10-Q: Quarterly report pursuant to Section 13 or 15(d)
Published on February 16, 2010
Table of Contents
Washington, D.C. 20549
(Mark One) | ||
þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the quarterly period ended December 31, 2009 | ||
Or | ||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to |
Canada
|
98-0442987 | |
(State or other jurisdiction
of incorporation or organization) |
(I.R.S. Employer Identification Number) |
|
3399 Peachtree Road NE, Suite 1500
Atlanta, Georgia (Address of principal executive offices) |
30326 (Zip Code) |
|
Large accelerated filer o | Accelerated filer o | Non-accelerated filer þ | Smaller reporting company o |
1
Table of Contents
Item 1. | Financial Statements |
Three Months |
Nine Months |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Net sales
|
$ | 2,112 | $ | 2,176 | $ | 6,253 | $ | 8,238 | ||||||||
Cost of goods sold (exclusive of depreciation and amortization
shown below)
|
1,788 | 2,023 | 5,049 | 7,645 | ||||||||||||
Selling, general and administrative expenses
|
99 | 73 | 260 | 246 | ||||||||||||
Depreciation and amortization
|
93 | 107 | 285 | 330 | ||||||||||||
Research and development expenses
|
10 | 11 | 27 | 33 | ||||||||||||
Interest expense and amortization of debt issuance costs
|
44 | 47 | 131 | 138 | ||||||||||||
Interest income
|
(2 | ) | (3 | ) | (8 | ) | (13 | ) | ||||||||
(Gain) loss on change in fair value of derivative instruments,
net
|
(40 | ) | 396 | (192 | ) | 516 | ||||||||||
Impairment of goodwill
|
| 1,340 | | 1,340 | ||||||||||||
Restructuring charges, net
|
1 | 15 | 7 | 14 | ||||||||||||
Equity in net (income) loss of non-consolidated affiliates
|
(8 | ) | 166 | 12 | 166 | |||||||||||
Other (income) expenses, net
|
(2 | ) | 20 | (21 | ) | 53 | ||||||||||
1,983 | 4,195 | 5,550 | 10,468 | |||||||||||||
Income (loss) before income taxes
|
129 | (2,019 | ) | 703 | (2,230 | ) | ||||||||||
Income tax provision (benefit)
|
48 | (196 | ) | 247 | (329 | ) | ||||||||||
Net income (loss)
|
81 | (1,823 | ) | 456 | (1,901 | ) | ||||||||||
Net income (loss) attributable to noncontrolling interests
|
13 | (9 | ) | 50 | (7 | ) | ||||||||||
Net income (loss) attributable to our common shareholder
|
$ | 68 | $ | (1,814 | ) | $ | 406 | $ | (1,894 | ) | ||||||
2
Table of Contents
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(In millions, except number of shares)
December 31, |
March 31, |
|||||||
2009 | 2009 | |||||||
ASSETS
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$ | 252 | $ | 248 | ||||
Accounts receivable (net of allowances of $4 and $2 as of
December 31, 2009 and March 31, 2009, respectively)
|
||||||||
third parties
|
998 | 1,049 | ||||||
related parties
|
11 | 25 | ||||||
Inventories
|
1,059 | 793 | ||||||
Prepaid expenses and other current assets
|
45 | 51 | ||||||
Fair value of derivative instruments
|
235 | 119 | ||||||
Deferred income tax assets
|
17 | 216 | ||||||
Total current assets
|
2,617 | 2,501 | ||||||
Property, plant and equipment, net
|
2,714 | 2,799 | ||||||
Goodwill
|
611 | 582 | ||||||
Intangible assets, net
|
768 | 787 | ||||||
Investment in and advances to non-consolidated affiliates
|
757 | 719 | ||||||
Fair value of derivative instruments, net of current portion
|
12 | 72 | ||||||
Deferred income tax assets
|
4 | 4 | ||||||
Other long-term assets
|
||||||||
third parties
|
96 | 80 | ||||||
related parties
|
23 | 23 | ||||||
Total assets
|
$ | 7,602 | $ | 7,567 | ||||
LIABILITIES AND SHAREHOLDERS EQUITY | ||||||||
Current liabilities
|
||||||||
Current portion of long-term debt
|
$ | 149 | $ | 51 | ||||
Short-term borrowings
|
61 | 264 | ||||||
Accounts payable
|
||||||||
third parties
|
818 | 725 | ||||||
related parties
|
44 | 48 | ||||||
Fair value of derivative instruments
|
112 | 640 | ||||||
Accrued expenses and other current liabilities
|
425 | 516 | ||||||
Deferred income tax liabilities
|
39 | | ||||||
Total current liabilities
|
1,648 | 2,244 | ||||||
Long-term debt, net of current portion
|
||||||||
third parties
|
2,493 | 2,417 | ||||||
related parties
|
| 91 | ||||||
Deferred income tax liabilities
|
501 | 469 | ||||||
Accrued postretirement benefits
|
522 | 495 | ||||||
Other long-term liabilities
|
358 | 342 | ||||||
Total liabilities
|
5,522 | 6,058 | ||||||
Commitments and contingencies
|
||||||||
Shareholders equity
|
||||||||
Common stock, no par value; unlimited number of shares
authorized; 77,459,658 shares issued and outstanding as of
December 31, 2009 and March 31, 2009
|
| | ||||||
Additional paid-in capital
|
3,497 | 3,497 | ||||||
Accumulated deficit
|
(1,524 | ) | (1,930 | ) | ||||
Accumulated other comprehensive loss
|
(36 | ) | (148 | ) | ||||
Total Novelis shareholders equity
|
1,937 | 1,419 | ||||||
Noncontrolling interests
|
143 | 90 | ||||||
Total equity
|
2,080 | 1,509 | ||||||
Total liabilities and shareholders equity
|
$ | 7,602 | $ | 7,567 | ||||
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Table of Contents
Nine Months |
||||||||
Ended |
||||||||
December 31, | ||||||||
2009 | 2008 | |||||||
OPERATING ACTIVITIES
|
||||||||
Net income (loss)
|
$ | 456 | $ | (1,901 | ) | |||
Adjustments to determine net cash provided by (used in)
operating activities:
|
||||||||
Depreciation and amortization
|
285 | 330 | ||||||
(Gain) loss on change in fair value of derivative instruments,
net
|
(192 | ) | 516 | |||||
Deferred income taxes
|
230 | (400 | ) | |||||
Write-off and amortization of fair value adjustments, net
|
(139 | ) | (178 | ) | ||||
Impairment of goodwill
|
| 1,340 | ||||||
Equity in net (income) loss of non-consolidated affiliates
|
12 | 166 | ||||||
Foreign exchange remeasurement of debt
|
(17 | ) | 21 | |||||
Gain on reversal of accrued legal claim
|
(3 | ) | (26 | ) | ||||
Inventory reserves and adjustments
|
| 38 | ||||||
Other, net
|
8 | 4 | ||||||
Changes in assets and liabilities:
|
||||||||
Accounts receivable
|
107 | 89 | ||||||
Inventories
|
(218 | ) | 98 | |||||
Accounts payable
|
34 | (439 | ) | |||||
Other current assets
|
9 | (25 | ) | |||||
Other current liabilities
|
35 | (45 | ) | |||||
Other noncurrent assets
|
(16 | ) | 8 | |||||
Other noncurrent liabilities
|
39 | (10 | ) | |||||
Net cash provided by (used in) operating activities
|
630 | (414 | ) | |||||
INVESTING ACTIVITIES
|
||||||||
Capital expenditures
|
(74 | ) | (107 | ) | ||||
Proceeds from sales of assets
|
4 | 4 | ||||||
Changes to investment in and advances to non-consolidated
affiliates
|
3 | 17 | ||||||
Proceeds from related party loans receivable, net
|
15 | 18 | ||||||
Net proceeds (outflow) from settlement of derivative instruments
|
(432 | ) | 160 | |||||
Net cash provided by (used in) investing activities
|
(484 | ) | 92 | |||||
FINANCING ACTIVITIES
|
||||||||
Proceeds from issuance of debt, third parties
|
177 | 8 | ||||||
Proceeds from issuance of debt, related parties
|
4 | | ||||||
Principal payments, third parties
|
(20 | ) | (11 | ) | ||||
Principal payments, related parties
|
(95 | ) | | |||||
Short-term borrowings, net
|
(211 | ) | 193 | |||||
Dividends, noncontrolling interest
|
(13 | ) | (5 | ) | ||||
Debt issuance costs
|
(1 | ) | | |||||
Net cash provided by (used in) financing activities
|
(159 | ) | 185 | |||||
Net decrease in cash and cash equivalents
|
(13 | ) | (137 | ) | ||||
Effect of exchange rate changes on cash balances held in
foreign currencies
|
17 | (13 | ) | |||||
Cash and cash equivalents beginning of period
|
248 | 326 | ||||||
Cash and cash equivalents end of period
|
$ | 252 | $ | 176 | ||||
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Table of Contents
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY (unaudited)
(In millions, except number of shares)
