##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, 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, 2007oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to          .   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 þ

Accelerated
    filer o

Non-accelerated
    filer o

Smaller reporting
    company o   Rule 12b-2 o þ




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##### 





TABLE OF
    CONTENTS
   
 PART I.


FINANCIAL INFORMATIONItem 1.


Financial Statements


2Condensed Consolidated Statements of Operations
    and Comprehensive Income (Loss) (unaudited) Three Months Ended
    December 31, 2007 and 2006; May 16, 2007 Through
    December 31, 2007; April 1, 2007 Through May 15,
    2007; and Nine Months Ended December 31, 2006


2Condensed Consolidated Balance Sheets (unaudited)
    As of December 31, 2007 and March 31, 2007


3Condensed Consolidated Statements of Cash Flows
    (unaudited) May 16, 2007 Through December 31, 2007;
    April 1, 2007 Through May 15, 2007; and Nine Months
    Ended December 31, 2006


4Condensed Consolidated Statements of
    Shareholders Equity (unaudited) April 1, 2007 Through
    May 15, 2007 and May 16, 2007 Through
    December 31, 2007


5Notes to the Condensed Consolidated Financial
    Statements (unaudited)


6Item 2.


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


59Item 3.


Quantitative and Qualitative Disclosures About
    Market Risk


94Item 4.


Controls and Procedures


98PART II.


OTHER INFORMATIONItem 1.


Legal Proceedings


100Item 6.


Exhibits


102EX-10.6 AGREEMENT REGARDING TERMINATION OF EMPLOYMENTEX-10.7 SEPARATION AND RELEASE AGREEMENTEX-18.1 PREFERABILITY LETTER ISSUED BY PRICEWATERHOUSECOOPERS LLPEX-31.1 SECTION 302 CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICEREX-31.2 SECTION 302 CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICEREX-32.1 SECTION 906 CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICEREX-32.2 SECTION 906 CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER   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, except per share amounts)  Three Months Ended


May 16, 2007



April 1, 2007


Nine MonthsDecember 31,


Through



Through


Ended2007



2006


December 31, 2007



May 15, 2007


December 31, 2006Successor



Predecessor


Successor



Predecessor


PredecessorNet sales

$
2,735



$
2,472


$
7,103



$
1,281


$
7,530Cost of goods sold (exclusive of depreciation and amortization
    shown below)


2,475




2,386



6,466




1,205



7,182Selling, general and administrative expenses


99




117



229




95



318Depreciation and amortization


105




59



260




28



175Research and development expenses


11




11



34




6



31Interest expense and amortization of debt issuance
    costs  net


47




57



128




26



158(Gain) loss on change in fair value of derivative
    instruments  net


50




(5
)


72




(20
)


(9
)Equity in net (income) loss of non-consolidated affiliates


4




(4
)


9




(1
)


(13
)Sale transaction fees
















32



Other (income) expenses  net


(11
)



(9
)


(7
)



4



(6
)2,780




2,612



7,191




1,375



7,836Income (loss) before provision (benefit) for taxes on income
    (loss) and minority interests share


(45
)



(140
)


(88
)



(94
)


(306
)Provision (benefit) for taxes on income (loss)


4




(34
)


4




4



(106
)Income (loss) before minority interests share


(49
)



(106
)


(92
)



(98
)


(200
)Minority interests share







1



2




1



(1
)Net income (loss)


(49
)



(105
)


(90
)



(97
)


(201
)Other comprehensive income (loss)  net of taxCurrency translation adjustment


40




63



68




35



131Change in fair value of effective portion of hedges 
    net







(16
)


2




(1
)


(39
)Postretirement benefit plans Amortization of net actuarial loss
















(1
)


Change in minimum pension liability







16












12Other comprehensive income (loss)  net of tax


40




63



70




33



104Comprehensive income (loss)

$
(9
)


$
(42
)

$
(20
)


$
(64
)

$
(97
)Dividends per common share

$
0.00



$
0.01


$
0.00



$
0.00


$
0.11    2




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##### Table of Contents



Novelis
    Inc.



CONDENSED
    CONSOLIDATED BALANCE SHEETS (unaudited)
    (in millions, except number of shares)  As ofDecember 31,



March 31,2007



2007Successor



PredecessorASSETSCurrent assetsCash and cash equivalents

$
133



$
128Accounts receivable (net of allowances of $1 as of
    December 31, 2007 and $29 as of March 31, 2007) third parties


1,335




1,350 related parties


29




25Inventories


1,441




1,483Prepaid expenses and other current assets


48




39Current portion of fair value of derivative instruments


54




92Deferred income tax assets


6




19Total current assets


3,046




3,136Property, plant and equipment  net


3,372




2,106Goodwill


2,174




239Intangible assets  net


873




20Investment in and advances to non-consolidated affiliates


920




153Fair value of derivative instruments  net of current
    portion


10




55Deferred income tax assets


7




102Other long-term assets third parties


92




105 related parties


42




54Total assets

$
10,536



$
5,970LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilitiesCurrent portion of long-term debt

$
14



$
143Short-term borrowings


245




245Accounts payable third parties


1,323




1,614 related parties


60




49Accrued expenses and other current liabilities


881




480Deferred income tax liabilities


70




73Total current liabilities


2,593




2,604Long-term debt  net of current portion


2,559




2,157Deferred income tax liabilities


685




103Accrued postretirement benefits


413




427Other long-term liabilities


659




3526,909




5,643Commitments and contingenciesMinority interests in equity of consolidated affiliates


150




152Shareholders equityCommon stock, no par value; unlimited number of shares
    authorized; 77,459,658 and 75,357,660 shares issued and
    outstanding as of December 31, 2007 and March 31,
    2007, respectively







Additional paid-in capital


3,497




428Accumulated deficit


(90
)



(263
)Accumulated other comprehensive income (loss)


70




10Total shareholders equity


3,477




175Total liabilities and shareholders equity

$
10,536



$
5,970    3




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##### Table of Contents



Novelis
    Inc.
  CONDENSED CONSOLIDATED STATEMENTS OF CASH
    FLOWS
 (unaudited) (in millions)
  May 16, 2007



April 1, 2007


Nine MonthsThrough



Through


EndedDecember 31, 2007



May 15, 2007


December 31, 2006Successor



Predecessor


PredecessorOPERATING ACTIVITIESNet income (loss)

$
(90
)


$
(97
)

$
(201
)Adjustments to determine net cash provided by (used in)
    operating activities:Depreciation and amortization


260




28



175(Gain) loss on change in fair value of derivative
    instruments  net


72




(20
)


(9
)Deferred income taxes


(46
)



(18
)


(159
)Amortization of debt issuance costs


8




1



11Write-off and amortization of fair value adjustments 
    net


(156
)







Provision for uncollectible accounts receivable


1








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


9




(1
)


(13
)Dividends from non-consolidated affiliates







4



5Minority interests share


(2
)



(1
)


1Share-based compensation











8(Gain) loss on sales of businesses, investments and
    assets  net











(20
)Changes in assets and liabilities (net of effects from
    acquisitions and divestitures):Accounts receivable third parties


76




(21
)


(55
) related parties


1








2Inventories


190




(76
)


(66
)Prepaid expenses and other current assets


(1
)



(7
)


40Other long-term assets


(4
)



(1
)


7Accounts payable third parties


(260
)



(62
)


235 related parties


7








3Accrued expenses and other current liabilities


(53
)



42



(65
)Accrued postretirement benefits


2




1



(37
)Other long-term liabilities


17




(2
)


57Net cash provided by (used in) operating activities


31




(230
)


(79
)INVESTING ACTIVITIESCapital expenditures


(120
)



(17
)


(95
)Proceeds from sales of assets


4








36Changes to investment in and advances to non-consolidated
    affiliates


5




1



1Proceeds from loans receivable  net 
    related parties


12








30Net proceeds from settlement of derivative instruments


56




18



167Net cash provided by (used in) investing activities


(43
)



2



139FINANCING ACTIVITIESProceeds from issuance of common stock


92








Proceeds from issuance of debt


1,100




150



41Principal repayments


(1,005
)



(1
)


(241
)Short-term borrowings  net


(103
)



60



97Dividends common shareholders











(8
) minority interests


(1
)



(7
)


(2
)Net receipts from Alcan











5Debt issuance costs


(37
)



(2
)


(10
)Proceeds from the exercise of stock options







1



2Net cash provided by (used in) financing activities


46




201



(116
)Net increase (decrease) in cash and cash equivalents


34




(27
)


(56
)Effect of exchange rate changes on cash balances held in
    foreign currencies


(3
)



1



5Cash and cash equivalents  beginning of period


102




128



124Cash and cash equivalents  end of period

$
133



$
102


$
73Supplemental disclosures of cash flow information:Interest paid

$
122



$
13


$
125Income taxes paid


50




9



56Supplemental schedule of non-cash investing and financing
    activities related to the Acquisition of Novelis Common Stock
    (Note 2):Property, plant and equipment

$
(1,346
)Goodwill


(1,933
)Intangible assets


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


(775
)Debt


70Supplemental schedule of non-cash investing and financing
    activities related to the spin-off transaction and post closing
    adjustments:Additional paid-in capital










$
(43
)    4




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##### Table of Contents



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





OtherCommon Stock


Paid-in


Accumulated


ComprehensiveShares


Amount


Capital


Deficit


Income (Loss)


TotalPredecessor:Balance as of March 31, 2007


75,357,660


$



$
428


$
(263
)

$
10


$
175Activity April 1, 2007 Through May 15, 2007Net loss














(97
)






(97
)Issuance of common stock from the exercise of stock options


57,876







1











1Conversion of share-based compensation plans from equity-based
    plans to liability-based plans










(7
)










(7
)Currency translation adjustment


















35



35Change in fair value of effective portion of hedges 
    net


















(1
)


(1
)Postretirement benefit plansAmortization of net actuarial loss


















(1
)


(1
)Balance as of May 15, 2007


75,415,536


$



$
422


$
(360
)

$
43


$
105Successor:Balance as of May 16, 2007


75,415,536


$



$
3,405


$



$



$
3,405Activity May 16, 2007 Through December 31, 2007Net loss














(90
)






(90
)Issuance of common stock


2,044,122







92











92Currency translation adjustment


















68



68Change in fair value of effective portion of hedges 
    net


















2



2Balance as of December 31, 2007


77,459,658


$



$
3,497


$
(90
)

$
70


$
3,477    5




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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    Change in
    Fiscal Year End
  Form 10-Q Rule 13a-10
  Description
    of Business and Basis of Presentation
    Form 10-K Rule 10-01 Regulation S-X.
  Form 10-K Form 10-Q
  Predecessor
    and Successor Reporting
  Push Down
    Basis of Accounting Required in Certain Limited Circumstances. Business Combinations
 6




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##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
      Change in
    Impairment Testing Date
  Goodwill and
    Other Intangible Assets
  Reclassifications
    and Revisions
  Restructuring charges  net Impairment charges on long-lived assets Other (income) expenses  net Gain (loss) on change in fair value of derivative
    instruments  net Sale transaction fees Other (income)
    expenses  net
    Recently
    Issued Accounting Standards
  Business Combinations
 7




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##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Accounting for
    Income Taxes
  Noncontrolling Interests in Consolidated Financial
    Statements
  No. FIN 39-1, Amendment of FASB Interpretation No 39 FIN 39-1). FIN 39-1 Offsetting of Amounts
    Related to Certain Contracts FIN 39-1 FIN 39-1
  The Fair Value Option for Financial Assets and Financial
    Liabilities Fair Value Measurements Disclosures about Fair Value of Financial Instruments.
  Fair Value Measurements
 8




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##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
      2.
    Acquisition
    of Novelis Common Stock      Purchase
    Price Allocation and Goodwill
    Purchase of all outstanding 75,415,536 shares at $44.93 per
    share

$
3,388Direct transaction costs incurred by Hindalco


17Total consideration

$
3,405    9




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##### Table of Contents



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


InitialAssets acquired:Current assets

$
3,210


$
3,210Property, plant and equipment


3,452



3,350Goodwill


2,177



2,341Intangible assets


903



879Investment in and advances to non-consolidated affiliates


927



762Fair value of derivative instruments  net of current
    portion


3



3Deferred income tax assets


111



117Other long-term assets


110



110Total assets acquired


10,893



10,772Liabilities assumed:Accounts payable


(1,612
)


