##### Table of Contents









UNITED STATES

SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


FORM 10-Q

(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended October 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: 1-11592

HAYES LEMMERZ INTERNATIONAL, INC.

(Exact Name of Registrant as Specified in Its
Charter)


|                                |  |                    
|------------------------------- |  | -------------------
|                               
|                               
|                               
|                               
|DELAWARE                        |  | 13-3384636         
|(State or Other Jurisdiction of |  | (IRS Employer      
|Incorporation or Organization)  |  | Identification No.)

15300 CENTENNIAL DRIVE

NORTHVILLE, MICHIGAN 48167


(Address of Principal Executive Offices)(Zip Code)


Registrants telephone number, including area code:
(734) 737-5000

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  [   ]

The number of shares of common
stock outstanding as of December 15, 1999, was 30,339,345
shares.



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TABLE OF CONTENTS



|                                                                                                 |  |  |  |  |  |  |  | 
|------------------------------------------------------------------------------------------------ |  |  |  |  |  |  |  | 
|HAYES LEMMERZ INTERNATIONAL, INC. QUARTERLY REPORT ON FORM 10-Q                                 
|TABLE OF CONTENTS                                                                               
|HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES Consolidated Statements Of Operations        
|HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES Consolidated Balance Sheets                  
|HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows        
|Notes to Consolidated Financial Statements Three and Nine Months Ended October 31, 1999 and 1998
|PART II. OTHER INFORMATION                                                                      
|SIGNATURES                                                                                      
|EXHIBIT INDEX                                                                                   



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HAYES LEMMERZ INTERNATIONAL, INC.


QUARTERLY REPORT ON FORM 10-Q







TABLE OF CONTENTS


|                               |         |                                            |                                                                                        |      |   |    | 
|------------------------------ | ------- | ------------------------------------------ | -------------------------------------------------------------------------------------- | ---- | - | -- | 
|                               |         |                                            |                                                                                        | Page
|                               |         |                                            |                                                                                        |     
|                              
|                              
|                              
|                              
|PART I. FINANCIAL INFORMATION:
|                               | Item 1. |                                            | Financial Statements                                                                   |      |   |    | 
|                              
|                              
|                              
|                              
|                               |         | Consolidated Statements of Operations      |                                                                                        |      | 3 |   
|                               |         | Consolidated Balance Sheets                |                                                                                        |      | 4 |   
|                              
|                              
|                              
|                              
|                               |         | Consolidated Statements of Cash Flows      |                                                                                        |      | 5 |   
|                              
|                              
|                              
|                              
|                               |         | Notes to Consolidated Financial Statements |                                                                                        |      | 6 |   
|                              
|                              
|                              
|                              
|                               | Item 2. |                                            | Managements Discussion and Analysis of Financial Condition
	and Results of Operations |      |   | 16 | 
|                               | Item 3. |                                            | Quantitative and Qualitative Disclosures about Market Risk                             |      |   | 19 | 
|                              
|                              
|                              
|                              
|PART II. OTHER INFORMATION:   
|                               | Item 1. |                                            | Legal Proceedings                                                                      |      |   | 20 | 
|                               | Item 2. |                                            | Changes in Securities                                                                  |      |   | 20 | 
|                               | Item 3. |                                            | Defaults upon Senior Securities                                                        |      |   | 20 | 
|                               | Item 4. |                                            | Submission of Matters to a Vote of Security-Holders                                    |      |   | 20 | 
|                               | Item 5. |                                            | Other Information                                                                      |      |   | 20 | 
|                               | Item 6. |                                            | Exhibits and Reports on Form 8-K                                                       |      |   | 20 | 
|                              
|                              
|                              
|                              
|Signatures                     |         |                                            | 21                                                                                     |     

UNLESS OTHERWISE INDICATED, REFERENCES TO THE COMPANY
 MEAN HAYES LEMMERZ INTERNATIONAL, INC., AND ITS SUBSIDIARIES AND
 REFERENCE TO A FISCAL YEAR MEANS THE COMPANYS YEAR ENDED
JANUARY 31 OF THE FOLLOWING YEAR (E.G., FISCAL 1999 MEANS
THE PERIOD BEGINNING FEBRUARY 1, 1999, AND ENDING
JANUARY 31, 2000). THIS REPORT CONTAINS FORWARD LOOKING
STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995 WITH RESPECT TO THE FINANCIAL
CONDITION, RESULTS OF OPERATIONS, AND BUSINESS OF THE COMPANY.
THESE FORWARD LOOKING STATEMENTS INVOLVE CERTAIN RISKS AND
UNCERTAINTIES. NO ASSURANCE CAN BE GIVEN THAT ANY OF SUCH MATTERS
 WILL BE REALIZED. FACTORS THAT MAY CAUSE ACTUAL RESULTS TO
DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY SUCH FORWARD LOOKING
 STATEMENTS INCLUDE, AMONG OTHERS, THE FOLLOWING POSSIBILITIES:
(1) COMPETITIVE PRESSURE IN THE COMPANYS INDUSTRY
INCREASES SIGNIFICANTLY; (2) GENERAL ECONOMIC CONDITIONS ARE
 LESS FAVORABLE THAN EXPECTED; (3) THE COMPANYS
DEPENDENCE ON THE AUTOMOTIVE INDUSTRY (WHICH HAS HISTORICALLY
BEEN CYCLICAL); (4) CHANGES IN THE FINANCIAL MARKETS
AFFECTING THE COMPANYS FINANCIAL STRUCTURE AND THE
COMPANYS COST OF CAPITAL AND BORROWED MONEY; AND
(5) THE UNCERTAINTIES INHERENT IN INTERNATIONAL OPERATIONS
AND FOREIGN CURRENCY FLUCTUATIONS. THE COMPANY HAS NO DUTY UNDER
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 TO UPDATE
THE FORWARD LOOKING STATEMENTS IN THIS QUARTERLY REPORT ON
FORM 10-Q AND THE COMPANY DOES NOT INTEND TO PROVIDE SUCH
UPDATES.

2



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##### Table of Contents








HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES


Consolidated Statements Of Operations

(Millions of dollars, except share amounts)


(Unaudited)


|                                                           |                                                                            |                    |        |                   |  |      |        |      |  |   |         |       |  |   |         |       | 
|---------------------------------------------------------- | -------------------------------------------------------------------------- | ------------------ | ------ | ----------------- |  | ---- | ------ | ---- |  | - | ------- | ----- |  | - | ------- | ----- | 
|                                                           |                                                                            |                    |        |                  
|                                                           |                                                                            | Three Months Ended |        | Nine Months Ended
|                                                           |                                                                            | October 31,        |        | October 31,      
|                                                           |                                                                            |                    |        |                  
|                                                           |                                                                            | 1999               |        | 1998              |  | 1999 |        | 1998
|                                                           |                                                                            |                    |        |                   |  |      |        |     
|Net sales                                                  |                                                                            | $                  | 598.5  |                   |  | $    | 443.9  |      |  | $ | 1,730.8 |       |  | $ | 1,240.8 |      
|                                                          
|                                                          
|                                                          
|                                                          
|Cost of goods sold                                         |                                                                            |                    | 493.1  |                   |  |      | 361.2  |      |  |   | 1,425.2 |       |  |   | 1,024.1 |      
|                                                           |                                                                            |                    |        |                   |  |      |        |      |  |   |         |       |  |   |         |      
|                                                           | Gross profit                                                               |                    |        | 105.4             |  |      |        | 82.7 |  |   |         | 305.6 |  |   |         | 216.7 | 
|                                                          
|                                                          
|                                                          
|                                                          
|Marketing, general and administration                      |                                                                            |                    | 21.8   |                   |  |      | 16.7   |      |  |   | 70.7    |       |  |   | 48.7    |      
|                                                          
|                                                          
|                                                          
|                                                          
|Engineering and product development                        |                                                                            |                    | 4.4    |                   |  |      | 5.7    |      |  |   | 15.6    |       |  |   | 15.7    |      
|                                                          
|                                                          
|                                                          
|                                                          
|Amortization of intangibles                                |                                                                            |                    | 8.2    |                   |  |      | 4.6    |      |  |   | 22.0    |       |  |   | 12.7    |      
|                                                          
|                                                          
|                                                          
|                                                          
|Other income                                               |                                                                            |                    | (1.5   | )                 |  |      | (1.8   | )    |  |   | (5.3    | )     |  |   | (3.9    | )    
|                                                          
|                                                          
|                                                          
|                                                          
|Equity in losses (earnings) of unconsolidated subsidiaries |                                                                            |                    | (0.8   | )                 |  |      | 0.4    |      |  |   | (2.1    | )     |  |   | (0.6    | )    
|                                                           |                                                                            |                    |        |                   |  |      |        |      |  |   |         |       |  |   |         |      
|                                                           | Earnings from operations                                                   |                    |        | 73.3              |  |      |        | 57.1 |  |   |         | 204.7 |  |   |         | 144.1 | 
|                                                          
|                                                          
|                                                          
|                                                          
|Interest expense, net                                      |                                                                            |                    | 37.5   |                   |  |      | 22.4   |      |  |   | 115.5   |       |  |   | 69.4    |      
|                                                           |                                                                            |                    |        |                   |  |      |        |      |  |   |         |       |  |   |         |      
|                                                           | Earnings before taxes on income, minority interest and
	extraordinary loss |                    |        | 35.8              |  |      |        | 34.7 |  |   |         | 89.2  |  |   |         | 74.7  | 
|                                                          
|                                                          
|                                                          
|                                                          
|Income tax provision                                       |                                                                            |                    | 15.5   |                   |  |      | 14.6   |      |  |   | 38.4    |       |  |   | 31.4    |      
|                                                           |                                                                            |                    |        |                   |  |      |        |      |  |   |         |       |  |   |         |      
|                                                           | Earnings before minority interest and extraordinary loss                   |                    |        | 20.3              |  |      |        | 20.1 |  |   |         | 50.8  |  |   |         | 43.3  | 
|                                                          
|                                                          
|                                                          
|                                                          
|Minority interest                                          |                                                                            |                    | 0.4    |                   |  |      | 0.4    |      |  |   | 1.3     |       |  |   | 1.4     |      
|                                                           |                                                                            |                    |        |                   |  |      |        |      |  |   |         |       |  |   |         |      
|                                                           | Earnings before extraordinary loss                                         |                    |        | 19.9              |  |      |        | 19.7 |  |   |         | 49.5  |  |   |         | 41.9  | 
|                                                          
|                                                          
|                                                          
|                                                          
|Extraordinary loss, net of tax of $6.0 million             |                                                                            |                    |       |                   |  |      |       |      |  |   |        |       |  |   | (8.3    | )    
|                                                           |                                                                            |                    |        |                   |  |      |        |      |  |   |         |       |  |   |         |      
|                                                           | Net income                                                                 |                    | $      | 19.9              |  |      | $      | 19.7 |  |   | $       | 49.5  |  |   | $       | 33.6  | 
|                                                           |                                                                            |                    |        |                   |  |      |        |      |  |   |         |       |  |   |         |      
|Per share information:                                     |                                                                            |                    |        |                   |  |      |        |      |  |   |         |       |  |   |         |      
|                                                          
|                                                          
|                                                          
|                                                          
|Earnings before extraordinary loss                         |                                                                            | $                  | 0.66   |                   |  | $    | 0.65   |      |  | $ | 1.63    |       |  | $ | 1.39    |      
|                                                          
|                                                          
|                                                          
|                                                          
|Extraordinary loss, net of tax                             |                                                                            |                    |       |                   |  |      |       |      |  |   |        |       |  |   | (0.28   | )    
|                                                           |                                                                            |                    |        |                   |  |      |        |      |  |   |         |       |  |   |         |      
|Basic net income per share                                 |                                                                            | $                  | 0.66   |                   |  | $    | 0.65   |      |  | $ | 1.63    |       |  | $ | 1.11    |      
|                                                           |                                                                            |                    |        |                   |  |      |        |      |  |   |         |       |  |   |         |      
|Basic average shares outstanding (in thousands)            |                                                                            |                    | 30,337 |                   |  |      | 30,180 |      |  |   | 30,333  |       |  |   | 30,134  |      
|                                                           |                                                                            |                    |        |                   |  |      |        |      |  |   |         |       |  |   |         |      
|Earnings before extraordinary loss                         |                                                                            | $                  | 0.63   |                   |  | $    | 0.62   |      |  | $ | 1.55    |       |  | $ | 1.29    |      
|                                                          
|                                                          
|                                                          
|                                                          
|Extraordinary loss, net of tax                             |                                                                            |                    |       |                   |  |      |       |      |  |   |        |       |  |   | (0.26   | )    
|                                                           |                                                                            |                    |        |                   |  |      |        |      |  |   |         |       |  |   |         |      
|Diluted net income per share                               |                                                                            | $                  | 0.63   |                   |  | $    | 0.62   |      |  | $ | 1.55    |       |  | $ | 1.03    |      
|                                                           |                                                                            |                    |        |                   |  |      |        |      |  |   |         |       |  |   |         |      
|Diluted average shares outstanding (in thousands)          |                                                                            |                    | 31,678 |                   |  |      | 32,004 |      |  |   | 31,880  |       |  |   | 32,482  |      
|                                                           |                                                                            |                    |        |                   |  |      |        |      |  |   |         |       |  |   |         |      

