March 30, 2000

NEW CF&I, INC.
A DELAWARE CORPORATION
1000 S.W. BROADWAY BLDG.
SUITE 2200
1000 S.W. BROADWAY
PORTLAND, OREGON   97205

Commission File No. 02-20781

Securities and Exchange Commission
Document Control
450 Fifth Street NW
Washington, D.C.   20549

Gentlemen:

Pursuant to the requirements of the Securities Exchange Act of 1934, we are
transmitting herewith the attached Form 10-K.

Sincerely,

OREGON STEEL MILLS, INC.


/s/ L. Ray Adams
---------------------------------------------
L. Ray Adams
Vice President, Finance
and Chief Financial Officer
(Principal Financial and Accounting Officer)


<PAGE>

March 30, 2000

CF&I STEEL, L.P.
A DELAWARE CORPORATION
1000 S.W. BROADWAY BLDG.
SUITE 2200
1000 S.W. BROADWAY
PORTLAND, OREGON   97205

Commission File No. 02-20779

Securities and Exchange Commission
Document Control
450 Fifth Street NW
Washington, D.C.   20549

Gentlemen:

Pursuant to the requirements of the Securities Exchange Act of 1934, we are
transmitting herewith the attached Form 10-K.

Sincerely,

OREGON STEEL MILLS, INC.


/s/ L. Ray Adams
---------------------------------------------
L. Ray Adams
Vice President, Finance
and Chief Financial Officer
(Principal Financial and Accounting Officer)

<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-K

               ANNUAL REPORT FILED PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
                                 NEW CF&I, INC.
          (Exact name of registrant as specified in its charter)
          Delaware                       02-20781              93-1086900
-------------------------------------------------------------------------------
(State or other jurisdiction of   (Commission File Number)    (IRS Employer
 incorporation or organization)                           Identification Number)

   1000 S.W.Broadway, Suite 2200, Portland, Oregon              97205
-------------------------------------------------------------------------------
      (Address of principal executive offices)                (Zip Code)
                                 (503) 223-9228
-------------------------------------------------------------------------------
             (Registrant's telephone number, including area code)

                                CF&I STEEL, L.P.
             (Exact name of registrant as specified in its charter)
             Delaware                   02-20779              93-1103440
-------------------------------------------------------------------------------
(State or other jurisdiction of  (Commission File Number)     (IRS Employer
 incorporation or organization)                          Identification Number)

   1000 S.W. Broadway, Suite 2200, Portland, Oregon            97205
-------------------------------------------------------------------------------
     (Address of principal executive offices)                (Zip Code)
                                 (503) 223-9228
-------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

           SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
     Title of each class                  Name of exchange on which registered
     -------------------                  ------------------------------------
     Guarantees of 11% First                    New York Stock Exchange
     Mortgage Notes due 2003

           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
                                      None

      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 (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
                                                              Yes  X   No
                                                                  ---     ---

      State the aggregate market value of the voting stock held by
non-affiliates of the registrant.
                                 Not Applicable

      Indicate the number of shares outstanding of each of the registrant's
classes of stock as of January 31, 2000:

                                 NEW CF&I, INC.
                                 --------------

      COMMON STOCK, $1 PAR VALUE                           200
      --------------------------            --------------------------------
            (Title of Class)                  (Number of shares outstanding)
                      DOCUMENTS INCORPORATED BY REFERENCE:

      Proxy statement for Oregon Steel Mills, Inc. Annual Meeting of
Stockholders to be held April 27, 2000 is incorporated by reference into Part
III of this report.



<PAGE>
                                 NEW CF&I, INC.
                                CF&I STEEL, L.P.

                                TABLE OF CONTENTS

ITEM
----                                                                     PAGE
                                                                         ----
                                     PART I

   1.     BUSINESS..........................................................1
              General.......................................................1
              Products......................................................2
              Raw Materials ................................................3
              Marketing and Customers.......................................3
              Competition and Other Market Factors..........................4
              Environmental Matters.........................................5
              Labor Dispute.................................................6
              Employees.....................................................7

   2.     PROPERTIES........................................................7

   3.     LEGAL PROCEEDINGS.................................................8

   4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...............8
              Executive Officers of the Registrant..........................9

                                     PART II

   5.     MARKET FOR REGISTRANT'S COMMON STOCK AND
              RELATED STOCKHOLDER MATTERS..................................10

   6.     SELECTED FINANCIAL DATA..........................................10

   7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF

              FINANCIAL CONDITION AND RESULTS OF OPERATIONS................11

   7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT
              MARKET RISK..................................................15

   8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA......................16

   9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
              ON ACCOUNTING AND FINANCIAL DISCLOSURE.......................44

                                    PART III

   10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
and 11.       AND EXECUTIVE COMPENSATION...................................45

   12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
              AND MANAGEMENT...............................................46

   13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...................46

                                     PART IV

   14.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
              REPORTS ON FORM 8-K..........................................47


<PAGE>
                                     PART I

ITEM 1.  BUSINESS

GENERAL

      New CF&I, Inc. ("Company") was incorporated in the State of Delaware on
May 5, 1992 as a wholly-owned subsidiary of Oregon Steel Mills, Inc. ("Oregon
Steel"). On March 3, 1993, the Company acquired a 95.2 percent interest in a
newly formed limited partnership, CF&I Steel, L.P. ("CF&I" or "Partnership"), a
Delaware limited partnership. The remaining 4.8 percent interest was owned by
the Pension Benefit Guaranty Corporation ("PBGC"). In 1997, Oregon Steel
purchased the 4.8 percent interest owned by the PBGC, then subsequently sold .5
percent to a subsidiary of Nippon Steel Corporation ("Nippon"). The Company
purchased the railroad business assets and CF&I purchased substantially all of
the steelmaking, fabricating, and metals assets of CF&I Steel Corporation. These
assets are located in Pueblo, Colorado ("Pueblo Mill"). The Pueblo Mill is a
steel minimill which produces long-length, standard and head-hardened steel
rails, seamless tubular goods ("seamless pipe"), wire rod, and bar products. The
Pueblo Mill has melting capacity of approximately 1.2 million tons and finishing
capacity of approximately 1.1 million tons. In January 1998, CF&I assumed the
trade name of Rocky Mountain Steel Mills ("RMSM").  Due to adverse market
conditions for tubular pipe products, the Company shut down operations at its
seamless pipe mill in May 1999. There are no immediate plans to resume
operations at the mill.

       In August of 1994, the Company sold a 10 percent equity interest in the
Company to a subsidiary of Nippon. In connection with that sale, Nippon agreed
to license to the Company a proprietary technology for producing deep
head-hardened ("DHH") rail products as well as to provide certain production
equipment to produce DHH rail. In November 1995, Oregon Steel sold a 3 percent
equity interest in the Company to two companies of the Nissho Iwai Group
("Nissho Iwai"), a Japanese trading company.  Oregon Steel owns the remaining
87 percent of the Company.

       As part of its strategy in acquiring CF&I, the Company anticipated making
significant capital additions. Shortly after its acquisition in 1993, the
Company began a series of major capital improvements at the Pueblo Mill designed
to increase yields, improve productivity and quality and expand the Company's
ability to offer specialty rail, rod and bar products. The primary components of
the capital improvements at the Pueblo Mill are outlined below.

      STEELMAKING. The Company installed a ladle refining furnace and a vacuum
degassing facility and upgraded both continuous casters. During 1995, the
Company eliminated ingot casting and replaced it with more efficient continuous
casting methods which allow the Company to cast directly into blooms. These
improvements expanded the Pueblo Mill steelmaking capacity to 1.2 million tons,
its current level of capacity.

      ROD AND BAR MILL. At the time of its acquisition, the rod and bar mills at
the Pueblo Mill were relatively old and located in separate facilities which
resulted in significant inefficiencies as the Company shifted production between
them in response to market conditions. In 1995, the Company commenced operation
of a new combination rod and bar mill with a new reheat furnace and a high-speed
rod train capable of producing commodity and specialty grades of rod and bar
products. Depending on product mix, the new combined facility has a capacity of
up to 600,000 tons per year. These improvements enable the Company to produce a
wider range of high margin specialty products, such as high-carbon rod, merchant
bar and other specialty bar products, and larger rod coil sizes which the
Company believes are preferred by many of its customers.

       RAIL MANUFACTURING. At the time of the Company's acquisition of CF&I,
rails were produced by ingot casting using energy-intensive processes with
significant yield losses as the ingots were reheated, reduced to blooms and then
rolled into rails. Continuous casting has increased rail yields and decreased
rail manufacturing costs. In 1996, the Company invested in its railmaking
capacity, entering into the agreement with Nippon for the license for the
technology to produce DHH rail, and acquiring the production equipment necessary
to produce the specialty rail. DHH rail is considered by the rail industry to be
longer lasting and of higher quality than rail produced using conventional
methods and, accordingly the DHH rail usually has a corresponding higher average
selling price. The Company believes it is able to meet the needs of a broad
array of rail customers with both traditional and DHH rail.

                                      -1-
<PAGE>
PRODUCTS

       The following chart identifies the Company's principal products and the
primary markets for those products.

                             Products                       Markets
                             -------------                  -------------------

                             Rail                           Rail transportation

                             Wire rod                       Durable goods
                                                            Capital equipment

                             Bar products                   Construction
                                                            Durable goods
                                                            Capital equipment

       The following table sets forth for the periods indicated the tonnage
shipped and the Company's total shipments by product class.

                                                       TONS SHIPPED
                                           ---------------------------------
     PRODUCT CLASS                           1999          1998         1997
     -------------                         -------      --------    --------

     Rail                                  299,000       401,400      350,200
     Rod, Bar and Wire (FN1)               407,600       354,500      409,200
     Seamless Pipe (FN2)                    19,600        68,900      120,200
     Semifinished                            8,700        36,900       28,000
                                           -------       -------      -------
          Total Company                    734,900       861,700      907,600
                                           =======       =======      =======

(FN1) The Company sold its wire products production facility in June 1997.

(FN2) The Company suspended operation at the seamless pipe mill in May 1999.

       RAIL. The Company produces conventional, premium and head-hardened rail
at its Pueblo Mill. The Pueblo Mill is the sole manufacturer of rail west of the
Mississippi River and one of only two rail manufacturers in the United States.
Rails are manufactured in the five most popular rail weights (115 lb/yard
through 136 lb/yard), in 39 and 80 foot lengths. The primary customers for the
Pueblo Mill's rail are the major western railroads. Rail is also sold directly
to rail contractors, transit districts and short-line railroads.

       As part of its capital improvement program, the Company improved its rail
manufacturing facilities to include the production of in-line head-hardened and
other premium rail. The installation of the in-line head-hardening process was
completed in 1996. In-line head-hardened rail is produced through a proprietary
finishing technology, known as deep head-hardened or DHH technology, licensed
from Nippon in connection with Nippon's investment in the Company. In 1999, the
Company produced approximately 81,000 tons of head-hardened product using the
DHH technology. The in-line DHH technology allows the Company to produce
head-hardened product up to the capacity of the rail facility. Rail produced
using the improved in-line technology is considered by many rail customers to be
longer lasting and of higher quality than rail produced with traditional
off-line techniques. During 1998, the Pueblo Mill completed a rail dock
expansion project which increased rail mill annual shipping capacity from
450,000 tons to over 500,000 tons.

       ROD AND BAR  PRODUCTS.  The Company's rod and bar mill is able to produce
coils of up to 6,000  pounds.  The improved steel quality and finishing
capabilities allow the Company to manufacture rods up to 1" in diameter, and to
manufacture a variety of high-carbon rod products such as those used for spring
wire, wire rope, tire bead and tire cord. The Company produces several sizes of
coiled rebar in the most popular grades for the reinforcement of concrete
products.

                                      -2-
<PAGE>

       SEAMLESS PIPE. Until May 1999, the Company produced seamless casings,
coupling stock and standard and line seamless pipe at the Pueblo Mill. The
primary use of these products is in the transmission of oil and natural gas
resources, through either above ground or subterranean pipelines.  The
seamless pipe mill has the capacity to produce both carbon and heat-treated
tubular products.  The Company ceased production at its seamless mill during May
1999 due to adverse market conditions caused in large part by a lack of drilling
activity and a decrease in U.S. rig counts. There are no immediate plans to
resume operations at the mill. The Company continues to market a negligible
quantity of semifinished seamless pipe, referred to as green tubes, to other
tubular mills for processing and finishing.

RAW MATERIALS

       The Company's principal raw material for the Pueblo Mill is ferrous scrap
metal derived from, among other sources, junked automobiles, railroad cars and
railroad track materials and demolition scrap from obsolete structures,
containers and machines. In addition, direct-reduction iron ("DRI"), hot
briquetted iron ("HBI") and pig iron (collectively "alternative metallics") can
substitute for a limited portion of the scrap used in minimill steel production,
although the sources and availability of alternative metallics are substantially
more limited than those of scrap. The purchase prices for scrap and alternative
metallics are subject to market forces largely beyond the control of the Company
including demand by domestic and foreign steel producers, freight costs,
speculation by scrap brokers and other conditions. The cost of scrap and
alternative metallics to the Company can vary significantly, and the Company's
product prices often cannot be adjusted, especially in the short-term, to
recover the costs of increases in scrap and alternative metallics prices.

       The long-term demand for steel scrap and its importance to the domestic
steel industry may be expected to increase as steelmakers continue to expand
scrap-based electric arc furnace capacity. For the foreseeable future, however,
the Company believes that supplies of steel scrap will continue to be available
in sufficient quantities at competitive prices. In addition, while alternate
metallics may not be cost competitive with steel scrap at present, a sustained
increase in the price of steel scrap could result in increased implementation of
these alternative materials.

       To reduce the effects of scrap price volatility and improve access to
high-quality raw materials, the Company is seeking to decrease its dependence on
steel scrap as an input for the production process by utilizing alternative
metallics. The Company has successfully integrated alternative metallics into
the production process as a low residual scrap substitute. The Company typically
purchases alternative metallics on a contract basis (whereas scrap is typically
purchased on the spot market), which limits the effects of price fluctuations
experienced in the scrap market. To date, the Company has purchased
substantially all of the HBI it has used from a single source, but it has no
long-term contracts for material amounts of HBI. Pig iron is purchased from a
variety of international producers.

     Since 1998, approximately 8 million tons of new HBI or DRI capacity has
come on-line. During the steel market downturn in late 1998, it became evident
to alternate metallics producers that they must be competitive. The Company
expects that alternate metallics will be readily available over the next five
years. Due to the increased capacity and present availability of alternate
metallics, the Company intends to purchase on the spot market.

MARKETING AND CUSTOMERS

       Steel products are sold by the Company principally through its own sales
organization. In addition to selling to customers who consume steel products
directly, the Company sells steel products to steel service centers,
distributors, processors and converters.

                                      -3-
<PAGE>
       The sales force is organized by product line. The Company has separate
sales people for rod, bar, and rail products. Most of the Company's sales are
initiated by contacts between sales representatives and customers. Accordingly,
the Company does not incur substantial advertising or other promotional expenses
for the sale of its products. In 1999, the Company derived 14.9, 14.1 and 11.9
percent of its sales from Burlington Northern Southern Freight ("BNSF"), Union
Pacific Railroad Co. and Davis Wire Corporation, respectively. Except for these
contracts, the Company does not have any significant ongoing contracts with
customers to purchase steel products, and orders placed with the Company
generally are cancelable by the customer prior to production.

       The Company does not have a general policy permitting return of purchased
steel products except for product defects. The Company does not routinely offer
extended payment terms to its customers.

       The business is generally not subject to significant seasonal trends,
with the exception of rail products. The Company does not have material
contracts with the United States Government and does not have any major supply
contracts subject to renegotiation.

       The primary customers for the Company's rail products are the major
western railroads. Rail products are also sold directly to rail distributors,
transit districts and short-line railroads. The Company believes its proximity
to western rail markets benefits the Company's marketing efforts.

       The Company sells its bar products (primarily reinforcing bar) to
fabricators and distributors. The majority of its customers are located within
Colorado and the western U.S.

       The Company's wire rod products are sold primarily to wire drawers
ranging in location from the Midwest to the West Coast. The demand for wire rod
is dependent upon a wide variety of markets, including agricultural,
construction, capital equipment and the durable goods segments. The Company
entered the high carbon rod market during 1995 as a direct result of the
investment in the new rolling facility. Since that time, the Company's
participation in the higher margin, high carbon rod market has steadily
increased, to the point where it now represents nearly two-thirds of total rod
product shipments. Typical end uses of high carbon rod are spring wire, wire
rope, tire bead and tire cord.

