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, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 001-01430
A. Full title of the plan:
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 Ernst & Young LLP, Independent Auditors..... F-1
Audited Financial Statements
Statements of Net Assets Available for
Plan Benefits...................................... F-2
Statement of Changes in Net Assets Available
for Plan Benefits.................................. F-3
Notes to Financial Statements........................ F-4
EXHIBITS
Exhibit A Consent of Ernst & Young LLP, Independent Auditors
- 2 -
<PAGE> 3
SIGNATURES
The Plan. Pursuant to the requirements of the Securities
Exchange Act of 1934, the Plan Committee for Hourly Savings Plan
has duly caused this annual report to be signed on behalf of the
Plan by the undersigned hereunto duly authorized.
DATE: June 27, 2000 REYNOLDS METALS COMPANY
SAVINGS PLAN FOR HOURLY EMPLOYEES
By: Plan Committee for Hourly
Savings Plan
By: RICHARD B. KELSON
--------------------------------
Richard B. Kelson, Member
By: ROBERT F. SLAGLE
--------------------------------
Robert F. Slagle, Member
By: WILLIAM J. O'ROURKE, JR.
--------------------------------
William J. O'Rourke, Jr., Member
- 3 -
<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, 1999 and
1998, and the related statement of changes in net assets
available for plan benefits for the year ended December 31, 1999.
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 auditing standards
generally accepted in the United States. 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, 1999 and
1998, and the changes in its net assets available for plan
benefits for the year ended December 31, 1999, in conformity with
accounting principles generally accepted in the United States.
Richmond, Virginia
June 9, 2000
F-1
<PAGE> F-2
Reynolds Metals Company
Savings Plan for Hourly Employees
Statements of Net Assets Available for Plan Benefits
(Dollars in Thousands)
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------
1999 1998
-------------------------------
<S> <C> <C>
ASSETS
Investment in Master Trust $179,755 $215,363
Accrued income 28 44
Contributions receivable 383 698
-------------------------------
Total assets 180,166 216,105
LIABILITIES
Accrued expenses - 189
-------------------------------
Net assets available for plan
benefits $180,166 $215,916
See accompanying notes.
</TABLE>
F-2
<PAGE> F-3
Reynolds Metals Company
Savings Plan for Hourly Employees
Statement of Changes in Net Assets Available for Plan
Benefits
Year ended December 31, 1999
(Dollars in Thousands)
<TABLE>
<CAPTION>
<S> <C>
Additions to net assets:
Net investment gain from Master Trust $ 20,982
Contributions:
Employer 10,991
Employee 13,076
-------------
24,067
-------------
Total Additions 45,049
Deductions from net assets:
Withdrawals by participants 79,879
Assets transferred to other plans 920
-------------
Total Deductions 80,799
-------------
Net decrease (35,750)
Net assets available for plan benefits:
Beginning of year 215,916
-------------
End of year $180,166
=============
See accompanying notes.
</TABLE>
F-3
<PAGE> F-4
Reynolds Metals Company
Savings Plan for Hourly Employees
Notes to Financial Statements
(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 such contracts equals contract value.
Participant loans are valued at their outstanding balances,
which approximates fair value.
Certain amounts in the 1998 financial statements have been
reclassified to conform to the 1999 presentation.
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.
F-4
<PAGE> F-5
Reynolds Metals Company
Savings Plan for Hourly Employees
Notes to Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT PLAN PROVISIONS (CONTINUED)
Hourly employees who are in a bargaining unit covered by a
collective bargaining agreement that incorporates the Plan
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.
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.
Upon enrollment, a participant may direct contributions to
any of the Plan's fund options.
F-5
<PAGE> F-6
Reynolds Metals Company
Savings Plan for Hourly Employees
Notes to Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT PLAN PROVISIONS (CONTINUED)
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.
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, 1999
and 1998 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
(losses) from the Master Trust are allocated to
participating plans based on the aggregate account balances
of individual participants in each plan. Non-participant
directed investments of the Master Trust represent employer
contributions provided by another savings plan of the Master
Trust.
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 a diversified portfolio of 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
F-6
<PAGE> F-7
Reynolds Metals Company
Savings Plan for Hourly Employees
Notes to Financial Statements (continued)
3. COMMINGLED MASTER TRUST INVESTMENTS (CONTINUED)
remote. The annual rate of return on these contracts during
1999 was approximately 6.2%. The current yield on these
contracts at December 31, 1999 was 6.3% (6.3% at December
31, 1998). 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.
