ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Canada | 98-0442987 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |
3560 Lenox Road, Suite 2000 Atlanta, Georgia | 30326 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | ¨ | Accelerated filer | ¨ | |
Non-accelerated filer | ý | (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
PART I. FINANCIAL INFORMATION | ||
PART II. OTHER INFORMATION | ||
Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Net sales | $ | 2,441 | $ | 2,880 | $ | 4,991 | $ | 5,993 | |||||||
Cost of goods sold (exclusive of depreciation and amortization) | 2,077 | 2,549 | 4,279 | 5,257 | |||||||||||
Selling, general and administrative expenses | 102 | 91 | 204 | 186 | |||||||||||
Depreciation and amortization | 69 | 81 | 142 | 170 | |||||||||||
Research and development expenses | 13 | 12 | 25 | 24 | |||||||||||
Interest expense and amortization of debt issuance costs | 73 | 77 | 147 | 154 | |||||||||||
Loss (gain) on assets held for sale | 2 | — | (3 | ) | — | ||||||||||
Restructuring charges, net | 16 | 11 | 21 | 30 | |||||||||||
Equity in net loss of non-consolidated affiliates | 3 | 3 | 5 | 5 | |||||||||||
Other income, net | (1 | ) | (67 | ) | (28 | ) | (92 | ) | |||||||
2,354 | 2,757 | 4,792 | 5,734 | ||||||||||||
Income before income taxes | 87 | 123 | 199 | 259 | |||||||||||
Income tax provision (benefit) | 37 | (7 | ) | 58 | 52 | ||||||||||
Net income | 50 | 130 | 141 | 207 | |||||||||||
Net income attributable to noncontrolling interests | 1 | 10 | 1 | 25 | |||||||||||
Net income attributable to our common shareholder | $ | 49 | $ | 120 | $ | 140 | $ | 182 |
Three Months Ended September 30, 2012 | Three Months Ended September 30, 2011 | ||||||||||||||||||||||
Attributable to Our Common Shareholder | Attributable to Noncontrolling Interests | Total | Attributable to Our Common Shareholder | Attributable to Noncontrolling Interests | Total | ||||||||||||||||||
Net income | $ | 49 | $ | 1 | $ | 50 | $ | 120 | $ | 10 | $ | 130 | |||||||||||
Other comprehensive income (loss): | |||||||||||||||||||||||
Currency translation adjustment | 47 | 1 | 48 | (134 | ) | (19 | ) | (153 | ) | ||||||||||||||
Net change in fair value of effective portion of cash flow hedges | (30 | ) | — | (30 | ) | (121 | ) | — | (121 | ) | |||||||||||||
Net change in pension and other benefits | 6 | — | 6 | 2 | — | 2 | |||||||||||||||||
Other comprehensive income (loss) before income tax effect | 23 | 1 | 24 | (253 | ) | (19 | ) | (272 | ) | ||||||||||||||
Income tax benefit related to items of other comprehensive income (loss) | (10 | ) | — | (10 | ) | (41 | ) | — | (41 | ) | |||||||||||||
Other comprehensive income (loss), net of tax | 33 | 1 | 34 | (212 | ) | (19 | ) | (231 | ) | ||||||||||||||
Comprehensive income (loss) | $ | 82 | $ | 2 | $ | 84 | $ | (92 | ) | $ | (9 | ) | $ | (101 | ) |
Six Months Ended September 30, 2012 | Six Months Ended September 30, 2011 | ||||||||||||||||||||||
Attributable to Our Common Shareholder | Attributable to Noncontrolling Interests | Total | Attributable to Our Common Shareholder | Attributable to Noncontrolling Interests | Total | ||||||||||||||||||
Net income | $ | 140 | $ | 1 | $ | 141 | $ | 182 | $ | 25 | $ | 207 | |||||||||||
Other comprehensive income (loss): | |||||||||||||||||||||||
Currency translation adjustment | (34 | ) | — | (34 | ) | (80 | ) | (14 | ) | (94 | ) | ||||||||||||
Net change in fair value of effective portion of cash flow hedges | (58 | ) | — | (58 | ) | (134 | ) | — | (134 | ) | |||||||||||||
Net change in pension and other benefits | 30 | — | 30 | 3 | — | 3 | |||||||||||||||||
Other comprehensive income (loss) before income tax effect | (62 | ) | — | (62 | ) | (211 | ) | (14 | ) | (225 | ) | ||||||||||||
Income tax benefit related to items of other comprehensive income | (11 | ) | — | (11 | ) | (45 | ) | — | (45 | ) | |||||||||||||
Other comprehensive loss, net of tax | (51 | ) | — | (51 | ) | (166 | ) | (14 | ) | (180 | ) | ||||||||||||
Comprehensive income | $ | 89 | $ | 1 | $ | 90 | $ | 16 | $ | 11 | $ | 27 |
September 30, 2012 | March 31, 2012 | ||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 227 | $ | 317 | |||
Accounts receivable, net | |||||||
— third parties (net of allowances of $4 and $5 as of September 30, 2012 and March 31, 2012, respectively) | 1,304 | 1,331 | |||||
— related parties | 28 | 36 | |||||
Inventories | 1,163 | 1,024 | |||||
Prepaid expenses and other current assets | 90 | 61 | |||||
Fair value of derivative instruments | 58 | 99 | |||||
Deferred income tax assets | 139 | 151 | |||||
Assets held for sale | 4 | 81 | |||||
Total current assets | 3,013 | 3,100 | |||||
Property, plant and equipment, net | 2,848 | 2,689 | |||||
Goodwill | 611 | 611 | |||||
Intangible assets, net | 671 | 678 | |||||
Investment in and advances to non–consolidated affiliates | 656 | 683 | |||||
Fair value of derivative instruments, net of current portion | 3 | 2 | |||||
Deferred income tax assets | 88 | 74 | |||||
Other long–term assets | |||||||
— third parties | 164 | 168 | |||||
— related parties | 14 | 16 | |||||
Total assets | $ | 8,068 | $ | 8,021 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities | |||||||
Current portion of long–term debt | $ | 25 | $ | 23 | |||
Short–term borrowings | 111 | 18 | |||||
Accounts payable | |||||||
— third parties | 1,201 | 1,245 | |||||
— related parties | 48 | 51 | |||||
Fair value of derivative instruments | 119 | 95 | |||||
Accrued expenses and other current liabilities | 522 | 476 | |||||
Deferred income tax liabilities | 28 | 34 | |||||
Liabilities held for sale | — | 57 | |||||
Total current liabilities | 2,054 | 1,999 | |||||
Long–term debt, net of current portion | 4,326 | 4,321 | |||||
Deferred income tax liabilities | 534 | 581 | |||||
Accrued postretirement benefits | 665 | 687 | |||||
Other long–term liabilities | 277 | 310 | |||||
Total liabilities | 7,856 | 7,898 | |||||
Commitments and contingencies | |||||||
Shareholder’s equity | |||||||
Common stock, no par value; unlimited number of shares authorized; 1,000 shares issued and outstanding as of September 30, 2012 and March 31, 2012 | — | — | |||||
Additional paid–in capital | 1,659 | 1,659 | |||||
Accumulated deficit | (1,239 | ) | (1,379 | ) | |||
Accumulated other comprehensive loss | (242 | ) | (191 | ) | |||
Total equity of our common shareholder | 178 | 89 | |||||
Noncontrolling interests | 34 | 34 | |||||
Total equity | 212 | 123 | |||||
Total liabilities and equity | $ | 8,068 | $ | 8,021 |
Six Months Ended September 30, | |||||||
2012 | 2011 | ||||||
OPERATING ACTIVITIES | |||||||
Net income | $ | 141 | $ | 207 | |||
Adjustments to determine net cash provided by operating activities: | |||||||
Depreciation and amortization | 142 | 170 | |||||
Gain on unrealized derivatives and other realized derivatives in investing activities, net | (11 | ) | (106 | ) | |||
Gain on assets held for sale | (3 | ) | — | ||||
Deferred income taxes | 13 | 32 | |||||
Write–off and amortization of fair value adjustments, net | 13 | 13 | |||||
Equity in net loss of non–consolidated affiliates | 5 | 5 | |||||
Gain on foreign exchange remeasurement of debt | (7 | ) | (1 | ) | |||
(Gain) loss on sale of assets | (1 | ) | 2 | ||||
Non-cash impairment charges | 1 | 14 | |||||
Amortization of debt issuance costs | 8 | 8 | |||||
Other, net | 1 | (2 | ) | ||||
Changes in assets and liabilities including assets and liabilities held for sale (net of effects from acquisitions and divestitures): | |||||||
Accounts receivable | 30 | 40 | |||||
Inventories | (148 | ) | 45 | ||||
Accounts payable | (5 | ) | (261 | ) | |||
Other current assets | (31 | ) | (11 | ) | |||
Other current liabilities | (8 | ) | (90 | ) | |||
Other noncurrent assets | (6 | ) | 18 | ||||
Other noncurrent liabilities | (17 | ) | (27 | ) | |||
Net cash provided by operating activities | 117 | 56 | |||||
INVESTING ACTIVITIES | |||||||
Capital expenditures | (345 | ) | (174 | ) | |||
Proceeds from sales of assets, third party | 5 | 1 | |||||
Proceeds from sale of assets, related party | 2 | — | |||||
Proceeds from investment in and advances to non–consolidated affiliates, net | 1 | 1 | |||||
Proceeds (outflow) from related party loans receivable, net | 2 | (4 | ) | ||||
Proceeds from settlement of other undesignated derivative instruments, net | 31 | 57 | |||||
Net cash used in investing activities | (304 | ) | (119 | ) | |||
FINANCING ACTIVITIES | |||||||
Proceeds from issuance of debt | 46 | 6 | |||||
Principal payments | (11 | ) | (11 | ) | |||
Short–term borrowings, net | 54 | 48 | |||||
Dividends, noncontrolling interest | (2 | ) | (1 | ) | |||
Net cash provided by financing activities | 87 | 42 | |||||
Net decrease in cash and cash equivalents | (100 | ) | (21 | ) | |||
Effect of exchange rate changes on cash | 10 | (4 | ) | ||||
Cash and cash equivalents — beginning of period | 317 | 311 | |||||
Cash and cash equivalents — end of period | $ | 227 | $ | 286 |
Equity of our Common Shareholder | ||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) (AOCI) | Non- controlling Interests | Total Equity | |||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||
Balance as of March 31, 2012 | 1,000 | $ | — | $ | 1,659 | $ | (1,379 | ) | $ | (191 | ) | $ | 34 | $ | 123 | |||||||||||
Net income attributable to our common shareholder | — | — | — | 140 | — | — | 140 | |||||||||||||||||||
Net income attributable to noncontrolling interests | — | — | — | — | — | 1 | 1 | |||||||||||||||||||
Currency translation adjustment, net of tax provision of $ — included in AOCI | — | — | — | — | (34 | ) | — | (34 | ) | |||||||||||||||||
Change in fair value of effective portion of cash flow hedges, net of tax benefit of $21 included in AOCI | — | — | — | — | (37 | ) | — | (37 | ) | |||||||||||||||||
Change in pension and other benefits, net of tax provision of $10 included in AOCI | — | — | — | — | 20 | — | 20 | |||||||||||||||||||
Noncontrolling interest cash dividends | — | — | — | — | — | (1 | ) | (1 | ) | |||||||||||||||||
Balance as of September 30, 2012 | 1,000 | $ | — | $ | 1,659 | $ | (1,239 | ) | $ | (242 | ) | $ | 34 | $ | 212 |
Europe | North America | Asia | South America | Corporate | Total Restructuring Liabilities | ||||||||||||||||||
Balance as of March 31, 2012 | $ | 19 | $ | 5 | $ | — | $ | 2 | $ | 2 | $ | 28 | |||||||||||
Provisions | 9 | 11 | — | — | — | 20 | |||||||||||||||||
Cash payments | (13 | ) | (9 | ) | — | (1 | ) | — | (23 | ) | |||||||||||||
Adjustments — other | (1 | ) | — | — | — | — | (1 | ) | |||||||||||||||
Balance as of September 30, 2012 | $ | 14 | $ | 7 | $ | — | $ | 1 | $ | 2 | $ | 24 |
September 30, 2012 | March 31, 2012 | ||||||
Finished goods | $ | 242 | $ | 207 | |||
Work in process | 391 | 380 | |||||
Raw materials | 427 | 340 | |||||
Supplies | 103 | 97 | |||||
Inventories | $ | 1,163 | $ | 1,024 |
September 30, 2012 | March 31, 2012 | ||||||
Assets held for sale | |||||||
Accounts receivable | — | 53 | |||||
Inventories | — | 17 | |||||
Prepaid expenses and other current assets | — | 3 | |||||
Property, plant and equipment, net | 4 | 8 | |||||
Total assets held for sale | $ | 4 | $ | 81 | |||
Liabilities held for sale | |||||||
Accounts payable | — | 23 | |||||
Accrued expenses and other current liabilities | — | 20 | |||||
Accrued postretirement benefits | — | 10 | |||||
Other liabilities | — | 4 | |||||
Total liabilities held for sale | $ | — | $ | 57 |
September 30, 2012 | March 31, 2012 | ||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 2 | $ | 2 | |||
Accounts receivable | 21 | 20 | |||||
Inventories | 44 | 42 | |||||
Prepaid expenses and other current assets | 1 | — | |||||
Total current assets | 68 | 64 | |||||
Property, plant and equipment, net | 15 | 15 | |||||
Goodwill | 12 | 12 | |||||
Deferred income taxes | 63 | 63 | |||||
Other long-term assets | 3 | 3 | |||||
Total assets | $ | 161 | $ | 157 | |||
Liabilities | |||||||
Current liabilities | |||||||
Accounts payable | $ | 25 | $ | 24 | |||
Accrued expenses and other current liabilities | 10 | 11 | |||||
Total current liabilities | 35 | 35 | |||||
Accrued postretirement benefits | 146 | 145 | |||||
Other long-term liabilities | 2 | 2 | |||||
Total liabilities | $ | 183 | $ | 182 |
6. | INVESTMENT IN AND ADVANCES TO NON-CONSOLIDATED AFFILIATES AND RELATED PARTY TRANSACTIONS |
Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Net sales | $ | 59 | $ | 61 | $ | 120 | $ | 127 | |||||||
Costs, expenses and provisions for taxes on income | 62 | 64 | 125 | 132 | |||||||||||
Net loss | $ | (3 | ) | $ | (3 | ) | $ | (5 | ) | $ | (5 | ) | |||
Purchase of tolling services from Aluminium Norf GmbH (Alunorf) | $ | 59 | $ | 61 | $ | 120 | $ | 127 |
September 30, 2012 | March 31, 2012 | ||||||
Accounts receivable | $ | 28 | $ | 33 | |||
Other long-term assets | $ | 14 | $ | 16 | |||
Accounts payable | $ | 48 | $ | 51 |
September 30, 2012 | March 31, 2012 | |||||||||||||||||||||||||||||
Interest Rates(A) | Principal | Unamortized Carrying Value Adjustments | Carrying Value | Principal | Unamortized Carrying Value Adjustments | Carrying Value | ||||||||||||||||||||||||
Third party debt: | ||||||||||||||||||||||||||||||
Short term borrowings | 2.91 | % | $ | 111 | $ | — | $ | 111 | $ | 18 | $ | — | $ | 18 | ||||||||||||||||
Novelis Inc. | ||||||||||||||||||||||||||||||
Floating rate Term Loan Facility, due March 2017 | 4.00 | % | 1,697 | (33 | ) | (B) | 1,664 | 1,705 | (37 | ) | (B) | 1,668 | ||||||||||||||||||
8.375% Senior Notes, due December 2017 | 8.375 | % | 1,100 | — | 1,100 | 1,100 | — | 1,100 | ||||||||||||||||||||||
8.75% Senior Notes, due December 2020 | 8.75 | % | 1,400 | — | 1,400 | 1,400 | — | 1,400 | ||||||||||||||||||||||
7.25% Senior Notes, due February 2015 | 7.25 | % | 74 | 2 | 76 | 74 | 2 | 76 | ||||||||||||||||||||||
Novelis Korea Limited | ||||||||||||||||||||||||||||||
Loan, due December 2014 | 4.18 | % | 27 | — | 27 | 26 | — | 26 | ||||||||||||||||||||||
Loan, due December 2014 | 4.53 | % | 18 | — | 18 | 18 | — | 18 | ||||||||||||||||||||||
Novelis Switzerland S.A. | ||||||||||||||||||||||||||||||
Capital lease obligation, due December 2019 (Swiss francs (CHF) 38 million) | 7.50 | % | 41 | (2 | ) | 39 | 45 | (2 | ) | 43 | ||||||||||||||||||||
Novelis do Brasil Ltda. | ||||||||||||||||||||||||||||||
BNDES loans, due December 2018 through April 2021 | 6.18 | % | 17 | (3 | ) | 14 | 15 | (4 | ) | 11 | ||||||||||||||||||||
Novelis Inc. | ||||||||||||||||||||||||||||||
Capital lease obligation, due July 2017 | 3.64 | % | 10 | — | 10 | — | — | — | ||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||
Other debt, due November 2012 through September 2020 | 4.06 | % | 3 | — | 3 | 2 | — | 2 | ||||||||||||||||||||||
Total debt — third parties | 4,498 | (36 | ) | 4,462 | 4,403 | (41 | ) | 4,362 | ||||||||||||||||||||||
Less: Short term borrowings | (111 | ) | — | (111 | ) | (18 | ) | — | (18 | ) | ||||||||||||||||||||
Current portion of long term debt | (25 | ) | — | (25 | ) | (23 | ) | — | (23 | ) | ||||||||||||||||||||
Long-term debt, net of current portion — third parties: | $ | 4,362 | $ | (36 | ) | $ | 4,326 | $ | 4,362 | $ | (41 | ) | $ | 4,321 |
(A) | Interest rates are as of September 30, 2012 and exclude the effects of related interest rate swaps and accretion/amortization of fair value adjustments as a result of purchase accounting in connection with Hindalco's purchase of Novelis, the debt exchange completed in fiscal 2009, the series of refinancing transactions we completed in fiscal 2011, and the additional borrowing in fiscal 2012. |
(B) | Debt existing at the time of Hindalco's purchase of Novelis was recorded at fair value. In connection with a series of refinancing transactions a portion of the historical fair value adjustments were allocated to the Term Loan Facility. The balance also includes the unamortized discount on the Term Loan Facility. |
As of September 30, 2012 | Amount | ||
Short-term borrowings and Current portion of long-term debt due within one year | $ | 136 | |
2 years | 28 | ||
3 years | 146 | ||
4 years | 27 | ||
5 years | 1,639 | ||
Thereafter | 2,522 | ||
Total | $ | 4,498 |
Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
2009 LTIP | $ | 1 | $ | — | $ | — | $ | 3 | |||||||
2010 LTIP | 1 | (4 | ) | — | (2 | ) | |||||||||
2011 LTIP | — | (2 | ) | (1 | ) | (3 | ) | ||||||||
2012 LTIP | — | 1 | — | 1 | |||||||||||
2013 LTIP | 1 | — | 2 | — | |||||||||||
Total compensation (income) expense | $ | 3 | $ | (5 | ) | $ | 1 | $ | (1 | ) |
2013 LTIP - RSUs | Number of RSUs | Grant Date Fair Value (in Indian Rupees) | Aggregate Intrinsic Value (USD in millions) | ||||||
RSUs outstanding as of March 31, 2012 | — | — | $ | — | |||||
Granted | 1,947,150 | 109.58 | — | ||||||
Forfeited/Cancelled | (4,848 | ) | 109.58 | ||||||
RSUs outstanding as of September 30, 2012 | 1,942,302 | 109.58 | $ | — |
2013 LTIP - SARs | Number of SARs | Weighted Average Exercise Price (in Indian Rupees) | Weighted Average Remaining Contractual Term (In years) | Aggregate Intrinsic Value (USD in millions) | ||||||||
SARs outstanding as of March 31, 2012 | — | — | — | $ | — | |||||||
Granted | 16,480,466 | 109.58 | — | — | ||||||||
Forfeited/Cancelled | (41,030 | ) | 109.58 | — | ||||||||
SARs outstanding as of September 30, 2012 | 16,439,436 | 109.58 | 6.6 | $ | — |
2012 LTIP - RSUs | Number of RSUs | Grant Date Fair Value (in Indian Rupees) | Aggregate Intrinsic Value (USD in millions) | ||||||
RSUs outstanding as of March 31, 2012 | 878,675 | 186.02 | $ | 2 | |||||
Forfeited/Cancelled | (18,109 | ) | 192.38 | ||||||
RSUs outstanding as of September 30, 2012 | 860,566 | 185.89 | $ | 2 |
2012 LTIP - SARs | Number of SARs | Weighted Average Exercise Price (in Indian Rupees) | Weighted Average Remaining Contractual Term (In years) | Aggregate Intrinsic Value (USD in millions) | ||||||||
SARs outstanding as of March 31, 2012 | 6,688,717 | 186.05 | 6.1 | $ | — | |||||||
Forfeited/Cancelled | (341,199 | ) | 189.02 | — | ||||||||
SARs outstanding as of September 30, 2012 | 6,347,518 | 185.86 | 5.6 | $ | — |
2011 LTIP - RSUs | Number of RSUs | Grant Date Fair Value (in Indian Rupees) | Aggregate Intrinsic Value (USD in millions) | ||||||
RSUs outstanding as of March 31, 2012 | 802,149 | 149.01 | $ | 2 | |||||
Forfeited/Cancelled | (24,112 | ) | 150.38 | ||||||
RSUs outstanding as of September 30, 2012 | 778,037 | 148.97 | $ | 2 |
2011 LTIP - SARs | Number of SARs | Weighted Average Exercise Price (in Indian Rupees) | Weighted Average Remaining Contractual Term (In years) | Aggregate Intrinsic Value (USD in millions) | |||||||
SARs outstanding as of March 31, 2012 | 6,303,848 | 149.01 | 5.1 | $ | — | ||||||
Forfeited/Cancelled | (337,968 | ) | 149.73 | ||||||||
SARs outstanding as of September 30, 2012 | 5,965,880 | 148.96 | 4.6 | $ | — |
2010 LTIP - SARs | Number of SARs | Weighted Average Exercise Price (in Indian Rupees) | Weighted Average Remaining Contractual Term (In years) | Aggregate Intrinsic Value (USD in millions) | |||||||
SARs outstanding as of March 31, 2012 | 8,171,586 | 88.37 | 4.2 | $ | 7 | ||||||
