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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-K
 þ
    
    Annual report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 31, 2005,
 OR
 o
    
    Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from to
 Commission file number 1-12164
 WOLVERINE TUBE, INC.
  Delaware
    
    63-0970812(State of Incorporation)
    
    (IRS Employer Identification No.)
 200 Clinton Avenue West, 10th Floor
Huntsville, Alabama
    
    35801(Address of principal executive offices)
    
    (Zip Code)
 (256) 353-1310
  Title of each class:
    
    Name of exchange on which registered:Common Stock, $0.01 par value
    
    New York Stock Exchange
  o þ
 o þ
 
 þ o
 o
  o þ o
  o þ
   Class
    
    Outstanding as of March 9, 2006Common Stock, $0.01 par value
    
    15,058,903 Shares




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Page No.PART IItem 1. Business
    
    
    1Item 1A. Risk Factors
    
    
    12Item 1B. Unresolved Staff Comments
    
    
    24Item 2. Properties
    
    
    24Item 3. Legal Proceedings
    
    
    26Item 4. Submission of Matters to a Vote of Security Holders
    
    
    26PART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    
    27Item 6. Selected Financial Data
    
    
    27Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    29Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    63Item 8. Financial Statements and Supplementary Data
    
    
    63Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    63Item 9A. Controls and Procedures
    
    
    64Item 9B. Other Information
    
    
    65PART IIIItem 10. Directors and Executive Officers of the Registrant
    
    
    66Item 11. Executive Compensation
    
    
    66Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    66Item 13. Certain Relationships and Related Transactions
    
    
    66Item 14. Principal Accounting Fees and Services
    
    
    66PART IVItem 15. Exhibits and Financial Statement Schedules
    
    
    67Ex-10.40  2002 Change in ControlEx-10.41  Form of Letter for Amendment to Split Dollar AgreementEx-10.42  Form of Letter for Vesting of Underwater OptionsEx-21  List of SubsidiariesEx-23.1  Consent of Independent Registered Public Accounting FirmEx-23.2  Consent of Independent Registered Public Accounting FirmEx-31.1  Section 302 Certification of the CEOEx-31.2  Section 302 Certification of the CFOEx-32.1  Section 906 Certification of the CEOEx-32.2  Section 906 Certification of the CFO




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PART I
 
 Item 1. Business
 General
     Available Information
 www.wlv.com
 1




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NYSE Certifications
  Competition
      2




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Product Segments
  Commercial Products
   Industrial Tube
  Technical Tube
  3




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Copper Alloy Tube
  Fabricated Products
  Metal Joining Products
   Wholesale Products
   Rod, Bar and Other Products
  4




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Sales and Marketing
  North America
  International
   Energy Efficiency and Governmental Regulations
  5




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Markets
  Products
    
    Major MarketsCommercial Products:Technical Tube
    
    Commercial air conditioning manufacturers, power and process industry, heat exchanger manufacturers, water, swimming pool and spa heater manufacturers and oil cooler manufacturers.Industrial Tube
    
    Residential and light commercial air conditioning manufacturers, appliance manufacturers, automotive manufacturers, industrial equipment manufacturers, refrigeration equipment manufacturers plumbing fittings and fixture manufacturers, and redraw mills (which further process the tube).Copper Alloy Tube
    
    Utilities and other power generating companies, refining and chemical processing companies, heat exchanger manufacturers and shipbuilders.Fabricated Products
    
    Commercial and residential air conditioning manufacturers, refrigeration manufacturers and consumer appliance manufacturers, automotive, controls, welding, electrical, marine, building, heat transfer industries and other general industrial applications.
 6




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Products
    
    Major MarketsMetal Joining Products
    
    Residential and commercial air conditioning manufacturers, plumbing, electronic, lighting, shipbuilding, aerospace, catalysts, jewelry and other metal joining industries.Wholesale Products
    
    Plumbing and refrigeration service wholesalers, and distributors.Rod, Bar and Other Products
    
    Electrical equipment, power generation and automotive parts manufacturers, locomotive, aluminum smelting and other industrial equipment manufacturers and metal service centers.
 Key Customers
  Backlog
  Manufacturing Processes
   7




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Raw Materials, Suppliers and Pricing
    8




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Buy/Resell Program
  Research and Development
  Ô
  9




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Patents and Trademarks
  Environmental Matters
     Employees
  10




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Executive Officers of the Registrant
  Name
    
    Age
    
    Current Position with the CompanyJohann R. Manning, Jr.
    
    
    45
    
    
    President and Chief Executive OfficerJames E. Deason
    
    
    58
    
    
    Senior Vice President, Chief Financial Officer, and SecretaryGarry K. Johnson
    
    
    50
    
    
    Senior Vice President, SalesKeith I. Weil
    
    
    48
    
    
    Senior Vice President, International and Strategic DevelopmentAllan J. Williamson
    
    
    58
    
    
    Corporate Controller
    11




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Item 1A. Risk Factors
   Due to operating losses incurred over the last six quarters, we have drawn-down on our liquidity
facilities in order to satisfy our working capital, debt service and other cash requirements. Peak
working capital demands, historically high copper prices, and continued operating losses may
require us to exhaust funds available under these facilities to meet our liquidity needs. If this
should occur, we may not be able to secure additional or alternative financing to continue to fund
our cash requirements.
 12




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If we are not able to meet the conditions in our receivables sale facility, our secured revolving
credit facility, or our silver consignment and forward contracts facility, the counterparties to
these facilities may restrict our access thereunder.
   13




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If we are unable to comply with the covenants contained in the indentures for our outstanding
senior notes and in our other liquidity agreements, we could face an acceleration of our debt and
possibly bankruptcy.
  
    
    incur other indebtedness;
    
    engage in transactions with affiliates;
    
    create or incur liens to secure debt;
    
    prepay or repurchase indebtedness;
    
    make certain restricted payments;
    
    enter into certain business combinations and asset sale transactions; and
    
    make investments.
   If we are unable to renew or replace our liquidity facilities as they expire or if we are unable to
refinance or restructure our senior notes as they mature, one possible outcome may be bankruptcy or
insolvency.
  14




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Significant debt levels may limit our future ability to obtain additional financing and to pursue
business opportunities.
   
    
    a substantial portion of any available cash from operating activities must be used to pay principal
and interest on our debt and may not be available for other purposes, thereby reducing the
availability of such available cash flow to fund working capital, capital expenditures, research
and development efforts and other general corporate purposes;
    
    our ability to obtain additional financing in the future for working capital,
capital expenditures, acquisitions or other purposes may be limited;
    
    our flexibility in planning for, or reacting to, changes in our business and the
industry in which we operate may be limited;
    
    adverse economic or industry conditions are more likely to have a negative effect on
our business;
    
    we may be at a competitive disadvantage to our competitors that have relatively less
indebtedness;
    
    our ability to make acquisitions, develop new technologies and products and take
advantage of significant business opportunities may be negatively affected; and
    
    the need to use available cash from operating activities to service and pay our debt
and for operating expenses may limit or impair our future ability to pay dividends, if
any, on our common stock.
 Given our significant debt levels, if we and our subsidiaries are able to incur more debt, the
risks described above could be further exacerbated.
  15




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Our business is dependent upon the availability and price of raw materials, particularly
copper. Significant disruptions in the supply of raw materials or continued periods of
historically high copper prices will materially adversely affect our operating results.
    16




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Continued historically high copper prices are having, and may continue to have, a substantial
impact upon both demand and pricing for our wholesale products which may continue to negatively
impact our business and adversely affect our revenues and operating margins.
  Current conditions in the copper forward markets have been unusual and may have a significant
impact on our financial results.
  Costs for energy and other natural resources may adversely affect our profitability.
  17




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Our customers operate in industries that are subject to cyclical and seasonal demand and that are
affected by other global economic and regulatory conditions, which can adversely affect our sales
volumes and profitability.
     We face significant competition in many cases from competitors that have manufacturing and
financial resources greater than ours.
  18




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Increasing competition from Asian competitors who sell both within China and for export to other
parts of the world may negatively impact our business and adversely affect our revenue and
operating results
  The loss of any of our major customers could adversely affect our revenues and financial health.
  Risks associated with the operation of our manufacturing facilities may have a material adverse
effect on our business.
  
    
    the breakdown, failure or substandard performance of equipment;
    
    inclement weather and natural disasters;
    
    the need to comply with directives of, and maintain all necessary permits from,
governmental agencies;
    
    raw material supply disruptions;
    
    labor force shortages, work stoppages, or other labor difficulties; and
    
    transportation disruptions.
  19




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We may engage in divestitures that could have a negative impact on our operations and financial
results and the availability under certain of our liquidity facilities.
  Currency fluctuations may place us at a competitive disadvantage and reduce our revenue.
  Our international operations expose us to numerous risks that other companies that are not global
may not face.
  
    
    economic downturns;
    
    changes in or interpretations of local law, governmental policy or regulation,
particularly in countries with developing legal systems such as China;
    
    restrictions on the transfer of funds into or out of the country;
    
    import and export duties and quotas and other trade barriers;
    
    domestic and foreign customs and tariffs;
    
    varying tax systems;
    
    different regimes controlling the protection of our intellectual property;
    
    political unrest;
    
    military outbreaks;
    
    government instability;
    
    nationalization of foreign assets; and
    
    government protectionism
 20




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We, and some of our major customers, have unionized employees and could be adversely affected by
labor disputes.
  If we are unable to attract and retain key personnel, our ability to operate effectively may be
impaired.
  We could incur significant costs, including remediation costs, as a result of complying with
environmental laws.
  21




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Our competitive advantage could be reduced if our intellectual property becomes known by our
competitors, or if technological changes reduce our customers need for our products.
  If our internal computer network and applications suffer disruptions or fail to operate as
designed, our operations will be disrupted and our business may be harmed.
  Our stock price may be volatile.
  22




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
    
    quarterly variations in our operating results;
    
    our ability to meet our liquidity needs;
    
    changes in revenue or earnings estimates or publication of research reports by
analysts;
    
    failure to meet analysts or our own revenue or earnings estimates;
    
    speculation in the press or investment community;
    
    strategic actions by us or our competitors, such as acquisitions or restructurings;
    
    the impact of the risks discussed herein and our ability to react effectively to
those risks;
    
    limited trading volume of our common stock;
    
    a change in technology that may add to manufacturing costs;
    
    actions by institutional stockholders;
    
    general market conditions; and
    
    domestic and international economic factors unrelated to our performance.
  Limited trading volume of our common stock may contribute to its price volatility.
  Future sales of our common stock may cause the price of our common stock to decline or impair our
ability to raise capital in the equity markets.
  Provisions in our charter documents, Delaware law and in other agreements may delay or prevent an
acquisition of Wolverine, which could decrease the value of our common stock.
 23




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Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
  24




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Domestic Facilities
 Owned/
    
    Property Size
    
    Plant Size
    
    
    
    
    
    Number of EmployeesLocation
    
    Leased
    
    (acres)
    

(square feet)
    
    Year Opened
    
    at Dec. 31, 2005
    
    DescriptionDecatur, AL
    
    Owned
    
    
    165
    
    
    
    620,000
    
    
    
    1948
    
    
    
    522
    
    
    Produces many of
our copper tube
product lines. A
significant portion
of production in
2004 was industrial
and technical tube
as well as
wholesale tube
products. Decatur
also produces
smooth feedstock
tube for the
Ardmore, Carrollton
and Altoona
facilities. In
2005, technical
tube production was
relocated to
Shawnee, OK and
Monterrey, Mexico.
This will allow for
increased
production of
industrial and
wholesale tube.
The Decatur
facility also
houses a portion of
our corporate
staff.Shawnee, OK
    
    Owned
    
    
    51
    
    
    
    309,000
    
    
    
    1974
    
    
    
    513
    
    
    Produces a majority
of our copper tube
product lines. A
significant portion
of production is
industrial and
technical tube.
Shawnee also
produces wholesale
tube products. It
produces feedstock
tube for the
Ardmore and
Carrollton
facilities, and fin
blanks for
Monterrey, Mexico.
Shawnee is also
capable of
supplying tube to
Altoona. In 2005,
Shawnee increased
production of
technical tube, and
decreased
production of
wholesale tube.Jackson, TN(1)
    
    Leased
    
    
    35
    
    
    
    112,000
    
    
    
    1998
    
    
    
    40
    
    
    Produces welded
copper enhanced
surface industrial
tube.Altoona, PA (2)
    
    Owned/
Leased
    
    
    32
    
    
    
    210,000
    
    
    
    1956
    
    
    
    221
    
    
    A redraw facility
that produces
higher value added
commercial
products, primarily
precision drawn and
cut tubular
products.Carrollton, TX
    
    Owned
    
    
    9
    
    
    
    165,000
    
    
    
    1999
    
    
    
    284
    
    
    Designs,
manufactures and
provides outsource
project management
of tubular
fabricated products
and assemblies
using various
materials including
copper, copper
alloy, aluminum,
steel and
outsourced
components.
Fabrication
capabilities range
from a single
operation to
complex brazed
assemblies.Booneville, MS
    
    Owned
    
    
    30
    
    
    
    152,000
    
    
    
    1989
    
    
    
    22
    
    
    This facility,
partially closed in
December 2003,
produces feedstock
for our Carrollton,
TX facility, redraw
base tube for our
Altoona, PA and
Decatur, AL
facilities and some
customer redraw
base tube.Warwick, RI
    
    Owned
    
    
    3
    
    
    
    70,000
    
    
    
    1978
    
    
    
    147
    
    
    Produces brazing
filler metals,
fluxes and other
specialty alloys.Ardmore, TN
    
    Owned
    
    
    28
    
    
    
    65,000
    
    
    
    1974
    
    
    
    84
    
    
    A redraw facility
that produces
higher margin
commercial products
such as capillary
tube and specialty
fabricated
components, as well
as aluminum tubing.
 
 (1)
    
    We sold the Jackson, Tennessee facility in December 2005, but continue to operate the
facility under a lease arrangement.(2)
    
    Leased a portion of the facility from an industrial development agency at a cost of
$3,500 annually in perpetuity.  25




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International Facilities
 Owned/
    
    Property Size
    
    Plant Size
    
    
    
    
    
    Number of EmployeesLocation
    
    Leased
    
    (acres)
    

(square feet)
    
    Year Opened
    
    at Dec. 31, 2005
    
    DescriptionMontreal, Quebec
    
    Owned
    
    
    25
    
    
    
    424,000
    
    
    
    1942
    
    
    
    339
    
    
    Produces wholesale
tube products,
copper and copper
alloy tube and
copper and copper
alloy rod and bar
and extruded
shapes.London, Ontario
    
    Owned
    
    
    45
    
    
    
    195,000
    
    
    
    1958
    
    
    
    249
    
    
    Produces wholesale
tube products and
industrial tube.
London also houses
corporate offices
for Wolverine Tube
(Canada) Inc.Shanghai, China (1)
    
    Leased
    
    
    3
    
    
    
    60,000
    
    
    
    1998
    
    
    
    181
    
    
    Produces technical
copper and copper
alloy tube from
feedstock supplied
by local copper
tube manufacturers
and also produces
brazed assemblies.Esposende, Portugal
    
    Owned
    
    
    3
    
    
    
    33,000
    
    
    
    2001
    
    
    
    59
    
    
    Produces technical
copper and copper
alloy tube from
feedstock supplied
by European copper
and copper alloy
tube manufacturers
and brazed
assemblies.Monterrey,Mexico
(2)
    
    Leased
    
    
    8
    
    
    
    130,000
    
    
    
    2004
    
    
    
    238
    
    
    Produces fabricated
components and
brazed assemblies
from feedstock
supplied by the
Shawnee, OK and
Decatur, AL
facilities. Began
producing technical
copper and copper
alloy tube from
feedstock supplied
by the Shawnee, OK
and Montreal,
Quebec facilities
in 2005.
 
 (1)
    
    Lease expires on December 31, 2011.(2)
    
    Lease expires October 1, 2009.   
 Item 3. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
  26




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PART II
 Item 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
   2005
    
    
    2004Period
    
    High
    
    
    Low
    
    
    High
    
    
    LowFirst Quarter
    
    $
    13.34
    
    
    $
    8.44
    
    
    $
    10.05
    
    
    $
    6.10Second Quarter
    
    
    8.85
    
    
    
    5.31
    
    
    
    12.79
    
    
    
    8.06Third Quarter
    
    
    8.55
    
    
    
    5.35
    
    
    
    13.15
    
    
    
    10.40Fourth Quarter
    
    
    7.75
    
    
    
    4.38
    
    
    
    13.09
    
    
    
    9.30
    Total Number of
    
    
    Approximate DollarTotal Number
    
    
    
    
    
    
    Shares Purchased as
    
    
    Value (in Millions)of Shares
    
    
    Average Price Paid
    
    
    Part of Publicly
    
    
    that May Yet BePurchased
    
    
    Per Share
    
    
    Announced Plans
    
    
    Purchased Under thePeriod
    
    (1)
    
    
    (2)
    
    
    or Programs
    
    
    Plans or Programs10/03/05 -10/30/05
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10/31/05  11/27/05
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11/28/05  12/31/05
    
    
    8,304
    
    
    
    4.93
    
    
    
    
    
    
    
    Total
    
    
    8,304
    
    
    
    4.93
    
    
    
    
 
 (1)
    
    Shares surrendered to the Company by an employee to satisfy individual tax
withholding obligations upon vesting of previously issued shares of restricted Common Stock.
Shares are not part of any Company repurchase plan.(2)
    
    Average price paid per share reflects the closing price of Wolverine Common Stock on
the business day the shares were surrendered by the employee stockholder. 
 Item 6. Selected Financial Data
  27




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Year Ended December 31,Statement of Operations Data:
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001(In thousands, except per share amounts)Net sales
    
    $
    873,505
    
    
    $
    797,875
    
    
    $
    596,324
    
    
    $
    550,523
    
    
    $
    583,114Cost of goods sold (a)
    
    
    851,862
    
    
    
    734,194
    
    
    
    555,498
    
    
    
    492,082
    
    
    
    520,874Gross profit
    
    
    21,643
    
    
    
    63,681
    
    
    
    40,826
    
    
    
    58,441
    
    
    
    62,240Selling, general and administrative expenses (b)
    
    
    37,074
    
    
    
    37,259
    
    
    
    32,103
    
    
    
    30,616
    
    
    
    32,254Restructuring and other charges (c)
    
    
    1,416
    
    
    
    2,536
    
    
    
    15,057
    
    
    
    
    
    
    
    1,546Operating income/(loss) from continuing operations
    
    
    (16,847
    )
    
    
    23,886
    
    
    
    (6,334
    )
    
    
    27,825
    
    
    
