##### Table of Contents

ANNUAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007





UNITED STATES

SECURITIES AND
EXCHANGE COMMISSION

WASHINGTON, D.C. 20549





FORM 10-K







|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------

For The Fiscal Year Ended December 31, 2007

or



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

Commission file number: 333-117622





WISE METALS GROUP LLC

(Exact name of Registrant as specified in its charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 52-2160047                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

857 Elkridge Road, Suite 600

Linthicum, Maryland 21090

(Address of principal executive offices and zip
code)

(410) 636-6500

(Registrants telephone number, including area code)





Indicate by check mark if the
registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes   ̈    No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act.  Yes  x    No   ̈

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   ̈    No  x

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

Indicate by check mark whether the Registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.

Large accelerated filer   ̈    Accelerated filer   ̈    Non-accelerated
filer  x    Smaller reporting company   ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes   ̈    No  x

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

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









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TABLE OF CONTENTS



|         |  |                                                                                                              |  |     
|-------- |  | ------------------------------------------------------------------------------------------------------------ |  | ----
|         |  |                                                                                                              |  | Page
|         |  | PART I                                                                                                       |  |     
|Item 1.  |  | Business                                                                                                     |  | 3   
|Item 1A. |  | Risk Factors                                                                                                 |  | 12  
|Item 1B. |  | Unresolved Staff Comments                                                                                    |  | 18  
|Item 2.  |  | Properties                                                                                                   |  | 19  
|Item 3.  |  | Legal Proceedings                                                                                            |  | 20  
|Item 4.  |  | Submission of Matters to a Vote of Security Holders                                                          |  | 21  
|         |  |                                                                                                             
|         |  | PART II                                                                                                      |  |     
|Item 5.  |  | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |  | 21  
|Item 6.  |  | Selected Financial Data                                                                                      |  | 22  
|Item 7.  |  | Managements Discussion and Analysis of Financial Condition and Results of Operation                         |  | 23  
|Item 7A. |  | Qualitative and Quantitative Disclosures About Market Risk                                                   |  | 36  
|Item 8.  |  | Financial Statements and Supplementary Data                                                                  |  | 37  
|Item 9.  |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                         |  | 64  
|Item 9A. |  | Controls and Procedures                                                                                      |  | 64  
|Item 9B. |  | Other Information                                                                                            |  | 65  
|         |  |                                                                                                             
|         |  | PART III                                                                                                     |  |     
|Item 10. |  | Directors, Executive Officers and Corporate Governance                                                       |  | 65  
|Item 11. |  | Executive Compensation                                                                                       |  | 68  
|Item 12. |  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters               |  | 72  
|Item 13. |  | Certain Relationships and Related Transactions and Director Independence                                     |  | 74  
|Item 14. |  | Principal Accountant Fees and Services                                                                       |  | 75  
|         |  |                                                                                                             
|         |  | PART IV                                                                                                      |  |     
|Item 15. |  | Exhibits and Financial Statement Schedules                                                                   |  | 76  



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FORWARD-LOOKING STATEMENTS

Our forward-looking statements are subject to a variety of factors that could cause actual results to differ significantly from current beliefs.

Some statements and information contained in this Form 10-K are not historical facts, but are forward-looking statements, as
such term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by the use of forward-looking words such as believes, expects, plans,
may, will, would, could, should, or anticipates or the negative of these words or other variations of these words or other comparable words, or by discussions of strategy that
involve risks and uncertainties. Forward-looking statements may differ from actual future results due to, but not limited to, those factors referenced under Risk Factors and/or any of the following factors:



| |  |  | sales to our major customers,
| | - |  | -----------------------------



| |  |  | competition from non-aluminum sources of packaging,
| | - |  | ---------------------------------------------------



| |  |  | our relationship with our employees and labor unions,
| | - |  | -----------------------------------------------------



| |  |  | general economic conditions, including those affecting our ability to obtain financing,
| | - |  | ---------------------------------------------------------------------------------------



| |  |  | conditions in the capital markets, or in industry conditions, including those affecting our customers and suppliers,
| | - |  | --------------------------------------------------------------------------------------------------------------------



| |  |  | technological developments,
| | - |  | ---------------------------



| |  |  | aluminum demand and prices, and the market for scrap aluminum,
| | - |  | --------------------------------------------------------------



| |  |  | changes in consumer tastes and preferences,
| | - |  | -------------------------------------------



| |  |  | cost and availability of raw materials and energy,
| | - |  | --------------------------------------------------



| |  |  | environmental regulations to which our operations are subject,
| | - |  | --------------------------------------------------------------



| |  |  | changes in our credit rating or in the rating of our indebtedness,
| | - |  | ------------------------------------------------------------------



| |  |  | changes in accounting policies or practices adopted voluntarily or as required by regulations or generally accepted accounting principles, and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our ability to attract and retain executives and other key personnel.
| | - |  | ---------------------------------------------------------------------



| |  |  | international commerce with our new sales agreements
| | - |  | ----------------------------------------------------

We have no obligation to update or revise these forward-looking statements.

Pa
rt I



|Item 1. | Business
|------- | --------

As used in this Form 10-K, all
references to Wise Metals, Wise Group, us, the Company and all similar references are to Wise Metals Group LLC, a Delaware limited liability company, organized in 1999, and its subsidiaries as a
consolidated entity, unless otherwise expressly stated or the context otherwise requires. As used herein, all references to Wise Alloys or Alloys refer to Wise Alloys LLC, a Delaware limited liability company, organized in
1998, that is our wholly-owned operating company. All references to Wise Recycling or Recycling refer to Wise Recycling LLC, a Maryland limited liability company, organized in 1998, that is our wholly-owned subsidiary. All
references to Listerhill Total Maintenance Center or TMC refer to Listerhill Total Maintenance Center LLC, a Delaware limited liability company, organized in 2003, that is our wholly-owned subsidiary.



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Overview

Wise Metals Group, LLC, headquartered in Linthicum, MD, is a Delaware limited liability company. Information about our reportable operating segments is provided below. Financial information about our reportable operating segments is set
forth in our Consolidated Financial Statements and the Notes in Item 8 of this Report.

Wise Alloys

Wise Alloys is the third largest producer of aluminum beverage can stock in the world based on The Aluminum Association, Inc., a trade association for
producers of primary aluminum and semi-fabricated aluminum products and recyclers. Alloys contributed 85% of the total revenue of Wise Metals Group in 2007. Beverage can stock is aluminum sheet specifically designed and engineered for the production
of aluminum beverage cans. We supplied a significant portion of the North American market for aluminum beverage can stock as measured by volume, and we own one of only five beverage can stock facilities in North America, which provides valuable
capacity to a consolidated industry. Our can stock customers include Ball Corporation, Crown Holdings, Inc. and Rexam PLC, the three largest beverage can manufacturers in the world based on The Aluminum Association, Inc. Our beverage can stock
customers produce aluminum cans for the largest brewers and carbonated soft drink bottlers in North America. In addition, we produce food can stock and semi-fabricated aluminum sheet for building and construction, transportation and other markets.
In 2007, we did not derive a material percentage of our revenues from customers outside the United States.

The aluminum beverage can
industry is a consolidated and mature industry which has experienced consistent historical stability. Four principal competitors, Ball, Crown, Rexam and Metal Container Corporation, the can-making subsidiary of Anheuser-Busch Companies, Inc.,
account for nearly all of the production volumes of aluminum beverage cans in North America. Over the past ten years, the compounded annual growth rate for the United States beverage can market has been stable. In addition to our Listerhill facility
in Muscle Shoals, Alabama, the only other facilities in the world that have the capability to produce aluminum beverage can stock are operated by two companies, Alcoa, Inc. and Novelis, Inc. which was spun off by Alcan, Inc. in January 2005. The
newest of these facilities was built in the mid-1980s and we are unaware of any plans to build additional facilities in North America to serve the can stock industry. Factors that have led to the consolidation in the industry and our
expectation of limited new entrants include substantial capital requirements, lengthy customer qualification procedures and Food and Drug Administration regulations concerning beverage can coatings for bottlers. Most importantly, customers
stringent requirements for thinner gauge can stock and higher quality can stock have surpassed the technical capabilities of most rolling mill operators. Furthermore, there historically have been virtually no foreign shipments of aluminum beverage
can stock to North America primarily due to product quality requirements.

As our primary manufacturing operation, Wise Alloys converts
aluminum feedstock into beverage can stock, food container stock and semi-fabricated aluminum sheet. Unlike Alcoa, we do not manufacture aluminum from bauxite. Instead, we process aluminum scrap and prime aluminum manufactured by third parties. Our
production takes place at our Listerhill facility, which we purchased in 1999 as part of Reynolds divestiture of its integrated can-making infrastructure. Ball purchased Reynolds can-making assets in 1998 and since that time has remained
a major customer of our Listerhill facility. The Listerhill facility is a four million square foot plant with 1.8 billion pounds of annual casting capability, 1.4 billion pounds of annual hot mill capacity and 1.1 billion pounds of annual finishing
capacity. The facility has been well-maintained and modernized with more than $670 million spent on capital improvements since a major modernization process was begun by Reynolds in 1986. We believe the facility is one of the most technologically
advanced and lowest cost aluminum processing mills in North America.

Aluminum feedstock purchases comprised approximately 74% of our cost
of sales in 2007 for our Alloys operations, with scrap comprising a significant percentage of those total aluminum purchases. Historically, scrap



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has been a lower cost input for the production of our products than prime aluminum because our scrap reclamation assets are integrated into our production
process and because scrap has generally been sold at a discount to prime aluminum. We have scrap purchase arrangements with our key customers through which we purchase scrap aluminum generated by their can production processes. These scrap purchase
arrangements provided us with approximately 30% of our scrap aluminum requirements in 2007. We also obtain scrap from our scrap collection subsidiary, Wise Recycling, which provided us with approximately 31% of our scrap aluminum requirements in
2007. Our remaining scrap aluminum requirements are met by independent suppliers and brokers. We believe that we are one of the largest purchasers of used beverage containers, or UBCs, in North America, and we believe that our purchasing power
provides us with the ability to negotiate favorable terms and conditions with our suppliers and enhance our operating margins.

Wise
Metals subsidiary, Listerhill Total Maintenance Center, or TMC, provides maintenance, repairs and fabrication to manufacturing and industrial plants worldwide ranging from small on-site repairs to complete turn-key maintenance as well as
providing machine shop services to Wise Alloys. TMC specializes in servicing and repairing electric turbines for the Tennessee Valley Authority (TVA) and others. TMC is actively expanding the business outside of the power generation into
mining equipment and other large-scale projects.

Market Overview and Competitive Environment

Wise Alloys competes principally in the rolled aluminum sheet product market. This market in North America is believed to consist of approximately 10
billion pounds of aluminum shipments annually in segments such as packaging, automotive, building and construction and original equipment manufacturing. The rolled aluminum market is somewhat fragmented, with numerous domestic competitors serving a
number of different markets according to industry data. We principally serve the packaging segment, which represents approximately 40% of rolled aluminum sheet products.

The aluminum beverage can stock market is highly concentrated and competitive. The top manufacturers of aluminum beverage cans in North America in 2007 were Ball, Crown, Metal Container and Rexam. These manufacturers
are supplied with aluminum beverage can stock (aluminum sheet for body stock, tab and ends) by four principal suppliers: Novelis (formerly Alcans aluminum rolled products business), Alcoa, ARCO and ourselves. ARCO shares with Novelis the
ownership of a facility in Logan County, Kentucky.

The beverage can stock industry also faces competition from non-aluminum sources of
packaging such as glass and HDPE (high-density polyethylene) and PET (polyethylene terephthalate) packaging producers. The main factors influencing competition in our industry are quality and price. Competition is also affected by each
customers requirement that suppliers complete a qualification process to supply their plants.

Aluminum beverage containers are sold
primarily to makers and fillers of carbonated soft drinks, beer and other beverages. The principal aluminum beverage container purchasers in the United States are Anheuser-Busch Companies Inc., The Coca-Cola Company and PepsiCo, Inc. Given the
highly concentrated and integrated nature of the aluminum can supply chain (from can stock supplier to ultimate purchaser), customer relationships tend to be long-term and highly interdependent in nature. For example, our customers require
prospective can stock suppliers to undergo a rigorous qualification process at their individual manufacturing facilities of up to twelve months before the prospective supplier is approved.

The aluminum can stock market is driven by factors associated with the aluminum beverage can industry. The United States aluminum beverage market is
recognized as a mature market that has experienced slow but stable growth. Aluminum can stock demand is influenced by end-market retail strategies and consumer sentiment while can stock pricing is influenced by aluminum commodity prices and industry
capacity. Due to seasonal considerations, Alloys highest sales volumes generally occur during the first and second quarters.



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Products

Beverage Can Sheet Products

Wise Alloys processes prime aluminum, scrap and alloying agents into sheet products primarily
for use in the manufacturing of aluminum beverage can containers. We produce different sheet products for each of the three components of an aluminum beverage can: the body, the end and the tab, which represent 78.5%, 18.6%, and 2.9%, respectively,
of an average beverage cans weight.

The beverage can stock industry market in which we participate has been driven by increasingly
demanding product specifications in the last decade. In 1993, the average can stock gauges were 0.01140 for body stock and 0.01080 for end stock. At these relatively heavy thicknesses, the requirements for the uniformity of flatness and
thickness across the entire width of the coil were achievable by all seven producers then making can stock. Similarly, at those gauges, inclusions, impurities and other imperfections in can stock were far less critical. However, as a result of the
struggle for market share and an excess of capacity in the industry, can makers dramatically improved their product and lowered their costs. Their suppliers, can stock makers, had to adapt to these changes in order to survive. By the end of 2000,
there were only three can stock makers still existing in North America: Alcoa, Alcan and Wise Alloys. Participants left the industry because they were unable to produce the thinner gauge stock can makers requested and also meet their more stringent
quality requirements. Can stock gauges dropped significantly, to 0.01080 for body stock and 0.0086 for end stock, a decline of 5.3% and 20.4%, respectively. It was especially arduous for can stock makers to meet new specifications
profitably because the gauges were most significantly reduced in the end and not the body. They had trouble in achieving extremely tight tolerances in a very hard alloy of aluminum and magnesium. Coincident with this change, can makers increased
their quality requirements. For example, while in 1996 a rejection rate of 1 in 10,000 cans was acceptable, the level today is 2 in 100,000, representing an 80% decrease in the acceptable rejection rate. Today, the three remaining can stock makers
have reduced their costs and raised their quality levels to where they are now shipping 0.0080 gauge end stock. We believe that the can stock we produce for everyday orders is equal to or superior in quality to that of our competitors, Alcoa
and Novelis, and that the quality of our can stock for special orders is superior.

Other Aluminum Sheet Products

The remainder of Alloys aluminum sheet products includes rigid container stock for food container manufacturers and fin stock (light gauge alloy)
for air conditioners, refrigeration sheets and commercial coolers. We produce small volumes of extra wide aluminum sheeting for truck trailer roofing and for unique architectural projects and aluminum tread for use in tool boxes in truck beds and
linings. In 2005, we also began more significant levels of production of aluminum sheet for the building and construction products segment and that trend continued in 2007.

The following table sets forth our rolled aluminum product distribution for the past three years:



|                                  |  |                         |     |  |      |     |  |      |    
|--------------------------------- |  | ----------------------- | --- |  | ---- | --- |  | ---- | ---
|                                  |  | Year ended December 31, |    
|                                  |  | 2007                    |     |  | 2006 |     |  | 2005 |    
|Body Stock                        |  | 58                      | %   |  | 61   | %   |  | 66   | %  
|End Stock                         |  | 13                      |     |  | 15   |     |  | 17   |    
|Tab Stock                         |  | 2                       |     |  | 2    |     |  | 2    |    
|                                  |  |                         |     |  |      |     |  |      |    
|Beverage Can Stock                |  | 73                      |     |  | 78   |     |  | 85   |    
|Food Container                    |  | 6                       |     |  | 6    |     |  | 6    |    
|Trailer Roofing                   |  | 3                       |     |  | 3    |     |  | 2    |    
|Other                             |  | 18                      |     |  | 13   |     |  | 7    |    
|                                  |  |                         |     |  |      |     |  |      |    
|Total                             |  | 100                     | %   |  | 100  | %   |  | 100  | %  
|                                  |  |                         |     |  |      |     |  |      |    
|Total pounds billed (in millions) |  | 544                     | (a) |  | 636  | (a) |  | 661  | (a)



|(a) | Total pounds billed do not include Wise Recycling shipments to third parties of 163.2 million pounds in 2007, 121.0 million pounds in 2006, and 103.2 million pounds
in 2005.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Beverage can stock shipment declined from 2005 to 2006 due to the loss of volume from a customer in the
fourth quarter of 2006. Beverage can stock shipment declined from 2006 to 2007 due to customer announced destocking plans whereby certain customers had increased purchases in the fourth quarter of 2006 ahead of price increases in 2007 and were
working those levels down over 2007.

Customers

Ball is the largest beverage can manufacturer in the United States. In 2007, we supplied Ball with approximately 55% of our Listerhill facilitys total plant output. Our Listerhill facility has served selected Ball manufacturing
facilities since 1965. We were the largest supplier of aluminum beverage can stock to Ball in 2007. Shipments to Ball decreased approximately 23% from 2006 to 2007 due to customer announced destocking plans.

Our supply agreement with Ball provides for Ball to order minimum shipment amounts in each year of the contract. While Ball has the right to reduce these
specified minimum shipment amounts, it generally can only do so contractually in proportion to reductions in the beverage can stock requirements of all of its can manufacturing facilities in North America and not merely on the basis of reductions in
the requirements of the Ball facilities we supply. In addition, Ball may also reduce these minimum shipment amounts in the event our products fail to meet agreed quality levels.

In 2007, we supplied approximately 10% of our Listerhill facilitys total plant output to Crown. As a result of our litigation over disputed
contract terms, shipments were approximately 49% lower than shipments for 2006. The Company has since signed a multi-year agreement with Crown to supply can sheet beginning in 2008.

In 2007, we shipped approximately 7% of our can stock to Rexam up from approximately 5% of our can stock from 2006.

We have a growing number of customers for common alloy products for the commercial distributor and building and construction markets. We are increasing
our marketing efforts in order to develop and diversify our customer base in these high value-added products. In particular, we seek new customers who have not traditionally purchased from our Listerhill facility because of its former affiliation
with Reynolds. We have built our own independent marketing staff to serve this market and have built a depot stock, or on hand inventory, to service this very strong market. We have a growing number of contracts for these new products with continued
positive interest from market participants.

We maintain long-term supply agreements with our key customers in the aluminum can sheet
market and we believe the general terms of our customer contracts are standard for the industry. These contracts are supply arrangements whereby specific quantities and product pricing are negotiated and agreed to on an annual basis under the terms
of the multi-year master supply agreement. Under the terms of our customer contracts, we use an industry standard for pricing the metal component of all aluminum can sheet sold. We receive orders from our customers who provide detailed
specifications as to metal characteristics and specific plant location. Although all orders are placed pursuant to the contract, quantities and specifications will vary by plant and more specifically by production line within the plant. These orders
are generally provided with a two to three month lead time. The majority of all orders, specifically can sheet orders, that are processed by Alloys are made pursuant to a specific customer order. Due to seasonal considerations, Alloys highest sales
volumes generally occur during the first and second quarters.

Operations

Aluminum Sheet Operations

We believe
that our Listerhill facility is one of the most technologically advanced and flexible manufacturing facilities in the United States aluminum sheet industry. Our Listerhill facility has benefited from



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over $670 million of capital improvements and upgrades since a major modernization process was begun by Reynolds in 1986. The facilitys features
include state-of-the-art gauge control and closed-loop shape control systems, as well as state-of-the-art surface inspection systems. Our Listerhill facilitys hot-mill rolling speed is equal to industry standards, while the cold-mill rolling
speed is competitive with that of our leading competitors. One of our four coating lines can coat wide-width aluminum sheet at a high speed. These investments strengthened our facilitys competitive position by improving its product quality,
increasing its processing capacity and reducing its operating costs. Since 2000, we have incurred maintenance expenditures ranging from approximately $32 to $48 million annually, comprising between $14 million and $24 million in part replacements
and contractor costs and between $18 million and $24 million in employment costs. In addition, our capital expenditures, primarily for equipment and related upgrades, have averaged $13 million annually since 2002. In 2007, we spent $21 million in
part replacements and contractor costs and $24 million in employment costs. Our facilitys features include a technologically advanced electromagnetic cast house, which is the only multiple station unit in the industry; a pusher furnace; hot
mills with 116-inch width capability; four cold mills; an annealing line; a coating line and inspection and gauge control systems; and surface inspection systems. Our rolling capabilities have allowed us to meet our customers increasing
demands for thinner gauge aluminum sheets and their increasingly stringent quality controls, unlike some of our former competitors. For instance, Listerhill is one of only two North American facilities capable of rolling the widths necessary for
trailer roofs. In addition, our electromagnetic casting facilities and cold mills also give us superior flexibility to produce customized runs of limited quantity products with shorter production lead times in a cost effective manner. These shorter
runs enable us not only to meet our can stock customers demands for special seasonal or promotional products or innovative new products with a limited initial market, such as energy drinks, but also efficiently produce common alloy products,
such as StarBright, an aluminum tread product used in truck beds and linings.

We are in the process of converting and qualifying, in specification and quality, our end stock material from our three stand operation, where we have to make two passes to roll aluminum coil to proper gauge, to our five stand operation,
where a coil only has to make one pass. This will increase our efficiencies in producing end stock while maintaining improved surface quality. This process change will also result in improved capacity on our three-stand that will allow for increased
volume. While we are currently qualified, in specification and quality, at all of our customer locations, any time a major process change such as this is undertaken, each customer plant location that we serve must re-qualify our product to ensure
proper specification. Trial shipments are sent to each customer location and if the plant location and their respective customers all accept the product, then the process change is considered qualified and the change can then be implemented on all
product sold to that customer location.

Suppliers and Materials

The raw materials used by our aluminum sheet business are generally available from several sources. We utilize a mix of scrap aluminum and prime aluminum. Our supply of raw materials satisfies our current production
requirements. One of our key competitive advantages in the production of can stock is our use of scrap aluminum for a large portion of our aluminum requirements. Aluminum can body stock can be manufactured with UBCs (used beverage cans) comprising
up to 95% of the metal used. As we are capable of processing and recycling UBCs in an efficient manner and the use of scrap is nearly always less expensive than utilizing primary aluminum to produce the alloy required for producing can sheet, we
believe that our high utilization of scrap provides us with a cost advantage over our competitors. In 2007, we satisfied approximately 72% of our raw material requirements from scrap aluminum, of which approximately 54% was composed of UBCs, 30% was
scrap purchased from our customers and 16% was all other scrap including recycled sheet ingot and electric cable. In 2007, approximately 31% of our scrap aluminum requirements were supplied through our scrap collection segment, Wise Recycling. We
expect that a significant amount of our scrap aluminum requirements will continue to be sourced through scrap purchase arrangements with our can sheet customers, and purchases through Wise Recycling and third party suppliers. We expect to obtain the
balance of our scrap aluminum requirements from our established network of independent scrap dealers and brokers throughout the

United States. We believe
we are the largest purchaser of UBCs in North America, and as a result, we believe



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this allows us to have better pricing with our vendors. We obtain prime aluminum from brokers throughout the United States and directly from foreign and
domestic producers.

We purchase our electrical requirements from the TVA. Effective in January 2005, we began purchasing our natural gas
from Atmos Energy Marketing and successfully negotiated a reduction in the cost of delivery with another pipeline.

Intellectual Property

We have acquired certain intellectual property rights under licenses from others for use in our business. In particular, we are a
licensee under a technology license agreement with Alcoa that grants us a non-exclusive, perpetual, royalty-free, fully paid-up license to use the technology employed at our Listerhill facility. The license covers the processes, methods, practices
and techniques for systems used and products produced at Listerhill. It includes the rights to change and further develop the technology and worldwide non-exclusive rights to offer for sale and sell products produced at the Listerhill facility.

In addition, the Alcoa technology license agreement grants us the right throughout North America to make products using licensed
technology at the Listerhill facility or using technology used at other facilities that were owned by Reynolds at the time of the Listerhill facility acquisition or which were previously owned by Reynolds. Alcoa is responsible for obtaining and
maintaining all patent rights relating to the licensed technology.

We do not have any patents, licenses or trademarks other than those
that are the subject of the Alcoa technology license agreement that we believe to be material to our business viewed as a whole.

Wise Recycling

Wise Recycling was formed in 1998 when Wise Metals purchased the Reynolds Aluminum Recycling division from Reynolds Metals. Wise
Recycling is one of the largest aluminum scrap recyclers and one of the largest direct-from-the-public collectors of UBCs in the United States. As well as acting as a low-cost supplier of used beverage container scrap for our aluminum processing
operations, Recycling collects and sells copper, brass, aluminum and other scrap including ferrous, which is sold to third parties. In 2007, this segment recycled over 3.9 billion UBCs and contributed 15% of the total net sales of Wise Metals Group.

The following table shows distribution by metal type for the past three years:



|                                               |  |                         |   |  |       |   |  |       |  
|---------------------------------------------- |  | ----------------------- | - |  | ----- | - |  | ----- | -
|                                               |  | Year ended December 31, |  
|                                               |  | 2007                    |   |  | 2006  |   |  | 2005  |  
|Copper & Brass                                 |  | 19                      | % |  | 24    | % |  | 33    | %
|Aluminum                                       |  | 31                      |   |  | 39    |   |  | 38    |  
|Other scrap including ferrous                  |  | 31                      |   |  | 15    |   |  | 5     |  
|                                               |  |                         |   |  |       |   |  |       |  
|Total Third Party Sales                        |  | 81                      |   |  | 78    |   |  | 76    |  
|Intercompany aluminum UBC sales to Wise Alloys |  | 19                      |   |  | 22    |   |  | 24    |  
|                                               |  |                         |   |  |       |   |  |       |  
|Total                                          |  | 100                     | % |  | 100   | % |  | 100   | %
|                                               |  |                         |   |  |       |   |  |       |  
|Total pounds billed (in millions)              |  | 283.0                   |   |  | 207.3 |   |  | 160.0 |  

Market Overview and Competitive Environment

Wise Recycling operates seven shipping and processing locations. These locations support a network of 38 neighborhood collection centers. This structure
allows Wise Recycling to service consumers as well as industrial and independent recycling accounts nationwide. From our recycling centers, aluminum and other nonferrous metal materials including copper and brass are sorted, graded, and packaged and
then sent to melting and fabricating facilities throughout the country. Wise Recyclings collections are somewhat seasonal as consumption of beverage cans is typically higher in the summer months. Other recycled products are less seasonal in
nature.



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Customers

Wise Recycling currently sells ferrous and non-ferrous scrap to third parties. In 2007, Recycling sold 163 million pounds of scrap to third parties. There is no single customer who contributes 10% or more to Recyclings revenue.

Operations, Suppliers and Materials

In 2007, Wise Recycling recycled over 3.9 billion UBCs. Recycling has developed a collection process that utilizes both direct acquisitions from scrap dealers and industrial accounts, as well as from the actual consumer, i.e.
off-the-street. The collection process is centered through its seven shipping/regional centers which act as hubs for a total of 38 service and convenience centers. The regional shipping centers process and upgrade, by packaging the material to meet
specific customer needs, the various metals collected at their respective area service and convenience centers. We are currently expanding the business of Recycling to include warehousing operations in order to provide regional shipping centers for
our scrap collection and to enhance our ability to provide a vendor managed inventory program required by Alloys customers. These warehousing facilities, the first of which opened in Los Angeles in May 2004, store can sheet to be delivered to
the customer and also operate as centralized shipping points for scrap. This dual role optimizes labor costs and allows us to manage freight costs by coordinating outbound aluminum coil shipments from the Listerhill facility and inbound scrap from
the warehouse sites by captive rail car. Recycling is exploring the opening of other warehousing facilities in several other states.

Wise Metals
Group

The following discusses matters relating to our business in general.

Research and Development

We engage in research and
development programs that include aluminum sheet production process and product development and basic and applied research. We believe that these programs can lead to more cost-effective manufacturing systems that contribute to improvements in
quality and operating efficiencies as well as new products. We conduct our research and development activities at our Listerhill facility. Expenditures for our research and development activities were $0.3 million in 2007. We fund substantially all
our research and development expenses through operations.

Employees

As of December 31, 2007, we had 710 employees at Alloys Listerhill facility. Approximately 71% of these employees are engaged in production, 3%
in engineering, research and development and 26% in sales, marketing, product support and general administration. Approximately 71% of these employees are represented by unions and are covered by collective bargaining agreements that will expire on
November 1, 2012. In addition, as of December 31, 2007, we had 17 Wise Group employees at our corporate headquarters, 88 employees at TMC and 123 employees at Recycling.

Environmental Matters

Our operations are subject to numerous and increasingly stringent federal,
state and local laws and regulations governing protection of the environment, including those relating to air emissions, wastewater and stormwater discharges, the handling, disposal and remediation of hazardous substances and wastes, and public and
employee health and safety. Our operations involve the management of hazardous materials and the use of aboveground and underground storage tanks containing materials that are subject to requirements of the federal Resource Conservation and Recovery
Act, or RCRA, and comparable state statutes. Under such statutes, investigation or remediation may be necessary in the event of leaks or other discharges from current or former underground or aboveground storage tanks or other sources. Our
operations involving air emissions and wastewater and stormwater discharges are subject to the Clean Air Act and Clean Water Act, respectively.



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Similar to many of our competitors, we have incurred and will continue to incur capital and operating expenditures and other costs in complying with such
laws and regulations. Our operations also involve the risk of the release of hazardous materials into the environment. In addition, we send material to third party recycling, treatment, and/or disposal facilities. The Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 and comparable state statutes can impose strict, and under some circumstances joint and several, liability upon entities that send materials to third party facilities for investigation and
remediation of contamination, as well as on owners and operators of sites at which soil or groundwater contamination is identified. We have not received any notice of such potential liability at any such facilities.

Our operating expenditures relating to environmental requirements in 2007 were approximately $4.0 million and are expected to be similar in 2008. Future
environmental regulations, including those under the Clean Air Act and Clean Water Act, or more aggressive enforcement of existing regulations, may result in stricter compliance requirements for us and for the aluminum industry in general.

In connection with our acquisition of the Listerhill facility in 1999, a consultant performed a soil and groundwater investigation
(Phase II Report) to identify any environmental issues at the various plants that comprise the Listerhill facility. That Phase II Report identified certain on-site environmental areas of concern that may potentially require investigation
or remediation and provided a then-present value estimate of approximately $18 million to address them. Pursuant to the Listerhill facility purchase agreement, the prior owner of the Listerhill facility, Reynolds, now Alcoa, is required to perform
the work necessary and to indemnify us against the environmental matters required by applicable law to be addressed that are identified in the Phase II Report and any other such environmental liabilities attributable to Reynolds that were identified
on or before March 31, 2004 subject to certain limitations. Alcoa disagrees with the cost estimates contained in the Phase II Report and has stated that it estimates that the environmental issues identified in the Phase II Report will cost less
than $18 million to remediate. Although Alcoa has conducted some on-site environmental investigations and sampling and has submitted reports to the Alabama Department of Environmental Management (ADEM) regarding most of the on-site areas of concern,
it has not yet commenced cleanup activities with respect to many of the areas of concern.

We are also party to an Environmental
Cooperation Agreement, or ECA, with Alcoa, which is Reynolds successor. The ECA addresses, among other things, the use of a surface water ditch system by both us and Alcoa, the use of process water retention ponds on Alcoas property and
certain surface drainage easements across our property. The ECA expires in December 2009, with automatic two year renewal periods unless either party elects to terminate, in which event the ECA will terminate one year following such election. Under
the ECA, each party defends and indemnifies the other against claims arising from its own violations of any applicable environmental laws, its handling, use, or disposal of hazardous materials at the Listerhill facility, a breach of any warranties,
representations or covenants in the agreement, or damage or loss to property and injury to or death of any persons.

In November 2006, the
Company received notice from the Environmental Protection Agency (EPA) regarding certain violations of the Clean Air Act. The Company disputes some of the alleged violations and has initiated actions to come into compliance with the
relevant requirements. The EPA has indicated its intent to resolve the violations through a judicial consent-decree, including the payment of civil penalties by the Company. The Company has made an offer to resolve the alleged violations and is
awaiting a response from the EPA. Discussions with the EPA are ongoing. The Company believes it is properly accrued for this contingency and, accordingly, the ultimate resolution of these matters is not expected to have a material adverse effect on
the Companys consolidated financial statements.

We believe that we are in material compliance with environmental requirements and
that environmental matters will not have a material adverse effect on our business, although resolution of particular items in any particular year or quarter could be material to the results of operations or liquidity for that period. However, we
cannot guarantee that newly discovered conditions, or new, or more aggressive enforcement of applicable



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environmental requirements, or any failure by Alcoa to perform its indemnification obligations will not have a material adverse effect on our business.

