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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

For The Fiscal Year Ended December 31, 2004

or

WISE METALS GROUP LLC

(Exact name of Registrant as specified in its charter)

857 Elkridge Road, Suite 600

Linthicum, Maryland 21090

(Address of principal executive offices and zip code)

(410) 636-6500

(Registrant’s telephone number, including area code)

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. ¨

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  ¨    No  x

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

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FORWARD-LOOKING STATEMENTS

Our forward-looking statements are subject to a variety of factors that could cause actual results to differ significantly from current beliefs.

Some statements and information contained in this Form 10-K are not historical facts, but are “forward-looking statements,” as such term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by the use of forward-looking words such as “believes,” “expects,” “plans,” “may,” “will,” “would,” “could,” “should,” or “anticipates” or the negative of these words or other variations of these words or other comparable words, or by discussions of strategy that involve risks and uncertainties. Forward-looking statements may differ from actual future results due to, but not limited to, those factors referenced under “Risk Factors” in the Business Section and/or any of the following factors:

We have no obligation to update or revise these forward-looking statements.

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Part I

As used in this Form 10-K, all references to “Wise Metals,” “Wise Group,” “us,” “the Company” and all similar references are to Wise Metals Group LLC, a Delaware limited liability company and its subsidiaries as a consolidated entity, unless otherwise expressly stated or the context otherwise requires. As used herein, all references to “Wise Alloys” or “Alloys” refer to Wise Alloys LLC, a Delaware limited liability company, that is our wholly-owned operating company. All references to “Wise Recycling” or “Recycling” refer to Wise Recycling LLC, a Maryland limited liability company that is our wholly-owned subsidiary.

Overview

We are the third largest producer of aluminum beverage can stock in the world and one of the largest aluminum scrap recyclers in the United States. Beverage can stock is aluminum sheet specifically designed and engineered for the production of aluminum beverage cans. In 2004, we supplied an estimated 15% of the North American market for aluminum beverage can stock as measured by volume, and we own one of only five beverage can stock facilities in North America, which provides valuable capacity to a consolidated industry. Our can stock customers include, Ball Corporation, Crown Holdings, Inc. and Rexam PLC, the three largest beverage can manufacturers in the world, together representing 79% of the beverage can stock purchased in North America in 2004. Our beverage can stock customers produce aluminum cans for the largest brewers and carbonated soft drink bottlers in North America. In addition, we produce food can stock and semi-fabricated aluminum sheet for building and construction, transportation and other markets. Our recycling operation, Wise Recycling, provides aluminum feedstock for our aluminum sheet production and collects scrap for sale in the merchant market. In 2004, we did not derive a material percentage of our revenues from customers outside the United States.

The aluminum beverage can industry is a consolidated and mature industry which has experienced consistent historical stability. Four principal competitors, Ball, Crown, Rexam and Metal Container Corporation, the can-making subsidiary of Anheuser-Busch Companies, Inc., account for 99% of the production volumes of aluminum beverage cans in North America. Over the past ten years, the compounded annual growth rate for the United States beverage can market has been approximately 0.5%. In addition to our Listerhill facility in Muscle Shoals, Alabama, the only other facilities in the world that have the capability to produce aluminum beverage can stock are operated by two companies, Alcoa, Inc. and Novelis, Inc. which was spun off by Alcan, Inc in January 2005. The newest of these facilities was built in the mid-1980’s and we are unaware of any plans to build additional facilities to serve the can stock industry. Factors that have led to the consolidation in the industry and our expectation of limited new entrants include substantial capital requirements, lengthy customer qualification procedures and Food and Drug Administration regulations concerning beverage can coatings for bottlers. Most importantly, customers’ stringent requirements for thinner gauge can stock and higher quality can stock have surpassed the technical capabilities of most rolling mill operators. Furthermore, there historically have been virtually no foreign shipments of aluminum beverage can stock to North America primarily due to product quality requirements.

Our primary manufacturing operation, Wise Alloys, converts aluminum feedstock into beverage can stock, food container stock and semi-fabricated aluminum sheet. Unlike Alcoa and Alcan, we do not manufacture aluminum from bauxite. Instead, we process aluminum scrap and prime aluminum manufactured by third parties. Our production takes place at our Listerhill facility, which we purchased in 1999 as part of Reynolds’ divestiture of its integrated can-making infrastructure. Ball purchased Reynolds’ can-making assets in 1998 and since that time has remained a major customer of our Listerhill facility. The Listerhill facility is a four million square foot plant with 1.8 billion pounds of annual casting capability, 1.4 billion pounds of annual hot mill capacity and 1.1 billion pounds of annual finishing capacity. The facility has been well-maintained and modernized with more than $670 million spent on capital improvements since a major modernization process was begun by Reynolds in 1986. We believe the facility is one of the most technologically advanced and lowest cost aluminum processing mills in North America. We do not expect that the facility will require significant near-term capital expenditures.

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Aluminum feedstock purchases comprised approximately 70% of our cost of sales in 2004 for our Alloys operations, with scrap comprising 75% of those total aluminum purchases. Historically, scrap has been a lower cost input for the production of our products than prime aluminum because our scrap reclamation assets are integrated into our production process and because scrap has generally been sold at a discount to prime aluminum. We have scrap purchase arrangements with our key customers through which we purchase scrap aluminum generated by their can production processes. These scrap purchase arrangements provided us with approximately 25% of our scrap aluminum requirements in 2004. We also obtain scrap from our scrap collection subsidiary, Wise Recycling, which provided us with approximately 8% of our scrap aluminum requirements in 2004. Our remaining scrap aluminum requirements are met by independent suppliers and brokers. We believe that we are one of the largest purchasers of used beverage containers, or UBCs, in North America, and we believe that our purchasing power provides us with the ability to negotiate favorable terms and conditions with our suppliers and enhance our operating margins.

Recycling is one of largest, direct-from-the-public collectors of aluminum beverage containers in the United States. In 2004, its plants recycled over 1.4 billion UBCs. It provides us with an effective, profitable infrastructure to obtain a portion of Wise Alloys’ scrap requirements. Recycling has developed a collection process that utilizes both direct acquisitions from scrap dealers and industrial accounts, as well as from the actual consumer, i.e. off-the-street. The collection process is centered through its seven shipping/regional centers which act as hubs for a total of 38 service and convenience centers. The shipping centers process and upgrade the various metals collected at their respective service and convenience centers. Furthermore, Wise Recycling collects other forms of non-ferrous scrap, primarily non-UBC aluminum, copper and brass, for sale into the merchant market. In 2004, Recycling sold 83.4 million pounds of scrap to third parties. We are currently expanding the business of Recycling to include warehousing operations in order to provide regional shipping centers for our scrap collection and to enhance our ability to provide vendor managed inventory program required by Alloys customers. These warehousing facilities, the first of which opened in Los Angeles in May 2004 store can sheet to be delivered to the customer and also operate as centralized shipping points for scrap and this dual role optimizes labor costs and allows us to manage freight costs by coordinating outbound aluminum coil shipments from the Listerhill facility and inbound scrap from the warehouse sites by captive rail car. Recycling is exploring the opening of other warehousing facilities in several other states in the latter part of 2005.

Wise Metals’ subsidiary, Listerhill Total Maintenance Center, LTMC, provides maintenance, repairs and fabrication to manufacturing and industrial plants worldwide ranging from small on-site repairs to complete turn-key maintenance. LTMC was named recently as one of two approved contractors in a 5-year project for up to $50 million to supply contracted equipment repair and maintenance services work for local Tennessee Valley Authority (TVA). As of year end, no direct orders for this project had been received.

U.S. Aluminum Sheet Market Overview

We compete principally in the rolled aluminum sheet product market. This market in North America is believed to consist of approximately 10 billion pounds of aluminum shipments annually in segments such as packaging, automotive, building and construction and original equipment manufacturing. The rolled aluminum market is somewhat fragmented, with numerous domestic competitors serving a number of different markets according to industry data. We principally serve the packaging segment, which represented approximately 40% of rolled aluminum sheet products in 2004.

We estimate that the top manufacturers of aluminum beverage cans in North America in 2004 were Ball with a 35% market share (including 2% attributable to Ball’s interest in a joint venture with Coors Brewing Company), Crown with a 21% market share, Metal Container with a 23% market share and Rexam with a 21% market share. These manufacturers are supplied with aluminum beverage can stock (aluminum sheet for body stock, tab and ends) by four principal suppliers: Novelis (formerly Alcan’s aluminum rolled products business), Alcoa, ARCO and ourselves. We estimate that within this highly

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concentrated market, Alcoa and Novelis each hold about a one-third market share and we hold a 15% market share. The remainder of the capacity is provided by ARCO, which shares with Novelis the ownership of a facility in Logan County, Kentucky. Alcan spun off its rolled aluminum products business as separate publicly traded company, Novelis, in January 2005.

The recent spin off of Novelis did not change the capacity of the overall can sheet business. Alcan did retain approximately 7-10 % of the can sheet business, accordingly there are now four companies manufacturing the product and five companies selling the product. Unlike its predecessor, Novelis has no North American reduction capability and will be viewed primarily as a conversion company for flat rolling sheet product similar to Wise, but with a much larger and diverse product line.

Aluminum beverage containers are sold primarily to makers and fillers of carbonated soft drinks, beer and other beverages. The principal aluminum beverage container purchasers in the United States are Anheuser-Busch, The Coca-Cola Company and PepsiCo Inc. Given the highly concentrated and integrated nature of the aluminum can supply chain (from can stock supplier to ultimate purchaser), customer relationships tend to be long-term and highly interdependent in nature. For example, our customers require prospective can stock suppliers to undergo a rigorous qualification process at their individual manufacturing facilities of up to twelve months before the prospective supplier is approved.

