##### 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
    June 30, 2008oro

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
  12b-2
  Large accelerated
    filer o

Accelerated
    filer o

Non-accelerated
    filer þ

Smaller reporting
    company o    Rule 12b-2 o þ




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##### 





TABLE OF
    CONTENTS
   
 PART I.


FINANCIAL INFORMATIONItem 1.


Financial StatementsCondensed Consolidated Statements of Operations
    and Comprehensive Income (Loss) (unaudited) Three Months Ended
    June 30, 2008; May 16, 2007 Through June 30, 2007
    (Restated); and April 1, 2007 Through May 15, 2007


2Condensed Consolidated Balance Sheets (unaudited)
    As of June 30, 2008 and March 31, 2008 (Restated)


3Condensed Consolidated Statements of Cash Flows
    (unaudited) Three Months Ended June 30, 2008;
    May 16, 2007 Through June 30, 2007 (Restated); and
    April 1, 2007 Through May 15, 2007


4Condensed Consolidated Statement of
    Shareholders Equity (unaudited) Three Months Ended
    June 30, 2008 (Restated as to opening balance)


5Notes to the Condensed Consolidated Financial
    Statements (unaudited)


6Item 2.


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


44Item 3.


Quantitative and Qualitative Disclosures About
    Market Risk


71Item 4.


Controls and Procedures


75PART II.


OTHER INFORMATIONItem 1.


Legal Proceedings


77Item 6.


Exhibits


79EX-10.1 EMPLOYMENT LETTEREX-10.2 FORM OF NOVELIS LONG-TERM INCENTIVE PLANEX-31.1 SECTION CERTIFICATION OF PEOEX-31.2 SECTION 302 CERTIFICATION OF PFOEX-32.1 SECTION 906 CERTIFICATION OF PEOEX-32.2 SECTION 906 CERTIFICATION OF PFO   1




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##### Table of Contents



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


May 16, 2007



April 1, 2007Ended


Through



ThroughJune 30, 2008


June 30, 2007



May 15, 2007(Restated)(A)Successor


Successor



PredecessorNet sales

$
3,103


$
1,547



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


2,831



1,436




1,205Selling, general and administrative expenses


84



42




95Depreciation and amortization


116



53




28Research and development expenses


12



13




6Interest expense and amortization of debt issuance
    costs  net


40



25




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


(66
)


(14
)



(20
)Equity in net (income) loss of non-consolidated affiliates


2



1




(1
)Sale transaction fees











32Other (income) expenses  net


22



11




43,041



1,567




1,375Income (loss) before provision (benefit) for taxes on income
    (loss) and minority interests share


62



(20
)



(94
)Provision (benefit) for taxes on income (loss)


35



27




4Income (loss) before minority interests share


27



(47
)



(98
)Minority interests share


(2
)


2




1Net income (loss)


25



(45
)



(97
)Other comprehensive income (loss)  net of taxCurrency translation adjustment


10



(2
)



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


11



1




(1
)Amortization of net actuarial loss for postretirement benefit
    plans











(1
)Other comprehensive income (loss)  net of tax


21



(1
)



33Comprehensive income (loss)

$
46


$
(46
)


$
(64
)     (A)
    
    See Note 2  Restatement of Financial Statements.   2




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##### Table of Contents



Novelis
    Inc.
 CONDENSED
    CONSOLIDATED BALANCE SHEETS (unaudited)
    (in millions, except number of shares)  As ofJune 30,


March 31,2008


2008(Restated)(A)Successor


SuccessorASSETSCurrent assetsCash and cash equivalents

$
296


$
326Accounts receivable (net of allowances of $1 as of June 30,
    2008 and March 31, 2008) third parties


1,577



1,248 related parties


27



31Inventories


1,577



1,455Prepaid expenses and other current assets


86



58Current portion of fair value of derivative instruments


198



203Deferred income tax assets


111



125Total current assets


3,872



3,446Property, plant and equipment  net


3,253



3,357Goodwill


1,868



1,869Intangible assets  net


868



888Investment in and advances to non-consolidated affiliates


938



946Fair value of derivative instruments  net of current
    portion


32



21Deferred income tax assets


9



12Other long-term assets third parties


92



102 related parties


37



41Total assets

$
10,969


$
10,682LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilitiesCurrent portion of long-term debt

$
14


$
15Short-term borrowings


430



115Accounts payable third parties


1,613



1,582 related parties


61



55Accrued expenses and other current liabilities


805



850Deferred income tax liabilities


46



39Total current liabilities


2,969



2,656Long-term debt  net of current portion


2,553



2,560Deferred income tax liabilities


695



701Accrued postretirement benefits


435



421Other long-term liabilities


599



6727,251



7,010Commitments and contingenciesMinority interests in equity of consolidated affiliates


149



149Shareholders equityCommon stock, no par value; unlimited number of shares
    authorized; 77,459,658 shares issued and outstanding as of
    June 30, 2008 and March 31, 2008






Additional paid-in capital


3,497



3,497Retained earnings (Accumulated deficit)


5



(20
)Accumulated other comprehensive income (loss)


67



46Total shareholders equity


3,569



3,523Total liabilities and shareholders equity

$
10,969


$
10,682     (A)
    
    See Note 2  Restatement of Financial Statements.   3




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##### Table of Contents



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


May 16, 2007



April 1, 2007Ended


Through



ThroughJune 30, 2008


June 30, 2007



May 15, 2007(Restated)(A)Successor


Successor



PredecessorOPERATING ACTIVITIESNet income (loss)

$
25


$
(45
)


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


116



53




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


(66
)


(14
)



(20
)Deferred income taxes


10



14




(18
)Amortization of debt issuance costs


1








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


(64
)


(6
)



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


2



1




(1
)Dividends from non-consolidated affiliates











4Minority interests share


2



(2
)



(1
)Impairment charges on long-lived assets


1








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


(1
)







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


(337
)


(59
)



(21
) related parties


(2
)







Inventories


(129
)


70




(76
)Prepaid expenses and other current assets


(29
)


5




(7
)Other long-term assets


8



(1
)



(1
)Accounts payable third parties


63








(62
) related parties


11



1




Accrued expenses and other current liabilities


(5
)


(78
)



42Accrued postretirement benefits


16



5




1Other long-term liabilities


27



12




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


(351
)


(44
)



(230
)INVESTING ACTIVITIESCapital expenditures


(33
)


(22
)



(17
)Proceeds from sales of property, plant and equipment


1



1




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


6



1




1Proceeds from loans receivable  net 
    related parties


8



4




Net proceeds from settlement of derivative instruments


34



29




18Net cash provided by (used in) investing activities


16



13




2FINANCING ACTIVITIESProceeds from issuance of common stock






92




Proceeds from issuance of debt











150Principal repayments


(4
)


(46
)



(1
)Short-term borrowings  net


313



83




60Dividends  minority interests






(1
)



(7
)Debt issuance costs






(13
)



(2
)Proceeds from the exercise of stock options











1Net cash provided by (used in) financing activities


309



115




201Net increase (decrease) in cash and cash equivalents


(26
)


84




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


(4
)







1Cash and cash equivalents  beginning of period


326



102




128Cash and cash equivalents  end of period

$
296


$
186



$
102Supplemental disclosures of cash flow information:Interest paid

$
17


$
14



$
13Income taxes paid

$
55


$
12



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





$
(1,244
)Goodwill





$
(1,866
)Intangible assets





$
(859
)Investment in and advances to non-consolidated affiliates





$
(610
)Debt





$
66     (A)
    
    See Note 2  Restatement of Financial Statements.   4




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##### Table of Contents



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


AccumulatedAdditional


Earnings


OtherCommon Stock


Paid-in


(Accumulated


ComprehensiveShares


Amount


Capital


Deficit)


Income (Loss)


TotalSuccessorBalance as of March 31, 2008 (Restated)(A)


77,459,658


$



$
3,497


$
(20
)

$
46


$
3,523Net income (loss)














25







25Currency translation adjustment


















10



10Change in fair value of effective portion of hedges 
    net


















11



11Balance as of June 30, 2008


77,459,658


$



$
3,497


$
5


$
67


$
3,569     (A)
    
    See Note 2  Restatement of Financial Statements.   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    Description
    of Business and Basis of Presentation
    Form 10-K/A Rule 10-01 Regulation S-X.
  Acquisition
    of Novelis Common Stock and 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)
  Interim
    Reporting
    Dividends
    Recently
    Adopted Accounting Standards
    The Fair Value Option for Financial Assets and Financial
    Liabilities  including an amendment of FASB Statement
    No. 115 instrument-by-instrument Accounting for Derivative Instruments and Hedging Activities
  Fair Value Measurements Position No. FAS 157-2, Effective Date of FASB Statement No. 157 No. FAS 157-1, Application of FASB Statement No. 157 to FASB Statement
    No. 13 and Other Accounting Pronouncements That Address
    Fair Value Measurements for Purposes of Lease Classification or
    Measurement under Statement 13 Accounting for Leases Business Combinations
 7




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##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  No. FIN 39-1, Amendment of FASB Interpretation No. 39 FIN 39-1). FIN 39-1 Offsetting of Amounts
    Related to Certain Contracts
  Recently
    Issued Accounting Standards
    The
    Hierarchy of Generally Accepted Accounting Principles The Meaning of Present Fairly in Conformity
    with Generally Accepted Accounting Principles
  No. FAS 142-3, Determination of Useful Life of Intangible Assets, FAS 142-3). FAS 142-3 Goodwill and Other Intangible Assets FAS 142-3 FAS 142-3 FAS 142-3
  Disclosures about Derivative Instruments and Hedging
    Activities
  Business Combinations
 8