Wise has not discovered any new environmental concerns. As noted all significant environmental issues which have been identified remain
the responsibility of Alcoa under the original Asset Purchase Agreement. Alcoa has acknowledged its obligation and discussions continue regarding the methodology to remediate these concerns.

Available Information and Corporate Governance Documents.

Information filed electronically, including our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, with the SEC can be accessed on its website at www.sec.gov.



|Item 1A. | Ri
sk Factors.
|-------- | --------------

We may not be able to effectively manage our exposure to fluctuations in aluminum prices.

Aluminum purchases and related alloying agents represented approximately 74% of our cost of sales in 2007. Prime aluminum costs fluctuate
over time. We reduce our exposure to aluminum price fluctuations by seeking to pass cost increases to customers through an indexed sales pricing mechanism, by keeping sufficient inventory on hand and/or by fixing the cost of metal through forward
contracts on the London Metal Exchange, or LME, based on the cost of prime aluminum. We seek to reduce our exposure to increases in aluminum prices over the contracted price by purchasing or committing to purchase aluminum at relative fixed prices.
We seek to protect ourselves against price fluctuations in prime aluminum contracts both by purchasing and selling futures contracts and through the use of options contracts to effectively match our customer and supplier commitments. These hedging
transactions may require us to post cash pursuant to margin calls. However, there can be no assurance that we will be successful in our efforts to use these types of derivative transactions to help manage fluctuations in prime aluminum prices.

In addition, we are further exposed to counter-party performance risk in adverse market conditions in the event of non-performance by a
supplier, customer or LME broker and could suffer significant financial losses as a result.

Our processing-based business model seeks to
take advantage of the lower price of scrap aluminum compared to prime aluminum to provide a cost-competitive product. To the extent the discount between the LMEs quoted primary aluminum price and scrap price narrows, our competitive advantage
is reduced. We cannot make use of financial markets to effectively hedge against reductions in this discount as this market is not readily available. If the difference between the price of prime and scrap aluminum is narrow for a considerable period
of time, or, if we are unable to successfully manage the risks associated with fluctuations in the price of prime aluminum, our profitability could decline. Hedging transactions may require us to post cash pursuant to margin calls. Significant
losses could occur if we entered into a hedge transaction that became unprofitable because a significant customer reduced orders.

A decrease in sales
to a major customer could adversely affect our business.

We derived approximately 49% and 10% of our total revenues in 2007 from sales
to Ball and Crown, respectively. Ball, under long-term supply agreements, has the ability to reduce their purchases from us if our product quality declines or if we fail to perform under a material provision of our supply agreements. There is no
guarantee that we will be able to renew this supply agreement on favorable terms, or at all. In addition, the amount of aluminum can stock and other products we sell under this agreement could decrease. For example, Ball has the option under their
supply agreements to reduce specified shipment amounts in proportion to reductions in the beverage can stock requirements of all of their can manufacturing facilities in North America. See Item 1, Business  Wise Alloys 
Customers.



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The loss of either of these customers or decreases in either customers levels of purchases from us
for any reason, including a customers closing or sale of a plant, a sale of its business, a strike or work stoppage by its employees or financial difficulties, or an adverse change in the terms of the supply arrangements with either customer
could have a harmful effect on our business.

The loss of our raw materials sources could hurt our business.

Our aluminum can stock production operations use various raw materials, including scrap aluminum and prime aluminum. Unlike Alcoa, we are not an
integrated producer of aluminum. Accordingly, our ability to produce competitively priced aluminum products depends on our ability to procure a competitively priced supply of scrap and prime aluminum in a timely manner. We expect that a significant
amount of our scrap aluminum supply requirements will continue to be sourced through scrap purchase arrangements with our customers and acquisitions of scrap aluminum from our Wise Recycling segment and from third party suppliers. We obtain prime
aluminum from brokers throughout the United States and directly from foreign and domestic producers. While we believe that these sources of raw materials are sufficient to meet our current operating requirements, we cannot assure you that we will be
able to timely procure competitively priced aluminum or that we will not experience shortages due to the interruption of supply. In addition, if either Alcoa or Novelis significantly increases its purchases of scrap aluminum, we may experience
difficulty in obtaining our raw materials at the price discount that scrap has had traditionally over prime aluminum. Furthermore, the price of scrap aluminum may rise if foreign demand for scrap aluminum increases. The recent trend of increased
copper and steel scrap consumption by China and other foreign countries could extend to aluminum scrap.

Our operations require substantial amounts of
energy and raw materials and, as a result, our profitability may decline if energy and/or commodity costs increase, or if these supplies are interrupted.

We consume substantial amounts of energy in our operations. Energy costs constituted approximately 5% and 6% of our overall cost of sales in both 2007 and 2006, respectively. Excluding metal costs, energy represented
approximately 19% and 22% of our conversion costs in 2007 and 2006, respectively. Although we generally expect to meet our energy requirements from our long-term natural gas and electricity contracts, we have been and could again be adversely
affected by increases in the costs in natural gas and/or electricity, interruptions in energy supply due to equipment failure, hurricanes, or other causes, and by our inability to extend the contracts upon expiration on economical terms. For
example, we suffered interruptions in our supply of natural gas in 2005 because of hurricanes Katrina and Rita. We buy natural gas on a forward basis to minimize risk of rising prices, but we may not always be able to do so successfully. Except to
the extent we are able to protect ourselves against fluctuations in gas prices, every $1.00 change per mmBTU in the price of gas would affect our annual net income by approximately $4.2 million based on our 2007 usage levels. In addition, an
outbreak or escalation of hostilities between the United States and any foreign power and, in particular, a prolonged armed conflict in the Middle East, could result in a real or perceived shortage of oil and/or natural gas, which could result in an
increase in the cost of natural gas or energy generally. If energy costs were to rise, or if energy supplies or supply arrangements were disturbed, our profitability may decline.

In addition, our operations generally require an uninterrupted supply of intense electrical energy, and any interruption for more than a very short
duration, whatever the cause, may have a major technical, commercial and financial impact on our business operations. In warm weather, TVA, our electrical energy source for the Listerhill facility, is vulnerable to surges in demand for energy. These
increases in demand may outstrip the available energy supply and lead to a curtailment. In 1999, we experienced this type of curtailment for approximately five days.

Outside of aluminum, our operations require substantial materials and supplies, many of which are subject to cost increases due to increasing commodity costs used in the production of these supplies and materials.
These materials account for approximately 9% of cost of sales. In addition, metal costs include costs for non-aluminum hardeners and alloying agents such as magnesium and manganese. These materials comprise approximately 2% of metal costs and are
subject to volatile commodity pricing and resulting cost increases. The price increases that we are able to achieve from our customers may not be sufficient to offset the effects of these rising input costs.



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A business interruption at our Listerhill facility could significantly harm our operations.

Our beverage can stock production is concentrated entirely at our Listerhill facility. We depend on the equipment and facilities at Listerhill for the
production of our beverage can stock and other aluminum sheet products. If our equipment or operations at Listerhill or portions thereof were disabled, our ability to manufacture beverage can stock products could be impaired or interrupted for an
indefinite period or could cease altogether and cause a material adverse effect on our financial condition. For example, in 2003 a fire at the facility curtailed our operations for four weeks and caused delivery problems for three months. Business
interruption insurance proceeds may not fully compensate us for damage to our equipment and facilities, lost profits and lost market share. We currently also have property casualty insurance for our Listerhill facility. However, the policy is
subject to limits and exclusions.

The beverage can stock industry is highly concentrated and our competitors have greater resources.

The market for beverage can stock products is highly concentrated. Competitors such as Novelis and Alcoa, each with an approximate one-third market share,
have market presence, operating capabilities and financial, personnel and other resources that are substantially greater than our own. Also, Alcoa is a fully integrated competitor who supplies its own prime aluminum for use in producing beverage can
stock. They may also affect prices for scrap aluminum by making purchases of scrap aluminum. These competitors can develop their technologies more quickly, take advantage of acquisition and other opportunities more readily, produce their own supply
of aluminum and devote greater resources to the marketing and sale of their products and services than we can. They may be able to purchase raw materials at a lower cost because of their size. Finally, the financial resources and excess capacity of
our major competitors may give them the ability to reduce their prices for an extended period of time. Any of these factors may reduce the prices we can charge for our products, lower our gross margins and cause us to lose market share. We cannot
assure you that we will be able to compete successfully in these circumstances.

We are subject to competition from non-aluminum sources of packaging.

Although aluminum maintains the largest overall share among packaging materials of the U.S. beverage container industry, it faces
increasing competition from other packaging materials such as plastics and glass. We face continued competition from plastic packaging producers (primarily HDPE and PET) in the soft drink and juice segment of the beverage packaging industry. PET
increased its market share of the U.S. beverage container market from an approximate 19% market share, as measured by number of containers, in 1997 to an approximate 26% market share in 2002 and is projected to have approximately 31% market share in
2007 based on information provided by the Freedonia Group as reported by the Can Manufacturers Institute (CMI). Some manufacturers and consumers prefer PET to aluminum because of its clarity, availability in multiple sizes and ability to be
resealed. In addition, glass accounted for approximately 13% of beverage container demand in 2002 with little expected increase in market share by 2007 as reported by CMI. If plastic and/or glass and/or other new products increase their respective
market shares, demand for our products may decrease significantly. For the years ended December 31, 2007 and 2006, 73% and 78%, respectively, of our sales volume was from beverage can stock and we expect to derive a significant portion of our
revenues from these sales in the future. If demand for these products decreased, our profits and cash flows could be reduced.

Demand in the packaging
market in which we participate can be inconsistent.

We primarily manufacture aluminum can stock that is used for beverage and, to a
lesser extent, food packaging for which demand may be inconsistent. For example, it is believed that the unseasonably cold and wet weather in the summer of 2003 decreased consumer demand in the U.S. and Canada for beverages packaged in the
containers produced by our customers. As a result, our sales to Ball and Crown declined in 2003. Our operating results could be adversely affected if the packaging market experiences weakness because of weather or general economic conditions or
other factors.



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We cannot guarantee that we will be successful in developing new products or entering new markets.

We have begun the development of higher value-added and intermediate products that complement our aluminum beverage can stock production. For example, we
also process aluminum sheet for use in food containers, trailer roofing and air conditioner and refrigerator components. Commercial product volume for the years ended December 31, 2007, 2006 and 2005 were 112.5 million, 102.2 million
and 61.1 million pounds, respectively. In 2001, we developed high-luster heavier gauge embossed sheet and end plate for sale in the automotive after market. In addition, we have begun to supply intermediate aluminum products to other industry
participants. Intermediate aluminum products are products that we sell to customers before they have undergone final processing. We cannot assure you that we will be successful in further developing these products and in entering into new markets.
We may experience design, manufacturing, marketing or other difficulties that could delay or prevent the development, introduction or commercialization of any new products. Development of these products and entry into new markets may require greater
capital resources than we currently anticipate. We cannot guarantee when or whether these new products will be widely introduced or fully implemented, that they will be successful when they are introduced or that customers will purchase the products
offered. If these products or services are not successful or the costs associated with implementation and completion of the rollout of these products or services materially exceed those currently estimated by us, our results of operations may
suffer.

Environmental requirements could adversely affect our financial condition and our ability to conduct our business.

Our operations are subject to numerous and increasingly stringent federal, state and local laws and regulations governing protection of the environment,
including those relating to air emissions, wastewater and stormwater discharges, the handling, disposal and remediation of hazardous substances and wastes, and public and employee health and safety. Our operations involve the management of hazardous
materials and the use of aboveground and underground storage tanks containing materials that are subject to requirements of the federal Resource Conservation and Recovery Act, or RCRA, and comparable state statutes. Under such statutes,
investigation or remediation may be necessary in the event of leaks or other discharges from current or former underground or aboveground storage tanks or other sources. Our operations involving air emissions and wastewater and stormwater discharges
are subject to the Clean Air Act and Clean Water Act, respectively. Similar to many of our competitors, we have incurred and will continue to incur capital and operating expenditures and other costs in complying with such laws and regulations. Our
operations also involve the risk of the release of hazardous materials into the environment. In addition, we send material to third party recycling, treatment, and/or disposal facilities. The Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 and comparable state statutes can impose strict, and under some circumstances joint and several, liability upon entities that send materials to third party facilities for investigation and remediation of contamination, as well
as upon the owners and operators of sites at which soil or groundwater contamination is identified. We have not received any notice of such potential liability at any such facilities. Future environmental regulations, including those under the Clean
Air Act and Clean Water Act, or more aggressive enforcement of existing regulations, may result in stricter compliance requirements for us and for the aluminum industry in general.

In connection with our acquisition of the Listerhill facility in 1999, a consultant performed a soil and groundwater investigation (Phase II
Report) to identify any environmental issues at the various plants that comprise the Listerhill facility. That Phase II Report identified certain on-site environmental areas of concern that may potentially require investigation or remediation
and provided a then-present value estimate of approximately $18 million to address them. Pursuant to the Listerhill facility purchase agreement, the prior owner of the Listerhill facility, Reynolds, now Alcoa, is required to perform the work
necessary and to indemnify us against the environmental matters required by applicable law to be addressed and identified in the Phase II Report and any other such environmental liabilities attributable to Reynolds that were identified on or before
March 31, 2004, subject to certain limitations. Alcoa disagrees with the cost estimates contained in the Phase II Report and has stated that it estimates that the environmental issues identified in the Phase II Report will cost less than $18
million to remediate. Although Alcoa has conducted some on-site environmental investigations and



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sampling and has submitted reports to the Alabama Department of Environmental Management (ADEM) regarding most of the on-site areas of concern, it has not
yet commenced cleanup activities with respect to many of the areas of concern.

Wise has not discovered any new environmental concerns. As
noted all significant environmental issues have been identified and remain the responsibility of Alcoa under the original Asset Purchase Agreement. Alcoa has acknowledged its obligation and discussions continue regarding the methodology to remediate
these concerns.

However, there can be no assurance that Alcoa will be willing to perform its indemnification obligations regarding the
Listerhill facility or that costs to do so will not exceed $18 million. Any failure by Alcoa to address completely such issues could materially affect our financial condition and our ability to conduct our business. Furthermore, there can be no
assurance that environmental conditions requiring remediation will not be discovered in the future which are not addressed by Alcoa and could result in material costs to us. See Item 1, Business  Wise Metals Group 
Environmental Matters.

In November 2006 the Company received notice from the Environmental Protection Agency (EPA)
regarding certain violations of the Clean Air Act. The Company disputes some of the alleged violations and has initiated actions to come into compliance with the relevant requirements. The EPA has indicated its intent to resolve the violations
through a judicial consent-decree, including the payment of civil penalties by the Company. Discussions with the EPA are ongoing.

We have a unionized
workforce, and union disputes and other employee relations issues could harm our financial results.

Mostly all of our hourly-paid
employees are represented by labor unions under three collective bargaining agreements. We may not be able to satisfactorily renegotiate our labor agreements when they expire on November 1, 2012. In addition, although we consider our employee
relations generally to be good, our existing labor agreements may not prevent a strike or work stoppage at our facility in the future, and any such prolonged work stoppage could have a material adverse effect on our financial condition and results
of operations. See Item 1, Business  Employees.

Our success will continue to depend on our ability to attract and retain
executives and other key personnel.

Our continued success depends on our ability to attract, motivate and retain highly skilled and
qualified management and technical personnel. Any inability to do so could hurt our business. In addition, there can be no assurance that we will be able to hire qualified persons when needed or on favorable terms. In addition, the loss of any one
or more of our executive officers could have an adverse effect on our ability to manage and operate our business. We do not have employment agreements with any of our executive officers.

We are controlled by a limited number of persons.

As of December 31, 2007, Silver Knot, LLC,
owns approximately 78% of the membership interests of Wise Group. David DAddario, CEO, Chairman and a Manager of Wise Group, controls Silver Knot and Greg Garvey, a Manager of Wise Group is also a member of Silver Knot. The board of Wise Group
contains no independent managers. Mr. DAddario and Mr. Garvey have the ability to affect certain corporate transactions, including mergers, consolidations and the sale of all or substantially all of Wise Groups assets. Their
interests could diverge from the interests of other members.

We may expand our operations through acquisitions, which may divert managements
attention and expose us to unanticipated liabilities and costs. We may experience difficulties integrating any acquired operations, and we may incur costs relating to acquisitions that are never consummated.

Our business strategy contemplates continued expansion of our operations, including growth through future acquisitions. However, our ability to consummate
and integrate effectively any future acquisitions on terms that



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are favorable to us may be limited by the number of attractive acquisition targets, internal demands on our resources and our ability to obtain financing.
Our success in integrating newly acquired businesses will depend upon our ability to retain key personnel, avoid diversion of managements attention from operational matters, and integrate general and administrative services and key information
processing systems. In addition, future acquisitions could result in the incurrence of additional indebtedness, costs and contingent liabilities. We may also incur costs and divert management attention to acquisitions that are never consummated.
Integration of acquired operations may also take longer, or be more costly or disruptive to our business, than originally anticipated. It is also possible that expected synergies from future acquisitions may not materialize.

Although we will undertake a comprehensive due diligence investigation of each business that we might acquire, there may be liabilities of the acquired
companies that we fail or are unable to discover during the diligence investigation and for which we, as a successor owner, may be responsible. In connection with acquisitions, we generally seek to minimize the impact of these types of potential
liabilities through indemnities and warranties from the seller, which may in some instances be supported by deferring payment of a portion of the purchase price. However, these indemnities and warranties, if obtained, may not fully cover the
liabilities due to limitations in scope, amount or duration, financial limitations of the indemnitor or warrantor or other reasons.

Our leverage may
affect our business and may restrict our operating flexibility.

We have substantial debt and, as a result, significant debt service
obligations. As of December 31, 2007, we had approximately $326.5 million of debt outstanding, including $147.8 million under our revolving credit facility, and outstanding letters of credit in the amount of $1.7 million. Our availability was
$25.0 million under our senior secured credit facility. Subject to certain restrictions set forth in our senior secured credit facility and the indenture, we may incur additional indebtedness in the future. Our substantial level of debt and debt
service obligations could:



| |  |  | limit cash flow available for general corporate purposes, such as acquisitions and capital expenditures, due to the ongoing cash flow requirements for debt service;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | limit our ability to obtain, or obtain on favorable terms, additional debt financing in the future for working capital, capital expenditures, acquisitions or other
corporate requirements;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | limit our flexibility in reacting to competitive and other changes in the aluminum industry and economic conditions generally;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------



| |  |  | make it difficult to meet debt service requirements; and
| | - |  | --------------------------------------------------------



| |  |  | expose us to risks inherent in interest rate fluctuations in respect of any borrowings at variable rates of interest, which could result in higher interest expense
in the event of increases in interest rates.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Our ability to make scheduled payments of principal of, to pay interest on,
or to refinance, our indebtedness and to satisfy our other debt obligations will depend upon our future operating performance, which may be affected by general economic, financial, competitive, legislative, regulatory, business and other factors
beyond our control. We will not be able to control many of these factors, such as the economic conditions in the markets in which we operate and initiatives taken by our competitors. In addition, there can be no assurance that future borrowings or
equity financing will be available for the payment or refinancing of our indebtedness. If we are unable to service our indebtedness, whether in the ordinary course of business or upon acceleration of such indebtedness, we may be forced to pursue one
or more alternative strategies, such as restructuring or refinancing our indebtedness, selling assets, reducing or delaying capital expenditures or seeking additional equity capital. There can be no assurance that any of these strategies could be
affected on satisfactory terms, if at all.

We may not be able to finance future needs or modify our business plan because of restrictions placed on us
by our senior secured credit facility, the indenture for senior secured notes and the instruments governing our other indebtedness.

Our
senior secured credit facility, as amended and restated, the indenture for our senior secured notes and other agreements governing our other indebtedness contain covenants that restrict us from taking various actions



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such as incurring additional debt under certain circumstances, paying dividends, making investments, entering into transactions with affiliates, merging or
consolidating with other entities and selling all or substantially all of our assets. We are also bound to comply with certain specified tests under our senior secured credit facility. These restrictions could limit our ability to obtain future
financings, make needed capital expenditures, withstand future downturns in our business or the economy in general or otherwise conduct necessary corporate activities. We may also be prevented from taking advantage of business opportunities that
arise because of limitations imposed on us by these restrictive covenants.

If we do not comply with these or other covenants and
restrictions contained in our senior secured credit facility, the indenture and other agreements governing our indebtedness, we could be in default under those agreements, and the debt under those instruments, together with accrued interest, could
then be declared immediately due and payable. If we default under our senior secured credit facility, the lenders could cause all of our outstanding debt obligations under our senior secured credit facility to become due and payable, require us to
apply all of our cash to repay the indebtedness or prevent us from making debt service payments on any other indebtedness we owe. In addition, any default under our senior secured credit facility or agreements governing our other indebtedness could
lead to an acceleration of debt under other debt instruments that contain cross-acceleration or cross-default provisions. If the indebtedness under our senior secured credit facility and indenture is accelerated, we may not have sufficient assets to
repay amounts due under our senior secured credit facility, the exchange notes or under other debt securities then outstanding. Our ability to comply with these provisions of our senior secured credit facility, the indenture and other agreements
governing our other indebtedness may be affected by changes in the economic or business conditions or other events beyond our control.



|Item 1B. | Unresolved Staff Comments.
|-------- | --------------------------

None.



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|Item 2. | Properties.
|------- | -----------

Our Listerhill manufacturing
operations are located in Muscle Shoals, Alabama and comprise approximately 1,500 acres, of which approximately 102 acres are leased. Our corporate headquarters are located in Linthicum, Maryland. Recycling currently operates shipping centers in the
locations contained in the listing below.

The following table presents certain information regarding our owned and leased facilities as of
December 31, 2007:



|                             |  |                     |  |                                             |  |              |  |                      
|---------------------------- |  | ------------------- |  | ------------------------------------------- |  | ------------ |  | ---------------------
|Location                     |  | EstimatedSquareFeet |  | Use                                         |  | Owned/Leased |  | Lease Expiration Date
|Wise Metals Group Facilities |  |                     |  |                                             |  |              |  |                      
|Linthicum, MD                |  | 6,394               |  | Offices                                     |  | Leased       |  | March 2013           
|                             |  |                     |  |                                            
|Wise Alloys Facilities       |  |                     |  |                                             |  |              |  |                      
|Muscle Shoals, AL            |  | 4,000,000           |  | Alloys Plant                                |  | Owned        |  |                      
|                             |  | 215,000             |  | Alabama Reclamation Plant                   |  | Owned        |  |                      
|                             |  | 115,000             |  | Southern Reclamation Plant(1)(2)            |  | Owned        |  |                      
|                             |  | 300,000             |  | Sheffield Coating Plant(2)                  |  | Leased       |  | March 2098           
|                             |  | 30,928              |  | Sewage Treatment Plant(2)                   |  | Leased       |  | March 2098           
|                             |  | 48,840              |  | Drinking Water Plant(2)                     |  | Leased       |  | March 2098           
|                             |  | 33,105              |  | Locomotive Shed and Maintenance Building(2) |  | Leased       |  | March 2098           
|                             |  |                     |  |                                            
|Wise Recycling Facilities    |  |                     |  |                                             |  |              |  |                      
|Albuquerque, NM              |  | 16,475              |  | Recycling Service Center                    |  | Leased       |  | February 2008        
|Bristol, VA                  |  | 31,800              |  | Recycling Service Center                    |  | Owned        |  |                      
|Charlotte, NC                |  | 45,084              |  | Recycling Service Center                    |  | Leased       |  | April 2020           
|Commerce, CA                 |  | 72,105              |  | Recycling Warehousing Operation             |  | Leased       |  | October 2013         
|Denver, CO                   |  | 18,260              |  | Recycling Service Center                    |  | Owned        |  |                      
|Lexington, KY                |  | 43,000              |  | Recycling Service Center                    |  | Leased       |  | February 2014        
|Pensacola, FL                |  | 10,900              |  | Recycling Service Center                    |  | Leased       |  | November 2015        
|Raleigh, NC                  |  | 40,000              |  | Recycling Service Center                    |  | Leased       |  | March 2012           



|(1) | The plant is owned; certain portions of the land are leased from Alcoa. The lease on the land expires March 2098.
|--- | -----------------------------------------------------------------------------------------------------------------

|(2) | The leases on these plants are subject to certain change of control and consent provisions. Under the terms of the lease related to the Southern Reclamation Plant, Alcoa has the
right to terminate the lease if we sell, transfer or assign the lease or the Southern Reclamation plant without Alcoas prior consent. Under the terms of the lease related to the sewage treatment plant, Alcoa has the right to terminate the
lease prior to its expiration date if we cease to operate the sewage treatment plant, cease to provide sewage treatment services to Alcoa or sell, transfer or assign the lease to the sewage treatment plant without Alcoas prior consent. Under
the terms of the lease related to the drinking water plant, Alcoa has the right to terminate the lease prior to its expiration date if we cease to provide drinking water services to Alcoa, cease to operate the drinking water plant or sell, transfer
or assign the lease of the drinking water plant without Alcoas prior consent. Under the terms of the lease related to locomotive shed and maintenance buildings and the related buildings and the related real property, Alcoa has the right to
terminate the lease prior to the expiration date if we cease to operate our Listerhill facility, the Alabama Reclamation Plant, the Southern Reclamation Plant or the Sheffield Coating Plant or we sell, transfer or assign the lease for our Listerhill
facility, the Alabama Reclamation Plant, the Southern Reclamation Plant or the Sheffield Coating Plant without Alcoas prior consent.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|Item 3. | Legal Proceedings
|------- | -----------------

We are a defendant from time to
time in various legal actions arising in the normal course of business, the outcomes of which, in the opinion of management, neither individually nor in the aggregate are likely to result in a material adverse effect on our business, results of
operations or financial condition.

The Company is a defendant in an action brought by Merrill Lynch, Pierce, Fenner & Smith
Incorporated pending in the New York Supreme Court, County of New York. In this action, Merrill Lynch seeks $0.9 million for out-of-pocket costs and expenses allegedly incurred pursuant to a letter agreement between Wise Metals and Merrill Lynch
dated January 31, 2002, in which Merrill Lynch alleges that Wise Metals agreed to reimburse Merrill Lynch for such costs and expenses. The Company has hired counsel and is vigorously contesting this lawsuit and believes it has meritorious
defenses to the claims alleged therein. The Company has filed an answer to the complaint denying the material allegations and alleging several affirmative defenses and counterclaims which exceed in amount the sum sought by Merrill Lynch. Merrill
Lynch moved to dismiss the Companys counterclaims and by an order dated December 30, 2004, the Court granted this motion, dismissed the counterclaims and permitted the Company to replead two of the counterclaims. The Company appealed,
which resulted in a reversal reinstating the dismissed counterclaims. Merrill Lynch has replied to the counterclaims. The action is presently in the discovery stage and the deadline for discovery has been extended to May 30, 2008. The Company
believes that it is not currently possible to estimate the ultimate outcome of this litigation. As a result, no expense for any potential adverse outcome of this matter has been recorded in the consolidated financial statements.

In November 2006, the Company received notice from the Environmental Protection Agency (EPA) regarding certain violations of the Clean Air
Act. The Company disputes some of the alleged violations and has initiated actions to come into compliance with the relevant requirements. The EPA has indicated its intent to resolve the violations through a judicial consent-decree, including the
payment of civil penalties by the Company. The Company has made an offer to resolve the alleged violations and is awaiting a response from the EPA. Discussions with the EPA are ongoing. The Company believes it is properly accrued for this
contingency and, accordingly, the ultimate resolution of these matters is not expected to have a material adverse effect on the Companys consolidated financial statements.

The Company was a defendant in an action brought by a former executive seeking compensatory damages previously pending in Delaware State Court. The
plaintiff alleged that certain transactions between Wise Metals Group members violated the Companys Limited Liability Company Agreement because other members were not afforded the opportunity to participate on equal terms, breach of fiduciary
duty and conversion of a portion of the plaintiffs equity interest in the Company. On June 25, 2007, the parties reached a settlement whereby in exchange for $2 million, the plaintiff would surrender his equity interest in the Company,
forgo any claim for a $1 million severance that plaintiff alleges would otherwise come due on his 62nd birthday and provide the Company with a general release of any existing or potential claims. This settlement was approved by the court and the
action was dismissed on June 25, 2007 and the Company paid the settlement during the quarter ended September 30, 2007.

In August
2006, the Company filed a lawsuit against Crown Cork and Seal (USA), Inc. in state court in Alabama for breach of contract and seeking a declaratory judgment on our beverage can sheet and food sheet contracts. The lawsuit alleged damages because of
breaches by Crown of the beverage can sheet contract, and asks the court to interpret certain pricing provisions of the food contract. In September 2006, Crown entered a counter claim asserting breaches to the food and beverage can contracts.
Throughout the remainder of 2007, the Company continued to negotiate with Crown to reach a settlement on these issues. On February 1, 2008, the Company and Crown agreed to settle the litigation without admitting any wrongdoing or liability by
either party. The negotiations also resulted in the signing of a long term supply agreement between the two parties to supply can stock both domestically and overseas.

As of December 31, 2007, the Company had no other known probable exposures relating to claims, environmental matters, or other legal proceedings that are expected to have a material adverse effect on the



20



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Company. There can be no assurance, however, that unanticipated events will not require the Company to increase the amount it has accrued for any matter or
accrue for a matter that has not been previously accrued because it was not considered probable. While it is possible that the increase or establishment of an accrual could have a material adverse effect on the Companys financial results for
any particular fiscal quarter or year, in the opinion of management there exists no known potential exposure that would have a material adverse effect on the financial condition or on the financial results of the Company beyond such fiscal quarter
or year.



|Item 4. | Submission of Matters to a Vote of Security Holders
|------- | ---------------------------------------------------

On October 5, 2007, Members of the Company constituting a Majority in Interest (as defined in the Second Amended and Restated Limited Liability Company Agreement of the Company dated May 24, 2004) resolved in writing that, in
connection with the purchase of $75 million of Preferred Membership Interest in the Company by RSA (the Retirement Systems of Alabama), the Company shall execute and deliver: (1) the Preferred Membership Interest Purchase Agreement dated
October 4, 2007; (2) the Registration Rights Agreement dated October 5, 2007; and (3) the Third Amended and Restated Limited Liability Agreement of the Company dated October 5, 2007.

Part II



|Item 5. | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|------- | -------------------------------------------------------------------------------------------------------------

There is no publicly traded market for our common equity.



