##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 Form 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
 For the quarterly period ended March 31, 2006
 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
(State or other jurisdiction of
incorporation or organization)
    
    41-1746238
(I.R.S. Employer
Identification No.)27175 Haggerty Road
Novi, Michigan
(Address of principal executive offices)
    
    48377
(Zip Code)
 (248) 675-6000
 Not Applicable
  þ o
  o o þ
  o þ




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##### 



Tower Automotive, Inc.
Form 10-Q
 Table of Contents
 PagePART I. Financial InformationItem 1.
    
    Financial Statements (unaudited):Condensed Consolidated Balance Sheets at March 31, 2006 and December 31, 2005
    
    
    1Condensed Consolidated Statements of Operations for Three Months Ended March 31, 2006 and 2005
    
    
    2Condensed Consolidated Statements of Cash Flows for Three Months Ended March 31, 2006 and 2005 (as restated)
    
    
    3Notes to Condensed Consolidated Financial Statements
    
    
    4Item 1A.
    
    Risk Factors
    
    
    25Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    25Item 3.
    
    Quantitative and Qualitative Disclosure About Market Risk
    
    
    30Item 4.
    
    Controls and Procedures
    
    
    30PART II. Other InformationItem 1.
    
    Legal Proceedings
    
    
    31Item 6.
    
    Exhibits
    
    
    31SignaturesCertification of Chief Executive Officer Pursuant to Rules 13a-15(e) and 15d-15(e)Certification of Chief Financial Officer Pursuant to Rules 13a-15(e) and 15d-15(e)Certification 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)
 March 31, 2006
    
    
    December 31, 2005ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    124,211
    
    
    $
    65,791Accounts receivable
    
    
    425,637
    
    
    
    363,040Inventories
    
    
    137,745
    
    
    
    123,433Prepaid tooling and other
    
    
    156,803
    
    
    
    185,646Total current assets
    
    
    844,396
    
    
    
    737,910Property, plant and equipment, net
    
    
    999,238
    
    
    
    1,038,794Investments in joint ventures
    
    
    235,318
    
    
    
    228,634Goodwill
    
    
    156,483
    
    
    
    153,037Other assets, net
    
    
    135,503
    
    
    
    132,851Total assets
    
    $
    2,370,938
    
    
    $
    2,291,226LIABILITIES AND STOCKHOLDERS DEFICITCurrent Liabilities Not Subject to Compromise:Current maturities of long-term debt and capital lease obligations
    
    $
    129,956
    
    
    $
    151,755Current portion of debtor-in-possession borrowings
    
    
    612,000
    
    
    
    Accounts payable
    
    
    405,206
    
    
    
    378,816Accrued liabilities
    
    
    168,332
    
    
    
    169,248Total current liabilities
    
    
    1,315,494
    
    
    
    699,819Liabilities subject to compromise
    
    
    1,290,969
    
    
    
    1,284,217Non-Current Liabilities Not Subject to Compromise:Long-term debt, net of current maturities
    
    
    107,208
    
    
    
    107,823Debtor-in-possession borrowings
    
    
    
    
    
    
    531,000Capital lease obligations, net of current maturities
    
    
    30,034
    
    
    
    30,308Other non-current liabilities
    
    
    110,663
    
    
    
    125,682Total non-current liabilities
    
    
    247,905
    
    
    
    794,813Stockholders deficit:Preferred stock
    
    
    
    
    
    
    Common stock
    
    
    666
    
    
    
    666Additional paid-in-capital
    
    
    681,502
    
    
    
    681,102Accumulated deficit
    
    
    (1,117,177
    )
    
    
    (1,106,840
    )Deferred compensation plans
    
    
    
    
    
    
    (6,798
    )Accumulated other comprehensive income (loss)
    
    
    903
    
    
    
    (6,429
    )Treasury stock
    
    
    (49,324
    )
    
    
    (49,324
    )Total stockholders deficit
    
    
    (483,430
    )
    
    
    (487,623
    )Total liabilities and stockholders deficit
    
    $
    2,370,938
    
    
    $
    2,291,226
  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 March 31,2006
    
    
    2005Revenues
    
    $
    769,720
    
    
    $
    915,880Cost of sales
    
    
    719,932
    
    
    
    851,089Gross profit
    
    
    49,788
    
    
    
    64,791Selling, general and administrative expenses
    
    
    34,037
    
    
    
    43,206Restructuring and asset impairment charges, net
    
    
    2,522
    
    
    
    31,895Other operating income
    
    
    (520
    )
    
    
    Operating income (loss)
    
    
    13,749
    
    
    
    (10,310
    )Interest expense (contractual interest of $38,881 in 2006 and $55,967 in 2005)
    
    
    20,806
    
    
    
    44,109Interest income
    
    
    (456
    )
    
    
    (439
    )Chapter 11 and related reorganization items
    
    
    11,609
    
    
    
    41,622Loss before provision for income taxes, equity in earnings of joint
ventures, and minority interest
    
    
    (18,210
    )
    
    
    (95,602
    )Provision (benefit) for income taxes
    
    
    (2,155
    )
    
    
    6,125Loss before equity in earnings of joint ventures, and minority interest
    
    
    (16,055
    )
    
    
    (101,727
    )Equity in earnings of joint ventures, net of tax
    
    
    6,684
    
    
    
    4,263Minority interest, net of tax
    
    
    (966
    )
    
    
    (1,334
    )Net loss
    
    $
    (10,337
    )
    
    $
    (98,798
    )Basic and diluted loss per share
    
    $
    (0.18
    )
    
    $
    (1.68
    )Weighted average basic and diluted shares outstanding
    
    
    58,654
    
    
    
    58,648
  2




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##### Table of Contents



TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands  unaudited)
 Three Months Ended March 31,2006
    
    
    2005(as restatedsee Note 1)OPERATING ACTIVITIES:Net loss
    
    $
    (10,337
    )
    
    $
    (98,798
    )Adjustments to reconcile net loss to net cash provided by (used in) operating
activities:Chapter 11 and related reorganization items, net
    
    
    6,016
    
    
    
    38,188Non-cash restructuring and impairment, net
    
    
    679
    
    
    
    32,095Depreciation
    
    
    41,387
    
    
    
