##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended October 31, 2008
 or
 o
    
    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: 000-50303
 Hayes Lemmerz International, Inc.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    32-0072578(State or other jurisdiction of
    
    (IRS Employerincorporation or organization)
    
    Identification No.)15300 Centennial Drive
    
    48168Northville, Michigan
    
    (Zip Code)(Address of principal executive offices)
 Registrants telephone number, including area code:
(734) 737-5000
 þ o
  Large accelerated filer
o
    
    Accelerated filer
þ
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ
 
 þ o




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##### 



HAYES LEMMERZ INTERNATIONAL, INC.
 QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
 PagePART I. FINANCIAL INFORMATIONItem 1.
    
    Financial Statements
    
    
    3Consolidated Statements of Operations
    
    
    3Condensed Consolidated Balance Sheets
    
    
    4Consolidated Statements of Cash Flows
    
    
    5Consolidated Statements of Changes in Stockholders Equity
    
    
    6Notes to Consolidated Financial Statements
    
    
    7Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    26Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    36Item 4.
    
    Controls and Procedures
    
    
    37PART II. OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    37Item 1A.
    
    Risk Factors
    
    
    37Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    37Item 3.
    
    Defaults upon Senior Securities
    
    
    37Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    37Item 5.
    
    Other Information
    
    
    38Item 6.
    
    Exhibits
    
    
    38Signature
    
    
    
    
    38EX-31.1EX-31.2EX-32.1EX-32.2
  Unless otherwise indicated, references to we, us, or our mean Hayes Lemmerz International,
Inc., a Delaware corporation, and its subsidiaries. References to fiscal year means the 12-month
period commencing on February
1 st of that year and ending January 31 st of the
following year (e.g., fiscal 2008 means the period beginning February 1, 2008 and ending
January 31, 2009). This report contains forward looking statements with respect to our financial
condition, results of operations, and business. All statements other than statements of historical
fact made in this Quarterly Report on Form 10-Q are forward-looking. Such forward-looking
statements include, among others, those statements including the words expect, anticipate,
intend, believe, and similar language. These forward looking statements involve certain risks
and uncertainties. Our actual results may differ significantly from those projected in the
forward-looking statements. Factors that may cause actual results to differ materially from those
contemplated by such forward looking statements include, among others: (1) competitive pressure in
our industry; (2) fluctuations in the price of steel, aluminum, and other raw material and our
ability to maintain credit terms with our suppliers; (3) changes in general economic conditions;
(4) our dependence on the automotive industry (which has historically been cyclical) and on a small
number of major customers for the majority of our sales; (5) pricing pressure from automotive
industry customers and the potential for re-sourcing of business to lower-cost providers;
(6) changes in the financial markets or our debt ratings affecting our financial structure and our
cost of capital and borrowed money; (7) the uncertainties inherent in international operations and
foreign currency fluctuations;(8) our ability to obtain an amendment to the financial covenants in
our senior secured credit facilities; and (9) the risks described in our Annual Report on Form 10-K
for the fiscal year ended January 31, 2008. You are cautioned not to place undue reliance on the
forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q.
We have no duty to update the forward looking statements in this Quarterly Report on Form 10-Q and
we do not intend to provide such updates
 2




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##### Table of Contents



. Item 1. Financial Statements
 HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 Three Months Ended October 31,
    
    
    Nine Months Ended October 31,2008
    
    
    2007
    
    
    2008
    
    
    2007(Dollars in millions, except per share amounts)Net sales
    
    $
    497.0
    
    
    $
    554.9
    
    
    $
    1,634.3
    
    
    $
    1,597.6Cost of goods sold
    
    
    440.4
    
    
    
    496.8
    
    
    
    1,442.1
    
    
    
    1,430.2Gross profit
    
    
    56.6
    
    
    
    58.1
    
    
    
    192.2
    
    
    
    167.4Marketing, general, and administrative
    
    
    34.1
    
    
    
    35.8
    
    
    
    112.8
    
    
    
    116.6Amortization of intangibles
    
    
    2.6
    
    
    
    2.5
    
    
    
    8.3
    
    
    
    7.5Asset impairments and other restructuring charges
    
    
    2.7
    
    
    
    50.0
    
    
    
    11.8
    
    
    
    54.0Other (income) expense, net
    
    
    (3.4
    )
    
    
    (2.6
    )
    
    
    27.3
    
    
    
    4.9Earnings (loss) from operations
    
    
    20.6
    
    
    
    (27.6
    )
    
    
    32.0
    
    
    
    (15.6
    )Interest expense, net
    
    
    12.2
    
    
    
    13.9
    
    
    
    39.8
    
    
    
    47.8Loss on early extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21.5Other non-operating expense (income)
    
    
    0.1
    
    
    
    (1.4
    )
    
    
    2.8
    
    
    
    (1.4
    )Earnings (loss) from continuing operations before taxes
and minority interest
    
    
    8.3
    
    
    
    (40.1
    )
    
    
    (10.6
    )
    
    
    (83.5
    )Income tax expense
    
    
    12.5
    
    
    
    16.7
    
    
    
    40.1
    
    
    
    38.5Loss from continuing operations before minority interest
    
    
    (4.2
    )
    
    
    (56.8
    )
    
    
    (50.7
    )
    
    
    (122.0
    )Minority interest
    
    
    3.9
    
    
    
    5.9
    
    
    
    17.2
    
    
    
    15.4Loss from continuing operations
    
    
    (8.1
    )
    
    
    (62.7
    )
    
    
    (67.9
    )
    
    
    (137.4
    )Discontinued operations:Income (loss) from operations, net of tax of
$0.0, $0.2, $0.0, $0.5, respectively
    
    
    0.1
    
    
    
    (1.1
    )
    
    
    0.1
    
    
    
    2.3(Loss) gain on sale of business, net of tax of $0.0 for
all periods
    
    
    (2.4
    )
    
    
    1.1
    
    
    
    (2.4
    )
    
    
    (30.0
    )Loss from discontinued operations
    
    
    (2.3
    )
    
    
    
    
    
    
    (2.3
    )
    
    
    (27.7
    )Net loss
    
    $
    (10.4
    )
    
    $
    (62.7
    )
    
    $
    (70.2
    )
    
    $
    (165.1
    )Loss per common share dataBasic and diluted:Loss from continuing operations
    
    $
    (0.08
    )
    
    $
    (0.62
    )
    
    $
    (0.67
    )
    
    $
    (1.87
    )Loss from discontinued operations
    
    
    (0.02
    )
    
    
    
    
    
    
    (0.02
    )
    
    
    (0.38
    )Net loss
    
    $
    (0.10
    )
    
    $
    (0.62
    )
    
    $
    (0.69
    )
    
    $
    (2.25
    )Weighted average shares outstanding (in thousands)
    
    
    101,417
    
    
    
    100,382
    
    
    
    101,198
    
    
    
    73,414
  3




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HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 October 31,
    
    
    January 31,2008
    
    
    2008(Dollars in millions)(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    57.1
    
    
    $
    160.2Receivables, net of allowance of $1.1 and $1.5 at October 31, 2008
and January 31, 2008, respectively
    
    
    225.0
    
    
    
    305.6Other receivables
    
    
    39.4
    
    
    
    48.3Inventories
    
    
    194.6
    
    
    
    179.1Assets held for sale
    
    
    31.2
    
    
    
    21.4Deferred tax assets
    
    
    4.3
    
    
    
    5.0Prepaid expenses
    
    
    4.8
    
    
    
    7.2Total current assets
    
    
    556.4
    
    
    
    726.8Property, plant, and equipment, net of accumulated depreciation of $406.7 and
$385.0 as of October 31, 2008 and January 31, 2008, respectively
    
    
    535.1
    
    
    
    616.8Goodwill
    
    
    212.4
    
    
    
    240.5Customer relationships, net of amortization of
$20.4 and $19.7 at October 31, 2008
and January 31, 2008, respectively
    
    
    89.8
    
    
    
    103.7Other intangible assets, net of amortization of $40.3 and $40.2 at October 31, 2008
and January 31, 2008, respectively
    
    
    53.4
    
    
    
    65.0Deferred tax assets
    
    
    1.6
    
    
    
    4.2Other assets
    
    
    41.2
    
    
    
