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Exhibit 4.68  



	 
	 	 

	 	 	 
	

 	 	Contacts:

Denis Couture

Vice-President, Public Affairs

& Communications

(416) 982-7020
	 	 	Lars-Eric Johansson

Executive Vice-President

& Chief Financial Officer

(416) 982-7139




n e w s    r e l e a s e 


 
 

NORANDA REPORTS SECOND QUARTER LOSS OF $15 MILLION
  Recapitalization Plan Will Add Financial Flexibility and Improve Cash Flow    
    



TORONTO, July 25, 2003 — Noranda Inc. today reported a net loss of $15 million ($0.11 per
common share) for the three months ended June 30, 2003. The results include net after-tax unusual items of $5 million comprising a non-recurring tax recovery
($7 million) and restructuring provisions ($12 million). The Company reported earnings, for the same period in 2002, of $47 million ($0.18 per common share), including a net
after-tax gain of $66 million from the sale of 51% of the CEZ processing facility. 


For
the first six months of 2003, the net loss amounts to $74 million or $0.38 per share compared to net earnings of $55 million or $0.19 per share in 2002. 



In
a separate statement on July 25th, Noranda announced a recapitalization plan that includes the issuance of up to $500 million of common shares, reduction of the
quarterly dividend from $0.20 to $0.12, conversion to U.S. dollar reporting and the issuance of US$300 million of debt. Proceeds from the new equity and debt issues will be used to
reduce current debt and augment financial resources for opportunities in the principal businesses. Altogether, the change to the dividend payment and the redemption of $150 million of preferred
shares are expected to reduce the company's annual dividends by approximately $70 million. 


Second Quarter Highlights  





	•
	Achieved
relatively unchanged year over year EBITDA despite the negative effect of the stronger Canadian dollar, relative to the U.S. dollar, of $23 million.



	•
	Issued
a private placement of preferred shares for gross proceeds of $150 million which have been used to reduce debt.



	•
	Sold
priority units in the Noranda Income Fund. Net proceeds of $110 million were received and a net after-tax gain of $41 million will be recorded
in the third quarter.



	•
	Reduced
net debt by $691 million since year-end 2002.



	•
	Signed
new collective agreement at the Horne smelter ending the labour strike.



	•
	Completed
the last of the uneconomic wheel contracts and closed the related production facility at American Racing Equipment. 






Commentary



"Our operations are performing well, our cost structure continues to improve and we are within reach of the goals set for the year," said Derek Pannell,
Noranda's President and Chief Executive Officer. "However, the Company's full potential continues to be hampered by the low metal price environment. Our recently announced
5-step recapitalization plan is a powerful initiative to improve financial flexibility so that Noranda is in a position to benefit more fully from opportunities in the copper and nickel
business." 


Consolidated Results  


Revenues
were lower in the quarter compared to the last year mostly on account of the stronger Canadian dollar and lower copper metal sales as a result of the labour strike at the Horne smelter which
was resolved in mid May. 


Operating
costs were lower than both the same period of last year and the first quarter of 2003. The steadily improving cost structure resulting from the Six Sigma program and other initiatives was
somewhat offset by increased energy rates. 






The
cost to purchase raw materials was lower year-over-year due to a reduction in purchasing requirements caused by the strike at the Horne smelter. 



Corporate
and general administration, exploration and research expenses were almost 18% lower than last year. Benefits of the co-ordination of functions throughout the Company's operations
and the adjustment of exploration and research programs to fit the business needs of the Company continue to be realized. 


The
Company recorded restructuring provisions of $20 million in the quarter related to workforce reductions and plant shutdowns at the Canadian Copper and Recycling business unit, American
Racing Equipment and the magnesium plant. 


Interest
expense of $51 million is net of capitalized interest of $2 million, which relates to the major capital projects currently under construction. 



The
tax recovery of $32 million recorded in the period includes a $12 million non-recurring recovery booked by Falconbridge which is attributable to Canadian Government
changes in resource sector taxation. 


OPERATIONS  


Copper  


The
Copper business reported operating income (earnings before interest, taxes and minority interest) of $48 million in the quarter compared to $46 million in the comparable period of
2002. The LME price for copper averaged US$0.74 per pound for the quarter and US$0.75 for the first half of the year. 


At
the Antamina mine, throughput at the mill averaged 73,589 tonnes per day with average grades of 1.09% copper and 1.97% zinc. By the end of the quarter, the remaining steps necessary to achieve
conversion of the project's debt to a non-recourse basis were completed. 


Collahuasi's
mine production was lower than the second quarter of 2002 as a result of lower ore grades. Concentrate production was lower than the corresponding period of 2002, while cathode production
was the same as last year's levels. 


Production
from the Lomas Bayas mine was similar to last year's levels. An expansion of the mine's crushing capacity to compensate for the declining ore grades, was started during the quarter. The
additional capacity, expected to be operational by the second quarter of 2004, will maintain the current production level and will require an investment of $16 million. 


At
the Altonorte smelter, throughput and operating performance of the new facilities exceeded expectations. Anode production exceeded both the second quarter of 2002 and the first quarter of 2003 by
78% and 65% respectively and additional production was held back because of the lack of casting capacity. The installation of a new casting wheel is scheduled to be completed by the end of July. 


Canadian Copper and Recycling  


The
Canadian Copper and Recycling business produced an operating loss of $8 million in the quarter including a pre-tax provision of $9 million for severances at both the Kidd
facility and the Horne smelter and an $11 million inventory write-down in the value of the metal inventory resulting from the stronger Canadian dollar. In the comparable period of
2002, the operating loss of $35 million included $18 million of closure costs at the Gaspé smelter. 



During
the quarter, the Company and the unionized employees at the Horne smelter signed a new collective agreement and ended the labour strike that began in June of 2002. The agreement gives the
Company increased flexibility in the assignment of workers, latitude to balance manpower levels with workload and removes employment guarantees for tradespersons. Prior to the return to work, the
labour force was reduced by 125 positions. The plant was operating at approximately 80% of capacity by the end of the quarter and attained normal operating levels in mid July. 


Copper
and zinc production from the Kidd Mine was lower than for the corresponding period of 2002 due to access restrictions to high grades zones in the upper mine. Production results should improve
for the balance of 






the
year with the completion of additional ground-control work. Copper cathode production for the period was above last year's output, while zinc production was slightly lower than in the second
quarter of 2002. 


