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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the
Fiscal Year Ended December 31, 2002

|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From ____ to ____
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Commission File Number: 0-25642

COMMONWEALTH INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-3245741
(State of incorporation) (I.R.S. Employer Identification No.)

500 West Jefferson Street
19th Floor
Louisville, Kentucky 40202-2823
(Address of principal executive office) (Zip Code)

Registrant's telephone number, including area code: (502) 589-8100
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock; Stock Purchase Rights

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No |_|
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. |X|
Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes |X| No
|_|
The aggregate market value of the common stock held by non-affiliates
of the registrant as of June 30, 2002 was $109,388,000.
The number of shares outstanding of the registrant's common stock as of
March 7, 2003 was 16,010,971.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the annual report to stockholders of Commonwealth
Industries, Inc. for the year ended December 31, 2002 are incorporated by
reference into Parts I and II and portions of the definitive Proxy Statement
dated March 17, 2003 for the 2003 Annual Meeting of Stockholders to be held
April 25, 2003 are incorporated by reference into Parts II and III.

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COMMONWEALTH INDUSTRIES, INC.
FORM 10-K
For the Year Ended December 31, 2002

INDEX


PART I Page
----
Item 1. Business..........................................................3
Item 2. Properties.......................................................10
Item 3. Legal Proceedings................................................10
Item 4. Submission of Matters to a Vote of Security Holders..............11
Item E.O. Executive Officers of the Registrant.............................11

PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters......................................................13
Item 6. Selected Financial Data..........................................14
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations........................................14
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.......14
Item 8. Financial Statements and Supplementary Data......................14
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.....................................14

PART III

Item 10. Directors and Executive Officers of the Registrant...............15
Item 11. Executive Compensation...........................................15
Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters..............................15
Item 13 Certain Relationships and Related Transactions...................15
Item 14 Controls and Procedures..........................................15

PART IV

Item 15. Exhibits, Financial Statement Schedule and Reports on Form 8-K...16
Signatures..................................................................22
Certifications..............................................................23


PART I

Item 1. Business.

Commonwealth Industries, Inc. (the "Company") is one of North America's
leading manufacturers of aluminum sheet and, through its Alflex Corporation
subsidiary ("Alflex"), of electrical flexible conduit and prewired armored
cable.
The Company's aluminum sheet products are produced using the
conventional, direct -chill rolling ingot casting process at the Company's
multi-purpose aluminum rolling mill at Lewisport, Kentucky, one of the largest
in North America, and by the continuous casting process at its facilities
located in Uhrichsville, Ohio, and Carson, California. The Company operates
coating lines at the Lewisport mill and at Company facilities in Bedford, Ohio,
and Torrance, California. It also operates tube mills in Carson and Kings
Mountain, North Carolina in addition to a tube fabrication facility in Pelham,
Tennessee. The electrical flexible conduit and prewired armored cable products
are manufactured at Alflex facilities in Long Beach, California and Rocky Mount,
North Carolina.

The aluminum sheet products manufactured by the Company are generally
referred to as common alloy products. They are produced in a number of aluminum
common alloys with thicknesses (gauge) of 0.008 to 0.250 inches, widths of up to
72 inches, and a variety of physical properties and packaging, in each case to
meet customer specifications. These products are sold to distributors and
end-users, principally for use in building and construction products such as
roofing, siding, windows and gutters; transportation equipment such as truck
trailers and bodies and automotive parts; and consumer durables such as
cookware, appliances and lawn furniture. The Company also fabricates aluminum
sheet into welded tube products for various markets. Substantially all of the
Company's aluminum sheet products are produced in response to specific customer
orders. Production of aluminum sheet products in 2002 was 925 million pounds or
about 86% of capacity compared to 822 million pounds or about 76% of capacity in
2001. In 2002, the North American market for aluminum sheet products, excluding
rigid container sheet, foil and exports, was approximately 3.9 billion pounds
versus 3.7 billion pounds in 2001.

Alflex manufactures metallic (aluminum and steel) and non-metallic
(plastic) electrical flexible conduit and prewired armored cable, utilizing
aluminum sheet manufactured by the Company. These products provide mechanical
protection for electrical wiring installed in buildings in accordance with local
building code requirements. Armored cable differs from electrical conduit in
that it is pre-wired by Alflex, whereas end-users must pull wire through
electrical conduit when conduit is installed. These products are used primarily
by electrical contractors in the construction, renovation and remodeling of
commercial and industrial facilities and multi-family dwellings. They also are
used in the heating, ventilating and air-conditioning ("HVAC"), original
equipment manufacturers ("OEM") and Do-It-Yourself ("DIY") markets. The products
include preassembled and prepackaged products for commercial and DIY markets and
commercial pre-fabricated wiring systems which provide significant savings in
labor and installation costs for end-users.

Historically, electrical wires were housed in rigid pipes in the walls
of buildings. Rigid pipe remains the most widely used means of protecting wiring
in commercial and other non-residential construction. Electrical flexible
conduit made from steel was introduced in the 1920s. Flexible conduit is
significantly easier to install than rigid pipe, resulting in cost savings to
the installer. Aluminum flexible conduit, introduced to the market by Alflex,
has in recent years become a significant factor due to its ease of installation,
lighter weight and ease of cutting compared to steel flexible conduit or rigid
pipe. In wet, harsh or corrosive environments, non-metallic or plastic jacketed
steel flexible conduit may be used. Armored cable (conduit with pre-installed
wire) made of steel or aluminum has captured an increasing share of the market
from rigid pipe due to its pre-assembly, ease of installation and overall cost
effectiveness.

The Company estimates that at December 31, 2002 it had a backlog of
firm orders for which product specifications have been defined of 124.2 million
pounds of aluminum sheet products with an aggregate sales price of $122.9
million, compared to an estimate of 168.6 million pounds with an aggregate sales
price of $159.8 million at December 31, 2001. Backlog is not a significant
factor for the Company's electrical products.

The Company operates in two reportable segments: aluminum and
electrical products. The aluminum segment manufactures aluminum sheet for
distributors and the transportation, construction, and consumer durables end-use
markets. The electrical products segment manufactures flexible electrical wiring
products for the commercial construction and do-it-yourself markets. Summarized
financial information for the Company's segments is included in note 18 to the
consolidated financial statements.

Aluminum Sheet Products

Net sales revenue in the Company's aluminum segment accounted for 88%,
87% and 88% of the Company's total net sales revenue in 2002, 2001and 2000,
respectively.

Manufacturing

The Company's aluminum sheet manufacturing facilities are comprised of
the rolling mills at Lewisport, Kentucky, Uhrichsville, Ohio, and Carson,
California, coating facilities at Lewisport, Bedford, Ohio, and Torrance,
California, tube mills at Carson and Kings Mountain, North Carolina and a tube
fabrication facility in Pelham, Tennessee.

The Lewisport mill uses the conventional, vertical direct-chill,
rolling ingot casting process. This process permits the production of
traditional aluminum sheet with strength, hardness, formability, finishing and
other characteristics preferred for many applications. The flexibility permitted
by this multi-purpose rolling mill enables the Company to target higher margin
products, manufacture a variety of products with consistent high quality and
respond quickly to shifts in market demand. In 2002, the Lewisport mill produced
495 million pounds of aluminum sheet products compared to 421 million pounds in
2001. At full capacity utilization, unit costs of converting metal to aluminum
sheet products at Lewisport are believed to be among the lowest in the industry
for plants using the conventional process.

The Uhrichsville and Carson mills use low-cost, scrap-based twin-belt
mini-mill continuous casting production technology. This process permits the
efficient production of aluminum sheet alloys used in building and construction
and other applications not requiring the more complex alloys or the physical
characteristics better provided by the conventional casting method. The process
eliminates several steps associated with conventional casting, thereby reducing
manufacturing costs. Capital costs also are significantly lower than for mills
using the conventional casting process. In 2002, the Uhrichsville and Carson
mills together produced 430 million pounds of aluminum sheet products compared
to 401 million pounds in 2001.

Aluminum Supply

Most of the aluminum metal used by the Company's rolling mills is
purchased, principally from or through aluminum scrap dealers or brokers, in the
form of aluminum scrap. The Company believes it is one of the largest users of
aluminum scrap other than beverage can scrap in the United States and that the
volume of its purchases assists it in obtaining scrap at competitive prices. The
Company's remaining requirements are met with purchased primary metal, including
metal produced in Russia to specifications that differ from the industry
standard for primary aluminum but that is appropriate for the Company's needs.
The Company has a 10-year supply agreement with Glencore Ltd.
("Glencore"), a leading diversified trading and industrial company, for the
purchase of primary aluminum. Under the agreement, the Company committed to
purchase a minimum of 1.2 billion pounds of P1020/99.7% aluminum at current
market prices from Glencore over the 10-year term, which began in January 2001.

Casting and Rolling

At Lewisport, scrap, in some cases after processing in the Company's
recycling facilities, and primary aluminum are melted in reverbatory furnaces.
Small amounts of copper, magnesium, manganese and other metals are added to
produce alloys with the desired hardness, formability and other physical
characteristics. The molten aluminum is then poured through a mold surrounded by
circulating water which cools and solidifies into an ingot about 24 inches thick
and weighing as much as 40,000 pounds. The cooled ingot is conveyed to the
rolling mill area for further processing.

The rolling ingots are heated to a malleable state in soaking pits or
tunnel furnaces. Then, in the next two stages--hot and cold rolling--the ingot
is passed between rolls under pressure, causing it to become thinner and longer.
The first rolling stage takes place in a "reversing" mill, so named because the
ingot is passed back and forth between the work rolls, reversing itself after
each pass. After it passes through the reversing mill the aluminum sheet moves
through a continuous multi-stand hot mill, and then is cooled and cold rolled to
its final thickness.

The Uhrichsville and Carson rolling mills employ a continuous casting
process in which molten aluminum is fed into a caster which produces a
continuous thin slab that is immediately hot rolled into semi-finished aluminum
sheet in a single manufacturing process. The aluminum sheet is then cooled and
cold rolled to its final thickness as in the conventional process. The
Uhrichsville and Carson mills use twin-belt thin-slab continuous casting, which
the Company believes is the most efficient and most productive form of
continuous casting.

The Company and IMCO Recycling, Inc ("IMCO") are parties to a supply
agreement under which IMCO serves as the major supplier of molten recycled
aluminum for the Company's Uhrichsville mill. Under the IMCO supply agreement,
the Company purchases aluminum scrap and delivers it to IMCO who then processes
and converts it into molten metal at its recycling and processing facility
located adjacent to the Company's mill. The Company is responsible for the
treatment and disposal of the waste generated as a result of IMCO's processing
services on behalf of the Company. The IMCO supply agreement expires March 31,
2009. The Company has an option to purchase the IMCO facility at the end of the
supply agreement for an amount equal to five times the average earnings before
interest, taxes, depreciation and amortization of the facility as defined in the
supply agreement. The Company also has a right of first refusal if IMCO wishes
to sell the facility.

The Carson rolling mill processes its own scrap to produce molten
metal, utilizing current delacquering and melting technology.

The Company has paid a one-time license fee for certain technology used
in its continuous casting process. The license agreement allows the Company the
use of certain inventions, technical discoveries and apparatus of the licensor
in the manufacturing process.

Finishing and Coating

After hot and cold rolling is complete, the aluminum sheet is leveled
to ensure required flatness and may be slit into narrower widths, embossed or
painted to customers' specifications.

The Company is an industry leader in the development and production of
superior quality coated aluminum products and operates at Lewisport the largest
coating line integrated with a United States rolling mill. Coating lines at the
Company's Bedford and Torrance facilities serve the Uhrichsville and Carson
rolling mills. In the coating process, aluminum sheet is chemically cleaned,
painted and then cured to produce a durable coated surface.

Packaging and Shipping

Finished products are shipped to customers by truck or rail in coils of
various size and weighing up to 30,000 pounds.

Electrical Products

Net sales revenue in the Company's electrical products segment
accounted for 12%, 13% and 12% of the Company's total net sales revenue in 2002,
2001and 2000, respectively.

Alflex fabricates its flexible conduit and armored cable at its Long
Beach, California and Rocky Mount, North Carolina facilities. Alflex purchases
its aluminum sheet from the Company. Alflex also uses significant amounts of
insulated copper wire and steel in its production process.

Alflex fabricates its electrical products by slitting aluminum or steel
sheet on specialized narrow-width slitting equipment, after which the sheet is
coiled. The coils are then fed through proprietary forming machines to produce
the flexible conduit. Until 1998, Alflex followed a process that draws copper
rod into wire, coats the wire with plastic insulation and, for certain products,
wraps the coated wire with paper or plastic. The protective armoring is then
wrapped around the cabled wire. During 1998, the Company executed a strategic
alliance with BICCGeneral whereby beginning in the second half of 1999, Alflex
ceased drawing wire and coating the wire with plastic insulation, and instead
purchased all of its copper wire requirements from BICCGeneral. During the
fourth quarter of 2001, BICCGeneral sold its assets to Southwire Company and
Southwire Company is now executing the contract.

Alflex uses a specialized co-extrusion process involving both rigid and
flexible plastics (PVC) to produce its non-metallic conduit. After production,
the conduit and cable products are cut to length and packaged. Alflex designs
and builds much of the equipment used to manufacture its products. In 2002,
Alflex produced 483 million feet of electrical products compared to 486 million
feet in 2001.

Customers and Markets

The Company's aluminum sheet products are sold to distributors as well
as end-users, principally in the building and construction, transportation and
consumer durables markets.

The following table sets forth for 2002 and 2001 the percentage of
aluminum sheet net shipments contributed by each of these classes of customers
and the Company's estimate of its share of these markets in North America.

% of Net Shipments % Market Share
------------------ --------------
2002 2001 2002 2001
---- ---- ---- ----
Building and construction 43 47 35 37
Distribution 34 33 24 22
Transportation 8 7 11 9
Consumer durables and other 15 13 12 13
--- ---
100 100
=== ===

The building and construction sector is the largest end-use market
other than the packaging market for common alloy aluminum sheet products.

The Company believes it is the largest supplier of common alloy
aluminum sheet to distributors. Distributors, in some cases after slitting,
punching, leveling or other processing, resell the Company's products into
end-use markets, including the building and construction, transportation and
consumer durables markets.

The Company is one of the largest suppliers of aluminum sheet products
to North American manufacturers of transportation equipment, including truck
trailers and bodies, recreational vehicles and automobile parts. This market has
been severely impacted by the current economic conditions. The commercial
transportation market is off 30% from its 2000 consumption rate.

The largest volume in the category of consumer durables and other
markets for the Company is reroll stock sold for further processing and
conversion for a variety of markets. Other major end-uses of this product
category are cookware, consumer durables, pleasure boats, personal watercrafts,
appliances and irrigation pipe.

Packaging is the largest single end-use of aluminum sheet, accounting
for about one-half of the estimated world-wide market. Much of this product is
produced by large, single-purpose rolling mills. The Company does not
participate in the packaging market.

Market share estimates exclude heat-treated aluminum plate and sheet,
which the Company does not produce. The Company estimates that heat-treated
products constitute an immaterial portion of the end-use markets served by the
Company.

Company sales are made to customers located primarily throughout North
America. Sales outside North America have not been significant. During 2002,
2001 and 2000, sales to one major customer amounted to approximately 11.1%,
12.2% and 14.0%, respectively, of the Company's net sales. No other single
customer accounted for more than 10% of the Company's net sales in 2002, 2001 or
2000.

Sales of aluminum sheet products are made through the Company's own
sales force which is strategically located to provide North American coverage.
An integrated computer system provides the Company's employees with on-line
access to inventory status, production schedules, shipping information and
pricing data to facilitate immediate response to customer inquiries.

Many of the Company's aluminum sheet markets are seasonal. Demand in
the building and construction and transportation markets is generally stronger
in the spring and summer seasons than in the fall and winter seasons. Such
factors typically result in higher operating income in the spring and summer
months.

Alflex electrical products are sold primarily through independent
manufacturer's representatives to electrical distributors. Distributors
represented approximately 80% of Alflex net sales in 2002. The remaining sales
are made to the do-it-yourself ("DIY"), original equipment manufacturer ("OEM")
and heating ventilation and air conditioning ("HVAC") markets. The independent
manufacturer's representatives do not market Alflex's products exclusively, but
also sell complementary products that are used in conjunction with products
manufactured and sold by Alflex. Alflex serves approximately 4,000 customers.

Alflex maintains registered trademarks on certain of its flexible
conduit and armored cable systems, including Ultratite, Galflex, the Alflex name
and its design, Electrician's Choice, Computer Blue, Duraclad, Armorlite and
PowerSnap. While Alflex considers these trademarks to be important to its
business, it does not believe it is dependent upon the trademarks for the
continuation of its business.

Competition

The Company competes in the production and sale of common alloy
aluminum sheet products with some 9 other aluminum rolling mills in North
America and with imported products.

Aluminum Company of America ("Alcoa") and Alcan Aluminium Ltd.
("Alcan") have a significantly larger share of the total United States market
for aluminum sheet products, including packaging and aluminum foil. However, in
the market for common alloy aluminum sheet products other than can sheet and
aluminum foil, the market share leaders are Alcoa, Alcan and the Company.

The Company competes with other rolled products suppliers on the basis
of quality, price, timeliness of delivery and customer service.

Aluminum also competes with other materials such as steel, plastic and
glass for various applications.

Alflex competes with national and regional competitors and imported
products in the electrical flexible conduit and prewired armored cable industry.
Competition is principally on the basis of product features, availability, price
and customer service.

Research and Development

The Company conducts research and development activities at its rolling
mills as part of its ongoing operations to satisfy emerging customer
requirements, improve product quality and reduce manufacturing costs. Outside
consultants also are utilized.

Alflex focuses its research and development activities on the
development of new products and the improvement of its conduit and cable
manufacturing processes through the development of proprietary manufacturing
equipment and the reduction of waste.

The estimated amounts spent during 2002, 2001 and 2000 on
Company-sponsored research and development activities were $0.8 million, $0.9
million and $0.9 million, respectively.

Environmental Matters

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.

Federal and state regulations continue to impose stricter emission
requirements on the aluminum industry. While the Company believes that current
pollution control measures at the emission sources at its facilities meet
current requirements, additional equipment or process changes at some of the
Company's facilities may be required to meet future requirements.

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. At the five other federal superfund sites, the Company is a minor
contributor and has satisfied its obligations at all five sites for a nominal
amount. The Company is also under orders by agencies in two states for
environmental remediation at three sites, one of which is currently operating
and two of which have been closed. Previously, a trust fund existed 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 was reimbursed from the trust fund for
approved closure and postclosure expenditures incurred at the site. All
remaining funds in the trust fund were paid out during 2001 and the trust was
closed.

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

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 allocated 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 Company had established an accrual for such
liabilities of $1.3 million at December 31, 2002 and 2001. 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.

Environmental sampling at Lewisport has disclosed the presence of
contaminants, including polychlorinated biphenyls (PCBs), in a closed Company
landfill. Management believes the contamination is covered by the Lockheed
Martin indemnification, which Lockheed Martin disputes.

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 $7.4 million and $8.8 million at December 31, 2002 and 2001,
respectively, which covers all environmental loss contingencies that the Company
has determined to be probable and reasonably estimable. The Company estimates
that total cost to remediate these environmental matters could be as much as $17
million should all matters be ultimately concluded in a manner least favorable
to the Company. It is not possible, however, 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 2002 and 2001 were $0.9 million and $0.2 million, respectively.
All other environmental expenditures of the Company, including remediation
expenditures, for 2002, 2001 and 2000 were $1.7 million, $1.9 million, and $2.1
million, respectively. The Company has planned environmental capital
expenditures for 2003 of $0.2 million.

Employees

At December 31, 2002, the Company employed 1,892 persons, of whom 1,333
were full-time non-salaried employees including 634 at Lewisport represented by
the United Steel Workers of America ("USW") and 217 at the Uhrichsville and
Bedford facilities represented by the Glass, Molders, Pottery, Plastic & Allied
Workers International, AFL-CIO, CLC union ("GMP"). Current collective bargaining
agreements with the USW and the GMP expire in July and December 2003,
respectively. The Company believes its relationships with its employees are
good.

The Company provides gain sharing plans for certain of its non-salaried
employees. Contributions to the plans are generally based upon a formula which
compares actual performance results to targets agreed upon by management and in
some cases the bargaining units. In addition, the Company provides defined
contribution 401(k) plans for certain non-salaried and salaried employees.

Website Access to Company Reports

The Company makes available free of charge through the Company's
website at www.ciionline.com the Company's annual reports on Form 10-K,
quarterly reports on Form 10-Q, any current reports on Form 8-K, and amendments
to those reports filed or furnished with the United States Securities and
Exchange Commission (the "Commission") pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934. The reports are available as soon as reasonably
practicable after the Company electronically files such material with the
Commission and can be found under the Company website headings of Investor
Relations/ SEC Filings.


Item 2. Properties.

The following table sets forth certain information with respect to the
Company's principal operating properties used in the Company's two reportable
segments: aluminum and electrical products. Substantially all of these
properties collateralize borrowings under the Company's senior secured bank
credit facility.

Location Nature Segment Square Feet Status
-------- ------ ------- ----------- ------
Louisville, Kentucky Administrative offices Both 26,000 Leased

Lewisport, Kentucky Rolling mill and Aluminum 1,700,000 Owned
coating facility

Uhrichsville, Ohio Rolling mill Aluminum 285,000 Owned

Carson, California Rolling mill and Aluminum 103,000 Owned
tube mill

Bedford, Ohio Coating facility Aluminum 121,000 Leased

Torrance, California Coating facility Aluminum 60,000 Leased

Kings Mountain, Tube mill Aluminum 100,000 Leased
North Carolina

Pelham, Tennessee Tube fabrication Aluminum 60,000 Leased
facility

Long Beach, Alflex administrative Electrical 154,000 Leased
California offices and Products
manufacturing facility

Rancho Dominguez, Alflex distribution Electrical 111,000 Leased
California center (1) Products

Rocky Mount, Alflex manufacturing Electrical 105,000 Owned
North Carolina facility and Products
distribution center

Note (1) - The Company closed this distribution center during 2002 and is
currently in the process of subleasing the property.

Item 3. Legal Proceedings.

The Company is a party to non-environmental legal proceedings and
administrative actions all of which are of an ordinary routine nature incidental
to the business. In the opinion of management such proceedings and actions
should not, individually or in the aggregate, have a material adverse effect on
the Company's consolidated financial condition, results of operations or cash
flows.

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

No matters were submitted to a vote of security holders during the
fourth quarter ended December 31, 2002.

Item E.O. Executive Officers of the Registrant.

The executive officers of the Company as of March 19, 2003 were:

Name Age Position with the Company
---- --- -------------------------
Mark V. Kaminski 47 President, Chief Executive Officer and Director

Patrick D. King 41 Executive Vice President and Chief Commercial
Officer

Donald L. Marsh, Jr. 56 Executive Vice President and Chief Financial
Officer

John J. Wasz 42 Executive Vice President and President Alflex

Henry Del Castillo 63 Vice President Finance

Gregory P. Givan 50 Vice President and Treasurer

Katherine R. Gould 39 Vice President Organizational Development

Lenna Ruth Macdonald 40 Vice President, General Counsel and Secretary

William G. Toler 46 Vice President Supply Chain

William R. Witherspoon 57 Vice President Aluminum Operations

John F. Barron 51 Controller and Assistant Secretary

Mr. Kaminski joined the Company in 1987 as Marketing Manager. In 1989
he was promoted to Vice President of Operations and in 1991 he became President
and Chief Executive Officer. He is a director of Secat, Inc.

Mr. King joined the Company in June 2002. From 1998 to 2002 he was Vice
President Worldwide Product Marketing and Strategy for Lexmark International.
Prior to 1998 he held executive sales and marketing positions with Bausch and
Lomb and Micron Communications, Inc.

Mr. Marsh joined the Company in March 1996. From March 1996 to April
2002 he also held the position of Secretary of the Company. Prior to March 1996
he was Senior Vice President of Castle Energy Corporation.

Mr. Wasz joined the Company in 1985. From 1988 to 1991 he was Regional
Manager and from 1991 to 1993 he served as Distribution Marketing Manager. He
was promoted to Vice President, Marketing and Sales in December 1993. In March
1997, he moved to the position of Vice President, Materials and in November 1999
he held the position of Vice President Operations, Alflex. In June 2000, he
became Chief Operating Officer, Alflex and was promoted to his current position
in February 2002.

