##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT of 1934
 For the quarterly period ended March 31, 2009
 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: 0-452
 TECUMSEH PRODUCTS COMPANY
  MICHIGAN
(State of Incorporation)
    
    38-1093240
(IRS Employer Identification Number)1136 OAK VALLEY DRIVE 
ANN ARBOR, MICHIGAN
(Address of Principal Executive Offices)
    
    48108
(Zip Code)
 
 þ o
 o 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
  Class of Stock
    
    Outstanding at March 31, 2009Class B Common Stock, $1.00 par value
    
    5,077,746Class A Common Stock, $1.00 par value
    
    13,401,938




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##### 



TABLE OF CONTENTS
 PagePart I. Financial Information (unaudited)Item 1. Financial Statements (unaudited)Consolidated Condensed Balance Sheets (unaudited)
    
    
    3Consolidated Condensed Statements of Operations (unaudited)
    
    
    4Consolidated Condensed Statements of Cash Flows (unaudited)
    
    
    5Notes to Consolidated Condensed Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    25Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    38Item 4. Controls and Procedures
    
    
    41Part II. Other InformationItem 1. Legal Proceedings
    
    
    43Item 6. Exhibits
    
    
    45Signatures
    
    
    46EX-31.1EX-31.2EX-32.1EX-32.2
  Page 2




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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
 
  
 
 March 31,
    
    
    December 31,(Dollars in millions, except share data)
    
    2008
    
    
    2008ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    88.0
    
    
    $
    113.1Restricted cash and cash equivalents
    
    
    12.0
    
    
    
    12.5Accounts receivable, trade, less allowance for
doubtful accounts of $0.9 in 2009 and $1.2 in 2008
    
    
    80.5
    
    
    
    88.1Inventories
    
    
    111.5
    
    
    
    123.0Deferred and recoverable income taxes
    
    
    20.5
    
    
    
    23.2Recoverable non-income taxes
    
    
    12.6
    
    
    
    11.7Assets held for sale
    
    
    19.7
    
    
    
    21.7Other current assets
    
    
    17.4
    
    
    
    19.3Total current assets
    
    
    362.2
    
    
    
    412.6Property, plant, and equipment, net
    
    
    235.7
    
    
    
    244.3Long term investments
    
    
    4.8
    
    
    
    4.8Prepaid pension expense
    
    
    81.1
    
    
    
    81.0Recoverable income taxes
    
    
    0.1
    
    
    
    0.1Recoverable non-income taxes
    
    
    38.0
    
    
    
    37.0Other assets
    
    
    17.8
    
    
    
    18.7Total assets
    
    $
    739.7
    
    
    $
    798.5LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities:Accounts payable, trade
    
    $
    89.5
    
    
    $
    109.6Short-term borrowings
    
    
    37.2
    
    
    
    30.4Liabilities held for sale
    
    
    0.7
    
    
    
    1.0Accrued liabilities:Employee compensation
    
    
    24.8
    
    
    
    26.1Product warranty and self-insured risks
    
    
    10.3
    
    
    
    12.1Fair value of hedge
    
    
    23.0
    
    
    
    38.6Other
    
    
    18.0
    
    
    
    21.4Total current liabilities
    
    
    203.5
    
    
    
    239.2Long-term debt
    
    
    0.3
    
    
    
    0.4Deferred income taxes
    
    
    4.2
    
    
    
    8.7Other postretirement benefit liabilities
    
    
    39.0
    
    
    
    39.5Product warranty and self-insured risks
    
    
    6.4
    
    
    
    8.0Pension liabilities
    
    
    18.2
    
    
    
    18.7Other non-current liabilities
    
    
    7.5
    
    
    
    6.6Total liabilities
    
    
    279.1
    
    
    
    321.1Stockholders EquityClass A common stock, $1 par value; authorized
75,000,000 shares; issued and outstanding 13,401,938
shares in 2009 and 2008
    
    
    13.4
    
    
    
    13.4Class B common stock, $1 par value; authorized
25,000,000 shares; issued and outstanding 5,077,746
shares in 2009 and 2008
    
