##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-Q
   (Mark One)þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)   OF THE
    SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended
    December 31, 2008oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)   OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    fromto   Commission file number:
    001-32312
  Novelis Inc.
 (Exact name of registrant as
    specified in its charter)
   Canada(State or other jurisdiction
    of
    incorporation or organization)

98-0442987(I.R.S. employer
    identification number)3399 Peachtree Road NE, Suite 1500
    Atlanta, Georgia(Address of principal
    executive offices)

30326(Zip
    Code)   Telephone:
    (404) 814-4200
 (Registrants telephone
    number, including area code)
   þ o
  Rule 12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer o
    Non-accelerated
    filer þ
    Smaller
    reporting
    company o   Rule 12b-2 o þ




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##### 





TABLE OF
    CONTENTS
   
 PART I.


FINANCIAL INFORMATIONItem 1.


Financial StatementsCondensed Consolidated Statements of Operations
    and Comprehensive Income (Loss) (unaudited) Three Months Ended
    December 31, 2008; Three Months Ended December 31,
    2007 (Restated); Nine Months Ended December 31, 2008;
    May 16, 2007 Through December 31, 2007 (Restated); and
    April 1, 2007 Through May 15, 2007


2Condensed Consolidated Balance Sheets (unaudited)
    as of December 31, 2008 and March 31, 2008
    (Restated)


3Condensed Consolidated Statements of Cash Flows
    (unaudited) Nine Months Ended December 31, 2008;
    May 16, 2007 Through December 31, 2007 (Restated); and
    April 1, 2007 Through May 15, 2007


4Condensed Consolidated Statement of
    Shareholders Equity (unaudited) Nine Months Ended
    December 31, 2008 (Restated as to opening balance)


6Notes to the Condensed Consolidated Financial
    Statements (unaudited)


7Item 2.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


55Item 3.


Quantitative and Qualitative Disclosures About
    Market Risk


89Item 4.


Controls and Procedures


93PART II.


OTHER INFORMATIONItem 1.


Legal Proceedings


95Item 1A.


Risk Factors


95Item 6.


Exhibits


96EX-10.1EX-10.2EX-31.1EX-31.2EX-32.1EX-32.2   1




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##### Table of Contents



PART I.
    FINANCIAL INFORMATION  Item 1.
    Financial
    Statements  Novelis
    Inc.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    AND
    COMPREHENSIVE INCOME (LOSS) (unaudited)
    (in millions)
  Three Months


Nine Months


May 16, 2007



April 1, 2007Ended


Ended


Through



ThroughDecember 31,


December 31,


December 31,



May 15,2008


2007


2008


2007



2007(Restated)





(Restated)Successor


Successor


Successor


Successor



PredecessorNet sales

$
2,176


$
2,735


$
8,238


$
7,103



$
1,281Cost of goods sold (exclusive of depreciation and amortization
    shown below)


2,023



2,474



7,645



6,465




1,205Selling, general and administrative expenses


73



99



246



229




95Depreciation and amortization


107



108



330



264




28Research and development expenses


11



11



33



34




6Interest expense and amortization of debt issuance costs, net


44



47



125



128




26(Gain) loss on change in fair value of derivative instruments,
    net


405



56



524



72




(20
)Impairment of goodwill


1,340







1,340








Restructuring charges, net


15



1



14



2




1Equity in net (income) loss of non-consolidated affiliates


166



3



166



(16
)



(1
)Sale transaction fees



















32Other (income) expenses, net


20



(17
)


53



(9
)



34,204



2,782



10,476



7,169




1,375Loss before income taxes and minority interests share


(2,028
)


(47
)


(2,238
)


(66
)



(94
)Income tax provision (benefit)


(199
)


26



(333
)


73




4Loss before minority interests share


(1,829
)


(73
)


(1,905
)


(139
)



(98
)Minority interests share


9







7



2




1Net loss


(1,820
)


(73
)


(1,898
)


(137
)



(97
)Other comprehensive income (loss):Currency translation adjustment






36



(63
)


50




31Change in fair value of effective portion of hedges


(27
)


1



(24
)


5




(1
)Postretirement benefit plans:Amortization of net actuarial loss



















(1
)Change in pension and other benefits


(17
)






(15
)







Other comprehensive income (loss) before income tax effect


(44
)


37



(102
)


55




29Income tax provision (benefit) related to items of other
    comprehensive income (loss)


11



(3
)


13



(15
)



(4
)Other comprehensive income (loss), net of tax


(55
)


40



(115
)


70




33Comprehensive loss

$
(1,875
)

$
(33
)

$
(2,013
)

$
(67
)


$
(64
)    2




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##### Table of Contents



Novelis
    Inc.
  CONDENSED
    CONSOLIDATED BALANCE SHEETS (unaudited)
 (in
    millions, except number of shares)
  December 31,


March 31,2008


2008(Restated)Successor


SuccessorASSETSCurrent assetsCash and cash equivalents

$
176


$
326Accounts receivable (net of allowances of $1 as of December 31
    and March 31, 2008) third parties


1,069



1,248 related parties


22



31Inventories


1,170



1,455Prepaid expenses and other current assets


73



58Fair value of derivative instruments


328



203Deferred income tax assets


274



125Total current assets


3,112



3,446Property, plant and equipment, net


2,920



3,357Goodwill


584



1,930Intangible assets, net


816



888Investment in and advances to non-consolidated affiliates


752



946Fair value of derivative instruments, net of current portion


71



21Deferred income tax assets


4



6Other long-term assets third parties


87



102 related parties


25



41Total assets

$
8,371


$
10,737LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilitiesCurrent portion of long-term debt

$
22


$
15Short-term borrowings


292



115Accounts payable third parties


970



1,582 related parties


51



55Fair value of derivative instruments


996



148Accrued expenses and other current liabilities


597



704Deferred income tax liabilities






39Total current liabilities


2,928



2,658Long-term debt, net of current portion


2,540



2,560Deferred income tax liabilities


520



754Accrued postretirement benefits


432



421Other long-term liabilities


335



6726,755



7,065Commitments and contingenciesMinority interests in equity of consolidated affiliates


106



149Shareholders equityCommon stock, no par value; unlimited number of shares
    authorized; 77,459,658 shares issued and outstanding as of
    December 31, 2008 and March 31, 2008






Additional paid-in capital


3,497



3,497Accumulated deficit


(1,918
)


(20
)Accumulated other comprehensive income (loss)


(69
)


46Total shareholders equity


1,510



3,523Total liabilities and shareholders equity

$
8,371


$
10,737    3




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##### Table of Contents



Novelis
    Inc.
  CONDENSED
    CONSOLIDATED STATEMENTS OF CASH FLOWS
 (unaudited)
    (in millions)
  Nine Months


May 16, 2007



April 1, 2007Ended


Through



ThroughDecember 31,


December 31,



May 15,2008


2007



2007(Restated)Successor


Successor



PredecessorOPERATING ACTIVITIESNet loss

$
(1,898
)

$
(137
)


$
(97
)Adjustments to determine net cash provided by (used in)
    operating activities:Depreciation and amortization


330



264




28(Gain) loss on change in fair value of derivative instruments,
    net


524



72




(20
)Deferred income taxes


(404
)


22




(18
)Amortization of debt issuance costs


4



8




1Write-off and amortization of fair value adjustments, net


(178
)


(156
)



Impairment of goodwill


1,340








Equity in net (income) loss of non-consolidated affiliates


166



(16
)



(1
)Foreign exchange remeasurement on non-working capital items, net


21








Gain on reversal of accrued legal claim


(26
)







Provision for uncollectible accounts receivable






1




Inventory reserves and adjustments


38








Dividends from non-consolidated affiliates











4Minority interests share


(7
)


(2
)



(1
)Impairment charges on long-lived assets


1








(Gain) loss on sales of property, plant and equipment and
    business, net


(1
)







Changes in assets and liabilities:Accounts receivable third parties


85



76




(21
) related parties






1




Inventories


98



190




(76
)Prepaid expenses and other current assets


(25
)


(1
)



(7
)Other long-term assets


8



(4
)



(1
)Accounts payable third parties


(459
)


(260
)



(62
) related parties


4



7




Accrued expenses and other current liabilities


(45
)


(53
)



42Accrued postretirement benefits


23








1Other long-term liabilities


(33
)


17




(2
)Net cash provided by (used in) operating activities


(434
)


29




(230
)INVESTING ACTIVITIESCapital expenditures


(107
)


(120
)



(17
)Net proceeds from settlement of derivative instruments


180



56




18Proceeds from sales of property, plant and equipment and business


4



4




Changes to investment in and advances to non-consolidated
    affiliates


17



5




1Proceeds from related parties loans receivable, net


18



12




Net cash provided by (used in) investing activities


112



(43
)



2    4




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##### Table of Contents



Novelis
    Inc.
  CONDENSED
    CONSOLIDATED STATEMENTS OF CASH FLOWS
 (unaudited)
    (in millions)  (Continued)
  Nine Months


May 16, 2007



April 1, 2007Ended


Through



ThroughDecember 31,


December 31,



May 15,2008


2007



2007(Restated)Successor


Successor



PredecessorFINANCING ACTIVITIESProceeds from issuance of common stock






92




Proceeds from issuance of debt


8



1,100




150Principal repayments


(11
)


(1,005
)



(1
)Short-term borrowings, net


193



(103
)



60Dividends  minority interests


(5
)


(1
)



(7
)Debt issuance costs






(37
)



(2
)Proceeds from the exercise of stock options











1Net cash provided by financing activities


185



46




201Net increase (decrease) in cash and cash equivalents


(137
)


32




(27
)Effect of exchange rate changes on cash balances held in
    foreign currencies


(13
)


(3
)



1Cash and cash equivalents at beginning of period


326



102




128Cash and cash equivalents at end of period

$
176


$
131



$
102Supplemental disclosures of cash flow information:Interest paid

$
101


$
122



$
13Income taxes paid

$
87


$
50



$
9Supplemental schedule of non-cash investing and financing
    activities related to the Acquisition of Novelis Common Stock
    (See Note 1):Property, plant and equipment





$
(1,346
)Goodwill





$
(1,645
)Intangible assets





$
(883
)Investment in and advances to non-consolidated affiliates





$
(775
)Debt





$
66    5




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##### Table of Contents



Novelis
    Inc.
  CONDENSED
    CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
    (unaudited)
 (in
    millions, except number of shares)
  AccumulatedAdditional





OtherCommon Stock


Paid-in


Accumulated


ComprehensiveShares


Amount


Capital


Deficit


Income (Loss)


TotalSuccessorBalance as of March 31, 2008 (Restated)


77,459,658


$



$
3,497


$
(20
)

$
46


$
3,523Net loss














(1,898
)






(1,898
)Currency translation adjustment, net of tax


















(90
)


(90
)Change in fair value of effective portion of hedges, net of tax


















(17
)


(17
)Postretirement benefit plans:Change in pension and other benefits, net of tax


















(8
)


(8
)Balance as of December 31, 2008


77,459,658


$



$
3,497


$
(1,918
)

$
(69
)

$
1,510    6




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##### Table of Contents



Novelis
    Inc.



NOTES TO
    THE CONDENSED CONSOLIDATED

FINANCIAL
    STATEMENTS (unaudited)  1.
    Business
    and Summary of Significant Accounting Policies    Description
    of Business and Basis of Presentation
    Form 10-K/A
  Acquisition
    of Novelis Common Stock and Predecessor and Successor
    Reporting
    Push Down Basis
    of Accounting Required in Certain Limited Circumstances Business Combinations
 7




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##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Reclassifications
  Fair value of derivative instruments Accrued expenses and other current
    liabilities
  Deferred income tax assets, Accrued expenses and other current
    liabilities, Deferred income
    tax liabilities Goodwill
  Recently
    Adopted Accounting Standards
    No. FAS 140-4 Disclosures by Public Entities (Enterprises) about Transfers
    of Financial Assets and Interests in Variable Interest Entities.
  The Hierarchy of Generally Accepted
    Accounting Principles
  The Fair Value Option for Financial Assets and Financial
    Liabilities  including an amendment of FASB Statement
    No. 115 instrument-by-instrument Accounting for Derivative Instruments and Hedging Activities
  Fair Value Measurements No. FAS 157-2, Effective Date of FASB Statement No. 157
 8




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##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  No. FAS 157-1, Application of FASB Statement No. 157 to FASB Statement
    No. 13 and Other Accounting Pronouncements That Address
    Fair Value Measurements for Purposes of Lease Classification or
    Measurement under Statement 13 Accounting for Leases Business Combinations
  No. FIN 39-1, Amendment of FASB Interpretation No. 39 FIN 39-1). FIN 39-1 Offsetting of Amounts
    Related to Certain Contracts
  Recently
    Issued Accounting Standards
    Employers Disclosures about Pensions
    and Other Postretirement Benefits
  No. FAS 142-3, Determination of Useful Life of Intangible Assets FAS 142-3). FAS 142-3 Goodwill and Other Intangible Assets FAS 142-3 FAS 142-3 FAS 142-3
  Disclosures about Derivative Instruments and Hedging
    Activities, an amendment of FASB Statement No. 133
 9




