REYNOLDS METALS CO, 10-Q, 1996-05-14

REYNOLDS METALS CO
10-Q, 1996-05-14
PRIMARY PRODUCTION OF ALUMINUM

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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, 1996

[ ] 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, 1996, the Registrant had 63,670,434 shares of Common Stock, no
par value, outstanding and entitled to vote.

<PAGE>
PART I - FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS
--------------------

<TABLE>

CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
- --------------------------------------------------------------------------------------------------
Reynolds Metals Company
<CAPTION>
Quarter ended March 31
- --------------------------------------------------------------------------------------------------
(In millions, except per share amounts) 1996 1995
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Revenues
Net sales $1,662 $1,651
Equity, interest and other income 13 10
- --------------------------------------------------------------------------------------------------
1,675 1,661
- --------------------------------------------------------------------------------------------------

Costs and expenses
Cost of products sold 1,380 1,319
Selling, administrative and general expenses 111 104
Provision for depreciation and amortization 80 76
Interest - principally on long-term obligations 42 43
Operational restructuring costs 37 -
- --------------------------------------------------------------------------------------------------
1,650 1,542
- --------------------------------------------------------------------------------------------------

Income before income taxes and cumulative effect of accounting change 25 119
Taxes on income 8 37
- --------------------------------------------------------------------------------------------------

Income before cumulative effect of accounting change 17 82
Cumulative effect of accounting change (15) -
- --------------------------------------------------------------------------------------------------

Net income 2 82
Preferred stock dividends 9 9
- --------------------------------------------------------------------------------------------------

Net income (loss) available to common stockholders ($ 7) $ 73
==================================================================================================

Earnings per share
Average shares outstanding 64 72
Income before cumulative effect of accounting change $0.12 $1.13
Cumulative effect of accounting change (0.24) -
- --------------------------------------------------------------------------------------------------
Net income (loss) ($0.12) $1.13
==================================================================================================

Cash dividends per common share $0.35 $0.25

- --------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
- --------------------------------------------------------------------------------------------------
Reynolds Metals Company
<CAPTION>
March 31 December 31
- --------------------------------------------------------------------------------------------------
(In millions) 1996 1995
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 37 $ 39
Receivables, less allowances of $20 (1995 - $20) 1,066 1,043
Inventories 962 891
Prepaid expenses 49 41
- --------------------------------------------------------------------------------------------------
Total current assets 2,114 2,014
Unincorporated joint ventures and associated companies 1,284 1,286
Property, plant and equipment 6,640 6,600
Less allowances for depreciation and amortization 3,415 3,377
- --------------------------------------------------------------------------------------------------
3,225 3,223
Deferred taxes and other assets 1,221 1,217
- --------------------------------------------------------------------------------------------------
Total assets $7,844 $7,740
==================================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable, accrued and other liabilities $1,089 $1,155
Short-term borrowings 308 111
Long-term debt 116 101
- --------------------------------------------------------------------------------------------------
Total current liabilities 1,513 1,367
Long-term debt 1,839 1,853
Postretirement benefits 1,232 1,213
Environmental, deferred taxes and other liabilities 676 690
Stockholders' equity
Preferred stock 505 505
Common stock 942 941
Retained earnings 1,227 1,256
Cumulative currency translation adjustments (27) (22)
Pension liability adjustment (63) (63)
- --------------------------------------------------------------------------------------------------
Total stockholders' equity 2,584 2,617
- --------------------------------------------------------------------------------------------------

Total liabilities and stockholders' equity $7,844 $7,740
==================================================================================================
</TABLE>

<TABLE>
CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED)
- --------------------------------------------------------------------------------------------------
Reynolds Metals Company

<CAPTION>
Three Months Ended
March 31
- --------------------------------------------------------------------------------------------------
(In millions) 1996 1995
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Operating activities
Net income $ 2 $ 82
Adjustments to reconcile to net cash used in operating activities:
Depreciation and amortization 80 76
Operational restructuring costs 37 -
Cumulative effect of accounting change 15 -
Changes in operating assets and liabilities:
Accounts payable, accrued and other liabilities (56) (109)
Receivables (28) (111)
Inventories (78) (161)
Other (53) (23)
- --------------------------------------------------------------------------------------------------
Net cash used in operating activities ( 81) (246)

Investing activities
Capital investments:
Operational (45) (42)
Strategic (51) (43)
Investments (2) -
Proceeds from sale of assets - 28
Maturities of investments in debt securities - 36
Other investing activities - net 7 5
- --------------------------------------------------------------------------------------------------
Net cash used in investing activities ( 91) ( 16)

Financing activities
Increase in borrowings (principally short-term) 201 17
Cash dividends paid (31) (25)
Net cash provided by (used in) financing activities 170 ( 8)

Cash and cash equivalents
Net decrease ( 2) (270)
At beginning of period 39 308
- --------------------------------------------------------------------------------------------------
At end of period $ 37 $ 38
==================================================================================================
/TABLE
<PAGE>

REYNOLDS METALS COMPANY AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Quarters Ended March 31, 1996 and 1995

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 interim
period of 1996 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1996. 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,
1995.

Note B - Operational Restructuring Costs

In the first quarter of 1996, the Company recorded operational restructuring
costs of $37 million, which relate principally to employee termination costs
associated with the planned closing of the Company's aluminum beverage can
plant located in Houston, Texas. The facility's 1.4-billion-can annual
capacity was determined to be in excess of the Company's domestic customer
needs due to productivity gains within the Company's can-making system and
slower overall growth in the domestic demand for cans. The Company intends to
transfer some equipment to other of its domestic and international can
operations and sell the plant and property.

Note C - Cumulative Effect of Accounting Change

In the first quarter of 1996, the Company adopted Statement of Financial
Accounting Standards No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of ("SFAS No. 121"). The
Company recognized an after-tax loss of $15 million for the cumulative effect
of adopting SFAS No. 121. The loss was for the impairment of assets held for
sale, principally undeveloped land.

Note D - Earnings per share

In the first quarter of 1996, earnings per share equals net income, minus
dividends on the Company's preferred stock ("PRIDES"), divided by the weighted-
average number of common shares outstanding during the period. 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 PRIDES. For the purpose of this computation, the
conversion rate of 0.93 share of common stock for each share of PRIDES was
based on the average market value of the Company's common stock during the 1995
period ($50.65 per share). Common share equivalents relating to the PRIDES
were not included in the first quarter of 1996 since their effect would have
been anti-dilutive.

Note E - Financing arrangements

In the first quarter of 1996, the Company entered into $400 million of interest
rate swap agreements, which effectively convert a portion of its debt
(principally medium-term notes) from fixed-rate to variable-rate. Under these
agreements, payments are received based on a fixed rate (6.0%) and made based
on a variable rate (5.3% at March 31, 1996). These arrangements mature in
2001. The variable rate is based on the London Interbank Offer Rate.

Note F - Contingent liabilities

As previously disclosed in the Company's annual report on Form 10-K for the
year ended December 31, 1995, 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 G - Canadian Reynolds Metals Company, Ltd. and Reynolds Aluminum Company
of Canada, Ltd.

Financial statements and financial statement schedules for Canadian Reynolds
Metals Company, Ltd. and Reynolds Aluminum Company of Canada, Ltd. have been
omitted because certain securities registered under the Securities Act of
1933, of which these entities are obligors (thus subjecting them 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 these companies 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:

Note G - Canadian Reynolds Metals Company, Ltd. and Reynolds Aluminum Company
of Canada, Ltd.-continued

Canadian Reynolds Metals Company, Ltd.

Quarter ended March 31
--------------------------
1996 1995
--------------------------
Net Sales:
Customers $ 48 $ 42
Parent company 169 200
--------------------------
$217 $242

Cost of products sold 154 167

Net income (loss) $ 37 $ 51

March 31 December 31
1996 1995
----------------------------

Current assets $ 240 $ 112
Noncurrent assets 1,260 1,266
Current liabilities (162) (91)
Noncurrent liabilities (609) (617)

Reynolds Aluminum Company of Canada, Ltd.

