Exhibit 13
                                                                    ----------

Portions of the annual report to  stockholders  for the year ended  December 31,
1997 which are expressly  incorporated by reference in this filing follow.  Such
items are  proceeded by an index which shows the location in this Annual  Report
on Form 10-K where such items are  incorporated by reference and the location of
the item in the annual report to  stockholders  for the year ended  December 31,
1997.


                                         INDEX
                                         -----

Reference    Incorporation                                        Page number
letter in    location in                                           in annual
this         this                                                  report to
Exhibit      Form 10-K               Description of Item          stockholders
--------     -----------       ---------------------------        ------------

    (A)      Part II, item 6   Consolidated Selected                 page 10
                                  Financial Data

    (B)      Part II, item 7   Management's Discussion and           pages 11
                                  Analysis of Financial Condition    thru 14
                                  and Results of Operations

    (C)      Part II, item 8   Consolidated Balance Sheet            page 15

             Part II, item 8   Consolidated Statement of Income      page 16

             Part II, item 8   Consolidated Statement of             page 17
                                  Changes in Stockholders'
                                  Equity

             Part II, item 8   Consolidated Statement of             page 18
                                  Cash Flows

             Part II, item 8   Notes to Consolidated                 pages 19
                                  Financial Statements               thru 30

             Part II, item 8   Report of Independent Auditors        page 31

The items follow:
<PAGE>

                                                            Exhibit 13 item (A)
                                                            -------------------

                          COMMONWEALTH INDUSTRIES, INC.
                      Consolidated Selected Financial Data
                     (in thousands except per share amounts)

<TABLE>
<CAPTION>
                                                                                            Year ended December 31,
                                           ----------------------------------------------------------------------------------------
                                                  1997               1996               1995               1994              1993
                                           --------------      ------------       ------------      -------------      ------------
<S>                                          <C>                 <C>                <C>                <C>               <C>    
Statement of Operations Data:
Net sales                                     $ 1,090,777         $ 739,218          $ 671,501          $ 496,529         $ 413,036
Gross profit                                       88,043            49,312             64,750             41,406             5,475
Operating income (loss)                            41,593            19,262             42,240             20,262           (15,987)
Income (loss) before extraordinary loss and
 cumulative effect of change in accounting
 principle                                          9,122            14,756             33,787             22,091           (11,578)
Income (loss) before cumulative
   effect of change in accounting principle         7,941            13,401             33,787             22,091           (11,578)
Net income (loss)                                   7,941            13,401             33,787             22,091           (77,993)

Net income per share data: (1)
     Basic
         Income before extraordinary loss          $ 0.78            $ 1.45             $ 3.32
         Extraordinary loss                         (0.10)            (0.13)              -
                                            -------------      ------------       ------------
         Net income                                $ 0.68            $ 1.32             $ 3.32
                                            =============      ============       ============

     Diluted
         Income before extraordinary loss          $ 0.78            $ 1.45             $ 3.31
         Extraordinary loss                         (0.10)            (0.13)              -
                                            -------------      ------------       ------------
         Net income                                $ 0.68            $ 1.32             $ 3.31
                                            =============      ============       ============

     Cash dividends declared                       $ 0.20            $ 0.20             $ 0.15

Operating Data:
Depreciation and amortization                    $ 34,710          $ 22,452           $ 18,600           $ 17,397          $ 16,538
Capital expenditures                             $ 21,736          $ 14,841           $ 15,153           $ 19,662          $ 12,092
Commonwealth Aluminum business unit:
     Net sales                                  $ 964,012         $ 704,400          $ 671,501          $ 496,529         $ 413,036
     Shipments (pounds)                           990,207           712,480            587,932            568,970           511,887
Alflex business unit:
     Net sales                                  $ 126,765          $ 34,818
     Shipments (feet)                             521,711           136,936

Balance Sheet Data:
Working capital                                 $ 112,924         $ 207,061          $ 153,292          $ 134,026         $ (15,197)
Total assets                                      667,421           794,582            420,684            439,454           357,557
Total debt                                        125,650           342,250             48,375                  -           125,000
Total stockholders' equity                        330,473           227,223            213,063            242,690            93,824

</TABLE>

(1)   Net income per share data for prior  periods has been  restated to reflect
      the  adoption of  Statement of  Financial  Accounting  Standards  No. 128,
      "Earnings Per Share".
<PAGE>


                                                          Exhibit 13 item (B)
                                                          -------------------

                          COMMONWEALTH INDUSTRIES, INC.
 Management's Discussion and Analysis of Financial Condition and Results of
 Operations

         The following is a discussion of the consolidated  financial  condition
and results of operations of the Company for each of the years in the three-year
period  ended  December  31,  1997,  and  certain  factors  that may  affect the
Company's  prospective  financial  condition.  This  section  should  be read in
conjunction  with the consolidated  financial  statements of the Company for the
year ended December 31, 1997 and the notes thereto.  The statements  included in
this  discussion  and analysis of financial  condition and results of operations
which  are  not  historical   facts  are   forward-looking   statements.   These
forward-looking  statements  are made pursuant to the safe harbor  provisions of
the  Private   Securities   Litigation   Act  of  1995  and  involve  risks  and
uncertainties that could render them materially  different,  including,  but not
limited to, the effect of global economic conditions,  the impact of competitive
products and pricing,  product development and  commercialization,  availability
and cost of critical raw materials,  the rate of technological  change,  product
demand  and  market  acceptance  risks,   capacity  and  supply  constraints  or
difficulties and other risks as detailed in the Company's various Securities and
Exchange Commission filings.

Overview
         The Company  manufactures  non-heat  treat  coiled  aluminum  sheet for
distributors and the transportation,  construction and consumer durables end use
markets and  electrical  flexible  conduit and  prewired  armored  cable for the
non-residential construction and renovation markets. The Company's principal raw
materials are aluminum scrap, primary aluminum,  copper and steel. Trends in the
demand for  aluminum  sheet  products in the United  States and in the prices of
aluminum  primary  metal,  aluminum  scrap and copper affect the business of the
Company.  The Company's  operating results also are affected by factors specific
to the Company,  such as the margins between selling prices for its products and
its cost of raw material  ("material  margins")  and its unit cost of converting
raw material into its products  ("conversion  cost").  While changes in aluminum
and copper prices can cause the Company's net sales to change significantly from
period to period,  net  income is more  directly  impacted  by  fluctuations  in
material margins.
         Although the demand for aluminum sheet  products is cyclical,  over the
longer term demand has continued to increase,  reflecting general population and
economic  growth and the advantages of aluminum's  light weight,  high degree of
formability,  resistance to corrosion and recyclability. United States shipments
of  aluminum  sheet have grown from 8.4  billion  pounds in 1992 to 9.2  billion
pounds in 1996. Aluminum sheet shipments for 1997 were up 7% over 1996.
         The price of aluminum metal affects the price of the Company's products
and in the  longer  term can  have an  effect  on the  competitive  position  of
aluminum in relation to  alternative  materials.  The price of primary  metal is
determined  largely by  worldwide  supply and  demand  conditions  and is highly
cyclical.  For example,  during the past 10 years the average  annual cash price
per pound of aluminum for  transactions  on the London Metals Exchange peaked at
$1.17 in 1988,  declined  to $0.52 in 1993,  rose to $0.82 in 1995,  declined to
$0.68 in 1996 and was $0.73 in 1997.  The  price of  primary  aluminum  in world
markets greatly influences the price of aluminum scrap, the Company's  principal
raw material.  Significant movements in the price of primary aluminum can affect
the  Company's  margins  because  aluminum  sheet  prices  do  not  always  move
simultaneously  nor necessarily to the same degree as the primary  markets.  The
Company  seeks to manage its  material  margins  by  focusing  on higher  margin
products  and by  sourcing  the  scrap and  primary  metal  markets  in the most
cost-effective  manner,  including  the use of futures  contracts and options to
hedge anticipated raw material requirements and firm-priced sales orders.
         The Company's material margins declined in the early 1990s, principally
due to  excess  capacity  in the  industry  and  reduced  demand  as a result of
recessionary  economic conditions which caused aluminum sheet prices to decrease
faster than raw material prices. Margins increased during 1994 and 1995 due to a
change in product mix to higher  margin  products and increased  demand.  During
1996  margins  declined  to the  lowest  level  since 1993 as  distributors  and
end-users  reduced  inventory  levels  and  activity  in  some  end-use  markets
declined.  While demand for aluminum sheet products  increased during 1997, this
increased demand has not resulted in improved  material margins as these margins
contracted  slightly  during the last three  quarters  of 1997  compared  to the
fourth  quarter of 1996 and the first  quarter of 1997.  The margin  between the
price of aluminum scrap and the price of primary aluminum  decreased during 1997
compared to 1996.
         During the past five years the Company has lowered its unit  conversion
costs by increasing  production  throughput and by reducing costs. This has been
achieved  generally  through  improved  employee  productivity,  higher  machine
utilization rates and greater manufacturing  efficiencies.  The Company believes
its conversion costs to be among the lowest in the industry.
         Shipments of electrical  conduit and cable continued to increase during
1996 and 1997 as demand in the construction,  renovation and remodeling  markets
remained strong.  Capital investments made during 1997 to increase the Company's
electrical  conduit and cable  manufacturing  capacity  have  resulted in higher
production levels to support increased demand for the Company's products. During
the second half of 1997 the Company's  margin for  electrical  and conduit cable
products increased due to declining copper prices.
         On September 20, 1996,  the Company  acquired  CasTech  Aluminum  Group
Inc.,  ("CasTech")  in a  transaction  that was accounted for under the purchase
method  of  accounting  at  a  cost  of  $285  million.  Concurrently  with  the
acquisition,  the Company prepaid its existing indebtedness and that of CasTech.
The acquisition and prepayments were financed with a $325 million senior secured
bank credit  facility (which has  subsequently  been reduced - see note 7 to the
consolidated  financial  statements) and the proceeds from the issue and sale of
$125 million principal amount of 10 3/4% Senior Subordinated Notes Due 2006.

