##### 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 June 30, 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
    
    41-1746238(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)27175 Haggerty Road 
Novi, Michigan
    
    48377(Address of principal executive offices)
    
    (Zip Code)
 (248) 675-6000
 
  þ o
  o o þ
  o þ




---



##### 



TA Delaware, Inc.
Form 10-Q
 Table of Contents
 PagePART I. Financial InformationItem 1.
    
    Financial Statements (unaudited):Condensed Consolidated Balance Sheets at June 30, 2007 and December 31, 2006
    
    
    1Condensed Consolidated Statements of Operations for Three and Six Months Ended June 30, 2007 and
2006
    
    
    2Condensed Consolidated Statements of Cash Flows for Six Months Ended June 30, 2007 and 2006
    
    
    3Notes to Condensed Consolidated Financial Statements
    
    
    4Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    31Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    38Item 4.
    
    Controls and Procedures
    
    
    39PART II. Other InformationItem 1.
    
    Legal Proceedings
    
    
    40Item 1A.
    
    Risk Factors
    
    
    40Item 6.
    
    Exhibits
    
    
    40SignaturesCertification of Post-Consummation Trust Administrator Pursuant to Rules 13a-15(e) and 15d-15(e)Certification Pursuant to Section 906Certification of the Post-Communication Trust Administrator Pursuant to Section 302Certification of the Post-Communication Trust Administrator Pursuant to Section 906




---



##### Table of Contents



PART 1  FINANCIAL INFORMATION
 
 ITEM 1. Financial Statements.
 
 TA DELAWARE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands  unaudited)
 June 30, 2007
    
    
    December 31, 2006ASSETSCurrent assets:Cash and cash equivalents
    
    $
    87,235
    
    
    $
    64,275Accounts receivable
    
    
    406,336
    
    
    
    339,650Inventories
    
    
    110,665
    
    
    
    107,186Prepaid tooling and other
    
    
    93,854
    
    
    
    94,018Assets of discontinued operations
    
    
    
    
    
    
    24,738Total current assets
    
    
    698,090
    
    
    
    629,867Property, plant and equipment, net
    
    
    915,237
    
    
    
    952,942Investments in joint ventures
    
    
    262,167
    
    
    
    253,170Goodwill
    
    
    173,902
    
    
    
    169,617Other assets, net
    
    
    85,833
    
    
    
    101,398Total assets
    
    $
    2,135,229
    
    
    $
    2,106,994LIABILITIES AND STOCKHOLDERS DEFICITCurrent liabilities not subject to compromise:Current maturities of long-term debt and capital lease obligations
    
    $
    86,423
    
    
    $
    82,849Current portion of debtor-in-possession borrowings
    
    
    651,000
    
    
    
    595,000Accounts payable
    
    
    368,021
    
    
    
    345,296Accrued liabilities
    
    
    174,453
    
    
    
    166,754Liabilities of discontinued operations
    
    
    
    
    
    
    20,503Total current liabilities
    
    
    1,279,897
    
    
    
    1,210,402Liabilities subject to compromise
    
    
    1,282,648
    
    
    
    1,284,782Non-current liabilities not subject to compromise:Long-term debt, net of current maturities
    
    
    132,304
    
    
    
    133,610Capital lease obligations, net of current maturities
    
    
    28,733
    
    
    
    29,852Other non-current liabilities
    
    
    131,589
    
    
    
    111,020Total non-current liabilities
    
    
    292,626
    
    
    
    274,482Stockholders deficit:Common stock
    
    
    666
    
    
    
    666Additional paid-in-capital
    
    
    682,084
    
    
    
    682,031Accumulated deficit
    
    
    (1,374,719
    )
    
    
    (1,308,906
    )Accumulated other comprehensive income
    
    
    21,351
    
    
    
    12,861Treasury stock
    
    
    (49,324
    )
    
    
    (49,324
    )Total stockholders deficit
    
    
    (719,942
    )
    
    
    (662,672
    )Total liabilities and stockholders deficit
    
    $
    2,135,229
    
    
    $
    2,106,994
  1




---



##### Table of Contents



TA DELAWARE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts  unaudited)
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenues
    
    $
    663,353
    
    
    $
    677,473
    
    
    $
    1,281,804
    
    
    $
    1,348,231Cost of sales
    
    
    587,528
    
    
    
    620,926
    
    
    
    1,172,199
    
    
    
    1,242,791Gross profit
    
    
    75,825
    
    
    
    56,547
    
    
    
    109,605
    
    
    
    105,440Selling, general and administrative expenses
    
    
    33,267
    
    
    
    33,044
    
    
    
    65,226
    
    
    
    67,081Restructuring and asset impairment charges, net
    
    
    18,324
    
    
    
    28,342
    
    
    
    24,151
    
    
    
    30,864Other operating income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (520
    )Operating income (loss)
    
    
    24,234
    
    
    
    (4,839
    )
    
    
    20,228
    
    
    
    8,015Interest expense (contractual interest of $48,835 and
$95,798 in 2007 and $40,605 and $79,162 in 2006)
    
    
    30,256
    
    
    
    22,340
    
    
    
    58,770
    
    
    
    42,822Interest income
    
    
    (1,099
    )
    
    
    (756
    )
    
    
    (1,557
    )
    
    
    (1,212
    )Chapter 11 and related reorganization items
    
    
    11,804
    
    
    
    43,662
    
    
    
    20,779
    
    
    
    55,271Loss before provision for income taxes, equity in
earnings of joint ventures, and minority interest
    
    
    (16,727
    )
    
    
    (70,085
    )
    
    
    (57,764
    )
    
    
    (88,866
    )Provision for income taxes
    
    
    8,265
    
    
    
    11,885
    
    
    
    11,653
    
    
    
    9,730Loss before equity in earnings of joint ventures,
and minority interest
    
    
    (24,992
    )
    
    
    (81,970
    )
    
    
    (69,417
    )
    
    
    (98,596
    )Equity in earnings of joint ventures, net of tax
    
    
    5,471
    
    
    
    7,533
    
    
    
    8,997
    
    
    
    14,217Minority interest, net of tax
    
    
    (2,559
    )
    
    
    (2,206
    )
    
    
    (4,748
    )
    
    
    (3,172
    )Loss from continuing operations
    
    
    (22,080
    )
    
    
    (76,643
    )
    
    
    (65,168
    )
    
    
    (87,551
    )Income (loss) from discontinued operations
    
    
    
    
    
    
    1,258
    
    
    
    (306
    )
    
    
    1,829Net loss
    
    $
    (22,080
    )
    
    $
    (75,385
    )
    
    $
    (65,474
    )
    
    $
    (85,722
    )Basic and diluted loss per shareLoss from continuing operations
    
    $
    (0.38
    )
    
    $
    (1.31
    )
    
    $
    (1.10
    )
    
    $
    (1.49
    )Income (loss) from discontinued operations
    
    
    
    
    
    
    0.02
    
    
    
    (0.01
    )
    
    
    0.03Net loss
    
    $
    (0.38
    )
    
    $
    (1.29
    )
    
    $
    (1.11
    )
    
    $
    (1.46
    )Weighted average basic and diluted
shares outstanding
    
    
    58,866
    
    
    
    58,661
    
    
    
    58,778
    
    
    
    58,657
  2




---



##### Table of Contents



TA DELAWARE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands  unaudited)
 Six Months Ended June 30,2007
    