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##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    Business Combinations , Accounting for Income Taxes,
  Noncontrolling Interests in Consolidated Financial Statements
    2.
    Impact of
    Market Conditions on our Business     10




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##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
        3.
    Restatement
    of Financial Statements  Form 10-K/A
 11




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##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    Three MonthsEndedDecember 31, 2007As Previously





AsReported


Restatements


RestatedSuccessor





SuccessorNet sales

$
2,735


$



$
2,735Cost of goods sold (exclusive of depreciation and amortization
    shown below)


2,475



(1
)


2,474Selling, general and administrative expenses


99







99Depreciation and amortization


105



3



108Research and development expenses


11







11Interest expense and amortization of debt issuance costs, net


47







47Loss on change in fair value of derivative instruments, net


50



6



56Restructuring charges, net


1







1Equity in net (income) loss of non-consolidated affiliates


4



(1
)


3Other income, net


(12
)


(5
)


(17
)2,780



2



2,782Loss before income taxes and minority interests share


(45
)


(2
)


(47
)Income tax provision


4



22



26Loss before minority interests share


(49
)


(24
)


(73
)Minority interests share










Net loss


(49
)


(24
)


(73
)Other comprehensive income:Currency translation adjustment


36







36Change in fair value of effective portion of hedges, net


1







1Other comprehensive income before income tax effect


37







37Income tax benefit related to items of other comprehensive income


(3
)






(3
)Other comprehensive income, net of tax


40







40Comprehensive loss

$
(9
)

$
(24
)

$
(33
)  12




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##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    May 16, 2007ThroughDecember 31, 2007As Previously





AsReported


Restatements


RestatedSuccessor





SuccessorNet sales

$
7,103


$



$
7,103Cost of goods sold (exclusive of depreciation and amortization
    shown below)


6,466



(1
)


6,465Selling, general and administrative expenses


229







229Depreciation and amortization


260



4



264Research and development expenses


34







34Interest expense and amortization of debt issuance costs, net


128







128Loss on change in fair value of derivative instruments, net


72







72Restructuring charges, net


2







2Equity in net (income) loss of non-consolidated affiliates


9



(25
)


(16
)Other income, net


(9
)






(9
)7,191



(22
)


7,169Income (loss) before provision for taxes on loss and minority
    interests share


(88
)


22



(66
)Income tax provision


4



69



73Loss before minority interests share


(92
)


(47
)


(139
)Minority interests share


2







2Net loss


(90
)


(47
)


(137
)Other comprehensive income:Currency translation adjustment


50







50Change in fair value of effective portion of hedges, net


5







5Other comprehensive income before income tax effect


55







55Income tax benefit related to items of other comprehensive income


(15
)






(15
)Other comprehensive income, net of tax


70







70Comprehensive loss

$
(20
)

$
(47
)

$
(67
)  13




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##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    May 16, 2007ThroughDecember 31, 2007As Previously





AsReported


Restatements


RestatedSuccessor





SuccessorOPERATING ACTIVITIESNet loss

$
(90
)

$
(47
)

$
(137
)Adjustments to determine net cash provided by (used in)
    operating activities:Depreciation and amortization


260



4



264Loss on change in fair value of derivative instruments, net


72







72Deferred income taxes


(46
)


68



22Amortization of debt issuance costs


8







8Write-off and amortization of fair value adjustments, net


(156
)






(156
)Provision for uncollectible accounts receivable


1







1Equity in net (income) loss of non-consolidated affiliates


9



(25
)


(16
)Minority interests share


(2
)






(2
)Changes in assets and liabilities (net of effects from
    acquisitions and divestitures):Accounts receivable third parties


76







76 related parties


1







1Inventories


190







190Prepaid expenses and other current assets


(1
)






(1
)Other long-term assets


(4
)






(4
)Accounts payable third parties


(260
)






(260
) related parties


7







7Accrued expenses and other current liabilities


(53
)






(53
)Accrued postretirement benefits


2



(2
)


Other long-term liabilities


17







17Net cash provided by (used in) operating activities


31



(2
)


29INVESTING ACTIVITIESCapital expenditures


(120
)






(120
)Net proceeds from settlement of derivative instruments


56







56Proceeds from sales of property, plant and equipment and business


4







4Changes to investment in and advances to non-consolidated
    affiliates


5







5Proceeds from related parties loans receivable, net


12







12Net cash used in investing activities


(43
)






(43
)FINANCING ACTIVITIESProceeds from issuance of common stock


92







92Proceeds from issuance of debt


1,100







1,100Principal repayments


(1,005
)






(1,005
)Short-term borrowings, net


(103
)






(103
)Dividends  minority interests


(1
)






(1
)Debt issuance costs


(37
)






(37
)Net cash provided by financing activities


46







46Net increase (decrease) in cash and cash equivalents


34



(2
)


32Effect of exchange rate changes on cash balances held in
    foreign currencies


(3
)






(3
)Cash and cash equivalents at beginning of period


102







102Cash and cash equivalents at end of period

$
133


$
(2
)

$
131  14




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  4.
    Impairment
    of Goodwill and Investment in Affiliate  Goodwill and
    Intangible Assets
    build-up build-up build-up
  Form 10-Q Equity in net
    (income) loss of non-consolidated affiliates
    March 31,





Other


December 31,Reporting Unit

2008(A)


Impairments


Adjustments(B)


2008(Restated)Successor








SuccessorNorth America

$
1,149


$
(860
)

$
(1
)

$
288Europe


518



(330
)


(5
)


183South America


263



(150
)






113$
1,930


$
(1,340
)

$
(6
)

$
584  15




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    (A)
    
    See Note 1  Business and Summary of Significant
    Accounting Policies (Reclassifications) for
    discussion of goodwill balance reclassification at
    March 31, 2008.(B)
    
    Other adjustments include: (1) an adjustment in North
    America for final payment related to the transfer of pension
    plans in Canada for employees who elected to transfer their past
    service to Novelis during the quarter ended June 30, 2008
    and (2) adjustments in Europe related to tax audits during
    the quarters ended September 30, 2008 and December 31,
    2008.    5.
    Inventories    December 31, 2008


March 31, 2008Successor


SuccessorFinished goods

$
290


$
381Work in process


408



638Raw materials


387



362Supplies


88



751,173



1,456Allowances


(3
)


(1
)Inventories

$
1,170


$
1,455   6.
    Property,
    Plant and Equipment    December 31, 2008


March 31, 2008(Restated)Successor


SuccessorLand and property rights

$
224


$
258Buildings


751



826Machinery and equipment


2,461



2,4603,436



3,544Accumulated depreciation and amortization


(612
)


(331
)2,824



3,213Construction in progress


96



144Property, plant and equipment, net

$
2,920


$
3,357  16




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##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    Three Months


Nine Months


May 16, 2007



April 1, 2007Ended


Ended


Through



ThroughDecember 31,


December 31,


December 31,



May 15,2008


2007


2008


2007



2007(Restated)





(Restated)Successor


Successor


Successor


Successor



PredecessorDepreciation expense related to property, plant and equipment

$
96


$
97


$
299


$
239



$
28     Three Months


Nine Months


May 16, 2007



April 1, 2007Ended


Ended


Through



ThroughDecember 31,


December 31,


December 31,



May 15,2008


2007


2008


2007



2007Successor


Successor


Successor


Successor



PredecessorTotal Amortization expense related to intangible assets

$
16


$
17


$
46


$
39



$
Less: Amortization expense related to intangible assets included
    in Cost of goods sold(A)


(5
)


(6
)


(15
)


(14
)



Amortization expense related to intangible assets included in
    Depreciation and amortization

$
11


$
11


$
31


$
25



$
     (A)
    
    Relates to amortization of favorable energy and other supply
    contracts.  7.
    Restructuring
    Programs    Other ExitSeverance Reserves


Related Reserves


TotalNorth


Corporate








North





RestructuringEurope


America


and Other


Total


Europe


America


Total


ReservesSuccessor:Balance as of March 31, 2008

$
4


$
3


$



$
7


$
16


$
1


$
17


$
24Provisions (recoveries), net






11



3



14















14Cash payments


(1
)


(3
)






(4
)


(4
)






(4
)


(8
)Other adjustments


(2
)


2











(2
)






(2
)


(2
)Balance as of December 31, 2008

$
1


$
13


$
3


$
17


$
10


$
1


$
11


$
28     8.
    Consolidation
    of Variable Interest Entities   17




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
      Logan
    Organization and Operations
  ARCO Aluminum Complaint
    Primary
    Beneficiary
     18




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Carrying
    Value
    December 31, 2008


March 31, 2008Successor


SuccessorCurrent assets

$
36


$
35Total assets

$
63


$
60Current liabilities

$
(26
)

$
(21
)Total liabilities

$
(71
)

$
(57
)Net carrying value

$
(8
)

$
3   9.
    Investment
    in and Advances to Non-Consolidated Affiliates and Related Party
    Transactions    OwnershipAffiliate Name

Ownership Structure

PercentageAluminium Norf GmbH

Corporation


50
%Consorcio Candonga

Unincorporated Joint Venture


50
%MiniMRF LLC

Limited Liability Company


50
%Deutsche Aluminium Verpackung Recycling GmbH

Corporation


30
%France Aluminium Recyclage S.A.

Public Limited Company


20
%     Three Months


Nine Months


May 16, 2007


April 1, 2007Ended


Ended


Through


ThroughDecember 31,


December 31,


December 31,


May 15,2008


2007


2008


2007


2007Net sales

$
115


$
161


$
439


$
384


$
45Costs, expenses and provisions for taxes on income


112



137



400



348



43Net income

$
3


$
24


$
39


$
36


$
2  19




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    Three Months


Nine Months


May 16, 2007



April 1, 2007Ended


Ended


Through



ThroughDecember 31,


December 31,


December 31,



May 15,2008


2007


2008


2007



2007Successor


Successor


Successor


Successor



PredecessorIncremental depreciation and amortization expense

$
12


$
15


$
38


$
27



$
Tax benefit(A)


(4
)


(1
)


(12
)


(25
)



Incremental depreciation and amortization expense, net

$
8


$
14


$
26


$
2



$
     (A)
    
    The tax benefits for the three months ended December 31,
    2007 and the period from May 16, 2007 through
    December 31, 2007 includes tax benefits associated with
    amortization and a statutory tax rate change recorded as part of
    our equity method accounting for these investments. There were
    no such statutory tax rate changes in the other periods noted in
    the table above.    Three Months


Nine Months


May 16, 2007



April 1, 2007Ended


Ended


Through



ThroughDecember 31,


December 31,


December 31,



May 15,2008


2007


2008


2007



2007Successor


Successor


Successor


Successor



PredecessorPurchases of tolling services and electricityAluminium Norf GmbH(A)

$
56


$
77


$
203


$
182



$
21Consorcio Candonga(B)


2



4



15



9




1Total purchases from related parties

$
58


$
81


$
218


$
191



$
22     (A)
    
    We purchase tolling services (the conversion of customer-owned
    metal) from Aluminium Norf GmbH.(B)
    
    We purchase electricity from Consorcio Candonga for our
    operations in South America.    December 31, 2008


March 31, 2008Successor


SuccessorAccounts receivable(A)

$
22


$
31Other long-term receivables(A)

$
25


$
41Accounts payable(B)

$
51


$
55     (A)
    
    The balances represent current and non-current portions of a
    loan due from Aluminium Norf GmbH.(B)
    
    We purchase tolling services from Aluminium Norf GmbH and
    electricity from Consorcio Candonga. 20




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
   10.
    Accrued
    Expenses and Other Current Liabilities    December 31, 2008


March 31, 2008Successor


SuccessorAccrued compensation and benefits

$
97


$
141Accrued settlement of legal claim






39Accrued interest payable


41



15Accrued income taxes


39



37Current portion of fair value of unfavorable sales contracts


208



242Other current liabilities


212



230Accrued expenses and other current liabilities

$
597


$
704   11.
    Debt    December 31, 2008


March 31, 2008Unamortized








UnamortizedInterest





Fair Value


Carrying





Fair Value


CarryingRates(A)


Principal


Adjustments(B)


Value


Principal


Adjustments(B)


ValueSuccessor








SuccessorNovelis Inc.7.25% Senior Notes, due February 2015


7.25
%

$
1,399


$
61


$
1,460


$
1,399


$
67


$
1,466Floating rate Term Loan facility, due July 2014(E)


3.44
%


295







295



298







298Novelis CorporationFloating rate Term Loan facility, due July 2014(E)


3.44
%(C)


650







650



655







655Novelis Switzerland S.A.Capital lease obligation, due January 2020 (Swiss francs (CHF)
    52 million)


7.50
%


48



(3
)


45



54



(4
)


50Capital lease obligation, due August 2011 (CHF 3 million)


2.49
%


3







3



3







3Novelis Korea LimitedBank loan, due October 2010


5.44
%


100







100



100







100Bank loan, due May 2009 (Korean won (KRW) 10 billion)


7.47
%


8







8











Bank loans, due September 2010 through June 2011 (KRW
    400 million)


3.50
%(D)














1







1OtherOther debt, due April 2009 through December 2012


1.08
%(D)