Mr. Del Castillo joined the Company in October 1997 as Alflex Business
Unit Controller and was elected to his present position in November 1999. From
1995 to 1997 he was Chief Financial Officer of Wherehouse Entertainment Inc., a
retail music and video chain undergoing financial restructuring. From 1981 to
1995 he served in a number of financial management positions, including Chief
Financial Officer, at Powerine Oil Company, an independent oil refiner.

Mr. Givan joined the Company in July 1997. From 1987 until 1997 he was
Second Vice President, Corporate Finance and Director, Corporate Finance and
Risk Management and Assistant Treasurer of Providian Corp., a financial services
company.

Ms. Gould joined the Company in July 1998. From 1996 through 1998 she
was Human Resource Manager of Gordonstone Coal Management, a joint venture
between ARCO Coal Australia and Mitsui. Prior to 1996 she held operations and
human resource management positions with Comalco Limited, an Australia-based
aluminum company.

Ms. Macdonald joined the Company in August 1999 as Principal Legal
Counsel and Assistant Secretary and was elected Vice President, General Counsel
and Assistant Secretary in May 2000. In April 2002 she also was elected
Secretary of the Company. From December 1998 to 1999 she served as Real Estate
Counsel for Vencor, Inc. From 1993 to 1998 she held in-house counsel positions
with Bank One Corporation, including with its subsidiary Banc One New Hampshire
Asset Management Corporation as Assistant General Counsel and Litigation Group
Leader.

Mr. Toler rejoined the Company in August 2002. From 2000 to 2002 he was
Vice President with Smelter Service Corporation. He had been with the Company
from 1980 through 2000 holding various management and executive positions,
including Vice President Materials and Corporate Development from November 1999
to June 2000 and prior to that as Vice President Finance and Administration.

Mr. Witherspoon joined the Company in 1998 as Vice President Continuous
Cast and has served in his current position since January 2001. In 1997 he was
Plant Manager for Alcan's Louisville operation. From 1979 until 1997 he held
various management positions with Logan Aluminum, including Hot Mill Business
Unit Manager. Prior to 1979 he held various management positions with Anaconda
Company.

Mr. Barron joined the Company in February 1997. From 1986 to 1996 he
held the position of Senior Vice President and Assistant Comptroller of Bank One
Kentucky, N.A.


PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.

The Company's Common Stock is traded on the Nasdaq National Market
under the symbol CMIN. On March 7, 2003, there were 170 holders of record of the
Company's Common Stock. The Company estimates that there were a total of 4,100
stockholders on that date, including beneficial owners. Since becoming publicly
owned in March 1995, the Company has paid quarterly cash dividends on its Common
Stock of $0.05 per share.

The following table sets out the high and low sales prices for the
Common Stock for each quarterly period indicated, as quoted in the Nasdaq
National Market:

2002 High Low
---- ---- ---
First Quarter $7.48 $4.48
Second Quarter 8.11 5.89
Third Quarter 7.28 4.20
Fourth Quarter 7.04 4.41

2001 High Low
---- ---- ---
First Quarter $6.00 $3.88
Second Quarter 5.50 4.06
Third Quarter 6.50 4.00
Fourth Quarter 6.30 4.01

The information required by Item 201(d) of Regulation S-K may be found
under the caption Executive Compensation--Equity Compensation Plan Information
in the Company's Proxy Statement dated March 17, 2003 for the Annual Meeting of
Stockholders to be held on April 25, 2003 (the "Proxy Statement") and is
incorporated herein by reference.

Item 6. Selected Financial Data.

The information captioned "Consolidated Selected Financial Data"
included on page 7 of the Company's annual report to stockholders for the year
ended December 31, 2002 is incorporated herein by reference. This information
sets forth selected consolidated statement of operations, operating and balance
sheet data for the years indicated. The financial information is derived from
the audited consolidated financial statements of the Company for such years.
This information should be read in conjunction with, and is qualified by
reference to, the consolidated financial statements of the Company and the notes
thereto and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" also incorporated herein by reference.

Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.

The information captioned "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included on pages 8 through 13 of
the Company's annual report to stockholders for the year ended December 31, 2002
is incorporated herein by reference.

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

The information under the subcaption "Risk Management" included in the
information captioned "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included on pages 8 through 13 of the
Company's annual report to stockholders for the year ended December 31, 2002 is
incorporated herein by reference.

Item 8. Financial Statements and Supplementary Data.

The following consolidated financial statements of the Company and
report of independent auditors included on pages 14 through 43 of the Company's
annual report to stockholders for the year ended December 31, 2002 are
incorporated herein by reference.

Consolidated Balance Sheet
Consolidated Statement of Operations
Consolidated Statement of Comprehensive Income (Loss)
Consolidated Statement of Changes in Stockholders' Equity
Consolidated Statement of Cash Flows
Notes to Consolidated Financial Statements
Report of Independent Auditors


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

None.


PART III

Item 10. Directors and Executive Officers of the Registrant.

The information required by Item 401 (other than paragraph (b) thereof)
and Item 405 of Regulation S-K may be found under the caption Board of Directors
in the Proxy Statement and is incorporated herein by reference. The information
required by Item 401(b) of Regulation S-K may be found under Item E.O. above.

Item 11. Executive Compensation.

The information required by Item 402 of Regulation S-K may be found
under the caption Executive Compensation in the Proxy Statement and is
incorporated herein by reference.

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

The information required by Items 201(d) and 403 of Regulation S-K may
be found under the captions Executive Compensation --Equity Compensation Plan
Information and Beneficial Ownership of Common Stock in the Proxy Statement and
is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions.

The information required by Item 404 of Regulation S-K may be found
under the caption Board of Directors--Compensation and Other Transactions with
Directors and under the caption Executive Compensation --Management Development
and Compensation Committee Interlocks and Insider Participation in the Proxy
Statement and is incorporated herein by reference.

Item 14. Controls and Procedures.

The Company's certifying officers have concluded based on their
evaluation of the Company's disclosure controls and procedures that the
disclosure controls and procedures are effective in ensuring that material
information relating to the Company, including its consolidated subsidiaries, is
made known to the certifying officers by others within those entities,
particularly during the period in which this Form 10-K was being prepared and
that both non-financial and financial information required to be disclosed by
the Company in its periodic reports is recorded, processed, summarized and
reported in a timely fashion. The evaluation was conducted within 90 days of the
filing date of this Form 10-K. In addition, there were no significant changes in
the Company's internal controls or in other factors that could significantly
affect these controls subsequent to the date of the evaluation.


PART IV

Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

(a) (1) List of Financial Statements filed

The following consolidated financial statements of the Company and
report of independent auditors included in the Company's annual report to
stockholders for the year ended December 31, 2002 were incorporated by reference
in Part II, item 8 of this report:

Consolidated Balance Sheet
Consolidated Statement of Operations
Consolidated Statement of Comprehensive Income (Loss)
Consolidated Statement of Changes in Stockholders' Equity
Consolidated Statement of Cash Flows
Notes to Consolidated Financial Statements
Report of Independent Auditors

(a) (2) List of Financial Statement Schedules filed

The following report of independent accountants and financial statement
schedule should be read in conjunction with the Company's consolidated financial
statements.

Supplemental Schedule II - Valuation and Qualifying Accounts is filed
on page 21 of this report.

Report of Independent Accountants on the Company's financial statement
schedule filed as a part hereof for the years ended December 31, 2002, 2001 and
2000 is filed on page 20 of this report.

Financial statement schedules other than listed above have been omitted
since they are either not required or not applicable or the information is
otherwise included.

(b) Reports on Form 8-K.

No reports on Form 8-K were filed during the fourth quarter
ended December 31, 2002.

(c) Exhibits

3.1 Restated Certificate of Incorporation, effective
April 18, 1997(incorporated by reference to
Exhibit 3.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1997).

3.2 By-laws, dated April 17, 1997 (incorporated by
reference to Exhibit 3.2 to the Company's Annual
Report on Form 10-K for the year ended
December 31,1999).

3.3 Stockholder Protection Rights Agreement, dated as of
March 6, 1996, including forms of Rights Certificate,
Election to Exercise and Certificate of Designation
and Terms of Participating Preferred Stock of the
Company (incorporated by reference to Exhibits (1),
(2) and (3) to the Company's Registration Statement
No. 0-25642 on Form 8-A).

10.1 Executive Incentive Compensation Plan, as amended
December 4, 1995(incorporated by reference to
Exhibit 10.1 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1995).

10.2 Long-term Executive Incentive Compensation Plan
(incorporated by reference to Exhibit 10.2 to the
Company's Registration Statement No. 33-87924 on
Form S-1).

10.3 Cash Balance Plan (defined benefit pension plan
covering all non-bargaining unit employees of the
Company) (incorporated by reference to Exhibit 10.3
to the Company's Quarterly Report on Form 10-Q for
the quarter ended June 30, 2002).

10.4 401(k) Plan (defined contribution plan covering all
non-bargaining unit employees of the Company)
(incorporated by reference to Exhibit 10.4 to the
Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 2002).

10.5 1995 Stock Incentive Plan, as amended and restated
April 23, 1999 (incorporated by reference to Exhibit
10.1 to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1999).

10.6 1997 Stock Incentive Plan, as amended and restated
April 23, 1999 (incorporated by reference to Exhibit
10.2 to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1999).

10.6.1 Amendment, dated December 18, 2000, to 1997 Stock
Incentive Plan, as amended and restated April 23,
1999 (incorporated by reference to Exhibit 10.7.1 to
the Company's Annual Report on Form 10-K for the year
ended December 31, 2000).

10.7 Form of Severance Agreements between the Company and
Mark V. Kaminski, Donald L. Marsh, Jr. and John J.
Wasz (incorporated by reference to Exhibit 10.7 to
the Company's Annual Report on Form 10-K for the year
ended December 31, 1995).

10.7.1 Form of Severance Agreements between the Company and
Henry Del Castillo, Gregory P. Givan, Katherine R.
Gould, Patrick D. King, Lenna Ruth Macdonald,
William G. Toler and William R. Witherspoon
(substituted).

10.8 Deferred Compensation Plan (incorporated by reference
to Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1996).

10.9 Third Amended and Restated Credit Agreement among the
Company, subsidiaries of the Company, the several
lenders from time to time parties thereto, and PNC
Bank, National Association, as administrative agent,
dated as of March 21, 2002 (incorporated by reference
to Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 2002).

10.10 Second Amended and Restated Pledge and Security
Agreement entered into by the Company and its
subsidiaries, collectively, in favor of PNC Bank,
National Association, as administrative agent, dated
as of March 21, 2002 (incorporated by reference to
Exhibit 10.2 to the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 2002).

10.11 Receivables Purchase Agreement among Commonwealth
Financing Corp., the Company, Market Street Funding
Corporation and PNC Bank, National Association, dated
as of September 29, 1997 (incorporated by reference
to Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1997).

10.12 First Amendment, dated May 12, 1998, to Receivables
Purchase Agreement among Commonwealth Financing
Corp., the Company, Market Street Funding Corporation
and PNC Bank, National Association, dated as of
September 29, 1997 (incorporated by reference to
Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30, 2000).

10.12.1 Second Amendment, dated September 25, 2000, to
Receivables Purchase Agreement among Commonwealth
Financing Corp., the Company, Market Street Funding
Corporation and PNC Bank, National Association, dated
as of September 29, 1997 (incorporated by reference
to Exhibit 10.2 to the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30, 2000).

10.12.2 Third Amendment, dated September 24, 2001, to
Receivables Purchase Agreement among Commonwealth
Financing Corp., the Company, Market Street Funding
Corporation and PNC Bank, National Association, dated
as of September 29, 1997 (incorporated by reference
to Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30, 2001).

10.12.3 Fourth Amendment, dated as of April 12, 2002, to
Receivables Purchase Agreement among Commonwealth
Financing Corp., the Company, Market Street Funding
Corporation and PNC Bank, National Association, dated
as of September 29, 1997 (incorporated by reference
to Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 2002).

10.13 Supply Agreement by and among Commonwealth Aluminum
Corporation, IMCO Recycling of Ohio Inc. and IMCO
Recycling Inc., effective as of April 1, 1999
(incorporated by reference to Exhibit 10.4 to the
Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1999).

10.14 Indenture dated as of September 20, 1996 between the
Company, the Subsidiary Guarantors named therein and
Harris Trust and Savings Bank, Trustee (incorporated
by reference to Exhibit 4.2 to the Company's
Registration Statement No. 333-13661 on Form S-4).

10.14.1 First Supplemental Indenture, dated as of November
12, 1996, to Indenture dated as of September 20, 1996
(incorporated by reference to Exhibit 10.16 to the
Company's Annual Report on Form 10-K for the year
ended December 31, 1996).

10.14.2 Second Supplemental Indenture, dated as of October
16, 1998, to Indenture dated as of September 20, 1996
(incorporated by reference to Exhibit 10.20 to the
Company's Annual Report on Form 10-K for the year
ended December 31, 1998).

10.14.3 Third Supplemental Indenture, dated as of December
31, 1999, to Indenture dated as of September 20, 1996
(incorporated by reference to Exhibit 10.15.3 to the
Company's Annual Report on Form 10-K for the year
ended December 31, 1999).

10.14.4 Fourth Supplemental Indenture, dated as of December
31, 2000, to Indenture dated as of September 20, 1996
(incorporated by reference to Exhibit 10.15.4 to the
Company's Annual Report on Form 10-K for the year
ended December 31, 2000).

10.15 Supplemental Executive Retirement Plan.

13 Portions of the annual report to stockholders for
the year ended December 31, 2002 which are expressly
incorporated by reference in this filing.

21 Subsidiaries.

23 Consent of PricewaterhouseCoopers LLP.


Report of Independent Accountants on Financial Statement Schedule

Board of Directors
Commonwealth Industries, Inc.

Our audits of the consolidated financial statements referred to in our
report dated February 26, 2003 appearing in the 2002 Annual Report to
Stockholders of Commonwealth Industries, Inc. and subsidiaries (which report and
consolidated financial statements are incorporated by reference in this Annual
Report on Form 10-K) also included an audit of the consolidated financial
statement schedule listed in Item 15 (a) (2) of this Form 10-K. In our opinion,
this consolidated financial statement schedule presents fairly, in all material
respects, the information set forth therein when read in conjunction with the
related consolidated financial statements.

/s/ PricewaterhouseCoopers LLP

Louisville, Kentucky
February 26, 2003


Supplemental Schedule II
Commonwealth Industries, Inc.
Valuation and Qualifying Accounts
December 31, 2002, 2001 and 2000
(in thousands)


Additions
Balance at Charged to Charged to Balance at
Beginning Costs and Other End of
Description of Period Expenses Accounts Deductions of Period
----------- --------- -------- -------- ---------- ---------

Allowance for uncollectible accounts
December 31,2002 $1,240 $ 721 $ 222 $1,080 $1,103
December 31,2001 2,930 4,263 - 5,953 1,240
December 31,2000 1,950 1,014 - 34 2,930

Allowance for obsolete stores inventory
December 31,2002 $1,223 $ 267 $ - $ - $1,490
December 31,2001 1,203 20 - - 1,223
December 31,2000 1,221 - - 18 1,203



SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized on March 25, 2003.

COMMONWEALTH INDUSTRIES, INC.

By /s/ Mark V. Kaminski
---------------------------------------
Mark V. Kaminski, President and
Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated:




Signature Title Date
--------- ----- ----


/s/ Paul E. Lego March 25, 2003
- ------------------------------
Paul E. Lego Chairman of the Board


/s/ Mark V. Kaminski
- ------------------------------
Mark V. Kaminski President, Chief Executive Officer and March 25, 2003
Director (Principal Executive Officer)

/s/ Catherine G. Burke
- ------------------------------
Catherine G. Burke Director March 25, 2003


/s/ Steven J. Demetriou
- ------------------------------
Steven J. Demetriou Director March 25, 2003


/s/ C. Frederick Fetterolf
- ------------------------------
C. Frederick Fetterolf Director March 25, 2003


/s/ Larry E. Kittelberger
- ------------------------------
Larry E. Kittelberger Director March 25, 2003


/s/ John E. Merow
- ------------------------------
John E. Merow Director March 25, 2003


/s/ Donald L. Marsh, Jr.
- ------------------------------
Donald L. Marsh, Jr. Executive Vice President and Chief Financial March 25, 2003
Officer (Principal Financial Officer)

/s/ Henry Del Castillo
- ------------------------------
Henry Del Castillo Vice President Finance March 25, 2003
(Principal Accounting Officer)

/s/ John F. Barron
- ------------------------------
John F. Barron Controller and Assistant Secretary March 25, 2003



CERTIFICATIONS

I, Mark V. Kaminski, certify that:

1. I have reviewed this annual report on Form 10-K of Commonwealth Industries,
Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: March 25, 2003
/s/ Mark V. Kaminski
----------------------
Mark V. Kaminski
President and Chief Executive
Officer


CERTIFICATIONS (continued)

I, Donald L. Marsh, Jr., certify that:

1. I have reviewed this annual report on Form 10-K of Commonwealth Industries,
Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: March 25, 2003
/s/ Donald L. Marsh, Jr.
------------------------
Donald L. Marsh, Jr.
Executive Vice President and
Chief Financial Officer


Exhibit Index
-------------

Exhibit
Number Description
------- -----------
3.1 Restated Certificate of Incorporation, effective
April 18, 1997(incorporated by reference to
Exhibit 3.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1997).

3.2 By-laws, dated April 17, 1997 (incorporated by
reference to Exhibit 3.2 to the Company's Annual
Report on Form 10-K for the year ended
December 31, 1999).

3.3 Stockholder Protection Rights Agreement, dated as of
March 6, 1996, including forms of Rights Certificate,
Election to Exercise and Certificate of Designation
and Terms of Participating Preferred Stock of the
Company (incorporated by reference to Exhibits (1),
(2) and (3) to the Company's Registration Statement
No. 0-25642 on Form 8-A).

10.1 Executive Incentive Compensation Plan, as amended
December 4, 1995(incorporated by reference to
Exhibit 10.1 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1995).

10.2 Long-term Executive Incentive Compensation Plan
(incorporated by reference to Exhibit 10.2 to the
Company's Registration Statement No. 33-87924 on
Form S-1).

10.3 Cash Balance Plan (defined benefit pension plan
covering all non-bargaining unit employees of the
Company) (incorporated by reference to Exhibit 10.3
to the Company's Quarterly Report on Form 10-Q for
the quarter ended June 30, 2002).

10.4 401(k) Plan (defined contribution plan covering all
non-bargaining unit employees of the Company)
(incorporated by reference to Exhibit 10.4 to the
Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 2002).

10.5 1995 Stock Incentive Plan, as amended and restated
April 23, 1999 (incorporated by reference to Exhibit
10.1 to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1999).

10.6 1997 Stock Incentive Plan, as amended and restated
April 23, 1999 (incorporated by reference to Exhibit
10.2 to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1999).

10.6.1 Amendment, dated December 18, 2000, to 1997 Stock
Incentive Plan, as amended and restated April 23,
1999 (incorporated by reference to Exhibit 10.7.1 to
the Company's Annual Report on Form 10-K for the year
ended December 31, 2000).

10.7 Form of Severance Agreements between the Company and
Mark V. Kaminski, Donald L. Marsh, Jr. and John J.
Wasz (incorporated by reference to Exhibit 10.7 to
the Company's Annual Report on Form 10-K for the year
ended December 31, 1995).

10.7.1 Form of Severance Agreements between the Company and
Henry Del Castillo, Gregory P. Givan, Katherine R.
Gould, Patrick D. King, Lenna Ruth Macdonald,
William G. Toler and William R. Witherspoon
(substituted).

10.8 Deferred Compensation Plan (incorporated by reference
to Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1996).

10.9 Third Amended and Restated Credit Agreement among the
Company, subsidiaries of the Company, the several
lenders form time to time parties thereto, and PNC
Bank, National Association, as administrative agent,
dated as of March 21, 2002 (incorporated by reference
to Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 2002).

10.10 Second Amended and Restated Pledge and Security
Agreement entered into by the Company and its
subsidiaries, collectively, in favor of PNC Bank,
National Association, as administrative agent, dated
as of March 21, 2002 (incorporated by reference to
Exhibit 10.2 to the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 2002).

10.11 Receivables Purchase Agreement among Commonwealth
Financing Corp., the Company, Market Street Funding
Corporation and PNC Bank, National Association, dated
as of September 29, 1997 (incorporated by reference
to Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1997).

10.12 First Amendment, dated May 12, 1998, to Receivables
Purchase Agreement among Commonwealth Financing
Corp., the Company, Market Street Funding Corporation
and PNC Bank, National Association, dated as of
September 29, 1997 (incorporated by reference to
Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30, 2000).

10.12.1 Second Amendment, dated September 25, 2000, to
Receivables Purchase Agreement among Commonwealth
Financing Corp., the Company, Market Street Funding
Corporation and PNC Bank, National Association, dated
as of September 29, 1997 (incorporated by reference
to Exhibit 10.2 to the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30, 2000).

10.12.2 Third Amendment, dated September 24, 2001, to
Receivables Purchase Agreement among Commonwealth
Financing Corp., the Company, Market Street Funding
Corporation and PNC Bank, National Association, dated
as of September 29, 1997 (incorporated by reference
to Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30, 2001).

10.12.3 Fourth Amendment, dated April 12, 2002, to
Receivables Purchase Agreement among Commonwealth
Financing Corp., the Company, Market Street Funding
Corporation and PNC Bank, National Association, dated
as of September 29, 1997 (incorporated by reference
to Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 2002).

10.13 Supply Agreement by and among Commonwealth Aluminum
Corporation, IMCO Recycling of Ohio Inc. and IMCO
Recycling Inc., effective as of April 1, 1999
(incorporated by reference to Exhibit 10.4 to the
Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1999).

10.14 Indenture dated as of September 20, 1996 between the
Company, the Subsidiary Guarantors named therein and
Harris Trust and Savings Bank, Trustee (incorporated
by reference to Exhibit 4.2 to the Company's
Registration Statement No. 333-13661 on Form S-4).

10.14.1 First Supplemental Indenture, dated as of November
12, 1996, to Indenture dated as of September 20, 1996
(incorporated by reference to Exhibit 10.16 to the
Company's Annual Report on Form 10-K for the year
ended December 31, 1996).

10.14.2 Second Supplemental Indenture, dated as of October
16, 1998, to Indenture dated as of September 20, 1996
(incorporated by reference to Exhibit 10.20 to the
Company's Annual Report on Form 10-K for the year
ended December 31, 1998).

10.14.3 Third Supplemental Indenture, dated as of December
31, 1999, to Indenture dated as of September 20, 1996
(incorporated by reference to Exhibit 10.15.3 to the
Company's Annual Report on Form 10-K for the year
ended December 31, 1999).

10.14.4 Fourth Supplemental Indenture, dated as of December
31, 2000, to Indenture dated as of September 20, 1996
(incorporated by reference to Exhibit 10.15.4 to the
Company's Annual Report on Form 10-K for the year
ended December 31, 2000).

10.15 Supplemental Executive Retirement Plan.

13 Portions of the annual report to stockholders for the
year ended December 31, 2002 which are expressly
incorporated by reference in this filing.

21 Subsidiaries.

23 Consent of PricewaterhouseCoopers LLP.


Exhibit 10.7.1
--------------
SEVERANCE AGREEMENT


THIS AGREEMENT is entered into as of the _______ day of
_______, 2002 by and between Commonwealth Industries, Inc., a Delaware
corporation (the "Company"), and _____________________ ("Executive").
W I T N E S S E T H

WHEREAS, Executive currently serves as a key employee of the
Company and his services and knowledge are valuable to the Company in connection
with the management of one or more of the Company's principal operating
facilities, divisions, departments or Subsidiaries (as defined in Section 1);
and


WHEREAS, the Board (as defined in Section 1) has determined
that it is in the best interests of the Company and its stockholders to secure
Executive's continued services and to ensure Executive's continued and undivided
dedication in the event of any threat or occurrence of, or negotiation or other
action that could lead to, or create the possibility of, a Change in Control (as
defined in Section 1) of the Company, the Board has authorized the Company to
enter into this Agreement.