    
    2006OPERATING ACTIVITIES:Net loss
    
    $
    (65,474
    )
    
    $
    (85,722
    )Adjustments to reconcile net loss to net cash provided by operating activities:Non-cash Chapter 11 and related reorganization items, net
    
    
    5,782
    
    
    
    38,682Non-cash restructuring and impairment, net
    
    
    23,351
    
    
    
    26,313Depreciation
    
    
    77,957
    
    
    
    81,405Deferred income tax benefit
    
    
    6,525
    
    
    
    (7,448
    )Equity in earnings of joint ventures, net
    
    
    (8,997
    )
    
    
    (14,217
    )Non-cash minority interest
    
    
    3,082
    
    
    
    81Change in working capital and other operating items
    
    
    (26,649
    )
    
    
    (10,075
    )Net cash provided by operating activities
    
    
    15,577
    
    
    
    29,019INVESTING ACTIVITIES:Cash disbursed for purchases of property, plant and equipment
    
    
    (47,666
    )
    
    
    (60,359
    )Cash proceeds from asset disposal
    
    
    
    
    
    
    32,664Net cash used in investing activities
    
    
    (47,666
    )
    
    
    (27,695
    )FINANCING ACTIVITIES:Proceeds from borrowings
    
    
    17,677
    
    
    
    20,894Repayments of borrowings
    
    
    (18,628
    )
    
    
    (43,886
    )Proceeds from DIP credit facility
    
    
    423,000
    
    
    
    345,500Repayments of DIP credit facility
    
    
    (367,000
    )
    
    
    (269,500
    )Net cash provided by financing activities
    
    
    55,049
    
    
    
    53,008NET CHANGE IN CASH AND CASH EQUIVALENTS
    
    
    22,960
    
    
    
    54,332Cash and cash equivalents, beginning of period
    
    
    64,275
    
    
    
    65,791CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    87,235
    
    
    $
    120,123Supplemental Cash Flow Information:Interest paid, net of amounts capitalized
    
    $
    52,534
    
    
    $
    37,981Income taxes paid (refunded)
    
    $
    6,102
    
    
    $
    4,140Reorganization payments
    
    $
    14,996
    
    
    $
    16,601Non-cash investing activities:Net decrease in liabilities for purchases of property, plant and equipment
    
    $
    (16,420
    )
    
    $
    (12,321
    )
  3




---



##### 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




---



##### Table of Contents



Note 2. Chapter 11 Reorganization Proceedings
    Financial Statement Classification
    June 30,
    
    
    December 31,2007
    
    
    2006Debt:5.75% Convertible senior debentures
    
    $
    124,999
    
    
    $
    124,9996.75% Subordinated debentures
    
    
    258,750
    
    
    
    258,7509.25% Senior Euro notes
    
    
    203,115
    
    
    
    197,94012% Senior notes
    
    
    258,000
    
    
    
    258,000Total debt
    
    
    844,864
    
    
    
    839,689Pension and other post-retirement benefits
    
    
    139,878
    
    
    
    142,841Pre-petition accounts payable and accruals
    
    
    160,857
    
    
    
    165,203Accrued interest on debt subject to compromise
    
    
    21,343
    
    
    
    21,343Executory contracts
    
    
    115,706
    
    
    
    115,706Total liabilities subject to compromise
    
    $
    1,282,648
    
    
    $
    1,284,782
 5




---



##### Table of Contents



Three Months Ended June 30,
    
    
    Six Months Ended June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Professional fees directly related to the filing
    
    $
    13,309
    
    
    $
    12,556
    
    
    $
    23,110
    
    
    $
    21,136Key employee retention costs
    
    
    
    
    
    
    875
    
    
    
    
    
    
    
    3,836Estimated executory contract rejection damages
    
    
    (6
    )
    
    
    30,231
    
    
    
    (6
    )
    
    
    30,299Other reversals directly attributable to the
Companys reorganization
    
    
    (1,499
    )
    
    
    
    
    
    
    (2,325
    )
    
    
    Total
    
    $
    11,804
    
    
    $
    43,662
    
    
    $
    20,779
    
    
    $
    55,271
  6




---



##### Table of Contents



Debtors Financial Statements
  Debtors Condensed Combined Balance Sheet
Debtors- in-Possession
 June 30,
    
    
    December 31,2007
    
    
    2006ASSETSCurrent assets:Cash and cash equivalents
    
    $
    1,778
    
    
    $
    5,705Accounts receivable
    
    
    125,698
    
    
    
    81,713Inventories
    
    
    39,850
    
    
    
    43,438Prepaid tooling and other
    
    
    13,597
    
    
    
    23,408Assets of discontinued operations
    
    
    
    
    
    
    24,738Total current assets
    
    
    180,923
    
    
    
    179,002Property, plant and equipment, net
    
    
    445,691
    
    
    
    474,897Investments in and advances to non-debtor subsidiaries
    
    
    919,749
    
    
    
    868,374Other assets, net
    
    
    16,308
    
    
    
    32,360Total assets
    
    $
    1,562,671
    
    
    $
    1,554,633LIABILITIES AND STOCKHOLDERS DEFICITCurrent liabilities not subject to compromise:Current maturities of long-term debt and capital lease obligations
    
    $
    
    
    
    $
    4Current portion of debtor-in-possession borrowings
    
    
    651,000
    
    
    
    595,000Accounts payable
    
    
    116,234
    
    
    
    101,804Accrued liabilities
    
    
    94,569
    
    
    
    92,322Liabilities of discontinued operations
    
    
    
    
    
    
    20,503Total current liabilities
    
    
    861,803
    
    
    
    809,633Liabilities subject to compromise
    
    
    1,299,011
    
    
    
    1,301,145Non-current liabilities not subject to compromise:Long-term debt, net of current maturities
    
    
    84,751
    
    
    
    84,751Other non-current liabilities
    
    
    37,048
    
    
    
    21,776Total non-current liabilities
    
    
    121,799
    
    
    
    106,527Total stockholders deficit
    
    
    (719,942
    )
    
    
    (662,672
    )Total liabilities and stockholders deficit
    
    $
    1,562,671
    
    
    $
    1,554,633
 7




---



##### Table of Contents



Debtors Condensed Combined Statement of Operations
Debtors-in-Possession
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenues
    
    $
    279,619
    
    
    $
    318,958
    
    
    $
    542,595
    
    
    $
    651,646Cost of sales
    
    
    250,780
    
    
    
    297,585
    
    
    
    511,458
    
    
    
    615,776Gross profit
    
    
    28,839
    
    
    
    21,373
    
    
    
    31,137
    
    
    
    35,870Selling, general and administrative expenses
    
    
    15,452
    
    
    
    18,229
    
    
    
    30,078
    
    
    
    39,487Restructuring and asset impairment charges, net
    
    
    22,410
    
    
    
    7,853
    
    
    
    27,527
    
    
    
    10,264Other operating (income) loss
    
    
    1,137
    
    
    
    (810
    )
    
    
    2,287
    
    
    
    (2,115
    )Operating loss
    
    
    (10,160
    )
    
    
    (3,899
    )
    
    
    (28,755
    )
    
    
    (11,766
    )Interest expense
    
    
    27,165
    
    
    
    19,693
    
    
    
    53,113
    
    
    
    37,389Interest income
    
    
    (354
    )
    
    
    (638
    )
    
    
    (791
    )
    