    43,591Deferred income tax provision (benefit)
    
    
    (7,685
    )
    
    
    2,343Equity in earnings of joint ventures, net
    
    
    (6,684
    )
    
    
    (4,263
    )Change in working capital and other operating items
    
    
    (20,069
    )
    
    
    (163,840
    )Net cash provided by (used in) operating activities
    
    
    3,307
    
    
    
    (150,684
    )INVESTING ACTIVITIES:Cash disbursed for purchases of property, plant and equipment
    
    
    (28,860
    )
    
    
    (58,148
    )Cash proceeds from asset disposal
    
    
    32,664
    
    
    
    Net cash provided by (used in) investing activities
    
    
    3,804
    
    
    
    (58,148
    )FINANCING ACTIVITIES:Proceeds from borrowings
    
    
    11,139
    
    
    
    16,151Repayments of borrowings
    
    
    (40,830
    )
    
    
    (433,435
    )Proceeds from DIP credit facility
    
    
    216,000
    
    
    
    623,738Repayments of DIP credit facility
    
    
    (135,000
    )
    
    
    (111,125
    )Net cash provided by financing activities
    
    
    51,309
    
    
    
    95,329NET CHANGE IN CASH AND CASH EQUIVALENTS
    
    
    58,420
    
    
    
    (113,503
    )Cash and cash equivalents, beginning of period
    
    
    65,791
    
    
    
    149,101CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    124,211
    
    
    $
    35,598Supplemental Cash Flow Information:Interest paid, net of amounts capitalized
    
    $
    18,602
    
    
    $
    13,074Income taxes paid (refunded)
    
    $
    1,043
    
    
    $
    (295
    )Non-cash investing activities:Net decrease in liabilities for purchases of property, plant and equipment
    
    $
    (4,122
    )
    
    $
    (26,171
    )
  3




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TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 Note 1. Basis of Presentation
    Change in Accounting Principle
   Restatement
  4




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##### Table of Contents



Three Months EndedMarch 31, 2005As previously
    
    AsConsolidated Financial Statement Caption
    
    reported
    
    restatedConsolidated Statement of Cash FlowsChange in working capital and other operating items
    
    
    (190,011
    )
    
    
    (163,840
    )Net cash used in operating activities
    
    
    (176,855
    )
    
    
    (150,684
    )Cash disbursed for purchases of property, plant and equipment*
    
    
    (31,977
    )
    
    
    (58,148
    )Net cash used in investing activities
    
    
    (31,977
    )
    
    
    (58,148
    )Net decrease in liabilities for purchases of property, plant and equipment
    
    
    
    
    
    
    (26,171
    )
 
 *
    
    Previously referred to as Capital expenditures, net when amounts accrued were included. Note 2. Chapter 11 Reorganization Proceedings
     Financial Statement Classification
   5




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##### Table of Contents



March 31,
    
    
    December 31,2006
    
    
    2005Debt:5.75% Convertible senior debentures
    
    $
    124,999
    
    
    $
    124,9996.75% Subordinated debentures
    
    
    258,750
    
    
    
    258,7509.25% Senior Euro notes
    
    
    181,755
    
    
    
    177,60012% Senior notes
    
    
    258,000
    
    
    
    258,000Total debt
    
    
    823,504
    
    
    
    819,349Pension and other post-retirement benefits
    
    
    159,933
    
    
    
    162,886Pre-petition accounts payable and accruals
    
    
    200,777
    
    
    
    195,294Accrued interest on debt subject to compromise
    
    
    21,343
    
    
    
    21,343Executory contracts
    
    
    85,412
    
    
    
    85,345Total liabilities subject to compromise
    
    $
    1,290,969
    
    
    $
    1,284,217
  Three Months EndedMarch 31,2006
    
    
    2005Professional fees directly related to the filing
    
    $
    8,580
    
    
    $
    12,194Key employee retention costs
    
    
    2,961
    
    
    
    36Write off of deferred financing costs
    
    
    
    
    
    
    29,135Estimated executory contract rejection damages
    
    
    68
    
    
    
    208Other expenses directly attributable to the Companys reorganization
    
    
    
    
    
    
    49Total
    
    $
    11,609
    
    
    $
    41,622
  6




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##### Table of Contents



Debtors Financial Statements
  Debtors Condensed Combined Balance SheetDebtors- in-Possession
    
    March 31,
    
    
    December 31,(Amounts in thousands)
    
    2006
    
    
    2005ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    52,067
    
    
    $
    858Accounts receivable
    
    
    218,587
    
    
    
    173,206Inventories
    
    
    68,281
    
    
    
    60,068Prepaid tooling and other
    
    
    33,425
    
    
    
    65,882Total current assets
    
    
    372,360
    
    
    
    300,014Property, plant and equipment, net
    
    
    528,266
    
    
    
    538,598Investments in and advances to non-debtor subsidiaries
    
    
    848,853
    
    
    
    796,662Other assets, net
    
    
    56,340
    
    
    
    60,959Total assets
    
    $
    1,805,819
    
    
    $
    1,696,233LIABILITIES AND STOCKHOLDERS DEFICITCurrent Liabilities Not Subject to Compromise:Current maturities of long-term debt and capital lease obligations
    
    $
    14,257
    
    
    $
    14,257Current portion of debtor-in-possession borrowings
    
    
    612,000
    
    
    
    Accounts payable
    
    
    145,838
    
    
    
    134,069Accrued liabilities
    
    
    102,937
    
    
    
    87,098Total current liabilities
    
    
    875,032
    
    
    
    235,424Liabilities subject to compromise
    
    
    1,307,332
    
    
    
    1,300,580Non-Current Liabilities Not Subject to Compromise:Long-term debt, net of current maturities
    
    
    84,752
    
    
    
    84,754Long-term portion of debtor-in-possession borrowings
    
    
    
    
    
    
    531,000Other noncurrent liabilities
    
    
    22,133
    
    
    
    32,098Total noncurrent liabilities
    
    
    106,885
    
    
    
    647,852Total stockholders deficit
    
    
    (483,430
    )
    
    
    (487,623
    )Total liabilities and stockholders deficit
    
    $
    1,805,819
    
    
    $
    1,696,233
 7




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##### Table of Contents



Debtors Condensed Combined Statements of OperationsDebtors- in-Possession
    
    Three Months Ended  March 31,(Amounts in thousands)
    
