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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM 10-K
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[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the fiscal year ended December 31, 1999 or

[_] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from to

Commission File Number 33-64325

REUNION INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)

Delaware 06-1439715
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)

300 Weyman Plaza, Suite 340
Pittsburgh, Pennsylvania 15236
(Address, including zip code, of principal executive offices)
(412) 885-5501
(Telephone number, including area code)

62 Southfield Avenue
One Stamford Landing, Suite 208
Stamford, CT 06902
(Former address)
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Securities registered pursuant to Section 12(b) of the Act:

Name of Each Exchange
Title of Each Class on Which Registered
------------------- -----------------------

Common Stock, $.01 par value American Stock Exchange
Pacific Exchange, Inc.

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

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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

As of March 23, 2000, the registrant had 11,990,109 shares of Common Stock
issued and outstanding. As of March 23, 2000 the aggregate market value of the
voting stock held by non-affiliates of the registrant (computed by reference
to the average of the high and low sales prices on the American Stock
Exchange) was approximately $12,029,000.

Documents Incorporated by Reference

Part III, Items 10 through 13 are incorporated from the Registrant's
definitive proxy statement to be filed within 120 days after the close of
Reunion Industries' fiscal year.

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

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REUNION INDUSTRIES, INC.
TABLE OF CONTENTS OF FORM 10-K

PART I

Item No. Page
-------- ----

1. BUSINESS....................................................... 1
General........................................................ 1
Chatwins Group Merger.......................................... 2
Plastic Products and Services.................................. 2
Agricultural Operations........................................ 5
Discontinued Operations........................................
Environmental Regulation....................................... 5
Employees...................................................... 6
2. PROPERTIES..................................................... 7
3. LEGAL PROCEEDINGS.............................................. 7
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS............ 8

PART II
5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS........................................... 8
6. SELECTED FINANCIAL DATA........................................ 10
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS......................................... 11
7.a. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK..... 16
8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA....... 16
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.......................................... 16

PART III
10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT............. 17
11. EXECUTIVE COMPENSATION......................................... 17
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. 17
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................. 17

PART IV
14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES AND REPORTS ON
FORM 8-K...................................................... 17
SIGNATURES..................................................... 18

FORWARD LOOKING STATEMENTS

This Form 10-K contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These forward-looking statements speak only as of the
date of this Form 10-K, and Reunion Industries expressly disclaims any
obligation or undertaking to publicly release any updates or revisions to any
forward-looking statements contained herein. Although Reunion Industries
believes that its expectations are based on reasonable assumptions, it cannot
assure that the expectations contained in such forward-looking statements will
be achieved. Such statements involve risks, uncertainties and assumptions
which could cause actual results to differ materially from those contained in
such statements. Such factors include, but are not limited to, domestic and
international economic conditions which affect the volume of sales of business
and consumer goods by Reunion Industries' customers and, therefore, the volume
of sales of component parts produced by Reunion Industries; the cost and
availability of materials, labor and other goods and services used in Reunion
Industries' operations; actions of Reunion Industries' competitors and
industry trends, which affect the pricing of Reunion Industries' products; the
cost of interest on Reunion Industries' debt; and the effects on financial
position, results of operations and liquidity of the Chatwins Group merger.

PART I

ITEM 1. Business

General

Reunion Industries, Inc., a Delaware corporation ("Reunion Industries" or
the "Company"), is the successor by merger, effective April 19, 1996, of
Reunion Resources Company. Reunion Industries' executive offices are located
at 300 Weyman Plaza, Suite 340, Pittsburgh, Pennsylvania 15236 and its
telephone number is (412) 885-5501.

Reunion Industries, through its wholly owned subsidiary, Oneida Rostone
Corp. (doing business as ORCplastics), manufactures high volume, precision
plastic products and provides engineered plastics services. Reunion
Industries, through its subsidiary Juliana Vineyards ("Juliana") is also
engaged in wine grape agricultural operations in Napa County, California.
General information about each of Reunion Industries' principal businesses is
set forth below under the captions "Plastic Products and Services",
"Agricultural Operations" and "Discontinued Operations."

During the five year period ended December 31, 1999, Reunion Industries,
through its subsidiaries, was also engaged in exploring for, developing,
producing and selling crude oil and natural gas in the United States. In
November 1995, Reunion Industries' Board of Directors resolved to pursue the
sale of Reunion Industries' oil and gas assets and discontinue Reunion
Industries' oil and gas operations. On May 24, 1996, Reunion Industries
completed the sale of its wholly owned subsidiary, Reunion Energy Company
("Reunion Energy"), which included substantially all of Reunion Industries'
oil and gas assets.

Reunion Industries' original predecessor was organized in California in
1929. Reunion Industries' predecessor, Buttes Gas and Oil Co., and certain of
its subsidiaries emerged in December 1988 from a reorganization in bankruptcy
under Chapter 11 of the United States Bankruptcy Code. Effective June 29,
1993, Buttes Gas & Oil Co. completed a recapitalization that reduced the
number of outstanding shares of common stock by approximately 95% and then
merged into Reunion Resources, a Delaware corporation. Reunion Resources
merged into Reunion Industries effective April 19, 1996.

Reunion Industries' Certificate of Incorporation includes certain capital
stock transfer restrictions which are designed to prevent any person or group
of persons from becoming a 5% shareholder of Reunion Industries and to prevent
an increase in the percentage stock ownership of any existing person or group
of persons that constitutes a 5% shareholder by prohibiting and voiding any
transfer or agreement to transfer stock to the extent that it would cause the
transferee to hold such a prohibited ownership percentage. The transfer
restrictions are

intended to help assure that Reunion Industries' substantial net operating
loss carryforwards will continue to be available to offset future taxable
income by decreasing the likelihood of an "ownership change" (measured over a
three year testing period) for federal income tax purposes. The transfer
restrictions do not apply to transfers approved by Reunion Industries' Board
of Directors if such approval is based on a determination that the proposed
transfer will not jeopardize the full utilization of Reunion Industries' net
operating loss carryforwards.

Chatwins Group Merger

On March 16, 2000, Reunion Industries completed a merger with Chatwins
Group, Inc., a Delaware corporation ("Chatwins Group"), which prior to the
merger owned approximately 37% of Reunion Industries' common stock (see Item
13 "Certain Relationships and Related Transactions"). The merger was approved
by Reunion Industries' board of directors in July 1999 and by its stockholders
in December 1999, subject to certain conditions, including the completion of a
refinancing that would retire certain debt and provide adequate working
capital after the merger. As described below under Item 7 "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Liquidity and Capital Resources--Factors Affecting Future Liquidity," Reunion
Industries entered into credit facilities with Bank of America and others
simultaneously with the merger.

To complete the merger, Reunion Industries issued 9,500,000 shares of common
stock to holders of Chatwins Group's common stock. Cash was paid in lieu of
issuing fractional shares. The 1,450,000 shares of Reunion Industries common
stock previously owned by Chatwins Group were retired in the merger. As a
result of the merger, the Chatwins Group stockholders own approximately 79% of
Reunion Industries' outstanding common stock. The merger agreement also
provides that up to an additional 500,000 shares of common stock will be
issued to the Chatwins Group stockholders if the former Chatwins Group
businesses achieve specified performance levels in 2000.

Plastic Products and Services

ORCplastics manufactures plastic products and provides engineered plastics
services through its three divisions. The domestic thermoplastics division
designs and produces injection molded parts and provides secondary services
such as hot stamping, welding, printing, painting and assembly of such
products and designs and builds custom molds at its tool shop in order to
produce component parts for specific customers. The Rostone division compounds
and molds thermoset polyester resins. Data Packaging Limited, which operates
in Ireland, manufactures high volume, precision plastic parts and provides
engineered plastics services.

Domestic Thermoplastics Division

Founded in 1964 as Oneida Molded Plastics, the domestic thermoplastics
division is a full-service plastic injection molder which manufactures high-
volume, precision plastic products and provides secondary services such as hot
stamping, welding, printing, painting and assembly of such products.

Products. The division's principal products consist of specially designed
and manufactured components for office equipment; business machines; computers
and peripherals; telecommunications, packaging and industrial equipment; and
recreational and consumer products.

Markets and Customers. The markets in which the domestic thermoplastics
division competes have sales in excess of $25 billion per year. These markets
are highly competitive. The principal competitors are international companies
with multi-plant operations based in the United States, Germany, France and
Japan, as well as approximately 3,800 independent companies located in the
United States engaged in the custom molding business. Most of these companies
are privately owned and have sales volumes ranging from $3 million to
$7 million per year. In addition, approximately one-half of the total
injection molding market is supplied by in-house molding shops. The domestic
thermoplastics division competes on the basis of customer service, product
quality and price.

During 1999, sales to one customer, Xerox, were approximately 14% of the
domestic thermoplastics division's sales (8% of ORCplastics' consolidated
sales). The loss of this customer could have a material adverse effect on the
results of operations of the domestic thermoplastics division, but sales to
Xerox have declined as a percentage of the division's sales as the Company
diversifies its customer base. During 1998 and 1997, Xerox was responsible for
more than 20% of the division's net sales. In addition to Xerox, the division
has approximately 500 customers in the various industries described above.
ORCplastics continues to seek additional customers in the business machines,
consumer products and medical products industries. We believe that these new
customers provide future growth opportunities for the division.

Sales and Marketing. Sales of products are made through an internal sales
staff and a network of independent manufacturer's representatives working from
nine separate regional offices throughout the eastern United States. The
division generally pays commissions of between 2% and 5% percent of sales
based upon volume.

Manufacturing. The domestic thermoplastics division designs and manufactures
most of its products by injection molding to a customer's specifications. In
most cases, the division obtains a contract to produce a specified number of
custom designed products using custom built molds owned by the customer. The
customer either provides its own molds or has the division design and build or
obtain from a supplier the molds necessary to produce the products. The custom
molds produced by the division are manufactured at its tool shop, which is
located in Phoenix, New York. The division has three injection molding
facilities, which are located in Oneida and Phoenix, New York, and Siler City,
North Carolina.

The principal raw materials used by the domestic thermoplastics division are
thermoplastic polymers. These materials are available from a number of
suppliers. Prices for these materials are affected by changes in market
demand, and there can be no assurances that prices for these and other raw
materials will not increase in the future. The division's contracts with its
customers generally provide that such price increases can be passed through to
the customers.

The majority of the domestic thermoplastics division's engineering work is
related to meeting design requirements and specifications of its customers
that require customized products and developing greater production
efficiencies. To meet these objectives, the division has engineering personnel
at each of its manufacturing locations. The division's business is not
materially dependent on any patents, licenses or trademarks.

Rostone

Founded in 1927, the Rostone division manufactures precision thermoset
plastic molded parts and proprietary thermoset molding compounds.

Products. Rostone's principal products consist of specially designed and
manufactured components for original equipment manufacturers in the
electrical, transportation, appliance and office equipment industries. Rostone
is also a compounder of proprietary fiberglass reinforced materials used in a
number of customer applications.

Markets and Customers. Rostone competes in a market with a limited number of
privately owned competitors and in-house molders on the basis of product
specifications, customer service and price. During 1999, 1998 and 1997, one
customer, Cutler Hammer, was responsible for more than 20% of Rostone's sales.
Sales to Cutler Hammer were approximately 30% of Rostone's sales during 1999
(7% of ORCplastics' consolidated sales). The loss of this customer could have
a material adverse effect on Rostone's results of operations. Rostone
continues to seek new customers in the industries described above and in other
industries.

Sales and Marketing. Sales of Rostone's products are made through an
internal sales staff and a network of independent representatives working from
ten separate offices throughout the central United States. Rostone generally
pays commissions of between 3% and 5% of sales based on volume.

Manufacturing. Rostone manufactures its thermoset products using customer-
owned custom-built molds to produce parts to customer specifications. These
molds are either provided by the customer or designed by Rostone and built by
Oneida's tooling facility or by another supplier. Rostone has one molding
facility, located in Lafayette, Indiana.

The principal raw materials used by Rostone are styrene, polyester resins,
fiberglass and commercial phenolics. These materials are available from a
number of suppliers. Prices and availability of these materials are affected
by changes in market demand, and there can be no assurances that prices for
these and other raw materials used by Rostone will not increase in the future.
When possible, if shortages occur, Rostone engineers new products to provide
its customers a cost-effective alternative to the material in short supply.

Research and development at Rostone is focused on the development of
proprietary thermoset materials under the trade name Rosite(R). Rostone
compounds a wide range of Rosite materials to satisfy its customers' various
needs. Rostone also provides services in meeting customers' design
requirements and specifications of their customized products. Other than
Rosite(R), Rostone's business is not materially dependent on any patents,
licenses or trademarks.

Data Packaging

Founded in 1981, Data Packaging is a full-service custom plastics injection
molder which manufactures high-volume, precision plastic products and provides
engineered plastics services.

Products. Data Packaging's principal products consist of specially designed
and manufactured components for office equipment, business machines, computer
and peripherals, and telecommunications equipment.

Markets and Customers. Data Packaging's markets are highly competitive.
Principal competitors are international companies with operations in Ireland
and Western Europe, and approximately five independent companies in Ireland.
Data Packaging competes on the basis of price, customer service and product
quality. One customer, Hewlett Packard, represented approximately 35% of Data
Packaging's sales during 1999 (7% of ORCplastics' consolidated sales). The
loss of this customer could have a material adverse effect on Data Packaging's
results of operations. Dell Computer represented more than 20% of Data
Packaging's net sales in 1998 but 14% in 1999. Data Packaging continues to
seek new customers in the office equipment and telecommunications industries
in Europe.

Sales and Marketing. Sales of Data Packaging's products are made by the
company's in-house sales force.

Manufacturing. Data Packaging designs and manufactures its products to a
customer's specifications using custom-built molds owned by the customer. The
customer either provides its own molds or has Data Packaging design and obtain
from a supplier the molds necessary to produce the products. All operations
are conducted from one facility in Mullingar, County Westmeath, Ireland.

The principal raw materials used by Data Packaging are thermoplastic
polymers. These materials are available from a number of suppliers. Prices for
these materials are affected by changes in market demand, and there can be no
assurances that prices for these and other raw materials used by Data
Packaging will not increase in the future. Data Packaging's contracts with its
customers generally provide that such price increases can be passed through to
the customers.

The majority of Data Packaging's engineering work is related to meeting
design requirements and specifications of its customers that require
customized products and developing greater production efficiencies. Data
Packaging's business is not materially dependent on any patents, licenses or
trademarks.

Agricultural Operations

Juliana is engaged in wine grape vineyard development and the growing and
harvesting of wine grapes for the premium table wine market. Reunion
Industries' wine grape agricultural operations consist of approximately 3,300
acres, of which approximately 970 acres are suitable for wine grape production
and of which approximately 335 acres are currently in production. This
property is located within the official boundaries of the Napa Valley American
Viticultural Area, the premier grape growing region of North America. Reunion
Industries does not hold a significant position in the wine grape market.
Prices received on the sale of wine grapes may fluctuate widely, depending
upon supply, demand and other factors.

From October 1994 to September 1998, Juliana conducted its agricultural
operations through the Juliana Preserve, a joint venture organized as a
California general partnership. Juliana had a 71.7% interest in the net income
and net assets of the joint venture, but had a 50% voting interest in matters
concerning the operation, development and disposition of the joint venture
assets. In September 1998, Juliana purchased the interest of its joint venture
partner for approximately $5.9 million.

In August 1997, the Preserve sold approximately 520 acres, including
approximately 290 plantable acres, to a Napa Valley winery. In September 1998,
Juliana sold approximately 420 acres, including approximately 250 plantable
acres, to an Australian winery. Also during 1998, Juliana formed the Juliana
Mutual Water Company ("JMWC") to own and operate the water storage and
transmission system for the entire property originally owned by the Juliana
Preserve. Ownership of JMWC is generally in proportion to plantable acres as
specified in the JMWC bylaws. In August 1999, Juliana sold approximately 260
acres, including approximately 190 plantable acres, to a Napa Valley winery.
Juliana is attempting to sell substantially all of the remaining property, but
there can be no assurances that it will be able to do so.

Juliana has undertaken a limited wine grape development effort which
management believes will enhance the value of the property. Approximately 95
acres were planted in 1998. These new plantings should reach production in two
or three years. If the entire property is not sold, additional plantings may
be made in future years if additional funds can be obtained through financing
or from additional property sales. One parcel including approximately 65
plantable acres has been leased to a Napa Valley winery. Juliana also provides
vineyard development and farm management services to certain of the third
party owners and lessees of parcels in the Juliana Preserve.

Environmental Regulation

Various federal, state and local laws and regulations including, without
limitation, laws and regulations concerning the containment and disposal of
hazardous waste, oil field waste and other waste materials, the use of storage
tanks, the use of insecticides and fungicides and the use of underground
injection wells directly or indirectly affect Reunion Industries' operations.
In addition, environmental laws and regulations typically impose "strict
liability" upon Reunion Industries for certain environmental damages.
Accordingly, in some situations, Reunion Industries could be liable for clean
up costs even if the situation resulted from previous conduct of Reunion
Industries that was lawful at the time or from improper conduct of, or
conditions caused by, previous property owners, lessees or other persons not
associated with Reunion Industries or events outside the control of Reunion
Industries. Such clean up or costs associated with changes in environmental
laws and regulations could be substantial and could have a materially adverse
effect on Reunion Industries' consolidated financial position, results of
operations or cash flows.

ORCplastics' plastic products and service business routinely uses chemicals
and solvents, some of which are classified as hazardous substances. Juliana's
vineyard operations routinely use fungicides and insecticides,

the handling, storage and use of which is regulated under the Federal
Insecticide, Fungicide and Rodenticide Act, as well as California laws and
regulations. Reunion Industries' former oil and gas business and related
activities routinely involved the handling of significant amounts of waste
materials some of which are classified as hazardous substances.

