Reynolds Metals Co · 10-K405 · For 12/31/99

Filed On 3/3/00   ·   SEC File 1-01430   ·   Accession Number 83604-0-15

Annual Report -- [X] Reg. S-K Item 405   ·   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K405     Annual Report -- [X] Reg. S-K Item 405                79    276K 
 2: EX-3        Articles of Incorporation/Organization or By-Laws    100    248K 
 3: EX-21       Subsidiaries of the Registrant                         2±     8K 
 4: EX-23       Consent of Experts or Counsel                          2      8K 
 5: EX-24       Power of Attorney                                     17     52K 
 6: EX-27       Financial Data Schedule                                1      6K 

10-K405   ·   Annual Report -- [X] Reg. S-K Item 405
Document Table of Contents

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SECURITIES AND EXCHANGE COMMISSION                
Washington, D.C. 20549                

FORM 10-K               

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)                 
OF THE SECURITIES EXCHANGE ACT OF 1934                  

For the Fiscal Year Ended December 31, 1999               

OR                    

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)                 
OF THE SECURITIES EXCHANGE ACT OF 1934                

Commission File Number 001-01430                

REYNOLDS METALS COMPANY               
A Delaware Corporation                
(IRS Employer Identification No. 54-0355135)                
6601 West Broad Street, P. O. Box 27003, Richmond, Virginia 23261-7003          
Telephone:  (804) 281-2000                

Securities registered pursuant to Section 12(b) of the Act:                     

                       Name of Each Exchange
Title of Each Class                       on Which Registered                   
-------------------                      -------------------------              

Common Stock, no par value               New York Stock Exchange                
Preferred Stock Purchase Rights          New York Stock Exchange                

Securities registered pursuant to Section 12(g) of the Act:  None               

Indicate by check mark whether the Registrant:  (1) has filed all               
reports required to be filed by Section 13 or 15(d) of the                      
Securities Exchange Act of 1934 during the preceding 12 months,                 
and (2) has been subject to such filing requirements for the past               
90 days.    Yes   _X_      No ___                                               

Indicate by check mark if disclosure of delinquent filers                       
pursuant to Item 405 of Regulation S-K is not contained herein,                 
and will not be contained, to the best of the Registrant's                      
knowledge, in definitive proxy or information statements                        
incorporated by reference in Part III of this Form 10-K or any                  
amendment to this Form 10-K.   [X]                                              

As of February 25, 2000:                                                        

(a)  the aggregate market value of the voting stock known by the                
Registrant to be held by nonaffiliates of the Registrant was          
approximately $3.7 billion*.                                          

(b)  the Registrant had 63,676,149 shares of Common Stock                       
outstanding and entitled to vote.                                     

DOCUMENTS INCORPORATED BY REFERENCE               

Portions of the Registrant's definitive proxy statement for its                 
2000 Annual Meeting of Stockholders to be filed pursuant to                     
Regulation 14A - Part III                                                       
_______________                                                                 
*  For this purpose, "nonaffiliates" are deemed to be persons                   
other than directors, officers and persons owning                         
beneficially more than five percent of the voting stock as                
reported to the Securities and Exchange Commission.                       

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iNOTE                

This copy includes only EXHIBIT 21 of those listed on pages 68 - 73.            

In accordance with the Securities and Exchange Commission's                     
requirements, we will furnish copies of the remaining exhibits                  
listed below upon payment of a fee of 10 cents per page.  Please                
remit the proper amount with your request to:                                   

Secretary                               
Reynolds Metals Company                 
P.O. Box 27003                          
Richmond, Virginia 23261-7003           

Exhibits have the following number of pages:                                    

EXHIBIT 2       149    EXHIBIT 10.15        4                     
EXHIBIT 3.1     100    EXHIBIT 10.16       12                     
EXHIBIT 3.2      23    EXHIBIT 10.17       17                     
EXHIBIT 4.1     100    EXHIBIT 10.18       16                     
EXHIBIT 4.2      23    EXHIBIT 10.19        5                     
EXHIBIT 4.3       1    EXHIBIT 10.20       10                     
EXHIBIT 4.4     165    EXHIBIT 10.21       10                     
EXHIBIT 4.5       6    EXHIBIT 10.22        6                     
EXHIBIT 4.6      41    EXHIBIT 10.23        2                     
EXHIBIT 4.7       9    EXHIBIT 10.24        2                     
EXHIBIT 4.8       2    EXHIBIT 10.25        1                     
EXHIBIT 4.9       2    EXHIBIT 10.26        3                     
EXHIBIT 4.10     10    EXHIBIT 10.27       21                     
EXHIBIT 4.11     14    EXHIBIT 10.28        2                     
EXHIBIT 4.12      9    EXHIBIT 10.29       10                     
EXHIBIT 4.13     36    EXHIBIT 10.30       10                     
EXHIBIT 4.14     17    EXHIBIT 10.31        5                     
EXHIBIT 4.15     19    EXHIBIT 10.32       12                     
EXHIBIT 4.16     18    EXHIBIT 10.33       26                     
EXHIBIT 4.17     89    EXHIBIT 10.34       37                     
EXHIBIT 4.18      7    EXHIBIT 10.35       21                     
EXHIBIT 4.19     12    EXHIBIT 10.36        2                     
EXHIBIT 10.1     21    EXHIBIT 10.37        2                     
EXHIBIT 10.2     16    EXHIBIT 21           1                     
EXHIBIT 10.3     11    EXHIBIT 23           2                     
EXHIBIT 10.4      6    EXHIBIT 24          17                     
EXHIBIT 10.5      7    EXHIBIT 27           1                     
EXHIBIT 10.6      6    EXHIBIT 99           6                     
EXHIBIT 10.7     10                                               
EXHIBIT 10.8     15                                               
EXHIBIT 10.9     16                                               
EXHIBIT 10.10     7                                               
EXHIBIT 10.11    12                                               
EXHIBIT 10.12    13                                               
EXHIBIT 10.13     2                                               
EXHIBIT 10.14     1                                               

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iiTABLE OF CONTENTS               

PART I                
ITEM                                                             PAGE           
----                                                             ----           

1.  BUSINESS....................................................  1           
GENERAL                                                           
Nature of Operations....................................  1   
Merger..................................................  1   
Restructuring...........................................  2   
Financial Information Regarding Global                        
Business Units and Operations                               
by Geographic Location.................................  2  
GLOBAL BUSINESS UNITS                                             
Base Materials..........................................  2   
Packaging and Consumer..................................  7   
Construction and Distribution...........................  7   
Transportation..........................................  8   
OTHER OPERATIONS..........................................  8     
COMPETITION...............................................  9     
ENVIRONMENTAL COMPLIANCE..................................  9     
RESEARCH AND DEVELOPMENT.................................. 11     
EMPLOYEES................................................. 11     
2.  PROPERTIES.................................................. 11           
3.  LEGAL PROCEEDINGS........................................... 15           
4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS......... 15           
4A. EXECUTIVE OFFICERS OF THE REGISTRANT........................ 16           

PART II               

5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED                         
STOCKHOLDER MATTERS....................................... 18     
6.  SELECTED FINANCIAL DATA..................................... 20           
7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                         
CONDITION AND RESULTS OF OPERATIONS....................... 21     
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT                            
MARKET RISK............................................... 35     
8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA................. 36           
9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS                             
ON ACCOUNTING AND FINANCIAL DISCLOSURE.................... 65     

PART III                

10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.......... 65            
11.  EXECUTIVE COMPENSATION...................................... 65            
12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS                            
AND MANAGEMENT............................................ 65     
13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.............. 65            

PART IV               

14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS                       
ON FORM 8-K............................................... 66     

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1PART I    

ITEM 1.  BUSINESS                                                               

Reynolds Metals Company (the "Registrant") was incorporated in 1928 under the   
laws of the State of Delaware.  In this report, "Reynolds" and "the Company"    
mean the Registrant and its consolidated subsidiaries unless otherwise          
indicated.                                                                      

GENERAL   

NATURE OF OPERATIONS                                                            
--------------------                                                            

Reynolds is the world's third-largest aluminum producer and the world's         
leading aluminum foil producer.  Reynolds serves customers in growing world     
markets including the alumina and primary aluminum, packaging and consumer,     
commercial construction, distribution, and automotive markets, with a wide      
variety of aluminum, plastic and other products.  At December 31, 1999,         
Reynolds employed approximately 18,900 people.  Reynolds has operations or      
interests in operations at more than 100 locations in 24 countries.             
Reynolds' world headquarters is in Richmond, Virginia.                          

Reynolds' operations are organized into four market-based, global business      
units:  Base Materials; Packaging and Consumer; Construction and                
Distribution; and Transportation.  For a description of these units, see the    
discussion below under the heading "Global Business Units."  For information    
about certain operations that are not considered part of a global business      
unit, see the discussion below under the heading "Other Operations."            

MERGER                                                                          
------                                                                          

On August 18, 1999, Reynolds, Alcoa Inc. (Alcoa) and RLM Acquisition Corp., a   
wholly owned subsidiary of Alcoa, entered into an agreement and plan of         
merger.  Under the merger agreement, each outstanding share of Reynolds         
common stock would be converted into 1.06 shares of Alcoa common stock and      
Reynolds would become wholly owned by Alcoa.  On January 10, 2000, Alcoa        
announced that its Board of Directors had declared a two-for-one split of       
Alcoa's common stock to Alcoa shareholders of record on May 26, 2000.  The      
stock split is subject to approval of Alcoa shareholders who must approve an    
amendment to Alcoa's articles to increase the authorized shares of common       
stock at Alcoa's annual meeting on May 12, 2000.  If approved, the stock        
split would be distributed on June 9, 2000.  Shares of Alcoa stock that are     
issued in the merger will be adjusted, as necessary, to reflect the stock       
split.                                                                          

The proposed merger, which was approved by Reynolds' stockholders at a          
special meeting held on February 11, 2000, is subject to customary closing      
conditions, including antitrust clearances.                                     

The Hart-Scott-Rodino Antitrust Improvements Act of 1976 prohibits Alcoa and    
Reynolds from completing the merger until certain information has been          
furnished to the Antitrust Division of the Department of Justice and the        
Federal Trade Commission, and until certain waiting period requirements have    
been satisfied.  Alcoa filed a Hart-Scott-Rodino Premerger Notification and     
Report Form on August 24, 1999 and Reynolds filed such a Form on August 30,     
1999.  On September 29, 1999, the Antitrust Division issued a request for       
additional information and documentary material (a "second request").  On       
February 11, 2000, both Reynolds and Alcoa announced that they believed that    
they were in substantial compliance with the second request.  They also         
advised the Department of Justice that they would not close the merger before   
March 31, 2000, in order to provide the Department sufficient time to review    
the transaction.                                                                

In Europe, certain regulations require that Alcoa file a premerger              
notification form with the Commission of the European Communities prior to      
consummation of the proposed merger.  Alcoa filed such notification on          
November 18, 1999.  This filing began an initial one-month review period in     
which the European Commission was required to determine whether there are       
sufficiently "serious doubts" about the proposed merger's compatibility with    
the common market to require a more complete review.  The initial one-month     
period expired on December 20, 1999,                                            

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2whereupon the European Commission issued a determination that the proposed      
merger did require a more complete review.  The European Commission must        
complete its investigation and make a final determination with respect to the   
proposed merger no later than May 10, 2000.                                     

Reynolds and Alcoa have also made filings under the competition laws of         
Canada, Australia and certain other countries where the companies have          
significant operations.  Alcoa and Reynolds have been advised that the          
Canadian Competition Bureau has classified this merger as "very complex."       
Its review is expected to be completed no later than May 24, 2000.              
The Australian review process is also expected to be completed by the           
end of May 2000.                                                                

The merger agreement contains certain restrictions on the conduct of            
Reynolds' business before completion of the merger.  For example, Reynolds      
has agreed to operate its business only in the ordinary course, to refrain      
from taking certain corporate actions without the consent of Alcoa, and not     
to solicit alternative acquisition proposals.                                   

Reference is made to the copy of the merger agreement incorporated by           
reference herein as Exhibit 2.                                                  

RESTRUCTURING                                                                   
-------------                                                                   

In early 1999, Reynolds finalized the sale of its Alloys can stock complex,     
which included a rolling mill, two reclamation plants and a coil coating        
facility, located in Alabama to Wise Alloys LLC, an affiliate of Wise Metals    
Co., Inc.  Also in early 1999, Reynolds sold its aluminum extrusion plant in    
Irurzun, Spain, as well as its distribution operations for architectural        
systems located in Spain, to an affiliate of Alcoa.  Reynolds sold its          
investment in a Canadian rolling mill and related assets to Hocan Inc., an      
affiliate of CORUS Group PLC, in early January 2000.  Finalization of these     
transactions marks the substantial completion of Reynolds' portfolio review     
process.                                                                        

FINANCIAL INFORMATION REGARDING GLOBAL BUSINESS UNITS AND OPERATIONS BY         
GEOGRAPHIC LOCATION                                                             
-----------------------------------------------------------------------         

Financial information for operations and assets attributable to Reynolds'       
global business units and information regarding its operations by geographic    
location are included in Note 12 to the consolidated financial statements in    
Item 8 of this report.                                                          

GLOBAL BUSINESS UNITS   

BASE MATERIALS                                                                  
--------------                                                                  

Reynolds' base materials global business unit produces metallurgical alumina,   
alumina chemicals and primary aluminum.  It also produces carbon products,      
principally for use in primary aluminum reduction plants.                       

Aluminum is one of the most plentiful metals in the earth's crust.  It is       
found chemically combined with other elements.  Aluminum silicates are in       
almost every handful of clay, but aluminum is produced primarily from           
bauxite, an ore containing aluminum in the form of aluminum oxide, commonly     
referred to as alumina.                                                         

Aluminum is made by extracting alumina from bauxite and then removing oxygen    
from the alumina through an electrolytic process known as "reduction."  The     
result is molten primary aluminum, which is cast into various forms for         
shipment to fabricating plants.  It takes about four tons of bauxite to make    
two tons of alumina, which in turn yield about a ton of primary aluminum.       

Reynolds refines bauxite into alumina at its Sherwin alumina plant near         
Corpus Christi, Texas.  Reynolds also is entitled to a share of the             
production from two joint ventures in which it has interests, one located in    
Western Australia, known as the Worsley Joint Venture ("Worsley"), and the      
other located in Stade, Germany, known as Aluminium Oxid Stade ("Stade").       
See Table 1 under this Item.  In addition, Reynolds has a contract with a       
third party to purchase 120,000 metric tons of alumina in 2000.                 

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3Worsley currently has the capacity to produce 1.88 million metric tons of       
alumina per year.  Reynolds is entitled to 56% of the alumina produced by the   
joint venture.  The Worsley refinery is currently being expanded to increase    
its annual capacity to 3.1 million metric tons.  In addition to increasing      
capacity, the expansion project will further reduce operating costs and         
improve product quality.  Construction is scheduled to be completed in the      
second quarter of 2000.  Worsley has proven bauxite reserves sufficient to      
operate the plant at capacity for at least the next 35 years, even after        
taking into account the ongoing expansion of the refinery's annual capacity.    

Bauxite requirements for Reynolds' Sherwin alumina plant and Reynolds' share    
of the Stade joint venture are obtained from the following sources:             

AUSTRALIA                                                             

Reynolds has a long-term purchase arrangement under which it may buy  
from a third party an aggregate of approximately 18,800,000 dry metric
tons of Australian bauxite through 2021.                              

BRAZIL                                                                

Reynolds owns a 5% interest in Mineracao Rio Do Norte S.A. ("MRN"),   
  which owns the Trombetas bauxite mining project in Brazil.  Reynolds has
 agreed to purchase approximately 7,000,000 dry metric tons of Brazilian
bauxite from the project for the period 2000 through 2019.            

Reynolds also maintains an interest in other, undeveloped bauxite     
deposits in Brazil.                                                   

GUINEA                                                                

 Reynolds owns a 6% interest in Halco (Mining), Inc.  Halco owns 51% and
the Guinean government owns 49% of Compagnie des Bauxites de Guinee   
 ("CBG"), which has the exclusive right through 2038 to develop and mine
bauxite in a 10,000 square-mile area in northwestern Guinea.  Reynolds
  has a bauxite purchase contract with CBG that will provide Reynolds with
 a minimum of approximately 6,050,000 dry metric tons of Guinean bauxite
for the period 2000 through 2011.                                     

GUYANA                                                                

Reynolds is a 50% partner with the Guyanese government in a bauxite   
mining project in the Berbice region of Guyana.  Reynolds will buy    
approximately 2,000,000 dry metric tons of bauxite from the project in
2000.                                                                 

JAMAICA                                                               

  Reynolds has a purchase arrangement under which it will buy from a third
party an aggregate of up to 3,600,000 dry metric tons of Jamaican     
bauxite for the period 2000 through 2001.                             

OTHER                                                                 

  Reynolds has an arrangement with the U.S. government under which it will
buy at a negotiated price during 2000 approximately 600,000 long dry  
tons of Jamaican bauxite stored next to the Sherwin alumina plant.    

Reynolds' present sources of bauxite and alumina are more than adequate to      
meet the forecasted requirements of its primary aluminum production             
operations for the foreseeable future.                                          

Reynolds produces primary aluminum at three plants in the United States and     
one at Baie Comeau, Quebec, Canada. Reynolds is also entitled to a share of     
the primary aluminum produced at three joint ventures in which it               
participates:  one in Quebec known as the Becancour joint venture               
("Becancour"); one in Hamburg, Germany, known as Hamburg Aluminium-Werk GmbH    
("Hamburg"); and the third in Ghana, known as Volta Aluminium Company Limited   
("Ghana").  See Table 2 under this Item.                                        

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4Reynolds' primary aluminum products include unalloyed aluminum ingot; billet,   
which is used by extrusion plants; sheet ingot, which is supplied to rolling    
facilities; foundry ingot, which is the base material for cast products such    
as automotive wheels; and electrical redraw rod, which is used by the           
electrical cable industry.  During 1999, 80% of Reynolds' primary aluminum      
products were sold externally to third parties; the remainder was purchased     
by other Reynolds business units.                                               

Production at Reynolds' primary aluminum plants can vary due to a number of     
factors, including changes in worldwide supply and demand.  Reynolds            
currently has the annual capacity to produce 1,094,000 metric tons of primary   
aluminum, of which 47,000 metric tons are temporarily idled.  During 1998,      
Reynolds restarted 162,000 metric tons of previously idled production           
capacity.  Reynolds will monitor market conditions and its internal needs       
before proceeding with further restarts.                                        

In addition to the primary aluminum plants listed in Table 2, Reynolds has a    
10% equity interest in the Aluminum Smelter Company of Nigeria ("ALSCON").      
The smelter closed indefinitely in 1999 due to lack of working capital.  The    
closing has no material effect on Reynolds' operations or financial position.   
Reynolds also has an 8% equity interest in C.V.G. Aluminio del Caroni, S.A.     
("ALCASA"), which produces primary aluminum in Venezuela.                       

Reynolds owns and operates two carbon products manufacturing facilities         
located in Lake Charles and Baton Rouge, Louisiana.  These facilities have      
the capacity to produce 875,000 metric tons of calcined petroleum coke and      
145,000 metric tons of carbon anodes annually.  The anodes are produced         
principally for consumption at Reynolds' primary aluminum plant in Baie         
Comeau, Quebec.  The calcined petroleum coke is used by Reynolds' wholly        
owned primary aluminum plants.  Reynolds also sells calcined petroleum coke     
worldwide to the aluminum and titanium dioxide industries.                      

Reynolds' base materials business also operates a commercial hazardous waste    
treatment facility in Gum Springs, Arkansas for the treatment of spent          
potliner resulting from Reynolds' and other producers' North American aluminum  
reduction operations.  Regulations issued by the U.S. Environmental Protection  
Agency (the "EPA") require the treatment of spent potliner to prescribed        
standards prior to disposal.  The Gum Springs facility has the capacity to      
treat 120,000 short tons of spent potliner annually and is currently operating  
at approximately 50% of capacity.  In July 1998, the U. S. Court of Appeals     
for the District of Columbia struck down the treatment standards included in    
the then current EPA regulations.  The EPA subsequently adopted temporary       
standards, which are expected to continue in effect until final standards are   
adopted.  Reynolds has submitted permit applications to state and federal       
environmental authorities to allow it to operate the Gum Springs facility's     
landfill as a hazardous waste landfill.  The applications were submitted as a   
result of the EPA's 1997 decision to classify treated spent potliner as a       
hazardous waste.                                                                

ENERGY                                                                          
------                                                                          

Reynolds consumes substantial amounts of energy in the aluminum production      
process.  Refining alumina from bauxite requires high temperatures.  The        
facilities where Reynolds refines alumina achieve these temperatures by         
burning natural gas or coal to produce direct heat or steam.  Natural gas and   
coal for these facilities are purchased under long- and short-term contracts.   
See Table 1 under this Item.                                                    

The electrolytic process for reducing alumina to primary aluminum requires      
large amounts of electricity.  Reynolds generally expects to meet the energy    
requirements for its primary aluminum production for the foreseeable future     
under long-term contracts.  Under these contracts, however, Reynolds may        
experience shortages of interruptible power from time to time at its Massena,   
New York plant and at the plant in Ghana in which Reynolds holds a joint-       
venture interest.  The portion of power supplied to the Massena plant that is   
interruptible (approximately 15%) can be offset with power purchased from       
other sources at market rates.  Production at Ghana is dependent on             
hydroelectric power.  The Ghana plant is currently operating at reduced         
capacity due to drought conditions that have existed since 1994.  See Table 2   
under this Item.                                                                

Bonneville Power Administration ("BPA") supplies electricity to Reynolds'       
smelters at Longview, Washington and Troutdale, Oregon.  The current contract   
with BPA expires on September 30, 2001.  BPA has proposed reducing the amount   
of power supplied to the smelters by one-third and pricing the power on a       
formula under which charges would vary with world aluminum prices.  Assuming    
"average" world aluminum prices (with the basis for determining what is         
"average" yet to be settled), the rate charged to Reynolds for the period       
2001-2006 would                                                                 

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5increase by 13% over what Reynolds currently pays.  Reynolds would also have to 
find other sources for the balance of its power needs.  The BPA proposal is     
subject to full consideration in a rate case, in which Reynolds can present     
arguments to improve the offered rate, and other parties can challenge both     
the quantity of power being provided to the Reynolds smelters and the rates at  
which it is to be provided.  Reynolds expects to participate actively in the    
resolution of this issue and to continue assessing alternate power sources      
for the two smelters.                                                           

                                                                [Download Table]
                                     TABLE 1                               

                        ALUMINA PLANTS AND ENERGY SUPPLY                   

                            Rated                                          
                        Capacity(a) at                         Principal   
                       December 31, 1999     Energy         Energy Contract
Plant                     Metric Tons      Purchased(b)     Expiration Date
-----                     -----------      ------------     ---------------
                                                                           
Corpus Christi, Texas     1,600,000        Natural Gas          (c),(d)    
Worsley, Australia        1,053,000(e)     Coal and             2002(d)    
                                           Natural Gas                     
Stade, Germany              375,000(e)     Natural Gas          2008       

                                                                [Download Table]
                                     TABLE 2                            

              PRIMARY ALUMINUM PRODUCTION PLANTS AND ENERGY SUPPLY      


                          Rated                                         
                      Capacity(a) at                       Principal    
                     December 31, 1999      Energy       Energy Contract
Plant                   Metric Tons       Purchased(b)   Expiration Date
-----                   -----------       ------------   ---------------
                                                                        
Baie Comeau, Quebec     400,000            Electricity    2011 and 2014 
Longview, Washington    204,000(f)         Electricity    2001          
Massena, New York       123,000(f)         Electricity    2013(g)       
Troutdale, Oregon       121,000(f)         Electricity    2001          
Becancour, Quebec       186,000(h)         Electricity    2014          
Hamburg, Germany         40,000(h)         Electricity    2005          
Ghana                    20,000(h)         Electricity    2017          

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                                                                [Download Table]
                                     TABLE 3                            

              ALUMINA AND PRIMARY ALUMINUM CAPACITY AND PRODUCTION      
                                  (Metric Tons)                         

            Alumina(e),(i)                    Primary Aluminum(h),(j)   
       --------------------------          -----------------------------
         Rated                               Rated                      
Year   Capacity(a)     Production          Capacity(a)     Production(f)
----   -----------     ----------          -----------     -------------
                                                                        
1997    2,944,000      2,724,000            1,094,000        893,200    
1998    2,944,000      2,868,000            1,094,000        982,900    
1999    3,028,000      2,929,000            1,094,000      1,052,700    

NOTES TO TABLES 1, 2, and 3.                                                    

(a)  Ratings are estimates at the end of the period based on designed           
capacity and normal operating efficiencies and do not necessarily represent     
maximum possible production.                                                    

(b)  See "Energy" above.                                                        

(c)  The Sherwin plant currently purchases 50% of the natural gas required      
to operate the plant on a month-to-month basis.  Beginning in June 2000, it     
is anticipated that all gas will be supplied under contracts of one year or     
longer.                                                                         

(d)  Reynolds has a long-term agreement to purchase all of Sherwin's steam      
and a portion of its electricity from a third-party cogeneration facility       
beginning in June 2000.  Worsley has a similar contract to purchase a           
portion of its steam and electricity which began in early 2000.                 