NOW, THEREFORE, for and in consideration of the premises and
the mutual covenants and agreements herein contained, the Company and Executive
hereby agree as follows:

1. Definitions. As used in this Agreement, the following terms
shall have the respective meanings set forth below:

(a) "Board" means the Board of Directors of the Company.

(b) "Cause" means (1) a material breach by Executive of the
duties and responsibilities of Executive (other than as a result of
incapacity due to physical or mental illness) which is (x) demonstrably
willful and deliberate on Executive's part, (y) committed in bad faith
or without reasonable belief that such breach is in the best interests
of the Company and (z) not remedied in a reasonable period of time
after receipt of written notice from the Company specifying such breach
or (2) the Executive's conviction of, or plea of nolo contendere to, a
felony involving moral turpitude. Cause shall not exist unless and
until the Company has delivered to Executive a copy of a resolution
duly adopted by a majority of the entire Board at any duly called
meeting of the Board (after reasonable notice to Executive and an
opportunity for Executive, together with counsel, to be heard before
the Board), finding that in the good faith opinion of the Board an
event set forth in clauses (1) or (2) has occurred and specifying the
particulars thereof in detail. The Company must notify Executive of any
event constituting Cause within ninety (90) days following the
Company's knowledge of its existence or such event shall not constitute
Cause under this Agreement.

(c) "Change in Control" means the occurrence of any one of the
following events:

(i) any "person" (as such term is defined in Section 3(a)(9)
of the Securities Exchange Act of 1934 (the "Exchange Act") and as used
in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing 20%
or more of the combined voting power of the Company's then outstanding
securities eligible to vote for the election of the Board (the "Company
Voting Securities"); provided, however, that the event described in
this paragraph (i) shall not be deemed to be a Change in Control by
virtue of any of the following acquisitions: (A) by the Company or any
Subsidiary, (B) by any employee benefit plan sponsored or maintained by
the Company or any Subsidiary, (C) by any underwriter temporarily
holding securities pursuant to an offering of such securities, (D)
pursuant to a Non-Control Transaction (as defined in paragraph (iii)),
(E) pursuant to any acquisition by Executive or any group of persons
including Executive; or (F) a transaction (other than one described in
(iii) below) in which Company Voting Securities are acquired from the
Company, if a majority of the Incumbent Board (as defined below)
approves a resolution providing expressly that the acquisition pursuant
to this clause (F) does not constitute a Change in Control under this
paragraph (i);

(ii) individuals who, on January 25, 1996, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at
least a majority thereof, provided that any person becoming a director
subsequent to January 25, 1996, whose election or nomination for
election was approved by a vote of at least two-thirds of the directors
comprising the Incumbent Board (either by a specific vote or by
approval of the proxy statement of the Company in which such person is
named as a nominee for director, without objection to such nomination)
shall be considered a member of the Incumbent Board; provided, however,
that no individual initially elected or nominated as a director of the
Company as a result of an actual or threatened election contest with
respect to directors or any other actual or threatened solicitation of
proxies or consents by or on behalf of any person other than the Board
of Directors shall be deemed to be a member of the Incumbent Board;

(iii) the consummation of a merger, consolidation, share
exchange or similar form of corporate reorganization of the Company or
any such type of transaction involving the Company or any of its
Subsidiaries that requires the approval of the Company's stockholders
(whether for such transaction or the issuance of securities in the
transaction or otherwise), or the consummation of the direct or
indirect sale or other disposition of all or substantially all of the
assets, of the Company and its Subsidiaries (a "Business Combination"),
unless immediately following such Business Combination: (A) more than
60% of the total voting power of the publicly traded corporation
resulting from such Business Combination (including, without
limitation, any corporation which directly or indirectly has beneficial
ownership of 100% of the Company Voting Securities or all or
substantially all of the assets of the Company and its Subsidiaries)
eligible to elect directors of such corporation is represented by
shares that were Company Voting Securities immediately prior to such
Business Combination (either by remaining outstanding or being
converted), and such voting power is in substantially the same
proportion as the voting power of such Company Voting Securities
immediately prior to the Business Combination, (B) no person (other
than any publicly traded holding company resulting from such Business
Combination, any employee benefit plan sponsored or maintained by the
Company (or the corporation resulting from such Business Combination),
or any person which beneficially owned, immediately prior to such
Business Combination, directly or indirectly, 20% or more of the
Company Voting Securities (a "Company 20% Stockholder")) becomes the
beneficial owner, directly or indirectly, of 20% or more of the total
voting power of the outstanding voting securities eligible to elect
directors of the corporation resulting from such Business Combination
and no Company 20% Stockholder increases its percentage of such total
voting power, and (C) at least a majority of the members of the board
of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the
Board's approval of the execution of the initial agreement providing
for such Business Combination (a "Non-Control Transaction"); or

(iv) the stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company.

Notwithstanding the foregoing, a Change in Control of the
Company shall not be deemed to occur solely because any person acquires
beneficial ownership of more than 20% of the Company Voting Securities as a
result of the acquisition of Company Voting Securities by the Company which, by
reducing the number of Company Voting Securities outstanding, increases the
percentage of shares beneficially owned by such person; provided, that if a
Change in Control of the Company would occur as a result of such an acquisition
by the Company (if not for the operation of this sentence), and after the
Company's acquisition such person becomes the beneficial owner of additional
Company Voting Securities that increases the percentage of outstanding Company
Voting Securities beneficially owned by such person, then a Change in Control of
the Company shall occur.

Notwithstanding anything in this Agreement to the contrary, if
Executive's employment is terminated prior to a Change in Control, and Executive
reasonably demonstrates that such termination was at the request of a third
party who has indicated an intention or taken steps reasonably calculated to
effect a Change in Control (a "Third Party") and who effectuates a Change in
Control, then for all purposes of this Agreement, the date of a Change in
Control shall mean the date immediately prior to the date of such termination of
employment.

(d) "Date of Termination" means (1) the effective date on
which Executive's employment by the Company terminates as specified in a prior
written notice by the Company or Executive, as the case may be, to the other,
delivered pursuant to Section 10 or (2) if Executive's employment by the Company
terminates by reason of death, the date of death of Executive.

(e) "Good Reason" means, without Executive's express written
consent, the occurrence of any of the following events after a Change in
Control:

(1) (i) the assignment to Executive of any duties or
responsibilities inconsistent in any adverse respect with Executive's
position(s), duties, responsibilities or status with the Company immediately
prior to such Change in Control (including any dimunition of such duties or
responsibilities) or (ii) an adverse change in Executive's reporting
responsibilities, titles or offices with the Company as in effect immediately
prior to such Change in Control;

(2) a reduction by the Company in Executive's rate of annual
base salary or annual target bonus opportunity (including any adverse change in
the formula for such annual bonus target) as in effect immediately prior to such
Change in Control or as the same may be increased from time to time thereafter;

(3) any requirement of the Company that Executive (i) be based
anywhere more than one hundred (100) miles from the facility where Executive is
located at the time of the Change in Control or (ii) travel on Company business
to an extent substantially greater than the travel obligations of Executive
immediately prior to such Change in Control;

(4) the failure of the Company to (i) continue in effect any
employee benefit plan or compensation plan in which Executive is participating
immediately prior to such Change in Control, unless Executive is permitted to
participate in other plans providing Executive with substantially comparable
benefits, or the taking of any action by the Company which would adversely
affect Executive's participation in or reduce Executive's benefits under any
such plan, (ii) provide Executive and Executive's dependents with welfare
benefits in accordance with the most favorable plans, practices, programs and
policies of the Company and its affiliated companies in effect for Executive and
Executive's dependents immediately prior to such Change in Control or provide
substantially comparable benefits at a substantially comparable cost to
Executive, (iii) provide fringe benefits in accordance with the most favorable
plans, practices, programs and policies of the Company and its affiliated
companies in effect for Executive immediately prior to such Change in Control,
or provide substantially comparable fringe benefits, or (iv) provide Executive
with paid vacation in accordance with the most favorable plans, policies,
programs and practices of the Company and its affiliated companies as in effect
for Executive immediately prior to such Change in Control;

(5) the failure of the Company to obtain the assumption
agreement from any successor as contemplated in Section 9(b); or

(6) termination by Executive for any reason during the "Window
Period" (as defined below).

Any event described in this Section 1(e)(1) through (4) which
occurs prior to a Change in Control, but was at the request of a Third Party who
effectuates a Change in Control, shall constitute Good Reason following a Change
in Control for purposes of this Agreement (treating the date of such event as
the date of the Change in Control) notwithstanding that it occurred prior to the
Change in Control. For purposes of this Agreement, any good faith determination
of Good Reason made by Executive shall be conclusive; provided, however, that an
isolated, insubstantial and inadvertent action taken in good faith and which is
remedied by the Company promptly after receipt of notice thereof given by
Executive shall not constitute Good Reason. Executive must provide notice of
termination of employment within ninety (90) days of Executive's knowledge of an
event constituting Good Reason or such event shall not constitute Good Reason
under this Agreement.

(f) "Nonqualifying Termination" means a termination of
Executive's employment (1) by the Company for Cause, (2) by Executive for any
reason other than Good Reason, (3) as a result of Executive's death, (4) by the
Company due to Executive's absence from Executive's duties with the Company on a
full-time basis for at least one hundred eighty (180) consecutive days as a
result of Executive's incapacity due to physical or mental illness or (5) as a
result of Executive's retirement (not including any early retirement) in
accordance with the Company's retirement policy generally applicable to its
salaried employees, as in effect immediately prior to the Change in Control, or
in accordance with any retirement arrangement established with respect to
Executive with Executive's written consent.

(g) "Subsidiary" means any corporation or other entity in
which the Company has a direct or indirect ownership interest of 50% or more of
the total combined voting power of the then outstanding securities of such
corporation or other entity entitled to vote generally in the election of
directors or in which the Company has the right to receive 50% or more of the
distribution of profits or 50% of the assets or liquidation or dissolution.

(h) "Termination Period" means the period of time beginning
with a Change in Control and ending two (2) years following such Change in
Control.

(i) "Window Period" means the 30-day period commencing
one (1) year after the date of a Change in Control.

2. Obligations of Executive. Executive agrees that if a Change
in Control shall occur, Executive shall not voluntarily leave the employ of the
Company without Good Reason until ninety (90) days following such Change in
Control.

3. Payments Upon Termination of Employment.

(a) If during the Termination Period the employment of
Executive shall terminate, other than by reason of a Nonqualifying Termination,
then the Company shall pay to Executive (or Executive's beneficiary or estate)
within thirty (30) days following the Date of Termination, as compensation for
services rendered to the Company:

(1) a lump-sum cash amount equal to the sum of (i) Executive's
base salary through the Date of Termination, to the extent not theretofore paid,
(ii) a pro rata portion of Executive's annual bonus in an amount at least equal
to (A) the greater of (1) Executive's target bonus for the fiscal year in which
the Change in Control occurs and (2) Executive's target bonus for the fiscal
year in which Executive's Date of Termination occurs, multiplied by (B) a
fraction, the numerator of which is the number of days in the fiscal year in
which the Date of Termination occurs through the Date of Termination and the
denominator of which is three hundred sixty-five (365), and (iii) any
compensation previously deferred by Executive other than pursuant to a
tax-qualified plan (together with any interest and earnings thereon) and any
accrued vacation pay, in each case to the extent not theretofore paid. For
purposes of the foregoing, annual bonus and target bonus amounts shall not
include any payments received by the Executive under the Company's 1999
Executive Stock Purchase Incentive Program ("LEPP").

(2) a lump-sum cash amount equal to (i) one and one-half (1
1/2) times Executive's highest annual rate of base salary during the 12-month
period prior to the Date of Termination, plus (ii) one and one-half (1 1/2)
times the greatest of (A) the highest bonus earned by Executive in respect of
the three (3) fiscal years of the Company immediately preceding the fiscal year
in which the Change in Control occurs or (B) Executive's target bonus for the
fiscal year in which the Change in Control occurs or (C) Executive's target
bonus for the fiscal year in which Executive's Date of Termination occurs. For
purposes of the foregoing, annual bonus and target bonus amounts shall not
include any payments received by the Executive under the LEPP. Any amount paid
pursuant to this Section 3(a)(2) shall reduce any other amount of severance
relating to salary or bonus continuation to be received by Executive upon
termination of employment of Executive under any severance plan or policy or
employment agreement of the Company.

(b) If during the Termination Period the employment of
Executive shall terminate, other than by reason of a Nonqualifying Termination,
the Company shall continue to provide, for a period of one and one-half (1 1/2)
years following the Date of Termination, Executive (and Executive's dependents
if applicable) with the same level of medical, dental, accident, disability and
life insurance benefits upon substantially the same terms and conditions
(including cost of coverage to Executive) as existed immediately prior to
Executive's Date of Termination (or, if more favorable to Executive, as such
benefits and terms and conditions existed immediately prior to the Change in
Control); provided, that, if Executive cannot continue to participate in the
Company plans providing such benefits, the Company shall otherwise provide such
benefits on the same after-tax basis as if continued participation had been
permitted. Notwithstanding the foregoing, in the event Executive becomes
reemployed with another employer and becomes eligible to receive welfare
benefits from such employer, the welfare benefits described herein shall be
secondary to such benefits during the period of Executive's eligibility, but
only to the extent that the Company reimburses Executive for any increased cost
and provides any additional benefits necessary to give Executive the benefits
provided hereunder.

(c) If during the Termination Period the employment of
Executive shall terminate by reason of a Nonqualifying Termination, then the
Company shall pay to Executive within thirty (30) days following the Date of
Termination, a cash amount equal to the sum of (1) Executive's base salary
through the Date of Termination, to the extent not theretofore paid, and (2) any
compensation previously deferred by Executive other than pursuant to a
tax-qualified plan (together with any interest and earnings thereon) and any
accrued vacation pay, in each case to the extent not theretofore paid. The
Company may make such additional payments, and provide such additional benefits,
to Executive as the Company and Executive may agree in writing.

4. Certain Additional Payments by the Company.

(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution by the Company or its affiliated companies to or for the benefit of
Executive (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise, but determined without regard to any
additional payments required under this Section 4) (a "Payment") would be
subject to the excise tax imposed by Section 4999 of the Internal Revenue Code
of 1986, as amended (the "Code"), or any interest or penalties are incurred by
Executive with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then Executive shall be entitled to receive an additional payment
(a "Gross-Up Payment") in an amount such that after payment by Executive of all
taxes (including any interest or penalties imposed with respect to such taxes)
including, without limitation, any income and employment taxes (and any interest
and penalties imposed with respect thereto) and Excise Tax, imposed upon the
Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to
the Excise Tax imposed upon the Payments. For purposes of determining the amount
of the Gross-up Payment, the Executive shall be deemed to pay federal income
taxes at the highest marginal rates of federal income taxation for the calendar
year in which the Gross-up Payment is to be made and applicable state and local
income taxes at the highest marginal rate of taxation for the calendar year in
which the Gross-up Payment is to be made, net of the maximum reduction in
federal income taxes which could be obtained from deduction of such state and
local taxes.

(b) Subject to the provisions of Section 4(a), all
determinations required to be made under this Section 4, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by the public accounting firm that is retained by the Company as of the date
immediately prior to the Change in Control (the "Accounting Firm") which shall
provide detailed supporting calculations both to the Company and Executive
within fifteen (15) business days of the receipt of notice from the Company or
the Executive that there has been a Payment, or such earlier time as is
requested by the Company (collectively, the "Determination"). In the event that
the Accounting Firm is serving as accountant or auditor for the individual,
entity or group effecting the Change in Control, Executive may appoint another
nationally recognized public accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Company and the Company shall enter into any agreement requested
by the Accounting Firm in connection with the performance of the services
hereunder. The Gross-up Payment under this Section 4 with respect to any
Payments shall be made no later than thirty (30) days following such Payment. If
the Accounting Firm determines that no Excise Tax is payable by Executive, it
shall furnish Executive with a written opinion to such effect, and to the effect
that failure to report the Excise Tax, if any, on Executive's applicable federal
income tax return will not result in the imposition of a negligence or similar
penalty. The Determination by the Accounting Firm shall be binding upon the
Company and Executive. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the Determination, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made ("Underpayment") or Gross-up Payments are made by the Company which should
not have been made ("Overpayment"), consistent with the calculations required to
be made hereunder. In the event that the Executive thereafter is required to
make payment of any additional Excise Tax, the Accounting Firm shall determine
the amount of the Underpayment that has occurred and any such Underpayment
(together with interest at the rate provided in Section 1274(b)(2)(B) of the
Code) shall be promptly paid by the Company to or for the benefit of Executive.
In the event the amount of the Gross-up Payment exceeds the amount necessary to
reimburse the Executive for his Excise Tax, the Accounting Firm shall determine
the amount of the Overpayment that has been made and any such Overpayment
(together with interest at the rate provided in Section 1274(b)(2) of the Code)
shall be promptly paid by Executive to or for the benefit of the Company.
Executive shall cooperate, to the extent his expenses are reimbursed by the
Company, with any reasonable requests by the Company in connection with any
contests or disputes with the Internal Revenue Service in connection with the
Excise Tax.

5. Withholding Taxes. The Company may withhold from all
payments due to Executive (or his beneficiary or estate) hereunder all taxes
which, by applicable federal, state, local or other law, the Company is required
to withhold therefrom.

6. Reimbursement of Expenses. If any contest or dispute shall
arise under this Agreement involving termination of Executive's employment with
the Company or involving the failure or refusal of the Company to perform fully
in accordance with the terms hereof, the Company shall reimburse Executive, on a
current basis, for all legal fees and expenses, if any, incurred by Executive in
connection with such contest or dispute (regardless of the result thereof),
together with interest in an amount equal to the prime rate of Citibank N.A.
from time to time in effect, but in no event higher than the maximum legal rate
permissible under applicable law, such interest to accrue from the date the
Company receives Executive's statement for such fees and expenses through the
date of payment thereof.

7. Termination of Agreement. This Agreement shall be effective
on the date hereof and shall terminate upon one year after the date of any
written notification from the Company to Executive terminating this Agreement;
provided, however, that this Agreement shall continue in effect following any
Change in Control which occurs prior to such termination with respect to all
rights and obligations accruing as a result of such Change in Control.

8. Scope of Agreement. Nothing in this Agreement shall be
deemed to entitle Executive to continued employment with the Company or its
Subsidiaries, and if Executive's employment with the Company shall terminate
prior to a Change in Control or following the end of the Termination Period,
Executive shall have no further rights under this Agreement.

9. Successors; Binding Agreement.

(a) This Agreement shall not be terminated by any Business
Combination. In the event of any Business Combination, the provisions of this
Agreement shall be binding upon the surviving or resulting corporation or the
person or entity to which such assets are transferred.

(b) The Company agrees that concurrently with any Business
Combination that does not constitute a Non-Control Transaction, it will cause
any successor or transferee unconditionally to assume, by written instrument
delivered to Executive (or his beneficiary or estate), all of the obligations of
the Company hereunder. Failure of the Company to obtain such assumption prior to
the effectiveness of any such Business Combination, shall be a breach of this
Agreement and shall constitute Good Reason hereunder and shall entitle Executive
to compensation and other benefits from the Company in the same amount and on
the same terms as Executive would be entitled hereunder if Executive's
employment were terminated following a Change in Control other than by reason of
a Nonqualifying Termination. For purposes of implementing the foregoing, the
date on which any such Business Combination becomes effective shall be deemed
the date Good Reason occurs, and shall be the Date of Termination if requested
by Executive.

(c) This Agreement shall inure to the benefit of and be
enforceable by Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
Executive shall die while any amounts would be payable to Executive hereunder
had Executive continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to such
person or persons appointed in writing by Executive to receive such amounts or,
if no person is so appointed, to Executive's estate.

10. Notice. (a) For purposes of this Agreement, all notices
and other communications required or permitted hereunder shall be in writing and
shall be deemed to have been duly given when delivered or five (5) days after
deposit in the United States mail, certified and return receipt requested,
postage prepaid, addressed as follows:

If to the Executive:
------------------------------------


If to the Company: Corporate Secretary
Commonwealth Industries, Inc.
PNC Building, 19th Floor
500 West Jefferson Street
Louisville, Kentucky 40202

or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

(b) A written notice of Executive's Date of Termination by the
Company or Executive, as the case may be, to the other, shall (i) indicate the
specific termination provision in this Agreement relied upon, (ii) to the extent
applicable, set forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of Executive's employment under the provision
so indicated and (iii) specify the termination date (which date shall be not
less than fifteen (15) nor more than sixty (60) days after the giving of such
notice). The failure by Executive or the Company to set forth in such notice any
fact or circumstance which contributes to a showing of Good Reason or Cause
shall not waive any right of Executive or the Company hereunder or preclude
Executive or the Company from asserting such fact or circumstance in enforcing
Executive's or the Company's rights hereunder.

11. Full Settlement; Resolution of Disputes. The Company's
obligation to make any payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Company may have against Executive or others. In no event shall Executive be
obligated to seek other employment or take other action by way of mitigation of
the amounts payable to Executive under any of the provisions of this Agreement
and, except as provided in Section 3(b)(3), such amounts shall not be reduced
whether or not Executive obtains other employment.

12. Employment with Subsidiaries. Employment with the Company
for purposes of this Agreement shall include employment with any Subsidiary.

13. GOVERNING LAW; VALIDITY. THE INTERPRETATION, CONSTRUCTION
AND PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE WITHOUT
REGARD TO THE PRINCIPLE OF CONFLICTS OF LAWS. THE INVALIDITY OR UNENFORCEABILITY
OF ANY PROVISION OF THIS AGREEMENT SHALL NOT AFFECT THE VALIDITY OR
ENFORCEABILITY OF ANY OTHER PROVISION OF THIS AGREEMENT, WHICH OTHER PROVISIONS
SHALL REMAIN IN FULL FORCE AND EFFECT.

14. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.

15. Miscellaneous. No provision of this Agreement may be
modified or waived unless such modification or waiver is agreed to in writing
and signed by Executive and by a duly authorized officer of the Company. No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time. Failure by Executive or the Company to insist upon strict compliance with
any provision of this Agreement or to assert any right Executive or the Company
may have hereunder, including without limitation, the right of Executive to
terminate employment for Good Reason, shall not be deemed to be a waiver of such
provision or right or any other provision or right of this Agreement. Except as
otherwise specifically provided herein, the rights of, and benefits payable to,
Executive, his estate or his beneficiaries pursuant to this Agreement are in
addition to any rights of, or benefits payable to, Executive, his estate or his
beneficiaries under any other employee benefit plan or compensation program of
the Company.

IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by a duly authorized officer of the Company and Executive has
executed this Agreement as of the day and year first above written.


COMMONWEALTH INDUSTRIES, INC. "EXECUTIVE"



BY:__________________________________ __________________________________
Mark V. Kaminski (Name)
President and Chief Executive Officer


Exhibit 10.15
-------------

Supplemental Executive Retirement Plan
Commonwealth Industries, Inc.
January 2003



Contents

- -------------------------------------------------------------------------------
Article 1. Establishment and Purpose 1

Article 2. Definitions 1

Article 3. Administration 4

Article 4. Eligibility and Participation 5

Article 5. Benefit Amount 5

Article 6. Springing Rabbi Trust 8

Article 7. Amendment and Termination 9

Article 8. Beneficiary Designation 9

Article 9. Miscellaneous 9

Appendix A-1



Commonwealth Industries, Inc.
Supplemental Executive Retirement Plan

Article 1. Establishment and Purpose
1.1. Establishment. Commonwealth Industries, Inc., a Delaware corporation
(the "Company"), hereby establishes, effective as of January 1, 2003 (the
"Effective Date"), a supplemental executive retirement plan for key employees as
described herein, which shall be known as the "Commonwealth Industries, Inc.
Supplemental Executive Retirement Plan" (the "SERP").

1.2. Purpose. The purpose of the SERP is to provide supplemental pension
benefits to a select group of management employees of the Company.

Article 2. Definitions
2.1. Definitions. Whenever used herein, the following terms shall have the
respective meanings set forth below and, when intended, such terms shall be
capitalized.

(a) "Account" means an amount maintained on the books of the
Company in the name of each Participant and reflecting the
obligations of the Company to the Participant under this
SERP. The specific Accounts under this SERP are listed in
Section 5.1 and described more fully in Article 5.