See accompanying notes to consolidated financial statements.

3



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HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES


Consolidated Balance Sheets

(Millions of Dollars)


|                                     |                                                                                                          |                                                                                                                                    |                                            |             |     |         |       |       |     |         | 
|------------------------------------ | -------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ----------- | --- | ------- | ----- | ----- | --- | ------- | 
|                                     |                                                                                                          | October 31,                                                                                                                        |                                            | January 31,
|                                     |                                                                                                          | 1999                                                                                                                               |                                            | 1999       
|                                     |                                                                                                          |                                                                                                                                    |                                            |            
|                                     |                                                                                                          | (Unaudited)                                                                                                                        |                                            |            
|                                    
|                                    
|                                    
|                                    
|Assets                               |                                                                                                          |                                                                                                                                    |                                            |             |     |         |       |      
|                                     |                                                                                                          |                                                                                                                                    |                                            |             |     |         |       |      
|Current assets:                      |                                                                                                          |                                                                                                                                    |                                            |             |     |         |       |      
|                                    
|                                    
|                                    
|                                    
|                                     | Cash and cash equivalents                                                                                |                                                                                                                                    | $                                          | 50.6        |     |         | $     | 51.3  |    
|                                    
|                                    
|                                    
|                                    
|                                     | Receivables (less allowance of $6.3 million at October 
	 31, 1999 and $4.0 million at January 31, 1999) |                                                                                                                                    |                                            | 246.7       |     |         |       | 181.6 |    
|                                    
|                                    
|                                    
|                                    
|                                     | Inventory                                                                                                |                                                                                                                                    |                                            | 184.7       |     |         |       | 166.6 |    
|                                    
|                                    
|                                    
|                                    
|                                     | Prepaid expenses and other                                                                               |                                                                                                                                    |                                            | 17.9        |     |         |       | 22.8  |    
|                                     |                                                                                                          |                                                                                                                                    |                                            |             |     |         |       |      
|                                     |                                                                                                          |                                                                                                                                    | Total current assets                       |             |     | 499.9   |       |       |     | 422.3   | 
|                                    
|                                    
|                                    
|                                    
|Net property, plant and equipment    |                                                                                                          |                                                                                                                                    | 1,155.2                                    |             |     |         | 878.0 |      
|                                    
|                                    
|                                    
|                                    
|Goodwill and other assets            |                                                                                                          |                                                                                                                                    | 1,176.9                                    |             |     |         | 810.6 |      
|                                     |                                                                                                          |                                                                                                                                    |                                            |             |     |         |       |      
|                                     |                                                                                                          |                                                                                                                                    | Total assets                               |             | $   | 2,832.0 |       |       | $   | 2,110.9 | 
|                                     |                                                                                                          |                                                                                                                                    |                                            |             |     |         |       |      
|Liabilities and Stockholders Equity |                                                                                                          |                                                                                                                                    |                                            |             |     |         |       |      
|                                     |                                                                                                          |                                                                                                                                    |                                            |             |     |         |       |      
|Current liabilities:                 |                                                                                                          |                                                                                                                                    |                                            |             |     |         |       |      
|                                    
|                                    
|                                    
|                                    
|                                     | Bank borrowings                                                                                          |                                                                                                                                    | $                                          | 89.2        |     |         | $     | 44.8  |    
|                                    
|                                    
|                                    
|                                    
|                                     | Current portion of long-term debt                                                                        |                                                                                                                                    |                                            | 18.5        |     |         |       | 12.3  |    
|                                    
|                                    
|                                    
|                                    
|                                     | Accounts payable and accrued liabilities                                                                 |                                                                                                                                    |                                            | 502.3       |     |         |       | 456.7 |    
|                                     |                                                                                                          |                                                                                                                                    |                                            |             |     |         |       |      
|                                     |                                                                                                          |                                                                                                                                    | Total current liabilities                  |             |     | 610.0   |       |       |     | 513.8   | 
|                                    
|                                    
|                                    
|                                    
|                                     | Long-term debt                                                                                           |                                                                                                                                    |                                            | 1,571.3     |     |         |       | 976.1 |    
|                                    
|                                    
|                                    
|                                    
|                                     | Pension and other long-term liabilities                                                                  |                                                                                                                                    |                                            | 339.0       |     |         |       | 329.1 |    
|                                    
|                                    
|                                    
|                                    
|                                     | Deferred income taxes                                                                                    |                                                                                                                                    |                                            | 76.6        |     |         |       | 58.4  |    
|                                    
|                                    
|                                    
|                                    
|                                     | Minority interest                                                                                        |                                                                                                                                    |                                            | 13.0        |     |         |       | 12.6  |    
|                                     |                                                                                                          |                                                                                                                                    |                                            |             |     |         |       |      
|                                     |                                                                                                          |                                                                                                                                    | Total liabilities                          |             |     | 2,609.9 |       |       |     | 1,890.0 | 
|                                    
|                                    
|                                    
|                                    
|Commitments and Contingencies:       |                                                                                                          |                                                                                                                                    |                                            |             |     |         |       |      
|                                    
|                                    
|                                    
|                                    
|Stockholders equity:                |                                                                                                          |                                                                                                                                    |                                            |             |     |         |       |      
|                                    
|                                    
|                                    
|                                    
|                                     | Preferred stock, 25,000,000 shares authorized, none issued or
	outstanding                               |                                                                                                                                    |                                            |            |     |         |       |      |    
|                                    
|                                    
|                                    
|                                    
|                                     | Common stock, par value $0.01 per share:                                                                 |                                                                                                                                    |                                            |             |     |         |       |       |    
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                                                          | Voting  authorized 99,000,000 shares; issued and
	outstanding 27,690,069 at October 31, 1999 and 27,675,209 at
	 January 31, 1999 |                                            |             | 0.3 |         |       |       | 0.3 |        
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                                                          | Nonvoting  authorized 5,000,000 shares; issued and
	outstanding, 2,649,026 at October 31 1999 and
	January 31, 1999               |                                            |             |    |         |       |       |    |        
|                                    
|                                    
|                                    
|                                    
|                                     | Additional paid in capital                                                                               |                                                                                                                                    |                                            | 237.1       |     |         |       | 236.8 |    
|                                    
|                                    
|                                    
|                                    
|                                     | Retained earnings (accumulated deficit)                                                                  |                                                                                                                                    |                                            | 42.4        |     |         |       | (7.1  | )  
|                                    
|                                    
|                                    
|                                    
|                                     | Accumulated other comprehensive income                                                                   |                                                                                                                                    |                                            | (57.7       | )   |         |       | (9.1  | )  
|                                     |                                                                                                          |                                                                                                                                    |                                            |             |     |         |       |      
|                                     |                                                                                                          |                                                                                                                                    | Total stockholders equity                 |             |     | 222.1   |       |       |     | 220.9   | 
|                                     |                                                                                                          |                                                                                                                                    |                                            |             |     |         |       |      
|                                     |                                                                                                          |                                                                                                                                    | Total liabilities and stockholders equity |             | $   | 2,832.0 |       |       | $   | 2,110.9 | 
|                                     |                                                                                                          |                                                                                                                                    |                                            |             |     |         |       |      

See accompanying notes to consolidated financial statements.

