EXHIBIT 99.3
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, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 1-1430
A. Full title of the plan:
EMPLOYEES SAVINGS PLAN
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
REQUIRED INFORMATION
FINANCIAL STATEMENTS AND EXHIBITS
FINANCIAL STATEMENTS
Page No.
Report of Independent Auditors........................... F-1
Statement of Net Assets Available for
Plan Benefits, with Fund Information................... F-2
Statement of Changes in Net Assets Available
for Plan Benefits, with Fund Information............... F-3
Notes to Financial Statements............................ F-4
Schedules:
Assets Held for Investment Purposes...................... S-1
Reportable Transactions.................................. S-2
EXHIBITS
Exhibit A Consent of Independent Auditors
SIGNATURES
The Plan. Pursuant to the requirements of the
Securities Exchange Act of 1934, Reynolds Metals Company, which
administers the Plan, has duly caused this annual report to be
signed on its behalf by the undersigned hereunto duly authorized.
EMPLOYEES SAVINGS PLAN
By: Richard G. Holder
Richard G. Holder
Chairman and Chief Executive Officer
Reynolds Metals Company
DATE: June 26, 1996
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 Employees Savings Plan as
of December 31, 1995 and 1994, and the related statement of
changes in net assets available for plan benefits for the
year ended December 31, 1995. These financial statements are
the responsibility of 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 generally
accepted auditing standards. 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, 1995
and 1994, and the changes in its net assets available for
plan benefits for the year ended December 31, 1995, in
conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an
opinion on the basic financial statements taken as a whole.
The accompanying supplemental schedules of assets held for
investment purposes as of December 31, 1995 and reportable
transactions for the year ended December 31, 1995, are
presented for purposes of complying with the Department of
Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974,
and are not a required part of the basic financial
statements. The Fund Information in the statement of net
assets available for plan benefits and the statement of
changes in net assets available for plan benefits is
presented for purposes of additional analysis rather than to
present the net assets available for plan benefits and
changes in net assets available for plan benefits of each
fund. The supplemental schedules and Fund Information have
been subjected to the auditing procedures applied in our
audits of the basic financial statements and, in our
opinion, are fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
Richmond, Virginia
June 21, 1996
Employees Savings Plan
Statement of Net Assets Available for Plan Benefits, with Fund Information
(Dollars in Thousands)
December 31, 1995 December 31, 1994
------------------------------------------------------- ----------------------------------------------------
Fund Information Fund Information
--------------------------------------------- --------------------------------------------
Reynolds Diversified Balanced Interest Reynolds Diversified Balanced Interest
Stock Equities Investment Income Loan Stock Equities Investment Income Loan
Fund Fund Fund Fund Fund Total Fund Fund Income Fund Fund Total
------------------------------------------------------- ----------------------------------------------------
Assets
Investments:
Common stock of
Reynolds Metals
Company 1,626
and 629 shares
(Cost $90 and $33) $94 $ 94 $31 $ 31
Master trust:
Diversified Equities
(cost $224
and $52) - $256 256 - $52 52
Balanced (cost
$121 and $27) - - $125 125 - - $26 26
Interest Income - - - $3,544 3,544 - - - $1,424 1,424
Loans to participants - - - - $71 71 - - - $53 53
------------------------------------------------------- ----------------------------------------------------
Total investments 94 256 125 3,544 71 4,090 31 52 26 1,424 53 1,586
Contributions receivable 3 3 3 22 - 31 - - - 2 - 2
------------------------------------------------------- ----------------------------------------------------
Total assets 97 259 128 3,566 71 4,121 31 52 26 1,426 53 1,588
Interfund receivable
(payable) (11) 2 (2) 11 - - - 2 - (2) - -
------------------------------------------------------- ----------------------------------------------------
Net assets available
for plan benefits $86 $261 $126 $3,577 $71 $4,121 $31 $54 $26 $1,424 $53 $1,588
======================================================= ====================================================
See accompanying notes.