    
    5.1
    
    
    
    5.1Paid in capital
    
    
    11.0
    
    
    
    11.0Retained earnings
    
    
    480.5
    
    
    
    504.4Accumulated other comprehensive income
    
    
    (49.4
    )
    
    
    (56.5
    )Total stockholders equity
    
    
    460.6
    
    
    
    477.4Total liabilities and stockholders equity
    
    $
    739.7
    
    
    $
    798.5
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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
 Three Months EndedMarch 31,(Dollars in millions, except per share data)
    
    2009
    
    
    2008Net sales
    
    $
    148.1
    
    
    $
    275.2Cost of sales
    
    
    138.8
    
    
    
    229.7Selling and administrative expenses
    
    
    32.2
    
    
    
    31.6Impairments, restructuring charges, and other items
    
    
    5.9
    
    
    
    0.5Operating (loss) income
    
    
    (28.8
    )
    
    
    13.4Interest expense
    
    
    2.9
    
    
    
    7.3Interest income and other, net
    
    
    0.8
    
    
    
    1.8(Loss) income from continuing operations before taxes
    
    
    (30.9
    )
    
    
    7.9Tax (benefit) expense
    
    
    (6.4
    )
    
    
    1.2(Loss) income from continuing operations
    
    
    (24.5
    )
    
    
    6.7Income from discontinued operations, net of tax
    
    
    0.6
    
    
    
    10.3Net (loss) income
    
    
    ($23.9
    )
    
    $
    17.0Basic (loss) earnings per share:*(Loss) income from continuing operations
    
    
    (1.32
    )
    
    
    0.36Income from discontinued operations, net of tax
    
    
    0.03
    
    
    
    0.56Net (loss) income per share, basic
    
    
    ($1.29
    )
    
    $
    0.92Diluted (loss) earnings per share:**(Loss) income from continuing operations
    
    
    (1.32
    )
    
    
    0.34Income from discontinued operations, net of tax
    
    
    0.03
    
    
    
    0.52Net (loss) income per share, diluted
    
    
    ($1.29
    )
    
    $
    0.86Weighted average shares, basic (in thousands)
    
    
    18,480
    
    
    
    18,480Weighted average shares, diluted (in thousands)
    
    
    19,871
    
    
    
    19,871Cash dividends declared per share
    
    $
    0.00
    
    
    $
    0.00
 
 *
    
    Based on 18,479,684 shares issued and outstanding throughout all periods presented.**
    
    On April 9, 2007, we issued a warrant to a lender to purchase 1,390,944 shares of our Class A
Common Stock, which is equivalent to 7% of our fully diluted common stock (including both Class A
and Class B shares). Diluted earnings per share for the three months ended March 31, 2008 are
therefore calculated based on a total of 19,870,628 shares. For the three months ended March 31,
2009, however, this warrant is not included in diluted per share information, as the effect would
be antidilutive due to the losses recorded in continuing operations.  Page 4




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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
 Three Months EndedMarch 31,(Dollars in millions)
    
    2009
    
    
    2008Cash Flows from Operating Activities:Net (loss) income
    
    
    ($23.9
    )
    
    $
    17.0Adjustments to reconcile net (loss) income to net cash
provided by (used in) operating activities:Depreciation and amortization
    
    
    9.5
    
    
    
    11.2Loss (gain) on disposal of property and equipment
    
    
    0.5
    
    
    
    (4.5
    )Changes in assets and liabilities:Accounts receivable
    
    
    5.8
    
    
    
    (23.5
    )Inventories
    
    
    10.1
    
    
    
    (1.7
    )Payables and accrued expenses
    
    
    (27.4
    )
    
    
    41.0Employee retirement benefits
    
    
    (2.2
    )
    
    
    79.4Deferred and recoverable taxes
    
    
    (3.8
    )
    
    
    (1.0
    )Other
    
    
    3.1
    
    
    
    2.6Cash (used in) provided by operating activities
    
    
    (28.3
    )
    
    
    120.5Cash Flows from Investing Activities:Proceeds from sale of assets
    
    
    
    
    