Results of Operations for 1997, 1996 and 1995
         Net Sales. Net sales for 1997 increased 48% to $1.1 billion  (including
$126.8 million from the Company's Alflex  electrical  products  subsidiary) from
$739.2  million  (including  $34.8 million from Alflex) in 1996. The increase is
due to the  CasTech  acquisition  along  with  increased  sales  volumes  at all
facilities.  Unit  sales  volume of  aluminum  products  increased  39% to 990.2
million  pounds in 1997 from 712.5  million  pounds in 1996.  Alflex  unit sales
volume was 521.7  million feet for 1997 compared to 136.9 million feet for 1996.
Giving pro forma effect for the 1996 CasTech acquisition, the Company's aluminum
rolling  mills  generated  5% growth in  shipments  during 1997 while its Alflex
electrical  products  subsidiary  achieved 8% growth.  These gains reflected the
Company's  ability to complete  the  integration  of  CasTech's  operations  and
systems  successfully,  optimizing the product mix between the Company's  plants
and  achieving  the  operating  synergies  envisioned at the time of the CasTech
acquisition.
         In 1996 net sales grew 10% to $739.2  million  from  $671.5  million in
1995.  The  acquisition  of CasTech  accounted for $109.5 million of 1996 sales.
Average selling prices for aluminum sheet products  decreased 13.2% to $0.99 per
pound from $1.14 per pound in 1995. This decline reflected lower metal costs and
competitive pressures as demand weakened.  Despite these competitive  pressures,
unit sales  increased 21.2% to 712.5 million pounds as the result of the Company
increasing its market share.
         Gross Profit.  Gross profit  increased  78.5% (to 8.1% of net sales) in
1997 after a 23.8%  decrease (to 6.7% of net sales) in 1996.  The 1997  increase
was  attributable to the CasTech  acquisition,  increased unit sales volumes and
lower  manufacturing  unit costs which more than offset lower material  margins.
The 1996 decrease was  primarily a result of a reduction in the material  margin
to approximately $0.30 per pound from $0.36 in 1995.
         Selling,  General and  Administrative  Expenses.  Selling,  general and
administrative  expenses  increased 45.5% in 1997,  primarily due to the CasTech
acquisition.  Contributing to the increase were corporate relocation , severance
and other costs related to the integration of the  businesses.  Giving pro forma
effect for the 1996 CasTech  acquisition,  selling,  general and  administrative
expenses  declined 3.4% in 1997  compared to 1996.  The 1996 figure was up 33.5%
over 1995,  primarily due to the CasTech  acquisition,  staffing changes and the
cost of professional services.
         Amortization  of  Goodwill.  Goodwill,  which  relates  to the  CasTech
acquisition,  increased $3.3 million in 1997 compared to 1996  reflecting a full
year of amortization in 1997 versus a partial year in 1996.
         Operating Income. Operating income increased by 115.9% in 1997 to $41.6
million,  compared with a 1996 decrease of 54.4% to $19.3 million,  in each case
reflecting the factors mentioned above.
         Halco Income. Prior to March 1995, the Company had an interest in Halco
(Mining) Inc., and received dividends and income from bauxite sales amounting to
$1.6 million in 1995.  This  investment was  distributed to the Company's  prior
owner in March 1995 in a  transaction  associated  with the  disposition  of the
owner's interest in the Company.
         Other Income (Expense), Net. Other income in 1995 included $2.6 million
resulting from the favorable  settlement of a dispute with the Kentucky  Revenue
Cabinet over energy taxes.
         Interest  Expense,  Net. The  increase in interest  expense in 1997 and
1996  is  due  to  borrowings  associated  with  the  CasTech  acquisition.  The
borrowings  were reduced at the end of the third quarter of 1997 as described in
the  "Liquidity  and Capital  Resources"  section  following.  This reduction in
borrowings  coupled  with  the  reduced  interest  rates  due  to  the  accounts
receivable securitization facility led to a reduction in interest expense during
the fourth  quarter of 1997.  Interest  expense was $5.5  million for the fourth
quarter of 1997 compared to $8.7 million for the third quarter of 1997.
         Income Tax Expense  (Benefit).  Income tax expense  (benefit)  in 1997,
1996 and 1995 reflect the use of the Company's net operating loss  carryforwards
(NOLs) to offset taxable income for federal income tax purposes. At December 31,
1997,  the Company had remaining  available NOLs of  approximately  $93 million.
These NOLs will expire in various  amounts  through 2008.  The amount of taxable
income that can be offset by NOLs arising prior to the initial  public  offering
of the Company in March 1995 is subject to an annual limitation of approximately
$9.6  million  plus  certain  gains   included  in  taxable   income  which  are
attributable to the Company prior to the initial public offering.
         Income tax expense for 1997 was $2.4 million. The Company recognized an
income tax  benefit in 1996 of $5.3  million as a result of  revisions  to prior
year tax estimates and adjustments to the estimated utilization of NOLs.
         Extraordinary  Loss  on  Early  Extinguishment  of  Debt.  The  Company
recorded an extraordinary loss on the early  extinguishment of debt in both 1997
and 1996 of $1.5  million  ($1.2  million  and $1.4  million  net of income  tax
benefit, respectively).
         Net Income. Net income for 1997 decreased 41% to $7.9 million,  after a
60% decrease in 1996 over 1995, in each case  reflecting  the factors  described
above for each year.


Liquidity and Capital Resources
         The Company's  sources of liquidity are cash flows from  operations and
the Company's accounts  receivable  securitization  facility described below and
borrowings  under  its $100  million  revolving  credit  facility.  The  Company
believes  that these  sources  will be  sufficient  to fund its working  capital
requirements,  capital  expenditures,  debt service and dividend payments for at
least through 1998.
         On September 29, 1997, the Company completed a common stock offering of
5.75  million  shares  at a  public  offering  price of $18 per  share.  The net
proceeds from the offering of approximately $97.7 million were used to repay the
entire amount  outstanding  under the Company's  term loan  agreement,  totaling
$95.0 million, as well as $2.7 million outstanding under the Company's revolving
credit facility.
         On  September  26,  1997,  the Company  sold all of its trade  accounts
receivables to a 100% owned subsidiary,  Commonwealth  Financing Corp.  ("CFC").
Simultaneously, CFC entered into a three-year accounts receivable securitization
facility with a financial institution and its affiliate whereby CFC can sell, on
a revolving  basis,  an  undivided  interest in certain of its  receivables  and
receive up to $150.0 million from an unrelated  third party  purchaser at a cost
of funds linked to commercial paper rates plus a charge for  administrative  and
credit support  services.  At December 31, 1997, the Company had received $150.0
million under the  agreement  and had $39.7 million of net residual  interest in
the  securitized  receivables  which is included in other current  assets in the
Company's consolidated financial statements.
         The Company's  cash flows from  operations in 1997,  1996 and 1995 were
$134.7 million, $42.0 million and $20.2 million,  respectively.  The increase in
cash flow from  operations in 1997 was due primarily to the accounts  receivable
securitization  while the increase in cash flow from  operations in 1996 was due
primarily to a decrease in working capital,  before giving effect to the CasTech
acquisition,  which more than offset a reduction in operating earnings.  Working
capital  decreased to $112.9 million at December 31, 1997 from $207.1 million at
December 31, 1996, due to the accounts receivable  securitization.  The increase
in 1996 was principally a result of the CasTech acquisition.
         The Company's  revolving credit facility permits borrowings and letters
of credit up to $100.0 million outstanding at any time.  Availability is subject
to satisfaction  of certain  covenants and other  requirements.  At December 31,
1997, $98.7 million was available. The facility expires on September 1, 2002.
         Capital expenditures were $21.7 million, $14.8 million plus the cost of
the CasTech acquisition and $15.2 million in 1997, 1996 and 1995,  respectively,
and are estimated to be $49 million in 1998, all generally  related to upgrading
the  Company's  manufacturing  and other  facilities  and meeting  environmental
requirements.
         The  indicated  annual rate of  dividends  being paid on the  Company's
Common Stock is $0.20 per share, or an annual total of about $3.2 million.

