##### 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 September 30, 2005
 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
 TOWER AUTOMOTIVE, INC.
  Delaware
    
    41-1746238(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 27175 Haggerty Road
    
    48377Novi, Michigan
    
    (Zip Code)(Address of principal executive offices)
 (248) 675-6000
  Not Applicable
   þ o
  o þ
  o þ




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##### 



Tower Automotive, Inc.
Form 10-Q
 Table of Contents
 PART I Financial InformationItem 1.
    
    Financial Statements:Condensed Consolidated Balance Sheets (unaudited) at September 30, 2005 and December 31, 2004Condensed Consolidated Statements of Operations (unaudited) for the Three Months and Nine Months Ended September 30, 2005 and 2004Condensed Consolidated Statements of Cash Flows (unaudited) for the Nine Months Ended September 30, 2005 and 2004Notes to Condensed Consolidated Financial Statements (unaudited)Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 3.
    
    Quantitative and Qualitative Disclosures About Market Risk See Market Risk section of Part I, Item 2Item 4.
    
    Controls and ProceduresPART II Other InformationItem 1.
    
    Legal ProceedingsItem 6.
    
    ExhibitsSignaturesFifth Amendment to Revolving Credit, Term Loan and Guaranty Agreement, Dated October 3, 2005Certification of the Chief Executive Officer Pursuant to Section 302Certification of the Chief Financial Officer Pursuant to Section 302Certification of the Chief Executive Officer Pursuant to Section 906Certification of the Chief Financial Officer Pursuant to Section 906




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##### Table of Contents



PART 1   FINANCIAL INFORMATION
 
 ITEM 1. Financial Statements.
 TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (Amounts in thousands  unaudited)
 September 30, 2005
    
    
    December 31, 2004ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    45,517
    
    
    $
    149,101Accounts receivable
    
    
    441,588
    
    
    
    346,031Inventories
    
    
    139,112
    
    
    
    159,034Prepaid tooling and other
    
    
    149,475
    
    
    
    124,938Total current assets
    
    
    775,692
    
    
    
    779,104Property, plant and equipment, net
    
    
    1,047,852
    
    
    
    1,205,640Investments in joint ventures
    
    
    222,282
    
    
    
    227,740Goodwill
    
    
    155,388
    
    
    
    174,563Other assets, net
    
    
    119,860
    
    
    
    173,727Total assets
    
    $
    2,321,074
    
    
    $
    2,560,774LIABILITIES AND STOCKHOLDERS DEFICITCurrent Liabilities Not Subject to Compromise:Current maturities of long-term debt and capital lease obligations
    
    $
    142,081
    
    
    $
    133,156Accounts payable
    
    
    322,198
    
    
    
    638,118Accrued liabilities
    
    
    247,338
    
    
    
    286,262Total current liabilities
    
    
    711,617
    
    
    
    1,057,536Liabilities subject to compromise
    
    
    1,134,974
    
    
    
    Non-Current Liabilities Not Subject to Compromise:Long-term debt, net of current maturities
    
    
    88,964
    
    
    
    1,239,562Debtor-in-possession borrowings
    
    
    553,764
    
    
    
    Convertible senior debentures
    
    
    
    
    
    
    121,723Obligations under capital leases, net of current maturities
    
    
    30,048
    
    
    
    36,823Other noncurrent liabilities
    
    
    242,612
    
    
    
    226,062Total noncurrent liabilities
    
    
    915,388
    
    
    
    1,624,170Stockholders deficit:Preferred Stock
    
    
    
    
    
    
    Common stock
    
    
    666
    
    
    
    666Additional paid-in-capital
    
    
    681,264
    
    
    
    681,084Retained deficit
    
    
    (1,024,761
    )
    
    
    (715,754
    )Deferred compensation plans
    
    
    (7,146
    )
    
    
    (7,636
    )Accumulated other comprehensive loss
    
    
    (41,604
    )
    
    
    (29,968
    )Treasury stock
    
    
    (49,324
    )
    
    
    (49,324
    )Total stockholders deficit
    
    
    (440,905
    )
    
    
    (120,932
    )Total liabilities and stockholders deficit
    
    $
    2,321,074
    
    
    $
    2,560,774
  1




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##### Table of Contents



TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (Amounts in thousands, except per share amounts  unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Revenues
    
    $
    712,664
    
    
    $
    722,334
    
    
    $
    2,551,558
    
    
    $
    2,286,783Cost of sales
    
    
    688,602
    
    
    
    689,950
    
    
    
    2,383,316
    
    
    
    2,125,040Gross profit
    
    
    24,062
    
    
    
    32,384
    
    
    
    168,242
    
    
    
    161,743Selling, general and administrative expenses
    
    
    36,200
    
    
    
    33,503
    
    
    
    118,828
    
    
    
    102,798Restructuring and asset impairment charges, net
    
    
    37,693
    
    
    
    2,020
    
    
    
    108,877
    
    
    
    (3,283
    )Operating income (loss)
    
    
    (49,831
    )
    
    
    (3,139
    )
    
    
    (59,463
    )
    
    
    62,228Interest expense, net (Contractual interest of
$39,644 and $136,370 in 2005)
    
    
    21,510
    
    
    
    36,061
    
    
    
    87,523
    
    
    
    105,409Chapter 11 and related reorganization items
    
    
    6,615
    
    
    
    
    
    
    
    151,524
    
    
    
    Unrealized gain on derivative
    
    
    
    
    
    
    (5,710
    )
    
    
    
    
    
    
    (3,860
    )Loss before provision for income taxes, equity in
earnings of joint ventures and minority interest
    
    
    (77,956
    )
    
    
    (33,490
    )
    
    
    (298,510
    )
    
    
    (39,321
    )Provision (benefit) for income taxes
    
    
    1,522
    
    
    
    (12,700
    )
    
    
    17,344
    
    
    
    (14,418
    )Loss before equity in earnings of joint ventures,
minority interest and gain on sale of joint venture
    
    
    (79,478
    )
    
    
    (20,790
    )
    
    
    (315,854
    )
    
    
    (24,903
    )Equity in earnings of joint ventures, net of tax
    
    
    4,316
    
    
    
    2,124
    
    
    
    10,801
    
    
    
    9,093Minority interest, net of tax
    
    
    (1,394
    )
    
    
    (1,552
    )
    
    
    (3,951
    )
    
    
    (4,779
    )Gain on sale of joint venture, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,732Net loss
    
    $
    (76,556
    )
    
    $
    (20,218
    )
    
    $
    (309,004
    )
    
    $
    (10,857
    )Basic and diluted loss per share
    
    $
    (1.31
    )
    
    $
    (0.35
    )
    
    $
    (5.27
    )
    
    $
    (0.19
    )Weighted average basic and diluted shares outstanding
    
    
    58,643
    
    
    
    58,293
    
    
    
    58,646
    
    
    
    57,901
  2




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##### Table of Contents



TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Amounts in thousands  unaudited)
 Nine Months Ended September 30,2005
    
    
    2004OPERATING ACTIVITIES:
    
    
    
    
    
    (as corrected)Net loss
    
    $
    (309,004
    )
    
    $
    (10,857
    )Adjustments required to reconcile net loss to net cash
provided by (used in) operating activities:Chapter 11 and related reorganization expenses, net
    
    
    133,171
    
    
    
    Non-cash restructuring and impairment
    
    
    101,632
    
    
    
    (6,276
    )Depreciation
    
    
    135,788
    
    
    