(e)  Reynolds is entitled to 56% of the production of Worsley and 50% of the    
production of Stade.  Capacity and production figures reflect Reynolds'         
share.                                                                          

(f)  Reynolds curtailed 121,000 metric tons of production capacity at its       
Troutdale primary aluminum plant in the second half of 1991 and restarted       
74,000 metric tons of that capacity in 1998.  Reynolds also curtailed an        
aggregate of 88,000 metric tons of primary aluminum production capacity at      
its Massena (41,000 metric tons) and Longview (47,000 metric tons) plants       
effective in 1993.  All of the idled capacity at Massena and Longview was       
restarted during 1998.                                                          

(g)  The power contract terminates in 2013, subject to earlier termination      
by the supplier in 2003 if its federal license for its hydroelectric project    
is not renewed.                                                                 

(h)  Reynolds is entitled to 50% of the production of Becancour, 33-1/3% of     
the production of Hamburg, and 10% of the production of Ghana.  Capacity and    
production figures reflect Reynolds' share.  Production at Ghana has been       
curtailed since September 1994 by drought.  At December 31, 1998, Ghana was     
operating at 20% of capacity. Ghana began restarting a portion of its           
curtailed capacity in 1999.  The plant is currently operating at                
approximately 80% of capacity.                                                  

(i)  Production is from the alumina production operations listed in Table 1.    

(j)  Production is from the primary aluminum production operations listed in    
Table 2.                                                                        

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7PACKAGING AND CONSUMER                                                          
----------------------                                                          

Reynolds' packaging and consumer global business unit provides a variety of     
foil, plastic and other products and related services to the packaging and      
consumer products markets.  Reynolds is the world's leading aluminum foil       
producer and a major converter of plastic resins.                               

Reynolds markets a diverse range of flexible packaging products including       
inner and outer wraps, pouches, specialty cartons, child-resistant blister      
backing, and plastic containers.  Reynolds' customers include global            
marketers of food, confection, healthcare and tobacco products.  Reynolds       
also serves the foodservice market (restaurants, delis, supermarket take-       
out, and fast-food and catering establishments) with over 1,000 foil,           
plastic and paper products including aluminum and plastic film, plastic         
containers and lids, foodservice bags, catering trays, sandwich bags and        
wraps, baking cups and trays.  Reynolds also produces industrial plastic        
film (including Reynolon shrink film) and labels for shrink wrapping and        
tamper-evident packaging.                                                       

Reynolds manufactures its packaging products at wholly owned facilities in      
the U.S., Brazil, Canada and Spain.  See Table 4 under the heading              
"Packaging and Consumer."  Reynolds also has an interest in foil operations     
in Colombia and Venezuela.  The capacity of these manufacturing facilities      
depends on the variety and types of products manufactured.                      

Reynolds' packaging and consumer global business unit also manufactures and     
markets an extensive line of foil, plastic and paper consumer products under    
the Reynolds brand name.  Products include the well-known Reynolds Wrap         
Aluminum Foil, Reynolds Plastic Wrap, Reynolds Oven Bags, Reynolds Freezer      
Paper, Reynolds Cut-Rite Wax Paper, Reynolds Baker's Choice Bake Cups,          
Reynolds Hot Bags Foil Bags and Reynolds Wrappers Foil Sandwich Sheets.         
Reynolds' consumer products are distributed throughout the U.S., which is       
Reynolds' largest market for these products, and in more than 65 other          
countries.                                                                      

In April 1999, Reynolds launched a foodservice packaging and consumer           
products subsidiary, Reyco Ltda., in Sao Paulo, Brazil.  Reyco produces         
foodservice packaging and consumer products under the Reynolds brand name.      

Through its Presto Products Company subsidiary, Reynolds is a supplier of       
private label consumer products.  Presto produces a variety of plastic food     
wraps and bags (including trash bags and reclosable snack, sandwich, storage    
and freezer bags) that are sold under private labels.                           

Reynolds' subsidiary, Southern Graphic Systems, Inc., produces rotogravure      
printing cylinders, color separations and flexographic plates used in           
Reynolds' packaging printing operations and for the consumer and industrial     
packaging industry.  Southern Graphic's major customers, in addition to         
Reynolds, are other consumer products companies and converters, with a trend    
toward consumer products companies.  Southern Graphic also provides graphics    
management services and manufactures printing accessories (bases and anilox     
rolls).                                                                         

In February 1999, Southern Graphic acquired London Graphics Inc., a Toronto,    
Ontario producer of flexographic separations and plates for the packaging       
industry in Canada.  It has been integrated with Southern Graphic's Canadian    
operations.  Southern Graphic also acquired the assets and/or businesses of     
four U.S. producers of flexographic separations and plates for the packaging    
industry in 1999.  In addition, Southern Graphic, through its Mexican           
subsidiary, Southern Graphic Systems Mexico S. de R.L. de C. V., began          
providing onsite services to its customers at its new Mexico City, Mexico       
offices in late 1999.                                                           

CONSTRUCTION AND DISTRIBUTION                                                   
-----------------------------                                                   

Reynolds' construction and distribution global business unit distributes        
aluminum, stainless steel and other specialty metal products under the names    
Reynolds Aluminum Supply Company ("RASCO") and RASCO Specialty Metals Inc.      
(in Canada).  This business unit also produces and sells architectural          
products and systems.                                                           

RASCO provides supply chain management services to North American metal         
fabricating customers requiring high-quality aluminum, stainless steel and      
other specialty metal products.  During 1999, RASCO's sales (not including      
RASCO Specialty Metals Inc.) were 58% in aluminum products and 39% in           
stainless steel products.  RASCO processes and distributes plate, sheet,        
extrusions, rod and bar products through 37 facilities across North             

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8America.  RASCO provides metal processing services such as cutting to length,   
slitting, shearing, sawing and plasma burning.  The metal processing services   
offered by RASCO allow it to provide customized products, delivered             
just-in-time to customers.  RASCO's customers include fabricators and           
manufacturers in transportation, equipment, machinery and other markets.        

In 1999, RASCO acquired two metal distribution centers in the U.S. and five     
in Canada, and opened three new metal distribution centers in the U.S. and      
one in Mexico.                                                                  

Through its construction operations Reynolds produces Reynobond aluminum        
composite material that is sold worldwide for architectural and specialty       
applications.  In 1999, Reynolds increased its capability to serve European     
and global demand for composite material with the substantial completion of     
an expansion of its plant in Merxheim, France.                                  

Reynolds' construction and distribution business unit also produces Reynolux    
painted aluminum sheet and profiled products; designs and markets               
architectural systems consisting of curtainwall, window and door units for      
residential and commercial applications; and produces and sells polymer-        
coated magnet wire for electrical transformers.                                 

TRANSPORTATION                                                                  
--------------                                                                  

Reynolds' transportation global business unit operates nine plants supplying    
a wide range of fabricated aluminum products to the transportation industry     
and has interests in two additional plants located in Canada and Venezuela.     
See Table 4 below under the heading "Transportation."  Reynolds' principal      
products are wheels, heat exchanger tubing and automotive structures.           
Reynolds markets these products primarily in North America to the "Big          
Three" automobile manufacturers, with customers also in Europe and              
Venezuela.                                                                      

Reynolds produces forged and cast aluminum wheels in a variety of sizes,        
styles and finishes.  In February 1999, Reynolds completed the start-up of a    
$32 million expansion of its forged aluminum wheel manufacturing facility in    
Lebanon, Virginia.  The expansion doubled the plant's production capacity to    
1.4 million wheels per year.                                                    

Heat exchanger tubing products include extruded and drawn round tube, micro     
multivoid tube and oval tube made of aluminum and long-life alloys.  These      
products are used in applications such as automotive air conditioning           
systems and radiators.                                                          

Automotive structures include bumpers, car and truck door frames,               
convertible roof brackets, sunroof frames, antilock brake system housings,      
steering shafts and steering column brackets, among other items, for use in     
automobiles and truck and trailer systems.  In mid-1999, Reynolds completed     
an equipment expansion at its Indiana extrusion facility to begin production    
of the industry's first high volume aluminum engine cradle.                     

OTHER OPERATIONS    

Reynolds has certain operations that are not within a global business unit.     
These include, principally, its headquarters operations, as well as the         
following:                                                                      

    BOHAI ALUMINIUM INDUSTRIES, LTD. - Reynolds owns a 32.48% interest in this
aluminum foil and extrusion operation located in China.               

CAN MACHINERY - Reynolds operates a can machinery plant that          
manufactures can production machinery used by aluminum can            
manufacturers around the world.                                       

EUROPEAN EXTRUSION OPERATIONS - Reynolds' plants in Nachrodt, Germany 
 and Harderwijk, Netherlands produce extruded aluminum products that are
used internally by Reynolds' construction and distribution and        
transportation global business units.  In addition, the plants        
manufacture products that are sold directly to third parties.  The    
 portion of these extrusion operations related to products sold directly
  to third parties is not included within Reynolds' global business units.

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9LATAS DE ALUMINIO. S.A. ("Latasa") - Reynolds owns a 36.6% interest in
this South American aluminum can operation.                           

REAL ESTATE - Reynolds has real estate holdings consisting principally
of undeveloped land and commercial buildings.                         

UNITED ARAB CAN MANUFACTURING COMPANY, LTD. - Reynolds owns a 27.5%   
interest in this aluminum can operation located in Saudi Arabia.      

COMPETITION   

Competition in Reynolds' industries is based on price, quality and service.     
In the sale of its products, Reynolds competes primarily with (i) producers     
of alumina and primary aluminum and processors of reclaimed aluminum, (ii)      
producers of plastic products, (iii) producers of aluminum and non-aluminum     
packaging materials, (iv) metals service center companies engaged in the        
distribution of aluminum and other products and (v) fabricators of aluminum     
and non-aluminum automotive products.  Reynolds competes with many companies    
around the world in the manufacture of primary aluminum products.  In           
Europe, Reynolds' principal competitors are seven major multinational           
producers of extruded aluminum products and a number of smaller European        
producers of aluminum semifabricated products.  Reynolds' consumer products     
operations compete primarily with a number of U.S. companies.  North America    
is Reynolds' largest market for its flexible packaging products.  Reynolds      
has a large number of competitors in this area, ranging from small, local       
businesses to large, national companies.  Aluminum and related products         
compete with various products, including those made of iron, steel, copper,     
zinc, tin, titanium, lead, glass, wood, plastic, magnesium and paper.           
Plastic products compete with products made of glass, aluminum, steel,          
paper, wood and ceramics, among others.                                         

ENVIRONMENTAL COMPLIANCE    

Reynolds has spent and will spend substantial capital and operating amounts     
relating to ongoing compliance with environmental laws.  The area of            
environmental management, including environmental controls, continues to be     
in a state of scientific, technological and regulatory evolution.               
Consequently, it is not possible for Reynolds to predict accurately the         
total expenditures necessary to meet all future environmental requirements.     
Reynolds expects, however, to add or modify environmental control facilities    
at a number of its worldwide locations to meet existing and certain             
anticipated regulatory requirements, including regulations to be implemented    
under the Clean Air Act Amendments of 1990 (the "Clean Air Act").               

Based on information currently available, Reynolds estimates that compliance    
with the Clean Air Act's hazardous air pollutant standards would require in     
excess of $200 million of capital expenditures (including a portion of the      
expenditures at the Massena plant referred to below), primarily at its U.S.     
primary aluminum production plants.  The ultimate effect of the Clean Air       
Act on such plants and on Reynolds' other operations (and the actual amount     
of any such capital expenditures) will depend on how the Clean Air Act is       
interpreted and implemented pursuant to regulations that are currently being    
developed and on such additional factors as the evolution of environmental      
control technologies and the economic viability of such operations at the       
time.  Based on an August 1995 memorandum of understanding with the State of    
New York to resolve environmental issues at its Massena, New York primary       
aluminum production plant, Reynolds has undertaken a capital spending           
program (planned for completion in 2002) of an estimated $175 million to        
modernize the Massena plant and significantly reduce air emissions from the     
plant.  Pursuant to the memorandum of understanding, Reynolds is                
accelerating certain expenditures believed necessary to achieve compliance      
with the Clean Air Act's Maximum Achievable Control Technology standards.       

Reynolds' capital expenditures for equipment designed for environmental         
control purposes were approximately $43 million in 1997, $80 million in 1998    
and $48 million in 1999.  The portion of such amounts expended in the United    
States was $41 million in 1997, $74 million in 1998 and $41 million in 1999.    
Reynolds estimates that annual capital expenditures for environmental           
control facilities will be approximately $24 million in 2000, $30 million in    
2001 and $21 million in 2002.  The majority of these estimated expenditures     
are associated with the capital spending program                                

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10referred to above at the Massena plant.  Future capital expenditures for        
environmental control facilities cannot be predicted with accuracy for the      
reasons cited above; however, it is reasonable to expect that environmental     
control standards will become increasingly stringent and that the expenditures  
necessary to comply with them could increase substantially.                     

Reynolds has been identified as a potentially responsible party ("PRP") and     
is involved in remedial investigations and remedial actions under the           
Comprehensive Environmental Response, Compensation and Liability Act            
("Superfund") and similar state laws regarding the past disposal of wastes      
at approximately 40 sites in the United States.  Such statutes may impose       
joint and several liability for the costs of such remedial investigations       
and actions on the entities that arranged for disposal of the wastes, the       
waste transporters that selected the disposal sites, and the owners and         
operators of such sites.  Responsible parties (or any one of them) may be       
required to bear all of such costs regardless of fault, legality of the         
original disposal, or ownership of the disposal site.                           

In addition, Reynolds is investigating possible environmental contamination,    
which may also require remedial action, at certain of its present and former    
U. S. manufacturing facilities.  The following discussion provides              
information about the current status of two individually significant sites.     

 MASSENA, NEW YORK SITE.  In 1988, Reynolds discovered that soils in the
area of the heat transfer medium system at Reynolds' primary aluminum 
production plant in Massena, New York were contaminated with          
 polychlorinated biphenyls ("PCBs") and other contaminants.  Remediation
 of the contaminated soils and other contaminated areas of the plant was
substantially completed in 1998.  Portions of the St. Lawrence River  
system adjacent to the plant are also contaminated with PCBs.  Since  
1989, Reynolds has been conducting investigations and studies of the  
 river system under order from the EPA issued under Superfund.  Reynolds
 is in the process of working with the EPA to better define the scope of
 the dredging program which is planned for 2001.  Reynolds is also aware
 of a natural resource damage claim arising out of the discharge of PCBs
and other contaminants into the river system that may be asserted by  
potential claimants, including federal, state and tribal natural      
resource trustees.                                                    

TROUTDALE, OREGON SITE.  In 1994, the EPA added Reynolds' Troutdale,  
Oregon primary aluminum production plant to the National Priorities   
List of Superfund sites.  Reynolds is cooperating with the EPA and,   
under a September 1995 consent order, is working with the EPA in      
investigating potential environmental contamination at the Troutdale  
site and promoting more efficient cleanup at the site.                

At most of the Superfund sites referred to above where Reynolds has been        
identified as a PRP, Reynolds is one of many PRPs, and its share of the         
anticipated cleanup costs is expected to be small.  With respect to certain     
other sites (not included in the 40 sites discussed above) where Reynolds       
has been identified as a PRP, Reynolds has either fully or substantially        
settled or resolved actions related to such sites at minimal cost or            
believes that it has no responsibility with regard to them.  Reynolds has       
been notified that it may be a PRP at certain sites in addition to those        
already referred to in this paragraph.                                          

Reynolds' policy is to accrue remediation costs when it is probable that        
remedial efforts will be required and the related costs can be reasonably       
estimated.  On a quarterly basis, Reynolds evaluates the status of all          
sites, develops or revises estimates of costs to satisfy known remediation      
requirements and adjusts its accruals accordingly.  At December 31, 1999,       
the accrual for known remediation requirements was $162 million.  This          
amount reflects management's best estimate of Reynolds' ultimate liability      
for such costs.  Potential insurance recoveries are uncertain and therefore     
have not been considered.  As a result of factors such as the developing        
nature of administrative standards promulgated under Superfund and other        
environmental laws; the unavailability of information regarding the             
condition of potential sites; the lack of standards and information for use     
in the apportionment of remedial responsibilities; the numerous choices and     
costs associated with diverse technologies that may be used in remedial         
actions at such sites; the availability of insurance coverage; the ability      
to recover indemnification or contribution from third parties; and the time     
periods over which eventual remediation may occur, estimated costs for          
future environmental compliance and remediation are necessarily imprecise.      
It is not possible to predict the amount or timing of future costs of           
environmental remediation that may subsequently be determined.  Based on        
information currently available, it is management's opinion that such future    
costs are not likely to have a material adverse effect on Reynolds' competitive 
or financial position.  However, such costs could be material to future         
quarterly or annual results of operations.                                      

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11See the discussion under "Environmental" in Item 7, and under Note 13 to the    
consolidated financial statements in Item 8 of this report regarding            
Reynolds' anticipated costs of environmental compliance.                        

RESEARCH AND DEVELOPMENT    

Reynolds engages in a continuous program of basic and applied research and      
development to support its global business units.  This program deals with      
new and improved materials, products, processes and related environmental       
compliance technologies.  It includes development and expansion of products     
and markets that benefit from aluminum's light weight, strength, resistance     
to corrosion, ease of fabrication, high heat and electrical conductivity,       
recyclability and other properties.  Materials and core competencies            
involving aluminum, ceramics, composites and various polymers and their         
processing, fabrication and applications are also included in the scope of      
Reynolds' research and development activities.                                  

Expenditures for Reynolds-sponsored research and development activities were    
approximately $25 million in 1999, $31 million in 1998, and $41 million in      
1997.                                                                           

Reynolds owns numerous patents relating to its products and processes based     
predominantly on its in-house research and development activities.  The         
patents owned by Reynolds, or under which it is licensed, generally concern     
particular products or manufacturing techniques.  Reynolds' business is not,    
however, materially dependent on patents.                                       

EMPLOYEES   

At December 31, 1999, Reynolds had approximately 18,900 employees.              

In 1996, Reynolds entered into new six-year labor contracts with the United     
Steelworkers of America and the Aluminum, Brick and Glass Workers               
International Union.  The contracts involve approximately 3,700 active          
employees.  At the end of the fifth year, the economic provisions of the        
contracts will be reopened.  If agreement cannot be reached, the economic       
provisions applicable to the sixth year will be submitted to arbitration.       

ITEM 2.  PROPERTIES                                                             

Reynolds' products are produced at numerous domestic and foreign plants         
wholly or partly owned by Reynolds.  The annual capacity of many of these       
plants depends upon the variety and type of products manufactured.  For         
information on the location and general nature of certain of Reynolds'          
principal domestic and foreign properties, see Item 1 of this report.  Table    
4 lists as of February 25, 2000 Reynolds' wholly owned domestic and foreign     
operations and shows the domestic and foreign locations of operations in        
which Reynolds has interests.  Facilities that are under construction or for    
other reasons have not begun production are not listed.  The properties         
listed are held in fee except as otherwise indicated.  Properties held other    
than in fee are not, individually or in the aggregate, material to Reynolds'    
operations and the arrangements under which such properties are held are not    
expected to limit their use.  Reynolds believes that its facilities are         
suitable and adequate for its operations.  With the exception of the            
Troutdale, Ghana and Nigerian primary aluminum production plants and the        
Arkansas spent potliner treatment facility, as explained in Item 1, there is    
no significant surplus or idle capacity at Reynolds' major manufacturing        
facilities.                                                                     

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12TABLE 4             
WHOLLY OWNED OPERATIONS           

BASE MATERIALS            

ALUMINA:                            PRIMARY ALUMINUM:                 
Corpus Christi, Texas               Massena, New York                 
Malakoff, Texas+                    Troutdale, Oregon                 
                      Longview, Washington
CALCINED COKE:                      Baie Comeau, Quebec               
Baton Rouge, Louisiana                                                
Lake Charles, Louisiana             SPENT POTLINER TREATMENT:         
                       Gum Springs, Arkansas
CARBON ANODES:                                                        
Lake Charles, Louisiana                                               

ELECTRICAL REDRAW ROD:                                                
Becancour, Quebec                                                     

PACKAGING AND CONSUMER        

    FOIL FEED STOCK:                    PACKAGING GRAPHICS AND IMAGE CARRIERS:
Hot Springs, Arkansas               Bridgeport, Connecticut*          
                   Atlanta, Georgia*
PACKAGING AND CONSUMER PRODUCTS:    LaGrange, Georgia*                
Beacon Falls, Connecticut           Elgin, Illinois*                  
Louisville, Kentucky (2)            Clarksville, Indiana*             
Mt. Vernon, Kentucky                Dayton, Kentucky*                 
Sparks, Nevada*                     Louisville, Kentucky (2)          
Boyertown, Pennsylvania             Newport, Kentucky*                
Downingtown, Pennsylvania           West Monroe, Louisiana            
Lewiston, Utah                      Battle Creek, Michigan*           
Rutland, Vermont                    St. Louis, Missouri *             
Bellwood, Virginia                  Armonk, New York*                 
Grottoes, Virginia                  Fulton, New York                  
Richmond, Virginia                  Wilmington, North Carolina*       
South Boston, Virginia              Exton, Pennsylvania*              
Appleton, Wisconsin (2)             Dallas, Texas                     
Little Chute, Wisconsin             Richmond, Virginia (2)**          
Weyauwega, Wisconsin                Mexico City, Mexico*              
Sao Paulo, Brazil*                  Brockville, Ontario*              
Rexdale, Ontario*                   Mississauga, Ontario (2)*         
Barcelona, Spain                    Toronto, Ontario*                 

CONSTRUCTION AND DISTRIBUTION         

CONSTRUCTION:                       DISTRIBUTION:                     
Eastman, Georgia                    Service Centers (U.S.) (27)**     
Ashland, Virginia                                   (Canada) (5)**    
Merxheim, France                                    (Mexico) (1)*     
Lelystadt, Netherlands              Processing Centers (U.S.) (4)**   
Distribution Centers (Europe) (9)**                                   
(China) (1)*                
(U.S.) (1)*                 

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13TRANSPORTATION          

HEAT EXCHANGERS:                    WHEELS:                           
Louisville, Kentucky                Lebanon, Virginia                 
Wexford, Ireland                    Beloit, Wisconsin                 
                Ferrara, Italy
STRUCTURES:                                                           
Auburn, Indiana                                                       
Maracay, Venezuela                                                    
Nachrodt, Germany***                                                  
Harderwijk, Netherlands***                                            

OTHER           

CAN MACHINERY AND SYSTEMS:          RESEARCH AND DEVELOPMENT:         
Richmond, Virginia                  Muscle Shoals, Alabama            
                   Bauxite, Arkansas
                       Corpus Christi, Texas
                        Richmond, Virginia (2)

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14OTHER OPERATIONS        
IN WHICH REYNOLDS HAS INTERESTS         

Argentina:                                     Ghana:                           
Aluminum cans                                  Primary aluminum                 

Australia:                                     Guinea:                          
Bauxite, alumina                               Bauxite, alumina                 

Brazil:                                        Guyana:                          
Aluminum cans and ends, bauxite                Bauxite                          

Canada:                                        Italy:                           
Primary aluminum, electric power               Reclamation                      
generation, aluminum wheels                                                     
                      Nigeria:
Chile:                                         Primary aluminum                 
Aluminum cans                                                                   
                           Saudi Arabia:
China:                                         Aluminum cans                    
Foil, extrusions                                                                
                        Venezuela:
Colombia:                                      Primary aluminum, mill products, 
Mill products, extrusions, foil                foil, aluminum wheels            

Egypt:                                                                          
Extrusions                                                                      

Germany:                                                                        
Alumina, primary aluminum                                                       

____________________________                                                    
*    Leased.                                                                    
**   Richmond, Virginia Packaging Graphics and Image Carriers - 1 leased.       
European Distribution Centers - 5 leased.                             
U.S. Service Centers - 17 leased.                                     
Canadian Service Centers - 3 leased.                                  
U.S. Processing Centers - 2 leased.                                   
***  These plants also produce extruded products for Reynolds' construction and 
distribution business unit.  The plant in Harderwijk, Netherlands also
manufactures heat exchangers and other extruded products.             
+    This plant manufactures chemical grade alumina and does not manufacture    
alumina for use in the aluminum production process.                   

