SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
TO
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
Commission File Number 1-1430
REYNOLDS METALS COMPANY
A Delaware Corporation
(IRS Employer Identification No. 54-0355135)
6601 West Broad Street, P. O. Box 27003, Richmond, Virginia 23261-7003
Telephone: (804) 281-2000
<PAGE> 2
PART II
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Forward, futures, option and swap contracts are designated to
manage market risks resulting from fluctuations in the aluminum,
natural gas, foreign currency and debt markets. Contracts used
to manage risks in these markets are not material.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The consolidated financial statements and exhibits listed
below are filed as a part of this report.
(1) Consolidated Financial Statements: Previously
filed
Consolidated statement of income and retained
earnings - Years ended December 31, 1997,
1996 and 1995.
Consolidated balance sheet - December 31,
1997 and 1996.
Consolidated statement of cash flows - Years
ended December 31, 1997, 1996 and 1995.
Consolidated statement of changes in
stockholders' equity - Years ended
December 31, 1997, 1996 and 1995.
Notes to consolidated financial statements.
Report of Ernst & Young LLP, Independent Auditors.
(2) Financial Statement Schedules
This report omits all schedules for which provision is
made in the applicable accounting regulations of the
Securities and Exchange Commission because they are not
required, are inapplicable or the required information
has otherwise been given.
This report omits individual financial statements of
Reynolds Metals Company because the restricted net
assets (as defined in Accounting Series Release 302) of
all subsidiaries included in the consolidated financial
statements filed, in the aggregate, do not exceed 25%
of the consolidated net assets shown in the
consolidated balance sheet as of December 31, 1997.
This report omits financial statements of all
associated companies (20% to 50% owned) because no
associated company is individually significant.
(3) Exhibits
EXHIBIT 2 - None.
<F1> EXHIBIT 3.1 - Restated Certificate of Incorporation,
as amended.
[FN]
_______________________
<F1>Previously filed.
</FN>
<PAGE> 3
<F1> EXHIBIT 3.2 - By-laws, as amended.
EXHIBIT 4.1 - Restated Certificate of Incorporation.
See EXHIBIT 3.1.
EXHIBIT 4.2 - By-Laws. See EXHIBIT 3.2.
<F2> 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))
<F2> 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)
<F2> EXHIBIT 4.5 - Rights Agreement dated as of December 1, 1997
(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
December 1, 1997, pertaining to
Preferred Stock Purchase Rights, EXHIBIT 1)
<F2> EXHIBIT 4.6 - Form of 9-3/8% Debenture due June 15, 1999.
(File No. 1-1430, Form 8-K Report dated
June 6, 1989, EXHIBIT 4)
<F2> EXHIBIT 4.7 - Form of Fixed Rate Medium-Term Note.
(Registration Statement No. 33-30882 on
Form S-3, dated August 31, 1989, EXHIBIT
4.3)
<F2> EXHIBIT 4.8 - Form of Floating Rate Medium-Term Note.
(Registration Statement No. 33-30882 on
Form S-3, dated August 31, 1989, EXHIBIT
4.4)
<F2> EXHIBIT 4.9 - Form of Book-Entry Fixed Rate Medium-Term Note.
(File No. 1-1430, 1991 Form 10-K Report,
EXHIBIT 4.15)
<F2> EXHIBIT 4.10 - Form of Book-Entry Floating Rate Medium-Term
Note. (File No. 1-1430, 1991 Form 10-K
Report, EXHIBIT 4.16)
<F2> EXHIBIT 4.11 - Form of 9% Debenture due August 15, 2003. (File
No. 1-1430, Form 8-K Report dated August
16, 1991, Exhibit 4(a))
<F2> EXHIBIT 4.12 - 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) ("RACC"), as amended. (File
No. 1-1430, 1995 Form 10-K Report,
EXHIBIT 4.13)
<F2> EXHIBIT 4.13 - By-Laws of RACC, as amended. (File No. 1-1430,
Form 10-Q Report for the Quarter Ended
March 31, 1997, EXHIBIT 4.14)
<F2> EXHIBIT 4.14 - Articles of Incorporation of Societe
Canadienne de Metaux Reynolds,
Ltee/Canadian Reynolds Metals Company,
Ltd. ("CRM"), as amended. (File No. 1-
1430, Form 10-Q Report for the Quarter
Ended September 30, 1997, EXHIBIT 4.15)
[FN]
_______________________
<F1> Previously filed.
<F2> Incorporated by reference.
</FN>
<PAGE> 4
<F2> EXHIBIT 4.15 - By-Laws of CRM, as amended. (File No. 1-1430,
Form 10-Q Report for the Quarter Ended
September 30, 1997, EXHIBIT 4.16)
<F2> EXHIBIT 4.16 - Indenture dated as of April 1, 1993
among RACC, 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))
<F2> EXHIBIT 4.17 - First Supplemental Indenture, dated as of
December 18, 1995 among RACC, Reynolds
Metals Company, CRM and The Bank of New
York, as Trustee. (File No. 1-1430,
1995 Form 10-K Report, EXHIBIT 4.18)
<F2> EXHIBIT 4.18 - Form of 6-5/8% Guaranteed Amortizing Note due
July 15, 2002. (File No. 1-1430, Form 8-
K Report dated July 14, 1993, EXHIBIT
4(d))
EXHIBIT 9 - None.
<F2><F3> EXHIBIT 10.1 - Reynolds Metals Company 1987 Nonqualified
Stock Option Plan. (Registration Statement
No. 33-13822 on Form S-8, dated April 28, 1987,
EXHIBIT 28.1)
<F2><F3> EXHIBIT 10.2 - Reynolds Metals Company 1992 Nonqualified
Stock Option Plan. (Registration Statement
No. 33-44400 on Form S-8, dated December 9,
1991, EXHIBIT 28.1)
<F2><F3> EXHIBIT 10.3 - 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)
<F2><F3> EXHIBIT 10.4 - 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)
<F2><F3> EXHIBIT 10.5 - Supplemental Death Benefit Plan for Officers.
(File No. 1-1430, 1986 Form 10-K Report, EXHIBIT
10.8)
<F2><F3> EXHIBIT 10.6 - Financial Counseling Assistance Plan for
Officers. (File No. 1-1430, 1987 Form 10-K
Report, EXHIBIT 10.11)
<F2><F3> EXHIBIT 10.7 - Management Incentive Deferral Plan. (File
No. 1-1430, 1987 Form 10-K Report, EXHIBIT
10.12)
<F2><F3> EXHIBIT 10.8 - 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)
<F2><F3> EXHIBIT 10.9 - Form of Indemnification Agreement for Directors
and Officers. (File No. 1-1430, Form 8-
K Report dated April 29, 1987, EXHIBIT
28.3)
[FN]
____________________________
<F2> Incorporated by reference.
<F3> Management contract or compensatory plan or arrangement required to be
filed as an exhibit pursuant to Item 601 of Regulation S-K.
</FN>
<PAGE> 5
<F1><F3> EXHIBIT 10.10 - Form of Executive Severance Agreement as
amended between Reynolds Metals Company and key
executive personnel, including each of
the individuals listed in Item 4A of
this report.
<F2><F3> EXHIBIT 10.11 - 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))
<F2><F3> EXHIBIT 10.12 - 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))
<F2><F3> EXHIBIT 10.13 - 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)
<F2><F3> EXHIBIT 10.14 - 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)
<F2><F3> EXHIBIT 10.15 - 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)
<F2><F3> EXHIBIT 10.16 - 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))
<F2><F3> EXHIBIT 10.17 - 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)
<F2><F3> EXHIBIT 10.18 - 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)
<F2><F3> EXHIBIT 10.19 - 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)
<F2><F3> EXHIBIT 10.20 - 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)
[FN]
____________________________
<F1> Previously filed.
<F2> Incorporated by reference.
<F3> Management contract or compensatory plan or arrangement required
to be filed as an exhibit pursuant to Item 601 of Regulation S-K.
</FN>
<PAGE> 6
<F2><F3> EXHIBIT 10.21 - 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)
<F2><F3> EXHIBIT 10.22 - 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)
<F2><F3> EXHIBIT 10.23 - 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)
<F2><F3> EXHIBIT 10.24 - 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)
<F2><F3> EXHIBIT 10.25 - 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)
<F2><F3> EXHIBIT 10.26 - 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)
<F2><F3> EXHIBIT 10.27 - 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)
<F2><F3> EXHIBIT 10.28 - 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)
<F2><F3> EXHIBIT 10.29 - Reynolds Metals Company 1996 Nonqualified
Stock Option Plan. (Registration Statement
No. 333-03947 on Form S-8, dated May 17, 1996,
EXHIBIT 4.6)
<F2><F3> EXHIBIT 10.30 - Amendment to Reynolds Metals Company
1992 Nonqualified Stock Option Plan
effective January 1, 1993.
(Registration Statement No. 333-03947 on
Form S-8, dated May 17, 1996, EXHIBIT
99)
<F2><F3> EXHIBIT 10.31 - Form of Stock Option Agreement, as
approved May 17, 1996 by the Compensation
Committee of the Company's Board of Directors.
(File No. 1-1430, Form 10-Q Report for the
Quarter Ended June 30, 1996, EXHIBIT 10.41)
[FN]
____________________________
<F2> Incorporated by reference.
<F3> Management contract or compensatory plan or arrangement
required to be filed as an exhibit pursuant to Item 601 of
Regulation S-K.
<PAGE> 7
<F2><F3> EXHIBIT 10.32 - Form of Three Party Stock Option Agreement,
as approved May 17, 1996 by the Compensation
Committee of the Company's Board of Directors.
(File No. 1-1430, Form 10-Q Report for
the Quarter Ended June 30, 1996, EXHIBIT
10.42)
<F2><F3> EXHIBIT 10.33 - Stock Option Agreement dated August 30, 1996
between Reynolds Metals Company and Jeremiah J.
Sheehan. (File No. 1-1430, Form 10-Q
Report for the Quarter Ended September
30, 1996, EXHIBIT 10.43)
<F2><F3> EXHIBIT 10.34 - Amendment to Deferred Compensation Plan for
Outside Directors effective August 15, 1996.
