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): January 19, 2000
REYNOLDS METALS COMPANY
-----------------------
(Exact name of Registrant as specified in its charter)
Delaware 001-01430 54-0355135
-------- --------- ----------
(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
- ---------------------------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
(804) 281-2000
--------------
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
<PAGE> 2
ITEM 5. OTHER EVENTS
The Registrant issued the following press release on January 19, 2000:
NEWS FROM:
REYNOLDS METALS COMPANY
Richmond, VA 23261
CONTACT: Lou Anne J. Nabhan
Telephone: (804) 281-2171
http://www.rmc.com
FOR IMMEDIATE RELEASE
January 19, 2000
REYNOLDS METALS REPORTS FOURTH-QUARTER AND YEAR-END RESULTS
RICHMOND, Va. -- Reynolds Metals Company (NYSE: RLM) today reported net
income for the fourth quarter of 1999 of $63 million, or 99 cents per diluted
share, compared with a net loss for the fourth quarter of 1998 of $45 million,
or 71 cents per share. Net results for the fourth quarter of 1998 included
operational restructuring effects of $95 million, or $1.47 per share. (Please
see the following table "Reconciliation of Net Income to Net Income from
Operations.")
Net results for the fourth quarter of 1999 included after-tax merger
expenses of $7 million, or 10 cents per diluted share. Excluding the effects
of these expenses and of the operational restructuring effects reflected in the
1998 results, net income from operations for the fourth quarter of 1999 was $70
million, or $1.09 per diluted share, versus $50 million, or 76 cents per share,
for the 1998 period. (Please see the following table "Reconciliation of Net
Income to Net Income from Operations.")
Revenues for the 1999 fourth quarter totaled $1.36 billion, compared to
$1.38 billion in the fourth quarter of 1998. Aluminum shipments totaled
344,000 metric tons, compared to 378,000 metric tons in the 1998 fourth
quarter. Excluding the effects of operations that have been sold, revenues and
shipments were up 16% and 17%, respectively.
"Improved pricing, volume and mix, and lower conversion costs,
particularly in our Base Materials business unit, had a favorable impact on our
fourth quarter results," said Jeremiah J. Sheehan, chairman and chief executive
officer. "Our distribution operations benefited from the positive contribution
of recent acquisitions, as well as other volume growth and continued cost
reduction. Our Packaging and Consumer unit realized higher shipments and
revenues, but results were unfavorably affected by higher material and other
costs," said Mr. Sheehan.
"As we enter 2000, we believe our results for the year 1999 demonstrate
the benefits of our Portfolio Review, which included restructuring, reducing
interest and SG&A expenses, and share repurchases. Our results also reflect
the benefit of our ongoing cost reduction, and aggressive management of
inventory and capital spending," said Mr. Sheehan.
<PAGE>
For the year 1999, net income was $124 million, or $1.94 per diluted
share, compared with $66 million, or 94 cents per share, for 1998. Net
results for 1998 included an after-tax restructuring charge of $90 million, or
$1.29 per share; an extraordinary loss on debt extinguishment of $63 million,
or 91 cents per share; and the cumulative effect of an accounting change in the
first quarter that resulted in a charge of $23 million, or 33 cents per share.
(Please see the following table "Reconciliation of Net Income to Net Income
from Operations.")
Net results for 1999 included after-tax merger expenses of $16 million,
or 25 cents per diluted share. Excluding the effects of these expenses and
of the three special items that affected 1998 results, net income from
operations for 1999 was $140 million, or $2.19 per diluted share, versus $242
million, or $3.47 per share, for the 1998 period. (Please see the following
table "Reconciliation of Net Income to Net Income from Operations.")
Revenues for 1999 were $4.8 billion compared to $5.86 billion for 1998.
Aluminum shipments were 1,353,000 metric tons in 1999, compared to 1,484,000
metric tons in 1998. Excluding the effects of sold operations, 1999 revenues
and shipments were up 9% and 24%, respectively.
