Exhibit 13
                                                                   ----------
Portions of the annual report to  stockholders  for the year ended  December 31,
1999 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,
1999.


                                          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 16
                                  and Results of Operations

            Part II, item 7A   Quantitative and Qualitative            pages 14
                                  Disclosures About Market Risk        thru 15

  (C)       Part II, item 8    Consolidated Balance Sheet              page 17

            Part II, item 8    Consolidated Statement of Income        page 18

            Part II, item 8    Consolidated Statement of               page 18
                                  Comprehensive Income

            Part II, item 8    Consolidated Statement of               page 19
                                  Changes in Stockholders'
                                  Equity

            Part II, item 8    Consolidated Statement of               page 20
                                  Cash Flows

            Part II, item 8    Notes to Consolidated                   pages 21
                                  Financial Statements                 thru 41

            Part II, item 8    Report of Independent Auditors          page 42

The items follow:
<PAGE>
                                                     Exhibit 13 item (A)
                                                     -------------------

                          COMMONWEALTH INDUSTRIES, INC.
                      Consolidated Selected Financial Data
                      (in thousands except per share data)
<TABLE>
<CAPTION>

                                                                           Year ended December 31,
                                   -----------------------------------------------------------------------------------------------
                                         1999                1998                 1997                 1996                1995
                                   --------------      --------------       --------------       -------------       -------------
<S>                                  <C>                   <C>                 <C>                  <C>                 <C>
Statement of Income Data:
Net sales                             $ 1,045,916           $ 967,949           $1,090,777           $ 739,218           $ 671,501
Gross profit                               86,865              69,455               88,043              49,312              64,750
Operating income                           28,440              21,421               41,593              19,262              42,240
Income before extraordinary loss           11,011                 143                9,122              14,756              33,787
Net income (1)                             11,011                 143                7,941              13,401              33,787

Net income per share data (1):
  Basic
    Income before extraordinary loss       $ 0.68              $ 0.01               $ 0.78              $ 1.45              $ 3.32
    Extraordinary loss                          -                   -                (0.10)              (0.13)                  -
                                   --------------      --------------       --------------       -------------       -------------
      Net income                           $ 0.68              $ 0.01               $ 0.68              $ 1.32              $ 3.32
                                   ==============      ==============       ==============       =============       =============

  Diluted
    Income before extraordinary loss       $ 0.68              $ 0.01               $ 0.78              $ 1.45              $ 3.31
    Extraordinary loss                          -                   -                (0.10)              (0.13)                  -
                                   --------------      --------------       --------------       -------------       -------------
      Net income                           $ 0.68              $ 0.01               $ 0.68              $ 1.32              $ 3.31
                                   ==============      ==============       ==============       =============       =============

  Cash dividends paid per share            $ 0.20              $ 0.20               $ 0.20              $ 0.20              $ 0.15

Operating Data:
Depreciation and amortization            $ 36,513            $ 34,728             $ 34,710            $ 22,452            $ 18,600
Capital expenditures                     $ 36,715            $ 33,650             $ 21,736            $ 14,841            $ 15,153
Commonwealth Aluminum business unit:
     Net sales                          $ 922,298           $ 846,696            $ 964,012           $ 704,400           $ 671,501
     Shipments (pounds)                 1,022,680             884,169              990,207             712,480             587,932
Alflex business unit:
     Net sales                          $ 123,618           $ 121,253            $ 126,765            $ 34,818
     Shipments (feet)                     576,205             517,380              521,711             136,936

Balance Sheet Data:
Working capital                         $ 123,067           $ 115,192            $ 112,924           $ 207,061           $ 153,292
Total assets                              706,322             648,399              667,421             794,582             420,684
Total debt                                125,000             125,000              125,650             342,250              48,375
Total stockholders' equity                336,676             326,529              330,473             227,223             213,063

(1)  1999 net income and net income per share were  decreased  by $12.1  million
     and $0.74  per  share,  respectively,  due to the  Company's  change in its
     inventory  accounting method from first-in,  first-out (FIFO) method to the
     last-in, first-out (LIFO) method.
</TABLE>
<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,  1999,  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, 1999 and the notes  thereto.  The following  discussion
contains statements which are forward-looking rather than historical fact. These
forward-looking  statements  are made pursuant to the safe harbor  provisions of
Section  27A of the  Securities  Act of 1933,  as amended and Section 21E of the
Securities  Exchange  Act, as amended 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,  the
success of the Company in implementing its business strategy, 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  commodities  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.
         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.  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
based on firm-priced sales and purchase orders.
         During  1999,  net  sales  of the  Company's  aluminum  sheet  products
increased by 9% from the year 1998 and shipment volume  increased 16% over 1998.
The increased  shipments were made possible by capital projects at the Company's
Uhrichsville,  Ohio  rolling  mill  and  productivity  gains  at  the  Company's
Lewisport,  Kentucky  rolling  mill.  While  overall  demand for aluminum  sheet
products remained strong,  material margins during 1999 declined from the fourth
quarter of 1998 levels due to higher  acquisition costs for scrap aluminum.  The
Company  increased its maintenance  spending in its aluminum  operations  during
1999, especially in the hot mill department, to support higher volumes, increase
machine  reliability,  and increase  the  probability  of excellent  quality and
service to the Company's customers.
         Demand  for  the  Company's   electrical  conduit  and  cable  products
continued  to be strong in 1999;  however,  the  supply  of these  products  has
increased as a result of expansions of existing  production by competitors,  and
the entry of new participants into the market. As a result, material margins for
the Company's  electrical  conduit and cable  products have come under  pressure
during 1999 and are below the levels achieved in 1998.  Demand for the Company's
armored  cable  products,  in  particular,  continues to be strong.  Value added
products  such as MC cable  represented  a higher  ratio of Alflex's  1999 sales
compared to 1998. Other factors which  contributed to the lower material margins
were the normal operational  challenges associated with opening a new plant (the
Company  opened a new plant in Rocky  Mount,  North  Carolina  during the second
quarter of 1999) and the disruptions  caused by Hurricane  Floyd.  The new plant
increased  production  capacity of electrical  conduit and cable products by 50%
and enhanced the Company's  competitive position by placing that capacity closer
to attractive markets along the eastern United States.
         Effective January 1, 1999, the Company changed its inventory accounting
method for certain inventories from the first-in, first-out (FIFO) method to the
last-in,  first-out  (LIFO)  method and  modified the LIFO  calculation  for the
inventories  historically  recorded under the LIFO method.  The Company believes
the adoption of the LIFO method for all aluminum sheet inventories is preferable
as LIFO is the  inventory  method most  prevalent  in the  industry,  provides a
consistent  inventory  accounting  method for aluminum  sheet  inventories,  and
results in more  appropriate  matching of cost of goods sold with related  sales
revenues.
         The effect of this change in  accounting  principle was to decrease net
income  reported for the twelve months ended December 31, 1999 by $12.1 million,
or $0.74 per share.  See note 3 to the  consolidated  financial  statements  for
additional information.

Results of Operations for 1999, 1998 and 1997
         Net Sales. Net sales for 1999 increased 8% to $1.05 billion  (including
$123.6 million from the Company's Alflex  electrical  products  subsidiary) from
$967.9 million  (including  $121.3 million from Alflex) in 1998. The increase is
due to higher  shipments which was partially offset by lower aluminum and copper
prices.  Unit sales volume of aluminum  products  increased  16% to 1.02 billion
pounds in 1999 from 884.2 million  pounds in 1998.  Alflex unit sales volume was
576.2 million feet for 1999 compared to 517.4 million feet for 1998.
         In 1998 net sales  decreased 11% to $967.9  million  (including  $121.3
million from Alflex) from $1.09 billion  (including  $126.8 million from Alflex)
in 1997. The decrease is due to reduced sales volume at the Lewisport mill which
was partially offset by volume increases at the Company's other facilities. Unit
sales volume of aluminum products  decreased 11% to 884.2 million pounds in 1998
from 990.2 million pounds in 1997.  Lower sales and shipment  volume were caused
by production problems primarily relating to higher internal rejection rates and
lower  production  levels  in  anticipation  of  a  possible  work  stoppage  in
connection with the expiration of the Company's collective  bargaining agreement
in July 1998 at the Company's Lewisport mill. Additionally 1998 sales volumes at
the Company's continuous cast aluminum sheet operations were only slightly above
1997's level due to tighter inventory  management by customers and unusually wet
weather that reduced construction activity in various parts of the United States
in the first half of 1998.  Alflex unit sales volume was 517.4  million feet for
1998 compared to 521.7 million feet for 1997.
         Gross Profit. Gross profit increased 25% (to 8.3% of net sales) in 1999
after a 21%  decrease  (to 7.2% of net  sales) in 1998.  The 1999  increase  was
attributable  to  increased  sales  volume  which more than offset the effect of
lower unit sales prices and slightly lower material  margins.  The 1998 decrease
was  attributable to decreased  sales volume due to the reasons  outlined in the
"net sales" section.  The Company's unit manufacturing  costs decreased compared
to the same  period in 1998 as a result  of the  higher  volumes.  For 1998 unit
manufacturing  costs increased compared to 1997 as a result of the lower volumes
which more than  offset any  efficiencies  due to mill  optimization  practices.
Material  margins  which were higher in 1998 than in 1997  partially  offset the
impact of lower volumes.
         Selling,  General and  Administrative  Expenses.  Selling,  general and
administrative  expenses  increased 23.9% in 1999.  Contributing to the increase
were increases at Alflex associated with the infrastructure  required to support
the  growth of this  business  segment,  increased  costs  related  to Year 2000
compliance,  a new variable compensation plan, a new executive compensation plan
related  to  the  Company's  executive  stock  purchase  incentive  program  and
additional office expenses due to renovation and expansion of office facilities.
Selling,   general  and   administrative   expenses   increased  3.8%  in  1998.
Contributing  to the  increase  were  increases  at Alflex  associated  with the
infrastructure  required to support the growth of this business  segment,  costs
incurred in acquisitions  which did not  materialize,  expenses  incurred at the
Lewiport mill in anticipation of a possible strike and certain expenses relating
to the  Company's  Year 2000  remediation  effort.  The  realization  of various
operating synergies envisioned at the time of the CasTech acquisition  continued
to contribute to holding the 1998 increase down.
         Amortization of Goodwill.  Amortization of goodwill, which relates to
a previous acquisition, was $4.5 million in 1999, 1998 and 1997.
         Operating  Income.  Operating  income increased by 33% in 1999 to $28.4
million,  compared  with a 1998 decrease of 48% to $21.4  million,  in each case
reflecting the factors mentioned above.
         Other  Income  (Expense),  Net.  Other  income  (expense),  net in 1999
includes  $1.9 million of income  related to  insurance  claims filed for a fire
that destroyed an inactive  production  facility.  The Company had received $1.0
million  of the  total  insurance  proceeds  as of  December  31,  1999 with the
remainder expected to be received during the first quarter of 2000.
         Interest Expense,  Net. Interest expense in 1999 decreased 13% to $19.3
million  from $22.2  million in 1998.  The  decrease in the  Company's  interest
expense is  primarily  due to the  reduction  in amounts  outstanding  under the
Company's accounts receivable securitization facility.  Interest expense in 1998
decreased 27% to $22.2 million from $30.5 million in 1997.  The 1998 decrease in
the Company's  interest expense was due to the reduction in borrowing  resulting
from the Company's  September 1997 equity offering coupled with reduced interest
rates due to the accounts receivable securitization facility also implemented in
September  1997. Both  transactions  are described in the "Liquidity and Capital
Resources" section which follows.
         Income Tax Expense  (Benefit).  Income tax expense  (benefit)  in 1999,
1998 and 1997  reflect  the use of the  Company's  net  operating  loss  ("NOL")
carryforwards  to offset  taxable  income for federal  income tax  purposes.  At
December 31, 1999,  the Company had  remaining  available NOL  carryforwards  of
approximately  $71  million.  These NOL  carryforwards  will  expire in  various
amounts  through  2008.  The amount of taxable  income that can be offset by NOL
carryforwards  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.
         The Company  recognized  an income tax expense of $1.0  million in 1999
compared to an income tax benefit of $0.6 million in 1998.  The change is due to
the  increase  in the  Company's  taxable  income and a $1.5  million  favorable
adjustment  recorded  in the  first  quarter  of 1998 to the  prior  year's  tax
expense.  The adjustment  resulted from the filing of amended federal income tax
returns for prior years.
         Extraordinary  Loss  on  Early  Extinguishment  of  Debt.  The  Company
recorded an extraordinary  loss on the early  extinguishment  of debt in 1997 of
$1.5 million ($1.2 million net of income tax benefit).
         Net Income.  Net income for 1999  increased to $11.0  million from $0.1
million in 1998,  after 1998 net income had decreased from $7.9 million reported
in 1997, 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,  the
Company's  accounts  receivable  securitization  facility  described  below  and
borrowings  under  its $100  million  revolving  credit  facility.  The  Company
believes  these  sources  will  be  sufficient  to  fund  its  working   capital
requirements,  capital  expenditures,  debt service and dividend payments for at
least through 2000.
         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 sells, on a
revolving  basis,  an  undivided  interest  in  certain of its  receivables  and
receives 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, 1999,  the Company had  outstanding
$106.0  million  under the  agreement  and had  $39.9  million  of net  residual
interest  in the  securitized  receivables.  The net  residual  interest  in the
securitized  receivables  is included in other  current  assets in the Company's
consolidated financial statements.
         The Company's  cash flows from  operations in 1999,  1998 and 1997 were
$38.8 million, $46.6 million and $134.7 million,  respectively.  The increase in
cash flow from  operations in 1997 was due primarily to the accounts  receivable
securitization. Working capital increased to $123.1 million at December 31, 1999
from $115.2 million at December 31, 1998.  Working  capital  increased to $115.2
million at December 31, 1998 from $112.9 million at December 31, 1997.
         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,
1999, $99.2 million was available. The facility expires on September 1, 2002.
         Capital  expenditures  were  $36.7  million,  $33.7  million  and $21.7
million  in 1999,  1998 and  1997,  respectively,  and are  estimated  to be $39
million in 2000, all generally  related to upgrading and expanding 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 $3.3 million.