    48.9Total assets
    
    $
    1,489.9
    
    
    $
    1,805.9LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Bank borrowings and other notes
    
    $
    46.4
    
    
    $
    32.9Current portion of long-term debt
    
    
    4.2
    
    
    
    4.8Accounts payable
    
    
    263.4
    
    
    
    372.0Accrued payroll and employee benefits
    
    
    64.3
    
    
    
    76.4Liabilities held for sale
    
    
    8.3
    
    
    
    8.2Other accrued liabilities
    
    
    62.9
    
    
    
    61.6Total current liabilities
    
    
    449.5
    
    
    
    555.9Long-term debt, net of current portion
    
    
    519.1
    
    
    
    572.2Deferred tax liabilities
    
    
    66.2
    
    
    
    76.1Pension and other long-term liabilities
    
    
    290.0
    
    
    
    328.9Minority interest
    
    
    66.7
    
    
    
    70.5Commitments and contingenciesStockholders equity:Preferred stock, 1,000,000 shares authorized, none issued or outstanding at
October 31, 2008 or January 31, 2008
    
    
    
    
    
    
    Common stock, par value $0.01 per share:200,000,000 shares authorized; 101,743,162 and 101,057,966
issued and outstanding at October 31, 2008 and January 31, 2008, respectively
    
    
    1.0
    
    
    
    1.0Additional paid in capital
    
    
    885.8
    
    
    
    882.0Accumulated deficit
    
    
    (1,000.5
    )
    
    
    (928.7
    )Accumulated other comprehensive income
    
    
    212.1
    
    
    
    248.0Total stockholders equity
    
    
    98.4
    
    
    
    202.3Total liabilities and stockholders equity
    
    $
    1,489.9
    
    
    $
    1,805.9
  4




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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 Nine Months Ended October 31,2008
    
    
    2007(Dollars in millions)Cash flows from operating activities:Net loss
    
    $
    (70.2
    )
    
    $
    (165.1
    )Adjustments to reconcile net loss from operations to net cash provided by
(used for) operating activities:Net loss from discontinued operations
    
    
    2.3
    
    
    
    27.7Depreciation and amortization
    
    
    81.8
    
    
    
    82.8Amortization of deferred financing fees and accretion of discount
    
    
    1.7
    
    
    
    2.8Asset impairments
    
    
    7.8
    
    
    
    50.3Deferred income taxes
    
    
    1.4
    
    
    
    22.5Minority interest
    
    
    17.2
    
    
    
    15.4Equity compensation expense
    
    
    3.6
    
    
    
    8.8Loss on sale of assets and businesses
    
    
    35.5
    
    
    
    12.8Loss on early extinguishment of debt
    
    
    
    
    
    
    21.5Changes in operating assets and liabilities that increase (decrease) cash flows:Receivables
    
    
    43.4
    
    
    
    (69.0
    )Other receivables
    
    
    8.9
    
    
    
    (30.6
    )Inventories
    
    
    (38.0
    )
    
    
    (28.4
    )Prepaid expenses and other
    
    
    (14.8
    )
    
    
    5.8Accounts payable and accrued liabilities
    
    
    (101.7
    )
    
    
    80.1Cash (used for) provided by operating activities
    
    
    (21.1
    )
    
    
    37.4Cash flows from investing activities:Purchase of property, plant, equipment, and tooling
    
    
    (67.1
    )
    
    
    (64.1
    )Sale of assets
    
    
    (23.4
    )
    
    
    1.5Cash used for investing activities
    
    
    (90.5
    )
    
    
    (62.6
    )Cash flows from financing activities:Changes in bank borrowings and credit facilities
    
    
    20.8
    
    
    
    0.9Bank finance fees paid
    
    
    
    
    
    
    (14.8
    )Proceeds from revolving credit facility
    
    
    16.0
    
    
    
    Repayment of long-term debt
    
    
    (2.6
    )
    
    
    (136.3
    )Dividends paid to minority shareholders
    
    
    (12.9
    )
    
    
    (10.1
    )Proceeds from issuance of common stock
    
    
    
    
    
    
    193.1Call premium on redemption of Senior Notes
    
    
    
    
    
    
    (9.0
    )Fees paid for Rights Offering
    
    
    
    
    
    
    (7.7
    )Cash provided by financing activities
    
    
    21.3
    
    
    
    16.1Cash flows of discontinued operations:Net cash provided by operating activities
    
    
    1.3
    
    
    
    12.7Net cash (used for) provided by investing activities
    
    
    (2.4
    )
    
    
    42.5Net cash used for financing activities
    
    
    
    
    
    
    (10.1
    )Net cash (used for) provided by discontinued operations
    
    
    (1.1
    )
    
    
    45.1Effect of exchange rate changes on cash and cash equivalents
    
    
    (11.7
    )
    
    
    4.1(Decrease) increase in cash and cash equivalents
    
    
    (103.1
    )
    
    
    40.1Cash and cash equivalents at beginning of period
    
    
    160.2
    
    
    
    38.5Cash and cash equivalents at end of period
    
    $
    57.1
    
    
    $
    78.6Supplemental data:Cash paid for interest
    
    $
    36.7
    
    
    $
    42.6Cash paid for income taxes
    
    $
    39.8
    
    
    $
    17.2
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HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
(Unaudited)
 Additional
    
    
    
    
    
    
    Accumulated OtherPaid in
    
    
    Accumulated
    
    
    ComprehensiveShares
    
    
    Par Value
    
    
    Capital
    
    
    Deficit
    
    
    Income
    
    
    Total(Dollars in millions, except share amounts)Balance at January 31, 2008
    
    
    101,057,966
    
    
    $
    1.0
    
    
    $
    882.0
    
    
    $
    (928.7
    )
    
    $
    248.0
    
    
    $
    202.3Preferred stock dividends accrued
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.4
    )
    
    
    
    
    
    
    (0.4
    )Comprehensive income:Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (70.2
    )
    
    
    
    
    
    
    (70.2
    )Currency translation adjustment, net of tax $1.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (36.0
    )
    
    
    (36.0
    )Unrealized loss on derivatives
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.7
    
    
    
    0.7Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (105.5
    )Shares of redeemable preferred stock of
subsidiary converted into common stock
    
    
    14,152
    
    
    
    
    
    
    
    0.2
    
    
    
    
    
    
    
    
    
    
    
    0.2Shares issued for vested RSUs
    
    
    671,044
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Pension measurement date adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1.2
    )
    
    
    (0.6
    )
    
    
    (1.8
    )Equity compensation expense
    
    
    
    
    
    
    
    
    
    
    3.6
    
    
    
    
    
    
    
    
    
    
    
    3.6Balance at October 31, 2008
    
    
    101,743,162
    
    
    $
    1.0
    
    
    $
    885.8
    
    
    $
    (1,000.5
    )
    
    $
    212.1
    
    
    $
    98.4Balance at January 31, 2007
    
    
    38,470,434
    
    
    $
    0.4
    
    
    $
    678.6
    
    
    $
    (733.6
    )
    
    $
    156.4
    
    
    $
    101.8Preferred stock dividends accrued
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.5
    )
    
    
    
    
    
    
    (0.5
    )Comprehensive income:Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (165.1
    )
    
    
    
    
    
    
    (165.1
    )Currency translation adjustment, net of tax $0.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54.2
    
    
    
    54.2Unrealized gain on derivatives
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2.2
    )
    
    
    (2.2
    )Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (113.1
    )Shares of redeemable preferred stock of
subsidiary converted into common stock
    
    
    89,932
    
    
    
    
    
    
    
    2.1
    
    
    
    
    
    
    
    
    
    
    
    2.1Shares issued for vested RSUs
    
    
    1,782,811
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Common stock issued to note holders
    
    
    1,049,020
    
    
    
    
    
    
    
    5.3
    
    
    
    
    
    
    
    
    
    
    
    5.3Common stock issued, net of fees
    
    
    59,423,077
    
    
    
    0.6
    
    
    
    184.8
    
    
    
    
    
    
    
    
    
    
    
    185.4Equity compensation expense
    
    
    
    
    
    
    
    
    
    
    8.9
    
    
    
    
    
    
    
    
    
    
    