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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
    2.
    Restatement
    of Financial Statements  Form 10-K/A
 9




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##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
      May 16, 2007 Through June 30, 2007As Previously





AsReported


Restatements


RestatedSuccessor





SuccessorNet sales

$
1,547


$



$
1,547Cost of goods sold (exclusive of depreciation and amortization
    shown below)


1,436







1,436Selling, general and administrative expenses


42







42Depreciation and amortization


53







53Research and development expenses


13







13Interest expense and amortization of debt issuance
    costs  net


25







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


(14
)






(14
)Equity in net (income) loss of non-consolidated affiliates


1







1Other (income) expenses  net


11







111,567







1,567Income (loss) before provision (benefit) for taxes on income
    (loss) and minority interests share


(20
)






(20
)Provision (benefit) for taxes on income (loss)


36



(9
)


27Income (loss) before minority interests share


(56
)


9



(47
)Minority interests share


2







2Net income (loss)


(54
)


9



(45
)Other comprehensive income (loss)  net of taxCurrency translation adjustment


(2
)






(2
)Change in fair value of effective portion of hedges 
    net


1







1Other comprehensive income (loss)  net of tax


(1
)






(1
)Comprehensive income (loss)

$
(55
)

$
9


$
(46
)  10




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##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    May 16, 2007 Through June 30, 2007As Previously





AsReported


Restatements


RestatedSuccessor





SuccessorOPERATING ACTIVITIESNet income (loss)

$
(54
)

$
9


$
(45
)Adjustments to determine net cash provided by (used in)
    operating activities:Depreciation and amortization


53







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


(14
)






(14
)Deferred income taxes


23



(9
)


14Write-off and amortization of fair value adjustments 
    net


(6
)






(6
)Equity in net (income) loss of non-consolidated affiliates


1







1Minority interests share


(2
)






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


(59
)






(59
)Inventories


70







70Prepaid expenses and other current assets


5







5Other long-term assets


(1
)






(1
)Accounts payable  related parties


1







1Accrued expenses and other current liabilities


(78
)






(78
)Accrued postretirement benefits


5







5Other long-term liabilities


12







12Net cash provided by (used in) operating activities


(44
)






(44
)INVESTING ACTIVITIESCapital expenditures


(22
)






(22
)Proceeds from sales of assets


1







1Changes to investment in and advances to non-consolidated
    affiliates


1







1Proceeds from loans receivable  net 
    related parties


4







4Net proceeds from settlement of derivative instruments


29







29Net cash provided by (used in) investing activities


13







13FINANCING ACTIVITIESProceeds from issuance of common stock


92







92Principal repayments


(46
)






(46
)Short-term borrowings  net


83







83Dividends  minority interests


(1
)






(1
)Debt issuance costs


(13
)






(13
)Net cash provided by (used in) financing activities


115







115Net increase (decrease) in cash and cash equivalents


84







84Effect of exchange rate changes on cash balances held in
    foreign currencies










Cash and cash equivalents  beginning of period


102







102Cash and cash equivalents  end of period

$
186


$



$
186  11




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##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  3.
    Restructuring
    Programs    Other ExitSeverance Reserves


Related Reserves


TotalNorth








North





RestructuringEurope


America


Total


Europe


America


Total


ReservesSuccessor:Balance as of March 31, 2008

$
4


$
3


$
7


$
16


$
1


$
17


$
24Provisions (recoveries)  net






(1
)


(1
)














(1
)Cash payments


(1
)






(1
)


(1
)






(1
)


(2
)Adjustments  other






2



2















2Balance as of June 30, 2008

$
3


$
4


$
7


$
15


$
1


$
16


$
23   4.
    Inventories    As ofJune 30, 2008


March 31, 2008Successor


SuccessorFinished goods

$
355


$
357Work in process


609



638Raw materials


526



386Supplies


88



751,578



1,456Allowances


(1
)


(1
)Inventories

$
1,577


$
1,455   5.
    Property,
    Plant and Equipment    As ofJune 30, 2008


March 31, 2008(Restated)Successor


SuccessorLand and property rights

$
260


$
258Buildings


844



826Machinery and equipment


2,481



2,4603,585



3,544Accumulated depreciation and amortization


(413
)


(331
)3,172



3,213Construction in progress


81



144Property, plant and equipment  net

$
3,253


$
3,357  12




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##### Table of Contents



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

May 16, 2007


April 1, 2007Ended

Through


ThroughJune 30, 2008

June 30, 2007


May 15, 2007Successor

Successor


PredecessorDepreciation expense related to property, plant and equipment


$103



$49




$28   6.
    Goodwill
    and Intangible Assets  Goodwill
    As of





As ofOperating Segment

March 31, 2008


Adjustments


June 30, 2008(Restated)Successor





SuccessorNorth America

$
1,093


$
(1
)(A)

$
1,092Europe


515







515Asia










South America


261







261$
1,869


$
(1
)

$
1,868     (A)
    
    Adjustment for final payment related to the transfer of pension
    plans in Canada for employees who elected to transfer their past
    service to Novelis. Plan assets transferred exceeded plan
    liabilities assumed by $1 million (See
    Note 12  Postretirement Benefit Plans).  Intangible
    Assets
    As ofJune 30, 2008


March 31, 2008Successor


SuccessorWeighted











WeightedAverage











AverageGross





Net


Estimated


Gross





Net


EstimatedCarrying


Accumulated


Carrying


Useful


Carrying


Accumulated


Carrying


UsefulAmount


Amortization


Amount


Life


Amount


Amortization


Amount


LifeTradenames

$
152


$
(9
)

$
143



20 years


$
152


$
(6
)

$
146



20 yearsTechnology


169



(13
)


156



15 years



169



(10
)


159



15 yearsCustomer-related intangible assets


482



(27
)


455



20 years



484



(21
)


463



20 yearsFavorable energy supply contract


124



(17
)


107



9.5 years



124



(13
)


111



9.5 yearsOther favorable contracts


15



(8
)


7



3.3 years



15



(6
)


9



3.3 years$
942


$
(74
)

$
868



17.2 years


$
944


$
(56
)

$
888



17.2 years    13




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##### Table of Contents



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


May 16, 2007



April 1, 2007Ended


Through



ThroughJune 30, 2008


June 30, 2007



May 15, 2007Successor


Successor



PredecessorTotal Amortization expense related to intangible assets

$
18


$
7



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


5



3




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

$
13


$
4



$
     (A)
    
    Relates to amortization of favorable energy and other supply
    contracts.    Fiscal Year Ending March 31,2009 (remaining nine months)

$
462010


602011


562012


552013


55   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
%  14




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##### Table of Contents



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


May 16, 2007


April 1, 2007Ended


Through


ThroughJune 30, 2008


June 30, 2007


May 15, 2007Net sales

$
157


$
85


$
45Costs, expenses and provisions for taxes on income


142



81



43Net income

$
15


$
4


$
2     Three Months


May 16, 2007



April 1, 2007Ended


Through



ThroughJune 30, 2008


June 30, 2007



May 15, 2007Successor


Successor



PredecessorPurchases of tolling services and electricityAluminium Norf GmbH(A)

$
71


$
41



$
21Consorcio Candonga(B)


3



2




1Total purchases from related parties

$
74


$
43



$
22     (A)
    
    We purchase tolling services (the conversion of customer-owned
    metal) from Aluminium Norf GmbH.(B)
    
    We purchase electricity from Consorcio Candonga for our
    operations in South America.    As ofJune 30, 2008


March 31, 2008Successor


SuccessorAccounts receivable(A)

$
27


$
31Other long-term receivables(A)

$
37


$
41Accounts payable(B)

$
61


$
55     (A)
    
    The balances represent current and non-current portions of a
    loan due from Aluminium Norf GmbH.(B)
    
    We purchase tolling services from Aluminium Norf GmbH and
    electricity from Consorcio Candonga. 15




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##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
   8.
    Accrued
    Expenses and Other Current Liabilities    As ofJune 30, 2008


March 31, 2008Successor


SuccessorAccrued compensation and benefits

$
125


$
141Accrued settlement of legal claim


39



39Accrued interest payable


41



15Accrued income taxes


8



35Current portion of fair value of unfavorable sales contracts


233



242Current portion of fair value of derivative instruments


120



148Other current liabilities


239



230Accrued expenses and other current liabilities

$
805


$
850   9.
    Debt    As ofJune 30, 2008



March 31, 2008Unamortized









UnamortizedInterest





Fair Value


Carrying






Fair Value


CarryingRates(A)


Principal


Adjustments(B)


Value



Principal


Adjustments(B)


ValueSuccessor









SuccessorNovelis Inc.7.25% Senior Notes, due February 2015


7.25
%

$
1,399


$
65


$
1,464



$
1,399


$
67


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


4.79
%


297







297




298







298Novelis CorporationFloating rate Term Loan facility, due July 2014


4.79
%(C)


653







653




655







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


7.50
%


52



(3
)


49




54



(4
)


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


2.49
%


3







3




3







3Novelis Korea LimitedBank loan, due October 2010


5.44
%


100







100




100







100Bank loans, due September 2008 through June 2011 (KRW
    1 billion)