Except as described in the following paragraphs, Reunion Industries believes
it is currently in material compliance with existing environmental protection
laws and regulations and is not involved in any significant remediation
activities or administrative or judicial proceedings arising under federal,
state or local environmental protection laws and regulations. In addition to
management personnel who are responsible for monitoring environmental
compliance and arranging for remedial actions that may be required, Reunion
Industries has also employed outside consultants from time to time to advise
and assist Reunion Industries' environmental compliance efforts. Except as
described in the following paragraphs, Reunion Industries is not aware of any
conditions or circumstances relating to environmental matters that will
require significant capital expenditures by Reunion Industries or that would
result in material adverse effects on its businesses.

In February 1996, Rostone was informed by a contracted environmental
services consulting firm that soil and ground water contamination exists at
its Lafayette, Indiana site. Rostone has initiated a remediation plan under an
agreement with the Indiana Department of Environmental Management and expects
to substantially complete the remediation during 2001. Rostone has expended
approximately $0.3 million and has accrued an additional $0.1 million based on
current estimates of remediation costs. Certain of these costs were
recoverable from CGI Investment Corp., the seller of Rostone. (See Item 13--
"Certain Relationships and Related Transactions".)

In connection with the sale of Reunion Energy, Reunion Industries retained
certain oil and gas properties in Louisiana because of litigation concerning
environmental matters. Reunion Industries is in the process of environmental
remediation under a plan approved by the Louisiana Office of Conservation.
Reunion Industries has recorded an accrual for its proportionate share of the
remaining estimated costs to remediate the site based on plans and estimates
developed by the environmental consultants hired by Reunion Industries. During
1998 Reunion Industries increased this accrual by a charge of $1.2 million to
discontinued operations, based on revised estimates of the remaining
remediation costs. During 1999, Reunion Industries conducted remediation work
on the property. Reunion Industries paid $0.2 million of the total cost of
$0.3 million. At December 31, 1999, the balance accrued for these remediation
costs is approximately $1.3 million. A regulatory hearing was held in January
2000 to consider the adequacy of the remediation conducted to date. No
decision has been rendered to date, but Reunion Industries does not believe
that the cost of future remediation will exceed the amount accrued. Owners of
a portion of the property have objected to Reunion Industries' proposed
cleanup methodology and have filed suit to require additional procedures.
Reunion Industries is contesting this litigation, and believes its proposed
methodology is well within accepted industry practice for remediation efforts
of a similar nature. No accrual has been made for any costs of any alternative
cleanup methodology which might be imposed as a result of the litigation.

Employees

At December 31, 1999, Reunion Industries employed 794 full time employees,
of whom 784 were employed in the plastic products segment, six were employed
in agricultural operations and four were corporate personnel. Reunion
Industries also employs hourly employees in its agricultural operations, the
number of whom varies throughout the year.

In ORCplastics' Rostone division, approximately 164 employees are
represented by the International Brotherhood of Electrical Workers, AFL-CIO,
under a collective bargaining agreement which expires in February 2003.

Substantially all of Data Packaging's 130 hourly employees are represented
by the Services Industrial Profession and Technical Union. Data Packaging
participates in the Irish Business and Employers Confederation,

which negotiates binding national agreements about employment policy, pay
increases and taxation with the government and trade unions. The current
agreement expires August 2000.

ITEM 2. Properties

Manufacturing Properties

Reunion Industries' properties used in the plastic products and services
segment are as follows:

Lease
Square Expiration
Division Location Feet Land Acres Title Date Use
-------- -------- ------ ---------- ----- ---------- ---

Domestic Oneida, NY 84,000 3.5 Owned* -- Manufacturing and Administrative
Thermoplastics Phoenix, NY 28,000 -- Leased 1/31/05 Manufacturing
Phoenix, NY 20,000 2.0 Owned* -- Manufacturing
Siler City, NC 130,000 8.3 Owned* -- Manufacturing and Administrative
Rostone Lafayette, IN 168,000 20.0 Owned* -- Manufacturing and Administrative
Data Packaging Mullingar, Ireland 72,000 5.9 Owned -- Manufacturing and Administrative

- --------
* Subject to mortgages in connection with ORCplastics' credit facility with
The CIT Group/Business Credit, Inc. (see Note 8 of the Notes to the
Consolidated Financial Statements).

Reunion Industries believes that these facilities are suitable and adequate
for ORCplastics' use.

Other Properties

Reunion Industries owns the 3,300 acres on which it conducts its wine grape
agricultural operations and maintains an office facility on its vineyard
property. Reunion Industries is attempting to sell this property.

In connection with the sale of its oil and gas business, Reunion Industries
retained certain oil and gas properties in Louisiana because of litigation
concerning environmental matters. Reunion Industries intends to sell these
properties when the litigation is resolved.

Reunion Industries holds title to or recordable interests in federal and
state leases totaling approximately 55,000 acres near Moab, Utah, known as Ten
Mile Potash. Sylvanite, a potash mineral, is the principal mineral of interest
and occurrence in the Ten Mile Potash property. To date, Ten Mile Potash has
not yielded any significant revenues from mining operations or any other
significant revenues, and Reunion Industries is pursuing the sale or farmout
of these interests.

Reunion Industries subleases, from Stanwich Partners, Inc., a related party
(see Item 13 "Certain Relationships and Related Transactions"), approximately
1,500 square feet of office space in Stamford, Connecticut for its corporate
offices. Management believes the terms of this sublease are comparable to
those available from third parties.

ITEM 3. Legal Proceedings

Certain litigation in which Reunion Industries is involved is described
below.

The owners of a portion of the Reunion Industries property in Louisiana
currently being remediated for environmental contamination have objected to
Reunion Industries' proposed cleanup methodology and have filed suit to
require additional procedures. Reunion Industries is contesting the
litigation, and believes its proposed methodology is well within accepted
industry practice for remediation efforts of a similar nature.

A suit was filed in December 1999 in the Court of Chancery of the State of
Delaware against Reunion Industries and its directors and Chatwins Group in
connection with the proposed merger. The lawsuit alleges breaches of fiduciary
duty by the defendants in setting the exchange ratio of the merger. The
defendants maintain that the exchange ratio fixed for the merger fairly
reflected the relative values of Reunion Industries and Chatwins Group when
the merger terms were agreed. The suit is in its early stages and no discovery
has begun. Reunion Industries intends to vigorously contest this lawsuit.

Reunion Industries and it subsidiaries are the defendants in other lawsuits
and administrative proceedings which have arisen in the ordinary course of
business. Reunion Industries believes that any material liability which can
result from any of such lawsuits or proceedings has been properly reserved for
in Reunion Industries' financial statements or is covered by indemnification
in favor of Reunion Industries or its subsidiaries, and that, therefore, the
outcome of these lawsuits or proceedings will not have a material adverse
effect on Reunion Industries' financial position, results of operations or
cash flows.

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

At a special meeting of Reunion Industries' stockholders held December 15,
1999, which also served as Reunion

Industries' 1999 annual meeting, stockholders holding a majority of the
shares of Common Stock outstanding as of the close of business on October 22,
1999 voted to approve the proposals included in Reunion Industries' proxy
statement as follows:

For Withhold
Proposal 1: Election of Directors --- --------

Thomas N. Amonett 3,422,305 331,208
Charles E. Bradley, Sr. 3,422,035 331,478
Thomas L. Cassidy 3,422,125 331,388
W. R. Clerihue 3,422,170 331,343
Franklin Myers 3,422,305 331,208
John G. Poole 3,422,155 331,358

Broker
For Against Abstentions Non-Votes
--- ------- ----------- ---------

Proposal 2: Consideration and
approval of the Merger
Agreement with Chatwins
Group, Inc. 2,584,489 429,597 3,699 735,728

Broker
For Against Abstentions Non-Votes
--- ------- ----------- ---------

Proposal 3: To consider and act upon
such other business as
may properly come before
the Meeting 3,317,806 322,245 113,421 --

PART II

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

Beginning March 23, 2000, Reunion Industries' Common Stock is traded on the
American Stock Exchange (RUN). Previously, Reunion Industries' Common Stock
was traded in the over-the-counter market and was listed on the NASDAQ Small-
Cap Market (RUNI). The stock was also listed on the Pacific Exchange (RUN).

As of March 23, 2000, there were approximately 1,335 holders of record of
Reunion Industries' Common Stock with an aggregate of 11,990,109 shares
outstanding.

The table below reflects the high and low sales prices on the NASDAQ Small-
Cap Market for the quarterly periods in the two years ended December 31, 1999.
The NASDAQ Small-Cap quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commission and may not necessarily represent actual
transactions.

Quarter Ended High Low
- ------------- ------ ------

1999
March 31........................................................ $5.250 $2.625
June 30......................................................... $4.875 $3.188
September 30.................................................... $3.500 $2.375
December 31..................................................... $2.625 $1.688
1998
March 31........................................................ $5.500 $4.750
June 30......................................................... $7.625 $5.000
September 30.................................................... $6.125 $2.875
December 31..................................................... $3.250 $2.406

No cash dividends have been declared or paid during the past three years
with respect to the Common Stock. The Board of Directors currently follows a
policy of retaining any earnings for operations and for the expansion of the
business of the company. Cash dividends are also limited by the availability
of funds, including dividend preferences on preferred stock and limitations
contained in Reunion Industries' lending agreements (See Item 7 "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Liquidity and Capital Resources--Factors Affecting Future Liquidity").
Therefore, Reunion Industries anticipates that it will not pay any cash
dividends on its Common Stock in the foreseeable future.

ITEM 6. Selected Financial Data

Year Ended December 31,
---------------------------------------------
1999(1) 1998(2) 1997(3) 1996(4) 1995(5)
------- -------- ------- ------- --------
(In Thousands, Except Per Share Data)

Operations Data
Continuing Operations:
Operating Revenue............. $76,099 $ 97,318 $93,378 $60,305 $ 10,855
======= ======== ======= ======= ========
Operating Income (Loss)....... (476) 1,495 2,513 1,449 (3,016)
Interest Expense.............. (3,392) (3,221) (3,267) (2,402) (508)
Provision for Bargo Judgment
and Related Costs............ (1,646) (9,239) -- -- --
Bargo Settlement Claim........ 3,617 -- -- -- --
Equity in Writedown of Joint
Venture Development Costs.... -- -- (855) (1,290) --
Other Income (Expense)........ 635 (136) 714 425 (57)
Income Tax Benefit (Expense).. (226) 661 (86) (876) --
------- -------- ------- ------- --------
Loss From Continuing Operations. (1,488) (10,440) (981) (2,694) (3,581)
------- -------- ------- ------- --------
Discontinued Operations:
Agriculture................... -- -- 710 (710) --
Oil and Gas................... 339 (1,710) -- 1,122 (10,389)
------- -------- ------- ------- --------
Income (Loss) From Discontinued
Operations..................... 339 (1,710) 710 412 (10,389)
------- -------- ------- ------- --------
Extraordinary Items............. -- (233) -- -- --
------- -------- ------- ------- --------
Net Loss........................ $(1,149) $(12,383) $ (271) $(2,282) $(13,970)
======= ======== ======= ======= ========
Income (Loss) Per Share--Basic:
Continuing Operations......... $ (0.38) $ (2.69) $ (0.25) $ (.70) $ (.93)
Discontinued Operations....... 0.09 (.44) 0.18 0.11 (2.72)
Extraordinary Items........... -- (0.06) -- -- --
------- -------- ------- ------- --------
Net Loss...................... $ (0.29) $ (3.19) $ (0.07) $ (0.59) $ (3.65)
======= ======== ======= ======= ========
Loss Per Share--Diluted......... $ (0.29) $ (3.19) $ (0.07) $ (0.59) $ (3.65)
======= ======== ======= ======= ========
Balance Sheet Data
Total Assets.................... $66,311 $ 74,874 $72,059 $75,176 $ 51,935
Long-term Obligations........... $21,153 $ 17,237 $12,654 $15,575 $ 7,947
Stockholders' Equity............ $14,545 $ 16,239 $28,317 $28,944 $ 31,254
Weighted Average Common Shares
Outstanding.................... 3,924 3,881 3,855 3,855 3,832
Cash Dividends per Common Share. $ -0- $ -0- $ -0- $ -0- $ -0-

- --------
(1) Operating income includes a $1.6 million charge for costs related to the
litigation with Bargo Energy Company and a $3.6 million gain from
settlement of this litigation. See Note 3 of the Notes to Consolidated
Financial Statements.

(2) Includes Juliana as a consolidated subsidiary subsequent to the September
1998 purchase of joint venture partner's interest. See Item 1 "Business--
Agricultural Operations." Operating income includes a $9.2 million charge
to record entry of the judgment and related costs in the Bargo
litigation. Net income includes a $1.2 million charge for increase in a
provision for environmental remediation and a $0.5 million charge for a
provision for tax settlement, included in "Discontinued Operations." See
Item 1 "Business-- Environmental Regulation" and Item 7 "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Discontinued Operations."

(3) Operating income includes a $1.0 million charge for writedown of excess
equipment. Net income also includes a $0.9 million charge for equity in
the write-off of joint venture development costs and income of

$0.7 million from reversal of the 1996 estimated loss on disposal of the
agricultural and real estate operations. See Note 6 of the Notes to the
Consolidated Financial Statements.

(4) Includes the results of operations of Rostone subsequent to its
acquisition on February 2, 1996. Includes the results of two plastics
businesses subsequent to their acquisitions on November 18, 1996.
Includes a $1.3 million impairment charge, a $0.7 million charge for the
estimated loss on disposal of the agricultural and real estate operations
and a $1.1 million net gain from the disposal of the oil and gas
operations.

(5) Includes the results of operations of Oneida Molded Plastics subsequent
to its acquisition on September 14, 1995. Includes a $7.0 million
impairment charge against Reunion Industries' oil and gas properties and
a $3.8 million charge for the expected loss on disposal of the oil and
gas operations.

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

Results of Operations

Overview

Reunion Industries' principal operations are in the plastic products and
services industry through its wholly owned subsidiary Oneida Rostone Corp.
(doing business as ORCplastics). Reunion Industries is also engaged in wine
grape agricultural operations in Napa County, California through its wholly
owned subsidiary Juliana Vineyards.

Reunion Industries recognized a net loss of $1.1 million in 1999 compared to
a net loss of $12.4 million in 1998 and a net loss of $0.3 million in 1997.
The following discussion of Results of Continuing Operations describes Reunion
Industries' continuing operations in plastic products and services and wine
grape agriculture.

Results of Continuing Operations--1999 Compared to 1998

Plastic products and services. ORCplastics revenues and operating income
were $71.6 million and $1.2 million, respectively, for the year ended December
31, 1999, compared to revenues and operating income of $95.1 and $5.0 million,
respectively, for the year ended December 31, 1999.

The 25% decrease in revenues resulted from several factors, including
certain customers relocating manufacturing operations to Mexico and Asia,
reduced customer orders for continuing programs, end of product cycles and
delays in new program starts, which affected all ORCplastics facilities.
Management is considering opening or acquiring a molding facility in Mexico to
counter these trends, but there can be no assurance that Reunion Industries
can do so successfully. ORCplastics backlog totaled $12.4 million at December
31, 1999, compared to backlog of $16.7 million at December 31, 1998. Backlog
is also affected by customers' continuing movement to just-in-time ordering
and shorter delivery cycles.

Cost of sales totaled $60.8 million, or 84.9% of net sales, for the year
ended December 31, 1999 compared to $80.9 million, or 85.1% of net sales for
the year ended December 31, 1998. Gross profit was $10.8 million for the year
ended December 31, 1999 compared to $14.2 million in the prior year period.
The decrease in both cost of sales and gross profit resulted from the decrease
in revenues.

Selling, general and administrative expenses were $9.6 million in 1999,
compared to $9.2 million in 1998. The 1999 period included a $0.5 million
provision for supplemental retirement compensation and a $0.4 million
provision related to closing the Clayton, N.C. molding facility. Operating
income was $1.2 million, or 1.7% of net sales, in 1999 compared to $5.0
million, or 5.3% of net sales, in 1998, primarily because of the decrease in
revenues.

Agriculture. Juliana had an operating loss of $0.1 million on grape sales of
$2.4 million and custom farming and other revenues of $2.1 million in 1999
compared to an operating loss of $0.1 million on grape sales of $2.2 million
in 1998.

Corporate General and Administrative Expense. Corporate general and
administrative expenses, consisting primarily of executive and administrative
salaries and benefits, professional fees and other public company costs,
totaled $1.6 million for the year ended December 31, 1999 and $2.1 million for
the year ended December 31, 1998. The 1999 amount includes $0.2 million of
expenses incurred in connection with the proposed sale of ORCplastics, which
was subsequently terminated. The 1999 and 1998 amounts include $0.2 million
and $0.6 million, respectively, of legal costs for Reunion Industries'
litigation with Bargo.

As a result of termination of a previous merger agreement with Chatwins
Group because of the inability to raise sufficient financing under then-
current market conditions, Reunion Industries recorded a charge of $1.4
million in 1998 to write off accumulated legal, investment banking and other
costs related to the merger.

Other Income and (Expense). Interest expense was $3.4 million in 1999
compared to $3.2 million in 1998. Reunion Industries recorded a charge of $9.2
million in 1998 to record entry of judgment in Reunion Industries' litigation
with Bargo. Reunion Industries also recorded a $1.6 million charge in 1999 for
interest and credit support fees relating to the bond posted in the appeal of
the Bargo litigation judgment, and recognized a gain of $3.6 million in 1999
as a result of the settlement of this litigation. See Note 3 of the Notes to
Consolidated Financial Statements.

Results of Continuing Operations--1998 Compared to 1997

Plastic products and services: ORCplastics revenues and operating income
were $95.1 million and $5.0 million, respectively, for the year ended December
31, 1998. This compares to 1997 revenues and operating income of $93.4 million
and $4.3 million, respectively.

