 10.26 - Reynolds Metals Company New Management
Incentive Deferral Plan. (File No. 1-1430,
Form 10-Q Report for the Quarter Ended June 30,
1994, EXHIBIT 10.30)
* EXHIBIT 10.27 - Reynolds Metals Company Salary Deferral Plan
for Executives. (File No. 1-1430, Form 10-Q
Report for the Quarter Ended June 30, 1994,
EXHIBIT 10.31)
* EXHIBIT 10.28 - Reynolds Metals Company Supplemental Long Term
Disability Plan for Executives. (File No.
1-1430, Form 10-Q Report for the Quarter Ended
June 30, 1994, EXHIBIT 10.32)
* EXHIBIT 10.29 - Amendment to Reynolds Metals Company 1982
Nonqualified Stock Option Plan effective August
19, 1994. (File No. 1-1430, Form 10-Q Report
for the Quarter Ended September 30, 1994,
EXHIBIT 10.33)
* EXHIBIT 10.30 - Amendment to Reynolds Metals Company 1987
Nonqualified Stock Option Plan effective August
19, 1994. (File No. 1-1430, Form 10-Q Report
for the Quarter Ended September 30, 1994,
EXHIBIT 10.34)
* EXHIBIT 10.31 - Amendment to Reynolds Metals Company 1992
Nonqualified Stock Option Plan effective August
19, 1994. (File No. 1-1430, Form 10-Q Report
for the Quarter Ended September 30, 1994,
EXHIBIT 10.35)
* EXHIBIT 10.32 - Amendment to Reynolds Metals Company New
Management Incentive Deferral Plan effective
January 1, 1995. (File No. 1-1430, 1994 Form
10-K Report, EXHIBIT 10.36)
* EXHIBIT 10.33 - Amendment to Reynolds Metals Company New
Management Incentive Deferral Plan effective
January 1, 1995 through December 31, 1996.
(File No. 1-1430, 1994 Form 10-K Report,
EXHIBIT 10.37)
* EXHIBIT 10.34 - Amendment to Reynolds Metals Company Salary
Deferral Plan for Executives effective January
1, 1995 through December 31, 1996. (File No.
1-1430, 1994 Form 10-K Report, EXHIBIT 10.38)
EXHIBIT 11 - Computation of Earnings Per Share
EXHIBIT 15 - None
EXHIBIT 18 - None
EXHIBIT 19 - None
EXHIBIT 22 - None
EXHIBIT 23 - None
EXHIBIT 24 - None
EXHIBIT 27 - Financial Data Schedule
____________________________
* Incorporated by reference.
Pursuant to Item 601 of Regulation S-K, certain instruments with
respect to long-term debt of Reynolds Metals Company (the "Registrant")
and its consolidated subsidiaries are omitted because such debt does not
exceed 10 percent of the total assets of the Registrant and its
subsidiaries on a consolidated basis. The Registrant agrees to furnish
a copy of any such instrument to the Commission upon request.
EXHIBIT 10.4
REYNOLDS METALS COMPANY
Performance Incentive Plan
As Amended and Restated
Effective January 1, 1996
<PAGE>
TABLE OF CONTENTS
Page
1. PURPOSE 1
2. ADMINISTRATION 1
3. PARTICIPATION 2
4. TARGET AWARD LEVELS 2
5. PERFORMANCE GOALS 2
6. DETERMINATION OF AWARDS 3
7. COMMUNICATION 3
8. PAYMENT OF AWARDS 3
9. COMPANY STOCK 6
10. EFFECTIVE DATE OF PLAN 7
1. PURPOSE
The purpose of the Performance Incentive Plan (the "Plan") is to
promote the financial success of Reynolds Metals Company (the
"Company") by:
(a) providing compensation opportunities which are competitive with
those of other major companies;
(b) supporting the Company's goal-setting and strategic planning
process; and
(c) motivating key executives to achieve annual business goals by
allowing them to share in the risks and rewards of the business.
2. ADMINISTRATION
(a) The Plan shall be administered by the Compensation Committee (the
"Committee") of the Board of Directors (the "Board"). No member
of the Committee shall be eligible to participate in the Plan.
(b) The Committee shall have the power and authority to adopt, amend
and rescind any administrative guidelines, rules, regulations,
and procedures deemed appropriate to the administration of the
Plan, and to interpret and rule on any questions relating to any
provision of the Plan.
(c) The decisions of the Committee shall be final, conclusive and
binding on all parties, including the Company and participating
employees.