During
the quarter, a decision was taken to extend the shutdown at the Kidd Creek zinc plant for market and supply-related reasons to September 30th instead of
September 2nd. As a further step to offset the strong Canadian dollar and weak market conditions, eighty-five positions were permanently removed from the workforce,
thereby lowering production costs. 


Nickel  


The
Nickel business produced operating income of $64 million in the quarter compared to $46 million in the comparable period of 2002. The LME nickel price averaged US$3.80 per pound for
the quarter, a 21% improvement over the second quarter 2002 average of US$3.15 per pound. 


At
the Sudbury mines, production was lower compared to last year because of ore grades which declined to 1.38% from 1.56%. In the third quarter, production will be affected by the scheduled vacation
shutdowns at the Lockerby and Thayer Lindsley mines and the Strathcona Mill. 


At
Raglan, metal production was ahead of the comparable period last year as higher ore grades and recoveries compensated for lower mine tonnages. 


Metal
production of 15,833 tonnes of nickel and 5,468 tonnes of copper from the Sudbury smelter were comparable to last year. The smelter is currently in its annual maintenance and vacation shutdown,
which began on June 22nd and will continue to August 4th. 


Production
from the Nikkelverk refinery was ahead of last year as the impact of lower custom feed volumes from the BCL smelter was offset by increased matte production from Sudbury. Production in the
third quarter will be negatively impacted by the shutdown of the Sudbury smelter. 


Production
at Falcondo of 6,557 tonnes was slightly lower than a year ago on account of scheduled maintenance work and a 5-day power failure. 


Zinc  


The
Zinc business recorded an operating loss of $43 million in the quarter compared to operating earnings of $70 million in the same period last year, which included a $98 million
pre-tax gain from the sale of the CEZ refinery. The LME zinc price averaged US$0.35 per pound in the quarter, essentially unchanged from a year ago. 



Production
at the Brunswick mine of 73,942 tonnes of zinc was slightly ahead of last year's level of 71,382 tonnes. Mill throughput averaged 10,184 tonnes per day compared to 9,913 tonnes in 2002. 


At
the Brunswick Smelter, production was below that of the second quarter of 2002 as the plant began its four-month shutdown in mid-June. The plant is scheduled to restart
operations in November 2003. 


At
the Bell-Allard mine, zinc production increased to 25,113 tonnes from last year's level of 24,521 tonnes. The mine is entering the last stages of its production life and workforce
adjustments are expected to begin at the end of the third quarter. 


Aluminum  


The
Aluminum business produced operating income of $9 million in the quarter compared to $20 million in the same quarter of 2002. The LME aluminum price averaged US$0.63 per pound for
the period. 


At
the primary smelter, both production and shipments exceeded last year's volumes however value-added product sales were lower. Results were also negatively affected by higher energy and pension
costs and the negative impact of the stronger Canadian dollar of approximately $14 million. 


At
Norandal, the year-over-year improvement in production and costs at all of the plants were offset by higher energy costs and a slowdown in the market, which has since
improved. 






Other Operations  


American
Racing Equipment (ARE) reported an operating loss of $10 million for the period including a pre-tax restructuring charge of $6 million. This compares to earnings of
$2 million in 2002. The current quarter results reflect the completion of the exit from the original wheel manufacturing business and the subsequent closure of the related manufacturing
facility in Queretaro, Mexico. 


FINANCIAL RESOURCES AND LIQUIDITY  


Cash
generated from operations before changes in working capital, amounted to $201 million for the quarter and $361 million for the first six months compared to $153 million and
$370 million a year ago. 


Capital
investments of $306 million for the first six months of the year were as planned. Investments for the full year are expected to approximate $715 million with the major
commitments being the deepening of the Kidd Mine D, the transition and expansion of the Collahuasi facility and the development of the Montcalm nickel/copper project. 


During
the quarter, Noranda issued six million cumulative preferred shares to Brascan Corporation for gross proceeds of $150 million. The shares pay an 8% annual dividend and are redeemable by
Noranda at any time without penalty. This brings the total amount raised through the issuance of preferred shares for the year to $300 million. Net proceeds were used to repay debt. 


On
May 28th, Falconbridge completed the sale of US$250 million of twelve-year debentures. The notes, which are unsecured and bear a coupon rate of 5.375% per
annum, mature on June 1, 2015. The proceeds were used to repay amounts outstanding under Falconbridge's commercial paper program, to fund planned capital expenditures and for general purposes. 


In
mid-July, Noranda sold its 11,984,900 Priority Units of the Noranda Income Fund at $9.85 per unit to a syndicate of underwriters. Net proceeds, received in the third quarter, of
$110 million were used to repay debt. Following the offering, Noranda still has a 25% interest in the Fund through its holding of Ordinary Units of Noranda Income Fund Limited Partnership. A
gain of $41 million will be recorded in the third quarter. 


At
the end of the quarter, cash resources stood at $554 million and net debt at $4.1 billion. At year-end 2002 the net debt was $4.8 billion. The decrease is mainly
due to the repayment of a US$200 million debenture, which matured during the quarter and the effect of the stronger Canadian dollar on the U.S. denominated debt. Consolidated undrawn
committed bank lines stood at approximately $1 billion at quarter end. 


In
July, the Company purchased the 3.3% net proceeds interest relating to the Antamina mine in Peru from Inmet Mining Corporation for US$22.5 million. The purchase releases Noranda of any
royalty obligation that it had on its share of the mine production and entitles it to receive royalties from Teck Cominco's interest in Antamina once the mine recovers its development cost. 



PROJECTS  


At
Nickel Rim South, in Sudbury, Ontario, the current phase of diamond drilling has been completed and borehole geophysical surveys are in progress to assist in the determination of the optimum
location for the shaft pilot hole. A revised inferred resource estimate of 7,950,000 tonnes is a 27% increase in tonnage compared to the January 1, 2003 estimate. 


The
development of the Montcalm nickel project in Ontario has been approved by the Falconbridge Board of Directors, subject to the receipt of all necessary operating permits. The net capital cost,
after preproduction revenues, to develop the project is estimated at $100 million, and includes $19 million for working capital. 