Quarter ended March 31
--------------------------
1996 1995
--------------------------
Net Sales:
Customers $117 $113
Parent company 143 179
--------------------------
$260 $292

Cost of products sold 199 215

Net income (loss) $ 32 $ 50

March 31 December 31
1996 1995
---------------------------

Current assets $357 $221
Noncurrent assets 1,403 1,407
Current liabilities (293) (199)
Noncurrent liabilities (637) (632)

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
---------------------------------------------------------------

INTRODUCTION
- ------------

The following information should be read in conjunction with the
consolidated financial statements and related footnotes included in the
Company's annual report on Form 10-K for the year ended December 31, 1995,
along with the consolidated financial statements and related footnotes included
in and referred to in this report. In the tables, dollars are in millions,
except per share and per pound amounts, and shipments are in thousands of
metric tons. A metric ton is equivalent to 2,205 pounds.

RESULTS OF OPERATIONS
- ---------------------

The Company had net income, before a restructuring charge and the effects
of an accounting change, of $40 million ($.48 per share). Following an after-
tax restructuring charge of $23 million ($.36 per share) and the cumulative
effect of an accounting change of $15 million ($.24 per share), the Company had
net income of $2 million. After deducting preferred stock dividends, the
Company had a net loss per common share of 12 cents. Net income for the first
quarter of 1995 was $82 million ($1.13 per share).

The restructuring charge relates principally to employee termination costs
associated with the planned closing of an aluminum beverage can plant located
in Houston, Texas. The accounting change resulted from adopting a new
accounting standard (SFAS No. 121) covering impaired assets held for sale,
principally undeveloped land.

The Company is experiencing what it believes is a short-term softness in
the overall global aluminum market, primarily attributable to a protracted soft
landing in the U.S. economy and continued weakness in Europe and other areas.
The economic situation has caused end users to continue liquidating excess
inventories, and these conditions have resulted in lower realized prices for
primary aluminum. Other factors affecting first quarter results include higher
costs for certain raw materials, particularly in the production of alumina, and
severe winter weather conditions, which resulted in facility curtailments and
lower volumes, particularly in the distribution and construction products
businesses.
<PAGE>
<TABLE>
OPERATING AREA ANALYSIS
- -----------------------

Shipments and Net Sales
- -----------------------
<CAPTION>
First Quarter 1996 First Quarter 1995
---------------------------------------------------
Shipments Net Sales Shipments Net Sales
---------------------------------------------------
<S> <C> <C> <C> <C>
Finished Products and Other Sales
Packaging and containers
Aluminum 83 $438 82 $402
Nonaluminum 130 123
Other aluminum 38 133 44 151
Other nonaluminum 127 128
---------------------------------------------------
121 828 126 804
---------------------------------------------------
Production and Processing
Primary aluminum 81 142 61 133
Sheet and plate 91 292 106 330
Extrusions 51 178 56 195
Other aluminum 39 113 43 123
Other nonaluminum 109 66
---------------------------------------------------
262 834 266 847
---------------------------------------------------
Total 383 $1,662 392 $1,651
===================================================

Average realized price per pound:
Fabricated aluminum products $1.83 $1.73
Primary aluminum $0.80 $0.99
</TABLE>
<PAGE>
SHIPMENTS AND NET SALES
- -----------------------

Finished Products and Other Sales
- ---------------------------------

Aluminum packaging and container shipments were slightly higher in the
first quarter of 1996 due primarily to higher shipments of laminated aluminum
foil attributable to the acquisition in the second quarter of 1995 of a
laminated aluminum products plant. The decrease in other aluminum shipments
was due principally to severe winter weather conditions, which adversely
affected the Company's construction products and distribution businesses.

The increase in net sales was due principally to higher prices for cans
and ends and certain foil products and higher nonaluminum sales. The increase
in nonaluminum sales was mostly attributable to the acquisition of a flexible
packaging manufacturing operation in the fourth quarter of 1995. These
increases were somewhat offset by the lower shipping volumes, particularly for
the Company's construction products and distribution businesses.

Production and Processing

- -------------------------

Primary aluminum shipments fluctuate from period to period because of
variations in internal requirements and changes in customer demand for
value-added foundry ingot and billet. The acquisition of an additional 25%
interest in the Becancour, Quebec primary aluminum production facility in the
fourth quarter of 1995 contributed to the increase in primary aluminum
shipments in the first quarter of 1996, in addition to providing primary
aluminum for use in the Company's fabricating operations. The decrease in
average realized prices for primary aluminum was attributable to weak economic
conditions and the continuing excess inventory liquidation process.

SHIPMENTS AND NET SALES - continued
- -----------------------------------

Production and Processing - continued
- -------------------------------------

The decrease in shipments for the other product groups in this operating
area was also attributable to the economic and inventory situations described
under "Results of Operations" as well as the severe winter weather. These
conditions generally affected most markets served by this operating area.

The increase in nonaluminum sales was due to strong demand for alumina and
carbon products. The strong demand for alumina was met with the return to full
production during late 1995 of the Company's Texas alumina refinery.

Costs and Expenses
- ------------------

The increase in cost of products sold was due to higher costs for
purchased materials, particularly in the production of alumina, and lower
capacity utilization at aluminum fabricating facilities. Costs were favorably
impacted by performance improvement programs and lower outside purchases of
primary aluminum due to the acquisition of an additional 25% interest in
the Becancour, Quebec primary aluminum production facility in the fourth
quarter of 1995.

Selling, administrative and general expenses increased due to a higher
level of advertising.

In the first quarter of 1996, the Company recorded operational
restructuring costs of $37 million which relate principally to employee
termination costs associated with the planned closing of an aluminum beverage
can plant located in Houston, Texas. The Company's strategy for its U.S. can
business is to aggressively reduce costs and increase production efficiencies
through modernization programs and new technologies. The closing of the
Houston facility will provide the Company with annual cost savings of
approximately $18 million. The facility's 1.4-billion-can annual capacity was
determined to be in excess of the Company's domestic customer needs due to
productivity gains within the Company's can-making system and slower overall
growth in the domestic demand for cans. As a result of improved efficiencies
system-wide, the Company will maintain its current annual worldwide aluminum
beverage can production capacity. Operations at the facility will cease in
early 1997, at which time the Company intends to transfer some equipment to its
other domestic and international can operations and sell the plant and
property.

On a quarterly basis, the Company updates 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
requirements which may subsequently be determined. Such costs could be
material to future quarterly or annual results of operations.

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.

SHIPMENTS AND NET SALES - continued
- -----------------------------------

Cumulative Effect of Accounting Change
- --------------------------------------

Operating Outlook
- -----------------

The Company continues to remain optimistic regarding favorable, long-term
aluminum industry fundamentals. The Company expects momentum to build as 1996
progresses, based on the Company's projections of world economic growth of 3%
and growth in world aluminum consumption of 3.5% to 4%. This will be fueled
by market strength in the U.S., Latin America and Asia. The Company expects
1996 to close out on a positive note, with a much stronger second half.

LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------

Working Capital
- ---------------

Working capital totaled $601 million at March 31, 1996, compared to $647
million at December 31, 1995. The ratio of current assets to current
liabilities was 1.4/1 at March 31, 1996, compared to 1.5/1 at December 31,
1995.

Operating Activities
- --------------------

In the first quarter of 1996, cash generated from operations was
supplemented with short-term borrowings principally to reduce accounts payable,
accrued and other liabilities and to finance an increase in inventories.
Inventories increased in anticipation of higher shipping volumes in the second
quarter of 1996.

Investing Activities
- --------------------

Capital investments of $98 million in the first quarter of 1996 included
$45 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
the modernization of aluminum can and end facilities; expansions at foil and
plastic film facilities; quality improvements at a can sheet facility in
Alabama; and the modification and equipping of a purchased facility in
Wisconsin to produce aluminum wheels.

Financing Activities
- --------------------

Cash provided by financing activities in the first quarter of 1996 was
used to fund operating and investing activities. The principal source of funds
was from the issuance of $165 million of commercial paper at a weighted-average
rate of 5.5%.

In the first quarter of 1996, the Company entered into $400 million of
interest rate swap agreements which effectively convert a portion of its debt
(principally medium-term notes) from fixed-rate to variable-rate. Under these
agreements, payments are received based on a fixed rate (6.0%) and made based
on a variable rate (5.3% at March 31, 1996). These arrangements mature in
2001. The variable rate is based on the London Interbank Offer Rate.