    
    (959
    )Inter-company interest income
    
    
    (8,245
    )
    
    
    (6,436
    )
    
    
    (16,271
    )
    
    
    (12,530
    )Chapter 11 and related reorganization items
    
    
    11,804
    
    
    
    43,662
    
    
    
    20,779
    
    
    
    55,271Loss before provision for income taxes, equity in
earnings (loss) of joint ventures and equity in
earnings from non-Debtor subsidiaries
    
    
    (40,530
    )
    
    
    (60,180
    )
    
    
    (85,585
    )
    
    
    (90,937
    )Provision for income taxes
    
    
    1,104
    
    
    
    1,166
    
    
    
    485
    
    
    
    2,104Loss before equity in earnings of joint ventures
and equity in earnings (loss) of non-Debtor
subsidiaries
    
    
    (41,634
    )
    
    
    (61,346
    )
    
    
    (86,070
    )
    
    
    (93,041
    )Equity in earnings (loss) of joint ventures, net of tax
    
    
    (67
    )
    
    
    68
    
    
    
    (118
    )
    
    
    136Equity in earnings (losses) of non-Debtor subsidiaries
    
    
    19,621
    
    
    
    (15,365
    )
    
    
    21,020
    
    
    
    5,354Loss from continuing operations
    
    
    (22,080
    )
    
    
    (76,643
    )
    
    
    (65,168
    )
    
    
    (87,551
    )Income (loss) from discontinued operations
    
    
    
    
    
    
    1,258
    
    
    
    (306
    )
    
    
    1,829Net loss
    
    $
    (22,080
    )
    
    $
    (75,385
    )
    
    $
    (65,474
    )
    
    $
    (85,722
    )
 8




---



##### Table of Contents



Debtors Condensed Combined Statements of Cash Flows
Debtors- in-Possession
(Amounts in thousands)
 Six Months Ended June 30,2007
    
    
    2006OPERATING ACTIVITIES:Net loss
    
    $
    (65,474
    )
    
    $
    (85,722
    )Adjustments required to reconcile net loss to net cash used in operating activities:Non-cash Chapter 11 and related reorganization items, net
    
    
    5,782
    
    
    
    38,682Non-cash restructuring and impairment, net
    
    
    23,979
    
    
    
    10,986Depreciation
    
    
    42,660
    
    
    
    46,463Equity in earnings of joint ventures and subsidiaries, net
    
    
    (20,902
    )
    
    
    (5,490
    )Change in working capital and other operating items
    
    
    (25,835
    )
    
    
    (4,929
    )Net cash used in operating activities
    
    
    (39,790
    )
    
    
    (10
    )INVESTING ACTIVITIES:Cash disbursed for purchases of property, plant and equipment
    
    
    (20,137
    )
    
    
    (24,963
    )Net cash used in investing activities
    
    
    (20,137
    )
    
    
    (24,963
    )FINANCING ACTIVITIES:Repayments of borrowings
    
    
    
    
    
    
    (6
    )Proceeds from DIP credit facility
    
    
    423,000
    
    
    
    345,500Repayments of DIP credit facility
    
    
    (367,000
    )
    
    
    (269,500
    )Net cash provided by financing activities
    
    
    56,000
    
    
    
    75,994NET CHANGE IN CASH AND CASH EQUIVALENTS
    
    
    (3,927
    )
    
    
    51,021Cash and cash equivalents, beginning of period
    
    
    5,705
    
    
    
    858CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    1,778
    
    
    $
    51,879
 9




---



##### Table of Contents



Note 3. Discontinued Operations
 Accounting for the Impairment or Disposal of Long-Lived Assets,
  December 31,2006ASSETSCurrent assets:Accounts receivable
    
    $
    24,692Prepaid tooling and other
    
    
    46Total current assets
    
    $
    24,738LIABILITIESCurrent liabilitiesAccounts payable
    
    $
    16,013Accrued liabilities
    
    
    4,490Total current liabilities
    
    $
    20,503
   Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenues
    
    $
    
    
    
    $
    89,434
    
    
    $
    
    
    
    $
    188,396Cost of sales
    
    
    
    
    
    
    87,852
    
    
    
    42
    
    
    
    185,919Gross profit
    
    
    
    
    
    
    1,582
    
    
    
    (42
    )
    
    
    2,477Other expense
    
    
    
    
    
    
    
    
    
    
    264
    
    
    
    Operating income (loss)
    
    
    
    
    
    
    1,582
    
    
    
    (306
    )
    
    
    2,477Interest expense
    
    
    
    
    
    
    324
    
    
    
    
    
    
    
    648Net income (loss)
    
    $
    
    
    
    $
    1,258
    
    
    $
    (306
    )
    
    $
    1,829
 Allocation of Interest to Discontinued
Operations,
 Note 4. New Accounting Pronouncements Not Yet Adopted
 Fair Value Measurements
 10




---



##### Table of Contents



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,
 Note 5. Inventories
  June 30,
    
    
    December 31,2007
    
    
    2006Raw materials
    
    $
    46,986
    
    
    $
    49,657Work in process
    
    
    30,528
    
    
    
    26,127Finished goods
    
    
    33,151
    
    
    
    31,402$
    110,665
    
    
    $
    107,186
 Note 6. Goodwill
  Balance at December 31, 2006
    
    $
    169,617Currency translation adjustment
    
    
    4,285Balance at June 30, 2007
    
    $
    173,902
 Note 7. Investments in Joint Ventures
  Note 8. Restructuring and Asset Impairment Charges
  11




---



##### Table of Contents



Severance and
    
    
    Lease andAsset
    
    
    Outplacement
    
    
    Other ExitImpairments
    
    
    Costs
    
    
    Costs
    
    
    TotalBalance at December 31, 2006
    
    $
    
    
    
    $
    9,423
    
    
    $
    
    
    
    $
    9,423Provision
    
    
    21,747
    
    
    
    8,380
    
    
    
    9,427
    
    
    
    39,554Cash usage
    
    
    
    
    
    
    (13,549
    )
    
    
    (6,983
    )
    
    
    (20,532
    )Non-cash charges
    
    
    (21,747
    )
    
    
    
    
    
    
    (2,444
    )
    
    
    (24,191
    )Balance at June 30, 2007
    
    $
    
    
    
    $
    4,254
    
    
    $
    
    
    
    $
    4,254
   Restructuring and related asset impairments, net
    
    $
    39,554Revision of estimate
    
    
    Other asset impairments, net
    
    
    (15,403
    )Total
    
    $
    24,151
  Note 9. Debt
 Chapter 11 Impact
     DIP Financing
   12




---



##### Table of Contents



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




---



##### Table of Contents



Note 10. Comprehensive Loss
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net loss
    
    $
    (22,080
    )
    
    $
    (75,385
    )
    
    $
    (65,474
    )
    
    $
    (85,722
    )Change in cumulative translation adjustment
    
    
    5,985
    
    
    
    11,598
    
    
    
    8,490
    
    
    
    18,930Comprehensive loss
    
    $
    (16,095
    )
    
    $
    (63,787
    )
    
    $
    (56,984
    )
    
    $
    (66,792
    )
 Note 11. Income Taxes
    Note 12. Stockholders Deficit
 Loss Per Share
   14




---



##### Table of Contents



Stock-Based Compensation
 Stock Option Plans
    WeightedShares
    
    
    
    
    
    AverageUnder
    
    
    
    
    