The increase in revenues is attributable to a 34% increase in Data Packaging
sales as a result of new customer programs, offset by a 5% decrease in sales
at U.S. operations. Parts sales increased $0.7 million, or 0.6% to $89.0
million for the year ended December 31, 1998 compared to $88.5 million for the
prior year period. Tooling sales increased $1.2 million, or 24.5% to $6.1
million for 1998 compared to $4.9 million for 1997. Tooling revenues
associated with the production of customer tools are deferred until the tools
are completed and delivered to the customers. As a result, tooling sales
fluctuate depending on when projects are completed. The 34% increase in Data
Packaging sales resulted from two significant new projects, for which Reunion
Industries added production capacity. Although Reunion Industries continues to
seek new customers and projects, management does not expect that such sales
growth will recur. ORCplastics backlog totaled $16.7 million at December 31,
1998 compared to backlog of $21.9 million at December 31, 1997. Backlog is
down from 1997 as more major customers move to just-in-time ordering and
shorter delivery cycles and because of customer deferrals of new programs.

Cost of sales totaled $80.9 million, or 85.1% of net sales, for the year
ended December 31, 1998 compared to $78.9 million, or 84.5% of net sales, for
the year ended December 31, 1997. Gross margins were $14.2 million or 14.9% of
net sales, in 1998 compared to $14.5 million, or 15.5% of net sales in 1997.

During 1997, ORCplastics recorded a $1.0 million writedown of surplus
equipment to net realizable value. This writedown was made in conjunction with
the relocation of thermoplastic molding production from the Clayton, N.C.
facility to the Siler City, N.C. facility.

Selling, general and administrative expenses were $9.2 million in 1998, and
$9.2 million in 1997. Operating income was $5.0 million, or 5.3% of net sales
in 1998 compared to $4.3 million, or 4.6% of net sales in 1997.

Agriculture: Juliana had an operating loss of $0.1 million on revenues of
$2.2 million in 1998. Revenues and direct expenses from the 1998 harvest were
recognized in the fourth quarter, and these fourth quarter amounts are not
representative of a full year. Prior to October 1998, Reunion Industries
accounted for its wine grape agriculture operations on the equity method.

Corporate General and Administrative Expense: Corporate general and
administrative expenses, consisting primarily of executive and administrative
salaries and benefits, professional fees and other public company costs,
totaled $2.1 million for the year ended December 31, 1998 compared to $1.8
million for the year ended December 31, 1997. The 1998 and 1997 amounts
included approximately $0.6 million and $0.4 million, respectively, in legal
costs for Reunion Industries' Bargo litigation.

As a result of termination of the 1998 Merger Agreement with Chatwins Group
because of the inability to raise sufficient financing under then current
market conditions, Reunion Industries recorded a charge of $1.4 million in
1998 to write off accumulated legal, investment banking and other costs
related to the merger.

Other Income and Expense: Interest expense was $3.2 million in 1998 compared
to $3.3 million for the prior year. Reunion Industries also recorded a charge
of $9.2 million during 1998 to record entry of the judgment in Reunion
Industries' litigation with Bargo, accrual of interest on the judgment and
letter of credit and guarantee fees related to obtaining a supersedeas bond to
appeal the judgment.

Reunion Industries participated in the wine grape agriculture industry
through its equity investment in the Juliana Preserve joint venture in 1997
and until September 1998. Reunion Industries recognized a loss of $0.4 million
in 1998 and income of $0.3 million in 1997 from its equity interest in the
Preserve's results of operations. In addition, Reunion Industries recorded a
charge of $0.9 million in 1997 for its equity in the write off of development
costs by the joint venture.

Income Tax Expense: In August 1998, Reunion Industries reached a settlement
with the IRS on its appeal of the denial of Reunion Industries' request for
refund of Alternative Minimum Tax paid in 1990 and 1991. As a result of the
settlement, Reunion Industries received refunds totaling $0.7 million
including interest. Because of the uncertainty over realization of the refund,
Reunion Industries had recorded an allowance of $0.8 million in 1996 for the
possible denial of the refund claim with a corresponding charge to income tax
expense. As a result of the settlement, Reunion Industries recorded an income
tax benefit of $0.7 million in 1998.

Discontinued Operations

Reunion Industries recognized income from discontinued operations of $0.3
million in 1999. Income from payments from an insurance company on claims
relating to the offshore drilling business discontinued in 1993 totaled $0.7
million, and Reunion Industries recorded a $0.4 million as a result of the
settlement of a California tax audit. Reunion Industries recorded a $1.2
million discontinued operations charge in 1998 to increase its accrual for
estimated environmental remediation costs relating to oil and gas properties
in Louisiana.

Liquidity and Capital Resources

Summary of 1999 Activities

Cash and cash equivalents totaled $2.5 million at December 31, 1999. During
the year ended December 31, 1999, cash increased $0.5 million, with $1.6
million used in operations, $0.5 million used in investing activities and $2.1
million provided by financing activities.

Investing Activities: Capital expenditures were $1.3 million and proceeds
from the sale of agricultural land were $1.8 million.

Financing Activities: Proceeds from new term loan borrowings totaled $13.5
million, consisting of Juliana's $7.5 million refinancing and the $6.0 million
borrowing under the ORCplastics credit facility to fund the Bargo litigation
settlement payment. Principal payments reduced long-term obligations by $9.2
million, including $5.7 million repaid from the proceeds of the Juliana
refinancing. Net short term borrowings were reduced $1.9million.

Factors Affecting Future Liquidity

Prior to the Chatwins Group merger, corporate expenses, including salaries
and benefits, professional fees and other public company costs, were expected
to be approximately $1.5 million annually. In addition, approximately $0.5
million of the $1.4 million accrued for environmental remediation of the
Louisiana properties, described below under "Contingencies and Uncertainties,"
is expected to be expended during the next twelve months. The Company's source
of funds for these expenses, other than from additional borrowings, was from
cash balances and permitted payments by ORC and Juliana. The corporate cash
balance at December 31, 1999 was $0.2 million. Without additional financing,
management believed that the Company would not have sufficient resources to
meet its corporate expenses and legal and environmental costs as they became
due over the next twelve months.

ORCplastics closed a credit facility with The CIT Group/Business Credit,
Inc. ("CITBC") in October 1998. This credit facility limited payments to
Reunion by ORCplastics and Juliana. Management believed that ORC's cash flow
from operations, together with the CITBC credit facility and permitted levels
of capital and operating leases, would be sufficient for ORC's operating
requirements, including capital expenditures and debt service, over the next
twelve months. However, there were no assurances that ORCplastics would be
able to maintain the required levels of availability and be permitted to make
payments to Reunion. In any event, the maximum amount of such payments was not
expected to be sufficient for Reunion's corporate operating and debt service
requirements.

Juliana is continuing its efforts to sell the remaining vineyard property,
but there is no assurance that it will be able to do so at a reasonable price
or at all. If Juliana is unable to sell additional parcels, it may not have
been possible to fund its operating requirements over the next twelve months
without additional financing.

Refinancing

Senior Secured Credit Facilities. Simultaneously with the Chatwins Group
merger, Reunion Industries entered into senior secured credit facilities with
Bank of America and other lenders. These credit facilities consist of a $39.0
million revolving credit facility, a $25.8 million term loan A facility
amortizing in 84 monthly principal payments, a $5.0 million term loan B
facility amortizing in 36 monthly principal payments, and a $2.7 million
capital expenditures facility amortizing in 60 monthly principal payments.
These facilities have a three-year initial term and automatically renew for
additional one-year increments unless either party gives the other notice of
termination at least 60 days prior to the beginning of the next one-year term.
Reunion Industries paid closing fees to Bank of America of approximately $1.0
million.

Interest on loans outstanding under the Bank of America facilities, other
than term loan B, is payable monthly at variable rates tied to either Bank of
America's prime rate, as that term is defined in the financing agreements, or
LIBOR, at the option of Reunion Industries. The interest rate tied to the
prime rate is initially the prime rate plus 0.50% for the revolving credit
facility and the prime rate plus 0.75% for the term loan and capital
expenditures facilities. The interest rate tied to LIBOR is initially LIBOR
plus 2.75% for the revolving credit facility and LIBOR plus 3.00% for the term
loan and capital expenditure facilities. These interest rates will be subject
to quarterly adjustment after the first year based on the ratio of Reunion
Industries' total funded debt to earnings before interest, taxes, depreciation
and amortization. Interest on term loan B is payable monthly at a fixed rate
of 15%. Additional interest will accrue on term loan B to yield a total return
of 20%. The additional interest is payable when term loan B if fully repaid.

The Bank of America credit facilities are collateralized by a first priority
lien on substantially all of the current and after-acquired assets of Reunion
Industries including, without limitation, all accounts receivable, inventory,
property, plant and equipment, chattel paper, documents, instruments, deposit
accounts, contract rights and general intangibles.

covenants, including limitations on stockholder and related party
distributions. The facilities require Reunion Industries to pay the reasonable
expenses incurred by the lenders in connection with the facilities. Available
borrowings under the Bank of America revolving credit facility are based upon
a percentage of eligible receivables and raw materials, finished goods and
work in process inventories.

Proceeds from initial borrowings under the Bank of America credit facilities
were used to repay ORCplastics' credit facilities with CITBC (see Note 8), to
repay Chatwins Group's credit facilities with Bank of America, to repay
certain debt in the Kingway acquisition and to retire $25.0 million of
Chatwins Group's 13% senior notes. The Company had approximately $3.8 million
of borrowing availability after the initial borrowings. Management believes
that the Company's cash flow from operations, together with these credit
facilities, will be sufficient for the Company's operating requirements,
including capital expenditure and debt services, over the next twelve months.

13% Senior Notes. Reunion Industries assumed the obligations of Chatwins
Group under the indenture governing the remaining $25.0 million of 13% senior
notes. The Indenture provides that up to $2.5 million principal amount of the
13% senior notes is scheduled to be repaid in May 2001, $12.5 million is
scheduled to be repaid in May 2002 and the remaining balance is scheduled to
be repaid in May 2003. The Indenture governing the 13% senior notes also
includes covenants which restrict or prohibit: incurrence of indebtedness
outside its revolving credit facility unless interest coverage tests are met;
dividends, stock repurchases, loans, investments and retirements of junior
debt; liens and encumbrances on assets; transactions with affiliates; sales of
assets at less than fair value and for less than 75% cash consideration; and
mergers, consolidations and the sale of substantially all assets.

The indenture also requires that the company maintain EBITDA (as defined in
the indenture) of at least $7.2 million on a last twelve months basis at the
end of each fiscal quarter and that the company offer to repurchase some or
all of the 13% senior notes upon a change of control or the sale of a
significant amount of assets where the proceeds are not reinvested in other
manufacturing assets within 180 days of the sale.

Year 2000 Computer Compliance

The year 2000 issue refers to the potential for disruption to business
activities causes by system and processing failures of date-related
calculations, and is the result of computer-controlled systems using two
digits rather than four to define the applicable year. For example, computer
programs that have time-sensitive software may recognize a date using "00" as
the year 1900 rather than the year 2000. This could result in system failure
or miscalculation causing disruptions of operations, including among other
things, a temporary inability to process transactions, send invoices, or
engage in similar normal business activities.

To date, we have not experienced any material year 2000 issues.
Additionally, we have no reason to believe that any material third parties
with whom we deal have had any material year 2000 issues. However, we cannot
assure you that we will not experience any disruption due to year 2000 issues
in the future. We continue to monitor our systems and third parties for any
year 2000 problems.

We have incurred total costs of approximately $0.02 million in our
assessment and remediation of potential year 2000 issues. We do not expect
that we will have to incur any material costs relating to the year 2000 in the
future.

Contingencies and Uncertainties

estimates of the remaining remediation costs. During 1999, Reunion Industries
conducted remediation work on the property. Reunion Industries paid $0.2
million of the total cost of $0.3 million. At December 31, 1999, the balance
accrued for these remediation costs is approximately $1.3 million. A
regulatory hearing was held in January 2000 to consider the adequacy of the
remediation conducted to date. No decision has been rendered to date, but
Reunion Industries does not believe that the cost of future remediation will
exceed the amount accrued. Owners of a portion of the property have objected
to Reunion Industries' proposed cleanup methodology and have filed suit to
require additional procedures. Reunion Industries is contesting this
litigation, and believes its proposed methodology is well within accepted
industry practice for remediation efforts of a similar nature. No accrual has
been made for any costs of any alternative cleanup methodology which might be
imposed as a result of the litigation.

ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk

In the operation of its business, Reunion Industries has market risk
exposures to foreign currency exchange rates, raw material prices and interest
rates. Each of these risks and Reunion Industries' strategies to manage the
exposure is discussed below.

Reunion Industries manufactures its products in the United States and
Ireland and sells products in those markets as well as in Europe.
International sales were 30% of Reunion Industries' sales in 1999, 28% in 1998
and 18% in 1997. Reunion Industries' operating results could be affected by
changes in foreign currency exchange rates or weak economic conditions in
Europe. Reunion Industries does not actively hedge its foreign currency risk
because the international operations are self-financed and the translation
exposure is not considered material to Reunion Industries' financial
condition, liquidity or results of operations.

The principal raw materials used by Reunion Industries are thermoplastic
polymers. These materials are available from a number of suppliers. Prices for
these materials are affected by changes in market demand, and there can be no
assurances that prices for these and other raw materials will not increase in
the future. Reunion Industries' contracts with its customer generally provide
that such price increases can be passed through to the customers.

Reunion Industries' operating results are subject to risk from interest rate
fluctuations on debt which carries variable interest rates. The variable rate
debt was approximately $19.4 million at December 31, 1999, which is
representative of balances outstanding during the year. A 0.25% change in
interest rates would affect results of operations by approximately $0.05
million.

ITEM 8. Consolidated Financial Statements and Supplementary Data

Reunion Industries' consolidated financial statements are set forth
beginning at Page F-1.

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

Not applicable.

PART III

ITEM 10. Directors and Executive Officers of the Registrant*

ITEM 11. Executive Compensation*

ITEM 12. Security Ownership of Certain Beneficial Owners and Management*

ITEM 13. Certain Relationships and Related Transactions*
- --------
* Items 10, 11, 12 and 13 are incorporated by reference to the Registrant's
Definitive Proxy Statement to be filed with the commission pursuant to
Regulation 14A under the Securities Exchange Act of 1934 within 120 days
after the close of the Registrant's fiscal year.

PART IV

ITEM 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a) Documents included in this report:

The following consolidated financial statements and financial statement
schedules of Reunion Industries, Inc. and its subsidiaries are included in
Part II, Item 8:

1. Financial Statements (Pages F-1 through F-31)

Report of Independent Public Accountants
Consolidated Balance Sheets--December 31, 1999 and 1998
Consolidated Statements of Operations--Years Ended December 31, 1999,
1998 and 1997
Consolidated Statements of Cash Flows--Years Ended December 31, 1999,
1998 and 1997
Consolidated Statements of Shareholders' Equity--Years Ended December
31, 1999, 1998 and 1997
Notes to Consolidated Financial Statements

2. Financial Statement Schedules (Pages S-1 through S-5)

Schedule I --Condensed Financial Information of Registrant
Schedule II--Valuation and Qualifying Accounts and Reserves

Other schedules have been omitted because they are either not required,
not applicable, or the information required to be presented is included
in Reunion Industries' financial statements and related notes.

3. Exhibits

See pages E-1 to E-2 for a listing of exhibits filed with this report
or incorporated by reference herein.

(b) Current Reports on Form 8-K

During the last quarter of the year ended December 31, 1999, Reunion
Industries did not file any Current Reports on Form 8-K.

SIGNATURES

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

Dated: March 27, 2000

Reunion Industries, Inc.

By: /s/ Joseph C. Lawyer
...............................
Joseph C. Lawyer,
President and Chief Operating
Officer

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

/s/ Charles E. Bradley
............................. Director, Chairman and Chief March 27, 2000
Charles E. Bradley Executive Officer (Principal
Executive Officer)

/s/ Richard L. Evans
............................. Executive Vice President of March 27, 2000
Richard L. Evans Administration and Secretary
(Principal Accounting and
Financial Officer Prior to March
16, 2000 Merger with Chatwins
Group, Inc.)

/s/ John M. Froehlich
............................. Executive Vice President of March 27, 2000
John M. Froehlich Finance and Chief Financial
Officer (Principal
Accounting and Financial Officer
subsequent to March 16, 2000
Merger with Chatwins Group,
Inc.)

/s/ Thomas N. Amonett
............................. Director March 27, 2000
Thomas N. Amonett

/s/ Kimball J. Bradley
............................. Director and Executive
Kimball J. Bradley Vice President of Operations
March 27, 2000

/s/ Thomas L. Cassidy
............................. Director March 27, 2000
Thomas L. Cassidy

/s/ W. R. Clerihue
............................. Director March 27, 2000
W. R. Clerihue

/s/ Joseph C. Lawyer
............................. Director, President and
Joseph C. Lawyer Chief Operating Officer
March 27, 2000

/s/ Franklin Myers
............................. Director March 27, 2000
Franklin Myers

/s/ John G. Poole
.............................
John G. Poole Director March 27, 2000

REUNION INDUSTRIES, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page
----

REPORT OF INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP............................................... F-2

CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheets.............................................. F-3
Consolidated Statements of Operations.................................... F-5
Consolidated Statements of Cash Flows.................................... F-6
Consolidated Statements of Stockholders' Equity.......................... F-7
Notes to Consolidated Financial Statements............................... F-8

F-1

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and
Stockholders of Reunion Industries, Inc.

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, of cash flows and of stockholders'
equity present fairly, in all material respects, the financial position of
Reunion Industries, Inc. and its subsidiaries (the "Company") at December 31,
1999 and 1998, and the results of their operations and their cash flows for
each of the three years in the period ended December 31, 1999, in conformity
with accounting principles generally accepted in the United States. These
financial statements are the responsibility of the Company's management; our
responsibility is to express an opinion on the consolidated financial
statements based on our audits. We conducted our audits of these statements in
accordance with auditing standards generally accepted in the United States,
which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.