COMPETITION AND OTHER MARKET FACTORS

       The steel industry is cyclical in nature, and high levels of steel
imports, worldwide production overcapacity and other factors have adversely
affected the domestic steel industry in recent years. The Company also is
subject to industry trends and conditions, such as the presence or absence of
sustained economic growth and construction activity, currency exchange rates and
other factors. The Company is particularly sensitive to trends in the oil and
gas, construction, rail transportation, agriculture and durable goods segments,
as these industries are significant markets for the Company's products.

       Competition within the steel industry is intense. The Company competes
primarily on the basis of product quality, price and responsiveness to customer
needs. Many of the Company's competitors are larger and have substantially
greater capital resources, more modern technology and lower labor and raw
material costs than the Company. Moreover, U.S. steel producers have
historically faced significant competition from foreign producers. The highly
competitive nature of the industry, combined with excess production capacity in
some products, results in significant sales pricing pressure for certain of the
Company's products.

       The majority of current rail requirements in the United States are
replacement rails for existing rail lines. However, some new lines are being
constructed in heavy traffic areas of the United States. Imports have been a
significant factor in the domestic premium rail market in recent years. The
Company's capital expenditure program at the Pueblo Mill provided the rail
production facilities with continuous cast steel capability and in-line
head-hardening rail capabilities necessary to compete with other producers.
Pennsylvania Steel Technologies, a subsidiary of Bethlehem Steel Corporation, is
the only other domestic rail producer.

       The competition in bar products include a group of minimills that have a
geographical location close to the markets in or around the Rocky Mountains. The
Company's market for wire rod

                                      -4-
<PAGE>

encompasses the western United States. Domestic rod competitors include GS
Technologies, North Star Steel, Cascade Steel Rolling Mills, Keystone Steel and
Wire and Northwestern Steel & Wire.

ENVIRONMENTAL MATTERS

       The Company is subject to federal, state and local environmental laws and
regulations concerning, among other things, waste water, air emissions, toxic
use reduction and hazardous material disposal. The Pueblo Mill is classified in
the same manner as other similar steel mills in the industry, as generating
hazardous waste materials because the melting operation produces dust that
contains heavy metals ("EAF" dust). This dust, which constitutes the largest
waste stream generated at these facilities, is managed in accordance with
applicable laws and regulations.

       The Clean Air Act Amendments of 1990 ("CAA") imposed responsibilities on
many industrial sources of air emissions, including plants owned by the Company.
In addition, the monitoring and reporting requirements of the law have subjected
and will subject all companies with significant air emissions to increased
regulatory scrutiny. The Company submitted an application in 1995 to the
Colorado Department of Public Health and Environment ("CDPHE") for permits under
Title V. Title V permits have been issued for portions of the Pueblo Mill, with
permits for the remainder of the Pueblo Mill pending. The permits may be issued
under conditions that would require the Company to incur substantial future
capital expenditures directed at reducing air emissions.

     The CDPHE has inspected the Pueblo Mill for possible environmental
violations, and in the fourth quarter of 1999, issued a Compliance Advisory
indicating that air quality regulations had been violated. The CDPHE has now
filed a judicial enforcement action, which could result in the levying of
significant fines and penalties, requirements to make remediation expenditures,
accelerate or expand the capital expenditure program or a combination of any of
the above. Although the amount can not presently be determined, it is likely
that the Company will be required to make potentially material expenditures as a
result of the action.

       The Environmental Protection Agency ("EPA") has communicated to the CDPHE
that its interpretation of the CAA would be to require the Pueblo Mill to comply
with New Source Performance Standards ("NSPS") of the CAA. The CDPHE had
previously issued permits to the Pueblo Mill that did not require it to comply
with NSPS. If the Pueblo Mill is required to implement NSPS, it will likely have
to incur material capital expenditures to meet the new standards.

       It is unknown at present what the ultimate cost of adhering to the CAA
will be. The impact of the CAA will depend on a number of site-specific factors,
including but not limited to the quality of the air in the area where a plant is
located. Regardless of the outcome of the matters discussed above, the Company
anticipates that it will be required to make additional expenditures, and may
potentially be required to pay higher fees to governmental agencies, as a result
of the law and future laws regulating air emissions.

        In connection with the 1993 formation of CF&I and the acquisition of the
CF&I interest by the Company, the Company accrued a liability of $36.7 million
for environmental remediation at the Pueblo mill. The Company believed this
amount was the best estimate from a range of $23.1 million to $43.6 million. The
Company's estimate of this liability was based on two separate remediation
investigations conducted by independent environmental engineering consultants.
The liability includes costs for the Resource Conservation and Recovery Act
facility investigation, a corrective measures study, remedial action, and
operation and maintenance associated with the proposed remedial actions. In
October 1995, CF&I and the CDPHE finalized a ten-year postclosure permit for
hazardous solid waste management units ("SWMUs") at the Pueblo Mill. As part of
the postclosure permit requirements, CF&I must conduct a corrective action
program for the 82 SWMUs at the facility and continue to address projects on a
prioritized corrective action schedule which is substantially reflective of a
straight-line rate of expenditure over 30 years. As of December 31, 1999, 11
SWMUs have been closed with no further action needed. The CDPHE has stated that
the schedule for corrective action could be accelerated if new data indicated a
greater threat existed to the environment than was presently known to exist. At
December 31, 1999, the accrued liability was $33.4 million, of which $30.9
million was classified as noncurrent in the consolidated balance sheet.

                                      -5-
<PAGE>

       The Company's future expenditures for installation of and improvements to
environmental control facilities, remediation of environmental conditions
existing at its properties and other similar matters are difficult to predict
accurately. Environmental legislation and regulations and related administrative
policies have changed rapidly in recent years, shifting the burden to the
Industry. It is likely that the Company will be subject to increasingly
stringent environmental standards in the future (including those under the CAA,
the Clean Water Act Amendments of 1990, the stormwater permit program and toxic
use reduction programs). It is also likely that the Company will be required to
make potentially significant expenditures relating to environmental matters on
an ongoing basis. Even though the Company has established certain reserves for
environmental remediation as described above, there is no assurance regarding
the cost of remedial measures that might eventually be required by environmental
authorities or that additional environmental hazards, necessitating further
remedial expenditures, might not be asserted by such authorities or private
parties. Accordingly, the costs of remedial measures may exceed the amounts
reserved. There is no assurance that expenditures of the nature described above,
or that liabilities resulting from hazardous substances located on the Company's
property or used or generated in the conduct of its business, or resulting from
actions, proceedings or claims relating to environmental matters, will not have
a material adverse effect on the Company's consolidated financial condition,
consolidated earnings or consolidated cash flows.

LABOR DISPUTE

       The labor contract at CF&I expired on September 30, 1997. After a brief
contract extension intended to help facilitate a possible agreement, on October
3, 1997 the United Steel Workers of America ("Union"), initiated a strike for
approximately 1,000 bargaining unit employees. The parties failed to reach final
agreement on a new labor contract due to differences on economic issues. As a
result of contingency planning, the Company was able to avoid complete
suspension of operations at the Pueblo Mill by utilizing a combination of
permanent replacement workers, striking employees who returned to work and
salaried employees.

       On December 30, 1997 the Union called off the strike and made an
unconditional offer to return to work. At the time of this offer, only a few
vacancies existed at the Pueblo Mill. As of the end of December 1999, 152 former
striking employees had returned to work as a result of their unconditional
offer. Approximately 660 former striking workers remain unreinstated
("Unreinstated Employees").

       On February 27, 1998 the Regional Director of the National Labor
Relations Board ("NLRB") Denver office issued a complaint against the Company,
alleging violations of several provisions of the National Labor Relations Act
("NLRA"). The Company not only denies the allegations, but rather believes that
both the facts and the law fully support its contention that the strike was
economic in nature and that it was not obligated to displace the properly hired
permanent replacement employees. On August 17, 1998, a hearing on these
allegations commenced before an Administrative Law Judge ("Judge"). Testimony
and other evidence were presented at various sessions in the latter part of 1998
and early 1999, concluding on February 25, 1999. The Judge will render a
decision which is automatically subject to appeal by either party to the NLRB in
Washington, D.C. The ultimate determination of the issues may well require
action by an appropriate United States appellate court.

       Among the issues pending in the litigation is CF&I's motion asserting
that the Judge should consider the Union's alleged NLRA violations and that the
alleged misconduct should invalidate the Unreinstated Employees' right to
reinstatement. In the event there is an adverse determination of the issues,
Unreinstated Employees could be entitled to back pay, including benefits, from
the date of the Union's unconditional offer to return to work through the date
of the adverse determination. The number of Unreinstated Employees entitled to
back pay would probably be limited to the number of replacement workers;
however, the Union might assert that all Unreinstated Employees could be
entitled to back pay. Back pay is generally measured by the quarterly earnings
of those working less interim wages earned elsewhere by the Unreinstated
Employees. In addition to other considerations, each Unreinstated Employee has a
duty to take reasonable steps to mitigate the liability for back pay by seeking
employment elsewhere that has comparable demands and compensation. It is not
presently possible to estimate the ultimate liability in the event of an adverse
determination.

                                      -6-
<PAGE>
       During the strike by the Union, 39 bargaining unit employees of the
Colorado & Wyoming Railway Company ("C&W"), a wholly-owned subsidiary of the
Company that provides rail service to the Pueblo Mill, refused to report to work
for an extended period of time. The bargaining unit employees of C&W were not on
strike. C&W considered these employees to have quit their employment and,
accordingly, C&W declined to return those individuals to work. The unions
representing these individuals have filed lawsuits or claims against C&W,
claiming their members had refused to cross the picket line because they were
honoring the picket line of another organization or because of safety concerns
stemming from those picket lines. The Company believes it has substantial
defenses against these claims. However, it is possible that one or more of them
will proceed to arbitration before the National Railroad Adjustment Board or
otherwise. The outcome of such proceedings is inherently uncertain, and it is
not possible to estimate any potential settlement amount which would result from
an adverse legal or arbitration decision.

EMPLOYEES

       As of December 31, 1999, the Company had approximately 700 full-time
employees, of which approximately 580 work under collective bargaining
agreements with several unions, including the Union. The Company and the Union
were unable to agree on terms for a new labor agreement. See "Business-Labor
Dispute". The Company has a profit participation plan for its employees which
permits eligible employees to share in the pretax profits of CF&I.

ITEM 2.  PROPERTIES

       The Pueblo Mill is located in Pueblo, Colorado on approximately 570
acres. The operating facilities principally consist of two electric arc furnaces
for production of all raw steel, a ladle refining furnace and vacuum degassing
system, two 6-strand continuous round casters for producing semifinished steel,
and three finishing mills for conversion of semifinished steel to a finished
steel product. These finishing mills consist of a rail mill, seamless tube mill,
and a rod and bar mill. In May 1999, CF&I shut down production at the seamless
tube mill and does not have immediate plans to reopen the facility.

       At December 31, 1999, the Company had the following nominal capacities,
which are affected by product mix:

                                                 PRODUCTION         1999
                                                  CAPACITY       PRODUCTION
                                                 ----------      ----------
                                                         (IN TONS)

             Melting.........................   1,200,000          753,100
             Finishing Mills (FN1)...........   1,050,000          741,800


(FN1) Excludes the production capacity of the seamless tube mill.

       Borrowing requirements for capital expenditures and other cash needs,
both short-term and long-term, are provided through a loan from Oregon Steel. On
June 19, 1996, Oregon Steel completed a public offering of $235 million
principal amount of 11% First Mortgage Notes due 2003 ("Notes"). The Company and
CF&I have guaranteed the obligations of Oregon Steel under the Notes. The Notes
and guarantees are secured by a lien on substantially all of the property, plant
and equipment of the Company and CF&I. (See Note 11 to the Company's
Consolidated Financial Statements.)

                                      -7-
<PAGE>


ITEM 3.  LEGAL PROCEEDINGS

       See Part I, "Business - Environmental Matters", for discussion of
enforcement actions being proposed by the State of Colorado's Department of
Public Health and Environment against the Company.

       See Part I "Business - Labor Dispute" for the status of the labor dispute
at CF&I.

       The Company is party to various claims, disputes, legal actions and other
proceedings involving contracts, employment and various other matters. In the
opinion of management, the outcome of these matters should not have a material
adverse effect on the consolidated financial condition of the Company.

       The Company maintains insurance against various risks, including certain
types of product liability. The Company does not maintain insurance against
liability arising out of waste disposal, other environmental matters or
earthquake damage because of the high cost of such insurance. There is no
assurance that insurance currently carried by the Company, including product
liability insurance, will be available in the future at reasonable rates or at
all.

       During March 2000, the Occupational Safety and Health Association
("OSHA") began an investigation of operating practices and procedures at CF&I.
Management does not expect the outcome of this investigation to have a material
adverse effect on the consolidated financial condition, consolidated earnings or
consolidated cash flows of the Company.

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

      No matters were voted upon during the fourth quarter of 1999.

                                      -8-
<PAGE>

                      EXECUTIVE OFFICERS OF THE REGISTRANT

      Officers are elected by the Board of Directors of the Company to serve for
a period ending with the next succeeding annual meeting of the Board of
Directors held immediately after the annual meeting of stockholders. CF&I has no
independent executive officers.

      The name of each executive officer of the Company, age as of February 1,
2000, and position(s) and office(s) and all other positions and offices held by
each executive officer are as follows:

                                                                   ASSUMED
                                                                   PRESENT
                                                                   EXECUTIVE
NAME                   AGE   POSITIONS                             POSITION
----                   ---   ---------                             ---------

Joe E. Corvin          55    Chairman of the Board,                May 1999
                             President and Chief
                             Executive Officer

L. Ray Adams           49    Vice President, Finance and           April 1994
                             Chief Financial Officer

David R. Smith         39    Vice President, General Manager       May 1999

Richard W. Persons     51    Vice President, Sales and Marketing   November 1999

LaNelle F. Lee         62    Corporate Secretary                   April 1994



      Each of the executive officers named above has been employed by the
Company or Oregon Steel in an executive or managerial role for at least five
years, with the exceptions of Messrs. Smith and Persons.

      Mr. Smith joined the Company in 1997 as a line manager, a position held
until October 1998, when he assumed his current position as Vice President,
General Manager of New CF&I, Inc. Prior to joining the Company, Mr. Smith was
employed at Nucor Steel, Inc. for approximately 10 years.

      Mr. Persons joined the Company in November 1999 in his current capacity
as Vice President, Sales & Marketing. Prior to joining the Company, Mr. Persons
worked for Oregon Steel as a sales manager from 1997 to November 1999. Mr.
Persons was employed at California Steel Industries from 1985 to 1997 as a
senior sales representative.

                                      -9-
<PAGE>

                                     PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

      Neither the Company's common stock nor CF&I's partnership interests are
publicly traded. At December 31, 1999, the number of the Company's stockholders
of record was 4. No dividends have been paid on the common stock.

