Financial Statements and Supplemental Schedules Amcast Industrial Corporation 401(k) Salary Deferral Plan for Bargaining Unit Employees - Plan 2 December 31, 2002 and 2001, and for the years then ended, with Independent Auditors' Report Amcast Industrial Corporation 401(k) Salary Deferral Plan for Bargaining Unit Employees - Plan 2 Financial Statements and Supplemental Schedules December 31, 2002 and 2001, and for the years then ended Table of Contents Independent Auditors' Report...................................................1 Audited Financial Statements Statement of Net Assets Available for Benefits.................................2 Statement of Changes in Net Assets Available for Benefits..................3 - 4 Notes to Financial Statements..............................................5 - 9 Supplemental Schedules Schedule H, Part IV, 4i - Schedule of Assets Held for Investment Purposes10 - 11 Schedule H, Part IV, 4j - Schedule of Reportable Transactions............12 - 13 Independent Auditors' Report Amcast Industrial Corporation 401(k) Salary Deferral Plan for Bargaining Unit Employees - Plan 2 We have audited the accompanying statement of net assets available for benefits of the Amcast Industrial Corporation 401(k) Salary Deferral Plan for Bargaining Unit Employees - Plan 2 as of December 31, 2002 and 2001, and the related statement of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe 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 net assets available for benefits of the Plan at December 31, 2002 and 2001, and the changes in its net assets available for benefits for the years then ended, in conformity with accounting principles generally accepted in the United States of America. Our audits were made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of assets held for investment purposes and reportable transactions as of and for the years ended December 31, 2002 and 2001 are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules have been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ Battelle & Battelle May 23, 2003 Dayton, Ohio 1 Amcast Industrial Corporation 401(k) Salary Deferral Plan for Bargaining Unit Employees - Plan 2 Statement of Net Assets Available for Benefits December 31 ---------------------------- 2002 2001 ------------- ------------- Assets Participant-directed investments, at fair value Shares of registered investment companies $ 2,524,835 $ 2,887,496 Common/collective trust fund 2,622,147 2,283,065 Amcast Industrial Corporation common stock 40,881 69,065 Loans to participants 393,281 409,454 ------------- ------------- 5,581,144 5,649,080 ------------- ------------- Receivables Interest income 574 671 Participant contributions 8,812 10,823 Employer contributions 199 247 ------------- ------------- 9,585 11,741 ------------- ------------- Net assets available for benefits $ 5,590,729 $ 5,660,821 ============= ============= The accompanying notes are an integral part of the financial statements. 2 Amcast Industrial Corporation 401(k) Salary Deferral Plan for Bargaining Unit Employees - Plan 2 Statement of Changes in Net Assets Available for Benefits For the year ended December 31, 2002 Fund Information ---------------------------------------------------------------------------------- Amcast T. Rowe T. Rowe T. Rowe T. Rowe T. Rowe Industrial Price Price Price Price Price Corporation Stable International New New Equity Common Value Stock Horizons Income Index 500 Stock Fund Fund Fund Fund Fund ------------- ------------ ------------- ----------- ------------ ------------ Additions Investment income Interest and dividends $ 369 $ 144,992 $ 918 $ 795 $ 6,133 $ 7,078 Net (depreciation) appreciation in fair value of investments (75,179) - (9,441) (27,919) 2,869 (104,553) Contributions Participant 21,123 239,459 14,161 23,605 36,630 67,242 Employer 14,173 - - - - - ------------- ------------ ------------- ----------- ------------ ------------ (39,514) 384,451 5,638 (3,519) 45,632 (30,233) Deductions Benefit payments (5,722) (170,706) (2,105) (2,610) (9,409) (7,389) Interfund transfers 16,945 124,516 137 (9,954) 1,956 (42,012) ------------- ------------ ------------- ----------- ------------ ------------ Net increase (decrease) (28,291) 338,261 3,670 (16,083) 38,179 (79,634) Net assets available for benefits, December 31, 2001 69,681 2,287,657 43,505 107,026 93,992 428,349 ------------- ------------ ------------- ----------- ------------ ------------ Net assets available for benefits, December 31, 2002 $ 41,390 $ 2,625,918 $ 47,175 $ 90,943 $ 132,171 $ 348,715 ============= ============ ============= =========== ============ ============ ------------------------------------------- T. Rowe T. Rowe Price Price Equity Capital Income Appreciation Participant Fund Fund Loans Total ------------ ------------- ------------ ------------- Additions Investment income Interest