UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-K
                                   (Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934
For the fiscal year ended December 31, 1999
                                            OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
For the transition period from _____ to _____
                              Commission file Number 1-13645

                            HOWMET INTERNATIONAL INC.
             (Exact name of registrant as specified in its charter)


                    Delaware                             52-1946684
                    --------                             ----------
 (State or other jurisdiction of incorporation        (I.R.S. Employer
               or organization)                      Identification No.)

Address of Principal Executive Offices: 475 Steamboat Road, Greenwich, CT 06830

Registrant's telephone number, including area code:           203-661-4600
                                                              ------------

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

                  Title of each class             Name of each exchange
                  -------------------
                 Common Stock, par value          on which registered
                                                 -----------------------
                    $.01 per share               New York Stock Exchange

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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
                                                            YES [X] NO [_]

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

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates of the registrant:
                        $303,030,380 AS OF MARCH 16, 2000

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
COMMON STOCK, $0.01 PAR VALUE, AS OF MARCH 16, 2000: 100,033,307 SHARES

                       DOCUMENTS INCORPORATED BY REFERENCE

Exhibit Index appears on pages 27-31.
<PAGE>

<TABLE>
<CAPTION>
                                TABLE OF CONTENTS
<S>      <C> <C>                                                              <C>
Part I

Item 1   -   BUSINESS.......................................................   1
         -   CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR
             PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT
             OF 1995........................................................   6
Item 2   -   PROPERTIES.....................................................  11
Item 3   -   LEGAL PROCEEDINGS..............................................  12
Item 4   -   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS............  12

Part II

Item 5   -   MARKET FOR COMPANY'S COMMON EQUITY AND RELATED
             STOCKHOLDER MATTERS............................................  12
Item 6   -   SELECTED FINANCIAL DATA........................................  13
Item 7   -   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
             AND RESULTS OF OPERATIONS......................................  13
Item 7A  -   QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK......  13
Item 8   -   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA....................  13
Item 9   -   CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
             AND FINANCIAL DISCLOSURE.......................................  13

Part III

Item 10  -   DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY................  14
Item 11  -   EXECUTIVE COMPENSATION.........................................  17
Item 12  -   SECURITY OWNERSHIP OF CERTAIN OWNERS AND MANAGEMENT............  24
Item 13  -   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.................  25

Part IV

Item 14  -   EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
             AND REPORTS ON FORM 8-K........................................  26
SIGNATURES..................................................................  32
FINANCIAL INFORMATION....................................................... F-1
FINANCIAL STATEMENT SCHEDULES............................................... I-1
</TABLE>




<PAGE>

PART I

ITEM 1 -- BUSINESS

Howmet International Inc. is a Delaware corporation  organized in 1995 (referred
to  hereinafter  together with its  subsidiaries  as the "Company" or "Howmet").
Through its principal operating subsidiary, Howmet Corporation, founded in 1926,
the Company is the largest  manufacturer in the world of investment cast turbine
engine  components  for jet aircraft  and  industrial  gas  turbines  ("IGT") as
original  equipment  and  spare  parts.  The  Company  uses  investment  casting
techniques to produce high-performance,  highly reliable superalloy and titanium
components to the exacting  specifications of the major aerospace and IGT engine
manufacturers.  Through Howmet Corporation's Aluminum Casting (formerly Cercast)
subsidiaries,  the  Company is also the  world's  largest  producer  of aluminum
investment castings,  which it produces principally for the commercial aerospace
and defense electronics industries.

Howmet  Corporation  operates  in one  business  segment,  investment  castings.
Financial  information with respect to geographic regions is included in Note 15
of "Notes to Consolidated Financial Statements" on page F-21 - F-22 hereof.

The Company was formed in 1995 under the name Blade Acquisition Corp.  ("Blade")
as a joint venture  between  Cordant  Technologies  Inc.,  then known as Thiokol
Corporation  ("Cordant"),  which at that time owned 49% of the Company's  Common
Stock, and Carlyle-Blade Acquisition Partners, L.P. ("Carlyle-Blade  Partners"),
which  owned 51% of the  Company's  Common  Stock.  The  Company  was  formed to
purchase  Howmet  Corporation  and  the  Cercast  companies  ("Cercast")  from a
subsidiary of Pechiney,  S.A. The acquisition of Howmet  Corporation and Cercast
was  accomplished on December 13, 1995 through the purchase of the capital stock
of Pechiney  Corporation,  Howmet  Corporation's parent holding company, and the
capital stock of Cercast (the "Acquisition").  The Cercast companies then became
subsidiaries of Howmet Corporation,  and Pechiney Corporation's name was changed
to Howmet Holdings Corporation ("Holdings").

On December 2, 1997,  Cordant acquired 13 million shares of the Company's Common
Stock from  Carlyle-Blade  Partners,  increasing  its ownership  interest in the
Company to 62%. This was done  concurrently  with a public  offering of stock of
the Company by  Carlyle-Blade  Partners,  pursuant to which public  stockholders
acquired a 15.35% interest in the Company and Carlyle-Blade  Partners'  interest
was reduced to 22.65%.  On February 8, 1999,  Cordant  acquired  all of Carlyle-
Blade  Partners'  remaining  shares of the Company's  Common Stock and now holds
84.6% of the currently outstanding Common Stock.

POSSIBLE OWNERSHIP CHANGES

On November 12, 1999,  Cordant made a proposal to acquire all of the outstanding
shares of Common Stock of the Company not currently owned by Cordant for a price
of $17.00 per share in cash,  and the proposal  was referred to the  Independent
Directors  Committee of the Company's Board of Directors (the  "Committee").  On
March 10, 2000,  Cordant  informed the Committee that it was willing to increase
its offer to $18.75 per share,  but following  further  discussions no agreement
was reached.  On March 14, 2000, Alcoa Inc.  ("Alcoa") and Cordant  announced an
agreement  under which Alcoa  agreed to acquire  Cordant.  Alcoa has advised the
Company that it intends to enter into  discussions  with the Committee to pursue
the acquisition of the outstanding  publicly held shares of the Company's stock.
See "Control by and Relationship  with Cordant" in "Cautionary  Statement," page
8.

PRODUCTS

The Company  uses the  investment  casting  process to  manufacture  superalloy,
titanium and aluminum components for aerospace engine and airframe  applications
and IGT applications for customers worldwide. Sales to the aerospace market were
$733.7 million, $802.5 million, and


                                       1
<PAGE>

$739.9  million in 1999,  1998, and 1997  respectively.  Sales to the IGT market
were $677.4 million,  $476.1 million,  and $402.5 million  respectively in those
years.  These products are  manufactured to precise  specifications  provided by
customers.

HOWMET
PRODUCTS             SUMMARY DESCRIPTION AND APPLICATION
--------             -----------------------------------
Blades               High  temperature   superalloy  rotating  turbine  engine
                     components. Blades act as airfoils, which are driven by the
                     hot gas flow.

Vanes                High temperature superalloy non-rotating  turbine  engine
                     components.  Vanes are the fixed airfoils which direct the
                     gas flow.

IGT shroud blocks    Vane holders that provide a seal to fix each vane in
                     position.

Turbine rotors       Integrated cast rotating wheels of blades primarily for use
                     in smaller engines. Rotors incorporate numerous blades in a
                     single part.

Nozzle rings         Integrated cast non-rotating rings of vanes primarily for
                     use in smaller engines. Nozzle rings are like vanes but are
                     manufactured as a single integral component.

Compressor stators   Integrated cast non-rotating rings of compressor vanes for
                     use  in  small  and  large  engines.  Compressor  stators
                     incorporate numerous vanes in a single part.

Frames               Large diameter thin-wall cases  used  to  support  their
                     respective sections  of  turbine engines   such  as  fans,
                     compressors and turbines.

Bearing housings     Large diameter, heavy structural supports for bearings.

Airframe components  Titanium and aluminum structures for commercial and
                     military  aircraft, including  door  frames,  flap  tracks,
                     nacelles, longerons, wing tips, and nose and tail cones.

Electronics
packaging            Aluminum boxes with card slots and cooling fins for
                     electronic avionics packages.

Electro-optical
system housings      Heads-up display, gimbal and other housings.

Engine parts         Gear boxes, front frames, and blocker doors for small
                     engines.

Other aircraft
parts                Aircraft fuel pump,  a/c blower,  oil tank and  surge tank
                     components.

JOINT VENTURES

Howmet  Corporation  currently is  participating  in two joint ventures,  one in
Japan with Komatsu Ltd. and the other in the United  States with a subsidiary of
United Technologies Corporation. The Japanese joint venture, Komatsu-Howmet Ltd.
("KHL"), was established in 1972 and manufactures investment cast components for
IGT and aerospace  customers,  primarily in Japan. Howmet Corporation  currently
holds an 81% interest in KHL and has an option to purchase  Komatsu's  remaining
interest in this  venture.  On December 20, 1999 the Company  announced  that it
intends to acquire Komatsu's remaining interest,  with the acquisition  expected
to be completed  in the second  quarter of 2000.  The joint  venture with United
Technologies   Corporation,   Sprayform   Technologies   International,   L.L.C.
("Sprayform"),   was  organized  in  1997  to  develop  and   commercialize  the
Spraycast-X(R)  technology.  Through this  technology  atomized metal is sprayed
onto a  rotating  mandrel  to form  products  such as cases  and  rings.  Howmet
Corporation currently holds a 51% interest in Sprayform.


                                       2
<PAGE>



RAW MATERIALS

The Company's raw materials  include a number of metals and minerals,  including
titanium,  hafnium,  aluminum,  nickel, cobalt,  molybdenum and chromium,  among
others.  The Company has multiple  sources of supply for most of these materials
and has not experienced any significant  supply  interruption in the past twenty
years.  Prices of these  materials,  however,  can be volatile,  and the Company
engages in advance  purchases of some of these  materials  under certain  market
conditions,  and passes certain price fluctuations through to customers pursuant
to its long-term  agreements.  The Company ordinarily does not otherwise attempt
to hedge the price risk of its raw materials.  See "Availability and Cost of Raw
Materials" in "Cautionary Statement", page 8.

PATENTS

The Company has 75  outstanding  United States  patents,  8 of which will expire
within five years and 12 more of which will expire within ten years. The Company
has also obtained  certain  technical  licenses and developed other  proprietary
information.  The Company  believes  that these  proprietary  rights,  including
modifications  and  applications  of the directional  solidification  and single
crystal casting processes,  provide it with a competitive advantage.  To protect
its  proprietary  information,  the  Company  requires  its  employees  to  sign
confidentiality agreements, reminds employees of this confidentiality obligation
upon their  departure from the Company,  and builds much of its own  specialized
equipment,  such as casting furnaces, to prevent competitors from learning about
Howmet's newly developed processes.

Competitors  in the  Company's  business  also hold  patents  and other forms of
proprietary  information,  and there is  active  technical  competition  in that
business.  No assurance can be given that one company or another will not obtain
a  significant  advantage  from  time to time in one  aspect  of the  industry's
technology or another.

MAJOR CUSTOMERS

The Company is the leading  supplier of precision  investment cast components to
the  producers  of aircraft  and  industrial  gas turbine  engines.  Most of the
turbine   engine  market  is   characterized   by  a  limited  number  of  large
manufacturers   of  engines.   The  Company's  top  ten  customers   represented
approximately  76% of the Company's net sales in 1999.  The Company's  principal
customers are The General  Electric  Company,  principally  through its aircraft
engine (GEAE) and power systems (GEPS) groups,  ABB Power  Generation  Ltd., and
United  Technologies  Corporation,  principally  through  its  Pratt  &  Whitney
aircraft operations (Pratt & Whitney Division and Pratt & Whitney Canada). Sales
to these customers represented 24%, 13% and 10%, respectively,  of the Company's
1999 net sales.  The Company's other principal  aerospace engine customers (none
of  which  represented  more  than  10% of 1999  net  sales)  include  Honeywell
International  Inc.  (through its acquisition of AlliedSignal  Inc.),  FiatAvio,
S.p.A.,  Rolls-Royce PLC (and its  Rolls-Royce  Allison  subsidiary),  Walbar (a
division of Coltec Industries Inc.), and The Boeing Company. The Company's other
principal IGT  customers  (none of which  represented  more than 10% of 1998 net
sales)  include  Siemens   Westinghouse  Power  Corporation,   Mitsubishi  Heavy
Industries Ltd., and Solar Turbines Incorporated.

Orders for  components  are  primarily  awarded  through a  competitive  bidding
process.  Contractual relationships with the Company's principal customers vary.
More than one-half of the Company's  casting business is derived from multi-year
contracts, typically three years in length. Under these contracts, the Company's
customers  agree to order from the  Company,  and the Company  agrees to supply,
specified  percentages  of customer  requirements  for certain parts at specific
pricing over the life of the contracts.  The customers are not required to order
fixed  numbers of parts,  although  pricing may be subject to certain  threshold
quantities. Some of these contracts include provisions requiring specified price
reductions  over the term of the contract,  based on lower  production  costs as
programs mature, shared benefits from other cost reductions resulting from joint
production  decisions,   and  negotiated   reductions.   The  Company  typically
renegotiates these contracts during the


                                       3
<PAGE>

last year of the contract period, and during the process,  customers  frequently
solicit bids from the Company's competitors.  See "Customer Base", "Competition"
and "Pricing Pressures" in "Cautionary Statement", pages 6-8.

BACKLOG

The  Company's  backlog of orders as of December  31, 1999 and December 31, 1998
was $765 million and $877 million,  respectively.  Because of the short lead and
delivery times often involved, backlog may not be a significant indicator of the
Company's future performance.

RESEARCH AND DEVELOPMENT

The Company has made a  substantial  investment in research and  development  to
establish technology leadership in the investment casting industry.  The Company
believes it has significant  opportunities for growth by developing new products
and new  applications,  which  offer its  customers  improved  quality,  greater
performance and significant cost savings.  These products include turbogenerator
components,   airframe  structural  components  manufactured  using  metal  mold
processes,   new  thermal  barrier  coatings  and  titanium  aluminide  airframe
castings.

A portion of the Company's total research and development  budget comes from the
Company's  customers,  which regularly retain the Company for specific projects.
The Company  also  provides  research  and  development  services by contract to
governmental  agencies.  Its research center staff includes 75 degreed engineers
and scientists.  The Company's  research and development  expenses for the years
ended  December 31, 1999,  1998 and 1997 were $19.9  million,  $20.2 million and
$17.6  million,  respectively.  The amount  spent  during the same  periods  for
customer-sponsored  research and development  (including U.S. government funded)
was $12.9 million, $15.3 million and $15.8 million, respectively.

COMPETITION

The Company  believes it has a majority  market  share in the overall  worldwide
aerospace and IGT turbine engine airfoil  investment  casting market.  Precision
Castparts Corp.  ("PCC"), a publicly held company based in Portland,  Oregon, is
the Company's primary competitor.  The Company believes that the Company and PCC
account  for most of the  total  aerospace  turbine  engine  and IGT  investment
casting production,  except for captive foundries owned by three customers.  The
Company competes with PCC and other smaller participants  primarily on the basis
of technological  sophistication,  quality, price, service and delivery time for
orders from large,  well-capitalized  customers with  significant  market power.
Certain  of the  Company's  customers,  principally  in  Europe,  have their own
investment casting foundries,  which produce parts similar to those manufactured
by the  Company.  The  Company  knows  of no  plans by its  major  customers  to
establish new captive facilities,  nor any significant  expansion plans by those
customers  that  have such  foundries  now.  See  "Competition"  in  "Cautionary
Statement," page 7.

The Company's aluminum casting operations compete with a large number of smaller
competitors, also on the basis of price, quality and service.

See "Major  Customers",  page 3, for  discussion of  competition in the contract
award process.

ENVIRONMENTAL MATTERS

The Company is subject to comprehensive and changing  environmental  laws, which
are discussed more fully in "Environmental Laws" in "Cautionary Statement", page
9.

In connection with the Acquisition,  Pechiney,  S.A. indemnified the Company for
environmental  liabilities  relating to Howmet Corporation  stemming from events
occurring or conditions  existing on or prior to the Acquisition,  to the extent
that such liabilities exceed a cumulative $6 million. This

                                       4
<PAGE>

threshold has not yet been reached.  This indemnification  applies to all of the
environmental matters discussed in the next two paragraphs.  It is probable that
changes in any of the accrued  liabilities  discussed in the next two paragraphs
will result in an equal change in the amount of the  receivable  from  Pechiney,
S.A. pursuant to this indemnification.

The Company has  received  test  results  indicating  levels of  polychlorinated
biphenyls  ("PCBs")  at its  Dover,  New  Jersey  facility  which  will  require
remediation.  These levels have been  reported to the New Jersey  Department  of
Environmental Protection (the "NJDEP"), and the Company is preparing a work plan
to define the risk and to test possible clean-up options.  The statement of work
must be  approved  by the NJDEP  pursuant  to an  Administrative  Consent  Order
entered into between the Company and the NJDEP on May 20, 1991 regarding  clean-
up of the site.  Various  remedies are possible and could  involve  expenditures
ranging  from $3 million to $22 million or more.  The Company has  recorded a $3
million  long-term  liability  as of  December  31,  1999 and $2  million  as of
December 31, 1998 for this matter. The  indemnification  discussed above applies
to the costs associated with this matter.

Besides the  above-mentioned  remediation  work required at the Company's Dover,
New Jersey plant, liabilities exist for clean-up costs associated with hazardous
materials at seven other on-site and off-site locations. The Company has been or
may  be  named  a  potentially   responsible   party  under  the   Comprehensive
Environmental Response,  Compensation and Liability Act or similar state laws at
these  locations.  At December  31,  1999,  $4 million of accrued  environmental
liabilities  are  included  in the  consolidated  balance  sheet for these seven
sites. The December 31, 1998 consolidated balance sheet includes $4.2 million of
accrued  liabilities for nine such sites.  The  indemnification  discussed above
applies to these costs.

In  addition  to the  above  environmental  matters,  and  unrelated  to  Howmet
Corporation,  Howmet Holdings  Corporation  ("Holdings") and Pechiney,  S.A. are
jointly and severally liable for  environmental  contamination and related costs
associated with certain  discontinued mining operations owned and/or operated by
a  predecessor-in-interest  until the early 1960's.  These  liabilities  include
approximately  $7 million in remaining  remediation and natural  resource damage
liabilities  at the Blackbird Mine site in Idaho and a minimum of $10 million in
investigation  and  remediation  costs at the  Holden  Mine site in  Washington.
Pechiney, S.A. has agreed to indemnify the Company for such liabilities in full.
In  connection  with these  environmental  matters,  the Company  recorded a $17
million liability and an equal $17 million receivable from Pechiney,  S.A. as of
December 31, 1999 and $26 million for both the  liability  and  receivable as of
December 31, 1998.  Pechiney, S.A. is currently  funding all amounts  related to
these liabilities.

Estimated  environmental  costs  are  not  expected  to  impact  materially  the
financial position or the results of the Company's operations in future periods.
However,  environmental  clean-ups are  protracted  in length and  environmental
costs in future  periods  are  subject to changes in  environmental  remediation
regulations.   Any  costs   which  are  not  covered  by  the   Pechiney,   S.A.
indemnifications  and which are in excess of amounts  currently  accrued will be
charged to operations in the periods in which they occur.

The  Company  believes  that  Pechiney,  S.A.  will  honor  its  indemnification
obligations described in the preceding  paragraphs.  In the event that Pechiney,
S.A. does not honor its obligations, the Company would likely be responsible for
the foregoing  environmental  matters and the cost of  addressing  those matters
could be material.

EMPLOYEES

As of December 31, 1999, the Company had approximately 11,500 employees.


                                       5
<PAGE>





                              CAUTIONARY STATEMENT
                         FOR PURPOSES OF THE SAFE HARBOR
                      PROVISIONS OF THE PRIVATE SECURITIES
                          LITIGATION REFORM ACT OF 1995

The Company  wishes to inform its investors of the following  important  factors
that in some cases have affected,  and in the future could affect, the Company's
results of  operations,  and that could cause the  Company's  future  results of
operations,  financial  condition or liquidity to differ  materially  from those
expressed in any forward-looking statements made by or on behalf of the Company.
Such statements include those relating to pricing,  competition effects,  market
structure,  contracting  practices,  developmental  projects,  and environmental
conditions,  among others. The words "expect," "project," "estimate," "predict,"
"anticipate,"  "believes,"  "plans," "intends," and similar expressions are also
intended to identify forward-looking statements.

Disclosure of these factors is intended to permit the Company to take  advantage
of the "safe harbor" provisions of the Private Securities  Litigation Reform Act
of 1995.  Many of these factors have been  discussed in prior SEC filings by the
Company or by Howmet Corporation.

Although  the Company has  attempted  to list  comprehensively  these  important
cautionary  factors,  the Company wishes to caution investors that other factors
may prove to be important  in affecting  the  Company's  results of  operations,
financial  condition  and  liquidity.  The Company  undertakes  no obligation to
update or revise  any  forward-looking  statements,  whether  as a result of new
information, future events or otherwise.

INDUSTRY ECONOMIC CONDITIONS AND CYCLICALITY

The Company currently derives  approximately  forty per cent of its revenue from
the commercial  aerospace industry.  This is a cyclical business.  Although 1999
was a record year for aircraft  deliveries,  orders that year were substantially
below those in each of the prior three years.  The Company's sales to commercial
original equipment  manufacturers ("OEMs") lead the market by approximately nine
months. Hence, the Company's component sales have been adversely affected due to
decreased aircraft production rates for 2000. Any developments in the commercial
aerospace  market  resulting in a reduction in air travel,  the rate of aircraft
engine  deliveries,  or customer or airline part  inventory  adjustments  in the
future could materially  adversely affect the Company's  financial condition and
results  of  operations.   Such  developments  could  include  cancellations  or
deferrals of scheduled deliveries,  substantial increases in aircraft fuel costs
or international political factors.

The Company's  revenues from its  industrial  gas turbine  ("IGT")  castings are
subject to changes in global electric power demand and the availability and cost
of natural gas used to fuel these  machines.  Changing  economic  and  political
conditions in the United States and in other countries could also delay delivery
of IGT  engines,  which could have a material  adverse  effect on the  Company's
operations.

CUSTOMER BASE

A substantial portion of the Company's business is conducted with a small number
of large aerospace and industrial gas turbine  customers,  including The General
Electric Company through its aircraft engine and power systems groups, ABB Power
Generation Ltd., and United Technologies  Corporation's Pratt & Whitney aircraft
operations.  The  Company's  top ten  customers in the  aggregate  accounted for
approximately  76% of 1999  net  sales.  More  than  one-half  of the  Company's
business  is  derived  from  multi-year  contracts  with  its  customers,  which
typically  last  three  years  and  generally  give the  Company  the  right and
obligation to fill a specified  percentage of the  customer's  requirements  but
generally do not provide the Company  with any minimum  order  commitments.  The
Company  usually  renegotiates  these  contracts  during  the  last  year of the
contract period, and, during
                                       6
<PAGE>

the renegotiation process,  customers frequently solicit bids from the Company's
competitors.  Some of the contracts  require specified price reductions over the
term of the contract based on lower production costs as programs mature,  shared
benefits from other cost reductions  resulting from joint production  decisions,
and negotiated reductions.

Military  and  defense  contractor  sales  comprised  approximately  14%  of the
Company's 1999 sales.  United States  defense  spending in markets served by the
Company has  declined  since the 1980's.  If  reductions  in defense  budgets or
military aircraft procurement continue,  these reductions could adversely affect
the Company's  results of  operations.  Furthermore,  in the event of failure to
comply with the federal  statutes and  regulations  relating to these  sales,  a
proceeding,  including one relating to the matters described below, could result
in fines,  penalties,  compensatory  and treble  damages,  the  cancellation  or
suspension of payments under one or more U.S. government  contracts,  debarment,
or ineligibility for future contracts or subcontracts funded in whole or in part
with federal funds.

Starting  in late 1998,  the  Company  discovered  certain  product  testing and
specification  non-compliance  issues at the  Montreal  (Canada)  and  Bethlehem
(Pennsylvania) operations of its Howmet Aluminum Casting subsidiaries.  In 1999,
the  Company  discovered  several  additional  instances  of other  testing  and
specification  non-compliance at its Hillsboro (Texas) aluminum casting facility
and at the Montreal and Bethlehem operations. The Company has notified customers
and  the  appropriate  government  agencies  and  has  substantially   completed
correction  of  these  issues.  The  Company  knows  of no  in-service  problems
associated with any of these issues.  In addition,  Howmet Aluminum  Casting has
been,  and expects to continue for some time to be, late in delivery of products
to certain customers, resulting in lower sales. However, delivery performance in
2000 is expected to improve significantly.

The Defense  Criminal  Investigative  Service (the "DCIS"),  in conjunction with
other  agents  from  the  Defense   Department   and  NASA,  has  undertaken  an
investigation  with respect to certain of the foregoing  matters at the Montreal
and  Bethlehem   facilities.   The  DCIS  has  informed  the  Company  that  the
investigation concerns possible violations of the False Claims Act and the False
Statements Act, as well as possible criminal penalties. The Company is unable to
determine  definitively  what,  if any,  civil or  criminal  penalties  might be
imposed as a result of the investigation.

All customer claims relating to the foregoing  matters either have been resolved
or, in the Company's judgment, will be resolved within existing reserves.

The Company  believes  that  additional  cost for the foregoing  matters  beyond
amounts  accrued,  if any,  would  not have a  material  adverse  effect  on the
Company's financial position,  cash flow, or annual operating results.  However,
additional  cost when and if accrued may have a material  adverse  impact on the
quarter in which it may be accrued.

On August 6, 1999, the Company entered into an Administrative Agreement with the
U.S. Air Force terminating Notices of Proposed Debarment issued on March 1, 1999
relating  to certain of the  foregoing  matters.  The  Administrative  Agreement
permitted  the  affected  facilities  to resume  accepting  new U.S.  government
contracts and subcontracts.

COMPETITION

The Company competes against Precision  Castparts Corp.  ("PCC"),  its principal
competitor,   and  other  investment  casting   manufacturers.   Competition  in
investment casting is based primarily on technological sophistication,  quality,
price,  service and delivery for orders from large,  well-capitalized  customers
with significant  market power. The Company believes that it and PCC account for
most of the total aerospace turbine engine and IGT component casting production,
except for captive  foundries owned by three customers.  Because  competition is
based to a significant  extent on  technological  capabilities  and innovations,
there can be no assurance that PCC or any of the


                                       7
<PAGE>

Company's other  competitors  will not develop  products  and/or  processes that
would give them a competitive advantage in the Company's markets.

PRICING PRESSURES

The Company has  experienced  pressure from all of its major customers for price
reductions.  This pressure is the result of the competitive environment in which
the Company's  OEM  customers are operating in the selling of their  engines  in
the  worldwide  market.  Because  winning an initial  order by an OEM  generally
provides it with a long-term  profitable market for sales of spare parts, fierce
competition  exists for these  orders and has  resulted in reduced  prices which
OEMs receive in the market.  Pressure for reduced prices is then exerted by OEMs
on their  suppliers.  The future  profitability of the Company will depend upon,
among  other  things,  its  ability to continue to reduce its per unit costs and
maintain a cost structure that will enable it to remain cost-competitive.

AVAILABILITY AND COST OF RAW MATERIALS

Raw  materials  used by the  Company  include a number of metals  and  minerals,
including titanium,  hafnium, aluminum, nickel, cobalt, molybdenum and chromium,
among others. Prices of these materials can be volatile, and the Company engages
in advance purchases of some of these materials under certain market conditions,
and passes  certain  price  fluctuations  through to  customers  pursuant to its
long-term agreements. The Company ordinarily does not otherwise attempt to hedge
the price risk of its raw materials.  For some of the supplies and raw materials
it purchases, including certain metals, the Company has no fixed price contracts
or arrangements.  Commercial deposits of certain metals, such as cobalt, nickel,
titanium and molybdenum, which are required for the alloys used in the Company's
precision castings,  are found in only a few parts of the world, and for certain
materials only single sources are readily available. The availability and prices
of these metals and other materials may be influenced by private or governmental
cartels,  changes in world politics,  unstable governments in exporting nations,
production interruptions,  inflation and other factors. Although the Company has
not experienced  significant  shortages of its supplies and raw materials in the
past twenty years,  there can be no assurance that such shortages will not occur
in the future.  Any such shortages or price  fluctuations  could have a material
adverse effect on the Company.

CONTROL BY AND RELATIONSHIP WITH CORDANT

Cordant Technologies Inc. ("Cordant") beneficially owns 84.6% of the outstanding
Common Stock of the Company.  Accordingly,  subject to the  Corporate  Agreement
referred  to below,  Cordant is able to control the  election  of the  Company's
Board of Directors  and exercise a controlling  influence  over the business and
affairs of the Company (including any determinations  with respect to mergers or
other  business   combinations   involving  the  Company,   the  acquisition  or
disposition  of assets by the Company,  the  incurrence of  indebtedness  by the
Company,  the issuance of any additional Common Stock or other equity securities
of the Company,  the repurchase or redemption of Common Stock of the Company and
the payment of dividends with respect to the Common Stock),  and will be able to
do so as long as it  continues  to own more than 50% of the voting  power of the
Company's capital stock.  Similarly,  Cordant has the power to determine matters
submitted  to a vote of the  Company's  stockholders  without the consent of the
Company's  other  stockholders,  has the power to  prevent  or cause a change in
control of the Company and could take other  actions  that might be favorable to
Cordant.