ITEM 6.   SELECTED FINANCIAL DATA

      The financial data included in the table have been selected by the Company
and have been derived from the consolidated financial statements for those
years.
<TABLE>
<CAPTION>

                                                                  YEAR ENDED DECEMBER 31,
                                            -----------------------------------------------------------------
                                               1999         1998           1997          1996          1995
                                            ---------     ---------     ----------    ---------     ---------
                                                     (In thousands, except ton and per ton amounts)
<S>                                         <C>           <C>           <C>           <C>           <C>
INCOME STATEMENT DATA:

Sales                                       $ 252,162     $ 355,636     $ 402,295     $ 393,696     $ 303,003
Cost of sales                                 234,837       319,792       368,869       361,465       279,099
Settlement of litigation                       (4,539)       (4,545)           --            --            --
Gain on sale of assets                             --        (4,746)       (2,228)           --            --
Selling, general and administrative
     expenses                                  19,462        23,376        23,800        17,600        17,159
Profit participation                               --           363         1,331           275           449
                                            ---------     ---------     ---------     ---------     ---------

          Operating income                      2,402        21,396        10,523        14,356         6,296
Other expense, net                            (25,572)      (25,200)      (23,566)      (22,144)      (11,436)
Minority interests                              1,200           560           882           607           497
Income tax benefit (expense)                    8,718          (439)        4,529         2,729         5,066
                                            ---------     ---------     ---------     ---------     ---------
          Net income (loss)                 $ (13,252)    $  (3,683)    $  (7,632)    $  (4,452)    $     423
                                            =========     =========     =========     =========     =========

BALANCE SHEET DATA  (AT DECEMBER 31):

Working capital                             $  11,949     $  15,285     $  14,906     $  49,210     $  47,504
Total assets                                  336,581       352,353       364,087       388,062       392,268
Current liabilities                            58,412        68,512        70,894        57,809        74,712
Long-term debt                                224,252       217,023       220,387       250,416       232,416
Total stockholders' equity (deficit)           (5,872)        7,380        11,063        18,695        23,168

OTHER DATA:

Depreciation and amortization               $  15,115     $  15,482     $  13,573     $  12,931     $   8,302
Capital expenditures                        $   3,417     $   6,415     $  12,846     $  35,060     $  61,406
Total tonnage sold                            734,900       861,700       907,600       893,200       640,200

Operating margin                                 1.0%          6.0%          2.6%          3.6%          2.1%
Operating income per ton sold                      $3           $25           $12           $16           $10
</TABLE>

                                      -10-

<PAGE>

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

General
-------

     The following information contains forward-looking statements that are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements are subject to risks and
uncertainties and actual results could differ materially from those projected.
Such risks and uncertainties include, but are not limited to, general business
and economic conditions; competitive products and pricing, as well as
fluctuations in demand; the supply of imported steel and subsidies provided by
foreign governments to support steel companies domiciled in their countries;
potential equipment malfunction; work stoppages; plant construction and repair
delays, and failure of the Company to accurately predict the impact of lost
revenues associated with interruption of the Company's, its customers' or its
suppliers' operations.

      The following table sets forth for the Company, for the periods indicated,
the percentages of sales represented by selected income statement items and
information regarding selected balance sheet data:

                                                   YEAR ENDED DECEMBER 31,
                                               ------------------------------
                                                1999        1998        1997
                                               ------      ------      ------
INCOME STATEMENT DATA:

Sales                                          100.0%      100.0%      100.0%
Cost of sales                                    93.1        89.9        91.7
Settlement of litigation                         (1.8)       (1.3)          -
Gain on sale of assets                              -        (1.3)        (.5)
Selling, general and administrative expenses      7.7         6.6         5.9
Profit participation expense                        -          .1
                                                               --          .3
                                               ------      ------      ------
      Operating income                            1.0         6.0         2.6
Interest expense                                (10.4)       (7.2)       (6.4)
Other income, net                                  .2          .1          .6
Minority interests                                 .5          .2          .2
                                               ------      ------      ------
     Loss before income taxes                    (8.7)        (.9)       (3.0)
Income tax (expense) benefit                      3.4         (.1)        1.1
                                               ------      ------      ------
     Net income (loss)                           (5.3)%       (1.0)%      (1.9)%
                                               ======      =======     =======
BALANCE SHEET DATA:

Current ratio                                   1.2:1        1.2:1       1.2:1
Total debt as a percentage of capitalization     93.6%        88.5%       87.3%

     The following table sets forth for the Company, for the periods indicated,
tonnage sold, revenue, average selling price per ton sold and other data:

                                             YEAR ENDED DECEMBER 31,
                                       ---------------------------------
                                           1999         1998       1997
                                       ----------     -------    -------
TONNAGE SOLD:

Rail                                    299,000       401,400    350,200
Rod, Bar and Wire                       407,600       354,500    409,200 (FN1)
Seamless Pipe                            19,600(FN2)   68,900    120,200
Semifinished                              8,700        36,900     28,000
                                        -------       -------    -------
        Total                           734,900       861,700    907,600
                                        =======       =======    =======

REVENUES:

Sales (in thousands)                   $252,162      $355,636   $402,295 (FN3)
Average selling price per ton sold     $    343      $    413   $    440 (FN4)
Operating income per ton sold          $      3      $     25   $     12
Operating margin                            1.0%          6.0%       2.6%


(FN1)  The Company sold the wire products production facility in June 1997.

(FN2)  The Company suspended operation at the seamless pipe mill in May 1999.

                                      -11-
<PAGE>

(FN3)  Includes insurance proceeds of approximately $2.5 million as
       reimbursement of lost profits resulting from lost production during the
       third and fourth quarters of 1996 related to the failure of one of the
       power transformers servicing the Company.

(FN4)  Excludes proceeds from the insurance settlement referred to in note (3)
       above.


      In addition to its ownership interest in CF&I, the Company owns Colorado &
Wyoming Railway Company, a short-line railroad, serving principally the Pueblo
Mill. For the years ended December 31, 1999, 1998 and 1997, sales of CF&I were
97.2, 98.1 and 98.5 percent, respectively, of the consolidated sales of the
Company. For the years ended December 31, 1999, 1998 and 1997, cost of sales of
CF&I were 97.2, 98.2 and 98.6 percent, respectively, of the consolidated cost of
sales of the Company.

     CF&I's labor contract expired on September 30, 1997. After a brief contract
extension intended to help facilitate a possible contract, on October 3, 1997
the Union initiated a strike. See Part I "Business - Labor Dispute". By the end
of 1997, CF&I had brought the operations back up to pre-strike levels with
management and replacement workers. Shipment levels and cost of operations in
1999 and 1998 were negatively impacted by reduced production levels and higher
costs specifically related to the strike.

     During the fourth quarter of 1999, the Company shipped 163,200 tons
with an average selling price of $340 per ton compared to 192,500 tons with an
average selling price of $373 per ton during the fourth quarter of 1998.
Decreased fourth quarter 1999 shipment levels are the result of decreased rail
shipments partially offset by increased rod and bar shipments compared to the
fourth quarter of 1998. Rail and rod and bar shipments were 59,000 tons and
101,800 tons, respectively, in the fourth quarter of 1999 compared to 97,000
tons of rail and 87,300 tons of rod and bar products in the fourth quarter of
1998. The reduced average selling price compared to 1998 is the result of the
shift in product mix as rod and bar have a significantly lower selling price
than that of rail. Rod and bar shipments represented 62.4 percent of total
fourth quarter shipments for the Company as compared to 45.4 percent for the
corresponding period in 1998.

     Gross profits as a percentage of sales for the fourth quarter of 1999 were
5.7 percent compared to 7.9 percent for the fourth quarter of 1998. Gross profit
for the fourth quarter of 1999 was negatively impacted by the shift in product
mix as discussed above, offset in part, by improved margins for rod and bar
products. Rod and bar products not only have a lower average selling price than
seamless pipe and rail products, but generally lower margins as well.

     The Company expects results of operations for 2000 to be positively
impacted by improving market conditions for its rod and bar products, with
gradual increases in average selling prices and improvement in gross margin
throughout the year for these products. The Company anticipates that in 2000 it
will ship nearly 300,000 tons of rail, and 490,000 tons of rod, bar, and
semifinished products. The Company does not anticipate shipments of seamless
pipe in 2000. These results are subject to risks and uncertainties, and actual
results could differ materially.

COMPARISON OF 1999 TO 1998

     SALES. The Company's sales in 1999 of $252.2 million decreased 29.1 percent
from sales of $355.6 million in 1998. Shipments decreased 14.7 percent to
734,900 tons in 1999 from 861,700 tons in 1998. The average selling price in
1999 was $343 per ton versus $413 per ton in 1998. The decline in total
shipments in 1999 is the result of reduced rail, seamless pipe and semi-finished
product shipments partially offset by increased rod and bar shipments. In May of
1999, the Company suspended its seamless pipe operations due to poor market
conditions. See Part I, "Business - Products". Lower rail shipments in 1999 were
the result of reduced domestic demand for rail products.

     The decreased average selling price in 1999 is due to reduced pricing for
most of the Company's products and reduced volumes of seamless pipe and rail
shipments, which generally have higher average selling prices than the Company's
other products.  Shipments associated with rail and seamless pipe products
represented 40.7 and 2.7 percent, respectively, of total 1999 shipments as
compared to rail and seamless pipe product shipments in 1998, which represented
46.6 and 8.0 percent, respectively, of total 1998 shipments.

     GROSS PROFIT. The Company's gross profit as a percentage of sales for 1999
was 6.9 percent compared to 10.1 percent for 1998. Gross profit margins were
negatively impacted by the lower average selling prices noted above, by losses
in the seamless pipe business in 1999 and by the subsequent shutdown and
severance costs incurred in the temporary closure of the seamless pipe mill.
These decreases in gross profit were partially offset by improved margins for
rod and bar and semi-finished products.

                                      -12-
<PAGE>

     SETTLEMENT OF LITIGATION. The Company recorded a $4.5 million gain for 1999
from litigation settlements with various graphite electrode suppliers. A
settlement of similar claims totaled $4.5 million in 1998.

    SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative
("SG&A") expenses for 1999 decreased $3.9 million compared to total 1998
expense of $23.4 million. The decrease in 1999 is due primarily to three
factors; a decrease in costs specifically related to the labor dispute with the
Union, a decrease in the 1999 employee benefit costs, and a reduction in the
support workforce that occurred in the fourth quarter of 1998. The employee
benefit costs in 1998 included a one-time charge for much of the costs
associated with the Company's offering voluntary early retirement packages to
certain management employees. A significant number of the employees accepted the
packages, which led to the decrease in the average support workforce for 1999 as
compared to the average support workforce for 1998. The percentage of SG&A
expense to sales increased from 6.6 percent for 1998 to 7.6 percent for 1999 as
a result of lower average selling prices and reduced shipments.

     INTEREST EXPENSE. Total interest cost for 1999 was $26.1 million, an
increase of $537,000 compared to 1998. The increase in interest cost is
primarily the result of increased debt levels in 1999. Capitalized interest
associated with construction in progress was $230,000 and $376,000 for 1999 and
1998, respectively.

     INCOME TAXES. The Company's effective income tax rate for state and federal
taxes was a benefit rate of 39.7 percent for 1999 compared to a tax rate of 13.5
percent for 1998. The effective tax rate for 1998 varied from the combined state
and federal statutory rate due to an establishment of a $3.1 million valuation
allowance for state tax credit carryforwards.

COMPARISON OF 1998 TO 1997

     SALES. The Company's sales in 1998 of $355.6 million decreased 11.6 percent
from sales of $402.3 million in 1997. Shipments decreased 5.1 percent to 861,700
tons in 1998 from 907,600 tons in 1997. The average selling price in 1998 was
$413 per ton versus $440 per ton in 1997. Of the $46.7 million sales decrease,
$20.2 million was the result of volume decreases, $23.9 million was the result
of lower average selling prices and $2.5 million was the result of insurance
proceeds received in 1997.

     The decrease in sales and shipments was primarily due to decreased
shipments of seamless pipe and rod and bar products, partially offset by
increased shipments of rail products. The decreased average selling price for
1998 was due to reduced pricing in the Company's seamless pipe and rod products
and reduced volumes of seamless pipe which has the highest average selling price
of any of the Company's products. Reduced seamless pipe prices and volume were
due to the low level of oil prices which reached a 20-year low and reduced U.S.
rig counts which fell near all-time lows. The Company's rod product was severely
impacted by the high level of imported rod shipments that entered the United
States. Average rod pricing has declined over $60 a ton since the beginning of
1998.

     GROSS PROFIT. The Company's gross profit as a percentage of sales for 1998
was 10.1 percent compared to 8.3 percent for 1997. Gross profit margins were
positively impacted by increased margins on shipments of rail, offset by lower
margins on rod and seamless pipe resulting from the market conditions described
above. Also, 1997 production costs and gross margins on all the Company's
products were negatively impacted by the labor dispute during the fourth quarter
of 1997 as discussed above.

     SELLING, GENERAL AND ADMINISTRATIVE. SG&A expenses for 1998 decreased
$424,000 compared to 1997 but increased as a percentage of sales from 5.9
percent in 1997 to 6.6 percent in 1998. The percentage increase was due to
strike related costs resulting from the labor contract dispute with the Union.

     PROFIT PARTICIPATION. Profit participation plan expense was $363,000 for
1998 compared to $1.3 million for 1997. The decrease in profit participation
reflected the decrease in profitability of the Company in the first nine months
1998 compared to the corresponding 1997 period.

     INTEREST EXPENSE. Total interest cost for 1998 was $25.9 million, a
decrease of $300,000 compared to 1997. The lower interest cost was primarily the
result of reduced debt levels in 1998. Of the $25.9 million of interest cost in
1999, $376,000 was capitalized as part of construction in progress versus
$435,000 in 1997.

                                      -13-
<PAGE>

    INCOME TAX EXPENSE.  The Company's effective income tax rate for state and
federal taxes was 13.5 percent for 1998 compared to a benefit rate of 37.2
percent for 1997.

LIQUIDITY AND CAPITAL RESOURCES

      Cash flow used in 1999 operations was $4.5 million compared to $5.0
million cash provided by operations in 1998. The major items affecting this $9.5
million decrease was a larger net loss in 1999 ($9.6 million), an increase in
the provision for deferred taxes ($8.0 million) and a decrease in accounts
payable in 1999 versus an increase in 1998 ($10.3 million). These increases in
cash used were partially offset by a larger gain on the sale of assets in 1998
($4.7 million), a decrease in inventory in 1999 versus an increase in 1998 ($9.4
million) and a smaller decrease in accrued expenses in 1999 ($2.6 million).

      Since its acquisition by Oregon Steel in March 1993, CF&I has required
substantial amounts of cash to fund its operations and capital expenditures.
Borrowing requirements for capital expenditures and other cash needs, both
short-term and long-term, are provided through a loan from Oregon Steel. As of
December 31, 1999, $201.1 million of aggregate principal amount of the loan was
outstanding, all of which was classified as long-term. The loan includes
interest on the daily amount outstanding at the rate of 11.64 percent. The
principal is due on demand or, if no demand is made, due December 31, 2002.
Interest on the principal amount of the loan is payable monthly. Because the
loan from Oregon Steel is due on demand, the applicable interest rate is
effectively subject to renegotiation at any time, and there is no assurance the
interest rate will not be materially increased in the future. In addition,
Oregon Steel is not required to provide financing to the Company and, although
no repayments are expected in 2000, it may in any event demand repayment of the
loan at any time. If Oregon Steel were to demand repayment of the loan, it is
unlikely that the Company would be able to obtain from external sources
financing necessary to repay the loan or to fund its capital expenditures and
other cash needs at interest rates or on terms as favorable to the Company as
provided by Oregon Steel. Failure to obtain alternative financing would have a
material adverse effect on the Company and CF&I.

      CF&I incurred term debt of $67.5 million as part of the purchase price of
the Pueblo Mill in March 1993. This debt is without stated collateral and is
payable over 10 years with interest at 9.5 percent. As of December 31, 1999, the
outstanding balance on the debt was $31.0 million, of which $23.2 million was
classified as long-term.

      Oregon Steel has outstanding $235 million principal amount of 11% First
Mortgage Notes due 2003. The Company and CF&I have guaranteed the obligations of
Oregon Steel under the Notes, and those guarantees are secured by a lien on
substantially all of the property, plant and equipment and certain other assets
of the Company and CF&I.

      Oregon Steel maintains a $125 million credit agreement with a syndicate of
lenders that is guaranteed by the Company and CF&I and collateralized, in part,
by substantially all of the Company's and CF&I's inventory and accounts
receivable.

      During 1999, the Company expended approximately $3.4 million, excluding
capitalized interest, on its capital program. For 2000, the Company has
budgeted, excluding capitalized interest, approximately $8.4 million for capital
projects at its manufacturing facilities.

      The Company expects that anticipated needs for working capital and capital
expenditures for 2000 will be met from funds generated from operations and
available borrowing from Oregon Steel.

      YEAR 2000 ISSUES. In response to year 2000 compliance issues, the Company
developed and executed a systematic approach to identifying and assessing
potential year 2000 issues. The approach consisted of modifying or replacing
equipment and software and performing testing to ensure that all information
technology ("IT") systems and process logic controller ("PLC") components of
manufacturing equipment were year 2000 compliant as modified, or that any
failure to be year 2000 compliant would not have a material adverse impact on
the Company. These procedures were completed in 1999. With the passage of most
critical dates, including the commencement of the Company's 2000 fiscal year,
and January 1, 2000, the Company has not experienced a significant disruption
due to a failure of any IT or PLC system. The Company has not experienced a
significant service interruption as a result of one of the Company's major
suppliers or customers experiencing a serious disruption due to the year 2000
issue. Based on this experience, the Company does not expect a significant
disruption in the future as a result of the year 2000 issue or the fact that
2000 is a leap year. Accordingly, the year 2000 issue has not had, nor is
currently expected to have, a material adverse effect on the Company's
consolidated financial conditions, consolidated earnings or consolidated cash
flows.

