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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Commission file number 1-10033

Wellman, Inc.

Registrant’s telephone number, including area code:

Securities registered pursuant to Section 12(b) of the Act:

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

          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 þ          No o

          Indicate by check mark if disclosure of delinquent filers pursuant to Rule 405 of Regulation S-K (Section 229.405 of this chapter) 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.     þ

          Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).     Yes þ          No o

          Aggregate market value of the voting stock held by non-affiliates of the registrant, computed on the basis of $11.20 per share (the closing price of such stock on June 30, 2003 on the New York Stock Exchange), as of the last day of the registrant’s most recently completed second fiscal quarter:     $347,444,698.

          The number of shares of the registrant’s Class A Common Stock, $.001 par value, and Class B Common Stock, $.001 par value, outstanding as of March 1, 2004 was 31,889,147 and 0, respectively.

DOCUMENTS INCORPORATED BY REFERENCE

          1. Proxy Statement for the 2004 Annual Meeting of Stockholders (to be filed with the Securities and Exchange Commission on or before April 29, 2004) is incorporated by reference in Parts II and III hereof.

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PART I

      We are principally engaged in the manufacture and marketing of high-quality PermaClear® and EcoClear® brand PET (polyethylene terephthalate) packaging resins, Fortrel® brand polyester staple fibers and Wellamid® engineering resins. We believe we are the world’s largest PET plastics recycler, utilizing a significant amount of recycled raw materials in our manufacturing operations.

Recent Developments

      Subsequent to year-end, on February 10, 2004, we closed on $625 million of new debt financings. This consisted of a five-year $175 million Revolving Credit Facility with an annual interest rate of LIBOR plus 250 basis points on outstanding borrowings, a five-year $185 million First Lien Term Loan with an annual interest rate of LIBOR plus 400 basis points and a six-year $265 million Second Lien Term Loan with an annual interest rate of LIBOR plus 675 basis points. The term loans have a LIBOR floor of 200 basis points. These financings are secured primarily by our domestic assets. The net proceeds from these credit facilities were used to repay substantially all of our existing indebtedness, to satisfy contractual obligations, to pay related costs, and to provide working capital.

      We expect to incur approximately $47 million in pre-tax charges, or approximately $0.95 per diluted share after tax, in the first quarter of 2004, resulting from costs associated with our prior financings that were repaid. These charges are principally the result of prepayment penalties associated with repayment of our private placement notes, waiver fees and other expenses related to financings that were repaid, charges associated with the termination of the sale and leaseback transaction, and the write-off of unamortized financing costs. On February 10, 2004 we had approximately $490 million in total outstanding long-term debt, net of original issue discount of approximately $5 million. For additional information related to the new financings, see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Capital Resources and Liquidity” and note 10 to the Consolidated Financial Statements.

      In December 2003, based on management’s recommendation, our Board of Directors approved the abandonment of the polyester staple fiber spinning and drawing equipment at our Pearl River facility. This spinning and drawing equipment, along with the related polymerization assets, was idled in December 2000, principally because of the expected over-supply of polyester staple fiber in the United States. The Board of Directors’ decision to abandon the polyester staple fiber spinning and drawing equipment was based on the determination that a conversion to PET resin production would be the most profitable use of the related polymerization assets that were idled. Subject to final approval by our Board of Directors, we plan to complete the conversion and begin production using the converted assets in 2006.

      As a result of this decision, we recorded a non-cash impairment charge of $135 million ($88 million after tax or $2.79 per diluted share) in the fourth quarter of 2003. This charge represents a reduction in the carrying value of the abandoned polyester staple fiber spinning and drawing assets at our Pearl River facility to their estimated fair value. For additional information on the impairment charge, see note 1 to the Consolidated Financial Statements.