    8.9Balance at October 31, 2007
    
    
    100,815,274
    
    
    $
    1.0
    
    
    $
    879.7
    
    
    $
    (899.2
    )
    
    $
    208.4
    
    
    $
    189.9
  6




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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, 2008 and 2007
 (Unaudited)
 (Dollars in millions, unless otherwise stated)
 Note 1. Description of Business
  Description of Business
   Note 2. Basis of Presentation
   Note 3. Stock-Based Compensation
    7




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##### Table of Contents



Note 4. Inventories
  October 31,
    
    
    January 31,2008
    
    
    2008Raw materials
    
    $
    50.6
    
    
    $
    41.4Work-in-process
    
    
    36.7
    
    
    
    41.8Finished goods
    
    
    77.4
    
    
    
    62.4Spare parts and supplies
    
    
    29.9
    
    
    
    33.5Total
    
    $
    194.6
    
    
    $
    179.1
 Note 5. Assets Held for Sale
  October 31,
    
    
    January 31,2008
    
    
    2008Nuevo Laredo, Mexico facility
    
    $
    28.0
    
    
    $
    16.0Huntington, Indiana facility
    
    
    1.7
    
    
    
    2.7Howell, Michigan facility
    
    
    1.5
    
    
    
    2.7Total
    
    $
    31.2
    
    
    $
    21.4
   October 31,
    
    
    January 31,2008
    
    
    2008Receivables
    
    $
    19.5
    
    
    $
    11.3Inventories
    
    
    6.5
    
    
    
    4.1Prepaid expenses
    
    
    0.2
    
    
    
    0.1Property, plant, and equipment, net
    
    
    1.8
    
    
    
    0.5Total assets held for sale
    
    $
    28.0
    
    
    $
    16.0Accounts payable and accrued liabilities
    
    $
    8.3
    
    
    $
    8.0Total liabilities held for sale
    
    $
    8.3
    
    
    $
    8.0
  8




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##### Table of Contents



Note 6. Discontinued Operations
   Three Months Ended October 31,
    
    
    Nine Months Ended October 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Net sales
    
    $
    
    
    
    $
    24.9
    
    
    $
    
    
    
    $
    81.8Earnings (Loss) before income tax expense
    
    $
    
    
    
    $
    (0.6
    )
    
    $
    
    
    
    $
    4.5Income tax expense
    
    
    
    
    
    
    0.2
    
    
    
    
    
    
    
    1.2Net income (loss)
    
    $
    
    
    
    $
    (0.8
    )
    
    $
    
    
    
    $
    3.3
   Three Months Ended October 31,
    
    
    Nine Months Ended October 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Net sales
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    55.5Loss before income tax expense
    
    $
    (2.4
    )
    
    $
    
    
    
    $
    (2.4
    )
    
    $
    (27.4
    )Income tax benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.7
    )Net loss
    
    $
    (2.4
    )
    
    $
    
    
    
    $
    (2.4
    )
    
    $
    (26.7
    )
  9




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##### Table of Contents



Three Months Ended October 31,
    
    
    Nine Months Ended October 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Net sales
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    6.8Earning (loss) before income tax expense
    
    $
    0.1
    
    
    $
    0.8
    
    
    $
    0.1
    
    
    $
    (4.3
    )Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    $
    0.1
    
    
    $
    0.8
    
    
    $
    0.1
    
    
    $
    (4.3
    )
  Note 7. Bank Borrowings, Other Notes, and Long-Term Debt
   October 31,
    
    
    January 31,2008
    
    
    2008Various foreign bank and government loans, weighted average interest rates of
4.8% and 4.0% at October 31, 2008 and January 31, 2008, respectively
    
    $
    2.4
    
    
    $
    3.3Term Loan maturing 2014, weighted average interest rate of 7.3% and 7.4%
at October 31, 2008 and January 31, 2008, respectively
    
    
    335.2
    
    
    
    381.58.25% New Senior Notes due 2015
    
    
    169.7
    
    
    
    192.2Revolving Credit Facility, weighted average interest rate of 6.0%
at October 31, 2008
    
    
    16.0
    
    
    
    523.3
    
    
    
    577.0Less current portion of long-term debt
    
    
    (4.2
    )
    
    
    (4.8
    )Total long-term debt
    
    $
    519.1
    
    
    $
    572.2
 Euro Denominated Debt
  Rights Offering
  10




---



##### Table of Contents



1 2
 Old Notes
 1 2
   Tender Offer for Senior Notes
  New Senior Notes
  11




---



##### Table of Contents



Credit Facility
       12




---



##### Table of Contents



Covenant Compliance
  Note 8. Pension Plans and Postretirement Benefits Other Than Pensions
   Pension Benefits - US
    
    
    Other Benefits - US
    
    
    Pension Benefits - InternationalThree Months Ended October 31,2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Service cost
    
    $
    0.2
    
    
    $
    0.3
    
    
    $
    
    
    
    $
    
    
    
    $
    0.1
    
    
    $
    0.3Interest cost
    
    
    2.5
    
    
    
    2.6
    
    
    
    2.4
    
    
    
    2.5
    
    
    
    1.8
    
    
    
    1.6Expected return on plan assets
    
    
    (3.3
    )
    
    
    (3.0
    )
    
    
    
    
    
    
    
    
    
    
    (0.2
    )
    
    
    (0.2
    )Amortization of net loss
    
    
    (0.1
    )
    
    
    
    
    
    
    (0.4
    )
    
    
    (0.1
    )
    
    
    
    
    
    
    Net periodic benefit cost
    
    $
    (0.7
    )
    
    $
    (0.1
    )
    
    $
    2.0
    
    
    $
    2.4
    
    
    $
    1.7
    
    
    $
    1.7
 Pension Benefits - US
    
    
    Other Benefits - US
    
    
    Pension Benefits - InternationalNine Months Ended October 31,2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Service cost
    
    $
    0.8
    
    
    $
    0.8
    
    
    $
    
    
    
    $
    
    
    
    $
    0.5
    
    
    $
    0.6Interest cost
    
    
    7.7
    
    
    
    7.8
    
    
    
    7.0
    
    
    
    7.2
    
    
    
    5.6
    
    
    
    4.9Expected return on plan assets
    
    
    (9.9
    )
    
    
    (9.0
    )
    
    
    
    
    
    
    
    
    
    
    (0.8
    )
    
    
    (0.6
    )Amortization of net loss
    
    
    (0.7
    )
    
    
    
    
    
    
    (1.1
    )
    
    
    (0.3
    )
    
    
    
    
    
    
    Net periodic benefit cost
    
    $
    (2.1
    )
    
    $
    (0.4
    )
    
    $
    5.9
    
    
    $
    6.9
    
    
    $
    5.3
    
    
    $
    4.9
  13




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##### Table of Contents



Note 9. Asset Impairments and Other Restructuring Charges
  Three Months Ended October 31, 2008AutomotiveWheels
    
    
    Other
    
    
    TotalFacility closure costs
    
    $
    1.1
    
    
    $
    0.1
    
    
    $
    1.2Impairment of facility, machinery, and equipment
    
    
    0.6
    
    
    
    
    
    
    
    0.6Severance and other restructuring costs
    
    
    0.9
    
    
    
    
    
    
    
    0.9Total
    
    $
    2.6
    
    
    $
    0.1
    
    
    $
    2.7
 Three Months Ended October 31, 2007AutomotiveWheels
    
    
    Other
    
    
    TotalFacility closure costs
    
    $
    0.1
    
    
    $
    
    
    
    $
    0.1Impairment of facility, machinery, and equipment
    
    
    48.9
    
    
    
    0.9
    
    
    
    49.8Severance and other restructuring costs
    
    
    
    
    
    
    0.1
    
    
    
    0.1Total
    
    $
    49.0
    
    
    $
    1.0
    
    
    $
    50.0
 Nine Months Ended October 31, 2008AutomotiveWheels
    
    
    Other
    
    
    TotalFacility closure costs
    
    $
    1.7
    
    
    $
    0.3
    
    
    $
    2.0Impairment of facility, machinery, and equipment
    
    
    7.8
    
    
    
    
    
    
    
    7.8Severance and other restructuring costs
    
    
    1.9
    
    
    
    0.1
    
    
    