    114,354Deferred income tax
    
    
    12,863
    
    
    
    (25,199
    )Gain on sale of joint venture investment
    
    
    
    
    
    
    (9,732
    )Equity in earnings of joint ventures, net
    
    
    (10,801
    )
    
    
    (9,093
    )Unrealized gain on derivative
    
    
    
    
    
    
    (3,860
    )Change in working capital and other operating items
    
    
    (189,450
    )
    
    
    (38,298
    )Net cash provided by (used in) operating activities
    
    
    (125,801
    )
    
    
    11,039INVESTING ACTIVITIES:Cash
disbursed for purchases of property, plant and equipment
    
    
    (104,540
    )
    
    
    (147,580
    )Proceeds
from sale of joint venture investment
    
    
    
    
    
    
    51,700Acquisitions
    
    
    
    
    
    
    (21,299
    )Net cash
used in investing activities
    
    
    (104,540
    )
    
    
    (117,179
    )FINANCING ACTIVITIES:Proceeds from borrowings
    
    
    36,702
    
    
    
    580,037Repayments of borrowings
    
    
    (465,583
    )
    
    
    (489,891
    )Proceeds from DIP credit facility
    
    
    1,054,285
    
    
    
    Repayments of DIP credit facility
    
    
    (498,647
    )
    
    
    Net proceeds from issuance of stock
    
    
    
    
    
    
    75Net cash provided by (used in) financing activities
    
    
    126,757
    
    
    
    90,221NET CHANGE IN CASH AND CASH EQUIVALENTS
    
    $
    (103,584
    )
    
    $
    (15,919
    )Cash and cash equivalents, beginning of period
    
    $
    149,101
    
    
    $
    160,899CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    45,517
    
    
    $
    144,980Supplemental Cash Flow Information:Interest paid, net of amounts capitalized
    
    $
    47,081
    
    
    $
    92,329Income taxes paid (refunded)
    
    $
    (291
    )
    
    $
    (1,174
    )Net
(decrease) increase in liabilities for purchases of property, plant
and equipment
    
    
    (27,425
    )
    
    
    29,268
  3




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##### Table of Contents



TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 1. Basis of Presentation
         Six Months Ended
    
    
    Three Months EndedJune 30, 2005
    
    
    March 31, 2005As
    
    
    As
    
    
    As
    
    
    Asreported
    
    

corrected
    
    
    reported
    
    

correctedNet cash provided by (used in)
operating
activities
    
    $
    (149,724
    )
    
    $
    (116,169
    )
    
    $
    (176,855
    )
    
    $
    (155,664
    )Net cash used in investing activities
    
    
    (51,537
    )
    
    
    (85,092
    )
    
    
    (31,977
    )
    
    
    (53,168
    )Net decrease
in liabilities for purchases of property, plant and equipment
    
    
    
    
    
    
    (33,555
    )
    
    
    
    
    
    
    (21,191
    )
 Nine Months Ended
    
    
    Six Months EndedSeptember 30, 2004
    
    
    June 30, 2004As
    
    
    As
    
    
    As
    
    
    Asreported
    
    

corrected
    
    
    reported
    
    

correctedNet cash provided by (used in)
operating activities
    
    $
    40,307
    
    
    $
    11,039
    
    
    $
    30,449
    
    
    $
    1,202Net cash used in investing activities
    
    
    (146,447
    )
    
    
    (117,179
    )
    
    
    (100,626
    )
    
    
    (71,379
    )Net increase
in liabilities for purchases of property, plant and equipment
    
    
    
    
    
    
    29,268
    
    
    
    
    
    
    
    29,247
 Three Months Ended
    
    
    Year EndedMarch 31, 2004
    
    
December 31, 2004As
    
    
    As
    
    
    As
    
    
    Asreported
    
    

corrected
    
    
    reported
    
    

correctedNet cash provided by (used in) operating activities
    
    $
    (62,884
    )
    
    $
    (71,902
    )
    
    $
    74,760
    
    
    $
    51,710Net cash used in investing activities
    
    
    (19,890
    )
    
    
    (10,872
    )
    
    
    (180,525
    )
    
    
    (157,475
    )Net increase
in liabilities for purchases of property, plant and equipment
    
    
    
    
    
    
    9,018
    
    
    
    
    
    
    
    23,050
 4




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##### Table of Contents



2. Chapter 11 Reorganization Proceedings
      Financial Statement Classification
   5




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##### Table of Contents



September30, 2005Debt:5.75% Convertible senior debentures
    
    $
    124,9996.75% Due to Tower
Automotive Capital Trust
    
    
    258,7509.25% Senior Euro notes
    
    
    180,43512% Senior notes
    
    
    258,000Total debt
    
    
    822,184Pre-petition accounts payable and accruals
    
    
    189,525Accrued interest on debt subject to compromise
    
    
    21,343Executory Contracts
    
    
    101,922Consolidated liabilities subject to compromise
    
    
    1,134,974Inter-company payable to non-Debtor subsidiaries
    
    
    16,363Total liabilities subject to compromise
    
    $
    1,151,337
  Three Months
    
    
    Nine MonthsEnded
    
    
    EndedSeptember 30,
    
    
    September 30,2005
    
    
    2005Professional fees directly related to the filing
    
    $
    4,547
    
    
    $
    24,511Key employee retention costs
    
    
    1,675
    
    
    
    3,368Write off of deferred financing costs
    
    
    
    
    
    
    29,135Estimated executory contract rejection damages
    
    
    393
    
    
    
    94,313Other expenses directly attributable to the
Companys reorganization
    
    
    
    
    
    
    197Total
    
    $
    6,615
    
    
    $
    151,524
  6




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##### Table of Contents



Debtors Financial Statements
  Debtors Condensed Consolidated Balance Sheet
 Debtors- in-Possession
  September 30,2005ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    1,175Accounts receivable
    
    
    222,619Inventories
    
    
    70,594Prepaid tooling and other
    
    
    37,670Total current assets
    
    
    332,058Property, plant and equipment, net
    
    
    552,180Investments in non-Debtor subsidiaries
    
    
    408,560Inter-company receivables
    
    
    413,465Other assets, net
    
    
    67,203Total assets
    
    $
    1,773,466LIABILITIES AND STOCKHOLDERS DEFICITCurrent Liabilities Not Subject to Compromise:Current maturities of long-term debt and capital lease
obligations
    
    $
    14,257Accounts payable
    
    
    104,050Accrued liabilities
    
    
    153,647Total current liabilities
    
    
    271,954Liabilities subject to compromise
    
    
    1,151,337Non-Current Liabilities Not Subject to Compromise:Long-term debt, net of current maturities
    
    
    43,771DIP borrowings
    
    
    553,764Other noncurrent liabilities
    
    
    193,545Total noncurrent liabilities
    
    
    791,080Total stockholders deficit
    
    
    (440,905
    )Total liabilities and stockholders deficit
    
    $
    1,773,466
 7




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##### Table of Contents



Debtors Condensed Consolidated Statements of Operations
 Debtors-in- Possession
  Three Months
    
    
    Nine MonthsEnded
    
    
    EndedSeptember 30,
    
    
    September 30,2005
    
    
    2005Revenues
    
    $
    418,485
    
    
    $
    1,553,624Cost of sales
    
    
    412,218
    
    
    
    1,476,718Gross profit
    
    
    6,267
    
    
    
    76,906Selling, general and administrative expenses
    
    
    22,420
    
    
    