(b) "Annual Bonus" means any cash incentive award based on an
assessment of performance, payable by the Company to a
Participant with respect to the Participant's services
during a fiscal year, as determined under the Company's
Annual Incentive Plan, as amended from time to time, and
any successor plans established by the Company thereto.

(c) "Annual Compensation" means the aggregate total of the
Participant's Base Salary and Annual Bonus for services
rendered during a calendar year.

(d) "Annual Contribution Subaccount" means the Account where
the value of Company Contributions is credited at the end
of each Plan Year as determined at the Committee's
discretion.

(e) "Annual Incentive Plan" means the Commonwealth Industries,
Inc. Annual Variable Pay Plan.

(f) "Base Salary" means all regular, basic wages before
reduction for amounts deferred pursuant to the Deferred
Compensation Plan or any other plan of the Company, payable
in cash to a Participant for services, exclusive of any
Annual Bonus, Long-Term Incentive Awards, other special
fees, awards, or incentive compensation, allowances, or
amounts designated by the Company as payment toward or
reimbursement of expenses.

(g) "Beneficiary" means the person or persons designated in
accordance with Article 8 to receive any benefits under the
SERP in the event of a Participant's death.

(h) "Board" means the Board of Directors of the Company.

(i) "Cash Balance Restoration" means the Company contributions
made to a Participant's account under the Deferred
Compensation Plan to restore benefits that are limited
under the Qualified Cash Balance Plan due to all statutory
limitations imposed by the Internal Revenue Code.

(j) "Change in Control" shall have the same meaning as such
term is defined in the Company's Retention and Severance
Agreement, or any successor thereto, entered into with
certain key employees.

(k) "Code" means the Internal Revenue Code of 1986, as amended.

(l) "Committee" means the Management Development and
Compensation Committee of the Board, or any other committee
designated by the Board to administer the SERP, pursuant to
Section 3.1 herein.

(m) "Company" means Commonwealth Industries, Inc., a Delaware
corporation, or an affiliate, subsidiary, or any successor
thereto, as provided in Section 9.9 herein.

(n) "Company Contributions" mean the amounts credited at the
end of each Plan Year to a Participant's Annual
Contribution Subaccount as determined under Section 5.5.

(o) "Deferred Compensation Plan" means the Commonwealth
Aluminum Deferred Compensation Plan.

(p) "Determination Date" means the date on which the
Participant's termination of employment occurs.

(q) "Disability" has the same meaning as under the Company's
long-term disability plan, as amended from time to time or
superseded.

(r) "Effective Date" means the date the SERP becomes effective,
as set forth in Section 1.1 herein.

(s) "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended from time to time, or any successor act
thereto.

(t) "Long-Term Incentive Award" means any compensation award
payable to a Participant pursuant to a Company program
which establishes incentive award opportunities which are
contingent upon performance measured over periods greater
than one (1) year. The term "Long-Term Incentive Award"
shall include any stock awards such as stock options,
restricted stock, or performance shares.

(u) "Participant" means an individual designated by the
Committee and approved by the Board for participation in
the SERP in accordance with Article 4 herein.

(v) "Pay Cycle" means the normal recurring time period during
which employees of the Company receive Base Salary
payments.

(w) "Plan Year" means the consecutive twelve- (12-) month
period beginning each January 1 and ending December 31.

(x) "Prior Service Subaccount" means the Account where, at the
Committee's sole discretion, the value of a Participant's
initial one-time contribution for prior Years of Service
with the Company is credited.

(y) "Qualified 401(k) Plan" means the Commonwealth
Industries, Inc. 401(k) Plan.

(z) "Qualified Cash Balance Plan" means the Commonwealth
Industries, Inc. Cash Balance Plan.

(aa) "Qualifying Termination of Employment" means a termination
of a Participant's employment that qualifies for severance
benefits as defined in the Participant's Retention and
Severance Agreement.

(ab) "Retention and Severance Agreement" means the employment
agreements entered into with certain key executives of the
Company, or any successors thereto.

(ac) "Retirement" means any voluntary termination of employment
after age fifty-five (55).

(ad) "SERP" means this Commonwealth Industries, Inc.
Supplemental Executive Retirement Plan.

(ae) "SERP Account" means the aggregate total balance of
available funds in the Participant's Annual Contribution
Subaccount, Prior Service Subaccount, and Start-Up
Enhancement Subaccount.

(af) "Spousal Consent" means the written consent of a
Participant's spouse to make a change in the Beneficiary
designated under this SERP to someone other than the
Participant's spouse.

(ag) "Start-Up Enhancement Subaccount" means the Account where,
at the Committee's sole discretion, the value of a
Participant's initial one-time contribution is credited to
reflect a mid- or late-career hire.

(ah) "Target Bonus" means a Participant's target bonus
established under the Annual Incentive Plan for the Plan
Year.

(ai) "Years of Service" shall have the same meaning as such
term is defined in the Company's Qualified 401(k) Plan.

2.2. Gender and Number. Except when otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.

Article 3. Administration
3.1. The Committee. The SERP shall be administered by the Committee, or by
any other committee designated by the Board to administer the SERP. The
Committee may delegate any or all of its administrative responsibilities
hereunder.

3.2. Authority of the Committee and the Board. Subject to the provisions
herein, the Board and Committee shall have the full power to amend or terminate
the SERP at any time (subject to Article 7), to prescribe, amend, and rescind
any rules, forms, and procedures as it deems necessary or appropriate for the
proper administration of the SERP, to select employees for participation in the
SERP, to determine the terms and conditions of each employee's participation, to
construe and interpret the SERP and any agreement or instrument entered into
hereunder, and to establish, amend, or waive procedures for the SERP's
administration. Further, the Committee and the Board shall have full power to
make any other determination that may be necessary or advisable for the SERP's
administration.

3.3. Actions by the Committee or the Board. No member of the Committee or
the Board (each such person a "Covered Person") shall have any liability to any
person (including any employee) for any action taken or omitted to be taken or
any determination made in good faith with respect to the SERP. Each Covered
Person shall be indemnified and held harmless by the Company against and from
any loss, cost, liability, or expense (including attorneys' fees) that may be
imposed upon or incurred by such Covered Person in connection with or resulting
from any action, suit, or proceeding to which such Covered Person may be a party
or in which such Covered Person may be involved by reason of any action taken or
omitted to be taken under the SERP and against and from any and all amounts paid
by such Covered Person, with the Company's approval, in settlement thereof, or
paid by such Covered Person in satisfaction of any judgment in any such action,
suit, or proceeding against such Covered Person, provided that the Company shall
have the right, at its own expense, to assume and defend any such action, suit,
or proceeding and, once the Company gives notice of its intent to assume the
defense, the Company shall have sole control over such defense with counsel of
the Company's choice. The foregoing right of indemnification shall not be
available to a Covered Person to the extent that a court of competent
jurisdiction in a final judgment or other final adjudication, in either case,
not subject to further appeal, determines that the acts or omissions of such
Covered Person giving rise to the indemnification claim resulted from such
Covered Person's bad faith, fraud, or willful misconduct. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which Covered Persons may be entitled under the Company's Certificate of
Incorporation or Bylaws, as a matter of law, or otherwise or any other power
that the Company may have to indemnify such persons or hold them harmless.

3.4. Decisions Binding. All determinations and decisions made by the
Committee or the Board and all related orders or resolutions of the Committee or
the Board shall be final, conclusive, and binding on all persons, including the
Company, its employees, Participants, and their estates and beneficiaries.

Article 4. Eligibility and Participation
4.1. Eligibility. Persons eligible to participate in this SERP shall be
limited to full-time, salaried employees of the Company who are determined to be
"key employees" by the Committee and who are approved for participation by the
Board. Further, to be eligible, an employee must be among a select group of
management or highly compensated employees of the Company, such that the SERP
qualifies as a plan referred to in Sections 201(2), 301(a)(3), 401(a)(1) of
ERISA, as further described in Section 9.1 herein.

4.2. Participation. The Board, at its sole and absolute discretion,
reserves the right to approve the participation of any and all employees who
have been designated by the Committee as being "key employees" and therefore
eligible to participate in this SERP. The initial Participants are identified in
Appendix 1 as referenced hereto.

No employee shall have the right to be selected to participate in this
SERP or, having been so selected, to be selected to continue to participate in
any future Plan Year. Further, nothing in the SERP shall interfere with or limit
in any way the right of the Company to terminate any Participant's employment at
any time, nor confer upon any Participant a right to continue in the employ of
the Company.

In the event a Participant is deemed by the Committee to be ineligible to
continue participation in the SERP for any reason, such individual shall become
an inactive Participant, retaining all the rights (subject to the terms of the
SERP) relating to amounts credited to such Participant's SERP Account, as
described under the SERP. In such event, the Committee or the Board, at its sole
and absolute discretion, may immediately cash out a Participant's vested and/or
unvested contributions under this SERP in a single lump sum. Notwithstanding the
above, unless a Participant is cashed out of his entire unvested contributions,
a Participant shall continue to vest in all contributions credited to his SERP
Account prior to becoming an inactive Participant as deemed by the Committee.

Furthermore, the Committee and the Board reserve the right to terminate
the plan at any time and pay out all Participant SERP Account balances in full
satisfaction of all Participant benefits under this SERP. After all SERP Account
balances have been distributed in full to a Participant or to his Beneficiary,
all liability to such Participant or to his Beneficiary under this SERP shall
cease.

Article 5. Benefit Amount
5.1. Establishment of Accounts. A SERP Account shall be established for
each Participant that shall include the following subaccounts, as applicable to
the Participant:

(a) Annual Contribution Subaccount;

(b) Prior Service Subaccount; and

(c) Start-Up Enhancement Subaccount.

5.2. Maintenance of Accounts. The Committee shall establish and maintain a
separate SERP Account in the name of each Participant to which it shall credit
all amounts allocated in accordance with Section 5.1 and all investment
experience as determined in accordance with Section 5.3 and debit all payments
made pursuant to Section 5.6.

5.3. Investment Fund Elections. The investment options offered to
Participants shall mirror the investment options available in the Company's
Deferred Compensation Plan with the exception of Company stock not being offered
as an investment option. Each Participant's SERP Account shall be valued based
upon the performance of its corresponding Deferred Compensation Plan investment
fund or funds selected by the Participant. Participants shall designate, in
multiples of five percent (5%), one (1) or more of the funds referenced in the
Deferred Compensation Plan for the purpose of attributing investment experience.
Participants shall be allowed to change future contributions or transfer
balances between funds within the SERP Account consistent with the rules allowed
under the Deferred Compensation Plan.

5.4. Vesting. A Participant's SERP benefits shall vest according to the
schedule that follows:

(a) A Participant shall become fully vested in his Annual
Contribution Subaccount upon completion of five (5) Years
of Service from the Participant's original date of hire.

(b) A Participant shall vest in his Prior Service Subaccount
and Start-Up Enhancement Subaccount ratably at ten percent
(10%) per Year of Service beginning from the Effective Date
of the SERP or the original date of hire, if later;
provided, however, that a Participant shall become fully
vested in the Prior Service Subaccount and Start-Up
Enhancement Subaccount if a Participant remains employed
through age sixty-five (65).

(c) Accelerated full vesting of a Participant's SERP Account
shall occur upon the occurrence of either of the following
events:

(i) Upon the Participant's death; or

(ii) Upon the Participant's Disability.

A Participant shall forfeit all unvested benefits under the SERP in the
event that the Participant terminates employment with the Company for any reason
(other than death or Disability) prior to becoming fully vested in accordance
with this Section 5.4.

Notwithstanding the above, the Committee may accelerate the vesting of any
or all SERP benefits at its discretion.

5.5. SERP Benefit. At the Committee's discretion, the Company may make a
contribution to the Prior Service Subaccount and/or the Start-Up Enhancement
Subaccount upon a Participant's initial eligibility in the SERP, or at other
times deemed appropriate by the Committee.

Unless otherwise provided by the Committee in its sole discretion, at the
end of each Plan Year a Participant's Annual Contribution Account shall be
credited with an amount equal to 10.7% of the Participant's Annual Compensation
less an offset of the Company matches and contributions from the following
plans:

(a) Qualified Cash Balance Plan; and

(b) Cash Balance Restoration provided under the Deferred
Compensation Plan.

5.6. Timing and Manner of Payment. The Company shall commence the payment
of a Participant's SERP Account balance immediately upon the Participant's
termination of employment from the Company. Upon a termination of employment due
to Retirement, death, Disability, or a Qualifying Termination of Employment
following a Change in Control of the Company, payment of a Participant's SERP
Account balance shall be made in a single lump-sum payment or by means of
installments in accordance with the Participant's election pursuant to Section
5.7.

(a) A lump-sum payment shall be made in cash within thirty (30)
calendar days of a Participant's Determination Date, or as
soon thereafter as practicable.

(b) Participants may elect for annual installments over a
period between five (5) to thirty (30) years. The initial
payment shall be made in cash within thirty (30) calendar
days of the Participant's Determination Date, or as
soon thereafter as practicable. The remaining installment
payments shall be made in cash on each successive
anniversary thereafter until the Participant's entire
SERP Account balance has been paid out. Earnings shall
accrue on the amounts in the Participant's SERP Account,
as provided in Section 5.3 of this SERP. The amount of
each installment payment shall be equal to the
Participant's SERP Account balance immediately prior to
each such payment, multiplied by a fraction, the numerator
of which is one (1) and the denominator of which is the
number of installment payments then remaining.

Notwithstanding the foregoing, in the event that a Participant's SERP
Account balance at any payout date is less than ten thousand dollars ($10,000),
the Committee shall have the discretion to pay such SERP Account balance out in
a single lump sum as soon as administratively practicable.

Unless otherwise provided by the Committee in its sole discretion,
notwithstanding anything to the contrary in this SERP, a Participant's SERP
Account balance shall be paid out in a single lump sum in the event that a
Participant's employment with the Company is terminated for reasons other than a
Participant's Retirement, death, Disability, or a Qualifying Termination of
Employment following a Change in Control of the Company.

5.7. Payout Election Forms. Participants shall elect the form of benefit
payment they wish to receive from their SERP Account balance for each of the
following types of termination of employment:

(a) Upon the Participant's Retirement;

(b) Upon the Participant's death;

(c) Upon the Participant's Disability; and

(d) Upon the Participant's Qualifying Termination of Employment
following a Change in Control of the Company.

Participants shall complete a separate payment election form for each type
of termination as stated above, as may be permitted from time to time by the
Company; provided, however, that no such election shall be valid unless filed in
writing with the Company at least three hundred and sixty-five (365) calendar
days prior to such Participant's termination of employment with the Company. At
the expiration of such three hundred and sixty-five (365) calendar day period,
any prior election shall cease to be effective. If a Participant does not make a
payout election, or no valid election is in effect, then the Participant's
payment shall be made in the form of a lump sum.

Article 6. Springing Rabbi Trust
6.1. Establishment of a Rabbi Trust. The Company may, at its sole and
absolute discretion, at any time after the Effective Date, establish an
revocable rabbi trust (which shall be a grantor trust within the meaning of Code
Sections 671-677) for the benefit of Participants and beneficiaries of
Participants, as appropriate. Any rabbi trust so created shall have an
independent trustee (such trustee to have a fiduciary duty to carry out the
terms and conditions of this SERP) as selected by the Company. The provisions of
this Article 6 shall apply only in the event that the Company exercises its
discretion under this Section 6.1 and establishes a rabbi trust.

6.2. Terms of the Rabbi Trust. Assets contained in the rabbi trust shall
at all times be specifically subject to the claims of the Company's general
creditors in the event of bankruptcy or insolvency; such terms shall be
specifically defined within the provisions of the rabbi trust, along with a
required procedure for notifying the trustee of any such bankruptcy or
insolvency.

6.3. Funding of the Rabbi Trust. Subject to the other provisions of this
Section 6.3, at the sole and absolute discretion of the Committee, the Company
may contribute cash, cash equivalents, or property to the rabbi trust for the
benefit of Participants and Participants' beneficiaries, as the Committee deems
appropriate.

6.4. Distributions from the Rabbi Trust. Following a Change in Control of
the Company, distributions of a Participant's benefits shall be made from the
rabbi trust directly to the Participant or the Participant's spouse or
beneficiaries in accordance with Article 5 herein (as the case may be) upon such
Participant's termination of employment.

To the extent any benefits provided under this SERP are actually paid from
the rabbi trust, the Company shall have no further obligation with respect
thereto, but to the extent not so paid, such benefits shall remain the
obligation of, and shall be paid by, the Company.

Article 7. Amendment and Termination
The Board and the Committee hereby reserve the right to amend, modify,
and/or terminate the SERP at any time. However, no such amendment or termination
shall in any manner adversely affect the rights or benefits of any Participant's
previously vested contributions under this SERP without the consent of the
Participant.

Article 8. Beneficiary Designation
Each Participant shall be entitled to designate a Beneficiary or
Beneficiaries by filing a signed, written notice of such designation with the
Company, in such form as the Committee may prescribe. A Participant may file a
Beneficiary designation form with the Company at any time and the filing of any
such form shall act as an immediate revocation as to any prior Beneficiary
designations. In addition, in the case of a married Participant, any Beneficiary
designation of someone other than the Participant's spouse shall not be valid
unless accompanied by a Spousal Consent. In the event of a dissolution of
marriage, a Participant's Beneficiary designation shall be deemed automatically
revoked to the extent that a Beneficiary is the Participant's former spouse.

Article 9. Miscellaneous
9.1. Unfunded Plan. This SERP is intended to be an unfunded plan
maintained primarily to provide supplemental retirement benefits for "a select
group of management or highly compensated employees" within the meaning of
Sections 201(2), 301(a)(3), and 401(a)(1) of ERISA, and therefore is further
intended to be exempt from the provisions of Parts 2, 3, and 4 of Subtitle B of
Title I of ERISA. Accordingly, the Committee may terminate the SERP, subject to
Article 7 herein, for any or all Participants, in order to achieve and maintain
this intended result.

9.2. General Unsecured Creditor. Nothing contained herein shall give any
Participant, Beneficiary, or their legal representative any rights to assets
that are greater than those of a general unsecured creditor of the Company.

9.3. Claims Procedure. The Committee shall provide adequate written notice
within ninety (90) days to a Participant or Beneficiary whose claim for benefits
under the SERP has been denied, setting forth (a) the specific reason or reasons
for such denial, (b) the specific reference to pertinent provisions of this SERP
on which such denial is based, (c) a description of any additional material or
information necessary for the Participant or Beneficiary to perfect his claim
and an explanation why such material or such information is necessary, (d)
appropriate information as to the steps to be taken if the Participant or
Beneficiary wishes to submit the claim for review, and (e) the time limits for
requesting a review, including a statement of the Participant's or Beneficiary's
right to bring a civil action under section 502(a) of ERISA following an adverse
benefit determination on review.

9.4. No Right to Employment. Nothing in this SERP shall be construed as
conferring upon any Participant any right to continue in the employment of the
Company, nor shall it interfere with the rights of the Company to terminate the
employment of any Participant and/or to take any personnel action affecting any
Participant without regard to the effect which such action may have upon such
Participant as a recipient or prospective recipient of benefits under the SERP.

9.5. Payment to Incompetent. If any person entitled to benefits under this
SERP shall be a minor or shall be either physically or mentally incompetent in
the judgment of the Committee, such benefits may be paid to a court-appointed
guardian or trust specifically designated for the benefit of the minor or
incompetent Beneficiary. In the event of such payment, the Company, the Board,
and the Committee shall be discharged from all further liability for such
payment.

9.6. Costs of the SERP. All costs of implementing and administering the
SERP, and all costs incurred in providing the benefits described herein, shall
be borne by the Company.

9.7. Tax Withholding. The Company shall have the right to require
Participants to remit to the Company an amount sufficient to satisfy federal,
state, and local tax withholding requirements, or to deduct from all payments
made pursuant to the SERP amounts sufficient to satisfy such withholding
requirements.

9.8. Nontransferability. Participants' or Beneficiaries' rights to
benefits provided hereunder may not be sold, transferred, assigned, or otherwise
alienated or hypothecated, other than by will or by the laws of descent and
distribution. In no event shall the Company assign or transfer its obligations
under the SERP except to (a) any corporation or partnership which acquires all
or substantially all of the Company's assets or (b) any corporation or
partnership into which the Company may be merged or consolidated.

9.9. Successors. All obligations of the Company under the SERP shall be
binding upon any successor to the Company, whether the existence of such
successor is the result of a direct or indirect purchase, merger, consolidation,
or otherwise, of all or substantially all of the business and/or assets of the
Company.

9.10. Severability. In the event any provision of the SERP shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the SERP, and the SERP shall be construed and enforced as
if the illegal or invalid provision had not been included.

9.11. Transfer of Employment. Notwithstanding anything to the contrary in
this SERP, the transfer of employment of a Participant within the Company shall
not be deemed a termination of the Participant's employment with the Company for
the purposes of this SERP.

9.12. Applicable Law. To the extent not preempted by federal law, the SERP
shall be governed by and construed in accordance with the laws of the state of
Kentucky without giving effect to principles of conflicts of laws.

Adopted February 11, 2003


Appendix

Henry Del Castillo
Mark Kaminski
Pat King
Don Marsh
Greg Givan
Kathy Gould
Lenna Macdonald
Bill Toler
John Wasz
Bill Witherspoon


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

Portions of the annual report to stockholders for the year ended December 31,
2002 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,
2002.


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 7
Financial Data

(B) Part II, item 7 Management's Discussion and pages 8
Analysis of Financial Condition thru 13
and Results of Operations

Part II, item 7A Quantitative and Qualitative pages 12
Disclosures About Market Risk thru 13

(C) Part II, item 8 Consolidated Balance Sheet page 14

Part II, item 8 Consolidated Statement of Operations page 15

Part II, item 8 Consolidated Statement of page 15
Comprehensive Income (Loss)

Part II, item 8 Consolidated Statement of page 16
Changes in Stockholders'
Equity

Part II, item 8 Consolidated Statement of page 17
Cash Flows

Part II, item 8 Notes to Consolidated pages 18
Financial Statements thru 42

Part II, item 8 Report of Independent Auditors page 43

The items follow:

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

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


Year ended December 31,
-------------------------------------------------------------------
2002 2001 2000 1999 1998
---------- --------- ---------- ---------- ----------

Statement of Operations Data:
Net sales $ 966,238 $ 920,504 $1,125,142 $ 1,074,939 $ 992,004
Gross profit 67,311 47,031 82,205 86,865 69,455
Operating income (loss) (2) 20,334 (178,747) 21,929 28,440 21,421
Income (loss) before cumulative effect of
change in accounting principle (2) 9,116 (193,552) 3,491 11,011 143
Cumulative effect of change in accounting principle (3) (25,327) - - - -
Net income (loss) (1) (2) (3) (16,211) (193,552) 3,491 11,011 143

Net income (loss) per share data: (1) (2)
Basic
Income (loss) before cumulative effect of
change in accounting principle $ 0.57 $ (11.78) $ 0.21 $ 0.68 $ 0.01
Cumulative effect of change in accounting princple (3) (1.58) - - - -
---------- --------- ---------- ---------- ----------
Net income (loss) $ (1.01) $ (11.78) $ 0.21 $ 0.68 $ 0.01
========== ========= ========== ========== ==========

Diluted
Income (loss) before cumulative effect of
change in accounting principle $ 0.57 $ (11.78) $ 0.21 $ 0.68 $ 0.01
Cumulative effect of change in accounting princple (3) (1.57) - - - -
---------- --------- ---------- ---------- ----------
Net income (loss) $ (1.00) $ (11.78) $ 0.21 $ 0.68 $ 0.01
========== ========= ========== ========== ==========

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

Operating Data:
Depreciation $ 21,142 $ 30,053 $ 33,683 $ 30,620 $ 28,621
Amortization $ 984 $ 5,276 $ 5,668 $ 5,893 $ 6,107
Capital expenditures $ 16,321 $ 9,002 $ 18,445 $ 36,715 $ 33,650
Aluminum products business:
Net sales $ 853,849 $ 801,786 $ 990,961 $ 944,438 $ 865,043
Shipments (pounds) 905,038 801,274 966,597 1,022,680 884,169
Electrical products business:
Net sales $ 112,389 $ 118,718 $ 134,181 $ 130,501 $ 126,961
Shipments (feet) 486,709 509,326 592,863 576,205 517,380

Balance Sheet Data:
Working capital $ 138,832 $ 121,483 $ 138,462 $ 123,067 $ 115,192
Total assets 428,904 439,632 655,340 706,322 648,399
Total debt 125,000 125,000 125,000 125,000 125,000
Total stockholders' equity 107,187 134,166 338,393 336,676 326,529


(1) 2002, 2001, 2000 and 1999 net income (loss) and net income (loss) per share
reflect the Company's change in its inventory accounting method from
first-in, first-out (FIFO) method to the last-in, first-out (LIFO) method
effective January 1, 1999.