                                      -14-
<PAGE>

      While management believes that the risk is low, it is early in the year
2000 and there is a possibility that a year 2000 compliance failure related to
the Company's hardware or software systems may occur. The Company will continue
to monitor its systems for such an occurrence. The Company incurred
approximately $1.4 million associated with the year 2000 effort. The cost of the
year 2000 effort has been funded through normal operating cash flows.

      IMPACT OF INFLATION. Inflation can be expected to have an effect on many
of the Company's operating costs and expenses. Due to worldwide competition in
the steel industry, the Company may not be able to pass through such increased
costs to its customers.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

      The Company has entered into certain market-risk-sensitive financial
instruments for other than trading purposes, principally short-term debt and
long-term debt.

      The following discussion of market risks necessarily makes forward looking
statements. There can be no assurance that actual changes in market conditions
and rates and fair values will not differ materially from those used in the
sensitivity and fair value calculations discussed. Factors which may cause
actual results to differ materially include, but are not limited to: greater
than 10 percent changes in interest rates or foreign currency exchange rates,
changes in income or cash flows requiring significant changes in the use of debt
instruments or the cash flows associated with it, or changes in commodity market
conditions affecting availability of materials in ways not predicted by the
Company.

INTEREST RATE RISK

      Sensitivity analysis is used to determine the potential impact that market
risk exposure may have on the fair values of the Company's financial
instruments, including debt and cash equivalents. The Company has assessed the
potential risk of loss in fair values from hypothetical changes in interest
rates by determining the effect on the present value of future cash flows
related to these market sensitive instruments. The discount rates used for such
present value computations were selected based on market interest rates in
effect at December 31, 1999, plus or minus 10 percent.

      A 10 percent decrease in interest rates with all other variables held
constant would result in an increase in the fair value of the Company's
financial instruments by $4.7 million. A 10 percent increase in interest rates
with all other variables held constant would result in a decrease in the fair
value of the Company's financial instruments by $4.5 million.


                                  -15-
<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and
Stockholders of New CF&I, Inc.

In our opinion, the consolidated financial statements listed in the index
appearing under Item 14(a)(ii) on page 47 present fairly, in all material
respects, the financial position of New CF&I, Inc. and its subsidiaries at
December 31, 1999, 1998, and 1997, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 1999 in
conformity with accounting principles generally accepted in the United States.
In addition, in our opinion, the financial statement schedule listed in the
index appearing under Item 14(a)(v) on page 47 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 audits. We conducted our audits of
these statements in accordance with auditing standards generally accepted in the
United States, which 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
audits provide a reasonable basis for the opinion expressed above.

PRICEWATERHOUSECOOPERS LLP

Portland, Oregon
January 26, 2000

                                      -16-

<PAGE>
<TABLE>

                                                             NEW CF&I, INC.
                                                       CONSOLIDATED BALANCE SHEETS
                                          (IN THOUSANDS EXCEPT FOR PER SHARE AND SHARE AMOUNTS)
<CAPTION>

                                                                                                DECEMBER 31,
                                                                                  -----------------------------------
                                                                                     1999          1998        1997
                                                                                  ---------     --------     --------
                                                                ASSETS
<S>                                                                               <C>           <C>          <C>
Current assets:

   Cash and cash equivalents                                                      $       5     $      3     $      3
   Trade accounts receivable, less allowance
       for doubtful accounts of $638, $500,
       and $1,011                                                                    27,214       32,259       37,165
   Inventories                                                                       38,191       44,693       41,842
   Deferred tax asset                                                                 4,013        5,048        4,290
   Other                                                                                938        1,794        2,500
                                                                                  ---------     --------     --------
       Total current assets                                                          70,361       83,797       85,800
                                                                                  ---------     --------     --------

Property, plant and equipment:

   Land and improvements                                                              3,574        3,574        3,635
   Buildings                                                                         18,525       18,525       15,710
   Machinery and equipment                                                          242,634      238,792      231,159
   Construction in progress                                                           1,416        1,991        7,302
                                                                                  ---------     --------     --------
                                                                                    266,149      262,882      257,806
   Accumulated depreciation                                                         (61,845)     (48,012)     (34,485)
                                                                                  ---------     --------     --------
                                                                                    204,304      214,870      223,321
                                                                                  ---------     --------     --------
Cost in excess of net assets acquired, net                                           33,903       34,923       35,943
Other assets                                                                         28,013       18,763       19,023
                                                                                  ---------     --------     --------
                                                                                   $336,581     $352,353     $364,087
                                                                                  =========     ========     =========

                                                          LIABILITIES

Current liabilities:

   Current portion of long-term debt                                               $  7,861     $  7,164     $  7,373
   Accounts payable                                                                  32,680       39,593       36,728
   Accrued expenses                                                                  17,871       21,755       26,793
                                                                                   --------     --------     --------
       Total current liabilities                                                     58,412       68,512       70,894
Long-term debt                                                                       23,162       31,023       38,187
Long-term debt -- Oregon Steel Mills, Inc.                                          201,090      186,000      182,200
Environmental liability                                                              30,850       30,850       32,941
Deferred employee benefits                                                            7,099        6,748        6,643
                                                                                   --------     --------     --------
                                                                                    320,613      323,133      330,865
                                                                                   --------     --------     --------
Minority interests                                                                       --           --          319
                                                                                   --------     --------     --------
Redeemable common stock, 26 shares
    issued and outstanding (Note 10)                                                 21,840       21,840       21,840
                                                                                   --------     --------     --------
Commitments and contingencies (Note 11)
                                                 STOCKHOLDERS' EQUITY (DEFICIT)

Common stock, par value $1 per share,
   1,000 shares authorized;  174 shares
   issued and outstanding                                                                 1            1            1
Additional paid-in capital                                                           16,603       16,603       16,603
Accumulated deficit                                                                 (22,476)      (9,224)      (5,541)
                                                                                   --------     --------     --------
                                                                                     (5,872)       7,380       11,063
                                                                                   --------     --------     --------
                                                                                   $336,581     $352,353     $364,087
                                                                                   ========     ========     ========
</TABLE>

               The accompanying notes are an integral part of the
                       consolidated financial statements.

                                      -17-
<PAGE>

                                 NEW CF&I, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                                 (IN THOUSANDS)

                                              FOR THE YEAR ENDED DECEMBER 31,
                                            -----------------------------------
                                               1999         1998         1997
                                            ---------    ---------    ---------

Sales                                       $ 252,162    $ 355,636    $ 402,295
                                            ---------    ---------    ---------
Costs and expenses:
     Cost of sales                            234,837      319,792      368,869
     Settlement of litigation                  (4,539)      (4,545)          --
     Gain on sale of assets                        --       (4,746)      (2,228)
     Selling, general and administrative       19,462       23,376       23,800
     Profit participation                          --          363        1,331
                                            ---------    ---------    ---------
                                              249,760      334,240      391,772
                                            ---------    ---------    ---------

          Operating income                      2,402       21,396       10,523

Other income (expense):

     Interest and dividend income                 100           33           57
     Interest expense                         (26,092)     (25,555)     (25,790)
     Minority interests                         1,200          560          882
     Other, net                                   420          322        2,167
                                            ---------    ---------    ---------

         Loss before income taxes             (21,970)      (3,244)     (12,161)

Income tax benefit (expense)                    8,718         (439)       4,529
                                            ---------    ---------    ---------

          NET LOSS                          $ (13,252)   $  (3,683)   $  (7,632)
                                            =========    =========    =========






               The accompanying notes are an integral part of the
                       consolidated financial statements.

                                      -18-
<PAGE>
<TABLE>



                                                       NEW CF&I, INC.
                                 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                                (IN THOUSANDS EXCEPT SHARES)
<CAPTION>

                                                                                            RETAINED
                                                                        ADDITIONAL          EARNINGS
                                                 COMMON STOCK            PAID-IN          (ACCUMULATED
                                          -----------------------
                                            SHARES        AMOUNT         CAPITAL            DEFICIT)          TOTAL
                                          ---------      --------       ----------        ------------       -------
<S>                                          <C>         <C>              <C>                <C>             <C>

BALANCES, DECEMBER 31, 1996                  174          $   1           $16,603            $ 2,091         $18,695

     Net loss                                                                                 (7,632)         (7,632)
                                          ------         ------           -------            -------         -------
BALANCES, DECEMBER 31, 1997                  174              1            16,603             (5,541)         11,063

     Net loss                                                                                 (3,683)         (3,683)
                                          ------         ------           -------            -------         -------
BALANCES, DECEMBER 31, 1998                  174              1            16,603             (9,224)          7,380

     Net loss                                                                                (13,252)        (13,252)
                                          ------       --------          --------           --------        --------
BALANCES, DECEMBER 31, 1999                  174       $      1          $ 16,603           $(22,476)       $ (5,872)
                                          ======       ========          ========           ========        ========


</TABLE>



               The accompanying notes are an integral part of the
                       consolidated financial statements.

                                      -19-
<PAGE>
<TABLE>

                                                       NEW CF&I, INC.
                                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                       (IN THOUSANDS)
<CAPTION>

                                                                               FOR THE YEAR ENDED DECEMBER 31,
                                                                            ------------------------------------
                                                                                1999         1998        1997
                                                                            ----------   ----------   ----------
<S>                                                                         <C>          <C>          <C>
Cash flows from operating activities:
   Net loss                                                                 $ (13,252)   $  (3,683)   $  (7,632)
   Adjustments to reconcile net loss to net cash
      provided by (used in) operating activities:
          Depreciation and amortization                                        15,115       15,482       13,573
          Deferred income taxes                                                (8,338)        (367)      (2,076)
          Gain on sale of property, plant and equipment                            --       (4,746)      (2,228)
          Minority interest                                                    (1,200)        (560)        (882)
          Other                                                                    68         (212)         422
          Changes in operating assets and liabilities:
              Trade accounts receivable                                         5,045        4,905       12,215
              Inventories                                                       6,502       (2,851)       8,735
              Accounts payable                                                 (6,913)       3,404        3,517
              Accrued expenses and deferred employee benefits                  (2,333)      (4,932)      10,093
              Other                                                               833       (1,407)        (104)
                                                                            ---------    ---------    ---------
    NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                        (4,473)       5,033       35,633
                                                                            ---------    ---------    ---------

Cash flows from investing activities:
    Additions to property, plant and equipment                                 (3,417)      (6,415)     (12,846)
    Proceeds from disposal of property, plant and  equipment                       --        4,980        6,607
    Other, net                                                                    (34)         (25)        (164)
                                                                            ---------    ---------    ---------
    NET CASH USED IN INVESTING ACTIVITIES                                      (3,451)      (1,460)      (6,403)
                                                                            ---------    ---------    ---------

Cash flows from financing activities:

     Borrowings from Oregon Steel Mills, Inc.                                 180,928      232,653      190,789
     Payments to Oregon Steel Mills, Inc.                                    (165,838)    (228,853)    (214,289)
     Payment of long-term debt                                                 (7,164)      (7,373)      (5,730)
                                                                            ---------    ---------    ---------
     NET CASH PROVIDED BY (USED IN)
        FINANCING ACTIVITIES                                                   (7,926)      (3,573)     (29,230)
                                                                            ---------    ---------    ---------

Net increase in cash and cash equivalents                                           2           --           --
Cash and cash equivalents at beginning of year                                      3            3            3
                                                                            ---------    ---------    ---------

Cash and cash equivalents at end of year                                    $       5    $       3    $       3
                                                                            =========    =========    =========

Supplemental disclosures of cash flow information:
Cash paid for:
         Interest                                                           $  26,217    $  26,885    $  26,583
         Income tax paid to parent company                                  $     574    $      --    $      --

</TABLE>

See Note 4 for additional supplemental disclosures of cash flow information.

         The accompanying notes are an integral part of the consolidated
                             financial statements.

                                      -20-
<PAGE>

                                 NEW CF&I, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   NATURE OF OPERATIONS

     New CF&I, Inc. and subsidiaries ("Company") manufacture various specialty
and commodity steel products in Pueblo, Colorado. Principal markets are steel
service centers, steel fabricators, railroads, oil and gas producers and
distributors, and other industrial concerns, primarily in the United States west
of the Mississippi River. The Company also markets products outside North
America.

     New CF&I, Inc. was incorporated in the State of Delaware on May 5, 1992, as
a wholly-owned subsidiary of Oregon Steel Mills, Inc. ("Oregon Steel").

     On March 3, 1993, the Company (1) issued 100 shares of common stock to
Oregon Steel for $22.2 million in certain consideration and, (2) as the general
partner, acquired for $22.2 million a 95.2 percent interest in a newly formed
limited partnership, CF&I Steel, L.P. ("CF&I"). The remaining 4.8 percent
interest was acquired by the Pension Benefit Guaranty Corporation ("PBGC") as a
limited partner. On October 1, 1997, Oregon Steel purchased PBGC's interest in
CF&I, and subsequently sold 0.5 percent to another New CF&I, Inc. shareholder.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

     The consolidated financial statements include the 95.2 percent interest in
the CF&I and the Colorado & Wyoming Railway Company ("C&W"), a wholly-owned
subsidiary. All significant intercompany transactions and account balances have
been eliminated.

CASH AND CASH EQUIVALENTS

     Cash and cash equivalents include short-term securities that have an
original maturity date of 90 days or less.

CONCENTRATIONS OF CREDIT RISK

     Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of cash and cash equivalents
and trade receivables. The Company places its cash in high credit quality
investments and limits the amount of credit exposure by any one financial
institution. At times, cash balances may be in excess of the Federal Deposit
Insurance Corporation insurance limit. Management believes that risk of loss on
the Company's trade receivables is reduced by ongoing credit evaluation of its
customers' financial condition and requirements for collateral, such as letters
of credit and bank guarantees.

INVENTORIES

     Inventories are stated at the lower of average cost or market.

                                      -21-
<PAGE>

PROPERTY, PLANT AND EQUIPMENT

     Property, plant and equipment are stated at cost, including interest
capitalized during construction of $230,000, $376,000 and $435,000 in 1999, 1998
and 1997, respectively. Depreciation is determined using principally the
straight-line method and the units of production method over the estimated
useful lives of the assets. Maintenance and repairs are expensed as incurred and
costs of improvements are capitalized. Upon disposal, cost and accumulated
depreciation are removed from the accounts, and gains or losses are reflected in
income.

COSTS IN EXCESS OF NET ASSETS ACQUIRED

     The cost in excess of net assets acquired is amortized on a straight-line
basis over 40 years. Accumulated amortization was $6.9 million, $5.9 million and
$4.9 million in 1999, 1998 and 1997, respectively. The carrying value of costs
in excess of net assets acquired will be reviewed and adjusted if the facts and
circumstances suggest that they may be impaired.

OTHER ASSETS

     Included in other assets are net water rights of approximately $11.2
million. These water rights include the rights to divert and use certain amounts
of water from various river systems for either industrial or agricultural use.

INCOME TAXES

     Deferred income taxes reflect the differences between the financial
reporting and tax bases of assets and liabilities at year end based on enacted
tax laws and statutory tax rates. Tax credits are recognized as a reduction of
income tax expense in the year the credit arises. Income taxes are allocated in
accordance with a tax allocation agreement between Oregon Steel and the Company,
which provides for taxes on a separate return basis. A consolidated tax return
is filed by Oregon Steel.

     State tax credits are accounted for using the flow-through method whereby
the credits reduce income taxes currently payable and the provision for income
taxes in the period earned. To the extent such credits are not currently
utilized on a separate return basis, deferred tax assets are recognized.

    A valuation allowance is established for deferred tax assets when it is more
likely than not that the asset will not be realized.

USE OF ESTIMATES

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements and the amounts of revenues and expenses during the reporting
periods. Actual results could differ from those estimates.

NEW ACCOUNTING STANDARD

     The adoption of Statement of Financial Accounting Standards No. 133,
Accounting for Derivative Instruments and Hedging Activities (SFAS 133) issued
------------------------------------------------------------
by the Financial Accounting Standards Board (FASB) on June 15, 1998, is expected
to not have a significant effect on the Company's results of operations or its
financial position.