    2006
    
    
    2005Revenues
    
    $
    431,650
    
    
    $
    577,617Cost of sales
    
    
    416,258
    
    
    
    545,144Gross profit
    
    
    15,392
    
    
    
    32,473Selling, general and administrative expenses
    
    
    21,258
    
    
    
    28,782Restructuring and asset impairment charges, net
    
    
    2,411
    
    
    
    31,895Other operating income
    
    
    (1,305
    )
    
    
    Operating loss
    
    
    (6,972
    )
    
    
    (28,204
    )Interest expense
    
    
    18,020
    
    
    
    40,685Interest income
    
    
    (321
    )
    
    
    (125
    )Inter-company interest income
    
    
    (6,094
    )
    
    
    (5,890
    )Chapter 11 and related reorganization items
    
    
    11,609
    
    
    
    41,622Loss before provision for income taxes, equity
in earnings of joint ventures and equity in
earnings from non-Debtor subsidiaries
    
    
    (30,186
    )
    
    
    (104,496
    )Provision for income taxes
    
    
    938
    
    
    
    3,251Loss before equity in earnings of joint ventures
and equity in earnings of non-Debtor
subsidiaries
    
    
    (31,124
    )
    
    
    (107,747
    )Equity in earnings of joint ventures, net of tax
    
    
    68
    
    
    
    (89
    )Equity in earnings of non-Debtor subsidiaries
    
    
    20,719
    
    
    
    9,038Net loss
    
    $
    (10,337
    )
    
    $
    (98,798
    )
 8




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##### Table of Contents



Debtors Condensed Combined Statements of Cash FlowsDebtors- in-Possession
    
    Three Months Ended March 31,(Amounts in thousands)
    
    2006
    
    
    2005(as restated)OPERATING ACTIVITIES:
    
    $
    (10,337
    )
    
    $
    (98,798
    )Net lossAdjustments required to reconcile net loss to net cash provided
by (used in) operating activities:Chapter 11 and related reorganization items, net
    
    
    6,016
    
    
    
    38,188Non-cash restructuring and impairment, net
    
    
    679
    
    
    
    32,095Depreciation
    
    
    24,202
    
    
    
    27,040Equity in earnings of joint ventures and subsidiaries, net
    
    
    (20,787
    )
    
    
    (8,949
    )Change in working capital and other operating items
    
    
    (13,804
    )
    
    
    (151,904
    )Net cash used for operating activities
    
    
    (14,031
    )
    
    
    (162,328
    )INVESTING ACTIVITIES:Cash disbursed for purchases of property, plant and equipment
    
    
    (15,757
    )
    
    
    (28,720
    )Net cash used for investing activities
    
    
    (15,757
    )
    
    
    (28,720
    )FINANCING ACTIVITIES:Repayments of borrowings
    
    
    (3
    )
    
    
    (425,941
    )Proceeds from DIP credit facility
    
    
    216,000
    
    
    
    623,738Repayments of DIP credit facility
    
    
    (135,000
    )
    
    
    (111,125
    )Net cash provided by financing activities
    
    
    80,997
    
    
    
    86,672NET CHANGE IN CASH AND CASH EQUIVALENTS
    
    
    51,209
    
    
    
    (104,376
    )Cash and cash equivalents, beginning of period
    
    
    858
    
    
    
    107,081CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    52,067
    
    
    $
    2,705
 Note 3. New Accounting Pronouncements.
 SFAS No. 151, Inventory Costs, an Amendment of ARB No. 43, Chapter 4
 FASB Interpretation No. 48
 Note 4. Accounts Receivable Securitization Facility
  9




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##### Table of Contents



Note 5. Inventories
  March 31,
    
    
    December 31,2006
    
    
    2005Raw materials
    
    $
    60,992
    
    
    $
    56,309Work in process
    
    
    37,499
    
    
    
    30,710Finished goods
    
    
    39,254
    
    
    
    36,414$
    137,745
    
    
    $
    123,433
 Note 6. Goodwill
  Balance at December 31, 2005
    
    $
    153,037Currency translation adjustment
    
    
    3,446Balance at March 31, 2006
    
    $
    156,483
 Note 7. Investments in Joint Ventures
  Note 8. Restructuring and Asset Impairment Charges
   10




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##### Table of Contents



Severance
    
    
    Other Costs
    
    
    TotalBalance at December 31, 2005
    
    $
    523
    
    
    $
    
    
    
    $
    523Provision
    
    
    
    
    
    
    4,067
    
    
    
    4,067Cash usage
    
    
    (523
    )
    
    
    
    
    
    
    (523
    )Non-cash
usage and revisions of estimates
    
    
    
    
    
    
    (4,067
    )
    
    
    (4,067
    )Balance at March 31, 2006
    
    $
    
    
    
    $
    
    
    
    $
    
  Note 9. Debt
 Chapter 11 Impact
     DIP Financing
    11




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##### Table of Contents



Back-Stop Agreement
   Debt Classified as Not Subject to Compromise
  Interest Rate Swap Contracts
  Note 10. Comprehensive Loss
  For the three months ended March 31,2006
    
    
    2005Net loss
    
    $
    (10,337
    )
    
    $
    (98,798
    )Change in cumulative translation adjustment
    
    
    7,332
    
    
    
    (7,951
    )Unrealized gain (loss) on qualifying cash
flow hedges, net of tax $- and $-,
respectively
    
    
    
    
    
    
    1,727Comprehensive loss
    
    $
    (3,005
    )
    
    $
    (105,022
    )
 Note 11. Income Taxes
  12




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##### Table of Contents



Note 12. Stockholders Deficit
 Loss Per Share
  Stock-Based Compensation
    13




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##### Table of Contents



Three months endedMarch 31, 2005Net lossAs Reported
    
    $
    (98,798
    )Add: Stock based employee compensation expense included in
reported net loss, net of tax related effects
    
    
    274Deduct: Total stock-based employee compensation (expense)
income determined under fair value based method for all
awards, net of related tax effects
    