(1,612
)Accrued expenses and other current liabilities


(738
)


(738
)Debt, including current portion and short-term borrowings


(2,824
)


(2,824
)Deferred income tax liabilities, including current portion


(1,025
)


(874
)Accrued postretirement benefits


(400
)


(430
)Other long-term liabilities


(736
)


(736
)Minority interests in equity of consolidated affiliates


(153
)


(153
)Total liabilities assumed


(7,488
)


(7,367
)Total consideration

$
3,405


$
3,405     Other long-term liabilities Accrued expenses and other liabilities Net sales
  Research and development expenses
 10




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##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    Sale
    transaction fees
  Unaudited
    Condensed Consolidated Pro Forma Results
    Three Months Ended


Nine Months EndedDecember 31,


December 31,2007



2006


2007



2006Net sales

$
2,727



$
2,544


$
8,417



$
7,777Loss before provision for taxes and minority interests
    share

$
(57
)


$
(137
)

$
(179
)


$
(279
)Net income (loss)

$
(61
)


$
(102
)

$
(184
)


$
(174
)   3.
    Restructuring
    Programs   11




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##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Other (income) expenses  net
  EuropeOther Exit


TotalSeverance


Related


RestructuringReserves


Reserves


ReservesPredecessor:Balance as of March 31, 2007

$
18


$
18


$
36April 1, 2007 through May 15, 2007 Activity:Provisions  net


1







1Cash payments






(1
)


(1
)Adjustments  other






1



1Balance as of May 15, 2007


19



18



37Successor:May 16, 2007 through June 30, 2007 Activity:Provisions  net


1







1Cash payments


(2
)


(1
)


(3
)Balance as of June 30, 2007


18



17



35July 1, 2007 to September 30, 2007 Activity:Cash payments


(5
)


(1
)


(6
)Balance as of September 30, 2007


13



16



29October 1, 2007 through December 31, 2007 Activity:Provisions  net


1







1Cash payments


(3
)


(1
)


(4
)Adjustments  other






1



1Balance as of December 31, 2007

$
11


$
16


$
27   4.
    Inventories    As ofDecember 31, 2007



March 31, 2007Successor



PredecessorFinished goods

$
366



$
359Work in process


556




412Raw materials


445




614Supplies


76




1201,443




1,505Allowances


(2
)



(22
)Inventories

$
1,441



$
1,483  12




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##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  5.  Property,
    Plant and Equipment
    As ofDecember 31, 2007



March 31, 2007Successor



PredecessorLand and property rights

$
254



$
97Buildings


838




895Machinery and equipment


2,376




4,6993,468




5,691Accumulated depreciation and amortization


(217
)



(3,674
)3,251




2,017Construction in progress


121




89Property, plant and equipment  net

$
3,372



$
2,106     Three Months Ended

May 16, 2007


April 1, 2007

Nine MonthsDecember 31,

Through


Through

Ended2007


2006

December 31, 2007


May 15, 2007

December 31, 2006Successor


Predecessor

Successor


Predecessor

PredecessorDepreciation expense related to property, plant and equipment

$
94



$
58


$
235



$
28


$
173   6.
    Goodwill
    and Intangible Assets  Goodwill
    Successor



PredecessorBalance





Balance



Balance


Cumulative


Balanceas of





as of



as of


Translation


as ofOperating Segment

May 16, 2007


Adjustments (A)


December 31, 2007



March 31, 2007


Adjustment


May 15, 2007North America

$
1,527


$
(414
)

$
1,113



$



$



$
Europe


389



411



800




239



5



244Asia


162



(162
)















South America


263



(2
)


261












$
2,341


$
(167
)

$
2,174



$
239


$
5


$
244     (A)
    
    These adjustments include $164 million related to the
    revision of our initial estimates of fair value and allocation
    of the total consideration to assets acquired and liabilities
    assumed in connection with our acquisition by Hindalco recorded
    during the quarter ended December 31, 2007. See
    Note 2  Acquisition of Novelis Common Stock. 13




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##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
   Intangible
    Assets
    As ofDecember 31, 2007



March 31, 2007Successor



PredecessorGross





Net


Weighted



Gross





Net


WeightedCarrying


Accumulated


Carrying


Average



Carrying


Accumulated


Carrying


AverageAmount


Amortization


Amount


Life



Amount


Amortization


Amount


LifeTradename

$
146


$
(4
)

$
142



20 years



$
14


$
(6
)

$
8



15 yearsTechnology


167



(7
)


160



15 years




20



(8
)


12



15 yearsCustomer relationships


461



(14
)


447



20 years












Favorable energy supply contract


123



(9
)


114



9.5 years












Other favorable contracts


15



(5
)


10



3.3 years












$
912


$
(39
)

$
873



17.3 years



$
34


$
(14
)

$
20



15 years     Cost of goods sold
  Three MonthsEnded


May 16, 2007



April 1, 2007


Nine MonthsDecember 31,


Through



Through


Ended2007



2006


December 31, 2007



May 15, 2007


December 31, 2006Successor



Predecessor


Successor



Predecessor


PredecessorTotal Amortization expense related to intangible assets

$
17



$
1


$
39



$



$
2Less: Amortization expense related to intangible assets included
    in Cost of goods sold


(6
)







(14
)







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

$
11



$
1


$
25



$



$
2  14




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##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    Fiscal Year Ending March 31,2008 (remaining three months)

$
162009


612010


592011


552012


542013


54   7.  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
%      15




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##### Table of Contents



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


May 16, 2007






Nine MonthsEnded


Through



April 1, 2007


EndedDecember 31,


December 31,



Through


December 31,2007



2006


2007



May 15, 2007


2006Successor



Predecessor


Successor



Predecessor


PredecessorNet sales

$
161



$
138


$
384



$
45


$
426Costs, expenses and provisions for taxes on income


168




129



379




43



397Net income (loss)

$
(7
)


$
9


$
5



$
2


$
29     Three Months


May 16, 2007



April 1, 2007


Nine MonthsEnded


Through



Through


EndedDecember 31,


December 31,



May 15,


December 31,2007



2006


2007



2007


2006Successor



Predecessor


Successor



Predecessor


PredecessorPurchases of tolling services and electricityAluminium Norf GmbH(A)

$
77



$
57


$
182



$
21


$
175Consorcio Candonga(B)

$
4



$
4


$
9



$
1


$
11Petrocoque(C)


n.a.



$




n.a.



$



$
1Interest incomeAluminium Norf GmbH(D)

$




$



$




$



$
1     n.a.
    
    not applicable  see (C).(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.(C)
    
    We purchase calcined-coke from Petrocoque for use in our
    smelting operation in South America. As previously discussed, we
    sold our interest in Petrocoque in November 2006. They are not
    considered a related party subsequent to the quarter ended
    December 31, 2006.(D)
    
    We earn interest income on a loan due from Aluminium Norf GmbH. 16




---



##### Table of Contents



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



March 31, 2007Successor



PredecessorAccounts receivable(A)

$
29



$
25Other long-term receivables(A)

$
42



$
54Accounts payable(B)

$
60



$
49     (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.  8.
    Accrued
    Expenses and Other Current Liabilities    As ofDecember 31, 2007



March 31, 2007Successor



PredecessorAccrued compensation and benefits

$
122



$
138Accrued settlement of legal claim


39




39Accrued interest payable


41




24Accrued income taxes


75




9Current portion of unfavorable sales contracts


251




Current portion of fair value of derivative instruments


112




33Other current liabilities


241




237Accrued expenses and other current liabilities

$
881



$
480  17




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  9.
    Debt    As ofDecember 31, 2007



March 31,
2007Successor



PredecessorInterest





UnamortizedRates





Fair Value


Carrying(A)


Principal


Adjustments(B)


Value



PrincipalNovelis Inc.Floating rate Term Loan facility, due July 2014


6.83
%

$
298


$



$
298



$
Floating rate Term Loan B(D)



















2597.25% Senior Notes, due February 2015


7.25
%


1,399



69



1,468




1,400Novelis CorporationFloating rate Term Loan facility, due July 2014


6.83
%(C)


657







657




Floating rate Term Loan B(D)



















449Novelis Switzerland S.A.Capital lease obligation, due January 2020 (Swiss francs (CHF)
    54 million)


7.50
%


48



(4
)


44




46Capital lease obligation, due August 2011 (CHF 3 million)


2.49
%


3







3




4Novelis Korea LimitedBank loan, due October 2010


5.44
%


100







100




Bank loan, due December 2007(F)



















70Bank loan (Korean won (KRW) 40 billion)(E)



















42Bank loan, due December 2007 (KRW 25 billion)(F)



















27Bank loans, due September 2008 through June 2011 (KRW
    1 billion)


3.63
%(G)


1







1




1OtherOther debt, due April 2008 through December 2012


2.21
%(G)


2







2




2Total debt






2,508



65



2,573




2,300Less: current portion






(14
)






(14
)



(143
)Long-term debt  net of current portion





$
2,494


$
65


$
2,559



$
2,157     (A)
    
    Interest rates are as of December 31, 2007 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
    (see Note 2  Acquisition of Novelis Common
    Stock).(C)
    
    Excludes the effect of any related interest rate swaps. See
    New Senior Secured Credit Facilities.(D)
    
    The Floating rate Term Loan B was refinanced in July 2007. See
    New Senior Secured Credit Facilities.(E)
    
    The Bank loan was refinanced in August 2007 with a short-term
    borrowing. See Korean Bank Loans.(F)
    
    These two Bank loans were refinanced in October 2007. See
    Korean Bank Loans.(G)
    
    Weighted average interest rate. 18




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
   New
    Senior Secured Credit Facilities
    Other
    long-term assets  third parties
           19




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
        Other long-term assets 
    third parties Interest expense and amortization of
    debt issuance costs  net
    3-month
    Old
    Senior Secured Credit Facilities
       20




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
        Other long-term
    assets  third parties Interest expense
    and amortization of debt issuance costs  net
  7.25% Senior
    Notes
  Other
    long-term assets  third parties Interest
    expense and amortization of debt issuance costs  net
  Interest expense and
    amortization of debt issuance costs  net
 21




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
        Tender
    Offer and Consent Solicitation for 7.25% Senior
    Notes
    Korean
    Bank Loans
     22




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Other
    Agreements
  deposit-and-guarantee
  Capital
    Lease Obligations
      Short
    Term Borrowings and Lines of Credit
     23




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  10.
    Accumulated
    Other Comprehensive Income (Loss)    Three Months


May 16, 2007



April 1, 2007


Nine MonthsEnded


Through



Through


EndedDecember 31,


December 31,



May 15,


December 31,2007



2006


2007



2007


2006Successor



Predecessor


Successor



Predecessor


PredecessorNet change in foreign currency translation adjustments

$
36




$63


$
50



$
31


$
131Net change in fair value of effective portion of hedges


1




(16
)


5




(1
)


(39
)Postretirement benefit plans:Amortization of net actuarial loss
















(1
)


Net change in minimum pension liability







20












16Net other comprehensive income adjustments, before income tax
    effect


37




67



55




29



108Income tax effect


3




(4
)


15




4



(4
)Other comprehensive income (loss)

$
40




$63


$
70



$
33


$
104     As ofDecember 31, 2007



March 31, 2007Successor



PredecessorForeign currency translation adjustments

$
68



$
144Fair value of effective portion of hedges  net


2




(43
)Net actuarial loss







(82
)Net prior service cost







(8
)Net transition obligation







(1
)Accumulated other comprehensive income (loss)

$
70



$
10   11.
    Share-Based
    Compensation  Effect of
    Acquisition by Hindalco
   24




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    Shares/Units


Cash PaymentsPredecessor:

Settled


(In millions)Novelis 2006 Incentive Plan (stock options)


825,850


$
16Novelis 2006 Incentive Plan (stock appreciation rights)


378,360



7Novelis Conversion Plan of 2005


1,238,183



29Stock Price Appreciation Unit Plan


299,873



7Deferred Share Unit Plan for Non-Executive Directors


109,911



5Novelis Founders Performance Awards


180,400



8$
72   Selling,
    general and administrative expenses Additional paid-in capital
    Recognition
    Awards
      Share-Based Payment
   25