As is further discussed in Note 2 to the Consolidated Financial Statements,
the Company completed a merger with Chatwins Group on March 16, 2000.

PRICEWATERHOUSECOOPERS LLP

Stamford, Connecticut
March 16, 2000

F-2

REUNION INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(In Thousands)

December 31,
---------------
1999 1998
------- -------

ASSETS
Current Assets:
Cash and Cash Equivalents.................................... $ 2,455 $ 2,009
Accounts Receivable, Less Allowance for Doubtful Accounts of
$302 and $360, respectively................................. 8,988 12,389
Inventories.................................................. 6,034 7,104
Customer Tooling-in-process.................................. 289 897
Restricted Cash--Custom Farming Deposits..................... 599 --
Notes Receivable--Related Party.............................. 350 --
Other Current Assets......................................... 468 803
------- -------
Total Current Assets....................................... 19,183 23,202
------- -------
Property, Plant and Equipment--Net............................. 37,637 41,353
------- -------
Other Assets:
Goodwill, net of Accumulated Amortization of $2,865 and
$2,170, respectively........................................ 7,676 8,371
Debt Issuance Costs.......................................... 528 1,088
Assets Held for Sale......................................... 222 376
Other........................................................ 1,065 484
9,491 10,319
------- -------
$66,311 $74,874
======= =======

See Accompanying Notes to Consolidated Financial Statements.

F-3

REUNION INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(In Thousands)

December 31,
------------------
1999 1998
-------- --------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current Portion of Long-term Debt........................ $ 11,383 $ 11,155
Short Term Debt--Related Parties......................... -- 1,015
Accounts Payable......................................... 7,629 8,684
Advances From Customers.................................. 489 1,249
Unearned Income--Custom Farming.......................... 599 --
Accrued Bargo Judgment................................... -- 8,425
Accrued Salaries, Vacation and Benefits.................. 1,529 1,688
Accrued Environmental Costs.............................. 1,460 1,723
Other Current Liabilities................................ 1,735 2,180
-------- --------
Total Current Liabilities.............................. 24,824 36,119
Long-Term Debt............................................. 19,613 15,245
Long-Term Debt--Related Parties............................ 1,017 1,385
Other Liabilities.......................................... 3,075 3,279
-------- --------
Total Liabilities...................................... 48,529 56,028
-------- --------
Redeemable Preferred Stock of Consolidated Subsidiary...... 524 607
Minority Interests......................................... 2,713 2,000
Commitments and Contingencies (Note 15):
Stockholders' Equity:
Common Stock ($.01 par value; 20,000 authorized; 3,940
and 3,900 issued and outstanding, respectively)......... 39 39
Additional Paid-in Capital............................... 29,402 29,332
Retained Earnings (Since January 1, 1989)................ (14,110) (12,961)
Foreign Currency Translation Adjustments................. (786) (171)
-------- --------
Total Stockholders' Equity............................. 14,545 16,239
-------- --------
$ 66,311 $ 74,874
======== ========

See Accompanying Notes to Consolidated Financial Statements.

F-4

REUNION INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)

Year Ended December 31,
--------------------------
1999 1998 1997
------- -------- -------

Operating Revenue:
Plastic Products and Services.................... $71,575 $ 95,064 $93,378
Agriculture...................................... 4,524 2,254 --
------- -------- -------
76,099 97,318 93,378
------- -------- -------
Operating Costs and Expenses:
Plastic Products and Services--Cost of Sales..... 60,801 80,861 78,871
Agriculture--Cost of Sales....................... 4,142 2,227 --
Writedown of Excess Equipment.................... -- -- 958
Selling, General and Administrative.............. 11,632 11,373 11,036
Provision for Merger and Refinancing Costs....... -- 1,362 --
------- -------- -------
76,575 95,823 90,865
------- -------- -------
Operating Income (Loss)............................ (476) 1,495 2,513
------- -------- -------
Other Income and (Expense):
Interest Expense................................. (3,392) (3,221) (3,267)
Provision for Bargo Judgment and Related Costs... (1,646) (9,239) --
Bargo Settlement Gain............................ 3,617 -- --
Equity In Income (Loss) of The Juliana Preserve.. -- (388) 330
Equity In Writedown of The Juliana Preserve Real
Estate Development Costs........................ -- -- (855)
Other, Including Interest Income................. 635 252 384
------- -------- -------
(786) (12,596) (3,408)
------- -------- -------
Loss From Continuing Operations Before Income
Taxes............................................. (1,262) (11,101) (895)
Income Tax Benefit (Expense)..................... (226) 661 (86)
------- -------- -------
Loss From Continuing Operations.................... (1,488) (10,440) (981)
------- -------- -------
Income (Loss) From Discontinued Operations:
Disposal of Oil and Gas Operations............... 339 (1,710) --
Disposal of Agriculture Operations............... -- -- 710
------- -------- -------
339 (1,710) 710
------- -------- -------
Extraordinary item--loss on extinguishment of debt. -- (233) --
------- -------- -------
Net Loss........................................... (1,149) (12,383) (271)
Foreign Currency Translation Adjustment............ (615) 214 (356)
------- -------- -------
Comprehensive Loss................................. $(1,764) $(12,169) $ (627)
======= ======== =======
Earnings per share--Basic and Diluted:
Loss from Continuing Operations.................. $ (0.38) $ (2.69) (0.25)
Income (Loss) from Discontinued Operations....... 0.09 (0.44) 0.18
Extraordinary Item............................... -- (0.06) --
------- -------- -------
Net Loss......................................... $ (0.29) $ (3.19) $ (0.07)
======= ======== =======
Weighted Average Number of Common Shares
Outstanding:
Basic and Diluted................................ 3,924 3,881 3,855
======= ======== =======

See Accompanying Notes to Consolidated Financial Statements.

F-5

REUNION INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)

Year Ended December 31,
--------------------------
1999 1998 1997
------- -------- -------

Cash Flows From Operating Activities:
Net Loss........................................... $(1,149) $(12,383) $ (271)
Adjustments to Reconcile Net Loss to Net Cash
Provided by (Used in) Operating Activities:
Depreciation and Amortization.................. 4,079 3,634 3,062
Goodwill Amortization.......................... 695 689 706
Debt Issuance Costs Amortization............... 885 1,157 --
Bargo Judgment Provision....................... 400 8,425 --
Bargo Settlement Gain.......................... (3,617) -- --
Bargo Settlement Payment....................... (5,000) -- --
Provision for Environmental Remediation........ -- 1,200 --
Provision for Tax Audit Settlement............. 370 510 --
Tax audit settement payment.................... (973) -- --
Impairment of Assets........................... -- -- 958
(Gain) Loss on Disposal of Discontinued
Operations.................................... -- -- (710)
Equity In Income of Joint Venture, Before
Depreciation.................................. -- (22) (640)
Write Off Of Joint Venture Costs............... -- -- 855
------- -------- -------
(4,310) 3,210 3,960
Changes in Assets and Liabilities, net of effects
from acquisitions:
(Increase) Decrease in Accounts Receivable..... 3,401 (16) 113
(Increase) Decrease in Inventories............. 1,070 503 (310)
Increase (Decrease) in Accounts Payable........ (1,055) (718) 530
Other.......................................... (675) (604) (258)
------- -------- -------
Net Cash Provided by (Used in) Operating
Activities........................................ (1,569) 2,375 4,035
------- -------- -------
Cash Flows From Investing Activities:
Sale of Property, Plant and Equipment............ 1,764 2,560 --
Purchase of Joint Venture Interest............... -- (2,178) --
Capital Expenditures............................. (1,290) (3,113) (3,868)
Loans to Related Party........................... (350) -- --
Sale of Discontinued Operations.................. -- -- 2,220
Other............................................ (614) 512 141
------- -------- -------
Net Cash Used in Investing Activities.............. (490) (2,219) (1,527)
------- -------- -------
Cash Flows From Financing Activities:
Debt issuance costs.............................. (325) (1,901) --
Proceeds from Issuance of Debt................... 13,500 7,102 2,746
Repayments of Debt............................... (9,229) (10,208) (3,889)
Increase (Decrease) in Short Term Borrowings..... (1,909) 3,439 (702)
Proceeds From Issuance of Subsidiary Preferred
Stock........................................... -- 586 --
Proceeds of Capital Grants....................... -- 300 --
Proceeds From Exercise of Common Stock Options
and Warrants.................................... 70 90 --
Other............................................ 37 1 --
------- -------- -------
Net Cash Provided by (Used in) Financing
Activities........................................ 2,144 (591) (1,845)
------- -------- -------
Effect of Exchange Rate on Cash.................... 361 359 15
------- -------- -------
Increase (Decrease) in Cash and Cash Equivalents... 446 (76) 678
Cash and Cash Equivalents at Beginning of Period... 2,009 2,085 1,407
------- -------- -------
Cash and Cash Equivalents at End of Period......... $ 2,455 $ 2,009 $ 2,085
======= ======== =======

See Accompanying Notes to Consolidated Financial Statements.

F-6

REUNION INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In Thousands)

Year Ended December 31,
------------------------------------------------
1999 1998 1997
--------------- --------------- --------------
Shares Amounts Shares Amounts Shares Amounts
------ -------- ------ -------- ------ -------

Common Stock, Par Value $.01
per Share:
Beginning Balance.......... 3,900 $ 39 3,855 $ 38 3,855 $ 38
Exercise of Stock Options
and Warrants.............. 40 45 -- -- --
----- -------- ----- -------- ----- -------
Ending Balance............. 3,940 39 3,900 39 3,855 38
----- -------- ----- -------- ----- -------
Additional Paid-in Capital:
Beginning Balance.......... 29,332 29,242 29,242
Exercise of Stock Options
and Warrants.............. 70 90 --
-------- -------- -------
Ending Balance............. 29,402 29,332 29,242
-------- -------- -------
Retained Earnings:
Beginning Balance.......... (12,961) (578) (307)
Net Loss................... (1,149) (12,383) (271)
-------- -------- -------
Ending Balance............. (14,110) (12,961) (578)
-------- -------- -------
Foreign Currency Translation
Adjustments:
Beginning Balance.......... (171) (385) (29)
Current Year Adjustments... (615) (214) (356)
-------- -------- -------
Ending Balance............. (786) (171) (385)
-------- -------- -------
Total Stockholders' Equity... 3,940 $ 14,545 3,900 $ 16,239 3,855 $28,317
===== ======== ===== ======== ===== =======

See Accompanying Notes to Consolidated Financial Statements.

F-7

REUNION INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999

(amounts in thousands, except share amounts)

NOTE 1. Organization and Summary of Significant Accounting Policies

Organization and Businesses

Reunion Industries, Inc. ("Reunion Industries") is the successor, by merger
effective April 19, 1996, to Reunion Resources Company. As used herein, the
term "Company" refers to Reunion Industries, its predecessors and its
subsidiaries unless the context indicates otherwise. The Company, through its
wholly owned subsidiary, Oneida Rostone Corp. ("ORC"), manufactures high
volume, precision plastic products and provides engineered plastics services.
The Company through its wholly owned subsidiary, Juliana Vineyards
("Juliana"), is also engaged in wine grape agricultural operations in Napa
County, California. The Company was previously primarily engaged in oil and
gas production in the United States; this business was discontinued in 1995.
Information presented in the footnotes is based on continuing operations
unless the context indicates otherwise.

As described in Note 2, Reunion Industries completed a merger with Chatwins
Group, Inc. ("Chatwins Group") and a related refinancing subsequent to year
end.

Principles of Consolidation

The consolidated financial statements include the accounts of Reunion
Industries and its majority owned subsidiaries. All significant intercompany
transactions and accounts are eliminated in consolidation. As described in
Note 6, Juliana purchased the interest of its joint venture partner in the
Juliana Preserve in September 1998 and, accordingly, the agricultural
operations are included on a consolidated basis subsequent to that date. Prior
to September 1998, the Company accounted for the agricultural operations on
the equity method.

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.
Significant estimates with regard to these financial statements include
estimates of the recoverable value of goodwill, estimates of amounts payable
in connection with certain litigation and environmental remediation (see Note
15) and estimates of the recoverable value of assets held for sale (see Notes
6 and 7).

Revenue Recognition

Revenue is recognized as products are delivered and services are provided to
customers. Revenues and costs associated with the production of customer tools
are deferred until the tools are completed and delivered to the customer.
These revenue and cost deferrals are classified as Advances from Customers and
Customer Tooling-in-process, respectively, in the Consolidated Balance Sheets.
Revenues for wine grape sales are recognized when grapes are delivered to
customers.

Cash and Cash Equivalents

Cash equivalents include time deposits, certificates of deposit and all
highly liquid instruments with maturities when purchased of three months or
less.

F-8

REUNION INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
DECEMBER 31, 1999

Inventories

Inventories are stated at the lower of cost or market. Cost is determined
using the first-in, first-out method. Work-in-process and finished goods
include material costs, labor costs and manufacturing overhead.

Property, Plant and Equipment

Property, plant and equipment is recorded at cost, including cost as
determined by the allocation of the purchase price in business acquisitions
accounted for using the purchase method. Expenditures for major renewals and
improvements are capitalized while expenditures for maintenance and repairs
not expected to extend the life of an asset are charged to expense when
incurred. Gains or losses are recognized when property and equipment is sold
or otherwise disposed of. Depreciation of property, plant and equipment is
provided on the straight-line method over their expected useful lives:

Plastic Products and Services:
Machinery and equipment.................................. 3 to 12 years
Buildings and improvements............................... 15 to 40 years
Land improvements........................................ 10 to 30 years
Agricultural Operations:
Land improvements........................................ 20 to 45 years
Equipment................................................ 5 to 45 years

Goodwill

Goodwill recorded as a result of business acquisitions is being amortized
using the straight-line method over 15 years. The Company periodically
evaluates whether circumstances indicate that the remaining carrying value of
goodwill may not be recoverable, using estimates of future cash flows over the
estimated remaining life of the goodwill. If such evaluation indicates that
the value has been impaired, a loss would be recognized.

Long-Lived Assets and Impairment

The Company reviews long-lived assets for impairment whenever circumstances
indicate that the carrying amount of the asset may not be recoverable, and
recognizes an impairment loss when the future cash flows expected to be
generated by the asset are less than the carrying amount of the asset. Long-
lived assets held for sale, other than assets to be disposed of in connection
with disposal of a discontinued business segment, are reported at the lower of
carrying amount or fair value less cost to sell.

Grants

Capital grants have been received from the Irish Government Development
Agency towards the cost of new buildings and equipment. Capital grants for
purchased assets are recorded as deferred credits on the balance sheet and
amortized to income over the useful lives of the related assets. Capital
grants for leased assets reduce the net present value of lease payments
capitalized as leased machinery. Training and feasibility study grants are
credited against the related expenses (principally training and travel
expenses) as such costs are incurred.

Translation of Foreign Currencies

All amounts in the accompanying consolidated financial statements are
denominated in U.S. dollars. Assets and liabilities of foreign subsidiaries
whose local currency is the functional currency are translated at exchange
rates in effect at the balance sheet date. Revenues and expenses of these
subsidiaries are translated at average

F-9

REUNION INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
DECEMBER 31, 1999

exchange rates during the period. Translation gains and losses are not
included in results of operations, but are accumulated as a separate component
of stockholders' equity. Gains and losses from foreign currency transactions
are included in results of operations.

Environmental Policies

Environmental expenditures that relate to current operations are either
expensed or capitalized depending on the nature of the expenditure.
Expenditures relating to conditions caused by past operations that do not
contribute to current or future revenue generation are expensed. Liabilities
are recorded when environmental assessments and/or remediation actions are
probable, and the costs can be reasonably estimated (see Note 15).

Income Taxes

The Company provides deferred income taxes for all temporary differences
between financial and income tax reporting using the liability method.
Deferred taxes are determined based on the estimated future tax effect of
differences between the financial statement and tax bases of assets and
liabilities given the provisions of enacted tax laws. A valuation allowance is
recorded for net deferred tax assets if it is more likely than not that such
assets will not be realized. The Company has significant net operating loss
and investment tax credit carryforwards for tax purposes, a portion of which
may expire unutilized (see Note 12).

Earnings Per Share

Basic earnings per share is computed based on the weighted average number of
common shares outstanding during the period. Diluted earnings per share gives
effect to all dilutive potential common shares outstanding during this period.
Potential common shares include shares issuable upon exercise of the Company's
stock options and warrants (see Note 11).

Potential common shares relating to options and warrants to purchase common
stock aggregating 210,000, 335,785 and 215,750, respectively, were not
included in the weighted average number of shares for the years ended December
31, 1999, 1998 and 1997 because their effect would have been anti-dilutive.

Accounting Pronouncements

The Financial Accounting Standards Board (FASB) has issued the following
accounting pronouncement which the company will be required to adopt in future
periods:

FASB Statement No. 133 "Accounting for Derivative Instruments and Hedging
Activities" requires that derivative instruments such as options, forward
contracts and swaps be recorded as assets and liabilities at fair value and
provides guidance for recognition of changes in fair value depending on the
reason for holding the derivative. The Company does not presently have
significant transactions involving derivative instruments, but may do so in
the future. The Company is required to adopt Statement No. 133 for the first
quarter of 2001 and may adopt it earlier.