Novelis Inc. Shareholder | ||||||||||||||||||||||||||||
Accumulated |
||||||||||||||||||||||||||||
Retained |
Other |
|||||||||||||||||||||||||||
Additional |
Earnings |
Comprehensive |
Non- |
|||||||||||||||||||||||||
Common Stock |
Paid-in |
(Accumulated |
Income (Loss) |
controlling |
Total |
|||||||||||||||||||||||
Shares | Amount | Capital | Deficit) | (AOCI) | Interests | Equity | ||||||||||||||||||||||
Balance as of March 31, 2009
|
77,459,658 | $ | | $ | 3,497 | $ | (1,930 | ) | $ | (148 | ) | $ | 90 | $ | 1,509 | |||||||||||||
Net income attributable to our common shareholder
|
| | | 406 | | | 406 | |||||||||||||||||||||
Net income attributable to noncontrolling interests
|
| | | | | 50 | 50 | |||||||||||||||||||||
Currency translation adjustment, net of tax provision of $4
included in AOCI
|
| | | | 105 | 16 | 121 | |||||||||||||||||||||
Change in fair value of effective portion of hedges, net of tax
benefit of $ included in AOCI
|
| | | | (1 | ) | | (1 | ) | |||||||||||||||||||
Postretirement benefit plans:
|
||||||||||||||||||||||||||||
Change in pension and other benefits, net of tax provision of $5
included in AOCI
|
| | | | 8 | | 8 | |||||||||||||||||||||
Noncontrolling interests cash dividends
|
| | | | | (13 | ) | (13 | ) | |||||||||||||||||||
Balance as of December 31, 2009
|
77,459,658 | $ | | $ | 3,497 | $ | (1,524 | ) | $ | (36 | ) | $ | 143 | $ | 2,080 | |||||||||||||
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Three Months Ended |
Three Months Ended |
|||||||||||||||||||||||
December 31, 2009 | December 31, 2008 | |||||||||||||||||||||||
Attributable to |
Attributable to |
Attributable to |
Attributable to |
|||||||||||||||||||||
Our Common |
Noncontrolling |
Our Common |
Noncontrolling |
|||||||||||||||||||||
Shareholder | Interests | Total | Shareholder | Interests | Total | |||||||||||||||||||
Net income (loss)
|
$ | 68 | $ | 13 | $ | 81 | $ | (1,814 | ) | $ | (9 | ) | $ | (1,823 | ) | |||||||||
Other comprehensive income (loss):
|
||||||||||||||||||||||||
Currency translation adjustment
|
(21 | ) | 2 | (19 | ) | | (8 | ) | (8 | ) | ||||||||||||||
Net change in fair value of effective portion of hedges
|
3 | | 3 | (27 | ) | | (27 | ) | ||||||||||||||||
Postretirement benefit plans:
|
||||||||||||||||||||||||
Change in pension and other benefits
|
7 | | 7 | (17 | ) | | (17 | ) | ||||||||||||||||
Other comprehensive income (loss) before income tax effect
|
(11 | ) | 2 | (9 | ) | (44 | ) | (8 | ) | (52 | ) | |||||||||||||
Income tax provision (benefit) related to items of other
comprehensive income (loss)
|
3 | | 3 | 11 | | 11 | ||||||||||||||||||
Other comprehensive income (loss), net of tax
|
(14 | ) | 2 | (12 | ) | (55 | ) | (8 | ) | (63 | ) | |||||||||||||
Comprehensive income (loss)
|
$ | 54 | $ | 15 | $ | 69 | $ | (1,869 | ) | $ | (17 | ) | $ | (1,886 | ) | |||||||||
Nine Months Ended |
Nine Months Ended |
|||||||||||||||||||||||
December 31, 2009 | December 31, 2008 | |||||||||||||||||||||||
Attributable to |
Attributable to |
Attributable to |
Attributable to |
|||||||||||||||||||||
Our Common |
Noncontrolling |
Our Common |
Noncontrolling |
|||||||||||||||||||||
Shareholder | Interests | Total | Shareholder | Interests | Total | |||||||||||||||||||
Net income (loss)
|
$ | 406 | $ | 50 | $ | 456 | $ | (1,894 | ) | $ | (7 | ) | $ | (1,901 | ) | |||||||||
Other comprehensive income (loss):
|
||||||||||||||||||||||||
Currency translation adjustment
|
109 | 16 | 125 | (63 | ) | (31 | ) | (94 | ) | |||||||||||||||
Net change in fair value of effective portion of hedges
|
(1 | ) | | (1 | ) | (24 | ) | | (24 | ) | ||||||||||||||
Postretirement benefit plans:
|
||||||||||||||||||||||||
Change in pension and other benefits
|
13 | | 13 | (15 | ) | | (15 | ) | ||||||||||||||||
Other comprehensive income (loss) before income tax effect
|
121 | 16 | 137 | (102 | ) | (31 | ) | (133 | ) | |||||||||||||||
Income tax provision related to items of other comprehensive
income (loss)
|
9 | | 9 | 13 | | 13 | ||||||||||||||||||
Other comprehensive income (loss), net of tax
|
112 | 16 | 128 | (115 | ) | (31 | ) | (146 | ) | |||||||||||||||
Comprehensive income (loss)
|
$ | 518 | $ | 66 | $ | 584 | $ | (2,009 | ) | $ | (38 | ) | $ | (2,047 | ) | |||||||||
6
Table of Contents
1. | BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
7
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8
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9
Table of Contents
2. | RESTRUCTURING PROGRAMS |
10
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North |
South |
Restructuring |
||||||||||||||||||||||
Europe | America | Asia | America | Corporate | Reserves | |||||||||||||||||||
Balance as of March 31, 2009
|
$ | 61 | $ | 16 | $ | | $ | 2 | $ | 1 | $ | 80 | ||||||||||||
Provisions, net
|
1 | 4 | | (1 | ) | | 4 | |||||||||||||||||
Cash payments
|
(39 | ) | (9 | ) | | (2 | ) | (1 | ) | (51 | ) | |||||||||||||
Impact of exchange rate changes
|
7 | | | 1 | | 8 | ||||||||||||||||||
Balance as of December 31, 2009
|
$ | 30 | $ | 11 | $ | | $ | | $ | | $ | 41 | ||||||||||||
11
Table of Contents
3. | INVENTORIES |
December 31, |
March 31, |
|||||||
2009 | 2009 | |||||||
Finished goods
|
$ | 289 | $ | 215 | ||||
Work in process
|
377 | 296 | ||||||
Raw materials
|
307 | 207 | ||||||
Supplies
|
91 | 79 | ||||||
1,064 | 797 | |||||||
Allowances
|
(5 | ) | (4 | ) | ||||
Inventories
|
$ | 1,059 | $ | 793 | ||||
4. | CONSOLIDATION OF VARIABLE INTEREST ENTITIES |
December 31, |
March 31, |
|||||||
2009 | 2009 | |||||||
Current assets
|
$ | 63 | $ | 64 | ||||
Total assets
|
$ | 130 | $ | 124 | ||||
Current liabilities
|
$ | (40 | ) | $ | (35 | ) | ||
Total liabilities
|
$ | (139 | ) | $ | (135 | ) | ||
Net carrying value
|
$ | (9 | ) | $ | (11 | ) |
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Table of Contents
5. | INVESTMENT IN AND ADVANCES TO NON-CONSOLIDATED AFFILIATES AND RELATED PARTY TRANSACTIONS |
Three Months |
||||||||||||||||
Ended |
Nine Months Ended |
|||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Net sales
|
$ | 63 | $ | 58 | $ | 183 | $ | 220 | ||||||||
Costs, expenses and provisions for taxes on income
|
55 | 64 | 195 | 226 | ||||||||||||
Impairment charge
|
| 160 | | 160 | ||||||||||||
Net income (loss)
|
$ | 8 | $ | (166 | ) | $ | (12 | ) | $ | (166 | ) | |||||
Three Months |
Nine Months |
|||||||||||||||
Ended |
Ended |
|||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Purchases of tolling services and electricity
|
||||||||||||||||
Aluminium Norf GmbH(A)
|
$ | 61 | $ | 56 | $ | 181 | $ | 203 | ||||||||
Consorcio Candonga(B)
|
| 2 | 1 | 15 | ||||||||||||
Total purchases from related parties
|
$ | 61 | $ | 58 | $ | 182 | $ | 218 | ||||||||
(A) | We purchase tolling services from Norf. | |
(B) | We obtain electricity from Consorcio Candonga for our operations in South America. |
December 31, |
March 31, |
|||||||
2009 | 2009 | |||||||
Accounts receivable(A)
|
$ | 11 | $ | 25 | ||||
Other long-term receivables(A)
|
$ | 23 | $ | 23 | ||||
Accounts payable(B)
|
$ | 44 | $ | 48 |
(A) | The balances represent current and non-current portions of a loan due from Norf. | |
(B) | We purchase tolling services from Norf and electricity from Consorcio Candonga. |
13
Table of Contents
6. | DEBT |
December 31, 2009 | March 31, 2009 | |||||||||||||||||||||||||||
Unamortized |
Unamortized |
|||||||||||||||||||||||||||
Interest |
Fair Value |
Carrying |
Fair Value |
Carrying |
||||||||||||||||||||||||
Rates(A) | Principal | Adjustments(B) | Value | Principal | Adjustments(B) | Value | ||||||||||||||||||||||
Third party debt:
|
||||||||||||||||||||||||||||
Short term borrowings
|
1.95 | % | $ | 61 | $ | | $ | 61 | $ | 264 | $ | | $ | 264 | ||||||||||||||
Novelis Inc.