21



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##### Table of Contents

|Item 6. | Selected Financial Information
|------- | ------------------------------

The following table
sets forth our selected historical and other financial data for each of the five years in the period ended December 31, 2007. Until June 30, 2003, we accounted for our 50% membership interest in Wise Recycling using the equity method. With
the acquisition of the remaining 50% membership interest, Wise Recycling has been included in our statement of operations data from July 1, 2003. You should read the following selected historical financial and other information in conjunction
with Managements Discussion and Analysis of Financial Condition and Results of Operation and our consolidated financial statements and the notes thereto included elsewhere in this Form 10-K.



|                                                   |  |                        |          |   |      |   |           |      |  |   |         |   |  |      |         |   |  |   |         |  
|-------------------------------------------------- |  | ---------------------- | -------- | - | ---- | - | --------- | ---- |  | - | ------- | - |  | ---- | ------- | - |  | - | ------- | -
|                                                   |  | 2007                   |          |   | 2006 |   |           | 2005 |  |   | 2004    |   |  | 2003 |        
|                                                   |  | (dollars in thousands) |         
|Statement of Operations Data:                      |  |                        |          |   |      |   |           |      |  |   |         |   |  |      |         |   |  |   |         |  
|Net sales                                          |  | $                      | 986,659  |   |      | $ | 1,038,641 |      |  | $ | 907,736 |   |  | $    | 792,357 |   |  | $ | 636,587 |  
|Cost of sales                                      |  |                        | 997,558  |   |      |   | 1,054,135 |      |  |   | 905,182 |   |  |      | 796,007 |   |  |   | 619,204 |  
|                                                   |  |                        |          |   |      |   |           |      |  |   |         |   |  |      |         |   |  |   |         |  
|Gross (loss) profit                                |  |                        | (10,899  | ) |      |   | (15,494   | )    |  |   | 2,554   |   |  |      | (3,650  | ) |  |   | 17,383  |  
|Selling, general and administrative                |  |                        | 15,303   |   |      |   | 11,557    |      |  |   | 10,728  |   |  |      | 11,967  |   |  |   | 9,204   |  
|Severance credit                                   |  |                        |         |   |      |   |          |      |  |   |        |   |  |      |        |   |  |   | (4,315  | )
|                                                   |  |                        |          |   |      |   |           |      |  |   |         |   |  |      |         |   |  |   |         |  
|Operating (loss) income                            |  |                        | (26,202  | ) |      |   | (27,051   | )    |  |   | (8,174  | ) |  |      | (15,617 | ) |  |   | 12,494  |  
|Guarantee of affiliate debt                        |  |                        |         |   |      |   |          |      |  |   |        |   |  |      |        |   |  |   | 300     |  
|Income from affiliate                              |  |                        |         |   |      |   |          |      |  |   |        |   |  |      |        |   |  |   | 973     |  
|Early extinguishment of debt                       |  |                        |         |   |      |   |          |      |  |   |        |   |  |      | (7,455  | ) |  |   |        |  
|Interest expense and fees, net                     |  |                        | (35,651  | ) |      |   | (32,679   | )    |  |   | (25,110 | ) |  |      | (17,920 | ) |  |   | (14,400 | )
|Unrealized gain(loss) on derivative instruments(1) |  |                        | 8,352    |   |      |   | (24,126   | )    |  |   | 11,666  |   |  |      | (550    | ) |  |   | 8,196   |  
|                                                   |  |                        |          |   |      |   |           |      |  |   |         |   |  |      |         |   |  |   |         |  
|Net (loss) income                                  |  | $                      | (53,501  | ) |      | $ | (83,856   | )    |  | $ | (21,618 | ) |  | $    | (41,542 | ) |  | $ | 7,563   |  
|                                                   |  |                        |          |   |      |   |           |      |  |   |         |   |  |      |         |   |  |   |         |  
|                                                   |  |                        |          |   |     
|Other Data:                                        |  |                        |          |   |      |   |           |      |  |   |         |   |  |      |         |   |  |   |         |  
|Depreciation and amortization                      |  | $                      | 13,721   |   |      | $ | 12,580    |      |  | $ | 13,355  |   |  | $    | 13,211  |   |  | $ | 12,300  |  
|Adjusted EBITDA(2)                                 |  |                        | (23,719  | ) |      |   | 9,106     |      |  |   | 7,499   |   |  |      | 33,335  |   |  |   | 30,423  |  
|Capital expenditures                               |  |                        | 22,247   |   |      |   | 10,612    |      |  |   | 14,537  |   |  |      | 12,329  |   |  |   | 10,143  |  
|Total pounds billed-rolled aluminum (in millions)  |  |                        | 544      |   |      |   | 636       |      |  |   | 661     |   |  |      | 653     |   |  |   | 570     |  
|Number of employees at end of periodTotal         |  |                        | 938      |   |      |   | 1,091     |      |  |   | 1,151   |   |  |      | 1,134   |   |  |   | 1,147   |  
|Number of employees at end of periodAlloys        |  |                        | 710      |   |      |   | 895       |      |  |   | 959     |   |  |      | 1,012   |   |  |   | 1,026   |  
|Total man hours worked (in thousands)Alloys       |  |                        | 1,371    |   |      |   | 1,509     |      |  |   | 1,527   |   |  |      | 1,609   |   |  |   | 1,747   |  
|                                                   |  |                        |          |   |     
|Balance Sheet Data (at period end):                |  |                        |          |   |      |   |           |      |  |   |         |   |  |      |         |   |  |   |         |  
|Cash                                               |  | $                      | 1,447    |   |      | $ | 2,280     |      |  | $ | 6,456   |   |  | $    | 7,669   |   |  | $ | 903     |  
|Broker deposits(3)                                 |  |                        | 902      |   |      |   | 7,889     |      |  |   | 250     |   |  |      | 250     |   |  |   | 250     |  
|Property and equipment, net                        |  |                        | 92,184   |   |      |   | 84,589    |      |  |   | 86,557  |   |  |      | 85,375  |   |  |   | 86,257  |  
|Total assets                                       |  |                        | 353,419  |   |      |   | 334,919   |      |  |   | 342,439 |   |  |      | 334,470 |   |  |   | 285,640 |  
|Working capital (deficit)                          |  |                        | (17,615  | ) |      |   | (33,918   | )    |  |   | 34,798  |   |  |      | 55,867  |   |  |   | 18,016  |  
|Total debt                                         |  |                        | 326,517  |   |      |   | 344,800   |      |  |   | 290,033 |   |  |      | 254,244 |   |  |   | 175,270 |  
|Total members (deficit) equity                    |  |                        | (172,971 | ) |      |   | (121,436  | )    |  |   | (37,130 | ) |  |      | (12,765 | ) |  |   | 42,890  |  



|(1) | We adopted SFAS No. 133, Accounting for Derivative Instruments and Hedging Activity, on January 1, 2001. We have elected not to designate any of our derivative instruments
as hedges under this statement. All of our derivatives are recorded at fair value in our balance sheets. Accordingly, any unrealized loss or gain is recorded in the statement of operations as of the end of each accounting period. (See Note 2 to our
Consolidated Financial Statements).
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Adjusted EBITDA represents EBITDA, defined as earnings before income taxes, interest expense and fees, net, and depreciation and amortization, adjusted to exclude
early extinguishment of debt, income from
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | affiliate, nonrecurring charges, severance charges and credits, LIFO adjustments, cumulative effect of change in accounting principle and mark-to-market
adjustment for contracts under SFAS No. 133. Adjusted EBITDA should be considered in addition to, and not as a substitute for, cash flows as a measure of liquidity. We include Adjusted EBITDA information because this measure is used to measure
our compliance with debt covenants and used by investors and note holders to evaluate our ability to service debt. Our measure of Adjusted EBITDA may not be comparable to similarly titled measures of other companies. The table below sets forth the
reconciliation of Adjusted EBITDA. See Item 7, Managements Discussion and Analysis of Financial Condition and Results Of Operation  Liquidity and Capital Resources.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Broker deposits include cash deposits with commodity brokers to cover open hedging positions. Broker deposits also include $250 in restricted cash with a financial institution.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                           |  |                        |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |        |  
|------------------------------------------ |  | ---------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | - |  | ---- | ------- | - |  | - | ------ | -
|                                           |  | 2007                   |         |   | 2006 |   |         | 2005 |  |   | 2004    |   |  | 2003 |        
|                                           |  | (dollars in thousands) |        
|Net cash used in operating activities      |  | $                      | (33,035 | ) |      | $ | (47,175 | )    |  | $ | (21,559 | ) |  | $    | (33,823 | ) |  | $ | (2,340 | )
|Changes in working capital items and other |  |                        | (26,335 | ) |      |   | 23,602  |      |  |   | 3,948   |   |  |      | 48,653  |   |  |   | 23,951 |  
|Interest expense and fees, net(a)          |  |                        | 35,651  |   |      |   | 32,679  |      |  |   | 25,110  |   |  |      | 18,505  |   |  |   | 14,400 |  
|Income from affiliate                      |  |                        |        |   |      |   |        |      |  |   |        |   |  |      |        |   |  |   | (1,273 | )
|Severance credits                          |  |                        |        |   |      |   |        |      |  |   |        |   |  |      |        |   |  |   | (4,315 | )
|                                           |  |                        |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |        |  
|Adjusted EBITDA                            |  | $                      | (23,719 | ) |      | $ | 9,106   |      |  | $ | 7,499   |   |  | $    | 33,335  |   |  | $ | 30,423 |  



|(a) | Interest expense and fees includes servicing fees paid in conjunction with receivables asset sales in the amount of $585 in 2004.
|--- | ---------------------------------------------------------------------------------------------------------------------------------



|Item 7. | Managements Discussion And Analysis Of Financial Condition And Results Of Operation
|------- | ------------------------------------------------------------------------------------

Overview

We are the third largest producer of aluminum beverage can stock in the world and one of
the largest aluminum and other non-ferrous scrap recyclers in the United States based on The Aluminum Association, Inc. Beverage can stock is aluminum sheet specifically designed and engineered for the production of aluminum beverage cans. We own
one of only five beverage can stock facilities in North America, providing valuable capacity to meet volume demands in a consolidated industry. Our can stock customers include Ball, Crown and Rexam. These customers produce aluminum cans for the
largest brewers and carbonated soft drink bottlers in North America. In addition, we produce food container stock and semi-fabricated aluminum sheet for transportation and other common alloy commercial markets. Our recycling operation, Wise
Recycling, provides aluminum feedstock for our aluminum sheet production as well as collection of scrap for sale in the merchant market.

Unlike some of our principal competitors, we do not manufacture aluminum from bauxite. Instead, we process aluminum scrap and prime aluminum manufactured by third parties. As a result, we do not have the capital requirements and high fixed
costs associated with the production of prime aluminum. Aluminum purchases comprised approximately 74% of our cost of sales in 2007. Historically, prices of our aluminum can stock and other products have been directly correlated to the prices of our
metal material cost due to the standard industry practice of passing through the metal material costs to customers. This correlation, subject to the impact of metal ceiling or price caps, which was an artificial limit on the price we
could charge certain customers for metal, has otherwise allowed us to maintain a relatively consistent conversion revenue, defined as net revenue less material costs, on a per pound basis. The impact of metal prices rising above the ceiling in 2005
and 2006 led to a reduction in conversion revenue and resulting conversion margin. The Company had no impact from metal price ceilings on its beverage can business in 2007.

Our can stock production takes place at our Listerhill facility in Muscle Shoals, Alabama. We purchased this facility from Reynolds in January 1999. At
our Listerhill facility, we convert used beverage cans, other forms of



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scrap aluminum and primary ingot into high quality aluminum sheet, or can stock, that is used by our customers to produce beverage and food cans and other
aluminum sheet products. There are five primary steps in the production process: (i) melting the raw material; (ii) casting an ingot; (iii) hot rolling the ingot and reducing its gauge to a 0.10 inch thickness; (iv) further
reducing the thickness to customer specified gauges on our cold mills and (v) finishing the can stock with a coating. Including commercial products and can sheet, we believe our cast house and hot mill have annual capacity in excess of 1.8 and
1.4 billion pounds, respectively, while our cold mills and finishing capacity is limited to approximately 1.1 billion pounds.

We generally
warehouse finished can stock at twelve locations which are strategically situated in close proximity to many of the primary customer plant locations that we serve. Our customer plant locations require daily shipments by either rail or truck to
replenish warehouse inventory.

In 2007, approximately 49% and 10% of our total shipments were derived from sales to Ball and Crown,
respectively. Our Listerhill facility has been a supplier to selected Ball manufacturing facilities since 1965, and we are the largest supplier of beverage can stock to Ball. Ball has contracted to purchase aluminum beverage can stock from us
through a multi-year supply agreement extending beyond 2008. Crown has contracted to purchase aluminum beverage can stock from us through a multi-year supply agreement extending beyond 2008. We currently supply Crown food can stock under a
multi-year supply agreement which extends beyond 2008. We began to ship can stock to Rexam in 2004 and continue with Rexam to make spot shipments. We also continue with trial shipments to a fourth major beverage can manufacturer.

Our historic beverage can stock shipments have been fairly consistent since our purchase of our Listerhill facility in 1999, as the beverage can market
and our competitive market share positions have been relatively constant over that period.

The Company recognizes net sales when the
revenue is realized or realizable, and has been earned, in accordance with the SECs Staff Accounting Bulletin (SAB) No. 104, Revenue Recognition. The Company records sales when a firm sales agreement is in place, delivery has
occurred and collectibility of the fixed or determinable sales price is reasonably assured. The Company has elected not to designate any of our derivative instruments as hedges under SFAS No. 133. All of our derivatives have been recorded at
fair value on our balance sheets.

Metal, labor, natural gas, electricity and plant maintenance costs represent the primary components of
our cost of sales. In 2007, scrap aluminum represented approximately 72% of our metal input. In 2007, aluminum represented approximately 74% of our cost of sales. Purchases of scrap aluminum from Recycling and our customers made up 61% of total
scrap used, with the balance coming from purchases in the open market. The scrap purchase arrangements with our key customers through which we purchase scrap aluminum generated in their can production processes provided us with approximately 30% of
our scrap aluminum requirements in 2007. In 2007, scrap aluminum purchases from Recycling represented 31% of our purchases of scrap aluminum. Recycling presently operates seven area centers with twenty service centers and eighteen convenience
centers associated with the area centers. Recycling continues to identify potential locations where there is a sufficient industrial base to provide scrap to the plant and operate profitably on an independent basis. Recycling also sells ferrous,
copper and other non-ferrous scrap to unaffiliated third party buyers.

The primary aluminum alloys utilized in our business are readily
available and are purchased from both foreign and domestic sources.

We currently purchase natural gas on a bid basis from Atmos which is
delivered through Northern Alabama Gas District Pipeline and purchase electricity from the TVA, which provides for firm power at fixed prices and variable power at market prices.

Shipping and handling costs amounted to $23.9 million, $25.6 million, and $23.9 million for the years ended December 31, 2007, 2006 and 2005,
respectively, and are recorded as a component of cost of sales in the



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consolidated statements of operations. While shipments decreased from 764.7 million pounds in 2005 to 757.3 million pounds in 2006, freight costs
increased from $23.9 million in 2005 to $25.6 million in 2006 due to increased use of truck transportation which is a more expensive mode of transportation than shipments by rail. Freight costs decreased from $25.6 million in 2006 to $23.9 million
in 2007 due primarily to a decrease in shipments from 757.3 million pounds in 2006 to 706.8 million pounds in 2007.

Selling,
general and administrative expenses consist primarily of employment and various administrative expenses. Employment costs comprised approximately 39% of selling, general and administrative expenses in 2007.

The Company incurred $7 million in direct costs as a result of a work stoppage related to labor negotiations and an additional $1.2 million in costs
associated to transitioning its maintenance service operations. On November 1, 2007, the Company received notice from the union representatives of the United States Steelworkers (USW) that they intended to undergo a work stoppage representing
approximately 400 workers. Simultaneously, the union contract covering approximately 200 additional maintenance workers also expired. The Company replaced these maintenance workers through a long-term alliance contract with ABB, Inc. to provide
maintenance services to Wise Alloys. The work stoppage of the USW lasted differing times at each of the facilities of Wise Alloys and in each case lasted less than 5 days. Most of these resulting costs are included in cost of sales in the
consolidated statements of operations. The current labor agreements are in effect through November 1, 2012.

Wise Metals Group LLC and
its subsidiaries are taxed as partnerships under Subchapter K of the Internal Revenue Code. Therefore, the results of the Companys operations are included in the taxable income of the individual shareholders. As a result, no provision for
federal income taxes has been included in the consolidated financial statements.

At a minimum, the Company intends to make cash
distributions to its shareholders in the amount necessary for its shareholders to pay their individual taxes associated with the Companys taxable income.

Operating Results

Year ended December 31, 2007 compared to year ended December 31, 2006

Sales. Consolidated sales decreased from $1,038.6 million in 2006 to $986.7 million in 2007, a decrease of $51.9 million, or 5%. Total volumes
decreased from 757.3 million pounds in 2006 to 706.8 million pounds in 2007, a decrease of 50.5 million pounds, or 7%.

Wise
Alloys sales decreased from $903.3 million in 2006 to $839.4 million in 2007, a decrease of 7% while shipments decreased from 636.3 million pounds in 2006 to 543.6 million pounds in 2007, a decrease of 15%. Shipments in 2007 were lower due
primarily to can sheet customers reducing inventory quantities from year-end levels combined with the effect of slightly lower contractual volumes which resulted from negotiations to improve pricing. Offsetting the decrease in shipment volumes were
price increases that were effective on January 1, 2007 resulting from negotiations which included the elimination of metal ceilings.

Wise Recycling sales to third parties increased from $134.2 million in 2006 to $145.2 million in 2007, an increase of 8% while shipments to third parties increased from 121.0 million pounds in 2006 to 163.2 million pounds in 2007,
an increase of 35%. The increased shipments at Recycling resulted from continued internal growth and expansion efforts within existing facilities to handle increased non-aluminum scrap such as copper and brass as well as an increased presence in the
ferrous market. Average sales price decreased from $1.08 per pound in 2006 to $0.91 per pound in 2007 due mostly to the increased presence of ferrous metal in the sales mix which has a significantly lower price per pound than other product
categories.

Cost of Sales. Consolidated cost of sales decreased from $1,054.1 million in 2006 to $997.6 million in 2007 a decrease
of $56.5 million or 5%.



25



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##### Table of Contents

Wise Alloys cost of sales decreased from $933.4 million in 2006 to $867.6 million in 2007, a decrease of
7%. Metal costs, accounted for on the last-in-first-out (LIFO) basis and representing 75.1% and 69.5% of cost of sales in 2006 and 2007, respectively, decreased from $700.9 million in 2006 to $603.0 million in 2007, a decrease of $97.9 million or
14%. Gross profit improved from a loss of $63.6 million in 2006 to a loss of $18.6 million in 2007. Metal prices in 2007 averaged approximately 1% higher than in 2006, while metal prices in 2006 averaged approximately 33% higher than in 2005. The
improvement in gross profit resulted largely from the absence of an approximate $42.2 million impact from metal price caps on can sheet in 2006 which reduced the effective selling price of can sheet and prevented a full pass-through of increased
aluminum prices.

The Company incurred $7 million in direct costs as a result of a work stoppage related to labor negotiations and an
additional $1.2 million in costs associated to transitioning its maintenance service operations. On November 1, 2007, the Company received notice from the union representatives of the United States Steelworkers (USW) that they intended to
undergo a work stoppage representing approximately 400 workers. Simultaneously, the union contract covering approximately 200 additional maintenance workers also expired. The Company replaced these maintenance workers through a long-term alliance
contract with ABB, Inc. to provide maintenance services to Wise Alloys. The work stoppage of the USW lasted differing times at each of the facilities of Wise Alloys and in each case lasted less than 5 days. Most of these resulting costs are included
in cost of sales in the consolidated statements of operations. The current labor agreements are in effect through November 1, 2012.

Also contributing to the gross profit improvement was the decreased prices paid for energy including natural gas. The price paid per mmBTU in 2006 was $9.69 versus an average price paid in 2007 of $8.08, a decrease of 17% or approximately
$1.61 per mmBTU. Based on annual usage of approximately 4.4 million mmBTUs, this price decrease contributed approximately $5.0 million to the improvement in margin in 2007.

Wise Recycling cost of sales associated with net sales increased from $119.5 million in 2006 to $136.2 million in 2007, an increase of 14%. The increase
can be attributed to the increased volumes at Recycling as well as the higher commodity prices for aluminum and other scrap products including copper and brass which resulted in cost increases for recycled products.

Selling, General and Administrative. Selling, general and administrative expenses increased from $11.6 million in 2006 to $15.3 million in 2007,
an increase of $3.7 million or 32% due to an increase in professional fees related to labor negotiations and employment costs. The labor negotiations led to a new contract with the labor unions which are in effect through November 1, 2012.

Interest Expense and Fees. Interest expense, including amortization of deferred financing costs, increased from $32.7 million in
2006 to $37.6 million in 2007, an increase of $4.9 million, primarily due to higher outstanding amounts on our line of credit throughout the year in addition to additional interest paid under the Companys financing agreement. The increase was
due to higher working capital needs caused by higher metal prices. Non-cash amortization of deferred financing costs included in interest expense and fees was $1.7 million in 2006 and $2.1 million in 2007, an increase of $0.4 million or 24%.

Unrealized gain (loss) on derivative instruments. This gain (loss) represents the non-cash gain (loss) recognized pursuant to SFAS
No. 133. In 2007, an unrealized gain of $8.4 million was recognized versus a loss of $24.1 million in 2006. The unrealized gain (loss) was as a result of forward contracts entered into to hedge the cost of natural gas and aluminum. The fair
value at December 31, 2007 for natural gas and aluminum derivatives were ($0.4) million and $4.2 million, respectively. The fair value at December 31, 2006 for natural gas and aluminum derivatives were ($3.8) million and ($2.8)
million, respectively.

Year ended December 31, 2006 compared to year ended December 31, 2005

Sales. Consolidated sales increased from $907.7 million in 2005 to $1,038.6 million in 2006, an increase of $130.9 million, or 14%. Total volumes
decreased from 764.7 million pounds in 2005 to 757.3 million pounds in 2006, a decrease of 7.4 million pounds, or 1%.



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Wise Alloys sales increased from $829.6 million in 2005 to $903.3 million in 2006, an increase of 9%
while shipments decreased from 661.3 million pounds in 2005 to 636.3 million pounds in 2006, a decrease of 4%. Contributing to sales increases were continued higher commodity prices for aluminum which resulted in price increases for
products including can sheet.

Wise Recycling sales to third parties increased from $75.7 million in 2005 to $134.2 million in 2006, an
increase of 77% while shipments to third parties increased from 103.4 million pounds in 2005 to 121.0 million pounds in 2006, an increase of 17%. The increased shipments at Recycling resulted from continued internal growth and expansion
efforts within existing facilities to handle increased non-aluminum scrap such as copper and brass. Also contributing to sales increases were continued higher commodity prices for aluminum and other scrap products which resulted in price increases
for recycled products.

Cost of Sales. Consolidated cost of sales increased from $905.2 million in 2005 to $1,054.1 million in 2006,
an increase of $148.9 million or 16%.

Wise Alloys cost of sales increased from $831.2 million in 2005 to $933.4 million in 2006, an
increase of 12%. Metal costs, accounted for on the last-in-first-out (LIFO) basis and representing 68.9% and 75.1% of cost of sales in 2005 and 2006, respectively, increased from $572.7 million in 2005 to $700.9 million in 2006, an increase of
$128.2 million or 22%. Gross profit decreased from a loss of $11.0 million in 2005 to a loss of $63.6 million in 2006. Contributing to this change is the 2006 impact of higher metal costs accounted for on LIFO. Metal prices in 2006 averaged
approximately 33% higher than in 2005, while metal prices in 2005 averaged approximately 8% higher than in 2004. The increase in metal prices resulted in a $23.6 million loss from a LIFO liquidation during 2006. The decrease in gross profit resulted
from an approximate $42.2 million impact from metal price caps on can sheet which reduced the effective selling price of can sheet and prevented a full pass-through of increased aluminum prices. Also contributing to the margin decrease was the
increased prices paid for energy including natural gas. The price paid per mmBTU in 2005 was $8.98 versus an average price paid in 2006 of $9.69, an increase of 8% or approximately $.71 per mmBTU. Based on annual usage of approximately
4.4 million mmBTUs, this price increase contributed approximately $3.1 million to the decrease in gross profit in 2006. Also contributing to the decrease were the effects of other input costs increases including coatings.

Wise Recycling cost of sales associated with third party sales increased from $71.6 million in 2005 to $119.5 million in 2006, an increase of 67%. The
increase can be attributed to the increased volumes at Recycling as well as the higher commodity prices for aluminum and other scrap products including copper and brass which resulted in cost increases for recycled products.

Selling, General and Administrative. Selling, general and administrative expenses increased from $10.7 million in 2005 to $11.6 million in 2006,
an increase of $0.9 million or 8% due to an increase in personnel costs.

Interest Expense and Fees. Interest expense, including
regular amortization of deferred financing costs, increased from $25.1 million in 2005 to $32.7 million in 2006, an increase of $7.6 million, primarily as a result of higher outstanding borrowings due to higher metal prices and higher interest rates
on the variable rate revolving line of credit. Non-cash amortization of deferred financing costs included in interest expense and fees was $1.2 million in 2005 and $1.7 million in 2006, an increase of $0.5 million or 42%.

Unrealized gain (loss) on derivative instruments. This gain (loss) represents the gain (loss) we recognized pursuant to SFAS No. 133. In
2006, an unrealized loss of ($24.1) million was recognized versus a gain of $11.7 million in 2005. The gain (loss) was as a result of forward contracts entered into to hedge the cost of natural gas and aluminum. The fair value at December 31,
2006 for natural gas and aluminum derivatives were ($3.6) million and ($2.8) million, respectively. The fair value at December 31, 2005 for natural gas and aluminum derivatives were ($0.6) million and $16.4 million, respectively.



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Liquidity and Capital Resources

Our principal sources of cash to fund liquidity needs are net cash provided by operating activities and availability under our revolving senior secured
credit facility described in Note 5 to our Consolidated Financial Statements. We anticipate that our primary liquidity needs will be for debt service, working capital (including potential increased margin deposits associated with derivatives) and
capital expenditures. Our debt service costs and working capital requirements have increased as a result of increased aluminum prices. We believe that cash generated from operations, available borrowings under our senior revolving secured credit
facility, including anticipated increases in borrowing base availability that would likely result as our accounts receivable and inventory values increase, and other indebtedness, such as the Master Equipment Lease dated November 13, 2006, as
amended on April 25, 2008, by and among Alloys, Wilmington Trust Company, The Employees Retirement System of Alabama and the Teachers Retirement System of Alabama executed in connection with the sale and concurrent financing of
certain property by Alloys and agreements that we enter from time to time pursuant to which we sell certain accounts receivable, will be sufficient to enable us to meet our liquidity requirements in the foreseeable future.

Our liquidity has been directly impacted by aluminum prices which have increased steadily and dramatically since 2002. Average aluminum prices in 2002
were $0.65 per pound and have risen over 89% to an average of $1.23 per pound for 2007. These price increases have and are continuing to impact our working capital requirements resulting in higher outstanding debt supported by higher levels of
receivables and inventory. Our net liquidity is determined based on a standard borrowing base formula which accounts for the collateral value of inventory and receivables on a basis approximating the lower of current cost (on a first-in-first-out or
FIFO basis) or fair market value. This borrowing base is then compared to the outstanding loan balance including outstanding letters of credit to determine a net amount available for additional borrowings. Our liquidity could also be hampered if we
incurred significant unexpected increases in necessary capital expenditures. Significant increases in volumes could also impact our liquidity. See Item 1A, Risk Factors for certain circumstances that could adversely affect our
liquidity. In particular, a default under our senior secured credit facility or decreased sales or lower margins from our sales to Ball or Crown could have a material adverse effect on our liquidity. While the metal ceiling materially impacted sales
of beverage can sheet in 2005 and 2006, due to negotiated pricing terms the Company had no impact from metal price ceilings on beverage can sheet in 2007.

We anticipate that cash provided from operating activities in the future and borrowings under our revolving credit agreement will be sufficient to pay our operating expenses, satisfy debt service obligations and fund
capital expenditures for the foreseeable future. In addition, as we have historically done, we will continue to evaluate the merits of any opportunities that may arise for acquisitions of businesses or assets, which may require additional liquidity.

As of December 31, 2007, the outstanding balance on our revolving line of credit facility was $147.8 million. In addition, we
had approximately $1.7 million of outstanding letters of credit against our $207.5 million revolving credit line. Available borrowings under the revolving credit agreement at December 31, 2007 were $25.0 million. On April 25, 2008,
the Company increased the revolving line from $207.5 million to $278.0 million and extended the term to May 5, 2010. Our senior credit agreement and indenture agreement contain restrictive covenants. These covenants may constrain our
activities and limit our operational and financial flexibility. The failure to comply with these covenants could result in an event of default, which, if not cured or waived, could have a material adverse effect on our business, financial condition,
and results of operations. The termination date on the revolving credit facility is May 5, 2010. The facility is considered short term due to the use of a lockbox as well as material adverse effect language within the agreement. The terms of
the credit facility permit us to enter into various forms of additional financing with varying amounts. See Note 5 to the Consolidated Financial Statements for further discussion. Furthermore, we frequently offer cash discounts for early payment
against receivables from our major can sheet customers which can also decrease outstanding debt and increase overall liquidity.

As of
December 31, 2007 our total available credit under our revolving credit facility was $207.5 million which represents our primary source of liquidity for our working capital needs. At December 31, 2007, the



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Company had drawn $147.8 on this facility. As of April 25, 2008, the Company increased the total line of credit under our revolving credit facility to
$278.0 million. Our ability to borrow the full available amount of our credit facility is limited by the available borrowing base under the revolving credit facility as determined based on a borrowing base formula which relates to the collateral
value of trade receivables and inventory on a basis approximating the lower of current cost (on a FIFO basis) or fair market value. This borrowing base is then compared to the outstanding loan balance (including outstanding letters of credit) to
determine a net amount available for additional borrowings (Availability).

This credit facility requires also that we comply
with either a minimum Adjusted EBITDA and a capital expenditure covenant or an Adjusted Excess Availability calculation as defined by that agreement. These covenants are measured on a monthly basis.

As described in Note 5 to our Consolidated Financial Statements, Adjusted EBITDA represents EBITDA, defined as net earnings before income taxes, interest
expense and fees, net, and depreciation and amortization, adjusted to exclude early extinguishment of debt, income from affiliate, nonrecurring charges, severance charges and credits, LIFO adjustments, cumulative effect of change in accounting
principle and mark-to-market adjustment for contracts under SFAS No. 133. Adjusted Excess Availability is determined as availability adjusted to remove any contractual sub-limits such as those for inventory or any limitations on the maximum
amount of the revolving credit facility.

If we do not comply with these or other covenants and restrictions contained in our senior
secured credit facility, the indenture and other agreements governing our indebtedness, we could be in default under those agreements, and the debt under those instruments, together with accrued interest, could then be declared immediately due and
payable. If we default under our senior secured credit facility, the lenders could cause all of our outstanding debt obligations under our senior secured credit facility to become due and payable, require us to apply all of our cash to repay the
indebtedness or prevent us from making debt service payments on any other indebtedness we owe. In addition, any default under our senior secured credit facility or agreements governing our other indebtedness could lead to an acceleration of debt
under other debt instruments that contain cross-acceleration or cross-default provisions. If the indebtedness under our senior secured credit facility and indenture is accelerated, we may have to seek other sources of financing or otherwise may not
have sufficient assets to repay amounts due under our senior secured credit facility, our senior secured notes or under other debt securities then outstanding. Our ability to comply with these provisions of our senior secured credit facility, the
indenture and other agreements governing our other indebtedness may be affected by changes in the economic or business conditions or other events beyond our control.

In 2006, the Company executed a sale financing agreement on certain pieces of production equipment with The Retirement System of Alabama (RSA) in the amount of $29.9 million. The agreement executed on
November 13, 2006 provided the Company with an initial funding of $14.95 million to be followed by an additional $14.95 million which became available on December 1, 2006 and the Company drew down on January 3, 2007. The agreement
qualifies as a capital lease and has a three-year term with a fixed interest rate of 10.7%.

On October 4, 2007, the Company signed an
agreement with the RSA in which the RSA agreed to purchase $75 million of cumulative-convertible 10% PIK preferred membership interests of the Company. The preferred interest is convertible into 25 percent of the common interest of the Company. The
Company has the right to call the preferred membership interest after seven years at the cost of the greater of the investment plus any accrued PIK dividends or the fair market value of the preferred interest on an as converted basis. In conjunction
with the transaction, deferred financing fees were incurred in the amount of $1,083 of which the amortization of those fees was $36 for the period ended December 31, 2007. As of December 31, 2007, total accumulated PIK interest on the $75 million
cumulative-convertible preferred membership interest was $1,875. Unamortized deferred financing fees in the amount of $1,047 are included as an offset to the total liquidation preference of $75 million preferred membership interest and $1,875 of
accumulated PIK interest classified as mezzanine equity on the



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balance sheet. Total liquidation preference as of December 31, 2007, is $76,875 and total accretion of redeemable preferred membership interest for the
period ended December 31, 2007 is $1,911 which would increase the net loss attributable to members. In the event of any liquidation, dissolution or winding up of the Company, the preferred members are entitled to receive distributions before any
distributions to the members. Net loss for the year ended December 31, 2007 was $53,501 of which net loss attributable to members would be $55,412, after recognition of the PIK interest noted above.

The Company reached agreement with the labor unions at the Alloys facility resulting in a new 5-year contract beginning November 1, 2007. As part of
the agreement the unions pension benefits will now be provided through multi-employer funds administered through the Steelworkers Pension Trust, the Central Pension Fund and the Tri-State Carpenters Fund. The Wise defined benefit pension plan
was frozen as of the date of the new contract. The new agreement resulted in the Company recognizing a net curtailment gain of $9.0 million. Highlights of the new labor agreement include a fair compensation package and the recognition of pension and
post retirement health insurance issues by eliminating OPEB in exchange for an enhanced pension benefit from the Steelworkers pension fund. Also included was the recognition of realities in health care by adjusting plan and increasing premiums paid
by employees over the life of the contract.

On April 25, 2008, the Company entered into an Amendment No. 13 to its revolving
credit facility (Amendment No. 13) to increase the maximum credit under the loan from $207.5 million to $278 million. Under Amendment No. 13, the applicable interest rates for the loan will range either from 0.50% - 1.00% over
the prime interest rate or 2.75% - 3.25% over the LIBOR rate, and will be based upon the EBITDA of the Company for the immediately preceding two (2), three (3) or four (4) fiscal quarter periods. To accommodate the increased maximum
credit, certain sublimits in the revolving credit facility have been increased. The term of the credit facility has also been extended from May 5, 2009 to May 5, 2010. Additionally, breach of the covenant requiring that the Company furnish
to the Agent under the loan agreement audited and unaudited consolidated financial statements of the Company and its subsidiaries within ninety days of the end of the fiscal year ended December 31, 2007 was waived.

As part of the April 25, 2008 amendment, the RSA, an equity owner of the Company, has agreed to participate in the revolving credit facility as a pari
passu lender with a total commitment of $96 million. As consideration for the RSAs participation in the credit facility, the Company and the RSA agreed to enter into an amendment to the existing master equipment lease to increase the amount
outstanding under the lease by $4 million and increase the interest rate under the lease from 10.7% to 13.7%. The master equipment lease, as amended, now expires May 5, 2010. In addition, the Company and the RSA entered into a fee letter
agreement which requires the Company to pay the RSA certain deferred commitment, closing and consulting fees on a monthly basis which, in conjunction with the increased interest rate under the amended master equipment lease, will ensure that the
rate of return for the amount outstanding under the RSA commitment equals, but does not exceed 8.5%.