DIVIDEND  


The
following dividends have been declared: 



	Security
 
	 	Dividend Amount
 
	 	Record Date
 
	 	Payable Date
 

	Common shares	 	$0.12 per share	 	August 29, 2003	 	September 15, 2003
	Preferred Series F shares	 	Floating rate	 	August 29, 2003	 	September 12, 2003
	Preferred Series F shares	 	Floating rate	 	September 30, 2003	 	October 12, 2003
	Preferred Series F shares	 	Floating rate	 	October 31, 2003	 	November 12, 2003
	Preferred Series G shares	 	$0.38125 per share	 	October 15, 2003	 	November 1, 2003
	Preferred Series H shares	 	$0.40625 per share	 	August 15, 2003	 	September 30, 2003








QUARTERLY WEBCAST  


Noranda
will be holding its quarterly teleconference on Friday, July 25, 2003 at 8:30 a.m. Eastern Standard Time. The call will be broadcast live on the internet via
www.noranda.com. 





This
news release contains forward-looking statements concerning the Company's business and operations. The Company cautions that, by their nature, forward-looking statements involve risk and
uncertainty and the Company's actual results could differ materially from those expressed or implied in such statements. Reference should be made to the most recent Annual Information Form for a
description of the major risk factors. 


Noranda Inc. is a leading international mining and metals company with more than 48 mining and metallurgical operations and projects under development in 17 countries.
Noranda is one of the world's largest producers of zinc and nickel and is a significant producer of copper, primary and fabricated aluminum, lead, silver, gold, sulphuric acid and cobalt. Noranda is
also a major recycler of secondary copper, nickel and precious metals. It is listed on The Toronto Stock Exchange and The New York Stock Exchange (NRD).


— 30 —



Note: This press release is also available at www.noranda.com. All dollar amounts are in Canadian dollars unless otherwise
noted.


ATTACHMENTS  









 
 

NORANDA INC.    
    
    CONSOLIDATED RESULTS    
    
    ($ millions)    
    



	 
	 	Second Quarter
	 	Six Months Ended

June 30
	 
	 
	 	2003
	 	Restated

2002
	 	2003
	 	Restated

2002
	 
	 
	 	 
	 	(Note 2)
 
	 	 
	 	(Note 2)
 
	 
	Revenues(1)	 	 	1,578	 	 	1,668	 	 	3,163	 	 	3,303	 
	 	 	
	 	
	 	
	 	
	 
	
Operating expenses	
 	
 	

 	
 	
 	

 	
 	
 	

 	
 	
 	

 	
 
	 	Cost of operations	 	 	722	 	 	766	 	 	1,462	 	 	1,535	 
	 	Purchased raw materials	 	 	590	 	 	622	 	 	1,176	 	 	1,236	 
	 	Corporate and general administration	 	 	19	 	 	25	 	 	37	 	 	45	 
	 	Exploration	 	 	14	 	 	15	 	 	20	 	 	26	 
	 	Research	 	 	4	 	 	5	 	 	9	 	 	12	 
	 	Other operating income	 	 	—	 	 	—	 	 	(3	)	 	—	 
	 	 	
	 	
	 	
	 	
	 
	 	 	 	1,349	 	 	1,433	 	 	2,701	 	 	2,854	 
	 	 	
	 	
	 	
	 	
	 
	 	Operating income before depreciation and restructuring costs	 	 	229	 	 	235	 	 	462	 	 	449	 
	 	

Depreciation, amortization and reclamation	
 	
 	
180	
 	
 	

200	
 	
 	
353	
 	
 	

382	
 
	 	Magnesium and other restructuring costs, net	 	 	20	 	 	(72	)	 	63	 	 	(72	)
	 	 	
	 	
	 	
	 	
	 
	Operating income	 	 	29	 	 	107	 	 	46	 	 	139	 
	

Interest expense, net	
 	
 	
51	
 	
 	

36	
 	
 	
109	
 	
 	

71	
 
	Tax (recovery)	 	 	(32	)	 	6	 	 	(41	)	 	(17	)
	Minority interest in earnings of subsidiaries	 	 	25	 	 	18	 	 	52	 	 	30	 
	 	 	
	 	
	 	
	 	
	 
	Net income (loss)	 	 	(15	)	 	47	 	 	(74	)	 	55	 
	

Dividend on preferred shares	
 	
 	
13	
 	
 	

4	
 	
 	
17	
 	
 	

8	
 
	 	 	
	 	
	 	
	 	
	 
	Income (loss) attributable to common shares	 	 	(28	)	 	43	 	 	(91	)	 	47	 
	 	 	
	 	
	 	
	 	
	 
	Basic and Diluted Earnings (Loss) per common share — $	 	$	(0.11	)	$	0.18	 	$	(0.38	)	$	0.19	 
	 	 	
	 	
	 	
	 	
	 








Noranda Inc. has approximately 244.4 million common shares outstanding as at June 30, 2003 


	(1)
	Revenues
for the six months and quarter ended June 30, 2003 include $5 million and $4 million (2002 — $3 million and
$3 million) as the Company's share of earnings in the Noranda Income Fund. 







 
 

NORANDA INC.    
    
    CONSOLIDATED BALANCE SHEETS    
    
    ($ millions)    
    



	 
	 	Jun. 30

2003
	 	Restated

Dec. 31

2002

	 
	 	 
	 	(Note 2)
 

	Assets	 	 	 	 
	Current assets	 	 	 	 
	 	Cash and cash equivalents	 	554	 	463
	 	Accounts receivable	 	801	 	752
	 	Inventories	 	1,420	 	1,415
	 	 	
	 	

	 	 	2,775	 	2,630
	

Capital assets	
 	

7,496	
 	

8,169
	Investments and other assets	 	425	 	407
	Future income tax asset	 	304	 	242
	 	 	
	 	

	 	 	11,000	 	11,448
	 	 	
	 	

	
Liabilities and Shareholders' Equity	
 	

 	
 	

 
	Current Liabilities	 	 	 	 
	 	Bank advances and short-term notes	 	41	 	39
	 	Accounts and taxes payable	 	1,043	 	1,137
	 	Debt due within one year	 	567	 	490
	 	 	
	 	

	 	 	1,651	 	1,666
	

Long-term debt — wholly owned operations	
 	

1,701	
 	

2,219
	                            — partially-owned subsidiaries and
projects	 	2,356	 	2,514
	Liability element of convertible debentures	 	26	 	29
	Future income tax liability	 	365	 	319
	Other deferred credits	 	608	 	579
	Minority interest in subsidiaries	 	1,182	 	1,154
	Shareholders' equity (Note 7)	 	3,111	 	2,968
	 	 	
	 	

	 	 	11,000	 	11,448
	 	 	
	 	










 
 

NORANDA INC.    
    