Exercised | (175,711 | ) | 85.79 | ||||||||
Forfeited/Cancelled | (394,992 | ) | 87.39 | ||||||||
SARs outstanding as of September 30, 2012 | 7,600,883 | 86.14 | 3.7 | $ | 5 |
2009 LTIP - SARs | Number of SARs | Weighted Average Exercise Price (in Indian Rupees) | Weighted Average Remaining Contractual Term (In years) | Aggregate Intrinsic Value (USD in millions) | |||||||
SARs outstanding as of March 31, 2012 | 4,845,652 | 60.50 | 3.2 | $ | 7 | ||||||
Exercised | (598,907 | ) | 60.50 | ||||||||
Forfeited/Cancelled | (369,686 | ) | 60.50 | ||||||||
SARs outstanding as of September 30, 2012 | 3,877,059 | 60.50 | 2.7 | $ | 4 |
2013 LTIP | 2012 LTIP | 2011 LTIP | 2010 LTIP | ||||||||
Risk-free interest rate | 8.22 | % | 8.20 | % | 8.15 | % | 8.07 | % | |||
Dividend yield | 1.28 | % | 1.28 | % | 1.28 | % | 1.28 | % | |||
Volatility | 52 | % | 53 | % | 55 | % | 45 | % |
Pension Benefit Plans | Other Benefits | ||||||||||||||
Three Months Ended September 30, | Three Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Service cost | $ | 11 | $ | 10 | $ | 2 | $ | 2 | |||||||
Interest cost | 17 | 17 | 3 | 2 | |||||||||||
Expected return on assets | (16 | ) | (15 | ) | — | — | |||||||||
Amortization — losses | 8 | 3 | — | 1 | |||||||||||
Amortization — prior service costs | $ | (1 | ) | $ | (1 | ) | $ | — | $ | — | |||||
Net periodic benefit cost | $ | 19 | $ | 14 | $ | 5 | $ | 5 |
Pension Benefit Plans | Other Benefits | ||||||||||||||
Six Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Service cost | $ | 22 | $ | 20 | $ | 5 | $ | 4 | |||||||
Interest cost | 33 | 34 | 5 | 5 | |||||||||||
Expected return on assets | (32 | ) | (31 | ) | — | — | |||||||||
Amortization — losses | 14 | 6 | 1 | 1 | |||||||||||
Amortization — prior service cost | (1 | ) | (1 | ) | — | — | |||||||||
Net periodic benefit cost | $ | 36 | $ | 28 | $ | 11 | $ | 10 |
Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Funded pension plans | $ | 9 | $ | 10 | $ | 18 | $ | 21 | |||||||
Unfunded pension plans | 4 | 4 | 7 | 7 | |||||||||||
Savings and defined contribution pension plans | 5 | 5 | 10 | 10 | |||||||||||
Total contributions | $ | 18 | $ | 19 | $ | 35 | $ | 38 |
Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
(Gain) loss on remeasurement of monetary assets and liabilities, net | $ | (7 | ) | $ | 17 | $ | (10 | ) | $ | 16 | |||||
Loss released from accumulated other comprehensive income | — | — | 1 | — | |||||||||||
(Gain) loss recognized on balance sheet remeasurement currency exchange contracts, net | 4 | (18 | ) | 1 | (7 | ) | |||||||||
Currency (gains) losses, net | $ | (3 | ) | $ | (1 | ) | $ | (8 | ) | $ | 9 |
Six Months Ended September 30, 2012 | Year Ended March 31, 2012 | ||||||
Cumulative currency translation adjustment — beginning of period | $ | 23 | $ | 114 | |||
Effect of changes in exchange rates | (23 | ) | (79 | ) | |||
Sale of investment in foreign entities | $ | (11 | ) | $ | (12 | ) | |
Cumulative currency translation adjustment — end of period | $ | (11 | ) | $ | 23 |
September 30, 2012 | |||||||||||||||||||
Assets | Liabilities | Net Fair Value Assets/(Liabilities) | |||||||||||||||||
Current | Noncurrent | Current | Noncurrent(A) | ||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||
Cash flow hedges | |||||||||||||||||||
Aluminum contracts | $ | 4 | $ | — | $ | (23 | ) | $ | — | $ | (19 | ) | |||||||
Currency exchange contracts | 6 | 1 | (16 | ) | (5 | ) | (14 | ) | |||||||||||
Energy contracts | — | — | (1 | ) | — | (1 | ) | ||||||||||||
Net Investment hedges | |||||||||||||||||||
Currency exchange contracts | 3 | — | — | — | 3 | ||||||||||||||
Fair value hedges | |||||||||||||||||||
Aluminum contracts | 3 | 2 | (5 | ) | — | — | |||||||||||||
Total derivatives designated as hedging instruments | 16 | 3 | (45 | ) | (5 | ) | (31 | ) | |||||||||||
Derivatives not designated as hedging instruments | |||||||||||||||||||
Aluminum contracts | 24 | — | (48 | ) | — | (24 | ) | ||||||||||||
Currency exchange contracts | 18 | — | (16 | ) | — | 2 | |||||||||||||
Energy contracts | — | — | (10 | ) | (25 | ) | (35 | ) | |||||||||||
Total derivatives not designated as hedging instruments | 42 | — | (74 | ) | (25 | ) | (57 | ) | |||||||||||
Total derivative fair value | $ | 58 | $ | 3 | $ | (119 | ) | $ | (30 | ) | $ | (88 | ) |
March 31, 2012 | |||||||||||||||||||
Assets | Liabilities | Net Fair Value Assets/(Liabilities) | |||||||||||||||||
Current | Noncurrent | Current | Noncurrent(A) | ||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||
Cash flow hedges | |||||||||||||||||||
Aluminum contracts | $ | 17 | $ | — | $ | (5 | ) | $ | — | $ | 12 | ||||||||
Currency exchange contracts | 12 | 1 | (6 | ) | (6 | ) | 1 | ||||||||||||
Net Investment hedges | |||||||||||||||||||
Currency exchange contracts | 2 | — | — | — | 2 | ||||||||||||||
Fair value hedges | |||||||||||||||||||
Aluminum contracts | 1 | — | (6 | ) | — | (5 | ) | ||||||||||||
Total derivatives designated as hedging instruments | 32 | 1 | (17 | ) | (6 | ) | 10 | ||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||
Aluminum contracts | 51 | — | (47 | ) | — | 4 | |||||||||||||
Currency exchange contracts | 16 | 1 | (10 | ) | (1 | ) | 6 | ||||||||||||
Energy contracts | — | — | (21 | ) | (30 | ) | (51 | ) | |||||||||||
Total derivatives not designated as hedging instruments | 67 | 1 | (78 | ) | (31 | ) | (41 | ) | |||||||||||
Total derivative fair value | $ | 99 | $ | 2 | $ | (95 | ) | $ | (37 | ) | $ | (31 | ) |
(A) | The noncurrent portions of derivative liabilities are included in “Other long-term liabilities” in the accompanying condensed consolidated balance sheets. |
September 30, 2012 | March 31, 2012 | ||||
Hedge Type | |||||
Purchase (Sale) | |||||
Cash flow purchases | 6 | 16 | |||
Cash flow sales | (220 | ) | (144 | ) | |
Fair value | 31 | 32 | |||
Not designated | (58 | ) | (42 | ) | |
Total | (241 | ) | (138 | ) |
Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Derivative Instruments Not Designated as Hedges | |||||||||||||||
Aluminum contracts | $ | (12 | ) | $ | 53 | $ | (6 | ) | $ | 81 | |||||
Currency exchange contracts | (1 | ) | 22 | 6 | 20 | ||||||||||
Energy contracts (A) | 3 | 1 | 7 | (3 | ) | ||||||||||
(Loss) gain recognized in "Other (income) expense, net" | (10 | ) | 76 | 7 | 98 | ||||||||||
Derivative Instruments Designated as Hedges | |||||||||||||||
Gain recognized in "Other (income) expense, net" (B) | 1 | 3 | 11 | 5 | |||||||||||
Total (loss) gain recognized in "Other (income) expense, net" | $ | (9 | ) | $ | 79 | $ | 18 | $ | 103 | ||||||
Balance sheet remeasurement currency exchange contracts | $ | (4 | ) | $ | 18 | $ | (2 | ) | $ | 7 | |||||
Realized gains, net | 19 | 62 | 31 | 71 | |||||||||||
Unrealized (losses) gains on other derivative instruments, net | (24 | ) | (1 | ) | (11 | ) | 25 | ||||||||
Total (loss) gain recognized in "Other (income) expense, net" | $ | (9 | ) | $ | 79 | $ | 18 | $ | 103 |
(A) | Includes amounts related to de-designated electricity swap. |
(B) | Amount includes: forward market premium/discount excluded and hedging relationship ineffectiveness on designated aluminum contracts; releases to income from AOCI on balance sheet remeasurement contracts; and ineffectiveness on fair value hedges involving aluminum derivatives. |
Amount of Gain (Loss) Recognized in OCI (Effective Portion) | Amount of Gain (Loss) Recognized in OCI (Effective Portion) | Amount of Gain (Loss) Recognized in “Other (Income) Expense, net” (Ineffective and Excluded Portion) | Amount of Gain (Loss) Recognized in “Other (Income) Expense, net” (Ineffective and Excluded Portion) | ||||||||||||||||||||||||||||
Three Months Ended September 30, | Six Months Ended September 30, | Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | ||||||||||||||||||||||||
Aluminum contracts | $ | (29 | ) | $ | (23 | ) | (8 | ) | (49 | ) | $ | 2 | $ | (1 | ) | 13 | (3 | ) | |||||||||||||
Currency exchange contracts | 9 | (87 | ) | (27 | ) | (54 | ) | — | 4 | 1 | 8 | ||||||||||||||||||||
Energy | 1 | — | 1 | — | — | — | — | — | |||||||||||||||||||||||
Total | $ | (19 | ) | $ | (110 | ) | $ | (34 | ) | $ | (103 | ) | $ | 2 | $ | 3 | $ | 14 | $ | 5 |
Amount of Gain (Loss) Reclassified from AOCI into Income/(Expense)(Effective Portion) Three Months Ended September 30, | Amount of Gain (Loss) Reclassified from AOCI into Income/(Expense)(Effective Portion) Six Months Ended September 30, | Location of Gain (Loss) Reclassified from AOCI into Earnings | |||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||
Electricity swap (A) | $ | (2 | ) | $ | (1 | ) | $ | (3 | ) | $ | (3 | ) | Other (income) expense, net | ||||
Aluminum contracts | 12 | 7 | 30 | 26 | Cost of goods sold | ||||||||||||
Aluminum contracts | 5 | — | 7 | — | Sales | ||||||||||||
Currency exchange contracts | (5 | ) | 6 | (8 | ) | 9 | Cost of goods sold and SG&A | ||||||||||
Currency exchange contracts | — | — | (2 | ) | — | Sales | |||||||||||
Currency exchange contracts | — | (1 | ) | (1 | ) | (1 | ) | Other (income) expense, net and Interest Expense | |||||||||
Total | $ | 10 | $ | 11 | $ | 23 | $ | 31 |
(A) | AOCI related to de-designated electricity swap is amortized to income over the remaining term of the hedged item. |
September 30, 2012 | March 31, 2012 | ||||||||||||||
Assets | Liabilities | Assets | Liabilities | ||||||||||||
Level 2 Instruments | |||||||||||||||
Aluminum contracts | $ | 33 | $ | (76 | ) | $ | 69 | $ | (58 | ) | |||||
Currency exchange contracts | 28 | (37 | ) | 32 | (23 | ) | |||||||||
Energy contracts | — | (3 | ) | — | (10 | ) | |||||||||
Total Level 2 Instruments | 61 | (116 | ) | 101 | (91 | ) | |||||||||
Level 3 Instruments | |||||||||||||||
Energy contracts | — | (33 | ) | — | (41 | ) | |||||||||
Total Level 3 Instruments | — | (33 | ) | — | (41 | ) | |||||||||
Total | $ | 61 | $ | (149 | ) | $ | 101 | $ | (132 | ) |
Level 3 – Derivative Instruments (A) | |||
Balance as of March 31, 2012 | $ | (41 | ) |
Realized/unrealized gain included in earnings(B) | 9 | ||
Settlements | (1 | ) | |
Balance as of September 30, 2012 | $ | (33 | ) |
(A) | Represents net derivative liabilities. |
(B) | Included in “Other (income) expense, net.” |
September 30, 2012 | March 31, 2012 | ||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
Assets | |||||||||||||||
Long-term receivables from related parties | $ | 14 | $ | 14 | $ | 16 | $ | 16 | |||||||
Liabilities | |||||||||||||||
Total debt — third parties (excluding short term borrowings) | $ | 4,351 | $ | 4,642 | $ | 4,344 | $ | 4,605 |
Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Foreign currency remeasurement (gains) losses, net (A) | $ | (3 | ) | $ | (1 | ) | $ | (8 | ) | $ | 9 | ||||
Loss (gain) on change in fair value of other unrealized derivative instruments, net | 24 | 1 | 11 | (25 | ) | ||||||||||
(Gain) on change in fair value of other realized derivative instruments, net | (19 | ) | (62 | ) | (31 | ) | (71 | ) | |||||||
Loss (gain) on sale of assets, net | 1 | 1 | (1 | ) | 2 | ||||||||||
(Gain) on litigation settlement in Brazil (B) | — | (8 | ) | — | (8 | ) | |||||||||
Loss on Brazilian tax litigation, net (C) | 2 | 5 | 4 | 7 | |||||||||||
Interest income | (1 | ) | (4 | ) | (2 | ) | (8 | ) | |||||||
Other, net | (5 | ) | 1 | (1 | ) | 2 | |||||||||
Other income, net | $ | (1 | ) | $ | (67 | ) | $ | (28 | ) | $ | (92 | ) |
(A) | Includes “(Gain) loss recognized on balance sheet remeasurement currency exchange contracts, net.” |
(B) | We received and recognized a gain of $8 million during the three months ended September 30, 2011 as settlement related to a lawsuit we filed against a Brazilian vendor. |
(C) | See footnote 15 – Commitments and Contingencies – Brazil Tax Matters for further details. |
Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Pre-tax income before equity in net income of non-consolidated affiliates and noncontrolling interests | $ | 90 | $ | 126 | $ | 204 | $ | 264 | |||||||
Canadian statutory tax rate | 26 | % | 27 | % | 26 | % | 27 | % | |||||||
Provision at the Canadian statutory rate | 23 | 34 | 53 | 71 | |||||||||||
Increase (decrease) for taxes on income (loss) resulting from: | |||||||||||||||
Exchange translation items | — | (12 | ) | (5 | ) | (13 | ) | ||||||||
Exchange remeasurement of deferred income taxes | (1 | ) | (39 | ) | (20 | ) | (29 | ) | |||||||
Change in valuation allowances | 19 | 18 | 39 | 39 | |||||||||||
Expense items not subject to tax | 1 | 1 | 2 | 3 | |||||||||||
Dividends not subject to tax | (12 | ) | (16 | ) | (25 | ) | (31 | ) | |||||||
Enacted tax rate changes | 4 | 3 | 4 | 3 | |||||||||||
Tax rate differences on foreign earnings | 4 | 4 | 10 | 8 | |||||||||||
Uncertain tax positions, net | (1 | ) | — | — | 1 | ||||||||||
Income tax provision (benefit) | $ | 37 | $ | (7 | ) | $ | 58 | $ | 52 | ||||||
Effective tax rate | 41 | % | (6 | )% | 28 | % | 20 | % |
Europe. Headquartered in Zurich, Switzerland, this segment manufactures aluminum sheet and light gauge products and operates nine plants, including one fully dedicated recycling facility and two plants with recycling operations, in four countries. |
Total Assets | North America | Europe | Asia | South America | Other and Eliminations | Total | |||||||||||||||||
September 30, 2012 | $ | 2,679 | $ | 2,568 | $ | 1,137 | $ | 1,518 | $ | 166 | $ | 8,068 | |||||||||||
March 31, 2012 | $ | 2,644 | $ | 2,753 | $ | 1,037 | $ | 1,493 | $ | 94 | $ | 8,021 |
Selected Operating Results Three Months Ended September 30, 2012 | North America | Europe | Asia | South America | Other and Eliminations | Total | |||||||||||||||||
Net sales | $ | 906 | $ | 769 | $ | 435 | $ | 310 | $ | 21 | $ | 2,441 | |||||||||||
Depreciation and amortization | 28 | 25 | 13 | 12 | (9 | ) | 69 | ||||||||||||||||
Capital expenditures | 53 | 15 | 50 | 48 | 12 | 178 |
Selected Operating Results Three Months Ended September 30, 2011 | North America | Europe | Asia | South America | Other and Eliminations | Total | |||||||||||||||||
Net sales | $ | 1,033 | $ | 1,032 | $ | 474 | $ | 303 | $ | 38 | $ | 2,880 | |||||||||||
Depreciation and amortization | 33 | 31 | 14 | 13 | (10 | ) | 81 | ||||||||||||||||
Capital expenditures | 27 | 20 | 29 | 30 | 1 | 107 |
Selected Operating Results Six Months Ended September 30, 2012 | North America | Europe | Asia | South America | Other and Eliminations | Total | |||||||||||||||||
Net sales | $ | 1,826 | $ | 1,632 | $ | 863 | $ | 618 | $ | 52 | $ | 4,991 | |||||||||||
Depreciation and amortization | 58 | 52 | 26 | 25 | (19 | ) | 142 | ||||||||||||||||
Capital expenditures | 87 | 26 | 78 | 112 | 42 | 345 |
Selected Operating Results Six Months Ended September 30, 2011 | North America | Europe | Asia | South America | Other and Eliminations | Total | |||||||||||||||||
Net sales | $ | 2,140 | $ | 2,112 | $ | 1,034 | $ | 621 | $ | 86 | $ | 5,993 | |||||||||||
Depreciation and amortization | 68 | 67 | 28 | 27 | (20 | ) | 170 | ||||||||||||||||
Capital expenditures | 46 | 34 | 38 | 58 | (2 | ) | 174 |
Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
North America | $ | 123 | $ | 116 | $ | 210 | $ | 230 | |||||||
Europe | 74 | 92 | 150 | 189 | |||||||||||
Asia | 39 | 49 | 85 | 106 | |||||||||||
South America | 41 | 44 | 91 | 82 | |||||||||||
Depreciation and amortization | (69 | ) | (81 | ) | (142 | ) | (170 | ) | |||||||
Interest expense and amortization of debt issuance costs | (73 | ) | (77 | ) | (147 | ) | (154 | ) | |||||||
Adjustment to eliminate proportional consolidation | (9 | ) | (12 | ) | (20 | ) | (25 | ) | |||||||
Unrealized gain (loss) on change in fair value of derivative instruments, net | (24 | ) | (1 | ) | (11 | ) | 25 | ||||||||
Realized gains on derivative instruments not included in segment income | — | — | 2 | 2 | |||||||||||
Restructuring charges, net | (16 | ) | (11 | ) | (21 | ) | (30 | ) | |||||||
Gain (loss) on assets held for sale | (2 | ) | — | 3 | — | ||||||||||
Other costs, net | 3 | 4 | (1 | ) | 4 | ||||||||||
Income before income taxes | 87 | 123 | 199 | 259 | |||||||||||
Income tax provision (benefit) | 37 | (7 | ) | 58 | 52 | ||||||||||
Net income | 50 | 130 | 141 | 207 | |||||||||||
Net income attributable to noncontrolling interests | 1 | 10 | 1 | 25 | |||||||||||
Net income attributable to our common shareholder | $ | 49 | $ | 120 | $ | 140 | $ | 182 |
Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||
Rexam | 13 | % | 13 | % | 15 | % | 13 | % | |||
Anheuser-Busch | 13 | % | 8 | % | 11 | % | 9 | % | |||
Affiliates of Ball Corporation | 11 | % | 8 | % | 10 | % | 10 | % |
Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||
Purchases from Rio Tinto Alcan as a percentage of total | 25 | % | 32 | % | 23 | % | 31 | % |
September 30, 2012 | March 31, 2012 | ||||||
Currency translation adjustment | $ | (14 | ) | $ | 20 | ||
Fair value of effective portion of cash flow hedges | (44 | ) | (7 | ) | |||
Pension and other benefits | (184 | ) | (204 | ) | |||
Accumulated other comprehensive (loss) income | $ | (242 | ) | $ | (191 | ) |
Six Months Ended September 30, | |||||||
2012 | 2011 | ||||||
Interest paid | $ | 135 | $ | 145 | |||
Income taxes paid | $ | 70 | $ | 49 |
Three Months Ended September 30, 2012 | |||||||||||||||||||
Parent | Guarantors | Non- Guarantors | Eliminations | Consolidated | |||||||||||||||
Net sales | $ | 208 | $ | 2,021 | $ | 591 | $ | (379 | ) | $ | 2,441 | ||||||||
Cost of goods sold (exclusive of depreciation and amortization) | 204 | 1,719 | 533 | (379 | ) | 2,077 | |||||||||||||
Selling, general and administrative expenses | (1 | ) | 83 | 20 | — | 102 | |||||||||||||
Depreciation and amortization | 4 | 51 | 14 | — | 69 | ||||||||||||||
Research and development expenses | 3 | 10 | — | — | 13 | ||||||||||||||
Interest expense and amortization of debt issuance costs | 81 | 1 | (1 | ) | (8 | ) | 73 | ||||||||||||
Loss (gain) on assets held for sale | 2 | 1 | (1 | ) | — | 2 | |||||||||||||
Restructuring charges, net | 4 | 12 | — | — | 16 | ||||||||||||||
Equity in net loss of non-consolidated affiliates | — | 3 | — | — | 3 | ||||||||||||||
Equity in net (income) loss of consolidated subsidiaries | (121 | ) | — | — | 121 | — | |||||||||||||
Other (income) expense, net | (18 | ) | 8 | 1 | 8 | (1 | ) | ||||||||||||
158 | 1,888 | 566 | (258 | ) | 2,354 | ||||||||||||||
Income (loss) before income taxes | 50 | 133 | 25 | (121 | ) | 87 | |||||||||||||
Income tax provision | 1 | 31 | 5 | — | 37 | ||||||||||||||
Net income (loss) | 49 | 102 | 20 | (121 | ) | 50 | |||||||||||||
Net income attributable to noncontrolling interests | — | — | 1 | — | 1 | ||||||||||||||
Net income (loss) attributable to our common shareholder | $ | 49 | $ | 102 | $ | 19 | $ | (121 | ) | $ | 49 | ||||||||
Comprehensive income (loss) | $ | 82 | $ | 114 | $ | 45 | $ | (157 | ) | $ | 84 | ||||||||
Comprehensive income (loss) attributable to noncontrolling interest | $ | — | $ | — | $ | 2 | $ | — | $ | 2 | |||||||||
Comprehensive income (loss) attributable to our common shareholder | $ | 82 | $ | 114 | $ | 43 | $ | (157 | ) | $ | 82 |