Risk Management
         Commodity  Price Risk. The price of aluminum is subject to fluctuations
due to  unpredictable  factors on the  worldwide  market.  To reduce this market
risk,  the Company  follows the policy of hedging its  anticipated  raw material
requirements  based on  firm-priced  sales  and  purchase  orders.  The  Company
purchases and sells futures  contracts and options on the London Metal  Exchange
("LME") based on its net metal position.  The Company's metal position  consists
of inventories, purchase commitments,  committed and anticipated sales, which is
hedged  using LME futures  contracts  and options.  At December  31,  1999,  the
Company held  purchase and sales  commitments  through 2000 totaling $69 million
and $276 million, respectively.
         The change in market value of such LME contracts has a high correlation
to the price  changes of the hedged  commodity  (aluminum  scrap and ingot).  To
obtain a matching of revenues and expenses realized gains or losses arising from
LME  contracts  are  included  in  inventories  as a cost of raw  materials  and
reflected in the consolidated  statement of income when the product is sold. The
Company had  deferred  realized  losses of $0.7  million and $2.2  million as of
December  31,  1999 and 1998,  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.
         The Company also uses futures contracts to manage risks associated with
its  natural gas  requirements.  At  December  31,  1999 and 1998,  the Company
had open aluminum futures contracts and options and natural gas futures with a
fair value of $88.0 million and $100.4  million,  respectively.  The Company had
net unrealized  gains of $7.9 million and net unrealized  losses of $5.6 million
as of December 31, 1999 and 1998, respectively,  on these open futures contracts
and options.
         Net  unrealized  gains and losses on open futures and option  contracts
are  recorded  in the  consolidated  balance  sheet as accrued  liabilities  and
prepayments and other current assets,  respectively.  The net unrealized gain of
$7.9  million and net  unrealized  loss of $5.6 million at December 31, 1999 and
1998,  respectively,  consists  of  unrealized  gains due from  brokers of $10.9
million and $4.1 million,  respectively, and unrealized losses due to brokers of
$3.0 million and $9.7 million,  respectively.  Futures contracts and options are
valued at the closing price on the last business day of the year.
         A  sensitivity  analysis has been  prepared to estimate  the  Company's
exposure to market risk related to its LME position. Market risk is estimated as
the  potential  loss in fair value  resulting  from a  hypothetical  10% adverse
change in the price of the futures  contract.  On December  31, 1999 the Company
had approximately 47,325 metric tonnes of LME futures contracts.  A hypothetical
10 % change from the 1999  year-end  three-month  high grade  aluminum  price of
$1,655 per metric  tonne would  result in a change in fair value of $7.8 million
in these contracts. However it should be noted that any change in the fair value
of these contracts would be  significantly  offset with an inverse change in the
cost of purchased metal.
         Also,  a  sensitivity  analysis  has  been  prepared  to  estimate  the
Company's  exposure  to market  risk  related to its NYMEX Henry Hub natural gas
futures.  Market risk is estimated as the potential loss in fair value resulting
from a hypothetical 10% adverse change in the price of the futures contract.  On
December  31, 1999 the Company had  approximately  960,000  thousand  cubic feet
(MCF) of NYMEX  futures  contracts.  A  hypothetical  10 % change  from the 1999
year-end  three-month  natural  gas price of $2.3285  per MCF would  result in a
change in fair value of $0.2  million in these  contracts.  However it should be
noted  that  any  change  in  the  fair  value  of  these   contracts  would  be
significantly offset with an inverse change in the cost of purchased gas.
         Credit Risk.  As discussed  previously,  the Company  utilizes  futures
contracts and options to protect  against  exposures to commodity  price risk in
the aluminum  and natural gas  markets.  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.  In addition,  all brokers
trading on the LME 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, 1999, credit lines totaling
$62 million were available at various brokerages used by the Company.
         Interest Rate Risk. The Company  manages its ratio of fixed to floating
rate debt with the  objective  of  achieving a mix that  management  believes is
appropriate.  To manage this mix in a cost-effective  manner, the Company,  from
time to time,  enters into interest rate swap  agreements.  At December 31, 1999
the Company  had an interest  rate swap  contract  with a notional  amount of $5
million.  With  respect  to this  agreement,  the  Company  pays a fixed rate of
interest and receives a  LIBOR-based  floating  rate.  The  counterparty  to the
interest rate contract is a major  commercial bank and management  believes that
losses  related to credit risk are remote.  The fair value of this interest rate
swap agreement at December 31, 1999 was a liability of $0.09 million.
         A  sensitivity  analysis has been  prepared to estimate  the  Company's
exposure to market risk related to its interest  rate  position.  Market risk is
estimated as the potential loss in fair value resulting from a hypothetical  100
basis  point  change  in  interest  rates  relating  to the  interest  rate swap
agreement.  A hypothetical 100 basis point change in interest rates would result
in a change in fair value of $0.05 million in the interest rate swap agreement.

Year 2000 Readiness Disclosure
         During 1999, the Company  completed a company-wide  program to make its
computer  systems  Year 2000  compliant.  The year 2000  issue 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 have  recognized  a date  using "00" as the year 1900  rather  than the year
2000. This could have resulted in a major system failure or miscalculations.
         As of December 31, 1999, 100 percent of the Company's computer systems,
which  includes  mainframe,  server,  desktop and portable  computers,  embedded
systems,  in  addition  to  the  core  business  applications,  were  Year  2000
compliant. The total cost of the program was $8.0 million and was funded through
operating  cash  flows.  Maintenance  or  modification  costs were  expensed  as
incurred,  while  the  cost of  systems  being  replaced  were  capitalized  and
amortized  over the new system's  useful life.  Due to these  modifications  and
replacements, the year 2000 issues did not pose significant operational problems
for the Company.
         The  Company  has  notified  recipients  of  previously  made Year 2000
statements that these statements, and any other Year 2000 statements released by
the Company, are retroactively  identified and labeled in their entirety as Year
2000 Readiness Disclosures pursuant to Section 7(b) of the Year 2000 Information
and Readiness  Disclosure  Act of 1998. By doing so, these prior  statements are
relieved from tort liability.