    2.0Total
    
    $
    11.4
    
    
    $
    0.4
    
    
    $
    11.8
 Nine Months Ended October 31, 2007AutomotiveWheels
    
    
    Other
    
    
    TotalFacility closure costs
    
    $
    2.9
    
    
    $
    0.1
    
    
    $
    3.0Impairment of facility, machinery, and equipment
    
    
    49.4
    
    
    
    0.9
    
    
    
    50.3Severance and other restructuring costs
    
    
    
    
    
    
    0.7
    
    
    
    0.7Total
    
    $
    52.3
    
    
    $
    1.7
    
    
    $
    54.0
 14




---



##### Table of Contents



Asset Impairment Losses and Other Restructuring Charges for the Three Months Ended October 31,
2008
    Asset Impairment Losses and Other Restructuring Charges for the Three Months Ended October 31,
2007
    Asset Impairment Losses and Other Restructuring Charges for the Nine Months Ended October 31, 2008
    Asset Impairment Losses and Other Restructuring Charges for the Nine Months Ended October 31, 2007
   15




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##### Table of Contents



Facility Exit Costs and Severance Accruals
  CashPayments andEffects ofJanuary 31,
    
    
    
    
    
    
    Foreign
    
    
    October 31,2008 Accrual
    
    
    Expense
    
    
    Currency
    
    
    2008 AccrualFacility closure costs
    
    $
    
    
    
    $
    2.0
    
    
    $
    (1.3
    )
    
    $
    0.7Severance and other restructuring costs
    
    
    0.2
    
    
    
    2.0
    
    
    
    (0.8
    )
    
    
    1.4Total
    
    $
    0.2
    
    
    $
    4.0
    
    
    $
    (2.1
    )
    
    $
    2.1
 Note 10. Weighted Average Shares Outstanding
  Three Months Ended October 31,
    
    
    Nine Months Ended October 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Basic weighted average shares outstanding
    
    
    101,417
    
    
    
    100,382
    
    
    
    101,198
    
    
    
    73,414Dilutive effect of unvested restricted stock and options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Diluted weighted average shares outstanding
    
    
    101,417
    
    
    
    100,382
    
    
    
    101,198
    
    
    
    73,414
  Note 11. Taxes on Income
  Three Months Ended October 31,2008
    
    2007US
    
    Foreign
    
    US
    
    ForeignPre-tax income (loss)
    
    $
    (11.1
    )
    
    $
    19.4
    
    
    $
    (43.8
    )
    
    $
    3.7Income tax expense
    
    
    (0.2
    )
    
    
    12.7
    
    
    
    (0.4
    )
    
    
    17.1
 Nine Months Ended October 31,2008
    
    2007US
    
    Foreign
    
    US
    
    ForeignPre-tax income (loss)
    
    $
    (52.4
    )
    
    $
    41.8
    
    
    $
    (131.9
    )
    
    $
    48.4Income tax expense
    
    
    0.6
    
    
    
    39.5
    
    
    
    0.2
    
    
    
    38.3
 16




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##### Table of Contents



Note 12. Segment Reporting
   Three Months Ended October 31, 2008AutomotiveWheels
    
    Other
    
    TotalNet sales
    
    $
    475.6
    
    
    $
    21.4
    
    
    $
    497.0Asset impairments and other restructuring charges
    
    
    2.6
    
    
    
    0.1
    
    
    
    2.7Earnings from operations
    
    
    14.4
    
    
    
    6.2
    
    
    
    20.6
 Three Months Ended October 31, 2007AutomotiveWheels
    
    Other
    
    TotalNet sales
    
    $
    543.3
    
    
    $
    11.6
    
    
    $
    554.9Asset impairments and other restructuring charges
    
    
    49.0
    
    
    
    1.0
    
    
    
    50.0Loss from operations
    
    
    (21.8
    )
    
    
    (5.8
    )
    
    
    (27.6
    )
 17




---



##### Table of Contents



Nine Months Ended October 31, 2008AutomotiveWheels
    
    Other
    
    TotalNet sales
    
    $
    1,587.7
    
    
    $
    46.6
    
    
    $
    1,634.3Asset impairments and other restructuring charges
    
    
    11.4
    
    
    
    0.4
    
    
    
    11.8Earnings from operations
    
    
    19.0
    
    
    
    13.0
    
    
    
    32.0
 Nine Months Ended October 31, 2007AutomotiveWheels
    
    Other
    
    TotalNet sales
    
    $
    1,531.3
    
    
    $
    66.3
    
    
    $
    1,597.6Asset impairments and other restructuring charges
    
    
    52.3
    
    
    
    1.7
    
    
    
    54.0Earnings (loss) from operations
    
    
    24.4
    
    
    
    (40.0
    )
    
    
    (15.6
    )
 As of October 31, 2008AutomotiveWheels
    
    Other
    
    TotalTotal assets
    
    $
    1,636.3
    
    
    $
    (146.4
    )
    
    $
    1,489.9
 As of January 31, 2008AutomotiveWheels
    
    Other
    
    TotalTotal assets
    
    $
    1,956.6
    
    
    $
    (150.7
    )
    
    $
    1,805.9
 Note 13. Minority Interest in Equity of Consolidated Subsidiaries
    October 31,
    
    
    January 31,2008
    
    
    2008Minority interest in consolidated affiliates
    
    $
    55.3
    
    
    $
    59.3Minority interest in preferred stock
    
    
    11.4
    
    
    
    11.2Total minority interest
    
    $
    66.7
    
    
    $
    70.5
 Note 14. New Accounting Pronouncements
 Disclosures about Derivative Instruments and Hedging
Activities  an amendment of FASB Statement No. 133
 18




---



##### Table of Contents



Business Combinations
 Noncontrolling Interests in Consolidated Financial
Statements  an amendment of ARB No. 51
 Fair Value Measurements
  Note 15. Condensed Consolidating Financial Statements
   Guarantor and Nonguarantor Financial Statements
  19




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##### Table of Contents



CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the Nine Months Ended October 31, 2008
(Unaudited)
 Guarantor
    
    
    NonguarantorParent
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Total(Dollars in millions)Net sales
    
    $
    
    
    
    $
    
    
    
    $
    1,023.2
    
    
    $
    673.8
    
    
    $
    (62.7
    )
    
    $
    1,634.3Cost of goods sold
    
    
    0.1
    
    
    
    
    
    
    
    929.4
    
    
    
    575.3
    
    
    
    (62.7
    )
    
    
    1,442.1Gross (loss) profit
    
    
    (0.1
    )
    
    
    
    
    
    
    93.8
    
    
    
    98.5
    
    
    
    
    
    
    
    192.2Marketing, general, and administrative
    
    
    
    
    
    
    0.6
    
    
    
    79.3
    
    
    
    32.9
    
    
    
    
    
    
    
    112.8Equity in (earnings) losses of
subsidiaries and joint ventures
    
    
    70.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (70.1
    )
    
    
    Amortization of intangibles
    
    
    
    
    
    
    
    
    
    
    0.4
    
    
    
    7.9
    
    
    
    
    
    
    
    8.3Asset impairments and other restructuring charges
    
    
    
    
    
    
    
    
    
    
    10.6
    
    
    
    1.2
    
    
    
    
    
    
    
    11.8Other (income) expense, net
    
    
    
    
    
    
    
    
    
    
    (3.4
    )
    
    
    11.6
    
    
    
    19.1
    
    
    
    27.3(Loss) earnings from operations
    
    
    (70.2
    )
    
    
    (0.6
    )
    
    
    6.9
    
    
    
    44.9
    
    
    
    51.0
    
    
    
    32.0Interest expense (income), net
    
    
    
    
    
    
    61.5
    
    
    
    (31.3
    )
    
    
    9.6
    
    
    
    
    
    
    
    39.8Other non-operating expense
    
    
    
    
    
    
    
    
    
    
    0.5
    
    
    
    1.6
    
    
    
    0.7
    
    
    
    2.8(Loss) earnings from continuing operations
before taxes and minority interest
    
    
    (70.2
    )
    
    
    (62.1
    )
    
    
    37.7
    
    
    
    33.7
    
    
    
    50.3
    
    
    
    (10.6
    )Income tax expense
    
    
    
    
    
    
    1.9
    
    
    
    19.5
    
    
    
    18.7
    
    
    
    
    
    
    
    40.1(Loss) earnings from continuing operations before
minority interest
    
    
    (70.2
    )
    
    
    (64.0
    )
    
    
    18.2
    
    
    
    15.0
    
    
    
    50.3
    
    
    
    (50.7
    )Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17.2
    
    
    
    
    
    
    
    17.2(Loss) earnings from continuing operations
    
    
    (70.2
    )
    
    
    (64.0
    )
    
    
    18.2
    
    
    
    (2.2
    )
    
    
    50.3
    
    
    
    (67.9
    )Loss from discontinued operations .
    