LIQUIDITY AND CAPITAL RESOURCES - continued
- -------------------------------------------

Financial Outlook
- -----------------

Capital investments in 1996 are expected to total $500 million.
Approximately 47% of this amount will be for operating requirements. The
remainder will be for continuing expenditures for those performance
improvement and strategic investment projects underway and an interest in a
Chinese joint venture as discussed below. Capital investments in 1996 are
expected to be funded with cash generated from operations, supplemented with
short-term borrowings as needed. These short-term borrowings are expected to
be repaid later in the year as economic and business conditions improve.

Early in the second quarter of 1996, the Company announced that a wholly
owned subsidiary had acquired an interest in a joint venture in China that
produces aluminum foil and extrusions. The operation, Bohai Aluminium
Industries, Ltd., includes a large, aluminum fabricating facility that was
built in the mid-1980's and expanded later that decade. The facility will
manufacture aluminum foil, primarily for the food, pharmaceutical and tobacco
industries, and extrusions for the automotive and building products markets.

The Company believes its available financial resources, 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, 1996, $150 million
of the Company's $1.65 billion shelf registration remained available for the
issuance of debt securities.

RISK FACTORS
- ------------

This section should be read in conjunction with Part I, Items 1
(Business), 3 (Legal Proceedings) and 7 (Management's Discussion and Analysis
of Financial Condition and Results of Operations) of the Company's annual
report on Form 10-K for the year ended December 31, 1995 and Part II, Item 1
(Legal Proceedings) of this report.

This report contains, and oral communications made by or on behalf of the
Company may contain, forecasts, projections, estimates, statements of
management's plans and objectives for the Company and other forward-looking
statements. The Company's expectations for the future and related
forward-looking statements are based on a number of assumptions and forecasts
as to world economic growth and other economic indicators (including
rates of inflation, industrial production, housing starts and light vehicle
sales), trends in the Company's key markets, global aluminum supply and demand
conditions, and aluminum ingot prices, among other things. By their nature,
forward-looking statements involve risk and uncertainty, and various factors
could cause the Company's actual results to differ from those projected in a
forward-looking statement or affect the extent to which a particular projection
is realized.

As 1996 progresses, the Company expects market conditions to improve based
on its projections of world economic growth of just over 3%, and world aluminum
consumption growth of 3.5% - 4%. The Company expects this growth to be fueled
by anticipated market strength in the U.S., Latin America and Asia, with an
expected recovery in Japan and growth of approximately 10% in other parts
of Asia. After the current liquidation of excess inventories by customers ends,
and barring a recession in any major world economy, the Company expects
improved conditions in aluminum industry supply/demand fundamentals to continue
for the next several years. The Company's outlook for growth in aluminum
consumption for the remainder of this decade is an average of 4% per year. The
Company expects greater use of aluminum around the world in automobiles and
other light vehicles; a slowing in the growth in U.S. aluminum beverage can
shipments to about 2% per year and a 5% annual increase in global

RISK FACTORS - continued
- ------------------------

shipments, with rapid growth of the aluminum beverage can market in Latin
America, Asia, the Middle East, and other developing economies; and increased
use of aluminum in the building and construction markets, particularly in
Eastern Europe and the Commonwealth of Independent States and as a result of
new construction projects in emerging markets.

Economic and/or market conditions other than as forecast by the Company in
the preceding paragraph, particularly in the U.S., Japan and Germany (which are
large consumers of aluminum) and in South America, could cause the Company's
actual results to differ from those projected in a forward-looking statement or
affect the extent to which a particular projection is realized.

The following factors also could affect the Company's results:

- - Primary aluminum is an internationally traded commodity. The price of
primary aluminum is subject to worldwide market forces of supply and
demand and other influences. Prices can be volatile. The Company's
strategy of being a vertically integrated producer of value-added aluminum
products, and its use of contractual arrangements including fixed-price
sales contracts, fixed-price supply contracts, and forward, futures and
option contracts, reduces its exposure to this volatility but does not
eliminate it.

- - The markets for most aluminum products are highly competitive. Certain of
the Company's competitors are larger than the Company in terms of total
assets and operations and have greater financial resources. Certain
foreign governments are involved in the operation and/or ownership of
certain competitors, and may be motivated by political as well as economic
considerations. In addition, aluminum competes with other materials, such
as steel, vinyl, plastics and glass, among others, for various
applications in the Company's key markets. Unanticipated actions or
developments by the Company's competitors and/or the willingness of
customers to accept substitutions for the products sold by the Company
could affect results.

- - The Company spends substantial capital and operating amounts relating to
ongoing compliance with environmental laws. In addition, the Company is
involved in remedial investigations and actions in connection with past
disposal of wastes. 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.

- - Unanticipated material legal proceedings or investigations, or the
disposition of those currently pending against the Company other than as
anticipated by management and counsel, could affect the Company's results.

- - Changes in the costs of power, resins, caustic soda, green coke and other
raw materials can affect results. A new five-year contract with the
Bonneville Power Administration for the period October 1996 - September
2001 would provide a fixed rate for electrical power that is 16% less than
rates now in effect for the Company's Longview, Washington and
Troutdale, Oregon primary aluminum production plants. The new contract is
subject to regulatory review and approval and is critical to the
competitive position of those two smelters.

RISK FACTORS - continued
- ------------------------

- - The Company's principal labor contracts with the United Steelworkers of
America and the Aluminum, Brick and Glass Workers International Union,
respectively, will expire by their terms in May 1996. In the event of a
strike at one or more Company facilities, production could be affected at
struck facilities and at non-struck facilities supplied by them. In
addition, the terms of the new union contracts, or failure to enter into
new contracts in timely fashion, could affect labor costs.

- - The Company's key transportation and building and construction markets are
cyclical, and sales to those markets in particular can be influenced by
economic conditions.

In addition to the factors referred to above, the Company is exposed to
general financial, political, economic and business risks in connection with
its worldwide operations. The Company continues to evaluate and manage its
operations in a manner to mitigate the effects from exposure to such risks. In
general, the Company's expectations for the future are based on the assumption
that conditions relating to costs, currency values, competition and the legal,
regulatory, financial, political and business environments in the economies and
markets in which the Company operates will not change significantly overall.

PART II - OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS
-----------------

As previously reported in the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1995, a private lawsuit styled Hammons v. Alcan
Aluminum Corp. et al. was filed in the Superior Court of California for the
County of Los Angeles on March 5, 1996 against the Registrant and other
aluminum producers. The original complaint sought estimated damages of
approximately $13 billion. In subsequently filed court documents, the
plaintiff's attorney has indicated that damages should have been sought
covering a two-year period (in an estimated amount of approximately $26
billion) rather than a one-year period as in the original complaint. The
Registrant is confident that its conduct has been in compliance with the
antitrust laws.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------

The Annual Meeting of Stockholders of the Registrant was held on April 17,
1996. The stockholders (i) elected the thirteen nominees named in the
Registrant's proxy statement to serve as Directors, (ii) approved an amendment
to the Registrant's Performance Incentive Plan, (iii) approved the Registrant's
1996 Nonqualified Stock Option Plan, and (iv) ratified the selection of Ernst &
Young LLP as independent auditors of the Registrant for 1996. 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

Number Of Votes Number Of Votes
Name Cast "For" Withheld
---------------------- --------------- ---------------

Patricia C. Barron 62,349,180 475,835
William O. Bourke 62,314,757 510,258
John R. Hall 62,350,590 474,425
Robert L. Hintz 62,348,608 476,407
Richard G. Holder 62,323,892 501,123
William H. Joyce 62,352,842 472,173
Mylle Bell Mangum 62,352,740 472,275
D. Larry Moore 62,352,107 472,908
Randolph N. Reynolds 62,351,073 473,942
James M. Ringler 62,351,709 473,306
Henry S. Savedge, Jr. 62,354,295 470,720
Jeremiah J. Sheehan 62,350,879 474,136
Joe B. Wyatt 62,357,655 467,360

(ii) Approval of Amendment to Performance Incentive Plan

Number of Votes Cast "For" 59,859,529
Number of Votes Cast "Against" 2,604,984
Number of Abstentions 360,402

(iii) Approval of 1996 Nonqualified Stock Option Plan

Number of Votes Cast "For" 50,691,761
Number of Votes Cast "Against" 11,719,629
Number of Abstentions 414,600

(iv) Ratification of Selection of Ernst & Young LLP as Independent
Auditors

Number of Votes Cast "For" 62,491,251
Number of Votes Cast "Against" 175,909
Number of Abstentions 157,855

Item 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------

(a) Exhibits

See Index to Exhibits.