The titles to Reynolds' various properties were not examined specifically for   
this report.                                                                    

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15ITEM 3.  LEGAL PROCEEDINGS                                                      

On August 11, 1999, eight class action complaints on behalf of stockholders     
of Reynolds were filed in the Delaware Court of Chancery against Reynolds       
and certain present and former members of its board of directors.  These        
actions are styled Tozour Energy Systems Retirement Plan v. Sheehan, et al.;    
Lisa v. Reynolds Metals Company, et al.; Yassin v. Reynolds Metals Company,     
et al.; Weinfeld v. Sheehan, et al.; Bader & Yakaitis Profit Sharing Plan       
and Trust v. Sheehan, et al.; Rand v. Sheehan, et al.; Grill v. Sheehan, et     
al.; and Randolph Capital Management, Inc. v. Sheehan, et al.  The              
complaints were filed after Alcoa announced its proposal to acquire             
Reynolds.  The plaintiff in each action alleged, among other things, that       
the directors of Reynolds failed to negotiate with Alcoa before Alcoa's         
announcement; that they were breaching their fiduciary duties by failing to     
explore offers for the purchase of Reynolds or to engage in meaningful          
discussions with interested parties such as Alcoa; that they were attempting    
to entrench themselves in their positions at Reynolds through misuse of         
Reynolds' shareholder rights plan; and that they were attempting to deprive     
the plaintiffs of the true value of their investment in Reynolds.  The          
plaintiff in each action sought injunctive relief requiring the directors of    
Reynolds to give due consideration to any proposed business combination, to     
resolve any conflicts in favor of Reynolds' public stockholders, and to         
refrain from consummating any business combination without conducting an        
auction or other process to obtain the highest possible price for Reynolds.     
The complaints also sought unspecified damages and awards of fees and costs.    
On February 11, 2000, Reynolds' stockholders approved the merger agreement      
between Reynolds and Alcoa.  Counsel for the plaintiffs in the Lisa, Yassin,    
Weinfeld, Bader & Yakaitis Profit Sharing Plan and Trust, Rand and Grill        
actions recently informed the Delaware Court of Chancery that the plaintiffs    
in those actions intend to file promptly with the Court a notice dismissing     
such actions without prejudice.                                                 

Various other suits, claims and actions are pending against Reynolds.  In the   
opinion of Reynolds' management, after consultation with legal counsel,         
disposition of these proceedings, either individually or in the aggregate,      
will not have a material adverse effect on Reynolds' competitive or financial   
position.  No assurance can be given, however, that the disposition of one or   
more of such suits, claims or actions in a particular reporting period will     
not be material in relation to the reported results for such period.            

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                    

No matters were submitted to a vote of the Registrant's security holders        
during the fourth quarter of 1999.                                              

A special meeting of Reynolds stockholders was held on February 11, 2000.       
The stockholders approved and adopted the Agreement and Plan of Merger, dated   
as of August 18, 1999, among Alcoa Inc., RLM Acquisition Corp. and Reynolds     
Metals Company, and approved the transactions contemplated thereby.  At         
December 29, 1999, the record date for the special meeting, 63,463,257          
shares of common stock were outstanding and entitled to vote.  The number       
of votes cast for and against, and the number of abstentions, as applicable,    
were as set forth below.  No other matter was voted upon at the meeting.        

Number of Votes Cast "For"              41,335,471          
Number of Votes Cast "Against"             457,861          
Number of Abstentions                    5,609,245          

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16ITEM 4A.  EXECUTIVE OFFICERS OF THE REGISTRANT                                  

The executive officers of the Registrant are as follows:                        

Name                       Age*    Positions Held During Past Five Years        
----                       ----    -------------------------------------        

Jeremiah J. Sheehan        61      Chairman of the Board and Chief Executive    
                                Officer since October 1996.  President and
                                  Chief Operating Officer 1994-1996.  Director
 since 1994.

Randolph N. Reynolds**     58      Vice Chairman and Executive Officer since    
                             October 1996.  Vice Chairman 1994-1996.
          Director since 1984.

William E. Leahey, Jr.     50      Executive Vice President and Chief           
                                Financial Officer since July 1998.  Senior
                                  Vice President, Global Can, April 1997-1998.
                             Vice President, Can Division 1993-1997.

Thomas P. Christino        60      Senior Vice President, Global Packaging and  
                                Consumer Products, since April 1997.  Vice
                            President, Flexible Packaging Division
1993-1997.

Donald T. Cowles           53      Senior Vice President, Global Construction   
                               and Distribution, since April 1997.  Vice
                            President and Reynolds Aluminum Supply
                             Company Division General Manager August
                           1995-1997.  Executive Vice President,
                          Human Resources and External Affairs
1993-1995.

Eugene M. Desvernine       58      Senior Vice President, Diversified           
                                Investments, since July 1999.  Senior Vice
                                  President, Global Transportation, April 1997
                        - 1999.  Vice President 1994-1997.

Allen M. Earehart          57      Senior Vice President and Controller since   
                            July 1998.  Vice President, Controller
1994-1998.

D. Michael Jones           46      Senior Vice President and General Counsel    
                                  since October 1996.  Vice President, General
                      Counsel and Secretary 1993-1996.

John M. Lowrie             59      Senior Vice President and Executive          
                                 Director - Enterprise Systems since January
                              1999.  Vice President, Consumer Products
1988-1999.

Paul Ratki                 60      Senior Vice President, Global Metals and     
                              Carbon Products, since April 1997.  Vice
                           President, Metals Division 1994-1997.

C. Stephen Thomas          60      Senior Vice President, Global Technology     
                               and Operational Services, since May 1997.
                            Vice President, Mill Products Division
1992-1997.

Donna C. Dabney            52      Secretary and Assistant General Counsel      
                            since October 1996.  Associate General
        Counsel 1993-1996.

Douglas M. Jerrold         49      Vice President, Tax Affairs, since April     
1990.     

Ruth J. Mack               45      Vice President, Consumer Products, since     
                                  April 1999.  Executive Vice President, Sales
                             and Marketing, Wampler Foods 1997-1999.
                             Executive Vice President, Marketing and
                 Sales, Just Born 1994-1997.

Lou Anne J. Nabhan         45      Vice President, Corporate Communications,    
                              since January 1998.  Director, Corporate
               Communications 1993-1998.

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17F. Robert Newman           56      Vice President, Human Resources, since       
                              October 1995.  Corporate Director, Human
          Resources 1993-1995.

Edmund H. Polonitza        57      Vice President, Development and Strategic    
                              Planning, since January 1998.  Corporate
                                  Director, Development and Strategic Planning
1987-1998.

William G. Reynolds, Jr.** 60      Vice President, Government Relations         
                             and Public Affairs, since October 1980.

John F. Rudin              54      Vice President, Chief Information Officer,   
                              since August 1995.  Vice President since
                           April 1995.  Reynolds Aluminum Supply
                                 Company Division General Manager 1989-1995.

Julian H. Taylor           56      Vice President, Treasurer, since April       
1988.     

_______________                                                                 
*  As of February 25, 2000.                                                     
** Randolph N. Reynolds and William G. Reynolds, Jr. are brothers.              

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18PART II   

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS  

The Registrant's Common Stock is listed on the New York Stock Exchange.  At     
February 25, 2000, there were 7,161 holders of record of the Registrant's       
Common Stock.                                                                   

The high and low sales prices for shares of the Registrant's Common Stock as    
reported on the New York Stock Exchange Composite Transactions Tape and the     
dividends declared per share during the periods indicated are set forth         
below:                                                                          

                                                                [Download Table]

                    High        Low      Dividends
                    ----        ---      ---------
                                                  
1999                                              

First Quarter      $57-5/8      $38-3/4    $.35   
Second Quarter      68           48-3/16    .35   
Third Quarter       71           55         .35   
Fourth Quarter      77-3/4       57-1/2     .35   

1998                                              

First Quarter      $66          $54-3/8    $.35   
Second Quarter      68-1/8       52-1/4     .35   
Third Quarter       56-15/16     46-7/8     .35   
Fourth Quarter      60-15/16     49-5/16    .35   

On February 18, 2000, the Board of Directors declared a dividend of $.35 per    
share of Common Stock, payable April 3, 2000 to stockholders of record on       
March 3, 2000.                                                                  

RECENT SALES OF UNREGISTERED SECURITIES                                         
---------------------------------------                                         

Under the Registrant's Stock Plan for Outside Directors (the "Stock Plan"),     
each outside Director serving on the Registrant's Board of Directors on or      
after January 1, 1997 receives an annual grant of 225 shares of phantom         
stock of the Registrant, plus dividend equivalents based on the dividends       
that would have been paid on the phantom stock if the outside Director had      
actually owned shares of the Registrant's Common Stock.  The annual grant is    
made in quarterly installments at the end of each calendar quarter.  This       
rate is increased for each outside Director to 425 shares of phantom stock      
per year once the restrictions have expired on all 1,000 shares of              
restricted stock awarded to such outside Director under the Registrant's        
Restricted Stock Plan for Outside Directors.  Payments under the Stock Plan     
will be made upon the outside Director's retirement, resignation or death in    
shares of Common Stock of the Registrant, with fractional shares paid in        
cash.                                                                           

Information regarding grants of phantom shares under the Stock Plan during      
the period January 1 - September 30, 1999 is included in the Registrant's       
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1999, June      
30, 1999 and September 30, 1999.  On October 1, 1999, 112 phantom shares, in    
the aggregate, were granted to the Registrant's nine outside Directors,         
based on an average price of $59.437 per share.  These phantom shares           
represent dividend equivalents paid on phantom shares previously granted        
under the Stock Plan.  On December 31, 1999, 756 phantom shares, in the         
aggregate, were granted to the nine outside Directors, based on an average      
price of $76.531 per share.  These phantom shares represent a quarterly         
installment of each outside Director's annual grant under the Stock Plan.       
During 1999, 3,233 phantom shares were granted under the Stock Plan.            

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19To the extent that these grants constitute sales of equity securities, the      
Registrant issued these phantom shares in reliance on the exemption provided    
by Section 4(2) of the Securities Act of 1933, as amended, taking into          
account the nature of the Stock Plan, the number of outside Directors           
participating in the Stock Plan, the sophistication of the outside Directors    
and their access to the kind of information that a registration statement       
would provide.                                                                  

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20ITEM 6.  SELECTED FINANCIAL DATA                                                
-----------------------------------------------------------------------         

                                                                [Download Table]

Consolidated Income Statement  (millions, except per share amounts)        
------------------------------------------------------------------------   

                             1999     1998     1997     1996     1995      
                          ----------------------------------------------   
                                                                           

Revenues                   $4,796   $5,859   $6,900   $7,016   $7,252      

Cost of products sold       3,928    4,774    5,658    5,856    5,739      
Selling, general and                                                       
 administrative expenses      361      378      406      445      449      
Depreciation and                                                           
 amortization                 242      252      368      365      344      
Interest                       75      114      153      160      172      
Merger-related expenses        19        -        -        -        -      
Operational restructuring                                                  
 effects - net (1)              -      144       75       37        -      
                          ----------------------------------------------   
                            4,625    5,662    6,660    6,863    6,704      
                          ----------------------------------------------   
Income before income                                                       
 taxes, extraordinary                                                      
 loss and cumulative                                                       
 effects of accounting                                                     
 changes                      171      197      240      153      548      
Taxes on income                47       45      104       49      159      
                          ----------------------------------------------   
Income before                                                              
 extraordinary loss and                                                    
 cumulative effects of                                                     
 accounting changes           124      152      136      104      389      
Extraordinary loss              -      (63)       -        -        -      
Cumulative effects of                                                      
 accounting changes (1)         -      (23)       -      (15)       -      
                          ----------------------------------------------   
Net income                 $  124   $   66   $  136   $   89   $  389      
                          ==============================================   

Earnings per share                                                         
 Basic:                                                                    
  Income before                                                            
   extraordinary loss                                                      
   and cumulative effects                                                  
   of accounting changes    $1.95    $2.18    $1.86    $1.06    $5.60      
  Extraordinary loss            -    (0.91)       -        -        -      
  Cumulative effects of                                                    
   accounting changes           -    (0.33)       -    (0.24)       -      
                          ----------------------------------------------   
  Net income                $1.95    $0.94    $1.86    $0.82    $5.60      
                          ==============================================   
 Diluted:                                                                  
  Income before                                                            
   extraordinary loss                                                      
   and cumulative effects                                                  
   of accounting changes    $1.94    $2.18    $1.84    $1.06    $5.25      
  Extraordinary loss            -    (0.91)       -        -        -      
  Cumulative effects of                                                    
   accounting changes           -    (0.33)       -    (0.24)       -      
                          ----------------------------------------------   
  Net income                $1.94    $0.94    $1.84    $0.82    $5.25      
                          ==============================================   

  Cash dividends declared                                                  
   per common share         $1.40    $1.40    $1.40    $1.40    $1.20      
                          ==============================================   

Other items:                                                               
------------                                                               
 Total assets              $5,950   $6,134   $7,226    $7,516  $7,740      
                          ==============================================   

 Long-term debt            $1,067   $1,035   $1,501    $1,793  $1,853      
                          ==============================================   

(1)  See Item 8. Financial Statements and Supplementary Data - Note 1 for a
     discussion of the 1998 change in accounting principle and Note 3 for a
     discussion of operational restructuring.                              

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21ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND        
RESULTS OF OPERATIONS                                         

The following information should be read in conjunction with the                
consolidated financial statements, related notes and other sections of this     
report.  In the tables, dollars are in millions, except per share and per       
pound amounts, and shipments are in thousands of metric tons.  A metric ton     
is equivalent to 2,205 pounds.                                                  

Management's Discussion and Analysis contains forecasts, projections,           
estimates, statements of management's plans,  objectives and strategies for     
the Company and other forward-looking statements.  Please refer to the "Risk    
Factors" section beginning on page 32 where we have summarized factors that     
could cause actual results to differ materially from those projected in a       
forward-looking statement or affect the extent to which a particular            
projection is realized.                                                         

PROPOSED MERGER                                                                 
---------------                                                                 
On August 18, 1999, Reynolds, Alcoa Inc. (Alcoa) and RLM Acquisition Corp.,     
a wholly owned subsidiary of Alcoa, entered into an agreement and plan of       
merger.  Under the merger agreement, each outstanding share of Reynolds         
common stock would be converted into 1.06 shares of Alcoa common stock and      
Reynolds would become wholly owned by Alcoa.  On January 10, 2000, Alcoa        
announced that its Board of Directors had declared a two-for-one split of       
Alcoa's common stock to Alcoa shareholders of record on May 26, 2000.  The      
stock split is subject to approval of Alcoa shareholders who must approve an    
amendment to Alcoa's articles to increase the authorized shares of common       
stock at Alcoa's annual meeting on May 12, 2000.  If approved, the stock        
split would be distributed on June 9, 2000.  Shares of Alcoa stock that are     
issued in the merger will be adjusted, as necessary, to reflect the stock       
split.                                                                          

The proposed merger, which was approved by Reynolds' stockholders at a          
special meeting held on February 11, 2000, is subject to customary closing      
conditions, including antitrust clearances.                                     

The Hart-Scott-Rodino Antitrust Improvements Act of 1976 prohibits Alcoa and    
Reynolds from completing the merger until certain information has been          
furnished to the Antitrust Division of the Department of Justice and the        
Federal Trade Commission, and until certain waiting period requirements have    
been satisfied.  Alcoa filed a Hart-Scott-Rodino Premerger Notification and     
Report Form on August 24, 1999 and Reynolds filed such a Form on August 30,     
1999.  On September 29, 1999, the Antitrust Division issued a request for       
additional information and documentary material (a "second request").  On       
February 11, 2000, both Reynolds and Alcoa announced that they believed that    
they were in substantial compliance with the second request.  They also         
advised the Department of Justice that they would not close the merger          
before March 31, 2000, in order to provide the Department sufficient time to    
review the transaction.                                                         

In Europe, certain regulations require that Alcoa file a premerger              
notification form with the Commission of the European Communities prior to      
consummation of the proposed merger.  Alcoa filed such notification on          
November  18, 1999.  This filing began an initial one-month review period in    
which the European Commission was required to determine whether there are       
sufficiently "serious doubts" about the proposed merger's compatibility with    
the common market to require a more complete review.  The initial one-month     
period expired on December 20, 1999, whereupon the European Commission          
issued a determination that the proposed merger did require a more complete     
review.  The European Commission must complete its investigation and make a     
final determination with respect to the proposed merger no later than May       
10, 2000.                                                                       

Reynolds and Alcoa have also made filings under the competition laws of         
Canada, Australia and certain other countries where the companies have          
significant operations.  Alcoa and Reynolds have been advised that the          
Canadian Competition Bureau has classified this merger as "very complex."       
Its review is expected to be completed no later than May 24, 2000.  The         
Australian review process is also expected to be completed by the end of        
May 2000.                                                                       

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22PROPOSED MERGER - continued                                                     
---------------                                                                 
The merger agreement contains certain restrictions on the conduct of            
Reynolds' business before completion of the merger.  For example, Reynolds      
has agreed to operate its business only in the ordinary course, to refrain      
from taking certain corporate actions without the consent of Alcoa, and not     
to solicit alternative acquisition proposals.                                   

In 1999, the Company recognized $19 million of merger-related expenses.         
Merger-related expenses are principally for investment banking and legal        
services and an increase in the expense accrual for a long-term compensation    
plan, which varies based principally on appreciation of the Company's stock     
price as compared to the S&P Basic Materials Index.  The Company expects        
total merger-related expenses to be at least $35 million.                       

                                                                [Download Table]

RESULTS OF OPERATIONS                                                
---------------------                                                
                                    1999        1998          1997   
                                 ------------------------------------
                                                                     
RESULTS                                                              
Income before extraordinary                                          
 loss and cumulative effect                                          
 of accounting change               $124        $152          $136   
Extraordinary loss (see Note 4)        -         (63)            -   
Cumulative effect of accounting                                      
 change (see Note 1)                   -         (23)            -   
                                 ------------------------------------
Net income                          $124        $ 66          $136   
                                 ====================================

EARNINGS PER SHARE - BASIC                                           
Income before extraordinary                                          
 loss and cumulative effect                                          
 of accounting change              $1.95       $2.18         $1.86   
Extraordinary loss                     -       (0.91)            -   
Cumulative effect of                                                 
 accounting change                     -       (0.33)            -   
                                 ------------------------------------
Net income                         $1.95       $0.94         $1.86   
                                 ====================================

AVERAGE REALIZED PRICE PER POUND                                     
 Primary aluminum                  $0.69       $0.72         $0.82   

Income before extraordinary loss and cumulative effect of accounting change     
includes after tax charges for:                                                 

                                                                [Download Table]

                                                               
Merger-related expenses                                        
 (see Note 2)                     $16         $ -           $ -
Operational restructuring                                      
 (see Note 3)                       -          90            78

Our results increased (decreased) compared to the prior year due principally to 
the following (all amounts are pre-tax):                                        

                                                                [Download Table]

                                                            1999       1998   
                                                         ---------------------
                                                                              
Lower prices                                               $(121)     $(134)  
Loss of income on sold operations                           (124)         -   
Non-cash charges resulting from foreign currency                              
 translation                                                 (35)         -   
Lower conversion costs                                        40         21   
Lower interest expense                                        39         39   
Higher sales volume and lower material costs and expenses     67        100   

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23RESULTS OF OPERATIONS - continued                                               
---------------------                                                           
GLOBAL BUSINESS UNITS                                                           
The Company is organized into four market-based, global business units.  The    
four global business units and their principal products are as follows:         

. Base Materials - alumina, carbon products, primary aluminum ingot and       
billet, and electrical rod                                                  
. Packaging and Consumer - aluminum and plastic packaging; foodservice        
and consumer products; printing products                                    
. Construction and Distribution - architectural construction products and     
the distribution of a wide variety of aluminum and stainless steel products 
. Transportation - aluminum wheels, heat exchangers and automotive            
structures                                                                  

                                                                [Download Table]

BASE MATERIALS                                                         
                                 1999           1998          1997     
                             ------------------------------------------
                                                                       
  Aluminum shipments:                                                  
   Customer                       867            668           513     
   Internal                       211            354           684     
                             ------------------------------------------
   Total                        1,078          1,022         1,197     
                             ==========================================

  Revenues:                                                            
   Customer - aluminum         $1,325         $1,055        $  923     
            - nonaluminum         368            402           405     
   Internal - aluminum            306            572         1,187     
                             ------------------------------------------
   Total                       $1,999         $2,029        $2,515     
                             ==========================================
  Operating income             $  250         $  290        $  312     
                             ==========================================

The Base Materials global business unit consists principally of the             
following:                                                                      

Aluminum                                                                        
--------                                                                        
. Primary aluminum - Three plants in the U.S., one in Canada and partial      
interests in plants in Canada (50% owned), Germany (33-1/3% owned) and Ghana
(10% owned).  Our rated annual production capacity including our share of   
partial interests is 1,094,000 metric tons, of which 47,000 metric tons is  
temporarily idled (see below).                                              
. Electrical rod - One plant in Canada.                                       

Nonaluminum                                                                     
-----------                                                                     
. Alumina - One plant in the U.S. and partial interests in plants in          
Australia (56% owned) and Germany (50% owned).  Our rated annual production 
capacity including our share of partial interests is 3,028,000 metric tons. 
Depending on operating rates of primary aluminum and alumina facilities,    
approximately 70% of alumina production is consumed within the Base         
Materials global business unit.                                             
. Carbon products - Two U.S. plants that produce calcined petroleum coke      
(one of which also produces carbon anodes) principally for use in primary   
aluminum facilities.  Depending on operating rates of primary aluminum and  
carbon products facilities, approximately 45% of carbon products production 
is consumed within the Base Materials global business unit.                 

The increase in customer aluminum shipments in 1999 and 1998 reflects strong    
demand for our value-added products (foundry, high purity and sheet ingot,      
billet and rod), which made up 75% of our primary aluminum shipments in         
1999.  Our available supply to meet customer needs has increased because we     
no longer need to supply downstream fabricating operations that have been       
sold.  Our available supply also increased because of restarting idled          
capacity in 1998 (as discussed below).                                          

In addition to reflecting the changes in shipping volume, aluminum revenues     
were significantly affected by lower primary aluminum prices in 1999 and        
1998.                                                                           

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24RESULTS OF OPERATIONS - continued                                               
---------------------                                                           
GLOBAL BUSINESS UNITS - continued                                               
BASE MATERIALS - continued                                                      
Nonaluminum revenues were lower in 1999 because of lower prices and shipping    
volume for carbon products.  Alumina shipments were higher in 1998 because      
of significant improvements in production efficiencies and capacity             
utilization at our U.S. alumina plant.  Nonaluminum revenues were flat in       
1998 as lower prices for alumina and carbon products offset the effect of       
higher alumina shipments.                                                       

The most significant factor affecting operating profit in 1999 and 1998 was     
lower prices for primary aluminum.  Also contributing to the decline in 1998    
were non-recurring restart costs at our primary aluminum plants, lower          
technical services income and lower alumina prices.  We were able to offset     
most of the declines with improved capacity utilization, significant cost       
reductions, lower costs for certain raw materials, higher customer shipments    
and, in 1999, higher alumina prices.                                            

Results in all three years were negatively impacted by temporarily curtailed    
capacity at our U.S. primary aluminum plants.  During 1998, we restarted        
162,000 metric tons of previously idled capacity.  We plan to monitor our       
internal needs and market conditions before finalizing the schedule to          
restart the remaining 47,000 metric tons at our Troutdale, Ore., plant.         

Bonneville Power Administration ("BPA") supplies electricity to our smelters    
at Longview, Washington and Troutdale, Oregon.  The current contract with       
BPA expires on September 30, 2001.  BPA has proposed reducing the amount of     
power supplied to the smelters by one-third and pricing the power on a          
formula under which charges would vary with world aluminum prices.  Assuming    
"average" world aluminum prices (with the basis for determining what is         
"average" yet to be settled), the rate charged to Reynolds for the period       
2001-2006 would increase by 13% over what we currently pay.  We would also      
have to find other sources for the balance of our power needs.  The BPA         
proposal is subject to full consideration in a rate case, in which we can       
present arguments to improve the offered rate, and other parties can            
challenge both the quantity of power being provided to the Reynolds smelters    
and the rates at which it is to be provided.  We expect to participate          
actively in the resolution of this issue and to continue assessing alternate    
power sources for the two smelters.                                             

The outlook for this business unit in the first quarter of 2000 is very         
good.  Aluminum and alumina prices are rebounding and demand is strong.         

                                                                [Download Table]

PACKAGING AND CONSUMER                                                    
                                          1999        1998        1997    
                                       -----------------------------------
                                                                          
   Customer aluminum shipments             152         141         142    

   Revenues:                                                              
     Customer - aluminum                $  817      $  787      $  797    
              - nonaluminum                632         605         602    
                                       -----------------------------------
     Total                              $1,449      $1,392      $1,399    
                                       ===================================
   Operating income                     $  159      $  156      $  141    
                                       ===================================

The Packaging and Consumer global business unit consists principally of 17      
packaging and consumer products plants in the U.S., one each in Canada,         
Spain and Brazil, and 23 graphics facilities located in the U.S., Canada and    
Mexico that produce graphics, printing cylinders and plates.                    

Aluminum shipments and revenues increased in 1999 and 1998 because of strong    
demand for Reynolds Wrap aluminum foil and the introduction of new products.    
The volume effect on revenues in 1999 was partially offset by lower prices.     
In 1998, the gains from sales of Reynolds Wrap aluminum foil and new            
products were offset by lower sales of packaging products with the              
elimination of certain low-margin products.                                     

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25RESULTS OF OPERATIONS - continued                                               
---------------------                                                           
GLOBAL BUSINESS UNITS - continued                                               
Packaging and Consumer - continued                                              
The increase in nonaluminum sales in 1999 resulted from higher sales of         
foodservice, graphics and plastic consumer products.  The volume increase       
was partially offset by lower prices.                                           

Operating income increased in 1999 because of the higher sales volume and       
lower costs for conversion and aluminum raw materials.  These benefits          
were mostly offset by lower prices and higher costs for other raw               
materials.  Operating income increased in 1998 due to higher sales of           
consumer products, lower raw material costs and cost reduction programs.        
Higher product development and marketing costs for new consumer products        
introduced in 1998 partially offset these benefits.                             

Looking forward, this business unit expects to enjoy sales growth from          
acquisitions completed in 1999, the benefits of expansions at plastic and       
printing plants, and new product introductions.                                 