The aluminum can stock market is driven by factors associated with the aluminum beverage can industry. The United States aluminum beverage market is recognized as a mature market that has experienced slow but stable growth. Total U.S. producer can stock shipments grew an estimated 2.4% in 2004. Aluminum can stock demand and pricing is influenced by aluminum prices, end-market retail strategies, consumer sentiment and industry capacity.

Products

Beverage Can Sheet Products

We process prime aluminum, scrap and alloying agents into sheet products primarily for use in the manufacturing of aluminum beverage can containers. We produce different sheet products for each of the three components of an aluminum beverage can: the body, the end and the tab, which represent 78.5%, 18.6%, and 2.9%, respectively, of an average beverage can’s weight.

The beverage can stock industry market in which we participate has been driven by increasingly demanding product specifications in the last decade. In 1993, the average can stock gauges were 0.01140” for body stock and 0.01080” for end stock. At these relatively heavy thicknesses, the requirements for the uniformity of flatness and thickness across the entire width of the coil was achievable by all seven producers then making can stock. Similarly, at those gauges, inclusions, impurities and other imperfections in the can stock were far less critical. However, as a result of the struggle for market share and an excess of capacity in the industry, can makers dramatically improved their product and lowered their costs. Their suppliers, can stock makers, had to adapt to these changes in order to survive. By the end of 2000, there were only three can stock makers still existing in North America: Alcoa, Alcan and Wise Alloys. Participants left the industry because they were unable to produce the thinner gauge stock can makers requested and also meet their more stringent quality requirements. Can stock gauges dropped significantly, to 0.01080” for body stock and 0.0086” for end stock, a decline of 5.3% and 20.4%, respectively. It was especially arduous for can stock makers to meet new specifications profitably because the gauges were most significantly reduced in the end and not the body. They had trouble in achieving extremely tight tolerances in a very hard alloy of aluminum and magnesium. Coincident with this change, can makers increased their quality requirements. For example, while in 1996 a rejection rate of 1 in 10,000 cans was acceptable, the level today is 2 in 100,000, representing an 80% increase in the acceptable rejection rate. Today, the three remaining can stock makers have reduced their costs and raised their quality levels to where they are now shipping 0.0080” gauge end stock. We believe that the can stock we produce for everyday orders is equal in quality to that of our competitors, Alcoa and Novelis, and that the quality of our can stock for special orders is superior.

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There are two components to pricing beverage can sheet products. The first component is a fixed conversion, or value-added, price and the second component is the market price for aluminum that we can pass on to customers, subject to industry-wide ceilings. The fixed conversion or value-added price is calculated annually using Alcoa’s list price as a basis. Conversion pricing under supply agreements are subject to renegotiation each year as well as at such times that our major competitors change their published conversion prices. With respect to the industry-standard aluminum component of the pricing arrangement, we charge the market price for aluminum effect on a trailing six month basis prior to delivery.

Other Aluminum Sheet Products

The remainder of our aluminum sheet products include rigid container stock for food container manufacturers and fin stock (light gauge alloy) for air conditioners, refrigeration sheets and commercial coolers. We produce small volumes of extra wide aluminum sheeting for truck trailer roofing and for unique architectural projects and aluminum tread for use in tool boxes in truck beds and linings. Although not produced in 2004, Wise intends to produce aluminum sheet for the building and construction products segment in 2005.

The following table sets forth our rolled aluminum product distribution for the past three years:

Recycling

As well as acting as a low-cost supplier of scrap for our aluminum processing operations, Recycling collects and sells copper and brass scrap, which is sold to third parties.

Customers

Ball

Ball is the largest beverage can manufacturer in the United States with a 35% market share (including 2% attributable to Ball’s interest in a joint venture with Coors). In 2004, we supplied Ball with approximately 65% of our Listerhill facility’s total plant output. Our Listerhill facility has served selected Ball manufacturing facilities since 1965. We were the largest supplier of aluminum beverage can stock to Ball in 2004. Shipments increased 1.7% from 2003 to 2004 due to the unseasonably cold and wet weather in the summer of 2003 in the U.S. and Canada, which decreased beverage can consumption and therefore demand for can stock. This increase was consistent with industry-wide increases in can stock shipments as weather conditions returned to normal in 2004.

Our supply agreement with Ball provides that Ball will buy from us all of the aluminum beverage can stock requirements of the beverage can manufacturing facilities Ball purchased from Reynolds until the end

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of 2007. Ball also has the option to have other can stock producers supply aluminum body stock to its can manufacturing plants located in Hawaii and Puerto Rico.

The Ball supply agreement provides for Ball to order minimum shipment amounts in each year of the contract. While Ball has the right to reduce these specified minimum shipment amounts, it generally can only do so contractually in proportion to reductions in the beverage can stock requirements of all of its can manufacturing facilities in North America and not merely on the basis of reductions in the requirements of the Ball facilities we supply. In addition, Ball may also reduce these minimum shipment amounts in the event our products fail to meet agreed quality levels.

Crown

In 2004, we supplied approximately 26% of our Listerhill facility’s total plant output to Crown. Shipments were 34% higher than shipments for 2003.

Our supply agreement with Crown provides that Crown will buy beverage can and food container stock from us until the end of 2008. Under the Crown contract, Crown has the right to proportionately reduce its volumes if its soft toll increases thereby reducing its direct purchase market.

Other Customers

We finished the qualification process with Rexam at two of its locations in 2003. In 2004, we shipped approximately 3% of our can stock to Rexam up from approximately 1% of our can stock from 2003. Rexam is the third major independent can manufacturer in the U.S. and our relationship with them represents an important step in our diversification strategy.

We began trial shipments of can stock to a fourth major beverage can manufacturer in 2004. In addition, we presently have a small number of customers for products other than can stock. For example, General Electric Company purchases fin stock from us. We are increasing our marketing efforts in order to develop and diversify our customer base in high value added products. In particular, we seek new customers who have not traditionally purchased from our Listerhill facility because of its former affiliation with Reynolds. We have sold StarBright^™ and trailer roof through a marketing arrangement with Commonwealth Industries, Inc., now Aleris International, Inc. after its merger with IMCO Recycling, Inc. This arrangement terminates on April 1, 2005. We are currently in the process of building a depot stock of common alloy sheet products to service this very strong market. We presently have some significant contracts for these new products with continued positive interest from market participants.

Wise Recycling currently sells non-ferrous scrap to third parties including Alsco Metals Corporation, formerly Owens Corning Metals Systems, Howell Metal Company and Maxwell Metals Group.

Operations

Aluminum Sheet Operations

We believe that our Listerhill facility is one of the most technologically advanced and flexible manufacturing facilities in the United States aluminum sheet industry. Our Listerhill facility benefited from over $670 million of capital improvements and upgrades since a major modernization process was begun by Reynolds in 1986. The facility’s features include state-of-the-art gauge control and closed-loop shape control systems, as well as state-of-the-art surface inspection systems. Our Listerhill facility’s hot-mill rolling speed is equal to industry standards, while the cold-mill rolling speed is competitive with that of our leading competitors. One of our three coating lines can coat wide width aluminum sheet at a high speed. These investments strengthened our facility’s competitive position by improving its product quality, increasing its processing capacity and reducing its operating costs. Since 2000, we have incurred annual maintenance expenditures ranging from approximately $32 to $47 million annually, comprising between $14 million and $24 million in part replacements and contractor costs and between $18 million and $23 million in employment costs. In addition, our annual capital expenditures, primarily for equipment and

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related upgrades, have averaged $11 million since 2000. In 2004, we spent $16 million in part replacements and contractor costs and $20 million in employment costs. We do not anticipate the need to make any major capital expenditures in the immediate future. Our facility’s features include a technologically advanced electromagnetic cast house, which is the only multiple station unit in the industry; a pusher furnace; hot mills with 116-inch width capability; four cold mills; an annealing line; a coating line and inspection and gauge control systems; and surface inspection systems. Our rolling capabilities have allowed us to meet our customers’ increasing demands for thinner gauge aluminum sheets and their increasingly stringent quality controls, unlike some of our former competitors. For instance, Listerhill is one of only two North American facilities capable of rolling the widths necessary for trailer roofs. In addition, our electromagnetic casting facilities and cold mills also give us superior flexibility to produce customized runs of limited quantity products with shorter production lead times in a cost effective manner. These shorter runs enable us not only to meet our can stock customers’ demands for special seasonal or promotional products or innovative new products with a limited initial market, such as energy drinks, but also efficiently produce other products, such as StarBright^™, an aluminum tread product used in truck beds and linings.

We are in the process of converting and qualifying our end stock material from our three stand operation, where we have to make two passes to roll aluminum coil to proper gauge, to our five stand operation, where a coil only has to make one pass. This will increase our efficiencies in producing end stock while maintaining improved surface quality. This process change will also result in improved capacity on our three-stand that will allow for increased volume. Currently, we are approximately 20% qualified with our various customer plant locations and expect to be qualified with the majority of customers’ plant locations by the third quarter of 2005. Any time a major process change such as this is undertaken, each customer plant location that we serve must re-qualify our product to ensure proper specification. This is done through trial shipments and if the plant location and their respective customers all accept the product within specification, then the process change is considered qualified and the change can then be implemented on all product sold to that customer location.

Recycling Operations

Recycling is one of largest, direct-from-the-public collectors of aluminum beverage containers in the United States. In 2004, its plants recycled over 1.4 billion UBCs. Recycling has developed a collection process that utilizes both direct acquisitions from scrap dealers and industrial accounts, as well as from the actual consumer, i.e. off-the-street. The collection process is centered through its seven shipping/regional centers which act as hubs for a total of 38 service and convenience centers. The regional shipping centers process and upgrade the various metals collected at their respective area service and convenience centers. We are currently expanding the business of Recycling to include warehousing operations in order to provide regional shipping centers for our scrap collection and to enhance our ability to provide vendor managed inventory program required by Alloys customers. These warehousing facilities will store can sheet to be delivered to the customer and also operate as centralized shipping points for scrap and this dual role will optimize labor costs and allow us to manage freight costs by coordinating outbound aluminum coil shipments from the Listerhill facility and inbound scrap from the warehouse sites by captive rail car. Recycling opened its first warehouse in Los Angeles in May 2004.