Restructuring and Other Cost Reductions

      We have historically focused on continuous process improvements and have successfully implemented cost reduction initiatives. Since 1999, we have reduced domestic headcount by 29%, while increasing production by 13% and pounds per employee by 38% over the same period. During 2003, we announced additional cost reduction plans as part of our on-going low cost business strategy and in response to reduced profitability. For additional information on reduced profitability, see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The three plans announced in 2003 are as follows:

      In January 2003, the FRPG commenced a plan to restructure its operations, which included a reduction in the number of employees and other cost savings initiatives at our three fiber manufacturing facilities. We

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      In July 2003, we announced and implemented reductions in compensation and benefit costs. These compensation and benefit reductions were implemented at all levels, including senior management. As part of this cost reduction effort, some employer contributions to our defined contribution plans were suspended.

      In November 2003, we announced a third plan with cost reduction initiatives that included eliminating levels of management, reducing the number of employees, and other organizational and administrative consolidations and changes. We incurred severance and other termination costs of approximately $8 million in the fourth quarter of 2003 associated with this plan.

      These last two cost reduction plans resulted in approximately $8 million of realized savings in controllable costs in the second half of 2003 as compared to our cost structure during the second quarter of 2003. In addition, we expect a reduction in controllable costs of approximately $27 million in 2004 compared to 2003 levels, with an additional $6 to $11 million of cost reductions in 2005. By 2005, we expect total cost savings annually of $41 to $46 million as compared to our cost structure in the second quarter of 2003. These plans will result in a total headcount reduction of approximately 400 employees by the end of 2004. Of these reductions, approximately 70% were implemented by the end of 2003. For additional information, see note 8 to the Consolidated Financial Statements.

Products and Markets

      Our operations are classified into two reportable operating segments: the Packaging Products Group (PPG) and the Fibers and Recycled Products Group (FRPG).

      The following table presents the combined net sales and percentage of net sales for our reportable operating segments for each of the three years in the period ended December 31, 2003. In the table, we have eliminated intersegment sales and applied historical exchange rates to the data. These eliminations are not material.

      The accounting policies of the reportable operating segments are the same as those described in the summary of significant accounting policies in note 1 to the Consolidated Financial Statements. The following table presents the operating profit (loss) and percentage of operating profit (loss) for our reportable operating segments for each of the three years in the period ended December 31, 2003. In the table, we have eliminated intersegment transactions and applied historical exchange rates to the data. These eliminations are not material.

      See note 18 to the Consolidated Financial Statements for reconciliations to corresponding totals in the Consolidated Financial Statements and additional information with regard to our reportable operating segments.

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      The PPG manufactures:

	•	solid-stated and amorphous PET resin for use in the manufacture of soft drink bottles and other food and beverage packaging and
	•	EcoClear® PET resin, utilizing recycled PET materials to meet customers’ recycled content requirements.

      These resins are produced domestically at our Palmetto, South Carolina and Pearl River, Mississippi facilities and internationally at our Emmen facility in the Netherlands.

      We sell our solid-stated PET resin primarily under the PermaClear® and PermaClear HP® brands.

      Customers include North American, South American and European-based manufacturers of various types of plastic containers. Six PPG customers represented approximately 59% of the PPG’s total net sales for 2003. The unexpected loss of any of these customers may result in a temporary reduction in sales and profitability of the PPG.

      The FRPG manufactures:

	•	chemical-based polyester staple fibers for use in apparel, non-woven, home furnishing, and industrial products,
	•	recycled-based polyester and nylon staple fibers for use in home furnishing, non-woven, and industrial products, and
	•	recycled-based nylon and polyester engineering resins for use in the injection molding industry.

      Polyester staple fiber, FRPG’s primary product, is multi-strand fiber cut into short lengths to simulate certain properties found in natural fibers, such as cotton and wool, and/or to meet the end product needs of our customers. We market these products under the Fortrel® brand.

      Our chemical-based polyester staple fibers are manufactured at our Palmetto facility in Darlington, SC. Customers include integrated textile mills, yarn spinners, and non-woven operations that process polyester staple into yarn and/or fabric for a variety of applications, including apparel, home furnishing and industrial products.