Three Months Ended September 30, 2011 | |||||||||||||||||||
Parent | Guarantors | Non- Guarantors | Eliminations | Consolidated | |||||||||||||||
Net sales | $ | 310 | $ | 2,400 | $ | 680 | $ | (510 | ) | $ | 2,880 | ||||||||
Cost of goods sold (exclusive of depreciation and amortization) | 298 | 2,141 | 621 | (511 | ) | 2,549 | |||||||||||||
Selling, general and administrative expenses | (10 | ) | 88 | 13 | — | 91 | |||||||||||||
Depreciation and amortization | 5 | 62 | 14 | — | 81 | ||||||||||||||
Research and development expenses | 9 | 3 | — | — | 12 | ||||||||||||||
Interest expense and amortization of debt issuance costs | 77 | 15 | 1 | (16 | ) | 77 | |||||||||||||
Restructuring charges, net | 2 | 9 | — | 11 | |||||||||||||||
Equity in net loss of non-consolidated affiliates | — | 3 | — | — | 3 | ||||||||||||||
Equity in net (income) loss of consolidated subsidiaries | (178 | ) | — | — | 178 | — | |||||||||||||
Other (income) expense, net | (14 | ) | (64 | ) | (5 | ) | 16 | (67 | ) | ||||||||||
189 | 2,257 | 644 | (333 | ) | 2,757 | ||||||||||||||
Income (loss) before taxes | 121 | 143 | 36 | (177 | ) | 123 | |||||||||||||
Income tax provision (benefit) | 2 | (17 | ) | 8 | — | (7 | ) | ||||||||||||
Net income (loss) | 119 | 160 | 28 | (177 | ) | 130 | |||||||||||||
Net income attributable to noncontrolling interests | — | — | 10 | — | 10 | ||||||||||||||
Net income (loss) attributable to our common shareholder | $ | 119 | $ | 160 | $ | 18 | $ | (177 | ) | $ | 120 | ||||||||
Comprehensive income (loss) | $ | (92 | ) | $ | 24 | $ | (30 | ) | $ | (3 | ) | $ | (101 | ) | |||||
Comprehensive income (loss) attributable to noncontrolling interest | $ | — | $ | — | $ | (9 | ) | $ | — | $ | (9 | ) | |||||||
Comprehensive income (loss) attributable to our common shareholder | $ | (92 | ) | $ | 24 | $ | (21 | ) | $ | (3 | ) | $ | (92 | ) |
Six Months Ended September 30, 2012 | |||||||||||||||||||
Parent | Guarantors | Non- Guarantors | Eliminations | Consolidated | |||||||||||||||
Net sales | $ | 468 | $ | 4,133 | $ | 1,221 | $ | (831 | ) | $ | 4,991 | ||||||||
Cost of goods sold (exclusive of depreciation and amortization) | 457 | 3,551 | 1,102 | (831 | ) | 4,279 | |||||||||||||
Selling, general and administrative expenses | (7 | ) | 171 | 40 | — | 204 | |||||||||||||
Depreciation and amortization | 7 | 107 | 28 | — | 142 | ||||||||||||||
Research and development expenses | 5 | 20 | — | — | 25 | ||||||||||||||
Interest expense and amortization of debt issuance costs | 160 | 6 | (2 | ) | (17 | ) | 147 | ||||||||||||
(Gain) loss on assets held for sale | (5 | ) | 2 | — | — | (3 | ) | ||||||||||||
Restructuring charges, net | 7 | 14 | — | — | 21 | ||||||||||||||
Equity in net loss of non-consolidated affiliates | — | 5 | — | — | 5 | ||||||||||||||
Equity in net (income) loss of consolidated subsidiaries | (272 | ) | — | — | 272 | — | |||||||||||||
Other (income) expense, net | (26 | ) | (21 | ) | 2 | 17 | (28 | ) | |||||||||||
326 | 3,855 | 1,170 | (559 | ) | 4,792 | ||||||||||||||
Income (loss) before income taxes | 142 | 278 | 51 | (272 | ) | 199 | |||||||||||||
Income tax provision | 3 | 44 | 11 | — | 58 | ||||||||||||||
Net income (loss) | 139 | 234 | 40 | (272 | ) | 141 | |||||||||||||
Net income attributable to noncontrolling interests | — | — | 1 | — | 1 | ||||||||||||||
Net income (loss) attributable to our common shareholder | $ | 139 | $ | 234 | $ | 39 | $ | (272 | ) | $ | 140 | ||||||||
Comprehensive income (loss) | $ | 89 | $ | 173 | $ | 52 | $ | (224 | ) | $ | 90 | ||||||||
Comprehensive income (loss) attributable to noncontrolling interest | $ | — | $ | — | $ | 1 | $ | — | $ | 1 | |||||||||
Comprehensive income (loss) attributable to our common shareholder | $ | 89 | $ | 173 | $ | 51 | $ | (224 | ) | $ | 89 |
Six Months Ended September 30, 2011 | |||||||||||||||||||
Parent | Guarantors | Non- Guarantors | Eliminations | Consolidated | |||||||||||||||
Net sales | $ | 615 | $ | 4,927 | $ | 1,479 | $ | (1,028 | ) | $ | 5,993 | ||||||||
Cost of goods sold (exclusive of depreciation and amortization) | 592 | 4,355 | 1,339 | (1,029 | ) | 5,257 | |||||||||||||
Selling, general and administrative expenses | 3 | 156 | 27 | — | 186 | ||||||||||||||
Depreciation and amortization | 10 | 130 | 30 | — | 170 | ||||||||||||||
Research and development expenses | 17 | 7 | — | — | 24 | ||||||||||||||
Interest expense and amortization of debt issuance costs | 154 | 29 | 2 | (31 | ) | 154 | |||||||||||||
Restructuring charges, net | 2 | 27 | 1 | — | 30 | ||||||||||||||
Equity in net loss of non-consolidated affiliates | — | 5 | — | — | 5 | ||||||||||||||
Equity in net (income) loss of consolidated subsidiaries | (310 | ) | — | — | 310 | — | |||||||||||||
Other (income) expense, net | (37 | ) | (77 | ) | (9 | ) | 31 | (92 | ) | ||||||||||
431 | 4,632 | 1,390 | (719 | ) | 5,734 | ||||||||||||||
Income (loss) before income taxes | 184 | 295 | 89 | (309 | ) | 259 | |||||||||||||
Income tax provision | 2 | 30 | 20 | — | 52 | ||||||||||||||
Net income (loss) | 182 | 265 | 69 | (309 | ) | 207 | |||||||||||||
Net income attributable to noncontrolling interests | — | — | 25 | — | 25 | ||||||||||||||
Net income (loss) attributable to our common shareholder | $ | 182 | $ | 265 | $ | 44 | $ | (309 | ) | $ | 182 | ||||||||
Comprehensive income (loss) | $ | 16 | $ | 153 | $ | 26 | $ | (168 | ) | $ | 27 | ||||||||
Comprehensive income (loss) attributable to noncontrolling interest | $ | — | $ | — | $ | 11 | $ | — | $ | 11 | |||||||||
Comprehensive income (loss) attributable to our common shareholder | $ | 16 | $ | 153 | $ | 15 | $ | (168 | ) | $ | 16 |
As of September 30, 2012 | |||||||||||||||||||
Parent | Guarantors | Non- Guarantors | Eliminations | Consolidated | |||||||||||||||
ASSETS | |||||||||||||||||||
Current assets | |||||||||||||||||||
Cash and cash equivalents | $ | 1 | $ | 108 | $ | 118 | $ | — | $ | 227 | |||||||||
Accounts receivable, net of allowances | |||||||||||||||||||
— third parties | 38 | 928 | 338 | — | 1,304 | ||||||||||||||
— related parties | 556 | 165 | 17 | (710 | ) | 28 | |||||||||||||
Inventories | 55 | 863 | 245 | — | 1,163 | ||||||||||||||
Prepaid expenses and other current assets | 5 | 77 | 8 | — | 90 | ||||||||||||||
Fair value of derivative instruments | 13 | 36 | 10 | (1 | ) | 58 | |||||||||||||
Deferred income tax assets | — | 135 | 4 | — | 139 | ||||||||||||||
Assets held for sale | — | 4 | — | — | 4 | ||||||||||||||
Total current assets | 668 | 2,316 | 740 | (711 | ) | 3,013 | |||||||||||||
Property, plant and equipment, net | 114 | 2,110 | 624 | — | 2,848 | ||||||||||||||
Goodwill | — | 600 | 11 | — | 611 | ||||||||||||||
Intangible assets, net | 11 | 656 | 4 | — | 671 | ||||||||||||||
Investments in and advances to non-consolidated affiliates | — | 656 | — | — | 656 | ||||||||||||||
Investments in consolidated subsidiaries | 1,795 | — | — | (1,795 | ) | — | |||||||||||||
Fair value of derivative instruments, net of current portion | — | 1 | 2 | — | 3 | ||||||||||||||
Deferred income tax assets | 2 | 63 | 23 | — | 88 | ||||||||||||||
Other long-term assets | 2,209 | 274 | 11 | (2,316 | ) | 178 | |||||||||||||
Total assets | $ | 4,799 | $ | 6,676 | $ | 1,415 | $ | (4,822 | ) | $ | 8,068 | ||||||||
LIABILITIES AND EQUITY | |||||||||||||||||||
Current liabilities | |||||||||||||||||||
Current portion of long-term debt | $ | 18 | $ | 7 | $ | — | $ | — | $ | 25 | |||||||||
Short-term borrowings | |||||||||||||||||||
— third parties | 5 | 88 | 18 | — | 111 | ||||||||||||||
— related parties | 10 | 334 | — | (344 | ) | — | |||||||||||||
Accounts payable | |||||||||||||||||||
— third parties | 21 | 751 | 429 | — | 1,201 | ||||||||||||||
— related parties | 82 | 278 | 53 | (365 | ) | 48 | |||||||||||||
Fair value of derivative instruments | 1 | 98 | 21 | (1 | ) | 119 | |||||||||||||
Accrued expenses and other current liabilities | 120 | 352 | 50 | — | 522 | ||||||||||||||
Deferred income tax liabilities | — | 28 | — | — | 28 | ||||||||||||||
Total current liabilities | 257 | 1,936 | 571 | (710 | ) | 2,054 | |||||||||||||
Long-term debt, net of current portion | |||||||||||||||||||
— third parties | 4,231 | 49 | 46 | — | 4,326 | ||||||||||||||
— related parties | 49 | 2,268 | — | (2,317 | ) | — | |||||||||||||
Deferred income tax liabilities | 2 | 522 | 10 | — | 534 | ||||||||||||||
Accrued postretirement benefits | 57 | 452 | 156 | — | 665 | ||||||||||||||
Other long-term liabilities | 25 | 245 | 7 | — | 277 | ||||||||||||||
Total liabilities | 4,621 | 5,472 | 790 | (3,027 | ) | 7,856 | |||||||||||||
Commitments and contingencies | |||||||||||||||||||
Shareholder’s equity | |||||||||||||||||||
Common stock | — | — | — | — | — | ||||||||||||||
Additional paid-in capital | 1,659 | — | — | — | 1,659 | ||||||||||||||
Retained earnings (accumulated deficit) | (1,239 | ) | 1,458 | 654 | (2,112 | ) | (1,239 | ) | |||||||||||
Accumulated other comprehensive income (loss) | (242 | ) | (254 | ) | (63 | ) | 317 | (242 | ) | ||||||||||
Total equity of our common shareholder | 178 | 1,204 | 591 | (1,795 | ) | 178 | |||||||||||||
Noncontrolling interests | — | — | 34 | — | 34 | ||||||||||||||
Total equity | 178 | 1,204 | 625 | (1,795 | ) | 212 | |||||||||||||
Total liabilities and equity | $ | 4,799 | $ | 6,676 | $ | 1,415 | $ | (4,822 | ) | $ | 8,068 |
As of March 31, 2012 | |||||||||||||||||||
Parent | Guarantors | Non- Guarantors | Eliminations | Consolidated | |||||||||||||||
ASSETS | |||||||||||||||||||
Current assets | |||||||||||||||||||
Cash and cash equivalents | $ | 6 | $ | 215 | $ | 96 | $ | — | $ | 317 | |||||||||
Accounts receivable, net of allowances | |||||||||||||||||||
— third parties | 34 | 956 | 341 | — | 1,331 | ||||||||||||||
— related parties | 746 | 280 | 19 | (1,009 | ) | 36 | |||||||||||||
Inventories | 51 | 752 | 221 | — | 1,024 | ||||||||||||||
Prepaid expenses and other current assets | 4 | 48 | 9 | — | 61 | ||||||||||||||
Fair value of derivative instruments | 9 | 75 | 18 | (3 | ) | 99 | |||||||||||||
Deferred income tax assets | — | 149 | 2 | — | 151 | ||||||||||||||
Assets held for sale | — | 51 | 30 | — | 81 | ||||||||||||||
Total current assets | 850 | 2,526 | 736 | (1,012 | ) | 3,100 | |||||||||||||
Property, plant and equipment, net | 122 | 2,019 | 548 | — | 2,689 | ||||||||||||||
Goodwill | — | 600 | 11 | — | 611 | ||||||||||||||
Intangible assets, net | 7 | 666 | 5 | — | 678 | ||||||||||||||
Investments in and advances to non-consolidated affiliates | — | 683 | — | — | 683 | ||||||||||||||
Investments in consolidated subsidiaries | 1,480 | — | — | (1,480 | ) | — | |||||||||||||
Fair value of derivative instruments, net of current portion | — | 1 | 1 | — | 2 | ||||||||||||||
Deferred income tax assets | — | 51 | 23 | — | 74 | ||||||||||||||
Other long-term assets | 2,245 | 224 | 9 | (2,294 | ) | 184 | |||||||||||||
Total assets | $ | 4,704 | $ | 6,770 | $ | 1,333 | $ | (4,786 | ) | $ | 8,021 | ||||||||
LIABILITIES AND EQUITY | |||||||||||||||||||
Current liabilities | |||||||||||||||||||
Current portion of long-term debt | $ | 17 | $ | 5 | $ | 1 | $ | — | $ | 23 | |||||||||
Short-term borrowings | |||||||||||||||||||
— third parties | — | — | 18 | — | 18 | ||||||||||||||
— related parties | 9 | 316 | 17 | (342 | ) | — | |||||||||||||
Accounts payable | |||||||||||||||||||
— third parties | 79 | 775 | 391 | — | 1,245 | ||||||||||||||
— related parties | 80 | 489 | 142 | (660 | ) | 51 | |||||||||||||
Fair value of derivative instruments | — | 75 | 23 | (3 | ) | 95 | |||||||||||||
Accrued expenses and other current liabilities | 125 | 293 | 64 | (6 | ) | 476 | |||||||||||||
Deferred income tax liabilities | — | 32 | 2 | — | 34 | ||||||||||||||
Liabilities held for sale | — | 34 | 23 | — | 57 | ||||||||||||||
Total current liabilities | 310 | 2,019 | 681 | (1,011 | ) | 1,999 | |||||||||||||
Long-term debt, net of current portion | |||||||||||||||||||
— third parties | 4,227 | 51 | 43 | — | 4,321 | ||||||||||||||
— related parties | — | 2,295 | — | (2,295 | ) | — | |||||||||||||
Deferred income tax liabilities | — | 571 | 10 | — | 581 | ||||||||||||||
Accrued postretirement benefits | 57 | 477 | 153 | — | 687 | ||||||||||||||
Other long-term liabilities | 21 | 282 | 7 | — | 310 | ||||||||||||||
Total liabilities | 4,615 | 5,695 | 894 | (3,306 | ) | 7,898 | |||||||||||||
Commitments and contingencies | |||||||||||||||||||
Shareholder’s equity | |||||||||||||||||||
Common stock | — | — | — | — | — | ||||||||||||||
Additional paid-in capital | 1,659 | — | — | — | 1,659 | ||||||||||||||
Retained earnings (accumulated deficit) | (1,379 | ) | 1,265 | 480 | (1,745 | ) | (1,379 | ) | |||||||||||
Accumulated other comprehensive income (loss) | (191 | ) | (190 | ) | (75 | ) | 265 | (191 | ) | ||||||||||
Total equity of our common shareholder | 89 | 1,075 | 405 | (1,480 | ) | 89 | |||||||||||||
Noncontrolling interests | — | — | 34 | — | 34 | ||||||||||||||
Total equity | 89 | 1,075 | 439 | (1,480 | ) | 123 | |||||||||||||
Total liabilities and equity | $ | 4,704 | $ | 6,770 | $ | 1,333 | $ | (4,786 | ) | $ | 8,021 |
Six Months Ended September 30, 2012 | |||||||||||||||||||
Parent | Guarantors | Non- Guarantors | Eliminations | Consolidated | |||||||||||||||
OPERATING ACTIVITIES | |||||||||||||||||||
Net cash (used in) provided by operating activities | $ | (53 | ) | $ | 15 | $ | 125 | $ | 30 | $ | 117 | ||||||||
INVESTING ACTIVITIES | |||||||||||||||||||
Capital expenditures | (3 | ) | (252 | ) | (90 | ) | — | (345 | ) | ||||||||||
(Outflow) proceeds from sales of assets | (2 | ) | 9 | — | — | 7 | |||||||||||||
Proceeds from investment in and advances to non-consolidated affiliates, net | — | 1 | — | — | 1 | ||||||||||||||
Proceeds from related party loans receivable, net | — | 2 | — | — | 2 | ||||||||||||||
Proceeds from settlement of other undesignated derivative instruments, net | 7 | 22 | 2 | — | 31 | ||||||||||||||
Net cash provided by (used in) investing activities | 2 | (218 | ) | (88 | ) | — | (304 | ) | |||||||||||
FINANCING ACTIVITIES | |||||||||||||||||||
Proceeds from issuance of debt | |||||||||||||||||||
— third parties | — | 44 | 2 | — | 46 | ||||||||||||||
— related parties | 49 | 2 | — | (51 | ) | — | |||||||||||||
Principal payments | |||||||||||||||||||
— third parties | (9 | ) | (2 | ) | — | — | (11 | ) | |||||||||||
— related parties | — | (27 | ) | — | 27 | — | |||||||||||||
Short-term borrowings, net | |||||||||||||||||||
— third parties | 5 | 49 | — | — | 54 | ||||||||||||||
— related parties | 1 | 22 | (17 | ) | (6 | ) | — | ||||||||||||
Dividends — noncontrolling interests | — | — | (2 | ) | — | (2 | ) | ||||||||||||
Net cash provided by (used in) financing activities | 46 | 88 | (17 | ) | (30 | ) | 87 | ||||||||||||
Net (decrease) increase in cash and cash equivalents | (5 | ) | (115 | ) | 20 | — | (100 | ) | |||||||||||
Effect of exchange rate changes on cash | — | 8 | 2 | — | 10 | ||||||||||||||
Cash and cash equivalents — beginning of period | 6 | 215 | 96 | — | 317 | ||||||||||||||
Cash and cash equivalents — end of period | $ | 1 | $ | 108 | $ | 118 | $ | — | $ | 227 |
Six Months Ended September 30, 2011 | |||||||||||||||||||
Parent | Guarantors | Non- Guarantors | Eliminations | Consolidated | |||||||||||||||
OPERATING ACTIVITIES | |||||||||||||||||||
Net cash (used in) provided by operating activities | $ | (17 | ) | $ | 85 | $ | 43 | $ | (55 | ) | $ | 56 | |||||||
INVESTING ACTIVITIES | |||||||||||||||||||
Capital expenditures | (17 | ) | (110 | ) | (47 | ) | — | (174 | ) | ||||||||||
Proceeds from sales of assets | — | 1 | — | — | 1 | ||||||||||||||
Proceeds from investment in and advances to non-consolidated affiliates, net | — | 1 | — | — | 1 | ||||||||||||||
Proceeds from related party loans receivable, net | — | (4 | ) | — | — | (4 | ) | ||||||||||||
Proceeds from settlement of other undesignated derivative instruments, net | 1 | 52 | 4 | — | 57 | ||||||||||||||
Net cash used in investing activities | (16 | ) | (60 | ) | (43 | ) | — | (119 | ) | ||||||||||
FINANCING ACTIVITIES | |||||||||||||||||||
Proceeds from issuance of debt | |||||||||||||||||||
— third parties | — | 6 | — | — | 6 | ||||||||||||||
— related parties | — | — | — | — | — | ||||||||||||||
Principal payments | |||||||||||||||||||
— third parties | (8 | ) | (3 | ) | — | — | (11 | ) | |||||||||||
— related parties | — | (4 | ) | — | 4 | — | |||||||||||||
Short-term borrowings, net | |||||||||||||||||||
— third parties | 54 | 1 | (7 | ) | — | 48 | |||||||||||||
— related parties | (13 | ) | (38 | ) | — | 51 | — | ||||||||||||
Dividends — noncontrolling interests | — | — | (1 | ) | — | (1 | ) | ||||||||||||
Net cash provided by (used in) financing activities | 33 | (38 | ) | (8 | ) | 55 | 42 | ||||||||||||
Net decrease in cash and cash equivalents | — | (13 | ) | (8 | ) | — | (21 | ) | |||||||||||
Effect of exchange rate changes on cash | — | (5 | ) | 1 | — | (4 | ) | ||||||||||||
Cash and cash equivalents — beginning of period | 1 | 233 | 77 | — | 311 | ||||||||||||||
Cash and cash equivalents — end of period | $ | 1 | $ | 215 | $ | 70 | $ | — | $ | 286 |
• | “Net sales” for the three months ended September 30, 2012 were $2.4 billion, a decrease of 15% compared to the $2.9 billion reported in the same period a year ago. "Cost of goods sold (exclusive of depreciation and amortization)" for the three months ended September 30, 2012 were $2.1 billion, a decrease of 19% compared to the $2.5 billion we reported in the same period a year ago. These decreases were primarily the result of lower average aluminum prices. |
• | We reported "Net income" of $50 million in the three months ended September 30, 2012, compared to $130 million in the three months ended September 30, 2011. Included in "Net Income" are pre-tax unrealized losses on undesignated derivative instruments of $24 million and $1 million, in the three months ended September 30, 2012 and 2011, respectively, which were recorded in our statement of operations in periods prior to the offsetting impact of the hedged exposure. Also, included in the three months ended September 30, 2011, was an $8 million pre-tax gain on litigation settlement. We recorded an income tax provision of $37 million in the three months ended September 30, 2012 compared to an income tax benefit of $7 million in three months ended September 30, 2011. The prior year benefit was the result of the foreign exchange remeasurement of Brazilian real denominated deferred income taxes. |
• | Cash flow provided by operations of $117 million for the six months ended September 30, 2012 compared to cash flow provided by operations of $56 million for the six months ended September 30, 2011. The favorable variance was the result of lower working capital requirements in the current period resulting from lower average aluminum prices. |
• | All of our strategic expansion projects are progressing well. We spent $345 million on capital expenditures for the six months ended September 30, 2012, which primarily relates to our strategic expansion projects in Oswego, New York; Yeongju, South Korea; Ulsan, South Korea; and Pindamonhangaba, Brazil and expenditures on implementing our global enterprise resource planning (ERP) system. |