4



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##### Table of Contents








HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES


Consolidated Statements of Cash Flows

(Millions of Dollars)


(Unaudited)


|                                                                                   |                                                                                   |                                          |                                       |        |        |        |      |       |       |        |  
|---------------------------------------------------------------------------------- | --------------------------------------------------------------------------------- | ---------------------------------------- | ------------------------------------- | ------ | ------ | ------ | ---- | ----- | ----- | ------ | -
|                                                                                   |                                                                                   |                                         
|                                                                                   |                                                                                   | Nine Months Ended                       
|                                                                                   |                                                                                   | October 31,                             
|                                                                                   |                                                                                   |                                         
|                                                                                   |                                                                                   | 1999                                     |                                       | 1998  
|                                                                                   |                                                                                   |                                          |                                       |       
|Cash flows from operating activities:                                              |                                                                                   |                                          |                                       |        |        |        |      |      
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|Net income                                                                         |                                                                                   | $                                        | 49.5                                  |        |        | $      | 33.6 |      
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|Adjustments to reconcile net income to net cash provided by
	operating activities: |                                                                                   |                                          |                                       |        |        |        |      |      
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Depreciation and tooling amortization                                             |                                          |                                       | 79.8   |        |        |      | 49.6  |      
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Amortization of intangibles                                                       |                                          |                                       | 22.0   |        |        |      | 13.6  |      
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Amortization of deferred financing fees                                           |                                          |                                       | 4.9    |        |        |      | 3.6   |      
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Increase (decrease) in deferred taxes                                             |                                          |                                       | (2.0   | )      |        |      | 12.9  |      
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Increase in minority interest                                                     |                                          |                                       | 1.3    |        |        |      | 3.6   |      
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Equity in earnings of subsidiaries                                                |                                          |                                       | (2.1   | )      |        |      | (0.6  | )    
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Extraordinary loss                                                                |                                          |                                       |       |        |        |      | 14.4  |      
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Gain on disposal of assets/business                                               |                                          |                                       | (8.0   | )      |        |      |      |      
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Changes in operating assets and liabilities that increase
	(decrease) cash flows: |                                          |                                       |        |        |        |      |       |      
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   |                                                                                   | Receivables                              |                                       |        | (112.8 | )      |      |       | (40.6 | )     
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   |                                                                                   | Inventories                              |                                       |        | (0.6   | )      |      |       | (2.7  | )     
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   |                                                                                   | Prepaid expenses and other               |                                       |        | 3.2    |        |      |       | (1.8  | )     
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   |                                                                                   | Accounts payable and accrued liabilities |                                       |        | 6.1    |        |      |       | 7.5   |       
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   |                                                                                   | Other long-term liabilities              |                                       |        | (6.2   | )      |      |       | (27.0 | )     
|                                                                                   |                                                                                   |                                          |                                       |        |        |        |      |      
|                                                                                   |                                                                                   |                                          | Cash provided by operating activities |        |        | 35.1   |      |       |       | 66.1   |  
|                                                                                   |                                                                                   |                                          |                                       |        |        |        |      |      
|Cash flows from investing activities:                                              |                                                                                   |                                          |                                       |        |        |        |      |      
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Acquisition of property, plant and equipment                                      |                                          |                                       | (136.1 | )      |        |      | (88.9 | )    
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Tooling expenditures                                                              |                                          |                                       | (9.2   | )      |        |      | (6.6  | )    
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Purchase of businesses, net of cash received                                      |                                          |                                       | (630.1 | )      |        |      | (79.3 | )    
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Proceeds from disposal of assets/business                                         |                                          |                                       | 40.0   |        |        |      |      |      
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Other, net                                                                        |                                          |                                       | (12.1  | )      |        |      | (26.7 | )    
|                                                                                   |                                                                                   |                                          |                                       |        |        |        |      |      
|                                                                                   |                                                                                   |                                          | Cash used for investing activities    |        |        | (747.5 | )    |       |       | (201.5 | )
|                                                                                   |                                                                                   |                                          |                                       |        |        |        |      |      
|Cash flows from financing activities:                                              |                                                                                   |                                          |                                       |        |        |        |      |      
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Net change in bank borrowings and revolver                                        |                                          |                                       | 630.3  |        |        |      | 10.7  |      
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Proceeds from accounts receivable securitization                                  |                                          |                                       | 99.4   |        |        |      | 120.8 |      
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Stock options exercised                                                           |                                          |                                       | 0.2    |        |        |      | 1.7   |      
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Fees paid to issue long term debt                                                 |                                          |                                       | (15.2  | )      |        |      | (1.4  | )    
|                                                                                   |                                                                                   |                                          |                                       |        |        |        |      |      
|                                                                                   |                                                                                   |                                          | Cash provided by financing activities |        |        | 714.7  |      |       |       | 131.8  |  
|                                                                                   |                                                                                   |                                          |                                       |        |        |        |      |      
|Effect of exchange rate changes on cash and cash equivalents                       |                                                                                   |                                          | (3.0                                  | )      |        |        | (1.7 | )    
|                                                                                   |                                                                                   |                                          |                                       |        |        |        |      |      
|                                                                                   |                                                                                   |                                          | Decrease in cash and cash equivalents |        |        | (0.7   | )    |       |       | (5.3   | )
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|Cash and cash equivalents at beginning of year                                     |                                                                                   |                                          | 51.3                                  |        |        |        | 23.1 |      
|                                                                                   |                                                                                   |                                          |                                       |        |        |        |      |      
|Cash and cash equivalents at end of period                                         |                                                                                   | $                                        | 50.6                                  |        |        | $      | 17.8 |      
|                                                                                   |                                                                                   |                                          |                                       |        |        |        |      |      
|Supplemental data:                                                                 |                                                                                   |                                          |                                       |        |        |        |      |      
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Cash paid for interest                                                            |                                          | $                                     | 17.2   |        |        | $    | 56.2  |      
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Cash paid for income taxes                                                        |                                          | $                                     | 12.5   |        |        | $    | 6.9   |      

See accompanying notes to consolidated financial statements.

5



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES






Notes to Consolidated Financial Statements


Three and Nine Months Ended October 31, 1999 and 1998


(Unaudited)


(Millions of Dollars Unless Otherwise Stated)


(1)  Basis of Presentation

The accompanying consolidated financial statements have been
prepared by management and in the opinion of management, contain
all adjustments, consisting of normal recurring adjustments,
necessary to present fairly the financial position of the Company
 as of October 31, 1999, and January 31, 1999, and the
results of its operations for the three and nine months ended
October 31, 1999, and 1998 and cash flows for the nine
months ended October 31, 1999, and 1998. The consolidated
financial statements should be read in conjunction with the
consolidated financial statements and notes thereto included in
the Companys Annual Report on Form 10-K for the fiscal
 year ended January 31, 1999. Results for interim periods
are not necessarily indicative of those to be expected for the
year.

(2)  Acquisitions/Divestitures

On February 3, 1999, the Company completed the acquisition
of CMI International, Inc. (CMI). The purchase price
for CMI was $605 million in cash, of which approximately
$129 million was used to repay CMIs outstanding
indebtedness existing at the time of the acquisition, and of
which approximately $476 million was paid to the
shareholders of CMI. The cash portion of the consideration, the
refinancing of the existing debt of CMI and the fees and expenses
 of the acquisition of CMI were financed with the proceeds of the
 Companys senior secured credit facilities and the issuance
 by the Company of $250 million in aggregate principal
amount of 8 1/4% senior subordinated notes due 2008
(the 8 1/4% Notes).

On April 21, 1999, the Company completed the acquisition of
Metaalindustrie Bergen B.V. (MIB). MIB is a full
service machining supplier, specializing in the machining of
large aluminum castings for a variety of automotive and
industrial applications located in Bergen, the Netherlands.

On July 1, 1999, the Company acquired an additional 45% of
the equity of its joint venture Siam Lemmerz Co., Limited in
Thailand. This transaction increased the Companys ownership
 from 25% to 70%.

On July 30, 1999, the Company completed the sale of its
equity interests in A-CMI and A-CMI Scandinavia Casting Center
ANS, two joint ventures formerly owned by CMI. The equity
interests were purchased by ALCOA Inc., CMIs partner in
these joint ventures, for net proceeds of $37 million.

The following unaudited pro forma financial data illustrates the
estimated effects as if the above-mentioned acquisitions had been
 completed as of the beginning of the periods presented, after
including the impact of certain adjustments, such as
amortization, depreciation, interest expense and the related
income tax effects:

|                             |  |              |       |             |  |      |       |      |  |   |         |  |  |   |         | 
|---------------------------- |  | ------------ | ----- | ----------- |  | ---- | ----- | ---- |  | - | ------- |  |  | - | ------- | 
|                             |  |              |       |            
|                             |  | Three Months |       | Nine Months
|                             |  | Ended        |       | Ended      
|                             |  |              |       |            
|                             |  | 1999         |       | 1998        |  | 1999 |       | 1998
|                             |  |              |       |             |  |      |       |     
|Sales                        |  | $            | 598.5 |             |  | $    | 573.9 |      |  | $ | 1,730.8 |  |  | $ | 1,703.9 | 
|                            
|                            
|                            
|                            
|Net income                   |  | $            | 19.9  |             |  | $    | 19.7  |      |  | $ | 49.5    |  |  | $ | 29.3    | 
|                            
|                            
|                            
|                            
|Basic net income per share   |  | $            | 0.66  |             |  | $    | 0.65  |      |  | $ | 1.63    |  |  | $ | 0.97    | 
|                            
|                            
|                            
|                            
|Diluted net income per share |  | $            | 0.63  |             |  | $    | 0.62  |      |  | $ | 1.55    |  |  | $ | 0.92    | 

The pro forma results are not necessarily indicative of the
actual results as if the transactions had been in effect for the
entire periods presented. In addition, they are not intended to
be a projection of future results and do not reflect, among other
 things, any synergies that might have been achieved from
combined operations.

6



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)

Three and Nine Months Ended October 31, 1999 and 1998


(Unaudited)


(Millions of Dollars Unless Otherwise Stated)


(3) Summary of New Accounting Pronouncements

In 1998, the American Institute of Certified Public Accountants
issued Statement of Position (SOP) 98-5,
Reporting the Costs of Start-Up Activities.
SOP 98-5 is effective January 1, 1999 and requires that
 start-up costs capitalized prior to January 1, 1999 be
written off and any future start-up costs be expensed as
incurred. The Company adopted this standard on February 1,
1999 and adoption did not have a material impact on the
Companys results of operations.

In June 1998 and June 1999, the Financial Accounting Standards
Board (FASB) issued Statement of Financial Accounting
 Standards (SFAS) No. 133, Accounting for
Derivative Instruments and Hedging Activities and
SFAS 137, Accounting for Derivative Instruments and
Hedging Activities-Deferral of the Effective Date of FASB
Statement No. 133. These Statements establish
accounting and reporting standards requiring that every
derivative instrument (including certain derivative instruments
embedded in other contracts) be recorded in the balance sheet as
either an asset or liability measured at its fair value. These
Statements require that changes in the derivatives fair
value be recognized currently in earnings unless specific hedge
accounting criteria are met.

Special accounting for qualifying hedges allows a
derivatives gains and losses to offset related results on
the hedged item in the income statement, and requires that a
company must formally document, designate, and assess the
effectiveness of transactions that receive hedge accounting. This
 accounting is effective for fiscal years beginning after
June 15, 2000. The Company anticipates adopting this
standard in its fiscal year 2001 and does not, at this time,
anticipate a material impact on the Companys financial
position or results of operations when adopted.

In September 1999, the Emerging Issues Task Force reached a
consensus for Issue 99-5, Accounting for
Pre-Production Costs Related to Long-Term Supply
Arrangements. This consensus may be applied on a
prospective basis for costs incurred after December 31,
1999, or as a cumulative effect adjustment as of the beginning of
 the current fiscal year. The Company is currently reviewing the
potential impact of this statement, but does not anticipate
adoption will have a material impact on the financial statements.