(2) 2001 includes a non-cash asset impairment charge of $167.3 million or
$10.18 per basic and diluted share. The asset impairment charge had no tax
effect. See note 2 to the consolidated financial statements for additional
information.

(3) 2002 includes a non-cash goodwill impairment charge of $25.3 million or
$1.58 per basic share and $1.57 per diluted share which was recorded as a
cumulative change in accounting principle in accordance with Statement of
Financial Accounting Standards No. 142. The goodwill impairment charge had
no tax effect. See note 3 to the consolidated financial statements for
additional information.



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, 2002, 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, 2002 and the notes thereto including note 1 which
describes the Company's significant accounting policies including its use of
estimates. See the caption entitled "Application of Critical Accounting
Policies" in this section for further information. 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
the Private Securities Litigation Reform Act of 1995 and involve risks and
uncertainties that could render them materially different, including, but not
limited to, the effect of global economic conditions, the ability to achieve the
level of cost savings or productivity improvements anticipated by management,
the effect (including possible increases in the cost of doing business)
resulting from war or terrorist activities or political uncertainties, the
impact of competitive products and pricing, product development and
commercialization, availability and cost of critical raw materials, 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
commercial 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,
although 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 2002, net sales of the Company's aluminum sheet products
increased 6% from the year 2001 while shipment volume increased 13% from 2001.
The positive impact of this increased volume, combined with lower depreciation
and amortization charges, more than offset the impact of lower material margins
in 2002 versus 2001 and helped to increase profitability of the aluminum
business for 2002 compared to 2001. Material margins which were lower for the
full year of 2002 versus 2001 did increase in the third and fourth quarter of
2002 compared to the third and fourth quarter of 2001 due to firmer aluminum
sales pricing coupled with lower metal costs and better scrap availability.
During 2001, net sales of the Company's aluminum sheet products
decreased 19% from the year 2000 while shipment volume decreased 17% from 2000.
Demand for the Company's aluminum sheet products decreased in 2001 reflecting
ongoing weak business conditions throughout the economy generally in 2001 and
specifically across the Company's various markets, with the exception of
residential building and construction, which remained relatively strong during
2001 as a result of interest rate reductions throughout 2001. Material margins
declined during 2001 due to a highly competitive marketplace.
Demand for the Company's electrical products decreased during 2002.
Shipments were down 4% compared to 2001 as business conditions remained
competitive and commercial construction activity declined. Material margins for
2002 increased 2% from 2001. The reduction in material costs per foot in 2002
compared to 2001 more than offset the lower net selling prices and contributed
to the slight material margin improvement in 2002 versus 2001. The Company's
electrical products business continued to report operating profits which were
slightly increased over 2001 principally due to a decrease in selling, general
and administrative expenses and the elimination of goodwill amortization expense
in 2002.
Demand for the Company's electrical products also decreased during
2001. Shipments were down 14% compared to the year 2000 due to weak customer
demand. Material margins for 2001 were up 19% from the margins experienced in
2000 due to increased selling prices on armored cable products and a reduction
in material costs per foot. The higher material margins for 2001 more than
offset the effect of the decline in shipment volume and higher manufacturing
unit costs compared to the year 2000.
During the second quarter of 2002, the Company completed its
transitional test of goodwill upon the adoption of Statement of Financial
Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS No.
142"). Pursuant to this test, the Company recorded a charge of $25.3 million or
$1.57 per basic share and $1.58 per diluted share (before and after tax), as a
cumulative effect of a change in accounting principle, to reflect the impairment
of goodwill on the balance sheet as of January 1, 2002. See the caption entitled
"Cumulative effect of change in accounting principle" in the following section
and note 3 to the consolidated financial statements for additional information.
During the fourth quarter of 2001, the Company recorded non-cash asset
impairment charges totaling $167.3 million or $10.18 per basic and diluted share
(before and after tax) to reduce the carrying amount of property, plant and
equipment and goodwill in accordance with the provisions of Statement of
Financial Accounting Standards No. 121 ("SFAS No. 121"). See the caption
entitled "Asset Impairment Charges" in the following section and note 2 to the
consolidated financial statements for additional information.
In addition, during 2001 and 2000 LIFO inventory quantities were
reduced, resulting in a partial liquidation of the LIFO bases, the effect of
which decreased the net loss in 2001 by approximately $0.03 million, which had
no effect on the per share amount and increased net income for 2000 by
approximately $4.5 million, or $0.27 per share. See note 5 to the consolidated
financial statements for additional information.

Application of Critical Accounting Policies
The Company's discussion and analysis of financial condition and
results of operations is based upon the Company's consolidated financial
statements, which have been prepared in conformity with accounting principles
generally accepted in the United States of America. 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. The Company's most critical accounting policies require the use of
estimates relating to the valuation of property, plant and equipment and
goodwill, assumptions for computing pension and postretirement benefits
obligations, allowance for uncollectible accounts receivable, assumptions for
computing workers' compensation liabilities and environmental liabilities.
Upon adoption of SFAS No. 142, the Company reduced the carrying value
of goodwill associated with its Alflex electrical products subsidiary. Future
assessments of the carrying value of the $48 million of goodwill that remains
are dependent on management's estimates of the value of Alflex. Because of the
competitive and dynamic nature of Alflex's industry, it is reasonably possible
that management's estimate of the value of Alflex may change. Any reduction in
the estimate of the value of Alflex will likely result in a similar reduction in
the carrying value of Alflex's long-lived assets.
Pension and postretirement benefits obligations accounting is intended
to reflect the recognition of future benefit costs over the covered employees'
approximate service periods based on the terms of the plans and the investment
and funding decisions made by the Company. The Company is required to make
assumptions regarding such variables as the expected long-term rate of return on
plan assets and the discount rate applied to determine service cost and interest
cost to arrive at pension income or expense for the year. As of December 31,
2002 and 2001, the Company used expected long-term rates of return on pension
plan assets of 8.50% and 8.75%, respectively. The postretirement plan has no
assets. The Company analyzed the rates of returns on assets used and determined
that these rates are reasonable based upon the plans' historical performance
relative to the overall markets and mix of assets. The Company will continue to
assess the expected long-term rate of return on plan assets assumptions for each
plan based on relevant market conditions and will make adjustments to the
assumptions as appropriate. A one percent decrease in the estimated return on
plan assets would result in an increase in net pension expense of $0.7 million
for 2003. As of December 31, 2002 and 2001, the Company used discount rates of
6.75% and 7.50%, respectively, for both the pension and postretirement plans.
The decrease in the discount rate used in the current year correlates with a
decline in interest rates on noncallable, high quality bonds over the past year.
The Company bases its discount rate used on Moody's Aa bond index plus an
adjustment upward to the next quarter percentage point. See notes 10 and 11 to
the consolidated financial statements for the full list of assumptions for the
pension and postretirement plans.
The Company has previously recorded accruals totaling $7.4 million
relating to various environmental matters, representing the Company's current
best estimate of the cost to remediate these matters. The Company estimates that
total cost to remediate these matters could be as much as $17 million should all
matters be ultimately concluded in a manner least favorable to the Company.

Results of Operations for 2002, 2001 and 2000
Net Sales. Net sales for 2002 increased 5% to $966.2 million (including
$112.4 million from Alflex) from $920.5 million (including $118.7 million from
Alflex) in 2001. The increase is due to increased shipments which more than
offset a decrease in net selling prices. The increased shipments resulted from
increased demand for aluminum products across all of the Company's aluminum
products' markets and particularly the strength of a resilient residential
construction market. Unit sales volume of aluminum products increased 13% to 905
million pounds in 2002 from 801 million pounds in 2001. Alflex unit sales volume
was 487 million feet for 2002 compared to 509 million feet for 2001. The
decrease was primarily due to ongoing softness in commercial construction
activity.
Net sales for 2001 decreased 18% to $920.5 million (including $118.7
million from Alflex) from $1.13 billion (including $134.2 million from Alflex)
in 2000. The decrease was due to continued weak customer demand in 2001
affecting virtually all of the Company's markets with the exception of
residential building and construction which remained relatively strong during
2001 as a result of interest rate reductions throughout 2001. Unit sales volume
of aluminum products decreased 17% to 801 million pounds in 2001 from 967
million pounds in 2000. Alflex unit sales volume was 509 million feet for 2001
compared to 593 million feet for 2000.
Gross Profit. Gross profit increased 43% (to 7.0% of net sales) in 2002
after a 43% decrease (to 5.1% of net sales) in 2001 from 2000 gross profit (7.3%
of net sales). The 2002 increase was related entirely to the aluminum business
and due primarily to increased volumes and greater manufacturing efficiencies,
improving material margins in the last half of 2002, lower outside processing
costs, lower natural gas costs plus lower depreciation expense as a result of
asset impairment charges recorded in the fourth quarter of 2001. In addition,
the gross profit for 2002 benefited from a deferral of the Company's regular
December shut-down and maintenance of aluminum production facilities, which
permitted increased production and sales in late 2002 and resulted in a deferral
to January 2003 of approximately $1.5 million of shut-down expenses, principally
relating to labor and purchased parts. All the above factors more than offset
the lower material margins experienced during the first half of 2002 which were
due to higher scrap acquisition costs for the first six months of 2002 versus
the same period in 2001. Scrap acquisition costs declined during the last half
of 2002 as scrap availability increased and coupled with lower primary metal
costs and firmer pricing for aluminum products translated into higher material
margins in the last half of 2002 versus the first half of 2002; however full
year 2002 material margins were lower than full year 2001 material margins.
Alflex's gross profit for 2002 versus 2001 was down 10% as decreased net sales
revenue resulting from decreased shipments and lower selling prices offset the
improved material margins. The lower net selling prices reflected the impact of
the increasingly competitive price environment in 2002.
The 2001 decrease from 2000 was related entirely to the aluminum
business where a highly competitive marketplace resulted in lower shipment
volumes and lower material margins. On the other hand, Alflex increased its
gross profit for 2001 versus the year 2000 by 32% due to improved material
margins.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses decreased 14% in 2002 from 2001. Contributing to the
decrease were two factors which increased the 2001 selling, general and
administrative expenses. The factors were a $3.2 million increase in the
provision for uncollectible accounts receivable, principally relating to Chapter
11 bankruptcy filings by certain of the Company's customers, and a $2.5 million
additional expense relating to the termination of the Company's 1999 Executive
Incentive Plan. Limiting the amount of the decrease were increased professional
service costs associated with the Company's information system redesign and
accruals for employee incentive plans.
Selling, general and administrative expenses decreased 2% in 2001 from
2000. Contributing to the decrease were lower incentive accruals, lower on-going
salary and related employee benefits expense due to the reductions in the
workforce, lower depreciation and one time severance expenses recorded in the
fourth quarter of 2000. Limiting the amount of the decrease was the $3.2 million
increase in the provision for uncollectible accounts receivable and the $2.5
million additional expense relating to the termination of the Company's 1999
Executive Incentive Plan.
Amortization of Goodwill. Goodwill was no longer amortized beginning
January 2002 as required by the Statement of Financial Accounting Standards No.
142, "Goodwill and Other Intangible Assets". See note 3 to the consolidated
financial statements for additional information. Amortization of goodwill was
$4.0 million in 2001 and $4.5 million in 2000. The decrease in amortization in
2001 was due to the write-down of goodwill in the Company's aluminum business
during the fourth quarter of 2001.
Asset Impairment Charges. Non-cash asset impairment charges of $167.3
million were recorded in 2001 related to the impairment of certain property,
plant and equipment and goodwill in the Company's aluminum business segment. The
$167.3 million asset impairment charges were composed of $85.4 million of
property, plant and equipment write-downs and $81.9 million of goodwill
write-downs. See note 2 to the consolidated financial statements for additional
information.
Operating Income (Loss). Operating income increased $199.1 million in
2002 to operating income of $20.3 million, after having decreased $200.7 million
in 2001 to an operating loss of $178.7 million, in each case reflecting the
asset impairment charges and the other factors mentioned above.
Other Income (Expense), Net. Other income (expense), net increased by
$0.7 million in 2002 compared to 2001 primarily due to increased purchase
discounts. Other income (expense), net in 2000 includes $0.8 million of income
related to insurance claims filed for a fire that interrupted business at the
Company's Uhrichsville, Ohio aluminum mill.
Interest Expense, Net. Interest expense in 2002 decreased 2% to $15.1
million from $15.5 million in 2001. The decrease was primarily due to lower
interest rates under the Company's receivables purchase agreement combined with
a reduction in amounts outstanding under the agreement which more than offset a
reduction in investment interest income.
Interest expense in 2001 decreased 23% to $15.5 million from $20.1
million in 2000. The decrease in the Company's interest expense in 2001 was
primarily due to a reduction in amounts outstanding under the Company's
receivables purchase agreement.
Income Tax Expense (Benefit). The Company recognized an income tax
benefit of $2.3 million in 2002 compared to an income tax expense of $0.2
million in 2001 and $0.3 million in 2000. The decrease in income tax expense in
2002 was due to a $2.7 million adjustment recorded in the third quarter of 2002
to reduce prior years' income tax accruals based in part on a change in tax law
in 2002.
At December 31, 2002, the Company had remaining available net operating
loss ("NOL") carryforwards of approximately $72 million. These NOL carryforwards
will expire in various amounts from 2005 through 2021. 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.
Approximately $45 million of the $72 million of NOL carryforwards mentioned
previously are subject to this annual limitation with the remaining amounts
having no such annual limitation.
Cumulative effect of change in accounting principle. A non-cash
goodwill impairment charge of $25.3 million was recorded as a cumulative effect
of change in accounting principle as of January 1, 2002 under SFAS No.142. See
note 3 to the consolidated financial statements for additional information.
Net Income (Loss). The Company recorded a net loss for 2002 of $16.2
million and a net loss for 2001 of $193.6 million after recording net income of
$3.5 million in 2000, in each case reflecting the factors described above for
each year.

Off-Balance Sheet Arrangement
During 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 receivables purchase agreement 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. During 2000, the Company and the financial institution extended the
receivables purchase agreement for an additional three-year period ending in
September 2003 and in October 2002 extended the agreement for an additional year
ending in September 2004. In addition during September 2001, the Company and the
financial institution agreed to reduce the size of the facility to $95.0
million. At December 31, 2002 and 2001, the Company had outstanding under the
agreement $24.0 million and $20.0 million (the minimum that is required under
the agreement), respectively, and had $81.2 million and $82.3 million,
respectively, of net residual interest in receivables sold. The fair value of
the net residual interest is measured at the time of the sale and is based on
the sale of similar assets. In 2002 and 2001, the Company received gross
proceeds of $51.0 million and $38.0 million, respectively, from the sale of
receivables and made gross payments of $47.0 million and $87.0 million,
respectively, under the agreement. Under the terms of the agreement, the Company
is required to maintain tangible net worth of $5 million, and to not exceed
certain percentages of credit sales for uncollectible accounts, delinquent
accounts and sales returns and allowances. Should the Company exceed such
limitations, the financial institution has the right to terminate the agreement.

Liquidity and Capital Resources
The Company's cash flows from operations in 2002, 2001 and 2000 were
$24.8 million, $3.2 million and $33.0 million, respectively. The cash flows from
operations decreased in 2001 primarily due to reduced income. Working capital
increased to $138.8 million at December 31, 2002 from $121.5 million at December
31, 2001. Working capital was $138.5 million at December 31, 2000.
Capital expenditures were $16.3 million, $9.0 million and $18.4 million
in 2002, 2001 and 2000, respectively, and are estimated to be $20.2 million in
2003, all generally related to upgrading and expanding the Company's
manufacturing and other facilities, acquiring and enhancing software and
hardware as part of the Company's information system redesign project and
meeting environmental requirements.
The Company's sources of liquidity are cash flows from operations, the
Company's receivables purchase agreement previously described and borrowings
under its $30 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 at least through 2003.
The Company's revolving credit facility permits borrowings and letters
of credit up to $30.0 million outstanding at any time. Availability is subject
to satisfaction of certain covenants and other requirements. At December 31,
2002 $27.2 million was available. The facility expires on March 31, 2005.
The following schedules summarize the Company's contractual cash
obligations and unused availability of financing sources at December 31, 2002
(in thousands).




Payments Due By Period
------------------------------------------------------------
Contractual Cash Obligations Total Less than 1 year 1-3 years 4-5 years After 5 years
- ------------------------------------------------------------------------------------------------------------

Long-term debt $125,000 $ -- $ -- $125,000 $ --
Operating leases 12,991 3,745 4,433 1,910 2,903
Standby letters of credit 2,839 2,839 -- -- --
Outstanding obligation under
Receivables purchase
Agreement 24,000 24,000 -- -- --
----------------------------------------------------------------------
Total contractual cash obligations $164,830 $30,584 $4,433 $126,910 $2,903
======== ======= ====== ======== ======

Amount of Availability Per Period
Unused Availability of Total Amounts ------------------------------------------------------------
Financing Sources Available Less than 1 year 1-3 years 4-5 years Over 5 years
- ------------------------------------------------------------------------------------------------------------
Unused revolving credit
Facility $27,161 $ -- $27,161 $ -- $ --
Unused availability under
Receivables purchase
Agreement 71,000 -- 71,000 -- --
---------------------------------------------------------------------
Total available $98,161 $ -- $98,161 $ -- $ --
=====================================================================



The Company has eight years remaining on a 10-year guaranteed supply
agreement with Glencore Ltd. ("Glencore"), a leading diversified trading and
industrial company, for the purchase of primary aluminum. Under the agreement,
the Company committed to purchase a minimum of 1.2 billion pounds of P1020/99.7%
aluminum at current market prices from Glencore over the 10-year term beginning
in January 2001.
At December 31, 2002, the Company held firm-priced aluminum purchase
and sales commitments through December 2004 totaling $7 million and $123
million, respectively. The Company hedges the impact of changes in prices
related to these commitments as explained in the caption entitled "Commodity
Price Risk" in the following section.
The indicated annual rate of dividends being paid on the Company's
Common Stock is $0.20 per share, or an annual total of about $3.2 million.

Risk Management
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 a policy of hedging its anticipated raw material
purchases based on firm-priced sales and purchase orders by purchasing and
selling futures contracts, forward contracts and options on the London Metal
Exchange ("LME"). The Company also uses forward contracts and options to reduce
its risks associated with its natural gas requirements.
As described in note 7 to the consolidated financial statements, the
Company adopted Statement of Financial Accounting Standards No. 133, "Accounting
for Derivative Instruments and Hedging Activities" ("SFAS No. 133") effective
January 1, 2001 and has designated virtually all of its aluminum and natural gas
futures contracts and forward contracts as cash flow hedges.
Gains and losses on these instruments that are deferred in other
comprehensive income are reclassified into net income as cost of goods sold in
the periods when the hedged transactions occur. As of December 31, 2002,
approximately $0.6 million of the $0.7 million of deferred net gains are
expected to be reclassified from other comprehensive income into net income as
cost of goods sold over the next twelve months. A net loss of $0.1 million was
recognized in cost of goods sold during both the twelve months ended December
31, 2002 and 2001, representing the amount of the hedges' ineffectiveness. As of
December 31, 2002, the Company held open aluminum and natural gas futures and
forward contracts having maturity dates extending through December 2004.
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, 2002 the Company
had approximately 51,050 metric tonnes of LME futures contracts. A hypothetical
10% change from the 2002 year-end three-month high grade aluminum price of
$1,345 per metric tonne would result in a change in fair value of $6.9 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 metal to be purchased.
Also, a sensitivity analysis has been prepared to estimate the
Company's exposure to market risk related to its NYMEX Henry Hub natural gas
forward contracts. Market risk is estimated as the potential loss in fair value
resulting from a hypothetical 10% adverse change in the price of the forward
contract. On December 31, 2002 the Company had approximately 4.5 million cubic
feet of NYMEX forward contracts. A hypothetical 10% change from the 2002
year-end three-month natural gas price of $4.514 per cubic foot would result in
a change in fair value of $2.0 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 gas to be purchased.
Credit Risk. Assessments of credit worthiness and credit risk are
completed on potential and existing customers through a review of trade
references, bank references, financial statements, and independent credit bureau
reports.
Also as previously discussed, the Company utilizes futures contracts,
forward 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.
Assessments of credit risks with trading partners (brokers) are completed
through a review of the broker's ratings with credit rating agencies. 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
Commodity Futures Trading Commission, which requires the brokers to be fully
insured against unrealized losses owed to clients. Brokers of natural gas
forward contracts are not regulated. At December 31, 2002, credit lines totaling
$29.5 million were available at various brokerages used by the Company.
Interest Rate Risk. In order to hedge a portion of its interest rate
risk, the Company was a party to an interest rate swap agreement with a notional
amount of $5 million under which the Company paid a fixed rate of interest and
received a LIBOR-based floating rate. The interest rate swap agreement expired
during September 2001 and as of December 31, 2002 the Company had no interest
rate swap agreements in effect. The Company's interest rate swap agreement which
expired during September 2001 did not qualify for hedge accounting under SFAS
No. 133 and as such the change in the fair value of the interest rate swap
agreement had been recognized currently as interest expense, net in the
Company's consolidated statement of operations. The amount of such change in the
fair value of the interest rate swap agreement was immaterial for the twelve
months ended December 31, 2001.

Recently Issued Accounting Standards
In June 2001, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 143, "Accounting for Asset Retirement
Obligations" ("SFAS No. 143"). The Statement addresses financial and reporting
for obligations associated with the retirement of tangible long-lived assets and
the associated asset retirement costs. SFAS 143 is effective for financial
statements issued for fiscal years beginning after June 15, 2002. Management
does not expect the adoption of this Statement to have a material impact on the
Company's results of operations or financial position.
In April 2002, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 145, "Rescission of FASB
Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
Corrections" ("SFAS No. 145"). The Statement eliminates Statement of Financial
Accounting Standards No. 4, "Reporting Gains and Losses from Extinguishment of
Debt", which required all gains and losses from extinguishment of debt to be
aggregated and, if material, classified as an extraordinary item. Under SFAS No.
145, such gains and losses should be classified as extraordinary only if they
meet the criteria of Accounting Principles Board Opinion No. 30. In addition,
SFAS No. 145 amends Statement of Financial Accounting Standards No. 13,
"Accounting for Leases", to eliminate an inconsistency between the required
accounting for sale-leaseback transactions and the required accounting for
certain lease modifications that have economic effects that are similar to
sale-leaseback transactions. SFAS 145 is generally effective for financial
statements issued for fiscal years beginning after May 15, 2002. Management does
not expect the adoption of this Statement to have a material impact on the
Company's results of operations or financial position.
In June 2002, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 146, "Accounting for Costs Associated with
Exit or Disposal Activities"(" SFAS No. 146"). The Statement nullifies Emerging
Issues Task Force ("EITF") Issue No. 94-3, "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity," under which
a liability for an exit cost was recognized at the date of an entity's
commitment to an exit plan. SFAS No. 146 requires that a liability for a cost
associated with an exit or disposal activity be recognized at fair value when
the liability is incurred. The provisions of this statement are effective for
exit or disposal activities that are initiated after December 31, 2002.
In January 2003, the Financial Accounting Standards Board issued
Financial Accounting Standards Board Interpretation No. 46, "Consolidation of
Variable Interest Entities, an Interpretation of ARB No. 51" ("FIN 46"). This
Interpretation of Accounting Research Bulletin No. 51, "Consolidated Financial
Statements" requires certain variable interest entities to be consolidated by
the primary beneficiary of the entity if the equity investors in the entity do
not have the characteristics of a controlling financial interest or do not have
sufficient equity at risk for the entity to finance its activities without
additional subordinated financial support from other parties. FIN46 is effective
immediately for all new variable interest entities created or acquired after
January 31, 2003. For variable interest entities created or acquired prior to
February 1, 2003, the provisions of FIN 46 must be applied for the first interim
or annual period beginning after June 15, 2003. Management does not expect the
adoption of this Interpretation to have a material impact on the Company's
results of operations or financial position.