(b) Reports on Form 8-K

The Registrant filed no reports on Form 8-K during the first
quarter of 1996.

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 14, 1996

INDEX TO EXHIBITS

EXHIBIT 2 - None

* EXHIBIT 3.1 - Restated Certificate of Incorporation, as amended
to the date hereof. (Registration Statement No.
333-00929 on Form S-8, dated February 14, 1996,
EXHIBIT 4.1)

EXHIBIT 3.2 - By-Laws, as amended to the date hereof

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))
_______________________
*Incorporated by reference.

* EXHIBIT 4.13 - Articles of Continuance of Societe d'Aluminium
Reynolds du Canada, Ltee/Reynolds Aluminum
Company of Canada, Ltd. (formerly known as
Canadian Reynolds Metals Company, Limited --
Societe Canadienne de Metaux Reynolds, Limitee)
("REYCAN"), as amended to the date hereof. (File
No. 1-1430, 1995 Form 10-K Report, EXHIBIT 4.13)

* EXHIBIT 4.14 - By-Laws of REYCAN, as amended to the date
hereof. (File No. 1-1430, 1995 Form 10-K Report,
EXHIBIT 4.14)

* EXHIBIT 4.15 - Articles of Incorporation of Societe Canadienne de
Metaux Reynolds, Ltee/Canadian Reynolds Metals
Company, Ltd. ("CRM"), as amended to the date
hereof. (File No. 1-1430, 1995 Form 10-K Report,
EXHIBIT 4.15)

* EXHIBIT 4.16 - By-Laws of CRM, as amended to the date hereof.
(File No. 1-1430, 1995 Form 10-K Report, EXHIBIT
4.16)

* EXHIBIT 4.17 - Indenture dated as of April 1, 1993 among REYCAN,
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 4.18 - First Supplemental Indenture, dated as of December
18, 1995 among REYCAN, Reynolds Metals Company,
CRM and The Bank of New York, as Trustee. (File
No. 1-1430, 1995 Form 10-K Report, EXHIBIT 4.18)

* EXHIBIT 4.19 - 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. (File No. 1-1430, Form 10-Q Report for the
Quarter Ended March 31, 1995, EXHIBIT 10.4)

* 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)

_______________________
*Incorporated by reference.

* 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 1995 Form 10-K Report. (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 - 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 10.18 - 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)

____________________________
* Incorporated by reference.

* EXHIBIT 10.19 - 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 10.20 - Letter Agreement dated January 18, 1991 between
Reynolds Metals Company and William O. Bourke.
(File No. 1-1430, 1990 Form 10-K Report, EXHIBIT
10.27)

* EXHIBIT 10.21 - 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 10.22 - 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 10.23 - 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 10.24 - 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 10.25 - 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 10.26 - 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 10.27 - 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 10.28 - 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 10.29 - 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 10.30 - 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)

____________________________
* Incorporated by reference.

* EXHIBIT 10.31 - 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 10.32 - 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 10.33 - 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 10.34 - Form of Split Dollar Life Insurance Agreement
(Trustee Owner, Trustee Pays Premiums). (File
No. 1-1430, Form 10-Q Report for the Quarter
Ended June 30, 1995, EXHIBIT 10.34)

* EXHIBIT 10.35 - Form of Split Dollar Life Insurance
Agreement (Trustee Owner, Employee Pays Premium).
(File No. 1-1430, Form 10-Q Report for the
Quarter Ended June 30, 1995, EXHIBIT 10.35)
* EXHIBIT 10.36 - Form of Split Dollar Life Insurance Agreement
(Employee Owner, Employee Pays Premium). (File
No. 1-1430, Form 10-Q Report for the Quarter
Ended June 30, 1995, EXHIBIT 10.36)

* EXHIBIT 10.37 - Form of Split Dollar Life Insurance Agreement
(Third Party Owner, Third Party Pays Premiums).
(File No. 1-1430, Form 10-Q Report for the
Quarter Ended June 30, 1995, EXHIBIT 10.37)

* EXHIBIT 10.38 - Form of Split Dollar Life Insurance Agreement
(Third Party Owner, Employee Pays Premiums).
(File No. 1-1430, Form 10-Q Report for the
Quarter Ended June 30, 1995, EXHIBIT 10.38)

EXHIBIT 11 - Computation of Earnings Per Share

EXHIBIT 15 - None

EXHIBIT 18 - None

EXHIBIT 19 - None

____________________________
* Incorporated by reference.

EXHIBIT 22 - None

EXHIBIT 23 - None

EXHIBIT 24 - None

EXHIBIT 27 - Financial Data Schedule

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 3.2

By-Laws

REYNOLDS METALS COMPANY

(Incorporated under the Laws of Delaware)

<PAGE>

By-Laws

REYNOLDS METALS COMPANY

Table of Contents
-----------------

Page
ARTICLE I - Stock
Section 1. Certificates for Stock.............................. 1
Section 2. Transfers of Stock.................................. 1
Section 3. Holders of Record................................... 1
Section 4. Lost or Destroyed Certificates...................... 2

ARTICLE II - Stockholders' Meetings
Section 1. Place of Meetings................................... 2
Section 2. Annual Meetings..................................... 2
Section 3. Special Meetings.................................... 2
Section 4. Matters to be Brought Before
Stockholders Meetings............................... 2
Section 5. Notice of Meetings.................................. 3
Section 6. Quorum.............................................. 4
Section 7. Adjourned Meetings.................................. 4
Section 8. Inspectors of Election.............................. 4
Section 9. List of Stockholders................................ 5
Section 10. Voting.............................................. 5
Section 11. Consents in Writing................................. 5

ARTICLE III - Board of Directors
Section 1. Number; Term of Office; Powers...................... 6
Section 2. Resignations........................................ 6
Section 3. Vacancies........................................... 6
Section 4. Annual Meeting...................................... 6
Section 5. Regular Meetings.................................... 6
Section 6. Special Meetings.................................... 6
Section 7. Notice of Meetings.................................. 7
Section 8. Quorum; Adjourned Meetings; Required Vote........... 7
Section 9. Committees.......................................... 7
Section 10. Compensation........................................ 8
Section 11. Consents in Writing................................. 8
Section 12. Participation by Conference Telephone............... 8

Table of Contents, Continued

ARTICLE IV - Officers
Section 1. Officers............................................ 8
Section 2. Chairman of the Board............................... 9
Section 3. Vice Chairmen of the Board.......................... 9
Section 4. President........................................... 9
Section 5. Vice Presidents..................................... 9
Section 6. General Counsel..................................... 9
Section 7. Secretary........................................... 9
Section 8. Treasurer........................................... 9
Section 9. Controller.......................................... 10
Section 10. Other Officers and Assistant Officers............... 10
Section 11. Term of Office; Vacancies........................... 10
Section 12. Removal............................................. 10

ARTICLE V - Dividends and Finance
Section 1. Dividends........................................... 10
Section 2. Deposits; Withdrawals; Notes and Other Instruments.. 10
Section 3. Fiscal Year......................................... 10

ARTICLE VI - Books and Records; Record Date
Section 1. Books and Records................................... 11
Section 2. Record Date......................................... 11

ARTICLE VII - Notices
Section 1. Notices............................................. 12
Section 2. Waivers of Notice................................... 12

ARTICLE VIII - Contracts
Section 1. Interested Directors or Officers.................... 12

ARTICLE IX - Seal
Section 1. Seal................................................ 13

ARTICLE X - Indemnification
Section 1. Indemnification in Third Party Actions............. 13
Section 2. Indemnification in an Action by or in the Right of
the Corporation.................................... 14
Section 3. Indemnification as of Right........................ 14
Section 4. Determination of Indemnification................... 15
Section 5. Advance for Expenses............................... 15
Section 6. General Provisions................................. 15

ARTICLE XI - Amendments
Section 1. Amendments......................................... 16
<PAGE>
By-Laws

REYNOLDS METALS COMPANY

(Incorporated under the Laws of Delaware)

ARTICLE I - Stock

1. Certificates for Stock. Certificates of Stock shall be
issued in numerical order, be signed by the Chairman of the Board
of Directors, a Vice Chairman of the Board of Directors, the
President or a Vice President, and by the Secretary or an
Assistant Secretary, or the Treasurer or an Assistant Treasurer,
and sealed with the corporate seal; provided, that where any
Certificate of Stock is signed by a duly appointed and authorized
Transfer Agent or Registrar the signatures of the Chairman of the
Board of Directors, Vice Chairman of the Board of Directors, the
President, Vice President, Secretary, Assistant Secretary,
Treasurer or Assistant Treasurer may be facsimile, engraved or
printed, and the seal of the corporation on any such Certificate
of Stock may be facsimile, engraved or printed. In case any
officer, transfer agent or registrar who has signed or whose
facsimile signature has been placed upon a certificate shall have
ceased to be such officer, transfer agent or registrar before
such certificate is issued, it may be issued by the corporation
with the same effect as if he or she were such officer, transfer
agent or registrar at the date of issue.

