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 March 31, 2006**

Commission file number 1-3677

**ALCAN INC.**

(Exact name of registrant as specified in its charter)

	 

| **CANADA**
Inapplicable
(State or Other Jurisdiction of
(I.R.S. Employer Identification No.)
Incorporation or Organization)
				 
 
**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	____

Indicate by check mark	whether the registrant is a large accelerated filer, an accelerated filer,	or a non-accelerated filer.  See definition of "accelerated filer and large	accelerated filer" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	  **X**	 	        	Accelerated filer ____                 Non-accelerated filer  ____

Indicate by check mark whether the registrant is a shell company (as defined	in Rule 12b-2 of the Exchange Act)

Yes          No   **X** 	

At May 2, 2006 the registrant had 374,513,892 shares of common stock (without	nominal or par value) outstanding.

  
 
**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 of its consolidated subsidiaries.

**Item 1.****Financial Statements**

**ALCAN	INC.**

**INTERIM CONSOLIDATED	STATEMENT OF INCOME**(unaudited)

** **
** **
			 
**Three months ended March 31**
**2006**
2005
(*in millions of US$, except per			share amounts)*
			 
			 
**Sales and operating revenues**
**5,550**
5,178
			 
** **
			 
**Costs and expenses**
** **
			 
Cost of sales and operating expenses,			excluding depreciation and 
** **
			 
amortization noted below
**4,128**
4,090
Depreciation and amortization
**251**
272
Selling, administrative and general			expenses
**364**
380
Research and development expenses
**52**
49
Interest 
**76**
85
Restructuring charges - net (note 6)
**14**
23
Other expenses (income) - net (note			10)
**(31)**
1
			 
**4,854**
4,900
Income from continuing operations			before income taxes and other items
**696**
278
Income taxes (note 9)
**269**
98
Income from continuing operations			before other items
**427**
180
Equity income
**28**
29
Minority interests
**(1)**
(1)
**Income from continuing operations**
**454**
208
Income from discontinued operations			(note 4)
**3**
10
**Income before cumulative effect of			accounting change**
**457**
218
Cumulative effect of accounting			change, net of income
** **
			 
 taxes of $2 (nil in 2005) (note 2)
**(4)**
-
**Net income**
**453**
218
Dividends on preference shares
**2**
2
**Net income attributable to common			shareholders**
**451**
216
**Earnings (Loss) per share**			(note 5)
**                    **
			 
Basic:
**                    **
			 
Income from continuing operations 
**             1.21**
             0.56
Income from discontinued operations
**             0.01**
             0.02
Cumulative effect of accounting			change
**           (0.01)**
                   -
**Net income per common share - basic**
**            1.21**
             0.58
Diluted:
                    			
			 
Income from continuing operations
**             1.20**
             0.56
Income from discontinued operations
**             0.01**
             0.02
Cumulative effect of accounting			change
**           (0.01)**
                   -
**Net income per common share - diluted**
**             1.20**
             0.58
**Dividends per common share**
**            0.15**
             0.15
* *

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

-2-

**ALCAN	INC.**

**INTERIM CONSOLIDATED	BALANCE SHEET**(unaudited)

			 
			 
			 
** **
**March 31,  2006**
December 31, 2005
(*in millions of US$)*
			 
			 
			 
			 
			 
**ASSETS**
			 
			 
			 
			 
			 
**Current assets**
** **
   
Cash and time deposits
**203**
181
Trade receivables (net of allowances			of $59 in 2006 and $56 in 2005)
**2,807**
2,308
Other receivables
**1,194**
946
Deferred income taxes
**150**
150
Inventories (note 11)
**2,867**
2,734
Current assets held for sale (note 4)
**17**
119
**Total current assets**
**7,238**
6,438
			 
** **
			 
Deferred charges and other assets
**1,253**
1,052
Investments
**1,533**
1,511
Deferred income taxes
**794**
863
Property, plant and equipment
** **
			 
Cost (excluding Construction work in			progress)
**17,152**
16,990
Construction work in progress
**1,949**
1,604
Accumulated depreciation
**(7,857)**
(7,561)
			 