---



##### Table of Contents



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


Average


AwardRecognition


Fair Value at


RedemptionAwards


Grant Date


PricePredecessor:Recognition Awards as of March 31, 2007


145,800


$
23.15Granted


Vested


Forfeited/Cancelled


Recognition Awards as of May 15, 2007


145,800






$
44.93Successor:Granted


Vested


(59,050
)Forfeited/Cancelled


(27,700
)Recognition Awards as of December 31, 2007


59,050






$
44.93     2006
    Stock Options
   26




---



##### Table of Contents



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


RemainingAverage


Contractual


AggregateNumber of


Exercise


Term


IntrinsicOptions


Price


(In Years)


ValuePredecessor:Options outstanding as of March 31, 2007


825,850


$
25.53Granted






Exercised






Forfeited/Cancelled






Expired






Settled as a result of the Arrangement


(825,850
)

$
25.53Options outstanding as of May 15, 2007





$







$
Options exercisable as of May 15, 2007





$







$
     Share-Based
    Payment
 27




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    April 1, 2007ThroughMay 15, 2007PredecessorExpected volatility

42.20 to 46.40%Weighted average volatility

44.30%Dividend yield

0.16%Risk-free interest rate

4.68 to 4.71%Expected life

1.00 to 4.75 years     Novelis
    Conversion Plan of 2005
      WeightedAverageWeighted


RemainingAverage


Contractual


AggregateNumber of


Exercise


Term


IntrinsicOptions


Price


(In Years)


ValuePredecessor:Options outstanding as of March 31, 2007


1,296,952


$
21.74Granted






Exercised


(57,876
)

$
20.00Forfeited/Cancelled


(893
)

$
23.74Expired






Settled as a result of the Arrangement


(1,238,183
)

$
21.82Options outstanding as of May 15, 2007





$







$
Options exercisable as of May 15, 2007





$







$
    28




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
      April 1, 2007ThroughMay 15, 2007PredecessorExpected volatility

30.30%Weighted-average volatility

30.30%Dividend yield

1.56%Risk-free interest rate

2.88 to 3.73%Expected life

0.70 to 5.70 years       Stock
    Appreciation Rights
   29




---



##### Table of Contents



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


Contractual


AggregateNumber of


Average


Term


IntrinsicSARs


Exercise Price


(In Years)


ValuePredecessor:SARs outstanding as of March 31, 2007


380,000


$
25.53Granted






Exercised






Forfeited/Cancelled


(1,640
)

$
25.53Expired






Settled as a result of the Arrangement


(378,360
)

$
25.53SARs outstanding as of May 15, 2007





$







$
SARs exercisable as of May 15, 2007





$







$
         Stock
    Price Appreciation Unit Plan
   30




---



##### Table of Contents



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


Contractual


AggregateNumber of


Average


Term


IntrinsicSPAUs


Exercise Price


(In Years)


ValuePredecessor:SPAUs outstanding as of March 31, 2007


300,617


$
21.94Granted






Exercised






Forfeited/Cancelled


(744
)

$
21.49Expired






Settled as a result of the Arrangement


(299,873
)

$
21.94SPAUs outstanding as of May 15, 2007





$







$
SPAUs exercisable as of May 15, 2007





$







$
       Deferred
    Share Unit Plan for Non-Executive Directors
    and/or
 31




---



##### Table of Contents



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


Redemption


IntrinsicDDSUs


Price


ValuePredecessor:DDSUs outstanding as of March 31, 2007


106,578


$
44.09Granted


3,333Exercised (paid out)


Forfeited


Expired/Cancelled


Settled as a result of the Arrangement


(109,911
)

$
44.93DDSUs outstanding as of May 15, 2007





$



$
     Novelis
    Founders Performance Awards
         32




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Share-Based
    Compensation Expense
  Selling,
    general and administrative expenses
  Three Months


May 16, 2007



April 1, 2007


Nine MonthsEnded


Through



Through


EndedDecember 31,


December 31,



May 15,


December 31,2007



2006


2007



2007


2006Successor



Predecessor


Successor



Predecessor


PredecessorRecognition Awards

$
0.7



$
0.5


$
2.0



$
1.5


$
0.5Novelis 2006 Incentive Plan (stock options)


n.a.




0.7



n.a.




14.5



0.7Novelis 2006 Incentive Plan (stock appreciation rights)


n.a.




0.4



n.a.




5.6



0.4Novelis Conversion Plan of 2005


n.a.




5.0



n.a.




23.8



6.5Stock Price Appreciation Unit Plan


n.a.




1.9



n.a.




(0.5
)


3.0Deferred Share Unit Plan for Non-Executive Directors


n.a.




0.6



n.a.




0.2



1.5Novelis Founders Performance Awards


n.a.




(0.1
)


n.a.




0.1



1.2Total Shareholder Returns Performance Plan


n.a.








n.a.








1.0Total share-based compensation expense

$
0.7



$
9.0


$
2.0



$
45.2


$
14.8     n.a.
    
     not applicable as plan was cancelled. 33




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  12.
    Postretirement
    Benefit Plans    Three MonthsEnded


May 16, 2007



April 1, 2007


Nine MonthsDecember 31,


Through



Through


EndedPension Benefit Plans

2007



2006


December 31, 2007



May 15, 2007


December 31, 2006Successor



Predecessor


Successor



Predecessor


PredecessorService cost

$
11



$
13


$
29



$
6


$
32Interest cost


12




12



30




6



34Expected return on assets


(11
)



(10
)


(27
)



(5
)


(29
)Amortization actuarial losses







2












5 prior service cost




















1Curtailment/settlement losses


1




(4
)


1








(4
)Net periodic benefit cost


13




13



33




7



39Proportionate share of non-consolidated affiliates
    deferred pension costs, net of $2 million of tax







4












4Total net periodic benefit cost recognized

$
13



$
17


$
33



$
7


$
43   Three MonthsEnded


May 16, 2007



April 1, 2007


Nine MonthsOther Postretirement

December 31,


Through



Through


EndedBenefit Plans

2007



2006


December 31, 2007



May 15, 2007


December 31, 2006Successor



Predecessor


Successor



Predecessor


PredecessorService cost

$
1



$
2


$
3



$
1


$
4Interest cost


2




1



5




1



5Amortization actuarial losses




















1Net periodic benefit cost

$
3



$
3


$
8



$
2


$
10    34




---



##### Table of Contents



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


May 16, 2007



April 1, 2007


Nine MonthsDecember 31,


Through



Through


Ended2007



2006


December 31, 2007



May 15, 2007


December 31, 2006Successor



Predecessor


Successor



Predecessor


PredecessorFunded pension plans

$
10



$
17


$
25



$
4


$
30Unfunded pension plans


4




13



10




2



19Savings and defined contribution pension plans


4




4



10




2



9Total contributions

$
18



$
34


$
45



$
8


$
58       13.
    Currency
    Losses (Gains)    Three MonthsEnded


May 16, 2007



April 1, 2007


Nine MonthsDecember 31,


Through



Through


Ended2007



2006


December 31, 2007



May 15, 2007


December 31, 2006Successor



Predecessor


Successor



Predecessor


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

$
19



$
6


$
(2
)


$
(10
)

$
8Net loss (gain) on translation of monetary assets and
    liabilities(B)


(12
)



7



(3
)



4



(3
)Net currency losses (gains)

$
7



$
13


$
(5
)


$
(6
)

$
5  35




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    (A)
    
    Included in (Gain) loss on change in fair value of derivative
    instruments  netin the accompanying condensed
    consolidated statements of operations.(B)
    
    Included in Other (income) expenses  netin
    the accompanying condensed consolidated statements of operations.  Accumulated other comprehensive income (loss)
  May 16, 2007



January 1, 2007Through



ThroughDecember 31, 2007



March 31, 2007Successor



PredecessorCumulative currency translation adjustment  beginning
    of period

$




$
133Effect of changes in exchange rates


68




11Cumulative currency translation adjustment  end of
    period

$
68



$
144   14.
    Financial
    Instruments and Commodity Contracts    Accumulated other comprehensive
    income
  Prior to
    Completion of the Arrangement
      Impact of
    the Arrangement and Purchase Accounting
  Accumulated other
    comprehensive income
 36




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    Subsequent
    to Completion of the Arrangement
          As of December 31, 2007Maturity Dates







Net Fair(Fiscal Year)

Assets


Liabilities


ValueSuccessor:Foreign exchange forward contracts

2008 through 2012

$
38


$
(59
)

$
(21
)Cross-currency swaps

2008 through 2015


3



(136
)


(133
)Interest rate currency swaps

2009 through 2011


1



(1
)


Interest rate swaps

2009 through 2010






(2
)


(2
)Aluminum forward contracts

2008 through 2010


1



(52
)


(51
)Electricity swap

2017


7



(1
)


6Embedded derivative instruments

2008  through 2009


14







14Natural gas swaps

2008 through 2010






(1
)


(1
)Total fair value




64



(252
)


(188
)Less: current portion(A)




54



(112
)


(58
)Noncurrent portion(A)



$
10


$
(140
)

$
(130
)   37




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  As of March 31, 2007Maturity Dates







Net Fair(Fiscal Year)

Assets


Liabilities


ValuePredecessor:Foreign exchange forward contracts

2008 through 2012

$
16


$
(20
)

$
(4
)Interest rate swaps

2008


2







2Cross-currency swaps

2008 through 2015


6



(90
)


(84
)Aluminum forward contracts

2008 through 2010


60



(8
)


52Aluminum options

2008


1







1Electricity swap

2017


60







60Embedded derivative instruments

2008


1







1Natural gas swaps

2008


1







1Total fair value




147



(118
)


29Less: current portion(A)




92



(33
)


59Noncurrent portion(A)



$
55


$
(85
)

$
(30
)     (A)
    
    The amounts of the current and long-term portions of fair values
    under assets are each presented in the accompanying condensed
    consolidated balance sheets. The amounts of the current and
    noncurrent portions of fair values under liabilities are
    included in Accrued expenses and other current liabilitiesand Other long-term liabilities, respectively, in the
    accompanying condensed consolidated balance sheets.  15.
    Other
    (Income) Expenses  Net    Three MonthsEnded


May 16, 2007



April 1, 2007


Nine MonthsDecember 31,


Through



Through


Ended2007



2006


December 31, 2007



May 15, 2007


December 31, 2006Successor



Predecessor


Successor



Predecessor


PredecessorExchange (gains) losses  net

$
(12
)


$
7


$
(3
)


$
4


$
(3
)Restructuring charges  net


1




6



2




1



18(Gain) loss on sale of equity interest in non-consolidated
    affiliate(A)







(15
)











(15
)(Gain) loss on sale of rights to develop and operate
    hydroelectric power plants(B)







(11
)











(11
)(Gains) losses on disposals of property, plant and
    equipment  net







4












6Other  net











(6
)



(1
)


(1
)Other (income) expenses  net

$
(11
)


$
(9
)

$
(7
)


$
4


$
(6
)     (A)
    
    In November 2006, we sold the common and preferred shares of our
    25% interest in Petrocoque to the other shareholders of
    Petrocoque for approximately $20 million. We recognized a
    pre-tax gain of approximately $15 million.(B)
    
    During the fourth quarter of 2006, we sold our rights to develop
    and operate two hydroelectric power plants in South America and
    recorded a pre-tax gain of approximately $11 million. 38




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
   16.
    Income
    Taxes  Accounting for
    Income Taxes Interim Financial Reporting Accounting for Income Taxes in Interim
    Periods
  Provision (benefit) for taxes on income (loss) Provision (benefit) for taxes on income (loss)
    May 16, 2007



April 1, 2007


Nine MonthsThree Months Ended


Through



Through


EndedDecember 31,


December 31,



May 15,


December 31,2007



2006


2007



2007


2006Successor



Predecessor


Successor



Predecessor


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

$
(41
)


$
(144
)

$
(79
)


$
(95
)

$
(319
)Canadian statutory tax rate


33
%



33
%


33
%



33
%


33
%Income taxes (benefit) at the Canadian statutory rate

$
(14
)


$
(47
)

$
(26
)


$
(31
)

$
(105
)Increase (decrease) in tax rate resulting from:Exchange translation items


14




(21
)