Following is a tabulation of the company's results:
<TABLE>
RECONCILIATION OF NET INCOME TO NET INCOME FROM OPERATIONS
(In millions, except diluted EPS)
<CAPTION>
==============================================================================
4th Qtr 1999 4th Qtr 1998 YTD 1999 YTD 1998
Description Amt EPS Amt EPS Amt EPS Amt EPS
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net income (loss) $63 $ .99 $(45) $(0.71) $124 $1.94 $ 66 $0.94
Less:
Merger-related
expenses (7) (0.10) - - (16) (0.25) - -
Operational
restructuring
effects - net - - (95) (1.47) - - (90) (1.29)
Extraordinary
loss on debt
extinguishment - - - - - - (63) (0.91)
Cumulative
effect of
accounting
change -
preoperating
cost write-off - - - - - - (23) (0.33)
- ------------------------------------------------------------------------------
Net Income from
operations $70 $1.09 $ 50 $0.76 $140 $2.19 $242 $3.47
==============================================================================
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(In millions, except share data)
<CAPTION>
==============================================================================
Quarters ended Years ended
December 31 December 31
- ------------------------------------------------------------------------------
1999 1998 1999 1998
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES $1,358 $1,380 $4,796 $5,859
COSTS AND EXPENSES
Cost of products sold 1,072 1,139 3,928 4,774
Selling, general and
administrative expenses 107 96 361 378
Depreciation and
amortization 63 59 242 252
Interest 18 20 75 114
Merger-related expenses 7 - 19 -
Operational restructuring
effects - 155 - 144
- ------------------------------------------------------------------------------
1,267 1,469 4,625 5,662
- ------------------------------------------------------------------------------
EARNINGS
Income (loss) before
income taxes,
extraordinary loss
and cumulative effect of
accounting change 91 (89) 171 197
Taxes on income (credit) 28 (44) 47 45
- ------------------------------------------------------------------------------
Income (loss) before
extraordinary loss and
cumulative effect of
accounting change 63 (45) 124 152
Extraordinary loss - - - (63)
Cumulative effect of
accounting change - - - (23)
- ------------------------------------------------------------------------------
NET INCOME (LOSS) $ 63 $ (45) $ 124 $ 66
==============================================================================
EARNINGS PER SHARE
Basic:
Average shares
outstanding 63,303,000 64,472,000 63,739,000 69,709,000
Income (loss) before
extraordinary loss
and cumulative effect
of accounting change $1.00 $(0.71) $1.95 $2.18
Extraordinary loss - - - (0.91)
Cumulative effect of
accounting change - - - (0.33)
- ------------------------------------------------------------------------------
Net income (loss) $1.00 $(0.71) $1.95 $0.94
==============================================================================
Diluted:
Average shares
outstanding 63,836,000 64,472,000 64,043,000 69,937,000
Income (loss) before
extraordinary loss
and cumulative effect
of accounting change $0.99 $(0.71) $1.94 $2.18
Extraordinary loss - - - (0.91)
Cumulative effect of
accounting change - - - (0.33)
- ------------------------------------------------------------------------------
Net income (loss) $0.99 $(0.71) $1.94 $0.94
==============================================================================
CASH DIVIDENDS PER
COMMON SHARE $0.35 $ 0.35 $1.40 $1.40
==============================================================================
Average realized price
per pound
Primary aluminum $0.75 $ 0.69 $0.69 $0.72
Fabricated aluminum
products $1.95 $ 1.66 $1.92 $1.87
</TABLE>
<TABLE>
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
(In millions, except share data)
==============================================================================
<CAPTION>
December 31
- ------------------------------------------------------------------------------
1999 1998
- ------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 55 $ 94
Receivables, less allowances of $10 (1998 - $14) 654 894
Inventories 519 500
Prepaid expenses and other 61 114
- ------------------------------------------------------------------------------
Total current assets 1,289 1,602
Unincorporated joint ventures and associated companies 1,692 1,478
Property, plant and equipment 4,336 4,282
Less allowances for depreciation and amortization 2,320 2,258
- ------------------------------------------------------------------------------
2,016 2,024
Deferred taxes and other assets 953 1,030
- ------------------------------------------------------------------------------
Total assets $5,950 $6,134
==============================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, accrued and other liabilities $ 819 $ 929
Short-term borrowings 180 116
Long-term debt 153 196