1







1



2







2Total debt






2,504



58



2,562



2,512



63



2,575Less: current portion






(22
)






(22
)


(15
)






(15
)Long-term debt, net of current portion





$
2,482


$
58


$
2,540


$
2,497


$
63


$
2,560  21




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    (A)
    
    Interest rates are as of December 31, 2008 and exclude the
    effects of accretion/amortization of fair value adjustments as a
    result of the Arrangement.(B)
    
    Debt was recorded at fair value as a result of the Arrangement.(C)
    
    Excludes the effect of related interest rate swaps.(D)
    
    Weighted average interest rate.(E)
    
    On July 6, 2007, we entered into new senior secured credit
    facilities with a syndicate of lenders led by affiliates of UBS
    and ABN AMRO (New Senior Secured Credit Facilities) providing
    for aggregate borrowings of up to $1.76 billion. The New
    Senior Secured Credit Facilities consist of (1) a
    $960 million seven-year Term Loan facility (Term Loan
    facility) and (2) an $800 million five year
    multi-currency asset-based revolving credit line and letter of
    credit facility (ABL facility).    Interest
    Rate Swaps
        Short-Term
    Borrowings and Lines of Credit
       22




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Subsequent
    event
    12.
    Share-Based
    Compensation  Novelis
    Long-Term Incentive Plan
  th
           23




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Share-Based Payment
    Expected volatility

46.9  51.9%Weighted average volatility

48.9%Dividend yield

3.6%Risk-free interest rate

5.3  5.4%Expected life

3.5  5.0 years       Recognition
    Awards
      Share-Based
    Compensation Expense
  Selling, general and
    administrative expenses
 24




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    13.
    Postretirement
    Benefit Plans    Three Months


Nine Months


May 16, 2007



April 1, 2007Ended


Ended


Through



ThroughDecember 31,


December 31,


December 31,



May 15,2008


2007


2008


2007



2007(Restated)





(Restated)Successor


Successor


Successor


Successor



PredecessorPension Benefit PlansService cost

$
11


$
10


$
32


$
28



$
6Interest cost


16



12



46



30




6Expected return on assets


(14
)


(11
)


(40
)


(27
)



(5
)Amortization  prior service cost










(1
)







Curtailment/settlement losses






1



1



1




Net periodic benefit cost

$
13


$
12


$
38


$
32



$
7   Three Months


Nine Months


May 16, 2007



April 1, 2007Ended


Ended


Through



ThroughDecember 31,


December 31,


December 31,



May 15,2008


2007


2008


2007



2007Successor


Successor


Successor


Successor



PredecessorOther Postretirement Benefit PlansService cost

$
2


$
1


$
5


$
3



$
1Interest cost


3



2



8



5




1Amortization  actuarial losses










1








Curtailment/settlement losses










(2
)







Net periodic benefit cost

$
5


$
3


$
12


$
8



$
2    25




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Employer
    Contributions to Plans
    Three Months


Nine Months


May 16, 2007



April 1, 2007Ended


Ended


Through



ThroughDecember 31,


December 31,


December 31,



May 15,2008


2007


2008


2007



2007Successor


Predecessor


Successor


Successor



PredecessorFunded pension plans

$
8


$
10


$
19


$
25



$
4Unfunded pension plans


4



4



12



10




2Savings and defined contribution pension plans


4



4



13



10




2Total contributions

$
16


$
18


$
44


$
45



$
8     14.
    Currency
    (Gains) Losses    Three Months


Nine Months


May 16, 2007



April 1, 2007Ended


Ended


Through



ThroughDecember 31,


December 31,


December 31,



May 15,2008


2007


2008


2007



2007(Restated)





(Restated)Successor


Successor


Successor


Successor



PredecessorNet (gain) loss on change in fair value of currency derivative
    instruments(A)

$
50


$
23


$
11


$
5



$
(10
)Net (gain) loss on remeasurement of monetary assets and
    liabilities(B)


17



(17
)


73



(2
)



4$
67


$
6


$
84


$
3



$
(6
)     (A)
    
    Included in (Gain) loss on change in fair value of derivative
    instruments, net.(B)
    
    Included in Other (income) expenses, net. 26




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
   Accumulated other comprehensive income (loss)
  May 16,Nine Months


2007Ended


ThroughDecember 31, 2008


March 31, 2008(Restated)Successor


SuccessorCumulative currency translation adjustment at beginning of period

$
59


$
Effect of changes in exchange rates


(90
)


59Cumulative currency translation adjustment at end of period

$
(31
)

$
59   15.
    Financial
    Instruments and Commodity Contracts      Other long-term liabilities
 27




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    December 31, 2008Assets


Liabilities


Net Fair ValueCurrent


Noncurrent


Current


Noncurrent


Assets/(Liabilities)SuccessorDerivatives designated as hedging instruments:Cross-currency swaps

$



$



$
(1
)

$
(10
)

$
(11
)Interest rate swaps










(9
)


(5
)


(14
)Electricity swap










(3
)


(7
)


(10
)Total derivatives designated as hedging instruments










(13
)


(22
)


(35
)Derivatives not designated as hedging instruments:Foreign exchange forward contracts


31



2



(103
)


(26
)


(96
)Currency options










(4
)






(4
)Cross-currency swaps


16



1



(19
)


(1
)


(3
)Interest rate currency swaps


(1
)


26











25Aluminum forward contracts


134



33



(754
)


(7
)


(594
)Aluminum options






9



(71
)






(62
)Embedded derivative instruments


148







(18
)






130Heating oil swaps










(4
)






(4
)Natural gas swaps










(10
)






(10
)Total derivatives not designated as hedging instruments


328



71



(983
)


(34
)


(618
)Total derivative fair value

$
328


$
71


$
(996
)

$
(56
)

$
(653
)   28




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  March 31, 2008Assets


Liabilities


Net Fair ValueCurrent


Noncurrent


Current


Noncurrent


Assets/(Liabilities)SuccessorDerivatives designated as hedging instruments:Cross-currency swaps

$



$



$



$
(184
)

$
(184
)Interest rate swaps










(3
)


(12
)


(15
)Electricity swap


3



11











14Total derivatives designated as hedging instruments


3



11



(3
)


(196
)


(185
)Derivatives not designated as hedging instruments:Foreign exchange forward contracts


43



4



(112
)


(4
)


(69
)Cross-currency swaps


19







(4
)


(1
)


14Interest rate currency swaps


2



2











4Aluminum forward contracts


130



4



(9
)






125Aluminum options


1















1Embedded derivative instruments










(20
)






(20
)Natural gas swaps


5















5Total derivatives not designated as hedging instruments


200



10



(145
)


(5
)


60Total derivative fair value

$
203


$
21


$
(148
)

$
(201
)

$
(125
)   Net
    Investment Hedges
  Other comprehensive income
    (loss) (Gain) loss on change in fair value
    of derivative instruments, net.
  Other comprehensive income (loss)
  Three Months


Nine Months


May 16, 2007



April 1, 2007Ended


Ended


Through



ThroughDecember 31,


December 31,


December 31,



May 15,2008


2007


2008


2007



2007Successor


Successor


Successor


Successor



PredecessorCross-currency swaps

$
50


$
(5
)

$
170


$
(33
)


$
(8
)   Cash Flow
    Hedges
   29




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Other comprehensive income (loss) (Gain) loss on change in fair value of derivatives
  Other comprehensive income (loss) Interest expense and amortization of debt issuance
    costs net
  (Gain) loss on change in fair value of derivative
    instruments net Accumulated
    other comprehensive income (loss)
    Other comprehensive income (loss) (OCI), Accumulated OCI
  Three Month Comparison:
  Amount of Gain or (Loss)Amount of Gain or (Loss)


Recognized in Income onAmount of Gain or (Loss)


Reclassified from Accumulated


Derivative (Ineffective PortionRecognized in OCI on Derivative


OCI into Income


and Amount Excluded from(Effective Portion)


(Effective Portion)


Effectiveness Testing)Three Months


Three Months


Three Months


Three Months


Three Months


Three MonthsEnded


Ended


Ended


Ended


Ended


EndedDecember 31,


December 31,


December 31,


December 31,


December 31,


December 31,2008


2007


2008


2007


2008


2007Successor


Successor


Successor


Successor


Successor


SuccessorElectricity swap

$
(16
)

$
6


$
2


$
3


$
2


$
Interest rate swaps

$
(9
)

$
(2
)

$



$



$



$
   Nine
    Month Comparison:
  Amount of Gain or (Loss)Amount of Gain or (Loss)


Amount of Gain or (Loss)


Recognized in Income onRecognized in OCI on


Reclassified from Accumulated


Derivative (Ineffective PortionDerivative


OCI into Income


and Amount Excluded from(Effective Portion)


(Effective Portion)


Effectiveness Testing)Nine Months


Nine Months


Nine MonthsEnded


Ended


EndedDecember 31,


December 31,


December 31,2008


2008


2008Successor


Successor


SuccessorElectricity swap

$
(16
)

$
10


$
2Interest rate swaps

$
2


$



$
  30




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Amount of Gain or (Loss)Recognized in Income onAmount of Gain or (Loss)


DerivativeAmount of Gain or (Loss)


Reclassified from Accumulated


(Ineffective Portion and AmountRecognized in OCI on


OCI into Income (Effective


Excluded from EffectivenessDerivative (Effective Portion)


Portion)


Testing)May 16, 2007



April 1, 2007


May 16, 2007



April 1, 2007


May 16, 2007



April 1, 2007Through



Through


Through



Through


Through



ThroughDecember 31,



May 15,


December 31,



May 15,


December 31,



May 15,2007



2007


2007



2007


2007



2007Successor



Predecessor


Successor



Predecessor


Successor



PredecessorForeign exchange forward contracts

$




$
3


$




$
1


$




$
Electricity swap

$
12



$
4


$
5



$



$




$
Interest rate swaps

$
(2
)


$



$




$



$




$
   Derivative
    Instruments Not Designated as Hedges
          (Gain) loss on change in fair
    value of derivative instruments, net
 31




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    Three Months


Nine Months


May 16, 2007



April 1, 2007Ended


Ended


Through



ThroughDecember 31,


December 31,


December 31,



May 15,2008


2007


2008


2007



2007Successor


Successor


Successor


Successor



PredecessorDerivative Instruments Not Designated as HedgesForeign exchange forward contracts

$
21


$
(24
)

$
28


$
(12
)


$
11Interest rate currency swaps


(82
)


1



(58
)


(1
)



(1
)Currency options


(4
)






(4
)







Aluminum forward contracts


(415
)


(54
)


(606
)


(88
)



9Aluminum options


(47
)






(72
)


1




Embedded derivative instruments


113



16



171



28




2Heating oil swaps


(5
)






(5
)







Natural gas swaps


(7
)


(1
)


(16
)


(4
)



1Cross currency swaps


17



3



25



(3
)



(3
)Gain (loss) recognized


(409
)


(59
)


(537
)


(79
)



19Derivative Instruments Designated as Cash Flow HedgesElectricity swap


4



3



13



7




1Gain (loss) on change in fair value of derivative instruments,
    net

$
(405
)

$
(56
)

$
(524
)

$
(72
)


$
20   16.
    Fair
    Value Measurements  (Gain) loss on change in fair value of
    derivative instruments, net Accumulated other comprehensive income (loss) Accumulated other
    comprehensive income (loss)
   32




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    Level 1
  Level 2
  Level 3
    Derivative
    contracts
            Fair Value Measurements UsingLevel 1


Level 2


Level 3


TotalSuccessor:Assets  Derivative instruments

$



$
399


$



$
399Liabilities  Derivative instruments

$



$
(1,022
)

$
(30
)

$
(1,052
)    33




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  (Gain) loss on change in fair value of derivative
    instruments, net.
  Level 3DerivativeInstruments(A)Successor:Balance as of April 1, 2008

$
11Net realized/unrealized (losses) included in earnings(B)


(3
)Net realized/unrealized (losses) included in Other
    Comprehensive Income (Loss)(C)


(36
)Net purchases, issuances and settlements


(3
)Net transfers in and/or (out) of Level 3


1Balance as of December 31, 2008

$
(30
)     (A)
    
    Represents derivative assets net of derivative liabilities.(B)
    
    Included in (Gain) loss on change in fair value of derivative
    instruments, net.(C)
    
    Included in Change in fair value of effective portion of
    hedges, net.  17.
    Other
    (Income) Expenses, net    Three Months


Nine Months


May 16, 2007



April 1, 2007Ended


Ended


Through



ThroughDecember 31,


December 31,


December 31,



May 15,2008


2007


2008


2007



2007(Restated)





(Restated)Successor





SuccessorSuccessor





Successor






PredecessorExchange (gains) losses, net

$
17


$
(17
)

$
73


$
(2
)


$
4Gain on reversal of accrued legal claim(A)










(26
)







Gain on partial reversal of accrued social contribution tax














(14
)



Other, net


3







6



7




(1
)Other (income) expenses, net

$
20


$
(17
)

$
53


$
(9
)


$
3     (A)
    