• | We reported available liquidity of $919 million as of September 30, 2012 as compared to $1.0 billion as of March 31, 2012. |
(in millions, except shipments which are in kt) | Three Months Ended | Year Ended | Three Months Ended | |||||||||||||||||||||||||
June 30, 2011 | September 30, 2011 | December 31, 2011 | March 31, 2012 | March 31, 2012 | June 30, 2012 | September 30, 2012 | ||||||||||||||||||||||
Net sales | $ | 3,113 | $ | 2,880 | $ | 2,462 | $ | 2,608 | $ | 11,063 | $ | 2,550 | $ | 2,441 | ||||||||||||||
Percentage increase (decrease) in net sales versus comparable previous year period | 23 | % | 14 | % | (4 | )% | (12 | )% | 5 | % | (18 | )% | (15 | )% | ||||||||||||||
Rolled product shipments: | ||||||||||||||||||||||||||||
North America | 288 | 274 | 248 | 254 | 1,064 | 266 | 269 | |||||||||||||||||||||
Europe | 237 | 227 | 183 | 228 | 875 | 231 | 216 | |||||||||||||||||||||
Asia | 152 | 131 | 117 | 124 | 524 | 136 | 142 | |||||||||||||||||||||
South America | 90 | 88 | 100 | 97 | 375 | 89 | 92 | |||||||||||||||||||||
Total | 767 | 720 | 648 | 703 | 2,838 | 722 | 719 | |||||||||||||||||||||
Beverage and food cans | 462 | 437 | 404 | 419 | 1,722 | 432 | 449 | |||||||||||||||||||||
All other rolled products | 305 | 283 | 244 | 284 | 1,116 | 290 | 270 | |||||||||||||||||||||
Total | 767 | 720 | 648 | 703 | 2,838 | 722 | 719 |
Three Months Ended | Year Ended | Three Months Ended | |||||||||||||||||||
June 30, 2011 | September 30, 2011 | December 31, 2011 | March 31, 2012 | March 31, 2012 | June 30, 2012 | September 30, 2012 | |||||||||||||||
North America | 4 | % | (4 | )% | (5 | )% | (9 | )% | (4 | )% | (8 | )% | (2 | )% | |||||||
Europe | 2 | % | — | (12 | )% | (5 | )% | (4 | )% | (3 | )% | (5 | )% | ||||||||
Asia | 4 | % | (2 | )% | (21 | )% | (18 | )% | (10 | )% | (11 | )% | 8 | % | |||||||
South America | — | (3 | )% | 3 | % | (2 | )% | (1 | )% | (1 | )% | 5 | % | ||||||||
Total | 3 | % | (2 | )% | (9 | )% | (9 | )% | (4 | )% | (6 | )% | — | % | |||||||
Beverage and food cans | 9 | % | 2 | % | (5 | )% | (8 | )% | (1 | )% | (6 | )% | 3 | % | |||||||
All other rolled products | (5 | )% | (8 | )% | (16 | )% | (11 | )% | (10 | )% | (5 | )% | (5 | )% | |||||||
Total | 3 | % | (2 | )% | (9 | )% | (9 | )% | (4 | )% | (6 | )% | — | % |
Three Months Ended September 30, | Percent | Six Months Ended September 30, | Percent | ||||||||||||||
2012 | 2011 | Change | 2012 | 2011 | Change | ||||||||||||
London Metal Exchange Prices | |||||||||||||||||
Aluminum (per metric tonne, and presented in U.S. dollars): | |||||||||||||||||
Closing cash price as of beginning of period | $1,835 | $2,509 | (27 | )% | $ | 2,099 | $ | 2,600 | (19 | )% | |||||||
Average cash price during the period | $1,922 | $2,400 | (20 | )% | $ | 1,950 | $ | 2,502 | (22 | )% | |||||||
Closing cash price as of end of period | $2,094 | $2,207 | (5 | )% | $ | 2,094 | $ | 2,207 | (5 | )% |
Average Exchange Rate | Average Exchange Rate | ||||||||||||||||
Exchange Rate as of | Three Months Ended | Six Months Ended | |||||||||||||||
September 30, 2012 | March 31, 2012 | September 30, | September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||
U.S. dollar per Euro | 1.293 | 1.335 | 1.257 | 1.408 | 1.267 | 1.433 | |||||||||||
Brazilian real per U.S. dollar | 2.029 | 1.823 | 2.036 | 1.666 | 2.007 | 1.619 | |||||||||||
South Korean won per U.S. dollar | 1,119 | 1,138 | 1,130 | 1,108 | 1,143 | 1,089 | |||||||||||
Canadian dollar per U.S. dollar | 0.979 | 0.997 | 0.991 | 0.992 | 1.001 | 0.977 |
Selected Operating Results Three Months Ended September 30, 2012 | North America | Europe | Asia | South America | Other and Eliminations | Total | |||||||||||||||||
Net sales | $ | 906 | $ | 769 | $ | 435 | $ | 310 | $ | 21 | $ | 2,441 | |||||||||||
Shipments | |||||||||||||||||||||||
Rolled products | 269 | 216 | 142 | 92 | — | 719 | |||||||||||||||||
Non-rolled products | 4 | 12 | — | 19 | — | 35 | |||||||||||||||||
Total shipments | 273 | 228 | 142 | 111 | — | 754 |
Selected Operating Results Three Months Ended September 30, 2011 | North America | Europe | Asia | South America | Other and Eliminations | Total | |||||||||||||||||
Net sales | $ | 1,033 | $ | 1,032 | $ | 474 | $ | 303 | $ | 38 | $ | 2,880 | |||||||||||
Shipments | |||||||||||||||||||||||
Rolled products | 274 | 227 | 131 | 88 | — | 720 | |||||||||||||||||
Non-rolled products | 4 | 31 | — | 10 | — | 45 | |||||||||||||||||
Total shipments | 278 | 258 | 131 | 98 | — | 765 |
Changes in Segment income | North America | Europe(A) | Asia | South America | Total | ||||||||||||||
Segment Income - Three Months Ended September 30, 2011 | $ | 116 | $ | 92 | $ | 49 | $ | 44 | $ | 301 | |||||||||
Volume | (4 | ) | (9 | ) | 4 | 3 | (6 | ) | |||||||||||
Conversion premium and product mix | 26 | (39 | ) | (4 | ) | (1 | ) | (18 | ) | ||||||||||
Conversion costs(B) | (29 | ) | 39 | 3 | 5 | 18 | |||||||||||||
Metal price lag | 13 | 7 | (5 | ) | (5 | ) | 10 | ||||||||||||
Foreign exchange | 11 | (8 | ) | (1 | ) | (9 | ) | (7 | ) | ||||||||||
Primary metal production | — | — | — | 4 | 4 | ||||||||||||||
Selling, general & administrative and research & development costs(C) | (9 | ) | (6 | ) | (5 | ) | (1 | ) | (21 | ) | |||||||||
Other changes | (1 | ) | (2 | ) | (2 | ) | 1 | (4 | ) | ||||||||||
Segment Income - Three Months Ended September 30, 2012 | $ | 123 | $ | 74 | $ | 39 | $ | 41 | $ | 277 |
(A) | Included in the Europe "Segment income" for the three months ended September 30, 2011 were the operating results of three foil and packaging plants (Rugles, France; Dudelange, Luxembourg; and Berlin, Germany) that we sold on June 28, 2012. The change to "Segment income" for the three months ended September 30, 2012 compared to the same period in prior year was unfavorable $3 million. The sale of these plants resulted in declines in volume, conversion premium and product mix, and conversion costs of $8 million, $27 million and $26 million, respectively, when comparing the three months ended September 30, 2012 with the same period in prior year. The impact on other items were immaterial. |
(B) | Conversion costs include expenses incurred in production such as direct and indirect labor, energy, freight, scrap usage, alloys and hardeners, coatings, alumina, melt loss, the incremental benefit of used beverage cans (UBCs) and other metal costs. Fluctuations in this component reflect cost efficiencies (inefficiencies) during the period as well as cost inflation (deflation). |
(C) | Selling, general & administrative costs and research & development costs include costs incurred directly by each segment and all corporate related costs, which are allocated to each of our segments. These costs increased in the second quarter of fiscal 2013 compared to the second quarter of fiscal 2012 for the following reasons: 1) higher costs of implementing of our ERP system; 2) higher start-up costs associated with our various strategic investment projects; and 3) higher employment costs, which include wage inflation, higher pension costs, and higher LTIP costs. Other significant fluctuations are discussed below. |
Three Months Ended September 30, | |||||||
2012 | 2011 | ||||||
North America | $ | 123 | $ | 116 | |||
Europe | 74 | 92 | |||||
Asia | 39 | 49 | |||||
South America | 41 | 44 | |||||
Total Segment income | 277 | 301 | |||||
Depreciation and amortization | (69 | ) | (81 | ) | |||
Interest expense and amortization of debt issuance costs | (73 | ) | (77 | ) | |||
Adjustment to eliminate proportional consolidation | (9 | ) | (12 | ) | |||
Unrealized losses on change in fair value of derivative instruments, net | (24 | ) | (1 | ) | |||
Restructuring charges, net | (16 | ) | (11 | ) | |||
Loss on assets held for sale | (2 | ) | — | ||||
Other income, net | 3 | 4 | |||||
Income before income taxes | 87 | 123 | |||||
Income tax provision (benefit) | 37 | (7 | ) | ||||
Net income | 50 | 130 | |||||
Net income attributable to noncontrolling interests | 1 | 10 | |||||
Net income attributable to our common shareholder | $ | 49 | $ | 120 |
Selected Operating Results Six Months Ended September 30, 2012 | North America | Europe | Asia | South America | Other and Eliminations | Total | |||||||||||||||||
Net sales | $ | 1,826 | $ | 1,632 | $ | 863 | $ | 618 | $ | 52 | $ | 4,991 | |||||||||||
Shipments | |||||||||||||||||||||||
Rolled products | 535 | 447 | 278 | 181 | — | 1,441 | |||||||||||||||||
Non-rolled products | 7 | 19 | — | 35 | — | 61 | |||||||||||||||||
Total shipments | 542 | 466 | 278 | 216 | — | 1,502 |
Selected Operating Results Six Months Ended September 30, 2011 | North America | Europe | Asia | South America | Other and Eliminations | Total | |||||||||||||||||
Net sales | $ | 2,140 | $ | 2,112 | $ | 1,034 | $ | 621 | $ | 86 | $ | 5,993 | |||||||||||
Shipments | |||||||||||||||||||||||
Rolled products | 562 | 465 | 284 | 178 | — | 1,489 | |||||||||||||||||
Non-rolled products | 8 | 46 | — | 20 | — | 74 | |||||||||||||||||
Total shipments | 570 | 511 | 284 | 198 | — | 1,563 |
Changes in Segment income | North America | Europe(A) | Asia | South America | Total | ||||||||||||||
Segment Income - Six Months Ended September 30, 2011 | $ | 230 | $ | 189 | $ | 106 | $ | 82 | $ | 607 | |||||||||
Volume | (23 | ) | (13 | ) | (7 | ) | 3 | (40 | ) | ||||||||||
Conversion premium and product mix | 46 | (35 | ) | 1 | 4 | 16 | |||||||||||||
Conversion costs(B) | (46 | ) | 37 | (5 | ) | 6 | (8 | ) | |||||||||||
Metal price lag | 12 | — | 6 | (8 | ) | 10 | |||||||||||||
Foreign exchange | 8 | (11 | ) | (5 | ) | 4 | (4 | ) | |||||||||||
Primary metal production | — | — | — | 5 | 5 | ||||||||||||||
Selling, general & administrative and research & development costs(C) | (13 | ) | (10 | ) | (9 | ) | (4 | ) | (36 | ) | |||||||||
Other changes | (2 | ) | (9 | ) | (2 | ) | (1 | ) | (14 | ) | |||||||||
Segment Income - Six Months Ended September 30, 2012 | $ | 212 | $ | 148 | $ | 85 | $ | 91 | $ | 536 |
(A) | Included in the Europe "Segment income" for the six months ended September 30, 2011 and the first half of the six months ended September 30, 2012 were the operating results of three foil and packaging plants (Rugles, France; Dudelange, Luxembourg; and Berlin, Germany) that we sold on June 28, 2012. The change to "Segment income" for the six months ended September 30, 2012 compared to the same period in prior year was unfavorable $3 million. The sale of these plants resulted in declines in volume, conversion premium and product mix, and conversion costs of $8 million, $27 million and $26 million, respectively, when comparing the six months ended September 30, 2012 with the same period in prior year. The impact on other items were immaterial. |
(B) | Conversion costs include expenses incurred in production such as direct and indirect labor, energy, freight, scrap usage, alloys and hardeners, coatings, alumina, melt loss, the incremental benefit of used beverage cans (UBCs) and other metal costs. Fluctuations in this component reflect cost efficiencies (inefficiencies) during the period as well as cost inflation (deflation). |
(C) | Selling, general & administrative costs and research & development costs include costs incurred directly by each segment and all corporate related costs, which are allocated to each of our segments. These costs increased in the second quarter of fiscal 2013 compared to the second quarter of fiscal 2012 for the following reasons: 1) higher costs associated with the implementation of our global ERP system; 2) higher start-up costs associated with our various strategic investment projects; and 3) higher employment costs, which include wage inflation, higher pension costs, and higher LTIP costs. Other significant fluctuations are discussed below. |
Six Months Ended September 30, | |||||||
2012 | 2011 | ||||||
North America | $ | 212 | $ | 230 | |||
Europe | 148 | 189 | |||||
Asia | 85 | 106 | |||||
South America | 91 | 82 | |||||
Total Segment income | 536 | 607 | |||||
Depreciation and amortization | (142 | ) | (170 | ) | |||
Interest expense and amortization of debt issuance costs | (147 | ) | (154 | ) | |||
Adjustment to eliminate proportional consolidation | (20 | ) | (25 | ) | |||
Unrealized (losses) gains on change in fair value of derivative instruments, net | (11 | ) | 25 | ||||
Realized gains on derivative instruments not included in segment income | 2 | 2 | |||||
Restructuring charges, net | (21 | ) | (30 | ) | |||
Gain on assets held for sale | 3 | — | |||||
Other (costs) income, net | (1 | ) | 4 | ||||
Income before income taxes | 199 | 259 | |||||
Income tax provision | 58 | 52 | |||||
Net income | 141 | 207 | |||||
Net income attributable to noncontrolling interests | 1 | 25 | |||||
Net income attributable to our common shareholder | $ | 140 | $ | 182 |
September 30, 2012 | March 31, 2012 | ||||||
Cash and cash equivalents | $ | 227 | $ | 317 | |||
Overdrafts | (3 | ) | — | ||||
Availability under the ABL facility | 695 | 704 | |||||
Total liquidity | $ | 919 | $ | 1,021 |
Six Months Ended September 30, | |||||||||||
2012 | 2011 | Change | |||||||||
Net cash provided by operating activities | $ | 117 | $ | 56 | $ | 61 | |||||
Net cash used in investing activities | (304 | ) | (119 | ) | (185 | ) | |||||
Less: Proceeds from sales of assets | (7 | ) | (1 | ) | (6 | ) | |||||
Free cash flow | $ | (194 | ) | $ | (64 | ) | $ | (118 | ) | ||
Ending cash and cash equivalents | $ | 227 | $ | 286 | $ | 139 |
Six Months Ended September 30, | |||||||||||
2012 | 2011 | Change | |||||||||
Capital expenditures | $ | (345 | ) | $ | (174 | ) | $ | (171 | ) | ||
Proceeds from settlement of other undesignated derivative instruments, net | 31 | 57 | (26 | ) | |||||||
Proceeds from sales of assets, third parties | 5 | 1 | 4 | ||||||||
Proceeds from sales of assets, related parties | 2 | — | 2 | ||||||||
Proceeds from investment in and advances to non-consolidated affiliates, net | 1 | 1 | — | ||||||||
Proceeds (outflows) from related party loans receivable, net | 2 | (4 | ) | 6 | |||||||
Net cash used in investing activities | $ | (304 | ) | $ | (119 | ) | $ | (185 | ) |
Six Months Ended September 30, | |||||||||||
2012 | 2011 | Change | |||||||||
Proceeds from issuance of debt, third parties | $ | 46 | $ | 6 | $ | 40 | |||||
Principal payments, third parties | (11 | ) | (11 | ) | — | ||||||
Short-term borrowings, net | 54 | 48 | 6 | ||||||||
Dividends, noncontrolling interest | (2 | ) | (1 | ) | (1 | ) | |||||
Net cash provided by financing activities | $ | 87 | $ | 42 | $ | 45 |
• | does not reflect the company’s cash expenditures or requirements for capital expenditures or capital commitments; |
• | does not reflect changes in, or cash requirements for, the company’s working capital needs; and |
• | does not reflect any costs related to the current or future replacement of assets being depreciated and amortized. |
• | as a measure of operating performance to assist us in comparing our operating performance on a consistent basis because it removes the impact of items not directly resulting from our core operations; |
• | for planning purposes, including the preparation of our internal annual operating budgets and financial projections; |
• | to evaluate the performance and effectiveness of our operational strategies; and |
• | as a basis to calculate incentive compensation payments for our key employees. |
• | relationships with, and financial and operating conditions of, our customers, suppliers and other stakeholders; |
• | changes in the prices and availability of aluminum (or premiums associated with such prices) or other materials and raw materials we use; |
• | fluctuations in the supply of, and prices for, energy in the areas in which we maintain production facilities; |
• | our ability to access financing for future capital requirements; |
• | the level of our indebtedness and our ability to generate cash; |
• | deterioration of our ratings by a credit agency; |
• | changes in the relative values of various currencies and the effectiveness of our currency hedging activities; |
• | union disputes and other employee relations issues; |
• | factors affecting our operations, such as litigation, environmental remediation and clean-up costs, labor relations and negotiations, breakdown of equipment and other events; |
• | changes in general economic conditions including deterioration in the global economy, particularly sectors in which our customers operate; |
• | changes in the fair value of derivative instruments or the failure of counterparties to our derivative instruments to honor their agreements; |
• | the capacity and effectiveness of our metal hedging activities; |
• | availability of production capacity; |
• | impairment of our goodwill and other intangible assets; |
• | continuing obligations and other relationships resulting from our spin-off from Alcan Inc.; |
• | the impact of restructuring efforts in the future; |
• | economic, regulatory and political factors within the countries in which we operate or sell our products, including changes in duties or tariffs; |
• | competition from other aluminum rolled products producers as well as from substitute materials such as steel, glass, plastic and composite materials; |
• | cyclical demand and pricing within the principal markets for our products as well as seasonality in certain of our customers’ industries; and |
• | changes in interest rates that have the effect of increasing the amounts we pay under our principal credit agreement and other financing agreements. |
Change in Price | Change in Fair Value | |||||
Electricity | (10 | )% | $ | — | ||
Natural Gas | (10 | )% | (1 | ) |
Change in Exchange Rate | Change in Fair Value | |||||
Currency measured against the U.S. dollar | ||||||
Brazilian real | (10 | )% | $ | (47 | ) | |
Euro | 10 | % | (19 | ) | ||
Korean won | (10 | )% | (5 | ) | ||
Canadian dollar | (10 | )% | (1 | ) | ||
British pound | (10 | )% | (5 | ) | ||
Swiss franc | (10 | )% | (4 | ) |
Change in Rate | Change in Fair Value | ||||||
Interest Rate Contracts | |||||||
Asia - KRW-CD-3200 | (100 | ) | bps | $ | (1 | ) |
Exhibit No. | Description | ||
2.1 | Arrangement Agreement by and among Hindalco Industries Limited, AV Aluminum Inc. and Novelis Inc., dated as of February 10, 2007 (incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K filed on February 13, 2007) (File No. 001-32312)) | ||
3.1 | Restated Certificate and Articles of Amalgamation of Novelis Inc. (incorporated by reference to Exhibit 3.1 to our Quarterly Report on Form 10-Q filed on November 10, 2010 (File No. 001-32312)) | ||
3.2 | Novelis Inc. Amended and Restated Bylaws, adopted as of July 24, 2008 (incorporated by reference to Exhibit 3.2 to our Current Report on Form 8-K filed on July 25, 2008 (File No. 001-32312)) | ||