61




23



5Exchange remeasurement of deferred income taxes


18




1



25




3



Change in valuation allowances


14




29



54




13



38Enacted tax rate changes


(32
)







(103
)



2



Expense/income items with no tax effect  net







18



(19
)



(11
)


10Tax rate differences on foreign earnings







(19
)







2



(59
)Other  net


4




5



12




3



5Provision (benefit) for taxes on income (loss)

$
4



$
(34
)

$
4



$
4


$
(106
)Effective tax rate


(10
)%



24
%


(5
)%



(4
)%


33
%    39




---



##### Table of Contents



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


April 1, 2007

Nine MonthsThree Months Ended

Through


Through

EndedDecember 31,

December 31,


May 15,

December 31,2007


2006

2007


2007

2006Successor


Predecessor

Successor


Predecessor

PredecessorCash taxes paid

$
19



$
44


$
50



$
9


$
56   Adoption
    of FASB Interpretation No. 48
  Accounting for Uncertainty in Income Taxes. Accumulated deficit
    1999-2006.
  Other long-term assets  third
    parties
    Provision (benefit) for taxes on income (loss) Provision (benefit) for taxes on
    income (loss) Provision
    (benefit) for taxes on income (loss)
 40




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    17.
    Commitments
    and Contingencies  Primary
    Supplier
    May 16,


April 1,Three Months

2007


2007

Nine MonthsEnded

Through


Through

EndedDecember 31,

December 31,


May 15,

December 31,2007


2006

2007


2007

2006Successor


Predecessor

Successor


Predecessor

PredecessorPurchases from Alcan as a percentage of total combined prime and
    sheet ingot purchases in kt(A)


33
%



37
%


35
%



34
%


35
%     (A)
    
    One kilotonne (kt) is 1,000 metric tonnes. One metric tonne is
    equivalent to 2,204.6 pounds.  Legal
    Proceedings
  Reynolds Boat Case.
    Form 10-K Accrued expenses and
    other current liabilities Prepaid expenses and
    other current assets
 41




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    Accrued expenses
    and other current liabilities
    Coca-Cola
    Lawsuits. Coca-Cola Coca-Cola Coca-Cola Coca-Cola
  Coca-Cola Coca-Cola
    Anheuser-Busch Litigation.
 42




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
        ARCO Aluminum Complaint.
        Environmental
    Matters
  Oswego North Ponds.
 43




---



##### 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
    
    certain of our wholly-owned subsidiaries and
    Aluminium Norf GmbH, which is a fifty percent (50%) owned joint
    venture that does not meet the requirements for consolidation
    under FASB Interpretation No. 46 (Revised),
    Consolidation of Variable Interest Entities.   44




---



##### Table of Contents



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

Liability CarryingType of Entity

Future Payment

ValueWholly-owned subsidiaries

$
85


$
60Aluminium Norf GmbH


15



   18.
    Segment
    and Major Customer Information      Disclosure About the Segments of
    an Enterprise and Related Information.
  Form 10-K
  (Gain) loss on change in fair
    value of derivative instruments  net.
   45




---



##### 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

TotalDecember 31, 2007 (Successor)

$
3,847


$
4,235


$
1,078


$
1,456


$
(124
)

$
44


$
10,536March 31, 2007 (Predecessor)

$
1,566


$
2,543


$
1,110


$
821


$
(114
)

$
44


$
5,970   Comparison
    of Three Month Data:
  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


83



45



10



34











172Depreciation and amortization


37



57



13



21



(23
)






105Capital expenditures


13



35



11



8



(5
)


1



63   Adjustment toEliminateSelected Operating Results

North








South


Proportional


CorporateThree Months Ended December 31, 2006

America


Europe


Asia


America


Consolidation


and Other


Total(Predecessor)Net sales (to third parties)

$
850


$
932


$
457


$
237


$
(4
)

$



$
2,472Intersegment sales


1



3



3



11







(18
)


Segment Income (Loss)


(42
)


43



14



44











59Depreciation and amortization


17



24



14



11



(8
)


1



59Capital expenditures


15



19



6



9



(10
)






39   Comparison
    of Nine Month Data:
  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


195



155



26



100











476Depreciation and amortization


97



118



37



42



(35
)


1



260Capital 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   46




---



##### Table of Contents



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

North








South


Proportional


CorporateNine Months Ended December 31, 2006

America


Europe


Asia


America


Consolidation


and Other


Total(Predecessor)Net sales (to third parties)

$
2,796


$
2,794


$
1,298


$
654


$
(12
)

$



$
7,530Intersegment sales


2



5



12



43







(62
)


Segment Income (Loss)


(37
)


191



56



125











335Depreciation and amortization


52



69



41



33



(23
)


3



175Capital expenditures


31



36



20



22



(15
)


1



95     May 16, 2007



April 1, 2007


Nine MonthsThree Months Ended


Through



Through


EndedDecember 31,


December 31,



May 15,


December 31,2007



2006


2007



2007


2006Successor



Predecessor


Successor



Predecessor


PredecessorTotal Segment Income

$
172



$
59


$
476



$
32


$
335Interest expense and amortization of debt issuance
    costs  net


(47
)



(57
)


(128
)



(26
)


(158
)Unrealized gains (losses) on change in fair value of derivative
    instruments  net(A)


(24
)



(16
)


(126
)



5



(151
)Realized gains (losses) on corporate derivative
    instruments  net


2




(35
)


39




(3
)


(35
)Depreciation and amortization


(105
)



(59
)


(260
)



(28
)


(175
)Minority interests share







1



2




1



(1
)Adjustment to eliminate proportional consolidation(B)


(18
)



(9
)


(44
)



(7
)


(27
)Restructuring charges  net


(1
)



(6
)


(2
)



(1
)


(18
)Gains or (losses) on disposal of property, plant, and
    equipment  net







(4
)











(6
)Corporate selling, general and administrative expenses


(17
)



(39
)


(41
)



(35
)


(101
)Other costs  net(C)


(7
)



26



(2
)



1



30Sale transaction fees
















(32
)


Benefit (provision) for taxes on income (loss)


(4
)



34



(4
)



(4
)


106Net income (loss)

$
(49
)


$
(105
)

$
(90
)


$
(97
)

$
(201
)  47




---



##### Table of Contents



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


May 16, 2007




Nine MonthsEnded


Through


April 1, 2007

EndedDecember 31,


December 31,


Through

December 31,2007


2006


2007


May 15, 2007

2006Successor


Predecessor


Successor


Predecessor

Predecessor(Gain) loss on change in fair value of derivative
    instruments  net:Realized and included in Segment Income


$
28



$
(56
)


$
(15
)


$
(18
)

$
(195
)Realized on corporate derivative instruments



(2
)



35




(39
)



3



35Unrealized



24




16




126




(5
)


151(Gain) loss on change in fair value of derivative
    instruments  net


$
50



$
(5
)


$
72



$
(20
)

$
(9
)   (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 7  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 gain on sale of equity
    interest in non-consolidated affiliates and a gain on sale of
    rights to develop and operate hydroelectric power plants,
    recognized in the three months ended December 31, 2006 (see
    Note 15  Other (Income) Expenses 
    net).  Major
    Customer Information
    Three MonthsEnded


May 16, 2007


April 1, 2007

Nine MonthsDecember 31,


Through


Through

Ended2007


2006


December 31, 2007


May 15, 2007

December 31, 2006Successor


Predecessor


Successor


Predecessor

PredecessorNet sales to Rexam as a percentage of total net sales



15.9
%



15.0
%



15.2
%



13.5
%


14.2
%   19.
    Supplemental
    Guarantor Information   48




---



##### Table of Contents



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


Guarantors


Guarantors


Eliminations


ConsolidatedNet sales


$
334


$
2,150


$
783


$
(532
)

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



335



1,929



737



(526
)


2,475Selling, general and administrative expenses



20



61



18







99Depreciation and amortization



6



91



8







105Research and development expenses



9



6



(4
)






11Interest expense and amortization of debt issuance
    costs  net



8



32



7







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



(8
)


50



8







50Equity in net (income) loss of affiliates



22



4







(22
)


4Other (income) expenses  net



(10
)


(12
)


12



(1
)


(11
)382



2,161



786



(549
)


2,780Income (loss) before provision for taxes on income (loss) and
    minority interests share



(48
)


(11
)


(3
)


17



(45
)Provision (benefit) for taxes on income (loss)



1



2



1







4Income (loss) before minority interests share



(49
)


(13
)


(4
)


17



(49
)Minority interests share



















Net income (loss)


$
(49
)

$
(13
)

$
(4
)

$
17


$
(49
)  49




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Novelis
    Inc.
  Consolidating
    Statement of Operations
    (In millions)
  Three Months Ended December 31, 2006
    (Predecessor)Non-Parent


Guarantors


Guarantors


Eliminations


ConsolidatedNet sales

$
368


$
2,031


$
736


$
(663
)

$
2,472Cost of goods sold (exclusive of depreciation and amortization
    shown below)


358



1,993



701



(666
)


2,386Selling, general and administrative expenses


25



76



16







117Depreciation and amortization


4



39



16







59Research and development expenses


8



4



(1
)






11Interest expense and amortization of debt issuance
    costs  net


15



38



4







57Loss on change in fair value of derivative
    instruments  net


30



(35
)










(5
)Equity in net (income) loss of affiliates


40



(4
)






(40
)


(4
)Other (income) expenses  net


(5
)


(7
)


3







(9
)475



2,104



739



(706
)


2,612Loss before provision (benefit) for taxes on loss and minority
    interests share


(107
)


(73
)


(3
)


43



(140
)Provision (benefit) for taxes on loss


(2
)


(36
)


4







(34
)Loss before minority interests share


(105
)


(37
)


(7
)


43



(106
)Minority interests share










1







1Net loss

$
(105
)

$
(37
)

$
(6
)

$
43


$
(105
)  50




---



##### Table of Contents



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


Guarantors


Guarantors


Eliminations


ConsolidatedNet sales

$
948


$
5,897


$
1,938


$
(1,680
)

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


947



5,363



1,836



(1,680
)


6,466Selling, general and administrative expenses


33



148



48







229Depreciation and amortization


14



203



43







260Research 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







72Equity in net (income) loss of affiliates


17



9







(17
)


9Other (income) expenses  net


(24
)


6



11







(7
)1,011



5,904



1,973



(1,697
)


7,191Income (loss) before provision for taxes on income (loss) and
    minority interests share


(63
)


(7
)


(35
)


17



(88
)Provision (benefit) for taxes on income (loss)


27



(24
)


1







4Income (loss) before minority interests share


(90
)


17



(36
)


17



(92
)Minority interests share










2







2Net income (loss)

$
(90
)

$
17


$
(34
)

$
17


$
(90
)  51




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Novelis
    Inc.
  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
)Equity in net (income) loss of affiliates


29



(1
)






(29
)


(1
)Sale transaction fees


32















32Other (income) expenses  net


(3
)


9



(2
)






4226



1,040



365



(256
)


1,375Loss before provision for taxes on loss and minority
    interests share


(97
)


(20
)


(6
)


29



(94
)Provision for taxes on loss






3



1







4Loss before minority interests share


(97
)


(23
)


(7
)


29



(98
)Minority interests share










1







1Net income (loss)

$
(97
)

$
(23
)

$
(6
)

$
29


$
(97
)  52




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Novelis
    Inc.
  Consolidating
    Statement of Operations
    (In millions)
  Nine Months Ended December 31, 2006
    (Predecessor)Non-Parent


Guarantors


Guarantors


Eliminations


ConsolidatedNet sales

$
1,202


$
6,380


$
2,149


$
(2,201
)

$
7,530Cost of goods sold (exclusive of depreciation and amortization
    shown below)


1,167



6,188



2,035



(2,208
)


7,182Selling, general and administrative expenses


59



206



53







318Depreciation and amortization


11



115



49







175Research and development expenses


22



9











31Interest expense and amortization of debt issuance
    costs  net


37



108



13







158(Gain) loss on change in fair value of derivative
    instruments  net


39



(54
)


6







(9
)Equity in net (income) loss of affiliates


84



(13
)






(84
)


(13
)Other (income) expenses  net


(18
)


14



(2
)






(6
)1,401



6,573



2,154



(2,292
)


7,836Loss before provision for taxes on income (loss) and minority
    interests share