Suppliers and Materials

The raw materials used by our aluminum sheet business are generally available from several sources. We utilize a mix of scrap aluminum and prime aluminum. Our supply of raw materials satisfies our current production requirements.

One of our key competitive advantages in the production of can stock is our use of scrap aluminum for a large proportion of our aluminum requirements. Aluminum can body stock can be manufactured with UBCs comprising up to 95% of the metal used. As we are capable of processing and recycling UBCs in an efficient manner and the use of scrap is nearly always less expensive than utilizing primary aluminum to produce the alloy required for producing can sheet, we believe that our high utilization of scrap provides us with a cost advantage over our competitors. In 2004, we satisfied approximately 75% of our raw material requirements from scrap aluminum, of which approximately 56% was composed of UBCs, 25% was scrap

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purchased from our customers and 19% was all other scrap including recycled sheet ingot and electric cable. In 2004, approximately 8% of our scrap aluminum requirements were supplied through our scrap collection subsidiary, Wise Recycling. We expect that a significant amount of our scrap aluminum requirements will continue to be sourced through scrap purchase arrangements with our can sheet customers, and purchases through Wise Recycling and third party suppliers. We obtain prime aluminum from brokers throughout the United States and directly from foreign and domestic producers.

We expect to obtain the balance of our scrap aluminum requirements from our established network of independent scrap dealers and brokers throughout the United States. We believe we are the largest purchaser of UBCs in North America, and as a result, we enjoy considerable leverage with our vendor base.

We purchase our electrical requirements from the TVA and our natural gas from Enbridge.

Competition

The aluminum beverage can stock market is highly concentrated and competitive. Our principal competitors in the aluminum beverage can stock industry are Alcoa and Novelis, recently spun off from Alcan, who each held an estimated one-third of the U.S. market share in 2004. The main factors influencing competition in our industry are quality and price. Competition is also affected by each customer’s requirements that suppliers complete a qualification process to supply their plants. The beverage can stock industry also faces competition from non-aluminum sources of packaging such as glass and HDPE and PET packaging producers.

Intellectual Property

We have acquired certain intellectual property rights under licenses from others for use in our business. In particular, we are a licensee under a technology license agreement with Alcoa that grants us a non-exclusive, perpetual, royalty-free, fully paid-up license to use the technology employed at our Listerhill facility. The license covers the processes, methods, practices and techniques for systems used and products produced at Listerhill. It includes the rights to change and further develop the technology and worldwide non-exclusive rights to offer for sale and sell products produced at the Listerhill facility.

In addition, the Alcoa technology license agreement grants us the right throughout North America to make products using licensed technology at the Listerhill facility or using technology used at other facilities that were owned by Reynolds at the time of the Listerhill facility acquisition or which were previously owned by Reynolds. Alcoa is responsible for obtaining and maintaining all patent rights relating to the licensed technology.

We do not have any patents, licenses or trademarks other than those that are the subject of the Alcoa technology license agreement that we believe to be material to our business viewed as a whole.

Research and Development

We engage in research and development programs that include aluminum sheet production process and product development and basic and applied research. We believe that these programs can lead to more cost-effective manufacturing systems that contribute to improvements in quality and operating efficiencies as well as new products. We conduct our research and development activities at our Listerhill facility. Expenditures for our research and development activities were $0.6 million in 2004. We fund substantially all our research and our development expenses through operations.

Employees

As of December 31, 2004, we had 984 employees at our Listerhill facility and 29 Wise Group employees at our corporate headquarters. Approximately 74% of these employees are engaged in production, 4% in engineering, research and development and 22% in sales, marketing, product support and general administration. Approximately 74% of these employees are represented by unions and are covered by collective bargaining agreements that will expire on November 1, 2007. In addition, as of December 31,

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2004, Recycling had 103 employees. We consider our employee relations to be good. Neither we nor our predecessor have experienced any major labor stoppage in the past 10 years.

Environmental Matters

Our operations are subject to numerous and increasingly stringent federal, state and local laws and regulations governing protection of the environment, including those relating to air emissions, wastewater and stormwater discharges, the handling, disposal and remediation of hazardous substances and wastes, and public and employee health and safety. Our operations involve the management of hazardous materials and the use of aboveground and underground storage tanks containing materials that are subject to requirements of the federal Resource Conservation and Recovery Act, or RCRA, and comparable state statutes. Under such statutes, investigation or remediation may be necessary in the event of leaks or other discharges from current or former underground or aboveground storage tanks or other sources. Our operations involving air emissions and wastewater and stormwater discharges are subject to the Clean Air Act and Clean Water Act, respectively. Similar to many of our competitors, we have incurred and will continue to incur capital and operating expenditures and other costs in complying with such laws and regulations. Our operations also involve the risk of the release of hazardous materials into the environment. In addition, we send material to third party recycling, treatment, and/or disposal facilities. The Comprehensive Environmental Response, Compensation, and Liability Act of 1980 and comparable state statutes can impose strict, and under some circumstances joint and several, liability upon entities that send materials to third party facilities for investigation and remediation of contamination, as well as on owners and operators of sites at which soil or groundwater contamination is identified. We have not received any notice of such potential liability at any such facilities.

Our operating expenditures relating to environmental requirements in 2004 were approximately $2.9 million and are expected to be similar in 2005 and 2006. Future environmental regulations, including those under the Clean Air Act and Clean Water Act, or more aggressive enforcement of existing regulations, may result in stricter compliance requirements for us and for the aluminum industry in general.

In connection with our acquisition of the Listerhill facility in 1999, a consultant performed a soil and groundwater investigation (“Phase II Report”) to identify any environmental issues at the various plants that comprise the Listerhill facility. That Phase II Report identified certain on-site environmental areas of concern that may potentially require investigation or remediation and provided a then-present value estimate of approximately $18 million to address them. Pursuant to the Listerhill facility purchase agreement, the prior owner of the Listerhill facility, Reynolds, now Alcoa, is required to perform the work necessary and to indemnify us against the environmental matters required by applicable law to be addressed that are identified in the Phase II Report and any other such environmental liabilities attributable to Reynolds that are identified on or before March 31, 2004 subject to certain limitations. Alcoa disagrees with the cost estimates contained in the Phase II Report and has stated that it estimates that the environmental issues identified in the Phase II Report will cost less than $18 million to remediate. Although Alcoa has conducted some on-site environmental investigations and sampling and has submitted reports to the Alabama Department of Environmental Management (ADEM) regarding most of the on-site areas of concern, it has not yet commenced cleanup activities with respect to many of the areas of concern.

We are also party to an Environmental Cooperation Agreement, or ECA, with Alcoa, which is Reynolds’ successor. The ECA addresses, among other things, the use of a surface water ditch system by both us and Alcoa, the use of process water retention ponds on Alcoa’s property and certain surface drainage easements across our property. The ECA expires in December 2009, with automatic two year renewal periods unless either party elects to terminate, in which event the ECA will terminate one year following such election. Under the ECA, each party defends and indemnifies the other against claims arising from its own violations of any applicable environmental laws, its handling, use, or disposal of hazardous materials at the Listerhill facility, a breach of any warranties, representations or covenants in the agreement, or damage or loss to property and injury to or death of any persons.

We believe that we are in material compliance with environmental requirements and that environmental matters will not have a material adverse effect on our business, although resolution of

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particular items in any particular year or quarter could be material to the results of operations or liquidity for that period. However, we cannot guarantee that newly discovered conditions, or new, or more aggressive enforcement of applicable environmental requirements, or any failure by Alcoa to perform its indemnification obligations will not have a material adverse effect on our business.

Wise has not discovered any new environmental concerns. As noted all significant environmental issues have been identified and remain the responsibilities of Alcoa under the original Asset Purchase Agreement. Alcoa has acknowledged its obligation and discussions continue regarding the methodology to remediate these concerns.

Risk Factors

A decrease in sales to a major customer and or the granting of price concessions could adversely affect our business.

We derived approximately 60% and 25% of our total revenues in 2004 from sales to Ball and Crown, respectively. The Ball supply agreement is scheduled to terminate in 2007 and the Crown supply agreement is scheduled to terminate in 2008. These customers have the ability to reduce their purchases from us if our product quality declines or if we fail to perform under a material provision of our supply agreements. There is no guarantee that we will be able to renew these supply agreements on favorable terms, or at all. In addition, the amount of aluminum can stock and other products we sell under these agreements could decrease. For example, Crown and Ball have the option under their supply agreements to reduce specified shipment amounts in proportion to reductions in the beverage can stock requirements of all of their can manufacturing facilities in North America. See “Business—Customers.”

The loss of either of these customers or decreases in either customer’s levels of purchases from us for any reason, including a customer’s closing or sale of a plant, a sale of its business, a strike or work stoppage by its employees or financial difficulties, or an adverse change in the terms of the supply arrangements with either customer could have a harmful effect on our business.

In addition, our contracts with Ball and Crown permit them to request price reductions for our products under certain circumstances. Pricing under these supply agreements is based in part on the list price of aluminum of one of our competitors, Alcoa. Alcoa’s financial resources and excess capacity may allow it to reduce its prices for an extended period of time. If Alcoa reduces its list price, we may be forced to lower the prices for the products we sell to Ball and Crown. Such a reduction could have a material adverse effect on our margins and profitability.