                                      -22-
<PAGE>

3.   INVENTORIES

       Inventories were as follows at December 31:

                                          1999           1998          1997
                                        -------        -------       -------
                                                    (In thousands)

     Raw materials                      $10,504         $9,318       $15,051
     Semifinished product                 6,439         16,154        13,840
     Finished product                    13,348         11,200         3,868
     Stores and operating supplies        7,900          8,021         9,083
                                        -------        -------       -------
          Total inventory               $38,191        $44,693       $41,842
                                        =======        =======       =======


4.   SUPPLEMENTAL CASH FLOW INFORMATION

     At December 31, 1998 and 1997, the Company acquired property, plant and
equipment for $529,000 and $586,000, respectively, which were included in
accounts payable.

5.  ACCRUED EXPENSES

     Accrued expenses include deferred revenues and accrued vacation of $4.0
million and $3.4 million, respectively, at December 31, 1997.


6.  DEBT AND FINANCING ARRANGEMENTS

     CF&I incurred term debt of $67.5 million as part of the purchase price of
the Pueblo, Colorado steel mill ("Pueblo Mill") in March 1993. This debt is
without stated collateral and is payable over 10 years at 9.5 percent. As of
December 31, 1999, the outstanding balance on the debt was $31.0 million, of
which $23.2 million was classified as long-term.

     Borrowing requirements for capital expenditures and working capital have
been provided through a revolving loan from Oregon Steel to CF&I. The loan
includes interest on the daily amount outstanding at the rate of 11.64 percent.
The principal is due on demand or, if no demand, due December 31, 2002, but is
not expected to be repaid in 2000. Interest on the principal amount of the loan
is paid on a monthly basis. See Note 13.

     As of December 31, 1999, principal payments on long-term debt are due as
follows (in thousands):

      2000  ......................................       $  7,861
      2001  ......................................          8,625
      2002  ......................................        210,554
      2003  ......................................          5,073
                                                         --------
                                                         $232,113
                                                         ========

                                      -23-
<PAGE>

7.   FAIR VALUE OF FINANCIAL INSTRUMENTS

     The estimated fair value of the Company's financial instruments at December
31 is as follows:
<TABLE>
<CAPTION>

                                                1999                            1998                          1997
                                     ---------------------------      -------------------------    --------------------------
                                       Carrying           Fair          Carrying        Fair         Carrying        Fair
                                        Amount            Value          Amount         Value         Amount         Value

                                     -------------- ------------      ------------- -----------    ----------     -----------
                                                                          (In thousands)
<S>                                   <C>               <C>           <C>            <C>             <C>            <C>
Cash and cash equivalents             $     5           $     5       $     3        $     3         $     3        $     3
Long-term debt, including
     current portion                   31,023            28,598        38,187         34,589          45,560         42,677
Long-term debt -
     Oregon Steel Mills, Inc.         201,090           193,723       186,000        177,236         182,200        180,763

</TABLE>

     The carrying amount of cash and cash equivalents approximate fair value due
to their short maturity. The fair value of Long-term debt and Long-term debt -
Oregon Steel Mills, Inc. are estimated by discounting future cash flows based on
the Company's incremental borrowing rate for similar types of borrowing
arrangements.

8.    INCOME TAXES

     The income tax benefit (expense) consists of the following:

                                           1999         1998           1997
                                          ------      -------        -------
                                                   (In thousands)

Current:
     Federal                              $ 387       $ (535)        $(1,149)
     State                                   (7)         (40)            (34)
                                          -----       ------         -------
                                            380         (575)         (1,183)
                                          -----       ------         -------

Deferred:
     Federal                              7,520         1,288           5,667
     State                                  818        (1,152)             45
                                         ------       -------        --------
                                          8,338           136           5,712
                                         ------       -------        --------
Income tax benefit (expense)             $8,718       $ (439)         $ 4,529
                                         ======       ======          =======

     A reconciliation of the statutory tax rate to the effective tax rate on
loss before income taxes is as follows:

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

Federal                                    35.0%           35.0%           35.0%
State                                       3.7           (41.2)            3.4
Other                                       1.0            (7.3)           (1.2)
                                          -----          ------           -----
                                           39.7%          (13.5%)          37.2%
                                          =====          ======           =====

                                      -24-
<PAGE>

     The components of the net deferred tax assets and liabilities as of
December 31 are as follows:

                                                1999         1998       1997
                                             ---------    --------    -------
                                                       (In thousands)

Net current deferred tax asset:
     Assets:
         Inventories                          $  1,384    $  1,621    $  1,704
         Accrued expenses                        2,385       3,234       2,266
         Accounts receivable                       244         193         320
                                              --------    --------    --------
Net current deferred tax asset                $  4,013    $  5,048    $  4,290
                                              ========    ========    ========

Net noncurrent deferred tax asset:
      Assets:
          Net operating loss carryforward     $ 52,825    $ 41,739    $ 33,512
          Environmental liability               12,473      12,790      12,829
          State tax credits                      5,383       5,403       4,891
          Other                                  3,648       2,790       2,441
                                              --------    --------    --------
                                                74,329      62,722      53,673
          Valuation allowance                   (3,106)     (3,106)         --
                                              --------    --------    --------
                                                71,223      59,616      53,673
                                              --------    --------    --------

       Liabilities:
          Property, plant and equipment         46,115      43,265      36,230
          Costs in excess of net assets
             acquired                           10,301      10,917      11,642
                                              --------    --------    --------
                                                56,416      54,182      47,872
                                              --------    --------    --------
Net noncurrent deferred tax asset             $ 14,807    $  5,434    $  5,801
                                              ========    ========    ========


     At December 31, 1999, the Company had state tax credits of $2.2 million,
net of a valuation allowance of $3.1 million, related to enterprise zone credits
for eligible completed capital projects, expiring 2002 through 2011. The
valuation allowance has been recorded as management believes that it is more
likely than not that future taxable income will be insufficient to realize the
full benefit of the state tax credit carryforwards. No valuation allowance has
been established for net operating loss carryforwards.

     At December 31, 1999, the Company had $132.8 million in federal net
operating loss carryforwards expiring in 2010 through 2019 that it expects to
utilize through a tax sharing agreement with Oregon Steel. In addition, the
Company has $124.6 million in state net operating loss carryforwards expiring in
2010 through 2019.

     At December 31, 1999, 1998 and 1997, the Company  included in accounts
payable  amounts due to Oregon Steel of $32,000,  $986,000 and $914,000,
respectively, related to income taxes.

                                      -25-

<PAGE>
9.   EMPLOYEE BENEFIT PLANS

PENSION PLANS

     The Company has noncontributory defined benefit retirement plans covering
all of the eligible employees of the Company. The plans provide benefits based
on participants' years of service and compensation. The Company funds at least
the minimum annual contribution required by ERISA.

     The following table sets forth the status of the plans and the amounts
recognized as of December 31:
<TABLE>
<CAPTION>
                                                            1999           1998            1997
                                                          -------        -------         -------
                                                                      (In thousands)
<S>                                                       <C>            <C>             <C>
Change in benefit obligation
----------------------------
Projected benefit obligation at January 1                 $22,168        $14,242         $12,826
Service cost                                                1,476          1,202           2,224
Interest cost                                               1,462            987             997
Actuarial (gain) loss                                      (3,236)         3,361          (1,213)
Early retirement benefits                                       -          2,528               -
Benefits paid                                              (1,009)          (152)           (592)
                                                          -------        -------         -------
Projected benefit obligation at December 31                20,861         22,168          14,242
                                                          -------        -------         -------

Change in plan assets
---------------------
Fair value of plan assets at January 1                     17,806         13,643          10,449
Actual return on plan assets                                2,546          2,759           2,072
Company contribution                                          325          1,556           1,714
Benefits paid                                              (1,009)          (152)           (592)
                                                          -------        -------         -------
Fair value of plan assets at December 31                   19,668         17,806          13,643
                                                          -------        -------         -------

Projected benefit obligation in excess of plan assets      (1,193)        (4,362)           (599)
Unrecognized net (gain) loss                               (2,677)         1,666           (1,619)
                                                          -------        -------          -------
Pension liability recognized in consolidated balance
   sheet                                                  $(3,870)       $(2,696)         $(2,218)
                                                          =======        =======          =======
</TABLE>

     Net pension cost was $1.5 million, $3.4 million and $2.2 million for the
years ended December 31, 1999, 1998 and 1997, respectively. During 1998, the
Company offered a voluntary early retirement package to certain management
employees at CF&I. As a result, the projected benefit obligation and the pension
cost were increased by $2.5 million.

     Plan assets are invested in common stock and bond funds (98.0%) and
marketable fixed income securities (2.0%) at December 31, 1999.

     The following table sets forth the significant actuarial assumptions for
the Company's pension plans:

                                                     1999        1998      1997
                                                     -----      ------    ------
Discount rate                                         7.5%       6.8%      7.0%
Rate of increase in future compensation levels        4.0%       4.0%      4.0%
Expected long-term rate of return on plan assets      8.5%       8.5%      8.8%


POSTRETIREMENT HEALTH CARE AND LIFE INSURANCE BENEFITS

     The Company provides certain health care and life insurance benefits for
substantially all of its retired employees. Employees are generally eligible for
benefits upon retirement after completion of a specified number of years of
service. The benefit plans are unfunded.

                                      -26-
<PAGE>


     The following table sets forth the status of the plans as of December 31:
<TABLE>
<CAPTION>

                                                                     1999      1998       1997
                                                                  -------    -------    -------
                                                                          (In thousands)
<S>                                                               <C>        <C>        <C>
Change in benefit obligation
----------------------------
Accumulated postretirement benefit obligation at January 1        $ 8,286    $ 7,303    $ 8,378
Service cost                                                          109         77        116
Interest cost                                                         541        488        577
Actuarial (gain) loss                                                 252        525     (1,565)
Plan amendments                                                       430        273         --
Benefits paid                                                        (439)      (380)      (203)
                                                                  -------    -------    -------
Accumulated postretirement benefit obligation at December 31        9,179      8,286      7,303
                                                                  -------    -------    -------
Accumulated benefit obligation in excess of plan assets            (9,179)    (8,286)    (7,303)
Unrecognized net loss                                               1,306      1,084        559
Unrecognized prior service cost                                       673        273         --
                                                                  -------    -------    -------
Postretirement liability recognized
     in consolidated balance sheet                                $(7,200)   $(6,929)   $(6,744)
                                                                  =======    =======    =======

</TABLE>

     Net postretirement benefit cost was $710,000, $518,000 and $777,000 for
the years ended December 31, 1999, 1998 and 1997, respectively.

     The obligations and costs for the retiree medical plan are not dependent on
changes in the cost of medical care. Retirees are covered under plans providing
fixed dollar benefits. The discount rate used in determining the accumulated
postretirement benefit obligation was 7.5 percent, 6.8 percent and 7.0 percent
in 1999, 1998 and 1997, respectively.

PROFIT PARTICIPATION PLAN

     The Company has a discretionary profit participation plan under which it
distributes quarterly to eligible employees 12 percent of CF&I's pretax income
after adjustments for certain nonoperating items. Each eligible employee
receives a share of the distribution based upon the level of the eligible
employee's base compensation compared with the total base compensation of all
eligible employees of the Company. The Company may modify, amend or terminate
the plan at any time, subject to the terms of the various collective bargaining
agreements.

THRIFT PLANS

     The Company has qualified Thrift (401(k)) plans for eligible employees
under which the Company matches 25 or 50 percent, depending on plan, of the
first 4 or 6 percent of the participants' deferred compensation. Company
contribution expense in 1999, 1998 and 1997 was $262,000, $268,000 and $269,000,
respectively.

10.   SALES OF REDEEMABLE COMMON STOCK

     In June 1994, the Board of Directors approved an increase in the Company's
authorized $1 par value common stock from 100 to 1,000 shares and declared an 80
percent stock dividend increasing Oregon Steel's holding of the Company's common
stock to 180 shares. In August 1994, the Company sold a 10 percent equity
interest to a subsidiary of Nippon Steel Corporation ("Nippon").

     In connection with the sale, the Company and Oregon Steel entered into a
stockholders' agreement with Nippon pursuant to which Nippon was granted a right
to sell, in certain circumstances, all, but not less than all, of its equity
interest in the Company back to the Company at the then fair market value.

                                      -27-
<PAGE>

Those circumstances include, among other things, a change of control, as defined
in the Company, certain changes involving the composition of the Company's board
of  directors,  and the  occurrence  of certain other events that are within the
control of the Company or Oregon Steel. Oregon Steel also agreed not to transfer
voting  control of the Company to a nonaffiliate  except in those  circumstances
where Nippon is offered the  opportunity  to sell its interest in the Company to
the transferee at the same per share price obtained by Oregon Steel. The Company
retains a right of first  refusal in the event that  Nippon  desires to transfer
its interest in the Company to a nonaffiliate.  During 1995, Oregon Steel sold a
3 percent  equity  interest  in the  Company to the Nissho  Iwai Group  ("Nissho
Iwai")  under  substantially  the  same  terms  and  conditions  of  the  Nippon
transaction.  The Company  believes that it is not probable that the  conditions
which would permit a stock redemption will occur.

11.     COMMITMENTS AND CONTINGENCIES

ENVIRONMENTAL

     All material environmental remediation liabilities that are probable and
estimable are recorded in the financial statements based on current technologies
and current environmental standards at the time of evaluation. Adjustments are
made when additional information is available that suggest different remediation
methods or periods may be required, and affect the total cost. The best estimate
of the probable cost within a range is recorded; however, if there is no best
estimate, the low end of the range is recorded, and the range is disclosed.

     In connection with the 1993 acquisition of the Pueblo Mill, the Company
accrued a liability of $36.7 million for environmental remediation. The Company
believed this amount was the best estimate from a range of $23.1 to $43.6
million. The Company's estimate of this liability was based on two separate
remediation investigations conducted by independent environmental engineering
consultants. The liability includes costs for the Resource Conservation and
Recovery Act facility investigation, a corrective measures study, remedial
action, and operation and maintenance associated with the proposed remedial
actions. In October 1995, the Company and the Colorado Department of Public
Health and Environment ("CDPHE") finalized a postclosure permit for hazardous
solid waste management units ("SWMUs") at the Pueblo Mill. As part of the
postclosure permit requirements, the Company must conduct a corrective action
program for the 82 SWMUs at the facility and continue to address projects on a
prioritized corrective action schedule which is substantially reflective of a
straight-line rate of expenditure over 30 years. As of December 31, 1999, 11
SWMUs have been closed with no further action needed. The CDPHE mandated that
the schedule for corrective action could be accelerated if new data indicated a
greater threat existed to the environment than was presently believed to exist.
At December 31, 1999, the accrued liability was $33.4 million, of which $30.9
million was classified as noncurrent in the consolidated balance sheet.

     The CDPHE has inspected the Pueblo Mill for possible environmental
violations, and in the fourth quarter of 1999, issued a Compliance Advisory
indicating that air quality regulations had been violated. The CDPHE has now
filed a judicial enforcement action, which could result in the levying of
significant fines and penalties, requirements to make remediation expenditures,
accelerate or expand the capital expenditure program or a combination of any of
the above. It is not presently possible to estimate the ultimate liability as a
result of the action.

GUARANTEES

     Oregon Steel has outstanding $235 million principal amount of 11% First
Mortgage Notes ("Notes") due 2003. The Company and CF&I (collectively
"Guarantors") guaranteed the obligations of Oregon Steel under the Notes, and
those guarantees are secured by a lien on substantially all of the property,
plant and equipment and certain other assets of the Guarantors, excluding
accounts receivable and inventory.

                                      -28-
<PAGE>


     In addition, Oregon Steel maintains a $125 million credit agreement with a
syndicate of lenders that is collateralized, in part, by the Guarantors'
accounts receivable and inventory, and is guaranteed by the Guarantors.

LABOR DISPUTE

     The labor contract at CF&I expired on September 30, 1997. After a brief
contract extension intended to help facilitate a possible agreement, on October
3, 1997 the United Steel Workers of America ("Union") initiated a strike of
approximately 1,000 bargaining unit employees at the Pueblo Mill. The parties
failed to reach final agreement on a new labor contract due to differences on
economic issues. As a result of contingency planning, the Company was able to
avoid complete suspension of operations at the Pueblo Mill by utilizing a
combination of permanent replacement workers, striking employees whom returned
to work and salaried employees.

