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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF

THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996

COMMISSION FILE NUMBER 0-27918
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CENTURY ALUMINUM COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE 13-3070826
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
1200 PIEDMONT AVENUE
P.O. BOX 51130
PACIFIC GROVE, CALIFORNIA 93950
(ADDRESS OF REGISTRANT'S PRINCIPAL EXECUTIVE (ZIP CODE)
OFFICES)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (408) 657-1280

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

TITLE OF EACH CLASS

COMMON STOCK, $0.01 PAR VALUE PER SHARE

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 the registrant's knowledge, in a definitive proxy or information
statement incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. ___

As of February 28, 1997 20,000,000 shares of common stock of the registrant
were issued and outstanding. Based upon the NASDAQ closing price on February 28,
1997, the aggregate market value of the common stock held by non-affiliates of
the registrant was $199,204,946.

DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the Proxy Statement relating to the Annual Meeting of
Stockholders to be held on May 13, 1997 (to be filed pursuant to Regulation 14A
within 120 days after the close of the fiscal year covered by this report on
Form 10-K) are incorporated by reference into Part III of this Form 10-K.

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PART I

ITEM 1. BUSINESS

Century Aluminum Company ("Century" or the "Company") is a leading North
American integrated producer of primary aluminum and a broad range of
value-added and specialized flat-rolled sheet and plate aluminum products.
Century's principal subsidiary, Ravenswood Aluminum Corporation ("Ravenswood"),
owns and operates a reduction facility and a multi-purpose rolling mill,
strategically located on the Ohio River in Ravenswood, West Virginia.
Ravenswood, through its wholly-owned subsidiary, Berkeley Aluminum Company
("Berkeley"), also owns a 26.67% undivided interest in a reduction facility in
Mt. Holly, South Carolina (the "Mt. Holly Facility"). Century's reduction
facilities have an aggregate annual capacity of approximately 490 million pounds
of primary aluminum, of which approximately 300 million pounds are used by
Ravenswood's rolling and plate mills. In 1996, Century produced 490 million
pounds of primary aluminum, shipped 548.5 million pounds of sheet and plate
aluminum products, and had total net sales of $688.9 million.

In April 1995, pursuant to a restructuring within Glencore International AG
and its subsidiaries, (hereinafter, "Glencore International," "Glencore" or the
"Glencore Group", respectively), Ravenswood acquired Virgin Islands Alumina
Company ("Vialco") and Berkeley (which was previously a direct wholly-owned
subsidiary of Century) and Ravenswood became a wholly-owned subsidiary of
Century. The restructuring was accounted for as a transfer of interests among
companies under the common control of Glencore International and, as a result,
the assets and liabilities of Ravenswood have been accounted for at historical
cost. In July 1995, the Vialco Alumina Facility was sold to a subsidiary of
Alcoa L.L.C. Accordingly, the Consolidated Financial Statements of the Company
do not include the historical results of Vialco.

Prior to March 1996, the Company had holdings in a number of other entities
in unrelated businesses that are presented as discontinued operations. Effective
March 28, 1996, the Company made a special distribution, in the form of a pro
rata redemption of shares of its then current shareholders, comprised of these
holdings.

In April 1996, the Company completed an initial public offering of its
Common Stock. The selling shareholders, which are part of the Glencore Group,
have retained 7,925,000 common shares, or 39.6% of the shares outstanding.

Century's Ravenswood reduction facility produces primary aluminum, which is
alloyed and cast into rolling ingot, principally for use by its rolling plant.
Through its interest in the Mt. Holly Facility, Century produces primary
aluminum products in the form of t-ingot, extrusion billet, rolling ingot and
foundry ingot. Extrusion billet and other shaped primary aluminum products are
considered to be premium products and, accordingly, sell at a premium to the
commodity-priced aluminum ingot. The Mt. Holly Facility, constructed in 1980, is
the most recently built reduction facility in the United States. Until January
1, 1996, Century's requirements for alumina, the raw material used by its
reduction facilities to produce primary aluminum, were purchased pursuant to a
variable-price supply agreement with Glencore Ltd. and, since January 1, 1996,
have been purchased pursuant to a long-term fixed-price supply agreement with
Alcoa L.L.C. and Alcoa Australia. Glencore Ltd. is a U. S. Branch of Glencore
AG, which in turn, is wholly-owned by Glencore.

The Company operates one of the largest multi-purpose rolling plants in
North America, with the capacity to manufacture in excess of 600 million pounds
of flat-rolled sheet and plate aluminum products per annum. The Company's hot
rolling mill processes aluminum ingot for the production of plate as wide as 150
inches and coil as wide as 103 inches. Its 130-inch cold rolling mill, one of
the largest in North America, has the capability to produce precision coils of
sheet up to 103 inches wide and up to one-quarter inch thick. Its plate mill
includes what the Company believes is the world's largest heavy-duty plate
stretcher and a five-axis profiler, affording it the ability to produce heavy
gauge and uniquely-configured plate products. These capabilities enable it to
manufacture value-added products satisfying exacting technical and production
standards, as well as products with specifications which only it and a limited
number of competitors can meet. The Company believes that these capabilities
also enable it to maintain a diversified and balanced product mix and provide it
with the flexibility to target new markets and shift product mix, thereby
reducing the Company's dependence on any given product and its end-user's
industry.

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INDUSTRY OVERVIEW

The aluminum industry is highly cyclical, and the market prices of alumina
and primary aluminum (which is traded as a commodity) have been volatile from
time to time. In turn, prices of flat-rolled aluminum sheet and plate have
reflected this price volatility as well as fluctuations attributable to general
and industry-specific economic conditions.

Primary Aluminum

The most commonly used indicator of pricing in the aluminum industry is the
average price per tonne for transactions on the London Metals Exchange ("LME").
The LME price does not represent the actual price for the Company's products;
rather, it is the most commonly used benchmark for pricing both primary and many
fabricated aluminum products in the aluminum industry. The prices for primary
aluminum have fluctuated widely. Over the past fifteen years, the average LME
cash price has ranged from a low of $.46 per pound in 1982 to a high of $1.17
per pound in 1988.

Prices for primary aluminum declined from 1989 to 1993 due to a worldwide
oversupply of aluminum, resulting from increased exports from the Commonwealth
of Independent States ("CIS") and former Eastern Bloc countries, overcapacity in
the industry and weakness in the general economy. Beginning in 1994, inventories
began to decline and prices rose, principally due to increased demand for
aluminum associated with the U.S. economic recovery. Inventories of aluminum on
the LME have declined approximately 65% from the high levels of nearly 2.7
million tonnes in June 1994 to 951,275 tonnes as of December 31, 1996. In 1996,
LME inventories rose from 589,925 tonnes in January to a high in October of
970,725 tonnes before falling to 951,275 tonnes at the end of December. During
this same period, the average January LME cash price was $.72 per pound, the
cash price hit a low of $.59 per pound in October, and then recovered in
December to an average price of $.68 per pound.

Flat-Rolled Aluminum Products

The markets for aluminum products are highly diverse and include sheet,
plate and foil; rod, bar and wire; extrusion, forgings, castings, powder and
paste. The Company competes in the markets for sheet and plate products, which
represented approximately 74% of the total North American aluminum products
market for the first ten months of 1996. The principal end-user markets for
aluminum sheet and plate products are: containers and packaging; transportation;
aerospace; building and construction; consumer durables; electrical; and
machinery and equipment. Manufacturers in these end-user markets use aluminum
sheet and plate to make numerous products, including: beverage cans; passenger
cars, boats, trucks, trailers, rail cars and aircraft; screens, roofing systems,
and aluminum siding; heating, ventilation and air conditioning equipment;
electrical components; and computers and copying machines.

Although the market for aluminum is cyclical, overall demand for
flat-rolled aluminum sheet and plate products in North America, the principal
market served by the Company, has grown during the period, 1985 to 1995, at an
average annual rate of 3.5% to approximately 10 billion pounds in 1995. However,
through October 1996, the North American flat-rolled aluminum shipments
decreased 7.1% versus the same period in 1995. This decrease was primarily in
containers and packaging, transportation, and distribution, while the building
products market realized a volume gain. Although most sheet and plate products
are sold directly to the end-user markets, approximately 18% of sheet and plate
products are sold through the distributor market. Distributors principally
resell to the transportation, building and construction, and consumer durables
end-user markets. Distributors have been increasing their share of the domestic
aluminum sheet and plate market in recent years as aluminum producers have been
reducing downstream processing and as end-users have been reducing their raw
material inventories.

PRODUCTS AND MARKETS

The Company produces and sells primary aluminum. The Company also produces
can body sheet for the containers and packaging market and a diverse range of
flat-rolled sheet and plate products for the aerospace, transportation, and
industrial ("ATI") markets. The Company sells sheet and plate products directly
to

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manufacturers that fabricate aluminum sheet into finished products or to
distributors who resell into various markets. Among the various products using
aluminum sheet and plate manufactured by the Company are: beverage cans;
passenger cars, boats, trucks, trailers, rail cars and aircraft; roofing systems
and aluminum siding; heating, ventilation and air conditioning equipment;
electrical components; and computer and copying equipment. Within the ATI
markets, the Company has focused on higher margin, value-added and specialized
products, including brazing sheet used in automotive cooling systems, heat
treatable and non-heat treatable aluminum plate for the aerospace and defense
industries, and heavy-gauge, wide-leveled coil and sheet for the heavy truck,
dump body, marine and rail car sectors.

Can body sheet accounted for 10.1%, 14.8% and 17.7%, respectively; brazing
sheet accounted for 11.7%, 9.5% and 11.1%, respectively; distributor coil and
flat sheet accounted for 19.0%, 12.2% and 8.6%, respectively; and primary
aluminum accounted for 22.0%, 20.0% and 17.3%, respectively, of Century's net
sales for the years ended December 31, 1996, 1995 and 1994.

The Company's strategy is to focus on maximizing productivity, minimizing
operating costs, emphasizing higher margin, value-added and specialized
products, broadening its customer base, diversifying its product mix, and
penetrating new markets.

COMPETITION

The markets for primary aluminum and aluminum sheet and plate products are
diverse and highly competitive. The Company competes in the production and sale
of primary aluminum and flat-rolled sheet and plate aluminum products with
numerous other aluminum reduction facilities and rolling mills in the United
States and Canada (including large, single purpose can sheet mills, continuous
casters or mini-mills, and other multi-purpose mills) and with imported
products, principally from France and the CIS. The Company competes with these
companies on the basis of quality, price, timeliness of delivery and customer
service. Some of the Company's competitors have substantially greater
manufacturing and financial resources, and some have cost structures with
respect to alumina, electricity and labor that are more advantageous than those
of the Company. Among the Company's principal competitors are Alcoa, Alumax,
Alcan, Kaiser and Reynolds. Most of the Company's primary aluminum output is in
the form of primary ingot, which trades as a commodity.

Aluminum also competes with other materials such as steel, plastic and
glass for various applications. Higher or lower aluminum prices tend to make
aluminum products less or more competitive with these alternative materials.

PRICING

Century offers a number of pricing alternatives to its customers which,
combined with the Company's metals risk management program, are designed to
preserve for the Company prevailing margins for its flat-rolled sheet and plate
sales and lock-in a certain level of profitability on its primary aluminum
production.

While the Company's pricing terms vary to accommodate flat-rolled sheet and
plate customer requirements, pricing is generally offered on the following
bases: (i) a fixed-price basis, which is only used for short or normal lead-time
orders, (ii) a "take or pay" basis, where the customer is required to purchase
the rolled product in accordance with the contract terms or pay for the primary
aluminum forward contract plus an administrative fee, or (iii) an indexed price,
where the customer pays an agreed-upon margin above an established index, such
as the LME. In 1996, fixed price orders generally represented approximately 50%
of these orders, "take or pay" represented 35% of the orders, and the balance
was on an indexed pricing basis. "Take or pay" and indexed price terms are
relatively recent industry practices, and there can be no assurance that
aluminum customers, in general, or Century's customers, in particular, will
continue to accept these terms. Century also converts primary aluminum for
selected customers on a tolling basis, where it is paid a fee for processing the
customer's metal. In 1996, tolled product shipments amounted to 105.7 million
pounds, or 19.3% of total sheet and plate shipments, and accounted for revenues
of $32.5 million, or 6.0% of total revenues from sheet and plate production. See
Item 7 "Management's Discussion and Analysis of Financial Condition and Results
of Operations."

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Century produces primary aluminum products and manufactures aluminum sheet
and plate products and manages the risks of each accordingly. Commencing in
mid-1994, Century implemented the metals risk management strategies set forth
below.

With respect to its primary aluminum products, Century attempts to assure
itself a fixed margin over its primary aluminum production costs through the use
of forward sales contracts. With respect to its aluminum sheet and plate sales,
Century attempts to assure itself a fixed margin over the market price of
primary aluminum and its other aluminum raw material costs through the use of
forward purchase contracts.

Although Century has not materially participated in the purchase of call
options, in cases where Century sells forward primary aluminum, it may purchase
call options to preserve the opportunity to benefit from price increases
significantly above the forward sales prices. In addition, in cases where
Century purchases forward primary aluminum, it may purchase put options to
preserve the opportunity to benefit from price decreases.

SALES AND DISTRIBUTION

Century serves customers principally in the containers and packaging,
aerospace, transportation and industrial sectors. Approximately 72% of Century's
1996 sheet and plate shipments were made directly to manufacturers that
fabricate the Company's aluminum sheet into finished products. The remaining 28%
of the Company's 1996 sheet and plate shipments were to distributors. For the
year ended December 31, 1996, Century's ten largest sheet and plate customers
accounted for approximately 43% of total sheet and plate sales. There can be no
assurance that any of the Company's major customers will continue to purchase
their aluminum requirements from the Company at current volumes. For financial
information regarding export sales, see Note 15 to the Consolidated Financial
Statements.

Effective January 1, 1996, the Company entered into a one-year sales
contract with Glencore Ltd., pursuant to which Glencore Ltd. agreed to purchase
approximately 114 million pounds of primary aluminum for shipment during 1996,
which approximated the Company's share of the primary aluminum production of the
Mt. Holly Facility. In addition, effective January 1, 1996, the Company entered
into a one-year Services and Marketing Agreement with Glencore Ltd. pursuant to
which Glencore Ltd. furnished training and marketing assistance in connection
with Century's ownership of the Mt. Holly Facility. Sales by the Company to the
Glencore Group accounted for revenues of $138.7 million for the year ended
December 31, 1996 (representing 20.1% of total 1996 revenues). Although the
Company expects that it will continue to realize revenue from sales to the
Glencore Group in the future, the Company does not have any long-term agreements
with the Glencore Group, and, consequently, there can be no assurance that the
Company will continue to do business with the Glencore Group in the future.

BACKLOG

The Company's backlog was approximately $475 million at December 31, 1996,
of which approximately 83% will be filled during 1997. The Company's backlog at
December 31, 1995 was approximately $497 million.

ENVIRONMENTAL MATTERS

The Company's operations are subject to increasingly stringent
environmental laws and regulations, including those governing air emissions,
wastewater discharges, the handling and remediation of hazardous substances and
wastes, and employee health and safety. Future environmental laws and
regulations, including those under the Clean Air Act, are expected to impose
stricter compliance requirements on the aluminum industry in general. There can
be no assurance that future capital expenditures and costs for matters relating
to environmental control, remediation, monitoring and compliance will not have a
material adverse effect on the Company's financial condition, results of
operations or liquidity. In addition, in the past, the Company's

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manufacturing activities (and those of its predecessors) have resulted in
environmental impacts requiring remediation by the Company. Pursuant to certain
environmental laws, the Company, regardless of fault, may be liable for the
costs of remediation of contaminated property or for the amelioration of damage
to natural resources. Although the Company believes, based upon information
currently available to management, that it will not have liabilities in this
regard which are likely to have a material adverse effect on the Company, there
can be no assurance that future remedial requirements at currently and formerly
owned or operated properties or adjacent areas will not result in a material
adverse effect on the Company's financial condition, results of operations or
liquidity. The Company has planned environmental capital expenditures for the
years ending December 31, 1997, 1998 and 1999 of approximately $5.2 million,
$3.5 million and $2.0 million, respectively. In addition, the Company expects to
incur expenses relating to environmental matters of approximately $8.9 million,
$9.6 million and $9.7 million for the years ending December 31, 1997, 1998 and
1999, respectively. As part of its general capital expenditure plan, the Company
also expects to incur capital expenditures for other capital projects which may,
in addition to improving operations, reduce certain environmental impacts. See
Item 7 "Management's Discussion and Analysis of Financial Condition and Results
of Operations -- Environmental Expenditures and Other Contingencies."

In 1990, Congress passed amendments to the Clean Air Act which impose more
stringent standards on the aluminum industry with respect to air emissions. The
Clean Air Act amendments will directly affect the operations of the Company's
facilities. However, many of the regulations in connection with these amendments
have not been finalized. Those relating to smelters and carbon plants are in
draft form, while those relating to casting and fabrication plants have yet to
be developed. Consequently, the amount of environmental expenditures that the
Company will be required to incur in order to comply with these amendments will
depend on the standards and requirements that will be imposed pursuant to these
regulations which currently cannot be predicted with certainty. The Company's
general capital expenditure plan includes certain projects designed to improve
the Company's compliance position with respect to the anticipated requirements
of these regulations.

Pursuant to an order issued in September 1994 under Section 3008(h)(the
"3008(h) order") of the Resource Conservation and Recovery Act ("RCRA"),
Ravenswood is performing remediation measures at a former oil pond area and in
connection with cyanide contamination in groundwater, and is conducting a RCRA
facility investigation ("RFT") and a corrective measures study ("CMS") to
evaluate and develop corrective alternatives for any other areas that have
contamination exceeding certain levels. The Company has completed initial
sampling and analysis and has submitted its initial findings to the
Environmental Protection Agency ("EPA"). The Company will conduct further field
work in mid 1997. The Company anticipates that the RFI will not be completed
before late 1997. Once the RFI and CMS are complete, the EPA will assess the
need for clean-up, and if any clean-up is required, a subsequent order will be
issued. At this time, the Company is unable to determine the extent of clean-up
measures, if any, that may be required. However, the Company is aware of some
environmental contamination at Ravenswood, and it is likely that clean-up
activities will be required in at least some areas of the facility. The Company
believes a significant portion of this contamination is attributable to the
operations of a prior owner and will be the financial responsibility of that
owner, as discussed below.