    On September 4, 2008, Novelis, our insurers, and Alcan
    entered into a settlement agreement to resolve the insurance
    coverage dispute related to the Reynolds boat case. Pursuant to
    that settlement agreement, we paid approximately
    $13 million to our insurers on September 8, 2008 and
    recognized a non-cash pre-tax gain of $26 million upon the
    reversal of our previously recorded $39 million liability.
    Our insurers returned our letter of credit that had been on
    deposit pending the outcome of settlement discussions.  18.
    Income
    Taxes  Income tax provision (benefit) Income tax provision
    (benefit)
 34




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
      Three Months


Nine Months


May 16, 2007



April 1, 2007Ended


Ended


Through



ThroughDecember 31,


December 31,


December 31,



May 15,2008


2007


2008


2007



2007(Restated)





(Restated)Successor


Successor


Successor


Successor



PredecessorPre-tax loss before equity in net (income) loss of
    non-consolidated affiliates and minority interests share

$
(1,862
)

$
(44
)

$
(2,072
)

$
(82
)


$
(95
)Canadian statutory tax rate


31
%


33
%


31
%


33
%



33
%Provision (benefit) at the Canadian statutory rate


(577
)


(15
)


(642
)


(27
)



(31
)Increase (decrease) for taxes on income (loss) resulting from:Non-deductible goodwill impairment


415







415








Exchange translation items


(64
)


12



(77
)


61




23Exchange remeasurement of deferred income taxes


(30
)


18



(51
)


25




3Change in valuation allowances


23



14



41



54




13Expense (income) items not subject to tax


22







28



(19
)



(9
)Enacted statutory tax rate changes


1



(17
)


3



(42
)



Tax rate differences on foreign earnings


11



11



(57
)


11




2Uncertain tax positions


1







2








Other, net


(1
)


3



5



10




3Income tax provision (benefit)

$
(199
)

$
26


$
(333
)

$
73



$
4Effective tax rate


11
%


(59
)%


16
%


(89
)%



(4
)%      35




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    Tax
    Uncertainties
  Adoption
    of FASB Interpretation No. 48
  Accounting for Uncertainty in Income Taxes
    2004-2007.
  1999-2003. Goodwill
  ther long-term assets  third parties
     36




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  19.
    Commitments
    and Contingencies  Primary
    Supplier
    Three Months


Nine Months


May 16, 2007



April 1, 2007Ended


Ended


Through



ThroughDecember 31,


December 31,


December 31,



May 15,2008


2007


2008


2007



2007Successor


Successor


Successor


Successor



PredecessorPurchases from Alcan as a percentage of total metal purchases in
    kt(A)


40
%


33
%


36
%


35
%



34
%     (A)
    
    One kilotonne (kt) is 1,000 metric tonnes. One metric tonne is
    equivalent to 2,204.6 pounds.  Legal
    Proceedings
  Coca-Cola
    Lawsuits. Coca-Cola Coca-Cola Coca-Cola
  ARCO Aluminum Complaint.
       37




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    Environmental
    Matters
      clean-up Other
    long-term liabilities Accrued expenses and other current liabilities
    Butler Tunnel Site.
 38




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
      Brazil
    Tax Matters
  Other long-term assets  third parties Other long-term liabilities
    Guarantees
    of Indebtedness
       39




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    Maximum


LiabilityPotential


CarryingType of Entity

Future Payment


ValueWholly-owned subsidiaries

$
51


$
25Aluminium Norf GmbH

$
14


$
     20.
    Segment
    and Major Customer Information  Segment
    Information
    
    North America.  Headquartered in Cleveland,
    Ohio, this segment manufactures aluminum sheet and light gauge
    products and operates 11 plants, including two fully dedicated
    recycling facilities, in two countries.
    Europe.  Headquartered in Zurich, Switzerland,
    this segment manufactures aluminum sheet and light gauge
    products and operates 14 plants, including one recycling
    facility, in six countries.
    Asia.  Headquartered in Seoul, South Korea,
    this segment manufactures aluminum sheet and light gauge
    products and operates three plants in two countries.
    South America.  Headquartered in Sao Paulo,
    Brazil, this segment comprises bauxite mining, alumina refining,
    smelting operations, power generation, carbon products, aluminum
    sheet and light gauge products and operates four plants in
    Brazil.  Adjustment to Eliminate Proportional
    Consolidation.
   40




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Selected
    Segment Financial Information
  Adjustment toEliminateNorth








South


Proportional


CorporateTotal Assets

America


Europe


Asia


America


Consolidation


and Other


Total(Successor)December 31, 2008

$
3,156


$
3,135


$
934


$
1,289


$
(194
)

$
51


$
8,371March 31, 2008 (Restated)

$
3,957


$
4,355


$
1,080


$
1,485


$
(199
)

$
59


$
10,737   Comparison
    of Three Month Data:
  Adjustment toEliminateSelected Operating Results

North








South


Proportional


CorporateThree Months Ended December 31, 2008

America


Europe


Asia


America


Consolidation


and Other


Total(Successor)Net sales (to third parties)

$
898


$
729


$
344


$
205


$



$



$
2,176Intersegment sales






4















(4
)


Segment income


1



48



55



34











138Depreciation and amortization


41



54



12



17



(18
)


1



107Capital expenditures


13



21



5



6



(8
)






37   Adjustment toEliminateSelected Operating Results

North








South


Proportional


CorporateThree Months Ended December 31, 2007

America


Europe


Asia


America


Consolidation


and Other


Total(Successor)Net sales (to third parties)

$
995


$
1,010


$
483


$
247


$



$



$
2,735Intersegment sales


5



1



3











(9
)


Segment income (Restated)


82



44



11



34











171Depreciation and amortization (Restated)


37



58



13



22



(23
)


1



108Capital expenditures


13



35



11



8



(5
)


1



63   Comparison
    of Nine Month Data:
  Adjustment toEliminateSelected Operating Results

North








South


Proportional


CorporateNine Months Ended December 31, 2008

America


Europe


Asia


America


Consolidation


and Other


Total(Successor)Net sales (to third parties)

$
3,090


$
3,039


$
1,311


$
800


$
(2
)

$



$
8,238Intersegment sales


2



9



1











(12
)


Segment income


45



221



83



129











478Depreciation and amortization


124



171



40



53



(60
)


2



330Capital expenditures


30



57



16



21



(18
)


1



107   41




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Adjustment toEliminateSelected Operating Results

North








South


Proportional


CorporateMay 16, 2007 Through December 31, 2007

America


Europe


Asia


America


Consolidation


and Other


Total(Successor)Net sales (to third parties)

$
2,619


$
2,695


$
1,167


$
622


$



$



$
7,103Intersegment sales


8



2



10



27







(47
)


Segment income (Restated)


194



155



27



102











478Depreciation and amortization (Restated)


98



130



37



44



(46
)


1



264Capital expenditures


26



63



21



18



(11
)


3



120      Adjustment toEliminateSelected Operating Results

North








South


Proportional


CorporateApril 1, 2007 Through May 15, 2007

America


Europe


Asia


America


Consolidation


and Other


Total(Predecessor)Net sales (to third parties)

$
446


$
510


$
216


$
109


$



$



$
1,281Intersegment sales










1



7







(8
)


Segment income (loss)


(24
)


32



6



18











32Depreciation and amortization


7



11



7



5



(3
)


1



28Capital expenditures


4



8



4



3



(3
)


1



17  42




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    Three Months


Nine Months


May 16, 2007



April 1, 2007Ended


Ended


Through



ThroughDecember 31,


December 31,


December 31,



May 15,2008


2007


2008


2007



2007(Restated)





(Restated)Successor


Predecessor


Successor


Successor



PredecessorTotal Segment income

$
138


$
171


$
478


$
478



$
32Interest expense and amortization of debt issuance costs, net


(44
)


(47
)


(125
)


(128
)



(26
)Unrealized gains (losses) on change in fair value of derivative
    instruments, net(A)


(472
)


(24
)


(672
)


(126
)



5Realized gains (losses) on corporate derivative instruments, net


4



2



4



40




(3
)Depreciation and amortization


(107
)


(108
)


(330
)


(264
)



(28
)Impairment of goodwill


(1,340
)






(1,340
)







Impairment charges on long-lived assets










(1
)







Minority interests share


9







7



2




1Adjustment to eliminate proportional consolidation(B)


(174
)


(15
)


(210
)


(17
)



(7
)Restructuring (charges) recoveries, net


(15
)


(1
)


(14
)


(2
)



(1
)Gain (loss) on sales of property, plant and equipment and
    businesses, net


(1
)






1








Corporate selling, general and administrative expenses


(12
)


(18
)


(42
)


(42
)



(35
)Other costs, net(C)


(5
)


(7
)


13



(5
)



1Sale transaction fees



















(32
)Income tax (provision) benefit


199



(26
)


333



(73
)



(4
)Net loss

$
(1,820
)

$
(73
)

$
(1,898
)

$
(137
)


$
(97
)     (A)
    
    Unrealized gains (losses) on change in fair value of derivative
    instruments, net represents the portion of gains (losses) that
    were not settled in cash during the period. Total realized and
    unrealized gains (losses) are shown in the table below and are
    included in the aggregate each period in (Gain) loss on
    change in fair value of derivative instruments, neton our
    condensed consolidated statements of operations.(B)
    
    Our financial information for our segments (including Segment
    income) includes the results of our non-consolidated affiliates
    on a proportionately consolidated basis, which is consistent
    with the way we manage our business segments. However, under
    GAAP, these non-consolidated affiliates are accounted for using
    the equity method of accounting. Therefore, in order to
    reconcile Total Segment income to Net income (loss), the
    proportional Segment income of these non-consolidated affiliates
    is removed from Total Segment income, net of our share of their
    net after-tax results, which is reported as Equity in net
    (income) loss of non-consolidated affiliateson our
    condensed consolidated statements of operations. See
    Note 9  Investment in and Advances to
    Non-Consolidated Affiliates and Related Party Transactions for
    further information about these non-consolidated affiliates.(C)
    
    Other costs, net includes a $26 million gain on the
    reversal of a legal accrual for the Reynolds Boat Case during
    the nine months ended December 31, 2008. See
    Note 17  Other (Income) Expenses, net.  43




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Three Months


Nine Months


May 16, 2007



April 1, 2007Ended


Ended


Through



ThroughDecember 31,


December 31,


December 31,



May 15,2008


2007


2008


2007



2007(Restated)





(Restated)Successor


Successor


Successor


Successor



Predecessor(Gains) losses on change in fair value of derivative
    instruments, net:Realized (gains) losses included in Segment income

$
(63
)

$
34


$
(144
)

$
(14
)


$
(18
)Realized (gains) losses on corporate derivative instruments


(4
)


(2
)


(4
)


(40
)



3Unrealized losses


472



24



672



126




(5
)(Gains) losses on change in fair value of derivative
    instruments, net

$
405


$
56


$
524


$
72



$
(20
)   Information
    about Major Customers
  Net sales
  Three Months


Nine Months


May 16, 2007



April 1, 2007Ended


Ended


Through



ThroughDecember 31,


December 31,


December 31,



May 15,2008


2007


2008


2007



2007Successor


Successor


Successor


Successor



PredecessorNet sales to Rexam as a percentage of total net sales


16.7
%


15.6
%


16.4
%


14.7
%



13.5
%   21.
    Supplemental
    Guarantor Information   44




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    Novelis
    Inc.
  Condensed
    Consolidating Statement of Operations
 (In
    millions)
  Three Months Ended December 31, 2008(Successor)Non-Parent


Guarantors


Guarantors


Eliminations


ConsolidatedNet sales

$
254


$
1,751


$
601


$
(430
)

$
2,176Cost of goods sold (exclusive of depreciation and amortization
    shown below)


252



1,648



553



(430
)


2,023Selling, general and administrative expenses


(8
)


66



15







73Depreciation and amortization


6



80



21







107Research and development expenses


8



2



1







11Interest expense and amortization of debt issuance costs, net


9



31



4







44(Gain) loss on change in fair value of derivative instruments,
    net


1



355



49







405Impairment of goodwill






1,340











1,340Restructuring charges, net


5



9



1







15Equity in net (income) loss of affiliates


1,811



166







(1,811
)


166Other (income) expenses, net


11



(17
)


26







202,095



3,680



670



(2,241
)


4,204Income (loss) before income taxes and minority interests
    share


(1,841
)


(1,929
)


(69
)


1,811



(2,028
)Income tax provision (benefit)


(21
)


(170
)


(8
)






(199
)Income (loss) before minority interests share


(1,820
)


(1,759
)


(61
)


1,811



(1,829
)Minority interests share










9







9Net income (loss)

$
(1,820
)

$
(1,759
)

$
(52
)

$
1,811


$
(1,820
)  45




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Novelis
    Inc.
  Condensed
    Consolidating Statement of Operations
 (In
    millions)
  Three Months Ended December 31, 2007(Successor)Non-Restated

Parent


Guarantors


Guarantors


Eliminations


ConsolidatedNet sales

$
334


$
2,211


$
783


$
(593
)

$
2,735Cost of goods sold (exclusive of depreciation and amortization
    shown below)


337



1,993



737



(593
)


2,474Selling, general and administrative expenses


20



61



18







99Depreciation and amortization


6



93



9







108Research and development expenses


9



6



(4
)