|
||||||||||||||||||||||||||||
Floating rate Term Loan Facility, due July 2014
|
2.24 | %(C) | 293 | | 293 | 295 | | 295 | ||||||||||||||||||||
11.5% Senior Notes, due February 2015
|
11.50 | % | 185 | (4 | ) | 181 | | | | |||||||||||||||||||
7.25% Senior Notes, due February 2015
|
7.25 | % | 1,124 | 42 | 1,166 | 1,124 | 47 | 1,171 | ||||||||||||||||||||
Novelis Corporation
|
||||||||||||||||||||||||||||
Floating rate Term Loan Facility, due July 2014
|
2.25 | %(C) | 861 | (48 | ) | 813 | 867 | (54 | ) | 813 | ||||||||||||||||||
Novelis Switzerland S.A.
|
||||||||||||||||||||||||||||
Capital lease obligation, due December 2019 (Swiss francs (CHF)
50 million)
|
7.50 | % | 47 | (3 | ) | 44 | 45 | (3 | ) | 42 | ||||||||||||||||||
Capital lease obligation, due August 2011 (CHF 2 million)
|
2.49 | % | 2 | | 2 | 2 | | 2 | ||||||||||||||||||||
Novelis Korea Limited
|
||||||||||||||||||||||||||||
Bank loan, due October 2010
|
2.82 | %(C) | 100 | | 100 | 100 | | 100 | ||||||||||||||||||||
Bank loan, due February 2010 (Korean won (KRW) 50 billion)
|
4.14 | % | 42 | | 42 | 37 | | 37 | ||||||||||||||||||||
Bank loan, due May 2009 (KRW 10 billion)
|
7.47 | % | | | | 7 | | 7 | ||||||||||||||||||||
Other
|
||||||||||||||||||||||||||||
Other debt, due December 2011 through December 2012
|
1.00 | % | 1 | | 1 | 1 | | 1 | ||||||||||||||||||||
Total debt third parties
|
2,716 | (13 | ) | 2,703 | 2,742 | (10 | ) | 2,732 | ||||||||||||||||||||
Less: Short term borrowings
|
(61 | ) | | (61 | ) | (264 | ) | | (264 | ) | ||||||||||||||||||
Current portion of long term debt
|
(158 | ) | 9 | (149 | ) | (59 | ) | 8 | (51 | ) | ||||||||||||||||||
Long-term debt, net of current portion third
parties:
|
$ | 2,497 | $ | (4 | ) | $ | 2,493 | $ | 2,419 | $ | (2 | ) | $ | 2,417 | ||||||||||||||
Related party debt:
|
||||||||||||||||||||||||||||
Novelis Inc.
|
||||||||||||||||||||||||||||
Unsecured credit facility related party, due January
2015
|
13.00 | % | $ | | $ | | $ | | $ | 91 | $ | | $ | 91 | ||||||||||||||
(A) | Interest rates are as of December 31, 2009 and exclude the effects of accretion/amortization of fair value adjustments as a result of the Arrangement and the debt exchange completed in fiscal 2009. | |
(B) | Debt existing at the time of the Arrangement was recorded at fair value. Additional floating rate Term Loan with a face value of $220 million issued in March 2009 was recorded at a fair value of $165 million. Additional 11.5% Senior Notes with a face value of $185 million issued in August 2009 were recorded at fair value of $181 million (see 11.5% Senior Notes below). | |
(C) | Excludes the effect of related interest rate swaps and the effect of accretion of fair value. |
14
Table of Contents
As of December 31, 2009
|
Amount | |||
Within one year
|
$ | 158 | ||
2 years
|
16 | |||
3 years
|
16 | |||
4 years
|
16 | |||
5 years
|
1,111 | |||
Thereafter
|
1,338 | |||
Total
|
$ | 2,655 | ||
| all of our existing and future Canadian and U.S. restricted subsidiaries, | |
| certain of our existing foreign restricted subsidiaries and | |
| our other restricted subsidiaries that guarantee debt in the future under any credit facilities, provided that the borrower of such debt is our company or a Canadian or a U.S. subsidiary. |
15
Table of Contents
7. | SHARE-BASED COMPENSATION |
Three Months Ended |
Nine Months Ended |
|||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Novelis Long-Term Incentive Plan 2009
|
$ | 2 | $ | | $ | 3 | $ | | ||||||||
Novelis Long-Term Incentive Plan 2010
|
1 | | 2 | | ||||||||||||
Total compensation expense
|
$ | 3 | $ | | $ | 5 | $ | | ||||||||
16
Table of Contents
Weighted |
Weighted Average |
Aggregate |
||||||||||||||
Average |
Remaining |
Intrinsic |
||||||||||||||
Number of |
Exercise Price |
Contractual Term |
Value (USD |
|||||||||||||
2010 LTIP
|
SARs | (in Indian Rupees) | (In years) | in millions) | ||||||||||||
SARs outstanding as of March 31, 2009
|
| | | | ||||||||||||
Granted
|
14,075,603 | (A) | 87.61 | |||||||||||||
Exercised
|
| | ||||||||||||||
Forfeited/Cancelled
|
(489,061 | ) | 85.79 | |||||||||||||
Expired
|
| | ||||||||||||||
SARs outstanding as of December 31, 2009
|
13,586,542 | 87.68 | 6.48 | $ | 21 | |||||||||||
Weighted |
Weighted Average |
Aggregate |
||||||||||||||
Average |
Remaining |
Intrinsic |
||||||||||||||
Number of |
Exercise Price |
Contractual Term |
Value (USD |
|||||||||||||
2009 LTIP
|
SARs | (in Indian Rupees) | (In years) | in millions) | ||||||||||||
SARs outstanding as of March 31, 2009
|
20,606,906 | (A) | 60.50 | 6.22 | (B | ) | ||||||||||
Granted
|
| | ||||||||||||||
Exercised
|
| | ||||||||||||||
Forfeited/Cancelled
|
(9,209,152 | ) | 60.50 | |||||||||||||
Expired
|
| | ||||||||||||||
SARs outstanding as of December 31, 2009
|
11,397,754 | 60.50 | 5.46 | $ | 20 | |||||||||||
(A) | Represents total SARs approved by the Board of Directors for grant. As noted above, due to the performance criterion based on a future earnings target, the amount deemed granted for accounting purposes is limited to the individual tranches subject to an established earnings target, which includes the current and prior fiscal years. | |
(B) | The aggregate intrinsic value is zero as the market value of a share of Hindalco stock was less than the SAR exercise price. |
17
Table of Contents
2010 LTIP | 2009 LTIP | |||
Expected volatility
|
51.9 57.1% | 56.9 65.6% | ||
Weighted average volatility
|
54.9% | 61.4% | ||
Dividend yield
|
0.84% | 0.84% | ||
Risk-free interest rate
|
6.66 7.25% | 5.38 6.67% | ||
Expected life
|
3.5 5.0 years | 1.8 3.5 years |
8. | POSTRETIREMENT BENEFIT PLANS |
Pension Benefit Plans | ||||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Service cost
|
$ | 8 | $ | 11 | $ | 24 | $ | 32 | ||||||||
Interest cost
|
15 | 16 | 43 | 46 | ||||||||||||
Expected return on assets
|
(10 | ) | (14 | ) | (30 | ) | (40 | ) | ||||||||
Amortization (gains) losses
|
3 | | 9 | (1 | ) | |||||||||||
Curtailment/settlement (gains) losses
|
| | | 1 | ||||||||||||
Net periodic benefit cost
|
$ | 16 | $ | 13 | $ | 46 | $ | 38 | ||||||||
18
Table of Contents
Other Benefits | ||||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Service cost
|
$ | 2 | $ | 2 | $ | 5 | $ | 5 | ||||||||
Interest cost
|
2 | 3 | 8 | 8 | ||||||||||||
Amortization (gains) losses
|
| | | 1 | ||||||||||||
Curtailment/settlement (gains) losses
|
| | | (2 | ) | |||||||||||
Net periodic benefit cost
|
$ | 4 | $ | 5 | $ | 13 | $ | 12 | ||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Funded pension plans
|
$ | 10 | $ | 8 | $ | 22 | $ | 19 | ||||||||
Unfunded pension plans
|
3 | 4 | 11 | 12 | ||||||||||||
Savings and defined contribution pension plans
|
4 | 4 | 11 | 13 | ||||||||||||
Total contributions
|
$ | 17 | $ | 16 | $ | 44 | $ | 44 | ||||||||
9. | CURRENCY (GAINS) LOSSES |
Three Months Ended |
Nine Months Ended |
|||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Net (gain) loss on change in fair value of currency derivative
instruments(A)
|
$ | (15 | ) | $ | 48 | $ | (66 | ) | $ | 13 | ||||||
Net (gain) loss on remeasurement of monetary assets and
liabilities(B)
|
(2 | ) | 17 | (9 | ) | 73 | ||||||||||
$ | (17 | ) | $ | 65 | $ | (75 | ) | $ | 86 | |||||||
(A) | Included in (Gain) loss on change in fair value of derivative instruments, net. | |
(B) | Included in Other (income) expenses, net. |
19
Table of Contents