The West Virginia Department of Environmental Protection ("DEP") ordered
Ravenswood to investigate treatment technology to replace the current wastewater
sprayfield and to install such technology by September 1, 1997. Ravenswood has
completed the investigation and has proposed alternative technology to the DEP.
The DEP has reviewed the proposal and does not object to Ravenswood proceeding
with the design and construction of the proposed treatment technology.

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may be required to remediate any contamination discovered during or after
completion of the RFI, which contamination was discharged from areas which
Kaiser previously owned or operated, or for which Kaiser has retained ownership
or responsibility. However, if such remediation is required, the Company
believes that Kaiser will be liable for some or all the costs thereof pursuant
to the Kaiser Purchase Agreement.

The Company is aware there has been contamination in the soil and
groundwater at the previously-owned Vialco facility. The Company believes that a
substantial amount of the contamination migrated from an adjacent facility. The
adjacent facility is currently investigating and has installed monitoring wells
at the Vialco facility. The Company has removed quantities of contaminated soils
from Vialco and transported and disposed of such soils in approved facilities.
In addition, it has instituted a bioremediation program which it believes will
address the remaining legal requirements with respect to such soils. Pursuant to
the contract for sale of the Vialco facility to St. Croix Alumina, L.L.C. ("St.
Croix Alumina"), a subsidiary of Alcoa Alumina and Chemicals L.L.C., the Company
has retained liability for environmental conditions existing at the time of the
sale only to the extent such conditions require remedial action, or give rise to
claims, under laws in effect at the time of sale. The Company will not have
liability if remediation is required or claims are made due to changes in law
after the time of sale. The Company has agreed to indemnify St. Croix Alumina
against claims arising from environmental conditions for which the Company has
retained liability. The indemnity is capped at $18 million, and any claims under
the indemnity must be brought by July 24, 2001. Management of the Company does
not believe that the ultimate amount of the retained liability, if any, will
have a material adverse effect on the Company's financial condition, results of
operations or liquidity.

On February 14, 1995, a suit was brought in the Territorial Court in St.
Croix, U.S. Virgin Islands against Vialco, Bechtel Corporation and Mitsubishi
Heavy Industries, Ltd. by three plaintiffs, purportedly on behalf of a class
consisting of more than 1000 persons. The proposed class is comprised of
residents of Harvey Project, Bethlehem Village, and Estate Profit (residential
areas in the vicinity of the Vialco facility) who claim personal injury,
property damage and nuisance from pollutants, toxins, dusts, and deleterious
fumes, mists, vapors, particulates and/or gases allegedly discharged into the
atmosphere since Vialco restarted operations at the Vialco facility in 1989.
Plaintiffs also sought a monetary award in an unspecified amount which would
create a fund to cover the costs of permanent medical monitoring for members of
the proposed plaintiff class. Without admitting to any liability, and in order
to put an end to growing defense costs and protracted litigation, Vialco and the
plaintiffs have recently agreed to settle this case, subject to Court approval.
The Company accrued the expense of settlement in 1996.

RESEARCH AND DEVELOPMENT

Century performs ongoing process and product development work in
coordination with outside laboratories. Company programs have focused on both
product and process improvements. The Company has sought to produce new alloys
and products to enhance the strength, braze ability and corrosion resistance of
brazing sheet, develop tempers and higher gauge ranges for the improvement of
existing applications and the development of new applications in the aerospace
and tooling markets, and develop enhanced formability non-heat treatable alloys
for transportation applications. On the process side, the Company has made
efforts in its rolling operations to improve process control through the
application of mill models and enhanced diagnostics and in its reduction
operations to refine the computer control of pots and to reduce electricity
usage by using different anode/stub configurations. Century also participates in
a consortium consisting of government research laboratories and other aluminum
companies to develop new alloys for use in automotive body applications.
Expenditures for third-party research and development totaled $2.6 million, $2.6
million and $2.3 million in 1996, 1995 and 1994, respectively, and are expected
to be $2.6 million in 1997.

PATENTS AND TRADEMARKS

The Company owns a number of patents relating to various aspects of its
operations. The Company does not consider its business to be materially
dependent on any of these patents.

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EMPLOYEES AND LABOR RELATIONS

The Company currently employs approximately 2,180 persons. The present work
force is comprised of approximately 1,700 hourly employees, represented by the
United Steelworkers of America ("USWA"), and approximately 480 salaried
personnel. Ravenswood's hourly employees are currently working under a four and
one-half year labor agreement with the USWA which expires on May 31, 1999.

Century maintains noncontributory defined benefit pension plans and defined
contribution 401(k) plans for its salaried and hourly employees. Management has
established as a key strategy the improvement of labor relations and believes
that its relations with its employees are good.

ITEM 2. PROPERTIES

Century's Ravenswood facility houses the Company's principal operations.
The facility occupies 105 acres under roof on a site totaling 2,800 acres
strategically located on the Ohio River in Ravenswood, West Virginia, 165 miles
southwest of Pittsburgh, Pennsylvania and 45 miles north of Charleston, West
Virginia.

The Company's reduction facilities at Ravenswood and Mt. Holly have an
aggregate annual capacity of approximately 490 million pounds of primary
aluminum. Its rolling plant has a production capacity in excess of 600 million
pounds per annum.

The Company's Ravenswood reduction facility, which was built in 1955, has
an annual production capacity of approximately 370 million pounds and produces
primary aluminum which is alloyed and cast into rolling ingot principally for
use by its rolling plant. Approximately 300 million pounds of its primary
aluminum production are used to satisfy the primary aluminum requirements of its
rolling and plate mills with the balance sold in the form of sow.

The Mt. Holly Facility was constructed in 1980 by Alumax using Alcoa
technology and is the most recently constructed reduction facility in the United
States. The Mt. Holly Facility has a total production capacity of approximately
450 million pounds, of which Century owns a 26.67% undivided interest. The
remaining undivided interest in the Mt. Holly Facility is owned 50.33% by Alumax
of South Carolina, Inc. ("ASC") and 23.00% by a subsidiary of Sudelektra Holding
AG, a publicly traded Swiss company. The Glencore Group is a major shareholder
of Sudelektra Holding AG. ASC manages and operates the facility pursuant to an
Owners Agreement, prohibiting the disposal of the interest held by any of the
owners without the consent of the other owners and providing for certain rights
of refusal. Pursuant to the Owners Agreement, each owner furnishes its own
alumina, or alumina owned by an affiliate, for conversion to aluminum and is
responsible for its pro rata share of the operating and conversion costs.

The Company's rolling plant is one of the largest multi-purpose rolling
plants in North America. The Company's hot rolling mill processes aluminum ingot
for the production of plate as wide as 150 inches and coil as wide as 103
inches. Its 130-inch cold rolling mill, one of the largest in North America, has
the capability to produce coils of sheet up to 103 inches wide and up to
one-quarter inch thick. Its plate mill includes what the Company believes is the
world's largest heavy-duty plate stretcher and a five-axis profiler, affording
it the capabilities to produce heavy gauge and uniquely-configured plate
products. These capabilities enable it to manufacture value-added products
requiring exacting technical and production standards, as well as products
within the ATI market with specifications which only it and a limited number of
competitors can meet.

Until September 29, 1995, Century also owned the Bedford Facility, located
in Bedford, Indiana, specifically designed for the recycling of used beverage
cans and the production of recycled secondary ingot ("RSI"). The Bedford
Facility had a production capacity of 150 million pounds per annum. The Company
used approximately 35 million pounds of RSI and the remaining output was sold to
third parties. In September 1995, Century sold the Bedford Facility to IMCO
Recycling Inc. ("IMCO"). As part of such sale, Century and IMCO entered into two
toll conversion agreements, pursuant to which IMCO processes scrap provided by
Century into RSI for agreed-upon conversion fees.

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Equipment failures at Century's Ravenswood facility could limit or shut
down the Company's production for a significant period of time. In order to
minimize the risk of equipment failure, the Company follows a comprehensive
maintenance and loss prevention program and periodically reviews its failure
exposure. No assurance can be given that a material shutdown will not occur in
the future or that such a shutdown would not have a material adverse effect on
the Company. In addition to equipment failures, the facility also is subject to
the risk of catastrophic loss. The Company believes that it maintains adequate
property damage insurance to provide for reconstruction of damaged equipment, as
well as business interruption insurance to mitigate losses resulting from any
production shutdown caused by an insured loss.

ITEM 3. LEGAL PROCEEDINGS

Ravenswood is a named defendant (along with other companies) in
approximately 2,300 civil actions brought by individuals seeking to recover
significant compensatory and/or punitive damages in connection with various
asbestos-related diseases. All of the plaintiffs have been employees of
independent contractors who claim to have been exposed to asbestos in the course
of performing services at various facilities, including the Ravenswood facility.
The cases are typically resolved based upon factual determinations as to the
facilities at which the plaintiffs worked, the periods of time during which work
was performed, the type of work performed and the conditions in which work was
performed. In Ravenswood's case, if the plaintiffs' work was performed during
the period when Kaiser owned the Ravenswood facility, Kaiser has retained
responsibility, pursuant to the terms of the Kaiser Purchase Agreement. In a
typical case or consolidated group of cases, Ravenswood turns the complaint over
to Kaiser with a demand for defense and indemnity. Kaiser assumes the defense
and liability, subject to a reservation of rights against Ravenswood in the
event that a plaintiff is shown to have worked at the Ravenswood facility after
the time Ravenswood purchased the facility from Kaiser. The Company believes it
is unlikely that existing or potential plaintiffs were exposed to asbestos at
the Ravenswood facility after Ravenswood purchased the facility from Kaiser,
although eight plaintiffs have claimed they were exposed during this period of
time. Therefore, while the impact of the asbestos proceedings is impossible to
predict, the Company believes it has meritorious defenses to the actions and
that the ultimate resolution will not have a material adverse effect on the
Company's financial condition, results of operations or liquidity.

In August 1994, Ravenswood received a Civil Investigate Demand ("CID") from
the Antitrust Division of the U.S. Department of Justice (the "Antitrust
Division") in connection with an investigation by the Antitrust Division to
determine whether there had been or was an unlawful agreement to restrict the
production of primary aluminum. The CID demanded that Ravenswood submit certain
documents and information to the Antitrust Division. Ravenswood complied with
the CID and has not received any further requests from the Antitrust Division.

On November 17, 1996, a suit was brought in the United States District
Court for the Southern District of West Virginia against Ravenswood Aluminum
Corporation and Kaiser Aluminum & Chemical Corporation purportedly on behalf of
a proposed class believed to consist of approximately 150 salaried employees and
retirees of Ravenswood. Plaintiffs claim that in 1989 defendants misrepresented
the terms of the salaried employee pension plan and/or benefits. The proposed
class has not yet been certified and damages have not been specified. Ravenswood
has denied liability and will defend the matter vigorously. While it is
impossible to predict the outcome of this litigation, Ravenswood believes the
outcome will not have a material adverse effect on its financial condition or
liquidity, although it is possible that an adverse outcome could materially
affect its results of operations in a given period.

The Company is a party to various other non-environmental legal proceedings
and administrative actions, all of which are of an ordinary or routine nature
incidental to the operations of the Company. Although it is impossible to
predict the outcome of any legal proceeding, in the opinion of the Company's
management, such proceedings and actions should not, individually or in the
aggregate, have a material adverse effect on the Company's financial condition,
results of operations or liquidity. For a description of certain environmental
matters involving the Company, see Item 1 "Environmental Matters."

8
10

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders of the Company
during the fourth quarter of 1996.

EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth certain information concerning the executive
officers of the Company. Each of such persons serves at the discretion of the
Board of Directors.

BUSINESS EXPERIENCE AND PRINCIPAL OCCUPATION OR EMPLOYMENT
NAME AGE DURING THE PAST 5 YEARS; POSITIONS HELD WITH COMPANY
- ----------------------- --- -----------------------------------------------------------------

Craig A. Davis......... 56 Chairman and Chief Executive Officer of the Company since August
1995; Chairman and Chief Executive Officer of Ravenswood since
August 1995; Chairman and acting Chief Executive Officer of
Ravenswood from April 1992 through July 1995; Executive of
Glencore International and Glencore AG from September 1990 to
March 1996 and Director of Glencore International since December
1993; former Executive Vice President of Alumax.
Gerald A. Meyers....... 47 President and Chief Operating Officer and Director of Company
since August 1995; President and Chief Operating Officer of
Ravenswood since January 1993 and Director of Ravenswood since
April 1994; Operations Manager of Logan Aluminum (joint venture
between Alcan Aluminum Limited and Atlantic Richfield Company)
from November 1988 to December 1992; Director, Aluminum
Association and West Virginia Chamber of Commerce.
Gerald J. Kitchen...... 56 Executive Vice President, General Counsel and Chief
Administrative Officer of the Company since September 1995; Vice
President, General Counsel and Chief Administrative Officer of
Ravenswood since August 1995; Partner (since November 1992) and
Counsel (August 1991 through October 1992) of the law firm of
Thoits, Love, Hershberger & McLean; private law practice from
August 1990 through July 1991; former Vice President and General
Counsel of Alumax.
David W. Beckley....... 52 Executive Vice President and Chief Financial Officer of the
Company since September 1995; Vice President and Chief Financial
Officer of Ravenswood since September 1995; Independent
consultant from May 1995 through August 1995; Vice President and
Corporate Controller of Alliant Techsystems Inc. (defense
contractor) from May 1990 through May 1995.
Steven R. Sedberry..... 41 Vice President, Sales and Marketing, of the Company since August
1995; Vice President, Sales and Marketing, of Ravenswood, since
January 1994; and National Sales Manager (1992-1994), of Alcoa.

9
11

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS

The Company's common stock trades on the NASDAQ National Market tier of the
Nasdaq Stock Market under the Symbol: CENX. The following table sets forth, on a
quarterly basis, the high and low sales prices of the Common Stock since its
initial public offering in April 1996.

HIGH LOW
------- -------

Second Quarter............................................. $ 16.19 $ 13.38
Third Quarter.............................................. $ 16.25 $ 13.88
Fourth Quarter............................................. $ 17.50 $ 12.50

The Company declared and paid dividends of $0.15 per share of Common Stock
during 1996. The Company has a loan agreement that contains, among other things,
restrictions on the payment of dividends by the Company. See Note 4 to the
Consolidated Financial Statements.

At December 31, 1996, there were sixteen holders of record and
approximately one thousand beneficial owners of the Company's common stock.

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12

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

The following table sets forth selected consolidated financial data of the
Company for the years indicated. The selected consolidated financial data for
and as of the end of each of the years in the three-year period ended December
31, 1996 are derived from the Consolidated Financial Statements of the Company
included elsewhere herein which have been audited by Deloitte & Touche LLP. The
selected consolidated financial data for and as of the years ended December 31,
1993 and 1992 are derived from the audited consolidated financial statements of
the Company which are not included herein. The information set forth below
should be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the Consolidated Financial
Statements and notes thereto appearing in Items 7 and 8, respectively.

YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1996 1995 1994 1993 1992
-------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)

STATEMENT OF OPERATIONS DATA:
Net sales -- third party customers.... $550,168 $610,722 $474,067 $334,858 $336,775
Net sales -- related parties.......... 138,711 137,260 95,558 112,718 90,144
-------- -------- -------- -------- --------
Total net sales....................... 688,879 747,982 569,625 447,576 426,919
Cost of goods sold.................... 643,156 654,385 568,810 466,403 441,661
-------- -------- -------- -------- --------
Gross profit (loss)................... 45,723 93,597 815 (18,827) (14,742)
Selling, general and administrative
expenses........................... 18,614 12,729 11,647 12,942 21,335
-------- -------- -------- -------- --------
Operating income (loss)............... 27,109 80,868 (10,832) (31,769) (36,077)
Interest expense -- net, others....... (2,058) (3,578) (6,620) (5,891) (6,963)
Interest expense -- net, affiliates... -- (369) (2,158) (9,854) (6,070)
Other income.......................... 91 1,472 361 233 792
Net gain on forward contracts......... -- 9,616 11,668 -- --
-------- -------- -------- -------- --------
Income (loss) from continuing
operations before income taxes..... 25,142 88,009 (7,581) (47,281) (48,318)
Income tax benefit (expense).......... (8,902) (34,502) 1,704 (1,353) (1,691)
-------- -------- -------- -------- --------
Income (loss) from continuing
operations......................... 16,240 53,507 (5,877) (48,634) (50,009)
Income (loss) from discontinued
operations -- net of income
taxes.............................. 264 5,773 5,769 (360) (3,338)
-------- -------- -------- -------- --------
Net income (loss)..................... $ 16,504 $ 59,280 $ (108) $(48,994) $(53,347)
======== ======== ======== ======== ========
Earnings (loss) per common share and
common share equivalents:
Income (loss) from continuing
operations......................... $ 0.78 $ 2.31 $ (0.25) $ (2.10) $ (2.16)
Income (loss) from discontinued
operations......................... 0.01 0.25 0.25 (0.02) (0.15)
-------- -------- -------- -------- --------
Net income (loss)..................... $ 0.79 $ 2.56 $ -- $ (2.12) $ (2.31)
======== ======== ======== ======== ========
Weighted average common shares and
common share equivalents:.......... 20,857 23,120 23,102 23,120 23,120
BALANCE SHEET DATA (AT PERIOD END):
Working capital....................... $166,271 $151,324 $ 17,332 $ 20,433 $ 2,985
Total assets.......................... 473,731 538,120 536,463 420,898 425,644
Long-term debt........................ 24,356 -- -- 86,250 46,250
Total debt............................ 24,356 -- 130,000 176,250 136,250
Total noncurrent liabilities.......... 186,326 178,511 197,556 193,635 182,687
Total shareholders' equity
(deficiency)....................... 166,478 225,509 76,744 (15,270) 21,857
Cash dividends declared and paid per
common share....................... $ 0.15 $ -- $ -- $ -- $ --

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13

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with, and is
qualified in its entirety by reference to, the Consolidated Financial Statements
of the Company, including the notes thereto, appearing in Item 8.