     On December 30, 1997 the Union called off the strike and made an
unconditional offer to return to work. At the time of this offer, only a few
vacancies existed at the Pueblo Mill. As of December 31, 1999, 152 former
striking employees had returned to work as a result of the unconditional offer.
Approximately 660 former striking workers remain unreinstated ("Unreinstated
Employees").

     On February 27, 1998 the Regional Director of the National Labor Relations
Board's ("NLRB") Denver office issued a complaint against CF&I, alleging
violations of several provisions of the National Labor Relations Act ("NLRA").
The Company not only denies the allegations, but rather believes that both the
facts and the law fully support its contention that the strike was economic in
nature and that it was not obligated to displace the properly hired permanent
replacement employees. On August 17, 1998, a hearing on these allegations
commenced before an Administrative Law Judge ("Judge"). Testimony and other
evidence were presented at various sessions held in the latter part of 1998 and
early 1999, concluding on February 25, 1999. The Judge will render a decision
that is automatically subject to appeal by either party to the NLRB in
Washington, D.C. The ultimate determination of the issues may require a ruling
from the appropriate United States appellate court.

     Among the issues pending in the litigation is the Company's motion
asserting that the Judge should consider the Union's alleged NLRA violations and
that the alleged misconduct should invalidate the Unreinstated Employees' right
to reinstatement. In the event there is an adverse determination of these
issues, Unreinstated Employees could be entitled to back pay, including
benefits, from the date of the Union's unconditional offer to return to work
through the date of the determination. The number of Unreinstated Employees
entitled to back pay would probably be limited to the number of past and present
replacement workers; however, the Union might assert that all Unreinstated
Employees should be entitled to back pay. Back pay is generally measured by the
quarterly earnings of those working less interim wages earned elsewhere by the
Unreinstated Employees. In addition to other considerations, each Unreinstated
Employee has a duty to take reasonable steps to mitigate the liability for back
pay by seeking employment elsewhere that has comparable demands and
compensation. It is not presently possible to estimate the ultimate liability in
the event of an adverse determination.

     During the strike by the Union, at CF&I, 39 bargaining unit employees of
the Colorado & Wyoming Railway Company ("C&W"), a wholly-owned subsidiary of the
Company that provides rail service to the Pueblo Mill, refused to report to work
for an extended period of time. The bargaining unit employees of C&W were not on
strike. C&W considered these employees to have quit their employment and
accordingly, C&W declined to allow those individuals to return to work. The
unions representing these individuals have filed lawsuits in the U.S. District
Court of Colorado against C&W claiming their members had refused to cross the
picket line because they were honoring the picket line of another organization
or because of safety concerns stemming from those picket lines. The unions
demand reinstatement of the former employees, back pay, benefits and other
damages. The Company believes it has substantial defenses against these claims.
However, it is possible that one or more of them will


                                      -29-
<PAGE>

proceed to arbitration before the National Railroad Adjustment Board or
otherwise initiate further judicial proceedings. The outcome of such proceedings
is inherently uncertain and it is not possible to estimate any potential
settlement amount that would result from an adverse legal or arbitration
decision.

OTHER CONTINGENCIES

     The Company is party to various claims, disputes, legal actions and other
proceedings involving contracts, employment and various other matters. In the
opinion of management, the outcome of these matters should not have a material
adverse effect on the consolidated financial condition of the Company.

12.  MAJOR CUSTOMERS

     During 1999, the Company derived 14.9, 14.1 and 11.9 percent of its sales
from sales to its three most significant customers. During 1998 and 1997, the
Company earned 18.0, 17.5 and 11.2 percent and 17.2, 12.9 and 10.8 percent,
respectively, of its sales from sales to these same customers.

13.  RELATED PARTY TRANSACTIONS

OREGON STEEL MILLS, INC.

     The Company pays administrative fees to Oregon Steel for services it
provides based on an allocation from Oregon Steel and reimburses Oregon Steel
for costs incurred on behalf of the Company.
<TABLE>
<CAPTION>

                                                            1999         1998           1997
                                                          -------       -------        ------
                                                                    (In thousands)
<S>                                                       <C>           <C>            <C>

Oregon Steel administrative fees                          $ 3,377       $ 3,175        $ 4,196
Interest expense on notes payable to Oregon  Steel         22,963        21,777         21,691
Notes payable to Oregon Steel at December 31              201,090       186,000        182,200
Accounts payable to Oregon Steel at December 31             5,415         5,866          7,676

NIPPON STEEL CORPORATION

     In 1994, CF&I entered into an equipment supply agreement for purchase of
deep head-hardened ("DHH") rail equipment from Nippon. Additionally, CF&I pays
royalties to Nippon based on sales of DHH rail. CF&I has made payments on the
DHH rail equipment and paid certain license and technical fees, and royalties.

                                                       1999       1998    1997
                                                      ------    -------  ------
                                                            (In thousands)

Payments to Nippon for the year ended December 31     $656        $672     $659
Accounts payable to Nippon at December 31              179         502      346


14.  UNUSUAL OR NONRECURRING ITEMS

SETTLEMENT OF LITIGATION

     Operating income for 1999 and 1998 includes a $4.5 million gain in each
year from a settlement of outstanding litigated claims with certain graphite
electrode suppliers.

                                      -30-
<PAGE>


PROCEEDS FROM INSURANCE SETTLEMENT

     Sales for 1997 include approximately $2.5 million of insurance proceeds as
reimbursement of lost profits resulting from lost production during the third
and fourth quarters of 1996 related to the failure of one of the power
transformers servicing the Company.

                                      -31-
<PAGE>


REPORT OF INDEPENDENT ACCOUNTANTS

To the Partners
of CF&I Steel, L.P.

In our opinion, the financial statements listed in the index appearing under
Item 14(a)(iv) on page 47 present fairly, in all material respects, the
financial position of CF&I Steel, L.P. at December 31, 1999, 1998, and 1997, and
the results of its operations and its cash flows for each of the three years
in the period ended December 31, 1999 in conformity with accounting principles
generally accepted in the United States. In addition, in our opinion, the
financial statement schedule listed in the index appearing under Item 14(a)(v)
on page 47 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 CF&I's management; our responsibility is to express an opinion
on these financial statements and financial statement schedule based on our
audits. We conducted our audits of these statements in accordance with auditing
standards generally accepted in the United States, which 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 audits provide a reasonable basis for the opinion expressed
above.

PRICEWATERHOUSECOOPERS LLP

Portland, Oregon
January 26, 2000

                                      -32-
<PAGE>



                                                             CF&I STEEL, L.P.
                                                              BALANCE SHEETS
                                                              (IN THOUSANDS)



                                                                                             DECEMBER 31,
                                                                                 ----------------------------------
                                                                                   1999         1998         1997
                                                                                 --------     --------     --------

                                                            ASSETS

Current assets:
   Cash and cash equivalents                                                      $      2     $     --     $      --
   Trade accounts receivable, less allowance
       for doubtful accounts of $638, $500
       and $1,011                                                                   26,167       31,653       36,652
   Inventories                                                                      37,950       44,516       41,666
   Other                                                                               747        1,603        2,350
                                                                                  --------     --------     --------
       Total current assets                                                         64,866       77,772       80,668
                                                                                  --------     --------     --------

Property, plant and equipment:

   Land and improvements                                                             3,569        3,569        3,629
   Buildings                                                                        18,419       18,419       15,604
   Machinery and equipment                                                         240,131      236,288      228,656
   Construction in progress                                                          1,416        1,990        7,302
                                                                                  --------     --------     --------
                                                                                   263,535      260,266      255,191
   Accumulated depreciation                                                        (60,342)     (46,751)     (33,488)
                                                                                  --------     --------     --------
                                                                                   203,193      213,515      221,703
                                                                                  --------     --------     --------

Cost in excess of net assets acquired, net                                          33,903       34,923       35,943
Other assets                                                                        12,966       13,089       13,223
                                                                                  --------     --------     --------
                                                                                  $314,928     $339,299     $351,537
                                                                                  ========     ========     ========


                                                          LIABILITIES

Current liabilities:

   Current portion of long-term debt                                              $  7,861     $  7,164     $  7,373
   Accounts payable                                                                 40,834       46,932       41,489
   Accrued expenses                                                                 18,649       20,235       25,973
                                                                                  --------     --------     --------
       Total current liabilities                                                    67,344       74,331       74,835
Long-term debt                                                                      23,162       31,023       38,187
Long-term debt - Oregon Steel Mills, Inc.                                          201,090      186,000      182,200
Long-term debt - New CF&I, Inc.                                                     21,756       21,756       21,756
Environmental liability                                                             30,850       30,850       32,941
Deferred employee benefits                                                           7,099        6,747        6,643
                                                                                  --------     --------     --------
                                                                                   351,301      350,707      356,562
                                                                                  --------     --------     --------

Commitments and contingencies (Note 9)

                                                      PARTNERS' DEFICIT

Limited  partner                                                                        --           --          319
General partner                                                                    (36,373)     (11,408)      (5,344)
                                                                                  --------     --------     --------
   Total partners' deficit                                                         (36,373)     (11,408)      (5,025)
                                                                                  --------     --------     --------
                                                                                  $314,928     $339,299     $351,537
                                                                                  ========     ========     ========

</TABLE>


               The accompanying notes are an integral part of the
                             financial statements.


                                      -33-

<PAGE>




                                CF&I STEEL, L.P.
                              STATEMENTS OF INCOME
                                 (IN THOUSANDS)

                                              FOR THE YEAR ENDED DECEMBER 31,
                                            -----------------------------------
                                                1999        1998         1997
                                            ----------   ---------    ---------

Sales                                       $ 245,223    $ 348,765    $ 396,400
                                            ---------    ---------    ---------

Costs and expenses:

     Cost of sales                            228,376      314,099      363,878
     Settlement of litigation                  (4,539)      (4,545)          --
     Gain on sale of assets                        --       (4,746)      (2,228)
     Selling, general and administrative       18,935       22,841       23,257
     Profit participation                          --          362        1,331
                                            ---------    ---------    ---------
                                              242,772      328,011      386,238
                                            ---------    ---------    ---------

     Operating income                           2,451       20,754       10,162

Interest and dividend income                        7           33           56
Interest expense                              (27,843)     (27,478)     (27,875)
Other, net                                        420          308        2,168
                                            ---------    ---------    ---------
     NET LOSS                               $ (24,965)   $  (6,383)   $ (15,489)
                                            =========    =========    =========




               The accompanying notes are an integral part of the
                             financial statements.

                                      -34-
<PAGE>



                                CF&I STEEL, L.P.
               STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIT)
                                 (IN THOUSANDS)



                                              GENERAL       LIMITED
                                              PARTNER       PARTNER       TOTAL
                                             ---------    ----------   ---------

BALANCES, DECEMBER 31, 1996                  $  9,263     $    (10)    $  9,253

    Net loss                                  (14,607)        (882)     (15,489)
    Limited Partner purchase adjustment            --        1,211        1,211
                                             --------     --------     --------
BALANCES, DECEMBER 31, 1997                    (5,344)         319       (5,025)

    Net loss                                   (6,064)        (319)      (6,383)
                                             --------     --------     --------
BALANCES, DECEMBER 31, 1998                   (11,408)          --      (11,408)

    Net loss                                  (24,965)          --      (24,965)
                                             --------     --------     --------
BALANCES, DECEMBER 31, 1999                  $(36,373)    $     --     $(36,373)
                                             ========     ========     ========












                 The accompanying notes are an integral part of
                           the financial statements.

                                      -35-


<PAGE>

<TABLE>


                                                    CF&I STEEL, L.P.
                                                STATEMENTS OF CASH FLOWS
                                                     (IN THOUSANDS)
<CAPTION>

                                                                            FOR THE YEAR ENDED DECEMBER 31,
                                                                         ------------------------------------
                                                                            1999         1998         1997
                                                                         ----------   ----------   ----------
<S>                                                                      <C>          <C>          <C>
Cash flows from operating activities:

   Net loss                                                              $ (24,965)   $  (6,383)   $ (15,489)
   Adjustments to reconcile net loss to net cash
      provided by (used in) operating activities:
          Depreciation and amortization                                     14,831       15,215       13,346
          Gain on sale of property, plant and equipment                         --       (4,746)      (2,228)
          Other                                                                 68       (1,758)        (789)
          Changes in operating assets and liabilities:

              Trade accounts receivable                                      5,486        4,999       12,266
              Inventories                                                    6,566       (2,850)       8,748
              Accounts payable                                              (6,098)       5,443        4,978
              Accrued expenses and deferred employee benefits               (1,234)      (5,634)       9,325
              Other                                                            833          747         (468)
                                                                         ---------    ---------    ---------
          NET CASH PROVIDED BY (USED IN)
              OPERATING ACTIVITIES                                          (4,513)       5,033       29,689
                                                                         ---------    ---------    ---------

Cash flows from investing activities:

    Additions to property, plant and equipment                              (3,377)      (6,415)     (11,258)
    Proceeds from disposal of property, plant
       and equipment                                                            --        4,980        6,607
    Other, net                                                                 (34)         (25)        (164)
                                                                         ---------    ---------    ---------
          NET CASH USED IN INVESTING ACTIVITIES                             (3,411)      (1,460)      (4,815)
                                                                         ---------    ---------    ---------

Cash flows from financing activities:

     Borrowings from related parties                                       180,928      232,652      195,145
     Payments to related parties                                          (165,838)    (228,852)    (214,289)
     Payment of long-term debt                                              (7,164)      (7,373)      (5,730)
                                                                         ---------    ---------    ---------
          NET CASH PROVIDED BY (USED IN)
             FINANCING ACTIVITIES                                            7,926       (3,573)     (24,874)
                                                                         ---------    ---------    ---------

Net increase in cash and cash equivalents                                        2           --           --
Cash and cash equivalents at beginning of year                                  --           --           --
                                                                         ---------    ---------    ---------
Cash and cash equivalents at end of year                                 $       2    $      --    $      --
                                                                         =========    =========    =========

Supplemental disclosures of cash flow information:
              Cash paid for interest                                     $  26,217    $  26,885    $  26,583
                                                                         =========    =========    =========


</TABLE>

See Note 4 for additional supplemental disclosures of cash flow information.


                 The accompanying notes are an integral part of
                           the financial statements.

                                      -36-
<PAGE>





                                CF&I STEEL, L.P.
                          NOTES TO FINANCIAL STATEMENTS

1.   NATURE OF OPERATIONS

      CF&I Steel, L.P. ("CF&I") manufactures various specialty and commodity
steel products in Pueblo, Colorado. Principal markets are steel service centers,
steel fabricators, railroads, oil and gas producers and distributors, and other
industrial concerns, primarily in the United States west of the Mississippi
River. CF&I also markets products outside North America.

     On March 3, 1993, the inception date of CF&I's operations, New CF&I, Inc.
("Company"), a then wholly-owned subsidiary of Oregon Steel Mills, Inc. ("Oregon
Steel"), (1) issued 100 shares of common stock to Oregon Steel for $22.2 million
in certain consideration and (2) as the general partner, acquired for $22.2
million a 95.2 percent interest in CF&I. The remaining 4.8 percent interest was
acquired by the Pension Benefit Guaranty Corporation ("PBGC") with a capital
contribution of an asset valued at $1.2 million. On October 1, 1997, Oregon
Steel purchased PBGC's interest in CF&I, and subsequently sold 0.5 percent to
another general partner shareholder.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS

     Cash and cash equivalents include short-term securities which have an
original maturity date of 90 days or less.

CONCENTRATIONS OF CREDIT RISK

     Financial instruments that potentially subject CF&I to concentrations of
credit risk consist principally of cash and cash equivalents and trade
receivables. CF&I places its cash in high credit quality investments and limits
the amount of credit exposure by any one financial institution. At times, cash
balances may be in excess of the Federal Deposit Insurance Corporation insurance
limit. Management believes that risk of loss on CF&I's trade receivables is
reduced by ongoing credit evaluation of its customers' financial condition and
requirements for collateral, such as letters of credit and bank guarantees.

INVENTORIES

     Inventories are stated at the lower of average cost or market.