4.1 | Supplemental Indenture, relating to the 8.375% Senior Notes due 2017, among Novelis Inc., Novelis Sheet Ingot GmbH, and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of August 8, 2012 (incorporated by reference to Exhibit 4.1 to our Quarterly Report on Form 10-Q filed on August 14, 2012 (File No. 001-32312)) | ||
4.2 | Supplemental Indenture, relating to the 8.75% Senior Notes due 2020, among Novelis Inc., Novelis Sheet Ingot GmbH, and The Bank of New York Mellon Trust Company, N.A., as Trustee dated as of August 8, 2012 (incorporated by reference to Exhibit 4.2 to our Quarterly Report on Form 10-Q filed on August 14, 2012 (File No. 001-32312)) | ||
10.1 | Amendment No. 2 to Credit Facility, dated as of October 12, 2012, by and among Novelis Inc., AV Metals Inc., the Subsidiary Guarantors Party thereto, Novelis Italia S.P.A. and Bank of America, N.A., as Administrative Agent | ||
10.2 | Increase Joinder Agreement, dated as of October 12, 2012, by and among Novelis Inc., AV Metals Inc., the Subsidiary Guarantors Party thereto, Bank of America, N.A., as Administrative Agent and the Lenders Signatory thereto | ||
31.1 | Section 302 Certification of Principal Executive Officer | ||
31.2 | Section 302 Certification of Principal Financial Officer | ||
32.1 | Section 906 Certification of Principal Executive Officer | ||
32.2 | Section 906 Certification of Principal Financial Officer | ||
101.INS | XBRL Instance Document | ||
101.SCH | XBRL Taxonomy Extension Schema Document | ||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | ||
101.DEF | XBRL Taxonomy Extension Definition Linkbase | ||
101.LAB | XBRL Taxonomy Extension Label Linkbase | ||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
NOVELIS INC. | |||
By: | /s/ Steven Fisher | ||
Steven Fisher | |||
Chief Financial Officer | |||
(Principal Financial Officer and Authorized Officer) | |||
By | /s/ Robert P. Nelson | ||
Robert P. Nelson | |||
Vice President Finance — Controller | |||
(Principal Accounting Officer) |
Exhibit No. | Description | ||
2.1 | Arrangement Agreement by and among Hindalco Industries Limited, AV Aluminum Inc. and Novelis Inc., dated as of February 10, 2007 (incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K filed on February 13, 2007) (File No. 001-32312)) | ||
3.1 | Restated Certificate and Articles of Amalgamation of Novelis Inc. (incorporated by reference to Exhibit 3.1 to our Quarterly Report on Form 10-Q filed on November 10, 2010 (File No. 001-32312)) | ||
3.2 | Novelis Inc. Amended and Restated Bylaws, adopted as of July 24, 2008 (incorporated by reference to Exhibit 3.2 to our Current Report on Form 8-K filed on July 25, 2008 (File No. 001-32312)) | ||
4.1 | Supplemental Indenture, relating to the 8.375% Senior Notes due 2017, among Novelis Inc., Novelis Sheet Ingot GmbH, and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of August 8, 2012 (incorporated by reference to Exhibit 4.1 to our Quarterly Report on Form 10-Q filed on August 14, 2012 (File No. 001-32312)) | ||
4.2 | Supplemental Indenture, relating to the 8.75% Senior Notes due 2020, among Novelis Inc., Novelis Sheet Ingot GmbH, and The Bank of New York Mellon Trust Company, N.A., as Trustee dated as of August 8, 2012 (incorporated by reference to Exhibit 4.2 to our Quarterly Report on Form 10-Q filed on August 14, 2012 (File No. 001-32312)) | ||
10.1 | Amendment No. 2 to Credit Facility, dated as of October 12, 2012, by and among Novelis Inc., AV Metals Inc., the Subsidiary Guarantors Party thereto, Novelis Italia S.P.A. and Bank of America, N.A., as Administrative Agent | ||
10.2 | Increase Joinder Agreement, dated as of October 12, 2012, by and among Novelis Inc., AV Metals Inc., the Subsidiary Guarantors Party thereto, Bank of America, N.A., as Administrative Agent and the Lenders Signatory thereto | ||
31.1 | Section 302 Certification of Principal Executive Officer | ||
31.2 | Section 302 Certification of Principal Financial Officer | ||
32.1 | Section 906 Certification of Principal Executive Officer | ||
32.2 | Section 906 Certification of Principal Financial Officer | ||
101.INS | XBRL Instance Document | ||
101.SCH | XBRL Taxonomy Extension Schema Document | ||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | ||
101.DEF | XBRL Taxonomy Extension Definition Linkbase | ||
101.LAB | XBRL Taxonomy Extension Label Linkbase | ||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
Test Period | Senior Secured Net Leverage Ratio |
July 1, 2012 and thereafter | 3.25 to 1.0 |
NOVELIS INC., as the Borrower | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title Authorized Signatory | |
AV METALS INC., as Holdings | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title Authorized Signatory | |
NOVELIS CORPORATION, as U.S. Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title Authorized Signatory | |
NOVELIS PAE CORPORATION, as U.S. Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title Authorized Signatory | |
NOVELIS BRAND LLC, as U.S. Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title Authorized Signatory | |
NOVELIS SOUTH AMERICA HOLDINGS LLC, as U.S. Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title Authorized Signatory | |
ALUMINUM UPSTREAM HOLDINGS LLC, as U.S. Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title Authorized Signatory |
NOVELIS ACQUISITIONS LLC, as U.S. Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title Authorized Signatory |
NOVELIS NORTH AMERICA HOLDINGS INC., as U.S. Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title Authorized Signatory | |
NOVELIS DELAWARE LLC, as U.S. Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title Authorized Signatory |
NOVELIS UK LTD, as U.K. Guarantor | ||
By: | /s/ Randal P. Miller | |
Name: Randal P. Miller | ||
Title Authorized Signatory | ||
NOVELIS SERVICES LIMITED, as U.K. Guarantor | ||
By: | /s/ Randal P. Miller | |
Name: Randal P. Miller | ||
Title Authorized Signatory | ||
NOVELIS AG, as Swiss Guarantor | ||
By: | /s/ Randal P. Miller | |
Name: Randal P. Miller | ||
Title Authorized Signatory | ||
NOVELIS CAST HOUSE TECHNOLOGY LTD., as Canadian Guarantor | ||
By: | /s/ Randal P. Miller | |
Name: Randal P. Miller | ||
Title Authorized Signatory | ||
4260848 CANADA INC., as Canadian Guarantor | ||
By: | /s/ Randal P. Miller | |
Name: Randal P. Miller | ||
Title Authorized Signatory | ||
4260856 CANADA INC., as Canadian Guarantor | ||
By: | /s/ Randal P. Miller | |
Name: Randal P. Miller | ||
Title Authorized Signatory |
NOVELIS NO. 1 LIMITED PARTNERSHIP, as Canadian Guarantor | |
By: 4260848 CANADA INC. | |
Its: General Partner | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title Authorized Signatory | |
8018227 CANADA INC., as Canadian Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title Authorized Signatory | |
8018243 CANADA LIMITED, as Canadian Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title Authorized Signatory | |
NOVELIS EUROPE HOLDINGS LIMITED, as U.K. Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title Authorized Signatory | |
NOVELIS SWITZERLAND SA, as Swiss Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title Authorized Signatory | |
NOVELIS DEUTSCHLAND GMBH, as German Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title Authorized Signatory | |
NOVELIS SHEET INGOT GMBH, as German Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title Authorized Signatory |
NOVELIS MADEIRA UNIPESSOAL, LDA, as Madeira Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title Authorized Signatory |
NOVELIS PAE S.A.S., as French Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title Authorized Signatory | |
NOVELIS DO BRASIL LTDA., as Brazilian Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title Authorized Signatory |
Signed and Delivered as a Deed for and on behalf of | |
NOVELIS ALUMINIUM HOLDING COMPANY, | |
by its duly authorised attorney, | |
as Irish Guarantor, | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title Authorized Signatory | |
in the presence of: | |
By: | /s/ Leslie J. Parrette, Jr. |
Name: Leslie J. Parrette, Jr. | |
Title Authorized Signatory |
NOVELIS ITALIA S.P.A., as Third Party Security Provider | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title: Authorized Signatory |
BANK OF AMERICA, N.A., as Administrative Agent | |
By: | /s/ Bridgett J. Manduk |
Name: Bridgett J. Manduk | |
Title: Assistant Vice President | |
Re: | Novelis Inc. Amendment No. 2 to Credit Agreement |
(a) | Term Loans. Except as set forth in this Agreement, the terms of each Increase Term Loan advanced pursuant to this Agreement (including, without limitation, the Applicable Margin with respect thereto) shall be identical to the terms of the Initial Term Loans as in effect under the Credit Agreement on the date hereof; provided that the Increase Term Loans shall be subject to the provisions of Section 3 below. The Increase Term Loans shall be construed to be in the same Class as the Initial Term Loans. |
(b) | Proposed Borrowing. This Agreement represents the Borrower’s request to borrow Increase Term Loans from the Increase Term Loan Lenders as follows (the “Proposed Borrowing”): |
i. Class of Proposed Borrowing: | Incremental Term Loan |
ii. Principal amount of Proposed Borrowing: | $80,000,000 |
iii. Date of Proposed Borrowing: (which is a Business Day) | October 12, 2012 |
iv. Type of Borrowing | Eurodollar Rate Borrowing |
v. Applicable Margin | Same as Initial Term Loans |
vi. Interest Period and the last day thereof | See Section 3(a) below |
vii. Prepayments | The Increase Term Loans shall be subject to mandatory prepayments and optional prepayments on the same basis as the Initial Term Loans. |
viii. Amortization | The Borrower shall pay to the Administrative Agent, for the account of the Increase Term Loan Lenders, on the dates set forth on Schedule II hereto, a principal amount of the Increase Term Loans equal to the amount set forth on Schedule II hereto under the caption “Increase Term Loan Amount” for such date (as adjusted from time to time pursuant to Section 2.10(g) of the Credit Agreement), together in each case with accrued and unpaid interest on the principal amount to be paid to but excluding the date of such payment. |
ix. Maturity Date | March 10, 2017 (Same as Initial Term Loans). |
x. Upfront Fee | The Borrower agrees to pay on the Increase Effective Date to each Increase Term Loan Lender party to this Agreement, as fee compensation for the funding of such Increase Term Loan Lender’s Increase Term Loan, a non-refundable funding fee in an amount equal to 0.25% of the stated principal amount of such Increase Term Loan Lender’s Increase Term Loan funded on the Increase Effective Date, which fee may be paid with the proceeds of the Increase Term Loans. |
xi. Funds are requested to be disbursed to Borrower’s account with Deutsche Bank NY: | Account No. 00-472-083 |
(a) | Each Increase Term Loan Lender acknowledges and agrees that upon its execution of this Agreement and the making of Increase Term Loans, the Increase Term Loan Lender shall become a “Lender” under, and for all purposes of, the Credit Agreement and the other Loan Documents, and shall be subject to and bound by the terms thereof, and shall perform all the obligations of and shall have all rights of a Lender thereunder. |
(b) | Subject to the satisfaction of the terms and conditions hereof, each Increase Term Loan Lender will provide funds in Dollars equal in amount to its Increase Term Loan Commitment to such account as the Administrative Agent may designate. Administrative Agent will transfer such funds so received to the Borrower’s deposit account described in clause 1(b)(xi) above. |
(c) | The proceeds of the Increase Term Loans advanced pursuant to this Agreement will be utilized to redeem the Borrower's 7.25% senior notes due 2015 (the “Specified Notes”), for the payment of fees and expenses relating to the Increase Term Loans and certain amendments to the Credit Agreement, and/or for general corporate purposes. |
(a) | The Increase Term Loans advanced pursuant to this Agreement shall be subject to the provisions of the Credit Agreement and the other Loan Documents and shall constitute and be deemed “Term Loans” under and pursuant to the provisions of the Credit Agreement and the other Loan Documents and shall share ratably in the benefits of the Credit Agreement and the other Loan Documents with all other Term Loans and, except as expressly set forth in this Agreement, shall be identical in all respect to the Initial Term Loans (including as to maturity date and Applicable Margin); provided that the Borrower agrees to pay each Increase Term Loan Lender on the Increase Effective Date an upfront fee equal to 0.25% of the aggregate amount of the Increase Term Loan Commitments of such Increase Term Loan Lender. Notwithstanding any provision of the Credit Agreement to the contrary, during the Stub Interest Period (as defined below), the Eurodollar Rate applicable to the Increase Term Loans advanced pursuant to this Agreement shall be equal to the Eurodollar Rate applicable to the Initial Term Loans that are Eurodollar Rate Borrowings outstanding on the Increase Effective Date. For purposes of this Agreement, the term “Stub Interest Period” shall mean the period beginning on the Increase Effective Date and ending on the last day of the Interest Period in effect on the Increase Effective Date with respect to the then outstanding Initial Term Loans that are Eurodollar Rate Borrowings |
(b) | All conversions to Base Rate Borrowings or Eurodollar Rate Borrowings or continuations of Eurodollar Rate Borrowings shall be ratable among the Initial Term Loans and the Increase Term Loans. |
(a) | Execution of Counterparts. The Administrative Agent shall have received counterparts of (i) this Agreement executed by (A) the Borrower, (B) Holdings, (C) the Subsidiary Guarantors, (D) the Third Party Security Provider, (E) the Administrative Agent and (F) the Increase Term Loan Lenders and (ii) amendments to the other Loan Documents or other documents as may be necessary or appropriate, in the opinion of the Administrative Agent, to effect the provisions of this Agreement executed by the parties thereto. |
(b) | Corporate Documents. The Administrative Agent shall have received: |
(c) | No Default. No Default shall have occurred and be continuing or would result from the borrowings to be made on the Increase Effective Date or from the application of the proceeds therefrom. |
(d) | Representations and Warranties. Each of the representations and warranties made by any Loan Party set forth in ARTICLE III of the Credit Agreement and Section 6 of this Agreement or in any other Loan Document shall be true and correct in all material respects on and as of the Increase Effective Date with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date, in which case such representation and warranty shall have been true and correct in all material respects as of such earlier date. Each of the representations and warranties made by the Third Party Security Provider set forth in and Section 7 of this Agreement or in any other Loan Document shall be true and correct in all material respects on and as of the Increase Effective Date with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date, in which case such representation and warranty shall have been true and correct in all material respects as of such earlier date. |
(e) | No Legal Bar. With respect to each Lender, no order, judgment or decree of any Governmental Authority shall purport to restrain such Lender from making any Loans to be made by it. No injunction or other restraining order shall have been issued, shall be pending or noticed with respect to any action, suit or proceeding seeking to enjoin or otherwise prevent the consummation of, or to recover any damages or obtain relief as a result of, the transactions contemplated by the Credit Agreement or the making of Loans thereunder. |
(f) | Senior Secured Net Leverage Ratio. After giving pro forma effect to the borrowings to be made on the Increase Effective Date and to the redemption of the Specified Notes or application of funds made with the proceeds of such borrowings, the Senior Secured Net Leverage Ratio at such date shall be not greater than 2.5 to 1.0 (provided that in calculating the Senior Secured Net Leverage Ratio, the proceeds of the Increase Term Loans shall be excluded from Unrestricted Cash). |
(g) | Increase Effective Date Certificate. The Administrative Agent shall have received a certificate, dated the Increase Effective Date and signed by a Responsible Officer of the Borrower, confirming compliance with the conditions precedent set forth in (i) this Section 4 and (ii) Section 4.02 of the Credit Agreement as of the Increase Effective Date. |
(h) | Legal Opinions. The Administrative Agent shall have received a favorable written opinion of Torys LLP, special counsel for the Loan Parties (A) dated the Increase Effective Date, (B) addressed to the Administrative Agent and the Lenders, (C) covering such matters incident to this Agreement, the Credit Agreement as amended by this Agreement, the other Loan Documents executed as of the Increase Effective Date and the transactions contemplated hereby and thereby as the Administrative Agent may reasonably require and (D) be in form and substance reasonably satisfactory to the Administrative Agent. |
(i) | Payment of Fees and Expenses. The Borrower shall have paid all fees agreed to between the joint lead arrangers of the Increase Term Loans (in such capacities, the “Arrangers”), the Administrative Agent and the Borrower in connection with this Agreement and, to the extent invoiced prior to the date hereof, all reasonable out-of-pocket expenses incurred by the Arrangers and the Administrative Agent, including the reasonable fees, charges and disbursements of Skadden, Arps, Slate, Meagher and Flom LLP, as counsel for the Arrangers and the Administrative Agent and any other counsel for the Arrangers and the Administrative Agent, in connection with this Agreement, and for all services related to the Credit Agreement from and after the Closing Date. |
(j) | Solvency. At the time of and immediately following the borrowings to be made on the Increase Effective Date and after giving effect to the application of the proceeds of the Increase Term Loans and the operation of the Contribution, Intercompany, Contracting and Offset Agreement, (a) the fair value of the assets of each Loan Party (individually and on a consolidated basis with its Subsidiaries) will exceed its debts and liabilities, subordinated, contingent, prospective or otherwise; (b) the present fair saleable value of the property of each Loan Party (individually and on a consolidated basis with its Subsidiaries) will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent, prospective or otherwise, as such debts and other liabilities become absolute and matured; (c) each Loan Party (individually and on a consolidated basis with its Subsidiaries) will be able to pay its debts and liabilities, subordinated, contingent, prospective or otherwise, as such debts and liabilities become absolute and matured; (d) each Loan Party (individually and on a consolidated basis with its Subsidiaries) will not have unreasonably small capital with which to conduct its business in which it is engaged as such business is now conducted and is proposed to be conducted following the Increase Effective Date; and (e) each Loan Party is not “insolvent” as such term is defined under any bankruptcy, insolvency or similar laws of any jurisdiction in which any Loan Party is organized or incorporated (as applicable), or otherwise unable to pay its debts as they fall due. |