    28,440Other expense/(income):Interest expense, net
    
    
    20,727
    
    
    
    20,860
    
    
    
    21,218
    
    
    
    19,681
    
    
    
    13,100Loss/(gain) on extinguishment of debt
    
    
    
    
    
    
    3,009
    
    
    
    
    
    
    
    (1,349
    )
    
    
    Amortization and other, net (d)
    
    
    2,802
    
    
    
    1,261
    
    
    
    1,856
    
    
    
    1,008
    
    
    
    (447
    )Goodwill impairment
    
    
    
    
    
    
    
    
    
    
    23,153
    
    
    
    
    
    
    
    Income/(loss) from continuing operations before
income taxes
    
    
    (40,376
    )
    
    
    (1,244
    )
    
    
    (52,561
    )
    
    
    8,485
    
    
    
    15,787Income tax provision/(benefit) (e)
    
    
    (1,760
    )
    
    
    (1,888
    )
    
    
    (13,577
    )
    
    
    1,315
    
    
    
    4,345Income/(loss) from continuing operations (f)
    
    
    (38,616
    )
    
    
    644
    
    
    
    (38,984
    )
    
    
    7,170
    
    
    
    11,442Income/(loss) from discontinued operations, net
of tax (g)
    
    
    
    
    
    
    (262
    )
    
    
    (1,637
    )
    
    
    (1,610
    )
    
    
    (31,240
    )Net income/(loss) (h)
    
    $
    (38,616
    )
    
    $
    382
    
    
    $
    (40,621
    )
    
    $
    5,560
    
    
    $
    (19,798
    )Net income/(loss) applicable to common shares (i)
    
    $
    (38,616
    )
    
    $
    382
    
    
    $
    (40,621
    )
    
    $
    5,502
    
    
    $
    (20,078
    )Income/(loss) per common share-basic:Continuing operations
    
    $
    (2.57
    )
    
    $
    0.05
    
    
    $
    (3.18
    )
    
    $
    0.58
    
    
    $
    0.92Discontinued operations, net of tax
    
    
    
    
    
    
    (0.02
    )
    
    
    (0.13
    )
    
    
    (0.13
    )
    
    
    (2.58
    )Net income/(loss) per share
    
    $
    (2.57
    )
    
    $
    0.03
    
    
    $
    (3.31
    )
    
    $
    0.45
    
    
    $
    (1.66
    )Basic weighted average common shares
    
    
    15,022
    
    
    
    13,650
    
    
    
    12,275
    
    
    
    12,231
    
    
    
    12,077Income/(loss) per common share-diluted:Continuing operations
    
    $
    (2.57
    )
    
    $
    0.05
    
    
    $
    (3.18
    )
    
    $
    0.58
    
    
    $
    0.91Discontinued operations, net of tax
    
    
    
    
    
    
    (0.02
    )
    
    
    (0.13
    )
    
    
    (0.13
    )
    
    
    (2.54
    )Net income/(loss) per share
    
    $
    (2.57
    )
    
    $
    0.03
    
    
    $
    (3.31
    )
    
    $
    0.45
    
    
    $
    (1.63
    )Diluted weighted average common and
common equivalent shares
    
    
    15,022
    
    
    
    13,992
    
    
    
    12,275
    
    
    
    12,362
    
    
    
    12,307
 Year Ended December 31,Other Data:
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001(In thousands, except per pound amounts)Pounds shipped
    
    
    320,568
    
    
    
    339,417
    
    
    
    327,354
    
    
    
    310,240
    
    
    
    308,177Depreciation and amortization
    
    $
    17,049
    
    
    $
    17,407
    
    
    $
    19,009
    
    
    $
    18,416
    
    
    $
    18,679Capital expenditures
    
    
    10,009
    
    
    
    11,302
    
    
    
    5,969
    
    
    
    7,747
    
    
    
    27,612Average monthly COMEX price of copper per pound (j)
    
    
    1.68
    
    
    
    1.29
    
    
    
    0.81
    
    
    
    0.72
    
    
    
    0.73
 December 31,Balance Sheet Data:
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001(In thousands)Total assets
    
    $
    568,765
    
    
    $
    587,458
    
    
    $
    553,258
    
    
    $
    550,720
    
    
    $
    539,427Total long-term debt
    
    
    234,920
    
    
    
    237,022
    
    
    
    254,284
    
    
    
    255,712
    
    
    
    247,698Redeemable cumulative preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,000Stockholders equity
    
    
    163,302
    
    
    
    209,502
    
    
    
    179,351
    
    
    
    200,635
    
    
    
    201,412
 
 (a)
    
    In 2001, we incurred charges that are included in cost of goods sold of approximately $1.4
million, related to realized and anticipated reductions in demand for our product, and for the
write-down of slow moving or obsolete inventory. 28




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##### Table of Contents



(b)
    
    In 2005, the Company recorded charges to SG&A expense totaling $3.6 million related to the
termination of its Supplemental Executive Retirement Plan, the freezing of its U.S. defined
benefit and restoration benefit pension plans, and accelerated restricted stock vesting.(c)
    
    In 2005, 2004 and 2003, restructuring charges of $1.4 million ($0.9 million after tax), $2.5
million ($1.7 million after tax) and $15.1 million ($9.9 million after tax), respectively were
incurred (see Note 23 of the Notes to Consolidated Financial Statements).(d)
    
    In December 2005, we entered into a sales arrangement for our Jackson, Tennessee facility.
Included in the 2005 results is a $1.9 million loss associated with the write-down and sale of
the property.(e)
    
    In 2005, we established a valuation allowance related to our U.S. deferred tax assets in the
amount of $12.6 million.(f)
    
    Income from continuing operations for 2001, adjusted to exclude amortization of expense
recognized related to goodwill, would have been $14.1 million.(g)
    
    The operating results of Wolverine Ratcliffs, Inc. include losses of $0.3 million, $1.6
million, $1.6 million and $7.3 million (in each case net of tax) for the years ended 2004,
2003, 2002 and 2001, respectively, and had been classified as discontinued operations. In
addition, we recorded an estimated $23.9 million (net of tax) loss on the disposal of the
Wolverine Ratcliffs operations in 2001 (see Note 3 of the Notes to Consolidated Financial
Statements).(h)
    
    Net income/(loss) for 2001, adjusted to exclude amortization expense related to goodwill,
would have been $(16.9) million.(i)
    
    Reflects the payment of preferred stock dividends and accretion of preferred stock redemption
requirements.(j)
    
    Source: Metals Week. 
 Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
  Overview
  Executive Summary
  29




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30




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General
  Critical Accounting Policies
  Uses of Estimates
  Inventory
  Derivatives and Hedging Activities
  Accounting for
Derivative Instruments and Hedging Activities Accounting for Certain Derivative Instruments and
Certain Hedging Activities Amendment
of Statement 133 on Derivative Instruments and Hedging Activities
 31




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Foreign Currency Translation.
 Long-lived Assets
  Goodwill and Other Intangible
Assets,
 Income Taxes
 Accounting for Income Taxes
 Pension and Postretirement Benefit Costs
  32




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##### Table of Contents



.
    EITF 00-10
  Acceleration of Option Vesting
   Components of Cost of Goods Sold
  33




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##### Table of Contents



Variability of Wholesale Product Gross Profit
  Impact of Product Mix
  Cyclical and Seasonal Nature of Demand
   34




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Results of Continuing Operations
 Year-Ended December 31, 2005, Compared with Year-Ended December 31, 2004
  For the Year Ended December 31,(In thousands, except for percentages)
    
    2005
    
    
    2004
    
    
    Decrease
    
    
    % DecreaseCommercial products
    
    
    213,962
    
    
    
    225,996
    
    
    
    12,034
    
    
    
    5.3
    %Wholesale products
    
    
    88,455
    
    
    
    89,078
    
    
    
    623
    
    
    
    0.7
    %Rod, bar and other products
    
    
    18,151
    
    
    
    24,343
    
    
    
    6,192
    
    
    
    25.4
    %Total
    
    
    320,568
    
    
    
    339,417
    
    
    
    18,849
    
    
    
    5.5
    %
   For the Year Ended December 31,%$ Increase/
    
    
    Increase/(In thousands, except for percentages)
    
    2005
    
    
    2004
    
    
    (Decrease)
    
    
    (Decrease)Commercial products
    
    $
    619,159
    
    
    $
    570,666
    
    
    $
    48,493
    
    
    
    8.5
    %Wholesale products
    
    
    195,325
    
    
    
    165,215
    
    
    
    30,110
    
    
    
    18.2
    %Rod, bar and other products
    
    
    59,021
    
    
    
    61,994
    
    
    
    (2,973
    )
    
    
    (4.8
    )%Total
    
    $
    873,505
    
    
    $
    797,875
    
    
    $
    75,630
    
    
    
    9.5
    %
  35




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##### Table of Contents



For the Year Ended December 31,(In thousands, except for percentages)
    
    2005
    
    
    2004
    
    
    $ Decrease
    
    
    % DecreaseCommercial products
    
    $
    19,422
    
    
    $
    52,918
    
    
    $
    33,496
    
    
    
    63.3
    %Wholesale products
    
    
    650
    
    
    
    5,924
    
    
    
    5,274
    
    
    
    89.0
    %Rod, bar and other products
    
    
    1,571
    
    
    
    4,839
    
    
    
    3,268
    
    
    
    67.5
    %Total
    
    $
    21,643
    
    
    $
    63,681
    
    
    $
    42,038
    
    
    
    66.0
    %
   36




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37




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th
   Year-Ended December 31, 2004, Compared with Year-Ended December 31, 2003
  For the Year Ended December 31,%Increase/
    
    
    Increase/(In thousands, except for percentages)
    
    2004
    
    
    2003
    
    
    (Decrease)
    
    
    (Decrease)Commercial products
    
    
    225,996
    
    
    
    217,499
    
    
    
    8,497
    
    
    
    3.9
    %Wholesale products
    
    
    89,078
    
    
    
    90,005
    
    
    
    (927
    )
    
    
    (1.0
    )%Rod, bar and other products
    
    
    24,343
    
    
    
    19,850
    
    
    
    4,493
    
    
    
    22.6
    %Total
    
    
    339,417
    
    
    
    327,354
    
    
    
    12,063
    
    
    
    3.7
    %
   38




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##### Table of Contents



For the Year Ended December 31,(In thousands, except for percentages)
    
    2004
    
    
    2003
    
    
    $ Increase
    
    
    % IncreaseCommercial products
    
    $
    570,666
    
    
    $
    442,471
    
    
    $
    128,195
    
    
    
    29.0
    %Wholesale products
    
    
    165,215
    
    
    
    115,112
    
    
    
    50,103
    
    
    
    43.5
    %Rod, bar and other products
    
    
    61,994
    
    
    
    38,741
    
    
    
    23,253
    
    
    
    60.0
    %Total
    
    $
    797,875
    
    
    $
    596,324
    
    
    $
    201,551
    
    
    
    33.8
    %
   For the Year Ended December 31,(In thousands, except for percentages)
    
    2004
    
    
    2003
    
    
    $ Increase
    
    
    % IncreaseCommercial products
    
    $
    52,918
    
    
    $
    38,997
    
    
    $
    13,921
    
    
    
    35.7
    %Wholesale products
    
    
    5,924
    
    
    
    (271
    )
    
    
    6,195
    
    
    NM
    *Rod, bar and other products
    
    
    4,839
    
    
    
    2,100
    
    
    
    2,739
    
    
    
    130.4
    %Total
    
    $
    63,681
    
    
    $
    40,826
    
    
    $
    22,855
    
    
    
    56.0
    %
 
 *
    
    Not Meaningful (NM)    39




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40




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Restructuring and Other Charges
   For the year endedDecember 31,(In thousands)
    
    2005
    
    
    2004Roxboro, NC closing
    
    $
    (75
    )
    
    $
    1,413Booneville, MS closing
    
    
    (420
    )
    
    
    623Employee severance
    
    
    1,297
    
    
    
    500Sale of Company aircraft
    
    
    614
    
    
    
    Totals
    
    $
    1,416
    
    
    $
    2,536
 Liquidity and Capital Resources
  December 31,
    
    
    December 31,2005
    
    
    2004(In thousands)Cash and cash equivalents
    
    $
    27,329
    
    
    $
    35,017Working capital
    
    $
    181,427
    
    
    $
    201,965Total debt
    
    $
    235,168
    
    
    $
    238,241Current ratio
    
    
    2.70
    
    
    
    3.16
 41




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##### Table of Contents



Overview and Outlook
     42




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##### Table of Contents



Sources of Liquidity
  Cash and cash equivalents.
  Cash generated from/(used for) operations.
 Borrowings under our secured revolving credit facility.
 43




---



##### Table of Contents



Cash from our receivables sale facility
  Uses of Liquidity
  Working capital needs.
 Capital expenditures.
 Payments related to our outstanding debt and other financing facilities.
 44




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##### Table of Contents



Funding of pension obligations.
   Off-Balance Sheet Arrangements
   45




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Accounting for Transfers and Servicing of Financial Assets
  46




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Contractual Obligations and Commercial Commitments
  Payments due or expiring by period(In thousands)
    
    Total
    
    
    Less than 1 year
    
    
    1-3 years
    
    
    3-5 years
    
    
    More than 5 yearsContractual obligations:Long-term debt
    
    $
    235,168
    
    
    $
    248
    
    
    $
    137,638
    
    
    $
    97,282
    
    
    $
    Operating leases
    
    
    6,913
    
    
    
    3,084
    
    
    
    3,122
    
    
    
    688
    
    
    
    19Commitments for capital expenditures
    
    
    494
    
    
    
    494
    
    
    
    
    
    
    
    
    
    
    
    Estimated interest and fee payments
on senior notes, liquidity facilities and other debt
    
    
    66,903
    
    
    
    20,522
    
    
    
    37,683
    
    
    
    8,698
    
    
    
    Estimated payments on interest rate
swap
    
    
    2,572
    
    
    
    388
    
    
    
    2,184
    
    
    
    
    
    
    
    Estimated payments for U.S. defined
benefit pension plan
    
    
    9,800
    
    
    
    1,400
    
    
    
    6,800
    
    
    
    1,600
    
    
    
    Estimated payments for Canadian
defined pension plans
    
    
    8,900
    
    
    
    2,561
    
    
    
    3,415
    
    
    
    2,924
    
    
    
    Other purchase obligations
    
    
    1,071
    
    
    
    1,071
    
    
    
    
    
    
    
    
    
    
    
    Total contractual obligations
    
    $
    331,821
    
    
    $
    29,768
    
    
    $
    190,842
    
    
    $
    111,192
    
    
    $
    19Other commercial commitments (by
scheduled expiration dates):
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Standby letters of credit
    
    $
    12,534
    
    
    $
    1,600
    
    
    $
    10,934
    
    
    
    
    
    
    
    
  Financing Agreements
 Liquidity Facilities
  47




---



##### Table of Contents



Secured Revolving Credit Facility
 Availability.
 Borrowing Base
 48




---



##### Table of Contents



Interest and Fees
 Maturity
 Security
 Covenants
  49




---



##### Table of Contents



Events of Default and Acceleration.
  Silver Consignment and Forward Contracts Facility
  50




---



##### Table of Contents



Fees.
 Security
 Representations, Warranties and Covenants
 Termination and Events of Default
 51




---



##### Table of Contents



Receivables Sale Facility
  Structure
  52




---



##### Table of Contents



Available Amounts
  Costs
 Representations, Warranties, Covenants and Indemnities
 Termination.
  53




---



##### Table of Contents




    
    an amendment to the consolidated EBITDA requirement for the second fiscal quarter of
2005 in order to bring the Company into compliance with this requirement for that
period, as well as a prospective adjustment to the consolidated EBITDA test, both
consistent with the revised consolidated EBITDA covenant contained in the August 2005
amendment to the Amended and Restated Credit Agreement;
    
    the addition or enhancement of certain financial and operational reporting
obligations, including those obligations required under the August 2005 amendment to
the Amended and Restated Credit Agreement;
    
    an adjustment to the loss reserve and dilution reserve formulas that are used in the
availability calculation; and
    
    the elimination of the obligation to comply with the $5 million excess availability
requirement under the Amended and Restated Credit Agreement.
  February 2006 Amendments
   54




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##### Table of Contents




    
    adjustments to the borrowing base calculation, including an increase in the book
value of eligible equipment included in the borrowing base from $8 million to $11
million, as well as the inclusion of certain billet inventory in the borrowing base;
    
    a provision permitting the filing of certain precautionary financing statements in
connection with ordinary course tolling arrangements with customers; and
    
    adjustments to certain reporting requirements.
   
    
    the institution of a weekly reporting and collections system;
    
    a provision making the termination of the Amended and Restated Credit Agreement an
amortization event under the Receivables Purchase Agreement; and
    
    certain adjustments to concentration and reserve calculations, including an increase
in the general obligor concentration limit for non-rated and non-investment grade
obligors to from 3% to 5%, an increase in one special obligor concentration limit from
7.5% to 10%, and an increase in the fixed portion of the required reserve factor floor
from 13.5% to 22%.
   
    
    an adjustment to the consignment limit decreasing the maximum value of consigned
silver available at any time under the consignment facility to the lesser of $17.0
million dollars or the value of 2.0 million fine troy ounces of silver (as this limit
may be changed from time to time by the parties), in either case less an
amount equal to 20% of the face value of all outstanding forward contracts under the
forward contracts facility;
    
    an increase in the floating consignment fee on consigned silver from an annual rate
of 4.50% to 5.25% (as this rate may be changed from time to time by BANA);
    
    an increase in the frequency of precious metal inventory reporting to twice monthly;
and
    
    an agreement that BANA will not request additional letters of credit or other
collateral for the Companys and Wolverine Joinings obligations under the Amended and
Restated Consignment Agreement until the earlier of the
 55




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##### Table of Contents



termination of the consignment
facility, the termination of the forward contracts facility or the occurrence of an
event of default.
  10.5% Senior Notes due 2009
  
    
    have interest payment dates on April 1 and October 1 of each year;
    
    are redeemable after the dates and at the prices (expressed in percentages of principal
amount on the redemption date), as set forth below:
 Year
    
