##### Table of Contents



UNITED STATES 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, 2007
 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 1-12733
 TA DELAWARE, INC.
  Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    41-1746238
(I.R.S. Employer
Identification No.)27175 Haggerty Road 
Novi, Michigan
(Address of principal executive offices)
    
    48377
(Zip Code)
 (248) 675-6000
 
  þ o
  o o þ
  o þ




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##### 



TA Delaware, Inc.
Form 10-Q
 Table of Contents
 PagePART I. Financial InformationItem 1.
    
    Financial Statements (unaudited):Condensed Consolidated Balance Sheets at March 31, 2007 and December 31, 2006
    
    
    1Condensed Consolidated Statements of Operations for Three Months Ended March 31, 2007 and
2006
    
    
    2Condensed Consolidated Statements of Cash Flows for Three Months Ended March 31, 2007 and
2006
    
    
    3Notes to Condensed Consolidated Financial Statements
    
    
    4Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    27Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    33Item 4.
    
    Controls and Procedures
    
    
    34PART II. Other InformationItem 1.
    
    Legal Proceedings
    
    
    35Item 1A.
    
    Risk Factors
    
    
    35Item 6.
    
    Exhibits
    
    
    35SignaturesCertification of Post-Consummation Trust Administrator Pursuant to Rules 13a-15(e) and 15d-15(e)Certification Pursuant to Section 906Certification of the Post-Consummation Trust Administrator Pursuant to Section 302Certification of the Post-Consummation Trust Administrator Pursuant to Section 906




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##### Table of Contents



PART 1  FINANCIAL INFORMATION
 
 ITEM 1. Financial Statements.
 
 TA DELAWARE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands  unaudited)
 March 31, 2007
    
    
    December 31, 2006ASSETSCurrent assets:Cash and cash equivalents
    
    $
    86,970
    
    
    $
    64,275Accounts receivable
    
    
    374,585
    
    
    
    339,650Inventories
    
    
    108,364
    
    
    
    107,186Prepaid tooling and other
    
    
    98,086
    
    
    
    94,018Assets of discontinued operations
    
    
    391
    
    
    
    24,738Total current assets
    
    
    668,396
    
    
    
    629,867Property, plant and equipment, net
    
    
    933,742
    
    
    
    952,942Investments in joint ventures
    
    
    256,696
    
    
    
    253,170Goodwill
    
    
    171,579
    
    
    
    169,617Other assets, net
    
    
    91,327
    
    
    
    101,398Total assets
    
    $
    2,121,740
    
    
    $
    2,106,994LIABILITIES AND STOCKHOLDERS DEFICITCurrent liabilities not subject to compromise:Current maturities of long-term debt and capital lease obligations
    
    $
    91,640
    
    
    $
    82,849Current portion of debtor-in-possession borrowings
    
    
    653,900
    
    
    
    595,000Accounts payable
    
    
    357,812
    
    
    
    345,296Accrued liabilities
    
    
    157,817
    
    
    
    166,754Liabilities of discontinued operations
    
    
    731
    
    
    
    20,503Total current liabilities
    
    
    1,261,900
    
    
    
    1,210,402Liabilities subject to compromise
    
    
    1,283,031
    
    
    
    1,284,782Non-current liabilities not subject to compromise:Long-term debt, net of current maturities
    
    
    132,085
    
    
    
    133,610Capital lease obligations, net of current maturities
    
    
    29,269
    
    
    
    29,852Other non-current liabilities
    
    
    119,303
    
    
    
    111,020Total non-current liabilities
    
    
    280,657
    
    
    
    274,482Stockholders deficit:Common stock
    
    
    666
    
    
    
    666Additional paid-in-capital
    
    
    682,084
    
    
    
    682,031Accumulated deficit
    
    
    (1,352,639
    )
    
    
    (1,308,906
    )Accumulated other comprehensive income
    
    
    15,365
    
    
    
    12,861Treasury stock
    
    
    (49,324
    )
    
    
    (49,324
    )Total stockholders deficit
    
    
    (703,848
    )
    
    
    (662,672
    )Total liabilities and stockholders deficit
    
    $
    2,121,740
    
    
    $
    2,106,994
  1




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##### Table of Contents



TA DELAWARE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts  unaudited)
 Three Months Ended March 31,2007
    
    
    2006Revenues
    
    $
    618,451
    
    
    $
    670,759Cost of sales
    
    
    584,671
    
    
    
    621,866Gross profit
    
    
    33,780
    
    
    
    48,893Selling, general and administrative expenses
    
    
    31,959
    
    
    
    34,037Restructuring and asset impairment charges, net
    
    
    5,827
    
    
    
    2,522Other operating income
    
    
    
    
    
    
    (520
    )Operating income (loss)
    
    
    (4,006
    )
    
    
    12,854Interest expense (contractual interest of $46,963 in 2007 and $38,557 in 2006)
    
    
    28,514
    
    
    
    20,482Interest income
    
    
    (458
    )
    
    
    (456
    )Chapter 11 and related reorganization items
    
    
    8,975
    
    
    
    11,609Loss before provision for income taxes, equity in earnings of joint
ventures, and minority interest
    
    
    (41,037
    )
    
    
    (18,781
    )Provision (benefit) for income taxes
    
    
    3,388
    
    
    
    (2,155
    )Loss before equity in earnings of joint ventures, and minority interest
    
    
    (44,425
    )
    
    
    (16,626
    )Equity in earnings of joint ventures, net of tax
    
    
    3,526
    
    
    
    6,684Minority interest, net of tax
    
    
    (2,189
    )
    
    
    (966
    )Loss from continuing operations
    
    
    (43,088
    )
    
    
    (10,908
    )Income (loss) from discontinued operations
    
    
    (306
    )
    
    
    571Net loss
    
    $
    (43,394
    )
    
    $
    (10,337
    )Basic and diluted loss per share:Loss from continuing operations
    
    $
    (0.73
    )
    
    $
    (0.19
    )Income (loss) from discontinued operations
    
    
    (0.01
    )
    
    
    0.01Net loss
    
    $
    (0.74
    )
    
    $
    (0.18
    )Weighted average basic and diluted shares outstanding
    
    
    58,691
    
    
    
    58,654
  2




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##### Table of Contents



TA DELAWARE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands  unaudited)
 Three Months Ended March 31,2007
    
    
    2006OPERATING ACTIVITIES:Net loss
    
    $
    (43,394
    )
    
    $
    (10,337
    )Adjustments to reconcile net loss to net cash provided by (used in) operating
activities:Non-cash Chapter 11 and related reorganization items, net
    
    
    3,562
    
    
    
    6,016Non-cash restructuring and impairment, net
    
    
    2,734
    
    
    
    679Depreciation
    
    
    40,847
    
    
    
    41,387Deferred income tax provision (benefit)
    
    
    6,769
    
    
    