Risk Management
         Market and credit risk is managed by the Company through an active risk
management program. This program focuses on inventory,  purchase commitments and
committed and anticipated sales.
 The Company utilizes futures contracts and options to protect against exposures
to price risk in the  aluminum  market.  The Company is exposed to losses in the
event of non-performance  by the counter- parties to these agreements;  however,
the Company does not anticipate non-performance by the counterparties.  Prior to
conducting  business with a potential  customer,  credit checks are performed on
the customer to determine  creditworthiness and assess credit risk. In addition,
an indirect  credit  exposure  review is  performed  on all  customers.  Trading
partners (brokers) are evaluated for  creditworthiness and risk assessment prior
to initiating trading activities with the brokers. However, the Company does not
require  collateral to support  broker  transactions.  In addition,  all brokers
trading on the London  Metal  Exchange  with U.S.  clients are  regulated by the
Commodities  Trading and Futures  Commission,  which  requires the brokers to be
fully insured against  unrealized losses owed to clients.  At December 31, 1997,
credit lines totaling $52 million were available at various  brokerages  used by
the Company.
         Gains,  losses and  premiums on futures  contracts  and  options  which
effectively  hedge  exposures are deferred and included in income as a component
of the underlying sales transaction. The Company had deferred realized losses of
$1.5 million and deferred realized gains of $0.4 million as of December 31, 1997
and 1996,  respectively  on  closed  futures  contracts  and  options.  Deferred
realized  losses are recorded as an increase in the carrying  value of inventory
and deferred realized gains are recorded as a reduction in the carrying value of
inventory.
         At December 31, 1997,  the Company held purchase and sales  commitments
through 1998  totaling $56 million and $328 million,  respectively.  At December
31, 1997 and 1996,  the  Company's  position  with  respect to aluminum  futures
contracts and options was as follows (in millions):

                                            Market                Unrealized
                                            Value                    Gain
                                            -------               ----------
         December 31, 1997                  $123.9                   $ 0.3
         December 31, 1996                    57.9                     2.2

         Unrealized  gains and losses are recorded in the  consolidated  balance
sheet as  prepayments  and other  current  assets and accrued  liabilities.  The
unrealized  gain of $0.3  million at December  31, 1997  consists of  unrealized
gains due from brokers of $0.6 million and  unrealized  losses due to brokers of
$0.3 million.  Futures  contracts and options are valued at the closing price on
the last business day of the year.
         The Company uses interest rate swap  agreements to manage interest rate
risk on its floating rate debt  portfolio.  At December 31, 1997 the Company had
interest  rate  swap  contracts  with a  notional  amount of  approximately  $67
million.  The  counterparties  to interest rate  contracts are major  commercial
banks and management believes that losses related to credit risk are remote.
         The  Company  has  initiated  a  company-wide  program to  prepare  the
Company's  computer  systems and  applications  for the year 2000. The year 2000
problem is the result of computer programs being written using two digits rather
than four to define the applicable year. Any of the Company's programs that have
time-sensitive  software may recognize a date using "00" as the year 1900 rather
than  the  year  2000.   This  could  result  in  a  major  system   failure  or
miscalculations. At December 31, 1997, approximately 50 percent of the Company's
systems were compliant,  with all systems expected to be compliant by the end of
the first quarter of 1999. The total cost of the project is estimated to be $7.0
million  and is being  funded  through  operating  cash  flows.  Maintenance  or
modification  costs  are  being  expensed  as  incurred,  while the costs of new
software is being capitalized and amortized over the software's useful life. The
Company  presently  believes that, with  modifications to existing  software and
converting  to new  software,  the year 2000 problem  will not pose  significant
operational  problems  for the  Company's  computer  systems as so modified  and
converted.  However,  if such  modifications  and  conversions are not completed
timely,  the year 2000 problem may have a material  impact on the  operations of
the Company.

Recently Issued Accounting Pronouncements

         During February 1997, the Financial  Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS
No. 128"). The Company adopted SFAS No. 128 during the fourth quarter of 1997 as
required.  Prior-period  net income per share data has been  restated to reflect
the adoption of SFAS No. 128.
         During June 1997,  the  Financial  Accounting  Standards  Board issued
Statement of Financial Accounting Standards No. 131, "Disclosures about Segments
of an Enterprise  and Related  Information"  ("SFAS No. 131").  The Company will
adopt SFAS No. 131 during the fourth quarter of 1998 as required.

<PAGE>
                                                         Exhibit 13 item (C)
                                                         -------------------

                          COMMONWEALTH INDUSTRIES, INC.
                           Consolidated Balance Sheet
                        (in thousands except share data)
<TABLE>
<CAPTION>

                                                                                      December 31,
                                                                        --------------------------------------
                                                                            1997                     1996
                                                                        -------------            -------------
<S>                                                                     <C>                      <C>   
Assets
Current assets:
          Cash and cash equivalents                                              $ -                  $ 1,944
          Accounts receivable, net                                               355                  146,091
          Inventories                                                        171,633                  173,911
          Prepayments and other current assets                                45,107                   10,056
                                                                        -------------            -------------
               Total current assets                                          217,095                  332,002
Property, plant and equipment, net                                           266,292                  274,095
Goodwill, net                                                                173,562                  175,146
Other noncurrent assets                                                       10,472                   13,339
                                                                        -------------            -------------
               Total assets                                                $ 667,421                $ 794,582
                                                                        =============            =============

Liabilities
Current liabilities:
          Outstanding checks in excess of deposits                           $ 9,122                      $ -
          Current portion of long-term debt                                        -                    6,250
          Accounts payable                                                    67,881                   82,340
          Accrued liabilities                                                 27,168                   36,351
                                                                        -------------            -------------
               Total current liabilities                                     104,171                  124,941
Long-term debt                                                               125,650                  336,000
Other long-term liabilities                                                    9,675                   14,584
Accrued pension benefits                                                      13,368                   10,610
Accrued postretirement benefits                                               84,084                   81,224
                                                                        -------------            -------------
               Total liabilities                                             336,948                  567,359
                                                                        -------------            -------------

Commitments and contingencies                                                      -                        -
Stockholders' Equity
     Common stock, $.01 par value, 50,000,000 shares authorized,
          15,941,500 and 10,197,500 shares outstanding at
          December 31, 1997 and 1996, respectively                               159                      102
     Additional paid-in capital                                              398,757                  301,289
     Accumulated deficit                                                     (66,575)                 (72,188)
     Unearned compensation                                                    (1,172)                  (1,980)
     Minimum pension adjustment                                                 (696)                       -
                                                                        -------------            -------------
               Total stockholders' equity                                    330,473                  227,223
                                                                        -------------            -------------
               Total liabilities and stockholders' equity                  $ 667,421                $ 794,582
                                                                        =============            =============

</TABLE>

                               See notes to consolidated financial statements.
<PAGE>


                          COMMONWEALTH INDUSTRIES, INC.
                        Consolidated Statement of Income
                      (in thousands except per share data)

<TABLE>
<CAPTION>
                                                                         Year ended December 31,
                                                            ---------------------------------------------------
                                                                1997               1996               1995
                                                            --------------      ------------       ------------
<S>                                                            <C>                <C>                <C>      
Net sales                                                      $1,090,777         $ 739,218          $ 671,501
Cost of goods sold                                              1,002,734           689,906            606,751
                                                            --------------      ------------       ------------
     Gross profit                                                  88,043            49,312             64,750
Selling, general and administrative expenses                       41,972            28,841             22,510
Amortization of goodwill                                            4,478             1,209                  -
                                                            --------------      ------------       ------------
     Operating income                                              41,593            19,262             42,240
Halco income                                                            -                 -              1,636
Other income (expense), net                                           487                76              2,670
Interest expense, net                                             (30,536)           (9,875)            (3,473)
                                                            --------------      ------------       ------------
     Income before income taxes and extraordinary loss             11,544             9,463             43,073
Income tax expense (benefit)                                        2,422            (5,293)             9,286
                                                            --------------      ------------       ------------
     Income before extraordinary loss                               9,122            14,756             33,787
Extraordinary loss on early extinguishment of debt,
     net of income tax benefit                                     (1,181)           (1,355)                 -
                                                            --------------      ------------       ------------
     Net income                                                   $ 7,941          $ 13,401           $ 33,787
                                                            ==============      ============       ============

Net income per share data:
     Basic
         Income before extraordinary loss                          $ 0.78            $ 1.45             $ 3.32
         Extraordinary loss                                         (0.10)            (0.13)              -
                                                            --------------      ------------       ------------
         Net income                                                $ 0.68            $ 1.32             $ 3.32
                                                            ==============      ============       ============

     Diluted
         Income before extraordinary loss                          $ 0.78            $ 1.45             $ 3.31
         Extraordinary loss                                         (0.10)            (0.13)              -
                                                            --------------      ------------       ------------
         Net income                                                $ 0.68            $ 1.32             $ 3.31
                                                            ==============      ============       ============


Weighted average shares outstanding
         Basic                                                     11,687            10,197             10,191
         Diluted                                                   11,723            10,203             10,199

</TABLE>

                       See notes to consolidated financial statements.

