<PAGE>
-------------------------------------------------------------------------------


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2002

                          Commission file number 1-3677

                                   ALCAN INC.

             (Exact name of registrant as specified in its charter)

<TABLE>

<S>                                        <C>
                  CANADA                              Inapplicable
     (State or Other Jurisdiction of       (I.R.S. Employer Identification No.)
     Incorporation or Organization)
</TABLE>

          1188 SHERBROOKE STREET WEST, MONTREAL, QUEBEC, CANADA H3A 3G2
            (Address of Principal Executive Offices and Postal Code)

                                 (514) 848-8000
              (Registrant's Telephone Number, including Area Code)

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 (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes    [X]       No    [  ]

At June 30, 2002, the registrant had 321,256,890 shares of common stock (without
nominal or par value) outstanding.

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



<PAGE>



PART I - FINANCIAL INFORMATION

In this report, all dollar amounts are stated in U.S. dollars and all quantities
in metric tons, or tonnes, unless indicated otherwise. A tonne is 1,000
kilograms, or 2,204.6 pounds. The word "Company" refers to Alcan Inc. and, where
applicable, one or more consolidated subsidiaries.

ITEM 1. FINANCIAL STATEMENTS

                                   ALCAN INC.

INTERIM CONSOLIDATED STATEMENT OF INCOME
(unaudited)

<TABLE>
<CAPTION>
PERIODS ENDED JUNE 30                                                       Second Quarter                      Six Months
(in millions of US$, except per share amounts)                         --------------------------          -----------------------
                                                                        2002              2001               2002           2001
                                                                       ------            ------             ------         ------
                                                                               (restated - note 2)              (restated - note 2)
<S>                                                                     <C>            <C>                  <C>             <C>
SALES AND OPERATING REVENUES                                            3,199             3,162              6,136          6,432

COSTS AND EXPENSES

Costs of sales and operating expenses                                   2,520             2,474              4,851          5,051
Depreciation and amortization                                             217               204                422            400
Selling, administrative and general expenses                              142               138                281            271
Research and development expenses                                          27                34                 55             67
Interest (note 12)                                                         50                65                100            120
Restructuring, impairment and other special
charges (note 5)                                                            7                 -                 21              -
Other expenses - net (notes 2 and 10)                                      43                54                 50            122
                                                                       ------            ------             ------         ------
                                                                        3,006             2,969              5,780          6,031
                                                                       ------            ------             ------         ------

Income before income taxes and other items                                193               193                356            401
Income taxes (note 8)                                                     122               101                200            159
                                                                       ------            ------             ------         ------

Income before other items                                                  71                92                156            242
Equity income                                                               2                 1                  3              3
Minority interests                                                         (2)               (1)                (2)             -
                                                                       ------            ------             ------         ------

NET INCOME BEFORE AMORTIZATION OF GOODWILL                                 71                92                157            245
Amortization of goodwill (notes 2 and 7)                                    -                18                  -             36
                                                                       ------            ------             ------         ------

NET INCOME                                                                 71                74                157            209
Dividends on preference shares                                              1                 2                  2              4

NET INCOME ATTRIBUTABLE TO
COMMON SHAREHOLDERS                                                        70                72                155            205
                                                                       ------            ------             ------         ------

NET INCOME PER COMMON SHARE BEFORE
AMORTIZATION OF GOODWILL - BASIC                                         0.22              0.28               0.48           0.75
Amortization of goodwill per common share                                   -              0.05                  -           0.11
                                                                       ------            ------             ------         ------

NET INCOME PER COMMON SHARE - BASIC (NOTE 3)                             0.22              0.23               0.48           0.64
                                                                       ------            ------             ------         ------

NET INCOME PER COMMON SHARE - DILUTED (NOTE 3)                           0.22              0.22               0.48           0.64
                                                                       ------            ------             ------         ------

DIVIDENDS PER COMMON SHARE                                               0.15              0.15               0.30           0.30
                                                                       ------            ------             ------         ------


The accompanying notes are an integral part of the interim financial statements.


</Table>

                                       2
<PAGE>


                                   ALCAN INC.

INTERIM CONSOLIDATED STATEMENT OF RETAINED EARNINGS
(unaudited)


<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30 (in millions of US$)                             2002              2001
                                                                         ------            ------

<S>                                                                      <C>               <C>
RETAINED EARNINGS - BEGINNING OF PERIOD

As previously reported                                                     4,095             4,290

Accounting changes (note 2)

- Unamortized exchange loss                                                  (21)              (18)

- Impairment of goodwill as at January 1, 2002                              (748)                -
                                                                          ------            ------
As restated                                                                3,326             4,272



Net income                                                                   157               209



Dividends

- Common                                                                     (96)              (95)

- Preference                                                                  (2)               (4)
                                                                          ------            ------


RETAINED EARNINGS - END OF PERIOD                                          3,385              4,382
                                                                          ======            =======

The accompanying notes are an integral part of the interim financial statements.

</Table>



                                       3
<PAGE>


                                   ALCAN INC.

INTERIM CONSOLIDATED BALANCE SHEET
(unaudited for 2002)


<TABLE>
<CAPTION>
(in millions of US$)                                   June 30, 2002       December 31, 2001
--------------------                                   -------------       -----------------
                                                                          (restated - note 2)

<S>                                                       <C>                  <C>
ASSETS
------
CURRENT ASSETS

Cash and time deposits                                        121                   119

Trade receivables
(net of allowances of $58 in 2002 and $52 in 2001)          1,415                 1,216
Other receivables                                             424                   532

Inventories
 - Aluminum operating segments
    -  Aluminum                                               919                   875
    -  Raw materials                                          401                   413
    -  Other supplies                                         289                   269
                                                          -------               -------
                                                            1,609                 1,557

 - Packaging operating segment                                428                   393
                                                          -------               -------

                                                            2,037                 1,950
                                                          -------               -------


TOTAL CURRENT ASSETS                                        3,997                 3,817
                                                          -------               -------

Deferred charges and other assets                             764                   716

Property, plant and equipment

 - Cost (excluding Construction work in progress)          16,892                16,225
 - Construction work in progress                              666                   613
 - Accumulated depreciation                                (7,599)               (7,136)
                                                          -------               -------

                                                            9,959                 9,702
                                                          -------               -------

Intangible assets, net of accumulated amortization
of $41 in 2002 and $27 in 2001 (note 7)                       311                   298
Goodwill (note 7)                                           2,285                 2,925
                                                          -------               -------

TOTAL ASSETS                                               17,316                17,458
                                                          =======               =======

The accompanying notes are an integral part of the interim financial statements.

</Table>

                                       4
<PAGE>

                                   ALCAN INC.

INTERIM CONSOLIDATED BALANCE SHEET (CONT'D)
(unaudited for 2002)

<TABLE>
<CAPTION>
(in millions of US$)                                   June 30, 2002      December 31, 2001
--------------------                                  --------------      -----------------
                                                                         (restated - note 2)

<S>                                                         <C>            <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES

Payables and accrued liabilities                           2,336                  2,328
Short-term borrowings                                        397                    555
Debt maturing within one year (note 10)                      678                    652
                                                         -------                -------
                                                           3,411                  3,535
                                                         -------                -------

Debt not maturing within one year (note 10)                3,038                  2,884
Deferred credits and other liabilities                     1,253                  1,131
Deferred income taxes                                      1,081                  1,006
Minority interests                                           148                    132


SHAREHOLDERS' EQUITY
Redeemable non-retractable preference shares                 160                    160
Common shareholders' equity
 - Common shares                                           4,698                  4,687
 - Retained earnings                                       3,385                  4,074
 - Deferred translation adjustments                          142                   (151)
                                                         -------                -------
                                                           8,225                  8,610
                                                         -------                -------

Commitments and contingencies (note 11)                    8,385                  8,770
                                                         -------                -------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                17,316                 17,458
                                                         =======                =======

The accompanying notes are an integral part of the interim financial statements.

</Table>


                                       5
<PAGE>


                                   ALCAN INC.

INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)

<TABLE>
<CAPTION>
                                                                            Second Quarter                      Six Months
                                                                       --------------------------          -----------------------
PERIODS ENDED JUNE 30 (in millions of US$)                              2002              2001               2002           2001
                                                                       ------            ------             ------         ------
                                                                               (restated - note 2)               (restated - note 2)
<S>                                                                     <C>            <C>                  <C>             <C>
OPERATING ACTIVITIES

Net income                                                                 71               74               157              209

Adjustments to determine cash from operating activities:
Depreciation and amortization                                             217              204               422              400
Amortization of goodwill                                                    -               18                 -               36
Deferred income taxes                                                      36               17                39              (10)
Asset impairment provisions                                                 9                -                 9                -
Loss on sale of businesses                                                  -               32                 -              122
Change in operating working capital
 - Change in receivables                                                   34              (28)               40              (81)
 - Change in inventories                                                   (9)             (14)               23             (104)
 - Change in payables                                                       5             (115)              (87)            (110)
                                                                         ----              ----             ----            -----
 - Total change in operating
   working capital                                                         30             (157)              (24)            (295)
Change in deferred charges,
other assets, deferred credits
and other liabilities - net                                                40               36                64              (75)
Other-net                                                                  (3)              15                (9)               8
                                                                         ----             ----              ----            -----

CASH FROM OPERATING ACTIVITIES                                            400              239               658              395
                                                                         ====             ====              ====            =====

The accompanying notes are an integral part of the interim financial statements.

</Table>


                                       6
<PAGE>

                                   ALCAN INC.

INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS (CONT'D)
(unaudited)


<TABLE>
<CAPTION>
                                                                            Second Quarter                      Six Months
                                                                       --------------------------          -----------------------
PERIODS ENDED JUNE 30 (in millions of US$)                              2002              2001               2002         2001
                                                                       ------            ------             ------       ------
                                                                               (restated - note 2)               (restated - note 2)
<S>                                                                     <C>            <C>                  <C>             <C>
FINANCING ACTIVITIES

New debt                                                                  51              584               182          1,819
Debt repayments                                                          (21)            (316)             (192)        (1,306)
                                                                        ----             ----              ----         ------
                                                                          30              268               (10)           513
Short-term borrowings - net                                              (49)            (525)             (176)          (274)
Common shares issued                                                       4               44                10             57

Dividends
      - Alcan shareholders
        (including preference)                                           (49)             (49)              (98)           (99)
      - Minority interests                                                (2)              (1)               (3)            (1)
                                                                        ----             ----              ----         ------

CASH FROM (USED FOR) FINANCING ACTIVITIES                                (66)            (263)             (277)           196
                                                                        ----             ----              ----         ------


INVESTMENT ACTIVITIES

Property, plant and equipment                                            (155)            (253)             (262)         (497)
Business acquisitions                                                    (172)             (22)             (172)         (401)
Net proceeds from disposal of businesses,
investments and other assets                                               11              194                47           194
                                                                         ----             ----              ----        ------


CASH USED FOR INVESTMENT ACTIVITIES                                      (316)             (81)             (387)         (704)

Effect of exchange rate changes on cash
and time deposits                                                           7               (2)                8           (10)
                                                                         ----             ----              ----        ------


INCREASE (DECREASE) IN CASH
AND TIME DEPOSITS                                                          25             (107)                2          (123)

Cash and time deposits - beginning of period                               96              245               119           261
                                                                         ----             ----              ----        ------

Cash and time deposits - end of period                                    121              138               121           138
                                                                         ====             ====              ====          ====

The accompanying notes are an integral part of the interim financial statements.

</Table>


                                       7
<PAGE>

                                   ALCAN INC.

               NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                                  JUNE 30, 2002

                                   (UNAUDITED)
                 (in millions of US$, except per share amounts)

1.  ACCOUNTING POLICIES

    The unaudited interim consolidated financial statements are based upon
    accounting policies and methods of their application consistent with those
    used and described in the Company's annual financial statements, except for
    the accounting changes described in note 2. The interim financial statements
    do not include all of the financial statement disclosures included in its
    annual financial statements prepared in accordance with Canadian generally
    accepted accounting principles (GAAP) and therefore should be read in
    conjunction with the most recent annual financial statements.


2.  ACCOUNTING CHANGES

    Goodwill and Other Intangible Assets

    On January 1, 2002, the Company adopted the new standard of the Canadian
    Institute of Chartered Accountants (CICA) concerning goodwill and other
    intangible assets. Under this standard, goodwill and other intangible assets
    with an indefinite life are no longer amortized but are carried at the lower
    of carrying value and fair value. Goodwill and other intangible assets with
    an indefinite life are tested for impairment on an annual basis.

    An impairment of $748 was identified in the goodwill balance as at January
    1, 2002 and was charged to opening retained earnings in 2002. Any further
    impairment arising subsequent to January 1, 2002 will be taken as a charge
    against income. As a result of the new standard, the Company no longer
    amortizes goodwill. In 2001, the amount of goodwill amortization for the
    second quarter and six months was $18 and $36, respectively.

    Business Combinations

    As of January 1, 2002, the Company has adopted the new standard of the CICA
    for business combinations. All business combinations are now required to be
    accounted for under the purchase method.

    Deferred Foreign Exchange Translation Gains and Losses

    As of January 1, 2002, the Company no longer amortizes the exchange gains
    and losses arising on the translation of long-term foreign currency
    denominated monetary assets and liabilities that have a fixed or
    ascertainable life extending beyond the end of the following fiscal year.
    These exchange gains and losses are now absorbed in income immediately.

    This standard has been applied retroactively and consequently, prior years'
    financial statements have been restated. At December 31, 2001, Retained
    earnings have been decreased by $21 (2000: $18) and Deferred charges and
    other assets were reduced by $21 (2000: $18). In the second quarter and six
    months of 2002, an exchange loss of $2 and $4 (2001: nil and $2),
    respectively, on the translation of long-term foreign currency denominated
    assets and liabilities, has been included in Other expenses - net. The
    transfer of an unamortized exchange loss of $21 (2000: $18) to Retained
    earnings from Deferred charges and other assets pertains to the long-term
    foreign currency denominated monetary assets and liabilities that existed at
    each year-end.

                                       8

<PAGE>


2.  ACCOUNTING CHANGES (CONT'D)

    Stock-based Compensation

    The CICA issued a new standard relating to the measurement of stock options
    and other stock-based compensation effective January 1, 2002. This standard
    applies to awards granted after January 1, 2002 and is applied
    prospectively. Also, this standard encourages but does not require that the
    fair value method be used for transactions with employees. The method used
    by the Company is consistent with these new requirements; therefore, the
    Company is continuing to account for stock options granted to employees in
    the same manner as previously done. The Company will continue to provide the
    required disclosures in connection with the fair value method in its annual
    financial statements. Stock compensation arrangements that can be settled in
    cash result in the recognition of compensation expense. If the Company had
    elected to recognize compensation expense for the options using the fair
    value method prescribed by this accounting standard, net income would have
    been reduced by $1 for both the second quarter and six months ended June 30,
    2002. There would have been no impact on net income per common share (basic
    and diluted) for both these periods.

    The fair values of each option grant is estimated on the date of grant using
    the Black-Scholes option pricing model with the following weighted average
    assumptions used for the option grant in the first quarter: dividend yield
    of 1.74%; expected volatility of 34.49%, risk-free interest rate of 4.74%;
    and an expected life of 6 years. The weighted average fair value of options
    granted in the first quarter was $13.04 per share and is being amortized
    over the vesting period.

    Hedging Relationships

    Beginning in 2003, the Company will adopt the new CICA accounting guideline,
    which establishes certain conditions for when hedge accounting may be
    applied. The Company is studying the new guideline but has not yet
    determined its impact.

3.  NET INCOME PER COMMON SHARE

    The following table outlines the calculation of basic and diluted net income
    per common share.