    PercentageApril 1, 2006
    
    
    105.250
    %April 1, 2007
    
    
    102.625
    %April 1, 2008 and thereafter
    
    
    100.000
    %
 
    
    are senior unsecured obligations and are equal priority in right of payment with any of
our existing and future senior unsecured indebtedness;
    
    are guaranteed by certain of our subsidiaries; and
    
    are subject to the terms of the indenture governing our 10.5% Senior Notes, which
contains certain covenants, including covenants that limit our ability to, among other
things, incur unsecured indebtedness, incur indebtedness for borrowed money secured by
certain liens, make certain restricted payments, dispose of certain assets, enter into
affiliate transactions or engage in sale/leaseback transactions.
 7.375% Senior Notes due 2008
  
    
    have interest payment dates on February 1 and August 1 of each year;
    
    are redeemable at our option at a redemption price equal to the greater of (a) 100% of
the principal amount of our 7.375% Senior Notes to be redeemed, or (b) the sum of the
present value of the remaining scheduled payments of principal and interest thereon from
the redemption date to the maturity date, discounted to the redemption date on a semiannual
basis at the Treasury Rate plus 25 basis points, plus, in each case, accrued interest
thereon to the date of redemption;
    
    are senior unsecured obligations and are equal priority in right of payment with any of
our existing and future senior unsecured indebtedness;
 56




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
    
    are guaranteed by certain of our subsidiaries, all of which are also guarantors
under the 10.5% Senior Notes issued in March 2002;
    
    are subject to the terms of the indenture governing our 7.375% Senior Notes, which
contains certain covenants, including covenants that limit our ability to incur
indebtedness for borrowed money secured by certain liens and to engage in sale/leaseback
transactions.
 Other Credit Facilities
   Market Risks
  Commodity Price Risk
  57




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##### Table of Contents



For the Year Ended December 31,(In millions)
    
    2005
    
    
    2004Gain arising from ineffectiveness included in operations
    
    $
    1.4
    
    
    $
    Gains reclassed from other comprehensive income/(loss)
(OCI) to operations
    
    $
    3.4
    
    
    $
    0.7
 December 31,(In millions)
    
    2005
    
    
    2004Aggregate notional value of derivatives outstanding
    
    $
    8.8
    
    
    $
    10.5Period through which derivative positions currently exist
    
    December 2006
    
    
    September 2006Gain in fair value of derivatives
    
    $
    2.8
    
    
    $
    1.1The change in fair value due to the effect of a 10%
adverse change in commodity prices to current fair value
    
    $
    (1.2
    )
    
    $
    (1.3
    )Deferred gains included in OCI
    
    $
    2.3
    
    
    $
    1.1Gains included in OCI to be recognized in the next 12 months
    
    $
    2.3
    
    
    $
    1.1Number of months over which gain in OCI is to be recognized
    
    
    12
    
    
    
    21
  For the Year Ended December 31,(In millions)
    
    2005
    
    
    2004(Loss) arising from ineffectiveness included in operations
    
    $
    (1.3
    )
    
    $
    (Losses) reclassed from OCI to operations
    
    $
    (4.2
    )
    
    $
    (1.7
    )
 December 31,(In millions)
    
    2005
    
    
    2004Aggregate notional value of derivatives outstanding
    
    $
    5.6
    
    
    $
    26.1Period through which derivative positions currently exist
    January 2006
    
    March 2005(Loss) in fair value of derivatives
    
    $
    
    
    
    $
    (0.9
    )The change in fair value due to the effect of a 10%
adverse change in commodity prices to current fair value
    
    $
    (0.6
    )
    
    $
    (2.7
    )Deferred gains/(losses) included in OCI
    
    $
    0.2
    
    
    $
    (0.8
    )Gains/(losses) included in OCI to be recognized in the
next 12 months
    
    $
    0.2
    
    
    $
    (0.8
    )Number of months over which gain/(loss) in OCI is to be
recognized
    
    
    1
    
    
    
    3
  58




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For the Year Ended December 31,(In millions)
    
    2005
    
    
    2004(Loss) arising from ineffectiveness included in operations
    
    $
    (2.7
    )
    
    $
    (0.5
    )
 December 31,(In millions)
    
    2005
    
    
    2004Aggregate notional value of derivatives outstanding
    
    $
    29.6
    
    
    $
    64.1Period through which derivative positions currently exist
    March 2006

    March 2005(Loss) in fair value of derivatives
    
    $
    (2.4
    )
    
    $
    (1.8
    )The change in fair value due to the effect of a 10%
adverse change in commodity prices to current fair value
    
    $
    (3.2
    )
    
    $
    (6.6
    )
  For the Year Ended December 31,(In millions)
    
    2005
    
    
    2004Gain arising from ineffectiveness included in operations
    
    $
    2.3
    
    
    $
    Gains reclassed from OCI to operations
    
    
    3.1
    
    
    
    1.0
 December 31,(In millions)
    
    2005
    
    
    2004Aggregate notional value of derivatives outstanding
    
    $
    12.2
    
    
    $
    11.9Period through which derivative positions currently exist

    December 2008
    
    December 2006Gain in fair value of derivatives
    
    $
    1.9
    
    
    $
    0.1The change in fair value due to the effect of a 10% adverse
change in commodity prices to current fair value
    
    $
    (1.4
    )
    
    $
    (1.2
    )Deferred gains/(losses) included in OCI
    
    $
    (0.3
    )
    
    $
    0.1Gains included in OCI to be recognized in the next 12 months
    
    $
    0.5
    
    
    $
    0.1Number of months over which gain in OCI is to be recognized
    
    
    36
    
    
    
    24
 Foreign Currency Exchange Risk
  59




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Interest Rate Risk
    Material Limitations
  60




---



##### Table of Contents



Environmental Matters
  Decatur, Alabama
    61




---



##### Table of Contents



Ardmore, Tennessee
    Altoona, Pennsylvania
  Impact of Recently Issued Accounting Standards
  62




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##### Table of Contents



Item 7A. Quantitative and Qualitative Disclosures about Market Risk
  
 Item 8. Financial Statements and Supplementary Data
 PageConsolidated Statements of OperationsFor the years ended December
31, 2005, 2004 and 2003.
    
    F-1Consolidated Balance SheetsDecember 31, 2005 and 2004.
    
    F-2Consolidated Statements of Stockholders EquityFor the years ended
December 31, 2005, 2004 and 2003.
    
    F-3Consolidated Statements of Cash FlowsFor the years ended December
31, 2005, 2004 and 2003.
    
    F-4Notes to Consolidated Financial Statements.
    
    F-5Report of Independent Registered Public Accounting Firm.
    
    F-56Report of Independent Registered Public Accounting Firm.
    
    F-57Report of Independent Registered Public Accounting Firm.
    
    F-58
 
 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    63




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Item 9A. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
  Managements Report on Internal Control over Financial Reporting
 Internal Control-Integrated Framework
  64




---



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Item 9B. Other Information
  65




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##### Table of Contents



PART III
 
 Item 10. Directors and Executive Officers of the Registrant
   
 Item 11. Executive Compensation
  
 Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
  
 Item 13. Certain Relationships and Related Transactions
  
 Item 14. Principal Accounting Fees and Services
  66




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##### Table of Contents



PART IV
 
 Item 15. Exhibits and Financial Statement Schedules
  (1)
    
    The following consolidated financial statements and reports are included beginning on
page F-1 hereof:Consolidated Statements of Operations  For the years ended December 31, 2005, 2004, and
2003.Consolidated Balance Sheets  December 31, 2005 and 2004.Consolidated Statements of Stockholders Equity  For the years ended December 31, 2005,
2004, and 2003.Consolidated Statements of Cash Flows  For the years ended December 31, 2005, 2004, and
2003.Notes to Consolidated Financial Statements.Report of Independent Registered Public Accounting Firm.Report of Independent Registered Public Accounting Firm.Report of Independent Registered Public Accounting Firm.(2)
    
    The following consolidated financial statement schedule of the Company is included on
page S-1 hereof:SCHEDULE II           Valuation and Qualifying Accounts
  (3)
    
    Exhibits required by Item 601 of Regulation S-K:
  Exhibit No.
    
    Description10.40*
    
    2002 Change in Control, Severance and Non-Competition
Agreement, dated as of July 12, 2002, by and between the
Company and Garry K. Johnson.10.41*
    
    Form of Letter for Amendment to Split Dollar Agreement Dated
May 1, 199910.42*
    
    Form of Letter for Vesting of Underwater Options21
    
    List of Subsidiaries.23.1
    
    Consent of KPMG LLP, Independent Registered Public Accounting
Firm.23.2
    
    Consent of Ernst & Young LLP, Independent Registered Public
Accounting Firm
 67




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##### Table of Contents



Exhibit No.
    
    Description31.1
    
    Certification of the Chief Executive Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of the Chief Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of the Chief Executive Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of the Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
  Exhibit No.
    
    Description3.1
    
    Restated Certificate of Incorporation of the Company, as
amended through May 1, 1998 (incorporated by reference to
Exhibit 3.1 to the Companys Quarterly Report on Form 10-Q
for the period ended July 4, 1998).3.2
    
    Secretarys Certificate, dated February 6, 2004, attached to
a complete copy of the Bylaws of the Company, as amended May
22, 1997 (incorporated by reference to Exhibit 3.3 to the
Companys Annual Report on Form 10-K for the period ended
December 31, 2003).4.1
    
    Rights Agreement, dated as of February 13, 1996, between the
Company and Society National Bank, as Rights Agent
(incorporated by reference to Exhibit 4.0 to the Companys
Registration Statement on Form 8-A, filed on February 22,
1996).4.2
    
    Indenture, dated as of August 4, 1998, among the Company,
certain of the Companys subsidiaries and Wachovia Bank,
National Association (successor to First Union National Bank)
as Trustee (incorporated by reference to Exhibit 4.1 to the
Companys Quarterly Report on Form 10-Q for the period ended
July 4, 1998).4.3
    
    Indenture, dated as of March 27, 2002, among the Company,
certain of the Companys subsidiaries and Wachovia Bank,
National Association (successor to First Union National
Bank), as Trustee (incorporated by reference to Exhibit 4.3
to the Companys Annual Report on Form 10-K for the period
ended December 31, 2001).10.1
    
    Amended and Restated Credit Agreement, dated as of April 28,
2005, among the Company, its U.S. subsidiaries, the lenders
named therein and Wachovia Bank, National Association, as
administrative agent (incorporated by reference to Exhibit
10.3 to the Companys Quarterly Report on Form 10-Q for the
period ended July 3, 2005).
 68




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##### Table of Contents



Exhibit No.
    
    Description10.2
    
    Amendment No. 1 to Amended and Restated Credit Agreement,
dated as of August 1, 2005, among the Company, its U.S.
subsidiaries, the lenders named therein and Wachovia Bank,
National Association, as administrative agent (incorporated
by reference to Exhibit 10.1 to the Companys Current Report
on Form 8-K filed on August 5, 2005).10.3
    
    Amendment No. 2 to Amended and Restated Credit Agreement,
effective September 30, 2005, among the Company, its U.S.
subsidiaries, the lenders named therein and Wachovia Bank,
National Association, as administrative agent (incorporated
by reference to Exhibit 10.1 to the Companys Current Report
on Form 8-K filed on October 31, 2005).10.4
    
    Amended and Restated Consignment Agreement, dated as of April
28, 2005, among the Company, Wolverine Joining Technologies,
LLC and Fleet Precious Metals Inc., operating as Bank of
America Precious Metals (incorporated by reference to Exhibit
10.4 to the Companys Current Report on Form 8-K filed on May
4, 2005).10.5
    
    First Amendment to Amended and Restated Consignment
Agreement, dated as of August 1, 2005, among the Company,
Wolverine Joining Technologies, LLC and Fleet Precious Metals
Inc., operating as Bank of America Precious Metals
(incorporated by reference to Exhibit 10.3 to the Companys
Current Report on Form 8-K filed on August 5, 2005).10.6
    
    Receivables Sale Agreement, dated as of April 28, 2005, among
the Company, Small Tube Manufacturing, LLC, Tube Forming,
L.P. and DEJ 98 Finance, LLC (incorporated by reference to
Exhibit 10.1 to the Companys Current Report on Form 8-K
filed on May 4, 2005).10.7
    
    Receivables Purchase Agreement, dated as of April 28, 2005,
among DEJ 98 Finance, LLC, Wolverine Finance, LLC, the
Company, Blue Ridge Asset Funding Corporation, the liquidity
banks from time to time party thereto and Wachovia Bank,
National Association, as agent (incorporated by reference to
Exhibit 10.2 to the Companys Current Report on Form 8-K
filed on May 4, 2005).10.8
    
    Amendment No. 1 to Receivables Purchase Agreement, dated as
of August 1, 2005, among DEJ 98 Finance, LLC, Wolverine
Finance, LLC, the Company, Blue Ridge Asset Funding
Corporation and Wachovia Bank, National Association,
individually and as agent (incorporated by reference to
Exhibit 10.2 to the Companys Current Report on Form 8-K
filed on August 5, 2005).10.9
    
    Amendment No. 2 to Receivables Purchase Agreement, effective
September 30, 2005, among DEJ 98 Finance, LLC, Wolverine
Finance, LLC, the Company, Blue Ridge Asset Funding
Corporation and Wachovia Bank, National Association,
individually and as agent (incorporated by reference to
Exhibit 10.2 to the Companys Current Report on Form 8-K
filed on October 31, 2005).10.10*
    
    Wolverine Tube, Inc. 1993 Equity Incentive Plan (incorporated
by reference to Exhibit 10.7 to the Companys Registration
Statement on Form S-1 (File No. 33-65148)).
 69




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##### Table of Contents



Exhibit No.
    
    Description10.11*
    
    Form of Non-Qualified Option Agreement under the Wolverine
Tube, Inc. 1993 Equity Incentive Plan (incorporated by
reference to Exhibit 10.15 to the Companys Quarterly Report
on Form 10-Q for the period ended July 2, 1994).10.12*
    
    1993 Stock Option Plan for Outside Directors of Wolverine
Tube, Inc. (incorporated by reference to Exhibit 10.8 to the
Companys Registration Statement on Form S-1 (File No.
33-65148)).10.13*
    
    Amendment One to Amended and Restated 1993 Stock Option Plan
for Outside Directors of Wolverine Tube, Inc. (incorporated
by reference to Exhibit 10.1 to the Companys Quarterly
Report on Form 10-Q for the period ended April 1, 2001).10.14*
    
    2001 Stock Option Plan for Outside Directors of Wolverine
Tube, Inc. (incorporated by reference to Appendix B to the
Companys Proxy Statement dated April 12, 2001).10.15*
    
    Form of Non-Qualified Option Agreement under the Companys
1993 Stock Option Plan for Outside Directors and 2001 Stock
Option Plan for Outside Directors (incorporated by reference
to Exhibit 10.1 to the Companys Quarterly Report on Form
10-Q for the period ended October 3, 2004).10.16*
    
    Wolverine Tube, Inc. 2003 Equity Incentive Plan (incorporated
by reference to Exhibit 10.1 to the Companys Quarterly
Report on Form 10-Q for the period ended June 29, 2003).10.17*
    
    First Amendment to the Wolverine Tube, Inc. 2003 Equity
Incentive Plan (incorporated by reference to Exhibit 10.2 to
the Companys Quarterly Report on Form 10-Q for the period
ended June 29, 2003).10.18*
    
    Form of Non-Qualified Option Agreement under the Wolverine
Tube, Inc. 2003 Equity Incentive Plan (incorporated by
reference to Exhibit 10.2 to the Companys Quarterly Report
on Form 10-Q for the period ended October 3, 2004).10.19*
    
    Form of Restricted Stock Agreement under the Wolverine Tube,
Inc. 2003 Equity Incentive Plan, (incorporated by reference
to Exhibit 10.1 to the Companys Current Report on Form 8-K
filed on May 25, 2005).10.20*
    
    Form of SAR Agreement under the Wolverine Tube, Inc. 2003
Equity Incentive Plan (incorporated by reference to Exhibit
10.4 to the Companys Quarterly Report on Form 10-Q for the
period ended October 3, 2004).10.21*
    
    Wolverine Tube, Inc. Long Term Incentive Plan (incorporated
by reference to Exhibit 10.2 to the Companys Quarterly
Report on Form 10-Q for the period ended April 3, 1999).10.22*
    
    Wolverine Tube, Inc. 2003 Annual Performance Incentive Plan
(incorporated by reference to Exhibit 10.22 to the Companys
Annual Report on Form 10-K for the period ended December 31,
2002).10.23*
    
    Wolverine Tube, Inc. Supplemental Benefit Restoration Plan
(incorporated by reference to Exhibit 10.1 of the Companys
Quarterly Report on Form 10-Q for the period ended June 30,
2002).
 70




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##### Table of Contents



Exhibit No.
    
    Description10.24*
    
    Deferred Compensation Trust Agreement, dated February 13,
2001, by and between the Company and AmSouth Bank, as Trustee
(incorporated by reference to Exhibit 10.1 to the Companys
Quarterly Report on Form 10-Q for the period ended March 30,
2003).10.25*
    
    Amendment Number One to Deferred Compensation Trust
Agreement, dated May 7, 2003, by and between the Company and
AmSouth Bank, as Trustee (incorporated by reference to
Exhibit 10.2 to the Companys Quarterly Report on Form 10-Q
for the period ended March 30, 2003).10.26*
    
    2002 Change in Control, Severance and Non-Competition
Agreement, dated as of July 12, 2002, by and between the
Company and Johann R. Manning, Jr. (incorporated by reference
to Exhibit 10.5 to the Companys Quarterly Report on Form
10-Q for the period ended June 30, 2002).10.27*
    
    2002 Change in Control, Severance and Non-Competition
Agreement, dated as of July 12, 2002, by and between the
Company and Keith Weil (incorporated by reference to Exhibit
10.6 to the Companys Quarterly Report on Form 10-Q for the
period ended June 30, 2002).10.28*
    
    2002 Change in Control, Severance and Non-Competition
Agreement, dated as of July 12, 2002, by and between the
Company and Massoud Neshan (incorporated by reference to
Exhibit 10.20 to the Companys Annual Report on Form 10-K for
the period ended December 31, 2002).10.29*
    
    2004 Change in Control, Severance and Non-Competition
Agreement, dated as of December 1, 2004, by and between the
Company and Thomas Sabol, (incorporated by reference to
Exhibit 10.1 to the Companys Current Report on Form 8-K
filed on December 1, 2004).10.30*
    
    Severance Agreement, dated as of November 4, 2005, between
the Company and Thomas B. Sabol (incorporated by reference to
Exhibit 10.1 to the Companys Current Report on Form 8-K
filed on November 9, 2005).10.31*
    
    Consultant Agreement, dated as of February 10, 2005, by and
between the Company and James E. Deason (incorporated by
reference to Exhibit 10.1 to the Companys Current Report on
Form 8-K filed on February 16, 2005).10.32*
    
    Offer Letter, dated as of November 7, 2005, between the
Company and James E. Deason (incorporated by reference to
Exhibit 10.2 to the Companys Current Report on Form 8-K
filed on November 9, 2005).10.33*
    
    Retirement Agreement, dated as of November 17, 2005, between
the Company and Dennis J. Horowitz (incorporated by reference
to Exhibit 10.1 to the Companys Current Report on Form 8-K
filed on November 23, 2005).10.34*
    
    Director Agreement, dated as of November 17, 2005, between
the Company and Dennis J. Horowitz (incorporated by reference
to Exhibit 10.2 to the Companys Current Report on Form 8-K
filed on November 23, 2005).
 71




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##### Table of Contents



Exhibit No.
    