      Domestically, we manufacture polyester staple fiber and nylon products from recycled raw materials at our facility in Johnsonville, SC. Our recycling operation in Johnsonville procures these materials and processes them into usable raw materials for our fiber and engineering resins businesses.

      In Europe, we manufacture polyester and nylon staple fiber from recycled raw materials at our production facility in Mullagh, Republic of Ireland. These fibers, used primarily in home furnishing, carpet, non-woven and industrial products, are exported primarily to the United Kingdom and continental Europe.

      Our Engineering Resins Division, located in Johnsonville, SC, manufactures and markets nylon and polyester engineering resins under the Wellamid®, EcoLon®, and WELLPET® brands to the injection molding industry. We produce these resins using virgin, post-consumer and post-industrial nylon compounded with various additives (glass, minerals, fire retardant, etc.) to impart desired performance characteristics. These resins are used primarily in automotive applications.

      No single customer accounted for 10% of FRPG’s sales in 2003.

      Our PermaClear® PET resins are produced by the PPG from purified terephthalic acid (PTA) and monoethylene glycol (MEG). EcoClear® PET resins are produced from a combination of chemical and recycled raw materials. Our chemical-based polyester staple fibers are also manufactured from PTA and MEG. Domestically, we purchase PTA produced by BP Amoco Chemicals Inc., the primary domestic supplier, pursuant to long-term supply contracts. Domestic MEG is purchased under supply contracts with Equistar Chemicals, LP, BASF Corporation, and Dow Chemical. In Europe, we purchase PTA primarily from BP Amoco Chemicals, Inc. and MEG from Diolen Industrial Fibers (formerly Acordis). The prices of PTA and MEG have fluctuated in the past and are likely to continue to do so in the future.

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      Our recycling-based fibers utilize two categories of recycled PET raw materials: post-consumer containers and post-industrial materials including some under long-term supply contracts. We purchase a portion of these materials from manufacturers that compete with us in the sale of fibers and resins. We obtain our domestic post-consumer PET bottles primarily from curbside recycling and deposit return programs. Post-industrial materials include off-quality or off-spec production, trim and other materials generated from fiber, resin, or film manufacturing processes. The raw material mix for our Johnsonville facility can be varied depending upon market conditions for the respective raw materials. Historically, the raw material mix has been approximately 50% post-consumer PET bottle flake and 50% post-industrial material. The prices of recycled raw materials are variable and determined by worldwide supply and demand.

      Our European operations purchase recycled raw materials in various forms throughout Europe. Post-consumer PET containers are primarily purchased from collection programs. These post-consumer containers are processed initially at our recycling facilities near Arnhem, the Netherlands, or Verdun, France.

      We believe that we are the world’s largest producer of polyester staple fiber made from recycled feedstocks and one of the world’s largest post-consumer PET bottle recyclers.

      For additional information on our raw materials, see “Forward Looking Statements; Risks and Uncertainties.”

      Our capital expenditures in 2003 were approximately $15.5 million, compared to $21.7 million and $28.1 million for 2002 and 2001, respectively. In 2002, our capital expenditures included approximately $4.7 million of costs to convert fiber grade chip lines at our Palmetto facility to amorphous PET resin. Since completing the construction of the Pearl River facility in early 2000, our capital expenditures have declined significantly. The following table provides a breakdown of our capital expenditures:

Capital Expenditures Breakdown

      For additional information on capital expenditures expected in 2004, see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Outlook.” For additional information on production outage, see note 9 to the Consolidated Financial Statements.

      Our markets have historically displayed price and volume cyclicality. We sell to a diverse group of customers. Although no single customer represented more than 10% of our total net sales, six customers represented approximately 34% of our total net sales in 2003.

      Approximately 44 employees market the majority of our products. We also utilize representatives or agents for certain sales.

      Our PET resins are promoted through various activities, including advertising, sales promotions and market development, into a variety of markets, including carbonated soft drinks, juices, water, and food. We are actively involved with our customers in joint end-use product development efforts to meet the future needs of the food and beverage packaging markets.