/TABLE
Employees Savings Plan
Statement of Changes in Net Assets Available for Plan Benefits, with
Fund Information
(Dollars in Thousands)
Year ended December 31, 1995
----------------------------------------------------------------------
Fund Information
---------------------------------------------------------
Reynolds Diversified Balance Interest
Stock Equities Investment Income Loan
Fund Fund Fund Fund Fund Total
-------------------------------------------------------------------
Additions to net assets:
Investment income:
Net realized and unrealized
appreciation of investments $ 9 $ 33 $ 10 $ 52
Interest and dividends 1 4 3 $ 111 $ 3 122
-------------------------------------------------------------------
10 37 13 111 3 174
-------------------------------------------------------------------
Contributions:
Employer 10 25 15 151 - 201
Employee 39 77 43 429 - 588
-------------------------------------------------------------------
49 102 58 580 - 789
-------------------------------------------------------------------
Assets transferred - - - 1,676 - 1,676
-------------------------------------------------------------------
Total Additions 59 139 71 2,367 3 2,639
-------------------------------------------------------------------
Deductions from net assets:
Withdrawals by participants 4 1 2 94 3 104
Administrative expenses - - - 2 - 2
-------------------------------------------------------------------
Total Deductions 4 1 2 96 3 106
-------------------------------------------------------------------
Interfund transfers - 69 31 (118) 18 0
Net increase 55 207 100 2,153 18 2,533
Net assets available for plan
benefits:
Beginning of year 31 54 26 1,424 53 1,588
-------------------------------------------------------------------
End of year $86 $261 $126 $3,577 $71 $4,121
===================================================================
See accompanying notes.
Employees Savings Plan
Notes to Financial Statements
December 31, 1995
(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 Employees Savings Plan
("Plan") are maintained on the accrual basis. All
securities transactions are recorded as of the trade date.
Investments in Reynolds Metals Company 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. 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
structured investment contracts equals contract value.
Certain amounts in the 1994 financial statements have been
reclassified to conform to the 1995 presentation.
2. Summary of Significant Plan Provisions
Reynolds Metals Company ("the Company") established the Plan
effective January 1, 1990, covering all eligible employees
of the Company and designated subsidiaries (each an
"Employer") who elect to contribute. 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.
A participant may elect to make voluntary payroll
contributions to the Plan in specified amounts ranging from
2% to 12% of compensation in 1% increments. Prior to July
1, 1994, participant contributions could only be made on a
before tax basis. Effective July 1, 1994, participants may
elect to make contributions on a before or after tax basis.
Plan participation is voluntary and is available to eligible
employees upon the later of (a) the date on which they
complete their probationary period for purposes of the Plan,
or (b) the date at which their Employer adopts the Plan.
Employees Savings Plan
Notes to Financial Statements (continued)
2. Summary of Significant Plan Provisions (continued)
Highly compensated participants may be required to reduce
the amount of "pretax" contributions in order to permit the
Plan to satisfy the nondiscrimination requirements of
Section 401(k) of the Internal Revenue Code.
At certain locations, the Employer matches 50% of the
participant's contribution, up to 6% of compensation, as
defined in the Plan document.
Effective July 1, 1994, participants may choose from four
investment funds, including a Company Stock fund. Prior to
July 1, 1994, the only investment option was the Interest
Income Fund.
As of December 31, 1995, if participants are eligible to receive
a profit sharing award, gainsharing payment or other designated
type of lump sum payment, they may elect to contribute between
10% and 50% of the award and/or payment (in 10% increments) to the
Plan. Such contributions are not eligible for Employer match.
The Employer's matching contributions are 100% vested upon
death, retirement, disability or completion of 3 years of
service. Employer contributions are forfeited if a
participant terminates employment prior to the full vesting
period. Amounts forfeited are used to reduce Employer
contributions. Employee contributions are fully vested
immediately.
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 an intent to do so, the
Company has the right under the Plan document to discontinue
contributions and to terminate the Plan subject to the
provisions of ERISA. In the event of Plan termination, all
Employer contributions would become fully vested.
The Company is responsible for all administrative duties
related to the Plan and bears the related costs, except for
investment-related and trustee fees which are paid by the
Plan.
Employees Savings Plan
Notes to Financial Statements (continued)
3. Commingled Master Trust Investments
All of the assets held in the Interest Income Fund,
Diversified Equities Fund and Balanced Investment Fund as of
December 31, 1995 and 1994 were held in a Master Trust
established under a Master Trust Agreement dated as of
December 29, 1989 between Reynolds Metals Company and The Chase
Manhattan Bank, N.A., as trustee, and are commingled with
the assets of three other savings plans of the Company and
certain of its subsidiaries.
Substantially all the assets held in the Balanced Investment
Fund and the Diversified Equities Fund were invested in the
Vanguard STAR Fund and the Vanguard Institutional Index
Fund, respectively, no-load mutual funds held and managed by
the Vanguard Group of Investment Companies. The portion of
the commingled Diversified Equities Fund and commingled
Balanced Investment Fund allocable to the Plan were 3.4% and
2.2%, respectively, at December 31, 1995 and 2.2% and 0.9%,
respectively, at December 31, 1994.