The loss of our raw materials sources could hurt our business.

Our aluminum can stock production operations use various raw materials, including scrap aluminum and prime aluminum. During 2003 and 2004, we purchased approximately 29% and 23%, respectively, of our aluminum from two major suppliers. Unlike our major competitors, we are not an integrated producer of aluminum. Accordingly, our ability to produce competitively priced aluminum products depends on our ability to procure a competitively priced supply of scrap and prime aluminum in a timely manner. We expect that a significant amount of our scrap aluminum supply requirements will continue to be sourced through scrap purchase arrangements with our customers and acquisitions of scrap aluminum from Wise Recycling and third party suppliers. We obtain prime aluminum from brokers throughout the United States and directly from foreign and domestic producers. While we believe that these sources of raw materials are sufficient to meet our current operating requirements, we cannot assure you that we will be able to timely procure competitively priced aluminum or that we will not experience shortages due to the interruption of supply. In addition, if Alcoa or Novelis significantly increase their purchases of scrap aluminum, we may experience difficulty in obtaining our raw materials at the price discount that scrap has had traditionally over prime aluminum. Furthermore, the price of scrap aluminum may rise if foreign demand for scrap aluminum increases. The recent trend of increased copper and steel scrap consumption by China and other foreign countries could extend to aluminum scrap.

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We may not be able to effectively manage our exposure to fluctuations in aluminum prices.

Aluminum purchases and related alloying agents represented approximately 70% of our cost of sales in 2004. Prime aluminum costs fluctuate over time. We reduce our exposure to aluminum price fluctuations by seeking to pass cost increases to customers through an indexed sales pricing mechanism, by keeping sufficient inventory on hand and/or by fixing the cost of metal through forward contracts on the London Metal Exchange, or LME, based on the cost of prime aluminum. Not all increases in aluminum prices can be passed to customers, however, as our sales contracts typically provide that our customers are responsible only for price increases up to a fixed price, and our contracts are generally priced based upon a fixed six-month trailing aluminum price average. As a result, we seek to reduce our exposure to any possible increases in aluminum prices over the contracted price by purchasing or committing to purchase aluminum at relative fixed prices for a matching six-month period. We seek to protect ourselves against price fluctuations in prime aluminum contracts both by purchasing and selling futures contracts and through the use of options contracts to effectively match our customer and supplier commitments. These hedging transactions may require us to post cash pursuant to margin calls. However, there can be no assurance that we will be successful in our efforts to use these types of derivative transactions to help manage fluctuations in prime aluminum prices, in part because our customers do not commit to buy set amounts of aluminum in any six month period. It is therefore impossible to know the precise date on which we will need to acquire an amount of aluminum under such period. Furthermore, our can stock contracts may provide for a ceiling on the metal transfer price. Should a resulting six-month market price of aluminum average over this ceiling, we may be unable to pass the additional cost on to our customers. As aluminum prices rise, including a 22% rise in 2004 following a 12% rise in 2003, this risk of the ceiling exposure and related costs greatly increases. For the second and third quarter periods of 2005, the metal price will exceed the ceiling. In addition, we are further exposed to counter-party performance risk in adverse market conditions in the event of non-performance by a supplier, customer or LME broker and could suffer significant financial losses as a result.

Our processing-based business model seeks to take advantage of the lower price of scrap aluminum compared to prime aluminum to provide a cost-competitive product. To the extent the discount between the LME’s quoted primary aluminum price and scrap price narrows, our competitive advantage is reduced. We cannot make use of financial markets to effectively hedge against reductions in this discount as this market is not readily available. If the difference between the price of prime and scrap aluminum is narrow for a considerable period of time, or, if we are unable to successfully manage the risks associated with fluctuations in the price of prime aluminum, our profitability could decline. Hedging transactions may require us to post cash pursuant to margin calls. Significant losses could occur if we entered into a hedge transaction that became unprofitable because a significant customer reduced orders.

Our operations are energy and our raw materials are commodity intensive and, as a result, our profitability may decline if energy and/or commodity costs increase, or if these supplies are interrupted.

We consume substantial amounts of energy in our operations. Energy costs constituted approximately 6% of our overall cost of sales in 2004. Although we generally expect to meet our energy requirements from our long-term natural gas and electricity contracts, we could be adversely affected by increases in the costs in natural gas and/or electricity, interruptions in energy supply due to equipment failure or other causes and our inability to extend the contracts upon expiration on economical terms. We buy natural gas on a forward basis to minimize risk of rising prices, but we may not always be able to do so successfully. Except to the extent we are able to protect ourselves against fluctuations in gas prices, every $1.00 change per mmBTU in the price of gas would affect our annual net income by $4.8 million based on our 2004 usage levels. In addition, an outbreak or escalation of hostilities between the United States and any foreign power and, in particular, a prolonged armed conflict in the Middle East, could result in a real or perceived shortage of oil and/or natural gas, which could result in an increase in the cost of natural gas or energy generally. If energy costs were to rise, or if energy supplies or supply arrangements were disturbed, our profitability may decline.

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In addition, our operations generally require an uninterrupted supply of intense electrical energy, and any interruption for more than a very short duration, whatever the cause, may have a major technical, commercial and financial impact on our business operations. In warm weather, the Tennessee Valley Authority, or TVA, our electrical energy source for the Listerhill facility, is vulnerable to surges in demand for energy. These increases in demand may outstrip the available energy supply and lead to a curtailment. In 1999, we experienced this type of curtailment for approximately five days.

Outside of aluminum, our operations require substantial materials and supplies, many of which are subject to cost increases due to increasing commodity costs used in the production of these supplies and materials. These materials account for approximately 8% of cost of sales. In addition, metal costs include costs for non-aluminum hardeners and alloying agents such as magnesium and manganese. These materials comprise approximately 3% of metal costs and are subject to volatile commodity pricing and resulting cost increases. The price increases that we are able to achieve from our customers may not be sufficient to offset the effects of these rising input costs.

A business interruption at our Listerhill facility could significantly harm our operations.

Our beverage can stock production is concentrated entirely at our Listerhill facility. We depend on the equipment and facilities at Listerhill for the production of our beverage can stock and other aluminum sheet products. If our equipment or operations at Listerhill or portions thereof were disabled, our ability to manufacture beverage can stock products could be impaired or interrupted for an indefinite period or could cease altogether and cause a material adverse effect on our financial condition. For example, in 2003 a fire at the facility curtailed our operations for four weeks and caused delivery problems for three months. Business interruption insurance proceeds may not fully compensate us for damage to our equipment and facilities, lost profits and lost market share. We currently also have property casualty insurance for our Listerhill facility. However, the policy is subject to exclusions.

The beverage can stock industry is highly concentrated and our competitors have greater resources.

The market for beverage can stock products is highly concentrated. Competitors such as Novelis and Alcoa, each with an approximate one-third market share, have market presence, operating capabilities and financial, personnel and other resources that are substantially greater than our own. Alcoa is a fully integrated competitor who supplies its own prime aluminum for use in producing beverage can stock. Novelis has metal supply contracts with its former parent company, Alcan. They may also affect prices for scrap aluminum by making purchases of scrap aluminum. These competitors can develop their technologies more quickly, take advantage of acquisition and other opportunities more readily, produce their own supply of aluminum and devote greater resources to the marketing and sale of their products and services than we can. They may be able to purchase raw materials at a lower cost because of their size. Finally, the financial resources and excess capacity of our major competitors may give them the ability to reduce their prices for an extended period of time. Any of these factors may reduce the prices we can charge for our products, lower our gross margins and cause us to lose market share. We cannot assure you that we will be able to compete successfully in these circumstances.

We are subject to competition from non-aluminum sources of packaging.

Although aluminum maintains the largest overall share among packaging materials of the U.S. beverage container industry, it faces increasing competition from other packaging materials such as plastics and glass. We face continued competition from plastic packaging producers (primarily high density polyethylene, or HDPE, and polyethylene terephthalate, or PET) in the soft drink and juice segment of the beverage packaging industry. PET increased its market share of the U.S. beverage container market from an approximate 19% market share, as measured by number of containers, in 1997 to an approximate 26% market share in 2002. Some manufacturers and consumers prefer PET to aluminum because of its clarity, availability in multiple sizes and ability to be resealed. In addition, glass accounted for approximately 13% of beverage container demand in 2002. If plastic and/or glass and/or other new products increase their respective market shares, demand for our products may decrease significantly. For the year ended

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December 31, 2004, 83% of our sales volume was from beverage can stock and we expect to derive a significant portion of our revenues from these sales in the future. If demand for these products decreased, our profits and cash flows could be reduced.

Demand in the packaging market in which we participate can be inconsistent.

We primarily manufacture aluminum can stock that is used for beverage and, to a lesser extent, food packaging for which demand may be inconsistent. For example, it is believed that the unseasonably cold and wet weather in the summer of 2003 decreased consumer demand in the U.S. and Canada for beverages packaged in the containers produced by our customers. As a result, our sales to Ball and Crown declined in 2003. Our operating results could be adversely affected if the packaging market experiences weakness because of weather or general economic conditions or other factors.

We cannot guarantee that we will be successful in developing new products or entering new markets.

We have begun the development of higher value-added and intermediate products that complement our aluminum beverage can stock production. For example, we also process aluminum sheets for use in food containers, trailer roofing and air conditioner and refrigerator components. In 2001, we developed high-luster heavier gauge embossed sheet and end plate for sale in the automotive after market. In addition, we have begun to supply intermediate aluminum products to other industry participants. Intermediate aluminum products are products that we sell to customers before they have undergone final processing. We cannot assure you that we will be successful in further developing these products and in entering into new markets. We may experience design, manufacturing, marketing or other difficulties that could delay or prevent the development, introduction or commercialization of any new products. Development of these products and entry into new markets may require greater capital resources than we currently anticipate. We cannot guarantee when or whether these new products will be widely introduced or fully implemented, that they will be successful when they are introduced or that customers will purchase the products offered. If these products or services are not successful or the costs associated with implementation and completion of the rollout of these products or services materially exceed those currently estimated by us, our results of operations may suffer.