      Both North American and global PET resins demand continues to grow, driven by new product applications for PET and conversions from other packaging materials to PET. Numerous factors affect the demand for PET resins, including substitution of packaging products from glass, aluminum, and paper into PET, consumer preferences and spending, general economic conditions, weather, and the export/ import trade balance of PET resin into the North American Free Trade Agreement (NAFTA) region. We do not expect a significant increase in imports of PET resins into NAFTA in 2004.

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      Our polyester staple fibers are also promoted through various activities directed to our customers and to organizations downstream from our customers. These activities include advertising, sales promotion, market analysis and product development. As part of this effort, we encourage downstream purchasers of apparel, home furnishing and other products to specify to their suppliers the use of Fortrel® brand polyester staple fiber in their products.

      Numerous factors affect the demand for polyester staple fiber in our markets, including textile product imports, consumer preferences and spending, and retail sales patterns, which are driven by general economic conditions. Imports of products throughout the textile chain continue to impact the United States and European fiber markets, particularly the commodity textile fiber markets, adversely affecting operating results. A downturn in either the U.S., European, or global economy or an increase in imports of textile or polyester staple fiber products into the U.S. could adversely affect our business. Polyester textile fiber demand also may be influenced by the relative price of substitute fibers, most notably cotton.

      For additional information, see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — General” and “Forward-Looking Statements; Risks and Uncertainties.”

      Each of our major markets is highly competitive. We compete in these markets primarily on the basis of product quality, price, customer service, and brand identity.

      In North America, our primary competitors in the PET resins business are Eastman Chemical Co. (Voridian), KoSa, Gruppo Mossi and Ghisolfi (M&G), Nan Ya Plastics Corp. (Nan Ya), and DAK Americas. We believe we are currently the fourth-largest producer of PET resins in North America, representing approximately 15% of North American production capacity. In Europe, our main competitors in the PET resins business are Voridian, KoSa, DuPontSA, M&G, and Dow Chemical Co. Our share of the European PET resins market is less than 5%.

      Our primary domestic polyester staple fiber competitors are DAK Americas, Nan Ya, and KoSa. We believe we are currently the largest producer of polyester staple fiber in the United States with approximately 30% of U.S. production capacity. Our main European polyester staple fiber competitors are MonteFibre, DuPontSA and Trevira. We are the largest supplier of polyester staple fibers made from recycled materials and the largest supplier of polyester staple fiber for home furnishing and non-woven products. In 2003, we had approximately 19% of EU produced polyester staple fiber shipments.

      For additional information on competitors, see Item 7. “Forward-Looking Statements; Risks and Uncertainties.”

      We have approximately 66 employees devoted to research, development and technical service activities in our fibers and resins businesses. Research and development costs were approximately $14.9 million, $17.3 million and $14.6 million for 2003, 2002 and 2001, respectively.

      We operate in international markets. Since a large portion of our non-U.S. sales are in different currencies, changes in exchange rates may affect profitability and sales levels of these operations. In addition, fluctuations between currencies may also affect our reported financial results. Foreign exchange contracts and borrowings in local currencies are utilized to manage our foreign currency exposure. For additional information on these hedges, see Item 7A. “Quantitative and Qualitative Disclosure about Market Risk” and note 17 to the Consolidated Financial Statements.

      Our foreign businesses are subject to certain risks common to foreign operations and investments in foreign countries, including restrictive action by local governments, limitations on repatriating funds and changes in currency exchange rates. See note 18 to the Consolidated Financial Statements and “Forward-Looking Statements; Risks and Uncertainties” for additional information relating to our foreign activities.