    
    6.8Capital expenditures
    
    
    (2.6
    )
    
    
    (0.8
    )Change in restricted cash
    
    
    0.5
    
    
    
    (7.6
    )Cash used in investing activities
    
    
    (2.1
    )
    
    
    (1.6
    )Cash Flows from Financing Activities:Debt issuance / amendment costs
    
    
    
    
    
    
    (1.6
    )Borrowings / (repayments), net
    
    
    7.2
    
    
    
    4.8Cash provided by financing activities
    
    
    7.2
    
    
    
    3.2Effect of exchange rate changes on cash
    
    
    (1.9
    )
    
    
    (1.9
    )(Decrease) increase in cash and cash equivalents
    
    
    (25.1
    )
    
    
    120.2Cash and Cash Equivalents:Beginning of period
    
    
    113.1
    
    
    
    76.8End of period
    
    $
    88.0
    
    
    $
    197.0Cash paid (refunds received) for income taxes
    
    
    1.0
    
    
    
    (1.2
    )Cash paid for interest
    
    
    3.0
    
    
    
    6.5
  Page 5




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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
      Electrical Components
    Page 6




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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
  Three Months
    
    
    Three Months(Dollars in millions)
    
    Ended
    
    
    EndedMarch 31, 2009
    
    
    March 31, 2008Net sales
    
    $
    3.5
    
    
    $
    6.5Cost of sales
    
    
    3.4
    
    
    
    5.9Selling and administrative expenses
    
    
    0.5
    
    
    
    0.2Impairments, restructuring charges, and other items
    
    
    (1.9
    )
    
    
    1.0Operating income (loss)
    
    
    1.5
    
    
    
    (0.6
    )Interest expense
    
    
    
    
    
    
    Income (loss) from discontinued operations before
income taxes
    
    $
    1.5
    
    
    
    ($0.6
    )
  Other businesses
    Three Months Ended March 31,(Dollars in millions)
    
    2009
    
    
    2008Electrical Components
    
    $
    1.5
    
    
    
    ($0.6
    )Engine & Power Train
    
    
    (0.9
    )
    
    
    9.8MP Pumps
    
    
    
    
    
    
    1.1Income from discontinued operations
    
    $
    0.6
    
    
    $
    10.3
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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
  (Dollars in millions)
    
    March 31,2009ASSETS:Accounts receivable, net
    
    $
    1.6Inventories
    
    
    8.7Other assets
    
    
    Property, plant, and equipment, net
    
    
    9.4Total assets held for sale
    
    $
    19.7LIABILITIES:Accounts payable, trade
    
    $
    0.3Accrued liabilities
    
    
    0.4Total liabilities held for sale
    
    $
    0.7Net assets held for sale
    
    $
    19.0
  March 31,
    
    
    December 31,(Dollars in millions)
    
    2009
    
    
    2008Raw material
    
    $
    54.9
    
    
    $
    62.6Work in progress
    
    
    7.1
    
    
    
    9.3Finished goods
    
    
    55.1
    
    
    
    57.2Reserve for obsolete and slow moving inventory
    
    
    (5.1
    )
    
    
    (5.5
    )Reserve for lower of cost or market
    
    
    (0.5
    )
    
    
    (0.6
    )Total inventories
    
    $
    111.5
    
    
    $
    123.0
  March 31,
    
    
    December 31,(Dollars in millions)
    
    2009
    
    
    2008Land and land improvements
    
    $
    15.9
    
    
    $
    16.5Buildings
    
    
    93.4
    
    
    
    95.1Machinery and Equipment
    
    
    725.5
    
    
    
    734.3834.8
    
    
    
    845.9Less accumulated depreciation
    
    
    (601.1
    )
    
    
    (603.9
    )233.7
    
    
    
    242.0Assets in process
    
    
    2.0
    
    
    
    2.3Property, plant and equipment, net
    
    $
    235.7
    
    
    $
    244.3
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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
   (Dollars in millions)
    