COMMONWEALTH INDUSTRIES, INC.
Consolidated Balance Sheet
(in thousands except share data)


December 31,
--------------------------------------
2002 2001
------------- -------------

Assets
Current assets:
Cash and cash equivalents $ 13,211 $ 6,393
Accounts receivable, net 66 81
Inventories 125,348 119,038
Net residual interest in receivables sold 81,195 82,310
Prepayments and other current assets 7,133 3,230
------------- -------------
Total current assets 226,953 211,052
Property, plant and equipment, net 146,968 152,137
Goodwill, net 48,872 74,199
Other noncurrent assets 6,111 2,244
------------- -------------
Total assets $ 428,904 $ 439,632
============= =============

Liabilities
Current liabilities:
Accounts payable $ 59,594 $ 50,693
Accrued liabilities 28,527 38,876
------------- -------------
Total current liabilities 88,121 89,569
Long-term debt 125,000 125,000
Other long-term liabilities 5,183 6,899
Accrued pension benefits 26,743 4,576
Accrued postretirement benefits 76,670 79,422
------------- -------------
Total liabilities 321,717 305,466
------------- -------------

Commitments and contingencies - -

Stockholders' Equity
Common stock, $0.01 par value, 50,000,000 shares authorized,
15,997,651 and 15,969,030 shares outstanding at
December 31, 2002 and 2001, respectively 160 160
Additional paid-in capital 405,613 405,443
Accumulated deficit (277,942) (258,532)
Notes receivable from sale of common stock - (1,561)
Accumulated other comprehensive income:
Minimum pension liability adjustment (21,391) -
Effects of cash flow hedges 747 (11,344)
------------- -------------
Total stockholders' equity 107,187 134,166
------------- -------------
Total liabilities and stockholders' equity $ 428,904 $ 439,632
============= =============

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



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


Year ended December 31,
---------------------------------------------
2002 2001 2000
----------- ------------ -----------

Net sales $ 966,238 $ 920,504 $1,125,142
Cost of goods sold 898,927 873,473 1,042,937
----------- ------------ -----------
Gross profit 67,311 47,031 82,205
Selling, general and administrative expenses 46,977 54,523 55,800
Amortization of goodwill - 3,988 4,476
Asset impairment charges - 167,267 -
----------- ------------ -----------
Operating income (loss) 20,334 (178,747) 21,929
Other income (expense), net 1,636 907 1,975
Interest expense, net (15,146) (15,512) (20,067)
----------- ------------ -----------
Income (loss) before income taxes and cumulative
effect of change in accounting principle 6,824 (193,352) 3,837
Income tax expense (benefit) (2,292) 200 346
----------- ------------ -----------
Income (loss) before cumulative effect of
change in accounting principle 9,116 (193,552) 3,491
Cumulative effect of change in accounting principle (25,327) - -
----------- ------------ -----------
Net income (loss) $ (16,211) $ (193,552) $ 3,491
=========== ============ ===========

Basic net income (loss) per share:
Income (loss) before cumulative effect of
change in accounting principle $ 0.57 $ (11.78) $ 0.21
Cumulative effect of change in accounting principle (1.58) - -
----------- ------------ -----------
Net income (loss) $ (1.01) $ (11.78) $ 0.21
=========== ============ ===========

Diluted net income (loss) per share:
Income (loss) before cumulative effect of
change in accounting principle $ 0.57 $ (11.78) $ 0.21
Cumulative effect of change in accounting principle (1.57) - -
----------- ------------ -----------
Net income (loss) $ (1.00) $ (11.78) $ 0.21
=========== ============ ===========

Weighted average shares outstanding
Basic 15,994 16,428 16,567
Diluted 16,097 16,428 16,573

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



COMMONWEALTH INDUSTRIES, INC.
Consolidated Statement of Comprehensive Income (Loss)
(in thousands)


Year ended December 31,
----------------------------------------
2002 2001 2000
---------- ----------- ---------

Net income (loss) $ (16,211) $ (193,552) $ 3,491
Other comprehensive income, net of tax:
Minimum pension liability adjustment (21,391) - -
Net change related to cash flow hedges:
Cumulative effect of accounting change - 6,619 -
Increase (decrease) in fair value of cash flow hedges 1,867 (31,451) -
Reclassification adjustment for (gains) losses included in net income 10,224 13,488 -
---------- ----------- ---------
Net change related to cash flow hedges 12,091 (11,344) -
---------- ----------- ---------
Comprehensive income (loss) $ (25,511) $ (204,896) $ 3,491
========== =========== =========

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



COMMONWEALTH INDUSTRIES, INC.
Consolidated Statement of Changes in Stockholders' Equity
(in thousands except share and per share data)


Accumulated
Other
Comprehensive
Income:
Notes --------------------
Common Stock Receivable Minimum Effects of
------------------ Additional from Sale Pension Cash Total
Number of Paid-in Accumulated Unearned of Common Liability Flow Stockholders'
Shares Amount Capital Deficit Compensation Stock Adjustment Hedges Equity
---------- ------- --------- ----------- ------------ --------- --------- -------- ------------

Balance December 31, 1999 16,606,000 $ 166 $ 409,062 $ 61,866) $ (175) $ (10,511) $ - $ - $ 336,676
Net income - - - 3,491 - - - - 3,491
Cash dividends, $0.20 per share - - - (3,313) - - - - (3,313)
Minimum pension liability adjustment - - - - - - - - -
Forfeiture of restricted stock (10,000) - (176) - 176 - - - -
Amortization of unearned compensation - - - - (8) - - - (8)
Issuance of stock in connection
with stock awards 12,051 - 121 - - - - - 121
Repayments of notes receivable and
retirement of common stock (80,000) (1) (502) - - 1,929 - - 1,426
---------- ------- --------- ----------- ------------ --------- --------- -------- ------------
Balance December 31, 2000 16,528,051 165 408,505 (61,688) (7) (8,582) - - 338,393
Net income (loss) - - - (193,552) - - - - (193,552)
Cash dividends, $0.20 per share - - - (3,292) - - - - (3,292)
Effects of cash flow hedges - - - - - - - (11,344) (11,344)
Amortization of unearned compensation - - - - 7 - - - 7
Issuance of stock in connection
with stock awards 24,975 - 106 - - - - - 106
Repayments of notes receivable and
retirement of common stock (583,996) (5) (3,168) - - 7,021 - - 3,848
---------- ------- --------- ----------- ------------ --------- --------- -------- ------------
Balance December 31, 2001 15,969,030 160 405,443 (258,532) - (1,561) - (11,344) 134,166
Net income (loss) - - - (16,211) - - - - (16,211)
Cash dividends, $0.20 per share - - - (3,199) - - - - (3,199)
Minimum pension liability adjustmet - - - - - - (21,391) - (21,391)
Effects of cash flow hedges - - - - - - - 12,091 12,091
Issuance of stock in connection
with stock awards 28,621 - 170 - - - - - 170
Repayments of notes receivable - - - - - 1,561 - - 1,561
---------- ------- --------- ----------- ------------ --------- --------- -------- ------------
Balance December 31, 2002 15,997,651 $ 160 $ 405,613 $(277,942) $ - $ - $(21,391 $ 747 $ 107,187
========== ======= ========= =========== ============ ========= ========= ======== ============

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



COMMONWEALTH INDUSTRIES, INC.
Consolidated Statement of Cash Flows
(in thousands)


Year ended December 31,
----------------------------------------
2002 2001 2000
--------- ----------- ---------

Cash flows from operating activities:
Net income (loss) $(16,211) $ (193,552) $ 3,491
Adjustments to reconcile net income (loss) to net cash
provided by operations:
Depreciation 21,142 30,053 33,683
Amortization 984 5,276 5,668
Asset impairment charges - 167,267 -
Goodwill impairment charges 25,327 - -
Loss on disposal of property, plant and equipment 325 364 1,280
Issuance of common stock in connection with stock awards 170 106 121
Changes in assets and liabilities:
Decrease in accounts receivable, net 15 30 7
(Increase) decrease in inventories (6,310) 18,647 69,728
Decrease (increase) in net residual interest in receivab1es sold 1,115 (9,943) (32,387)
(Increase) decrease in prepayments and other current asssets (2,041) 8,133 2,478
(Increase) decrease in other noncurrent assets (3,602) (322) 426
Increase (decrease) in accounts payable 8,901 (2,829) (44,415)
(Decrease) increase in accrued liabilities (120) (13,524) 1,896
(Decrease) in other liabilities (4,941) (6,472) (8,992)
--------- ----------- ---------
Net cash provided by operating activities 24,754 3,234 32,984
--------- ----------- ---------
Cash flows from investing activities:
Purchases of property, plant and equipment (16,321) (9,002) (18,445)
Proceeds from sale of property, plant and equipment 23 91 50
--------- ----------- ---------
Net cash (used in) investing activities (16,298) (8,911) (18,395)
--------- ----------- ---------
Cash flows from financing activities:
(Decrease) in outstanding checks in excess of deposits - - (1,188)
Proceeds from long-term debt 77,270 57,110 57,100
Repayments of long-term debt (77,270) (57,110) (57,100)
Repayments of notes receivable from sale of common stock 1,561 3,848 1,426
Cash dividends paid (3,199) (3,292) (3,313)
--------- ----------- ---------
Net cash (used in) provided by financing activities (1,638) 556 (3,075)
--------- ----------- ---------
Net increase (decrease) in cash and cash equivalents 6,818 (5,121) 11,514
Cash and cash equivalents at beginning of period 6,393 11,514 -
--------- ----------- ---------
Cash and cash equivalents at end of period $ 13,211 $ 6,393 $11,514
========= =========== =========
Supplemental disclosures:
Interest paid $ 14,483 $ 15,609 $21,098
Income taxes paid (refunds received) (2,524) 36 198
Non-cash activities:
Repayment of notes receivable from sale of common stock with
common stock and subsequent retirement of common stock $ - $ 3,173 $ 503

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



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 segments. The aluminum segment manufactures common alloy aluminum
sheet for distributors and the transportation, construction, and consumer
durables end-use markets. The electrical products segment manufactures flexible
electrical wiring products for the commercial construction 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 accounting principles
generally accepted in the United States of America 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.
The Company's most significant estimates relate to the valuation of property,
plant and equipment and goodwill, assumptions for computing pension and
postretirement benefits obligations, allowance for uncollectible accounts
receivable, assumptions for computing workers' compensation liabilities and
environmental liabilities.

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

Concentrations of Credit Risk
Futures contracts, options, cash investments and accounts receivable potentially
subject the Company to concentrations of credit risk. The Company places its
cash investments with high credit quality institutions. At times, such cash
investments may be in excess of the Federal Deposit Insurance Corporation
insurance limit. Credit risk with respect to accounts receivable exists related
to concentrations of sales to aluminum distributors, who in turn resell the
Company's aluminum products to end-use markets, including the consumer durables,
building and construction and transportation markets. Concentrations of credit
risk with respect to accounts receivable from the sale of electrical products
are limited due to the large customer base, and their dispersion across many
different geographical areas. During 2002, 2001 and 2000, sales to one major
customer amounted to approximately 11.1%, 12.2% and 14.0%, respectively, of the
Company's net sales. No other single customer accounted for more than 10% of the
Company's net sales in 2002, 2001 or 2000. 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 5.

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 prior to 2002 was being amortized on a straight-line basis over
forty years. Accumulated amortization was $23.1 million at December 31, 2001.
Beginning January 1, 2002 goodwill is no longer amortized, but instead is being
evaluated annually for impairment according to the provisions of Statement of
Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets"
("SFAS No. 142"). See note 3 for additional information.

Prior to January 1, 2002, the Company periodically evaluated the carrying value
of long-lived assets to be held and used, including goodwill and other
intangible assets according to 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" ("SFAS No.121"). In the
event that facts and circumstances indicated that the carrying amount of an
asset or group of assets may be impaired, an evaluation of recoverability was
performed in accordance with the provisions of SFAS No. 121. In performing the
evaluation, the estimated future undiscounted cash flows associated with the
asset was compared to the assets' carrying amount to determine if a write-down
to fair value or discounted cash flow value was required. The Company recorded
an impairment charge in the fourth quarter of 2001 according to the provisions
of SFAS No.121. See note 2 for additional information.

After January 1, 2002, the Company periodically evaluates the carrying value of
long-lived assets to be held and used according to Statement of Financial
Accounting Standards No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets" ("SFAS No. 144"). The Statement addresses financial
accounting and reporting for the impairment or disposal of long-lived assets.
This Statement superseded SFAS No. 121, and the accounting and reporting
provisions of Accounting Principles Board Opinion No. 30, "Reporting the Results
of Operations - Reporting the Effects of Disposal of a Segment of a Business,
and Extraordinary, Unusual and Infrequently Occurring Events and Transactions",
for the disposal of a "segment of a business" (as previously defined in that
Opinion). The adoption of SFAS No. 144 had no impact on the Company's financial
statements in 2002.

Capitalized Software Costs
The Company capitalizes certain computer software acquisition and implementation
costs. During the year ended December 31, 2002, $5.3 million of computer
software costs were capitalized into construction in progress.

Deferred Financing Costs
The costs related to the issuance of debt are capitalized and amortized over the
lives of the related debt as interest expense.

Financial Instruments
The Company enters into futures contracts, forward contracts and options to
manage exposures to price risk related to aluminum and natural gas purchases.
The Company also occasionally uses interest rate swap agreements to manage
interest rate risk. Gains and losses on these financial instruments which
effectively hedge exposures are deferred, net of taxes if any, in other
comprehensive income and included in income when the underlying transactions
occur. The ineffective portion of the gains and losses are recorded currently in
the consolidated statement of operations. Gains and losses on certain other
financial instruments entered into to mitigate risk which do not qualify for
hedge accounting are recognized currently in the consolidated statement of
operations. See note 7 for additional information.

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.

The Company classifies shipping costs incurred as a component of cost of goods
sold in accordance with the requirements of Emerging Issues Task Force Issue No.
00-10.

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
At December 31, 2002, the Company had stock-based compensation plans which are
described more fully in note 14. 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 under the intrinsic
value based method. Accordingly, no stock-based compensation expense has been
recognized for stock options issued under the plans as all stock options granted
under the plans had an exercise price equal to the market value of the
underlying common stock on the date of grant. 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 loss and basic
and diluted net loss per share would have been increased for 2002 and 2001 and
the Company's net income and basic and diluted net income per share would have
been reduced for 2000 to the pro forma amounts which follow (in thousands except
per share data):
2002 2001 2000
---- ---- ----
Net income (loss) as reported $(16,211) $(193,552) $3,491
Less total stock-based employee compensation
expense determined under fair value method for
all awards, net of related tax effects 211 106 498
-------- --------- --------
Pro forma net income (loss) $(16,422) $(193,658) $2,993
======== ========= ========

Basic net income (loss) per share
As reported $(1.01) $(11.78) $0.21
Pro forma (1.03) (11.79) 0.18
Diluted net income (loss) per share
As reported $(1.00) $(11.78) $0.21
Pro forma (1.02) (11.79) 0.18

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. Under the terms of the workers'
compensation programs, the Company is required to maintain pre-determined
amounts of cash security, restricted as to use. At December 31, 2002, $2.9
million of other noncurrent assets on the consolidated balance sheet were so
restricted.

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, does not reflect
any offset for possible recoveries from insurance companies and is not
discounted.

Recently Issued Accounting Standards
In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 143, "Accounting for Asset Retirement
Obligations" ("SFAS No. 143"). The Statement addresses financial and reporting
for obligations associated with the retirement of tangible long-lived assets and
the associated asset retirement costs. SFAS No. 143 is effective for financial
statements issued for fiscal years beginning after June 15, 2002. Management
does not expect the adoption of this Statement to have a material impact on the
Company's results of operations or financial position.

In April 2002, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 145, "Rescission of FASB Statements No. 4, 44
and 64, Amendment of FASB Statement No. 13, and Technical Corrections" ("SFAS
No. 145"). The Statement eliminates Statement of Financial Accounting Standards
No. 4, "Reporting Gains and Losses from Extinguishment of Debt", which required
all gains and losses from extinguishment of debt to be aggregated and, if
material, classified as an extraordinary item. Under SFAS No. 145, such gains
and losses should be classified as extraordinary only if they meet the criteria
of Accounting Principles Board Opinion No. 30. In addition, SFAS No. 145 amends
Statement of Financial Accounting Standards No. 13, "Accounting for Leases", to
eliminate an inconsistency between the required accounting for sale-leaseback
transactions and the required accounting for certain lease modifications that
have economic effects that are similar to sale-leaseback transactions. SFAS No.
145 is generally effective for financial statements issued for fiscal years
beginning after May 15, 2002. Management does not expect the adoption of this
Statement to have a material impact on the Company's results of operations or
financial position.

In June 2002, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 146, "Accounting for Costs Associated with
Exit or Disposal Activities" ("SFAS No. 146"). The Statement nullifies Emerging
Issues Task Force Issue No. 94-3, "Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity," under which a
liability for an exit cost was recognized at the date of an entity's commitment
to an exit plan. SFAS No. 146 requires that a liability for a cost associated
with an exit or disposal activity be recognized at fair value when the liability
is incurred. The provisions of this statement are effective for exit or disposal
activities that are initiated after December 31, 2002.

In January 2003, the Financial Accounting Standards Board issued Financial
Accounting Standards Board Interpretation No. 46, "Consolidation of Variable
Interest Entities, an Interpretation of ARB No. 51" ("FIN 46"). This
Interpretation of Accounting Research Bulletin No. 51, "Consolidated Financial
Statements" requires certain variable interest entities to be consolidated by
the primary beneficiary of the entity if the equity investors in the entity do
not have the characteristics of a controlling financial interest or do not have
sufficient equity at risk for the entity to finance its activities without
additional subordinated financial support from other parties. FIN46 is effective
immediately for all new variable interest entities created or acquired after
January 31, 2003. For variable interest entities created or acquired prior to
February 1, 2003, the provisions of FIN 46 must be applied for the first interim
or annual period beginning after June 15, 2003. Management does not expect the
adoption of this Interpretation to have a material impact on the Company's
results of operations or financial position.

2. Asset Impairment Charges
During the fourth quarter of 2001, the Company recorded a non-cash asset
impairment charge of $167.3 million or $10.18 per basic and diluted share
(before and after tax) related to the impairment of certain property, plant and
equipment and goodwill in its aluminum segment. The asset impairment charges
resulted from the application of 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" ("SFAS No. 121") which
required that long-lived assets, certain intangibles and goodwill held and used
by an entity be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying value of these assets may not be
recoverable. The Company undertook the impairment review upon concluding, in the
weeks following the tragic events of September 11, that the economic recovery
forecast by the Company to restore its aluminum rolling mill operations to
profitability in the second half of 2001 would not occur, and that a
continuation of poor market conditions would impact the carrying amount of the
assets. The estimated fair value of the assets was based on anticipated cash
flows of the operations in the Company's aluminum business discounted at a rate
commensurate with the risk involved. The $167.3 million impairment charge was
composed of $85.4 million of property, plant and equipment write-downs ($1.8
million of net land and improvements, $15.7 million of net building
improvements, $59.0 million of net machinery and equipment and $8.9 million of
construction in progress) and $81.9 million of goodwill write-downs.

3. Goodwill
Effective January 1, 2002, the Company adopted Statement of Financial
Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS No.
142"). The Statement addresses financial accounting and reporting for acquired
goodwill and other intangible assets and supersedes Accounting Principles Board
Opinion No. 17, "Intangible Assets" and amends Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of" ("SFAS No. 121"), to exclude from its scope
goodwill and intangible assets that are not amortized. SFAS No. 121 was
subsequently superseded by Statement of Financial Accounting Standards No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets ("SFAS No.
144").

SFAS No. 142 addresses how goodwill and other intangible assets should be
accounted for after they have been initially recognized in the financial
statements. Under SFAS No. 142, goodwill is no longer to be amortized but
reviewed for impairment annually or more frequently if certain indicators arise,
using a two-step approach. SFAS No. 142 was effective January 1, 2002 and the
Company was required to complete step one of a transitional impairment test by
June 30, 2002 and to complete step two of the transitional impairment test, if
step one indicates that the reporting unit's carrying value exceeds its fair
value, by December 31, 2002. Any impairment loss resulting from the transitional
impairment test was required to be recorded as a cumulative effect of a change
in accounting principle in the quarter ended March 31, 2002. Any subsequent
impairment losses will be reflected in operating income in the consolidated
statement of operations. The net goodwill balances attributable to each of the
Company's reporting units were tested for impairment by comparing the fair value
of each reporting unit to its carrying value. Fair value was determined by using
the valuation technique of calculating the present value of estimated expected
future cash flows (using a discount rate commensurate with the risks involved).

Based upon the transitional impairment test performed upon adoption of SFAS No.
142, the Company recorded a goodwill impairment loss of $25.3 million ($13.5
million in its aluminum segment and $11.8 million in its electrical products
segment). As required by SFAS No. 142 and previously described, the Company
recorded the goodwill write-down as a cumulative effect of a change in
accounting principle as of January 1, 2002 and restated the Company's first
quarter 2002 financial results.The following displays the changes in the
carrying amount of goodwill in each of the Company's reportable segments for the
year ended December 31, 2002 (in thousands):



Electrical
Aluminum Products Total
-------- ---------- ---------

Balance December 31, 2001 $13,470 $60,729 $74,199
Goodwill impairment loss as a result of transitional
Impairment test related to adoption of SFAS No. 142 (13,470) (11,857) (25,327)
-------- -------- --------
Balance December 31, 2002 $ - $48,872 $48,872
======== ======== ========


The following represents transitional disclosures for the years ending December
31, 2002, 2001 and 2000 relating to goodwill amortization including the goodwill
impairment loss which was recorded as a cumulative effect of a change in
accounting principle as of January 1, 2002, as required by SFAS No. 142 (in
thousands except per share data):



2002 2001 2000
---- ---- ----

Reported income (loss) before cumulative effect of change in accounting princlpe $9,116 $(193,552) $3,491
Cumulative effect of change in accounting principle (25,327) - -
------- -------- --------
Reported net income (loss) (16,211) (193,552) 3,491
Add back: goodwill amortization - 3,988 4,476
------- -------- --------
Adjusted net income (loss) $(16,211) $(189,564) $ 7,967
======= ======== ========

Basic net income (loss) per share:
Reported income (loss) before cumulative effect of change in accounting princple $ 0.57 $(11.78) $ 0.21
Cumulative effect of change in accounting principle (1.58) - -
------- -------- --------
Reported net income (loss) (1.01) (11.78) 0.21
Goodwill amortization - 0.24 0.27
------- -------- --------
Adjusted net income (loss) $(1.01) $(11.54) $ 0.48
======= ======== ========

Diluted net income (loss) per share:
Reported income (loss) before cumulative effect of change in accounting princple $ 0.57 $(11.78) $ 0.21
Cumulative effect of change in accounting principle (1.57) - -
------- -------- --------
Reported net income (loss) (1.00) (11.78) 0.21
Goodwill amortization - 0.24 0.27
------- -------- --------
Adjusted net income (loss) $(1.00) $(11.54) $ 0.48
======= ======== ========

Weighted average shares outstanding
Basic 15,994 16,428 16,567
Diluted 16,097 16,428 16,573



The Company has no other intangible assets other than the goodwill discussed
above.

4. Receivables Purchase Agreement
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 receivables purchase agreement 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. The Company services the receivables for a fee in accordance with the
receivables purchase agreement. In addition, under the agreement, the
receivables are sold with no recourse to the Company and the Company records no
discount on the sale of the receivables. During September 2000, the Company and
the financial institution extended the receivables purchase agreement for an
additional three-year period ending in September 2003 and in October 2002,
extended the agreement for an additional year ending in September 2004. In
addition during September 2001, the Company and the financial institution agreed
to reduce the maximum amount which can be outstanding under the agreement to
$95.0 million.

At December 31, 2002 and 2001, the Company had outstanding under the agreement
$24.0 million and $20.0 million (the minimum that is required under the
agreement), respectively, and had $81.2 million and $82.3 million, respectively,
of net residual interest in the receivables sold. The fair value of the net
residual interest is measured at the time of the sale and is based on the sale
of similar assets. In 2002 and 2001, the Company received gross proceeds of
$51.0 million and $38.0 million, respectively, from the sale of receivables and
made gross payments of $47.0 million and $87.0 million, respectively, under the
agreement.