Cordant has entered into a Corporate  Agreement with the Company relating to the
terms under which Cordant may acquire  additional shares of the Company's Common
Stock. See "Arrangements  Among the Company and Cordant - Corporate  Agreement,"
page 23.

On November 12, 1999,  Cordant made a proposal to acquire all of the outstanding
shares of Common  Stock of the  Company  not  currently  owned by  Cordant ( the
"Publicly Held  Shares")  for a price of  $17.00  per  share  in  cash,  and the
proposal was referred to the Independent Directors

                                       8
<PAGE>

Committee of the Company's  Board of Directors (the  "Committee").  On March 10,
2000,  Cordant  informed the Committee that it was willing to increase its offer
to $18.75 per share, but following further discussions no agreement was reached.
On March 14, 2000, Alcoa Inc. ("Alcoa") and Cordant announced an agreement under
which Alcoa  agreed to acquire  Cordant.  Alcoa has advised the Company  that it
intends to enter into  discussions  with the Committee to pursue the acquisition
of the Publicly Held Shares of the Company. Such an acquisition would be subject
to the Corporate Agreement referred to above.

POTENTIAL CONFLICTS OF INTEREST ARISING FROM CORDANT RELATIONSHIP

As a result of  Cordant's  ownership  of  Common  Stock of the  Company  and its
intercompany  agreements  with the Company or  otherwise,  various  conflicts of
interest  between the Company and Cordant  could arise.  The Company and Cordant
have entered into an intercompany services agreement with respect to services to
be  provided  by  Cordant  to the  Company.  Under the  agreement,  the  Company
generally  pays Cordant its cost plus a fee, as  determined by Cordant from time
to time on a basis  consistent with past practice.  This arrangement is designed
to  control   administrative  costs  and  avoid  duplication  of  administrative
functions.  The Company paid Cordant $1,875,000 to cover both its costs and fees
for the year ended December 31, 1999. Under the arrangement,  Cordant also bills
the Company  directly,  with no "mark-up,"  for some services  provided by third
parties.

Ownership  interests  of directors or officers of the Company in Common Stock of
Cordant,  if any,  or service as a director  or officer of both the  Company and
Cordant  could create or appear to create  potential  conflicts of interest when
directors  and  officers  are faced with  decisions  that  could have  different
implications  for  the  Company  and  Cordant.   The  Restated   Certificate  of
Incorporation  of  the  Company  includes  certain  provisions  relating  to the
allocation of business  opportunities  that may be suitable for both the Company
and Cordant. In addition, under Delaware corporate law, officers,  directors and
controlling  stockholders  of the Company have certain  fiduciary  duties to the
Company's stockholders.

ENVIRONMENTAL LAWS

The Company is subject to comprehensive and changing federal,  state,  local and
international laws, regulations and ordinances (together,  "Environmental Laws")
governing activities or operations that may have adverse environmental  effects,
such as discharges to air and water, as well as handling and disposal  practices
for solid and hazardous wastes. Environmental Laws also impose liability for the
costs of cleaning up, and certain damages  resulting from, sites of past spills,
disposals or other releases of hazardous  substances  and  materials,  including
liability  under the  Comprehensive  Environmental  Response,  Compensation  and
Liability Act of 1980 ("CERCLA," the federal "Superfund"  statute),  and similar
state  statutes  for  the   investigation   and  remediation  of   environmental
contamination at properties owned and/or operated by the Company and at off-site
locations  where it has arranged for the disposal of hazardous  substances.  The
Company is involved from time to time in legal proceedings involving remediation
of  environmental  contamination  from past or  present  operations,  as well as
compliance with  environmental  requirements  applicable to ongoing  operations.
There  can be no  assurance  that  material  costs  or  liabilities  will not be
incurred  in  connection  with  any  such  proceedings,   claims  or  compliance
requirements or in connection with currently unknown environmental liabilities.

If it is  determined  that  the  Company  is  not  in  compliance  with  current
Environmental Laws, the Company could be subject to penalties. The amount of any
such penalties could be material. In addition, the Company uses solvents, waxes,
metals, caustics, acids, oils and other hazardous substances, and as is the case
with manufacturers in general, if a release of hazardous substances occurs on or
from the Company's properties or from an off-site disposal facility attributable
to the  Company,  the  Company may be held liable and may be required to pay the
cost of  remedying  the  condition.  The amount of any such  liability  could be
material.


                                       9
<PAGE>

The Company's  facilities have made, and will continue to make,  expenditures to
comply with current and future  Environmental Laws. The Company anticipates that
it could incur  additional  capital and operating  costs in the future to comply
with  existing  Environmental  Laws  and new  requirements  arising  from new or
amended statutes and regulations. In addition, because the applicable regulatory
agencies   have  not  yet   promulgated   final   standards  for  some  existing
environmental  programs, the Company cannot at this time reasonably estimate the
cost for compliance with these additional  requirements.  The amount of any such
compliance costs could be material.

Certain potential sources of liability under the Environmental  Laws, as well as
other  information  relating to environmental  matters,  including rights of the
Company  to  indemnification   for  substantial   portions  of  these  potential
liabilities, are described under "Business - Environmental Matters", pages 4-5.

FOREIGN CURRENCY HEDGING

The Company  maintains a policy of hedging  foreign  currency  transactions  and
economic  exposures for foreign currency  denominated  obligations.  The Company
does not hedge against net asset values for its foreign  investments  attributed
to its  foreign  subsidiaries  valued in local  currencies.  To the  extent  the
Company's  foreign  revenue base grows and net asset base expands as a result of
increased foreign business  activity,  the Company's exposure to adverse foreign
currency rate movement  increases.  The Company's foreign currency risk exposure
is also subject to the  stability of the foreign  currency of the country  where
the Company maintains foreign operations or does business.  The Company seeks to
minimize  the impact of adverse  foreign  currency  rate  movements  through its
hedging  policy.  The success of the  hedging  policy in  preventing  an adverse
financial result on operations in any accounting period cannot be assured.

YEAR 2000 COMPLIANCE

The Company has not  experienced  any  disruption  in  operations as a result of
computer  software  issues  associated  with the  Year  2000.  Only a few  minor
problems have been discovered so far, and all of them have been addressed. There
can be no  guarantee  that the  systems  of other  companies  on which  Howmet's
systems rely will continue to operate  successfully.  This could have an adverse
effect on the Howmet systems.  However,  at this point, the Company has not been
made aware of material  problems.  The Company has not  experienced any failures
within its supply chain.

The  estimated  cost at  completion  for all phases of the  Company's  Year 2000
project is $16.2 million. An estimated $6.7 million (41%) of this expense is for
information systems labor and miscellaneous project costs; these costs are being
expensed  as  routine  information  systems  maintenance  as  incurred  over the
three-year  duration of the project.  Another $6.9 million (43%) is for software
purchase  and  implementation  costs for  applications  that were  installed  as
scheduled or, on an expedited basis, for Year 2000 purposes.  An additional $2.6
million (16%) is for infrastructure upgrades or replacement.

Approximately $15.9 million (98%) had been expended as of December 31, 1999; the
Company expects to spend $0.3 million (2%) in 2000.

EURO CONVERSION

The Company  implemented a strategy during 1999, which would allow it to operate
in a Euro  environment  during the  transition  period,  January 1, 1999 through
December 31, 2001,  and after full Euro  conversion,  effective July 1, 2002. To
date the Company has not experienced and does not anticipate any material impact
from the Euro  conversion on its  operations,  its  competitive  position or its
computer  software  plans.  Also,  the Company  does not expect any  significant
changes to its  currency  hedging  program  and does not expect any  significant
increases in its foreign exchange exposure.

                                       10
<PAGE>

ITEM 2 -- PROPERTIES

The Company has twenty-one  facilities in the United States, four in France, two
in the United Kingdom,  two in Canada and one in Japan.  The Company is carrying
out capacity  expansions for airfoil production for aerospace and industrial gas
turbine  products.  Completed  and  planned  facility  expansion  is  considered
sufficient to meet the Company's operating needs. The facilities described below
are all owned by Howmet  Corporation  or its  subsidiaries,  except as otherwise
indicated.  During  1999,  additions to property,  plant and  equipment  totaled
$112.9 million.


Location (No. of Facilities)      Size  (Sq. Ft.)
----------------------------      ---------------
UNITED STATES
Bethlehem, Pennsylvania            47,200         (leased)
Branford, Connecticut             138,420
City of Industry, California       50,000         (leased)
Cleveland, Ohio                   100,000
Dover, New Jersey (2)             245,537
                                  117,000
Hampton, Virginia (2)             253,157
                                  117,069
                                   15,700         (leased)
Hillsboro, Texas                   68,000         (leased)
LaPorte, Indiana (2)              186,100
                                  132,748         (a)
Morristown, Tennessee             111,435
Whitehall, Michigan (7)           469,254
                                  108,897
                                  114,740
                                   86,722
                                   58,926
                                   61,015
                                   23,700         (b)
Wichita Falls, Texas              255,466
Winsted, Connecticut               81,000

FOREIGN
Dives, France                     255,858
Evron, France                      86,000
Exeter, U.K. (2)                  184,350
                                   68,760
                                   66,800         (leased)
Gennevilliers, France              47,361
Georgetown, Ontario                37,000         (leased)
Le Creusot, France                156,077
Laval, Quebec                     189,860
Montreal, Quebec                   11,200         (c)
                                   99,900         (leased)(c)
Terai, Japan                       53,000
----------
(a)Howmet Transport Services warehouse
(b)Facility  owned by the  Company  and  operated  by and  leased  to its  joint
   venture company, Sprayform Technologies International, L.L.C.
(c)Howmet  Aluminum's  Montreal,  Canada  aluminum  casting  operation is in the
   process  of  moving  from the  Montreal  facility  listed  above to the newly
   constructed  189,860  square  foot plant in Laval,  Quebec.  Howmet  Aluminum
   expects  to  complete  the move by the end of 2000 and  vacate  the  Montreal
   premises.

                                       11
<PAGE>

ITEM 3 -- LEGAL PROCEEDINGS

The Company is a party to certain pending  proceedings  regarding  environmental
matters.  See "Business - Environmental Matters", pages 4-5.

Starting in September  1998,  the Company's  senior  management  became aware of
possible  violations of the U.S.  Anti-Kickback Act of 1986 by several of Howmet
Aluminum's  employees.  This law  prohibits  receiving  payments  in return  for
favorable   treatment  in   connection   with  U.S.   government   contracts  or
subcontracts.  The Company promptly  commenced an investigation and reported the
matter to, and is  cooperating  with,  the U.S.  Department  of Defense  and the
Quebec Provincial police.

Starting  in  late  1998,  the  Company  also  discovered  certain  testing  and
specification  non-compliance  issues at three of its  Howmet  Aluminum  casting
operations.  See "Customer Base" in "Cautionary Statement", page 7.

On August 6, 1999, the Company entered into an Administrative Agreement with the
U.S. Air Force terminating Notices of Proposed Debarment issued on March 1, 1999
relating  to certain of the  foregoing  matters.  The  Administrative  Agreement
permitted  the  affected  facilities  to resume  accepting  new U.S.  government
contracts and subcontracts.

Shortly after Cordant  announced,  on November 12, 1999, its proposal to acquire
all of the outstanding shares of Common Stock of the Company not currently owned
by Cordant (See "Business - Possible Ownership Changes," page 1), eight separate
but nearly  identical  lawsuits  were filed in the Court of Chancery of Delaware
against  the  Company,  Cordant  and  each  member  of the  Company's  Board  of
Directors.  The  plaintiffs  are  shareholders  of the Company who complain that
Cordant's  offer for their  shares in the Company is not for an adequate  price.
The plaintiffs  request the following  relief:  certification  as a class action
with themselves designated as Class Representatives; an order enjoining Cordant,
the Company and its Board of Directors from proceeding with the transaction; and
money  damages  and the costs of  bringing  the  lawsuit.  On the  motion of the
defendants,  the Court  has  consolidated  the  cases  under the style of "In re
Howmet International  Shareholders  Litigation" and directed that the plaintiffs
file an Amended Complaint reflecting the consolidation. The Company is defending
these  actions and  believes  that any outcome  will not result in a  materially
adverse impact to the financial position of the Company.

The Company, in its ordinary course of business, is party to various other legal
actions,  which management  believes are routine in nature and incidental to its
operations.  Management  believes  that the outcome of any of these  proceedings
will  not  have a  material  adverse  effect  upon its  results  of  operations,
financial condition or liquidity.

ITEM 4 -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were  submitted to a vote of the  Company's  stockholders  during the
fourth quarter of 1999.


PART II

ITEM 5 -- MARKET FOR COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER
            MATTERS

 (a)  Market Information.

The  Company's  Common  Stock,  $.01 par  value,  trades  on the New York  Stock
Exchange.  The Transfer  Agent and Registrar  for the  Company's  stock is First
Chicago Trust Company of New York, One North State Street, 11th Floor,  Chicago,
Illinois 60602. Other information required with respect

                                       12
<PAGE>

to  this  Item 5 (a) is  included  in the  section  "Recent  Market  Prices  and
Dividends" on page F-38 hereof.

 (b)  Holders.

As of March 16,  2000 there  were 399  stockholders  of record of the  Company's
Common Stock.

 (c)  Dividends.

During  1998 and 1999 the  Company  did not  declare or pay any  dividends.  The
Company  does not  expect  to pay cash  dividends  on its  Common  Stock for the
foreseeable future.  Certain of the Company's debt instruments contain financial
covenants  that could  limit the  payment  of  dividends  by the  Company to its
stockholders.  Information  with  respect  to  restrictions  on the  payment  of
dividends is incorporated  by reference to information  contained in the section
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations - Liquidity and Capital Resources" on pages F-34 to F-35 hereof.


ITEM 6 -- SELECTED FINANCIAL DATA

Information  required  with  respect to this Item 6 is  included  in the section
"Selected Financial Data" on page F-39 hereof.


ITEM 7 --  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND
             RESULTS OF OPERATIONS

Information  required  with  respect to this Item 7 is  included  in the section
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations" on pages F-29 to F-38 hereof.

ITEM 7A -- QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Information  required  with  respect to this Item 7A is  included in the section
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations -- Market Risk" on pages F-35 to F-37 hereof.

ITEM 8 -- FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial  statements  required with respect to this Item 8 are contained in
the Consolidated Financial Statements of the Company included on pages F-1 to F-
28  hereof.  See  "Item 14 (a)  Documents  Filed as Part of this  Report  -- (1)
Financial Statements" on page 26.

The supplemental  financial  information required with respect to this Item 8 is
filed as "Financial  Statement  Schedules" pursuant to Item 14. See "Item 14 (a)
Documents Filed as Part of this Report -- (2) Financial Statement  Schedules" on
page 26.

Information with respect to quarterly  financial  highlights is included in Note
24 of "Notes to Consolidated Financial Statements" on page F-27 hereof.

ITEM 9 --  CHANGES IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
             FINANCIAL DISCLOSURE

None.



                                       13
<PAGE>

PART III

ITEM 10 -- DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

DIRECTORS

The Board of Directors is currently comprised of seven Directors.  The Company's
Amended and Restated  Certificate of  Incorporation  and By-Laws provide for all
members of the Board of Directors to be elected annually.

The seven  Directors  elected  at the 1999  Annual  Meeting  are  listed  below.
Directors will serve until the Annual Meeting of  Stockholders in 2000 and until
their successors have been elected and have qualified.

James R. Wilson,  age 59, has served as a Director of the Company  since October
1995; he was elected  Chairman of the Board of Directors on October 13, 1997. He
served as a Vice  President of the Company from October 1995 to October 1997. He
has served as Chairman of the Board,  President and Chief  Executive  Officer of
Cordant  Technologies  Inc.  ("Cordant",  formerly  Thiokol  Corporation)  since
October  1995 and  President  and Chief  Executive  Officer from October 1993 to
October  1995.  He has served as a Director of Cordant  since  October  1993. He
joined Cordant in 1989 as Vice President and Chief Financial  Officer and became
Executive  Vice  President  and Chief  Financial  Officer in 1992.  Besides  its
ownership  of  a  controlling  interest  in  the  Company,  Cordant's  principal
businesses  are the  manufacture  of solid rocket  propellent and industrial and
aerospace fastener systems.  Mr. Wilson is a Director of Cooper Industries Inc.,
The BF Goodrich Co. and First Security Corporation, and is a member of the Board
of  Trustees of the  College of  Wooster.  He holds a Bachelors  degree from the
College  of  Wooster  and a Masters  of  Business  Administration  from  Harvard
University.

Richard L.  Corbin,  age 54, was  elected a Director  of the  Company in October
1995. He served as Vice President and Treasurer of the Company from October 1995
to  October  1997.  Mr.  Corbin  has been  Executive  Vice  President  and Chief
Financial  Officer of Cordant since November 1998, and Senior Vice President and
Chief Financial Officer of that company before that since May 1994. From 1991 to
1994 Mr.  Corbin  served  as Chief  Financial  Officer  and  Vice  President  of
Administration of the Space Systems Division of General Dynamics Corporation,  a
diversified  defense  contractor,  which he  joined  in 1974.  Mr.  Corbin  is a
director of OEA, Inc.

Edsel D. Dunford, age 64, was elected a Director of the Company in January 1996.
He served as President and Chief Operating  Officer of TRW, Inc., a manufacturer
of automotive  parts,  spacecraft and information  systems,  from 1991 until his
retirement in December  1994. He served as Executive  Vice President and General
Manager of TRW Space and Defense  Business from 1987 to 1991.  Mr.  Dunford is a
Director of Cordant, Cooper Tire & Rubber Company and National Steel Corporation
and is a trustee at the  University of California  at Los Angeles.  Mr.  Dunford
holds a Bachelor  of Science  degree from the  University  of  Washington  and a
Masters of Engineering degree from the University of California at Los Angeles.

James R.  Mellor,  age 69, was elected a Director of the Company on December 15,
1997.  Mr.  Mellor was  Chairman of the Board of Directors  and Chief  Executive
Officer  of General  Dynamics  Corporation  from 1993  until June 1997,  when he
retired. Mr. Mellor joined General Dynamics in 1981 as Executive Vice President,
Commercial  Systems and Corporate  Planning,  became  Executive Vice  President,
Marine,  Land Systems and  International  in 1986 and became President and Chief
Operating  Officer in 1990.  He was President of AM  International  from 1977 to
1981 and  worked  from  1958 to 1977 at  Litton  Industries  in  various  senior
management positions,  ultimately as Executive Vice President.  He is a Director
of General Dynamics Corporation, Bergen Brunswig Corporation,  Computer Sciences
Corporation, Pinkerton's Inc., and USEC Inc.

D. Larry  Moore,  age 63, was elected a Director of the Company on December  15,
1997. He was the

                                       14
<PAGE>

President  and  Chief  Operating  Officer  of  Honeywell,  Inc.,  an  electronic
automation  and  controls  systems  manufacturer,  from  April  1993  until  his
retirement  in June  1997.  Joining  Honeywell  in  1986,he  served  in  various
executive  positions  including  Executive  Vice  President and Chief  Operating
Officer from 1990 to 1993. Dr. Moore is a Director of Cordant, Geon Company, and
Reynolds Metals Company. Dr. Moore holds a Ph.D. in Economics from Arizona State
University   and  a  Bachelor   of  Science   degree  and  Masters  in  Business
Administration from the University of Arizona.

David L. Squier,  age 54, has served as a Director of the Company since December
1995.  He was elected  President and Chief  Executive  Officer of the Company on
October 13, 1997. He has been  President and Chief  Executive  Officer of Howmet
Corporation,  which manufactures  investment  castings primarily for gas turbine
engines,  since 1992. Mr. Squier began his association with Howmet  Corporation,
when he joined the Corporate Planning  department of its predecessor in December
1971.  He was involved in  manufacturing  management  from 1976 to 1978,  became
General Manager of Howmet Corporation's  Wichita Falls Casting facility in 1979,
and was  promoted to Vice  President  of  Operations  in 1983.  He was elected a
Director of Howmet Corporation in 1987.

James D. Woods,  age 68, was  elected a Director of the Company on December  15,
1997.  He is  Chairman  Emeritus  of Baker  Hughes  Incorporated,  a provider of
products and services for the oil, gas,  wastewater and base metals  industries.
He was Chairman of the Board,  President  and Chief  Executive  Officer of Baker
Hughes  Incorporated  from 1989 to January 1997. He has worked his entire career
at Baker Hughes  Incorporated  and its  affiliated  and  predecessor  companies,
including holding the position of Corporate Vice President--Finance from 1972 to
1975, Executive Vice President and Director from 1977 to 1985, President,  Chief
Operating Officer and Director from 1985 to 1986 and President,  Chief Executive
Officer and Director from 1987 to 1997 at Baker  International  and Baker Hughes
Incorporated. He is a Director of The Kroger Company, Varco International, Inc.
and Wynn's International, Inc.

EXECUTIVE OFFICERS

David L.  Squier,  age 54, has been  President  and Chief  Executive  Officer of
Howmet Corporation since 1992 and has been President and Chief Executive Officer
of the Company  since  October 1997. He has been a Director of the Company since
consummation of the Acquisition.  See further information  concerning Mr. Squier
above under "Directors".

James R.  Stanley,  age 58, was elected Chief  Operating  Officer of the Company
effective  April  1,  2000.  He has  been a  Senior  Vice  President  of  Howmet
Corporation  since  1992  and  was  Senior  Vice  President-United  States/North
American Operations of the Company from October 1997 to the present. Previous to
his employment at Howmet, Mr. Stanley was the Vice President and General Manager
of Customer  Support and  Marketing at the Textron  Turbine  Engine  Division of
Textron,  Inc.  from August 1990 to January  1992.  He also held the position of
Vice President of Operations for Textron  Lycoming and held numerous  managerial
positions for nearly 20 years at General Electric-Aircraft Engines.

Marklin Lasker,  age 62, has been a Senior Vice President of Howmet  Corporation
since February 1992 and has been Senior Vice President-International  Operations
of the Company since October 1997.  Before joining  Howmet,  Mr. Lasker was Vice
President and General Manager for International  Operations for the AlliedSignal
Turbocharger  Division  from April 1984 to  September  1991.  He also held other
managerial positions for AlliedSignal Aerospace Groups over a 20 year period.

John C.  Ritter,  age 52, has been Senior  Vice  President  and Chief  Financial
Officer of the Company since  October 1997.  From April 1996 until October 1997,
Mr.  Ritter was Vice  President-Finance  and Chief  Financial  Officer of Howmet
Corporation.  Prior to his  employment at Howmet,  he served as Vice  President,
Finance and Contracts,  for  AlliedSignal  Government  Electronics  from 1994 to
1996, and as Vice President,  Finance and  Administration  of Norden Systems,  a
subsidiary of United  Technologies  Corporation,  from 1991 to 1994. He has also
held the  positions  of Vice  President,

                                       15
<PAGE>

Finance and  Administration,  Chemical Systems Division,  and Manager,  Business
Analysis,  Pratt & Whitney  Aircraft- Government  Products  Division  of United
Technologies Corporation.

Roland A. Paul, age 63, has been Vice President-General Counsel and Secretary of
Howmet  Corporation since 1976 and has been Vice  President-General  Counsel and
Secretary of the Company since October 1997.  Mr. Paul was previously in private
practice as an attorney at law firms in New York and Paris and served as Counsel
to the United  States Senate  Foreign  Relations  Subcommittee  on United States
Security Commitments Abroad.

Nicholas J. Iuanow, age 41, has been Treasurer of the Company since May 1998. He
has been  Treasurer of Cordant  since 1994 and a Vice  President  since  October
1997. He was Assistant Treasurer of Cordant from 1989 to 1993.

B. Dennis Albrechtsen,  age 55, has been Vice  President-Manufacturing of Howmet
Corporation  since September 1997. Prior to that he held the position of General
Manager of the Howmet Whitehall  Castings  facility  beginning in 1994. Prior to
this,  he  served  Howmet  Corporation  as Vice  President,  Airfoil  Operations
beginning  in October  1988.  He has also held  managerial  positions  at Howmet
Corporation's Whitehall,  Michigan;  Dover, New Jersey; and Wichita Falls, Texas
casting plants.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

To the Company's  knowledge based on review of copies of such reports  furnished
to the Company and  written  representations,  all Forms 3, 4, and 5 required by
Section  16(a) of the  Securities  Exchange Act of 1934,  as amended,  have been
timely filed with respect to the most recently concluded fiscal year.






                                       16
<PAGE>

ITEM 11 -- EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The Summary  Compensation  Table below sets forth the compensation for the three
fiscal  years  ended  December  31,  1999,  1998 and 1997,  both  long-term  and
short-term,  for services in all capacities earned by those individuals who were
as of December 31, 1999,  either (i) the Chief Executive  Officer or (ii) one of
the other four most highly compensated executive officers of the Company and its
subsidiaries  (the  "Named  Executive  Officers").  All of  these  officers  are
employees of the Company's  subsidiary,  Howmet  Corporation,  which pays all of
their compensation.

                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>

                                                         Long-Term
                                                       Compensation
                             Annual Compensation(1)       Awards
                             ----------------------    ------------
                                                         Securities
                                                         Underlying       All Other
Name And Principal Position  Year   Salary   Bonus(2)  Options/SARs(#)   Compensation(3)
---------------------------  ----   ------   --------  ---------------   ---------------
<S>                          <C>    <C>      <C>        <C>                <C>
David L. Squier              1999   $410,000 $425,000                      $48,780
President and                1998    390,000  375,000                       44,844
Chief Executive Officer      1997    370,000  388,500   1,000,000           42,668

James R. Stanley             1999    266,019  184,000                       21,301
Senior Vice President--      1998    251,000  160,000                       20,650
North American Operations    1997    231,333  162,000     375,000           20,166

John C. Ritter               1999    243,972  168,000                       19,452
Senior Vice President and    1998    230,670  150,000                       18,758
Chief Financial Officer      1997    206,250  144,500     250,000           16,373

Marklin Lasker               1999    227,873  130,000                       20,787
Senior Vice President--      1998    216,384  125,500                       18,152
International Operations     1997    211,112  146,600     200,000           16,944

B. Dennis Albrechtsen.       1999    199,221  104,600                       15,128
Vice President--
Manufacturing                1998    186,000  103,750                       15,500
Howmet Corporation           1997    177,084  124,000     150,000           16,484
</TABLE>
----------
   (1) The column  headed "Other Annual  Compensation"  is omitted  because such
compensation  included only  perquisites  in amounts not exceeding the threshold
for disclosure required by Regulation S-K under the federal securities laws.
   (2) Amounts are reported in the year during which they were accrued, although
they were paid in the following year.
   (3)  Howmet  Corporation  makes  matching  contributions  for the first  five
percent of each  salaried  employee's  compensation  paid into its basic savings
plan. Matching  contributions of $8,000 made for each of the named executives in
1999 are included in this column.
   Prior to 1999 Howmet  Corporation  maintained excess  non-qualified  employee
benefit  plans  providing  for  payment  of  amounts  in  the  form  of  taxable
compensation  equal to the  amounts  that  would  have  been  otherwise  paid to
employees  under its basic  savings plan absent the benefit  limitations  of the
Internal  Revenue Code.  Such payments were included in this column for 1997 and
1998. This excess plan was terminated on December 31, 1998. Final payments under
it in the  following  amounts  made with respect to 1998 bonuses are included in
this column:  John C. Ritter,  $7,253;  Marklin  Lasker,  $9,393;  and B. Dennis
Albrechtsen, $2,380.
   Beginning in January 1999 the Company  established its new Executive Deferred
Savings Plan (a 401(k)  Restoration Plan). Once pre-tax limits are reached under
the 401(k) feature of the basic savings plan, further pre-tax  contributions and
company match are paid into the Executive  Deferred Savings Plan for the benefit
of the executive if he elects to  participate.  Company  matching  payments made
into this plan for 1999 in the  following  amounts are  included in this column:
David L. Squier,  $31,329;  James R. Stanley,  $13,301; John C. Ritter,  $4,199;
Marklin Lasker, $3,394; and B. Dennis Albrechtsen, $4,748.
   Howmet  Corporation  permitted  certain key  employees  to defer a portion of
their  compensation  earned in 1986-89  until  retirement  or  termination;  the
deferred  compensation  earned interest generally at the seasoned corporate bond
yield  published by Moody's  Investors  Service plus 3  percentage  points.  The
above-market  portion of this  interest  in 1999 with  respect  to Mr.  Squier's
deferred compensation was $9,451 and is included in this column.

                                       17
<PAGE>

STOCK APPRECIATION RIGHTS; STOCK OPTIONS

In May 1996, the Company  introduced a Stock  Appreciation  Rights ("SARs") plan
for key employees.  Under the plan, SARs representing approximately 5 percent of
the  Company's  equity  value were  issued to certain  members of the  Company's
management. The SARs, similar to phantom stock options, are generally payable on
the earliest to occur of the following:  (i) March 31, 2001; (ii) a merger, sale
of  substantially  all of the assets,  or  liquidation  of the Company or Howmet
Corporation,   the  Company's  wholly  owned  operating  subsidiary;  (iii)  the
acquisition  by an  unaffiliated  entity  of more than 50% of the  Company's  or
Howmet Corporation's Common Stock; or (iv) a public offering of more than 50% of
the Company's or Howmet Corporation's Common Stock. The SARs are valued based on
appreciation  in value of the Company's  Common  Stock,  as defined in the plan,
from the date of adoption of the plan to the  earliest of the  foregoing  dates.
The SARs vest in equal annual installments over a five-year period, ending March
31, 2001, based upon the passage of time and the operating performance of Howmet
Corporation,  with  acceleration  in the event of one of the earlier  triggering
events referred to above.