(4) Inventories

The major classes of inventory are as follows:

|                |       |             |      |             |  |   |      |       | 
|--------------- | ----- | ----------- | ---- | ----------- |  | - | ---- | ----- | 
|                |       | October 31, |      | January 31,
|                |       | 1999        |      | 1999       
|                |       |             |      |            
|Raw Materials   |       | $           | 66.6 |             |  | $ | 65.2 |      
|               
|               
|               
|               
|Work-in-process |       |             | 59.3 |             |  |   | 48.8 |      
|               
|               
|               
|               
|Finished goods  |       |             | 58.8 |             |  |   | 52.6 |      
|                |       |             |      |             |  |   |      |      
|                | Total |             | $    | 184.7       |  |   | $    | 166.6 | 
|                |       |             |      |             |  |   |      |      

7



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)

Three and Nine Months Ended October 31, 1999 and 1998


(Unaudited)


(Millions of Dollars Unless Otherwise Stated)


(5)  Property, plant and equipment

The major classes of property, plant and equipment are as
follows:

|                         |                                   |             |         |             |  |   |         |       | 
|------------------------ | --------------------------------- | ----------- | ------- | ----------- |  | - | ------- | ----- | 
|                         |                                   | October 31, |         | January 31,
|                         |                                   | 1999        |         | 1999       
|                         |                                   |             |         |            
|Land                     |                                   | $           | 29.0    |             |  | $ | 24.9    |      
|                        
|                        
|                        
|                        
|Buildings                |                                   |             | 262.8   |             |  |   | 201.1   |      
|                        
|                        
|                        
|                        
|Machinery and equipment  |                                   |             | 1,108.4 |             |  |   | 832.8   |      
|                         |                                   |             |         |             |  |   |         |      
|                         |                                   |             | 1,400.2 |             |  |   | 1,058.8 |      
|                        
|                        
|                        
|                        
|Accumulated depreciation |                                   |             | (245.0  | )           |  |   | (180.8  | )    
|                         |                                   |             |         |             |  |   |         |      
|                         | Net property, plant and equipment |             | $       | 1,155.2     |  |   | $       | 878.0 | 
|                         |                                   |             |         |             |  |   |         |      

(6)  Earnings per share

SFAS No. 128, Earnings per Share
(EPS), requires two calculations of earnings per
share to be disclosed, basic EPS and diluted EPS. Basic EPS is
computed using only the weighted average shares outstanding,
while diluted EPS is computed considering the dilutive effect of
options and warrants.

Shares outstanding for the three and nine months ended
October 31, 1999 and 1998, were as follows:

|                                          |                                             |              |        |             |  |      |        |        |  |  |        |        |  |  |        |        | 
|----------------------------------------- | ------------------------------------------- | ------------ | ------ | ----------- |  | ---- | ------ | ------ |  |  | ------ | ------ |  |  | ------ | ------ | 
|                                          |                                             |              |        |            
|                                          |                                             | Three Months |        | Nine Months
|                                          |                                             | Ended        |        | Ended      
|                                          |                                             |              |        |            
|                                          |                                             | 1999         |        | 1998        |  | 1999 |        | 1998  
|                                          |                                             |              |        |             |  |      |        |       
|Basic weighted average shares outstanding |                                             |              | 30,337 |             |  |      | 30,180 |        |  |  | 30,333 |        |  |  | 30,134 |       
|                                         
|                                         
|                                         
|                                         
|Dilutive effect of options and warrants   |                                             |              | 1,341  |             |  |      | 1,824  |        |  |  | 1,547  |        |  |  | 2,348  |       
|                                          |                                             |              |        |             |  |      |        |        |  |  |        |        |  |  |        |       
|                                          | Diluted weighted average shares outstanding |              |        | 31,678      |  |      |        | 32,004 |  |  |        | 31,880 |  |  |        | 32,482 | 
|                                          |                                             |              |        |             |  |      |        |        |  |  |        |        |  |  |        |       

(7)  Comprehensive Income

SFAS No. 130, Reporting Comprehensive Income,
establishes standards for the reporting and display of
comprehensive income. Comprehensive income is defined as all
changes in a Companys net assets except changes resulting
from transactions with shareholders. It differs from net income
in that certain items currently recorded to equity would be a
part of comprehensive income.

The components of comprehensive income for the nine months ended
October 31, 1999 and 1998 are as follows:

|                                   |                            |          |       |          |  |   |      |      | 
|---------------------------------- | -------------------------- | -------- | ----- | -------- |  | - | ---- | ---- | 
|                                   |                            | Oct. 31, |       | Oct. 31,
|                                   |                            | 1999     |       | 1998    
|                                   |                            |          |       |         
|Net Income                         |                            | $        | 49.5  |          |  | $ | 33.6 |     
|                                  
|                                  
|                                  
|                                  
|Cumulative translation adjustments |                            |          | (48.6 | )        |  |   | 4.6  |     
|                                   |                            |          |       |          |  |   |      |     
|                                   | Total comprehensive income |          | $     | 0.9      |  |   | $    | 38.2 | 
|                                   |                            |          |       |          |  |   |      |     

(8)  Commitments and Contingencies

Management believes that at October 31, 1999, the Company
was in compliance with the various covenants under the agreements
 pursuant to which it has or may borrow money. Management expects
 that the

8



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)

Three and Nine Months Ended October 31, 1999 and 1998


(Unaudited)


(Millions of Dollars Unless Otherwise Stated)




(8)  Commitments and
Contingencies  (Continued)


Company will remain in compliance with these covenants in all
material respects through the period ending October 31,
2000.

The Company is party to various litigation. Management believes
that the outcome of these lawsuits will not have a material
adverse effect on the consolidated operations or financial
condition of the Company.

(9)  Segment Reporting

The Company is organized based primarily on markets served and
products produced. Under this organization structure, the
Companys operating segments have been aggregated into three
 reportable segments: Automotive Wheels, Cast Components and
Other. The Other category includes Commercial Highway products,
the corporate office and elimination of intercompany activities,
none of which meet the requirements of being classified as an
operating segment.

The following table represents revenues and other financial
information by business segment for the nine months ended
October 31:

|                  |       |         |         |            |  |              |       |         |  |      |      |      |  |   |      |      |  |   |         |         |  |   |         |         | 
|----------------- | ----- | ------- | ------- | ---------- |  | ------------ | ----- | ------- |  | ---- | ---- | ---- |  | - | ---- | ---- |  | - | ------- | ------- |  | - | ------- | ------- | 
|                  |       |         |         |            |  |             
|                  |       | Revenue |         | Net Income |  | Total Assets
|                  |       |         |         |            |  |             
|                  |       | 1999    |         | 1998       |  | 1999         |       | 1998    |  | 1999 |      | 1998
|                  |       |         |         |            |  |              |       |         |  |      |      |     
|Automotive Wheels |       | $       | 1,022.4 |            |  | $            | 934.9 |         |  | $    | 32.1 |      |  | $ | 21.4 |      |  | $ | 2,183.3 |         |  | $ | 2,103.7 |        
|                 
|                 
|                 
|                 
|Cast Components   |       |         | 539.4   |            |  |              | 150.8 |         |  |      | 11.2 |      |  |   | 7.7  |      |  |   | 950.3   |         |  |   | 212.3   |        
|                 
|                 
|                 
|                 
|Other             |       |         | 169.0   |            |  |              | 155.1 |         |  |      | 6.2  |      |  |   | 4.5  |      |  |   | (301.6  | )       |  |   | (313.8  | )      
|                  |       |         |         |            |  |              |       |         |  |      |      |      |  |   |      |      |  |   |         |         |  |   |         |        
|                  | Total |         | $       | 1,730.8    |  |              | $     | 1,240.8 |  |      | $    | 49.5 |  |   | $    | 33.6 |  |   | $       | 2,832.0 |  |   | $       | 2,002.2 | 
|                  |       |         |         |            |  |              |       |         |  |      |      |      |  |   |      |      |  |   |         |         |  |   |         |        

(10)  Reclassifications

Certain prior period amounts have been reclassified to conform to
 the current year presentation.

(11)  Guarantor and Nonguarantor Financial Statements

In connection with the Companys merger with Motor Wheel,
and as part of the financing thereof, the Company issued and sold
 $250 million in aggregate principal amount of 11% senior
subordinated notes due 2006 (the 11% Notes) in a
 public offering.

In connection with the Companys acquisition of Lemmerz
Holding GmbH on June 30, 1997 (the Lemmerz
Acquisition), the Company issued and sold $400 million
 in aggregate principal amount of 9 1/8% senior subordinated
 notes due 2007 (the 9 1/8% Notes).

In anticipation of the acquisition of CMI and as part of the
financing thereof, the Company issued and sold the 8  1/4%
Notes. Effective June 17, 1999, the Company completed the
offer to exchange all of the 8  1/4% Notes for 8  1/4%
Series B Senior Subordinated Notes due 2008.

The 11% Notes, 9 1/8% Notes and 8  1/4% Notes rank pari passuwith each other and are general unsecured
obligations of the Company, subordinated in right of payment to
all existing and future senior indebtedness of the Company, and
are guaranteed by certain of the Companys domestic
subsidiaries.

9



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)

Three and Nine Months Ended October 31, 1999 and 1998


(Unaudited)


(Millions of Dollars Unless Otherwise Stated)


(11)  Guarantor and Nonguarantor Financial
Statements  Continued

The following condensed consolidating financial information
presents:



| |     |                                                                                                                                                                                                                                                                                                                                            
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Condensed consolidating financial statements as of
	October 31, 1999, and January 31, 1999, and for the
	nine-month periods ended October  31, 1999, and 1998, of
	(a) Hayes Lemmerz International, Inc., the parent,
	(b) the guarantor subsidiaries, (c) the nonguarantor
	subsidiaries and (d) the Company on a consolidated basis,
	and
|
| | (2) | Elimination entries necessary to consolidate Hayes Lemmerz
	International, Inc., the parent, with the guarantor and
	nonguarantor subsidiaries.                                                                                                                                                                                            

Investments in foreign subsidiaries are accounted for by the
parent on the equity method (domestic subsidiaries are accounted
for by the parent on the cost method) for purposes of the
consolidating presentation. The principle elimination entries
eliminate investments in subsidiaries and intercompany balances
and transactions.

