SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549

                           FORM 10-K/A

                         AMENDMENT NO. 1
                               to
                            FORM 10-K

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

           For the fiscal year ended December 31, 1998

                Commission File Number 001-01430

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


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

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

Common Stock, no par value               New York Stock Exchange


Preferred Stock Purchase Rights          New York Stock Exchange


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

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

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

As of March 22, 1999:

(a)  the  aggregate market value of the voting stock known by the
     Registrant to be held by nonaffiliates of the Registrant was
     approximately $2.4 billion*.

(b)  the   Registrant  had  64,457,809  shares  of  Common  Stock
     outstanding and entitled to vote.


               DOCUMENTS INCORPORATED BY REFERENCE

Portions  of  the  Proxy  Statement for  the  Annual  Meeting  of
Stockholders to be held on May 20, 1999 - Part III

*  For  this  purpose, "nonaffiliates" are deemed to  be  persons
   other    than   directors,   officers   and   persons   owning
   beneficially  more than five percent of the  voting  stock  as
   reported   to   the   Securities  and   Exchange   Commission.


<PAGE> 1
                             PART I


Item 1.  BUSINESS


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


                             GENERAL

Nature of Operations
--------------------

Reynolds is the world's third-largest aluminum producer and the
world's leading producer of aluminum foil.  We serve customers in
growing world markets including the aluminum fabricating,
packaging and consumer, commercial construction, distribution,
and automotive markets, with a wide variety of aluminum, plastic
and other products.  At December 31, 1998, Reynolds employed
approximately 20,000 people.  We have operations or interests in
operations at more than 100 locations in 24 countries.  Our world
headquarters is in Richmond, Virginia.

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

Portfolio Review
----------------

In late 1996, we began a portfolio review of our operations and
businesses.  Below is a summary of the portfolio review
transactions that we have completed since the beginning of 1998,
as well as those that are currently pending:

     In February 1998, we sold our Canadian aluminum extrusion
     plants, located in Richmond Hill, Ontario and Ste. Therese,
     Quebec, to the William L. Bonnell subsidiary of Tredegar
     Industries, Inc.  The plants manufacture products used
     primarily in the construction, transportation, electrical,
     machinery and equipment, consumer durables and climbing
     equipment markets.

     In March 1998, we sold our U.S. recycling operations to Wise
     Recycling, LLC, an affiliate of Wise Metals Co., Inc.  In a
     related transaction, TOMRA Pacific, Inc., an affiliate of
     TOMRA Systems, ASA, acquired the western region of our U.S.
     recycling operations.

     In May 1998, we sold our European rolling mill businesses to
     VAW aluminium AG.  Included in the sale were the aluminum
     rolling operations of Reynolds Aluminium Deutschland, Inc.
     in Hamburg, Germany (known as RADI); Reynolds Italy Slim,
     S.p.A. in Cisterna di Latina, Italy (known as SLIM); and
     Industria Navarra del Aluminio, S. A. in Irurzun, Spain
     (known as INASA).

     In June 1998, we sold our McCook, Illinois sheet and plate
     plant to McCook Metals L.L.C.  The plant produces aluminum
     products for the aircraft and aerospace, transportation and
     distribution markets.

     In August 1998, we sold our North American beverage can
     business to Ball Corporation.

     In December 1998, we signed a definitive agreement to sell
     our Alloys can stock complex located in Alabama to Wise
     Alloys LLC, an affiliate of Wise Metals Co., Inc.  Included
     in the complex are the Alloys rolling mill, two reclamation
     plants, and a coil coating facility.  Wise Alloys took title
     to the inventory and spare parts associated with the Alloys
     complex in December 1998, and until the final closing, we
     are operating the facility on behalf of Wise Alloys for a
     management fee.  The final closing is expected to occur by
     the end of the first quarter of 1999 and is subject to
     customary closing conditions.


                                  1

<PAGE> 2
     In December 1998, we signed a definitive agreement to sell
     our aluminum extrusion plant in Irurzun, Spain, as well as
     our distribution operations for architectural systems
     located in Spain, to an affiliate of Alcoa Inc.  The
     transaction is subject to customary closing conditions and
     is expected to close by the end of the first quarter of
     1999.


Financial Information Regarding Global Business Units and
Operations by Geographic Location
---------------------------------------------------------

Financial information for operations and assets attributable to
our global business units and information regarding our
operations by geographic location are included in Note 11 to the
consolidated financial statements in Item 8 of this report.


                      GLOBAL BUSINESS UNITS

Base Materials
--------------

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

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

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

We refine bauxite into alumina at our Sherwin alumina plant near
Corpus Christi, Texas.  We also are entitled to a share of the
production from two joint ventures in which we have interests,
one located in Western Australia, known as the Worsley Joint
Venture ("Worsley"), and the other located in Stade, Germany,
known as Aluminium Oxid Stade ("Stade").  See Table 1 under this
Item.  In addition, we have a contract with a third party to
purchase 120,000 metric tons of alumina annually in 1999 and
2000.

Worsley currently has the capacity to produce 1.7 million metric
tons of alumina per year.  Reynolds is entitled to 56% of the
alumina produced by the joint venture.  The Worsley refinery is
currently being expanded to increase its annual capacity to 3.1
million metric tons.  In addition to increasing capacity, the
expansion project will further reduce operating costs and improve
product quality.  Construction is scheduled to be completed in
the second quarter of 2000.  Worsley has proven bauxite reserves
sufficient to operate the plant at capacity for at least the next
35 years, even after taking into account the ongoing expansion of
the refinery's annual capacity.

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

     AUSTRALIA

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


                                  2


<PAGE> 3
     BRAZIL

     We own a 5% interest in Mineracao Rio Do Norte S.A. (known
     as MRN), which owns the Trombetas bauxite mining project in
     Brazil.  We will buy at least 322,000 dry metric tons of
     Brazilian bauxite from the project in 1999.

     We also maintain an interest in other, undeveloped bauxite
     deposits in Brazil.

     GUINEA

     We own a 6% interest in Halco (Mining), Inc.  Halco owns 51%
     and the Guinean government owns 49% of Compagnie des
     Bauxites de Guinee ("CBG"), which has the exclusive right
     through 2038 to develop and mine bauxite in a 10,000 square-
     mile area in northwestern Guinea.  We have a bauxite
     purchase contract with CBG that will provide us with a
     minimum of approximately 6,550,000 dry metric tons of
     Guinean bauxite for the period 1999 through 2011.

     GUYANA

     We are a 50% partner with the Guyanese government in a
     bauxite mining project in the Berbice region of Guyana.
     During 1999, we will buy between 1,500,000 and 1,800,000 dry
     metric tons of bauxite from the project.

     JAMAICA

     We have a purchase arrangement under which we will buy from
     a third party an aggregate of up to 5,400,000 dry metric
     tons of Jamaican bauxite for the period 1999 through 2001.

     OTHER

     We have an arrangement with the U.S. government under which
     we will buy at a negotiated price during 1999 approximately
     529,000 long dry tons of Jamaican bauxite stored next to our
     Sherwin alumina plant.

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

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

Our primary aluminum products include unalloyed aluminum ingot;
billet, which is used by extrusion plants; sheet ingot, which is
supplied to rolling facilities; foundry ingot, which is the base
material for cast products such as automotive wheels; and
electrical redraw rod, which is used by the electrical cable
industry.  During 1998, approximately 65% of our primary aluminum
products was sold externally to third parties; the remainder was
purchased by other Reynolds business units.  Our internal demands
for primary aluminum have declined as a result of actions taken
in connection with our portfolio review.  Consequently, we expect
that a larger percentage of our future primary aluminum sales
will be to external customers.

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


                             3


<PAGE> 4
In addition to the primary aluminum plants listed in Table 2,
Reynolds has a 10% equity interest in the Aluminum Smelter
Company of Nigeria ("ALSCON"), which is currently under
construction.  When ALSCON is operating at capacity, we expect to
buy at market-related prices approximately 153,000 metric tons of
primary aluminum annually from the 193,000 metric ton smelter.
Startup of one line began in late 1997.  That line was operating
at the end of 1998 at 41% of its rated capacity of 96,500 metric
tons.  We also have an 8% equity interest in C.V.G. Aluminio del
Caroni, S.A. (known as ALCASA), which produces primary aluminum
in Venezuela.

Reynolds owns and operates two carbon products manufacturing
facilities located in Lake Charles and Baton Rouge, Louisiana.
These facilities produce 855,000 metric tons of calcined
petroleum coke and 136,000 metric tons of carbon anodes annually.
The anodes are produced principally for consumption at our
primary aluminum plant in Baie Comeau, Quebec.  The calcined
petroleum coke is used by our wholly owned primary aluminum
plants.  We also sell it worldwide to the aluminum and titanium
dioxide industries.

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

Energy
------

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

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

Rates for electricity charged by the Bonneville Power
Administration, which serves the Company's Troutdale, Oregon and
Longview, Washington primary aluminum plants, are established
under a five-year contract that runs through September 2001.  We
are now evaluating the sources of electricity that may be
available to us after the current contract expires.


                              4


<PAGE> 5

<TABLE>
<CAPTION>
                                 Table 1
                    Alumina Plants and Energy Supply

                            Rated
                        Capacity(a) at                       Principal
                      December 31, 1998      Energy       Energy Contract
Plant                    Metric Tons       Purchased(b)   Expiration Date
-----                    -----------       ------------   ---------------
<S>                       <C>              <C>                <C>
Corpus Christi, Texas     1,600,000        Natural Gas        (c),(d)
Worsley, Australia          969,000(e)     Coal               2002(d)
Stade, Germany              375,000(e)     Natural Gas        2008
</TABLE>

<TABLE>
<CAPTION>
                                 TABLE 2
          Primary Aluminum Production Plants and Energy Supply



                          Rated
                      Capacity(a) at                          Principal
                     December 31, 1998      Energy         Energy Contract
Plant                   Metric Tons       Purchased(b)     Expiration Date
-----                   -----------       ------------     ---------------
<S>                     <C>               <C>               <C>
Baie Comeau, Quebec     400,000           Electricity       2011 and 2014
Longview, Washington    204,000(f)        Electricity       2001
Massena, New York       123,000(f)        Electricity       2013(g)
Troutdale, Oregon       121,000(f)        Electricity       2001
Becancour, Quebec       186,000(h)        Electricity       2014
Hamburg, Germany         40,000(h)        Electricity       2005
Ghana                    20,000(h)        Electricity       2017
</TABLE>


<TABLE>
<CAPTION>
                                 TABLE 3
          Alumina and Primary Aluminum Capacity and Production
                              (Metric Tons)

            Alumina(e),(i)                 Primary Aluminum(h),(j)
       ---------------------------       ---------------------------
         Rated                             Rated
Year   Capacity(a)   Production(k)       Capacity(a)   Production(f)
----   -----------   -------------       -----------   -------------
<S>    <C>            <C>                <C>             <C>
1996   2,927,000      2,674,000          1,094,000       893,500
1997   2,944,000      2,724,000          1,094,000       893,200
1998   2,944,000      2,868,000          1,094,000       982,900
</TABLE>

NOTES TO TABLES 1, 2, and 3.

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


(b)  See "Energy" above.

(c)  The Sherwin plant purchases approximately 50% of the natural
gas required to operate the plant under a three-year contract
that is scheduled to expire in October 1999.  The remainder is
purchased under short-term contracts.  After the base term of the
existing three-year contract expires in 1999, it will continue on
a month-to-month basis until one of the parties terminates the
contract.


                                 5

<PAGE> 6
(d)  We have a long-term agreement to purchase all of Sherwin's
steam and a portion of its electricity from a third-party
cogeneration facility beginning in mid-year 2000.  Worsley has a
similar contract to purchase a portion of its steam and
electricity beginning in early 2000.

(e)  We are entitled to 56% of the production of Worsley and 50%
of the production of Stade.  Capacity and production figures
reflect our share.

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

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

(h)  We are entitled to 50% of the production of Becancour, 33-
1/3% of the production of Hamburg, and 10% of the production of
Ghana.  Capacity and production figures reflect our share.
Production at Ghana has been curtailed since September 1994 by
drought.  At December 31, 1997, Ghana was operating at 77% of
capacity and was further reduced to 20% of capacity in the first
half of 1998.  In December 1998, Ghana began to restart a portion
of its curtailed capacity.  The plant is currently operating at
approximately 60% of capacity.

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

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

(k)  We reduced production at our Sherwin alumina plant near
Corpus Christi, Texas during the third quarter of 1996.  We
restarted the idle alumina capacity at the Sherwin plant late in
1997.


                                 6


<PAGE> 7

Packaging and Consumer
----------------------

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

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

We manufacture our packaging products at wholly owned facilities
in the U.S., Canada and Spain.  See Table 4 under the heading
"Packaging and Consumer."  We also have interests in foil
operations in Colombia and Venezuela.  The capacity of these
manufacturing facilities depends on the variety and types of
products manufactured.

Reynolds' packaging and consumer global business unit also
manufactures and markets an extensive line of foil, plastic and
paper consumer products under the Reynolds name.  Products
include the well-known Reynolds Wrap Aluminum Foil, Reynolds
Plastic Wrap, Reynolds Oven Bags, Reynolds Freezer Paper,
Reynolds Cut-Rite Wax Paper and Reynolds Baker's Choice Bake
Cups.  In 1998, we introduced two new products - Reynolds Hot
Bags Foil Bags and Reynolds Wrappers Foil Sandwich Sheets.  Our
consumer products are distributed throughout the U.S., which is
our largest market for these products, and in more than 65 other
countries.

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

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

In February 1999, we acquired London Graphics Inc.  London
Graphics is based in Toronto, Ontario and produces flexographic
separations and plates for the packaging industry in Canada.  It
is being integrated with Southern Graphic's Canadian operations.

Construction and Distribution
-----------------------------

The Company's construction and distribution global business unit
distributes aluminum, stainless steel and other specialty metal
products under the name Reynolds Aluminum Supply Company
("RASCO").  This business unit also produces and sells
architectural products and systems.

RASCO provides supply chain management services to North American
metal fabricating customers requiring high-quality aluminum,
stainless steel and other specialty metal products.
During 1998, RASCO's sales were 56% in aluminum products
and 44% in stainless steel products.  RASCO processes
and distributes plate, sheet, extrusions, rod and bar products
through 28 facilities across North America.  RASCO provides metal
processing services such as cutting to length, slitting, shearing,
sawing and plasma burning.  The customized metal processing


                              7

<PAGE> 8
services offered by RASCO allow it to provide just-in-time
delivery to customers.  Its customers include fabricators and
manufacturers in transportation, equipment, machinery and other
markets.

Through our construction operations we produce Reynobond and
other architectural cladding products in the U.S. that are sold
globally.  In 1998, we began a $25 million expansion of our plant
in Merxheim, France.  The expansion will allow us to produce
Reynobond and other composite architectural products in Europe.

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

Transportation
--------------

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

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

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

Automotive structures include bumpers, car and truck door frames,
convertible roof brackets, sunroof frames, antilock brake system
housings, steering shafts and steering column brackets, among
other items, for use in automobiles and truck and trailer
systems.  In addition, we are currently testing a new engine
cradle program that should be in production in mid-1999.


                        OTHER OPERATIONS

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

     EMERGING MARKETS GROUP - The purpose of the Emerging Markets
     Group is to identify and develop new business opportunities
     in strategic emerging world markets.  The group oversees our
     interests in an aluminum foil and extrusion plant in China.
     It also provides technical services to rolling operations
     owned by third parties in Russia and India.

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

     REYCAN L.P./REYCAN S.E.C. - We own a 50% partnership
     interest in this Canadian aluminum rolling operation.

     LATAS DE ALUMINIO. S.A. ("Latasa") - We own a 34.9% interest
     in this South American aluminum can operation.  Previously,
     we disclosed an intent to sell this interest; however, we
     now expect to maintain our interest in Latasa.


                                 8

<PAGE> 9
     UNITED ARAB CAN MANUFACTURING COMPANY, LTD. - We own a 27.5%
     interest in this aluminum can operation located in Saudi
     Arabia.

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

     ALLOYS COMPLEX - Our Alloys can stock complex in Alabama
     consists of a rolling mill, two reclamation plants that
     provide input metal to the mill, and a coil coating
     facility.  The principal product of the rolling mill is
     aluminum sheet used to produce beverage can bodies, ends and
     tabs.  We have signed a definitive agreement with Wise
     Alloys LLC for the sale of the complex and have transferred
     title to certain of the assets of the complex.  We are
     currently operating the facility on behalf of Wise Alloys.
     See "General - Portfolio Review" for additional information.

     CERTAIN SPANISH OPERATIONS - We operate an aluminum
     extrusion plant in Irurzun, Spain.  We also have warehouses
     in several cities in Spain that are part of our distribution
     operation for architectural systems.  We have signed an
     agreement with Alcoa Inc. for the sale of these assets.  See
     "General - Portfolio Review" for additional information.


                           COMPETITION

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



                              9


<PAGE> 10

                    ENVIRONMENTAL COMPLIANCE

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

Based on information currently available, we estimate that
compliance with the Clean Air Act's hazardous air pollutant
standards would require in excess of $250 million of capital
expenditures (including a portion of the expenditures at the
Massena plant referred to below), primarily at our U.S. primary
aluminum production plants.  The ultimate effect of the Clean Air
Act on such plants and on our other operations (and the actual
amount of any such capital expenditures) will depend on how the
Clean Air Act is interpreted and implemented pursuant to
regulations that are currently being developed and on such
additional factors as the evolution of environmental control
technologies and the economic viability of such operations at the
time.  Based on an August 1995 memorandum of understanding with
the State of New York to resolve environmental issues at our
Massena, New York primary aluminum production plant, we have
undertaken a five-year capital spending program (planned for
completion in 2001) of an estimated $200 million to modernize the
Massena plant and significantly reduce air emissions from the
plant.  Pursuant to the memorandum of understanding, we are
accelerating certain expenditures believed necessary to achieve
compliance with the Clean Air Act's Maximum Achievable Control
Technology standards.

Our capital expenditures for equipment designed for environmental
control purposes were approximately $24 million in 1996, $43
million in 1997 and $80 million in 1998.  The portion of such
amounts expended in the United States was $16 million in 1996,
$41 million in 1997 and $74 million in 1998.  We estimate that
annual capital expenditures for environmental control facilities
will be approximately $55 million in 1999, $17 million in 2000,
and $40 million in 2001.  The majority of these estimated
expenditures are associated with the capital spending program
referred to above at the Massena plant.  Future capital
expenditures for environmental control facilities cannot be
predicted with accuracy for the reasons cited above; however, it
is reasonable to expect that environmental control standards will
become increasingly stringent and that the expenditures necessary
to comply with them could increase substantially.

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

In addition, we are investigating possible environmental
contamination, which may also require remedial action, at certain
of our present and former United States manufacturing facilities.
The following discussion provides information about the current
status of two individually significant sites.

     MASSENA, NEW YORK SITE.  In 1988, Reynolds discovered that
     soils in the area of the heat transfer medium system at
     Reynolds' primary aluminum production plant in Massena, New
     York were contaminated with polychlorinated biphenyls
     ("PCBs") and other contaminants.  At December 31, 1998,
     remediation. of the contaminated soils and other
     contaminated areas of the plant is substantially complete.
     Portions of the St. Lawrence River system adjacent to the
     plant are also contaminated with PCBs.  Since 1989, Reynolds
     has been conducting investigations and studies of the river
     system under order from the EPA issued under Superfund.
     Reynolds is in the process of working with the EPA to better
     define the scope of the dredging program which is planned
     for 2000.  Reynolds is also aware of a natural resource
     damage claim arising out


                                10

<PAGE> 11
     of the discharge of PCBs and other contaminants into
     the river system that may be asserted by potential
     claimants, including federal, state and tribal
     natural resource trustees.