Nine Months Ended |
Year Ended |
|||||||
December 31, 2009 | March 31, 2009 | |||||||
Cumulative currency translation adjustment beginning
of period
|
$ | (78 | ) | $ | 85 | |||
Effect of changes in exchange rates
|
121 | (163 | ) | |||||
Cumulative currency translation adjustment end of
period
|
$ | 43 | $ | (78 | ) | |||
10. | FINANCIAL INSTRUMENTS AND COMMODITY CONTRACTS |
December 31, 2009 | ||||||||||||||||||||
Assets | Liabilities |
Net Fair Value |
||||||||||||||||||
Current | Noncurrent | Current | Noncurrent(A) | Assets/(Liabilities) | ||||||||||||||||
Derivatives designated as hedging instruments:
|
||||||||||||||||||||
Currency exchange contracts
|
$ | | $ | | $ | (1 | ) | $ | (26 | ) | $ | (27 | ) | |||||||
Interest rate swaps
|
| 1 | (9 | ) | | (8 | ) | |||||||||||||
Electricity swap
|
| | (5 | ) | (18 | ) | (23 | ) | ||||||||||||
Total derivatives designated as hedging instruments
|
| 1 | (15 | ) | (44 | ) | (58 | ) | ||||||||||||
Derivatives not designated as hedging instruments:
|
||||||||||||||||||||
Aluminum contracts
|
184 | 9 | (80 | ) | (1 | ) | 112 | |||||||||||||
Currency exchange contracts
|
51 | 2 | (16 | ) | (2 | ) | 35 | |||||||||||||
Energy contracts
|
| | (1 | ) | | (1 | ) | |||||||||||||
Total derivatives not designated as hedging instruments
|
235 | 11 | (97 | ) | (3 | ) | 146 | |||||||||||||
Total derivative fair value
|
$ | 235 | $ | 12 | $ | (112 | ) | $ | (47 | ) | $ | 88 | ||||||||
20
Table of Contents
March 31, 2009 | ||||||||||||||||||||
Assets | Liabilities |
Net Fair Value |
||||||||||||||||||
Current | Noncurrent | Current | Noncurrent(A) | Assets/(Liabilities) | ||||||||||||||||
Derivatives designated as hedging instruments:
|
||||||||||||||||||||
Currency exchange contracts
|
$ | | $ | | $ | | $ | (11 | ) | $ | (11 | ) | ||||||||
Interest rate swaps
|
| | (13 | ) | | (13 | ) | |||||||||||||
Electricity swap
|
| | (6 | ) | (12 | ) | (18 | ) | ||||||||||||
Total derivatives designated as hedging instruments
|
| | (19 | ) | (23 | ) | (42 | ) | ||||||||||||
Derivatives not designated as hedging instruments:
|
||||||||||||||||||||
Aluminum contracts
|
99 | 41 | (532 | ) | (13 | ) | (405 | ) | ||||||||||||
Currency exchange contracts
|
20 | 31 | (77 | ) | (12 | ) | (38 | ) | ||||||||||||
Energy contracts
|
| | (12 | ) | | (12 | ) | |||||||||||||
Total derivatives not designated as hedging instruments
|
119 | 72 | (621 | ) | (25 | ) | (455 | ) | ||||||||||||
Total derivative fair value
|
$ | 119 | $ | 72 | $ | (640 | ) | $ | (48 | ) | $ | (497 | ) | |||||||
(A) | The noncurrent portions of derivative liabilities are included in Other long-term liabilities in the accompanying condensed consolidated balance sheets. |
21
Table of Contents
Amount of Gain or (Loss) |
||||||||||||||||||||||||
Amount of Gain or (Loss) |
Recognized in Income on |
|||||||||||||||||||||||
Amount of Gain or (Loss) |
Reclassified from |
Derivative (Ineffective Portion |
||||||||||||||||||||||
Recognized in OCI on Derivative |
AOCI into Income |
and Amount Excluded from |
||||||||||||||||||||||
(Effective Portion) | (Effective Portion) | Effectiveness Testing) | ||||||||||||||||||||||
Three Months |
Three Months |
Three Months |
Three Months |
Three Months |
Three Months |
|||||||||||||||||||
Ended |
Ended |
Ended |
Ended |
Ended |
Ended |
|||||||||||||||||||
December 31, |
December 31, |
December 31, |
December 31, |
December 31, |
December 31, |
|||||||||||||||||||
2009 | 2008 | 2009 | 2008 | 2009 | 2008 | |||||||||||||||||||
Electricity swap
|
$ | | $ | (16 | ) | $ | 1 | $ | 2 | $ | | $ | 2 | |||||||||||
Interest rate swaps
|
$ | 4 | $ | (9 | ) | $ | | $ | | $ | | $ | |
Amount of Gain or (Loss) |
||||||||||||||||||||||||
Amount of Gain or (Loss) |
Recognized in Income on |
|||||||||||||||||||||||
Amount of Gain or (Loss) |
Reclassified from |
Derivative (Ineffective Portion |
||||||||||||||||||||||
Recognized in OCI on Derivative |
AOCI into Income |
and Amount Excluded from |
||||||||||||||||||||||
(Effective Portion) | (Effective Portion) | Effectiveness Testing) | ||||||||||||||||||||||
Nine Months |
Nine Months |
Nine Months |
Nine Months |
Nine Months |
Nine Months |
|||||||||||||||||||
Ended |
Ended |
Ended |
Ended |
Ended |
Ended |
|||||||||||||||||||
December 31, |
December 31, |
December 31, |
December 31, |
December 31, |
December 31, |
|||||||||||||||||||
2009 | 2008 | 2009 | 2008 | 2009 | 2008 | |||||||||||||||||||
Electricity swap
|
$ | (3 | ) | $ | (16 | ) | $ | 3 | $ | 10 | $ | 2 | $ | 2 | ||||||||||
Interest rate swaps
|
$ | 5 | $ | 2 | $ | | $ | | $ | | $ | |
22
Table of Contents
Three Months Ended |
Nine Months Ended |
|||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Derivative Instruments Not Designated as Hedges
|
||||||||||||||||
Aluminum contracts
|
$ | 26 | $ | (340 | ) | $ | 123 | $ | (495 | ) | ||||||
Currency exchange contracts
|
15 | (48 | ) | 66 | (13 | ) | ||||||||||
Energy contracts
|
(2 | ) | (12 | ) | (2 | ) | (21 | ) | ||||||||
Gain (loss) recognized
|
39 | (400 | ) | 187 | (529 | ) | ||||||||||
Derivative Instruments Designated as Cash Flow Hedges
|
||||||||||||||||
Electricity swap
|
1 | 4 | 5 | 13 | ||||||||||||
Gain (loss) on change in fair value of derivative instruments,
net
|
$ | 40 | $ | (396 | ) | $ | 192 | $ | (516 | ) | ||||||
11. | FAIR VALUE MEASUREMENTS |
23
Table of Contents
December 31, 2009 | ||||||||||||||||
Fair Value Measurements Using | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets Derivative instruments
|
$ | | $ | 247 | $ | | $ | 247 | ||||||||
Liabilities Derivative instruments
|
$ | | $ | (132 | ) | $ | (27 | ) | $ | (159 | ) |
March 31, 2009 | ||||||||||||||||
Fair Value Measurements Using | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets Derivative instruments
|
$ | | $ | 191 | $ | | $ | 191 | ||||||||
Liabilities Derivative instruments
|
$ | | $ | (644 | ) | $ | (44 | ) | $ | (688 | ) |
24
Table of Contents
Level 3 |
||||
Derivative |
||||
Instruments(A) | ||||
Balance as of March 31, 2009
|
$ | (44 | ) | |
Net realized/unrealized gains included in earnings(B)
|
17 | |||
Net realized/unrealized gains included in Other comprehensive
income(C)
|
(11 | ) | ||
Net purchases, issuances and settlements
|
11 | |||
Net transfers in and/or (out) of Level 3
|
| |||
Balance as of December 31, 2009
|
$ | (27 | ) | |
(A) | Represents derivative assets net of derivative liabilities. | |
(B) | Included in (Gain) loss on change in fair value of derivative instruments, net. | |
(C) | Included in Change in fair value of effective portion of hedges, net. |
December 31, 2009 | March 31, 2009 | |||||||||||||||
Carrying |
Fair |
Carrying |
Fair |
|||||||||||||
Value | Value | Value | Value | |||||||||||||
Assets
|
||||||||||||||||
Long-term receivables from related parties
|
$ | 23 | $ | 21 | $ | 23 | $ | 21 | ||||||||
Liabilities
|
||||||||||||||||
Long-term debt
|
||||||||||||||||
Novelis Inc.
|
||||||||||||||||
11.50% Senior Notes, due February 2015
|
181 | 206 | | | ||||||||||||
7.25% Senior Notes, due February 2015
|
1,166 | 1,073 | 1,171 | 454 | ||||||||||||
Floating rate Term Loan facility, due July 2014
|
293 | 237 | 295 | 200 | ||||||||||||
Unsecured credit facility related party, due January
2015
|
| | 91 | 93 | ||||||||||||
Novelis Corporation
|
||||||||||||||||
Floating rate Term Loan facility, due July 2014
|
813 | 696 | 813 | 584 | ||||||||||||
Novelis Switzerland S.A.