    Pension Benefits
    
    
    Other BenefitsThree Months Ended
    
    
    Three Months EndedMarch 31,
    
    
    March 31,2009
    
    
    2008
    
    
    2009
    
    
    2008Service cost
    
    $
    0.6
    
    
    $
    0.6
    
    
    $
    0.1
    
    
    $
    0.3Interest cost
    
    
    2.9
    
    
    
    4.8
    
    
    
    0.6
    
    
    
    1.2Expected return on plan assets
    
    
    (4.1
    )
    
    
    (7.9
    )
    
    
    
    
    
    
    (0.1
    )Amortization of prior service costs
    
    
    
    
    
    
    
    
    
    
    (2.5
    )
    
    
    (2.6
    )Amortization of net gain
    
    
    
    
    
    
    
    
    
    
    (0.1
    )
    
    
    (0.5
    )Net periodic benefit income
    
    
    ($0.6
    )
    
    
    ($2.5
    )
    
    
    ($1.8
    )
    
    
    ($1.7
    )Curtailment losses (gains),
settlement charges (gains) and
special termination charges
(benefits)
    
    
    0.5
    
    
    
    (2.0
    )
    
    
    
    
    
    
    (26.0
    )Total pension income
    
    
    ($0.1
    )
    
    
    ($4.5
    )
    
    
    ($1.8
    )
    
    
    ($27.7
    )
  (Dollars in millions)
    
    Pension Benefits
    
    
    Other BenefitsThree Months Ended
    
    
    Three Months EndedMarch 31,
    
    
    March 31,2009
    
    
    2008
    
    
    2009
    
    
    2008Recorded in continuing operations:Hourly pension plan curtailment loss
    
    $
    
    
    
    $
    3.9
    
    
    $
    
    
    
    $
    Hourly plan special termination
benefit charge
    
    
    
    
    
    
    2.4
    
    
    
    
    
    
    
    Salaried plan settlement gain on
annuities
    
    
    
    
    
    
    (6.3
    )
    
    
    
    
    
    
    Salaried plan special termination
benefit charge
    
    
    0.5
    
    
    
    1.0
    
    
    
    
    
    
    
    Hourly plan OPEB curtailment gain
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (19.1
    )Total  continuing operations
    
    
    0.5
    
    
    
    1.0
    
    
    
    
    
    
    
    (19.1
    )Recorded in discontinued operations:Salaried plan curtailment gain
    
    
    
    
    
    
    (2.9
    )
    
    
    
    
    
    
    Consolidated plan curtailment gain
    
    
    
    
    
    
    (0.1
    )
    
    
    
    
    
    
    Salaried OPEB plan curtailment gain
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6.9
    )Total  discontinued operations
    
    
    
    
    
    
    (3.0
    )
    
    
    
    
    
    
    (6.9
    )Total  curtailment losses (gains),
settlement charges (gains) and special
termination charges (benefits)
    
    $
    0.5
    
    
    
    ($2.0
    )
    
    $
    
    
    
    
    ($26.0
    )
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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
          Page 10




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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
  March 31,
    
    
    December 31,(Dollars in millions)
    
    2009
    
    
    2008Brazil
    
    $
    42.3
    
    
    $
    40.2India
    
    
    8.3
    
    
    
    8.5Total recoverable non-income taxes
    
    $
    50.6
    
    
    $
    48.7
    Three Months
    
    
    Three MonthsEnded
    
    
    Ended(Dollars in millions)
    
    March 31, 2009
    
    
    March 31, 2008Balance at January 1
    
    $
    6.6
    
    
    $
    9.7Settlements made (in cash or in kind)
    
    
    (1.1
    )
    
    
    (1.4
    )Current year accrual
    
    
    1.0
    
    
    
    1.4Adjustments to preexisting warranties
    
    
    (1.9
    )
    
    
    0.2Effect of foreign currency translation
    
    
    (0.1
    )
    
    
    0.1Balance at March 31
    
    $
    4.5
    
    
    $
    10.0
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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
     Three Months EndedMarch 31,(Dollars in millions)
    
    2009
    
    2008Net (loss) income
    
    
    ($23.9
    )
    