<PAGE>

                          COMMONWEALTH INDUSTRIES, INC.
            Consolidated Statement of Changes in Stockholders' Equity
                 (in thousands except share and per share data)
<TABLE>
<CAPTION>
                                            Common Stock       
                                      ----------------------   Additional                               Minimum         Total
                                       Number of                Paid-in      Accumulated   Unearned     Pension      Stockholders'
                                         Shares      Amount     Capital        Deficit    Compensation  Adjustment      Equity
                                       ----------   --------  -----------   ------------  ------------  ----------   ------------
<S>                                   <C>             <C>     <C>           <C>             <C>       <C>             <C>          
Balance December 31, 1994                      -       $ -     $ 358,498     $ (115,808)     $ -       $      -        $ 242,690
Net income                                     -         -            -          33,787        -              -           33,787
Cash dividends, $0.15 per share                -         -            -          (1,528)       -              -           (1,528)
Minimum pension adjustment                     -         -            -              -         -          (2,269)         (2,269)
Capital transactions associated
  with Initial Public Offering         10,000,000       100      (60,116)            -         -              -          (60,016)
Issuance of restricted stock              202,500         2        2,895             -     (2,897)            -               -
Forfeiture of restricted stock            (12,500)       -          (163)            -        163             -               -
Amortization of unearned compensation          -         -            -              -        399             -              399
                                       ----------   --------    ---------      ---------  --------     ----------      ---------
Balance December 31, 1995              10,190,000       102      301,114        (83,549)   (2,335)        (2,269)        213,063
Net income                                     -         -            -          13,401        -              -           13,401
Cash dividends, $0.20 per share                -         -            -          (2,040)       -              -           (2,040)
Minimum pension adjustment                     -         -            -              -         -           2,269           2,269
Issuance of restricted stock               25,000        -           420             -       (420)            -               -
Forfeiture of restricted stock            (17,500)       -          (245)            -        245             -               -
Amortization of unearned compensation          -         -            -              -        530             -              530
                                       ----------   --------    ---------      ---------  --------     ----------      ---------
Balance December 31, 1996              10,197,500       102      301,289        (72,188)   (1,980)            -          227,223
Net income                                     -         -            -           7,941        -              -            7,941
Cash dividends, $0.20 per share                -         -            -          (2,328)       -              -           (2,328)
Minimum pension adjustment                     -         -            -              -         -            (696)           (696)
Stock offering                          5,750,000        57       97,585             -         -              -           97,642
Issuance of restricted stock                2,500        -            47             -        (47)            -               -
Forfeiture of restricted stock            (22,500)       -          (399)            -        399             -               -
Amortization of unearned compensation          -         -            -              -        456             -              456
Exercise of stock options                   9,000        -           151             -         -              -              151
Stock awards                                5,000        -            84             -         -              -               84
                                       ----------   ---------   ---------      ---------  --------      -----------    ---------
Balance December 31, 1997              15,941,500     $ 159    $ 398,757        (66,575) $ (1,172)        $ (696)      $ 330,473
                                       ==========   =========   =========      =========  ========      ===========    =========
</TABLE>

                 See notes to consolidated financial statements.
<PAGE>

                          COMMONWEALTH INDUSTRIES, INC.
                      Consolidated Statement of Cash Flows
                                 (in thousands)
<TABLE>
<CAPTION>

                                                                                              Year ended December 31,
                                                                                 ---------------------------------------------------
                                                                                    1997                 1996               1995
                                                                                 ------------        -------------       -----------
<S>                                                                                 <C>                 <C>               <C>    
Cash flows from operating activities:
   Net income                                                                        $ 7,941             $ 13,401          $ 33,787
   Adjustments to reconcile net income to net cash provided by operations:
        Depreciation and amortization                                                 34,710               22,452            18,600
        Extraordinary loss on early extinguishment of debt                             1,495                1,505                 -
        Loss on disposal of property, plant and equipment                              1,271                    -                 -
        Issuance of common stock in connection with stock awards                          84                    -                 -
        Proceeds from the initial sale of accounts receivable                        150,000                    -                 -
        Changes in assets and liabilities:
             (Increase) decrease in accounts receivable, net                         (46,650)              12,636             6,608
             Decrease (increase) in inventories                                        2,278               (1,563)          (22,880)
             Decrease (increase) in prepayments and other current assets               6,970                7,819            (1,816)
             Decrease (increase) in other noncurrent assets                              201               (1,425)           (3,642)
             (Decrease) in accounts payable                                          (14,459)              (3,248)          (13,075)
             (Decrease) in accrued liabilities                                        (9,183)              (1,972)             (251)
             Increase (decrease) in other liabilities                                     13               (7,570)            2,836
                                                                                 ------------        -------------       -----------
                 Net cash provided by operating activities                           134,671               42,035            20,167
                                                                                 ------------        -------------       -----------
Cash flows from investing activities:
   Net cash and cash equivalents (outflow) from acquisition                           (2,894)            (280,921)                -
   Debt issuance costs                                                                     -               (9,921)                -
   Purchases of property, plant and equipment                                        (21,736)             (14,841)          (15,153)
   Proceeds from sale of property, plant and equipment                                    28                  314               304
                                                                                 ------------        -------------       -----------
        Net cash (used in) investing activities                                      (24,602)            (305,369)          (14,849)
                                                                                 ------------        -------------       -----------
Cash flows from financing activities:
   Outstanding checks in excess of deposits                                            9,122                    -                 -
   Proceeds from short-term borrowings                                                     -               21,000            25,000
   Repayments of short-term borrowings                                                     -              (25,000)          (21,000)
   Proceeds from long-term debt                                                      294,950              343,500            50,000
   Repayments of long-term debt                                                     (511,550)             (74,847)           (5,625)
   Proceeds from issuance of common stock                                             97,793                    -                 -
   Payment to prior sole shareholder                                                       -                    -           (50,000)
   Miscellaneous receipts from prior shareholder                                           -                    -               500
   Cash dividends paid                                                                (2,328)              (2,040)           (1,528)
                                                                                 ------------        -------------       -----------
        Net cash (used in) provided by financing activities                         (112,013)             262,613            (2,653)
                                                                                 ------------        -------------       -----------
Net (decrease) increase in cash and cash equivalents                                  (1,944)                (721)            2,665
Cash and cash equivalents at beginning of period                                       1,944                2,665                 -
                                                                                 ------------        -------------       -----------
Cash and cash equivalents at end of period                                               $ -              $ 1,944           $ 2,665
                                                                                 ============        =============       ===========
Supplemental disclosures:
    Interest paid                                                                   $ 27,046              $ 3,571           $ 3,532
    Income taxes paid (refund received)                                               (1,407)               1,558             9,955

</TABLE>

                                 See notes to consolidated financial statements.

<PAGE>

                         COMMONWEALTH INDUSTRIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.  Basis of Presentation and Summary of Significant Accounting Policies
Commonwealth Industries, Inc. (the "Company") operates principally in the United
States in one business  segment.  The Company  manufactures  aluminum  sheet and
flexible  electrical  conduit and cable products made  principally from recycled
aluminum scrap and primary aluminum.

The  Company's  prior sole  shareholder  completed on March 17, 1995, an initial
public offering of 8,750,000 shares of common stock at an initial offering price
of $14.00 per share and sold its remaining 1,250,000 shares later in 1995 on the
open market. The Company received no proceeds from these transactions.

Principles of Consolidation
The consolidated  financial  statements  include the accounts of the Company and
its wholly-owned  subsidiaries.  All significant intercompany  transactions have
been  eliminated.  Certain prior year amounts have been  reclassified to conform
with current classifications.

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

Cash and Cash Equivalents
Cash and cash  equivalents  include demand deposits with banks and highly liquid
investments  with  original  maturities  of three  months or less.  The carrying
amount of cash and cash equivalents approximates their fair value.

Concentrations of Credit Risk
Futures contracts, options, cash investments and accounts receivable potentially
subject the Company to  concentrations  of credit risk.  The Company  places its
cash  investments  with high credit quality  institutions.  At times,  such cash
investments  may be in  excess  of the  Federal  Deposit  Insurance  Corporation
insurance limit.  Credit risk with respect to accounts receivable exists related
to  concentrations  of sales to  aluminum  distributors,  who in turn resell the
Company's aluminum products to end-use markets, including the consumer durables,
building and construction and transportation  markets.  Concentrations of credit
risk with respect to accounts  receivable  from the sale of electrical  products
are limited due to the large  customer base,  and their  dispersion  across many
different  geographical areas. During 1996 and 1995, sales to one major customer
amounted  to 11.0% and 12.5%,  respectively,  of the  Company's  net sales.  The
Company  performs  ongoing  credit  evaluations  of  its  customers'   financial
condition but does not require collateral to support customer receivables.

Inventories
Inventories are stated at the lower of cost or market. The methods of accounting
for inventories are described in Note 4.

Long-Lived Assets
Property, plant and equipment are carried at cost and are being depreciated on a
straight-line  basis  over  the  estimated  useful  lives  of the  assets  which
generally range from 15 to 33 years for buildings and improvements and from 5 to
20 years for machinery and equipment.  Repair and maintenance  costs are charged
against  income while renewals and  betterments  are  capitalized.  Retirements,
sales and disposals of assets are recorded by removing the cost and  accumulated
depreciation  from the accounts  with any  resulting  gain or loss  reflected in
income.

Goodwill  represents  the  excess  of cost  over  the fair  value of net  assets
acquired and is amortized on a straight-line basis over forty years. Accumulated
amortization  was $5.7  million and $1.2  million at December 31, 1997 and 1996,
respectively.

In the event that facts and  circumstances  indicate that the carrying amount of
an asset or group of assets may be impaired,  an  evaluation  of  recoverability
would  be  performed.  If  an  evaluation  is  required,  the  estimated  future
undiscounted  cash flows  associated  with the asset  would be  compared  to the
assets'  carrying  amount  to  determine  if a  write-down  to  market  value or
discounted cash flow value is required.

Financial Instruments
The Company  enters into futures  contracts and options to manage price exposure
from  committed and certain  anticipated  sales.  Gains,  losses and premiums on
these instruments which effectively hedge exposures are deferred and included in
income as a component of the underlying sales transaction.

The Company also uses futures  contracts  to manage  risks  associated  with its
natural gas requirements and interest rate swaps to manage interest rate risk.

Income Taxes
The Company  accounts  for income  taxes  using the  liability  method,  whereby
deferred  income taxes reflect the tax effect of temporary  differences  between
the carrying amount of assets and liabilities for financial  reporting  purposes
and the amounts used for income tax  purposes.  In valuing  deferred tax assets,
the Company uses judgment in determining if it is more likely than not that some
portion or all of a deferred  tax asset will not be  realized  and the amount of
the required valuation allowance.