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

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

Reynolds' policy is to accrue remediation costs when it is
probable that remedial efforts will be required and the related
costs can be reasonably estimated.  On a quarterly basis, we
evaluate the status of all sites, develop or revise estimates of
costs to satisfy known remediation requirements and adjust our
accruals accordingly.  At December 31, 1998, the accrual for
known remediation requirements was $172 million.  This amount
reflects management's best estimate of our ultimate liability for
such costs.  Potential insurance recoveries are uncertain and
therefore have not been considered.  As a result of factors such
as the developing nature of administrative standards promulgated
under Superfund and other environmental laws; the unavailability
of information regarding the condition of potential sites; the
lack of standards and information for use in the apportionment of
remedial responsibilities; the numerous choices and costs
associated with diverse technologies that may be used in remedial
actions at such sites; the availability of insurance coverage;
the ability to recover indemnification or contribution from third
parties; and the time periods over which eventual remediation may
occur, estimated costs for future environmental compliance and
remediation are necessarily imprecise.  It is not possible to
predict the amount or timing of future costs of environmental
remediation that may subsequently be determined.  Based on
information currently available, it is management's opinion that
such future costs are not likely to have a material adverse
effect on Reynolds' competitive or financial position.  However,
such costs could be material to future quarterly or annual
results of operations.

See the discussion under "Environmental" in Item 7, and under
Note 12 to the consolidated financial statements in Item 8 of
this report regarding the Company's anticipated costs of
environmental compliance.


                    RESEARCH AND DEVELOPMENT

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

Expenditures for Reynolds-sponsored research and development
activities were approximately $31 million in 1998, $41 million in
1997, and $49 million in 1996.

We own numerous patents relating to our products and processes
based predominantly on our in-house research and development
activities.  The patents owned by Reynolds, or under which we are
licensed, generally concern particular products or manufacturing
techniques.  Our business is not, however, materially dependent
on patents.


                                11

<PAGE> 12
                            EMPLOYEES

At December 31, 1998, Reynolds had approximately 20,000
employees.  After the completion of the sale of our Alloys can
stock complex, Reynolds will have approximately 18,400 employees.

In 1996, we entered into new six-year labor contracts with the
United Steelworkers of America and the Aluminum, Brick and Glass
Workers International Union.  The contracts involve approximately
4,000 active employees.  At the end of the fifth year, the
economic provisions of the contracts will be reopened.  If
agreement cannot be reached, the economic provisions applicable
to the sixth year will be submitted to arbitration.


Item 3.  LEGAL PROCEEDINGS

A private antitrust lawsuit styled Hammons v. Alcan Aluminum
Corp. et al. was filed in the Superior Court of California for
the County of Los Angeles on March 5, 1996 against the Registrant
and other aluminum producers.  The lawsuit alleged a conspiracy
to reduce worldwide and U.S. aluminum production.  Estimated
damages of approximately $26 billion were sought in the lawsuit,
which claimed class action status.  Defendants removed the case
to the U.S. District Court for the Central District of California
(the "District Court").  The District Court granted summary
judgment for defendants.  On December 11, 1997, the U.S. Court of
Appeals for the Ninth Circuit sustained the District Court's
dismissal of the case.  The plaintiff filed a motion seeking
review of the decision by all the judges of the Ninth Circuit.
The motion was denied on May 14, 1998.  On August 12, 1998, the
plaintiff filed a petition for a writ of certiorari in the U.S.
Supreme Court.  On October 19, 1998, the Supreme Court denied the
petition and declined to review the case.  On November 10, 1998,
the plaintiff requested a rehearing but the Supreme Court denied
that request on December 7, 1998.

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


                              12


<PAGE> 13
Item 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS


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

Management's Discussion and Analysis contains forecasts,
projections, estimates, statements of management's plans,
objectives and strategies for the Company and other forward-
looking statements.  Please refer to the "Risk Factors" section
beginning on page 27, where we have summarized factors that could
cause actual results to differ materially from those projected in
a forward-looking statement or affect the extent to which a
particular projection is realized.


RESULTS OF OPERATIONS
---------------------
Lower aluminum prices negatively impacted 1998 profits by $134
million, primarily affecting our Base Materials Global Business
Unit.  We were able to completely overcome this impact with
improved sales volumes from our ongoing operations of $82
million, significant reductions in conversion costs of $21
million and lower selling, general and administrative expenses
and interest expenses of $67 million.

Over the past two years, through our Portfolio Review process, we
have improved our focus and lowered our threshold for
profitability at decreased pricing levels.  We increased
earnings from operations in 1998 while experiencing a
12% reduction in realized primary aluminum prices.  Comparing
1998 results to our pre-restructuring base year of 1996, we
almost doubled earnings from operations despite 5% lower realized
primary aluminum prices.

As we enter 1999, we have made significant progress on cost
reduction, debt reduction, share repurchases and effective
management of inventory and capital spending.

<TABLE>
<CAPTION>

                                            1998    1997    1996
                                          ------------------------
<S>                                         <C>     <C>     <C>
RESULTS
Income before extraordinary loss and
 cumulative effect of accounting change     $ 152   $ 136   $ 104
Extraordinary loss (see Note 3)               (63)      -       -
Cumulative effects of accounting changes
 (see Note 1)                                 (23)      -     (15)
                                          -------------------------
Net income                                  $  66   $ 136   $  89
                                          =========================

EARNINGS PER SHARE - BASIC
Income before extraordinary loss and
 cumulative effect of accounting change     $2.18   $1.86   $1.06
Extraordinary loss                          (0.91)      -       -
Cumulative effects of accounting changes    (0.33)      -   (0.24)
                                          -------------------------
Net income                                  $0.94   $1.86   $0.82
                                          =========================
</TABLE>

Income before extraordinary loss and cumulative effect of
accounting change includes after tax charges for operational
restructuring of $90 million in 1998, $78 million in 1997 and $23
million in 1996.  For additional information concerning these
charges, see Note 2 to the consolidated financial statements.


                               13


<PAGE> 14
RESULTS OF OPERATIONS - continued
---------------------
GLOBAL BUSINESS UNITS
The Company is organized into four market-based, global business
units.  The four global business units and their principal
products are as follows:

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

<TABLE>
<CAPTION>
BASE MATERIALS
                               1998     1997     1996
                           ----------------------------
  <S>                        <C>      <C>      <C>
  Aluminum shipments:
   Customer                     668      513      458
   Internal                     354      684      577
                           ----------------------------
   Total                      1,022    1,197    1,035
                           ============================
  Revenues:
   Customer - aluminum       $1,058   $  923   $  763
            - nonaluminum       402      405      373
   Internal - aluminum          572    1,187      944
                           ----------------------------
   Total                     $2,032   $2,515   $2,080
                           ============================
  Operating income           $  290   $  312   $  242
                           ============================
</TABLE>

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

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


Nonaluminum
-----------
 . Alumina - One plant in the U.S. and partial interests in
  plants in Australia (56% owned) and Germany (50% owned).  Our
  rated annual production capacity including our share of partial
  interests is 2,944,000 metric tons.  Depending on operating rates
  of primary aluminum and alumina facilities, approximately 71% of
  alumina production is consumed within the Base Materials global
  business unit.
 . Carbon products - Two U.S. plants that produce calcined
  petroleum coke (one of which also produces carbon anodes)
  principally for use in primary aluminum facilities.  Depending on
  operating rates of primary aluminum and carbon products
  facilities, approximately 45% of carbon products production is
  consumed within the Base Materials global business unit.

The increase in customer aluminum shipments in 1998 and 1997
reflects strong demand for our value-added products (foundry and
sheet ingot, billet and rod).  Our available supply to meet
customer needs has increased because we no longer need to supply
downstream fabricating operations that have been sold.  Our
available supply also increased because of restarting idled
capacity in 1998 (as discussed below).


                                 14


<PAGE> 15

RESULTS OF OPERATIONS - continued
---------------------
GLOBAL BUSINESS UNITS - continued
BASE MATERIALS - continued
In addition to reflecting the changes in shipping volume,
aluminum revenues were significantly affected by primary aluminum
prices.  Average realized prices for customer shipments were:

                            Per Pound
                            ---------

             1998             $.72
             1997              .82
             1996              .76

Alumina shipments were higher in both 1998 and 1997 because of
significant improvements in production efficiencies and capacity
utilization at our U.S. alumina plant.  Nonaluminum revenues were
flat in 1998 as lower prices for alumina and carbon products
offset the effect of higher alumina shipments.

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

In addition to higher prices, 1997 operating income improved due
to increased operating efficiencies and capacity utilization.
Somewhat offsetting these improvements were non-recurring
maintenance costs in our alumina operations and higher costs for
raw materials in carbon products operations.

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

In 1999, we expect to continue to benefit from performance
improvements.  We also expect approximately 70% of our primary
aluminum shipments to be in the form of value-added products,
enabling us to earn a premium over primary aluminum market
prices.

<TABLE>
<CAPTION>
PACKAGING AND CONSUMER
                                     1998      1997      1996
                                 --------------------------------
   <S>                             <C>       <C>       <C>
   Customer aluminum shipments        141       142       136

   Revenues:

     Customer - aluminum           $  787    $  797    $  768
              - nonaluminum           605       602       585
                                 --------------------------------
     Total                         $1,392    $1,399    $1,353
                                 ================================
   Operating income                $  156    $  141    $  149
                                 ================================
</TABLE>

The Packaging and Consumer global business unit consists
principally of 17 packaging and consumer products plants in the
U.S., one each in Canada and Spain, and 21 graphics facilities
located in the U.S. and Canada that produce graphics, printing
cylinders and plates.

Shipments and revenues for packaging and consumer products were
essentially flat in 1998.  Sales of consumer products increased
because of strong demand for Reynolds Wrap aluminum foil and the
introduction of new products.  Sales of packaging products
decreased because of aluminum foil capacity constraints and the
elimination of certain low-margin products.


                                15


<PAGE> 16
RESULTS OF OPERATIONS - continued
---------------------
GLOBAL BUSINESS UNITS - continued
PACKAGING AND CONSUMER - continued
Operating income increased in 1998 due to higher sales of
consumer products, lower raw material costs and cost reduction
programs.  Higher product development and marketing costs for new
consumer products introduced in 1998 partially offset these
benefits.

Shipments and revenues increased for most products in 1997.
Growth was particularly strong for tobacco, pharmaceutical and
lidstock packaging products, consumer foil products and plastic
wraps and bags.

Operating income declined in 1997 due to higher costs for
aluminum and other raw materials.  These costs were mostly offset
by higher shipping volume, improved capacity utilization, lower
advertising costs, cost reduction programs and some price
increases.

<TABLE>
<CAPTION>
CONSTRUCTION AND DISTRIBUTION
                                   1998      1997      1996
                                 -----------------------------
   <S>                             <C>       <C>       <C>
   Customer aluminum shipments      184       166       151

   Revenues:
     Customer - aluminum           $681      $614      $600
              - nonaluminum         314       328       332
                                 -----------------------------
     Total                         $995      $942      $932
                                 =============================
   Operating income                $ 39      $ 41      $ 45
                                 =============================
</TABLE>

The Construction and Distribution global business unit consists
principally of 37 distribution centers in the U.S., Europe and
China and four manufacturing plants, two in the U.S. and two in
Europe.

The increase in aluminum shipments and revenues in 1998 and 1997
resulted from strong demand for most products.  All of our major
distribution products (plate, sheet and extrusions) benefited
from market share growth in our major domestic markets.
Construction products benefited from our global expansion
efforts.  Composite sheet shipments for architectural
applications were strong in several global markets.  Average
realized prices were relatively flat in 1998 after being lower in
1997 due to product mix.

The decline in nonaluminum revenues in 1998 and 1997 resulted
from lower prices for stainless steel distribution products.
Prices for these products continue to be under pressure due to
increased imports and strong competition.  Our shipments were up
approximately 8% in 1998 reflecting strong demand for all of our
products.

Operating income in 1998 and 1997 benefited from the higher
shipping volume.  This was offset by higher marketing costs to
expand global sales of construction products and to improve
market penetration in existing markets.  In addition, operating
income for 1998 decreased because of  lower capacity utilization
in construction products plants and poor business conditions for
the construction industry in Asian markets.  Operating income in
1997 was also adversely affected by higher aluminum raw material
costs.

Our outlook for 1999 is for growth in shipments in our highly
competitive global markets.  The shipment growth is expected to
result from 1998 geographic expansion and product development
initiatives.


                                16


<PAGE> 17
RESULTS OF OPERATIONS - continued
---------------------
GLOBAL BUSINESS UNITS - continued

<TABLE>
<CAPTION>
TRANSPORTATION
                                   1998      1997      1996
                                 -----------------------------
    <S>                             <C>       <C>       <C>

    Customer aluminum shipments       63        66        58

    Customer revenues               $337      $353      $326

    Operating income (loss)          (19)       10        17
                                 =============================
</TABLE>

The Transportation global business unit consists principally of
the following:

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

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


Shipments of aluminum wheels were strong in 1997 as we were able
to increase market share with new business at cast wheel
facilities, and our new forged wheel plant in Virginia started
production.  Shipments of automotive extrusions were also higher
due to growth in European business.

Revenues in 1998 and 1997 also declined due to lower prices for
wheels because of competition for new business.

The principal reasons for the declines in operating income in
1998 and 1997 were as follows:

1998
 . lower shipping volume and its adverse effect on capacity
  utilization
 . lower average realized prices
 . operational difficulties at our Wisconsin cast aluminum
  wheel plant

1997
 . lower average realized prices
 . higher metal costs
 . higher selling, general and administrative expenses because
  of growth in operations

Both periods were also affected by non-recurring start-up costs
relating to the new Virginia forged aluminum wheel plant and an
engine cradle program at our Indiana automotive structures plant.
The wheel plant expansion was completed in February 1999.  The
start-up phase of the engine cradle program should be completed
in mid-1999.

We have been working hard to address the issues affecting this
business.  In cast aluminum wheels, facilities in Canada, Italy
and Venezuela are operating reasonably well.  Our newer plant in
Wisconsin has experienced a variety of operational difficulties
since it began operation.  In 1998, we substantially completed
pre-production certification programs for 16 new wheel models at
the plant - a major cost hurdle.  This new production volume
should help the plant improve.  During the second half of 1998,
the plant showed improvement.


                                 17


<PAGE> 18
RESULTS OF OPERATIONS - continued
---------------------
GLOBAL BUSINESS UNITS - continued
TRANSPORTATION - continued
Our automotive structures plant in Indiana has been operating
below capacity for the reasons previously discussed.  We are
currently testing a new engine cradle program that should be in
production in mid-1999 and should help improve performance.  In
addition, we have entered into a new bumper contract that is
scheduled to begin production in 1999.

Aside from plant-specific initiatives, we are also evaluating
options for our transportation business as a whole, including
strategic alliances.

RESTRUCTURING
This category consists of those operations that are not part of
the Company's long-term business focus.  In addition to the
Alabama can stock complex that we expect to finalize the sale of
in early 1999, the Restructuring category includes the following,
which have been sold:

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

Financial information for 1998, 1997 and 1996 relating to
operations divested and the Alabama can stock complex is
reflected in the Restructuring category in Note 11.  Customer
revenues generated by these entities were $1.4 billion in 1998,
$2.7 billion in 1997 and $3.1 billion in 1996.  The decline in
shipments and net sales in 1998 and 1997 was due to the sale of
these operations.  In 1998, the absence of operating income from
sold operations was offset by the effect ($65 million) of ceasing
depreciation on assets held for sale.  Operating income in 1997
improved because of higher shipping volume and capacity
utilization in can operations.

After finalizing the sale of the Alabama can stock complex, the
Company's restructuring activities will be essentially complete.
As of the end of 1998, the only assets remaining in the
Restructuring category relate to the Company's Alabama can stock
complex.  In accordance with the terms of the definitive
agreement to sell this complex, the Company is operating the
facility on behalf of the purchasers for a management fee until
the final closing.  As a result, the Company expects no revenues
or operating results to be reflected in the Restructuring
category in 1999.

OTHER
This category consists principally of the corporate headquarters
(and related selling, general and administrative expenses),
operations in emerging markets, European extrusion operations and
investments in Canada, Latin America and Saudi Arabia and real
estate.

The increased operating loss in 1998 was due to higher corporate
amounts and lower equity income in our Latin American can
operations.  In 1997, lower corporate amounts offset lower equity
income in our Latin American can operations.


For additional information concerning the Company's restructuring
activities, see "Portfolio Review" on page 25 and Notes 2 and 11
to the consolidated financial statements.


                                 18


<PAGE> 19
RESULTS OF OPERATIONS - continued
---------------------
GEOGRAPHIC AREA ANALYSIS
The Company has worldwide operations in the U.S., Canada and
other foreign areas including Europe and Australia.  Certain of
these consist of equity interests in entities, the revenues of
which are not included in our consolidated revenues.  In
Australia, we participate in an unincorporated joint venture that
mines bauxite and produces alumina.

Revenues were negatively impacted in all geographic areas as a
result of the Company's restructuring activities in 1998 and
1997.  Despite the restructuring activities, revenues in Canada
improved in 1997 because of higher average realized primary
aluminum prices.  Other foreign revenues also increased in 1997
due to strong demand for our construction and transportation
products.


INTEREST EXPENSE
Interest expense decreased in 1998 and 1997 because we reduced
the amount of debt outstanding.


TAXES ON INCOME
The Company pays U.S. federal, state and foreign taxes based on
the laws of the various jurisdictions in which it operates.  The
effective tax rates (see reconciliation in Note 10 to the
consolidated financial statements) reflected in the income
statement differ from the U.S. federal statutory rate principally
because of the following:

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

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

At December 31, 1998, we had $844 million of deferred tax assets
that relate primarily to U.S. tax positions.  The most
significant portions of these assets relate to tax carryforward
benefits and accrued costs for employee health care,
environmental and restructuring costs.  We expect to realize a
major portion of these assets in the future through the reversal
of temporary differences, principally depreciation.  To the
extent that these assets are not covered by reversals of
depreciation, we expect the remainder to be realized through U.S.
income earned in future periods.

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

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


                              19


<PAGE> 20
RESULTS OF OPERATIONS - continued
---------------------
ENVIRONMENTAL
The Company is involved in remedial investigations and actions at
various locations, including Environmental Protection Agency-
designated Superfund sites where we and, in most cases, others
have been designated as potentially responsible parties (PRPs).
We accrue remediation costs when it becomes probable that such
efforts will be required and the costs can be reasonably
estimated.  We evaluate the status of all significant existing or
potential environmental issues quarterly, develop or revise cost
estimates to satisfy known remediation requirements, and adjust
the accrual accordingly.  At December 31, 1998, the accrual was
$172 million.  The accrual reflects our best estimate of the
ultimate liability for known remediation costs.

Amounts accrued for two sites - our Massena, New York and
Troutdale, Oregon primary aluminum plants - represent
individually material portions of the accrual at December 31,
1998.  For information about the current status of these two
sites, see the discussion in Item 1 under "Environmental
Compliance."  At most of the other Superfund sites referred to
above where the Company has been identified as a PRP, the Company
is one of many PRPs, and our share of the anticipated cleanup
costs is expected to be small.