The Company is a party to certain
claims and litigation associated with employment related matters for which management believes that the ultimate resolution will not have a material adverse impact on the Companys financial position.

Should aluminum prices continue to rise, we expect that the collateral value of our working capital would continue to rise sufficiently to warrant
further increases to the senior secured credit facility should required borrowings and conditions dictate. As such, we believe our available sources of credit will be sufficient to meet our liquidity needs.

Year ended December 31, 2007 compared to year ended December 31, 2006

Operating Activities. During the year ended December 31, 2007, net cash used in operating activities was $33.0 million as compared to $47.2
million in 2006. Cash used in or provided by operating activities are subject



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to fluctuations in working capital requirements especially for accounts receivable and inventories. Net loss for the year ended December 31, 2007 was
$53.5 million, which includes an $8.4 million favorable impact for FAS 133 (Accounting for Derivative Instruments and Hedging Activities) and a $13.0 million favorable impact for metal costs accounted for on LIFO. This compares to a
net loss of $83.9 million for the year ended December 31, 2006, which includes a $24.1 million unfavorable impact for FAS 133 and a $23.6 million unfavorable impact for metal costs accounted for on LIFO. Accounts receivable
decreased from $104.1 million at December 31, 2006 to $77.5 million at December 31, 2007, a decrease of $26.6 million. This decrease is a result of timing and decreased customer shipments. The payments by our customers are made at periodic
times during the week and month, not everyday, nor exactly in 30 days, so the balance in receivables can fluctuate significantly at the end of a quarter depending on the timing of receiving payments. Inventories increased from $116.9 million at
December 31, 2006 to $165.8 million at December 31, 2007, an increase of $48.9 million due to an inventory build ahead of increased 2008 sales commitments. Accounts payable increased from $71.1 million at December 31, 2006 to $103.2
million at December 31, 2007, an increase of $32.1 million. This increase is a result of a higher level of purchasing ahead of increased 2008 sales commitments, timing and extended vendor terms.

Investing Activities. In 2007, our capital expenditures were $22.2 million as compared to $10.6 million in 2006. These expenditures are comprised
of capital improvements principally related to machinery and equipment. The Company has completed the next step in a program to further diversify industry product offerings by adding increased width to its aluminum can-stock capabilities. The
results of this phase will extend the width of Wise Alloys can stock from 60 inches to 72 inches by the end of 2008. This project will allow Wise Alloys can-sheet product to become also available to beverage-can producers that use 14 and
15 out extended-width cupping presses in their manufacturing process.

Financing Activities. Net cash provided by financing
activities was $53.1 million in 2007 compared with $53.6 million in 2006. Net cash provided by financing activities was from the purchase of $75 million of cumulative-convertible 10% PIK preferred membership interests by the RSA offset by decreased
borrowings under the senior secured credit facility.

Year ended December 31, 2006 compared to year ended December 31, 2005

Operating Activities. During the year ended December 31, 2006, net cash used in operating activities was $47.2 million as
compared to $21.6 million in 2005. Cash used in or provided by operating activities are subject to fluctuations in working capital requirements especially for accounts receivable and inventories. Accounts receivable increased from $73.3 million at
December 31, 2005 to $104.1 million at December 31, 2006, an increase of $30.8 million. This increase is a result of timing and the rising price of metal. The payments by our customers are made at periodic times during the week and month,
not everyday, nor exactly in 30 days, so the balance in receivables can fluctuate significantly at the end of a quarter depending on the timing of receiving payments. The increase in working capital requirements affecting both accounts receivable
and inventory were also the result of higher aluminum prices which increased an average of approximately 33% for the year.

Investing
Activities. In 2006, our capital expenditures were $10.6 million as compared to $14.5 million in 2005. These expenditures are comprised of capital improvements principally related to machinery and equipment. The Company completed the next step
in a program to further diversify industry product offerings by adding increased width to its aluminum can-stock capabilities. The results of this phase will extend the width of Wise Alloys can stock from 60 inches to 72 inches by the end of 2008.
This project will allow Wise Alloys can-sheet product to become also available to beverage-can producers that use 14 and 15 out extended-width cupping presses in their manufacturing process.

Financing Activities. Net cash provided by financing activities was $53.6 million in 2006 compared with $34.9 million in 2005. Net cash provided
by financing activities was from increased borrowings under the senior secured credit facility as well as funds received under the sale lease back agreement.



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Effective March 3, 2006, we amended and restated our revolving credit facility to increase the
revolver limit from $150 million to $180 million, subject to a borrowing base calculation and certain working capital eligibility requirements and limits. Proceeds from the revolver are used primarily to finance increased working capital
requirements due to higher shipment levels and increased metal prices. On June 12, 2006, we further amended and restated our revolving credit facility to increase the revolver limit from $180 million to $200 million. On August 4, 2006, we
further amended and restated our revolving credit facility to increase the revolver limit from $200 million to $207.5 million. On April 25, 2008 the Company further amended and restated our revolving credit facility to increase the revolver
limit from $207.5 million to $278.0 million.

Backlog of Customer Business

We maintain long-term supply agreements with our key customers in the aluminum can sheet market and we believe the general terms of our customer contracts
are standard for the industry. These contracts are supply arrangements whereby specific quantities and product pricing are negotiated and agreed to on an annual basis under the terms of the multi-year master supply agreement. Under the terms of our
customer contracts, we use an industry standard for pricing the metal component of all aluminum can sheet sold.

We receive orders from our
customers who provide detailed specifications as to metal characteristics and specific plant location. Although all orders are placed pursuant to the contract, quantities and specifications will vary by plant and more specifically by production line
within the plant. These orders are generally provided with a two to three month lead time. The majority of all orders, specifically can sheet orders, that are processed by Alloys are made pursuant to a specific customer order. Due to seasonal
considerations, Alloys highest sales volumes generally occur during the first and second quarters.

Critical Accounting Policies

We have prepared our financial statements in conformity with accounting principles generally accepted in the United States, and these statements
necessarily include some amounts that are based on informed judgments and estimates of management. Our significant accounting policies are summarized in Note 2 to our Consolidated Financial Statements. As discussed below, our financial position or
results of operations may be materially affected when reported under different conditions or when using different assumptions in the application of such policies. In the event estimates or assumptions prove to be different from actual amounts,
adjustments are made in subsequent periods to reflect more current information. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our financial statements.

Revenue Recognition

The Company recognizes revenue pursuant to applicable accounting standards, including the SEC Staff Accounting Bulletin (SAB) No. 104, Revenue Recognition Net sales consist of both net sales and tolling revenue. Net sales
are recognized upon transfer of ownership, including passage of title to the customer and transfer of risk of loss related to those products. Transfer of title and risk of loss is based upon shipment under free on board shipping point for most
products or upon receipt by the customer and the agreement with the customer. Tolling revenue refers to the process by which certain customers provide metal to us for conversion to rolled product. We do not take title to the metal and, after the
conversion and return shipment of the rolled product to the customer, we charge them for the value-added conversion cost. Net sales are recorded net of reserves for returns, discounts, and allowances. Provisions for customer specific discounts based
on contractual obligations with certain major customers are recorded as reductions to net sales. Returns and sales allowances are estimated at the time of sale based primarily on historical experience.

Pension/ Other Post-Employment Benefits

Effective April 1, 1999, the Company established a defined benefit pension plan that covers essentially all union employees. The plan provides certain levels of benefits based on years of service and wage levels, but does



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not provide benefits for any prior service. In addition, defined contribution plans for both union and nonunion employees were established. In 2003, the
Company established negotiated defined contributions for certain union employees to multi-employer union pension plans. This was done in exchange for freezing service time and pension factor in the aforementioned defined benefit plan as of the first
quarter of 2004 and eliminating post-retirement benefits for affected employees. The Company also established post-retirement benefit plans for all hourly and salaried employees effective April 1, 1999. The union employees who become eligible
to retire under the defined benefit plan, and are not a part of the unions that have elected the multi-employer option, will retain health benefits and certain other benefits for life. Salaried employees who retire after age 60 with a combined 10
years service with Wise Alloys LLC and the previous owner of the Wise Alloys facilities will be eligible for medical benefits until age 65. The Companys funding policy for these plans is to contribute negotiated amounts to the multi-employer
funds and amounts necessary to meet minimum funding requirements of the Employee Retirement Income Security Act for the defined benefit plans but not to exceed the maximum deductible amount allowed by the Internal Revenue Code. The Company uses
October 31 as the measurement date for all defined benefit plans.

A variance in the assumptions discussed above would have an impact
on the projected benefit obligations, the accrued other post retirement benefit (OPEB) liabilities, and the annual net periodic pension and other postretirement benefit cost. The following table reflects the sensitivities associated with a
hypothetical change in certain assumptions, primarily in the United States (in thousands):



|                                |  |                                          |        |   |                                    |   |       |                                          |  |   |                                    |   |  |   |        |  
|------------------------------- |  | ---------------------------------------- | ------ | - | ---------------------------------- | - | ----- | ---------------------------------------- |  | - | ---------------------------------- | - |  | - | ------ | -
|                                |  | Favorable (Unfavorable)                  |       
|                                |  | 1% Increase                              |        |   | 1% Decrease                        |  
|                                |  | Increase (Decrease)in Benefit Obligation |        |   | Increase (Decrease)in Benefit Cost |   |       | Increase (Decrease)in Benefit Obligation |  |   | Increase (Decrease)in Benefit Cost |  
|Actuarial Assumptions           |  |                                          |        |   |                                    |   |       |                                          |  |   |                                    |   |  |   |        |  
|Pension discount rate:          |  |                                          | 7.25   | % |                                    |   | 7.25  | %                                        |  |   | 5.25                               | % |  |   | 5.25   | %
|Pension                         |  | $                                        | (2,387 | ) |                                    | $ | (216  | )                                        |  | $ | 2,934                              |   |  | $ | 433    |  
|                                |  |                                          |        |  
|OPEB discount rate:             |  |                                          | 7.12   | % |                                    |   | 7.25  | %                                        |  |   | 5.12                               | % |  |   | 5.25   | %
|OPEB                            |  | $                                        | (235   | ) |                                    | $ | 1,651 |                                          |  | $ | 283                                |   |  | $ | (2,160 | )
|                                |  |                                          |        |  
|Expected return on plan assets: |  |                                          | *      |   |                                    |   | 8.00  | %                                        |  |   | *                                  |   |  |   | 6.00   | %
|Pension                         |  | $                                        | *      |   |                                    | $ | (156  | )                                        |  | $ | *                                  |   |  | $ | 156    |  
|OPEB                            |  |                                          | *      |   |                                    |   | *     |                                          |  |   | *                                  |   |  |   | *      |  



|* | Not applicable
|- | --------------

Inventory Valuation

Inventories are valued at the lower of cost or market using the last-in, first-out (LIFO) method. We use the LIFO method since it better matches current
costs with current sales prices in our results of operations. Certain items in inventory may be considered impaired, obsolete or excess, and as such, we may establish an allowance to reduce the carrying value of these items to their net realizable
value. Based on certain assumptions and judgments made from the information available at that time, we determine the amounts in these inventory allowances. If these estimates and related assumptions or the market changes, we may be required to
record additional reserves.

Impairment of Long Lived Assets

The Company continually evaluates whether events and circumstances have occurred that indicate the remaining estimated useful life of long-lived assets
may warrant revision or that the remaining balance may not be recoverable. These factors may include a significant deterioration of operating results, changes in business plans, or changes in anticipated cash flows. When factors indicate that an
asset should be evaluated for possible



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impairment, the Company reviews long-lived assets to assess recoverability from future operations using undiscounted cash flows. Impairments are recognized
in earnings to the extent that the carrying value exceeds fair value.

Derivative Accounting

We have entered into long-term agreements to supply beverage can stock to our largest customers. To reduce the risk of changing prices for purchases and
sales of metal, including firm commitments under these supply agreements, as well as to manage volatile natural gas prices, we use commodity futures and option contracts.

Under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activity, we are required to recognize all derivative instruments as either assets or liabilities on the balance sheet at fair value.
Derivatives that are not designated as hedges must be adjusted to fair value through the statement of operations.

In determining the fair
value of our aluminum futures and options contracts, interest rate caps, and our natural gas caps and swaps, we use market quotes for contracts of similar maturities or management estimates in the absence of available market quotes. We adjust the
market quotes for our aluminum derivative instruments for premiums or discounts for various product grades, locations and the closing times for various terminal markets. Differences in actual market prices from those estimated may cause us to make
adjustments in future periods to reflect these differences.

Allowance for Doubtful Accounts

Our ability to collect outstanding receivables from our customers is critical to our operating performance and cash flows. Typically, our customer
agreements require monthly payments, mitigating the risk of non-collection. We record an allowance for uncollectible accounts based on our ongoing monitoring of our customers credit and on the aging of the receivables. If the financial
condition of our two largest customers were to deteriorate, resulting in an impairment of their ability to make payments, the recorded allowance for doubtful accounts may not be sufficient.

New Accounting Pronouncements

In March 2008, the
FASB issued Statement of Financial Accounting Standard No. 161, Disclosures about Derivative Instruments and Hedging Activitiesan amendment of FASB Statement No. 133. SFAS 161 changes the disclosure requirements for derivative
instruments and hedging activities. The standard is effective for fiscal years and interim periods beginning after November 15, 2008. We are evaluating any potential impact of the adoption of SFAS 161 on our financial statements.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interest in Consolidated Financial Statements, an amendment of Accounting Research
Bulletin No. 51, Consolidated Financial Statements(SFAS 160). SFAS 160 establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income
(loss) attributable to the parent and to the noncontrolling interest, changes in a parents ownership interest and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. SFAS 160 also establishes
reporting requirements that identify and distinguish between the interest of the parent and the interest of the noncontrolling owners. SFAS 160 is effective for fiscal years beginning after December 15, 2008. We are currently evaluating the
effect the adoption of SFAS 160 will have on our Consolidated Financial Statements.

In December 2007, the FASB issued SFAS No. 141
(revised 2007), Business Combinations (SFAS 141(R)), which replaces SFAS No. 141, Business Combinations (SFAS 141). SFAS 141(R) retains the underlying concepts of SFAS 141 in that all
business combinations are still required to be accounted for at fair



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value under the acquisition method of accounting but SFAS 141(R) changes the method of applying the acquisition method in a number of significant
aspects. Acquisition costs will generally be expensed as incurred; noncontrolling interests will be valued at fair value at the acquisition date; in-process research and development will be recorded at fair value as an indefinite-lived
intangible asset at the acquisition date; restructuring costs associated with a business combination will generally be expensed subsequent to the acquisition date; and changes in deferred tax asset valuation allowances and income tax uncertainties
after the acquisition date generally will affect income tax expense. SFAS 141(R) is effective on a prospective basis for all business combinations for which the acquisition date is on or after the beginning of the first annual period subsequent
to December 15, 2008, with the exception of the accounting for valuation allowances on deferred taxes and acquired tax contingencies. SFAS 141(R) amends SFAS No. 109, Accounting for Income Taxes, such that adjustments made
to valuation allowances on deferred taxes and acquired tax contingencies associated with acquisitions that closed prior to the effective date of SFAS 141(R) would also apply the provisions of SFAS 141(R). Early adoption is not
permitted. We are currently evaluating the effects, if any, that SFAS 141(R) may have on our consolidated financial statements.

In
February 2007, the FASB issued SFAS No. 159 (SFAS No. 159), The Fair Value Option for Financial Assets and Financial Liabilities, which provides companies with an option to report selected financial assets and
liabilities at fair value. The new statement establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities and
requires companies to provide additional information that will help investors and other users of financial statements to more easily understand the effect of a companys choice to use fair value on its earnings. The new statement also requires
entities to display the fair value of those assets and liabilities for which the company has chosen to use fair value on the face of the balance sheet. SFAS No. 159 does not eliminate disclosure requirements included in other accounting
standards, including requirements for disclosures about fair value measurements included in SFAS No. 157, Fair Value Measurements, and FASB SFAS No. 107, Disclosures about Fair Value of Financial Instruments. SFAS
No. 159 is effective as of the beginning of an entitys first fiscal year beginning after November 15, 2007. Early adoption is permitted as of the beginning of the previous fiscal year provided that the entity makes that choice in the
first 120 days of that fiscal year and also elects to apply the provisions of SFAS No. 157. The Company is still assessing the impact from adoption of this new accounting pronouncement on the Companys financial position.

In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard No. 157, Fair Value
Measurements (SFAS 157). The standard defines fair value, outlines a framework for measuring fair value, and details the required disclosures about fair value measurements. The standard is effective for fiscal years beginning after
November 15, 2007. In February 2007, the FASB issued FASB Staff Position 157-1 (FSP 157-1) and FASB Staff Position 157-2 (FSP 157-2). FSP 157-1 amends SFAS 157 to exclude FASB Statement No. 13, Accounting for Leases and
other accounting pronouncements that address fair value measurements of leases from the provisions of SFAS 157. FSP 157-2 delays the effective date of SFAS 157 for most nonfinancial assets and nonfinancial liabilities to fiscal years beginning after
November 15, 2008. The Company is still assessing the impact from adoption of this new accounting pronouncement on the Companys financial position and disclosure requirements.



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Contractual Obligations and Other Commitments

The following tables summarize our material contractual obligations as of December 31, 2007.

Payments due by periodDecember 31, 2007

(in thousands)



|                                                |  |       |         |                 |   |          |  |          |        |                 |   |         |  |   |       
|----------------------------------------------- |  | ----- | ------- | --------------- | - | -------- |  | -------- | ------ | --------------- | - | ------- |  | - | ------
|                                                |  | Total |         | Lessthan 1 year |   | 1-3Years |  | 3-5Years |        | Morethan5 Years
|Long-term debt and capital lease obligations(1) |  | $     | 179,301 |                 | $ | 4,641    |  | $        | 24,082 |                 | $ | 150,578 |  | $ |      
|Purchase obligations(2)                         |  |       | 21,394  |                 |   | 21,394   |  |          |       |                 |   |        |  |   |      
|Interest on fixed-rate debt instruments         |  |       | 69,409  |                 |   | 15,499   |  |          | 30,837 |                 |   | 23,073  |  |   |      
|Operating leases                                |  |       | 16,192  |                 |   | 2,233    |  |          | 4,033  |                 |   | 3,772   |  |   | 6,154 
|Pension and OPEB payments                       |  |       | 12,305  |                 |   | 618      |  |          | 1,756  |                 |   | 2,338   |  |   | 7,593 
|                                                |  |       |         |                 |   |          |  |          |        |                 |   |         |  |   |       
|Total contractual obligations                   |  | $     | 298,601 |                 | $ | 44,385   |  | $        | 60,708 |                 | $ | 179,761 |  | $ | 13,747
|                                                |  |       |         |                 |   |          |  |          |        |                 |   |         |  |   |       



|(1) | Long-term obligations include capital lease obligations resulting from the sales-financing agreement executed in 2006 as discussed in Note 5, Financing Arrangements, in the
Notes to Consolidated Financial Statements.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Purchase obligations include an estimate for metal purchases based on price commitments.
|--- | ----------------------------------------------------------------------------------------



|Item 7A. | Quantitative and Qualitative Disclosures About Market Risk
|-------- | ----------------------------------------------------------

The Company is exposed to changes in interest rates as a result of our outstanding debt. A hypothetical 100 basis point increase (or decrease) in interest rates from December 31, 2007 levels would impact our interest expense by
approximately $1.4 million. Certain materials used in the manufacture of our products, most significantly natural gas and aluminum, are subject to price volatility. While future movements in prices of natural gas and aluminum are uncertain, the
Company enters into certain derivative contracts to mitigate the exposure to natural gas and aluminum prices. The Company has not designated these instruments as hedges under SFAS 133 and, accordingly, the mark-to-market impact of these derivatives
is recorded each period in current earnings. A hypothetical increase in aluminum prices only impacts the Company to the extent such increase was to exceed the metal price caps in our agreements with our customers since we pass the metal price along
to our customers. In 2007 we used approximately 4.2 million mmBTUs of natural gas. A hypothetical $1 increase (or decrease) per mmBTU would have impacted our cost of sales by a corresponding $4.4 million.



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|Item 8. | Financial Statements and Supplementary Data.
|------- | --------------------------------------------

The
following consolidated financial statements of the Company and its subsidiaries are included herein as indicated below:

Consolidated
Financial Statements



|                                                                                                    |  |   
|--------------------------------------------------------------------------------------------------- |  | --
|Reports of Independent Registered Public Accounting Firm on Consolidated Financial Statements.      |  | 39
|Consolidated Balance SheetsDecember 31, 2007 and 2006.                                             |  | 40
|Consolidated Statements of Operationsyears ended December 31, 2007, 2006, and 2005.                |  | 41
|Consolidated Statements of Members Equity (Deficit)years ended December 31, 2007, 2006, and 2005. |  | 42
|Consolidated Statements of Cash Flowsyears ended December 31, 2007, 2006, and 2005.                |  | 43
|Notes to Consolidated Financial Statements.                                                         |  | 44



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Report of Independent Registered Public Accounting Firm

To Members of

Wise Metals Group LLC:

In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all
material respects, the financial position of Wise Metals Group LLC and its subsidiaries at December 31, 2007, and the results of their operations and their cash flows for the year ended December 31, 2007 in conformity with accounting
principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule information for the year ended December 31, 2007 listed in the index appearing under Item 15 (a)(2) presents
fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Companys
management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audit. We conducted our audit of these statements in accordance with the standards of the Public Company Accounting
Oversight Board (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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.

As discussed in Note 7 to the consolidated financial statements, the Company changed the manner in
which it accounts for pension and other postretirement plans as of December 31, 2007.

/s/ PricewaterhouseCoopers LLP

Baltimore, Maryland

May 6, 2008



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##### Table of Contents

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM ON CONSOLIDATED FINANCIAL STATEMENTS

Members

Wise Metals Group LLC

We have audited the accompanying consolidated balance sheets of Wise Metals Group LLC (the Company) as of December 31, 2006, and the related consolidated statements
of operations, members equity and cash flows for each of the two years in the period ended December 31, 2006. Our audit also included the financial statement schedule listed in the index at item 15(a). These financial statements and
schedule are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (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. We were not engaged to perform an audit of the Companys internal control over financial reporting. Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly we
express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and
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 Wise Metals Group LLC at December 31, 2006 and 2005, and the consolidated results of its operations and its cash flows for
each of the two years in the period ended December 31, 2006, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/
Ernst & Young LLP

Baltimore, Maryland

April 30,
2007,

except for Notes 2 and 10, included in 2006 Form 10-K/A, as to which the date is

February 29, 2008



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Wise Metals Group LLC

Consolidated Balance Sheets



|                                                                                            |  |                |          |   |      |   |          |  
|------------------------------------------------------------------------------------------- |  | -------------- | -------- | - | ---- | - | -------- | -
|                                                                                            |  | December 31    |         
|                                                                                            |  | 2007           |          |   | 2006 |  
|                                                                                            |  | (In Thousands) |         
|Assets                                                                                      |  |                |          |   |      |   |          |  
|Current assets:                                                                             |  |                |          |   |      |   |          |  
|Cash and cash equivalents                                                                   |  | $              | 1,447    |   |      | $ | 2,280    |  
|Broker deposits                                                                             |  |                | 902      |   |      |   | 7,889    |  
|Accounts receivable, less allowance for doubtful accounts ($531 in 2007 and $1,129 in 2006) |  |                | 77,526   |   |      |   | 104,096  |  
|Inventories, net                                                                            |  |                | 165,791  |   |      |   | 116,902  |  
|Fair value of contracts under SFAS 133                                                      |  |                | 4,153    |   |      |   | 3,897    |  
|Other current assets                                                                        |  |                | 3,765    |   |      |   | 5,933    |  
|                                                                                            |  |                |          |   |      |   |          |  
|Total current assets                                                                        |  |                | 253,584  |   |      |   | 240,997  |  
|Non-current assets:                                                                         |  |                |          |   |      |   |          |  
|Property and equipment, net                                                                 |  |                | 92,184   |   |      |   | 84,589   |  
|Other assets                                                                                |  |                | 7,368    |   |      |   | 8,724    |  
|Intangible assets                                                                           |  |                |         |   |      |   | 326      |  
|Goodwill                                                                                    |  |                | 283      |   |      |   | 283      |  
|                                                                                            |  |                |          |   |      |   |          |  
|Total non-current assets                                                                    |  |                | 99,835   |   |      |   | 93,922   |  
|                                                                                            |  |                |          |   |      |   |          |  
|Total assets                                                                                |  | $              | 353,419  |   |      | $ | 334,919  |  
|                                                                                            |  |                |          |   |      |   |          |  
|                                                                                            | 
|                                                                                            |  | December 31    |         
|                                                                                            |  | 2007           |          |   | 2006 |  
|                                                                                            |  | (In Thousands) |         
|Liabilities and members deficit                                                            |  |                |          |   |      |   |          |  
|Current liabilities:                                                                        |  |                |          |   |      |   |          |  
|Accounts payable                                                                            |  | $              | 103,235  |   |      | $ | 71,131   |  
|Current portion of long-term debt and capital lease obligations                             |  |                | 4,276    |   |      |   | 1,759    |  
|Borrowings under revolving credit facility                                                  |  |                | 147,778  |   |      |   | 177,187  |  
|Fair value of contracts under SFAS 133                                                      |  |                | 353      |   |      |   | 10,312   |  
|Accrued expenses, payroll and other                                                         |  |                | 15,557   |   |      |   | 14,526   |  
|                                                                                            |  |                |          |   |      |   |          |  
|Total current liabilities                                                                   |  |                | 271,199  |   |      |   | 274,915  |  
|Non-current liabilities:                                                                    |  |                |          |   |      |   |          |  
|Term loan and capital lease obligations, less current portion                               |  |                | 24,463   |   |      |   | 15,854   |  
|Senior notes                                                                                |  |                | 150,000  |   |      |   | 150,000  |  
|Accrued pension and other post retirement obligations                                       |  |                | 3,284    |   |      |   | 14,947   |  
|Other liabilities                                                                           |  |                | 1,616    |   |      |   | 639      |  
|                                                                                            |  |                |          |   |      |   |          |  
|Total non-current liabilities                                                               |  |                | 179,363  |   |      |   | 181,440  |  
|Commitments and contingencies (see Note 9)                                                  |  |                |         |   |      |   |         |  
|Redeemable preferred membership interest (liquidation preference of $76,875)                |  |                | 75,828   |   |      |   |         |  
|Members deficit:                                                                           |  |                |          |   |      |   |          |  
|Members deficit                                                                            |  |                | (176,557 | ) |      |   | (119,145 | )
|Accumulated other comprehensive income (loss)                                               |  |                | 3,586    |   |      |   | (2,291   | )
|                                                                                            |  |                |          |   |      |   |          |  
|Total members deficit                                                                      |  |                | (172,971 | ) |      |   | (121,436 | )
|                                                                                            |  |                |          |   |      |   |          |  
|Total liabilities, redeemable preferred membership interest, and members deficit           |  | $              | 353,419  |   |      | $ | 334,919  |  
|                                                                                            |  |                |          |   |      |   |          |  

See accompanying notes.



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Wise Metals Group LLC

Consolidated Statements of Operations



|                                                 |  |                         |         |   |      |   |           |      |  |   |         |  
|------------------------------------------------ |  | ----------------------- | ------- | - | ---- | - | --------- | ---- |  | - | ------- | -
|                                                 |  | Years ended December 31 |        
|                                                 |  | 2007                    |         |   | 2006 |   |           | 2005 | 
|                                                 |  | (In Thousands)          |        
|Net sales                                        |  | $                       | 986,659 |   |      | $ | 1,038,641 |      |  | $ | 907,736 |  
|Cost of sales                                    |  |                         | 997,558 |   |      |   | 1,054,135 |      |  |   | 905,182 |  
|                                                 |  |                         |         |   |      |   |           |      |  |   |         |  
|Gross (loss) profit                              |  |                         | (10,899 | ) |      |   | (15,494   | )    |  |   | 2,554   |  
|Operating expenses:                              |  |                         |         |   |      |   |           |      |  |   |         |  
|Selling, general and administrative              |  |                         | 15,303  |   |      |   | 11,557    |      |  |   | 10,728  |  
|                                                 |  |                         |         |   |      |   |           |      |  |   |         |  
|Operating loss                                   |  |                         | (26,202 | ) |      |   | (27,051   | )    |  |   | (8,174  | )
|Other income (expense):                          |  |                         |         |   |      |   |           |      |  |   |         |  
|Interest expense and fees                        |  |                         | (35,651 | ) |      |   | (32,679   | )    |  |   | (25,110 | )
|Unrealized gain (loss) on derivative instruments |  |                         | 8,352   |   |      |   | (24,126   | )    |  |   | 11,666  |  
|                                                 |  |                         |         |   |      |   |           |      |  |   |         |  
|                                                 |  |                         | (27,299 | ) |      |   | (56,805   | )    |  |   | (13,444 | )
|                                                 |  |                         |         |   |      |   |           |      |  |   |         |  
|Net loss                                         |  |                         | (53,501 | ) |      |   | (83,856   | )    |  |   | (21,618 | )
|                                                 |  |                         |         |   |      |   |           |      |  |   |         |  

See accompanying notes.



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Wise Metals Group LLC

Consolidated Statements of Members Equity (Deficit)



|                                                      |  |                                |          |   |                                      |   |        |       |  |   |          |  
|----------------------------------------------------- |  | ------------------------------ | -------- | - | ------------------------------------ | - | ------ | ----- |  | - | -------- | -
|                                                      |  | CommonMembersEquity (Deficit) |          |   | AccumulatedOtherComprehensiveDeficit |   |        | Total | 
|                                                      |  | (In Thousands)                 |         
|Balance at January 1, 2005                            |  | $                              | (12,765  | ) |                                      | $ |       |       |  | $ | (12,765  | )
|Components of Comprehensive loss                      |  |                                |          |   |                                      |   |        |       |  |   |          |  
|Minimum pension liability adjustment                  |  |                                |         |   |                                      |   | (1,841 | )     |  |   | (1,841   | )
|2005 net loss                                         |  |                                | (21,618  | ) |                                      |   |       |       |  |   | (21,618  | )
|                                                      |  |                                |          |   |                                      |   |        |       |  |   |          |  
|Total Comprehensive loss                              |  |                                |         |   |                                      |   |       |       |  |   | (23,459  | )
|                                                      |  |                                |          |   |                                      |   |        |       |  |   |          |  
|Repurchase of common members equity                  |  |                                | (906     | ) |                                      |   |       |       |  |   | (906     | )
|                                                      |  |                                |          |   |                                      |   |        |       |  |   |          |  
|Balance at December 31, 2005                          |  |                                | (35,289  | ) |                                      |   | (1,841 | )     |  |   | (37,130  | )
|                                                      |  |                                |          |   |                                      |   |        |       |  |   |          |  
|Components of Comprehensive loss                      |  |                                |          |   |                                      |   |        |       |  |   |          |  
|Minimum pension liability adjustment                  |  |                                |         |   |                                      |   | (450   | )     |  |   | (450     | )
|2006 net loss                                         |  |                                | (83,856  | ) |                                      |   |       |       |  |   | (83,856  | )
|                                                      |  |                                |          |   |                                      |   |        |       |  |   |          |  
|Total Comprehensive loss                              |  |                                |         |   |                                      |   |       |       |  |   | (84,306  | )
|                                                      |  |                                |          |   |                                      |   |        |       |  |   |          |  
|Balance at December 31, 2006                          |  |                                | (119,145 | ) |                                      |   | (2,291 | )     |  |   | (121,436 | )
|                                                      |  |                                |          |   |                                      |   |        |       |  |   |          |  
|Components of Comprehensive loss                      |  |                                |          |   |                                      |   |        |       |  |   |          |  
|Minimum pension liability adjustment                  |  |                                |         |   |                                      |   | 1,023  |       |  |   | 1,023    |  
|2007 net loss                                         |  |                                | (53,501  | ) |                                      |   |       |       |  |   | (53,501  | )
|                                                      |  |                                |          |   |                                      |   |        |       |  |   |          |  
|Total Comprehensive loss                              |  |                                |         |   |                                      |   |       |       |  |   | (52,478  | )
|                                                      |  |                                |          |   |                                      |   |        |       |  |   |          |  
|Accretion of redeemable preferred membership interest |  |                                | (1,911   | ) |                                      |   |        |       |  |   | (1,911   | )
|Adjustment to initially apply FASB statement No. 158  |  |                                |         |   |                                      |   | 4,854  |       |  |   | 4,854    |  
|Repurchase of common members equity                  |  |                                | (2,000   | ) |                                      |   |       |       |  |   | (2,000   | )
|                                                      |  |                                |          |   |                                      |   |        |       |  |   |          |  
|Balance at December 31, 2007                          |  | $                              | (176,557 | ) |                                      | $ | 3,586$ |       |  |   | (172,971 | )
|                                                      |  |                                |          |   |                                      |   |        |       |  |   |          |  



See accompanying notes.