11Interest expense and amortization of debt issuance costs, net


8



32



7







47(Gain) loss on change in fair value of derivative instruments,
    net


(8
)


56



8







56Restructuring charges, net






1











1Equity in net (income) loss of affiliates


46



3







(46
)


3Other (income) expenses, net


(12
)


(15
)


10







(17
)406



2,230



785



(639
)


2,782Income (loss) before income taxes and minority interests
    share


(72
)


(19
)


(2
)


46



(47
)Income tax provision (benefit)


1



24



1







26Income (loss) before minority interests share


(73
)


(43
)


(3
)


46



(73
)Minority interests share


















Net income (loss)

$
(73
)

$
(43
)

$
(3
)

$
46


$
(73
)  46




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Novelis
    Inc.
  Condensed
    Consolidating Statement of Operations
 (In
    millions)
  Nine Months Ended December 31, 2008(Successor)Non-Parent


Guarantors


Guarantors


Eliminations


ConsolidatedNet sales

$
1,038


$
6,815


$
2,204


$
(1,819
)

$
8,238Cost of goods sold (exclusive of depreciation and amortization
    shown below)


1,023



6,389



2,052



(1,819
)


7,645Selling, general and administrative expenses


(2
)


190



58







246Depreciation and amortization


18



246



66







330Research and development expenses


23



8



2







33Interest expense and amortization of debt issuance costs, net


23



91



11







125(Gain) loss on change in fair value of derivative instruments,
    net


4



490



30







524Impairment of goodwill






1,340











1,340Restructuring charges, net


5



8



1







14Equity in net (income) loss of affiliates


1,860



166







(1,860
)


166Other (income) expenses, net


1



(25
)


77







532,955



8,903



2,297



(3,679
)


10,476Income (loss) before income taxes and minority interests
    share


(1,917
)


(2,088
)


(93
)


1,860



(2,238
)Income tax provision (benefit)


(19
)


(302
)


(12
)






(333
)Income (loss) before minority interests share


(1,898
)


(1,786
)


(81
)


1,860



(1,905
)Minority interests share










7







7Net income (loss)

$
(1,898
)

$
(1,786
)

$
(74
)

$
1,860


$
(1,898
)  47




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Novelis
    Inc.
  Condensed
    Consolidating Statement of Operations
 (In
    millions)
  May 16, 2007 Through December 31, 2007(Successor)Non-Restated

Parent


Guarantors


Guarantors


Eliminations


ConsolidatedNet sales

$
948


$
5,898


$
1,938


$
(1,681
)

$
7,103Cost of goods sold (exclusive of depreciation and amortization
    shown below)


949



5,361



1,836



(1,681
)


6,465Selling, general and administrative expenses


33



148



48







229Depreciation and amortization


14



206



44







264Research and development expenses


18



15



1







34Interest expense and amortization of debt issuance costs, net


26



87



15







128(Gain) loss on change in fair value of derivative instruments,
    net


(20
)


73



19







72Restructuring charges, net






2











2Equity in net (income) loss of affiliates


62



(16
)






(62
)


(16
)Other (income) expenses, net


(24
)


5



10







(9
)1,058



5,881



1,973



(1,743
)


7,169Income (loss) before income taxes and minority interests
    share


(110
)


17



(35
)


62



(66
)Income tax provision (benefit)


27



44



2







73Income (loss) before minority interests share


(137
)


(27
)


(37
)


62



(139
)Minority interests share










2







2Net income (loss)

$
(137
)

$
(27
)

$
(35
)

$
62


$
(137
)  48




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Novelis
    Inc.
  Condensed
    Consolidating Statement of Operations
 (In
    millions)
  April 1, 2007 Through May 15, 2007(Predecessor)Non-Parent


Guarantors


Guarantors


Eliminations


ConsolidatedNet sales

$
129


$
1,020


$
359


$
(227
)

$
1,281Cost of goods sold (exclusive of depreciation and amortization
    shown below)


131



961



340



(227
)


1,205Selling, general and administrative expenses


29



51



15







95Depreciation and amortization


2



18



8







28Research and development expenses


5



1











6Interest expense and amortization of debt issuance costs, net


3



20



3







26(Gain) loss on change in fair value of derivative instruments,
    net


(2
)


(19
)


1







(20
)Restructuring charges, net






1











1Equity in net (income) loss of non-affiliates


29



(1
)






(29
)


(1
)Sale transaction fees


32















32Other (income) expenses, net


(3
)


8



(2
)






3226



1,040



365



(256
)


1,375Income (loss) before income taxes and minority interests
    share


(97
)


(20
)


(6
)


29



(94
)Income tax provision (benefit)






3



1







4Income (loss) before minority interests share


(97
)


(23
)


(7
)


29



(98
)Minority interests share










1







1Net income (loss)

$
(97
)

$
(23
)

$
(6
)

$
29


$
(97
)  49




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Novelis
    Inc.
  Condensed
    Consolidating Balance Sheet
 (In
    millions)
  December 31, 2008(Successor)Non-Parent


Guarantors


Guarantors


Eliminations


ConsolidatedASSETSCurrent assetsCash and cash equivalents

$
3


$
90


$
83


$



$
176Accounts receivable, net of allowances third parties


21



709



339







1,069 related parties


600



193



31



(802
)


22Inventories


44



762



364







1,170Prepaid expenses and other current assets


5



54



14







73Current portion of fair value of derivative instruments






327



42



(41
)


328Deferred income tax assets






253



21







274Total current assets


673



2,388



894



(843
)


3,112Property, plant and equipment, net


167



2,222



531







2,920Goodwill






578



6







584Intangible assets, net






816











816Investments


1,599



751



1



(1,599
)


752Fair value of derivative instruments, net of current portion






49



25



(3
)


71Deferred income tax assets


2







2







4Other long-term assets


1,067



82



7



(1,044
)


112Total assets

$
3,508


$
6,886


$
1,466


$
(3,489
)

$
8,371LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilitiesCurrent portion of long-term debt

$
3


$
11


$
8


$



$
22Short-term borrowings third parties






235



57







292 related parties


9



531



17



(557
)


Accounts payable third parties


40



526



404







970 related parties


45



143



106



(243
)


51Current portion of fair value of derivative instruments


5



879



153



(41
)


996Accrued expenses and other current liabilities


71



438



91



(3
)


597Deferred income tax liabilities


















Total current liabilities


173



2,763



836



(844
)


2,928Long-term debt, net of current portion third parties


1,752



687



101







2,540 related parties






1,014



30



(1,044
)


Deferred income tax liabilities






514



6







520Accrued postretirement benefits


21



288



123







432Other long-term liabilities


52



267



19



(3
)


3351,998



5,533



1,115



(1,891
)


6,755Commitments and contingenciesMinority interests in equity of consolidated affiliates










106







106Shareholders equityCommon stock


















Additional paid-in capital


3,497















3,497Retained earnings/(accumulated deficit)/owners net
    investment


(1,918
)


1,407



343



(1,750
)


(1,918
)Accumulated other comprehensive income (loss)


(69
)


(54
)


(98
)


152



(69
)Total shareholders equity


1,510



1,353



245



(1,598
)


1,510Total liabilities and shareholders equity

$
3,508


$
6,886


$
1,466


$
(3,489
)

$
8,371  50




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Novelis
    Inc.
  Condensed
    Consolidating Balance Sheet
 (In
    millions)
  March 31, 2008(Successor)Non-Restated

Parent


Guarantors


Guarantors


Eliminations


ConsolidatedASSETSCurrent assetsCash and cash equivalents

$
12


$
177


$
137


$



$
326Accounts receivable, net of allowances third parties


38



819



391







1,248 related parties


519



288



34



(810
)


31Inventories


58



992



405







1,455Prepaid expenses and other current assets


4



34



20







58Current portion of fair value of derivative instruments






187



29



(13
)


203Deferred income tax assets






121



4







125Total current assets


631



2,618



1,020



(823
)


3,446Property, plant and equipment, net


178



2,455



724







3,357Goodwill






1,741



189







1,930Intangible assets, net






888











888Investments


3,629



945



1



(3,629
)


946Fair value of derivative instruments, net of current portion






18



3







21Deferred income tax assets


4







2







6Other long-term assets


1,329



159



135



(1,480
)


143Total assets

$
5,771


$
8,824


$
2,074


$
(5,932
)

$
10,737LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilitiesCurrent portion of long-term debt

$
3


$
11


$
1


$



$
15Short-term borrowings third parties






70



45







115 related parties


5



370



25



(400
)


Accounts payable third parties


84



925



573







1,582 related parties


109



234



88



(376
)


55Current portion of fair value of derivative instruments






146



15



(13
)


148Accrued expenses and other current liabilities


40



555



113



(4
)


704Deferred income tax liabilities






39











39Total current liabilities


241



2,350



860



(793
)


2,658Long-term debt, net of current portion third parties


1,761



698



101







2,560 related parties






1,206



304



(1,510
)


Deferred income tax liabilities


1



733



20







754Accrued postretirement benefits


23



297



101







421Other long-term liabilities


222



431



19







6722,248



5,715



1,405



(2,303
)


7,065Commitments and contingenciesMinority interests in equity of consolidated affiliates










149







149Shareholders equityCommon stock


















Additional paid-in capital


3,497















3,497Retained earnings/(accumulated deficit)/owners net
    investment


(20
)


3,075



564



(3,639
)


(20
)Accumulated other comprehensive income (loss)


46



34



(44
)


10



46Total shareholders equity


3,523



3,109



520



(3,629
)


3,523Total liabilities and shareholders equity

$
5,771


$
8,824


$
2,074


$
(5,932
)

$
10,737  51




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Novelis
    Inc.
  Condensed
    Consolidating Statement of Cash Flows
 (In
    millions)
  Nine Months Ended December 31, 2008(Successor)Non-Parent


Guarantors


Guarantors


Eliminations


ConsolidatedOPERATING ACTIVITIESNet cash provided by (used in) operating activities

$
(12
)

$
(408
)

$
146


$
(160
)

$
(434
)INVESTING ACTIVITIESCapital expenditures


(5
)


(74
)


(28
)






(107
)Proceeds from sales of property, plant and equipment


2



1



1







4Changes to investment in and advances to non-consolidated
    affiliates






17











17Proceeds from loans receivable, net  related parties






18











18Net proceeds from settlement of derivative instruments


4



104



72







180Net cash provided by (used in) investing activities


1



66



45







112FINANCING ACTIVITIESProceeds from issuance of new debt










8







8Principal repayments third parties


(2
)


(8
)


(1
)






(11
) related parties






(89
)


(243
)


332



Short-term borrowings, net third parties






180



13







193 related parties


4



174



(6
)


(172
)


Dividends  minority interests










(5
)






(5
)Net cash provided by (used in) financing activities


2



257



(234
)


160



185Net increase (decrease) in cash and cash equivalents


(9
)


(85
)


(43
)






(137
)Effect of exchange rate changes on cash balances held in
    foreign currencies






(2
)


(11
)






(13
)Cash and cash equivalents at beginning of period


12



177



137







326Cash and cash equivalents at end of period

$
3


$
90


$
83


$



$
176  52




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Novelis
    Inc.
  Condensed
    Consolidating Statement of Cash Flows
 (In
    millions)
  May 16, 2007 Through December 31, 2007(Successor)Non-Restated

Parent


Guarantors


Guarantors


Eliminations


ConsolidatedOPERATING ACTIVITIESNet cash provided by (used in) operating activities

$
200


$
(144
)

$
(27
)

$



$
29INVESTING ACTIVITIESCapital expenditures


(6
)


(90
)


(24
)






(120
)Proceeds from sales of assets






3



1







4Changes to investment in and advances to non-consolidated
    affiliates


(40
)


5







40



5Proceeds from loans receivable, net  related parties






12











12Net proceeds from settlement of derivative instruments


13



26



17







56Net cash provided by (used in) investing activities


(33
)


(44
)


(6
)


40



(43
)FINANCING ACTIVITIESProceeds from issuance of common stock


92



40







(40
)


92Proceeds from issuance of debt


300



660



140







1,100Principal repayments


(263
)


(602
)


(140
)






(1,005
)Short-term borrowings, net third parties


(37
)


(84
)


18







(103
) related parties


(227
)


195



32







Dividends  minority interests










(1
)






(1
)Debt issuance costs


(37
)














(37
)Net cash provided by (used in) financing activities


(172
)


209



49



(40
)


46Net increase in cash and cash equivalents


(5
)


21



16







32Effect of exchange rate changes on cash balances held in
    foreign currencies










(3
)






(3
)Cash and cash equivalents at beginning of period

$
8


$
74


$
20


$



$
102Cash and cash equivalents at end of period

$
3


$
95


$
33


$



$
131  53




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Novelis
    Inc.
  Condensed
    Consolidating Statement of Cash Flows
 (In
    millions)
  April 1, 2007 Through May 15, 2007(Predecessor)Non-Parent


Guarantors


Guarantors


Eliminations


ConsolidatedOPERATING ACTIVITIESNet cash provided by (used in) operating activities

$
(21
)

$
(181
)

$
(28
)

$



$
(230
)INVESTING ACTIVITIESCapital expenditures


(1
)