    (7,685
    )Equity in earnings of joint ventures, net
    
    
    (3,526
    )
    
    
    (6,684
    )Non-cash minority interest
    
    
    326
    
    
    
    371Change in working capital and other operating items
    
    
    (32,404
    )
    
    
    (20,440
    )Net cash provided by (used in) operating activities
    
    
    (25,086
    )
    
    
    3,307INVESTING ACTIVITIES:Cash disbursed for purchases of property, plant and equipment
    
    
    (18,576
    )
    
    
    (28,860
    )Cash proceeds from asset disposal
    
    
    
    
    
    
    32,664Net cash provided by (used in) investing activities
    
    
    (18,576
    )
    
    
    3,804FINANCING ACTIVITIES:Proceeds from borrowings
    
    
    14,216
    
    
    
    11,139Repayments of borrowings
    
    
    (6,759
    )
    
    
    (40,830
    )Proceeds from DIP credit facility
    
    
    292,000
    
    
    
    216,000Repayments of DIP credit facility
    
    
    (233,100
    )
    
    
    (135,000
    )Net cash provided by financing activities
    
    
    66,357
    
    
    
    51,309NET CHANGE IN CASH AND CASH EQUIVALENTS
    
    
    22,695
    
    
    
    58,420Cash and cash equivalents, beginning of period
    
    
    64,275
    
    
    
    65,791CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    86,970
    
    
    $
    124,211Supplemental Cash Flow Information:Interest paid, net of amounts capitalized
    
    $
    25,272
    
    
    $
    17,663Income taxes paid (refunded)
    
    $
    3,022
    
    
    $
    1,043Reorganization payments
    
    $
    5,413
    
    
    $
    5,605Non-cash investing activities:Net decrease in liabilities for purchases of property, plant and equipment
    
    $
    (3,065
    )
    
    $
    (4,122
    )
  3




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##### Table of Contents



TA DELAWARE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 Note 1. Basis of Presentation
   Financial
Reporting by Entities in Reorganization Under the Bankruptcy Code
  Change in Accounting Principle
 Employers Accounting for Defined
Pension and Other Postretirement Plans
 Accounting for Uncertainty in Income Taxes Accounting
for Income Taxes
 4




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##### Table of Contents



Note 2. Chapter 11 Reorganization Proceedings
    Financial Statement Classification
    March 31,
    
    
    December 31,2007
    
    
    2006Debt:5.75% Convertible senior debentures
    
    $
    124,999
    
    
    $
    124,9996.75% Subordinated debentures
    
    
    258,750
    
    
    
    258,7509.25% Senior Euro notes
    
    
    200,310
    
    
    
    197,94012% Senior notes
    
    
    258,000
    
    
    
    258,000Total debt
    
    
    842,059
    
    
    
    839,689Pension and other post-retirement benefits
    
    
    143,081
    
    
    
    142,841Pre-petition accounts payable and accruals
    
    
    160,842
    
    
    
    165,203Accrued interest on debt subject to compromise
    
    
    21,343
    
    
    
    21,343Executory contracts
    
    
    115,706
    
    
    
    115,706Total liabilities subject to compromise
    
    $
    1,283,031
    
    
    $
    1,284,782
 5




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##### Table of Contents



Three Months Ended March 31,2007
    
    
    2006Professional fees directly related to the filing
    
    $
    9,801
    
    
    $
    8,580Key employee retention costs
    
    
    
    
    
    
    2,961Estimated executory contract rejection damages
    
    
    
    
    
    
    68Other reversals directly attributable to the Companys reorganization
    
    
    (826
    )
    
    
    Total
    
    $
    8,975
    
    
    $
    11,609
  6




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##### Table of Contents



Debtors Financial Statements
  Debtors Condensed Combined Balance Sheet
Debtors- in-Possession
 March 31,
    
    
    December 31,2007
    
    
    2006ASSETSCurrent assets:Cash and cash equivalents
    
    $
    7,916
    
    
    $
    5,705Accounts receivable
    
    
    115,783
    
    
    
    81,713Inventories
    
    
    43,132
    
    
    
    43,438Prepaid tooling and other
    
    
    26,195
    
    
    
    23,408Assets of discontinued operations
    
    
    391
    
    
    
    24,738Total current assets
    
    
    193,417
    
    
    
    179,002Property, plant and equipment, net
    
    
    462,472
    
    
    
    474,897Investments in and advances to non-debtor subsidiaries
    
    
    882,135
    
    
    
    868,374Other assets, net
    
    
    22,314
    
    
    
    32,360Total assets
    
    $
    1,560,338
    
    
    $
    1,554,633LIABILITIES AND STOCKHOLDERS DEFICITCurrent liabilities not subject to compromise:Current maturities of long-term debt and capital lease obligations
    
    $
    3
    
    
    $
    4Current portion of debtor-in-possession borrowings
    
    
    653,900
    
    
    
    595,000Accounts payable
    
    
    112,348
    
    
    
    101,804Accrued liabilities
    
    
    91,471
    
    
    
    92,322Liabilities of discontinued operations
    
    
    731
    
    
    
    20,503Total current liabilities
    
    
    858,453
    
    
    
    809,633Liabilities subject to compromise
    
    
    1,299,394
    
    
    
    1,301,145Non-current liabilities not subject to compromise:Long-term debt, net of current maturities
    
    
    84,751
    
    
    
    84,751Other non-current liabilities
    
    
    21,588
    
    
    
    21,776Total non-current liabilities
    
    
    106,339
    
    
    
    106,527Total stockholders deficit
    
    
    (703,848
    )
    
    
    (662,672
    )Total liabilities and stockholders deficit
    
    $
    1,560,338
    
    
    $
    1,554,633
 7




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##### Table of Contents



Debtors Condensed Combined Statements of Operations
Debtors- in-Possession
 Three Months Ended March 31,2007
    
    
    2006Revenues
    
    $
    262,976
    
    
    $
    332,689Cost of sales
    
    
    260,678
    
    
    
    318,192Gross profit
    
    
    2,298
    
    
    
    14,497Selling, general and administrative expenses
    
    
    14,626
    
    
    
    21,258Restructuring and asset impairment charges, net
    
    
    5,117
    
    
    
    2,411Other operating (income) loss
    
    
    1,150
    
    
    
    (1,305
    )Operating loss
    
    
    (18,595
    )
    
    
    (7,867
    )Interest expense
    
    
    25,948
    
    
    
    17,696Interest income
    
    
    (437
    )
    
    
    (321
    )Inter-company interest income
    
    
    (8,026
    )
    
    
    (6,094
    )Chapter 11 and related reorganization items
    
    
    8,975
    
    
    
    11,609Loss before provision for income taxes, equity in
earnings of joint ventures and equity in earnings
from non-Debtor subsidiaries
    
    
    (45,055
    )
    
    
    (30,757
    )Provision (benefit) for income taxes
    
    
    (619
    )
    