Condensed Consolidating Statement of Operations

For the Nine Months Ended October 31, 1999


|                                                  |                                                        |        |       |              |  |              |       |              |  |              |       |       |  |   |      |   |  |   |         |       | 
|------------------------------------------------- | ------------------------------------------------------ | ------ | ----- | ------------ |  | ------------ | ----- | ------------ |  | ------------ | ----- | ----- |  | - | ---- | - |  | - | ------- | ----- | 
|                                                  |                                                        |        |       | Guarantor    |  | Nonguarantor |       |              |  | Consolidated
|                                                  |                                                        | Parent |       | Subsidiaries |  | Subsidiaries |       | Eliminations |  | Total       
|                                                  |                                                        |        |       |              |  |              |       |              |  |             
|Net sales                                         |                                                        | $      | 261.6 |              |  | $            | 555.1 |              |  | $            | 916.5 |       |  | $ | (2.4 | ) |  | $ | 1,730.8 |      
|                                                 
|                                                 
|                                                 
|                                                 
|Cost of goods sold                                |                                                        |        | 220.4 |              |  |              | 465.5 |              |  |              | 741.7 |       |  |   | (2.4 | ) |  |   | 1,425.2 |      
|                                                  |                                                        |        |       |              |  |              |       |              |  |              |       |       |  |   |      |   |  |   |         |      
|                                                  | Gross profit                                           |        |       | 41.2         |  |              |       | 89.6         |  |              |       | 174.8 |  |   |      |  |  |   |         | 305.6 | 
|                                                 
|                                                 
|                                                 
|                                                 
|Marketing, general and administration             |                                                        |        | 4.0   |              |  |              | 17.5  |              |  |              | 49.2  |       |  |   |     |   |  |   | 70.7    |      
|                                                 
|                                                 
|                                                 
|                                                 
|Engineering and product development               |                                                        |        | 3.3   |              |  |              | 5.0   |              |  |              | 7.3   |       |  |   |     |   |  |   | 15.6    |      
|                                                 
|                                                 
|                                                 
|                                                 
|Amortization of intangibles                       |                                                        |        | 1.1   |              |  |              | 6.1   |              |  |              | 14.8  |       |  |   |     |   |  |   | 22.0    |      
|                                                 
|                                                 
|                                                 
|                                                 
|Equity in earnings of unconsolidated subsidiaries |                                                        |        | (1.8  | )            |  |              |      |              |  |              | (0.3  | )     |  |   |     |   |  |   | (2.1    | )    
|                                                 
|                                                 
|                                                 
|                                                 
|Other income, net                                 |                                                        |        | (2.1  | )            |  |              | (1.6  | )            |  |              | (1.6  | )     |  |   |     |   |  |   | (5.3    | )    
|                                                  |                                                        |        |       |              |  |              |       |              |  |              |       |       |  |   |      |   |  |   |         |      
|                                                  | Earnings from operations                               |        |       | 36.7         |  |              |       | 62.6         |  |              |       | 105.4 |  |   |      |  |  |   |         | 204.7 | 
|                                                 
|                                                 
|                                                 
|                                                 
|Interest expense, net                             |                                                        |        | 20.8  |              |  |              | 41.9  |              |  |              | 52.8  |       |  |   |     |   |  |   | 115.5   |      
|                                                  |                                                        |        |       |              |  |              |       |              |  |              |       |       |  |   |      |   |  |   |         |      
|                                                  | Earnings before taxes on income, And minority interest |        |       | 15.9         |  |              |       | 20.7         |  |              |       | 52.6  |  |   |      |  |  |   |         | 89.2  | 
|                                                 
|                                                 
|                                                 
|                                                 
|Income tax provision                              |                                                        |        | 8.3   |              |  |              | 9.7   |              |  |              | 20.4  |       |  |   |     |   |  |   | 38.4    |      
|                                                  |                                                        |        |       |              |  |              |       |              |  |              |       |       |  |   |      |   |  |   |         |      
|                                                  | Earnings before minority interest                      |        |       | 7.6          |  |              |       | 11.0         |  |              |       | 32.2  |  |   |      |  |  |   |         | 50.8  | 
|                                                 
|                                                 
|                                                 
|                                                 
|Minority interest                                 |                                                        |        |      |              |  |              | 0.2   |              |  |              | 1.1   |       |  |   |     |   |  |   | 1.3     |      
|                                                  |                                                        |        |       |              |  |              |       |              |  |              |       |       |  |   |      |   |  |   |         |      
|Net income                                        |                                                        | $      | 7.6   |              |  | $            | 10.8  |              |  | $            | 31.1  |       |  | $ |     |   |  | $ | 49.5    |      
|                                                  |                                                        |        |       |              |  |              |       |              |  |              |       |       |  |   |      |   |  |   |         |      

10



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)

Three and Nine Months Ended October 31, 1999 and 1998


(Unaudited)


(Millions of Dollars Unless Otherwise Stated)


(11)  Guarantor and Nonguarantor Financial
Statements  Continued

Condensed Consolidating Statement of Operations

For the Nine months ended October 31, 1998


|                                                                                  |                          |        |       |              |   |              |       |              |  |              |       |       |  |   |      |   |  |   |         |       | 
|--------------------------------------------------------------------------------- | ------------------------ | ------ | ----- | ------------ | - | ------------ | ----- | ------------ |  | ------------ | ----- | ----- |  | - | ---- | - |  | - | ------- | ----- | 
|                                                                                  |                          |        |       | Guarantor    |   | Nonguarantor |       |              |  | Consolidated
|                                                                                  |                          | Parent |       | Subsidiaries |   | Subsidiaries |       | Eliminations |  | Total       
|                                                                                  |                          |        |       |              |   |              |       |              |  |             
|Net sales                                                                         |                          | $      | 215.1 |              |   | $            | 514.0 |              |  | $            | 519.3 |       |  | $ | (7.6 | ) |  | $ | 1,240.8 |      
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Cost of goods sold                                                                |                          |        | 185.2 |              |   |              | 428.1 |              |  |              | 418.4 |       |  |   | (7.6 | ) |  |   | 1,024.1 |      
|                                                                                  |                          |        |       |              |   |              |       |              |  |              |       |       |  |   |      |   |  |   |         |      
|                                                                                  | Gross profit             |        |       | 29.9         |   |              |       | 85.9         |  |              |       | 100.9 |  |   |      |  |  |   |         | 216.7 | 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Marketing, general and administration                                             |                          |        | 6.9   |              |   |              | 13.8  |              |  |              | 28.0  |       |  |   |     |   |  |   | 48.7    |      
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Engineering and product development                                               |                          |        | 2.1   |              |   |              | 4.2   |              |  |              | 9.4   |       |  |   |     |   |  |   | 15.7    |      
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Amortization of intangibles                                                       |                          |        | 1.0   |              |   |              | 6.2   |              |  |              | 5.5   |       |  |   |     |   |  |   | 12.7    |      
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Equity in earnings of unconsolidated subsidiaries                                 |                          |        | (0.6  | )            |   |              |      |              |  |              |      |       |  |   |     |   |  |   | (0.6    | )    
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Other income, net                                                                 |                          |        | (0.5  | )            |   |              | (0.1  | )            |  |              | (3.3  | )     |  |   |     |   |  |   | (3.9    | )    
|                                                                                  |                          |        |       |              |   |              |       |              |  |              |       |       |  |   |      |   |  |   |         |      
|                                                                                  | Earnings from operations |        |       | 21.0         |   |              |       | 61.8         |  |              |       | 61.3  |  |   |      |  |  |   |         | 144.1 | 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Interest expense, net                                                             |                          |        | 28.7  |              |   |              | 35.4  |              |  |              | 5.3   |       |  |   |     |   |  |   | 69.4    |      
|                                                                                  |                          |        |       |              |   |              |       |              |  |              |       |       |  |   |      |   |  |   |         |      
|Earnings (loss) before taxes on income, minority interest and
	extraordinary loss |                          |        | (7.7  | )            |   |              | 26.4  |              |  |              | 56.0  |       |  |   |     |   |  |   | 74.7    |      
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Income tax provision                                                              |                          |        | 11.5  |              |   |              | 9.4   |              |  |              | 10.5  |       |  |   |     |   |  |   | 31.4    |      
|                                                                                  |                          |        |       |              |   |              |       |              |  |              |       |       |  |   |      |   |  |   |         |      
|Earnings (loss) before minority interest and extraordinary loss                   |                          |        | (19.2 | )            |   |              | 17.0  |              |  |              | 45.5  |       |  |   |     |   |  |   | 43.3    |      
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Minority interest                                                                 |                          |        |      |              |   |              | 0.2   |              |  |              | 1.2   |       |  |   |     |   |  |   | 1.4     |      
|                                                                                  |                          |        |       |              |   |              |       |              |  |              |       |       |  |   |      |   |  |   |         |      
|Earnings (loss) before extraordinary loss                                         |                          |        | (19.2 | )            |   |              | 16.8  |              |  |              | 44.3  |       |  |   |      |   |  |   | 41.9    |      
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Extraordinary loss, net of tax                                                    |                          |        | 8.3   |              |   |              |      |              |  |              |      |       |  |   |      |   |  |   | 8.3     |      
|                                                                                  |                          |        |       |              |   |              |       |              |  |              |       |       |  |   |      |   |  |   |         |      
|                                                                                  | Net income (loss)        |        | $     | (27.5        | ) |              | $     | 16.8         |  |              | $     | 44.3  |  |   | $    |  |  |   | $       | 33.6  | 
|                                                                                  |                          |        |       |              |   |              |       |              |  |              |       |       |  |   |      |   |  |   |         |      

11



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)

Three and Nine Months Ended October 31, 1999 and 1998


(Unaudited)


(Millions of Dollars Unless Otherwise Stated)