(a) | Date-Down Endorsements. With respect to each Loan Party, upon the reasonable request of the Administrative Agent or the Collateral Agent, at the expense of the Borrower, with respect to each Mortgage of property located in the United States, use commercially reasonable efforts to promptly deliver to the Collateral Agent customary date-down endorsements from the Title Company with respect to the Collateral Agent’s lender’s policies of title insurance for the Mortgaged Properties which shall, among other things, confirm that the lien and priority of each Mortgage shall be unaffected as a result of the amendments to each Mortgage of property located in the United States. |
(b) | Further Assurances of Loan Parties. With respect to each Loan Party, at any time or from time to time upon the reasonable request of the Administrative Agent or the Collateral Agent, at the expense of the Borrower, promptly execute, acknowledge and deliver such further documents and do such other acts and things as the Administrative Agent or the Collateral Agent may reasonably request in order to effect fully the purposes of this Agreement and the other Loan Documents including without limitation, any actions that the Administrative Agent may deem reasonably necessary or advisable to ensure that the Obligations represented by the Increase Term Loans are guaranteed by all Guarantors and secured by all Collateral. In furtherance and not in limitation of the foregoing, the Loan Parties shall take such actions as the Administrative Agent or the Collateral Agent may reasonably request from time to time (including, without limitation, the execution and delivery of amendments or supplements to the guaranties, security agreements, pledge agreements, mortgages, deeds of trust, landlord’s consents and estoppels, stock powers, financing statements and other documents, the filing or recording of any of the foregoing, and opinions covering any of the foregoing) to ensure that the Secured Obligations (including without limitation, those Obligations represented by the Increase Term Loans) are guaranteed by the Guarantors, on a First Priority basis, and are secured by substantially all of the property (other than such property specifically excluded by the terms of the Credit Agreement and the other Loan Documents) of the Loan Parties on a First Priority basis; provided that the Loan Parties’ using commercially reasonable efforts with respect to obtaining any such agreements from Persons who are not a Loan Party or in the control of any Loan Party shall satisfy the requirements of this covenant. The Borrower and each Subsidiary Guarantor agree to use commercially reasonable efforts to cause their counsels to deliver such legal opinions, lien searches, title insurance and other documentation as the Administrative Agent may reasonably request in connection with or relating to the |
(c) | Further Assurances of Third Party Security Provider. With respect to the Third Party Security Provider, at any time or from time to time upon the reasonable request of the Administrative Agent or the Collateral Agent, at the expense of the Borrower, promptly execute, acknowledge and deliver such further documents and do such other acts and things as the Administrative Agent or the Collateral Agent may reasonably request in order to effect fully the purposes of this Agreement and the other Loan Documents including without limitation, any actions that the Administrative Agent may deem reasonably necessary or advisable to insure that the Obligations represented by the Increase Term Loans are secured by all Collateral of the Third party Security Provider. In furtherance and not in limitation of the foregoing, the Third Party Security Provider shall take such actions as the Administrative Agent or the Collateral Agent may reasonably request from time to time (including, without limitation, the execution and delivery of amendments or supplements to the security agreements, pledge agreements and other documents, the filing or recording of any of the foregoing, and opinions covering any of the foregoing) to ensure that the Secured Obligations (including without limitation, those Obligations represented by the Increase Term Loans) are secured by the Collateral pledged by the Third Party Security Provider on a First Priority basis; provided that the Third Party Security Provider’s using commercially reasonable efforts with respect to obtaining any such agreements from Persons who are not a Loan Party or the Third Party Security Provider or in the control of any Loan Party or the Third Party Security Provider shall satisfy the requirements of this covenant. The Third Party Security provider agree to use commercially reasonable efforts to cause their counsels to deliver such legal opinions, lien searches, and other documentation as the Administrative Agent may reasonably request in connection with or relating to the foregoing. For the avoidance of doubt, any security provided under this Section 5 shall be concurrently provided to the Revolving Credit Secured Parties to the extent required by the Intercreditor Agreement. |
(a) | Power; Authorization; Enforceable Obligations. Each Loan Party has the requisite power and authority to enter into and deliver this Agreement. The execution, delivery and performance of this Agreement has been duly authorized by all necessary action on the part of each Loan Party. Each of this Agreement and the Credit Agreement, as amended by this Agreement, constitutes a legal, |
(b) | No Legal Bar. The execution, delivery and performance of this Agreement do not and will not (i) violate any provision of any material Requirement of Law applicable to any Loan Party, any of the Organizational Documents of any Loan Party, or any order, judgment or decree of any court or other Governmental Authority binding on any Loan Party or, except for violations that could not reasonably be expected to result in a Material Adverse Effect, any contractual obligation of any Loan Party or (ii) result in or require the creation or imposition of any Lien upon any of the properties or assets of any Loan Party (other than the Liens created by the Loan Documents or the Revolving Credit Security Documents). |
(c) | Accuracy of Representations and Warranties. Each of the representations and warranties made by any Loan Party set forth in ARTICLE III of the Credit Agreement or in any other Loan Document is true and correct in all material respects on and as of the Increase Effective Date with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date, in which case such representation and warranty shall have been true and correct in all material respects as of such earlier date. |
(d) | No Default. No Default has occurred and is continuing or would result from the borrowings to be made on the Increase Effective Date or from the application of the proceeds therefrom. |
(e) | Compliance with Credit Agreement; Net Yield. The Increase Term Loans requested hereunder are permitted to be made under the terms of the Credit Agreement and there shall not be any Incremental Net Yield as a result of the Increase Term Loan Borrowing. |
(f) | Solvency. At the time of and immediately following the borrowings to be made on the Increase Effective Date and after giving effect to the application of the proceeds of the Increase Term Loans and the operation of the Contribution, Intercompany, Contracting and Offset Agreement, (a) the fair value of the assets of each Loan Party (individually and on a consolidated basis with its Subsidiaries) will exceed its debts and liabilities, subordinated, contingent, prospective or otherwise; (b) the present fair saleable value of the property of each Loan Party (individually and on a consolidated basis with its Subsidiaries) will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent, prospective or otherwise, as |
(a) | Power; Authorization; Enforceable Obligations. The Third Party Security Provider has the requisite power and authority to enter into and deliver this Agreement. The execution, delivery and performance of this Agreement has been duly authorized by all necessary action on the part of the Third Party Security Provider. Each of this Agreement and each other Loan Document to which the Third Party Security Provider is a party constitutes a legal, valid and binding obligation of the Third Party Security Provider, enforceable against the Third Party Security Provider in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability. |
(b) | No Legal Bar. The execution, delivery and performance of this Agreement do not and will not (i) violate any provision of any material Requirement of Law applicable to the Third Party Security Provider, any of the Organizational Documents of the Third Party Security Provider, or any order, judgment or decree of any court or other Governmental Authority binding on the Third Party Security Provider or, except for violations that could not reasonably be expected to result in a Material Adverse Effect, any contractual obligation of the Third Party Security Provider or (ii) result in or require the creation or imposition of any Lien upon any of the properties or assets of the Third Party Security Provider (other than the Liens created by the Loan Documents or the Revolving Credit Security Documents). |
(a) | Validity of Obligations. Each of the Loan Parties and the Third Party Security Provider hereby consents to this Agreement and the execution, delivery and performance of the other Loan Documents, in each case to the extent party to such Loan Document, to be executed in connection therewith. Each Loan Party acknowledges |
(b) | Validity of Guarantees. |
1. | Each Guarantor, as a Guarantor under ARTICLE VII of the Credit Agreement hereby (i) acknowledges and agrees to the terms of this Agreement and (ii) confirms and agrees that, its guarantee under ARTICLE VII of the Credit Agreement is, and shall continue to be, in full force and effect, and shall apply to all Secured Obligations (including all Increase Term Loans) and its guarantee under ARTICLE VII of the Credit Agreement is hereby ratified and confirmed in all respects. |
2. | Holdings and each Guarantor that is a Foreign Subsidiary, as a guarantor under any Foreign Guarantee to which it is a party hereby (i) acknowledges and agrees to the terms of this Agreement and (ii) confirms and agrees that, its guarantees under any Foreign Guarantee to which it is a party are, and shall continue to be, in full force and effect, and shall apply to all Secured Obligations (including all Increase Term Loans) and its guarantees under any such Foreign Guarantees are hereby ratified and confirmed in all respects, except that, on and after the effectiveness of this Agreement, each reference in each Foreign Guarantee to the “Credit Agreement”, “thereunder”, “thereof” or words of like import shall mean and be a reference to the Credit Agreement, as amended by this Agreement. |
(c) | Validity of Liens and Loan Documents. Each Loan Party and the Third Party Security Provider hereby ratifies and reaffirms the validity and enforceability (without defense, counterclaim or offset of any kind) of the Liens and security interests granted by it to secure any of the Secured Obligations by any Loan Party and the Third Party Security Provider to the Collateral Agent, for the benefit of the Secured Parties, pursuant to the Loan Documents to which any Loan Party or the Third Party Security Provider is a party and hereby confirms and agrees that notwithstanding the effectiveness of this Agreement, and except as expressly amended by this Agreement, each Loan Document is, and shall continue to be, in full force and effect and each is hereby ratified and confirmed in all respects, except that, on and after the effectiveness of this Agreement, each reference in the Loan Documents to the “Credit Agreement”, “thereunder”, “thereof” (and each reference in the Credit Agreement to this “Agreement”, “hereunder” or “hereof”) or words of like import shall mean and be a reference to the Credit Agreement as amended by this Agreement; provided that with reference to the security interest created under the Security Documents governed by Italian law (the “Italian Pledge Agreements”), the Secured Obligations shall be limited to those described under the Italian Pledge Agreements. |
(a) | It has received a copy of the Credit Agreement and the other Loan Documents, together with copies of the financial statements referred to therein and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Agreement; |
(b) | It will, independently and without reliance upon the Administrative Agent or any other Increase Term Loan Lender or Agent and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement; |
(c) | It appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under the Credit Agreement and the other Loan Documents as are delegated to the Administrative Agent by the terms thereof, together with such powers as are reasonably incidental thereto; and |
(d) | It agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender of Increase Term Loans. |
NOVELIS INC., as the Borrower | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title: Authorized Signatory | |
AV METALS INC., as Holdings | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title: Authorized Signatory | |
NOVELIS CORPORATION, as U.S. Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title: Authorized Signatory | |
NOVELIS PAE CORPORATION, as U.S. Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title: Authorized Signatory | |
NOVELIS BRAND LLC, as U.S. Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title: Authorized Signatory | |
NOVELIS SOUTH AMERICA HOLDINGS LLC, as U.S. Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title: Authorized Signatory | |
ALUMINUM UPSTREAM HOLDINGS LLC, as U.S. Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title: Authorized Signatory | |
NOVELIS ACQUISITIONS LLC, as U.S. Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title: Authorized Signatory | |
NOVELIS NORTH AMERICA HOLDINGS INC., as U.S. Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title: Authorized Signatory | |
NOVELIS DELAWARE LLC, as U.S. Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title: Authorized Signatory | |
NOVELIS UK LTD, as U.K. Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title: Authorized Signatory | |
NOVELIS SERVICES LIMITED, as U.K. Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title: Authorized Signatory | |
NOVELIS AG, as Swiss Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title: Authorized Signatory | |
NOVELIS CAST HOUSE TECHNOLOGY LTD., as Canadian Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title: Authorized Signatory | |
4260848 CANADA INC., as Canadian Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title: Authorized Signatory | |
4260856 CANADA INC., as Canadian Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title: Authorized Signatory | |
8018227 CANADA INC., as Canadian Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title: Authorized Signatory | |
NOVELIS NO. 1 LIMITED PARTNERSHIP, as Canadian Guarantor, | |
By: 4260848 CANADA INC. | |
Its: General Partner | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title: Authorized Signatory | |
8018243 CANADA LIMITED, as Canadian Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title: Authorized Signatory | |
NOVELIS EUROPE HOLDINGS LIMITED, as U.K. Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title: Authorized Signatory | |
NOVELIS SWITZERLAND SA, as Swiss Guarantor |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title: Authorized Signatory | |
NOVELIS DEUTSCHLAND GMBH, as German Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title: Authorized Signatory | |
NOVELIS SHEET INGOT GMBH, as German Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title: Authorized Signatory | |
NOVELIS MADEIRA UNIPESSOAL, LDA, as Madeira Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title: Authorized Signatory |
NOVELIS PAE S.A.S., as French Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title: Authorized Signatory | |
NOVELIS DO BRASIL LTDA., as Brazilian Guarantor | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title: Authorized Signatory |
Signed and Delivered as a Deed for and on behalf of | |
NOVELIS ALUMINIUM HOLDING COMPANY, | |
by its duly authorised attorney, | |
as Irish Guarantor, | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title: Authorized Signatory | |
in the presence of: | |
By: | /s/ Leslie J. Parrette, Jr. |
Name: Leslie J. Parrette, Jr. | |
Title: Authorized Signatory |
NOVELIS ITALIA S.P.A., as Third Party Security Provider | |
By: | /s/ Randal P. Miller |
Name: Randal P. Miller | |
Title: Authorized Signatory |
By: | /s/ Bridgett J. Manduk |
Increase Term Loan Lender | Increase Term Loan Commitment | Applicable Percentage |
Bank of America, N.A. | $80,000,000 | 100% |
Total | $80,000,000 | 100% |
Date | Increase Term Loan Amortization Amount |
December 31, 2012 | $200,000 |
March 31, 2013 | $200,000 |
June 30, 2013 | $200,000 |
September 30, 2013 | $200,000 |
December 31, 2013 | $200,000 |
March 31, 2014 | $200,000 |
June 30, 2014 | $200,000 |
September 30, 2014 | $200,000 |
December 31, 2014 | $200,000 |
March 31, 2015 | $200,000 |
June 30, 2015 | $200,000 |
September 30, 2015 | $200,000 |
December 31, 2015 | $200,000 |
March 31, 2016 | $200,000 |
June 30, 2016 | $200,000 |
September 30, 2016 | $200,000 |
December 31, 2016 | $200,000 |
Original Maturity Date | Remaining outstanding principal |
1. | I have reviewed this Quarterly Report on Form 10-Q of Novelis Inc.; |
/s/ Philip Martens | |
Philip Martens | |
President and Chief Executive Officer | |
(Principal Executive Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Novelis Inc.; |
/s/ Steven Fisher | |
Steven Fisher | |
Chief Financial Officer | |
(Principal Financial Officer) |
/s/ Philip Martens | |
Philip Martens | |
President and Chief Executive Officer | |
(Principal Executive Officer) |
/s/ Steven Fisher | |
Steven Fisher | |
Chief Financial Officer | |
(Principal Financial Officer) |
Other (Income) Expense, Net (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2012
|
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of other nonoperating income (expense) | “Other (income) expense, net” was comprised of the following (in millions).