(10
)


(6
)






(17
)Changes to investment in and advances to non-consolidated
    affiliates






1











1Net proceeds from settlement of derivative instruments


(5
)


23











18Net cash provided by (used in) investing activities


(6
)


14



(6
)






2FINANCING ACTIVITIESProceeds from issuance of debt






150











150Principal repayments






(1
)










(1
)Short-term borrowings, net third parties


45



9



6







60 related parties


(15
)


11



4







Dividends  minority interests










(7
)






(7
)Debt issuance costs


(2
)














(2
)Proceeds from the exercise of stock options


1















1Net cash provided by (used in) financing activities


29



169



3







201Net increase (decrease) in cash and cash equivalents


2



2



(31
)






(27
)Effect of exchange rate changes on cash balances held in
    foreign currencies






1











1Cash and cash equivalents at beginning of period


6



71



51







128Cash and cash equivalents at end of period

$
8


$
74


$
20


$



$
102  54




---



##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  FORWARD
    LOOKING STATEMENTS
  The following information should be read together with our
    unaudited condensed consolidated financial statements and
    accompanying notes included elsewhere in this quarterly report
    for a more complete understanding of our financial condition and
    results of operations. The following discussion contains
    forward-looking statements that reflect our plans, estimates and
    beliefs. Our actual results could differ materially from those
    discussed in these forward-looking statements. Factors that
    could cause or contribute to these differences include, but are
    not limited to, those discussed below, particularly in
    SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND
    MARKET DATA.
  OVERVIEW
    AND REFERENCES
      Form 10-K/A Form 10-K/A
  BASIS OF
    PRESENTATION
    Acquisition
    of Novelis Common Stock
    Push Down Basis of Accounting Required in Certain Limited
    Circumstances Business Combinations
 55




---



##### Table of Contents



Combined
    Financial Results of the Predecessor and
    Successor
  Form 10-Q,
    May 16, 2007



April 1, 2007


Nine MonthsThrough



Through


EndedDecember 31, 2007



May 15, 2007


December 31, 2007Successor



Predecessor


CombinedShipments (kt)(A):Rolled products(B)


1,886




348



2,234Ingot products(C)


107




15



122Total shipments


1,993




363



2,356     (A)
    
    One kilotonne (kt) is 1,000 metric tonnes. One metric tonne is
    equivalent to 2,204.6 pounds.(B)
    
    Rolled products include tolling (the conversion of
    customer-owned metal).(C)
    
    Ingot products include primary ingot in Brazil, foundry products
    in Korea and Europe, secondary ingot in Europe and other
    miscellaneous recyclable aluminum.  56




---



##### Table of Contents



May 16, 2007



April 1, 2007


Nine MonthsThrough



Through


EndedDecember 31, 2007



May 15, 2007


December 31, 2007(Restated)Successor



Predecessor


CombinedResults of Operations (in millions)Net sales

$
7,103



$
1,281


$
8,384Cost of goods sold (exclusive of depreciation and amortization
    shown below)


6,465




1,205



7,670Selling, general and administrative expenses


229




95



324Depreciation and amortization


264




28



292Research and development expenses


34




6



40Interest expense and amortization of debt issuance cost, net


128




26



154(Gain) loss on change in fair value of derivative instruments,
    net


72




(20
)


52Restructuring charges, net


2




1



3Equity in net (income) loss of non-consolidated affiliates


(16
)



(1
)


(17
)Sale transaction fees







32



32Other (income) expenses, net


(9
)



3



(6
)7,169




1,375



8,544Income (loss) before provision for taxes on income (loss) and
    minority interests share


(66
)



(94
)


(160
)Income tax provision


73




4



77Loss before minority interests share


(139
)



(98
)


(237
)Minority interests share


2




1



3Net loss

$
(137
)


$
(97
)

$
(234
)   Restatement
  
  HIGHLIGHTS
    
    We reported a net loss of $1.8 billion for the third
    quarter of fiscal year 2009, which includes non-cash impairment
    charges of $1.5 billion and unrealized losses on
    derivatives instruments of $472 million, compared to a loss
    of $73 million for the corresponding period in fiscal 2008.
    For the nine months 57




---



##### Table of Contents



ended December 31, 2008, our net loss was
    $1.9 billion, as compared to $234 million in the
    comparative period for fiscal 2008.  
    Shipments of flat rolled products decreased 13% in the current
    quarter to 633 kilotonnes (kt) from 730 kt in the prior
    year period. Shipments to automotive, construction and
    industrial companies were significantly impacted by the economic
    downturn in those industries, while can sheet shipments were
    down at the end of the current quarter due to efforts by can
    manufacturers to reduce inventory levels. We expect demand for
    can sheet shipments to return to historical levels in the
    short-term.
    Inventory levels were effectively managed despite slowing
    business conditions.
    The current quarter includes non-cash asset impairment charges
    totaling $1.5 billion which reflects the recent
    deterioration in the global economic environment and the related
    market increase in the cost of capital.
    The current quarter also includes a $472 million non-cash
    unrealized loss on derivative instruments, compared to a
    $24 million loss in the prior year period. As these
    derivative instruments are used to hedge forecasted purchases of
    aluminum and other commodities and related foreign currency
    exposures, this loss primarily reflects the recent unprecedented
    drop in the price of aluminum from $3,292 per tonne in
    July 2008 to $1,455 per tonne at December 31, 2008.
    With the exception of losses associated with metal prices
    ceilings, we expect an offsetting benefit once the related sales
    volumes have been shipped.
    The decrease in sales volumes relating to the deterioration of
    global economic conditions and the effect of rapidly declining
    LME prices on future derivative settlements and the timing of
    working capital return have negatively impacted our short-term
    liquidity position.  BUSINESS
    AND INDUSTRY CLIMATE
      
    We continued to aggressively reduce overhead cost. We initiated
    a variety of cost reductions and cash preservation actions whose
    impact will largely be felt in the coming months.
    We reduced labor costs in the third fiscal quarter through
    extended holiday shutdowns, elimination of overtime, reduced use
    of contractors and reduced shifts on some equipment. We also
    implemented a salary freeze and a hiring freeze for all but the
    most critical positions.
    We began discussions with labor representatives in North
    America, Europe and Asia to negotiate extraordinary cost
    reduction strategies, including changed work rules, realignment
    of capacity and potential staff reductions.
    We are in the process of reducing our global headcount in excess
    of 10%.
    We have instituted radical reductions in capital spending with a
    focus on preserving maintenance and safety.
    We sought decreased pricing from suppliers of commodity goods
    and services whose prices are dropping due to global demand
    conditions. 58




---



##### Table of Contents



Three Months





Nine MonthsEnded





EndedDecember 31,


Percent


December 31,


Percent2008


2007


Change


2008


2007


ChangeLondon Metal Exchange PricesAluminum (per metric tonne, and presented in U.S. dollars):Closing cash price as of end of period

$
1,455


$
2,360



(38.3
)%

$
1,455


$
2,360



(38.3
)%Average cash price during the period

$
1,830


$
2,444



(25.1
)%

$
2,520


$
2,584



(2.5
)%           
    As described above, our products have a price structure based
    upon the LME price. Decreases in the LME price impact both our
    net sales and cost of goods sold.
    Due to the fact that we do not currently apply hedge accounting
    on our metal derivative instruments, the change in the fair
    value of these derivative instruments is marked to market and
    recorded as an unrealized loss in our statement of operations in
    the current period. Conversely, the offsetting benefit from
    lower metal costs will not be recognized until the related sales
    volume has been shipped.
    The sudden decline in the LME prices required an evaluation of
    the net realizable value of our aluminum inventory, resulting in
    an inventory valuation charge of $34 million and
    $38 million for the three and nine months ended
    December 31, 2008, respectively. This charge is included as
    a component of metal price lag in Segment income discussed below.
    The effect of rapidly declining LME prices on future derivative
    settlements has negatively impacted our short-term liquidity
    position as our settlements with brokers can occur prior to our
    customers payment to us.  Metal
    Price Ceilings
   59




---



##### Table of Contents




    We maximize the amount of our internally supplied metal inputs
    from our smelting, refining and mining operations in Brazil and
    rely on output from our recycling operations which utilize used
    beverage cans (UBCs). Both of these sources of aluminum supply
    have historically provided an offsetting benefit to the metal
    price ceiling contracts. We refer to these two sources as
    internal hedges.
    We entered into derivative instruments to hedge projected
    aluminum volume requirements above our assumed internal hedge
    position mitigating our exposure to further increases in LME. As
    a result of these instruments, we will continue to incur cash
    losses related to these contracts even if LME remains below the
    ceiling price. As of December 31, 2008 the fair value of
    the liability associated with these derivative instruments was
    $151 million.    Metal
    Price Lag
     60




---



##### Table of Contents



Foreign
    Exchange Impact
    Three Months Ended


U.S. Dollar


Nine Month Ended


U.S. DollarDecember 31,


Strengthen/


December 31,


Strengthen/2008


2007


(Weaken)


2008


2007


(Weaken)U.S. dollar per Euro


1.310



1.459



10.2
%


1.450



1.400



(3.5
)%Brazilian real per U.S. dollar


2.248



1.766



27.2



1.865



1.873



(0.4
)South Korean won per U.S. dollar


1,336



920



45.2



1,155



924



25.0Canadian dollar per U.S. dollar


1.225



0.979



25.1



1.094



1.033



5.9     RESULTS
    OF OPERATIONS
  Three
    Months Ended December 31, 2008 Compared With the Three
    Months Ended December 31, 2007
      Goodwill and Other Intangible
    Assets
     61




---



##### Table of Contents



Segment
    Review
          Selected Operating Results

North








SouthThree Months Ended December 31, 2008

America


Europe


Asia


America


Eliminations


Total(Successor)Net sales

$
898


$
733


$
344


$
205


$
(4
)

$
2,176Shipments (kt)Rolled products


243



197



106



87







633Ingot products


8



13



1



4







26Total shipments


251



210



107



91







659   North








SouthThree Months Ended December 31, 2007

America


Europe


Asia


America


Eliminations


Total(Successor)Net sales

$
1,000


$
1,011


$
486


$
247


$
(9
)

$
2,735Shipments (kt)Rolled products


269



244



134



83







730Ingot products


14



13



9



6







42Total shipments


283



257



143



89







772  62




---



##### Table of Contents



North








SouthChanges in Segment income

America


Europe


Asia


America


TotalSegment income  three months ended December 31,
    2007

$
82


$
44


$
11


$
34


$
171Volume:Rolled products


(20
)


(44
)


(15
)


1



(78
)Other






(1
)


(2
)






(3
)Conversion premium and product mix


(2
)


18



7



(13
)


10Conversion costs(A)


(12
)


2



(4
)


(11
)


(25
)Metal price lag


(34
)


13



42



10



31Foreign exchange


(12
)


12



29



23



52Other changes(B)


(1
)


4



(13
)


(10
)


(20
)Segment income  three months ended December 31,
    2008

$
1


$
48


$
55


$
34


$
138     (A)
    
    Conversion costs include expenses incurred in production such as
    direct and indirect labor, energy, freight, scrap usage, alloys
    and hardeners, coatings, alumina and melt loss. Fluctuations in
    this component reflect cost efficiencies during the period as
    well as cost inflation (deflation).(B)
    
    Other changes include selling, general &
    administrative costs and research & development for
    all segments and certain other items which impact one or more
    regions, including such items as the impact of purchase
    accounting and can price ceilings. Significant fluctuations in
    these items are discussed below.  North
    America
    15-year
       63




---



##### Table of Contents



Europe
          Asia
          South
    America
   64




---



##### Table of Contents



Other
    Costs and Expenses
    Three Months EndedDecember 31,2008


2007(Restated)Successor


SuccessorTotal Segment income

$
138


$
171Interest expense and amortization of debt issuance costs, net


(44
)


(47
)Unrealized losses on change in fair value of derivative
    instruments, net


(472
)


(24
)Realized gains on corporate derivative instruments, net


4



2Depreciation and amortization


(107
)


(108
)Impairment of goodwill


(1,340
)


Minority interests share


9



Adjustment to eliminate proportional consolidation(A)


(174
)


(15
)Restructuring charges, net


(15
)


(1
)Losses on disposal of property, plant, and equipment, net


(1
)


Corporate selling, general and administrative expenses


(12
)


(18
)Other costs, net


(5
)


(7
)Income tax (provision) benefit


199



(26
)Net loss

$
(1,820
)

$
(73
)     (A)
    
    Our financial information for our segments (including Segment
    income) includes the results of our non-consolidated affiliates
    on a proportionately consolidated basis, which is consistent
    with the way we manage our business segments. However, under
    GAAP, these non-consolidated affiliates are accounted for using
    the equity method of accounting. Therefore, in order to
    reconcile Total Segment income to Net loss, the proportional
    Segment income of these non-consolidated affiliates is removed
    from Total Segment income, net of our share of their net
    after-tax results, which is reported as Equity in net (income)
    loss of non-consolidated affiliates on our condensed
    consolidated statements of operations. See
    Note 9  Investment in and Advances to
    Non-Consolidated Affiliates and Related Party Transactions for
    further information about these non-consolidated affiliates. 65