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Wise Metals Group LLC

Consolidated Statements of Cash Flows



|                                                                            |  |                         |         |   |      |   |         |      |  |   |         |  
|--------------------------------------------------------------------------- |  | ----------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                                                            |  | Years ended December 31 |        
|                                                                            |  | 2007                    |         |   | 2006 |   |         | 2005 | 
|                                                                            |  | (In Thousands)          |        
|Cash flows from operating activities                                        |  |                         |         |   |      |   |         |      |  |   |         |  
|Net loss                                                                    |  | $                       | (53,501 | ) |      | $ | (83,856 | )    |  | $ | (21,618 | )
|Adjustments to reconcile net loss to net cash used in operating activities: |  |                         |         |   |      |   |         |      |  |   |         |  
|Depreciation and amortization                                               |  |                         | 13,721  |   |      |   | 12,580  |      |  |   | 13,355  |  
|Gain on sale of assets                                                      |  |                         | (371    | ) |      |   |        |      |  |   |        |  
|Amortization of deferred financing fees                                     |  |                         | 2,029   |   |      |   | 1,698   |      |  |   | 1,208   |  
|LIFO provision (liquidation)                                                |  |                         | (12,962 | ) |      |   | 23,577  |      |  |   | 2,318   |  
|Employee retirement benefits                                                |  |                         | (2,559  | ) |      |   | 3,488   |      |  |   | 3,216   |  
|Bad debt expense (benefit)                                                  |  |                         | (598    | ) |      |   | 69      |      |  |   | 860     |  
|Unrealized (gain) loss on contracts under SFAS 133                          |  |                         | (8,352  | ) |      |   | 24,126  |      |  |   | (11,666 | )
|Changes in operating assets and liabilities:                                |  |                         |         |   |      |   |         |      |  |   |         |  
|Broker deposits                                                             |  |                         | 6,987   |   |      |   | (7,639  | )    |  |   |        |  
|Accounts receivable                                                         |  |                         | 27,168  |   |      |   | (30,839 | )    |  |   | (27,850 | )
|Inventories                                                                 |  |                         | (35,927 | ) |      |   | 1,672   |      |  |   | 31,340  |  
|Other current assets                                                        |  |                         | 2,168   |   |      |   | (1,554  | )    |  |   | (1,889  | )
|Accounts payable                                                            |  |                         | 32,105  |   |      |   | 16,638  |      |  |   | (3,362  | )
|Accrued expenses, payroll and other                                         |  |                         | (2,943  | ) |      |   | (7,135  | )    |  |   | (7,471  | )
|                                                                            |  |                         |         |   |      |   |         |      |  |   |         |  
|Net cash used in operating activities                                       |  |                         | (33,035 | ) |      |   | (47,175 | )    |  |   | (21,559 | )
|                                                                            |  |                         |        
|Cash flows from investing activities                                        |  |                         |         |   |      |   |         |      |  |   |         |  
|Capital expenditures                                                        |  |                         | (22,247 | ) |      |   | (10,612 | )    |  |   | (14,537 | )
|Proceeds from sale of assets                                                |  |                         | 1,302   |   |      |   |        |      |  |   |        |  
|                                                                            |  |                         |         |   |      |   |         |      |  |   |         |  
|Net cash used in investing activities                                       |  |                         | (20,945 | ) |      |   | (10,612 | )    |  |   | (14,537 | )
|                                                                            |  |                         |        
|Cash flows from financing activities                                        |  |                         |         |   |      |   |         |      |  |   |         |  
|Net (repayments) issuance of short-term borrowings                          |  |                         | (29,409 | ) |      |   | 39,739  |      |  |   | 36,003  |  
|Payments of financing costs                                                 |  |                         | (1,570  | ) |      |   | (1,156  | )    |  |   |        |  
|Proceeds from sale-financing transaction                                    |  |                         | 14,950  |   |      |   | 14,950  |      |  |   |        |  
|(Payments on) proceeds from long-term obligations                           |  |                         | (3,824  | ) |      |   | 78      |      |  |   | (214    | )
|Proceeds from the issuance of redeemable preferred membership interest      |  |                         | 75,000  |   |      |   |        |      |  |   |        |  
|Purchase of members equity                                                 |  |                         | (2,000  | ) |      |   |        |      |  |   | (906    | )
|                                                                            |  |                         |         |   |      |   |         |      |  |   |         |  
|Net cash provided by financing activities                                   |  |                         | 53,147  |   |      |   | 53,611  |      |  |   | 34,883  |  
|                                                                            |  |                         |         |   |      |   |         |      |  |   |         |  
|Net decrease in cash and cash equivalents                                   |  |                         | (833    | ) |      |   | (4,176  | )    |  |   | (1,213  | )
|Cash and cash equivalents at beginning of year                              |  |                         | 2,280   |   |      |   | 6,456   |      |  |   | 7,669   |  
|                                                                            |  |                         |         |   |      |   |         |      |  |   |         |  
|Cash and cash equivalents at end of year                                    |  | $                       | 1,447   |   |      | $ | 2,280   |      |  | $ | 6,456   |  
|                                                                            |  |                         |        
|Supplemental cash flow information:                                         |  |                         |         |   |      |   |         |      |  |   |         |  
|Interest payments (net of amount capitalized)                               |  | $                       | 34,054  |   |      | $ | 30,906  |      |  | $ | 23,902  |  
|Accretion of redeemable preferred membership interest                       |  |                         | 1,911   |   |      |   | 0       |      |  |   | 0       |  

See accompanying notes.



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##### Table of Contents

WISE METALS GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2007

(Dollars
in Thousands)

1. Organization and Basis of Presentation

Wise Metals Group LLC is a holding company formed for the purpose of managing the operations of Wise Alloys LLC, Wise Recycling LLC and Listerhill Total Maintenance Company LLC (collectively, the Company). Wise Alloys
LLC (Alloys) manufactures and sells aluminum can stock and related aluminum products primarily to aluminum can producers. Wise Recycling LLC is engaged in the recycling and sale of scrap aluminum and other non-ferrous metals. Listerhill Total
Maintenance Company LLC (TMC) specializes in providing maintenance, repairs and fabrication to manufacturing and industrial plants all over the world ranging from small onsite repairs to complete turn-key maintenance.

The consolidated financial statements include the accounts of Wise Metals Group LLC and its subsidiaries. Intercompany transactions have been eliminated in
consolidation.

2. Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents include all
highly liquid investments with a maturity date of three months or less when purchased. Included in accounts payable were book overdraft amounts of $4,329 and $3,875 at December 31, 2007 and 2006, respectively.

Broker deposits

Broker deposits generally consist of cash on deposit
with brokers to support lines of credit associated with the Companys derivative and hedging activity. Broker deposits also include restricted cash of $250 with financial institutions.

Derivatives and Hedging Activity

The Company has entered into
long-term contracts to supply can stock to its largest customers (see Note 9). To reduce the risk of changing prices for purchases and sales of metal, including firm commitments under these supply contracts, the Company uses commodity futures and
option contracts. In addition, the Company holds natural gas futures.

Under Financial Accounting Standards Board (FASB) Statement No. 133,
Accounting for Derivative Instruments and Hedging Activities(SFAS 133), companies are required to recognize all derivative instruments as either assets or liabilities on the balance sheet at fair value. Derivatives that are not designated as
hedges must be adjusted to fair value through mark-to-market adjustments included in the statement of operations. No derivatives were designated as hedges. In determining fair value, the Company uses market quotes for contracts of similar maturity
or management estimates in the absence of available market quotes.



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##### Table of Contents

WISE METALS GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2007

(Dollars in Thousands)



A summary of the Companys derivative instruments and related activity at December 31, 2007 and 2006 , and
for the years ended December 31, 2007, 2006 and 2005 is as follows:



|                                     |  |           |       |      |                |   |           |  |   |                |   |  |                      |         |   |  |   |        |  
|------------------------------------ |  | --------- | ----- | ---- | -------------- | - | --------- |  | - | -------------- | - |  | -------------------- | ------- | - |  | - | ------ | -
|                                     |  | 2007      |       | 2006 |                |   | 2005      | 
|Description of Derivative Instrument |  | FairValue |       |      | UnrealizedGain |   | FairValue |  |   | UnrealizedLoss |   |  | UnrealizedGain(Loss) |        
|Aluminum futures and options         |  | $         | 4,153 |      |                | $ | 5,127     |  | $ | (2,837         | ) |  | $                    | (20,888 | ) |  | $ | 11,693 |  
|Natural gas caps and swaps           |  |           | (353  | )    |                |   | 3,225     |  |   | (3,578         | ) |  |                      | (3,238  | ) |  |   | (27    | )
|                                     |  |           |       |      |                |   |           |  |   |                |   |  |                      |         |   |  |   |        |  
|                                     |  | $         | 3,800 |      |                | $ | 8,352     |  | $ | (6,415         | ) |  | $                    | (24,126 | ) |  | $ | 11,666 |  
|                                     |  |           |       |      |                |   |           |  |   |                |   |  |                      |         |   |  |   |        |  

In connection with the Companys futures activity, the Company maintains lines of credit with brokers to
cover unrealized losses on futures contracts and uses options to manage price exposure with respect to firm commitments to purchase or sell aluminum. As of December 31, 2007 and 2006, the Company had $0.6 million and $7.6 million, respectively,
on deposit with brokers, which is included on the balance sheet as broker deposits.

Accounts Receivable

The Companys accounts receivable consist of amounts due from customers throughout the United States, Canada, Mexico and the Middle East. Collateral is generally not
required.

The Company provides an allowance for doubtful accounts receivable by a charge to operations in amounts equal to the estimated losses expected
to be incurred in collection of the accounts. The estimated losses are based on historical collection experience and a review of the current status of the existing receivables. Customer accounts are written off against the allowance for doubtful
accounts when an account is determined to be uncollectible.

Concentration of Risk

The Company transacts a significant portion of its business, consisting of both sales and purchases of aluminum, with large aluminum producers in the United States numbering fewer than 10. Management believes that the
loss of any one of these large aluminum producers, whether as a customer or a vendor, would not have a significant long-term impact upon the Companys operations, in that another producer would absorb the business that the Company transacts
with any lost producer.

During the three years in the period ended December 31, 2007, the Company earned revenues from two customers that
individually exceeded 10% of all revenues. These customers also comprised a significant amount of accounts receivable at December 31, 2007 and 2006, as follows:



|           |  |          |         |                    |   |          |  |                    |         |          |   |        |  |   |        
|---------- |  | -------- | ------- | ------------------ | - | -------- |  | ------------------ | ------- | -------- | - | ------ |  | - | -------
|           |  | 2007     |         | 2006               |   | 2005    
|           |  | Revenues |         | AccountsReceivable |   | Revenues |  | AccountsReceivable |         | Revenues
|Customer A |  | $        | 486,273 |                    | $ | 37,523   |  | $                  | 555,280 |          | $ | 88,423 |  | $ | 517,568
|Customer B |  |          | 102,292 |                    |   | 10,391   |  |                    | 160,683 |          |   | 2,910  |  |   | 176,558

During the years ended December 31, 2007, 2006 and 2005, the Company purchased approximately 30%, 26%, and
31%, respectively, of its raw materials from two major suppliers.



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##### Table of Contents

WISE METALS GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2007

(Dollars in Thousands)



The Company is exposed to credit loss in the event of nonperformance of counterparties to open positions, commodity
futures, and option contracts. This exposure is limited to those instances where the Company is in a net unrealized gain position. This credit risk is managed by entering into arrangements with counterparties meeting the credit standards and by
monitoring position limits.

Certain employees of the Company are covered under collective bargaining agreements. Union contracts covering all union
employees representing approximately 71% of all employees extend through November 1, 2012.

Inventories, net

The Company uses the last-in, first-out (LIFO) method of accounting for the manufacturing inventories. Supplies inventory is valued on an average cost basis. Inventories
maintained by Recycling that consist solely of raw materials are valued on a first-in, first-out (FIFO) basis.

Property and Equipment

Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets
(buildings40 years, machinery and equipment1 to 30 years, and furniture and fixtures5 to 10 years). Maintenance and repair costs are charged to operations as incurred, major renewals and betterments are capitalized. Upon retirement
or disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in selling, general and administrative expenses for that period. Major additions and
betterments are capitalized to the asset accounts while maintenance and repairs, which do not improve or extend the lives of assets, are expensed as incurred.

Impairment of Long-Lived Assets

The Company continually evaluates whether events and circumstances have occurred that indicate the
remaining estimated useful life of long-lived assets may warrant revision or that the remaining balance may not be recoverable. These factors may include a significant deterioration of operating results, changes in business plans, or changes in
anticipated cash flows. When factors indicate that an asset should be evaluated for possible impairment, the Company reviews long-lived assets to assess recoverability from future operations using undiscounted cash flows. Impairments are recognized
in earnings to the extent that the carrying value exceeds fair value.

Pension & Other Post Retirement Benefits

Effective April 1, 1999, the Company established a defined benefit pension plan that covers essentially all union employees. The plan provides certain levels of
benefits based on years of service and wage levels, but does not provide benefits for any prior service. In addition, defined contribution plans for both union and nonunion employees were established. In 2003, the Company established negotiated
defined contributions for certain union employees to multi-employer union pension plans. This was done in exchange for freezing service time and pension factor in the aforementioned defined benefit plan as of the first quarter of 2004 and
eliminating post-retirement benefits for affected employees. The Company also established post-retirement benefit plans for all hourly and salaried employees effective April 1, 1999. The union employees who become eligible to retire under the
defined benefit plan, and are not a part of the unions that have elected the multi-employer option, will retain



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##### Table of Contents

WISE METALS GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2007

(Dollars in Thousands)



health benefits and certain other benefits for life. Salaried employees who retire after age 60 with a combined 10 years service with Wise Alloys LLC and the
previous owner of the Wise Alloys facilities will be eligible for medical benefits until age 65. The Companys funding policy for these plans is to contribute negotiated amounts to the multi-employer funds and amounts necessary to meet minimum
funding requirements of the Employee Retirement Income Security Act for the defined benefit plans but not to exceed the maximum deductible amount allowed by the Internal Revenue Code. The Company uses October 31 as the measurement date for all
defined benefit plans. The Company plans to adopt a December 31 measurement date for fiscal year 2008.

Deferred Financing Costs

The Company has approximately $6,745 and $7,240 of unamortized deferred financing costs at December 31, 2007 and 2006, respectively. These costs are being amortized
over the life of the related secured credit facilities (see Note 5) and are included in other non-current assets in the consolidated balance sheets. Accumulated amortization is $5,679 and $3,614 at December 31, 2007 and 2006, respectively.

Revenue Recognition

The Company recognizes revenue
pursuant to applicable accounting standards, including the SEC Staff Accounting Bulletin (SAB) No. 104, Revenue Recognition.

Net sales
consist of both net sales and tolling revenue. Net sales are recognized upon transfer of ownership, including passage of title to the customer and transfer of risk of loss related to those products. Transfer of title and risk of loss is based upon
shipment under free on board shipping point for most products or upon receipt by the customer and the agreement with the customer. Tolling revenue refers to the process by which certain customers provide metal to us for conversion to rolled product.
We do not take title to the metal and, after the conversion and return shipment of the rolled product to the customer, we charge them for the value-added conversion cost.

Net sales are recorded net of reserves for returns, discounts, and allowances. Provisions for customer specific discounts based on contractual obligations with certain major customers are recorded as reductions to net
sales. Returns and sales allowances are estimated at the time of sale based primarily on historical experience.

Shipping and Handling Costs

Shipping and handling costs incurred by the Company amounted to $23,880, $25,608 and $23,892 for the years ended December 31, 2007, 2006, and 2005,
respectively, and are recorded as a component of cost of sales in the consolidated statements of operations.

Income Taxes

Wise Metals Group LLC and subsidiaries are taxed as partnerships under Subchapter K of the Internal Revenue Code. Therefore, the results of the Companys operations
are included in the taxable income of the individual shareholders. As a result, no provision for federal income taxes has been included in the consolidated financial statements.

At a minimum, the Company intends to make cash distributions to its shareholders in the amount necessary for its shareholders to pay their individual taxes associated with the Companys taxable income.



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##### Table of Contents

WISE METALS GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2007

(Dollars in Thousands)



New Accounting Pronouncements

In March 2008, the FASB issued Statement of Financial Accounting Standard No. 161, Disclosures about Derivative Instruments and Hedging Activitiesan amendment of FASB Statement No. 133. SFAS 161
changes the disclosure requirements for derivative instruments and hedging activities. The standard is effective for fiscal years and interim periods beginning after November 15, 2008. We are evaluating any potential impact of the adoption of
SFAS 161 on our financial statements.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interest in Consolidated Financial
Statements, an amendment of Accounting Research Bulletin No. 51, Consolidated Financial Statements(SFAS 160). SFAS 160 establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the
parent, the amount of consolidated net income (loss) attributable to the parent and to the noncontrolling interest, changes in a parents ownership interest and the valuation of retained noncontrolling equity investments when a subsidiary is
deconsolidated. SFAS 160 also establishes reporting requirements that identify and distinguish between the interest of the parent and the interest of the noncontrolling owners. SFAS 160 is effective for fiscal years beginning after December 15,
2008. We are evaluating any potential impact of the adoption of SFAS 160 on our financial statements.

In December 2007, the FASB issued SFAS No. 141
(revised 2007), Business Combinations (SFAS 141(R)), which replaces SFAS No. 141, Business Combinations (SFAS 141). SFAS 141(R) retains the underlying concepts of SFAS 141 in that all
business combinations are still required to be accounted for at fair value under the acquisition method of accounting but SFAS 141(R) changes the method of applying the acquisition method in a number of significant aspects. Acquisition costs
will generally be expensed as incurred; noncontrolling interests will be valued at fair value at the acquisition date; in-process research and development will be recorded at fair value as an indefinite-lived intangible asset at the acquisition
date; restructuring costs associated with a business combination will generally be expensed subsequent to the acquisition date; and changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally
will affect income tax expense. SFAS 141(R) is effective on a prospective basis for all business combinations for which the acquisition date is on or after the beginning of the first annual period subsequent to December 15, 2008, with the
exception of the accounting for valuation allowances on deferred taxes and acquired tax contingencies. SFAS 141(R) amends SFAS No. 109, Accounting for Income Taxes, such that adjustments made to valuation allowances on deferred
taxes and acquired tax contingencies associated with acquisitions that closed prior to the effective date of SFAS 141(R) would also apply the provisions of SFAS 141(R). Early adoption is not permitted. We are evaluating any potential
impact of the adoption of SFAS 141 (R) on our financial statements.

In February 2007, the FASB issued SFAS No. 159 (SFAS
No. 159), The Fair Value Option for Financial Assets and Financial Liabilities, which provides companies with an option to report selected financial assets and liabilities at fair value. The new statement establishes presentation
and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities and requires companies to provide additional information that will help
investors and other users of financial statements to more easily understand the effect of a companys choice to use fair value on its earnings. The new statement also requires entities to display the fair value of those assets and liabilities
for which the company has chosen to use fair value on the face of the balance sheet. SFAS No. 159 does not eliminate disclosure requirements included in other accounting standards, including requirements for disclosures about fair value
measurements included in SFAS No. 157, Fair Value Measurements, and FASB SFAS No. 107, Disclosures about Fair Value of Financial Instruments. SFAS No. 159 is effective as of the beginning of an entitys first fiscal
year beginning after November 15, 2007. Early adoption is permitted as of the beginning of



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##### Table of Contents

WISE METALS GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2007

(Dollars in Thousands)



the previous fiscal year provided that the entity makes that choice in the first 120 days of that fiscal year and also elects to apply the provisions of
SFAS No. 157. We are evaluating any potential impact of the adoption of SFAS 159 on our financial statements.

In September 2006, the Financial
Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard No. 157, Fair Value Measurements (SFAS 157). The standard defines fair value, outlines a framework for measuring fair value, and details the
required disclosures about fair value measurements. The standard is effective for fiscal years beginning after November 15, 2007. In February 2007, the FASB issued FASB Staff Position 157-1 (FSP 157-1) and FASB Staff Position 157-2 (FSP 157-2).
FSP 157-1 amends SFAS 157 to exclude FASB Statement No. 13, Accounting for Leases and other accounting pronouncements that address fair value measurements of leases from the provisions of SFAS 157. FSP 157-2 delays the
effective date of SFAS 157 for most nonfinancial assets and nonfinancial liabilities to fiscal years beginning after November 15, 2008. We are evaluating any potential impact of the adoption of SFAS 157 on our financial statements.

Reclassification

For comparability, the 2006 financial statements
reflect reclassifications where appropriate to conform to the financial statements presentation used in 2007.

3. Inventories, net

Inventories consisted of the following:



|                                |  |             |         |   |      |   |         |  
|------------------------------- |  | ----------- | ------- | - | ---- | - | ------- | -
|                                |  | December 31 |        
|                                |  | 2007        |         |   | 2006 |  
|Manufacturing inventories:      |  |             |         |   |      |   |         |  
|Raw materials                   |  | $           | 89,486  |   |      | $ | 66,743  |  
|Work in progress                |  |             | 72,986  |   |      |   | 65,832  |  
|Finished goods                  |  |             | 44,853  |   |      |   | 39,384  |  
|LIFO reserve                    |  |             | (60,154 | ) |      |   | (73,117 | )
|                                |  |             |         |   |      |   |         |  
|Total manufacturing inventories |  |             | 147,171 |   |      |   | 98,842  |  
|Supplies inventory              |  |             | 18,620  |   |      |   | 18,060  |  
|                                |  |             |         |   |      |   |         |  
|Total inventories, net          |  | $           | 165,791 |   |      | $ | 116,902 |  
|                                |  |             |         |   |      |   |         |  

The Company uses the last-in, first-out (LIFO) method of accounting for the manufacturing inventories. If the
first-in, first-out (FIFO) method had been used at December 31, 2007, inventories would have been approximately $60,154 higher and at December 31, 2006, inventories would have been approximately $73,117 higher. During 2007, reductions in
LIFO inventories resulted in liquidations of LIFO inventory layers carried at lower costs prevailing in prior years as compared with costs of current year purchases. The income statement impact of the LIFO liquidation was $12,962 for the year ended
December 31, 2007.

Supplies inventory is valued on an average cost basis. Inventories maintained by Recycling, total $7,580 and $6,789 at
December 31, 2007 and 2006, respectively, and are comprised solely of raw materials, are valued on a FIFO basis.



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##### Table of Contents

WISE METALS GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2007

(Dollars in Thousands)



4. Property and Equipment, net

Major classes of property and equipment are:



|                                 |  |             |         |   |      |   |         |  
|-------------------------------- |  | ----------- | ------- | - | ---- | - | ------- | -
|                                 |  | December 31 |        
|                                 |  | 2007        |         |   | 2006 |  
|Land, buildings and improvements |  | $           | 11,434  |   |      | $ | 12,129  |  
|Machinery and equipment          |  |             | 138,845 |   |      |   | 129,352 |  
|Furniture, fixtures and other    |  |             | 3,071   |   |      |   | 3,205   |  
|Construction in progress         |  |             | 15,827  |   |      |   | 12,372  |  
|                                 |  |             |         |   |      |   |         |  
|Subtotal property and equipment  |  |             | 169,177 |   |      |   | 157,058 |  
|Accumulated depreciation         |  |             | (76,993 | ) |      |   | (72,469 | )
|                                 |  |             |         |   |      |   |         |  
|Property and equipment, net      |  | $           | 92,184  |   |      | $ | 84,589  |  
|                                 |  |             |         |   |      |   |         |  

As a result of the sale-financing transaction discussed in Note 5, as of December 31, 2007 the Company has
approximately $26.9 million in assets subject to a capital lease. Depreciation expense for the years ended December 31, 2007, 2006 and 2005 was $13,721, $12,580 and $13,355, respectively.

5. Financing Arrangements

Debt consists of the following:



|                                                  |  |             |          |   |      |   |          |  
|------------------------------------------------- |  | ----------- | -------- | - | ---- | - | -------- | -
|                                                  |  | December 31 |         
|                                                  |  | 2007        |          |   | 2006 |  
|Revolving and secured credit facility             |  | $           | 147,778  |   |      | $ | 177,187  |  
|Senior 10.25% notes due 2012                      |  |             | 150,000  |   |      |   | 150,000  |  
|Other notes payable and capital lease obligations |  |             | 28,739   |   |      |   | 17,613   |  
|                                                  |  |             |          |   |      |   |          |  
|                                                  |  |             | 326,517  |   |      |   | 344,800  |  
|Less current portion                              |  |             | (152,054 | ) |      |   | (178,946 | )
|                                                  |  |             |          |   |      |   |          |  
|                                                  |  | $           | 174,463  |   |      | $ | 165,854  |  
|                                                  |  |             |          |   |      |   |          |  

Revolving and secured credit facility

Our total available credit under our revolving credit facility is $207.5 million which represents our primary source of liquidity for our working capital needs. At
December 31 2007, the Company had drawn $147.8 million on this facility. Available borrowings under the revolving credit agreement at December 31, 2007 were $25.0 million. In addition, we had approximately $1.7 million of outstanding
letters of credit against our $207.5 million revolving credit line. On April 25, 2008, the line was increased to $278 million and the term was extended to May 5, 2010. Additionally, the covenant requiring that the Company furnish to the
agent under the credit facility, audited and unaudited consolidated financial statements of the Company and its subsidiaries within 90 days of the end of the fiscal year ended December 31, 2007 was waived. Our ability to borrow the full
available amount of our credit facility is limited by the available borrowing base under the revolving credit facility as determined based on a borrowing base formula which relates to the collateral value of trade receivables and inventory on a
basis approximating the lower of current cost (on a first-in first-out or FIFO basis) or fair market value. This borrowing base is then compared to the outstanding loan balance (including outstanding letters of credit) to determine a net amount
available for additional borrowings (Availability).



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##### Table of Contents

WISE METALS GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2007

(Dollars in Thousands)



At December 31, 2007, the interest rate on the revolving line of credit is a variable rate of prime plus a range
of 0% to 0.50% or LIBOR plus a range of 2.25% to 2.75%. The prime rate at December 31, 2007 was 7.33% and LIBOR was 4.46%. Please see Footnote No. 11 to the Consolidated Financial Statements for additional information.

Effective December 31, 2006, the Company completed an amendment to its revolving credit facility. The amendment was to reset certain covenant levels based on the
Companys most recent financial projections and results and as noted within our credit agreement. As of and subsequent to December 31, 2006, the Company must either meet the minimum Adjusted EBITDA levels as noted within our credit
agreement or the Adjusted Excess Availability must be equal to or greater than $20 million for each of the ten (10) consecutive days immediately preceding the last day of the month. As of the December 31, 2007 and 2006, the Company was in
compliance with the debt covenants under this agreement, as amended.

Effective July 31, 2007, the Company completed an amendment to its revolving
credit facility that reset certain covenant levels. Pursuant to the amendment, as of and subsequent to July 31, 2007, the Company must either meet the minimum Adjusted EBITDA levels (which represents EBITDA, defined as earnings before income
taxes, interest expense and fees, net, and depreciation and amortization, adjusted to exclude early extinguishment of debt, income from affiliate, nonrecurring charges, severance charges and credits, LIFO adjustments, cumulative effect of change in
accounting principle and mark-to-market adjustment for contracts under SFAS No. 133) or the Adjusted Excess Availability as defined within the credit agreement must be equal to or greater than $20 million for each of the ten
(10) consecutive days immediately preceding the last day of the month.

Senior notes

The Company issued $150 million in senior notes which are due in 2012. The notes bear a 10.25% interest rate payable bi-annually on May 15 and November 15.
Total financing costs associated with the issuance of the senior secured notes were $8.2 million and are included on the balance sheet as other long term assets. Refer to Item 15exhibits and financial statement schedules for further
information.

Other notes payable and capital lease obligations

Other notes payable includes a note to the Tennessee Valley Authority that is payable in monthly installments of principal and interest (at the rate of 4.5% per annum) through November 2010. Amounts outstanding
as of December 31, 2007 and 2006 were $593 and $835, respectively. Other notes payable also include secured mortgage notes payable in the amount of $656 and $1,948 as of December 31, 2007 and 2006, respectively. In January, 2006 these
mortgage notes were refinanced. One note was extended through January 1, 2007 and further extended to December 31, 2008 and requires monthly interest only payments on a monthly variable rate of LIBOR plus 7%. The second mortgage note was
extended to February 1, 2007 further extended to January 31, 2008 and requires payments to be made in monthly installments of principal plus interest at the rate of 8% per annum. This note was paid in full in August, 2007 upon the
sale of the property.

On November 13, 2006, the Company executed a sale financing agreement on certain pieces of production equipment with The
Retirement System of Alabama in the amount of $29.9 million. The agreement provided the Company with an initial funding of $14.95 million to be followed by an additional $14.95 million which became available on December 1, 2006 and the
Company drew down on January 3, 2007. The agreement qualifies as a capital lease and has a three-year term with a fixed interest rate of 10.7%. On April 25, 2008, this facility was



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WISE METALS GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2007

(Dollars in Thousands)



amended to extend the term to May 5, 2010, to increase the loan balance by $4 million and to increase the interest rate to 13.7%. In conjunction with
the amended lease, the Company and the RSA entered into a fee letter agreement which requires the Company to pay the RSA certain deferred commitment, closing and consulting fees on a monthly basis which, together with the increased interest rate
under the amended lease, will ensure that the rate of return for the outstanding RSA commitment under the revolving credit facility does not exceed 8.5%.

Effective March 31, 2006, the Company executed an asset sale agreement with a financial institution that allowed the Company to sell certain accounts receivable up to $17 million on a non-recourse basis. This agreement was due to
expire on December 31, 2006. On December 31, 2006 the agreement was renewed and extended to June 15, 2007, and allowed the Company to sell certain accounts receivable up to $10 million on a non-recourse basis. The agreement was
further amended on April 9, 2007 to increase the facility to a total of $20 million and extend the term of the agreement to June 29, 2007. Under the terms of the agreement, the Company agreed to sell on an ongoing basis and without
recourse, a designated customers accounts receivable. As of December 31, 2007, the Company had not renewed the agreement which expired June 29, 2007. On April 10, 2008 the agreement was renewed and extended to
April 30, 2008 and allowed the Company to sell certain accounts receivable up to $15 million on a non-recourse basis. On April 18, 2008, the facility was further increased to $25 million.

At December 31, 2007, the Company also has $1.7 million of outstanding letter of credits with a financial institution. Substantially all the assets of the company
are pledged as collateral for our financing arrangements.

Principal payments due on long-term debt outstanding for the years ending December 31 are
as follows:



|     |  |   |        
|---- |  | - | -------
|2008 |  | $ | 4,276  
|2009 |  |   | 13,761 
|2010 |  |   | 10,702 
|2011 |  |   |       
|2012 |  |   | 150,000
|     |  |   |        
|     |  | $ | 178,739
|     |  |   |        

6. Financial Instruments

The carrying amount of the Companys financial instruments, including cash and cash equivalents, broker deposits, accounts receivable, accounts payable, and certain other financial instruments approximates their
fair value at December 31, 2007 and 2006. The fair value of the Companys debt was $278,816 and $310,180 at December 31, 2007 and 2006, respectively, based on the book value of the secured credit facility, and the Companys
estimate of fair value of the senior secured notes and the secured subordinated notes. The Company estimated the fair value of the senior secured notes based on surveyed market quotes for the notes and estimated the fair value of the secured
subordinated notes using a discounted cash flow analysis, using interest rates that the Company believes would be obtainable at that point in time.

The
Company, as of December 31, 2007 and 2006, has net commodity futures contracts outstanding to sell 7,275 metric tons and 7,850 metric tons, respectively, of aluminum through 2008. At December 31, 2007 and 2006, these commodity futures had
a fair value of $2,116 and $(2,850), respectively. At December 31, 2007, the Company had 16,500 metric tons of aluminum options with a fair value of $2,037. At December 31, 2006, the Company had 31,000 metric tons of aluminum options with
a fair value of $13 thousand.



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WISE METALS GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2007

(Dollars in Thousands)



As discussed in Note 2, the Company also has natural gas swaps at December 31, 2007 and 2006. The natural gas
instruments cover the Companys estimated natural gas production requirements for the first quarter of 2008. See Note 2 for their fair values.

7.
Benefit Plans

Effective April 1, 1999, the Company established a defined benefit pension plan that covers essentially all union employees. The
plan provides certain levels of benefits based on years of service and wage levels, but does not provide benefits for any prior service. In addition, defined contribution plans for both union and nonunion employees were established.

In 2003, the Company established negotiated defined contributions for certain union employees to multi-employer union pension plans. This was done in exchange for
freezing service time and pension factor in the aforementioned defined benefit plan as of the first quarter of 2004 and eliminating post-retirement benefits for affected employees.