(File No. 1-1430, Form 10-Q Report for the
Quarter Ended September 30, 1996, EXHIBIT 10.44)
<F2><F3> EXHIBIT 10.35 - Amendment to Reynolds Metals Company New
Management Incentive Deferral Plan effective
January 1, 1996. (File No. 1-1430, 1996
Form 10-K Report, EXHIBIT 10.38)
<F2><F3> EXHIBIT 10.36 - Amendment to Reynolds Metals Company Performance
Incentive Plan effective January 1, 1996. (File
No. 1-1430, 1996 Form 10-K Report,
EXHIBIT 10.39)
<F2><F3> EXHIBIT 10.37 - Reynolds Metals Company Supplemental Incentive
Plan. (File No. 1-1430, 1996 Form 10-K Report,
EXHIBIT 10.40)
<F2><F3> EXHIBIT 10.38 - Reynolds Metals Company Stock Plan for Outside
Directors. (File No. 1-1430, 1996 Form
10-K Report, EXHIBIT 10.41)
<F2><F3> EXHIBIT 10.39 - Special Executive Severance Package for
Certain Employees who Terminate Employment
between January 1, 1997 and June 30, 1998, as
approved by the Compensation Committee of the
Company's Board of Directors on January
17, 1997. (File No. 1-1430, 1996 Form 10-
K Report, EXHIBIT 10.42)
<F2><F3> EXHIBIT 10.40 - Special Award Program for Certain Executives or
Key Employees, as approved by the Compensation
Committee of the Company's Board of
Directors on January 17, 1997. (File
No. 1-1430, 1996 Form 10-K Report,
EXHIBIT 10.43)
<F1><F3> EXHIBIT 10.41 - Amendment to Reynolds Metals Company 1996
Nonqualified Stock Option Plan effective
December 1, 1997.
<F1><F3> EXHIBIT 10.42 - Amendment to Reynolds Metals Company
Restricted Stock Plan for Outside Directors
effective December 1, 1997.
EXHIBIT 11 - Omitted; see Item 8 for computation of
earnings per share
EXHIBIT 12 - Not applicable
EXHIBIT 13 - Not applicable
[FN]
____________________________
<F1> Previously filed.
<F2> Incorporated by reference.
<F3> Management contract or compensatory plan or
arrangement required to be filed as an exhibit pursuant to
Item 601 of Regulation S-K.
</FN>
<PAGE> 8
EXHIBIT 16 - Not applicable
EXHIBIT 18 - None
<F1> EXHIBIT 21 - List of Subsidiaries of Reynolds Metals Company
EXHIBIT 22 - None
<F1> EXHIBIT 23 - Consent of Independent Auditors
<F1> EXHIBIT 24 - Powers of Attorney
<F1> EXHIBIT 27 - Financial Data Schedule
EXHIBIT 99.1 - Reynolds Metals Company Savings and
Investment Plan for Salaried Employees
Annual Report on Form 11-K for the
Fiscal Year Ended December 31, 1997
EXHIBIT 99.2 - Reynolds Metals Company Savings Plan for
Hourly Employees Annual Report on Form
11-K for the Fiscal Year Ended December
31, 1997
EXHIBIT 99.3 - Employees Savings Plan Annual Report on
Form 11-K for the Fiscal Year Ended
December 31, 1997
[FN]
____________________________
<F1> Previously filed.
</FN>
Pursuant to Item 601 of Regulation S-K,
certain instruments with respect to long-term debt of the
Company are omitted because such debt does not exceed 10
percent of the total assets of the Company and its
subsidiaries on a consolidated basis. The Company agrees to
furnish a copy of any such instrument to the Commission upon
request.
(b) Reports on Form 8-K
During the fourth quarter of 1997, the Registrant filed three
Current Reports on Form 8-K with the Commission. The Registrant
reported on the Form 8-K dated December 15, 1997 that (i) it had
determined to keep and grow its packaging and consumer products
business, (ii) it was discussing a potential agreement with Ball
Corporation for the sale of substantially all of Reynolds' global can
business, and (iii) if the sale of the can business is
completed, the Registrant expects to apply a substantial
portion of the proceeds to a stock repurchase program. The
Registrant reported on the Form 8-K dated December 29, 1997
that the U.S. Justice Department had filed suit to block the
proposed sale of the Registrant's Alloys complex in North
Alabama to Alcoa. The Registrant reported on the Form 8-K
dated December 30, 1997, that Alcoa had withdrawn from the
Alloys complex transaction. All of the foregoing matters
were reported under Item 5.
<PAGE> 9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this Amendment No. 1 to
be signed on its behalf by the undersigned, thereunto duly
authorized.
REYNOLDS METALS COMPANY
By: /s/ Allen M. Earehart
----------------------------
Allen M. Earehart
Vice President, Controller
Date: June 26, 1998
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
TO
FORM 10-K/A
AMENDMENT NO. 1 TO
FORM 10-K
For the fiscal year ended December 31, 1997
Commission File No. 1-1430
REYNOLDS METALS COMPANY
Attached herewith are
Exhibits 99.1, 99.2 and 99.3
INDEX
EXHIBIT 2 - None.
<F1> EXHIBIT 3.1 - Restated Certificate of Incorporation,
as amended.
<F1> EXHIBIT 3.2 - By-laws, as amended.
EXHIBIT 4.1 - Restated Certificate of Incorporation.
See EXHIBIT 3.1.
EXHIBIT 4.2 - By-Laws. See EXHIBIT 3.2.
<F2> 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))
<F2> 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)
<F2> EXHIBIT 4.5 - Rights Agreement dated as of December 1, 1997
(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
December 1, 1997, pertaining to
Preferred Stock Purchase Rights, EXHIBIT
1)
<F2> EXHIBIT 4.6 - Form of 9-3/8% Debenture due June 15, 1999.
(File No. 1-1430, Form 8-K Report dated
June 6, 1989, EXHIBIT 4)
<F2> EXHIBIT 4.7 - Form of Fixed Rate Medium-Term Note.
(Registration Statement No. 33-30882 on
Form S-3, dated August 31, 1989, EXHIBIT
4.3)
[FN]
______________________
<F1> Previously filed.
<F2> Incorporated by reference.
</FN>
<PAGE> 2
<F2> EXHIBIT 4.8 - Form of Floating Rate Medium-Term Note.
(Registration Statement No. 33-30882 on
Form S-3, dated August 31, 1989, EXHIBIT
4.4)
<F2> EXHIBIT 4.9 - Form of Book-Entry Fixed Rate Medium-Term
Note. (File No. 1-1430, 1991 Form 10-K
Report, EXHIBIT 4.15)
<F2> EXHIBIT 4.10 - Form of Book-Entry Floating Rate Medium-Term
Note. (File No. 1-1430, 1991 Form 10-K
Report, EXHIBIT 4.16)
<F2> EXHIBIT 4.11 - Form of 9% Debenture due August 15, 2003.
(File No. 1-1430, Form 8-K Report dated August
16, 1991, Exhibit 4(a))
<F2> EXHIBIT 4.12 - 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) ("RACC"), as amended. (File
No. 1-1430, 1995 Form 10-K Report,
EXHIBIT 4.13)
<F2> EXHIBIT 4.13 - By-Laws of RACC, as amended. (File No.
1-1430, Form 10-Q Report for the Quarter Ended
March 31, 1997, EXHIBIT 4.14)
<F2> EXHIBIT 4.14 - Articles of Incorporation of Societe
Canadienne de Metaux Reynolds,
Ltee/Canadian Reynolds Metals Company,
Ltd. ("CRM"), as amended. (File No. 1-
1430, Form 10-Q Report for the Quarter
Ended September 30, 1997, EXHIBIT 4.15)
<F2> EXHIBIT 4.15 - By-Laws of CRM, as amended. (File No. 1-1430,
Form 10-Q Report for the Quarter Ended
September 30, 1997, EXHIBIT 4.16)
<F2> EXHIBIT 4.16 - Indenture dated as of April 1, 1993
among RACC, 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))
<F2> EXHIBIT 4.17 - First Supplemental Indenture, dated as of
December 18, 1995 among RACC, Reynolds
Metals Company, CRM and The Bank of New
York, as Trustee. (File No. 1-1430,
1995 Form 10-K Report, EXHIBIT 4.18)
<F2> EXHIBIT 4.18 - Form of 6-5/8% Guaranteed Amortizing Note due
July 15, 2002. (File No. 1-1430, Form 8-
K Report dated July 14, 1993, EXHIBIT
4(d))
EXHIBIT 9 - None.
<F2><F3> EXHIBIT 10.1 - Reynolds Metals Company 1987 Nonqualified
Stock Option Plan. (Registration Statement
No. 33-13822 on Form S-8, dated April 28,
1987, EXHIBIT 28.1)
[FN]
____________________________
<F2> Incorporated by reference.
<F3> Management contract or compensatory plan or
arrangement required to be filed as an exhibit pursuant to
Item 601 of Regulation S-K.
</FN>
<PAGE> 3
<F2><F3> EXHIBIT 10.2 - Reynolds Metals Company 1992 Nonqualified
Stock Option Plan. (Registration Statement
No. 33-44400 on Form S-8, dated December 9,
1991, EXHIBIT 28.1)
<F2><F3> EXHIBIT 10.3 - 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)
<F2><F3> EXHIBIT 10.4 - 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)
<F2><F3> EXHIBIT 10.5 - Supplemental Death Benefit Plan for
Officers. (File No. 1-1430, 1986 Form 10-K
Report, EXHIBIT 10.8)
<F2><F3> EXHIBIT 10.6 - Financial Counseling Assistance Plan for
Officers. (File No. 1-1430, 1987 Form 10-K
Report, EXHIBIT 10.11)
<F2><F3> EXHIBIT 10.7 - Management Incentive Deferral Plan. (File
No. 1-1430, 1987 Form 10-K Report, EXHIBIT
10.12)
<F2><F3> EXHIBIT 10.8 - 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)
<F2><F3> EXHIBIT 10.9 - Form of Indemnification Agreement for
Directors and Officers. (File No. 1-1430,
Form 8-K Report dated April 29, 1987, EXHIBIT
28.3)
<F1><F3> EXHIBIT 10.10 - Form of Executive Severance Agreement as
amended between Reynolds Metals Company and
key executive personnel, including each of
the individuals listed in Item 4A of
this report.
<F2><F3> EXHIBIT 10.11 - 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))
<F2><F3> EXHIBIT 10.12 - 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))
<F2><F3> EXHIBIT 10.13 - 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)
<F2><F3> EXHIBIT 10.14 - 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)
[FN]
____________________________
<F1> Previously filed.
<F2> Incorporated by reference.
<F3> Management contract or compensatory plan or
arrangement required to be filed as an exhibit pursuant to
Item 601 of Regulation S-K.
</FN>
<PAGE> 4
<F2><F3> EXHIBIT 10.15 - 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)
<F2><F3> EXHIBIT 10.16 - 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))
<F2><F3> EXHIBIT 10.17 - 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)
<F2><F3> EXHIBIT 10.18 - 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)
<F2><F3> EXHIBIT 10.19 - 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)
<F2><F3> EXHIBIT 10.20 - 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)
<F2><F3> EXHIBIT 10.21 - 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)
<F2><F3> EXHIBIT 10.22 - 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)
<F2><F3> EXHIBIT 10.23 - 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)
<F2><F3> EXHIBIT 10.24 - 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)
<F2><F3> EXHIBIT 10.25 - 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)
<F2><F3> EXHIBIT 10.26 - 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)
[FN]
____________________________
<F2> Incorporated by reference.