    CONSOLIDATED STATEMENTS OF CASHFLOWS    
    
    ($ millions)    
    



	 
	 	Second Quarter
	 	Six Months Ended

June 30
	 
	 
	 	2003
	 	Restated

2002
	 	2003
	 	Restated

2002
	 
	 
	 	 
	 	(Note 2)
 
	 	 
	 	(Note 2)
 
	 
	Cash realized from (used for):	 	 	 	 	 	 	 	 	 
	
Operations	
 	

 	
 	

 	
 	

 	
 	

 	
 
	 	Earnings (loss)	 	(15	)	47	 	(74	)	55	 
	 	Charges (credits) not affecting cash:	 	 	 	 	 	 	 	 	 
	 	Depreciation and amortization	 	163	 	175	 	321	 	351	 
	 	Future income taxes	 	17	 	(21	)	(13	)	3	 
	 	Minority interest in earnings of subsidiaries	 	25	 	18	 	52	 	30	 
	 	Earnings in associates net of dividends received	 	2	 	(1	)	7	 	(1	)
	 	Other	 	9	 	(65	)	68	 	(68	)
	 	 	
	 	
	 	
	 	
	 
	 	 	201	 	153	 	361	 	370	 
	 	Change in operating working capital	 	(45	)	38	 	(227	)	(130	)
	 	 	
	 	
	 	
	 	
	 
	 	 	156	 	191	 	134	 	240	 
	 	 	
	 	
	 	
	 	
	 
	
Investment activities	
 	

 	
 	

 	
 	

 	
 	

 	
 
	 	Capital expenditures	 	(154	)	(206	)	(306	)	(403	)
	 	Investments and advances	 	(10	)	—	 	(10	)	(33	)
	 	Sale of assets and investments	 	14	 	409	 	16	 	413	 
	 	 	
	 	
	 	
	 	
	 
	 	 	(150	)	203	 	(300	)	(23	)
	 	 	
	 	
	 	
	 	
	 
	
Financing activities	
 	

 	
 	

 	
 	

 	
 	

 	
 
	 	Long-term debt, including current portion	 	 	 	 	 	 	 	 	 
	 	 	Issued	 	448	 	280	 	491	 	570	 
	 	 	Repaid	 	(396	)	(122	)	(431	)	(122	)
	 	Issue of common shares	 	2	 	2	 	2	 	2	 
	 	Settlement of stock options	 	—	 	(3	)	—	 	(3	)
	 	Share purchase plan repayment	 	—	 	1	 	—	 	2	 
	 	Issue of preferred shares	 	145	 	—	 	291	 	—	 
	 	 	
	 	
	 	
	 	
	 
	 	 	199	 	158	 	353	 	449	 
	 	 	
	 	
	 	
	 	
	 
	Dividends	 	(53	)	(64	)	(96	)	(127	)
	 	 	
	 	
	 	
	 	
	 
	Cash generated	 	152	 	488	 	91	 	539	 
	Cash, beginning of period	 	402	 	336	 	463	 	285	 
	 	 	
	 	
	 	
	 	
	 
	Cash, end of period	 	554	 	824	 	554	 	824	 
	 	 	
	 	
	 	
	 	
	 









 
 

NORANDA INC.    
    
    PRODUCTION VOLUMES    
    



	 
	 	 
	 	Second Quarter
	 	Six Months Ended June 30

	 
	 	 
	 	2003
	 	2002
	 	2003
	 	2002

	Mine Production (tonnes, except as noted)	 	 	 	 	 	 	 	 	 	 
	Copper	 	 	 	 	 	 	 	 	 	 
	 	Kidd Creek	 	 	 	10,655	 	11,152	 	21,373	 	22,040
	 	Matagami	 	 	 	1,928	 	2,084	 	3,931	 	3,943
	 	Brunswick	 	 	 	2,193	 	2,369	 	4,579	 	4,589
	 	INO	 	 	 	10,885	 	10,825	 	19,946	 	20,371
	 	Antamina	 	(33.75%)	 	21,942	 	31,631	 	46,399	 	57,690
	 	Collahuasi	 	(44%)	 	43,515	 	46,945	 	87,726	 	93,012
	 	Lomas Bayas	 	 	 	14,809	 	14,421	 	29,381	 	29,190
	 	Other	 	 	 	3,245	 	4,608	 	9,734	 	9,802
	 	 	 	 	
	 	
	 	
	 	

	 	 	 	 	109,172	 	124,035	 	223,069	 	240,637
	 	 	 	 	
	 	
	 	
	 	

	Zinc	 	 	 	 	 	 	 	 	 	 
	 	Kidd Creek	 	 	 	16,479	 	26,858	 	37,651	 	52,488
	 	Brunswick	 	 	 	73,942	 	71,382	 	144,740	 	140,876
	 	Matagami	 	 	 	25,113	 	24,521	 	50,397	 	43,655
	 	Antamina	 	(33.75%)	 	33,592	 	15,937	 	57,760	 	38,102
	 	Other	 	 	 	2,120	 	2,308	 	4,092	 	4,315
	 	 	 	 	
	 	
	 	
	 	

	 	 	 	 	151,246	 	141,006	 	294,640	 	279,436
	 	 	 	 	
	 	
	 	
	 	

	Nickel	 	 	 	13,754	 	13,192	 	26,715	 	27,334
	Ferronickel	 	 	 	6,557	 	7,162	 	13,444	 	10,264
	Lead	 	 	 	19,911	 	19,040	 	38,336	 	38,153
	Silver — 000 ounces	 	 	 	 	 	 	 	 	 	 
	 	Kidd Creek	 	 	 	548	 	774	 	1,287	 	1,982
	 	Brunswick	 	 	 	1,543	 	1,600	 	3,025	 	3,239
	 	Matagami	 	 	 	89	 	88	 	186	 	178
	 	Antamina	 	(33.75%)	 	575	 	569	 	1,260	 	1,224
	 	Other	 	 	 	61	 	66	 	130	 	127
	 	 	 	 	