Recently Issued Accounting Pronouncements
         In June 1998, the Financial Accounting Standards Board issued Statement
of  Financial   Accounting   Standards  No.  133,   "Accounting  for  Derivative
Instruments and Hedging Activities" ("SFAS No. 133"). The Statement  establishes
accounting and reporting  standards  requiring that every derivative  instrument
(including  certain  derivative  instruments  embedded  in other  contracts)  be
recorded on the balance  sheet as either an asset or  liability  measured at its
fair value. The Statement  requires that changes in the derivative's  fair value
be recognized  currently in net income unless specific hedge accounting criteria
are met. Special  accounting for qualifying  hedges allows a derivative's  gains
and losses to offset related results on the hedged item in the income statement,
and requires  that a company must  formally  document,  designate and assess the
effectiveness  of  transactions  that  receive  hedge  accounting.  The  Company
currently  expects to adopt SFAS No. 133 in the  Company's  first  quarter  2001
reporting,  as required by the Financial  Accounting Standards Board's Statement
of Financial Accounting Standard No. 137, issued in June 1999, which defers SFAS
No. 133's  effective  date by one year.  Management is currently  evaluating the
impact of SFAS No. 133 on the Company's future financial reporting.
<PAGE>
                                                     Exhibit 13 item (C)
                                                     -------------------
                          COMMONWEALTH INDUSTRIES, INC.
                           Consolidated Balance Sheet
                        (in thousands except share data)
<TABLE>
<CAPTION>
                                                                                    December 31,
                                                                        --------------------------------------
                                                                            1999                     1998
                                                                        -------------            -------------
<S>                                                                       <C>                     <C>
Assets
Current assets:
          Cash and cash equivalents                                        $       -               $        6
          Accounts receivable, net                                               118                      228
          Inventories                                                        207,413                  174,968
          Prepayments and other current assets                                53,821                   25,367
                                                                        -------------            -------------
               Total current assets                                          261,352                  200,569
Property, plant and equipment, net                                           275,531                  269,837
Goodwill, net                                                                164,610                  169,086
Other noncurrent assets                                                        4,829                    8,907
                                                                        -------------            -------------
               Total assets                                                $ 706,322                $ 648,399
                                                                        =============            =============

Liabilities
Current liabilities:
          Outstanding checks in excess of deposits                         $   1,188                $       -
          Accounts payable                                                    97,937                   54,244
          Accrued liabilities                                                 39,160                   31,133
                                                                        -------------            -------------
               Total current liabilities                                     138,285                   85,377
Long-term debt                                                               125,000                  125,000
Other long-term liabilities                                                    8,412                    8,859
Accrued pension benefits                                                      12,482                   15,930
Accrued postretirement benefits                                               85,467                   86,704
                                                                        -------------            -------------
               Total liabilities                                             369,646                  321,870
                                                                        -------------            -------------

Commitments and contingencies                                                      -                        -

Stockholders' Equity
     Common stock, $0.01 par value, 50,000,000 shares authorized,
          16,606,000 and 15,944,000 shares outstanding at
          December 31, 1999 and 1998, respectively                               166                      159
     Additional paid-in capital                                              409,062                  398,794
     Accumulated deficit                                                     (61,866)                 (69,621)
     Unearned compensation                                                      (175)                    (672)
     Notes receivable from sale of common stock                              (10,511)                       -
     Accumulated other comprehensive income:
         Minimum pension liability adjustment                                      -                   (2,131)
                                                                        -------------            -------------
               Total stockholders' equity                                    336,676                  326,529
                                                                        -------------            -------------
               Total liabilities and stockholders' equity                  $ 706,322                $ 648,399
                                                                        =============            =============
</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,
                                                                    -------------------------------------------------------
                                                                        1999                1998                 1997
                                                                    -------------      ---------------       --------------
<S>                                                                   <C>                   <C>                 <C>
Net sales                                                             $1,045,916            $ 967,949           $1,090,777
Cost of goods sold                                                       959,051              898,494            1,002,734
                                                                    -------------      ---------------       --------------
     Gross profit                                                         86,865               69,455               88,043
Selling, general and administrative expenses                              53,949               43,558               41,972
Amortization of goodwill                                                   4,476                4,476                4,478
                                                                    -------------      ---------------       --------------
     Operating income                                                     28,440               21,421               41,593
Other income (expense), net                                                2,861                  365                  487
Interest expense, net                                                    (19,333)             (22,221)             (30,536)
                                                                    -------------      ---------------       --------------
     Income (loss) before income taxes and extraordinary loss             11,968                 (435)              11,544
Income tax expense (benefit)                                                 957                 (578)               2,422
                                                                    -------------      ---------------       --------------
     Income before extraordinary loss                                     11,011                  143                9,122
Extraordinary loss on early extinguishment of debt,
     net of income tax benefit                                                 -                    -               (1,181)
                                                                    -------------      ---------------       --------------
     Net income                                                         $ 11,011                $ 143              $ 7,941
                                                                    =============      ===============       ==============

Basic and diluted per share data:
     Income before extraordinary loss                                     $ 0.68               $ 0.01               $ 0.78
     Extraordinary loss                                                        -                    -                (0.10)
                                                                    -------------      ---------------       --------------
     Net income                                                           $ 0.68               $ 0.01               $ 0.68
                                                                    =============      ===============       ==============

Weighted average shares outstanding
     Basic                                                                16,224               15,944               11,687
     Diluted                                                              16,281               15,947               11,723
</TABLE>
                 See notes to consolidated financial statements.
<PAGE>
                          COMMONWEALTH INDUSTRIES, INC.
                 Consolidated Statement of Comprehensive Income
                                 (in thousands)
<TABLE>
<CAPTION>

                                                                           Year ended December 31,
                                                             -----------------------------------------------------
                                                                 1999                1998                1997
                                                             --------------     ---------------       ------------
<S>                                                               <C>                <C>                 <C>
Net income                                                        $ 11,011            $    143            $ 7,941
Other comprehensive income, net of tax:
     Minimum pension liability adjustment                            2,131              (1,435)              (696)
                                                             --------------     ---------------       ------------
Comprehensive income (loss)                                       $ 13,142            $ (1,292)           $ 7,245
                                                             ==============     ===============       ============
</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>

                                                                                                           Accumulated
                                                                                                               Other
                                                                                                           Comprehensive
                                                                                                 Notes      Income:
                                       Common Stock                                            Receivable    Minimum
                                  --------------------    Additional                           from Sale   Pension       Total
                                   Number of               Paid-in   Accumulated  Unearned     of Common  Liability  Stockholders'
                                    Shares       Amount    Capital    Deficit   Compensation     Stock     Adjustment    Equity
                                  ------------- --------  ----------- ---------- ------------ ----------  ----------  ----------
<S>                                 <C>           <C>    <C>        <C>           <C>         <C>         <C>         <C>
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 liability 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
Net income                                    -        -          -        143           -           -          -            143
Cash dividends, $0.20 per share               -        -          -     (3,189)          -           -          -         (3,189)
Minimum pension liability adjustment          -        -          -          -           -           -     (1,435)        (1,435)
Forfeiture of restricted stock           (2,500)       -        (35)         -          35           -          -              -
Amortization of unearned compensation         -        -          -          -         465           -          -            465
Stock awards                              5,000        -         72          -           -           -          -             72
                                   ------------ --------   --------   --------    --------   ----------    --------    ---------
Balance December 31, 1998            15,944,000      159    398,794    (69,621)       (672)          -     (2,131)       326,529
Net income                                    -        -          -     11,011           -           -          -         11,011
Cash dividends, $0.20 per share               -        -          -     (3,256)          -           -          -         (3,256)
Minimum pension liability adjustment          -        -          -          -           -           -      2,131          2,131
Forfeiture of restricted stock          (20,000)       -       (280)         -         280           -          -              -
Amortization of unearned compensation         -        -          -          -         217           -          -            217
Stock awards                              5,000        -         44          -           -           -          -             44
Common stock issued                     677,000        7     10,504          -           -     (10,511)         -              -
                                    ----------- --------   --------   --------    --------   ----------    --------    ---------
Balance December 31, 1999            16,606,000   $  166  $ 409,062   $(61,866)     $ (175)   $(10,511)    $    -      $ 336,676
                                    =========== ========  =========   ========    ========   ==========    ========    =========
</TABLE>
                 See notes to consolidated financial statements.
<PAGE>
                          COMMONWEALTH INDUSTRIES, INC.
                      Consolidated Statement of Cash Flows
                                 (in thousands)
<TABLE>
<CAPTION>
                                                                                            Year ended December 31,
                                                                               ---------------------------------------------------
                                                                                  1999                1998               1997
                                                                               ------------       -------------       ------------
<S>                                                                               <C>                <C>                 <C>
Cash flows from operating activities:
   Net income                                                                      $11,011            $    143            $ 7,941
   Adjustments to reconcile net income to net cash provided by operations:
        Depreciation and amortization                                               36,513              34,728             34,710
        Extraordinary loss on early extinguishment of debt                               -                   -              1,495
        Loss on disposal of property, plant and equipment                              389               1,453              1,271
        Issuance of common stock in connection with stock awards                        44                  72                 84
        Proceeds from the initial sale of accounts receivable                            -                   -            150,000
        Changes in assets and liabilities:
             Decrease (increase) in accounts receivable, net                           110                 127            (46,650)
             (Increase) decrease in inventories                                    (32,445)             (3,335)             2,278
             (Increase) decrease in prepayments and other current assets           (28,454)             19,740              6,970
             Decrease in other noncurrent assets                                     2,878                 398                201
             Increase (decrease) in accounts payable                                43,693             (13,637)           (14,459)
             Increase (decrease) in accrued liabilities                              8,027               3,965             (9,183)
             (Decrease) increase in other liabilities                               (3,001)              2,931                 13
                                                                               ------------       -------------       ------------
                 Net cash provided by operating activities                          38,765              46,585            134,671
                                                                               ------------       -------------       ------------
Cash flows from investing activities:
   Net cash and cash equivalents (outflow) from acquisition                              -                   -             (2,894)
   Purchases of property, plant and equipment                                      (36,715)            (33,650)           (21,736)
   Proceeds from sale of property, plant and equipment                                  12                  32                 28
                                                                               ------------       -------------       ------------
        Net cash (used in) investing activities                                    (36,703)            (33,618)           (24,602)
                                                                               ------------       -------------       ------------
Cash flows from financing activities:
   Increase (decrease) in outstanding checks in excess of deposits                   1,188              (9,122)             9,122
   Proceeds from long-term debt                                                     46,770              45,150            294,950
   Repayments of long-term debt                                                    (46,770)            (45,800)          (511,550)
   Proceeds from issuance of common stock                                                -                   -             97,793
   Cash dividends paid                                                              (3,256)             (3,189)            (2,328)
                                                                               ------------       -------------       ------------
        Net cash (used in) financing activities                                     (2,068)            (12,961)          (112,013)
                                                                               ------------       -------------       ------------
Net (decrease) increase in cash and cash equivalents                                    (6)                  6             (1,944)
Cash and cash equivalents at beginning of period                                         6                   -              1,944
                                                                               ------------       -------------       ------------
Cash and cash equivalents at end of period                                        $      -            $      6           $      -
                                                                               ============       =============       ============
Supplemental disclosures:
    Interest paid                                                                 $ 19,672            $ 22,385           $ 27,046
    Income taxes paid (refund received)                                              2,412                 (10)            (1,407)
Non-cash activities:
    Issuance of common stock for notes receivable                                 $ 10,511            $      -           $      -
</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 two business  segments.  The aluminum  segment  manufactures  aluminum
sheet  for  distributors  and the  transportation,  construction,  and  consumer
durables end-use markets. The electrical conduit segment  manufactures  flexible
electrical wiring products for the commercial and do-it-yourself markets.