Revenue Recognition
The Company recognizes  revenue upon passage of title to the customer,  which in
most cases coincides with shipment.

Computation of Net Income Per Common Share
Basic net income per common  share has been  computed by dividing  net income by
the weighted average number of common shares outstanding during the period.

Diluted net income per share has been  computed  by  dividing  net income by the
weighted average number of common and common  equivalent  shares (stock options)
outstanding during the period.

Prior-period net income per share data has been restated to reflect the adoption
of Statement of Financial Accounting Standards No. 128, "Earnings Per Share".

Stock-Based Compensation
Compensation cost is measured under the intrinsic value based method.  Pro forma
disclosures of net income and net income per share are presented, as if the fair
value based method had been applied.

Self Insurance
The  Company  is  substantially  self-insured  for losses  related  to  workers'
compensation  and health  claims.  Losses are accrued  based upon the  Company's
estimates  of the  aggregate  liability  for  claims  incurred  based on Company
experience and certain actuarial assumptions.

Environmental Compliance and Remediation
Environmental  expenditures  relating  to current  operations  are  expensed  or
capitalized as appropriate.  Expenditures relating to existing conditions caused
by past operations,  which do not contribute to current or future revenues,  are
expensed.  Costs to  prepare  environmental  site  evaluations  and  feasibility
studies are accrued when the Company  commits to perform them.  Liabilities  for
remediation  costs and  post-remediation  monitoring  are recorded when they are
probable  and  reasonably  estimable,  generally  the earlier of  completion  of
feasibility  studies  or the  Company's  commitment  to a plan  of  action.  The
assessment  of this  liability  is  calculated  based  on  existing  technology,
considers funds available in the settlement trust discussed in Note 12, does not
reflect any offset for possible  recoveries from insurance  companies and is not
discounted.

2.  Acquisitions
On  September  20,  1996,  the  Company  acquired  CasTech  Aluminum  Group Inc.
("CasTech")  for a purchase  price of $285  million.  The excess of the purchase
price over the  acquired net assets of $179 million was recorded as goodwill and
is being  amortized  over 40  years.  The  acquisition  was  recorded  under the
purchase  method of  accounting  and  accordingly,  the results of operations of
CasTech  prior  to the  date  of  acquisition  have  not  been  included  in the
accompanying consolidated financial statements.

Pending Acquistion
On December 19, 1997, the Company and Noranda Aluminum,  Inc. announced they had
executed a letter of intent  pursuant  to which the  Company  will  explore  the
purchase  of the Noranda  aluminum  rolling  mill in  Scottsboro,  Alabama.  The
Scottsboro  aluminum  rolling mill has an annual capacity of  approximately  300
million pounds.  The letter of intent is preliminary and the consummation of any
transaction  is subject to due diligence  investigation,  negotiation  of terms,
execution of definitive documentation, and board approvals.

3.  Accounts Receivable Securitization
On September 26, 1997, the Company sold all of its trade accounts receivables to
a 100% owned subsidiary,  Commonwealth Financing Corp. ("CFC").  Simultaneously,
CFC entered into a three-year accounts receivable securitization facility with a
financial  institution  and its  affiliate  whereby CFC can sell, on a revolving
basis,  an undivided  interest in certain of its  receivables  and receive up to
$150.0 million from an unrelated third party purchaser at a cost of funds linked
to commercial  paper rates plus a charge for  administrative  and credit support
services.  At December 31, 1997,  the Company had received  $150.0 million under
the agreement and had $39.7 million of net residual  interest in the securitized
receivables  which  is  included  in  other  current  assets  in  the  Company's
consolidated financial statements.

The Company  maintains an allowance for  uncollectible  accounts  based upon the
expected collectibility of all consolidated trade accounts receivable, including
receivables sold by CFC. The allowance was $2.3 million at December 31, 1997 and
is netted against the net residual interest in the securitized receivables which
is included in other  current  assets in the  Company's  consolidated  financial
statements.  At December 31, 1996 the  allowance  was $2.2 million and is netted
against accounts receivable in the Company's consolidated financial statements.

4.  Inventories
The Company  uses the  first-in,  first-out  (FIFO) and the  last-in,  first-out
(LIFO) methods for valuing its  inventories.  Inventories at December 31 consist
of the following (in thousands):

                                                    1997           1996
                                                 ---------      ---------
Raw materials                                    $  30,395      $  32,124
Work in process                                     76,286         79,539
Finished goods                                      53,395         46,959
Expendable parts and supplies                       14,884         15,338
                                                 ---------      ---------      
                                                   174,960        173,960
LIFO reserve                                        (3,327)           (49)
                                                 ---------      ---------
                                                  $171,633       $173,911
                                                 =========      =========  


Inventories  of  approximately  $35.4  million,  included in the above totals at
December 31, 1997, are accounted for under the LIFO method of accounting.

During 1997,  LIFO  inventory  quantities  were reduced,  resulting in a partial
liquidation  of the LIFO  bases,  the  effect of which  increased  net income by
approximately $0.7 million.

5.  Property, Plant and Equipment
Property,  plant and  equipment  and the  related  accumulated  depreciation  at
December 31 consist of the following (in thousands):

                                                      1997           1996
                                                  ---------      ---------
Land and improvements                             $  20,686      $  17,300
Buildings and improvements                           62,764         63,125
Machinery and equipment                             408,517        398,789
Construction in progress                             19,770         16,219
                                                  ---------      ---------
                                                    511,737        495,433
Less accumulated depreciation                       245,445        221,338
                                                  ---------      ---------
Net property, plant and equipment                  $266,292       $274,095
                                                  =========      =========

Depreciation expense was $28.2 million,  $20.0 million and $17.9 million for the
years ended 1997, 1996 and 1995, respectively.

6.  Financial Instruments
Market  and  credit  risk is  managed  by the  Company  through  an active  risk
management program. This program focuses on inventory,  purchase commitments and
committed and anticipated  sales.  The Company  utilizes  futures  contracts and
options to protect against  exposures to price risk in the aluminum market.  The
Company  is  exposed  to  losses  in  the  event  of   non-performance   by  the
counterparties  to these  agreements;  however,  the Company does not anticipate
non-performance  by the  counterparties.  Prior to  conducting  business  with a
potential  customer,  credit  checks are  performed on the customer to determine
creditworthiness  and assess  credit  risk.  In  addition,  an  indirect  credit
exposure review is performed on all customers.  Trading  partners  (brokers) are
evaluated for  creditworthiness  and risk assessment prior to initiating trading
activities with the brokers, however, the Company does not require collateral to
support broker  transactions.  All brokers  trading on the London Metal Exchange
with  U.S.  clients  are  regulated  by  the  Commodities  Trading  and  Futures
Commission,  which requires the brokers to be fully insured  against  unrealized
losses owed to clients.  At December 31, 1997, credit lines totaling $52 million
were available at various brokerages used by the Company.

Gains,  losses and premiums on futures  contracts and options which  effectively
hedge  exposures  are  deferred  and  included in income as a  component  of the
underlying sales  transaction.  The Company had deferred realized losses of $1.5
million and deferred  realized gains of $0.4 million as of December 31, 1997 and
1996,  respectively on closed futures  contracts and options.  Deferred realized
losses are  recorded as an  increase  in the  carrying  value of  inventory  and
deferred  realized  gains are recorded as a reduction  in the carrying  value of
inventory.

At December 31, 1997,  the Company held purchase and sales  commitments  through
1998 totaling $56 million and $328 million,  respectively.  At December 31, 1997
and 1996, the Company's  position with respect to aluminum futures contracts and
options was as follows (in millions):


                                                  Market          Unrealized
                                                  Value              Gain
                       December 31, 1997          $123.9            $ 0.3
                       December 31, 1996            57.9              2.2


Unrealized  gains and losses are recorded in the  consolidated  balance sheet as
prepayments  and other current  assets and accrued  liabilities.  The unrealized
gain  of  $0.3  million  and  $2.2  million  at  December  31,  1997  and  1996,
respectively,  consists of unrealized  gains due from broker of $0.6 million and
$4.5 million,  respectively, and unrealized losses due to broker of $0.3 million
and $2.3 million, respectively.  Futures contracts and options are valued at the
closing price on the last business day of the year.

7.  Long-term Debt
Long-term  debt of the Company at December 31  consisted  of the  following  (in
thousands):

                                                 1997               1996
                                               --------          --------
Senior subordinated notes                      $125,000          $125,000
Term loan payable                                    --            98,750
Revolving credit facility                           650           118,500
                                               --------          --------
                                                125,650           342,250
Less current maturities                              --             6,250
                                               --------          --------
                                               $125,650          $336,000
                                               ========          ========

During  1996,  in  connection  with the  acquisition  of  CasTech,  the  Company
refinanced its outstanding borrowings and entered into a credit agreement with a
syndicate  of banks led by  National  Westminster  Bank.  The  credit  agreement
included a $100 million term loan and a $225 million  revolving credit facility.
In addition, the Company issued $125 million of 10.75% senior subordinated notes
due  2006.  In  connection  with  the  refinancing,   the  Company  incurred  an
extraordinary  loss on early  extinguishment  of debt of $1.5  million  (or $1.4
million after tax).