<F3> Management contract or compensatory plan or
arrangement required to be filed as an exhibit pursuant to
Item 601 of Regulation S-K.
</FN>
<PAGE> 5
<F2><F3> EXHIBIT 10.27 - 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)
<F2><F3> EXHIBIT 10.28 - 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)
<F2><F3> EXHIBIT 10.29 - Reynolds Metals Company 1996 Nonqualified
Stock Option Plan. (Registration Statement
No. 333-03947 on Form S-8, dated May 17, 1996,
EXHIBIT 4.6)
<F2><F3> EXHIBIT 10.30 - Amendment to Reynolds Metals Company 1992
Nonqualified Stock Option Plan effective
January 1, 1993. (Registration Statement
No. 333-03947 on Form S-8, dated May 17, 1996,
EXHIBIT 99)
<F2><F3> EXHIBIT 10.31 - Form of Stock Option Agreement, as approved
May 17, 1996 by the Compensation Committee of
the Company's Board of Directors. (File No.
1-1430, Form 10-Q Report for the Quarter
Ended June 30, 1996, EXHIBIT 10.41)
<F2><F3> EXHIBIT 10.32 - Form of Three Party Stock Option Agreement,
as approved May 17, 1996 by the Compensation
Committee of the Company's Board of Directors.
(File No. 1-1430, Form 10-Q Report for
the Quarter Ended June 30, 1996, EXHIBIT
10.42)
<F2><F3> EXHIBIT 10.33 - Stock Option Agreement dated August 30,
1996 between Reynolds Metals Company and
Jeremiah J. Sheehan. (File No. 1-1430,
Form 10-Q Report for the Quarter Ended
September 30, 1996, EXHIBIT 10.43)
<F2><F3> EXHIBIT 10.34 - Amendment to Deferred Compensation Plan for
Outside Directors effective August 15, 1996.
(File No. 1-1430, Form 10-Q Report for the
Quarter Ended September 30, 1996, EXHIBIT
10.44)
<F2><F3> EXHIBIT 10.35 - Amendment to Reynolds Metals Company New
Management Incentive Deferral Plan effective
January 1, 1996. (File No. 1-1430, 1996
Form 10-K Report, EXHIBIT 10.38)
<F2><F3> EXHIBIT 10.36 - Amendment to Reynolds Metals Company
Performance Incentive Plan effective
January 1, 1996. (File No. 1-1430, 1996
Form 10-K Report, EXHIBIT 10.39)
<F2><F3> EXHIBIT 10.37 - Reynolds Metals Company Supplemental
Incentive Plan. (File No. 1-1430, 1996
Form 10-K Report, EXHIBIT 10.40)
<F2><F3> EXHIBIT 10.38 - Reynolds Metals Company Stock Plan for Outside
Directors. (File No. 1-1430, 1996 Form
10-K Report, EXHIBIT 10.41)
[FN]
____________________________
<F2> Incorporated by reference.
<F3> Management contract or compensatory plan or
arrangement required to be filed as an exhibit pursuant to
Item 601 of Regulation S-K.
</FN>
<PAGE> 6
<F2><F3> EXHIBIT 10.39 - Special Executive Severance Package for
Certain Employees who Terminate Employment
between January 1, 1997 and June 30, 1998,
as approved by the Compensation Committee
of the Company's Board of Directors on January
17, 1997. (File No. 1-1430, 1996 Form 10-
K Report, EXHIBIT 10.42)
<F2><F3> EXHIBIT 10.40 - Special Award Program for Certain Executives
or Key Employees, as approved by the
Compensation Committee of the Company's
Board of Directors on January 17, 1997.
(File No. 1-1430, 1996 Form 10-K Report,
EXHIBIT 10.43)
<F1><F3> EXHIBIT 10.41 - Amendment to Reynolds Metals Company 1996
Nonqualified Stock Option Plan effective
December 1, 1997.
<F1><F3> EXHIBIT 10.42 - Amendment to Reynolds Metals Company
Restricted Stock Plan for Outside Directors
effective December 1, 1997.
EXHIBIT 11 - Omitted; see Item 8 for computation of
earnings per share
EXHIBIT 12 - Not applicable
EXHIBIT 13 - Not applicable
EXHIBIT 16 - Not applicable
EXHIBIT 18 - None
<F1> EXHIBIT 21 - List of Subsidiaries of Reynolds Metals
Company
EXHIBIT 22 - None
<F1> EXHIBIT 23 - Consent of Independent Auditors
<F1> EXHIBIT 24 - Powers of Attorney
<F1> EXHIBIT 27 - Financial Data Schedule
EXHIBIT 99.1 - Reynolds Metals Company Savings and
Investment Plan for Salaried Employees Annual
Report on Form 11-K for the Fiscal Year
Ended December 31, 1997
EXHIBIT 99.2 - Reynolds Metals Company Savings Plan for
Hourly Employees Annual Report on Form 11-K for
the Fiscal Year Ended December 31, 1997
EXHIBIT 99.3 - Employees Savings Plan Annual Report on
Form 11-K for the Fiscal Year Ended
December 31, 1997
[FN]
____________________________
<F1> Previously filed.
<F2> Incorporated by reference.
<F3> Management contract or compensatory plan or
arrangement required to be filed as an exhibit pursuant to
Item 601 of Regulation S-K.
</FN>
EXHIBIT 99.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 1-1430
A. Full title of the plan and the address of
the plan, if different from that of the issuer
named below:
REYNOLDS METALS COMPANY
SAVINGS AND INVESTMENT PLAN
FOR SALARIED EMPLOYEES
B. Name of issuer of the securities held
pursuant to the plan and the address of
its principal executive office:
REYNOLDS METALS COMPANY
6601 West Broad Street
P. O. Box 27003
Richmond, Virginia 23261-7003
<PAGE> 2
REQUIRED INFORMATION
FINANCIAL STATEMENTS AND EXHIBITS
FINANCIAL STATEMENTS
Page No.
Report of Independent Auditors........................... F-1
Audited Financial Statements
Statements of Net Assets Available for
Plan Benefits, with Fund Information.................. F-2
Statement of Changes in Net Assets Available
for Plan Benefits, with Fund Information.............. F-4
Notes to Financial Statements........................... F-5
EXHIBITS
Exhibit A Consent of Independent Auditors
<PAGE> 3
SIGNATURES
The Plan. Pursuant to the requirements of the
Securities Exchange Act of 1934, the Plan Committee has duly
caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
REYNOLDS METALS COMPANY
SAVINGS AND INVESTMENT PLAN
FOR SALARIED EMPLOYEES
By: /s/ F. Robert Newman
---------------------------------
F. Robert Newman
Vice President, Human Resources
Reynolds Metals Company and
Member, Savings and Investment
Plan Committee
DATE: June 24, 1998
<PAGE> F-1
Report of Ernst & Young LLP, Independent Auditors
Board of Directors
Reynolds Metals Company
We have audited the accompanying statements of net assets
available for plan benefits of the Reynolds Metals Company
Savings and Investment Plan for Salaried Employees as of
December 31, 1997 and 1996, and the related statement of
changes in net assets available for plan benefits for the
year ended December 31, 1997. These financial statements
are the responsibility of the management of Reynolds Metals
Company, the Plan's sponsor. Our responsibility is to
express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the net assets
available for plan benefits of the Plan at December 31, 1997
and 1996, and the changes in its net assets available for
plan benefits for the year ended December 31, 1997, in
conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an
opinion on the basic financial statements taken as a whole.
The Fund Information in the statement of net assets
available for plan benefits and the statement of changes in
net assets available for plan benefits is presented for
purposes of additional analysis rather than to present the
net assets available for plan benefits and changes in net
assets available for plan benefits of each fund. The Fund
Information has been subjected to the auditing procedures
applied in our audits of the basic financial statements and,
in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ ERNST & YOUNG LLP
Richmond, Virginia
June 19, 1998
<PAGE> F-2
<TABLE>
Reynolds Metals Company
Savings and Investment Plan for Salaried Employees
Statement of Net Assets Available for Plan Benefits, with Fund Information
December 31, 1997
(Dollars in Thousands)
<CAPTION>
Fund Information
---------------------------------------------------------------------------------
Non-
Participant
Participant Directed Directed
---------------------------------------------------------------------------------
Small
Inter- Capita-
Reynolds Diversified Balanced Interest national lization Reynolds
Stock Equities Investment Income Equities Equities Loan Stock
Fund Fund Fund Fund Fund Fund Fund Fund Total
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Investment in Master Trust $76,209 $95,078 $33,492 $92,267 $8,097 $23,919 $10,405 $106,153 $445,620
Accrued income 431 - - - - - - 601 1,032
Contributions receivable 208 62 126 260 54 11 - 355 1,076
--------------------------------------------------------------------------------------------
Net assets available for plan benefits $76,848 $95,140 $33,618 $92,527 $8,151 $23,930 $10,405 $107,109 $447,728
============================================================================================
See accompanying notes.
</TABLE>
<PAGE> F-3
<TABLE>
Reynolds Metals Company
Savings and Investment Plan for Salaried Employees
Statement of Net Assets Available for Plan Benefits, with Fund Information
December 31, 1996
(Dollars in Thousands)
<CAPTION>
Fund Information
---------------------------------------------------------------------------------
Non-
Participant
Participant Directed Directed
---------------------------------------------------------------------------------
Small
Inter- Capita-
Reynolds Diversified Balanced Interest national lization Reynolds
Stock Equities Investment Income Equities Equities Loan Stock
Fund Fund Fund Fund Fund Fund Fund Fund Total
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Investment in Master Trust $55,482 $71,995 $27,906 $ 98,504 $7,401 $15,271 $11,327 $103,780 $391,666
Accrued income 340 - - - - - - 637 977
Contributions receivable 107 202 177 137 39 95 - 146 903
Receivable from Executive Life Insurance
Company - - - 2,565 - - - - 2,565
---------------------------------------------------------------------------------------------
Total assets 55,929 72,197 28,083 101,206 7,440 15,366 11,327 104,563 396,111
Liabilities
Payable to Reynolds Metals Company - - - 2,565 - - - - 2,565
--------------------------------------------------------------------------------------------
Net assets available for plan benefits $55,929 $72,197 $28,083 $ 98,641 $7,440 $15,366 $11,327 $104,563 $393,546
============================================================================================
See accompanying notes.