OVERVIEW

The Company is an integrated manufacturer of primary aluminum and a broad
range of value-added and specialized flat-rolled sheet and plate products. The
Company's net sales are derived from the sale of primary aluminum and
flat-rolled sheet and plate aluminum products and from the tolling of primary
aluminum and scrap into rolled products. The Company sells rolled products
either directly to customers, in which case revenues and cost of goods sold
include metal costs, or as a toll, in which case the customer provides the metal
and the Company's revenues and cost of goods sold do not include metal costs.

The aluminum industry is highly cyclical and the market price of primary
aluminum (which trades as a commodity) is determined by worldwide supply and
demand conditions, and as such, is highly volatile. For example, the cash price
for primary aluminum traded on the LME averaged $0.68, $0.82, and $0.67 per
pound for the years 1996, 1995, and 1994, respectively. In turn, prices of
flat-rolled sheet and plate aluminum products have reflected this volatility, as
well as fluctuations attributable to general and industry-specific economic
conditions, which affect the Company's volume and mix of sheet and plate
products sold.

Of the approximately 370 million pounds of primary aluminum produced at the
Company's Ravenswood reduction facility in 1996, the Company utilized
approximately 300 million pounds for its flat-rolled operations, with the
balance sold primarily to the Glencore Group and third parties at market prices.
The Company's interest in the Mt. Holly Facility amounted to approximately 114
million pounds of primary aluminum production in 1996. Prior to January 1, 1996,
all of the Company's production capacity at the Mt. Holly Facility was used to
process alumina pursuant to tolling agreements between the Company and Glencore
Ltd. Effective January 1, 1996, the Company entered into a one-year sales
contract with Glencore Ltd., pursuant to which Glencore Ltd. agreed to purchase
approximately 114 million pounds of primary aluminum for shipment during 1996.
In addition, effective January 1, 1996, the Company entered into a one-year
Services and Marketing Agreement, pursuant to which Glencore Ltd. trained
Century personnel and furnished marketing assistance to enable Century to take
over the operations and activities which had been carried out by the Glencore
Group in connection with its ownership interest in the Mt. Holly Facility and
the marketing of the Company's share of the primary aluminum production from
that facility.

The principal elements comprising the Company's cost of goods sold are raw
materials, energy and labor. The major raw materials and energy sources used by
the Company in its production process are alumina, aluminum scrap, coal tar
pitch, petroleum coke, aluminum fluoride and electricity. The market price of
alumina has been volatile from time to time. From 1992 through 1995, Century
purchased its alumina requirements from Glencore Ltd. at variable prices tied to
the market price of primary aluminum. On July 24, 1995, Century entered into a
long-term fixed-price alumina supply contract with Alcoa L.L.C. and Alcoa
Australia. Pursuant to the supply agreement, since January 1, 1996, Century has
paid a fixed price for alumina, subject to fixed annual price increases of
approximately 2.5% through 2001. Although the Company produces the primary
aluminum metal required by its rolling operations, Century purchases significant
amounts of aluminum scrap in the open market. The market price for aluminum
scrap closely follows the price of primary aluminum and has been subject to
significant cyclical price fluctuations.

The Company uses significant amounts of electricity in the aluminum
reduction process. To fulfill its power requirements at the Ravenswood facility,
during the years 1994 and 1995, and through June 30, 1996, the Company purchased
electricity from Ohio Power at a price based principally upon Ohio Power's costs
of production. Under this agreement, Century's price for electricity decreased
if the LME primary ingot price was less than certain specified levels and
increased, limited to the extent of cumulative net decreases, if the LME primary
ingot price was greater than certain specified levels. The Company and the same
public utility have signed a power supply agreement, covering the period from
July 1, 1996 through July 31, 2003. Under this agreement, it will pay a fixed
price for electricity used. However, for the period from July 1, 1996 through

12
14

July 31, 1998, if the LME primary ingot price were to exceed certain specified
levels, the price for electricity used would increase, to the extent of
cumulative net price decreases under the previous contract with the same
utility. The Public Utilities Commission of Ohio has approved the agreement.
Since, under the terms of the new agreement, the power rate will be fixed, the
Company's margins could be adversely affected if aluminum prices decrease.

With respect to its labor costs, in 1992, the Company established a
progress sharing plan for eligible union employees, providing for contributions
of 10% of Ravenswood's pre-plan, after-tax income (as defined) for each plan
year through 1997 when the plan terminates. On November 30, 1994, the Company
entered into a new four and one-half year labor contract with its hourly
workers. This agreement will expire on May 31, 1999. The agreement calls for
increases in hourly wages in 1996, 1997 and 1998. Each of the three yearly wage
increases will result in increased wage costs of approximately 2.0%.
Additionally, there is a cost-of-living adjustment equal to one cent per hour
for each full .3% change in the Consumer Price Index published by the U.S.
Department of Labor's Bureau of Labor Statistics.

RESULTS OF OPERATIONS

The following table sets forth, for the years indicated, the percentage
relationship to net sales of certain items included in the Company's statements
of operations.

PERCENTAGE OF NET SALES
-----------------------------
1996 1995 1994
----- ----- -----

Net sales............................................... 100.0% 100.0% 100.0%
Cost of goods sold...................................... 93.4 87.5 99.9
----- ----- -----
Gross profit.......................................... 6.6 12.5 0.1
Selling, general and administrative expenses............ 2.7 1.7 2.0
----- ----- -----
Operating income (loss)............................... 3.9 10.8 (1.9)
Interest expense -- net................................. (0.2) (0.5) (1.5)
Other income............................................ -- 0.2 0.1
Net gain on forward contracts........................... -- 1.3 2.0
----- ----- -----
Income (loss) from continuing operations before income
taxes................................................. 3.7 11.8 (1.3)
Income tax benefit (expense)............................ (1.3) (4.6) 0.3
----- ----- -----
Income (loss) from continuing operations................ 2.4% 7.2% (1.0)%
===== ===== =====

13
15

The following table sets forth, for the periods indicated, the pounds and
the average sales price per pound for certain of the Company's products:

FLAT-ROLLED SHEET PRIMARY
AND PLATE PRODUCTS ALUMINUM
------------------------------------- -------------------------------------
DIRECT(1) TOLL DIRECT(1) TOLL
----------------- ----------------- ----------------- -----------------
POUNDS $/POUNDS POUNDS $/POUNDS POUNDS $/POUNDS POUNDS $/POUNDS
------- ------- ------- ------- ------- ------- ------- -------
(POUNDS IN THOUSANDS)

1996
First Quarter........... 115,708 $1.17 20,936 $0.32 46,774 $0.79 -- --
Second Quarter.......... 113,333 $1.15 34,887 $0.29 31,349 $0.80 -- --
Third Quarter........... 104,146 $1.14 29,396 $0.32 36,702 $0.78 -- --
Fourth Quarter.......... 109,626 $1.09 20,493 $0.31 78,540 $0.75 -- --
Total........... 442,813 $1.14 105,712 $0.31 193,365 $0.77 -- --
1995
First Quarter........... 119,961 $1.27 27,284 $0.31 14,434 $0.84 26,032 $0.69
Second Quarter.......... 110,962 $1.29 35,132 $0.36 18,480 $0.76 29,170 $0.74
Third Quarter........... 97,672 $1.27 35,204 $0.37 16,525 $0.76 26,609 $0.69
Fourth Quarter.......... 109,373 $1.24 26,790 $0.35 27,637 $0.72 28,230 $0.70
Total........... 437,968 $1.27 124,410 $0.35 77,076 $0.76 110,041 $0.71
1994
First Quarter........... 111,862 $0.87 3,499 $0.27 23,647 $0.54 28,508 $0.42
Second Quarter.......... 135,449 $0.88 4,525 $0.27 21,909 $0.58 28,161 $0.50
Third Quarter........... 126,113 $0.93 3,788 $0.31 9,900 $0.65 26,171 $0.53
Fourth Quarter.......... 134,347 $0.99 2,382 $0.37 7,262 $0.75 29,083 $0.59
Total........... 507,771 $0.92 14,194 $0.30 62,718 $0.59 111,923 $0.51

- ---------------
(1) Does not include materials and products processed by the Company for a fee
("tolling") and forward sales contracts without physical delivery.

Year Ended December 31, 1996 Compared to Year Ended December 31, 1995

Net Sales. Net sales decreased $59.1 million (or 7.9%) in 1996 to $688.9
million from $748.0 million in 1995. The lower sales revenues are principally
attributable to the influence of the primary aluminum market on fabricated
aluminum sales prices. Lower realized prices for the direct sheet and plate
shipments accounted for $56.8 million of 1996 revenue decline. Sheet and plate
direct shipments increased by 4.8 million pounds in 1996 to 442.8 million
pounds, while sheet and plate toll shipments decreased 18.7 million pounds to
105.7 million pounds. Revenue increases from the increased direct sheet and
plate shipments were offset by revenue decreases from the sheet and plate toll
shipments. Primary aluminum shipments increased 6.2 million pounds in 1996 to
193.4 million pounds. The additional volume increased net revenue by $4.4
million compared to 1995. No primary aluminum was tolled at Berkeley in 1996,
while in 1995, all of Berkeley's sales were through a tolling arrangement. Thus,
despite the drop in primary aluminum prices in 1996, the switch from toll to
direct at Berkeley caused the net revenues from primary aluminum to increase
$8.4 million over 1995 levels. Lower realized prices on sheet and plate toll
shipments and the loss of revenue due to the sale of the Bedford Facility (see
footnote 11 to the Consolidated Financial Statements) account for the remainder
of the revenue decreases.

Cost of Goods Sold. Total cost of goods sold were reduced by $11.2 million
to $643.2 million in 1996, primarily due to lower costs for purchased scrap
attributable to the influence of the primary aluminum market.

Gross Profit. As described above, lower net sales caused gross profit to
decrease $47.9 million in 1996. As a result, gross profit was 6.6% of net sales
in 1996 compared to 12.5% in 1995.

14
16

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased to $18.6 million in 1996 from $12.7 million in
1995. Contributing to this increase were additional costs Century experienced to
operate as a public company. In addition, during the fourth quarter of 1996, the
Company recorded charges of $2.7 million for certain environmental matters and
an increased provision for doubtful accounts.

Interest Expense. Interest expense decreased $1.8 million during 1996 to
$2.1 million from $3.9 million during 1995. This decrease was primarily due to
lower average borrowings outstanding during 1996.

Net Gain on Forward Contracts. During 1995, the Company entered into a
series of forward sales contracts which had the effect of offsetting the metal
it was obligated to acquire under a forward purchase contract entered into
during the year ended December 31, 1994. As a result, the Company recognized
gains of $9.6 million relating to these contracts in 1995. During 1996, the
Company had no similar transactions.

Income Taxes. The Company's income tax expense in 1996 was 35% of income
from continuing operations before income taxes, as compared to income tax
expense of 39% in 1995. The decrease in rates is caused by permanent differences
between recorded tax expense and statutory tax expense.

Income from Discontinued Operations. Prior to March 28, 1996, the Company
had holdings in a number of other entities in unrelated businesses that are
presented as discontinued operations. These discontinued operations were
distributed in the form of a pro rata redemption of shares on March 28, 1996.
Income in 1996 from discontinued operations decreased $5.5 million from the 1995
level due primarily to the inclusion of the discontinued operations for only
three months during 1996.

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994

Net Sales. Net sales increased $178.4 million (or 31.3%) in 1995 to $748.0
million from $569.6 million in 1994. The following are the principal reasons for
the increase. Higher realized prices for flat-rolled sheet and plate products
and primary aluminum increased sales by $175.6 million. Higher realized prices
for sheet and plate tolling and primary tolling increased sales by $28.1
million. Increased sheet and plate tolling shipments increased sales by $32.6
million and increased primary metal shipments increased sales by $8.5 million.
Lower direct sheet and plate shipments decreased sales by $65.5 million. Lower
primary tolling shipments decreased sales by $1.0 million. Average realized
sheet and plate prices for direct sales were 37.9% higher in 1995 as compared to
1994. Average realized primary aluminum prices for direct sales were 28.0%
higher in 1995 as compared to 1994. Tolling fees per pound of primary metal
increased by 38.2% in 1995 as compared to 1994. Sheet and plate toll shipments
increased by 110.2 million pounds in 1995, from 14.2 million pounds to 124.4
million pounds, and direct shipments decreased by 69.8 million pounds, from
507.8 million to 438.0 million, representing an increase of 7.7% for total sheet
and plate shipments, bringing sheet and plate shipments in 1995 to 562.4 million
pounds from 522.0 million pounds in 1994.

Cost of Goods Sold. Total cost of goods sold increased $85.6 million (or
15.0%) in 1995 to $654.4 million from $568.8 million in 1994. This increase was
due to higher volumes and increased net metal costs. Cost of goods sold as a
percentage of net sales, however, decreased to 87.5% from 99.9%, due to the
Company's ability to increase prices for its aluminum products.

Gross Profit (Loss). As a result of the changes in net sales and cost of
goods sold, gross profit increased $92.8 million in 1995 to $93.6 million from
$.8 million in 1994. Gross profit represented 12.5% of net sales in 1995
compared to .1% of net sales in 1994.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $1.1 million (or 9.5%) in 1995 to $12.7
million from $11.6 million in 1994. This increase was primarily due to expenses
incurred in connection with the $50 Million Receivables Financing Facility and
the $42 Million Revolving Credit Facility.

Interest Expense. Interest expense decreased $4.9 million in 1995 to $3.9
million from $8.8 million in 1994. This decrease was due to a reduction in
borrowings in 1995, partially offset by an increase in interest rates.

15
17

Other Income. Other income increased $1.1 million in 1995 to $1.5 million
from $.4 million in 1994. This increase was primarily due to a gain of $3.7
million realized on the sale of the Bedford Facility, partially offset by the
loss recognized on the sale of receivables.

Net Gain on Forward Contracts. During 1995, the Company entered into a
series of forward sales contracts which had the effect of offsetting the metal
it was obligated to acquire under a forward purchase contract entered into
during the year ended December 31, 1994. As a result, the Company recognized
gains of $9.6 million relating to these contracts in 1995. In 1994, the Company
entered into a purchase contract to cover a portion of its expected 1995 sheet
and plate sales. As a result, an $11.7 million gain was recorded in 1994.

Income Taxes. The Company's income tax expense in 1995 was 39% of income
from continuing operations before income taxes, as compared to an income tax
benefit of 22% in 1994. During 1994, an increase in the tax valuation allowance
resulted in the 1994 tax benefit being less than the tax benefit computed at the
statutory rates.

LIQUIDITY AND CAPITAL RESOURCES

Working capital amounted to $166.3 million and $151.3 million at December
31, 1996 and 1995, respectively. The Company's liquidity requirements arose
primarily from working capital requirements and capital investments.

The Company's statements of cash flows for the years indicated are
summarized below:

1996 1995 1994
-------- -------- --------
(DOLLARS IN THOUSANDS)

Net cash from (used in) operating activities....... $ 8,438 $ 81,878 $(25,178)
Net cash from (used in) investing activities....... (72,592) 49,077 (19,866)
Net cash from (used in) financing activities....... 21,356 (90,000) 40,000
-------- -------- --------
Increase (decrease) in cash........................ $(42,798) $ 40,955 $ (5,044)
======== ======== ========

Net cash flows from operating activities were $8.4 million and $81.9
million during 1996 and 1995, respectively. Lower net income and increased
pension contributions in 1996 caused the cash flow from operations to decrease
from the 1995 amount. Cash flow in 1995 benefited from net income and the sale
of accounts receivable, (See Footnote 4 to the Consolidated Financial
Statements) partially offset by an increased level of accounts receivable to
support the Company's growth in net sales. Cash used in operating activities in
1994 of $25.2 million was due to cash used to fund the Company's net losses and
cash used to fund the increased levels of inventories and accounts receivable
required to support the Company's growth in net sales.

The Company's investing activities included capital expenditures for
property, plant and equipment. In addition, investing activities included cash
used for the purchase of accounts receivable and cash used in entities in
unrelated businesses that are presented as discontinued operations. Capital
expenditures were $20.6 million, $13.2 million and $11.3 million for the years
ended December 31, 1996, 1995 and 1994, respectively. The Company used these
expenditures to purchase, modernize or upgrade production equipment, maintain
facilities and comply with environmental regulations. In 1996, the Company
purchased $50.0 million of its accounts receivable concurrent with the
refinancing of the Company's credit facilities. The cash invested in the
activities of the discontinued operations amounted to $0, $5.3 million and $8.6
million for the years ended December 31, 1996, 1995 and 1994, respectively. In
addition, the Company received in 1995, $60.0 million and $8.5 million for the
sale of Vialco assets and the Bedford Facility, respectively. Capital
expenditures for 1997 are expected to be approximately $40.0 million and will be
principally related to capacity expansion, upgraded production equipment,
maintenance of facilities and compliance with environmental requirements.

16
18

The Company contemplates spending approximately $174 million for capital
expenditures for projects between 1997 and 2001. Included in these expenditures
are plans to invest $28 million in a project that will double the heat-treated
plate production capacity.

Net cash flows from financing activities were $21.4 million and $40.0
million in 1996 and 1994, respectively. Net cash flows used in financing
activities were $90.0 million for 1995.

On January 30, 1996, Ravenswood, Berkeley and Bank of America Business
Credit, Inc ("Bank of America") entered into an agreement, as amended through
February 7, 1997, pursuant to which Bank of America is providing Ravenswood and
Berkeley a three-year, $150 million Bank Revolving Credit Facility ("Facility").
The interest rate is, at the Company's election, (i) the Bank of America base
rate plus .75% or (ii) the one-, two-, three- or six-month LIBOR plus 2.00%. The
interest rate margins of .75% and 2.00% may remain constant, or may be increased
by up to .50%, depending upon the attainment of certain financial ratios.
Borrowings of $24.4 million as of December 31, 1996 under the Facility are
collateralized by all of Ravenswood's and Berkeley's inventory and receivables
and are guaranteed by the Company.

Under the terms of the Facility, as amended, the Company is required to
meet certain financial covenants. Based on its current financial condition and
internal forecasts through the end of 1997, the Company believes that it will be
in compliance with all covenants.