---



##### Table of Contents




    Our functional currency in Canada and Brazil is the
    U.S. dollar and the company holds significant U.S. dollar
    denominated debt in these locations. As the value of the local
    currencies strengthens and weakens against the dollar,
    unrealized gains or losses are created in those locations for
    tax purposes, while the underlying gains or losses are not
    recorded in our income statement.
    We have significant net deferred tax liabilities in Brazil that
    are remeasured to account for currency fluctuations as the taxes
    are payable in local currency.
    Our income is taxed at various statutory tax rates in varying
    jurisdictions. Applying the corresponding amounts of income and
    loss to the various tax rates results in differences when
    compared to our Canadian statutory tax rate.
    Under Canadian law, 50% of capital gains and losses are excluded
    from taxable income. We have significant unrealized capital
    gains and losses related to currency fluctuations in Canada.
    We record increases to valuation allowances primarily related to
    tax losses in certain jurisdictions where we believe it is more
    likely than not that we will not be able to utilize those losses.
    We recorded a non-deductible goodwill impairment charge for the
    three months ended December 31, 2008.     66




---



##### Table of Contents



Nine
    Months Ended December 31, 2008 Compared With the Nine
    Months Ended December 31,
    2007
            Segment
    Review (On a combined non-GAAP basis)
    Selected Operating Results

North








SouthNine Months Ended December 31, 2008

America


Europe


Asia


America


Eliminations


Total(Successor)Net sales

$
3,092


$
3,048


$
1,312


$
800


$
(14
)

$
8,238Shipments (kt)Rolled products


821



722



361



261







2,165Ingot products


31



68



12



15







126Total shipments


852



790



373



276







2,291   North








SouthNine Months Ended December 31, 2007

America


Europe


Asia


America


Eliminations


Total(Combined)Net sales

$
3,073


$
3,207


$
1,394


$
765


$
(55
)

$
8,384Shipments (kt)Rolled products


826



803



368



237







2,234Ingot products


46



25



31



20







122Total shipments


872



828



399



257







2,356  67




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##### Table of Contents



North








SouthChanges in Segment income

America


Europe


Asia


America


TotalSegment income  nine months ended December 31,
    2007

$
170


$
187


$
33


$
119


$
509Volume:Rolled products


(4
)


(75
)


(7
)


8



(78
)Other






(3
)


(8
)


(8
)


(19
)Conversion premium and product mix


2



35



20



(8
)


49Conversion costs(A)


(43
)


(2
)


(18
)


(31
)


(94
)Metal price lag


(72
)


76



68



19



91Foreign exchange


(25
)


(27
)


(10
)


4



(58
)Other changes(B)


17



30



5



26



78Segment income  nine months ended December 31,
    2008

$
45


$
221


$
83


$
129


$
478     (A)
    
    Conversion costs include expenses incurred in production such as
    direct and indirect labor, energy, freight, scrap usage, alloys
    and hardeners, coatings, alumina and melt loss. Fluctuations in
    this component reflect cost efficiencies during the period as
    well as cost inflation (deflation).(B)
    
    Other changes include selling, general &
    administrative costs and research and development for all
    segments and certain other items which impact one or more
    regions, including such items as the impact of purchase
    accounting and can price ceilings. Significant fluctuations in
    these items are discussed below.  North
    America
        Europe
     68




---



##### Table of Contents



Asia
      South
    America
     69




---



##### Table of Contents



Other
    Costs and Expenses
    Nine Months EndedDecember 31,2008


2007(Restated)Successor


CombinedTotal Segment income

$
478


$
510Interest expense and amortization of debt issuance costs, net


(125
)


(154
)Unrealized losses on change in fair value of derivative
    instruments, net


(672
)


(121
)Realized gains losses on corporate derivative instruments, net


4



37Depreciation and amortization


(330
)


(292
)Impairment of goodwill


(1,340
)


Impairment charges on long-lived assets


(1
)


Minority interests share


7



3Adjustment to eliminate proportional consolidation(A)


(210
)


(24
)Restructuring charges, net


(14
)


(3
)Gains on disposal of property, plant, and equipment, net


1



Corporate selling, general and administrative expenses


(42
)


(77
)Other costs, net


13



(4
)Sales transaction fees






(32
)Income tax (provision) benefit


333



(77
)Net loss

$
(1,898
)

$
(234
)     (A)
    Our financial information for our segments (including Segment
    income) includes the results of our non-consolidated affiliates
    on a proportionately consolidated basis, which is consistent
    with the way we manage our business segments. However, under
    GAAP, these non-consolidated affiliates are accounted for using
    the equity method of accounting. Therefore, in order to
    reconcile Total Segment income to Net loss, the proportional
    Segment income of these non-consolidated affiliates is removed
    from Total Segment income, net of our share of their net
    after-tax results, which is reported as Equity in net (income)
    loss of non-consolidated affiliates on our condensed
    consolidated statements of operations. See
    Note 9  Investment in and Advances to
    Non-Consolidated Affiliates and Related Party Transactions for
    further information about these non-consolidated affiliates.       70




---



##### Table of Contents



LIQUIDITY
    AND CAPITAL RESOURCES
  Impact
    of Market Conditions on our Business
   71




---



##### Table of Contents



Available
    Liquidity
    January 31,


December 31,


March 31,2009


2008


2008Successor


Successor


SuccessorCash and cash equivalents

$
190


$
176


$
326Overdrafts


(19
)


(22
)


(5
)Gross availability under the ABL facility


255



323



582Borrowing availability limitation due to fixed charge coverage
    ratio


(80
)


(80
)


(80
)Total estimated liquidity

$
346


$
397


$
823      72




---



##### Table of Contents



Operating
    Activities
       73




---



##### Table of Contents



Nine MonthsEndedDecember 31,2008


2007


Change(Restated)Successor


CombinedNet cash provided by (used in) operating activities

$
(434
)

$
(201
)

$
(233
)Dividends  minority interests


(5
)


(8
)


3Capital expenditures


(107
)


(137
)


30Net proceeds from settlement of derivative instruments


180



74



106Free cash flow

$
(366
)

$
(272
)

$
(94
)Ending cash and cash equivalents

$
176


$
131


$
45         tm
   74




---



##### Table of Contents



Investing
    Activities
    Nine MonthsEndedDecember 31,2008


2007


ChangeSuccessor


CombinedCapital expenditures

$
(107
)

$
(137
)

$
30Net proceeds from settlement of derivative instruments


180



74



106Proceeds from sales of property, plant and equipment


4



4



Changes to investment in and advances to non-consolidated
    affiliates


17



6



11Proceeds from related parties loans receivable, net


18



12



6Net cash provided by (used in) investing activities

$
112


$
(41
)

$
153   tm
      Financing
    Activities
    Nine MonthsEndedDecember 31,2008


2007


ChangeSuccessor


CombinedProceeds from issuance of common stock

$



$
92


$
(92
)Proceeds from issuance of debt


8



1,250



(1,242
)Principal repayments


(11
)


(1,006
)


995Short-term borrowings, net


193



(43
)


236Dividends  minority interests


(5
)


(8
)


3Debt issuance costs






(39
)


39Proceeds from the exercise of stock options






1



(1
)Net cash provided by financing activities

$
185


$
247


$
(62
)    75




---



##### Table of Contents



New
    Senior Secured Credit Facilities
      Interest
    Rate Swaps
        Short-Term
    Borrowings and Letters of Credit
      Subsequent
    event
   76




---



##### Table of Contents



OFF-BALANCE
    SHEET ARRANGEMENTS
    
    any obligation under certain derivative instruments;
    any obligation under certain guarantees or contracts;
    a retained or contingent interest in assets transferred to an
    unconsolidated entity or similar entity or similar arrangement
    that serves as credit, liquidity or market risk support to that
    entity for such assets and
    any obligation under a material variable interest held by the
    registrant in an unconsolidated entity that provides financing,
    liquidity, market risk or credit risk support to the registrant,
    or engages in leasing, hedging or research and development
    services with the registrant.    Derivative
    Instruments
         77




---



##### Table of Contents



December 31, 2008Assets


Liabilities


Net Fair ValueCurrent


Noncurrent


Current


Noncurrent


Assets/(Liabilities)SuccessorDerivatives designated as hedging instruments:Cross-currency swaps

$



$



$
(1
)

$
(10
)

$
(11
)Interest rate swaps










(9
)


(5
)


(14
)Electricity swap










(3
)


(7
)


(10
)Total derivatives designated as hedging instruments










(13
)


(22
)


(35
)Derivatives not designated as hedging instruments:Foreign exchange forward contracts


31



2



(103
)


(26
)


(96
)Currency options










(4
)






(4
)Cross-currency swaps


16



1



(19
)


(1
)


(3
)Interest rate currency swaps


(1
)


26











25Aluminum forward contracts


134



33



(754
)


(7
)


(594
)Aluminum options






9



(71
)






(62
)Embedded derivative instruments


148







(18
)






130Heating oil swaps










(4
)






(4
)Natural gas swaps










(10
)






(10
)Total derivatives not designated as hedging instruments


328



71



(983
)


(34
)


(618
)Total derivative fair value

$
328


$
71


$
(996
)

$
(56
)

$
(653
)   78




---



##### Table of Contents



March 31, 2008Assets


Liabilities


Net Fair ValueCurrent


Noncurrent


Current


Noncurrent


Assets/(Liabilities)SuccessorDerivatives designated as hedging instruments:Cross-currency swaps

$



$



$



$
(184
)

$
(184
)Interest rate swaps










(3
)


(12
)


(15
)Electricity swap


3



11











14Total derivatives designated as hedging instruments


3



11



(3
)


(196
)


(185
)Derivatives not designated as hedging instruments:Foreign exchange forward contracts


43



4



(112
)


(4
)


(69
)Cross-currency swaps


19







(4
)


(1
)


14Interest rate currency swaps


2



2











4Aluminum forward contracts


130



4



(9
)






125Aluminum options


1















1Embedded derivative instruments










(20
)






(20
)Natural gas swaps


5















5Total derivatives not designated as hedging instruments


200



10



(145
)


(5
)


60Total derivative fair value

$
203


$
21


$
(148
)

$
(201
)

$
(125
)   Net
    Investment Hedges
      Three Months


Nine Months


May 16, 2007



April 1, 2007Ended


Ended


Through



ThroughDecember 31,


December 31,


December 31,



May 15,2008


2007


2008


2007



2007Successor


Successor



PredecessorSuccessor


SuccessorCross-currency swaps

$
50


$
(5
)

$
170


$
(33
)


$
(8
)   Cash Flow
    Hedges
     79




---



##### Table of Contents



Three
    Month Comparison:
  Amount of Gain or (Loss)Amount of Gain or (Loss)


Amount of Gain or (Loss)


Recognized in Income onRecognized in OCI on


Reclassified from Accumulated


Derivative (Ineffective PortionDerivative


OCI into Income


and Amount Excluded from(Effective Portion)


(Effective Portion)


Effectiveness Testing)Three Months


Three Months


Three Months


Three Months


Three Months


Three MonthsEnded


Ended


Ended


Ended


Ended


EndedDecember 31,


December 31,


December 31,


December 31,


December 31,


December 31,2008


2007


2008


2007


2008


2007Successor


Successor


Successor


Successor


Successor


SuccessorElectricity swap

$
(16
)

$
6


$
2


$
3


$
2


$
Interest rate swaps

$
(9
)

$
(2
)

$



$



$



$
   Nine
    Month Comparison:
  Amount of Gain or (Loss)Amount of Gain or (Loss)


Amount of Gain or (Loss)


Recognized in Income onRecognized in OCI on


Reclassified from Accumulated


Derivative (Ineffective PortionDerivative


OCI into Income


and Amount Excluded from(Effective Portion)


(Effective Portion)


Effectiveness Testing)Nine Months


Nine Months


Nine MonthsEnded


Ended


EndedDecember 31,


December 31,


December 31,2008


2008


2008Successor


Successor


SuccessorElectricity swap

$
(16
)

$
10


$
2Interest rate swaps

$
2


$



$
   80




---



##### Table of Contents



Amount ofGain or (Loss)Amount of


Recognized in Income onAmount of Gain or


Gain or (Loss)


Derivative (Ineffective(Loss) Recognized


Reclassified from Accumulated


Portion and Amountin OCI on Derivative


OCI into Income


Excluded from(Effective Portion)


(Effective Portion)


Effectiveness Testing)May 16, 2007



April 1, 2007


May 16, 2007



April 1, 2007


May 16, 2007



April 1, 2007Through



Through


Through



Through


Through



ThroughDecember 31,



May 15,


December 31,



May 15,


December 31,



May 15,2007



2007


2007



2007


2007



2007Successor



Predecessor


Successor



Predecessor


Successor



PredecessorForeign exchange forward contracts

$




$
3


$




$
1


$




$
Electricity swap

$
12



$
4


$
5



$



$




$
Interest rate Swaps

$
(2
)