<Table>
<Caption>
                                                                     Second Quarter        Six Months
                                                                    ----------------     ---------------
                                                                     2002       2001      2002      2001
                                                                    -----      -----     -----     -----
<S>                                                                 <C>        <C>       <C>       <C>
    Numerator for basic and diluted net income per common share:

    Net income attributable to common
    shareholders (restated for 2001)                                   70         72        155       205
                                                                    =====      =====      =====     =====

    Denominator (number of common shares in millions):

    Denominator for basic net income per
    common share - weighted average of
    outstanding shares                                                321        320        321       319
    Effect of dilutive stock options                                    2          1          2         1
                                                                    -----      ------     -----     -----
    Denominator for diluted net income per
    common share - adjusted weighted average
    of outstanding shares                                             323        321        323       320
                                                                    =====      ======     =====     =====

    Net income per common share - basic                              0.22       0.23       0.48      0.64
                                                                    -----      ------     -----     -----
    Net income per common share - diluted                            0.22       0.22       0.48      0.64
                                                                    -----      ------     -----     -----
</Table>

    As at June 30, 2002, there were 321,256,890 (2001 : 320,791,232) common
    shares outstanding.

                                       9
<PAGE>


4.  RECONCILIATION OF CANADIAN AND U.S. GAAP

    Differences relate to accounting for foreign currency translation,
    derivatives, post-retirement benefits, "available for sale" securities and
    goodwill impairment identified as at January 1, 2002.

    In 2001, the Company adopted the Financial Accounting Standards Board (FASB)
    Statements 133 and 138. These standards require that all derivatives be
    recorded in the financial statements and valued at market. However, the
    Company has elected not to adopt the FASB's optional hedge accounting
    provisions. Accordingly, for U.S. GAAP reporting purposes only, unrealized
    gains and losses resulting from the valuation of derivatives at market value
    are recognized in net income as the gains and losses arise and not
    concurrently with the recognition of the transactions being hedged. In its
    primary Canadian GAAP financial statements, the Company continues to
    recognize the gains and losses on derivative contracts in income
    concurrently with the recognition of the transactions being hedged. Upon
    initial adoption of the FASB standards in the first quarter of 2001, the
    cumulative effect of the accounting change resulted in a decrease in net
    income of $12.

    On January 1, 2002, the Company adopted FASB Statement 141, "Business
    Combinations", and FASB Statement 142, "Goodwill and Other Intangible
    Assets". Both statements are the same as recently issued Canadian accounting
    standards except that goodwill impairment identified as at January 1, 2002
    was charged to income as a cumulative effect of accounting change. Under
    Canadian GAAP, an impairment loss of $748 was recognized as a charge to
    opening retained earnings in 2002. See note 2, Accounting Changes, for a
    description of the impact on the Company and see note 7, Goodwill and
    Acquired Intangible Assets.

    Beginning in 2002, the Company adopted FASB Statement 144, "Accounting for
    Impairment or Disposal of Long-lived Assets". This statement amends previous
    accounting and disclosure requirements for impairments and disposals of
    long-lived assets. The provisions of this new standard are generally to be
    applied prospectively.

    FASB has recently issued Statement 143, "Accounting for Asset Retirement
    Obligations", which will be effective for the Company's fiscal year
    beginning on January 1, 2003. The Company is studying this new standard but
    has not yet determined its impact.

                                       10
<PAGE>



4.  RECONCILIATION OF CANADIAN AND U.S. GAAP (CONT'D)

    RECONCILIATION OF CANADIAN AND U.S. GAAP

<Table>
<Caption>
                                                                       Second Quarter               Six Months
                                                                     ------------------         ------------------
                                                                      2002         2001         2002          2001
                                                                     -----        -----         -----        -----

<S>                                                                  <C>            <C>          <C>           <C>
    Net income - as reported                                           71             74          157           209
    Differences due to:
     - Valuation of derivatives                                       (13)            15           54           (34)
     - Other                                                            -              5            -             5
                                                                    -----          -----        -----         -----
    Net income from continuing operations before
    cumulative effect of accounting changes - U.S. GAAP                58             94          211           180
    Cumulative effect on prior years of accounting changes
     - Valuation of derivatives                                         -              -            -           (12)
     - Impairment of goodwill                                           -              -         (748)            -
                                                                    -----          -----        -----         -----
    Net income (loss) - U.S. GAAP                                      58             94         (537)          168
                                                                    -----          -----        -----         -----
    Net income attributable to common shareholders
    - as reported                                                      70             72          155           205
                                                                    -----          -----        -----         -----
    Net income per common share - basic                              0.22           0.23         0.48          0.64
    Net income per common share - diluted                            0.22           0.22         0.48          0.64
    Net income attributable to common shareholders
    from continuing operations before cumulative
    effect of accounting changes - U.S. GAAP                           57             92          209           176
                                                                    -----          -----        -----         -----
    Net income per common share - basic                              0.18           0.29         0.65          0.55
    Net income per common share - diluted                            0.17           0.29         0.65          0.55
    Net income (loss) attributable to common shareholders
     - U.S. GAAP                                                       57             92         (539)          164
                                                                    -----          -----        ------        -----
    Net income (loss) per common share - basic
                                                                     0.18           0.29        (1.68)         0.51
    Net income (loss) per common share - diluted
                                                                     0.17           0.29        (1.68)         0.51

</Table>

    The financial statements for the first quarter of 2002 were restated to
    reflect the charge of $748 for the impairment of goodwill. The restatement
    resulted in a net loss of $595 under U.S. GAAP for the first quarter (net
    loss per common share - basic and diluted - of $1.86).


<Table>
<Caption>


    AS AT JUNE 30                                                       2002                         2001
    -------------                                             -------------------------     ------------------------
                                                                 As                         As reported
                                                              reported        U.S. GAAP     (restated)     U.S. GAAP
                                                              --------        ---------     ------------   ---------

<S>                                                               <C>             <C>           <C>          <C>
    Deferred charges and other assets                              764             777           696          721
    Intangible assets, net of accumulated
    amortization                                                   311             329           303          303
    Payables and accrued liabilities                             2,336           2,337         2,226        2,288
    Deferred credits and other liabilities                       1,253           1,599           825          825
    Deferred income taxes                                        1,081             973         1,148        1,123
    Retained earnings                                            3,385           3,435         4,382        4,393
    Deferred translation adjustments                               142              86          (220)        (277)

</Table>

                                       11
<PAGE>





4.  RECONCILIATION OF CANADIAN AND U.S. GAAP (CONT'D)


<Table>
<Caption>
                                                                                 Second Quarter                 Six Months
                                                                               --------------------          ------------------
    COMPREHENSIVE INCOME (LOSS)                                                2002            2001           2002         2001
                                                                               -----           ----          -----         ----

 <S>                                                                           <C>             <C>          <C>           <C>
    Net income (loss)                                                            58              94          (537)          168
    Net change in unrealized deferred
    translation adjustments                                                     278             (60)          286          (201)
    Net change in excess of market value over
    book value of available-for-sale securities                                   6              12            10            11
    Net change in minimum liability for
    post-retirement benefits                                                    (77)              -           (77)            -
                                                                               ----            ----         -----          ----
    Comprehensive income (loss)                                                 265              46          (318)          (22)
                                                                               ====            ====         =====          ====
</Table>


<Table>
<Caption>

                                                                                                               Six Months
                                                                                                            -----------------
    ACCUMULATED OTHER COMPREHENSIVE LOSS                                                                     2002        2001
                                                                                                             ----        ----

   <S>                                                                                                      <C>         <C>
    Accumulated other comprehensive loss - beginning of year                                                 (347)        (61)
    Net change in unrealized deferred translation adjustments                                                 286        (201)
    Deferred translation adjustments realized in net income                                                     7           -
    Net change in excess of market value over book value of available-for-sale securities                      10          11
    Net change in minimum liability for post-retirement benefits                                              (77)          -
                                                                                                            -----       -----
    Accumulated other comprehensive loss - June 30                                                           (121)       (251)
                                                                                                            =====       =====
</Table>

    As at June 30, 2002, Accumulated other comprehensive loss is comprised of
    deferred translation adjustments of $86, minimum pension liability of
    $(225) and unrealized gain on "available for sale" securities of $18.