and dividends $ 76,156 $ 8,101 $ - $ 244,542 Net (depreciation) appreciation in fair value of investments (321,713) (7,408) - (543,344) Contributions Participant 159,583 51,251 - 613,054 Employer - - - 14,173 ------------ ------------- ------------ ------------- (85,974) 51,944 - 328,425 Deductions Benefit payments (166,381) (27,392) (6,803) (398,517) Interfund transfers (86,606) 4,388 (9,370) - ------------ ------------- ------------ ------------- Net increase (decrease) (338,961) 28,940 (16,173) (70,092) Net assets available for benefits, December 31, 2001 2,038,428 182,729 409,454 5,660,821 ------------ ------------- ------------ ------------- Net assets available for benefits, December 31, 2002 $ 1,699,467 $ 211,669 $ 393,281 $ 5,590,729 ============ ============= ============ ============= The accompanying notes are an integral part of the financial statements. 3 Amcast Industrial Corporation 401(k) Salary Deferral Plan for Bargaining Unit Employees - Plan 2 Statement of Changes in Net Assets Available for Benefits For the year ended December 31, 2001 Fund Information ------------------------------------------------------------------- Amcast T. Rowe T. Rowe T. Rowe T. Rowe Industrial Price Price Price Price Corporation Stable International New New Common Value Stock Horizons Income Stock Fund Fund Fund Fund ------------------------------------------------------------------- Additions Investment income Interest and dividends $ 1,415 $ 126,169 $ 1,241 $ 2,534 $ 4,288 Net (depreciation) appreciation in fair value of investments (51,767) - (11,116) (4,289) 1,283 Contributions Participant 19,724 245,850 15,528 24,379 36,740 Employer 10,816 - - - - ------------------------------------------------------------------- (19,812) 372,019 5,653 22,624 42,311 Deductions Benefit payments (11,816) (233,247) (2,948) (3,248) (8,677) Interfund transfers 8,613 114,547 (1,607) (27,225) 3,113 ------------------------------------------------------------------- Net increase (decrease) (23,015) 253,319 1,098 (7,849) 36,747 Net assets available for benefits, December 31, 2000 92,696 2,034,338 42,407 114,875 57,245 ------------------------------------------------------------------- Net assets available for benefits, December 31, 2001 $ 69,681 $ 2,287,657 $ 43,505 $ 107,026 $ 93,992 ==================================================================== ---------------------------------------------------- T. Rowe T. Rowe T. Rowe Price Price Price Equity Equity Capital Index 500 Income Appreciation Participant Fund Fund Fund Loans Total ------------------------------------------------------------------- Additions Investment income Interest and dividends $ 4,342 $ 116,007 $ 8,557 $ 35,257 $ 299,810 Net (depreciation) appreciation in fair value of investments (62,121) (83,138) 4,501 - (206,647) Contributions Participant 76,663 168,007 39,293 - 626,184 Employer - - - - 10,816 ------------------------------------------------------------------- 18,884 200,876 52,351 35,257 730,163 Deductions Benefit payments (17,680) (268,991) (17,741) (23,973) (588,321) Interfund transfers (6,107) (149,495) 32,313 25,848 - ------------------------------------------------------------------- Net increase (decrease) (4,903) (217,610) 66,923 37,132 141,842 Net assets available for benefits, December 31, 2000 433,252 2,256,038 115,806 372,322 5,518,979 ------------------------------------------------------------------- Net assets available for benefits, December 31, 2001 $ 428,349 $ 2,038,428 $ 182,729 $ 409,454 $ 5,660,821 ==================================================================== The accompanying notes are an integral part of the financial statements. 4 Amcast Industrial Corporation 401(k) Salary Deferral Plan for Bargaining Unit Employees - Plan 2 Notes to Financial Statements December 31, 2002 1. Description of the Plan The following description of the Amcast Industrial Corporation 401(k) Salary Deferral Plan for Bargaining Unit Employees - Plan 2 (the Plan) is provided for general information purposes only. Participants should refer to the Summary Plan Description for a more complete description of the Plan's provisions. General The Plan is a contributory defined contribution plan covering certain employees of the Amcast Industrial Corporation (the Company and Plan Sponsor) who are compensated on an hourly basis and are covered by a collective bargaining agreement. The Plan is subject to the Employee Retirement Income Security Act of 1974 (ERISA). Contributions The Plan allows for participant deferred contributions in participant-directed amounts from 1 percent to 15 percent of their annual compensation, and allows for transfers by participants from any other plan meeting the requirements of Internal Revenue Code (the IRC) Section 401(a). Participants may also annually contribute no more than two lump sum salary deferral contributions, provided