On December 2, 1997,  in  connection  with the public  offering of the Company's
Common Stock (the "IPO"),  the Company  amended its SARs plan (the "Amended SARs
Program") and granted stock options to participants  in the plan,  including the
Company's  executive  officers,  pursuant to a newly  adopted stock-based awards
plan (the  "Stock  Awards  Plan").  Pursuant to the Amended  SARs  Program,  the
maximum  per  share  value  of the  outstanding  SARs has  been  limited  to the
difference  between the  initial  public  offering  price and the base price per
share (generally $2) of the SARs and, in exchange for accepting such limitation,
each  holder of SARs was  granted a  non-qualified  stock  option (an "NQSO") to
purchase,  at the initial  public  offering  price of $15 per share, a number of
shares of Common  Stock equal to the number of shares with respect to which such
employee has SARs.  The NQSOs vest and become  exercisable  in 25% increments on
January 1 of each year beginning in 1999, until fully vested, and will expire on
the eighth anniversary of their granting. The Stock Awards Plan provides that in
the event of a change of  control or similar  transaction,  the plan  committee,
comprised of independent  directors,  may in its discretion take certain actions
in order to prevent dilution or enlargement of the benefit or potential  benefit
of the options. Such actions could include: adjusting the options,  accelerating
their  benefit,  permitting  them  to be  cashed  out  as if  fully  vested  and
exercisable,  or substituted for by equivalent options in a successor  company's
stock.  In addition,  pursuant to the Amended SARs Program,  the Company offered
holders of SARs the opportunity to cash out 20% of their SARs (which represented
the vested portion of the SARs) at the initial public offering price.  Employees
making this  election,  including  Mr.  Lasker,  received  their cash payment in
January 1998,  and received  NQSOs  representing  80% of the number of shares of
Common Stock with respect to which such employees had SARs immediately  prior to
making such election.


                                       18
<PAGE>

STOCK OPTIONS EXERCISED DURING FISCAL YEAR 1999

The following table presents  information  regarding the exercise during 1999 of
SARs or options to purchase shares of the Company's or Cordant's Common Stock by
the Named Executive  Officers and  information  regarding  unexercised  SARs and
options to purchase  shares of the Company's and Cordant's  Common Stock held by
the Named Executive Officers on December 31, 1999.

                   AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR1
                      AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>


                                      Number of Securities  Value Of Unexercised
                                     Unexercised Underlying     In-The-Money
                                          Options/SARs          Options/SARs
                                        At Year-End (#)2       at Year-End ($)3
                                     ---------------------  --------------------
                                         Exercisable/          Exercisable/
Name                                     Unexercisable         Unexercisable
----                                 --------------------   --------------------
<S>                    <C>               <C>                 <C>

David L. Squier.                  SARs       0/1,000,000        $0/$13,000,000
                       Company Options   250,000/750,000     765,625/2,296,875
                       Cordant Options         0/200,000 4         0/3,050,000

James R. Stanley                  SARs         0/375,000           0/4,875,000
                       Company Options    93,750/281,250       287,109/861,328
                       Cordant Options          0/50,000 4           0/762,500

John C. Ritter                    SARs         0/250,000           0/3,250,000
                       Company Options    62,500/187,500       191,406/574,219
                       Cordant Options          0/40,000 4           0/501,250

Marklin Lasker                    SARs         0/200,000           0/2,600,000
                       Company Options    50,000/150,000       153,125/459,375
                       Cordant Options          0/40,000 4           0/610,000

B. Dennis Albrechtsen             SARs         0/150,000           0/1,950,000
                       Company Options    37,500/112,500       114,844/344,531
</TABLE>
----------
1  None of the Named  Executive  Officers  exercised any stock options or SARs
   in 1999. 2 See "Stock Appreciation  Rights; Stock Options" on page 18 for a
   summary of the terms of the SARs and Company Options, including vesting and
   exercise. See "Cordant Stock  Options"  on page 21 for a  summary  of the
   terms of  these  options, including vesting and exercise, and the Revised
   Plan of Cordant with respect to these options.
3  Values of Company stock options and SARs are calculated  based on the closing
   New York Stock  Exchange  price of the Company's  Common Stock as of December
   31, 1999 ($18.0625), minus the option exercise price ($15.00) or the SAR base
   price ($2.00 for the Named  Executive  Officers),  subject to a maximum value
   for the SARs of $15 per share minus the base price. The Company stock options
   vest and  become  exercisable  in 25%  increments  on  January 1 of each year
   beginning  in 1999.  Value of  Cordant  options  is  calculated  based on the
   closing  New York  Stock  Exchange  price  of  Cordant's  Common  Stock as of
   December 31, 1999 ($33),  minus the option  exercise price ($17.75 except for
   John Ritter ($20.46875)), after giving effect to a two-for-one stock split in
   Cordant stock paid as a stock  dividend on March 13, 1998. On March 14, 2000,
   Alcoa Inc.  ("Alcoa") and Cordant announced an agreement  pursuant to which
   Alcoa would acquire the  outstanding  Cordant  shares at $57 per share in a
   tender offer and second-step  merger.  All outstanding  options to purchase
   Cordant shares will become  exercisable  upon  completion of Alcoa's tender
   offer.
4  Adjusted for the two-for-one stock split in Cordant stock paid on March 13,
   1998.




                                       19
<PAGE>


RETIREMENT PLANS

Howmet Corporation,  the Company's wholly owned operating subsidiary,  maintains
defined benefit pension plans for substantially all of its employees.  Effective
January 2, 1996, Howmet adopted the Howmet Salaried  Employees Pension Plan (the
"SEPP"),  a defined  benefit  plan that  covers  most  salaried  employees,  and
provides for continuing  benefits that had been provided  under another  defined
benefit plan (the "Pechiney  Plan") prior to the  acquisition of Howmet's parent
company,  Pechiney  Corporation  (now  Howmet  Holdings  Corporation)  by  Blade
Acquisition  Corp.  (now the  Company)  from  Pechiney  International,  a French
company, on December 13, 1995 (the "Acquisition"). The following table shows the
estimated  annual pension benefits for salaried  employees,  including the Named
Executive Officers,  payable upon retirement  (including amounts attributable to
the SEPP, the Excess  Benefit Plans and the  Supplemental  Executive  Retirement
Plans, as described  below, and including any benefit payable under the Pechiney
Plan) for the specified compensation and years of service.

                               PENSION PLAN TABLE
<TABLE>
<CAPTION>

                                      YEARS OF SERVICE
                   ----------------------------------------------------------
REMUNERATION          15        20        25        30        35        40
------------       --------  --------  --------  --------  --------  --------
<S>                <C>       <C>       <C>       <C>       <C>       <C>

$  200,000         $ 43,164  $ 57,552  $ 71,940  $ 86,328  $100,716  $111,716
   400,000           88,164   117,552   146,940   176,328   205,716   227,716
   600,000          133,164   177,552   221,940   266,328   310,716   343,716

   800,000          178,164   237,552   296,940   356,328   415,715   459,716
 1,000,000          223,164   297,552   371,940   446,328   520,716   595,104
-----------------------------------------------------------------------------
</TABLE>

As of December 31, 1999, the Named Executive Officers had the following credited
service for determining  pension benefits:  David L. Squier, 28 years;  James R.
Stanley, 7 years; John C. Ritter, 3 years; Marklin F. Lasker, 7 years; B. Dennis
Albrechtsen, 25 years.

All the Named  Executive  Officers  participate  in the SEPP.  For employees who
retired before 1997, pension benefits were based on the average earnings for the
highest five consecutive years of their final ten years of service. Compensation
included  in the final  average  earnings  for the pension  benefit  computation
included  base annual  salary and annual  bonuses but excluded  payments for all
other  compensation.  The plan in effect  prior to 1997  provided  an  increased
benefit  for  employees  with final  average  pay above  one-half  of the social
security wage base. The SEPP benefit prior to 1997 took into account the service
and compensation  earned prior to the Acquisition and was reduced by any benefit
payable under the Pechiney Plan.

Effective  January 1,  1997,  the  SEPP's  design was  changed to that of a cash
balance plan. The cash balance plan maintains  hypothetical  individual accounts
for participants. The annual amount credited to a participant's account consists
of the sum of age-based  compensation credits (7 percent for employees age 50 or
older) and interest credits,  with an additional age-based annual credit for the
years  1997-2006  for employees age 45 years and older on January 1, 1997 (being
an  additional  7  percent  for  employees  age 50 or older on that  date).  The
interest credit rate, set once annually,  is equal to the one year U.S. Treasury
constant maturities rate plus one percent. Benefits earned before 1997 under the
final average  earnings  formula  mentioned above have been converted to opening
account balances.

SEPP  benefits are payable at retirement or  termination,  at the  participant's
election. Benefits may be payable as a single life annuity, a joint and survivor
annuity, a ten year certain option, or a lump sum.

Because  the SEPP is subject to the benefit and  compensation  limits  under the
Internal  Revenue

                                       20
<PAGE>

Code (the "Code"), the Company has established two unfunded Excess Benefit Plans
that provide for payment of amounts that would have been paid to employees under
the pension formula absent the benefit and compensation limits of the Code.

The Company also  maintains  several  Supplemental  Executive  Retirement  Plans
("SERPs")  designed  to provide  unfunded  supplemental  retirement  benefits to
certain employees of the Company.  The first is designed to provide the selected
employees  a benefit at  retirement  equal to that which they would have  earned
under the SEPP and the Excess Benefit Plans,  had the SEPP not been converted to
a cash balance plan.  Benefits  under this SERP are offset by benefits  received
under the SEPP and the Excess Benefit Plans. Currently, Messrs. Squier, Stanley,
Lasker, and Albrechtsen participate in this SERP.

The second  SERP is  designed  to provide  each  selected  employee a benefit at
retirement  equal to the  excess of 50% of the  participant's  average  base pay
during his final three years of employment over amounts the participant receives
from certain other plans and social security.  Currently, Mr. Squier is the only
employee participating in this SERP (see "Employment Agreements" below).

CORDANT STOCK OPTIONS

Since  December  31,  1995,  Cordant  has granted to certain  Howmet  employees,
including  certain of the Named Executive  Officers,  460,000  contingent  stock
options  for  Cordant  Common  Stock,  of which  360,000  are still  outstanding
(adjusted  for the  two-for-one  stock split in Cordant stock on March 13, 1998)
(the  "Cordant  Stock  Options").  The  options  granted to the Named  Executive
Officers  have exercise  prices of either  $17.75 or $20.46875  per option,  the
market  price of  Cordant  stock on the date of the grant and  adjusted  to give
effect to the  two-for-one  stock split in Cordant stock.  The options will vest
only if Cordant  acquires  100% of the Company prior to December 13, 2001 unless
otherwise  modified by the  Compensation  Committee of the Board of Directors of
Cordant.  The  options  vest,  and  are  exercisable,  50% on the  date  of such
acquisition and 25% each year thereafter.  The options expire not later than ten
years after the date of the grant.  The  agreement by which Alcoa would  acquire
Cordant  provides  for all  Cordant  stock  options to become  exercisable  upon
completion of Alcoa's tender offer and to be either cashed out at the $57 tender
offer  price  less the  option  exercise  price  or, at the  holder's  election,
converted  into Alcoa Common Stock  options of  equivalent  value to the Cordant
options.

Cordant has informed  holders of the Cordant  Stock  Options of its intention to
adopt a plan that would allow such  holders to benefit from such options even if
Cordant  does not acquire  100% of the Company  prior to December  13, 2001 (the
"Revised  Plan").  Under the Revised  Plan,  in the event that  Cordant does not
acquire 100% of the Company  prior to December 13, 2001,  then,  with respect to
each holder, the difference as of December 13, 2001 between the aggregate market
value of all of the shares of Cordant Common Stock  represented by such holder's
Cordant Stock Options and the aggregate exercise price of all such options shall
become vested and contributed to a deferred payment plan,  pursuant to which 25%
of the  vested  amount  would be paid out  immediately,  if the  participant  so
elected  prior to  vesting,  and the  balance of which  would be paid out over a
period (not less than five years) elected by the participant.  Deferred balances
would  accrue  investment  earnings  equal to those of  Cordant  stock over such
period or, at the  participant's  election,  in part those of Cordant stock over
such period and in part the interest on five year U.S. Treasury notes.  Pursuant
to the Revised  Plan,  a holder of Cordant  Stock  Options  who  retires  before
December 13, 2001 would receive a pro rata portion of the benefits  described in
the  foregoing  sentences  based on the  portion of time  during the period from
December  13, 1995 to December 13, 2001 in which such holder was employed by the
Company.

Whether the executives  vest in the Cordant Stock Options or vest in the Revised
Plan, the Company would record compensation  expense for one but not both plans.
Accordingly,  the Company is  recording  compensation  expense over the six year
vesting period of the Revised Plan ending  December 13, 2001. In 1999,  1998 and
1997, $0.1 million,  $0.6 million and $2.9 million of  compensation  expense was
charged against income.

                                       21
<PAGE>

EMPLOYMENT AGREEMENTS

In October 1995 Howmet  Corporation  entered  into  employment  agreements  (the
"Employment  Agreements") with thirteen management employees,  including Messrs.
Squier, Stanley and Lasker. The Employment Agreements set base salary levels and
provide a  specified  percentage  (generally  from  30-60%) of base  salary as a
target annual bonus amount.  The Employment  Agreements  also generally  provide
each such Named Executive  Officer (the  "Executive")  with the use of a Howmet-
owned automobile and  participation  in benefit plans and programs  available to
Howmet management employees generally.  In the event of the Executive's death or
disability,  the  Employment  Agreements  generally  provide  for the payment of
prorated  annual  bonus  and  long-term  incentive  plan  awards,  but not other
severance amounts.

Mr. Squier's Employment Agreement also provides that in the event his employment
is  terminated  by Howmet  other than for  "cause" or by him with "good  reason"
(each as defined therein) prior to his 62nd birthday, he will be entitled to (i)
the  amount of his base pay and  target  bonus for 36  months,  (ii) a  prorated
portion of the annual bonus and any long-term  incentive  awards that would have
been  payable  in the  year  of  termination,  (iii)  company-paid  outplacement
services,  (iv)  transfer  to him of the  company-owned  car he was  using,  (v)
accelerated  vesting under certain of Howmet's  retirement  plans,  and (vi) the
right to continue to participate in Howmet's medical benefits plan for up to two
years at the rates in effect for active  employees,  and the right to be treated
as a retiree for  purposes of continued  coverage  thereafter.  These  severance
benefits  are  conditioned  on his  agreement  not to compete  with Howmet for a
period of twelve months  following his  termination of employment.  Mr. Squier's
agreement  also provides that he is entitled to a  supplemental  annual  pension
payment  equal to the  excess of 50% of his  average  base pay  during his final
three  years of  employment  over the amounts  provided to him under  certain of
Howmet's retirement plans and under social security.

In February 1996 Howmet  Corporation  entered into an employment  agreement with
Mr.  Ritter that sets a base salary and an annual bonus  targeted at 40% of that
amount.  Half of the bonus is based on  achievement  of personal  objectives and
half is based on Howmet Corporation's  performance.  The agreement also provides
for Mr.  Ritter to receive  stock  appreciation  rights from the Company,  stock
options in Cordant stock and the  opportunity to purchase an interest in Howmet.
Mr. Ritter is also entitled to use of a company car.

Mr.  Albrechtsen has an employment  agreement that sets a base salary and 35% of
that amount as an annual bonus target. It is generally  effective until his 62nd
birthday (in 2008). In the event that Mr. Albrechtsen's employment is terminated
by Howmet  Corporation  without "cause" or by Mr. Albrechtsen with "good reason"
(each as defined therein),  Mr.  Albrechtsen is generally entitled to the amount
of his base salary and annual bonus for a period of 36 months.

ARRANGEMENTS AMONG THE COMPANY AND CORDANT

   (COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION)

SERVICES AGREEMENT

Upon consummation of the initial public offering of Company common stock in 1997
(the  "IPO"),  to  control   administrative   costs  and  avoid  duplication  of
administrative  functions,  the Company and Cordant entered into an intercompany
services agreement (the "Services Agreement") with respect to the services to be
provided by Cordant to the Company. The Services Agreement provides that Cordant
will furnish to the Company  administrative  services for which the Company will
generally  pay Cordant its costs plus a fee,  both amounts to be  determined  by
Cordant from time to time on a basis  consistent  with its past  practices.  The
Company paid Cordant  $1,875,000,  to cover both its costs and fee, for the year
ended December 31, 1999.

The services provided by Cordant include but are not limited to tax; control and
audit; risk

                                       22
<PAGE>

management   and   insurance   advice  and   purchasing;   health,   safety  and
environmental;  treasury  and cash  management;  human  resources  and  employee
relations; employee benefit plans; in-house legal; investor relations and public
affairs; and executive department services.

The services  also include or involve some services  provided by third  parties,
such as  insurance  brokers and  carriers,  actuaries  and  financial  printers.
Generally,  Cordant bills such third party services directly to the Company with
no "mark  up".  However,  the cost of  Cordant's  arranging  for third  parties'
services is billed to the Company along with a fee, as described above.

As set forth under Item 10 on pages  14-15,  four  Directors  of the Company are
officers and/or directors of Cordant.

CORPORATE AGREEMENT

Upon  consummation  of the IPO, the Company and Cordant entered into a corporate
agreement (the "Corporate Agreement"). Under this agreement, the Company granted
preemptive rights to Cordant, which give Cordant the right, upon any issuance or
sale by the Company of its shares of capital stock,  to acquire a number of such
shares sufficient to maintain  Cordant's  percentage  ownership of the Company's
outstanding  voting power and equity immediately prior to such issuance or sale.
The purchase of shares of Common Stock  pursuant to the exercise of a preemptive
right  will be at  market  price,  or, in the case of a public  offering  by the
Company for cash,  at a price per share equal to the net  proceeds  per share to
the Company in such offering.  The preemptive rights expire in the event Cordant
reduces its ownership interest to less than 20%.

In  addition,  under the  Corporate  Agreement,  as amended  on March 13,  2000,
Cordant  agreed that without the prior  consent of a majority (but not less than
two) of the  non-employee  Directors  of the  Company who are not  Directors  or
employees of Cordant ("Independent  Directors"),  neither Cordant nor any of its
affiliates  may acquire  outstanding  shares of Common  Stock of the Company not
then  beneficially  owned  by  Cordant  (the  "Publicly  Held  Shares")  if such
acquisition  would reduce the number of Publicly Held Shares to less than 14% of
the total  number of shares  outstanding,  other than (x)  pursuant  to a tender
offer to acquire all of the  Publicly  Held Shares  that is  conditioned  on the
tender of a majority of the  Publicly  Held Shares (and this  condition  must be
satisfied  for the  exception  to apply) and that  provides a  commitment  for a
prompt  "follow  up"  merger at the same  price for  untendered  shares,  or (y)
pursuant to a merger in which all  holders of  Publicly  Held Shares are treated
the same and that is approved by the holders of a majority of the Publicly  Held
Shares. The foregoing provision of the Corporate Agreement may not be amended or
waived by the Company  without the consent of a majority (but not less than two)
of the  Independent  Directors.  Alcoa has  separately  agreed with Howmet to be
bound by the same limitations as Cordant.

PREFERRED STOCK REDEMPTION

On February 17, 1999, the Company redeemed all of the outstanding  shares of its
9.0%  Series A  Senior  Cumulative  Preferred  Stock,  all of which  was held by
Cordant, for an aggregate redemption price of $66,379,991.

CERTAIN CORDANT OFFICERS AND DIRECTORS

Cordant corporate officers may be elected by the Company's Board of Directors as
officers or assistant  officers of the Company.  Cordant corporate  officers may
also  serve  as  officers  or  assistant  officers  of the  Company's  operating
subsidiary Howmet Corporation and other wholly-owned subsidiaries.

James R. Wilson, the Chairman, President and Chief Executive Officer of Cordant,
and D. Larry Moore, a director of Cordant,  serve on the Company's  Compensation
Committee.  The other members of the Compensation  Committee are James R. Mellor
and James D. Woods.

                                       23
<PAGE>

DIRECTORS' COMPENSATION

Directors who are employees of the Company or its subsidiary Howmet  Corporation
or of Cordant, receive no compensation for their service as Directors.  James R.
Wilson and Richard L. Corbin are officers and employees of Cordant, and David L.
Squier is an officer and employee of the Company,  serving as  Directors.  Other
Directors are paid an annual retainer of $40,000,  plus out-of-pocket  expenses.
James R. Mellor and James D. Woods serve as independent Directors of the Company
on  committees  of the Board of  Directors,  and  accordingly  each  receives an
additional  annual retainer of $5,000.  D. Larry Moore and Edsel D. Dunford also
serve as Directors of Cordant.

The Company maintains a Deferred  Compensation  Plan for Directors,  under which
each Director who is entitled to a Director's  fee from the Company may elect to
have payment of part or all of his Director's  compensation  deferred until such
time as he ceases to be a  Director.  With  respect  to all but  $20,000 of each
Director's  compensation,  the Plan permits each  Director to elect to defer his
Director's fees into a cash or phantom stock credit account. Amounts credited to
the cash  account are credited  with  increments  equivalent  to interest at the
prime rate,  and amounts  credited to the phantom  stock account are credited or
debited with amounts  reflecting the change in the price of the Company's Common
Stock and payment of dividends,  if any. All  distributions of a Director's cash
or phantom stock account are made only in cash.

Also under the Company's  Amended and Restated 1997 Stock Awards Plan, each such
Director  receives the number of shares of restricted stock of the Company as of
each January 1, beginning  January 1, 1998,  which $20,000 would purchase at the
average of the high and low trading prices for the Company's Common Stock on the
New York Stock  Exchange  on the last  trading  day of the  previous  year.  The
Director  may not sell this stock  until his  service as a Director  terminates.
Dividends,  if any, on such stock are  credited  to the  Director in the form of
phantom stock. The Board of Directors may from time to time change the amount or
proportion of his  compensation  that will thereafter be distributed in the form
of stock awards.  Each of these  Directors  received  1,288 shares of restricted
stock in 1999, and 1,106 shares in 2000.


ITEM 12 -- SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

PRINCIPAL HOLDERS

The following table sets forth information as of March 16, 2000, with respect to
the shares of the  Company's  Common  Stock,  par value $.01,  which are held by
persons known to the Company to be  beneficial  owners of more than five percent
of such stock.
<TABLE>
<CAPTION>

                                                   AMOUNT AND
                                                   NATURE OF
                                                   BENEFICIAL      PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNERS              OWNERSHIP(1)    OF CLASS
-------------------------------------              ------------    --------
<S>                                                <C>             <C>
Cordant Technologies Inc.(2)                       84,650,000      84.6
15 W. South Temple
Salt Lake City, Utah 84101-1532
</TABLE>
----------
(1) As provided by the stockholder.
(2) Cordant's  investment in  the  Company  is  owned  of  record  by  Cordant's
    wholly-owned subsidiary, Cordant Technologies Holding Company.


                                       24
<PAGE>

SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS

The following table shows the Company's  Common Stock  beneficially  owned as of
March 16, 2000, by each Director and each of the executive officers named in the
table on page 17, and the aggregate number of such shares  beneficially owned by
all  Directors  and  executive  officers of the  Company as a group.  Each named
person and member of the group has sole voting and investment power with respect
to the shares shown,  except for the restricted shares held by four Directors as
indicated below.
<TABLE>
<CAPTION>
                                                                 SHARES
                                                              BENEFICIALLY
NAME                                                            OWNED(4)
----                                                          ------------
<S>                                                            <C>
Richard L. Corbin(1).......................................      3,000
Edsel D. Dunford(2)........................................     13,733
James R. Mellor(2).........................................      6,733
D. Larry Moore(2)..........................................      6,733
David L. Squier............................................    160,000
James R. Wilson(1).........................................      7,000
James D. Woods(2)..........................................      9,733
B. Dennis Albrechtsen......................................     20,000
Marklin Lasker.............................................          0
John C. Ritter(3)..........................................     28,777
James R. Stanley...........................................     15,000
All  Directors,  nominees and  executive  officers as a group
(13 persons)...............................................    278,989
</TABLE>
----------
(1) Mr.  Wilson is the  Chairman  of the  Board, President  and Chief  Executive
    Officer  and Mr. Corbin is  Executive  Vice  President  and Chief  Financial
    Officer of Cordant, the controlling stockholder of the Company.
(2  Includes 3,733  restricted  shares of the  Company's  Common  Stock for each
    Director  indicated. Each holds the voting power of these shares but may not
    transfer them until termination of his service as a Director of the Company.
(3) Mr.  Ritter  disclaims  beneficial  ownership  with  respect to 777 of these
    shares.
(4) None of the beneficial holdings of any  individual in the table totals more
    than one percent of the outstanding shares; the holdings of the group
    represent less than 0.3 percent of the outstanding shares.



ITEM 13 -- CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

See  "Arrangements  Among  The  Company  And  Cordant  (Compensation   Committee
Interlocks And Insider Participation)", pages 22-24.


                                       25
<PAGE>

PART IV

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

  (a) DOCUMENTS FILED AS PART OF THIS REPORT

   (1) -- FINANCIAL STATEMENTS

The  following   Consolidated  Financial  Statements  of  the  Company  and  its
subsidiaries are included on pages F-1 to F-28 hereof.

Management's Report on Financial Statements                                F-2

Report of Ernst & Young LLP, Independent Auditors                          F-3

Consolidated Statements of Income -- Years Ended
  December 31, 1999, 1998 and 1997                                         F-4

Consolidated Balance Sheets -- December 31, 1999 and 1998                  F-5

Consolidated Statements of Cash Flows -- Years Ended
  December 31, 1999, 1998 and 1997                                         F-6

Consolidated Statements of Common Stockholders' Equity and
  Redeemable Preferred Stock -- Years Ended December 31, 1999,
  1998 and 1997                                                            F-7

Notes to Consolidated Financial Statements                          F-8 - F-28

   (2) -- FINANCIAL STATEMENT SCHEDULES

The Financial  Statement  Schedules of the Company and its  subsidiaries  listed
below  are  filed as part of this  Report  on Form  10-K and  should  be read in
conjunction with the Consolidated Financial Statements of the Company:

Schedule I -- Condensed Financial Information of Howmet
              International Inc. (Parent Company)                   I-1 to I-4
Schedule II -- Valuation and Qualifying Accounts and Reserves       II - 1

All other  schedules for which  provision is made in the  applicable  accounting
regulations of the Securities and Exchange Commission are not required under the
related  instructions  or are otherwise  inapplicable,  and therefore  have been
omitted.






                                       26
<PAGE>

   (3) -- EXHIBITS

Regulation
S-K
Exhibit
No.    Description
---    -----------
3.1    Restated Certificate of Incorporation of the Company (incorporated herein
       by reference to Exhibit 3.1 to the  Company's  Registration  Statement on
       Form S-1 filed October 9, 1997 (registration no. 333- 37573)).

3.2    Restated  By-Laws of the Company  (incorporated  herein by  reference  to
       Exhibit 3.2 to the  Company's  Annual  Report on Form 10-K for the fiscal
       year ended December 31, 1997 filed March 26, 1998).

4.1    Specimen Certificate of Common Stock of the Company  (incorporated herein
       by  reference  to  Exhibit  4.1  to  Amendment  No.  3 to  the  Company's
       Registration  Statement on Form S-1 filed November 21, 1997 (registration
       no. 333-37573)).

4.3    Corporate  Agreement  dated  as of  December  2,  1997 by and  among  the
       Company,    Thiokol   Corporation   and   Thiokol   Holding   Corporation
       (incorporated  herein by reference to Exhibit 4.5 to the Company's Annual
       Report on Form 10-K for the fiscal  year ended  December  31,  1997 filed
       March 26, 1998).

4.4    Credit Agreement dated as of December 16, 1997 among Howmet  Corporation,
       various  institutions  as Lenders,  ABN AMRO Bank N.V. and Bankers  Trust
       Company  as  Co-Documentation  Agents,  and The  First  National  Bank of
       Chicago as Agent,  together with certain  collateral  documents  attached
       thereto as exhibits,  including the Pledge  Agreements  among Howmet Ltd.
       and,  Howmet S.A.,  Howmet  Corporation,  and the First  National Bank of
       Chicago.  (incorporated  herein  by  reference  to  Exhibit  4.11  to the
       Company's  Annual Report on Form 10-K for the fiscal year ended  December
       31, 1997 filed March 26, 1998).

4.5    Blade Receivables Master Trust Amended and Restated Pooling and Servicing
       Agreement  dated April 18, 1996 among Blade  Receivables  Corporation  as
       Transferor,  Howmet Corporation as Servicer and Manufacturers and Traders
       Trust  Company as Trustee  together  with  certain  collateral  documents
       attached  thereto  as  exhibits,   including  the  Amended  and  Restated
       Receivables  Purchase Agreement dated as of April 18, 1996 between Howmet
       Corporation and certain subsidiaries of Howmet Corporation,  as Settlors,
       and  Blade  Receivables  Corporation  as Buyer  (incorporated  herein  by
       reference to Exhibit 4.7 to Howmet  Corporation's  Annual  Report on Form
       10-K for the fiscal year ended December 31, 1996 filed March 31, 1997).