|
Debt (Details)
In Millions, unless otherwise specified |
Sep. 30, 2012
USD ($)
|
Mar. 31, 2012
USD ($)
|
Sep. 30, 2012
Floating rate Term Loan Facility, due March 2017 [Member]
USD ($)
|
Mar. 31, 2012
Floating rate Term Loan Facility, due March 2017 [Member]
USD ($)
|
Sep. 30, 2012
8.375% Senior Notes, due December 2017 [Member]
USD ($)
|
Mar. 31, 2012
8.375% Senior Notes, due December 2017 [Member]
USD ($)
|
Sep. 30, 2012
8.75% Senior Notes, due December 2020 [Member]
USD ($)
|
Mar. 31, 2012
8.75% Senior Notes, due December 2020 [Member]
USD ($)
|
Sep. 30, 2012
7.25% Senior Notes, due February 2015 [Member]
USD ($)
|
Mar. 31, 2012
7.25% Senior Notes, due February 2015 [Member]
USD ($)
|
Dec. 17, 2010
7.25% Senior Notes, due February 2015 [Member]
USD ($)
|
Sep. 30, 2012
Facility Loan, due December 2014 [Member]
USD ($)
|
Mar. 31, 2012
Facility Loan, due December 2014 [Member]
USD ($)
|
Sep. 30, 2012
Term Loan, due December 2014 [Member]
USD ($)
|
Mar. 31, 2012
Term Loan, due December 2014 [Member]
USD ($)
|
Sep. 30, 2012
Capital lease obligation, due December 2019 [Member]
USD ($)
|
Sep. 30, 2012
Capital lease obligation, due December 2019 [Member]
CHF
|
Mar. 31, 2012
Capital lease obligation, due December 2019 [Member]
USD ($)
|
Sep. 30, 2012
BNDES Loans, due December 2018 through April 2021 [Member]
USD ($)
|
Mar. 31, 2012
BNDES Loans, due December 2018 through April 2021 [Member]
USD ($)
|
Sep. 30, 2012
Other debt, due November 2012 through September 2020 [Member]
USD ($)
|
Mar. 31, 2012
Other debt, due November 2012 through September 2020 [Member]
USD ($)
|
Sep. 30, 2012
Capital lease obligation due July 2017 [Member]
USD ($)
|
Mar. 31, 2012
Capital lease obligation due July 2017 [Member]
USD ($)
|
Sep. 30, 2012
Short term borrowings [Member]
USD ($)
|
Mar. 31, 2012
Short term borrowings [Member]
USD ($)
|
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||||||||
Interest rates | 4.00% | [1] | 8.375% | [1] | 8.75% | [1] | 7.25% | [1] | 4.18% | [1] | 4.53% | [1] | 7.50% | [1] | 7.50% | [1] | 6.18% | [1] | 4.06% | [1] | 3.64% | [1] | 2.91% | [1] | |||||||||||||||||||
Short-term borrowings | $ 111 | $ 18 | $ 111 | $ 18 | |||||||||||||||||||||||||||||||||||||||
Capital lease obligations, principal | 41 | 38 | 45 | ||||||||||||||||||||||||||||||||||||||||
Long-term debt, principal | 1,697 | 1,705 | 1,100 | 1,100 | 1,400 | 1,400 | 74 | 74 | 74 | 27 | 26 | 18 | 18 | 17 | 15 | 3 | 2 | 10 | 0 | ||||||||||||||||||||||||
Total debt | 4,498 | 4,403 | |||||||||||||||||||||||||||||||||||||||||
Long-term debt, unamortized carrying value adjustments | (33) | [2] | (37) | [2] | 0 | 0 | 0 | 0 | 2 | 2 | 0 | 0 | 0 | 0 | (3) | (4) | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
Long-term debt | 4,351 | 4,344 | 1,664 | 1,668 | 1,100 | 1,100 | 1,400 | 1,400 | 76 | 76 | 27 | 26 | 18 | 18 | 14 | 11 | 3 | 2 | 10 | 0 | |||||||||||||||||||||||
Capital lease obligations, carrying value adjustment | (2) | (2) | |||||||||||||||||||||||||||||||||||||||||
Debt instrument, unamortized carrying value adjustment | (36) | (41) | |||||||||||||||||||||||||||||||||||||||||
Capital lease obligations, carrying value | 39 | 43 | |||||||||||||||||||||||||||||||||||||||||
Total debt, carrying value | 4,462 | 4,362 | |||||||||||||||||||||||||||||||||||||||||
Less: Short term borrowings | (111) | (18) | (111) | (18) | |||||||||||||||||||||||||||||||||||||||
Current portion of long-term debt | (25) | (23) | |||||||||||||||||||||||||||||||||||||||||
Long-term debt, net of current portion, principal | 4,362 | 4,362 | |||||||||||||||||||||||||||||||||||||||||
Long-term debt, net of current portion | $ 4,326 | $ 4,321 | |||||||||||||||||||||||||||||||||||||||||
|
Assets Held For Sale Assets Held For Sale (Details) (USD $)
In Millions, unless otherwise specified |
Sep. 30, 2012
|
Mar. 31, 2012
|
---|---|---|
Assets Held For Sale [Abstract] | ||
Accounts receivable | $ 0 | $ 53 |
Inventories | 0 | 17 |
Prepaid expenses and other current assets | 0 | 3 |
Property, plant and equipment, net | 4 | 8 |
Total assets held for sale | 4 | 81 |
Accounts payable | 0 | 23 |
Accrued expenses and other current liabilities | 0 | 20 |
Accrued postretirement benefits | 0 | 10 |
Other liabilities | 0 | 4 |
Total liabilities held for sale | $ 0 | $ 57 |
Currency (Gains) Losses (Details 1) (USD $)
In Millions, unless otherwise specified |
6 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2012
|
Mar. 31, 2012
|
|
Currency gains included in AOCI, net of tax and Non controlling interests | ||
Cumulative currency translation adjustment - beginning of period | $ 23 | $ 114 |
Effect of changes in exchange rates | (23) | (79) |
Sale of investment in foreign entities | (11) | (12) |
Cumulative currency translation adjustment - end of period | $ (11) | $ 23 |
Debt (Details 1) (USD $)
In Millions, unless otherwise specified |
Sep. 30, 2012
|
Mar. 31, 2012
|
---|---|---|
Maturities of long-term debt outstanding | ||
Short-term borrowings and current portion of long term debt due within one year | $ 136 | |
2 years | 28 | |
3 years | 146 | |
4 years | 27 | |
5 years | 1,639 | |
Thereafter | 2,522 | |
Total debt | $ 4,498 | $ 4,403 |
Fair Value Measurements (Details 1) (Level 3 Instruments [Member], USD $)
In Millions, unless otherwise specified |
6 Months Ended | |||||
---|---|---|---|---|---|---|
Sep. 30, 2012
|
||||||
Level 3 Instruments [Member]
|
||||||
Reconciliation of fair value activity for Level 3 derivative contracts | ||||||
Balance as of March 31, 2012 | $ (41) | [1] | ||||
Realized/unrealized gain included in earnings | 9 | [1],[2] | ||||
Settlements | 1 | [1] | ||||
Balance as of September 30, 2012 | $ (33) | [1] | ||||
|
Debt (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of debt | Debt consisted of the following (in millions).
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Principal repayment requirements for total debt over the next five years and thereafter | Principal repayment requirements for our total debt over the next five years and thereafter (excluding unamortized carrying value adjustments and using exchange rates as of September 30, 2012 for our debt denominated in foreign currencies) are as follows (in millions).
|
Fair Value Measurements (Details 2) (USD $)
In Millions, unless otherwise specified |
Sep. 30, 2012
|
Mar. 31, 2012
|
---|---|---|
Assets | ||
Long-term receivables from related parties, carrying value | $ 14 | $ 16 |
Long-term receivables from related parties, fair value | 14 | 16 |
Liabilities | ||
Total debt - third parties (excluding short term borrowings), carrying value | 4,351 | 4,344 |
Total debt - third parties (excluding short term borrowings), fair value | $ 4,642 | $ 4,605 |
Financial Instruments and Commodity Contracts (Details 2) (Other Income (Expense), Net [Member], USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||||
Balance sheet remeasurement currency exchange contracts | $ (4) | $ 18 | $ (2) | $ 7 | ||||||||
Realized gains, net | 19 | 62 | 31 | 71 | ||||||||
Unrealized gains on other derivative instruments, net | (24) | (1) | (11) | 25 | ||||||||
Total gain recognized | (9) | 79 | 18 | 103 | ||||||||
Designated as hedging instrument [Member]
|
||||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||||
Total gain recognized | 1 | [1] | 3 | [1] | 11 | [1] | 5 | [1] | ||||
Not designated as hedging instrument [Member]
|
||||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||||
Total gain recognized | (10) | 76 | 7 | 98 | ||||||||
Aluminium contracts [Member] | Not designated as hedging instrument [Member]
|
||||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||||
Total gain recognized | (12) | 53 | (6) | 81 | ||||||||
Currency exchange contracts [Member] | Not designated as hedging instrument [Member]
|
||||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||||
Total gain recognized | (1) | 22 | 6 | 20 | ||||||||
Energy contracts [Member] | Not designated as hedging instrument [Member]
|
||||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||||
Total gain recognized | $ 3 | [2] | $ 1 | [2] | $ 7 | [2] | $ (3) | [2] | ||||
|
Debt (Details Textual 1) (USD $)
|
3 Months Ended | 0 Months Ended | 6 Months Ended | 3 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
ABL Facility [Member]
|
Sep. 30, 2012
ABL Facility [Member]
Minimum [Member]
|
Sep. 30, 2012
ABL Facility [Member]
Maximum [Member]
|
Oct. 12, 2012
Floating rate Term Loan Facility, due March 2017 [Member]
Subsequent event [Member]
Additional debt [Member]
|
Sep. 30, 2012
Floating rate Term Loan Facility, due March 2017 [Member]
Minimum [Member]
|
Sep. 30, 2012
Floating rate Term Loan Facility, due March 2017 [Member]
Maximum [Member]
|
Sep. 30, 2012
Floating rate Term Loan Facility, due March 2017 [Member]
LIBOR [Member]
|
Sep. 30, 2012
Floating rate Term Loan Facility, due March 2017 [Member]
LIBOR [Member]
Minimum [Member]
|
Sep. 30, 2012
Floating rate Term Loan Facility, due March 2017 [Member]
LIBOR [Member]
Maximum [Member]
|
Sep. 30, 2012
Six-year secured Term Loan Credit Facility, due March 2017 [Member]
|
Sep. 30, 2012
Five-year secured Term Loan Credit Facility, due March 2017 [Member]
|
|
Debt Instrument [Line Items] | |||||||||||
Credit Facility, term | 5 years | 6 years | 5 years | ||||||||
Principal amount | $ 1,500,000,000 | $ 225,000,000 | |||||||||
Current borrowing capacity | 800,000,000 | ||||||||||
Potential additional borrowing capacity | 200,000,000 | ||||||||||
Subsequent Event, Amount | 80,000,000 | ||||||||||
Variable rate, floor | 1.00% | ||||||||||
Basis spread on variable rate | 2.75% | 3.00% | |||||||||
Net leverage ratio | 1 | 3.25 | |||||||||
Debt covenant, percentage applied on lesser of ABL Facility commitment and applicable borrowing base | 12.50% | ||||||||||
Debt covenant, minimum amount for excess availability under ABL Facility | 90,000,000 | ||||||||||
Debt covenant, minimum fixed charge coverage ratio | 1 | 1.1 | |||||||||
Remaining borrowing capacity | $ 695,000,000 | ||||||||||
Remaining borrowing capacity as percentage of lending commitment | 87.00% |
Financial Instruments and Commodity Contracts (Details Textual)
|
3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
USD ($)
|
Mar. 31, 2012
USD ($)
|
Sep. 30, 2012
Aluminium contracts [Member]
Mg
|
Mar. 31, 2012
Aluminium contracts [Member]
Mg
|
Sep. 30, 2012
Aluminium contracts [Member]
Not designated as hedging instrument [Member]
Mg
|
Mar. 31, 2012
Aluminium contracts [Member]
Not designated as hedging instrument [Member]
Mg
|
Sep. 30, 2012
Aluminum foward sales contracts [Member]
Not designated as hedging instrument [Member]
|
Sep. 30, 2012
Electricity swaps [Member]
Not designated as hedging instrument [Member]
MWh
|
Sep. 30, 2012
Natural gas swaps [Member]
|
Sep. 30, 2012
Natural gas swaps [Member]
Designated as hedging instrument [Member]
MMBTU
|
Sep. 30, 2012
Natural gas swaps [Member]
Not designated as hedging instrument [Member]
MMBTU
|
Mar. 31, 2012
Natural gas swaps [Member]
Not designated as hedging instrument [Member]
MMBTU
|
Sep. 30, 2012
Interest rate swap [Member]
USD ($)
|
Jan. 31, 2012
Interest rate swap [Member]
Designated as hedging instrument [Member]
Facility Loan, due December 2014 [Member]
USD ($)
|
Jan. 31, 2012
Interest rate swap [Member]
Designated as hedging instrument [Member]
Facility Loan, due December 2014 [Member]
KRW
|
Jan. 31, 2012
Interest rate swap [Member]
Designated as hedging instrument [Member]
Term Loan, due December 2014 [Member]
USD ($)
|
Jan. 31, 2012
Interest rate swap [Member]
Designated as hedging instrument [Member]
Term Loan, due December 2014 [Member]
KRW
|
Mar. 31, 2012
Interest rate swap [Member]
Not designated as hedging instrument [Member]
USD ($)
|
Sep. 30, 2012
Currency exchange contracts [Member]
USD ($)
|
Sep. 30, 2011
Currency exchange contracts [Member]
USD ($)
|
Sep. 30, 2012
Currency exchange contracts [Member]
USD ($)
|
Sep. 30, 2011
Currency exchange contracts [Member]
USD ($)
|
Sep. 30, 2012
Cash flow hedges [Member]
Aluminum forward purchase contracts [Member]
Designated as hedging instrument [Member]
Mg
|
Mar. 31, 2012
Cash flow hedges [Member]
Aluminum forward purchase contracts [Member]
Designated as hedging instrument [Member]
Mg
|
Sep. 30, 2012
Cash flow hedges [Member]
Aluminum foward sales contracts [Member]
Designated as hedging instrument [Member]
Mg
|
Mar. 31, 2012
Cash flow hedges [Member]
Aluminum foward sales contracts [Member]
Designated as hedging instrument [Member]
Mg
|
Sep. 30, 2012
Fair value hedging [Member]
Aluminium contracts [Member]
Designated as hedging instrument [Member]
Mg
|
Mar. 31, 2012
Fair value hedging [Member]
Aluminium contracts [Member]
Designated as hedging instrument [Member]
Mg
|
Sep. 30, 2012
Fair value hedging [Member]
Aluminum forward purchase contracts [Member]
Designated as hedging instrument [Member]
USD ($)
Mg
|
Sep. 30, 2012
Fair value hedging [Member]
Aluminum forward purchase contracts [Member]
Designated as hedging instrument [Member]
USD ($)
Mg
|
Mar. 31, 2012
Fair value hedging [Member]
Aluminum forward purchase contracts [Member]
Designated as hedging instrument [Member]
Mg
|
Sep. 30, 2012
Fair value hedging [Member]
Aluminum forward purchase contracts [Member]
Designated as hedging instrument [Member]
Other Income (Expense), Net [Member]
USD ($)
|
Sep. 30, 2012
Fair value hedging [Member]
Aluminum forward purchase contracts [Member]
Designated as hedging instrument [Member]
Other Income (Expense), Net [Member]
USD ($)
|
|
Financial Instruments And Commodity Contracts [Abstract] | |||||||||||||||||||||||||||||||||
Losses on changes in fair value of derivative contracts | $ 3,000,000 | $ 5,000,000 | |||||||||||||||||||||||||||||||
Losses on changes in the fair value of designated hedged items | 4,000,000 | 3,000,000 | |||||||||||||||||||||||||||||||
Gain (loss) on ineffectiveness, net | 1,000,000 | 2,000,000 | |||||||||||||||||||||||||||||||
Higher remaining maturity range | 6 months | 2 years | 3 years | 18 months | 2 years | ||||||||||||||||||||||||||||
Notional amount | 241,000 | 138,000 | 58,000 | 42,000 | 3,000,000 | 4,500,000 | 6,600,000 | 6,000 | 16,000 | 220,000 | 144,000 | 31,000 | 32,000 | 31,000 | 31,000 | 32,000 | |||||||||||||||||
Outstanding foreign currency forwards designated as cash flow hedges | 667,000,000 | 976,000,000 | |||||||||||||||||||||||||||||||
Outstanding foreign currency forwards designated as net investment hedges | 36,000,000 | 123,000,000 | |||||||||||||||||||||||||||||||
Gains in OCI | 1,000,000 | 4,000,000 | 1,000,000 | 3,000,000 | |||||||||||||||||||||||||||||
Outstanding currency exchange contracts | 1,400,000,000 | 1,400,000,000 | |||||||||||||||||||||||||||||||
Notional outstanding | 1,000,000 | ||||||||||||||||||||||||||||||||
Outstanding interest rate swaps | 0 | 220,000,000 | |||||||||||||||||||||||||||||||
Interest rate swaps, hedged amount | 27,000,000 | 30,000,000,000 | 18,000,000 | 20,000,000,000 | |||||||||||||||||||||||||||||
Derivative, fixed interest rate | 4.485% | 4.485% | 4.815% | 4.815% | |||||||||||||||||||||||||||||
Expected reclassification of losses from AOCI to earnings | $ 41,000,000 |
Other (Income) Expense, Net (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|||||||||||
Other Income and Expenses [Abstract] | ||||||||||||||
Foreign currency remeasurement (gains) losses, net | $ (3) | [1] | $ (1) | [1] | $ (8) | [1] | $ 9 | [1] | ||||||
Loss (gain) on change in fair value of other unrealized derivative instruments, net | 24 | 1 | 11 | (25) | ||||||||||
(Gain) loss on change in fair value of other realized derivative instruments, net | (19) | (62) | (31) | (71) | ||||||||||
Loss (gain) on sale of assets, net | 1 | 1 | (1) | 2 | ||||||||||
(Gain) on litigation settlement in Brazil | 0 | [2] | (8) | [2] | 0 | [2] | (8) | [2] | ||||||
Loss on Brazilian tax litigation, net | 2 | [3] | 5 | [3] | 4 | [3] | 7 | [3] | ||||||
Interest income | (1) | (4) | (2) | (8) | ||||||||||
Other, net | (5) | 1 | (1) | 2 | ||||||||||
Other (income) expense, net | $ (1) | $ (67) | $ (28) | $ (92) | ||||||||||
|
Segment, Major Customer and Major Supplier Information (Details 2)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|
Rexam [Member]
|
||||
Revenue, Major Customer [Line Items] | ||||
Percentage of total net sales | 13.00% | 13.00% | 15.00% | 13.00% |
Anheuser Busch [Member]
|
||||
Revenue, Major Customer [Line Items] | ||||
Percentage of total net sales | 13.00% | 8.00% | 11.00% | 9.00% |
Affiliates of Ball Corporation [Member]
|
||||
Revenue, Major Customer [Line Items] | ||||
Percentage of total net sales | 11.00% | 8.00% | 10.00% | 10.00% |
Supplemental Information
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUPPLEMENTAL INFORMATION | SUPPLEMENTAL INFORMATION “Accumulated other comprehensive (loss) income,” net of tax, consisted of the following (in millions).