    ExerciseOption
    
    Exercise Price
    
    Price
    
    ExercisableOutstanding, December 31, 2006
    
    
    91,500
    
    
    $
    17.13  $22.97
    
    
    $
    18.23
    
    
    
    91,500Forfeited
    
    
    (1,000
    )
    
    
    
    
    
    
    19.25Expired
    
    
    (2,000
    )
    
    
    
    
    
    
    18.94Outstanding, June 30, 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
    
    6/30/07
    
    Contractual Life
    
    Exercise Price
    
    6/30/07
    
    Exercise Price$17.13  $22.97
    
    
    88,500
    
    
    1.19 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
    
    
    $
    5.45
    
    
    
    1,388,880Forfeited
    
    
    (112,850
    )
    
    
    3.16  13.75
    
    
    
    10.64Outstanding, June 30, 2007
    
    
    1,276,030
    
    
    
    1.99  26.81
    
    
    
    9.81
    
    
    
    5.43
    
    
    
    1,276,030
 15




---



##### Table of Contents



Number
    
    Options Outstanding
    
    Options ExercisableRange of
    
    Outstanding
    
    Weighted-Average
    
    
    
    
    
    NumberExercisable
    
    At
    
    Remaining
    
    Weighted-Average
    
    Exercisable
    
    Weighted-AverageOptions
    
    6/30/07
    
    Contractual Life
    
    Exercise Price
    
    6/30/07
    
    Exercise Price$1.99  $7.08
    
    
    581,200
    
    
    6.69 yrs.
    
    $
    3.40
    
    
    
    581,200
    
    
    $
    3.4011.33  15.56
    
    
    573,340
    
    
    3.70 yrs.
    
    
    12.70
    
    
    
    573,340
    
    
    
    12.7026.81
    
    
    121,490
    
    
    1.81 yrs.
    
    
    26.81
    
    
    
    121,490
    
    
    
    26.811,276,030
    
    
    4.88 yrs.
    
    
    9.81
    
    
    
    1,276,030
    
    
    
    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, June 30,2007
    
    
    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 6/30/07
    
    Contractual Life
    
    Exercise Price
    
    6/30/07
    
    Exercise Price$19.25  $22.97
    
    
    45,200
    
    
    1.40 yrs.
    
    $
    20.24
    
    
    
    45,200
    
    
    $
    20.24
 16




---



##### Table of Contents



Note 13. Retirement Plans
  Pension Benefits
    
    
    Other Benefits2007
    
    
    2006
    
    
    2007
    
    
    2006Service cost
    
    $
    29
    
    
    $
    1,065
    
    
    $
    
    
    
    $
    32Interest cost
    
    
    3,581
    
    
    
    3,771
    
    
    
    1,212
    
    
    
    2,084Expected return on plan assets
    
    
    (3,425
    )
    
    
    (3,238
    )
    
    
    (134
    )
    
    
    Amortization of prior service cost
    
    
    75
    
    
    
    315
    
    
    
    (627
    )
    
    
    Amortization of net losses
    
    
    515
    
    
    
    764
    
    
    
    982
    
    
    
    1,951Net periodic benefit cost
    
    $
    775
    
    
    $
    2,677
    
    
    $
    1,433
    
    
    $
    4,067
  Pension Benefits
    
    
    Other Benefits2007
    
    
    2006
    
    
    2007
    
    
    2006Service cost
    
    $
    58
    
    
    $
    2,130
    
    
    $
    
    
    
    $
    64Interest cost
    
    
    7,162
    
    
    
    7,542
    
    
    
    2,424
    
    
    
    4,133Expected return on plan assets
    
    
    (6,850
    )
    
    
    (6,476
    )
    
    
    (268
    )
    
    
    Amortization of prior service cost
    
    
    150
    
    
    
    630
    
    
    
    (1,287
    )
    
    
    Amortization of net losses
    
    
    1,030
    
    
    
    1,528
    
    
    
    1,964
    
    
    
    4,098Net periodic benefit cost
    
    $
    1,550
    
    
    $
    5,354
    
    
    $
    2,833
    
    
    $
    8,295
      17




---



##### Table of Contents



Employers Accounting for
Postretirement Benefits other than Pensions,
 18




---



##### Table of Contents



Note 14. Segment Information
  North America
    
    International
    
    TotalThree months ended June 30, 2007:Revenues
    
    $
    279,575
    
    
    $
    383,778
    
    
    $
    663,353Restructuring and asset impairment charges
    
    
    16,882
    
    
    
    1,442
    
    
    
    18,324Operating income (loss)
    
    
    (3,084
    )
    
    
    27,318
    
    
    
    24,234Total assets
    
    $
    906,317
    
    
    $
    1,228,912
    
    
    $
    2,135,229Three months ended June, 2006:Revenues
    
    $
    326,390
    
    
    $
    351,083
    
    
    $
    677,473Restructuring and asset impairment charges
    
    
    25,213
    
    
    
    3,129
    
    
    
    28,342Operating income (loss)
    
    
    (22,520
    )
    
    
    17,681
    
    
    
    (4,839
    )Total assets
    
    $
    1,129,299
    
    
    $
    1,172,412
    
    
    $
    2,301,711Six months ended June 30, 2007:Revenues
    
    $
    542,670
    
    
    $
    739,134
    
    
    $
    1,281,804Restructuring and asset impairment charges
    
    
    22,542
    
    
    
    1,609
    
    
    
    24,151Operating income (loss)
    
    
    (21,235
    )
    
    
    41,463
    
    
    
    20,228Total assets
    
    $
    906,317
    
    
    $
    1,228,912
    
    
    $
    2,135,229Six months ended June 30, 2006:Revenues
    
    $
    668,815
    
    
    $
    679,416
    
    
    $
    1,348,231Restructuring and asset impairment charges
    
    
    27,624
    
    
    
    3,240
    
    
    
    30,864Operating income (loss)
    
    
    (32,271
    )
    
    
    40,286
    
    
    
    8,015Total assets
    
    $
    1,129,299
    
    
    $
    1,172,412
    
    
    $
    2,301,711
  Note 15. Commitments and Contingencies
 Key Employee Retention Plan Agreements
   19




---



##### Table of Contents



Environmental Matters
   Litigation
     20




---



##### Table of Contents



Note 16. Subsequent Events
       21




---



##### Table of Contents



Note 17. Consolidating Guarantor and Non-Guarantor Financial Information
  22




---



##### Table of Contents



TA DELAWARE, INC.  Consolidating Balance Sheet at June 30, 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
    
    $
    1,778
    
    
    $
    
    
    
    $
    
    
    
    $
    85,257
    
    
    $
    200
    
    
    $
    
    
    
    $
    87,235Accounts receivable
    
    
    2,352
    
    
    
    4,276
    
    
    
    119,070
    
    
    
    259,067
    
    
    
    21,571
    
    
    
    
    
    
    
    406,336Inventories
    
    
    
    
    
    
    
    
    
    
    39,850
    
    
    
    58,856
    
    
    
    11,959
    
    
    
    
    
    
    
    110,665Prepaid tooling and other
    
    
    2,273
    
    
    
    
    
    
    
    11,324
    
    
    
    55,679
    
    
    
    24,578
    
    
    
    
    
    
    
    93,854Total current assets
    
    
    6,403
    
    
    
    4,276
    
    
    
    170,244
    
    
    
    458,859
    
    
    
    58,308
    
    
    