    
    112Pro forma net loss
    
    $
    (98,636
    )Basic loss per share as reported
    
    $
    (1.68
    )Pro forma
    
    
    (1.68
    )Diluted loss per share as reported
    
    $
    (1.68
    )Pro forma
    
    
    (1.68
    )
   Stock Option Plans
     Number
    
    Options Outstanding
    
    Options ExercisableRange of
    
    Outstanding
    
    Weighted-Average
    
    Weighted-
    
    Number
    
    Weighted-Exercisable
    
    At
    
    Remaining
    
    Average
    
    Exercisable
    
    AverageOptions
    
    3/31/06
    
    Contractual Life
    
    Exercise Price
    
    3/31/06
    
    Exercise Price17.13  22.97
    
    94,500
    
    2.39
    
    $18.26
    
    94,500
    
    $18.26
 Incentive Plan


14



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##### Table of Contents






Number
    
    Options Outstanding
    
    Options ExercisableRange of
    
    Outstanding
    
    Weighted-Average
    
    
    
    NumberExercisable
    
    At
    
    Remaining
    
    Weighted-Average
    
    Exercisable
    
    Weighted-AverageOptions
    
    3/31/06
    
    Contractual Life
    
    Exercise Price
    
    3/31/06
    
    Exercise Price$1.99 - $7.08
    
    729,925
    
    7.87
    
    $3.40
    
    729,925
    
    $3.4011.33  15.56
    
    1,018,650
    
    4.86
    
    12.93
    
    1,018,650
    
    12.9326.81
    
    121,490
    
    3.06
    
    26.81
    
    121,490
    
    26.81
 Director Option Plan
    Options Outstanding
    
    Options ExercisableRange of
    
    Number
    
    Weighted-Average
    
    
    
    NumberExercisable
    
    Outstanding
    
    Remaining
    
    Weighted-Average
    
    Exercisable
    
    Weighted-AverageOptions
    
    At 3/31/06
    
    Contractual Life
    
    Exercise Price
    
    3/31/06
    
    Exercise Price$18.94-$22.97
    
    85,200
    
    1.83
    
    $19.63
    
    85,200
    
    $19.63


Note 13. Retirement Plans




Pension Benefits
    
    
    Other Benefits2006
    
    
    2005
    
    
    2006
    
    
    2005Service cost
    
    $
    1,065
    
    
    $
    1,720
    
    
    $
    32
    
    
    $
    200Interest cost
    
    
    3,771
    
    
    
    3,790
    
    
    
    2,049
    
    
    
    2,065Expected return on plan assets
    
    
    (3,238
    )
    
    
    (3,672
    )
    
    
    
    
    
    
    Amortization of prior service cost
    
    
    315
    
    
    
    1,231
    
    
    
    
    
    
    
    Amortization of net losses
    
    
    764
    
    
    
    1,027
    
    
    
    2,147
    
    
    
    3,230Net periodic benefit cost
    
    $
    2,677
    
    
    $
    4,096
    
    
    $
    4,228
    
    
    $
    5,495






15



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##### Table of Contents



Note 14. Segment Information
  North America
    
    International
    
    TotalThree months ended March 31, 2006:Revenues
    
    $
    441,387
    
    
    $
    328,333
    
    
    $
    769,720Operating income (loss)
    
    
    (8,856
    )
    
    
    22,605
    
    
    
    13,749Restructuring and asset impairment charges
    
    
    2,411
    
    
    
    111
    
    
    
    2,522Total assets
    
    $
    1,228,272
    
    
    $
    1,142,666
    
    
    $
    2,370,938Three months ended March 31, 2005:Revenues
    
    $
    589,608
    
    
    $
    326,272
    
    
    $
    915,880Operating income (loss)
    
    
    (29,851
    )
    
    
    19,541
    
    
    
    (10,310
    )Restructuring and asset impairment charges
    
    
    31,895
    
    
    
    
    
    
    
    31,895Total assets
    
    $
    1,419,893
    
    
    $
    1,130,072
    
    
    $
    2,549,965
  Note 15. Commitments and Contingencies
 Key Employee Retention Plan Agreements
   16




---



##### Table of Contents



Environmental Matters
   Litigation
      17




---



##### Table of Contents



Note 16. Subsequent Events
        Note 17. Consolidating Guarantor and Non-Guarantor Financial Information
  18




---



##### Table of Contents



TOWER AUTOMOTIVE INC.
Consolidating Balance Sheet at March 31, 2006
(Amounts in thousands)
 Non-Guarantor
    
    
    Non-GuarantorR.J. Tower
    
    
    Parent
    
    
    
    
    
    
    Restricted
    
    
    UnrestrictedCorporation
    
    
    Guarantor
    
    
    Guarantor Companies
    
    
    Companies
    
    
    Companies
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    52,008
    
    
    $
    
    
    
    $
    59
    
    
    $
    72,009
    
    
    $
    135
    
    
    $
    
    
    
    $
    124,211Accounts receivable
    
    
    3,403
    
    
    
    4,152
    
    
    
    211,032
    
    
    
    184,144
    
    
    
    22,906
    
    
    
    
    
    
    
    425,637Inventories
    
    
    
    
    
    
    
    
    
    
    68,281
    
    
    
    52,902
    
    
    
    16,562
    
    
    
    
    
    
    
    137,745Prepaid tooling and other
    
    
    4,556
    
    
    
    
    
    
    
    28,869
    
    
    
    91,022
    
    
    
    32,356
    
    
    
    
    
    
    
    156,803Total current assets
    
    
    59,967
    
    
    
    4,152
    
    
    
    308,241
    
    
    
    400,077
    
    
    
    71,959
    
    
    
    
    
    
    
    844,396Property, plant and equipment, net
    
    
    519
    
    
    
    
    
    
    
    527,747
    
    
    
    305,934
    
    
    
    165,038
    
    
    
    
    
    
    
    999,238Investments in and advances to (from) affiliates
    
    
    645,863
    
    
    
    (95,994
    )
    
    
    (777,524
    )
    
    
    36,254
    
    
    
    (3,569
    )
    
    
    430,288
    
    
    
    235,318Goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    156,483
    
    
    
    
    
    
    
    
    
    
    
    156,483Other assets, net
    
    
    25,236
    
    
    
    
    
    
    
    31,104
    
    
    