Pursuant to the requirements of ERISA, the Company filed a notice with the
Pension Benefit Guaranty Corporation ("PBGC") relating to its initial public
offering and the resultant disaffiliation of Ravenswood from the Glencore Group.
After discussions with the PBGC, the Company entered into an agreement with the
PBGC (the "PBGC Agreement") on January 23, 1996, and made additional cash
contributions of $20.0 million to its pension plan for hourly employees in 1996.
The PBGC Agreement also provides for scheduled contributions to be made to the
Company's pension plan for hourly employees with respect to 1997, 1998 and 1999.
The Company estimates that these contributions will be approximately $6.0
million, $7.0 million and $7.0 million, respectively, above the minimum required
contribution under Section 412 of the Internal Revenue Code for such years. As
of December 31, 1996, the aggregate actuarial present value of accumulated
benefit obligations in both plans exceeded the value of plan assets by
approximately $45.6 million, as determined under Statement of Financial
Accounting Standards ("SFAS") No. 87. The Company has also granted to the PBGC a
first priority security interest in (i) the property, plant and equipment at its
Ravenswood facility and (ii) all of the outstanding shares of Berkeley. In
addition, Century must grant the PBGC a first priority security interest in the
first $50 million of the property, plant and equipment of any business or
businesses that the Company acquires. The Company, in its discretion, may,
however, substitute Berkeley's undivided interest in the Mt. Holly Facility in
lieu of any such after-acquired property, plant and equipment as well as the
shares of Berkeley. The PBGC Agreement will terminate if (a) the Company's
termination liabilities under ERISA for its two pension plans are less than
$10.0 million or (b) if, after December 31, 2000, the Company has made the
payments required by the PBGC Agreement and (i) the unsecured debt of the
Company is rated BBB- or better by Standard & Poor's and Baa3 or better by
Moody's, (ii) the Company has obtained certain agreed-upon private ratings on a
hypothetical issue of unsecured debt, or (iii) the Company meets certain
financial performance criteria.

The Company has provided a $27.5 million letter of credit to insure its
performance under the Owners Agreement governing the Mt. Holly Facility. The
Company's obligation to maintain the letter of credit will terminate at such
time as the Company achieves certain financial measurements.

The Company believes that cash flows from operations and funds available
under the Facility will be sufficient to fund its working capital requirements,
capital expenditures, pension funding and debt service requirements in the near
term and for the foreseeable future.

METALS RISK MANAGEMENT

Century produces primary aluminum products and manufactures aluminum sheet
and plate products and manages the risks of each accordingly. Commencing in
mid-1994, the Company implemented the metals risk management strategies set
forth below.

17
19

With respect to its primary aluminum products, the Company attempts to
assure itself a fixed margin over its primary aluminum production costs through
the use of forward sales contracts. With respect to its aluminum sheet and plate
sales, the Company attempts to assure itself a fixed margin over the market
price of primary aluminum and its other aluminum raw material costs through the
use of forward purchase contracts.

Pursuant to the foregoing strategy, the Company had fixed price commitments
to sell 407.6 million pounds and 226.2 million pounds of primary and scrap
aluminum and aluminum sheet and plate products at December 31, 1996 and December
31, 1995, respectively. Forward purchase contracts for approximately 27.9
million pounds and 40.0 million pounds of primary aluminum at December 31, 1996
and December 31, 1995, respectively, did not qualify for hedge accounting
treatment because the Company's aggregate metals position exceeded its
fixed-price sales commitments at such dates. Cost of goods sold includes either
a net credit or a net charge relating to the unrealized gains or losses on these
contracts that did not satisfy the technical requirements for hedge accounting,
realized gains or losses from the cash settlement of forward contracts,
unrealized losses on purchase and sales commitments, and reversals of prior
period unrealized losses. The resultant charges were $6.7 million and $0.9
million for the years ended December 31, 1996 and 1995, respectively. In
addition, as of December 31, 1996, the Company had entered into forward sales
contracts with Glencore Ltd. for 116 million pounds of primary aluminum to hedge
1997 and 1998 production. Accounting standards require that such contracts be
marked to market. As of December 31, 1996, the Company deferred unrealized
losses of $7.7 million on such contracts. As of December 31, 1995, the Company
had entered into forward sales contracts with Glencore Ltd. for 107 million
pounds of primary aluminum and deferred $0.3 million in unrealized gains on
these contracts. Effective January 1, 1996, these forward sales contracts were
closed and replaced with a sales contract with Glencore Ltd. pursuant to which
Glencore Ltd. agreed to purchase 114 million pounds of primary aluminum for
physical delivery during 1996.

During 1994, the Company entered into a forward purchase contract for 120
million pounds of primary aluminum with Glencore to cover a portion of its 1995
sheet and plate product sales. During the year ended December 31, 1995, the
Company entered into forward sales contracts with Glencore which had the effect
of offsetting the metal it was obligated to acquire under the forward purchase
contract. For the years ended December 31, 1995 and 1994, the Company recognized
net gains of $9.6 million and $11.7 million, respectively, related to these
contracts.

Although the Company has not materially participated in the purchase of
call options, in cases where Century sells forward primary aluminum, it may
purchase call options to preserve the opportunity to benefit from price
increases significantly above the forward sales prices. In addition, in cases
where the Company purchases forward primary aluminum, it may purchase put
options to preserve the opportunity to benefit from price decreases.

Century monitors its overall position, and its metals risk management
activities are subject to the management, control and direction of senior
management. These activities are regularly reported to the Board of Directors of
Century and, in the past, were subject to the review of the Glencore Group.
Prior to Century becoming a public company, substantially all of its forward
contracts were with Glencore Ltd., which did not require margin deposits. The
Company continues to conduct its metals risk management activities through the
Glencore Group and third parties, who do not require margin deposits.

ENVIRONMENTAL EXPENDITURES AND OTHER CONTINGENCIES

The Company has incurred and, in the future, will continue to incur capital
expenditures and operating expenses for matters relating to environmental
control, remediation, monitoring and compliance. Capital expenditures for
environmental control for the years ended December 31, 1996, 1995 and 1994 were
approximately $0.7 million, $2.2 million and $0.5 million, respectively, and
operating expenses relating to environmental matters were approximately $7.0
million, $8.3 million and $9.5 million for the same years. The Company has
planned environmental capital expenditures for the years ending December 31,
1997, 1998 and 1999 of approximately $5.2 million, $3.5 million and $2.0
million, respectively. In addition, the Company expects to incur expenses
relating to environmental matters of approximately $8.9 million, $9.6 million
and $9.7 million for the years ending December 31, 1997, 1998 and 1999,
respectively. The Company believes that

18
20

compliance with current environmental laws and regulations is not likely to have
a material adverse effect on the Company's financial condition, results of
operations or liquidity; however, environmental laws and regulations have
changed rapidly in recent years and the Company may become subject to more
stringent environmental laws and regulations in the future. In addition, the
Company may be required to conduct remediation activities in the future pursuant
to various orders issued by the EPA and DEP. There can be no assurance that
compliance with more stringent environmental laws and regulations that may be
enacted in the future, or future remediation costs, would not have a material
adverse effect on the Company's financial condition, results of operations or
liquidity. See Item 1 "Environmental Matters."

The Company is a defendant in several actions relating to various aspects
of its business. While it is impossible to predict the ultimate disposition of
any litigation, the Company does not believe that any of these lawsuits, either
individually or in the aggregate, will have a material adverse effect on the
Company's financial condition or liquidity, although it is possible that an
adverse outcome in the lawsuit by a proposed class of salaried employees and
retirees of Ravenswood could materially affect the results of operations in a
given period. See Item 3 "Legal Proceedings."

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL STATEMENTS

PAGE
-----

Independent Auditors' Report......................................................... 21
Consolidated Balance Sheets at December 31, 1996 and 1995............................ 22
Consolidated Statements of Operations for the Years Ended December 31, 1996, 1995 and
1994............................................................................... 23
Consolidated Statements of Shareholders' Equity (Deficiency) for the Years Ended
December 31, 1996, 1995 and 1994................................................... 24
Consolidated Statements of Cash Flows for the Years Ended December 31, 1996, 1995 and
1994............................................................................... 25
Notes to the Consolidated Financial Statements....................................... 26-45

19
21

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders of
Century Aluminum Company:

We have audited the accompanying consolidated balance sheets of Century
Aluminum Company and subsidiaries (the "Company") as of December 31, 1996 and
1995, and the related consolidated statements of operations, shareholders'
equity (deficiency) and cash flows for each of the three years in the period
ended December 31, 1996. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

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

In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Century Aluminum Company and
subsidiaries as of December 31, 1996 and 1995, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1996 in conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP

Pittsburgh, Pennsylvania
February 11, 1997

20
22

CENTURY ALUMINUM COMPANY

CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)

DECEMBER 31,
---------------------
1996 1995
-------- --------

ASSETS
CURRENT ASSETS:
Cash................................................................. $ 112 $ 42,910
Restricted cash equivalents.......................................... 5,801 6,585
Accounts receivable, trade -- net.................................... 89,283 58,595
Due from affiliates.................................................. 12,681 16,188
Inventories.......................................................... 176,149 159,856
Prepaids and other assets............................................ 3,172 1,290
-------- --------
Total current assets......................................... 287,198 285,424
PROPERTY, PLANT AND EQUIPMENT -- NET................................... 176,135 173,046
OTHER ASSETS........................................................... 10,398 7,379
NET ASSETS OF DISCONTINUED OPERATIONS.................................. -- 72,271
-------- --------
TOTAL........................................................ $473,731 $538,120
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable, trade.............................................. $ 31,341 $ 37,687
Due to affiliates.................................................... 22,666 14,721
Accrued and other current liabilities................................ 27,429 31,193
Accrued employee benefits costs -- current portion................... 39,491 50,499
-------- --------
Total current liabilities.................................... 120,927 134,100
-------- --------
REVOLVING TERM LOAN.................................................... 24,356 --
ACCRUED PENSION BENEFITS COSTS -- Less current portion................. 26,616 45,560
ACCRUED POSTRETIREMENT BENEFITS COSTS -- Less current portion.......... 112,551 106,002
OTHER LIABILITIES...................................................... 22,803 26,949
-------- --------
Total noncurrent liabilities................................. 186,326 178,511
-------- --------
CONTINGENCIES AND COMMITMENTS (NOTE 12)
SHAREHOLDERS' EQUITY:
Common Stock (one cent par value, 50,000,000 shares authorized,
20,000,000 and 23,120,000 shares outstanding at December 31, 1996
and 1995, respectively)........................................... 200 231
Additional paid-in capital........................................... 161,953 232,257
Retained earnings (deficit).......................................... 4,325 (6,979)
-------- --------
Total shareholders' equity................................... 166,478 225,509
-------- --------
TOTAL........................................................ $473,731 $538,120
======== ========

See notes to consolidated financial statements.

21
23

CENTURY ALUMINUM COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

YEAR ENDED DECEMBER 31,
--------------------------------
1996 1995 1994
-------- -------- --------

NET SALES:
Third-party customers...................................... $550,168 $610,722 $474,067
Related parties............................................ 138,711 137,260 95,558
-------- -------- --------
688,879 747,982 569,625
COST OF GOODS SOLD........................................... 643,156 654,385 568,810
-------- -------- --------
GROSS PROFIT................................................. 45,723 93,597 815
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES................. 18,614 12,729 11,647
-------- -------- --------
OPERATING INCOME (LOSS)...................................... 27,109 80,868 (10,832)
INTEREST EXPENSE -- Net:
Others..................................................... (2,058) (3,578) (6,620)
Affiliates................................................. -- (369) (2,158)
OTHER INCOME................................................. 91 1,472 361
NET GAIN ON FORWARD CONTRACTS................................ -- 9,616 11,668
-------- -------- --------
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME
TAXES...................................................... 25,142 88,009 (7,581)
INCOME TAX BENEFIT (EXPENSE)................................. (8,902) (34,502) 1,704
-------- -------- --------
INCOME (LOSS) FROM CONTINUING OPERATIONS..................... 16,240 53,507 (5,877)
INCOME FROM DISCONTINUED OPERATIONS -- Net of income taxes... 264 5,773 5,769
-------- -------- --------
NET INCOME (LOSS)............................................ $ 16,504 $ 59,280 $ (108)
======== ======== ========
EARNINGS (LOSS) PER COMMON SHARE AND COMMON SHARE EQUIVALENT:
Income (loss) from continuing operations................... $ 0.78 $ 2.31 $ (0.25)
Income from discontinued operations........................ .01 .25 .25
-------- -------- --------
Net income................................................. $ 0.79 $ 2.56 $ --
======== ======== ========
WEIGHTED AVERAGE COMMON SHARES AND COMMON SHARE
EQUIVALENTS................................................ 20,857 23,120 23,120
======== ======== ========
CASH DIVIDENDS DECLARED AND PAID PER COMMON SHARE............ $ 0.15 $ -- $ --
======== ======== ========

See notes to consolidated financial statements.

22
24

CENTURY ALUMINUM COMPANY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIENCY)
(DOLLARS IN THOUSANDS)

ADDITIONAL TOTAL
ADDITIONAL MINIMUM RETAINED SHAREHOLDERS'
COMMON PAID-IN PENSION EARNINGS EQUITY
STOCK CAPITAL LIABILITY (DEFICIT) (DEFICIENCY)
------ ---------- ---------- -------- -------------

BALANCE, DECEMBER 31, 1993.......... $231 $ 54,729 $ (4,079) $(66,151) $ (15,270)
Net loss.......................... (108) (108)
Reduction of additional minimum
pension liability.............. 3,959 3,959
Conversion of subordinated debt... 86,250 86,250
Capital contribution.............. 1,913 1,913
---- -------- ------- -------- --------

BALANCE, DECEMBER 31, 1994.......... 231 142,892 (120) (66,259) 76,744
Net income........................ 59,280 59,280
Reduction of additional minimum
pension liability.............. 120 120
Conversion of debt outstanding
under revolving credit
facility....................... 40,000 40,000
Contribution of Vialco net
assets......................... 48,915 48,915
Capital contribution.............. 450 450
---- -------- ------- -------- --------

BALANCE, DECEMBER 31, 1995.......... 231 232,257 (6,979) 225,509
Net income........................ 16,504 16,504
Dividends......................... (3,000) (3,000)
Special distribution of
discontinued operations........ (31) (70,304) -- (2,200) (72,535)
---- -------- ------- -------- --------

BALANCE, DECEMBER 31, 1996.......... $200 $ 161,953 $ -- $ 4,325 $ 166,478
==== ======== ======= ======== ========

See notes to consolidated financial statements.

23
25

CENTURY ALUMINUM COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)

YEAR ENDED DECEMBER 31,
------------------------------------
1996 1995 1994
--------- --------- --------

CASH FLOWS FROM (USED IN) OPERATIONS:
Net income (loss)...................................... $ 16,504 $ 59,280 $ (108)
Adjustments to reconcile net income (loss) to net cash
from (used in) operating activities:
Depreciation and amortization....................... 18,009 17,709 17,151
Deferred income tax................................. (7,921) 8,908 (2,901)
Pension and other postretirement benefits........... (23,932) (373) 10,366
Workers' compensation............................... 1,469 (1,003) 2,688
Gain on sale of facilities and equipment............ -- (3,744) --
Non-cash portion of net gain on forward contracts... -- -- (11,668)
Inventory market writedowns (reversals)............. 519 -- (39,000)
Income from discontinued operations................. (264) (5,773) (5,769)
Change in working capital items:
Accounts receivable, trade -- net:
Sale of receivables............................ -- 50,000 --
Other.......................................... 19,312 (22,336) (41,262)
Due from affiliates............................... 3,507 4,638 1,513
Inventories....................................... (16,812) 752 (17,034)
Prepaids and other assets......................... (1,882) (835) 400
Income taxes receivable........................... -- -- 2,970
Accounts payable, trade........................... (6,346) 7,442 9,706
Due to affiliates................................. 7,945 (25,300) 24,042
Accrued and other current liabilities............. (3,764) (10,804) 26,341
Other -- net........................................ 2,094 3,317 (2,613)
--------- --------- --------
Net cash from (used in) operating activities........... 8,438 81,878 (25,178)
--------- --------- --------
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Purchase of accounts receivables.................... (50,000) -- --
Purchase of property, plant and equipment........... (20,561) (13,229) (11,260)
Investment in Mt. Holly............................. (2,815) -- --
Proceeds from the sale of Vialco assets............. -- 60,000 --
Proceeds from the sale of Bedford facility.......... -- 8,500 --
Restricted cash deposits............................ 784 (935) --
Investment in discontinued operations............... -- (5,259) (8,606)
--------- --------- --------
Net cash from (used in) investing activities........... (72,592) 49,077 (19,866)
--------- --------- --------
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Borrowings.......................................... 200,833 42,000 81,000
Repayment of borrowings............................. (176,477) (132,000) (41,000)
Dividends........................................... (3,000) -- --
--------- --------- --------
Net cash from (used in) financing activities........... 21,356 (90,000) 40,000
--------- --------- --------
NET INCREASE (DECREASE) IN CASH.......................... (42,798) 40,955 (5,044)
CASH, BEGINNING OF YEAR.................................. 42,910 1,955 6,999
--------- --------- --------
CASH, END OF YEAR........................................ $ 112 $ 42,910 $ 1,955
========= ========= ========

See notes to consolidated financial statements.

24
26

CENTURY ALUMINUM COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Basis of Presentation -- Century Aluminum Company
("Century" or the "Company") is a holding company whose principal subsidiary is
Ravenswood Aluminum Corporation, which operates a primary aluminum reduction
facility and an aluminum fabrication facility in Ravenswood, West Virginia.
Ravenswood, through its wholly-owned subsidiary, Berkeley Aluminum, Inc.
("Berkeley"), holds a 26.67% interest in a partnership which operates a primary
aluminum reduction facility in Mt. Holly, South Carolina (the "Mt. Holly
Facility") and a 26.67% undivided interest in the property, plant and equipment
comprising the Mt. Holly Facility. As of December 31, 1996, the remaining
interest in the partnership and the remaining undivided interest in the Mt.
Holly Facility are owned 50.33% by Alumax of South Carolina, Inc. ("ASC") and
23.00% by a subsidiary of Sudelektra Holding AG, a publicly traded Swiss
company. Glencore International AG ("Glencore" and together with its
subsidiaries, the "Glencore Group") is a major shareholder of Sudelektra Holding
AG. ASC manages and operates the facility pursuant to an Owners Agreement,
prohibiting the disposal of the interest held by any of the owners without the
consent of the other owners and providing for certain rights of first refusal.
Pursuant to the Owners Agreement, each owner furnishes its own alumina, or
alumina owned by an affiliate, for conversion to aluminum and is responsible for
its pro rata share of the operating and conversion costs.