    
    
    
    
    698,090Property, plant and equipment, net
    
    
    561
    
    
    
    
    
    
    
    445,130
    
    
    
    314,508
    
    
    
    155,038
    
    
    
    
    
    
    
    915,237Investments in and advances to (from) affiliates
    
    
    507,019
    
    
    
    (332,630
    )
    
    
    (832,608
    )
    
    
    19,991
    
    
    
    (23,440
    )
    
    
    923,835
    
    
    
    262,167Goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    173,902
    
    
    
    
    
    
    
    
    
    
    
    173,902Other assets, net
    
    
    3,112
    
    
    
    
    
    
    
    13,196
    
    
    
    54,032
    
    
    
    15,493
    
    
    
    
    
    
    
    85,833$
    517,095
    
    
    $
    (328,354
    )
    
    $
    (204,038
    )
    
    $
    1,021,292
    
    
    $
    205,399
    
    
    $
    923,835
    
    
    $
    2,135,229Liabilities and Stockholders Investment (Deficit)Current liabilities not subject to compromise:Current maturities of long-term debt and capital lease obligations
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    16,470
    
    
    $
    69,953
    
    
    $
    
    
    
    $
    86,423Current portion debtor-in-possession borrowings
    
    
    651,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    651,000Accounts payable
    
    
    17,416
    
    
    
    
    
    
    
    98,818
    
    
    
    196,398
    
    
    
    55,389
    
    
    
    
    
    
    
    368,021Accrued liabilities
    
    
    29,085
    
    
    
    
    
    
    
    65,484
    
    
    
    73,316
    
    
    
    6,568
    
    
    
    
    
    
    
    174,453Total current liabilities
    
    
    697,501
    
    
    
    
    
    
    
    164,302
    
    
    
    286,184
    
    
    
    131,910
    
    
    
    
    
    
    
    1,279,897Liabilities subject to compromise
    
    
    628,168
    
    
    
    391,588
    
    
    
    279,255
    
    
    
    
    
    
    
    
    
    
    
    (16,363
    )
    
    
    1,282,648Non-current liabilities not subject to compromise:Long-term debt, net of current maturities
    
    
    40,986
    
    
    
    
    
    
    
    43,765
    
    
    
    3,346
    
    
    
    44,207
    
    
    
    
    
    
    
    132,304Obligations under capital leases, net of current maturities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,733
    
    
    
    
    
    
    
    
    
    
    
    28,733Other non-current liabilities
    
    
    3,703
    
    
    
    
    
    
    
    33,345
    
    
    
    82,559
    
    
    
    11,982
    
    
    
    
    
    
    
    131,589Total non-current liabilities
    
    
    44,689
    
    
    
    
    
    
    
    77,110
    
    
    
    114,638
    
    
    
    56,189
    
    
    
    
    
    
    
    292,626Stockholders investment (deficit)
    
    
    (853,263
    )
    
    
    (719,942
    )
    
    
    (724,705
    )
    
    
    620,470
    
    
    
    17,300
    
    
    
    940,198
    
    
    
    (719,942
    )$
    517,095
    
    
    $
    (328,354
    )
    
    $
    (204,038
    )
    
    $
    1,021,292
    
    
    $
    205,399
    
    
    $
    923,835
    
    
    $
    2,135,229
 23




---



##### Table of Contents



TA DELAWARE, INC.  Consolidating Statement of Operations for the Three Months Ended June 30, 2007  (Amounts in thousands)
 Non-Guarantor
    
    
    Non-GuarantorR.J. Tower
    
    
    Parent
    
    
    Guarantor
    
    
    Restricted
    
    
    UnrestrictedCorporation
    
    
    Guarantor
    
    
    Companies
    
    
    Companies
    
    
    Companies
    
    
    Eliminations
    
    
    ConsolidatedRevenues
    
    $
    
    
    
    $
    
    
    
    $
    279,619
    
    
    $
    304,197
    
    
    $
    79,537
    
    
    $
    
    
    
    $
    663,353Cost of sales
    
    
    173
    
    
    
    
    
    
    
    250,607
    
    
    
    262,965
    
    
    
    73,783
    
    
    
    
    
    
    
    587,528Gross profit
    
    
    (173
    )
    
    
    
    
    
    
    29,012
    
    
    
    41,232
    
    
    
    5,754
    
    
    
    
    
    
    
    75,825Selling, general and administrative expenses
    
    
    (5,198
    )
    
    
    
    
    
    
    20,650
    
    
    
    14,585
    
    
    
    3,230
    
    
    
    
    
    
    
    33,267Restructuring and asset impairment charges, net
    
    
    2,440
    
    
    
    (7,226
    )
    
    
    27,196
    
    
    
    (4,086
    )
    
    
    
    
    
    
    
    
    
    
    18,324Other operating expense/(income)
    
    
    (4,582
    )
    
    
    
    
    
    
    5,719
    
    
    
    (62
    )
    
    
    (1,075
    )
    
    
    
    
    
    
    Operating income (loss)
    
    
    7,167
    
    
    
    7,226
    
    
    
    (24,553
    )
    
    
    30,795
    
    
    
    3,599
    
    
    
    
    
    
    
    24,234Interest expense
    
    
    26,299
    
    
    
    
    
    
    
    866
    
    
    
    899
    
    
    
    2,192
    
    
    
    
    
    
    
    30,256Interest income
    
    
    (354
    )
    
    
    
    
    
    
    
    
    
    
    (635
    )
    
    
    (110
    )
    
    
    
    
    
    
    (1,099
    )Intercompany interest expense/(income)
    
    
    (8,245
    )
    
    
    
    
    
    
    
    
    
    
    8,480
    
    
    
    (235
    )
    
    
    
    
    
    
    Chapter 11 and related reorganization items
    
    
    11,804
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,804Income (loss) before provision for income
taxes, equity in earnings (losses) of joint
ventures, and minority interest
    
    
    (22,337
    )
    
    
    7,226
    
    
    
    (25,419
    )
    
    
    22,051
    
    
    
    1,752
    
    
    
    
    
    
    
    (16,727
    )Provision (benefit) for income taxes
    
    
    923
    
    
    
    181
    
    
    
    
    
    
    
    6,680
    
    
    
    481
    
    
    
    
    
    
    
    8,265Income (loss) before equity in earnings
(losses) of joint ventures and subsidiaries
and minority interest
    
    
    (23,260
    )
    
    
    7,045
    
    
    
    (25,419
    )
    
    
    15,371
    
    
    
    1,271
    
    
    
    
    
    
    
    (24,992
    )Equity (losses) earnings in joint ventures
and subsidiaries, net
    
    
    (5,865
    )
    
    
    (29,125
    )
    
    
    
    
    
    
    5,538
    
    
    
    
    
    
    
    34,923
    
    
    
    5,471Minority interest, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,559
    )
    
    
    
    
    
    
    
    
    
    
    (2,559
    )Net income (loss)
    
    $
    (29,125
    )
    
    $
    (22,080
    )
    
    $
    (25,419
    )
    
    $
    18,350
    
    
    $
    1,271
    
    
    $
    34,923
    
    
    $
    (22,080
    )
 24




---



##### Table of Contents



TA DELAWARE, INC.  Consolidating Statement of Operations for the Six Months Ended June 30, 2007  (Amounts in thousands)
 Non-Guarantor
    