In estimating anticipated costs, we consider the extent of our
involvement at each site, joint and several liability provisions
under applicable law, and the likelihood of obtaining
contributions from other PRPs.  Potential insurance recoveries
are uncertain and therefore have not been considered.  Based on
information currently available, we expect to make remediation
expenditures relating to costs currently accrued over the next 15
to 20 years with the majority spent by the year 2002.  We expect
cash provided by operating activities to provide the funds for
environmental capital, operating and remediation expenditures.

Annual capital expenditures for equipment designed for
environmental control purposes averaged approximately $49 million
over the past three years.  Ongoing environmental operating costs
for the same period averaged approximately $81 million per year.
The Company expects operating expenditures for 1999 through 2001
to be approximately $70 million per year.  We estimate annual
capital expenditures for environmental control facilities will be
approximately $55 million in 1999, $17 million in 2000 and $40
million in 2001.  The majority of these expenditures are for the
capital spending program referred to below at our primary
aluminum plant in Massena, New York.

Our spending on environmental compliance will be influenced by
future environmental regulations, including those issued and to
be issued under the Clean Air Act Amendments of 1990.  We are
spending an estimated $200 million at our primary aluminum plant
in Massena, New York for new air emissions controls and a phased
modernization of the plant's production lines.  We expect to
complete this project in the year 2000.  We are accelerating
certain expenditures believed necessary to achieve compliance
with the Clean Air Act's proposed Maximum Achievable Control
Technology standards.  Based on current information, we estimate
that compliance with the Clean Air Act's hazardous air pollutant
standards will require in excess of $250 million of capital
expenditures (including a portion of the expenditures at the New
York plant previously discussed), principally at our U.S. primary
aluminum plants.

For additional information concerning environmental expenditures,
see Note 12 to the consolidated financial statements.


                                20

<PAGE> 21
RESULTS OF OPERATIONS - continued
---------------------
YEAR 2000 READINESS DISCLOSURE
ISSUE
The Year 2000 issue results from computer programs and systems
that rely on two digits rather than four to define the applicable
year.  Such systems may recognize a date using "00" as the year
1900 rather than the year 2000.  As a result, computer systems
could fail to operate or make miscalculations, causing
disruptions of business operations.

Left unrepaired, many of the Company's systems, including
information and computer systems and automated equipment, could
be affected by the Year 2000 issue.  Failure to adequately
address the issue could result in, among other things, the
temporary inability to manufacture products, process
transactions, send invoices, and/or engage in normal business
activities.  We do not believe the products we sell require
remediation to address the Year 2000 issue since they contain no
embedded micro-chips or similar electronic components that are
date-sensitive.

GOAL
The Company has a formal program to address and resolve potential
exposure associated with information and non-information
technology systems arising from the Year 2000 issue.  Our goal is
that none of the Company's critical business operations or
computer processes we share with our suppliers and customers will
be substantially impaired by the advent of the year 2000.

YEAR 2000 REMEDIATION PROJECT
We are preparing our critical, date-sensitive systems, processes
and interfacing software for the year 2000.  Our remediation
project is focusing on the following three areas:

 . Information Systems - Computer hardware and software
  systems, business application software, end-user computing and
  communications infrastructure
 . Non-Information Systems - Manufacturing equipment and the
  mechanical systems in our buildings (e.g., HVAC, security and
  safety systems)
 . Third Parties - Suppliers and customers

In the first two areas, Information Systems and Non-Information
Systems, the project consists of the following five phases:

 . Inventory - identifying our critical, date-sensitive systems
  that are not ready for the year 2000
 . Planning - deciding how to correct those systems
 . Conversion - repairing or replacing computer hardware and
  software to make them ready for the year 2000
 . Pre-Installation Testing - testing those aspects of systems
  that have been repaired or replaced to ensure that year entries
  after 1999 are interpreted properly, date-based calculations are
  computed correctly, and date-based control systems function
  accurately
 . Installation - bringing corrected systems on-line

We measure progress in each phase as a percentage of actual staff
hours expended to staff hours projected for completion of each
phase.  Our progress will change as various aspects of the
project are completed and as new issues are encountered, either
as a result of discovering unanticipated problems in our existing
systems or new computer systems or equipment.  We also are
monitoring our computer and software vendors' readiness
statements to assure that readiness changes in their products do
not negatively affect our systems.


                                 21


<PAGE> 22
RESULTS OF OPERATIONS - continued
---------------------
YEAR 2000 READINESS DISCLOSURE - continued
YEAR 2000 REMEDIATION PROJECT - continued
As of January 31, 1999, our estimated progress with respect to
the five phases of our Year 2000 Remediation Project for
Information and Non-Information Systems was approximately as
follows:

<TABLE>
<CAPTION>
                                     Information   Non-Information
                                       Systems       Systems
                                    -------------------------------
           <S>                           <C>            <C>
           Inventory                     100%           97%
           Planning                       99%           96%
           Conversion                     97%           91%
           Pre-Installation Testing       90%           89%
           Installation                   91%           84%
           Overall                        98%           92%
</TABLE>

With respect to Information Systems, the Company is substantially
complete, with a small amount of work remaining in the testing
and installation phases.  This work is expected to be finished by
the end of the first quarter of 1999.  For Non-Information
Systems, we expect to substantially complete each of the phases
by the end of the second quarter of 1999.

The third area of our remediation project, Third Parties, focuses
on assessment of the business impact on the Company resulting
from the possible failure of our suppliers to provide needed
products and services.  We are assessing the Year 2000 readiness
of all our suppliers who are deemed to be critical to each of our
operating locations, even though the products or services they
provide may not be material to the Company's business as a whole.
We have surveyed over 2,000 suppliers and rated them low, medium
or high risk in their progress toward being ready for the year
2000.  Critical suppliers rated as high risk are receiving our
immediate attention for contingency planning or other measures.

In addition, we are responding to customer inquiries regarding
our Year 2000 program and our progress in addressing the issue.
We expect to evaluate the Year 2000 readiness of certain of our
largest customers as part of our future contingency planning.

As of January 31, 1999, we were on schedule for the Third Party
portion of our remediation project, having completed
approximately 39% of the projected total effort that we currently
estimate will be needed.  Early in the fourth quarter of 1999, we
plan to have either ranked our critical suppliers as low risk, or
to have identified additional sources of supply or to have
developed other contingency plans with respect to those critical
suppliers who are not ranked as low risk.  We will continue
monitoring these suppliers into the year 2000.

The Company and certain of its customers and suppliers use
Electronic Data Interchange (EDI) to perform business
communications.  The Company's EDI system software has been
upgraded to support transactions recorded using a four-digit
year.  Migration of EDI transactions to the four-digit year
format will occur as existing EDI transaction formats are
modified by the Company and its trading partners on a case-by-
case basis.  Some of the Company's customers have indicated they
will not modify EDI transaction sets but will rely on other
techniques such as date interpretation to achieve Year 2000
capability.

We are also addressing the Year 2000 readiness of our
unconsolidated affiliates.

As of January 31, 1999, we had completed approximately 95% of the
total effort that we currently estimate will be required for our
Year 2000 Remediation Project.  This does not include the quality
assurance or contingency planning activities that we expect to
conduct in 1999 with respect to our Information and Non-
Information Systems.


                              22

<PAGE> 23
RESULTS OF OPERATIONS - continued
---------------------
YEAR 2000 READINESS DISCLOSURE - continued
1999 ACTIVITIES
Quality Assurance
-----------------
In addition to completing the five phases of our Year 2000
Remediation Project described above, we expect to validate our
remediation efforts with additional post-installation testing of
certain critical computer systems.  We also expect to respond to
and initiate requests to test with certain of our suppliers and
customers and some government agencies after they ready their
systems.

Contingency Planning
--------------------
Currently, our contingency planning efforts are focused primarily
on working to identify additional sources of supply for critical
materials.  We anticipate that 1999 will be a year of further
contingency planning and monitoring  to determine realistic Year
2000 issues beyond those already addressed.  While it is still
too early to identify a reasonably likely worst case scenario,
our operations, particularly in the Base Materials business,
require significant quantities of energy.  Curtailments or
disruptions of energy supplies would result in full or partial
shutdowns of these operations until energy availability could be
restored.  In addition, an unanticipated loss of energy supply
could result in damage to production equipment.  During 1999, we
will be assessing these and other business disruption risks and
developing contingency plans to mitigate them.  We have not
determined the potential costs of business disruptions from
supplier or customer non-performance.

COSTS
The total cost of our Year 2000 Remediation Project is currently
expected to be approximately $22 million.  As of January 31,
1999, we had incurred approximately $16 million, which includes
labor, equipment and license costs. Our cost projections include
approximate costs for post-installation testing and contingency
planning expected to occur in 1999.


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

<TABLE>
<CAPTION>
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
WORKING CAPITAL
                                                        December 31
                                                      ----------------
                                                       1998      1997
                                                      ----------------
    <S>                                               <C>       <C>
    Working capital                                    $361      $711
    Ratio of current assets to current liabilities    1.3/1     1.6/1
</TABLE>

Working capital was lower in 1998 principally because of reduced
receivables and inventories resulting from dispositions of assets
as part of our restructuring activities.


OPERATING ACTIVITIES

<TABLE>
<CAPTION>
                                                1998     1997     1996
                                              --------------------------
    <S>                                         <C>      <C>      <C>
    Net cash provided by operating activities   $339     $363     $520
</TABLE>


                                    23


<PAGE> 24
LIQUIDITY AND CAPITAL RESOURCES - continued
-------------------------------
OPERATING ACTIVITIES - continued
We used the net cash provided by operating activities for the
past three years primarily to fund capital investments.  The
decline in net cash provided by operating activities in 1997
resulted principally from increases in receivables and
inventories of ongoing operations.


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

<TABLE>
<CAPTION>
                                   1998     1997     1996
                                  ------------------------
        <S>                        <C>      <C>      <C>
        Operational                $155     $152     $195
        Strategic                   186      120      237
                                  ------------------------
        Total capital investments  $341     $272     $432
                                  ========================
</TABLE>


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

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

PACKAGING AND CONSUMER
 . the expansion of a U.S. plastic film plant (completed in
  1997)
 . the modernization of U.S. foil plants (to be completed in
  2000)
 . the acquisition in early 1999 of a producer of flexographic
  separations and plates for the packaging industry in Canada

CONSTRUCTION AND DISTRIBUTION
 . the $25-million expansion of a plant in Europe that will
  produce composite architectural products (to be completed in
  1999)
 . the construction of a new, larger distribution center in
  Seattle to replace the current leased facility (to be completed
  in 1999)

TRANSPORTATION
 . the modification and equipping of a purchased facility in
  Wisconsin to produce aluminum wheels (completed in 1996)
 . the construction (completed in 1997) and expansion of a
  forged wheel plant in Virginia (completed in early 1999)
 . the expansion and modification of a plant in Indiana that
  produces bumpers, engine cradles and other automotive components
  (to be completed in early to mid-1999)

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

PROJECTED 1999
Capital investments planned for 1999 (approximately $450 million)
are primarily for those strategic projects now under way and
continuing operating requirements.  We expect to fund these
capital investments primarily with cash provided by operating
activities.  While the projected 1999 capital investments do not
include amounts for acquisitions, we will evaluate opportunities
that arise.


                               24


<PAGE> 25
LIQUIDITY AND CAPITAL RESOURCES - continued
-------------------------------
FINANCING ACTIVITIES
We believe our available financial resources, together with
internally generated funds, are sufficient to meet our present
and future business needs.  We continue to exceed the financial
ratio requirements contained in our financing arrangements and
expect to do so in the future.  At December 31, 1998, $113
million of our $1.65-billion shelf registration remained
available for the issuance of debt securities.  We also have
committed credit facilities of $650 million, of which $335
million was available at December 31, 1998.  A summary of
significant financing activities over the past three years
follows:

1996
 . called for redemption all outstanding shares of PRIDESSM
  (see Note 8 to the consolidated financial statements), which
  reduced annual dividend requirements by approximately $24 million
 . substantially met our goal to fully fund our pension plans
 . amended our $500-million credit facility to extend the term
  and lower the cost


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

1998
 . reduced debt by approximately $900 million with part of the
  proceeds from sales of assets (including repayment of $100
  million borrowed from credit facilities during 1998)
 . repurchased common stock with part of the proceeds from
  sales of assets (see the Consolidated Statement of Changes in
  Stockholders' Equity)
 . borrowed $415 million from credit facilities
 . terminated a $100-million interest rate swap agreement (see
  Note 7 to the consolidated financial statements)


PORTFOLIO REVIEW
----------------
We have reviewed all of our operations with the goals of
improving focus and profitability, strengthening our financial
position, and thereby increasing shareholder value.  As a result
of this review, we have taken the following actions:
 .  sold operations for $1.7 billion that we determined would
   not meet our strategic focus or would not earn satisfactory
   return over the business cycle
 .  reorganized globally and implemented a global business unit
   structure
 .  reduced debt by $900 million as of the third quarter of 1998
   from the balance at the end of 1996 and lowered interest
   expense by $80 million annually (since then, we made additional
   borrowings to manage current business conditions)
 .  repurchased 9.6 million shares of common stock and lowered
   dividends by $13 million annually
 .  eliminated 600 corporate positions at a savings of $40
   million annually

We expect all of the benefits of the Portfolio Review to be
realized in 1999 and to improve earnings in the years ahead
throughout the business cycle.

Through December 31, 1998, proceeds from operations divested
totaled approximately $1.5 billion, which has been used primarily
to reduce debt and repurchase common stock.  Our goal to complete
a debt reduction of $900 million from the balance at the end of
1996 was accomplished in the third quarter of 1998.  Since then,
we made additional borrowings to manage current business
conditions.  We also repurchased 9.6 million shares of stock in
1998.


                                 25


<PAGE> 26
PORTFOLIO REVIEW - continued
----------------
We recognized operational restructuring charges of $144 million
in 1998 and $75 million in 1997 relating to divestitures and
related activities associated with our Portfolio Review (see Note
2 to the consolidated financial statements).  Included in these
amounts are offsetting favorable impacts of $184 million in 1998
and $58 million in 1997 for the liquidation of certain LIFO
inventory layers relating to divestitures.  Upon finalizing the
sale of the Alabama can stock complex, which is expected in early
1999, our restructuring activities will be essentially complete.
We had liabilities of  $48 million at December 31, 1998 resulting
from our restructuring activities.  We expect to satisfy these
liabilities in 1999 ($32 million) and 2000 ($16 million) with
cash provided by operating activities.  Additional liabilities
for contractual postretirement obligations resulting from
restructuring activities will be satisfied over numerous future
years in conjunction with the Company's funding of its pension
and other postretirement benefit obligations.

We expect to maintain our interest in Latasa, a Latin American
aluminum beverage can manufacturer.  Fundamentally, the business
is in good shape.  However, we are cautious about the impact of
the current economic situation in Brazil (see "Outlook").

We are proceeding with key internal growth projects, such as the
Worsley alumina expansion, new consumer and packaging products,
geographic expansion of our construction products business in
Europe and Asia, and small acquisitions of packaging operations.


OUTLOOK
Assuming more favorable pricing for the balance of the year, our
outlook for the full year 1999 remains in the range of 1998
operating results.  However, for the first quarter, which is
historically our weakest, extremely low primary aluminum prices
will adversely affect results.  While we expect to offset part of
the effect of low prices with improved costs, lower interest
expense and higher value-added primary aluminum sales, operating
earnings for the first quarter of 1999 will be about breakeven.
In addition, our 35%-owned can manufacturing operations in Brazil
have been adversely affected by the devaluation of Brazil's
currency.  While it is too early to forecast the final impact on
first-quarter operating results, we believe it could be about $10
million (after taxes).



                                26


<PAGE> 27
RISK FACTORS
------------
This section should be read in conjunction with Items 1 and 3 of
this report and the preceding portions of this Item.

This report contains (and oral communications made by or on
behalf of the Company may contain) forecasts, projections,
estimates, statements of management's plans, objectives and
strategies for the Company and other forward-looking statements<F1>.
The Company's expectations for the future and related forward-
looking statements are based on a number of assumptions and
forecasts as to world economic growth and other economic
indicators (including rates of inflation, industrial production,
housing starts and light vehicle sales), trends in the Company's
key markets, global aluminum supply and demand conditions, and
aluminum ingot prices, among other items.  By their nature,
forward-looking statements involve risk and uncertainty, and
various factors could cause the Company's actual results to
differ materially from those projected in a forward-looking
statement or affect the extent to which a particular projection
is realized.

The Company is cautious about the outlook for the aluminum
industry, at least through the first half of 1999.  Demand for
primary aluminum products in Asia was 12% lower in 1998 than in
1997, due largely to the economic recession there.  The Company
is forecasting an increase in global primary aluminum consumption
for 1999 of only 1% - 2%.  This growth rate is approximately
equal to the expected growth rate for the global economy for
1999.  If favorable economic conditions resume in Asia, Brazil
and other emerging markets, the Company's long-term outlook for
growth in aluminum consumption is 2.5% - 4% per year.

Economic and/or market conditions other than those forecasted by
the Company in the preceding paragraph could cause the Company's
actual results to differ materially from those projected in a
forward-looking statement or affect the extent to which a
particular projection is realized.  The Company's outlook for
1999 and beyond could be jeopardized by a further delay of
economic recovery in Asia and Brazil, as well as in other
emerging markets.

The following factors also could affect the Company's results:

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

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

[FN]
________________________
<F1>Forward-looking statements can be identified generally as those
containing words such as "should," "will," "will likely result,"
"hope," "forecast," "outlook," "project," "estimate," "expect,"
"anticipate," or "plan" and words of similar effect.
[FN]


                                 27


<PAGE> 28
RISK FACTORS - continued
------------

 . The Company spends substantial capital and operating amounts
  relating to ongoing compliance with environmental laws.  In
  addition, the Company is involved in remedial investigations and
  actions in connection with past disposal of wastes.  Estimating
  future environmental compliance and remediation costs is
  imprecise due to the continuing evolution of environmental laws
  and regulatory requirements and uncertainties about their
  application to the Company's operations, the availability and
  application of technology, the identification of currently
  unknown remediation sites, and the allocation of costs among
  potentially responsible parties.

 . Unanticipated material legal proceedings or investigations,
  or the disposition of those currently pending against the Company
  other than as anticipated by management and counsel, could affect
  the Company's results.

 . Changes in the costs of power, resins, caustic soda, green
  coke and other raw materials can affect results.

 . A number of the Company's operations are cyclical and can be
  influenced by economic conditions.

 . A failure to complete the Company's major capital projects,
  such as expansion of the Worsley Alumina Refinery, as scheduled
  and within budget could affect the Company's results.

 . The Company's results may be adversely affected if it fails
  to timely meet its Year 2000 readiness goals.  The Company's
  assessments of the effort required to meet its Year 2000
  readiness goal and the total cost of its Year 2000 Remediation
  Project are based on the Company's best estimates.  These were
  derived using numerous assumptions of future events, including
  the continued availability of certain resources and other
  factors.  However, we cannot guarantee these estimates are
  accurate and actual results could differ materially from those
  anticipated.  Specific factors that might cause such material
  differences include, but are not limited to, the availability and
  cost of personnel trained in this area, the ability to locate and
  correct all relevant computer codes, and similar uncertainties.
  Also, there can be no guarantee that other companies with which
  the Company does business will be converted on a timely basis or
  their failure to be Year 2000 compliant will not have an adverse
  effect on the Company.