                                                                [Download Table]

CONSTRUCTION AND DISTRIBUTION                                        
                                       1999       1998       1997    
                                   ----------------------------------
                                                                     
   Customer aluminum shipments          202        184        166    

   Revenues:                                                         
     Customer - aluminum             $  679       $681       $614    
              - nonaluminum             346        314        328    
                                   ----------------------------------
     Total                           $1,025       $995       $942    
                                   ==================================
   Operating income                  $   42       $ 39       $ 41    
                                   ==================================

The Construction and Distribution global business unit consists                 
principally of 48 distribution centers in the U.S., Europe, Canada and          
Mexico and four manufacturing plants, two in the U.S. and two in Europe.        

The increase in aluminum shipments in 1999 and 1998 resulted from strong        
demand for distribution products.  All of our major distribution products       
(plate, sheet and extrusions) benefited from market share growth in our         
major domestic markets.  Construction products shipments were lower in          
1999 after growing in 1998.  Shipments in 1999 were adversely affected by       
weak market conditions in Germany, the China/Pacific Rim area and Latin         
America.  Shipments were higher in 1998 because of our global expansion         
efforts and strong demand for aluminum composite material.                      

The effect of the shipping volume increase on aluminum revenues in 1999         
was totally offset by lower prices.  The decline in prices reflected lower      
material costs.  The increase in aluminum revenues in 1998 was the result       
of the shipping volume increase while prices remained relatively flat.          

Shipments of stainless steel distribution products increased 17% in 1999        
(including the effect of acquisitions) and 8% in 1998.  The effect of           
these volume increases on nonaluminum revenues was offset by lower prices,      
especially in 1998.  Prices for these products, under pressure due to           
lower material costs resulting from global supply/demand imbalances, began      
to improve in late 1999.                                                        

Operating income in 1999 and 1998 benefited from the higher shipping            
volumes.  This was somewhat offset by lower capacity utilization in             
construction products plants resulting from weak business conditions in         
certain foreign markets.  In 1998, we incurred higher marketing costs to        
expand construction products' global sales and distribution infrastructure      
to enhance customer service.                                                    

Customers in our major distribution markets continue to experience a            
strong business climate, and our outlook for the first quarter of 2000 is       
strong.  For construction products, we expect to see improvement as             
economies around the world improve.  With the expansion of our Merxheim,        
France plant to produce aluminum composite material, we have improved our       
ability to meet European and global demand for Reynobond aluminum               
composite material from this plant and our U.S. plant.                          

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26RESULTS OF OPERATIONS - continued                                               
---------------------                                                           
GLOBAL BUSINESS UNITS - continued                                               
TRANSPORTATION                                                                  

                                                                [Download Table]

                                     1999      1998      1997    
                                 --------------------------------
                                                                 
Customer aluminum shipments            73        63        66    

Customer revenues                    $398      $336      $353    

Operating income (loss)               (28)      (19)       10    
                                 ================================

The Transportation global business unit consists principally of the             
following:                                                                      

. Aluminum wheels - Two plants in the U.S., one in Italy, and partial         
interests in plants in Canada (75% owned) and Venezuela (41% owned).        
. Automotive extrusions - Two plants in the U.S. and one each in The          
Netherlands, Germany, Ireland and Venezuela.                                

Shipments and revenues were higher in 1999 because of strong demand for         
cast and forged aluminum wheels.  Our available supply increased due to         
improved capacity utilization and the completion of the expansion of our        
Virginia forged aluminum wheel plant in early 1999.  The volume impact on       
revenues was partially offset by lower prices.                                  

Shipments and revenues in 1998 were negatively impacted by volume declines      
in bumpers and cast aluminum wheels.  The decline in bumper shipments resulted  
from the completion of a contract in 1997 at our Indiana automotive             
structures plant.  Cast aluminum wheel shipments were lower because of          
decreased demand related to a substantial number of mid-year wheel program      
conversions and a strike at a customer earlier in the year.  The lower          
shipments of cast aluminum wheels in 1998 were somewhat offset by higher        
shipments of forged aluminum wheels from our Virginia plant.  Revenues in       
1998 also declined due to lower prices for wheels because of competition        
for new business.                                                               

The increased losses in 1999 and 1998 were due to start-up costs relating       
to an engine cradle program at our Indiana automotive structures plant,         
higher conversion costs resulting from manufacturing difficulties in wheel      
operations and lower selling prices.                                            

Despite significant effort, this business unit was not able to return to        
profitability because of two major challenges.  The first was in the            
forged wheels business.  We built a new plant in Lebanon, Virginia that         
uses a new technology.  We have now constructed two lines at the plant.         
In 1999, the capability of the plant fell short of the projections on           
which sales commitments had been made.  In order to meet promised               
deliveries to customers - and in some instances to keep customer                
operations running - we incurred significantly higher costs.  This              
situation has been improving, and our wheel business overall realized           
important year-over-year improvement in 1999.  We expect the wheel              
business to become profitable in 2000.                                          

The second major challenge is in our structures operations.  Together with      
General Motors, we have pioneered a new aluminum automotive component -         
the engine cradle.  We underestimated the technological and operational         
requirements of producing this new product, and we have incurred                
significantly higher spending and resource allocation to meet promised          
deliveries.  This situation is also improving, and we expect better             
results in 2000.                                                                

Evaluating opportunities for strategic alliances in this business unit has      
been part of our plan for performance improvement.  During 1999, we looked      
at a number of options and progressed to serious discussions.  All of this      
activity, however, was suspended once our merger with Alcoa was announced.      

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27RESULTS OF OPERATIONS - continued                                               
---------------------                                                           
GLOBAL BUSINESS UNITS -  continued                                              
RESTRUCTURING                                                                   
No revenues or operating results are included in the Restructuring              
category in 1999.  Prior to 1999, this category consisted of the following      
operations that have been sold:                                                 

.    U.S. recycling operations                                                
.    aluminum extrusion facilities in Canada                                  
.    European rolling mill operations                                         
.    Illinois sheet and plate plant                                           
.    North American aluminum beverage can operations                          
.    Alabama can stock complex                                                
.    U.S. residential construction products business                          
.    aluminum reclamation plant in Virginia                                   
.    aluminum extrusion plants in Virginia and Texas                          
.    coal properties in Kentucky                                              
.    one-half of the Company's wholly owned interest in a rolling mill and    
related assets in Canada                                              
.    aluminum powder and paste plant in Kentucky                              

Customer revenues generated by these operations were $1.4 billion in 1998       
and $2.7 billion in 1997.  The decline in shipments and net sales in 1998       
and 1997 was due to the sale of these operations.  In 1998, the absence of      
operating income from sold operations was offset by the effect ($65             
million) of ceasing depreciation on assets held for sale.                       

For additional information concerning the Company's restructuring               
activities, see Notes 3 and 12 to the consolidated financial statements.        

OTHER                                                                           
This category consists principally of European extrusion operations and         
investments in Canada, China, Latin America and Saudi Arabia, and real          
estate.                                                                         

The increase in shipments and revenues in 1999 resulted from improved           
demand at European extrusion operations.                                        

Operating income was higher in 1999 because of improved operations in           
emerging markets and higher equity income in our Latin American can             
operations.  The increased operating loss in 1998 was due to lower equity       
income in our Latin American can operations.                                    

In early 2000, we sold our remaining investment in a Canadian rolling mill      
and related assets that was included in this category.  This transaction        
will not have a material impact on our operating results or financial           
position.                                                                       

GEOGRAPHIC AREA ANALYSIS                                                        
The Company has worldwide operations in the U.S., Canada and other foreign      
areas including Europe and Australia.  Certain of these consist of equity       
interests in entities, the revenues of which are not included in our            
consolidated revenues.  In Australia, we participate in an unincorporated       
joint venture that mines bauxite and produces alumina.                          

Revenues were negatively impacted in 1999 and 1998 due to lower primary         
aluminum prices and the Company's restructuring activities in 1998 and          
1997.  Revenues in Canada increased in 1999 as primary aluminum previously      
sold internally became available for customer shipments because we no           
longer need to supply downstream fabricating operations that have been          
sold.                                                                           

INTEREST EXPENSE                                                                
Interest expense decreased in 1999 because of:                                  

.    lower amounts of debt outstanding                                        
.    lower average interest rates due to extinguishing higher cost debt       
.    higher amounts of capitalized interest                                   

Interest expense decreased in 1998 because of lower amounts of debt             
outstanding.                                                                    

27              

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28RESULTS OF OPERATIONS - continued                                               
---------------------                                                           
TAXES ON INCOME                                                                 
The Company pays U.S. federal, state and foreign taxes based on the laws        
of the various jurisdictions in which it operates.  The effective tax           
rates (see reconciliation in Note 11 to the consolidated financial              
statements) reflected in the income statement differ from the U.S. federal      
statutory rate principally because of the following:                            

.    foreign taxes at different rates                                         
.    the effects of percentage depletion allowances                           
.    additionally in 1999 and 1998, credits and other tax benefits            
.    additionally in 1997, the adverse effect of permanent basis              
differences on asset dispositions                                     

We have worldwide operations in many tax jurisdictions that generate            
deferred tax assets and/or liabilities.  Deferred tax assets and                
liabilities have been netted by jurisdiction.  This results in both a           
deferred tax asset and a deferred tax liability on the balance sheet.           

At December 31, 1999, we had $822 million of deferred tax assets that           
relate primarily to U.S. tax positions.  The most significant portions of       
these assets relate to tax carryforward benefits and accrued costs for          
employee health care, environmental and restructuring costs.  We expect to      
realize a major portion of these assets in the future through the reversal      
of temporary differences, principally depreciation.  To the extent that         
these assets are not covered by reversals of depreciation, we expect the        
remainder to be realized through U.S. income earned in future periods.          

The Company has a strong history of sustainable earnings.  However, even        
without considering projections of income, certain tax planning strategies      
(such as changing the method of valuing inventories from LIFO to FIFO           
and/or entering into sale-leaseback transactions) would generate                
sufficient taxable income to realize the portion of the deferred tax asset      
relating to U.S. operations.  In addition, the majority of our U.S. tax         
carryforward benefits may be carried forward indefinitely.                      

Based on our evaluation of these matters, we expect to realize these            
deferred tax assets. We are not aware of any events or uncertainties that       
could significantly affect our conclusions regarding realization.  We           
reassess the realization of deferred tax assets quarterly and, if               
necessary, adjust the valuation allowance accordingly.                          

ENVIRONMENTAL                                                                   
The Company is involved in remedial investigations and actions at various       
locations, including Environmental Protection Agency-designated Superfund       
sites where we and, in most cases, others have been designated as               
potentially responsible parties (PRPs).  We accrue remediation costs when       
it becomes probable that such efforts will be required and the costs can        
be reasonably estimated.  We evaluate the status of all significant             
existing or potential environmental issues quarterly, develop or revise         
cost estimates to satisfy known remediation requirements, and adjust the        
accrual accordingly.  At December 31, 1999, the accrual was $162 million.       
The accrual reflects our best estimate of the ultimate liability for known      
remediation costs.                                                              

Amounts accrued for two sites - our Massena, New York and Troutdale,            
Oregon primary aluminum plants - represent individually material portions       
of the accrual at December 31, 1999.  For information about the current         
status of these two sites, see the discussion in Item 1 under                   
"Environmental Compliance."  At most of the other Superfund sites where         
the Company has been identified as a PRP, the Company is one of many PRPs,      
and our share of the anticipated cleanup costs is expected to be small.         

In estimating anticipated costs, we consider the extent of our involvement      
at each site, joint and several liability provisions under applicable law,      
and the likelihood of obtaining contribution from other PRPs.  Potential        
insurance recoveries are uncertain and therefore have not been considered.      
Based on information currently available, we expect to make remediation         
expenditures relating to costs currently accrued over the next 15 to 20         
years with the majority spent by the year 2005.  We expect cash provided by     
operating activities to provide the funds for environmental capital,            
operating and remediation expenditures.                                         

28      

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29RESULTS OF OPERATIONS - continued                                               
---------------------                                                           
ENVIRONMENTAL - continued                                                       
Annual capital expenditures for equipment designed for environmental            
control purposes averaged approximately $57 million over the past three         
years.  Ongoing environmental operating costs for the same period averaged      
approximately $81 million per year.  The Company expects operating              
expenditures for 2000 through 2002 to be approximately $80 million per          
year.  We estimate annual capital expenditures for environmental control        
facilities will be approximately $24 million in 2000, $30 million in 2001       
and $21 million in 2002.  The majority of these expenditures are for the        
capital spending program referred to below at our primary aluminum plant        
in Massena, New York.                                                           

Our spending on environmental compliance will be influenced by future           
environmental regulations, including those issued and to be issued under        
the Clean Air Act Amendments of 1990.  We are spending an estimated $175        
million at our primary aluminum plant in Massena, New York for new air          
emissions controls and a phased modernization of the plant's production         
lines.  We expect to complete this project in the year 2002.  We are            
accelerating certain expenditures believed necessary to achieve compliance      
with the Clean Air Act's proposed Maximum Achievable Control Technology         
standards.  Based on current information, we estimate that compliance with      
the Clean Air Act's hazardous air pollutant standards will require in           
excess of $200 million of capital expenditures (including a portion of the      
expenditures at the New York plant previously discussed), principally at        
our U.S. primary aluminum plants.                                               

For additional information concerning environmental expenditures, see Note      
13 to the consolidated financial statements.                                    

YEAR 2000 READINESS DISCLOSURE                                                  
In 1999, we completed a formal program to address and resolve potential         
exposure associated with information and non-information technology             
systems arising from the Year 2000 issue.   The Year 2000 issue results         
from computer programs and systems that rely on two digits rather than          
four to define the applicable year.  Such systems may treat a date using        
"00" as the year 1900 rather than the year 2000.  As a result, computer         
systems could fail to operate or make miscalculations, causing disruption       
of business operations.                                                         

Our goal was that none of our critical business operations or computer          
processes that are shared with suppliers and customers would be                 
substantially impaired by the advent of the year 2000.  We accomplished         
this goal and experienced no business interruptions as a result of Year         
2000 problems.  The minor Year 2000 problems encountered (e.g., incorrect       
invoice dates) were solved in a timely manner.  We do not anticipate the        
need for additional contingency planning.  However, we will continue            
monitoring for Year 2000 issues beyond those already addressed and              
anticipate that any additional problems will be resolved using resources        
normally available to the Company.                                              

The total cost of our Year 2000 remediation project was approximately $22       
million, which included labor, equipment and license costs.                     

EURO CONVERSION                                                                 
On January 1, 1999, 11 of the 15 member countries of the European Union         
established fixed conversion rates between their former sovereign               
currencies and a common currency, the euro.  The euro trades on currency        
exchanges and is available for non-cash transactions.  Between January 1,       
1999 and July 1, 2002, entities in the participating countries must             
convert all of their transactions denominated in the legacy currencies to       
the new euro currency.  We expect to have our systems ready in time to          
process euro denominated transactions.  We do not expect any material           
adverse effects from the euro conversion on our competitive or financial        
position or our ongoing results of operations.                                  

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30LIQUIDITY AND CAPITAL RESOURCES                                                 
-------------------------------                                                 
WORKING CAPITAL                                                                 

                                                                [Download Table]

                                                       December 31       
                                                -------------------------
                                                    1999          1998   
                                                -------------------------
                                                                         
Working capital                                     $137          $361   
Ratio of current assets to current liabilities     1.1/1         1.3/1   

The decline in working capital was due in part to the sale of $128 million      
of accounts receivable under a non-recourse facility.  We are able to           
operate with lower levels of working capital as a result of our                 
restructuring activities.                                                       

OPERATING ACTIVITIES                                                            

                                                                [Download Table]

                                             1999      1998      1997  
                                           ----------------------------
                                                                       
Net cash provided by operating activities    $406      $339      $363  

We used the net cash provided by operating activities for the past three        
years primarily to fund capital investments.                                    

INVESTING ACTIVITIES                                                            
The following table shows capital investments in the following categories:      
operational (replacement equipment, environmental control projects, etc.)       
and strategic (performance improvement, acquisitions and investments).          

                                                                [Download Table]

                                           1999      1998      1997           
                                        ------------------------------        
                                                                              
        Operational                        $116      $155      $152           
        Strategic                           410       186       120           
                                        ------------------------------        
        Total capital investments          $526      $341      $272           
                                        ==============================        

Major strategic projects that have been completed or that are under way       
include:                                                                      

 BASE MATERIALS                                                               
 In 1997, we began the expansion of the joint-venture Worsley Alumina         
 Refinery in Australia in which we hold a 56% interest.  The expansion        
 will increase the annual capacity of the facility by 65% to 3.1 million      
 metric tons.  Completion is expected in 2000.                                

 PACKAGING AND CONSUMER                                                       
 . expanded a U.S. plastic film plant (completed in 1997)                     
 . modernizing U.S. foil plants (to be completed in 2000)                     
 . acquired in 1999 four producers of flexographic separations and            
   plates for the packaging industry in the U.S. and one in Canada and a U.S. 
   manufacturer of microwaveable containers for the foodservice industry      

 CONSTRUCTION AND DISTRIBUTION                                                
 . expanded a plant in Europe that will produce composite architectural       
   products (substantially completed in 1999)                                 
 . acquired and opened new metals distribution centers in the U.S. and        
   Canada in 1999                                                             

 TRANSPORTATION                                                               
 . constructed (completed in 1997) and expanded (completed in 1999) a         
   forged wheel plant in Virginia                                             
 . expanded and modified a plant in Indiana that produces bumpers,            
   engine cradles and other automotive components (completed in 1999)         

                                  30                                          

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31LIQUIDITY AND CAPITAL RESOURCES - continued                                   
-------------------------------                                               
INVESTING ACTIVITIES - continued                                              
OTHER INVESTING ACTIVITIES                                                    
In addition to these major projects, capacity expansions, equipment           
upgrades, improvement programs and other capital expenditures have been       
completed or are currently under way at a number of other facilities.         

PROJECTED 2000                                                                
Capital investments planned for 2000 (approximately $265 million excluding    
acquisitions) are primarily for those strategic projects now under way and    
continuing operating requirements.  We expect to fund these capital           
investments with cash provided by operating activities.                       

FINANCING ACTIVITIES                                                          
We believe our available financial resources, together with internally        
generated funds, are sufficient to meet our present and future business       
needs.  We continue to exceed the financial ratio requirements contained      
in our financing arrangements and expect to do so in the future.  At          
December 31, 1999, $13 million of our shelf registration remained             
available for the issuance of debt securities.  We also have committed        
credit facilities of $835 million, of which $685 million was available at     
December 31, 1999.  A summary of significant financing activities over the    
past three years follows:                                                     

1997                                                                          
 . reduced debt by approximately $400 million with the proceeds from          
  sales of assets                                                             

1998                                                                          
 . reduced debt by approximately $900 million with part of the proceeds       
  from sales of assets (including repayment of $100 million borrowed under    
  credit facilities during 1998)                                              
 . repurchased common stock with part of the proceeds from sales of           
  assets (see the Consolidated Statement of Changes in Stockholders' Equity)  
 . borrowed $415 million under credit facilities                              
 . terminated a $100-million interest rate swap agreement                     

1999                                                                          
 . increased short-term borrowings by $313 million                            
 . increased available revolving credit facilities by $185 million (see       
  Note 8)                                                                     
 . issued $100 million of medium-term notes (see Note 8)                      
 . increased the authorization to issue commercial paper from $350            
  million to $500 million                                                     
 . repurchased common stock with part of the proceeds from sales of           
  assets (see the Consolidated Statement of Changes in Stockholders' Equity)  

We used the proceeds from the borrowings in 1999 to repay at maturity $100    
million of 9 3/8% debentures, to reduce borrowings under our revolving        
credit facilities and to make other scheduled debt payments.                  

In early 2000, we increased the amount of debt securities we can issue        
under our shelf registration to $163 million.                                 

                                     31                                       

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32RISK FACTORS                                                                  
------------                                                                  
This section should be read in conjunction with Items 1 and 3 of this         
report and with the preceding portions of this Item.                          

This report contains (and oral communications made by or on behalf of         
Reynolds may contain) forecasts, projections, estimates, statements of        
management's plans, objectives and strategies for Reynolds and other          
forward-looking statements<FN1>.  Reynolds' expectations for the future and   
related forward-looking statements are based on a number of assumptions       
and forecasts, including:                                                     

 .    world economic growth and other economic indicators (including rates    
     of inflation, industrial production, housing starts and light vehicle    
     sales)                                                                   
 .    trends in Reynolds' key markets                                         
 .    global aluminum supply and demand conditions                            
 .    primary aluminum prices                                                 

By their nature, forward-looking statements involve risk and uncertainty,     
and various factors could cause Reynolds' actual results to differ            
materially from those projected in a forward-looking statement or affect      
the extent to which a particular projection is realized.                      

The Company remains optimistic about the demand for aluminum for 2000.        
The continuing economic expansion in North America along with strong          
recoveries in both Western Europe and Asia (excluding Japan) has resulted     
in accelerating consumption growth, especially in the fourth quarter of       
1999.  Early estimates suggest that aluminum consumption grew by more than    
5% in 1999, exceeding our earlier forecasts.  We expect that consumption      
of aluminum will continue to grow at a rate of 4% to 6% per year for 2000     
and 2001.                                                                     

Economic and/or market conditions other than those forecasted by the          
Company in the preceding paragraph could cause the Company's actual           
results to differ materially from those projected in a forward-looking        
statement or affect the extent to which a particular projection is            
realized.                                                                     

The following factors also could affect Reynolds' results:                    

 . Primary aluminum is an internationally traded commodity.  The price        
  of primary aluminum is subject to worldwide market forces of supply and     
  demand and other influences.  Prices can be volatile.  Because primary      
  aluminum makes up a significant portion of Reynolds' shipments, changes in  
  aluminum pricing have a rapid effect on its operating results.  Reynolds'   
  use of contractual arrangements, including fixed-price sales contracts,     
  fixed-price supply contracts, and forward, futures and option contracts,    
  reduces its exposure to price volatility but does not eliminate it.         

 . The markets for most aluminum products are highly competitive.             
  Certain of Reynolds' competitors are larger than Reynolds in terms of       
  total assets and operations and have greater financial resources.  Certain  
  foreign governments are involved in the operation and/or ownership of       
  certain competitors and may be motivated by political as well as economic   
  considerations.  In addition, aluminum competes with other materials, such  
  as steel, plastics and glass, among others, for various applications in     
  Reynolds' key markets.  Plastic products compete with similar products      
  made by Reynolds' competitors, as well as with products made of glass,      
  aluminum, steel, paper, wood and ceramics, among others.  Unanticipated     
  actions or developments by or affecting Reynolds' competitors and/or the    
  willingness of customers to accept substitutions for the products sold by   
  Reynolds could affect results.                                              

________________________                                                      
<FN>                                                                          
<FN1>Forward-looking statements can be identified generally as those          
containing words such as "should," "will," "will likely result," "hope,"      
"forecast," "outlook," "project," "estimate," "expect," "anticipate,"         
"scheduled," or "plan" and words of similar effect.                           
</FN>                                                                         

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33RISK FACTORS - continued                                                      
------------                                                                  
 . As discussed in Part I, Item 1, Reynolds spends substantial capital        
  and operating amounts relating to ongoing compliance with environmental     
  laws.  In addition, Reynolds is involved in remedial investigations and     
  actions in connection with past disposal of wastes.  The identification of  
  additional material remediation sites in the future (that are presently     
  unknown) at which Reynolds may be named as a potentially responsible party  
  could have a material adverse effect on its results of operations in a      
  future interim or annual reporting period.  Moreover, estimating future     
  environmental compliance and remediation costs is imprecise due to:         

       - continuing evolution of environmental laws and regulatory            
          requirements and uncertainties about their application to Reynolds' 
          operations                                                          
       - availability and application of technology                           
       - allocation of costs among potentially responsible parties            

 . Reynolds has investments and activities in various emerging markets,       
  including China, India and Brazil.  While emerging markets offer strong     
  growth potential, they also present a higher degree of risk than more       
  developed markets.  In addition to the business risks inherent in           
  developing and servicing new markets, economic conditions may be more       
  volatile, legal systems less developed and predictable, and the             
  possibility of various types of adverse government action more pronounced.  

 . Unanticipated material legal proceedings or investigations, or the         
  disposition of those currently pending against Reynolds other than as       
  anticipated by management and counsel, could have a material adverse        
  effect on its results of operations for a particular reporting period.      

 . Changes in the costs or availability of supply of power, resins,           
  caustic soda, green coke and other raw materials can materially affect      
  results.  Substantial increases in power costs, particularly in the         
  Pacific Northwest, may adversely affect Reynolds' primary aluminum          
  production plants which require reliable, low-cost power.                   

 . Changes in laws and regulations, both U.S. and foreign, or their           
  interpretation and application, including changes in tax laws and their     
  interpretation and application, could affect Reynolds' results.             

 . A number of Reynolds' operations are cyclical and can be influenced        
  by economic conditions.                                                     

 . A failure to complete major capital projects, such as expansion of         
  the Worsley Alumina Refinery (by reason of construction delays or           
  disputes, labor unrest or otherwise), as scheduled and within budget or a   
  failure to successfully launch new growth or strategic business programs,   
  such as the engine cradle program where we are experiencing higher than     
  anticipated costs, could affect Reynolds' results.                          