</TABLE>
<PAGE> F-4
<TABLE>
Reynolds Metals Company
Savings and Investment Plan for Salaried Employees
Statement of Changes in Net Assets Available for Plan Benefits, with Fund Information
Year Ended December 31, 1997
(Dollars in Thousands)
<CAPTION>
Fund Information
---------------------------------------------------------------------------------
Non-
Participant
Participant Directed Directed
---------------------------------------------------------------------------------
Small
Inter- Capita-
Reynolds Diversified Balanced Interest national lization Reynolds
Stock Equities Investment Income Equities Equities Loan Stock
Fund Fund Fund Fund Fund Fund Fund Fund Total
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets:
Net Investment gain from Master Trust
(Note 3): $ 4,535 $24,006 $ 5,927 $ 6,916 $ 221 $ 4,984 $ 944 $ 9,496 $ 57,029
Contributions:
Employer - - - - - - - 6,983 6,983
Employee 3,588 6,771 3,219 4,371 1,283 2,660 - - 21,892
---------------------------------------------------------------------------------------------
3,588 6,771 3,219 4,371 1,283 2,660 - 6,983 28,875
Assets transferred from other plans 11,357 - - - - - - - 11,357
---------------------------------------------------------------------------------------------
Total Additions 19,480 30,777 9,146 11,287 1,504 7,644 944 16,479 97,261
Deductions from net assets:
Withdrawals by participants 5,861 6,768 2,287 10,916 722 1,375 788 12,688 41,405
Assets transferred to other plans - 299 78 452 24 30 106 685 1,674
---------------------------------------------------------------------------------------------
Total Deductions 5,861 7,067 2,365 11,368 746 1,405 894 13,373 43,079
Interfund transfers 7,300 (767) (1,246) (6,033) (47) 2,325 (972) (560) -
---------------------------------------------------------------------------------------------
Net increase (decrease) 20,919 22,943 5,535 (6,114) 711 8,564 (922) 2,546 54,182
Net assets available for plan benefits:
Beginning of year 55,929 72,197 28,083 98,641 7,440 15,366 11,327 104,563 393,546
---------------------------------------------------------------------------------------------
End of year $76,848 $95,140 $33,618 $92,527 $8,151 $23,930 $10,405 $107,109 $447,728
=============================================================================================
See accompanying notes.
</TABLE>
<PAGE> F-5
Reynolds Metals Company
Savings and Investment Plan for Salaried Employees
Notes to Financial Statements
(Dollars in Thousands)
December 31, 1997
1. Significant Accounting Policies
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the
financial statements and the reported amounts of income and
expenses during the reporting period. Actual results could
differ from those estimates.
The accounting records of the Reynolds Metals Company
Savings and Investment Plan for Salaried Employees ("Plan")
are maintained on the accrual basis. All securities
transactions are recorded as of the trade date.
Investments in Reynolds Metals Company Common Stock (stated
at fair value) are valued at the last reported sales price
on the last business day of the year. Investments in mutual
funds are measured by quoted market prices and are reported
at aggregate fair value at year-end. Guaranteed investment
contracts with insurance companies are reported at "contract
value," which equals cost plus accrued income. Structured
investment contracts are reported at fair value, which in
the case of structured investment contracts equals contract
value.
2. Summary of Significant Plan Provisions
Reynolds Metals Company (the "Company") established the Plan
effective July 1, 1978, covering salaried employees of the
Company and certain of its subsidiaries and affiliates. The
Plan is a defined contribution plan under the Employee
Retirement Income Security Act of 1974 ("ERISA") and
qualifies as a "cash or deferred" arrangement under Section
401(k) of the Internal Revenue Code. A complete description
of the Plan is contained in the Summary Plan Description and
in the Plan document, copies of which are available from the
Company.
Plan participation is available to eligible employees who
have completed 30 days of service and is voluntary. A
participant is entitled to make payroll contributions to the
Plan in specified amounts ranging from 1% to 16% of
compensation in 1% increments.
<PAGE> F-6
Reynolds Metals Company
Savings and Investment Plan for Salaried Employees
Notes to Financial Statements (continued)
2. Summary of Significant Plan Provisions (continued)
The Company contributes an amount equal to 50% of each
participating employee's payroll contributions up to 6% of
compensation. The Company may also contribute up to an
additional 50% of each participating employee's payroll
contributions up to 6% of compensation. The Company did not
elect to make an additional matching contribution for 1997
or 1996.
Participants may contribute 1% to 16% (in 1% increments) of
any profit sharing award or gainsharing payment received.
Such contributions are not matched by the Company.
Participants may elect to make their contributions on a
before or after tax basis or a combination thereof. Company
matching contributions are made on a "pretax" basis. Highly
compensated participants may be required to reduce the
amount of "pretax" contributions made to or held by the Plan
on their behalf to permit the Plan to satisfy the
nondiscrimination requirements of Section 401(k) of the
Internal Revenue Code.
Participants in the Plan are fully vested in their account
balances. Withdrawals and distributions are handled in
accordance with the Plan provisions and are subject to
certain regulatory restrictions. The trustee holds all of
the Plan's investment assets and executes transactions
therein.
Although it has not expressed any intent to do so, the
Company has the right under the Plan to discontinue its
contributions at any time and to terminate the Plan subject
to the provisions of ERISA.
The Company is the Plan adminstrator and bears the related
costs, except for investment-related and trustee fees, which
are paid by the Plan.
3. Commingled Master Trust Investments
As of January 1, 1996, all of the assets of the Plan were
transferred into a Master Trust under a Master Trust
Agreement between Reynolds Metals Company and The Northern
Trust Company, as trustee, and are commingled with the
assets of three other savings plans of the Company and one
of its subsidiaries. All the investments of the Plan were
held in the Master Trust as of December 31, 1997 and 1996.
Net assets and net investment gains from the Master Trust
are allocated to participating plans based on the aggregate
account balances of individual participants in each plan.
<PAGE> F-7
Reynolds Metals Company
Savings and Investment Plan for Salaried Employees
Notes to Financial Statements (continued)
3. Commingled Master Trust Investments (continued)
Substantially all of the assets held in the Diversified
Equities Fund and the Balanced Investment Fund are invested
in the Vanguard Institutional Index Fund and the Vanguard
STAR Fund, respectively. These are no-load mutual funds held
and managed by The Vanguard Group of Investment Companies.
Substantially all of the assets held in the International
Equities Fund and the Small Capitalization Equities Fund are
invested in the T. Rowe Price Foreign Equity Fund and the T.
Rowe Price Small-Cap Value Fund, respectively. These are no-
load mutual funds held and managed by T. Rowe Price
Associates, Inc.
The assets held in the Interest Income Fund generally are
invested in guaranteed investment contracts ("GICs") at a
fixed rate of return and structured investment contracts
("SICs") with various insurance companies and banks.
SICs represent a diversified portfolio of high grade
investments held in the name of the Plan in conjunction
with a corresponding contract with the issuer of the
SIC to provide a fixed or variable rate of return
(based on the investment experience and reset
quarterly) on the cost of the portfolio. GICs and SICs
generally provide for the full repayment of principal and
interest. Upon the occurrence of certain events (including
layoffs by the Company or its applicable affiliates),
however, market value of the GIC or SIC, if lower than its
book value, may be repaid (a "Market Value Adjustment").
Currently, in the opinion of the Company, the likelihood of
a material loss to the Plan as a result of such a Market
Value Adjustment is remote. Interest is credited to
participants' accounts on the dollar-weighted average
(blended rate) basis. The annual rate of return on these
contracts during 1997 and 1996 was approximately 6.3% and
6.4%, respectively. The current yield on December 31, 1997
was 6.4% (6.4% on December 31, 1996). The fair value of the
Plan's GICs approximates contract value.
No individual SIC or GIC exceeded 5% of the Master Trust's
assets, except for a SIC with Transamerica Life with a
balance of approximately $39,000 at December 31, 1997.
Cash and cash equivalents of the Master Trust are invested
in a short-term investment fund managed by The Northern
Trust Company.
<PAGE> F-8
Reynolds Metals Company
Savings and Investment Plan for Salaried Employees
Notes to Financial Statements (continued)
3. Commingled Master Trust Investments (continued)
In April 1991, Executive Life Insurance Company ("Executive
Life"), the issuer of one of the guaranteed investment
contracts then held by the Plan, was placed into conservator
ship. The Company and the Plan entered into an agreement on
August 1, 1991, whereby the Company was obligated to provide
interest-free loans to the Plan for any amounts due under
the guaranteed investment contract which Executive Life
failed to pay. As of December 31, 1997, the Company had
advanced to the Plan all amounts due under this contract.
The Plan is obligated to repay the loans to the extent
amounts are subsequently recovered from, or on behalf of,
Executive Life, and any remaining balance will be forgiven
by the Company. As of December 31, 1997, no additional
recoveries from Executive Life are expected.
During 1997, certain assets of the Plan were transferred
into other plans and from other plans of the Company as a
result of employee transfers. There was no effect on any
participant's accounts as a result of the transfers.