2. Transfers of Stock. Transfers of stock shall be made
only upon the books of the corporation, and only by the person
named in the certificate or by attorney, lawfully constituted in
writing, and only upon surrender of the certificate therefor.
The directors may by resolution make reasonable regulations for
the transfers of stock.

3. Holders of Record. Registered stockholders only shall
be entitled to be treated by the corporation as the holders in
fact of the stock standing in their respective names and the
corporation shall not be bound to recognize any equitable or
other claim to or interest in any share on the part of any other
person, whether or not it shall have express or other notice
thereof, except as expressly provided by the laws of Delaware.

4. Lost or Destroyed Certificates. In case of loss or
destruction of any certificate of stock another may be issued in
its place upon satisfactory proof of such loss or destruction and
upon the giving of a satisfactory bond of indemnity to the
corporation, all as determined either expressly by the directors
or pursuant to general authority granted by them.

ARTICLE II - Stockholders' Meetings

1. Place of Meetings. Meetings of the stockholders shall
be held at such place, within or outside the State of Delaware,
as the Board of Directors may determine.

2. Annual Meeting. The annual meeting of the stockholders
of the corporation, for the election of directors to succeed
those whose terms expire, and for the transaction of such other
business as may come before the meeting, shall be held on the
first Wednesday after April 15th of each year, if not a legal
holiday, and if a legal holiday, then on the first business day
following, at 10:00 a.m., or on such other date and at such other
time as may be fixed by the Board of Directors. The annual
meeting of the stockholders may be postponed by the Board of
Directors upon public notice given before the date previously
scheduled for such meeting. If the annual meeting of the
stockholders be not held as herein prescribed, the election of
directors may be held at any meeting thereafter called pursuant
to these By-Laws.

3. Special Meetings. Special meetings of the stockholders
may be called by the Chairman of the Board of Directors, or a
Vice Chairman of the Board of Directors, or the President or by
the Board of Directors, and shall be called at any time by the
Board of Directors upon the request in writing of stockholders
entitled to cast a majority of the votes which all stockholders
are entitled to cast. Such request must state the purpose of the
meeting.

4. Matters to be Brought Before Stockholders Meetings.
Except as otherwise provided by law, at any annual or special
meeting of stockholders only such business shall be conducted as
shall have been properly brought before the meeting in accordance
with this Section.

In order to be properly brought before the meeting,
such business must have either been (i) specified in the written
notice of the meeting (or any supplement thereto) given to
stockholders of record on the record date for such meeting by or
at the direction of the Board of Directors, (ii) brought before
the meeting at the direction of the Board of Directors or the
officer presiding over the meeting, or (iii) specified in a
written notice given by or on behalf of a stockholder of record
on the record date for such meeting entitled to vote thereat or a
duly authorized proxy for such stockholder, in accordance with
all of the following requirements.

A notice referred to in clause (iii) hereof must be
delivered personally to, or mailed to and received at, the
principal executive office of the corporation, addressed to the
attention of the Secretary, not more than ten (10) days after the
date of the initial notice referred to in clause (i) hereof, in
the case of business to be brought before a special meeting of
stockholders, and not less than thirty (30) days prior to the
first anniversary date of the initial notice referred to in
clause (i) hereof of the previous year's annual meeting, in the
case of business to be brought before an annual meeting of
stockholders, provided, however, that such notice shall not be
required to be given more than ninety (90) days prior to an
annual meeting of stockholders. Such notice referred to in
clause (iii) hereof shall set forth:

(a) a full description of each such item of business
proposed to be brought before the meeting;

(b) the name and address of the person proposing to bring
such business before the meeting;

(c) the class and number of shares held of record, held
beneficially and represented by proxy by such person as of the
record date for the meeting (if such date has then been made
publicly available) and as of the date of such notice;

(d) if any item of such business involves a nomination for
director, all information regarding each such nominee that would
be required to be set forth in a definitive proxy statement filed
with the Securities and Exchange Commission pursuant to Section
14 of the Securities Exchange Act of 1934, as amended, or any
successor thereto and the written consent of each such nominee to
serve if elected; and

(e) all other information that would be required to be
filed with the Securities and Exchange Commission if, with
respect to the business proposed to be brought before the meet
ing, the person proposing such business was a participant in a
solicitation subject to Section 14 of the Securities Exchange Act
of 1934, as amended, or any successor thereto.

No business shall be brought before any meeting of
stockholders of the corporation otherwise than as provided in
this Section.

5. Notice of Meetings. Written notice of the place, date
and hour of the annual and of all special meetings of the
stockholders and, in the case of special meetings, of the purpose
or purposes for which such special meeting is called, shall be
given in the manner specified in Section l of Article VII of
these By-Laws not less than ten (10) nor more than sixty (60)
days prior to the meeting, to each stockholder of record of the
corporation entitled to vote thereat. Business transacted at all
special meetings shall be confined to the purposes stated in the
notice.

6. Quorum. A quorum at any annual or special meeting of
the stockholders shall consist of the presence, in person or by
proxy, of stockholders entitled to cast a majority of the votes
which all stockholders are entitled to cast, except as otherwise
specifically provided by law or in the Certificate of
Incorporation.

7. Adjourned Meetings. Whether or not a quorum is present
at a properly called stockholders' meeting, the meeting may be
adjourned from time to time by the Chairman of the meeting or by
a majority in interest of those present in person or by proxy and
entitled to vote thereat. At any such adjourned meeting at which
a quorum shall be present, any business may be transacted which
might have been transacted at the meeting as originally notified.
If the adjournment is for more than thirty (30) days, or if after
the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting; otherwise,
no notice of such adjourned meeting need be given if the time and
place thereof are announced at the meeting at which the
adjournment is taken. The absence from any meeting of
stockholders holding the number of shares of stock of the
corporation required by law, the Certificate of Incorporation or
these By-Laws for action upon any given matter shall not prevent
action at such meeting upon any other matter or matters which may
properly come before the meeting, if there shall be present
thereat in person or by proxy stockholders holding the number of
shares of stock of the corporation required in respect of such
other matter or matters.

8. Inspectors of Election. In advance of any meeting of
stockholders or any corporate action to be taken by the
stockholders in writing without a meeting, the Chief Executive
Officer, Chief Operating Officer, Chief Financial Officer or
Secretary of the corporation shall appoint one or more inspectors
of election to serve at such meeting or to examine such written
consents and to make a written report with respect thereto. In
addition, any such officer may, but shall not be required to,
designate one or more persons as alternate inspectors to replace
any inspector who fails to act. If no inspector or alternate is
able to act at a meeting of stockholders, the presiding officer
at such meeting shall appoint one or more inspectors to act at
the meeting. Each inspector shall discharge his or her duties in
accordance with applicable law and shall, before entering upon
the discharge of his or her duties, take and sign an oath
faithfully to execute the duties of inspector with strict
impartiality and according to the best of his or her ability.

9. List of Stockholders. A complete list of the
stockholders entitled to vote at each annual or special meeting
of the stockholders of the corporation, arranged in alphabetical
order, showing the address of record of each and the number of
voting shares held by each, shall be prepared by the Secretary,
who shall have charge of the stock ledger, and filed in the City
(or, if such meeting is to be held at a place not within any
city, then in the county) where the meeting is to be held, at a
location specified in the Notice of Meeting, or if no such
location is specified in such notice, at the place where the
meeting is to be held, at least ten (10) days before every such
meeting, and shall, during the usual hours for business, be open
to the examination of any stockholder for any purpose germane to
the meeting, and during the whole time of said meeting be open to
the examination of any stockholder.