Cash and cash equivalents of the Master Trust are invested
in a short-term investment fund managed by The Northern
Trust Company.
During 1999 and 1998, 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 information of the commingled accounts
within the Master Trust is presented below:
<TABLE>
<CAPTION>
NON-
PARTICIPANT PARTICIPANT
DIRECTED DIRECTED TOTAL
------------------------------------------
<S> <C> <C> <C>
MASTER TRUST NET ASSETS-
1999
ASSETS
Accrued income $ 386 $ 505 $ 891
Cash and cash
equivalents 38,624 1,456 40,080
Contributions
receivable 395 - 395
Investments at quoted
fair value:
Mutual funds 258,980 - 258,980
Common stock 81,598 107,293 188,891
Investments at contract
value:
Investment contracts 143,770 - 143,770
Investments at
estimated fair value:
Loans to participants 15,382 - 15,382
-----------------------------------------
Total assets 539,135 109,254 648,389
Interfund receivable
(payable)-net 20 (20) -
-----------------------------------------
Master Trust net assets $539,155 $109,234 $648,389
=========================================
Portion of Master Trust
allocable to the Plan $180,166 $ - $180,166
Percent 33% -% 27%
</TABLE>
F-7
<PAGE> F-8
Reynolds Metals Company
Savings Plan for Hourly Employees
Notes to Financial Statements (continued)
3. COMMINGLED MASTER TRUST INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
NON-
PARTICIPANT PARTICIPANT
DIRECTED DIRECTED TOTAL
-------------------------------------------
<S> <C> <C> <C>
MASTER TRUST NET ASSETS-
1998
ASSETS
Accrued income $ 286 $ 568 $ 854
Cash and cash
equivalents 60,962 1,342 62,304
Contributions
receivable 1,651 473 2,124
Investments at
quoted fair value:
Mutual funds 250,975 - 250,975
Common stock 67,151 85,342 152,493
Investments at
contract value:
Investment contracts 168,462 - 168,462
Investments at
estimated fair value:
Loans to participants 16,812 - 16,812
-------------------------------------------
Total assets 566,299 87,725 654,024
LIABILITIES
Accrued expenses 326 - 326
-------------------------------------------
Master Trust net assets $565,973 $87,725 $653,698
===========================================
Portion of Master Trust
allocable to the Plan $215,916 $ - $215,916
Percent 38% -% 33%
</TABLE>
F-8
<PAGE> F-9
REYNOLDS METALS COMPANY
SAVINGS PLAN FOR HOURLY EMPLOYEES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. COMMINGLED MASTER TRUST INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
NON-
PARTICIPANT PARTICIPANT
DIRECTED DIRECTED TOTAL
------------------------------------------
<S> <C> <C> <C>
NET INVESTMENT GAIN FROM
MASTER TRUST-1999
Net realized and
unrealized appreciation
of investments at quoted
fair value:
Mutual funds $35,879 $ - $ 35,879
Common stock 29,959 35,176 65,135
Interest and dividends 18,799 2,091 20,890
------------------------------------------
$84,637 $37,267 $121,904
==========================================
</TABLE>
4. INCOME TAX STATUS
The Plan has received a determination letter from the Internal
Revenue Service dated February 20, 1996, stating that the Plan is
qualified under Section 401(a) of the Internal Revenue Code (the
"Code") and, therefore, the related trust is exempt from
taxation. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The
Company has indicated that it will take the necessary steps, if
any, to maintain the Plan's qualified status.
5. SUBSEQUENT EVENT
On May 3, 2000, the Company became a wholly owned subsidiary of
Alcoa Inc. ("Alcoa") in accordance with the terms of a merger
agreement between the two companies. On the effective date of
the merger, each outstanding share of Company common stock was
converted into 1.06 shares of Alcoa common stock. Company common
stock held under the Plan was so converted and participant
accounts adjusted accordingly. Due to this conversion, the Plan
was amended so that the Reynolds Stock Fund was changed to the
Alcoa Stock Fund which will invest in Alcoa common stock;
otherwise, the fund will continue to operate as it did before the
merger. The Company will continue to act as the Plan
administrator.
F-9
<PAGE>
INDEX TO EXHIBITS
Exhibit A Consent of Ernst & Young LLP, Independent Auditors
<PAGE>
EXHIBIT A
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8 No. 333-36214) pertaining to the Reynolds
Metals Company Savings Plan for Hourly Employees and in the
related Prospectus of our report dated June 9, 2000, 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, 1999.
ERNST & YOUNG LLP
Richmond, Virginia
June 22, 2000