The Company produces primary aluminum products and manufactures aluminum
sheet and plate products.

As explained in Note 10, the Company had holdings in a number of other
entities in unrelated businesses that are presented as discontinued operations
because the Company made a special distribution, in the form of a pro rata
redemption of shares of its then current shareholders, comprised of these
holdings effective March 28, 1996. The disclosures herein relate to continuing
operations, unless otherwise indicated.

Prior to April 1996, the Company was an indirect, wholly-owned subsidiary
of Glencore. In April 1996, the Company completed an initial public offering of
its common stock. At December 31, 1996, the Glencore Group owned 39.6% of
Century's common shares outstanding.

Prior to 1996, Ravenswood and Berkeley operated as separate entities, under
the control of Glencore. As explained in Notes 4, 13 and 14, these two companies
have had significant related party transactions with Glencore Ltd. and its
affiliates. Glencore Ltd. is a U.S. branch of Glencore AG, which in turn, is
wholly-owned by Glencore.

On April 26, 1995, Glencore completed a restructuring of holdings within
its controlled group which resulted in the organization of the Company in its
present form. This restructuring has been accounted for as a transfer of
interests among companies under the common control of Glencore and, as a result,
the assets and liabilities of Ravenswood have been accounted for at historical
cost. The accompanying financial statements have been prepared on a consolidated
basis for all periods presented in a manner similar to that in pooling of
interests accounting. Transactions in the separate shareholders' equity accounts
of Ravenswood and Berkeley prior to completion of the restructuring are included
in additional paid-in capital of the Company.

Also on April 26, 1995, Berkeley and Virgin Islands Alumina Corporation
("Vialco"), whose principal asset was an inactive alumina refinery in the United
States Virgin Islands (see Note 11), became subsidiaries of Ravenswood.
Substantially all of Vialco's assets were sold to an unrelated buyer on July 24,
1995. The difference between the assets and liabilities of Vialco was recorded
as additional paid-in capital.

The Company's historical results of operations included in the accompanying
consolidated financial statements may not be indicative of the results of
operations to be expected in the future.

25
27

CENTURY ALUMINUM COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

Principles of Consolidation -- The consolidated financial statements
include the accounts of Century Aluminum Company and its subsidiaries, after
elimination of all significant intercompany transactions and accounts.
Berkeley's interest in the Mt. Holly partnership is accounted for under the
equity method. There are no material undistributed earnings in the Mt. Holly
partnership.

Revenue -- Revenue is recognized when title passes to customers in
accordance with contract terms, which may precede or coincide with shipments to
customers. Included in net sales are tolling fees which the Company earns from
smelting, casting and fabricating material supplied by third-party customers and
related parties. Net sales include tolling fees of $32,480, $132,017 and $66,314
for the years ended December 31, 1996, 1995 and 1994, respectively. Sales
returns and allowances are treated as a reduction of sales and are provided for
based on historical experience and current estimates.

Cash and Restricted Cash Equivalents -- Cash and restricted cash
equivalents are comprised of cash and short-term investments having maturities
of less than 90 days at the time of purchase. The carrying amount of cash and
restricted cash equivalents approximates fair value.

Accounts Receivable -- The accounts receivable, trade are net of an
allowance for uncollectible accounts of $1,700 and $700 at December 31, 1996 and
1995, respectively.

Inventories -- Alumina and aluminum inventories are stated at the
lower-of-cost (using the last-in, first-out ("LIFO") method) or market. The
remaining inventories (operating and other supplies) are valued at the lower of
average cost or market.

Property, Plant and Equipment -- Property, plant and equipment is stated at
cost. Additions, renewals and improvements are capitalized. Asset and
accumulated depreciation accounts are relieved for dispositions with resulting
gains or losses included in earnings. Maintenance and repairs are expensed as
incurred. Depreciation of plant and equipment is provided for by the
straight-line method over the following estimated useful lives:

Buildings and improvements.................................. 14 to 40 years
Machinery and equipment..................................... 5 to 22 years

During 1996, the Company adopted the provisions of Statement of Financial
Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." This standard,
among other things, requires entities to review long-lived assets for impairment
whenever events or changes in circumstances indicate that their carrying value
may not be recoverable. The adoption of this standard did not have a material
effect on the Company's financial position, results of operations or cash flows.

Other Assets -- Other assets consist primarily of the pension asset
recognized in accordance with SFAS No. 87, "Employers' Accounting for Pensions",
the Company's investment in the Mt. Holly partnership and deferred tax assets.

Income Taxes -- The Company accounts for income taxes using the liability
method, whereby deferred income taxes reflect the net tax effect of temporary
differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. In valuing
deferred tax assets, the Company uses judgment in considering the relative
impact of negative and positive evidence. The weight given to the potential
effect of negative and positive evidence is commensurate with the extent to
which it can be objectively verified. Based on the weight of evidence, both
negative and positive, including the lack of historical earnings, if it is more
likely than not that some portion or all of a deferred tax asset will not be
realized, a valuation allowance is established.

26
28

CENTURY ALUMINUM COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

Interest Expense -- Net -- The Company does not have significant interest
income. Interest incurred in the construction of qualifying assets is
capitalized as a component of the construction costs.

Postemployment Benefits -- The Company provides certain postemployment
benefits to former and inactive employees and their dependents during the period
following employment but before retirement. These benefits include salary
continuance, supplemental unemployment and disability healthcare. Postemployment
benefits are accounted for in accordance with SFAS No. 112, "Employers'
Accounting for Postemployment Benefits." The statement requires recognition of
the estimated future cost of providing postemployment benefits on an accrual
basis over the active service life of the employee.

Fixed-Price Commitments and Forward Contracts -- The Company has entered
into various fixed-price commitments to purchase alumina and primary aluminum
and to sell primary and scrap aluminum and aluminum sheet and plate products.
Unrealized losses (and recoveries of previously recognized unrealized losses) on
fixed-price commitments are recognized as adjustments to cost of goods sold in
the period in which they arise. Gains on such commitments are recognized when
the ultimate sale is completed or the Company receives a cash settlement payment
to cancel a commitment.

The Company also enters into forward contracts, principally with Glencore
Ltd., to hedge fixed-price purchase and sale commitments and inventory positions
("specific contracts") and to cover expected future sales and to otherwise
manage the Company's exposure to changing prices ("general contracts").
Unrealized gains and losses on those specific contracts that qualify for hedge
accounting are deferred and recognized as adjustments to the carrying value of
the item being hedged. Unrealized gains and losses on general contracts and
those specific contracts that do not satisfy the technical requirements for
hedge accounting are recognized in income in the period in which they arise.

Financial Instruments -- The Company's financial instruments (principally
receivables, payables, debt and certain forward contracts) are carried at
amounts which approximate fair value.

Concentration of Credit Risk -- Financial instruments, in addition to
forward contracts, which potentially expose the Company to concentrations of
credit risk, consist principally of cash investments and trade receivables. The
Company places its cash investments with highly-rated financial institutions. At
times, such investments may be in excess of the FDIC insurance limit.
Concentrations of credit risk with respect to trade receivables are limited due
to the large number of customers comprising the Company's customer base, and
their dispersion across many different geographical regions and markets. The
Company routinely assesses the financial strength of its customers but generally
does not require collateral to support trade receivables.

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

Share and Per Share Information -- Earnings (loss) per share amounts are
determined based on net income (loss) and the weighted average number of common
shares and common share equivalents outstanding during the period. Share and per
share information give retroactive effect to a 40,000 for 1 split of the
Company's common stock (see Note 7).

Stock-Based Compensation -- During 1996, the Company adopted the provisions
of SFAS No. 123, "Accounting for Stock-Based Compensation", but as permitted by
this pronouncement, the Company elected not to adopt the recognition provisions
for employee stock-based compensation. This standard, among other things,
defines a fair value based method of accounting for employee stock option and
similar plans and

27
29

CENTURY ALUMINUM COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

requires certain disclosures. Effective March 28, 1996, the Company adopted
certain stock and option plans. At December 31, 1995, the Company had no such
plans. (See Note 8.)

Reclassifications -- Certain reclassifications of 1995 and 1994 information
were made to conform to the 1996 presentation.

2. INVENTORIES

Inventories, at December 31, consist of the following:

1996 1995
-------- --------

Raw materials.......................................... $ 56,954 $ 49,087
Work-in-process........................................ 55,040 61,005
Finished goods......................................... 35,711 32,232
Operating and other supplies........................... 20,745 17,532
Unrealized losses on forward contracts................. 7,699 --
-------- --------
$176,149 $159,856
======== ========

At December 31, 1996 and 1995, approximately 88% and 89% of inventories
were valued at the lower of LIFO cost or market. Cost of goods sold was
increased by $519 for the year ended December 31, 1996, due to the reduction of
inventory carrying value to market. Cost of goods sold was reduced by $39,000
for the year ended December 31, 1994, due to the reversal of previous reductions
in inventory carrying value. The excess of the LIFO cost (or market, if lower)
of inventory over the first-in, first-out ("FIFO") cost was approximately
$20,368 and $16,365 at December 31, 1996 and 1995, respectively.

3. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment, at December 31, consists of the following:

1996 1995
-------- --------

Land and improvements.................................. $ 5,677 5,547
Buildings and improvements............................. 30,760 26,763
Machinery and equipment................................ 248,045 241,826
Construction in progress............................... 16,740 8,383
-------- --------
301,222 282,519
Less accumulated depreciation.......................... 125,087 109,473
-------- --------
$176,135 $173,046
======== ========

At December 31, 1996 and 1995, the cost of property, plant and equipment
includes $45,810 and $42,138, respectively, and accumulated depreciation
includes $16,676 and $14,935, respectively, representing the Company's undivided
interest in the primary aluminum reduction facility in Mt. Holly, South
Carolina.

The Company has various operating lease commitments through 2001 relating
to machinery and equipment. Expense under all operating leases was $1,717,
$1,609 and $1,984 for the years ended December 31, 1996, 1995 and 1994,
respectively.

Future minimum lease payments under noncancelable operating leases as of
December 31, 1996 are approximately $1,095 annually through 2001.

28
30

CENTURY ALUMINUM COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

4. DEBT

Bank Revolving Credit Facility -- On January 30, 1996, Ravenswood and
Berkeley entered into a Bank Revolving Credit Facility ("Facility") with Bank of
America Business Credit, Inc. ("Bank of America"). The Facility, as amended
through February 7, 1997, is for a three-year term and consists of revolving
loans and letters of credit made to each of Ravenswood and Berkeley of up to
$150,000 in the aggregate ($40,000 for letters of credit). The borrowing base
for purposes of determining availability under the Facility is based upon
certain eligible inventory and receivables. This facility replaced the Revolving
Credit Facility-Affiliate, the Term Loan Agreement and the Receivables Purchase
Agreement. The three replaced facilities were terminated on January 30, 1996.

Subject to certain limitations, the borrowers may select base rate or LIBOR
loans. The interest rate is (i) for base loans, .75% in excess of the base rate,
which is the rate publicly announced from time to time by Bank of America as its
reference rate, or (ii) for LIBOR loans, 2.00% in excess of the one-, two-,
three- or six-month LIBOR as quoted from time to time by Bank of America. The
interest rate margins of .75% and 2.00% may remain constant, or may be increased
by up to .50%, depending upon the attainment of certain financial ratios.
Interest is payable monthly on base rate loans and at the end of the applicable
interest period on LIBOR loans (quarterly on six-month LIBOR loans). The
interest rate on the borrowings under the Facility was 8.03% on December 31,
1996.

The loans are secured by a first priority security interest in all of
Ravenswood's and Berkeley's inventory, receivables, contract rights and general
intangibles.

The Company has paid commitment and closing fees in the aggregate amount of
$1,760 in connection with the Facility. Other fees include: (i) unused line and
administration fees, payable monthly, at the aggregate rate of .375% per annum,
on the difference between $150,000 and the amount actually borrowed (including
the undrawn amount of outstanding letters of credit), (ii) monthly letter of
credit fees which are equal to 1.75% per annum of the undrawn amount of each
outstanding letter of credit and (iii) if the Facility is terminated before
January 30, 1998, (other than by acceleration by Bank of America), an early
termination fee of $750, unless the revolving credit loans are refinanced with
Bank of America or any of its affiliates.

Century has guaranteed all obligations of Ravenswood and Berkeley under the
Facility. The guaranty is secured by all of Century's present and future
inventory and receivables.

The Facility provides for various restrictive covenants, including the
following: (i) standard restrictions on dispositions of property or assets
except in the ordinary course of business, (ii) restrictions on the incurrence
of indebtedness and liens and the making of capital expenditures and
investments, (iii) a prohibition on the payment of dividends except dividends up
to the lesser of $5,000 per year or 20 cents per issued share (payable quarterly
at 5 cents per share) provided that the availability under the Facility is at
least $20,000, (iv) restrictions on transactions with and payments to affiliates
and (v) maintenance of certain financial ratios.

The Facility provides customary events of default, including default upon
the nonpayment of principal, interest, fees or other amounts, the occurrence of
a change of control and a cross-default with respect to certain other
obligations of the Company.

Revolving Term Loan -- In 1989, Ravenswood entered into a revolving term
loan (the "Credit Agreement") with various financial institutions, which was
amended on June 26, 1992 and October 1, 1992, and extended on June 30, 1994,
March 31, 1995, April 28, 1995 and May 31, 1995. On June 7, 1995, this loan was
refinanced as discussed below. The Credit Agreement provided a maximum borrowing
facility of $90,000. Interest on the borrowings was payable monthly at a rate
determined by a formula.

29
31

CENTURY ALUMINUM COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

Refinancing of Revolving Term Loan -- On June 7, 1995, Ravenswood entered
into a $50,000 Receivables Purchase Agreement and a $42,000 Term Loan Agreement.
The proceeds were used to refinance the $90,000 outstanding under the Revolving
Term Loan with the remainder available for general corporate purposes. Following
this refinancing, the Credit Agreement was terminated.

Receivables Purchase Agreement -- Ravenswood, through a special purpose,
wholly-owned subsidiary, Ravenswood Receivable Corporation ("RRC"), entered into
the Receivables Purchase Agreement with Monte Rosa Capital Corporation ("Monte
Rosa"), an unaffiliated company, on June 7, 1995, as amended, on September 14,
1995. Monte Rosa agreed to purchase undivided percentage interests in
Ravenswood's receivables. The purchases of interests in the receivables by Monte
Rosa were made on a revolving basis subject to certain reserves, including
interest, loss and servicing fee reserves.

The principal amount of interests in receivables held by Monte Rosa could
not exceed $50,000 at any time, and the scheduled termination date of the
Receivables Purchase Agreement was May 31, 1998.

The receivables were sold at a discount, which considered interest (7.1% at
December 31, 1995) determined by a formula based on the Monte Rosa commercial
paper rate. The Receivables Purchase Agreement was non-recourse to Ravenswood
with respect to collectibility of the receivables purchased by Monte Rosa,
except for certain events for which Ravenswood provided indemnification.

As discussed under "Bank Revolving Credit Facility" above, on January 30,
1996, Monte Rosa's interest in the receivables was repurchased and this facility
was terminated.

Term Loan Agreement -- Ravenswood, at the time it entered into the
Receivables Purchase Agreement, also entered into a Term Loan Agreement, dated
as of June 7, 1995 and amended July 6, 1995 and September 5, 1995, with various
financial institutions. The Term Loan Agreement provided for a one-time term
loan drawdown of up to $42,000, which was borrowed on June 9, 1995. Glencore
guaranteed the borrowings under this Term Loan Agreement.

The interest rate was the one-, two-, three- or six-month LIBOR for the
applicable interest period, as selected by the Company, plus 2.5%. Interest was
payable at the earlier of the end of each interest period or quarterly in
arrears. Principal was due in six equal semi-annual installments of $7,000
beginning October 31, 1995.

The September 5, 1995 amendment to the Term Loan Agreement converted the
term loan into a revolving loan. A commitment fee, payable quarterly, was
charged at 1/2 of 1% per year on the average available commitment, as defined.
Ravenswood repaid the $42,000 outstanding balance on September 19, 1995. Amounts
available under the amended Term Loan Agreement were reduced as principal
amounts became due, and accordingly, the maximum borrowings available under the
amended facility at December 31, 1995 were $35,000.

As discussed under "Bank Revolving Credit Facility" above, on January 30,
1996, the Term Loan Agreement was terminated.

Revolving Credit Facility -- Affiliate -- On July 1, 1994, Ravenswood
entered into a revolving credit facility (the "Revolving Credit Facility") with
its parent, Glencore. The Revolving Credit Facility provided for maximum
borrowings of $40,000. Amounts outstanding under the Revolving Credit Facility
were subject to mandatory prepayment of the amounts by which weekly cash
balances at Ravenswood exceeded $2,000, with a scheduled maturity of June 30,
1995. Interest on the borrowings under the Revolving Credit Facility was payable
monthly at a rate determined by a formula.

30
32

CENTURY ALUMINUM COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

On March 1, 1995, the Board of Directors of Ravenswood agreed to accept an
offer from Glencore to convert the $40,000 principal amount then outstanding
under the Revolving Credit Facility into additional paid-in capital.

As required by the aforementioned Term Loan Agreement, on June 7, 1995
Glencore extended the term of the Revolving Credit Facility to May 1998. The
Revolving Credit Facility was subordinate to the Term Loan Agreement. As
discussed under "Bank Revolving Credit Facility" above, on January 30, 1996, the
Revolving Credit Facility -- Affiliate was terminated.

Subordinated Debt -- Affiliates -- Subordinated debt of $86,250 at December
31, 1993 was due to Ridgeway Commercial A.G. ("Ridgeway"), a subsidiary of
Glencore, under the terms of the Subordinated Loan Agreement ($46,250) as
amended on March 12, 1993 and the Second Subordinated Promissory Note ($40,000)
dated March 12, 1993 (the "Subordinated Debt Agreements"). Borrowings under the
Subordinated Loan Agreement and the Second Subordinated Promissory Note were
payable on June 30, 1994 with interest at 12% per annum.