                                      12

<PAGE>


5.  RESTRUCTURING, IMPAIRMENT AND OTHER SPECIAL CHARGES

    Restructuring, impairment and other special charges of $657 pre-tax, which
    were recorded in the fourth quarter of 2001, included restructuring and
    asset impairment charges of $411 and other special charges of $246.

    Restructuring and asset impairment charges

    In the fourth quarter of 2001, the Company recorded charges of $411 pre-tax
    in Restructuring, impairment and other special charges as a result of a
    restructuring program aimed at safeguarding its competitiveness. The aim of
    the restructuring program was twofold: to make the businesses more
    competitive in the face of the current economic difficulties; and to put
    them in the best position to meet future industry needs. These aims will be
    achieved through cost reduction measures, exiting from non-core products and
    the consolidation of certain operations and will result in a series of plant
    sales, closures and divestments throughout the organization. The charges
    associated with this program consist of severance costs of $112 related to
    workforce reductions of approximately 2,200 employees, impairment of
    long-lived assets of $269 and other exit costs related to the shutdown of
    facilities of $30.

    The workforce reductions, which consist principally of manufacturing
    employees from all segments of the Company's worldwide operations, are
    comprised of:

    - 500 employees - Primary Metal (principally Canada)

    - 200 employees - Rolled Products, Americas and Asia

    - 400 employees - Rolled Products, Europe (U.K. and Switzerland)

    - 800 employees - Packaging (U.K., Canada, U.S. and other areas)

    - 300 employees - Other operating segments

    In the second quarter of 2002, the Company recorded additional severance
    charges of $14 pre-tax in Restructuring, impairment and other special
    charges principally relating to the closure of its Bracebridge plant in
    Ontario, Canada (part of Engineered Products). Included in the charge of $14
    is a non-cash expense of $5 relating to pension costs. Corresponding
    workforce reductions of approximately 300 employees were comprised of 200
    employees in Engineered Products (including 162 employees relating to the
    closure of the Bracebridge plant) and 100 employees in Packaging. Also
    recorded in Restructuring, impairment and other special charges in the
    second quarter of 2002 was a gain of $3 pre-tax on the sale of an
    investment.

                                       13
<PAGE>

5.  RESTRUCTURING, IMPAIRMENT AND OTHER SPECIAL CHARGES (CONT'D)

    As at June 30, 2002, approximately 1,400 of a total of 2,500 employees had
    been terminated, consisting of approximately 400 employees in the fourth
    quarter of 2001 and 1,000 employees in the first six months of 2002.

    In the first quarter of 2002, the Company recorded charges of $14 pre-tax in
    Restructuring, impairment and other special charges related to the
    restructuring program. The charges consisted of impairment for long-lived
    assets of $9 related to the exit from non-core products at its Borgofranco
    plant in Italy (part of Rolled Products, Europe) and a loss of $5 on the
    sale of the Company's extrusion operations in Thailand arising principally
    from the realization of deferred translation losses.

    Total impairment charges of $278 consisted of a charge of $269 in 2001 and a
    charge of $9 in the first quarter of 2002 and related principally to
    buildings, machinery and equipment and some previously capitalized project
    costs. The charge consisted of $187 related to assets to be held and used
    and $91 for assets held for disposal.

    The impairment charge for assets to be held and used consisted of $5 for
    Bauxite, Alumina and Specialty Chemicals; $22 for Primary Metal; $14 for
    Rolled Products, Americas and Asia; $79 for Rolled Products, Europe; $3 for
    Engineered Products; $43 for Packaging; and $21 for Other. In the context of
    the Company's objective of value maximization, a detailed business portfolio
    review was undertaken to identify high cost operations, excess capacity and
    non-core products. The impairment charge for assets held and used arose as a
    result of negative projected cash flows and recurring losses. The charges
    principally related to the cold mill at the Rogerstone plant in the U.K.
    (Rolled Products, Europe); the foil facilities at Glasgow, U.K. (Packaging);
    and the engineered cast products plant in Quebec (Primary Metal). An
    impairment provision was recorded to the extent that the net recoverable
    amount, which approximates fair value based on discounted cash flows, was
    below the net book value.

    The impairment charge for assets held for disposal consisted of $40 for
    Bauxite, Alumina and Specialty Chemicals; $8 for Rolled Products, Americas
    and Asia; $31 for Rolled Products, Europe; and $12 for Packaging. In the
    context of the Company's objective of value maximization, a detailed
    business portfolio review was undertaken to identify high cost operations,
    excess capacity and non-core products. The charges principally related to
    the specialty chemicals plant at Burntisland, U.K. (Bauxite, Alumina and
    Specialty Chemicals); the extrusion operations in Malaysia and Thailand
    (Rolled Products, Americas and Asia); certain rolled products and recycling
    operations at the Pieve and Borgofranco plants in Italy (Rolled Products,
    Europe); and the Pharmatech rubber stopper and aluminum seals operations in
    the U.S. (Packaging). An impairment provision was recorded to bring the net
    book value to net realizable value. These assets are expected to be disposed
    of by the end of 2002. The assets held for disposal had:

    - sales and operating revenues of $290 in 2001 (Bauxite, Alumina and
      Specialty Chemicals - $40; Rolled Products, Americas and Asia - $30;
      Rolled Products, Europe - $90; Packaging - $130) and $64 and $140 in the
      second quarter and six months of 2002, respectively (Bauxite, Alumina and
      Specialty Chemicals - $9 and $19; Rolled Products, Americas and Asia - $3
      and $13; Rolled Products, Europe - $24 and $50; and Packaging - $28 and
      $58).

    - net operating losses of $(20) in 2001 (Bauxite, Alumina and Specialty
      Chemicals - $(10); Packaging - $(10)) and $(4) and $(7) in the second
      quarter and six months of 2002, respectively (Bauxite, Alumina and
      Specialty Chemicals - $(3) and $(5); and Packaging $(1) and $(2)).

    - assets of $220 at December 2001 (Bauxite, Alumina and Specialty Chemicals
      - $20; Rolled Products, Americas and Asia - $20; Rolled Products, Europe -
      $100; Packaging - $80) and $190 at June 2002 (Bauxite, Alumina and
      Specialty Chemicals - $20; Rolled Products, Americas and Asia - $10;
      Rolled Products, Europe - $90; and Packaging - $70).



                                       14
<PAGE>

5.  RESTRUCTURING, IMPAIRMENT AND OTHER SPECIAL CHARGES (CONT'D)

    -   liabilities of $130 at December 2001 (Bauxite, Alumina and Specialty
        Chemicals - $20; Rolled Products, Americas and Asia - $10; Rolled
        Products, Europe - $30; Packaging - $70) and $130 at June 2002 (Bauxite,
        Alumina and Specialty Chemicals - $15; Rolled Products, Americas and
        Asia - $5; Rolled Products, Europe - $40; and Packaging - $70).

    The restructuring program is expected to be completed in 2002, with the
    exception of the shutdown of the cold mill at the Rogerstone plant in the
    U.K. in early 2003 and the closure of facilities at Glasgow, U.K. in
    mid-2003 as scheduled per the Company's plans. The closure plans include the
    orderly shutdown of facilities after existing customer requirements have
    been satisfied and in some situations, the transfer of production operations
    to other facilities. Of the reserve balance at June 30, 2002 of $105,
    approximately $13 will be paid out in 2003.

    The reserve balance and related cash payments for the restructuring and
    asset impairment charges consisted of :

<TABLE>
<CAPTION>

                                                     IMPAIRMENT
                                                         OF
                                         SEVERANCE   LONG-LIVED
                                           COSTS       ASSETS       OTHER      TOTAL
                                         ---------   ----------    -------     -----
<S>                                      <C>           <C>          <C>        <C>
     2001:
     Charges                               112           269          30         411
     Cash payments                          (7)            -          (7)        (14)
     Non-cash charges                        -          (269)          -        (269)
                                          ----          ----        ----        ----
     Reserve balance as at December 31     105             -          23         128

     2002:
     Charges                                14             9           2          25
     Cash payments                         (28)            -          (4)        (32)
     Non-cash charges                       (5)           (9)         (2)        (16)
                                          ----          ----        ----        ----
     Reserve balance as at June 30          86             -          19         105
                                          ====          ====        ====        ====
</TABLE>

    Other Special Charges

    In 2001, the Company increased its environmental reserves by $246 pre-tax to
    cover treatment costs of $150 for stored spent potlining (SPL) in Quebec and
    British Columbia, Canada, as well as to cover remediation costs of $96
    relating to red mud disposal and other sites in Canada and the United
    Kingdom. The charges were recorded on the income statement in Restructuring,
    impairment and other special charges and on the balance sheet, in Deferred
    credits and other liabilities ($235) and in Payables and accrued liabilities
    ($11).