    
    Non-GuarantorR.J. Tower
    
    
    Parent
    
    
    Guarantor
    
    
    Restricted
    
    
    UnrestrictedCorporation
    
    
    Guarantor
    
    
    Companies
    
    
    Companies
    
    
    Companies
    
    
    Eliminations
    
    
    ConsolidatedRevenues
    
    $
    
    
    
    $
    
    
    
    $
    542,595
    
    
    $
    589,256
    
    
    $
    149,953
    
    
    $
    
    
    
    $
    1,281,804Cost of sales
    
    
    (366
    )
    
    
    
    
    
    
    511,824
    
    
    
    518,301
    
    
    
    142,440
    
    
    
    
    
    
    
    1,172,199Gross profit
    
    
    366
    
    
    
    
    
    
    
    30,771
    
    
    
    70,955
    
    
    
    7,513
    
    
    
    
    
    
    
    109,605Selling, general and administrative expenses
    
    
    (12,211
    )
    
    
    
    
    
    
    42,289
    
    
    
    28,932
    
    
    
    6,216
    
    
    
    
    
    
    
    65,226Restructuring and asset impairment charges, net
    
    
    2,916
    
    
    
    (9,666
    )
    
    
    34,277
    
    
    
    (3,376
    )
    
    
    
    
    
    
    
    
    
    
    24,151Other operating expense/(income)
    
    
    (8,187
    )
    
    
    
    
    
    
    10,474
    
    
    
    517
    
    
    
    (2,804
    )
    
    
    
    
    
    
    Operating income (loss)
    
    
    17,848
    
    
    
    9,666
    
    
    
    (56,269
    )
    
    
    44,882
    
    
    
    4,101
    
    
    
    
    
    
    
    20,228Interest expense
    
    
    51,448
    
    
    
    
    
    
    
    1,665
    
    
    
    1,373
    
    
    
    4,284
    
    
    
    
    
    
    
    58,770Interest income
    
    
    (791
    )
    
    
    
    
    
    
    
    
    
    
    (563
    )
    
    
    (203
    )
    
    
    
    
    
    
    (1,557
    )Intercompany interest expense/(income)
    
    
    (16,271
    )
    
    
    
    
    
    
    
    
    
    
    16,848
    
    
    
    (577
    )
    
    
    
    
    
    
    Chapter 11 and related reorganization items
    
    
    20,779
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,779Income (loss) before provision for income
taxes, equity in earnings (losses) of joint
ventures, and minority interest
    
    
    (37,317
    )
    
    
    9,666
    
    
    
    (57,934
    )
    
    
    27,224
    
    
    
    597
    
    
    
    
    
    
    
    (57,764
    )Provision (benefit) for income taxes
    
    
    304
    
    
    
    181
    
    
    
    
    
    
    
    11,004
    
    
    
    164
    
    
    
    
    
    
    
    11,653Income (loss) before equity in earnings
(losses) of joint ventures and subsidiaries
and minority interest
    
    
    (37,621
    )
    
    
    9,485
    
    
    
    (57,934
    )
    
    
    16,220
    
    
    
    433
    
    
    
    
    
    
    
    (69,417
    )Equity (losses) earnings in joint ventures
and subsidiaries, net
    
    
    (37,338
    )
    
    
    (74,959
    )
    
    
    
    
    
    
    9,115
    
    
    
    
    
    
    
    112,179
    
    
    
    8,997Minority interest, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,748
    )
    
    
    
    
    
    
    
    
    
    
    (4,748
    )Income (loss) from continuing operations
    
    
    (74,959
    )
    
    
    (65,474
    )
    
    
    (57,934
    )
    
    
    20,587
    
    
    
    433
    
    
    
    112,179
    
    
    
    (65,168
    )Loss from discontinued operations
    
    
    
    
    
    
    
    
    
    
    (306
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (306
    )Net income (loss)
    
    $
    (74,959
    )
    
    $
    (65,474
    )
    
    $
    (58,240
    )
    
    $
    20,587
    
    
    $
    433
    
    
    $
    112,179
    
    
    $
    (65,474
    )
 25




---



##### Table of Contents



TA DELAWARE, INC.  Consolidating Statement of Cash Flows for the Six Months Ended June 30, 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)
    
    $
    (74,959
    )
    
    $
    (65,474
    )
    
    $
    (58,240
    )
    
    $
    20,587
    
    
    $
    433
    
    
    $
    112,179
    
    
    $
    (65,474
    )Adjustments required to reconcile net income (loss) to net cash
provided by (used in) operating activities
Non-cash chapter 11 and related reorganization items, net
    
    
    5,782
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,782Non-cash restructuring and impairment, net
    
    
    
    
    
    
    
    
    
    
    23,979
    
    
    
    (628
    )
    
    
    
    
    
    
    
    
    
    
    23,351Depreciation
    
    
    (180
    )
    
    
    
    
    
    
    42,840
    
    
    
    24,394
    
    
    
    10,903
    
    
    
    
    
    
    
    77,957Deferred income tax provision (benefit)
    
    
    1,729
    
    
    
    
    
    
    
    
    
    
    
    4,650
    
    
    
    146
    
    
    
    
    
    
    
    6,525Equity in earnings (losses) of joint ventures and subsidiaries, net
    
    
    37,338
    
    
    
    74,959
    
    
    
    
    
    
    
    (9,115
    )
    
    
    
    
    
    
    (112,179
    )
    
    
    (8,997
    )Non-cash minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,082
    
    
    
    
    
    
    
    
    
    
    
    3,082Changes in working capital and other operating items
    
    
    (29,623
    )
    
    
    (9,485
    )
    
    
    11,544
    
    
    
    (5,688
    )
    
    
    6,603
    
    
    
    
    
    
    
    (26,649
    )Net cash provided by (used in) operating activities
    
    
    (59,913
    )
    
    
    
    
    
    
    20,123
    
    
    
    37,282
    
    
    
    18,085
    
    
    
    
    
    
    
    15,577INVESTING ACTIVITIES:Cash disbursed for purchases of property, plant and equipment
    
    
    
    
    
    
    
    
    
    
    (20,137
    )
    
    
    (13,587
    )
    
    
    (13,942
    )
    
    
    
    
    
    
    (47,666
    )Cash proceeds from asset disposal
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net cash used in investing activities
    
    
    
    
    
    
    
    
    
    
    (20,137
    )
    
    
    (13,587
    )
    
    
    (13,942
    )
    
    
    
    
    
    
    (47,666
    )FINANCING ACTIVITIES:Proceeds from borrowings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,799
    
    
    
    8,878
    
    
    
    
    
    
    
    17,677Repayments of borrowings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,657
    )
    
    
    (12,971
    )
    
    
    
    
    
    
    (18,628
    )Proceeds from DIP credit facility
    
    
    423,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    423,000Repayments of DIP credit facility borrowings
    
    
    (367,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (367,000
    )Net cash provided by (used in) financing activities
    
    
    56,000
    
    
    
    
    
    
    
    
    
    
    
    3,142
    
    
    
    (4,093
    )
    
    
    
    
    
    
    55,049NET CHANGE IN CASH AND CASH EQUIVALENTS
    
    
    (3,913
    )
    
    
    
    
    
    
    (14
    )
    
    
    26,837
    
    
    
    50
    
    
    
    
    
    
    
    22,960CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    5,691
    
    
    
    
    
    
    
    14
    
    
    
    58,420
    
    
    
    150
    
    
    
    
    