(d) The Board may from time to time amend, suspend or terminate the
Plan, in whole or in part. Notwithstanding the foregoing, the
Board may, in any circumstance where it deems such approval
necessary or desirable, and shall, to the extent necessary to
maintain compliance with Rule 16b-3 under the Securities Exchange
Act of 1934 as in effect from time to time, require stockholder
approval as a condition to the effectiveness of any amendment or
modification of the Plan.
3. PARTICIPATION
Company officers and other key employees of the Company and its
subsidiaries who are recommended by the Chief Executive Officer of the
Company and who are approved by the Committee shall be eligible for
participation in the Plan during a Plan year.
4. TARGET AWARD LEVELS
After consultation with management, the Committee may designate target
award levels to be earned by participants for a given Plan year. Such
target awards may vary by management level.
5. PERFORMANCE GOALS
To the fullest extent possible, management shall establish performance
goals for participants to help it determine the awards it will
recommend for the Plan year. Such goals may relate to corporate
performance, divisional performance, and individual performance as
appropriate to the purpose of the Plan and the positions and
responsibilities of the participants.
6. DETERMINATION OF AWARDS
As soon as practicable following the close of each Plan year, the
Committee shall, after consultation with management, determine the
award earned by each participant for the Plan year. In special cases
of meritorious performance, after consultation with management, the
Committee may make awards to individuals who were not previously
designated as eligible for participation during the Plan year. If a
participant has died during the Plan year, an award may be made to the
participant's spouse or legal representative if the Committee so
determines.
7. COMMUNICATION
Participants shall be advised in writing of their participation in the
Plan and of any performance goals applicable to their awards.
8. PAYMENT OF AWARDS
Awards shall be payable in cash as soon after the close of the Plan
year as feasible; provided, however, that payment of part or all of
any award may be deferred in accordance with the terms of any
incentive deferral plan maintained from time to time by the Company.
(c) Any other provision of the Plan to the contrary notwithstanding,
except as otherwise determined by the Committee in accordance
with Paragraph 6(a) of the Company's Stock Ownership Guidelines
for Officers (the "Guidelines"), the following provisions shall
apply to the payment of an award to any participant who is
subject to the Guidelines and who had not met the applicable
minimum stock ownership level of the Guidelines as of the
December 31 immediately preceding the date of payment of an award
under the Plan.
The award to any such participant shall be paid part in cash and
part in the form of shares of Common Stock of the Company
("Shares"). The number of Shares issued under this provision
shall be equal to the number of Shares that would have been
necessary to bring the participant into compliance with the
Guidelines as of the December 31 immediately preceding the date
of payment of the award; provided, however, that in no event
shall more than half of the value of a participant's award be
paid in the form of Shares; and provided, further, that the part
of the award for any participant that is payable in Shares shall
not exceed the annual rate of base salary in effect for the
participant at the time of the award. The remainder of the
participant's award shall be paid in cash. Awards of Shares
shall be made without payment of a purchase price.
Any payment in accordance with this subsection (c) shall be
subject to the following terms and conditions:
(i) An award shall be converted into Shares by dividing (y) the
cash value of the part of the award to be paid in Shares by
(z) the arithmetic average of the high and low sales prices
of the Shares as reported on New York Stock Exchange
Composite Transactions on the date preceding the date on
which the award is paid. Any fractional Share shall be paid
in cash.
(ii) The mandatory share award provisions of this subsection (c)
shall not apply to the extent the participant has already
elected under the Company's New Management Incentive
Deferral Plan (y) to defer a portion of his or her award
under the Plan and (z) to have such deferred award be
credited with additional income based on shares of phantom
stock of the Company.
(iii) Except to the extent a participant has elected to have a
deferred award be credited with additional income based on
shares of phantom stock of the Company, any voluntary
deferral of the payment of part or all of an award under the
Plan shall apply only to the part of the award that is
payable in cash after the application of this subsection
(c); provided, however, that any such voluntary deferral
shall be reduced as necessary to ensure the payment of all
applicable payroll taxes.
(iv) To the extent a participant is subject to a mandatory
deferral of the payment of part or all of an award under the
Plan, the mandatory deferral shall apply first to the part
of the award that is payable in cash. To the extent the
award that would be paid in Shares remains subject to the
mandatory deferral, the payment that would otherwise be made
in the form of Shares shall instead be deferred under the
Company's New Management Incentive Deferral Plan to earn
income based on shares of phantom stock of the Company.