    76,479Restructuring and asset impairment charges, net
    
    
    37,453
    
    
    
    106,886Chapter 11 and related reorganization items
    
    
    6,615
    
    
    
    151,524Operating loss
    
    
    (60,221
    )
    
    
    (257,983
    )Interest expense, net
    
    
    18,745
    
    
    
    78,706Inter-company interest income
    
    
    (5,411
    )
    
    
    (17,009
    )Loss before provision for income taxes, equity
in earnings of joint ventures and equity in earnings
from non-Debtor subsidiaries
    
    
    (73,555
    )
    
    
    (319,680
    )Provision (benefit) for income taxes
    
    
    (2,806
    )
    
    
    5,409Loss before equity in earnings of joint
ventures and equity in earnings of non-Debtor
subsidiaries
    
    
    (70,749
    )
    
    
    (325,089
    )Equity in earnings of joint ventures, net of tax
    
    
    48
    
    
    
    48Equity in earnings (loss) of non-Debtor subsidiaries
    
    
    (5,855
    )
    
    
    16,037Net loss
    
    $
    (76,556
    )
    
    $
    (309,004
    )
 8




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##### Table of Contents



Debtors Condensed Consolidated Statements of Cash Flows
 Debtors- in-Possession
  Nine MonthsEndedSeptember 30,2005OPERATING ACTIVITIES:
    
    $
    (309,004
    )Net lossAdjustments required to reconcile net loss to net
cash provided by (used in) operating activities:Chapter 11 and related reorganization items, net
    
    
    133,171Non-cash restructuring and impairment
    
    
    100,065Depreciation
    
    
    81,522Equity in earnings of non-Debtor subsidiaries
    
    
    (16,037
    )Equity in earnings of joint ventures, net
    
    
    (48
    )Change in working capital and other operating items
    
    
    (186,100
    )Net cash used in operating activities
    
    
    (196,431
    )INVESTING ACTIVITIES:Cash
disbursed for purchases of property, plant and equipment
    
    
    (34,743
    )Net cash used for investing activities
    
    
    (34,743
    )FINANCING ACTIVITIES:Repayments of pre-petition borrowings
    
    
    (430,370
    )Proceeds from DIP borrowings
    
    
    1,054,285Repayments of DIP borrowings
    
    
    (498,647
    )Net cash provided by financing activities
    
    
    125,268NET CHANGE IN CASH AND CASH EQUIVALENTS
    
    
    (105,906
    )Cash and cash equivalents, beginning of period
    
    
    107,081CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    1,175
 3. Inventories
  September 30,
    
    
    December 31,2005
    
    
    2004Raw materials
    
    $
    72,284
    
    
    $
    91,220Work in process
    
    
    31,106
    
    
    
    26,820Finished goods
    
    
    35,722
    
    
    
    40,994$
    139,112
    
    
    $
    159,034
 9




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##### Table of Contents



4. Debt
 Chapter 11 Impact
     DIP Financing
     10




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##### Table of Contents



Back-Stop Agreement
   Debt Classified as Not Subject to Compromise
  Interest Rate Swap Contracts
  Unrealized Gain on Derivative
  5. Accounts Receivable Securitization Facility
  11




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##### Table of Contents



6. Income Taxes
   7. Stockholders Deficit
 Earnings (Loss) Per Share
  12




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##### Table of Contents



Stock-Based Compensation
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Net loss as reported
    
    $
    (76,556
    )
    
    $
    (20,218
    )
    
    $
    (309,004
    )
    
    $
    (10,857
    )Add: Stock-based compensation
included in reported net
loss, net of related tax effects
    
    
    106
    
    
    
    65
    
    
    
    617
    
    
    
    637Deduct: Stock-based compensation determined under fair value based
method for all awards, net of
related tax effects
    
    
    (1,204
    )
    
    
    (432
    )
    
    
    (550
    )
    
    
    (1,568
    )Pro Forma net loss
    
    $
    (77,654
    )
    
    $
    (20,585
    )
    
    $
    (308,937
    )
    
    $
    (11,788
    )
 Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2005
    
    2004
    
    2005
    
    2004Basic loss per share as reported
    
    $
    (1.31
    )
    
    $
    (0.35
    )
    
    $
    (5.27
    )
    
    $
    (0.19
    )Pro Forma
    
    
    (1.32
    )
    
    
    (0.35
    )
    
    
    (5.27
    )
    
    
    (0.20
    )Diluted loss per share as reported
    
    $
    (1.31
    )
    
    $
    (0.35
    )
    
    $
    (5.27
    )
    
    $
    (0.19
    )Pro Forma
    
    
    (1.32
    )
    
    
    (0.35
    )
    
    
    (5.27
    )
    
    
    (0.20
    )
    8. Acquisitions
  13




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9. Investments in Joint Ventures
   10. Retirement Plans
  Pension Benefits
    
    
    Other Benefits2005
    
    
    2004
    
    
    2005
    
    
    2004Service cost
    
    $
    819
    
    
    $
    2,140
    
    
    $
    82
    
    
    $
    94Interest cost
    
    
    3,906
    
    
    
    3,626
    
    
    
    2,172
    
    
    
    1,935Expected return on plan assets
    
    
    (3,835
    )
    
    
    (3,045
    )
    
    
    
    
    
    
    Amortization of transition assets
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    Amortization of prior service cost
    
    
    621
    
    
    
    1,054
    
    
    
    
    
    
    
    Amortization of net losses
    
    
    1,009
    
    
    
    941
    
    
    
    3,204
    
    
    
    1,495Net periodic benefit cost
    
    $
    2,520
    
    
    $
    4,715
    
    
    $
    5,458
    
    
    $
    3,524
  Pension Benefits
    
    
    Other Benefits2005
    
    
    2004
    
    
    2005
    
    
    2004Service cost
    
    $
    4,259
    
    
    $
    6,420
    
    
    $
    482
    
    
    $
    283Interest cost
    
    
    11,485
    
    
    
    10,879
    
    
    
    6,302
    
    
    
    5,804Expected return on plan assets
    
    
    (11,179
    )
    
    
    (9,134
    )
    
    
    
    
    
    
    Amortization of transition assets
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    Amortization of prior service cost
    
    
    3,084
    
    
    
    3,162
    
    
    
    
    
    
    
    Amortization of net losses
    
    
    3,063
    
    
    
    2,824
    
    
    
    9,663
    
    
    
    4,485Net periodic benefit cost
    
    $
    10,712
    
    
    $
    14,147
    
    
    $
    16,447
    
    
    $
    10,572
  14




---



##### Table of Contents



11. Segment Information
  North America
    
    
    International
    
    
    TotalThree months ended September 30, 2005:Revenues
    
    $
    427,437
    
    
    $
    285,227
    
    
    $
    712,664Operating income (loss)
    
    
    (55,675
    )
    
    
    5,844
    
    
    
    (49,831
    )Restructuring and asset impairment charges
    
    
    37,454
    
    
    
    239
    
    
    
    37,693Total assets
    
    
    1,202,898
    
    
    
    1,118,176
    
    
    
    2,321,074Three months ended September 30, 2004:Revenues
    
    $
    465,044
    
    
    $
    257,290
    
    
    $
    722,334Operating income (loss)
    
    
    (15,174
    )
    
    
    12,035
    
    
    
    (3,139
    )Restructuring and asset impairment charges
    
    
    2,020
    
    
    
    
    
    
    