    In the second quarter of 2002, a write-back of $4 pre-tax for a portion of
    the environmental reserve relating to spent potlining that is recoverable
    was recorded on the income statement in Restructuring, impairment and other
    special charges and on the balance sheet, in Other receivables.

    SPL, which is a waste material generated by the smelting process, needs to
    be treated in a safe and environmentally sound manner. The Company's
    objectives have been to find the best alternative to stockpiling SPL and
    various technical studies were carried out to identify treatment
    alternatives that are economically viable. Following these studies, which
    were completed in 2001, and in accordance with local laws and regulations,
    the Company intends to initiate a treatment program of all stored SPL. The
    liability of $150 reflected the Company's best estimate of the cost to treat
    the stored SPL in Quebec and to have the SPL in British Columbia treated by
    a third party. The amounts will be paid over the next twenty years.

    The liability of $96 relating to red mud and other disposal sites reflected
    the Company's best estimate of the cost of rehabilitation. Red mud is the
    normal residue associated with extracting alumina from bauxite. The charge
    represents the cost to fill and seal the sites.

                                       15
<PAGE>
6.  INTERIM INFORMATION BY OPERATING SEGMENT

    The following presents selected information by operating segment, viewed on
    a stand-alone basis. Effective January 1, 2002, a new operating management
    structure was put in place comprised of six operating segments. The six
    operating segments are Bauxite, Alumina and Specialty Chemicals; Primary
    Metal; Rolled Products, Americas and Asia; Rolled Products, Europe;
    Engineered Products; and Packaging. Prior to 2002, there were four operating
    segments: Primary Metal; Aluminum Fabrication, Americas and Asia; Aluminum
    Fabrication, Europe; and Packaging. Comparative information has been
    restated to conform to the 2002 organizational structure. Transactions
    between operating segments are conducted on an arm's-length basis and
    reflect market prices. Thus, earnings from the Primary Metal group represent
    mainly profit on metal produced by the Company, whether sold to third
    parties or used in the Company's Rolled Products, Engineered Products and
    Packaging groups. Earnings from the Rolled Products, Engineered Products and
    Packaging groups represent only the fabricating profit on rolled, engineered
    and packaging products. The accounting principles used to prepare the
    information by operating segment are the same as those used to prepare the
    consolidated financial statements of the Company except that the pension
    costs for the operating segments are based on the normal current service
    cost with all actuarial gains, losses and other adjustments being included
    in Intersegment and other. Some corporate office and certain other costs
    have been allocated to the respective operating segments. The operating
    segments are described below.

    Bauxite, Alumina and Specialty Chemicals

    This segment consists of a network of bauxite mines/deposits in five
    countries and alumina refineries in four countries, which supplies the
    primary metal operations and third-party sales of alumina and specialty
    chemicals.

    Primary Metal

    This segment produces primary aluminum in seven countries. The alumina is
    sourced primarily from the Bauxite, Alumina and Specialty Chemicals segment
    and the ingot produced is used by the Company's fabricating businesses as
    well as sold to third-parties. The segment produces value-added products in
    the form of sheet ingot, extrusion billet, wire bar and foundry ingot for
    end-use markets in consumer goods, transportation, building and construction
    and other industrial applications.

    Rolled Products, Americas and Asia

    This segment, which has an extensive network of 17 rolled products
    facilities in North and South America and Asia, manufactures sheet and
    light-gauge products, including can stock, automotive sheet and industrial
    products. In addition the segment has a well-established used beverage can
    recycling capability in North and South America.

    Rolled Products, Europe

    This segment has nine rolled products plants and serves a number of European
    markets with advanced value-added sheet products, including automotive
    sheet, lithographic sheet, industrial sheet, can sheet and foil stock.

    Engineered Products

    This segment develops, manufactures and sells value-added engineered
    products for a variety of applications, including extrusions, composites,
    systems and components for mass transportation and automotive applications
    and electrical cables.

    Packaging

    This segment has 84 plants in 15 countries and is focused on serving
    specific end-use markets: food, pharmaceutical, tobacco, cosmetics and some
    technical applications.

    Intersegment and other

    This classification includes the deferral or realization of profits on
    intersegment sales of aluminum as well as other non-operating items.

                                       16

<PAGE>


6.  INTERIM INFORMATION BY OPERATING SEGMENT (CONT'D)

    PERIODS ENDED JUNE 30

<Table>
<Caption>
    SALES AND OPERATING REVENUES - INTERSEGMENT                               Second Quarter                 Six Months
                                                                            ------------------        ----------------------
                                                                            2002          2001          2002           2001
                                                                            -----        -----        -------          -----
    <S>                                                                     <C>           <C>         <C>              <C>
    Bauxite, Alumina and Specialty Chemicals                                 187           207            374            389
    Primary Metal                                                            575           576          1,115          1,196
    Rolled Products, Americas and Asia                                        42            47             90             96
    Rolled Products, Europe                                                   83            80            153            192
    Engineered Products                                                        3            (5)             9             10
    Packaging                                                                  6            17             11             34
    Intersegment and other                                                  (896)         (922)        (1,752)        (1,917)
                                                                           -----         -----         ------         ------
                                                                               -             -              -              -
                                                                           =====         =====         ======         ======
</Table>

<Table>
<Caption>
    SALES AND OPERATING REVENUES - THIRD PARTIES                              Second Quarter                 Six Months
                                                                            ------------------        ----------------------
                                                                            2002          2001          2002           2001
                                                                            -----        -----        -------          -----
    <S>                                                                     <C>           <C>         <C>              <C>
    Bauxite, Alumina and Specialty Chemicals                                111            113            212            253
    Primary Metal                                                           615            592          1,176          1,168
    Rolled Products, Americas and Asia                                      857            855          1,639          1,728
    Rolled Products, Europe                                                 474            452            885            947
    Engineered Products                                                     430            424            828            863
    Packaging                                                               698            720          1,372          1,461
    Other                                                                    14              6             24             12
                                                                          -----          -----         ------         ------
                                                                          3,199          3,162          6,136          6,432
                                                                          =====          =====         ======          =====
</Table>


<Table>
<Caption>
    EBITDA                                                                   Second Quarter                 Six Months
                                                                           -------------------          ---------------------
                                                                            2002          2001           2002           2001
                                                                           -----         -----          ------          -----
    <S>                                                                      <C>           <C>         <C>              <C>
    Bauxite, Alumina and Specialty Chemicals                                  63             79            127            179
    Primary Metal                                                            211            208            425            457
    Rolled Products, Americas and Asia                                        94             76            186            162
    Rolled Products, Europe                                                   35             39             65             77
    Engineering Products                                                      27             24             54             58
    Packaging                                                                 93             92            169            178
                                                                           -----          -----          -----          -----

    EBITDA from operating segments                                           523            518          1,026          1,111

    Depreciation and amortization                                           (217)          (204)          (422)          (400)
    Restructuring, impairment
    and other special charges                                                 (7)             -            (21)             -
    Intersegment and other                                                   (28)           (37)           (74)          (155)
    Corporate office                                                         (26)           (18)           (50)           (32)
    Interest                                                                 (50)           (65)          (100)          (120)
    Income taxes                                                            (122)          (101)          (200)          (159)
    Minority interests                                                        (2)            (1)            (2)             -
                                                                           -----          -----          -----          -----
    NET INCOME BEFORE AMORTIZATION OF GOODWILL                                71             92            157            245
                                                                           -----          -----          -----          -----
    NET INCOME AFTER AMORTIZATION OF GOODWILL                                 71             74            157            209
                                                                           -----          -----          -----          -----
</Table>
                                      17
<PAGE>