- ------------------------------------------------------------------------------
Total current liabilities 1,152 1,241
Long-term debt 1,067 1,035
Postretirement benefits 962 1,029
Environmental, deferred taxes and other liabilities 623 635
Stockholders' equity:
Common stock 1,575 1,533
Retained earnings 1,257 1,222
Treasury stock, at cost (626) (526)
Accumulated other comprehensive income (60) (35)
- ------------------------------------------------------------------------------
Total stockholders' equity 2,146 2,194
- ------------------------------------------------------------------------------
Contingent liabilities
Total liabilities and stockholders' equity $5,950 $6,134
==============================================================================
Common shares outstanding 63,483,000 64,457,000
</TABLE>
<PAGE>
<TABLE>
COMPANY OPERATIONS (Shipments in thousands of metric tons, dollars in millions)
<CAPTION>
Packaging Construction
Base and and
Materials Consumer Distribution
- ------------------------------------------------------------------------------
Quarters ended Dec. 31 1999 1998 1999 1998 1999 1998
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Aluminum shipments:
Customer 214 183 45 40 51 44
Intersegment 55 79 - - - -
- ------------------------------------------------------------------------------
Total aluminum shipments 269 262 45 40 51 44
==============================================================================
Revenues:
Aluminum $ 352 $ 277 $ 234 $ 216 $ 174 $ 170
Nonaluminum 111 88 194 175 109 72
Intersegment - aluminum 81 127 - - - -
- ------------------------------------------------------------------------------
Total revenues $ 544 $ 492 $ 428 $ 391 $ 283 $ 242
==============================================================================
Segment operating
income (loss) $ 103 $ 51 $ 56 $ 60 $ 10 $ 10
Inventory accounting
adjustments
Corporate amounts
Operational restructuring
effects - net
Merger-related expenses
- ------------------------------------------------------------------------------
Corporate operating
income (loss)
Interest expense
Taxes on income
Extraordinary loss
- ------------------------------------------------------------------------------
Net Income (Loss)
==============================================================================
</TABLE>
<TABLE>
COMPANY OPERATIONS (Shipments in thousands of metric tons, dollars in millions)
<CAPTION>
Transportation Restructuring Other
- ------------------------------------------------------------------------------
Quarters ended Dec. 31 1999 1998 1999 1998 1999 1998
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Aluminum shipments:
Customer 19 17 - 84 15 10
Intersegment - - - - - -
- ------------------------------------------------------------------------------
Total aluminum shipments 19 17 - 84 15 10
==============================================================================
Revenues:
Aluminum $109 $ 94 $ - $ 198 $ 46 $ 36
Nonaluminum - - - 7 19 25
Intersegment - aluminum - - - - - -
- ------------------------------------------------------------------------------
Total revenues $109 $ 94 $ - $ 205 $ 65 $ 61
==============================================================================
Segment operating
income (loss) $ (5) $ (5) $ - $ 13 $ (2) $ (1)
Inventory accounting
adjustments
Corporate amounts
Operational restructuring
effects - net
Merger-related expenses
- ------------------------------------------------------------------------------
Corporate operating
income (loss)
Interest expense
Taxes on income
Extraordinary loss
- ------------------------------------------------------------------------------
Net Income (Loss)
==============================================================================
</TABLE>
<TABLE>
COMPANY OPERATIONS (Shipments in thousands of metric tons, dollars in millions)
<CAPTION>
Reconciling
Items Consolidated
- -------------------------------------------------------------
Quarters ended Dec. 31 1999 1998 1999 1998
- -------------------------------------------------------------
<S> <C> <C> <C> <C>
Aluminum shipments:
Customer - - 344 378
Intersegment ( 55) ( 79) - -
- -------------------------------------------------------------
Total aluminum shipments ( 55) ( 79) 344 378
=============================================================
Revenues:
Aluminum $ - $ - $ 915 $ 991
Nonaluminum 10 22 443 389
Intersegment - aluminum ( 81) (127) - -
- -------------------------------------------------------------
Total revenues $( 71) $(105) $1,358 $1,380
=============================================================
Segment operating
income (loss) $ - $ - $ 162 $ 128
Inventory accounting
adjustments (2) -
Corporate amounts ( 44) ( 42)
Operational restructuring
effects - net - (155)
Merger-related expenses ( 7) -
- -------------------------------------------------------------