    2,020Total assets
    
    
    2,035,586
    
    
    
    990,403
    
    
    
    3,025,989Nine months ended September 30, 2005:Revenues
    
    $
    1,587,442
    
    
    $
    964,116
    
    
    $
    2,551,558Operating income (loss)
    
    
    (111,872
    )
    
    
    52,409
    
    
    
    (59,463
    )Restructuring and asset impairment charges
    
    
    106,887
    
    
    
    1,990
    
    
    
    108,877Total assets
    
    
    1,202,898
    
    
    
    1,118,176
    
    
    
    2,321,074Nine months ended September 30, 2004:Revenues
    
    $
    1,516,394
    
    
    $
    770,389
    
    
    $
    2,286,783Operating income
    
    
    13,736
    
    
    
    48,492
    
    
    
    62,228Restructuring and asset impairment charges
    
    
    (3,283
    )
    
    
    
    
    
    
    (3,283
    )Total assets
    
    
    2,035,586
    
    
    
    990,403
    
    
    
    3,025,989
 Inter-segment revenues are not significant for any period presented.The change in the carrying amount of goodwill for the nine months ended September 30, 2005, by
operating segment follows (in thousands):
 15




---



##### Table of Contents



InternationalBalance at December 31, 2004
    
    $
    174,563Currency translation adjustment
    
    
    (19,175
    )Balance at September 30, 2005
    
    $
    155,388
 12. Restructuring and Asset Impairment Charges
         16




---



##### Table of Contents



Severance
    
    
    Other Costs
    
    
    TotalBalance at December 31, 2004
    
    $
    2,615
    
    
    $
    4,349
    
    
    $
    6,964Provision
    
    
    6,595
    
    
    
    
    
    
    
    6,595Cash usage
    
    
    (3,848
    )
    
    
    
    
    
    
    (3,848
    )Non-cash charges and revisions of estimates
    
    
    (1,069
    )
    
    
    (4,349
    )
    
    
    (5,418
    )Balance at September 30, 2005
    
    $
    4,293
    
    
    $
    
    
    
    $
    4,293
  13. Comprehensive Income (Loss)
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Net loss
    
    $
    (76,556
    )
    
    $
    (20,218
    )
    
    $
    (309,004
    )
    
    $
    (10,857
    )Change in cumulative
translation adjustment
    
    
    964
    
    
    
    4,235
    
    
    
    (16,097
    )
    
    
    (8,610
    )Unrealized gain on
qualifying cash flow
hedges, net of tax of $-,
$575, $- and $2,299,
respectively
    
    
    1,132
    
    
    
    1,118
    
    
    
    4,460
    
    
    
    4,463Comprehensive income (loss)
    
    $
    (74,460
    )
    
    $
    (14,865
    )
    
    $
    (320,641
    )
    
    $
    (15,004
    )
 14. Commitments and Contingencies
 Environmental Matters
   17




---



##### Table of Contents



Litigation
    Key Employee Retention Plan Agreements
    18




---



##### Table of Contents



15. Recently Issued Accounting Pronouncements
   16. Subsequent Events
  17. Consolidating Guarantor and Non-Guarantor Financial Information
  19




---



##### Table of Contents



TOWER AUTOMOTIVE, INC.
Consolidating Balance Sheets at September 30, 2005
(Amounts in thousands  unaudited)
 Non-Guarantor
    
    
    Non-GuarantorR.J. Tower
    
    
    Parent
    
    
    Guarantor
    
    
    Restricted
    
    
    UnrestrictedCorporation
    
    
    Guarantor
    
    
    Companies
    
    
    Companies
    
    
    Companies
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    1,713
    
    
    $
    
    
    
    $
    (537
    )
    
    $
    44,108
    
    
    $
    233
    
    
    $
    
    
    
    $
    45,517Accounts receivable
    
    
    7,455
    
    
    
    
    
    
    
    215,164
    
    
    
    206,387
    
    
    
    12,582
    
    
    
    
    
    
    
    441,588Inventories
    
    
    
    
    
    
    
    
    
    
    70,594
    
    
    
    53,002
    
    
    
    15,516
    
    
    
    
    
    
    
    139,112Prepaid tooling and other
    
    
    2,230
    
    
    
    
    
    
    
    35,440
    
    
    
    84,842
    
    
    
    26,963
    
    
    
    
    
    
    
    149,475Total current assets
    
    
    11,398
    
    
    
    
    
    
    
    320,661
    
    
    
    388,339
    
    
    
    55,294
    
    
    
    
    
    
    
    775,692Property, plant and equipment, net
    
    
    684
    
    
    
    
    
    
    
    551,498
    
    
    
    302,717
    
    
    
    192,953
    
    
    
    
    
    
    
    1,047,852Investments in and advances to (from) affiliates
    
    
    765,476
    
    
    
    (49,817
    )
    
    
    (668,156
    )
    
    
    (183,171
    )
    
    
    (3,141
    )
    
    
    361,091
    
    
    
    222,282Goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    155,388
    
    
    
    
    
    
    
    
    
    
    
    155,388Other assets, net
    
    
    17,937
    
    
    
    
    
    
    
    49,785
    
    
    
    28,318
    
    
    
    23,820
    
    
    
    
    
    
    
    119,860$
    795,495
    
    
    $
    (49,817
    )
    
    $
    253,788
    
    
    $
    691,591
    
    
    $
    268,926
    
    
    $
    361,091
    
    
    $
    2,321,074Liabilities and Stockholders Investment (Deficit)Current liabilities:Current maturities of long-term debt and capital lease obligations
    
    $
    
    
    
    $
    
    
    
    $
    14,257
    
    
    $
    16,256
    
    
    $
    111,568
    
    
    $
    
    
    
    $
    142,081Accounts payable
    
    
    9,858
    
    
    
    
    
    
    
    94,192
    
    
    
    177,534
    
    
    
    40,614
    
    
    
    
    
    
    
    322,198Accrued liabilities
    
    
    45,352
    
    
    
    
    
    
    
    111,006
    
    
    
    82,988
    
    
    
    7,992
    
    
    
    
    
    
    
    247,338Total current liabilities
    
    
    55,210
    
    
    
    
    
    
    
    219,455
    
    
    
    276,778
    
    
    
    160,174
    
    
    
    
    
    
    
    711,617Liabilities subject to compromise
    
    
    557,311
    
    
    
    391,088
    
    
    
    186,575
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,134,974Non-Current Liabilities Not Subject to Compromise:Long-term debt, net of current maturities
    
    
    
    
    
    
    
    
    
    
    43,770
    
    
    
    8,435
    
    
    
    36,759
    
    
    
    
    
    
    
    88,964Debtor-in-possession borrowings, net of current maturities
    
    
    553,764
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    553,764Obligations under capital leases, net of current maturities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,048
    
    
    
    
    
    
    
    
    
    
    
    30,048Other noncurrent liabilities
    
    
    43,575
    
    
    
    
    
    
    
    144,792
    
    
    
    35,319
    
    
    
    18,926
    
    
    
    
    
    
    
    242,612Total noncurrent liabilities
    
    
    597,339
    
    
    
    
    
    
    
    188,562
    
    
    
    73,802
    
    
    
    55,685
    
    
    
    
    
    
    
    915,388Stockholders investment (deficit)
    
    
    (414,365
    )
    
    
    (440,905
    )
    
    
    (340,804
    )
    
    
    341,011
    
    
    
    53,067
    
    
    