On February 11, 1994, Ridgeway assigned its rights under the Subordinated
Debt Agreements to Glencore. Additionally, on February 14, 1994, the Board of
Directors of Ravenswood agreed to accept an offer from Glencore to convert the
$86,250 principal amount outstanding under the Subordinated Debt Agreements into
additional paid-in capital.

5. COMPOSITION OF CERTAIN BALANCE SHEET ACCOUNTS AT DECEMBER 31

1996 1995
------- -------

Accrued and Other Current Liabilities:
Income taxes..................................................... $12,421 $12,426
Salaries, wages and benefits..................................... 8,491 7,562
Other............................................................ 6,517 11,205
------- -------
$27,429 $31,193
======= =======
Accrued Employee Benefits Costs -- Current Portion:
Pensions......................................................... $26,770 $37,879
Postretirement benefits.......................................... 5,500 5,928
Employee benefits costs.......................................... 7,221 6,692
------- -------
$39,491 $50,499
======= =======
Other Liabilities:
Workers' compensation............................................ $21,521 $20,110
Postemployment benefits.......................................... 354 538
Net deferred tax liability (Note 9).............................. -- 6,007
Other............................................................ 928 294
------- -------
$22,803 $26,949
======= =======

The Company is self-insured for workers' compensation, except for certain
catastrophic coverage which is provided under State of West Virginia insurance
programs. Cash equivalents of $5,650 are restricted by the Company's
self-insurance arrangements. The liability for self-insured workers'
compensation claims has been

31
33

CENTURY ALUMINUM COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

discounted at 6% and 7% at December 31, 1996 and 1995, respectively. The
components of the liability for workers' compensation at December 31 are as
follows:

1996 1995
------- -------

Undiscounted liability................................... $40,592 $46,591
Less discount............................................ 13,113 20,581
------- -------
$27,479 $26,010
======= =======

6. PENSION AND OTHER POSTRETIREMENT BENEFITS

Pension Benefits

The Company maintains noncontributory defined benefit pension plans
covering substantially all of its employees. For salaried employees, plan
benefits are based primarily on years of service and average compensation during
the later years of employment. For hourly employees, plan benefits are based
primarily on a formula that provides a specific benefit for each year of
service. The Company's funding policy is to contribute annually an amount based
upon actuarial and economic assumptions designed to achieve adequate funding of
the projected benefit obligations and to meet the minimum funding requirements
of ERISA. Plan assets consist principally of U.S. equity securities,
international equity securities, growth funds and fixed income accounts. As
explained in Note 12, the Company agreed to make additional contributions to the
hourly plan in connection with the initial public offering of the Company's
common stock. In addition, the Company provides supplemental executive
retirement benefits for its executive officers.

Net periodic pension cost was comprised of the following elements:

YEAR ENDED DECEMBER 31,
----------------------------------------------------------------
1996 1995 1994
------------------- ------------------- ------------------
HOURLY SALARIED HOURLY SALARIED HOURLY SALARIED
PLAN PLAN PLAN PLAN PLANS PLAN
------- -------- ------- -------- ------ --------

Service cost................... $ 1,688 $ 909 $ 1,727 $ 786 $1,674 $ 882
Interest cost.................. 8,347 1,636 8,087 1,342 7,320 1,336
Actual return on plan assets... (7,888) (2,024) (6,257) (2,560) 49 29
Net amortization and
deferral..................... 5,968 1,603 6,570 2,337 324 (37)
------- ------- ------- ------- ------ ------
Net periodic pension cost...... $ 8,115 $ 2,124 $10,127 $ 1,905 $9,367 $2,210
======= ======= ======= ======= ====== ======

The following assumptions were used in the actuarial computations at
December 31:

1996 1995 1994
---- ---- ----

Discount rate......................................... 7.5% 7.5% 7.5%
Rate of increase in future compensation levels:
Hourly plan......................................... 5.0% 5.0% 5.0%
Salaried plan....................................... 4.5% 4.5% 4.5%
Long-term rate of return on plan assets............... 8.0% 8.0% 8.0%

32
34

CENTURY ALUMINUM COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

The funded status and amounts recognized in the consolidated balance sheets
as of December 31 are as follows:

1996 1995
--------------------- ---------------------
HOURLY SALARIED HOURLY SALARIED
PLAN PLAN PLAN PLAN
-------- -------- -------- --------

Actuarial present value of accumulated
benefit obligations:
Vested.................................. $116,526 $ 14,003 $111,003 $ 11,370
Nonvested............................... 1,167 226 776 287
-------- ------- -------- -------
Accumulated benefit obligation............ 117,693 14,229 111,779 11,657
Effect of projected compensation
increases............................... 306 8,910 254 7,370
-------- ------- -------- -------
Projected benefit obligation.............. 117,999 23,139 112,033 19,027
Plan assets at fair value................. 70,982 15,343 34,095 12,517
-------- ------- -------- -------
Projected benefit obligation in excess of
plan assets............................. 47,017 7,796 77,938 6,510
Unrecognized actuarial gain............... 1,335 3,969 1,335 5,112
Unrecognized prior service cost........... (5,836) (5,090) (8,137) (5,791)
Additional liability recognized........... 4,195 -- 6,547 --
-------- ------- -------- -------
Accrued pension benefits costs recognized
in consolidated balance sheets.......... $ 46,711 $ 6,675 $ 77,683 $ 5,831
======== ======= ======== =======

In accordance with the provisions of SFAS No. 87, the Company recorded an
additional minimum liability of $4,195 and $6,547 at December 31, 1996 and 1995,
respectively, representing the excess of unfunded accumulated benefit
obligations over previously recorded pension cost liabilities. These amounts
were offset by intangible pension assets of $4,195 and $6,547 (representing
unrecognized prior service cost).

The Company sponsors a tax-deferred savings plan under which eligible
employees may elect to contribute specified percentages of their compensation.
The Company has provided matching contributions equal to 30% of the first 6% of
a participant's annual compensation contributed to the savings plan. From
September 1, 1993 to January 31, 1995, the Company suspended the contribution
matching provision. Effective February 1, 1995, the contribution matching
provision was reinstated and increased to 50% of the first 6% of a participant's
annual compensation contributed to the savings plan. Effective July 1, 1996 the
contribution matching provision was increased to 60% of the first 6% of a
participant's annual compensation contributed to the savings plan. One half of
the Company's contribution is invested in the common stock of Century and one
half of the Company's contribution is in cash. Company contributions to the
savings plan were $661, $488 and $0 for the years ended December 31, 1996, 1995
and 1994, respectively.

Other Postretirement Benefits

In addition to providing pension benefits, the Company provides certain
healthcare and life insurance benefits for substantially all retired employees.
The Company accounts for these plans in accordance with SFAS No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions." SFAS
No. 106 requires the Company to accrue the estimated cost of providing
postretirement benefits during the working careers of those employees who could
become eligible for such benefits when they retire. The Company funds these
benefits as claims are submitted by the retirees.

33
35

CENTURY ALUMINUM COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

The components of net periodic postretirement benefit cost are as follows:

YEAR ENDED DECEMBER 31,
-------------------------------
1996 1995 1994
------- ------- -------

Service cost.......................................... $ 2,521 $ 2,313 $ 2,319
Interest cost......................................... 9,212 9,116 9,538
Net amortization and deferral......................... (95) 373 2,497
------- ------- -------
Net periodic postretirement benefit cost.............. $11,638 $11,802 $14,354
======= ======= =======

The following assumptions were used in the actuarial computations as of
December 31:

1996 1995 1994
---- ---- ----

Discount rate................................................. 7.5% 7.5% 7.5%
Expected rates of increase in future medical costs............ 6.0% 6.0% 6.0%

An additional one-percentage-point increase in the assumed rate of
inflation in future medical costs would increase the accumulated postretirement
benefit obligation at December 31, 1996 by $18,234 and would increase aggregate
1996 service and interest cost by $2,039.

The accrued postretirement benefits costs recorded in the consolidated
balance sheets as of December 31 include the following components:

1996 1995
-------- --------

Accumulated postretirement benefit obligation:
Retirees..................................................... $ 51,352 $ 44,016
Fully eligible active participants........................... 45,522 53,363
Other active participants.................................... 29,643 30,654
-------- --------
Accumulated postretirement benefit obligation (unfunded)....... 126,517 128,033
Unrecognized actuarial loss.................................... (9,964) (17,828)
Unrecognized plan amendment credit............................. 1,498 1,650
Unrecognized transition obligation............................. -- --
-------- --------
Accrued postretirement benefits costs recognized in
consolidated balance sheets.................................. $118,051 $111,855
======== ========

7. SHAREHOLDERS' EQUITY

Common Stock -- On February 19, 1996, the Board of Directors approved a
40,000 for 1 split of the Company's common stock.

Preferred Stock -- Under the Company's Restated Certificate of
Incorporation, the Board of Directors is authorized to issue up to 5,000,000
shares of preferred stock, with a par value of one cent per share, in one or
more series. The authorized but unissued preferred shares may be issued with
such dividend rates, conversion privileges, voting rights, redemption prices and
liquidation preferences as the Board of Directors may determine, without action
by shareholders.

Additional Paid-In Capital -- Amounts shown as capital contributions
include $450 (net of income taxes of $300) in each of the years ended December
31, 1995 and 1994, representing the allocation of certain corporate expenses of
Glencore AG. The remaining capital contributions in the year ended December 31,
1994 represent the forgiveness of trade accounts payable to Glencore Ltd.

34
36

CENTURY ALUMINUM COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

8. STOCK BASED COMPENSATION

1996 Stock Incentive Plan -- The Company adopted the 1996 Stock Incentive
Plan (the "Stock Incentive Plan") for the purpose of awarding performance share
units and granting qualified incentive stock options and nonqualified stock
options to salaried officers and other key employees of the Company. The Stock
Incentive Plan has a term of ten years from its effective date. The number of
shares available under the Stock Incentive Plan is 1,200,000. Granted stock
options vest one-third on the grant date and an additional one-third on each of
the first and second anniversary dates. The Company awarded 460,000 performance
share units at the time of the initial public offering for no consideration. The
performance share units represent the right to receive common stock, on a
one-for-one basis on their vesting dates. The value of the performance share
units, $13 per share, is being charged to compensation expense on a straight
line basis over their five year vesting period, which is one-third at the end of
each of the third, fourth and fifth anniversary dates. The performance share
units do not affect the issued and outstanding shares of common stock until
conversion at the end of the vesting periods. However, the performance share
units are considered common stock equivalents and therefore are included, using
the treasury stock method, in average common shares outstanding for earnings per
share computations.

The Company applies APB Opinion 25 and related interpretations in
accounting for the 1996 Stock Incentive Plan. Accordingly, no compensation cost
has been recognized for the stock option portions of the plan. Had compensation
cost for the Stock Incentive Plan been determined based on the fair value at the
grant dates for awards under the plan consistent with the method of SFAS No.
123, the Company's net income and earnings per share would have been reduced to
the pro forma amounts indicated below:

1996
-------

Net income As Reported............................... $16,504
Pro Forma................................. $16,176
Primary earnings per share As Reported............................... $ 0.79
Pro Forma................................. $ 0.78

A summary of the status of the Company's Stock Incentive Plan as of
December 31, 1996 and changes during the year ended on that date is presented
below:

WEIGHTED-AVERAGE
OPTIONS SHARES EXERCISE PRICE
--------------------------------------------------- ------- ----------------

Outstanding at beginning of year................... --
Granted............................................ 488,000 $13.06
Exercised.......................................... --
Forfeited.......................................... --
Outstanding at end of year......................... 488,000 $13.06
======= ======
Weighted-average fair value per option granted
during the year.................................. $ 3.25

The following table summarizes information about fixed stock options
outstanding at December 31, 1996:

OPTIONS OUTSTANDING OPTIONS EXERCISABLE
- ----------------------------------------------------------------------------- -----------------------------
NUMBER WEIGHTED-AVG WEIGHTED-AVG NUMBER WEIGHTED-AVG
RANGE OF OUTSTANDING REMAINING EXERCISE EXERCISABLE EXERCISE
EXERCISE PRICES AT 12/31/96 CONTRACTUAL LIFE PRICE AT 12/31/96 PRICE
- -------------------------- ----------- ---------------- ------------ ----------- -------------

$13.00 to $15.75.......... 488,000 9.3 years $13.06 162,666 $ 13.06

The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option-pricing model with the following weighted-average
assumptions used for grants in 1996: dividends of $0.05 per quarter; expected
volatility of 30%, risk-free interest rate of 5.92%, and expected lives of 3
years.

35
37

CENTURY ALUMINUM COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

Non-Employee Directors Stock Option Plan -- The Company adopted a
non-employee directors stock option plan for the purpose of granting
non-qualified stock options to non-employee directors. The number of shares
available under this plan is 200,000, of which 55,000 have been awarded. The
non-qualified options vest one-third on the grant date and an additional
one-third on each of the first and second anniversary dates. Each option granted
under this plan will be exercisable for a period of ten years from the date of
grant. The expenses associated with this plan do not have a material effect on
the Company's financial position, results of operations or cash flows.

9. INCOME TAXES

Significant components of the income tax (expense) benefit from continuing
operations consist of the following:

YEAR ENDED DECEMBER 31,
---------------------------------
1996 1995 1994
-------- -------- -------

Federal:
Current (expense) benefit................. $(14,628) $(19,924) $(1,064)
Deferred (expense) benefit................ 7,002 (7,809) 2,680
State:
Current (expense) benefit................. (2,195) (5,670) (133)
Deferred (expense) benefit................ 919 (1,099) 221
-------- -------- -------
Total income tax (expense) benefit........ $( 8,902) $(34,502) $ 1,704
======== ======== =======

A reconciliation of the statutory U.S. Federal income tax rate to the
effective income tax rate on income or loss from continuing operations is as
follows:

1996 1995 1994
---- ---- ----

Federal statutory rate.......................................... 35% 35% 35%
Effect of:
Permanent differences......................................... (3) -- --
State taxes, net of Federal benefit........................... 3 5 1
Valuation allowance........................................... -- (5) (14)
Other...................................................... -- 4 --
-- -- --
35% 39% 22%
== == ==

36
38

CENTURY ALUMINUM COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

Significant components of the Company's deferred tax assets and liabilities
as of December 31 are as follows:

1996 1995
-------- --------

FEDERAL
Deferred Federal tax assets:
Accrued postretirement benefits cost......................... $ 24,261 $ 18,072
Accrued liabilities.......................................... 13,154 13,784
Other........................................................ -- 84
-------- --------
Net deferred Federal tax assets........................... 37,415 31,940
Deferred Federal tax liabilities:
Tax over financial statement depreciation.................... (35,671) (34,647)
Other........................................................ -- (2,551)
-------- --------
Net deferred Federal tax asset (liability)................ 1,744 (5,258)
-------- --------

STATE
Deferred state tax assets:
Accrued postretirement benefits cost......................... 3,466 2,582
Accrued liabilities.......................................... 1,821 1,970
Other........................................................ -- 12
-------- --------
Net deferred state tax assets............................. 5,287 4,564
Deferred state tax liabilities:
Tax over financial statement depreciation.................... (5,117) (4,949)
Other........................................................ -- (364)
-------- --------
Net deferred state tax asset (liability).................. 170 (749)
-------- --------
Net deferred tax asset (liability)............................. $ 1,914 $ (6,007)
======== ========

The net deferred tax asset at December 31, 1996 is included in other
assets. The net deferred tax liability at December 31, 1995 is included in other
liabilities.

Prior to the April 26, 1995 restructuring of holdings within the Glencore
control group, Ravenswood and Century filed separate Federal income tax returns.
Subsequent to the restructuring, Ravenswood was included in the Federal
consolidated tax return of Century. The restructuring did not constitute a
change in ownership as defined by Section 382 of the Internal Revenue Code ("IRC
382") because the ultimate parent company did not change.

Subsequent to the initial public offering, Century filed as a consolidated
stand alone group. The initial public offering was considered a change in
ownership under the requirements of IRC 382.

The Company entered into a tax sharing agreement with those companies
comprising the discontinued operations (see Note 10) and the selling
shareholders in the initial public offering of the Company's common stock. Under
the tax sharing agreements, subject to the provisions described below, the
Company will be responsible for filing all tax returns and paying all taxes
relating to the businesses and assets of those companies comprising the
discontinued operations to the applicable taxing authority for periods during
which such companies are included in the consolidated tax returns of the
Company. In general, the tax sharing agreement establishes that those companies
comprising the discontinued operations shall be responsible for remitting to the
Company the amount of tax liabilities relating to the discontinued operations
for the periods in

37
39

CENTURY ALUMINUM COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

which such companies are included in the consolidated tax returns of the
Company, and further provides that any deficiencies shall be the responsibility
of, and any refunds shall be the benefit of, those companies comprising the
discontinued operations.

10. DISCONTINUED OPERATIONS

The Company made a special distribution of certain holdings of the Company
in the form of a pro rata redemption of shares of its then current shareholders
on March 28, 1996. The special distribution was comprised of the Company's
holdings in several operations whose businesses were unrelated to the continuing
aluminum operations of the Company, consisting principally of an inactive oil
trading business, a distributor of ferro alloys and a finance business, whose
principal activities consisted of providing financing to entities within the
Glencore group of companies. The net assets and operating activities related to
the businesses comprising the special distribution have been classified as
discontinued operations in the accompanying consolidated financial statements.

Summary operating results of discontinued operations are as follows:

YEAR ENDED DECEMBER 31,
---------------------------------
1996 1995 1994
------- -------- --------

Net sales........................................... $31,065 $188,122 $136,995
======= ======== ========
Income before income taxes.......................... $ 433 $ 11,531 $ 8,243
Income tax expense.................................. (169) (5,758) (2,474)
------- -------- --------
Income from discontinued operations................. $ 264 $ 5,773 $ 5,769
======= ======== ========

Net assets of discontinued operations as of December 31, 1995 consist of
the following:

Current assets............................................................ $135,647
Property, plant and equipment and other assets............................ 197
--------
Total assets.................................................... 135,844
--------
Current liabilities....................................................... 62,773
Other liabilities......................................................... 800
--------
Total liabilities............................................... 63,573
--------
Net assets of discontinued operations........................... $ 72,271
========

Current assets of discontinued operations include $84,090 of receivables
from related parties at December 31, 1995. Current liabilities include $37,923
of payables to related parties at December 31, 1995.