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.

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. 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 3.

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 $14.7 million and $10.2 million at December 31, 1999 and 1998,
respectively.

The Company periodically evaluates the carrying value of long-lived assets to be
held and used, including goodwill and other intangible assets. 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 in
accordance  with the provisions of Statement of Financial  Accounting  Standards
No. 121,  "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of". In performing the  evaluation,  the estimated  future
undiscounted  cash flows  associated  with the asset are compared to the assets'
carrying  amount to determine if a write-down to fair 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.  In very rare  instances,  title could pass
prior to shipment.  The  Company's  policy  states that title  passing  prior to
shipment is only acceptable if a written request on the customer's letterhead is
received and the customer must have a substantial  business purpose for ordering
on a bill and hold basis.  The customer's  written  request has to  specifically
state that the customer accepts full legal ownership, including risk of loss, of
the  product on the date of  billing.  As further  evidence of the bill and hold
basis,  payment is expected within terms of the pre-bill and not the actual ship
dates.

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.

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.  Liabilities for remediation costs and post-remediation monitoring are
recorded  when they are probable and  reasonably  estimable.  The  liability may
include  costs  such  as  environmental   site  evaluations,   consultant  fees,
feasibility studies,  outside contractor and monitoring expenses. The assessment
of this liability is calculated  based on existing  technology,  considers funds
available  in the  settlement  trust  discussed in Note 11, does not reflect any
offset for possible recoveries from insurance companies and is not discounted.

2.  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, 1999 and 1998, the Company had outstanding  under the
agreement $106.0 million and $120.2 million, respectively, and had $39.9 million
and $15.9 million,  respectively,  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 $1.9  million and $2.5 million at
December 31, 1999 and 1998, respectively, 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.

3.  Inventories
Effective  January 1, 1999, the Company changed its inventory  accounting method
for  certain  inventories  from the  first-in,  first-out  (FIFO)  method to the
last-in,  first-out  (LIFO)  method and  modified the LIFO  calculation  for the
inventories  historically  recorded under the LIFO method.  The Company believes
the adoption of the LIFO method for all aluminum sheet inventories is preferable
as LIFO is the  inventory  method most  prevalent  in the  industry,  provides a
consistent  inventory  accounting  method for aluminum  sheet  inventories,  and
results in more  appropriate  matching of cost of goods sold with related  sales
revenues.

The effect of this change in  accounting  principle  was to decrease  net income
reported for the three months and twelve months ended  December 31, 1999 by $3.5
million  and $12.1  million,  or $0.21 and $0.74 per  share,  respectively.  The
Company has omitted the  disclosure of the  cumulative  effect of this change on
retained  earnings  as of the date of the  change  and the pro forma  effects of
retroactive application due to such amounts not being determinable.  Inventories
at December 31 consist of the following (in thousands):

                                                   1999             1998
                                                   ----             ----
Raw materials                                    $63,510         $34,908
Work in process                                   80,210          74,960
Finished goods                                    62,278          49,079
Expendable parts and supplies                     15,895          14,910
                                                 -------        --------
                                                 221,893         173,857
LIFO reserve                                     (14,480)          3,659
                                                 -------        --------
                                                 207,413         177,516
Lower of cost or market reserve                        -          (2,548)
                                                 -------        --------
                                                $207,413        $174,968
                                                 =======        ========

Inventories of approximately  $183.3 million and $33.6 million,  included in the
above totals  (before the LIFO and lower of cost or market  reserve) at December
31,  1999 and 1998,  respectively,  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.

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

                                                    1999             1998
                                                    ----             ----
Land and improvements                             $21,216         $20,704
Buildings and improvements                         77,958          67,100
Machinery and equipment                           455,036         419,313
Construction in progress                           21,359          33,273
                                                 --------        --------
                                                  575,569         540,390
Less accumulated depreciation                     300,038         270,553
                                                 --------        --------
Net property, plant and equipment                $275,531        $269,837
                                                 ========        ========


Depreciation expense was $30.6 million,  $28.6 million and $28.2 million for the
years ended 1999, 1998 and 1997, respectively.

5.  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  in  addition  to risks  associated  with the
Company's natural gas  requirements.  The Company utilizes futures contracts and
options to protect  against  exposures to price risk in the aluminum and natural
gas markets. 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, 1999, credit lines totaling $62 million
were available at various brokerages used by the Company.

Gains,  losses and premiums on futures  contracts and options which  effectively
hedge  exposures  are  included  in  income  as a  component  of the  underlying
transaction.  The Company had deferred  realized losses of $0.7 million and $2.2
million as of December 31, 1999 and 1998,  respectively,  which were recorded as
an increase in the carrying value of inventory.

At December 31, 1999,  the Company held purchase and sales  commitments  through
2000 totaling $69 million and $276 million,  respectively.  At December 31, 1999
and 1998,  the  Company  had open  aluminum  futures  contracts  and options and
natural  gas  futures  with a fair value of $88.0  million  and $100.4  million,
respectively.  The  Company  had net  unrealized  gains of $7.9  million and net
unrealized   losses  of  $5.6   million  as  of  December  31,  1999  and  1998,
respectively,  on these open futures contracts and options. Net unrealized gains
and losses on open futures and option contracts are recorded in the consolidated
balance sheet as accrued  liabilities  and prepayments and other current assets,
respectively. The net unrealized gain of $7.9 million and net unrealized loss of
$5.6 million at December 31, 1999 and 1998, respectively, consists of unrealized
gains due from  brokers of $10.9  million and $4.1  million,  respectively,  and
unrealized losses due to brokers of $3.0 million and $9.7 million, respectively.
Futures  contracts  and  options  are  valued at the  closing  price on the last
business day of the year.

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

                                                 1999             1998
                                                 ----             ----
Senior subordinated notes                      $125,000         $125,000
Revolving credit facility                             -                -
                                               --------         --------
                                                125,000          125,000
Less current maturities                               -                -
                                               --------         --------
                                               $125,000         $125,000
                                               ========         ========

During 1996, in  connection  with an  acquisition,  the Company  refinanced  its
outstanding  borrowings and entered into a credit  agreement with a syndicate of
banks led by National  Westminster Bank (Bank One Corporation  replaced National
Westminster Bank in August 1999 as Administrative  Agent).  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.

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  1.75%  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
0.425% to 0.500%.

The  Company  must pay a fee  ranging  from  1.325% to  1.750%  per annum on the
carrying amount of each outstanding  letter of credit.  At December 31, 1999 and
1998,  letters of credit  totaling $0.8 million and $0.7 million,  respectively,
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, 1999,  the Company had an interest  rate swap  agreement  in place  covering
approximately $5 million of the Company's  exposure to variable  interest rates.
The fair value of this interest  rate swap  agreement at December 31, 1999 was a
liability of $0.1 million. The fixed interest rate is 6.87%. The counterparty to
the interest  rate swap  agreement  is a major  commercial  bank and  management
believes that losses related to credit risk are remote.

Based on estimated  market values at December 31, 1999 and 1998,  the fair value
of the  senior  subordinated  notes  was  approximately  $124  million  and $123
million, respectively.

Future  aggregate  maturities  of  long-term  debt at  December  31, 1999 are as
follows (in thousands):

1999                                                        $      -
2000                                                               -
2001                                                               -
2002                                                               -
2003                                                               -
Thereafter                                                   125,000
                                                            --------
     Total                                                  $125,000
                                                            ========

7.  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.

In July 1999, the Company adopted an Executive Stock Purchase  Incentive Program
(the "Program")  which had been authorized by the Company's  stockholders at the
Company's annual meeting of stockholders  held in April 1999. Under the Program,
the Company  extended credit to certain key executives to purchase the Company's
common stock at fair market value.  The loans are  collateralized  by the shares
acquired and are repayable with  full-recourse  to the  executives.  The Program
provides  for the  key  executives  to earn  repayment  of the  notes  including
interest, based on achieving annual and cumulative performance objectives as set
forth by the Management  Development and Compensation  Committee of the Board of
Directors.  The notes bear interest at 5.96 % per annum. The principal amount of
each loan is payable in four equal  installments  on  December 31 in each of the
years 2003,  2004,  2005 and 2006, in each case together with accrued and unpaid
interest.  A total of  677,000  shares  were  issued  during  August  1999 which
represents  approximately  4% of the common shares  outstanding  at December 31,
1999. The  outstanding  principal  balance of the notes at December 31, 1999 was
$10,511,000 and is classified as a reduction of stockholders' equity.

8.  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  employment  for all employees not
covered under a collective  bargaining agreement 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 financial status of the plans at December 31 is as follows (in thousands):

                                                    1999          1998
                                                    ----          ----
Change in benefit obligation:
Benefit obligation at beginning of year           $85,121        $77,814
    Service cost                                    2,716          2,508
    Interest cost                                   5,964          5,629
    Actuarial (gain) loss                          (4,921)         4,892
    Benefits paid                                  (5,890)        (5,722)
                                                  -------        -------
Benefit obligation at end of year                  82,990         85,121
                                                  -------        -------

Change in plan assets:
Fair value of plan assets at beginning of year     72,379         70,530
    Actual return on plan assets                   13,821          7,571
    Employer contribution                           1,482              -
    Benefits paid                                  (5,890)        (5,722)
                                                  -------        -------
Fair value of plan assets at end of year           81,792         72,379
                                                  -------        -------

Funded status                                      (1,198)       (12,742)
Unrecognized net actuarial (gain) loss             (7,098)         6,018
Unrecognized prior service cost                    (3,879)        (3,907)
Unrecognized net transition (asset)                  (307)          (538)
                                                  -------        -------
    Net amount recognized                        $(12,482)      $(11,169)
                                                 ========       ========

Amounts recognized in the consolidated balance sheet consist of:
    Prepaid (accrued) pension cost               $(12,482)      $(15,930)
    Intangible asset                                    -          2,630
    Accumulated other comprehensive income              -          2,131
                                                  -------        -------
Net amount recognized                            $(12,482)      $(11,169)
                                                 ========       ========

The  liabilities  as of December 31, 1999 and 1998  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 at December
31, 1998 in the Company's  consolidated  balance sheet is an additional  minimum
liability  relative  to its plan  which was  underfunded  in the  amount of $4.8
million at December 31, 1998. A corresponding amount is recorded at December 31,
1998 as an intangible asset to the extent it did not exceed  unrecognized  prior
service cost, while the excess was charged to stockholders'  equity. None of the
plans required an additional minimum liability at December 31, 1999.