    61,764
    
    
    
    17,399
    
    
    
    
    
    
    
    135,503$
    731,585
    
    
    $
    (91,842
    )
    
    $
    89,568
    
    
    $
    960,512
    
    
    $
    250,827
    
    
    $
    430,288
    
    
    $
    2,370,938Liabilities and Stockholders Investment (Deficit)Current liabilities not subject to compromise:Current maturities of long-term debt and capital lease obligations
    
    $
    
    
    
    $
    
    
    
    $
    14,257
    
    
    $
    19,332
    
    
    $
    96,367
    
    
    $
    
    
    
    $
    129,956Current portion debtor-in-possession borrowings
    
    
    612,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    612,000Accounts payable
    
    
    7,535
    
    
    
    
    
    
    
    138,303
    
    
    
    193,876
    
    
    
    65,492
    
    
    
    
    
    
    
    405,206Accrued liabilities
    
    
    42,391
    
    
    
    
    
    
    
    60,546
    
    
    
    52,817
    
    
    
    12,578
    
    
    
    
    
    
    
    168,332Total current liabilities
    
    
    661,926
    
    
    
    
    
    
    
    213,106
    
    
    
    266,025
    
    
    
    174,437
    
    
    
    
    
    
    
    1,315,494Liabilities subject to compromise
    
    
    625,046
    
    
    
    391,588
    
    
    
    290,698
    
    
    
    
    
    
    
    
    
    
    
    (16,363
    )
    
    
    1,290,969Non-current liabilities not subject to compromise:Long-term debt, net of current maturities
    
    
    40,986
    
    
    
    
    
    
    
    43,766
    
    
    
    5,943
    
    
    
    16,513
    
    
    
    
    
    
    
    107,208Obligations under capital leases, net of current maturities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,034
    
    
    
    
    
    
    
    
    
    
    
    30,034Other noncurrent liabilities
    
    
    2,776
    
    
    
    
    
    
    
    19,357
    
    
    
    74,642
    
    
    
    13,888
    
    
    
    
    
    
    
    110,663Total noncurrent liabilities
    
    
    43,762
    
    
    
    
    
    
    
    63,123
    
    
    
    110,619
    
    
    
    30,401
    
    
    
    
    
    
    
    247,905Stockholders investment (deficit)
    
    
    (599,149
    )
    
    
    (483,430
    )
    
    
    (477,359
    )
    
    
    583,868
    
    
    
    45,989
    
    
    
    446,651
    
    
    
    (483,430
    )$
    731,585
    
    
    $
    (91,842
    )
    
    $
    89,568
    
    
    $
    960,512
    
    
    $
    250,827
    
    
    $
    430,288
    
    
    $
    2,370,938
 19




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##### Table of Contents



TOWER AUTOMOTIVE INC.
Consolidating Statement of Operations for the Three Months Ended March 31, 2006
(Amounts in thousands)
 Non-Guarantor
    
    
    Non-GuarantorR.J. Tower
    
    
    Parent
    
    
    
    
    
    
    Restricted
    
    
    UnrestrictedCorporation
    
    
    Guarantor
    
    
    Guarantor Companies
    
    
    Companies
    
    
    Companies
    
    
    Eliminations
    
    
    ConsolidatedRevenues
    
    $
    
    
    
    $
    
    
    
    $
    431,650
    
    
    $
    246,014
    
    
    $
    92,056
    
    
    $
    
    
    
    $
    769,720Cost of sales
    
    
    (2,099
    )
    
    
    
    
    
    
    418,357
    
    
    
    215,524
    
    
    
    88,150
    
    
    
    
    
    
    
    719,932Gross profit
    
    
    2,099
    
    
    
    
    
    
    
    13,293
    
    
    
    30,490
    
    
    
    3,906
    
    
    
    
    
    
    
    49,788Selling, general and administrative expenses
    
    
    (9,876
    )
    
    
    
    
    
    
    31,134
    
    
    
    10,216
    
    
    
    2,563
    
    
    
    
    
    
    
    34,037Restructuring and asset impairment charges, net
    
    
    5
    
    
    
    (4,142
    )
    
    
    6,548
    
    
    
    303
    
    
    
    (192
    )
    
    
    
    
    
    
    2,522Other operating expense/(income)
    
    
    (7,948
    )
    
    
    
    
    
    
    6,643
    
    
    
    785
    
    
    
    
    
    
    
    
    
    
    
    (520
    )Operating income (loss)
    
    
    19,918
    
    
    
    4,142
    
    
    
    (31,032
    )
    
    
    19,186
    
    
    
    1,535
    
    
    
    
    
    
    
    13,749Interest expense
    
    
    17,165
    
    
    
    
    
    
    
    855
    
    
    
    743
    
    
    
    2,043
    
    
    
    
    
    
    
    20,806Interest income
    
    
    (318
    )
    
    
    
    
    
    
    (3
    )
    
    
    47
    
    
    
    (182
    )
    
    
    
    
    
    
    (456
    )Intercompany interest expense/(income)
    
    
    (6,094
    )
    
    
    
    
    
    
    
    
    
    
    6,427
    
    
    
    (333
    )
    
    
    
    
    
    
    Chapter 11 and related reorganization items
    
    
    11,541
    
    
    
    68
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,609Income (loss) before provision for income taxes, equity in
earnings of joint ventures, and minority interest
    
    
    (2,376
    )
    
    
    4,074
    
    
    
    (31,884
    )
    
    
    11,969
    
    
    
    7
    
    
    
    
    
    
    
    (18,210
    )Provision (benefit) for income taxes
    
    
    746
    
    
    
    62
    
    
    
    130
    
    
    
    (3,096
    )
    
    
    3
    
    
    
    
    
    
    
    (2,155
    )Income (loss) before equity in earnings of joint
ventures, and
minority interest
    
    
    (3,122
    )
    
    
    4,012
    
    
    
    (32,014
    )
    
    
    15,065
    
    
    
    4
    
    
    
    
    
    
    
    (16,055
    )Equity in earnings of joint ventures, net of tax
    
    
    (11,227
    )
    
    
    (14,349
    )
    
    
    
    
    
    
    6,616
    
    
    
    
    
    
    
    25,644
    
    
    