9. COMPANY STOCK
Shares reserved for issuance under the Plan may be authorized but
unissued shares, shares reacquired by the Company, or a combination of
both, as the Board may from time to time determine. If any stock
dividend is declared upon the Shares, or if there is any stock split,
stock distribution, or other recapitalization of the Company with
respect to the Shares, resulting in a split-up or combination or
exchange of shares, the Shares reserved for issuance under the Plan
shall be proportionately and appropriately adjusted.
10. EFFECTIVE DATE OF PLAN
The Plan as originally adopted was effective for the fiscal year
commencing January 1, 1983 and continued in effect thereafter as
amended from time to time. This amended and restated Plan shall be
effective January 1, 1996, subject to stockholder approval at the 1995
Annual Meeting, and shall continue in effect, as amended from time to
time, until it is terminated by the Board.
Executed and adopted this 21st day of April, 1995, pursuant to
action taken by the Board of Directors of Reynolds Metals Company at its
meeting on November 18, 1994, and approved by the Stockholders of Reynolds
Metals Company at the 1995 Annual Meeting.
REYNOLDS METALS COMPANY
By: Donald T. Cowles
Executive Vice President, Human
Resources and External Affairs
EXHIBIT 11
REYNOLDS METALS COMPANY AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(In millions, except share data)
EARNINGS PER SHARE:
In the first quarter of 1995, earnings per share equals net income divided
by the weighted-average number of common shares and common share
equivalents outstanding during the period. The number of common share
equivalents outstanding was based on the assumed conversion of the
Company's preferred stock ("PRIDES"). For the purpose of this computation,
the conversion rate of .93 share of common stock for each share of PRIDES
was based on the average market value of the Company's common stock during
the period ($50.65 per share). In the first quarter of 1994, earnings per
share equals net income, minus PRIDES dividends, divided by the
weighted-average number of common shares outstanding during the period.
Common share equivalents relating to the PRIDES were not included in the
first quarter of 1994 since their effect would have been anti-dilutive.
QUARTERS ENDED MARCH 31
_______________________________
1995 1994
_______________________________
Weighted-average shares outstanding:
Common shares 62,220,000 60,961,000
Common share equivalents 10,261,000 -
_______________________________
Total 72,481,000 60,961,000
===============================
Net income (loss) $82 $(21)
Less preferred stock dividends - 7
===============================
$82 $(28)
===============================
Earnings per share $1.13 $(0.46)
===============================
EARNINGS PER SHARE (FULLY DILUTED):
Earnings per share (fully diluted) equals net income divided by the
weighted-average number of common shares and common share equivalents
outstanding during the period. The number of common share equivalents
outstanding was based on the maximum potential issuance of common shares
upon conversion of PRIDES, which is one share of common for each share of
PRIDES. This computation was made for presentation purposes only since its
effect was not material in 1995 and was anti-dilutive in 1994. The
difference between the number of common share equivalents for the 1995 and
1994 periods is due to the PRIDES having been issued on January 25, 1994.
QUARTERS ENDED MARCH 31
_______________________________
1995 1994
_______________________________
Weighted-average shares outstanding:
Common shares 62,220,000 60,961,000
Common share equivalents 11,000,000 8,067,000
_______________________________
Total 73,220,000 69,028,000
===============================
Net income (loss) $82 $(21)
===============================
Earnings per share (fully diluted) $1.12 $(0.30)
===============================
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Reynolds
Metals Company Condensed Consolidated Balance Sheet (Unaudited) for March 31,
1995 and Consolidated Statement of Income (Unaudited) for the Quarter ended
March 31, 1995 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 38
<SECURITIES> 90
<RECEIVABLES> 1096<F1>
<ALLOWANCES> 20
<INVENTORY> 1029
<CURRENT-ASSETS> 2295
<PP&E> 6356
<DEPRECIATION> 3244
<TOTAL-ASSETS> 7428
<CURRENT-LIABILITIES> 1343
<BONDS> 1849
<COMMON> 881
0
505
<OTHER-SE> 953
<TOTAL-LIABILITY-AND-EQUITY> 7428
<SALES> 1651
<TOTAL-REVENUES> 1661
<CGS> 1392
<TOTAL-COSTS> 1392
<OTHER-EXPENSES> 107
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 43
<INCOME-PRETAX> 119
<INCOME-TAX> 37
<INCOME-CONTINUING> 82
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 82
<EPS-PRIMARY> 1.13
<EPS-DILUTED> 0
<FN>
<F1>This amount represents total receivables, since trade receivables are not
broken out separately at interim dates, in accordance with S-X 10-01(2).
</FN>
</TABLE>