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 $1.1 million and $1.2 million at
December 31, 2002 and 2001, respectively, and is netted against the net residual
interest in the receivables sold in the Company's consolidated financial
statements.

Under the terms of the agreement, the Company is required to maintain tangible
net worth of $5 million, and to not exceed certain percentages of credit sales
for uncollectible accounts, delinquent accounts and sales returns and
allowances. Should the Company exceed such limitations, the financial
institution has the right to terminate the agreement.

5. Inventories
Inventories at December 31 consist of the following (in thousands):

2002 2001
---- ----
Raw materials $22,718 $21,203
Work in process 46,676 45,830
Finished goods 43,780 35,978
Expendable parts and supplies 14,320 14,223
-------- --------
127,494 117,234
LIFO reserve (2,146) 1,804
-------- --------
$125,348 $119,038
======== ========

The Company's raw materials, work in process and finished goods inventories are
valued using the last-in, first-out (LIFO) accounting method in the Company's
aluminum segment and the first-in, first-out (FIFO) and average-cost accounting
methods in the Company's electrical products segment. The FIFO accounting method
is used throughout the entire Company for valuing its expendable parts and
supplies inventory. Inventories of approximately $98.2 million and $87.9
million, included in the above totals (before the LIFO reserve) at December 31,
2002 and 2001, respectively, are accounted for under the LIFO method of
accounting while the remainder of the inventories are accounted for under the
FIFO and average-cost methods.

During 2001 and 2000, LIFO inventory quantities were reduced, resulting in a
partial liquidation of the LIFO bases, the effect of which increased the net
loss in 2001 by approximately $0.03 million, which had no effect on the per
share amount and increased net income in 2000 by approximately $4.5 million, or
$0.27 per share.

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

2002 2001
---- ----
Land and improvements $17,134 $17,134
Buildings and improvements 55,244 54,825
Machinery and equipment 311,823 309,019
Construction in progress 16,391 7,224
-------- --------
400,592 388,202
Less accumulated depreciation 253,624 236,065
-------- --------
Net property, plant and equipment $146,968 $152,137
======== ========

Depreciation expense was $21.1 million, $30.1 million and $33.7 million for the
years ended 2002, 2001 and 2000, respectively. The net book value of property,
plant and equipment was reduced by $85.4 million in 2001 as a result of the
asset impairment charges described in note 2.

7. Financial Instruments and Hedging Activities
Effective January 1, 2001, the Company adopted Statement of Financial Accounting
Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities", including Statement of Financial Accounting Standards No. 138,
"Accounting for Certain Derivative Instruments and Certain Hedging Activities -
an amendment of FASB Statement No. 133" ("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 consolidated statement of operations, and requires that a company
must formally document, designate and assess the effectiveness of transactions
that receive hedge accounting. Under SFAS No. 133, gains and losses that
represent the effective portion of cash flow hedge transactions are recorded in
other comprehensive income. Gains and losses on these instruments that are
deferred in other comprehensive income are reclassified into net income as cost
of goods sold in the periods when the hedged transactions occur.

The Company enters into futures contracts, forward contracts and options to
manage exposures to price risk related to aluminum and natural gas purchases.
The Company has designated the futures contracts and forward contracts as cash
flow hedges of anticipated aluminum raw material and natural gas requirements,
respectively. 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. Assessments of credit risks
with trading partners (brokers) are completed through a review of the broker's
ratings with credit rating agencies. 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 Commodity Futures Trading
Commission, which requires the brokers to be fully insured against unrealized
losses owed to clients. Brokers of natural gas forward contracts are not
regulated. At December 31, 2002, credit lines totaling $29.5 million were
available at various brokerages used by the Company.

The Company recorded a cumulative-effect-type net gain transition adjustment of
$6.6 million in accumulated other comprehensive income to recognize at fair
value all derivatives that were designated as cash-flow hedging instruments upon
adoption of SFAS No. 133 on January 1, 2001. All of this amount was reclassified
from accumulated other comprehensive income into cost of goods sold during 2001.
As of December 31, 2002, approximately $0.6 million of the $0.7 million of
deferred net gains are expected to be reclassified from other comprehensive
income into net income as cost of goods sold over the next twelve months. As of
December 31, 2002, the Company held open aluminum and natural gas futures
contracts, forward contracts and options having maturity dates extending through
December 2004. A net loss of $0.1 million, was recognized in cost of goods sold
during both the year ended December 31, 2002 and 2001, representing the amount
of the hedges' ineffectiveness.

In order to hedge a portion of its interest rate risk, the Company was a party
to an interest rate swap agreement with a notional amount of $5 million under
which the Company paid a fixed rate of interest and received a LIBOR-based
floating rate. The interest rate swap agreement expired during September 2001
and currently the Company has no interest rate swap agreements in effect. The
Company's interest rate swap agreement which expired during September 2001 did
not qualify for hedge accounting under SFAS No. 133 and as such the change in
the fair value of the interest rate swap agreement had been recognized currently
as interest expense, net in the Company's consolidated statement of operations.
The amount of such change in the fair value of the interest rate swap agreement
was immaterial for the year ended December 31, 2001.

Prior to the adoption of SFAS No. 133, gains, losses and premiums on futures
contracts, forward contracts and options which effectively hedged exposures were
included in income as a component of the underlying transaction. At December 31,
2000, the Company had open aluminum and natural gas futures contracts, forward
contracts and options with a fair value of $105.5 million. The Company had net
unrealized gains of $7.0 million as of December 31, 2000 on these open futures
contracts, forward contracts and options. Net unrealized gains and losses on
open futures contracts, forward contracts and options were recorded in the
consolidated balance sheet as accrued liabilities and prepayments and other
current assets, respectively. Futures contracts, forward contracts and options
were valued at the settlement price on the last business day of the year.

At December 31, 2002, the Company held firm-priced aluminum purchase and sales
commitments through December 2004 totaling $7 million and $123 million,
respectively. At December 31, 2001, the Company held firm-priced aluminum
purchase and sales commitments through 2003 totaling $18 million and $160
million, respectively.

8. Long-term Debt and Revolving Credit Facility
Long-term debt of the Company at December 31 consisted of the following (in
thousands):
2002 2001
---- ----
Senior subordinated notes $125,000 $125,000
Revolving credit facility - -
-------- --------
125,000 125,000
Less current maturities - -
-------- --------
$125,000 $125,000
======== ========

The Company's $125 million of 10.75% senior subordinated notes are due in 2006.
Interest is payable semi-annually on April 1 and October 1 of each year.

The Company has a credit agreement with a syndicate of banks which is led by PNC
Bank. During March 2002, the credit agreement was amended ("amended credit
agreement") and PNC Bank replaced Bank One Corporation as the administrative
agent and several of the banks in the syndicate were replaced with other banks.
Prior to March 2002, the credit agreement included a $100 million revolving
credit facility, under which the Company had agreed to limit borrowings to $65
million during 2001. The borrowing limitation is currently $30 million under the
amended credit agreement. 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 $20 million of the revolving credit facility is
available for standby and commercial letters of credit. The amended credit
agreement extended the revolving credit facility commitment from September 2,
2002 to March 31, 2005.

Borrowings under the credit agreement, as revised in 2002, bear interest at a
variable base rate per annum plus up to an additional 2.00% 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
facility fee of 0.750%. The Company must pay a fee ranging from 1.500% to 2.000%
per annum on the carrying amount of each outstanding letter of credit. At
December 31, 2002 and 2001, standby letters of credit totaling $2.8 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 from time to time uses interest rate swap agreements to effectively
convert a portion of its variable interest rates relating to the Company's
revolving credit facility and receivables purchase agreement to fixed interest
rates. At December 31, 2000, 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, 2000 was a liability of $0.1 million. The fixed interest rate was 6.87%. The
interest rate swap agreement expired in September 2001 and as of December 31,
2002 the Company had no interest rate swap agreements in effect.

Based on estimated market values at December 31, 2002 and 2001, the fair value
of the senior subordinated notes was approximately $125 million and $123
million, respectively.

Future aggregate maturities of long-term debt at December 31, 2002 are as
follows (in thousands):

2003 $ -
2004 -
2005 -
2006 125,000
2007 -
--------
Total $125,000
========

9. Stockholders' Equity
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 were collateralized by the shares
acquired and were repayable with full-recourse to the executives. The Program
provided 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 (the "Committee")
of the Board of Directors. During December 2001, the Committee terminated the
Program and the Board of Directors, at the recommendation of the Committee,
authorized all loans to be repaid with a combination of proceeds from forfeiture
by the executives of the collateralized shares and proceeds from application of
Program termination payments made by the Company to the executives to cover the
deficiency between the loans and the value of the collateralized shares on the
date of termination of the Program. In addition, the Program termination
payments covered income tax obligations incurred by the executives as a result
of the Program termination. For certain of the executives, the Program
termination payments used to repay the loans were divided between payments made
in December 2001 and payments made in April 2002. A total of 677,000 shares were
issued during August 1999 of which no shares were outstanding as of December 31,
2001. The outstanding principal balance of the notes at December 31, 2001 of
$1.6 million was classified as a reduction of stockholders' equity and as
previously mentioned that remaining outstanding amount was repaid in full in
April 2002. The expense relating to the Program was $7.2 million and $4.7
million for the years ended 2001 and 2000, respectively.

10. 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):

2002 2001
---- ----
Change in benefit obligation:
Benefit obligation at beginning of year $88,424 $84,173
Service cost 2,625 2,548
Interest cost 6,473 6,451
Actuarial (gain) loss 10,939 5,565
Benefits paid (7,693) (10,313)
------- --------
Benefit obligation at end of year 100,768 88,424
------- --------

Change in plan assets:
Fair value of plan assets at beginning of year 82,300 86,039
Actual return on plan assets (4,980) 657
Employer contribution 2,764 5,917
Benefits paid (7,693) (10,313)
------- --------
Fair value of plan assets at end of year 72,391 82,300
------- --------

Funded status (28,377) (6,124)
Unrecognized net actuarial (gain) loss 27,563 4,821
Unrecognized net prior service cost (benefit) (3,289) (3,307)
Unrecognized net transition obligation (asset) - 34
------- --------
Net amount recognized $(4,103) $(4,576)
======= ========

Amounts recognized in the consolidated balance sheet consist of:
(Accrued) pension cost $(26,743) $(4,576)
Intangible asset 1,249 -
Accumulated other comprehensive income 21,391 -
------- --------
Net amount recognized $(4,103) $(4,576)
======= ========

Reflected at December 31, 2002 in the Company's consolidated balance sheet is an
additional minimum liability relative to its plans which were underfunded in the
amount of $22.6 million at December 31, 2002. A corresponding amount is recorded
at December 31, 2002 as an intangible asset to the extent it did not exceed
unrecognized prior service cost, while the excess was charged to stockholders'
equity.

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

2002 2001 2000
---- ---- ----
Weighted average assumptions:
Discount rate 6.75% 7.50% 7.75%
Expected return on plan assets 8.50 8.75 8.75
Rate of compensation increase 4.50 4.50 4.50

Components of net pension expense:
Service cost $2,625 $2,548 $2,567
Interest cost 6,473 6,451 6,307
Expected return on plan assets (6,926) (7,346) (7,043)
Net amortization and deferral 118 (245) (254)
Curtailment gain - - (1,111)
------- ------ -------
Net pension expense $2,290 $1,408 $466
======= ====== =======

The Company recorded a $1.1 million curtailment gain in one of the plans in 2000
as a result of employee workforce reductions.

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 for 2002, 2001 and 2000, respectively.

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 $1.1
million for 2002 and 2001, respectively, and $1.5 million for 2000.

11. 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 covered employees' active service
periods. The financial status of the plan at December 31 is as follows (in
thousands):
2002 2001
---- ----
Change in benefit obligation:
Benefit obligation at beginning of year $53,069 $52,100
Service cost 658 682
Interest cost 3,972 3,852
Plan amendment 124 -
Actuarial loss (gain) 6,013 (87)
Benefits paid (4,106) (3,478)
------- -------
Benefit obligation at end of year 59,730 53,069
------- -------
Change in plan assets:
Fair value of plan assets at beginning of year - -
Actual return on plan assets - -
Employer contribution 4,106 3,478
Benefits paid (4,106) (3,478)
------- -------
Fair value of plan assets at end of year - -
------- -------

Funded status (59,730) (53,069)
Unrecognized net actuarial gain (6,117) (12,448)
Unrecognized net prior service cost (benefit) (10,823) (13,905)
------- -------
Prepaid (accrued) postretirement benefit cost $(76,670) $(79,422)
======= =======

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

2002 2001 2000
---- ---- ----
Weighted average assumptions:
Discount rate 6.75% 7.50% 7.75%

Components of net postretirement benefit expense:
Service cost $658 $682 $763
Interest cost 3,972 3,852 3,897
Amortization of prior service cost (benefit)(2,958) (2,973) (3,131)
Recognized net actuarial gain (319) (576) (388)
Curtailment gain - - (2,558)
------ ------ -------
Net postretirement benefit expense (income) $1,353 $ 985 $(1,417)
====== ====== =======

The Company recorded a $2.6 million curtailment gain in 2000 as a result of
employee workforce reductions.

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.
At December 31, 2002, the employer cap had not yet been reached. In addition,
the health care cost trend rate assumption is projected to increase in 2003 at
an annual rate of 10% for retirees under age 65 and 12% for retirees 65 years
and older and is assumed to decrease gradually to 5% by 2011 for retirees under
age 65 and by 2014 for retirees 65 years and older and remain constant
thereafter. If the health care cost trend rate assumption is increased by 1%,
the postretirement benefit obligation as of December 31, 2002 and the combined
service and interest cost components of postretirement benefit expense for the
year then ended would be increased by approximately $1.7 million and $0.1
million, respectively, and if the health care cost trend rate assumption is
decreased by 1%, the postretirement benefit obligation as of December 31, 2002
and the combined service and interest cost components of postretirement benefit
expense for the year then ended would be decreased by approximately $1.6 million
and $0.1 million, respectively.

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

2002 2001 2000
---- ---- ----
Current:
Federal $(2,692) $ -- $ (234)
State and Local 400 200 580
------- ----- ------
(2,292) 200 346
Deferred:
Federal - - -
State and Local - - -
------- ----- ------
$(2,292) $200 $346
======= ===== ======

The Company recorded a $2.7 million favorable adjustment to income tax expense
in 2002 to reduce prior years' income tax accruals based in part on a change in
tax law in 2002.

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



2002 2001
---- ----
Assets Liabilities Assets Liabilities
------ ----------- ------ -----------

Inventory $ 768 $ - $ 574 $ -
Property, plant and equipment - 9,887 - 12,474
Accrued and other liabilities 10,470 - 10,816 -
Accrued pension costs 3,502 - 3,351 -
Accrued postretirement costs 30,667 - 31,768 -
Net operating loss carryforwards 28,686 - 34,249 -
AMT credit carryforwards 6,760 - 6,617 -
Research and development credit carryforwards 3,142 - 1,435 -
Other - 37 425 -
------- ------- ------- -------
Totals $83,995 $ 9,924 $89,235 $12,474
------- ------- ------- -------
Net deferred tax asset 74,071 - 76,761 -
Valuation allowance (74,071) - (76,761) -
------- ------- ------- -------
Net deferred taxes $ - $ - $ - $ -
======= ======= ======= =======


The Company has determined that at December 31, 2002 and 2001, 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, 2002, the Company had net operating loss ("NOL") carryforwards
for federal tax purposes of approximately $72 million, which expire in various
amounts from 2005 through 2021 and approximately $6.8 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 NOL 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. Approximately $45
million of the $72 million of NOL carryforwards mentioned previously are subject
to this annual limitation with the remaining amounts having no such annual
limitation.

A reconciliation of the significant differences between the federal statutory
income tax rate and the effective income tax rate on pre-tax income (loss)
excluding the cumulative effect of the change in accounting principle is as
follows:



2002 2001 2000
---- ---- ----

Federal statutory income tax rate 35.0% (35.0)% 35.0%
Increase (decrease) in tax rate resulting from:
NOL and AMT credit carryforwards/carrybacks (64.8) 4.2 (53.0)
Nondeductible goodwill and other permanent
differences 5.3 0.5 43.0
Adjustment of prior year accrual (12.9) - (10.8)
State income taxes, net of federal income tax benefit 3.8 0.1 8.3
Foreign sales corporation benefits - - (8.2)
Research and development credit carryforwards - - (5.3)
Asset impairment charges - 30.3 -
----- ----- -----
Effective income tax rate (33.6)% 0.1% 9.0%
===== ===== =====


No income tax benefit was recognized related to the cumulative effect of
the adoption of SFAS No. 142, "Goodwill and Other Intangible Assets".

13. 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.

Federal and state regulations continue to impose strict emission requirements on
the aluminum industry. While the Company believes that current pollution control
measures at the emission sources at its facilities meet current requirements,
additional measures at some of the Company's facilities may be required to meet
future requirements.

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. At the
five other federal superfund sites, the Company is a minor contributor and has
satisfied its obligations at all five of the sites for a nominal amount. The
Company is also under orders by agencies in two states for environmental
remediation at three sites, one of which is currently operating and two of which
have been closed. Previously, a trust fund existed 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 was reimbursed from the trust fund for approved
closure and postclosure expenditures incurred at the site. All remaining funds
in the trust fund were paid out during 2001 and the trust was closed.

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. 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 Company had
established an accrual for such liabilities of $1.3 million at December 31, 2002
and 2001. 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.

Environmental sampling at Lewisport has disclosed the presence of contaminants,
including polychlorinated biphenyls (PCBs), in a closed Company landfill.
Management believes the contamination is covered by the Lockheed Martin
indemnification, which Lockheed Martin disputes.

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
$7.4 million and $8.8 million at December 31, 2002 and 2001, respectively. Of
the total reserve, $2.8 million and $2.5 million is included in "accrued
liabilities" in the Company's consolidated balance sheets at December 31, 2002
and 2001, respectively, and $4.6 million and $6.3 million is included in "other
long-term liabilities" at December 31, 2002 and 2001, respectively.

The Company estimates that the total cost to remediate these environmental
matters could be as much as $17 million should all matters be ultimately
concluded in a manner least favorable to the Company. 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
2002 and 2001 were $0.9 million and $0.2 million, respectively. All other
environmental expenditures of the Company, including remediation expenditures,
for 2002, 2001 and 2000 were $1.7 million, $1.9 million and $2.1 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.

14. 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 2000, 2001 and
2002:




Options Restricted Stock
-------------------------------------------------- ----------------
Range of Weighted Average
Shares Exercise Prices Exercise Price Shares
----------- --------------- ----------------- ---------

Outstanding December 31, 1999 784,000 $8.25 to $20.00 $12.83 147,500
Granted 315,000 $7.44 to $12.84 $12.76 -
Exercised - - - -
Forfeited (166,500) $8.25 to $16.75 $12.97 (10,000)
Stock no longer restricted - - - (125,000)
--------- --------
Outstanding December 31, 2000 932,500 $7.44 to $20.00 $12.78 12,500
Granted 329,000 $4.22 $4.22 -
Exercised - - - -
Forfeited (192,000) $4.22 to $16.75 $11.91 -
Stock no longer restricted - - - (12,500)
--------- --------
Outstanding December 31, 2001 1,069,500 $4.22 to $20.00 $10.30 -
Granted 349,000 $4.85 to $7.28 $5.16 -
Exercised - - - -
Forfeited (53,000) $4.22 to $16.75 $10.26 -
--------- --------
Outstanding December 31, 2002 1,365,500 $4.22 to $20.00 $8.99 -
========= ========
(Weighted average contractual
life of 6.9 years)

Exercisable Options:
December 31, 2000 273,500 $8.81 to $20.00 $15.32
December 31, 2001 348,500 $7.44 to $20.00 $14.81
December 31, 2002 575,000 $4.22 to $20.00 $11.84



The following table summarizes information about stock options outstanding at
December 31, 2002:



Options Options
Outstanding Exercisable
------------------------------------------------- -------------------------------
Weighted
Average Weighted Weighted
Range of Number Contractual Average Number Average
Exercise Prices Outstanding Life Exercise Price Exercisable Exercise Price
--------------- ----------- ----------- -------------- ----------- --------------

$4.22 to $7.44 636,000 8.6 years $4.75 55,000 $4.51
$7.45 to $14.00 477,000 6.2 years $11.17 267,500 $9.86
$14.01 to $20.00 252,500 4.2 years $15.55 252,500 $15.55
--------- -------
$4.22 to $20.00 1,365,500 6.9 years $8.99 575,000 $11.84
========= =======


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, vested five years
from the date of award. The Company has no restricted stock outstanding at
December 31, 2002. The weighted-average fair value of options granted in 2002,
2001 and 2000 was $1.90, $1.48 and $5.76 per share, respectively. Fair value
estimates were determined using the Black-Scholes option pricing model with the
following weighted average asumptions for 2002, 2001 and 2000:

2002 2001 2000
---- ---- ----
Risk-free interest rate 4.41% 5.13% 6.56%
Dividend yield 3.95% 4.74% 1.58%
Volatility factor 52% 52% 49%
Expected term of options (in years) 5 5 5

15. Net Income Per Share Computations
The following is a reconciliation of the numerator and denominator of the basic
and diluted per share computations (in thousands except per share data):



2002 2001 2000
---- ---- ----

Income (numerator) amounts used for basic and diluted per share computations:
Income (loss) before cumulative effect of change in accounting principle $ 9,116 $(193,552) $3,491
Cumulative effect of change in accounting principle (25,327) - -
------- --------- ------
Net income (loss) $(16,211) $(193,552) $3,491
======= ========= ======

Shares (denominator) used for basic per share computations:
Weighted average shares of common stock outstanding 15,994 16,428 16,567
====== ====== ======

Shares (denominator) used for diluted per share computations:
Weighted average shares of common stock outstanding 15,994 16,428 16,567
Plus: dilutive effect of stock options 103 - 6
------ ------ ------
Adjusted weighted average shares 16,097 16,428 16,573
====== ====== ======

Basic net income (loss) per share:
Income (loss) before cumulative effect of change in accounting principle $ 0.57 $(11.78) $ 0.21
Cumulative effect of change in accounting principle (1.58) - -
------ ------ ------
Net income (loss) $(1.01) $(11.78) $ 0.21
====== ====== ======

Diluted net income (loss) per share:
Income (loss) before cumulative effect of change in accounting principle $ 0.57 $(11.78) $ 0.21
Cumulative effect of change in accounting principle (1.57) - -
------ ------ ------
Net income (loss) $(1.00) $(11.78) $ 0.21
====== ======= ======


Options to purchase 779,500, 770,500 and 932,500 common shares for the years
ended December 31, 2002, 2001 and 2000, respectively, were excluded from the
calculations above because the exercise prices on the options were greater than
the average market price for the periods.

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

Rental payments Less sublease Net rental
required rental income payments required
-------- ------------- -----------------
2003 $3,834 $89 $3,745
2004 2,926 30 2,896
2005 1,537 - 1,537
2006 1,024 - 1,024
2007 886 - 886
2008-2015 2,903 - 2,903

Rental expense under cancelable and noncancelable leases for 2002, 2001 and 2000
was $4.2 million, $4.1 million and $3.8 million, respectively. The amount of
rental expense for 2002, 2001 and 2000 is net of sublease rental income of $0.09
million, $0.17 million and $0.03 million, respectively.