    6,684Minority interest, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (966
    )
    
    
    
    
    
    
    
    
    
    
    (966
    )Net income (loss)
    
    $
    (14,349
    )
    
    $
    (10,337
    )
    
    $
    (32,014
    )
    
    $
    20,715
    
    
    $
    4
    
    
    $
    25,644
    
    
    $
    (10,337
    )
 20




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##### Table of Contents



TOWER AUTOMOTIVE, INC.  Consolidating Statement of Cash Flows for the Three Months Ended March 31, 2006  (Amounts in thousands)
 Non-Guarantor
    
    
    Non-GuarantorR. J. Tower
    
    
    Parent
    
    
    
    
    
    
    Restricted
    
    
    UnrestrictedCorporation
    
    
    Guarantor
    
    
    Guarantor Companies
    
    
    Companies
    
    
    Companies
    
    
    Eliminations
    
    
    ConsolidatedOPERATING ACTIVITIES:Net income (loss)
    
    $
    (14,349
    )
    
    $
    (10,337
    )
    
    $
    (32,014
    )
    
    $
    20,715
    
    
    $
    4
    
    
    $
    25,644
    
    
    $
    (10,337
    )Adjustments required to reconcile net income (loss) to
net cash provided by (used in) operating activities:Chapter 11 and related reorganization items, net
    
    
    5,948
    
    
    
    68
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,016Non-cash restructuring and impairment, net
    
    
    
    
    
    
    
    
    
    
    679
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    679Depreciation
    
    
    83
    
    
    
    
    
    
    
    24,119
    
    
    
    11,035
    
    
    
    6,150
    
    
    
    
    
    
    
    41,387Deferred income tax provision (benefit)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,861
    )
    
    
    4,176
    
    
    
    
    
    
    
    (7,685
    )Equity in earnings of joint ventures, net
    
    
    11,227
    
    
    
    14,349
    
    
    
    
    
    
    
    (6,616
    )
    
    
    
    
    
    
    (25,644
    )
    
    
    (6,684
    )Change in working capital and other operating items
    
    
    (32,603
    )
    
    
    (4,080
    )
    
    
    22,879
    
    
    
    (2,920
    )
    
    
    (3,345
    )
    
    
    
    
    
    
    (20,069
    )Net cash provided by (used in) operating activities
    
    
    (29,694
    )
    
    
    
    
    
    
    15,663
    
    
    
    10,353
    
    
    
    6,985
    
    
    
    
    
    
    
    3,307INVESTING ACTIVITIES:Cash disbursed for purchases of property, plant and equipment
    
    
    
    
    
    
    
    
    
    
    (15,757
    )
    
    
    (9,031
    )
    
    
    (4,072
    )
    
    
    
    
    
    
    (28,860
    )Cash proceeds from asset disposal
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32,664
    
    
    
    
    
    
    
    32,664Net cash provided by (used in) investing activities
    
    
    
    
    
    
    
    
    
    
    (15,757
    )
    
    
    (9,031
    )
    
    
    28,592
    
    
    
    
    
    
    
    3,804FINANCING ACTIVITIES:Proceeds from borrowings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,886
    
    
    
    1,253
    
    
    
    
    
    
    
    11,139Repayments of borrowings
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    (3,989
    )
    
    
    (36,838
    )
    
    
    
    
    
    
    (40,830
    )Proceeds from DIP credit facility
    
    
    216,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    216,000Repayments of DIP credit facility
    
    
    (135,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (135,000
    )Net cash provided by (used for) financing activities
    
    
    81,000
    
    
    
    
    
    
    
    (3
    )
    
    
    5,897
    
    
    
    (35,585
    )
    
    
    
    
    
    
    51,309NET CHANGE IN CASH AND CASH EQUIVALENTS
    
    
    51,306
    
    
    
    
    
    
    
    (97
    )
    
    
    7,219
    
    
    
    (8
    )
    
    
    
    
    
    
    58,420CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    702
    
    
    
    
    
    
    
    156
    
    
    
    64,790
    
    
    
    143
    
    
    
    
    
    
    
    65,791CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    52,008
    
    
    $
    
    
    
    $
    59
    
    
    $
    72,009
    
    
    $
    135
    
    
    $
    
    
    
    $
    124,211
 21




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##### Table of Contents





TOWER AUTOMOTIVE INC.  Consolidating Balance Sheet at December 31, 2005  (Amounts in thousands)
 Non-Guarantor
    
    
    Non-GuarantorR.J. Tower
    
    
    Parent
    
    
    
    
    
    
    Restricted
    
    
    UnrestrictedCorporation
    
    
    Guarantor
    
    
    Guarantor Companies
    
    
    Companies
    
    
    Companies
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    702
    
    
    $
    
    
    
    $
    156
    
    
    $
    64,790
    
    
    $
    143
    
    
    $
    
    
    
    $
    65,791Accounts receivable
    
    
    3,381
    
    
    
    3,210
    
    
    
    166,615
    
    
    
    168,600
    
    
    
    21,234
    
    
    
    
    
    
    
    363,040Inventories
    
    
    
    
    
    
    
    
    
    
    60,068
    
    
    
    48,114
    
    
    
    15,251
    
    
    
    
    
    
    
    123,433Prepaid tooling and other
    
    
    5,119
    
    
    
    
    
    
    
    60,763
    
    
    
    88,555
    
    
    
    31,209
    
    
    
    
    
    
    
    185,646Total current assets
    
    
    9,202
    
    
    
    3,210
    
    
    
    287,602
    
    
    
    370,059
    
    
    
    67,837
    
    
    
    
    
    
    
    737,910Property, plant and equipment, net
    
    
    602
    
    
    
    
    
    
    
    537,996
    
    
    
    303,853
    
    
    
    196,343
    
    
    
    
    
    
    
    1,038,794Investments in and advances to (from) affiliates
    
    
    601,229
    
    
    
    (99,312
    )
    
    
    (749,021
    )
    
    
    55,675
    
    
    
    (3,124
    )
    
    
    423,187
    
    
    
    228,634Goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    153,037
    
    
    
    
    
    
    
    
    
    
    
    153,037Other assets, net
    
    
    27,386
    
    
    
    
    
    
    
    33,573
    
    
    