$



$




$



$




$
   Derivative
    Instruments Not Designated as Hedges
           81




---



##### Table of Contents



Three Months


Nine Months


May 16, 2007



April 1, 2007Ended


Ended


Through



ThroughDecember 31,


December 31,


December 31,



May 15,2008


2007


2008


2007



2007Successor


Successor


Successor


Successor



PredecessorDerivative Instruments Not Designated as HedgesForeign exchange forward contracts

$
21


$
(24
)

$
28


$
(12
)


$
11Interest rate currency swaps


(82
)


1



(58
)


(1
)



(1
)Currency options


(4
)






(4
)







Aluminum forward contracts


(415
)


(54
)


(606
)


(88
)



9Aluminum options


(47
)






(72
)


1




Embedded derivative instruments


113



16



171



28




2Heating oil swaps


(5
)






(5
)







Natural gas swaps


(7
)


(1
)


(16
)


(4
)



1Cross currency swaps


17



3



25



(3
)



(3
)Gain (loss) recognized


(409
)


(59
)


(537
)


(79
)



19Derivative Instruments Designated as Cash Flow HedgesElectricity swap


4



3



13



7




1Gain (loss) on change in fair value of derivative instruments,
    net

$
(405
)

$
(56
)

$
(524
)

$
(72
)


$
20   Guarantees
    of Indebtedness
  Consolidation of Variable Interest Entities.
        Maximum


LiabilityPotential Future


CarryingPayment


ValueWholly-owned Subsidiaries

$
51


$
25Aluminium Norf GmbH

$
14


$
  82




---



##### Table of Contents



Other
    CONTRACTUAL
    OBLIGATIONS
  Form 10-K/A
  DIVIDENDS
    CRITICAL
    ACCOUNTING POLICIES AND ESTIMATES
  Form 10-K/A
  Impairment
    of Goodwill and Investment in Affiliate
  Goodwill and
    Intangible Assets
    build-up build-up
 83




---



##### Table of Contents



build-up
  Form 10-Q Equity in net
    (income) loss of non-consolidated affiliates
    OtherReporting Unit

March 31, 2008(A)


Impairments


Adjustments(B)


December 31, 2008(Restated)SuccessorSuccessorNorth America

$
1,149


$
(860
)

$
(1
)

$
288Europe


518



(330
)


(5
)


183South America


263



(150
)






113$
1,930


$
(1,340
)

$
(6
)

$
584     (A)
    
    See Note 1  Business and Summary of Significant
    Accounting Policies (Reclassifications) for
    discussion of goodwill balance reclassification at
    March 31, 2008.(B)
    
    Other adjustments include: (1) an adjustment in North
    America for final payment related to the transfer of pension
    plans in Canada for employees who elected to transfer their past
    service to Novelis during the quarter ended June 30, 2008
    and (2) adjustments in Europe related to tax audits during
    the quarters ended September 30, 2008 and December 31,
    2008.    Impairment
    of Intangible Assets
  Accounting for the Impairment or Disposal of Long-Lived
    Assets.
 84




---



##### Table of Contents



Impairment
    of Other Assets
    RECENT
    ACCOUNTING STANDARDS
  Recently
    Adopted Accounting Standards
    No. FAS 140-4 Disclosures by Public Entities (Enterprises) about Transfers
    of Financial Assets and Interests in Variable Interest Entities.
  The Hierarchy of Generally
    Accepted Accounting Principles
  The Fair Value Option for Financial Assets and Financial
    Liabilities  including an amendment of FASB Statement
    No. 115 instrument-by-instrument Accounting for Derivative Instruments and Hedging Activities
  Fair Value Measurements No. FAS 157-2, Effective Date of FASB Statement No. 157 No. FAS 157-1, Application of FASB Statement No. 157 to FASB Statement
    No. 13 and Other Accounting Pronouncements That Address
    Fair Value Measurements for Purposes of Lease Classification or
    Measurement under Statement 13 Accounting for Leases Business Combinations
  No. FIN 39-1, Amendment of FASB Interpretation No. 39 FIN 39-1). FIN 39-1 Offsetting of Amounts
    Related to Certain Contracts
 85




---



##### Table of Contents



Recently
    Issued Accounting Standards
    Employers Disclosures about Pensions
    and Other Postretirement Benefits
  No. FAS 142-3, Determination of Useful Life of Intangible Assets FAS 142-3). FAS 142-3 Goodwill and Other Intangible Assets FAS 142-3 FAS 142-3 FAS 142-3
  Disclosures about Derivative Instruments and Hedging
    Activities, an amendment of FASB Statement No. 133
  Business Combinations , Accounting for Income Taxes,
 86




---



##### Table of Contents



Noncontrolling Interests in Consolidated Financial Statements
   87




---



##### Table of Contents



SPECIAL
    NOTE REGARDING FORWARD-LOOKING STATEMENTS AND MARKET
    DATA
  Form 10-Q
    
    the level of our indebtedness and our ability to generate cash;
    changes in the prices and availability of aluminum (or premiums
    associated with such prices) or other materials and raw
    materials we use;
    the effect of metal price ceilings in certain of our sales
    contracts;
    the capacity and effectiveness of our metal hedging activities,
    including our internal used beverage cans (UBC) and smelter
    hedges;
    relationships with, and financial and operating conditions of,
    our customers, suppliers and our ultimate parent, Hindalco;
    fluctuations in the supply of, and prices for, energy in the
    areas in which we maintain production facilities;
    our ability to access financing for future capital requirements;
    continuing obligations and other relationships resulting from
    our spin-off from Alcan;
    changes in the relative values of various currencies;
    factors affecting our operations, such as litigation,
    environmental remediation and
    clean-up
    costs, labor relations and negotiations, breakdown of equipment
    and other events;
    economic, regulatory and political factors within the countries
    in which we operate or sell our products, including changes in
    duties or tariffs;
    competition from other aluminum rolled products producers as
    well as from substitute materials such as steel, glass, plastic
    and composite materials;
    changes in general economic conditions, including further
    deterioration in the global economy; 88




---



##### Table of Contents




    our ability to improve and maintain effective internal control
    over financial reporting and disclosure controls and procedures
    in the future;
    changes in the fair value of derivative instruments;
    cyclical demand and pricing within the principal markets for our
    products as well as seasonality in certain of our
    customers industries;
    changes in government regulations, particularly those affecting
    taxes, environmental, health or safety compliance;
    changes in interest rates that have the effect of increasing the
    amounts we pay under our principal credit agreement and other
    financing agreements; and
    the effect of taxes and changes in tax rates.  Form 10-K/A
  Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk          Commodity
    Price Risks
    Aluminum
       89




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##### Table of Contents



Sensitivities
    Increase in


Change inRate/Price


Fair ValueAluminum Forward Contracts


10
%

$
42Aluminum Options


10
%

$
7   Energy
         90




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##### Table of Contents



Sensitivities
    Increase in


Change inRate/Price


Fair ValueElectricity


10
%

$
4Natural Gas


10
%

$
2Heating Oil


10
%

$
1   Foreign
    Currency Exchange Risks
    non-U.S. dollar
     91




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##### Table of Contents



Sensitivities
    Pre-TaxGainIncrease in


(Loss) inExchange Rate


Fair ValueCurrency measured against the U.S. dollarEuro


10
%

$
(41
)Korean won


10
%


(5
)Brazilian real


10
%


22British pound


10
%


3Canadian dollar


10
%


6Swiss franc


10
%


1       Pre-TaxIncrease in


Loss inRate


Fair ValueCurrency measured against the U.S. dollarEuro


10
%

$
(24
)   Interest
    Rate Risks
        Sensitivities
    Increase in


Change inRate


Fair ValueInterest Rate Swap ContractsNorth America


10
%

$
1Asia


10
%

$
  92




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##### Table of Contents



Item 4.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
    Form 10-Q Rule 13a-15(e)
  Changes
    in Internal Control Over Financial Reporting
  Rule 13a-15(f)
  Material
    Weakness Existing as of December 31, 2008 and Remediation
    Plan
  Form 10-K/A
   93




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##### Table of Contents



94




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##### Table of Contents



PART II.
    OTHER INFORMATION  Item 1.
    Legal
    Proceedings  Coca-Cola
    Lawsuits. Coca-Cola Coca-Cola Coca-Cola
  ARCO Aluminum Complaint.
        Item 1A:
    Risk
    Factors  Economic
    conditions could continue to materially adversely affect our
    financial condition and results of operations.
     95




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##### Table of Contents



and/or
    Item 6.
    Exhibits  ExhibitNo.

Description2
.1

Arrangement Agreement by and among Hindalco Industries Limited,
    AV Aluminum Inc. and Novelis Inc., dated as of February 10,
    2007 (incorporated by reference to Exhibit 2.1 to our
    Current Report on
    Form 8-K
    filed on February 13, 2007)3
.1

Restated Certificate and Articles of Incorporation of Novelis
    Inc. (incorporated by reference to Exhibit 3.1 to the
    Form 8-K
    filed by Novelis Inc. on January 7, 2005 (File
    No. 001-32312))3
.2

Amended and Restated Bylaws, adopted as of July 24, 2008
    (incorporated by reference to Exhibit 3.2 to the
    Form 8-K
    filed by Novelis Inc. on July 25, 2008 (File
    No. 001-32312))4
.1

Shareholder Rights Agreement between Novelis and CIBC Mellon
    Trust Company (incorporated by reference to
    Exhibit 4.1 to the
    Form 10-K
    filed by Novelis Inc. on March 30, 2005 (File
    No. 001-32312))4
.2

Indenture, relating to the Notes, dated as of February 3,
    2005, between the Company, the guarantors named on the signature
    pages thereto and The Bank of New York Trust Company, N.A.,
    as trustee (incorporated by reference to Exhibit 4.1 to our
    Current Report on
    Form 8-K
    filed on February 3, 2005
    (File No. 001-32312))4
.3

Form of Note for 7
    1/4% Senior
    Notes due 2015 (incorporated by reference to Exhibit 4.1 to
    the
    Form S-4
    filed by Novelis Inc. on August 3, 2005 (File
    No. 331-127139))4
.4

First Amendment to the Shareholder Rights Agreement between
    Novelis Inc. and CIBC Mellon Trust Company, dated as of
    February 10, 2007 (incorporated by reference to our Current
    Report on
    Form 8-K
    file on February 13, 2007)10
.1*

Employment Agreement dated November 6, 2008 between Novelis
    Inc. and Robert Nelson10
.2*

Amended Novelis Long-Term Incentive Plan for fiscal
    2009-201231
.1

Section 302 Certification of Principal Executive Officer31
.2

Section 302 Certification of Principal Financial Officer32
.1

Section 906 Certification of Principal Executive Officer32
.2

Section 906 Certification of Principal Financial Officer     *
    
    Indicates a management contract or compensatory plan or
    arrangement. 96




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##### Table of Contents



SIGNATURES
      By:
    /s/  Steven
    Fisher      By:
    /s/  Robert
    P. Nelson       97




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##### Table of Contents



EXHIBIT INDEX
  ExhibitNo.

Description2
.1

Arrangement Agreement by and among Hindalco Industries Limited,
    AV Aluminum Inc. and Novelis Inc., dated as of February 10,
    2007 (incorporated by reference to Exhibit 2.1 to our
    Current Report on
    Form 8-K
    filed on February 13, 2007)3
.1

Restated Certificate and Articles of Incorporation of Novelis
    Inc. (incorporated by reference to Exhibit 3.1 to the
    Form 8-K
    filed by Novelis Inc. on January 7, 2005 (File
    No. 001-32312))3
.2

Amended and Restated Bylaws, adopted as of July 24, 2008
    (incorporated by reference to Exhibit 3.2 to the
    Form 8-K
    filed by Novelis Inc. on July 25, 2008 (File
    No. 001-32312))4
.1

Shareholder Rights Agreement between Novelis and CIBC Mellon
    Trust Company (incorporated by reference to
    Exhibit 4.1 to the
    Form 10-K
    filed by Novelis Inc. on March 30, 2005 (File
    No. 001-32312))4
.2

Indenture, relating to the Notes, dated as of February 3,
    2005, between the Company, the guarantors named on the signature
    pages thereto and The Bank of New York Trust Company, N.A.,
    as trustee (incorporated by reference to Exhibit 4.1 to our
    Current Report on
    Form 8-K
    filed on February 3, 2005 (File
    No. 001-32312))4
.3

Form of Note for 7
    1/4% Senior
    Notes due 2015 (incorporated by reference to Exhibit 4.1 to
    the
    Form S-4
    filed by Novelis Inc. on August 3, 2005 (File
    No. 331-127139))4
.4

First Amendment to the Shareholder Rights Agreement between
    Novelis Inc. and CIBC Mellon Trust Company, dated as of
    February 10, 2007 (incorporated by reference to our Current
    Report on
    Form 8-K
    file on February 13, 2007)10
.1*

Employment Agreement dated November 6, 2008 between Novelis
    Inc. and Robert Nelson10
.2*

Amended Novelis Long-Term Incentive Plan for fiscal
    2009-201231
.1

Section 302 Certification of Principal Executive Officer31
.2

Section 302 Certification of Principal Financial Officer32
.1

Section 906 Certification of Principal Executive Officer32
.2

Section 906 Certification of Principal Financial Officer     *
    
    Indicates a management contract or compensatory plan or
    arrangement. 98