SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
December 31, 1998
REYNOLDS METALS COMPANY
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(Exact name of Registrant as specified in its charter)
Delaware 001-01430 54-0355135
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification Number)
6601 West Broad Street
P.O. Box 27003
Richmond, Virginia 23261-7003
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(Address of Principal Executive Offices,
including zip code)
(804) 281-2000
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(Registrant's Telephone Number, including area code)
<PAGE> 2
Item 5. OTHER EVENTS
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A pro forma statement of income (unaudited) for the year
ended December 31, 1998 in connection with the disposition of the
Registrant's North American aluminum beverage can operations on
August 10, 1998 is presented at Exhibit 99 of this report.
As previously reported, on August 10, 1998, the Registrant
completed the sale of its North American aluminum beverage can
operations to Ball Corporation for $746 million in cash.
The disposition was made pursuant to the Asset Purchase Agreement,
dated as of April 22, 1998, by and among Ball, Ball Metal Beverage
Container Corp. and the Registrant. The purchase price was
determined by arms-length negotiation between the Registrant and
Ball. The Registrant realized an after-tax gain of $200 million
on the sale.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
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c) Exhibits.
Exhibit 99 - Pro Forma Statement of Income (Unaudited)
for the year ended December 31, 1998
2
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
REYNOLDS METALS COMPANY
By: ALLEN M. EAREHART
------------------------
Allen M. Earehart
Senior Vice President and Controller
Dated: October 20, 1999
3
EXHIBIT 99
Page 1
<TABLE>
PRO FORMA STATEMENT OF INCOME (UNAUDITED) (millions, except per share amounts)
===============================================================================
<CAPTION>
Less:
North
American Pro
Reynolds Can Forma
Metals Operations Adjust-
For the year ended December 31, 1998 Company (A) ments Pro Forma
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES $ 5,859 $772 $ - $ 5,087
COSTS AND EXPENSES
Cost of products sold 4,774 677 - 4,097
Selling, administrative and
general expenses 378 11 - 367
Depreciation and amortization 252 - - 252
Interest 114 - (42)(B) 72
Operational restructuring
effects - net 144 - 336 (C) 480
- -------------------------------------------------------------------------------
5,662 688 294 5,268
- -------------------------------------------------------------------------------
EARNINGS
Income before extraordinary
loss and cumulative effect
of accounting change 197 84 (294) (181)
Taxes on income (credit) 45 32 (112)(D) (99)
- -------------------------------------------------------------------------------
INCOME BEFORE EXTRAORDINARY LOSS
AND CUMULATIVE EFFECT OF
ACCOUNTING CHANGE $ 152 $ 52 $(182) $ (82)
===============================================================================
EARNINGS PER SHARE (E)
Basic:
Average shares outstanding 69,709,000 - - 66,019,000
Income before extraordinary
loss and cumulative effect
of accounting change $2.18 - - $(1.24)
===============================================================================
Diluted:
Average shares outstanding 69,937,000 - - 66,019,000
Income before extraordinary
loss and cumulative effect
of accounting change $2.18 - - $(1.24)
===============================================================================
The accompanying notes to unaudited pro forma financial information
are an integral part of these statements.
</TABLE>
<PAGE>
EXHIBIT 99
Page 2
REYNOLDS METALS COMPANY AND CONSOLIDATED SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1998
The following unaudited pro forma financial information should be
read in conjunction with the consolidated financial statements
and related footnotes included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1998. The following
pro forma information is presented for illustrative purposes only
and is not necessarily indicative of future operating results or
financial position.
BASIS OF PRESENTATION
The unaudited pro forma income statement for the year ended
December 31, 1998, presents the consolidated results of
operations of the Company assuming that the disposition of the
Company's North American Can Operations had occurred as of
January 1, 1998. The Operations consisted of 14 can plants, two
end plants and a headquarters building. This transaction is
already reflected in the balance sheet in the Company's Annual
Report on Form 10-K for the year ended December 31, 1998.
PRO FORMA ADJUSTMENTS
The following notes describe the adjustments found on the
accompanying pro forma statement of income:
(A) The amounts included in the North American Can Operations'
column on the income statement reflects the direct activity
of the Operations from January 1, 1998 through August 10,
1998, the date of their disposition. Depreciation expense
was not included in the Operations' expenses for the year
1998. In 1998, the Operations were accounted for as an
asset held for sale and, as required by current accounting
rules, depreciation was stopped. Pretax income has been tax
effected at the Company's statutory rate (38%).
(B) This pro forma adjustment represents the estimated reduction
in interest expense as a result of long-term debt being reduced
by $470 million. Interest expense was calculated using the
weighted average interest rate (approximately 9%) on the long-
term debt expected to be extinguished.
(C) This pro forma adjustment eliminates the gain realized on
the disposition.
(D) Pretax income has been tax effected at the Company's
statutory rate (38%).
(E) The shares used for pro forma earnings per share reflect
$208 million of proceeds being used to repurchase
approximately 3,690,000 shares of the Company's common
stock.