**11,244**
11,033
Intangible assets (net of accumulated			amortization of $253 in 2006
			 
			 
   and $233 in 2005)
**1,001**
1,013
Goodwill
**4,649**
4,713
Long-term assets held for sale (note			4)
**2**
15
**Total assets**
**27,714**
26,638
			 
			 
			 
			 
			 
			 
*The accompanying notes	are an integral part of the interim financial statements.*

-3-* *

**ALCAN	INC.**

**INTERIM CONSOLIDATED	BALANCE SHEET**(cont'd)****(unaudited)****

			 
			 
			 
** **
**March 31, 2006**
December 31, 2005
(*in millions of US$)*
			 
			 
			 
			 
			 
**LIABILITIES AND SHAREHOLDERS' EQUITY**
			 
			 
			 
			 
			 
**Current liabilities**
			 
			 
Payables and accrued liabilities
**4,885**
4,608
Short-term borrowings
**308**
348
Debt maturing within one year
**823**
802
Deferred income taxes
**28**
25
Current liabilities of operations			held for sale (note 4)
**12**
62
**Total current liabilities**
**6,056**
5,845
			 
** **
			 
Debt not maturing within one year			
**5,219**
5,265
Deferred credits and other			liabilities
**1,907**
1,608
Post-retirement benefits
**3,091**
3,037
Deferred income taxes
**1,174**
1,172
Minority interests
**68**
67
			 
** **
			 
**Shareholders' equity**
** **
			 
Redeemable non-retractable preference			shares
**160**
160
Common shareholders' equity
** **
			 
Common shares
**6,267**
6,181
Additional paid-in capital
**688**
683
Retained earnings
**3,442**
3,048
Common shares held by a subsidiary
**(31)**
(31)
Accumulated other comprehensive loss			(note 14)
**(327)**
(397)
			 
**10,039**
9,484
			 
**10,199**
9,644
			 
** **
			 
Commitments and contingencies (note			13)
** **
			 
			 
** **
			 
**Total liabilities and shareholders'			equity**
**27,714**
26,638
			 
			 
			 
*The accompanying notes	are an integral part of the interim financial statements.*

-4-

 

**ALCAN	INC.**

**INTERIM CONSOLIDATED	STATEMENT OF CASH FLOWS**(unaudited)

** **
** **
			 
**Three months ended March 31**
**2006**
2005
(*in millions of US$)*
			 
			 
			 
			 
			 
**OPERATING ACTIVITIES**
			 
			 
			 
			 
			 
Net income
**453**
218
Income from discontinued operations
**(3)**
(10)
Income from continuing operations
**450**
208
Adjustments to determine cash from			operating activities:
** **
			 
Cumulative effect of accounting			change
**4**
-
Depreciation and amortization
**251**
272
Deferred income taxes
**144**
55
Equity income, net of dividends
**(16)**
(27)
Asset impairment charges
**9**
8
Gain on disposal of businesses and			investments - net
**-**
(1)
Stock option compensation
**25**
5
Change in operating working capital
** **
			 
Change in receivables
**(513)**
(418)
Change in inventories
**(78)**
14
Change in payables and accrued			liabilities
**(1)**
(237)
Change in deferred charges, other			assets, deferred credits and  
** **
			 
other liabilities, and			post-retirement benefits - net
**92**
107
Other - net
**-**
(48)
Cash from (used for) operating			activities in continuing operations
**367**
(62)
			 
** **
			 
Cash from operating activities in			discontinued operations
**-**
68
			 
** **
			 
**Cash from operating activities**
**367**
6
			 
** **
			 
**FINANCING ACTIVITIES**
** **
			 
			 
** **
			 
Proceeds from issuance of new debt -			net of issuance costs
**17**
436
Debt repayments
**(66)**
(636)
Short-term borrowings - net
**(36)**
(2,022)
Common shares issued
**67**
4
Dividends -  Alcan shareholders			(including preference)
**(58)**
(58)
-  Minority interests
**(1)** |
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