(11)  Guarantor and Nonguarantor Financial
Statements  Continued

Condensed Consolidating Balance Sheet

As of October 31, 1999


|                                         |                                            |        |         |              |  |              |       |              |  |              |         |         |  |   |          |          |   |   |         |         | 
|---------------------------------------- | ------------------------------------------ | ------ | ------- | ------------ |  | ------------ | ----- | ------------ |  | ------------ | ------- | ------- |  | - | -------- | -------- | - | - | ------- | ------- | 
|                                         |                                            |        |         | Guarantor    |  | Nonguarantor |       |              |  | Consolidated
|                                         |                                            | Parent |         | Subsidiaries |  | Subsidiaries |       | Eliminations |  | Total       
|                                         |                                            |        |         |              |  |              |       |              |  |             
|Cash and cash equivalents                |                                            | $      | 26.7    |              |  | $            | 0.1   |              |  | $            | 23.8    |         |  | $ |         |          |   | $ | 50.6    |        
|                                        
|                                        
|                                        
|                                        
|Receivables                              |                                            |        | 88.7    |              |  |              | 35.9  |              |  |              | 122.1   |         |  |   |         |          |   |   | 246.7   |        
|                                        
|                                        
|                                        
|                                        
|Inventories                              |                                            |        | 36.4    |              |  |              | 46.8  |              |  |              | 101.5   |         |  |   |         |          |   |   | 184.7   |        
|                                        
|                                        
|                                        
|                                        
|Prepaid expenses and other               |                                            |        | 4.6     |              |  |              | 5.0   |              |  |              | 10.0    |         |  |   | (1.7     | )        |   |   | 17.9    |        
|                                         |                                            |        |         |              |  |              |       |              |  |              |         |         |  |   |          |          |   |   |         |        
|                                         | Total current assets                       |        |         | 156.4        |  |              |       | 87.8         |  |              |         | 257.4   |  |   |          | (1.7     | ) |   |         | 499.9   | 
|                                        
|                                        
|                                        
|                                        
|Net property, plant and equipment        |                                            |        | 162.3   |              |  |              | 333.0 |              |  |              | 659.9   |         |  |   |         |          |   |   | 1,155.2 |        
|                                        
|                                        
|                                        
|                                        
|Goodwill and other assets                |                                            |        | 1,423.8 |              |  |              | 308.9 |              |  |              | 708.5   |         |  |   | (1,264.3 | )        |   |   | 1,176.9 |        
|                                         |                                            |        |         |              |  |              |       |              |  |              |         |         |  |   |          |          |   |   |         |        
|                                         | Total assets                               |        | $       | 1,742.5      |  |              | $     | 729.7        |  |              | $       | 1,625.8 |  |   | $        | (1,266.0 | ) |   | $       | 2,832.0 | 
|                                         |                                            |        |         |              |  |              |       |              |  |              |         |         |  |   |          |          |   |   |         |        
|Bank borrowings                          |                                            | $      | 2.7     |              |  |              |      |              |  | $            | 86.5    |         |  |   |         |          |   | $ | 89.2    |        
|                                        
|                                        
|                                        
|                                        
|Current portion of long-term debt        |                                            |        | 0.2     |              |  |              |      |              |  |              | 18.3    |         |  |   |         |          |   |   | 18.5    |        
|                                        
|                                        
|                                        
|                                        
|Accounts payable and accrued liabilities |                                            |        | 125.2   |              |  |              | 104.0 |              |  |              | 276.8   |         |  |   | (3.7     | )        |   |   | 502.3   |        
|                                         |                                            |        |         |              |  |              |       |              |  |              |         |         |  |   |          |          |   |   |         |        
|                                         | Total current liabilities                  |        |         | 128.1        |  |              |       | 104.0        |  |              |         | 381.6   |  |   |          | (3.7     | ) |   |         | 610.0   | 
|                                        
|                                        
|                                        
|                                        
|Long-term debt, net of current portion   |                                            |        | 1,470.7 |              |  |              |      |              |  |              | 100.6   |         |  |   |         |          |   |   | 1,571.3 |        
|                                        
|                                        
|                                        
|                                        
|Deferred income taxes                    |                                            |        | (5.1    | )            |  |              | 28.5  |              |  |              | 53.2    |         |  |   |         |          |   |   | 76.6    |        
|                                        
|                                        
|                                        
|                                        
|Pension and other long-term liabilities  |                                            |        | 91.3    |              |  |              | 62.3  |              |  |              | 187.9   |         |  |   | (2.5     | )        |   |   | 339.0   |        
|                                        
|                                        
|                                        
|                                        
|Minority interest                        |                                            |        |        |              |  |              |      |              |  |              | 13.0    |         |  |   |         |          |   |   | 13.0    |        
|                                        
|                                        
|                                        
|                                        
|Parent loans                             |                                            |        | (135.4  | )            |  |              | 302.2 |              |  |              | (166.4  | )       |  |   | (0.4     | )        |   |   | (0.0    | )      
|                                         |                                            |        |         |              |  |              |       |              |  |              |         |         |  |   |          |          |   |   |         |        
|                                         | Total liabilities                          |        |         | 1,549.6      |  |              |       | 497.0        |  |              |         | 569.9   |  |   |          | (6.6     | ) |   |         | 2,609.9 | 
|                                        
|                                        
|                                        
|                                        
|Common stock                             |                                            |        | 0.3     |              |  |              |      |              |  |              |        |         |  |   |         |          |   |   | 0.3     |        
|                                        
|                                        
|                                        
|                                        
|Additional paid-in capital               |                                            |        | 252.0   |              |  |              | 110.5 |              |  |              | 1,004.0 |         |  |   | (1,129.4 | )        |   |   | 237.1   |        
|                                        
|                                        
|                                        
|                                        
|Retained earnings (accumulated deficit)  |                                            |        | (51.8   | )            |  |              | 123.4 |              |  |              | 100.8   |         |  |   | (130.0   | )        |   |   | 42.4    |        
|                                        
|                                        
|                                        
|                                        
|Accumulated other comprehensive income   |                                            |        | (7.6    | )            |  |              | (1.2  | )            |  |              | (48.9   | )       |  |   |         |          |   |   | (57.7   | )      
|                                         |                                            |        |         |              |  |              |       |              |  |              |         |         |  |   |          |          |   |   |         |        
|                                         | Total stockholders equity                 |        |         | 192.9        |  |              |       | 232.7        |  |              |         | 1,055.9 |  |   |          | (1,259.4 | ) |   |         | 222.1   | 
|                                        
|                                        
|                                        
|                                        
|                                         | Total liabilities and stockholders equity |        | $       | 1,742.5      |  |              | $     | 729.7        |  |              | $       | 1,625.8 |  |   | $        | (1,266.0 | ) |   | $       | 2,832.0 | 
|                                         |                                            |        |         |              |  |              |       |              |  |              |         |         |  |   |          |          |   |   |         |        

12



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)

Three and Nine Months Ended October 31, 1999 and 1998


(Unaudited)


(Millions of Dollars Unless Otherwise Stated)


(11)  Guarantor and Nonguarantor Financial
Statements  Continued

Condensed Consolidating Balance Sheet

January 31, 1999


|                                         |                                            |        |        |              |  |              |       |              |  |              |       |         |  |   |        |        |   |   |       |         | 
|---------------------------------------- | ------------------------------------------ | ------ | ------ | ------------ |  | ------------ | ----- | ------------ |  | ------------ | ----- | ------- |  | - | ------ | ------ | - | - | ----- | ------- | 
|                                         |                                            |        |        | Guarantor    |  | Nonguarantor |       |              |  | Consolidated
|                                         |                                            | Parent |        | Subsidiaries |  | Subsidiaries |       | Eliminations |  | Total       
|                                         |                                            |        |        |              |  |              |       |              |  |             
|Cash and cash equivalents                |                                            | $      | 23.3   |              |  | $            | 0.1   |              |  | $            | 27.9  |         |  | $ |       |        |   | $ | 51.3  |        
|                                        
|                                        
|                                        
|                                        
|Receivables                              |                                            |        | 42.9   |              |  |              | 26.0  |              |  |              | 112.7 |         |  |   |       |        |   |   | 181.6 |        
|                                        
|                                        
|                                        
|                                        
|Inventories                              |                                            |        | 33.1   |              |  |              | 49.8  |              |  |              | 83.7  |         |  |   |       |        |   |   | 166.6 |        
|                                        
|                                        
|                                        
|                                        
|Prepaid expenses and other               |                                            |        | 1.6    |              |  |              | 2.9   |              |  |              | 19.9  |         |  |   | (1.6   | )      |   |   | 22.8  |        
|                                         |                                            |        |        |              |  |              |       |              |  |              |       |         |  |   |        |        |   |   |       |        
|                                         | Total current assets                       |        |        | 100.9        |  |              |       | 78.8         |  |              |       | 244.2   |  |   |        | (1.6   | ) |   |       | 422.3   | 
|                                        
|                                        
|                                        
|                                        
|Net property, plant and equipment        |                                            |        | 148.1  |              |  |              | 313.9 |              |  |              | 416.0 |         |  |   |       |        |   |   | 878.0 |        
|                                        
|                                        
|                                        
|                                        
|Goodwill and other assets                |                                            |        | 799.1  |              |  |              | 309.2 |              |  |              | 363.4 |         |  |   | (661.1 | )      |   |   | 810.6 |        
|                                         |                                            |        |        |              |  |              |       |              |  |              |       |         |  |   |        |        |   |   |       |        
|                                         | Total assets                               |        | $      | 1,048.1      |  |              | $     | 701.9        |  |              | $     | 1,023.6 |  |   | $      | (662.7 | ) |   | $     | 2,110.9 | 
|                                         |                                            |        |        |              |  |              |       |              |  |              |       |         |  |   |        |        |   |   |       |        
|Bank borrowings                          |                                            | $      | 2.6    |              |  | $            |      |              |  | $            | 42.2  |         |  | $ |       |        |   | $ | 44.8  |        
|                                        
|                                        
|                                        
|                                        
|Current portion of long-term debt        |                                            |        | 0.2    |              |  |              |      |              |  |              | 12.1  |         |  |   |       |        |   |   | 12.3  |        
|                                        
|                                        
|                                        
|                                        
|Accounts payable and accrued liabilities |                                            |        | 87.5   |              |  |              | 159.1 |              |  |              | 211.2 |         |  |   | (1.1   | )      |   |   | 456.7 |        
|                                         |                                            |        |        |              |  |              |       |              |  |              |       |         |  |   |        |        |   |   |       |        
|                                         | Total current liabilities                  |        |        | 90.3         |  |              |       | 159.1        |  |              |       | 265.5   |  |   |        | (1.1   | ) |   |       | 513.8   | 
|                                        
|                                        
|                                        
|                                        
|Long-term debt, net of current portion   |                                            |        | 900.8  |              |  |              |      |              |  |              | 75.3  |         |  |   |       |        |   |   | 976.1 |        
|                                        
|                                        
|                                        
|                                        
|Deferred income taxes                    |                                            |        | (5.1   | )            |  |              | 13.0  |              |  |              | 50.5  |         |  |   |       |        |   |   | 58.4  |        
|                                        
|                                        
|                                        
|                                        
|Pension and other long-term liabilities  |                                            |        | 83.1   |              |  |              | 79.4  |              |  |              | 169.1 |         |  |   | (2.5   | )      |   |   | 329.1 |        
|                                        
|                                        
|                                        
|                                        
|Minority interest                        |                                            |        |       |              |  |              | 0.4   |              |  |              | 12.2  |         |  |   |       |        |   |   | 12.6  |        
|                                        
|                                        
|                                        
|                                        
|Parent loans                             |                                            |        | (191.5 | )            |  |              | 228.7 |              |  |              | (33.9 | )       |  |   | (3.3   | )      |   |   |      |        
|                                         |                                            |        |        |              |  |              |       |              |  |              |       |         |  |   |        |        |   |   |       |        
|                                         | Total liabilities                          |        |        | 877.6        |  |              |       | 480.6        |  |              |       | 538.7   |  |   |        | (6.9   | ) |   |       | 1,890.0 | 
|                                        
|                                        
|                                        
|                                        
|Common stock                             |                                            |        | 0.3    |              |  |              |      |              |  |              |      |         |  |   |       |        |   |   | 0.3   |        
|                                        
|                                        
|                                        
|                                        
|Additional paid-in capital               |                                            |        | 251.7  |              |  |              | 108.7 |              |  |              | 293.4 |         |  |   | (417.0 | )      |   |   | 236.8 |        
|                                        
|                                        
|                                        
|                                        
|Retained earnings (accumulated deficit)  |                                            |        | (59.4  | )            |  |              | 112.6 |              |  |              | 178.5 |         |  |   | (238.8 | )      |   |   | (7.1  | )      
|                                        
|                                        
|                                        
|                                        
|Accumulated other comprehensive income.  |                                            |        | (22.1  | )            |  |              |      |              |  |              | 13.0  |         |  |   |       |        |   |   | (9.1  | )      
|                                         |                                            |        |        |              |  |              |       |              |  |              |       |         |  |   |        |        |   |   |       |        
|                                         | Total stockholders equity                 |        |        | 170.5        |  |              |       | 221.3        |  |              |       | 484.9   |  |   |        | (655.8 | ) |   |       | 220.9   | 
|                                        
|                                        
|                                        
|                                        
|                                         | Total liabilities and stockholders equity |        | $      | 1,048.1      |  |              | $     | 701.9        |  |              | $     | 1,023.6 |  |   | $      | (662.7 | ) |   | $     | 2,110.9 | 
|                                         |                                            |        |        |              |  |              |       |              |  |              |       |         |  |   |        |        |   |   |       |        