    $
    17.0Other comprehensive income, net of tax:Foreign currency translation adjustments
    
    
    12.2
    
    
    
    8.7Loss on derivatives
    
    
    (3.4
    )
    
    
    (1.4
    )Total comprehensive (loss) income
    
    
    ($15.1
    )
    
    $
    24.3
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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
    Nonvested
    
    Vested
    
    TotalWeighted average
    
    
    
    
    
    Weighted averagegrant date value
    
    
    
    
    
    grant date valueSARs:
    
    Number of awards
    
    per share
    
    Number of awards
    
    per share
    
    Number of awardsOutstanding at
December 31, 2008
    
    
    327,599
    
    
    $
    15.16
    
    
    
    108,334
    
    
    $
    15.16
    
    
    
    435,933Granted
    
    
    299,301
    
    
    
    6.16
    
    
    
    
    
    
    
    
    
    
    
    299,301Vested
    
    
    (36,977
    )
    
    
    15.16
    
    
    
    36,977
    
    
    
    15.16
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding at
March 31, 2009
    
    
    589,923
    
    
    $
    10.59
    
    
    
    145,311
    
    
    $
    15.16
    
    
    
    735,234Phantom Stock Units:Outstanding at
December 31, 2008
    
    
    362,719
    
    
    
    16.72
    
    
    
    
    
    
    
    
    
    
    
    362,719Granted
    
    
    186,580
    
    
    
    9.88
    
    
    
    
    
    
    
    
    
    
    
    186,580Vested
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding at
March 31, 2009
    
    
    549,299
    
    
    $
    14.40
    
    
    
    
    
    
    
    
    
    
    
    549,299
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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
  Nonvested
    
    Vested
    
    TotalWeighted average
    
    
    
    
    
    Weighted averagegrant date value
    
    
    
    
    
    grant date valueSARs:
    
    Number of awards
    
    per share
    
    Number of awards
    
    per share
    
    Number of awardsOutstanding at
December 31, 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Granted
    
    
    435,933
    
    
    $
    15.16
    
    
    
    
    
    
    
    
    
    
    
    435,933Vested
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding at
March 31, 2008
    
    
    435,933
    
    
    $
    15.16
    
    
    
    
    
    
    
    
    
    
    
    435,933Phantom Stock Units:Outstanding at
December 31, 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Granted
    
    
    148,030
    
    
    $
    28.82
    
    
    
    
    
    
    
    
    
    
    
    148,030Vested
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding at
March 31, 2008
    
    
    148,030
    
    
    $
    28.82
    
    
    
    
    
    
    
    
    
    
    
    148,030
     Risk-free
    
    
    
    
    
    Expected
    
    
    
    
    
    InitialAward
    
    Strike
    
    interest
    
    Dividend
    
    life
    
    
    
    
    
    value perDate
    
    price
    
    rate
    
    yield
    
    (years)
    
    Volatility
    
    award3/4/08
    
    $
    28.82
    
    
    
    3.37
    %
    
    
    0.0
    %
    
    
    7
    
    
    
    51.18
    %
    
    $
    15.161/2/09
    
    
    10.07
    
    
    
    1.87
    %
    
    
    0.0
    %
    
    
    7
    
    
    
    62.78
    %
    
    
    6.243/16/09
    
    
    4.17
    
    
    
    2.50
    %
    
    
    0.0
    %
    
    
    7
    
    
    
    84.70
    %
    
    
    3.17
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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
   Risk-free
    
    
    
    
    
    RemainingAward
    
    Strike
    
    interest
    
    Dividend
    
    life
    
    
    
    
    
    Value perDate
    
    price
    
    rate
    
    yield
    
    (years)
    
    Volatility
    
    award3/4/08
    
    $
    28.82
    
    
    
    2.28
    %
    
    
    0.0
    %
    
    
    6.0
    
    
    
    86.77
    %
    
    $
    1.941/2/09
    
    
    10.07
    
    
    
    2.28
    %
    
    
    0.0
    %
    
    
    6.8
    
    
    
    86.77
    %
    
    
    2.953/16/09
    
    
    4.17
    
    
    