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

                                               1999         1998         1997
                                               ----         ----         ----
Weighted average assumptions:
    Discount rate                              7.75%        7.00%        7.25%
    Expected return on plan assets             8.00         9.25         9.25
    Rate of compensation increase              4.50         4.50         4.50

Components of net pension expense:
    Service cost                             $2,716       $2,508       $2,221
    Interest cost                             5,964        5,629        5,719
    Expected return on plan assets           (5,637)      (6,369)      (5,764)
    Net amortization and deferral              (207)        (258)          89
                                            -------      -------      -------
        Net pension expense                  $2,836       $1,510       $2,265
                                            =======      =======      =======

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. The Company's contributions to the multi-employer pension plan were
approximately $0.2 million in 1999, 1998 and 1997.

In addition to the defined benefit pension plans  described  above,  the Company
also sponsors defined  contribution plans covering certain employees.  In one 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 other plan, the
Company matches 100% of the first 3% of a participant's  voluntary contributions
to the plan. The Company's  contributions to the plans were  approximately  $1.5
million, $1.4 million and $1.9 million for 1999, 1998 and 1997, respectively.

9.  Postretirement Benefits Other Than Pensions
The Company provides  postretirement  health care and life insurance benefits to
certain  employees hired on or before September 1, 1998. 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.  Per retiree
medical  claims reached two times the 1993 level in 1999.  Certain  changes were
made to the plan in 1998 as a  result  of a new  labor  agreement  completed  in
September 1998 relating to the Company's  Lewisport,  Kentucky rolling mill. The
changes require  employees who retire to pay a portion of medical premiums under
the plan based on length of service and also discontinues  medical coverage upon
the employees being eligible for Medicare benefits. In addition, in 1999 changes
were made to the plan for salaried employees to eliminate coverage for employees
eligible for Medicare and to require employee  contributions  based on length of
service.  The 1999 and 1998 plan changes reduced the accumulated  postretirement
benefit  obligation by $6.5 million and $14.1  million,  respectively,  which is
being amortized over the average remaining service lives of the Company's active
employees  and has the effect of reducing net periodic  postretirement  benefits
cost.

The financial status of the plan at December 31, 1999 and 1998 is as follows (in
thousands):

                                                      1999          1998
                                                      ----          ----
Change in benefit obligation:
Benefit obligation at beginning of year            $56,454        $69,030
    Service cost                                       867          1,827
    Interest cost                                    3,657          4,439
    Amendments                                      (6,464)       (14,073)
    Actuarial (gain) loss                             (731)        (2,854)
    Benefits paid                                   (2,359)        (1,915)
                                                   -------        -------
Benefit obligation at end of year                   51,424         56,454
                                                   -------        -------

Change in plan assets:
Fair value of plan assets at beginning of year           -              -
    Actual return on plan assets                         -              -
    Employer contribution                            2,359          1,915
    Benefits paid                                   (2,359)        (1,915)
                                                   -------        -------
Fair value of plan assets at end of year                 -              -
                                                   -------        -------

Funded status                                      (51,424)       (56,454)
Unrecognized net actuarial gain                    (12,470)       (11,931)
Unrecognized prior service cost                    (21,573)       (18,319)
                                                  --------       --------
    Prepaid (accrued) postretirement benefit cost $(85,467)      $(86,704)
                                                  ========       ========

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

                                               1999         1998         1997
                                               ----         ----         ----
Weighted average assumptions:
    Discount rate                              7.75%        7.00%        7.25%

Components of net postretirement benefit expense:
    Service cost                             $  867       $1,827       $1,934
    Interest cost                             3,657        4,439        4,529
    Amortization of prior service cost       (3,209)      (1,318)        (927)
    Recognized net actuarial loss              (193)        (413)        (658)
                                             ------       ------       ------
          Net postretirement benefit expense $1,122       $4,535       $4,878
                                             ======       ======       ======

For  measurement  purposes,  the  employer  cap on the amount  paid for  retiree
medical  benefits is assumed to increase with general  inflation at 3% per year.
If the general inflation rate assumption is increased by 1%, the  postretirement
benefit obligation as of December 31, 1999 and the combined service and interest
cost components of postretirement  benefit expense for the year then ended would
be increased by approximately $5.1 million and $0.5 million,  respectively,  and
if the general inflation rate assumption is decreased by 1%, the  postretirement
benefit obligation as of December 31, 1999 and the combined service and interest
cost components of postretirement  benefit expense for the year then ended would
be decreased by approximately $4.5 million and $0.4 million, respectively.

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

                                               1999        1998        1997
                                               ----        ----        ----
Current:
                         Federal              $ 419     $(1,093)      $ 606
                         State and Local        538         515       1,816
                                              -----      ------       -----
                                                957        (578)      2,422
Deferred:
                         Federal                  -           -           -
                         State and Local          -           -           -
                                              -----      ------      ------
                                               $957       $(578)     $2,422
                                              =====      ======      ======


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

<TABLE>
<CAPTION>

                                                            1999                           1998
                                                            ----                           ----
                                                   Assets       Liabilities       Assets       Liabilities
                                                  ---------     -----------      ---------     -----------
<S>                                                  <C>           <C>            <C>             <C>
Inventory                                            $    -         $ 1,373        $ 2,460         $     -
Property, plant and equipment                             -          53,787              -          55,171
Accrued and other liabilities                         7,407               -          8,217               -
Accrued pension costs                                 6,672               -          6,029               -
Accrued postretirement costs                         34,187               -         34,682               -
Net operating loss carryforwards                     28,378               -         32,576               -
AMT credit carryforwards                              6,699               -          5,847               -
Research and development
   credit carryforwards                               1,115               -              -               -
Other                                                   693               -            425               -
                                                    -------          ------        -------          ------
           Totals                                  $ 85,151         $55,160       $ 90,236         $55,171
                                                    -------          ------        -------          ------
Net deferred tax asset                               29,991               -         35,065               -
Valuation allowance                                 (29,991)              -        (35,065)              -
                                                    -------          ------        -------          ------
           Net deferred taxes                      $      -         $     -       $      -         $     -
                                                    =======          ======        =======          ======
</TABLE>

The Company has  determined  that at December 31, 1999 and 1998,  its ability to
realize  future  benefits  of net  deferred  tax assets  does not meet the "more
likely than not" criteria in Statement of Financial Accounting Standards No.109,
"Accounting for Income Taxes".

At December 31, 1999, the Company had net operating  loss ("NOL")  carryforwards
for federal tax purposes of approximately  $71 million,  which expire in various
amounts through 2008 and approximately  $6.7 million in alternative  minimum tax
("AMT") credit  carryforwards  which do not expire. As a result of the Company's
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 to the ownership change.

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

<TABLE>
<CAPTION>
                                                            1999        1998        1997
                                                            ----        ----        ----
<S>                                                          <C>         <C>         <C>
Federal statutory rate                                       35.0%       35.0%       35.0%
Utilization of NOL and AMT credit carryforwards             (43.9)      225.8       (40.0)
Nondeductible goodwill and other permanent differences
                                                             14.0      (413.5)       15.2
Adjustment of prior year accrual                             (3.1)          -           -
State income taxes, net of federal income tax benefit         2.1       (77.0)        9.9
Alternative minimum tax                                       5.9           -         5.2
Foreign sales corporation benefits                           (3.4)       21.8           -
Activity relating to income taxes attributed to
previously accrued securities valuation reserves              1.4       340.7        (2.3)
Other items                                                     -           -        (2.0)
                                                           ------       -----       -----
      Effective income tax rate                               8.0%      132.8%       21.0%
                                                           ======       =====       =====
</TABLE>

11.  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, will 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 may be required.

The Company has been named as a potentially  responsible  party at seven federal
superfund  sites and has  completed  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 that was  undergoing
closure and was  established  through  contributions  from two other  parties in
exchange for indemnification  from further liability.  The Company is reimbursed
from the trust fund for approved closure and postclosure  expenditures  incurred
at the site.  The balance  remaining  in the trust fund at December 31, 1999 was
$0.4  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 five other  federal  superfund  sites,  the  Company is a minor
contributor and has satisfied its obligations at two of the sites and expects to
resolve its liability at the  remaining  three sites for a nominal  amount.  The
Company is also  under  orders by  agencies  in three  states for  environmental
remediation at four 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 expenditures with respect to the above
matters is between $9 million and $13 million.

The Company acquired its Lewisport,  Kentucky  ("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
$9.6 million and $9.9 million at December  31, 1999 and 1998,  respectively.  Of
the total  reserve,  $2.0  million is included in "accrued  liabilities"  in the
Company's  consolidated  balance  sheets  at both  December  31,  1999 and 1998,
respectively,  and $7.6 million and $7.9 million is included in "other long-term
liabilities" at December 31, 1999 and 1998, 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
1999 and 1998  were  $1.5  million  and $2.1  million,  respectively.  All other
environmental  expenditures of the Company,  including remediation expenditures,
for 1999,  1998 and 1997 were  $2.3  million,  $1.0  million  and $3.1  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.

12.  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 1,950,000.

The following  summarizes  activity under the plans for the years 1997, 1998 and
1999:

<TABLE>
<CAPTION>
                                                            Options                              Restricted Stock
                                      --------------------------------------------------------  -----------------
                                                           Range of            Weighted Average
                                           Shares        Exercise Prices        Exercise Price          Shares
                                         ----------     ----------------       ---------------     ------------
<S>                                        <C>         <C>                          <C>               <C>
Outstanding December 31, 1996               196,000     $14.00 to $16.88             $15.80            197,500
   Granted                                  203,500     $15.38 to $20.00             $15.55              2,500
   Exercised                                 (9,000)    $14.00 to $16.75             $15.60                  -
   Forfeited                                (45,500)    $14.00 to $16.75             $15.60            (22,500)
   Stock no longer restricted                     -                    -                  -             (7,500)
                                            -------                                                    -------
Outstanding December 31, 1997               345,000     $14.00 to $20.00             $15.68            170,000
   Granted                                  231,500      $8.25 to $16.00             $14.40                  -
   Exercised                                      -                    -                  -                  -
   Forfeited                                (8,500)     $14.00 to $16.75             $14.99             (2,500)
                                            -------                                                    -------
Outstanding December 31, 1998               568,000      $8.25 to $20.00             $15.17            167,500
   Granted                                  343,000                $8.81              $8.81                  -
   Exercised                                      -                    -                  -                  -
   Forfeited                               (127,000)     $8.81 to $16.75             $12.46            (20,000)
                                            -------                                                    -------
Outstanding December 31, 1999               784,000      $8.25 to $20.00             $12.83            147,500
                                            =======                                                    =======
   (Weighted average contractual
     life of 7.7 years)