|
||||||||||||||||
Capital lease obligation, due December 2019 (CHF 50 million)
|
44 | 39 | 42 | 36 | ||||||||||||
Capital lease obligation, due August 2011 (CHF 2 million)
|
2 | 1 | 2 | 2 | ||||||||||||
Novelis Korea Limited
|
||||||||||||||||
Bank loan, due October 2010
|
100 | 95 | 100 | 83 | ||||||||||||
Bank loan, due February 2010 (KRW 50 billion)
|
42 | 43 | 37 | 33 | ||||||||||||
Bank loan, due May 2009 (KRW 10 billion)
|
| | 7 | 7 | ||||||||||||
Other
|
||||||||||||||||
Other debt, due December 2011 through December 2012
|
1 | 1 | 1 | 1 | ||||||||||||
Financial commitments
|
||||||||||||||||
Letters of credit
|
| 196 | | 134 |
25
Table of Contents
12. | OTHER (INCOME) EXPENSES, NET |
Three Months Ended |
Nine Months Ended |
|||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Exchange (gains) losses, net
|
$ | (2 | ) | $ | 17 | $ | (9 | ) | $ | 73 | ||||||
Gains on the reversal of accrued legal claims
|
(3 | ) | | (3 | ) | (26 | ) | |||||||||
Loss on disposal of property, plant and equipment, net
|
1 | | | | ||||||||||||
Gain on tax litigation settlement in Brazil
|
| | (6 | ) | | |||||||||||
Other, net
|
2 | 3 | (3 | ) | 6 | |||||||||||
Other (income) expenses, net
|
$ | (2 | ) | $ | 20 | $ | (21 | ) | $ | 53 | ||||||
13. | INCOME TAXES |
Three Months Ended |
Nine Months Ended |
|||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Pre-tax income (loss) before equity in net (income) loss of
non-consolidated affiliates and noncontrolling interests
|
$ | 121 | $ | (1,853 | ) | $ | 715 | $ | (2,064 | ) | ||||||
Canadian statutory tax rate
|
30 | % | 31 | % | 30 | % | 31 | % | ||||||||
Provision at the Canadian statutory rate
|
37 | (575 | ) | 215 | (640 | ) | ||||||||||
Increase (decrease) for taxes on income (loss) resulting from:
|
||||||||||||||||
Non-deductible goodwill impairment
|
| 415 | | 415 | ||||||||||||
Exchange translation items
|
(2 | ) | (64 | ) | 18 | (77 | ) | |||||||||
Exchange remeasurement of deferred income taxes
|
5 | (30 | ) | 41 | (51 | ) | ||||||||||
Change in valuation allowances
|
3 | 23 | 6 | 41 | ||||||||||||
Expense (income) items not subject to tax
|
(2 | ) | 22 | (6 | ) | 28 | ||||||||||
Enacted statutory tax rate changes
|
| 1 | | 3 | ||||||||||||
Tax rate differences on foreign earnings
|
2 | 11 | (7 | ) | (57 | ) | ||||||||||
Uncertain tax positions, net
|
6 | 1 | (19 | ) | 2 | |||||||||||
Other net
|
(1 | ) | | (1 | ) | 7 | ||||||||||
Income tax provision (benefit)
|
$ | 48 | $ | (196 | ) | $ | 247 | $ | (329 | ) | ||||||
Effective tax rate
|
40 | % | 11 | % | 35 | % | 16 | % | ||||||||
26
Table of Contents
14. | COMMITMENTS AND CONTINGENCIES |
27
Table of Contents
28
Table of Contents
Maximum |
Liability |
|||||||
Potential |
Carrying |
|||||||
Type of Entity
|
Future Payment | Value | ||||||
Wholly-owned subsidiaries
|
$ | 43 | $ | 6 | ||||
Norf
|
$ | 14 | $ | |
15. | SEGMENT, MAJOR CUSTOMER AND MAJOR SUPPLIER INFORMATION |
29
Table of Contents
North |
South |
Corporate |
||||||||||||||||||||||||||
Total Assets
|
America | Europe | Asia | America | and Other | Eliminations | Total | |||||||||||||||||||||
December 31, 2009
|
$ | 2,649 | $ | 2,984 | $ | 854 | $ | 1,379 | $ | 63 | $ | (327 | ) | $ | 7,602 | |||||||||||||
March 31, 2009
|
$ | 2,973 | $ | 2,750 | $ | 732 | $ | 1,296 | $ | 50 | $ | (234 | ) | $ | 7,567 |
Selected Operating Results |
North |
South |
Corporate |
|||||||||||||||||||||||||
Three Months Ended December 31, 2009
|
America | Europe | Asia | America | and Other | Eliminations | Total | |||||||||||||||||||||
Net sales
|
$ | 786 | $ | 725 | $ | 390 | $ | 235 | $ | | $ | (24 | ) | $ | 2,112 | |||||||||||||
Depreciation and amortization
|
41 | 23 | 12 | 14 | 1 | 2 | 93 | |||||||||||||||||||||
Capital expenditures
|
12 | 20 | 5 | 3 | | (12 | ) | 28 |
Selected Operating Results |
North |
South |
Corporate |
|||||||||||||||||||||||||
Three Months Ended December 31, 2008
|
America | Europe | Asia | America | and Other | Eliminations | Total | |||||||||||||||||||||
Net sales
|
$ | 898 | $ | 733 | $ | 344 | $ | 205 | $ | | $ | (4 | ) | $ | 2,176 | |||||||||||||
Depreciation and amortization
|
41 | 54 | 12 | 17 | 1 | (18 | ) | 107 | ||||||||||||||||||||
Capital expenditures
|
13 | 21 | 5 | 6 | | (8 | ) | 37 |
Selected Operating Results |
North |
South |
Corporate |
|||||||||||||||||||||||||
Nine Months Ended December 31, 2009
|
America | Europe | Asia | America | and Other | Eliminations | Total | |||||||||||||||||||||
Net sales
|
$ | 2,375 | $ | 2,125 | $ | 1,098 | $ | 691 | $ | | $ | (36 | ) | $ | 6,253 | |||||||||||||
Depreciation and amortization
|
121 | 117 | 35 | 47 | 3 | (38 | ) | 285 | ||||||||||||||||||||
Capital expenditures
|
25 | 42 | 10 | 15 | | (18 | ) | 74 |
Selected Operating Results |
North |
South |
Corporate |
|||||||||||||||||||||||||
Nine Months Ended December 31, 2008
|
America | Europe | Asia | America | and Other | Eliminations | Total | |||||||||||||||||||||
Net sales
|
$ | 3,092 | $ | 3,048 | $ | 1,312 | $ | 800 | $ | | $ | (14 | ) | $ | 8,238 | |||||||||||||
Depreciation and amortization
|
124 | 171 | 40 | 53 | 2 | (60 | ) | 330 | ||||||||||||||||||||
Capital expenditures
|
30 | 57 | 16 | 21 | 1 | (18 | ) | 107 |
30
Table of Contents
Three Months Ended |
Nine Months Ended |
|||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
North America
|
$ | 99 | $ | 1 | $ | 231 | $ | 45 | ||||||||
Europe
|
60 | 48 | 153 | 221 | ||||||||||||
Asia
|
39 | 55 | 125 | 83 | ||||||||||||
South America
|
26 | 35 | 73 | 130 | ||||||||||||
Corporate and other(A)
|
(25 | ) | (11 | ) | (59 | ) | (44 | ) | ||||||||
Depreciation and amortization
|
(93 | ) | (107 | ) | (285 | ) | (330 | ) | ||||||||
Interest expense and amortization of debt issuance costs
|
(44 | ) | (47 | ) | (131 | ) | (138 | ) | ||||||||
Interest income
|
2 | 3 | 8 | 13 | ||||||||||||
Unrealized gains (losses) on change in fair value of derivative
instruments, net(B)
|
62 | (463 | ) | 615 | (664 | ) | ||||||||||
Adjustment to eliminate proportional consolidation
|
2 | (174 | ) | (31 | ) | (210 | ) | |||||||||
Impairment of goodwill
|
| (1,340 | ) | | (1,340 | ) | ||||||||||
Restructuring charges, net
|
(1 | ) | (15 | ) | (7 | ) | (14 | ) | ||||||||
Other costs, net
|
2 | (4 | ) | 11 | 18 | |||||||||||
Income (loss) before income taxes
|
129 | (2,019 | ) | 703 | (2,230 | ) | ||||||||||
Income tax provision (benefit)
|
48 | (196 | ) | 247 | (329 | ) | ||||||||||
Net income (loss)
|
81 | (1,823 | ) | 456 | (1,901 | ) | ||||||||||
Net income attributable to noncontrolling interests
|
13 | (9 | ) | 50 | (7 | ) | ||||||||||
Net income (loss) attributable to our common shareholder
|
$ | 68 | $ | (1,814 | ) | $ | 406 | $ | (1,894 | ) | ||||||
(A) | Corporate and other includes functions that are managed directly from our corporate office, which focuses on strategy development and oversees governance, policy, legal compliance, human resources and finance matters. These expenses have not been allocated to the regions. It also includes realized gains (losses) on corporate derivative instruments. | |
(B) | Unrealized gains (losses) on change in fair value of derivative instruments, net represents the portion of gains (losses) that were not settled in cash during the period. Total realized and unrealized gains (losses) are shown in the table below and are included in the aggregate each period in (Gain) loss on change in fair value of derivative instruments, net on our condensed consolidated statements of operations. |
31
Table of Contents
Three Months Ended |
Nine Months Ended |
|||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Realized gains (losses) included in segment income
|