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

 . Since late 1996, the Company has been conducting a Portfolio
  Review of all its operations.  The Company has signed a
  definitive agreement for the sale of its can stock complex in
  Alabama, which consists of a rolling mill, two reclamation plants
  and a coil coating facility.  Title to certain of the assets was
  transferred to the buyer in December 1998.  The final closing for
  the remainder of the assets is scheduled to occur by the end of
  the first quarter of 1999 and is subject to customary closing
  conditions.  The Company has also entered into a definitive
  agreement for the sale of its aluminum extrusion operations in
  Spain, as well as our distribution operations for architectural
  systems located in Spain.  This transaction is subject to
  customary closing conditions and is expected to close by the end
  of the first quarter of 1999.

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


                             28


<PAGE> 29


Item 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF INCOME

(millions, except per share amounts)

============================================================================

----------------------------------------------------------------------------
Years ended December 31                         1998      1997       1996
----------------------------------------------------------------------------
<S>                                            <C>       <C>        <C>
REVENUES                                       $5,859    $6,900     $7,016

COSTS AND EXPENSES
 Cost of products sold                          4,774     5,658      5,856
 Selling, general and administrative expenses     378       406        445
 Depreciation and amortization                    252       368        365
 Interest                                         114       153        160
 Operational restructuring effects - net          144        75         37
----------------------------------------------------------------------------
                                                5,662     6,660      6,863
----------------------------------------------------------------------------

EARNINGS
 Income before income taxes, extraordinary
  loss and cumulative effects of
  accounting changes                              197       240        153
 Taxes on income                                   45       104         49
----------------------------------------------------------------------------
 Income before extraordinary loss and
  cumulative effects of accounting changes        152       136        104
 Extraordinary loss                               (63)        -          -
 Cumulative effects of accounting changes         (23)        -        (15)
----------------------------------------------------------------------------

NET INCOME                                         66       136         89
 Preferred stock dividends                          -         -         36
----------------------------------------------------------------------------


NET INCOME AVAILABLE TO COMMON STOCKHOLDERS    $   66    $  136     $   53
============================================================================

EARNINGS PER SHARE
 Basic:
  Average shares outstanding               69,709,000  73,412,000  63,730,000
  Income before extraordinary loss and
   cumulative effects of accounting changes     $2.18     $1.86     $ 1.06
  Extraordinary loss                            (0.91)        -          -
  Cumulative effects of accounting changes      (0.33)        -      (0.24)
----------------------------------------------------------------------------
  Net income                                    $0.94     $1.86     $ 0.82
============================================================================
 Diluted:
  Average shares outstanding               69,937,000  74,004,000  63,947,000
  Income before extraordinary loss and
   cumulative effects of accounting changes     $2.18     $1.84      $1.06
  Extraordinary loss                            (0.91)        -          -
  Cumulative effects of accounting changes      (0.33)        -      (0.24)
----------------------------------------------------------------------------
  Net income                                    $0.94     $1.84      $0.82
============================================================================

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

The accompanying notes to consolidated financial statements are an integral
part of these statements.
</TABLE>

                                     29


<PAGE> 30

<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET
============================================================================
December 31 (millions)                                      1998      1997
----------------------------------------------------------------------------
<S>                                                       <C>       <C>
ASSETS
 Current assets:
   Cash and cash equivalents                              $   94    $   70
   Receivables:
    Customers, less allowances of $14 (1997 - $16)           710       841
    Other                                                    184       174
----------------------------------------------------------------------------
      Total receivables                                      894     1,015
   Inventories                                               500       744
   Prepaid expenses and other                                114       165
----------------------------------------------------------------------------
      Total current assets                                 1,602     1,994
 Unincorporated joint ventures and associated companies    1,478     1,381
 Property, plant and equipment - net                       2,024     2,954
 Deferred taxes                                              363       249
 Other assets                                                667       648
----------------------------------------------------------------------------

Total assets                                              $6,134    $7,226
============================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY
 Current liabilities:
   Trade payables                                         $  401    $  512
   Accrued compensation and related amounts                  183       202
   Payables to unincorporated joint ventures and
    associated companies                                      75        81
   Commercial paper                                           82         -
   Notes payable to banks                                     34        67
   Long-term debt                                            196       142
   Other liabilities                                         270       279
----------------------------------------------------------------------------
      Total current liabilities                            1,241     1,283
 Long-term debt                                            1,035     1,501
 Postretirement benefits                                   1,029     1,043
 Environmental                                               161       158
 Deferred taxes                                              272       269
 Other liabilities                                           202       233
 Stockholders' equity:
   Common stock                                            1,533     1,521
   Retained earnings                                       1,222     1,253
   Treasury stock, at cost                                  (526)        -
   Accumulated other comprehensive income                    (35)      (35)
----------------------------------------------------------------------------
      Total stockholders' equity                           2,194     2,739
 Contingent liabilities and commitments (Note 12)
----------------------------------------------------------------------------
Total liabilities and stockholders' equity                $6,134    $7,226
============================================================================

The accompanying notes to consolidated financial statements are an integral
part of these statements.
</TABLE>


                                     30

<PAGE> 31
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF CASH FLOWS
============================================================================
Years ended December 31 (millions)                      1998   1997   1996
----------------------------------------------------------------------------
<S>                                                    <C>     <C>    <C>
OPERATING ACTIVITIES
 Net income                                            $   66  $ 136  $  89
 Adjustments to reconcile to net cash provided by
   operating activities:
    Depreciation and amortization                         252    368    365
    Operational restructuring effects                     144     75     37
    Extraordinary loss                                     63      -      -
    Cumulative effects of accounting changes               23      -     15
    Other                                                  (3)    28     26
    Changes in operating assets and liabilities net of
     effects from acquisitions and dispositions:
      Accounts payable, accrued and other liabilities    (106)   105    (64)
      Receivables                                         (53)  (194)    67
      Inventories                                          78   (108)    93
      Environmental and restructuring liabilities         (52)   (48)   (46)
      Other                                               (73)     1    (62)
----------------------------------------------------------------------------
Net cash provided by operating activities                 339    363    520

INVESTING ACTIVITIES
 Capital investments:
   Operational                                           (155)  (152)  (195)
   Strategic                                             (186)  (120)  (237)
 Sales of assets - operational restructuring            1,147    367      -
 Other                                                    (38)    (3)    (5)
----------------------------------------------------------------------------
Net cash provided by (used in) investing activities       768     92   (437)

FINANCING ACTIVITIES
 Proceeds from long-term debt                             415      -     40
 Reduction of long-term debt and other financing
  liabilities                                            (929)  (245)  (105)
 Increase (decrease) in short-term borrowings              47   (138)   111
 Cash dividends paid                                     (100)   (99)  (135)
 Repurchase of common stock                              (526)     -      -
 Stock options exercised                                   10     59      5
----------------------------------------------------------------------------
Net cash used in financing activities                  (1,083)  (423)  ( 84)

CASH AND CASH EQUIVALENTS
 Net increase (decrease)                                   24     32   (  1)
 At beginning of year                                      70     38     39
----------------------------------------------------------------------------

At end of year                                         $   94  $  70  $  38
============================================================================

Supplemental disclosure of cash flow information
 Cash paid during the year for:
   Interest                                            $  134  $ 164  $ 176
   Income taxes                                           117     21      2
============================================================================

The accompanying notes to consolidated financial statements are an integral
part of these statements.
</TABLE>


                                       31

<PAGE> 32
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
============================================================================
----------------------------------------------------------------------------
Years ended December 31                         1998     1997     1996
----------------------------------------------------------------------------
                                                <C>      <C>      <C>
SHARES (thousands)
 Common stock
   Balance at January 1                         73,909   72,719   63,598
   Shares issued under employee benefit plans      196    1,190      101
   Shares issued on conversion/redemption of
    preferred stock                                  -        -    9,020
----------------------------------------------------------------------------
   Balance at December 31                       74,105   73,909   72,719
----------------------------------------------------------------------------
 Treasury stock
   Balance at January 1                              -        -        -
   Purchased and held as treasury stock         (9,648)       -        -
----------------------------------------------------------------------------
   Balance at December 31                       (9,648)       -        -
----------------------------------------------------------------------------
 Net common shares outstanding                  64,457   73,909   72,719
============================================================================
DOLLARS (millions)
 Common stock
   Balance at January 1                         $1,521   $1,451      941
   Shares issued under employee benefit plans       12       70        5
   Shares issued on conversion/redemption of
    preferred stock                                  -        -      505
----------------------------------------------------------------------------
   Balance at December 31                       $1,533   $1,521   $1,451
----------------------------------------------------------------------------
 Retained earnings
   Balance at January 1                         $1,253   $1,220   $1,256
   Net income                                       66      136       89
   Cash dividends declared:
    Preferred stock (PRIDES)                         -        -      (36)
    Common stock                                   (97)    (103)     (89)
----------------------------------------------------------------------------
   Balance at December 31                       $1,222   $1,253   $1,220
----------------------------------------------------------------------------
 Treasury stock
   Balance at January 1                         $    -   $    -   $    -
   Purchased and held as treasury stock           (526)       -        -
----------------------------------------------------------------------------
   Balance at December 31                       $ (526)  $    -   $    -
----------------------------------------------------------------------------
 Accumulated other comprehensive income (loss)
   Balance at January 1                         $  (35)  $  (37)  $  (85)

   Foreign currency translation adjustments          5        -      (16)
    Income taxes                                    (5)       2        1
   Pension liability adjustment                      -        -       97
    Income taxes                                     -        -      (34)
                                              ------------------------------
   Other comprehensive income                        -        2       48
----------------------------------------------------------------------------
   Balance at December 31                       $  (35)  $  (35)  $  (37)
----------------------------------------------------------------------------
 Total stockholders' equity                     $2,194   $2,739   $2,634
============================================================================
COMPREHENSIVE INCOME  (millions)
 Net income                                     $   66   $  136   $   89
 Other comprehensive income                          -        2       48
----------------------------------------------------------------------------
 Comprehensive income                           $   66   $  138   $  137
============================================================================

The accompanying notes to consolidated financial statements are an integral
part of these statements.
</TABLE>


                                   32


<PAGE> 33
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In the tables, dollars are in millions, except per share
amounts.  Certain amounts have been reclassified to conform to
the 1998 presentation.)

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

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

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

Actual results could differ from those estimates.

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

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

INVENTORIES
Inventories are stated at the lower of cost or market.  Inventory
costs were determined by the last-in, first-out (LIFO); first-in,
first-out (FIFO); and average-cost methods.  LIFO method
inventories were $178 million at the end of 1998 (1997 - $270
million).  FIFO and average-cost method inventories were $322
million at the end of 1998 (1997 - $474 million).  Inventories
would increase by $221 million at the end of 1998 (1997 - $425
million) if the FIFO method were applied to LIFO method
inventories.

The favorable impact of the liquidation of certain LIFO layers
that occurred as a result of the Company's divestitures ($184
million in 1998 and $58 million in 1997) is included in
"Operational restructuring effects - net" in the Consolidated
Statement of Income.  In 1996, the liquidation of certain LIFO
layers decreased cost of products sold by $30 million.  The
inventories in these LIFO layers were acquired at lower costs in
prior years.

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

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


                                 33


<PAGE> 34
1.  ACCOUNTING POLICIES - continued
ENVIRONMENTAL EXPENDITURES
Remediation costs are accrued when it is probable that such
efforts will be required and the related costs can be reasonably
estimated.

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

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

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

In 1996, the Company adopted Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of."  The
cumulative effect of adopting the standard was a loss of $15
million.  The loss was for the impairment of certain real estate
held for sale at the beginning of 1996, principally undeveloped
land.

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

COMPREHENSIVE INCOME
In 1998, the Company adopted the Financial Accounting Standards
Board's (FASB) Statement No. 130, "Reporting Comprehensive
Income."  Statement No. 130 establishes new rules for the
reporting and display of comprehensive income and its components;
however, adopting the Statement had no impact on the Company's
net income or stockholders' equity.  Statement No. 130 requires
the Company's foreign currency translation adjustments, which
prior to adoption were reported separately in stockholders'
equity, to be included in other comprehensive income.  Prior-year
financial statements have been reclassified to conform to the
requirements of Statement No. 130.  Comprehensive income is
presented in the Consolidated Statement of Changes in
Stockholders' Equity.

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

Compensation expense is recognized for performance-based stock
options if it becomes probable that the performance condition
will be satisfied.  Compensation expense is the difference
between the market price of the common stock when the performance
condition is satisfied and the exercise price of the stock
options.


                               34


<PAGE> 35
1.  ACCOUNTING POLICIES - continued
ACCOUNTING FOR THE COSTS OF DEVELOPING OR OBTAINING INTERNAL-USE
SOFTWARE
In 1998, the AcSEC issued SOP 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use."  The
SOP requires qualifying computer software costs incurred in
connection with obtaining or developing software for internal use
to be capitalized.  The Company currently capitalizes the costs
of purchased software and expenses the costs of internally
developed software.  The Company plans to adopt the SOP in 1999
on a prospective basis when it becomes effective.  The Company
has not yet determined the impact this statement will have on its
financial position or results of operations.

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
In 1998, the FASB issued Statement No. 133, "Accounting for
Derivative Instruments and Hedging Activities."  This statement
establishes new accounting and reporting standards for derivative
instruments and hedging activities.  The Company must adopt this
statement by January 1, 2000.  The Company has not determined the
impact this statement will have on its financial position or
results of operations.


2.  OPERATIONAL RESTRUCTURING
In 1998, the Company sold the following:

 .    U.S. recycling operations
 .    aluminum extrusion facilities in Canada
 .    European rolling mill operations
 .    Illinois sheet and plate plant
 .    North American aluminum beverage can operations

In 1997, the Company sold the following:

 .    U.S. residential construction products business
 .    aluminum reclamation plant in Virginia
 .    aluminum extrusion plants in Virginia and Texas
 .    coal properties in Kentucky
 .    one-half of its wholly owned interest in a rolling mill and
     related assets in Canada
 .    aluminum powder and paste plant in Kentucky

In 1996, operational restructuring costs resulted from the
closing of a can plant in Texas.

In early 1999, the Company expects to finalize the sale of its
Alabama can stock complex.  The carrying amount of the related
net assets was $216 million at December 31, 1998.

Financial information for 1998, 1997 and 1996 relating to
operations divested and the Alabama can stock complex is
reflected in the Restructuring category in Note 11.  Customer
revenues generated by these entities were $1.4 billion in 1998,
$2.7 billion in 1997 and $3.1 billion in 1996.  Depreciation
expense in 1998 was reduced $65 million as a result of ceasing
depreciation on assets held for sale relating to the
divestitures.

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

After finalizing the sale of the Alabama can stock complex, the
Company's restructuring activities will be essentially complete.
As of the end of 1998, the only assets remaining in the
Restructuring category relate to the  Alabama can stock complex.
In accordance with the terms of the definitive agreement to sell
this complex, the Company is operating the facility on behalf of
the purchasers for a management fee until the final closing.  As
a result, the Company expects no revenues or operating results to
be reflected in the Restructuring category in 1999.


                              35


<PAGE> 36
2.  OPERATIONAL RESTRUCTURING - continued
The Company recognized the following operational restructuring
charges:

<TABLE>
<CAPTION>
                                        1998   1997    1996
                                      -----------------------
   <S>                                  <C>     <C>     <C>
   Employee terminations                $ 39    $49     $12
   Additional postretirement benefits    105      -      19
   Asset dispositions: Losses            337     85       5
                       (Gains)          (349)   (64)      -
   Other                                  12      5       1
                                      -----------------------
                                        $144    $75     $37
                                      =======================
</TABLE>

The charges for employee terminations recorded in 1998, 1997 and
1996 were principally for severance and related costs for
approximately 2,000 salaried and hourly employees.  The employees
worked principally at domestic plants.  Approximately 600
employees worked at corporate headquarters.  Employees terminated
in each period were 1,385 in 1998, 498 in 1997 and 65 in 1996.

An analysis of the accrual for restructuring liabilities follows:

<TABLE>
<CAPTION>
                               1998      1997      1996
                            ------------------------------
   <S>                         <C>       <C>       <C>
   Balance at January 1        $ 44      $ 12      $  -
     Accruals                    44        54        13
     Payments                   (40)      (22)       (1)
                            ------------------------------
   Balance at December 31      $ 48      $ 44      $ 12
                            ==============================
</TABLE>

Liabilities at December 31, 1998 relating to the Company's
restructuring activities are expected to be satisfied in 1999
($32 million) and 2000 ($16 million) with cash provided by
operating activities.  Additional liabilities relating to
contractual postretirement obligations are reflected in
postretirement benefits on the balance sheet and will be settled
over numerous future years in conjunction with the Company's
funding of its pension and other postretirement benefit
obligations.

The Company used proceeds from completed divestitures for debt
repayments and repurchases of common stock (see Notes 3 and 8).


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




                               36


<PAGE> 37
4.  EARNINGS PER SHARE
The following reconciles income and average shares for the basic
and diluted earnings per share computations for "Income before
extraordinary loss and cumulative effects of accounting changes."

<TABLE>
<CAPTION>
                                                1998         1997         1996
                                        ---------------------------------------
<S>                                       <C>           <C>          <C>
Income (numerator):
 Income before extraordinary loss and
  cumulative effects of accounting
  changes                                       $152         $136         $104
 Less convertible preferred stock
  (PRIDES) dividend                                -            -           36
                                        ---------------------------------------
 Basic and diluted income                       $152         $136          $68
                                        =======================================
Average shares (denominator):

 Basic                                    69,709,000   73,412,000   63,730,000

 Effect of dilutive securities:
  Stock options                              228,000      592,000      217,000
                                        ---------------------------------------
 Diluted                                  69,937,000   74,004,000   63,947,000
                                        =======================================
Per share amounts for income before
 extraordinary loss and cumulative
 effects of accounting changes:
  Basic earnings per share                     $2.18        $1.86        $1.06
  Diluted earnings per share                    2.18         1.84         1.06
Antidilutive securities excluded:
 Convertible preferred stock (PRIDES)              -            -    8,950,000
 Stock options                             2,452,000      505,000    2,665,000
</TABLE>


5.  UNINCORPORATED JOINT VENTURES AND ASSOCIATED COMPANIES
Investments in unincorporated joint ventures that produce alumina
and primary aluminum consist of the following:

<TABLE>
<CAPTION>
                                                         December 31
                                                    -------------------
                                                        1998     1997
                                                    -------------------
     <S>                                              <C>      <C>
     Current assets                                   $   52   $   42
     Current liabilities                                 (89)     (66)
     Property, plant and equipment and other assets    1,203    1,078
                                                    -------------------
     Net investment                                   $1,166   $1,054
                                                    ===================
</TABLE>

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


                                  37


<PAGE> 38
5.  UNINCORPORATED JOINT VENTURES AND ASSOCIATED COMPANIES - continued
Foreign-based associated companies produce bauxite, alumina,
primary aluminum, hydroelectric power and fabricated aluminum
products.  Investments in these companies were $312 million at
the end of 1998 (1997 - $327 million), including advances of $59
million (1997 - $50 million).  Summarized financial information
related to these entities follows:

<TABLE>
<CAPTION>
                                                   Years ended December 31
                                                 ---------------------------
                                                      1998   1997   1996
                                                 ---------------------------
     <S>                                            <C>      <C>    <C>
     Net sales                                      $1,195   $999   $950
     Cost of products sold                           1,115    910    814
     Net income (loss)                                 (27)   (14)    31
     Reynolds' share of net income (loss):
       Included in revenues (pre-tax)               $  (14)  $ (5)  $ 21
       Included in cost of products sold (pre-tax)      12     15     11
       Included in tax provision                        (1)    (7)   (14)
                                                 ---------------------------
                                                    $   (3)  $  3   $ 18
</TABLE>

Part of Reynolds' share of the net income (loss) is reflected in
cost of products sold (on a pre-tax basis) as an adjustment to
the cost of raw materials purchased from certain of these
entities.