(199
)


(193
)


(5
)


91



(306
)Provision (benefit) for taxes on income (loss)


2



(98
)


(10
)






(106
)Income (loss) before minority interests share


(201
)


(95
)


5



91



(200
)Minority interests share










(1
)






(1
)Net income (loss)

$
(201
)

$
(95
)

$
4


$
91


$
(201
)  53




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Novelis
    Inc.
  Consolidating
    Balance Sheet
 (In
    millions)
  As of December 31, 2007 (Successor)Non-Parent


Guarantors


Guarantors


Eliminations


ConsolidatedASSETSCurrent assetsCash and cash equivalents

$
3


$
97


$
33


$



$
133Accounts receivable  net of allowances third parties


37



854



444







1,335 related parties


520



234



18



(743
)


29Inventories


63



966



412







1,441Prepaid expenses and other current assets


5



29



14







48Current portion of fair value of derivative instruments


3



49



4



(2
)


54Deferred income tax assets






1



5







6Total current assets


631



2,230



930



(745
)


3,046Property, plant and equipment  net


185



2,433



755



(1
)


3,372Goodwill






1,980



194







2,174Intangible assets  net






873











873Investments


3,594



920







(3,594
)


920Fair value of derivative instruments  net of current
    portion






10











10Deferred income tax assets


5



1



1







7Other long-term assets


1,262



151



131



(1,410
)


134Total assets

$
5,677


$
8,598


$
2011


$
(5,750
)

$
10,536LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilitiesCurrent portion of long-term debt

$
3


$
10


$
1


$



$
14Short-term borrowings third parties


8



170



67







245 related parties


5



394



57



(456
)


Accounts payable third parties


72



703



548







1,323 related parties


88



200



56



(284
)


60Accrued expenses and other current liabilities


73



711



103



(6
)


881Deferred income tax liabilities






69



1







70Total current liabilities


249



2,257



833



(746
)


2,593Long-term debt  net of current portion third parties


1,763



694



102







2,559 related parties






1,147



263



(1,410
)


Deferred income tax liabilities


(6
)


674



17







685Accrued postretirement benefits


23



285



105







421Other long-term liabilities


171



469



19







6592,200



5,526



1,339



(2,156
)


6,909Commitments and contingenciesMinority interests in equity of consolidated affiliates










150







150Shareholders equityCommon stock


















Additional paid-in capital


3,497















3,497(Accumulated deficit)/retained earnings/owners net
    investment


(90
)


3,021



545



(3,566
)


(90
)Accumulated other comprehensive income


70



51



(23
)


(28
)


70Total shareholders equity


3,477



3,072



522



(3,594
)


3,477Total liabilities and shareholders equity

$
5,677


$
8,598


$
2,011


$
(5,750
)

$
10,536  54




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Novelis
    Inc.
  Consolidating
    Balance Sheet
 (In
    millions)
  As of March 31, 2007 (Predecessor)Non-Parent


Guarantors


Guarantors


Eliminations


ConsolidatedASSETSCurrent assetsCash and cash equivalents

$
6


$
71


$
51


$



$
128Accounts receivable  net of allowances third parties


36



903



411







1,350 related parties


416



500



58



(949
)


25Inventories


65



1,004



417



(3
)


1,483Prepaid expenses and other current assets


3



26



10







39Current portion of fair value of derivative instruments






88



4







92Deferred income tax assets


3



12



4







19Total current assets


529



2,604



955



(952
)


3,136Property, plant and equipment  net


112



1,229



765







2,106Goodwill






29



210







239Intangible assets  net






18



2







20Investments


362



153







(362
)


153Fair value of derivative instruments  net of current
    portion






55











55Deferred income tax assets


1



66



35







102Other long-term assets


1,231



160



132



(1,364
)


159Total assets

$
2,235


$
4,314


$
2,099


$
(2,678
)

$
5,970LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilitiesCurrent portion of long-term debt

$



$
3


$
140


$



$
143Short-term borrowings third parties






241



4







245 related parties


15



529



61



(605
)


Accounts payable third parties


116



938



560







1,614 related parties


69



240



84



(344
)


49Accrued expenses and other current liabilities


63



317



100







480Deferred income tax liabilities






73











73Total current liabilities


263



2,341



949



(949
)


2,604Long-term debt  net of current portion third parties


1,659



496



2







2,157 related parties






1,116



248



(1,364
)


Deferred income tax liabilities






89



14







103Accrued postretirement benefits


19



293



115







427Other long-term liabilities


119



214



19







3522,060



4,549



1,347



(2,313
)


5,643Commitments and contingenciesMinority interests in equity of consolidated affiliates










152







152Shareholders equityCommon stock


















Additional paid-in capital


428















428(Accumulated deficit)/retained earnings/owners net
    investment


(263
)


(458
)


575



(117
)


(263
)Accumulated other comprehensive income


10



223



25



(248
)


10Total shareholders equity


175



(235
)


600



(365
)


175Total liabilities and shareholders equity

$
2,235


$
4,314


$
2,099


$
(2,678
)

$
5,970  55




---



##### Table of Contents



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


Guarantors


Guarantors


Eliminations


ConsolidatedOPERATING ACTIVITIESNet cash provided by (used in) operating activities

$
200


$
(142
)

$
(27
)

$



$
31INVESTING 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
)


23



16







34Effect of exchange rate changes on cash balances held in
    foreign currencies










(3
)






(3
)Cash and cash equivalents  beginning of period


8



74



20







102Cash and cash equivalents  end of period

$
3


$
97


$
33


$



$
133  56




---



##### Table of Contents



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


Guarantors


Guarantors


Eliminations


ConsolidatedOPERATING ACTIVITIESNet cash 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 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  beginning of period


6



71



51







128Cash and cash equivalents  end of period

$
8


$
74


$
20


$



$
102  57




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Novelis
    Inc.
  Consolidating
    Statement of Cash Flows
 (In
    millions)
  Nine Months Ended December 31, 2006
    (Predecessor)Non-Parent


Guarantors


Guarantors


Eliminations


ConsolidatedOPERATING ACTIVITIESNet cash provided by (used in) operating activities

$
90


$
(154
)

$
39


$
(54
)

$
(79
)INVESTING ACTIVITIESCapital expenditures


(5
)


(59
)


(31
)






(95
)Cash advance received on pending transfer of rights


















Proceeds from sales of assets






36











36Changes to investment in and advances to non-consolidated
    affiliates






1











1Proceeds from loans receivable  net related parties


(12
)


(67
)


(28
)


137



30Net proceeds from settlement of derivative instruments


(34
)


202



(1
)






167Net cash provided by (used in) investing activities


(51
)


113



(60
)


137



139FINANCING ACTIVITIESProceeds from issuance of debt third parties










41







41 related parties






1300



460



(1,760
)


Principal repayments third parties


(54
)


(96
)


(91
)






(241
) related parties






(1,187
)


(397
)


(1,584
)


Short-term borrowings  net third parties






97











97 related parties






(3
)


3







Dividends common shareholders


(8
)


(90
)


(3
)


93



(8
) minority interests










(2
)






(2
)Net receipts from Alcan


5















5Debt issuance costs


(10
)














(10
)Proceeds from the exercise of stock options


2















2Net cash provided by (used in) financing activities


(65
)


21



11



(83
)


(116
)Net decrease in cash and cash equivalents


(26
)


(20
)


(10
)






(56
)Effect of exchange rate changes on cash balances held in
    foreign currencies






2



3







5Cash and cash equivalents  beginning of period


29



55



40







124Cash and cash equivalents  end of period

$
3


$
37


$
33


$



$
73  58




---



##### 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.
  REFERENCES
    Form 10-K Form 10-K
  GENERAL
    Acquisition
    of Novelis Common Stock
      Push Down Basis of Accounting Required in
    Certain Limited Circumstances
 59




---



##### Table of Contents



Business Combinations
  CHANGE IN
    FISCAL YEAR END
  Form 10-Q
  NOTE REGARDING
    COMBINED RESULTS OF OPERATIONS AND SELECTED FINANCIAL AND
    OPERATING INFORMATION DUE TO OUR ACQUISITION BY
    HINDALCO
      May 16, 2007



April 1, 2007


Nine MonthsThrough



Through


EndedDecember 31, 2007



May 15, 2007


December 31, 2007Successor



Predecessor


CombinedCombined Shipments:Shipments (kt)(A):Rolled products(B)


1,886




348



2,234Ingot products(C)


108




15



123Total shipments


1,994




363



2,357     (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. 60




---



##### Table of Contents



May 16, 2007Through



April 1, 2007


Nine MonthsDecember 31,



Through


Ended2007



May 15, 2007


December 31, 2007Successor



Predecessor


CombinedCombined Results of Operations ($ in millions)Net sales

$
7,103



$
1,281


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


6,466




1,205



7,671Selling, general and administrative expenses


229




95



324Depreciation and amortization


260




28



288Research and development expenses


34




6



40Interest expense and amortization of debt issuance
    costs  net


128




26



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


72




(20
)


52Equity in net (income) loss of non-consolidated affiliates


9




(1
)


8Sale transaction fees







32



32Other (income) expenses  net


(7
)



4



(3
)7,191




1,375



8,566Income (loss) before provision for taxes on income (loss) and
    minority interests share


(88
)



(94
)


(182
)Provision (benefit) for taxes on income (loss)


4




4



8Income (loss) before minority interests share


(92
)



(98
)


(190
)Minority interests share


2




1



3Net income (loss)

$
(90
)


$
(97
)

$
(187
)   HIGHLIGHTS
    
    Shipments and selected financial information are as follows ($
    in millions):  Quarter Ended


Nine Months EndedDecember 31,


December 31,2007



2006


2007


2006Successor



Predecessor


Combined


PredecessorShipments (kt):Rolled products


730




729



2,234



2,219Ingot products


42




38



123



122Total shipments


772




767



2,357



2,341Net sales

$
2,735



$
2,472


$
8,384


$
7,530Net income (loss)

$
(49
)


$
(105
)

$
(187
)

$
(201
)Net increase (decrease) in total debt(A)

$
3



$
(11
)

$
208


$
(92
)     (A)
    Net increase (decrease) in total debt is measured comparing the
    period-end amounts of our total outstanding debt (including
    short-term borrowings) as shown in our condensed consolidated
    balance sheets. For the three and nine months ended
    December 31, 2007, the net increase (decrease) in total
    debt excludes the change in unamortized fair value adjustments
    recorded as part of the Arrangement. 61




---



##### Table of Contents




    Rolled products shipments during the third quarter ended
    December 31, 2007 were flat year over year. Increased
    shipments in South America and Asia were due to increased demand
    in their local can markets which were offset by reductions in
    North America and Europe. North America saw continued shipment
    declines in the automotive, distributor and industrial markets,
    and Europe experienced minor reductions across several product
    lines. Year-to-date, rolled product shipments are up in every
    region except North America primarily as a result of increased
    demand in their respective regional can markets. Compared to the
    prior year, the North American demand for rolled products has
    declined most notably in the industrial and distributor markets
    partially due to a slowdown in housing construction.
    London Metal Exchange (LME) pricing for aluminum (metal) was an
    average of 10.3% and 1.4% lower during the third quarter and
    nine months ended December 31, 2007, respectively, than the
    comparable prior year periods. Cash prices have trended down
    this fiscal year and as of March 31, 2007; June 30,
    2007; September 30, 2007 and December 31, 2007 cash
    prices per metric tonne were $2,792; $2,686; $2,440 and $2,360,
    respectively. This trend negatively impacted our fiscal 2008
    third quarter and nine month results as described more fully
    below under Metal Price Lag.
    During the third quarter of fiscal 2008 and the comparable prior
    year quarter, we were unable to pass through approximately
    $45 million and $125 million, respectively, of metal
    purchase costs associated with sales under contracts with metal
    price ceilings (described more fully below), for a net favorable
    comparable impact of approximately $80 million.      
    Compared to the nine months ended December 31, 2006, net
    loss for the nine months ended December 31, 2007 was
    impacted by the following pre-tax items associated with or
    triggered by the Arrangement: (1) $43 million of
    incremental stock compensation expense,
    (2) $32 million of sale transaction fees and
    (3) $18 million of incremental income associated with
    push-down accounting and the preliminary allocation of purchase
    price.
    During the third quarter of fiscal 2008 and on a year-to-date
    basis, our total debt increased by $3 million and
    $208 million (excluding unamortized fair value adjustments
    recorded as part of the acquisition by Hindalco), respectively.
    The year-to-date increase in debt was driven primarily by our
    need to fund additional working capital requirements as well as
    certain costs associated with or triggered by the Arrangement
    that were in excess of the additional $92 million of equity
    contributed by Hindalco. 62