Summarized financial fund information of the commingled
accounts within the Master Trust is presented below:
<TABLE>
<CAPTION>
Small
Inter- Capita-
Reynolds Diversified Balanced Interest national lization
Stock Equities Investment Income Equities Equities Loan
Fund Fund Fund Fund Fund Fund Fund Total
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MASTER TRUST NET ASSETS-1997
Assets
Accrued Income $ 1,082 $ 1,082
Cash and cash equivalents 2,247 $ 47 $ 11 $ 40,726 $ 6 $ 25 43,062
Contributions receivable 598 195 215 671 79 56 $ 13 1,827
Investments:
Common stock 189,068 - - - - - - 189,068
Investment contracts - - - 195,952 - - - 195,952
Mutual funds - 131,723 46,727 - 10,219 34,639 - 223,308
Loans to participants - - - - - - 19,962 19,962
---------------------------------------------------------------------------------------
Master Trust net assets $192,995 $131,965 $46,953 $237,349 $10,304 $34,720 $19,975 $674,261
=======================================================================================
Portion of Master Trust
allocable to the Plan $183,957 $ 95,140 $33,618 $ 92,527 $ 8,151 $23,930 $10,405 $447,728
Percent 95% 72% 72% 39% 79% 69% 52% 66%
</TABLE>
<PAGE> F-9
Reynolds Metals Company
Savings and Investment Plan for Salaried Employees
Notes to Financial Statements (continued)
3. Commingled Master Trust Investments (continued)
<TABLE>
<CAPTION>
Small
Inter- Capita-
Reynolds Diversified Balanced Interest national lization
Stock Equities Investment Income Equities Equities Loan
Fund Fund Fund Fund Fund Fund Fund Total
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MASTER TRUST NET ASSETS-1996
Assets
Accrued Income $ 997 $ 997
Cash and cash equivalents 2,213 $ 48 $ 3 $ 17,070 $ 4 $ 3 19,341
Contributions receivable 259 209 183 143 56 166 1,016
Investments:
Common stock 160,346 - - - - - 160,346
Investment contracts - - - 220,145 - - 220,145
Mutual funds - 88,863 36,576 - 8,640 19,993 154,072
Loans to participants - - - - - - $19,326 19,326
---------------------------------------------------------------------------------------
Total assets 163,815 89,120 36,762 237,358 8,700 20,162 19,326 575,243
Liabilities
Accounts payable 1 - - 12 - - - 13
---------------------------------------------------------------------------------------
Master Trust net assets $163,814 $89,120 $36,762 $237,346 $8,700 $20,162 $19,326 $575,230
=======================================================================================
Portion of Master Trust
allocable to the Plan $160,492 $72,197 $28,083 $ 98,641 $7,440 $15,366 $11,327 $393,546
Percent 98% 81% 76% 42% 86% 76% 59% 68%
</TABLE>
<PAGE> F-10
Reynolds Metals Company
Savings and Investment Plan for Salaried Employees
Notes to Financial Statements (continued)
3. Commingled Master Trust Investments (continued)
<TABLE>
<CAPTION>
Small
Inter- Capita-
Reynolds Diversified Balanced Interest national lization
Stock Equities Investment Income Equities Equities Loan
Fund Fund Fund Fund Fund Fund Fund Total
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CHANGES IN MASTER TRUST
ASSETS -1997
Additions:
Contributions from plans $ 11,682 $ 13,182 $ 5,775 $ 28,736 $ 2,090 $ 4,979 $ 66,444
Net realized and unrealized
appreciation (depreciation)
of investments 9,977 29,085 6,564 - 109 6,267 52,002
Interest and dividends 4,107 1,976 1,427 15,552 135 549 $ 1,707 25,453
Assets transferred into
Master Trust 11,809 - - - - - 25 11,834
---------------------------------------------------------------------------------------
37,575 44,243 13,766 44,288 2,334 11,795 1,732 155,733
---------------------------------------------------------------------------------------
Deductions:
Distributions to plans 19,011 7,595 2,787 23,616 800 1,623 1,270 56,702
Administrative expenses - - - - - - - -
---------------------------------------------------------------------------------------
19,011 7,595 2,787 23,616 800 1,623 1,270 56,702
Interfund transfers-net 10,617 6,197 (788) (20,669) 70 4,386 187 -
---------------------------------------------------------------------------------------
Net additions 29,181 42,845 10,191 3 1,604 14,558 649 99,031
Master Trust net assets at
beginning of period 163,814 89,120 36,762 237,346 8,700 20,162 19,326 575,230
---------------------------------------------------------------------------------------
Master Trust net assets at end of
period $192,995 $131,965 $46,953 $237,349 $10,304 $34,720 $19,975 $674,261
=======================================================================================
</TABLE>
<PAGE> F-11
Reynolds Metals Company
Savings and Investment Plan for Salaried Employees
Notes to Financial Statements (continued)
4. Differences Between Financial Statements and Form 5500
The following is a reconciliation of net assets available
for benefits per the financial statements to the Form 5500:
<TABLE>
<CAPTION>
December 31,
1997 1996
---------------------
<S> <C> <C>
Net assets available for benefits per the
financial statements $447,728 $393,546
Amounts allocated to withdrawn participants 870 329
---------------------
Net assets available for benefits per the
Form 5500 $446,858 $393,217
=====================
</TABLE>
The following is a reconciliation of benefits paid to
participants per the financial statements to the Form 5500:
<TABLE>
<CAPTION>
Year ended
December 31,
1997
--------------
<S> <C>
Benefits paid to participants per the
financial statements $41,405
Add: Amounts allocated on Form 5500 to
withdrawn participants in the current year 870
Less: Amounts allocated on Form 5500 to
withdrawn participants in the prior year (329)
--------------
Benefits paid to participants per the Form
5500 $41,946
==============
</TABLE>
5. Income Taxes
The Internal Revenue Service has determined that the Plan
qualifies under Section 401(a) of the Internal Revenue Code
(the "Code"). As long as the Plan continues to be
qualified, under present Federal income tax laws and
regulations participants will not be taxed on employer
contributions or investment earnings allocated to their
account. Participants will normally be subject to tax
thereon at such time as they receive distributions from the
Plan. As long as the Plan continues to be qualified, the
Plan will not be taxed on its dividend and interest income
or on any capital gains realized by it or on any unrealized
appreciation of investments.
<PAGE>
INDEX TO EXHIBITS
Exhibit A Consent of Independent Auditors
<PAGE>
EXHIBIT A
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8 No. 33-20498) pertaining to the Reynolds
Metals Company Savings and Investment Plan for Salaried Employees
and in the related Prospectus of our report dated June 19, 1998,
with respect to the financial statements of the Reynolds Metals
Company Savings and Investment Plan for Salaried Employees
included in this Annual Report (Form 11-K) for the year ended
December 31, 1997.
/s/ ERNST & YOUNG LLP
Richmond, Virginia
June 19, 1998
EXHIBIT 99.2
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 1-1430
A. Full title of the plan and the address of
the plan, if different from that of the issuer
named below:
REYNOLDS METALS COMPANY
SAVINGS PLAN
FOR HOURLY EMPLOYEES
B. Name of issuer of the securities held
pursuant to the plan and the address of
its principal executive office:
REYNOLDS METALS COMPANY
6601 West Broad Street
P. O. Box 27003
Richmond, Virginia 23261-7003
<PAGE> 2
REQUIRED INFORMATION
FINANCIAL STATEMENTS AND EXHIBITS
FINANCIAL STATEMENTS
Page No.
Report of Independent Auditors............................ F-1
Audited Financial Statements
Statements of Net Assets Available for
Plan Benefits, with Fund Information................... F-2
Statement of Changes in Net Assets Available
for Plan Benefits, with Fund Information............... F-4
Notes to Financial Statements............................ F-5
EXHIBITS
Exhibit A Consent of Independent Auditors
<PAGE> 3
SIGNATURES
The Plan. Pursuant to the requirements of the
Securities Exchange Act of 1934, the Plan Committee has duly
caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
REYNOLDS METALS COMPANY
SAVINGS PLAN FOR HOURLY EMPLOYEES
By: /s/ F. Robert Newman
-----------------------------------
F. Robert Newman
Vice President, Human Resources
Reynolds Metals Company and
Member, Plan Committee for Hourly
Savings Plan
DATE: June 24, 1998
<PAGE> F-1
Report of Ernst & Young LLP, Independent Auditors
Board of Directors
Reynolds Metals Company
We have audited the accompanying statements of net assets
available for plan benefits of the Reynolds Metals Company
Savings Plan for Hourly Employees as of December 31, 1997
and 1996, and the related statement of changes in net assets
available for plan benefits for the year ended December 31,
1997. These financial statements are the responsibility of
the management of Reynolds Metals Company, the Plan's
sponsor. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the net assets
available for plan benefits of the Plan at December 31, 1997
and 1996, and the changes in its net assets available for
plan benefits for the year ended December 31, 1997, in
conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an
opinion on the basic financial statements taken as a whole.
The Fund Information in the statement of net assets
available for plan benefits and the statement of changes in
net assets available for plan benefits is presented for
purposes of additional analysis rather than to present the
net assets available for plan benefits and changes in net
assets available for plan benefits of each fund. The Fund
Information has been subjected to the auditing procedures
applied in our audits of the basic financial statements and,
in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ ERNST & YOUNG LLP
Richmond, Virginia
June 19, 1998
<PAGE> F-2
<TABLE>
Reynolds Metals Company
Savings Plan for Hourly Employees
Statement of Net Assets Available for Plan Benefits, with Fund Information
(Dollars in Thousands)
<CAPTION>
December 31, 1997
---------------------------------------------------------------------------------------
Fund Information
---------------------------------------------------------------------------
Small
Inter- Capita-
Reynolds Diversified Balanced Interest national lization
Stock Equities Investment Income Equities Equities Loan
Fund Fund Fund Fund Fund Fund Fund Total
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Investment in Master Trust $7,638 $34,654 $12,428 $139,651 $1,953 $10,108 $9,119 $215,551
Accrued income 43 - - - - - - 43
Contribution receivable 30 125 84 404 23 43 13 722
---------------------------------------------------------------------------------------
Net assets available for plan benefits $7,711 $34,779 $12,512 $140,055 $1,976 $10,151 $9,132 $216,316
=======================================================================================
See accompanying notes.
</TABLE>
<PAGE> F-3
<TABLE>
Reynolds Metals Company
Savings Plan for Hourly Employees
Statement of Net Assets Available for Plan Benefits, with Fund Information
(Dollars in Thousands)
December 31, 1996
---------------------------------------------------------------------------------------
Fund Information
---------------------------------------------------------------------------
Small
Inter- Capita-
Reynolds Diversified Balanced Interest national lization
Stock Equities Investment Income Equities Equities Loan
Fund Fund Fund Fund Fund Fund Fund Total
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Investment in Master Trust $3,061 $16,274 $8,334 $134,757 $1,189 $4,644 $7,744 $176,003
Accrued income 19 - - - - - - 19
---------------------------------------------------------------------------------------
Total assets 3,080 16,274 8,334 134,757 1,189 4,644 7,744 176,022
---------------------------------------------------------------------------------------
Liabilities
Accounts payable and other 1 - - 12 - - - 13
---------------------------------------------------------------------------------------
Net assets available for plan benefits $3,079 $16,274 $8,334 $134,745 $1,189 $4,644 $7,744 $176,009
=======================================================================================
See accompanying notes.
</TABLE>
<PAGE> F-4
<TABLE>
Reynolds Metals Company
Savings Plan for Hourly Employees
Statement of Changes in Net Assets Available for Plan Benefits, with Fund Information
(Dollars in Thousands)
<CAPTION>
Year Ended December 31, 1997
---------------------------------------------------------------------------------------
Fund Information
---------------------------------------------------------------------------
Small
Inter- Capita-
Reynolds Diversified Balanced Interest national lization
Stock Equities Investment Income Equities Equities Loan
Fund Fund Fund Fund Fund Fund Fund Total
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets:
Net investment gain (loss) from
Master Trust (Note 3): $ (48) $ 6,658 $ 1,945 $ 8,343 $ 23 $ 1,718 $ 730 $ 19,369
Assets received from other plans 80 - - - - - - 80
Contributions:
Employer 366 2,236 800 10,720 264 814 - 15,200
Employee 601 3,759 1,533 12,822 463 1,333 - 20,511
---------------------------------------------------------------------------------------
967 5,995 2,333 23,542 727 2,147 - 35,711
---------------------------------------------------------------------------------------
Total Additions 999 12,653 4,278 31,885 750 3,865 730 55,160
Deductions from net assets:
Withdrawals by participants 295 733 448 12,134 71 234 425 14,340
Assets transferred to other plans - 35 27 398 11 27 15 513
Administrative expenses - - - - - - - -
---------------------------------------------------------------------------------------
Total Deductions 295 768 475 12,532 82 261 440 14,853
Interfund transfers 3,928 6,620 375 (14,043) 119 1,903 1,098 -
---------------------------------------------------------------------------------------
Net increase 4,632 18,505 4,178 5,310 787 5,507 1,388 40,307
Net assets available for plan benefits:
Beginning of year 3,079 16,274 8,334 134,745 1,189 4,644 7,744 176,009
---------------------------------------------------------------------------------------
End of year $7,711 $34,779 $12,512 $140,055 $1,976 $10,151 $9,132 $216,316
=======================================================================================
See accompanying notes.