	 	
	 	
	 	

	 	 	 	 	2,816	 	3,097	 	5,888	 	6,750
	 	 	 	 	
	 	
	 	
	 	

	Metal Production (tonnes, except as noted)	 	 	 	 	 	 	 	 	 	 
	Refined copper	 	 	 	 	 	 	 	 	 	 
	 	CCR	 	 	 	46,444	 	71,503	 	89,470	 	154,425
	 	Kidd Creek	 	 	 	38,024	 	37,346	 	74,983	 	71,140
	 	Nikkelverk	 	 	 	8,843	 	7,272	 	17,378	 	15,466
	 	Collahuasi	 	(44%)	 	6,583	 	6,579	 	13,445	 	13,008
	 	Lomas Bayas	 	 	 	14,809	 	14,421	 	29,381	 	29,190
	 	 	 	 	
	 	
	 	
	 	

	 	 	 	 	114,703	 	137,121	 	224,657	 	283,229
	 	 	 	 	
	 	
	 	
	 	

	Copper anodes	 	 	 	 	 	 	 	 	 	 
	 	Gaspe	 	 	 	—	 	6,477	 	—	 	29,612
	 	Horne	 	 	 	22,054	 	44,802	 	50,321	 	93,131
	 	Kidd Creek	 	 	 	36,276	 	36,496	 	73,044	 	72,703
	 	Altonorte	 	 	 	67,917	 	38,181	 	109,010	 	62,487
	 	 	 	 	
	 	
	 	
	 	

	 	 	 	 	126,247	 	125,956	 	232,375	 	257,933
	 	 	 	 	
	 	
	 	
	 	

	Refined zinc	 	 	 	 	 	 	 	 	 	 
	 	Kidd Creek	 	 	 	30,966	 	34,654	 	68,901	 	72,439
	 	CEZ (Noranda Income Fund)	 	(100% — basis)	 	65,673	 	69,981	 	127,728	 	132,329
	 	 	 	 	
	 	
	 	
	 	

	 	 	 	 	96,639	 	104,635	 	196,629	 	204,768
	 	 	 	 	
	 	
	 	
	 	

	Refined nickel	 	 	 	 	 	 	 	 	 	 
	 	Nikkelverk	 	 	 	20,140	 	18,314	 	40,703	 	35,371
	 	Falcondo	 	 	 	6,557	 	7,162	 	13,444	 	10,264
	 	 	 	 	
	 	
	 	
	 	

	 	 	 	 	26,697	 	25,476	 	54,147	 	45,635
	 	 	 	 	
	 	
	 	
	 	

	Primary aluminum	 	 	 	61,178	 	59,400	 	122,304	 	116,214
	Fabricated aluminum	 	 	 	36,660	 	34,211	 	73,585	 	64,175
	Refined lead	 	 	 	23,322	 	24,085	 	47,788	 	49,484
	Refined gold — 000 ounces	 	 	 	293	 	319	 	563	 	633
	Refined silver — 000 ounces	 	 	 	7,028	 	12,230	 	15,696	 	24,677









 
 

NORANDA INC.    
    
    SALES VOLUMES & REALIZED PRICES    
    



	 
	 	 
	 	Second Quarter
	 	Six Months Ended June 30

	 
	 	 
	 	2003
	 	2002
	 	2003
	 	2002

	Metal Sales (tonnes, except as noted)	 	 	 	 	 	 	 	 	 	 
	 	Copper	 	 	 	 	 	 	 	 	 	 
	 	 	CCR	 	 	 	48,608	 	77,428	 	95,762	 	175,492
	 	 	Kidd Creek	 	 	 	26,375	 	24,096	 	55,148	 	49,506
	 	 	Nikkelverk	 	 	 	16,139	 	13,634	 	30,609	 	29,261
	 	 	Antamina (concentrates)	 	(33.75%)	 	21,173	 	28,639	 	43,587	 	57,415
	 	 	Collahuasi (concentrates)	 	(44%)	 	37,548	 	38,115	 	73,462	 	70,533
	 	 	Collahuasi	 	(44%)	 	9,250	 	15,233	 	17,765	 	24,844
	 	 	Lomas Bayas	 	 	 	14,817	 	14,324	 	29,395	 	30,263
	 	 	 	 	
	 	
	 	
	 	

	 	 	 	 	173,910	 	211,469	 	345,728	 	437,314
	 	 	 	 	
	 	
	 	
	 	

	 	Zinc	 	 	 	 	 	 	 	 	 	 
	 	 	Kidd Creek	 	 	 	28,361	 	39,118	 	63,878	 	74,191
	 	 	Antamina (concentrates)	 	(33.75%)	 	31,033	 	15,009	 	46,433	 	38,040
	 	 	Brunswick/Matagami (concentrates)	 	 	 	86,104	 	78,517	 	164,131	 	113,174
	 	 	 	 	
	 	
	 	
	 	

	 	 	 	 	145,498	 	132,644	 	274,442	 	225,405
	 	 	 	 	
	 	
	 	
	 	

	 	 	CEZ (Noranda Income Fund)	 	(100% — basis)	 	65,548	 	71,314	 	124,147	 	132,171
	 	Nickel	 	 	 	20,562	 	17,137	 	40,952	 	35,905
	 	Ferronickel	 	 	 	6,455	 	7,460	 	12,991	 	8,003
	 	Aluminum	 	 	 	 	 	 	 	 	 	 
	 	 	Primary Aluminum — shipments	 	 	 	63,528	 	60,958	 	123,380	 	120,769
	 	 	Norandal — shipments	 	 	 	36,660	 	34,211	 	73,585	 	64,175
	 	Lead	 	 	 	26,446	 	22,195	 	44,915	 	46,212
	 	Gold — 000 ounces	 	 	 	213	 	318	 	449	 	590
	 	Silver — 000 ounces	 	 	 	 	 	 	 	 	 	 
	 	 	CCR	 	 	 	6,308	 	13,338	 	15,390	 	25,248
	 	 	Kidd Creek	 	 	 	1,553	 	1,124	 	2,757	 	1,502
	 	 	Antamina	 	(33.75%)	 	435	 	489	 	1,010	 	1,091
	 	 	 	 	
	 	
	 	
	 	