    361,091
    
    
    
    (440,905
    )$
    795,495
    
    
    $
    (49,817
    )
    
    $
    253,788
    
    
    $
    691,591
    
    
    $
    268,926
    
    
    $
    361,091
    
    
    $
    2,321,074
 20




---



##### Table of Contents



TOWER AUTOMOTIVE, INC.
Consolidating Statement of Operations for the Three Months Ended September 30, 2005
(Amounts in thousands  unaudited)
 Non-Guarantor
    
    
    Non-GuarantorR.J. Tower
    
    
    Parent
    
    
    Guarantor
    
    
    Restricted
    
    
    UnrestrictedCorporation
    
    
    Guarantor
    
    
    Companies
    
    
    Companies
    
    
    Companies
    
    
    Eliminations
    
    
    ConsolidatedRevenues
    
    $
    
    
    
    $
    
    
    
    $
    418,484
    
    
    $
    226,204
    
    
    $
    67,976
    
    
    $
    
    
    
    $
    712,664Cost of sales
    
    
    (1,731
    )
    
    
    
    
    
    
    414,663
    
    
    
    200,092
    
    
    
    75,578
    
    
    
    
    
    
    
    688,602Gross profit
    
    
    1,731
    
    
    
    
    
    
    
    3,821
    
    
    
    26,112
    
    
    
    (7,602
    )
    
    
    
    
    
    
    24,062Selling, general and administrative expenses
    
    
    (9,274
    )
    
    
    
    
    
    
    31,694
    
    
    
    10,989
    
    
    
    2,791
    
    
    
    
    
    
    
    36,200Restructuring and asset impairment charge
    
    
    (2,787
    )
    
    
    
    
    
    
    40,240
    
    
    
    240
    
    
    
    
    
    
    
    
    
    
    
    37,693Operating income (loss)
    
    
    13,792
    
    
    
    
    
    
    
    (68,113
    )
    
    
    14,883
    
    
    
    (10,393
    )
    
    
    
    
    
    
    (49,831
    )Interest expense (income), net
    
    
    16,802
    
    
    
    
    
    
    
    1,803
    
    
    
    960
    
    
    
    1,945
    
    
    
    
    
    
    
    21,510Chapter 11 and related reorganization items
    
    
    6,615
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,615Income (loss) before provision for income taxes, equity in
earnings of joint ventures and minority interest
    
    
    (9,625
    )
    
    
    
    
    
    
    (69,916
    )
    
    
    13,923
    
    
    
    (12,338
    )
    
    
    
    
    
    
    (77,956
    )Provision (benefit) for income taxes
    
    
    
    
    
    
    
    
    
    
    129
    
    
    
    4,505
    
    
    
    (3,112
    )
    
    
    
    
    
    
    1,522Income (loss) before equity in earnings of joint ventures and
minority interest
    
    
    (9,625
    )
    
    
    
    
    
    
    (70,045
    )
    
    
    9,418
    
    
    
    (9,226
    )
    
    
    
    
    
    
    (79,478
    )Equity earnings in joint ventures and subsidiaries, net
    
    
    (66,931
    )
    
    
    (76,556
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    147,803
    
    
    
    4,316Minority interest, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,394
    )
    
    
    
    
    
    
    
    
    
    
    (1,394
    )Net income (loss)
    
    $
    (76,556
    )
    
    $
    (76,556
    )
    
    $
    (70,045
    )
    
    $
    8,024
    
    
    $
    (9,226
    )
    
    $
    147,803
    
    
    $
    (76,556
    )
 21




---



##### Table of Contents



TOWER AUTOMOTIVE, INC.
Consolidating Statement of Operations for the Nine Months Ended September 30, 2005
(Amounts in thousands  unaudited)
 Non-Guarantor
    
    
    Non-GuarantorR.J. Tower
    
    
    Parent
    
    
    Guarantor
    
    
    Restricted
    
    
    UnrestrictedCorporation
    
    
    Guarantor
    
    
    Companies
    
    
    Companies
    
    
    Companies
    
    
    Eliminations
    
    
    ConsolidatedRevenues
    
    $
    
    
    
    $
    
    
    
    $
    1,553,622
    
    
    $
    728,527
    
    
    $
    269,409
    
    
    $
    
    
    
    $
    2,551,558Cost of sales
    
    
    (5,072
    )
    
    
    
    
    
    
    1,484,297
    
    
    
    638,665
    
    
    
    265,426
    
    
    
    
    
    
    
    2,383,316Gross profit
    
    
    5,072
    
    
    
    
    
    
    
    69,325
    
    
    
    89,862
    
    
    
    3,983
    
    
    
    
    
    
    
    168,242Selling, general and administrative expenses
    
    
    (21,176
    )
    
    
    
    
    
    
    97,656
    
    
    
    33,457
    
    
    
    8,891
    
    
    
    
    
    
    
    118,828Restructuring and asset impairment charge
    
    
    (2,284
    )
    
    
    
    
    
    
    109,170
    
    
    
    1,991
    
    
    
    
    
    
    
    
    
    
    
    108,877Operating income (loss)
    
    
    28,532
    
    
    
    
    
    
    
    (137,501
    )
    
    
    54,414
    
    
    
    (4,908
    )
    
    
    
    
    
    
    (59,463
    )Interest expense (income), net
    
    
    69,720
    
    
    
    2,221
    
    
    
    6,590
    
    
    
    3,445
    
    
    
    5,547
    
    
    
    
    
    
    
    87,523Chapter 11 and related reorganization items
    
    
    151,524
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    151,524Income (loss) before provision for income taxes, equity in
earnings of joint ventures and minority interest
    
    
    (192,712
    )
    
    
    (2,221
    )
    
    
    (144,091
    )
    
    
    50,969
    
    
    
    (10,455
    )
    
    
    
    
    
    
    (298,510
    )Provision (benefit) for income taxes
    
    
    
    
    
    
    
    
    
    
    1,887
    
    
    
    17,283
    
    
    
    (1,826
    )
    
    
    
    
    
    
    17,344Income (loss) before equity in earnings of joint ventures and
minority interest
    
    
    (192,712
    )
    
    
    (2,221
    )
    
    
    (145,978
    )
    
    
    33,686
    
    
    
    (8,629
    )
    
    
    
    
    
    
    (315,854
    )Equity earnings in joint ventures and subsidiaries, net
    
    
    (114,071
    )
    
    
    (306,783
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    431,655
    
    
    
    10,801Minority interest, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,951
    )
    
    
    
    
    
    
    
    
    
    
    (3,951
    )Net income (loss)
    
    $
    (306,783
    )
    
    $
    (309,004
    )
    
    $
    (145,978
    )
    
    $
    29,735
    
    
    $
    (8,629
    )
    
    $
    431,655
    
    
    $
    (309,004
    )
 22




---



##### Table of Contents



TOWER AUTOMOTIVE, INC.
Consolidating Statements of Cash Flows for the Nine Months Ended September 30, 2005
(Amounts in thousands  unaudited)
 Non-Guarantor
    
    
    Non-GuarantorR. J. Tower
    
    
    Parent
    
    
    Guarantor
    
    
    Restricted
    
    
    UnrestrictedCorporation
    
    
    Guarantor
    
    
    Companies
    
    
    Companies
    
    
    Companies
    
    
    Eliminations
    
    
    ConsolidatedOPERATING ACTIVITIES:Net income (loss)
    
    $
    (306,783
    )
    