Exercisable Options:
   December 31, 1997                         11,000     $14.00 to $15.50             $14.75
   December 31, 1998                         71,500     $14.00 to $15.50             $14.24
   December 31, 1999                        172,000     $14.00 to $16.88             $15.72
</TABLE>

The following table summarizes  information  about stock options  outstanding at
December 31, 1999:

<TABLE>
<CAPTION>
                                               Options                                  Options
                                             Outstanding                              Exercisable
                        --------------------------------------------------   -------------------------------
                                             Weighted
                                             Average          Weighted                          Weighted
      Range of               Number         Contractual        Average           Number          Average
  Exercise Prices         Outstanding           Life        Exercise Price    Exercisable     Exercise Price
--------------------    ----------------   -------------   ---------------    ------------    --------------
<S>                             <C>           <C>                  <C>            <C>                <C>
     $8.25 to $14.00             349,500       8.4 years            $ 9.60          53,500            $14.00
    $14.01 to $20.00             434,500       7.2 years            $15.42         118,500            $16.50
                                 -------                                           -------
     $8.25 to $20.00             784,000       7.7 years            $12.83         172,000            $15.72
                                 =======                                           =======
</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 Company's  initial public offering in 1995, vests five years
from the date of award.  The  weighted-average  fair value of options granted in
1999,  1998 and 1997 was $3.61,  $6.23 and $6.11 per share,  respectively.  Fair
value estimates were  determined  using the  Black-Scholes  option pricing model
with the following weighted average asumptions for 1999, 1998 and 1997:

                                          1999           1998          1997
                                          ----           ----          ----
Risk-free interest rate                   4.70%         5.67%         6.22%
Dividend yield                            2.27%         1.40%         1.29%
Volatility factor                           50%           47%           39%
Expected term of options (in years)          5             5             5

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 No. 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 for 1999,  1998
and 1997 to the pro forma amounts which follow:

                                                1999       1998      1997
                                                ----       ----      ----
Net income (loss)
    As reported                               $11,011      $143     $7,941
    Pro forma                                 $10,515     $(442)    $7,592
Basic and diluted net income (loss) per share
    As reported                                 $0.68     $0.01      $0.68
    Pro forma                                   $0.65    $(0.03)     $0.65


13.  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>
                                                                                1999        1998        1997
                                                                                ----        ----        ----
<S>                                                                           <C>           <C>        <C>
Income (numerator) amounts used for basic and diluted per share computations:
     Income before extraordinary loss                                          $11,011       $ 143      $9,122
     Extraordinary loss, net of income tax benefit                                   -           -      (1,181)
                                                                               -------      ------      ------
     Net income                                                                $11,011       $ 143      $7,941
                                                                               =======      ======      ======

Shares (denominator) used for basic per share computations:
     Weighted average shares of common stock outstanding                        16,224      15,944      11,687
                                                                                ======      ======      ======

Shares (denominator) used for diluted per share computations:
     Weighted average shares of common stock outstanding                        16,224      15,944      11,687
     Plus: dilutive effect of stock options                                         57           3          36
                                                                                ------      ------      ------
           Adjusted weighted average shares                                     16,281      15,947      11,723
                                                                                ======      ======      ======

Basic and diluted per share data:
    Income before extraordinary loss                                             $0.68       $0.01       $0.78
    Extraordinary loss                                                               -           -       (0.10)
                                                                                ------       -----       -----
    Net income                                                                   $0.68       $0.01       $0.68
                                                                                 =====       =====       =====
</TABLE>

Options to purchase 488,000, 563,000 and 8,000 common shares for the years ended
December  31,  1999,  1998  and  1997,  respectively,  were  excluded  from  the
calculations  above because the exercise prices on the options were greater than
the average market price for the periods.

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

2000                                                               $2,864
2001                                                                2,340
2002                                                                1,941
2003                                                                1,869
2004                                                                1,083
2005-2006                                                              30

Rental expense under cancelable and noncancelable leases for 1999, 1998 and
1997 was $4.0 million, $3.2 million and $3.0 million, respectively.

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

<TABLE>
<CAPTION>
                                                                           Quarter
                                                             ---------------------------------------------
                                                                1st          2nd         3rd          4th
                                                             --------    --------    --------    ---------
1999
----
<S>                                                          <C>         <C>         <C>          <C>
Net sales                                                    $238,750    $271,525    $275,083     $260,558
Gross profit                                                   20,882      27,187      18,354       20,442
Net income                                                      2,166       6,571         882        1,392
Basic and diluted net income per share                           0.14        0.41        0.05         0.08

1998
----
Net sales                                                    $248,927    $258,346    $231,348     $229,328
Gross profit                                                   18,441      13,786      15,958       21,270
Net income (loss)                                               2,794      (2,643)     (2,139)       2,131
Basic and diluted net income (loss) per share                    0.18       (0.17)      (0.13)        0.13

</TABLE>

 16.  Information Concerning Business Segments
The Company has adopted  Statement of  Financial  Accounting  Standards  No.131,
"Disclosures about Segments of an Enterprise and Related Information" ("SFAS No.
131").  Under SFAS No. 131,  the Company has  determined  it has two  reportable
segments:  aluminum and electrical  conduit.  The aluminum segment  manufactures
aluminum  sheet  for  distributors  and the  transportation,  construction,  and
consumer durables end-use markets.  The electrical conduit segment  manufactures
flexible  electrical  wiring  products  for the  commercial  and  do-it-yourself
markets.

The  accounting  policies  of the  reportable  segments  are the  same as  those
described  in  Note  1,  "Basis  of  Presentation  and  Summary  of  Significant
Accounting  Policies".  All  intersegment  sales  prices are market  based.  The
Company evaluates the performance of its operating segments based upon operating
income.

The  Company's  reportable  segments  are  strategic  business  units that offer
different  products to different  customer groups.  They are managed  separately
because each business requires different technology and marketing strategies.

Summarized financial information concerning the Company's reportable segments is
shown in the  following  table for the years  1999,  1998 and 1997.  The "Other"
column includes corporate related items,  including  elimination of intersegment
transactions,  and as it relates to segment operating income, income and expense
not allocated to reportable segments.

<TABLE>
<CAPTION>
                                                                        Electrical
                                                           Aluminum      Conduit         Other        Total
                                                           ----------   ----------   ----------   -----------
1999
----
<S>                                                          <C>          <C>            <C>       <C>
Net sales to external customers                              $922,298     $123,618       $    -    $1,045,916
Intersegment net sales                                         29,090            -      (29,090)            -
Operating income                                               32,213        8,451      (12,224)       28,440
Depreciation and amortization                                  32,699        3,597          217        36,513
Total assets                                                  603,362      102,768          192       706,322
Capital expenditures                                           26,445       10,270            -        36,715

1998
----
Net sales to external customers                              $846,696     $121,253       $    -      $967,949
Intersegment net sales                                         26,267            -      (26,267)            -
Operating income                                               16,853       12,885       (8,317)       21,421
Depreciation and amortization                                  31,151        3,113          464        34,728
Total assets                                                  546,891      101,356          152       648,399
Capital expenditures                                           27,985        5,665            -        33,650

1997
----
Net sales to external customers                              $964,012     $126,765       $    -    $1,090,777
Intersegment net sales                                         26,230            -      (26,230)            -
Operating income                                               29,293       19,081       (6,781)       41,593
Depreciation and amortization                                  31,228        3,026          456        34,710
Total assets                                                  576,677       94,214       (3,470)      667,421
Capital expenditures                                           19,936        1,800            -        21,736

</TABLE>

17.  Stockholder Protection Rights Plan
During 1996, the Company's Board of Directors  adopted a stockholder  protection
rights  plan (the  "Plan").  Under the Plan,  preferred  share  purchase  rights
("Rights")  are issued at the rate of one Right for each share of the  Company's
common stock.  Each Right entitles its holder to purchase one one-hundredth of a
share of Preferred  Stock at an exercise  price of $65,  subject to  adjustment.
Until it is  announced  that a person or group has  acquired  15% or more of the
Company's common stock (an "Acquiring Person"),  or the tenth business day after
a person or group  commences a tender offer that, if completed,  would result in
such  person or group  owning 15% or more of the  Company's  common  stock,  the
Rights will be  evidenced  by the  Company's  common  stock  certificates,  will
automatically  trade  with  the  common  stock  and  will  not  be  exercisable.
Thereafter, separate Rights certificates will be distributed and each Right will
entitle its holder to purchase Participating Preferred Stock having economic and
voting terms similar to those of one share of Common Stock for an exercise price
of $65.

Upon  announcement  that any person or group has become an Acquiring Person (the
"Flip-in  Date"),  each  Right  (other  than  Rights  beneficially  owned by any
Acquiring Person or transferees thereof,  which Rights become void) will entitle
its  holder  to  purchase,  for the  exercise  price,  a number of shares of the
Company's common stock having a market value of twice the exercise price.  Also,
if after an Acquiring  Person  controls the Company's  Board of  Directors,  the
Company is  involved in a merger or sells more than 50% of its assets or earning
power (or has entered into an agreement to do any of the foregoing), and, in the
case of a merger, the Acquiring Person will receive different treatment than all
other  stockholders,  each Right will  entitle its holder to  purchase,  for the
exercise  price,  a number of shares of  common  stock of the  Acquiring  Person
having a market  value of twice  the  exercise  price.  If any  person  or group
acquires  between 15% and 50% of the Company's common stock, the Company's Board
of  Directors  may, at its option,  exchange one share of the  Company's  common
stock for each Right. Until the Rights become exercisable,  they may be redeemed
by the  Company  at a price of $0.01 per Right.  The Rights  expire on March 16,
2006.

18.      Guarantor Financial Statements
The $125  million of 10.75%  senior  subordinated  notes due 2006  issued by the
Company,  and the $100 million  revolving  credit facility are guaranteed by the
Company's wholly-owned subsidiaries  (collectively the "Subsidiary Guarantors"),
other than Commonwealth Financing Corp. ("CFC"), a Securitization Subsidiary (as
defined in the Indenture with respect to such debt) and certain  subsidiaries of
the Company without substantial assets or operations.  Such guarantees are full,
unconditional  and joint  and  several.  Separate  financial  statements  of the
Subsidiary  Guarantors are not presented because  management has determined that
they would not be material to investors.  The following  supplemental  financial
information sets forth on a condensed  combined basis,  combining balance sheet,
statement  of income and  statement of cash flows for the Parent  Company  Only,
Subsidiary  Guarantors,  Non-guarantor  Subsidiaries  and for the  Company as of
December 31, 1999 and 1998 and for the years ended  December 31, 1999,  1998 and
1997.