10. Voting. Subject to the provisions of Article VI,
Section 2 of these By-Laws, and except where a different vote per
share is prescribed by the Certificate of Incorporation for a
class of stock, each holder of stock of a class which is entitled
to vote in any election or on any other questions at any annual
or special meeting of the stockholders shall be entitled to one
vote, in person or by written proxy, for each share of such class
held of record. Except where, and to the extent that, a
different percentage of votes and/or a different exercise of
voting power is prescribed by law, the Certificate of
Incorporation or these By-Laws, all elections and other questions
shall be decided by the vote of stockholders, present in person
or by proxy and entitled to vote, representing a majority of the
votes cast. Abstentions shall be counted in the tabulation of
the votes cast. The votes for directors, and, upon demand of any
stockholder, or where required by law, the votes upon any
question before the meeting, shall be by ballot; otherwise, the
election shall be held as the presiding officer prescribes.

11. Consents in Writing. Any action which might have been
taken under these By-Laws by a vote of the stockholders at a
meeting thereof may be taken by them without a meeting, without
prior notice and without a vote, if a consent in writing setting
forth the action so taken shall be signed by the holders of
outstanding shares of stock of the corporation having not less
than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted and shall be
delivered to the corporation by delivery to its registered office
in the State of Delaware, its principal place of business, or the
Secretary. Delivery made to the corporation's registered office
shall be by hand or by certified or registered mail, return
receipt requested. Prompt notice of the taking of such corporate
action shall be given to those stockholders who have not
consented thereto if less than unanimous written consent is
obtained. Every written consent shall bear the date of signature
of each stockholder who signs the consent. No written consent
shall be effective to take the corporate action referred to
therein unless, within sixty (60) days of the date the earliest
dated written consent (executed and delivered in accordance with
this Section) was received by the corporation, written consents
signed by a sufficient number of holders (determined in
accordance with this Section) to take such action are delivered
to the corporation in the manner specified in this Section.

ARTICLE III - Board of Directors

1. Number; Term of Office; Powers. The business and
affairs of the corporation shall be under the direction of a
Board of Directors, consisting of thirteen (13) persons. Direc
tors shall be elected for one year, and shall hold office until
their successors are elected and qualified. Directors need not
be stockholders. In addition to the power and authority express
ly conferred upon them by the By-Laws and the Certificate of
Incorporation, the Board of Directors may exercise all such
powers of the corporation and do all such lawful acts and things
as are not by law or by the Certificate of Incorporation or by
these By-Laws directed or required to be exercised or done by the
stockholders.

2. Resignations. Any director may resign at any time by
giving written notice of resignation to the Board of Directors,
to the Chief Executive Officer or to the Secretary of the corpo
ration. Any such resignation shall take effect at the time
specified therein, or if the time be not specified therein, then
upon receipt thereof. The acceptance of such resignation shall
not be necessary to make it effective.

3. Vacancies. Except as otherwise specifically provided
by law, the Certificate of Incorporation or these By-Laws, all
vacancies in the Board of Directors, whether caused by resigna
tion, death, increase in the number of authorized directors or
otherwise, may be filled by a majority of the Board of Directors
then in office, even though less than a quorum, or by the stock
holders at a special meeting. A director thus elected to fill
any vacancy shall hold office until the next annual meeting of
stockholders and until a successor is elected and qualified.

4. Annual Meeting. The annual meeting of the Board of
Directors, for the election of officers and the transaction of
other business, shall be held on the same day and at the same
place as, and as soon as practicable following, the annual
meeting of stockholders, or at such other date, time or place as
the directors may by resolution designate.

5. Regular Meetings. Regular meetings of the Board of
Directors shall be held at such times, and at such place within
or outside the State of Delaware, as the Board of Directors may
from time to time by resolution designate.

6. Special Meetings. Special meetings of the directors
may be called at any time by the Chairman of the Board of Direc
tors, a Vice Chairman of the Board of Directors, the President or
an Executive Vice President, or by the Secretary upon written
request of one-third of the directors, such request stating the
purpose for which the meeting is to be called. Special meetings
shall be held at the principal office of the corporation or at
such office within or outside the State of Delaware as the
directors may from time to time designate.

7. Notice of Meetings. Except as otherwise required by
law, notice of special meetings of the Board of Directors or of
any committee of the Board of Directors shall be given to each
director or to each committee member, as the case may be, by mail
at least two days before the day on which the meeting is to be
held or by personal delivery, word-of-mouth, telephone, tele
graph, radio, cable or other comparable means at least six hours
before the time at which the meeting is to be held. Such notice
shall state the time and place of such meeting, but need not
state the purposes thereof unless otherwise required by law. No
notice need be given of the annual meeting of directors or of
regular meetings of directors or of committees of the Board of
Directors, provided that, whenever the time or place of such
meetings shall be fixed or changed, notice of such action shall
be given promptly to each director or to each committee member,
as the case may be, who shall not have been present at the
meeting at which such action was taken.

8. Quorum; Adjourned Meetings; Required Vote. A majority
of the Board of Directors as constituted from time to time shall
be necessary and sufficient at all meetings to constitute a
quorum for the transaction of business. In the absence of a
quorum, a majority of those present may adjourn the meeting from
time to time and the meeting may be held as adjourned without
further notice provided a quorum be present at such adjourned
meeting. Unless otherwise specifically provided by the Certifi
cate of Incorporation or statute, the act of a majority of the
directors present at any properly convened meeting at which there
is a quorum, but in no case less than one-third of all of the
directors then in office, shall be the act of the Board of
Directors.

9. Committees. Standing or Temporary Committees may be
appointed from their own number by the Board of Directors from
time to time, and the directors may from time to time vest such
committees with such powers as the directors may see fit, subject
to such conditions as the directors may prescribe or as may be
prescribed by law. All committees shall consist of two or more
directors. The term of office of the members of each committee
shall be as fixed from time to time by the Board of Directors;
provided, however, that any committee member who ceases to be a
director shall ipso facto cease to be a committee member. Any
member of any committee may be removed at any time with or
without cause by the Board of Directors, and any vacancy in any
committee may be filled by the Board of Directors. All commit
tees shall keep regular minutes of their transactions and shall
cause them to be recorded in books kept for that purpose in the
office of the corporation, and shall report the same to the Board
of Directors at their regular meetings. Subject to this Section
9 and except as otherwise determined by the Board of Directors,
each committee may make rules for the conduct of its business.

10. Compensation. Directors, as such, may receive, pursu
ant to resolution of the Board of Directors, fixed fees, other
compensation and expenses for their services as directors,
including, without limitation, services as chairmen or as members
of committees of the directors; provided, however, that nothing
herein contained shall be construed to preclude any director from
serving the corporation in any other capacity and receiving
compensation therefor.

11. Consents in Writing. Any action required or permitted
to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting if all members
of the Board of Directors or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed
with the minutes of proceedings of the Board of Directors or
committee.

12. Participation by Conference Telephone. Members of the
Board of Directors or of any committee may participate in a
meeting of such Board of Directors or committee, as the case may
be, by means of conference telephone or similar communications
equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting by
such means shall constitute presence in person at the meeting.

ARTICLE IV - Officers

1. Officers. The corporation may have a Chairman of the
Board of Directors, one or more Vice Chairmen of the Board of
Directors, a President, one or more Vice Presidents, which may
include Executive and Senior Vice Presidents, a General Counsel,
a Secretary, a Treasurer, a Controller and such other officers
and assistant officers as the Board of Directors shall deem
appropriate; provided, that the corporation shall have such
officers as are required by applicable law. Officers shall be
elected annually by the Board of Directors. One person may hold
more than one office.

The Board of Directors shall designate a Chief Execu
tive Officer, and may designate a Chief Operating Officer and a
Chief Financial Officer from among the officers of the corpora
tion.

The Chief Executive Officer shall have general supervi
sion and management of the business and affairs of the corpora
tion, subject to the control of the Board of Directors, and may
prescribe the duties to be performed by the officers of the
corporation in addition to the duties prescribed by these By-Laws
or by the Board of Directors. In the absence or disability of
the Chairman of the Board of Directors, the Chief Executive
Officer shall preside at all meetings of stockholders and direc
tors. In the absence or disability of the Chief Executive
Officer, such officer of the corporation as the Chief
ExecutiveOfficer shall have designated in writing to the Board of
Directors or to the Secretary of the corporation shall, subject
to further action by the Board of Directors, have the powers and
perform the duties of the Chief Executive Officer.

2. Chairman of the Board. The Chairman of the Board of
Directors shall preside at all meetings of stockholders and
directors.