The Company also established post-retirement benefit plans for all hourly and salaried employees effective April 1, 1999. The union employees who become eligible to retire under the defined benefit plan, and are
not a part of the unions that have elected the multi-employer option, will retain health benefits and certain other benefits for life. Salaried employees who retire after age 60 with a combined 10 years service with Wise Alloys LLC and the previous
owner of the Wise Alloys facilities will be eligible for medical benefits until age 65. The union contract ended on October 31, 2007. On November 1, 2007, the Company outsourced its maintenance function to ABB, an international company specializing
in maintenance in a manufacturing environment. This resulted in a reduction of Wise employees. This event was treated as a curtailment under provisions of FAS 88.

The Company reached agreement with the labor unions at the Alloys facility resulting in a new 5-year contract beginning November 1, 2007. As part of the agreement the unions pension benefits will now be provided through multi-employer
funds administered through the Steelworkers Pension Trust, the Central Pension Fund and the Tri-State Carpenters Fund. The Wise defined benefit pension plan was frozen as of the date of the new contract. The new agreement resulted in the Company
recognizing a net curtailment gain of $ 9.0 million. Highlights of the new labor agreement include a fair compensation package and the recognition of pension and post retirement health insurance issues by eliminating OPEB in exchange for an enhanced
pension benefit from the Steelworkers pension fund. Also included was the recognition of realities in health care by adjusting plan and increasing premiums paid by employees over the life of the contract.

The Companys funding policy for these plans is to contribute negotiated amounts to the multi-employer funds and amounts necessary to meet minimum funding
requirements of the Employee Retirement Income Security Act for the defined benefit plans but not to exceed the maximum deductible amount allowed by the Internal Revenue Code. The Company contributed $1,867 to the multi-employer plans during 2007
and $1,644 during 2006.

The Company uses October 31 as the measurement date for all defined benefit plans. The Company plans to adopt a
December 31 measurement date for fiscal year 2008. The following summarizes the significant information relating to these defined benefit plans as of December 31, 2007 and 2006 and for the years ended December 31, 2007, 2006 and 2005.



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WISE METALS GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2007

(Dollars in Thousands)



|                                                                               |  |                 |        |   |                              |   |         |                 |  |   |                              |   |  |   |         |  
|------------------------------------------------------------------------------ |  | --------------- | ------ | - | ---------------------------- | - | ------- | --------------- |  | - | ---------------------------- | - |  | - | ------- | -
|                                                                               |  | 2007            |        |   | 2006                         |  
|                                                                               |  | PensionBenefits |        |   | OtherPost-RetirementBenefits |   |         | PensionBenefits |  |   | OtherPost-RetirementBenefits |  
|Change in benefit obligation:                                                  |  |                 |        |   |                              |   |         |                 |  |   |                              |   |  |   |         |  
|Benefit obligation, beginning of year                                          |  | $               | 18,141 |   |                              | $ | 19,528  |                 |  | $ | 15,270                       |   |  | $ | 7,347   |  
|Service cost                                                                   |  |                 | 1,377  |   |                              |   | 2,829   |                 |  |   | 1,300                        |   |  |   | 1,540   |  
|Interest cost                                                                  |  |                 | 1,124  |   |                              |   | 1,218   |                 |  |   | 948                          |   |  |   | 458     |  
|Actuarial (gain)/loss                                                          |  |                 | (112   | ) |                              |   | (2,160  | )               |  |   | 968                          |   |  |   | (233    | )
|Effect of curtailments                                                         |  |                 |       |   |                              |   | (18,811 | )               |  |   |                             |   |  |   |        |  
|Plan amendment (1)                                                             |  |                 |       |   |                              |   |        |                 |  |   |                             |   |  |   | 10,442  |  
|Benefits paid                                                                  |  |                 | (426   | ) |                              |   | (23     | )               |  |   | (345                         | ) |  |   | (26     | )
|                                                                               |  |                 |        |   |                              |   |         |                 |  |   |                              |   |  |   |         |  
|Benefit obligation, end of year                                                |  | $               | 20,104 |   |                              | $ | 2,581   |                 |  | $ | 18,141                       |   |  | $ | 19,528  |  
|                                                                               |  |                 |        |   |                              |   |         |                 |  |   |                              |   |  |   |         |  
|                                                                               |  |                 |        |  
|Change in plan assets:                                                         |  |                 |        |   |                              |   |         |                 |  |   |                              |   |  |   |         |  
|Fair value of plan assets, beginning of year                                   |  | $               | 15,040 |   |                              | $ |        |                 |  | $ | 8,867                        |   |  | $ |        |  
|Employer contributions                                                         |  |                 | 2,710  |   |                              |   | 23      |                 |  |   | 5,328                        |   |  |   | 26      |  
|Benefits paid                                                                  |  |                 | (426   | ) |                              |   | (23     | )               |  |   | (345                         | ) |  |   | (26     | )
|Actual return on assets                                                        |  |                 | 1,960  |   |                              |   |        |                 |  |   | 1,190                        |   |  |   |        |  
|                                                                               |  |                 |        |   |                              |   |         |                 |  |   |                              |   |  |   |         |  
|Fair value of plan assets, end of year                                         |  | $               | 19,284 |   |                              | $ |        |                 |  | $ | 15,040                       |   |  | $ |        |  
|                                                                               |  |                 |        |   |                              |   |         |                 |  |   |                              |   |  |   |         |  
|Funded status                                                                  |  | $               | (820   | ) |                              | $ | (2,581  | )               |  | $ | (3,101                       | ) |  | $ | (19,528 | )
|                                                                              
|Amount recognized in the consolidated balance sheet at December 31, 2007       | 
|Current liabilities                                                            |  | $               |       |   |                              | $ | 117     |                 |  |   |                              |   |  |   |         |  
|Noncurrent liabilities                                                         |  | $               | 820    |   |                              | $ | 2,464   |                 |  |   |                              |   |  |   |         |  
|                                                                              
|Amount recognized in accumulated other comprehensive loss at December 31, 2007 | 
|Net actuarial loss (gain)                                                      |  | $               | 1,268  |   |                              | $ | (4,854  | )               |  |   |                              |   |  |   |         |  
|                                                                               |  |                 |        |  
|Reconciliation of funded status:                                               |  |                 |        |   |                              |   |         |                 |  |   |                              |   |  |   |         |  
|Funded status                                                                  |  |                 |        |   |                              |   |         |                 |  | $ | (3,101                       | ) |  | $ | (19,528 | )
|Unrecognized net (gain) loss                                                   |  |                 |        |   |                              |   |         |                 |  |   | 2,291                        |   |  |   | (2,760  | )
|Unrecognized prior service cost                                                |  |                 |        |   |                              |   |         |                 |  |   | 326                          |   |  |   | 10,442  |  
|                                                                               |  |                 |        |   |                              |   |         |                 |  |   |                              |   |  |   |         |  
|Accrued benefit cost                                                           |  |                 |        |   |                              |   |         |                 |  | $ | (484                         | ) |  | $ | (11,846 | )



|(1) | The 2006 disclosure has been revised to correct the omission of the 2006 plan amendment. During 2006, the plan amendment allowed certain employees previously covered under an Alcoa
legacy plan to convert to the Wise plan. There was no effect on the consolidated balance sheet or consolidated statement of operations as a result of this omission in 2006.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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WISE METALS GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2007

(Dollars in Thousands)



|                                         |  |                 |        |   |                              |   |        |                 |  |   |                              |   |  |                 |       |   |                              |   |       |   |  |   |       |  
|---------------------------------------- |  | --------------- | ------ | - | ---------------------------- | - | ------ | --------------- |  | - | ---------------------------- | - |  | --------------- | ----- | - | ---------------------------- | - | ----- | - |  | - | ----- | -
|                                         |  | 2007            |        |   | 2006                         |   |        | 2005            | 
|                                         |  | PensionBenefits |        |   | OtherPost-RetirementBenefits |   |        | PensionBenefits |  |   | OtherPost-RetirementBenefits |   |  | PensionBenefits |       |   | OtherPost-RetirementBenefits |  
|Components of net periodic benefit cost: |  |                 |        |   |                              |   |        |                 |  |   |                              |   |  |                 |       |   |                             
|Service cost                             |  | $               | 1,377  |   |                              | $ | 2,829  |                 |  | $ | 1,300                        |   |  | $               | 1,540 |   |                              | $ | 1,111 |   |  | $ | 1,392 |  
|Interest cost                            |  |                 | 1,124  |   |                              |   | 1,218  |                 |  |   | 948                          |   |  |                 | 458   |   |                              |   | 774   |   |  |   | 461   |  
|Expected return on plan assets           |  |                 | (1,092 | ) |                              |   |       |                 |  |   | (699                         | ) |  |                 |      |   |                              |   | (536  | ) |  |   |      |  
|Amortization of prior service cost       |  |                 | 36     |   |                              |   | 912    |                 |  |   | 36                           |   |  |                 |      |   |                              |   | 36    |   |  |   |      |  
|Net gain recognition                     |  |                 | 44     |   |                              |   | (66    | )               |  |   | 27                           |   |  |                 | (122  | ) |                              |   |      |   |  |   | (22   | )
|Curtailments                             |  |                 | 290    |   |                              |   | (9,281 | )               |  |   |                             |   |  |                 |      |   |                              |   |      |   |  |   |      |  
|Special termination benefits             |  |                 |       |   |                              |   |       |                 |  |   |                             |   |  |                 |      |   |                              |   |      |   |  |   |      |  
|                                         |  |                 |        |   |                              |   |        |                 |  |   |                              |   |  |                 |       |   |                              |   |       |   |  |   |       |  
|Total benefit cost                       |  | $               | 1,779  |   |                              | $ | (4,388 | )               |  | $ | 1,612                        |   |  | $               | 1,876 |   |                              | $ | 1,385 |   |  | $ | 1,831 |  
|                                         |  |                 |        |   |                              |   |        |                 |  |   |                              |   |  |                 |       |   |                              |   |       |   |  |   |       |  

The estimated net loss which will be amortized from accumulated other comprehensive loss into net periodic benefit
cost during 2008 is expected to be $3.2 million for postretirement benefit plans.

The Company used the following assumptions to calculate the results of
our retirement plans:



|                                                                                                     |  |                  |   |  |                         |   |  |      |   |  |      |   |  |      |   |  |      |  
|---------------------------------------------------------------------------------------------------- |  | ---------------- | - |  | ----------------------- | - |  | ---- | - |  | ---- | - |  | ---- | - |  | ---- | -
|                                                                                                     |  | Pension Benefits |   |  | Postretirement Benefits |  
|                                                                                                     |  | 2007             |   |  | 2006                    |   |  | 2005 |   |  | 2007 |   |  | 2006 |   |  | 2005 |  
|Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31 |  |                  |   |  |                         |   |  |      |   |  |      |   |  |      |   |  |      |  
|Discount rate                                                                                        |  | 6.25             | % |  | 6.25                    | % |  | 6.25 | % |  | 6.25 | % |  | 6.25 | % |  | 6.25 | %
|Expected long-term rate of return on plan assets                                                     |  | 7.00             | % |  | 7.00                    | % |  | 7.00 | % |  | N/A  |   |  | N/A  |   |  | N/A  |  
|Rate of projected compensation increase                                                              |  | N/A              |   |  | N/A                     |   |  | N/A  |   |  |     |   |  |     |   |  |     |  
|                                                                                                     |  |                  |   |  |                         |  
|Weighted-average assumptions used to determine benefit obligations at December 31                    |  |                  |   |  |                         |   |  |      |   |  |      |   |  |      |   |  |      |  
|Discount rate                                                                                        |  | 6.25             | % |  | 6.25                    | % |  |      |   |  | 6.12 | % |  | 6.25 | % |  |      |  
|Rate of projected compensation increase                                                              |  | N/A              |   |  | N/A                     |   |  | N/A  |   |  | N/A  |   |  | N/A  |   |  | N/A  |  

The allocation, by category, of assets of our defined benefit pension plan at December 31, 2007 and 2006 was
as follows:



|                                             |  |      |   |  |      |  
|-------------------------------------------- |  | ---- | - |  | ---- | -
|                                             |  | 2007 |   |  | 2006 |  
|Asset category:                              |  |      |   |  |      |  
|Equity                                       |  | 60   | % |  | 61   | %
|Fixed income                                 |  | 39   | % |  | 38   | %
|Alternative investments (money market funds) |  | 1    | % |  | 1    | %
|                                             |  |      |   |  |      |  
|                                             |  | 100  | % |  | 100  | %

At the plan measurement date of October 31, 2007, our targeted allocation by category, of assets of our
defined benefit pension plan, is equity securities of 60%, and fixed income securities of 40%. Cash from money market funds is available for planned purchases of equity and fixed income securities to achieve targeted allocations.



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WISE METALS GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2007

(Dollars in Thousands)



The Company establishes its estimated long-term return on plan assets considering various factors, which include the
targeted asset allocation percentages, historic returns, and expected future returns. Specifically, the factors are considered in the fourth quarter of the year preceding the year for which those assumptions are applied.

We utilize the Citigroup Pension Discount Curve (discount curve) and Liability Index in developing the discount rate assumption. We apply the expected cash flows of the
specific defined benefit retirement plan to the interest rates provided in the discount curve. The rate is developed based on the discount curve on the last day of October.

The projected benefit obligation, accumulated benefit obligation and fair value of plan assets related to our defined benefit pension plan at the end of each year is as follows:



|                               |  |      |         |   |      |   |         |  
|------------------------------ |  | ---- | ------- | - | ---- | - | ------- | -
|                               |  | 2007 |         |   | 2006 |  
|Projected benefit obligation   |  | $    | (20,104 | ) |      | $ | (18,141 | )
|Accumulated benefit obligation |  |      | (20,104 | ) |      |   | (18,141 | )
|Fair value of plan assets      |  |      | 19,284  |   |      |   | 15,040  |  

The following table sets forth benefit payments, which reflect expected future service, as appropriate, expected
to be paid in the periods indicated.



|                  |  |             |       |                      |   |      
|----------------- |  | ----------- | ----- | -------------------- | - | -----
|                  |  | PensionPlan |       | Other PostRetirement
|2008              |  | $           | 498   |                      | $ | 120  
|2009              |  |             | 648   |                      |   | 154  
|2010              |  |             | 776   |                      |   | 178  
|2011              |  |             | 913   |                      |   | 196  
|2012              |  |             | 1,011 |                      |   | 218  
|2013 through 2017 |  |             | 6,342 |                      |   | 1,251

The pre-Medicare health care cost trend rate used to determine the post retirement benefit obligation was 11% for
2007. This rate decreases gradually to an ultimate rate of 5% in 2018, and remains at that level thereafter. The trend rate is a significant factor in determining the amounts reported. A one-percentage point change in these assumed health care costs
trend rates would have the following effect:



|                                                    |  |          |     |            |   |      |  
|--------------------------------------------------- |  | -------- | --- | ---------- | - | ---- | -
|                                                    |  | Increase |     | (Decrease) |  
|Effect on total service and interest cost component |  | $        | 286 |            | $ | (288 | )
|Effect on post retirement benefit obligation        |  |          | 15  |            |   | (17  | )



In 2008, the Company expects to make cash
contributions of approximately $2,832 to its defined benefit pension plan. The amounts principally represent contributions required by funding regulations and in addition the Company expects to fund benefits paid under its post retirement benefit
plans during 2008. No contributions to the post retirement benefits plan were made in 2007.

The Company also maintains a defined contribution plan. The
Company matches at a 50% rate the employees elected deferral up to the first 6% of the withholding. Additionally, the Company makes an annual contribution based on a defined formula. Expenses for the defined contribution plan are recorded in
the income statement as cost of goods sold and were $1,951, $1,889 and $1,835 for 2007, 2006 and 2005, respectively.



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WISE METALS GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2007

(Dollars in Thousands)



Implementation of SFAS No. 158

Wise adopted Statement of Financial Accounting Standards No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans (SFAS No. 158) as of December 31,
2007. This standard requires an employer that is a business entity that sponsors one or more single employer benefit plans to (a) recognize the funded status (defined as the difference between the fair value of plan assets and the benefit
obligation) of a benefit plan in the statement of financial position; (b) recognize as a component of other comprehensive income, net of tax, the gains or losses and prior service costs or credits that arise during the period but are not
recognized as components of net periodic benefit cost; (c) measure defined benefit plan assets and obligations as of the date of the employers fiscal year end; and (d) disclose in the notes to the financial statements additional
information about certain effects on net periodic benefit cost for the next fiscal year that arise from delayed recognition of the gains or losses, prior service costs or credits, and transition asset or obligation.

The incremental effect of applying SFAS No. 158 on the pension and postretirement benefit plans at December 31, 2007 is shown in the table below.



|                                                     |  |                                     |         |   |             |   |        |                                    |  |   |        
|---------------------------------------------------- |  | ----------------------------------- | ------- | - | ----------- | - | ------ | ---------------------------------- |  | - | -------
|                                                     |  | BeforeImplementationof SFAS No. 158 |         |   | Adjustments |   |        | AfterImplementationof SFAS No. 158
|Accrued expenses, payroll and other                  |  | $                                   | 15,440  |   |             | $ | 117    |                                    |  | $ | 15,557 
|Total current liabilities                            |  |                                     | 271,082 |   |             |   | 117    |                                    |  |   | 271,199
|Accrued pension and other postretirement obligations |  |                                     | 8,255   |   |             |   | (4,971 | )                                  |  |   | 3,284  
|Total non-current liabilities                        |  |                                     | 184,334 |   |             |   | (4,971 | )                                  |  |   | 179,363
|Accumulated other comprehensive income (loss)        |  |                                     | (1,268  | ) |             |   | 4,854  |                                    |  |   | 3,586  

8. Redeemable Preferred Membership Interest

On October 4, 2007, the Company reached agreement with the RSA in which the RSA agreed to purchase $75 million of cumulative-convertible 10 percent PIK preferred membership interests of the Company. The preferred
interest is convertible into 25 percent of the common interest of the Company. The Company has the right to call the preferred membership interest after seven years at the cost of the greater of the investment plus any accrued PIK dividends or the
fair market value of the preferred interest on an as converted basis.

In conjunction with the transaction, deferred financing fees were
incurred in the amount of $1,083 of which the amortization of those fees was $36 for the period ended December 31, 2007. As of December 31, 2007, total accumulated PIK interest on the $75 million cumulative-convertible preferred membership interest
was $1,875. Unamortized deferred financing fees in the amount of $1,047 are included as an offset to the total liquidation preference of $75 million preferred membership interest and $1,875 of accumulated PIK interest classified as mezzanine
equity on the balance sheet.

Total liquidation preference as of December 31, 2007, is $76,875 and total accretion of redeemable
preferred membership interest for the period ended December 31, 2007 is $1,911 which would increase the net loss attributable to members. In the event of any liquidation, dissolution or winding up of the Company, the preferred members are entitled
to receive distributions before any distributions to the members. Net loss for the year ended December 31, 2007 was $53,501 of which net loss attributable to members would be $55,412 after recognition of the PIK interest noted above.



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WISE METALS GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2007

(Dollars in Thousands)



9. Commitments and Contingencies

The Company has entered into long-term supply contracts to supply a significant amount of aluminum can stock with certain customers, which represents more than 50% of the production capacity of Alloys. The price under
these supply agreements is based on a quoted exchange.

At December 31, 2007, the Company has entered into fixed priced sales commitments of
approximately 20 million pounds. Additionally, the Company entered into fixed price commitments to purchase raw material inventory of approximately 20 million pounds. The Company uses inventory, commodity futures and option contracts to
reduce the risk of changing prices for purchases and sale of metal.

The Company is a defendant in an action brought by Merrill Lynch, Pierce,
Fenner & Smith Incorporated pending in the New York Supreme Court, County of New York. In this action, Merrill Lynch seeks $932 for out-of-pocket costs and expenses allegedly incurred pursuant to a letter agreement between Wise Metals and
Merrill Lynch dated January 31, 2002, in which Merrill Lynch alleges that Wise Metals agreed to reimburse Merrill Lynch for such costs and expenses. Wise Metals has hired counsel and is vigorously contesting this lawsuit and believes it has
meritorious defenses. Wise Metals has filed an answer to the complaint denying the material allegations and alleging several affirmative defenses and counterclaims which exceed in amount the sum sought by Merrill Lynch. Merrill Lynch moved to
dismiss the Wise Metals counterclaims and by an order dated December 30, 2004, the Court granted this motion, dismissed the counterclaims and permitted Wise Metals to replead two of the counterclaims. Wise Metals appealed, which resulted
in a reversal reinstating the dismissed counterclaims. Merrill Lynch has replied to the counterclaims. The action is proceeding and is presently in the discovery stages and the deadline for discovery has been extended to May 30, 2008. The
Company believes that it is not currently possible to estimate the ultimate outcome of this litigation. As a result, no expense for any potential adverse outcome of this matter has been recorded in the consolidated financial statements.

The Company was a defendant in an action brought by a former executive seeking compensatory damages previously pending in Delaware State Court. The plaintiff alleged
that certain transactions between Wise Metals Group members violated the Companys Limited Liability Company Agreement because other members were not afforded the opportunity to participate on equal terms, breach of fiduciary duty and
conversion of a portion of the plaintiffs equity interest in the Company. On June 25, 2007, the parties reached a settlement whereby in exchange for $2 million, the plaintiff would surrender his equity interest in the Company, forgo any
claim for a $1 million severance that plaintiff alleges would otherwise come due on his 62nd birthday and provide the Company with a general release of any existing or potential claims. This settlement was approved by the court and the action was
dismissed on June 25, 2007 and the Company paid the settlement during the quarter ended September 30, 2007.

In August 2006, the Company filed a
lawsuit against Crown Cork and Seal (USA), Inc. in state court in Alabama for breach of contract and seeking a declaratory judgment on our beverage can sheet and food sheet contracts. The lawsuit alleged damages because of breaches by Crown of the
beverage can sheet contract, and asks the court to interpret certain pricing provisions of the food contract. In September 2006, Crown entered a counter claim asserting breaches to the food and beverage can contracts. Throughout the remainder of
2007, the Company continued to negotiate with Crown to reach a settlement on these issues. On February 1, 2008, the Company and Crown agreed to settle the litigation without admitting any wrongdoing or liability by either party. The
negotiations also resulted in the signing of a long term supply agreement between the two parties to supply can stock both domestically and overseas.



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WISE METALS GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2007

(Dollars in Thousands)



The Company is a party to certain claims and litigation associated with employment related matters for which
management believes that the ultimate resolution will not have a material adverse impact on the Companys financial position.

Our operating
expenditures relating to environmental requirements in 2007 were approximately $4.0 million and are expected to be similar in 2008 and 2009. Future environmental regulations, including those under the Clean Air Act and Clean Water Act, or more
aggressive enforcement of existing regulations, may result in stricter compliance requirements for us and for the aluminum industry in general.

In
connection with our acquisition of the Listerhill facility in 1999, a consultant performed a soil and groundwater investigation (Phase II Report) to identify any environmental issues at the various plants that comprise the Listerhill
facility. That Phase II Report identified certain on-site environmental areas of concern that may potentially require investigation or remediation and provided a then-present value estimate of approximately $18 million to address them. Pursuant to
the Listerhill facility purchase agreement, the prior owner of the Listerhill facility, Reynolds, now Alcoa, is required to perform the work necessary and to indemnify us against the environmental matters required by applicable law to be addressed
that are identified in the Phase II Report and any other such environmental liabilities attributable to Reynolds that were identified on or before March 31, 2004 subject to certain limitations. Alcoa disagrees with the cost estimates contained
in the Phase II Report and has stated that it estimates that the environmental issues identified in the Phase II Report will cost less than $18 million to remediate. Although Alcoa has conducted some on-site environmental investigations and sampling
and has submitted reports to the Alabama Department of Environmental Management (ADEM) regarding most of the on-site areas of concern, it has not yet commenced cleanup activities with respect to many of the areas of concern.

We are also party to an Environmental Cooperation Agreement, or ECA, with Alcoa, which is Reynolds successor. The ECA addresses, among other things, the use of a
surface water ditch system by both us and Alcoa, the use of process water retention ponds on Alcoas property and certain surface drainage easements across our property. The ECA expires in December 2009, with automatic two year renewal periods
unless either party elects to terminate, in which event the ECA will terminate one year following such election. Under the ECA, each party defends and indemnifies the other against claims arising from its own violations of any applicable
environmental laws, its handling, use, or disposal of hazardous materials at the Listerhill facility, a breach of any warranties, representations or covenants in the agreement, or damage or loss to property and injury to or death of any persons.

In November 2006, the Company received notice from the Environmental Protection Agency (EPA) regarding certain violations of the Clean Air
Act. The Company disputes some of the alleged violations and has initiated actions to come into compliance with the relevant requirements. The EPA has indicated its intent to resolve the violations through a judicial consent-decree, including the
payment of civil penalties by the Company. The Company has made an offer to resolve the alleged violations and is awaiting a response from the EPA. Discussions with the EPA are ongoing. The Company believes it is properly accrued for this
contingency and, accordingly, the ultimate resolution of these matters is not expected to have a material adverse effect on the Companys consolidated financial statements.

The Company is subject to certain monthly purchase commitments for raw materials. The amount of inventory under this commitment not yet received was $34,491 and $15,382 as of December 31, 2007 and December 31, 2006,
respectively.



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WISE METALS GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2007

(Dollars in Thousands)



10. Business Segment Information

A reportable segment is a component of an enterprise in which the operating results are regularly reviewed by the enterprises chief operating decision maker to make decisions about resources to be allocated to
the segment and assess its performance, and for which discrete financial information is available. We have two reportable segments under Statement of Financial Accounting Standards (SFAS) No. 131: Wise Alloys Alloys and Wise
Recycling Recycling.

Wise Alloys: Alloys principally manufactures and sells aluminum can sheet to aluminum can producers and also
serves the transportation, building, and construction markets. Beverage can stock is aluminum sheet specifically designed and engineered for use in the production of aluminum beverage cans and represents our primary product. Can stock customers
include Ball Corporation, Crown Holdings, Inc. and Rexam PLC, the three largest beverage can manufacturers in the world. In addition, Alloys produces food can stock and semi-fabricated aluminum sheet for building and construction, transportation and
other markets.

Wise Recycling: Recycling is engaged in the recycling and sale of scrap aluminum and other non-ferrous metals for use by Alloys as
well as for sale to third parties. Recycling provides the Company with an effective, profitable infrastructure to obtain a portion of Alloys scrap requirements. Recycling has developed a collection process that utilizes both direct
acquisitions from scrap dealers and industrial accounts, as well as off-the-street acquisitions from the actual consumer. Furthermore, Recycling collects other forms of non-ferrous scrap, primarily non-UBC aluminum, copper and brass, for
sale in the merchant market. The Company is currently expanding the business of Recycling to include warehousing operations in order to provide regional shipping centers for our scrap collection and to enhance our ability to provide a vendor managed
inventory program for Alloys customers.

Substantially all of our revenues and assets are attributed to or are located in the United States. The Company
evaluates segment performance based on profit or loss from operations before corporate general and administrative expenses, LIFO adjustments, and mark-to-market adjustments for derivative contracts under SFAS 133. The accounting policies of the
segments are the same as those described in the significant accounting policies.



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WISE METALS GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2007

(Dollars in Thousands)



We have concluded that TMC is not a reportable segment because it is not significant to our consolidated operations
and represents less than 10% of our revenues and its absolute profit or loss represents less than 10% of our absolute profit or loss in each of the past three years ended December 31, 2007, 2006 and 2005. Additionally, TMCs assets were
less than 10% of the combined assets of our operating segments as of December 31, 2007 and 2006. Financial information about TMC is included in the Other caption in the tables below.

The following table sets forth information on the Companys reportable segments:



|                                                 |  |                         |         |   |      |   |           |      |  |   |         |  
|------------------------------------------------ |  | ----------------------- | ------- | - | ---- | - | --------- | ---- |  | - | ------- | -
|                                                 |  | Year Ended December 31, |        
|                                                 |  | 2007                    |         |   | 2006 |   |           | 2005 | 
|                                                 |  | ($ in thousands)        |        
|Net Sales                                        |  |                         |         |   |      |   |           |      |  |   |         |  
|Alloys                                           |  | $                       | 839,410 |   |      | $ | 903,290   |      |  | $ | 829,592 |  
|Recycling                                        |  |                         | 145,181 |   |      |   | 134,241   |      |  |   | 75,692  |  
|Other                                            |  |                         | 2,068   |   |      |   | 1,110     |      |  |   | 2,452   |  
|                                                 |  |                         |         |   |      |   |           |      |  |   |         |  
|Net sales                                        |  | $                       | 986,659 |   |      | $ | 1,038,641 |      |  | $ | 907,736 |  
|                                                 |  |                         |         |   |      |   |           |      |  |   |         |  
|                                                 |  |                         |        
|Segment (loss) profit                            |  |                         |         |   |      |   |           |      |  |   |         |  
|Alloys                                           |  | $                       | (31,511 | ) |      | $ | (40,599   | )    |  | $ | (9,144  | )
|Recycling                                        |  |                         | 7,412   |   |      |   | 13,230    |      |  |   | 2,729   |  
|                                                 |  |                         |         |   |      |   |           |      |  |   |         |  
|Segment loss                                     |  |                         | (24,099 | ) |      |   | (27,369   | )    |  |   | (6,415  | )
|LIFO adjustment                                  |  |                         | 12,962  |   |      |   | (23,577   | )    |  |   | (2,318  | )
|Unrealized gain (loss) on derivative instruments |  |                         | 8,352   |   |      |   | (24,126   | )    |  |   | 11,666  |  
|Corporate and other undistributed expenses, net  |  |                         | (50,716 | ) |      |   | (8,784    | )    |  |   | (24,551 | )
|                                                 |  |                         |         |   |      |   |           |      |  |   |         |  
|Net loss                                         |  | $                       | (53,501 | ) |      | $ | (83,856   | )    |  | $ | (21,618 | )
|                                                 |  |                         |         |   |      |   |           |      |  |   |         |  



|                    |  |                    |         |      |   |        
|------------------- |  | ------------------ | ------- | ---- | - | -------
|                    |  | As of December 31,
|                    |  | 2007               |         | 2006
|                    |  | ($ in thousands)  
|                    |  |                    |         |      |   |        
|Total Assets        |  |                    |         |      |   |        
|Alloys              |  | $                  | 306,902 |      | $ | 294,417
|Recycling           |  |                    | 42,617  |      |   | 31,409 
|Corporate and other |  |                    | 3,900   |      |   | 9,093  
|                    |  |                    |         |      |   |        
|Total assets        |  | $                  | 353,419 |      | $ | 334,919
|                    |  |                    |         |      |   |        



|                                    |  |                    |        |      |   |        |  |   |       
|----------------------------------- |  | ------------------ | ------ | ---- | - | ------ |  | - | ------
|                                    |  | As of December 31,
|                                    |  | 2007               |        | 2006 |   | 2005  
|                                    |  | ($ in thousands)  
|Depreciation and Amortization       |  |                    |        |      |   |        |  |   |       
|Alloys                              |  | $                  | 12,989 |      | $ | 11,814 |  | $ | 12,529
|Recycling                           |  |                    | 718    |      |   | 640    |  |   | 609   
|Corporate and other                 |  |                    | 14     |      |   | 126    |  |   | 217   
|                                    |  |                    |        |      |   |        |  |   |       
|Total depreciation and amortization |  | $                  | 13,721 |      | $ | 12,580 |  | $ | 13,355
|                                    |  |                    |        |      |   |        |  |   |       



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WISE METALS GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2007

(Dollars in Thousands)



|                           |  |                    |        |      |   |        |  |   |       
|-------------------------- |  | ------------------ | ------ | ---- | - | ------ |  | - | ------
|                           | 
|                           |  | As of December 31,
|                           |  | 2007               |        | 2006 |   | 2005  
|                           |  | ($ in thousands)  
|Capital Expenditures       |  |                    |        |      |   |        |  |   |       
|Alloys                     |  | $                  | 19,317 |      | $ | 9,635  |  | $ | 13,985
|Recycling                  |  |                    | 1,291  |      |   | 977    |  |   | 552   
|Corporate and other        |  |                    | 1,639  |      |   |       |  |   |      
|                           |  |                    |        |      |   |        |  |   |       
|Total capital expenditures |  | $                  | 22,247 |      | $ | 10,612 |  | $ | 14,537
|                           |  |                    |        |      |   |        |  |   |       

11. Related Party Transactions

Effective October, 2006, the Company entered into a Dry Lease Agreement (the Dry Lease) to charter up to 175 hours per year of a Dassault Falcon 200 (the Plane). The Plane is owned by WDA LLC
(WDA), a company primarily owned by David DAddario, our Chief Executive Officer and President. Under the Dry Lease, Wise has the first right to use the Plane. Wise pays direct operating costs for actual use, including fuel and crew
costs which approximate $3,800 per hour. These costs will vary based upon the distance and number of days of the trip. In addition, Wise pays a flat fee for actual maintenance and management fees based on its percentage use of the plane, 60%, based
on total availability of 300 hours, of approximately $2,500 per hour. In addition, Wise pays $1,500 per hour for miscellaneous expenses, including training and insurance. The Dry Lease extends through September 30, 2011, but may be cancelled
upon 30 days notice. The Company used the Plane for 215 hours in the year ended December 31, 2007. The Company has no obligation to use the Plane for any minimum number of hours. Based upon quotes from other fractional share charter operators,
the Company believes that this transaction reflects arms length terms.