    2.28
    %
    
    
    0.0
    %
    
    
    7.0
    
    
    
    86.77
    %
    
    
    3.52
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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
   Three Months
    
    
    Three MonthsEnded
    
    
    Ended(Dollars in millions)
    
    March 31, 2009
    
    
    March 31, 2008Excise tax expense on proceeds from salaried
retirement plan reversion
    
    $
    
    
    
    $
    20.0Severance, restructuring costs, and special
termination benefits
    
    
    3.3
    
    
    
    2.6Gain on sale of buildings and machinery
    
    
    
    
    
    
    (0.6
    )Loss on transfer of surplus land
    
    
    0.3
    
    
    
    Environmental reserve on held-for-sale building
    
    
    2.3
    
    
    
    Curtailment and settlement (gains) / losses
    
    
    
    
    
    
    (21.5
    )Total impairments, restructuring charges, and
other items
    
    $
    5.9
    
    
    $
    0.5
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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
          Level 1
    
    Valuation is based upon quoted prices for identical instruments traded in active
markets.Level 2
    
    Valuation is based upon quoted prices for similar instruments in active markets,
quoted prices for identical or similar instruments in markets that are not active, and
model-based valuation techniques for which all significant assumptions are observable in
the market.
 Level 3
    
    Valuation is generated from model-based techniques that use at least one
significant assumption not observable in the market. These unobservable assumptions
reflect estimates of assumptions that market participants would use in pricing the asset
or liability.
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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
  Cash and cash equivalents; restricted cash and cash equivalents
  Short and long term investments
   Foreign currency forward purchases and commodity futures contracts
  Short and long term borrowings
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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
 Assets and liabilities recorded at fair value on a recurring basis
  Total Fair(Dollars in millions)
    
    Value
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Assets:Cash and cash equivalents
    
    $
    88.0
    
    
    $
    88.0
    
    
    $
    
    
    
    $
    Restricted cash and cash equivalents
    
    
    12.0
    
    
    
    12.0
    
    
    
    
    
    
    
    Auction rate certificates
    
    
    4.3
    
    
    
    
    
    
    
    
    
    
    
    4.3Auction rate securities rights
    
    
    0.5
    
    
    
    
    
    
    
    
    
    
    
    0.5Balance as of March 31, 2009
    
    $
    104.8
    
    
    $
    100.0
    
    
    $
    
    
    
    $
    4.8Liabilities:Commodity futures contracts
    
    $
    8.9
    
    
    $
    
    
    
    $
    8.9
    
    
    $
    Foreign currency derivatives
    
    
    14.1
    
    
    
    
    
    
    
    14.1
    
    
    
    Short-term borrowings
    
    
    37.2
    
    
    
    37.2
    
    
    
    
    
    
    
    Long-term debt
    
    
    0.3
    
    
    
    0.3
    
    
    
    
    
    
    
    Balance as of March 31, 2009
    
    $
    60.5
    
    
    $
    37.5
    
    
    $
    23.0
    
    
    $
    
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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
  Liability DerivativesMarch 31, 2009
    
    
    December 31, 2008Financial
    
    
    
    
    
    
    Financial(Dollars in millions)
    
    Position Location
    
    
    Fair Value
    
    
    Position Location
    
    
    Fair ValueDerivatives designated as
hedging instruments under SFAS
133Commodity futures contracts
    
    Fair value of hedge
    
    $
    8.9
    
    
    Fair value of hedge
    
    $
    13.2Foreign currency derivatives
    
    Fair value of hedge
    
    
    14.1
    
    
    Fair value of hedge
    
    
    25.4Total derivatives designated as
hedging instruments under SFAS
133
    
    
    
    
    
    $
    23.0
    
    
    
    
    
    
    $
    38.6
  Amount of Gain orAmount of Gain or
    
    
    
    
    
    
    (Loss) Reclassified(Loss) Recognized
    
    
    Location of Gain or
    
    
    from Accumulatedin OCI (Effective
    
    
    (Loss) Reclassified
    
    
    OCI into IncomePortion)
    
    
    from Accumulated
    
    
    (Effective Portion)Three Months Ended
    
    
    OCI into Income
    
    
    Three Months Ended(Dollars in millions)
    