Environmental requirements could adversely affect our financial condition and our ability to conduct our business.

Our operations are subject to numerous and increasingly stringent federal, state and local laws and regulations governing protection of the environment, including those relating to air emissions, wastewater and stormwater discharges, the handling, disposal and remediation of hazardous substances and wastes, and public and employee health and safety. Our operations involve the management of hazardous materials and the use of aboveground and underground storage tanks containing materials that are subject to requirements of the federal Resource Conservation and Recovery Act, or RCRA, and comparable state statutes. Under such statutes, investigation or remediation may be necessary in the event of leaks or other discharges from current or former underground or aboveground storage tanks or other sources. Our operations involving air emissions and wastewater and stormwater discharges are subject to the Clean Air Act and Clean Water Act, respectively. Similar to many of our competitors, we have incurred and will continue to incur capital and operating expenditures and other costs in complying with such laws and regulations. Our operations also involve the risk of the release of hazardous materials into the environment. In addition, we send material to third party recycling, treatment, and/or disposal facilities. The Comprehensive Environmental Response, Compensation, and Liability Act of 1980 and comparable state statutes can impose strict, and under some circumstances joint and several, liability upon entities that send materials to third party facilities for investigation and remediation of contamination, as well as upon the owners and operators of sites at which soil or groundwater contamination is identified. We have not received any notice of such potential liability at any such facilities. Future environmental regulations, including those under the Clean Air Act and Clean Water Act, or more aggressive enforcement of existing regulations, may result in stricter compliance requirements for us and for the aluminum industry in general.

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In connection with our acquisition of the Listerhill facility in 1999, a consultant performed a soil and groundwater investigation (“Phase II Report”) to identify any environmental issues at the various plants that comprise the Listerhill facility. That Phase II Report identified certain on-site environmental areas of concern that may potentially require investigation or remediation and provided a then-present value estimate of approximately $18 million to address them. Pursuant to the Listerhill facility purchase agreement, the prior owner of the Listerhill facility, Reynolds, now Alcoa, is required to perform the work necessary and to indemnify us against the environmental matters required by applicable law to be addressed and identified in the Phase II Report and any other such environmental liabilities attributable to Reynolds that were identified on or before March 31, 2004, subject to certain limitations. Alcoa disagrees with the cost estimates contained in the Phase II Report and has stated that it estimates that the environmental issues identified in the Phase II Report will cost less than $18 million to remediate. Although Alcoa has conducted some on-site environmental investigations and sampling and has submitted reports to the Alabama Department of Environmental Management (ADEM) regarding most of the on-site areas of concern, it has not yet commenced cleanup activities with respect to many of the areas of concern.

Wise has not discovered any new environmental concerns. As noted all significant environmental issues have been identified and remain the responsibilities of Alcoa under the original Asset Purchase Agreement. Alcoa has acknowledged its obligation and discussions continue regarding the methodology to remediate these concerns.

However, there can be no assurance that Alcoa will be willing to perform its indemnification obligations regarding the Listerhill facility or that costs to do so will not exceed $18 million. Any failure by Alcoa to address completely such issues could materially affect our financial condition and our ability to conduct our business. Furthermore, there can be no assurance that environmental conditions requiring remediation will not be discovered in the future which are not addressed by Alcoa and could result in material costs to us. See “Business—Environmental Matters.”

We have a unionized workforce, and union disputes and other employee relations issues could harm our financial results.

All of our hourly-paid employees are represented by labor unions under eight collective bargaining agreements. We may not be able to satisfactorily renegotiate our labor agreements when they expire on November 1, 2007. In addition, although we consider our employee relations generally to be good, our existing labor agreements may not prevent a strike or work stoppage at our facility in the future, and any such prolonged work stoppage could have a material adverse effect on our financial condition and results of operations. See “Business—Employees.”

Our success will continue to depend on our ability to attract and retain executives and other key personnel.

Our continued success depends on our ability to attract, motivate and retain highly skilled and qualified management and technical personnel. Any inability to do so could hurt our business. In addition, there can be no assurance that we will be able to hire qualified persons when needed or on favorable terms. In addition, the loss of any one or more of our executive officers could have an adverse effect on our ability to manage and operate our business. We do not have employment agreements with any of our executive officers except Randall Powers, our President and Chief Operating Officer, John Cameron, our Vice Chairman, and Gerald David, the Executive in Charge of Business Development/Metals Management. See “Management.”

We are controlled by a limited number of persons.

As of December 31, 2004, Silver Knot, LLC, owns approximately 79% of the membership interests of Wise Group. David D’Addario, CEO, Chairman and a Manager of Wise Group, controls Silver Knot and Greg Garvey, a Manager of Wise Group is also a member of Silver Knot. The board of Wise Group contains no independent managers. Mr. D’Addario and Mr. Garvey have the ability to effect certain

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corporate transactions, including mergers, consolidations and the sale of all or substantially all of Wise Group’s assets.

We may expand our operations through acquisitions, which may divert management’s attention and expose us to unanticipated liabilities and costs. We may experience difficulties integrating any acquired operations, and we may incur costs relating to acquisitions that are never consummated.

Our business strategy contemplates continued expansion of our operations, including growth through future acquisitions. However, our ability to consummate and integrate effectively any future acquisitions on terms that are favorable to us may be limited by the number of attractive acquisition targets, internal demands on our resources and our ability to obtain financing. Our success in integrating newly acquired businesses will depend upon our ability to retain key personnel, avoid diversion of management’s attention from operational matters, and integrate general and administrative services and key information processing systems. In addition, future acquisitions could result in the incurrence of additional indebtedness, costs and contingent liabilities. We may also incur costs and divert management attention to acquisitions that are never consummated. Integration of acquired operations may also take longer, or be more costly or disruptive to our business, than originally anticipated. It is also possible that expected synergies from future acquisitions may not materialize.

Although we will undertake a comprehensive due diligence investigation of each business that we might acquire, there may be liabilities of the acquired companies that we fail or are unable to discover during the diligence investigation and for which we, as a successor owner, may be responsible. In connection with acquisitions, we generally seek to minimize the impact of these types of potential liabilities through indemnities and warranties from the seller, which may in some instances be supported by deferring payment of a portion of the purchase price. However, these indemnities and warranties, if obtained, may not fully cover the liabilities due to limitations in scope, amount or duration, financial limitations of the indemnitor or warrantor or other reasons.

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Our Listerhill manufacturing operations are located in Muscle Shoals, Alabama and comprise approximately 1,500 acres, of which approximately 102 acres are leased. Our corporate headquarters are located in Linthicum, Maryland. Recycling currently operates shipping centers in the locations listed below.

The following table presents certain information regarding our owned and leased facilities as of December 31, 2004:

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We are a defendant from time to time in various legal actions arising in the normal course of business, the outcomes of which, in the opinion of management, neither individually nor in the aggregate are likely to result in a material adverse effect on our business, results of operations or financial condition.

We are defendants in an action brought by Merrill Lynch, Pierce, Fenner & Smith Incorporated pending in the New York Supreme Court, County of New York. In this action, Merrill Lynch seeks $931,893 for out-of-pocket costs and expenses allegedly incurred pursuant to a letter agreement between Wise Metals and Merrill Lynch dated January 31, 2002, in which Merrill Lynch alleges that Wise Metals agreed to reimburse Merrill Lynch for such costs and expenses. Wise Metals has hired counsel and intends to vigorously contest this law suit and believes it has meritorious defenses. Wise Metals has filed an answer to the complaint denying the material allegations and alleging several affirmative defenses and counterclaims which exceed in amount the sum sought by Merrill Lynch. Merrill Lynch moved to dismiss the Wise Metals’ counterclaims and by an order dated December 30, 2004, the Court granted this motion, dismissed the counterclaims and permitted Wise Metals to replead two of the counterclaims for breach of the implied covenant of good faith and fair dealing and for breach of fiduciary duty. Wise Metals has served an amended answer repleading these two counterclaims and has also filed a notice of appeal from the order dismissing the originally pleaded counterclaims. The time of Merrill Lynch to respond to the repleaded counterclaims has not yet expired. The action is proceeding and is presently in the discovery stages.

We are defendants in an action brought by a former executive pending in Alabama State Court. In this action, the plaintiff is suing to enforce an alleged settlement contract with Wise. The plaintiff alleges that a deal had been negotiated whereby in exchange for $2 million he would surrender his equity interests in Wise, forgo any claim for a $1 million severance that would otherwise come due on his 62nd birthday (payable in $50,000 quarterly installments), and provide a general release. Wise Metals has hired counsel and intends to vigorously contest this law suit and believes it has meritorious defenses.

No matters were submitted to a vote of security holders in the fourth quarter of 2004.

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Part II

There is no publicly traded market for our common equity.

The following table sets forth our selected historical and other financial data for each of the five years in the period ended December 31. Until June 30, 2003, we accounted for our 50% membership interest in Wise Recycling using the equity method. With the acquisition of the remaining 50% membership interest, Wise Recycling has been included in our statement of operations data from July 1, 2003. You should read the following selected historical financial and other information in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the notes thereto included elsewhere in this Form 10-K.