<TABLE>
<CAPTION>

                                  December 31
                               -----------------
                                 1998     1997
                               -----------------
     <S>                         <C>    <C>
     Current assets              $810   $  891
     Noncurrent assets            977    1,015
     Current liabilities          690      733
     Noncurrent liabilities       456      470
     Stockholders' equity         641      703
</TABLE>

6.   PROPERTY, PLANT AND EQUIPMENT (At Cost)

<TABLE>
<CAPTION>
                                                           December 31
                                                       -------------------
                                                          1998       1997
                                                       -------------------
     <S>                                                <C>        <C>
     Land, land improvements and mineral properties     $  244     $  289
     Buildings and leasehold improvements                  781      1,045
     Machinery and equipment                             3,087      5,044
     Construction in progress                              170        155
                                                       -------------------
                                                         4,282      6,533
     Less allowances for depreciation and amortization   2,258      3,579
                                                       -------------------
     Net property, plant and equipment                  $2,024     $2,954
                                                       ===================
</TABLE>



                                  38

<PAGE> 39
7.  FINANCING ARRANGEMENTS

<TABLE>
<CAPTION>
                                                              December 31
                                                         -------------------
                                                             1998    1997
                                                         -------------------
     <S>                                                   <C>     <C>
     Public debt securities:
       Medium-term notes                                   $  329  $  902
       9-3/8% debentures due 1999                             100     100
       9% debentures due 2003                                  21     100
       6-5/8% amortizing notes                                228     285
       Industrial and environmental control revenue bonds     227     237
     Other arrangements:
       Credit facilities                                      315       -
       Mortgages and other notes payable                       11      19
                                                         -------------------
                                                            1,231   1,643
     Amounts due within one year                              196     142
                                                         -------------------
     Long-term debt                                        $1,035  $1,501
                                                         ===================
</TABLE>

Long-term debt at December 31, 1998 matures as follows:

                  1999            $196
                  2000             153
                  2001             484
                  2002              70
                  2003              58
                  2004 - 2025      270

The medium-term notes, 9% debentures and 9-3/8% debentures were
issued under a $1.65-billion shelf registration.  The medium-term
notes bear interest at an average fixed rate of 9% and have
maturities ranging from 1999 to 2013.  At December 31, 1998, $113
million of debt securities remained unissued under the shelf
registration.  A portion of this fixed-rate debt has been
effectively converted to a variable rate through the use of a
$100-million interest rate swap that matures in 2001.  Under the
swap, payments are received based on a fixed rate (6%) and made
based on a variable rate (5.7% at December 31, 1998).  The
variable rate is based on the London Interbank Offer Rate
(LIBOR).  The differential to be paid or received as interest
rates change is accrued and recognized as an adjustment of
interest expense.  The fair value of this agreement and its
effect on interest expense was not material. The Company
terminated a $100-million interest rate swap in 1998.  The small
gain realized will be recognized over the remainder of the
designated hedge period ending 2001.

The 6-5/8% amortizing notes were issued at a discount (99.48%)
and have an effective interest rate of 6.7%.  The notes require
annual principal repayments of $57 million between 1999 and 2002.

Industrial and environmental control revenue bonds consist of
variable-rate debt with interest rates averaging 4.2% at December
31, 1998.  The variable rate is based on market interest rates.
These bonds require principal repayments in lump sums
periodically between 1999 and 2025.  Letters of credit issued by
banks support these bonds.

The credit facilities have variable interest rates (6.7% at
December 31, 1998) and mature in 2001.  The variable rate is
based on LIBOR.  The Company can borrow up to $650 million under
these facilities and pays an annual commitment fee of .1% on the
unused portion.


                                 39


<PAGE> 40
7.  FINANCING ARRANGEMENTS - continued
Mortgages and other notes payable consist of fixed-rate debt with
an average interest rate of 5%.  They require principal repayment
between 1999 and 2008.

Certain financing arrangements contain restrictions that
primarily consist of requirements to maintain specified financial
ratios.  These restrictions do not inhibit operations or the use
of fixed assets.  At December 31, 1998, the Company exceeded all
such requirements.

The fair value of long-term debt was approximately $1.2 billion
at the end of 1998 (1997 - $1.8 billion).  This value was
determined by using discounted cash flow analysis.

Interest capitalized was $12 million during 1998 (1997 - $8
million, 1996 - $13 million).

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

<TABLE>
<CAPTION>
                                       December 31
                                  --------------------
                                    1998        1997
                                  --------------------
          <S>                       <C>         <C>
          Notes payable to banks    4.2%        4.5%
          Commercial paper          5.9           -
</TABLE>


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

On December 31, 1996, the Company called for redemption all its
outstanding PRIDES.  As a result of the call, the Company issued
a total of 9,019,990 shares of common stock upon the redemption
or conversion of all of the PRIDES.  A total of 4,673,800 shares
of common stock were issued in redemption of 5,699,756 shares of
PRIDES.  The redemption rate of .82 of a share of common stock
for each share of PRIDES was based on a call price of $48.077 per
share and a common stock market price of $58.79 per share
(determined as provided in the PRIDES governing documents).  In
lieu of redemption, holders of 5,300,244 shares of PRIDES elected
to convert their shares of PRIDES (on or before the redemption
date) into 4,346,190 shares of common stock (at a conversion rate
of .82 of a share of common stock for each share of PRIDES).
Dividends declared on each share of PRIDES were $3.31 in 1996.

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

The Company has authorization to repurchase up to 18 million
shares of common stock of which approximately 9.6 million shares
have been repurchased through December 31, 1998.  (See the
Consolidated Statement of Changes in Stockholders' Equity for
additional share repurchase information.)



                                40


<PAGE> 41
8.  STOCKHOLDERS' EQUITY - continued
STOCK OPTIONS
The Company has a non-qualified stock option plan under which key
employees may be granted stock options at a price equal to the
fair market value at the date of grant.  Other than the
performance-based options discussed below, the stock options
outstanding at December 31, 1998 vest in one year and are
exercisable between one year and ten years from the date of
grant.  The range of exercise prices for the stock options
outstanding at December 31, 1998 was $45 to $64 and their
weighted-average remaining contractual life was 6 years.  A
summary of stock option activity and related information follows
(options are in thousands):

<TABLE>
<CAPTION>

                                  1998     1997     1996
                              -----------------------------
   <S>                           <C>      <C>      <C>
   Outstanding at January 1      4,828    5,318    4,680
   Granted                         633      711      750
   Exercised                      (192)  (1,190)    (103)
   Canceled                        (15)     (11)      (9)
                              -----------------------------
   Outstanding at December 31    5,254    4,828    5,318
   Exercisable at December 31    4,621    4,121    4,569
   Available for grant             304      923    1,630

   Weighted-average prices:

     Outstanding at January 1      $55      $52      $52
     Granted                        62       64       55
     Exercised                      47       50       39
     Canceled                       62       56       52
     Outstanding at December 31     56       55       52
     Exercisable at December 31     55       53       52
</TABLE>

In 1996, the Company also granted 150,000 performance-based stock
options at an exercise price of $53.50 per share.  The stock
options will not be exercisable unless, on or before September
30, 1999, the closing price of the common stock equals or exceeds
$80.25 per share for 30 consecutive days.  If this condition is
satisfied, the options may be exercised any time before March 31,
2000.

Pro forma net income and earnings per share have been prepared
based on expensing (after tax) the estimated fair value of stock
options granted during 1998, 1997 and 1996.  The estimated fair
value of the stock options was determined by using a Black-
Scholes option-pricing model.  The estimated fair values and the
weighted-average assumptions used to estimate those values
follow:


<TABLE>
<CAPTION>
                                                            Performance-
                                                               Based
                                       Stock Options          Options
                             -------------------------------  --------
                                 1998      1997      1996       1996
                             -------------------------------  --------
<S>                            <C>       <C>        <C>       <C>
Risk-free interest rate          5.5%      6.4%       6.9%      6.5%
Dividend yield                   2.2%      2.2%       2.6%      2.1%
Volatility factor of the
 expected market price of
 the Company's common stock      .256      .265       .278      .262
Expected life of the option    6 years   6 years    6 years   3 years
Estimated fair value of
 each stock option granted     $17.53    $19.53     $16.97    $11.73
</TABLE>


                                     41


<PAGE> 42
8.  STOCKHOLDERS' EQUITY - continued
STOCK OPTIONS - continued
The Black-Scholes option-pricing model was not developed for use
in valuing employee stock options.  This model was developed for
use in estimating the fair value of traded options that have no
vesting restrictions and are fully transferable.  In addition, it
requires the input of highly subjective assumptions including
expectations of future dividends and stock price volatility.  The
assumptions are only used for making the required fair value
estimate and should not be considered as indicators of future
dividend policy or stock price appreciation.  Because changes in
the subjective input assumptions can materially affect the fair
value estimate and because the employee stock options have
characteristics significantly different from those of traded
options, the use of the Black-Scholes option-pricing model may
not provide a reliable single measure of the employee stock
options.

The pro forma information follows:

<TABLE>
<CAPTION>
                                             1998   1997   1996
                                          -----------------------
    <S>                                     <C>    <C>     <C>
    Pro forma net income                    $  59  $ 127   $  79
    Pro forma earnings per share:  Basic     0.84   1.73    0.67
                                   Diluted   0.84   1.72    0.67
</TABLE>


SHAREHOLDER RIGHTS PLAN
In 1997, the Company adopted a new shareholder rights plan that
replaced an existing, similar plan that was adopted in 1987 and
expired in 1997, in accordance with its terms.  Under the new
plan, as subsequently amended, each share of common stock has one
right attached and the rights trade with the common stock.  The
rights are exercisable only if a person or group buys 15% or more
of the Company's common stock, or announces a tender offer for
15% or more of the outstanding common stock.  Each right will
entitle a holder to buy one-hundredth of a share of the Company's
Series A Junior Participating Preferred Stock at an exercise
price of $300.

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

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

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



                                  42


<PAGE> 43
9.  PENSIONS AND OTHER POSTRETIREMENT BENEFITS
The following information is disclosed in accordance with the
requirements of Statement of Financial Accounting Standards No.
132, "Employers' Disclosures about Pensions and Other
Postretirement Benefits," which the Company adopted in 1998.

<TABLE>
<CAPTION>
                                         Pension Benefits    Other Benefits
                                        ------------------  ----------------
                                           1998    1997       1998    1997
                                        ------------------  ----------------
<S>                                       <C>     <C>       <C>      <C>
CHANGE IN BENEFIT OBLIGATION

Benefit obligation at beginning of year   $2,081  $1,916    $   899  $   852
Service cost                                  36      37          7        7
Interest cost                                151     147         62       64
Amendments                                     9      (5)         -        1
Actuarial losses                             166     148         60       41
Restructuring                                 39     (43)         5       (5)
Benefits paid                               (133)   (119)       (69)     (61)
                                        ------------------  ----------------
Benefit obligation at end of year         $2,349  $2,081    $   964  $   899
                                        ------------------  ----------------


CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning
 of year                                  $2,099  $1,876    $     -  $     -
Actual return on plan assets                 295     315          -        -
Company contributions                         43      80         69       61
Restructuring                                (27)    (53)         -        -
Benefits paid                               (133)   (119)       (69)     (61)
                                        ------------------  ----------------
Fair value of plan assets at end of year  $2,277  $2,099    $     -  $     -
                                        ------------------  ----------------

Funded status of the plans                $  (72) $   18    $  (964) $  (899)
Unrecognized net actuarial loss (gain)       101      76         27      (31)
Unrecognized prior service cost               66     117        (67)    (109)
                                        ------------------  ----------------
Prepaid (accrued) benefit cost            $   95  $  211    $(1,004) $(1,039)
                                        ==================  ================

AMOUNTS RECOGNIZED IN THE
 CONSOLIDATED BALANCE SHEET
Prepaid benefit cost                      $  111  $  217    $     -  $     -
Accrued benefit liability                    (68)    (12)    (1,004)  (1,039)
Intangible asset                              52       6          -        -
                                        ------------------  ----------------
Net amount recognized                     $   95  $  211    $(1,004) $(1,039)
                                        ==================  ================


WEIGHTED-AVERAGE ASSUMPTIONS
 AS OF DECEMBER 31
Discount rate                              6.75%   7.25%      6.75%    7.25%
Expected return on plan assets             9.25    9.25          -        -
Rate of compensation increase              4.50    4.50          -        -
</TABLE>

For measurement purposes, a 5.75% annual rate of increase in the
per capita cost of covered health care benefits was assumed for
1999.  The rate was assumed to decrease gradually to 5% in 2002
and remain at that level thereafter.



                                   43


<PAGE> 44

9.  PENSIONS AND OTHER POSTRETIREMENT BENEFITS - continued

<TABLE>
<CAPTION>
                                     Pension Benefits    Other Benefits
                                    ------------------ ------------------
                                     1998  1997  1996   1998  1997  1996
                                    ------------------ ------------------
<S>                                  <C>   <C>   <C>     <C>   <C>  <C>
COMPONENTS OF NET PERIODIC
 BENEFIT COST
Service cost                         $ 36  $ 37  $ 38    $ 7   $ 7  $ 8
Interest cost                         151   147   138     62    64   62
Expected return on plan assets       (175) (158) (151)     -     -    -
Amortization of prior service cost     14    19    17    (13)  (17) (19)
Recognized net actuarial loss (gain)   13    11    16      -    (1)   -
                                    ------------------ ------------------
Benefit cost                         $ 39  $ 56  $ 58    $56   $53  $51
                                    ================== ==================
</TABLE>

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

<TABLE>
<CAPTION>
                                                    1%         1%
                                                 Increase   Decrease
                                                ---------- ----------
   <S>                                             <C>       <C>
   Effect on total of service and interest cost
     components in 1998                            $ 4       $ (3)
   Effect on postretirement benefit obligation
     as of December 31, 1998                       $51       $(46)
</TABLE>


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

<TABLE>
<CAPTION>
                             1998     1997     1996
                           ---------------------------
        <S>                  <C>     <C>       <C>
        Current:
          Federal            $  6    $  13     $  3
          Foreign              57       71        3
          State                 1        1        1
                           ---------------------------
          Total current        64       85        7
                           ---------------------------

        Deferred:
          Federal             (31)      (7)       2
          Foreign              23       21       28
          State               (12)      (2)      (2)
                           ---------------------------
          Total deferred      (20)      12       28
                           ---------------------------
        Equity income           1        7       14
                           ---------------------------
        Total                $ 45     $104      $49
                           ===========================
</TABLE>

The deferred tax provision includes domestic carryforward
benefits of $8 million (1997 - $2 million, 1996 - $28 million).


                            44


<PAGE> 45
10.  TAXES ON INCOME - continued
The effective income tax rate varied from the U.S. statutory rate
as follows:

<TABLE>
<CAPTION>

                                               1998  1997  1996
                                             --------------------
    <S>                                         <C>   <C>   <C>
    U.S. rate                                   35%   35%   35%
    Income taxed at other than the U.S. rate    (4)    9     2
    Percentage depletion                        (3)   (2)   (3)
    Credits and other tax benefits              (6)    -     -
    State income taxes and other                 1     1    (2)
                                             --------------------
    Effective rate                              23%   43%   32%
                                             ====================
</TABLE>

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

Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used
for income tax purposes.  At December 31, 1998, the Company had
$844 million (1997 - $897 million) of deferred tax assets and
$694 million (1997 - $827 million) of deferred tax liabilities
that have been netted with respect to tax jurisdictions for
presentation purposes.  The significant components of these
amounts were:

<TABLE>
<CAPTION>
                                           1998              1997
                                    ---------------------------------------
                                      Asset  Liability   Asset  Liability
                                    ---------------------------------------
<S>                                    <C>     <C>        <C>     <C>
Retiree health benefits                $381    $  -       $392    $  -
Tax carryforward benefits               141       -        170       -
Environmental and restructuring costs   116      (2)       109      (2)
Other                                    39      78         63      70
Tax over book depreciation             (235)    196       (376)    201
Valuation reserve relating to tax
 carryforward benefits                  (20)      -        (19)      -
                                    ---------------------------------------
Total deferred tax assets and
 liabilities                            422     272        339     269
Amount included as current in balance
 sheet                                   59       -         90       -
                                    ---------------------------------------
Noncurrent deferred tax assets and
 liabilities                           $363    $272       $249    $269
                                    =======================================
</TABLE>

The tax carryforward benefits can be carried forward indefinitely
except for $67 million that will expire primarily between 2003
and 2013.  A valuation reserve of $20 million relating to certain
of these benefits has been recorded. Alternatives continue to be
evaluated that may result in the ultimate realization of a
portion of these reserved assets.

Income taxes have not been provided on the undistributed earnings
($973 million) of foreign subsidiaries. The Company uses these
earnings to finance foreign expansion, reduce foreign debt or
support foreign operating requirements.

The geographic components of income (loss) before income taxes,
extraordinary loss and the cumulative effects of accounting
changes were as follows:


<TABLE>
<CAPTION>
                  1998    1997    1996
                ------------------------
      <S>         <C>     <C>     <C>
      Domestic    $(86)   $ 21    $  4
      Foreign      283     219     149
                ------------------------
                  $197    $240    $153
                ========================
</TABLE>


                              45


<PAGE> 46
11.  COMPANY OPERATIONS
The Company is organized into four market-based, global business
units.  The global business units and their principal products
are:

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

The Restructuring category includes operations sold and the
Company's Alabama can stock complex that we expect to finalize
the sale of in early 1999.  (See Note 2 for a discussion of the
Company's restructuring activities.)

The Other category consists principally of the corporate
headquarters (and related selling, general and administrative
expenses), operations in emerging markets, European extrusion
operations, investments in Canada, Latin America and Saudi Arabia
and real estate.  Part of the real estate, principally
undeveloped land, is held for sale and is expected to be sold
over the next few years.  The carrying amount for these held-for-
sale assets was $42 million at December 31, 1998.  Expenses
relating to holding these assets, principally real estate taxes,
were approximately $1 million per year in each of the last three
years.