    
    938Loss before equity in earnings of joint ventures
and equity in earnings of non-Debtor subsidiaries
    
    
    (44,436
    )
    
    
    (31,695
    )Equity in earnings (loss) of joint ventures, net of tax
    
    
    (51
    )
    
    
    68Equity in earnings of non-Debtor subsidiaries
    
    
    1,399
    
    
    
    20,719Loss from continuing operations
    
    
    (43,088
    )
    
    
    (10,908
    )Income (loss) from discontinued operations
    
    
    (306
    )
    
    
    571Net loss
    
    $
    (43,394
    )
    
    $
    (10,337
    )
 8




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##### Table of Contents



Debtors Condensed Combined Statements of Cash Flows
Debtors- in-Possession
(Amounts in thousands)
 Three Months Ended March 31,2007
    
    
    2006OPERATING ACTIVITIES:Net loss
    
    $
    (43,394
    )
    
    $
    (10,337
    )Adjustments required to reconcile net loss to net cash used in operating activities:Non-cash Chapter 11 and related reorganization items, net
    
    
    3,562
    
    
    
    6,016Non-cash restructuring and impairment, net
    
    
    2,734
    
    
    
    679Depreciation
    
    
    23,328
    
    
    
    24,202Equity in earnings of joint ventures and subsidiaries, net
    
    
    (1,348
    )
    
    
    (20,787
    )Change in working capital and other operating items
    
    
    (33,876
    )
    
    
    (13,804
    )Net cash used in operating activities
    
    
    (48,994
    )
    
    
    (14,031
    )INVESTING ACTIVITIES:Cash disbursed for purchases of property, plant and equipment
    
    
    (7,695
    )
    
    
    (15,757
    )Net cash used in investing activities
    
    
    (7,695
    )
    
    
    (15,757
    )FINANCING ACTIVITIES:Repayments of borrowings
    
    
    
    
    
    
    (3
    )Proceeds from DIP credit facility
    
    
    292,000
    
    
    
    216,000Repayments of DIP credit facility
    
    
    (233,100
    )
    
    
    (135,000
    )Net cash provided by financing activities
    
    
    58,900
    
    
    
    80,997NET CHANGE IN CASH AND CASH EQUIVALENTS
    
    
    2,211
    
    
    
    51,209Cash and cash equivalents, beginning of period
    
    
    5,705
    
    
    
    858CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    7,916
    
    
    $
    52,067
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##### Table of Contents



Note 3. Discontinued Operations
 Accounting for the Impairment or Disposal of Long-Lived Assets,
  March 31,
    
    
    December 31,2007
    
    
    2006ASSETSCurrent assets:Accounts receivable
    
    $
    345
    
    
    $
    24,692Prepaid tooling and other
    
    
    46
    
    
    
    46Total current assets
    
    $
    391
    
    
    $
    24,738LIABILITIESCurrent liabilitiesAccounts payable
    
    $
    731
    
    
    $
    16,013Accrued liabilities
    
    
    
    
    
    
    4,490Total current liabilities
    
    $
    731
    
    
    $
    20,503
  March 31,
    
    
    March 31,2007
    
    
    2006Revenues
    
    $
    
    
    
    $
    98,961Cost of sales
    
    
    42
    
    
    
    98,066Gross profit
    
    
    (42
    )
    
    
    895Other expense
    
    
    264
    
    
    
    Operating income (loss)
    
    
    (306
    )
    
    
    895Interest expense
    
    
    
    
    
    
    324Net income (loss)
    
    $
    (306
    )
    
    $
    571
 Allocation of Interest to Discontinued
Operations,
 Note 4. New Accounting Pronouncements Not Yet Adopted
 Fair Value Measurements
 The Fair Value Option for Financial Assets and Financial Liabilities  including an
Amendment to FASB Statement No. 115
 10




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##### Table of Contents



Accounting for
Certain Investments in Debt and Equity Securities,
 Note 5. Inventories
  March 31,
    
    
    December 31,2007
    
    
    2006Raw materials
    
    $
    46,764
    
    
    $
    49,657Work in process
    
    
    27,555
    
    
    
    26,127Finished goods
    
    
    34,045
    
    
    
    31,402$
    108,364
    
    
    $
    107,186
 Note 6. Goodwill
  Balance at December 31, 2006
    
    $
    169,617Currency translation adjustment
    
    
    1,962Balance at March 31, 2007
    
    $
    171,579
 Note 7. Investments in Joint Ventures
  Note 8. Restructuring and Asset Impairment Charges
  11




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##### Table of Contents



Severance and
    
    
    Lease andAsset
    
    
    Outplacement
    
    
    Other ExitImpairments
    
    
    Costs
    
    
    Costs
    
    
    TotalBalance at December 31, 2006
    
    $
    
    
    
    $
    9,423
    
    
    $
    
    
    
    $
    9,423Provision
    
    
    290
    
    
    
    2,992
    
    
    
    5,321
    
    
    
    8,603Cash usage
    
    
    
    
    
    
    (6,042
    )
    
    
    (2,877
    )
    
    
    (8,919
    )Non-cash charges
    
    
    (290
    )
    
    
    
    
    
    
    (2,444
    )
    
    
    (2,734
    )Balance at March 31, 2007
    
    $
    
    
    
    $
    6,373
    
    
    $
    
    
    
    $
    6,373
   Restructuring and related asset impairments, net
    
    $
    8,603Revision of estimate
    
    
    Other asset impairments, net
    
    
    (2,776
    )Total
    
    $
    5,827
  Note 9. Debt
 Chapter 11 Impact
     DIP Financing
   12




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Back-Stop Agreement
   Debt Classified as Not Subject to Compromise
  13




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##### Table of Contents



Note 10. Comprehensive Loss
  For the three months endedMarch 31,2007
    
    
    2006Net loss
    
    $
    (43,394
    )
    
    $
    (10,337
    )Change in cumulative translation adjustment
    
    
    2,504
    
    
    
    7,332Comprehensive loss
    
    $
    (40,890
    )
    
    $
    (3,005
    )
 Note 11. Income Taxes
    Note 12. Stockholders Deficit
 Loss Per Share
   Stock-Based Compensation
 Stock Option Plans
  14




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##### Table of Contents



WeightedShares
    
    
    
    
    
    AverageUnder
    
    
    
    
    
    ExerciseOption
    
    Exercise Price
    
    Price
    
    ExercisableOutstanding, December 31, 2006
    
    
    91,500
    
    
    $
    17.13  $22.97
    
    
    $
    18.23
    
    
    
    91,500Forfeited
    
    
    (1,000
    )
    
    
    19.25
    
    
    
    19.25Expired
    
    
    (2,000
    )
    
    
    18.94
    
    
    
    18.94Outstanding, March 31, 2007
    
    
    88,500
    
    
    
    17.13  22.97
    
    
    
    18.21
    
    
    
    88,500
   Number
    
    Options Outstanding
    
    Options ExercisableRange of
    
    Outstanding
    
    Weighted-Average
    
    Weighted-
    
    Number
    
    Weighted-Exercisable
    
    At
    
    Remaining
    
    Average
    
    Exercisable
    
    AverageOptions
    
    3/31/07
    
    Contractual Life
    
    Exercise Price
    
    3/31/07
    
    Exercise Price$17.13  $22.97
    
    
    88,500
    
    
    1.44 yrs.
    