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Overview

We are the third largest producer of aluminum beverage can stock in the world and one of the largest aluminum scrap recyclers in the United States. Beverage can stock is aluminum sheet specifically designed and engineered for the production of aluminum beverage cans. We supplied an estimated 15% of the North American market in 2004 for aluminum beverage can stock as measured by volume and own one of only five beverage can stock facilities in North America, providing valuable capacity to meet volume demands in a consolidated industry. Our customers include Ball, Crown and Rexam. Our beverage can stock customers produce aluminum cans for the largest brewers and carbonated soft drink bottlers in North America. In addition, we produce food container stock and semi-fabricated aluminum sheet for transportation and other markets. Our recycling operation, Wise Recycling, provides aluminum feedstock for our aluminum sheet production as well as collection of scrap for sale in the merchant market.

Unlike our principal competitors, we do not manufacture aluminum from bauxite. Instead, we process aluminum scrap and prime aluminum manufactured by third parties. As a result, we do not have the capital requirements and high fixed costs associated with the production of prime aluminum. Aluminum purchases comprised approximately 70% of our cost of sales in 2004. Historically, prices of our aluminum can stock and other products have been directly correlated to the prices of our metal material cost due to the standard industry practice of passing through the metal material costs to customers. This correlation has allowed us to maintain a relatively consistent conversion revenue, defined as net revenue less material costs, on a per pound basis.

Our can stock production takes place at our Listerhill facility in Muscle Shoals, Alabama. We purchased this facility from Reynolds in January 1999. At our Listerhill facility, we convert used beverage cans, other forms of scrap aluminum and primary ingot into high quality aluminum sheet, or can stock, that is used by our customers to produce beverage and food cans and other aluminum sheet products. There are five primary steps in the production process: (i) melting the raw material; (ii) casting an ingot; (iii) hot rolling the ingot and reducing its gauge to a 0.10 inch thickness; (iv) further reducing the thickness to customer specified gauges on our cold mills and (v) finishing the can stock with a coating. Our cast house and hot mill have annual capacity in excess of 1.8 and 1.4 billion pounds, respectively, while our cold mills and finishing capacity is limited to approximately 1.1 billion pounds.

We generally warehouse finished can stock at 11 locations which are strategically situated in close proximity to many of the approximately 25 customer plant locations that we serve. Our customer plant locations require daily shipments by either rail or truck to replenish warehouse inventory.

In 2004, approximately 60% and 25% of our total revenues were derived from sales to Ball and Crown, respectively. Our Listerhill facility has been a supplier to selected Ball manufacturing facilities since 1965, and we are the largest supplier of beverage can stock to Ball. Ball and Crown have contracted to purchase aluminum beverage can stock from us until the end of 2007 and 2008, respectively. We began to ship can stock to Rexam in 2004 and started trial shipments to a fourth major beverage can manufacturer.

Our historic beverage can stock shipments have been fairly consistent since our purchase of our Listerhill facility in 1999, as the beverage can market and competitive market share positions have been relatively constant over that period.

We recognize revenue at the later of the date of shipment, or upon transfer of title. The majority of our inventory is accounted for on a last-in, first-out basis. We have elected not to designate any of our derivative instruments as hedges under SFAS No. 133. All of our derivatives have been recorded at fair value on our balance sheets in 2003 and 2004.

Metal, labor, natural gas, electricity and plant maintenance costs represent the primary components of our cost of sales. In 2004, scrap aluminum represented approximately 75% of our metal input. In 2004, aluminum represented approximately 70% of our cost of sales. Purchases of scrap aluminum from Recycling and our customers made up 35% of total scrap used, with the balance coming from purchases in

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the open market. The scrap purchase arrangements with our key customers through which we purchase scrap aluminum generated in their can production processes provided us with approximately 27% of our scrap aluminum requirements, in 2004. In 2004, scrap aluminum purchases from Recycling represented 8% of our purchases of scrap aluminum. Recycling presently operates seven area centers with 18 service centers and 20 convenience centers associated with the area centers. Recycling would have been profitable as a stand alone entity in 2004. A new area center opened in Los Angeles in May 2004. Recycling continues to identify potential locations where there is a sufficient industrial base to provide scrap to the plant and operate profitably on an independent basis. Recycling also sells copper and other non-ferrous scrap to unaffiliated third party buyers.

The primary aluminum alloys utilized in our business are readily available and are purchased from both foreign and domestic sources.

We purchase natural gas from a local pipeline, Enbridge, and purchase electricity from the TVA, which provides for firm power at fixed prices and variable power at market prices.

Shipping and handling costs amounted to $16.9 million, $17.5 million and $25.5 million for the years ended December 31, 2002, 2003 and 2004, respectively, and are recorded as a reduction of sales in the statements of operations. Shipping costs increased as a result of increased shipment volumes from 598.8 million pounds in 2002 to 605.2 million pounds (including Wise Recycling) in 2003 and to 736.1 million pounds in 2004.

Selling, general and administrative expenses consist primarily of employment and various administrative expenses. Employment costs comprised approximately 42% of selling, general and administrative expenses in 2004. Eleven unions represent our hourly workers under eight collective bargaining agreements. On January 7, 2003, we entered into new agreements with our unions which provide for significantly more flexible work rule arrangements than our prior labor agreements. The current labor agreements are in effect through November 1, 2007.

Wise Metals Group LLC and its subsidiaries are taxed as partnerships under Subchapter K of the Internal Revenue Code. Therefore, the results of the Company’s operations are included in the taxable income of the individual shareholders. As a result, no provision for federal income taxes has been included in the consolidated financial statements.

At a minimum, the Company intends to make cash distributions to its shareholders in the amount necessary for its shareholders to pay their individual taxes associated with the Company’s taxable income.

Operating Results

Conversion Revenue and Conversion Margin

There are two components to our pricing under industry standards for can sheet pricing (which accounted for 93% of our Listerhill facility’s output in 2004). The first component is the market price for aluminum that we can pass on to our customers, subject to an industry-wide ceiling price. Under this industry formula, the metal transfer price is changed twice annually, specifically on April 1 and again on October 1. The metal transfer price for the period April 1 through September 30 is determined based on the average published Midwest P1020 aluminum price for the immediately prior six month period ended the last day of February. Likewise, the metal transfer price for the period October 1 through the following March 31 is determined based on the average published Midwest P1020 aluminum price for the immediately prior six month period ended the last day of August. We reduce our exposure to aluminum price fluctuations by passing cost increases to customers through an indexed sales pricing mechanism and by fixing the cost of metal through forward contracts on the LME. Although the spread differential between prime metal and scrap cannot be cost effectively hedged in the financial markets, we minimize market price risk with respect to scrap aluminum we receive from our customers and reprocess at a fixed conversion spread.

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The second component is a fixed conversion, or value added, price. The fixed conversion price is calculated annually using Alcoa’s list price as a basis and is the most significant factor influencing our profitability. Conversion pricing under the supply agreement is subject to renegotiation each year as well as at such times that our major competitors change their published conversion prices. Because of the importance of the conversion price to our operating results, we measure conversion margin to evaluate our performance. Conversion margin is determined as conversion revenue (sales less metal cost and the effect of LIFO) less conversion cost (cost of sales less metal costs). Below is a reconciliation of these non-GAAP financial measures to their related GAAP basis measures.

We announced our intention to raise prices by five percent on conversion, effective April 1, 2005, and to move away from the ceiling on metal transfer pricing on October 1, 2005. For the second and third quarters of 2005 the metal transfer price will be above the ceiling. Under current agreements, our customers may not pay us a metal transfer price above the ceiling. Because the company uses large amounts of scrap, which has a lower price than prime aluminum, and because of potential future volatility of aluminum prices, the effect of the ceiling on our operating results cannot be predicted. We are continuing discussions with our customers to implement these changes.

Year ended December 31, 2004 compared to year ended December 31, 2003

Sales. Our sales increased from $619.1 million in 2003 to $766.9 million in 2004, an increase of $147.8 million, or 24%. Total volumes shipped increased from 605 million pounds in 2003 to 736 million in 2004, an increase of 131 million pounds, or 22%. On June 30, 2003 the remaining 50% ownership of Wise Recycling was acquired, which contributed 48 million pounds to this increase. The increase was also the result of an 83 million pound increase at Alloys, including an approximate 10.8% increase in annual can sheet shipments, the primary product sold by Alloys. The increase in shipments at Alloys was primarily the result of a return to normal demand for beverage cans as opposed to lower shipments in 2003 due to an unseasonably cool and wet summer throughout much of the United States and Canada, which decreased demand through out the North American industry. Sales at Recycling are primarily in copper and other non-ferrous scrap and are made at lower prices than the semi-fabricated products such as can sheet sold by Alloys.

Cost of Sales. Cost of sales increased from $601.7 million in 2003 to $770.5 an increase of $168.8 million or 28%. Metal costs, accounted for on the last-in-first-out (LIFO) basis and representing 66.7% and 71.4% of cost of sales in 2003 and 2004, respectively, increased from $401.2 million in 2003 to $550.1 million in 2004, an increase of $148.9 million or 37%. Gross margin (deficit) decreased from $17.4 million margin in 2003 to a deficit of $3.7 million in 2004. Contributing to this decrease is the impact of higher metal costs accounted for on LIFO for which the reserve was increased by $35.2 million in 2004. Conversion costs, which exclude metal, but include employment, energy, materials and other increased from $200.4 million in 2003 to $220.5 million in 2004, an increase of $20.1 million or 10.0%. Conversion costs as a percentage of conversion revenue decreased from 88.0% in 2003 to 87.5% in 2004, a

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decrease of 0.5%. Resulting conversion margin increased from $27.3 million to $31.5 million, an increase of $4.2 million or 15%. The majority of the increase in conversion margin resulted from an increase in productivity as measured by packed pounds per man hour, including the effect of overall increased volumes. While total pounds billed at Alloys increased from 570 million pounds in 2003 to 653 million pounds in 2004, an increase of 14.6%, total man hours at Alloys actually decreased by 7.9%. This resulted in a 15.7% increase in average packed pounds per man hour. As a percentage of conversion revenue, employment decreased from 31.4% in 2003 to 31.1% in 2004.