7.  GOODWILL AND ACQUIRED INTANGIBLE ASSETS

    GOODWILL

    The changes in the carrying amount of goodwill for the period ended June 30,
    2002, are as follows:

    <TABLE>
     <CAPTION>
                                              Balance                                                    Balance
                                               as at                                                      as at
                                             January 1,          Impairment                             June 30,
                                                2002               losses           Exchange              2002
                                            -----------          ----------         --------            --------
     <S>                                       <C>                  <C>                <C>                 <C>
     Bauxite, Alumina and
     Specialty Chemicals                         543                  -                  -                  543
     Primary Metal                               426                  -                 33                  459
     Rolled Products, Europe                     163                163                  -                    -
     Engineered Products                         466                321                 12                  157
     Packaging                                 1,306                264                 63                1,105
     Other                                        21                  -                  -                   21
                                            -----------          ----------         --------            --------
     Total                                     2,925                748                108                2,285
                                            ===========          ==========         ========            ========

    </TABLE>

    There were no additions to goodwill in the six month period ended June 30,
    2002.

    The Company completed a review to determine whether, at January 1, 2002,
    there was impairment in the goodwill balance. As a result of this review, an
    impairment loss of $748 was recognized as a charge to opening retained
    earnings in 2002. The adjustment reflects the decline in end-market
    conditions in the period from the algroup merger in October 2000 to January
    1, 2002. The fair value of all reporting units was determined using
    discounted future cash flows.

    In 2001, changes in the carrying amount of goodwill for the year ended
    December 31, 2001 were as follows:

    <TABLE>
     <S>                                                                                     <C>
     Goodwill, net of accumulated amortization of $17 as at January 1, 2001                 2,669
     - Additions                                                                              394
     - Exchange                                                                               (62)
     - Amortization                                                                           (73)
     - Amount related to disposal of business                                                  (3)
                                                                                            -----
     Goodwill, net of accumulated amortization of $92 as at December 31, 2001               2,925
                                                                                            =====
    </Table>

    ACQUIRED AMORTIZED INTANGIBLE ASSETS

    <TABLE>
     <CAPTION>
                                               June 30, 2002                              December 31, 2001
                                  --------------------------------------       --------------------------------------
                                   Gross                           Net          Gross                           Net
                                  Carrying      Accumulated        Book        Carrying      Accumulated        Book
                                   Amount       Amortization       Value        Amount       Amortization       Value
                                  --------      ------------       -----       --------      ------------       -----

     <S>                             <C>             <C>             <C>           <C>            <C>            <C>
     Trademarks                      138             16             122           127             11             116

     Patented and
     non-patented technology         214             25             189           198             16             182
                                  --------      ------------       -----       --------      ------------       -----

     Total                           352             41             311           325             27             298
                                  ========      ============       =====       ========      ============       =====
    </Table>
                                       18


<PAGE>


7.  GOODWILL AND ACQUIRED INTANGIBLE ASSETS (CONT'D)

    The aggregate amortization expenses for the second quarter and six months
    ended June 30, 2002 were $6 and $11 (excluding deferred translation gains of
    nil and $3), respectively. The estimated amortization expense for the five
    succeeding fiscal years is approximately $22 per year.

    There were no acquisitions of intangible assets in the six month period
    ended June 30, 2002.

    GOODWILL AND OTHER INTANGIBLE ASSETS

<TABLE>
<CAPTION>

     For periods ended June 30                                     Second Quarter                           Six Months
                                                              --------------------------               ----------------------
                                                              2002                 2001                2002              2001
                                                              ------               -----               ----              ----
<S>                                                           <C>                  <C>                 <C>                <C>

     Reported net income                                          71                  74                157               209
     Add : Goodwill amortization                                   -                  18                  -                36
                                                              ------               -----               ----              ----

     Adjusted net income                                          71                  92                157               245
                                                              ======               =====               ====              ====

     Basic earnings per share:
     Reported net income                                        0.22                0.23               0.48              0.64
     Goodwill amortization                                         -                0.05                  -              0.11
                                                              ------               -----               ----              ----

     Adjusted net income                                        0.22                0.28               0.48              0.75
                                                              ======               =====               ====              ====

     Diluted earnings per share:
     Reported net income                                        0.22                0.22               0.48              0.64
     Goodwill amortization                                         -                0.05                  -              0.11
                                                              ------               -----               ----              ----
     Adjusted net income                                        0.22                0.27               0.48              0.75
                                                              ======               ======              =====             ====
</TABLE>


8.  INCOME TAXES
<TABLE>
<CAPTION>
                                                                   Second Quarter                           Six Months
                                                              --------------------------               ----------------------
                                                              2002                 2001                2002              2001
                                                              ----                 ----                ----              ----
<S>                                                           <C>                  <C>                 <C>                <C>
    Current                                                     86                   84                 161               169
    Deferred                                                    36                   17                  39               (10)
                                                              ----                 ----                ----              ----
                                                               122                  101                 200               159
                                                              ====                 ====                ====              ====
</TABLE>

    The composite of the applicable statutory corporate income tax rates in
    Canada is 39.4% (40.1% for 2001). The difference between income taxes
    calculated at the Canadian composite rate and the amounts shown as reported
    is primarily attributable to exchange. In 2001, the difference is primarily
    attributable to lower tax rates in foreign jurisdictions and reduced rate or
    tax-exempt items, partially offset by the impact of potential future tax
    benefits that were not recognized since their realization is not likely.


9.  SUPPLEMENTARY INFORMATION
<TABLE>
<CAPTION>
    STATEMENT OF CASH FLOWS                                       Second Quarter                           Six Months
    -----------------------                                  --------------------------               ----------------------
                                                              2002                 2001                2002              2001
                                                              ----                 ----                ----              ----
<S>                                                           <C>                  <C>                 <C>                <C>
    Interest paid                                               61                   98                 118               161
    Income taxes paid                                          112                  126                  65               159
</TABLE>

                                       19


<PAGE>


10.   LONG TERM DEBT

      On January 15, 2002, the Company redeemed all of its outstanding 8.875%
      $150 debentures originally due on January 15, 2022. The redemption was at
      a price of 104.15%. A loss of $6 was recorded in Other expenses - net in
      the first quarter of 2002.

      The new debt of $51 and $182 in the second quarter and six months of 2002,
      respectively, principally relates to an increase in commercial paper
      borrowings.

11.   COMMITMENTS AND CONTINGENCIES

      In 1997, as part of the claim settlement arrangements related to the
      British Columbia Government's cancellation of the Kemano Completion
      Project, the Company obtained the right to transfer a portion of a power
      supply contract with BC Hydro to a third party. The Company sold the right
      to supply this portion to Enron Power Marketing Inc. (EPMI), a subsidiary
      of Enron Corporation (Enron) for cash consideration. In order to obtain
      the consent of BC Hydro to this sale, the Company was required to retain a
      residual obligation for EPMI's performance of the power supply contract in
      the event that EPMI became unable to perform. This contingent obligation
      is subject to a maximum aggregate amount of $100, with mitigation and
      subrogation rights. On December 2, 2001, EPMI and Enron filed for
      protection under Chapter 11 of the U.S. Bankruptcy Code. Powerex Corp.,
      the BC Hydro affiliate which now holds the rights to the portion of the
      power supply contract transferred to EPMI, maintains that it has
      terminated the power supply contract and as result has filed a claim for
      $100 against Enron on March 15, 2002 as a necessary step prior to making
      the same claim against the Company. Neither Enron nor EPMI responded to
      that claim and the Company received, on March 22, 2002, a demand for
      payment in the amount of $100 from Powerex Corp. The Company disputes its
      obligation to pay on the demand by Powerex Corp. and is currently
      defending itself in an arbitration initiated by Powerex Corp. with a
      hearing date scheduled for December 2002. The Company is unable to
      estimate reasonably the amount of the contingent loss which might arise in
      respect of this matter and is contesting the claim on substantive and
      procedural grounds as well as by reason of inadequate mitigation efforts.
      In any event, the Company is of the view that any residual obligations,
      which it may have as a result of its assignment of the power supply
      agreement to EPMI in 1997 would relate to the supply of power and not be
      in the form of a financial obligation.