that total contributions do not exceed the maximum contribution allowed for each participant. The Company makes matching contributions equal to 15 percent of the first 6 percent of compensation that is deferred by participants to the Plan to certain employees based on their respective collective bargaining agreement. All employer contributions are in Company stock. Vesting Participants are immediately vested in their deferral contributions plus actual earnings thereon. Participants are 50 percent vested in Company contributions made after one year of service with the Company, 75 percent vested after two years of service, and fully vested after three years of service. Vested benefits are paid by several optional methods upon retirement, death, or termination. 5 Amcast Industrial Corporation 401(k) Salary Deferral Plan for Bargaining Unit Employees - Plan 2 Notes to Financial Statements December 31, 2002 1. Description of the Plan (continued) Payment of Benefits On termination of service for any reason, a participant may receive a lump-sum amount equal to the vested value of his or her account, either in (a) cash or (b) cash for all investments other than Company stock and the participant's related shares of the Company's stock. Participant Loans Under the Plan, participants may borrow up to 50 percent of their vested balance not to exceed $50,000. The loan term is not to exceed 5 years unless the loan is for the purchase of a principal residence, in which case the term may be as long as 30 years. Interest rates on these loans are one percent above the prime rate of interest on the first business day of the calendar quarter in which a loan application is made to the Company. Participant Accounts Each participant's account is credited with the participant's contributions and allocations of (a) the Company's contributions and (b) the Plan's earnings. The benefit to which a participant is entitled is the benefit that can be provided from the participant's account. Administrative Expenses Substantially all expenses of the Plan are paid by the Company. 2. Summary of Significant Accounting Policies Basis of Accounting The Plan's financial statements are prepared on the accrual basis of accounting. 6 Amcast Industrial Corporation 401(k) Salary Deferral Plan for Bargaining Unit Employees - Plan 2 Notes to Financial Statements December 31, 2002 2. Summary of Significant Accounting Policies (continued) Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Plan administrator to make estimates and assumptions that affect certain amounts and disclosures reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Investment Valuation The Plan's investments are stated at fair value. The shares of registered investment companies are valued at quoted market prices which represent the net asset values of shares held by the Plan at year-end. Company common stock and the participation units owned by the Plan in the common/collective trust fund are based on quoted redemption value on the last business day of the Plan year. Participant loans are valued at their outstanding balances, which approximate fair value. Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statements of net assets available for benefits. 7 Amcast Industrial Corporation 401(k) Salary Deferral Plan for Bargaining Unit Employees - Plan 2 Notes to Financial Statements December 31, 2002 3. Investments The fair value of individual investments that represent 5 percent or more of the Plan's net assets available for benefits at December 31 are as follows: 2002 2001 --------------- ---------------- Shares of registered investment companies T. Rowe Price Equity Income Fund $ 1,697,026 $ 2,035,276 T. Rowe Price Equity Index 500 Fund 347,709 427,086 Common/collective trust fund T. Rowe Price Stable Value Fund 2,622,147 2,283,065 Participant Loans 393,281 409,454 For the years ended December 31, 2002 and 2001, the Plan's investments (including investments bought, sold, and held during the year) depreciated in value by $543,344, and $206,647, respectively: 2002 2001 ------------- ------------- Shares of registered investment companies $ 468,165 $ 154,880 Amcast Industrial Corporation common stock 75,179 51,767 ------------- ------------- $ 543,344 $ 206,647 ============= ============= 8 Amcast Industrial Corporation 401(k) Salary Deferral Plan for Bargaining Unit Employees - Plan 2 Notes to Financial Statements December 31, 2002 4. Income Tax Status The Internal Revenue Service (IRS) has not yet determined if the Plan qualifies under Section 401(a) of the Internal Revenue Code (the IRC). However, the Plan administrator believes that the Plan is qualified and, therefore, the underlying trust is not subject to income tax under present law. Once qualified, the Plan is required to operate in conformity with the IRC to maintain its qualification. The Company's Pension Administration Committee and the Company's tax counsel are not aware of any course of action or series of events that have occurred that might adversely affect the Plan's qualified status. 