                  Combining Balance Sheet at December 31, 1999
                                 (in thousands)
<TABLE>
<CAPTION>
                                                  Parent
                                                 Company       Subsidiary      Non-guarantor                     Combined
                                                   Only        Guarantors      Subsidiaries     Eliminations       Totals
                                                 --------      -----------     -------------    ------------     ---------
<S>                                            <C>           <C>               <C>             <C>            <C>
Assets
  Current assets:
    Cash and cash equivalents                   $       -     $       -         $      -        $        -     $       -
    Accounts receivable, net                       95,339        84,254                -          (179,475)          118
    Inventories                                         -       207,413                -                 -       207,413
    Prepayments and other current assets              192        13,649           39,980                 -        53,821
                                                  -------      --------           ------          ---------     --------
      Total current assets                         95,531       305,316           39,980          (179,475)      261,352
  Property, plant and equipment, net                    -       275,531                -                 -       275,531
  Goodwill, net                                         -       164,610                -                 -       164,610
  Other noncurrent assets                         241,558         4,809                -          (241,538)        4,829
                                                  -------      --------           ------          ---------     --------
      Total assets                              $ 337,089     $ 750,266         $ 39,980         $(421,013)     $706,322
                                                  =======      ========           ======          =========     ========
Liabilities
  Current liabilities:
    Outstanding checks in excess of deposits   $        -     $   1,188         $      -         $        -     $  1,188
    Accounts payable                                    -       193,276           84,136           (179,475)      97,937
    Accrued liabilities                               413        38,928             (181)                 -       39,160
                                                  -------      --------           ------          ---------     --------
      Total current liabilities                       413       233,392           83,955           (179,475)     138,285
  Long-term debt                                        -       125,000                -                  -      125,000
  Other long-term liabilities                           -         8,412                -                  -        8,412
  Accrued pension benefits                              -        12,482                -                  -       12,482
  Accrued postretirement benefits                       -        85,467                -                  -       85,467
                                                  -------      --------           ------          ---------     --------
      Total liabilities                               413       464,753           83,955           (179,475)     369,646
                                                  -------      --------           ------          ---------     --------

Commitments and contingencies                           -             -                -                  -            -

Stockholders' Equity
  Common stock                                        166             1                -                 (1)         166
  Additional paid-in capital                      409,062       273,774            5,000           (278,774)     409,062
  Accumulated deficit                             (61,866)       11,738          (48,975)            37,237      (61,866)
  Unearned compensation                              (175)            -                -                  -         (175)
  Notes receivable from sale of common stock      (10,511)            -                -                  -      (10,511)
                                                  -------      --------           ------          ---------     --------
      Total stockholders' equity                  336,676       285,513          (43,975)          (241,538)     336,676
                                                  -------      --------           ------          ---------     --------
      Total liabilities and stockholders' equity $337,089     $ 750,266         $ 39,980          $(421,013)    $706,322
                                                  =======      ========           ======          =========     ========
</TABLE>

                  Combining Balance Sheet at December 31, 1998
                                 (in thousands)
<TABLE>
<CAPTION>

                                                  Parent
                                                 Company        Subsidiary    Non-guarantor                       Combined
                                                   Only         Guarantors     Subsidiaries     Eliminations       Totals
                                                 --------      -----------     -------------    ------------     ---------
<S>                                            <C>            <C>               <C>             <C>            <C>
Assets
  Current assets:
    Cash and cash equivalents                   $       -      $      6          $     -          $       -     $      6
    Accounts receivable, net                       89,091        41,115                -           (129,978)         228
    Inventories                                         0       174,968                0                  0      174,968
    Prepayments and other current assets                2         9,342           16,023                  0       25,367
                                                  -------      --------           ------          ---------     --------
      Total current assets                         89,093       225,431           16,023           (129,978)     200,569
  Property, plant and equipment, net                    0       269,837                0                  0      269,837
  Goodwill, net                                         0       169,086                0                  0      169,086
  Other noncurrent assets                         230,504         8,887                0           (230,484)       8,907
                                                  -------      --------           ------          ---------     --------
      Total assets                              $ 319,597      $673,241          $16,023          $(360,462)    $648,399
                                                  =======      ========           ======          =========     ========
Liabilities
  Current liabilities:
    Outstanding checks in excess of deposits    $       -           $ -          $     -          $       -     $      -
    Accounts payable                                    0       143,185           41,037           (129,978)      54,244
    Accrued liabilities                            (9,063)       40,487             (291)                 0       31,133
                                                  -------      --------           ------          ---------     --------
      Total current liabilities                    (9,063)      183,672           40,746           (129,978)      85,377
  Long-term debt                                        0       125,000                0                  0      125,000
  Other long-term liabilities                           0         8,859                0                  0        8,859
  Accrued pension benefits                              0        15,930                0                  0       15,930
  Accrued postretirement benefits                       0        86,704                0                  0       86,704
                                                  -------      --------           ------          ---------     --------
      Total liabilities                            (9,063)      420,165           40,746           (129,978)     321,870
                                                  -------      --------           ------          ---------     --------

  Commitments and contingencies                         -             -                -                  -            0

Stockholders' Equity
  Common stock                                        159             1                0                 (1)         159
  Additional paid-in capital                      398,794       273,774            5,000           (278,774)     398,794
  Accumulated deficit                             (69,621)      (18,568)         (29,723)            48,291      (69,621)
  Unearned compensation                              (672)            0                0                  0         (672)
  Accumulated other comprehensive income:
    Minimum pension liability adjustment                -        (2,131)               0                  0       (2,131)
                                                  -------      --------           ------          ---------     --------
      Total stockholders' equity                  328,660       253,076          (24,723)          (230,484)     326,529
                                                  -------      --------           ------          ---------     --------
      Total liabilities and stockholders' equity $319,597      $673,241         $ 16,023          $(360,462)    $648,399
                                                  =======      ========           ======          =========     ========
</TABLE>

       Combining Statement of Income for the year ended December 31, 1999
                                 (in thousands)
<TABLE>
<CAPTION>
                                                  Parent
                                                 Company        Subsidiary    Non-guarantor                       Combined
                                                   Only         Guarantors     Subsidiaries     Eliminations       Totals
                                                 --------      -----------     -------------    ------------     ---------
<S>                                              <C>         <C>                <C>               <C>         <C>
Net sales                                        $      -    $1,045,916         $      -          $       -   $1,045,916
Cost of goods sold                                      -       959,051                -                  -      959,051
                                                  -------      --------           ------          ---------     --------
   Gross profit                                         -        86,865                -                  -       86,865
Selling, general and administrative expenses          514        53,427                8                  -       53,949
Amortization of goodwill                                -         4,476                -                  -        4,476
                                                  -------      --------           ------          ---------     --------
   Operating income (loss)                           (514)       28,962               (8)                 -       28,440
Other income (expense), net                        11,030         2,861                -            (11,030)       2,861
Interest income (expense), net                        318          (407)         (19,244)                 -      (19,333)
                                                  -------      --------           ------          ---------     --------
   Income (loss) before income taxes               10,834        31,416          (19,252)           (11,030)      11,968
Income tax expense (benefit)                         (177)        1,134                -                  -          957
                                                  -------      --------           ------          ---------     --------
   Net income (loss)                             $ 11,011      $ 30,282        $ (19,252)         $ (11,030)    $ 11,011
                                                  =======      ========           ======          =========     ========
</TABLE>

       Combining Statement of Income for the year ended December 31, 1998
                                 (in thousands)
<TABLE>
<CAPTION>
                                                 Parent
                                                 Company       Subsidiary     Non-guarantor                     Combined
                                                  Only         Guarantors      Subsidiaries     Eliminations     Totals
                                                 --------      -----------     -------------    ------------     ---------
<S>                                              <C>          <C>               <C>               <C>          <C>
Net sales                                        $      -     $ 967,949         $      -          $       -    $ 967,949
Cost of goods sold                                      -       898,494                -                  -      898,494
                                                  -------      --------           ------          ---------     --------
   Gross profit                                         -        69,455                -                  -       69,455
Selling, general and administrative expenses        1,252        42,295               11                  -       43,558
Amortization of goodwill                                -         4,476                -                  -        4,476
                                                  -------      --------           ------          ---------     --------
   Operating income (loss)                         (1,252)       22,684              (11)                 -       21,421
Other income (expense), net                           115           356                -               (106)         365
Interest income (expense), net                        173           891          (23,285)                 -      (22,221)
                                                  -------      --------           ------          ---------     --------
   Income (loss) before income taxes                 (964)       23,931          (23,296)              (106)        (435)
Income tax expense (benefit)                       (1,107)          529                -                  -         (578)
                                                  -------      --------           ------          ---------     --------
   Net income (loss)                             $    143      $ 23,402         $(23,296)         $    (106)    $    143
                                                  =======      ========           ======          =========     ========
</TABLE>

       Combining Statement of Income for the year ended December 31, 1997
                                 (in thousands)
<TABLE>
<CAPTION>
                                                  Parent
                                                 Company       Subsidiary      Non-guarantor                     Combined
                                                   Only        Guarantors      Subsidiaries     Eliminations      Totals
                                                 --------      -----------     -------------    ------------     ---------
<S>                                             <C>          <C>                <C>               <C>         <C>
Net sales                                       $       -    $1,090,777         $      -          $       -   $1,090,777
Cost of goods sold                                      -     1,002,734                -                  -    1,002,734
                                                  -------      --------           ------          ---------     --------
     Gross profit                                       -        88,043                -                  -       88,043
Selling, general and administrative expenses          691        41,281                -                  -       41,972
Amortization of goodwill                                -         4,478                -                  -        4,478
                                                  -------      --------           ------          ---------     --------
     Operating income (loss)                         (691)       42,284                -                  -       41,593
Other income (expense), net                         8,632           508                -             (8,653)         487
Interest income (expense), net                          -       (24,109)          (6,427)                 -      (30,536)
                                                  -------      --------           ------          ---------     --------
     Income (loss) before income taxes
       and extraordinary loss                       7,941        18,683           (6,427)            (8,653)      11,544
Income tax expense (benefit)                            -         2,422                -                  -        2,422
                                                  -------      --------           ------          ---------     --------
     Income (loss) before extraordinary loss        7,941        16,261           (6,427)            (8,653)       9,122
Extraordinary loss on early extinguishment of debt,
     net of income tax benefit                          -        (1,181)               -                  -       (1,181)
                                                  -------      --------           ------          ---------     --------
     Net income (loss)                           $  7,941      $ 15,080          $(6,427)         $  (8,653)   $   7,941
                                                  =======      ========           ======          =========     ========
</TABLE>