      Alcan, in the course of its operations, is subject to environmental and
      other claims, lawsuits and contingencies. The Company has environmental
      contingencies relating to approximately 30 existing and former Alcan sites
      and third-party sites. Accruals have been made in specific instances where
      it is probable that liabilities will be incurred and where such
      liabilities can be reasonably estimated.

      Although it is possible that liabilities may arise in other instances for
      which no accruals have been made, the Company does not believe that such
      an outcome will significantly impair its operations or have a material
      adverse effect on its financial position.

12.   CAPITALIZATION OF INTEREST COSTS

      Total interest costs in the second quarter and six months of 2002 were $50
      and $100 respectively (2001: $73 and $148) of which none were capitalized
      in 2002 (2001: $8 and $28).

13.   ACQUISITION OF A 20% INTEREST IN THE ALUMINERIE ALOUETTE CONSORTIUM

      On April 24, 2002, the Company announced that it had completed the
      acquisition of the Societe generale de financement (SGF) 20% interest in
      the Aluminerie Alouette consortium at a cost of approximately $172,
      subject to post-closing adjustments. The Company is in the process of
      determining the allocation of the purchase price in the accounts to the
      fair values of the assets acquired and liabilities assumed.

                                       20

<PAGE>


14.   PRIOR PERIOD AMOUNTS

      Certain prior period amounts have been reclassified to conform with the
      2002 presentation.

In the opinion of management, all adjustments necessary for a fair presentation
of interim period results have been included in the financial statements. These
interim results are not necessarily indicative of results for the full year.

                                       21


<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

The Company reported second quarter earnings per share, excluding non-recurring
items and foreign currency balance sheet translation effects, of US$0.46 per
share compared to US$0.41 per share in the second quarter of 2001 and US$0.33
per share in the first quarter of 2002.

Including non-recurring items and foreign currency balance sheet translation
effects, net income under Canadian generally accepted accounting principles
(GAAP) for the quarter was US$0.22 per share compared to US$0.23 per share in
the second quarter of 2001 and US$0.26 per share in the previous quarter.

With aluminum prices unchanged from the first quarter, the Company's higher
operating earnings were a direct result of its continued focus on cost control
and improving volumes, while cash flows also reflected continued financial
discipline.

The results for the second quarter of 2002 included a net non-recurring
after-tax charge of US$8 million (US$0.03 per share) which related mainly to the
restructuring program announced on October 17, 2001. The current quarter also
included an after-tax US$70 million loss (US$0.21 per share) for foreign
currency balance sheet translation effects resulting principally from the
strengthening of the Canadian and Australian currencies against the U.S. dollar.
Non-recurring after-tax charges and foreign currency balance sheet translation
effects were US$54 million (US$0.18 per share) in the year-ago quarter and US$21
million (US$0.07 per share) in the first quarter of 2002.

For the first six months of 2002, net income per share under GAAP was US$0.48
compared to US$0.64 for the comparable period of 2001. Excluding non-recurring
items and foreign currency balance sheet translation effects, earnings per share
were US$0.79 compared to US$0.91 during the first six months of 2001.

                                       22
<PAGE>


CONSOLIDATED REVIEW

<TABLE>
<CAPTION>
                                                                     SECOND QUARTER              SIX MONTHS         FIRST QUARTER
                                                                   ------------------         ----------------      -------------
(US$ millions, unless otherwise noted)                              2002         2001         2002         2001           2002
                                                                   -----        -----         ----        -----          -----

<S>                                                                <C>           <C>          <C>          <C>           <C>
Sales & operating revenues                                          3,199        3,162        6,136        6,432          2,937

Shipments (thousands of tonnes)

     Ingot products1                                                  359          342          674          653            315
     Rolled products                                                  528          493        1,025        1,012            497
     Conversion of customer-owned metal                                95           87          170          178             75
     Aluminum used in engineered products & packaging                 152          129          278          300            126

Total aluminum volume                                               1,134        1,051        2,147        2,143          1,013

Ingot product realizations (US$ per tonne)                          1,536        1,628        1,518        1,651          1,497

Rolled product realizations (US$ per tonne)2                        2,311        2,409        2,278        2,427          2,250

Average London Metal Exchange 3-month price (US$ per tonne)         1,377        1,511        1,386        1,536          1,395

Net income excluding non-recurring items and foreign currency
balance sheet translation                                             149          128          256          291            107
     Non-recurring items                                               (8)         (17)         (15)         (87)            (7)
     Foreign currency balance sheet translation                       (70)         (37)         (84)           5            (14)

Net income including non-recurring items and foreign currency
balance sheet translation                                              71           74          157          209             86
Economic Value Added (EVA(R))                                        (167)        (110)        (365)        (158)          (198)

1 Includes primary and secondary ingot and scrap, as well as shipments resulting
  from metal trading activities
2 Excluding conversion of customer owned metal
(R)EVA is a registered trademark of Stern, Stewart & Company

</TABLE>


Largely as a result of higher volumes in most business segments, sales and
operating revenues for the quarter increased by 1% compared to the year-ago
quarter, despite significantly lower LME aluminum prices. As compared to the
previous quarter, both higher shipments in all areas and slightly higher ingot
and rolled product prices contributed to the increase in sales and operating
revenues.

Total aluminum volume was 1,134 thousand tonnes (kt) in the quarter, compared to
1,051 kt a year earlier and to 1,013 kt in the preceding quarter. Year over
year, the additional volume was from the new smelter in Alma, Quebec and the
Company's newly acquired 20% interest in the Alouette smelter, also in Quebec.
As compared to the previous quarter, the increase in volume was mainly due to
additional metal purchased for resale and production from the Alouette smelter.

Ingot product realizations of US$1,536 per tonne fell by 6% from the year-ago
quarter in line with a 9% decrease in the London Metal Exchange (LME) price.
Compared to the previous quarter, ingot product realizations increased by 3%
versus a 1% decrease in the LME price.

Rolled product realizations of US$2,311 per tonne were 4% lower than the
year-ago quarter and 3% above the previous quarter.

                                       23

<PAGE>
For the quarter, the net income under GAAP of US$71 million compares to a net
income of US$74 million in the year-ago quarter and to US$86 million in the
previous quarter. The comparable results to the year-ago quarter were primarily
due to improvements from the Company's restructuring and merger-related
synergies programs, higher volumes, lower interest expense and the absence of
goodwill amortization, offset by lower LME related ingot product realizations
and the unfavourable effects of foreign currency balance sheet translation. As
compared to the previous quarter, the US$15 million decrease was a result of
higher volumes that were more than offset by the unfavourable effects of foreign
currency balance sheet translation.

In 2002, the Company adopted the new accounting standard dealing with goodwill.
As a result of this change in accounting, goodwill is no longer being amortized.
This had a positive impact of US$0.05 per share in the second quarter and
US$0.06 per share in the previous quarter. Also under this standard, the Company
completed a review of goodwill and recorded an impairment charge of US$748
million as a reduction in opening retained earnings as of January 1, 2002. The
adjustment reflects the decline in end-market conditions in the period from the
algroup merger in October 2000 to January 1, 2002. This adjustment will have no
impact on the future growth of the Company, nor will it affect its cash flow.