5. Transactions With Parties-In-Interest The Trust is not charged for administrative services performed on its behalf by the Company. The Plan also invests in common stock of the Company (the Plan Sponsor). 6. Plan Termination Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100 percent vested in their account. 9 Supplemental Schedules Amcast Industrial Corporation 401(k) Salary Deferral Plan for Bargaining Unit Employees - Plan 2 EIN 31-0258080 / Plan 021 Schedule H, Part IV, Line 4i - Schedule of Assets Held for Investment Purposes December 31, 2002 (a) , (b) ( c ) (e) Identity of Party Involved and Description of (d) Fair Description of Asset Investment Cost Value - ----------------------------------------------------------- ------------------------ ------------------ ------------------ Shares of registered investment companies * T. Rowe Price International Stock Fund 5,289 shares $ 56,089 $ 46,966 * T. Rowe Price New Horizons Fund 5,454 shares 116,422 90,589 * T. Rowe Price New Income Fund 14,806 shares 128,827 131,627 * T. Rowe Price Capital Appreciation Fund 14,842 shares 218,049 210,918 * T. Rowe Price Equity Index 500 Fund 14,690 shares 438,964 347,709 * T. Rowe Price Equity Income Fund 85,752 shares 2,001,713 1,697,026 ------------------ ------------------ 2,960,064 2,524,835 Common/collective trust fund * T. Rowe Price Stable Value Fund 2,622,147 units 2,622,147 2,622,147 Common stock * Amcast Industrial Corporation common stock 24,048 shares 109,011 40,881 Loans to participants Rates ranging from Participant loans 7% to 11% 393,281 393,281 ------------------ ------------------ $6,084,503 $5,581,144 ================== ================== * Indicates party-in-interest to the Plan. 10 Amcast Industrial Corporation 401(k) Salary Deferral Plan for Bargaining Unit Employees - Plan 2 EIN 31-0258080 / Plan 021 Schedule H, Part IV, Line 4i - Schedule of Assets Held for Investment Purposes December 31, 2001 (a) , (b) ( c ) (e) Identity of Party Involved and Description of (d) Fair Description of Asset Investment Cost Value - ----------------------------------------------------------- ------------------------ ------------------ ------------------ Shares of registered investment companies * T. Rowe Price International Stock Fund 3,937 shares $ 59,056 $ 43,265 * T. Rowe Price New Horizons Fund 4,710 shares 121,943 106,591 * T. Rowe Price New Income Fund 10,756 shares 91,871 93,359 * T. Rowe Price Capital Appreciation Fund 12,426 shares 178,731 181,919 * T. Rowe Price Equity Index 500 Fund 13,848 shares 489,492 427,086 * T. Rowe Price Equity Income Fund 86,058 shares 2,166,597 2,035,276 ------------------ ------------------ 3,107,690 2,887,496 Common/collective trust fund * T. Rowe Price Stable Value Fund 2,283,065 units 2,283,065 2,283,065 Common stock * Amcast Industrial Corporation common stock 12,837 shares 163,722 69,065 Loans to participants Rates ranging from Participant loans 7% to 11% 409,454 409,454 ------------------ ------------------ $5,963,931 $5,649,080 ================== ================== * Indicates party-in-interest to the Plan. 11 Amcast Industrial Corporation 401(k) Salary Deferral Plan for Bargaining Unit Employees - Plan 2 EIN 31-0258080 / Plan 021 Schedule H, Part IV, Line 4j - Schedule of Reportable Transactions For the year ended December 31, 2002 (h) Fair (b) (g) Value of (i) Description (c) (d) Cost Asset at Net (a) of Purchase Selling of Date of Gain or Identity of Party Involved Investment Price Price Asset Transaction (Loss) - -------------------------------- ---------------------- --------------- ------------ ------------- ----------------- ---------- --No Reportable Transactions-- There were no category (i), (ii), (iii) or (iv) transactions during the year. There were no lease rental activities or expenses incurred with the plan. Therefore, columns (e) and (f) were eliminated for presentation purposes. 12 Amcast Industrial Corporation 401(k) Salary Deferral Plan for Bargaining Unit Employees - Plan 2 EIN 31-0258080 / Plan 021 Schedule H, Part IV, Line 4j - Schedule of Reportable Transactions For the year ended December 31, 2001 (h) Fair (b) (g) Value of (i) Description (c) (d) Cost Asset at Net (a) of Purchase Selling of Date of Gain or Identity of Party Involved Investment Price Price Asset Transaction (Loss) - ------------------------------- --------------------- ----------------- ------------- ------------ ----------------- ---------- --No Reportable Transactions-- There were no category (i), (ii), (iii) or (iv) transactions during the year. There were no lease rental activities or expenses incurred with the plan. Therefore, columns (e) and (f) were eliminated for presentation purposes. 13