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      The following table provides our approximate number of employees, at December 31, by year, in the U.S. and Europe:

      At December 31, 2003, the Union of Needle Trades, Industrial and Textile Employees (UNITE) represented 492 employees, of which 281 were union members, at our Johnsonville, SC operations. This contract expires on May 1, 2005. In our European fiber business, four unions represented 252 of the 463 total employees at year-end 2003. The wage agreements with these unions expire on October 31, 2004. We have entered into an agreement with the unions at our European fiber business at December 31, 2003, whereby approximately 60 persons have accepted voluntary termination. These positions will be eliminated during the first half of 2004. We employ 75 people in our European PET Resins operation, with 50 represented by two unions whose contracts expire on April 30, 2004. We believe that relations with our employees are satisfactory. See “Forward-Looking Statements; Risks and Uncertainties.”

      Our facilities are subject to numerous existing and proposed laws and regulations designed to protect the environment from wastes, emissions and hazardous substances. We believe we are either in material compliance with all currently applicable regulations or are operating in accordance with the appropriate variances and compliance schedules or similar arrangements.

      For additional information relating to environmental matters, see Item 7. “Management’s Discussion and Analysis of Financial Position and Results of Operations — Environmental Matters,” “Forward-Looking Statements; Risks and Uncertainties,” and note 12 to the Consolidated Financial Statements.

      Our current executive officers are as follows:

      Officers are elected annually by our Board of Directors. Set forth below is certain information with respect to our executive officers.

      Thomas M. Duff. Mr. Duff was elected Chairman in December 1999. Prior to December 1999, he was President and has been CEO since 1985.

      Keith R. Phillips. Mr. Phillips has been Vice President and Chief Financial Officer since October 1993. He was also Treasurer from October 1993 to March 2001. Mr. Phillips is a certified public accountant.

      Michael E. Dewsbury. Mr. Dewsbury has been Vice President, PET Resins Division — U.S. since April 1999. Prior to that, he was Business Manager — PET Resins Division since joining us in September 1991.

      Audrey L. Goodman. Ms. Goodman has been Vice President, Treasurer since March 2001. She was Assistant Treasurer from May 1990 to March 2001.

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      Mark J. Ruday. Mr. Ruday has been Vice President, Chief Accounting Officer and Controller since May 2003. Prior to that, he was the Business Operations Manager for the PET Resins Division — U.S. from March 1998 to May 2003 and was the PPG Controller from November 1995 through March 1998.

      Joseph C. Tucker. Dr. Tucker has been Vice President, Fibers and Recycled Products Group since November 2003. Prior to that, he was Vice President, Corporate Development since December 1997 and Vice President and General Manager of PET Resins-Europe from 1995 to 1997.

Available Information

      We make available free of charge, through the “Investor Relations — SEC Documents” section of our Internet website (www.wellmaninc.com), our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as soon as reasonably practicable after electronically filing such material with, or furnishing it to, the Securities and Exchange Commission (the “SEC”). Once filed with the SEC, such documents may be read and/or copied at the SEC’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers, including Wellman, Inc., that electronically file with the SEC at http://www.sec.gov.

      The location, principal products produced and stated annual production capacity of our major manufacturing facilities are set forth in the table below. Domestically, we have economic ownership of these properties and either own these properties or can acquire title for nominal consideration. We own all of our international properties listed below.

(1)	This includes 200 million pounds of amorphous PET resin capacity for external sales.
(2)	Excludes 300 million pounds of polymerization and polyester staple fiber production capacity. The polyester staple fiber spinning and drawing equipment was abandoned in 2003. See Item 1. “Recent Developments — Impairment Charge.”

      In January 2001, we received a document subpoena in connection with a federal grand jury investigation of pricing practices in the polyester staple fiber industry. We cooperated with the investigation by producing documents in response to this subpoena. In September 2002, the U.S. Department of Justice announced the indictment of a former sales manager of one of our competitors for conspiring to fix prices and allocate customers for polyester staple fiber beginning in September 1999 and ending in January 2001. On October 31, 2002, the U.S. Department of Justice announced that it was filing informations against another competitor and one of its former officers as a result of their agreement to plead guilty to participating in a conspiracy to fix prices and allocate customers in the polyester staple fiber industry. On October 2, 2003, the trial of the former sales manager of one of our competitors concluded with a verdict of not guilty on all charges. Neither we nor any of our employees have been charged with any wrongdoing, and we vehemently deny that we or any of our employees have engaged in price fixing or customer allocation.