During  September 1997, the Company repaid the remaining amount of the term loan
under the credit agreement with the net proceeds of approximately  $97.7 million
received from the September 1997 equity  offering of the Company.  In connection
with the repayment of the term loan, the Company incurred an extraordinary  loss
on early  extinguishment of debt of $1.5 million (or $1.2 million after tax). In
addition,  in December 1997, the Company amended the credit  agreement to reduce
the revolving credit facility from $225 million to $100 million.

The credit  agreement is  collateralized  by a pledge of all of the  outstanding
stock of the  Company's  subsidiaries  and  substantially  all of the  Company's
assets.

Up to $30 million of the revolving  credit facility is available for standby and
commercial  letters  of  credit.   The  revolving  credit  facility   commitment
terminates on September 1, 2002.

Borrowings  under the credit agreement bear interest at a variable base rate per
annum plus up to an  additional  0.75%  depending  on the results of a quarterly
financial test as defined in the agreement. In addition, the Company must pay to
the lenders under the credit agreement,  a quarterly commitment fee ranging from
0.175% to 0.25%. The blended  interest rate on outstanding  borrowings under the
revolving  credit  facility  was 8.50% and 6.95% at December  31, 1997 and 1996,
respectively. The interest rate on the term loan was 6.88% at December 31, 1996.

The  Company  must pay a fee  ranging  from  0.325% to  0.750%  per annum on the
carrying  amount of each  outstanding  letter of credit.  At December  31, 1997,
letters of credit  totaling  $0.7 million were  outstanding  under the revolving
credit facility.

The credit agreement includes covenants which, among others, relate to leverage,
interest  coverage,  fixed  charges,  capital  expenditures  and the  payment of
dividends.

The Company uses  interest  rate swaps to  effectively  convert a portion of its
variable interest rates relating to the Company's  revolving credit facility and
accounts receivable securitization facility to fixed interest rates. At December
31, 1997, the Company had swap  agreements in place covering  approximately  $67
million of the Company's exposure to variable interest rates. The fixed interest
rates range from 5.9% to 7.0%. The counterparties to interest rate contracts are
major  commercial  banks and  management  believes that losses related to credit
risk is remote.

At December  31, 1997 and 1996,  the interest  rates on all amounts  outstanding
under the credit  agreement  are  scheduled  to adjust in three  months or less.
Accordingly,  the  carrying  value of all amounts  outstanding  under the credit
agreement  approximates  fair  value at  December  31,  1997 and 1996.  Based on
estimated  market  values at December  31, 1997 and 1996,  the fair value of the
senior  subordinated  notes was  approximately  $131  million and $129  million,
respectively.

Future  aggregate  maturities  of  long-term  debt at  December  31, 1997 are as
follows (in thousands):

1998                                                        $     --
1999                                                              --
2000                                                              --
2001                                                              --
2002                                                             650
Thereafter                                                   125,000
                                                            --------
     Total                                                  $125,650
                                                            ========

8.  Stockholders' Equity
On September  29, 1997,  the Company  completed a common stock  offering of 5.75
million  shares at a public  offering  price of $18 per share.  The net proceeds
from the offering of  approximately  $97.7 million were used to repay the entire
amount  outstanding  under the Company's  term loan  agreement,  totaling  $95.0
million,  as well as $2.7  million  outstanding  under the  Company's  revolving
credit facility.

9.  Pension Plans
The Company has two defined benefit pension plans covering  certain salaried and
non-salaried  employees.  The plan  benefits  are  based  primarily  on years of
service and employees' compensation during the last five years of employment for
salaried employees and on stated amounts based on job grade and years of service
prior to  retirement  for  non-salaried  employees  covered  under a  collective
bargaining agreement.  The plans' assets consist primarily of equity securities,
guaranteed investment contracts and fixed income pooled accounts.


The funded status of the plans at December 31 is as follows (in thousands):

<TABLE>
<CAPTION>

                                                                                         1997            1996
                                                                                       ---------      --------     
<S>                                                                                    <C>           <C>                 
Actuarial present value of benefit obligations:                                        
           Vested benefit obligation                                                    $(71,803)     $(64,276)
           Nonvested benefit obligation                                                   (4,682)       (4,471)
                                                                                       ---------      --------                    
           Accumulated benefit obligation                                               $(76,485)     $(68,747)
                                                                                       ---------      --------        
Projected benefit obligation                                                            $(77,814)     $(76,727)
Plan assets at fair value                                                                 70,530        64,083
                                                                                       ---------      --------         
           Projected benefit obligation in excess of plan assets                          (7,284)      (12,644)
Unrecognized net asset                                                                      (769)       (1,000)
Unrecognized prior service cost                                                           (3,934)        3,017
Unrecognized net loss                                                                      2,290         3,012
Adjustment required to recognize minimum liability                                        (3,671)       (2,995)
                                                                                       ---------      --------           
           Accrued pension cost                                                        $ (13,368)    $ (10,610)
                                                                                       =========      ========
</TABLE>

The  liabilities as of December 31, 1997  disclosed  above reflect the change in
the defined  benefit  plan  covering  the  salaried  employees to a cash balance
formula  effective  January 1, 1998.  In addition,  reflected  in the  Company's
consolidated  balance sheet is an additional  minimum liability  relative to its
underfunded  plan in the amount of $3.7 million and $3.0 million at December 31,
1997 and 1996, respectively. A corresponding amount is recorded as an intangible
asset to the extent it does not exceed  unrecognized  prior service cost,  while
the excess in 1997 was charged to stockholders' equity.

The  projected  benefit  obligation  was  determined  using a  weighted  average
discount rate of 7.25%,  7.75% and 7.00% for 1997, 1996 and 1995,  respectively.
The weighted  average rate of future  compensation  increases was 4.5% for 1997,
1996 and 1995. The expected rate of return on plan assets was 9.25% for 1997 and
1996 and 8.00% for 1995.

The  components  of net pension  expense for the years ended  December 31 are as
follows (in thousands):

<TABLE>
<CAPTION>

                                                         1997         1996          1995
                                                        ------       ------        ------  
<S>                                                     <C>          <C>           <C>   
Benefit cost for service during the year                $2,221       $2,378        $1,583
Interest cost on projected benefit obligation            5,719        5,514         4,787
Actual return on plan assets                            (9,691)      (5,699)       (6,584)
Net amortization and deferral                            4,016        1,102         2,846
                                                        ------       ------        ------  
          Net pension expense                           $2,265       $3,295        $2,632
                                                        ======       ======        ======
</TABLE>
 

The  Company's  policy  for  these  plans is to make  contributions  equal to or
greater  than the  requirements  prescribed  by the Employee  Retirement  Income
Security Act of 1974.

The Company also contributes to a union sponsored defined benefit multi-employer
pension plan for certain of its non-salaried employees.  The Employee Retirement
Income  Security  Act of 1974,  as amended by the  Multi-Employers  Pension Plan
Amendment  Act of 1980,  imposes  certain  liabilities  upon  employers  who are
contributors to multi-employer  plans in the event of the employers'  withdrawal
from  such a plan or upon a  termination  of such a plan.  Management  does  not
intend  to  take  any  action  that  would  subject  the  Company  to  any  such
liabilities.

In addition to the defined  benefit  plans  described  above,  the Company  also
sponsors defined contribution plans covering substantially all employees. In two
of the  plans,  the  Company  matches  25% to 50% of a  participant's  voluntary
contributions  (depending on the respective plant's annual earnings performance)
up to a maximum of 6% of a  participant's  compensation.  In the  remaining  two
plans,  contributions are at the discretion of the Board of Directors and cannot
exceed 15% of the participants' annual wages. The Company's contributions to the
plans were approximately  $1.9 million,  $1.3 million and $1.5 million for 1997,
1996 and 1995, respectively.

10.  Postretirement Benefits Other Than Pensions
The Company provides  postretirement  health care and life insurance benefits to
certain  employees.  The  Company  accrues the cost of  postretirement  benefits
within the employees'  active service  periods.  Effective  January 1, 1994, the
Company  limited the extent of its  liability  for future  increases  in medical
costs. When the average annual per retiree claim cost exceeds two times the 1993
per retiree claim cost,  the employer  contribution  will be increased each year
only for general  inflation,  regardless  of the actual  increase in the cost of
providing  medical  benefits.  Based on current medical trend  assumptions,  per
retiree medical claims will reach two times the 1993 level in the year 2000.

The financial status of the plan at December 31, 1997 and 1996 is as follows (in
thousands):

<TABLE>
<CAPTION>

                                                                                1997          1996
                                                                               ------       -------
<S>                                                                          <C>          <C>    
Actuarial present value of accumulated postretirement benefit obligation:      
Retirees                                                                      $26,775      $24,437
Fully eligible, active plan participants                                        5,095        3,051
Other active participants                                                      37,160       33,756
                                                                               ------       ------
                                                                               69,030       61,244
Unrecognized prior service cost                                                 5,564        6,492
Unrecognized net gain                                                           9,490       13,488
                                                                               ------       ------
         Accrued postretirement benefits                                      $84,084      $81,224
                                                                               ======       ======
</TABLE>


The  components  of net periodic  postretirement  benefit  expense for the years
ended December 31 are as follows (in thousands):

<TABLE>
<CAPTION>

                                                                      1997        1996       1995
                                                                     -----       ------     ------ 
<S>                                                                  <C>         <C>       <C>   
Service cost for benefits earned                                     $1,934      $1,890    $1,708
Interest cost on accumulated postretirement benefit obligations       4,529       4,390     4,184
Net amortization and deferral                                        (1,585)     (1,451)   (1,725)
                                                                     ------      ------    ------
          Net periodic postretirement benefit expense                $4,878      $4,829    $4,167
                                                                     ======      ======    ======
</TABLE>



The accumulated  postretirement benefit obligation ("APBO") was determined using
a weighted  average  discount rate of 7.25%,  7.75% and 7.00% for 1997, 1996 and
1995,  respectively.  The assumed  health care cost trend rate used in measuring
the APBO  was 8.5%  declining  by 1.0% per year to an  ultimate  rate of 4.5% in
2001. If the health care cost trend rate  assumptions  were increased by 1%, the
APBO as of  December  31,  1997  and the  combined  service  and  interest  cost
components of  postretirement  benefit  expense for the year then ended would be
increased by approximately $9.2 million and $1.0 million, respectively.