    Description10.35*
    
    Consultant Agreement, dated as of November 17, 2005, between
the Company and DH Partners, LLC (incorporated by reference
to Exhibit 10.3 to the Companys Current Report on Form 8-K
filed on November 23, 2005).10.36*
    
    Summary of Non-Employee Director Compensation (incorporated
by reference to Exhibit 10.2 to the Companys Current Report
on Form 8-K filed on May 25, 2005).10.37*
    
    2005 Base Salaries and Other Compensation of Named Executive
Officers (incorporated by reference to the Companys
Quarterly Report on Form 10-Q for the period ended July 3,
2005).10.38*
    
    Form of Director Indemnification Agreement, dated as of
February 10, 2005 (incorporated by reference to Exhibit 10.2
to the Companys Current Report on Form 8-K filed on February
16, 2005).10.39*
    
    Form of Officer Indemnification Agreement, dated as of
February 10, 2005 (incorporated by reference to Exhibit 10.3
to the Companys Current Report on Form 8-K filed on February
16, 2005).16.1
    
    Letter, dated August 25, 2004, to the Securities and Exchange
Commission from Ernst & Young LLP (incorporated by reference
to Exhibit 16.1 to the Companys Current Report on Form 8-K/A
filed on August 25, 2004).
 
 *
    
    Management contract or compensatory plan or arrangement. 72




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##### Table of Contents



SIGNATURES
  WOLVERINE TUBE, INC.By:
    
    /s/ James E. DeasonName:
    
    James E. DeasonTitle:
    
    Senior Vice President, Chief
Financial Officer, and Secretary
  Signature
    
    
    
    Title
    
    DateBy:
    
    /s/ Johann R. Manning, Jr.

Johann R. Manning, Jr.
    
    
    
    President and Chief Executive
Officer and Director
(Principal Executive Officer)
    
    March 10, 2006By:
    
    /s/ James E. Deason

James E. Deason
    
    
    
    Senior Vice President, Chief
Financial Officer, and Secretary
(Principal Financial Officer and
Principal Accounting Officer)
    
    March 10, 2006By:
    
    /s/ Dennis J. Horowitz

Dennis J. Horowitz
    
    
    
    Non-Executive Chairman of
the Board and Director
    
    March 10, 2006By:
    
    /s/ Julie A. Beck

Julie A. Beck
    
    
    
    Director
    
    March 10, 2006By:
    
    /s/ John L. Duncan

John L. Duncan
    
    
    
    Director
    
    March 10, 2006By:
    
    /s/ David M. Gilchrist, Jr.

David M. Gilchrist, Jr.
    
    
    
    Director
    
    March 10, 2006By:
    
    /s/ William C. Griffiths

William C. Griffiths
    
    
    
    Director
    
    March 10, 2006By:
    
    /s/ Jan K. Ver Hagen

Jan K. Ver Hagen
    
    
    
    Director
    
    March 10, 2006By:
    
    /s/ Stephen E. Hare

Stephen E. Hare
    
    
    
    Director
    
    March 10, 2006By:
    
    /s/ Gail O. Neuman

Gail O. Neuman
    
    
    
    Director
    
    March 10, 2006
 73




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##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
 
 Consolidated Statements of Operations
 Year ended December 31,2005
    
    
    2004
    
    
    2003(In thousands except per share amounts)Net sales
    
    $
    873,505
    
    
    $
    797,875
    
    
    $
    596,324Cost of goods sold
    
    
    851,862
    
    
    
    734,194
    
    
    
    555,498Gross profit
    
    
    21,643
    
    
    
    63,681
    
    
    
    40,826Selling, general and administrative expenses
    
    
    37,074
    
    
    
    37,259
    
    
    
    32,103Restructuring and other charges
    
    
    1,416
    
    
    
    2,536
    
    
    
    15,057Operating income/(loss) from continuing operations
    
    
    (16,847
    )
    
    
    23,886
    
    
    
    (6,334
    )Other expense:Interest expense, net
    
    
    20,727
    
    
    
    20,860
    
    
    
    21,218Loss on extinguishment of debt
    
    
    
    
    
    
    3,009
    
    
    
    Amortization and other, net
    
    
    2,802
    
    
    
    1,261
    
    
    
    1,856Goodwill impairment
    
    
    
    
    
    
    
    
    
    
    23,153(Loss) from continuing operations before income taxes
    
    
    (40,376
    )
    
    
    (1,244
    )
    
    
    (52,561
    )Income tax (benefit)
    
    
    (1,760
    )
    
    
    (1,888
    )
    
    
    (13,577
    )Income/(loss) from continuing operations
    
    
    (38,616
    )
    
    
    644
    
    
    
    (38,984
    )Loss from discontinued operations, net of income tax
benefit of ($0.1) million and ($0.8) million for
2004 and 2003, respectively
    
    
    
    
    
    
    (262
    )
    
    
    (1,637
    )Net income/(loss)
    
    $
    (38,616
    )
    
    $
    382
    
    
    $
    (40,621
    )Income/(loss) per sharebasic:Continuing operations
    
    $
    (2.57
    )
    
    $
    0.05
    
    
    $
    (3.18
    )Discontinued operations
    
    
    
    
    
    
    (0.02
    )
    
    
    (0.13
    )Net income/(loss) per sharebasic
    
    $
    (2.57
    )
    
    $
    0.03
    
    
    $
    (3.31
    )Basic weighted average number of shares
    
    
    15,022
    
    
    
    13,650
    
    
    
    12,275Income/(loss) per sharediluted:Continuing operations
    
    $
    (2.57
    )
    
    $
    0.05
    
    
    $
    (3.18
    )Discontinued operations
    
    
    
    
    
    
    (0.02
    )
    
    
    (0.13
    )Net income/(loss) per sharediluted
    
    $
    (2.57
    )
    
    $
    0.03
    
    
    $
    (3.31
    )Diluted weighted average number of common and common
equivalent shares
    
    
    15,022
    
    
    
    13,992
    
    
    
    12,275
 The accompanying notes are an integral part of the consolidated financial statements.
 F-1




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##### Table of Contents

\

Wolverine Tube, Inc. and Subsidiaries
 
 Consolidated Balance Sheets
 December 31,(In thousands except share and per share amounts)
    
    2005
    
    
    2004AssetsCurrent assetsCash and equivalents
    
    $
    27,329
    
    
    $
    35,017Accounts
receivable, net of allowance for doubtful accounts of $0.4 million in both 2005 and 2004
    
    
    104,186
    
    
    
    93,964Inventories
    
    
    146,705
    
    
    
    151,979Prepaid expenses and other
    
    
    10,209
    
    
    
    6,905Deferred taxes, current
    
    
    
    
    
    
    7,707Total current assets
    
    
    288,429
    
    
    
    295,572Property, plant and equipment, net
    
    
    181,238
    
    
    
    194,966Goodwill, net
    
    
    77,064
    
    
    
    77,312Deferred charges, net
    
    
    7,726
    
    
    
    11,892Deferred income taxes, non-current
    
    
    13,469
    
    
    
    1,008Investments
    
    
    8
    
    
    
    5,561Assets held for sale
    
    
    
    
    
    
    1,147Notes receivable
    
    
    831
    
    
    
    Total assets
    
    $
    568,765
    
    
    $
    587,458Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable
    
    $
    71,802
    
    
    $
    59,912Accrued liabilities
    
    
    34,952
    
    
    
    32,476Short-term borrowings
    
    
    248
    
    
    
    1,219Total current liabilities
    
    
    107,002
    
    
    
    93,607Long-term debt
    
    
    234,920
    
    
    
    237,022Pension liabilities
    
    
    42,889
    
    
    
    27,915Postretirement benefit obligation
    
    
    19,722
    
    
    
    18,422Accrued environmental remediation
    
    
    930
    
    
    
    990Total liabilities
    
    
    405,463
    
    
    
    377,956Stockholders equityCommon Stock, par value $0.01 per share; 40,000,000 shares
authorized, 15,058,803 and 14,927,577 shares issued as of
December 31, 2005 and 2004, respectively
    
    
    151
    
    
    
    149Additional paid-in capital
    
    
    91,711
    
    
    
    90,571Retained earnings
    
    
    85,734
    
    
    
    124,350Unearned compensation
    
    
    (324
    )
    
    
    (309
    )Accumulated other comprehensive loss, net
    
    
    (13,970
    )
    
    
    (5,259
    )Total stockholders equity
    
    
    163,302
    
    
    
    209,502Total liabilities and stockholders equity
    
    $
    568,765
    
    
    $
    587,458
 The accompanying notes are an integral part of the consolidated financial statements.
 F-2




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##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
 
 Consolidated Statements of Stockholders Equity
 AccumulatedOther
    
    
    
    
    
    
    TotalAdditional
    
    
    
    
    
    
    Unearned
    
    
    Compre-
    
    
    
    
    
    
    Stock-Common Stock
    
    
    Paid-In
    
    
    Retained
    
    
    Compen-
    
    
    hensive
    
    
    Treasury
    
    
    holders(In thousands except number of shares)
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    sation
    
    
    Income (Loss)
    
    
    Stock
    
    
    EquityBalance at December 31, 2002
    
    
    14,326,239
    
    
    $
    143
    
    
    $
    103,213
    
    
    $
    164,547
    
    
    $
    (302
    )
    
    $
    (29,591
    )
    
    $
    (37,375
    )
    
    $
    200,635Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (40,621
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (40,621
    )Translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,383
    
    
    
    
    
    
    
    17,383Change in fair value of derivatives
and reclassification adjustments, net
of tax of $1,032
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,918
    
    
    
    
    
    
    
    1,918Minimum pension liability, net of tax
benefit of $132
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (220
    )
    
    
    
    
    
    
    (220
    )Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21,540
    )Issuance of restricted stock award and
amortization of unearned compensation
    
    
    18,567
    
    
    
    
    
    
    
    126
    
    
    
    
    
    
    
    130
    
    
    
    
    
    
    
    
    
    
    
    256Balance at December 31, 2003
    
    
    14,344,806
    
    
    
    143
    
    
    
    103,339
    
    
    
    123,926
    
    
    
    (172
    )
    
    
    (10,510
    )
    
    
    (37,375
    )
    
    
    179,351Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    382
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    382Translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    7,565
    
    
    
    
    
    
    
    7,566Change in fair value of derivatives
and reclassification adjustments, net
of tax of $118
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,433
    )
    
    
    
    
    
    
    (1,433
    )Minimum pension liability, net of tax
expense of $454
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (881
    )
    
    
    
    
    
    
    (881
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,634Common stock issued
    
    
    2,450,000
    
    
    
    25
    
    
    
    22,808
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,833Retirement of treasury stock
    
    
    (2,063,800
    )
    
    
    (21
    )
    
    
    (37,354
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37,375
    
    
    
    Exercise of non-qualified stock
options, including income tax benefits
    
    
    155,482
    
    
    
    2
    
    
    
    1,314
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,316Issuance of restricted stock award and
amortization of unearned compensation
    
    
    41,089
    
    
    
    
    
    
    
    464
    
    
    
    
    
    
    
    (137
    )
    
    
    
    
    
    
    
    
    
    
    327Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41Balance at December 31, 2004
    
    
    14,927,577
    
    
    
    149
    
    
    
    90,571
    
    
    
    124,350
    
    
    
    (309
    )
    
    
    (5,259
    )
    
    
    
    
    
    
    209,502Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (38,616
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (38,616
    )Translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    165
    
    
    
    
    
    
    
    165Change in fair value of derivatives
and reclassification adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,024
    
    
    
    
    
    
    
    2,024Minimum pension liability
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,900
    )
    
    
    
    
    
    
    (10,900
    )Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (47,327
    )Exercise of non-qualified stock
options, including income tax benefits
    
    
    88,125
    
    
    
    1
    
    
    
    501
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    503Issuance of restricted stock award and
amortization of unearned compensation
    
    
    43,101
    
    
    
    1
    
    
    
    639
    
    
    
    
    
    
    
    (15
    )
    
    
    
    
    
    
    
    
    
    
    624Balance at December 31, 2005
    
    
    15,058,803
    
    
    $
    151
    
    
    $
    91,711
    
    
    $
    85,734
    
    
    $
    (324
    )
    
    $
    (13,970
    )
    
    $
    
    
    
    $
    163,302
 The accompanying notes are an integral part of these consolidated financial statements.
 F-3




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##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
 
 Consolidated Statements of Cash Flows
 Year ended December 31,(In thousands)
    
    2005
    
    
    2004
    
    
    2003Operating ActivitiesIncome/(loss) from continuing operations
    
    $
    (38,616
    )
    
    $
    644
    
    
    $
    (38,984
    )Adjustments to reconcile income/(loss) from continuing
operations to net cash provided by operating activities:Depreciation
    
    
    15,412
    
    
    
    15,862
    
    
    
    17,443Amortization
    
    
    1,636
    
    
    
    1,545
    
    
    
    1,566Deferred income taxes
    
    
    (4,574
    )
    
    
    (4,954
    )
    
    
    (12,541
    )Loss on disposal of fixed assets
    
    
    2,027
    
    
    
    
    
    
    
    Goodwill impairment
    
    
    
    
    
    
    
    
    
    
    23,153Loss/(gain) on retirement of Senior Notes
    
    
    
    
    
    
    3,009
    
    
    
    Non-cash portion of restructuring and other
    
    
    661
    
    
    
    1,821
    
    
    
    12,382Changes in operating assets and liabilities:Accounts receivable, net
    
    
    (29,617
    )
    
    
    (5,499
    )
    
    
    (17,202
    )Sale of accounts receivable
    
    
    19,000
    
    
    
    
    
    
    
    Inventories
    
    
    5,368
    
    
    
    (41,668
    )
    
    
    (8,751
    )Refundable income taxes
    
    
    1,307
    
    
    
    838
    
    
    
    9,077Prepaid expenses and other
    
    
    (4,499
    )
    
    
    1,713
    
    
    
    (1,200
    )Accounts payable
    
    
    12,381
    
    
    
    11,714
    
    
    
    4,334Accrued liabilities, including pension, postretirement
benefit and environmental
    
    
    14,632
    
    
    
    6,333
    
    
    
    10,972Net cash provided by/(used for) operating activities
    
    
    (4,882
    )
    
    
    (8,642
    )
    
    
    249Investing ActivitiesAdditions to property, plant and equipment
    
    
    (10,009
    )
    
    
    (11,728
    )
    
    
    (5,969
    )Disposal of assets
    
    
    5,412
    
    
    
    2,926
    
    
    
    12Funds received from/(investment in) rabbi trust
    
    
    4,413
    
    
    
    
    
    
    
    (4,289
    )Other
    
    
    
    
    
    
    82
    
    
    
    Net cash used for investing activities
    
    
    (184
    )
    
    
    (8,720
    )
    
    
    (10,246
    )Financing ActivitiesFinancing fees and expenses paid
    
    
    (1,101
    )
    
    
    (151
    )
    
    
    (52
    )Net borrowings from /(repayments of) revolving credit facilities
    
    
    (2,222
    )
    
    
    1,009
    
    
    
    (1,122
    )Retirement of Senior Notes
    
    
    
    
    
    
    (20,510
    )
    
    
    Issuance of common stock
    
    
    503
    
    
    
    24,164
    
    
    
    Other financing activities
    
    
    33
    
    
    
    (346
    )
    
    
    (6
    )Net cash provided by/(used for) financing activities
    
    
    (2,787
    )
    
    
    4,166
    
    
    
    (1,180
    )Effect of exchange rate on cash and equivalents
    
    
    165
    
    
    
    2,386
    
    
    
    2,645Net cash used for continuing operations
    
    
    (7,688
    )
    
    
    (10,810
    )
    
    
    (8,532
    )Cash flows of discontinued operations (Revised  See Note 2)Operating cash flows
    
    
    
    
    
    
    (262
    )
    
    
    697Investing cash flows
    
    
    
    
    
    
    
    
    
    
    Financing cash flows
    
    
    
    
    
    
    
    
    
    
    Effect of exchange rate on cash and equivalents
    
    
    
    
    
    
    
    
    
    
    4Net cash provided by/(used for) discontinued operations
    
    
    
    
    
    
    (262
    )
    
    
    701Net decrease in cash and equivalents
    
    
    (7,688
    )
    
    
    (11,072
    )
    
    
    (7,831
    )Cash and equivalents at beginning of year
    
    
    35,017
    
    
    
    46,089
    
    
    
    53,920Cash and equivalents at end of year
    
    $
    27,329
    
    
    $
    35,017
    
    
    $
    46,089Supplemental disclosure of cash flow:Interest paid
    
    $
    21,100
    
    
    $
    21,549
    
    
    $
    22,510Income taxes paid/(refunded), net
    
    $
    466
    
    
    $
    (173
    )
    
    $
    (9,012
    )
 The accompanying notes are an integral part of the consolidated financial statements.
 F-4




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##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
 
 Notes to Consolidated Financial Statements
 1. Nature of Operations
   2. Summary of Significant Accounting Policies
  Principles of Consolidation
  Uses of Estimates
  F-5




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##### Table of Contents



Revenue Recognition Policy
  Cash Equivalents
  Allowance for Doubtful Accounts
  Sales of Accounts Receivable
 Accounting for Transfers
and Servicing of Financial Assets and Extinguishment of Liabilities
 Inventories
   F-6




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##### Table of Contents



2005
    
    
    2004(In thousands)Finished products
    
    $
    58,000
    
    
    $
    61,376Work-in-process
    
    
    38,983
    
    
    
    35,920Raw materials
    
    
    23,545
    
    
    
    27,653Supplies
    
    
    26,177
    
    
    
    27,030Totals
    
    $
    146,705
    
    
    $
    151,979
 Property, Plant and Equipment
  Impairment of Long-Lived Assets
 Accounting
for the Impairment or Disposal of Long-Lived Assets
 Employment-Related Benefits
   F-7




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##### Table of Contents



Income Taxes
 Accounting for Income
Taxes
 Goodwill
 Goodwill and Other Intangible Assets
   Investments
  F-8