17. Selected Quarterly Financial Data (unaudited) All amounts are in thousands
except per share data.



Quarter
---------------------------------------------
1st 2nd 3rd 4th
-------- -------- -------- --------
2002
- ----

Net sales $221,858 $251,728 $253,933 $238,719
Gross profit 10,540 15,684 19,362 21,725
Income (loss) before cumulative effect of
change in accounting principle (4,423) 1,098 6,076 6,365
Net income (loss) (29,750) 1,098 6,076 6,365
Basic and diluted net income (loss) per share:
Income (loss) before cumulative effect of (0.28) 0.07 0.38 0.40
change in accounting principle
Net income (loss) (1.86) 0.07 0.38 0.40

2001
- ----
Net sales $230,191 $235,505 $249,914 $204,894
Gross profit 10,864 11,308 14,548 10,311
Net income (loss) (6,055) (4,900) (1,553) (181,044)
Basic and diluted net income (loss) per share (0.37) (0.30) (0.09) (11.08)



The net income (loss) for the first quarter of 2002 includes the $25.3 million
or $1.58 per basic share and $1.57 per diluted share non-cash goodwill
impairment charges and the fourth quarter of 2001 includes the $167.3 million or
$10.24 per basic and diluted share non-cash asset impairment charges. See note 2
for additional information on the asset impairment charges and note 3 for
additional information on the goodwill impairment charges. In addition, net
income for the fourth quarter of 2002 was increased by $1.4 million due to an
adjustment based on the deferral of certain planned maintenance expenses which
had been accrued in previous quarters of 2002.

18. Information Concerning Segments
The Company has determined it has two reportable segments: aluminum and
electrical products. The aluminum segment manufactures aluminum sheet for
distributors and the transportation, construction, and consumer durables end-use
markets. The electrical products segment manufactures flexible electrical wiring
products for the commercial construction 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 businesses 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 2002, 2001 and 2000. 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. The operating income (loss) and total
assets for 2001 for the aluminum segment include the $167.3 million non-cash
asset impairment charges recorded in the fourth quarter of 2001. The $167.3
million non-cash asset impairment charges were all related to the aluminum
segment and included $85.4 million of property, plant and equipment write-downs
($1.8 million of net land and improvements, $15.7 million of net building
improvements, $59.0 million of net machinery and equipment and $8.9 million of
construction in progress) and $81.9 million of goodwill write-downs. Total
assets for 2002 include the effects of the 2001 impairment charges and the $25.3
million non-cash goodwill impairment charges ($13.5 million relating to the
aluminum segment and $11.8 million relating to the electrical products segment)
recorded as a cumulative effect of a change in accounting principle as of
January 1, 2002. See note 2 for additional information on the asset impairment
charges and note 3 for additional information on the goodwill impairment
charges. All amounts in the following table are in thousands.



Electrical
Aluminum Products Other Total
---------- ----------- --------- ----------
2002
- ----

Net sales to external customers $853,849 $112,389 $ - $966,238
Intersegment net sales 26,821 - (26,821) -
Operating income (loss) 31,707 5,550 (16,923) 20,334
Depreciation 18,891 2,251 - 21,142
Amortization - - 984 984
Total assets 336,804 90,467 1,633 428,904
Capital expenditures 15,975 346 - 16,321

2001
- ----
Net sales to external customers $801,786 $118,718 $ - $920,504
Intersegment net sales 26,295 - (26,295) -
Operating income (loss) (164,153) 5,064 (19,658) (178,747)
Depreciation 27,853 2,200 - 30,053
Amortization 2,248 1,740 1,288 5,276
Total assets 336,740 100,824 2,068 439,632
Capital expenditures 8,797 205 - 9,002

2000
- ----
Net sales to external customers $990,961 $134,181 $ - $1,125,142
Intersegment net sales 27,673 - (27,673) -
Operating income (loss) 43,321 (3,616) (17,776) 21,929
Depreciation 31,255 2,428 - 33,683
Amortization 2,736 1,740 1,192 5,668
Total assets 561,782 90,693 2,865 655,340
Capital expenditures 18,282 163 - 18,445



19. 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.

20. Guarantor Financial Statements
The $125 million of 10.75% senior subordinated notes due 2006 issued by the
Company, and the $30 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 for the Parent Company
Only, Subsidiary Guarantors, Non-guarantor Subsidiaries and for the Company, a
combining balance sheet as of December 31, 2002 and 2001 and a statement of
operations and statement of cash flows for the years ended December 31, 2002,
2001 and 2000.

Combining Balance Sheet at December 31, 2002
(in thousands)


Parent
Company Subsidiary Non-guarantor Combined
Only Guarantors Subsidiaries Eliminations Totals
--------- ----------- ----------- ------------ --------

Assets
Current assets:
Cash and cash equivalents $ -- $ 13,211 $ -- $ -- $ 13,211
Accounts receivable, net -- 286,847 -- (286,781) 66
Inventories -- 125,348 -- -- 125,348
Net residual interest in receivables sold -- -- 81,195 -- 81,195
Prepayments and other current assets 435 6,698 -- -- 7,133
--------- --------- --------- --------- ---------
Total current assets 435 432,104 81,195 (286,781) 226,953
Property, plant and equipment, net -- 146,968 -- -- 146,968
Goodwill, net -- 48,872 -- -- 48,872
Other noncurrent assets 419,913 4,913 -- (418,715) 6,111
--------- --------- --------- --------- ---------
Total assets $ 420,348 $ 632,857 $ 81,195 $(705,496) $ 428,904
========= ========= ========= ========= =========

Liabilities
Current liabilities:
Accounts payable $ 161,658 $ 59,594 $ 125,123 $(286,781) $ 59,594
Accrued liabilities 5,859 23,515 (847) -- 28,527
--------- --------- --------- --------- ---------
Total current liabilities 167,517 83,109 124,276 (286,781) 88,121
Long-term debt 125,000 -- -- -- 125,000
Other long-term liabilities -- 5,183 -- -- 5,183
Accrued pension benefits -- 26,743 -- -- 26,743
Accrued postretirement benefits -- 76,670 -- -- 76,670
--------- --------- --------- --------- ---------
Total liabilities 292,517 191,705 124,276 (286,781) 321,717
--------- --------- --------- --------- ---------

Commitments and contingencies -- -- -- -- --

Stockholders' Equity
Common stock 160 1 -- (1) 160
Additional paid-in capital 405,613 486,727 5,000 (491,727) 405,613
Accumulated deficit (277,942) (24,932) (48,081) 73,013 (277,942)
Accumulated other comprehensive income:
Minimum pension liability adjustment -- (21,391) -- -- (21,391)
Effects of cash flow hedges -- 747 -- -- 747
--------- --------- --------- --------- ---------
Total stockholders' equity 127,831 441,152 (43,081) (418,715) 107,187
--------- --------- --------- --------- ---------
Total liabilities and stockholders' equity $ 420,348 $ 632,857 $ 81,195 $(705,496) $ 428,904
========= ========= ========= ========= =========

Combining Balance Sheet at December 31, 2001
(in thousands)


Parent
Company Subsidiary Non-guarantor Combined
Only Guarantors Subsidiaries Eliminations Totals
--------- ----------- ----------- ------------ --------

Assets
Current assets:
Cash and cash equivalents $ -- $ 6,393 $ -- $ -- $ 6,393
Accounts receivable, net -- 271,074 -- (270,993) 81
Inventories -- 119,038 -- -- 119,038
Net residual interest in receivables sold -- -- 82,310 -- 82,310
Prepayments and other current assets 435 2,795 -- -- 3,230
--------- --------- --------- --------- ---------
Total current assets 435 399,300 82,310 (270,993) 211,052
Property, plant and equipment, net -- 152,137 -- -- 152,137
Goodwill, net -- 74,199 -- -- 74,199
Other noncurrent assets 424,830 611 -- (423,197) 2,244
--------- --------- --------- --------- ---------
Total assets $ 425,265 $ 626,247 $ 82,310 $(694,190) $ 439,632
========= ========= ========= ========= =========

Liabilities
Current liabilities:
Accounts payable $ 148,971 $ 50,693 $ 122,022 $(270,993) $ 50,693
Accrued liabilities 5,784 33,997 (905) -- 38,876
--------- --------- --------- --------- ---------
Total current liabilities 154,755 84,690 121,117 (270,993) 89,569
Long-term debt 125,000 -- -- -- 125,000
Other long-term liabilities -- 6,899 -- -- 6,899
Accrued pension benefits -- 4,576 -- -- 4,576
Accrued postretirement benefits -- 79,422 -- -- 79,422
--------- --------- --------- --------- ---------
Total liabilities 279,755 175,587 121,117 (270,993) 305,466
--------- --------- --------- --------- ---------

Commitments and contingencies -- -- -- -- --

Stockholders' Equity
Common stock 160 1 -- (1) 160
Additional paid-in capital 405,443 486,727 5,000 (491,727) 405,443
Accumulated deficit (258,532) (24,724) (43,807) 68,531 (258,532)
Notes receivable from sale of common stock (1,561) -- -- -- (1,561)
Accumulated other comprehensive income:
Effects of cash flow hedges -- (11,344) -- -- (11,344)
Minimum pension liability adjustment -- -- -- -- --
--------- --------- --------- --------- ---------
Total stockholders' equity 145,510 450,660 (38,807) (423,197) 134,166
--------- --------- --------- --------- ---------
Total liabilities and stockholders' equity $ 425,265 $ 626,247 $ 82,310 $(694,190) $ 439,632
========= ========= ========= ========= =========


Combining Statement of Operations for the year ended December 31, 2002
(in thousands)


Parent
Company Subsidiary Non-guarantor Combined
Only Guarantors Subsidiaries Eliminations Totals
--------- --------- --------- --------- ---------

Net sales $ -- $ 966,238 $ -- $ -- $ 966,238
Cost of goods sold -- 898,927 -- -- 898,927
--------- --------- --------- --------- ---------
Gross profit -- 67,311 -- -- 67,311
Selling, general and administrative expenses 269 46,697 11 -- 46,977
Amortization of goodwill -- -- -- -- --
--------- --------- --------- --------- ---------
Operating income (loss) (269) 20,614 (11) -- 20,334
Other income (expense), net 20,845 1,636 -- (20,845) 1,636
Interest income (expense), net (13,833) 2,950 (4,263) -- (15,146)
--------- --------- --------- --------- ---------
Income (loss) before income taxes and cumulative
effect of change in accounting principle 6,743 25,200 (4,274) (20,845) 6,824
Income tax expense (benefit) (2,373) 81 -- -- (2,292)
--------- --------- --------- --------- ---------
Income (loss) before cumulative effect of
change in accounting principle 9,116 25,119 (4,274) (20,845) 9,116
Cumulative effect of change in accounting principle (25,327) (25,327) -- 25,327 (25,327)
--------- --------- --------- --------- ---------
Net income (loss) $ (16,211) $ (208) $ (4,274) $ 4,482 $ (16,211)
========= ========= ========= ========= =========


Combining Statement of Operations for the year ended December 31, 2001
(in thousands)


Parent
Company Subsidiary Non-guarantor Combined
Only Guarantors Subsidiaries Eliminations Totals
--------- --------- --------- --------- ---------

Net sales $ -- $ 920,504 $ -- $ -- $ 920,504
Cost of goods sold -- 873,473 -- -- 873,473
--------- --------- --------- --------- ---------
Gross profit -- 47,031 -- -- 47,031
Selling, general and administrative expenses 290 54,223 10 -- 54,523
Amortization of goodwill -- 3,988 -- -- 3,988
Asset impairment charges -- 167,267 -- -- 167,267
--------- --------- --------- --------- ---------
Operating income (loss) (290) (178,447) (10) -- (178,747)
Other income (expense), net (179,789) 907 -- 179,789 907
Interest income (expense), net (13,439) 4,704 (6,777) -- (15,512)
--------- --------- --------- --------- ---------
Income (loss) before income taxes (193,518) (172,836) (6,787) 179,789 (193,352)
Income tax expense 34 154 12 -- 200
--------- --------- --------- --------- ---------
Net income (loss) $(193,552) $(172,990) $ (6,799) $ 179,789 $(193,552)
========= ========= ========= ========= =========


Combining Statement of Operations for the year ended December 31, 2000
(in thousands)


Parent
Company Subsidiary Non-guarantor Combined
Only Guarantors Subsidiaries Eliminations Totals
--------- --------- --------- --------- ---------

Net sales $ -- $1,125,142 $ -- $ -- $1,125,142
Cost of goods sold -- 1,042,937 -- -- 1,042,937
--------- --------- --------- --------- ---------
Gross profit -- 82,205 -- -- 82,205
Selling, general and administrative expenses 249 55,545 6 -- 55,800
Amortization of goodwill -- 4,476 -- -- 4,476
--------- --------- --------- --------- ---------
Operating income (loss) (249) 22,184 (6) -- 21,929
Other income (expense), net 17,196 1,975 -- (17,196) 1,975
Interest income (expense), net (13,312) 6,000 (12,755) -- (20,067)
--------- --------- --------- --------- ---------
Income (loss) before income taxes 3,635 30,159 (12,761) (17,196) 3,837
Income tax expense 144 202 -- -- 346
--------- --------- --------- --------- ---------
Net income (loss) $ 3,491 $ 29,957 $ (12,761) $ (17,196) $ 3,491
========= ========= ========= ========= =========


Combining Statement of Cash Flows for the year ended December 31, 2002
(in thousands)


Parent
Company Subsidiary Non-guarantor Combined
Only Guarantors Subsidiaries Eliminations Totals
--------- ---------- ---------- --------- ----------
Cash flows from operating activities:

Net income (loss) $(16,211) $ (208) $ (4,274) $ 4,482 $(16,211)
Adjustments to reconcile net income (loss) to
net cash provided by operations:
Depreciation -- 21,142 -- -- 21,142
Amortization -- 984 -- -- 984
Goodwill impairment charge 25,327 25,327 -- (25,327) 25,327
Loss on disposal of property, plant and equipment -- 325 -- -- 325
Issuance of common stock in connection with stock awards 170 -- -- -- 170
Equity in undistributed net income of subsidiaries (20,845) -- -- 20,845 --
Changes in assets and liabilities:
(Increase) decrease in accounts receivable, net -- (15,773) -- 15,788 15
(Increase) in inventories -- (6,310) -- -- (6,310)
Decrease in net residual interest in receivables sold -- -- 1,115 -- 1,115
(Increase) in prepayments and other current assets -- (2,041) -- -- (2,041)
Decrease (increase) in other noncurrent assets 435 (4,037) -- -- (3,602)
Increase (decrease) in accounts payable 12,687 8,901 3,101 (15,788) 8,901
Increase (decrease) in accrued liabilities 75 (253) 58 -- (120)
(Decrease) in other liabilities -- (4,941) -- -- (4,941)
-------- -------- -------- -------- --------
Net cash provided by operating activities 1,638 23,116 -- -- 24,754
-------- -------- -------- -------- --------
Cash flows from investing activities:
Purchases of property, plant and equipment -- (16,321) -- -- (16,321)
Proceeds from sale of property, plant and equipment -- 23 -- -- 23
-------- -------- -------- -------- --------
Net cash (used in) investing activities -- (16,298) -- -- (16,298)
-------- -------- -------- -------- --------
Cash flows from financing activities:
Proceeds from long-term debt -- 77,270 -- -- 77,270
Repayments of long-term debt -- (77,270) -- -- (77,270)
Repayments of notes receivable from sale of common stock 1,561 -- -- -- 1,561
Cash dividends paid (3,199) -- -- -- (3,199)
-------- -------- -------- -------- --------
Net cash (used in) financing activities (1,638) -- -- -- (1,638)
-------- -------- -------- -------- --------
Net increase in cash and cash equivalents -- 6,818 -- -- 6,818
Cash and cash equivalents at beginning of period -- 6,393 -- -- 6,393
-------- -------- -------- -------- --------
Cash and cash equivalents at end of period $ -- $ 13,211 $ -- $ -- $ 13,211
======== ======== ======== ======== ========


Combining Statement of Cash Flows for the year ended December 31, 2001
(in thousands)


Parent
Company Subsidiary Non-guarantor Combined
Only Guarantors Subsidiaries Eliminations Totals
--------- ---------- ---------- --------- ----------
Cash flows from operating activities:

Net income (loss) $(193,552) $(172,990) $ (6,799) $179,789 $(193,552)
Adjustments to reconcile net income (loss) to
net cash (used in) provided by operations:
Depreciation -- 30,053 -- -- 30,053
Amortization 7 5,269 -- -- 5,276
Asset impairment charges -- 167,267 -- -- 167,267
Loss on disposal of property, plant and equipment -- 364 -- -- 364
Issuance of common stock in connection with stock awards 106 -- -- -- 106
Equity in undistributed net income of subsidiaries -- 179,789 -- (179,789) --
Changes in assets and liabilities:
(Increase) decrease in accounts receivable, net -- (28,898) -- 28,928 30
Decrease in inventories -- 18,647 -- -- 18,647
(Increase) in net residual interest in receivables sold -- -- (9,943) -- (9,943)
Decrease in prepayments and other current assets 362 7,771 -- -- 8,133
Decrease (increase) in other noncurrent assets 180,224 (180,546) -- -- (322)
Increase (decrease) in accounts payable 11,587 (2,829) 17,341 (28,928) (2,829)
Increase (decrease) in accrued liabilities 710 (13,635) (599) -- (13,524)
(Decrease) in other liabilities -- (6,472) -- -- (6,472)
-------- -------- -------- -------- --------
Net cash (used in) provided by operating activities (556) 3,790 -- -- 3,234
-------- -------- -------- -------- --------
Cash flows from investing activities:
Purchases of property, plant and equipment -- (9,002) -- -- (9,002)
Proceeds from sale of property, plant and equipment -- 91 -- -- 91
-------- -------- -------- -------- --------
Net cash (used in) investing activities -- (8,911) -- -- (8,911)
-------- -------- -------- -------- --------
Cash flows from financing activities:
Proceeds from long-term debt -- 57,110 -- -- 57,110
Repayments of long-term debt -- (57,110) -- -- (57,110)
Repayments of notes receivable from sale of common stock 3,848 -- -- -- 3,848
Cash dividends paid (3,292) -- -- -- (3,292)
-------- -------- -------- -------- --------
Net cash provided by financing activities 556 -- -- -- 556
-------- -------- -------- -------- --------
Net (decrease) in cash and cash equivalents -- (5,121) -- -- (5,121)
Cash and cash equivalents at beginning of period -- 11,514 -- -- 11,514
-------- -------- -------- -------- --------
Cash and cash equivalents at end of period $ -- $ 6,393 $ -- $ -- $ 6,393
======== ======== ======== ======== ========


Combining Statement of Cash Flows for the year ended December 31, 2000
(in thousands)


Parent
Company Subsidiary Non-guarantor Combined
Only Guarantors Subsidiaries Eliminations Totals
--------- ---------- ---------- --------- ----------
Cash flows from operating activities:

Net income (loss) $ 3,491 $ 29,957 $(12,761) $(17,196) $ 3,491
Adjustments to reconcile net income (loss) to
net cash provided by operations:
Depreciation -- 33,683 -- -- 33,683
Amortization (8) 5,676 -- -- 5,668
Loss on disposal of property, plant and equipment -- 1,280 -- -- 1,280
Issuance of common stock in connection with stock awards 121 -- -- -- 121
Equity in undistributed net income of subsidiaries -- (17,196) -- 17,196 --
Changes in assets and liabilities:
Decrease (increase) in accounts receivable, net 172,266 (182,650) -- 10,391 7
Decrease in inventories -- 69,728 -- -- 69,728
(Increase) in net residual interest in receivables sold -- -- (32,387) -- (32,387)
(Increase) decrease in prepayments and other current assets (170) 2,648 -- -- 2,478
(Increase) decrease in other noncurrent assets (315,858) 316,284 -- -- 426
Increase (decrease) in accounts payable 137,384 (216,681) 45,273 (10,391) (44,415)
Increase (decrease) in accrued liabilities 4,661 (2,640) (125) -- 1,896
(Decrease) in other liabilities -- (8,992) -- -- (8,992)
-------- -------- -------- -------- --------
Net cash provided by operating activities 1,887 31,097 -- -- 32,984
-------- -------- -------- -------- --------
Cash flows from investing activities:
Purchases of property, plant and equipment -- (18,445) -- -- (18,445)
Proceeds from sale of property, plant and equipment -- 50 -- -- 50
-------- -------- -------- -------- --------
Net cash (used in) investing activities -- (18,395) -- -- (18,395)
-------- -------- -------- -------- --------
Cash flows from financing activities:
(Decrease) in outstanding checks in excess of deposits -- (1,188) -- -- (1,188)
Proceeds from long-term debt -- 57,100 -- -- 57,100
Repayments of long-term debt -- (57,100) -- -- (57,100)
Repayments of notes receivable from sale of common stock 1,426 -- -- -- 1,426
Cash dividends paid (3,313) -- -- -- (3,313)
-------- -------- -------- -------- --------
Net cash (used in) financing activities (1,887) (1,188) -- -- (3,075)
-------- -------- -------- -------- --------
Net increase in cash and cash equivalents -- 11,514 -- -- 11,514
Cash and cash equivalents at beginning of period -- -- -- -- --
-------- -------- -------- -------- --------
Cash and cash equivalents at end of period $ -- $ 11,514 $ -- $ -- $ 11,514
======== ======== ======== ======== ========


21. EBITDA Calculation
The calculation of EBITDA (earnings before interest, income taxes, depreciation
and amortization) for the years ended December 31 is as follows (in thousands):

2002 2001
---- ----
Net income (loss) $(16,211) $(193,552)
Add back depreciation 21,142 30,053
Add back amortization (1) - 3,995
Add back tax expense or subtract tax benefit (2,292) 200
Add back interest expense, net (1) 15,146 15,512
------ -------
EBITDA including non-cash impairment charges 17,785 (143,792)
Add back non-cash goodwill impairment charges 25,327 -
Add back non-cash asset impairment charges - 167,267
------ -------
EBITDA excluding non-cash impairment charges $43,112 $ 23,475
====== =======

(1) Amortization of financing costs for the years ended December 31, 2002 and
2001 of $984 and $1,281, respectively, is included in interest expense, net
instead of in amortization in the above calculation.


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 operations, comprehensive income (loss),
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, 2002 and 2001, and the consolidated results of
their operations and their cash flows for each of the three years in the period
ended December 31, 2002, in conformity with accounting principles generally
accepted in the United States of America. 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 of America, 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 our opinion.
As discussed in note 3 to the consolidated financial statements, the
Company adopted Financial Accounting Standards Board (FASB) Statement No. 142,
"Goodwill and Other Intangible Assets," effective January 1, 2002. As discussed
in note 7 to the consolidated financial statements, the Company adopted FASB
Statement No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended by FASB Statement No. 138, "Accounting for Certain
Derivative Instruments and Certain Hedging Activities - an amendment to FASB
Statement No. 133," effective January 1, 2001.

/s/ PricewaterhouseCoopers LLP

Louisville, Kentucky
February 26, 2003


Exhibit 21
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Direct and Indirect Subsidiaries of Commonwealth Industries, Inc.


Name Jurisdiction of Incorporation
---- -----------------------------
Commonwealth Financing Corp. (1) Delaware

CA Lewisport, Inc. (1) Delaware

Commonwealth Aluminum Sales Corporation (2) Delaware

Commonwealth Aluminum Lewisport, LLC (7) Delaware

Commonwealth Aluminum Metals, LLC (6) Delaware

CI Holdings, Inc. (1) Delaware

Alflex Corporation (3) Delaware

Alflex E1 LLC (5) Delaware

Commonwealth Aluminum Concast, Inc. (3) Ohio

Commonwealth Aluminum Tube Enterprises, LLC (4) Delaware

Commonwealth Aluminum Corporation (8) Delaware
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(1) Subsidiary of Commonwealth Industries, Inc.

(2) Subsidiary of CA Lewisport, Inc.

(3) Subsidiary of CI Holdings, Inc.

(4) Limited Liability Company 100% owned by Commonwealth Aluminum
Concast, Inc.

(5) Limited Liability Company 100% owned by Alflex Corporation.

(6) Limited Liability Company 100% owned by Commonwealth Aluminum
Lewisport, LLC.

(7) Limited Liability Company 73% owned by CA Lewisport, Inc. and 27%
owned by Commonwealth Aluminum Corporation.

(8) Subsidiary of Commonwealth Aluminum Concast, Inc.


Exhibit 23
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Consent of Independent Accountants

We hereby consent to the incorporation by reference in the Registration
Statements on Forms S-8 (File No's. 333-81055, 333-29363, 333-19383, 33-91364
and 33-90292) of Commonwealth Industries, Inc. and subsidiaries of our report
dated February 26, 2003 relating to the consolidated financial statements, which
appears in the Annual Report to Stockholders, which is incorporated in this
Annual Report on Form 10-K. We also consent to the incorporation by reference of
our report dated February 26, 2003 relating to the consolidated financial
statement schedule, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

Louisville, Kentucky
March 25, 2003