    $
    (309,004
    )
    
    $
    (145,978
    )
    
    $
    29,735
    
    
    $
    (8,629
    )
    
    $
    431,655
    
    
    $
    (309,004
    )Adjustments required to reconcile net income to net cash
provided by (used in) operating activitiesChapter 11 and related reorganization expenses, net
    
    
    133,171
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    133,171Non-cash restructuring charge
    
    
    
    
    
    
    
    
    
    
    101,632
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    101,632Depreciation
    
    
    249
    
    
    
    
    
    
    
    81,274
    
    
    
    32,936
    
    
    
    21,329
    
    
    
    
    
    
    
    135,788Deferred income tax provision (benefit)
    
    
    
    
    
    
    
    
    
    
    (1,006
    )
    
    
    12,874
    
    
    
    995
    
    
    
    
    
    
    
    12,863Equity in earnings of joint ventures, net
    
    
    (10,801
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,801
    )Changes in working capital and other operating items
    
    
    254,199
    
    
    
    2,445
    
    
    
    4,169
    
    
    
    (17,787
    )
    
    
    (821
    )
    
    
    (431,655
    )
    
    
    (189,450
    )Net cash provided by (used in) operating activities
    
    
    70,035
    
    
    
    (306,559
    )
    
    
    40,091
    
    
    
    57,758
    
    
    
    12,874
    
    
    
    
    
    
    
    (125,801
    )INVESTING ACTIVITIES:Cash
disbursed for purchases of property, plant and equipment
    
    
    
    
    
    
    
    
    
    
    (34,741
    )
    
    
    (44,428
    )
    
    
    (25,371
    )
    
    
    
    
    
    
    (104,540
    )Other, net
    
    
    (306,559
    )
    
    
    306,559
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net cash provided by (used in) investing activities
    
    
    (306,559
    )
    
    
    306,559
    
    
    
    (34,741
    )
    
    
    (44,428
    )
    
    
    (25,371
    )
    
    
    
    
    
    
    (104,540
    )FINANCING ACTIVITIES:Proceeds from pre-petition borrowings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,919
    
    
    
    22,783
    
    
    
    
    
    
    
    36,702Repayments of pre-petition borrowings
    
    
    (425,000
    )
    
    
    
    
    
    
    (5,370
    )
    
    
    (25,089
    )
    
    
    (10,124
    )
    
    
    
    
    
    
    (465,583
    )Proceeds from DIP credit facility
    
    
    1,054,285
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,054,285Repayments of DIP credit facility borrowings
    
    
    (498,647
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (498,647
    )Net cash provided by (used for) financing activities
    
    
    130,638
    
    
    
    
    
    
    
    (5,370
    )
    
    
    (11,170
    )
    
    
    12,659
    
    
    
    
    
    
    
    126,757NET CHANGE IN CASH AND CASH EQUIVALENTS
    
    
    (105,886
    )
    
    
    
    
    
    
    (20
    )
    
    
    2,160
    
    
    
    162
    
    
    
    
    
    
    
    (103,584
    )CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    107,599
    
    
    
    
    
    
    
    (517
    )
    
    
    41,948
    
    
    
    71
    
    
    
    
    
    
    
    149,101CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    1,713
    
    
    $
    
    
    
    $
    (537
    )
    
    $
    44,108
    
    
    $
    233
    
    
    $
    
    
    
    $
    45,517
 23




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##### Table of Contents



TOWER AUTOMOTIVE, INC.
Consolidating Balance Sheets at December 31, 2004
(Amounts in thousands)
 Non-Guarantor
    
    
    Non-GuarantorR. J. Tower
    
    
    Parent
    
    
    Guarantor
    
    
    Restricted
    
    
    UnrestrictedCorporation
    
    
    Guarantor
    
    
    Companies
    
    
    Companies
    
    
    Companies
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    107,599
    
    
    $
    
    
    
    $
    (517
    )
    
    $
    41,948
    
    
    $
    71
    
    
    $
    
    
    
    $
    149,101Accounts receivable
    
    
    47,373
    
    
    
    
    
    
    
    70,636
    
    
    
    188,352
    
    
    
    39,670
    
    
    
    
    
    
    
    346,031Inventories
    
    
    (372
    )
    
    
    
    
    
    
    75,469
    
    
    
    72,050
    
    
    
    11,887
    
    
    
    
    
    
    
    159,034Prepaid tooling and other
    
    
    4,427
    
    
    
    
    
    
    
    54,618
    
    
    
    53,947
    
    
    
    11,946
    
    
    
    
    
    
    
    124,938Total current assets
    
    
    159,027
    
    
    
    
    
    
    
    200,206
    
    
    
    356,297
    
    
    
    63,574
    
    
    
    
    
    
    
    779,104Property, plant and equipment, net
    
    
    601
    
    
    
    
    
    
    
    690,646
    
    
    
    319,785
    
    
    
    194,608
    
    
    
    
    
    
    
    1,205,640Investments in joint ventures
    
    
    227,740
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    227,740Investments in and advances to (from) affiliates
    
    
    526,173
    
    
    
    255,049
    
    
    
    (453,177
    )
    
    
    (216,603
    )
    
    
    4,278
    
    
    
    (115,720
    )
    
    
    Goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    174,563
    
    
    
    
    
    
    
    
    
    
    
    174,563Other assets, net
    
    
    37,307
    
    
    
    5,410
    
    
    
    90,194
    
    
    
    28,616
    
    
    
    12,200
    
    
    
    
    
    
    
    173,727$
    950,848
    
    
    $
    260,459
    
    
    $
    527,869
    
    
    $
    662,658
    
    
    $
    274,660
    
    
    $
    (115,720
    )
    
    $
    2,560,774Liabilities and Stockholders Investment (Deficit)Current liabilities:Current maturities of long-term debt and capital lease
obligations
    
    $
    3,750
    
    
    $
    
    
    
    $
    6,271
    
    
    $
    24,460
    
    
    $
    98,675
    
    
    $
    
    
    
    $
    133,156Accounts payable
    
    
    29,052
    
    
    
    
    
    
    
    366,329
    
    
    
    184,876
    
    
    
    57,861
    
    
    
    
    
    
    
    638,118Accrued liabilities
    
    
    70,421
    
    
    
    918
    
    
    
    143,643
    
    
    
    57,941
    
    
    
    13,339
    
    
    
    
    
    
    
    286,262Total current liabilities
    
    
    103,223
    
    
    
    918
    
    
    
    516,243
    
    
    
    267,277
    
    
    
    169,875
    
    
    
    
    
    
    
    1,057,536Non-Current Liabilities:Long-term debt, net of current maturities
    
    
    874,358
    
    
    
    258,750
    
    
    
    57,126
    
    
    
    11,855
    
    
    
    37,473
    
    
    
    
    
    
    
    1,239,562Convertible senior debenture
    
    
    
    
    
    
    121,723
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    121,723Obligations under capital leases, net of current maturities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    36,472
    
    
    
    351
    
    
    
    
    
    
    
    36,823Other noncurrent liabilities
    
    
    40,001
    
    
    
    
    
    
    
    149,776
    
    
    
    30,956
    
    
    
    5,329
    
    
    
    
    
    
    
    226,062Total noncurrent liabilities
    
    
    914,359
    
    
    
    380,473
    
    
    
    206,902
    
    
    
    79,283
    
    
    
    43,153
    
    
    
    
    
    
    
    1,624,170Stockholders investment (deficit)
    