$ | (22 | ) | $ | 63 | $ | (424 | ) | $ | 144 | ||||||
Realized gains (losses) on corporate derivative instruments
|
| 4 | 1 | 4 | ||||||||||||
Unrealized gains (losses)
|
62 | (463 | ) | 615 | (664 | ) | ||||||||||
Gains (losses) on change in fair value of derivative
instruments, net
|
$ | 40 | $ | (396 | ) | $ | 192 | $ | (516 | ) | ||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Rexam
|
16 | % | 18 | % | 17 | % | 16 | % | ||||||||
Anheuser-Busch
|
10 | % | 9 | % | 11 | % | 7 | % |
Three Months Ended |
Nine Months Ended |
|||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Purchases from Rio Tinto Alcan as a percentage of total metal
purchases in (kt)
|
38 | % | 40 | % | 41 | % | 36 | % |
16. | SUPPLEMENTAL INFORMATION |
December 31, |
March 31, |
|||||||
2009 | 2009 | |||||||
Currency translation adjustment
|
$ | 43 | $ | (62 | ) | |||
Fair value of effective portion of hedges
|
(20 | ) | (19 | ) | ||||
Pension and other benefits
|
(59 | ) | (67 | ) | ||||
Accumulated other comprehensive loss
|
$ | (36 | ) | $ | (148 | ) | ||
Nine Months Ended |
||||||||
December 31, | ||||||||
2009 | 2008 | |||||||
Interest paid
|
$ | 92 | $ | 101 | ||||
Income taxes paid
|
$ | 24 | $ | 87 |
32
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17. | SUPPLEMENTAL GUARANTOR INFORMATION |
33
Table of Contents
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
(In millions)
Three Months Ended December 31, 2009 | ||||||||||||||||||||
Non- |
||||||||||||||||||||
Parent | Guarantors | Guarantors | Eliminations | Consolidated | ||||||||||||||||
Net sales
|
$ | 212 | $ | 1,659 | $ | 623 | $ | (382 | ) | $ | 2,112 | |||||||||
Cost of goods sold (exclusive of depreciation and amortization
shown below)
|
191 | 1,431 | 548 | (382 | ) | 1,788 | ||||||||||||||
Selling, general and administrative expenses
|
16 | 68 | 15 | | 99 | |||||||||||||||
Depreciation and amortization
|
| 71 | 22 | | 93 | |||||||||||||||
Research and development expenses
|
6 | 3 | 1 | | 10 | |||||||||||||||
Interest expense and amortization of debt issuance costs
|
29 | 30 | 2 | (17 | ) | 44 | ||||||||||||||
Interest income
|
(15 | ) | (3 | ) | (1 | ) | 17 | (2 | ) | |||||||||||
(Gain) loss on change in fair value of derivative instruments,
net
|
(2 | ) | (35 | ) | (3 | ) | | (40 | ) | |||||||||||
Restructuring charges, net
|
| 1 | | | 1 | |||||||||||||||
Equity in net (income) loss of non-consolidated affiliates
|
(75 | ) | (8 | ) | | 75 | (8 | ) | ||||||||||||
Other (income) expenses, net
|
(9 | ) | 12 | (5 | ) | | (2 | ) | ||||||||||||
141 | 1,570 | 579 | (307 | ) | 1,983 | |||||||||||||||
Income (loss) before income taxes
|
71 | 89 | 44 | (75 | ) | 129 | ||||||||||||||
Income tax provision (benefit)
|
3 | 39 | 6 | | 48 | |||||||||||||||
Net income (loss)
|
68 | 50 | 38 | (75 | ) | 81 | ||||||||||||||
Net income (loss) attributable to noncontrolling interests
|
| | 13 | | 13 | |||||||||||||||
Net income (loss) attributable to our common shareholder
|
$ | 68 | $ | 50 | $ | 25 | $ | (75 | ) | $ | 68 | |||||||||
34
Table of Contents
Three Months Ended December 31, 2008 | ||||||||||||||||||||
Non- |
||||||||||||||||||||
Parent | Guarantors | Guarantors | Eliminations | Consolidated | ||||||||||||||||
Net sales
|
$ | 254 | $ | 1,751 | $ | 601 | $ | (430 | ) | $ | 2,176 | |||||||||
Cost of goods sold (exclusive of depreciation and amortization
shown below)
|
252 | 1,648 | 553 | (430 | ) | 2,023 | ||||||||||||||
Selling, general and administrative expenses
|
(8 | ) | 66 | 15 | | 73 | ||||||||||||||
Depreciation and amortization
|
6 | 80 | 21 | | 107 | |||||||||||||||
Research and development expenses
|
8 | 2 | 1 | | 11 | |||||||||||||||
Interest expense and amortization of debt issuance costs
|
29 | 34 | 5 | (21 | ) | 47 | ||||||||||||||
Interest income
|
(20 | ) | (3 | ) | (1 | ) | 21 | (3 | ) | |||||||||||
(Gain) loss on change in fair value of derivative instruments,
net
|
1 | 346 | 49 | | 396 | |||||||||||||||
Impairment of goodwill
|
| 1,340 | | | 1,340 | |||||||||||||||
Restructuring charges, net
|
6 | 8 | 1 | | 15 | |||||||||||||||
Equity in net (income) loss of non-consolidated affiliates
|
1,807 | 166 | | (1,807 | ) | 166 | ||||||||||||||
Other (income) expenses, net
|
9 | (18 | ) | 29 | | 20 | ||||||||||||||
2,090 | 3,669 | 673 | (2,237 | ) | 4,195 | |||||||||||||||
Income (loss) before income taxes
|
(1,836 | ) | (1,918 | ) | (72 | ) | 1,807 | (2,019 | ) | |||||||||||
Income tax provision (benefit)
|
(22 | ) | (167 | ) | (7 | ) | | (196 | ) | |||||||||||
Net income (loss)
|
(1,814 | ) | (1,751 | ) | (65 | ) | 1,807 | (1,823 | ) | |||||||||||
Net income (loss) attributable to noncontrolling interests
|
| | (9 | ) | | (9 | ) | |||||||||||||
Net income (loss) attributable to our common shareholder
|
$ | (1,814 | ) | $ | (1,751 | ) | $ | (56 | ) | $ | 1,807 | $ | (1,814 | ) | ||||||
35
Table of Contents
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
(In millions)
Nine Months Ended December 31, 2009 | ||||||||||||||||||||
Non- |
||||||||||||||||||||
Parent | Guarantors | Guarantors | Eliminations | Consolidated | ||||||||||||||||
Net sales
|
$ | 598 | $ | 4,936 | $ | 1,780 | $ | (1,061 | ) | $ | 6,253 | |||||||||
Cost of goods sold (exclusive of depreciation and amortization
shown below)
|
540 | 4,053 | 1,517 | (1,061 | ) | 5,049 | ||||||||||||||
Selling, general and administrative expenses
|
35 | 183 | 42 | | 260 | |||||||||||||||
Depreciation and amortization
|
2 | 216 | 67 | | 285 | |||||||||||||||
Research and development expenses
|
17 | 8 | 2 | | 27 | |||||||||||||||
Interest expense and amortization of debt issuance costs
|
84 | 89 | 7 | (49 | ) | 131 | ||||||||||||||
Interest income
|
(47 | ) | (8 | ) | (2 | ) | 49 | (8 | ) | |||||||||||
(Gain) loss on change in fair value of derivative instruments,
net
|
(5 | ) | (167 | ) | (20 | ) | | (192 | ) | |||||||||||
Restructuring charges, net
|
| 5 | 2 | | 7 | |||||||||||||||
Equity in net (income) loss of non-consolidated affiliates
|
(380 | ) | 12 | | 380 | 12 | ||||||||||||||
Other (income) expenses, net
|
(24 | ) | 36 | (33 | ) | | (21 | ) | ||||||||||||
222 | 4,427 | 1,582 | (681 | ) | 5,550 | |||||||||||||||
Income (loss) before income taxes
|
376 | 509 | 198 | (380 | ) | 703 | ||||||||||||||
Income tax provision (benefit)
|
(30 | ) | 243 | 34 | | 247 | ||||||||||||||
Net income (loss)
|
406 | 266 | 164 | (380 | ) | 456 | ||||||||||||||
Net income (loss) attributable to noncontrolling interests
|
| | 50 | | 50 | |||||||||||||||
Net income (loss) attributable to our common shareholder
|
$ | 406 | $ | 266 | $ | 114 | $ | (380 | ) | $ | 406 | |||||||||
36
Table of Contents
Nine Months Ended December 31, 2008 | ||||||||||||||||||||
Non- |
||||||||||||||||||||
Parent | Guarantors | Guarantors | Eliminations | Consolidated | ||||||||||||||||
Net sales
|
$ | 1,038 | $ | 6,815 | $ | 2,204 | $ | (1,819 | ) | $ | 8,238 | |||||||||
Cost of goods sold (exclusive of depreciation and amortization
shown below)
|
1,023 | 6,389 | 2,052 | (1,819 | ) | 7,645 | ||||||||||||||
Selling, general and administrative expenses
|
(2 | ) | 190 | 58 | | 246 | ||||||||||||||
Depreciation and amortization
|
18 | 246 | 66 | | 330 | |||||||||||||||
Research and development expenses
|
23 | 8 | 2 | | 33 | |||||||||||||||
Interest expense and amortization of debt issuance costs
|
86 | 105 | 20 | (73 | ) | 138 | ||||||||||||||
Interest income
|
(63 | ) | (14 | ) | (9 | ) | 73 | (13 | ) | |||||||||||
(Gain) loss on change in fair value of derivative instruments,
net
|
4 | 479 | 33 | | 516 | |||||||||||||||
Impairment of goodwill
|
| 1,340 | | | 1,340 | |||||||||||||||
Restructuring charges, net
|
5 | 8 | 1 | | 14 | |||||||||||||||
Equity in net (income) loss of non-consolidated affiliates