Supplemental Cash Flow Information

1999 1998 1997
------ ------ ------

Supplemental disclosure of cash flow information:
Cash paid for interest during the periods............. $3,172 $2,719 $3,093
Cash paid for income taxes during the periods......... 116 103 285
Supplemental disclosure of non-cash investing and
financing activities:
Assets acquired through capital leases................ 1,199 572 254
Debt issued for acquisition of joint venture
interests............................................ -- 3,700 --

F-10

REUNION INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
DECEMBER 31, 1999

NOTE 2. Subsequent Events: Merger, Refinancing and Related Matters

Chatwins Group Merger

On March 16, 2000, Reunion Industries completed a merger with Chatwins
Group, which prior to the merger owned approximately 37% of the Company's
common stock (see Note 13). The merger was approved by the Company's Board of
Directors in July 1999 and by its stockholders in December 1999, subject to
certain conditions, including the completion of a refinancing that would
retire certain debt and provide adequate working capital after the merger. As
described below, the Company entered into credit facilities with Bank of
America and others simultaneously with the merger.

To complete the merger, Reunion Industries issued 9,500,000 shares of common
stock to holders of Chatwins Group's common stock. Cash was paid in lieu of
issuing fractional shares. The 1,450,000 shares of the Company's common stock
previously owned by Chatwins Group were retired in the merger. As a result of
the merger, the Chatwins Group stockholders own approximately 79% of the
Company's common stock. The merger agreement also provides that up to an
additional 500,000 shares of common stock will be issued to the Chatwins Group
stockholders if the former Chatwins Group businesses achieve specified
performance levels in 2000.

The merger will be accounted for as a purchase under APB Opinion No. 16
"Business Combinations" with Chatwins Group as the acquirer for purposes of
applying purchase accounting. Accordingly, the Chatwins Group assets and
liabilities will be accounted for at historical book values and the assets and
liabilities of Reunion Industries will be revalued at their fair value. The
excess of purchase price over fair value of assets acquired and liabilities
assumed (goodwill), if any, for the acquisition of the approximately 63% of
Reunion Industries common stock not previously owned by Chatwins Group will be
capitalized and amortized over 15 years.

Refinancing

Senior Secured Credit Facilities. Simultaneously with the merger, Reunion
Industries entered into senior secured credit facilities with Bank of America.
These credit facilities consist of a $39,000 revolving credit facility, a
$25,800 term loan A facility amortizing in 84 monthly principal payments, a
$5,000 term loan B facility amortizing in 36 monthly principal payments and a
$2,700 capital expenditures facility amortizing in 60 monthly principal
payments. These facilities have a three-year initial term and automatically
renew for additional one-year increments unless either party gives the other
notice of termination at least 60 days prior to the beginning of the next one-
year term. Reunion Industries paid closing fees to Bank of America of $994.

Interest on loans outstanding under the Bank of America facilities, other
than term loan B, is payable monthly at variable rates tied to either Bank of
America's prime rate, as that term is defined in the financing agreements, or
LIBOR, at the option of Reunion Industries. The interest rate tied to the
prime rate is initially the prime rate plus 0.50% for the revolving credit
facility and the prime rate plus 0.75% for the term loan and capital
expenditures facilities. The interest rate tied to LIBOR is initially LIBOR
plus 2.75% for the revolving credit facility and LIBOR plus 3.00% for the term
loan and capital expenditure facilities. These interest rates will be subject
to quarterly adjustment after the first year based on the ratio of Reunion
Industries' total funded debt to EBITDA as defined in the financing
agreements. Interest on term loan B is payable monthly at a fixed rate of 15%.
Additional interest will accrue on term loan B to yield a total return of 20%.
The additional interest is payable when term loan B if fully repaid.

The Bank of America credit facilities are collateralized by a first priority
lien on substantially all of the current and after-acquired assets of Reunion
including, without limitation, all accounts receivable, inventory, property,
plant and equipment, chattel paper, documents, instruments, deposit accounts,
contract rights and general intangibles.

F-11

REUNION INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
DECEMBER 31, 1999

The facilities require Reunion Industries to comply with financial covenants
and other covenants, including cash flow coverage and leverage tests. In
addition, the facilities contain various affirmative and negative covenants,
including limitations on stockholder and related party distributions. The
facilities require Reunion Industries to pay the reasonable expenses incurred
by the lenders in connection with the facilities. Available borrowings under
the Bank of America revolving credit facility are based upon a percentage of
eligible receivables and raw materials, finished goods and work in process
inventories.

Proceeds from initial borrowings under the Bank of America credit facilities
were used to repay ORC's credit facilities with CITBC (see Note 8), to repay
Chatwins Group's credit facilities with Bank of America, to repay certain debt
in the Kingway acquisition (described below) and to retire $25,000 of Chatwins
Group's 13% senior notes. The Company had approximately $3,800 of borrowing
availability after the initial borrowings.

13% Senior Notes. Reunion Industries assumed the obligations of Chatwins
Group under the indenture governing the remaining $24,975 of 13% senior notes.
The Indenture provides that up to $2,525 principal amount of the 13% senior
notes is scheduled to be repaid in May 2001, $12,500 is scheduled to be repaid
in May 2002 and the remaining balance is scheduled to be repaid in May 2003.
The Indenture governing the 13% senior notes also includes covenants which
restrict or prohibit: incurrence of indebtedness outside its revolving credit
facility unless interest coverage tests are met; dividends, stock repurchases,
loans, investments and retirements of junior debt; liens and encumbrances on
assets; transactions with affiliates; sales of assets at less than fair value
and for less than 75% cash consideration; and mergers, consolidations and the
sale of substantially all assets.

The indenture also requires that the company maintain EBITDA (as defined in
the indenture) of at least $7,200 on a last twelve months basis at the end of
each fiscal quarter and that the company offer to repurchase some or all of
the 13% senior notes upon a change of control or the sale of a significant
amount of assets where the proceeds are not reinvested in other manufacturing
assets within 180 days of the sale.

Kingway Acquisition

Simultaneously with the Chatwins Group merger and the refinancing, Reunion
Industries also acquired Kingway (a related party--see Note 13). Kingway
manufactures gravity flow storage racks and computer-assisted picking systems,
primarily for warehouse material handling applications. Reunion Industries
paid $100 for Kingway's common stock and issued 5,000 shares of Series B
Preferred Stock (See Note 10) to acquire Kingway. Reunion Industries also
repaid $7,296 of debt and assumed $2,998 of debt in the acquisition. Kingway's
revenues, operating income and net loss were $17,528, $2,704 and $145,
respectively, for 1999.

Since May 1998, Kingway has been operating in the facilities of Chatwins
Group's Auto-Lok division under a services agreement that provides that
Kingway would use Auto-Lok's surplus floor space, production workforce,
administrative organization and equipment in exchange for fees approximately
equal to Auto-Lok's costs. Subsequent to the merger and acquisition, Kingway
and Auto-Lok will be integrated into a single business unit.

Stockholder Lawsuit

In December 1999, a stockholder of Reunion Industries filed a purported
class-action lawsuit in Delaware Chancery Court alleging, among other things,
that Reunion Industries' public stockholders would be unfairly diluted in the
merger with Chatwins Group. The lawsuit sought to prevent completion of the
merger, and, the merger having been completed, seeks rescission of the merger
or awarding of damages. The lawsuit is in its early stages and discovery has
not begun. However, the Company intends to vigorously contest it.

F-12

REUNION INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
DECEMBER 31, 1999

NOTE 3. Litigation and Tax Audit Settlements

Bargo Energy Company Litigation

In June 1999, the Company and Bargo Energy Company reached agreement on the
terms of a settlement of their litigation concerning a November 1995 stock
purchase agreement for the sale of the Company's subsidiary, Reunion Energy
Company ("REC") to Bargo. In July 1998, the trial court had entered judgment
affirming a jury finding awarding Bargo $5,000 in punitive damages and
awarding approximately $3,000 in attorneys' fees and costs. The Company's
appeal was pending when the settlement was reached.

On July 15, 1999, the Company and Bargo signed the settlement agreement, the
Company paid Bargo $5,000 and the parties released all claims against each
other. As described in Note 8, the settlement payment was funded by a
temporary overadvance on ORC's revolving credit facility.

Through June 1999, the Company had recorded provisions totaling $8,825 for
the trial court judgment plus interest at 10% and $2,060 for credit support
and guarantee fees related to the bond filed by the Company to suspend
execution on the judgement while the Company appealed. As a result of the
settlement, the Company recognized a gain in June 1999 of $3,617, the amount
by which the recorded provisions exceeded the settlement amount plus remaining
credit support costs.

California Tax Audit

In June 1999, the Company reached agreement with the California Franchise
Tax Board to settle the assessment of additional taxes for 1991, 1992 and
1993. The settlement agreement is subject to final approval by the State of
California, which management expects will be received. Under the settlement
agreement, Reunion paid $973, including interest. The settlement payment was
funded from the proceeds of a sale of a portion of the Company's vineyard
property in California. The Company accrued $595 in prior years for this
obligation based on settlement discussions. As a result of the settlement, the
Company accrued an additional $370 in June 1999, with a corresponding charge
to discontinued operations.

ITEM 4. Inventories

Inventories at December 31, 1999 and 1998 consisted of the following:

1999 1998
------ ------

Raw materials................................................... $3,011 $3,308
Work-in process................................................. 1,199 962
Finished goods.................................................. 1,824 2,834
------ ------
Total......................................................... $6,034 $7,104
====== ======

F-13

REUNION INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
DECEMBER 31, 1999

ITEM 5. Property, Plant and Equipment

Property, plant and equipment at December 31, 1999 and 1998 consisted of the
following:

1999 1998
------- -------

Plastic Products and Services:
Machinery and equipment................................... $20,352 $20,881
Buildings and improvements................................ 6,759 7,108
Land and improvements..................................... 543 559
------- -------
27,654 28,548
Accumulated depreciation.................................. (6,449) (5,139)
------- -------
Net..................................................... 21,205 23,409
------- -------
Agricultural Operations:
Land and improvements..................................... 18,437 19,243
Equipment................................................. 1,738 1,549
------- -------
20,175 20,792
Accumulated depreciation.................................. (3,743) (2,848)
------- -------
Net..................................................... 16,432 17,944
------- -------
Total property, plant and equipment, net.................... $37,637 $41,353
======= =======

Machinery and equipment includes assets acquired under capital leases which
have a net book value of $1,240 at December 31, 1999.

NOTE 6. Agricultural Operations

Juliana's wine grape agricultural operations consist of approximately 3,300
acres, of which approximately 970 acres are suitable for wine grape production
and of which approximately 335 acres are currently in production. This
property is located in Napa County, California within the boundaries of the
Napa Valley American Viticultural Area.

From October 1994 to September 1998, Juliana conducted its agricultural
operations through the Juliana Preserve (the "Preserve"), a joint venture
organized as a California general partnership. Juliana had a 71.7% interest in
the net income and net assets of the joint venture, but had a 50% voting
interest in matters concerning the operation, development and disposition of
the joint venture assets. In September 1998, Juliana purchased the interest of
its joint venture partner for $5,878, including closing costs. The purchase
was funded from the proceeds of the sale of three parcels for $2,700 and by a
$3,700 4-month note to the joint venture partner.

In December 1996, the Company adopted a plan to sell the vineyard property
and classified the agricultural operations as discontinued operations. The
Company was unsuccessful in finding a buyer for the entire property in 1997
and, as a result, reclassified the agricultural operations to continuing
operations and reversed the $710 estimated loss on disposal recognized in
1996. The Company continued its efforts to sell the remaining vineyard
property.

In August 1997, the Preserve sold approximately 520 acres, including
approximately 290 plantable acres, to a Napa Valley winery. The proceeds were
used to repay joint venture debt. In September 1998, Juliana sold
approximately 420 acres, including approximately 250 plantable acres, to an
Australian winery. The proceeds were used for the acquisition of the joint
venture partner's interests.

F-14

REUNION INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
DECEMBER 31, 1999

Also during 1998, Juliana formed the Juliana Mutual Water Company ("JMWC")
to own and operate the water storage and transmission system for the entire
property originally owned by the Preserve. Ownership of JMWC is generally in
proportion to plantable acres as specified in the JMWC bylaws. Ownership
interests attributable to the other property owners are shown as minority
interests in the Consolidated Balance Sheets.

In August 1999, Juliana sold approximately 260 acres, including
approximately 190 plantable acres, to a Napa Valley winery for net proceeds of
$1.8 million. The proceeds were used to pay the California tax settlement and
to repay related party debt. Juliana is attempting to sell substantially all
of the remaining property, but there can be no assurances that it will be able
to do so.

NOTE 7. Assets Held For Sale

In connection with the sale of REC, the Company retained certain oil and gas
properties in Louisiana because of litigation concerning environmental
matters. As described in Note 15, the Company is in the process of
environmental remediation of these properties. The Company intends to sell
these properties when the litigation is resolved. The net carrying value was
$84 at December 31, 1999, which the Company believes is realizable from the
sale of these interests.

The Company holds title to or recordable interests in federal and state
leases totaling approximately 55,000 acres near Moab, Utah, known as Ten Mile
Potash. Sylvanite, a potash mineral, is the principal mineral of interest and
occurrence in the Ten Mile Potash property. Ten Mile Potash has not yielded
any significant revenues, and the Company is pursuing the sale or farmout of
these interests. The carrying value for these properties is $138, which the
Company believes is realizable from the sale of these interests.

NOTE 8. Debt

Debt at December 31, 1999 and 1998 consisted of the following:

1999 1998
------- -------

CITBC Revolver.................................................. $ 8,044 $ 8,543
CITBC Term Loans................................................ 10,750 6,000
Other ORC Debt.................................................. 4,789 5,704
Juliana Debt.................................................... 7,413 6,092
Related Party Debt.............................................. 1,017 2,461
------- -------
Total Debt.................................................... $32,013 $28,800
======= =======
Current Portion of Long-Term Debt............................... $11,383 $11,155
Short-Term Debt-Related Parties................................. -- 1,015
Long-Term Debt.................................................. 19,613 15,245
Long-Term Debt--Related Parties................................. 1,017 1,385
------- -------
Total Debt.................................................... $32,013 $28,800
======= =======

CITBC Credit Facility

On October 19, 1998, ORC closed a financing under a Loan and Security
Agreement with the CIT Group/Business Credit, Inc. ("CITBC"). The agreement
provides a six-year senior secured credit facility including revolving credit
loans of up to $10,200 and a term loan in the initial amount of $6,000 for ORC
(the "CITBC Credit Facility"). The proceeds were used to refinance ORC'S debt
with Congress Financial Corporation ("Congress") and to provide working
capital for ORC. The initial borrowing under the CITBC Credit Facility totaled
$15,196 of which $13,941 was used to repay the debt with Congress and $1,255
was paid for fees and other loan costs. CITBC received fees totaling $1,100.

F-15

REUNION INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
DECEMBER 31, 1999

Borrowings under the revolving credit loans are subject to a collateral
availability formula based on 85% of eligible accounts receivable and 60% of
eligible raw materials and finished goods inventories, as such terms are
defined in the agreement. At December 31, 1999, ORC had $19 of revolving
credit availability. The term loans are repayable in quarterly installments of
$375. Interest is payable monthly at 0.25% above the Chase Manhattan Bank Rate
for revolving loans (8.75% at December 31, 1999) and at 0.50% above the Chase
Manhattan Bank Rate for the term loan (9.00% at December 31, 1999). The Loan
Agreement also required the maintenance of certain minimum earnings, minimum
ratio of earnings to interest expense, and minimum ratio of earnings to fixed
charges; limits annual capital expenditures; and limits amounts payable to
Reunion by ORC and Juliana.

The CITBC Credit Facility was collateralized by liens on substantially all
of ORC's assets and by guarantees of (i) ORC's subsidiary DPL Acquisition
Corp., which indirectly owns 80.47% of Data Packaging Limited ("DPL"), (ii)
Reunion, and (iii) Charles E. Bradley, President, Chief Executive Officer and
a director of the Company. The Company's guarantee was secured by (i) a pledge
of the stock of ORC, (ii) a pledge of the stock of Juliana and (iii) a cash
deposit of $438. Mr. Bradley's guarantee is secured by a pledge by Stanwich
Financial Services Corp. (a related party--see Note 13) of $6,000 of Partially
Convertible Subordinated 9% Notes of Consumer Portfolio Services, Inc.

The CITBC Credit Facility also provided a letter of credit guarantee to
provide credit support for a supersedeas bond in the Bargo litigation. Since
October 1998, substantially all the amounts otherwise permitted to be paid by
ORC to Reunion have been used to fund letter of credit and guarantee fees
relating to the bond in the Bargo litigation.

The $5,000 million settlement payment to Bargo in July 1999 was funded by a
temporary overadvance on the revolver portion of the CITBC Credit Facility and
the letter of credit was released. In August 1999, the CITBC Credit Facility
was amended to increase term loan A to $8,250 and provide for a $3,000 term
loan B. This amended facility replaced the temporary overadvance and provides
additional working capital for ORC. The guarantee by Mr. Bradley and the
pledges of collateral by Reunion and SFSC were continued under this amendment.
Substantially all the amounts permitted to be paid by ORC to Reunion are
expected to be used to fund continuing guarantee fees on this loan facility.

As discussed in Note 2, the CITBC Credit Facility was repaid on March 16,
2000.

Other ORC Debt

Other ORC debt includes a $1,183 10% unsecured note issued in connection
with the acquisition of DPL, a $1,017 11% note payable in quarterly
installments subject to a subordination agreement with CITBC; $469 of
variable-rate term loans from DPL's bank, payable in monthly installments over
twenty years; a $1,277 tax qualified Irish business expansion loan bearing
interest at 1% and payable in 2002 and $843 of capital lease obligations,
economic development loans and small business loans, generally collateralized
by equipment or other assets of ORC and DPL and bearing interest at rates
ranging from 3.8% to 16.4% at December 31, 1999.

Juliana Debt

Long term debt consists of a mortgage note payable to an insurance company
with a balance of $7,413 at December 31, 1999, bearing interest at 7.15% and
collateralized by certain Juliana land parcels.