---



##### Table of Contents



Earnings/(Loss) Per Common Share
  Derivatives and Hedging Activities
  Accounting for
Derivative Instruments and Hedging Activities Accounting for Certain Derivative Instruments and Certain Hedging Activities Amendment of Statement 133 on
Derivative Instruments and Hedging Activities Foreign Currency Translation.
 Fair Values of Financial Instruments
  Cash and equivalents, accounts receivable and accounts payable
 F-9




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##### Table of Contents



Revolving credit facility and long-term debt:
 Derivatives:
  2005
    
    
    2005
    
    
    2004
    
    
    2004Assets/(liabilities)

    Carrying value
    Fair value
    Carrying value
    Fair value(In thousands)Investments in Rabbi Trust
(trading portfolio)
    
    $
    14
    
    
    $
    14
    
    
    $
    4,316
    
    
    $
    4,316Senior Notes
    
    
    (235,518
    )
    
    
    (177,523
    )
    
    
    (235,318
    )
    
    
    (243,729
    )Other debt
    
    
    (1,220
    )
    
    
    (1,220
    )
    
    
    (3,576
    )
    
    
    (3,576
    )Interest rate swap
    
    
    (1,570
    )
    
    
    (1,570
    )
    
    
    (653
    )
    
    
    (653
    )Foreign currency exchange contracts
    
    
    19
    
    
    
    19
    
    
    
    225
    
    
    
    225Commodity forward contracts
    
    
    2,268
    
    
    
    2,268
    
    
    
    (1,518
    )
    
    
    (1,518
    )
 Environmental Expenditures
  Stock Options
 Accounting for Stock
Issued to Employees
 Accounting for Stock-Based Compensation
 F-10




---



##### Table of Contents



(In thousands, except per share amounts)
    
    2005
    
    
    2004
    
    
    2003Net income/(loss), as reported
    
    $
    (38,616
    )
    
    $
    382
    
    
    $
    (40,621
    )Deduct: Total stock-based
employee compensation expense
determined under fair value based
method for all awards, net of
related tax effects
    
    
    (1,508
    )
    
    
    (494
    )
    
    
    (825
    )Pro forma net (loss)
    
    $
    (40,124
    )
    
    $
    (112
    )
    
    $
    (41,446
    )(Loss) earnings per share:Basic  as reported
    
    $
    (2.57
    )
    
    $
    0.03
    
    
    $
    (3.31
    )Basic  pro forma
    
    $
    (2.67
    )
    
    $
    (0.01
    )
    
    $
    (3.38
    )Diluted  as reported
    
    $
    (2.57
    )
    
    $
    0.03
    
    
    $
    (3.31
    )Diluted  pro forma
    
    $
    (2.67
    )
    
    $
    (0.01
    )
    
    $
    (3.38
    )
  Translation to U.S. Dollars
  Research and Development Costs
  F-11




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##### Table of Contents



Reclassifications
  Recent Accounting Pronouncements
 Accounting Changes and Error Correctionsa replacement of APB Opinion No. 20 and FASB Statement No.
3 Accounting Changes Reporting Accounting Changes
in Interim Financial Statements.
 Share-Based Payment
 Inventory Costs, an amendment of ARB No. 43, Chapter 4
 F-12




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##### Table of Contents



Accounting for Conditional
Asset Retirement Obligations
 Accounting
for Uncertain Tax Positions  an interpretation of FASB Statement No. 109
  3. Discontinued Operations
  (In thousands)
    
    2005
    
    
    2004
    
    
    2003Loss before income tax benefit
    
    $
    
    
    
    $
    (389
    )
    
    $
    (2,406
    )Income tax benefit
    
    
    
    
    
    
    (127
    )
    
    
    (769
    )Net loss
    
    $
    
    
    
    $
    (262
    )
    
    $
    (1,637
    )
 F-13




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##### Table of Contents



4. Prepaid Expenses and Other
  (In thousands)
    
    2005
    
    
    2004Prepaid expenses
    
    $
    4,713
    
    
    $
    5,684Other assets recording the fair value of hedging
instruments (Note 5)
    
    
    5,496
    
    
    
    1,221Totals
    
    $
    10,209
    
    
    $
    6,905
 5. Derivatives
 Accounting for Derivative Instruments and Hedging Activities Accounting for Certain Derivative
Instruments and Certain Hedging Activities Amendment of Statement 133 on Derivative Instruments and Hedging Activities
 For the Year Ended December 31,(In millions)
    
    2005
    
    
    2004Gain arising from ineffectiveness included in operations
    
    $
    1.4
    
    
    $
    Gains reclassed from other comprehensive income/(loss)
(OCI) to operations
    
    $
    3.4
    
    
    $
    0.7
 F-14




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##### Table of Contents



December 31,(In millions)
    
    2005
    
    
    2004Aggregate notional value of derivatives outstanding
    
    $
    8.8
    
    
    $
    10.5Period through which derivative positions currently exist
    
    December 2006
    
    
    September 2006Gain in fair value of derivatives
    
    $
    2.8
    
    
    $
    1.1The change in fair value due to the effect of a 10%
adverse change in commodity
prices to current fair value
    
    $
    (1.2
    )
    
    $
    (1.3
    )Deferred gains included in OCI
    
    $
    2.3
    
    
    $
    1.1Gains included in OCI to be recognized in the next 12 months
    
    $
    2.3
    
    
    $
    1.1Number of months over which gain in OCI is to be recognized
    
    
    12
    
    
    
    21
  For the Year Ended December 31,(In millions)
    
    2005
    
    
    2004(Loss) arising from ineffectiveness included in operations
    
    $
    (1.3
    )
    
    $
    (Losses) reclassed from OCI to operations
    
    $
    (4.2
    )
    
    $
    (1.7
    )
 December 31,(In millions)
    
    2005
    
    
    2004Aggregate notional value of derivatives outstanding
    
    $
    5.6
    
    
    $
    26.1Period through which derivative positions currently exist
    
    January 2006
    
    
    March 2005(Loss) in fair value of derivatives
    
    $
    
    
    
    $
    (0.9
    )The change in fair value due to the effect of a 10%
adverse change in commodity prices to current fair value
    
    $
    (0.6
    )
    
    $
    (2.7
    )Deferred gains/(losses) included in OCI
    
    $
    0.2
    
    
    $
    (0.8
    )Gains/(losses) included in OCI to be recognized in the
next 12 months
    
    $
    0.2
    
    
    $
    (0.8
    )Number of months over which gain/(loss) in OCI is to be
recognized
    
    
    1
    
    
    
    3
  F-15




---



##### Table of Contents



For the Year Ended December 31,(In millions)
    
    2005
    
    
    2004(Loss) arising from ineffectiveness included in operations
    
    $
    (2.7
    )
    
    $
    (0.5
    )
 December 31,(In millions)
    
    2005
    
    
    2004Aggregate notional value of derivatives outstanding
    
    $
    29.6
    
    
    $
    64.1Period through which derivative positions currently exist
    
    March 2006
    
    
    March 2005(Loss) in fair value of derivatives
    
    $
    (2.4
    )
    
    $
    (1.8
    )The change in fair value due to the effect of a 10%
adverse change in commodity prices to current fair value
    
    $
    (3.2
    )
    
    $
    (6.6
    )
  For the Year Ended December 31,(In millions)
    
    2005
    
    
    2004Gain arising from ineffectiveness included in operations
    
    $
    2.3
    
    
    $
    Gains reclassed from OCI to operations
    
    
    3.1
    
    
    
    1.0
 December 31,(In millions)
    
    2005
    
    
    2004Aggregate notional value of derivatives outstanding
    
    $
    12.2
    
    
    $
    11.9Period through which derivative positions currently exist
    
    December 2008
    
    
    December 2006Gain in fair value of derivatives
    
    $
    1.9
    
    
    $
    0.1The change in fair value due to the effect of a 10% adverse
change in commodity prices to current fair value
    
    $
    (1.4
    )
    
    $
    (1.2
    )Deferred gains/(losses) included in OCI
    
    $
    (0.3
    )
    
    $
    0.1Gains included in OCI to be recognized in the next 12 months
    
    $
    0.5
    
    
    $
    0.1Number of months over which gain in OCI is to be recognized
    
    
    36
    
    
    
    24
 Foreign Currency Exchange Risk
  F-16




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##### Table of Contents



Interest Rate Risk
     6. Assets Held for Sale
  F-17




---



##### Table of Contents



7. Property, Plant and Equipment
  (In thousands)
    
    2005
    
    
    2004Land and improvements
    
    $
    13,995
    
    
    $
    14,353Building and improvements
    
    
    51,065
    
    
    
    54,758Machinery and equipment
    
    
    294,077
    
    
    
    290,668Construction-in-progress
    
    
    2,914
    
    
    
    4,772362,051
    
    
    
    364,551Less accumulated depreciation
    
    
    (180,813
    )
    
    
    (169,585
    )Totals
    
    $
    181,238
    
    
    $
    194,966
 8. Deferred Charges
   (In thousands)
    
    2005
    
    
    2004Deferred debt issuance cost
    
    $
    10,975
    
    
    $
    9,873Patents and other
    
    
    1,889
    
    
    
    2,342Unrecognized prior service cost for pensions
    
    
    1,507
    
    
    
    4,73914,371
    
    
    
    16,954Less accumulated amortization
    
    
    (6,645
    )
    
    
    (5,062
    )Totals
    
    $
    7,726
    
    
    $
    11,892
  9. Accrued Liabilities
  F-18




---



##### Table of Contents



(In thousands)
    
    2005
    
    
    2004Interest
    
    $
    7,304
    
    
    $
    6,764Income taxes
    
    
    3,388
    
    
    
    2,254Reserve for restructuring
    
    
    785
    
    
    
    524Fair value of derivatives and unsettled
derivative liabilities (Note 5)
    
    
    10,962
    
    
    
    10,873Other accrued operating expenses
    
    
    12,513
    
    
    
    12,061Totals
    
    $
    34,952
    
    
    $
    32,476
 10. Financing Arrangements and Debt
  (In thousands)
    
    2005
    
    
    2004Secured revolving credit facility, due March 2007
    
    $
    
    
    
    $
    1,000Senior Notes, 7.375%, due August 2008
    
    
    135,180
    
    
    
    136,097Discount on 7.375% Senior Notes, original issue
discount amortized over 10 years
    
    
    (75
    )
    
    
    (103
    )Senior Notes, 10.5%, due April 2009
    
    
    99,400
    
    
    
    99,400Discount on 10.5% Senior Notes, original issue
discount amortized over 7 years
    
    
    (557
    )
    
    
    (729
    )Netherlands facility, 5.13%, due on demand
    
    
    4
    
    
    
    976Other foreign facilities
    
    
    1,104
    
    
    
    1,494Capitalized leases
    
    
    112
    
    
    
    106235,168
    
    
    
    238,241Less short-term borrowings
    
    
    (248
    )
    
    
    (1,219
    )Totals
    
    $
    234,920
    
    
    $
    237,022
  (In thousands)2006
    
    $
    2482007
    
    
    3922008
    
    
    137,2462009
    
    
    97,282Totals
    
    $
    235,168
 Liquidity Facilities
  F-19




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##### Table of Contents



10.5% Senior Notes due 2009
  F-20




---



##### Table of Contents



Year
    
    PercentageApril 1, 2006
    
    
    105.250
    %April 1, 2007
    
    
    102.625
    %April 1, 2008 and thereafter
    
    
    100.000
    %
  7.375% Senior Notes due 2008
 pari
passu
  Other Credit Facilities
   F-21




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##### Table of Contents



11. Receivables Sale Facility
  Structure
  Available Amounts
  F-22




---



##### Table of Contents



Costs
 Representations, Warranties, Covenants and Indemnities
 Termination.
  F-23




---



##### Table of Contents



,
  
    
    an amendment to the consolidated EBITDA requirement for the second fiscal quarter of
2005 in order to bring the Company into compliance with this requirement for that
period, as well as a prospective adjustment to the consolidated EBITDA test, both
consistent with the revised consolidated EBITDA covenant contained in the August
amendment to the Amended and Restated Credit Agreement;
    
    the addition or enhancement of certain financial and operational reporting
obligations, including those obligations required under the August amendment to the
Amended and Restated Credit Agreement;
    
    an adjustment to the loss reserve and dilution reserve formulas that are used in the
availability calculation; and
    
    the elimination of the obligation to comply with the $5 million excess availability
requirement under the Amended and Restated Credit Agreement.
  12. Interest Expense
  Year Ended December 31,(in thousands)
    
    2005
    
    
    2004
    
    
    2003Interest expense  bonds and other
    
    $
    20,862
    
    
    $
    22,002
    
    
    $
    22,934Interest expense  asset securitization
    
    
    640
    
    
    
    
    
    
    
    Interest expense  revolver
    
    
    165
    
    
    
    344
    
    
    
    40Effect of interest rate swap
    
    
    388
    
    
    
    (655
    )
    
    
    (1,123
    )Interest income
    
    
    (1,064
    )
    
    
    (637
    )
    
    
    (556
    )Capitalized interest
    
    
    (264
    )
    
    
    (194
    )
    
    
    (77
    )Interest expense, net
    
    $
    20,727
    
    
    $
    20,860
    
    
    $
    21,218
 F-24




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##### Table of Contents



13. Retirement and Pension Plans
  U.S. Qualified Retirement Plan
   2005
    
    
    2004Equity securities
    
    
    59
    %
    
    
    59
    %Debt securities
    
    
    40
    
    
    
    38Cash and equivalents
    
    
    1
    
    
    
    3Total
    
    
    100
    %
    
    
    100
    %
    F-25




---



##### Table of Contents



(In thousands)
    
    2005
    
    2004Accrued benefit liability
    
    $
    (33,372
    )
    
    $
    (18,587
    )Intangible asset
    
    
    
    
    
    
    765Accumulated other comprehensive loss
    
    
    29,071
    
    
    
    19,396Net amount recognized
    
    $
    (4,301
    )
    
    $
    1,574
  2005
    
    2004Discount rate
    
    
    5.75
    %
    
    
    6.00
    %Rate of increase in compensation
    
    
    3.00
    %
    
    
    3.50
    %
  (In thousands)
    
    2005
    
    2004
    
    2003Service cost
    
    $
    4,960
    
    
    $
    4,358
    
    
    $
    3,963Interest cost
    
    
    9,928
    
    
    
    9,371
    
    
    
    9,145Expected return on plan assets
    
    
    (11,541
    )
    
    
    (11,194
    )
    
    
    (10,052
    )Amortization of prior service cost
    
    
    120
    
    
    
    120
    
    
    
    137Amortization of net actuarial loss
    
    
    1,763
    
    
    
    1,236
    
    
    
    1,102Effect of curtailment
    
    
    645
    
    
    
    
    
    
    
    102Net periodic pension cost
    
    $
    5,875
    
    
    $
    3,891
    
    
    $
    4,397
   2005
    
    2004
    
    2003Discount rate
    
    
    6.00
    %
    
    
    6.25
    %
    
    
    7.00
    %Rate of increase in compensation
    
    
    3.5
    %
    
    
    3.50
    %
    
    
    3.50
    %Expected long-term rate of return on plan
assets
    
    
    9.00
    %
    
    
    9.00
    %
    
    
    9.00
    %
  F-26




---



##### Table of Contents



(In thousands)
    
    2005
    
    2004Benefit obligation at the beginning of the year
    
    $
    165,004
    
    
    $
    153,488Service costs
    
    
    4,960
    
    
    
    4,358Interest costs
    
    
    9,928
    
    
    
    9,371Actuarial loss
    
    
    10,858
    
    
    
    5,272Benefits paid
    
    
    (7,361
    )
    
    
    (7,485
    )Curtailment
    
    
    (18,727
    )
    
    
    Benefit obligation at the end of the year
    
    $
    164,662
    
    
    $
    165,004
   (In thousands)
    
    2005
    
    2004Fair value of plan assets at the beginning of the year
    
    $
    131,149
    
    
    $
    127,768Accrued expenses
    
    
    (18
    )
    
    
    Accrued interest
    
    
    738
    
    
    
    Actual return on plan assets
    
    
    6,749
    
    
    
    10,866Benefits paid
    
    
    (7,361
    )
    
    
    (7,485
    )Fair value of plan assets at the end of the year
    
    $
    131,257
    
    
    $
    131,149
   (In thousands)
    
    2005
    
    2004Unfunded status
    
    $
    (33,405
    )
    
    $
    (33,855
    )Unrecognized net actuarial loss
    
    
    29,104
    
    
    
    34,664Unrecognized prior service costs
    
    
    
    
    
    
    765Prepaid pension asset/(liability)
    
    $
    (4,301
    )
    
    $
    1,574
 F-27




---



##### Table of Contents



(in thousands)2006
    
    $
    7,8012007
    
    
    8,1892008
    
    
    8,5642009
    
    
    8,9472010
    
    
    9,3092011 - 2015
    
    
    51,947
 Employers Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and
for Termination Plans.
 U.S. Nonqualified Pension Plans
   F-28




---



##### Table of Contents



(In thousands)
    
    2005
    
    2004Accrued benefit liability
    
    $
    (6,913
    )
    
    $
    (7,118
    )Intangible asset
    
    
    
    
    
    
    2,935Accumulated other comprehensive loss
    
    
    234
    
    
    
    Net amount recognized
    
    $
    (6,679
    )
    
    $
    (4,183
    )
  2005
    
    2004Discount rate
    
    
    5.75
    %
    
    
    6.00
    %Rate of increase in compensation
    
    
    3.00
    %
    
    
    3.50
    %
  (In thousands)
    
    2005
    
    2004
    
    2003Service cost
    
    $
    216
    
    
    $
    202
    
    
    $
    152Interest cost
    
    
    472
    
    
    
    494
    
    
    
    430Amortization of prior service cost
    
    
    368
    
    
    
    367
    
    
    
    368Amortization of net actuarial loss
    
    
    49
    
    
    
    43
    
    
    
    Curtailment
    
    
    2,784
    
    
    
    
    
    
    
    Settlement
    
    
    261
    
    
    
    
    
    
    
    Net periodic pension cost
    
    $
    4,150
    
    
    $
    1,106
    
    
    $
    950
  (In thousands)
    
    2005
    
    2004Benefit obligation at the beginning of the year
    
    $
    8,485
    
    
    $
    7,406Service costs
    
    
    216
    
    
    
    202Interest costs
    
    
    472
    
    
    
    494Actuarial loss
    
    
    210
    
    
    
    463Curtailment
    
    
    (806
    )
    
    
    Benefits paid
    
    
    (1,654
    )
    
    
    (80
    )Benefit obligation at the end of the year
    
    $
    6,923
    
    
    $
    8,485
 F-29




---



##### Table of Contents



(In thousands)
    
    2005
    
    2004Fair value of plan assets at the beginning of the year
    
    $
    
    
    