SEGMENT REVIEW

<TABLE>
<CAPTION>
                                                                     SECOND QUARTER              SIX MONTHS           FIRST QUARTER
                                                                    ----------------          -----------------       -------------
(US$ millions)                                                      2002        2001          2002          2001           2002
                                                                    ----        ----          ----          ----           ----

<S>                                                                 <C>         <C>           <C>          <C>            <C>
EBITDA

     Bauxite, Alumina and Specialty Chemicals                         63          79           127           179            64
     Primary Metal                                                   211         208           425           457           214
     Rolled Products, Americas and Asia                               94          76           186           162            92
     Rolled Products, Europe                                          35          39            65            77            30
     Engineered Products                                              27          24            54            58            27
     Packaging                                                        93          92           169           178            76

EBITDA from operating segments                                       523         518         1,026         1,111           503

     Depreciation & amortization                                    (217)       (204)         (422)         (400)         (205)
     Restructuring, impairment and other special charges              (7)          -           (21)            -           (14)
     Intersegment and other                                          (28)        (37)          (74)         (155)          (46)
     Corporate offices                                               (26)        (18)          (50)          (32)          (24)
     Interest                                                        (50)        (65)         (100)         (120)          (50)
     Income taxes                                                   (122)       (101)         (200)         (159)          (78)
     Minority interests                                               (2)         (1)           (2)            -             -

Net income before goodwill amortization                               71          92           157           245            86

Net income after goodwill amortization                                71          74           157           209            86
</TABLE>

Second quarter earnings before interest, taxes, depreciation and amortization
(EBITDA) for Bauxite, Alumina and Specialty Chemicals were lower than in the
previous year, reflecting lower selling prices for alumina and bauxite and the
divestiture of Jamaican operations, partially offset by lower production costs.
EBITDA of US$63 million was unchanged from the preceding quarter.

For Primary Metal, EBITDA of US$211 million increased slightly compared to the
year-ago quarter due mainly to lower costs, better performance at the Alma
smelter, as well as the addition of Alouette. These were largely offset by lower
LME related ingot prices and the unfavourable effects of foreign currency
balance sheet translation. Compared to the preceding quarter, EBITDA was

                                       24

<PAGE>
essentially unchanged as higher volumes and prices were offset by the
unfavourable effects of foreign currency balance sheet translation.

EBITDA for Rolled Products, Americas and Asia, at US$94 million, was 24% higher
than in the previous year largely as a result of higher volumes in North America
and Asia along with the effective implementation of ongoing cost reduction
initiatives. Compared to the preceding quarter, EBITDA increased by 2% driven by
volume increases in North America and Asia which more than offset the time lag
in passing the change in metal prices to certain customers.

For Rolled Products, Europe, EBITDA at US$35 million was US$4 million lower than
in the previous year. Beneficial effects of higher shipments and a stronger Euro
were offset by metal valuation losses and higher wage settlements. Compared to
the first quarter of 2002, EBITDA increased by US$5 million, due mainly to
higher shipments and the strengthening Euro.

EBITDA for Engineered Products of US$27 million was US$3 million higher than in
the previous year, with no change compared to the first quarter of 2002.

Packaging Group EBITDA of US$93 million was slightly improved over the same
quarter in 2001 when market conditions were more robust, but represented a
significant improvement over the US$76 million reported in the previous quarter.
The improvement was driven both by recovering business volumes following the
downturn of the last 3 quarters, the ramp-up of benefits from restructuring,
other cost reduction programs and merger synergies, as well as a stronger Euro.

Depreciation and amortization of US$217 million was 6% higher than the year-ago
quarter largely due to the Alma smelter which reached full capacity during the
fourth quarter of 2001, as well as the acquisition of a 20% interest in the
Alouette smelter. As compared to the previous quarter, depreciation and
amortization was also 6% higher, partly due to the addition of Alouette.

The "Restructuring, impairment and other special charges" consisted mainly of
provisions for a portion of the restructuring program announced in the fourth
quarter of 2001, relating specifically to the closure of the Bracebridge cable
plant in Ontario, Canada.

"Intersegment and other" includes the deferral or realization of profits on
intersegment sales of aluminum as well as other non-operating items.

The Company's effective tax rate was 36% in the second quarter and 38% for the
first half of 2002, excluding the effects of non-recurring items and foreign
currency balance sheet translation.

LIQUIDITY AND CAPITAL RESOURCES

OPERATING ACTIVITIES

Cash generated from operating activities during the first six months of 2002 was
US$658 million compared to US$395 million in the comparable period of 2001. The
improvement was due largely to tighter controls on working capital.

FINANCING ACTIVITIES

Cash from (used for) financing activities in the first six months of 2002 was
US$(277) million compared to US$196 million in the same period in 2001. A net
amount of US$186 million of debt was repaid during the period, including the
redemption, in the first quarter, of the 8.875% US$150 million debentures that
were originally due on January 15, 2022. Debt as a percent of invested capital
at June 30, 2002 was 33%, compared to 32% at the end of the first quarter
(restated to reflect the impact of the impairment of goodwill) and 34% at the
end of the second quarter of 2001.

                                       25
<PAGE>

Interest expense, at US$50 million, decreased by US$15 million compared to the
previous year reflecting lower interest rates and debt levels, partially offset
by the fact that no interest was capitalized during the current quarter.
Interest expense was the same as in the previous quarter.

INVESTMENT ACTIVITIES

Capital expenditures during the first six months of 2002 were US$262 million
compared to US$497 million a year earlier. Capital expenditures were lower
principally due to the completion of the Alma smelter, which reached full
operation on September 30, 2001. Capital expenditures were considerably lower
than depreciation expense for the second quarter and first six months of 2002.
While the spending rate is expected to accelerate somewhat in the second half of
the year, capital expenditures for the full year are expected to be below
depreciation expense.

During the first six months of 2002, the Company received US$47 million (US$36
million in the first quarter) as net proceeds from the disposal of businesses,
investments and other assets, including the sale of three company-owned ships
and the sale of businesses which were announced in the fourth quarter of 2001
following a detailed portfolio review.

On April 24, 2002, the Company completed the acquisition of the Societe generale
de financement (SGF) 20% interest in the Aluminerie Alouette Consortium at a
cost of approximately US$172 million, subject to post-closing adjustments. The
Company is in the process of determining the allocation of the purchase price in
the accounts to the fair values of the assets acquired and liabilities assumed.
Alouette is a first-class aluminum smelter located in Sept-Iles, Quebec with an
annual capacity of 243,000 tonnes with a significant low-cost expansion
potential.

CURRENCY HEDGING OF AUSTRALIAN DOLLAR

At June 30, 2002, the Company has hedged AUD $717 million of its future
Australian dollar commitments in respect of its Australian dollar exposure,
through forward exchange contracts and options maturing over the next two years.

CAUTIONARY STATEMENT

Readers are cautioned that forward looking statements contained in this
Management's Discussion and Analysis should be read in conjunction with
"Cautionary Statements for Purposes of the Safe Harbor Provisions of the Private
Securities Litigation Reform Act of 1995" at Exhibit No. 99.

                                       26
<PAGE>

PART II.  OTHER INFORMATION

ITEMS 1. THROUGH 5.

The registrant has nothing to report under these items.

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

           (a)   Exhibits

                 (3.1)     Amendments to the Articles

                 (3.2)     Amendments to By-Law No. 1A

                 (4)       Re-Confirmation of the Shareholder Rights Plan

                 (99)      Cautionary  statement for purposes of the
                           "Safe  Harbor"  provisions  of the Private
                           Securities  Litigation Reform Act of 1995.
                           (Filed herewith)

           (b)    Reports on Form 8-K

           No reports were filed during the quarter ended 30 June 2002.

                                   SIGNATURE

Pursuant to the requirements 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.

<TABLE>

<S>                                         <C>
                                            ALCAN INC.




Dated: August 14, 2002                      By: /s/  Glenn R. Lucas
                                                ------------------------
                                                Glenn R. Lucas
                                                Vice President and Treasurer
                                                (A Duly Authorized Officer)
</TABLE>
                                       27
<PAGE>

EXHIBIT INDEX


<TABLE>
<CAPTION>
Exhibit
Number                                Description

<S>                     <C>
(3.1)             Amendments to the Articles

(3.2)             Amendments to By-Law No. 1A

(4)               Re-Confirmation of the Shareholder Rights Plan

(99)              Cautionary statement for purposes of the "Safe Harbor" provisions of the Private Securities Litigation Reform
                  Act of 1995.  (Filed herewith.)
</TABLE>

                                       28