    March 31, 2009
    
    
    (Effective Portion)
    
    
    March 31, 2009Derivatives designated as
hedging instruments under
SFAS 133Commodity futures contracts
    
    $
    1.9
    
    
    Cost of sales
    
    
    ($2.4
    )Foreign currency derivatives
    
    
    4.7
    
    
    Cost of sales
    
    
    (6.6
    )Total
    
    $
    6.8
    
    
    
    
    
    
    
    ($9.0
    )
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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
       Business combinations / Noncontrolling interests in consolidated financial statements
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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
 Recognition and Presentation of Other-Than-Temporary Impairments
  Interim Disclosures about Fair Value of Financial Instruments
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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
 Executive Summary
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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
 Results of Operations
  Three Months Ended March 31,
 (dollars in millions)
    
    2009
    
    
    %
    
    
    2008
    
    
    %Net sales
    
    $
    148.1
    
    
    
    100.0
    %
    
    $
    275.2
    
    
    
    100.0
    %Cost of sales
    
    
    138.8
    
    
    
    93.7
    %
    
    
    229.7
    
    
    
    83.5
    %Selling and administrative expenses
    
    
    32.2
    
    
    
    21.7
    %
    
    
    31.6
    
    
    
    11.5
    %Impairments, restructuring charges, and
other items
    
    
    5.9
    
    
    
    4.0
    %
    
    
    0.5
    
    
    
    0.2
    %Operating (loss) income
    
    
    (28.8
    )
    
    
    (19.4
    %)
    
    
    13.4
    
    
    
    4.8
    %Interest expense
    
    
    2.9
    
    
    
    2.0
    %
    
    
    7.3
    
    
    
    2.6
    %Interest income and other, net
    
    
    0.8
    
    
    
    0.5
    %
    
    
    1.8
    
    
    
    0.6
    %(Loss) income from continuing
operations before taxes
    
    
    (30.9
    )
    
    
    (20.9
    %)
    
    
    7.9
    
    
    
    2.8
    %Tax (benefit) expense
    
    
    (6.4
    )
    
    
    (4.3
    %)
    
    
    1.2
    
    
    
    0.4
    %(Loss) income from continuing operations
    
    
    ($24.5
    )
    
    
    (16.5
    %)
    
    $
    6.7
    
    
    
    2.4
    %
 Three Months Ended March 31, 2009 vs. Three Months Ended March 31, 2008
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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
 OTHER MATTERS
    Cash Flow
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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
   Credit Facilities and Cash on Hand
      Accounts Receivable Sales
  Page 32




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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
 Adequacy of Liquidity Sources
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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
    Significant Accounting Policies and Critical Accounting Estimates
  OUTLOOK
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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
  Credit Risk 
   Interest Rate Risk 
 Commodity Price Risk 
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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
  Foreign Currency Exchange Risk 
  Page 39




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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
 Disclosure Controls and Procedures
    Changes In Internal Control Over Financial Reporting
  Limitations On The Effectiveness Of Controls And Procedures
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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
 
 Item1. Legal Proceedings
 Compressor industry antitrust investigation
     Herrick Foundation litigation
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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
 Kahn shareholder lawsuit
  Judicial Restructuring for Brazilian Engine Manufacturing Subsidiary
  Horsepower label litigation
  Other Litigation
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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
  
 Item 6. Exhibits
 (a)
    
    ExhibitNumber
    
    Description31.1
    
    
    Certification of the President and Chief Executive
Officer pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.31.2
    
    
    Certification of the Chief Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    
    Certification of the President and Chief Executive
Officer pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.32.2
    
    
    Certification of the Chief Financial Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
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TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
   TECUMSEH PRODUCTS COMPANY(Registrant)Dated: May 11, 2009
    BY:
    /s/   James S. NicholsonJames S. NicholsonVice President, Treasurer and
Chief Financial Officer (on behalf
of the Registrant and as principal
financial officer) Page 46