    $
    Company contributions
    
    
    1,654
    
    
    
    80Benefits paid
    
    
    (1,654
    )
    
    
    (80
    )Fair value of plan assets at the end of the year
    
    $
    
    
    
    $
    
   (In thousands)
    
    2005
    
    2004Unfunded status
    
    
    (6,923
    )
    
    $
    (8,485
    )Unrecognized net actuarial loss
    
    
    244
    
    
    
    1,151Unrecognized prior service costs
    
    
    
    
    
    
    3,151Accrued benefit cost
    
    
    (6,679
    )
    
    $
    (4,183
    )
  (in thousands)2006
    
    $
    5,8152007
    
    
    802008
    
    
    802009
    
    
    802010
    
    
    802011 - 2015
    
    
    490
 Canadian Plans
   F-30




---



##### Table of Contents



Minimum
    
    MaximumCanadian equity securities
    
    
    15
    %
    
    
    35
    %Foreign equity securities
    
    
    20
    
    
    
    30Debt securities
    
    
    33
    
    
    
    53Cash and equivalents
    
    
    0
    
    
    
    15
   Salaried Plan
  2005
    
    2004Canadian equity securities
    
    
    31
    %
    
    
    32
    %Foreign equity securities
    
    
    29
    
    
    
    27Debt securities
    
    
    39
    
    
    
    40Cash and equivalents
    
    
    1
    
    
    
    1Total
    
    
    100
    %
    
    
    100
    %
 F-31




---



##### Table of Contents



(In thousands)
    
    2005
    
    2004Prepaid benefit cost
    
    $
    
    
    
    $
    1,222Accrued benefit liability
    
    
    (281
    )
    
    
    Accumulated other comprehensive loss
    
    
    1,802
    
    
    
    Net amount recognized
    
    $
    1,521
    
    
    $
    1,222
  (In thousands)
    
    2005
    
    2004
    
    2003Service cost
    
    $
    233
    
    
    $
    200
    
    
    $
    207Interest cost
    
    
    553
    
    
    
    486
    
    
    
    444Expected return on plan assets
    
    
    (588
    )
    
    
    (501
    )
    
    
    (396
    )Amortization of net actuarial loss
    
    
    85
    
    
    
    100
    
    
    
    107Net periodic pension cost
    
    $
    283
    
    
    $
    285
    
    
    $
    362
  2005
    
    2004
    
    2003Discount rate
    
    
    6.00
    %
    
    
    6.25
    %
    
    
    6.75
    %Expected long-term rate of return on plan assets
    
    
    7.00
    %
    
    
    7.50
    %
    
    
    7.50
    %
  F-32




---



##### Table of Contents



(In thousands)
    
    2005
    
    2004Benefit obligation at the beginning of the year
    
    $
    9,461
    
    
    $
    7,886Service costs
    
    
    233
    
    
    
    200Interest costs
    
    
    553
    
    
    
    486Actuarial loss
    
    
    1,062
    
    
    
    780Benefits paid
    
    
    (845
    )
    
    
    (545
    )Foreign currency exchange rate changes
    
    
    345
    
    
    
    654Benefit obligation at the end of the year
    
    $
    10,809
    
    
    $
    9,461
  (In thousands)
    
    2005
    
    2004Fair value of plan assets at the beginning of the year
    
    $
    8,618
    
    
    $
    6,768Actual return on plan assets
    
    
    963
    
    
    
    1,353Company contribution
    
    
    532
    
    
    
    445Benefits paid
    
    
    (845
    )
    
    
    (545
    )Foreign currency exchange rate changes
    
    
    305
    
    
    
    597Fair value of plan assets at the end of the year
    
    $
    9,573
    
    
    $
    8,618
   (In thousands)
    
    2005
    
    2004Funded status
    
    $
    (1,236
    )
    
    $
    (842
    )Unrecognized net actuarial loss
    
    
    2,757
    
    
    
    2,064Prepaid benefit cost
    
    $
    1,521
    
    
    $
    1,222
  (in thousands)2006
    
    $
    6202007
    
    
    6082008
    
    
    6172009
    
    
    6092010
    
    
    5912011 - 2015
    
    
    3,434
 Operational Plan
  F-33




---



##### Table of Contents



2005
    
    2004Canadian equity securities
    
    
    31
    %
    
    
    33
    %Foreign equity securities
    
    
    29
    
    
    
    30Debt securities
    
    
    40
    
    
    
    36Cash and equivalents
    
    
    
    
    
    
    1Total
    
    
    100
    %
    
    
    100
    %
   (In thousands)
    
    2005
    
    2004Accrued benefit liability
    
    $
    (2,323
    )
    
    $
    (2,211
    )Intangible asset
    
    
    1,507
    
    
    
    1,039Accumulated other comprehensive loss
    
    
    696
    
    
    
    1,009Net amount recognized
    
    $
    (120
    )
    
    $
    (163
    )
  (In thousands)
    
    2005
    
    2004
    
    2003Service cost
    
    $
    415
    
    
    $
    355
    
    
    $
    327Interest cost
    
    
    987
    
    
    
    908
    
    
    
    837Expected return on plan assets
    
    
    (974
    )
    
    
    (897
    )
    
    
    (768
    )Amortization of prior service cost
    
    
    115
    
    
    
    94
    
    
    
    87Net periodic pension cost
    
    $
    543
    
    
    $
    460
    
    
    $
    483
  2005
    
    2004
    
    2003Discount rate
    
    
    6.00
    %
    
    
    6.25
    %
    
    
    6.75
    %Expected long-term rate of return on plan
assets
    
    
    7.00
    %
    
    
    7.50
    %
    
    
    7.50
    %
 F-34




---



##### Table of Contents



(In thousands)
    
    2005
    
    2004Benefit obligation at the beginning of the year
    
    $
    16,629
    
    
    $
    14,759Service costs
    
    
    415
    
    
    
    355Interest costs
    
    
    987
    
    
    
    908Amendments
    
    
    533
    
    
    
    Actuarial loss
    
    
    458
    
    
    
    481Benefits paid
    
    
    (1,416
    )
    
    
    (1,019
    )Foreign currency exchange rate changes
    
    
    577
    
    
    
    1,145Benefit obligation at the end of the year
    
    $
    18,183
    
    
    $
    16,629
  (In thousands)
    
    2005
    
    2004Fair value of plan assets at the beginning of the year
    
    $
    14,418
    
    
    $
    12,215Actual return on plan assets
    
    
    1,764
    
    
    
    1,586Company contribution
    
    
    590
    
    
    
    641Benefits paid
    
    
    (1,416
    )
    
    
    (1,019
    )Foreign currency exchange rate changes
    
    
    503
    
    
    
    995Fair value of plan assets at the end of the year
    
    $
    15,859
    
    
    $
    14,418
   (In thousands)
    
    2005
    
    2004Funded status
    
    $
    (2,323
    )
    
    $
    (2,211
    )Unrecognized net actuarial loss
    
    
    696
    
    
    
    1,009Unrecognized prior service costs
    
    
    1,507
    
    
    
    1,039Accrued benefit cost
    
    $
    (120
    )
    
    $
    (163
    )
  (in thousands)2006
    
    $
    1,0072007
    
    
    1,0442008
    
    
    1,0802009
    
    
    1,0672010
    
    
    1,0732011 - 2015
    
    
    5,249
 F-35




---



##### Table of Contents



14. Postretirement Benefit Obligation
   (In thousands)
    
    2005
    
    2004
    
    2003Service cost
    
    $
    753
    
    
    $
    676
    
    
    $
    692Interest cost
    
    
    1,167
    
    
    
    1,081
    
    
    
    1,080Amortization of prior service cost
    
    
    164
    
    
    
    179
    
    
    
    145Amortization of deferred gain
    
    
    
    
    
    
    (7
    )
    
    
    (82
    )Actuarial loss on obligation
    
    
    2,095
    
    
    
    
    
    
    
    Adjustment: amortization of gain
versus year gain on obligation
    
    
    (2,031
    )
    
    
    
    
    
    
    Effect of special termination benefits
    
    
    6
    
    
    
    328
    
    
    
    98Effect of curtailment
    
    
    
    
    
    
    
    
    
    
    20Net periodic postretirement benefit cost
    
    $
    2,154
    
    
    $
    2,257
    
    
    $
    1,953
  (In thousands)
    
    2005
    
    2004Benefit obligation at the beginning of the year
    
    $
    19,908
    
    
    $
    18,125WRI Adjustment
    
    
    512
    
    
    
    Service cost
    
    
    753
    
    
    
    676Interest cost
    
    
    1,167
    
    
    
    1,081Participants contributions
    
    
    791
    
    
    
    787Amendments
    
    
    (420
    )
    
    
    93Actuarial loss
    
    
    1,066
    
    
    
    443Benefits paid
    
    
    (2,213
    )
    
    
    (2,193
    )Special termination benefits
    
    
    6
    
    
    
    328Foreign currency exchange rate changes
    
    
    391
    
    
    
    568Benefit obligation at the end of the year
    
    $
    21,961
    
    
    $
    19,908
  F-36




---



##### Table of Contents



(In thousands)
    
    2005
    
    2004Benefit obligation at end of year
    
    $
    21,961
    
    
    $
    19,908Unrecognized net actuarial (loss)
    
    
    (2,373
    )
    
    
    (1,036
    )Unrecognized prior service cost
    
    
    134
    
    
    
    (450
    )Net postretirement benefit obligation
    
    $
    19,722
    
    
    $
    18,422
   (In thousands)
    
    1% Increase
    
    1% DecreaseU.S. PlanEffect on total of service and interest cost components
    
    $
    10
    
    
    $
    (10
    )Effect on postretirement benefit obligation
    
    $
    160
    
    
    $
    (149
    )Canadian PlanEffect on total of service and interest cost components
    
    $
    779
    
    
    $
    (698
    )Effect on postretirement benefit obligation
    
    $
    12,524
    
    
    $
    (11,350
    )
 15. Environmental Remediation
   F-37




---



##### Table of Contents



16. Litigation
  17. Income Taxes
  (In thousands)
    
    2005
    
    2004
    
    2003U.S.
    
    $
    (35,945
    )
    
    $
    (9,000
    )
    
    $
    (62,579
    )Foreign
    
    
    (4,431
    )
    
    
    7,756
    
    
    
    10,018Total
    
    $
    (40,376
    )
    
    $
    (1,244
    )
    
    $
    (52,561
    )
  (In thousands)
    
    2005
    
    2004
    
    2003Continuing operationsCurrent expense/(benefit):U.S. Federal
    
    $
    349
    
    
    $
    21
    
    
    $
    (1,163
    )Foreign
    
    
    2,633
    
    
    
    (441
    )
    
    
    1,478State
    
    
    30
    
    
    
    60
    
    
    
    446Total current
    
    
    3,012
    
    
    
    (360
    )
    
    
    761Deferred expense/(benefit):U.S.
    
    
    
    
    
    
    (3,444
    )
    
    
    (13,570
    )Foreign
    
    
    (4,772
    )
    
    
    1,916
    
    
    
    (768
    )Total deferred
    
    
    (4,772
    )
    
    
    (1,528
    )
    
    
    (14,338
    )Total income tax expense/(benefit)
continuing operations
    
    
    (1,760
    )
    
    
    (1,888
    )
    
    
    (13,577
    )Income tax benefit  discontinued operations
    
    
    
    
    
    
    (127
    )
    
    
    (769
    )Total income tax expense/(benefit)
    
    $
    (1,760
    )
    
    $
    (2,015
    )
    
    $
    (14,346
    )
  F-38




---



##### Table of Contents



(In thousands)
    
    2005
    
    2004Deferred tax liabilities:Basis of property, plant and equipment
    
    $
    (31,823
    )
    
    $
    (31,683
    )Other
    
    
    (4,853
    )
    
    
    (6,107
    )Total deferred tax liabilities
    
    
    (36,676
    )
    
    
    (37,790
    )Deferred tax assets:Environmental remediation
    
    
    902
    
    
    
    602Net operating loss carryforward
    
    
    38,204
    
    
    
    24,673Restructuring reserves
    
    
    3,953
    
    
    
    2,871Inventory valuations
    
    
    2,427
    
    
    
    3,619Pension obligation
    
    
    21,603
    
    
    
    15,871Other
    
    
    3,104
    
    
    
    2,438Total deferred tax assets
    
    
    70,193
    
    
    
    50,074Valuation allowance
    
    
    (20,048
    )
    
    
    (3,569
    )Total deferred tax assets net of valuation allowance
    
    
    50,145
    
    
    
    46,505Net deferred tax asset
    
    $
    13,469
    
    
    $
    8,715
  (In thousands)
    
    2005
    
    2004
    
    2003Income tax benefit at federal statutory rate
    
    $
    (14,131
    )
    
    $
    (423
    )
    
    $
    (18,397
    )Increase/(decrease) in taxes resulting from:State and local taxes, net of federal benefit
    
    
    20
    
    
    
    40
    
    
    
    533Effect of difference in U.S. and foreign rates
    
    
    (754
    )
    
    
    (1,309
    )
    
    
    (1,765
    )Goodwill impairment and other permanent
differences
    
    
    (420
    )
    
    
    (218
    )
    
    
    7,099Foreign dividend repatriation
    
    
    537
    
    
    
    
    
    
    
    Increase in valuation allowance
    
    
    12,637
    
    
    
    
    
    
    
    Other
    
    
    351
    
    
    
    22
    
    
    
    (1,047
    )Income tax expense/(benefit) continuing
operations
    
    $
    (1,760
    )
    
    $
    (1,888
    )
    
    $
    (13,577
    )
   Accounting for Income Taxes  Special
 F-39




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##### Table of Contents



Areas
 Application of SFAS 109,
Accounting for Income Taxes, to the Tax Deduction on Qualified Production Activities provided by
the American Jobs Creation Act of 2004
 18. Accumulated Other Comprehensive Loss
  Unrealized
    
    MinimumForeign
    
    Gain (Loss) on
    
    Pension
    
    AccumulatedCurrency
    
    Cash Flow
    
    Liability
    
    OtherTranslation
    
    Hedges, Net of
    
    Adjustment,
    
    Comprehensive(In thousands)
    
    Adjustment
    
    Tax
    
    Net of Tax
    
    LossBalance at December 31, 2002
    
    $
    (17,800
    )
    
    $
    (256
    )
    
    $
    (11,535
    )
    
    $
    (29,591
    )Activity in 2003
    
    
    17,383
    
    
    
    1,662
    
    
    
    (220
    )
    
    
    18,825Reclassification adjustment
for realized cash flow hedge
losses
    
    
    
    
    
    
    256
    
    
    
    
    
    
    
    256Balance at December 31, 2003
    
    
    (417
    )
    
    
    1,662
    
    
    
    (11,755
    )
    
    
    (10,510
    )Activity in 2004
    
    
    7,565
    
    
    
    229
    
    
    
    (881
    )
    
    
    6,913Reclassification adjustment
for realized cash
flow hedge losses
    
    
    
    
    
    
    (1,662
    )
    
    
    
    
    
    
    (1,662
    )Balance at December 31, 2004
    
    $
    7,148
    
    
    $
    229
    
    
    $
    (12,636
    )
    
    $
    (5,259
    )Activity in 2005
    
    
    165
    
    
    
    2,253
    
    
    
    (10,900
    )
    
    
    (8,482
    )Reclassification adjustment
for realized cash
flow hedge losses
    
    
    
    
    
    
    (229
    )
    
    
    
    
    
    
    (229
    )Balance at December 31, 2005
    
    $
    7,313
    
    
    $
    2,253
    
    
    $
    (23,536
    )
    
    $
    (13,970
    )
 19. Common Stock
  F-40




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##### Table of Contents



20. Stock-Based Compensation Plans
    F-41




---



##### Table of Contents



2003 Equity
    
    2001
    
    1993
    
    1993 Equity
    
    
    
    
    
    Weighted-Incentive
    
    Directors
    
    Directors
    
    Incentive
    
    
    
    
    
    Average ExercisePlan
    
    Plan
    
    Plan
    
    Plan
    
    Option Price
    
    Price(Number of Shares)Outstanding at
December 31, 2002
    
    
    
    
    
    
    26,362
    
    
    
    160,184
    
    
    
    1,288,922
    
    
    $
    6.13-$25.25
    
    
    $
    11.04Granted
    
    
    2,000
    
    
    
    101,520
    
    
    
    6,000
    
    
    
    366,026
    
    
    $
    4.05-$5.86
    
    
    $
    4.34Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    (5,000
    )
    
    
    (155,715
    )
    
    $
    4.05-$22.25
    
    
    $
    10.57Outstanding at December
31, 2003
    
    
    2,000
    
    
    
    127,882
    
    
    
    161,184
    
    
    
    1,499,233
    
    
    $
    4.05-$25.25
    
    
    $
    9.30Granted
    
    
    239,245
    
    
    
    6,000
    
    
    
    
    
    
    
    
    
    
    $
    10.54-$10.74
    
    
    $
    10.55Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (168,247
    )
    
    $
    4.05-$11.90
    
    
    $
    6.64Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (41,354
    )
    
    $
    4.05-$22.25
    
    
    $
    10.39Outstanding at December
31, 2004
    
    
    241,245
    
    
    
    133,882
    
    
    
    161,184
    
    
    
    1,289,632
    
    
    $
    4.05-$25.25
    
    
    $
    9.70Granted
    
    
    326,399
    
    
    
    45,000
    
    
    
    
    
    
    
    
    
    
    $
    4.93-$8.95
    
    
    $
    8.13Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (88,125
    )
    
    $
    4.05-$8.60
    
    
    $
    6.70Forfeited
    
    
    (62,445
    )
    
    
    
    
    
    
    
    
    
    
    (135,656
    )
    
    $
    4.05-$25.25
    
    
    $
    10.29Outstanding at December
31, 2005
    
    
    505,199
    
    
    
    178,882
    
    
    
    161,184
    
    
    
    1,065,851
    
    
    $
    4.05-$25.25
    
    
    $
    9.47
 F-42




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##### Table of Contents



2003 Equity
    
    2001
    
    1993
    
    1993 Equity
    
    
    
    
    
    Weighted-Incentive
    
    Directors
    
    Directors
    
    Incentive
    
    
    
    
    
    Average ExercisePlan
    
    Plan
    
    Plan
    
    Plan
    
    Option Price
    
    Price(Number of Shares)Exercisable at:December 31, 2003
    
    
    
    
    
    
    127,882
    
    
    
    161,184
    
    
    
    912,810
    
    
    $
    5.28$25.25
    
    
    $
    10.71December 31, 2004
    
    
    667
    
    
    
    133,882
    
    
    
    161,184
    
    
    
    1,000,464
    
    
    $
    4.05-$25.25
    
    
    $
    10.60December 31, 2005
    
    
    454,032
    
    
    
    158,882
    
    
    
    161,184
    
    
    
    1,014,609
    
    
    $
    4.05-$22.25
    
    
    $
    9.79
   Number of
    
    Number of
    
    Weighted AverageWeighted Average Exercise Price
    
    Exercisable Options
    
    Outstanding Options
    
    Remaining Life$4.05 - $4.11
    
    
    156,065
    
    
    
    207,307
    
    
    
    7.2$4.12 - $8.23
    
    
    135,353
    
    
    
    206,520
    
    
    
    6.2$8.24 - $12.34
    
    
    1,203,823
    
    
    
    1,203,823
    
    
    
    5.8$12.35 - $16.45
    
    
    267,966
    
    
    
    267,966
    
    
    
    3.8$16.46 - $20.57
    
    
    18,500
    
    
    
    18,500
    
    
    
    3.9$20.58 - $24.68
    
    
    7,000
    
    
    
    7,000
    
    
    
    3.1Totals
    
    
    1,788,707
    
    
    
    1,911,116
    
    
    
    5.7
    F-43




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##### Table of Contents



21. Commitments
     22. Industry Segments and Foreign Operations
    F-44




---



##### Table of Contents



Rod, Bar(In thousands)
    
    Commercial
    
    Wholesale
    
    & Other
    
    ConsolidatedYear ended December 31, 2005:Sales
    
    $
    619,159
    
    
    $
    195,325
    
    
    $
    59,021
    
    
    $
    873,505Gross profit
    
    
    19,422
    
    
    
    650
    
    
    
    1,571
    
    
    
    21,643Year ended December 31, 2004:Sales
    
    $
    570,666
    
    
    $
    165,215
    
    
    $
    61,994
    
    
    $
    797,875Gross profit
    
    
    52,918
    
    
    
    5,924
    
    
    
    4,839
    
    
    
    63,681Year ended December 31, 2003:Sales
    
    $
    442,471
    
    
    $
    115,112
    
    
    $
    38,741
    
    
    $
    596,324Gross profit/(loss)
    
    
    38,997
    
    
    
    (271
    )
    
    
    2,100
    
    
    
    40,826
    Other Foreign(In thousands)
    
    U.S.
    