</TABLE>
<PAGE> F-5
Reynolds Metals Company
Savings Plan for Hourly Employees
Notes to Financial Statements
December 31, 1997
(Dollars in Thousands)
1. Significant Accounting Policies
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the
financial statements and the reported amounts of income and
expenses during the reporting period. Actual results could
differ from those estimates.
The accounting records of the Reynolds Metals Company
Savings Plan for Hourly Employees ("Plan") are maintained on
the accrual basis. All securities transactions are recorded
as of the trade date.
Investments in Reynolds Metals Company Common Stock (stated
at fair value) are valued at the last reported sales price
on the last business day of the year. Investments in mutual
funds are measured by quoted market prices and are reported
at aggregate fair value at year-end. Guaranteed investment
contracts with insurance companies are reported at "contract
value," which equals cost plus accrued income. Structured
investment contracts are reported at fair value, which in
the case of structured investment contracts equals contract
value.
2. Summary of Significant Plan Provisions
Reynolds Metals Company (the "Company") established the Plan
effective January 1, 1986, covering hourly employees of the
Company and certain of its subsidiaries (each an "Employer")
who are in a bargaining unit covered by a labor agreement
that incorporates the Plan by reference. The Plan is a defined
contribution plan under the Employee Retirement Income
Security Act of 1974 ("ERISA") and qualifies as a "cash or
deferred" arrangement under Section 401(k) of the Internal
Revenue Code. A complete description of the Plan is
contained in the Summary Plan Description and in the Plan
document, copies of which are available from the Company.
Hourly employees who are in a bargaining unit covered by a
collective bargaining agreement that incorporates the Plan
by reference will become eligible to participate in the Plan
on the later of (a) 30 days after beginning their employment
with an Employer, or (b) the date on which the collective
bargaining agreement under which they are covered first
incorporates the Plan by reference. Plan participation is
voluntary.
<PAGE> F-6
Reynolds Metals Company
Savings Plan for Hourly Employees
Notes to Financial Statements (continued)
2. Summary of Significant Plan Provisions (continued)
Each collective bargaining agreement that incorporates the
Plan by reference provides that participants may elect to
make payroll contributions to the Plan in specified amounts
ranging from 1% to 12% of compensation in 1% increments.
Each such collective bargaining agreement may also provide
for the following types of contributions:
(a) Company Matching Contributions: At certain bargaining
units, the applicable Employer will, subject to certain
limitations, contribute to the Plan on behalf of each
eligible participant, a fixed percentage of a portion
of the payroll contributions by the participant.
(b) Negotiated Deferral Contributions: At certain
bargaining units, the applicable Employer will
make a contribution to a participant's account based on
the number of hours worked by each active employee
participating in the Plan.
(c) Additional Voluntary Contributions:
Eligible employees who receive a profit-sharing
award, gainsharing payment or other designated type of
lump sum payment may contribute between 10% and 50%
of the award and/or payment (in 10% increments) to
the Plan. Such contributions are not
matched by the Company or any other Employer.
Participants may elect to make their contributions on a
before or after tax basis or a combination thereof.
Employer contributions (matching and negotiated deferral)
are made on a "pretax" basis. Highly compensated
participants may be required to reduce the amount of
"pretax" contributions made to or held by the Plan on their
behalf to permit the Plan to satisfy the nondiscrimination
requirements of Section 401(k) of the Internal Revenue Code.
Participants are fully vested in their account balances.
Withdrawals and distributions are handled in accordance with
the Plan provisions and are subject to certain regulatory
restrictions. The trustee holds all of the Plan's
investment assets and executes transactions therein.
Although it has not expressed any intent to do so, the
Company has the right under the Plan to discontinue its
contributions at any time and to terminate the Plan subject
to the provisions of ERISA and subject to the terms of any
applicable collective bargaining agreement.
<PAGE> F-7
Reynolds Metals Company
Savings Plan for Hourly Employees
Notes to Financial Statements (continued)
2. Summary of Significant Plan Provisions (continued)
The Company is the Plan administrator and bears the related
costs, except for investment-related and trustee fees, which
are paid by the Plan.
3. Commingled Master Trust Investments
All of the investments of the Plan as of December 31, 1997
and 1996 were held in a Master Trust under a Master Trust
Agreement between Reynolds Metals Company and The Northern
Trust Company, as trustee, and are commingled with the
assets of three other savings plans of the Company and one
of its subsidiaries. Net assets and net investment gains
from the Master Trust are allocated to participating plans
based on the aggregate account balance of individual
participants in each Plan.
Substantially all the assets held in the Diversified
Equities Fund and the Balanced Investment Fund are invested
in the Vanguard Institutional Index Fund and the Vanguard
STAR Fund, respectively. These are no-load mutual funds held
and managed by The Vanguard Group of Investment Companies.
Substantially all of the assets held in the International
Equities Fund and the Small Capitalization Equities Fund are
invested in the T. Rowe Price Foreign Equity Fund and the T.
Rowe Price Small-Cap Value Fund, respectively. These are no-
load mutual funds held and managed by T. Rowe Price
Associates, Inc.
The assets of the Interest Income Fund generally are
invested in guaranteed investment contracts ("GICs") at
fixed rates of return and structured investment contracts
("SICs") with various insurance companies and banks.
SICs represent high grade investments held in the name
of the Master Trust in conjunction with a corresponding
contract with the issuer of the SIC to provide a fixed or
variable rate of return (based on investment experience
and reset quarterly) on the cost of the investment.
GICs and SICs generally provide for the full
repayment of principal and interest. Upon the occurrence
of certain events (including layoffs by the Company or its
applicable affiliates), however, market value of the GIC or
SIC, if lower than its book value, may be repaid (a "Market
Value Adjustment"). Currently, in the opinion of the
Company, the likelihood of a material loss to the Plan as a
result of such a Market Value Adjustment is remote. The
annual rate of return on these contracts during 1997 and
1996 was 6.3% and 6.3%, respectively. The current yield on
these contracts at December 31, 1997 was 6.3% (6.4% at
December 31, 1996). Interest is credited to participants'
accounts on the dollar-weighted average (blended rate)
basis. The fair value of the Plan's GICs approximates
contract value.
<PAGE> F-8
Reynolds Metals Company
Savings Plan for Hourly Employees
Notes to Financial Statements (continued)
3. Commingled Master Trust Investments (continued)
No individual SIC or GIC exceeded 5% of the Master Trust's
assets, except for a SIC with Transamerica Life with a
balance of approximately $39,000.
Cash and cash equivalents of the Master Trust are invested
in a short-term investment fund managed by The Northern
Trust Company.
During 1997 and 1996, certain assets of the Plan were
transferred into other plans and from other plans of the
Company as a result of employee transfers. There was no
effect on any participant's accounts as a result of the
transfer.
Summarized financial fund information of the commingled
accounts within the Master Trust is presented below:
<TABLE>
<CAPTION>
Small
Inter- Capita-
Reynolds Diversified Balanced Interest national lization
Stock Equities Investment Income Equities Equities Loan
Fund Fund Fund Fund Fund Fund Fund Total
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MASTER TRUST NET
ASSETS-1997
Assets
Accrued Income $ 1,082 $ 1,082
Cash and cash equivalents 2,247 $ 47 $ 11 $ 40,726 $ 6 $ 25 43,062
Contributions receivable 598 195 215 671 79 56 $ 13 1,827
Investments:
Common stock 189,068 - - - - - - 189,068
Investment contracts - - - 195,952 - - - 195,952
Mutual funds - 131,723 46,727 - 10,219 34,639 - 223,308
Loans to participants - - - - - - 19,962 19,962
---------------------------------------------------------------------------------------
Master Trust net assets $192,995 $131,965 $46,953 $237,349 $10,304 $34,720 $19,975 $674,261
=======================================================================================
Portion of Master Trust
allocable to the Plan $ 7,711 $ 34,779 $12,512 $140,055 $ 1,976 $10,151 $ 9,132 $216,316
Percent 4% 26% 26% 59% 19% 29% 46% 32%
</TABLE>
<PAGE> F-9
Reynolds Metals Company
Savings Plan for Hourly Employees
Notes to Financial Statements (continued)
3. Commingled Master Trust Investments (continued)
<TABLE>
<CAPTION>
Small
Inter- Capita-
Reynolds Diversified Balanced Interest national lization
Stock Equities Investment Income Equities Equities Loan
Fund Fund Fund Fund Fund Fund Fund Total
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MASTER TRUST NET
ASSETS-1996
Assets
Accrued Income $ 997 $ 997
Cash and cash equivalents 2,213 $ 48 $ 3 $ 17,070 $ 4 $ 3 19,341
Contributions receivable 259 209 183 143 56 166 1,016
Investments:
Common stock 160,346 - - - - - 160,346
Investment contracts - - - 220,145 - - 220,145
Mutual funds - 88,863 36,576 - 8,640 19,993 154,072
Loans to participants - - - - - - $19,326 19,326
---------------------------------------------------------------------------------------
Total assets 163,815 89,120 36,762 237,358 8,700 20,162 19,326 575,243
Liabilities
Accounts payable 1 - - 12 - - - 13
---------------------------------------------------------------------------------------
Master Trust net assets $163,814 $89,120 $36,762 $237,346 $8,700 $20,162 $19,326 $575,230
=======================================================================================
Portion of Master Trust
allocable to the Plan $ 3,079 $16,274 $ 8,334 $134,745 $1,189 $4,644 $ 7,744 $176,009
Percent 2% 18% 23% 57% 14% 23% 40% 31%
</TABLE>
<PAGE> F-10
Reynolds Metals Company
Savings Plan for Hourly Employees
Notes to Financial Statements (continued)
3. Commingled Master Trust Investments (continued)
<TABLE>
<CAPTION>
Small
Inter- Capita-
Reynolds Diversified Balanced Interest national lization
Stock Equities Investment Income Equities Equities Loan
Fund Fund Fund Fund Fund Fund Fund Total
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CHANGES IN MASTER TRUST
ASSETS -1997
Additions:
Contributions from plans $ 11,682 $ 13,182 $ 5,775 $ 28,736 $ 2,090 $ 4,979 $ 66,444
Net realized and unrealized
appreciation (depreciation)
of investments 9,977 29,085 6,564 - 109 6,267 52,002
Interest and dividends 4,107 1,976 1,427 15,552 135 549 $ 1,707 25,453
Assets transferred into
Master Trust 11,809 - - - - - 25 11,834
---------------------------------------------------------------------------------------
37,575 44,243 13,766 44,288 2,334 11,795 1,732 155,733
---------------------------------------------------------------------------------------
Deductions:
Distributions to plans 19,011 7,595 2,787 23,616 800 1,623 1,270 56,702
Administrative expenses - - - - - - - -
---------------------------------------------------------------------------------------
19,011 7,595 2,787 23,616 800 1,623 1,270 56,702
Interfund transfers-net 10,617 6,197 (788) (20,669) 70 4,386 187 -
---------------------------------------------------------------------------------------
Net additions 29,181 42,845 10,191 3 1,604 14,558 649 99,031
Master Trust net assets at
beginning of period 163,814 89,120 36,762 237,346 8,700 20,162 19,326 575,230
---------------------------------------------------------------------------------------
Master Trust net assets at
end of period $192,995 $131,965 $46,953 $237,349 $10,304 $34,720 $19,975 $674,261
=======================================================================================
</TABLE>
<PAGE> F-11
Reynolds Metals Company
Savings Plan for Hourly Employees
Notes to Financial Statements (continued)
4. Differences Between Financial Statements and Form 5500
The following is a reconciliation of net assets available
for benefits per the financial statements to the Form 5500:
<TABLE>
<CAPTION>
December 31
1997 1996
--------------------
<S> <C> <C>
Net assets available for benefits per
the financial statements $216,316 $176,009
Amounts allocated to withdrawn participants 374 172
--------------------
Net assets available for benefits per
the Form 5500 $215,942 $175,837
====================
</TABLE>
The following is a reconciliation of benefits paid to
participants per the financial statements to the Form 5500:
<TABLE>
<CAPTION>
December 31
1997
-------------
<S> <C>
Benefits paid to participants per the
financial statements $14,340
Add: Amounts allocated on Form 5500 to
withdrawn participants in the current year 374
Less: Amounts allocated on Form 5500 to
withdrawn participants in the prior year (172)
-------------
Benefits paid to participants per the Form
5500 $14,542
=============
</TABLE>
5. Income Tax Status
The Internal Revenue Service has determined that the Plan
qualifies under Section 401(a) of the Internal Revenue Code
(the "Code"). As long as the Plan continues to be
qualified, under Federal income tax laws and regulations
participants will not be taxed on employer contributions or
investment earnings allocated to their account.