	 	 	 	 	8,296	 	14,951	 	19,157	 	27,841
	 	 	 	 	
	 	
	 	
	 	

	
Average Realized Prices — ($U.S. per pound, except as noted)	
 	

 
	 	 	Copper	 	 	 	0.75	 	0.76	 	0.76	 	0.74
	 	 	Copper — Falconbridge	 	 	 	0.76	 	0.75	 	0.77	 	0.75
	 	 	Zinc	 	 	 	0.40	 	0.41	 	0.40	 	0.41
	 	 	Zinc — Falconbridge	 	 	 	0.39	 	0.39	 	0.39	 	0.39
	 	 	Nickel	 	 	 	3.87	 	3.23	 	3.85	 	3.03
	 	 	Ferronickel	 	 	 	3.78	 	3.12	 	3.71	 	3.09
	 	 	Aluminum	 	 	 	0.67	 	0.66	 	0.67	 	0.66
	 	 	Lead	 	 	 	0.24	 	0.24	 	0.24	 	0.25
	 	 	Gold ($US per ounce)	 	 	 	344.27	 	311.86	 	350.58	 	301.16
	 	 	Silver ($US per ounce)	 	 	 	4.58	 	4.71	 	4.70	 	4.60
	 	 	Silver — Falconbridge ($US per ounce)	 	 	 	4.62	 	4.70	 	4.63	 	4.60
	
Exchange Rate (US$1 = Cdn$1)	
 	

 	
 	

1.40	
 	

1.55	
 	

1.45	
 	

1.57









 
 

NORANDA INC.    
    
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    
    
    ($ millions except as otherwise indicated)    
    


1.     Accounting Policies  



These
unaudited interim consolidated financial statements have been prepared following the accounting policies as set out in the 2002 annual consolidated financial statements except as discussed in
Note 2 below. The unaudited interim consolidated financial statements do not conform in all respects to the requirements of Canadian generally accepted accounting principles for annual
financial statements. Accordingly, these unaudited interim financial statements should be read in conjunction with the Company's audited annual consolidated financial statements and the accompanying
notes included in the 2002 Annual Report. 




2.     Change in Accounting Policy  



Effective
January 1, 2003, Noranda revised its capitalization of interest policy to harmonize its policies with U.S. accounting standards. 


Previously,
Noranda capitalized interest that could be identified with major projects until the project achieved commercial production. Under the new policy, interest is capitalized as it arises from
indebtedness incurred to finance major projects, either directly or indirectly, until the project achieves commercial production. As a result, an increase to retained earnings of $38 million
was recorded at January 1, 2003 ($36 million at January 1, 2002). The change resulted in a negligible impact to earnings for the six months and quarter ended June 30, 2003
(to June 30, 2002 — $12 million earnings over six months; $5 million earnings for the quarter). 




3.     Preferred Share Issue  



On
March 25, 2003, Noranda issued six million Cumulative Preferred Shares, Series H to the public, for gross proceeds of $150 million. These shares carry a 6.5% annual
dividend. 


On
April 24, 2003, Noranda completed an issue of six million Cumulative Preferred Shares, Series I to Brascan Corporation, for gross proceeds of $150 million. The preferred
shares carry an 8% annual dividend and are redeemable by Noranda without penalty. 



Proceeds
from both issues were applied against the Company's revolving bank debt. 




4.     Debt  



On
May 28, 2003 Noranda's partially-owned subsidiary issued US$250 million 5.375% fixed rate debentures maturing on June 1, 2015. The proceeds from this offering were used to
repay debt outstanding under the company's commercial paper program, to fund planned expenditures and for other general corporate purposes. 




5.     Business Restructuring  



Noranda
recorded in the first quarter a charge of $42 million ($30 million after-tax) related to costs associated with its decision to temporarily shut down its Magnesium
operation. This charge is reported as "Magnesium and other restructuring costs", in the six-month results ended June 30, 2003. 







6.     Stock-Based Compensation  



During
the first quarter, the Company granted 1,157,500 stock options at a price of $13.82 per share. These options have a 10-year term, vesting 20% per year over the first five years. The
compensation expense associated with this stock option series was calculated using the Black-Scholes valuation model, assuming a 8-year term, 25% volatility, a weighted- average expected
dividend of 5.79% annually and an interest rate of 4.95%, and is being charged against net income over its vesting period. 



Corporate
and general administration for the six months and quarter ended June 30, 2003 include compensation costs of $2 million and $1 million relating to outstanding options (to
June 30, 2002 — six months $5 million and $4 million for the quarter). 




7.     Shareholders' Equity  



	 
	 	June 30, 2003
	 	December 31, 2002
	 
	 
	 	Shares
	 	Amount
	 	Shares
	 	Amount
	 
	 
	 	(000)
 
	 	 
	 	(000)
 
	 	 
	 
	Share capital	 	 	 	 	 	 	 	 	 	 	 
	 	Authorized — an unlimited number of:	 	 	 	 	 	 	 	 	 	 	 
	 	 	Preferred, Common and Participating shares	 	 	 	 	 	 	 	 	 	 	 
	 	Issued:	 	 	 	 	 	 	 	 	 	 	 
	 	 	Common Shares	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	Balance, beginning of year	 	241,289	 	 	2,442	 	238,584	 	 	2,401	 
	 	 	 	 	Issued on exercise of stock options	 	2	 	 	—	 	15	 	 	—	 
	 	 	 	 	Issued under dividend re-investment	 	3,147	 	 	40	 	2,553	 	 	39	 
	 	 	 	 	Issued under share purchase plan	 	—	 	 	—	 	137	 	 	2	 
	 	 	
	 	
	 	
	 	
	 
	 	 	 	Balance, end of period	 	244,438	 	 	2,482	 	241,289	 	 	2,442	 
	 	 	
	 	
	 	
	 	
	 
	 	 	Preferred Shares, Series F	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	Balance beginning of year and end of period	 	3,246	 	 	81	 	3,246	 	 	81	 
	 	 	
	 	
	 	
	 	
	 
	 	 	Preferred Shares, Series G	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	Balance beginning of year and end of period	 	8,754	 	 	219	 	8,754	 	 	219	 
	 	 	
	 	
	 	
	 	
	 
	 	 	Preferred Shares, Series H	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	Balance beginning of year	 	—	 	 	—	 	—	 	 	—	 
	 	 	 	 	Issued	 	6,000	 	 	146	 	—	 	 	—	 
	 	 	