3.56
%(D)















1







1OtherOther debt, due April 2008 through December 2012


1.64
%(D)


1







1




2







2Total debt






2,505



62



2,567




2,512



63



2,575Less: current portion






(14
)






(14
)



(15
)






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





$
2,491


$
62


$
2,553



$
2,497


$
63


$
2,560  16




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    (A)
    
    Interest rates are as of June 30, 2008 and exclude the
    effects of accretion/amortization of fair value adjustments as a
    result of the Arrangement.(B)
    
    Debt was recorded at fair value as a result of the Arrangement.(C)
    
    Excludes the effect of any related interest rate swaps. See
    New Senior Secured Credit Facilities.(D)
    
    Weighted average interest rate.  New
    Senior Secured Credit Facilities
    Other
    long-term assets  third parties Interest
    expense and amortization of debt issuance costs  net
    7.25% Senior
    Notes
    Interest expense and
    amortization of debt issuance costs  net
  Short-Term
    Borrowings and Lines of Credit
   17




---



##### 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, 2007Ended


Through



ThroughJune 30,


June 30,



May 15,2008


2007



2007Successor


Successor



PredecessorNet change in foreign currency translation adjustments

$
10


$
(13
)


$
31Net change in fair value of effective portion of hedges


19



2




(1
)Amortization of net actuarial loss for postretirement benefit
    plans











(1
)Net other comprehensive income (loss), before income tax effect


29



(11
)



29Income tax effect


(8
)


10




4Other comprehensive income (loss)

$
21


$
(1
)


$
33     As ofJune 30, 2008



March 31, 2008(Restated)Successor



SuccessorForeign currency translation adjustments

$
69



$
59Fair value of effective portion of hedges  net


11




Postretirement benefit plans:Pension and other benefits


(13
)



(13
)Accumulated other comprehensive income (loss)

$
67



$
46   11.
    Share-Based
    Compensation  Novelis
    Long-Term Incentive Plan
   18




---



##### Table of Contents



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


May 16, 2007



April 1, 2007Ended


Through



ThroughJune 30, 2008


June 30, 2007



May 15, 2007Successor


Successor



PredecessorRecognition Awards

$
0.1


$
0.4



$
1.5Novelis 2006 Incentive Plan (stock options)


n.a.



n.a.




14.5Novelis 2006 Incentive Plan (SARs)


n.a.



n.a.




5.6Novelis Conversion Plan of 2005


n.a.



n.a.




23.8Stock Price Appreciation Unit Plan


n.a.



n.a.




(0.5
)Deferred Share Unit Plan for Non-Executive Directors


n.a.



n.a.




0.2Novelis Founders Performance Awards


n.a.



n.a.




0.1Total Share-Based Compensation Expense

$
0.1


$
0.4



$
45.2      19




---



##### Table of Contents



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


Other Postretirement Benefit PlansThree Months


May 16, 2007



April 1, 2007


Three Months


May 16, 2007



April 1, 2007Ended


Through



Through


Ended


Through



ThroughJune 30, 2008


June 30, 2007



May 15, 2007


June 30, 2008


June 30, 2007



May 15, 2007Successor


Successor



Predecessor


Successor


Successor



PredecessorService cost

$
10


$
6



$
6


$
2


$
1



$
1Interest cost


15



6




6



3



1




1Expected return on assets


(13
)


(5
)



(5
)











Curtailment/settlement losses


1












(2
)







Net periodic benefit cost

$
13


$
7



$
7


$
3


$
2



$
2     Employer
    Contributions to Plans
    Three Months


May 16, 2007



April 1, 2007Ended


Through



ThroughJune 30, 2008


June 30, 2007



May 15, 2007Successor


Successor



PredecessorFunded pension plans

$
4


$
4



$
4Unfunded pension plans


4



2




2Savings and defined contribution pension plans


5



2




2Total contributions

$
13


$
8



$
8     Goodwill
 20




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  13.
    Currency
    Losses (Gains)    Three Months


May 16, 2007



April 1, 2007Ended


Through



ThroughJune 30, 2008


June 30, 2007



May 15, 2007Successor


Successor



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

$
(32
)

$
(16
)


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


20



7




4$
(12
)

$
(9
)


$
(6
)     (A)
    
    Included in (Gain) loss on change in fair value of derivative
    instruments  net.(B)
    
    Included in Other (income) expenses  net.  Accumulated other comprehensive income (loss)
  Three Months


May 16, 2007Ended


ThroughJune 30, 2008


March 31, 2008(Restated)Successor


SuccessorCumulative currency translation adjustment  beginning
    of period

$
59


$
Effect of changes in exchange rates


10



59Cumulative currency translation adjustment  end of
    period

$
69


$
59   14.
    Financial
    Instruments and Commodity Contracts    Accumulated other comprehensive
    income (loss)
  Other comprehensive income
    (loss)  net of tax
  Other comprehensive
    income (loss)  net of tax
 21




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    As of June 30, 2008Maturity Dates







Net Fair(Fiscal Year)

Assets


Liabilities


ValueSuccessor:Foreign exchange forward contracts

2009 through 2012

$
50


$
(77
)

$
(27
)Cross-currency swaps

2009 through 2015


7



(159
)


(152
)Interest rate currency swaps

2009 through 2011


14







14Interest rate swaps

2009 through 2010






(5
)


(5
)Aluminum forward contracts

2009 through 2011


122



(28
)


94Aluminum options

2009 through 2011


6



(4
)


2Electricity swap

2017


22







22Embedded derivative instruments

2009






(4
)


(4
)Natural gas swaps

2009 through 2010


9







9Total fair value




230



(277
)


(47
)Less: current portion(A)




198



(120
)


78Noncurrent portion(A)



$
32


$
(157
)

$
(125
)   As of March 31, 2008Maturity Dates







Net Fair(Fiscal Year)

Assets


Liabilities


ValueSuccessor:Foreign exchange forward contracts

2009 through 2012

$
47


$
(116
)

$
(69
)Cross-currency swaps

2009 through 2015


19



(189
)


(170
)Interest rate currency swaps

2009 through 2011


4







4Interest rate swaps

2009 through 2010






(15
)


(15
)Aluminum forward contracts

2009 through 2011


134



(9
)


125Aluminum options

2009 through 2011


1







1Electricity swap

2017


14







14Embedded derivative instruments

2009






(20
)


(20
)Natural gas swaps

2009 through 2010


5







5Total fair value




224



(349
)


(125
)Less: current portion(A)




203



(148
)


55Noncurrent portion(A)



$
21


$
(201
)

$
(180
)     (A)
    
    The amounts of the current and long-term portions of fair values
    under assets are each presented on the face of our 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. 22




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
   15.
    Fair
    Value Measurements  (Gain) loss on change in
    fair value of derivative instruments  net Accumulated other
    comprehensive income (loss) Accumulated other comprehensive income (loss)
    Level 1
  Level 2
  Level 3
    Derivative
    contracts
     23




---



##### Table of Contents



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


Level 2


Level 3


TotalSuccessor:Assets  Derivative Instruments

$



$
208


$
22


$
230Liabilities  Derivative Instruments

$



$
(270
)

$
(7
)

$
(277
)     NetRealized/

Net Realized/







Net Change inUnrealized

Unrealized Gains







Unrealized GainsBeginning

Gains

(Losses) Included

Purchases,

Transfers

Ending

(Losses) Relating toBalance

(Losses)

in Other

Issuances

in and/or

Balance

Instruments StillApril 1,

Included in

Comprehensive

and

(Out) of

June 30,

Held at June 30,2008

Earnings(B)

Income (Loss)(C)

Settlements

Level 3

2008

2008(D)Successor:Derivative instruments(A)


$11



$(1
)


$9



$(5
)


$1



$15



$7     (A)
    
    Represents derivative assets net of derivative liabilities.(B)
    
    Included in (Gain) loss on change in fair value of derivative
    instruments  net.(C)
    
    Included in Change in fair value of effective portion of
    hedges netin the accompanying condensed
    consolidated statement of shareholders equity.(D)
    
    Represents unrealized gains (losses) relating to assets and
    liabilities classified as Level 3 included in (Gain)
    loss on change in fair value of derivative instruments net. 24




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
   16.
    Other
    (Income) Expenses  Net    Three Months


May 16, 2007



April 1, 2007Ended


Through



ThroughJune 30, 2008


June 30, 2007



May 15, 2007Successor


Successor



PredecessorExchange (gains) losses  net

$
20


$
7



$
4Restructuring charges (recoveries)  net


(1
)


1




1Impairment charges on long-lived assets


1








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


(1
)







Other  net


3



3




(1
)Other (income) expenses  net

$
22


$
11



$
4   17.
    Income
    Taxes  Accounting for
    Income Interim Financial Reporting Accounting for Income Taxes in Interim
    Periods
  Provision (benefit) for taxes on income (loss) Provision (benefit) for
    taxes on income (loss)
 25




---



##### Table of Contents



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


May 16, 2007



April 1, 2007Ended


Through



ThroughJune 30, 2008


June 30, 2007



May 15, 2007(Restated)Successor


Successor



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

$
64


$
(19
)


$
(95
)Canadian statutory tax rate


31
%


33
%



33
%Provision (benefit) at the Canadian statutory rate

$
20


$
(6
)


$
(31
)Increase (decrease) for taxes on income (loss) resulting from:Exchange translation items