 . A strike at a customer facility or a significant downturn in the           
  business of a key customer supplied by Reynolds could affect its results.   

The proposed merger with Alcoa Inc. is subject to certain conditions,         
including antitrust clearance.  As discussed under "Merger" in Part I,        
Item 1, on September 29, 1999, the Antitrust Division issued a request for    
additional information and documentary material (a "second request").         
On February 11, 2000, both Reynolds and Alcoa announced that they believed    
that they were in substantial compliance with the second request.  They       
also advised the Department of Justice that they would not close the merger   
before March 31, 2000, in order to provide the Department sufficient time     
to review the transaction.  In addition, the European Commission              
has until no later than May 10, 2000 to complete its investigation and to     
make a final determination with respect to the merger.  Reynolds and Alcoa    
have also made filings under the competition laws of Canada, Australia and    
certain other countries where the companies have significant operations.      
Reynolds and Alcoa have been advised that the Canadian Competition Bureau     
has classified this merger as "very complex."  Its review is expected to      
be completed by May 24, 2000.  The Australian review process is also          
expected to be completed by the end of May 2000.  It is possible that         
regulatory authorities may impose conditions on the combined operations       
or require divestitures as a condition to approving the merger.  While        
Reynolds is working promptly toward completion of the merger, no assurances   
can be given as to whether regulatory delays will be encountered or regulatory
conditions to the merger imposed, or the possible effects of such delays or   
conditions.                                                                   

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34RISK FACTORS - continued                                                      
------------                                                                  
In addition to the factors referred to above, Reynolds is exposed to          
general financial, political, economic and business risks in connection       
with its worldwide operations.  Reynolds continues to evaluate and manage     
its operations in a manner to mitigate the effects from exposure to such      
risks.  In general, Reynolds' expectations for the future are based on the    
assumption that conditions relating to costs, currency values, competition    
and the legal, regulatory, financial, political and business environments     
in the worldwide economies and markets in which Reynolds operates will not    
change significantly overall.                                                 

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35ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK          

Forward, futures, option and swap contracts are designated to manage          
market risks resulting from fluctuations in the aluminum, natural gas,        
foreign currency and debt markets.  Contracts used to manage risks in         
these markets are not material.                                               

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36ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                         

                                                                [Download Table]

CONSOLIDATED STATEMENT OF INCOME                                              
(millions, except per share amounts)                                          
==============================================================================
Years ended December 31                          1999       1998        1997  
------------------------------------------------------------------------------
                                                                              
REVENUES                                        $4,796     $5,859      $6,900 

COSTS AND EXPENSES                                                            
 Cost of products sold                           3,928      4,774       5,658 
 Selling, general and administrative expenses      361        378         406 
 Depreciation and amortization                     242        252         368 
 Interest                                           75        114         153 
 Merger-related expenses                            19          -           - 
 Operational restructuring effects - net             -        144          75 
------------------------------------------------------------------------------
                                                 4,625      5,662       6,660 
------------------------------------------------------------------------------

EARNINGS                                                                      
 Income before income taxes, extraordinary                                    
  loss and cumulative effect of accounting                                    
  change                                           171        197         240 
 Taxes on income                                    47         45         104 
------------------------------------------------------------------------------
 Income before extraordinary loss and                                         
  cumulative effect of accounting change           124        152         136 
 Extraordinary loss                                  -        (63)          - 
 Cumulative effect of accounting change              -        (23)          - 
------------------------------------------------------------------------------

NET INCOME                                      $  124     $   66      $  136 
==============================================================================

EARNINGS PER SHARE                                                            
 Basic:                                                                       
  Average shares outstanding                63,739,000  69,709,000  73,412,000
  Income before extraordinary loss and                                        
   cumulative effect of accounting change        $1.95      $2.18       $1.86 
  Extraordinary loss                                 -      (0.91)          - 
  Cumulative effect of accounting change             -      (0.33)          - 
------------------------------------------------------------------------------
  Net income                                     $1.95      $0.94       $1.86 
==============================================================================
 Diluted:                                                                     
  Average shares outstanding                64,043,000  69,937,000  74,004,000
  Income before extraordinary loss and                                        
   cumulative effect of accounting change        $1.94      $2.18       $1.84 
  Extraordinary loss                                 -      (0.91)          - 
  Cumulative effect of accounting change             -      (0.33)          - 
------------------------------------------------------------------------------
  Net income                                     $1.94      $0.94       $1.84 
==============================================================================

CASH DIVIDENDS PER COMMON SHARE                  $1.40      $1.40       $1.40 
==============================================================================

The accompanying notes to consolidated financial statements are an integral   
part of these statements.                                                     

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                                                                [Download Table]

CONSOLIDATED BALANCE SHEET                                                    
==============================================================================
December 31 (millions)                                       1999      1998   
------------------------------------------------------------------------------
                                                                              
ASSETS                                                                        
 Current assets:                                                              
   Cash and cash equivalents                               $   55    $   94   
   Receivables:                                                               
    Customers, less allowances of $10 (1998 - $14)            561       710   
    Other                                                      93       184   
------------------------------------------------------------------------------
      Total receivables                                       654       894   
   Inventories                                                519       500   
   Prepaid expenses and other                                  61       114   
------------------------------------------------------------------------------
      Total current assets                                  1,289     1,602   
 Unincorporated joint ventures and associated companies     1,692     1,478   
 Property, plant and equipment - net                        2,016     2,024   
 Deferred taxes                                               419       363   
 Other assets                                                 534       667   
------------------------------------------------------------------------------
Total assets                                               $5,950    $6,134   
==============================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY                                          
 Current liabilities:                                                         
   Trade payables                                          $  405    $  401   
   Accrued compensation and related amounts                   172       183   
   Payables to unincorporated joint ventures and                              
    associated companies                                       48        75   
   Commercial paper                                            75        82   
   Notes payable to banks                                     105        34   
   Long-term debt                                             153       196   
   Other liabilities                                          194       270   
------------------------------------------------------------------------------
      Total current liabilities                             1,152     1,241   
 Long-term debt                                             1,067     1,035   
 Postretirement benefits                                      962     1,029   
 Environmental                                                138       161   
 Deferred taxes                                               287       272   
 Other liabilities                                            198       202   
 Stockholders' equity:                                                        
   Common stock                                             1,575     1,533   
   Retained earnings                                        1,257     1,222   
   Treasury stock, at cost                                   (626)     (526)  
   Accumulated other comprehensive income                     (60)      (35)  
------------------------------------------------------------------------------
      Total stockholders' equity                            2,146     2,194   
 Contingent liabilities and commitments (Note 13)                             
------------------------------------------------------------------------------

Total liabilities and stockholders' equity                 $5,950    $6,134   
==============================================================================

The accompanying notes to consolidated financial statements are an integral   
part of these statements.                                                     

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CONSOLIDATED STATEMENT OF CASH FLOWS                                          
==============================================================================
Years ended December 31 (millions)         1999         1998         1997     
------------------------------------------------------------------------------
                                                                              
OPERATING ACTIVITIES                                                          
 Net income                               $ 124       $   66        $ 136     
 Adjustments to reconcile to net cash                                         
  provided by operating activities:                                           
    Depreciation and amortization           242          252          368     
    Merger-related expenses                  17            -            -     
    Operational restructuring effects         -          144           75     
    Extraordinary loss                        -           63            -     
    Cumulative effect of                                                      
     accounting change                        -           23            -     
    Other                                    16           (3)          28     
    Changes in operating assets                                               
     and liabilities net of                                                   
     effects from acquisitions                                                
     and dispositions:                                                        
      Accounts payable, accrued                                               
       and other liabilities                (18)        (106)         105     
      Receivables                           107          (53)        (194)    
      Inventories                            (5)          78         (108)    
      Environmental and restructuring                                         
       liabilities                          (43)         (52)         (48)    
      Other                                 (34)         (73)           1     
------------------------------------------------------------------------------
Net cash provided by operating                                                
 activities                                 406          339          363     

INVESTING ACTIVITIES                                                          
 Capital investments:                                                         
   Operational                             (116)        (155)        (152)    
   Strategic                               (410)        (186)        (120)    
 Sales of assets - operational                                                
  restructuring                             204        1,147          367     
 Other                                      (23)         (38)          (3)    
------------------------------------------------------------------------------
Net cash provided by (used in)                                                
 investing activities                      (345)         768           92     

FINANCING ACTIVITIES                                                          
 Proceeds from long-term debt               250          415            -     
 Reduction of long-term debt and                                              
  other financing liabilities              (515)        (929)        (245)    
 Increase (decrease) in short-term                                            
  borrowings                                313           47         (138)    
 Cash dividends paid                        (90)        (100)         (99)    
 Repurchase of common stock                (100)        (526)           -     
 Stock options exercised                     42           10           59     
------------------------------------------------------------------------------
Net cash used in financing activities      (100)      (1,083)        (423)    

CASH AND CASH EQUIVALENTS                                                     
 Net increase (decrease)                    (39)          24           32     
 At beginning of year                        94           70           38     
------------------------------------------------------------------------------

At end of year                            $  55       $   94        $  70     
==============================================================================

Supplemental disclosure of cash                                               
 flow information                                                             
 Cash paid during the year for:                                               
   Interest                               $ 101       $  134        $ 164     
   Income taxes                              40          117           21     
==============================================================================

The accompanying notes to consolidated financial statements are an integral   
part of these statements.                                                     

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CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY                  
===========================================================================
---------------------------------------------------------------------------
Years ended December 31                 1999       1998        1997        
---------------------------------------------------------------------------
                                                                           
SHARES (thousands)                                                         
 Common stock                                                              
   Balance at January 1                74,105      73,909     72,719       
   Shares issued under employee                                            
    benefit plans                         721         196      1,190       
---------------------------------------------------------------------------
   Balance at December 31              74,826      74,105     73,909       
---------------------------------------------------------------------------
 Treasury stock                                                            
   Balance at January 1                (9,648)          -          -       
   Purchased and held as                                                   
    treasury stock                     (1,696)     (9,648)         -       
---------------------------------------------------------------------------
   Balance at December 31             (11,344)     (9,648)         -       
---------------------------------------------------------------------------
 Net common shares outstanding         63,482      64,457     73,909       
===========================================================================
DOLLARS (millions)                                                         
 Common stock                                                              
   Balance at January 1                $1,533      $1,521     $1,451       
   Shares issued under                                                     
    employee benefit plans                 42          12         70       
---------------------------------------------------------------------------
   Balance at December 31              $1,575      $1,533     $1,521       
---------------------------------------------------------------------------
 Retained earnings                                                         
   Balance at January 1                $1,222      $1,253     $1,220       
   Net income                             124          66        136       
   Cash dividends declared:                                                
    Common stock                          (89)        (97)      (103)      
---------------------------------------------------------------------------
   Balance at December 31              $1,257      $1,222     $1,253       
---------------------------------------------------------------------------
 Treasury stock                                                            
   Balance at January 1                $ (526)     $    -     $    -       
   Purchased and held as                                                   
    treasury stock                       (100)       (526)         -       
---------------------------------------------------------------------------
   Balance at December 31              $ (626)     $ (526)    $    -       
---------------------------------------------------------------------------
 Accumulated other comprehensive                                           
  income (loss)                                                            
   Balance at January 1                $  (35)     $  (35)    $  (37)      

   Foreign currency translation                                            
    adjustments                           (27)          5          -       
    Income taxes                            2          (5)         2       
                                     --------------------------------------
   Other comprehensive income (loss)      (25)          -          2       
---------------------------------------------------------------------------
   Balance at December 31              $  (60)     $  (35)    $  (35)      
---------------------------------------------------------------------------
 Total stockholders' equity            $2,146      $2,194     $2,739       
===========================================================================
COMPREHENSIVE INCOME (millions)                                            
 Net income                            $  124      $   66     $  136       
 Other comprehensive income (loss)        (25)          -          2       
---------------------------------------------------------------------------
 Comprehensive income                  $   99      $   66     $  138       
===========================================================================

The accompanying notes to consolidated financial statements are an         
integral part of these statements.                                         

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40NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                      

(In the tables, dollars are in millions, except per share amounts.  Certain     
amounts have been reclassified to conform to the 1999 presentation.)            

----------------------------------------------------------------------------    

1.  ACCOUNTING POLICIES                                                         
GENERAL                                                                         
The consolidated financial statements are prepared in conformity with           
generally accepted accounting principles.  As a result, management makes        
estimates and assumptions that affect the following:                            

. reported amounts of revenues and expenses during the reporting period       
. reported amounts of assets and liabilities at the date of the financial     
statements                                                                  
. disclosure of contingent liabilities at the date of the financial           
statements                                                                  

Actual results could differ from those estimates.                               

PRINCIPLES OF CONSOLIDATION                                                     
The consolidated financial statements include the accounts of the Company       
and its majority-owned subsidiaries after eliminating inter-company             
transactions, profits and losses. The Company accounts for investments in       
unincorporated joint ventures on an investment cost basis adjusted for the      
Company's share of the non-cash production charges of the operation.            
Unincorporated joint ventures are production facilities without marketing or    
sales activities.  Products produced are distributed in kind and cash           
production costs are allocated to the joint venturers based upon their          
respective percentage interests in the facilities.  Our operating results       
include our share of cash production costs and non-cash production charges      
(principally depreciation) as well as revenues from the ultimate sale by us     
of our share of the products. Investments in associated companies (20% - 50%    
owned) are carried at cost adjusted for the Company's equity in                 
undistributed net income.                                                       

REVENUE RECOGNITION                                                             
Revenues are recognized when products are shipped and ownership risk and        
title pass to the customer.                                                     

INVENTORIES                                                                     
Inventories are stated at the lower of cost or market.  Inventory costs were    
determined by the last-in, first-out (LIFO); first-in, first-out (FIFO); and    
average-cost methods.  LIFO method inventories were $171 million at the end     
of 1999 (1998 - $178 million).  FIFO and average-cost method inventories        
were $348 million at the end of 1999 (1998 - $322 million).  Inventories        
would increase by $233 million at the end of 1999 (1998 - $221 million) if      
the FIFO method were applied to LIFO method inventories.                        

The favorable impact of the liquidation of certain LIFO layers that occurred    
as a result of the Company's divestitures ($184 million in 1998 and $58         
million in 1997) is included in "Operational restructuring effects - net" in    
the Consolidated Statement of Income.                                           

Since inventories are sold at various stages of processing, there is no         
practical distinction between finished products, in-process products and        
other materials.  Inventories are therefore presented as a single               
classification.                                                                 

DEPRECIATION AND AMORTIZATION                                                   
The straight-line method is used to depreciate plant and equipment over         
their estimated useful lives (buildings and leasehold improvements - 10 to      
40 years, machinery and equipment - 5 to 20 years).  Improvements to leased     
properties are generally amortized over the shorter of the terms of the         
respective leases or the estimated useful life of the improvement.              

ENVIRONMENTAL EXPENDITURES                                                      
Remediation costs are accrued when it is probable that such efforts will be     
required and the related costs can be reasonably estimated.                     

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411.  ACCOUNTING POLICIES - continued                                             
POSTEMPLOYMENT BENEFITS                                                         
The expected cost of postemployment benefits is accrued when it becomes         
probable that such benefits will be paid.                                       

HEDGING                                                                         
Forward, futures, option and swap contracts are designated to manage market     
risks resulting from fluctuations in the aluminum, natural gas, foreign         
currency and debt markets.  These instruments, which are not held for           
trading purposes, are effective in minimizing such risks by creating equal      
and offsetting exposures.  Unrealized gains and losses are deferred and         
recorded as a component of the underlying hedged transaction when it occurs.    
Realized gains or losses from matured and terminated hedge contracts are        
recorded in other assets or liabilities until the underlying hedged             
transactions are consummated.  Realized and unrealized gains or losses on       
hedge contracts relating to transactions that are subsequently not expected     
to occur are recognized in results currently.  None of these instruments        
contains multiplier or leverage features.  There is exposure to credit risk     
if the other parties to these instruments do not meet their obligations.        
Creditworthiness of the other parties is closely monitored, and they are        
expected to fulfill their obligations.  Contracts used to manage risks in       
these markets are not material.                                                 

CUMULATIVE EFFECT OF ACCOUNTING CHANGE                                          
In 1998, the Accounting Standards Executive Committee (AcSEC) of the            
American Institute of Certified Public Accountants issued Statement of          
Position (SOP) 98-5, "Reporting on the Costs of Start-Up Activities."  The      
SOP requires costs of start-up activities and organization costs to be          
expensed as incurred.  The Company adopted the SOP in 1998 and recognized an    
after-tax charge for the cumulative effect of accounting change of $23          
million.                                                                        

STATEMENT OF CASH FLOWS                                                         
In preparing the Consolidated Statement of Cash Flows, all highly liquid,       
short-term investments purchased with an original maturity of three months      
or less are considered to be cash equivalents.                                  

STOCK OPTIONS                                                                   
Stock options are accounted for using the intrinsic value method.               
Compensation expense is not recognized because the exercise price of the        
stock options equals the market price of the underlying stock on the date of    
grant.                                                                          

ACCOUNTING FOR THE COSTS OF DEVELOPING OR OBTAINING INTERNAL-USE SOFTWARE       
In 1999, the Company adopted the AcSEC's Statement of Position (SOP) 98-1,      
"Accounting for the Costs of Computer Software Developed or Obtained for        
Internal Use."  The SOP requires qualifying computer software costs incurred    
in connection with obtaining or developing software for internal use to be      
capitalized.  In prior years, the Company capitalized costs of purchased        
software and expensed internal costs of developing software.  The effect of     
adopting this SOP was not material to 1999 results.                             

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES                                   
In 1998, the FASB issued Statement No. 133, "Accounting for Derivative          
Instruments and Hedging Activities."  This statement establishes new            
accounting and reporting standards for derivative instruments and hedging       
activities.  The Company must adopt this statement by January 1, 2001.  The     
Company has not determined the impact this statement will have on its           
financial position or results of operations.                                    

2.  PROPOSED MERGER                                                             
On August 18, 1999, Reynolds, Alcoa Inc. (Alcoa) and RLM Acquisition Corp.,     
a wholly owned subsidiary of Alcoa, entered into an agreement and plan of       
merger.  Under the merger agreement, each outstanding share of Reynolds         
common stock would be converted into 1.06 shares of Alcoa common stock and      
Reynolds would become wholly owned by Alcoa.  On January 10, 2000, Alcoa        
announced that its Board of Directors had declared a two-for-one split of       
Alcoa's common stock to Alcoa shareholders of record on May 26, 2000.  The      
stock split is subject to approval of Alcoa shareholders who must approve an    
amendment to Alcoa's articles to increase the authorized shares of common       
stock at Alcoa's annual meeting on May 12, 2000.  If approved, the stock        
split would be distributed on June 9, 2000.  Shares of Alcoa stock that are     
issued in the merger will be adjusted, as necessary, to reflect the stock       
split.                                                                          

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422.  PROPOSED MERGER - continued                                                 
The proposed merger, which was approved by Reynolds' stockholders at a          
special meeting held on February 11, 2000, is subject to customary closing      
conditions, including antitrust clearances.                                     

The Hart-Scott-Rodino Antitrust Improvements Act of 1976 prohibits Alcoa and    
Reynolds from completing the merger until certain information has been          
furnished to the Antitrust Division of the Department of Justice and the        
Federal Trade Commission, and until certain waiting period requirements have    
been satisfied.  Alcoa filed a Hart-Scott-Rodino Premerger Notification and     
Report Form on August 24, 1999 and Reynolds filed such a Form on August 30,     
1999.  On September 29, 1999, the Antitrust Division issued a request for       
additional information and documentary material (a "second request").  On       
February 11, 2000, both Reynolds and Alcoa announced that they believed that    
they were in substantial compliance with the second request.  They also         
advised the Department of Justice that they would not close the merger          
before March 31, 2000, in order to provide the Department sufficient time to    
review the transaction.                                                         

In Europe, certain regulations require that Alcoa file a premerger              
notification form with the Commission of the European Communities prior to      
consummation of the proposed merger.  Alcoa filed such notification on          
November 18, 1999.  This filing began an initial one-month review period in     
which the European Commission was required to determine whether there are       
sufficiently "serious doubts" about the proposed merger's compatibility with    
the common market to require a more complete review.  The initial one-month     
period expired on December 20, 1999, whereupon the European Commission          
issued a determination that the proposed merger did require a more complete     
review.  The European Commission must complete its investigation and make a     
final determination with respect to the proposed merger no later than May       
10, 2000.                                                                       

Reynolds and Alcoa have also made filings under the competition laws of         
Canada, Australia and certain other countries where the companies have          
significant operations.  Alcoa and Reynolds have been advised that the          
Canadian Competition Bureau has classified this merger as "very complex."       
Its review is expected to be completed by May 24, 2000.  The Australian         
review process is also expected to be completed by the end of May 2000.         

The merger agreement contains certain restrictions on the conduct of            
Reynolds' business before completion of the merger.  For example, Reynolds      
has agreed to operate its business only in the ordinary course, to refrain      
from taking certain corporate actions without the consent of Alcoa, and not     
to solicit alternative acquisition proposals.                                   

In 1999, the Company recognized $19 million of merger-related expenses.         
Merger-related expenses are principally for investment banking and legal        
services and an increase in the expense accrual for a long-term compensation    
plan, which varies based principally on appreciation of the Company's stock     
price as compared to the S&P Basic Materials Index.  The Company expects        
total merger-related expenses to be at least $35 million.                       

3.  OPERATIONAL RESTRUCTURING                                                   
In the first quarter of 1999, the final closing of the sale of the Company's    
Alabama can stock complex occurred.  In 1998, the Company sold the following:   

.    U.S. recycling operations                                                
.    aluminum extrusion facilities in Canada                                  
.    European rolling mill operations                                         
.    Illinois sheet and plate plant                                           
.    North American aluminum beverage can operations                          
.    Alabama can stock complex (with final closing in early 1999)             

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433.  OPERATIONAL RESTRUCTURING - continued                                       
In 1997, the Company sold the following:                                        
.    U.S. residential construction products business                          
.    aluminum reclamation plant in Virginia                                   
.    aluminum extrusion plants in Virginia and Texas                          
.    coal properties in Kentucky                                              
.    one-half of its wholly owned interest in a rolling mill and related      
assets in Canada                                                      
.    aluminum powder and paste plant in Kentucky                              

Financial information for 1998 and 1997 relating to operations divested is      
reflected in the Restructuring category in Note 12.  Customer revenues          
generated by these operations were $1.4 billion in 1998 and $2.7 billion in     
1997.  Depreciation expense in 1998 was reduced $65 million as a result of      
ceasing depreciation on assets held for sale relating to the divestitures.      

The favorable impact of the liquidation of certain LIFO layers that occurred    
as a result of the Company's divestitures ($184 million in 1998 and $58         
million in 1997) is included in "Operational restructuring effects - net" in    
the Consolidated Statement of Income.                                           

The Company recognized the following operational restructuring charges:         

                                                                [Download Table]

                                            1998        1997   
                                         ----------------------
                                                               
Employee terminations                      $  39         $49   
Additional postretirement benefits           105           -   
Asset dispositions: Losses                   337          85   
                    (Gains)                 (349)        (64)  
Other                                         12           5   
                                         ----------------------
                                           $ 144         $75   
                                         ======================

The charges for employee terminations recorded in 1998 and 1997 were            
principally for severance and related costs for approximately 2,000 salaried    
and hourly employees.  The employees worked principally at domestic plants.     
Approximately 600 employees worked at corporate headquarters.  Employees        
terminated in each period were 1,385 in 1998 and 498 in 1997.                   

An analysis of the accrual for restructuring liabilities follows:               

                                                                [Download Table]

                                   1999        1998      1997  
                                 ------------------------------
                                                               
Balance at January 1               $ 48        $ 44      $ 12  
 Accruals                             -          44        54  
 Payments                           (33)        (40)      (22) 
                                 ------------------------------
Balance at December 31             $ 15        $ 48      $ 44  
                                 ==============================

Liabilities at December 31, 1999 relating to the Company's restructuring        
activities are expected to be substantially satisfied in 2000 with cash         
provided by operating activities.  Liabilities relating to contractual          
postretirement obligations are reflected in postretirement benefits on the      
balance sheet and will be settled over numerous future years in conjunction     
with the Company's funding of its pension and other postretirement benefit      
obligations.                                                                    

The Company used proceeds from completed divestitures for debt repayments       
and repurchases of common stock (see Notes 4 and 9).                            

Early in the first quarter of 2000, the Company sold its investment in a        
Canadian rolling mill and related assets.  This transaction will not have a     
material impact on our operating results or financial position.                 