    $
    18.21
    
    
    
    88,500
    
    
    $
    18.21
 Incentive Plan
 
 WeightedWeighted
    
    Average FairShares
    
    
    
    
    
    Average
    
    Value ofUnder
    
    
    
    
    
    Exercise
    
    OptionsOption
    
    Exercise Price
    
    Price
    
    Granted
    
    ExercisableOutstanding, December 31, 2006
    
    
    1,388,880
    
    
    $
    1.99  $26.81
    
    
    $
    9.88
    
    
    $
    5.52
    
    
    
    1,388,880Forfeited
    
    
    (78,300
    )
    
    
    3.16  13.75
    
    
    
    10.96Outstanding, March 31, 2007
    
    
    1,310,580
    
    
    
    1.99  26.81
    
    
    
    9.81
    
    
    
    5.45
    
    
    
    1,310,580
 15




---



##### Table of Contents



Number
    
    Options Outstanding
    
    Options ExercisableRange of
    
    Outstanding
    
    Weighted-Average
    
    
    
    
    
    NumberExercisable
    
    At
    
    Remaining
    
    Weighted-Average
    
    Exercisable
    
    Weighted-AverageOptions
    
    3/31/07
    
    Contractual Life
    
    Exercise Price
    
    3/31/07
    
    Exercise Price$1.99  $7.08
    
    
    592,000
    
    
    6.93 yrs.
    
    $
    3.40
    
    
    
    592,000
    
    
    $
    3.4011.33  15.56
    
    
    597,090
    
    
    3.95 yrs.
    
    
    12.71
    
    
    
    597,090
    
    
    
    12.7126.81
    
    
    121,490
    
    
    2.06 yrs.
    
    
    26.81
    
    
    
    121,490
    
    
    
    26.811,310,580
    
    
    5.12 yrs.
    
    
    9.81
    
    
    
    1,310,580
    
    
    
    9.81
 Director Option Plan
  WeightedWeighted
    
    Average FairShares
    
    
    
    
    
    Average
    
    Value ofUnder
    
    
    
    
    
    Exercise
    
    OptionsOption
    
    Exercise Price
    
    Price
    
    Granted
    
    ExercisableOutstanding, December 31, 2006
    
    
    85,200
    
    
    $
    18.94  $22.97
    
    
    $
    19.63
    
    
    $
    10.33
    
    
    
    85,200Expired
    
    
    (40,000
    )
    
    
    18.94
    
    
    
    18.94Outstanding, March 31, 2007
    
    
    45,200
    
    
    
    19.25  22.97
    
    
    
    20.24
    
    
    
    10.27
    
    
    
    45,200
  Options Outstanding
    
    Options ExercisableRange of
    
    Number
    
    Weighted-Average
    
    
    
    NumberExercisable
    
    Outstanding
    
    Remaining
    
    Weighted-Average
    
    Exercisable
    
    Weighted-AverageOptions
    
    At 3/31/07
    
    Contractual Life
    
    Exercise Price
    
    3/31/07
    
    Exercise Price$19.25$22.97
    
    45,200
    
    1.65 yrs.
    
    $20.24
    
    45,200
    
    $20.24
 Note 13. Retirement Plans
  Pension Benefits
    
    
    Other Benefits2007
    
    
    2006
    
    
    2007
    
    
    2006Service cost
    
    $
    29
    
    
    $
    1,065
    
    
    $
    
    
    
    $
    32Interest cost
    
    
    3,581
    
    
    
    3,771
    
    
    
    1,212
    
    
    
    2,049Expected return on plan assets
    
    
    (3,425
    )
    
    
    (3,238
    )
    
    
    (134
    )
    
    
    Amortization of prior service cost
    
    
    75
    
    
    
    315
    
    
    
    (660
    )
    
    
    Amortization of net losses
    
    
    515
    
    
    
    764
    
    
    
    982
    
    
    
    2,147Net periodic benefit cost
    
    $
    775
    
    
    $
    2,677
    
    
    $
    1,400
    
    
    $
    4,228
 16




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##### Table of Contents



Employers Accounting for
Postretirement Benefits other than Pensions,
 17




---



##### Table of Contents



Note 14. Segment Information
  NorthAmerica
    
    
    International
    
    
    TotalThree months ended March 31, 2007:Revenues
    
    $
    263,096
    
    
    $
    355,355
    
    
    $
    618,451Restructuring and asset impairment charges
    
    
    5,660
    
    
    
    167
    
    
    
    5,827Operating income (loss)
    
    
    (18,150
    )
    
    
    14,144
    
    
    
    (4,006
    )Total assets
    
    $
    938,187
    
    
    $
    1,183,553
    
    
    $
    2,121,740Three months ended March 31, 2006:Revenues
    
    $
    342,426
    
    
    $
    328,333
    
    
    $
    670,759Restructuring and asset impairment charges
    
    
    2,411
    
    
    
    111
    
    
    
    2,522Operating income (loss)
    
    
    (9,751
    )
    
    
    22,605
    
    
    
    12,854Total assets
    
    $
    1,228,272
    
    
    $
    1,142,666
    
    
    $
    2,370,938
  Note 15. Commitments and Contingencies
 Key Employee Retention Plan Agreements
   Environmental Matters
  18




---



##### Table of Contents



Litigation
        19




---



##### Table of Contents



Note 16. Subsequent Events
       Note 17. Consolidating Guarantor and Non-Guarantor Financial Information
  20




---



##### Table of Contents



TA DELAWARE, INC.  Consolidating Balance Sheet at March 31, 2007  (Amounts in thousands)
 Non-Guarantor
    
    
    Non-GuarantorR.J. Tower
    
    
    Parent
    
    
    Guarantor
    
    
    Restricted
    
    
    UnrestrictedCorporation
    
    
    Guarantor
    
    
    Companies
    
    
    Companies
    
    
    Companies
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    7,866
    
    
    $
    
    
    
    $
    50
    
    
    $
    78,554
    
    
    $
    500
    
    
    $
    
    
    
    $
    86,970Accounts receivable
    
    
    2,142
    
    
    
    1,951
    
    
    
    111,690
    
    
    
    238,837
    
    
    
    19,965
    
    
    
    
    
    
    
    374,585Inventories
    
    
    
    
    
    
    
    
    
    
    43,132
    
    
    
    54,216
    
    
    
    11,016
    
    
    
    
    
    
    