PROPERTY, PLANT AND EQUIPMENT

     Property, plant and equipment are stated at cost, including interest
capitalized during construction of $230,000, $376,000 and $435,000 in 1999, 1998
and 1997, respectively. Depreciation is determined using principally the
straight-line method and the units of production method over the estimated
useful lives of the assets. Maintenance and repairs are expensed as incurred and
costs of improvement are capitalized. Upon disposal, cost and accumulated
depreciation are removed from the accounts, and gains or losses are reflected in
income.

COSTS IN EXCESS OF NET ASSETS ACQUIRED

     The cost in excess of net assets acquired is amortized on a straight-line
basis over 40 years. Accumulated amortization was $6.9 million, $5.9 million and
$4.9 million in 1999, 1998 and 1997, respectively. The carrying value of costs
in excess of net assets acquired will be reviewed if the facts and circumstances
suggest that it may be impaired.

                                      -37-
<PAGE>


OTHER ASSETS

     Included in other assets are net water rights of approximately $11.2
million. These water rights include the rights to divert and use certain amounts
of water from various river systems for either industrial or agricultural use.

INCOME TAX

     The financial statements reflect no provision or liability for federal or
state income taxes. Taxable income or loss of CF&I is allocated to the partners.

USE OF ESTIMATES

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements and the amounts of revenues and expenses during the reporting
periods. Actual results could differ from those estimates.

NEW ACCOUNTING STANDARD

     The adoption of Statement of Financial Accounting Standards No. 133 (SFAS
133), Accounting for Derivative Instruments and Hedging Activities issued by the
      ------------------------------------------------------------
Financial Accounting Standards Board (FASB) on June 15, 1998, is expected to not
have a significant effect on CF&I's results of operations or financial position.

3.   INVENTORIES

     Inventories were as follows as of December 31:

                                              1999          1998        1997
                                             -------      -------     -------
                                                       (In thousands)

          Raw materials                      $10,504      $ 9,318     $15,051
          Semifinished product                 6,439       16,154      13,840
          Finished product                    13,348       11,200       3,868
          Stores and operating supplies        7,659        7,844       8,907
                                             -------      -------     -------
              Total inventory                $37,950      $44,516     $41,666
                                             =======      =======     =======


4.   SUPPLEMENTAL CASH FLOW INFORMATION

     At December 31, 1998 and 1997, CF&I acquired property, plant and equipment
for $529,000 and $435,000, respectively, which was included in accounts payable.


5.   ACCRUED EXPENSES

     Accrued expenses include deferred revenues and accrued vacation of $4.0
million and $3.1 million, respectively, at December 31, 1997.


6.   DEBT AND FINANCING ARRANGEMENTS

     CF&I incurred term debt of $67.5 million as part of the purchase price of
the Pueblo, Colorado steel mill ("Pueblo Mill") in March 1993. This debt is
without stated collateral and is payable over 10 years with interest at

                                      -38-
<PAGE>

9.5 percent.  As of December 31, 1999, the  outstanding  balance on the debt was
$31.0 million, of which $23.2 million was classified as long-term.

     Borrowing requirements for capital expenditures and working capital have
been provided through revolving loans from Oregon Steel and the Company. The
loan from Oregon Steel includes interest on the daily amount outstanding at the
rate of 11.64 percent. The principal is due on demand or, if no demand, due on
December 31, 2002. The loan from the Company includes interest on the daily
amount outstanding at the rate of 8.25 percent. The principal is due on demand
or, if no demand, due on December 31, 2004. The loans are not expected to be
repaid in 2000. Interest on the loans is paid on a monthly basis. See Note 11.

     As of December 31, 1999, principal payments on long-term debt are due as
follows (in thousands):

      2000  ...................................................       $  7,861
      2001  ...................................................          8,625
      2002  ...................................................        210,554
      2003  ...................................................          5,073
      2004  ...................................................         21,756
                                                                      --------
                                                                      $253,869
                                                                      ========

7.   FAIR VALUE OF FINANCIAL INSTRUMENTS

     The estimated fair value of CF&I's financial instruments at December 31 is
as follows:
<TABLE>
<CAPTION>

                                                1999                           1998                           1997
                                      -------------------------      -------------------------    ---------------------------
                                        CARRYING         FAIR         CARRYING         FAIR         CARRYING         FAIR
                                         AMOUNT          VALUE         AMOUNT          VALUE         AMOUNT          VALUE
                                      -------------- ----------      -------------- ----------    -------------- ------------
                                                                           (In thousands)
<S>                                   <C>            <C>            <C>            <C>            <C>            <C>
Cash and cash equivalents             $      2       $     2        $      -       $      -       $      -       $      -
Long-term debt, including
   current portion                      31,023         28,598         38,187         34,589         45,560         42,677
Long-term debt - Oregon
   Steel Mills, Inc.                   201,090        193,723        186,000        177,236        182,200        180,676
Long-term debt - New CF&I,
     Inc.                               21,756         15,767         21,756         15,003         21,756         17,064
</TABLE>



     The fair value of Long-term debt, Long-term debt - Oregon Steel Mills, Inc.
and Long-term debt - New CF&I, Inc. is estimated by discounting future cash
flows based on CF&I's incremental borrowing rate for similar types of borrowing
arrangements.

                                      -39-
<PAGE>


 8.  EMPLOYEE BENEFIT PLANS

PENSION PLANS

     CF&I has noncontributory defined benefit plans covering all of the eligible
employees. The plans provide benefits based on participants' years of service
and compensation. CF&I funds at least the minimum annual contribution required
by ERISA.

     The following table sets forth the status of the plans and the amounts
recognized as of December 31:
<TABLE>
<CAPTION>

                                                             1999           1998            1997
                                                           --------       --------       --------
                                                                       (In thousands)
<S>                                                        <C>            <C>            <C>
Change in benefit obligation
----------------------------
Projected benefit obligation at January 1                  $ 22,168       $ 14,242       $ 12,826
Service cost                                                  1,476          1,202          2,224
Interest cost                                                 1,462            987            997
Actuarial (gain) loss                                        (3,236)         3,361         (1,213)
Early retirement benefits                                        --          2,528             --
Benefits paid                                                (1,009)          (152)          (592)
                                                           --------       --------       --------
Projected benefit obligation at December 31                  20,861         22,168         14,242
                                                           --------       --------       --------

Change in plan assets
---------------------
Fair value of plan assets at January 1                       17,806         13,643         10,449
Actual return on plan assets                                  2,546          2,759          2,072
Company contribution                                            325          1,556          1,714
Benefits paid                                                (1,009)          (152)          (592)
                                                           --------       --------       --------
Fair value of plan assets at December 31                     19,668         17,806         13,643
                                                           --------       --------       --------

Projected benefit obligation in excess of plan assets        (1,193)        (4,362)          (599)
Unrecognized net (gain) loss                                 (2,677)         1,666         (1,619)
                                                           --------       --------       --------
Pension liability recognized in balance sheet              $ (3,870)      $ (2,696)      $ (2,218)
                                                           ========       ========       ========
</TABLE>


     Net pension cost was $1.5 million, $3.4 million and $2.2 million for the
years ended December 31, 1999, 1998 and 1997, respectively. During 1998, CF&I
offered a voluntary early retirement package to certain management employees. As
a result, the projected benefit obligation and the pension cost were increased
by $2.5 million in 1998.

     Plan assets are invested in common stock and bond funds (98.0%), marketable
fixed income securities (2.0%) at December 31, 1999.

     The following table sets forth the significant actuarial assumptions for
CF&I's pension plans:

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


Discount rate                                         7.5%      6.8%      7.0%
Rate of increase in future compensation levels        4.0%      4.0%      4.0%
Expected long-term rate of return on plan assets      8.5%      8.5%      8.8%


POSTRETIREMENT HEALTH CARE AND LIFE INSURANCE BENEFITS

     CF&I provides certain health care and life insurance benefits for
substantially all of its retired employees. Employees are generally eligible for
benefits upon retirement after completion of a specified number of years of
service and retirement. The benefit plans are unfunded.


                                      -40-
<PAGE>


     The following table sets forth the status of the plans as of December 31:
<TABLE>
<CAPTION>

                                                                       1999       1998       1997
                                                                     -------    -------    -------
                                                                             (In thousands)
<S>                                                                  <C>        <C>        <C>
Change in benefit obligation
----------------------------
Accumulated postretirement benefit obligation at January 1           $ 8,286    $ 7,303    $ 8,378
Service cost                                                             109         77        116
Interest cost                                                            541        488        577
Actuarial (gain) loss                                                    252        525     (1,565)
Plan amendments                                                          430        273         --
Benefits paid                                                           (439)      (380)      (203)
                                                                     -------    -------    -------
Accumulated postretirement benefit obligation at December 31           9,179      8,286      7,303
                                                                     -------    -------    -------

Accumulated benefit obligation in excess of plan assets               (9,179)    (8,286)    (7,303)
Unrecognized net loss                                                  1,306      1,084        559
Unrecognized prior service cost                                          673        273         --
                                                                     -------    -------    -------
Postretirement liability recognized in balance sheet                 $(7,200)   $(6,929)   $(6,744)
                                                                     =======    =======    =======
</TABLE>


     Net postretirement benefit cost was $710,000, $518,000 and $777,000
for the years ended December 31, 1999, 1998 and 1997, respectively.

     The obligations and costs for the retiree medical plan are not dependent on
changes in the cost of medical care. Retirees are covered under plans providing
fixed dollar benefits. The discount rate used in determining the accumulated
postretirement benefit obligation was 7.5 percent, 6.8 percent and 7.0 percent
in 1999, 1998 and 1997, respectively.

PROFIT PARTICIPATION PLAN

     CF&I has a discretionary profit participation plan under which it
distributes quarterly to eligible employees 12 percent of its operating income
after adjustments for certain nonoperating items. Each eligible employee
receives a share of the distribution based upon the level of the eligible
employee's base compensation compared with the total base compensation of all
eligible employees of CF&I. CF&I may modify, amend or terminate the plan at any
time, subject to the terms of the various collective bargaining agreements.

THRIFT PLANS

     CF&I has qualified Thrift (401(k)) plans for eligible employees under which
CF&I matches 25 or 50 percent, depending on the plan, of the first 4 or 6
percent of the participants' deferred compensation. CF&I's contribution expense
in 1999, 1998 and 1997 was $262,000, $268,000 and $269,000, respectively.

9.  COMMITMENTS AND CONTINGENCIES

ENVIRONMENTAL

     All material environmental remediation liabilities that are probable and
estimable are recorded in the financial statements based on current technologies
and current environmental standards at the time of evaluation. Adjustments are
made when additional information is available that may require different
remediation methods or periods, may be required, and affect the total cost. The
best estimate of the probable loss within a range is recorded; however, if there
is no best estimate, the low end of the range is recorded, and the range is
disclosed.

     In connection with the 1993 formation of CF&I and the acquisition of CF&I
by the Company, the Company accrued a liability of $36.7 million for
environmental remediation at the Pueblo Mill. The Company believed this amount
was the best estimate from a range of $23.1 million to $43.6 million. The
Company's estimate of this liability was based on two separate remediation
investigations conducted by independent environmental

                                      -41-
<PAGE>


engineering consultants. The liability includes costs for the Resource
Conservation and Recovery Act facility investigation, a corrective measures
study, remedial action, and operation and maintenance associated with the
proposed remedial actions. In October 1995, CF&I and the Colorado Department of
Public Health and Environment ("CDPHE") finalized a postclosure permit for
hazardous solid waste management units ("SWMUs") at the Pueblo Mill. As part of
the postclosure permit requirements, CF&I must conduct a corrective action
program for the 82 SWMUs at the facility and continue to address projects on a
prioritized corrective action schedule which is substantially reflective of a
straight-line rate of expenditure over 30 years. As of December 31, 1999, 11
SWMUs have been closed with no further action needed. CDPHE has stated that the
schedule for corrective action could be accelerated if new data indicated a
greater threat to the environment than is currently known to exist. At December
31, 1999, the accrued liability was $33.4 million, of which $30.9 million was
classified as noncurrent in the consolidated balance sheet.

     The CDPHE has inspected the Pueblo Mill for possible environmental
violations, and in the fourth quarter of 1999, issued a Compliance Advisory
indicating that air quality regulations had been violated. The CDPHE has now
filed a judicial enforcement action, which could result in the levying of
significant fines and penalties, requirements to make remediation expenditures,
accelerate or expand the capital expenditure program or a combination of any of
the above. It is not presently possible to estimate the ultimate liability as a
result of the action.

GUARANTEES

     Oregon Steel has outstanding $235 million principal amount of 11% First
Mortgage Notes ("Notes") due 2003. CF&I has guaranteed the obligations of Oregon
Steel under the Notes, and those guarantees are secured by substantially all the
property, plant and equipment and certain other assets of CF&I, excluding its
accounts receivable and inventory.

     In addition, Oregon Steel maintains a $125 million credit agreement with a
syndicate of lenders that is collateralized, in part, by CF&I's accounts
receivable and inventory, and is also guaranteed by CF&I.

LABOR DISPUTE

     CF&I's labor contract expired on September 30, 1997. After a brief contract
extension intended to help facilitate a possible agreement, on October 3, 1997
the United Steel Workers of America ("Union") initiated a strike for
approximately 1,000 bargaining unit employees at the Pueblo Mill. The parties
failed to reach final agreement on a new labor contract due to differences on
economic issues. As a result of contingency planning, CF&I was able to avoid
complete suspension of operations at the Pueblo Mill by utilizing a combination
of permanent replacement workers, striking employees whom returned to work and
salaried employees.

     On December 30, 1997 the Union called off the strike and made an
unconditional offer to return to work. At the time of this offer, only a few
vacancies existed at the Pueblo Mill. As of December 31, 1999, 152 former
striking employees had returned to work as a result of their unconditional
offer. Approximately 660 former striking workers remain unreinstated
("Unreinstated Employees").

     On February 27, 1998, the Regional Director of the National Labor Relations
Board's ("NLRB") Denver office issued a complaint against CF&I alleging
violations of several provisions of the National Labor Relations Act ("NLRA").
CF&I not only denies the allegations, but rather believes that both the facts
and the law fully support its contention that the strike was economic in nature
and that it is not obligated to displace the properly hired permanent
replacement employees. On August 17, 1998 a hearing on these allegations
commenced before an Administrative Law Judge ("Judge"). Testimony and other
evidence were presented at various sessions held in the latter part of 1998 and
early 1999, concluding on February 25, 1999. The Judge will render a decision
that is automatically subject to appeal by either party to the NLRB in
Washington, D.C. Ultimate determination of the issues may require a ruling from
the appropriate United States appellate court.

     Among the issues pending in the litigation is CF&I's motion asserting that
the Judge should consider the Union's alleged NLRA violations and that the
alleged misconduct should invalidate the Unreinstated Employees' right to
reinstatement. In the event there is an adverse determination of these issues,
Unreinstated Employees

                                      -42-
<PAGE>


could be entitled to back pay, including benefits, from the date of the Union's
unconditional offer to return to work through the date of the adverse
determination. The number of Unreinstated Employees entitled to back pay would
probably be limited to the number of past and present replacement workers;
however, the Union might assert that all Unreinstated Employees should be
entitled to back pay. Back pay is generally measured by the quarterly earnings
of those working less interim wages earned elsewhere by the Unreinstated
Employees. In addition to other considerations, each Unreinstated Employee has a
duty to take reasonable steps to mitigate the liability for back pay by seeking
employment elsewhere that has comparable demands and compensation. It is not
presently possible to estimate the ultimate liability in the event of an adverse
determination.

OTHER CONTINGENCIES

     CF&I is also party to various claims, disputes, legal actions and other
proceedings involving contracts, employment and various other matters. In the
opinion of management, the outcome of these matters would not have a material
adverse effect on the financial condition of CF&I.

10.          MAJOR CUSTOMERS

     During 1999, CF&I derived 15.3, 14.5 and 12.3 percent of its sales from
sales to its three most significant customers. During 1998 and 1997, CF&I earned
18.3, 17.8 and 11.4 percent and 17.5, 13.1 and 11.0 percent, respectively, of
its sales from sales to these same customers.

11.          RELATED PARTY TRANSACTIONS

OREGON STEEL MILLS, INC.