11. SALE OF ASSETS AND BUSINESSES

VIALCO -- On April 26, 1995, Vialco became a subsidiary of Ravenswood with
assets of $60,000 together with $11,085 of liabilities and $48,915 of additional
paid-in capital recorded on such date. On July 24, 1995, the Company completed
the sale for gross proceeds of $60,000, to an unrelated buyer, of the production
assets and inventories of the Vialco facility, which had been idle since January
1995. There was no gain or loss on the sale. Concurrently with the sale, the
Company entered into a long-term alumina supply agreement with the buyer and an
affiliate of the buyer, as described in Note 13. Management has determined that
the alumina purchase prices in the agreement approximate market prices. Under
the terms of the sale, the buyer did not assume certain of Vialco's liabilities.
(See Note 12 for a discussion of certain contingencies relating to Vialco.)

38
40

CENTURY ALUMINUM COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

THE BEDFORD FACILITY -- On September 29, 1995, the Company sold its Bedford
facility in Bedford, Indiana for $8,500 and realized a gain of $3,744, which is
included in other income for the year ended December 31, 1995. The net assets
and the operating results of this facility, which are included in the
accompanying financial statements to the date of sale, are not material.

12. CONTINGENCIES AND COMMITMENTS

Environmental Contingencies

The Company's operations are subject to various environmental laws and
regulations. The Company has spent, and expects to spend in the future,
significant amounts for compliance with those laws and regulations.

Pursuant to an order issued in September 1994 under Section 3008(h) (the
"3008(h) order") of the Resource Conservation and Recovery Act ("RCRA"),
Ravenswood is performing remediation measures at a former oil pond area and in
connection with cyanide contamination in the groundwater, and is conducting a
RCRA facility investigation ("RFI") and a corrective measures study ("CMS") to
evaluate and develop corrective alternatives for any other areas that have
contamination exceeding certain levels. The Company has completed initial
sampling and analysis and has submitted its initial findings to the
Environmental Protection Agency ("EPA"). The Company will conduct further field
work in mid 1997. The Company anticipates that the RFI will not be completed
before late 1997. Once the RFI and CMS are complete, the EPA will assess the
need for clean-up, and if any clean-up is required, a subsequent order will be
issued. At this time, the Company is unable to determine the extent of clean-up
measures, if any, that may be required. However, the Company is aware of some
environmental contamination at Ravenswood, and it is likely that clean-up
activities will be required in at least some areas of the facility. The Company
believes a significant portion of this contamination is attributable to the
operations of a prior owner and will be the financial responsibility of that
owner, as discussed below.

Prior to the Company's acquisition of the Ravenswood facility, Kaiser
Aluminum & Chemical Corporation ("Kaiser") owned and operated the facility for
approximately thirty years. Many of the conditions which the Company is required
to investigate under the 3008(h) order arise out of activities which occurred
during Kaiser's ownership and operation, and, with respect to those conditions,
Kaiser will be responsible for the costs of the RFI and required cleanup under
the terms of the purchase agreement ("Kaiser Purchase Agreement"). In addition,
Kaiser retained title to certain land within the Ravenswood premises and retains
full responsibility for those areas. Under current environmental laws and
regulations, the Company may be required to remediate any contamination
discovered during or after completion of the RFI, which contamination was
discharged from areas which Kaiser previously owned or operated, or for which
Kaiser has retained ownership or responsibility. However, if such remediation is
required, the Company believes Kaiser will be liable for some or all of the
costs thereof pursuant to the Kaiser Purchase Agreement.

39
41

CENTURY ALUMINUM COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

sale of the Vialco facility to St. Croix Alumina, L.L.C. ("St. Croix Alumina"),
a subsidiary of Alcoa Alumina and Chemicals L.L.C., the Company has retained
liability for environmental conditions existing at the time of sale only to the
extent such conditions require remedial action, or give rise to claims, under
laws in effect at the time of sale. The Company will not have liability if
remediation is required or claims are made due to changes in law after the time
of sale. The Company has agreed to indemnify St. Croix Alumina against claims
arising from environmental conditions for which the Company has retained
liability. The indemnity is capped at $18,000, and any claims under the
indemnity must be brought by July 24, 2001. Management of the Company does not
believe that the ultimate amount of the retained liability, if any, will have a
material adverse effect on the Company's financial condition, results of
operations or liquidity.

It is the Company's policy to accrue for costs associated with
environmental assessments and remedial efforts when it becomes probable that a
liability has been incurred and the costs can be reasonably estimated. The
aggregate environmental related accrued liabilities were $800 and $2,294 at
December 31, 1996 and 1995, respectively. All accruals have been recorded
without giving effect to any possible future insurance or Kaiser indemnity
proceeds. With respect to ongoing environmental compliance costs, including
maintenance and monitoring, such costs are expensed as incurred.

Because of the issues and uncertainties concerning the extent of required
cleanup, the complexity of applicable government laws and regulations and their
interpretation, the varying costs and effectiveness of alternative cleanup
technologies and methods, and the uncertain level of recoveries from insurance,
the Kaiser indemnity or other types of recovery, there can be no assurance that
future capital expenditures and costs for environmental compliance will not have
a material adverse effect on the Company's future financial condition, results
of operations or liquidity. Based upon all available information and after
consultation with counsel, management does not believe that the outcome of these
environmental matters will have a material adverse effect on the Company's
financial condition, results of operations or liquidity.

Legal Contingencies

On February 14, 1995, a suit was brought in the Territorial Court in St.
Croix, U.S. Virgin Islands against Vialco, Bechtel Corporation and Mitsubishi
Heavy Industries, Ltd. by three plaintiffs, purportedly on behalf of a class
consisting of more than 1,000 persons. The proposed class is comprised of
residents of Harvey Project, Bethlehem Village, and Estate Profit (residential
areas in the vicinity of the Vialco facility) who claim personal injury,
property damage and nuisance from pollutants, toxins, dusts, and deleterious
fumes, mists, vapors, particulates and/or gases allegedly discharged into the
atmosphere since Vialco restarted operations at the Vialco facility in 1989.
Plaintiffs also sought a monetary award in an unspecified amount which would
create a fund to cover the costs of permanent medical monitoring for members of
the proposed plaintiff class. Without admitting to any liability, and in order
to put an end to growing defense costs and protracted litigation, Vialco and the
plaintiffs have recently agreed to settle this case, subject to Court approval.
The Company accrued the expense of settlement in 1996.

40
42

CENTURY ALUMINUM COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

defense and liability, subject to a reservation of rights against Ravenswood in
the event that a plaintiff is shown to have worked at the Ravenswood facility
after the time Ravenswood purchased the facility from Kaiser. The Company
believes it is unlikely that existing or potential plaintiffs were exposed to
asbestos at the Ravenswood facility after Ravenswood purchased the facility from
Kaiser, although eight plaintiffs have claimed they were exposed during this
period of time. Therefore, while the impact of the asbestos proceedings is
impossible to predict, the Company believes it has meritorious defenses to the
actions and that the ultimate resolution will not have a material adverse effect
on the Company's financial condition, results of operations or liquidity.

In August 1994, Ravenswood received a Civil Investigative Demand ("CID")
from the Antitrust Division of the U.S. Department of Justice (the "Antitrust
Division") in connection with an investigation by the Antitrust Division to
determine whether there had been or was an unlawful agreement to restrict the
production of primary aluminum. The CID demanded that Ravenswood submit certain
documents and information to the Antitrust Division. Ravenswood complied with
the CID and has not received any further requests from the Antitrust Division.

The Company has pending against it or may be subject to various other
lawsuits, claims and proceedings related primarily to employment, commercial,
environmental and safety and health matters. Although it is not presently
possible to determine the outcome of these matters, management believes their
ultimate disposition will not have a material adverse effect on the Company's
financial condition, results of operations or liquidity.

Commitments

The Company and a public utility have signed a power supply agreement,
covering the period from July 1, 1996 through July 31, 2003. This agreement
replaces a power supply agreement with the same utility that was due to expire
in 1998. Billings, under the old agreement, were computed using a formula based
principally upon the utility's operating costs. Such billings were decreased if
the London Metals Exchange ("LME") primary ingot price was less than certain
specified levels, and increased, limited to the extent of cumulative net
decreases, if the LME primary ingot price was greater than certain specified
levels. Under the new agreement, the Company will pay a fixed price for
electricity used. However, for the period from July 1, 1996 through July 31,
1998, if the LME primary ingot price were to exceed certain specified levels,
the price for electricity used would increase, to the extent of cumulative net
price decreases under the previous contract with the same utility. The Public
Utilities Commission of Ohio has approved the agreement.

On January 23, 1996, the Company and the Pension Benefit Guaranty
Corporation ("PBGC") entered into an agreement (the "PBGC Agreement") which
provided that the Company make a cash contribution of $12,500 to its pension
plan for hourly employees upon consummation of its initial public offering and
an additional $7,500 in 1996. The Company made the contributions in the second
quarter of 1996. The PBGC Agreement also provides for scheduled contributions to
be made to the Company's pension plan for hourly employees with respect to 1997,
1998 and 1999. The Company estimates that these contributions will be

41
43

CENTURY ALUMINUM COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

approximately $6,000, $7,000 and $7,000, respectively, above the minimum
required contributions under Section 412 of the Internal Revenue Code for such
years. The Company has granted the PBGC a first priority security interest in
(i) the property, plant and equipment at its Ravenswood facility and (ii) all of
the outstanding shares of Berkeley. In addition, Century must grant the PBGC a
first priority security interest in the first $50,000 of the property, plant and
equipment of any business or businesses that the Company acquires after the
consummation of the offering. The Company, in its discretion, may, however,
substitute Berkeley's undivided interest in the Mt. Holly Facility in lieu of
any such after-acquired property, plant and equipment as well as the shares of
Berkeley.

During 1992, the Company established a progress sharing plan (the "Plan")
for eligible union employees. Under the terms of the Plan, the Company created a
progress sharing pool, defined as 10% of Ravenswood's pre-Plan, after-tax income
(as defined) of each Plan year through 1997 when the Plan terminates. Accrued
and other current liabilities as of December 31, 1996 and December 31, 1995
include an accrual for the 1996 and 1995 progress sharing pools.

The Company has provided a $27,500 letter of credit to ensure its
performance under the Owners Agreement governing the Mt. Holly facility. The
Company's obligation to maintain the letter of credit will terminate at such
time as the Company achieves certain financial measurements.

See Note 13 for a discussion of the Company's fixed-price commitments and
forward contracts.

13. FIXED-PRICE COMMITMENTS AND FORWARD CONTRACTS

The Company produces primary aluminum products and manufactures aluminum
sheet and plate products and manages the risks of each accordingly. Commencing
in mid-1994, the Company implemented the metal risk management strategies set
forth below.

With respect to its primary aluminum products, the Company attempts to
assure itself a fixed margin over its primary aluminum production costs through
the use of forward sales contracts. With respect to its aluminum sheet and plate
sales, the Company attempts to assure itself a fixed margin over the market
price of primary aluminum and its aluminum raw material costs through the use of
forward purchase contracts.

Pursuant to the foregoing strategy, the Company had fixed price commitments
to sell 407.6 million pounds and 226.2 million pounds of primary and scrap
aluminum and aluminum sheet and plate products at December 31, 1996 and December
31, 1995, respectively. Forward purchase contracts for approximately 27.9
million pounds and 40.0 million pounds of primary aluminum at December 31, 1996
and December 31, 1995, respectively, did not qualify for hedge accounting
treatment because the Company's aggregate metals position exceeded its
fixed-price sales commitments at such dates. Cost of goods sold includes either
a net credit or a net charge relating to the unrealized gains or losses on these
contracts that did not satisfy the technical requirements for hedge accounting,
realized gains or losses from the cash settlement of forward contracts,
unrealized losses on purchase and sales commitments and reversals of prior
period unrealized losses. The resultant charges were $6,670 and $898 for the
years ended December 31, 1996 and 1995, respectively. In addition, during 1996,
the Company entered into forward sales contracts with Glencore Ltd. for 116
million pounds of primary aluminum to hedge 1997 and 1998 production. Accounting
standards require that such contracts be marked to market. As of December 31,
1996, the Company deferred unrealized losses of $7,699 on such contracts. As of
December 31, 1995, the Company had entered into forward sales contracts with
Glencore, Ltd. for 107 million pounds of primary aluminum and deferred $343 in
unrealized gains on these contracts. Effective January 1, 1996, these forward
sales contracts were closed and replaced with a sales contract with Glencore
Ltd. pursuant to which Glencore Ltd. agreed to purchase 114 million pounds of
primary aluminum for physical delivery during 1996.

42
44

CENTURY ALUMINUM COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

During 1994, the Company entered into a forward purchase contract for 120
million pounds of primary aluminum with Glencore to cover a portion of its 1995
sheet and plate product sales. During the year ended December 31, 1995, the
Company entered into forward sales contracts with Glencore which had the effect
of offsetting the metal it was obligated to acquire under the forward purchase
contract. For the year ended December 31, 1995 and 1994, the Company recognized
net gains of $9,616 and $11,668, respectively, related to these contracts.

Concurrent with the sale of Vialco (see Note 11), the Company entered into
a long-term supply agreement for 936 million pounds of alumina annually,
beginning January 1, 1996. Century will pay a fixed price for alumina with fixed
annual price increases of approximately 2.5% through 2001. Pricing for the years
2002 through 2006 will be subject to agreement between the parties.

14. RELATED PARTY TRANSACTIONS

The related party transactions occurring during the years ended December
31, 1996, 1995 and 1994, and not discussed elsewhere in the notes to the
consolidated financial statements, are described below.

Related Party Transactions -- Century

During the year ended and at December 31, 1996, the Chairman of the Board
of Directors of Century was a member of the Board of Directors of Glencore
International AG. Prior to March 28, 1996, he was also an officer of Glencore.
In addition, during the year ended and at December 31, 1996, one of Century's
Board members was employed by Glencore International AG.

Related Party Transactions -- Ravenswood

During the years ended December 31, 1996, 1995 and 1994, Ravenswood
purchased alumina and bought and sold primary and scrap aluminum in transactions
with Glencore Ltd. at prices which management believes approximates market.

During the years ended December 31, 1995 and 1994, the Chairman of the
Board of Directors of Ravenswood and other Board members were employed by
Glencore AG. An allocation of Glencore AG expenses in an annual amount of $750
has been included in the accompanying consolidated financial statements. These
expenses have been allocated by assessing incremental amounts of such expenses
not previously charged to the Company. Management believes that such expense
allocation is reasonable. In addition, pursuant to a consulting agreement,
Glencore Ltd. provided certain management services to Ravenswood at an annual
charge of approximately $150.

Related Party Transactions -- Berkeley

A substantial portion of Berkeley's sales during the year ended December
31, 1996 were to Glencore Ltd. Prior to 1996, Berkeley derived all of its net
sales from tolling agreements with Glencore Ltd. The conversion price charged to
Glencore Ltd., under these tolling agreements, was based on a percentage of the
prior quarter's daily average settlement price for aluminum ingot on the LME.
Berkeley also charged Glencore Ltd. an additional amount for costs incurred
relating to the production of "premium product," as defined in the tolling
agreements, and certain other related costs.

43
45

CENTURY ALUMINUM COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

Effective January 1, 1996, and for the term of one year, the Company
entered into the Services and Marketing Agreement with Glencore Ltd. pursuant to
which Glencore Ltd. furnished training and marketing assistance in connection
with Century's ownership of the Mt. Holly Facility. In addition, prior to
January 1, 1996, Glencore Ltd. provided funding for operations and various
support services to Berkeley and charged a management fee for providing such
services. Management fees charged to Berkeley were $120 for each year in the
two-year period ended December 31, 1995.

Summary

A summary of the aforementioned related party transactions for the years
ended December 31, 1996, 1995 and 1994 is as follows:

1996 1995 1994
-------- -------- --------

Net sales.................................. $138,711 $137,260 $ 95,558
Purchases.................................. 89,832 176,222 179,473
Management, consulting, and training
fees..................................... 500 1,020 1,020

See note 13 for a discussion of the Company's fixed-price commitments and
forward contracts with related parties.

15. SIGNIFICANT THIRD-PARTY CUSTOMERS AND EXPORT SALES

Net sales to third-party customers include $46,339, $55,610 and $77,785
sold to one customer during the years ended December 31, 1996, 1995 and 1994,
respectively. Export sales were 15%, 11% and 11% of the Company's net sales for
the years ended December 31, 1996, 1995 and 1994, respectively. These sales were
principally to customers in Canada and European countries.

16. SUPPLEMENTAL CASH FLOW INFORMATION

YEAR ENDED DECEMBER 31,
------------------------------
1996 1995 1994
------- ------- ------

Cash paid for:
Interest:
Other..................................................... $ 2,694 $ 5,643 $7,236
Affiliates................................................ -- 509 1,796
Income taxes................................................. 17,280 11,624 --
Cash received from income tax refunds.......................... 448 11 2,837

Non-Cash Investing Activities

During the years ended December 31, 1996, 1995 and 1994, $89, $218 and $0,
respectively, of interest cost incurred in the construction of equipment was
capitalized.

Non-Cash Financing Activities

Corporate expenses of Glencore AG of $450 (net of income taxes) for each of
the years ended December 31, 1995 and 1994, were allocated to the Company and
recorded as contributions to additional paid-in capital.

During the year ended December 31, 1994, trade accounts payable to Glencore
Ltd. of $1,463 were forgiven and recorded as contributions to additional paid-in
capital.

44
46

CENTURY ALUMINUM COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

During the year ended December 31, 1994, the principal amount outstanding
under the Subordinated Debt Agreements of $86,250 was converted into additional
paid-in capital. (See Note 4.)

During the year ended December 31, 1995, the principal amount outstanding
under the Revolving Credit Facility -- Affiliate of $40,000 was converted into
additional paid-in capital. (See Note 4.)

Also during the year ended December 31, 1995, as part of a restructuring of
holdings within the Glencore Group, Vialco became a subsidiary of Ravenswood
with assets of $60,000 together with $11,085 of liabilities. This restructuring
resulted in an increase of $48,915 in additional paid-in capital. (See Note 11.)