4.6    Repurchase  Agreement  dated May 16,  1997  (under the Blade  Receivables
       Master Trust Amended and Restated  Pooling and Servicing  Agreement dated
       April 16, 1996 (Exhibit 4.12)), among Howmet Corporation,  Howmet Cercast
       (U.S.A.),  Inc.,  Howmet  Refurbishment,  Inc.,  Howmet-Tempcraft,  Inc.,
       Turbine  Components  Corporation,   Blade  Receivables  Corporation,  and
       Manufacturers and Traders Trust Company, as Trustee  (incorporated herein
       by reference to Exhibit 4.14 to the Company's  Registration  Statement on
       Form S-1 filed October 9, 1997 (registration no. 333-37573)).

4.7    Amending  Agreement dated August 29, 1997 (amending the Blade Receivables
       Master Trust Amended and Restated  Pooling and Servicing  Agreement dated
       April 18,  1996  (Exhibit  4.12))  among Blade  Receivables  Corporation,
       Howmet Corporation,  Manufacturers and Traders Trust Company, as Trustee,
       Falcon Asset Securitization  Corporation,  Alpine  Securitization  Corp.,
       Credit Suisse First Boston,  New York Branch, and The First National Bank
       of Chicago,  as Agent for Falcon  Asset  Securitization  Corporation  and
       Alpine


                                       27
<PAGE>

       Securitization  Corp.(incorporated  herein by reference to Exhibit
       4.15 to the Company's Registration Statement on Form S-1 filed October 9,
       1997 (registration no. 333-37573)).

4.8    Credit  Agreement  between  Howmet  Corporation  and  Bank  One NA  dated
       February 9, 2000 (incorporated  herein by reference to Exhibit 4.8 to the
       Company's Report on Form 8-K, filed February 11, 2000).

4(iii) The Company  agrees to provide the  Securities  and Exchange  Commission,
       upon request,  with copies of instruments  defining the rights of holders
       of long-term  debt of the Company and all of its  subsidiaries  for which
       consolidated  financial  statements  are  required  to be filed  with the
       Securities and Exchange Commission.

10.1*  Howmet Corporation Annual Bonus Plan (incorporated herein by reference to
       Exhibit  10.1 to  Amendment  No. 1 to Howmet  Corporation's  Registration
       Statement   on  Form  S-4  filed   January  17,   1996(registration   no.
       333-00200)).

10.2*  Howmet   Restructuring  Cash  Incentive  Plan  (incorporated   herein  by
       reference  to Exhibit  10.2 to  Amendment  No. 1 to Howmet  Corporation's
       Registration  Statement on Form S-4 filed  January 17,  1996(registration
       no. 333-00200)).

10.3*  Howmet Corporation Excess Benefit Plan (incorporated  herein by reference
       to Exhibit 10.4 to Amendment No. 1 to Howmet  Corporation's  Registration
       Statement   on  Form  S-4  filed   January  17,   1996(registration   no.
       333-00200)).

10.4*  Howmet  Corporation  Transaction  Incentive  Payments Plan  (incorporated
       herein  by  reference  to  Exhibit  10.5 to  Amendment  No.  1 to  Howmet
       Corporation's  Registration  Statement on Form S-4 filed January  17,1996
       (registration no. 333-00200)).

10.5*  Howmet  Corporation  Enhanced  Bonus Program for  Employees  Grade 22 and
       Above (incorporated  herein by reference to Exhibit 10.6 to Amendment No.
       1 to  Howmet  Corporation's  Registration  Statement  on Form  S-4  filed
       January 17, 1996 (registration no. 333-00200)).

10.6*  1986 Howmet Corporation  Deferred  Compensation Plan (incorporated herein
       by reference to Exhibit 10.7 to Amendment  No. 1 to Howmet  Corporation's
       Registration  Statement on Form S-4 filed January  17,1996  (registration
       no. 333-00200)).

10.7*  Howmet   Corporation   1995   Executive   Deferred    Compensation   Plan
       (incorporated herein by reference  to Exhibit 10.8 to Amendment  No. 1 to
       Howmet Corporation's Registration Statement on Form S-4 filed January 17,
       1996 (registration no.
       333-00200)).

10.8*  Employment  Agreement dated October 4, 1995,  between Howmet  Corporation
       and Mark Lasker  (incorporated  herein by reference  to Exhibit  10.11 to
       Howmet Corporation's Registration  Statement on Form S-4 filed January 9,
       1996 (registration no.
       333-00200)).

10.9*  Employment  Agreement dated October 4, 1995,  between Howmet  Corporation
       and James Stanley (incorporated  herein by reference to Exhibit  10.13 to
       Howmet Corporation's  Registration Statement on Form S-4 filed January 9,
       1996 (registration no. 333-00200)).

10.10* Employment  Agreement dated October 4, 1995,  between Howmet  Corporation
       and David Squier  (incorporated  herein by reference to Exhibit  10.17 to
       Howmet Corporation's  Registration Statement on Form S-4 filed January 9,
       1996 (registration no. 333-00200)).

10.11* Employment   Agreement  dated  July  1,  1984,   between  Howmet  Turbine
       Components Corporation and B. Dennis Albrechtsen  (incorporated herein by
       reference to Exhibit 10.18 to


                                       28
<PAGE>

       Howmet Corporation's Registration Statement on Form S-4 filed  January 9,
       1996 (registration no. 333-00200)).

10.12* Letter  Agreement  regarding  payment of life  insurance  between  Howmet
       Corporation  and David L. Squier  (incorporated  herein by  reference  to
       Exhibit  10.19 to Amendment  No. 1 to Howmet  Corporation's  Registration
       Statement  on  Form  S-4  filed  January  17,  1996   (registration   no.
       333-00200)).

10.13(a) Tax Sharing  Agreement  among  Howmet  Corporation,  Howmet  Management
       Services, Inc.,  Howmet-Tempcraft,  Inc., Howmet Thermatech Canada, Inc.,
       Howmet   Transport   Services,   Inc.,   Howmet   Sales,   Inc.,   Howmet
       Refurbishment,  Inc., Turbine Components  Corporation,  Blade Receivables
       Corporation, a Nevada corporation,  and Howmet Cercast (USA), Inc., dated
       as of December  13, 1995  (incorporated  herein by  reference  to Exhibit
       10.20(a) to Howmet Corporation's Registration Statement on Form S-4 filed
       January 9, 1996 (registration no. 333-00200)).

10.13(b)  Tax  Sharing  Agreement  among  Blade  Acquisition   Corp.,   Pechiney
       Corporation,  Howmet Insurance Co., Inc.,  Howmet  Corporation and all of
       its directly and indirectly owned subsidiaries,  dated as of December 13,
       1995  (incorporated  herein by  reference  to Exhibit  10.20(b) to Howmet
       Corporation's  Registration  Statement on Form S-4 filed  January 9, 1996
       (registration no. 333-00200)).

10.14  Assignment and Assumption  Agreement between Howmet Holdings  Acquisition
       Corp.  and Howmet  Acquisition  Corp.,  dated as of  December 6, 1995 and
       Indemnification   Provisions  of  the  Stock  Purchase   Agreement  among
       Pechiney,  Pechiney  International  S.A.,  Howmet  Cercast S.A. and Blade
       Acquisition Corp.,  dated as of October 12, 1995 (incorporated  herein by
       reference  to Exhibit  10.23 to Amendment  No. 1 to Howmet  Corporation's
       Registration  Statement on Form S-4 filed January 17, 1996  (registration
       no. 333-00200)).

10.15* Revised  Employment  Letter  dated  February  13,  1996,  between  Howmet
       Corporation  and John C.  Ritter  (incorporated  herein by  reference  to
       Exhibit  10.24 to Amendment  No. 3 to Howmet  Corporation's  Registration
       Statement on Form S-4 filed June 11, 1996 (registration no. 333-00200)).

10.16* Stock  Appreciation  Right Agreement between Howmet Corporation and David
       L. Squier dated May 17, 1996 (incorporated herein by reference to Exhibit
       10.24 to  Howmet  Corporation's  Quarterly  Report  on Form  10-Q for the
       quarter ended June 29, 1996, filed August 28, 1996).

10.17* Stock  Appreciation  Right Agreement between Howmet Corporation and James
       Stanley dated May 17, 1996  (incorporated  herein by reference to Exhibit
       10.25 to  Howmet  Corporation's  Quarterly  Report  on Form  10-Q for the
       quarter ended June 29, 1996, filed August 28, 1996).

10.18* Stock Appreciation Right Agreement between Howmet Corporation and Marklin
       Lasker  dated May 17, 1996  (incorporated  herein by reference to Exhibit
       10.26 to  Howmet  Corporation's  Quarterly  Report  on Form  10-Q for the
       quarter ended June 29, 1996, filed August 28, 1996).

10.19* Stock Appreciation Right Agreement between Howmet Corporation and John C.
       Ritter  dated May 17, 1996  (incorporated  herein by reference to Exhibit
       10.27 to  Howmet  Corporation's  Quarterly  Report  on Form  10-Q for the
       quarter ended June 29, 1996, filed August 28, 1996).

10.20* Stock  Appreciation  Right  Agreement  between Howmet  Corporation and B.
       Dennis Albrechtsen dated May 17, 1996  (incorporated  herein by reference
       to Exhibit 10.29 to

                                       29
<PAGE>

       Howmet Corporation's Quarterly  Report on Form 10-Q for the quarter ended
       June 29, 1996, filed August 28, 1996).

10.21* Employment Agreement dated October 4, 1995 between Howmet Corporation and
       Roland  Paul  (incorporated  herein  by  reference  to  Exhibit  10.16 to
       Amendment No. 1 to Howmet  Corporation's  Registration  Statement on Form
       S-4 filed January 17, 1996 (registration no. 333-00200)).

10.22* The Howmet  Corporation  Nonqualified  Deferred  Compensation Trust dated
       April 29, 1996  (incorporated  herein by  reference  to Exhibit  10.31 to
       Howmet Corporation's  Quarterly Report on Form 10-Q for the quarter ended
       June 29, 1996, filed August 28, 1996).

10.25  Intercompany   Services   Agreement   between  the  Company  and  Thiokol
       Corporation dated December 2, 1997  (incorporated  herein by reference to
       Exhibit 10.25 to the Company's  Annual Report on Form 10-K for the fiscal
       year ended December 31, 1997 filed March 26, 1998).

10.26* Agreement and Amendment to Stock  Appreciation  Right  Agreement  between
       Howmet  Corporation and David L. Squier dated November  1997(incorporated
       herein by reference to Exhibit  10.26 to the  Company's  Annual Report on
       Form 10-K for the fiscal  year ended  December  31,  1997 filed March 26,
       1998).

10.27* Agreement and Amendment to Stock  Appreciation  Right  Agreement  between
       Howmet   Corporation   and  Marklin   Lasker  dated   November  10,  1997
       (incorporated  herein by  reference  to  Exhibit  10.27 to the  Company's
       Annual  Report on Form 10-K for the fiscal year ended  December  31, 1997
       filed March 26, 1998).

10.28* Agreement and Amendment to Stock  Appreciation  Right  Agreement  between
       Howmet   Corporation   and  James   Stanley   dated   November  10,  1997
       (incorporated  herein by  reference  to  Exhibit  10.28 to the  Company's
       Annual  Report on Form 10-K for the fiscal year ended  December  31, 1997
       filed March 26, 1998).

10.29* Agreement and Amendment to Stock  Appreciation  Right  Agreement  between
       Howmet  Corporation and John C. Ritter dated November 1997  (incorporated
       herein by reference to Exhibit  10.29 to the  Company's  Annual Report on
       Form 10-K for the fiscal  year ended  December  31,  1997 filed March 26,
       1998).

10.30* Agreement and Amendment to Stock  Appreciation  Right  Agreement  between
       Howmet  Corporation  and B.  Dennis  Albrechtsen  dated  November 8, 1997
       (incorporated  herein by  reference  to  Exhibit  10.30 to the  Company's
       Annual  Report on Form 10-K for the fiscal year ended  December  31, 1997
       filed March 26, 1998).

10.31* Howmet Corporation Second Amended and Restated Special Executive Deferred
       Compensation  Plan,  dated  November  24,  1997  (incorporated  herein by
       reference to Exhibit 10.31 to the Company's Quarterly Report on Form 10-Q
       for the fiscal quarter ended March 31,1998, filed May 12, 1998).

10.32* Howmet  International  Inc.  Amended and Restated  1997 Stock Awards Plan
       (incorporated  herein by  reference  to  Exhibit  10.32 to the  Company's
       Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1998,
       filed August 10, 1998).

10.33* Form  of  Howmet  International  Inc.  Nonqualified  Stock  Option  Grant
       Agreement  (incorporated  herein by  reference  to  Exhibit  10.33 to the
       Company's Quarterly Report on Form 10-Q for the fiscal quarter ended June
       30, 1998, filed August 10, 1998).


                                       30
<PAGE>


10.34* Form of Howmet  International  Inc.  Director  Restricted Stock Agreement
       (incorporated  herein by  reference  to  Exhibit  10.34 to the  Company's
       Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1998,
       filed August 10, 1998).

10.35  Administrative  Agreement dated August 6, 1999 between Howmet Corporation
       and the United States Department of the Air Force (incorporated herein by
       reference to Exhibit 10.35 to the Company's Quarterly Report on Form 10-Q
       for the fiscal quarter ended September 30, 1999, filed October 21, 1999).

10.36  Amendment,  dated March 13, 2000, to the Corporate Agreement, dated as of
       December 2, 1997 (Exhibit 4.3), by and among Cordant  Technologies  Inc.,
       Cordant Technologies Holding Company, and the Company.

10.37  Letter  Agreement,  dated  March 13,  2000,  between  Alcoa Inc.  and the
       Company.

10.38* 1989 Stock Awards Plan of Thiokol  Corporation  as amended by stockholder
       approval  October 15, 1993  (incorporated  by reference to the definitive
       Proxy Statement of Thiokol Corporation dated September 11, 1992).

10.39* Form of Thiokol Corporation Non-Qualified Stock Option Grant Agreement

11     Statement re computation of per share earnings
       Statement  re  computation  of per  share  earnings  of the  Company  and
       subsidiaries is contained in Note 2 of "Notes to  Consolidated  Financial
       Statements" on page F-9 hereof.

21     List of Significant Subsidiaries

23     Consent of Ernst & Young LLP, Independent Auditors

27.1   Financial Data Schedule for the year ended December 31, 1999.
----------

*      Management contract or compensatory arrangement


(b) REPORTS ON FORM 8-K

During the quarter  ended  December  31, 1999 the  Company  filed the  following
Current Report on Form 8-K:

November 12, 1999.
------------------
Item 5 - Other events   News Release relating to Independent Directors Committee
                        review of Cordant buyout proposal.


                                       31
<PAGE>



                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  Report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                            HOWMET INTERNATIONAL INC.

Dated: March 20, 2000         By: /s/ John C. Ritter
                                  John C. Ritter
                                  Senior Vice President and Chief
                                   Financial Officer


Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities and on the dates indicated.

<TABLE>
<CAPTION>

         NAME                         TITLE                           DATE
----------------------     ------------------------------      -----------------
   <S>                     <C>                                 <C>

   /s/ James R. Wilson       Chairman of the Board             February 22, 2000
   -------------------
   James R. Wilson               and Director

   /s/ David L. Squier       Director, President and
   -------------------
    David L. Squier          Chief Executive Officer           February 22, 2000
                           (principal executive officer)

   /s/ John C. Ritter       Senior Vice President and
   ------------------
    John C. Ritter           Chief Financial Officer           February 22, 2000
                           (principal financial officer)

   /s/ George T. Milano        Corporate Controller            February 22, 2000
   --------------------
   George T. Milano        (principal accounting officer)

   /s/ Richard L. Corbin           Director                    February 22, 2000
   ---------------------
   Richard L. Corbin

   /s/ Edsel D. Dunford            Director                    February 22, 2000
   --------------------
   Edsel D. Dunford

   /s/ James R. Mellor             Director                    February 22, 2000
   -------------------
   James R. Mellor

   /s/ D. Larry Moore              Director                        March 6, 2000
   ------------------
   D. Larry Moore

   /s/ James D. Woods              Director                    February 22, 2000
   ------------------
   James D. Woods

</TABLE>


                                       32
<PAGE>

                                                                      EXHIBIT A


FINANCIAL INFORMATION


Management's Report on Financial Statements                                 F-2

Report of Ernst & Young LLP, Independent Auditors                           F-3

Consolidated Statements of Income                                           F-4

Consolidated Balance Sheets                                                 F-5

Consolidated Statements of Cash Flows                                       F-6

Consolidated Statements of Stockholders' Equity
  and Redeemable Preferred Stock                                            F-7

Notes to Consolidated Financial Statements                                  F-8

Management's Discussion and Analysis of
  Financial Condition and Results of Operations                             F-29

Selected Financial Data                                                     F-39





                                      F-1
<PAGE>






MANAGEMENT'S REPORT ON FINANCIAL STATEMENTS


      Management  has  prepared,   and  is  responsible  for,  the  consolidated
financial  statements and all related  financial  information  contained in this
Annual Report on Form 10-K. The consolidated financial statements, which include
amounts based on estimates  and  judgments,  were  prepared in  accordance  with
generally accepted  accounting  principles  appropriate in the circumstances and
applied on a consistent basis. Other financial information in this Annual Report
on Form 10-K is consistent with that in the consolidated financial statements.

      Management  maintains an accounting  system and related internal  controls
which it believes  provide  reasonable  assurance,  at  appropriate  cost,  that
transactions  are properly  executed and recorded,  that assets are safeguarded,
and that  accountability for assets is maintained.  An environment that provides
an  appropriate  level of control  is  maintained  and  monitored  and  includes
examinations by an internal audit staff.

      Management  recognizes its  responsibilities  for conducting the Company's
affairs in an ethical and socially  responsible  manner. The Company has written
standards  of business  conduct,  including  its  business  code of ethics which
emphasize  the  importance  of personal and  corporate  conduct and which demand
compliance with federal and state laws governing the Company.  The importance of
ethical behavior is communicated to all employees.

      The Audit  Committee  of the Board of Directors is composed of two outside
directors.  This Committee  meets  periodically  and also meets  separately with
representatives of the independent auditors,  Company officers, and the internal
auditors to review their activities.

      The consolidated  financial  statements have been audited by Ernst & Young
LLP, independent auditors, whose report follows.


/s/ John C. Ritter

John C. Ritter
Senior Vice President and
Chief Financial Officer



                                      F-2
<PAGE>









REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS


The Board of Directors and Stockholders
Howmet International Inc.

We  have  audited  the  accompanying   consolidated  balance  sheets  of  Howmet
International   Inc.  as  of  December  31,  1999  and  1998,  and  the  related
consolidated  statements of income,  common  stockholders' equity and redeemable
preferred  stock, and cash flows for each of the three years in the period ended
December 31, 1999.  These  financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material   respects,   the  consolidated   financial   position  of  Howmet
International  Inc.  as of  December  31,  1999 and 1998,  and the  consolidated
results of its  operations and its cash flows for each of the three years in the
period  ended  December 31,  1999,  in  conformity  with  accounting  principles
generally accepted in the United States.

                                              /s/ Ernst & Young LLP

Stamford, Connecticut
January 31, 2000, except for
the information regarding the
Company's New Credit Agreement
discussed in Note 7, as to which the
date is February 9, 2000




                                      F-3
<PAGE>





CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>

                                               YEAR ENDED DECEMBER 31,
                                       ----------------------------------------
(IN MILLIONS, EXCEPT PER SHARE DATA)      1999          1998          1997
-------------------------------------------------------------------------------
<S>                                     <C>           <C>           <C>
Net sales                               $1,459.7      $1,350.6      $1,258.2

Operating expenses:
  Cost of sales                          1,115.8       1,039.1         963.8
  Selling, general and administrative      108.6         101.6         122.3
  Research and development                  19.9          20.2          17.6
-------------------------------------------------------------------------------
     Total operating expenses            1,244.3       1,160.9       1,103.7

Income from operations                     215.4         189.7         154.5

Interest income                              1.0           1.6           1.2
Interest expense                            (6.3)        (12.7)        (31.0)
Other, net                                  (3.0)         (3.4)         (6.4)
-------------------------------------------------------------------------------

Income before income taxes and
  extraordinary item                       207.1         175.2         118.3
Income taxes                               (70.4)        (64.8)        (46.3)
-------------------------------------------------------------------------------

Income before extraordinary item           136.7         110.4          72.0
Extraordinary item - loss on early
  retirement of debt, net of income
  taxes of $7.9                              -             -           (12.3)
-------------------------------------------------------------------------------

Net income                                 136.7         110.4          59.7

Dividends on redeemable preferred stock      (.8)         (5.6)         (5.1)
-------------------------------------------------------------------------------

Net income applicable to common stock   $  135.9      $  104.8      $   54.6
================================================================================

Per common share amounts, basic and
  diluted:
  Income before extraordinary item      $   1.36      $   1.05      $    .67
  Extraordinary item                         -             -            (.12)
-------------------------------------------------------------------------------
  Net income                            $   1.36      $   1.05      $    .55
================================================================================
</TABLE>



See notes to consolidated financial statements.




                                      F-4
<PAGE>

CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                 DECEMBER 31,
                                                            -----------------------
(IN MILLIONS, EXCEPT SHARE DATA)                               1999        1998
-----------------------------------------------------------------------------------
<S>                                                          <C>         <C>
ASSETS
------
Current Assets:
  Cash and cash equivalents                                  $   39.4    $   37.6
  Accounts receivable (less allowance of $3.7 and $5.2)          80.7        84.1
  Inventories                                                   165.3       161.9
  Retained receivables                                           35.6        32.0
  Deferred income taxes                                          14.3        16.2
  Other current assets                                            3.7         3.0
  Restricted Trust  (a)                                           -         716.4
-----------------------------------------------------------------------------------
Total Current Assets                                            339.0     1,051.2

Property, plant and equipment, net                              396.5       334.9
Goodwill, net                                                   209.5       221.1
Patents and technology and other intangible assets, net          94.9       115.1
Deferred income taxes                                            11.9         -
Other noncurrent assets                                          68.3        78.3
-----------------------------------------------------------------------------------
Total Assets                                                 $1,120.1    $1,800.6
===================================================================================

LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS'
EQUITY
---------------------------------------------------------
Current Liabilities:
  Accounts payable                                           $   81.3    $  101.5
  Accrued compensation                                           59.8        45.0
  Other accrued liabilities                                      98.0       108.7
  Advance on accounts receivable                                 40.0         -
  Income taxes payable                                           47.8        44.8
  Short-term debt                                                45.7        28.0
  Pechiney Notes  (a)                                             -         716.4
-----------------------------------------------------------------------------------
Total Current Liabilities                                       372.6     1,044.4

Noncurrent Liabilities:
  Accrued retiree benefits other than pensions                  101.2        96.8
  Accrued pension liability                                      35.9        49.0
  Other noncurrent liabilities                                   59.9        64.9
  SARs                                                           49.8        43.5
  Deferred income taxes                                           -           2.1
  Long-term debt                                                  -          63.0
-----------------------------------------------------------------------------------
Total Noncurrent Liabilities                                    246.8       319.3

Commitments and contingencies

Redeemable preferred stock                                        -          65.6

Stockholders' Equity:
  Preferred stock, authorized - 10,000,000 shares, issued
   and outstanding - 0 shares                                     -           -
  Common stock, $.01 par value; authorized - 400,000,000
   shares, issued and outstanding: 1999 - 100,028,883
   shares; 1998 - 100,005,356 shares                              1.0         1.0
  Capital surplus                                               195.4       195.1
  Retained earnings                                             316.0       180.1
  Accumulated other comprehensive income                        (11.7)       (4.9)
-----------------------------------------------------------------------------------
Total Stockholders' Equity                                      500.7       371.3
-----------------------------------------------------------------------------------
Total Liabilities, Redeemable Preferred Stock and
Stockholders' Equity                                         $1,120.1    $1,800.6
===================================================================================
</TABLE>
(a)The Restricted  Trust held a note receivable from Pechiney,  S.A. and related
   letters  of credit  that  secured  Pechiney,  S.A.'s  agreement  to repay the
   Pechiney Notes. Pechiney,  S.A. (the Company's previous owner) paid the notes
   in full on January 4, 1999, and the  Restricted  Trust was  terminated.  (See
   Note 8.)

See notes to consolidated financial statements.

                                      F-5
<PAGE>


CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                  YEAR ENDED DECEMBER 31,
                                               ---------------------------------
(IN MILLIONS)                                    1999       1998     1997
--------------------------------------------------------------------------------
<S>                                            <C>       <C>        <C>
OPERATING ACTIVITIES
--------------------
Net income                                     $ 136.7   $ 110.4   $  59.7

Adjustments to reconcile net income to net cash
  provided  by  operating
 activities:
   Depreciation and amortization                  66.8      60.2      66.9
   Equity in income of unconsolidated
     affiliates                                    -         (.4)     (1.5)
   Extraordinary item                              -         -        12.3
   Changes in assets and liabilities:
     Receivables                                  (2.5)     (3.5)      8.4
     Inventories                                  (4.6)      2.2     (17.9)
     Accounts payable and accrued                (12.6)     10.3      12.1
      liabilities
     Deferred income taxes                       (14.8)     (2.1)      (.3)
     Income taxes payable                          3.4      17.8      16.9
     Long-term SARs accrual                        6.3       5.5      31.4
     Advance on accounts receivable               40.0       -         -
     Other, net                                   14.2       7.0       4.6
--------------------------------------------------------------------------------
   Net cash provided by operating activities     232.9     207.4     192.6

INVESTING ACTIVITIES
--------------------
Purchases of property, plant and equipment      (112.9)    (83.0)    (56.9)
Payments made for investments and other assets     -        (3.0)     (1.8)
Proceeds from sale of refurbishment business,
 net                                               -         -        44.9
--------------------------------------------------------------------------------
   Net cash used by investing activities        (112.9)    (86.0)    (13.8)

FINANCING ACTIVITIES
--------------------
Net change in short-term debt                     14.6      15.1       -
Issuance of long-term debt                        65.0      36.6     326.2
Repayment of long-term debt                     (128.0)   (182.0)   (467.6)
Redemption of preferred stock                    (66.4)      -         -
Premiums paid on early retirement of debt          -         -       (13.7)
--------------------------------------------------------------------------------
   Net cash used by financing activities        (114.8)   (130.3)   (155.1)
Foreign currency rate changes                     (3.4)      1.1      (1.7)
--------------------------------------------------------------------------------
Increase (decrease) in cash and cash
  equivalents                                      1.8      (7.8)     22.0
Cash and cash equivalents at beginning
  of period                                       37.6      45.4      23.4
--------------------------------------------------------------------------------
Cash and cash equivalents at end of period     $  39.4   $  37.6   $  45.4
================================================================================
</TABLE>


See notes to consolidated financial statements.

                                      F-6
<PAGE>


CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDERS' EQUITY
AND REDEEMABLE PREFERRED STOCK


<TABLE>
<CAPTION>

                                                                     ACCUMULATED      TOTAL
                                                                       OTHER         COMMON       REDEEMABLE
                                   COMMON STOCK    CAPITAL RETAINED COMPREHENSIVE STOCKHOLDERS' PREFERRED STOCK
                                 ----------------                                               ---------------
(IN MILLIONS, EXCEPT SHARE DATA) SHARES    AMOUNT  SURPLUS EARNINGS    INCOME        EQUITY     SHARES   AMOUNT
---------------------------------------------------------------------------------------------------------------
<S>                            <C>         <C>     <C>     <C>       <C>            <C>         <C>      <C>
Balance, December 31, 1996     100,000,000 $1.0    $195.0  $ 20.7    $  2.1         $218.8      5,490    $54.9
---------------------------------------------------------------------------------------------------------------
Comprehensive income:
  Net income                                                 59.7                     59.7
  Other comprehensive income
   Foreign exchange
     translation adjustment                                            (7.7)          (7.7)
                                                                                  -----------
  Total comprehensive income                                                          52.0
                                                                                  -----------
Dividends - redeemable
  preferred stock                                            (5.1)                    (5.1)       511      5.1
---------------------------------------------------------------------------------------------------------------

Balance, December 31, 1997     100,000,000 $1.0    $195.0  $ 75.3    $ (5.6)       $265.7       6,001    $60.0
---------------------------------------------------------------------------------------------------------------
Comprehensive income:
  Net income                                                110.4                   110.4
  Other comprehensive income
   Foreign exchange
     translation adjustment                                             3.1           3.1
   Minimum pension liability
     adjustment                                                        (2.4)         (2.4)
                                                                                  -----------
  Total comprehensive income                                                         111.1
                                                                                  -----------
Dividends - redeemable
  preferred stock                                            (5.6)                   (5.6)        559      5.6
Shares issued                        5,356             .1                              .1
---------------------------------------------------------------------------------------------------------------

Balance, December 31, 1998     100,005,356 $1.0    $195.1  $180.1    $ (4.9)        $371.3      6,560    $65.6
---------------------------------------------------------------------------------------------------------------
Comprehensive income:
  Net income                                                136.7                    136.7
  Other comprehensive income
   Foreign exchange
     translation adjustment                                           (10.4)         (10.4)
   Minimum pension liability
     adjustment                                                         2.4            2.4
   Unrealized gain on
     securities                                                         1.2            1.2
                                                                                  -----------
  Total comprehensive income                                                         129.9
                                                                                  -----------
Dividends - redeemable                                        (.8)                     (.8)        78       .8
  preferred stock
Redeemable preferred stock
  redemption                                                                                   (6,638)   (66.4)
Shares issued                       23,527             .3                               .3
---------------------------------------------------------------------------------------------------------------

BALANCE, DECEMBER 31, 1999     100,028,883 $1.0    $195.4  $316.0    $(11.7)        $500.7          -    $   -
===============================================================================================================
</TABLE>

See notes to consolidated financial statements.


