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 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
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-4
Notes to Financial Statements......................... F-5
EXHIBITS
Exhibit A Consent of Ernst & Young LLP, Independent Auditors
- 2 -
3
SIGNATURES
The Plan. Pursuant to the requirements of the
Securities Exchange Act of 1934, the Savings and Investment
Plan Committee 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 AND INVESTMENT PLAN
FOR SALARIED EMPLOYEES
By: Savings and Investment
Plan Committee
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 -
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, 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
F-2
Reynolds Metals Company
Savings and Investment Plan for Salaried Employees
Statement of Net Assets Available for Plan Benefits
December 31, 1999
(Dollars in Thousands)
NON-
PARTICIPANT PARTICIPANT
DIRECTED DIRECTED TOTAL
-------------------------------------------
ASSETS
Investment in
Master Trust $347,146 $108,749 $455,895
Accrued income 354 505 859
-------------------------------------------
Total assets 347,500 109,254 456,754
Interfund receivable
(payable) - net 20 (20) -
-------------------------------------------
Net assets available for
plan benefits $347,520 $109,234 $456,754
===========================================
See accompanying notes.
F-2
F-3
Reynolds Metals Company
Savings and Investment Plan for Salaried Employees
Statement of Net Assets Available for Plan Benefits
December 31, 1998
(Dollars in Thousands)
NON-
PARTICIPANT PARTICIPANT
DIRECTED DIRECTED TOTAL
-----------------------------------------------
ASSETS
Investment in
Master Trust $338,871 $86,684 $425,555
Accrued income 236 568 804
Contributions receivable 927 473 1,400
-----------------------------------------------
Total assets 340,034 87,725 427,759
LIABILITIES
Accrued expenses 130 - 130
-----------------------------------------------
Net assets available for
plan benefits $339,904 $87,725 $427,629
===============================================
See accompanying notes.
F-3
F-4
Reynolds Metals Company
Savings and Investment Plan for Salaried Employees
Statement of Changes in Net Assets Available for
Plan Benefits
Year Ended December 31, 1999
(Dollars in Thousands)
NON-
PARTICIPANT PARTICIPANT
DIRECTED DIRECTED TOTAL
-------------------------------------------
Additions to net assets:
Net investment gain
from Master Trust $ 62,313 $ 37,267 $ 99,580
Assets received from
other plans 894 - 894
Contributions:
Employer - 5,197 5,197
Employee 16,958 - 16,958
-------------------------------------------
16,958 5,197 22,155
-------------------------------------------
Total Additions 80,165 42,464 122,629
Deductions from net
assets:
Withdrawals by
participants 71,871 21,626 93,497
Assets transferred to
other plans - 7 7
-------------------------------------------
Total Deductions 71,871 21,633 93,504
Interfund transfers - net (678) 678 -
-------------------------------------------
Net increase 7,616 21,509 29,125
Net assets available for
plan benefits:
Beginning of year 339,904 87,725 427,629
-------------------------------------------
End of year $347,520 $109,234 $456,754
===========================================
See accompanying notes.
F-4
F-5
Reynolds Metals Company
Savings and Investment Plan for Salaried 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 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 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 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.
F-5
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 1999
or 1998.
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.
Upon enrollment, a participant may direct employee
contributions to any of the Plan's fund options. Employer
contributions are invested in Reynolds Metals Company Common
Stock. Employee contributions are participant directed
investments and employer contributions are non-participant
directed investments.
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 administrator and bears the related
costs, except for investment related and trustee fees, which
are paid by the Plan.
F-6
F-7
Reynolds Metals Company
Savings and Investment Plan for Salaried Employees
Notes to Financial Statements (continued)
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
investments of the Master Trust represent employer
contributions provided by the Plan.
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 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 the 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.
Interest is credited to participants' accounts on the dollar-
weighted average (blended rate) basis. The annual rate of
return on these contracts during 1999 was approximately
6.2%. The current yield on December 31, 1999 was 6.3% (6.3%
on December 31, 1998). 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.
F-7
F-8
Reynolds Metals Company
Savings and Investment Plan for Salaried Employees
Notes to Financial Statements (continued)
3. COMMINGLED MASTER TRUST INVESTMENTS (CONTINUED)
Summarized financial information of the commingled accounts
within the Master Trust is presented below:
NON-
PARTICIPANT PARTICIPANT
DIRECTED DIRECTED TOTAL
-----------------------------------------------
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 $347,520 $109,234 $456,754
Percent 64% 100% 70%
F-8
F-9
Reynolds Metals Company
Savings and Investment Plan for Salaried Employees
Notes to Financial Statements (continued)
3. COMMINGLED MASTER TRUST INVESTMENTS (CONTINUED)
NON-
PARTICIPANT PARTICIPANT
DIRECTED DIRECTED TOTAL
---------------------------------------------
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 $339,904 $87,725 $427,629
Percent 60% 100% 65%
F-9
F-10
Reynolds Metals Company
Savings and Investment Plan for Salaried Employees
Notes to Financial Statements (continued)
3. COMMINGLED MASTER TRUST INVESTMENTS (CONTINUED)
NON-
PARTICIPANT PARTICIPANT
DIRECTED DIRECTED TOTAL
------------------------------------------
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
===========================================
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-10
INDEX TO EXHIBITS
Exhibit A Consent of Ernst & Young LLP, Independent Auditors
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 and Investment Plan for Salaried 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 and Investment Plan for Salaried Employees
included in this Annual Report (Form 11-K) for the year ended
December 31, 1999.
ERNST & YOUNG LLP
Richmond, Virginia
June 22, 2000