Supplemental cash flow information (in millions):
As of September 30, 2012, we recorded $77 million of outstanding accounts payable and accrued liabilities related to capital expenditures in which the cash outflows will occur subsequent to September 30, 2012. During the six months ended September 30, 2012, we incurred capital lease obligations of $11 million related to the acquisition of certain computer equipment. |
Consolidation (Details) (USD $)
In Millions, unless otherwise specified |
Sep. 30, 2012
|
Mar. 31, 2012
|
Sep. 30, 2011
|
Mar. 31, 2011
|
---|---|---|---|---|
Current assets | ||||
Cash and cash equivalents | $ 227 | $ 317 | $ 286 | $ 311 |
Accounts receivable - third parties | 1,304 | 1,331 | ||
Inventories | 1,163 | 1,024 | ||
Prepaid expenses and other current assets | 90 | 61 | ||
Total current assets | 3,013 | 3,100 | ||
Property, plant and equipment, net | 2,848 | 2,689 | ||
Goodwill | 611 | 611 | ||
Deferred income taxes | 88 | 74 | ||
Other long-term assets | 164 | 168 | ||
Total assets | 8,068 | 8,021 | ||
Current liabilities | ||||
Accounts payable | 1,201 | 1,245 | ||
Accrued expenses and other current liabilities | 522 | 476 | ||
Total current liabilities | 2,054 | 1,999 | ||
Accrued postretirement benefits | 665 | 687 | ||
Other long-term liabilities | 277 | 310 | ||
Total liabilities | 7,856 | 7,898 | ||
Logan [Member]
|
||||
Current assets | ||||
Cash and cash equivalents | 2 | 2 | ||
Accounts receivable - third parties | 21 | 20 | ||
Inventories | 44 | 42 | ||
Prepaid expenses and other current assets | 1 | 0 | ||
Total current assets | 68 | 64 | ||
Property, plant and equipment, net | 15 | 15 | ||
Goodwill | 12 | 12 | ||
Deferred income taxes | 63 | 63 | ||
Other long-term assets | 3 | 3 | ||
Total assets | 161 | 157 | ||
Current liabilities | ||||
Accounts payable | 25 | 24 | ||
Accrued expenses and other current liabilities | 10 | 11 | ||
Total current liabilities | 35 | 35 | ||
Accrued postretirement benefits | 146 | 145 | ||
Other long-term liabilities | 2 | 2 | ||
Total liabilities | $ 183 | $ 182 |
Supplemental Information (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated other comprehensive income, net of tax | “Accumulated other comprehensive (loss) income,” net of tax, consisted of the following (in millions).
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental cash flow information | Supplemental cash flow information (in millions):
|
Financial Instruments and Commodity Contracts (Details 4) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|||||||
Cash flow hedges [Member]
|
||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||
Amount of gain (loss) reclassified from AOCI into income/(expense) (effective portion) | $ 10 | $ 11 | $ 23 | $ 31 | ||||||
Electricity swap [Member] | Other (income) expense [Member]
|
||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||
Location of gain (loss) reclassified from AOCI into earnings | Other (income) expense, net | |||||||||
Electricity swap [Member] | Cash flow hedges [Member] | Other (income) expense [Member]
|
||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||
Amount of gain (loss) reclassified from AOCI into income/(expense) (effective portion) | (2) | [1] | (1) | [1] | (3) | [1] | (3) | [1] | ||
Aluminium contracts [Member]
|
||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||
Location of gain (loss) reclassified from AOCI into earnings | Sales | |||||||||
Aluminium contracts [Member] | Cost of goods sold [Member]
|
||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||
Location of gain (loss) reclassified from AOCI into earnings | Cost of goods sold | |||||||||
Aluminium contracts [Member] | Cash flow hedges [Member] | Cost of goods sold [Member]
|
||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||
Amount of gain (loss) reclassified from AOCI into income/(expense) (effective portion) | 12 | 7 | 30 | 26 | ||||||
Aluminium contracts [Member] | Cash flow hedges [Member] | Sales [Member]
|
||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||
Amount of gain (loss) reclassified from AOCI into income/(expense) (effective portion) | 5 | 0 | 7 | 0 | ||||||
Currency exchange contracts [Member]
|
||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||
Location of gain (loss) reclassified from AOCI into earnings | Sales | |||||||||
Currency exchange contracts [Member] | Cost of goods sold and SG&A [Member]
|
||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||
Location of gain (loss) reclassified from AOCI into earnings | Cost of goods sold and SG&A | |||||||||
Currency exchange contracts [Member] | Other income expense and interest expense [Member]
|
||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||
Location of gain (loss) reclassified from AOCI into earnings | Other (income) expense, net and Interest Expense | |||||||||
Currency exchange contracts [Member] | Cash flow hedges [Member] | Sales [Member]
|
||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||
Amount of gain (loss) reclassified from AOCI into income/(expense) (effective portion) | 0 | 0 | (2) | 0 | ||||||
Currency exchange contracts [Member] | Cash flow hedges [Member] | Cost of goods sold and SG&A [Member]
|
||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||
Amount of gain (loss) reclassified from AOCI into income/(expense) (effective portion) | (5) | 6 | (8) | 9 | ||||||
Currency exchange contracts [Member] | Cash flow hedges [Member] | Other income expense and interest expense [Member]
|
||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||
Amount of gain (loss) reclassified from AOCI into income/(expense) (effective portion) | $ 0 | $ (1) | $ (1) | $ (1) | ||||||
|
Financial Instruments and Commodity Contracts (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2012
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair values of financial instruments and commodity contracts | The fair values of our financial instruments and commodity contracts as of September 30, 2012 and March 31, 2012 were as follows (in millions).
|
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Summary of notional amount | The following table summarizes our notional amount (in kt).
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Summary of gains (losses) associated with the change in the fair value derivative instruments recognized in "Other (income) expense, net" | The following table summarizes the gains (losses) associated with the change in fair value of derivative instruments recognized in “Other (income) expense, net” (in millions). Gains (losses) recognized in other line items in the condensed consolidated statement of operations are separately disclosed within this footnote.
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Summary of the impact on AOCI and earnings of derivative instruments designated as cash flow hedges | The following table summarizes the impact on AOCI and earnings of derivative instruments designated as cash flow hedges (in millions). Within the next twelve months, we expect to reclassify $41 million of losses from “AOCI” to earnings.
|
Investment In and Advances To Non-Consolidated Affiliates and Related Party Transactions (Details1) (USD $)
In Millions, unless otherwise specified |
Sep. 30, 2012
|
Mar. 31, 2012
|
---|---|---|
Related Party Transaction [Line Items] | ||
Accounts receivable - related parties | $ 28 | $ 36 |
Long-term receivables from related parties, carrying value | 14 | 16 |
Accounts payable | 48 | 51 |
Equity Method Investee [Member]
|
||
Related Party Transaction [Line Items] | ||
Accounts receivable - related parties | 28 | 33 |
Long-term receivables from related parties, carrying value | 14 | 16 |
Accounts payable | $ 48 | $ 51 |
Postretirement Benefit Plans (Details 1) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|
Contributions to employee benefit plans | ||||
Funded pension plans | $ 9 | $ 10 | $ 18 | $ 21 |
Unfunded pension plans | 4 | 4 | 7 | 7 |
Savings and defined contribution pension plans | 5 | 5 | 10 | 10 |
Total contributions | $ 18 | $ 19 | $ 35 | $ 38 |
Share-Based Compensation (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|
Share-based Compensation Costs [Line Items] | ||||
Compensation (income) expense | $ 3 | $ (5) | $ 1 | $ (1) |
2009 LTIP [Member]
|
||||
Share-based Compensation Costs [Line Items] | ||||
Compensation (income) expense | 1 | 0 | 0 | 3 |
2010 LTIP [Member]
|
||||
Share-based Compensation Costs [Line Items] | ||||
Compensation (income) expense | 1 | (4) | 0 | (2) |
2011 LTIP [Member]
|
||||
Share-based Compensation Costs [Line Items] | ||||
Compensation (income) expense | 0 | (2) | (1) | (3) |
2012 LTIP [Member]
|
||||
Share-based Compensation Costs [Line Items] | ||||
Compensation (income) expense | 0 | 1 | 0 | 1 |
2013 LTIP [Member]
|
||||
Share-based Compensation Costs [Line Items] | ||||
Compensation (income) expense | $ 1 | $ 0 | $ 2 | $ 0 |
Inventories (Details) (USD $)
In Millions, unless otherwise specified |
Sep. 30, 2012
|
Mar. 31, 2012
|
---|---|---|
Schedule of inventories | ||
Finished goods | $ 242 | $ 207 |
Work in process | 391 | 380 |
Raw materials | 427 | 340 |
Supplies | 103 | 97 |
Inventories | $ 1,163 | $ 1,024 |
Business and Summary of Significant Accounting Policies
|
6 Months Ended |
---|---|
Sep. 30, 2012
|
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES References herein to “Novelis,” the “Company,” “we,” “our,” or “us” refer to Novelis Inc. and its subsidiaries unless the context specifically indicates otherwise. References herein to “Hindalco” refer to Hindalco Industries Limited, our parent company. In October 2007, the Rio Tinto Group purchased all the outstanding shares of Alcan, Inc. References herein to “Alcan” refer to Rio Tinto Alcan Inc. Description of Business and Basis of Presentation Novelis Inc. was formed in Canada on September 21, 2004. We produce aluminum sheet and light gauge products for use in the packaging market, which includes beverage and food can and foil products, as well as for use in the transportation, electronics, architectural and industrial product markets. We also have recycling operations in many of our plants to recycle post-consumer aluminum, such as used-beverage cans (UBCs). As of September 30, 2012, we had manufacturing operations in nine countries on four continents: North America, South America, Asia and Europe, through 25 operating facilities, including recycling operations in ten of these plants. Additionally, we are investing in an aluminum automotive heat treatment plant in China, which is expected to be operational in late calendar year 2014. In addition to aluminum rolled products plants, our South American businesses include primary aluminum smelting and power generation facilities. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes in our Annual Report on Form 10-K for the year ended March 31, 2012 filed with the United States Securities and Exchange Commission (SEC) on May 24, 2012. Management believes that all adjustments necessary for the fair statement of results, consisting of normally recurring items, have been included in the unaudited condensed consolidated financial statements for the interim periods presented. The preparation of our condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires us to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. The principal areas of judgment relate to (1) the fair value of derivative financial instruments; (2) impairment of goodwill; (3) impairment of long lived assets and other intangible assets (4) equity investments; (5) actuarial assumptions related to pension and other postretirement benefit plans; (6) tax uncertainties and valuation allowances and (7) assessment of loss contingencies, including environmental and litigation liabilities. Future events and their effects cannot be predicted with certainty, and accordingly, our accounting estimates require the exercise of judgment. The accounting estimates used in the preparation of our condensed consolidated financial statements will change as new events occur, as more experience is acquired, as additional information is obtained and as our operating environment changes. We evaluate and update our assumptions and estimates on an ongoing basis and may employ outside experts to assist in our evaluations. Actual results could differ from the estimates we have used. Consolidation Policy Our condensed consolidated financial statements include the assets, liabilities, revenues and expenses of all wholly-owned subsidiaries, majority-owned subsidiaries over which we exercise control and entities in which we have a controlling financial interest or are deemed to be the primary beneficiary. We eliminate all significant intercompany accounts and transactions from our condensed consolidated financial statements. We use the equity method to account for our investments in entities that we do not control, but where we have the ability to exercise significant influence over operating and financial policies. Consolidated “Net income attributable to our common shareholder” includes our share of the net earnings (losses) of these entities. The difference between consolidation and the equity method impacts certain of our financial ratios because of the presentation of the detailed line items reported in the consolidated financial statements for consolidated entities, compared to a two-line presentation of equity method investments and net losses. Recently Adopted Accounting Standards Effective for the interim periods and year ended March 31, 2013, we adopted the Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. ASU No. 2011-05 eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders' equity and requires all non-owner changes in stockholders' equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. We elected to present two separate but consecutive statements. Additionally, effective for the year ended March 31, 2012, we adopted the FASB ASU No. 2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05, which indefinitely defers the requirement in ASU No. 2011-05 to present reclassification adjustments out of accumulated other comprehensive income by component in both the statement in which net income is presented and the statement in which other comprehensive income is presented. During the deferral period, the existing requirements in U.S. GAAP for the presentation of reclassification adjustments must continue to be followed. The adoption of this standard had no impact on our consolidated financial position other than the change in presentation and additional disclosure. Recently Issued Accounting Standards In December 2011, the FASB issued ASU No. 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. The amendments in this update require an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The requirements are effective for annual periods beginning January 1, 2013, and interim periods within those annual periods. We are currently evaluating the potential impact, if any, of the adoption of ASU No. 2011-11 on our consolidated financial statements and disclosures. |
Share-Based Compensation (Details 1) (RSUs [Member])
In Millions, except Share data, unless otherwise specified |
6 Months Ended | 6 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
2013 LTIP [Member]
INR
|
Sep. 30, 2012
2013 LTIP [Member]
USD ($)
|
Mar. 31, 2012
2013 LTIP [Member]
USD ($)
|
Sep. 30, 2012
2012 LTIP [Member]
INR
|
Sep. 30, 2012
2012 LTIP [Member]
USD ($)
|
Mar. 31, 2012
2012 LTIP [Member]
USD ($)
|
Sep. 30, 2012
2011 LTIP [Member]
INR
|
Sep. 30, 2012
2011 LTIP [Member]
USD ($)
|
Mar. 31, 2012
2011 LTIP [Member]
USD ($)
|
|
Number of RSUs | |||||||||
Outstanding, beginning of period (shares) | 1,942,302 | 0 | 860,566 | 878,675 | 778,037 | 802,149 | |||
Granted (shares) | 1,947,150 | ||||||||
Forteited/Cancelled (shares) | (4,848) | (18,109) | (24,112) | ||||||
Outstanding, end of period (shares) | 1,942,302 | 0 | 860,566 | 878,675 | 778,037 | 802,149 | |||
Grant Date Fair Value | |||||||||
Outstanding, beginning of period (Indian Rupees per share) | 0.00 | 186.02 | 149.01 | ||||||
Granted (Indian Rupees per share) | 109.58 | ||||||||
Forfeited/Cancelled (Indian Rupees per share) | 109.58 | 192.38 | 150.38 | ||||||
Outstanding, end of period (Indian Rupees per share) | 109.58 | 185.89 | 148.97 | ||||||
Aggregate intrinsic value | $ 0 | $ 0 | $ 2 | $ 2 | $ 2 | $ 2 |
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