---



##### Table of Contents




    As described more fully in Note 2  Acquisition
    of Novelis Common Stock in the accompanying condensed and
    consolidated financial statements, the consideration paid by
    Hindalco to acquire Novelis has been pushed down to us and
    allocated to the assets acquired and liabilities assumed based
    on our estimates of fair value, using methodologies and
    assumptions that we believe are reasonable. This allocation of
    fair value results in additional charges or income to our
    post-acquisition consolidated statements of operations. A
    summary of the pre-tax impacts of these items on pre-tax income
    and Segment Income for the third quarter and nine months ended
    December 31, 2007 is shown below (in millions).  Quarter Ended


Nine Months EndedDecember 31,


December 31,2007


2007Increase (Decrease) to:


Increase (Decrease) to:Pre-Tax


Segment


Pre-Tax


SegmentIncome


Income(A)


Income


Income(A)Metal price ceiling contracts

$
76


$
76


$
205


$
205Other favorable/unfavorable contracts


(2
)


(2
)


(5
)


(5
)Depreciation and amortization


(48
)






(113
)


In-process research and development










(9
)


(9
)Inventory










(35
)


(35
)Equity investments


(15
)






(26
)


Fair value of debt


(3
)






1



Total impact

$
8


$
74


$
18


$
156     (A)
    We use Segment Income to measure the profitability and financial
    performance of our operating segments, as discussed below in
    OPERATING SEGMENT REVIEW.  OUR
    BUSINESS
  Business
    Model and Key Concepts
    Metal
    Price Ceilings
     63




---



##### Table of Contents



and/or
  Metal
    Price Lag
          Accounting for Derivative Instruments and Hedging Activities.
 64




---



##### Table of Contents



Internal
    Controls
  Form 10-K
  Spin-Off
    from Alcan
    Post-Transaction
    Adjustments
    Agreements
    between Novelis and Alcan
  Form 10-K
  OPERATIONS
    AND SEGMENT REVIEW
    Nine MonthsQuarter Ended





EndedDecember 31,


Percent


December 31,


Percent2007



2006


Change


2007


2006


ChangeSuccessor



Predecessor





Combined


PredecessorShipments (kt):Rolled products, including tolling (the conversion of
    customer-owned metal)


730




729



0.1
%


2,234



2,219



0.7
%Ingot products, including primary and secondary ingot and
    recyclable aluminum


42




38



10.5
%


123



122



0.8
%Total shipments


772




767



0.7
%


2,357



2,341



0.7
%   65




---



##### Table of Contents



Quarter Ended





Nine Months EndedDecember 31,


Percent


December 31,


Percent2007



2006


Change


2007


2006


ChangeSuccessor



Predecessor





Combined


PredecessorResults of Operations ($ in millions)Net sales

$
2,735



$
2,472



10.6
%

$
8,384


$
7,530



11.3
%Cost of goods sold (exclusive of depreciation and amortization
    shown below)


2,475




2,386



3.7
%


7,671



7,182



6.8
%Selling, general and administrative expenses


99




117



(15.4
)%


324



318



1.9
%Depreciation and amortization


105




59



78.0
%


288



175



64.6
%Research and development expenses


11




11




%


40



31



29.0
%Interest expense and amortization of debt issuance
    costs  net


47




57



(17.5
)%


154



158



(2.5
)%(Gain) loss on change in fair value of derivatives 
    net


50




(5
)


(1,100.0
)%


52



(9
)


(677.8
)%Equity in net (income) loss of non-consolidated affiliates


4




(4
)


(200.0
)%


8



(13
)


(161.5
)%Sale transaction fees












%


32







n.m.Other (income) expenses  net


(11
)



(9
)


22.2
%


(3
)


(6
)


(50.0
)%2,780




2,612



6.4
%


8,566



7,836



9.3
%Income (loss) before provision (benefit) for taxes on income
    (loss) and minority interests share


(45
)



(140
)


(67.9
)%


(182
)


(306
)


(40.5
)%Provision (benefit) for taxes on income (loss)


4




(34
)


(111.8
)%


8



(106
)


(107.5
)%Income (loss) before minority interests share


(49
)



(106
)


(53.8
)%


(190
)


(200
)


(5.0
)%Minority interests share







1



(100.0
)%


3



(1
)


(400.0
)%Net income (loss)

$
(49
)


$
(105
)


(53.3
)%

$
(187
)

$
(201
)


(7.0
)%       Quarter Ended





Nine Months EndedDecember 31,


Percent


December 31,


Percent2007



2006


Change


2007


2006


ChangeSuccessor



Predecessor





Combined


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

$
2,360



$
2,850



(17.2
)%

$
2,360


$
2,850



(17.2
)%Average cash price during the period

$
2,444



$
2,724



(10.3
)%

$
2,584


$
2,620



(1.4
)%   66




---



##### Table of Contents



Nine MonthsQuarter Ended


U.S. Dollar


Ended


U.S. DollarDecember 31,


Strengthen/


December 31,


Strengthen/2007



2006


(Weaken)


2007


2006


(Weaken)Successor



Predecessor





Combined


PredecessorFederal Reserve Bank of New York Exchange RatesAverage of the month end rates:U.S. dollar per Euro


1.459




1.308



(11.5
)%


1.400



1.286



(8.9
)%Brazilian real per U.S. dollar


1.766




2.145



(17.7
)%


1.873



2.164



(13.4
)%South Korean won per U.S. dollar


920




934



(1.5
)%


924



944



(2.1
)%Canadian dollar per U.S. dollar


0.979




1.143



(14.3
)%


1.033



1.124



(8.1
)%   Quarter Ended





Nine Months EndedDecember 31,


Percent


December 31,


Percent2007



2006


Change


2007


2006


ChangeSuccessor



Predecessor





Combined


PredecessorNew York Mercantile Exchange  Energy Price
    QuotationsLight Sweet CrudeAverage settlement price (per barrel)

$
88.60



$
59.84



48.1
%

$
73.81


$
66.21



11.5
%Natural GasAverage Henry Hub contract settlement price (per MMBTU)(A)

$
6.97



$
6.56



6.3
%

$
6.89


$
6.64



3.8
%     (A)
    One MMBTU is the equivalent of one decatherm, or one million
    British Thermal Units.  RESULTS
    OF OPERATIONS FOR THE QUARTER ENDED DECEMBER 31, 2007 COMPARED
    TO THE QUARTER ENDED DECEMBER 31, 2006
  Shipments
    Net
    sales
     67




---



##### Table of Contents



Costs
    and Expenses
    Quarter Ended December 31,2007



2006% of






% of$ in Millions


Net Sales



$ in Millions


Net SalesSuccessor



PredecessorCost of goods sold (exclusive of depreciation and amortization
    shown below)

$
2,475



90.5
%


$
2,386



96.5
%Selling, general and administrative expenses


99



3.6
%



117



4.7
%Depreciation and amortization


105



3.8
%



59



2.4
%Research and development expenses


11



0.4
%



11



0.4
%Interest expense and amortization of debt issuance
    costs  net


47



1.7
%



57



2.3
%(Gain) loss on change in fair value of derivative instruments
     net


50



1.8
%



(5
)


(0.2
)%Equity in net income (loss) of non-consolidated affiliates


4



0.1
%



(4
)


(0.2
)%Other (income) expenses  net


(11
)


(0.4
)%



(9
)


(0.4
)%$
2,780



101.6
%


$
2,612



105.7
%   Cost of goods sold.
  Selling, general and administrative expenses
    (SG&A).
  Depreciation and amortization.
  Interest expense and amortization of debt issuance
    costs  net.
  Other (income) expenses  net.
  Other(Income)Expenses  NetOther (income) expenses  net for the quarter ended
    December 31, 2006(Predecessor)

$
(9
)Exchange gains of $12 million in fiscal 2008 compared to
    losses of $7 million in 2006


(19
)Restructuring charges  net of $1 million in
    fiscal 2008 compared to $6 million in 2006


(5
)Gain on sale of equity interest in non-consolidated affiliate in
    2006 only


15Gain on sale of rights to develop and operate hydroelectric
    power plants in 2006 only


11Losses on disposals of property, plant and equipment 
    net in 2006 only


(4
)Other (income) expenses  net for the quarter ended
    December 31, 2007(Successor)

$
(11
)  68




---



##### Table of Contents



Provision
    (benefit) for taxes on income (loss)
      OPERATING
    SEGMENT REVIEW FOR THE QUARTER ENDED DECEMBER 31, 2007 COMPARED
    TO THE QUARTER ENDED DECEMBER 31, 2006
      Disclosure About the Segments of
    an Enterprise and Related Information.
  Form 10-K
   69




---



##### Table of Contents



Reconciliation
    Quarter EndedDecember 31,2007



2006Successor



PredecessorSegment Income (Loss)North America

$
83



$
(42
)Europe


45




43Asia


10




14South America


34




44Total Segment Income


172




59Interest expense and amortization of debt issuance
    costs  net


(47
)



(57
)Unrealized gains (losses) on change in fair value of derivative
    instruments  net(A)


(24
)



(16
)Realized gains (losses) on corporate derivative
    instruments  net


2




(35
)Depreciation and amortization


(105
)



(59
)Minority interests share







1Adjustment to eliminate proportional consolidation(B)


(18
)



(9
)Restructuring charges  net


(1
)



(6
)Gains or (losses) on disposal of property, plant, and
    equipment  net







(4
)Corporate selling, general and administrative expenses


(17
)



(39
)Other costs  net(C)


(7
)



26Benefit (provision) for taxes on income (loss)


(4
)



34Net income (loss)

$
(49
)


$
(105
)     (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.(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 affiliates on our condensed
    consolidated statements of operations. See
    Note 7  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 gain on sale of equity
    interest in non-consolidated affiliates and gains on sale of
    rights to develop and operate hydroelectric power plants,
    recognized in the three months ended December 31, 2006 (see
    Note 15  Other (Income) Expenses 
    net). 70




---



##### Table of Contents



OPERATING
    SEGMENT RESULTS
  North
    America
      Quarter EndedDecember 31,


Percent2007



2006


ChangeSuccessor



PredecessorShipments (kt):Rolled products


269




273



(1.5
)%Ingot products


13




14



(7.1
)%Total shipments


282




287



(1.7
)%Net sales

$
995



$
850



17.1
%Segment Income (Loss)

$
83



$
(42
)


(297.6
)%Total assets

$
3,847



$
1,476



160.6
%   Shipments
    Net
    sales
    Segment
    Income
    Total
    assets
   71




---



##### Table of Contents



Europe
      Quarter EndedDecember 31,


Percent2007



2006


ChangeSuccessor



PredecessorShipments (kt):Rolled products


244




258



(5.4
)%Ingot products


13




3



333.3
%Total shipments


257




261



(1.5
)%Net sales

$
1,010



$
932



8.4
%Segment Income

$
45



$
43



4.7
%Total assets

$
4,235



$
2,474



71.2
%   Shipments
    Net
    sales
    Segment
    Income
    Total
    assets
   72




---



##### Table of Contents



Asia
    Quarter EndedDecember 31,


Percent2007



2006


ChangeSuccessor



PredecessorShipments (kt):Rolled products


134




124



8.1
%Ingot products


9




13



(30.8
)%Total shipments


143




137



4.4
%Net sales

$
483



$
457



5.7
%Segment Income

$
10



$
14



(28.6
)%Total assets

$
1,078



$
1,078




%   Shipments
    Net
    sales
    Segment
    Income
    Total
    assets
    South
    America
   73