|
1,857 | 166 | | (1,857 | ) | 166 | ||||||||||||||
Other (income) expenses, net
|
1 | (25 | ) | 77 | | 53 | ||||||||||||||
2,952 | 8,892 | 2,300 | (3,676 | ) | 10,648 | |||||||||||||||
Income (loss) before income taxes
|
(1,914 | ) | (2,077 | ) | (96 | ) | 1,857 | (2,230 | ) | |||||||||||
Income tax provision (benefit)
|
(20 | ) | (298 | ) | (11 | ) | | (329 | ) | |||||||||||
Net income (loss)
|
(1,894 | ) | (1,779 | ) | (85 | ) | 1,857 | (1,901 | ) | |||||||||||
Net income (loss) attributable to noncontrolling interests
|
| | (7 | ) | | (7 | ) | |||||||||||||
Net income (loss) attributable to our common shareholder
|
$ | (1,894 | ) | $ | (1,779 | ) | $ | (78 | ) | $ | 1,857 | $ | (1,894 | ) | ||||||
37
Table of Contents
CONDENSED CONSOLIDATING BALANCE SHEET
(In millions)
December 31, 2009 | ||||||||||||||||||||
Non- |
||||||||||||||||||||
Parent | Guarantors | Guarantors | Eliminations | Consolidated | ||||||||||||||||
ASSETS
|
||||||||||||||||||||
Current assets
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 26 | $ | 151 | $ | 75 | $ | | $ | 252 | ||||||||||
Accounts receivable, net of allowances
|
||||||||||||||||||||
third parties
|
22 | 655 | 321 | | 998 | |||||||||||||||
related parties
|
660 | 207 | 30 | (886 | ) | 11 | ||||||||||||||
Inventories
|
44 | 741 | 274 | | 1,059 | |||||||||||||||
Prepaid expenses and other current assets
|
4 | 29 | 12 | | 45 | |||||||||||||||
Fair value of derivative instruments
|
4 | 202 | 42 | (13 | ) | 235 | ||||||||||||||
Deferred income tax assets
|
| 12 | 5 | | 17 | |||||||||||||||
Total current assets
|
760 | 1,997 | 759 | (899 | ) | 2,617 | ||||||||||||||
Property, plant and equipment, net
|
140 | 2,049 | 525 | | 2,714 | |||||||||||||||
Goodwill
|
| 600 | 11 | | 611 | |||||||||||||||
Intangible assets, net
|
| 760 | 8 | | 768 | |||||||||||||||
Investments in and advances to non-consolidated affiliates
|
2,024 | 757 | | (2,024 | ) | 757 | ||||||||||||||
Fair value of derivative instruments, net of current portion
|
1 | 11 | 3 | (3 | ) | 12 | ||||||||||||||
Deferred income tax assets
|
1 | 2 | 1 | | 4 | |||||||||||||||
Other long-term assets
|
1,022 | 208 | 77 | (1,188 | ) | 119 | ||||||||||||||
Total assets
|
$ | 3,948 | $ | 6,384 | $ | 1,384 | $ | (4,114 | ) | $ | 7,602 | |||||||||
LIABILITIES AND SHAREHOLDERS EQUITY | ||||||||||||||||||||
Current liabilities
|
||||||||||||||||||||
Current portion of long-term debt
|
$ | 3 | $ | 3 | $ | 143 | $ | | $ | 149 | ||||||||||
Short-term borrowings
|
||||||||||||||||||||
third parties
|
| 48 | 13 | | 61 | |||||||||||||||
related parties
|
13 | 462 | 19 | (494 | ) | | ||||||||||||||
Accounts payable
|
||||||||||||||||||||
third parties
|
36 | 498 | 284 | | 818 | |||||||||||||||
related parties
|
51 | 272 | 112 | (391 | ) | 44 | ||||||||||||||
Fair value of derivative instruments
|
8 | 96 | 21 | (13 | ) | 112 | ||||||||||||||
Accrued expenses and other current liabilities
|
72 | 266 | 88 | (1 | ) | 425 | ||||||||||||||
Deferred income tax liabilities
|
| 39 | | | 39 | |||||||||||||||
Total current liabilities
|
183 | 1,684 | 680 | (899 | ) | 1,648 | ||||||||||||||
Long-term debt, net of current portion
|
||||||||||||||||||||
third parties
|
1,636 | 856 | 1 | | 2,493 | |||||||||||||||
related parties
|
118 | 970 | 100 | (1,188 | ) | | ||||||||||||||
Deferred income tax liabilities
|
| 487 | 14 | | 501 | |||||||||||||||
Accrued postretirement benefits
|
32 | 372 | 118 | | 522 | |||||||||||||||
Other long-term liabilities
|
42 | 314 | 5 | (3 | ) | 358 | ||||||||||||||
Total liabilities
|
2,011 | 4,683 | 918 | (2,090 | ) | 5,522 | ||||||||||||||
Commitments and contingencies
|
||||||||||||||||||||
Shareholders equity
|
||||||||||||||||||||
Common stock
|
| | | | | |||||||||||||||
Additional paid-in capital
|
3,497 | | | | 3,497 | |||||||||||||||
Retained earnings/(accumulated deficit)/owners net
investment
|
(1,524 | ) | 1,731 | 425 | (2,156 | ) | (1,524 | ) | ||||||||||||
Accumulated other comprehensive income (loss)
|
(36 | ) | (30 | ) | (102 | ) | 132 | (36 | ) | |||||||||||
Total Novelis shareholders equity
|
1,937 | 1,701 | 323 | (2,024 | ) | 1,937 | ||||||||||||||
Noncontrolling interests
|
| | 143 | | 143 | |||||||||||||||
Total equity
|
1,937 | 1,701 | 466 | (2,024 | ) | 2,080 | ||||||||||||||
Total liabilities and shareholders equity
|
$ | 3,948 | $ | 6,384 | $ | 1,384 | $ | (4,114 | ) | $ | 7,602 | |||||||||
38
Table of Contents
CONDENSED CONSOLIDATING BALANCE SHEET
(In millions)
March 31, 2009 | ||||||||||||||||||||
Non- |
||||||||||||||||||||
Parent | Guarantors | Guarantors | Eliminations | Consolidated | ||||||||||||||||
ASSETS
|
||||||||||||||||||||
Current assets
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 3 | $ | 175 | $ | 70 | $ | | $ | 248 | ||||||||||
Accounts receivable, net of allowances
|
||||||||||||||||||||
third parties
|
21 | 761 | 267 | | 1,049 | |||||||||||||||
related parties
|
411 | 183 | 32 | (601 | ) | 25 | ||||||||||||||
Inventories
|
31 | 523 | 239 | | 793 | |||||||||||||||
Prepaid expenses and other current assets
|
4 | 31 | 16 | | 51 | |||||||||||||||
Fair value of derivative instruments
|
| 145 | 7 | (33 | ) | 119 | ||||||||||||||
Deferred income tax assets
|
| 192 | 24 | | 216 | |||||||||||||||
Total current assets
|
470 | 2,010 | 655 | (634 | ) | 2,501 | ||||||||||||||
Property, plant and equipment, net
|
162 | 2,146 | 491 | | 2,799 | |||||||||||||||
Goodwill
|
| 570 | 12 | | 582 | |||||||||||||||
Intangible assets, net
|
| 787 | | | 787 | |||||||||||||||
Investments in and advances to non-consolidated affiliates
|
1,647 | 719 | | (1,647 | ) | 719 | ||||||||||||||
Fair value of derivative instruments, net of current portion
|
| 46 | 28 | (2 | ) | 72 | ||||||||||||||
Deferred income tax assets
|
1 | 3 | | | 4 | |||||||||||||||
Other long-term assets
|
1,028 | 207 | 96 | (1,228 | ) | 103 | ||||||||||||||
Total assets
|
$ | 3,308 | $ | 6,488 | $ | 1,282 | $ | (3,511 | ) | $ | 7,567 | |||||||||
LIABILITIES AND SHAREHOLDERS EQUITY | ||||||||||||||||||||
Current liabilities
|
||||||||||||||||||||
Current portion of long-term debt
|
$ | 3 | $ | 4 | $ | 44 | $ | | $ | 51 | ||||||||||
Short-term borrowings
|
||||||||||||||||||||
third parties
|
| 231 | 33 | | 264 | |||||||||||||||
related parties
|
7 | 330 | 22 | (359 | ) | | ||||||||||||||
Accounts payable
|
||||||||||||||||||||
third parties
|
33 | 458 | 234 | | 725 | |||||||||||||||
related parties
|
41 | 157 | 90 | (240 | ) | 48 | ||||||||||||||
Fair value of derivative instruments
|
7 | 540 | 126 | (33 | ) | 640 | ||||||||||||||
Accrued expenses and other current liabilities
|
34 | 395 | 90 | (3 | ) | 516 | ||||||||||||||
Deferred income tax liabilities
|
| | | | | |||||||||||||||
Total current liabilities
|
125 | 2,115 | 639 | (635 | ) | 2,244 | ||||||||||||||
Long-term debt, net of current portion
|
||||||||||||||||||||
third parties
|
1,464 | 852 | 101 | | 2,417 | |||||||||||||||
related parties
|
223 | 976 | 120 | (1,228 | ) | 91 | ||||||||||||||
Deferred income tax liabilities
|
| 459 | 10 | | 469 | |||||||||||||||
Accrued postretirement benefits
|
27 | 346 | 122 | | 495 | |||||||||||||||
Other long-term liabilities
|
50 | 288 | 5 | (1 | ) | 342 | ||||||||||||||
Total liabilities
|
1,889 | 5,036 | 997 | (1,864 | ) | 6,058 | ||||||||||||||
Commitments and contingencies
|
||||||||||||||||||||
Shareholders equity
|
||||||||||||||||||||
Common stock
|
| | | | | |||||||||||||||
Additional paid-in capital
|
3,497 | | | | 3,497 | |||||||||||||||
Retained earnings/(accumulated deficit)/owners net
investment
|
(1,930 | ) | 1,533 | 325 | (1,858 | ) | (1,930 | ) | ||||||||||||
Accumulated other comprehensive income (loss)
|