     Combining Statement of Cash Flows for the year ended December 31, 1999
                                 (in thousands)
<TABLE>
<CAPTION>
                                                                  Parent
                                                                 Company     Subsidiary    Non-guarantor                  Combined
                                                                   Only      Guarantors     Subsidiaries   Eliminations     Totals
                                                                 --------    ----------    -------------   ------------   ---------
<S>                                                             <C>          <C>           <C>             <C>            <C>
Cash flows from operating activities:
  Net income                                                     $11,011      $ 30,282      $ (19,252)      $ (11,030)     $11,011
  Adjustments  to  reconcile  net income to net cash
  provided by operations:
    Depreciation and amortization                                    217        36,296              0               0       36,513
    Loss on disposal of property, plant and equipment                  -           389              -               -          389
    Issuance of common stock in connection with stock awards          44             -              -               -           44
    Equity in undistributed net income of subsidiaries                 -       (11,030)             -          11,030            0
    Changes in assets and liabilities:
      Decrease (increase) in accounts receivable, net             (6,248)      (43,139)             0          49,497          110
      (Increase) in inventories                                        0       (32,445)             0               0      (32,445)
      (Increase) in prepayments and other current assets            (190)       (4,307)       (23,957)              0      (28,454)
      (Increase) decrease in other noncurrent assets             (11,054)       13,932              0               0        2,878
      (Decrease) increase in accounts payable                          0        50,091         43,099         (49,497)      43,693
      Increase (decrease) in accrued liabilities                   9,476        (1,559)           110               0        8,027
      (Decrease) in other liabilities                                  0        (3,001)             0               0       (3,001)
                                                                 -------       -------       --------        --------      -------
         Net cash provided by operating activities                 3,256        35,509              0               0       38,765
                                                                 -------       -------       --------        --------      -------
Cash flows from investing activities:
  Purchases of property, plant and equipment                           0       (36,715)             0               0      (36,715)
  Proceeds from sale of property, plant and equipment                  0            12              0               0           12
                                                                 -------       -------       --------        --------      -------
    Net cash (used in) investing activities                            0       (36,703)             0               0      (36,703)
                                                                 -------       -------       --------        --------      -------
Cash flows from financing activities:
  Increase (decrease) in outstanding checks in excess of deposits      0         1,188              0               0        1,188
  Proceeds from long-term debt                                         -        46,770              -               -       46,770
  Repayments of long-term debt                                         -       (46,770)             -               -      (46,770)
  Cash dividends paid                                             (3,256)            -              -               -       (3,256)
                                                                 -------       -------       --------        --------      -------
    Net cash (used in) provided by financing activities           (3,256)        1,188              0               0       (2,068)
                                                                 -------       -------       --------        --------      -------
Net (decrease) in cash and cash equivalents                            0            (6)             0               0           (6)
Cash and cash equivalents at beginning of period                       -             6              -               -            6
                                                                 -------       -------       --------        --------      -------
    Cash and cash equivalents at end of period                   $     -       $     -       $      -         $     -     $      -
                                                                 =======       =======       ========        ========      =======
</TABLE>

     Combining Statement of Cash Flows for the year ended December 31, 1998
                                 (in thousands)
<TABLE>
<CAPTION>
                                                                  Parent
                                                                 Company     Subsidiary    Non-guarantor                  Combined
                                                                   Only      Guarantors     Subsidiaries   Eliminations    Totals
                                                                 --------    ----------    -------------   ------------   ---------
<S>                                                            <C>           <C>           <C>              <C>         <C>
Cash flows from operating activities:
  Net income                                                    $    143      $ 23,402      $(23,296)        $  (106)    $    143
  Adjustments  to  reconcile  net income to net cash
  provided by operations:
    Depreciation and amortization                                    465        34,263             -               -       34,728
    Loss on disposal of property, plant and equipment                  -         1,453             -               -        1,453
    Issuance of common stock in connection with stock awards          72             -             -               -           72
    Equity in undistributed net income of subsidiaries                 -          (106)            -             106            -
    Changes in assets and liabilities:
      (Increase) decrease in accounts receivable, net                  -          (255)            -             382          127
      (Increase) in inventories                                        -        (3,335)            -               -       (3,335)
      (Increase) decrease in prepayments and other current assets     (2)       (4,006)       23,748               -       19,740
      Decrease (increase) in other noncurrent assets              11,675       (11,277)            -               -          398
      Increase (decrease) in accounts payable                          -       (13,652)          397            (382)     (13,637)
      (Decrease) increase in accrued liabilities                  (9,164)       13,978          (849)              -        3,965
      Increase in other liabilities                                    -         2,931             -               -        2,931
                                                                 -------       -------       --------        --------      -------
        Net cash provided by operating activities                  3,189        43,396             -               -       46,585
                                                                 -------       -------       --------        --------      -------
Cash flows from investing activities:
  Purchases of property, plant and equipment                           -       (33,650)            -               -      (33,650)
  Proceeds from sale of property, plant and equipment                  -            32             -               -           32
                                                                 -------       -------       --------        --------      -------
    Net cash (used in) investing activities                            -       (33,618)            -               -      (33,618)
                                                                 -------       -------       --------        --------      -------
Cash flows from financing activities:
  Increase (decrease) in outstanding checks in excess of deposits      -        (9,122)            -               -       (9,122)
  Proceeds from long-term debt                                         -        45,150             -               -       45,150
  Repayments of long-term debt                                         -       (45,800)            -               -      (45,800)
  Cash dividends paid                                             (3,189)            -             -               -       (3,189)
                                                                 -------       -------       --------        --------      -------
    Net cash (used in) financing activities                       (3,189)       (9,772)            -               -      (12,961)
                                                                 -------       -------       --------        --------      -------
Net increase in cash and cash equivalents                              -             6             -               -            6
Cash and cash equivalents at beginning of period                       -             -             -               -            -
                                                                 -------       -------       --------        --------      -------
    Cash and cash equivalents at end of period                   $     -      $      6       $     -        $      -     $      6
                                                                 =======       =======       ========        ========      =======
</TABLE>

     Combining Statement of Cash Flows for the year ended December 31, 1997
                                 (in thousands)
<TABLE>
<CAPTION>
                                                                   Parent
                                                                  Company    Subsidiary    Non-guarantor                  Combined
                                                                    Only     Guarantors     Subsidiaries   Eliminations    Totals
                                                                 --------    ----------    -------------   ------------   ---------
<S>                                                             <C>          <C>            <C>            <C>            <C>
Cash flows from operating activities:
  Net income                                                     $ 7,941      $ 15,080       $ (6,427)      $(8,653)       $ 7,941
  Adjustments  to  reconcile  net income to net cash
  provided by operations:
    Depreciation and amortization                                    456        34,254              0             0         34,710
    Extraordinary loss on early extinguishment of debt                 -         1,495              -             -          1,495
    Loss on disposal of property, plant and equipment                  -         1,271              -             -          1,271
    Issuance of common stock in connection with stock awards          84             -              -             -             84
    Proceeds from the initial sale of accounts receivable              -       150,000              -             -        150,000
    Equity in undistributed net income of subsidiaries                 -        (8,653)             -         8,653              0
    Changes in assets and liabilities:
      (Increase) in accounts receivable, net                     (89,091)      (91,297)             0       133,738        (46,650)
      Decrease in inventories                                          0         2,278              0             0          2,278
      Decrease (increase) in prepayments and other current assets      0        46,741        (39,771)            0          6,970
      (Increase) decrease in other noncurrent assets              (5,814)        6,015              0             0            201
      (Decrease) increase in accounts payable                     (4,142)       82,781         40,640      (133,738)       (14,459)
      Increase (decrease) in accrued liabilities                     101        (9,842)           558             0         (9,183)
      Increase in other liabilities                                    0            13              0             0             13
                                                                 -------       -------       --------        --------      -------
        Net cash (used in) provided by operating activities      (90,465)      230,136         (5,000)            0        134,671
                                                                 -------       -------       --------        --------      -------
Cash flows from investing activities:
  Initial investment in subsidiary                                (5,000)            -              -         5,000              0
  Net cash and cash equivalents (outflow) from acquisition             -        (2,894)             -             -         (2,894)
  Purchases of property, plant and equipment                           0       (21,736)             0             0        (21,736)
  Proceeds from sale of property, plant and equipment                  0            28              0             0             28
                                                                 -------       -------       --------        --------      -------
    Net cash (used in) provided by investing activities           (5,000)      (24,602)             0         5,000        (24,602)
                                                                 -------       -------       --------        --------      -------
Cash flows from financing activities:
  Increase (decrease) in outstanding checks in excess of deposits      0         9,122              0             0          9,122
  Proceeds from long-term debt                                         -       294,950              -             -        294,950
  Repayments of long-term debt                                         -      (511,550)             -             -       (511,550)
  Proceeds from issuance of common stock                          97,793             -          5,000        (5,000)        97,793
  Cash dividends paid                                             (2,328)            -              -             -         (2,328)
                                                                 -------       -------       --------        --------      -------
    Net cash provided by (used in) financing activities           95,465      (207,478)         5,000        (5,000)      (112,013)
                                                                 -------       -------       --------        --------      -------
Net (decrease) in cash and cash equivalents                            0        (1,944)             0             0         (1,944)
Cash and cash equivalents at beginning of period                       -         1,944              -             -          1,944
                                                                 -------       -------       --------        --------      -------
    Cash and cash equivalents at end of period                   $     -    $        -        $     -       $     -       $      -
                                                                 =======       =======       ========        ========      =======
</TABLE>

<PAGE>
                          Commonwealth Industries, Inc.
                         Report of Independent Auditors

Board of Directors and Stockholders
Commonwealth Industries, Inc.

         In our opinion,  the accompanying  consolidated  balance sheets and the
related  consolidated  statements of income,  comprehensive  income,  changes in
stockholders'  equity and cash flows present fairly,  in all material  respects,
the  consolidated  financial  position  of  Commonwealth  Industries,  Inc.  and
subsidiaries  at December  31, 1999 and 1998,  and the  consolidated  results of
their  operations and their cash flows for each of the three years in the period
ended  December 31, 1999, in conformity  with  accounting  principles  generally
accepted in the United States. 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 of these
statements  in  accordance  with auditing  standards  generally  accepted in the
United  States  which  require  that we plan and  perform  the  audit to  obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the  amounts  and  disclosures  in  the  financial  statements,   assessing  the
accounting  principles  used and significant  estimates made by management,  and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for the opinion expressed above.
         As discussed in Note 3 to the consolidated  financial  statements,  the
Company  changed its method of  accounting  for  inventories  from the first-in,
first-out  (FIFO)  method to the  last-in,  first-out  (LIFO)  method  effective
January 1, 1999.


/s/ PricewaterhouseCoopers LLP

Louisville, Kentucky
January 20, 2000