On April 25, 2008, the Company entered into an Amendment No. 13 to
its revolving credit facility (Amendment No. 13) to increase the maximum credit under the loan from $207.5 million to $278 million. Under Amendment No. 13, the applicable interest rates for the loan will range either from
0.50%1.00% over the prime interest rate or 2.75%3.25% over the LIBOR rate, and will be based upon the EBITDA of the Company for the immediately preceding two (2), three (3) or four (4) fiscal quarter periods. To accommodate the
increased maximum credit, certain sublimits in the revolving credit facility have been increased. The term of the credit facility has also been extended from May 5, 2009 to May 5, 2010. Additionally, breach of the covenant requiring that
the Company furnish to the Agent under the loan agreement audited and unaudited consolidated financial statements of the Company and its subsidiaries within ninety days of the end of the fiscal year ended December 31, 2007 was waived.

As part of the April 25, 2008 amendment, the RSA, an equity owner of the Company, has agreed to participate in the revolving credit facility as a pari
passu lender with a total commitment of $96 million. As consideration for the RSAs participation in the credit facility, the Company and the RSA agreed to enter into an amendment to the existing master equipment lease to increase the amount
outstanding under the lease by $4 million and increase the interest rate under the lease from 10.7% to 13.7%. The master equipment lease, as amended, now expires May 5, 2010. In addition, the Company and the RSA entered into a fee letter
agreement which requires the Company to pay the RSA certain deferred commitment, closing and consulting fees on a monthly basis which, in conjunction with the increased interest rate under the amended master equipment lease, will ensure that the
rate of return for the amount outstanding under the RSA commitment equals, but does not exceed 8.5%.



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WISE METALS GROUP LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2007

(Dollars in Thousands)



12. Quarterly Information (Unaudited)



|                             |  |              |         |               |   |         |              |  |   |               |   |  |   |         |  
|---------------------------- |  | ------------ | ------- | ------------- | - | ------- | ------------ |  | - | ------------- | - |  | - | ------- | -
|                             |  | FirstQuarter |         | SecondQuarter |   |         | ThirdQuarter |  |   | FourthQuarter |  
|Year Ended December 31, 2007 |  |              |         |               |   |         |              |  |   |               |   |  |   |         |  
|Net sales                    |  | $            | 252,515 |               | $ | 284,008 |              |  | $ | 244,833       |   |  | $ | 205,303 |  
|Gross profit (loss)          |  |              | 4,666   |               |   | 10,173  |              |  |   | (10,667       | ) |  |   | (15,071 | )
|Net income (loss)            |  |              | 3,565   |               |   | (4,939  | )            |  |   | (25,711       | ) |  |   | (26,416 | )
|                             |  |              |         |              
|Year Ended December 31, 2006 |  |              |         |               |   |         |              |  |   |               |   |  |   |         |  
|Net sales                    |  | $            | 221,818 |               | $ | 290,035 |              |  | $ | 279,297       |   |  | $ | 247,491 |  
|Gross profit (loss)          |  |              | 8,882   |               |   | (1,654  | )            |  |   | (21,319       | ) |  |   | (1,403  | )
|Net income (loss)            |  |              | 3,502   |               |   | (16,460 | )            |  |   | (53,929       | ) |  |   | (16,969 | )



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|Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
|------- | -------------------------------------------------------------------------------------

None.



|Item 9A. | Disclosure Controls and Procedures
|-------- | ----------------------------------

(a) Disclosure
Controls and Procedures

As of December 31, 2007, our management, including our Chief Executive Officer (CEO) and Chief Financial
Officer (CFO), has conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Securities Exchange Act Rule 13a-15(e), as amended). Based on the evaluation, our CEO and CFO concluded that our disclosure
controls and procedures as of December 31, 2007 were not effective because of a material weakness in internal control over financial reporting described below.

(b) Managements Annual Report on Internal Control over Financial Reporting

Our management is
responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended. Under the supervision of management and with the
participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2007. In making this
evaluation, we used the criteria set forth by the Commission of Sponsoring Organizations of the Treadway Commission (COSO) in Internal ControlIntegrated Framework. A material weakness is a deficiency, or a combination of deficiencies, in
internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Companys annual or interim financial statements will not be prevented or detected on a timely basis.

The Company has not maintained sufficient staff with appropriate training in US GAAP and SEC financial rules and regulations. This control
deficiency, if not corrected, could result in a material misstatement of the Companys annual or interim consolidated financial statements that would not be prevented or detected on a timely basis. Therefore, management has concluded that this
control deficiency constitutes a material weakness.

As a result of the material weakness described above, management concluded that the
Companys internal control over financial reporting was not effective as of December 31, 2007, based on the criteria identified above. This annual report does not include an attestation report of the Companys independent registered
accounting firm regarding internal control over financial reporting. Managements report was not subject to attestation by the Companys independent registered public accounting firm pursuant to temporary rules of the Securities and
Exchange Commission that permit the Company to provide only managements report in this annual report.

(c) Remediation Activities

The Company has evaluated its resource requirements to ensure the timely and effective review and management of its reporting process. The
Company has formed a Finance Committee consisting of various financial and accounting personnel to regularly review the effectiveness of internal control over financial reporting and is evaluating staffing requirements to ensure the preparation of
financial statements in accordance with GAAP. It has also added and is continuing to add additional financial staff, and has reviewed and updated scheduling and planning protocols in place to ensure continued timely compliance with SEC reporting
deadlines.

(d) Changes in Internal Control Over Financial Reporting



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There was no change in the Companys internal control over financial reporting that occurred during
the fourth fiscal quarter ended December 31, 2007 that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.



|Item 9B. | Other Information.
|-------- | ------------------

None.

Part III



|Item 10. | Directors, Executive Officers and Corporate Governance.
|-------- | -------------------------------------------------------

The following table sets forth the managers, executive officers and key employees of Wise Group and Wise Alloys and their ages as of January 1, 2008:



|                   |  |     |  |                                                             
|------------------ |  | --- |  | ------------------------------------------------------------
|Name               |  | Age |  | Position(s)                                                 
|David F. DAddario |  | 45  |  | Chief Executive Officer, Chairman and Manager, Wise Group   
|John J. Cameron    |  | 71  |  | Vice Chairman, Manager                                      
|Danny Mendelson    |  | 55  |  | Executive Vice President, Chief Strategic Officer, Secretary
|Gerald M. David    |  | 69  |  | Manager, Wise Group                                         
|Gregory Garvey     |  | 52  |  | Manager, Wise Group                                         
|Thomas L. Krebs    |  | 64  |  | Manager, Wise Group                                         
|John S. Stein      |  | 43  |  | Manager, Wise Group                                         
|Don Farrington     |  | 59  |  | Senior Vice President, Sales                                
|Sam Glasscock      |  | 59  |  | Executive Vice President /Financial Operations              
|Phillip Tays       |  | 62  |  | Executive Vice President, Manufacturing                     
|Michael Patterson  |  | 57  |  | Senior Vice President, Strategic Planning                   
|Kenneth Stastny    |  | 39  |  | Chief Financial Officer                                     
|Richard Weaver     |  | 65  |  | Executive Vice President, Development and Risk Management   
|Robert David       |  | 65  |  | Vice President, National Accounts                           

David F. DAddariohas served as Wise Groups Chairman since October 2001 and its
Chief Executive Officer since February 2004 and has served as a Manager since January 1999. Mr. DAddario also served as President and Chief Executive Officer of DAddario Industries, a private company. From 1986 to 2001
Mr. DAddario served for and was a founder of Neroc, Inc., the predecessor of Tomra of North America, Inc. Mr. DAddario holds a B.A. degree from Yale University.

John J. Cameron was named Vice Chairman in March 2004. He has served as a Manager since 1999. He served as Wise Groups Chief Executive
Officer from October 2000 until March 2004 and was President of Wise Alloys from 2000 to 2004. Mr. Cameron served as the Chief Executive Officer of Wise Groups predecessor, Wise Metals Co., Inc., from 1991 to 1999. From 1984 to 1991,
Mr. Cameron operated his own business, Arcadia, Inc., an aluminum engineering firm, which he sold in 1991. From 1978 to 1984, Mr. Cameron held various management operating positions at Howmet Corp., serving as Senior Vice President of
Operations from 1982 to 1984 and as a director from 1982 to 1983. Mr. Cameron holds a B.S. degree from Fordham University.

Danny
Mendelson was named Executive Vice President and Chief Strategic Officer in June 2006 after having served as Wise Groups Chief Financial Officer since April 1999. Prior to joining Wise Group,



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Mr. Mendelson was a partner in the Baltimore, Maryland office of Ernst & Young LLP from 1984 to 1999, serving as the director of its tax
practice from 1987 to 1997. Mr. Mendelson is a certified public accountant and an attorney. He holds a B.B.A. degree from the University of Michigan, a J.D. from Detroit College of Law and an L.L.M. from Georgetown University.

Gerald M. Davidhas served as a Manager since January 1999. Mr. David served as Chairman from 1999 to September 2001. Mr. David served
as President and CEO of Wise Metals Co. from 1987 to 1999. Gerald David is the brother of Robert David, Vice President, National Accounts. Mr. David has a bachelors degree in business from the University of Maryland.

Gregory Garvey has served as a Manager since January 1999. Prior to joining Wise Group, Mr. Garvey worked for Tomra of North America, Inc.
where he served as Vice Chairman and Executive Vice President, Business Development, from 1994 to 2002. Mr. Garvey holds a Financial Accounting degree from the University of New Haven.

Thomas L. Krebs was selected by RSA to serve on the Board of Managers in October of 2007. Mr. Krebs is an attorney at the law firm of Haskell
Slaughter Young & Rediker, LLC and represents clients in the areas of securities and class action litigation, broker-dealer litigation and arbitration, and other complex civil litigation. With an extensive background in securities
regulation and enforcement and significant trial and arbitration experience representing both plaintiffs and defendants in securities-related matters, Mr. Krebs brings substantial expertise to the representation of corporate clients,
broker-dealer firms and individual and institutional investors. In addition to his litigation practice, Mr. Krebs maintains an active practice in broker-dealer arbitration. Mr. Krebs holds a B.A. degree from the University of Virginia and
a J.D. degree from the University of Alabama.

John S Stein was selected by RSA to serve on the Board of Managers in October of
2007. Mr. Stein is a co-founder of IntraMicron and serves as the Chief Executive Officer. Mr. Stein holds a B.S. degree in Business Administration from Auburn University and a J.D. from the University of Virginia School of Law.

Don Farringtonassumed the position of Senior Vice President, Sales, in February 2004. He hasserved as Vice President of Sales and
Marketing for Wise Alloys since February 2001 and as Sales Manager from May 1999 to February 2001. From August 1998 to May 1999, Mr. Farrington served as General Manager of Aluminum of Nittetsu Shoji America, Inc. From 1991 to 1998,
Mr. Farrington was Vice President of Sales and Marketing for Ravenswood Aluminum. From 1976 to 1990, Mr. Farrington held sales and marketing positions with Kaiser Aluminum. He holds a B.A. degree from the University of Kansas.

Sam Glasscockwas named Executive Vice President/Financial Operations in June 2006 after having served as Senior Vice President and Controller
since 1999. He has 31 years of aluminum industry experience in various positions in accounting, finance, manufacturing and transportation. He has a B.S. degree in industrial management and accounting from Auburn University and a MBA from the
University of North Alabama.

Phillip Tays serves as Executive Vice President, Manufacturing. He joined Wise Alloys when the
Listerhill Facility was purchased from Reynolds Metal Company in 1999. He has 33 years of manufacturing, casting and maintenance management experience in Reynolds Metals Company Reclamation plants in Alabama, Virginia and Brazil. Mr. Tays
earned a business administration degree from Athens State University.

Michael Pattersonwas named Senior Vice President, Strategic
Planning in February 2004. He began working at the Reynolds Metal Companys alloys plant in 1977. He has a bachelors of science degree in mechanical engineering from the University of Alabama. His career includes experience in
engineering, production and maintenance management. Prior to working for Reynolds, he worked for Exxon Mobil Corporation at their Baton Rouge refinery.

Kenneth Stastnywas named Chief Financial Officer in June 2006. He joined the Company in 1998 as Controller of Wise Recycling. He served as Assistant Treasurer of the Company from 1999 until February 2004



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when he assumed the position of Treasurer. Prior to joining the Company, he served as audit manager at Ernst & Young LLP. He has 15 years of
experience in financial services and risk management. He holds a bachelors degree of business administration in both accounting and finance from Loyola College of Baltimore, Maryland.

Richard Weaver serves as Executive Vice President, Development and Risk Management. He joined the Company in 1982 and held various trading and
executive management positions. He served as President of Wise Recycling from its inception to mid-2000. Prior to joining the Company, Mr. Weaver was employed by Revere Copper and Brass in sales and marketing positions for both primary and
semi-fabricated products. Mr. Weaver has a bachelors degree in Government from Hamilton College.

Robert David joined the
Company in 1979 and currently serves as Vice President, National Accounts. He has been a director for the Institute of Scrap Recycling Industries, previously holding the position of Chairman of the non-ferrous division. Previously, Mr. David
worked as a stock and commodity broker for Bach & Co., Shearson Hayden Stone, and is a former member of the Chicago Board of Trade.

Management
Board

Pursuant to Wise Groups operating agreement, Silver Knot, LLC has the right to appoint five members to Wise Groups
management board, one of whom is to be a designee of Wise Metals Co. Inc., reasonably acceptable to Silver Knot, LLC. Gerald David currently serves as Wise Metals Co.s designee. David DAddario, our Chairman, controls Silver Knot, LLC and
appoints its designees. Additionally, as a result of their $75 million investment, the RSA has a right to appoint two members to the Companys management board.

The day-to-day operations of Wise Group are carried out by its executive officers who serve at the discretion of its management board. Certain major decisions require the consent of the management board.

The Wise Group operating agreement provides that no officer may, without the prior approval of the management board, (i) enter into or modify any
affiliated transactions or any transactions the length of which exceeds six months and the value of which exceeds $100,000, (ii) lend money, incur indebtedness, dispose of assets, or incur expenditures, each in excess of $100,000 for any one
transaction, (iii) make distributions or accept capital contributions, (iv) acquire or dispose of any securities, (v) amend the operating agreement, (vi) approve a merger or consolidation with another person or a sale of
substantially all of Wise Groups assets, (vii) remove or replace or adjust the compensation of any officers, (viii) reorganize Wise Group, (ix) invest surplus funds, (x) materially change Wise Groups accounting
principles, (xi) purchase or sell any real property, (xii) enter into any legal proceeding on behalf of Wise Group, or (xiii) take any action specifically reserved for the management board under the operating agreement.

Except where the Wise Group operating agreement states otherwise, all decisions of the Wise Group management board require a majority vote of the Wise
Group management board.

Manager Compensation

Messrs. DAddario, Cameron, Garvey and David currently comprise the Wise Group management board. David DAddario is paid $162,500 annually for his service on the Wise Group management board in addition to his salary of $1,062,000
and benefits he receives as an employee of Wise Group. John Cameron is not separately compensated for his service as a member of the Wise Group management board and is solely compensated pursuant to his employment agreement described below. Gregory
Garvey is paid $162,500 annually for his service on the Wise Group management board. Gerald David is not separately compensated for his service on the Wise Group management board and is solely compensated pursuant to his employment agreement
described below. Compensation for the new board members appointed by the RSA have not yet been determined and approved.



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Committees

Gregory Garvey is Chairman and sole member of the Companys Audit Committee, reporting to the management board. Mr. Garvey is a financial expert as such term is defined by the Securities and Exchange Commission and also serves on
the management board.

Code of Ethics

We do not have a formal code of ethics for management, nor is there any requirement that we have one under the law or the requirements of any securities exchange on which our debt securities are listed. Because we have no publicly traded
equity securities (substantially all of which are held by the managers or senior executives) and because the management group is extremely small and works closely with the board of managers, the board of managers has concluded that a formal policy
would be less effective than the less formal regular interaction between senior management and the board of managers.



|Item 11. | Executive Compensation
|-------- | ----------------------

Compensation Discussion &
Analysis

An executive compensation committee comprised of the Companys chairman and executive vice president/chief strategic
officer administers our executive compensation program. This committee, reporting to the management board, oversees our compensation and benefit plans, reviews compensation levels and makes all compensation decisions relating to Wises
executive officers, including the grant of any incentive compensation. Compensation for Mr. DAddario who serves as the Companys Chief Executive Officer, is subject to limitations as prescribed in the Wise Groups operating
agreement. Compensation levels and goals and objectives are reviewed and approved annually. Significant goals and related achievements affecting executive compensation included progress made to realign customer contracts to more appropriately
reflect changing market conditions. Other achievements centered around managing company performance and obtaining adequate financing for the Company.

The Wise executive compensation committee and management board believe that compensation levels and benefit plans should be such that the Company is able to attract and retain highly qualified management employees and
motivate those employees by tying executive compensation to Company performance. Wise compensates its executives through a combination of salary, bonus, equity incentive and benefit plan compensation.

Salary: Each executive officer is paid an annual cash salary that is consistent with the salary paid to similarly positioned executive officers at
comparable companies. The Company examines external market data provided by various salary surveys for companies of similar size and structure that operate in similar industries. Wise pays its executives a salary to ensure that each executive
officer receives some compensation that is not tied to the risk inherent in pay for performance compensation, which ensures we are able to attract and retain highly qualified executive officers.

Bonus: Wises executive compensation committee and management board has discretion to award cash bonuses to its executive officers. The amounts of
such awards are determined after reviewing each executive officers individual performance and contribution to the achievement of Company goals and objectives. Bonus compensation is designed to align the interests of the Companys
executive officers with the Companys goal of improved performance.

Equity Incentives: Wises executive compensation committee
and management board has discretion to award equity incentives to its executive officers. The amount of such award is determined after reviewing each executive officers role in achieving future goals of the company in light of individual
performance and contribution to the achievement of Company past goals and objectives. Equity incentive compensation is designed to align the interests of the Companys executive officers with the Companys strategic initiatives.



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Benefit Plans: Each executive officer is entitled to compensation in the form of various benefit plans
that are consistent with benefits offered to similarly positioned executive officers at comparable companies. The Company examines external market data provided by various benefit surveys for companies of similar size and structure that operate in
similar industries. Wise compensates its executives with benefits to ensure that each executive officer receives some compensation that is not tied to the risk inherent in pay for performance compensation, which ensures we are able to attract and
retain highly qualified executive officers.

Compensation is paid by Wise Group in respect of Wise Groups executive officers and
allocated to Wise Alloys based on each such persons duties on behalf of Wise Alloys. The following table sets forth the cash and non-cash compensation paid or incurred on Wise Groups behalf to its Chief Executive Officer, Chief Financial
Officer and each of the three other most highly compensated employee executive officers, as well as compensation paid to Gregory Garvey and Gerald David for whom disclosure would have been required to be provided if such persons were serving as
executive officers of the Company in 2007, each of whom made more than $100,000 in 2007:

Summary Compensation Table



|                                                                                |  |                                |  |                          |                             |             |                                         |   |                                   |                             |  |       |  |   |                          |            
|------------------------------------------------------------------------------- |  | ------------------------------ |  | ------------------------ | --------------------------- | ----------- | --------------------------------------- | - | --------------------------------- | --------------------------- |  | ----- |  | - | ------------------------ | -----------
|                                                                                |  | AnnualCompensation200720062005 |  | AnnualSalary200720062005 |                             |             | Long-TermCompensationAwards200720062005 |   | All otherCompensation200720062005 |                            
|Name and Principal Position                                                     |  | TotalCompensation              |  | Salary                   |                             |             | Bonus                                   |   |                                   | SecuritiesUnderlyingOptions |  |       | 
|David DAddario Chief Executive Officer, Chairman and Manager                   |  | 1,215,3001,215,500682,500      |  | $                        | 1,215,300 1,215,500 682,500 | (1) (1) (1) |                                         | $ | 0 0 0                             |                             |  |    |  | $ | 0 0 0                    |            
|                                                                                |  |                                |  |                          |                            
|Kenneth Stastny Chief Financial Officer                                         |  | 250,000130,000125,000          |  | $                        | 170,000 130,000 125,000     |             |                                         | $ | 80,000 0 0                        |                             |  |    |  | $ | 0 0 0                    |            
|                                                                                |  |                                |  |                          |                            
|John J. Cameron Vice Chairman and Manager                                       |  | 375,000378,000435,000          |  | $                        | 75,000 78,000 135,000       |             |                                         | $ | 0 0 0                             |                             |  |    |  |   | $300,000 300,000 300,000 | (2) (2) (2)
|                                                                                |  |                                |  |                          |                            
|Danny Mendelson Executive Vice President, Chief Strategic Officer and Secretary |  | 240,000240,000240,000          |  | $                        | 240,000 240,000 240,000     |             |                                         | $ | 0 0 0                             |                             |  |    |  | $ | 0 0 0                    |            
|                                                                                |  |                                |  |                          |                            
|Richard Weaver Executive Vice President, Non-Core Businesses                    |  | 265,000245,000225,000          |  | $                        | 245,000 245,000 225,000     |             |                                         | $ | 20,000 0 0                        |                             |  |    |  | $ | 0 0 0                    |            
|                                                                                |  |                                |  |                          |                            
|Gregory Garvey Manager                                                          |  | 165,500162,500192,500          |  | $                        | 165,500 162,500 162,500     |             |                                         | $ | 0 0 30,000                        | (3)                         |  |    |  | $ | 0 0 0                    |            
|                                                                                |  |                                |  |                          |                            
|Gerald M. David Manager                                                         |  | 240,000242,000300,000          |  | $                        | 240,000 242,000 300,000     |             |                                         | $ | 0 0 0                             |                             |  |    |  | $ | 0 0 0                    |            



|(1) | Of the salary compensation Mr. DAddario received in 2007, 2006, and 2005, $162,500 was paid in respect of his service as a member of the Wise Group management board and
the remaining was paid in respect of his service as Chairman.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Mr. Cameron received $300,000 in additional cash compensation in 2007, 2006 and 2005 pursuant to his employment agreement. See Employment Agreements below.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Delayed payment of 2004 bonus.
|--- | ------------------------------



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Indemnification

Under the Wise Group operating agreement, Wise Group has agreed to indemnify and hold harmless each member and economic interest holder, including their affiliates, each member of the management board and all officers
of Wise Group to the fullest extent permitted by law from and against any loss, liability, damage or expense incurred or suffered by any of them by reason of any acts or omissions or alleged acts or omissions arising out of their activities on
behalf of Wise Group or in connection with the business operations of Wise Group, provided that the acts or omissions or the alleged acts or omissions upon which the action or threatened action, proceeding or claim is based did not involve
intentional misconduct by the indemnified party, did not permit the indemnified party to personally gain a financial profit or other advantage to which such party was not legally entitled and were not performed or committed by the indemnified party
in knowing violation of the law or otherwise in bad faith.

Employment Agreements

Gerald David Employment Agreement. Gerald David entered into an employment agreement with Wise Group effective on October 1, 2001. This
employment agreement extended through September 30, 2003 and is automatically extended thereafter unless either party gives 90 days prior notice of intent to terminate. Wise Group may terminate the employment agreement for cause and
Mr. David may terminate the employment agreement on 30 days notice in the event Wise Group breaches the employment agreement and fails to remedy any such breach. In addition, pursuant to the agreement for the purchase of Wise Metals Co.s
interest in Wise Metals Group by Silver Knot, LLC, Wise Group may not terminate Mr. Davids employment agreement until Wise Metals Co. has received a stated minimum purchase price for Wise Group. Under Mr. Davids employment
agreement, Mr. David receives an annual base salary of $300,000. He is eligible to participate in Wise Groups medical and all other employee benefit plans sponsored or maintained by Wise Group. Mr. Davids employment agreement
also provides for a severance payment in the event his employment is terminated in connection with a change of control of Wise Group in which Silver Knot, LLC, or its affiliates lose control of Wise Group. In such instance, if Mr. David does
not receive an amount that equals at least the minimum purchase price, Wise Group will pay Mr. David his base salary and any other sums due him through the date of his death plus a severance payment calculated as five times his base salary
discounted by the number of months remaining until the ten year anniversary of the employment agreement and divided by 120. The severance payment will be limited by the amount by which payments made to Mr. David under the purchase agreement are
less than the purchase price. Mr. Davids severance will be paid in a lump sum.

John Cameron Employment Agreement. John
Cameron entered into an employment agreement with Wise Group effective on April 1, 1999. This term of this employment agreement extended through March 31, 2005. Mr. Camerons employment agreement provides that, as of
July 15, 2002 and continuing until the date he receives a total of $2.5 million, he is entitled to receive, in addition to his salary, $25,000 per month in lieu of the severance that was to be paid to him as of March 31, 2003. Other
long-term obligations include certain future payments related to Mr. Camerons employment agreement in the amount of $875 thousand.

Under his employment agreement, Mr. Cameron agreed to certain non-competition and non-solicitation provisions which were effective during the employment term and which continue from two to three year periods thereafter. Under the
non-competition provision, Mr. Cameron may not be employed in, or engaged in, or in any manner connected to or concerned with, directly or indirectly, as a principal, agent, consultant, advisor or owner of any business in the aluminum
recycling, reclamation or rolling business. Under the non-solicitation provisions, Mr. Cameron may not directly or indirectly solicit any customer or supplier of Wise Group to cease its business with Wise Group or directly or indirectly solicit
current or former employee of Wise Group to join a competitor in the aluminum recycling, reclaiming or rolling businesses.

Non-competition Agreements

Wise Group is not a party to any non-competition or non-solicitation agreements with any current employees. See Employment
Agreements above for a description of a non-competition arrangement with a former officer of Wise.



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Potential Payments upon termination or change-in-control

Mr. David is entitled to a payment upon a change-in-control of Wise. See Employment Agreements above. No other named executive officer is
entitled to any payments upon his termination or upon a change-in-control of Wise.

Manager Compensation

For a description of current compensation paid to the members of our management board, see Item 10 Directors, Executive Officers and Corporate
Governance above. Manager compensation levels are determined annually by our Chief Executive Officer.

401(k) Plan

We maintain two 401(k) savings plans, one for nonunion employees and one for union employees. These plans are cash or deferred arrangements intended to be
qualified under Section 401(k) of the Internal Revenue Code of 1986, as amended.

The nonunion 401(k) plan provides that an eligible
employee may begin to make salary reduction contributions after the first full calendar month following date of hire. Participants may authorize us to contribute a percentage of their compensation, up to 18%, to the nonunion 401(k) plan on their
behalf. The nonunion plan provides for us to make an employer contribution to eligible employees each year based on age and compensation.

The union 401(k) plan provides that an eligible employee may begin to make salary reduction contributions when he satisfies the probationary period specified in the collective bargaining agreement. Participants may authorize us to
contribute a percentage of their compensation, up to 18%, to the union 401(k) plan on their behalf. The union plan provides for us to make an employer contribution to eligible employees each year in an amount equal to 54 cents for each hour worked.

For those employees in the Carpenters Union, effective January 1, 2004, the employer contributes an additional 48 cents for each hour
paid.

Participants in both the nonunion and union 401(k) plans direct the investment of their accounts, including both employee and
employer contributions, among a wide array of mutual fund investment options, and can make changes to such investments as they deem appropriate. Participants in the nonunion 401(k) plan who were employed on April 1, 1999 are 100% vested in
their employer contributions. All other participants in the nonunion 401(k) plan become 100% vested in their employer contributions after five years of vesting service, or upon disability or death. Participants in the union 401(k) plan are 100%
vested in their employer contributions at all times.

Participants in both the nonunion and union 401(k) plans are eligible to receive
company match money. We will contribute $0.50 per $1.00 of employee contribution up to a maximum employee contribution of 6% of gross earnings. This benefit was effective January 1, 2003 for the union 401(k) plan and July 28, 2003 for the
nonunion 401(k) plan.

Pension Plan

Effective April 1, 1999, we established a defined benefit pension plan that covers essentially all union employees. The plan provides certain levels of benefits based on years of service and wage levels, but does not provide benefits
for any prior service. In addition, defined contribution plans for both union and nonunion employees were established.



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In 2003 we established negotiated defined contributions for certain union employees to multi-employer
union pension plans. This was done in exchange for freezing service time and pension factor in the aforementioned defined benefit plan as of the first quarter of 2004 and eliminating post retirement benefits for affected employees.

We also established post retirement benefit plans for all hourly and salaried employees on April 1, 1999. The union employees who become eligible to
retire under the defined benefit plan and are not a part of the unions that have elected the multi-employer option will retain health benefits and certain other benefits for life. Salaried employees who retire after age 60 with a combined 10 years
service with Wise Alloys LLC and the previous owner of the Wise Alloys facilities will be eligible for medical benefits until age 65.

Our
funding policy for these plans is to contribute negotiated amounts to the multi-employer funds and amounts necessary to meet minimum funding requirements of the Employee Retirement Income Security Act for the defined benefit plans but not to exceed
the maximum deductible amount allowed by the Internal Revenue Code.

Compensation Committee Interlocks and Insider Participation

Executive compensation is determined by the executive compensation committee, reporting to the management board, and oversees compensation and benefit
plans, reviews compensation levels and makes all compensation decisions relating to Wises executive officers, including the grant of any incentive compensation. The executive compensation committee is comprised of David DAddario,
chairman and chief executive officer, and Danny Mendelson, executive vice president and chief strategic officer. David DAddario is a member of Silver Knot LLC, who along with fellow board manager Greg Garvey, also a member of Silver Knot LLC,
serve on the management board of Wise Group. Otherwise, these members of the executive compensation committee have no relationship with any other members of the management board or any other members of the executive compensation committee.

Management Board Report regarding Compensation



The management board of Wise has reviewed and discussed the Compensation Discussion and Analysis with management and based on such review and discussion
has included the Compensation Discussion and Analysis in this Form 10-K.

David F. DAddario

John J. Cameron

Gregory Garvey

Gerald M. David

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The table below sets forth certain information as of December 31, 2007, concerning the beneficial ownership of equity interests in Wise Group, on a fully diluted basis by: each person known by Wise Group to own beneficially more than
five percent of the membership interests; its Chief Executive Officer, Chief Strategic Officer and its three other most highly compensated executive officers; each of its managers; and all of its executive officers and managers as a group.

A person or group is deemed to have beneficial ownership of any membership interests when the person or group has the right to acquire
them within 60 days after the date above. For the purpose of computing the percentage of outstanding membership interests held by each person or group named in the table below, any membership interests which the person or group has a right to
acquire within 60 days after the date above are deemed to be outstanding.



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Common Interest



|                                                                      |  |                        |  
|--------------------------------------------------------------------- |  | ---------------------- | -
|Name and Address of Beneficial Owners(1)                              |  | Percentage ofOwnership |  
|Silver Knot, LLC(2)(3) 10 Middle Street Bridgeport, Connecticut 06604 |  | 79.9                   | %
|                                                                      | 
|David F. DAddario(4)                                                 |  | 79.9                   | %
|                                                                      | 
|Gregory Garvey(5)                                                     |  | 79.9                   | %
|                                                                      | 
|Danny Mendelson(6)                                                    |  | 8.3                    | %
|                                                                      | 
|John J. Cameron(7)                                                    |  | 6.7                    | %
|                                                                      | 
|Richard Weaver                                                        |  | 1.1                    | %
|                                                                      | 
|Kenneth Stastny                                                       |  | *                      |  
|                                                                      | 
|Gerald M. David                                                       |  | *                      |  
|                                                                      | 
|All of Wise Groups executive officers and managers as a group        |  | 99.7                   | %
|                                                                      | 
|Others                                                                |  | 0.3                    | %



|* | Less than 1.0%
|- | --------------

|(1) | Except as otherwise indicated, the address for each of the named security holders is 857 Elkridge Landing Road, Suite 600, Linthicum, Maryland 21090.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | David F. DAddario and certain of his family members and Gregory Garvey and certain of his family members collectively own 100% of Silver Knot, LLC. Mr. DAddario has
full management control of Silver Knot, LLC pursuant to its operating agreement.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | In December, 2001, Silver Knot, LLC entered into an agreement with Wise Metals Co. to acquire its 51.29% equity interest in Wise Group. Silver Knot, LLC pledged 61.2% of its equity
interest in Wise Group to Wise Metals to secure its payment obligations under the agreement. According to the terms of the pledge, Silver Knot, LLC retains voting rights for its interest and the right to receive distributions, subject to customary
events of default.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | David F. DAddario holds his beneficial membership interests in Wise Group through his interest in Silver Knot, LLC.
|--- | --------------------------------------------------------------------------------------------------------------------

|(5) | Gregory Garvey holds his beneficial membership interests in Wise Group through his interest in Silver Knot, LLC.
|--- | ----------------------------------------------------------------------------------------------------------------

|(6) | Danny Mendelsons interest is comprised of a 5.3% membership interest and 2.8% economic interest.
|--- | -------------------------------------------------------------------------------------------------

|(7) | John J. Camerons interest is comprised of a 3.1% membership interest and a 3.5% economic interest. Part of this interest is held in trust with his family. His family disclaims
beneficial ownership of this interest.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Preferred Interest



|                                                                                            |  |                        |  
|------------------------------------------------------------------------------------------- |  | ---------------------- | -
|Name and Address of Beneficial Owners(1)                                                    |  | Percentage ofOwnership |  
|The Teachers Retirement Systems of Alabama(1) 135 South Union Street Montgomery, AL 36130  |  | 67                     | %
|                                                                                            | 
|The Employees Retirement Systems of Alabama(1) 135 South Union Street Montgomery, AL 36130 |  | 33                     | %



|(1) | Cumulative-convertible 10 percent PIK preferred membership interests of the Company. The preferred interest is convertible into 25 percent of the common interest of the Company. The
Company has the right to call the preferred membership interest after seven years at the cost of the greater of the investment plus any accrued PIK dividends or the fair market value of the preferred interest on an as converted basis.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Item 13. Certain Relationships and Related Transactions and Director Independence.