The comparative periods of 1997 and 1996 have been restated for
the following changes:

 . the Alabama can stock operation was reclassified from the
  Other category to the Restructuring category as we expect to
  finalize the sale in early 1999
 . the investment in Latin American can operations was
  reclassified from the Restructuring category to the Other
  category as the Company expects to maintain its interest in these
  operations (no operational restructuring reserves were recorded
  as a result of our initial classification of this investment in
  the Restructuring category)


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

Assets for each global business unit include:

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

Current liabilities for each global business unit include:

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

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


                               46

<PAGE> 47
11.  COMPANY OPERATIONS - continued


<TABLE>
<CAPTION>
                                                 Packaging   Construction
                                        Base        and          and
1998                                 Materials   Consumer    Distribution
---------------------------------------------------------------------------
<S>                                   <C>         <C>           <C>
Customer aluminum shipments              668         141         184
Customer revenues:
  Aluminum                            $1,058      $  787        $681
  Nonaluminum                            402         605         314
Intersegment revenues - aluminum         572           -           -
---------------------------------------------------------------------------
Total revenues                        $2,032      $1,392        $995
===========================================================================
Operating income (loss)               $  290      $  156        $ 39
Interest expense
---------------------------------------------------------------------------
Income before income taxes,
  extraordinary loss and cumulative
  effects of accounting changes
===========================================================================
Equity income (loss)                  $    -      $    -        $  -
Depreciation and amortization            138          44           7


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

1997
---------------------------------------------------------------------------
Customer aluminum shipments              513         142         166
Customer revenues:
  Aluminum                            $  923      $  797        $614
  Nonaluminum                            405         602         328
Intersegment revenues - aluminum       1,187           -           -
---------------------------------------------------------------------------
Total revenues                        $2,515      $1,399        $942
===========================================================================
Operating income (loss)               $  312      $  141        $ 41
Interest expense
---------------------------------------------------------------------------
Income before income taxes,
  extraordinary loss and cumulative
  effects of accounting changes
===========================================================================
Equity income (loss)                  $   (2)     $    -        $  -
Depreciation and amortization            135          47           5

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


                                       47


<PAGE> 48
<TABLE>
<CAPTION>

1998                           Transportation   Restructuring      Other
---------------------------------------------------------------------------
<S>                                   <C>           <C>            <C>
Customer aluminum shipments             63             391            37
Customer revenues:
  Aluminum                            $337          $1,434         $  127
  Nonaluminum                            -              12            102
Intersegment revenues - aluminum         -              12              -
---------------------------------------------------------------------------
Total revenues                        $337          $1,458         $  229
===========================================================================
Operating income (loss)               $(19)         $  124         $ (140)
Interest expense
---------------------------------------------------------------------------
Income before income taxes,
  extraordinary loss and cumulative
  effects of accounting changes
===========================================================================
Equity income (loss)                  $  -          $    -         $  (14)
Depreciation and amortization           25              26             12


Assets                                $352          $  282         $1,523
Current liabilities (excluding debt)    53              66            321
---------------------------------------------------------------------------
Net operating investment              $299          $  216         $1,202
===========================================================================
Unincorporated joint ventures and
     associated companies             $  7          $    -         $  172
Capital expenditures                    50               -             15
===========================================================================

1997
---------------------------------------------------------------------------
Customer aluminum shipments             66             737             39
Customer revenues:
  Aluminum                            $353          $2,610         $  129
  Nonaluminum                            -              79             60
Intersegment revenues - aluminum         -              33              -
---------------------------------------------------------------------------
Total revenues                        $353          $2,722         $  189
===========================================================================
Operating income (loss)               $ 10          $  102         $ (126)
Interest expense
---------------------------------------------------------------------------
Income before income taxes,
  extraordinary loss and cumulative
  effects of accounting changes
===========================================================================
Equity income (loss)                  $  1          $    -         $   (4)
Depreciation and amortization           26             143             12

Assets                                $331          $1,921         $1,359
Current liabilities (excluding debt)    46             212            415
---------------------------------------------------------------------------
Net operating investment              $285          $1,709         $  944
===========================================================================
Unincorporated joint ventures and
  associated companies                $  8          $  172         $   24
Capital expenditures                    40              33             44
===========================================================================
</TABLE>


<TABLE>
<CAPTION>

                                          Reconciling
1998                                         Items       Consolidated
---------------------------------------------------------------------------
<S>                                         <C>             <C>
Customer aluminum shipments                       -          1,484
Customer revenues:
  Aluminum                                  $     -         $4,424
  Nonaluminum                                     -          1,435
Intersegment revenues - aluminum               (584)             -
---------------------------------------------------------------------------
Total revenues                              $  (584)        $5,859
===========================================================================
Operating income (loss)                     $  (139)        $  311
Interest expense                                               114
---------------------------------------------------------------------------
Income before income taxes,
  extraordinary loss and cumulative
  effects of accounting changes                             $  197
===========================================================================
Equity income (loss)                        $     -         $  (14)
Depreciation and amortization                     -            252

Assets                                      $   (23)        $6,134
Current liabilities (excluding debt)            (12)           929
---------------------------------------------------------------------------
Net operating investment                    $   (11)        $5,205
===========================================================================
Unincorporated joint ventures and
  associated companies                      $     -         $1,478
Capital expenditures                              -            341
===========================================================================

1997
---------------------------------------------------------------------------
Customer aluminum shipments                       -          1,663
Customer revenues:
  Aluminum                                  $     -         $5,426
  Nonaluminum                                     -          1,474
Intersegment revenues - aluminum             (1,220)             -
---------------------------------------------------------------------------
Total revenues                              $(1,220)        $6,900
===========================================================================
Operating income (loss)                     $   (87)        $  393
Interest expense                                               153
---------------------------------------------------------------------------
Income before income taxes,
  extraordinary loss and cumulative
  effects of accounting changes                             $  240
===========================================================================
Equity income (loss)                        $     -         $   (5)
Depreciation and amortization                     -            368

Assets                                      $  (583)        $7,226
Current liabilities (excluding debt)           (104)         1,074
---------------------------------------------------------------------------
Net operating investment                    $  (479)        $6,152
===========================================================================
Unincorporated joint ventures and
  associated companies                      $     -         $1,381
Capital expenditures                              -            272
===========================================================================
</TABLE>

                                      48


<PAGE> 49
11.  COMPANY OPERATIONS - continued

<TABLE>
<CAPTION>
                                                Packaging    Construction
                                       Base        and            and
1996                                Materials   Consumer     Distribution
---------------------------------------------------------------------------
<S>                                  <C>         <C>             <C>
Customer aluminum shipments             458         136           151
Customer revenues:

  Aluminum                           $  763      $  768          $600
  Nonaluminum                           373         585           332
Intersegment revenues - aluminum        944           -             -
---------------------------------------------------------------------------
Total revenues                       $2,080      $1,353          $932
===========================================================================
Operating income (loss)              $  242      $  149          $ 45
Interest expense

---------------------------------------------------------------------------
Income before income taxes,
  extraordinary loss and cumulative
  effects of accounting changes
===========================================================================
Equity income (loss)                 $    -      $    -          $  -
Depreciation and amortization           131          46             5

Assets                               $3,207      $  635          $365
Current liabilities (excluding debt)    283         124            84
---------------------------------------------------------------------------
Net operating investment             $2,924      $  511          $281
===========================================================================
Unincorporated joint ventures and
  associated companies               $1,187      $    -          $  -
Capital expenditures                     93          59             6
===========================================================================
</TABLE>


                                    49

<PAGE> 50
<TABLE>
<CAPTION>
1996                               Transportation   Restructuring    Other
---------------------------------------------------------------------------

<S>                                     <C>           <C>           <C>
Customer aluminum shipments               58             813           37
Customer revenues:
  Aluminum                              $326          $2,802        $  132
  Nonaluminum                              -             264            71
Intersegment revenues - aluminum           -              39             -
---------------------------------------------------------------------------
Total revenues                          $326          $3,105        $  203
===========================================================================
Operating income (loss)                 $ 17          $  (38)       $ (128)
Interest expense
---------------------------------------------------------------------------
Income before income taxes,
  extraordinary loss and cumulative
  effects of accounting changes
===========================================================================
Equity income (loss)                    $  3          $    -        $   18
Depreciation and amortization             23             143            17

Assets                                  $304          $2,149        $1,394
Current liabilities (excluding debt)      38             256           320
---------------------------------------------------------------------------
Net operating investment                $266          $1,893        $1,074
===========================================================================
Unincorporated joint ventures and
  associated companies                  $  8          $  107        $   35
Capital expenditures                      47             167            60
===========================================================================
</TABLE>

<TABLE>
<CAPTION>
                                          Reconciling
1996                                         Items          Consolidated
---------------------------------------------------------------------------
<S>                                          <C>               <C>
Customer aluminum shipments                      -              1,653
Customer revenues:
  Aluminum                                   $   -             $5,391
  Nonaluminum                                    -              1,625
Intersegment revenues - aluminum              (983)                 -
---------------------------------------------------------------------------
Total revenues                               $(983)            $7,016
===========================================================================
Operating income (loss)                      $  26             $  313
Interest expense                                                  160
---------------------------------------------------------------------------
Income before income taxes,
  extraordinary loss and cumulative
  effects of accounting changes                                $  153
===========================================================================
Equity income (loss)                         $   -             $   21
Depreciation and amortization                    -                365

Assets                                       $(538)            $7,516
Current liabilities (excluding debt)           (85)             1,020
---------------------------------------------------------------------------
Net operating investment                     $(453)            $6,496
===========================================================================
Unincorporated joint ventures and
  associated companies                       $   -             $1,337
Capital expenditures                             -                432
===========================================================================
</TABLE>
                                  50


<PAGE> 51
11.  COMPANY OPERATIONS - continued
RECONCILING ITEMS
Reconciling items consist of the following:

<TABLE>
<CAPTION>

                                          1998       1997        1996
                                      -----------------------------------
<S>                                      <C>        <C>         <C>
Operating income (loss)
 Inventory accounting adjustments        $   5      $ (12)      $  63
 Operational restructuring effects        (144)       (75)        (37)
                                      -----------------------------------
                                         $(139)     $ (87)      $  26
                                      ===================================

Assets:
 Inventory accounting adjustments        $(248)     $(547)      $(530)
 Construction in progress                  320        155         207
 Internal receivables included in the
  assets of the global business units      (95)      (191)       (215)
                                      -----------------------------------
                                         $ (23)     $(583)      $(538)
                                      ===================================

Current liabilities:
 Internal liabilities included in the
  current liabilities of the
  global business units                  $ (87)     $(185)      $(182)
 Payables to unincorporated joint
  ventures and associated companies         75         81          97
                                      ----------------------------------
                                         $ (12)     $(104)      $ (85)
                                      ==================================
</TABLE>

Inventory accounting adjustments include elimination of
unrealized profits on sales between global business units and
LIFO inventory adjustments, including a LIFO inventory
liquidation of $30 million in 1996.  Construction in progress in
1998 includes $150 million related to the expansion of the joint-
venture Worsley Alumina Refinery in Australia.

Research and development expenditures were $31 million in 1998
(1997- $41 million, 1996 - $49 million).

<TABLE>
<CAPTION>
Geographic

                     Domestic   Canada  Other Foreign  Consolidated
======================================================================
<S>                   <C>       <C>        <C>            <C>
1998
Revenues              $4,653    $  452     $  754         $5,859
Long-lived assets      1,822     1,261      1,086          4,169
======================================================================
1997
Revenues              $5,306    $  523     $1,071         $6,900
Long-lived assets      2,582     1,321      1,080          4,983
======================================================================
1996
Revenues              $5,461    $  510     $1,045         $7,016
Long-lived assets      2,810     1,402      1,136          5,348
======================================================================
</TABLE>

The majority of the Other Foreign category is comprised of
European operations except that long-lived assets include $673
million in 1998 ($569 million in 1997 and $563 million in 1996)
related to the joint-venture Worsley Alumina Refinery located in
Australia.


                                  51


<PAGE> 52
12.  CONTINGENT LIABILITIES AND COMMITMENTS
LEGAL
Various suits, claims and actions are pending against the
Company.  In the opinion of management, after consultation with
legal counsel, disposition of these suits, claims and actions,
either individually or in the aggregate, are not expected to have
a material adverse effect on the Company's competitive or
financial position.  No assurance can be given, however, that the
disposition of one or more of such suits, claims or actions in a
particular reporting period will not be material in relation to
the reported results for such period.


UNCONDITIONAL PURCHASE OBLIGATIONS
The Company has committed to pay its proportionate share of
annual primary aluminum production charges (including debt
service) relating to its interest in an unincorporated joint
venture.  This arrangement includes a  minimum commitment of $37
million in 1999.  The present value of this commitment at
December 31, 1998 was $36 million, after excluding interest of $1
million.  The Company purchased approximately $90 million of
primary aluminum in each of the last three years under this
arrangement.

LEASES
Certain items of property, plant and equipment are leased under
long-term operating leases.  Lease expense was $36 million in
1998 ($45 million in 1997 and $50 million in 1996).  Lease
commitments at December 31, 1998, were  $58 million.  Leases
covering major items contain renewal and/or purchase options that
may be exercised.

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

An analysis of the accrual for environmental remediation costs
follows:

<TABLE>
<CAPTION>
                              1998     1997      1996
                            ---------------------------
   <S>                        <C>      <C>       <C>
   Balance at January 1       $177     $203      $248
     Accruals                    7        -         -
     Payments                  (12)     (26)      (45)
                            ---------------------------
   Balance at December 31     $172     $177      $203
                            ===========================
</TABLE>

The balance of the accrual at December 31, 1998 is expected to be
spent over the next 15 to 20 years with the majority to be spent
by the year 2002.

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

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

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


                                52


<PAGE> 53
12.  CONTINGENT LIABILITIES AND COMMITMENTS - continued
Estimated costs for future environmental compliance and
remediation are necessarily imprecise because of factors such as:

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

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




                                53


<PAGE> 54
13.  CANADIAN REYNOLDS METALS COMPANY, LTD. AND REYNOLDS ALUMINUM
     COMPANY OF CANADA, LTD.
Financial statements for Canadian Reynolds Metals Company, Ltd.
and Reynolds Aluminum Company of Canada, Ltd. have been omitted
because certain securities registered under the Securities Act of
1933, of which these wholly owned subsidiaries of Reynolds Metals
Company (Reynolds) are obligors (thus subjecting them to
reporting requirements under Section 13 or 15(d) of the
Securities Exchange Act of 1934), are fully and unconditionally
guaranteed by Reynolds.  Financial information relating to these
companies is presented herein in accordance with Staff Accounting
Bulletin 53 as an addition to the notes to the consolidated
financial statements of Reynolds.  Summarized financial
information is as follows:

<TABLE>
<CAPTION>
Canadian Reynolds Metals Company, Ltd.

                            Years ended December 31

                          ----------------------------
                            1998      1997      1996
                          ----------------------------
    <S>                     <C>       <C>       <C>
    Net Sales:
     Customers              $356      $237      $202
     Parent company          466       680       599
                          ----------------------------
                             822       917       801
    Cost of products sold    708       733       677
    Net income              $ 84      $117      $ 65
</TABLE>


<TABLE>
<CAPTION>
                                December 31
                            -------------------
                               1998     1997
                            -------------------
    <S>                      <C>      <C>
    Current assets           $  155   $  179
    Noncurrent assets         1,206    1,206
    Current liabilities        (100)    (148)
    Noncurrent liabilities     (379)    (415)
</TABLE>

<TABLE>
<CAPTION>
Reynolds Aluminum Company of Canada, Ltd.

                            Years ended December 31
                          ---------------------------
                           1998      1997       1996
                          ---------------------------
    <S>                    <C>     <C>        <C>
    Net Sales:
     Customers             $447    $  519     $  509
     Parent company         455       648        517
                          ---------------------------
                            902     1,167      1,026
    Cost of products sold   784       956        884
    Net income             $ 84    $  117     $   59
</TABLE>


<TABLE>
<CAPTION>
                                  December 31
                            ------------------------
                                1998        1997
                            ------------------------
    <S>                       <C>         <C>
    Current assets            $  186      $  208
    Noncurrent assets          1,228       1,276
    Current liabilities         (103)       (111)
    Noncurrent liabilities      (389)       (445)
</TABLE>


                              54


<PAGE> 55

<TABLE>
<CAPTION>
           Quarterly Results of Operations (Unaudited)
              (millions, except per share amounts)


                                                         1998
------------------------------------------------------------------------------
Quarter                                     1st      2nd      3rd      4th
------------------------------------------------------------------------------
<S>                                       <C>      <C>      <C>      <C>
Revenues                                  $1,532   $1,579   $1,368   $1,380
Gross profit<F1>                             211      238      202      182
Income (loss) before extraordinary
 loss and cumulative effect of
 accounting change                            58     (123)     262      (45)
Extraordinary loss                             -       (3)     (60)       -
Cumulative effect of accounting change       (23)       -        -        -
------------------------------------------------------------------------------
Net income (loss)                         $   35   $ (126)  $  202   $  (45)
==============================================================================
Earnings Per Share
  Basic:
   Average shares outstanding                 73       72       69       64
   Income (loss) before extraordinary
    loss and cumulative effect of
    accounting change                     $ 0.78   $(1.70)  $ 3.80   $(0.71)
   Extraordinary loss                          -    (0.04)   (0.88)       -
   Cumulative effect of accounting change  (0.32)       -        -        -
------------------------------------------------------------------------------
Net income (loss)                         $ 0.46   $(1.74)  $ 2.92   $(0.71)
------------------------------------------------------------------------------
 Diluted:
  Average shares outstanding                  74       72       69       64
  Income (loss) before extraordinary
   loss and cumulative effect of
   accounting change                      $ 0.78   $(1.70)  $ 3.80   $(0.71)
  Extraordinary loss                           -    (0.04)   (0.88)       -
  Cumulative effect of accounting change   (0.32)       -        -        -
------------------------------------------------------------------------------
Net income (loss)                         $ 0.46   $(1.74)  $ 2.92   $(0.71)
==============================================================================
Net income (loss) includes the effect
 of the following item:
  Operational restructuring
   effects - net<F2>                      $    -   $ (196)  $  201   $  (95)
------------------------------------------------------------------------------


                                                         1997
------------------------------------------------------------------------------
Quarter                                     1st     2nd      3rd      4th
------------------------------------------------------------------------------


Revenues                                  $1,624   $1,786   $1,717   $1,773
Gross profit<F1>                             171      231      215      257
Net income (loss)                         $   43   $   55   $   55   $  (17)
==============================================================================
Earnings Per Share
 Basic:
  Average shares outstanding                  73       73       74       74
------------------------------------------------------------------------------
Net income (loss)                         $ 0.59   $ 0.76   $ 0.74   $(0.23)
------------------------------------------------------------------------------
 Diluted:
  Average shares outstanding                  73       74       75       74
------------------------------------------------------------------------------
Net income (loss)                         $ 0.59   $ 0.75   $ 0.73   $(0.23)
==============================================================================
Net income (loss) includes the effect
 of the following item:
  Operational restructuring
   effects - net<F2>                      $   23   $   (4)  $    -   $  (97)
------------------------------------------------------------------------------

<FN>
<F1>Gross profit equals revenues minus cost of products sold, and
    depreciation and amortization
<F2>Operational restructuring effects are shown net of gains on
    sales of assets
</FN>
</TABLE>


                                      55


<PAGE> 56
       REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS


Stockholders and Board of Directors
Reynolds Metals Company


We have audited the accompanying consolidated balance sheets of
Reynolds Metals Company as of December 31, 1998 and 1997, and the
related consolidated statements of income, changes in
stockholders' equity, and cash flows for each of the three years
in the period ended December 31, 1998.  These financial
statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of Reynolds Metals Company at December 31,
1998 and 1997, and the consolidated results of its operations and
its cash flows for each of the three years in the period ended
December 31, 1998, in conformity with generally accepted
accounting principles.


As discussed in Note 1 to the consolidated financial
statements,  in 1998 the Company changed its method of accounting
for the costs of start-up activities and, in 1996 changed its
method of accounting for the impairment of long-lived assets and
long-lived assets to be disposed of.