	 	
	 	
	 	
	 
	 	 	 	Balance end of period	 	6,000	 	 	146	 	—	 	 	—	 
	 	 	
	 	
	 	
	 	
	 
	 	 	Preferred Shares, Series I	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	Balance beginning of year	 	—	 	 	—	 	—	 	 	—	 
	 	 	 	 	Issued	 	6,000	 	 	145	 	—	 	 	—	 
	 	 	
	 	
	 	
	 	
	 
	 	 	 	Balance end of period	 	6,000	 	 	145	 	—	 	 	—	 
	 	 	
	 	
	 	
	 	
	 
	Contributed Surplus	 	 	 	 	3	 	 	 	 	2	 
	 	 	 	 	
	 	 	 	
	 
	Convertible Debentures	 	 	 	 	124	 	 	 	 	121	 
	 	 	 	 	
	 	 	 	
	 
	Basic and Diluted weighted average number of shares	 	 	 	 	241,624,024	 	 	 	 	238,823,521	 
	 	 	 	 	
	 	 	 	
	 
	Retained Earnings (deficit):	 	 	 	 	 	 	 	 	 	 	 
	 	Balance beginning of year	 	 	 	$	(17	)	 	 	$	896	 
	 	 	Change in accounting policy (note 2)	 	 	 	 	38	 	 	 	 	36	 
	 	 	 	 	
	 	 	 	
	 
	 	 	 	 	 	21	 	 	 	 	932	 
	 	 	Loss	 	 	 	 	(74	)	 	 	 	(698	)
	 	 	Dividends:    Common	 	 	 	 	(97	)	 	 	 	(191	)
	 	 	                      Preferred	 	 	 	 	(17	)	 	 	 	(17	)
	 	 	Other	 	 	 	 	(2	)	 	 	 	(5	)
	 	 	 	 	
	 	 	 	
	 
	 	Balance end of period	 	 	 	 	(169	)	 	 	 	21	 
	 	 	 	 	
	 	 	 	
	 
	Currency Translation and other at end of period	 	 	 	 	80	 	 	 	 	82	 
	 	 	 	 	
	 	 	 	
	 
	Total Shareholders' Equity	 	 	 	$	3,111	 	 	 	$	2,968	 
	 	 	 	 	
	 	 	 	
	 








8.     Exchange Gains and Losses  



The
majority of Noranda's products are denominated in US dollars or indexed to US dollar prices. In addition, operating costs of Noranda's international assets are also denominated in their local
currency and exposed to exchange volatility. Noranda manages its foreign currency exposure by utilizing spot and forward foreign exchange contracts with its banks as counter-parties. 


Revenues
for the six months and quarter ended June 30, 2003 include exchange gains of $25 million and $20 million (2002 — exchange loss of
$15 million and $6 million respectively). 


Other
foreign currency exchange contracts, relating to foreign currency expenditures and other foreign currency denominated monetary assets and liabilities, generated a loss of $6 million in
the quarter and year-to-date (2002 — gain of $2 million in the quarter and year-to-date) at Noranda's
partially-owned subsidiary. 




9.     Post-employment costs  



Noranda's
post-employment benefit expense for the six months and quarter ended June 30, 2003 was $62 million and $29 million
(2002 — $54 million and $28 million), which included $47 million and $22 million for its pension benefit plans and $15 million
and $7 million for other benefit plans (2002 — six months $38 million and $16 millon; quarter $20 million and $8 million). 


At
June 30, 2003, Noranda's pension plan assets were $1,836 (Dec. 2002 — $1,872) while obligations were $2,105 (Dec.
2002 — $2,203). 




10.   Guarantees  



Effective
January 1, 2003, the new CICA Accounting Guideline 14 requires disclosure of certain guarantees binding on corporations. Noranda has determined that it has no material guarantees
requiring disclosure under the accounting standard. 




11.   Subsequent Event  



Subsequent
to June 30, 2003, Noranda completed the sale of its 11,984,900 Priority Units of the Noranda Income Fund for net proceeds of $110 million. The net pre-tax gain on
the sale is estimated at $50 million. The proceeds will be used to repay debt. 




12.   Comparative Figures  



The
comparative consolidated financial statements have been reclassified from statements previously presented to conform to the presentation of the 2003 consolidated statements. 







13.   Segmented Information  



Noranda
has five operating segments: Aluminum, Canadian Copper and Recycling, Copper, Nickel and Zinc. Operating results are presented below: 



	 
	 	Second Quarter 2003
 
	 
	 
	 	Aluminum
	 	Canadian Copper & Recycling
	 	Copper
	 	Nickel
	 	Zinc
	 	Other
	 	Total
	 
	Revenues	 	$	239	 	467	 	315	 	435	 	132	 	(10	)	$	1,578	 
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 
	Operating expenses	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Cost of operations	 	 	132	 	86	 	117	 	237	 	84	 	66	 	 	722	 
	 	Purchased raw materials	 	 	83	 	353	 	101	 	69	 	65	 	(81	)	 	590	 
	 	Corporate and general administration	 	 	—	 	—	 	—	 	—	 	—	 	19	 	 	19	 
	 	Exploration	 	 	—	 	—	 	2	 	10	 	—	 	2	 	 	14	 
	 	Research and development	 	 	—	 	—	 	—	 	3	 	—	 	1	 	 	4	 
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 
	 	 	 	215	 	439	 	220	 	319	 	149	 	7	 	 	1,349	 
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 
	Operating income (loss) before depreciation and restructuring costs	 	 	24	 	28	 	95	 	116	 	(17	)	(17	)	 	229	 
	Depreciation, amortization and reclamation	 	 	15	 	27	 	47	 	52	 	26	 	13	 	 	180	 
	Magnesium and other restructuring costs	 	 	—	 	9	 	—	 	—	 	—	 	11	 	 	20	 
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 
	Operating Income (loss)	 	$	9	 	(8	)	48	 	64	 	(43	)	(41	)	$	29	 
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 
	Interest expense, net	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(51	)
	Tax recovery	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	32	 
	Minority interest in earnings of subsidiaries	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(25	)
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 
	Net loss	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	(15	)
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 
	Capital investments	 	$	8	 	26	 	72	 	38	 	1	 	9	 	$	154	 
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 





