Montreal, Canada — Alcan Inc. (NYSE, TSX: AL) announced today that, following the completion of its annual financial statements to be filed today with the Company’s annual report on Form 10-K, it is reporting revised net income of US$258 million or US$0.69 per common share for 2004. This is an upward revision from the US$66 million or US$0.16 per common share reported in its fourth quarter earnings release of February 8, 2005 and reflects lower goodwill impairment charges arising from the acquisition of Pechiney in December 2003.
The Company has determined that it previously attributed excess goodwill to several fabricating facilities acquired as part of Pechiney, which consequently resulted in an overstatement of impairment charges. The revision is non-cash and does not affect the Company’s previously reported operating earnings, nor does it have any effect on previously filed financial statements.
"2004 was a uniquely demanding year for Alcan with the combined effect of the completion of the Pechiney acquisition, the spin-off of Novelis and preparations for compliance with the internal control certification requirements of the U.S. Sarbanes-Oxley legislation," said Travis Engen, President and Chief Executive Officer of Alcan Inc. "While the Company has a high level of confidence in its internal control system, the need for this revision highlighted what was, as of December 31, 2004, a specific control-related material weakness for the purposes of management’s assessment of internal controls as required by Sarbanes-Oxley. The weakness related to the goodwill allocation process and has now been corrected," he added.
Alcan’s independent auditors have concurred with management’s assessment of the Company’s internal controls, and expressed an unqualified opinion on the Company’s 2004 consolidated financial statements.
Alcan also released pro forma financial statements for 2004 which reflect the spin-off of Novelis and the adjustments discussed above. On a pro forma basis, net income from continuing operations for 2004 was US$231 million, or US$0.61 per common share. Pro forma operating earnings, which exclude balance sheet translation effects and other specified items, were US$653 million, or US$1.75 per common share, for the year. Pro forma financial statements and a reconciliation to pro forma operating earnings are attached.
Alcan is a multinational, market-driven company and a global leader in aluminum and packaging, as well as aluminum recycling. With world-class operations in primary aluminum, fabricated aluminum as well as flexible and specialty packaging, aerospace applications, bauxite mining and alumina processing, today’s Alcan is well positioned to meet and exceed its customers' needs for innovative solutions and service. Alcan employs 73,000 people and has operating facilities in 55 countries and regions.
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