(148 | ) | (81 | ) | (130 | ) | 211 | (148 | ) | |||||||||||
Total Novelis shareholders equity
|
1,419 | 1,452 | 195 | (1,647 | ) | 1,419 | ||||||||||||||
Noncontrolling interests
|
| | 90 | | 90 | |||||||||||||||
Total equity
|
1,419 | 1,452 | 285 | (1,647 | ) | 1,509 | ||||||||||||||
Total liabilities and shareholders equity
|
$ | 3,308 | $ | 6,488 | $ | 1,282 | $ | (3,511 | ) | $ | 7,567 | |||||||||
39
Table of Contents
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
(In millions)
Nine Months Ended December 31, 2009 | ||||||||||||||||||||
Non- |
||||||||||||||||||||
Parent | Guarantors | Guarantors | Eliminations | Consolidated | ||||||||||||||||
OPERATING ACTIVITIES
|
||||||||||||||||||||
Net cash provided by (used in) operating activities
|
$ | 9 | $ | 449 | $ | 172 | $ | | $ | 630 | ||||||||||
INVESTING ACTIVITIES
|
||||||||||||||||||||
Capital expenditures
|
(3 | ) | (52 | ) | (19 | ) | | (74 | ) | |||||||||||
Proceeds from sales of property, plant and equipment
|
| | 4 | | 4 | |||||||||||||||
Changes to investment in and advances to non-consolidated
affiliates
|
| 3 | | | 3 | |||||||||||||||
Proceeds from loans receivable, net related parties
|
| 15 | | | 15 | |||||||||||||||
Net proceeds from settlement of derivative instruments
|
(2 | ) | (327 | ) | (103 | ) | | (432 | ) | |||||||||||
Net cash provided by (used in) investing activities
|
(5 | ) | (361 | ) | (118 | ) | | (484 | ) | |||||||||||
FINANCING ACTIVITIES
|
||||||||||||||||||||
Proceeds from issuance of debt third party
|
177 | | | | 177 | |||||||||||||||
Proceeds from issuance of debt related party
|
4 | | | | 4 | |||||||||||||||
Principal payments
|
||||||||||||||||||||
third parties
|
(2 | ) | (10 | ) | (8 | ) | | (20 | ) | |||||||||||
related parties
|
(165 | ) | (51 | ) | (13 | ) | 134 | (95 | ) | |||||||||||
Short-term borrowings, net
|
||||||||||||||||||||
third parties
|
| (188 | ) | (23 | ) | | (211 | ) | ||||||||||||
related parties
|
6 | 132 | (4 | ) | (134 | ) | | |||||||||||||
Debt issuance costs
|
(1 | ) | | | | (1 | ) | |||||||||||||
Dividends noncontrolling interests
|
| | (13 | ) | | (13 | ) | |||||||||||||
Net cash provided by (used in) financing activities
|
19 | (117 | ) | (61 | ) | | (159 | ) | ||||||||||||
Net increase (decrease) in cash and cash equivalents
|
23 | (29 | ) | (7 | ) | | (13 | ) | ||||||||||||
Effect of exchange rate changes on cash balances held in
foreign currencies
|
| 5 | 12 | | 17 | |||||||||||||||
Cash and cash equivalents beginning of period
|
3 | 175 | 70 | | 248 | |||||||||||||||
Cash and cash equivalents end of period
|
$ | 26 | $ | 151 | $ | 75 | $ | | $ | 252 | ||||||||||
40
Table of Contents
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
(In millions)
Nine Months Ended December 31, 2008 | ||||||||||||||||||||
Non- |
||||||||||||||||||||
Parent | Guarantors | Guarantors | Eliminations | Consolidated | ||||||||||||||||
OPERATING ACTIVITIES
|
||||||||||||||||||||
Net cash provided by (used in) operating activities
|
$ | (12 | ) | $ | (388 | ) | $ | 146 | $ | (160 | ) | $ | (414 | ) | ||||||
INVESTING ACTIVITIES
|
||||||||||||||||||||
Capital expenditures
|
(5 | ) | (74 | ) | (28 | ) | | (107 | ) | |||||||||||
Proceeds from sales of property, plant and equipment
|
2 | 1 | 1 | | 4 | |||||||||||||||
Changes to investment in and advances to non-consolidated
affiliates
|
| 17 | | | 17 | |||||||||||||||
Proceeds from loans receivable, net related parties
|
| 18 | | | 18 | |||||||||||||||
Net proceeds from settlement of derivative instruments
|
4 | 84 | 72 | | 160 | |||||||||||||||
Net cash provided by (used in) investing activities
|
1 | 46 | 45 | | 92 | |||||||||||||||
FINANCING ACTIVITIES
|
||||||||||||||||||||
Proceeds from issuance of new debt
|
| | 8 | | 8 | |||||||||||||||
Principal payments
|
||||||||||||||||||||
third parties
|
(2 | ) | (8 | ) | (1 | ) | | (11 | ) | |||||||||||
related parties
|
| (89 | ) | (243 | ) | 332 | | |||||||||||||
Short-term borrowings, net
|
||||||||||||||||||||
third parties
|
| 180 | 13 | | 193 | |||||||||||||||
related parties
|
4 | 174 | (6 | ) | (172 | ) | | |||||||||||||
Dividends noncontrolling interests
|
| | (5 | ) | | (5 | ) | |||||||||||||
Net cash provided by (used in) financing activities
|
2 | 257 | (234 | ) | 160 | 185 | ||||||||||||||
Net increase (decrease) in cash and cash equivalents
|
(9 | ) | (85 | ) | (43 | ) | | (137 | ) | |||||||||||
Effect of exchange rate changes on cash balances held in
foreign currencies
|
| (2 | ) | (11 | ) | | (13 | ) | ||||||||||||
Cash and cash equivalents beginning of period
|
12 | 177 | 137 | | 326 | |||||||||||||||
Cash and cash equivalents end of period
|
$ | 3 | $ | 90 | $ | 83 | $ | | $ | 176 | ||||||||||
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Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations |
| We reported pre-tax income of $129 million for the three months ended December 31, 2009, as compared to pre-tax loss of $2.02 billion for the three months ended December 31, 2008. The prior year includes non-cash impairment charges of $1.5 billion, unrealized losses on derivative instruments of $463 million and restructuring charges of $15 million. The current quarter results include $62 million of unrealized gains on derivatives and $1 million in restructuring charges. |
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| We reported pre-tax income of $703 million for the nine months ended December 31, 2009, as compared to pre-tax loss of $2.23 billion million for the nine months ended December 31, 2008. As noted above, the prior year includes $1.5 billion of impairment charges. Current year results include $615 million of unrealized gains on derivatives reflecting gains in metal and currency derivatives as compared to $664 million of losses in the prior year. The $615 million of unrealized gains includes a $489 million reversal of previously recognized losses upon settlement of derivatives and $126 million of unrealized gains relating to mark to market adjustments. The results for the nine months ended December 31, 2008 also include a $26 million gain on the reversal of a legal claim and $14 million in restructuring charges, while the nine months ended December 31, 2009 includes $9 million in gains related to the reversal of accrued tax and legal claims and $7 million in restructuring charges. | |
| For the first time this year, overall shipments were higher than the comparable three month period a year ago due to strong demand in Asia. However, shipments are down 8% from the comparable nine month period due to more favorable conditions in the first half of fiscal 2009. Shipments are down 6% from the second quarter of fiscal year 2010 as our third quarter activity traditionally reflects market seasonality in the can business, holiday shutdowns and scheduled maintenance. |
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Three Months Ended |
Year Ended |
Three Months Ended | ||||||||||||||||||||||||||||||
June 30, |
September 30, |
December 31, |
March 31, |
March 31, |
June 30, |
September 30, |
December 31, |
|||||||||||||||||||||||||
2008 | 2008 | 2008 | 2009 | 2009 | 2009 | 2009 | 2009 | |||||||||||||||||||||||||
(In millions, excepts shipments which are in kt) | ||||||||||||||||||||||||||||||||
Net sales
|
$ | 3,103 | $ | 2,959 | $ | 2,176 | $ | 1,939 | $ | 10,177 | $ | 1,960 | $ | 2,181 | $ | 2,112 | ||||||||||||||||
Percentage increase (decrease) in net sales versus comparable
previous year period
|
10 | % | 5 | % | (20 | )% | (32 | )% | (10 | )% | (37 | )% | (26 | )% | (3 | )% | ||||||||||||||||
Rolled product shipments:
|
||||||||||||||||||||||||||||||||
North America
|
286 | 293 | 242 | 246 |