    
    
    64,275CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    1,778
    
    
    $
    
    
    
    $
    
    
    
    $
    85,257
    
    
    $
    200
    
    
    $
    
    
    
    $
    87,235
 26




---



##### Table of Contents



TA DELAWARE, INC.
 Consolidating Balance Sheet at December 31, 2006
 (Amounts in thousands)
 Non-Guarantor
    
    
    Non-GuarantorR.J. Tower
    
    
    Parent
    
    
    Guarantor
    
    
    Restricted
    
    
    UnrestrictedCorporation
    
    
    Guarantor
    
    
    Companies
    
    
    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
 27




---



##### Table of Contents



TA DELAWARE, INC.
 Consolidating Statement of Operations for the Three Months Ended June 30, 2006
 (Amounts in thousands)
 Non-Guarantor
    
    
    Non-GuarantorR.J. Tower
    
    
    Parent
    
    
    Guarantor
    
    
    Restricted
    
    
    UnrestrictedCorporation
    
    
    Guarantor
    
    
    Companies
    
    
    Companies
    
    
    Companies
    
    
    Eliminations
    
    
    ConsolidatedRevenues
    
    $
    
    
    
    $
    
    
    
    $
    318,958
    
    
    $
    269,277
    
    
    $
    89,238
    
    
    $
    
    
    
    $
    677,473Cost of sales
    
    
    (2,081
    )
    
    
    
    
    
    
    299,666
    
    
    
    233,860
    
    
    
    89,481
    
    
    
    
    
    
    
    620,926Gross profit
    
    
    2,081
    
    
    
    
    
    
    
    19,292
    
    
    
    35,417
    
    
    
    (243
    )
    
    
    
    
    
    
    56,547Selling, general and administrative expenses
    
    
    (11,349
    )
    
    
    
    
    
    
    29,578
    
    
    
    12,109
    
    
    
    2,706
    
    
    
    
    
    
    
    33,044Restructuring and asset impairment charges,
net
    
    
    (65
    )
    
    
    (4,416
    )
    
    
    12,334
    
    
    
    20,489
    
    
    
    
    
    
    
    
    
    
    
    28,342Other operating expense/(income)
    
    
    (8,891
    )
    
    
    
    
    
    
    8,081
    
    
    
    810
    
    
    
    
    
    
    
    
    
    
    
    Operating income (loss)
    
    
    22,386
    
    
    
    4,416
    
    
    
    (30,701
    )
    
    
    2,009
    
    
    
    (2,949
    )
    
    
    
    
    
    
    (4,839
    )Interest expense
    
    
    19,093
    
    
    
    
    
    
    
    600
    
    
    
    712
    
    
    
    1,935
    
    
    
    
    
    
    
    22,340Interest income
    
    
    (640
    )
    
    
    
    
    
    
    2
    
    
    
    32
    
    
    
    (150
    )
    
    
    
    
    
    
    (756
    )Intercompany interest expense/(income)
    
    
    (6,436
    )
    
    
    
    
    
    
    
    
    
    
    6,778
    
    
    
    (342
    )
    
    
    
    
    
    
    Chapter 11 and related reorganization items
    
    
    13,437
    
    
    
    
    
    
    
    30,225
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43,662Income (loss) before provision for income
taxes, equity in earnings of joint
ventures, and minority interest
    
    
    (3,068
    )
    
    
    4,416
    
    
    
    (61,528
    )
    
    
    (5,513
    )
    
    
    (4,392
    )
    
    
    
    
    
    
    (70,085
    )Provision (benefit) for income taxes
    
    
    763
    
    
    
    78
    
    
    
    325
    
    
    
    11,928
    
    
    
    (1,209
    )
    
    
    
    
    
    
    11,885Income (loss) before equity in earnings
(losses) of joint ventures and subsidiaries
and minority interest
    
    
    (3,831
    )
    
    
    4,338
    
    
    
    (61,853
    )
    
    
    (17,441
    )
    
    
    (3,183
    )
    
    
    
    
    
    
    (81,970
    )Equity (losses) earnings (losses) in joint
ventures
and subsidiaries, net
    
    
    (75,892
    )
    
    
    (79,723
    )
    
    
    
    
    
    
    7,465
    
    
    
    
    
    
    
    155,683
    
    
    
    7,533Minority interest, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,206
    )
    
    
    
    
    
    
    
    
    
    
    (2,206
    )Income (loss) from continuing operations
    
    
    (79,723
    )
    
    
    (75,385
    )
    
    
    (61,853
    )
    
    
    (12,182
    )
    
    
    (3,183
    )
    
    
    155,683
    
    
    
    (76,643
    )Income from discontinued operations
    
    
    
    
    
    
    
    
    
    
    1,258
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,258Net income (loss)
    
    $
    (79,723
    )
    
    $
    (75,385
    )
    
    $
    (60,595
    )
    
    $
    (12,182
    )
    
    $
    (3,183
    )
    
    $
    155,683
    
    
    $
    (75,385
    )
 28




---



##### Table of Contents



TA DELAWARE, INC.
 Consolidating Statement of Operations for the Six Months Ended June 30, 2006
 (Amounts in thousands)
 Non-Guarantor
    
    
    Non-GuarantorR.J. Tower
    
    
    Parent
    
    
    Guarantor
    
    
    Restricted
    
    
    UnrestrictedCorporation
    
    
    Guarantor
    
    
    Companies
    
    
    Companies
    
    
    Companies
    
    
    Eliminations
    
    
    ConsolidatedRevenues
    
    $
    
    
    
    $
    
    
    
    $
    651,646
    
    
    $
    515,291
    
    
    $
    181,294
    
    
    $
    
    
    
    $
    1,348,231Cost of sales
    
    
    (4,180
    )
    
    
    
    
    
    
    619,956
    
    
    
    449,384
    
    
    
    177,631
    
    
    
    
    
    
    
    1,242,791Gross profit
    
    
    4,180
    
    
    
    
    
    
    
    31,690
    
    
    
    65,907
    
    
    
    3,663
    
    
    
    
    
    
    
    105,440Selling, general and administrative expenses
    
    
    (21,225
    )
    
    
    
    
    
    
    60,712
    
    
    
    22,325
    
    
    
    5,269
    
    
    
    
    
    
    
    67,081Restructuring and asset impairment charges,
net
    
    
    (60
    )
    
    
    (8,558
    )
    
    
    18,882
    
    
    
    20,792
    
    
    
    (192
    )
    
    
    
    
    
    
    30,864Other operating expense/(income)
    
    
    (16,839
    )
    
    
    
    
    
    
    14,724
    
    
    
    1,595
    
    
    
    
    
    
    
    
    
    
    
    (520
    )Operating income (loss)
    
    
    42,304
    
    
    
    8,558
    
    
    
    (62,628
    )
    
    
    21,195
    
    
    
    (1,414
    )
    
    
    
    
    
    
    8,015Interest expense
    
    
    36,258
    
    
    
    
    
    
    
    1,131
    
    
    
    1,455
    
    
    
    3,978
    
    
    
    
    
    
    
    42,822Interest income
    
    
    (958
    )
    
    
    
    
    
    
    (1
    )
    
    
    79
    
    
    
    (332
    )
    
    
    
    
    
    
    (1,212
    )Intercompany interest expense/(income)
    
    
    (12,530
    )
    
    
    
    
    
    
    
    
    
    
    13,205
    
    
    