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444.  EXTRAORDINARY LOSS                                                          
The Company had an extraordinary loss from debt extinguishments in 1998 of      
$63 million (net of income tax benefit of $39 million).  The debt               
extinguished at a loss consisted of $500 million of medium-term notes and       
$79 million of 9% debentures.                                                   

5.  EARNINGS PER SHARE                                                          
The following reconciles income and average shares for the basic and diluted    
earnings per share computations for "Income before extraordinary loss and       
cumulative effect of accounting change."                                        

                                                                [Download Table]

                                      1999          1998          1997       
                                ---------------------------------------------
                                                                             
Income (numerator):                                                          
 Income before extraordinary                                                 
  loss and cumulative effect                                                 
  of accounting change                   $124          $152          $136    

Average shares (denominator):                                                
 Basic                             63,739,000    69,709,000    73,412,000    
 Effect of dilutive securities        304,000       228,000       592,000    
                                ---------------------------------------------
 Diluted                           64,043,000    69,937,000    74,004,000    
                                =============================================

Per share amounts for income                                                 
 before extraordinary loss                                                   
 and cumulative effect of                                                    
 accounting change:                                                          
  Basic earnings per share              $1.95        $2.18          $1.86    
  Diluted earnings per share             1.94         2.18           1.84    
Antidilutive securities excluded:                                            
 Stock options                      1,899,000    2,452,000        505,000    

6.   UNINCORPORATED JOINT VENTURES AND ASSOCIATED COMPANIES                     
The Company has interests in unincorporated joint ventures which produce        
alumina and primary aluminum.  It also has interests in foreign-based           
associated companies which produce bauxite, alumina, primary aluminum,          
hydroelectric power and fabricated aluminum products.  At December 31, the      
Company's investment in these activities consisted of the following:            

                                                                [Download Table]

                                                    1999        1998   
                                                 ----------------------
                                                                       
Unincorporated joint ventures                                          
 Current assets                                   $   50      $   52   
 Current liabilities                                 (56)        (89)  
 Property, plant and equipment and other assets    1,402       1,203   
                                                 ----------------------
    Net investment                                 1,396       1,166   
                                                 ----------------------
Associated companies                                                   
 Investments                                         236         253   
 Advances                                             60          59   
                                                 ----------------------
    Net investment                                   296         312   
                                                 ----------------------
Total                                             $1,692      $1,478   
                                                 ======================

Property, plant and equipment and other assets for the unincorporated joint     
ventures in 1999 includes $359 million (1998 - $150 million) of construction    
in progress for the expansion of the Worsley Alumina Refinery joint venture.    

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457.  PROPERTY, PLANT AND EQUIPMENT (AT COST)                                     

                                                                [Download Table]

                                                        December 31    
                                                   --------------------
                                                      1999     1998    
                                                   --------------------
                                                                       
Land, land improvements and mineral properties       $  252   $  244   
Buildings and leasehold improvements                    803      781   
Machinery and equipment                               3,148    3,087   
Construction in progress                                133      170   
                                                   --------------------
                                                      4,336    4,282   
Less allowances for depreciation and amortization     2,320    2,258   
                                                   --------------------
Net property, plant and equipment                    $2,016   $2,024   
                                                   ====================

8.  FINANCING ARRANGEMENTS                                                      

                                                                [Download Table]

                                             December 31    
                                         -------------------
                                           1999      1998   
                                         -------------------
                                                            
Public debt securities:                                     
  Medium-term notes                       $  418    $  329  
  9-3/8% debentures due 1999                   -       100  
  9% debentures due 2003                      21        21  
  6-5/8% amortizing notes                    171       228  
  Industrial and environmental                              
   control revenue bonds                     201       227  
  Commercial paper                           250         -  
Other arrangements:                                         
  Long-term credit facilities                150       315  
  Mortgages and other notes payable            9        11  
                                         -------------------
                                           1,220     1,231  
Amounts due within one year                  153       196  
                                         -------------------
Long-term debt                            $1,067    $1,035  
                                         ===================

Long-term debt at December 31, 1999 matures as follows:                         

2000                 $153             
2001                  569             
2002                   70             
2003                   58             
2004                   35             
2005 - 2025           335             

The medium-term notes and 9% debentures were issued under a shelf               
registration.  The medium-term notes bear interest at an average fixed rate     
of 8.5% and have maturities ranging from 2000 to 2013.  At December 31,         
1999, $13 million of debt securities remained unissued under the shelf          
registration.  In early 2000, the Company increased the amount of debt          
securities it can issue under the shelf registration to $163 million.  A        
portion of this fixed-rate debt has been effectively converted to a variable    
rate through the use of a $100-million interest rate swap that matures in       
2001.  Under the swap, payments are received based on a fixed rate (6%) and     
made based on a variable rate (5.9% at December 31, 1999).  The variable        
rate is based on the London Interbank Offer Rate (LIBOR).  The differential     
to be paid or received as interest rates change is accrued and recognized as    
an adjustment of interest expense.  The fair value of this agreement and its    
effect on interest expense was not material.                                    

The 6-5/8% amortizing notes were issued at a discount (99.48%) and have an      
effective interest rate of 6.7%.  The notes require annual principal            
repayments of $57 million between 2000 and 2002.                                

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468.  FINANCING ARRANGEMENTS - continued                                          
Industrial and environmental control revenue bonds consist principally of       
variable-rate debt with interest rates averaging 4.8% at December 31, 1999.     
The variable rates are based on market interest rates.  These bonds require     
principal repayments in lump sums periodically between 2000 and 2025.           
Letters of credit issued by banks support most of these bonds.                  

The Company has classified $250 million of commercial paper as long-term        
debt because the Company intends to refinance the debt on a long-term basis     
and the commercial paper is supported by a $500 million long-term credit        
facility.  The Company also has a $150 million long-term credit facility.       
These long-term credit facilities have variable interest rates (6.4% at         
December 31, 1999) and mature in 2001.  The variable rates are based on         
LIBOR.  The Company pays an annual commitment fee of .1% on the unused          
portion of these facilities.  In addition to the long-term credit               
facilities, the Company has a short-term credit facility of $185 million        
that was unutilized and available at December 31, 1999.  This credit            
facility has a variable interest rate that is based on LIBOR.  The Company      
pays an annual commitment fee of .125% on the unused portion.                   

Certain financing arrangements contain restrictions that primarily consist      
of requirements to maintain specified financial ratios.  These restrictions     
do not inhibit operations or the use of fixed assets.  At December 31, 1999,    
the Company exceeded all such requirements.                                     

The fair value of long-term debt was approximately equal to book value at       
the end of 1999 and 1998.  The fair value was determined by using discounted    
cash flow analysis.                                                             

Interest capitalized was $24 million during 1999 (1998 - $12 million, 1997 -    
$8 million).                                                                    

Interest rates on short-term borrowings are based on market rates.  The         
weighted-average interest rates were:                                           

                                                                [Download Table]

                               December 31     
                         ----------------------
                           1999          1998  
                         ----------------------
                                               
Notes payable to banks     6.5%          4.2%  

Commercial paper           6.5           5.9   

9.  STOCKHOLDERS' EQUITY                                                        
PREFERRED STOCK                                                                 
The Company has 21,000,000 shares of preferred stock authorized.  Two million   
shares have been designated Series A Junior Participating Preferred.            

COMMON STOCK                                                                    
The Company has 200,000,000 shares of common stock (without par value)          
authorized.                                                                     

The Company has authorization to repurchase up to 18 million shares of common   
stock of which approximately 11.3 million shares have been repurchased through  
December 31, 1999.  (See the Consolidated Statement of Changes in Stockholders' 
Equity for additional share repurchase information.)  Under the merger          
agreement with Alcoa, the Company has agreed to refrain from purchasing         
additional shares without the consent of Alcoa.  (See Note 2.)                  

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479.  STOCKHOLDERS' EQUITY - continued                                            
STOCK OPTIONS                                                                   
The Company has a non-qualified stock option plan under which key employees     
may be granted stock options at a price equal to the fair market value at       
the date of grant.  The stock options outstanding at December 31, 1999 vest     
in one year and are exercisable between one year and ten years from the         
date of grant.  Upon a change in control of the Company, all outstanding        
options would become immediately exercisable.  The range of exercise prices     
for the stock options outstanding at December 31, 1999 was $45 to $64 and       
their weighted-average remaining contractual life was 6 years.  A summary       
of stock option activity and related information follows (options are in        
thousands):                                                                     

                                                                [Download Table]

                                  1999           1998           1997   
                               ----------------------------------------
                                                                       
Outstanding at January 1         5,254          4,828          5,318   
Granted                            713            633            711   
Exercised                         (721)          (192)        (1,190)  
Expired/canceled                  (444)           (15)           (11)  
                               ----------------------------------------
Outstanding at December 31       4,802          5,254          4,828   
Exercisable at December 31       4,092          4,621          4,121   
Available for grant              2,007            304            923   

Weighted-average prices:                                               
 Outstanding at January 1          $56            $55            $52   
 Granted                            61             62             64   
 Exercised                          54             47             50   
 Expired/canceled                   60             62             56   
 Outstanding at December 31         57             56             55   
 Exercisable at December 31         56             55             53   

In addition to the above, 150,000 performance-based stock options expired in    
1999.                                                                           

Pro forma net income and earnings per share have been prepared based on         
expensing (after tax) the estimated fair value of stock options granted         
during 1999, 1998 and 1997.  The estimated fair value of the stock options      
was determined by using the Black-Scholes option-pricing model.  The            
estimated fair values and the weighted-average assumptions used to estimate     
those values follow:                                                            

                                                                [Download Table]

                                                Stock Options          
                                    -----------------------------------
                                        1999        1998        1997   
                                    -----------------------------------
                                                                       
Risk-free interest rate                 5.6%        5.5%        6.4%   
Dividend yield                          2.1%        2.2%        2.2%   
Volatility factor of the expected                                      
 market price of the Company's                                         
 common stock                           .270        .256        .265   
Expected life of the option            6 years     6 years     6 years 
Estimated fair value of each stock                                     
 option granted                        $18.04      $17.53      $19.53  

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489.  STOCKHOLDERS' EQUITY - continued                                            
STOCK OPTIONS - continued                                                       
The Black-Scholes option-pricing model was not developed for use in valuing     
employee stock options.  This model was developed for use in estimating the     
fair value of traded options that have no vesting restrictions and are          
fully transferable.  In addition, it requires the input of highly               
subjective assumptions including expectations of future dividends and stock     
price volatility.  The assumptions are only used for making the required        
fair value estimate and should not be considered as indicators of future        
dividend policy or stock price appreciation.  Because changes in the            
subjective input assumptions can materially affect the fair value estimate      
and because the employee stock options have characteristics significantly       
different from those of traded options, the use of the Black-Scholes option-    
pricing model may not provide a reliable single measure of the employee         
stock options' value.                                                           

The pro forma information follows:                                              

                                                                [Download Table]

                                        1999     1998     1997 
                                      -------------------------
                                                               
Pro forma net income                   $ 117    $  59    $ 127 
Pro forma earnings per share: Basic     1.83     0.84     1.73 
                              Diluted   1.82     0.84     1.72 

SHAREHOLDER RIGHTS PLAN                                                         
Under the shareholder rights plan each share of common stock has one right      
attached and the rights trade with the common stock.  The rights are            
exercisable only if a person or group buys 15% or more of the Company's         
common stock, or announces a tender offer for 15% or more of the                
outstanding common stock.  Each right will entitle a holder to buy one-         
hundredth of a share of the Company's Series A Junior Participating             
Preferred Stock at an exercise price of $300.                                   

If a person or group acquires 15% or more of the common stock of the            
Company, each right would permit its holder to buy common stock of the          
Company having a market value equal to two times the exercise price of the      
right.  In addition, if at any time after the rights become exercisable, the    
Company is acquired in a merger, or if there is a sale or transfer of 50%       
or more of its assets or earning power, each right would permit its holder      
to buy common stock of the acquiring company having a market value equal to     
two times the exercise price of the right.                                      

The rights, which do not have voting privileges, expire in 2007.  The Board     
of Directors may redeem the rights before expiration, under certain             
circumstances, for $0.01 per right.  Until the rights become exercisable,       
they have no effect on earnings per share.                                      

These rights should not interfere with a business combination approved by       
the Board of Directors.  However, they will cause substantial dilution to a     
person or group that attempts to acquire the Company without conditioning       
the offer on redemption of the rights or acquiring a substantial number of      
the rights.                                                                     

In connection with the merger agreement with Alcoa (see Note 2), the            
Company amended the shareholder rights plan to render the plan inapplicable     
to this transaction.                                                            

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4910.  PENSIONS AND OTHER POSTRETIREMENT BENEFITS                                 

                                                                [Download Table]

                                  Pension Benefits          Other Benefits    
                                --------------------    ----------------------
                                 1999         1998         1999        1998   
                                --------------------    ----------------------
                                                                              
CHANGE IN BENEFIT OBLIGATION                                                  
Benefit obligation at                                                         
 beginning of year              $2,349       $2,081       $  964     $   899  
Service cost                        31           36            6           7  
Interest cost                      162          151           62          62  
Amendments                           1            9            1           -  
Actuarial losses (gains)           (87)         166          (70)         60  
Restructuring                        -           39            -           5  
Benefits paid                     (161)        (133)         (79)        (69) 
                                --------------------    ----------------------
Benefit obligation at                                                         
 end of year                    $2,295       $2,349       $  884     $   964  
                                --------------------    ----------------------

CHANGE IN PLAN ASSETS                                                         
Fair value of plan assets                                                     
 at beginning of year           $2,277       $2,099       $    -     $     -  
Actual return on plan assets       383          295            -           -  
Company contributions               46           43           79          69  
Restructuring                        -          (27)           -           -  
Benefits paid                     (161)        (133)         (79)        (69) 
                                --------------------    ----------------------
Fair value of plan assets                                                     
 at end of year                 $2,545       $2,277       $    -     $     -  
                                --------------------    ----------------------

Funded status of the plans      $  250       $  (72)      $ (884)    $  (964) 
Unrecognized net actuarial                                                    
 loss (gain)                      (222)         101          (42)         27  
Unrecognized prior service cost     59           66          (56)        (67) 
                                --------------------    ----------------------
Prepaid (accrued) benefit cost  $   87       $   95       $ (982)    $(1,004) 
                                ====================    ======================

AMOUNTS RECOGNIZED IN THE                                                     
 CONSOLIDATED BALANCE SHEET                                                   
Prepaid benefit cost            $  111       $  111       $    -     $     -  
Accrued benefit liability          (37)         (68)        (982)     (1,004) 
Intangible asset                    13           52            -           -  
                                --------------------    ----------------------
Net amount recognized           $   87       $   95       $ (982)    $(1,004) 
                                ====================    ======================

WEIGHTED-AVERAGE ASSUMPTIONS                                                  
 AS OF DECEMBER 31                                                            
Discount rate                     7.50%        6.75%        7.50%       6.75% 
Expected return on plan assets    9.25         9.25            -           -  
Rate of compensation increase     4.50         4.50            -           -  

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5010.  PENSIONS AND OTHER POSTRETIREMENT BENEFITS - continued                     
For measurement purposes, a 5.5% annual rate of increase in the per capita      
cost of covered health care benefits was assumed for 2000.  The rate was        
assumed to decrease gradually to 5.0% in 2002 and remain at that level          
thereafter.                                                                     

                                                                [Download Table]

                         Pension Benefits            Other Benefits    
                      ----------------------    -----------------------
                       1999    1998    1997      1999    1998    1997  
                      ----------------------    -----------------------

                                                                       
COMPONENTS OF                                                          
 NET PERIODIC                                                          
 BENEFIT COST                                                          
Service cost           $ 31    $ 36    $ 37      $  6     $ 7    $  7  
Interest cost           162     151     147        62      62      64  
Expected return                                                        
 on plan assets        (189)   (175)   (158)        -       -       -  
Amortization of                                                        
 prior service cost      11      14      19       (10)    (13)    (17) 
Recognized net                                                         
 actuarial loss (gain)   16      13      11         -       -      (1) 
                      ----------------------    -----------------------
Benefit cost           $ 31    $ 39    $ 56       $58     $56    $ 53  
                      ======================    =======================

The assumed health care cost trend rate has a significant effect on the         
amounts reported.  A one-percentage-point change in the assumed health care     
cost trend rate would have the following effects:                               

                                                                [Download Table]

                                    1%           1%    
                                 Increase     Decrease 
                                ----------   ----------
                                                       
Effect on total of service                             
 and interest cost                                     
 components in 1999                $  3        $ (3)   
Effect on postretirement                               
 benefit obligation                                    
 as of December 31, 1999           $ 39        $(35)   

11.  TAXES ON INCOME                                                            
The significant components of the provision for income taxes were:              

                                                                [Download Table]

                     1999      1998       1997   
                  -------------------------------
                                                 
Current:                                         
 Federal             $  7      $  6       $ 13   
 Foreign               41        57         71   
 State                  1         1          1   
                  -------------------------------
 Total current         49        64         85   
                  -------------------------------

Deferred:                                        
 Federal                8       (31)        (7)  
 Foreign                5        23         21   
 State                (14)      (12)        (2)  
                  -------------------------------
 Total deferred        (1)      (20)        12   
                  -------------------------------
Equity income          (1)        1          7   
                  -------------------------------
Total                 $47       $45       $104   
                  ===============================

The deferred tax provision includes domestic carryforward                       
benefits of $11 million (1998 - $8 million, 1997 - $2 million).                 

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5111.  TAXES ON INCOME - continued                                                
The effective income tax rate varied from the U.S. statutory rate as            
follows:                                                                        

                                                                [Download Table]

                             1999    1998    1997  
                           ------------------------
                                                   
U.S. rate                     35%     35%     35%  
Income taxed at other                              
 than the U.S. rate            1      (4)      9   
Percentage depletion          (2)     (3)     (2)  
Credits and other tax                              
 benefits                     (5)     (6)      -   
State income taxes                                 
 and other                    (1)      1       1   
                           ------------------------
Effective rate                28%     23%     43%  
                           ========================

Income taxed at other than the U.S. rate includes a 10% adverse effect in       
1997 from basis differences on asset dispositions.                              

Deferred income taxes reflect the net tax effects of temporary differences      
between the carrying amounts of assets and liabilities for financial            
reporting purposes and the amounts used for income tax purposes.  At            
December 31, 1999, the Company had $822 million (1998 - $844 million) of        
deferred tax assets and $675 million (1998 - $694 million) of deferred tax      
liabilities that have been netted with respect to tax jurisdictions for         
presentation purposes.  The significant components of these amounts were:       

                                                                [Download Table]

                                    1999                    1998          
                             ---------------------------------------------
                               Asset   Liability       Asset   Liability  
                             ---------------------------------------------
                                                                          
Retiree health benefits         374      $  -           $381     $  -     
Tax carryforward benefits       170         -            141        -     
Environmental and                                                         
 restructuring costs             86        (2)           116       (2)    
Other                            60        95             39       78     
Tax over book depreciation     (236)      194           (235)     196     
Valuation reserve relating                                                
 to tax carryforward benefits   (20)        -            (20)       -     
                             ---------------------------------------------
Total deferred tax assets                                                 
 and liabilities                434       287            422      272     
Amount included as current                                                
 in balance sheet                15         -             59        -     
                             ---------------------------------------------
Noncurrent deferred tax                                                   
 assets and liabilities        $419      $287           $363     $272     
                             =============================================

The tax carryforward benefits can be carried forward indefinitely except for    
$68 million that will expire primarily between 2004 and 2014.  A valuation      
reserve of $20 million relating to certain of these benefits has been           
recorded. Alternatives continue to be evaluated that may result in the          
ultimate realization of a portion of these reserved assets.                     

Income taxes have not been provided on the undistributed earnings ($904         
million) of foreign subsidiaries. The Company uses these earnings to finance    
foreign expansion, reduce foreign debt or support foreign operating             
requirements.                                                                   

The geographic components of income (loss) before income taxes,                 
extraordinary loss and the cumulative effect of accounting change was as        
follows:                                                                        

                                                                [Download Table]

               1999         1998          1997   
             ------------------------------------
                                                 
Domestic       $(67)        $(86)         $ 21   
Foreign         238          283           219   
             ------------------------------------
               $171         $197          $240   
             ====================================


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5212.  COMPANY OPERATIONS                                                         
The Company is organized into four market-based, global business units.  The    
global business units and their principal products are:                         

. Base Materials - alumina, carbon products, primary aluminum ingot and       
billet, and electrical rod                                                  
. Packaging and Consumer - aluminum and plastic packaging, foodservice        
and consumer products; printing products                                    
. Construction and Distribution - architectural construction products and     
the distribution of a wide variety of aluminum and stainless steel products 
. Transportation - aluminum wheels, heat exchangers and automotive            
structures                                                                  

The Restructuring category includes operations sold.  (See Note 3 for a         
discussion of the Company's restructuring activities.)                          

The Other category consists principally of European extrusion operations,       
investments in Canada, China, Latin America and Saudi Arabia and real           
estate.  Part of the real estate, principally undeveloped land, is held for     
sale and is expected to be sold over the next few years.  The carrying          
amount for these held-for-sale assets was $36 million at December 31, 1999.     
Expenses relating to holding these assets, principally real estate taxes,       
were approximately $1 million per year in each of the last three years.         

ACCOUNTING POLICIES                                                             
Operating income for each global business unit is calculated as revenues        
plus equity income less cost of products sold, depreciation and the unit's      
selling, general and administrative expenses.  The sales between units are      
made at market-related prices.  Cost of products sold reflects current          
costs.                                                                          

Assets for each global business unit include:                                   

.    receivables (including internal receivables from other units)            
.    inventories (based on the FIFO method)                                   
.    property, plant and equipment (excluding construction in progress)       
.    investments in unincorporated joint ventures and associated companies    
.    other assets directly associated with the unit's operations              

Current liabilities for each global business unit include:                      

.    trade payables                                                           
.    accrued compensation and related amounts                                 
.    other current liabilities                                                
.    internal liabilities from other units                                    

For the geographic presentation, revenues are attributed to specific            
countries based on the location of the operation generating the revenue.        
Long-lived assets consist of all noncurrent assets such as property, plant      
and equipment and investments in joint ventures and associated companies.       

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5312.  COMPANY OPERATIONS - continued                                             
Certain amounts for the years 1998 and 1997 have been reclassified to           
conform to the 1999 presentation.  The principal reclassification was to        
move corporate amounts from the Other category to Reconciling Items.            