    
    
    
    
    
    
    
    
    
    (2.3
    )
    
    
    
    
    
    
    
    
    
    
    (2.3
    )Net (loss) income
    
    $
    (70.2
    )
    
    $
    (64.0
    )
    
    $
    15.9
    
    
    $
    (2.2
    )
    
    $
    50.3
    
    
    $
    (70.2
    )
 20




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CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the Nine Months Ended October 31, 2007
(Unaudited)
 Guarantor
    
    
    NonguarantorParent
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Total(Dollars in millions)Net sales
    
    $
    
    
    
    $
    
    
    
    $
    1,150.8
    
    
    $
    500.8
    
    
    $
    (54.0
    )
    
    $
    1,597.6Cost of goods sold
    
    
    0.1
    
    
    
    
    
    
    
    1,054.3
    
    
    
    429.8
    
    
    
    (54.0
    )
    
    
    1,430.2Gross (loss) profit
    
    
    (0.1
    )
    
    
    
    
    
    
    96.5
    
    
    
    71.0
    
    
    
    
    
    
    
    167.4Marketing, general, and administrative
    
    
    
    
    
    
    
    
    
    
    95.2
    
    
    
    21.4
    
    
    
    
    
    
    
    116.6Equity in (earnings) losses of
subsidiaries and joint ventures
    
    
    165.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (165.0
    )
    
    
    Asset impairments and other restructuring charges
    
    
    
    
    
    
    
    
    
    
    42.7
    
    
    
    11.3
    
    
    
    
    
    
    
    54.0Other (income) expense, net
    
    
    
    
    
    
    (18.1
    )
    
    
    4.8
    
    
    
    (113.6
    )
    
    
    139.3
    
    
    
    12.4(Loss) earnings from operations
    
    
    (165.1
    )
    
    
    18.1
    
    
    
    (46.2
    )
    
    
    151.9
    
    
    
    25.7
    
    
    
    (15.6
    )Interest expense, net
    
    
    
    
    
    
    19.5
    
    
    
    15.5
    
    
    
    12.8
    
    
    
    
    
    
    
    47.8Loss on early extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    21.5
    
    
    
    
    
    
    
    
    
    
    
    21.5Other non-operating (income) expense
    
    
    
    
    
    
    
    
    
    
    (4.1
    )
    
    
    (15.1
    )
    
    
    17.8
    
    
    
    (1.4
    )(Loss) earnings from continuing operations
before taxes and minority interest
    
    
    (165.1
    )
    
    
    (1.4
    )
    
    
    (79.1
    )
    
    
    154.2
    
    
    
    7.9
    
    
    
    (83.5
    )Income tax expense
    
    
    
    
    
    
    
    
    
    
    27.4
    
    
    
    11.1
    
    
    
    
    
    
    
    38.5(Loss) earnings from continuing operations before
minority interest
    
    
    (165.1
    )
    
    
    (1.4
    )
    
    
    (106.5
    )
    
    
    143.1
    
    
    
    7.9
    
    
    
    (122.0
    )Minority interest
    
    
    
    
    
    
    
    
    
    
    0.6
    
    
    
    14.8
    
    
    
    
    
    
    
    15.4(Loss) earnings from continuing operations
    
    
    (165.1
    )
    
    
    (1.4
    )
    
    
    (107.1
    )
    
    
    128.3
    
    
    
    7.9
    
    
    
    (137.4
    )(Loss) earnings from discontinued operations
    
    
    
    
    
    
    
    
    
    
    (35.0
    )
    
    
    7.3
    
    
    
    
    
    
    
    (27.7
    )Net (loss) income
    
    $
    (165.1
    )
    
    $
    (1.4
    )
    
    $
    (142.1
    )
    
    $
    135.6
    
    
    $
    7.9
    
    
    $
    (165.1
    )
 21




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CONDENSED CONSOLIDATING BALANCE SHEETS
As of October 31, 2008
(Unaudited)
 Guarantor
    
    
    NonguarantorParent
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Total(Dollars in millions)Cash and cash equivalents
    
    $
    
    
    
    $
    15.8
    
    
    $
    11.7
    
    
    $
    29.6
    
    
    $
    
    
    
    $
    57.1Receivables, net
    
    
    
    
    
    
    
    
    
    
    116.8
    
    
    
    108.2
    
    
    
    
    
    
    
    225.0Other receivables
    
    
    
    
    
    
    
    
    
    
    39.4
    
    
    
    39.4
    
    
    
    (39.4
    )
    
    
    39.4Inventories
    
    
    
    
    
    
    
    
    
    
    128.7
    
    
    
    65.9
    
    
    
    
    
    
    
    194.6Assets held for sale .
    
    
    
    
    
    
    
    
    
    
    31.2
    
    
    
    
    
    
    
    
    
    
    
    31.2Prepaid expenses and other current assets
    
    
    
    
    
    
    
    
    
    
    5.3
    
    
    
    4.6
    
    
    
    (0.8
    )
    
    
    9.1Total current assets
    
    
    
    
    
    
    15.8
    
    
    
    333.1
    
    
    
    247.7
    
    
    
    (40.2
    )
    
    
    556.4Property, plant, and equipment, net
    
    
    
    
    
    
    
    
    
    
    323.4
    
    
    
    211.7
    
    
    
    
    
    
    
    535.1Goodwill and other assets, net
    
    
    98.3
    
    
    
    715.2
    
    
    
    45.1
    
    
    
    299.6
    
    
    
    (759.8
    )
    
    
    398.4Total assets
    
    $
    98.3
    
    
    $
    731.0
    
    
    $
    701.6
    
    
    $
    759.0
    
    
    $
    (800.0
    )
    
    $
    1,489.9Bank borrowings and other notes
    
    $
    
    
    
    $
    
    
    
    $
    36.7
    
    
    $
    9.7
    
    
    $
    
    
    
    $
    46.4Current portion of long-term debt
    
    
    
    
    
    
    3.4
    
    
    
    0.1
    
    
    
    0.7
    
    
    
    
    
    
    
    4.2Liabilities held for sale
    
    
    
    
    
    
    
    
    
    
    8.3
    
    
    
    
    
    
    
    
    
    
    
    8.3Accounts payable and other accrued liabilities
    
    
    
    
    
    
    9.3
    
    
    
    239.9
    
    
    
    180.8
    
    
    
    (39.4
    )
    
    
    390.6Total current liabilities
    
    
    
    
    
    
    12.7
    
    
    
    285.0
    
    
    
    191.2
    
    
    
    (39.4
    )
    
    
    449.5Long-term debt, net of current portion
    
    
    
    
    
    
    501.5
    
    
    
    16.5
    
    
    
    1.1
    
    
    
    
    
    
    
    519.1Pension and other long-term liabilities
    
    
    
    
    
    
    
    
    
    
    267.9
    
    
    
    92.7
    
    
    
    (4.4
    )
    
    
    356.2Minority interest
    
    
    
    
    
    
    
    
    
    
    11.4
    
    
    
    56.3
    
    
    
    (1.0
    )
    
    
    66.7Parent loans
    
    
    
    
    
    
    425.8
    
    
    
    (526.7
    )
    
    
    120.8
    
    
    
    (19.9
    )
    
    
    Common stock
    
    
    1.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.0Additional paid-in capital
    
    
    885.8
    
    
    
    (54.3
    )
    
    
    1,125.2
    
    
    
    330.5
    
    
    
    (1,401.4
    )
    
    
    885.8Retained earnings (accumulated deficit)
    
    
    (1,000.6
    )
    
    
    (213.5
    )
    
    
    (555.9
    )
    
    
    (124.4
    )
    
    
    893.9
    
    
    