13



---



##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)

Three and Nine Months Ended October 31, 1999 and 1998


(Unaudited)


(Millions of Dollars Unless Otherwise Stated)


(11)  Guarantor and Nonguarantor Financial
Statements  Continued

Condensed Consolidating Statement of Cash Flows

For the nine months ended October 31, 1999


|                                                      |                                                      |                                       |       |              |       |              |       |              |   |              |        |       |      |   |   |   |   |   |      |        |       | 
|----------------------------------------------------- | ---------------------------------------------------- | ------------------------------------- | ----- | ------------ | ----- | ------------ | ----- | ------------ | - | ------------ | ------ | ----- | ---- | - | - | - | - | - | ---- | ------ | ----- | 
|                                                      |                                                      |                                       |       | Guarantor    |       | Nonguarantor |       |              |   | Consolidated
|                                                      |                                                      | Parent                                |       | Subsidiaries |       | Subsidiaries |       | Eliminations |   | Total       
|                                                      |                                                      |                                       |       |              |       |              |       |              |   |             
|Cash flows provided by (used in) operating activities |                                                      | $                                     | (80.2 | )            |       | $            | (29.1 | )            |   | $            | 144.4  |       |      | $ |  |   |   | $ | 35.1 |       
|                                                     
|                                                     
|                                                     
|                                                     
|Cash flows from investing activities:                 |                                                      |                                       |       |              |       |              |       |              |   |              |        |       |      |   |   |   |   |   |      |       
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Acquisition of property, plant and equipment         |                                       |       | (24.1        | )     |              |       | (36.8        | ) |              |        | (75.2 | )    |   |   |  |   |   |      | (136.1 | )    
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Acquisition of tooling                               |                                       |       | (9.2         | )     |              |       |             |   |              |        |      |      |   |   |  |   |   |      | (9.2   | )    
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Purchase of businesses, net of cash                  |                                       |       | (615.0       | )     |              |       | (0.5         | ) |              |        | (14.6 | )    |   |   |  |   |   |      | (630.1 | )    
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Proceeds from disposal of assets/business            |                                       |       |             |       |              |       | 2.6          |   |              |        | 37.4  |      |   |   |  |   |   |      | 40.0   |      
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Other, net                                           |                                       |       | 21.3         |       |              |       | (9.8         | ) |              |        | (23.6 | )    |   |   |  |   |   |      | (12.1  | )    
|                                                      |                                                      |                                       |       |              |       |              |       |              |   |              |        |       |      |   |   |   |   |   |      |       
|                                                      | Cash used in investing activities                    |                                       |       | (627.0       | )     |              |       | (44.5        | ) |              |        | (76.0 | )    |   |   |  |   |   |      | (747.5 | )    
|                                                     
|                                                     
|                                                     
|                                                     
|Cash flows from financing activities:                 |                                                      |                                       |       |              |       |              |       |              |   |              |        |       |      |   |   |   |   |   |      |       
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Net change in bank borrowings and revolver           |                                       |       | 570.1        |       |              |       |             |   |              |        | 60.2  |      |   |   |  |   |   |      | 630.3  |      
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Fees paid to issue long term debt                    |                                       |       | (15.2        | )     |              |       |             |   |              |        |      |      |   |   |  |   |   |      | (15.2  | )    
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Stock options exercised                              |                                       |       | 0.2          |       |              |       |             |   |              |        |      |      |   |   |  |   |   |      | 0.2    |      
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Net proceeds from accounts receivable securitization |                                       |       | 99.4         |       |              |       |             |   |              |        |      |      |   |   |  |   |   |      | 99.4   |      
|                                                      |                                                      |                                       |       |              |       |              |       |              |   |              |        |       |      |   |   |   |   |   |      |       
|                                                      |                                                      | Cash provided by financing activities |       |              | 654.5 |              |       |              |  |              |        |       | 60.2 |   |   |   |  |   |      |        | 714.7 | 
|                                                     
|                                                     
|                                                     
|                                                     
|Increase (decrease) in parent loans and advances      |                                                      |                                       | 56.1  |              |       |              | 73.6  |              |   |              | (129.7 | )     |      |   |  |   |   |   |     |       
|                                                     
|                                                     
|                                                     
|                                                     
|Effect of exchange rates of cash and cash equivalents |                                                      |                                       |      |              |       |              |      |              |   |              | (3.0   | )     |      |   |  |   |   |   | (3.0 | )     
|                                                      |                                                      |                                       |       |              |       |              |       |              |   |              |        |       |      |   |   |   |   |   |      |       
|                                                      | Net increase (decrease) in cash and cash equivalents |                                       |       | 3.4          |       |              |       |             |   |              |        | (4.1  | )    |   |   |  |   |   |      | (0.7   | )    
|                                                     
|                                                     
|                                                     
|                                                     
|Cash and cash equivalents at beginning of period      |                                                      |                                       | 23.3  |              |       |              | 0.1   |              |   |              | 27.9   |       |      |   |  |   |   |   | 51.3 |       
|                                                      |                                                      |                                       |       |              |       |              |       |              |   |              |        |       |      |   |   |   |   |   |      |       
|Cash and cash equivalents at end of period            |                                                      | $                                     | 26.7  |              |       | $            | 0.1   |              |   | $            | 23.8   |       |      | $ |  |   |   | $ | 50.6 |       
|                                                      |                                                      |                                       |       |              |       |              |       |              |   |              |        |       |      |   |   |   |   |   |      |       

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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)

Three and Nine Months Ended October 31, 1999 and 1998


(Unaudited)


(Millions of Dollars Unless Otherwise Stated)


(11)  Guarantor and Nonguarantor Financial
Statements  Continued

Condensed Consolidating Statement of Cash Flows

For the nine months ended October 31, 1998


|                                                      |                                                      |                                                 |       |              |       |              |      |              |       |              |      |        |      |   |   |   |   |   |      |        |       | 
|----------------------------------------------------- | ---------------------------------------------------- | ----------------------------------------------- | ----- | ------------ | ----- | ------------ | ---- | ------------ | ----- | ------------ | ---- | ------ | ---- | - | - | - | - | - | ---- | ------ | ----- | 
|                                                      |                                                      |                                                 |       | Guarantor    |       | Nonguarantor |      |              |       | Consolidated
|                                                      |                                                      | Parent                                          |       | Subsidiaries |       | Subsidiaries |      | Eliminations |       | Total       
|                                                      |                                                      |                                                 |       |              |       |              |      |              |       |             
|Cash flows provided by (used in) operating activities |                                                      | $                                               | (54.5 | )            |       | $            | 44.3 |              |       | $            | 76.3 |        |      | $ |  |   |   | $ | 66.1 |       
|                                                     
|                                                     
|                                                     
|                                                     
|Cash flows from investing activities:                 |                                                      |                                                 |       |              |       |              |      |              |       |              |      |        |      |   |   |   |   |   |      |       
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Acquisition of property, plant and equipment         |                                                 |       | (12.3        | )     |              |      | (31.9        | )     |              |      | (44.7  | )    |   |   |  |   |   |      | (88.9  | )    
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Acquisition of tooling                               |                                                 |       | (6.6         | )     |              |      |             |       |              |      |       |      |   |   |  |   |   |      | (6.6   | )    
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Purchase of businesses, net of cash received         |                                                 |       | (8.8         | )     |              |      |             |       |              |      | (70.5  | )    |   |   |  |   |   |      | (79.3  | )    
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Other, net                                           |                                                 |       | (35.5        | )     |              |      | 8.7          |       |              |      | 0.1    |      |   |   |  |   |   |      | (26.7  | )    
|                                                      |                                                      |                                                 |       |              |       |              |      |              |       |              |      |        |      |   |   |   |   |   |      |       
|                                                      | Cash provided by (used in) investing activities      |                                                 |       | (63.2        | )     |              |      | (23.2        | )     |              |      | (115.1 | )    |   |   |  |   |   |      | (201.5 | )    
|                                                     
|                                                     
|                                                     
|                                                     
|Cash flows from financing activities:                 |                                                      |                                                 |       |              |       |              |      |              |       |              |      |        |      |   |   |   |   |   |      |       
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Net change in bank borrowings and revolver           |                                                 |       | 4.7          |       |              |      | (34.5        | )     |              |      | 40.5   |      |   |   |  |   |   |      | 10.7   |      
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Stock options exercised                              |                                                 |       | 1.7          |       |              |      |             |       |              |      |       |      |   |   |  |   |   |      | 1.7    |      
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Fees paid to issue debt                              |                                                 |       | (1.4         | )     |              |      |             |       |              |      |       |      |   |   |  |   |   |      | (1.4   | )    
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Net proceeds from accounts receivable securitization |                                                 |       | 120.8        |       |              |      |             |       |              |      |       |      |   |   |  |   |   |      | 120.8  |      
|                                                      |                                                      |                                                 |       |              |       |              |      |              |       |              |      |        |      |   |   |   |   |   |      |       
|                                                      |                                                      | Cash provided by (used in) financing activities |       |              | 125.8 |              |      |              | (34.5 | )            |      |        | 40.5 |   |   |   |  |   |      |        | 131.8 | 
|                                                     
|                                                     
|                                                     
|                                                     
|Increase (decrease) in parent loans and advances      |                                                      |                                                 | (12.7 | )            |       |              | 13.1 |              |       |              | (0.4 | )      |      |   |  |   |   |   |     |       
|                                                     
|                                                     
|                                                     
|                                                     
|Effect of exchange rates of cash and cash equivalents |                                                      |                                                 |      |              |       |              |     |              |       |              | (1.7 | )      |      |   |  |   |   |   | (1.7 | )     
|                                                      |                                                      |                                                 |       |              |       |              |      |              |       |              |      |        |      |   |   |   |   |   |      |       
|                                                      | Net increase (decrease) in cash and cash equivalents |                                                 |       | (4.6         | )     |              |      | (0.3         | )     |              |      | (0.4   | )    |   |   |  |   |   |      | (5.3   | )    
|                                                     
|                                                     
|                                                     
|                                                     
|Cash and cash equivalents at beginning of period      |                                                      |                                                 | 4.6   |              |       |              | 0.1  |              |       |              | 18.4 |        |      |   |  |   |   |   | 23.1 |       
|                                                      |                                                      |                                                 |       |              |       |              |      |              |       |              |      |        |      |   |   |   |   |   |      |       
|Cash and cash equivalents at end of period            |                                                      | $                                               |      |              |       | $            | (0.2 | )            |       | $            | 18.0 |        |      | $ |  |   |   | $ | 17.8 |       
|                                                      |                                                      |                                                 |       |              |       |              |      |              |       |              |      |        |      |   |   |   |   |   |      |       

15



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##### Table of Contents



Item 2.