Effective October,
2006, the Company entered into a Dry Lease Agreement (the Dry Lease) to charter up to 175 hours per year of a Dassault Falcon 200 (the Plane). The Plane is owned by WDA LLC (WDA), a company primarily owned by
David DAddario, our Chief Executive Officer and President. Under the Dry Lease Wise has the first right to use the Plane. Wise pays direct operating costs for actual use, including fuel and crew costs which approximate $3,800 per hour. These
costs will vary based upon the distance and number of days of the trip. In addition, Wise pays a flat fee for actual maintenance and management fees based on its percentage use of the plane, 60%, based on total availability of 300 hours, of
approximately $2,500 per hour. In addition, Wise pays $1,500 per hour for miscellaneous expenses, including training and insurance. The Dry Lease extends through September 30, 2011, but may be cancelled upon 30 days notice. The Company used the
Plane for 215 hours in the year ended December 31, 2007. The Company has no obligation to use the Plane for any minimum number of hours. Based upon quotes from other fractional share charter operators, the Company believes that this transaction
reflects arms length terms.

Transactions with Management.

Robert David is the brother of Gerald David, a Manager of Wise Group. Robert David is employed by Wise Group as Vice President, National Accounts and was paid $225,000 in salary and bonus in 2007.

On April 25, 2008, the Company entered into an Amendment No. 13 to its revolving credit facility (Amendment No. 13) to
increase the maximum credit under the loan from $207.5 million to $278 million. Under Amendment No. 13, the applicable interest rates for the loan will range either from 0.50%-1.00% over the prime interest rate or 2.75%-3.25% over the LIBOR
rate, and will be based upon the EBITDA of the Company for the immediately preceding two (2), three (3) or four (4) fiscal quarter periods. To accommodate the increased maximum credit, certain sublimits in the revolving credit facility
have been increased. The term of the credit facility has also been extended from May 5, 2009 to May 5, 2010. Additionally, breach of the covenant requiring that the Company furnish to the Agent under the loan agreement audited and
unaudited consolidated financial statements of the Company and its subsidiaries within ninety days of the end of the fiscal year ended December 31, 2007 was waived.

The RSA is participating as a lender under the credit facility with a commitment of $96 million, and in exchange, the Company and the RSA agreed to enter into an amendment to the existing master equipment lease to
increase the amount outstanding under the lease by $4 million and to increase the interest rate under the lease from 10.7% to 13.7%. The master equipment lease, as amended, now expires May 5, 2010. In addition, the Company and the RSA have
entered into a fee letter agreement where the Company has agreed to pay the RSA certain deferred commitment, closing and consulting fees on a monthly basis which, in conjunction with the increased interest rate under the amended master equipment
lease, will ensure that the rate of return for the amount outstanding under the RSA commitment equals, but does not exceed, 8.5%.

Effective October, 2007, the RSA had purchased $75 million of cumulative-convertible 10% PIK preferred membership interests of the Company. The preferred interest is convertible into 25 percent of the common interest of the Company. The
Company has the right to call the preferred membership interest after seven years at the cost of the greater of the investment plus any accrued PIK dividends or the fair market value of the preferred interest on an as converted basis. Under the
Third Amended Limited Liability Company Agreement, the RSA is entitled to appoint 2 of the 7 members of the management board and the RSA, the other members and economic interest holders of the Company are entitled to the right of first refusal and
certain tag along and drag along rights in connection with the sale of any interest in the Company. The Third Amended Limited Liability Company Agreement in incorporated by reference to Exhibit 3.2 of this Quarterly Report on Form 10-Q.



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Item 14. Principal Accountant Fees and Services.

The following is a summary of the fees billable to the
Company by PricewaterhouseCoopers LLP for professional services rendered for the fiscal year ended December 31, 2007 and by Ernst & Young LLP for the fiscal year ended December 31, 2006:



|                   |  |           |         |           |   |        
|------------------ |  | --------- | ------- | --------- | - | -------
|Fee Category       |  | 2007 Fees |         | 2006 Fees
|Audit Fees         |  | $         | 618,250 |           | $ | 580,065
|Audit-Related Fees |  |           |        |           |   |       
|Tax Fees           |  |           |        |           |   |       
|All Other Fees     |  |           |        |           |   |       
|                   |  |           |         |           |   |        
|Total Fees         |  | $         | 618,250 |           | $ | 580,065
|                   |  |           |         |           |   |        

Audit Fees. These consist of fees billed for professional services rendered for the audit
of the Companys consolidated financial statements, review of the interim consolidated financial statements included in the quarterly reports on Form 10-Q for the respective fiscal years and services provided by the independent registered
public accounting firm in connection with regulatory filings.

Audit-Related Fees. These consist of fees billed for assurance and
related services that are reasonably related to the performance of the audit or review of the Companys consolidated financial statements and are not reported under Audit Fees. These services include consultations related to
internal control and compliance procedures, due diligence related to mergers and acquisitions and consultations concerning financial accounting and reporting standards.

Tax Fees. These consist of fees billed for professional services for tax compliance, tax advice and tax planning.

All Other Fees. These consist of fees for services not captured in the other categories.

The
Company changed audit firms from Ernst & Young LLP to PricewaterhouseCoopers LLP during the third quarter review. Fees charged by Ernst & Young during 2007 were $140,000.

Policy on Audit Committee Pre-Approval of Audit Services and Permissible Non-Audit Services of Independent Registered Public Accounting Firm

The Audit Committees policy is to pre-approve all audit and permissible audit related and non-audit services performed by the independent registered
public accounting firm. Prior to engagement of the independent registered public accounting firm for the next years audit, the independent registered public accounting firm provides to the Audit Committee the scope of the proposed audit and
proposed related fees for services expected to be rendered during that year within each of four categories of services for approval. The fees are budgeted and the Audit Committee requires the independent registered public accounting firm and
management to report actual fees versus the budget periodically throughout the year by category of service. The Audit Committee is also informed routinely as to the services actually provided by the independent registered public accounting firm
pursuant to this pre-approval process. The Audit Committees prior approval must be obtained before the scope or cost of pre-approved services is increased and for additional permissible non-audit services for which a need arises during the
course of the year.

In determining whether to pre-approve any given services, the Committee considers whether such services are consistent
with the continued independence of the independent registered public accounting firm under the SECs rules, whether the independent registered public accounting firm is best positioned to provide the most effective and efficient service, and
whether the performance of the service by the registered public accounting firm might enhance the Companys ability to manage or control risk or improve audit quality.



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Item 15. Exhibits and Financial Statement Schedules.

(a) List of Financial Statements, Financial
Statement Schedules, and Exhibits

(1) List of Financial Statements

See Index to Consolidated Financial Statements in Item 8, Financial Statements And Supplementary Data.

(2) List of Financial Statement Schedules

The following financial statement schedule of the Company is included herein:

Schedule II
 Valuation of Qualifying Accounts

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

(3)
Exhibits

The following exhibits are either included in this report or incorporated herein by reference as indicated below:



|     |  |                                                                                                                                                                                                                                                           
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.1  |  | Purchase Agreement, dated April 30, 2004, by and among the Issuers, the Guarantors and the Initial Purchasers (incorporated by reference to Exhibit 1.1 to the Companys Registration
Statement on Form S-4 filed on July 23, 2004)                       
|     | 
|3.1  |  | Second Amended and Restated Limited Liability Company Agreement of Wise Metals Group LLC (incorporated by reference to Exhibit 3.1 to the Companys Registration Statement on Form S-4/A
filed on September 29, 2004)                                     
|     | 
|3.2  |  | Third Amended and Restated Limited Liability Agreement of the Company dated October 5, 2007 (incorporated by reference to Exhibit 3.2 to the Companys Quarterly Report on Form 10-Q for the
quarter ended September 30, 2007)                            
|     | 
|3.2a |  | Certificate of Formation of Wise Metals Holdings LLC filed with the Delaware Secretary of State on February 1, 1999 (incorporated by reference to Exhibit 3.2a to the Companys
Registration Statement on Form S-4 filed on July 23, 2004)                
|     | 
|3.2b |  | Certificate of Amendment of Wise Metals Holdings LLC (incorporated by reference to Exhibit 3.2b to the Companys Registration Statement on Form S-4 filed on July 23,
2004)                                                                               
|     | 
|3.2c |  | Articles of Merger of Wise Metals Group LLC (incorporated by reference to Exhibit 3.2c to the Companys Registration Statement on Form S-4 filed on July 23, 2004)                                                                                        
|     | 
|3.3  |  | Limited Liability Company Agreement of Listerhill Total Maintenance Center LLC (incorporated by reference to Exhibit 3.3 to the Companys Registration Statement on Form S-4 filed on
July 23, 2004)                                                      
|     | 
|3.4  |  | Certificate of Formation of Listerhill Total Maintenance Center LLC filed with the Delaware Secretary of State on September 30, 2003 (incorporated by reference to Exhibit 3.4 to the
Companys Registration Statement on Form S-4 filed on July 23, 2004)
|     | 
|3.5  |  | Limited Liability Company Agreement of Wise Warehousing, LLC (incorporated by reference to Exhibit 3.5 to the Companys Registration Statement on Form S-4 filed on July 23,
2004)                                                                        
|     | 
|3.6  |  | Certificate of Formation of Wise Warehousing, LLC filed with the Delaware Secretary of State on December 22, 2003 (incorporated by reference to Exhibit 3.6 to the Companys
Registration Statement on Form S-4 filed on July 23, 2004)                   



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|      |  |                                                                                                                                                                                                                                                    
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.7   |  | Limited Liability Company Agreement of Wise Alloys LLC (together with amendment 3 thereto) (incorporated by reference to Exhibit 3.7 to the Companys Registration Statement on Form S-4
filed on July 23, 2004)                                   
|      | 
|3.8   |  | Certificate of Formation of Wise Alloys LLC filed with the Delaware Secretary of State on December 9, 1998 (incorporated by reference to Exhibit 3.8 to the Companys Registration
Statement on Form S-4 filed on July 23, 2004)                   
|      | 
|3.9   |  | Amended and Restated Limited Liability Company Agreement of Wise Recycling West, LLC (incorporated by reference to Exhibit 3.9 to the Companys Registration Statement on Form S-4 filed on
July 23, 2004)                                         
|      | 
|3.10a |  | Certificate of Formation of Wise Recycling West, LLC filed with the Delaware Secretary of State on December 27, 2001 (incorporated by reference to Exhibit 3.10a to the Companys
Registration Statement on Form S-4 filed on July 23, 2004)       
|      | 
|3.10b |  | Certificate of Amendment of Certificate of Formation of Wise Recycling West, LLC (incorporated by reference to Exhibit 3.10b to the Companys Registration Statement on Form S-4 filed on
July 23, 2004)                                           
|      | 
|3.11  |  | Limited Liability Company Agreement of Wise Recycling Texas, LLC (incorporated by reference to Exhibit 3.11 to the Companys Registration Statement on Form S-4 filed on July 23, 2004)                                                            
|      | 
|3.12  |  | Certificate of Formation of Wise Recycling Texas, LLC filed with the Delaware Secretary of State on June 4, 2002 (incorporated by reference to Exhibit 3.12 to the Companys
Registration Statement on Form S-4 filed on July 23, 2004)            
|      | 
|3.13  |  | Second Amended and Restated Limited Liability Company Operating Agreement of Wise Recycling, LLC (incorporated by reference to Exhibit 3.13 to the Companys Registration Statement on Form
S-4 filed on July 23, 2004)                            
|      | 
|3.14  |  | Articles of Organization of Wise Recycling, LLC filed with the Maryland Secretary of State on January 20, 1998 (incorporated by reference to Exhibit 3.14 to the Companys Registration
Statement on Form S-4 filed on July 23, 2004)              
|      | 
|3.15  |  | Certificate of Incorporation of Wise Alloys Finance Corporation filed with the Delaware Secretary of State on April 18, 2002 (incorporated by reference to Exhibit 3.15 to the Companys
Registration Statement on Form S-4 filed on July 23, 2004)
|      | 
|3.16  |  | Bylaws of Wise Alloys Finance Corporation (incorporated by reference to Exhibit 3.16 to the Companys Registration Statement on Form S-4 filed on July 23, 2004)                                                                                   
|      | 
|4.1   |  | Indenture, dated May 5, 2004, by and among the Issuers, the Guarantors and the Trustee (incorporated by reference to Exhibit 4.1 to the Companys Registration Statement on Form S-4
filed on July 23, 2004)                                       
|      | 
|4.2   |  | Registration Rights Agreement, dated as of May 5, 2004, by and among the Issuers, the Guarantors and the Initial Purchasers (incorporated by reference to Exhibit 4.2 to the Companys
Registration Statement on Form S-4 filed on July 23, 2004)  
|      | 
|10.1  |  | General Security Agreement, dated as of May 5, 2004, by the Issuers and the Guarantors in favor of the Trustee (incorporated by reference to Exhibit 10.1 to the Companys Registration
Statement on Form S-4 filed on July 23, 2004)              
|      | 
|10.2  |  | Intercreditor Agreement, dated May 5, 2004, by and between the Trustee and Congress Financial Corporation (incorporated by reference to Exhibit 10.2 to the Companys Registration
Statement on Form S-4 filed on July 23, 2004)                   
|      | 
|10.3  |  | Collateral Assignment of Acquisition Agreement, dated May 5, 2004, by Wise Alloys LLC in favor of the Trustee (incorporated by reference to Exhibit 10.3 to the Companys Registration
Statement on Form S-4 filed on July 23, 2004)               



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|      |  |                                                                                                                                                                                                                                                                                                                                 
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.4  |  | Investment Property Pledge and Security Agreement, dated May 5, 2004, by Wise Alloys LLC in favor of the Trustee (incorporated by reference to Exhibit 10.4 to the Companys
Registration Statement on Form S-4 filed on July 23, 2004)                                                                                         
|      | 
|10.5  |  | Fee and Leasehold Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated May 5, 2004, by Wise Alloys LLC in favor of the Trustee (incorporated by reference
to Exhibit 10.5 to the Companys Registration Statement on Form S-4 filed on July 23, 2004)                                         
|      | 
|10.6  |  | Pledge and Security Agreement, dated May 5, 2004, by the Issuers and the Guarantors in favor of the Trustee (incorporated by reference to Exhibit 10.6 to the Companys Registration
Statement on Form S-4 filed on July 23, 2004)                                                                                              
|      | 
|10.7  |  | Trademark Collateral Assignment and Security Agreement, dated May 5, 2004, by and between Wise Alloys LLC and the Trustee (incorporated by reference to Exhibit 10.7 to the Companys
Registration Statement on Form S-4 filed on July 23, 2004)                                                                                
|      | 
|10.8  |  | Beverage Can Supply Letter Agreement, dated August 10, 1998 and as most recently amended April 1, 2003, by and between Ball Corporation and Wise Alloys LLC (incorporated by reference
to Exhibit 10.8 to the Companys Registration Statement on Amendment No. 1 to the Form S-4 filed on September 29, 2004)                 
|      | 
|10.9  |  | Beverage Can Supply Letter Agreement, dated April 22, 2004, by and between Crown Cork & Seal Co. and Wise Alloys LLC (incorporated by reference to Exhibit 10.8 to the
Companys Registration Statement on Amendment No. 1 to the Form S-4 filed on September 29, 2004)                                                        
|      | 
|10.10 |  | Amended and Restated Loan Agreement, dated May 5, 2004, by and among the Issuers, the Guarantors, Congress Financial Corporation, Fleet Capital Corporation and the Financial Institutions
named therein (incorporated by reference to Exhibit 10.10 to the Companys Registration Statement on Form S-4 filed on July 23, 2004)
|      | 
|10.11 |  | Employment Agreement, dated December 31, 2001, by and between Gerald David and Wise Metals Group LLC (incorporated by reference to Exhibit 10.11 to the Companys Registration Statement
on Form S-4 filed on July 23, 2004)                                                                                                    
|      | 
|10.12 |  | Employment Agreement, dated April 1, 1999, by and between John Cameron and Wise Metals Group LLC (together with amendments thereto) (incorporated by reference to Exhibit 10.12 to the
Companys Registration Statement on Form S-4 filed on July 23, 2004)                                                                     
|      | 
|10.13 |  | $720,000 Real Estate Mortgage Note, dated December 5, 2002, issued by Wise Recycling West, LLC on behalf of TOMRA of North America Finance Corporation (incorporated by reference to Exhibit
10.13 to the Companys Registration Statement on Form S-4 filed on July 23, 2004)                                                  
|      | 
|10.14 |  | Mortgage, dated December 5, 2002, by and between Wise Recycling West, LLC on behalf of TOMRA of North America Finance Corporation (incorporated by reference to Exhibit 10.7 to the
Companys Registration Statement on Form S-4 filed on July 23, 2004)                                                                        
|      | 
|10.15 |  | $720,000 Promissory Note, dated December 6, 2002, issued by Wise Recycling West, LLC on behalf of TOMRA of North America Finance Corporation (incorporated by reference to Exhibit 10.15 to
the Companys Registration Statement on Form S-4 filed on July 23, 2004)                                                            
|      | 
|10.16 |  | Deed of Trust, dated December 6, 2002, by and between Wise Recycling West, LLC on behalf of TOMRA of North America Finance Corporation (incorporated by reference to Exhibit 10.16 to the
Companys Registration Statement on Form S-4 filed on July 23, 2004)                                                                  
|      | 
|10.17 |  | Environmental Cooperation Agreement, dated March 31, 1999, by Reynolds Metals Company and Wise Alloys LLC (incorporated by reference to Exhibit 10.17 to the Companys Registration
Statement on Form S-4 filed on July 23, 2004)                                                                                               



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|      |  |                                                                                                                                                                                                                                                                                                                                                                       
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.18 |  | Technology License Agreement, dated as of March 31, 1999, between Reynolds Metals Company, Southern Reclamation Company, Inc. and Wise Alloys LLC (incorporated by reference to Exhibit 10.18
to the Companys Registration Statement on Form S-4 filed on July 23, 2004)                                                                                             
|      | 
|10.19 |  | Purchase Agreement dated as of October 31, 2003, and effective as of June 30, 2003, by and among David DAddario and John Cameron and Wise Recycling LLC (incorporated by reference
to Exhibit 10.19 to the Companys Registration Statement on Form S-4 filed on July 23, 2004)                                                                                      
|      | 
|10.20 |  | Ground Lease Agreement (Sewage Treatment Plant), dated March 31, 1999, by Reynolds Metals Company and Wise Alloys LLC (incorporated by reference to Exhibit 10.20 to the Companys
Registration Statement on Form S-4 filed on July 23, 2004)                                                                                                                         
|      | 
|10.21 |  | Ground Lease Agreement (Drinking Water Plant), dated March 31, 1999, by Reynolds Metals Company and Wise Alloys LLC (incorporated by reference to Exhibit 10.21 to the Companys
Registration Statement on Form S-4 filed on July 23, 2004)                                                                                                                           
|      | 
|10.22 |  | Ground Lease Agreement (Southern Reclamation Plant), dated March 31, 1999, by Reynolds Aluminum Partners and Wise Alloys LLC (incorporated by reference to Exhibit 10.22 to the
Companys Registration Statement on Form S-4 filed on July 23, 2004)                                                                                                                  
|      | 
|10.23 |  | Lease Agreement, dated March 31, 1999, by Reynolds Metals Company and Wise Alloys LLC (incorporated by reference to Exhibit 10.23 to the Companys Registration Statement on Form S-4
filed on July 23, 2004)                                                                                                                                                         
|      | 
|10.24 |  | Asset Purchase Agreement, dated as of December 30, 1998, among Reynolds Metals Company, Southern Reclamation Company, Inc. Reynolds Aluminum Partners and Wise Alloys LLC (incorporated by
reference to Exhibit 10.24 to the Companys Registration Statement on Form S-4 filed on July 23, 2004)                                                                     
|      | 
|10.25 |  | Amendment No. 1 to Amended and Restated Loan Agreement, dated as of June 30, 2004, by and among the Issuers, the Guarantors, Congress Financial Corporation, Fleet Capital Corporation
and the Financial Institutions named therein (incorporated by reference to Exhibit 10.25 to the Companys Registration Statement on Form S-4/A filed on September 29, 2004)    
|      | 
|10.26 |  | Accounts Purchase and Sale Agreement, dated as of June 30, 2004, by and among Wise Alloys LLC and Congress Financial Corporation (incorporated by reference to Exhibit 10.26 to the
Companys Registration Statement on Form S-4/A filed on September 29, 2004)                                                                                                       
|      | 
|10.27 |  | Employment Agreement, dated as of July 1, 2004, by and between Randall R. Powers and Wise Metals Group LLC (incorporated by reference to Exhibit 10.27 to the Companys Registration
Statement on Amendment No. 1 to the Form S-4 filed on September 29, 2004)                                                                                                        
|      | 
|10.28 |  | Amendment No. 2 to Amended and Restated Loan Agreement, dated November 10, 2004, by and among the Issuers, the Guarantors, Congress Financial Corporation and Fleet Capital Corporation
(incorporated by reference to Exhibit 10.1 to the Companys Quarterly Report on Form 10-Q for the quarter ended September 30, 2004)                                           
|      | 
|10.29 |  | Amendment No. 4 to Amended and Restated Loan Agreement, dated October 31, 2005, by and among the Issuers, the Guarantors, Congress Financial Corporation and Fleet Capital Corporation
(incorporated by reference to Exhibit 10.1 to the Companys Quarterly Report on Form 10-Q for the quarter ended September 30, 2005)                                            
|      | 
|10.30 |  | Amendment to Deed of Trust and Assignment of Deed of Trust, dated as January 10, 2005, by Wise Recycling West, LLC, to the Adams County Public Trustee for the benefit of TOMRA of North
America Finance Corporation and GAB Holding LLC (incorporated by reference to Exhibit 10.30 to the Companys Annual Report on form 10-K for the year ended December 31, 2005)



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|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                               
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.31 |  | Extension and Assignment Agreement, entered into as of January 21, 2005, by and among TOMRA of North America Finance Corporation, Wise Recycling West, LLC and GAB Holding LLC (incorporated
by reference to Exhibit 10.31 to the Companys Annual Report on form 10-K for the year ended December 31, 2005)                                                                                                                                  
|      | 
|10.32 |  | Allonge to Real Estate Mortgage Note, attached to, and made a part of that certain Promissory Note dated December 5, 2002, in the principal amount of Seven Hundred Twenty Thousand and
00/100 Dollars ($720,000.00) made by Wise Recycling West, LLC to the order of TOMRA of North America Finance Corporation (incorporated by reference to Exhibit 10.32 to the Companys Annual Report on form 10-K for the year ended December 31,
2005)
|      | 
|10.33 |  | Amendment No. 3 to Amended and Restated Loan Agreement, dated March 21, 2005, by and among the Issuers, the Guarantors, and Wachovia Corporation (formerly Congress Financial) as Agent
Corporation (incorporated by reference to Exhibit 10.33 to the Companys Annual Report on form 10-K for the year ended December 31, 2006)                                                                                                             
|      | 
|10.34 |  | Amendment No. 5 to Amended and Restated Loan Agreement, dated March 6, 2006, by and among the Issuers, the Guarantors, and Wachovia Corporation (formerly Congress Financial) as Agent
Corporation (incorporated by reference to Exhibit 10.33 to the Companys Annual Report on Form 10-K for the year ended December 31, 2005)                                                                                                              
|      | 
|10.35 |  | Amendment No. 6 to Amended and Restated Loan Agreement, dated March 31, 2006, by and among the Issuers, the Guarantors, and Wachovia Corporation (formerly Congress Financial) as Agent
Corporation (incorporated by reference to Exhibit 10.35 to the Companys Annual Report on form 10-K for the year ended December 31, 2006)                                                                                                             
|      | 
|10.36 |  | Amendment No. 7 to Amended and Restated Loan Agreement, dated April 28, 2006, by and among the Issuers, the Guarantors, and Wachovia Corporation (formerly Congress Financial) as Agent
Corporation (incorporated by reference to Exhibit 10.36 to the Companys Annual Report on form 10-K for the year ended December 31, 2006)                                                                                                             
|      | 
|10.37 |  | Amendment No. 8 to Amended and Restated Loan Agreement, dated June 12, 2006, by and among the Issuers, the Guarantors, and Wachovia Corporation (formerly Congress Financial) as Agent
Corporation (incorporated by reference to Exhibit 10.30 to the Companys Quarterly Report on Form 10-Q for the period ended June 30, 2006)                                                                                                             
|      | 
|10.38 |  | Amendment No. 9 to Amended and Restated Loan Agreement, dated August 4, 2006, by and among the Issuers, the Guarantors, and Wachovia Corporation (formerly Congress Financial) as Agent
Corporation (incorporated by reference to Exhibit 10.31 to the Companys Quarterly Report on Form 10-Q for the period ended June 30, 2006)                                                                                                            
|      | 
|10.39 |  | Amendment No. 10 to Amended and Restated Loan Agreement, dated December 31, 2006, by and among the Issuers, the Guarantors, and Wachovia Corporation (formerly Congress Financial) as
Agent Corporation (incorporated by reference to Exhibit 10.39 to the Companys Annual Report on form 10-K for the year ended December 31, 2006)                                                                                                         
|      | 
|10.40 |  | Separation Agreement and Release by and between Randall R. Powers and the Company (incorporated by reference to Exhibit 10.1 to the Companys Quarterly Report on Form 10-Q for the period
ended March 31, 2006)                                                                                                                                                                                                                              
|      | 
|10.41 |  | Master Lease Agreement dated November 13, 2006 by and among The Employees Retirement System of Alabama, The Teachers Retirement System of Alabama, Wilmington Trust Company and
the Company (incorporated by reference to Exhibit 10.41 to the Companys Annual Report on form 10-K for the year ended December 31, 2006)                                                                                                                   
|      | 
|10.42 |  | Accounts Purchase and Sale Agreement, dated as of March 31, 2006, by and among Wise Alloys LLC and Wachovia Corporation (formerly Congress Financial) as Agent Corporation (incorporated by
reference to Exhibit 10.42 to the Companys Annual Report on form 10-K for the year ended December 31, 2006)                                                                                                                                      



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|      |  |                                                                                                                                                                                                                                                                                                                                 
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.43 |  | Amendment No. 1 to Accounts Purchase and Sale Agreement, dated as of December 31, 2006, by and among Wise Alloys LLC and Wachovia Corporation (formerly Congress Financial) as Agent
Corporation (incorporated by reference to Exhibit 10.43 to the Companys Annual Report on form 10-K for the year ended December 31, 2006)  
|      | 
|10.44 |  | Amendment No. 2 to Accounts Purchase and Sale Agreement, dated as of April 9, 2007, by and among Wise Alloys LLC and Wachovia Corporation (formerly Congress Financial) as Agent
Corporation (incorporated by reference to Exhibit 10.44 to the Companys Annual Report on form 10-K for the year ended December 31, 2006)      
|      | 
|10.45 |  | Amendment No. 11 to Amended and Restated Loan Agreement, dated July 31, 2006, by and among the Issuers, the Guarantors, and Wachovia Corporation (formerly Congress Financial) as Agent
(incorporated by reference to Exhibit 10.45 to the Companys Quarterly Report on Form 10-Q for the quarter ended September 30, 2007)    
|      | 
|10.46 |  | Preferred Membership Interest Purchase Agreement dated October 4, 2007 by and among the Company, the Teachers Retirement System of Alabama and the Employees Retirement System of
Alabama (incorporated by reference to Exhibit 10.46 to the Companys Quarterly Report on Form 10-Q for the quarter ended September 30, 2007)
|      | 
|10.47 |  | Registration Rights Agreement dated October 5, 2007 by and among the Company, the Teachers Retirement System of Alabama and the Employees Retirement System of Alabama (incorporated
by reference to Exhibit 10.47 to the Companys Quarterly Report on Form 10-Q for the quarter ended September 30, 2007)                   
|      | 
|10.48 |  | Amendment No. 12 to Amended and Restated Loan Agreement, dated February 25, 2008, by and among the Issuers, the Guarantors, and Wachovia Corporation (formerly Congress Financial) as Agent *                                                                                                                                   
|      | 
|10.49 |  | Accounts Purchase and Sale Agreement, dated as of April 10, 2008, by and among Wise Alloys LLC and Wachovia Corporation (formerly Congress Financial) as Agent Corporation*                                                                                                                                                     
|      | 
|10.50 |  | Accounts Purchase and Sale Agreement, dated as of April 18, 2008, by and among Wise Alloys LLC and Wachovia Corporation (formerly Congress Financial) as Agent Corporation*                                                                                                                                                     
|      | 
|10.51 |  | Amendment No. 13 to Amended and Restated Loan Agreement, dated April 25, 2008, by and among the Issuers, the Guarantors, and Wachovia Corporation (formerly Congress Financial) as Agent *                                                                                                                                      
|      | 
|10.52 |  | Amendment No. 1 to Master Lease Agreement dated April 25, 2008, by and among The Employees Retirement System of Alabama, The Teachers Retirement System of Alabama, Wilmington Trust
Company and the Company*                                                                                                                 
|      | 
|10.53 |  | Fee letter agreement dated April 25, 2008 by and among the Employees Retirement System of Alabama, the Teachers Retirement System of Alabama and the Company*                                                                                                                                                                 
|      | 
|21    |  | List of Subsidiaries (incorporated by reference to Exhibit 21.1 to the Companys Annual Report on Form 10-K for the year ended December 31, 2005)                                                                                                                                                                               
|      | 
|31.1  |  | Section 302 CEO Certification*                                                                                                                                                                                                                                                                                                  
|      | 
|31.2  |  | Section 302 CFO Certification*                                                                                                                                                                                                                                                                                                  
|      | 
|32.1  |  | Section 906 CEO Certification*                                                                                                                                                                                                                                                                                                  
|      | 
|32.2  |  | Section 906 CFO Certification*                                                                                                                                                                                                                                                                                                  



|* | Filed herewith.
|- | ---------------

| | Portions of this document have been omitted and filed separately with the SEC pursuant to a request for confidential treatment in accordance with Rule 406 of the Securities Act.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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SIGNATURES

Pursuant to the requirements of section 13 or section 15(d) 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.



|                   |  |  |  |  |  |                                     
|------------------ |  |  |  |  |  | ------------------------------------
|                   |  |  |  |  |  | WISE METALS GROUP LLC               
|                   |  |  | 
|Dated: May 7, 2008 |  |  |  |  |  | /S/    DAVID
DADDARIO              
|                   |  |  |  |  |  | David DAddario                     
|                   |  |  |  |  |  | Chairman and Chief Executive Officer



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SIGNATURES

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 date indicated.



|                   |  |                                                                            
|------------------ |  | ---------------------------------------------------------------------------
|Dated: May 7, 2008 |  | /S/    DAVID
DADDARIO David DAddario Chairman and Chief Executive Officer
|                   | 
|                   |  | /S/    KENNETH
STASTNY Kenneth Stastny Chief Financial Officer             
|                   | 
|                   |  | /S/    JOHN
CAMERON John Cameron Vice Chairman and Manager                 
|                   | 
|                   |  | /S/    GERALD
DAVID Gerald David Manager                                   
|                   | 
|                   |  | /S/    GREGORY
GARVEY Gregory Garvey Manager                               

Supplemental Information to be Furnished with Reports Filed Pursuant to Section 15(d) of the Act by
Registrants Which Have Not Registered Securities Pursuant to Section 12 of the Act.

No annual report or proxy materials have been sent to security
holders.



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15(a)

Schedule II

Valuation and Qualifying Accounts

Allowance for Doubtful Accounts



|                  |  |                              |  |                           |   |  |                       |  |                          
|----------------- |  | ---------------------------- |  | ------------------------- | - |  | --------------------- |  | -------------------------
|Period Ending     |  | Balance atBeginningof Period |  | Chargeto Costs andExpense |   |  | DeductionsWrite Offs |  | Balance atEnding ofPeriod
|December 31, 2005 |  | 200                          |  | 860                       |   |  |                      |  | 1,060                    
|December 31, 2006 |  | 1,060                        |  | 69                        |   |  |                      |  | 1,129                    
|December 31, 2007 |  | 1,129                        |  | (598                      | ) |  |                      |  | 531                      



84