    (1,000.5
    )Accumulated other comprehensive
income (loss)
    
    
    212.1
    
    
    
    58.8
    
    
    
    78.2
    
    
    
    90.8
    
    
    
    (227.8
    )
    
    
    212.1Total stockholders equity
    
    
    98.3
    
    
    
    (209.0
    )
    
    
    647.5
    
    
    
    296.9
    
    
    
    (735.3
    )
    
    
    98.4Total liabilities and stockholders equity
    
    $
    98.3
    
    
    $
    731.0
    
    
    $
    701.6
    
    
    $
    759.0
    
    
    $
    (800.0
    )
    
    $
    1,489.9
 22




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##### Table of Contents



CONDENSED CONSOLIDATING BALANCE SHEETS
As of January 31, 2008
 Guarantor
    
    
    NonguarantorParent
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Total(Dollars in millions)Cash and cash equivalents
    
    $
    
    
    
    $
    84.7
    
    
    $
    30.3
    
    
    $
    45.2
    
    
    $
    
    
    
    $
    160.2Receivables, net
    
    
    
    
    
    
    
    
    
    
    151.1
    
    
    
    154.5
    
    
    
    
    
    
    
    305.6Other receivables
    
    
    
    
    
    
    
    
    
    
    48.3
    
    
    
    48.3
    
    
    
    (48.3
    )
    
    
    48.3Inventories
    
    
    
    
    
    
    
    
    
    
    111.3
    
    
    
    67.8
    
    
    
    
    
    
    
    179.1Assets held for sale
    
    
    
    
    
    
    
    
    
    
    21.4
    
    
    
    
    
    
    
    
    
    
    
    21.4Prepaid expenses and other current assets
    
    
    
    
    
    
    
    
    
    
    7.0
    
    
    
    5.3
    
    
    
    (0.1
    )
    
    
    12.2Total current assets
    
    
    
    
    
    
    84.7
    
    
    
    369.4
    
    
    
    321.1
    
    
    
    (48.4
    )
    
    
    726.8Property, plant, and equipment, net
    
    
    
    
    
    
    
    
    
    
    376.5
    
    
    
    240.4
    
    
    
    (0.1
    )
    
    
    616.8Goodwill and other assets, net
    
    
    202.3
    
    
    
    811.0
    
    
    
    112.6
    
    
    
    346.3
    
    
    
    (1,009.9
    )
    
    
    462.3Total assets
    
    $
    202.3
    
    
    $
    895.7
    
    
    $
    858.5
    
    
    $
    907.8
    
    
    $
    (1,058.4
    )
    
    $
    1,805.9Bank borrowings and other notes
    
    $
    
    
    
    $
    
    
    
    $
    29.6
    
    
    $
    3.3
    
    
    $
    
    
    
    $
    32.9Current portion of long-term debt
    
    
    
    
    
    
    3.8
    
    
    
    
    
    
    
    1.0
    
    
    
    
    
    
    
    4.8Liabilities held for sale
    
    
    
    
    
    
    
    
    
    
    8.2
    
    
    
    
    
    
    
    
    
    
    
    8.2Accounts payable and other accrued liabilities
    
    
    
    
    
    
    6.2
    
    
    
    288.5
    
    
    
    263.7
    
    
    
    (48.4
    )
    
    
    510.0Total current liabilities
    
    
    
    
    
    
    10.0
    
    
    
    326.3
    
    
    
    268.0
    
    
    
    (48.4
    )
    
    
    555.9Long-term debt, net of current portion
    
    
    
    
    
    
    569.9
    
    
    
    0.6
    
    
    
    1.7
    
    
    
    
    
    
    
    572.2Pension and other long-term liabilities
    
    
    
    
    
    
    
    
    
    
    287.8
    
    
    
    117.2
    
    
    
    
    
    
    
    405.0Minority interest
    
    
    
    
    
    
    
    
    
    
    11.2
    
    
    
    60.5
    
    
    
    (1.2
    )
    
    
    70.5Parent loans
    
    
    
    
    
    
    487.9
    
    
    
    (543.3
    )
    
    
    78.1
    
    
    
    (22.7
    )
    
    
    Common stock
    
    
    1.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.0Additional paid-in capital
    
    
    882.0
    
    
    
    (54.3
    )
    
    
    1,249.4
    
    
    
    304.5
    
    
    
    (1,499.6
    )
    
    
    882.0Retained earnings (accumulated deficit)
    
    
    (928.7
    )
    
    
    (149.2
    )
    
    
    (590.4
    )
    
    
    (101.5
    )
    
    
    841.1
    
    
    
    (928.7
    )Accumulated other comprehensive
income (loss)
    
    
    248.0
    
    
    
    31.4
    
    
    
    116.9
    
    
    
    179.3
    
    
    
    (327.6
    )
    
    
    248.0Total stockholders equity
    
    
    202.3
    
    
    
    (172.1
    )
    
    
    775.9
    
    
    
    382.3
    
    
    
    (986.1
    )
    
    
    202.3Total liabilities and stockholders equity
    
    $
    202.3
    
    
    $
    895.7
    
    
    $
    858.5
    
    
    $
    907.8
    
    
    $
    (1,058.4
    )
    
    $
    1,805.9
 23




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##### Table of Contents



CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the Nine Months Ended October 31, 2008
(Unaudited)
 Guarantor
    
    
    NonguarantorParent
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Total(Dollars in millions)Cash flows (used for) provided by operating activities
    
    $
    (0.1
    )
    
    $
    (59.2
    )
    
    $
    26.6
    
    
    $
    12.2
    
    
    $
    (0.6
    )
    
    $
    (21.1
    )Cash flows from investing activities:Purchase of property, plant,
equipment, and tooling
    
    
    
    
    
    
    
    
    
    
    (25.0
    )
    
    
    (42.1
    )
    
    
    
    
    
    
    (67.1
    )Investments in subsidiaries
    
    
    0.1
    
    
    
    (0.5
    )
    
    
    (29.6
    )
    
    
    75.6
    
    
    
    (45.6
    )
    
    
    Sale of assets
    
    
    
    
    
    
    
    
    
    
    0.8
    
    
    
    (27.4
    )
    
    
    3.2
    
    
    
    (23.4
    )Cash provided by (used for) investing activities
    
    
    0.1
    
    
    
    (0.5
    )
    
    
    (53.8
    )
    
    
    6.1
    
    
    
    (42.4
    )
    
    
    (90.5
    )Cash flows from financing activities:Changes in bank borrowings and credit facilities
    
    
    
    
    
    
    
    
    
    
    12.4
    
    
    
    8.4
    
    
    
    
    
    
    
    20.8Proceeds from revolving credit facility
    
    
    
    
    
    
    
    
    
    
    16.0
    
    
    
    
    
    
    
    
    
    
    
    16.0Repayment of long-term debt
    
    
    
    
    
    
    (2.0
    )
    
    
    
    
    
    
    (0.6
    )
    
    
    
    
    
    
    (2.6
    )Dividends paid to minority shareholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12.9
    )
    
    
    
    
    
    
    (12.9
    )Proceeds from parent investments
    
    
    
    
    
    
    
    
    
    
    39.4
    
    
    
    (82.8
    )
    
    
    43.4
    
    
    
    Cash (used
for) provided by financing activities
    
    
    
    
    
    
    (2.0
    )
    
    
    67.8
    
    
    
    (87.9
    )
    
    
    43.4
    
    
    
    21.3(Decrease) increase in parent loans
and advances
    
    
    
    
    
    
    (6.1
    )
    
    
    (56.6
    )
    
    
    63.1
    
    
    
    (0.4
    )
    
    
    Cash flows from discontinued operations
    
    
    
    
    
    
    
    
    
    
    (1.1
    )
    
    
    
    
    
    
    
    
    
    
    (1.1
    )Effect of exchange rates on cash and cash
equivalents
    
    
    
    
    
    
    (1.1
    )
    
    
    (1.5
    )
    
    
    (9.1
    )
    
    
    
    
    
    
    (11.7
    )(Decrease) increase in cash and cash equivalents
    
    
    
    
    
    
    (68.9
    )
    
    
    (18.6
    )
    
    
    (15.6
    )
    
    
    
    
    