The assets of 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. These
contracts generally provide for the full repayment of
principal and interest. SIC's represent 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. Upon the occurrence of certain events (none
of which are currently known to have occurred, nor are any
such events contemplated), however, market value of the GIC
or SIC, if lower than book value, may be repaid. The annual
rate of return on these contracts during 1995 and 1994 was
approximately 7%. The rate of return on these contracts at
December 31, 1995 was 6.4% (7% at December 31, 1994).
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.
On December 31, 1995, certain assets of another savings plan
of the Company were transferred into the Plan. There was no
effect on any participant's accounts as a result of the
transfer.
Employees Savings Plan
Notes to Financial Statements (continued)
3. Commingled Master Trust Investments (continued)
The portion of the commingled Interest Income Fund allocable
to the Plan is 2.9% and 1.3% at December 31, 1995 and 1994,
respectively.
Summarized financial fund information of the commingled
accounts within the Master Trust is presented below:
December 31, 1995 December 31, 1994
------------------------------------ ------------------------------------
Diversified Balanced Interest Diversified Balanced Interest
Equities Investment Income Equities Investment Income
Fund Fund Fund Fund Fund Fund
------------------------------------ ------------------------------------
MASTER TRUST NET ASSETS
Assets
Cash and cash equivalents $ 23,907 $ 8,654
Contributions receivable $ 510 $ 112 448 $ 9 $ 8 286
Investments:
Investment contracts - - 101,160 - - 98,062
Mutual funds 7,572 5,547 - 2,375 2,893 -
------------------------------------ ------------------------------------
Total assets 8,082 5,659 125,515 2,384 2,901 107,002
------------------------------------ ------------------------------------
Liabilities
Accounts payable - - 480 - 36 55
------------------------------------ ------------------------------------
Master Trust net assets $8,082 $5,659 $125,035 $2,384 $2,865 $106,947
==================================== ====================================
CHANGES IN MASTER TRUST NET ASSETS
Additions:
Contributions from plans $1,022 $ 783 $ 21,800
Net realized and unrealized appreciation
of investments 1,156 765 -
Interest and dividends 126 182 7,868
Assets transferred into Master Trust 162 - 890
----------------------------------
2,466 1,730 30,558
----------------------------------
Deductions:
Distributions to plans 114 143 6,865
Administrative expenses 2 3 138
116 146 7,003
Interfund transfers-net 3,348 1,210 (5,467)
-----------------------------------
Net additions 5,698 2,794 18,088
----------------------------------
Master Trust net assets
at beginning of period 2,384 2,865 106,947
----------------------------------
Master Trust net assets
at end of period $8,082 $5,659 $125,035
==================================
Employees Savings Plan
Notes to Financial Statements (continued)
4. Differences Between Financial Statements and Form 5500
The following is a reconciliation of net assets available
for benefits per the financial statements to the Form 5500:
December 31,
1995 1994
----------------------
Net assets available for benefits per
the financial statements $4,121 $1,588
Amounts allocated to withdrawn participants 41 27
----------------------
Net assets available for benefits per
the Form 5500 $4,080 $1,561
======================
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
Year Ended
December 31,
1995
--------------
Benefits paid to participants per the
financial statements $104
Add: Amounts allocated on Form 5500 to
withdrawn participants in the current year 41
Less: Amounts allocated on Form 5500 to
withdrawn participants in the prior year (27)
--------------
Benefits paid to participants per the Form 5500 $118
==============
5. Income Taxes
The Internal Revenue Service has determined that the Plan
qualifies under Section 401(a) of the Internal Revenue Code
(the "Code"). As long as the Plan continues to be qualified,
under present Federal income tax laws and regulations
participants will not be taxed on employer contributions or
investment earnings allocated to their account.
Participants will normally be subject to tax thereon at such
time as they receive distributions from the Plan. As long
as the Plan continues to be qualified, the Plan will not be
taxed on its dividend and interest income or on any capital
gains realized by it or any unrealized appreciation of
investments.
Schedules
Reynolds Metals Company
Employees Savings Plan
Schedule of Assets Held for Investment Purposes
December 31, 1995
(Dollars in Thousands)
Fair
Issuer Description Cost Value
- ---------------------------------------------------------------------------
Common Stock
Reynolds Metals Company* 1,626 shares $90 $94
Loans Generally
Loans to participants* repayable in 5 71 71
years, prime rate
plus 1%
*Indicates party-in-interest to the Plan.