                                                                [Download Table]

                                                     Packaging   Construction 
                                             Base       and         and       
1999                                      Materials   Consumer   Distribution 
==============================================================================
                                                                              
Customer aluminum shipments                   867        152         202      
Intersegment aluminum shipments               211          -           -      
------------------------------------------------------------------------------
Total aluminum shipments                    1,078        152         202      
==============================================================================

Revenues:                                                                     
 Aluminum                                  $1,325     $  817      $  679      
 Nonaluminum                                  368        632         346      
Intersegment revenues - aluminum              306          -           -      
------------------------------------------------------------------------------
Total revenues                             $1,999     $1,449      $1,025      
==============================================================================

Segment operating income (loss)            $  250     $  159      $   42      
Inventory accounting adjustments                                              
Corporate amounts                                                             
Operational restructuring effects - net                                       
Merger-related expenses                                                       
------------------------------------------------------------------------------
Corporate operating income                                                    

Interest expense                                                              
Taxes on income                                                               
Extraordinary loss                                                            
Cumulative effect of accounting change                                        
------------------------------------------------------------------------------

Net income                                                                    
==============================================================================
Pre-tax equity income (loss) included                                         
 in revenues                               $    -     $    -      $    -      
Depreciation and amortization                 146         45           8      

Assets                                     $3,085     $  665      $  463      
Current liabilities (excluding debt)          276        137         126      
------------------------------------------------------------------------------
Net operating investment                   $2,809     $  528      $  337      
==============================================================================
Unincorporated joint ventures and                                             
 associated companies                      $1,516     $    -      $    -      
Capital investments                           309         84          84      
==============================================================================

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                                                                [Download Table]

1999                                 Transportation  Restructuring  Other     
==============================================================================
                                                                              
Customer aluminum shipments                    73          -          59      
Intersegment aluminum shipments                 -          -           -      
------------------------------------------------------------------------------
Total aluminum shipments                       73          -          59      
==============================================================================

Revenues:                                                                     
 Aluminum                                    $398     $    -        $145      
 Nonaluminum                                    -          -          42      
Intersegment revenues - aluminum                -          -           -      
------------------------------------------------------------------------------
Total revenues                               $398     $    -        $187      
==============================================================================

Segment operating income (loss)              $(28)    $    -        $  5      
Inventory accounting adjustments                                              
Corporate amounts                                                             
Operational restructuring effects - net                                       
Merger-related expenses                                                       
------------------------------------------------------------------------------
Corporate operating income                                                    

Interest expense                                                              
Taxes on income                                                               
Extraordinary loss                                                            
Cumulative effect of accounting change                                        
------------------------------------------------------------------------------

Net income                                                                    
==============================================================================
Pre-tax equity income (loss) included                                         
 in revenues                                 $  -     $    -        $(14)     
Depreciation and amortization                  29          -           7      

Assets                                       $377     $    -        $395      
Current liabilities (excluding debt)           60          -          12      
------------------------------------------------------------------------------
Net operating investment                     $317     $    -        $383      
==============================================================================
Unincorporated joint ventures and                                             
 associated companies                        $  8     $    -        $168      
Capital investments                            26          -           2      
==============================================================================

                                                                [Download Table]


                                          Total   Reconciling                 
1999                                    Segments     Items     Consolidated   
==============================================================================
                                                                              
Customer aluminum shipments                 1,353         -        1,353      
Intersegment aluminum shipments               211      (211)           -      
------------------------------------------------------------------------------
Total aluminum shipments                    1,564      (211)       1,353      
==============================================================================

Revenues:                                                                     
 Aluminum                                  $3,364    $    -       $3,364      
 Nonaluminum                                1,388        44        1,432      
Intersegment revenues - aluminum              306      (306)           -      
------------------------------------------------------------------------------
Total revenues                             $5,058    $ (262)      $4,796      
==============================================================================

Segment operating income (loss)            $  428    $    -       $  428      
Inventory accounting adjustments                                      (4)     
Corporate amounts                                                   (159)     
Operational restructuring effects - net                                -      
Merger-related expenses                                              (19)     
------------------------------------------------------------------------------
Corporate operating income                                           246      

Interest expense                                                     (75)     
Taxes on income                                                      (47)     
Extraordinary loss                                                     -      
Cumulative effect of accounting change                                 -      
------------------------------------------------------------------------------

Net income                                                        $  124      
==============================================================================
Pre-tax equity income (loss) included                                         
 in revenues                               $  (14)   $    -       $  (14)     
Depreciation and amortization                 235         7          242      

Assets                                     $4,985    $  965       $5,950      
Current liabilities (excluding debt)          611       208          819      
------------------------------------------------------------------------------
Net operating investment                   $4,374    $  757       $5,131      
==============================================================================
Unincorporated joint ventures and                                             
 associated companies                      $1,692    $    -       $1,692      
Capital investments                           505        21          526      
==============================================================================

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5512.  COMPANY OPERATIONS - continued                                             

                                                                [Download Table]

                                                     Packaging  Construction  
                                             Base      and          and       
1998                                      Materials  Consumer   Distribution  
==============================================================================
                                                                              
Customer aluminum shipments                   668       141         184       
Intersegment aluminum shipments               354         -           -       
------------------------------------------------------------------------------
Total aluminum shipments                    1,022       141         184       
==============================================================================

Revenues:                                                                     
 Aluminum                                  $1,055    $  787        $681       
 Nonaluminum                                  402       605         314       
Intersegment revenues - aluminum              572         -           -       
------------------------------------------------------------------------------
Total revenues                             $2,029    $1,392        $995       
==============================================================================

Segment operating income (loss)            $  290    $  156        $ 39       
Inventory accounting adjustments                                              
Corporate amounts                                                             
Operational restructuring effects - net                                       
------------------------------------------------------------------------------
Corporate operating income                                                    

Interest expense                                                              
Taxes on income                                                               
Extraordinary loss                                                            
Cumulative effect of accounting change                                        
------------------------------------------------------------------------------

Net income                                                                    
==============================================================================
Pre-tax equity income (loss) included                                         
 in revenues                               $   (3)   $    -        $  -       
Depreciation and amortization                 138        44           7       

Assets                                     $3,000    $  625        $375       
Current liabilities (excluding debt)          305       110          86       
------------------------------------------------------------------------------
Net operating investment                   $2,695    $  515        $289       
==============================================================================
Unincorporated joint ventures and                                             
 associated companies                      $1,299    $    -        $  -       
Capital investments                           228        38          10       
==============================================================================

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                                                                [Download Table]

1998                               Transportation  Restructuring  Other       
==============================================================================
                                                                              
Customer aluminum shipments                  63          391        37        
Intersegment aluminum shipments               -            4         -        
------------------------------------------------------------------------------
Total aluminum shipments                     63          395        37        
==============================================================================

Revenues:                                                                     
 Aluminum                                  $336       $1,434      $117        
 Nonaluminum                                  -           17        47        
Intersegment revenues - aluminum              -           12         -        
------------------------------------------------------------------------------
Total revenues                             $336       $1,463      $164        
==============================================================================

Segment operating income (loss)            $(19)      $  124      $  -        
Inventory accounting adjustments                                              
Corporate amounts                                                             
Operational restructuring effects - net                                       
------------------------------------------------------------------------------
Corporate operating income                                                    

Interest expense                                                              
Taxes on income                                                               
Extraordinary loss                                                            
Cumulative effect of accounting change                                        
------------------------------------------------------------------------------

Net income                                                                    
==============================================================================
Pre-tax equity income (loss) included                                         
 in revenues                               $ (1)      $    -      $(10)       
Depreciation and amortization                25           26         4        

Assets                                     $352       $  282      $417        
Current liabilities (excluding debt)         53           66        34        
------------------------------------------------------------------------------
Net operating investment                   $299       $  216      $383        
==============================================================================
Unincorporated joint ventures and                                             
 associated companies                      $  7       $    -      $172        
Capital investments                          50            -         4        
==============================================================================

                                                                [Download Table]

                                           Total    Reconciling               
1998                                      Segments     Items    Consolidated  
==============================================================================
                                                                              
Customer aluminum shipments                 1,484          -       1,484      
Intersegment aluminum shipments               358       (358)          -      
------------------------------------------------------------------------------
Total aluminum shipments                    1,842       (358)      1,484      
==============================================================================

Revenues:                                                                     
 Aluminum                                  $4,410     $    -      $4,410      
 Nonaluminum                                1,385         64       1,449      
Intersegment revenues - aluminum              584       (584)          -      
------------------------------------------------------------------------------
Total revenues                             $6,379     $ (520)     $5,859      
==============================================================================

Segment operating income (loss)            $  590                 $  590      
Inventory accounting adjustments                                       5      
Corporate amounts                                                   (140)     
Operational restructuring effects - net                             (144)     
------------------------------------------------------------------------------
Corporate operating income                                           311      

Interest expense                                                    (114)     
Taxes on income                                                      (45)     
Extraordinary loss                                                   (63)     
Cumulative effect of accounting change                               (23)     
------------------------------------------------------------------------------

Net income                                                        $   66      
==============================================================================
Pre-tax equity income (loss) included                                         
 in revenues                               $  (14)    $    -      $  (14)     
Depreciation and amortization                 244          8         252      

Assets                                     $5,051     $1,083      $6,134      
Current liabilities (excluding debt)          654        275         929      
------------------------------------------------------------------------------
Net operating investment                   $4,397     $  808      $5,205      
==============================================================================
Unincorporated joint ventures and                                             
 associated companies                      $1,478     $    -      $1,478      
Capital investments                           330         11         341      
==============================================================================

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5712.  COMPANY OPERATIONS - continued                                             

                                                                [Download Table]

                                                   Packaging  Construction    
                                          Base        and         and         
1997                                    Materials  Consumer   Distribution    
==============================================================================
                                                                              
Customer aluminum shipments                 513        142         166        
Intersegment aluminum shipments             684          -           -        
------------------------------------------------------------------------------
Total aluminum shipments                  1,197        142         166        
==============================================================================

Revenues:                                                                     
 Aluminum                                $  923     $  797        $614        
 Nonaluminum                                405        602         328        
Intersegment revenues - aluminum          1,187          -           -        
------------------------------------------------------------------------------
Total revenues                           $2,515     $1,399        $942        
==============================================================================

Segment operating income                 $  312     $  141        $ 41        
Inventory accounting adjustments                                              
Corporate amounts                                                             
Operational restructuring effects - net                                       
------------------------------------------------------------------------------
Corporate operating income                                                    

Interest expense                                                              
Taxes on income                                                               
Extraordinary loss                                                            
Cumulative effect of accounting change                                        
------------------------------------------------------------------------------

Net income                                                                    
==============================================================================
Pre-tax equity income (loss) included                                         
 in revenues                             $   (2)    $    -        $  -        
Depreciation and amortization               135         47           5        

Assets                                   $3,154     $  663        $381        
Current liabilities (excluding debt)        289        114         102        
------------------------------------------------------------------------------
Net operating investment                 $2,865     $  549        $279        
==============================================================================
Unincorporated joint ventures and                                             
 associated companies                    $1,177     $    -        $  -        
Capital investments                         105         41           9        
==============================================================================

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58
                                                                [Download Table]

1997                               Transportation  Restructuring  Other       
==============================================================================
                                                                              
Customer aluminum shipments                  66        737          39        
Intersegment aluminum shipments               -         10           -        
------------------------------------------------------------------------------
Total aluminum shipments                     66        747          39        
==============================================================================

Revenues:                                                                     
 Aluminum                                  $353     $2,610        $126        
 Nonaluminum                                  -         72          28        
Intersegment revenues - aluminum              -         33           -        
------------------------------------------------------------------------------
Total revenues                             $353     $2,715        $154        
==============================================================================

Segment operating income                   $ 10     $  102        $  5        
Inventory accounting adjustments                                              
Corporate amounts                                                             
Operational restructuring effects - net                                       
------------------------------------------------------------------------------
Corporate operating income                                                    

Interest expense                                                              
Taxes on income                                                               
Extraordinary loss                                                            
Cumulative effect of accounting change                                        
------------------------------------------------------------------------------

Net income                                                                    
==============================================================================
Pre-tax equity income (loss) included                                         
 in revenues                               $  1     $    -        $ (4)       
Depreciation and amortization                26        143           4        

Assets                                     $331     $1,921        $442        
Current liabilities (excluding debt)         46        212          17        
------------------------------------------------------------------------------
Net operating investment                   $285     $1,709        $425        
==============================================================================
Unincorporated joint ventures and                                             
 associated companies                      $  8     $    -        $196        
Capital investments                          40         33          30        
==============================================================================

                                                                [Download Table]


                                            Total  Reconciling                
1997                                      Segments    Items     Consolidated  
==============================================================================
                                                                              
Customer aluminum shipments                 1,663           -        1,663    
Intersegment aluminum shipments               694        (694)           -    
------------------------------------------------------------------------------
Total aluminum shipments                    2,357        (694)       1,663    
==============================================================================

Revenues:                                                                     
 Aluminum                                  $5,423     $     -       $5,423    
 Nonaluminum                                1,435          42        1,477    
Intersegment revenues - aluminum            1,220      (1,220)           -    
------------------------------------------------------------------------------
Total revenues                             $8,078     $(1,178)      $6,900    
==============================================================================

Segment operating income                   $  611                   $  611    
Inventory accounting adjustments                                       (12)   
Corporate amounts                                                     (131)   
Operational restructuring effects - net                                (75)   
------------------------------------------------------------------------------
Corporate operating income                                             393    

Interest expense                                                      (153)   
Taxes on income                                                       (104)   
Extraordinary loss                                                       -    
Cumulative effect of accounting change                                   -    
------------------------------------------------------------------------------

Net income                                                          $  136    
==============================================================================
Pre-tax equity income (loss) included                                         
 in revenues                               $   (5)    $     -       $   (5)   
Depreciation and amortization                 360           8          368    

Assets                                     $6,892     $   334       $7,226    
Current liabilities (excluding debt)          780         294        1,074    
------------------------------------------------------------------------------
Net operating investment                   $6,112     $    40       $6,152    
==============================================================================
Unincorporated joint ventures and                                             
 associated companies                      $1,381     $     -       $1,381    
Capital investments                           258          14          272    
==============================================================================

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5912.  COMPANY OPERATIONS - continued                                             
RECONCILING ITEMS                                                               
Reconciling items consist of the following:                                     

                                                                [Download Table]

                                        1999      1998      1997    
                                    --------------------------------
                                                                    
Assets:                                                             
 Corporate assets                      $ 830     $1,106    $ 917    
 Construction in progress                492        320      155    
 Inventory accounting adjustments       (266)      (248)    (547)   
 Internal receivables included in                                   
  the assets of the global                                          
  business units                         (91)       (95)    (191)   
                                    --------------------------------
                                       $ 965     $1,083     $334    
                                    ================================

Current liabilities:                                                
 Corporate liabilities                 $ 261     $  287     $398    

 Payables to unincorporated joint                                   
  ventures and associated companies       48         75       81    
 Internal liabilities included in                                   
  the current liabilities of the                                    
  global business units                 (101)       (87)    (185)   
                                    --------------------------------
                                       $ 208     $  275     $294    
                                    ================================

The reconciling amounts for nonaluminum revenues, depreciation and              
amortization and capital investments relate to corporate activities.            

Inventory accounting adjustments include elimination of unrealized profits      
on sales between global business units and LIFO inventory adjustments.          
Construction in progress in 1999 includes $359 million (1998 - $150 million)    
related to the expansion of the Worsley Alumina Refinery joint venture in       
Australia.                                                                      

Research and development expenditures were $25 million in 1999 (1998 - $31      
million, 1997 - $41 million).                                                   

                                                                [Download Table]

GEOGRAPHIC                                                                  

                       Domestic     Canada   Other Foreign   Consolidated   
============================================================================
                                                                            
1999                                                                        
Revenues                $3,640      $  558      $  598          $4,796      
Long-lived assets        1,735       1,226       1,281           4,242      
============================================================================
1998                                                                        
Revenues                $4,653      $  452      $  754          $5,859      
Long-lived assets        1,822       1,261       1,086           4,169      
============================================================================
1997                                                                        
Revenues                $5,306      $  523      $1,071          $6,900      
Long-lived assets        2,582       1,321       1,080           4,983      
============================================================================

The majority of the Other Foreign category is comprised of European             
operations except that long-lived assets include $891 million in 1999 ($673     
million in 1998 and $569 million in 1997) related to the Worsley Alumina        
Refinery joint venture located in Australia.                                    

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6013.  CONTINGENT LIABILITIES AND COMMITMENTS                                     
LEGAL                                                                           
Various suits, claims and actions are pending against the Company.  In the      
opinion of management, after consultation with legal counsel, disposition of    
these suits, claims and actions, either individually or in the aggregate,       
are not expected to have a material adverse effect on the Company's             
competitive or financial position.  No assurance can be given, however, that    
the disposition of one or more of such suits, claims or actions in a            
particular reporting period will not be material in relation to the reported    
results for such period.                                                        

LEASES                                                                          
Certain items of property, plant and equipment are leased under long-term       
operating leases.  Lease expense was $35 million in 1999 ($36 million in        
1998 and $45 million in 1997).  Lease commitments at December 31, 1999 were     
$57 million.  Leases covering major items contain renewal and/or purchase       
options that may be exercised.                                                  

ENVIRONMENTAL                                                                   
The Company is involved in various worldwide environmental improvement          
activities resulting from past operations, including designation as a           
potentially responsible party (PRP), with others, at various Environmental      
Protection Agency-designated Superfund sites.  The Company has recorded         
estimated amounts (on an undiscounted basis), which are expected to be          
sufficient to satisfy anticipated costs of known remediation requirements       
including such costs relating to sold locations.                                

An analysis of the accrual for environmental remediation costs follows:         

                                                                [Download Table]

                            1999        1998       1997    
                         ----------------------------------

                                                           
Balance at January 1        $172        $177       $203    
  Accruals                     -           7          -    
  Payments                   (10)        (12)       (26)   
                         ----------------------------------
Balance at December 31      $162        $172       $177    
                         ==================================

The balance of the accrual at December 31, 1999 is expected to be spent over    
the next 15 to 20 years with the majority to be spent by the year 2005.         

Estimated environmental remediation costs are developed after considering,      
among other things, the following:                                              

.    currently available technological solutions                              
.    alternative cleanup methods                                              
.    risk-based assessments of the contamination                              
.    estimated proportionate share of remediation costs (if applicable)       

The Company may also use external consultants and consider, when available,     
estimates by other PRPs and governmental agencies and information regarding     
the financial viability of other PRPs.  Based on information currently          
available, the Company believes it is unlikely that it will incur               
substantial additional costs as a result of failure by other PRPs to satisfy    
their responsibilities for remediation costs.                                   

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6113.  CONTINGENT LIABILITIES AND COMMITMENTS - continued                         
Estimated costs for future environmental compliance and remediation are         
necessarily imprecise because of factors such as:                               

.    continuing evolution of environmental laws and regulatory requirements   
.    availability and application of technology                               
.    identification of presently unknown remediation requirements             
.    cost allocations among PRPs                                              

Furthermore, it is not possible to predict the amount or timing of future       
costs of environmental remediation that may subsequently be determined.         
Based on information presently available, such future costs are not expected    
to have a material adverse effect on the Company's competitive or financial     
position.  However, such costs could be material to results of operations in    
a future interim or annual reporting period.                                    

14.  CANADIAN REYNOLDS METALS COMPANY, LTD. AND REYNOLDS ALUMINUM COMPANY       
OF CANADA, LTD.                                                       
Financial statements for Canadian Reynolds Metals Company, Ltd. and Reynolds    
Aluminum Company of Canada, Ltd. have been omitted because certain              
securities registered under the Securities Act of 1933, of which these          
wholly owned subsidiaries of Reynolds Metals Company (Reynolds) are obligors    
(thus subjecting them to reporting requirements under Section 13 or 15(d) of    
the Securities Exchange Act of 1934), are fully and unconditionally             
guaranteed by Reynolds.  Financial information relating to these companies      
is presented herein in accordance with Staff Accounting Bulletin 53 as an       
addition to the notes to the consolidated financial statements of Reynolds      
Metals Company.  Summarized financial information is as follows:                

                                                                [Download Table]

Canadian Reynolds Metals Company, Ltd.                               
                                         Years ended December 31     
                                    ---------------------------------
                                       1999        1998       1997   
                                    ---------------------------------
                                                                     
        Net Sales:                                                   
         Customers                     $474        $356       $237   
         Parent company                 452         466        680   
                                    ---------------------------------
                                        926         822        917   
        Cost of products sold           783         708        733   
        Net income                     $ 73        $ 84       $117   

                                                                [Download Table]

                                   December 31      
                            ------------------------
                               1999           1998  
                            ------------------------
                                                    
Current assets                $  176         $  155 
Noncurrent assets              1,184          1,206 
Current liabilities             (148)          (100)
Noncurrent liabilities          (345)          (379)

                                                                [Download Table]


Reynolds Aluminum Company of Canada, Ltd.                             
                                         Years ended December 31      
                                  ------------------------------------
                                     1999         1998         1997   
                                  ------------------------------------
                                                                      
        Net Sales:                                                    
          Customers                  $474         $447        $  519  
          Parent company              453          455           648  
                                  ------------------------------------
                                      927          902         1,167  
        Cost of products sold         784          784           956  
        Net income                   $ 73         $ 84        $  117  

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6214.  CANADIAN REYNOLDS METALS COMPANY, LTD. AND REYNOLDS ALUMINUM COMPANY       
OF CANADA, LTD. - continued                                           
Reynolds Aluminum Company of Canada, Ltd. - continued                           

                                                                [Download Table]

                             December 31     
                        ---------------------
                           1999        1998  
                        ---------------------
                                             
Current assets            $  224      $  186 
Noncurrent assets          1,192       1,228 
Current liabilities         (129)       (103)
Noncurrent liabilities      (347)       (389)

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63 QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
(Millions, except per share amounts)

                                                                [Download Table]

                                                    1999                     
-----------------------------------------------------------------------------
Quarter                              1st        2nd       3rd        4th     
-----------------------------------------------------------------------------
                                                                             
Revenues                          $ 1,068     $1,161     $1,209    $ 1,358   
Gross profit<FN1>                      86        153        164        223   
Net income (loss)                 $   (10)    $   35     $   36    $    63   
=============================================================================
Earnings Per Share                                                           
  Basic:                                                                     
   Average shares outstanding          64         64         63         63   
-----------------------------------------------------------------------------
Net income (loss)                 $ (0.15)    $ 0.55     $ 0.56    $  1.00   
-----------------------------------------------------------------------------
  Diluted:                                                                   
   Average shares outstanding          64         64         63         64   
-----------------------------------------------------------------------------
Net income (loss)                 $ (0.15)    $ 0.55     $ 0.56    $  0.99   
=============================================================================
Net income (loss) includes the                                               
 effect of the following item:                                               
 Merger-related expenses          $     -     $    -     $    9    $     7   
-----------------------------------------------------------------------------

                                                    1998                     
-----------------------------------------------------------------------------
Quarter                             1st         2nd        3rd       4th     
-----------------------------------------------------------------------------
Revenues                          $1,532      $1,579     $1,368    $1,380    
Gross profit<FN1>                    211         238        202       182    
Income (loss) before                                                         
 extraordinary loss and                                                      
 cumulative effect of                                                        
 accounting change                    58        (123)       262       (45)   
Extraordinary loss                     -          (3)       (60)        -    
Cumulative effect of                                                         
 accounting change                   (23)          -          -         -    
-----------------------------------------------------------------------------
Net income (loss)                 $   35      $ (126)    $  202    $  (45)   
=============================================================================
Earnings Per Share                                                           
  Basic:                                                                     

   Average shares outstanding         73          72         69        64    
   Income (loss) before                                                      
    extraordinary loss and                                                   
    cumulative effect of                                                     
    accounting change             $ 0.78      $(1.70)    $ 3.80    $(0.71)   
   Extraordinary loss                  -       (0.04)     (0.88)        -    
   Cumulative effect of                                                      
    accounting change              (0.32)          -          -         -    
-----------------------------------------------------------------------------
Net income (loss)                 $ 0.46      $(1.74)    $ 2.92    $(0.71)   
-----------------------------------------------------------------------------
 Diluted:                                                                    
  Average shares outstanding          74          72         69        64    
  Income (loss) before                                                       
   extraordinary loss and                                                    
   cumulative effect of                                                      
   accounting change              $ 0.78      $(1.70)    $ 3.80    $ (0.71)  
  Extraordinary loss                   -       (0.04)     (0.88)         -   
  Cumulative effect of                                                       
   accounting change               (0.32)          -          -          -   
-----------------------------------------------------------------------------
Net income (loss)                 $ 0.46      $(1.74)    $ 2.92    $ (0.71)  
=============================================================================
Net income (loss) includes the                                               
 effect of the following item:                                               
 Operational restructuring                                                   
  effects - net<FN2>              $    -      $ (196)    $  201    $   (95)  
-----------------------------------------------------------------------------
<FN>                                                                         
<FN1>Gross profit equals revenues minus cost of products sold and            
depreciation and amortization.                                               
<FN2>Operational restructuring effects are shown net of gains on             
sales of assets.                                                             

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64REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS   

Stockholders and Board of Directors                                             
Reynolds Metals Company                                                         

We have audited the accompanying consolidated balance sheets of Reynolds        
Metals Company as of December 31, 1999 and 1998, and the related consolidated   
statements of income, changes in stockholders' equity, and cash flows           
for each of the three years in the period ended December 31, 1999.  These       
financial statements are the responsibility of the Company's management.        
Our responsibility is to express an opinion on these financial statements       
based on our audits.                                                            

We conducted our audits in accordance with auditing standards generally         
accepted in the United States.  Those standards require that we plan and        
perform the audit to obtain reasonable assurance about whether the financial    
statements are free of material misstatement.  An audit includes examining,     
on a test basis, evidence supporting the amounts and disclosures in the         
financial statements.  An audit also includes assessing the accounting          
principles used and significant estimates made by management, as well as        
evaluating the overall financial statement presentation.  We believe that       
our audits provide a reasonable basis for our opinion.                          

In our opinion, the financial statements referred to above present fairly,      
in all material respects, the consolidated financial position of Reynolds       
Metals Company at December 31, 1999 and 1998, and the consolidated results      
of its operations and its cash flows for each of the three years in the         
period ended December 31, 1999, in conformity with accounting principles        
generally accepted in the United States.                                        

As discussed in Note 1 to the consolidated financial statements, the Company    
changed its method of accounting for the costs of start-up activities in        
1998.                                                                           

       ERNST & YOUNG LLP

Richmond, Virginia                                                              
February 18, 2000                                                               

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65ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND        
FINANCIAL DISCLOSURE                                          

None.                                                                           

PART III    

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                   

For information required by this item, see the information under the            
captions "Item 1.  Election of Directors - Nominees" and "Certain               
Relationships" and "Stock Ownership Information - Section 16(a) Beneficial      
Ownership Reporting Compliance" in the Registrant's definitive proxy            
statement for its 2000 Annual Meeting of Stockholders.  That information is     
incorporated in this report by reference.                                       

Information concerning executive officers of the Registrant is shown in Part    
I - Item 4A of this report.                                                     

ITEM 11.  EXECUTIVE COMPENSATION                                                

For information required by this item, see the information under the            
captions "Item 1.  Election of Directors - Compensation of Directors" and       
"Executive Compensation" in the Registrant's definitive proxy statement for     
its 2000 Annual Meeting of Stockholders.  That information (other than that     
appearing under the captions "Executive Compensation - Report of the            
Compensation Committee on Executive Compensation" and "Executive                
Compensation - Performance Graph") is incorporated in this report by            
reference.                                                                      

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT        

For information required by this item, see the information under the caption    
"Stock Ownership Information - Holders of More Than 5%" and "Director and       
Executive Officer Stock Ownership" in the Registrant's definitive proxy         
statement for its 2000 Annual Meeting of Stockholders.  That information is     
incorporated in this report by reference.                                       

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                        

For information required by this item, see the information under the            
captions "Item 1.  Election of Directors - Certain Relationships" and           
"Change in Control and Termination Arrangements" in the Registrant's            
definitive proxy statement for its 2000 Annual Meeting of Stockholders.         
That information is incorporated in this report by reference.                   

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66PART IV   

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K      

(a)  The consolidated financial statements and exhibits listed below are        
filed as a part of this report.                                       

(1)  Consolidated Financial Statements:                         Page  
                                                              ----

Consolidated statement of income -                          
  Years ended December 31, 1999, 1998 and 1997.               36

  Consolidated balance sheet - December 31, 1999 and 1998.    37

Consolidated statement of cash flows -                      
  Years ended December 31, 1999, 1998 and 1997.               38

Consolidated statement of changes in stockholders' equity - 
  Years ended December 31, 1999, 1998 and 1997.               39

  Notes to consolidated financial statements.                 40

  Report of Ernst & Young LLP, Independent Auditors.          64

(2)  Financial Statement Schedules                                    

Schedule II - Valuation and Qualifying Accounts -           
  Years Ended December 31, 1999, 1998 and 1997.               67

     This report omits all other schedules for which provision is made
  in the applicable accounting regulations of the Securities and
Exchange Commission because they are not required, are      
      inapplicable or the required information has otherwise been given.