    
    (103.1
    )Cash and cash equivalents at beginning
of period
    
    
    
    
    
    
    84.7
    
    
    
    30.3
    
    
    
    45.2
    
    
    
    
    
    
    
    160.2Cash and cash equivalents at end of period
    
    $
    
    
    
    $
    15.8
    
    
    $
    11.7
    
    
    $
    29.6
    
    
    $
    
    
    
    $
    57.1
 24




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##### Table of Contents



CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the Nine Months Ended October 31, 2007
(Unaudited)
 Guarantor
    
    
    NonguarantorParent
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Total(Dollars in millions)Cash flows (used for) provided by
operating activities
    
    $
    (0.1
    )
    
    $
    (10.3
    )
    
    $
    (1.9
    )
    
    $
    67.8
    
    
    $
    (18.1
    )
    
    $
    37.4Cash flows from investing activities:Purchase of property, plant,
equipment, and tooling
    
    
    
    
    
    
    
    
    
    
    (29.6
    )
    
    
    (34.5
    )
    
    
    
    
    
    
    (64.1
    )Investments in subsidiaries
    
    
    
    
    
    
    (429.0
    )
    
    
    745.6
    
    
    
    (188.6
    )
    
    
    (128.0
    )
    
    
    Sale of assets
    
    
    
    
    
    
    
    
    
    
    1.3
    
    
    
    0.2
    
    
    
    
    
    
    
    1.5Cash (used for) provided by investing activities
    
    
    
    
    
    
    (429.0
    )
    
    
    717.3
    
    
    
    (222.9
    )
    
    
    (128.0
    )
    
    
    (62.6
    )Cash flows from financing activities:Changes in bank borrowings and credit facilities
    
    
    
    
    
    
    
    
    
    
    (0.6
    )
    
    
    1.5
    
    
    
    
    
    
    
    0.9Bank finance fees paid
    
    
    
    
    
    
    (9.2
    )
    
    
    (5.6
    )
    
    
    
    
    
    
    
    
    
    
    (14.8
    )Borrowing (Repayment) of long-term debt
    
    
    
    
    
    
    525.7
    
    
    
    (661.2
    )
    
    
    (0.8
    )
    
    
    
    
    
    
    (136.3
    )Dividends paid to minority shareholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10.1
    )
    
    
    
    
    
    
    (10.1
    )Proceeds from issuance of common stock
    
    
    193.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    193.1Proceeds from parent investments
    
    
    
    
    
    
    
    
    
    
    442.8
    
    
    
    (392.2
    )
    
    
    (50.6
    )
    
    
    Call premium on Senior Notes
    
    
    
    
    
    
    
    
    
    
    (9.0
    )
    
    
    
    
    
    
    
    
    
    
    (9.0
    )Fees paid for Rights Offering
    
    
    
    
    
    
    
    
    
    
    (7.7
    )
    
    
    
    
    
    
    
    
    
    
    (7.7
    )Cash provided by (used for) financing activities
    
    
    193.1
    
    
    
    516.5
    
    
    
    (241.3
    )
    
    
    (401.6
    )
    
    
    (50.6
    )
    
    
    16.1(Decrease) increase in parent loans
and advances
    
    
    (193.0
    )
    
    
    (52.9
    )
    
    
    (441.0
    )
    
    
    490.2
    
    
    
    196.7
    
    
    
    Cash flows from discontinued operations
    
    
    
    
    
    
    
    
    
    
    (21.3
    )
    
    
    66.4
    
    
    
    
    
    
    
    45.1Effect of exchange rates on cash and cash
equivalents
    
    
    
    
    
    
    
    
    
    
    0.9
    
    
    
    3.2
    
    
    
    
    
    
    
    4.1Increase in cash and cash equivalents
    
    
    
    
    
    
    24.3
    
    
    
    12.7
    
    
    
    3.1
    
    
    
    
    
    
    
    40.1Cash and cash equivalents at beginning
of period
    
    
    
    
    
    
    
    
    
    
    8.7
    
    
    
    29.8
    
    
    
    
    
    
    
    38.5Cash and cash equivalents at end of period
    
    $
    
    
    
    $
    24.3
    
    
    $
    21.4
    
    
    $
    32.9
    
    
    $
    
    
    
    $
    78.6
 25




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Executive Summary
  Company Overview
      26




---



##### Table of Contents



Results of Operations
 Consolidated Results  Comparison of the Three Months Ended October 31, 2008 to the Three Months
Ended October 31, 2007
  Three Months Ended October 31,2008
    
    
    2007
    
    
    $ Change
    
    
    % ChangeNet sales:Automotive Wheels
    
    $
    475.6
    
    
    $
    543.3
    
    
    $
    (67.7
    )
    
    
    (12.5
    %)Other
    
    
    21.4
    
    
    
    11.6
    
    
    
    9.8
    
    
    
    84.5
    %Total
    
    $
    497.0
    
    
    $
    554.9
    
    
    $
    (57.9
    )
    
    
    (10.4
    %)Gross profit
    
    $
    56.6
    
    
    $
    58.1
    
    
    $
    (1.5
    )
    
    
    (2.6
    %)Marketing, general, and administrative
    
    
    34.1
    
    
    
    35.8
    
    
    
    (1.7
    )
    
    
    (4.7
    %)Amortization of intangibles
    
    
    2.6
    
    
    
    2.5
    
    
    
    0.1
    
    
    
    4.0
    %Asset impairments and other restructuring charges
    
    
    2.7
    
    
    
    50.0
    
    
    
    (47.3
    )
    
    
    (94.6
    %)Other income, net
    
    
    (3.4
    )
    
    
    (2.6
    )
    
    
    (0.8
    )
    
    
    30.8
    %Earnings (loss) from operations
    
    
    20.6
    
    
    
    (27.6
    )
    
    
    48.2
    
    
    
    174.6
    %Interest expense, net
    
    
    12.2
    
    
    
    13.9
    
    
    
    (1.7
    )
    
    
    (12.2
    %)Other non-operating expense (income)
    
    
    0.1
    
    
    
    (1.4
    )
    
    
    1.5
    
    
    
    107.1
    %Income tax expense
    
    
    12.5
    
    
    
    16.7
    
    
    
    (4.2
    )
    
    
    (25.1
    %)Minority interest
    
    
    3.9
    
    
    
    5.9
    
    
    
    (2.0
    )
    
    
    (33.9
    %)Loss from continuing operations
    
    
    (8.1
    )
    
    
    (62.7
    )
    
    
    54.6
    
    
    
    87.1
    %Loss from discontinued operations, net of tax
    
    
    (2.3
    )
    
    
    
    
    
    
    (2.3
    )
    
    
    N/ANet loss
    
    $
    (10.4
    )
    
    $
    (62.7
    )
    
    $
    52.3
    
    
    
    83.4
    %
 Sales
  Gross profit
  Marketing, general, and administrative
  Asset impairments and other restructuring charges
  27




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##### Table of Contents



Interest expense, net
  Income taxes
  Discontinued operations
  Net loss
  Segment Results  Comparison of the Three Months Ended October 31, 2008 to the Three Months Ended
October 31, 2007
 Automotive Wheels
  Three Months Ended October 31,2008
    
    
    2007
    
    
    $ ChangeNet sales
    
    $
    475.6
    
    
    $
    543.3
    
    
    $
    (67.7
    )Asset impairments and other restructuring charges:Facility closure costs
    
    $
    1.1
    
    
    $
    0.1
    
    
    $
    1.0Impairment of facility, machinery, and equipment
    
    
    0.6
    
    
    
    48.9
    
    
    
    (48.3
    )Severance and other restructuring costs
    
    
    0.9
    
    
    
    
    
    
    
    0.9Total asset impairments and other restructuring charges
    
    $
    2.6
    
    
    $
    49.0
    
    
    $
    (46.4
    )Earnings (loss) from operations
    
    $
    14.4
    
    
    $
    (21.8
    )
    
    $
    36.2
 Net sales
  Asset impairments and other restructuring charges
  28




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##### Table of Contents



Earnings (loss) from operations
  Other
  Three Months Ended October 31,2008
    
    2007
    
    $ ChangeNet sales
    
    $
    21.4
    
    
    $
    11.6
    
    
    $
    9.8Total asset impairments and other restructuring charges
    
    
    0.1
    
    
    