Corporate operating
income (loss) 109 (69)
Interest expense (18) (20)
Taxes on income (28) (44)
Extraordinary loss - -
- -------------------------------------------------------------
Net Income (Loss) $ 63 $ (45)
=============================================================
</TABLE>
<PAGE>
<TABLE>
COMPANY OPERATIONS (Shipments in thousands of metric tons, dollars in millions)
<CAPTION>
Packaging Construction
Base and and
Materials Consumer Distribution
- ------------------------------------------------------------------------------
Year ended December 31 1999 1998 1999 1998 1999 1998
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Aluminum shipments:
Customer 867 668 152 141 202 184
Intersegment 211 354 - - - -
- ------------------------------------------------------------------------------
Total aluminum shipments 1,078 1,022 152 141 202 184
==============================================================================
Revenues:
Aluminum $1,325 $1,055 $ 817 $ 787 $ 679 $ 681
Nonaluminum 368 402 632 605 346 314
Intersegment - aluminum 306 572 - - - -
- ------------------------------------------------------------------------------
Total revenues $1,999 $2,029 $1,449 $1,392 $1,025 $ 995
==============================================================================
Segment operating
income (loss) $ 250 $ 290 $ 159 $ 156 $ 42 $ 39
Inventory accounting
adjustments
Corporate amounts
Operational restructuring
effects - net
Merger-related expenses
- ------------------------------------------------------------------------------
Corporate operating
income (loss)
Interest expense
Taxes on income
Extraordinary loss
Cumulative effect of
accounting change
- ------------------------------------------------------------------------------
Net Income (Loss)
==============================================================================
</TABLE>
<TABLE>
COMPANY OPERATIONS (Shipments in thousands of metric tons, dollars in millions)
<CAPTION>
Transportation Restructuring Other
- ------------------------------------------------------------------------------
Year ended December 31 1999 1998 1999 1998 1999 1998
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Aluminum shipments:
Customer 73 63 - 391 59 37
Intersegment - - - 4 - -
- ------------------------------------------------------------------------------
Total aluminum shipments 73 63 - 395 59 37
==============================================================================
Revenues:
Aluminum $398 $336 $ - $1,434 $145 $117
Nonaluminum - - - 17 42 47
Intersegment - aluminum - - - 12 - -
- ------------------------------------------------------------------------------
Total revenues $398 $336 $ - $1,463 $187 $164
==============================================================================
Segment operating
income (loss) $(28) $(19) $ - $ 124 $ 5 $ -
Inventory accounting
adjustments
Corporate amounts
Operational restructuring
effects - net
Merger-related expenses
- ------------------------------------------------------------------------------
Corporate operating
income (loss)
Interest expense
Taxes on income
Extraordinary loss
Cumulative effect of
accounting change
- ------------------------------------------------------------------------------
Net Income (Loss)
==============================================================================
</TABLE>
<TABLE>
COMPANY OPERATIONS (Shipments in thousands of metric tons, dollars in millions)
<CAPTION>
Reconciling
Items Consolidated
- -------------------------------------------------------------
Year ended December 31 1999 1998 1999 1998
- -------------------------------------------------------------
<S> <C> <C> <C> <C>
Aluminum shipments:
Customer - - 1,353 1,484
Intersegment (211) (358) - -
- -------------------------------------------------------------
Total aluminum shipments (211) (358) 1,353 1,484
=============================================================
Revenues:
Aluminum $ - $ - $3,364 $4,410
Nonaluminum 44 64 1,432 1,449
Intersegment - aluminum (306) (584) - -
- -------------------------------------------------------------
Total revenues $(262) $(520) $4,796 $5,859
=============================================================
Segment operating
income (loss) $ - $ - $ 428 $ 590
Inventory accounting
adjustments (4) 5
Corporate amounts (159) (140)
Operational restructuring
effects - net - (144)
Merger-related expenses (19) -
- -------------------------------------------------------------
Corporate operating
income (loss) 246 311
Interest expense (75) (114)
Taxes on income (47) (45)
Extraordinary loss - (63)
Cumulative effect of
accounting change - (23)
- -------------------------------------------------------------
Net Income (Loss) $ 124 $ 66
=============================================================
</TABLE>
<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: January 19, 2000