    108,364Prepaid tooling and other
    
    
    2,233
    
    
    
    
    
    
    
    23,962
    
    
    
    43,274
    
    
    
    28,617
    
    
    
    
    
    
    
    98,086Assets of discontinued operations
    
    
    
    
    
    
    
    
    
    
    391
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    391Total current assets
    
    
    12,241
    
    
    
    1,951
    
    
    
    179,225
    
    
    
    414,881
    
    
    
    60,098
    
    
    
    
    
    
    
    668,396Property, plant and equipment, net
    
    
    357
    
    
    
    
    
    
    
    462,115
    
    
    
    317,429
    
    
    
    153,841
    
    
    
    
    
    
    
    933,742Investments in and advances to (from) affiliates
    
    
    512,346
    
    
    
    (314,211
    )
    
    
    (848,562
    )
    
    
    9,985
    
    
    
    (4,805
    )
    
    
    901,943
    
    
    
    256,696Goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    171,579
    
    
    
    
    
    
    
    
    
    
    
    171,579Other assets, net
    
    
    6,503
    
    
    
    
    
    
    
    15,811
    
    
    
    53,716
    
    
    
    15,297
    
    
    
    
    
    
    
    91,327$
    531,447
    
    
    $
    (312,260
    )
    
    $
    (191,411
    )
    
    $
    967,590
    
    
    $
    224,431
    
    
    $
    901,943
    
    
    $
    2,121,740Liabilities and Stockholders Investment (Deficit)Current liabilities not subject to compromise:Current maturities of long-term debt and capital lease obligations
    
    $
    
    
    
    $
    
    
    
    $
    3
    
    
    $
    13,299
    
    
    $
    78,338
    
    
    $
    
    
    
    $
    91,640Current portion debtor-in-possession borrowings
    
    
    653,900
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    653,900Accounts payable
    
    
    13,419
    
    
    
    
    
    
    
    98,929
    
    
    
    195,738
    
    
    
    49,726
    
    
    
    
    
    
    
    357,812Accrued liabilities
    
    
    29,533
    
    
    
    
    
    
    
    61,938
    
    
    
    59,283
    
    
    
    7,063
    
    
    
    
    
    
    
    157,817Liabilities of discontinued operations
    
    
    
    
    
    
    
    
    
    
    731
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    731Total current liabilities
    
    
    696,852
    
    
    
    
    
    
    
    161,601
    
    
    
    268,320
    
    
    
    135,127
    
    
    
    
    
    
    
    1,261,900Liabilities subject to compromise
    
    
    626,840
    
    
    
    391,588
    
    
    
    280,966
    
    
    
    
    
    
    
    
    
    
    
    (16,363
    )
    
    
    1,283,031Non-current liabilities not subject to compromise:Long-term debt, net of current maturities
    
    
    40,986
    
    
    
    
    
    
    
    43,765
    
    
    
    3,931
    
    
    
    43,403
    
    
    
    
    
    
    
    132,085Obligations under capital leases, net of current maturities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,269
    
    
    
    
    
    
    
    
    
    
    
    29,269Other non-current liabilities
    
    
    25
    
    
    
    
    
    
    
    21,563
    
    
    
    86,214
    
    
    
    11,501
    
    
    
    
    
    
    
    119,303Total non-current liabilities
    
    
    41,011
    
    
    
    
    
    
    
    65,328
    
    
    
    119,414
    
    
    
    54,904
    
    
    
    
    
    
    
    280,657Stockholders investment (deficit)
    
    
    (833,256
    )
    
    
    (703,848
    )
    
    
    (699,306
    )
    
    
    579,856
    
    
    
    34,400
    
    
    
    918,306
    
    
    
    (703,848
    )$
    531,447
    
    
    $
    (312,260
    )
    
    $
    (191,411
    )
    
    $
    967,590
    
    
    $
    224,431
    
    
    $
    901,943
    
    
    $
    2,121,740
 21




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##### Table of Contents



TA DELAWARE, INC.  Consolidating Statement of Operations for the Three Months Ended March 31, 2007  (Amounts in thousands)
 Non-Guarantor
    
    
    Non-GuarantorR.J. Tower
    
    
    Parent
    
    
    Guarantor
    
    
    Restricted
    
    
    UnrestrictedCorporation
    
    
    Guarantor
    
    
    Companies
    
    
    Companies
    
    
    Companies
    
    
    Eliminations
    
    
    ConsolidatedRevenues
    
    $
    
    
    
    $
    
    
    
    $
    262,976
    
    
    $
    285,059
    
    
    $
    70,416
    
    
    $
    
    
    
    $
    618,451Cost of sales
    
    
    (539
    )
    
    
    
    
    
    
    261,217
    
    
    
    255,336
    
    
    
    68,657
    
    
    
    
    
    
    
    584,671Gross profit
    
    
    539
    
    
    
    
    
    
    
    1,759
    
    
    
    29,723
    
    
    
    1,759
    
    
    
    
    
    
    
    33,780Selling, general and administrative expenses
    
    
    (7,013
    )
    
    
    
    
    
    
    21,639
    
    
    
    14,347
    
    
    
    2,986
    
    
    
    
    
    
    
    31,959Restructuring and asset impairment charges, net
    
    
    476
    
    
    
    (2,440
    )
    
    
    7,081
    
    
    
    710
    
    
    
    
    
    
    
    
    
    
    
    5,827Other operating expense/(income)
    
    
    (3,605
    )
    
    
    
    
    
    
    4,755
    
    
    
    579
    
    
    
    (1,729
    )
    
    
    
    
    
    
    Operating income (loss)
    
    
    10,681
    
    
    
    2,440
    
    
    
    (31,716
    )
    
    
    14,087
    
    
    
    502
    
    
    
    
    
    
    
    (4,006
    )Interest expense
    
    
    25,149
    
    
    
    
    
    
    
    799
    
    
    
    474
    
    
    
    2,092
    
    
    
    
    
    
    
    28,514Interest income
    
    
    (437
    )
    
    
    
    
    
    
    
    
    
    
    72
    
    
    
    (93
    )
    
    
    
    
    
    
    (458
    )Intercompany interest expense/(income)
    
    
    (8,026
    )
    
    
    
    
    
    
    
    
    
    
    8,369
    
    
    
    (343
    )
    
    
    
    
    
    
    Chapter 11 and related reorganization items
    
    
    8,975
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,975Income (loss) before provision for income
taxes, equity in earnings of joint ventures,
and minority interest
    
    
    (14,980
    )
    
    
    2,440
    
    
    
    (32,515
    )
    
    
    5,172
    
    
    
    (1,154
    )
    
    
    
    
    
    
    (41,037
    )Provision (benefit) for income taxes
    
    
    (619
    )
    
    
    
    
    
    
    
    
    
    
    4,324
    
    
    
    (317
    )
    
    
    
    
    