 This report omits individual financial statements of Reynolds
   Metals Company because the restricted net assets (as defined in
      Accounting Series Release 302) of all subsidiaries included in the
     consolidated financial statements filed, in the aggregate, do not
exceed 25% of the consolidated net assets shown in the      
consolidated balance sheet as of December 31, 1999.         

      This report omits financial statements of all associated companies
    (20% to 50% owned) because no associated company is individually
    significant.  Summarized financial information of all associated
      companies has been omitted because the associated companies in the
aggregate are not significant.                              

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67SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS                                 

                                                                [Download Table]

Column A               Column B          Column C          Column D   Column E
------------------------------------------------------------------------------
                                         Additions                            
                                   ----------------------                     
                       Balance at  Charged to  Charged to           Balance at
                       beginning   costs and     other                 end of 
     Description       of period   expenses     accounts   Deductions  period 
------------------------------------------------------------------------------
                                                                              
Allowance for                                                                 
 doubtful accounts:                                                           
  1999                    $14         $4         $  -      $  (8) (B)    $10  
  1998                     16          7            -         (9) (B)     14  
  1997                     18          5            -         (7) (B)     16  

Allowance for                                                                 
 deferred income taxes:                                                       
  1999                     20          -            -          -          20  
  1998                     19          -            1 (A)      -          20  
  1997                     46          -            3 (A)    (30) (C)     19  

(A)  Allowance for deferred income taxes is charged to provision for taxes on   
income.                                                               

(B)  Deductions consist of the following:                                       

                                                                [Download Table]

                                       1999       1998       1997  
                                     ------------------------------
                                                                   
Receivable write-offs                  $(3)       $(6)       $(5)  
Divestitures                            (4)        (3)        (1)  
Foreign currency translation effect     (1)         -         (1)  
                                     ------------------------------
                                       $(8)       $(9)       $(7)  

(C)  Deductions were due to divestitures.                                       

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68(3)    Exhibits                                                             

* EXHIBIT 2     - Agreement and Plan of Merger among Alcoa Inc.,  
                   RLM Acquisition Corp. and Reynolds Metals Company
                   dated as of August 18, 1999. (File No. 001-01430,
               Form 8-K dated August 19, 1999, EXHIBIT 99.1)

    EXHIBIT 3.1   - Restated Certificate of Incorporation, as amended.

* EXHIBIT 3.2   - By-laws, as amended.  (File No. 001-01430, 1998 
Form 10-K Report, EXHIBIT 3.2)

EXHIBIT 4.1   - Restated Certificate of Incorporation.  See   
EXHIBIT 3.1.                  

* EXHIBIT 4.2   - By-laws.  See EXHIBIT 3.2.                      

* EXHIBIT 4.3   - Form of Common Stock Certificate.  (Registration
            Statement No. 333-79203 on Form S-8, dated
May 24, 1999, EXHIBIT 4.2)    

* EXHIBIT 4.4   - Indenture dated as of April 1, 1989 (the        
                  "Indenture") between Reynolds Metals Company and
               The Bank of New York, as Trustee, relating to
                  Debt Securities.  (File No. 001-01430, Form 10-Q
              Report for the Quarter ended March 31, 1989,
EXHIBIT 4(c))                 

* EXHIBIT 4.5   - Amendment No. 1 dated as of November 1, 1991 to 
           the Indenture.  (File No. 001-01430, 1991
Form 10-K Report, EXHIBIT 4.4)

* EXHIBIT 4.6   - Amended and Restated Rights Agreement dated as  
                   of March 8, 1999 (the "Rights Agreement") between
         Reynolds Metals Company and ChaseMellon
                    Shareholder Services, L.L.C.  (File No. 001-01430,
                   Form 8-K Report dated March 8, 1999, EXHIBIT 4.1)

* EXHIBIT 4.7   - First Amendment dated August 20, 1999 to the    
                    Rights Agreement.  (File No. 001-01430, Form 8-A/A
               (Amendment No. 2 to Registration Statement on
                  Form 8-A, pertaining to Preferred Stock Purchase
           Rights) dated August 19, 1999, EXHIBIT 1)

   * EXHIBIT 4.8   - Form of Fixed Rate Medium-Term Note.  (Registration
                      Statement No. 33-30882 on Form S-3, dated August 31,
1989, EXHIBIT 4.3)            

      * EXHIBIT 4.9   - Form of Floating Rate Medium-Term Note.  (Registration
                      Statement No. 33-30882 on Form S-3, dated August 31,
1989, EXHIBIT 4.4)            

* EXHIBIT 4.10  - Form of Book-Entry Fixed Rate Medium-Term Note. 
                     (File No. 001-01430, 1991 Form 10-K Report, EXHIBIT
4.15)                         

  * EXHIBIT 4.11  - Form of Book-Entry Floating Rate Medium-Term Note.
                     (File No. 001-01430, 1991 Form 10-K Report, EXHIBIT
4.16)                         

* EXHIBIT 4.12  - Form of 9% Debenture due August 15, 2003.  (File
                       No. 001-01430, Form 8-K Report dated August 16, 1991,
EXHIBIT 4(a))                 

_______________________                                                         
* Incorporated by reference.                                                    

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69* EXHIBIT 4.13  - Articles of Continuance of Societe d'Aluminium  
                    Reynolds du Canada, Ltee/Reynolds Aluminum Company
             of Canada, Ltd. (formerly known as Canadian
             Reynolds Metals Company, Limited -- Societe
                   Canadienne de Metaux Reynolds, Limitee) ("RACC"),
                  as amended.  (File No. 001-01430, 1995 Form 10-K
Report, EXHIBIT 4.13)         

  * EXHIBIT 4.14  - By-Laws of RACC, as amended.  (File No. 001-01430,
                  Form 10-Q Report for the Quarter ended March 31,
1997, EXHIBIT 4.14)           

* EXHIBIT 4.15  - Articles of Incorporation of Societe Canadienne 
                   de Metaux Reynolds, Ltee/Canadian Reynolds Metals
               Company, Ltd. ("CRM"), as amended.  (File No.
                   001-01430, Form 10-Q Report for the Quarter ended
   September 30, 1997, EXHIBIT 4.15)

 * EXHIBIT 4.16  - By-Laws of CRM, as amended.  (File No. 001-01430,
                      Form 10-Q Report for the Quarter ended September 30,
1997, EXHIBIT 4.16)           

* EXHIBIT 4.17  - Indenture dated as of April 1, 1993 among RACC, 
                   Reynolds Metals Company and The Bank of New York,
                   as Trustee.  (File No. 001-01430, Form 8-K Report
    dated July 14, 1993, EXHIBIT 4(a))

      * EXHIBIT 4.18  - First Supplemental Indenture, dated as of December 18,
                   1995 among RACC, Reynolds Metals Company, CRM and
                   The Bank of New York, as Trustee.  (File No. 001-
             01430, 1995 Form 10-K Report, EXHIBIT 4.18)

      * EXHIBIT 4.19  - Form of 6-5/8% Guaranteed Amortizing Note due July 15,
                   2002.  (File No. 001-01430, Form 8-K Report dated
July 14, 1993, EXHIBIT 4(d))  

EXHIBIT 9     - None.                                         

     =* EXHIBIT 10.1  - Reynolds Metals Company 1987 Nonqualified Stock Option
                     Plan.  (Registration Statement No. 33-13822 on Form
          S-8, dated April 28, 1987, EXHIBIT 28.1)

     =* EXHIBIT 10.2  - Reynolds Metals Company 1992 Nonqualified Stock Option
                     Plan.  (Registration Statement No. 33-44400 on Form
            S-8, dated December 9, 1991, EXHIBIT 28.1)

   =* EXHIBIT 10.3  - Amendment and Restatement of Reynolds Metals Company
                     Performance Incentive Plan, as adopted and executed
                     May 21, 1999. (File No. 001-01430, Form 10-Q Report
                    for the Quarter ended June 30, 1999, EXHIBIT 10.3)

=* EXHIBIT 10.4  - Amendment and Restatement of Supplemental Death  
                    Benefit Plan for Officers, as adopted and executed
                        April 26, 1999.  (File No. 001-01430, Form 10-Q Report
                    for the Quarter ended June 30, 1999, EXHIBIT 10.5)

_______________________                                                         
* Incorporated by reference.                                                    
= Management contract or compensatory plan or arrangement required to be        
filed as an exhibit pursuant to Item 601 of Regulation S-K.                 

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70 =* EXHIBIT 10.5  - Financial Counseling Assistance Plan for Officers.
             (File No. 001-01430, 1987 Form 10-K Report,
EXHIBIT 10.11)                

=* EXHIBIT 10.6  - Management Incentive Deferral Plan.  (File No.   
                  001-01430, 1987 Form 10-K Report, EXHIBIT 10.12)

 =* EXHIBIT 10.7  - Amendment and Restatement of Deferred Compensation
                     Plan for Outside Directors, as adopted and executed
                        April 28, 1999.  (File No. 001-01430, Form 10-Q Report
                    for the Quarter ended June 30, 1999, EXHIBIT 10.8)

  =* EXHIBIT 10.8  - Form of Indemnification Agreement for Directors and
                Officers.  (File No. 001-01430, 1998 Form 10-K
Report, EXHIBIT 10.9)         

 =* EXHIBIT 10.9  - Form of Executive Severance Agreement, as amended,
                   between Reynolds Metals Company and key executive
                     personnel, including each of the individuals listed
                  in Item 4A of this report.  (File No. 001-01430,
                  Form 10-Q Report for the Quarter ended September
30, 1999, EXHIBIT 10.9)       

=* EXHIBIT 10.10 - Amendment to Reynolds Metals Company 1987        
                  Nonqualified Stock Option Plan effective May 20,
                  1988.  (File No. 001-01430, Form 10-Q Report for
                 the Quarter ended June 30, 1988, EXHIBIT 19(a))

=* EXHIBIT 10.11 - Amendment to Reynolds Metals Company 1987        
                      Nonqualified Stock Option Plan effective October 21,
                  1988.  (File No. 001-01430, Form 10-Q Report for
                      the Quarter ended September 30, 1988, EXHIBIT 19(a))

=* EXHIBIT 10.12 - Amendment to Reynolds Metals Company 1987        
                     Nonqualified Stock Option Plan effective January 1,
                    1987.  (File No. 001-01430, 1988 Form 10-K Report,
EXHIBIT 10.22)                

=* EXHIBIT 10.13 - Form of Stock Option and Stock Appreciation Right
                 Agreement, as approved February 16, 1990 by the
                  Compensation Committee of the Company's Board of
                 Directors.  (File No. 001-01430, 1989 Form 10-K
Report, EXHIBIT 10.24)        

=* EXHIBIT 10.14 - Amendment to Reynolds Metals Company 1987        
          Nonqualified Stock Option Plan effective
              January 18, 1991.  (File No. 001-01430, 1990
  Form 10-K Report, EXHIBIT 10.26)

=* EXHIBIT 10.15 - Form of Stock Option Agreement, as approved      
                 April 22, 1992 by the Compensation Committee of
              the Company's Board of Directors.  (File No.
                   001-01430, Form 10-Q Report for the Quarter ended
March 31, 1992, EXHIBIT 28(a))

=* EXHIBIT 10.16 - Amendment and Restatement of Reynolds Metals     
                      Company Restricted Stock Plan for Outside Directors,
                  as adopted and executed April 28, 1999 (File No.
                   001-01430, Form 10-Q Report for the Quarter ended
June 30, 1999, EXHIBIT 10.17) 
_______________________                                                         
* Incorporated by reference.                                                    
= Management contract or compensatory plan or arrangement required to be        
filed as an exhibit pursuant to Item 601 of Regulation S-K.                 

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71=* EXHIBIT 10.17 - Amendment and Restatement of Reynolds Metals     
                 Company New Management Incentive Deferral Plan,
                  as adopted and executed April 28, 1999 (File No.
             001-01430, Form 10-Q Report for the Quarter
     ended June 30, 1999, EXHIBIT 10.18)

=* EXHIBIT 10.18 - Amendment and Restatement of Reynolds Metals     
                 Company Salary Deferral Plan for Executives, as
                adopted and executed April 28, 1999. (File No.
                   001-01430, Form 10-Q Report for the Quarter ended
June 30, 1999, EXHIBIT 10.19) 

=* EXHIBIT 10.19 - Amendment and Restatement of Reynolds Metals     
                Company Supplemental Long-Term Disability Plan
                   for Executives, as adopted and executed April 26,
              1999.  (File No. 001-01430, Form 10-Q Report
                     for the Quarter ended June 30, 1999, EXHIBIT 10.20)

=* EXHIBIT 10.20 - Amendment to Reynolds Metals Company 1987        
          Nonqualified Stock Option Plan effective
                  August 19, 1994.  (File No. 001-01430, Form 10-Q
                  Report for the Quarter ended September 30, 1994,
EXHIBIT 10.34)                

=* EXHIBIT 10.21 - Amendment to Reynolds Metals Company 1992        
                     Nonqualified Stock Option Plan effective August 19,
                  1994.  (File No. 001-01430, Form 10-Q Report for
                      the Quarter ended September 30, 1994, EXHIBIT 10.35)

=* EXHIBIT 10.22 - Form of Split Dollar Life Insurance Agreement    
                (Trustee Owner, Trustee Pays Premiums).  (File
                 No. 001-01430, Form 10-Q Report for the Quarter
     ended June 30, 1995, EXHIBIT 10.34)

=* EXHIBIT 10.23 - Form of Split Dollar Life Insurance Agreement    
                (Trustee Owner, Employee Pays Premium).  (File
                 No. 001-01430, Form 10-Q Report for the Quarter
     ended June 30, 1995, EXHIBIT 10.35)

=* EXHIBIT 10.24 - Form of Split Dollar Life Insurance Agreement    
                 (Employee Owner, Employee Pays Premium).  (File
                 No. 001-01430, Form 10-Q Report for the Quarter
     ended June 30, 1995, EXHIBIT 10.36)

=* EXHIBIT 10.25 - Form of Split Dollar Life Insurance Agreement    
                 (Third Party Owner, Third Party Pays Premiums).
               (File No. 001-01430, Form 10-Q Report for the
             Quarter ended June 30, 1995, EXHIBIT 10.37)

=* EXHIBIT 10.26 - Form of Split Dollar Life Insurance Agreement    
              (Third Party Owner, Employee Pays Premiums).
               (File No. 001-01430, Form 10-Q Report for the
             Quarter ended June 30, 1995, EXHIBIT 10.38)

=* EXHIBIT 10.27 - Amendment and Restatement of Reynolds Metals     
                 Company 1996 Nonqualified Stock Option Plan, as
                 adopted and executed April 15, 1999.  (File No.
             001-01430, Form 10-Q Report for the Quarter
     ended June 30, 1999, EXHIBIT 10.28)

=* EXHIBIT 10.28 - Amendment to Reynolds Metals Company 1992        
          Nonqualified Stock Option Plan effective
               January 1, 1993.  (Registration Statement No.
            333-03947 on Form S-8, dated May 17, 1996,
EXHIBIT 99)                   

------------------                                                              
* Incorporated by reference.                                                    
= Management contract or compensatory plan or arrangement required to be        
filed as an exhibit pursuant to Item 601 of Regulation S-K.                 

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72=* EXHIBIT 10.29 - Form of Stock Option Agreement, as approved      
                   May 17, 1996 by the Compensation Committee of the
                     Company's Board of Directors.  (File No. 001-01430,
                 Form 10-Q Report for the Quarter ended June 30,
1996, EXHIBIT 10.41)          

=* EXHIBIT 10.30 - Form of Three Party Stock Option Agreement, as   
                     approved May 17, 1996 by the Compensation Committee
                 of the Company's Board of Directors.  (File No.
                   001-01430, Form 10-Q Report for the Quarter ended
June 30, 1996, EXHIBIT 10.42) 

=* EXHIBIT 10.31 - Reynolds Metals Company Supplemental Incentive   
                    Plan.  (File No. 001-01430, 1996 Form 10-K Report,
EXHIBIT 10.40)                

=* EXHIBIT 10.32 - Amendment and Restatement of Reynolds Metals     
              Company Stock Plan for Outside Directors, as
                 adopted and executed April 28, 1999.  (File No.
                   001-01430, Form 10-Q Report for the Quarter ended
June 30, 1999, EXHIBIT 10.34) 

=* EXHIBIT 10.33 - Amendment and Restatement of Reynolds Metals     
              Company Long-Term Performance Share Plan, as
                adopted and executed April 26, 1999. (File No.
                   001-01430, Form 10-Q Report for the Quarter ended
June 30, 1999, EXHIBIT 10.37) 

* EXHIBIT 10.34 - Asset Purchase Agreement by and among Ball      
                  Corporation, Ball Metal Beverage Container Corp.
                   and Reynolds Metals Company dated as of April 22,
                  1998.  (File No. 001-01430, Form 10-Q Report for
             the Quarter ended June 30, 1998, EXHIBIT 2)

=* EXHIBIT 10.35 - Reynolds Metals Company 1999 Nonqualified Stock  
                   Option Plan (Registration Statement No. 333-79203
               on Form S-8, dated May 24, 1999, EXHIBIT 4.5)

=* EXHIBIT 10.36 - Form of Stock Option Agreement, as approved      
                   May 21, 1999 by the Compensation Committee of the
                     Company's Board of Directors.  (File No. 001-01430,
                       Form 10-Q Report for the Quarter ended June 30, 1999,
EXHIBIT 10.40)                

=* EXHIBIT 10.37 - Form of Three Party Stock Option Agreement, as   
                     approved May 21, 1999 by the Compensation Committee
                 of the Company's Board of Directors.  (File No.
                   001-01430, Form 10-Q Report for the Quarter ended
June 30, 1999, EXHIBIT 10.41) 

 EXHIBIT 11    - Omitted; see Item 8 for computation of earnings
per share                     

EXHIBIT 12    - Not applicable                                

EXHIBIT 13    - Not applicable                                

EXHIBIT 16    - Not applicable                                

----------------                                                                
* Incorporated by reference.                                                    
= Management contract or compensatory plan or arrangement required to be        
filed as an exhibit pursuant to Item 601 of Regulation S-K.                 

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73EXHIBIT 18    - None                                          

 EXHIBIT 21    - List of Subsidiaries of Reynolds Metals Company

EXHIBIT 22    - None                                          

EXHIBIT 23    - Consent of Independent Auditors               

EXHIBIT 24    - Powers of Attorney                            

EXHIBIT 27    - Financial Data Schedule                       

* EXHIBIT 99    - Description of Reynolds Metals Company Capital  
                   Stock.  (File No. 001-01430, Form 10-Q Report for
               the Quarter ended March 31, 1999, EXHIBIT 99)

----------------                                                                
*  Incorporated by reference.                                                   

Pursuant to Item 601 of Regulation S-K, certain instruments with respect  
to long-term debt of the Company are omitted because such debt does not   
exceed 10 percent of the total assets of the Company and its subsidiaries 
on a consolidated basis.  The Company agrees to furnish a copy of any     
such instrument to the Commission upon request.                           

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74(b)  Reports on Form 8-K                                                        

During the fourth quarter of 1999, the Registrant filed with the      
Commission a Current Report on Form 8-K dated October 20, 1999        
reporting under Item 5 that it was filing with the report an unaudited
pro forma statement of income for the year ended December 31, 1998    
relating to the Registrant's sale of its North American aluminum      
beverage can operations.                                              

During the first quarter of 2000 (through the date hereof), the       
Registrant has filed three Current Reports on Form 8-K with           
the Commission, all of which reported matters under Item 5:           

.  a Form 8-K dated January 18, 2000, containing unaudited, pro forma 
condensed consolidated financial statements relating to the     
proposed merger of the Registrant with Alcoa Inc.               

.  a Form 8-K dated January 19, 2000, containing information regarding
the Registrant's 1999 Fourth Quarter and Year-End Results.      

.  a Form 8-K dated February 14, 2000, containing copies of press     
releases issued on February 11, 2000 by the Registrant and Alcoa
Inc. concerning their proposed merger.                          

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75SIGNATURES    

Pursuant to the requirements of Section 13 or 15(d) of the Securities 
Exchange Act of 1934, the Registrant has duly caused this report to be          
signed on its behalf by the undersigned, thereunto duly authorized.             

             REYNOLDS METALS COMPANY

             By  JEREMIAH J. SHEEHAN
                              ------------------------------------
                              Jeremiah J. Sheehan, Chairman of
                           the Board and Chief Executive
     Officer

          Date   March 3, 2000
                                --------------------------------

Pursuant to the requirements of the Securities Exchange Act of 1934,  
this report has been signed below by the following persons on behalf of the     
Registrant and in the capacities and on the dates indicated.                    

By WILLIAM E. LEAHEY, JR.             By JEREMIAH J. SHEEHAN                    
--------------------------------      ------------------------------        
William E. Leahey, Jr.                Jeremiah J. Sheehan, Director       
Executive Vice President and          Chairman of the Board and           
Chief Financial Officer               Chief Executive Officer             
(Principal Financial Officer)         (Principal Executive Officer)       

Date   March 3, 2000                 Date   March 3, 2000                       
------------------------------        ----------------------------      

By * Patricia C. Barron               By  * John R. Hall                        
--------------------------------      ------------------------------        
Patricia C. Barron, Director          John R. Hall, Director              

Date    March 3, 2000                 Date    March 3, 2000                     
------------------------------        ----------------------------      

By * Robert L. Hintz                  By  * William H. Joyce                    
--------------------------------      ------------------------------        
Robert L. Hintz, Director             William H. Joyce, Director          

Date   March 3, 2000                  Date    March 3, 2000                     
------------------------------        ----------------------------      

By * Mylle Bell Mangum                By  * D. Larry Moore                      
--------------------------------      ------------------------------        
Mylle Bell Mangum, Director            D. Larry Moore, Director             

Date   March 3, 2000                  Date   March 3, 2000                      
------------------------------        ----------------------------      

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76
By RANDOLPH N. REYNOLDS               By                                        
--------------------------------      ------------------------------        
Randolph N. Reynolds, Director        James M. Ringler, Director          

Date    March 3, 2000                 Date                                      
------------------------------        ----------------------------      

By * Samuel C. Scott, III             By  * Joe B. Wyatt                        
--------------------------------      ------------------------------        
Samuel C. Scott, III, Director        Joe B. Wyatt, Director              

Date   March 3, 2000                  Date   March 3, 2000                      
------------------------------        ----------------------------      

By ALLEN M. EAREHART                                                            
-------------------------------------                                       
Allen M. Earehart,                                                        
Senior Vice President and Controller                                      
(Principal Accounting Officer)                                            

Date   March 3, 2000                                                            
-----------------------------------                                     

*By D. MICHAEL JONES                                                            
-------------------------------------                                     
D. Michael Jones, Attorney-in-Fact                                      

Date   March 3, 2000                                                            
------------------------------------                                    

76      

Dates Referenced Herein   and   Documents Incorporated By Reference

				Referenced-On Page
This 10-K405 Filing		Date		First		Last			Other Filings
		3/31/92		73
		4/22/92		73
		1/1/93		74
		4/1/93		72
		7/14/93		72
		8/19/94		74
		9/30/94		74					10-Q
		6/30/95		74					10-Q
		12/18/95		72
		5/17/96		74		75			S-8
		6/30/96		75					10-Q
		1/1/97		21
		3/31/97		72					10-Q
		9/30/97		72					10-Q
		12/31/97		69					10-K405, 10-K/A, 8-K, DEF 14A
		4/22/98		75
		6/30/98		75					8-K, 10-Q
		12/31/98		9		77			10-K, 10-K/A, 11-K, DEF 14A, 8-K
		1/1/99		32
		3/8/99		71					8-K
		3/31/99		21		76			10-Q/A, 10-Q, 8-K
		4/15/99		74
		4/26/99		72		75
		4/28/99		73		75
		5/21/99		72		75
		5/24/99		71		75			S-8
		6/30/99		21		75			10-Q
		8/11/99		18
		8/18/99		4		71			8-K
		8/19/99		71					8-K
		8/20/99		71					SC 13D/A
		8/24/99		4		45
		8/30/99		4		45
		9/29/99		4		45
		9/30/99		21		73			10-Q
		10/1/99		21
		10/20/99		77					10-Q/A, 10-K/A, S-3/A, 8-K
		11/18/99		4		45
		12/20/99		4		45
		12/29/99		18
For The Period Ended		12/31/99		1		69			DEF 14A, 11-K
		1/10/00		4		44
		1/18/00		77					8-K, S-3/A
		1/19/00		77					8-K
		2/11/00		4		77			SC 13G, 8-K
		2/14/00		77					8-K
		2/18/00		21		67
		2/25/00		1		21
Filed On / Filed As Of		3/3/00		21		79
		3/31/00		4		45			10-Q
		4/3/00		21
		5/10/00		5		45
		5/12/00		4		44
		5/24/00		5		45
		5/26/00		4		44
		6/9/00		4		44
		1/1/01		44
		9/30/01		7		27
		7/1/02		32
		7/15/02		72
		8/15/03		71
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