    1.0
    
    
    
    (0.9
    )Earnings (loss) from operations
    
    
    6.2
    
    
    
    (5.8
    )
    
    
    12.0
 Net Sales
  Asset impairments and other restructuring charges
  Earnings (loss) from operations
  29




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##### Table of Contents



Consolidated Results  Comparison of the Nine Months Ended October 31, 2008 to the Nine Months
Ended October 31, 2007
  Nine Months Ended October 31,2008
    
    
    2007
    
    
    $ Change
    
    
    % ChangeNet sales:Automotive Wheels
    
    $
    1,587.7
    
    
    $
    1,531.3
    
    
    $
    56.4
    
    
    
    3.7
    %Other
    
    
    46.6
    
    
    
    66.3
    
    
    
    (19.7
    )
    
    
    (29.7
    %)Total
    
    $
    1,634.3
    
    
    $
    1,597.6
    
    
    $
    36.7
    
    
    
    2.3
    %Gross profit
    
    $
    192.2
    
    
    $
    167.4
    
    
    $
    24.8
    
    
    
    14.8
    %Marketing, general, and administrative
    
    
    112.8
    
    
    
    116.6
    
    
    
    (3.8
    )
    
    
    (3.3
    %)Amortization of intangibles
    
    
    8.3
    
    
    
    7.5
    
    
    
    0.8
    
    
    
    10.7
    %Asset impairments and other restructuring charges
    
    
    11.8
    
    
    
    54.0
    
    
    
    (42.2
    )
    
    
    (78.1
    %)Other expense, net
    
    
    27.3
    
    
    
    4.9
    
    
    
    22.4
    
    
    
    457.1
    %Earnings (loss) from operations
    
    
    32.0
    
    
    
    (15.6
    )
    
    
    47.6
    
    
    
    305.1
    %Interest expense, net
    
    
    39.8
    
    
    
    47.8
    
    
    
    (8.0
    )
    
    
    (16.7
    %)Loss on early extinguishment of debt
    
    
    
    
    
    
    21.5
    
    
    
    (21.5
    )
    
    
    (100.0
    %)Other non-operating expense (income)
    
    
    2.8
    
    
    
    (1.4
    )
    
    
    4.2
    
    
    
    300.0
    %Income tax expense
    
    
    40.1
    
    
    
    38.5
    
    
    
    1.6
    
    
    
    4.2
    %Minority interest
    
    
    17.2
    
    
    
    15.4
    
    
    
    1.8
    
    
    
    11.7
    %Loss from continuing operations
    
    
    (67.9
    )
    
    
    (137.4
    )
    
    
    69.5
    
    
    
    50.6
    %Loss from discontinued operations, net of tax
    
    
    (2.3
    )
    
    
    (27.7
    )
    
    
    25.4
    
    
    
    91.7
    %Net loss
    
    $
    (70.2
    )
    
    $
    (165.1
    )
    
    $
    94.9
    
    
    
    57.5
    %
 Sales
  Gross profit
  Marketing, general, and administrative
  Asset impairments and other restructuring charges
  30




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##### Table of Contents



Other expense, net
  Interest expense, net
  Income taxes
  Discontinued operations
  Net loss
  Segment Results  Comparison of the Nine Months Ended October 31, 2008 to the Nine Months Ended
October 31, 2007
 Automotive Wheels
  Nine Months Ended October 31,2008
    
    
    2007
    
    
    $ ChangeNet sales
    
    $
    1,587.7
    
    
    $
    1,531.3
    
    
    $
    56.4Asset impairments and other restructuring charges:Facility closure costs
    
    $
    1.7
    
    
    $
    2.9
    
    
    $
    (1.2
    )Impairment of facility, machinery, and equipment
    
    
    7.8
    
    
    
    49.4
    
    
    
    (41.6
    )Severance and other restructuring costs
    
    
    1.9
    
    
    
    
    
    
    
    1.9Total asset impairments and other restructuring charges
    
    $
    11.4
    
    
    $
    52.3
    
    
    $
    (40.9
    )Earnings from operations
    
    $
    19.0
    
    
    $
    24.4
    
    
    $
    (5.4
    )
 31




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##### Table of Contents



Net sales
  Asset impairments and other restructuring charges
   Earnings from operations
  Other
  Nine Months Ended October 31,2008
    
    2007
    
    $ ChangeNet sales
    
    $
    46.6
    
    
    $
    66.3
    
    
    $
    (19.7
    )Total asset impairments and other restructuring charges
    
    
    0.4
    
    
    
    1.7
    
    
    
    (1.3
    )Earnings (loss) from operations
    
    
    13.0
    
    
    
    (40.0
    )
    
    
    53.0
 Net Sales
  Asset impairments and other restructuring charges
  32




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##### Table of Contents



Earnings (loss) from operations
  Liquidity and Capital Resources
 Sources of Liquidity
  Capital Resources
    Cash Flows
 Operating Activities:
 Investing Activities:
 Financing Activities:
 33




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##### Table of Contents



Off Balance Sheet Arrangements
      Credit Ratings
  S&P
    
    Moodys
    
    FitchCorporate rating
    
    B
    
    B3
    
    BBank debt rating
    
    BB-
    
    B2
    
    BB/RR1New Senior Note rating
    
    B-
    
    Caa2
    
    B-/RR5
 34




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##### Table of Contents



Contractual Obligations
  Payment Due by PeriodLess than 1Year
    
    
    2-3 Years
    
    
    4-5 Years
    
    
    After 5 Years
    
    
    TotalShort-term borrowings
    
    $
    46.4
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    46.4Long-term debt
    
    
    4.2
    
    
    
    7.9
    
    
    
    22.8
    
    
    
    488.4
    
    
    
    523.3Operating leases
    
    
    3.9
    
    
    
    2.1
    
    
    
    0.6
    
    
    
    0.1
    
    
    
    6.7Capital expenditures
    
    
    11.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11.9United States pension contribution
    
    
    4.4
    
    
    
    7.4
    
    
    
    4.2
    
    
    
    
    
    
    
    16.0Tax reserves
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    4.7
    
    
    
    4.8Total obligations
    
    $
    70.8
    
    
    $
    17.5
    
    
    $
    27.6
    
    
    $
    493.2
    
    
    $
    609.1
 Other Cash Requirements
  Interest
    
    $
    16.1Taxes
    
    
    6.6International pension and other post-retirement benefits funding
    
    
    5.7
 New Accounting Pronouncements
 Disclosures about
Derivative Instruments and Hedging Activities  an amendment of FASB Statement No. 133
 Business Combinations
 Noncontrolling Interests in Consolidated Financial
Statements  an amendment of ARB No. 51
 Fair Value Measurements
 35




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
  Foreign Exchange
     Interest Rates
   Commodities
  36




---



##### Table of Contents



Item 4. Controls and Procedures
   
 PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 2. Changes in Securities and Use of Proceeds
  
 Item 3. Defaults upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  37




---



##### Table of Contents



Item 5. Other Information
  
 Item 6. Exhibits
 31.1
    
    Certification of Curtis J. Clawson, Chairman of the Board, President,
and Chief Executive Officer, pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*31.2
    
    Certification Mark A. Brebberman, Vice President, Chief Financial
Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*32.1
    
    Certification of Curtis J. Clawson, Chairman of the Board, President,
and Chief Executive Officer, Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*32.2
    
    Certification of Mark A. Brebberman, Vice President, Chief Financial
Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.*
 
 *
    
    Filed electronically herewith. 
 SIGNATURES
  HAYES LEMMERZ INTERNATIONAL, INC./s/   MARK A. BREBBERMANMark A. BrebbermanVice President and Chief Financial Officer  38




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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC.
 
 10-Q EXHIBIT INDEX
 31.1
    
    Certification of Curtis J. Clawson, Chairman of the Board, President,
and Chief Executive Officer, pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*31.2
    
    Certification Mark A. Brebberman, Vice President, Chief Financial
Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*32.1
    
    Certification of Curtis J. Clawson, Chairman of the Board, President,
and Chief Executive Officer, Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*32.2
    
    Certification of Mark A. Brebberman, Vice President, Chief Financial
Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.*
 
 *
    
    Filed electronically herewith. 39