    
    3,388Income (loss) before equity in earnings of
joint ventures and subsidiaries and minority
interest
    
    
    (14,361
    )
    
    
    2,440
    
    
    
    (32,515
    )
    
    
    848
    
    
    
    (837
    )
    
    
    
    
    
    
    (44,425
    )Equity (losses) earnings in joint ventures
and subsidiaries, net
    
    
    (31,473
    )
    
    
    (45,834
    )
    
    
    
    
    
    
    3,577
    
    
    
    
    
    
    
    77,256
    
    
    
    3,526Minority interest, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,189
    )
    
    
    
    
    
    
    
    
    
    
    (2,189
    )Income (loss) from continuing operations
    
    
    (45,834
    )
    
    
    (43,394
    )
    
    
    (32,515
    )
    
    
    2,236
    
    
    
    (837
    )
    
    
    77,256
    
    
    
    (43,088
    )Loss from discontinued operations
    
    
    
    
    
    
    
    
    
    
    (306
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (306
    )Net income (loss)
    
    $
    (45,834
    )
    
    $
    (43,394
    )
    
    $
    (32,821
    )
    
    $
    2,236
    
    
    $
    (837
    )
    
    $
    77,256
    
    
    $
    (43,394
    )
 22




---



##### Table of Contents



TA DELAWARE, INC.
 Consolidating Statement of Cash Flows for the Three Months Ended March 31, 2007
 (Amounts in thousands  unaudited)
 Non-Guarantor
    
    
    Non-GuarantorR. J. Tower
    
    
    Parent
    
    
    Guarantor
    
    
    Restricted
    
    
    UnrestrictedCorporation
    
    
    Guarantor
    
    
    Companies
    
    
    Companies
    
    
    Companies
    
    
    Eliminations
    
    
    ConsolidatedOPERATING ACTIVITIES:Net income (loss)
    
    $
    (45,834
    )
    
    $
    (43,394
    )
    
    $
    (32,821
    )
    
    $
    2,236
    
    
    $
    (837
    )
    
    $
    77,256
    
    
    $
    (43,394
    )Adjustments required to reconcile net income (loss) to net cash
provided by (used in) operating activitiesNon-cash chapter 11 and related reorganization items, net
    
    
    3,562
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,562Non-cash restructuring and impairment, net
    
    
    
    
    
    
    
    
    
    
    2,734
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,734Depreciation
    
    
    24
    
    
    
    
    
    
    
    23,304
    
    
    
    11,921
    
    
    
    5,598
    
    
    
    
    
    
    
    40,847Deferred income tax provision (benefit)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,520
    
    
    
    249
    
    
    
    
    
    
    
    6,769Equity in earnings (losses) of joint ventures and subsidiaries, net
    
    
    31,473
    
    
    
    45,834
    
    
    
    
    
    
    
    (3,577
    )
    
    
    
    
    
    
    (77,256
    )
    
    
    (3,526
    )Non-cash minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    326
    
    
    
    
    
    
    
    
    
    
    
    326Changes in working capital and other operating items
    
    
    (45,950
    )
    
    
    (2,440
    )
    
    
    14,514
    
    
    
    6,965
    
    
    
    (5,493
    )
    
    
    
    
    
    
    (32,404
    )Net cash provided by (used in) operating activities
    
    
    (56,725
    )
    
    
    
    
    
    
    7,731
    
    
    
    24,391
    
    
    
    (483
    )
    
    
    
    
    
    
    (25,086
    )INVESTING ACTIVITIES:Cash disbursed for purchases of property, plant and equipment
    
    
    
    
    
    
    
    
    
    
    (7,695
    )
    
    
    (6,040
    )
    
    
    (4,841
    )
    
    
    
    
    
    
    (18,576
    )Cash proceeds from asset disposal
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net cash used in investing activities
    
    
    
    
    
    
    
    
    
    
    (7,695
    )
    
    
    (6,040
    )
    
    
    (4,841
    )
    
    
    
    
    
    
    (18,576
    )FINANCING ACTIVITIES:Proceeds from borrowings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,338
    
    
    
    8,878
    
    
    
    
    
    
    
    14,216Repayments of borrowings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,555
    )
    
    
    (3,204
    )
    
    
    
    
    
    
    (6,759
    )Proceeds from DIP credit facility
    
    
    292,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    292,000Repayments of DIP credit facility borrowings
    
    
    (233,100
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (233,100
    )Net cash provided by (used in) financing activities
    
    
    58,900
    
    
    
    
    
    
    
    
    
    
    
    1,783
    
    
    
    5,674
    
    
    
    
    
    
    
    66,357NET CHANGE IN CASH AND CASH EQUIVALENTS
    
    
    2,175
    
    
    
    
    
    
    
    36
    
    
    
    20,134
    
    
    
    350
    
    
    
    
    
    
    
    22,695CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    5,691
    
    
    
    
    
    
    
    14
    
    
    
    58,420
    
    
    
    150
    
    
    
    
    
    
    
    64,275CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    7,866
    
    
    $
    
    
    
    $
    50
    
    
    $
    78,554
    
    
    $
    500
    
    
    $
    
    
    
    $
    86,970
 23




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##### Table of Contents



TA DELAWARE, INC.
 Consolidating Balance Sheet at December 31, 2006
 (Amounts in thousands)
 Non-GuarantorR.J. Tower
    
    
    Parent
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    UnrestrictedCorporation
    
    
    Guarantor
    
    
    Companies
    
    
    Restricted Companies
    
    
    Companies
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    5,691
    
    
    $
    
    
    
    $
    14
    
    
    $
    58,420
    
    
    $
    150
    
    
    $
    
    
    
    $
    64,275Accounts receivable
    
    
    2,072
    
    
    
    2,812
    
    
    
    76,829
    
    
    
    234,137
    
    
    
    23,800
    
    
    
    
    
    
    
    339,650Inventories
    
    
    
    
    
    
    
    
    
    
    43,438
    
    
    
    53,810
    
    
    
    9,938
    
    
    
    
    
    
    
    107,186Prepaid tooling and other
    
    
    2,929
    
    
    
    
    
    
    
    20,479
    
    
    
    43,069
    
    
    
    27,541
    
    
    
    
    
    
    
    94,018Assets of discontinued operations
    
    
    
    
    
    
    
    
    
    
    24,738
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,738Total current assets
    
    
    10,692
    
    
    
    2,812
    
    
    
    165,498
    
    
    
    389,436
    
    
    
    61,429
    
    
    
    
    
    
    
    629,867Property, plant and equipment, net
    
    
    381
    
    
    
    
    
    
    
    474,516
    
    
    
    317,585
    
    
    
    160,460
    
    
    
    
    
    
    
    952,942Investments in and advances to (from) affiliates
    
    
    493,126
    
    
    
    (273,896
    )
    
    
    (808,881
    )
    
    
    20,898
    
    
    
    (5,028
    )
    
