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) 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. 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: RECONCILIATION OF NET INCOME TO NET INCOME FROM OPERATIONS (In millions, except diluted EPS) ============================================================================== 4th Qtr 1999 4th Qtr 1998 YTD 1999 YTD 1998 Description Amt EPS Amt EPS Amt EPS Amt EPS - ------------------------------------------------------------------------------ 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 ============================================================================== CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) (In millions, except share data) ============================================================================== Quarters ended Years ended December 31 December 31 - ------------------------------------------------------------------------------ 1999 1998 1999 1998 - ------------------------------------------------------------------------------ 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 CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) (In millions, except share data) ============================================================================== December 31 - ------------------------------------------------------------------------------ 1999 1998 - ------------------------------------------------------------------------------ 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 COMPANY OPERATIONS (Shipments in thousands of metric tons, dollars in millions) Packaging Construction Base and and Materials Consumer Distribution - ------------------------------------------------------------------------------ Quarters ended Dec. 31 1999 1998 1999 1998 1999 1998 - ------------------------------------------------------------------------------ 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) ============================================================================== COMPANY OPERATIONS (Shipments in thousands of metric tons, dollars in millions) Transportation Restructuring Other - ------------------------------------------------------------------------------ Quarters ended Dec. 31 1999 1998 1999 1998 1999 1998 - ------------------------------------------------------------------------------ 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) ============================================================================== COMPANY OPERATIONS (Shipments in thousands of metric tons, dollars in millions) Reconciling Items Consolidated - ------------------------------------------------------------- Quarters ended Dec. 31 1999 1998 1999 1998 - ------------------------------------------------------------- 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) ============================================================= COMPANY OPERATIONS (Shipments in thousands of metric tons, dollars in millions) Packaging Construction Base and and Materials Consumer Distribution - ------------------------------------------------------------------------------ Year ended December 31 1999 1998 1999 1998 1999 1998 - ------------------------------------------------------------------------------ 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) ============================================================================== COMPANY OPERATIONS (Shipments in thousands of metric tons, dollars in millions) Transportation Restructuring Other - ------------------------------------------------------------------------------ Year ended December 31 1999 1998 1999 1998 1999 1998 - ------------------------------------------------------------------------------ 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) ============================================================================== COMPANY OPERATIONS (Shipments in thousands of metric tons, dollars in millions) Reconciling Items Consolidated - ------------------------------------------------------------- Year ended December 31 1999 1998 1999 1998 - ------------------------------------------------------------- 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 ============================================================= 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