9



19




23Exchange remeasurement of deferred income taxes


20



3




3Change in valuation allowances


3



21




13Expense/income items with no tax effect  net


(4
)


(11
)



(9
)Enacted tax rate changes






(3
)



Tax rate differences on foreign earnings


(14
)


2




2Uncertain tax positions


1








Other  net






2




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

$
35


$
27



$
4Effective tax rate


55
%


(142
)%



(4
)%     Tax
    Uncertainties
  Adoption
    of FASB Interpretation No. 48
  Accounting for Uncertainty in Income Taxes
   26




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  1999-2006.
  ther long-term assets  third parties
    Provision (benefit) for taxes on income (loss) Provision (benefit) for taxes
    on income (loss)
  18.
    Commitments
    and Contingencies  Primary
    Supplier
    Three Months

May 16, 2007


April 1, 2007Ended

Through


ThroughJune 30, 2008

June 30, 2007


May 15, 2007Successor

Successor


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


35
%


34
%



34
%     (A)
    
    One kilotonne (kt) is 1,000 metric tonnes. One metric tonne is
    equivalent to 2,204.6 pounds.  Legal
    Proceedings
  Reynolds Boat Case.
   27




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    Form 10-K Accrued expenses and
    other current liabilities Prepaid expenses and
    other current assets
  Accrued expenses
    and other current liabilities
    Coca-Cola
    Lawsuits. Coca-Cola Coca-Cola Coca-Cola Coca-Cola
  Coca-Cola Coca-Cola
 28




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    Anheuser-Busch Litigation.
        ARCO Aluminum Complaint.
     29




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    Environmental
    Matters
      clean-up Other long-term
    liabilities Accrued expenses and other current liabilities
   30




---



##### 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.        Maximum

LiabilityPotential

CarryingType of Entity

Future Payment

ValueWholly-owned subsidiaries

$
83


$
60Aluminium Norf GmbH

$
16


$
    31




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  19.
    Segment
    and Major Customer Information  Segment
    Information
    Disclosure About the Segments of
    an Enterprise and Related Information.
  Form 10-K/A
  (Gain) loss on change in fair
    value of derivative instruments  net.
    
    North America.  Headquartered in Cleveland,
    Ohio, this segment manufactures aluminum sheet and light gauge
    products and operates 11 plants, including two fully dedicated
    recycling facilities, in two countries.
    Europe.  Headquartered in Zurich, Switzerland,
    this segment manufactures aluminum sheet and light gauge
    products and operates 14 plants, including one recycling
    facility, in six countries.
    Asia.  Headquartered in Seoul, South Korea,
    this segment manufactures aluminum sheet and light gauge
    products and operates three plants in two countries.
    South America.  Headquartered in Sao Paulo,
    Brazil, this segment comprises bauxite mining, alumina refining,
    smelting operations, power generation, carbon products, aluminum
    sheet and light gauge products and operates four plants in
    Brazil.  Adjustment to Eliminate Proportional
    Consolidation.
 32




---



##### Table of Contents



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








South


Proportional


CorporateTotal Assets

America


Europe


Asia


America


Consolidation


and Other


Total(Successor)June 30, 2008

$
3,996


$
4,231


$
1,129


$
1,544


$
(193
)

$
262


$
10,969March 31, 2008 (Restated)

$
3,888


$
4,171


$
1,081


$
1,478


$
(199
)

$
263


$
10,682   Adjustment toEliminateSelected Operating Results

North








South


Proportional


CorporateThree Months Ended June 30, 2008

America


Europe


Asia


America


Consolidation


and Other


Total(Successor)Net sales (to third parties)

$
1,083


$
1,218


$
510


$
295


$
(3
)

$



$
3,103Intersegment sales






1



1







(2
)






Segment Income (Loss)


42



111



31



47











231Depreciation and amortization


42



63



15



17



(22
)


1



116Capital expenditures


7



19



5



6



(4
)






33   Adjustment toEliminateSelected Operating Results

North








South


Proportional


CorporateMay 16, 2007 Through June 30, 2007

America


Europe


Asia


America


Consolidation


and Other


Total(Successor)Net sales (to third parties)

$
574


$
593


$
246


$
134


$



$



$
1,547Intersegment sales


1







3



16







(20
)


Segment Income (Loss)


23



43



(2
)


22











86Depreciation and amortization


21



22



8



7



(5
)






53Capital expenditures


5



12



4



3



(3
)


1



22   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  33




---



##### Table of Contents



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


May 16, 2007



April 1, 2007Ended


Through



ThroughJune 30, 2008


June 30, 2007



May 15, 2007(Restated)Successor


Successor



PredecessorTotal Segment Income

$
231


$
86



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


(40
)


(25
)



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


21



(15
)



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






8




(3
)Depreciation and amortization


(116
)


(53
)



(28
)Impairment charges on long-lived assets


(1
)







Minority interests share


(2
)


2




1Adjustment to eliminate proportional consolidation(B)


(18
)


(9
)



(7
)Restructuring recoveries (charges)  net


1



(1
)



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


1








Corporate selling, general and administrative expenses


(14
)


(8
)



(35
)Other costs  net


(3
)


(3
)



1Sale transaction fees











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


(35
)


(27
)



(4
)Net income (loss)

$
25


$
(45
)


$
(97
)     (A)
    
    Unrealized gains (losses) on change in fair value of derivative
    instruments  net represents the portion of gains
    (losses) that were not settled in cash during the period. Total
    realized and unrealized gains (losses) are shown in the table
    below and are included in the aggregate each period in (Gain)
    loss on change in fair value of derivative instruments neton our condensed consolidated
    statements of operations.  Three Months

May 16, 2007


April 1, 2007Ended

Through


ThroughJune 30, 2008

June 30, 2007


May 15, 2007Successor

Successor


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


$(45
)


$(21
)



$(18
)Realized on corporate derivative instruments






(8
)



3Unrealized


(21
)


15




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


$(66
)


$(14
)



$(20
)  34




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
    (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.  Information
    about Major Customers
  Net sales
  Three Months

May 16, 2007


April 1, 2007Ended

Through


ThroughJune 30, 2008

June 30, 2007


May 15, 2007Successor

Successor


PredecessorNet sales to Rexam as a percentage of total net sales


15.7
%


15.8
%



13.5
%   20.
    Supplemental
    Guarantor Information     35




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Novelis
    Inc.
  Condensed
    Consolidating Statement of Operations
 (In
    millions)
  Three Months Ended June 30, 2008 (Successor)Non-Parent


Guarantors


Guarantors


Eliminations


ConsolidatedNet sales

$
395


$
2,582


$
836


$
(710
)

$
3,103Cost of goods sold (exclusive of depreciation and amortization
    shown below)


387



2,377



777



(710
)


2,831Selling, general and administrative expenses






62



22







84Depreciation and amortization


6



89



21







116Research and development expenses


8



3



1







12Interest expense and amortization of debt issuance
    costs  net


7



29



4







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






(62
)


(4
)






(66
)Equity in net (income) loss of affiliates


(32
)


2







32



2Other (income) expenses  net


(7
)


13



16







22369



2,513



837



(678
)


3,041Income (loss) before provision (benefit) for taxes on income
    (loss) and minority interests share


26



69



(1
)


(32
)


62Provision (benefit) for taxes on income (loss)


1



33



1







35Income (loss) before minority interests share


25



36



(2
)


(32
)


27Minority interests share










(2
)






(2
)Net income (loss)

$
25


$
36


$
(4
)

$
(32
)

$
25  36




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Novelis
    Inc.
  Condensed
    Consolidating Statement of Operations
 (In
    millions)
  May 16, 2007 Through June 30, 2007
    (Successor)Non-Restated

Parent


Guarantors


Guarantors


Eliminations


ConsolidatedNet sales

$
245


$
1,347


$
419


$
(464
)

$
1,547Cost of goods sold (exclusive of depreciation and amortization
    shown below)


247



1,251



402



(464
)


1,436Selling, general and administrative expenses


5



25



12







42Depreciation and amortization


3



38



12







53Research and development expenses


2



7



4







13Interest expense and amortization of debt issuance
    costs  net


3



20



2







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


(13
)


(4
)


3







(14
)Equity in net (income) loss of affiliates


25



1







(25
)


1Other (income) expenses  net


(4
)


14



1







11268



1,352



436



(489
)


1,567Income (loss) before provision (benefit) for taxes on income
    (loss) and minority interests share


(23
)


(5
)


(17
)


25



(20
)Provision (benefit) for taxes on income (loss)


22



5











27Income (loss) before minority interests share


(45
)


(10
)


(17
)


25



(47
)Minority interests share










2







2Net income (loss)

$
(45
)

$
(10
)

$
(15
)

$
25


$
(45
)  37




---



##### Table of Contents



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


Guarantors


Guarantors


Eliminations


ConsolidatedNet sales

$
129


$
1,020


$
359


$
(227
)

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


131



961



340



(227
)


1,205Selling, general and administrative expenses


29



51



15







95Depreciation and amortization


2



18



8







28Research and development expenses


5



1











6Interest expense and amortization of debt issuance
    costs  net


3



20



3







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


(2
)


(19
)


1







(20
)Equity in net (income) loss of non-affiliates


29



(1
)






(29
)


(1
)Sale transaction fees


32















32Other (income) expenses  net


(3
)


9



(2
)






4226



1,040



365



(256
)