    
    826,951
    
    
    
    253,170Goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    169,617
    
    
    
    
    
    
    
    
    
    
    
    169,617Other assets, net
    
    
    9,357
    
    
    
    
    
    
    
    23,003
    
    
    
    53,654
    
    
    
    15,384
    
    
    
    
    
    
    
    101,398$
    513,556
    
    
    $
    (271,084
    )
    
    $
    (145,864
    )
    
    $
    951,190
    
    
    $
    232,245
    
    
    $
    826,951
    
    
    $
    2,106,994Liabilities and Stockholders Investment (Deficit)Current liabilities not subject to compromise:Current maturities of long-term debt and capital lease obligations
    
    $
    
    
    
    $
    
    
    
    $
    4
    
    
    $
    10,261
    
    
    $
    72,584
    
    
    $
    
    
    
    $
    82,849Current portion debtor-in-possession borrowings
    
    
    595,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    595,000Accounts payable
    
    
    11,670
    
    
    
    
    
    
    
    90,134
    
    
    
    182,203
    
    
    
    61,289
    
    
    
    
    
    
    
    345,296Accrued liabilities
    
    
    32,647
    
    
    
    
    
    
    
    59,675
    
    
    
    67,768
    
    
    
    6,664
    
    
    
    
    
    
    
    166,754Liabilities of discontinued operations
    
    
    
    
    
    
    
    
    
    
    20,503
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,503Total current liabilities
    
    
    639,317
    
    
    
    
    
    
    
    170,316
    
    
    
    260,232
    
    
    
    140,537
    
    
    
    
    
    
    
    1,210,402Liabilities subject to compromise
    
    
    624,238
    
    
    
    391,588
    
    
    
    285,319
    
    
    
    
    
    
    
    
    
    
    
    (16,363
    )
    
    
    1,284,782Non-current liabilities not subject to compromise:Long-term debt, net of current maturities
    
    
    40,986
    
    
    
    
    
    
    
    43,765
    
    
    
    4,023
    
    
    
    44,836
    
    
    
    
    
    
    
    133,610Obligations under capital leases, net of current maturities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,852
    
    
    
    
    
    
    
    
    
    
    
    29,852Other non-current liabilities
    
    
    559
    
    
    
    
    
    
    
    21,217
    
    
    
    78,138
    
    
    
    11,106
    
    
    
    
    
    
    
    111,020Total non-current liabilities
    
    
    41,545
    
    
    
    
    
    
    
    64,982
    
    
    
    112,013
    
    
    
    55,942
    
    
    
    
    
    
    
    274,482Stockholders investment (deficit)
    
    
    (791,544
    )
    
    
    (662,672
    )
    
    
    (666,481
    )
    
    
    578,945
    
    
    
    35,766
    
    
    
    843,314
    
    
    
    (662,672
    )$
    513,556
    
    
    $
    (271,084
    )
    
    $
    (145,864
    )
    
    $
    951,190
    
    
    $
    232,245
    
    
    $
    826,951
    
    
    $
    2,106,994
 24




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##### Table of Contents



TA DELAWARE, INC.
 Consolidating Statement of Operations for the Three Months Ended March 31, 2006
 (Amounts in thousands)
 Non-Guarantor
    
    
    Non-GuarantorR.J. Tower
    
    
    Parent
    
    
    Guarantor
    
    
    Restricted
    
    
    UnrestrictedCorporation
    
    
    Guarantor
    
    
    Companies
    
    
    Companies
    
    
    Companies
    
    
    Eliminations
    
    
    ConsolidatedRevenues
    
    $
    
    
    
    $
    
    
    
    $
    332,689
    
    
    $
    246,014
    
    
    $
    92,056
    
    
    $
    
    
    
    $
    670,759Cost of sales
    
    
    (2,099
    )
    
    
    
    
    
    
    320,291
    
    
    
    215,524
    
    
    
    88,150
    
    
    
    
    
    
    
    621,866Gross profit
    
    
    2,099
    
    
    
    
    
    
    
    12,398
    
    
    
    30,490
    
    
    
    3,906
    
    
    
    
    
    
    
    48,893Selling, general and administrative expenses
    
    
    (9,876
    )
    
    
    
    
    
    
    31,134
    
    
    
    10,216
    
    
    
    2,563
    
    
    
    
    
    
    
    34,037Restructuring and asset impairment charges, net
    
    
    5
    
    
    
    (4,142
    )
    
    
    6,548
    
    
    
    303
    
    
    
    (192
    )
    
    
    
    
    
    
    2,522Other operating expense/(income)
    
    
    (7,948
    )
    
    
    
    
    
    
    6,643
    
    
    
    785
    
    
    
    
    
    
    
    
    
    
    
    (520
    )Operating income (loss)
    
    
    19,918
    
    
    
    4,142
    
    
    
    (31,927
    )
    
    
    19,186
    
    
    
    1,535
    
    
    
    
    
    
    
    12,854Interest expense
    
    
    17,165
    
    
    
    
    
    
    
    531
    
    
    
    743
    
    
    
    2,043
    
    
    
    
    
    
    
    20,482Interest income
    
    
    (318
    )
    
    
    
    
    
    
    (3
    )
    
    
    47
    
    
    
    (182
    )
    
    
    
    
    
    
    (456
    )Intercompany interest expense/(income)
    
    
    (6,094
    )
    
    
    
    
    
    
    
    
    
    
    6,427
    
    
    
    (333
    )
    
    
    
    
    
    
    Chapter 11 and related reorganization items
    
    
    11,541
    
    
    
    68
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,609Income (loss) before provision for income
taxes, equity in earnings of joint ventures,
and minority interest
    
    
    (2,376
    )
    
    
    4,074
    
    
    
    (32,455
    )
    
    
    11,969
    
    
    
    7
    
    
    
    
    
    
    
    (18,781
    )Provision (benefit) for income taxes
    
    
    746
    
    
    
    62
    
    
    
    130
    
    
    
    (3,096
    )
    
    
    3
    
    
    
    
    
    
    
    (2,155
    )Income (loss) before equity in earnings of
joint ventures and subsidiaries and minority
interest
    
    
    (3,122
    )
    
    
    4,012
    
    
    
    (32,585
    )
    
    
    15,065
    
    
    
    4
    
    
    
    
    
    
    
    (16,626
    )Equity (losses) earnings in joint ventures
and subsidiaries, net
    
    
    (11,227
    )
    
    
    (14,349
    )
    
    
    
    
    
    
    6,616
    
    
    
    
    
    
    
    25,644
    
    
    
    6,684Minority interest, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (966
    )
    
    
    
    
    
    
    
    
    
    
    (966
    )Income (loss) from continuing operations
    
    
    (14,349
    )
    
    
    (10,337
    )
    
    
    (32,585
    )
    
    
    20,715
    
    
    
    4
    
    
    
    25,644
    
    
    