    53,787
    
    
    
    18,105
    
    
    
    
    
    
    
    132,851$
    638,419
    
    
    $
    (96,102
    )
    
    $
    110,150
    
    
    $
    936,411
    
    
    $
    279,161
    
    
    $
    423,187
    
    
    $
    2,291,226Liabilities and Stockholders Investment (Deficit)Current liabilities not subject to compromise:Current maturities of long-term debt and capital lease obligations
    
    $
    
    
    
    $
    
    
    
    $
    14,257
    
    
    $
    11,074
    
    
    $
    126,424
    
    
    $
    
    
    
    $
    151,755Accounts payable
    
    
    5,372
    
    
    
    
    
    
    
    128,697
    
    
    
    186,821
    
    
    
    57,926
    
    
    
    
    
    
    
    378,816Accrued liabilities
    
    
    25,211
    
    
    
    
    
    
    
    61,887
    
    
    
    65,408
    
    
    
    16,742
    
    
    
    
    
    
    
    169,248Total current liabilities
    
    
    30,583
    
    
    
    
    
    
    
    204,841
    
    
    
    263,303
    
    
    
    201,092
    
    
    
    
    
    
    
    699,819Liabilities subject to compromise
    
    
    622,302
    
    
    
    391,521
    
    
    
    286,757
    
    
    
    
    
    
    
    
    
    
    
    (16,363
    )
    
    
    1,284,217Non-current liabilities not subject to compromise:Long-term debt, net of current maturities
    
    
    40,986
    
    
    
    
    
    
    
    43,768
    
    
    
    6,608
    
    
    
    16,461
    
    
    
    
    
    
    
    107,823Debtor-in-possession borrowings
    
    
    531,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    531,000Obligations under capital leases, net of current maturities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,308
    
    
    
    
    
    
    
    
    
    
    
    30,308Other noncurrent liabilities
    
    
    11,963
    
    
    
    
    
    
    
    20,135
    
    
    
    76,968
    
    
    
    16,616
    
    
    
    
    
    
    
    125,682Total noncurrent liabilities
    
    
    583,949
    
    
    
    
    
    
    
    63,903
    
    
    
    113,884
    
    
    
    33,077
    
    
    
    
    
    
    
    794,813Stockholders investment (deficit)
    
    
    (598,415
    )
    
    
    (487,623
    )
    
    
    (445,351
    )
    
    
    559,224
    
    
    
    44,992
    
    
    
    439,550
    
    
    
    (487,623
    )$
    638,419
    
    
    $
    (96,102
    )
    
    $
    110,150
    
    
    $
    936,411
    
    
    $
    279,161
    
    
    $
    423,187
    
    
    $
    2,291,226
 22




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##### Table of Contents



TOWER AUTOMOTIVE, INC.  Consolidating Statement of Operations for the Three Months Ended March 31, 2005  (Amounts in thousands)
 Non-Guarantor
    
    
    Non-GuarantorR.J. Tower
    
    
    Parent
    
    
    Guarantor
    
    
    Restricted
    
    
    UnrestrictedCorporation
    
    
    Guarantor
    
    
    Companies
    
    
    Companies
    
    
    Companies
    
    
    Eliminations
    
    
    ConsolidatedRevenues
    
    $
    
    
    
    $
    
    
    
    $
    577,616
    
    
    $
    242,824
    
    
    $
    95,440
    
    
    $
    
    
    
    $
    915,880Cost of sales
    
    
    (1,542
    )
    
    
    
    
    
    
    547,577
    
    
    
    215,770
    
    
    
    89,284
    
    
    
    
    
    
    
    851,089Gross profit
    
    
    1,542
    
    
    
    
    
    
    
    30,039
    
    
    
    27,054
    
    
    
    6,156
    
    
    
    
    
    
    
    64,791Selling, general and administrative expenses
    
    
    (4,212
    )
    
    
    
    
    
    
    32,994
    
    
    
    11,587
    
    
    
    2,837
    
    
    
    
    
    
    
    43,206Restructuring and asset impairment charges, net
    
    
    105
    
    
    
    
    
    
    
    31,790
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,895Operating income (loss)
    
    
    5,649
    
    
    
    
    
    
    
    (34,745
    )
    
    
    15,467
    
    
    
    3,319
    
    
    
    
    
    
    
    (10,310
    )Interest expense
    
    
    36,376
    
    
    
    2,221
    
    
    
    1,960
    
    
    
    1,368
    
    
    
    1,745
    
    
    
    
    
    
    
    43,670Chapter 11 and related reorganization items
    
    
    41,622
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41,622Income (loss) before provision for income taxes, equity
in earnings of joint ventures, and minority interest
    
    
    (72,349
    )
    
    
    (2,221
    )
    
    
    (36,705
    )
    
    
    14,099
    
    
    
    1,574
    
    
    
    
    
    
    
    (95,602
    )Provision (benefit) for income taxes
    
    
    
    
    
    
    
    
    
    
    1,297
    
    
    
    4,340
    
    
    
    488
    
    
    
    
    
    
    
    6,125Income (loss) before equity in earnings of joint ventures,
and minority interest
    
    
    (72,349
    )
    
    
    (2,221
    )
    
    
    (38,002
    )
    
    
    9,759
    
    
    
    1,086
    
    
    
    
    
    
    
    (101,727
    )Equity in earnings of joint ventures, net of tax
    
    
    (24,228
    )
    
    
    (96,577
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    125,068
    
    
    
    4,263Minority interest, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,334
    )
    
    
    
    
    
    
    
    
    
    
    (1,334
    )Net income (loss)
    
    $
    (96,577
    )
    
    $
    (98,798
    )
    
    $
    (38,002
    )
    
    $
    8,425
    
    
    $
    1,086
    
    
    $
    125,068
    
    
    $
    (98,798
    )
 23




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##### Table of Contents



TOWER AUTOMOTIVE, INC.  Consolidating Statement of Cash Flows for the Three Months Ended March 31, 2005  (Amounts in thousands) (as restated)
 Non-Guarantor
    