    (675
    )
    
    
    
    
    
    
    Chapter 11 and related reorganization items
    
    
    24,978
    
    
    
    68
    
    
    
    30,225
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    55,271Income (loss) before provision for income
taxes, equity in earnings (losses) of joint
ventures, and minority interest
    
    
    (5,444
    )
    
    
    8,490
    
    
    
    (93,983
    )
    
    
    6,456
    
    
    
    (4,385
    )
    
    
    
    
    
    
    (88,866
    )Provision (benefit) for income taxes
    
    
    1,509
    
    
    
    140
    
    
    
    455
    
    
    
    8,832
    
    
    
    (1,206
    )
    
    
    
    
    
    
    9,730Income (loss) before equity in earnings
(losses) of joint ventures and subsidiaries
and minority interest
    
    
    (6,953
    )
    
    
    8,350
    
    
    
    (94,438
    )
    
    
    (2,376
    )
    
    
    (3,179
    )
    
    
    
    
    
    
    (98,596
    )Equity earnings (losses) in joint ventures
and subsidiaries, net
    
    
    (87,119
    )
    
    
    (94,072
    )
    
    
    
    
    
    
    14,081
    
    
    
    
    
    
    
    181,327
    
    
    
    14,217Minority interest, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,172
    )
    
    
    
    
    
    
    
    
    
    
    (3,172
    )Income (loss) from continuing operations
    
    
    (94,072
    )
    
    
    (85,722
    )
    
    
    (94,438
    )
    
    
    8,533
    
    
    
    (3,179
    )
    
    
    181,327
    
    
    
    (87,551
    )Income from discontinued operations
    
    
    
    
    
    
    
    
    
    
    1,829
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,829Net income (loss)
    
    $
    (94,072
    )
    
    $
    (85,722
    )
    
    $
    (92,609
    )
    
    $
    8,533
    
    
    $
    (3,179
    )
    
    $
    181,327
    
    
    $
    (85,722
    )
 29




---



##### Table of Contents



TA DELAWARE, INC.
 Consolidating Statement of Cash Flows for the Six Months Ended June 30, 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)
    
    $
    (94,072
    )
    
    $
    (85,722
    )
    
    $
    (92,609
    )
    
    $
    8,533
    
    
    $
    (3,179
    )
    
    $
    181,327
    
    
    $
    (85,722
    )Adjustments required to reconcile net income (loss) to net cash
provided by (used in) operating activitiesNon-cash chapter 11 and related reorganization items, net
    
    
    8,389
    
    
    
    68
    
    
    
    30,225
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    38,682Non-cash restructuring and impairment, net
    
    
    
    
    
    
    
    
    
    
    10,986
    
    
    
    15,327
    
    
    
    
    
    
    
    
    
    
    
    26,313Depreciation
    
    
    166
    
    
    
    
    
    
    
    46,297
    
    
    
    22,216
    
    
    
    12,726
    
    
    
    
    
    
    
    81,405Deferred income tax provision (benefit)
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    (11,605
    )
    
    
    4,159
    
    
    
    
    
    
    
    (7,448
    )Equity in earnings (losses) of joint ventures and subsidiaries, net
    
    
    87,119
    
    
    
    94,072
    
    
    
    
    
    
    
    (14,081
    )
    
    
    
    
    
    
    (181,327
    )
    
    
    (14,217
    )Non-cash minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    81
    
    
    
    
    
    
    
    
    
    
    
    81Changes in working capital and other operating items
    
    
    (26,442
    )
    
    
    (8,418
    )
    
    
    29,933
    
    
    
    (663
    )
    
    
    (4,485
    )
    
    
    
    
    
    
    (10,075
    )Net cash provided by (used in) operating activities
    
    
    (24,840
    )
    
    
    
    
    
    
    24,830
    
    
    
    19,808
    
    
    
    9,221
    
    
    
    
    
    
    
    29,019INVESTING ACTIVITIES:Cash disbursed for purchases of property, plant and equipment
    
    
    (10
    )
    
    
    
    
    
    
    (24,953
    )
    
    
    (21,231
    )
    
    
    (14,165
    )
    
    
    
    
    
    
    (60,359
    )Cash proceeds from asset disposal
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32,664
    
    
    
    
    
    
    
    32,664Net cash provided by (used in) investing activities
    
    
    (10
    )
    
    
    
    
    
    
    (24,953
    )
    
    
    (21,231
    )
    
    
    18,499
    
    
    
    
    
    
    
    (27,695
    )FINANCING ACTIVITIES:Proceeds from borrowings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,295
    
    
    
    9,599
    
    
    
    
    
    
    
    20,894Repayments of borrowings
    
    
    
    
    
    
    
    
    
    
    (6
    )
    
    
    (6,547
    )
    
    
    (37,333
    )
    
    
    
    
    
    
    (43,886
    )Proceeds from DIP credit facility
    
    
    345,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    345,500Repayments of DIP credit facility borrowings
    
    
    (269,500
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (269,500
    )Net cash provided by (used in) financing activities
    
    
    76,000
    
    
    
    
    
    
    
    (6
    )
    
    
    4,748
    
    
    
    (27,734
    )
    
    
    
    
    
    
    53,008NET CHANGE IN CASH AND CASH EQUIVALENTS
    
    
    51,150
    
    
    
    
    
    
    
    (129
    )
    
    
    3,325
    
    
    
    (14
    )
    
    
    
    
    
    
    54,332CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    702
    
    
    
    
    
    
    
    156
    
    
    
    64,790
    
    
    
    143
    
    
    
    
    
    
    
    65,791CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    51,852
    
    
    $
    
    
    
    $
    27
    
    
    $
    68,115
    
    
    $
    129
    
    
    $
    
    
    
    $
    120,123
 30




---



##### 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.
    31




---



##### Table of Contents



Results of Operations
 Three Months Ended June 30, 2007 Compared to the Three Months Ended June 30, 2006
 Revenues
 Gross Profit and Gross Margin.
 Selling, General and Administrative Expenses.
 Interest Expense.
  Chapter 11 and Related Reorganization Items.
 Provision for Income Taxes.
 32




---



##### Table of Contents



Equity in Earnings of Joint Ventures, Net of Tax.
 Minority Interest, Net of Tax
 Six Months Ended June 30, 2007 Compared to the Six Months Ended June 30, 2006
 Revenues
 Gross Profit and Gross Margin.
 Selling, General and Administrative Expenses.
 Interest Expense.
 Chapter 11 and Related Reorganization Items.
 Provision for Income Taxes.
 33




---



##### Table of Contents



Equity in Earnings of Joint Ventures, Net of Tax.
 Minority Interest, Net of Tax.
 Restructuring and Asset Impairment
    34




---



##### Table of Contents



Liquidity and Capital Resources
      Chapter 11 Impact
    35




---



##### Table of Contents



DIP Financing
      36




---



##### Table of Contents



Back-Stop Agreement
   Stock Options
 Shared-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
    37




---



##### Table of Contents



Opportunities
  Disclosure Regarding Forward-Looking Statements
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk.
  38




---



##### 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;
    
    Enhanced quarterly tax provision methodology; and
    
    Invested in financial personnel in the international operations.
  39




---



##### 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.
 40




---



##### Table of Contents



TA DELAWARE, INC.RegistrantDate: November 6, 2007
    /s/ Jeffery StegengaJeffery StegengaPost-Consummation Trust Administrator 41