17. QUARTERLY INFORMATION (UNAUDITED)

Financial results by quarter for the years ended December 31, 1996 and 1995
are as follows:

NET
NET GROSS INCOME INCOME (LOSS)
SALES PROFIT (LOSS) PER SHARE
-------- ------- ------- -------------

1996:
1st Quarter.......................... $181,404 $17,421 $ 9,179 $ 0.40
2nd Quarter.......................... 166,040 14,841 6,390 0.32
3rd Quarter.......................... 156,590 2,331 (1,490) (0.07)
4th Quarter.......................... 184,845 11,130 2,425 0.12
1995:
1st Quarter.......................... 192,726 36,754 24,030 1.04
2nd Quarter.......................... 193,450 27,902 18,475 0.80
3rd Quarter.......................... 171,674 14,942 10,339 0.45
4th Quarter.......................... 190,132 13,999 6,436 0.27

45
47

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information set forth under the captions "1. ELECTION OF DIRECTORS" and
"Section 16(a) Beneficial Ownership Reporting Compliance" to be included in the
Company's definitive Proxy Statement relating to the Annual Meeting of
Stockholders to be held on May 13, 1997 and to be filed pursuant to Regulation
14A within 120 days after the close of the fiscal year covered by this report on
Form 10-K, is incorporated herein by reference. The information regarding
Executive Officers of the Registrant is included in Part I of this Form 10-K.

ITEM 11. EXECUTIVE COMPENSATION

The (i) information set forth under the caption "Board and Committee
Meetings; Directors' Compensation" and (ii) information set forth under the
captions "Executive Compensation," "Employment Agreements," "Severance
Compensation Arrangements," "Compensation Committee Interlocks and Insider
Participation" and "Certain Transactions and Relationships" all to be included
in the Company's definitive Proxy Statement relating to the Annual Meeting of
Stockholders to be held on May 13, 1997 and to be filed pursuant to Regulation
14A within 120 days after the close of the fiscal year covered by this report on
Form 10-K, is incorporated herein by reference. Notwithstanding the foregoing,
(i) the information set forth in said Proxy Statement under the caption "Report
of the Compensation Committee" and (ii) the information set forth under the
caption "Performance Graph" in said Proxy Statement, is NOT incorporated by
reference herein or in any other filing of the Company.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information set forth under the caption "SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT" to be included in the Company's definitive
Proxy Statement relating to the Annual Meeting of Stockholders to be held on May
13, 1997 and to be filed pursuant to Regulation 14A within 120 days after the
close of the fiscal year covered by this report on Form 10-K, is incorporated
herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information set forth under the caption "Certain Transactions and
Relationships" to be included in the Company's definitive Proxy Statement
relating to the Annual Meeting of Stockholders to be held on May 13, 1997 and to
be filed pursuant to Regulation 14A within 120 days after the close of the
fiscal year covered by this report on Form 10-K, is incorporated herein by
reference.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K

(A)(1) LIST OF FINANCIAL STATEMENTS

The following Consolidated Financial Statements of Century Aluminum Company
and the Independent Auditors' Report are included in Part II, Item 8 of this
Form 10-K.

Independent Auditors' Report.

46
48

Consolidated Balance Sheets at December 31, 1996 and 1995.

Consolidated Statements of Operations for the years ended December 31,
1996, 1995 and 1994.

Consolidated Statements of Shareholders' Equity (Deficiency) for the years
ended December 31, 1996, 1995 and 1994.

Consolidated Statements of Cash Flows for the years ended December 31,
1996, 1995 and 1994.

Notes to the Consolidated Financial Statements.

(A)(2) LIST OF FINANCIAL STATEMENT SCHEDULES

Independent Auditors' Report

Schedule I -- Condensed Financial Information of Registrant as of and for
the years ended December 31, 1996, 1995 and 1994.

Schedule II -- Valuation and Qualifying Accounts for the years ended
December 31, 1996, 1995 and 1994.

(A)(3) LIST OF EXHIBITS

EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- -----------------------------------------------------------------------------------

47
49

EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- -----------------------------------------------------------------------------------

*10.20 Ravenswood Environmental Services Agreement between Kaiser Aluminum & Chemical
Corporation and Ravenswood Aluminum Corporation, dated as of February 7, 1989.
*10.21 Services Agreement between Glencore Ltd. and Ravenswood Aluminum Corporation, dated
as of July 21, 1992.
*10.22 Form of Tax Sharing Agreement.
*10.23 Form of Disaffiliation Agreement.
*10.24 Form of Services and Marketing Agreement between Glencore Ltd. and Century Aluminum
Company.
*10.25 Toll Conversion Agreement between Berkeley Aluminum, Inc. and Glencore Ltd., dated
as of January 1, 1994.
*10.26 Loan and Security Agreement among various financial institutions, BankAmerica
Business Credit, Inc., as agent, Ravenswood Aluminum Corporation and Berkeley
Aluminum, Inc., dated as of January 30, 1996.
*10.27 Security Agreement, made by Century Aluminum Company in favor of BankAmerica
Business Credit, Inc., dated as of January 30, 1996.
*10.28 Guaranty by Century Aluminum Company in favor of BankAmerica Business Credit, Inc.,
dated as of January 30, 1996.
*10.29 Agreement among the Pension Benefit Guaranty Corporation, Century Aluminum Company,
Ravenswood Aluminum Corporation, Berkeley Aluminum, Inc., Ravenswood Receivables
Corporation, Ravenswood International Sales Corp., Virgin Islands Alumina
Corporation, Glencore Holdings AG, Glencore International AG, Glencore AG, Vialco
Holdings Ltd., Glencore Marketing Inc., Pickands Mather Sales, Inc. Berkeley
Finance Corporation, Adam Maritime Corp. Glencore Canada Inc. and Clarendon Coal,
Inc., dated as of January 23, 1996.
*10.30 Intercreditor Agreement, between the Pension Benefit Guaranty Corporation and
BankAmerica Business Credit, Inc., dated as of January 30, 1996.
*10.31 Amended and Restated Owners Agreement among Alumax of South Carolina, Inc.,
Berkeley Aluminum, Inc. and Glencore Primary Aluminum Company LLC, dated as of
January 26, 1996.
10.32 Limited Term Firm Power Supply Agreement between Ravenswood Aluminum Corporation
and Ohio Power Company dated as of June 28, 1996.
10.33 Amendment No. 1 to the Limited Term Firm Power Supply Agreement between Ravenswood
Aluminum Corporation and Ohio Power Company dated as of January 27, 1997.
11.1 Calculation of Earnings (Loss) per Common Share and Common Share Equivalent.
*21.1 List of Subsidiaries.
23.1 Consent of Deloitte & Touche LLP.

- ---------------
* Incorporated by reference to the Registrant's Form S-1 Registration Statement,
as amended, Registration No. 33-95486.

+ Confidential treatment has been granted as to portions of this exhibit.

++ Management contract or compensatory plan.

(B) REPORTS ON FORM 8-K: NONE

48
50

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Form 10-K to be signed
on its behalf by the undersigned, thereunto duly authorized.

CENTURY ALUMINUM COMPANY

By: /s/ GERALD A. MEYERS
------------------------------------
Gerald A. Meyers
President and Chief Operating
Officer
Dated: March 27, 1997

Pursuant to the requirements of the Securities Exchange Act of 1934, this
Form 10-K has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.

SIGNATURE TITLE DATE
- ------------------------------------------ --------------------------------- ---------------

/s/ CRAIG A. DAVIS Chairman and Chief Executive March 27, 1997
- ------------------------------------------ Officer
Craig A. Davis

/s/ WILLIAM R. HAMPSHIRE Vice Chairman March 27, 1997
- ------------------------------------------
William R. Hampshire

/s/ GERALD A. MEYERS President, Chief Operating March 27, 1997
- ------------------------------------------ Officer and Director
Gerald A. Meyers

/s/ DAVID W. BECKLEY Executive Vice President and March 27, 1997
- ------------------------------------------ Chief Financial Officer
David W. Beckley (Principal Financial Officer and
Principal Accounting Officer

/s/ ROMAN A. BNINSKI Director March 27, 1997
- ------------------------------------------
Roman A. Bninski

/s/ JOHN C. FONTAINE Director March 27, 1997
- ------------------------------------------
John C. Fontaine

/s/ WILLY R. STROTHOTTE Director March 27, 1997
- ------------------------------------------
Willy R. Strothotte

49
51

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders of Century Aluminum Company:

We have audited the consolidated financial statements of Century Aluminum
Company and subsidiaries (the "Company") as of December 31, 1996 and 1995, and
for each of the three years in the period ended December 31, 1996, and have
issued our report thereon dated February 11, 1997 included elsewhere in this
Form 10-K. Our audits also included the financial statement schedules listed in
Item 8 of this Form 10-K. These financial statement schedules are the
responsibility of the Company's management. Our responsibility is to express an
opinion based on our audits. In our opinion, such financial statement schedules,
when considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.

DELOITTE & TOUCHE LLP

Pittsburgh, Pennsylvania
February 11, 1997

50
52

CENTURY ALUMINUM COMPANY

SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT

CONDENSED BALANCE SHEETS
(DOLLARS IN THOUSANDS)

DECEMBER 31,
---------------------
1996 1995
-------- --------

ASSETS
INVESTMENTS IN CONTINUING OPERATIONS OF WHOLLY-OWNED SUBSIDIARIES...... $166,478 $153,238
NET ASSETS OF DISCONTINUED OPERATIONS (INCLUDING INVESTMENTS IN
DISCONTINUED OPERATIONS OF WHOLLY-OWNED SUBSIDIARIES)................ 0 72,271
-------- --------
TOTAL........................................................ $166,478 $225,509
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CONTINGENCIES AND COMMITMENTS (NOTE 2)
SHAREHOLDERS' EQUITY:
Common stock......................................................... $ 200 $ 231
Additional paid-in capital........................................... 161,953 232,257
Retained earnings (deficit).......................................... 4,325 (6,979)
-------- --------
Total shareholders' equity........................................ 166,478 225,509
-------- --------
TOTAL........................................................ $166,478 $225,509
======== ========

See notes to condensed financial information

51
53

CENTURY ALUMINUM COMPANY

SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT

CONDENSED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

YEAR ENDED DECEMBER 31,
-------------------------------
1996 1995 1994
------- ------- -------

EQUITY IN INCOME (LOSS) FROM CONTINUING OPERATIONS OF
WHOLLY-OWNED SUBSIDIARIES................................... $16,240 $53,507 $(5,877)
EQUITY IN INCOME FROM DISCONTINUED OPERATIONS OF WHOLLY-OWNED
SUBSIDIARIES................................................ 264 5,773 5,769
------- ------- -------
NET INCOME (LOSS)............................................. $16,504 $59,280 $ (108)
======= ======= =======
INCOME (LOSS) PER COMMON SHARE AND COMMON SHARE EQUIVALENTS:
Income (loss) from continuing operations.................... $ 0.78 $ 2.31 $ (0.25)
Income from discontinued operations......................... .01 .25 .25
------- ------- -------
Net income.................................................. $ 0.79 $ 2.56 --
======= ======= =======
WEIGHTED AVERAGE COMMON SHARES AND COMMON SHARE EQUIVALENTS
OUTSTANDING................................................. 20,857 23,120 23,120
======= ======= =======

See notes to condensed financial information

52
54

CENTURY ALUMINUM COMPANY

NOTES TO CONDENSED FINANCIAL INFORMATION OF REGISTRANT FOR THE
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation -- In the accompanying condensed financial
information of the Registrant ("parent-company-only financial statements"), the
Company's investment in subsidiaries is stated at cost plus equity in
undistributed earnings and losses of subsidiaries. The Company's share of income
(loss) from continuing and discontinued operations of subsidiaries is reflected
using the equity method of accounting. Parent-company-only financial statements
should be read in conjunction with the Company's consolidated financial
statements and the notes to such consolidated financial statements appearing in
this Form 10-K ("Consolidated Financial Statements").

2. CONTINGENCIES AND COMMITMENTS

For disclosure of contingencies and commitments, see Notes 4, 12, 13 and 14
to the Consolidated Financial Statements.

3. SHAREHOLDERS' EQUITY

For disclosure of information concerning shareholders' equity, see Note 7
to the Consolidated Financial Statements.

4. SUBSEQUENT EVENTS

For disclosure of subsequent events, see Notes 4 and 12 to the Consolidated
Financial Statements.

53
55

CENTURY ALUMINUM COMPANY

SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
(DOLLARS IN THOUSANDS)

BALANCE AT CHARGED TO CHARGED TO BALANCE AT
BEGINNING COST AND OTHER END OF
OF PERIOD EXPENSE ACCOUNTS DEDUCTIONS PERIOD
---------- ---------- ---------- ---------- ----------

YEAR ENDED DECEMBER 31, 1994:
Allowance for doubtful trade accounts
receivable............................ $300 $ 131 $-- $ 31 $ 400
YEAR ENDED DECEMBER 31, 1995:
Allowance for doubtful trade accounts
receivable............................ $400 $ 300 $-- $ -- $ 700
YEAR ENDED DECEMBER 31, 1996:
Allowance for doubtful trade accounts
receivable............................ $700 $1,000 $-- $ -- $1,700

54
56

EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- -----------------------------------------------------------------------------------

*3.1 Restated Certificate of Incorporation of Registrant.
*3.2 Amended and Restated Bylaws of Registrant.
*4.1 Form of Stock Certificate.
*10.1 Alumina Supply Agreement between Glencore Ltd. and Ravenswood Aluminum Corporation,
dated September 13, 1993, as amended September 23, 1993.
+*10.2 Alumina Supply Agreement between Alcoa Alumina & Chemicals, L.L.C., Alcoa of
Australia, Ltd. and Ravenswood Aluminum Corporation, dated July 24, 1995.
*10.3 Power Agreement between Kaiser Aluminum & Chemical Corporation and Ohio Power
Company, dated June 18, 1968, as amended December 20, 1985.
*10.4 Agreement between Ravenswood Aluminum Corporation and United Steel Workers of
America AFL-CIO, Local 5668, dated November 30, 1994.
*10.5 Agreement between Ravenswood Aluminum Corporation and United Steel Workers of
America AFL-CIO, Local 5668, dated June 12, 1992.
++*10.6 Form of Employment Agreement between Century Aluminum Company and Craig A. Davis.
++*10.7 Form of Employment Agreement between Century Aluminum Company and Gerald A. Meyers.
++*10.8 Form of Employment Agreement between Century Aluminum Company and Gerald J.
Kitchen.
++*10.9 Form of Employment Agreement between Century Aluminum Company and David W. Beckley.
++*10.10 Form of Employment Agreement between Century Aluminum Company and Steven R.
Sedberry.
++*10.11 Form of Severance Agreement between Century Aluminum Company and Craig A. Davis.
++*10.12 Form of Severance Agreement between Century Aluminum Company and Gerald A. Meyers.
++*10.13 Form of Severance Agreement between Century Aluminum Company and Gerald J. Kitchen.
++*10.14 Form of Severance Agreement between Century Aluminum Company and David W. Beckley.
++*10.15 Form of Severance Agreement between Century Aluminum Company and Steven R.
Sedberry.
++*10.16 1996 Stock Incentive Plan.
++*10.17 Non-Employee Directors Stock Option Plan.
*10.18 Amended and Restated Asset Purchase Agreement between Kaiser Aluminum & Chemical
Corporation and Ravenswood Acquisition Corporation, dated as of December 13, 1988.
*10.19 Acquisition Agreement between Virgin Islands Alumina Corporation and St. Croix
Alumina, L.L.C., dated July 19, 1995.
*10.20 Ravenswood Environmental Services Agreement between Kaiser Aluminum & Chemical
Corporation and Ravenswood Aluminum Corporation, dated as of February 7, 1989.
*10.21 Services Agreement between Glencore Ltd. and Ravenswood Aluminum Corporation, dated
as of July 21, 1992.
*10.22 Form of Tax Sharing Agreement.
*10.23 Form of Disaffiliation Agreement.
*10.24 Form of Services and Marketing Agreement between Glencore Ltd. and Century Aluminum
Company.
*10.25 Toll Conversion Agreement between Berkeley Aluminum, Inc. and Glencore Ltd., dated
as of January 1, 1994.
*10.26 Loan and Security Agreement among various financial
*10.27 institutions, BankAmerica Business Credit, Inc., as agent, Ravenswood Aluminum
Corporation and Berkeley Aluminum, Inc., dated as of January 30, 1996. Security
Agreement, made by Century Aluminum Company in favor of BankAmerica Business
Credit, Inc., dated as of January 30, 1996.
*10.28 Guaranty by Century Aluminum Company in favor of BankAmerica Business Credit, Inc.,
dated as of January 30, 1996.
*10.29 Agreement among the Pension Benefit Guaranty Corporation, Century Aluminum Company,
Ravenswood Aluminum Corporation, Berkeley Aluminum, Inc., Ravenswood Receivables
Corporation, Ravenswood International Sales Corp., Virgin Islands Alumina
Corporation, Glencore Holdings AG, Glencore International AG, Glencore AG, Vialco
Holdings Ltd., Glencore Marketing Inc., Pickands Mather Sales, Inc. Berkeley
Finance Corporation, Adam Maritime Corp. Glencore Canada Inc. and Clarendon Coal,
Inc., dated as of January 23, 1996.
*10.30 Intercreditor Agreement, between the Pension Benefit Guaranty Corporation and
BankAmerica Business Credit, Inc., dated as of January 30, 1996.
*10.31 Amended and Restated Owners Agreement among Alumax of South Carolina, Inc.,
Berkeley Aluminum, Inc. and Glencore Primary Aluminum Company LLC, dated as of
January 26, 1996.
10.32 Limited Term Firm Power Supply Agreement between Ravenswood Aluminum Corporation
and Ohio Power Company dated as of June 28, 1996.
10.33 Amendment No. 1 to the Limited Term Firm Power Supply Agreement between Ravenswood
Aluminum Corporation and Ohio Power Company dated as of January 27, 1997.
11.1 Calculation of Earnings (Loss) per Common Share and Common Share Equivalent.
*21.1 List of Subsidiaries.
23.1 Consent of Deloitte & Touche LLP.

- ---------------
* Incorporated by reference to the Registrant's Form S-1 Registration Statement,
as amended, Registration No. 33-95486.

+ Confidential treatment has been granted as to portions of this exhibit.

++ Management contract or compensatory plan.