    
    Non-GuarantorR. J. Tower
    
    
    Parent
    
    
    Guarantor
    
    
    Restricted
    
    
    UnrestrictedCorporation
    
    
    Guarantor
    
    
    Companies
    
    
    Companies
    
    
    Companies
    
    
    Eliminations
    
    
    ConsolidatedOPERATING ACTIVITIES:Net income (loss)
    
    $
    (96,577
    )
    
    $
    (98,798
    )
    
    $
    (38,002
    )
    
    $
    8,425
    
    
    $
    1,086
    
    
    $
    125,068
    
    
    $
    (98,798
    )Adjustments required to reconcile net income (loss) to
net cash provided by (used in) operating activities:Chapter 11 and related reorganization items, net
    
    
    38,188
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    38,188Non-cash restructuring and impairment, net
    
    
    
    
    
    
    
    
    
    
    32,095
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32,095Depreciation
    
    
    83
    
    
    
    
    
    
    
    26,956
    
    
    
    11,507
    
    
    
    5,045
    
    
    
    
    
    
    
    43,591Deferred income tax provision (benefit)
    
    
    
    
    
    
    
    
    
    
    (2,265
    )
    
    
    2,344
    
    
    
    2,264
    
    
    
    
    
    
    
    2,343Equity in earnings of joint ventures, net
    
    
    (4,263
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,263
    )Change in working capital and other operating items
    
    
    (33,647
    )
    
    
    2,445
    
    
    
    (11,454
    )
    
    
    (8,962
    )
    
    
    (10,062
    )
    
    
    (125,068
    )
    
    
    (163,840
    )Net cash provided by (used in) operating activities
    
    
    (96,216
    )
    
    
    (96,353
    )
    
    
    30,238
    
    
    
    13,314
    
    
    
    (1,667
    )
    
    
    
    
    
    
    (150,684
    )INVESTING ACTIVITIES:Cash disbursed for purchases of property, plant and equipment
    
    
    
    
    
    
    
    
    
    
    (28,719
    )
    
    
    (21,613
    )
    
    
    (7,816
    )
    
    
    
    
    
    
    (58,148
    )Other, net
    
    
    (96,353
    )
    
    
    96,353
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net cash provided by (used in) investing activities
    
    
    (96,353
    )
    
    
    96,353
    
    
    
    (28,719
    )
    
    
    (21,613
    )
    
    
    (7,816
    )
    
    
    
    
    
    
    (58,148
    )FINANCING ACTIVITIES:Proceeds from borrowings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,541
    
    
    
    10,610
    
    
    
    
    
    
    
    16,151Repayments of borrowings
    
    
    (425,000
    )
    
    
    
    
    
    
    (941
    )
    
    
    (6,670
    )
    
    
    (824
    )
    
    
    
    
    
    
    (433,435
    )Proceeds from DIP credit facility
    
    
    623,738
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    623,738Repayments of DIP credit facility
    
    
    (111,125
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (111,125
    )Net cash provided by (used for) financing activities
    
    
    87,613
    
    
    
    
    
    
    
    (941
    )
    
    
    (1,129
    )
    
    
    9,786
    
    
    
    
    
    
    
    95,329NET CHANGE IN CASH AND CASH EQUIVALENTS
    
    
    (104,956
    )
    
    
    
    
    
    
    578
    
    
    
    (9,428
    )
    
    
    303
    
    
    
    
    
    
    
    (113,503
    )CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    107,599
    
    
    
    
    
    
    
    (517
    )
    
    
    41,948
    
    
    
    71
    
    
    
    
    
    
    
    149,101CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    2,643
    
    
    $
    
    
    
    $
    61
    
    
    $
    32,520
    
    
    $
    374
    
    
    $
    
    
    
    $
    35,598
 24




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##### Table of Contents



Item 1A.
    
    Risk Factors.
  
 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.
  Results of Operations
 Three Months Ended March 31, 2006 Compared to the Three Months Ended March 31, 2005
 Revenues
 Gross Profit and Gross Margin.
 25




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##### Table of Contents



Selling, General and Administrative Expenses.
 Interest Expense.
 Chapter 11 and Related Reorganization Items.
 Provision for Income Taxes.
  Equity in Earnings of Joint Ventures, Net of Tax.
 Minority Interest, Net of Tax.
 Restructuring and Asset Impairment
   
    
    In February 2006, the Company announced its decision to enter into decision bargaining
to close its Greenville, MI facility and to move the work to other facilities in the U.S.
 26




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##### Table of Contents




    
    In April 2006, the Company submitted for approval to the Bankruptcy court settlement
agreements with two groups representing current and future retirees. Both settlements
include modifications of retiree health care benefits for both retired salaried employees
as well as current and future retirees of the Companys Milwaukee, WI facility.
    
    In June 2006, the Company announced that it would phase out of production at its
Toronto, Ontario aluminum foundry and mini-mill by August 31, 2006.
    
    In July 2006, the Company announced tentative contract agreements with the United Auto
Workers union and the United Steelworkers union covering approximately 2,100 Company
employees. The agreements are subject to ratification by both unions affected memberships,
and they also must be approved by the Bankruptcy Court overseeing the Companys Chapter 11
case.
   Liquidity and Capital Resources
        Chapter 11 Impact
  27




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##### Table of Contents



DIP Financing
      Back-Stop Agreement
   28




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##### Table of Contents



Stock Options
  Market Risk
       Opportunities
  29




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##### Table of Contents



Disclosure Regarding Forward-Looking Statements
  
 Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk.
  
 Item 4.
    
    Controls and Procedures.
    
    
    Continuing the centralization of purchasing and accounts payable processing in its North
American operations; and
    
    Continuing the standardization of time and attendance systems in its North American
operations through the utilization of a common time and attendance system.
  30




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings.
   
 Item 6.
    
    Exhibits.
 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 and Chief Financial Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
 31




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##### Table of Contents



TOWER AUTOMOTIVE, INC.
RegistrantDate: August 4, 2006
    /s/ Christopher T. HattoChristopher T. HattoCorporate Controller and
Chief Accounting Officer 32




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##### Table of Contents



Exhibit Index
 Exhibit no.
    
    Description of Exhibit31.1
    
    Certification of the Chief Executive Officer pursuant to Section 302of the Sarbanes-Oxley Act of 2002.

31.2
    
    Certification of the Chief Financial Officer pursuant to Section 302of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.