Selling, General and Administrative. Selling, general and administrative expenses increased from $9.2 million in 2003 to $12.0 million in 2004, an increase of $2.8 million or 30%. Contributing to this increase was an additional $0.6 million from now consolidating a full year of results from the June 30, 2003 acquisition of Recycling, additional legal and accounting fees of $0.9 million and $0.9 million from including a full year of expenses resulting from a shift of executives to corporate in late 2003. These executive costs were previously included in costs of sales but were shifted to SG&A as these key employees from Wise Alloys took on roles more focused with the strategic direction of the company including product development and operations integration of multiple facilities including Wise Recycling, Listerhill Total Maintenance and our coating operations in Toledo.

Early Extinguishment of Debt. Effective May 5, 2004, we issued $150 million of 10.25% senior secured notes due 2012. Use of these proceeds included an early extinguishment of the subordinated 15% notes for which a prepayment penalty of $3.5 million was paid and is included as other expense in the Company’s second quarter consolidated statement of operations. As part of the refinancing, approximately $4.0 million of deferred financing costs were written off through accelerated amortization of deferred financing fees and is also included as other expense. Accordingly, total early extinguishment of debt was $7.5 million.

Interest Expense and Fees. Interest expense, including regular amortization of deferred financing costs, increased from $14.4 million in 2003 to $17.9 million in 2004, an increase of $3.5 million, or 24%, primarily as a result of issuing the $150 million of 10.25% senior secured notes which occurred on May 5, 2004. Non-cash amortization of deferred financing costs for the year ended December 31, 2004 and included in interest expense and fees was $0.9 million.

Mark-to-Market for Contracts under SFAS No. 133. This loss represents the non-cash loss we recognized pursuant to SFAS No. 133. The unrealized losses were as a result of forward contracts entered into to hedge the cost of natural gas and aluminum. The fair value at December 31, 2004 for natural gas and aluminum derivatives were ($0.7) million and $4.7 million, respectively. In 2003, we recognized an unrealized loss of $550 versus income of $8.2 million in 2003.

Year ended December 31, 2003 compared to year ended December 31, 2002

Sales. Our sales declined from $628.3 million in 2002 to $619.1 million in 2003, a decrease of $9.2 million, or 1.5%. Total volumes shipped, however, increased from 599 million pounds in 2002 to 605 million in 2003. The June 30, 2003 acquisition of 50% of Wise Recycling contributed 35 million pounds to this increase. This increase was offset by a 29 million pound decrease at Alloys, representing an approximately 4.8% decrease in annual can stock shipments. The decrease in shipments at Alloys was primarily the result of lower can stock shipments due to the unseasonably cool and wet summer in 2003 throughout much of the United States and Canada, which decreased demand through out the industry. Sales at Recycling are primarily in copper and other non-ferrous scrap and are made at lower prices than the semi-fabricated products such as can sheet sold by Alloys.

Cost of Sales. Cost of sales increased from $593.0 million in 2002 to $601.7 million in 2003, an increase of $8.7 million or 1.5%. Metal costs, accounted for on the last-in-first-out (LIFO) basis and representing 66.5% and 66.7% of cost of sales in 2002 and 2003, respectively, increased from $394.1 million in 2002 to $401.2 million in 2003, an increase of $7.1 million or 1.8%. Conversion costs, which exclude metal, but include employment, energy, materials and other increased from $199.0 million in 2002 to $200.4 million in 2003, an increase of $1.4 million or 0.7%. Conversion costs as a percentage of

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conversion revenue increased from 86.4% in 2002 to 88.0% in 2003, an increase of 1.6%. Resulting conversion margin decreased from $31.5 million to $27.3 million, a decrease of $4.2 million or 13.3%. The majority of the decrease in conversion margin resulted from an increase in the price we paid for natural gas. The average price per mmBTU paid increased from $4.58 in 2002 to $5.11 in 2003, contributing to a $2.4 million or 7.6% decrease in conversion margin. Over the past 10 years, natural gas has averaged approximately $2.97 per mmBTU. Based on 2003 natural gas usage of 4.5 million mmBTU and a price paid of $5.11 per mmBTU, 2003 natural gas costs were $9.9 million, or 72.1%, higher than the ten-year historical average. As a percentage of conversion revenue, decreases in materials of 2.2% were offset by increases in employment and other costs of 4.0%.

Selling, General and Administrative. Selling, general and administrative expenses increased from $6.8 million in 2002 to $9.2 million in 2003, an increase of $2.4 million or 36%. Contributing to this increase was an additional $0.5 million from consolidating six months of results from the June 30, 2003 acquisition of Recycling, additional legal and accounting fees of $0.5 million and $0.9 million from a shift of key executives to corporate in late 2003. These executive costs were previously included in costs of sales but were shifted to SG&A as these key employees from Wise Alloys took on roles more focused with the strategic direction of the company including product development and operations integration of multiple facilities including Wise Recycling, Listerhill Total Maintenance and our coating operations in Toledo.

Interest Expense and Fees. Interest expense, including the amortization of deferred financing costs, increased from $11.1 million in 2002 to $14.4 million in 2003, an increase of $3.3 million, or 30%, primarily as a result of the refinancing which occurred in September 2002. Non-cash amortization of deferred financing costs increased by $1.3 million from $0.8 million in 2002 to $2.1 million in 2003. As part of the refinancing, we sold $35 million of secured subordinated notes which bear interest at 15% per annum, of which 2% is paid-in-kind, which increased interest expense by approximately $2.3 million from 2002 to 2003.

Mark-to-Market for Contracts under SFAS No. 133. This income represents the non-cash gain we recognized pursuant to SFAS No. 133. The unrealized gains were as a result of forward contracts entered into to fix interest rates and to hedge the cost of natural gas and aluminum. The fair value at December 31, 2003 for natural gas and aluminum derivatives were $1.0 million and $2.8 million, respectively. The fair value of the interest rate cap was nominal. In 2003, we recognized a loss of $8.2 million versus income of $12.7 million in 2002.

Liquidity and Capital Resources

Our principal source of cash to fund liquidity needs is net cash provided by operating activities and availability under the revolving portion of our senior secured facility. We anticipate that our primary liquidity needs will be for debt service, working capital, capital expenditures and distributions for tax purposes. Our debt service costs increased as a result of the offering of the senior secured notes. We believe that cash generated from operations and available borrowings under our senior secured credit facility, as amended and restated, in connection with the offering of the senior secured notes, will be sufficient to enable us to meet our liquidity requirements in the foreseeable future. However, our liquidity could be hampered if aluminum prices were to continue to substantially increase or if we incurred significant unexpected increases in necessary capital expenditures. Significant increases in volumes could also impact our liquidity. See “Risk Factors” for certain circumstances that could adversely affect our liquidity. In particular, a default under our senior secured credit facility or decreased sales or lower margins from our sales to Ball or Crown and other competitive factors could have a material adverse effect on our liquidity.

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Year ended December 31, 2004 compared to year ended December 31, 2003

Operating Activities. During the year ended December 31, 2004, net cash used in operating activities was $33.8 million as compared to $2.3 million in 2003. Fluctuations in cash used in and provided by operating activities are subject to changing working capital requirements especially for accounts receivable and inventories. For the year ended December 31, 2004, accounts receivable increased from $20.4 million at December 31, 2003 to $46.3 million at December 31, 2004, an increase of $25.9 million. This increase is a result of timing, a change in a significant customer’s payment terms, and the rising price of metal. The payments by our customers are made at periodic times during the week and month, not everyday, nor exactly in 30 days, so the balance in receivables can fluctuate significantly at the end of a quarter depending on the timing of receiving payments. One of our largest customers changed to paying on 30-day terms versus previously paying on 10-day terms. This change has resulted in receivable balances for this customer generally being $15 million higher than under the previous terms. As a result, the customer is no longer entitled to a concomitant early payment discount. The increase in working capital requirements affecting both accounts receivable and inventory were a result of higher aluminum prices which increased approximately 22% for the year, offset somewhat by a corresponding increase in accounts payable also a result of higher metal prices.

Investing Activities. In 2004, our capital expenditures were $12.3 million as compared to $10.1 million in 2003. These expenditures, which exclude recurring maintenance expenditures, are comprised of capital improvements principally related to machinery and equipment. We do not anticipate the need to make any major capital expenditures in the immediate future.

Financing Activities. Net cash provided by financing activities was $52.9 million in 2004 compared with $9.1 million in 2003. Net cash provided by financing activities was primarily from the proceeds of the senior secured note offering offset by repayments under our senior secured credit facility, the repayment of the subordinated secured notes, and the repurchase of members’ equity.

Effective November 10, 2004, we amended and restated our revolving credit facility to increase the revolver limit from $75 million to $125 million, subject to a borrowing base calculation and certain working capital eligibility requirements and limits. Proceeds of the revolver will be used primarily for increased working capital requirements due to higher shipment levels and increased metal prices.

Year ended December 31, 2003 compared to year ended December 31, 2002

Operating Activities. During the year ended December 31, 2003, net cash used in operating activities was $2.3 million as compared to $22.9 million in 2002. At both the end of 2002 and 2003 the company experienced a build-up in inventory. The increase at the end of 2002 was in anticipation of a work stoppage if new labor agreements were not consummated. As noted, new labor accords were agreed upon and the inventory levels were reduced in the first several months of 2003.

In late 2003, we were bidding on additional supply for a new customer. In order to insure delivery under the vendor managed inventory program effective immediately upon an anticipated acceptance of the proposal, inventories were built up by nearly 25 million pounds at a cost of approximately $35 million. Management utilizes a strategy of increasing production efficiencies which effectively reduces inventory levels.