Reynolds Metals Company
Employees Savings Plan
Schedule of Reportable Transactions
Year ended December 31, 1995
Category (i) - Individual Transactions in Excess of 5% of Plan Assets
- -------------------------------------------------------------------------------
Number of Net Gain
Description of Assets Shares Transaction Cost Proceeds (Loss)
- -------------------------------------------------------------------------------
Chase BK Domestic Liquidity 5,617.60 Purchase $5,618
Chase BK Domestic Liquidity 2,122.23 Sale 2,122 $ 2,122 $ 0
Chase BK Domestic Liquidity 4,282.37 Sale 4,282 4,282 0
Chase BK Domestic Liquidity 7,631.99 Purchase 7,632
Chase BK Domestic Liquidity 6,775.00 Sale 6,775 6,775 0
Chase BK Domestic Liquidity 1,870.46 Purchase 1,870
Chase BK Domestic Liquidity 2,440.26 Sale 2,440 2,440 0
Chase BK Domestic Liquidity 1,551.51 Purchase 1,552
Chase BK Domestic Liquidity 2,291.26 Sale 2,291 2,291 0
Chase BK Domestic Liquidity 5,001.00 Purchase 5,001
Chase BK Domestic Liquidity 4,663.60 Sale 4,664 4,664 0
Chase BK Domestic Liquidity 1,642.32 Purchase 1,642
Chase BK Domestic Liquidity 1,920.00 Purchase 1,920
Chase BK Domestic Liquidity 1,586.55 Sale 1,587 1,587 0
Chase BK Domestic Liquidity 3,514.56 Purchase 3,515
Chase BK Domestic Liquidity 3,490.20 Sale 3,490 3,490 0
Chase BK Domestic Liquidity 3,514.56 Purchase 3,515
Chase BK Domestic Liquidity 1,980.21 Sale 1,980 1,980 0
Chase BK Domestic Liquidity 1,983.67 Sale 1,984 1,984 0
Chase BK Domestic Liquidity 1,603.53 Purchase 1,604
Chase BK Domestic Liquidity 3,159.64 Purchase 3,160
Chase BK Domestic Liquidity 14,800.39 Purchase 14,800
Chase BK Domestic Liquidity 20,088.98 Sale 20,089 20,089 0
Chase BK Domestic Liquidity 1,970.61 Sale 1,971 1,971 0
RMC Common Stock 86.00 Purchase 4,282
RMC Common Stock 42.00 Sale 2,084 2,098 14
RMC Common Stock 42.00 Purchase 2,098
RMC Common Stock 125.00 Purchase 6,775
RMC Common Stock 130.00 Sale 6,761 8,103 1,342
Reynolds Metals Company
Employees Savings Plan
Schedule of Reportable Transactions (continued)
Category (i) - Individual Transactions in Excess of 5% of Plan Assets
(continued)
- ------------------------------------------------------------------------------
Number of Net Gain
Description of Assets Shares Transaction Cost Proceeds (Loss)
- ------------------------------------------------------------------------------
RMC Common Stock 123.00 Sale 6,132 7,714 1,582
RMC Common Stock 123.00 Purchase 7,714
RMC Common Stock 40.00 Purchase 2,440
RMC Common Stock 39.00 Purchase 2,291
RMC Common Stock 80.00 Purchase 4,664
RMC Common Stock 32.00 Purchase 1,587
RMC Common Stock 95.00 Purchase 4,963
RMC Common Stock 38.00 Purchase 1,989
RMC Common Stock 38.00 Purchase 1,984
RMC Common Stock 34.00 Purchase 1,971
RMC Common Stock 172.00 Sale 8,620 9,938 1,318
RMC Common Stock 172.00 Purchase 9,938
RMC Common Stock 375.00 Sale 20,723 20,881 158
RMC Common Stock 377.00 Purchase 20,940
RMC Common Stock 36.00 Purchase 1,971
Category (iii) - Series of Transactions in Excess of 5% of Plan Assets
- ------------------------------------------------------------------------------
Number of Number of Net Gain
Description of Assets Purchases Cost Sales Proceeds (Loss)
- ------------------------------------------------------------------------------
Chase Bk Domestic Liquidity 72 $ 79,709 48 $78,857 0
RMC Common Stock 58 103,575 16 50,872 4,617
________
There were no category (ii) or (iv) reportable transactions during 1995.
INDEX TO EXHIBITS
Exhibit A Consent of Independent Auditors
EXHIBIT A
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8 No. 33-53847) pertaining to the Employees
Savings Plan of Reynolds Metals Company and in the related
Prospectus of our report dated June 21, 1996, with respect to the
financial statements and schedules of the Employees Savings Plan
included in this Annual Report (Form 11-K) for the year ended
December 31, 1995.
Ernst & Young LLP
Richmond, Virginia
June 21, 1996