                                      F-7
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.  OWNERSHIP

THE 1995  ACQUISITION:  Howmet  International  Inc. ("HII" or "the Company") was
formed on October 11,  1995.  On December  13,  1995,  HII  acquired  all of its
existing  operations  from  Pechiney,  S.A. (the  "Acquisition").  Carlyle-Blade
Acquisition Partners, L.P. ("Carlyle-Blade"), an affiliate of The Carlyle Group,
and Cordant Technologies  Holding Company, a wholly-owned  subsidiary of Cordant
Technologies Inc. ("Cordant") owned 51% and 49%,  respectively,  of HII's common
stock from December 13, 1995 until the 1997 ownership change. That subsidiary of
Cordant also owned 100% of HII's 9% Series A Senior  Cumulative  payment-in-kind
preferred stock, which was redeemed on February 17, 1999 (see Note 12).

The Acquisition was effected through a series of transactions,  mergers and name
changes  resulting  in HII  owning  Howmet  Holdings  Corporation  ("Holdings").
Holdings owns Howmet  Corporation.  Howmet  Corporation and its subsidiaries are
the only  operating  subsidiaries  of Holdings and HII. In  connection  with the
Acquisition,   HII  received   indemnities  from  Pechiney,   S.A.  for  certain
pre-closing tax,  environmental,  and product liability matters and the Pechiney
Notes (see Note 8). The  acquisition  was accounted  for in accordance  with the
purchase  method of accounting,  and  accordingly,  the  consolidated  financial
statements reflect the allocation of the purchase price and related  acquisition
costs to the assets acquired and liabilities  assumed based on their fair values
on the date of acquisition.

1997 AND 1998 OWNERSHIP CHANGES: In December 1997, Carlyle-Blade sold 15 million
of its HII common  shares to the  public,  and sold 13 million of its HII common
shares to Cordant  Technologies  Inc.  In January  1998,  Carlyle-Blade  sold an
additional 350,000 common shares to the public.

1999 OWNERSHIP  CHANGE:  On February 8, 1999,  Carlyle-Blade  sold its remaining
22,650,000 shares of HII common shares to Cordant. At December 31, 1999, Cordant
held 84.6% and the public held 15.4% of outstanding HII common shares.

PROPOSED PURCHASE OF PUBLICLY HELD SHARES: On November 12, 1999,  Cordant made a
proposal to the Company's  board of directors to acquire all of the  outstanding
shares of HII not currently  owned by Cordant for a price of $17.00 per share in
cash. The Company's Independent Directors Committee of its Board of Directors is
reviewing the proposal and has retained independent financial and legal advisors
to assist  in this  matter.  See Note 25  regarding  an  update on the  proposed
purchase of the publicly held shares of the Company's common stock.

POSSIBLE CHANGE IN OWNERSHIP OF CORDANT:  See Note 25.



NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF  CONSOLIDATION:  The  accompanying  consolidated  financial  statements
include all subsidiary  companies.  All  significant  intercompany  accounts and
transactions have been eliminated.

USE  OF  ESTIMATES:  The  consolidated  financial  statements  are  prepared  in
conformity with accounting  principles  generally  accepted in the United States
which requires  management to make estimates and  assumptions.  Estimates of the
carrying  amounts of assets and liabilities and the reported amounts of revenues
and  expenses  are  utilized in the  earnings  recognition  process that affects
reported  amounts in the  consolidated  financial  statements  and  accompanying
notes. Amounts affected include, but are not limited to, allowances for doubtful
accounts,  reserves for contract losses and other accruals. Actual results could
differ from those estimates.

REVENUE  RECOGNITION:  The  Company  recognizes  revenue  from  the  sale of its
products upon shipment.  Provision for estimated losses on sales commitments are
recorded when identified.


                                      F-8
<PAGE>

NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

EARNINGS  PER SHARE:  Basic  earnings  per share is  calculated  by dividing net
income  applicable  to common  stockholders  by the weighted  average  number of
common  shares  outstanding  (1999 -  100,022,361;  1998 -  100,002,678;  1997 -
100,000,000).  Diluted  earnings per share is  calculated by dividing net income
applicable  to common  stockholders  by the  weighted  average  number of common
shares  outstanding  plus the common stock  equivalent  shares of employee stock
options, calculated using the treasury stock method (1999 - 100,255,305;  1998 -
100,079,344; 1997 - 100,008,832).

CASH AND CASH  EQUIVALENTS:  Highly liquid  investments with a maturity of three
months or less when acquired are considered cash equivalents.

INVENTORIES:  Inventories are stated at cost, which approximates or is less than
replacement  value.  A  substantial  portion  of  inventories  is  valued on the
last-in,  first-out  ("LIFO")  method,  and the  remainder  is on the  first-in,
first-out method.

PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment are carried at cost
and are depreciated over the assets' estimated useful lives on the straight-line
method.  Buildings'  useful lives vary between 19 and 40 years and other assets'
lives vary between 4 and 8 years.

INTANGIBLES:  Goodwill relates to the Acquisition  (Note 1) and is the excess of
the purchase price over the fair value of tangible and  identifiable  intangible
net assets acquired. It is amortized on a straight-line basis over 40 years.

Other  intangible  assets include the fair value,  at the  Acquisition  date, of
patents,  technology and a non-compete agreement.  They are being amortized on a
straight-line basis over 10 to 15 years.

IMPAIRMENT  OF  LONG-LIVED  ASSETS:  The Company  records  impairment  losses on
goodwill  and  on  long-lived   assets  used  in  operations   when  events  and
circumstances  indicate  that the assets might be impaired and the  undiscounted
cash flows  estimated  to be  generated  by those  assets are less than net book
value. The Company also evaluates the amortization periods of assets,  including
goodwill  and  other  intangible   assets,   to  determine   whether  events  or
circumstances warrant revised estimates of useful lives.

CONTINGENT MATTERS:  The Company accrues costs for contingent matters when it is
probable  that a liability  has been  incurred and the amount can be  reasonably
determined.  At the time a liability is recognized, a receivable is recorded for
the estimated future recovery from third parties,  including  Pechiney,  S.A. or
insurance  carriers.  Costs not recoverable from third parties are expensed when
the liability is recorded.  Except for current  amounts  receivable and payable,
contingent  amounts  are  included  in "other  noncurrent  assets" and in "other
noncurrent liabilities".

FOREIGN CURRENCY  TRANSLATION:  Except for the Company's Canadian  subsidiaries,
all assets and liabilities of the Company's foreign  subsidiaries are translated
into U.S.  dollars at  period-end  exchange  rates.  Revenues  and  expenses are
translated into U.S. dollars at average rates of exchange  prevailing during the
period. Unrealized currency translation adjustments are deferred and included in
the equity section of the consolidated  balance sheet, whereas transaction gains
and  losses  are  recognized  in the  consolidated  statements  of  income  when
incurred.

The Canadian  operation's  functional  currency is the U.S.  dollar.  Therefore,
Canadian  monetary assets and liabilities are translated at period-end  exchange
rates,  and  inventories  and  other  nonmonetary  assets  and  liabilities  are
translated  at historical  rates.  Adjustments  resulting  from  translation  of
Canadian  monetary  assets and  liabilities  at  period-end  exchange  rates are
included in the consolidated statements of income.

                                      F-9
<PAGE>

NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

DERIVATIVE FINANCIAL INSTRUMENTS:  Derivative financial instruments are utilized
by the  Company to reduce  foreign  currency  risks in  accordance  with  policy
approved  by the  Board  of  Directors.  The  Company  does  not  hold or  issue
derivative financial  instruments for trading purposes.  The Company enters into
foreign exchange contracts to minimize fluctuations in the value of payments due
international vendors and the value of foreign denominated receipts.

Forward   foreign   exchange   contracts   obligate   the  Company  to  exchange
predetermined  amounts of specified  foreign  currencies  at specified  exchange
rates on specified  dates or to make an equivalent  U.S. dollar payment equal to
the value of such exchange.  The Company enters into economic hedges to mitigate
fluctuations  of  anticipated  foreign  currency  commitments.  The Company also
enters into forward foreign  exchange  contracts,  which are directly related to
assets, liabilities, or transactions for which a commitment is in place.

In  accordance  with  hedge  accounting,   gains  and  losses  for  specifically
identified assets,  liabilities and firmly committed transactions are recognized
in income, and offset the foreign exchange gains and losses, when the underlying
transaction is settled.  Unrealized changes in fair value of contracts no longer
effective  as hedges for such firm items are  recognized  in income at such time
and marked to market  until  their  expiration.  In cases where the hedge is for
anticipated items, forward foreign exchange contracts are marked to market.

INCOME TAXES:  The provision for income taxes  includes,  in the current period,
the cumulative  effect of any changes in tax rates from those used previously in
determining deferred tax assets and liabilities.  Deferred taxes are provided to
recognize  the income tax effects of amounts  which are  included  in  different
reporting periods for financial statement and tax purposes.

NEW ACCOUNTING STANDARDS: In June 1999, the Financial Accounting Standards Board
("FASB") issued Statement of Financial  Accounting  Standards  ("SFAS") No. 137,
"Accounting for Derivative  Instruments and Hedging Activities - Deferral of the
Effective Date of FASB Statement No. 133".  This statement  delays the effective
date of  Statement  No.  133 to fiscal  years  beginning  after  June 15,  2000.
Statement No. 133 establishes  accounting  standards for derivative  instruments
and for hedging activities.  The statement will require the Company to recognize
all  derivatives  on the balance sheet at fair value.  Derivatives  that are not
hedges must be adjusted to fair value  through  income.  If the  derivative is a
hedge,  depending  on the  nature of the  hedge,  changes  in the fair  value of
derivatives  will  either be offset  against  the  changes  in fair value of the
hedged assets,  liabilities,  or firm commitments through earnings or recognized
in other  comprehensive  income until the hedged item is recognized in earnings.
The  ineffective  portion  of a  derivative's  change  in  fair  value  will  be
immediately  recognized in earnings. The Company has not yet determined what the
effect of Statement  No. 133 will be on the earnings and  financial  position of
the Company. The Company expects to adopt this new statement on January 1, 2001.

NOTE 3.  INVENTORIES

Inventories are summarized as follows:
<TABLE>
<CAPTION>
                                                          DECEMBER 31,
                                                    -------------------------
(IN MILLIONS)                                           1999         1998
-----------------------------------------------------------------------------
<S>                                                    <C>          <C>
Raw materials and supplies                             $ 63.2       $ 56.7
Work in progress                                         75.0         78.8
Finished goods                                           31.5         29.7
-----------------------------------------------------------------------------
FIFO inventory                                          169.7        165.2
LIFO valuation adjustment                                (4.4)        (3.3)
-----------------------------------------------------------------------------
                                                       $165.3       $161.9
=============================================================================
</TABLE>

At December 31, 1999 and 1998,  inventories  include  $110.4  million and $111.8
million,  respectively,  that are valued using LIFO.  This valuation  adjustment
approximates  the  difference  between  the  LIFO  carrying  value  and  current
replacement cost.

                                      F-10
<PAGE>

NOTE 4.  PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment includes the following:
<TABLE>
<CAPTION>
                                                           DECEMBER 31,
                                                    -------------------------
(IN MILLIONS)                                           1999         1998
-----------------------------------------------------------------------------
<S>                                                    <C>          <C>
Land                                                   $  18.7      $  18.8
Buildings                                                102.7         77.6
Machinery and equipment                                  440.0        363.4
-----------------------------------------------------------------------------
                                                         561.4        459.8
Accumulated depreciation                                (164.9)      (124.9)
-----------------------------------------------------------------------------
                                                       $ 396.5      $ 334.9
=============================================================================
</TABLE>

Depreciation  expense was $48.6 million in 1999,  $42 million in 1998, and $41.2
million in 1997.


NOTE 5.  GOODWILL

Goodwill  relates to the  Acquisition  (Note 1).  Goodwill is net of accumulated
amortization  of $27.3  million and $20.6 million at December 31, 1999 and 1998.
In 1999 goodwill was reduced by $5.0 million  resulting from  utilization of net
operating loss carryforwards which were acquired as part of the Acquisition.


NOTE 6.  PATENTS AND TECHNOLOGY AND OTHER INTANGIBLE ASSETS, NET
         AND OTHER NONCURRENT ASSETS

Patents and technology and other intangible assets, net includes the following:
<TABLE>
<CAPTION>
                                                                                   DECEMBER 31,
                                                                           -------------------------
(IN MILLIONS)                                                                   1999         1998
----------------------------------------------------------------------------------------------------
<S>                                                                             <C>         <C>
Patents and technology, net of accumulated amortization of $27.3 and $20.6      $40.1       $ 46.8


Non-compete agreement, net of accumulated amortization of $20.2 and $15.2        54.8         59.8


Pension intangible asset (Note 11)                                                -            8.5
----------------------------------------------------------------------------------------------------
                                                                                $94.9       $115.1
====================================================================================================
</TABLE>

Other noncurrent assets includes the following:
<TABLE>
<CAPTION>

                                                           DECEMBER 31,
                                                    -------------------------
(IN MILLIONS)                                           1999         1998
-----------------------------------------------------------------------------
<S>                                                     <C>          <C>
Indemnification receivables from Pechiney, S.A. for:
  Environmental matters                                 $ 20.8       $ 29.3
  Insurance claims                                         5.2          6.0

Prepaid pension benefit costs                             23.8         25.9

Other                                                     18.5         17.1
-----------------------------------------------------------------------------
                                                        $ 68.3       $ 78.3
=============================================================================
</TABLE>


                                      F-11
<PAGE>

NOTE 7.  FINANCING ARRANGEMENTS

At December 31, 1999 and 1998,  the Company had $45.7 million and $28 million of
short-term borrowings  principally at its foreign subsidiaries.  Included in the
1999 amount was $22 million of the Canadian  subsidiary's  borrowings  under two
credit facilities,  which have a combined borrowing capacity of $25 million.  At
December  31,  1998  the  Canadian  subsidiary  had $8  million  of  outstanding
borrowings  under a $10  million  credit  facility.  Interest  rates  for  these
facilities are based on LIBOR plus a spread  (approximately 6.9% at December 31,
1999 and 5.8% at  December  31,  1998).  At  December  31,  1999 and  1998,  the
Company's Japanese subsidiary had short-term borrowings of $15 million and $17.9
million,  respectively,  bearing  interest at a rate of  approximately  1.1% and
1.4%, respectively, per annum.

At December 31, 1999,  the Company had no long-term  borrowings.  The  Company's
long-term debt at December 31, 1998,  excluding Pechiney Notes (Note 8), was $63
million,  including $60 million of borrowings  under the Company's  $300 Million
Revolving Credit Facility. The interest rate on this facility was based on LIBOR
plus a spread and was 5.8% at December  31, 1998.  At December  31,  1999,  $9.6
million of letters of credit were outstanding under separate credit arrangements
and $300  million  borrowing  capacity  was  available  under  the $300  Million
Revolving Credit Agreement.

On February 9, 2000, the Company elected to terminate its $300 Million Revolving
Credit  Facility.  On February 9, 2000,  the Company  (through its  wholly-owned
operating subsidiary,  Howmet Corporation) entered into a new $25 million credit
agreement  with a major U.S. bank (the "New Credit  Agreement").  The New Credit
Agreement provides a commitment from the bank for an unsecured  revolving credit
line and letters of credit of up to a total of $25 million. The interest rate is
based on LIBOR plus a spread. The New Credit Agreement expires on May 9, 2000.

Terms of the New Credit  Agreement  require  Howmet  Corporation to meet certain
interest  coverage and leverage  ratios and maintain  certain  minimum net worth
amounts.  In  addition,   there  are  restrictions  customarily  found  in  such
agreements,  such as limits on  indebtedness  and payments for  acquisitions  or
investments.  The  agreement  contains  events of default  including a change of
control (as  defined) of the Company and its  subsidiaries,  and cross  defaults
with respect to other debt and the receivables facility.

The Company is a holding  company,  which conducts its only  operations  through
Howmet  Corporation and its subsidiaries and,  accordingly,  is dependent on the
receipt  of  cash  from  these  subsidiaries  to meet  its  expenses  and  other
obligations.  Terms of the New Credit Agreement (and previously the $300 Million
Revolving  Credit  Facility)  which limit  transfers of cash to the Company from
Howmet  Corporation  affect  the  Company's  ability  to  obtain  funds  for any
purposes,  including  dividends,  stock  redemption,  debt  service  and  normal
business  activities.   Based  on  current  and  anticipated  activities,   this
limitation is not expected to have an effect on the Company's ability to conduct
its normal activities.

The  Company  has an  agreement  to sell,  on a revolving  basis,  an  undivided
interest in a defined  pool of  accounts  receivable.  At December  31, 1999 and
1998,  the defined pool of  outstanding  accounts  receivable  amounted to $90.6
million and $87 million, respectively. The Company received $55 million from the
sale of such eligible receivables to a master trust and has deducted this amount
from accounts receivable in the December 31, 1999 and 1998 consolidated  balance
sheets. Losses on the sale of receivables for the years ended December 31, 1999,
1998 and 1997 were $3.3 million,  $3.8 million, and $3.8 million,  respectively.
These losses are included in the line captioned  "Other,  net" in the statements
of income.  At  December  31,  1999 and 1998 the $35.6  million  and $32 million
differences, between the total eligible pool and the $55 million sold, represent
retainage on the sale in the event the receivables are not fully collected.  The
Company has  retained  the  responsibility  for  servicing  and  collecting  the
accounts receivable sold or held in the master trust. Any incremental additional
costs related to such servicing and collection efforts are not significant.

                                      F-12
<PAGE>

NOTE 7.  FINANCING ARRANGEMENTS (continued)

In 1997, the Company  terminated its then existing senior credit  facilities and
repaid all outstanding borrowings  thereunder,  and the Company tendered for and
repaid all but $3 million of its $125 million senior  subordinated  notes.  As a
result of these  transactions,  the Company recorded an extraordinary  loss from
the early retirement of debt of $12.3 million,  after-tax. The loss includes the
write-offs of unamortized  debt issuance  costs, a tender premium for the senior
subordinated  notes and transaction  costs. Also in 1997, the Company elected to
repay all but $6 million of its 10%  payment-in-kind  junior  subordinated notes
and in 1998 repaid the remaining $6 million.  In 1999, the Company  redeemed the
remaining $3 million of its senior subordinated notes.

In 1999, 1998 and 1997, the Company paid interest of $6.2 million,  $9.7 million
and $20.1 million, respectively.


NOTE 8.  RESTRICTED TRUST AND RELATED PECHINEY NOTES PAYABLE

In 1988,  Pechiney  Corporation,  which was then a  wholly-owned  subsidiary  of
Pechiney,  S.A., issued indebtedness  maturing in 1999 (the "Pechiney Notes") to
third parties in connection with the purchase of American  National Can Company.
As a result of the Acquisition,  Pechiney Corporation (now named Howmet Holdings
Corporation,  "Holdings") became a wholly-owned  subsidiary of the Company.  The
Pechiney Notes remained at Holdings, but Pechiney, S.A., which retained American
National Can Company, agreed with the Company to be responsible for all payments
due on or in connection with the Pechiney  Notes.  Accordingly,  Pechiney,  S.A.
issued  its own  note  to  Holdings  in an  amount  sufficient  to  satisfy  all
obligations under the Pechiney Notes. The Pechiney, S.A. note was deposited in a
trust for the benefit of Holdings (the "Restricted Trust"). Interest income from
the Restricted  Trust for 1998 and 1997 was equal to the interest expense and is
netted in the statements of income for these years.

Pechiney,  S.A. paid the Pechiney Notes in full on January 4, 1999. As a result,
the  Restricted  Trust has been  terminated.  No Company  funds were used in the
payment of the Pechiney Notes.


NOTE 9.  COMMITMENTS

The  Company  has  noncancelable   operating  leases  relating   principally  to
manufacturing  and office  facilities  and  certain  equipment.  Future  minimum
payments  under  noncancelable  leases as of  December  31, 1999 are as follows:
2000--$6.1 million,  2001--$4.0 million, 2002--$1.9 million, 2003--$1.2 million,
2004--$.5 million and thereafter $1.8 million.

Total rental  expense for all  operating  leases was $8.6 million in 1999,  $6.9
million in 1998 and $7.3 million in 1997.

As of December 31, 1999 the Company is committed to spend $11.4 million for 2000
capital expenditures.


NOTE 10.  INCOME TAXES

In February 1999,  Cordant increased its ownership of the Company's common stock
to 84.6  percent  of the  outstanding  shares.  As a result of the  increase  in
ownership,  the Company and Cordant will file  consolidated  federal  income tax
returns  beginning in 1999.  The  consolidated  tax liability of the  affiliated
group,  determined without taking credits into account,  will be allocated based
on each company's  contribution to consolidated  federal taxable income. All tax
credits  will  be  allocated  on a  pro  rata  basis  equal  to  each  company's
contribution  to the  consolidated  tax credit  determined to be available  each
year.

                                      F-13
<PAGE>

NOTE 10.  INCOME TAXES (continued)

Income taxes were provided in the following amounts:
<TABLE>
<CAPTION>

                                                         YEAR ENDED DECEMBER 31,
                                                 -----------------------------------------
(IN MILLIONS)                                        1999          1998          1997
------------------------------------------------------------------------------------------
<S>                                                 <C>            <C>           <C>
Current income taxes:
  U.S. Federal                                      $ 65.5         $51.7         $23.0
  State                                                8.4           8.0           7.8
  Foreign                                             11.3           7.2           7.9
------------------------------------------------------------------------------------------
                                                      85.2          66.9          38.7
Deferred income taxes:
  U.S. Federal                                       (12.6)         (4.6)          2.1
  State                                               (2.2)         (1.5)         (3.8)
  Foreign                                              -             4.0           1.4
------------------------------------------------------------------------------------------
                                                     (14.8)         (2.1)          (.3)
------------------------------------------------------------------------------------------
                                                    $ 70.4         $64.8         $38.4
==========================================================================================
</TABLE>

The 1997 tax expense  includes $46.3 million of expense related to income before
the extraordinary  loss, and a $7.9 million benefit related to the extraordinary
loss from early retirement of debt.

A reconciliation of the United States statutory rate to the effective income tax
rate follows:
<TABLE>
<CAPTION>

                                                         YEAR ENDED DECEMBER 31,
                                                  ----------------------------------------
                                                     1999          1998          1997
------------------------------------------------------------------------------------------
<S>                                                   <C>           <C>           <C>
Statutory rate                                        35.0%         35.0%         35.0%
  Effect of:
   State income taxes, net of federal benefit          1.9           2.0           3.1
   Foreign tax differential                            (.4)          (.4)           .1
   Goodwill amortization                               1.1           1.3           2.3
   Research and development credits                   (2.5)         (2.4)         (3.3)
   Foreign sales corporation                          (1.3)          (.6)          -
   Other                                                .2           2.1           1.9
------------------------------------------------------------------------------------------
Effective rate                                        34.0%         37.0%         39.1%
==========================================================================================
</TABLE>

Domestic  and foreign  components  of pretax  income,  including  the 1997 $20.2
million extraordinary loss from early retirement of debt, are as follows:
<TABLE>
<CAPTION>

                                                         YEAR ENDED DECEMBER 31,
                                                   ---------------------------------------
(IN MILLIONS)                                        1999          1998         1997
------------------------------------------------------------------------------------------
<S>                                                 <C>           <C>           <C>
United States                                       $152.7        $137.9        $71.8
Foreign                                               54.4          37.3         26.3
------------------------------------------------------------------------------------------
                                                    $207.1        $175.2        $98.1
==========================================================================================
</TABLE>

Deferred income taxes arise from  differences in the timing of income,  expense,
and tax credit  recognition  for  financial  reporting  and income tax purposes.
Deferred  income  taxes  are  not  provided  on the  undistributed  earnings  of
international  subsidiaries  as the earnings are  considered to be  indefinitely
reinvested.  At December  31, 1999,  these  undistributed  earnings  amounted to
approximately  $24 million.  Upon  distribution  of such earnings in the form of
dividends or otherwise,  the Company would be subject to both U.S.  income taxes
and  withholding  taxes payable to the various foreign  countries.  After taking
into  account  available  foreign  tax  credits  the  amount  of such  taxes  is
immaterial.

                                      F-14
<PAGE>

NOTE 10.  INCOME TAXES (continued)

The components of the net deferred income tax asset (liability) are as follows:
<TABLE>
<CAPTION>

                                                               DECEMBER 31,
                                                        ------------------------
(IN MILLIONS)                                              1999          1998
--------------------------------------------------------------------------------
<S>                                                       <C>          <C>
State and foreign net operating losses                    $  1.8       $   7.5
Other foreign tax benefits                                   -             2.5
Foreign tax credits                                          6.2           4.0
Accrued retiree benefits other than pensions                41.7          41.4
Vacation and deferred compensation accruals                 31.9          28.8
Pension liability                                           15.1          21.0
Other accruals                                              28.3          20.0
--------------------------------------------------------------------------------
  Gross deferred tax asset                                 125.0         125.2
Valuation allowance                                         (5.5)         (7.5)
--------------------------------------------------------------------------------
  Total deferred tax asset                                 119.5         117.7
LIFO inventory                                             (26.9)        (25.6)
Pension prepaid assets                                      (9.2)        (13.8)
Property, plant and equipment                              (41.6)        (44.9)
Patents and technology                                     (15.6)        (19.3)
--------------------------------------------------------------------------------
  Total deferred tax liability                             (93.3)       (103.6)
--------------------------------------------------------------------------------
  Net deferred tax asset                                  $ 26.2       $  14.1
--------------------------------------------------------------------------------
Balance sheet classification:
  Current assets                                          $ 14.3       $  16.2
  Noncurrent assets (liabilities)                           11.9          (2.1)
--------------------------------------------------------------------------------
                                                          $ 26.2       $  14.1
================================================================================
</TABLE>

At December  31, 1999 and 1998,  the Company had  available  approximately  $4.7
million  and  $11.3  million,   respectively,  of  foreign  net  operating  loss
carryforwards  which can only be used to offset foreign  taxable  income.  These
carryforwards  have no expiration  date. At December 31, 1998,  the Company also
had available $30.0 million of state net operating loss carryforwards.  In 1999,
$11.9 million of the state net operating  losses  expired.  In 1999, the Company
utilized $18.1 million of state net operating losses and $6.5 million of foreign
net  operating  losses,  resulting  in a $5.0  million  reduction  of  goodwill.
Utilization   of  the  $4.7  million   remaining   foreign  net  operating  loss
carryforwards  will result in an adjustment  of goodwill.  At December 31, 1998,
the Company  also had other  foreign tax  benefits  of $2.5  million  which were
realized as 1999 cash receipts with no effect on income tax expense.

At December 31, 1998,  the Company  carried a valuation  allowance  equal to the
deferred  tax asset  associated  with all state and foreign net  operating  loss
carryforwards.  In 1999, the valuation  allowance was reduced as a result of the
aforementioned  net operating loss expiration and utilizations.  At December 31,
1999 the Company  carried a valuation  allowance equal to the deferred tax asset
associated  with $3.7 million of foreign tax credits  generated in 1999 and $4.7
million of foreign net operating  loss  carryforwards.  The Company has no other
valuation  allowance because management believes it is more likely than not that
future operations will generate  sufficient  taxable income to realize the other
deferred tax assets.

In 1999, 1998 and 1997, the Company paid income taxes, net of refunds,  of $68.2
million, $49.3 million and $45.6 million, respectively.

During 1998, the Internal  Revenue Service  completed its audit of the Company's
federal income tax return for the year ended December 31, 1995, with no material
findings.