Investing Activities. In 2003, our capital expenditures were $10.1 million. These expenditures, which exclude recurring maintenance expenditures, are comprised of capital improvements principally related to machinery and equipment. Additionally, we incur annual maintenance expenditures, which run through our statement of operations, of approximately $40.0 million. We do not anticipate the need to make any major capital expenditures in the immediate future.

Financing Activities. Net cash provided by financing activities was $9.1 million in 2003 compared with $40.5 million in 2002. Net cash provided by financing activities in 2003 and 2002 was related to the net borrowings under our revolving credit facility, amortization requirements of our term loan facility and

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payments of other long-term obligations, and was primarily required by the use of cash provided by operating activities and capital expenditures.

Cost of Aluminum. As a condition of sale for a substantial majority of our sales, our customers require us to enter into short and long-term fixed price commitments. Under these agreements, the pricing terms of the aluminum component can be based on “band” pricing where there is an upper and lower limit, a fixed price or an upper limit only. In addition, the price of the aluminum component can be set as much as six months prior to the actual sale date, leaving us exposed to the risk of fluctuating aluminum prices between the time the price on the order is determined and the time that the order is fulfilled.

Our aluminum commodity risk management policy is to hedge the aluminum price risk associated with these fixed price firm commitments. At December 31, 2004, these contracts, including options, covered approximately 28,450 metric tons with a fair value gain of approximately $4.7 million. A hypothetical 10% increase (or decrease) in aluminum prices from the December 31, 2004 level would result in a non-cash gain (or loss) of approximately $5.6 million related to these positions and would be reflected as a mark-to-market adjustment for SFAS No. 133, which will be offset by the unrecorded gain (or loss) associated with customer contracts.

Interest. As substantially all of our debt other than the senior secured notes was based on floating interest rates at December 31, 2003, our earnings were also affected by changes in interest rates due to the impact of those changes on interest expense. Our interest rate risk management policy is to limit the extent that a change to the interest rate can impact earnings and cash flows. To achieve this objective, we used interest rate collars through March 31, 2002, which effectively put a “cap” and a “floor” on the total amount of interest expense we could incur. Our interest rate collars expired on March 31, 2002. We then utilized an interest rate cap with a notional coverage amount of $50 million which effectively capped $50 million of our variable debt exposure to LIBOR increasing above 2.5%. This cap expired on December 31, 2003. We repaid a portion of the outstanding variable debt with the proceeds of the offering of the senior secured notes.

A hypothetical 100 basis points increase (or decrease) in interest rates from the December 31, 2004 levels would impact annual interest expense by approximately $1.0 million.

We do not enter into derivative contracts for speculative purposes.

Backlog of Customer Business

We maintain long-term supply agreements with our key customers in the aluminum can sheet market. Specifically, we have a long-term contract with Ball extending through 2007 and a long-term contract with Crown extending through 2008. At present, we have orders from Rexam and expect orders through at least the end of 2005. These customers represent three of the four largest aluminum can manufacturers both in the United States and globally. Metal Container, a captive subsidiary of Anheuser Busch, is the fourth of these major manufacturers that comprise substantially all of the United States market and a majority of the global aluminum can production market.

We believe the general terms of our customer contracts are standard for the industry. These contracts are supply arrangements whereby specific quantities and product pricing are negotiated and agreed to on an annual basis under the terms of the multi-year master supply agreement. While supply agreements are negotiated annually, the volumes have not varied significantly over the term of the supply agreements which generally extend three to five years. Furthermore, these volumes are not expected to vary significantly throughout the term of the multi-year master supply agreements. Lastly, in 2004, we have started trial shipments to a fourth major beverage can manufacturer.

Under the terms of our customer contracts, we use an industry standard for pricing the metal component of all aluminum can sheet sold. This standard is described above in “—Conversion Revenue and Conversion Margin.” Accordingly, at any given point of time, we effectively have seven months of delivery priced under the master contract, or approximately 350 million pounds, the exact specifications and delivery locations to be specified as described below.

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We receive orders from our customers that provide detailed specifications as to metal characteristics and specific plant location. Although all orders are placed pursuant to the contract, quantities and specifications will vary by plant and more specifically by production line within the plant. These orders are generally provided with a two to three month lead time. The majority of all orders, specifically can stock orders, that are processed by Alloys are made to a specific customer order. Due to seasonal considerations, the first quarter is generally the highest sales volume for Alloys.

Financing Arrangements

Effective May 5, 2004, we issued $150 million of 10.25% senior secured notes due 2012. In conjunction with issuing the notes, we, on the same date, amended and restated our secured credit facility reducing the revolving line of credit from $130 million to $75 million which on November 10, 2004 was amended and restated to increase the revolving line of credit to $125 million. The proceeds of the notes were used to primarily repay the $30 million term loan of which $20 million had been outstanding, to repay our subordinated notes of $36 million and to repurchase members’ equity of $14 million. The remaining proceeds were used to reduce the revolving line of credit and for working capital purposes.

The repayment of the subordinated 15% notes represented an early extinguishment for which a prepayment penalty of $3.5 million was paid and is included as other expense in the Company’s second quarter consolidated statement of operations. As part of the refinancing, approximately $4.0 million of deferred financing costs were written off through accelerated amortization of deferred financing fees and is also included as other expense. Accordingly, total early extinguishment of debt was approximately $7.5 million.

Total financing costs of approximately $8.2 million were incurred and were deducted from the $150 million gross proceeds and are included on the balance sheet as other long term assets.

As a result of amending and restating the secured credit facility, the interest rate on the revolving line of credit was reduced from a variable rate of prime plus a range of 0.75% to 1.50% or LIBOR plus a range of 2.75% to 3.50% to a variable rate of prime plus a range of 0% to 0.50% or LIBOR plus a range of 2.25% to 2.75%.

Quarterly Information

Our quarterly revenues tend to fluctuate period to period based in large part on changes in aluminum prices. These changes generally do not affect our cash flow because we seek to match our hedging positions to our contractually-obligated sales agreements. We also pass aluminum cost increases to customers through an indexed pricing mechanism and/or by fixing the cost of metal through forward contracts on the LME. Our net income may also fluctuate period to period because under hedge accounting we may have non-cash gains or losses related to future periods.

Critical Accounting Policies

We have prepared our financial statements in conformity with accounting principles generally accepted in the United States, and these statements necessarily include some amounts that are based on informed judgments and estimates of management. Our critical accounting policies are discussed in Note 2 of the notes to our financial statements. As discussed below, our financial position or results of operations may be materially affected when reported under different conditions or when using different assumptions in the application of such policies. In the event estimates or assumptions prove to be different from actual amounts, adjustments are made in subsequent periods to reflect more current information. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our financial statements.

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Inventory Valuation

Inventories are valued at lower of cost or market using the last-in, first-out (LIFO) method. We use the LIFO method since it better matches current costs with current sales prices in our results of operations. Certain items in inventory may be considered impaired, obsolete or excess, and as such, we may establish an allowance to reduce the carrying value of these items to their net realizable value. Based on certain assumptions and judgments made from the information available at that time, we determine the amounts in these inventory allowances. If these estimates and related assumptions or the market changes, we may be required to record additional reserves.

Derivative Accounting

We have entered into long-term agreements to supply beverage can stock to our largest customers. To reduce the risk of changing prices for purchases and sales of metal, including firm commitments under these supply agreements, as well as to manage volatile natural gas prices, we use commodity futures and option contracts.

Under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activity, we are required to recognize all derivative instruments as either assets or liabilities on the balance sheet at fair value. Derivatives that are not hedges must be adjusted to fair value through the statement of operations.

In determining the fair value of our aluminum futures and options contracts, our interest rate collar and our natural gas swaps, we use market quotes for contracts of similar maturities or management estimates in the absence of available market quotes. We adjust the market quotes for our aluminum derivative instruments for premiums or discounts for various product grades, locations and the closing times for various terminal markets. Differences in actual market prices from those estimated may cause us to make adjustments in future periods to reflect these differences.

Allowance for Doubtful Accounts

Our ability to collect outstanding receivables from our customers is critical to our operating performance and cash flows. Typically, our customer agreements require monthly payments, mitigating the risk of non-collection. We record an allowance for uncollectible accounts based on our ongoing monitoring of our customers’ credit and on the aging of the receivables. If the financial condition of our two largest customers, which accounted for 86% of our accounts receivable at December 31, 2004, were to deteriorate, resulting in an impairment of their ability to make payments, the recorded allowance for doubtful accounts may not be sufficient.

Contractual Obligations and Other Commitments

The following tables summarize our material contractual obligations as of December 31, 2004.

Payments due by period—December 31, 2004

(in thousands)

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See Item 7. Above.

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The following consolidated financial statements of the Company and its subsidiaries are included herein as indicated below:

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REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTANT FIRM ON CONSOLIDATED FINANCIAL STATEMENTS

Members

Wise Metals Group LLC

We have audited the accompanying consolidated balance sheets of Wise Metals Group LLC (the Company) as of December 31, 2004 and 2003, and the related consolidated statements of operations, members’ equity and cash flows for each of the three years in the period ended December 31, 2004. Our audit also included the financial statement schedule listed in the index at item 15(a). These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly we express no such opinion. An audit also 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.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Wise Metals Group LLC at December 31, 2004 and 2003, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2004, in conformity with accounting principles generally accepted in the United States. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/ Ernst & Young LLP

Baltimore, Maryland

February 25, 2005

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Wise Metals Group LLC

Consolidated Balance Sheets

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See accompanying notes.

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Wise Metals Group LLC

Consolidated Statements of Operations

See accompanying notes.

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Wise Metals Group LLC

Consolidated Statements of Members’ Equity