---



##### Table of Contents



Quarter EndedDecember 31,


Percent2007



2006


ChangeSuccessor



PredecessorShipments (kt):Rolled products


83




74



12.2
%Ingot products


6




8



(25.0
)%Total shipments


89




82



8.5
%Net sales

$
247



$
237



4.2
%Segment Income

$
34



$
44



(22.7
)%Total assets

$
1,456



$
821



77.3
%   Shipments
    Net
    sales
    Segment
    Income
    Total
    assets
    RESULTS
    OF OPERATIONS FOR THE NINE MONTHS ENDED DECEMBER 31, 2007 (ON A
    COMBINED NON-GAAP BASIS) COMPARED TO THE NINE MONTHS ENDED
    DECEMBER 31, 2006
    Shipments
   74




---



##### Table of Contents



Net
    sales
      Costs
    and expenses
    Nine Months Ended December 31,2007


2006% of





% of$ in Millions


Net Sales


$ in Millions


Net SalesCombined


PredecessorCost of goods sold (exclusive of depreciation and amortization
    shown below)

$
7,671



91.5
%

$
7,182



95.4
%Selling, general and administrative expenses


324



3.9
%


318



4.2
%Depreciation and amortization


288



3.4
%


175



2.3
%Research and development expenses


40



0.5
%


31



0.4
%Interest expense and amortization of debt issuance
    costs  net


154



1.8
%


158



2.1
%(Gain) loss on change in fair value of derivative instruments
     net


52



0.6
%


(9
)


(0.1
)%Equity in net income (loss) of non-consolidated affiliates


8



0.1
%


(13
)


(0.1
)%Sale transaction fees


32



0.4
%







%Other (income) expenses  net


(3
)


(0.0
)%


(6
)


(0.1
)%$
8,566



102.2
%

$
7,836



104.1
%   Cost of goods sold.
  Selling, general and administrative
    expenses.
 75




---



##### Table of Contents



Depreciation and amortization.
  Research and development expenses.
  Sale transaction fees.
  Other income (expenses).
  Other(Income)Expenses  NetOther (income) expenses  net for the nine months
    ended December 31, 2006(Predecessor)

$
(6
)Exchange losses of $1 million in fiscal 2008 compared to
    gains of $3 million in 2006


4Restructuring charges  net of $3 million in
    fiscal 2008 compared to $18 million in 2006


(15
)Gain on sale of equity interest in non-consolidated affiliate in
    2006 only


15Gain on sale of rights to develop and operate hydroelectric
    power plants in 2006 only


11Losses on disposals of property, plant and equipment 
    net in 2006 only


(6
)Other  net


(6
)Other (income) expenses  net for the nine months
    ended December 31, 2007(Successor)

$
(3
)   Provision
    (benefit) for taxes on income (loss)
     76




---



##### Table of Contents



OPERATING
    SEGMENT REVIEW FOR THE NINE MONTHS ENDED DECEMBER 31, 2007 (ON A
    COMBINED NON-GAAP BASIS) COMPARED TO THE NINE MONTHS ENDED
    DECEMBER 31, 2006
    Net
    sales
    May 16, 2007



April 1, 2007


Nine MonthsThrough



Through


EndedDecember 31,



May 15,


December 31,2007



2007


2007Successor



Predecessor


CombinedCombined Net sales by Operating Segment:North America

$
2,619



$
446


$
3,065Europe


2,695




510



3,205Asia


1,167




216



1,383South America


622




109



731Total Net sales

$
7,103



$
1,281


$
8,384  77




---



##### Table of Contents



Segment
    Income
    May 16, 2007



April 1, 2007


Nine MonthsThrough



Through


EndedDecember 31,



May 15,


December 31,2007



2007


2007Successor



Predecessor


CombinedCombined Results by Operating Segment:Segment Income (Loss)North America

$
195



$
(24
)

$
171Europe


155




32



187Asia


26




6



32South America


100




18



118Total Segment Income


476




32



508Interest expense and amortization of debt issuance
    costs  net


(128
)



(26
)


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


(126
)



5



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


39




(3
)


36Depreciation and amortization


(260
)



(28
)


(288
)Minority interests share


2




1



3Adjustment to eliminate proportional consolidation


(44
)



(7
)


(51
)Restructuring charges  net


(2
)



(1
)


(3
)Corporate selling, general and administrative expenses


(41
)



(35
)


(76
)Other costs  net


(2
)



1



(1
)Sale transaction fees







(32
)


(32
)Benefit (provision) for taxes on income (loss)


(4
)



(4
)


(8
)Net income (loss)

$
(90
)


$
(97
)

$
(187
)  78




---



##### Table of Contents



Reconciliation
    Nine Months EndedDecember 31,2007


2006Combined


PredecessorSegment Income (Loss)North America

$
171


$
(37
)Europe


187



191Asia


32



56South America


118



125Total Segment Income


508



335Interest expense and amortization of debt issuance
    costs  net


(154
)


(158
)Unrealized losses on change in fair value of derivative
    instruments  net


(121
)


(151
)Realized gains (losses) on corporate derivative
    instruments  net


36



(35
)Depreciation and amortization


(288
)


(175
)Minority interests share


3



(1
)Adjustment to eliminate proportional consolidation


(51
)


(27
)Restructuring charges  net


(3
)


(18
)Gains (losses) on disposal of property, plant, and equipment
     net






(6
)Corporate selling, general and administrative expenses


(76
)


(101
)Other costs  net


(1
)


30Sale transaction fees


(32
)


Benefit (provision) for taxes on income (loss)


(8
)


106Net income (loss)

$
(187
)

$
(201
)   OPERATING
    SEGMENT RESULTS
  North
    America
    Nine Months EndedDecember 31,2007


2006


ChangeCombined


PredecessorShipments (kt):Rolled products


826



867



(4.7
)%Ingot products


46



56



(17.9
)%Total shipments


872



923



(5.5
)%Net sales

$
3,065


$
2,796



9.6
%Segment Income (Loss)

$
171


$
(37
)


(562.2
)%   Shipments
   79




---



##### Table of Contents



Net
    sales
    Segment
    Income (Loss)
    Europe
    Nine Months EndedDecember 31,


Percent2007


2006


ChangeCombined


PredecessorShipments (kt):Rolled products


803



789



1.8
%Ingot products


25



10



150.0
%Total shipments


828



799



3.6
%Net sales

$
3,205


$
2,794



14.7
%Segment Income

$
187


$
191



(2.1
)%   Shipments
    Net
    sales
   80




---



##### Table of Contents



Segment
    Income
    Asia
    Nine Months EndedDecember 31,


Percent2007


2006


ChangeCombined


PredecessorShipments (kt):Rolled products


368



353



4.2
%Ingot products


31



35



(11.4
)%Total shipments


399



388



2.8
%Net sales

$
1,383


$
1,298



6.5
%Segment Income

$
32


$
56



(42.9
)%   Shipments
    Net
    sales
    Segment
    Income
   81




---



##### Table of Contents



South
    America
    Nine Months EndedDecember 31,


Percent2007


2006


ChangeCombined


PredecessorShipments (kt):Rolled products


237



210



12.9
%Ingot products


20



21



(4.8
)%Total shipments


257



231



11.3
%Net sales

$
731


$
654



11.8
%Segment Income

$
118


$
125



(5.6
)%   Shipments
    Net
    sales
    Segment
    Income
    LIQUIDITY
    AND CAPITAL RESOURCES
   82




---



##### Table of Contents



May 16, 2007



April 1, 2007


NineThrough



Through


Months EndedDecember 31, 2007



May 15, 2007


December 31, 2007Successor



Predecessor


CombinedOPERATING ACTIVITIESNet cash provided by (used in) operating activities

$
31



$
(230
)


$(199)INVESTING ACTIVITIESCapital expenditures


(120
)



(17
)


(137
)Proceeds from sales of assets


4








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


5




1



6Proceeds from loans receivable  net 
    related parties


12








12Net proceeds from settlement of derivative instruments


56




18



74Net cash provided by (used in) investing activities


(43
)



2



(41
)FINANCING ACTIVITIESProceeds from issuance of common stock


92








92Proceeds from issuance of debt


1,100




150



1,250Principal repayments


(1,005
)



(1
)


(1,006
)Short-term borrowings  net


(103
)



60



(43
)Dividends  minority interests


(1
)



(7
)


(8
)Debt issuance costs


(37
)



(2
)


(39
)Proceeds from the exercise of stock options







1



1Net cash provided by (used in) financing activities


46




201



247Net increase (decrease) in cash and cash equivalents


34




(27
)


7Effect of exchange rate changes on cash balances held in
    foreign currencies


(3
)



1



(2
)Cash and cash equivalents  beginning of period


102




128



230Cash and cash equivalents  end of period

$
133



$
102



$235   Operating
    Activities
   83




---



##### Table of Contents



Nine Months EndedDecember 31,2007


2006


ChangeCombined


PredecessorNet cash used in (provided by) operating activities

$
(199
)

$
(79
)

$
(120
)Dividends


(8
)


(10
)


2Capital expenditures


(137
)


(95
)


(42
)Net proceeds from settlement of derivative instruments


74



167



(93
)Free cash flow

$
(270
)

$
(17
)

$
(253
)   As ofDecember 31,


March 31,2007


2007

ChangeSuccessor


PredecessorEnding balances of cash and cash equivalents

$
133



$
128


$
5     Financing
    Activities
  Overview
   84




---



##### Table of Contents



New
    Senior Secured Credit Facilities
    Other
    long-term assets  third parties
             85




---



##### Table of Contents



Other long-term assets 
    third parties Interest expense and amortization of
    debt issuance costs  net
    3-month
    Old
    Senior Secured Credit Facilities
           86




---



##### Table of Contents



Other long-term
    assets  third parties Interest expense
    and amortization of debt issuance costs  net
  7.25% Senior
    Notes
  Other
    long-term assets  third parties Interest
    expense and amortization of debt issuance costs  net
  Interest expense and
    amortization of debt issuance costs  net
     87




---



##### Table of Contents



Tender
    Offer and Consent Solicitation for 7.25% Senior
    Notes
    Korean
    Bank Loans
      Short
    Term Borrowings and Lines of Credit
      Issuance
    of Additional Common Stock
   88




---



##### Table of Contents



Investing
    Activities
    Nine Months EndedDecember 31,2007


2006


ChangeCombined


PredecessorNet proceeds from settlement of derivative instruments

$
74


$
167


$
(93
)Capital expenditures


(137
)


(95
)


(42
)Proceeds from loans receivable  net


12



30



(18
)Changes to investment in and advances to non-consolidated
    affiliates


6



1



5Proceeds from sales of assets


4



36



(32
)Net cash provided by (used in) investing activities

$
(41
)

$
139


$
(180
)       OFF-BALANCE
    SHEET ARRANGEMENTS
    
    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;
    any obligation under certain derivative instruments; 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
  Form 10-Q.
     89




---



##### Table of Contents



Prior to
    Completion of the Arrangement
      Impact of
    the Arrangement and Purchase Accounting
    Subsequent
    to Completion of the Arrangement
       90




---



##### Table of Contents



As of December 31, 2007Maturity Dates







Net Fair(Fiscal Year)

Assets


Liabilities


ValueSuccessor:Foreign exchange forward contracts

2008 through 2012

$
38


$
(59
)

$
(21
)Cross-currency swaps

2008 through 2015


3



(136
)


(133
)Interest rate currency swaps

2009 through 2011


1



(1
)


Interest rate swaps

2009 through 2010






(2
)


(2
)Aluminum forward contracts

2008 through 2010


1



(52
)


(51
)Electricity swap

2017


7



(1
)


6Embedded derivative instruments

2008 through 2009


14







14Natural gas swaps

2008 through 2010






(1
)


(1
)Total fair value




64



(252
)


(188
)Less: current portion




54



(112
)


(58
)Noncurrent portion



$
10


$
(140
)

$
(130
)   Guarantees
    of Indebtedness
    Maximum

LiabilityPotential Future

CarryingType of Entity

Payment

ValueWholly-owned subsidiaries

$
85


$
60Aluminium Norf GmbH


15



   deposit-and-guarantee
    Other
    CONTRACTUAL
    OBLIGATIONS
  Form 10-K
   91




---



##### Table of Contents



DIVIDENDS
    CRITICAL
    ACCOUNTING POLICIES AND ESTIMATES
  Form 10-K
  RECENT
    ACCOUNTING STANDARDS
  Business Combinations Accounting for Income Taxes
  Noncontrolling Interests in Consolidated Financial
    Statements
  No. FIN 39-1, Amendment of FASB Interpretation No 39 FIN 39-1). FIN 39-1 Offsetting of Amounts
    Related to Certain Contracts FIN 39-1 FIN 39-1
 92