                                      F-15
<PAGE>


NOTE 11.  PENSIONS and OTHER POSTRETIREMENT BENEFITS

The Company has  noncontributing  defined benefit plans covering  certain of its
employees.  The Company also has an unfunded  postretirement  plan that provides
certain  nonvested  health  care and life  insurance  benefits to certain of its
employees.  Data for the pension plans and the other benefit plan are summarized
as follows:
<TABLE>
<CAPTION>

                                                    PENSION BENEFITS       OTHER BENEFITS
                                                      DECEMBER 31,          DECEMBER 31,
                                               ---------------------------------------------
(IN MILLIONS)                                       1999       1998        1999       1998
--------------------------------------------------------------------------------------------
<S>                                               <C>        <C>         <C>        <C>
Change in projected benefit obligations:
   Projected benefit obligations at beginning
     of year                                      $(154.5)   $(115.0)    $(126.5)   $(110.3)
   Service cost                                     (13.5)     (11.5)       (3.0)      (2.5)
   Interest cost                                    (10.7)      (9.2)       (8.3)      (8.2)
   Plan amendments                                   (1.5)     (11.6)        (.9)       -
   Actuarial gains (losses), net                     20.2      (14.0)        7.1      (13.2)
   Benefits paid                                     10.4        6.8         8.0        7.7
--------------------------------------------------------------------------------------------
      Ending projected benefit obligations        $(149.6)   $(154.5)    $(123.6)   $(126.5)
============================================================================================

Change in plan assets:
   Fair value of plan assets at beginning
     of year                                      $ 146.7    $ 139.7     $   -      $   -
   Actual return on plan assets                      20.5        6.9         -          -
   Company contributions                              8.9        6.9         8.0        7.7
   Benefits paid                                    (10.4)      (6.8)       (8.0)      (7.7)
--------------------------------------------------------------------------------------------
      Ending fair value of plan assets            $ 165.7    $ 146.7     $   -      $   -
============================================================================================

Reconciliation to balance sheet amounts:
   Fair value of plan assets exceeds (less than)
     projected benefit obligations                $  16.1    $  (7.8)    $(123.6)   $(126.5)
   Unrecognized prior service (gain) loss cost      (20.0)     (23.5)        4.3        4.0
   Unrecognized net actuarial (gain) loss           (11.3)      16.6        11.9       19.7
--------------------------------------------------------------------------------------------
      Net liability recognized in balance sheet   $ (15.2)   $ (14.7)    $(107.4)   $(102.8)
============================================================================================

Amounts recognized in the balance sheet
  consist of:
   Prepaid benefit costs                          $  23.8    $  25.9     $   -      $   -
   Accrued benefit liabilities                      (39.0)     (40.6)     (107.4)    (102.8)
   Additional minimum liability                       -        (12.5)        -          -
   Intangible asset                                   -          8.5         -          -
   Accumulated other comprehensive income, pretax     -          4.0         -          -
--------------------------------------------------------------------------------------------
      Net liability recognized in balance sheet   $ (15.2)   $ (14.7)    $(107.4)   $(102.8)
============================================================================================
</TABLE>

Assets of the pension  plans are invested  primarily in equities and bonds.  The
other  benefits  plan is not funded,  therefore,  the Company  pays  benefits as
claims are made.

The change in projected benefit obligation included a realized actuarial gain in
1999  resulting  from  increasing the discount rate from 6.75 percent in 1998 to
7.5 percent in 1999.  Benefits paid increased in 1999 primarily due to more lump
sum distributions to retirees.



                                      F-16
<PAGE>


NOTE 11.  PENSIONS and OTHER POSTRETIREMENT BENEFITS (continued)

Included  in the  aggregated  pension  data  in the  above  tables  are  amounts
applicable to plans with projected  benefit  obligations or accumulated  benefit
obligations  in excess of plan  assets.  Amounts  related  to such  plans are as
follows:

<TABLE>
<CAPTION>

                                                           DECEMBER 31,
                                                  ------------------------------
(IN MILLIONS)                                         1999                1998
--------------------------------------------------------------------------------
<S>                                                  <C>                  <C>
Projected benefit obligations                        $(43.6)            $(117.5)
Accumulated benefit obligations                      $(39.7)            $(111.4)
Fair value of plan assets                            $ 29.5             $  98.8
================================================================================
</TABLE>

Effective January 1, 1997, Howmet Corporation  amended the salaried pension plan
to change the formula from "final pay" to "cash  balance." This change  resulted
in a 1997 unrecognized  prior service cost reduction of $37.9 million,  and 1997
expense  of $2.6  million  less  than it would  have been  using the prior  plan
formula.

Components of net periodic cost are as follows:

<TABLE>
<CAPTION>

                                           PENSION BENEFITS       OTHER BENEFITS
(IN MILLIONS)                            1999    1998    1997   1999   1998   1997
-------------------------------------------------------------------------------------
<S>                                      <C>    <C>     <C>     <C>    <C>    <C>
Components of net periodic cost:
  Service cost                           $13.5  $ 11.5  $ 10.1  $ 3.0  $ 2.5  $ 3.4
  Interest cost                           10.7     9.2     8.2    8.3    8.2    7.5
  Expected return on assets              (13.3)  (12.1)  (10.5)   -      -      -
  Recognized losses                         .4      .2      .2     .7     .2     .1
  Recognized prior service (gain) cost    (2.0)   (2.3)   (2.8)    .6     .6     .3
-------------------------------------------------------------------------------------
      Net periodic cost                  $ 9.3  $  6.5  $  5.2  $12.6  $11.5  $11.3
=====================================================================================
</TABLE>

Weighted-average  assumptions used to determine pension costs and liabilities as
of December 31, are as follows:

<TABLE>
<CAPTION>

                                                  1999        1998        1997
--------------------------------------------------------------------------------
<S>                                               <C>         <C>         <C>
Discount rate                                     7.5%        6.75%       7.5%
Expected long-term return on assets               9.0%        9.0%        9.0%
Rate of compensation increase                     4.75%       4.75%       5.0%
================================================================================
</TABLE>

In calculating the Company's postretirement benefit obligation,  the health care
cost trend rate  assumption  for below age 65 benefits  was 8% in 1999 and 9% in
1998 and is assumed to  decline  1%  annually  to 6% in the year 2001 and remain
constant  thereafter.  The health care cost trend rate for above age 65 benefits
was 6.6% in 1999 and 7.4% in 1998 and is assumed to decline  gradually  to 5% in
the year 2001 and remain constant thereafter.

A one-percentage point change in assumed health care cost trend rates would have
the following effects:

<TABLE>
<CAPTION>
                                                1 PERCENTAGE     1 PERCENTAGE
(IN MILLIONS)                                  POINT INCREASE   POINT DECREASE
--------------------------------------------------------------------------------
<S>                                                <C>               <C>
Effect on total service and interest cost
  components                                       $ .1              $ .1
Effect on postretirement benefit obligation        $1.1              $1.1
================================================================================
</TABLE>

In  addition  to the above,  the net  pension  expense  for the  United  Kingdom
operations  was $1.8  million in 1999,  $1.5 million in 1998 and $1.2 million in
1997.

                                      F-17
<PAGE>

NOTE 11.  PENSIONS and OTHER POSTRETIREMENT BENEFITS (continued)

The Company sponsors matching 401(k) savings plans for eligible  employees.  The
Company  matches up to 5% of salaried  employee  contributions,  up to 6% of the
contribution of all full time non-union hourly employees and up to $50 per month
of union hourly employee  contributions.  Company  contributions to the matching
savings plans were  approximately $7.3 million in 1999, $6.7 million in 1998 and
$6.8 million in 1997.


NOTE 12.  PREFERRED STOCK

The Board of Directors  is  authorized  to determine  the terms of any series of
preferred stock. Of the 10,000,000 shares of authorized  preferred stock, 15,000
shares  were  designated  as 9%  Series A  Senior  Cumulative  Preferred  Stock.
Dividends on this  preferred  stock were at 9% and were  payable-in-kind.  These
15,000 shares had a $.01 par value and $10,000 per share liquidation value.

At December 31, 1998, the Company had issued and outstanding 6,560 shares of the
9% Series A Senior Cumulative Preferred Stock. On February 17, 1999, the Company
redeemed  and  retired  all these  outstanding  preferred  shares at their $66.4
million book value.  The Company borrowed under its revolving credit facility to
make the  redemption.  On February 17,  1999,  and at all  previous  times,  all
outstanding  shares of this preferred  stock were owned by Cordant  Technologies
Inc.

At December 31, 1999, there were no preferred shares outstanding.


NOTE 13.  SARS AND STOCK OPTION PLANS

STOCK  APPRECIATION  RIGHTS ("SARS"):  In early 1996, the Company adopted a SARs
plan.  Under the plan, SARs  representing up to 5% of the Company's equity value
were authorized to be issued to executive officers of the Company.  The SARs are
similar to phantom  stock  options and are valued based on  appreciation  of the
value of the  Company's  common stock above the base per share of the SARs.  The
maximum per share  value of the  outstanding  SARs is limited to the  difference
between $15 and the base price per share of the SARs  (generally  $2).  The SARs
vest over a five-year  period  ending in 2001 based upon passage of time and the
operating performance of the Company.  Vesting accelerates if there is a sale of
substantially  all assets,  or a liquidation  of the Company,  or a sale of more
than a 50% interest in the Company.

At  December  31,  1999 and 1998  there  were  approximately  4.3  million  SARs
outstanding. Compensation costs of $6.3 million, $10.8 million and $31.4 million
were  charged  against  income  for  the  SARs  plan in  1999,  1998  and  1997,
respectively.  SARs expense is adjusted  quarterly  based on the market value of
the stock and vesting.

HOWMET  OPTIONS:  The Amended and  Restated  1997 Stock Awards Plan (the "Plan")
provides for grants of stock options, shares of restricted stock and SARs to key
Company  employees.  The Plan provides for grants involving up to an aggregate 5
million  shares of the Company's  common  stock,  and the Company has reserved 5
million common shares for such grants. In December 1997,  4,377,500 options were
granted. 1998 and 1999 changes follow:


                                      F-18
<PAGE>

NOTE 13.  SARS AND STOCK OPTION PLANS (continued)

<TABLE>
<CAPTION>

                                                                      WEIGHTED
                                                                       AVERAGE
                                                            SHARES    PER SHARE
--------------------------------------------------------------------------------
<S>                                                       <C>           <C>
Options outstanding at December 31, 1997 (0 exercisable
  shares)                                                 4,377,500     $15.00
--------------------------------------------------------------------------------
1998 activity:
  Granted                                                    98,000     $14.42
  Forfeited or lapsed                                      (162,500)    $15.00
  Exercised                                                      -        -
--------------------------------------------------------------------------------
Options outstanding at December 31, 1998 (0 exercisable
  shares)                                                 4,313,000     $14.98
================================================================================
1999 activity:
  Granted                                                    82,500     $15.32
  Forfeited or lapsed                                       (75,875)    $15.00
  Exercised                                                 (18,375)    $14.43
--------------------------------------------------------------------------------
OPTIONS OUTSTANDING AT DECEMBER 31, 1999 (1,051,875
  EXERCISABLE SHARES)                                     4,301,250     $15.00
================================================================================
</TABLE>

Options  granted in December 1997 vest and become  exercisable in 25% increments
on January 1 of each year beginning in 1999. The options outstanding at December
31,  1999  have   exercise   prices   ranging   from  $12.22  to  $18.19  and  a
weighted-average  remaining  contractual life of 6.1 years. Of the total options
outstanding at December 31, 1999, 4,124,500 will expire in December 2005, 94,250
in 2006 and 82,500 in 2007.

In accordance  with the provisions of SFAS No. 123,  "Accounting for Stock-Based
Compensation",  the Company  has elected to continue to account for  stock-based
compensation  using the  intrinsic  value  method  under APB Opinion No. 25 and,
accordingly,  does  not  recognize  compensation  cost  for  options  issued  to
employees at market value. The fair values as estimated at the date of grant for
options  granted in 1999,  1998 and 1997 are  $7.97,  $7.39 and $6.04 per share,
respectively.  These  estimated  values were  determined  using a  Black-Scholes
option pricing model with the following weighted average assumptions:

<TABLE>
<CAPTION>
                                                  1999        1998        1997
----------------------------------------------------------------------------------
<S>                                             <C>         <C>         <C>
Expected life                                   6 years     6 years     6 years
Risk-free interest rate                           6.39%       4.65%       5.71%
Volatility                                         .44         .47         .29
================================================================================
</TABLE>

If the Company had accounted for its stock option plan by recording compensation
expense based on the fair value at the grant date on a straight-line  basis over
the  vesting  period,  the pro forma  amounts  of the  Company's  net income and
earnings per share are as follows:

<TABLE>
<CAPTION>

                                                      YEAR ENDED DECEMBER 31,
                                                --------------------------------
(IN MILLIONS, EXCEPT FOR SHARE DATA)               1999        1998        1997
--------------------------------------------------------------------------------
<S>                                               <C>         <C>         <C>
Net income - as reported                          $135.9      $104.8      $ 54.6
Net income - pro forma                             132.0       100.9        54.2
Basic and diluted income per share - as reported    1.36        1.05         .55
Basic and diluted income per share - pro forma      1.32        1.01         .54
================================================================================
</TABLE>


                                      F-19
<PAGE>

NOTE 13.  SARS AND STOCK OPTION PLANS (continued)

CORDANT OPTIONS:  Certain key executives of the Company hold 360,000  contingent
stock  options for Cordant  common stock (the "Cordant  Options").  The exercise
price of the options is the market price of Cordant  common stock on the date of
the grant  ($17.75-$20.47).  The options will vest only if Cordant acquires 100%
of  the  Company  prior  to  December  13,  2001.  The  options  vest,  and  are
exercisable,  50% on the date of such  acquisition and 25% each year thereafter.
They expire not later than ten years after the date of the grant.

Subsequent to the initial grant of the Cordant Options,  the  participants  were
granted rights under an alternative plan whereby if Cordant does not acquire 100
percent of the Company by December 13, 2001,  each  participant  will vest in an
amount equal to the gain in such Cordant options on such date.

Whether the executives  vest in the Cordant  Options or vest in the  alternative
plan, the Company will record  compensation  expense for one but not both plans.
Because vesting is assured under the alternative  plan, the Company is recording
compensation  expense  related  to that plan over the  six-year  vesting  period
ending December 13, 2001. In 1999,  1998 and 1997, $.1 million,  $.6 million and
$2.9 million, respectively, of compensation expense was charged against income.

See Note 1 and Note 25  regarding  the  proposed  purchase of all the  Company's
common stock not currently  owned by Cordant.  See Note 25 regarding  changes to
the terms of the Cordant Options.

NOTE 14.  SEGMENT INFORMATION

The Company's reportable segment manufactures investment cast components for the
commercial and defense aero and industrial gas turbine  industries.  The Company
conducts  this  business at many  operating  units which are similar in terms of
product,  production process, customer and distribution systems and have similar
economic characteristics. These similar operating units have been aggregated for
presentation purposes below.

Data for the investment  casting  segment and a  reconciliation  to consolidated
amounts are  presented  in the tables  below.  Amounts  below the  "Income  from
operations" line in the  consolidated  statements of income are not allocated to
the investment casting segment and, therefore, are not presented below.

<TABLE>
<CAPTION>
                                                   YEAR ENDED DECEMBER 31,
                                          --------------------------------------
(IN MILLIONS)                                 1999          1998         1997
--------------------------------------------------------------------------------
<S>                                         <C>           <C>          <C>
Net sales to external customers:
   Investment casting and consolidated      $1,459.7      $1,350.6     $1,258.2
================================================================================

Income from operations:
   Investment casting                       $  241.1      $  212.3     $  197.6
   Adjust to LIFO                               (1.8)           .8         (1.7)
   SARs expense                                 (6.3)        (10.8)       (31.4)
   Other unallocated corporate expense, net    (17.6)        (12.6)       (10.0)
--------------------------------------------------------------------------------
      Consolidated                          $  215.4      $  189.7     $  154.5
================================================================================

Total assets:
   Investment casting                       $1,084.8      $1,037.2     $  976.6
   Adjust to LIFO                               (4.4)         (2.6)        (3.4)
   Deferred tax asset                           26.2          16.2         16.3
   Restricted Trust (Note 8)                     -           716.4        716.4
   Other corporate assets                       13.5          33.4         31.1
--------------------------------------------------------------------------------
      Consolidated                          $1,120.1      $1,800.6     $1,737.0
================================================================================
</TABLE>

                                      F-20
<PAGE>

NOTE 14.  SEGMENT INFORMATION (continued)

<TABLE>
<CAPTION>

                                                   YEAR ENDED DECEMBER 31,
                                          --------------------------------------
(IN MILLIONS)                                  1999          1998         1997
--------------------------------------------------------------------------------
<S>                                           <C>            <C>          <C>
Depreciation and amortization:
   Investment casting                         $ 65.8         $59.2        $59.0
   Corporate                                     1.0           1.0          7.9
--------------------------------------------------------------------------------
      Consolidated                            $ 66.8         $60.2        $66.9
================================================================================

Capital expenditures:
   Investment casting                         $112.1         $82.3        $56.5
   Corporate                                      .8            .7           .4
--------------------------------------------------------------------------------
      Consolidated                            $112.9         $83.0        $56.9
================================================================================
</TABLE>

Sales are from cast products  manufactured to the specifications of customers in
the markets presented below. Other in the table includes sales of $53 million in
1997 related to the aircraft engine component  refurbishment  business which was
sold in 1997 (Note 20).

<TABLE>
<CAPTION>

                                                    YEAR ENDED DECEMBER 31,
                                            ------------------------------------
(IN MILLIONS)                                    1999        1998        1997
--------------------------------------------------------------------------------
<S>                                           <C>         <C>         <C>
Aero engine and airframe                      $  733.7    $  802.5    $  739.9
Industrial gas turbine                           677.4       476.1       402.5
Other                                             48.6        72.0       115.8
--------------------------------------------------------------------------------
      Total                                   $1,459.7    $1,350.6    $1,258.2
================================================================================
</TABLE>

Sales to three of the Company's customers exceed 10% of total consolidated sales
for 1999.  Sales to these three  customers  were $357 million,  $184 million and
$148 million in 1999. Receivables from these three customers were $20.9 million,
$26.3  million,  and $12.1  million at December  31,  1999.  Sales to two of the
Company's  customers exceed 10% of total  consolidated  sales for 1998 and 1997.
Sales to these two customers were $251 million and $194 million in 1998 and $253
million and $185 million in 1997.  Receivables from these two customers were $18
million and $11.3 million at December 31, 1998.

Net sales under U.S. government  contracts and subcontracts were $199 million in
1999, $183 million in 1998 and $179 million in 1997.  Included in the 1999 sales
amounts are $71 million of  subcontract  sales to the three  largest  customers.
Included  in the 1998 and 1997 sales  amounts are  subcontract  sales to the two
largest customers of $92 million and $85 million, respectively.


NOTE 15. GEOGRAPHIC INFORMATION

The  Company is a  multinational  entity  with  operating  subsidiaries  in four
geographic  regions:  United  States,  Canada,  Europe  (France  and the  United
Kingdom),  and Japan.  Intercompany transfers between geographic regions are not
significant.  Allocated  long-lived  assets in the  following  table exclude the
$716.4 million  Restricted Trust (see Note 8). Sales are attributed to countries
based on where the product is shipped.


                                      F-21
<PAGE>

NOTE 15. GEOGRAPHIC INFORMATION (continued)

Consolidated   sales  to  external  customers  were  shipped  to  the  following
geographic regions:

<TABLE>
<CAPTION>
                                                      YEAR ENDED DECEMBER 31,
                                               ---------------------------------
(IN MILLIONS)                                      1999        1998        1997
--------------------------------------------------------------------------------
<S>                                             <C>         <C>         <C>
Sales to external customers
   United States                                $  845.3    $  784.8    $  783.4
   Canada                                           69.2        76.8        71.0
   Europe                                          459.0       431.8       358.3
   Asia                                             86.2        57.2        45.5
--------------------------------------------------------------------------------
Consolidated sales to external customers        $1,459.7    $1,350.6    $1,258.2
================================================================================
</TABLE>

Long-lived  assets,  excluding  long-term  deferred  tax  assets,  were  in  the
following geographic regions:

<TABLE>
<CAPTION>
                                                            DECEMBER 31,
                                               ---------------------------------
(IN MILLIONS)                                      1999        1998        1997
--------------------------------------------------------------------------------
<S>                                               <C>         <C>         <C>
Long-lived assets
   United States                                  $638.5      $612.1      $590.2
   Canada                                           26.2        31.6        22.6
   Europe                                           86.4        90.3        87.8
   Japan                                            18.1        15.4         -
--------------------------------------------------------------------------------
Consolidated long-lived assets                    $769.2      $749.4      $700.6
================================================================================
</TABLE>


NOTE 16.  AFFILIATES INFORMATION

Prior  to the 1997  ownership  change  (Note  1),  the  Company  had  management
agreements  with a member of The  Carlyle  Group and with  Cordant  for  certain
management and financial  advisory  services.  Each  agreement  provided for the
payment  of an annual  management  fee of $1  million.  In  December  1997,  the
agreement  with this Carlyle  affiliate  was amended to reduce the annual fee to
$.5 million, and on February 8, 1999 (the date it sold its ownership interest to
Cordant) the agreement with the Carlyle affiliate was terminated.  In connection
with the 1997 ownership change,  the Company and Cordant then entered into a new
service  agreement  whereby  Cordant  provides  a wide  range of  administrative
services.  For these  services in 1999 and 1998,  the Company  paid Cordant $1.9
million and $1.5 million respectively,  plus the cost of third party charges for
service without markup.

Upon consummation of the 1997 ownership change (Note 1), the Company and Cordant
entered  into a  corporate  agreement  (the  "Corporate  Agreement").  Under the
Corporate Agreement, the Company granted preemptive rights to Cordant which give
Cordant  the right,  upon any  issuance  or sale by the Company of its shares of
capital  stock,  to  acquire  a number of such  shares  sufficient  to  maintain
Cordant's  percentage  ownership of the Company's  outstanding  voting power and
equity  immediately  prior to such  issuance or sale.  The purchase of shares of
common stock  pursuant to the  exercise of a preemptive  right will be at market
price,  or, in the case of a public offering by the Company for cash, at a price
per share equal to the net proceeds  per share to the Company in such  offering.
The preemptive rights expire in the event Cordant reduces its ownership interest
to less than 20%.

In addition, under the Corporate Agreement, Cordant has agreed, that without the
prior  consent  of a  majority  (but  not  less  than  two) of the  non-employee
directors  of the  Company  who  are  not  directors  or  employees  of  Cordant
("Independent Directors"), neither Cordant nor any of its affiliates may acquire
publicly  held shares if such  acquisition  would  reduce the number of publicly
held shares to less than 14% of the total  number of shares  outstanding,  other
than (x) pursuant to a tender offer to acquire all of the outstanding  shares of
common  stock not  beneficially  owned by Cordant or (y) pursuant to a merger or
other  business  combination in which holders of all  outstanding  publicly held
shares are treated equally.  The foregoing  provision of the Corporate Agreement
may not be amended or waived by the  Company  without  the consent of a majority
(but not less than two) of the Independent Directors. See Note 25 for amendments
to the Corporate Agreement.


                                      F-22
<PAGE>

NOTE 16.  AFFILIATES INFORMATION (continued)

In December  1995,  certain  executives  of the  Company and Howmet  Corporation
invested  $4.7  million  in  Carlyle-Blade.  Upon the  1997  and  1999  sales of
Carlyle-Blade's   interest  in  the  Company,   the  executives   received  cash
distributions from Carlyle-Blade, pro rata to their investment in Carlyle-Blade.


NOTE 17.  FINANCIAL INSTRUMENTS

The following methods and assumptions were used in estimating fair values:

Cash and cash  equivalents:  The  carrying  amount of cash and cash  equivalents
approximates fair value.

Receivables  and  payables:  The fair values of trade  receivables  and payables
approximate  their carrying  amounts.  Financial  instruments  which potentially
subject the Company to credit risk consist principally of trade receivables. The
Company does not require  collateral and maintains reserves for potential credit
losses related to trade accounts  receivable.  The Company's accounts receivable
are  principally  due from companies in the aerospace and industrial gas turbine
engine  industries.  See Note 14 for  receivables  from the Company's  customers
whose sales exceed 10% of total consolidated sales.

Short-term  and  long-term  debt:  Because  the $300  Million  Revolving  Credit
Facility  borrowings  and other  borrowings  are generally at variable  interest
rates, their carrying value approximates their fair value.

Off-balance  sheet  instruments:   The  Company  enters  into  forward  exchange
contracts as a hedge against  currency  fluctuations of certain foreign currency
transactions.  At December 31, 1999,  the Company had  contracts to buy and sell
various  currencies  with  maturity  dates ranging from January 2000 to December
2000. The total notional  contract value of these  transactions in U.S.  dollars
was $51 million at December 31, 1999.  The fair value of these  contracts is the
$.2 million of unrecognized  gain of such contracts as of December 31, 1999. The
fair value of these foreign  currency  contracts was estimated based on December
31, 1999 foreign  currency rates obtained from dealers.  Gains or losses arising
from foreign  exchange  contracts offset foreign exchange gains or losses on the
underlying hedged  commitments,  assets or liabilities.  The impact on financial
position and results of operations from likely changes in foreign exchange rates
is  mitigated  by  minimizing  risk  through  hedging  transactions  related  to
commitments.

The Company enters into forward  exchange  contracts with major dealers and does
not require collateral. If a counterparty was not able to completely fulfill its
contract obligations,  the Company would incur a loss equal to the amount of any
gain on the contract.


NOTE 18.  CONTINGENT MATTERS

Starting  in late 1998,  the  Company  discovered  certain  product  testing and
specification  non-compliance  issues at the  Montreal  (Canada)  and  Bethlehem
(Pennsylvania)  operations of its Howmet Aluminum Casting subsidiaries (formerly
called Cercast). In 1999, the Company discovered several additional instances of
other testing and specification non-compliance at its Hillsboro (Texas) aluminum
casting facility and at the Montreal and Bethlehem  operations.  The Company has
notified customers and the appropriate government agencies and has substantially
completed  correction  of these  issues.  The  Company  knows  of no  in-service
problems  associated  with any of these  issues.  In addition,  Howmet  Aluminum
Casting has been,  and expects to continue for some time to be, late in delivery
of products to certain customers,  resulting in lower sales.  However,  delivery
performance in 2000 is expected to improve significantly.


                                      F-23
<PAGE>

NOTE 18.  CONTINGENT MATTERS (continued)

The Defense  Criminal  Investigative  Service (the "DCIS"),  in conjunction with
other  agents  from the  Department  of  Defense  and NASA,  has  undertaken  an
investigation  with respect to certain of the foregoing  matters at the Montreal
and  Bethlehem   facilities.   The  DCIS  has  informed  the  Company  that  the
investigation concerns possible violations of the False Claims Act and the False
Statements Act, as well as possible criminal penalties. The Company is unable to
determine  definitively  what,  if any,  civil or  criminal  penalties  might be
imposed as a result of the investigation.

All customer claims relating to the foregoing  matters either have been resolved
or, in the Company's judgment, will be resolved within existing reserves.

The Company  believes  that  additional  cost for the foregoing  matters  beyond
amounts  accrued,  if any,  would  not have a  material  adverse  effect  on the
Company's financial position,  cash flow, or annual operating results.  However,
additional cost, when and if accrued,  may have a material adverse impact on the
quarter in which it may be accrued.

On August 6, 1999, the Company entered into an Administrative Agreement with the
U.S. Air Force terminating Notices of Proposed Debarment issued on March 1, 1999
relating  to certain of the  foregoing  matters.  The  Administrative  Agreement
permitted  the  affected  facilities  to resume  accepting  new U.S.  government
contracts and subcontracts.

Shortly after Cordant  announced,  on November 12, 1999, its proposal to acquire
all of the  outstanding  shares of the  Company not  currently  owned by Cordant
(Notes 1 and 25), eight separate but nearly identical lawsuits were filed in the
Court of Chancery of Delaware  against the  Company,  Cordant and each member of
the Company's Board of Directors. The plaintiffs are shareholders of the Company
who complain that Cordant's  offer for their shares in the Company is not for an
adequate price. The plaintiffs request the following relief:  certification as a
class  action with  themselves  designated  as Class  Representatives;  an order
enjoining  Cordant,  the Company and its Board of Directors from proceeding with
the transaction; and money damages and the costs of bringing the lawsuit. On the
motion of the defendants,  the Court has  consolidated the cases under the style
of "In re Howmet  International  Shareholders  Litigation" and directed that the
plaintiffs file an Amended Complaint  reflecting the consolidation.  The Company
is  defending  these  actions and believes that any outcome will not result in a
materially adverse impact to the financial position of the Company.

The  Company,  in  its  ordinary  course  of  business,  is  involved  in  other
litigation,  administrative  proceedings and  investigations of various types in
several jurisdictions. The Company believes that these are routine in nature and
incidental to its operations,  and that the outcome of any of these  proceedings
will  not have a  material  adverse  effect  upon its  operations  or  financial
condition.


NOTE 19.  ENVIRONMENTAL MATTERS

In connection with the Acquisition,  Pechiney,  S.A. indemnified the Company for
environmental  liabilities  relating to Howmet Corporation  stemming from events
occurring or conditions  existing on or prior to the Acquisition,  to the extent
that such liabilities exceed a cumulative $6 million. This threshold has not yet
been reached.  This indemnification  applies to all of the environmental matters
discussed in the next two paragraphs.  It is probable that changes in any of the
accrued liabilities discussed in the next two paragraphs will result in an equal
change in the amount of the  receivable  from  Pechiney,  S.A.  pursuant to this
indemnification.



                                      F-24
<PAGE>

NOTE 19.  ENVIRONMENTAL MATTERS (continued)

The Company has  received  test  results  indicating  levels of  polychlorinated
biphenyls  ("PCBs")  at its  Dover,  New  Jersey  facility  which  will  require
remediation.  These levels have been  reported to the New Jersey  Department  of
Environmental Protection (the "NJDEP"), and the Company is preparing a work plan
to define the risk and to test possible clean-up options.  The statement of work
must be  approved  by the NJDEP  pursuant  to an  Administrative  Consent  Order
entered  into  between  the  Company  and the  NJDEP on May 20,  1991  regarding
clean-up  of  the  site.   Various  remedies  are  possible  and  could  involve
expenditures  ranging  from $3 million to $22  million or more.  The Company has
recorded a $3 million long-term liability as of December 31, 1999 and $2 million
as of December 31, 1998 for this matter.  The  indemnification  discussed  above
applies to the costs associated with this matter.