Participants will normally be subject to tax thereon at such
time as they receive distributions from the Plan. As long
as the Plan continues to be qualified, the Plan will not be
taxed on its dividend and interest income or any capital
gains realized by it or any unrealized appreciation of
investments.
<PAGE>
INDEX TO EXHIBITS
Exhibit A Consent of Independent Auditors
<PAGE>
EXHIBIT A
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the
Registration Statement (Form S-8 No. 33-66032) pertaining to
the Reynolds Metals Company Savings Plan for Hourly
Employees and in the related Prospectus of our report dated
June 19, 1998, with respect to the financial statements of
the Reynolds Metals Company Savings Plan for Hourly
Employees included in this Annual Report (Form 11-K) for the
year ended December 31, 1997.
/s/ ERNST & YOUNG LLP
Richmond, Virginia
June 19, 1998
EXHIBIT 99.3
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 1-1430
A. Full title of the plan and the address of
the plan, if different from that of the issuer
named below:
EMPLOYEES SAVINGS PLAN
B. Name of issuer of the securities held
pursuant to the plan and the address of
its principal executive office:
REYNOLDS METALS COMPANY
6601 West Broad Street
P. O. Box 27003
Richmond, Virginia 23261-7003
<PAGE> 2
REQUIRED INFORMATION
FINANCIAL STATEMENTS AND EXHIBITS
FINANCIAL STATEMENTS
Page No.
Report of Independent Auditors............................ F-1
Audited Financial Statements
Statement of Net Assets Available for
Plan Benefits, with Fund Information................... F-2
Statement of Changes in Net Assets Available
for Plan Benefits, with Fund Information............... F-4
Notes to Financial Statements............................ F-5
EXHIBITS
Exhibit A Consent of Independent Auditors
<PAGE> 3
SIGNATURES
The Plan. Pursuant to the requirements of the
Securities Exchange Act of 1934, Reynolds Metals Company, which
administers the Plan, has duly caused this annual report to be
signed on its behalf by the undersigned hereunto duly authorized.
EMPLOYEES SAVINGS PLAN
By: /s/ F. Robert Newman
---------------------------------
F. Robert Newman
Vice President, Human Resources
Reynolds Metals Company
DATE: June 24, 1998
<PAGE> F-1
Report of Ernst & Young LLP, Independent Auditors
Board of Directors
Reynolds Metals Company
We have audited the accompanying statements of net assets
available for plan benefits of the Employees Savings Plan as
of December 31, 1997 and 1996, and the related statement of
changes in net assets available for plan benefits for the
year ended December 31, 1997. These financial statements are
the responsibility of the management of Reynolds Metals
Company, the Plan's sponsor. Our responsibility is to
express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the net assets
available for plan benefits of the Plan at December 31, 1997
and 1996, and the changes in its net assets available for
plan benefits for the year ended December 31, 1997, in
conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an
opinion on the basic financial statements taken as a whole.
The Fund Information in the statement of net assets
available for plan benefits and the statement of changes in
net assets available for plan benefits is presented for
purposes of additional analysis rather than to present the
net assets available for plan benefits and changes in net
assets available for plan benefits of each fund. The Fund
Information has been subjected to the auditing procedures
applied in our audits of the basic financial statements and,
in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ ERNST & YOUNG LLP
Richmond, Virginia
June 19, 1998
<PAGE> F-2
<TABLE>
Employees Savings Plan
Statement of Net Assets Available for Plan Benefits, with Fund Information
(Dollars in Thousands)
<CAPTION>
December 31, 1997
---------------------------------------------------------------------------------------
Fund Information
---------------------------------------------------------------------------
Small
Inter- Capita-
Reynolds Diversified Balanced Interest national lization
Stock Equities Investment Income Equities Equities Loan
Fund Fund Fund Fund Fund Fund Fund Total
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Investment in Master Trust $1,315 $2,038 $818 $4,676 $175 $637 $438 $10,097
Accrued income 7 - - - - - - 7
Contributions receivable 5 8 5 7 2 2 - 29
---------------------------------------------------------------------------------------
Net assets available for plan benefits $1,327 $2,046 $823 $4,683 $177 $639 $438 $10,133
=======================================================================================
See accompanying notes.
</TABLE>
<PAGE> F-3
<TABLE>
Employees Savings Plan
Statement of Net Assets Available for Plan Benefits, with Fund Information
(Dollars in Thousands)
<CAPTION>
December 31, 1996
-------------------------------------------------------------------------------------
Fund Information
---------------------------------------------------------------------------
Small
Inter- Capita-
Reynolds Diversified Balanced Interest national lization
Stock Equities Investment Income Equities Equities Loan
Fund Fund Fund Fund Fund Fund Fund Total
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Investment in Master Trust $242 $642 $342 $3,875 $70 $150 $255 $5,576
Accrued income 1 - - - - - - 1
Contributions receivable - 7 3 6 1 2 - 19
---------------------------------------------------------------------------------------
Net assets available for plan benefits $243 $649 $345 $3,881 $71 $152 $255 $5,596
=======================================================================================
See accompanying notes.
</TABLE>
<PAGE> F-4
<TABLE>
Employees Savings Plan
Statement of Changes in Net Assets Available for Plan Benefits, with Fund Information
(Dollars in Thousands)
<CAPTION>
Year ended December 31, 1997
---------------------------------------------------------------------------------------
Fund Information
---------------------------------------------------------------------------
Small
Inter- Capita-
Reynolds Diversified Balanced Interest national lization
Stock Equities Investment Income Equities Equities Loan
Fund Fund Fund Fund Fund Fund Fund Total
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets:
Net investment gain from
Master Trust (Note 3) $ 101 $ 397 $119 $ 288 $114 $ 33 $ 1,052
Assets transferred from other plans 1,057 334 105 850 $ 35 57 146 2,584
Contributions:
Employer 30 81 41 137 14 25 - 328
Employee 114 335 182 686 66 147 - 1,530
---------------------------------------------------------------------------------------
144 416 223 823 80 172 - 1,858
---------------------------------------------------------------------------------------
Total Additions 1,302 1,147 447 1,961 115 343 179 5,494
Deductions from net assets:
Withdrawals by participants 167 94 52 566 7 14 57 957
Interfund transfers (51) 344 83 (593) (2) 158 61 -
---------------------------------------------------------------------------------------
Net increase 1,084 1,397 478 802 106 487 183 4,537
Net assets available for plan benefits:
Beginning of year 243 649 345 3,881 71 152 255 5,596
---------------------------------------------------------------------------------------
End of year $1,327 $2,046 $823 $4,683 $177 $639 $438 $10,133
=======================================================================================
See accompanying notes.
</TABLE>
<PAGE> F-5
Employees Savings Plan
Notes to Financial Statements
December 31, 1997
(Dollars in Thousands)
1. Significant Accounting Policies
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the
financial statements and the reported amounts of income and
expenses during the reporting period. Actual results could
differ from those estimates.
The accounting records of the Employees Savings Plan
("Plan") are maintained on the accrual basis. All
securities transactions are recorded as of the trade date.
Investments in Reynolds Metals Company Stock (stated at fair
value) are valued at the last reported sales price on the
last business day of the year. Investments in mutual funds
are measured by quoted market prices and are reported at
aggregate fair value at year-end. Guaranteed investment
contracts with insurance companies are reported at "contract
value", which equals cost plus accrued income. Structured
investment contracts are reported at fair value, which in
the case of structured investment contracts equals contract
value.
2. Summary of Significant Plan Provisions
Reynolds Metals Company ("the Company") established the Plan
effective January 1, 1990, covering all eligible employees
of the Company and designated subsidiaries (each an
"Employer") who elect to contribute. The Plan is a defined
contribution plan under the Employee Retirement Income
Security Act of 1974 ("ERISA") and qualifies as a "cash or
deferred" arrangement under Section 401(k) of the Internal
Revenue Code. A complete description of the Plan is
contained in the Summary Plan Description and in the Plan
document, copies of which are available from the Company.
Plan participation is available to eligible employees
on the later of (a) 30 days after beginning their employment
with an Employer, or (b) the date at which their Employer adopts
the Plan. Plan participation is voluntary.