11.  Income Taxes
The  components of income tax expense  (benefit) for the years ended December 31
are as follows (in thousands):

<TABLE>
<CAPTION>

                                                               1997        1996       1995
                                                              ------      ------     ------    
<S>                                                         <C>        <C>          <C>   
Current:
                       Federal                               $   606    $(6,079)     $8,845
                       State and Local                         1,816        786         441
                                                               -----     ------       -----
                                                               2,422     (5,293)      9,286
Deferred:
                       Federal                                    --         --          --
                       State and Local                            --         --          --                                       
                                                               -----      -----       -----                 
                                                              $2,422    $(5,293)     $9,286
                                                              ======     ======       ===== 
</TABLE>


Deferred  tax  assets  and  liabilities  at  December  31  are  as  follows  (in
thousands):

<TABLE>
<CAPTION>

                                                          1997                            1996
                                                          ----                            ----  
                                                 Assets       Liabilities        Assets       Liabilities
                                                ---------     -----------       ---------     -----------   
<S>                                            <C>            <C>               <C>             <C>     
Inventory                                      $    1,429     $        --              --        $  6,890
Property, plant and equipment                          --          55,835              --          57,208
Accrued and other liabilities                       9,268              --       $  12,308              --
Accrued pension costs                               5,447              --           3,046              --
Accrued postretirement costs                       33,634              --          32,489              --
Net operating loss carryforwards                   37,341              --          50,941              --
AMT credit carryforwards                            7,494              --           7,494              --
Other                                                 803              --           1,143
                                                ---------        --------        --------        --------       
           Totals                                $ 95,416         $55,835        $107,421         $64,098
                                                ---------        --------        --------        --------
Net deferred tax asset                             39,581              --         $43,323              --
Valuation allowance                               (39,581)             --         (43,323)             --
                                                ---------        --------        --------        --------
           Net deferred taxes                $         --      $       --    $         --     $        --
                                                =========        ========        ========        ========  
</TABLE>


The Company has  determined  that at December 31, 1997 and 1996,  its ability to
realize  future  benefits  of net  deferred  tax assets  does not meet the "more
likely than not" criteria in SFAS No.109, "Accounting for Income Taxes".

At December 31,  1997,  the Company had net  operating  loss  carryforwards  for
federal tax  purposes of  approximately  $93  million,  which  expire in various
amounts through 2008 and approximately  $7.5 million in alternative  minimum tax
credit  carryforwards  which do not expire.  As a result of the  initial  public
offering during 1995, the Company  experienced an "ownership  change" within the
meaning of Section 382 of the Internal Revenue Code.  Consequently,  the Company
is  subject  to an  annual  limitation  on  the  amount  of net  operating  loss
carryforwards  that can be used to offset taxable income.  The annual limitation
is $9.6  million  plus  certain  gains  included  in  taxable  income  which are
attributable to the Company prior the ownership change.

Reconciliation  of the federal  statutory rate and the effective income tax rate
is as follows:

<TABLE>
<CAPTION>
                                                          1997         1996        1995
                                                         ------        ------      ------ 
<S>                                                        <C>         <C>         <C>  
Federal statutory rate                                     35.0%       35.0%       35.0%
Dividends received deduction                                 --          --        (0.5)
Non-taxable property distribution                            --          --        24.2
Utilization of net operating loss carryforwards           (24.8)      (67.9)      (38.6)
Adjustment of prior year accrual                             --       (34.8)         --
State income taxes, net of federal income tax benefit       9.9         5.1          --
Alternative minimum tax                                     5.2         6.8          --
Other items                                                (4.3)       (0.1)        1.5
                                                          -----       -----        ----                   
          Effective income tax rate                        21.0%      (55.9)%      21.6%
                                                          =====       =====        ====
</TABLE>



12.  Contingencies
The Company's  operations are subject to  increasingly  stringent  environmental
laws  and  regulations  governing  air  emissions,  wastewater  discharges,  the
handling,  disposal  and  remediation  of  hazardous  substances  and wastes and
employee  health and safety.  These laws can impose joint and several  liability
for releases or threatened  releases of hazardous  substances  upon  statutorily
defined parties, including the Company, regardless of fault or the lawfulness of
the  original  activity or  disposal.  The Company  believes it is  currently in
material compliance with applicable environmental laws and regulations.

Future  regulations,  under the Clean Air Act and  otherwise,  are  expected  to
impose  stricter  emission  requirements  on the  aluminum  industry.  While the
Company believes that current pollution control measures at most of the emission
sources at its  facilities  will meet  these  anticipated  future  requirements,
additional  measures  at  some  of  the  Company's  facilities,   including  its
Lewisport, Kentucky ("Lewisport") rolling mill may be required.

The Company has been named as a  potentially  responsible  party at four federal
superfund sites which were acquired in the CasTech acquisition and is conducting
remedial  investigations  and  closure  activities  at two of the sites for past
waste disposal  activity  associated with closed recycling  facilities.  A trust
fund exists to fund the activity at one of the sites undergoing  remediation and
was  established  through  contributions  from two other parties in exchange for
indemnification from further liability. The Company is reimbursed from the trust
fund as approved remediation  expenditures are incurred at the site. The balance
remaining  in the  trust  fund  at  December  31,  1997  was  $2.6  million.  In
determining the adequacy of the Company's  aggregate  environmental  contingency
accrual,  the assets of the trust fund were taken into account. At the two other
federal  superfund  sites,  the  Company is a minor  contributor  and expects to
resolve its  liability  for a nominal  amount.  The  Company is under  orders by
agencies in three states for  environmental  remediation at sites,  two of which
are currently operating and two of which have been closed.  Based upon currently
available  information,  the Company  estimates the range of possible  remaining
losses with respect to the above matters is between $9 million and $13 million.

The Company  acquired  its  Lewisport  rolling  mill and an aluminum  smelter at
Goldendale,  Washington  ("Goldendale"),   from  Lockheed  Martin  in  1985.  In
connection with the transaction, Lockheed Martin indemnified the Company against
expenses relating to environmental matters arising during the period of Lockheed
Martin's ownership of those facilities.

Environmental  sampling at Lewisport has disclosed the presence of contaminants,
including  polychlorinated  biphenyls (PCBs), in a closed Company landfill.  The
Company has not yet determined the extent of the contamination or the nature and
extent of  remedial  measures  that may be  required.  Accordingly,  the Company
cannot at present  estimate the cost of any  remediation  that may be necessary.
Management  believes  the  contamination  is  covered  by  the  Lockheed  Martin
indemnification, which Lockheed Martin disputes.

The aluminum  smelter at Goldendale  was operated by Lockheed  Martin until 1985
and by the  Company  from  1985 to 1987  when it was sold to  Columbia  Aluminum
Corporation  ("Columbia").  Past aluminum smelting activities at Goldendale have
resulted in  environmental  contamination  and  regulatory  involvement.  A 1993
Settlement  Agreement among the Company,  Lockheed Martin and Columbia allocates
responsibility for future remediation at 11 sites at the Goldendale  smelter. If
remediation  is  required,  estimates  by outside  consultants  of the  probable
aggregate  cost to the Company  for these sites range from $1.3  million to $7.2
million.  The apportionment of  responsibility  for other sites at Goldendale is
left to alternative  dispute  resolution  procedures if and when these locations
become the subject of remedial requirements.

The  Company  has  been  named  as a  potentially  responsible  party  at  three
third-party  disposal  sites  relating to Lockheed  Martin  operations for which
Lockheed Martin has assumed responsibility.

The Company's aggregate loss contingency  accrual for environmental  matters was
$10.7 million and $15.2 million at December 31, 1997 and 1996, respectively.  Of
the total  reserve,  $2.5  million  and $3.6  million is  included  in  "accrued
liabilities" in the Company's  consolidated  balance sheets at December 31, 1997
and 1996, respectively, and $8.2 million and $11.6 million is included in "other
long-term liabilities" at December 31, 1997 and 1996, respectively.

While  the  Company  believes  the  overall  accrual  is  adequate  to cover all
environmental  loss  contingencies the Company has determined to be probable and
reasonably estimable, it is not possible to predict the amount or timing of cost
for future environmental matters which may subsequently be determined.  Although
the  outcome of any such  matters,  to the  extent  they  exceed any  applicable
accrual,  could have a material  adverse  effect on the  Company's  consolidated
results of  operations  or cash flows for the  applicable  period,  the  Company
believes  that  such  outcome  will not have a  material  adverse  effect on the
Company's consolidated financial condition, results of operations or cash flows.

The Company  has  incurred  and will  continue  to incur  capital and  operating
expenditures  for matters  relating  to  environmental  control and  monitoring.
Capital expenditures of the Company for environmental control and monitoring for
both 1997 and 1996 were $2.3 million.  All other  environmental  expenditures of
the Company,  including remediation  expenditures,  for 1997, 1996 and 1995 were
$3.1 million, $1.5 million and $1.9 million, respectively.