                                       ERNST & YOUNG LLP

Richmond, Virginia
February 19, 1999



                                      56


<PAGE> 57
                             PART IV

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

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

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

          Consolidated statement of income -
          Years ended December 31, 1998, 1997 and 1996.                 29

          Consolidated balance sheet - December 31, 1998 and 1997.      30

          Consolidated statement of cash flows -
          Years ended December 31, 1998, 1997 and 1996.                 31

          Consolidated statement of changes in stockholders' equity -
          Years ended December 31, 1998, 1997 and 1996.                 32

          Notes to consolidated financial statements.                   33

          Report of Ernst & Young LLP, Independent Auditors.            56

     (2)  Financial Statement Schedules

          Schedule II - Valuation and Qualifying Accounts -
          Years Ended December 31, 1998, 1997 and 1996.                 58


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

          This report omits individual financial statements of
          Reynolds Metals Company because the restricted net
          assets (as defined in Accounting Series Release 302) of
          all subsidiaries included in the consolidated financial
          statements filed, in the aggregate, do not exceed 25%
          of the consolidated net assets shown in the
          consolidated balance sheet as of December 31, 1998.

          This report omits financial statements of all
          associated companies (20% to 50% owned) because no
          associated company is individually significant.



                                   57


<PAGE> 58
<TABLE>
<CAPTION>
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS


Column A            Column B           Column C          Column D    Column E
-------------------------------------------------------------------------------
                                      Additions
                                ------------------------
                    Balance at   Charged to  Charged to              Balance at
                    beginning    costs and     other                   end of
   Description      of period    expenses     accounts   Deductions    period
-------------------------------------------------------------------------------
<S>                    <C>          <C>        <C>         <C>          <C>
Allowance for
 doubtful accounts:
  1998                 $16          $7         $  -        $ (9) (B)    $14
  1997                  18           5            -          (7) (B)     16
  1996                  20           9            -         (11) (B)     18


Allowance for
 deferred income taxes:
  1998                  19           -            1 (A)       -          20
  1997                  46           -            3 (A)     (30) (C)     19
  1996                  45           -            1 (A)       -          46
</TABLE>

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

(B)  Allowance for doubtful accounts deductions consist of the following:

<TABLE>
<CAPTION>
                                           1998     1997     1996
                                        ----------------------------
    <S>                                    <C>      <C>      <C>
    Receivable write-offs                  $(6)     $(5)     $(11)
    Divestitures                            (3)      (1)        -
    Foreign currency translation effect      -       (1)        -
                                        ----------------------------
                                           $(9)     $(7)     $(11)
</TABLE>

(C)  Allowance for deferred income taxes was due to divestitures.



                                   58


<PAGE> 59

   (3)  Exhibits

      * EXHIBIT 2     -  Asset Purchase Agreement by and among Ball
                         Corporation, Ball Metal Beverage
                         Container Corp. and Reynolds Metals
                         Company dated as of April 22, 1998.  The
                         Registrant agrees to furnish to the
                         Commission upon request a copy of the
                         disclosure schedules supplemental to the
                         Asset Purchase Agreement.  (File No. 001-
                         01430, Form 10-Q Report for the Quarter
                         Ended June 30, 1998, EXHIBIT 2)

     ** EXHIBIT 3.1   -  Restated Certificate of Incorporation,
                         as amended.

     ** EXHIBIT 3.2   -  By-laws, as amended.

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

        EXHIBIT 4.2   -  By-laws.  See EXHIBIT 3.2.

      * EXHIBIT 4.3   -  Indenture dated as of April 1, 1989 (the
                         "Indenture") between Reynolds Metals
                         Company and The Bank of New York, as
                         Trustee, relating to Debt Securities.
                         (File No. 001-01430, Form 10-Q Report
                         for the Quarter Ended March 31, 1989,
                         EXHIBIT 4(c))

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

      * EXHIBIT 4.5   -  Rights Agreement dated as of March 8,
                         1999 between Reynolds Metals Company and
                         ChaseMellon Shareholder Services, L.L.C.
                         (File No. 001-01430, Form 8-K Report
                         dated March 8, 1999, pertaining to
                         Preferred Stock Purchase Rights, EXHIBIT
                         4.1)

      * EXHIBIT 4.6   -  Form of 9-3/8% Debenture due June 15, 1999.
                         (File No. 001-01430, Form 8-K Report
                         dated June 6, 1989, EXHIBIT 4)

      * EXHIBIT 4.7   -  Form of Fixed Rate Medium-Term Note.
                         (Registration Statement No. 33-30882 on
                         Form S-3, dated August 31, 1989, EXHIBIT
                         4.3)

      * EXHIBIT 4.8   -  Form of Floating Rate Medium-Term Note.
                         (Registration Statement No. 33-30882 on
                         Form S-3, dated August 31, 1989, EXHIBIT
                         4.4)

      * EXHIBIT 4.9   -  Form of Book-Entry Fixed Rate Medium-Term
                         Note.  (File No. 001-01430, 1991 Form 10-
                         K Report, EXHIBIT 4.15)

      * EXHIBIT 4.10  -  Form of Book-Entry Floating Rate Medium-Term
                         Note.  (File No. 001-01430, 1991 Form 10-
                         K Report, EXHIBIT 4.16)

      * EXHIBIT 4.11  -  Form of 9% Debenture due August 15, 2003.
                         (File No. 001-01430, Form 8-K Report
                         dated August 16, 1991, Exhibit 4(a))


_______________________
*   Incorporated by reference.
**  Previously filed.



                                59

<PAGE> 60


      * EXHIBIT 4.12  -  Articles of Continuance of Societe
                         d'Aluminium Reynolds du Canada,
                         Ltee/Reynolds Aluminum Company of
                         Canada, Ltd. (formerly known as Canadian
                         Reynolds Metals Company, Limited --
                         Societe Canadienne de Metaux Reynolds,
                         Limitee) ("RACC"), as amended.  (File
                         No. 001-01430, 1995 Form 10-K Report,
                         EXHIBIT 4.13)

      * EXHIBIT 4.13  -  By-Laws of RACC, as amended.  (File No. 001-
                         01430, Form 10-Q Report for the Quarter
                         Ended March 31, 1997, EXHIBIT 4.14)

      * EXHIBIT 4.14  -  Articles of Incorporation of Societe
                         Canadienne de Metaux Reynolds,
                         Ltee/Canadian Reynolds Metals Company,
                         Ltd. ("CRM"), as amended.  (File No. 001-
                         01430, Form 10-Q Report for the Quarter
                         Ended September 30, 1997, EXHIBIT 4.15)

      * EXHIBIT 4.15  -  By-Laws of CRM, as amended.  (File No. 001-
                         01430, Form 10-Q Report for the Quarter
                         Ended September 30, 1997, EXHIBIT 4.16)

      * EXHIBIT 4.16  -  Indenture dated as of April 1, 1993
                         among RACC, Reynolds Metals Company and
                         The Bank of New York, as Trustee.  (File
                         No. 001-01430, Form 8-K Report dated
                         July 14, 1993, EXHIBIT 4(a))

      * EXHIBIT 4.17  -  First Supplemental Indenture, dated as of
                         December 18, 1995 among RACC, Reynolds
                         Metals Company, CRM and The Bank of New
                         York, as Trustee.  (File No. 001-01430,
                         1995 Form 10-K Report, EXHIBIT 4.18)

      * EXHIBIT 4.18  -  Form of 6-5/8% Guaranteed Amortizing Note due
                         July 15, 2002.  (File No. 001-01430,
                         Form 8-K Report dated July 14, 1993,
                         EXHIBIT 4(d))

        EXHIBIT 9    -   None.

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

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

     =* EXHIBIT 10.3  -  Reynolds Metals Company Performance
                         Incentive Plan, as amended and restated
                         effective January 1, 1996.  (File No.
                         001-01430, Form 10-Q Report for the
                         Quarter Ended March 31, 1995, EXHIBIT
                         10.4)

      =* EXHIBIT 10.4 -  Agreement dated December 9, 1987 between
                         Reynolds Metals Company and Jeremiah J.
                         Sheehan.  (File No. 001-01430, 1987 Form
                         10-K Report, EXHIBIT 10.9)

      =* EXHIBIT 10.5 -  Supplemental Death Benefit Plan for
                         Officers.  (File No. 001-01430, 1986
                         Form 10-K Report, EXHIBIT 10.8)

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


                                 60


<PAGE> 61

    =* EXHIBIT 10.6  -   Financial Counseling Assistance Plan for
                         Officers.  (File No. 001-01430, 1987
                         Form 10-K Report, EXHIBIT 10.11)

    =* EXHIBIT 10.7  -   Management Incentive Deferral Plan.
                         (File No. 001-01430, 1987 Form 10-K
                         Report, EXHIBIT 10.12)

    =* EXHIBIT 10.8  -   Deferred Compensation Plan for Outside
                         Directors as Amended and Restated
                         Effective December 1, 1993.  (File No.
                         001-01430, 1993 Form 10-K Report,
                         EXHIBIT 10.12)

   =** EXHIBIT 10.9  -   Form of Indemnification Agreement for
                         Directors and Officers.

    =* EXHIBIT 10.10 -   Form of Executive Severance Agreement as
                         amended between Reynolds Metals Company
                         and key executive personnel, including
                         each of the individuals listed in Item
                         4A of this report.  (File No. 001-01430,
                         1997 Form 10-K Report, EXHIBIT 10.10)

    =* EXHIBIT 10.11 -   Amendment to Reynolds Metals Company
                         1987 Nonqualified Stock Option Plan
                         effective May 20, 1988.  (File No. 001-
                         01430, Form 10-Q Report for the Quarter
                         Ended June 30, 1988, EXHIBIT 19(a))

    =* EXHIBIT 10.12 -   Amendment to Reynolds Metals Company
                         1987 Nonqualified Stock Option Plan
                         effective October 21, 1988.  (File No.
                         001-01430, Form 10-Q Report for the
                         Quarter Ended September 30, 1988,
                         EXHIBIT 19(a))

    =* EXHIBIT 10.13 -   Amendment to Reynolds Metals Company
                         1987 Nonqualified Stock Option Plan
                         effective January 1, 1987.  (File No.
                         001-01430, 1988 Form 10-K Report,
                         EXHIBIT 10.22)

    =* EXHIBIT 10.14 -   Form of Stock Option and Stock Appreciation
                         Right Agreement, as approved February
                         16, 1990 by the Compensation Committee
                         of the Company's Board of Directors.
                         (File No. 001-01430, 1989 Form 10-K
                         Report, EXHIBIT 10.24)

    =* EXHIBIT 10.15 -   Amendment to Reynolds Metals Company
                         1987 Nonqualified Stock Option Plan
                         effective January 18, 1991.  (File No.
                         001-01430, 1990 Form 10-K Report,
                         EXHIBIT 10.26)

    =* EXHIBIT 10.16 -   Form of Stock Option Agreement, as approved
                         April 22, 1992 by the Compensation
                         Committee of the Company's Board of
                         Directors.  (File No. 001-01430, Form 10-
                         Q Report for the Quarter Ended March 31,
                         1992, EXHIBIT 28(a))

    =* EXHIBIT 10.17 -   Reynolds Metals Company Restricted Stock
                         Plan for Outside Directors.
                         (Registration Statement No. 33-53851 on
                         Form S-8, dated May 27, 1994, EXHIBIT
                         4.6)

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



                                61


<PAGE> 62
    =* EXHIBIT 10.18 -   Reynolds Metals Company New Management
                         Incentive Deferral Plan.  (File No. 001-
                         01430, Form 10-Q Report for the Quarter
                         Ended June 30, 1994, EXHIBIT 10.30)

    =* EXHIBIT 10.19 -   Reynolds Metals Company Salary Deferral
                         Plan for Executives.  (File No. 001-
                         01430, Form 10-Q Report for the Quarter
                         Ended June 30, 1994, EXHIBIT 10.31)

    =* EXHIBIT 10.20 -   Reynolds Metals Company Supplemental
                         Long Term Disability Plan for
                         Executives.  (File No. 001-01430, Form
                         10-Q Report for the Quarter Ended June
                         30, 1994, EXHIBIT 10.32)

    =* EXHIBIT 10.21 -   Amendment to Reynolds Metals Company
                         1987 Nonqualified Stock Option Plan
                         effective August 19, 1994.  (File No.
                         001-01430, Form 10-Q Report for the
                         Quarter Ended September 30, 1994,
                         EXHIBIT 10.34)

    =* EXHIBIT 10.22 -   Amendment to Reynolds Metals Company
                         1992 Nonqualified Stock Option Plan
                         effective August 19, 1994.  (File No.
                         001-01430, Form 10-Q Report for the
                         Quarter Ended September 30, 1994,
                         EXHIBIT 10.35)

    =* EXHIBIT 10.23 -   Amendment to Reynolds Metals Company New
                         Management Incentive Deferral Plan
                         effective January 1, 1995.  (File No.
                         001-01430, 1994 Form 10-K Report,
                         EXHIBIT 10.36)

    =* EXHIBIT 10.24 -   Form of Split Dollar Life Insurance Agreement
                         (Trustee Owner, Trustee Pays Premiums).
                         (File No. 001-01430, Form 10-Q Report
                         for the Quarter Ended June 30, 1995,
                         EXHIBIT 10.34)

    =* EXHIBIT 10.25 -   Form of Split Dollar Life Insurance Agreement
                         (Trustee Owner, Employee Pays Premium).
                         (File No. 001-01430, Form 10-Q Report
                         for the Quarter Ended June 30, 1995,
                         EXHIBIT 10.35)

    =* EXHIBIT 10.26 -   Form of Split Dollar Life Insurance Agreement
                         (Employee Owner, Employee Pays Premium).
                         (File No. 001-01430, Form 10-Q Report
                         for the Quarter Ended June 30, 1995,
                         EXHIBIT 10.36)

    =* EXHIBIT 10.27 -   Form of Split Dollar Life Insurance Agreement
                         (Third Party Owner, Third Party Pays
                         Premiums).  (File No. 001-01430, Form 10-
                         Q Report for the Quarter Ended June 30,
                         1995, EXHIBIT 10.37)


    =* EXHIBIT 10.28 -   Form of Split Dollar Life Insurance Agreement
                         (Third Party Owner, Employee Pays
                         Premiums).  (File No. 001-01430, Form 10-
                         Q Report for the Quarter Ended June 30,
                         1995, EXHIBIT 10.38)

    =* EXHIBIT 10.29 -   Reynolds Metals Company 1996
                         Nonqualified Stock Option Plan.
                         (Registration Statement No. 333-03947 on
                         Form S-8, dated May 17, 1996, EXHIBIT
                         4.6)

    =* EXHIBIT 10.30 -   Amendment to Reynolds Metals Company
                         1992 Nonqualified Stock Option Plan
                         effective January 1, 1993.
                         (Registration Statement No. 333-03947 on
                         Form S-8, dated May 17, 1996, EXHIBIT
                         99)

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


                                  62


<PAGE> 63
    =* EXHIBIT 10.31 -   Form of Stock Option Agreement, as approved
                         May 17, 1996 by the Compensation
                         Committee of the Company's Board of
                         Directors.  (File No. 001-01430, Form 10-
                         Q Report for the Quarter Ended June 30,
                         1996, EXHIBIT 10.41)

    =* EXHIBIT 10.32 -   Form of Three Party Stock Option Agreement,
                         as approved May 17, 1996 by the
                         Compensation Committee of the Company's
                         Board of Directors.  (File No. 001-
                         01430, Form 10-Q Report for the Quarter
                         Ended June 30, 1996, EXHIBIT 10.42)

    =* EXHIBIT 10.33 -   Stock Option Agreement dated August 30, 1996
                         between Reynolds Metals Company and
                         Jeremiah J. Sheehan.  (File No. 001-
                         01430, Form 10-Q Report for the Quarter
                         Ended September 30, 1996, EXHIBIT 10.43)

    =* EXHIBIT 10.34 -   Amendment to Deferred Compensation Plan
                         for Outside Directors effective August
                         15, 1996.  (File No. 001-01430, Form 10-
                         Q Report for the Quarter Ended September
                         30, 1996, EXHIBIT 10.44)

    =* EXHIBIT 10.35 -   Amendment to Reynolds Metals Company New
                         Management Incentive Deferral Plan
                         effective January 1, 1996.  (File No.
                         001-01430, 1996 Form 10-K Report,
                         EXHIBIT 10.38)

    =* EXHIBIT 10.36 -   Amendment to Reynolds Metals Company
                         Performance Incentive Plan effective
                         January 1, 1996.  (File No. 001-01430,
                         1996 Form 10-K Report, EXHIBIT 10.39)

    =* EXHIBIT 10.37 -   Reynolds Metals Company Supplemental
                         Incentive Plan.  (File No. 001-01430,
                         1996 Form 10-K Report, EXHIBIT 10.40)

    =* EXHIBIT 10.38 -   Reynolds Metals Company Stock Plan for
                         Outside Directors.  (File No. 001-01430,
                         1996 Form 10-K Report, EXHIBIT 10.41)

    =* EXHIBIT 10.39 -   Special Executive Severance Package for
                         Certain Employees who Terminate
                         Employment between January 1, 1997 and
                         June 30, 1999 (or, if earlier, the date
                         of completion of employment related
                         actions related to the Company's
                         portfolio review process, as designated
                         by the Company's Chief Executive
                         Officer), approved by the Compensation
                         Committee of the Company's Board of
                         Directors on January 17, 1997 and
                         extended on May 15, 1998. (File No. 001-
                         01430, 1996 Form 10-K Report, EXHIBIT
                         10.42)

    =* EXHIBIT 10.40 -   Special Award Program for Certain
                         Executives or Key Employees, as approved
                         by the Compensation Committee of the
                         Company's Board of Directors on January
                         17, 1997.  (File No. 001-01430, 1996
                         Form 10-K Report, EXHIBIT 10.43)


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


                                63


<PAGE> 64
    =* EXHIBIT 10.41 -   Amendment to Reynolds Metals Company
                         1996 Nonqualified Stock Option Plan
                         effective December 1, 1997.  (File No.
                         001-01430, 1997 Form 10-K Report,
                         EXHIBIT 10.41)

    =* EXHIBIT 10.42 -   Amendment to Reynolds Metals Company
                         Restricted Stock Plan for Outside
                         Directors effective December 1, 1997.
                         (File No. 001-01430, 1997 Form 10-K
                         Report, EXHIBIT 10.42)

    =* EXHIBIT 10.43 -   Reynolds Metals Company Long-Term
                         Performance Share Plan. (File No. 001-
                         01430, Form 10-Q Report for the Quarter
                         Ended June 30, 1998, EXHIBIT 10.43)

     * EXHIBIT 10.44 -   Asset Purchase Agreement by and among Ball
                         Corporation, Ball Metal Beverage
                         Container Corp. and Reynolds Metals
                         Company dated as of April 22, 1998.  See
                         EXHIBIT 2.

   =** EXHIBIT 10.45 -   Amendment to Reynolds Metals Company
                         Restricted Stock Plan for Outside
                         Directors effective January 1, 1999

   =** EXHIBIT 10.46 -   Amendment to Reynolds Metals Company
                         Stock Plan for Outside Directors
                         effective January 1, 1999

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

       EXHIBIT 12    -   Not applicable

       EXHIBIT 13    -   Not applicable

       EXHIBIT 16    -   Not applicable

       EXHIBIT 18    -   None

    ** EXHIBIT 21    -   List of Subsidiaries of Reynolds Metals
                         Company

       EXHIBIT 22    -   None


       EXHIBIT 23    -   Consent of Independent Auditors

    ** EXHIBIT 24    -   Powers of Attorney

    ** EXHIBIT 27    -   Financial Data Schedule


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

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



                                 64


<PAGE> 65

(b)  Reports on Form 8-K

     During the fourth quarter of 1998, the Registrant
     filed three Current Reports on Form 8-K with the
     Commission, all of which reported matters under Item 5.