---



##### Table of Contents



The Fair Value Option for Financial Assets and Financial
    Liabilities Fair Value
    Measurements Disclosures about Fair
    Value of Financial Instruments.
  Fair Value Measurements
    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; 93




---



##### Table of Contents




    the effect of metal price ceilings in certain of our sales
    contracts;
    the 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;
    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
  Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk         94




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##### Table of Contents



Commodity
    Price Risks
    Aluminum
            and/or
   95




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##### Table of Contents



Sensitivities
    Pre-TaxDecline in

Loss inRate/Price

Fair Value($ in millions)Aluminum Forward Contracts


10
%

$
(85
)   Electricity
    and Natural Gas
        Sensitivities
    Pre-TaxDecline in

Loss inRate/Price

Fair Value($ in millions)Electricity


10
%

$
(6
)Natural Gas


10
%


(4
)   Foreign
    Currency Exchange Risks
    non-U.S. dollar
 96




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##### Table of Contents



Form 10-K
  Sensitivities
    Pre-TaxIncrease (Decrease) in


Loss inExchange Rate


Fair Value($ in millions)Currency measured against the U.S. dollarEuro


10
%

$
(15
)Korean won


10
%


(19
)Brazilian real


10
%


(22
)Canadian dollar


(10
)%


(1
)British pound


10
%


(2
)Swiss franc


10
%


(26
)   Pre-TaxIncrease (Decrease) in


Loss inExchange Rate


Fair Value($ in millions)Other cross-currency exchange ratesSwiss franc measured against the euro


(10
)%

$
(31
)British pound measured against the euro


(10
)%


(21
)    97




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##### Table of Contents



Pre-TaxIncrease in


Loss inRate


Fair Value($ in millions)Currency measured against the U.S. dollarEuro


10
%

$
(83
)British pound


10
%


(15
)Swiss franc


10
%


(4
)   Interest
    Rate Risks
        Sensitivities
    Pre-TaxDecrease in


Loss inRate


Fair Value($ in millions)Interest Rate Swap ContractsNorth America


(10
)%

$
(5
)Asia


(10
)%


   Item 4.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
    Form 10-Q Rule 13a-15(e) Form 10-K
 98




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##### Table of Contents



Changes
    in Internal Control Over Financial Reporting
      Rule 13a-15(f)
  Remediation
    Plan for Material Weakness Existing as of December 31,
    2007
  Form 10-K
 99




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##### Table of Contents



PART II.
    OTHER INFORMATION  Item 1.
    Legal
    Proceedings  Reynolds Boat Case.
    Form 10-K
      Coca-Cola
    Lawsuits. Coca-Cola Coca-Cola Coca-Cola Coca-Cola
  Coca-Cola Coca-Cola
 100




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##### Table of Contents



Anheuser-Busch Litigation.
        ARCO Aluminum Complaint.
       101




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##### Table of Contents



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) (File No. 001-32316)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

By-law No. 1 of Novelis Inc. (incorporated by reference to
    Exhibit 3.2 to the Form 10 filed by Novelis Inc. on November 17,
    2004 (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
    71/4% 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 filed on February 13, 2007) (File No. 001-32312)10
.1

$800 million asset-based lending credit facility (ABL
    Facility) dated as of July 6, 2007 among Novelis Inc.,
    Novelis Corporation as U.S. Borrower, the other U.S.
    Subsidiaries of Novelis Inc., Novelis UK Ltd, Novelis AG, AV
    Aluminum Inc. as parent guarantor, the other guarantors party
    thereto, with the lenders party thereto, ABN AMRO Bank N.V., as
    U.S./European issuing bank, swingline lender and administrative
    agent, LaSalle Business Credit, LLC, as collateral agent and
    funding agent, UBS Securities LLC, as syndication agent, Bank of
    America, N.A., National City Business Credit, Inc. and CIT
    Business Credit Canada Inc., as documentation agents, ABN AMRO
    Bank N.V. Canada Branch, as Canadian issuing bank, Canadian
    funding agent and Canadian administrative agent, and ABN AMRO
    Incorporated and UBS Securities LLC, as joint lead arrangers and
    joint book managers (incorporated by reference to Exhibit 10.1
    to our Quarterly Report on Form 10-Q for the period ended
    September 30, 2007 filed on November 9, 2007) (File No.
    001-32312)10
.2

$960 million term loan facility (Term Loan Facility)
    dated as of July 6, 2007 among Novelis Inc., Novelis Corporation
    as U.S. Borrower, AV Aluminum Inc., As Holdings, and the other
    guarantors party thereto, with the lenders party thereto, UBS
    AG, Stamford Branch, as administrative agent and as collateral
    agent, UBS Securities LLC, as syndication agent, ABN AMRO
    Incorporated, as documentation agent, and UBS Securities LLC and
    ABN AMRO Incorporated as joint lead arrangers and joint book
    managers (incorporated by reference to Exhibit 10.2 to our
    Quarterly Report on Form 10-Q for the period ended September 30,
    2007 filed on November 9, 2007) (File No. 001-32312)10
.3

Intercreditor Agreement dated as of July 6, 2007 by and among
    Novelis Inc., Novelis Corporation, Novelis PAE Corporation,
    Novelis Finances USA LLC, Novelis South America Holdings LLC,
    Aluminum Upstream Holdings LLC, Novelis UK Ltd, Novelis AG, AV
    Aluminum Inc., and the subsidiary guarantors party thereto, as
    grantors, ABN AMRO BANK N.V., as revolving credit administrative
    agent ABN AMRO Bank N.A., acting through its Canadian branch, as
    revolving credit Canadian administrative agent and as revolving
    credit Canadian funding agent, La Salle Business Credit,
    LLC, as revolving credit collateral agent and as revolving
    credit funding agent, and UBS AG, Stamford Branch, as Term Loan
    administrative agent, and Term Loan collateral agent
    (incorporated by reference to Exhibit 10.3 to our Quarterly
    Report on Form 10-Q for the period ended September 30, 2007
    filed on November 9, 2007) (File No. 001-32312)10
.4

Security Agreement made by Novelis Inc., as Canadian Borrower,
    Novelis Corporation, as U.S. Borrower and the guarantors from
    time to time party thereto in favor of UBS AG, Stamford branch,
    as collateral agent dated as of July 6, 2007 (incorporated by
    reference to Exhibit 10.4 to our Quarterly Report on Form 10-Q
    for the period ended September 30, 2007 filed on November 9,
    2007) (File No. 001-32312) 102




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##### Table of Contents



ExhibitNo.

Description10
.5

Security Agreement made by Novelis Inc., as Canadian Borrower,
    Novelis Corporation, Novelis PAE Corporation, Novelis Finances
    USA LLC, Novelis South America Holdings LLC, Aluminum Upstream
    Holdings LLC, as U.S. Borrowers and the guarantors from time to
    time party thereto in favor of La Salle Business Credit,
    LLC, as collateral agent dated as of July 6, 2007 (incorporated
    by reference to Exhibit 10.5 to our Quarterly Report on Form
    10-Q for the period ended September 30, 2007 filed on November
    9, 2007) (File No. 001-32312)10
.6

Agreement Regarding Termination of Employment between Novelis
    Inc. and David Godsell dated as of November 12, 200710
.7

Separation and Release Agreement between Novelis Inc. and David
    Godsell dated November 12, 200718
.1

Preferability Letter Issued by PricewaterhouseCoopers LLP31
.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  103




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##### Table of Contents



SIGNATURES
      By:
    /s/  Steven
    Fisher      By:
    /s/  Jeffrey
    Schwaneke       104




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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

By-law No. 1 of Novelis Inc. (incorporated by reference to
    Exhibit 3.2 to the Form 10 filed by Novelis Inc. on November 17,
    2004 (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
    71/4% 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 filed on February 13, 2007) (incorporated by reference
    to our Current Report on Form 8-K filed on February 13, 2007)
    (File No. 001-32312)10
.1

$800 million asset-based lending credit facility (ABL
    Facility) dated as of July 6, 2007 among Novelis Inc.,
    Novelis Corporation as U.S. Borrower, the other U.S.
    Subsidiaries of Novelis Inc., Novelis UK Ltd, Novelis AG, AV
    Aluminum Inc. as parent guarantor, the other guarantors party
    thereto, with the lenders party thereto, ABN AMRO Bank N.V., as
    U.S./European issuing bank, swingline lender and administrative
    agent, LaSalle Business Credit, LLC, as collateral agent and
    funding agent, UBS Securities LLC, as syndication agent, Bank of
    America, N.A., National City Business Credit, Inc. and CIT
    Business Credit Canada Inc., as documentation agents, ABN AMRO
    Bank N.V. Canada Branch, as Canadian issuing bank, Canadian
    funding agent and Canadian administrative agent, and ABN AMRO
    Incorporated and UBS Securities LLC, as joint lead arrangers and
    joint book managers (incorporated by reference to Exhibit 10.1
    to our Quarterly Report on Form 10-Q for the period ended
    September 30, 2007 filed on November 9, 2007) (File No.
    001-32312)10
.2

$960 million term loan facility (Term Loan Facility)
    dated as of July 6, 2007 among Novelis Inc., Novelis Corporation
    as U.S. Borrower, AV Aluminum Inc., As Holdings, and the other
    guarantors party thereto, with the lenders party thereto, UBS
    AG, Stamford Branch, as administrative agent and as collateral
    agent, UBS Securities LLC, as syndication agent, ABN AMRO
    Incorporated, as documentation agent, and UBS Securities LLC and
    ABN AMRO Incorporated as joint lead arrangers and joint book
    managers (incorporated by reference to Exhibit 10.2 to our
    Quarterly Report on Form 10-Q for the period ended September 30,
    2007 filed on November 9, 2007) (File No. 001-32312)10
.3

Intercreditor Agreement dated as of July 6, 2007 by and among
    Novelis Inc., Novelis Corporation, Novelis PAE Corporation,
    Novelis Finances USA LLC, Novelis South America Holdings LLC,
    Aluminum Upstream Holdings LLC, Novelis UK Ltd, Novelis AG, AV
    Aluminum Inc., and the subsidiary guarantors party thereto, as
    grantors, ABN AMRO BANK N.V., as revolving credit administrative
    agent ABN AMRO Bank N.A., acting through its Canadian branch, as
    revolving credit Canadian administrative agent and as revolving
    credit Canadian funding agent, La Salle Business Credit,
    LLC, as revolving credit collateral agent and as revolving
    credit funding agent, and UBS AG, Stamford Branch, as Term Loan
    administrative agent, and Term Loan collateral agent
    (incorporated by reference to Exhibit 10.3 to our Quarterly
    Report on Form 10-Q for the period ended September 30, 2007
    filed on November 9, 2007) (File No. 001-32312)10
.4

Security Agreement made by Novelis Inc., as Canadian Borrower,
    Novelis Corporation, as U.S. Borrower and the guarantors from
    time to time party thereto in favor of UBS AG, Stamford branch,
    as collateral agent dated as of July 6, 2007 (incorporated by
    reference to Exhibit 10.4 to our Quarterly Report on Form 10-Q
    for the period ended September 30, 2007 filed on November 9,
    2007) (File No. 001-32312) 105




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##### Table of Contents



ExhibitNo.

Description10
.5

Security Agreement made by Novelis Inc., as Canadian Borrower,
    Novelis Corporation, Novelis PAE Corporation, Novelis Finances
    USA LLC, Novelis South America Holdings LLC, Aluminum Upstream
    Holdings LLC, as U.S. Borrowers and the guarantors from time to
    time party thereto in favor of La Salle Business Credit,
    LLC, as collateral agent dated as of July 6, 2007 (incorporated
    by reference to Exhibit 10.5 to our Quarterly Report on Form
    10-Q for the period ended September 30, 2007 filed on November
    9, 2007) (File No. 001-32312)10
.6

Agreement Regarding Termination of Employment between Novelis
    Inc. and David Godsell dated as of November 12, 200710
.7

Separation and Release Agreement between Novelis Inc. and David
    Godsell dated November 12, 200718
.1

Preferability Letter Issued by PricewaterhouseCoopers LLP31
.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  106