Form: 8-K

Current report filing

April 1, 2005

Documents

Published on April 1, 2005

Exhibit 99.1

NOVELIS FILES 10-K AND REAFFIRMS MARCH 2, 2005 GUIDANCE

Company also reports adjustments to year end cash flow statement

ATLANTA, March 31 /PRNewswire-FirstCall/ -- Novelis Inc. (NYSE: NVL;
Toronto) yesterday filed its Annual Report on Form 10-K with the Securities and
Exchange Commission. The Annual Report included final audited financial
statements that included an adjustment from the preliminary full year results,
announced on March 2, 2005.

As Novelis continued with the carve-out reconciliation of the financial data
received from its former parent Alcan Inc., it determined that modifications to
the company's cash flow statements were necessary, but the modifications did not
change the company's cash position. Adjustments were made in relation to a
pension plan in Europe and to the value attributed to the four Pechiney
facilities, both elements being part of the transfer of assets and liabilities
to Novelis upon its creation. The adjustment to the cash flow statement has no
impact on the company's income statement or balance sheet. In addition, the
adjustment will not impact earnings going forward. As a result, the company
reaffirmed the 2005 guidance provided on March 2, 2005.

2005 Outlook

The outlook provided for 2005 includes two key components. First, capital
expenditures are not expected to exceed $175 million. Next, BGP or Segment
Income is expected to grow between 5% and 10%, excluding the impact of FAS 133
mark-to-market gains or losses on derivatives.

"Moving through 2005 can obviously create new challenges since this is our
first year as an independent company," said Brian W. Sturgell, president and
chief executive officer. "Rapid fluctuations in metal pricing and significant
changes in currency or economies are uncertainties that are not under our
control. The 2005 outlook is based on information currently available to
management."


COMBINED STATEMENT OF CASH FLOWS
Year ended December 31
(in millions of US$)



2004 2003 2002
-------- -------- --------

OPERATING ACTIVITIES
Net income (Loss) 55 157 (9)
Adjustments to determine cash
from operating activities:
Cumulative effect of accounting change - - 84
Depreciation and amortization 246 222 211
Deferred income taxes 97 (20) (1)
Equity income (6) (6) (8)
Asset impairment provisions 75 4 19
Stock option compensation 2 2 2
Loss (Gain) on sales of businesses and
investment - net - (25) 4
Change in operating working capital
Change in receivables
- third parties (112) 6 40
- related parties 28 101 (11)
Change in inventories (145) (18) 63
Change in payables and accrued liabilities
- third parties (42) 18 142
- related parties 64 (24) (92)
Change in deferred charges and other assets (9) (28) (59)
Change in deferred credits and other
liabilities (14) 48 37
Other - net (15) 7 (12)
Cash from operating activities 224 444 410

FINANCING ACTIVITIES
Proceeds from issuance of new debt
- third parties 575 500 105
- related parties 1,561 471 -

Debt repayments
- third parties (993) - -
- related parties (5) - (50)
Short-term borrowings - net
- third parties (774) 577 (75)
- related parties 221 (29) (66)
Dividends - minority interest (4) - (2)
Net payments to Alcan (1,512) (592) (153)
Cash from (used for) financing activities (931) 927 (241)

INVESTMENT ACTIVITIES
Purchase of property, plant and equipment (165) (189) (179)
Business acquisitions, net of cash and
time deposits acquired - (11) -
Proceeds from disposal of businesses,
investments and other assets,
net of cash 1 33 24
Change in loans receivable - related
parties 874 (1,210) (2)
Cash from (used for) investment
activities 710 (1,377) (157)
Effect of exchange rate changes on cash
and time deposits 1 2 2
Increase (Decrease) in cash and time
deposits 4 (4) 14
Cash and time deposits - beginning of
year 27 31 17
Cash and time deposits - end of year 31 27 31



Operating Activities

The following table sets forth information regarding our cash flow for the
years ended December 31, 2004, 2003, and 2002.



% CHANGE
2004 VS 2003 VS
Years ended December 31 2003 2002 2004 2003 2002
----------------------- -------- -------- -------- -------- --------
(in millions of US$,
except where indicated)

Cash flow
Cash from operating
activities (50)% 8% $ 224 $ 444 $ 410
Capital expenditures (13) 6 (165) (189) (179)
Dividends (i) (4) - (2)
Free cash flow (i) (78)% 11% $ 55 $ 255 $ 229


(i) Free cash flow (which is a non-GAAP measure) consists of cash from
operating activities less capital expenditures and dividends. Dividends
include only those paid by our less than wholly-owned subsidiaries to
their minority shareholders. We consider free cash flow to be relevant
information for investors as it provides a measure of the cash generated
internally that is available for investment opportunities and debt
repayment. However, free cash flow does not necessarily represent cash
available for discretionary activities, as certain mandatory debt
service obligations must be funded out of free cash flow.

Novelis separated from Alcan on Jan. 6, 2005 and is the global leader in
aluminum rolled products and aluminum can recycling, with 37 operating
facilities in 12 countries and more than 13,500 dedicated employees. Novelis has
the unparalleled capability to provide its customers with a regional supply of
high-end rolled aluminum throughout Asia, Europe, North America, and South
America. Through its advanced production capabilities, Novelis supplies aluminum
sheet and foil to automotive, transportation, beverage and food packaging,
construction, industrial and printing markets. Please visit
http://www.novelis.com for more information on Novelis.

Statements made in this news release which describe the Company's
intentions, expectations or predictions may be forward-looking statements within
the meaning of securities laws. The Company cautions that, by their nature,
forward-looking statements involve risk and uncertainty. The Company's actual
results could differ materially from those expressed or implied in such
statements as a result of many factors, including our separation from Alcan; the
level of our indebtedness; our ability to generate cash flow; relationships with
and conditions of our customers and suppliers; prices and availability of raw
materials; supply of and prices for energy; access to financing; fluctuating
currencies; litigation; labor relations; economic, regulatory and political
conditions in the countries in which we operate; competition; economic
conditions; and government regulations, including environmental, health or
safety compliance. Reference should also be made to the Company's Annual Report
on Form 10-K on file with the Securities and Exchange Commission for a summary
of major risk factors.

SOURCE Novelis Inc.
-0- 03/31/2005
/CONTACT: Media: Jennifer Dervin, +1-404-814-4208, or Investor: Holly
Ash, +1-404-814-4212, both for Novelis Inc./
/Web site: http://www.novelis.com/
_