3. Vice Chairmen of the Board. A Vice Chairman shall
perform such duties as are properly required by the Board of
Directors or the Chief Executive Officer.

4. President. The President shall perform such duties as
are properly required by the Board of Directors or the Chief
Executive Officer.

5. Vice Presidents. Each of the Executive Vice presi
dents, Senior Vice Presidents and other Vice Presidents shall
perform such duties as are properly required by the Board of
Directors or the Chief Executive Officer.

6. General Counsel. The General Counsel shall advise the
corporation on legal matters affecting the corporation and its
activities, shall supervise and direct the handling of all such
legal matters and shall perform all such other duties as are
incident to the office of General Counsel.

7. Secretary. The Secretary shall keep the minutes of the
meetings of the stockholders and of the Board of Directors, and,
when required, the minutes of the meetings of the committees, and
shall be responsible for the custody of all such minutes. The
Secretary shall be responsible for the custody of the stock
ledger and documents of the corporation. The Secretary shall
have custody of the corporate seal and may affix and attest such
seal to any instrument whose execution shall have been duly
authorized and shall perform all other duties incident to the
office of Secretary.

8. Treasurer. The Treasurer shall have the custody of all
moneys and securities of the corporation and shall keep or cause
to be kept accurate accounts of all money received or payments
made in books kept for that purpose. The Treasurer shall deposit
or cause to be deposited funds of the corporation in accordance
with Article V, Section 2 of these By-Laws and shall disburse the
funds of the corporation by checks or vouchers as authorized by
the Board of Directors. The Treasurer shall also perform all
other duties incident to the office of Treasurer.

9. Controller. The Controller shall be the chief account
ing officer of the corporation. The Controller shall keep or
cause to be kept all books of accounts and accounting records of
the corporation and shall keep and maintain, or cause to be kept
and maintained, adequate and correct accounts of the properties
and business transactions of the corporation. The Controller
shall prepare or cause to be prepared appropriate financial
statements for the corporation and shall perform such other
duties as may be incident to the office of Controller.

10. Other Officers and Assistant Officers. All other
officers and assistant officers shall exercise such powers and
perform such duties as shall be determined from time to time by
the Board of Directors or the Chief Executive Officer.

11. Term of Office; Vacancies. Each officer shall hold
office until the annual meeting of the Board of Directors follow
ing the end of the term of the Board by which such officer is
elected, except in the case of earlier death, resignation or
removal. Vacancies in any office arising from any cause may be
filled by the directors at any regular or special meeting.

12. Removal. Any officer elected or appointed by the Board
of Directors may be removed at any time, with or without cause,
by the Board of Directors.

ARTICLE V - Dividends and Finance

1. Dividends. Dividends may be declared to the full
extent permitted by law at such times as the Board of Directors
shall direct.

2. Deposits; Withdrawals; Notes and Other Instruments.
The moneys of the corporation shall be deposited in the name of
the corporation in such banks or trust companies as shall be
designated by the Board of Directors, and shall be drawn out only
by persons designated from time to time by the Board of Directors
or by an officer of this corporation to whom the Board of
Directors has delegated such authority. All notes and other
instruments for the payment of money shall be signed or endorsed
by officers or other persons authorized from time to time by the
Board of Directors or by an officer of this corporation to whom
the Board of Directors has delegated such authority.

3. Fiscal Year. The fiscal year of the corporation shall
date from the first day of January in each year.

ARTICLE VI - Books and Records; Record Date

1. Books and Records. The books, accounts and records of
the corporation, except as may be otherwise required by the laws
of the State of Delaware, may be kept within or outside of the
said State at such places as the Board of Directors may from time
to time appoint.

2. Record Date.

(a) The Board of Directors is authorized to fix in advance
a date, not exceeding sixty (60) days preceding the date of any
meeting of stockholders, or the date for the payment of any
dividend, or other distribution or allotment of any rights, or
the date when any change, conversion or exchange of capital stock
shall go into effect, as a record date for the determination of
the stockholders entitled to notice of, and to vote at, any such
meeting and any adjournment thereof, or entitled to receive
payment of any such dividend or other distribution or allotment
of rights, or to exercise any rights in respect of any such
change, conversion or exchange of capital stock. Such stockhold
ers and only such stockholders as shall be stockholders of record
on the record date so fixed shall be entitled to such notice of,
and to vote at, such meeting and any adjournment thereof, or to
receive payment of such dividend or other distribution or allot
ment of rights, or to exercise such rights, as the case may be,
notwithstanding any transfer of any stock on the books of the
corporation after any such record date fixed as aforesaid. Any
such record date fixed in connection with a meeting of stockhold
ers shall not be less than ten (10) days before the date of such
meeting.

(b) In order that the corporation may determine the stock
holders entitled to consent to corporate action in writing
without a meeting, the Board of Directors is authorized to fix in
advance a record date, which record date shall not be more than
ten (10) days after the date upon which the resolution fixing the
record date is adopted by the Board of Directors. Any stockhold
er of record seeking to have the stockholders authorize or take
corporate action by written consent shall, by written notice to
the Secretary, request the Board of Directors to fix a record
date. If no record date has been fixed by the Board of Directors
within ten (10) days of the date on which such a request is
received, the record date for determining stockholders entitled
to consent to corporate action in writing without a meeting, when
no prior action by the Board of Directors is required by applica
ble law, shall be the first date on which a signed written
consent setting forth the action taken or proposed to be taken is
delivered to the corporation by delivery to its registered office
in the State of Delaware, its principal place of business, or the
Secretary. If no record date has been fixed by the Board of
Directors and prior action by the Board of Directors is required
by applicable law, the record date for determining stockholders
entitled to consent to corporate action in writing without a
meeting shall be at the close of business on the date on which
the Board of Directors adopts the resolution taking such prior
action. Such stockholders and only such stockholders as shall be
stockholders of record on the record date so fixed shall be
entitled to give such consent, notwithstanding any transfer of
any stock on the books of the corporation after any such record
date fixed as aforesaid.

ARTICLE VII - Notices

1. Notices. Whenever any provision of law or these By-
Laws requires notice to be given to any director, officer or
stockholder, such notice may be given in writing by mailing the
same to such director, officer or stockholder at his or her
address as the same appears in the books of the corporation,
unless such stockholder shall have filed with the Secretary a
written request that notices intended for him or her be mailed to
some other address, in which case it shall be mailed to the
address designated in such request. The time when the same shall
be mailed shall be deemed to be the time of the giving of such
notice. This section shall not be deemed to preclude the giving
of notice by other means if permitted by the applicable provision
of law or these By-Laws.

2. Waivers of Notice. A waiver of any notice in writing,
signed by a stockholder, director or officer, whether before or
after the time stated in said waiver for holding a meeting, shall
be deemed equivalent to a notice required to be given to any
stockholder, director or officer.

ARTICLE VIII - Contracts

1. Interested Directors or Officers. No contract or
transaction between the corporation and one or more of its
directors or officers, or between the corporation and any other
corporation, partnership, association or other organization in
which one or more of the directors or officers of the corporation
are directors or officers, or have a financial interest, shall be
void or voidable solely for this reason, or solely because the
director or officer of the corporation is present at or partici
pates in the meeting of the Board of Directors or committee
thereof which authorizes the contract or transaction, or solely
because his, her or their votes are counted for such purpose, if:

(i) The material facts as to the relationship or
interest of such person and as to the contract or transac
tion are disclosed or are known to the Board of Directors or
the committee thereof, and the Board of Directors or commit
tee in good faith authorizes the contract or transaction by
a vote sufficient for such purpose without counting the vote
of the interested director or directors of the corporation;
provided, however, that common or interested directors may
be counted in determining the presence of a quorum at a
meeting of the Board of Directors or committee; or

(ii) The material facts as to the relationship or
interest of such person and as to the contract or transac
tion are disclosed or are known to the stockholders of the
corporation entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote
of the stockholders of the corporation; or

(iii) The contract or transaction is fair as to the
corporation as of the time it is authorized, approved or
ratified by the Board of Directors, a committee thereof or
the stockholders of the corporation.

ARTICLE IX - Seal

1. Seal. The corporate seal of the corporation shall
consist of two concentric circles, between which is the name of
the corporation, and in the center shall be inscribed the year of
its incorporation and the words, "Corporate Seal, Delaware."