Besides the  above-mentioned  remediation  work required at the Company's Dover,
New Jersey plant, liabilities exist for clean-up costs associated with hazardous
materials at seven other on-site and off-site locations. The Company has been or
may  be  named  a  potentially   responsible   party  under  the   Comprehensive
Environmental Response,  Compensation and Liability Act or similar state laws at
these  locations.  At December  31,  1999,  $4 million of accrued  environmental
liabilities  are  included  in the  consolidated  balance  sheet for these seven
sites. The December 31, 1998 consolidated balance sheet includes $4.2 million of
accrued  liabilities for nine such sites.  The  indemnification  discussed above
applies to these costs.

In  addition  to the  above  environmental  matters,  and  unrelated  to  Howmet
Corporation,  Howmet  Holdings  Corporation  and Pechiney,  S.A. are jointly and
severally liable for  environmental  contamination  and related costs associated
with  certain   discontinued  mining  operations  owned  and/or  operated  by  a
predecessor-in-interest  until  the  early  1960's.  These  liabilities  include
approximately  $7 million in remaining  remediation and natural  resource damage
liabilities  at the Blackbird Mine site in Idaho and a minimum of $10 million in
investigation  and  remediation  costs at the  Holden  Mine site in  Washington.
Pechiney, S.A. has agreed to indemnify the Company for such liabilities in full.
In  connection  with these  environmental  matters,  the Company  recorded a $17
million liability and an equal $17 million receivable from Pechiney,  S.A. as of
December 31, 1999 and $26 million for both the  liability  and  receivable as of
December 31, 1998.  Pechiney,  S.A. is currently  funding all amounts related to
these liabilities.

Estimated  environmental  costs  are  not  expected  to  materially  impact  the
financial position or the results of the Company's operations in future periods.
However,  environmental  clean-ups are  protracted  in length and  environmental
costs in future  periods  are  subject to changes in  environmental  remediation
regulations.   Any  costs   which  are  not  covered  by  the   Pechiney,   S.A.
indemnifications  and which are in excess of amounts  currently  accrued will be
charged to operations in the periods in which they occur.


NOTE 20.  SALE OF REFURBISHMENT BUSINESS

In September 1997, the Company sold its aircraft engine component  refurbishment
business  (other than its coating  operations).  The Company  received  net cash
proceeds of  approximately  $44.9 million  after-tax and related  expenses.  The
sales  transaction  had an  immaterial  effect on net income.  Net sales of such
business  were  approximately  $53  million in 1997 for the period  prior to the
September sale. Income from operations of this business were immaterial in 1997.

                                      F-25
<PAGE>

NOTE 21.  OTHER COMPREHENSIVE INCOME

Items listed under the heading "Other comprehensive  income" in the Consolidated
Statements of Common  Stockholders'  Equity and Redeemable  Preferred  Stock are
shown net of income  taxes.  Taxes related to the changes in  accumulated  other
comprehensive income were as follows:

<TABLE>
<CAPTION>

(IN MILLIONS)                                     1999        1998        1997
--------------------------------------------------------------------------------
<S>                                              <C>         <C>         <C>
Minimum pension liability                        $(1.6)      $ 1.6       $ -
Unrealized gains on securities                     (.7)        -           -
Cumulative translation adjustment                  -          (3.1)        3.1
--------------------------------------------------------------------------------
   Total tax benefit/(expense)                   $(2.3)      $(1.5)       $3.1
================================================================================
</TABLE>

The accumulated balance, net of tax, for each item in other comprehensive income
is as follows:
<TABLE>
<CAPTION>

(IN MILLIONS)                                     1999        1998        1997
--------------------------------------------------------------------------------
<S>                                              <C>         <C>         <C>
Minimum pension liability                       $  -         $(2.4)      $ -
Unrealized gains on securities                     1.2         -           -
Cumulative translation adjustment                (12.9)       (2.5)       (5.6)
--------------------------------------------------------------------------------
   Accumulated other comprehensive income       $(11.7)      $(4.9)      $(5.6)
================================================================================
</TABLE>

The increased loss in the cumulative  translation  adjustment resulted primarily
from a strengthening of the French Franc against the United States dollar.


NOTE 22.  OTHER INVESTMENTS

The Company has investments in equities and fixed income securities for deferred
compensation  plans. These assets are classified as "Other noncurrent assets" on
the balance  sheet.  Fair market value is determined by quoted market prices and
are carried on the balance sheet at market value.  Information  concerning these
investments at December 31, 1999 and 1998 was as follows:

<TABLE>
<CAPTION>

(IN MILLIONS)                                               1999        1998
--------------------------------------------------------------------------------
<S>                                                         <C>         <C>
Fair market value                                           $7.5        $4.6
Unrealized gains on securities                               1.9          .1
Cost of equities                                             4.5         3.6
Cost of fixed income securities                              1.1          .9
================================================================================
</TABLE>


NOTE 23.  OTHER INFORMATION

Other,  net in the 1998 and 1997  consolidated  statements  of  income  includes
equity in income of  unconsolidated  affiliates of $.4 million and $1.5 million,
respectively. In 1999, all subsidiaries of the Company were consolidated. Other,
net also includes losses on sales of receivables in all three years (Note 7) and
$2.6 million of 1997 costs  associated  with the 1997 public  offering of common
stock.

In 1999, the Company received a one-time customer advance on accounts receivable
of $40  million.  This  advance  will be  applied  against  accounts  receivable
beginning in June 2001.


                                      F-26
<PAGE>

NOTE 24.  QUARTERLY FINANCIAL HIGHLIGHTS (UNAUDITED)

The table below presents the Company's quarterly  financial  highlights for 1999
and 1998. The Company's business is generally not seasonal.  However, the timing
of  customer  inventory  needs in  relation to engine  production  and  delivery
schedules  can  cause  quarterly   fluctuations   in  the  Company's   operating
performance that are not necessarily related to underlying business conditions.

<TABLE>
<CAPTION>

                                                    1999 QUARTER ENDED
                                           -------------------------------------
(IN MILLIONS, EXCEPT PER SHARE DATA)        DEC 31    SEP 30   JUN 30    MAR 31
--------------------------------------------------------------------------------
<S>                                          <C>      <C>      <C>       <C>
Net sales                                   $362.1    $355.2   $369.7    $372.7
Operating income                              46.7      59.8     51.7      57.2
Net income  (a)                               32.8      37.8     31.3      34.8

Income per common share (basic and diluted) $  .33    $  .38   $  .31    $  .34
Market price
   High                                     $18.63    $20.63   $19.31    $16.94
   Low                                      $11.19    $13.75   $14.13    $13.75
================================================================================
<CAPTION>
                                                    1998 Quarter Ended
                                           -------------------------------------
(in millions, except per share data)        Dec 31    Sep 30   Jun 30    Mar 31
--------------------------------------------------------------------------------
<S>                                         <C>       <C>      <C>       <C>
Net sales                                   $354.9    $331.6   $335.7    $328.4
Operating income                              32.5      62.6     49.8      44.8
Net income  (b)                               20.4      38.1     27.4      24.5

Income per common share (basic and diluted) $  .19    $  .37   $  .26    $  .23
Market price
   High                                     $17.63    $15.38   $18.25    $18.63
   Low                                      $10.63    $ 9.75   $13.56    $13.63
================================================================================
</TABLE>
----------
(a)1999 includes pretax  (expense)  income related to the Company's SARs plan of
   $1.0 million,  $(4.2) million,  $2.3 million and $(5.4) million in the first,
   second,  third and fourth quarters,  respectively.  The first quarter benefit
   was reversed in the second quarter and the third quarter benefit was reversed
   in the fourth quarter due to the Company's common stock price fluctuations.

   The third quarter includes a $2.9 million benefit related to Cordant Options.
   $.8 million of this benefit was reversed in the fourth quarter.

   In the third quarter of 1999, the annual  effective tax rate was reduced from
   37% to 36%,  and in the fourth  quarter it was reduced  from 36% to 34%.  The
   effect of applying the reductions  retroactively,  from the beginning of 1999
   to the end of the  quarter  preceding  the quarter of change,  benefited  the
   third quarter by $1 million,  after-tax,  and benefited the fourth quarter by
   $3.2 million, after-tax.

(b)1998 includes pretax  (expense)  income related to the Company's SARs plan of
   $(2.7)  million,  $(2.6)  million,  $8.1  million and $(13.6)  million in the
   first,  second,  third and fourth quarters,  respectively.  The third quarter
   benefit was reversed in the fourth quarter due to the Company's  common stock
   price fluctuations.

   In the third quarter of 1998, the annual  effective tax rate was reduced from
   40% to 38%,  and in the fourth  quarter it was reduced  from 38% to 37%.  The
   effect of applying the reductions  retroactively,  from the beginning of 1998
   to the end of the  quarter  preceding  the quarter of change,  benefited  the
   third quarter by $1.7 million, after-tax, and benefited the fourth quarter by
   $1.5 million, after-tax.


                                      F-27
<PAGE>




NOTE 25.  EVENTS SUBSEQUENT TO DATE OF REPORT OF INDEPENDENT AUDITORS
            (UNAUDITED)

On March 10, 2000, Cordant informed the Independent  Directors  Committee of the
Company's  Board of  Directors  that it was  willing  to  increase  its offer to
acquire all of the  outstanding  shares of the Company  not  currently  owned by
Cordant to $18.75 per share, but following further  discussions no agreement was
reached. (See Note 1.)

On March 14, 2000, Alcoa Inc. ("Alcoa") and Cordant announced an agreement under
which Alcoa  agreed to acquire  Cordant.  Alcoa has advised the Company  that it
intends to enter into  discussions with the Independent  Directors  Committee to
pursue the acquisition of the outstanding  publicly held shares of the Company's
stock.

On March 13, 2000, the Corporate Agreement (see Note 16) between the Company and
Cordant was amended with respect to the two ways in which  Cordant,  without the
prior consent of a majority (but not less than two) of the Company's Independent
Directors,  may acquire the outstanding  shares of common stock not beneficially
owned by Cordant (the  "Publicly  Held  Shares") in an  acquisition  which would
reduce the number of Publicly  Held Shares to less than 14% of the total  number
of shares outstanding. The first alternative, which is a Cordant tender offer to
acquire all of the Publicly Held Shares,  was amended to require that at least a
majority  of the  Publicly  Held  Shares are  tendered  and the tender  offer is
followed by a prompt "follow up" merger at the same price for untendered shares.
The second alternative, which is a merger or other business combination in which
holders of the Publicly Held Shares are treated equally,  was amended to require
that  holders of at least a majority of the  Publicly  Held  Shares  approve the
merger. On March 14, 2000, Alcoa agreed to be bound by these same limitations in
the Corporate Agreement as Cordant is.

The  agreement  by which Alcoa would  acquire  Cordant  provides for all Cordant
stock options to become  exercisable upon completion of Alcoa's tender offer and
either  cashed  out at the $57 per share  tender  offer  price  less the  option
exercise price or, at the holder's  election,  converted into Alcoa common stock
options of equivalent value to the Cordant Options.




                                      F-28
<PAGE>


MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS


GENERAL

The Company's  operating  performance is affected by general economic trends and
by the following key factors.

Industry  Trends:  The Company  manufactures  cast  components  for the aircraft
-----------------
engine,  airframe and industrial gas turbine ("IGT")  markets through  operating
companies located in the United States,  France, the United Kingdom,  Canada and
Japan. (See Notes 14 and 15 of Notes to Consolidated Financial Statements.) Such
castings are made from nickel and cobalt based superalloys,  as well as titanium
and aluminum. In the two aircraft related markets, the Company supplies parts to
both the military and the commercial  sectors.  Sales of the Company's  products
vary as a function of aircraft and IGT market demand.

Aircraft  component  sales  represent  approximately  50% of total  1999  sales,
including sales to military and defense contractors which comprise approximately
14% of total 1999 sales.  The Company's sales to commercial  original  equipment
manufacturers  ("OEMs")  lead the market by  approximately  nine months.  Hence,
while  commercial  aircraft  deliveries  were at an all time  high in 1999,  the
Company's  component  sales  have  been  adversely  affected,  due to  decreased
aircraft  production rates for 2000.  Aircraft  production rates are expected to
decline  through 2002.  Despite the reduction in the new aircraft build rate for
aircraft with greater than 100 seats, the Company believes that aviation derived
revenues  and  earnings  will  grow.  This  projection  is due to (i)  increased
aftermarket sales supporting the installed fleet of nearly 13,000 aircraft, (ii)
increased use of technologically advanced, higher revenue components,  and (iii)
market share  increases with certain key customers.  The aircraft from which the
Company  derives its highest  revenues is not  expected to decline to the extent
projected for the overall aircraft build rate of the industry. Further, regional
jet and  business  aircraft  markets  where the  Company  has a dominant  market
position, are expected to remain strong through 2002.

Recently,  aviation  fuel prices  have  increased  significantly.  Historically,
increased  fuel  prices for  commercial  aviation  has had a negative  impact on
airline  profitability,  resulting  in a reduction  of new  aircraft  orders and
engine overhaul rates.

Industrial gas turbine  activity,  which  represented about 46% of the Company's
revenues in 1999, experienced a 42% increase over 1998. Industrial gas turbines,
especially in the larger (greater than 120 megawatts) size range,  are primarily
used to generate electric power.  These IGTs are in high demand at power plants,
because  natural gas is  available  in large  supplies,  burns  cleanly,  and is
comparatively  inexpensive.  Also,  IGTs,  especially those  incorporating  aero
technologies,  operate at much higher efficiencies compared to alternatives such
as coal and oil  fired  steam  turbines.  Further  increasing  the  demand  is a
recently  heightened  awareness  in  the  U.S.  of  insufficient  reserve  power
generating  capacity.  IGT power generation  installations  can be installed and
made operational more quickly than the  alternatives.  As a result,  most of the
major IGT OEMs have significantly  increased production rates. Several have sold
all their capacity for 2000 and 2001 and are now accepting  orders for 2002. The
Company is the  majority  supplier of turbine  airfoils at each of the major OEM
producers,  a  position  that is  enhanced  by the fact  that all such  OEMs are
introducing  advanced new higher technology engines for which the Company is the
primary provider of the critical turbine airfoils. As a result of the heightened
OEM demand and expected growth in aftermarket  component sales from an expanding
installed base of engines,  the Company expects the percentage growth of its IGT
business to be in the low teens in 2000 and to continue with positive growth in



                                      F-29
<PAGE>

the next few years thereafter.

Pricing:  The Company has  experienced  pressure from all of its major customers
--------
for price reductions. This pressure is the result of the competitive environment
which the Company's OEM customers are facing in the selling of their products in
the worldwide  market.  The adverse effect of price reductions is expected to be
offset  to a large  extent  through  Company  and  joint  Company/customer  cost
reduction  programs.  These cost reductions include  significant  efficiency and
yield improvements on new,  technologically advanced parts, as they move through
the normal product life cycle.

Cost  Reduction  and   Productivity   Programs:   Since  1992  the  Company  has
-----------------------------------------------
significantly reduced costs and improved productivity, delivery and cycle times.
As a result of these  improvements,  the  Company  has  enhanced  its  financial
performance,  and management believes further improvements can be achieved.  The
Company employs specific programs designed to achieve these improvements.  These
programs include synchronous manufacturing, kaizen events (in which solutions to
specific  operational  problems are achieved by teams of workers in concentrated
time periods),  quick shop intelligence  (daily meetings of plant staff in which
product-specific manufacturing issues are reviewed and solved),  standardization
of  manufacturing  and business  processes  throughout the Company's  facilities
worldwide,  specialization  by plants in the  production of certain  families of
castings, and inter-facility  manufacturing and technical support, including the
sharing  of  best  practices,  under a "One  Howmet"  concept.  There  can be no
assurance, however, that cost reductions can exceed price reductions and improve
margins.

Sale of Refurbishment Business: In September 1997, the Company sold its aircraft
-------------------------------
engine component refurbishment business (other than its coating operations). The
Company  received net cash proceeds of  approximately  $44.9  million  after-tax
payments and related expenses.  The sale had an immaterial effect on net income.
Net sales of this business were approximately $53 million in 1997 for the period
prior to the  September  sale.  Earnings  from  operations of this business were
immaterial in all periods.

Backlog:  The Company's  backlog of orders as of December 31, 1999 and 1998 were
--------
$765  million  and $877  million,  respectively.  Because  of the short lead and
delivery times, backlog may not be a significant indicator of future performance
of the Company.



                                      F-30
<PAGE>

RESULTS OF OPERATIONS YEAR ENDED 1999 COMPARED TO YEAR ENDED 1998

Summary  financial  information  for the years  ended  December  31 follows:
<TABLE>
<CAPTION>

                                                              Better/
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)   1999       1998     (Worse)  Percent
--------------------------------------------------------------------------------
<S>                                    <C>        <C>          <C>        <C>
Net sales                              $1,459.7   $1,350.6     $109.1      8
Gross profit                              343.9      311.5       32.4     10
Selling, general and administrative
 expense                                  108.6      101.6       (7.0)    (7)
Research and development expense           19.9       20.2         .3      1
--------------------------------------------------------------------------------

Income from operations                    215.4      189.7       25.7     14
Net interest expense                       (5.3)     (11.1)       5.8     52
Other, net                                 (3.0)      (3.4)        .4     12
Income taxes                              (70.4)     (64.8)      (5.6)    (9)
--------------------------------------------------------------------------------

Net income                             $  136.7   $  110.4     $ 26.3     24
--------------------------------------------------------------------------------

Income per common share
(basic and diluted)                    $   1.36   $   1.05     $  .31     30
--------------------------------------------------------------------------------
</TABLE>

Net sales in 1999 were 8% higher than in 1998. The 1999 sales increase is due to
volume increases in the industrial gas turbine market.  Sales to the aero market
were  approximately  9% lower  than  1998,  including  an  approximate  2% price
decrease.  The lower aero sales in 1999 were primarily attributable to decreased
commercial  build  rates  and  customer  inventory  corrections.  Sales  to  the
industrial  gas turbine market were  approximately  42% higher than 1998, net of
price reductions of approximately 3%. The aforementioned price reductions were a
function of sharing  cost  savings  with  customers.  The Company  continues  to
experience  pressure  from its major  customers  for price  reductions  and will
experience  significant  reductions  again in 2000.  The adverse  effect of such
reductions  is  expected to be offset by the  benefits of higher  volume and the
effect of Company and joint Company/customer cost reduction programs. These cost
reductions  include  significant  efficiency  and  yield  improvements  on  new,
technologically  advanced  parts,  as they move through the normal  product life
cycle.  While  anticipated,  the continuation of these cost reductions cannot be
assured.

Gross profit,  as reported,  was $32.4 million  higher in 1999 than in 1998. The
principal  reason for the 1999  improvement was increased  volume.  Cost control
enabled the Company to capitalize on such volume increases. Partially offsetting
the  improvement  was the adverse  effect of continuing  production  problems at
certain  aluminum  casting  plants.  The 1999 gross margin  percentage was 23.6%
compared with 23.1% for 1998. The Howmet  Aluminum  Casting  problems  discussed
below  adversely  affected the margins by  approximately  1% in 1999 and 0.4% in
1998.

Selling, general and administrative expense was $7.0 million higher in 1999 than
in 1998. The increase is primarily  related to general price  increases,  higher
costs to support higher  volumes,  and including a full year of SG&A expense for
the Company's  Japanese  subsidiary.  Lower costs for SARs were offset by higher
performance  related  employee  compensation  costs  and  the  cost  of  systems
upgrades. SARs expense will continue to decline in future years. However, if the
market price of the Company's  common stock  fluctuates below $15 per share, the
amount of expense  will  fluctuate  and could  result in the  Company  recording
profits from the reversal of  previously  recorded  SARs  expense.  Such profits
would be reversed in subsequent periods when the market price of the Company's



                                      F-31
<PAGE>

stock  fluctuates back up to $15 per share (the maximum per share price for SARs
compensation purposes) or higher.

Net interest  expense was $5.8 million lower for 1999  compared  with 1998.  The
decrease was primarily due to lower debt levels and $0.8 million of  capitalized
interest in 1999.

The effective tax rate for 1999 was 34% compared to 37% for 1998. The lower 1999
effective rate includes higher foreign sales corporation benefits.

Net income in 1999 increased by 24% when compared to 1998, and the resulting per
share amount increased 30% due to the factors discussed above.

Starting  in late 1998,  the  Company  discovered  certain  product  testing and
specification  non-compliance  issues at the  Montreal  (Canada)  and  Bethlehem
(Pennsylvania)  operations of its Howmet Aluminum Casting subsidiaries (formerly
called Cercast). In 1999, the Company discovered several additional instances of
other testing and specification non-compliance at its Hillsboro (Texas) aluminum
casting facility and at the Montreal and Bethlehem  operations.  The Company has
notified customers and the appropriate government agencies and has substantially
completed  correction  of these  issues.  The  Company  knows  of no  in-service
problems  associated  with any of these  issues.  In addition,  Howmet  Aluminum
Casting has been,  and expects to continue for some time to be, late in delivery
of products to certain customers,  resulting in lower sales.  However,  delivery
performance in 2000 is expected to improve significantly.

The Defense  Criminal  Investigative  Service (the "DCIS"),  in conjunction with
other  agents  from the  Department  of  Defense  and NASA,  has  undertaken  an
investigation  with respect to certain of the foregoing  matters at the Montreal
and  Bethlehem   facilities.   The  DCIS  has  informed  the  Company  that  the
investigation concerns possible violations of the False Claims Act and the False
Statements Act, as well as possible criminal penalties. The Company is unable to
determine  definitively  what,  if any,  civil or  criminal  penalties  might be
imposed as a result of the investigation.

All customer claims relating to the foregoing  matters either have been resolved
or, in the Company's judgment, will be resolved within existing reserves.

The Company  believes  that  additional  cost for the foregoing  matters  beyond
amounts  accrued,  if any,  would  not have a  material  adverse  effect  on the
Company's financial position,  cash flow, or annual operating results.  However,
additional cost, when and if accrued,  may have a material adverse impact on the
quarter in which it may be accrued.

On August 6, 1999, the Company entered into an Administrative Agreement with the
U.S. Air Force terminating Notices of Proposed Debarment issued on March 1, 1999
relating  to certain of the  foregoing  matters.  The  Administrative  Agreement
permitted  the  affected  facilities  to resume  accepting  new U.S.  government
contracts and subcontracts.

                                      F-32
<PAGE>

RESULTS OF OPERATIONS YEAR ENDED 1998 COMPARED TO YEAR ENDED 1997

Summary  financial  information  for the years  ended  December  31 follows:
<TABLE>
<CAPTION>

                                                                Better/
(in millions, except per share amounts)   1998       1997       (Worse)  Percent
--------------------------------------------------------------------------------
<S>                                    <C>         <C>           <C>       <C>
Net sales                              $1,350.6    $1,258.2      $ 92.4      7
Gross profit                              311.5       294.4        17.1      6
Selling, general and administrative
 expense                                  101.6       122.3        20.7     17
Research and development expense           20.2        17.6        (2.6)   (15)
--------------------------------------------------------------------------------

Income from operations                    189.7       154.5        35.2     23
Net interest expense                      (11.1)      (29.8)       18.7     63
Other, net                                 (3.4)       (6.4)        3.0     47
Income taxes                              (64.8)      (46.3)      (18.5)   (40)
--------------------------------------------------------------------------------

Income before extraordinary item          110.4        72.0        38.4     53
Extraordinary item                          -         (12.3)       12.3      -
--------------------------------------------------------------------------------

Net income                             $  110.4    $   59.7      $ 50.7     85
--------------------------------------------------------------------------------

Income per common share before
extraordinary item (basic and
  diluted)                             $   1.05    $    .67      $  .38     57
--------------------------------------------------------------------------------
</TABLE>

Net sales in 1998 were 12% higher than in 1997,  after  excluding  from 1997 the
sales of the Company's refurbishment business, which was sold in September 1997.
The 1998 sales  increase is due to volume  increases in the aero and  industrial
gas turbine markets. Also affecting  comparability is $9.7 million of additional
revenue in 1997 from a pricing  adjustment with a customer that was not repeated
in 1998 and is not expected to recur in the future.

Gross  profit,  as  reported,  was  $17.1  million  higher in 1998 than in 1997.
However,  on a comparable basis, 1998 gross profit was $35.3 million higher than
1997,  after  reducing  1997 gross profit to exclude (i) the gross profit of the
sold  refurbishment  business  and  (ii)  the  aforementioned  $9.7  million  of
additional 1997 revenue (which had no associated costs). Provisions for warranty
and other large claims of approximately $6.5 million were recorded, primarily in
the  fourth  quarters  of both  years.  Cost  control  enabled  the  Company  to
capitalize on increased  volume.  The 1998 gross margin  percentage of 23.1% was
adversely affected by results of new product offerings. Such results improved in
1999 and are  expected to improve more  thereafter.  The 1997 23.4% gross margin
percentage  benefited by .8 of a percentage point from the  aforementioned  $9.7
million nonrecurring price adjustment.

Selling, general and administrative expense was $20.7 million lower in 1998 than
in 1997.  The decrease is primarily due to a $20.6 million change in the amounts
recorded  in  connection  with the  Company's  Stock  Appreciation  Rights  plan
("SARs").  In 1998 $10.8  million of SARs  expense  was  recorded  versus  $31.4
million of expense in 1997.

Net interest  expense was $18.7  million  lower for 1998  compared to 1997.  The
principal reason for the reduction was significantly lower debt levels resulting
from  strong  cash  generation.  Another  significant  contributor  to the lower
interest expense was the interest rate reductions achieved in the Company's 1997
fourth quarter debt refinancing. Also contributing to the reduction was a $4.1


                                      F-33
<PAGE>

million  charge  in  1997,  which  was not  repeated  in 1998,  for  accelerated
write-off of debt  issuance cost  associated  with debt that was repaid ahead of
schedule.

The  effective  tax rate for 1998 was 37% compared to 39.1% for 1997.  The lower
effective rate for 1998 was attributable primarily to a lower state tax rate and
the  diminished  impact of  non-deductible  goodwill  in relation to higher 1998
income.

Income  before  extraordinary  item in 1998  increased by 53% when compared with
1997,  and the resulting  per share amount  increased by 57%, due to the factors
outlined above.


LIQUIDITY AND CAPITAL RESOURCES

The Company's  principal  sources of liquidity are cash flow from operations and
borrowings under its New Credit Agreement.  The Company's principal requirements
for  cash  are  to  provide  working  capital,  service  debt,  finance  capital
expenditures and fund research and development.  Based upon the current level of
operations,  management believes that cash from the aforementioned  sources will
be adequate to meet the Company's  anticipated  requirements for these purposes.
To date, cash available after  satisfaction of these  requirements has been used
to voluntarily repay debt prior to mandatory due dates.

Capital  expenditures in 1999 were $112.9  million.  Such  expenditures  include
significant  amounts for previously  announced plans to accelerate  expansion of
IGT  capacity at three  plants and to build a new  aero-airfoil  plant.  Capital
expenditures for 2000 are expected to be approximately $90 million.

In 1999, the Company received a one-time customer advance on accounts receivable
of $40  million.  This  advance  will be  applied  against  accounts  receivable
beginning in June 2001.

On February 9, 2000, the Company elected to terminate its $300 Million Revolving
Credit Facility.  On February 9, 2000, the Company (through its wholly-owned and
only operating  subsidiaries,  Howmet Corporation and its subsidiaries)  entered
into a new $25 million  credit  agreement with a major U.S. bank. The New Credit
Agreement provides a commitment from the bank for an unsecured  revolving credit
line of $25 million.  The interest rate is based on LIBOR plus a spread. The New
Credit Agreement expires on May 9, 2000. The participating  bank verbally stated
a  willingness  to enter into a short-term  extension of the  agreement,  if the
Company deems necessary.

At December 31, 1999 there were $9.6 million of outstanding  standby  letters of
credit under separate credit  arrangements.  As of February 9, 2000, $25 million
of unused  borrowing  capacity  was  available  under the  Company's  New Credit
Agreement.

At December 31, 1998,  the Company's  balance sheet  included  $716.4 million of
Pechiney Notes and a related $716.4 million  Restricted  Trust asset. On January
4, 1999 Pechiney,  S.A. (the Company's previous owner) repaid the Pechiney Notes
in full. As a result,  the  Restricted  Trust,  which secured  Pechiney,  S.A.'s
agreement to repay the notes, was terminated.  No Company funds were used in the
payment of the notes. See Note 8 of Notes to Consolidated Financial Statements.

Debt, excluding Pechiney Notes, plus redeemable preferred stock, as a percentage
of  total  capitalization  (debt,  excluding  Pechiney  Notes,  plus  redeemable
preferred  stock plus common  stockholders'  equity) was 8% at December 31, 1999
compared to 30% at December 31, 1998.  The current ratio  (excluding  short-term
debt and  Pechiney  Notes) was 1.0 at December  31, 1999 and 1.1 at December 31,
1998. Working capital (excluding short-term debt and Pechiney Notes) was $12.1


                                      F-34
<PAGE>

million  and  $34.8  million  at  December  31,  1999  and  December  31,  1998,
respectively.