1,375Income (loss) before provision (benefit) for taxes on income
    (loss) and minority interests share


(97
)


(20
)


(6
)


29



(94
)Provision (benefit) for taxes on income (loss)






3



1







4Income (loss) before minority interests share


(97
)


(23
)


(7
)


29



(98
)Minority interests share










1







1Net income (loss)

$
(97
)

$
(23
)

$
(6
)

$
29


$
(97
)  38




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Novelis
    Inc.
  Condensed
    Consolidating Balance Sheet
 (In
    millions)
  As of June 30, 2008 (Successor)Non-Parent


Guarantors


Guarantors


Eliminations


ConsolidatedASSETSCurrent assetsCash and cash equivalents

$
14


$
161


$
121


$



$
296Accounts receivable  net of allowances third parties


46



1,055



476







1,577 related parties


515



290



24



(802
)


27Inventories


66



1,058



453







1,577Prepaid expenses and other current assets


4



61



21







86Current portion of fair value of derivative instruments






183



22



(7
)


198Deferred income tax assets






105



6







111Total current assets


645



2,913



1,123



(809
)


3,872Property, plant and equipment  net


172



2,430



651







3,253Goodwill






1,679



189







1,868Intangible assets  net






868











868Investments


3,652



937



1



(3,652
)


938Fair value of derivative instruments  net of current
    portion






22



10







32Deferred income tax assets


8







1







9Other long-term assets


1,318



152



130



(1,471
)


129Total assets

$
5,795


$
9,001


$
2,105


$
(5,932
)

$
10,969LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilitiesCurrent portion of long-term debt

$
3


$
10


$
1


$



$
14Short-term borrowings third parties






359



71







430 related parties


5



358



20



(383
)


Accounts payable third parties


77



926



610







1,613 related parties


112



236



125



(412
)


61Accrued expenses and other current liabilities


64



613



138



(10
)


805Deferred income tax liabilities






46











46Total current liabilities


261



2,548



965



(805
)


2,969Long-term debt  net of current portion third parties


1,758



694



101







2,553 related parties






1,202



273



(1,475
)


Deferred income tax liabilities






674



21







695Accrued postretirement benefits


23



303



109







435Other long-term liabilities


184



392



23







5992,226



5,813



1,492



(2,280
)


7,251Commitments and contingenciesMinority interests in equity of consolidated affiliates










149







149Shareholders equityCommon stock


















Additional paid-in capital


3,497















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


5



3,108



559



(3,667
)


5Accumulated other comprehensive income (loss)


67



80



(95
)


15



67Total shareholders equity


3,569



3,188



464



(3,652
)


3,569Total liabilities and shareholders equity

$
5,795


$
9,001


$
2,105


$
(5,932
)

$
10,969  39




---



##### Table of Contents



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

Parent


Guarantors


Guarantors


Eliminations


ConsolidatedASSETSCurrent assetsCash and cash equivalents

$
12


$
177


$
137


$



$
326Accounts receivable  net of allowances third parties


38



818



392







1,248 related parties


518



289



34



(810
)


31Inventories


57



993



405







1,455Prepaid expenses and other current assets


4



35



19







58Current portion of fair value of derivative instruments






186



30



(13
)


203Deferred income tax assets






121



4







125Total current assets


629



2,619



1,021



(823
)


3,446Property, plant and equipment  net


175



2,458



724







3,357Goodwill






1,680



189







1,869Intangible assets  net






888











888Investments


3,629



945



1



(3,629
)


946Fair value of derivative instruments  net of current
    portion






18



3







21Deferred income tax assets


10







2







12Other long-term assets


1,328



160



135



(1,480
)


143Total assets

$
5,771


$
8,768


$
2,075


$
(5,932
)

$
10,682LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilitiesCurrent portion of long-term debt

$
3


$
11


$
1


$



$
15Short-term borrowings third parties






70



45







115 related parties


5



370



25



(400
)


Accounts payable third parties


84



925



573







1,582 related parties


110



233



88



(376
)


55Accrued expenses and other current liabilities


39



699



129



(17
)


850Deferred income tax liabilities






39











39Total current liabilities


241



2,347



861



(793
)


2,656Long-term debt  net of current portion third parties


1,761



698



101







2,560 related parties






1,206



304



(1,510
)


Deferred income tax liabilities


1



680



20







701Accrued postretirement benefits


23



297



101







421Other long-term liabilities


222



431



19







6722,248



5,659



1,406



(2,303
)


7,010Commitments and contingenciesMinority interests in equity of consolidated affiliates










149







149Shareholders equityCommon stock


















Additional paid-in capital


3,497















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


(20
)


3,075



564



(3,639
)


(20
)Accumulated other comprehensive income (loss)


46



34



(44
)


10



46Total shareholders equity


3,523



3,109



520



(3,629
)


3,523Total liabilities and shareholders equity

$
5,771


$
8,768


$
2,075


$
(5,932
)

$
10,682  40




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Novelis
    Inc.
  Condensed
    Consolidating Statement of Cash Flows
 (In
    millions)
  Three Months Ended June 30, 2008 (Successor)Non-Parent


Guarantors


Guarantors


Eliminations


ConsolidatedOPERATING ACTIVITIESNet cash provided by (used in) operating activities

$
4


$
(313
)

$
(7
)

$
(35
)

$
(351
)INVESTING ACTIVITIESCapital expenditures


(1
)


(25
)


(7
)






(33
)Proceeds from sales of property, plant and equipment






1











1Changes to investment in and advances to non-consolidated
    affiliates






6











6Proceeds from loans receivable  net 
    related parties






8











8Net proceeds from settlement of derivative instruments






21



13







34Net cash provided by (used in) investing activities


(1
)


11



6







16FINANCING ACTIVITIESPrincipal repayments third parties


(1
)


(2
)


(1
)






(4
) related parties






5



(30
)


25



Short-term borrowings  net third parties






288



25







313 related parties






(5
)


(5
)


10



Net cash provided by (used in) financing activities


(1
)


286



(11
)


35



309Net increase (decrease) in cash and cash equivalents


2



(16
)


(12
)






(26
)Effect of exchange rate changes on cash balances held in
    foreign currencies










(4
)






(4
)Cash and cash equivalents  beginning of period


12



177



137







326Cash and cash equivalents  end of period

$
14


$
161


$
121


$



$
296  41




---



##### Table of Contents



Novelis
    Inc.
  NOTES TO
    THE CONDENSED CONSOLIDATED
 FINANCIAL
    STATEMENTS (unaudited)  (Continued)
  Novelis
    Inc.
  Condensed
    Consolidating Statement of Cash Flows
 (In
    millions)
  May 16, 2007 Through June 30, 2007
    (Successor)Non-Parent


Guarantors


Guarantors


Eliminations


ConsolidatedOPERATING ACTIVITIESNet cash provided by (used in) operating activities

$
14


$
(23
)

$
(35
)





$
(44
)INVESTING ACTIVITIESCapital expenditures


(2
)


(18
)


(2
)






(22
)Proceeds from sales of property, plant and equipment










1







1Changes to investment in and advances to non-consolidated
    affiliates


(40
)


1







40



1Proceeds from loans receivable net related
    parties






4











4Net proceeds from settlement of derivative instruments


6



22



1







29Net cash provided by (used in) investing activities


(36
)


9







40



13FINANCING ACTIVITIESProceeds from issuance of common stock


92



40







(40
)


92Principal repayments


(7
)


(39
)










(46
)Short-term borrowings  net third parties


(10
)


72



21







83 related parties


(19
)


8



11







Dividends minority interests










(1
)






(1
)Debt issuance costs


(13
)














(13
)Net cash provided by (used in) financing activities


43



81



31



(40
)


115Net increase (decrease) in cash and cash equivalents


21



67



(4
)






84Effect of exchange rate changes on cash balances held in
    foreign currencies


















Cash and cash equivalents  beginning of period


8



74



20







102Cash and cash equivalents  end of period

$
29


$
141


$
16


$



$
186  42




---



##### Table of Contents



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


Guarantors


Guarantors


Eliminations


ConsolidatedOPERATING ACTIVITIESNet cash provided by (used in) operating activities

$
(21
)

$
(181
)

$
(28
)

$



$
(230
)INVESTING ACTIVITIESCapital expenditures


(1
)


(10
)


(6
)






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






1











1Net proceeds from settlement of derivative instruments


(5
)


23











18Net cash provided by (used in) provided by investing
    activities


(6
)


14



(6
)






2FINANCING ACTIVITIESProceeds from issuance of debt






150











150Principal repayments






(1
)










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


45



9



6







60 related parties


(15
)


11



4







Dividends minority interests










(7
)






(7
)Debt issuance costs


(2
)














(2
)Proceeds from the exercise of stock options


1















1Net cash provided by (used in) financing activities


29



169



3







201Net increase (decrease) in cash and cash equivalents


2



2



(31
)






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






1











1Cash and cash equivalents  beginning of period


6



71



51







128Cash and cash equivalents  end of period

$
8


$
74


$
20


$



$
102  43




---



##### 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/A Form 10-K/A
  GENERAL
    Restatement
  
  Acquisition
    of Novelis Common Stock
     44




---



##### Table of Contents



Push Down Basis of
    Accounting Required in Certain Limited Circumstances Business Combinations
  NOTE REGARDING
    COMBINED RESULTS OF OPERATIONS AND SELECTED FINANCIAL AND
    OPERATING INFORMATION DUE TO THE ACQUISITION
      May 16, 2007