ARTICLE X - Indemnification

1. Indemnification in Third Party Actions. The corpora
tion shall indemnify each person who was or is a party or is
threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in
the right of the corporation) by reason of the fact that such
person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corpora
tion as a director, officer, employee or agent of another corpo
ration, partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, against
all expense, liability and loss (including attorneys fees,
judgments, fines, ERISA excise taxes or penalties, and amounts
paid or to be paid in settlement) actually and reasonably in
curred by such person in connection with such action, suit or
proceeding if he or she acted in good faith and in a manner he or
she reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his or
her conduct was unlawful, except that no indemnification shall be
made in respect of any proceeding (or part thereof) initiated by
such person unless such proceeding (or part thereof) was
authorized by the Board of Directors of the corporation. The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the
person did not act in good faith and in a manner which the person
reasonably believed to be in or not opposed to the best interests
of the corporation, and with respect to any criminal action or
proceeding, had reasonable cause to believe that his or her
conduct was unlawful.

2. Indemnification in an Action by or in the Right of the
Corporation. The corporation shall indemnify each person who was
or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the
right of the corporation to procure a judgment in its favor by
reason of the fact that such person is or was a director,
officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, including service with
respect to employee benefit plans, against expenses (including
attorneys' fees) actually and reasonably incurred by such person
in connection with the defense or settlement of such action or
suit if the person acted in good faith and in a manner the person
reasonably believed to be in or not opposed to the best interests
of the corporation and except that no indemnification shall be
made in respect of (a) any claim, issue or matter as to which
such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of
Chancery of the State of Delaware or the court in which such
action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such Court of
Chancery or such other court shall deem proper, or (b) any
proceeding (or part thereof) initiated by such person unless such
proceeding (or part thereof) was authorized by the Board of
Directors of the corporation.

3. Indemnification as of Right. To the extent that a
director, officer, employee or agent of the corporation has been
successful on the merits or otherwise in defense of any action,
suit or proceeding referred to in Sections l and 2 of this
Article X, or in defense of any claim, issue or matter therein,
such person shall be indemnified against expenses (including
attorneys fees) actually and reasonably incurred by such person
in connection therewith.

4. Determination of Indemnification. Any indemnification
under Sections 1 and 2 of this Article X (unless ordered by a
court) shall be made by the corporation only as authorized in the
specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circum
stances because the person has met the applicable standard of
conduct set forth in such Sections l and 2. Such determination
shall be made (a) by the Board of Directors (the Board) by a
majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, or (b) if such a
quorum is not obtainable, or, even if obtainable a quorum of
disinterested directors so directs, by independent legal counsel
in a written opinion or (c) by the stockholders.

5. Advance for Expenses. Expenses (including attorneys'
fees) incurred in defending any civil, criminal, administrative
or investigative action, suit or proceeding shall be paid by the
corporation in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf
of the director, officer, employee or agent to repay such amount
if it shall ultimately be determined that he or she is not
entitled to be indemnified by the corporation as authorized in
this Article X.

6. General Provisions.

(a) All expenses (including attorneys' fees) incurred in
defending any civil, criminal, administrative or investigative
action, suit or proceeding which are advanced by the corporation
under Section 5 of this Article X shall be repaid (i) in case the
person receiving such advance is ultimately found, under the
procedure set forth in this Article X, not to be entitled to
indemnification, or (ii) where indemnification is granted, to the
extent that the expenses so advanced by the corporation exceed
the indemnification to which such person is entitled.

(b) The corporation may indemnify each person, though he or
she is not or was not a director, officer, employee or agent of
the corporation, who served at the request of the corporation on
a committee created by the Board to consider and report to it in
respect of any matter. Any such indemnification may be made
under the preceding provisions of this Article X and shall be
subject to the limitations thereof except that (as indicated) any
such committee member need not be nor have been a director,
officer, employee or agent of the corporation.

(c) The provisions of this Article X shall be applicable to
appeals. References to "serving at the request of the corpora
tion" shall include without limitation any service as a director,
officer, employee or agent of the corporation which imposes
duties on, or involves services by, such director, officer,
employee or agent with respect to an employee benefit plan, its
participants or beneficiaries. A person who acted in good faith
and in a manner he or she reasonably believed to be in the
interest of the participants and beneficiaries of an employee
benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation."

(d) If any section, subsection, paragraph, sentence,
clause, phrase or word in this Article X shall be adjudicated
invalid or unenforceable, such adjudication shall not be deemed
to invalidate or otherwise affect any other section, subsection,
paragraph, sentence, clause, phrase or word of this Article.

(e) The indemnification and advancement of expenses
provided by, or granted pursuant to, this Article X shall not be
deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under
any By-Law, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in their official
capacities and as to action in another capacity while holding
such office, and shall continue as to a person who has ceased to
be a director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such a
person.

ARTICLE XI - Amendments

1. Amendments. Alterations or amendments of these By-Laws
may be made by the stockholders at any annual or special meeting
if the notice of such meeting contains a statement of the pro
posed alteration or amendment, or by the Board of Directors at
any annual, regular or special meeting, provided notice of such
alteration or amendment has been given to each director in
writing at least five (5) days prior to said meeting or has been
waived by all the directors.

EXHIBIT 11

REYNOLDS METALS COMPANY AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(In millions, except per share data)

EARNINGS PER SHARE
In the first quarter of 1996, earnings per share equals net income, minus
dividends on the Company's preferred stock ("PRIDES"), divided by the weighted-
average number of common shares outstanding during the period. 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 PRIDES. For the purpose of this computation, the
conversion rate of 0.93 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). Common share equivalents relating to the PRIDES
were not included in the first quarter of 1996 since their effect would have
been anti-dilutive.

<PAGE>
<TABLE>
<CAPTION>
QUARTERS ENDED MARCH 31
--------------------------------------
1996 1995
--------------------------------------
<S> <C> <C>
Weighted-average shares outstanding:
Common shares 63,604,000 62,220,000
Common share equivalents - 10,261,000
--------------------------------------
Total 63,604,000 72,481,000
======================================
Income before cumulative effect of accounting change $17 $82
Less preferred stock dividends 9 -
--------------------------------------
$8 $82
--------------------------------------
Cumulative effect of accounting change (15) -
--------------------------------------
($7) $82
======================================
Earnings per share:
Income before cumulative effect of accounting change $0.12 $1.13
Cumulative effect of accounting change (0.24) -
--------------------------------------
Net income (loss) ($0.12) $1.13
======================================
</TABLE>
<PAGE>
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 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 anti-dilutive in 1996 and was
not material in 1995.
<PAGE>
<TABLE>
<CAPTION>
QUARTERS ENDED MARCH 31
--------------------------------------
1996 1995
--------------------------------------
<S> <C> <C>
Weighted-average shares outstanding:
Common shares 63,604,000 62,220,000
Common share equivalents 11,000,000 11,000,000
--------------------------------------
Total 74,604,000 73,220,000
--------------------------------------

Income before cumulative effect of accounting change $17 $82
Cumulative effect of accounting change (15) -
--------------------------------------
Net income $2 $82
======================================
Earnings per share (fully diluted):
Income before cumulative effect of accounting change $0.23 $1.12
Cumulative effect of accounting change (0.21) -
--------------------------------------
Net income $0.02 $1.12
======================================
</TABLE>

<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Reynolds
Metals Company Condensed Consolidated Balance Sheet (Unaudited) for March 31,
1996 and Consolidated Statement of Income (Unaudited) for the Quarter ended
March 31, 1996 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1000000

<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 37
<SECURITIES> 0
<RECEIVABLES> 1086<F1>
<ALLOWANCES> 20
<INVENTORY> 962
<CURRENT-ASSETS> 2114
<PP&E> 6640
<DEPRECIATION> 3415
<TOTAL-ASSETS> 7844
<CURRENT-LIABILITIES> 1513
<BONDS> 1839
0
505
<COMMON> 942
<OTHER-SE> 1137
<TOTAL-LIABILITY-AND-EQUITY> 7844
<SALES> 1662
<TOTAL-REVENUES> 1675
<CGS> 1380
<TOTAL-COSTS> 1380
<OTHER-EXPENSES> 117
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 42
<INCOME-PRETAX> 25
<INCOME-TAX> 8
<INCOME-CONTINUING> 17
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> (15)
<NET-INCOME> 2
<EPS-PRIMARY> (0.12)
<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>