    
    (66,734
    )
    
    
    (120,932
    )
    
    
    (195,276
    )
    
    
    316,098
    
    
    
    61,632
    
    
    
    (115,720
    )
    
    
    (120,932
    )$
    950,848
    
    
    $
    260,459
    
    
    $
    527,869
    
    
    $
    662,658
    
    
    $
    274,660
    
    
    $
    (115,720
    )
    
    $
    2,560,774
 24




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##### Table of Contents



TOWER AUTOMOTIVE, INC.
Consolidating Statement of Operations for the Three Months Ended September 30, 2004
(Amounts in thousands  unaudited)
 Non-Guarantor
    
    
    Non-GuarantorR. J. Tower
    
    
    Parent
    
    
    Guarantor
    
    
    Restricted
    
    
    UnrestrictedCorporation
    
    
    Guarantor
    
    
    Companies
    
    
    Companies
    
    
    Companies
    
    
    Eliminations
    
    
    ConsolidatedRevenues
    
    $
    
    
    
    $
    
    
    
    $
    454,613
    
    
    $
    193,155
    
    
    $
    74,566
    
    
    $
    
    
    
    $
    722,334Cost of sales
    
    
    (1,536
    )
    
    
    
    
    
    
    447,552
    
    
    
    173,162
    
    
    
    70,772
    
    
    
    
    
    
    
    689,950Gross profit
    
    
    1,536
    
    
    
    
    
    
    
    7,061
    
    
    
    19,993
    
    
    
    3,794
    
    
    
    
    
    
    
    32,384Selling, general and administrative expenses
    
    
    (8,534
    )
    
    
    
    
    
    
    29,622
    
    
    
    9,993
    
    
    
    2,422
    
    
    
    
    
    
    
    33,503Restructuring and asset impairment charge
    
    
    759
    
    
    
    
    
    
    
    1,261
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,020Operating income (loss)
    
    
    9,311
    
    
    
    
    
    
    
    (23,822
    )
    
    
    10,000
    
    
    
    1,372
    
    
    
    
    
    
    
    (3,139
    )Interest expense (income), net
    
    
    24,513
    
    
    
    6,849
    
    
    
    1,824
    
    
    
    973
    
    
    
    1,902
    
    
    
    
    
    
    
    36,061Unrealized gain on derivative
    
    
    
    
    
    
    (5,710
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,710
    )Income (loss) before provision for income taxes, equity in
earnings of joint ventures and minority interest
    
    
    (15,202
    )
    
    
    (1,139
    )
    
    
    (25,646
    )
    
    
    9,027
    
    
    
    (530
    )
    
    
    
    
    
    
    (33,490
    )Provision (benefit) for income taxes
    
    
    (5,168
    )
    
    
    (1,700
    )
    
    
    (8,721
    )
    
    
    3,069
    
    
    
    (180
    )
    
    
    
    
    
    
    (12,700
    )Income (loss) before equity in earnings of joint ventures
and minority interest
    
    
    (10,034
    )
    
    
    561
    
    
    
    (16,925
    )
    
    
    5,958
    
    
    
    (350
    )
    
    
    
    
    
    
    (20,790
    )Equity earnings in joint ventures and subsidiaries, net
    
    
    (10,745
    )
    
    
    (20,779
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33,648
    
    
    
    2,124Minority interest, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,552
    )
    
    
    
    
    
    
    
    
    
    
    (1,552
    )Net income (loss)
    
    $
    (20,779
    )
    
    $
    (20,218
    )
    
    $
    (16,925
    )
    
    $
    4,406
    
    
    $
    (350
    )
    
    $
    33,648
    
    
    $
    (20,218
    )
 25




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##### Table of Contents



TOWER AUTOMOTIVE, INC.
Consolidating Statement of Operations for the Nine Months Ended September 30, 2004
(Amounts in thousands  unaudited)
 Non-Guarantor
    
    
    Non-GuarantorR. J. Tower
    
    
    Parent
    
    
    Guarantor
    
    
    Restricted
    
    
    UnrestrictedCorporation
    
    
    Guarantor
    
    
    Companies
    
    
    Companies
    
    
    Companies
    
    
    Eliminations
    
    
    ConsolidatedRevenues
    
    $
    
    
    
    $
    
    
    
    $
    1,487,340
    
    
    $
    587,153
    
    
    $
    212,290
    
    
    $
    
    
    
    $
    2,286,783Cost of sales
    
    
    (5,784
    )
    
    
    
    
    
    
    1,414,990
    
    
    
    517,927
    
    
    
    197,907
    
    
    
    
    
    
    
    2,125,040Gross profit
    
    
    5,784
    
    
    
    
    
    
    
    72,350
    
    
    
    69,226
    
    
    
    14,383
    
    
    
    
    
    
    
    161,743Selling, general and administrative expenses
    
    
    (24,294
    )
    
    
    
    
    
    
    90,421
    
    
    
    29,267
    
    
    
    7,404
    
    
    
    
    
    
    
    102,798Restructuring and asset impairment charge
    
    
    1,203
    
    
    
    
    
    
    
    (4,486
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,283
    )Operating income (loss)
    
    
    28,875
    
    
    
    
    
    
    
    (13,585
    )
    
    
    39,959
    
    
    
    6,979
    
    
    
    
    
    
    
    62,228Interest expense (income), net
    
    
    72,402
    
    
    
    23,501
    
    
    
    (82
    )
    
    
    3,871
    
    
    
    5,717
    
    
    
    
    
    
    
    105,409Unrealized gain on derivative
    
    
    
    
    
    
    (3,860
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,860
    )Income (loss) before provision for income taxes, equity in
earnings of joint ventures and minority interest
    
    
    (43,527
    )
    
    
    (19,641
    )
    
    
    (13,503
    )
    
    
    36,088
    
    
    
    1,262
    
    
    
    
    
    
    
    (39,321
    )Provision (benefit) for income taxes
    
    
    (14,534
    )
    
    
    (7,991
    )
    
    
    (4,591
    )
    
    
    12,269
    
    
    
    429
    
    
    
    
    
    
    
    (14,418
    )Income (loss) before equity in earnings of joint ventures
and minority interest
    
    
    (28,993
    )
    
    
    (11,650
    )
    
    
    (8,912
    )
    
    
    23,819
    
    
    
    833
    
    
    
    
    
    
    
    (24,903
    )Equity earnings in joint ventures and subsidiaries, net
    
    
    20,054
    
    
    
    793
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,754
    )
    
    
    9,093Minority interest, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,779
    )
    
    
    
    
    
    
    
    
    
    
    (4,779
    )Gain on sale of joint venture investment, net
    
    
    9,732
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,732Net income (loss)
    
    $
    793
    
    
    $
    (10,857
    )
    
    $
    (8,912
    )
    
    $
    19,040
    
    
    $
    833
    
    
    $
    (11,754
    )
    
    $
    (10,857
    )
 26




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##### Table of Contents



TOWER AUTOMOTIVE, INC.
Consolidating Statements of Cash Flows for the Nine Months Ended
September 30, 2004 (as corrected)
(Amounts in thousands  unaudited)
 Non-Guarantor
    
    
    Non-GuarantorR. J. Tower
    
    
    Parent
    
    
    Guarantor
    
    
    Restricted
    
    
    UnrestrictedCorporation
    
    
    Guarantor
    
    
    Companies
    
    
    Companies
    
    
    Companies
    
    
    Eliminations
    
    
    ConsolidatedOPERATING ACTIVITIES:Net income (loss)
    