April 1, 2007


Three MonthsThrough



Through


EndedJune 30, 2007



May 15, 2007


June 30, 2007Successor



Predecessor


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


407




348



755Ingot products(C)


23




15



38Total shipments


430




363



793     (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 and Europe,
    foundry products in Korea, secondary ingot in Europe and other
    miscellaneous recyclable aluminum.  45




---



##### Table of Contents



May 16, 2007



April 1, 2007


Three MonthsThrough



Through


EndedJune 30, 2007



May 15, 2007


June 30, 2007(Restated)






(Restated)Successor



Predecessor


CombinedCombined Results of Operations ($ in millions)Net sales

$
1,547



$
1,281


$
2,828Cost of goods sold (exclusive of depreciation and amortization
    shown below)


1,436




1,205



2,641Selling, general and administrative expenses


42




95



137Depreciation and amortization


53




28



81Research and development expenses


13




6



19Interest expense and amortization of debt issuance
    costs  net


25




26



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


(14
)



(20
)


(34
)Equity in net (income) loss of non-consolidated affiliates


1




(1
)


Sale transaction fees







32



32Other expenses  net


11




4



151,567




1,375



2,942Income (loss) before provision (benefit) for taxes on income
    (loss) and minority interests share


(20
)



(94
)


(114
)Provision (benefit) for taxes on income (loss)


27




4



31Income (loss) before minority interests share


(47
)



(98
)


(145
)Minority interests share


2




1



3Net income (loss)

$
(45
)


$
(97
)

$
(142
)   HIGHLIGHTS
    
    Shipments and selected financial information are as follows (in
    millions, except shipments, which are in kt):  Three Months Ended June 30,2008


2007(Restated)Successor


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


777



755Ingot products(C)


48



38Total shipments


825



793Net sales

$
3,103


$
2,828Net income (loss)

$
25


$
(142
)Net increase (decrease) in total debt(D)

$
308


$
248     (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 and Europe,
    foundry products in Korea, secondary ingot in Europe and other
    miscellaneous recyclable aluminum. 46




---



##### Table of Contents



(D)
    Net increase (decrease) in total debt is measured by comparing
    the period-end amounts of our total outstanding debt (including
    short-term borrowings) as shown in our condensed consolidated
    balance sheets to the previous fiscal year ending balances as of
    March 31. The net increase (decrease) in total debt
    excludes the change in unamortized fair value adjustments
    recorded as part of the Arrangement.  
    Rolled products shipments increased the first quarter of fiscal
    2009 primarily due to increases in canstock fueled by continued
    demand in the can markets of all segments, partially offset by
    decreases in (1) light gauge primarily in North America and
    Europe as a result of weak market demand, (2) specialty and
    painted products in Europe as a result of weak market conditions
    for building-related products and (3) foil stock in Europe
    and Asia.
    London Metal Exchange (LME) pricing for aluminum (metal) was an
    average of 6.5% higher during the three months ended
    June 30, 2008 than the comparable prior year period. Cash
    prices have trended up at the end of the first quarter. As of
    June 30, 2008 and 2007, cash prices per metric tonne were
    $3,075 and $2,686, respectively. This trend positively impacted
    our fiscal 2009 first quarter results as described more fully
    under Metal Price Lag below.
    Net sales for the first quarter of fiscal 2009 increased from
    the comparable prior year period due to (1) an increase of
    $101 million as a result of 6.5% increase in average LME
    metal pricing, (2) an increase of $93 million from
    higher rolled products volume primarily in North America, South
    America and Asia, offset by lower volume in Europe, (3) an
    increase of $19 million in conversion premiums across all
    segments, (4) an increase of $69 million from foreign
    currency exchange gains primarily in Europe driven by the
    continued strengthening of the euro against the
    U.S. dollar, (5) an increase of $27 million due
    to a favorable change in the product mix of rolled products and
    (6) incremental purchase accounting adjustments of
    $20 million related to the accretion of can ceiling
    contract fair value reserves in North America, partially offset
    by (7) $60 million of lower metal price lag in
    North America and Asia. Metal represents approximately
    60%  70% of the sales value of our products.
    During the three months ended June 30, 2008 and 2007, we
    recognized pre-tax gains of $66 million and
    $34 million, respectively, related to the change in fair
    value of derivative instruments. For segment reporting purposes,
    Segment Income (defined in Operating Segment Review below)
    includes approximately $45 million and $39 million of
    cash-settled derivative gains for the three months ended
    June 30, 2008 and 2007, respectively.
    During the first quarter of fiscal 2009, input and operational
    costs were approximately $48 million higher than in the
    comparable prior year period primarily as a result of higher
    energy, freight and alloy costs. These cost increases were
    offset by a decrease in stock compensation expense of
    $45 million and a decrease in sale transaction fees of
    $32 million.
    The first quarter of fiscal year 2009 was favorably impacted
    versus the comparable prior year period by $18 million for
    certain income and expense items associated with fair value
    adjustments recorded at the date of acquisition. The pre-tax
    impact of these items was primarily driven by the accretion of
    reserves related to unfavorable contracts (recorded at fair
    value at the date of acquisition) and inventory adjustments in
    the prior period that did not occur in the current fiscal year,
    partially offset by higher depreciation and amortization.
    During the first quarter of fiscal 2009, costs associated with
    currency exposure, primarily to the Brazilian real, were
    $26 million higher than in the comparable prior year
    period. The average Brazilian real per U.S. dollar
    strengthened approximately 16% during the first quarter of
    fiscal 2009 versus the comparable prior year period.
    As of June 30, 2008, our total debt (excluding unamortized
    fair value adjustments recorded as part of the acquisition by
    Hindalco) increased by $308 million from the prior fiscal
    year end. This increase in debt was driven primarily by an
    increase in short-term borrowings to fund our working capital
    requirements. 47




---



##### Table of Contents




    Income tax expense in the first quarter of 2009 included
    $29 million of income tax expense related to exchange
    translation and re-measurement items, offset by a
    $14 million tax benefit associated with statutory tax rate
    differences on foreign earnings. The prior year period included
    a net $68 million of tax expense associated with discrete
    period items and tax rate differences on foreign earnings.  OUR
    BUSINESS
  Business
    Model and Key Concepts
    Metal
    Price Ceilings
            Metal
    Price Lag
   48




---



##### Table of Contents



Accounting for Derivative Instruments and Hedging
    Activities
  OPERATIONS
    AND SEGMENT REVIEW
      Three MonthsEndedJune 30,


Percent2008


2007


ChangeSuccessor


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


777



755



2.9
%Ingot products, including primary and secondary ingot and
    recyclable aluminum


48



38



26.3
%Total shipments


825



793



4.0
%   49




---



##### Table of Contents



Three MonthsEndedJune 30,


Percent2008



2007


Change(Restated)Successor



CombinedResults of Operations ($ in millions):Net sales

$
3,103



$
2,828



9.7
%Cost of goods sold (exclusive of depreciation and amortization
    shown below)


2,831




2,641



7.2
%Selling, general and administrative expenses


84




137



(38.7
)%Depreciation and amortization


116




81



43.2
%Research and development expenses


12




19



(36.8
)%Interest expense and amortization of debt issuance
    costs  net


40




51



(21.6
)%(Gain) loss on change in fair value of derivative
    instruments  net


(66
)



(34
)


94.1
%Equity in net (income) loss of non-consolidated affiliates


2








n.m.Sale transaction fees







32



(100.0
)%Other (income) expenses  net


22




15



46.7
%3,041




2,942



3.4
%Income (loss) before provision (benefit) for taxes on income
    (loss) and minority interests share


62




(114
)


154.4
%Provision (benefit) for taxes on income (loss)


35




31



12.9
%Income (loss) before minority interests share


27




(145
)


118.6
%Minority interests share


(2
)



3



(166.7
)%Net income (loss)

$
25



$
(142
)


117.6
%       Three MonthsEndedJune 30,


Percent2008



2007


ChangeSuccessor



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

$
3,075



$
2,686



14.5
%Average cash price during the period

$
2,940



$
2,761



6.5
%   Three MonthsEnded


U.S. DollarJune 30,


Strengthen/2008



2007


(Weaken)Successor



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


1.563




1.354



(15.4
)%Brazilian real per U.S. dollar


1.638




1.961



(16.5
)%South Korean won per U.S. dollar


1,027




927



10.8
%Canadian dollar per U.S. dollar


1.007




1.080



(6.8
)%   50




---



##### Table of Contents



Three MonthsEndedJune 30,


Percent2008



2007


ChangeSuccessor



CombinedNew York Mercantile Exchange  Energy Price
    QuotationsLight Sweet Crude  Average settlement price (per
    barrel)

$
117.76



$
61.69



90.9
%Natural Gas  Average Henry Hub contract settlement
    price (per MMBTU)(A)

$
10.92



$
7.55



44.6
%     (A)
    One MMBTU is the equivalent of one decatherm, or one million
    British Thermal Units (BTUs).  RESULTS
    OF OPERATIONS FOR THE QUARTER ENDED JUNE 30, 2008 COMPARED TO
    THE QUARTER ENDED JUNE 30, 2007 (THREE MONTHS COMBINED
    NON-GAAP)
  Shipments
    Net
    sales
     51