	 
	 	Second Quarter 2002 (Restated — Note 2)
 
	 
	 
	 	Aluminum
	 	Canadian Copper & Recycling
	 	Copper
	 	Nickel
	 	Zinc
	 	Other
	 	Total
	 
	Revenues	 	$	270	 	567	 	285	 	354	 	170	 	22	 	$	1,668	 
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 
	Operating expenses	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Cost of operations	 	 	133	 	205	 	114	 	183	 	103	 	28	 	 	766	 
	 	Purchased raw materials	 	 	101	 	347	 	65	 	62	 	66	 	(19	)	 	622	 
	 	Corporate and general administration	 	 	—	 	—	 	—	 	—	 	—	 	25	 	 	25	 
	 	Exploration	 	 	—	 	—	 	2	 	7	 	—	 	6	 	 	15	 
	 	Research and development	 	 	1	 	1	 	(1	)	4	 	1	 	(1	)	 	5	 
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 
	 	 	 	235	 	553	 	180	 	256	 	170	 	39	 	 	1,433	 
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 
	Operating income (loss) before depreciation	 	 	35	 	14	 	105	 	98	 	—	 	(17	)	 	235	 
	Depreciation, amortization and reclamation	 	 	15	 	31	 	59	 	52	 	24	 	19	 	 	200	 
	Restructuring costs, net	 	 	—	 	18	 	—	 	—	 	(94	)	4	 	 	(72	)
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 
	Operating Income (loss)	 	$	20	 	(35	)	46	 	46	 	70	 	(40	)	$	107	 
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 
	Interest expense, net	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(36	)
	Tax expense	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(6	)
	Minority interest in earnings of subsidiaries	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(18	)
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 
	Net income	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	47	 
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 
	Capital investments	 	$	12	 	47	 	57	 	32	 	2	 	56	 	$	206	 
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 








13.   Segmented Information  



	 
	 	Six Months ended June 30, 2003
 
	 
	 
	 	Aluminum
	 	Canadian Copper & Recycling
	 	Copper
	 	Nickel
	 	Zinc
	 	Other
	 	Total
	 
	Revenues	 	$	497	 	944	 	615	 	868	 	277	 	(38	)	$	3,163	 
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 
	Operating expenses	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Cost of operations	 	 	268	 	252	 	231	 	457	 	170	 	84	 	 	1,462	 
	 	Purchased raw materials	 	 	174	 	658	 	180	 	164	 	136	 	(136	)	 	1,176	 
	 	Corporate and general administration	 	 	—	 	—	 	—	 	—	 	—	 	37	 	 	37	 
	 	Exploration	 	 	—	 	—	 	4	 	13	 	—	 	3	 	 	20	 
	 	Research and development	 	 	—	 	—	 	—	 	5	 	—	 	4	 	 	9	 
	 	Other operating income	 	 	—	 	—	 	—	 	—	 	—	 	(3	)	 	(3	)
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 
	 	 	 	442	 	910	 	415	 	639	 	306	 	(11	)	 	2,701	 
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 
	Operating income (loss) before depreciation and restructuring costs	 	 	55	 	34	 	200	 	229	 	(29	)	(27	)	 	462	 
	Depreciation, amortization and reclamation	 	 	31	 	55	 	98	 	94	 	48	 	27	 	 	353	 
	Magnesium and other restructuring costs	 	 	—	 	9	 	—	 	—	 	—	 	54	 	 	63	 
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 
	Operating Income (loss)	 	$	24	 	(30	)	102	 	135	 	(77	)	(108	)	$	46	 
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 
	Interest expense, net	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(109	)
	Tax recovery	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	41	 
	Minority interest in earnings of subsidiaries	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(52	)
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 
	Net loss	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	(74	)
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 
	Total assets, excluding cash, cash equivalents and future tax assets	 	$	1,086	 	2,130	 	3,245	 	2,160	 	689	 	842	 	$	10,142	 
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 
	Capital investments	 	$	15	 	59	 	138	 	55	 	1	 	38	 	$	306	 
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 





	 
	 	Six Months ended June 30, 2003 (Restated — Note 2)
 
	 
	 
	 	Aluminum
	 	Canadian Copper & Recycling
	 	Copper
	 	Nickel
	 	Zinc
	 	Other
	 	Total
	 
	Revenues	 	$	526	 	1,202	 	577	 	625	 	370	 	3	 	$	3,303	 
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 
	Operating expenses	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Cost of operations	 	 	266	 	405	 	240	 	336	 	226	 	62	 	 	1,535	 
	 	Purchased raw materials	 	 	193	 	763	 	126	 	110	 	125	 	(81	)	 	1,236	 
	 	Corporate and general administration	 	 	—	 	—	 	—	 	—	 	—	 	45	 	 	45	 
	 	Exploration	 	 	—	 	1	 	5	 	12	 	1	 	7	 	 	26	 
	 	Research and development	 	 	1	 	1	 	—	 	7	 	2	 	1	 	 	12	 
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 
	 	 	 	460	 	1,170	 	371	 	465	 	354	 	34	 	 	2,854	 
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 
	Operating income (loss) before depreciation	 	 	66	 	32	 	206	 	160	 	16	 	(31	)	 	449	 
	Depreciation, amortization and reclamation	 	 	30	 	62	 	109	 	97	 	51	 	33	 	 	382	 
	Restructuring costs, net	 	 	—	 	18	 	—	 	—	 	(94	)	4	 	 	(72	)
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 
	Operating Income (loss)	 	$	36	 	(48	)	97	 	63	 	59	 	(68	)	$	139	 
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 
	Interest expense, net	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(71	)
	Tax expense	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	17	 
	Minority interest in earnings of subsidiaries	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(30	)
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 
	Net income	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	55	 
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 
	Total assets, excluding cash, cash equivalents and future tax assets	 	$	1,186	 	1,996	 	3,423	 	2,196	 	822	 	1,685	 	$	11,308	 
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 
	Capital investments	 	$	24	 	86	 	120	 	61	 	5	 	107	 	$	403	 
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	
	 











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NORANDA REPORTS SECOND QUARTER LOSS OF $15 MILLION Recapitalization Plan Will Add Financial Flexibility and Improve Cash Flow


NORANDA INC. CONSOLIDATED RESULTS ($ millions)



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