    Canada
    
    Operations
    
    ConsolidatedYear ended December 31, 2005:Sales
    
    $
    623,450
    
    
    $
    190,897
    
    
    $
    59,158
    
    
    $
    873,505Long-lived assets
    
    
    215,487
    
    
    
    47,738
    
    
    
    17,111
    
    
    
    280,336Year ended December 31, 2004:Sales
    
    $
    558,892
    
    
    $
    186,680
    
    
    $
    52,303
    
    
    $
    797,875Long-lived assets
    
    
    238,992
    
    
    
    34,831
    
    
    
    18,063
    
    
    
    291,886Year ended December 31, 2003:Sales
    
    $
    414,301
    
    
    $
    139,351
    
    
    $
    42,672
    
    
    $
    596,324Long-lived assets
    
    
    252,077
    
    
    
    33,106
    
    
    
    14,374
    
    
    
    299,557
  December 31,(In thousands)
    
    2005
    
    2004
    
    2003Commercial Products:Tube Products
    
    $
    404,753
    
    
    $
    362,955
    
    
    $
    276,367Fabricated Products
    
    
    140,732
    
    
    
    130,117
    
    
    
    102,576Other Products
    
    
    73,674
    
    
    
    77,594
    
    
    
    63,528Sub-total
    
    
    619,159
    
    
    
    570,666
    
    
    
    442,471Wholesale Products
    
    
    195,325
    
    
    
    165,215
    
    
    
    115,112Rod, bar and other
    
    
    59,021
    
    
    
    61,994
    
    
    
    38,741Total
    
    $
    873,505
    
    
    $
    797,875
    
    
    $
    596,324
 F-45




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##### Table of Contents



23. Restructuring and Other Charges
   For the year endedDecember 31,(In thousands)
    
    2005
    
    2004Roxboro, NC closing
    
    $
    (75
    )
    
    $
    1,413Booneville, MS closing
    
    
    (420
    )
    
    
    623Employee severance
    
    
    1,297
    
    
    
    500Sale of Company aircraft
    
    
    614
    
    
    
    Totals
    
    $
    1,416
    
    
    $
    2,536
 F-46




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##### Table of Contents



24. Earnings/(Loss) Per Share
  (In thousands, except per share amounts)
    
    2005
    
    2004
    
    2003Income/(loss) from continuing operations
    
    $
    (38,616
    )
    
    $
    644
    
    
    $
    (38,984
    )Loss from discontinued operations, net of tax
    
    
    
    
    
    
    (262
    )
    
    
    (1,637
    )Net income/(loss) available to common shares
    
    $
    (38,616
    )
    
    $
    382
    
    
    $
    (40,621
    )Basic weighted average common shares
    
    
    15,022
    
    
    
    13,650
    
    
    
    12,275Dilutive stock options
    
    
    
    
    
    
    342
    
    
    
    Diluted weighted average common and common
equivalent shares
    
    
    15,022
    
    
    
    13,992
    
    
    
    12,275Earnings/(loss) per common sharebasic:Continuing operations
    
    $
    (2.57
    )
    
    $
    0.05
    
    
    $
    (3.18
    )Discontinued operations
    
    
    
    
    
    
    (0.02
    )
    
    
    (0.13
    )Net income/(loss) per common share basic
    
    $
    (2.57
    )
    
    $
    0.03
    
    
    $
    (3.31
    )Earnings/(loss) per common sharediluted (1):Continuing operations
    
    $
    (2.57
    )
    
    $
    0.05
    
    
    $
    (3.18
    )Discontinued operations
    
    
    
    
    
    
    (0.02
    )
    
    
    (0.13
    )Net income/(loss) per common share diluted
    
    $
    (2.57
    )
    
    $
    0.03
    
    
    $
    (3.31
    )
 (1)
    
    To the extent that stock options and unvested restricted stock are anti-dilutive, they
are excluded from the calculation of diluted earnings/(loss) per share in accordance with SFAS 128.
  F-47




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##### Table of Contents



25. Quarterly Results of Operations (Unaudited)
  2005
    
    April 3
    
    July 3
    
    October 2
    
    December 31(In thousands, except per share amounts)Net sales
    
    $
    213,482
    
    
    $
    196,321
    
    
    $
    225,704
    
    
    $
    237,998Gross profit
    
    
    10,060
    
    
    
    5,654
    
    
    
    (1,911
    )
    
    
    7,840Net loss
    
    
    (2,482
    )
    
    
    (5,682
    )
    
    
    (11,198
    )
    
    
    (19,254
    )Basic loss per common share:
    
    $
    (0.17
    )
    
    $
    (0.38
    )
    
    $
    (0.74
    )
    
    $
    (1.28
    )Diluted loss per common share:
    
    $
    (0.17
    )
    
    $
    (0.38
    )
    
    $
    (0.74
    )
    
    $
    (1.28
    )
 2004
    
    April 4
    
    July 4
    
    October 3
    
    December 31(In thousands, except per share amounts)Net sales
    
    $
    205,805
    
    
    $
    214,080
    
    
    $
    200,038
    
    
    $
    177,952Gross profit
    
    
    17,485
    
    
    
    21,581
    
    
    
    12,325
    
    
    
    12,290Net income/(loss) from continuing operations
    
    
    1,368
    
    
    
    3,300
    
    
    
    (2,512
    )
    
    
    (1,512
    )Income/(loss) from discontinued operations,
net of tax
    
    
    
    
    
    
    (252
    )
    
    
    (73
    )
    
    
    63Net income/(loss)
    
    $
    1,368
    
    
    $
    3,048
    
    
    $
    (2,585
    )
    
    $
    (1,449
    )Basic earnings/(loss) per common share:Continuing operations
    
    $
    0.11
    
    
    $
    0.26
    
    
    $
    (0.17
    )
    
    $
    (0.10
    )Discontinued operations
    
    
    
    
    
    
    (0.02
    )
    
    
    
    
    
    
    Net income/(loss)
    
    $
    0.11
    
    
    $
    0.24
    
    
    $
    (0.17
    )
    
    $
    (0.10
    )Diluted earnings/(loss) per common share:Continuing operations
    
    $
    0.11
    
    
    $
    0.26
    
    
    $
    (0.17
    )
    
    $
    (0.10
    )Discontinued operations
    
    
    
    
    
    
    (0.02
    )
    
    
    
    
    
    
    Net income/(loss)
    
    $
    0.11
    
    
    $
    0.24
    
    
    $
    (0.17
    )
    
    $
    (0.10
    )
 26. Condensed Consolidating Financial Information
  F-48




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##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
For the Year Ended December 31, 2005
 Non-Subsidiary
    
    Guarantor(In thousands)
    
    Parent
    
    Guarantors
    
    Subsidiaries
    
    Eliminations
    
    ConsolidatedNet sales
    
    $
    504,481
    
    
    $
    163,890
    
    
    $
    282,657
    
    
    $
    (77,523
    )
    
    $
    873,505Cost of goods sold
    
    
    500,930
    
    
    
    148,779
    
    
    
    279,676
    
    
    
    (77,523
    )
    
    
    851,862Gross profit
    
    
    3,551
    
    
    
    15,111
    
    
    
    2,981
    
    
    
    
    
    
    
    21,643Selling, general and administrative expenses
    
    
    29,050
    
    
    
    3,210
    
    
    
    4,814
    
    
    
    
    
    
    
    37,074Restructuring and other charges
    
    
    1,179
    
    
    
    73
    
    
    
    164
    
    
    
    
    
    
    
    1,416Operating income/(loss) from continuing
operations
    
    
    (26,678
    )
    
    
    11,828
    
    
    
    (1,997
    )
    
    
    
    
    
    
    (16,847
    )Other expenses (income):Interest expense, net
    
    
    20,708
    
    
    
    (38
    )
    
    
    57
    
    
    
    
    
    
    
    20,727Amortization and other, net
    
    
    7,068
    
    
    
    (5,431
    )
    
    
    1,165
    
    
    
    
    
    
    
    2,802Equity in earnings of subsidiaries
    
    
    10,318
    
    
    
    
    
    
    
    
    
    
    
    (10,318
    )
    
    
    Income/(loss) from continuing operations
before income taxes
    
    
    (44,136
    )
    
    
    17,297
    
    
    
    (3,219
    )
    
    
    (10,318
    )
    
    
    (40,376
    )Income tax expense/(benefit) provision
    
    
    (5,520
    )
    
    
    5,850
    
    
    
    (2,090
    )
    
    
    
    
    
    
    (1,760
    )Net income/(loss)
    
    $
    (38,616
    )
    
    $
    11,447
    
    
    $
    (1,129
    )
    
    $
    (10,318
    )
    
    $
    (38,616
    )
 F-49




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##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
For the Year Ended December 31, 2004
 Non-Subsidiary
    
    Guarantor(In thousands)
    
    Parent
    
    Guarantors
    
    Subsidiaries
    
    Eliminations
    
    ConsolidatedNet sales
    
    $
    434,851
    
    
    $
    157,620
    
    
    $
    268,198
    
    
    $
    (62,794
    )
    
    $
    797,875Cost of goods sold
    
    
    408,699
    
    
    
    138,304
    
    
    
    249,985
    
    
    
    (62,794
    )
    
    
    734,194Gross profit
    
    
    26,152
    
    
    
    19,316
    
    
    
    18,213
    
    
    
    
    
    
    
    63,681Selling, general and administrative expenses
    
    
    29,414
    
    
    
    3,346
    
    
    
    4,499
    
    
    
    
    
    
    
    37,259Restructuring and other charges
    
    
    2,563
    
    
    
    (27
    )
    
    
    
    
    
    
    
    
    
    
    2,536Operating income/(loss) from continuing
operations
    
    
    (5,825
    )
    
    
    15,997
    
    
    
    13,714
    
    
    
    
    
    
    
    23,886Other expenses (income):Interest expense, net
    
    
    21,736
    
    
    
    (39
    )
    
    
    (837
    )
    
    
    
    
    
    
    20,860Loss on extinguishment of debt
    
    
    3,009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,009Amortization and other, net
    
    
    7,788
    
    
    
    (13,069
    )
    
    
    6,542
    
    
    
    
    
    
    
    1,261Equity in earnings of subsidiaries
    
    
    24,953
    
    
    
    
    
    
    
    
    
    
    
    (24,953
    )
    
    
    Income/(loss) from continuing operations
before income taxes
    
    
    (13,405
    )
    
    
    29,105
    
    
    
    8,009
    
    
    
    (24,953
    )
    
    
    (1,244
    )Income tax expense/(benefit) provision
    
    
    (13,787
    )
    
    
    10,448
    
    
    
    1,451
    
    
    
    
    
    
    
    (1,888
    )Income/(loss) from continuing operations
    
    
    382
    
    
    
    18,657
    
    
    
    6,558
    
    
    
    (24,953
    )
    
    
    644Loss from discontinued operations, net of tax
    
    
    
    
    
    
    
    
    
    
    (262
    )
    
    
    
    
    
    
    (262
    )Net income
    
    $
    382
    
    
    $
    18,657
    
    
    $
    6,296
    
    
    $
    (24,953
    )
    
    $
    382
 Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
For the Year Ended December 31, 2003
 Non-Subsidiary
    
    Guarantor(In thousands)
    
    Parent
    
    Guarantors
    
    Subsidiaries
    
    Eliminations
    
    ConsolidatedNet sales
    
    $
    318,244
    
    
    $
    123,524
    
    
    $
    199,438
    
    
    $
    (44,882
    )
    
    $
    596,324Cost of goods sold
    
    
    310,968
    
    
    
    107,229
    
    
    
    182,183
    
    
    
    (44,882
    )
    
    
    555,498Gross profit
    
    
    7,276
    
    
    
    16,295
    
    
    
    17,255
    
    
    
    
    
    
    
    40,826Selling, general and administrative expenses
    
    
    24,318
    
    
    
    3,296
    
    
    
    4,489
    
    
    
    
    
    
    
    32,103Restructuring charges
    
    
    14,157
    
    
    
    503
    
    
    
    397
    
    
    
    
    
    
    
    15,057Operating income/(loss) from continuing
operations
    
    
    (31,199
    )
    
    
    12,496
    
    
    
    12,369
    
    
    
    
    
    
    
    (6,334
    )Other expenses (income):Interest expense, net
    
    
    21,829
    
    
    
    (13
    )
    
    
    (598
    )
    
    
    
    
    
    
    21,218Amortization and other, net
    
    
    8,915
    
    
    
    (10,151
    )
    
    
    3,092
    
    
    
    
    
    
    
    1,856Goodwill impairment
    
    
    23,153
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,153Equity in earnings of subsidiaries
    
    
    23,886
    
    
    
    
    
    
    
    
    
    
    
    (23,886
    )
    
    
    Income/(loss) from continuing operations
before income taxes
    
    
    (61,210
    )
    
    
    22,660
    
    
    
    9,875
    
    
    
    (23,886
    )
    
    
    (52,561
    )Income tax expense/(benefit) provision
    
    
    (20,589
    )
    
    
    8,099
    
    
    
    (1,087
    )
    
    
    
    
    
    
    (13,577
    )Income/(loss) from continuing operations
    
    
    (40,621
    )
    
    
    14,561
    
    
    
    10,962
    
    
    
    (23,886
    )
    
    
    (38,984
    )Loss from discontinued operations, net of tax
    
    
    
    
    
    
    
    
    
    
    (1,637
    )
    
    
    
    
    
    
    (1,637
    )Net income/(loss)
    
    $
    (40,621
    )
    
    $
    14,561
    
    
    $
    9,325
    
    
    $
    (23,886
    )
    
    $
    (40,621
    )
 F-50




---



##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
December 31, 2005
 Non-Subsidiary
    
    Guarantor(In thousands)
    
    Parent
    
    Guarantors
    
    Subsidiaries
    
    Eliminations
    
    ConsolidatedAssetsCurrent assetsCash and equivalents
    
    $
    4,571
    
    
    $
    
    
    
    $
    22,758
    
    
    $
    
    
    
    $
    27,329Accounts receivable, net
    
    
    7,965
    
    
    
    6,930
    
    
    
    89,291
    
    
    
    
    
    
    
    104,186Inventories
    
    
    64,418
    
    
    
    44,631
    
    
    
    37,656
    
    
    
    
    
    
    
    146,705Prepaid expenses and other
    
    
    7,425
    
    
    
    1,528
    
    
    
    1,256
    
    
    
    
    
    
    
    10,209Total current assets
    
    
    84,379
    
    
    
    53,089
    
    
    
    150,961
    
    
    
    
    
    
    
    288,429Property, plant and equipment, net
    
    
    108,275
    
    
    
    27,001
    
    
    
    45,962
    
    
    
    
    
    
    
    181,238Goodwill, net
    
    
    
    
    
    
    75,505
    
    
    
    1,559
    
    
    
    
    
    
    
    77,064Deferred charges, net
    
    
    5,368
    
    
    
    125
    
    
    
    2,233
    
    
    
    
    
    
    
    7,726Deferred taxes, non-current
    
    
    7,174
    
    
    
    (7,174
    )
    
    
    13,469
    
    
    
    
    
    
    
    13,469Notes receivable
    
    
    
    
    
    
    
    
    
    
    831
    
    
    
    
    
    
    
    831Prepaid pension and other
    
    
    14
    
    
    
    
    
    
    
    (6
    )
    
    
    
    
    
    
    8Investments in subsidiaries
    
    
    484,383
    
    
    
    325
    
    
    
    
    
    
    
    (484,708
    )
    
    
    Total assets
    
    $
    689,593
    
    
    $
    148,871
    
    
    $
    215,009
    
    
    $
    (484,708
    )
    
    $
    568,765Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable
    
    $
    35,364
    
    
    $
    18,635
    
    
    $
    17,803
    
    
    $
    
    
    
    $
    71,802Accrued liabilities
    
    
    9,350
    
    
    
    17,969
    
    
    
    7,633
    
    
    
    
    
    
    
    34,952Short-term borrowings
    
    
    
    
    
    
    24
    
    
    
    224
    
    
    
    
    
    
    
    248Intercompany balances
    
    
    195,247
    
    
    
    (209,227
    )
    
    
    13,980
    
    
    
    
    
    
    
    Total current liabilities
    
    
    239,961
    
    
    
    (172,599
    )
    
    
    39,640
    
    
    
    
    
    
    
    107,002Long-term debt
    
    
    233,948
    
    
    
    58
    
    
    
    914
    
    
    