---



##### Table of Contents



Costs
    and expenses
    Three Months EndedJune 30,2008



2007% of






% of$ in Millions


Net Sales



$ in Millions


Net Sales(Restated)Successor



CombinedCost of goods sold (exclusive of depreciation and amortization)

$
2,831



91.2
%


$
2,641



93.4
%Selling, general and administrative expenses


84



2.7
%



137



4.8
%Depreciation and amortization


116



3.7
%



81



2.9
%Research and development expenses


12



0.4
%



19



0.7
%Interest expense and amortization of debt issuance
    costs  net


40



1.3
%



51



1.8
%(Gain) loss on change in fair value of derivative instruments
     net


(66
)


(2.1
)%



(34
)


(1.2
)%Equity in net (income) loss of non-consolidated affiliates


2



0.1
%








%Sale transaction fees







%



32



1.1
%Other (income) expenses  net


22



0.7
%



15



0.5
%$
3,041



98.0
%


$
2,942



104.0
%   Cost of goods sold.
  Selling, general and administrative expenses
    (SG&A).
  Depreciation and amortization.
  Research and development expenses.
  Interest expense and amortization of debt issuance
    costs  net.
  Gain (loss) on change in fair value of derivative
    instruments  net.
  Sale transaction fees.
 52




---



##### Table of Contents



Other (income) expenses  net.
  Other(Income)Expenses  NetOther (income) expenses  net for the three months
    ended June 30, 2007

$
15Exchange losses of $20 million in 2009 compared to
    $11 million in 2008


9Restructuring charges (recoveries)  net of
    $(1) million in 2009 compared to $2 million in 2008


(3
)Impairment charges on long-lived assets of $1 million in
    2009 only


1Net gain on sale of property, plant and equipment of
    $1 million in 2009 only


(1
)Other  net


1Other (income) expenses  net for the three months
    ended June 30, 2008

$
22   Provision
    (benefit) for taxes on income (loss)
      OPERATING
    SEGMENT REVIEW FOR THE QUARTER ENDED JUNE 30, 2008 COMPARED TO
    THE QUARTER ENDED JUNE 30, 2007 (THREE MONTHS COMBINED
    NON-GAAP)
    Disclosure About the Segments of
    an Enterprise and Related Information.
 53




---



##### Table of Contents



Form 10-K/A
      Net
    sales
    May 16, 2007



April 1, 2007


Three MonthsThrough



Through


EndedJune 30, 2007



May 15, 2007


June 30, 2007Successor



Predecessor


CombinedCombined Net sales by Operating Segment:North America

$
574



$
446


$
1,020Europe


593




510



1,103Asia


246




216



462South America


134




109



243Total Net sales

$
1,547



$
1,281


$
2,828  54




---



##### Table of Contents



Segment
    Income
    May 16, 2007



April 1, 2007


Three MonthsThrough



Through


EndedJune 30, 2007



May 15, 2007


June 30, 2007(Restated)






(Restated)Successor



Predecessor


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

$
23



$
(24
)

$
(1
)Europe


43




32



75Asia


(2
)



6



4South America


22




18



40Total Segment Income


86




32



118Interest expense and amortization of debt issuance
    costs  net


(25
)



(26
)


(51
)Unrealized gains (losses) on change in fair value of derivative
    instruments  net(A)


(15
)



5



(10
)Realized gains (losses) on corporate derivative
    instruments  net


8




(3
)


5Depreciation and amortization


(53
)



(28
)


(81
)Minority interests share


2




1



3Adjustment to eliminate proportional consolidation(B)


(9
)



(7
)


(16
)Restructuring charges  net


(1
)



(1
)


(2
)Corporate selling, general and administrative expenses


(8
)



(35
)


(43
)Other costs  net


(3
)



1



(2
)Sale transaction fees







(32
)


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


(27
)



(4
)


(31
)Net income (loss)

$
(45
)


$
(97
)

$
(142
)     (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 in
    the accompanying notes to the condensed consolidated financial
    statements for further information about these non-consolidated
    affiliates. 55




---



##### Table of Contents



Reconciliation
    Three Months Ended June 30,2008


2007(Restated)Successor


CombinedSegment Income (Loss)North America

$
42


$
(1
)Europe


111



75Asia


31



4South America


47



40Total Segment Income


231



118Interest expense and amortization of debt issuance
    costs  net


(40
)


(51
)Unrealized gains (losses) on change in fair value of derivative
    instruments  net


21



(10
)Realized gains (losses) on corporate derivative
    instruments  net






5Depreciation and amortization


(116
)


(81
)Impairment charges on long-lived assets


(1
)


Minority interests share


(2
)


3Adjustment to eliminate proportional consolidation


(18
)


(16
)Restructuring recoveries (charges)  net


1



(2
)Gain (loss) on sales of property, plant and equipment and
    businesses  net


1



Corporate selling, general and administrative expenses


(14
)


(43
)Other costs  net


(3
)


(2
)Sale transaction fees






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


(35
)


(31
)Net income (loss)

$
25


$
(142
)   OPERATING
    SEGMENT RESULTS
  North
    America
   56




---



##### Table of Contents



Three Months EndedJune 30,


Percent2008


2007


ChangeSuccessor


CombinedShipments (kt):Rolled products


286



277



3.2
%Ingot products


8



16



(50.0
)%Total shipments


294



293



0.3
%Net sales

$
1,083


$
1,020



6.2
%Segment Income (Loss)

$
42


$
(1
)


4,300.0
%Total assets

$
3,996


$
4,524



(11.7
)%   Shipments
    Net
    sales
    Segment
    Income
    Total
    Assets
    Europe
   57




---



##### Table of Contents



Three MonthsEndedJune 30,


Percent2008


2007


Change(Restated)Successor


CombinedShipments (kt):Rolled products


271



285



(4.9
)%Ingot products


28



4



600.0
%Total shipments


299



289



3.5
%Net sales

$
1,218


$
1,103



10.4
%Segment Income

$
111


$
75



48.0
%Total assets

$
4,231


$
3,468



22.0
%   Shipments
    Net
    sales
    Segment
    Income
    Total
    assets
    Asia
   58




---



##### Table of Contents



Three MonthsEndedJune 30,


Percent2008


2007


ChangeSuccessor


CombinedShipments (kt):Rolled products


133



118



12.7
%Ingot products


7



11



(36.4
)%Total shipments


140



129



8.5
%Net sales

$
510


$
462



10.4
%Segment Income

$
31


$
4



675.0
%Total assets

$
1,129


$
1,323



(14.7
)%   Shipments
    Net
    sales
    Segment
    Income
    Total
    assets
    South
    America
   59




---



##### Table of Contents



Three MonthsEndedJune 30,


Percent2008


2007


ChangeSuccessor


CombinedShipments (kt):Rolled products


87



75



16.0
%Ingot products


5



7



(28.6
)%Total shipments


92



82



12.2
%Net sales

$
295


$
243



21.4
%Segment Income

$
47


$
40



17.5
%Total assets

$
1,544


$
1,321



16.9
%   Shipments
    Net
    sales
    Segment
    Income
    Total
    assets
    LIQUIDITY
    AND CAPITAL RESOURCES
   60




---



##### Table of Contents



Cash Flows
    May 16, 2007



April 1, 2007


Three MonthsThrough



Through


EndedJune 30, 2007



May 15, 2007


June 30, 2007Successor



Predecessor


CombinedOPERATING ACTIVITIESNet cash provided by (used in) operating activities

$
(44
)


$
(230
)

$
(274
)INVESTING ACTIVITIESCapital expenditures


(22
)



(17
)


(39
)Proceeds from sales of assets


1








1Changes to investment in and advances to non-consolidated
    affiliates


1




1



2Proceeds from loans receivable  net 
    related parties


4








4Net proceeds from settlement of derivative instruments


29




18



47Net cash provided by (used in) investing activities


13




2



15FINANCING ACTIVITIESProceeds from issuance of common stock


92








92Proceeds from issuance of debt







150



150Principal repayments


(46
)



(1
)


(47
)Short-term borrowings  net


83




60



143Dividends  minority interests


(1
)



(7
)


(8
)Debt issuance costs


(13
)



(2
)


(15
)Proceeds from the exercise of stock options







1



1Net cash provided by (used in) financing activities


115




201



316Net increase (decrease) in cash and cash equivalents


84




(27
)


57Effect of exchange rate changes on cash balances held in
    foreign currencies







1



1Cash and cash equivalents  beginning of period


102




128



128Cash and cash equivalents  end of period

$
186



$
102


$
186   Operating
    Activities
   61




---



##### Table of Contents



Three Months EndedJune 30,2008


2007


ChangeSuccessor


CombinedNet cash provided by (used in) operating activities

$
(351
)

$
(274
)

$
(77
)Dividends  minority interests






(8
)


8Capital expenditures


(33
)


(39
)


6Net proceeds from settlement of derivative instruments


34



47



(13
)Free cash flow

$
(350
)

$
(274
)

$
(76
)Ending cash and cash equivalents

$
296


$
186


$
110     tm
   62




---



##### Table of Contents



Investing
    Activities
    Three Months EndedJune 30,2008


2007


ChangeSuccessor


CombinedNet proceeds from settlement of derivative instruments

$
34


$
47


$
(13
)Capital expenditures


(33
)


(39
)


6Proceeds from loans receivable  net


8



4



4Proceeds from sales of assets


1



1



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


6



2



4Net cash provided by (used in) investing activities

$
16


$
15


$
1     tm
    Financing
    Activities
  Overview
    Three Months Ended June 30,2008