     The Registrant reported on the Form 8-K dated
     October 16, 1998 that it had advised local union officials at
     its Alloys can stock complex in Alabama that the proposed
     purchaser of the facility had informed the Registrant that it
     is critical that the purchaser and labor unions representing
     employees at the complex negotiate new labor agreements with
     respect to those employees.  The report stated additionally
     that the Registrant had advised the labor leaders at the
     complex that if (1) the proposed purchaser and the unions are
     able to agree on new labor contracts and (2) the Registrant
     and the proposed purchaser are able to successfully conclude
     negotiations and complete the sale, the Registrant would
     treat the transaction as a "plant closing" for purposes of
     benefit payments under its existing labor contracts.

     The Registrant reported on the Form 8-K dated
     November 18, 1998 that the Registrant and the other principal
     shareholders of Latas de Aluminio S. A. - LATASA had
     finalized a review of strategic alternatives for the South
     American beverage can manufacturing company.  The Registrant
     announced that it was not considering a disposition of its
     shares at that time.

     The Registrant reported on the Form 8-K dated
     December 30, 1998 that it had signed a definitive agreement
     to sell its Alloys can stock complex in Alabama to Wise
     Alloys LLC, an affiliate of Wise Metals Co., Inc.

     The Registrant has filed two Current Reports
     on Form 8-K with the Commission during the first quarter of
     1999, both of which reported matters under Item 5.

     The Registrant filed a Form 8-K dated March 3, 1999
     concerning its expected earnings for the first
     quarter of 1999.

     The Registrant reported on a Form 8-K dated
     March 8, 1999 that its Board of Directors had approved
     amendments to the Registrant's shareholder rights plan.




                                65


<PAGE> 66
                           SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this Amendment No. 1 to be signed on its behalf by the
undersigned, thereunto duly authorized.

                              REYNOLDS METALS COMPANY


                           By ALLEN M. EAREHART
                              ----------------------------
                              Allen M. Earehart
                              Senior Vice President and Controller


Date:  October 20, 1999





                                66


<PAGE>
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549

                            EXHIBITS
                               TO
                           FORM 10-K/A
                         AMENDMENT NO. 1
                               TO
                            FORM 10-K

           For the fiscal year ended December 31, 1998

                  Commission File No. 001-01430

                     REYNOLDS METALS COMPANY

                Attached herewith is Exhibit 23.

                              INDEX

    * EXHIBIT 2     -    Asset Purchase Agreement by and among Ball
                         Corporation, Ball Metal Beverage
                         Container Corp. and Reynolds Metals
                         Company dated as of April 22, 1998.  The
                         Registrant agrees to furnish to the
                         Commission upon request a copy of the
                         disclosure schedules supplemental to the
                         Asset Purchase Agreement.  (File No. 001-
                         01430, Form 10-Q Report for the Quarter
                         Ended June 30, 1998, EXHIBIT 2)

   ** EXHIBIT 3.1   -    Restated Certificate of Incorporation,
                         as amended.

   ** EXHIBIT 3.2   -    By-laws, as amended.

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

      EXHIBIT 4.2   -    By-laws.  See EXHIBIT 3.2.

    * EXHIBIT 4.3   -    Indenture dated as of April 1, 1989 (the
                         "Indenture") between Reynolds Metals
                         Company and The Bank of New York, as
                         Trustee, relating to Debt Securities.
                         (File No. 001-01430, Form 10-Q Report
                         for the Quarter Ended March 31, 1989,
                         EXHIBIT 4(c))

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

    * EXHIBIT 4.5   -    Rights Agreement dated as of March 8,
                         1999 between Reynolds Metals Company and
                         ChaseMellon Shareholder Services, L.L.C.
                         (File No. 001-01430, Form 8-K Report
                         dated March 8, 1999, pertaining to
                         Preferred Stock Purchase Rights, EXHIBIT
                         4.1)

    * EXHIBIT 4.6   -    Form of 9-3/8% Debenture due June 15, 1999.
                         (File No. 001-01430, Form 8-K Report
                         dated June 6, 1989, EXHIBIT 4)

    * EXHIBIT 4.7   -    Form of Fixed Rate Medium-Term Note.
                         (Registration Statement No. 33-30882 on
                         Form S-3, dated August 31, 1989, EXHIBIT
                         4.3)
_______________________
*   Incorporated by reference.
**  Previously filed.



<PAGE> 2
    * EXHIBIT 4.8   -    Form of Floating Rate Medium-Term Note.
                         (Registration Statement No. 33-30882 on
                         Form S-3, dated August 31, 1989, EXHIBIT
                         4.4)

    * EXHIBIT 4.9   -    Form of Book-Entry Fixed Rate Medium-Term
                         Note.  (File No. 001-01430, 1991 Form 10-
                         K Report, EXHIBIT 4.15)

    * EXHIBIT 4.10  -    Form of Book-Entry Floating Rate Medium-Term
                         Note.  (File No. 001-01430, 1991 Form 10-
                         K Report, EXHIBIT 4.16)

    * EXHIBIT 4.11  -    Form of 9% Debenture due August 15, 2003.
                         (File No. 001-01430, Form 8-K Report
                         dated August 16, 1991, Exhibit 4(a))

    * EXHIBIT 4.12  -    Articles of Continuance of Societe
                         d'Aluminium Reynolds du Canada,
                         Ltee/Reynolds Aluminum Company of
                         Canada, Ltd. (formerly known as Canadian
                         Reynolds Metals Company, Limited --
                         Societe Canadienne de Metaux Reynolds,
                         Limitee) ("RACC"), as amended.  (File
                         No. 001-01430, 1995 Form 10-K Report,
                         EXHIBIT 4.13)

    * EXHIBIT 4.13  -    By-Laws of RACC, as amended.  (File No. 001-
                         01430, Form 10-Q Report for the Quarter
                         Ended March 31, 1997, EXHIBIT 4.14)

     * EXHIBIT 4.14  -   Articles of Incorporation of Societe
                         Canadienne de Metaux Reynolds,
                         Ltee/Canadian Reynolds Metals Company,
                         Ltd. ("CRM"), as amended.  (File No. 001-
                         01430, Form 10-Q Report for the Quarter
                         Ended September 30, 1997, EXHIBIT 4.15)

     * EXHIBIT 4.15  -   By-Laws of CRM, as amended.  (File No. 001-
                         01430, Form 10-Q Report for the Quarter
                         Ended September 30, 1997, EXHIBIT 4.16)

     * EXHIBIT 4.16  -   Indenture dated as of April 1, 1993
                         among RACC, Reynolds Metals Company and
                         The Bank of New York, as Trustee.  (File
                         No. 001-01430, Form 8-K Report dated
                         July 14, 1993, EXHIBIT 4(a))

     * EXHIBIT 4.17  -   First Supplemental Indenture, dated as of
                         December 18, 1995 among RACC, Reynolds
                         Metals Company, CRM and The Bank of New
                         York, as Trustee.  (File No. 001-01430,
                         1995 Form 10-K Report, EXHIBIT 4.18)

     * EXHIBIT 4.18  -   Form of 6-5/8% Guaranteed Amortizing Note due
                         July 15, 2002.  (File No. 001-01430,
                         Form 8-K Report dated July 14, 1993,
                         EXHIBIT 4(d))

       EXHIBIT 9     -   None.

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

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

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


                                2


<PAGE> 3
    =* EXHIBIT 10.3  -   Reynolds Metals Company Performance
                         Incentive Plan, as amended and restated
                         effective January 1, 1996.  (File No.
                         001-01430, Form 10-Q Report for the
                         Quarter Ended March 31, 1995, EXHIBIT
                         10.4)

    =* EXHIBIT 10.4  -   Agreement dated December 9, 1987 between
                         Reynolds Metals Company and Jeremiah J.
                         Sheehan.  (File No. 001-01430, 1987 Form
                         10-K Report, EXHIBIT 10.9)

    =* EXHIBIT 10.5  -   Supplemental Death Benefit Plan for
                         Officers.  (File No. 001-01430, 1986
                         Form 10-K Report, EXHIBIT 10.8)

    =* EXHIBIT 10.6  -   Financial Counseling Assistance Plan for
                         Officers.  (File No. 001-01430, 1987
                         Form 10-K Report, EXHIBIT 10.11)

    =* EXHIBIT 10.7  -   Management Incentive Deferral Plan.
                         (File No. 001-01430, 1987 Form 10-K
                         Report, EXHIBIT 10.12)

    =* EXHIBIT 10.8  -   Deferred Compensation Plan for Outside
                         Directors as Amended and Restated
                         Effective December 1, 1993.  (File No.
                         001-01430, 1993 Form 10-K Report,
                         EXHIBIT 10.12)

   =** EXHIBIT 10.9  -   Form of Indemnification Agreement for
                         Directors and Officers.

    =* EXHIBIT 10.10 -   Form of Executive Severance Agreement as
                         amended between Reynolds Metals Company
                         and key executive personnel, including
                         each of the individuals listed in Item
                         4A of this report.  (File No. 001-01430,
                         1997 Form 10-K Report, EXHIBIT 10.10)

    =* EXHIBIT 10.11 -   Amendment to Reynolds Metals Company
                         1987 Nonqualified Stock Option Plan
                         effective May 20, 1988.  (File No. 001-
                         01430, Form 10-Q Report for the Quarter
                         Ended June 30, 1988, EXHIBIT 19(a))

    =* EXHIBIT 10.12 -   Amendment to Reynolds Metals Company
                         1987 Nonqualified Stock Option Plan
                         effective October 21, 1988.  (File No.
                         001-01430, Form 10-Q Report for the
                         Quarter Ended September 30, 1988,
                         EXHIBIT 19(a))

    =* EXHIBIT 10.13 -   Amendment to Reynolds Metals Company
                         1987 Nonqualified Stock Option Plan
                         effective January 1, 1987.  (File No.
                         001-01430, 1988 Form 10-K Report,
                         EXHIBIT 10.22)


    =* EXHIBIT 10.14 -   Form of Stock Option and Stock Appreciation
                         Right Agreement, as approved February
                         16, 1990 by the Compensation Committee
                         of the Company's Board of Directors.
                         (File No. 001-01430, 1989 Form 10-K
                         Report, EXHIBIT 10.24)

    =* EXHIBIT 10.15 -   Amendment to Reynolds Metals Company
                         1987 Nonqualified Stock Option Plan
                         effective January 18, 1991.  (File No.
                         001-01430, 1990 Form 10-K Report,
                         EXHIBIT 10.26)

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



                                3


<PAGE> 4
    =* EXHIBIT 10.16 -   Form of Stock Option Agreement, as approved
                         April 22, 1992 by the Compensation
                         Committee of the Company's Board of
                         Directors.  (File No. 001-01430, Form 10-
                         Q Report for the Quarter Ended March 31,
                         1992, EXHIBIT 28(a))

    =* EXHIBIT 10.17 -   Reynolds Metals Company Restricted Stock
                         Plan for Outside Directors.
                         (Registration Statement No. 33-53851 on
                         Form S-8, dated May 27, 1994, EXHIBIT
                         4.6)

    =* EXHIBIT 10.18 -   Reynolds Metals Company New Management
                         Incentive Deferral Plan.  (File No. 001-
                         01430, Form 10-Q Report for the Quarter
                         Ended June 30, 1994, EXHIBIT 10.30)

    =* EXHIBIT 10.19 -   Reynolds Metals Company Salary Deferral
                         Plan for Executives.  (File No. 001-
                         01430, Form 10-Q Report for the Quarter
                         Ended June 30, 1994, EXHIBIT 10.31)

    =* EXHIBIT 10.20 -   Reynolds Metals Company Supplemental
                         Long Term Disability Plan for
                         Executives.  (File No. 001-01430, Form
                         10-Q Report for the Quarter Ended June
                         30, 1994, EXHIBIT 10.32)

    =* EXHIBIT 10.21 -   Amendment to Reynolds Metals Company
                         1987 Nonqualified Stock Option Plan
                         effective August 19, 1994.  (File No.
                         001-01430, Form 10-Q Report for the
                         Quarter Ended September 30, 1994,
                         EXHIBIT 10.34)

    =* EXHIBIT 10.22 -   Amendment to Reynolds Metals Company
                         1992 Nonqualified Stock Option Plan
                         effective August 19, 1994.  (File No.
                         001-01430, Form 10-Q Report for the
                         Quarter Ended September 30, 1994,
                         EXHIBIT 10.35)

    =* EXHIBIT 10.23 -   Amendment to Reynolds Metals Company New
                         Management Incentive Deferral Plan
                         effective January 1, 1995.  (File No.
                         001-01430, 1994 Form 10-K Report,
                         EXHIBIT 10.36)

    =* EXHIBIT 10.24 -   Form of Split Dollar Life Insurance Agreement
                         (Trustee Owner, Trustee Pays Premiums).
                         (File No. 001-01430, Form 10-Q Report
                         for the Quarter Ended June 30, 1995,
                         EXHIBIT 10.34)

    =* EXHIBIT 10.25 -   Form of Split Dollar Life Insurance Agreement
                         (Trustee Owner, Employee Pays Premium).
                         (File No. 001-01430, Form 10-Q Report
                         for the Quarter Ended June 30, 1995,
                         EXHIBIT 10.35)

    =* EXHIBIT 10.26 -   Form of Split Dollar Life Insurance Agreement
                         (Employee Owner, Employee Pays Premium).
                         (File No. 001-01430, Form 10-Q Report
                         for the Quarter Ended June 30, 1995,
                         EXHIBIT 10.36)

    =* EXHIBIT 10.27 -   Form of Split Dollar Life Insurance Agreement
                         (Third Party Owner, Third Party Pays
                         Premiums).  (File No. 001-01430, Form 10-
                         Q Report for the Quarter Ended June 30,
                         1995, EXHIBIT 10.37)

    =* EXHIBIT 10.28 -   Form of Split Dollar Life Insurance Agreement
                         (Third Party Owner, Employee Pays
                         Premiums).  (File No. 001-01430, Form 10-
                         Q Report for the Quarter Ended June 30,
                         1995, EXHIBIT 10.38)

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


                                 4


<PAGE> 5
    =* EXHIBIT 10.29 -   Reynolds Metals Company 1996
                         Nonqualified Stock Option Plan.
                         (Registration Statement No. 333-03947 on
                         Form S-8, dated May 17, 1996, EXHIBIT
                         4.6)

    =* EXHIBIT 10.30 -   Amendment to Reynolds Metals Company
                         1992 Nonqualified Stock Option Plan
                         effective January 1, 1993.
                         (Registration Statement No. 333-03947 on
                         Form S-8, dated May 17, 1996, EXHIBIT
                         99)

    =* EXHIBIT 10.31 -   Form of Stock Option Agreement, as approved
                         May 17, 1996 by the Compensation
                         Committee of the Company's Board of
                         Directors.  (File No. 001-01430, Form 10-
                         Q Report for the Quarter Ended June 30,
                         1996, EXHIBIT 10.41)

    =* EXHIBIT 10.32 -   Form of Three Party Stock Option Agreement,
                         as approved May 17, 1996 by the
                         Compensation Committee of the Company's
                         Board of Directors.  (File No. 001-
                         01430, Form 10-Q Report for the Quarter
                         Ended June 30, 1996, EXHIBIT 10.42)

    =* EXHIBIT 10.33 -   Stock Option Agreement dated August 30, 1996
                         between Reynolds Metals Company and
                         Jeremiah J. Sheehan.  (File No. 001-
                         01430, Form 10-Q Report for the Quarter
                         Ended September 30, 1996, EXHIBIT 10.43)

    =* EXHIBIT 10.34 -   Amendment to Deferred Compensation Plan
                         for Outside Directors effective August
                         15, 1996.  (File No. 001-01430, Form 10-
                         Q Report for the Quarter Ended September
                         30, 1996, EXHIBIT 10.44)

    =* EXHIBIT 10.35 -   Amendment to Reynolds Metals Company New
                         Management Incentive Deferral Plan
                         effective January 1, 1996.  (File No.
                         001-01430, 1996 Form 10-K Report,
                         EXHIBIT 10.38)

    =* EXHIBIT 10.36 -   Amendment to Reynolds Metals Company
                         Performance Incentive Plan effective
                         January 1, 1996.  (File No. 001-01430,
                         1996 Form 10-K Report, EXHIBIT 10.39)

    =* EXHIBIT 10.37 -   Reynolds Metals Company Supplemental
                         Incentive Plan.  (File No. 001-01430,
                         1996 Form 10-K Report, EXHIBIT 10.40)

    =* EXHIBIT 10.38 -   Reynolds Metals Company Stock Plan for
                         Outside Directors.  (File No. 001-01430,
                         1996 Form 10-K Report, EXHIBIT 10.41)

    =* EXHIBIT 10.39 -   Special Executive Severance Package for
                         Certain Employees who Terminate
                         Employment between January 1, 1997 and
                         June 30, 1999 (or, if earlier, the date
                         of completion of employment related
                         actions related to the Company's
                         portfolio review process, as designated
                         by the Company's Chief Executive
                         Officer), approved by the Compensation
                         Committee of the Company's Board of
                         Directors on January 17, 1997 and
                         extended on May 15, 1998. (File No. 001-
                         01430, 1996 Form 10-K Report, EXHIBIT
                         10.42)

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



                                  5


<PAGE> 6

    =* EXHIBIT 10.40 -   Special Award Program for Certain
                         Executives or Key Employees, as approved
                         by the Compensation Committee of the
                         Company's Board of Directors on January
                         17, 1997.  (File No. 001-01430, 1996
                         Form 10-K Report, EXHIBIT 10.43)

    =* EXHIBIT 10.41 -   Amendment to Reynolds Metals Company
                         1996 Nonqualified Stock Option Plan
                         effective December 1, 1997.  (File No.
                         001-01430, 1997 Form 10-K Report,
                         EXHIBIT 10.41)

    =* EXHIBIT 10.42 -   Amendment to Reynolds Metals Company
                         Restricted Stock Plan for Outside
                         Directors effective December 1, 1997.
                         (File No. 001-01430, 1997 Form 10-K
                         Report, EXHIBIT 10.42)

    =* EXHIBIT 10.43 -   Reynolds Metals Company Long-Term
                         Performance Share Plan. (File No. 001-
                         01430, Form 10-Q Report for the Quarter
                         Ended June 30, 1998, EXHIBIT 10.43)

     * EXHIBIT 10.44 -   Asset Purchase Agreement by and among Ball
                         Corporation, Ball Metal Beverage
                         Container Corp. and Reynolds Metals
                         Company dated as of April 22, 1998.  See
                         EXHIBIT 2.

   =** EXHIBIT 10.45 -   Amendment to Reynolds Metals Company
                         Restricted Stock Plan for Outside
                         Directors effective January 1, 1999

   =** EXHIBIT 10.46 -   Amendment to Reynolds Metals Company
                         Stock Plan for Outside Directors
                         effective January 1, 1999

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

       EXHIBIT 12    -   Not applicable

       EXHIBIT 13    -   Not applicable

       EXHIBIT 16    -   Not applicable

       EXHIBIT 18    -   None

    ** EXHIBIT 21    -   List of Subsidiaries of Reynolds Metals
                         Company

       EXHIBIT 22    -   None

       EXHIBIT 23    -   Consent of Independent Auditors

    ** EXHIBIT 24    -   Powers of Attorney

    ** EXHIBIT 27    -   Financial Data Schedule

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



                                6