     CF&I pays administrative fees to Oregon Steel for services it provides
based on an allocation from Oregon Steel and reimburses Oregon Steel for costs
incurred on behalf of CF&I.
<TABLE>
<CAPTION>

                                                         1999       1998      1997
                                                       -------    -------    ------
                                                               (In thousands)
<S>                                                   <C>        <C>          <C>

Oregon Steel administrative fees                      $  3,285   $  3,175     $  4,103
Interest expense on notes payable to Oregon  Steel      24,712     21,777       21,891
Debt payable to Oregon Steel at December 31            201,090    186,000      182,200
Accounts payable to Oregon Steel at December 31          5,628      5,866        7,676
</TABLE>


NEW CF&I, INC.

     CF&I includes in costs of sales amounts related to transportation services
provided by a subsidiary of the Company.
<TABLE>
<CAPTION>


                                                        1999         1998         1997
                                                      --------     -------      -------
                                                                (In thousands)
<S>                                                    <C>         <C>          <C>

Services from subsidiary of the Company                $ 3,513     $ 4,025      $ 4,191
Interest expense on notes payable to the Company         1,740       1,808        1,964
Accounts payable to the Company at December 31           2,672       3,400        2,657
Debt payable to the Company at December 31              21,756      21,756       21,756
Interest payable on that debt at December 31             8,283       6,838        5,034
</TABLE>

                                      -43-
<PAGE>



NIPPON STEEL CORPORATION

     In 1994, CF&I entered into an equipment supply agreement for purchase of
deep head-hardened ("DHH") rail equipment from Nippon Steel Corporation
("Nippon"). Additionally, CF&I pays royalties to Nippon based on DHH rail sales.
CF&I has made payments on the DHH rail equipment and paid certain license and
technical fees, and royalties.
<TABLE>
<CAPTION>

                                                             1999        1998          1997
                                                            ------      ------        ------
                                                                     (In thousands)
     <S>                                                    <C>          <C>           <C>
     Payments to Nippon for the year ended December 31      $ 656        $672          $659
     Accounts payable to Nippon at December 31                179         502           346


</TABLE>

12.  UNUSUAL OR NONRECURRING ITEMS

SETTLEMENT OF LITIGATION

     Operating income for 1999 and 1998 includes a $4.5 million gain in each
year resulting from a litigation settlement with certain graphite electrode
suppliers.

PROCEEDS FROM INSURANCE SETTLEMENT

     Sales for 1997 include approximately $2.5 million of insurance proceeds as
reimbursement of lost profits resulting from lost production during the third
and fourth quarters of 1996 related to the failure of one of the power
transformers servicing CF&I.

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

     None.

                                      -44-
<PAGE>



                                    PART III

ITEMS 10. AND 11.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
                   AND EXECUTIVE COMPENSATION

     The following table sets forth information with respect to each director of
New CF&I, Inc. including their names and ages as of February 15, 2000, business
experience during the past five years and directorships in other corporations.
Directors are elected each year at the annual stockholders meeting.
<TABLE>
<CAPTION>


                                            PRINCIPAL OCCUPATION AND                                                   DIRECTOR
    NAME                                   CERTAIN OTHER DIRECTORSHIPS                                    AGE           SINCE
    ----                                   ---------------------------                                    ---          --------
<S>                             <C>                                                                       <C>          <C>
Joe E. Corvin                   Mr. Corvin is the Chairman of the Board of Directors, President and       54           1993
                                Chief Executive Officer of the Company. He served as President and
                                Chief Operating Officer of the Company from August 1996 to May 1999
                                and, prior to that, as Senior Vice President of Manufacturing and
                                Chief Operating Officer of the Company from March 1993 to August
                                1996.  He is the President and Chief Executive Officer of Oregon
                                Steel Mills. He was President and Chief Operating Officer of Oregon
                                Steel Mills since December 1996; prior to that, he served as Senior
                                Vice President for Oregon Steel Mills from July 1996.

L. Ray Adams                    Mr. Adams is the Vice President, Finance and Chief Financial              49           1993
                                Officer of the Company.  He served as a Director of Colorado &
                                Wyoming Railroad from March 1993 through March 1994.  He is also
                                the Vice President, Finance and Chief Financial Officer of Oregon
                                Steel Mills.  He assumed these positions with Oregon Steel Mills in
                                April 1991.

LaNelle F. Lee                  Ms. Lee is the  Corporate  Secretary of the Company.  She has served      62           1999
                                in  this  position  since  1994.  Ms.  Lee  is the  Vice  President,
                                Administration  and Corporate  Secretary of Oregon Steel Mills,  for
                                which  she has  served  since  April  1997.  Ms.  Lee has  served as
                                Corporate Secretary for Oregon Steel Mills since 1994.

Masaki Sato                     Mr. Sato became the President and Chief Executive  Officer of Nippon      59           1998
                                Steel  U.S.A.,  Inc.  and  Executive   Counsellor  of  Nippon  Steel
                                Corporation  in April 1997. He served as General  Manager,  Tin Mill
                                Products  Sales  Division,  Flat Products Group of Nippon Steel from
                                July 1995 to April 1997. He also served as General  Manager,  Export
                                Division-II,  at Nippon  Steel's  head  office in Tokyo,  Japan from
                                June 1994 to July 1995.

</TABLE>


      The following table sets forth the compensation paid to or accrued by the
Company and its subsidiaries for the Chief Executive Officer and each of the
four most highly paid executive officers of the Company and its subsidiaries as
of December 31, 1999, and other individuals fitting such description, but not
employed as such as of December 31, 1999. The Chief Executive Officer and
certain other executive officers were paid by Oregon Steel. The compensation
information relating to the named executive officers of the Company who are also
named executives of Oregon Steel and Section 16 reporting compliance information
as set forth under the captions "Executive Compensation," "Defined Benefit
Retirement Plans," "Employment Contracts and Termination of Employment and
Change in Control Arrangements," "Compensation Committee Interlocks and Insider


                                      -45-
<PAGE>

Participation," "Board Compensation, Personnel and Succession Planning Committee
Report on Executive Compensation" and "Section 16(a) Beneficial Ownership
Reporting Compliance" in the Oregon Steel Mills, Inc. Proxy Statement for the
2000 Annual Meeting of Stockholders are incorporated herein by reference.
Executive officers of the Company are listed on page 9 of this Form 10-K.
<TABLE>


                                                      SUMMARY COMPENSATION TABLE
<CAPTION>
                                             ANNUAL COMPENSATION(FN1)             ALL OTHER COMPENSATION(FN1)
                                        ----------------------------------      -----------------------------
               NAME AND                                                           THRIFT PLAN
          PRINCIPAL POSITION            YEAR         SALARY         BONUS       CONTRIBUTION(FN2)       OTHER
          ------------------            ----         ------       --------      ---------------         -----
   <S>                                  <C>          <C>          <C>           <C>                     <C>
   Thomas B. Boklund
   Chief Executive Officer

   Joe E. Corvin
   President and
      Chief Operating Officer

   L. Ray Adams
   Vice President,
      Finance and Chief
      Financial Officer

   LaNelle F. Lee
   Corporate Secretary

   David R. Smith                       1999         $188,333     $    -        $4,800                  $    -
   Vice President and
      General Manager
</TABLE>

---------------

(1)  Pension benefits accrued in 1999 are not included in this Summary
     Compensation Table.

(2)  Matching contributions made by the Company on behalf of the named executive
     to the Company's Thrift Plan.

------------

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                 AND MANAGEMENT

    The equity of New CF&I, Inc. is held 87 percent by Oregon Steel, 10 percent
by Nippon and 3 percent by Nissho Iwai. New CF&I, Inc., as general partner, has
a 95.2 percent partnership interest in CF&I Steel L.P. Oregon Steel has a 4.3
percent limited partnership interest in CF&I Steel, L.P. Nippon has a .5 percent
limited partnership interest in CF&I Steel, L.P.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    For related party transactions, see Note 13 to the Company's consolidated
financial  statements and Note 11 to CF&I's financial statements.

                                      -46-
<PAGE>









                                     PART IV

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

<TABLE>
<CAPTION>
                                                                                                                     PAGE
                                                                                                                     ----
     <S>      <C>     <C>                                                                                            <C>

     (A)              FINANCIAL STATEMENTS:
                      NEW CF&I, INC.

              (i)     Report of Independent Accountants - 1999, 1998 and 1997...................................       16
              (ii)    Consolidated Financial Statements:
                           Balance Sheets at December 31, 1999, 1998 and 1997...................................       17
                           Statements of Income for each of the three years
                               in the period ended December 31, 1999............................................       18
                           Statements of Changes in Stockholders' Equity for each of the
                               three years in the period ended December 31, 1999................................       19
                           Statements of Cash Flows for each of the three years
                               in the period ended December 31, 1999............................................       20
                           Notes to Consolidated Financial Statements...........................................       21

                      CF&I STEEL, L.P.

              (iii)   Report of Independent Accountants - 1999, 1998 and 1997...................................       32
              (iv)    Financial Statements:
                          Balance Sheets at December 31, 1999, 1998 and 1997....................................       33
                          Statements of Operations for each of the three years
                               in the period ended December 31, 1999............................................       34
                          Statements of Changes in Partners' Equity (Deficit)
                               for each of the three years in the period ended December 31, 1999................       35
                          Statements of Cash Flows for each of the three years
                               in the period ended December 31, 1999............................................       36
                          Notes to Financial Statements.........................................................       37
              (v)              Financial Statement Schedule for each of the
                               three years in the period ended December 31,
                               1999:

                          Schedule II - Valuation and Qualifying Accounts.......................................       48
              (vi)    Exhibits:  Reference is made to the list on page 49 of the exhibits filed with this
                           report.

     (B)              REPORT ON FORM 8-K:

                      No reports on Form 8-K were required to be filed by the
                      Registrant during the fourth quarter of the year ended
                      December 31, 1999.
</TABLE>

                                      -47-

<PAGE>
<TABLE>




                                                            NEW CF&I, INC.
                                                           CF&I STEEL, L.P.
                                            SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                                    FOR THE YEAR ENDED DECEMBER 31
                                                            (IN THOUSANDS)
<CAPTION>


                                                                               COLUMN C
                                                                 -------------------------
                                                  COLUMN B       ADDITIONS                                           COLUMN E
                                                 ----------                                                         ----------
                                                 BALANCE AT      CHARGED TO       CHARGED                           BALANCE AT
COLUMN A                                         BEGINNING       COSTS AND        TO OTHER         COLUMN D           END OF
--------                                                                                           ---------
CLASSIFICATION                                   OF PERIOD        EXPENSES        ACCOUNTS         DEDUCTIONS         PERIOD
--------------                                   ---------       ----------       --------         ----------       ----------
     <S>                                           <C>             <C>              <C>               <C>             <C>

     1999
     ----
Allowance for doubtful accounts                    $ 500           $ 138            $  -              $    -          $ 638
Valuation allowance for impairment
     of noncurrent deferred income
     tax assets                                    3,106               -               -                   -          3,106
     1998
     ----
Allowance for doubtful accounts                   $1,011            $  -            $  -              $(511)          $ 500
Valuation allowance for impairment
     of noncurrent deferred income
     tax assets                                        -           3,106               -                   -          3,106
     1997
     ----
Allowance for doubtful accounts                     $455            $820            $  -             $ (264)         $1,011

</TABLE>



                                      -48-

<PAGE>


  LIST OF EXHIBITS

  3.1            Certificate of Incorporation of New CF&I, Inc. (Filed as
                 exhibit 3.1 to Form S-1 Registration Statement 333-02355
                 and incorporated by reference herein.)
  3.2            Amended and Restated Agreement of Limited Partnership of
                 CF&I Steel, L.P. dated as of March 3, 1993, by and between
                 New CF&I, Inc. and the Pension Benefit Guaranty Corporation.
                 (Filed as exhibit 28.1 to the Current Report on Form 8-K of
                 Oregon Steel Mills, Inc. dated March 3, 1993, and incorporated
                 by reference herein.)
  3.3            Bylaws of New CF&I, Inc.  (Filed as exhibit 3.3 to Form S-1
                 Registration Statement 333-02355 and incorporated by
                 reference herein.)
  4.1            Indenture dated as of June 1, 1996 among Oregon Steel Mills,
                 Inc., as issuer; Chemical  Bank, as trustee, and New CF&I,
                 Inc. and CF&I Steel, L.P., as Guarantors, with respect to 11%
                 First Mortgage Notes due 2003.  (Filed as exhibit 4.1 to Form
                 10-Q dated June 30, 1996, and incorporated by reference
                 herein.)
  4.2            Form of Deed of Trust, Assignment of Rents and Leases and
                 Security Agreement.  (Filed as exhibit 4.2 to Amendment #1
                 to Form S-1 Registration Statement 333-02355 and incorporated
                 by reference herein.)
  4.3            Form of Security Agreement.  (Filed as exhibit 4.3 to Amendment
                 #1 to Form S-1 Registration Statement 333-02355 and
                 incorporated by reference herein.)
  4.4            Form of Intercreditor Agreement.  (Filed as exhibit 4.4 to
                 Amendment #1 to Form S-1 Registration Statement 333-02355
                 and incorporated by reference herein.)
  4.5            Form of Guarantee of First Mortgage Notes due 2003  (Filed as
                 exhibit 4.1 to Form 8-A of New CF&I, Inc. and CF&I Steel, L.P.,
                 filed on May 31, 1996, and incorporated by reference herein.)
  4.6            Form of Promissory Note.  (Filed as exhibit 4.2 to Form 8-A of
                 CF&I Steel, L.P. filed on May 31, 1996 and incorporated by
                 reference herein.)
 10.1            Asset Purchase Agreement dated as of March 3, 1993 among CF&I
                 Steel Corporation, Denver Metals Company, Albuquerque Metals
                 Company, CF&I Fabricators of Colorado, Inc., CF&I Fabricators
                 of Utah, Inc., Pueblo Railroad Service Company, Pueblo Metals
                 Company, Colorado & Utah Land Company, The Colorado and Wyoming
                 Railway Company, William J. Westmark as trustee for the estate
                 of The Colorado and Wyoming Railway Company, CF&I Steel, L.P.,
                 New CF&I, Inc. and Oregon Steel Mills, Inc. (Filed as exhibit
                 2.1 to the Current Report on Form 8-K of Oregon Steel Mills,
                 Inc. dated March 3, 1993, and incorporated by reference
                 herein.)
 27.1            Financial Data Schedule of New CF&I, Inc.
 27.2            Financial Data Schedule of CF&I Steel, L.P.
 99.1            Form of Credit Agreement between Oregon Steel Mills, Inc., as
                 the borrower, and the lender party thereto and Material
                 Differences Schedule. Portions of this exhibit have been
                 omitted pursuant to a confidential treatment request. (Filed as
                 exhibit 10.1 to Oregon Steel Mills, Inc. Form 10-Q dated June
                 30, 1999 and incorporated by reference herein.)**

 **              Certain Exhibits and schedules to this Exhibit are omitted.
                 A list of omitted exhibits is provided in the Exhibit
                 and the registrant agrees to furnish  supplementally to the
                 Commission a copy of any omitted Exhibit or schedule upon
                 request

                                      -49-
<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrants have duly caused this report to be signed
on their behalf by the undersigned, thereunto duly authorized.

                                      NEW CF&I, INC.

                                      BY    /S/ JOE E. CORVIN
                                        ------------------------------------
                                        CHAIRMAN AND CHIEF EXECUTIVE OFFICER

                                      CF&I STEEL, L.P.

                                      BY:  NEW CF&I, INC.
                                           GENERAL PARTNER

                                      BY    /S/ JOE E. CORVIN
                                        ------------------------------------
                                        CHAIRMAN AND CHIEF EXECUTIVE OFFICER

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of New CF&I, Inc.
and CF&I Steel, L.P. in the following capacities on the dates indicated.

           SIGNATURE              TITLE                               DATE
           ---------              -----                               ----

/s/  Joe E. Corvin      Chairman of the Board                     March 1, 2000
---------------------
(Joe E. Corvin)         President, Chief Executive
                        Officer and Director of New CF&I, Inc.
                        (Principal Executive Officer)

/s/  L. Ray Adams       Vice President, Finance,                  March 1, 2000
---------------------
(L. Ray Adams)          Chief Financial Officer and
                        Director of New CF&I, Inc.
                        (Principal Financial and Accounting
                        Officer)

/s/ LaNelle F. Lee      Corporate Secretary                       March 1, 2000
---------------------
(LaNelle F. Lee)        and Director of New CF&I, Inc.


/s/ Masaki Sato         Director of New CF&I, Inc.                March 1, 2000
---------------------
(Masaki Sato)

                                      -50-