      Following the disclosure of the investigation, the indictment of a competitor’s employee and the informations and guilty pleas of another competitor and its employee, the producers of polyester staple fiber,

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      Wellman and certain other companies have been named as defendants in 32 federal actions brought by direct purchasers of polyester staple fiber for alleged violation of U.S. antitrust laws. The plaintiffs voluntarily dismissed nine of those lawsuits on October 3, 2003. In each remaining lawsuit, the plaintiffs allege that the defendants engaged in a conspiracy to fix the price of polyester staple fiber in violation of the Sherman Act. In ten of the cases, the plaintiff purports to represent a class of all persons who directly purchased polyester staple fiber and were similarly affected by such alleged conduct. Plaintiffs who do not purport to represent a class have brought 13 of the cases. All of the federal plaintiffs seek damages of unspecified amounts, attorney’s fees and costs and unspecified relief. In addition, certain of the actions claim restitution, injunctions against alleged illegal conduct and other equitable relief. The federal suits were originally filed in the U.S. District Court for the Middle District of Alabama, U.S. District Court for the Northern District of California, U.S. District Court for the Middle District of Georgia, U.S. District Court for the District of New Jersey, U.S. District Court for the Middle District of North Carolina, U.S. District Court for the Western District of North Carolina, U.S. District Court for the District of South Carolina and U.S. District Court for the Western District of Virginia. The Judicial Panel on Multi-District Litigation ruled on April 22, 2003 to transfer all the federal cases, except for two recently filed cases, where transfer has been requested, to the Western District of North Carolina for coordinated or consolidated pretrial proceedings.

      On January 20, 2004, a plaintiff who does not purport to represent a class filed a motion seeking leave to amend its complaint adding nine defendants. The proposed new defendants are various corporate entities and individuals, including two Wellman employees. The Court has yet to rule on the matter. On January 30, 2004, another plaintiff who does not purport to represent a class filed a lawsuit, which named as defendants Wellman, certain other companies and a number of individuals, including two Wellman employees.

      In addition to the direct purchaser actions discussed above, 38 purported class actions alleging violations of federal antitrust laws, state antitrust or unfair competition laws and certain state consumer protection acts have been filed in one federal court and various state courts on behalf of purported classes of indirect purchasers of polyester staple fiber products. In each lawsuit, the plaintiffs allege that the defendants engaged in a conspiracy to fix prices of polyester staple fiber products. In addition, certain of the actions claim restitution, injunction against alleged illegal conduct and other equitable relief. One indirect purchaser case is pending in the U.S. District Court for the Western District of North Carolina and is subject to the order issued by the Judicial Panel on Multi-District Litigation for coordination or consolidation with the other federal cases. The rest of the indirect purchaser cases were filed in Arizona, California, the District of Columbia, Florida, Kansas, Massachusetts, Michigan, New Mexico, North Carolina, South Dakota, Tennessee, West Virginia and Wisconsin. The case filed in West Virginia was removed to federal court and subsequently remanded to the Circuit Court of Hancock County, West Virginia. The case filed in Wisconsin was removed to federal court and subsequently remanded to the Circuit Court for Dane County, Wisconsin. In all of these cases, the plaintiffs seek damages of unspecified amounts, attorney’s fees and costs and unspecified relief.