    
    
    
    
    234,920Pension liabilities
    
    
    40,285
    
    
    
    
    
    
    
    2,604
    
    
    
    
    
    
    
    42,889Postretirement benefit obligation
    
    
    11,167
    
    
    
    
    
    
    
    8,555
    
    
    
    
    
    
    
    19,722Accrued environmental remediation
    
    
    930
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    930Total liabilities
    
    
    526,291
    
    
    
    (172,541
    )
    
    
    51,713
    
    
    
    
    
    
    
    405,463Stockholders equity
    
    
    163,302
    
    
    
    321,412
    
    
    
    163,296
    
    
    
    (484,708
    )
    
    
    163,302Total liabilities and stockholders equity
    
    $
    689,593
    
    
    $
    148,871
    
    
    $
    215,009
    
    
    $
    (484,708
    )
    
    $
    568,765
 F-51




---



##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
December 31, 2004
 Non-Subsidiary
    
    Guarantor(In thousands)
    
    Parent
    
    Guarantors
    
    Subsidiaries
    
    Eliminations
    
    ConsolidatedAssetsCurrent assetsCash and equivalents
    
    $
    11,191
    
    
    $
    
    
    
    $
    23,826
    
    
    $
    
    
    
    $
    35,017Accounts receivable, net
    
    
    6,822
    
    
    
    59,750
    
    
    
    27,392
    
    
    
    
    
    
    
    93,964Inventories
    
    
    73,423
    
    
    
    39,681
    
    
    
    38,875
    
    
    
    
    
    
    
    151,979Prepaid expenses and other
    
    
    3,677
    
    
    
    1,400
    
    
    
    1,828
    
    
    
    
    
    
    
    6,905Deferred taxes, current
    
    
    8,175
    
    
    
    211
    
    
    
    (679
    )
    
    
    
    
    
    
    7,707Total current assets
    
    
    103,288
    
    
    
    101,042
    
    
    
    91,242
    
    
    
    
    
    
    
    295,572Property, plant and equipment, net
    
    
    120,889
    
    
    
    28,672
    
    
    
    45,405
    
    
    
    
    
    
    
    194,966Deferred charges, net
    
    
    9,930
    
    
    
    300
    
    
    
    1,662
    
    
    
    
    
    
    
    11,892Deferred taxes, non-current
    
    
    (982
    )
    
    
    (7,385
    )
    
    
    9,375
    
    
    
    
    
    
    
    1,008Goodwill, net
    
    
    
    
    
    
    75,390
    
    
    
    1,922
    
    
    
    
    
    
    
    77,312Assets held for sale
    
    
    
    
    
    
    
    
    
    
    1,147
    
    
    
    
    
    
    
    1,147Prepaid pension and other
    
    
    4,316
    
    
    
    
    
    
    
    1,245
    
    
    
    
    
    
    
    5,561Investments in subsidiaries
    
    
    445,423
    
    
    
    325
    
    
    
    (2,288
    )
    
    
    (443,460
    )
    
    
    Total assets
    
    $
    682,864
    
    
    $
    198,344
    
    
    $
    149,710
    
    
    $
    (443,460
    )
    
    $
    587,458Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable
    
    $
    23,725
    
    
    $
    16,919
    
    
    $
    19,268
    
    
    $
    
    
    
    $
    59,912Accrued liabilities
    
    
    13,204
    
    
    
    13,882
    
    
    
    5,390
    
    
    
    
    
    
    
    32,476Short-term borrowings
    
    
    
    
    
    
    24
    
    
    
    1,195
    
    
    
    
    
    
    
    1,219Intercompany balances
    
    
    163,267
    
    
    
    (141,515
    )
    
    
    (21,752
    )
    
    
    
    
    
    
    Total current liabilities
    
    
    200,196
    
    
    
    (110,690
    )
    
    
    4,101
    
    
    
    
    
    
    
    93,607Long-term debt
    
    
    235,665
    
    
    
    82
    
    
    
    1,275
    
    
    
    
    
    
    
    237,022Pension liabilities
    
    
    25,705
    
    
    
    
    
    
    
    2,210
    
    
    
    
    
    
    
    27,915Postretirement benefit obligation
    
    
    10,806
    
    
    
    
    
    
    
    7,616
    
    
    
    
    
    
    
    18,422Accrued environmental remediation
    
    
    990
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    990Total liabilities
    
    
    473,362
    
    
    
    (110,608
    )
    
    
    15,202
    
    
    
    
    
    
    
    377,956Stockholders equity
    
    
    209,502
    
    
    
    308,952
    
    
    
    134,508
    
    
    
    (443,460
    )
    
    
    209,502Total liabilities and stockholders equity
    
    $
    682,864
    
    
    $
    198,344
    
    
    $
    149,710
    
    
    $
    (443,460
    )
    
    $
    587,458
 F-52




---



##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
For the Year Ended December 31, 2005
 Non-Subsidiary
    
    Guarantor(In thousands)
    
    Parent
    
    Guarantors
    
    Subsidiaries
    
    Eliminations
    
    ConsolidatedOperating ActivitiesIncome/(loss) from continuing operations
    
    $
    (38,616
    )
    
    $
    11,447
    
    
    $
    (1,129
    )
    
    $
    (10,318
    )
    
    $
    (38,616
    )Depreciation and amortization
    
    
    10,395
    
    
    
    3,035
    
    
    
    3,618
    
    
    
    
    
    
    
    17,048Deferred income taxes
    
    
    19
    
    
    
    
    
    
    
    (4,593
    )
    
    
    
    
    
    
    (4,574
    )Loss on disposal of fixed assets
    
    
    1,886
    
    
    
    
    
    
    
    141
    
    
    
    
    
    
    
    2,027Non-cash portion of restructuring and other
    
    
    349
    
    
    
    133
    
    
    
    179
    
    
    
    
    
    
    
    661Sale of accounts receivable
    
    
    
    
    
    
    
    
    
    
    19,000
    
    
    
    
    
    
    
    19,000Equity in earnings of subsidiaries
    
    
    (10,318
    )
    
    
    
    
    
    
    
    
    
    
    10,318
    
    
    
    Changes in operating assets and liabilities
    
    
    22,644
    
    
    
    13,260
    
    
    
    (36,332
    )
    
    
    
    
    
    
    (428
    )Net cash provided by/(used for) operating
activities
    
    
    (13,641
    )
    
    
    27,875
    
    
    
    (19,116
    )
    
    
    
    
    
    
    (4,882
    )Investing ActivitiesAdditions to property, plant and equipment, net
    
    
    (4,426
    )
    
    
    (1,535
    )
    
    
    (4,048
    )
    
    
    
    
    
    
    (10,009
    )Disposal of assets
    
    
    5,412
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,412Other
    
    
    4,367
    
    
    
    171
    
    
    
    (125
    )
    
    
    
    
    
    
    4,413Net cash used for investing activities
    
    
    5,353
    
    
    
    (1,364
    )
    
    
    (4,173
    )
    
    
    
    
    
    
    (184
    )Financing ActivitiesFinancing fees and expenses paid
    
    
    (438
    )
    
    
    
    
    
    
    (663
    )
    
    
    
    
    
    
    (1,101
    )Intercompany borrowings (payments)
    
    
    (8,267
    )
    
    
    (26,487
    )
    
    
    34,754
    
    
    
    
    
    
    
    Issuance of common stock
    
    
    503
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    503Net borrowings/(payments) on credit facilities
    
    
    (1,000
    )
    
    
    (24
    )
    
    
    (1,198
    )
    
    
    
    
    
    
    (2,222
    )Other
    
    
    10,224
    
    
    
    
    
    
    
    (10,191
    )
    
    
    
    
    
    
    33Net cash provided by/(used for) financing activities
    
    
    1,022
    
    
    
    (26,511
    )
    
    
    22,702
    
    
    
    
    
    
    
    (2,787
    )Effect of exchange rate on cash and equivalents
    
    
    646
    
    
    
    
    
    
    
    (481
    )
    
    
    
    
    
    
    165Net cash provided by/(used for) continuing
operations
    
    
    (6,620
    )
    
    
    
    
    
    
    (1,068
    )
    
    
    
    
    
    
    (7,688
    )Net increase/decrease in cash and equivalents
    
    
    (6,620
    )
    
    
    
    
    
    
    (1,068
    )
    
    
    
    
    
    
    (7,688
    )Cash and equivalents at beginning of period
    
    
    11,191
    
    
    
    
    
    
    
    23,826
    
    
    
    
    
    
    
    35,017Cash and equivalents at end of period
    
    $
    4,571
    
    
    $
    
    
    
    $
    22,758
    
    
    $
    
    
    
    $
    27,329
 F-53




---



##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
For the Year Ended December 31, 2004
 Non-Subsidiary
    
    Guarantor(In thousands)
    
    Parent
    
    Guarantors
    
    Subsidiaries
    
    Eliminations
    
    ConsolidatedOperating ActivitiesIncome/(loss) from continuing operations
    
    $
    382
    
    
    $
    18,657
    
    
    $
    6,558
    
    
    $
    (24,953
    )
    
    $
    644Depreciation and amortization
    
    
    10,766
    
    
    
    3,454
    
    
    
    3,187
    
    
    
    
    
    
    
    17,407Loss on early retirement of debt
    
    
    3,009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,009Other non-cash items
    
    
    100
    
    
    
    56
    
    
    
    
    
    
    
    
    
    
    
    156Equity in earnings of subsidiaries
    
    
    (24,953
    )
    
    
    
    
    
    
    
    
    
    
    24,953
    
    
    
    Changes in operating assets and liabilities
    
    
    (18,810
    )
    
    
    (2,381
    )
    
    
    (8,667
    )
    
    
    
    
    
    
    (29,858
    )Net cash provided by/(used for) operating activities
    
    
    (29,506
    )
    
    
    19,786
    
    
    
    1,078
    
    
    
    
    
    
    
    (8,642
    )Investing ActivitiesAdditions to property, plant and equipment
    
    
    (6,329
    )
    
    
    (1,284
    )
    
    
    (4,115
    )
    
    
    
    
    
    
    (11,728
    )Disposal of assets
    
    
    2,926
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,926Investment in WLV Latin America
    
    
    (703
    )
    
    
    (36
    )
    
    
    739
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    82
    
    
    
    
    
    
    
    
    
    
    
    82Net cash used for investing activities
    
    
    (4,106
    )
    
    
    (1,238
    )
    
    
    (3,376
    )
    
    
    
    
    
    
    (8,720
    )Financing ActivitiesFinancing fees and expenses paid
    
    
    (151
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (151
    )Intercompany borrowings (payments)
    
    
    29,408
    
    
    
    (17,271
    )
    
    
    (12,137
    )
    
    
    
    
    
    
    Issuance of common stock
    
    
    21,898
    
    
    
    
    
    
    
    2,266
    
    
    
    
    
    
    
    24,164Retirement of Senior Notes
    
    
    (20,510
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20,510
    )Other
    
    
    2,279
    
    
    
    (1,277
    )
    
    
    (339
    )
    
    
    
    
    
    
    663Net cash provided by/(used for) financing activities
    
    
    32,924
    
    
    
    (18,548
    )
    
    
    (10,210
    )
    
    
    
    
    
    
    4,166Effect of exchange rate on cash and equivalents
    
    
    3,349
    
    
    
    
    
    
    
    (963
    )
    
    
    
    
    
    
    2,386Net cash provided by/(used for) continuing
operations
    
    
    2,661
    
    
    
    
    
    
    
    (13,471
    )
    
    
    
    
    
    
    (10,810
    )Net cash used for discontinued operations
    
    
    
    
    
    
    
    
    
    
    (262
    )
    
    
    
    
    
    
    (262
    )Net increase/decrease in cash and equivalents
    
    
    2,661
    
    
    
    
    
    
    
    (13,733
    )
    
    
    
    
    
    
    (11,072
    )Cash and equivalents at beginning of period
    
    $
    8,530
    
    
    $
    
    
    
    $
    37,559
    
    
    $
    
    
    
    $
    46,089
 F-54




---



##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
For the Year Ended December 31, 2003
 Non-Subsidiary
    
    Guarantor(In thousands)
    
    Parent
    
    Guarantors
    
    Subsidiaries
    
    Eliminations
    
    ConsolidatedOperating ActivitiesIncome/(loss) from continuing operations
    
    $
    (40,621
    )
    
    $
    14,561
    
    
    $
    10,962
    
    
    $
    (23,886
    )
    
    $
    (38,984
    )Depreciation and amortization
    
    
    12,532
    
    
    
    3,538
    
    
    
    2,939
    
    
    
    
    
    
    
    19,009Deferred income taxes
    
    
    (11,776
    )
    
    
    
    
    
    
    (765
    )
    
    
    
    
    
    
    (12,541
    )Other non-cash items
    
    
    316
    
    
    
    50
    
    
    
    
    
    
    
    
    
    
    
    366Non-cash portion of restructuring charge
    
    
    11,690
    
    
    
    326
    
    
    
    
    
    
    
    
    
    
    
    12,016Goodwill impairment
    
    
    23,153
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,153Equity in earnings of subsidiaries
    
    
    (23,886
    )
    
    
    
    
    
    
    
    
    
    
    23,886
    
    
    
    Changes in operating assets and liabilities
    
    
    13,889
    
    
    
    (11,217
    )
    
    
    (5,442
    )
    
    
    
    
    
    
    (2,770
    )Net cash provided by/(used for) operating activities
    
    
    (14,703
    )
    
    
    7,258
    
    
    
    7,694
    
    
    
    
    
    
    
    249Investing ActivitiesAdditions to property, plant and equipment
    
    
    (4,450
    )
    
    
    (634
    )
    
    
    (885
    )
    
    
    
    
    
    
    (5,969
    )Investments in rabbi trust
    
    
    (4,289
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,289
    )Disposal of assets
    
    
    6
    
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    12Net cash used for investing activities
    
    
    (8,733
    )
    
    
    (634
    )
    
    
    (879
    )
    
    
    
    
    
    
    (10,246
    )Financing ActivitiesFinancing fees and expenses paid
    
    
    (52
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (52
    )Net (payments) borrowings on revolving credit
facilities
    
    
    (551
    )
    
    
    551
    
    
    
    (1,122
    )
    
    
    
    
    
    
    (1,122
    )Intercompany borrowings (payments)
    
    
    9,915
    
    
    
    (7,175
    )
    
    
    (2,740
    )
    
    
    
    
    
    
    Other financing activities
    
    
    
    
    
    
    
    
    
    
    (6
    )
    
    
    
    
    
    
    (6
    )Net cash provided by/(used for) financing activities
    
    
    9,312
    
    
    
    (6,624
    )
    
    
    (3,868
    )
    
    
    
    
    
    
    (1,180
    )Effect of exchange rate on cash and equivalents
    
    
    193
    
    
    
    
    
    
    
    2,452
    
    
    
    
    
    
    
    2,645Net cash provided by/(used for) continuing
operations
    
    
    (13,931
    )
    
    
    
    
    
    
    5,399
    
    
    
    
    
    
    
    (8,532
    )Net cash provided by discontinued operations
    
    
    
    
    
    
    
    
    
    
    701
    
    
    
    
    
    
    
    701Net increase/(decrease) in cash and equivalents
    
    
    (13,931
    )
    
    
    
    
    
    
    6,100
    
    
    
    
    
    
    
    (7,831
    )Cash and equivalents at beginning of period
    
    
    22,461
    
    
    
    
    
    
    
    31,459
    
    
    
    
    
    
    
    53,920Cash and equivalents at end of period
    
    $
    8,530
    
    
    $
    
    
    
    $
    37,559
    
    
    $
    
    
    
    $
    46,089
 F-55




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
    Internal
ControlIntegrated Framework .
 /s/ KPMG LLP 
 F-56




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
    /s/ Ernst & Young LLP 
 F-57




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
  , Internal ControlIntegrated Framework
    F-58




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##### Table of Contents



Internal ControlIntegrated Framework Internal ControlIntegrated Framework
  /s/  KPMG LLP 
 F-59




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##### Table of Contents



Wolverine Tube, Inc. and Subsidiaries  Schedule IIValuation and Qualifying Accounts
 Balance
    
    Charged to
    
    Charged to
    
    
    
    
    
    Balance atBeginning of
    
    Cost and
    
    Other
    
    
    
    
    
    End ofDescription
    
    Period
    
    Expenses
    
    Accounts
    
    Deductions
    
    Period(In thousands)Year ended December 31, 2005:Deducted from assets accounts:Reserve for sales returns and allowances
    
    $
    510
    
    
    
    404
    
    
    
    1
    
    
    
    (23
    )
    
    $
    892Allowances for doubtful accounts
    
    
    449
    
    
    
    245
    
    
    
    1
    
    
    
    (268
    )
    
    
    427Deferred tax valuation
    
    
    3,569
    
    
    
    12,637
    
    
    
    3,842
    
    
    
    
    
    
    
    20,048Year ended December 31, 2004:Deducted from assets accounts:Reserve for sales returns and allowances
    
    $
    658
    
    
    $
    10
    
    
    $
    
    
    
    $
    (158
    )(1)
    
    $
    510Allowances for doubtful accounts
    
    
    437
    
    
    
    350
    
    
    
    
    
    
    
    (338
    )(2)
    
    
    449Deferred tax valuation
    
    
    3,569
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,569Year ended December 31, 2003:Deducted from assets accounts:Reserve for sales returns and allowances
    
    $
    508
    
    
    $
    327
    
    
    $
    
    
    
    $
    (177
    )(1)
    
    $
    658Allowances for doubtful accounts
    
    
    481
    
    
    
    238
    
    
    
    (247
    )
    
    
    (35
    )(2)
    
    
    437Deferred tax valuation
    
    
    2,385
    
    
    
    1,184
    
    
    
    
    
    
    
    
    
    
    
    3,569
 (1)
    
    Reduction of reserve, net of translation adjustments, for actual sales
returns and allowances.(2)
    
    Uncollectible accounts written off from both continuing and discontinued
operations, net of translation adjustments and recoveries.
 S-1




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##### Table of Contents



Exhibit Index
 ExhibitNumber
    
    Description10.40
    
    2002 Change in Control, Severance and Non-Competition
Agreement, dated as of July 12, 2002, by and between the
Company and Garry K. Johnson.10.41
    
    Form of Letter for Amendment to Split Dollar Agreement
Dated May 1, 199910.42
    
    Form of Letter for Vesting of Underwater Options21
    
    List of Subsidiaries23.1
    
    Consent of Independent Registered Public Accounting Firm23.2
    
    Consent of Independent Registered Public Accounting Firm31.1
    
    Certification of the Chief
Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of the Chief
Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of the Chief Executive Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of the Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.