    $
    2,106
    
    
    $
    (10,857
    )
    
    $
    (8,912
    )
    
    $
    19,040
    
    
    $
    833
    
    
    $
    (13,067
    )
    
    $
    (10,857
    )Adjustments required to reconcile net income to net cash
provided by (used in) operating activitiesNon-cash restructuring and asset impairment reversal
    
    
    
    
    
    
    
    
    
    
    (6,276
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,276
    )Depreciation
    
    
    217
    
    
    
    
    
    
    
    70,852
    
    
    
    30,484
    
    
    
    12,801
    
    
    
    
    
    
    
    114,354Deferred income tax provision (benefit)
    
    
    (21,698
    )
    
    
    
    
    
    
    (242
    )
    
    
    (3,909
    )
    
    
    650
    
    
    
    
    
    
    
    (25,199
    )Gain on sale of joint venture investment
    
    
    (9,732
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,732
    )Equity in earnings of joint ventures, net
    
    
    (9,093
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,093
    )Changes in working capital and other operating items
    
    
    18,532
    
    
    
    (23,146
    )
    
    
    (64,499
    )
    
    
    (2,433
    )
    
    
    16,321
    
    
    
    13,067
    
    
    
    (42,158
    )Net cash provided by (used in) operating activities
    
    
    (19,668
    )
    
    
    (34,003
    )
    
    
    (9,077
    )
    
    
    43,182
    
    
    
    30,605
    
    
    
    
    
    
    
    11,039INVESTING ACTIVITIES:Cash
disbursed for purchases of property, plant and equipment
    
    
    (581
    )
    
    
    
    
    
    
    (107,324
    )
    
    
    (23,648
    )
    
    
    (16,027
    )
    
    
    
    
    
    
    (147,580
    )Divestitures and other
    
    
    (57,147
    )
    
    
    108,847
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    51,700Acquisitions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21,299
    )
    
    
    
    
    
    
    (21,299
    )Net cash provided by (used in) investing activities
    
    
    (57,728
    )
    
    
    108,847
    
    
    
    (107,324
    )
    
    
    (23,648
    )
    
    
    (37,326
    )
    
    
    
    
    
    
    (117,179
    )FINANCING ACTIVITIES:Proceeds from borrowings
    
    
    421,509
    
    
    
    125,000
    
    
    
    1
    
    
    
    5,657
    
    
    
    27,870
    
    
    
    
    
    
    
    580,037Repayment of debt
    
    
    (240,458
    )
    
    
    (199,984
    )
    
    
    (1,784
    )
    
    
    (24,650
    )
    
    
    (23,015
    )
    
    
    
    
    
    
    (489,891
    )Net proceeds from issuance of stock
    
    
    (65
    )
    
    
    140
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    75Net cash provided by (used for) financing activities
    
    
    180,986
    
    
    
    (74,844
    )
    
    
    (1,783
    )
    
    
    (18,993
    )
    
    
    4,855
    
    
    
    
    
    
    
    90,221NET CHANGE IN CASH AND CASH EQUIVALENTS
    
    
    103,590
    
    
    
    
    
    
    
    (118,184
    )
    
    
    541
    
    
    
    (1,866
    )
    
    
    
    
    
    
    (15,919
    )CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    
    
    
    
    
    
    
    
    118,352
    
    
    
    40,419
    
    
    
    2,128
    
    
    
    
    
    
    
    160,899CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    103,590
    
    
    $
    
    
    
    $
    168
    
    
    $
    40,960
    
    
    $
    262
    
    
    $
    
    
    
    $
    144,980
 27




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Going Concern
  Overview
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Three Months Ended September 30, 2005 Compared to the Three Months Ended September 30, 2004
 Revenues.
 Gross Profit and Gross Margin.
 Selling, General and Administrative Expenses.
 Interest Expense, Net
 Chapter 11 and Related Reorganization Items.
 Unrealized Gain on Derivative.
 Provision for Income Taxes.
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Equity in Earnings of Joint Ventures, Net of Tax.
 Minority Interest, Net of Tax
 Net Loss.
 Nine Months Ended September 30, 2005 Compared to the Nine Months Ended September 30, 2004
 Revenues.
 Gross Profit and Gross Margin.
 Selling, General and Administrative Expenses.
 Interest Expense, Net
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Chapter 11 and Related Reorganization Items.
 Unrealized Loss on Derivative
 Provision for Income Taxes.
 Equity in Earnings of Joint Ventures, Net of Tax.
 Minority Interest, Net of Tax
 Gain on Sale of Joint Venture, Net of Tax.
 Net Loss.
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Restructuring and Asset Impairment












Liquidity and Capital Resources
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34




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Chapter 11 Impact
     DIP Financing
      Back-Stop
Agreement
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Stock Options
   Market Risk
      Opportunities
  36




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Disclosure Regarding Forward-Looking Statements
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk.
  
 Item 4. Controls and Procedures.
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
    
    Incorrect material receiving practices;
    
    Insufficient procedures to record and/or monitor the movement of inventory with
external vendors;
    
    Insufficient procedures to update purchase orders and other necessary documents for
changes in internal and external vendors;
    
    Turnover in key positions;
    
    Insufficient processes to match payments to specific vendor invoices;
    
    Insufficient oversight of purchase order maintenance and material movement; and
    
    Ineffective mitigating controls to compensate for other control deficiencies.
  
    
    Enhanced oversight of locations with turnover in key positions;
    
    Enhanced procedures to ensure proper tracking and entry of material receipts/movements;
    
    Enhanced procedures to ensure necessary documents are updated for vendor changes;
    
    Additional training on systems and processes;
    
    Automation of the cash application process as part of systems improvements/upgrades;
    
    Reinforcement of existing policies requiring account reconciliations be performed
monthly; and
    
    Increased monitoring activities.
   
    
    Insufficient support for journal entries;
    
    Insufficient review of journal entries prior to posting;
    
    Insufficient review of account reconciliations; and
    
    Ineffective monitoring of certain accounts.
  
    
    Reinforcement of existing policies regarding support and approval of journal
entries prior to posting;
    
    Reinforcement of existing policies regarding reviews of account reconciliations;
and
    
    Additional reviews of account reconciliations by regional finance personnel.
     
    
    Implementation of its standard Enterprise Resource Planning (ERP) software at its
Korean operations. The Company has a centrally administered software implementation
process to ensure: data integrity, appropriate testing of functionality, compliance with
global security and access policies and appropriate changes to assure that business
processes are documented and appropriate in the circumstances.
    
    Beginning the centralization of purchasing and accounts payable processing in its North
American operations.
    
    Beginning the standardization of time and attendance systems in its North American
operations through the utilization of a common time and attendance system.
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PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
   
 Item 6. Exhibits.
 10.24
    
    Fifth Amendment to Revolving Credit, Term Loan and Guaranty Agreement, Dated
October 3, 2005.31.1
    
    Certification of the 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 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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TOWER AUTOMOTIVE, INC.Registrant
 Date:
January 6, 2006
    
    /s/ Christopher T. Hatto

  Christopher T. HattoChief Accounting Officer
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Exhibit Index
 Exhibit no.
    
    Description of Exhibit10.24
    
    Fifth Amendment to Revolving Credit, Term Loan and Guaranty Agreement, Dated
October 3, 2005.31.1
    
    Certification of the 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 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.