During 1999, $1,095 was borrowed under a $1,500 crop loan with a bank,
bearing interest at prime rate plus 1.25%. The loan, which was fully repaid in
December 1999, was collateralized by certain wine grape sales contracts.

F-16

REUNION INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
DECEMBER 31, 1999

Related Party Debt

Beginning in August 1998, the Company borrowed funds for corporate working
capital from SFSC. These borrowings bear interest at 15% and were due to
mature September 30, 1998. SFSC agreed to extend the maturity date to December
31, 1999. The balance at December 31, 1998 was $1,015. The Company fully
repaid this debt during 1999.

Mr. Bradley holds a note from ORC in the amount of $1,017 bearing interest
at 11% per annum and subordinated to CITBC indebtedness except that if certain
conditions are met, regularly scheduled payments of interest may be paid when
due (see Note 13).

ORC was indebted to CGI Investment Corp. (a related party, see Note 13)
pursuant to a $250 promissory note dated May 21, 1993 bearing interest at 15%.
The note was subordinated to the prior payment of CITBC indebtedness except
that if certain conditions were met, monthly interest payments would be paid.
The note was subject to offset rights by ORC for certain environmental costs
incurred (See Note 15). In December, 1999, ORC settled this debt and the
offset rights for a payment of $20 and recognized a gain of $95 from the
settlement.

In 1997 and 1998, ORC entered into capital leases for machinery and
equipment with CPS Leasing, a subsidiary of Consumer Portfolio Services, Inc.
(a related party--See Note 13). The leases were for terms of two to three
years, and were fully amortized during 1999. The Company believes that the
terms of these leases were comparable to those available from third parties.

Maturities

The aggregate amounts of debt maturities are as follows:

2000................................................................. $11,383
2001................................................................. 1,901
2002................................................................. 3,167
2003................................................................. 1,886
2004................................................................. 7,129
Thereafter........................................................... 6,547
-------
Total.............................................................. $32,013
=======

NOTE 9. Employee Benefits

Pension Plans

The Company sponsors defined benefit pension plans for certain Oneida and
DPL employees.

Oneida Plan: ORC sponsors a defined benefit pension plan which covered
substantially all employees in Oneida's New York facilitiies. Benefits under
the pension plan are based on years of service and average compensation for
the five highest consecutive years. Annually, Oneida contributes the minimum
amount required by applicable regulations. Assets of the pension plan are
principally invested in fixed income and equity securities. Contributions are
intended to provide for benefits attributed to employees' service to-date and
for those benefits expected to be earned from future service.

Effective January 1, 1997, benefits for salaried employees except certain
executives were frozen under the Oneida plan. In conjunction with the freeze,
these employees are eligible to participate in the Company's merged

F-17

REUNION INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
DECEMBER 31, 1999

401(k) plan as described below. Oneida hourly employees continued to
participate in the Oneida pension plan. Effective June 15, 1999, all benefits
under the plan were frozen, and the remaining employees became eligible to
participate in the 401(k) plan. No additional benefits will be earned for
future service under the defined benefit plan. Oneida recognized a curtailment
gain of $63 in 1999.

The following table sets forth the change in benefit obligation for the
Oneida Plan for the years ended December 31, 1999, 1998 and 1997:

1999 1998
------ ------

Benefit obligation at beginning of year...................... $2,927 $2,263
Service cost............................................... 29 93
Interest cost.............................................. 200 168
Benefits paid.............................................. (84) (89)
Curtailment gain........................................... (63) --
Actuarial (gain) loss...................................... (433) 492
------ ------
Benefit obligation at end of year............................ $2,576 $2,927
====== ======

The following table sets forth the components of net periodic benefit costs
for the Oneida Plan for the years ended December 31, 1999, 1998 and 1997:

1999 1998 1997
----- ----- -----

Service cost........................................... $ 29 $ 93 $ 156
Interest cost.......................................... 200 168 151
Curtailment gain....................................... (63) -- (217)
Expected return on plan assets......................... (196) (167) (124)
----- ----- -----
Net periodic benefit cost.............................. $ (30) $ (94) $ (34)
===== ===== =====

DPL Plan: DPL sponsors a defined benefit pension plan for its salaried staff
employees. Benefits are based largely on years of service and salary over the
last three years of employment. A lump sum death benefit is also provided,
which is a multiple of salary. Hourly-paid employees are included for a modest
level of death benefit only. The cost of the plan is met entirely by
contributions paid by DPL. As recommended by its actuaries, DPL contributes a
level percentage of salary every year. These contributions are expected to
provide the benefits promised, allowing for future salary increases. The
assets of the plan consist entirely of units in a pooled fund operated by a
life assurance company.

The following table sets forth the change in benefit obligation cost for the
DPL Plan for the years ended December 31, 1999, 1998 and 1997:

1999 1998 1997
---- ---- ----

Benefit obligation at beginning of year.................... $743 $662 $593
Service cost............................................. 67 64 57
Interest cost............................................ 41 36 31
Actuarial (gain) loss.................................... (16) (19) (19)
---- ---- ----
Benefit obligation at end of year.......................... $835 $743 $662
==== ==== ====

F-18

REUNION INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
DECEMBER 31, 1999

The following table sets forth the components of net periodic benefit costs
for the DPL Plan for the years ended December 31, 1999, 1998 and 1997:

1999 1998 1997
---- ---- ----

Service cost............................................... $67 $ 64 $ 57
Interest cost.............................................. 41 36 31
Expected return on plan assets............................. (88) (85) (50)
---- ---- ----
Net periodic benefit cost.................................. $ 20 $ 15 $ 38
==== ==== ====

The following table sets forth the changes in plan assets and the funded
status of the plans based on the most recent actuarial valuations, which were
December 31, 1999, and 1998:

1999 1998
-------------------- --------------------
Oneida Plan DPL Plan Oneida Plan DPL Plan
----------- -------- ----------- --------

Plan assets at fair value,
beginning of year............... $2,197 $1,087 $1,959 $ 799
Actual return on plan assets..... 202 (12) 242 167
Employer contribution............ 51 102 85 121
Benefits paid.................... (84) (64) (89) --
------ ------ ------ ------
Plan assets at fair value, end of
year............................ $2,366 $1,113 $2,197 $1,087
====== ====== ====== ======
Funded status of plans........... $ 210 $ (278) $ 730 $ (344)
Unrecognized net gain (loss)..... 235 353 (204) 395
------ ------ ------ ------
Accrued pension cost............. $ 445 $ 75 $ 526 $ 51
====== ====== ====== ======

The following table sets forth the actuarial assumptions used to develop the
net periodic pension costs for the periods presented:

1999 1998 1997
---- ---- ----

Discount Rate:
Oneida Plan.............................................. 7.75% 7.0% 7.5%
DPL Plan................................................. 7.0% 8.0% 8.0%
Expected rate of return on plan assets:
Oneida Plan.............................................. 9.0% 9.0% 9.0%
DPL Plan................................................. 8.0% 9.0% 9.0%
Assumed compensation rate increase:
Oneida Plan.............................................. none 4.0% 4.0%
DPL Plan................................................. 5.0% 6.0% 6.0%

Deferred Compensation Plans

The Company sponsors qualified contributory 401(k) plans covering
substantially all domestic employees. Employees may elect to contribute up to
an annually determined maximum amount permitted by law, and the Company makes
matching contributions up to specified limits. The Company's contributions to
the plan in each of the three years ended December 31, 1999 were not material.

Postretirement Benefits Other Than Pensions

ORC provides health care benefits for certain of Rostone's salaried and
union retirees and their dependents under two separate but substantially
similar plans. Generally, employees are eligible to participate in the medical

F-19

REUNION INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
DECEMBER 31, 1999

benefit plans if, at the time of retirement, they have at least 10 years of
service and have attained 62 years of age. Rostone's medical benefit plans are
contributory via employee contributions, deductibles and co-payments and are
subject to certain annual, lifetime and benefit-specific maximum amounts.

The following table sets forth the change in the benefit obligation and the
funded status of the health care benefits for the years ended December 31,
1999, 1998 and 1997:

1999 1998 1997
------ ------ ------

Benefit obligation at beginning of year.............. $1,409 $1,621 $1,510
Service cost....................................... 50 43 52
Interest cost...................................... 101 94 109
Benefit payments................................... (62) (46) (50)
Amortization of gain............................... (130) (303) --
------ ------ ------
Benefit obligation at end of year.................... 1,368 1,409 1,621
Unrecognized net gain................................ 137 141 73
------ ------ ------
Postretirement benefit liability..................... $1,505 $1,550 $1,694
====== ====== ======

The following table sets forth the components of net periodic benefit costs
for the health care benefits for the years ended December 31, 1999, 1998 and
1997:

1999 1998 1997
---- ----- ----

Service cost............................................... $ 50 $ 43 $ 52
Interest cost.............................................. 101 94 109
Recognized actuarial (gain) loss........................... -- (349) --
---- ----- ----
Net periodic benefit cost.................................. $151 $(212) $161
==== ===== ====

Benefit costs were estimated assuming retiree health care costs would
initially increase at a 10.0% annual rate, decreasing gradually to 5.3% after
15 years. A 1.0% increase in the assumed health care cost trend rate would
have increased the APBO at December 31,1999 and postretirement benefit cost
for 1999 by $120 and $5, respectively. The discount rate used to estimate the
accumulated postretirement benefit obligation was 7.75% for 1999 and 6.5% for
1998 and 1997.

Health care benefits are funded as claims are paid. In 1999, 1998 and 1997,
Rostone's cash payments for such benefits were approximately $62, $46 and $50,
respectively.

Postemployment Benefits

Other than unemployment compensation benefits required by law, the Company
does not provide postemployment benefits to former or inactive employees.

NOTE 10. Stockholders' Equity

Authorized Capital

The Company's Certificate of Incorporation authorizes the issuance of
20,000,000 shares of common stock, par value $.01 per share, and 10,000,000
shares of "blank check" preferred stock, par value $.01 per share, and

F-20

REUNION INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
DECEMBER 31, 1999

includes certain capital stock transfer restrictions (the "Transfer
Restrictions") which are designed to prevent any person or group of persons
from becoming a 5% shareholder of the Company and to prevent an increase in
the percentage stock ownership of any existing person or group of persons that
constitutes a 5% shareholder by prohibiting and voiding any transfer or
agreement to transfer stock to the extent that it would cause the transferee
to hold such a prohibited ownership percentage. The Transfer Restrictions are
intended to help assure that the Company's substantial net operating loss
carryforwards will continue to be available to offset future taxable income by
decreasing the likelihood of an "ownership change" for federal income tax
purposes.

Preferred Stock

In December 1999, the Company's Board of Directors authorized two series of
preferred stock to be issued in connection with the Chatwins Group merger and
the Kingway acquisition. On March 16, 2000, the Company issued 9,033 shares of
Series A Preferred Stock in exchange for Chatwins Group's preferred stock and
5,000 shares of Series B Preferred Stock in exchange for Kingway's Preferred
Stock (see Note 2).

The Series A Preferred Stock has a redemption price of $9,033. Cumulative
dividends at 10% of the redemption price per annum are payable as and when
declared by the board of directors. Series A dividends are senior to dividends
on the Company's common stock but junior to dividends on Series B Preferred
Stock. Subject to Delaware law and restrictions in the Company's debt
agreements, Series A Preferred Stock may be redeemed at the Company's option
if no shares of Series B Preferred Stock are outstanding. The redemption
amount is the redemption price plus accumulated unpaid dividends.

The Series B Preferred Stock has a redemption price of $5,000. Cumulative
dividends at 15% of the redemption price per annum from November 2, 1997 are
payable as and when declared by the board of directors. The accumulated
dividends as of the date of the Kingway acquisition were $1,781. Series B
dividends are senior to dividends on the Company's common stock and to
dividends on Series A Preferred Stock. Subject to Delaware law and
restrictions in the Company's debt agreements, Series B Preferred Stock may be
redeemed at the Company's option. The redemption amount is the redemption
price plus accumulated unpaid dividends.

Dividends

No dividends have been declared or paid during the past three years with
respect to the common stock of the Company. Cash dividends are limited by the
availability of funds and by restrictions in the Company's debt agreements
(see Note 2).

NOTE 11. Stock Options and Warrants

At December 31, 1999, the Company has three stock option plans which are
described below. In implementing FASB Statement 123 "Accounting for Stock-
Based Compensation" in 1996, the Company elected to continue to apply the
provisions of APB Opinion 25 and related interpretations in accounting for its
plans. Stock option grants during the periods presented were all at exercise
prices equal to or above the current market price of the underlying security
and, accordingly, no compensation cost has been recognized for the Company's
stock option plans. At December 31, 1999, 869,000 shares of common stock were
reserved for issuance pursuant to these plans.

F-21

REUNION INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
DECEMBER 31, 1999

Had compensation cost for the Company's stock option plans been determined
based on the fair value at the grant dates for awards under those plans
consistent with the method of FASB Statement 123, the Company's net income and
earnings per share would have been reduced to the pro forma amounts as
indicated below:

1999 1998 1997
------- -------- ------

Net Loss................ As reported $(1,149) $(12,383) $ (271)
Pro forma $(1,199) $(12,667) $ (302)
Basic and Diluted
Net Loss per Share.... As reported $ (0.29) $ (3.19) $(0.07)
Pro forma $ (0.31) $ (3.26) $(0.08)

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: dividend yield of 0 percent for all years; expected volatility of
25%, risk-free interest rates of 5.5% to 5.7% and expected lives of 5 and 10
years in 1998. There were no options granted during 1999 and 1997. Expected
volatility was estimated based on historical performance of the Company's
stock prices and is not necessarily an indication of future stock movements.

1992 Option Plan

Effective July 1, 1992, the Board of Directors of the Company approved the
adoption of the 1992 Nonqualified Stock Option Plan (the "1992 Option Plan").
The 1992 Option Plan, as amended, authorized the grant of options and sale of
250,000 shares of common stock of the Company to key employees, directors and
consultants. No option granted under the 1992 Option Plan may be exercised
prior to six months from its date of grant or remain exercisable after ten
years from the grant date.

1992 Warrants

In addition, during 1992 the Company's Board of Directors approved the
issuance of warrants to a director and to a consultant to the Board of
Directors to purchase an aggregate of 150,000 shares of the Company's common
stock at $1.562 per share. The warrants became exercisable for two years on
July 1, 1993. In June 1995, the expiration date of these warrants was extended
to June 30, 1999. Warrants to purchase 37,500 shares were exercised in 1998
and to purchase 37,500 shares were exercised in 1999. The remaining warrants
to purchase 75,000 shares expired unexercised.

1993 Option Plan

Effective September 28, 1993, the Board of Directors of the Company approved
the adoption of the 1993 Incentive Stock Option Plan (the "1993 Option Plan")
for the granting of options or awards covering up to 250,000 shares of the
Company's common stock to officers and other key employees. Under the terms of
the 1993 Option Plan, the Compensation Committee of the Board of Directors is
authorized to grant (i) stock options (nonqualified or incentive), (ii)
restricted stock awards, (iii) phantom stock options, (iv) stock bonuses and
(v) cash bonuses in connection with grants of restricted stock or stock
bonuses. In July 1996, the Company granted 50,000 incentive stock options to
Richard L. Evans, the Company's Executive Vice President, Chief Financial
Officer and Secretary and 5,000 incentive stock options to another officer,
all at an exercise price of $4.375 per share. The options were fully vested in
July 1998, and are exercisable until July 2001. In February 1998, the Company
granted 20,000 options at an exercise price of $5.0625 to Mr. Evans, and in
May 1998, the Company granted 75,000 options at an exercise price of $7.21875
to Mr. Bradley. The options vest in installments through February 2000 and are
exercisable until February 2003 for Mr. Evans and vest in installments through
January 2003 and are exercisable until May 2003 for Mr. Bradley.

F-22

REUNION INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
DECEMBER 31, 1999

1998 Option Plan

On August 4, 1998, the Company's stockholders ratified the adoption by the
Board of Directors, on June 1, 1998, of the 1998 Stock Option Plan (the "1998
Option Plan"). The Compensation Committee of the Board of Directors is
authorized to grant incentive options and nonqualified options covering up to
600,000 shares of the Company's common stock to officers and other key
employees. On February 13, 1998, the Board of Directors, on recommendation by
the Compensation Committee, had conditionally granted options to purchase
15,000 shares of the Company's common stock to each of the five non-employee
Directors (excluding Mr. Bradley), subject to adoption of the plan by the
Board and ratification by the stockholders. The options have an exercise price
of $5.0625, vested immediately and are exercisable until February 2008.

A summary of the status of the Company's stock options and warrants as of
December 31, 1999, 1998 and 1997 and changes during the years ending on those
dates is presented below:

1999 1998 1997
------------------ ------------------ -----------------
Weighted- Weighted- Weighted-
Average Average Average
Exercise Exercise Exercise
Fixed Options Shares Price Shares Price Shares Price
- ------------- ------- --------- ------- --------- ------- ---------

Outstanding at beginning
of year................ 335,785 $4.29 215,750 $2.47 215,750 $2.47
Granted................. -- $ -- 170,000 $6.01 -- $ --
Exercised............... (40,035) $1.74 (44,965) $2.04 -- $ --
Forfeited/Expired....... (85,750) $1.99 (5,000) $4.44 $ --
Outstanding at end of
year................... 210,000 $5.71 335,785 $4.29 215,750 $2.47
Options exercisable at
year-end............... 154,600 $5.29 258,585 $3.55 193,750 $2.24
Weighted-average fair
value of options
granted during the
year:
Exercise price equal to
market price on date of
grant.................. $ -- $2.37 $ --
Exercise price greater
than market price on
date of grant.......... $ -- $1.94 $ --

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

Remaining Number Number
Contractual Outstanding Exercisable
Exercise Price Life at 12/31/99 at 12/31/99
-------------- ----------- ------------ -----------

$ 4.44 1.5 yrs. 40,000 40,000
$ 5.0625 3 yrs. 20,000 12,000
$ 5.0625 8 yrs. 75,000 75,000
$7.21875 3.5 yrs. 75,000 27,600
------- -------
210,000 154,600

F-23

REUNION INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
DECEMBER 31, 1999

NOTE 12. Taxes on Income

The components of the Company's income tax (benefit) expense are as follows:

Year Ended
December 31,
----------------
1999 1998 1997
---- ----- ----

Current
Federal...................................................... $ -- $(676) $ --
State........................................................ 64 15 86
Foreign...................................................... 162 -- --
---- ----- ----
226 (661) 86
Deferred..................................................... -- -- --
---- ----- ----
$226 $(661) $ 86
==== ===== ====

The Company files a consolidated U.S. federal income tax return and its U.S.
subsidiaries file combined or separate company income tax returns in states in
which they conduct business.