    (10,908
    )Income from discontinued operations
    
    
    
    
    
    
    
    
    
    
    571
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    571Net income (loss)
    
    $
    (14,349
    )
    
    $
    (10,337
    )
    
    $
    (32,014
    )
    
    $
    20,715
    
    
    $
    4
    
    
    $
    25,644
    
    
    $
    (10,337
    )
 25




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##### Table of Contents



TA DELAWARE, INC.
 Consolidating Statement of Cash Flows for the Three Months Ended March 31, 2006
 (Amounts in thousands  unaudited)
 Non-Guarantor
    
    
    Non-GuarantorR. J. Tower
    
    
    Parent
    
    
    Guarantor
    
    
    Restricted
    
    
    UnrestrictedCorporation
    
    
    Guarantor
    
    
    Companies
    
    
    Companies
    
    
    Companies
    
    
    Eliminations
    
    
    ConsolidatedOPERATING ACTIVITIES:Net income (loss)
    
    $
    (14,349
    )
    
    $
    (10,337
    )
    
    $
    (32,014
    )
    
    $
    20,715
    
    
    $
    4
    
    
    $
    25,644
    
    
    $
    (10,337
    )Adjustments required to reconcile net income (loss) to net cash
provided by (used in) operating activitiesNon-cash chapter 11 and related reorganization iterms, net
    
    
    5,948
    
    
    
    68
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,016Non-cash restructuring and impairment, net
    
    
    
    
    
    
    
    
    
    
    679
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    679Depreciation
    
    
    83
    
    
    
    
    
    
    
    24,119
    
    
    
    11,035
    
    
    
    6,150
    
    
    
    
    
    
    
    41,387Deferred income tax provision (benefit)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,861
    )
    
    
    4,176
    
    
    
    
    
    
    
    (7,685
    )Equity in earnings (losses) of joint ventures and subsidiaries, net
    
    
    11,227
    
    
    
    14,349
    
    
    
    
    
    
    
    (6,616
    )
    
    
    
    
    
    
    (25,644
    )
    
    
    (6,684
    )Non-cash minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    371
    
    
    
    
    
    
    
    
    
    
    
    371Changes in working capital and other operating items
    
    $
    (32,603
    )
    
    $
    (4,080
    )
    
    $
    22,879
    
    
    $
    (3,291
    )
    
    $
    (3,345
    )
    
    $
    
    
    
    $
    (20,440
    )Net cash provided by (used in) operating activities
    
    
    (29,694
    )
    
    
    
    
    
    
    15,663
    
    
    
    10,353
    
    
    
    6,985
    
    
    
    
    
    
    
    3,307INVESTING ACTIVITIES:Cash disbursed for purchases of property, plant and equipment
    
    
    
    
    
    
    
    
    
    
    (15,757
    )
    
    
    (9,031
    )
    
    
    (4,072
    )
    
    
    
    
    
    
    (28,860
    )Cash proceeds from asset disposal
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32,664
    
    
    
    
    
    
    
    32,664Net cash provided by (used in) investing activities
    
    
    
    
    
    
    
    
    
    
    (15,757
    )
    
    
    (9,031
    )
    
    
    28,592
    
    
    
    
    
    
    
    3,804FINANCING ACTIVITIES:Proceeds from borrowings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,886
    
    
    
    1,253
    
    
    
    
    
    
    
    11,139Repayments of borrowings
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    (3,989
    )
    
    
    (36,838
    )
    
    
    
    
    
    
    (40,830
    )Proceeds from DIP credit facility
    
    
    216,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    216,000Repayments of DIP credit facility borrowings
    
    
    (135,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (135,000
    )Net cash provided by (used in) financing activities
    
    
    81,000
    
    
    
    
    
    
    
    (3
    )
    
    
    5,897
    
    
    
    (35,585
    )
    
    
    
    
    
    
    51,309NET CHANGE IN CASH AND CASH EQUIVALENTS
    
    
    51,306
    
    
    
    
    
    
    
    (97
    )
    
    
    7,219
    
    
    
    (8
    )
    
    
    
    
    
    
    58,420CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    702
    
    
    
    
    
    
    
    156
    
    
    
    64,790
    
    
    
    143
    
    
    
    
    
    
    
    65,791CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    52,008
    
    
    $
    
    
    
    $
    59
    
    
    $
    72,009
    
    
    $
    135
    
    
    $
    
    
    
    $
    124,211
 26




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Overview
   
    
    Significant capital expenditures and spending on product launch activities;
    
    High interest costs;
    
    Declining gross margins;
    
    Termination of accelerated payment programs by key customers;
    
    Lower production volumes at the Companys largest customers; and
    
    Significant raw material price increases (primarily steel).
  
    
    Restructure the Companys North American operations;
    
    Comply with the terms and conditions of the DIP financing agreement described in Note 9
to the Condensed Consolidated Financial Statements;
    
    Obtain confirmation of a plan of reorganization under the Bankruptcy Code;
    
    Reduce unsustainable debt and simplify the Companys complex and restrictive capital
structure through the bankruptcy process; and
    
    Obtain financing sources to meet the Debtors future obligations.
    27




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##### Table of Contents



Results of Operations
 Three Months Ended March 31, 2007 Compared to the Three Months Ended March 31, 2006
 Revenues
 Gross Profit and Gross Margin.
 Selling, General and Administrative Expenses.
 Interest Expense.
  Chapter 11 and Related Reorganization Items.
 Provision for Income Taxes.
 28




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##### Table of Contents



Equity in Earnings of Joint Ventures, Net of Tax.
 Minority Interest, Net of Tax
 Restructuring and Asset Impairment
    29




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##### Table of Contents



Liquidity and Capital Resources
      Chapter 11 Impact
    30




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##### Table of Contents



DIP Financing
      31




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##### Table of Contents



Back-Stop Agreement
   Stock Options
 Share-Based Payment
 Fair Value Measurements
 The Fair Value Option for Financial Assets and Financial Liabilities  including an
Amendment to FASB Statement No. 115 Accounting for
Certain Investments in Debt and Equity Securities,
 Market Risk
    32




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##### Table of Contents



Opportunities
  Disclosure Regarding Forward-Looking Statements
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk.
  33




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##### Table of Contents



Item 4. Controls and Procedures.
    
    
    Enhanced monthly and quarterly financial reviews with regional finance departments and
senior management;
    
    Enhanced account reconciliations at the corporate headquarters; and
    
    Enhanced quarterly tax provision methodology.
  34




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 1A. Risk Factors.
  
 Item 6. Exhibits.
 31.1
    
    Certification of the Post-Consummation Trust Administrator pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of the Post-Consummation Trust Administrator pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 35




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##### Table of Contents



TA DELAWARE, INC.
RegistrantDate:  November 6, 2007
    /s/ Jeffery StegengaJeffery StegengaPost-Consummation Trust Administrator 36