The  Company  has an  agreement  to sell,  on a revolving  basis,  an  undivided
interest in a defined pool of accounts receivable.  The Company has received $55
million  from the sale of such  receivables  and has  deducted  this amount from
accounts  receivable  as of  December  31,  1999.  The  $35.6  million  retained
receivables,  shown in the  December  31, 1999  balance  sheet,  represents  the
receivables  set aside to  replace  sold  receivables  in the event they are not
fully collected.

The Company is a holding  company,  which conducts its only  operations  through
Howmet  Corporation and its subsidiaries and,  accordingly,  is dependent on the
receipt  of  cash  from  these  subsidiaries  to meet  its  expenses  and  other
obligations.  Terms of the New Credit  Agreement (and  previously the terminated
$300 Million  Revolving  Credit  Facility)  could limit transfers of cash to the
Company from Howmet Corporation and affect the Company's ability to obtain funds
for any purposes, including dividends, stock redemption, debt service and normal
business  activities.   Based  on  current  and  anticipated  activities,   this
limitation is not expected to have an effect on the Company's ability to conduct
its normal activities.

Since  December  31,  1998,  the  cumulative  translation  adjustment,  which is
included in stockholders' equity, changed by $10.4 million, resulting in a $12.9
million  negative  balance at December 31, 1999.  The change is primarily due to
the strengthening of the U.S. dollar relative to the French franc.


CHANGES IN OWNERSHIP AND PREFERRED STOCK REDEMPTION

On February 8, 1999,  Carlyle-Blade  sold its remaining  22.7 million  shares of
Howmet  International Inc. common stock to Cordant. At December 31, 1999 Cordant
holds 84.6% and the public 15.4% of the outstanding Howmet International Inc.
common stock.

On February 17, 1999, the Company paid $66.4 million to redeem and retire all of
its outstanding 9% preferred  stock.  The payment was made to Cordant,  the sole
preferred stockholder.  The Company borrowed against its then existing revolving
credit agreement to make the redemption.

On November 12, 1999,  Cordant made a proposal to acquire all of the outstanding
shares of Common Stock of the Company not currently owned by Cordant for a price
of $17.00 per share in cash,  and the proposal  was referred to the  Independent
Directors  Committee of the Company's Board of Directors (the  "Committee").  On
March 10, 2000,  Cordant  informed the Committee that it was willing to increase
its offer to $18.75 per share,  but following  further  discussions no agreement
was reached.  On March 14, 2000, Alcoa Inc.  ("Alcoa") and Cordant  announced an
agreement  under which Alcoa  agreed to acquire  Cordant.  Alcoa has advised the
Company that it intends to enter into  discussions  with the Committee to pursue
the acquisition of the outstanding publicly held shares of the Company's stock.


MARKET RISK

The  Company's  long  and  short-term  debt  portfolio   consists  primarily  of
variable-rate instruments.  The Company currently does not utilize interest rate
derivative contracts. At December 31, 1999 and 1998, the interest rate on $100.7
million  and  $135  million   (including   $55  million  from  the   receivables
securitization  facility),  respectively,  of the  Company's  debt  varies  with
changes in prevailing  market rates. If the interest rate on this  variable-rate
debt were to change by 1 percent,  net income would  hypothetically  increase or
decrease by $.6 million  and $.8  million in 1999 and 1998,  respectively.  This
hypothetical analysis does not take into consideration the effects of the


                                      F-35
<PAGE>

economic  conditions that would give rise to such an interest rate change or the
Company's response to such hypothetical conditions, nor does it take into effect
changes from the December 31, 1999 and 1998 debt amounts.

The Company enters into forward  exchange  contracts to manage  certain  foreign
currency  exposures.  These  forward  exchange  contracts  are  hedges  for risk
management  and are not used for trading or  speculative  purposes.  Such hedges
comply with Company policies approved by the Board of Directors. To mitigate the
effects of changes in  currency  exchange  rates on that  portion of the foreign
operations  business  conducted  in foreign  currencies,  the Company  regularly
hedges by entering into foreign  exchange  forward  contracts to cover near-term
exposures.

At December  31,  1999,  for  hedging  purposes,  the Company had the  following
forward exchange contracts outstanding:

<TABLE>
<CAPTION>

(in millions)             Contract &          U.S.      Local   Unrealized
                           Currency          Dollar    Currency    Gain          Maturity
Local Currency               Type          Equivalent Equivalent  (Loss)          Dates
------------------------------------------------------------------------------------------------
<S>                       <C>               <C>        <C>         <C>      <C>
United Kingdom sterling   Buy U.S. dollars  $13.6        8.4       $-       Jan 2000 to Dec 2000
United States dollars     Buy Can. dollars    9.7        9.7        .2      Jan 2000 to Dec 2000
French francs             Buy U.K. sterling   8.8       54.2        .3      Jan 2000 to Dec 2000
French francs             Sell U.S. dollars  10.2       65.8        -       Mar 2000
Japanese Yen              Buy U.S. dollars    2.6      271.6       (.1)     Jan 2000 to Apr 2000
Japanese Yen              Sell U.S. dollars    .2       24.5        -       May 2000 to Dec 2000
Japanese Yen              Buy U.K. sterling   5.9      599.6       (.2)     Jan 2000 to Dec 2000
------------------------------------------------------------------------------------------------
                                            $51.0                  $.2
------------------------------------------------------------------------------------------------
</TABLE>

At December  31,  1998,  for  hedging  purposes,  the Company had the  following
forward exchange contracts outstanding:

<TABLE>
<CAPTION>

(in millions)             Contract &          U.S.      Local   Unrealized
                           Currency          Dollar    Currency    Gain          Maturity
Local Currency               Type          Equivalent Equivalent  (Loss)          Dates
------------------------------------------------------------------------------------------------
<S>                       <C>               <C>         <C>        <C>      <C>
United Kingdom sterling   Buy U.S. dollars  $ 3.9        2.3       $-       Jan 1999 to Dec 1999
United States dollars     Buy Can. dollars   25.2       25.2        .1      Jan 1999 to Dec 1999
French francs             Buy U.K. sterling  11.9       66.3        -       Jan 1999 to Dec 1999
French francs             Sell U.S. dollars   9.1       52.0        .2      Mar 1999
------------------------------------------------------------------------------------------------
                                            $50.1                  $.3
------------------------------------------------------------------------------------------------
</TABLE>

The fair value of these foreign exchange contracts, which is the unrealized gain
(loss), was estimated based on December 31, 1999 and 1998 foreign exchange rates
obtained from dealers.  If the U.S.  dollar were to strengthen or weaken against
these currencies by 10 percent,  the  hypothetical  value of the contracts would
increase or decrease by approximately  $1.5 million and $1.1 million in 1999 and
1998,   respectively.   These  forward   exchange   contracts  are  hedges  and,
consequently,  any market value gains or losses related  thereto would be offset
by foreign exchange losses or gains on the underlying commitments.  Calculations
of the above effects  assume that each rate changed in the same direction at the
same time  relative to the U.S.  dollar.  The  calculations  reflect  only those
differences  resulting  from  mechanically  replacing  one  exchange  rate  with
another.  They do not factor in any  potential  effects that changes in currency
exchange  rates may have on  income  statement  translation,  sales  volume  and
prices, and on local currency costs of production.

The Company's international operations' net assets totaled $141 million and $177
million at December 31, 1999 and December 31, 1998, respectively.  The effect of
any change in foreign  exchange  rates on the  translation of such net assets is
reflected in the  translation  adjustment  recorded in the equity section of the
balance  sheet.  The  Company  does not hedge  its  foreign  currency  net asset
exposures. The Company also has some commodity price risk but does not currently


                                      F-36
<PAGE>

hedge commodity-related transactions. For additional information on policies and
discussion of the Company's  foreign  exchange and  financial  instruments,  see
Notes 2 and 17 of the notes to the consolidated financial statements.


YEAR 2000 COMPLIANCE

The Company has not  experienced  any  disruption  in  operations as a result of
computer  software issues  associated with Year 2000. All internal  systems have
been tested and validated.  Formal  communications  have been initiated with its
critical  suppliers,  including raw materials and services  suppliers to confirm
their successful  transition through the Year 2000 rollover.  At this point, the
Company has not been made aware of any material problems.

The  estimated  cost at  completion  for all phases of the  Company's  Year 2000
project is $16.2 million. An estimated $6.7 million (41%) of this expense is for
information systems labor and miscellaneous project costs; these costs are being
expensed  as  routine  information  systems  maintenance  as  incurred  over the
three-year  duration of the project.  Another $6.9 million (43%) is for software
purchase  and  implementation  costs for  applications  that were  installed  as
scheduled,  or on an expedited basis, for Year 2000 purposes. An additional $2.6
million (16%) is for infrastructure upgrades or replacement.

Approximately $15.9 million (98%) had been expended as of December 31, 1999. The
Company expects to spend $0.3 million (2%) in 2000.


EURO CONVERSION

The Company  implemented a strategy during 1999, which would allow it to operate
in a Euro  environment  during the  transition  period,  January 1, 1999 through
December 31, 2001,  and after full Euro  conversion,  effective July 1, 2002. To
date the Company has not experienced and does not anticipate any material impact
from the Euro  conversion on its  operations,  its  competitive  position or its
computer  software  plans.  Also,  the Company  does not expect any  significant
changes to its  currency  hedging  program  and does not expect any  significant
increases in its foreign exchange exposure.


ENVIRONMENTAL AND OTHER LEGAL MATTERS

In view of the  indemnification  from the Company's  previous  owners granted in
connection  with the  acquisition  described  in Note 1 of  Notes  to  Financial
Statements,  the Company does not expect resolution of environmental  matters to
have a material effect on its liquidity or results of operations. See Note 19 of
Notes to Consolidated Financial Statements.

The  Company,  in  its  ordinary  course  of  business,  is  involved  in  other
litigation,  administrative  proceedings and  investigations of various types in
several jurisdictions. The Company believes that these are routine in nature and
incidental to its operations,  and that the outcome of any of these  proceedings
will  not have a  material  adverse  effect  upon its  operations  or  financial
condition. See Note 18 of Notes to Consolidated Financial Statements.



                                      F-37
<PAGE>


RISK FACTORS

The Company  sets forth at pages 6 to 10 hereof a  "Cautionary  Statement"  with
respect  to  certain   statements   herein   that  the  Company   believes   are
"forward-looking  statements" under the "safe harbor"  provisions of the Private
Securities  Litigation Reform Act of 1995. Many of the factors described therein
are discussed  elsewhere in this Annual Report on Form 10-K and in prior Company
filings with the Securities and Exchange  Commission.  The  information in these
filings should be considered in assessing the various risks  associated with the
Company's  conduct of its business and  financial  condition.  Certain risks may
impact  the  accuracy  of the  Company's  forward-looking  statements.  Changing
economic and political  conditions  in the United States and in other  countries
could delay the delivery of aero or industrial  gas turbine  engines.  Risks and
uncertainties  also include but are not limited to changes in governmental  laws
and regulations, the outcome of environmental matters, the availability and cost
of raw  materials,  and the effects of: (i) aerospace and IGT industry  economic
conditions,  (ii)  aerospace  industry  cyclicality,  (iii)  the  nature  of the
customer base,  (iv)  competition and (v) pricing  pressures.  All forecasts and
projections in this report are  "forward-looking  statements",  and are based on
management's  current  expectations  of the  Company's  results,  and on current
information  available  pertaining to the Company and its products including the
aforementioned  risk  factors.  Actual  future  results  and  trends  may differ
materially  from  projections  made  herein as a result of the factors set forth
above and other  factors.  The  Company  undertakes  no  obligation  to publicly
upgrade or revise any forward  looking  statements  to reflect  future events or
developments.


NEW ACCOUNTING STANDARDS

In June 1999, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial  Accounting  Standards ("SFAS") No. 137, "Accounting for Derivative
Instruments  and hedging  Activities  - Deferral of the  Effective  Date of FASB
Statement No. 133".  This  statement  delays the effective date of Statement No.
133 to fiscal years beginning after June 15, 2000. Statement No. 133 establishes
accounting standards for derivative instruments and for hedging activities.  The
statement  will require the Company to recognize all  derivatives on the balance
sheet at fair  value.  Derivatives  that are not hedges must be adjusted to fair
value through income.  If the derivative is a hedge,  depending on the nature of
the  hedge,  changes  in the fair  value of  derivatives  will  either be offset
against  the  changes in fair value of the hedged  asset,  liabilities,  or firm
commitments through earnings or recognized in other  comprehensive  income until
the  hedged  item is  recognized  in  earnings.  The  ineffective  portion  of a
derivative's  change in fair value will be  immediately  recognized in earnings.
The Company has not yet determined  what the effect of Statement No. 133 will be
on the earnings and financial  position of the Company.  The Company  expects to
adopt this new statement on January 1, 2001.


RECENT MARKET PRICE AND DIVIDENDS

The market price of the Company's  common stock ranged from a low of $11.19 to a
high of $20.63  per  share  for 1999 and a low of $9.75 to a high of $18.63  per
share for 1998.

The Company did not pay dividends in 1999 or 1998.


                                      F-38
<PAGE>

SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>

                                                                              Howmet
                                                                              Predecessor
                                                                              Company
                                 Howmet International Inc.                    Combined
                                     Consolidated (a)                           (a)
                           ------------------------------------------------  ----------
                                                                 Period       Period
                                                                   from         from
                                                                 December 14, January 1,
                                                                   1995         1995
                                                                    to           to
                                                                 December     December
                                  Year Ended December 31,           31,          31,
                            ------------------------------------------------  ----------
(dollars in millions)        1999     1998      1997     1996      1995         1995
                            ------------------------------------------------  ----------
<S>                         <C>      <C>       <C>      <C>          <C>         <C>
STATEMENT OF INCOME DATA (a)
Net sales                   $1,459.7 $1,350.6  $1,258.2 $1,106.8     $51.4       $894.1

Operating expenses:
  Cost of sales              1,115.8  1,039.1     963.8    891.1      42.1        747.6
  Selling, general and
    administrative (b)         108.6    101.6     122.3     93.4       3.7         77.2
  Research and development      19.9     20.2      17.6     20.3       1.0         19.2
  Restructuring charges
    (credit)                     -        -         -        -         -           (1.6)
                            ------------------------------------------------  ----------
Income from operations         215.4    189.7     154.5    102.0       4.6         51.7
Interest (expense)
  income, net                   (5.3)   (11.1)    (29.8)   (40.2)     (3.1)         4.1
Other, net                      (3.0)    (3.4)     (6.4)    (5.9)     (1.0)        (5.8)
Income taxes                   (70.4)   (64.8)    (46.3)   (30.3)      (.5)       (23.7)
                            ------------------------------------------------  ----------
Income before
  extraordinary item (c)    $  136.7 $  110.4  $   72.0 $   25.6     $ -         $ 26.3
                            ================================================  ==========
Net income (c)              $  136.7 $  110.4  $   59.7 $   25.6     $ -         $ 26.3
Dividends on redeemable
  preferred stock                (.8)    (5.6)     (5.1)    (4.6)      (.2)         -
                            ================================================  ==========
Net income applicable to
  common stock              $  135.9 $  104.8  $   54.6 $   21.0     $ (.2)      $ 26.3
                            ================================================  ==========
Per common share amounts (d):
  Income before
  extraordinary item        $   1.36 $   1.05  $    .67 $    .21     $ -         $  .26

                            ================================================  ==========
  Net income                $   1.36 $   1.05  $    .55 $    .21     $ -         $  .26
                            ================================================  ==========


OTHER DATA (end of period,
  where applicable) (a):
Total assets, excluding
  Restricted Trust          $1,120.1 $1,084.2  $1,020.6 $1,052.4  $1,127.8       $  -
Restricted Trust (e)             -      716.4     716.4    716.4     716.4          -
Long-term debt, including
  current maturities,
  excluding Pechiney Notes       -       63.0     208.4    350.7     488.6          -
Pechiney Notes (e)               -      716.4     716.4    716.4     716.4          -
Redeemable preferred stock       -       65.6      60.0     54.9      50.2          -
Stockholders' equity           500.7    371.3     265.7    218.8     196.9          -
Net cash provided (used)
  by operating activities      232.9    207.4     192.6    184.5     (12.7)        35.2
Capital expenditures           112.9     83.0      56.9     33.7       1.6         41.2
Number of employees           11,500   11,500    10,400   10,000     9,600          -

========================================================================================
</TABLE>
----------
(a)  In  1995  Howmet   International  Inc.  was  formed  to  acquire  its  only
     operations,   which  are  those  of  the  entities  that  comprise   Howmet
     Predecessor  Company  Combined.  Data for periods  after  December 13, 1995
     reflect  the  allocation  of the  acquisition  purchase  price to asset and
     liabilities  of the  Company,  the  financing of the  acquisition,  and the
     subsequent amortization,  depreciation,  interest expense and other effects
     related thereto.
(b)  Includes charges related to the Company's stock appreciation rights plan of
     $6.3 million in 1999, $10.8 million in 1998, $31.4 million in 1997 and $6.6
     million in 1996.
(c)  In 1997 the Company recorded a $12.3 million after-tax  extraordinary  loss
     on early retirement of debt.
(d)  All per common  share  amounts  are both basic and  fully-diluted  and were
     calculated after retroactively  restating all shares to reflect the October
     1997 10,000-for-1 split.
(e)  The  Restricted  Trust holds a note  receivable  from  Pechiney,  S.A.  and
     related letters of credit that secured Pechiney,  S.A.'s agreement to repay
     the Pechiney Notes. Pechiney,  S.A. (the Company's previous owner) paid the
     Pechiney  Notes in full on January 4, 1999,  and the  Restricted  Trust was
     terminated.  No  Company  funds were used in the  payment  of the  Pechiney
     Notes.




                                      F-39
<PAGE>



                 SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF
                   HOWMET INTERNATIONAL INC. (PARENT COMPANY)

                            Condensed Balance Sheets
                              (Dollars in millions)


<TABLE>
<CAPTION>
                                                           December 31,

                                                        1999          1998
                                                    ------------  ------------
<S>                                                     <C>           <C>
Assets
Current asset                                           $   .5        $   .2
Investment in subsidiaries                               500.7         437.3
                                                    ============  ============
Total assets                                            $501.2        $437.5
                                                    ============  ============

Liabilities, redeemable preferred stock and
  stockholders' equity
Current accrued liabilities                             $   .5        $   .6
Redeemable preferred stock                                 -            65.6
Stockholders' equity                                     500.7         371.3
                                                    ============  ============
Total liabilities, redeemable preferred stock
  and stockholders' equity                              $501.2        $437.5
                                                    ============  ============
</TABLE>





















                     See notes to the condensed financial statements.


                                      I-1
<PAGE>







                 SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF
                   HOWMET INTERNATIONAL INC. (PARENT COMPANY)

                       Condensed Statements of Operations
                              (Dollars in millions)

<TABLE>
<CAPTION>
                                                 Year Ended December 31,

                                               1999        1998        1997
                                            ----------  ----------  ---------

<S>                                           <C>        <C>          <C>
General and administrative expense            $ (1.8)    $ (2.0)      $  -
Public stock offering costs                      -          -           (2.9)
Interest expense                                 (.8)       (.5)         -
Income tax benefit                                .9         .9          1.0
Equity in earnings of subsidiaries
  before extraordinary item                    138.4      112.0         73.9
                                            ----------  ----------  ---------
Income before extraordinary item               136.7      110.4         72.0
Extraordinary item subsidiary's loss on
  early retirement of debt, net of
  income taxes of $7.9                           -          -          (12.3)
                                            ----------  ----------  ---------

Net income                                     136.7      110.4         59.7
Payment-in-kind dividends on redeemable
  preferred stock                                (.8)      (5.6)        (5.1)
                                            ----------  ----------  ---------

Net income applicable to common stock         $135.9     $104.8       $ 54.6
                                            ==========  ==========  =========

Per common share amounts, basic and diluted:
   Income before extraordinary item           $ 1.36     $ 1.05       $  .67
   Extraordinary item                            -          -           (.12)
                                            ==========  ==========   =========
   Net income                                 $ 1.36     $ 1.05       $  .55
                                            ==========  ==========   =========
</TABLE>













                     See notes to the condensed financial statements


                                      I-2
<PAGE>







                 SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF
                   HOWMET INTERNATIONAL INC. (PARENT COMPANY)

                     Notes to Condensed Financial Statements

1.  GENERAL

These parent  company only  financial  statements  should be read in conjunction
with the Howmet  International Inc. ("HII") consolidated  financial  statements,
included herewith. Note 1 to such consolidated financial statements presents the
HII, Howmet Holdings Corporation and Howmet Corporation relationships.

In these parent  company  only  financial  statements,  HII  investments  in its
wholly-owned  subsidiaries are stated at cost plus the  undistributed net income
and  other  comprehensive  income  of  the  subsidiaries,  net  of  payables  to
subsidiaries  of $8.3  million and $6.9  million at December  31, 1999 and 1998,
respectively.

2.  CASH FLOWS INFORMATION

HII had no cash flows for the years ended  December  31, 1998 and 1997.  In 1999
the only cash flows were receipt of a $66.4  million  dividend from a subsidiary
and the  redemption of all of the  outstanding  shares of  redeemable  preferred
stock at their $66.4 million book value.

3.  ENVIRONMENTAL MATTERS

In  connection  with  the  Acquisition,   Pechiney,  S.A.  indemnified  HII  for
environmental  liabilities  relating to Howmet Corporation  stemming from events
occurring or conditions  existing on or prior to the Acquisition,  to the extent
that such  liabilities  exceed a  cumulative  $6 million.  This  indemnification
applies  to  all  of  the  environmental  matters  discussed  in  the  next  two
paragraphs.  It is  probable  that  changes  in any of the  accrued  liabilities
discussed  in the next two  paragraphs  will  result  in an equal  change in the
amount receivable from Pechiney, S.A. pursuant to this indemnification.

HII has received test results  indicating  levels of  polychlorinated  biphenyls
("PCBs") at its Dover, New Jersey facility which will require remediation. These
levels  have  been  reported  to the  New  Jersey  Department  of  Environmental
Protection  (the  "NJDEP"),  and HII is preparing a work plan to define the risk
and to test possible clean-up options. The statement of work must be approved by
the NJDEP  pursuant to an  Administrative  Consent  Order  entered  into between
Howmet Corporation and the NJDEP on May 20, 1991 regarding clean-up of the site.
Various  remedies are possible and could  involve  expenditures  ranging from $3
million  to $22  million  or  more.  HII has  recorded  a $3  million  long-term
liability  as of December  31,  1999 and $2 million as of December  31, 1998 for
this matter.  The  indemnification  discussed  above  applies  to the costs
associated with this matter.

Besides the above-mentioned remediation work required at HII's Dover, New Jersey
plant,  liabilities  exist for clean-up costs associated with hazardous types of
materials at seven other on-site and off-site locations.  HII has been or may be
named a  potentially  responsible  party under the  Comprehensive  Environmental
Response,  Compensation  and  Liability  Act or  similar  state  laws  at  these
locations. At December 31, 1999, $4 million of accrued environmental liabilities
are  included  in the  consolidated  balance  sheet for these seven  sites.  The
December 31, 1998 balance sheet includes $4.2 million of accrued liabilities for
nine such  sites.  The indemnification discussed above applies to these costs.

In  addition  to the  above  environmental  matters,  and  unrelated  to  Howmet
Corporation,  Howmet  Holdings  Corporation  and Pechiney,  S.A. are jointly and
severally liable for  environmental  contamination  and related costs associated
with  certain   discontinued  mining  operations  owned  and/or  operated  by  a
predecessor-in-interest  until  the  early  1960's.  These  liabilities  include
approximately  $7 million in remaining  remediation and natural  resource damage
liabilities  at the Blackbird Mine site in Idaho and a minimum of $10 million in
investigation  and  remediation  costs at the  Holden  Mine site in  Washington.
Pechiney, S.A. has agreed to indemnify the Company for such liabilities in full.
In  connection  with these  environmental  matters,  the Company  recorded a $17
million liability and an equal $17 million receivable from Pechiney,  S.A. as of
December 31, 1999 and $26 million for both the  liability  and  receivable as of
December 31, 1998.  Pechiney,  S.A. is currently  funding all amounts related to
these liabilities.

                                      I-3
<PAGE>







                 SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF
                   HOWMET INTERNATIONAL INC. (PARENT COMPANY)

                   Notes to Condensed Financial Statements (Continued)

3.  ENVIRONMENTAL MATTERS (continued)

Estimated  environmental  costs  are  not  expected  to  materially  impact  the
financial  position  or the  results  of HII's  operations  in  future  periods.
However,  environmental  clean-ups are  protracted  in length and  environmental
costs in future  periods  are  subject to changes in  environmental  remediation
regulations.   Any  costs   which  are  not  covered  by  the   Pechiney,   S.A.
indemnifications  and which are in excess of amounts  currently  accrued will be
charged to operations in the periods in which they occur.

4.  CONTINGENT MATTERS

Starting in late 1998, HII discovered  certain product testing and specification
non-compliance  issues at the  Montreal  (Canada) and  Bethlehem  (Pennsylvania)
operations of its Howmet Aluminum Casting subsidiaries.  In 1999, HII discovered
several additional  instances of other testing and specification  non-compliance
at its  Hillsboro  (Texas)  aluminum  casting  facility  and at the Montreal and
Bethlehem operations.  HII has notified customers and the appropriate government
agencies and has substantially completed corrective action with respect to these
issues. HII knows of no in-service problems associated with any of these issues.
In addition,  Howmet Aluminum Casting has been, and expects to continue for some
time to be, late in delivery of  products  to certain  customers,  resulting  in
lower  sales.  However,  delivery  performance  in 2000 is  expected  to improve
significantly.

The Defense  Criminal  Investigative  Service (the "DCIS"),  in conjunction with
other  agents  from  the  Defense   Department   and  NASA,  has  undertaken  an
investigation  with respect to certain of the foregoing  matters at the Montreal
and  Bethlehem  facilities.  The DCIS has  informed  HII that the  investigation
concerns  possible  violations of the False Claims Act and the False  Statements
Act,  as well  as  possible  criminal  penalties.  HII is  unable  to  determine
definitively  what, if any,  civil or criminal  penalties  might be imposed as a
result of the investigation.

All customer claims relating to the foregoing  matters either have been resolved
or, in HII's judgment, will be resolved within existing reserves.

HII believes that  additional  cost for the  foregoing  matters  beyond  amounts
accrued,  if any, would not have a material  adverse  effect on HII's  financial
position, cash flow, or annual operating results. However, additional cost, when
and if accrued,  may have a material  adverse  impact on the quarter in which it
may be accrued.

On August 6, 1999,  HII entered into an  Administrative  Agreement with the U.S.
Air Force  terminating  Notices of  Proposed  Debarment  issued on March 1, 1999
relating  to certain of the  foregoing  matters.  The  Administrative  Agreement
permitted  the  affected  facilities  to resume  accepting  new U.S.  government
contracts and subcontracts.

Shortly after Cordant  announced,  on November 12, 1999, its proposal to acquire
all of the  outstanding  shares  of HII not  currently  owned  by  Cordant  (See
"Business - Possible  Ownership  Changes,"  page 1),  eight  separate but nearly
identical  lawsuits were filed in the Court of Chancery of Delaware against HII,
Cordant and each  member of the HII's Board of  Directors.  The  plaintiffs  are
shareholders  of HII who complain that  Cordant's  offer for their shares in the
HII is not for an adequate price. The plaintiffs  request the following  relief:
certification   as  a  class  action  with   themselves   designated   as  Class
Representatives; an order enjoining Cordant, HII and its Board of Directors from
proceeding with the transaction; and money damages and the costs of bringing the
lawsuit.  On the motion of the defendants,  the Court has consolidated the cases
under the  style of "In re Howmet  International  Shareholders  Litigation"  and
directed  that  the  plaintiffs  file  an  Amended   Complaint   reflecting  the
consolidation. HII is defending these actions and believes that any outcome will
not result in a materially adverse impact to the financial position of HII.

HII, in its  ordinary  course of  business,  is  involved  in other  litigation,
administrative  proceedings  and  investigations  of  various  types in  several
jurisdictions.  HII believes that these are routine in nature and  incidental to
its operations, and that the outcome of any of these proceedings will not have a
material adverse effect upon its operations or financial condition.



                                      I-4
<PAGE>



          SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

                            HOWMET INTERNATIONAL INC.
                              (Dollars in millions)


<TABLE>
<CAPTION>

                      Balance at   Charged to    Charged to   Deductions   Balance at
                      beginning       costs        other        from         end of
    Description       of period   and expenses    accounts     reserves      period
    -----------       ---------   ------------    --------     --------      ------

<S>                      <C>            <C>          <C>          <C>        <C>

FOR THE YEAR ENDED
  DECEMBER 31, 1999
Reserves:
  Accounts               $  5.2          -             -           (1.5)      $  3.7
Receivable
  Warranty Reserves       $13.3          (.2)          -           (2.8)       $10.3

FOR THE YEAR ENDED
  DECEMBER 31, 1998
Reserves:
  Accounts               $  4.4           .9           -            (.1)      $  5.2
Receivable
  Warranty Reserves       $13.7          2.6           -           (3.0)       $13.3

FOR THE YEAR ENDED
  DECEMBER 31, 1997
Reserves:
  Accounts               $  5.6          6.0           (.7)        (6.5)      $  4.4
Receivable
  Warranty Reserves      $  8.1          6.5           -            (.9)       $13.7


</TABLE>
----------
(a) 1997  Accounts  Receivable  amounts have been changed to conform to the 1998
presentation.



                                      II-1