In September 1995, the Company amended its 1991 and 1992 Federal tax returns
to request a refund of Alternative Minimum Tax ("AMT") previously paid. The
refund resulted from the carryback of a capital loss originating from the
sale, in 1993, of the Company's common stock owned by a subsidiary of the
Company. The Company recorded a receivable for this refund in 1993 when the
transaction occurred. The IRS audited this refund request and issued a formal
IRS agent's report denying the refund claim, and asserting an additional tax
deficiency for 1993. The Company appealed the case to the IRS appeals
division. Because of the uncertainty over realization of the refund, the
Company recorded allowance of $750 for the possible denial of the AMT refund
with a corresponding charge to income tax expense in 1996. In August 1998, the
Company reached a settlement with the IRS on its appeal. As a result of the
settlement, the Company received refunds totaling $676, including interest,
and recorded an income tax benefit of $676 in 1998.

As part of the settlement, the IRS also confirmed the amounts of the
Company's net operating loss carryforwards ("NOLs") as of December 1993. Based
on the amounts confirmed, the amounts of the Company's NOLs as of December 31,
1999 expire as follows:

2000............................................................. $ 87,300
2001............................................................. 27,900
2002............................................................. 22,000
2003............................................................. 4,100
2004............................................................. 53,100
2005-2009........................................................ 9,900
2010-2019........................................................ 20,600
--------
$224,900

The Company's ability to use these NOL's to offset future taxable income
would be limited if an "ownership change" were to occur for federal income tax
purposes. As described in Note 10, the Transfer Restrictions are intended to
decrease the likelihood of such an ownership change occurring.

F-24

REUNION INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
DECEMBER 31, 1999

Significant components of the Company's deferred tax position at December
31, 1999 and 1998 are as follows:

1999 1998
-------- --------

Deferred tax liabilities:
Excess tax depreciation and bases differences of assets... $ (1,196) $ (1,645)
Other..................................................... (172) (210)
-------- --------
Total deferred tax liabilities.......................... (2,088) (1,855)
-------- --------
Deferred tax assets:
NOL and ITC carryforwards................................. 77,224 89,121
Bases differences of assets and liabilities............... 1,670 1,673
Provision for Bargo judgment.............................. -- 2,865
Other..................................................... 2,387 2,498
-------- --------
Total deferred tax assets............................... 81,281 96,157
-------- --------
Net deferred tax assets..................................... 79,193 94,302
Valuation allowance......................................... (79,193) (94,302)
-------- --------
$ -0- $ -0-
======== ========

The Company has continued to incur tax losses since emerging from bankruptcy
in 1988, and there can be no assurance that the Company will be able to
utilize the net operating and capital loss carryforwards in excess of those
required to offset temporary differences which will result in future taxable
income. Therefore, the Company has provided a valuation allowance for the net
deferred tax asset. This valuation allowance decreased $15,109 in 1999
(primarily due to expiration of NOL's) and increased $16,924 in 1998
(primarily due to adjustments of the NOL carryforwards in connection with the
IRS settlement).

NOTE 13. Related Party Transactions

Chatwins Group and Affiliates

At December 31, 1999 Chatwins Group owned 1,450,000 shares, or approximately
37%, of the Company's common stock. As discussed in Note 2, Chatwins Group and
the Company merged on March 16, 2000.

Charles E. Bradley, Sr., President, Chief Executive Officer and a director
of the Company, is the Chairman and a director of Chatwins Group and the
beneficial owner of approximately 57% of the outstanding common stock of
Chatwins Group. John G. Poole, a director of the Company, is a director of
Chatwins Group and Thomas L. Cassidy, a director of the Company, was a
director of Chatwins Group until June 1997.

ORC was indebted to CGI Investment Corp. ("CGII") pursuant to a $250
promissory note dated May 21, 1993. CGII is owned 51% by Stanwich Partners,
Inc. ("SPI") and 49% by Chatwins Group. Mr. Bradley, Mr. Poole and Mr. Evans
are officers, directors and/or stockholders of SPI. The note had an
outstanding balance of $477 (principal and accrued interest) on December 31,
1998, and was subordinated to the prior payment of indebtedness owing by ORC
to CITBC except that if certain conditions were met, regularly scheduled
monthly interest payments could be paid when due. ORC was also permitted to
recover certain environmental remediation costs relating to soil and ground
water contamination at Rostone's Lafayette, Indiana site by offset against
this note. In December, 1999 ORC and CGII agreed to settle this debt and the
offset rights for a net payment by ORC of $20.

F-25

REUNION INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
DECEMBER 31, 1999

To facilitate the closing of the CITBC Credit Facility, Mr. Bradley
guaranteed the obligations of ORC and Reunion Industries under the CITBC
Credit Facility, which was repaid on March 16, 2000. Mr. Bradley received a
credit support fee from the Company in an aggregate amount equal to 3% per
annum of the amount guaranteed, payable monthly. Mr. Bradley's rights to
payment of the monthly installments of the credit support fee were
subordinated to the prior payment of indebtedness owing by ORC to CITBC.

Mr. Bradley holds a note from ORC in the amount of $1,017 bearing interest
at 11% per annum that was subordinated to the prior payment of indebtedness
owing by ORC to CITBC and is now subordinated to indebtedness to Bank of
America except that if certain conditions are met, regularly scheduled
payments of interest may be paid when due.

In 1997 and 1998, ORC entered into leases for machinery and equipment with
CPS Leasing, a subsidiary of Consumer Portfolio Services, Inc. ("CPS"). Mr.
Bradley and Mr. Poole are directors and stockholders of CPS. The leases were
for terms of two to three years and were fully amortized in 1999. The Company
believes that the terms of these leases were comparable to those available
from third parties

The Company subleases from SPI approximately 1,500 square feet of office
space in Stamford, Connecticut for its corporate offices. The Company believes
that the terms of this sublease are comparable to those available from third
parties.

In May, 1997, the Company loaned $1,500 to SST Acquisition Corp., a company
in which Mr. Bradley and Mr. Poole are stockholders. The loan was repaid after
three days with interest at 9% plus a $15 transaction fee.

Beginning in February 1998, the Company entered into an arrangement for
flying services with Butler Air, Inc. ("Butler"). Mr. Bradley is a director of
Butler and the owner of 65% of Stanwich Aviation Company, Inc., of which
Butler is a wholly owned subsidiary. Butler provides charter flight services
for certain business travel by Company officers and employees at rates which
the Company believes are comparable to those available from third parties. The
Company paid a monthly minimum of $5, which was credited against services as
used. This arrangement was terminated in June 1999.

Beginning in August 1998, the Company borrowed funds for corporate working
capital from Stanwich Financial Service Corp. ("SFSC"). Mr. Bradley, Mr. Poole
and Mr. Evans are officers, directors and/or stockholders of SFSC. The debt
bears interest at 15% and was originally scheduled to mature September 30,
1998. SFSC agreed to extend the maturity to December 31, 1999 while the
Company looked for an alternative source of funds. This debt was fully repaid
in February and August 1999.

In August 1999, the Company loaned $310 to SFSC. The loan was scheduled to
be repaid in December 1999 with interest at 15%. In December 1999, the Company
agreed to extend the maturity to March 2000 and loaned an additional $40 to
SFSC, also with interest at 15% and maturing March 2000.

F-26

REUNION INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
DECEMBER 31, 1999

Under the arrangements described above, the consolidated financial
statements include the following amounts and balances:

Year ended
December 31,
--------------
1999 1998 1997
---- ---- ----

Interest Income:
SFSC.................................................... $ 15 $ -- $ --
Rent Expense:
CPS Leasing............................................. 218 167 64
SPI..................................................... 32 32 32
Travel Expense:
Butler.................................................. 55 73 --
Interest Expense:
Mr. Bradley............................................. 112 112 112
CGII.................................................... 33 38 38
SFSC.................................................... 38 25 --
Guarantee fees: Mr. Bradley............................... 666 190 41

As of December 31,
-------------------
1999 1998
--------- ---------

Current assets:
SFSC: notes receivable.............................. $ 350 $ --
SFSC: interest receivable........................... 15 --
Current liabilities:
SFSC: short-term debt............................... -- 1,015
CGII: interest...................................... -- 109
SFSC: interest...................................... -- 25
Butler: travel...................................... -- 18
Mr. Bradley: fees................................... 123 123
Long term debt-related parties:
Mr. Bradley......................................... 1,017 1,017
CGII................................................ -- 368

As of December 31,
-------------------
1999 1998
--------- ---------

Future minimum rental commitments under noncancellable
operating leases: CPS Leasing........................ $779 $937

ORC manufactures component parts for Stanwich Acquisition Corp. ("SAC,"
doing business as Kingway Material Handling Company). Mr. Bradley and Mr.
Evans are officers and directors of SAC and own 42.5% and 15%, respectively,
of SAC's common stock. Sales to SAC in 1999 and 1998 were $443 and, $209,
respectively, and were at margins equivalent to those earned on sales to third
party customers at comparable volumes. Receivables from SAC were $65 at
December 31, 1999.

The Company obtains its property, casualty and general liability insurance
coverage, as well as health care coverage for corporate and Juliana employees,
through a joint arrangement with Chatwins. The Company and Chatwins Group
share the costs in proportion to coverages.

F-27

REUNION INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
DECEMBER 31, 1999

NOTE 14. Segment Information

The Company operates in two business segments, which are identified based on
products and services.

The Company, through its wholly owned subsidiary ORC, manufactures high
volume, precision plastic products and provides engineered plastics services.
ORC's Oneida division and its DPL subsidiary design and produce injection
molded parts and provide secondary services such as hot stamping, welding,
printing, painting and assembly of such products. In addition, Oneida designs
and builds custom molds at its tool shops in order to produce component parts
for specific customers. ORC's Rostone division compounds and molds thermoset
polyester resins.

The Company, through its wholly owned subsidiary Juliana, is engaged in wine
grape vineyard development and the growing and harvesting of wine grapes for
the premium table wine market and provides custom farming services to certain
third parties that have acquired vineyard parcels from Juliana.

The following tables present information about the results of operations and
financial position of the Company's business segments:

Year Ended December 31,
--------------------------
1999 1998 1997
------- -------- -------

Revenues
Plastic products and services................... $71,575 $ 95,064 $93,378
Agriculture..................................... 4,524 2,254 --
------- -------- -------
$76,099 $ 97,318 $93,378
======= ======== =======
United States................................... $54,354 $ 70,196 $77,031
International (principally Ireland)............. $21,745 27,122 16,347
------- -------- -------
$76,099 $ 97,318 $93,378
======= ======== =======
Income before interest, taxes, and amortization
(EBITDA)
Plastic products and service.................... $ 5,514 $ 9,034 $ 7,926
Agriculture..................................... 1,008 118 (219)
Corporate and other............................. 382 (12,706) (1,567)
------- -------- -------
$ 6,904 $ (3,554) $ 6,140
======= ======== =======
Depreciation and amortization
Plastic products and services................... $ 3,876 $ 3,775 $ 3,457
Agriculture..................................... 897 547 306
Corporate and other............................. 1 4 5
------- -------- -------
$ 4,774 $ 4,326 $ 3,768
======= ======== =======
Income before interest and taxes (EBIT)
Plastic products and services................... $ 1,638 $ 5,259 $ 4,469
Agriculture..................................... 111 (429) (525)
Corporate and other............................. 381 (12,710) (1,572)
------- -------- -------
2,130 (7,880) 2,372
Interest expense.................................. (3,392) (3,221) (3,267)
------- -------- -------
Loss from continuing operations before income
taxes............................................ $(1,262) $(11,101) $ (895)
======= ======== =======
Capital Expenditures
Plastic products and services................... $ 2,025 $ 3,113 $ 3,868
Agriculture..................................... 464 -- --
Corporate and other............................. -- -- --
======= ======== =======
$ 2,489 $ 3,113 $ 3,868
======= ======== =======

F-28

REUNION INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
DECEMBER 31, 1999

As of December 31,
-------------------
1999 1998
--------- ---------

Total Assets
Plastic products and services...................... $ 45,836 $ 54,638
Agriculture........................................ 18,788 19,058
Corporate and other................................ 1,687 1,178
--------- ---------
$ 66,311 $ 74,874
========= =========
Property Plant and Equipment--Net
United States...................................... $ 31,233 $ 34,036
International (principally Ireland)................ 6,404 7,317
--------- ---------
$ 37,637 $ 41,353
========= =========

ORC did not have sales to a single customer that represented more than 10%
of ORC's sales during 1999. Accounts receivable at December 31, 1999 include
no significant geographic concentrations of credit risk. The Company performs
ongoing credit evaluations of its customers and generally does not require
collateral.

NOTE 15. Commitments and Contingencies

Legal Proceedings

The Company and its subsidiaries are the defendants in a number of lawsuits
and administrative proceedings, which have arisen in the ordinary course of
business of the Company and its subsidiaries. The Company believes that any
material liability which can result from any of such lawsuits or proceedings
has been properly reserved for in the Company's consolidated financial
statements or is covered by indemnification in favor of the Company or its
subsidiaries, and therefore the outcome of these lawsuits or proceedings will
not have a material adverse effect on the Company's consolidated financial
position, results of operations or cash flows.

Environmental Compliance

Various U.S. federal, state and local laws and regulations including,
without limitation, laws and regulations concerning the containment and
disposal of hazardous waste, oil field waste and other waste materials, the
use of storage tanks, the use of insecticides and fungicides and the use of
underground injection wells directly or indirectly affect the Company's
operations. In addition, environmental laws and regulations typically impose
"strict liability" upon the Company for certain environmental damages.
Accordingly, in some situations, the Company could be liable for clean up
costs even if the situation resulted from previous conduct of the Company that
was lawful at the time or from improper conduct of, or conditions caused by,
previous property owners, lessees or other persons not associated with the
Company or events outside the control of the Company. Such clean up costs or
costs associated with changes in environmental laws and regulations could be
substantial and could have a materially adverse effect on the Company's
consolidated financial position, results of operations or cash flows.

The Company's plastic products and service business routinely uses chemicals
and solvents, some of which are classified as hazardous substances. The
Company's oil and gas business and related activities routinely involved the
handling of significant amounts of waste materials, some of which are
classified as hazardous substances. The Company's vineyard operations
routinely use fungicides and insecticides, the handling, storage and use of
which is regulated under the Federal Insecticide, Fungicide and Rodenticide
Act, as well as California laws and regulations.

F-29

REUNION INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
DECEMBER 31, 1999

Except as described in the following paragraphs, the Company believes it is
currently in material compliance with existing environmental protection laws
and regulations and is not involved in any significant remediation activities
or administrative or judicial proceedings arising under federal, state or
local environmental protection laws and regulations. In addition to management
personnel who are responsible for monitoring environmental compliance and
arranging for remedial actions that may be required, the Company has also
employed outside consultants from time to time to advise and assist the
Company's environmental compliance efforts. Except as described in the
following paragraphs, the Company has not recorded any accruals for
environmental costs.

In February 1996, Rostone was informed by a contracted environmental
services consulting firm that soil and ground water contamination exists at
its Lafayette, Indiana site. The Company has expended $262 and has accrued an
additional $133 based on current estimates of remediation costs.

In connection with the sale of REC, the Company retained certain oil and gas
properties in Louisiana because of litigation concerning environmental
matters. The Company is in the process of environmental remediation under a
plan approved by the Louisiana Office of Conservation. The Company has
recorded an accrual for its proportionate share of the remaining estimated
costs to remediate the site based on plans and estimates developed by the
environmental consultants hired by the Company. During 1998 the Company
increased this accrual by a charge of $1,200 to discontinued operations, based
on revised estimates of the remaining remediation costs. During 1999, the
Company conducted remediation work on the property. The Company paid $172 of
the total cost of $300. At December 31, 1999, the remaining balance accrued by
the Company for remediation costs was $1,326. A regulatory hearing was held in
January 2000 to consider the adequacy of the remediation conducted to date. No
decision has been rendered to date, but the Company does not believe that the
cost of future remediation will exceed the amount accrued. Owners of a portion
of the property have objected to the Company's cleanup methodology and have
filed suit to require additional procedures. The Company is contesting this
litigation, and believes its proposed methodology is well within accepted
industry practice for remediation efforts of a similar nature. No accrual has
been made for costs of any alternative cleanup methodology which might be
imposed as a result of the litigation.

Operating Leases

At December 31, 1999, the Company's minimum rental commitments under
noncancellable operating leases for buildings and equipment are as follows:

2000............................................................... $ 911
2001............................................................... 822
2002............................................................... 713
2003............................................................... 468
2004............................................................... 230
Thereafter......................................................... 185
------
Total............................................................ $3,329
======

Total rental expenses were $921, $684 and $702 in 1999, 1998 and 1997,
respectively.

NOTE 16. Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value
of each class of financial instruments:

F-30

REUNION INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
DECEMBER 31, 1999

Cash and cash equivalents, accounts receivable and accounts payable. The
carrying amounts approximate fair value because of the short maturities of
these instruments.