2007


ChangeSuccessor


CombinedProceeds from issuance of common stock

$



$
92


$
(92
)Proceeds from issuance of debt






150



(150
)Principal repayments


(4
)


(47
)


43Short-term borrowings  net


313



143



170Dividends  minority interests






(8
)


8Debt issuance costs






(15
)


15Proceeds from the exercise of stock options






1



(1
)Net cash provided by (used in) financing activities

$
309


$
316


$
(7
)    63




---



##### Table of Contents



Senior
    Secured Credit Facilities
      Interest
    Rate Swaps
      Short-Term
    Borrowings and Letters of Credit
    Liquidity
      As ofJune 30,2008

2007Successor

PredecessorCash and cash equivalents


$296



$186Amount available under senior secured credit facilities


411



Total estimated liquidity


$707



$186  64




---



##### Table of Contents



OFF-BALANCE
    SHEET ARRANGEMENTS
    
    any obligation under certain derivative instruments;
    any obligation under certain guarantees or contracts;
    a retained or contingent interest in assets transferred to an
    unconsolidated entity or similar entity or similar arrangement
    that serves as credit, liquidity or market risk support to that
    entity for such assets and
    any obligation under a material variable interest held by the
    registrant in an unconsolidated entity that provides financing,
    liquidity, market risk or credit risk support to the registrant,
    or engages in leasing, hedging or research and development
    services with the registrant.    Derivative
    Instruments
       65




---



##### Table of Contents



As of June 30, 2008Maturity Dates







Net Fair(Fiscal Year)

Assets


Liabilities


ValueSuccessor:Foreign exchange forward contracts

2009 through 2012

$
50


$
(77
)

$
(27
)Cross-currency swaps

2009 through 2015


7



(159
)


(152
)Interest rate currency swaps

2009 through 2011


14







14Interest rate swaps

2009 through 2010






(5
)


(5
)Aluminum forward contracts

2009 through 2011


122



(28
)


94Aluminum options

2009 through 2011


6



(4
)


2Electricity swap

2017


22







22Embedded derivative instruments

2009






(4
)


(4
)Natural gas swaps

2009 through 2010


9







9Total fair value




230



(277
)


(47
)Less: current portion




198



(120
)


78Noncurrent portion



$
32


$
(157
)

$
(125
)   As of March 31, 2008Maturity Dates







Net Fair(Fiscal Year)

Assets


Liabilities


ValueSuccessor:Foreign exchange forward contracts

2009 through 2012

$
47


$
(116
)

$
(69
)Cross-currency swaps

2009 through 2015


19



(189
)


(170
)Interest rate currency swaps

2009 through 2011


4







4Interest rate swaps

2009 through 2010






(15
)


(15
)Aluminum forward contracts

2009 through 2011


134



(9
)


125Aluminum options

2009 through 2011


1







1Electricity swap

2017


14







14Embedded derivative instruments

2009






(20
)


(20
)Natural gas swaps

2009 through 2010


5







5Total fair value




224



(349
)


(125
)Less: current portion




203



(148
)


55Noncurrent portion



$
21


$
(201
)

$
(180
)  66




---



##### Table of Contents



Guarantees
    of Indebtedness
    
    certain of our wholly-owned and majority-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.        Maximum

LiabilityPotential Future

CarryingPayment

ValueWholly-owned Subsidiaries

$
83


$
60Aluminium Norf GmbH

$
16


$
     Other
    CONTRACTUAL
    OBLIGATIONS
  Form 10-K/A
  DIVIDENDS
   67




---



##### Table of Contents



CRITICAL
    ACCOUNTING POLICIES AND ESTIMATES
  Form 10-K/A
  RECENT
    ACCOUNTING STANDARDS
  Recently
    Adopted Accounting Standards
    The Fair Value Option for Financial Assets and Financial
    Liabilities  including an amendment of FASB Statement
    No. 115 instrument-by-instrument Accounting for Derivative Instruments and Hedging Activities
  Fair Value Measurements No. FAS 157-2, Effective Date of FASB Statement No. 157 No. FAS 157-1, Application of FASB Statement No. 157 to FASB Statement
    No. 13 and Other Accounting Pronouncements That Address
    Fair Value Measurements for Purposes of Lease Classification or
    Measurement under Statement 13 Accounting for Leases Business Combinations
  No. FIN 39-1, Amendment of FASB Interpretation No. 39 FIN 39-1). FIN 39-1 Offsetting of Amounts
    Related to Certain Contracts
  Recently
    Issued Accounting Standards
    The
    Hierarchy of Generally Accepted Accounting Principles The Meaning of Present Fairly in Conformity
    with Generally Accepted Accounting Principles
 68




---



##### Table of Contents



No. FAS 142-3, Determination of Useful Life of Intangible Assets, FAS 142-3). FAS 142-3 Goodwill and Other Intangible Assets FAS 142-3 FAS 142-3 FAS 142-3
  Disclosures about Derivative Instruments and Hedging
    Activities
  Business Combinations Accounting for Income Taxes,
  Noncontrolling Interests in Consolidated Financial Statements
 69




---



##### Table of Contents



SPECIAL
    NOTE REGARDING FORWARD-LOOKING STATEMENTS AND MARKET
    DATA
  Form 10-Q
    
    the level of our indebtedness and our ability to generate cash;
    changes in the prices and availability of aluminum (or premiums
    associated with such prices) or other materials and raw
    materials we use;
    the effect of metal price ceilings in certain of our sales
    contracts;
    the 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; 70




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
    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/A
  Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk          Commodity
    Price Risks
    Aluminum
     71




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##### Table of Contents



Sensitivities
    Change in

Change inRate/Price

Fair ValueAluminum Forward Contracts


10
%

$
51Aluminum Options


10
%

$
2   Electricity
    and Natural Gas
       72




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##### Table of Contents



Sensitivities
    Change in

Change inRate/Price

Fair ValueElectricity


10
%

$
8Natural Gas


10
%

$
3   Foreign
    Currency Exchange Risks
    non-U.S. dollar
     73




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##### Table of Contents



Sensitivities
    Pre-TaxGainIncrease (Decrease) in


(Loss) inExchange Rate


Fair ValueCurrency measured against the U.S. dollarEuro


10
%

$
(54
)Korean won


10
%

$
(11
)Brazilian real


10
%

$
39British pound


10
%

$
11Swiss franc


10
%

$
(1
)Malaysian ringgit


10
%

$
1       Pre-TaxIncrease in


Loss inRate


Fair ValueCurrency measured against the U.S. dollarEuro


10
%

$
(86
)British pound


10
%

$
(14
)Swiss franc


10
%

$
(5
)   Interest
    Rate Risks
       74




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##### Table of Contents



Sensitivities
    Change in


Change inRate


Fair ValueInterest Rate Swap ContractsNorth America


10
%

$
2Asia


10
%

$
   Item 4.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
    Form 10-Q Rule 13a-15(e)
  Changes
    in Internal Control Over Financial Reporting
    Rule 13a-15(f)
  Material
    Weakness Existing as of June 30, 2008 and Remediation
    Plan
   75




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##### Table of Contents



Form 10-K/A
      1.
    We conducted a full review of the purchase accounting for the
    Hindalco acquisition, including a review of the valuation
    approach, as well as the related accounting for equity method
    investees and related income tax accounts. This review was
    conducted by the Principal Financial Officer, corporate and
    regional financial officers, corporate and regional tax
    personnel, and the companys external valuation expert.2.
    Management will re-evaluate all accounting and financial
    reporting controls for purchase accounting and equity method
    investees, including related income tax accounts.3.
    Training sessions will be conducted for key financial and tax
    personnel regarding equity method accounting and related income
    tax accounting matters.4.
    Management is transitioning certain purchase accounting
    responsibilities to our regional financial personnel, including
    tax personnel, and developing procedures to monitor the ongoing
    activity in the regions. 76




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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
 77




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##### Table of Contents



Coca-Cola Coca-Cola
    Anheuser-Busch Litigation.
        ARCO Aluminum Complaint.
   78




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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)3
.1

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

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

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

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

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

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

Employment Letter dated April 28, 2008 between Novelis Inc.
    and Jean-Marc Germain10
.2*

Form of Novelis Long-Term Incentive Plan for Fiscal
    2009-201231
.1

Section 302 Certification of Principal Executive Officer31
.2

Section 302 Certification of Principal Financial Officer32
.1

Section 906 Certification of Principal Executive Officer32
.2

Section 906 Certification of Principal Financial Officer     *
    
    Indicates a management contract or compensatory plan or
    arrangement. 79




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##### Table of Contents



SIGNATURES
      By:
    /s/  Steven
    Fisher       80




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##### Table of Contents



EXHIBIT INDEX
  ExhibitNo.

Description2
.1

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

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

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

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

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

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

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

Employment Letter dated April 28, 2008 between Novelis Inc.
    and Jean-Marc Germain10
.2*

Form of Novelis Long-Term Incentive Plan for Fiscal
    2009-201231
.1

Section 302 Certification of Principal Executive Officer31
.2

Section 302 Certification of Principal Financial Officer32
.1

Section 906 Certification of Principal Executive Officer32
.2

Section 906 Certification of Principal Financial Officer     *
    
    Indicates a management contract or compensatory plan or
    arrangement. 81