The Company is also a party to various  non-environmental  legal proceedings and
administrative  actions,  all  arising  from the  ordinary  course of  business.
Although it is  impossible to predict the outcome of any legal  proceeding,  the
Company  believes any liability  that may finally be determined  with respect to
such  legal  proceedings  should  not have a  material  effect on the  Company's
consolidated  financial position,  results of operations or cash flows, although
resolution in any year or quarter could be material to the consolidated  results
of operations for that period.

13.  Stock Incentives
The Company has stock incentive plans covering certain  officers,  key employees
and  directors.  The plans  provide for the grant of options to purchase  common
stock,  the  award of  shares  of  restricted  common  stock  and in the case of
non-employee  directors,  the award of shares of common stock . The total number
of shares available under the plans is 1,200,000.

Activity under the plans is summarized below:

<TABLE>
<CAPTION>
                                                   Options                 Restricted Stock
                                          -----------------------------    ----------------
                                                          Weighted 
                                                           Average
                                          Shares        Exercise Price          Shares              
                                          ----------    ----------------       -------------
<S>                                          <C>                <C>                  <C>                                          
Outstanding December 31, 1994                     --                 --                    --
   Granted                                    72,500             $14.00               202,500
   Exercised                                      --                 --                    --
   Forfeited                                  (3,000)            $14.00               (12,500)
                                           ---------           --------              --------   
Outstanding December 31, 1995                 69,500             $14.00               190,000
   Granted                                   130,500             $16.71                25,000
   Exercised                                      --                 --                    --
   Forfeited                                  (4,000)            $14.00               (17,500)
                                           ---------           --------              --------
Outstanding December 31, 1996                196,000             $15.80               197,500
   Granted                                   203,500             $15.55                 2,500
   Exercised                                  (9,000)            $15.60                    --
   Forfeited                                 (45,500)            $15.60               (22,500)
   Stock no longer restricted                     --                 --                (7,500)
                                           ---------           --------              --------    
Outstanding December 31, 1997                345,000             $15.68               170,000
                                           =========           ========              ========

   (Weighted average contractual
     life of 8.4 years)

Exercisable Options:
   December 31, 1995                              --                 --
   December 31, 1996                           5,500             $14.00
   December 31, 1997                          11,000             $14.75

</TABLE>


The options are issued at the fair value of the underlying  stock on the date of
grant and become  exercisable  three years from the grant date for employees and
one year from the grant date for non-employee directors.  The options expire ten
years  after the date of grant.  The  restricted  stock,  principally  issued in
connection with the initial public  offering,  vests five years from the date of
award. The weighted-average fair value of options granted in 1997, 1996 and 1995
was $6.11,  $4.24 and $3.44 per share,  respectively.  Fair value estimates were
determined  using the  Black-Scholes  option  pricing  model with the  following
weighted average asumptions for 1997, 1996 and 1995:

<TABLE>
<CAPTION>
                                                                      1997          1996           1995
                                                                     ------        ------         ------
<S>                                                                   <C>            <C>           <C>  
Risk-free interest rate                                               6.22%          6.50%         6.50%
Dividend yield                                                        1.29%          1.19%         1.39%
Volatility factor                                                       39%            15%           15%
Expected term of options (in years)                                      5              5             5

</TABLE>


As permitted by Statement of Financial Accounting Standards No. 123, "Accounting
for  Stock-Based  Compensation"  ("SFAS  No.  123"),  the  Company  follows  the
provisions of Accounting  Principles  Board  Opinion 25,  "Accounting  for Stock
Issued to Employees,"  and related  Interpretations  in accounting for its stock
option plans, and accordingly,  no compensation  expense has been recognized for
options  and stock  issued  under  the  plans.  Had  compensation  expense  been
determined  based on the fair  value of the  stock  options  at the  grant  date
consistent  with the  provisions  of SFAS No. 123, the  Company's net income and
basic and diluted net income per share would have been  reduced to the pro forma
amounts which follow:

<TABLE>
<CAPTION>

                                                   1997         1996              1995
                                                  ------       -------           ------ 
<S>                                              <C>          <C>               <C>    
Net income
    As reported                                   $7,941       $13,401           $33,787
    Pro forma                                     $7,592       $13,276           $33,756
Basic net income per share
    As reported                                    $0.68         $1.32             $3.32
    Pro forma                                      $0.65         $1.30             $3.31
Diluted net income per share
    As reported                                    $0.68         $1.32             $3.31
    Pro forma                                      $0.65         $1.30             $3.31

</TABLE>



14.  Net Income Per Share Computations
The following is a reconciliation  of the numerator and denominator of the basic
and diluted per share computations:

<TABLE>
<CAPTION>
                                                                                1997        1996        1995
                                                                               ------      ------      ------   
<S>                                                                           <C>        <C>         <C>     
Income (numerator) amounts used for basic and diluted per share computations:
     Income before extraordinary loss                                          $9,122     $14,756     $33,787
     Extraordinary loss, net of income tax benefit                             (1,181)     (1,355)         -- 
                                                                               ------      ------      ------                     
     Net income                                                                $7,941     $13,401     $33,787
                                                                               ======      ======      ======

Shares (denominator) used for basic per share computations:
     Weighted average shares of common stock outstanding                       11,687      10,197      10,191
                                                                               ======      ======      ======   

Shares (denominator) used for diluted per share computations:
     Weighted average shares of common stock outstanding                       11,687      10,197      10,191
     Plus: dilutive effect of stock options                                        36           6           8
                                                                               ------      ------      ------
           Adjusted weighted average shares                                    11,723      10,203      10,199
                                                                               ======      ======      ======

Net income per share data:
     Basic
           Income before extraordinary loss                                     $0.78       $1.45       $3.32
           Extraordinary loss                                                   (0.10)      (0.13)         --
                                                                                -----       -----       -----
           Net income                                                           $0.68       $1.32       $3.32
                                                                                =====       =====       =====
     Diluted
           Income before extraordinary loss                                     $0.78       $1.45       $3.31
           Extraordinary loss                                                   (0.10)      (0.13)         --
                                                                                -----       -----       ----- 
           Net income                                                           $0.68       $1.32       $3.31
                                                                                =====       =====       =====
</TABLE>


15.  Lease Commitments
Certain  property,  plant and  equipment are leased under  noncancelable  leases
which provide for minimum rental payments as follows (in thousands):

1998                                                                  $2,205
1999                                                                   2,277
2000                                                                   2,173
2001                                                                   1,710
2002                                                                   1,510
2003-2006                                                              2,464

Rental expense under cancelable and noncancelable leases for 1997, 1996 and 1995
was $3.0 million, $1.2 million and $0.8 million, respectively.

16. Selected  Quarterly  Financial Data (unaudited) All amounts are in thousands
except net income per share.

<TABLE>
<CAPTION>

                                                                             Quarter
                                                          -----------------------------------------------
                                                              1st          2nd         3rd          4th
                                                           --------     --------    --------     --------
1997
----
<S>                                                        <C>          <C>         <C>          <C>     
Net sales                                                  $272,191     $287,240    $271,142     $260,204
Gross profit                                                 24,046       24,247      21,155       18,595
Income before extraordinary loss                              2,168        4,163       1,590        1,201
Net income                                                    2,168        4,163         409        1,201
Net income per share data:
    Basic
         Income before extraordinary loss                      0.21         0.41        0.15         0.08
         Net income                                            0.21         0.41        0.04         0.08
    Diluted
         Income before extraordinary loss                      0.21         0.41        0.15         0.08
         Net income                                            0.21         0.41        0.04         0.08

1996
----
Net sales                                                  $167,544     $159,672    $170,052     $241,950
Gross profit                                                  9,811        8,870      10,570       20,061
Income before extraordinary loss                              2,393        2,102       4,634        5,627
Net income                                                    2,393        2,102       3,279        5,627
Net income per share data:
    Basic
         Income before extraordinary loss                      0.23         0.21        0.45         0.55
         Net income                                            0.23         0.21        0.32         0.55
    Diluted
         Income before extraordinary loss                      0.23         0.21        0.45         0.55
         Net income                                            0.23         0.21        0.32         0.55

</TABLE>

Fourth  quarter  1996 net income  includes a $1.1  million  increase  in pre-tax
income as a result of adjustments to certain  compensation-related  expenses. In
addition,  the Company  recognized  an income tax  benefit of $5.0  million as a
result of revisions to prior-year tax estimates and adjustments to the estimated
utilization of net operating loss carryforwards.

<PAGE>


                          Commonwealth Industries, Inc.
                        Report of Independent Accountants

Board of Directors and Stockholders
Commonwealth Industries, Inc.

         We  have  audited  the  accompanying   consolidated  balance  sheet  of
Commonwealth Industries, Inc., and Subsidiaries as of December 31, 1997 and 1996
and the related consolidated statements of income, stockholders' equity and cash
flows for each of the three years in the period ended  December 31, 1997.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

         In our opinion,  the  financial  statements  referred to above  present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
Commonwealth  Industries,  Inc., and Subsidiaries at December 31, 1997 and 1996,
and the  consolidated  results of their operations and their cash flows for each
of the three years in the period  ended  December  31, 1997 in  conformity  with
generally accepted accounting principles.

                                                     COOPERS & LYBRAND L.L.P.

Louisville, Kentucky
February 6, 1998