      Wellman and certain other companies were named in an action filed in the Superior Court of Justice for Ontario, Canada, by a plaintiff purporting to represent a class of direct and indirect purchasers of polyester staple fiber. This complaint asserts claims under Canadian law. It contains three counts that ask for compensatory damages of Cdn. $50 million each. The extent to which these three counts are duplicative and overlapping is unclear. The complaint also contains one count asking for punitive damages of Cdn. $10 million. Additionally, Wellman and certain other companies were also named in an action filed in the Supreme Court of British Columbia, Canada, by a plaintiff purporting to represent a class of direct and indirect purchasers of polyester staple fiber. This complaint also asserts claims under Canadian law and requests compensatory, punitive and special damages, but does not allege a specific dollar amount in damages. Finally, Wellman and certain other corporations were named in an action filed in the Superior Court for Quebec, Canada. This complaint asserts claims under Canadian law seeking compensatory damages of Cdn. $15 million and punitive damages of Cdn. $5 million.

      In addition to the foregoing, Wellman may become subject to additional proceedings and lawsuits under federal and state antitrust and unfair competition laws. Furthermore, the federal grand jury investigation is ongoing and additional indictments may result. We intend to vigorously defend against the civil claims and any civil or criminal claims or proceedings that may be brought against us in the future. Because of the uncertainties and complexity of the U.S. Department of Justice investigation and the related civil claims, we have not formed an opinion about whether these proceedings will have a material adverse effect on our consolidated financial position, results of operations, or cash flows.

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      None.

PART II

     Market Information

      Our common stock is listed on the New York Stock Exchange (NYSE) under the symbol WLM. The following table shows the high and low sales prices as reported by the NYSE and cash dividends paid per share of common stock for the last two fiscal years.

      We had 866 holders of record as of March 1, 2004.

      See note 14 to the Consolidated Financial Statements for information regarding common stock rights associated with our common stock.

      In March 2004, we lowered our quarterly dividend rate to $0.05 per share for the dividend payable on March 15, 2004. We determined that this reduced dividend rate is appropriate considering our operating performance in the second half of 2003, our current debt level and focus on debt reduction, and the dividend levels of other companies.

      “Securities Authorized for Issuance Under Equity Compensation Plans” in our Proxy Statement for the 2004 Annual Meeting of Stockholders will be filed with the Securities and Exchange Commission on or before April 29, 2004 and is incorporated by reference.

      On February 10, 2004, we completed $625 million of new debt financings. These financings consist of a five-year $175 million Revolving Credit Facility with an initial annual interest rate of LIBOR plus 250 basis points on outstanding borrowings, a five-year $185 million First Lien Term Loan with an annual interest rate of LIBOR plus 400 basis points, and a six-year $265 million Second Lien Term Loan with an annual interest rate of LIBOR plus 675 basis points. For additional information, see note 10 to the Consolidated Financial Statements.

      On June 27, 2003, we issued to Warburg Pincus Private Equity VIII, L.P. 11,202,143 shares of perpetual convertible preferred stock and two warrants to acquire a total of 2.5 million shares of our common stock that vested on that date. For additional information on the private equity investment, see note 3 to the Consolidated Financial Statements. The offer and sale of these securities were exempt from the registration requirements of the Securities Act of 1933 pursuant to the exemption under Section 4(2).

      On June 27, 2003, we entered into a three-year $275 million revolving credit facility with an annual interest rate of LIBOR plus 250 basis points on outstanding borrowings. All borrowings were repaid and commitments under this facility were terminated on February 10, 2004.

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      On September 17, 2002 and December 20, 2001, we sold to John Hancock Life Insurance Company in private placements senior unsecured notes in the principal amounts of $25.0 million and $40.0 million, respectively. These notes had annual interest rates of 7.46% and 7.55%, respectively, and had maturities in 2009 and 2011, respectively. The offer and sale of these securities were exempt from the registration requirements of the Act pursuant to the exemption under Section 4(2). These notes were repaid in full on February 10, 2004.

      On November 16, 2001, we sold to Metropolitan Life Insurance Company in a private placement a senior unsecured note in the principal amount of $35.0 million. This note had interest at a floating rate based on LIBOR and had a maturity date in 2004. The offer and sale of this security were exempt from the registration requirements of the Act pursuant to the exemption under Section 4(2). This note was repaid in full on February 10, 2004.

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