Long term debt. Approximately 61% of the Company's long term debt has
variable rates of interest and 36% bears interest at fixed rates approximating
current market rates. Accordingly, management estimates that the carrying
amounts approximate the fair value, approximately $30,996 at December 31, 1999
and $26,339 at December 31,1998.

Approximately 3% ($1,017) of the long term debt is related party debt for
which comparable instruments do not exist. Accordingly, it is not practicable
to estimate the fair value of this debt. This debt bears interest at 11% and
is subject to subordination to the Bank of America Senior Secured Credit
Facilities.

NOTE 17. Quarterly Results of Operations (Unaudited)

Results of operations by quarter for the years ended December 31, 1999 and
1998 are set forth in the following tables:

1999 Quarter Ended
-----------------------------------
March 31 June 30 Sept 30 Dec 31
-------- ------- ------- -------

Operating Revenue.......................... $19,976 $18,351 $19,440 $18,332
Less Operating Costs and Expenses.......... 20,118 19,330 18,779 18,348
------- ------- ------- -------
Operating Income (Loss).................. (142) (979) 661 (16)
------- ------- ------- -------
Income (Loss) from continuing operations... (1,687) 1,512 (84) (1,229)
Income (Loss) from discontinued operations. -- (370) 459 250
------- ------- ------- -------
Net Income (Loss).......................... $(1,687) $ 1,142 $ 375 $ (979)
======= ======= ======= =======
Net Income (Loss) Per Share--Basic and
Diluted................................... $ (0.43) $ 0.29 $ 0.10 $ (0.25)
======= ======= ======= =======
Significant items included in continuing
operations which might affect
comparability are as follows:
Provision for Bargo judgment and related
costs................................... (966) (680) -- --
Bargo settlement gain.................... -- 3,617 -- --

1998 Quarter Ended
-----------------------------------
March 31 June 30 Sept 30 Dec 31
-------- -------- ------- -------

Operating Revenue......................... $26,368 $ 24,704 $22,957 $23,289
Less Operating Costs and Expenses......... 25,308 24,361 23,588 22,566
------- -------- ------- -------
Operating Income (Loss)................. 1,060 343 (631) 723
------- -------- ------- -------
Income (Loss) from continuing operations.. 274 (9,330) (962) (422)
Loss from discontinued operations......... -- (1,200) -- (510)
Extraordinary Item........................ -- -- -- (233)
------- -------- ------- -------
Net Income (Loss)......................... $ 274 $(10,530) $ (962) $(1,165)
======= ======== ======= =======
Net Income (Loss) Per Share--Basic and
Diluted.................................. $ 0.07 $ (2.72) $ (0.25) $ (0.30)
======= ======== ======= =======
Significant items included in continuing
operations which might affect
comparability are as follows:
Provision for Bargo judgment and related
costs.................................. -- (8,825) -- (414)
Provision for merger and refinancing
costs.................................. -- -- (1,362) --

F-31

REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENTS SCHEDULES

To the Board of Directors
of Reunion Industries, Inc.

Our audit of the consolidated financial statements referred to in our report
dated March 16, 2000, appearing on page F-2 of this Form 10-K, also included
an audit of the Financial Statement Schedules listed in item 14(a)(2) of this
Form 10-K. In our opinion, these Financial Statement Schedules present fairly,
in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.

PRICEWATERHOUSECOOPERS LLP

Stamford, Connecticut
March 16, 2000

S-1

Schedule I - Condensed Financial Information of Registrant

REUNION INDUSTRIES, INC. (Registrant)
CONDENSED BALANCE SHEET INFORMATION
(In Thousands)

December 31,
---------------
1999 1998
------- -------

ASSETS
Current Assets
Cash......................................................... $ 211 $ 12
Note receivable--related party............................... 350 0
Other current assets......................................... 18 51
------- -------
Total current assets....................................... 579 63
Other Assets
Equipment--net............................................... 3 10
Investment in and advances to subsidiaries................... 14,339 26,058
Debt issuance costs.......................................... 0 357
Other assets................................................. 807 190
------- -------
$15,728 $26,678
======= =======

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short term debt--related parties.......................... $ 0 $ 1,015
Accounts payable.......................................... 993 319
Accrued Bargo judgment.................................... 0 8,425
Other current liabilities................................. 190 680
-------- --------
1,183 10,439
-------- --------
Shareholders' Equity
Common stock.............................................. 39 39
Additional paid-in capital................................ 29,402 29,332
Retained earnings (since January 1, 1989)................. (14,110) (12,961)
Cumulative translation adjustment......................... (786) (171)
-------- --------
14,545 16,239
-------- --------
$ 15,728 $ 26,678
======== ========

S-2

Schedule I - Condensed Financial Information of Registrant (continued)

REUNION INDUSTRIES, INC. (Registrant)
CONDENSED STATEMENT OF OPERATIONS INFORMATION
(In Thousands)

Year Ended December 31,
--------------------------
1999 1998 1997
------- -------- -------

Selling, general and administrative expense........ $(1,582) $ (2,088) $(1,776)
Provison for merger and refinancing costs.......... -- (1,362) --
Interest expense................................... (326) (25) --
Provision for Bargo judgment and related costs..... (1,646) (9,239) --
Bargo settlement gain.............................. 3,617 -- --
Intercompany interest income....................... 938 1,238 1,265
Intercompany management fees....................... 300 300 300
Equity in income (loss) of continuing operations
of consolidated subsidiaries...................... (2,635) 35 (923)
Other income (expense)--net........................ 56 40 239
------- -------- -------
Loss from continuing operations before taxes....... (1,278) (11,101) (895)
Income tax benefit (expense)....................... (210) 661 (86)
------- -------- -------
Loss from continuing operations.................... (1,488) (10,440) (981)
Income (loss) from discontinued operations......... 365 (510) --
Equity in income (loss) of discontinued operations
of consolidated subsidiaries...................... (26) (1,200) 710
Equity in income (loss) of extraordinary item
of consolidated subsidiaries...................... -- (233) --
------- -------- -------
NET LOSS........................................... $(1,149) $(12,383) $ (271)
======= ======== =======

S-3

Schedule I - Condensed Financial Information of Registrant (continued)

REUNION INDUSTRIES, INC. (Registrant)
CONDENSED STATEMENT OF CASH FLOWS INFORMATION
(In Thousands)

Year Ended December 31,
-------------------------
1999 1998 1997
------- -------- ------

Cash Flows from Operating Activities:
Net Loss.......................................... $(1,149) $(12,383) $ (271)
Adjustments:
Depreciation.................................... 1 1 3
Debt issuance costs amortization................ 682 539 --
Bargo judgment provision........................ 400 8,425 --
Bargo settlement gain........................... (3,617) -- --
Bargo settlement payment........................ (5,000) -- --
Provision for tax audit settlement.............. 370 510 --
Tax audit settlement payment.................... (973) -- --
Equity in (income) loss of consolidated
subsidiaries................................... 2,661 1,398 213
Changes in assets and liabilities:
Interest receivable--consolidated subsidiaries.. 145 (868) (868)
Payables........................................ 673 177 57
Accruals and other.............................. (46) 59 33
------- -------- ------
(5,853) (2,142) (833)
------- -------- ------
Cash flows from Investing Activities:
Dividends from consolidated subsidiaries.......... 560 560 564
Advances (to) from consolidated subsidiaries...... 7,727 (317) (821)
Deferred merger costs............................. (803) -- --
Loans to related parties.......................... (350) -- --
Collection of notes receivable.................... 189 76 2,226
Capital expenditures.............................. -- -- (3)
------- -------- ------
7,323 319 1,966
------- -------- ------
Cash flows from Financing Activities:
Debt issuance costs............................... (325) (896) --
Increase (decrease) in short term borrowings...... (1,015) 1,015 --
Proceeds from exercise of stock options and
warrants......................................... 69 91 --
------- -------- ------
(1,271) 210 0
------- -------- ------
Net Increase (Decrease) in Cash..................... 199 (1,613) 1,133
Cash at Beginning of Period......................... 12 1,625 492
------- -------- ------
Cash at End of Period............................... $ 211 $ 12 $1,625
======= ======== ======

S-4

REUNION INDUSTRIES, INC.

SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(Amounts in Thousands)

Additions
-------------------
Balance
Beginning Charges to Balance
of Year Earnings Other Deductions(1) End of Year
--------- ---------- -------- ------------- -----------

Year ended December 31,
1999:
Deducted from asset
accounts:
Allowance for
doubtful accounts-
trade receivables.. $ 360 $121 0 $(179) $ 302
Allowance for
doubtful accounts-
other.............. 348 0 0 0 348
Reserve for excess
and obsolete
inventory.......... 528 236 0 (386) 378
Deferred tax asset
valuation reserve.. 94,302 0 (15,109)(2) 0 79,193
------- ---- -------- ----- -------
Totals............ $95,538 $357 $(15,109) $(565) $80,221
======= ==== ======== ===== =======
Year ended December 31,
1998:
Deducted from asset
accounts:
Allowance for
doubtful accounts-
trade receivables.. $ 375 $ 86 $ 0 $(101) $ 360
Allowance for
doubtful accounts-
other.............. 335 13 0 0 348
Reserve for excess
and obsolete
inventory.......... 512 37 0 (21) 528
Deferred tax asset
valuation reserve.. 77,378 0 16,924(3) 0 94,302
------- ---- -------- ----- -------
Totals............ $78,600 $136 $ 16,924 $(122) $95,538
======= ==== ======== ===== =======
Year ended December 31,
1997:
Deducted from asset
accounts:
Allowance for
doubtful accounts-
trade receivables.. $ 434 $ 4 $ 0 $ (63) $ 375
Allowance for
doubtful accounts-
other.............. 317 18 0 0 335
Reserve for excess
and obsolete
inventory.......... 321 224 0 (33) 512
Deferred tax asset
valuation reserve.. 77,827 0 0 (449) 77,378
------- ---- -------- ----- -------
Totals............ $78,899 $246 $ 0 $(545) $78,600
======= ==== ======== ===== =======

- --------
(1) Utilization of established reserves, net of recoveries

(2) Decrease for expiration of NOL's

(3) Increase for adjustment to NOL's resulting from IRS settlement

S-5

EXHIBIT INDEX

Exhibit
No. Description
------- -----------

2.1 Merger Agreement by and between Reunion Resources Company and Reunion
Industries, Inc. Incorporated by reference to Exhibit 2.1 to
Registration Statement on Form S-4 (No. 33-64325).
2.2 Amended and Restated Merger Agreement, dated as of July 28, 1999,
between Reunion Industries, Inc. and Chatwins Group, Inc. Incorporated
by reference to Exhibit 2.2 to Registration Statement on Form S-4
(File No. 333-84321).
3.1 Certificate of Incorporation of Reunion Industries, Inc. Incorporated
by reference to Exhibit 3.1 to Registration Statement on Form S-4 (No.
33-64325).
3.2 Bylaws of Reunion Industries, Inc. Incorporated by reference to
Exhibit 3.2 to Registration Statement on Form S-4 (No. 33-64325).
3.3 Certificate of Designations for Series A Redeemable Preferred Stock.*
3.4 Certificate of Designations for Series B Redeemable Preferred Stock*
4.1 Specimen Stock Certificate evidencing the Common Stock, par value $.01
per share, of Reunion Industries, Inc. Incorporated by reference to
Exhibit 4.1 to Registration Statement on Form S-4 (Registration No.
33-64325).
4.2 Form of Certificate for Series A Redeemable Preferred Stock.*
4.3 Form of Certificate for Series B Redeemable Preferred Stock.*
10.1 Buttes Gas & Oil Co. 1992 Nonqualified Stock Option Plan. Incorporated
by reference to Exhibit 10.35 to the Company's Annual Report on Form
10-K for the year ended December 31, 1992 (File No. 001-07726).
10.2 Form of Stock Option Agreement for options issued pursuant to the 1992
Nonqualified Stock Option Plan. Incorporated by reference to Exhibit
10.36 to the Company's Annual Report on Form 10-K for the year ended
December 31, 1992 (File No. 001-07726).
10.3 Reunion Resources Company 1993 Incentive Stock Plan. Incorporated by
reference to Exhibit 10.34 to the Company's Annual Report on Form 10-K
for the year ended December 31, 1993 (File No.
001-07726).
10.4 Form of Stock Option Agreement for options issued pursuant to the 1993
Incentive Stock Plan. Incorporated by reference to Exhibit 10.35 to
the Company's Annual Report on Form 10-K for the year ended December
31, 1993 (File No. 001-07726).
10.5 The 1998 Stock Option Plan of Reunion Industries, Inc. Incorporated by
reference to Exhibit 2.2 to Registration Statement on Form S-4 (No.
333-56153).
10.6 Form of Stock Option Agreement for options issued pursuant to the 1998
Stock Option Plan of Reunion Industries, Inc. Incorporated by
reference to Exhibit 10.7 to Reunion Industries' Annual Report on Form
10-K for the year ended December 31, 1998 (File No. 33-64325).
10.7 Loan and Security Agreement dated as of October 16, 1998 among Oneida
Rostone Corp., Reunion Industries, Inc. and DPL Acquisition Corp. and
The CIT Group/Business Credit, Inc. Incorporated by reference to
Exhibit 10.1 to the Company's Current Report on Form 8-K dated October
19, 1998 (File No. 33-64325).
10.8 Amendment No. 1 to Loan and Security Agreement dated as of December
31, 1998 modifying original Loan and Security Agreement dated as of
October 16, 1998 among Oneida Rostone Corp., Reunion Industries, Inc.
and DPL Acquisition Corp. and The CIT Group/Business Credit, Inc.
Incorporated by reference to Exhibit 10.9 to Reunion Industries'
Annual Report on Form 10-K for the year ended December 31, 1998 (File
No. 33-64325).
10.9 Amendment No. 2 to Loan and Security Agreement dated as of July 14,
1999 modifying original Loan and Security Agreement dated as of
October 16, 1998 among Oneida Rostone Corp., Reunion Industries, Inc.
and DPL Acquisition Corp. and The CIT Group/Business Credit, Inc.
Incorporated by reference to Exhibit 10.9 to Registration Statement on
Form S-4 (File No. 333-84321).

E-1

Exhibit
No. Description
------- -----------

10.10 Amendment No. 3 to Loan and Security Agreement dated as of August 31,
1999 modifying original Loan and Security Agreement dated as of
October 16, 1998 among Oneida Rostone Corp., Reunion Industries, Inc.
and DPL Acquisition Corp. and The CIT Group/Business Credit, Inc.
Incorporated by reference to Exhibit 10.10 to Registration Statement
on Form S-4 (File No. 333-84321).
10.11 Share Purchase Agreement dated October 17, 1996 between Allied Irish
Banks Holdings and Investments Limited and DPL Acquisition Corp.
Incorporated by reference to Exhibit 2.1 to the Company's Current
Report on Form 8-K dated October 17, 1996 (File No. 33-64325).
10.12 Stock Purchase Agreement dated as of October 17, 1996 among Frank J.
Guzikowski, DPL Acquisition Corp., Reunion Industries, Inc., Data
Packaging International, Inc. and DPL Holdings, Inc. Incorporated by
reference to Exhibit 2.2 to the Company's Current Report on Form 8-K
dated October 17, 1996 (File No. 33-64325).
10.13 Asset Purchase Agreement between Oneida Rostone Corp., Quality Molded
Products, Inc. and Don A. Owen, dated November 18, 1996. Incorporated
by reference to Exhibit 2.1 to the Company's Current Report on Form 8-
K dated November 18, 1996 (File No. 33-64325).
10.14 Asset Purchase Agreement, dated September 30, 1999, by and between
Chatwins Group, Inc. and Alabama Metal Industries Corporation
Incorporated by reference to Registration Statement on Form S-4 (File
No. 333-84321).
10.15 Amended and Restated Financing and Security Agreement by and among
Reunion Industries, Inc. as Borrower and Bank of America, National
Association, as Agent and Bank of America, National Association and
others as Formula Lenders and Bank of America, National Association
and others as Term Loan B Lenders dated as of March 16, 2000.*
10.16 Indenture, dated as of May 1, 1993, by and between Chatwins Group,
Inc. And The First National Bank of Boston, as trustee, Incorporated
by reference to Exhibit 4.4 to Chatwins Group, Inc.'s Registration
Statement on Form S-1 filed on July 30, 1993 (File No. 33-63274).
10.17 First Supplemental Indenture and Wavier of Covenants of Indenture
between The First National Bank of Boston, as trustee, and Chatwins
Group, Inc. Incorporated by reference to Exhibit 4.32 to Chatwins
Group, Inc.'s Current Report on Form 8-K dated June 30, 1995 and filed
with the Commission on July 3, 1995 (File No. 33-63274).
10.18 Second Supplemental Indenture between The First National Bank of
Boston, as trustee, and Chatwins Group, Inc. Incorporated by reference
to Exhibit 4.33 to Chatwins Group, Inc.'s Current Report on Form 8-K
dated June 30, 1995 and filed with the Commission July 3, 19995 (File
No. 33-63274).
10.19 Third Supplemental Indenture, dated as of May 28, 1999, between
Chatwins Group, Inc. and State Street Bank and Trust Company, as
successor Trustee to The First National Bank of Boston.*
10.20 Fourth Supplemental Indenture, dated as of March 8, 2000, between
Chatwins Group, Inc. and State Street Bank and Trust Company, as
successor Trustee to The First National Bank of Boston.*
10.21 Fifth Supplemental Indenture, dated as of March 16, 2000, between
Chatwins Group, Inc., Reunion Industries, Inc. and State Street Bank
and Trust Company, as successor Trustee to The First National Bank of
Boston.*
11.1 Computation of Earnings Per Share.*
21.1 List of subsidiaries and jurisdictions of organization.*
23.1 Consent of Independent Public Accountants--PricewaterhouseCoopers
LLP.*
27 Financial Data Schedule*

- --------
* Filed herewith

E-2