MANAGEMENTS DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Results of Operations

Three Months Ended October 31, 1999 Compared to Three
Months Ended October 31, 1998

The Companys net sales for the third quarter of fiscal 1999
 were $598.5 million, an increase of 34.8% as compared to
net sales of $443.9 million for the third quarter of fiscal
1998. This increase was due to the additional sales contributed
as a result of the CMI acquisition, which was effective
February 3, 1999, and higher sales in the North American
Automotive Wheel group. These sales increases were partially
offset by lower selling prices due to the pass through of lower
aluminum costs and the maxi-devaluation of the Brazilian economy.

The Companys gross profit for the third quarter of fiscal
1999 increased to $105.4 million or 17.6% of net sales as
compared to $82.7 million or 18.6% of net sales for the
third quarter of fiscal 1998. The Companys third quarter
gross profit was negatively impacted primarily by inefficiencies
and premium costs associated with the unexpectedly strong demand
for lightweight aluminum wheels in both North America and Europe,
 slower demand for steel wheels in Europe as a result of the
higher aluminum wheel penetration and the continuation of the
economic devaluation in developing markets.

Marketing, general and administrative expenses were
$21.8 million or 3.6% of net sales for the third quarter of
fiscal 1999 as compared to $16.7 million or 3.8% of net
sales for the same period of fiscal 1998. The increase in
expenses was attributable to additional costs incurred as a
result of the CMI acquisition. As a percent of sales, however,
marketing, general and administrative costs have improved as
synergies from this acquisition have been realized.

Engineering and product development costs were $4.4 million
or 0.7% of net sales for the third quarter of fiscal 1999 as
compared to $5.7 million or 1.3% of net sales for the third
quarter of fiscal 1998. Engineering and product development costs
 were lower, despite the CMI acquisition, due to synergies
realized and timing associated with recovery of engineering costs
 from our customers.

Amortization of intangibles increased by $3.6 million to
$8.2 million for the third quarter of fiscal 1999. This
increase is attributable to the increased goodwill recognized as
a result of the CMI acquisition.

Interest expense was $37.5 million for the third quarter of
fiscal 1999, an increase of $15.1 million over the same
period of fiscal 1998 of $22.4 million. This increase was due to
the increase in debt as a result of the CMI acquisition.

Nine Months Ended October 31, 1999 Compared to Nine
Months Ended October 31, 1998

The Companys net sales for the first nine months of fiscal
1999 were $1,730.8 million, an increase of 39.5% as compared
 to net sales of $1,240.8 million for the first nine months of
fiscal 1998. This increase was due to the additional sales
contributed as a result of the CMI acquisition, which was
effective February 3, 1999, the additional sales contributed
 by the acquisitions of Alumitech, Borlem, MIN-CER, N.F. Die and
Kalyani (the 1998 acquisitions), and higher sales in
the North American Automotive Wheel group. These sales increases
were partially offset by lower selling prices due to the pass
through of lower aluminum costs and the maxi-devaluation of the
Brazilian economy.

The Companys gross profit for the first nine months of
fiscal 1999 increased to $305.6 million or 17.7% of net
sales as compared to $216.7 million or 17.5% of net sales
for the first nine months of fiscal 1998. This increase in margin
 was attributable to the increased revenues and improved
productivity in the majority of the Companys businesses.

Marketing, general and administrative expenses were
$70.7 million or 4.1% of net sales for the first nine months
 of fiscal 1999 as compared to $48.7 million or 3.9% of net
sales for the same period of fiscal 1998. This

16



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##### Table of Contents





Engineering and product development costs were $15.6 million
 or 0.9% of net sales for the first nine months of fiscal 1999 as
 compared to $15.7 million or 1.3% of net sales for the
first nine months of fiscal 1998. Despite the increase in costs
attributable to the CMI and 1998 acquisitions, engineering and
product development costs as a percent of sales improved over the
 prior fiscal year.

Amortization of intangibles increased by $9.3 million to
$22.0 million for the first nine months of fiscal 1999. This
 increase is attributable to the increased goodwill recognized as
 a result of the CMI and 1998 acquisitions.

Other income was $5.3 million for the first nine months of
fiscal 1999, an increase of $1.4 million over the same
period of fiscal 1998. This increase was due primarily to gains
on the sales of a joint venture interest and other assets,
partially offset by currency losses and other redundancy costs
associated with productivity improvement programs in the Company.

Interest expense was $115.5 million for the first nine
months of fiscal 1999, an increase of $46.1 million over the
 same period of fiscal 1998 of $69.4 million. This increase was
due to the increase in debt as a result of the CMI and 1998
acquisitions.

The extraordinary loss for early extinguishment of debt in fiscal
 1998 represented the write-off of the remaining deferred
financing costs associated with the term debt incurred in
connection with both the Lemmerz Acquisition and the merger with
Motor Wheel. As a result of strong cash flow and significantly
improved credit position, the Company was able to restructure its
 senior credit facility and fully repay certain of the
outstanding term debt.

Financial Condition, Liquidity and Capital Resources

The Companys operations provided $35.1 million in cash
 in the first nine months of fiscal 1999, a decrease of
$31.0 million over the same period of fiscal 1998. This
decrease was due primarily to increased working capital
requirements as a result of the acquisition of CMI.

Capital expenditures for the first nine months of fiscal 1999
were $136.1 million. These expenditures were primarily for
additional machinery and equipment to improve productivity,
increase production capacity and to meet expected requirements
for our products. The Company anticipates capital expenditures
for fiscal 1999 will be approximately $190 million relating
primarily to new vehicle platforms, capacity increases worldwide
to meet the growing demand for our products, cost reduction
programs and the funding of new programs associated with the
acquisition of CMI.

On February 3, 1999, the Company entered into a third
amended and restated credit agreement (the Third Amended
and Restated Credit Agreement) with Canadian Imperial Bank
of Commerce (CIBC) and Merrill Lynch Capital
Corporation (Merrill Lynch), as managing agents.
Pursuant to the Third Amended and Restated Credit Agreement, a
syndicate of lenders agreed to lend to the Company up to
$450 million in the form of a senior secured term loan
facility and up to $650 million in the form of a senior
secured revolving credit facility. Such term loan and revolving
facilities are guaranteed by the Company and all of its existing
and future material domestic subsidiaries. Such term loan and
revolving facilities are secured by a first priority lien in
substantially all of the properties and assets of the Company and
 its material domestic subsidiaries, now owned or acquired later,
 including a pledge of all of the shares of certain of the
Companys existing and future domestic subsidiaries and 65%
of the shares of certain of our existing and future foreign
subsidiaries. As of October 31, 1999 there was
$450 million outstanding under the term loan facilities and
$489 million available under the revolving facility.

In April 1998, the Company entered into a three-year
agreement pursuant to which the Company and certain of its
subsidiaries sold, and will continue to sell on an ongoing basis,
 a portion of their accounts receivables to a special purpose
entity (Funding Co.), which is wholly owned by the
Company. Accordingly,

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##### Table of Contents





At October 31, 1999, management believes that the Company
was in compliance with the various covenants under the agreements
 pursuant to which it has or may borrow money. Management expects
 that the Company will remain in compliance with these covenants
in all material respects through the period ending
October 31, 2000.

Other Matters

Year 2000

The Company has developed plans to address its exposure in all
critical information technology (IT) and non-IT
systems to computer programs which identify years with two digits
 instead of four. Such programs may recognize the year 2000 as
the year 1900. The Company is also assessing the year 2000
capabilities of its critical suppliers, customers and key service
 providers to determine, to the extent possible, whether its
operations will be adversely impacted by these companies.

The Company primarily relies on packaged software applications
which are year 2000 compliant. The Company has substantially
completed the testing of these applications and has confirmed
their year 2000 compliance. The Company is also testing all
internally developed IT software for the year 2000 compliance.
This process was completed by the end of the second quarter of
fiscal 1999.

The Company continues to assess all critical non-IT systems for
year 2000 compliance. Non-IT systems include, among other things,
 manufacturing equipment, telephone systems and heating and
cooling systems. An inventory of all critical non-IT systems and
manufacturers to determine year 2000 compliance has been
prepared. This process was completed during the first quarter of
fiscal 1999.

As of October 31, 1999, the costs incurred directly related
to becoming year 2000 compliant were approximately
$5.4 million with minimal additional costs expected to be
incurred subsequent to October 31, 1999. The year 2000
remediation effort has not postponed any IT projects, the delay
of which would have a material adverse effect on the business,
financial condition or results of operations.

The Company is year 2000 compliant at this time with all critical
 business and production processes ready. Although the Company is
 striving to be completely year 2000 compliant, year 2000 issues
may still negatively affect the Company. Based on progress to
date, management believes that such impact, if any, will not have
 a material adverse impact on the business, financial condition
or results of operations. The Company cannot guarantee that this
will be so.

Although the Company has contacted critical suppliers, customers
and key service providers to determine their level of year 2000
compliance, a lack of year 2000 readiness at these companies
could adversely impact the Companys operations. The Company
 has developed a program for monitoring year 2000 risk in its
supply chain and have mailed Supplier Year 2000
Self-Assessment questionnaires to all critical suppliers
and key service providers. The full extent of any such adverse
impact (if any) is impossible to determine. The Company is
attempting to mitigate any possible adverse impact by identifying
 alternate suppliers where possible. The Company may also
increase inventory of crucial materials in anticipation of
possible disruptions.

The Company has developed contingency plans for all critical
business and production processes which the Company believes will
 help to minimize its year 2000 risk.

18



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##### Table of Contents



Item 3.

Quantitative and Qualitative Disclosures about Market Risk

For the period ended October 31, 1999, the Company did not
experience any material change in market risk exposures affecting
 the quantitative and qualitative disclosures as presented in the
 Companys Annual Report on Form 10-K for the year
ended January 31, 1999.

19



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##### Table of Contents








PART II.  OTHER INFORMATION


Item 1.  Legal Proceedings

Item 2.  Changes in Securities

Item 3.  Defaults upon Senior Securities

Item 4.  Submission of Matters to a Vote of
Security-Holders

Item 5.  Other Information

Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibits

|               |    |             |  |                        
|-------------- | -- | ----------- |  | -----------------------
|Exhibit Number |    | Description
|               |    |            
|               | 27 |             |  | Financial Data Schedule

(b)  Reports on Form 8-K

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##### Table of Contents








SIGNATURES


Pursuant to the requirements 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.



| |                                  
| | ---------------------------------
| | HAYES LEMMERZ INTERNATIONAL, INC.



| |     |                   
| | --- | ------------------
| | By: | /s/ D. N. VERMILYA

| |                                                  
| | -------------------------------------------------
| |                                                  
| | D. N. Vermilya                                   
| | Corporate Controller and Chief Accounting Officer

December 15, 1999

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##### Table of Contents








EXHIBIT INDEX


|        |    |             |  |                         |  |  |  | 
|------- | -- | ----------- |  | ----------------------- |  |  |  | 
|        |    |             |  | Sequentially           
|Exhibit |    |             |  | Numbered               
|Number  |    | Description |  | Page                   
|        |    |             |  |                        
|        | 27 |             |  | Financial Data Schedule |  |  |  | 

22