<PAGE> F-6
Employees Savings Plan
Notes to Financial Statements (continued)
2. Summary of Significant Plan Provisions (continued)
A participant may elect to make payroll contributions to the
Plan in specified amounts ranging from 1% to 12% of
compensation in 1% increments. At certain locations, the
Employer will contribute to the Plan on behalf of each
participant a fixed percentage of a portion of the payroll
contributions made by the participant.
Eligible employees who receive a profit-sharing award,
gainsharing payment or other designated type of lump sum
payment are also allowed to contribute between 10% and 50%
of the award and/or payment (in 10% increments) to the Plan.
Such contributions are not matched by the Company or any other
Employer.
Participants may elect to make their contributions on a
before or after tax basis, or a combination thereof.
Employer contributions are made on a "pretax" basis. Highly
compensated participants may be required to reduce the
amount of "pretax" contributions made to or held by the Plan
on their behalf in order to permit the Plan to satisfy the
nondiscrimination requirements of Section 401(k) of the
Internal Revenue Code.
Participants are fully vested in their account balances.
Withdrawals and distributions are handled in accordance with
the Plan provisions and are subject to certain regulatory
restrictions. The trustee holds all of the Plan's
investment assets and executes transactions therein.
Although it has not expressed an intent to do so, the
Company has the right under the Plan document to discontinue
contributions at any time and to terminate the Plan subject
to the provisions of ERISA.
The Company is the Plan administrator and bears the related
costs, except for investment-related and trustee fees, which
are paid by the Plan.
<PAGE> F-7
Employees Savings Plan
Notes to Financial Statements (continued)
3. Commingled Master Trust Investments
All of the investments of the Plan as of December 31, 1997
and 1996 were held in a Master Trust under a Master Trust
Agreement between Reynolds Metals Company and The Northern
Trust Company, as trustee, and are commingled with the
assets of three other savings plans of the Company and one
of its subsidiaries. Net assets and net investment gains
from the Master Trust are allocated to participating plans
based on the aggregate account balances of individual
participants in each plan.
Substantially all the assets held in the Balanced Investment
Fund and the Diversified Equities Fund are invested in the
Vanguard STAR Fund and the Vanguard Institutional Index
Fund, respectively. These are no-load mutual funds held and
managed by the Vanguard Group of Investment Companies.
Substantially all of the assets held in the International
Equities Fund and the Small Capitalization Equities Fund are
invested in the T. Rowe Price Foreign Equity Fund and the T.
Rowe Price Small-Cap Value Fund, respectively. These are no-
load mutual funds held and managed by T. Rowe Price
Associates, Inc.
The assets of the Interest Income Fund generally are
invested in guaranteed investment contracts ("GICs") at a
fixed rate of return and structured investment contracts
("SICs") with various insurance companies and banks.
SICs represent high grade investments held in the name of
the Master Trust in conjunction with a corresponding contract
with the issuer of the SIC to provide a fixed or variable
rate of return (based on investment experience and reset
quarterly) on the cost of the investment. GICs and SICs
generally provide for the full repayment of principal and
interest. Upon the occurrence of certain events (including
layoffs by the Company or its applicable affiliates), however,
market value of the GIC or SIC, if lower than book value, may
be repaid (a "Market Value Adjustment"). Currently, in the
opinion of the Company, the likelihood of a material loss to
the Plan as a result of such a Market Value Adjustment is remote.
The annual rate of return on these contracts during 1997 and
1996 was 6.3% and 6.3%, respectively. The current yield on
these contracts at December 31, 1997 was 6.3% (6.4% at
December 31, 1996). Interest is credited to participants'
accounts on the dollar-weighted average (blended rate)
basis. The fair value of the Plan's GICs approximates
contract value.
No individual SIC or GIC exceeded 5% of the Master Trust's
assets, except for a SIC with Transamerica Life with a
balance of approximately $39,000 at December 31, 1997.
Cash and cash equivalents of the Master Trust are invested
in a short-term investment fund managed by The Northern
Trust Company.
<PAGE> F-8
Employees Savings Plan
Notes to Financial Statements (continued)
3. Commingled Master Trust Investments (continued)
During 1997 and 1996, certain assets of the Plan were transferred
into other plans and from other plans of the Company as a result
of employee transfers. There was no effect on any participant's
accounts as a result of the transfer.
Summarized financial fund information of the commingled accounts
within the Master Trust is presented below:
<TABLE>
<CAPTION>
Small
Inter- Capita-
Reynolds Diversified Balanced Interest national lization
Stock Equities Investment Income Equities Equities Loan
Fund Fund Fund Fund Fund Fund Fund Total
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MASTER TRUST NET ASSETS-1997
Assets
Accrued Income $ 1,082 $ 1,082
Cash and cash equivalents 2,247 $ 47 $ 11 $ 40,726 $ 6 $ 25 43,062
Contributions receivable 598 195 215 671 79 56 $ 13 1,827
Investments:
Common stock 189,068 - - - - - - 189,068
Investment contracts - - - 195,952 - - - 195,952
Mutual funds - 131,723 46,727 - 10,219 34,639 - 223,308
Loans to participants - - - - - - 19,962 19,962
---------------------------------------------------------------------------------------
Master Trust net assets $192,995 $131,965 $46,953 $237,349 $10,304 $34,720 $19,975 $674,261
=======================================================================================
Portion of Master Trust
allocable to the Plan $ 1,327 $ 2,046 $ 823 $ 4,683 $ 177 $ 639 $ 438 $ 10,133
Percent 1% 2% 2% 2% 2% 2% 2% 2%
</TABLE>
<PAGE> F-9
<TABLE>
Employees Savings Plan
Notes to Financial Statements (continued)
3. Commingled Master Trust Investments (continued)
<CAPTION>
Small
Inter- Capita-
Reynolds Diversified Balanced Interest national lization
Stock Equities Investment Income Equities Equities Loan
Fund Fund Fund Fund Fund Fund Fund Total
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MASTER TRUST NET ASSETS-1996
Assets
Accrued Income $ 997 $ 997
Cash and cash equivalents 2,213 $ 48 $ 3 $ 17,070 $ 4 $ 3 19,341
Contributions receivable 259 209 183 143 56 166 1,016
Investments:
Common stock 160,346 - - - - - 160,346
Investment contracts - - - 220,145 - - 220,145
Mutual funds - 88,863 36,576 - 8,640 19,993 154,072
Loans to participants - - - - - - $19,326 19,326
---------------------------------------------------------------------------------------
Total assets 163,815 89,120 36,762 237,358 8,700 20,162 19,326 575,243
Liabilities
Accounts payable 1 - - 12 - - - 13
---------------------------------------------------------------------------------------
Master Trust net assets $163,814 $89,120 $36,762 $237,346 $8,700 $20,162 $19,326 $575,230
=======================================================================================
Portion of Master Trust
allocable to the Plan $ 243 $ 649 $ 345 $ 3,881 $ 71 $ 152 $ 255 $ 5,596
Percent 1% 1% 1% 2% 1% 1% 1% 1%
</TABLE>
<PAGE> F-10
<TABLE>
Employees Savings Plan
Notes to Financial Statements (continued)
3. Commingled Master Trust Investments (continued)
<CAPTION>
Small
Inter- Capita-
Reynolds Diversified Balanced Interest national lization
Stock Equities Investment Income Equities Equities Loan
Fund Fund Fund Fund Fund Fund Fund Total
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CHANGES IN MASTER TRUST
ASSETS - 1997
Additions:
Contributions from plans $ 11,682 $ 13,182 $5,775 $ 28,736 $ 2,090 $ 4,979 $ 66,444
Net realized and unrealized
appreciation (depreciation)
of investments 9,977 29,085 6,564 - 109 6,267 52,002
Interest and dividends 4,107 1,976 1,427 15,552 135 549 $ 1,707 25,453
Assets transferred into
Master Trust 11,809 - - - - - 25 11,834
---------------------------------------------------------------------------------------
37,575 44,243 13,766 44,288 2,334 11,795 1,732 155,733
---------------------------------------------------------------------------------------
Deductions:
Distributions to plans 19,011 7,595 2,787 23,616 800 1,623 1,270 56,702
Administrative expenses - - - - - - - -
---------------------------------------------------------------------------------------
19,011 7,595 2,787 23,616 800 1,623 1,270 56,702
Interfund transfers-net 10,617 6,197 (788) (20,669) 70 4,386 187 -
---------------------------------------------------------------------------------------
Net additions 29,181 42,845 10,191 3 1,604 14,558 649 99,031
Master Trust net assets at
beginning of period 163,814 89,120 36,762 237,346 8,700 20,162 19,326 575,230
---------------------------------------------------------------------------------------
Master Trust net assets at end
of period $192,995 $131,965 $46,953 $237,349 $10,304 $34,720 $19,975 $674,261
=======================================================================================
</TABLE>
<PAGE> F-11
Employees Savings Plan
Notes to Financial Statements (continued)
4. Differences Between Financial Statements and Form 5500
The following is a reconciliation of net assets available
for benefits per the financial statements to the Form 5500:
<TABLE>
<CAPTION>
December 31,
1997 1996
-------------------
<S> <C> <C>
Net assets available for benefits per
the financial statements $10,133 $5,596
Amounts allocated to withdrawn
participants 13 11
-------------------
Net assets available for benefits per
the Form 5500 $10,120 $5,585
===================
</TABLE>
The following is a reconciliation of benefits paid to
participants per the financial statements to the Form 5500:
Year ended
December 31,
1997
---------------
Benefits paid to participants per the
financial statements $957
Add: Amounts allocated on Form 5500 to
withdrawn participants in the current year 13
Less: Amounts allocated on Form 5500 to
withdrawn participants in the prior year (11)
---------------
Benefits paid to participants per the Form
5500 $959
===============
5. Income Taxes
The Internal Revenue Service has determined that the Plan
qualifies under Section 401(a) of the Internal Revenue Code
(the "Code"). As long as the Plan continues to be
qualified, under present Federal income tax laws and
regulations participants will not be taxed on employer
contributions or investment earnings allocated to their
account. Participants will normally be subject to tax
thereon at such time as they receive distributions from the
Plan. As long as the Plan continues to be qualified, the
Plan will not be taxed on its dividend and interest income
or on any capital gains realized by it or any unrealized
appreciation of investments.
<PAGE>
INDEX TO EXHIBITS
Exhibit A Consent of Independent Auditors
<PAGE>
EXHIBIT A
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8 No. 33-53847) pertaining to the Employees
Savings Plan and in the related Prospectus of our report dated
June 19, 1998, with respect to the financial statements of the
Employees Savings Plan included in this Annual Report (Form 11-K)
for the year ended December 31, 1997.
/s/ ERNST & YOUNG LLP
Richmond, Virginia
June 19, 1998
