##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-K
   ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT of 1934
   For the fiscal year ended January 31, 2006
  Commission file number:
    000-50303
   Hayes Lemmerz International,
    Inc. (Exact name of
    Registrant as Specified in its Charter)
  Delaware

32-0072578(State or Other Jurisdiction
    of
    Incorporation or Organization)

(I.R.S. Employer
    Identification No.)15300 Centennial Drive,
    Northville, Michigan(Address of Principal
    Executive Offices)

48168(Zip Code)   Registrants telephone number, including area code:
 (734) 737-5000
  Securities Registered Pursuant to Section 12(g) of the
    Act:
 Common Stock, par value $0.01 per share
  Securities Registered Pursuant to Section 15(d) of the
    Act:
 10.5% Senior Notes Due 2010
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
 o þ o
  Rule 12b-2 o þ
    þ o
    DOCUMENTS
    INCORPORATED BY REFERENCE
  Document Description

Form 10-K
    PartPortions of the Registrants
    notice of annual meeting of shareholders and proxy statement to
    be filed pursuant to Regulation 14A within 120 days
    after Registrants fiscal year end of January 31, 2006


Part III




---



##### 



HAYES
    LEMMERZ INTERNATIONAL, INC.
  FORM 10-K
    ANNUAL REPORT
  TABLE OF
    CONTENTS
  
  PagePART IItem 1.


Business


2Item 1A.


Risk Factors


10Item 1B.


Unresolved Staff
    Comments


17Item 2.


Properties


18Item 3.


Legal
    Proceedings


19Item 4.


Submission of
    Matters to a Vote of Security Holders


21PART IIItem 5.


Market for
    Registrants Common Equity, Related Stockholder Matters,
    and Issuer Purchases of Equity Securities


22Item 6.


Selected Financial
    Data


22Item 7.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


24Item 7A.


Quantitative and
    Qualitative Disclosures about Market Risk


40Item 8.


Financial
    Statements and Supplementary Data


42Item 9.


Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


95Item 9A.


Controls and
    Procedures


95Item 9B


Other
    Information


97PART IIIItem 10.


Directors and
    Executive Officers of the Registrant


97Item 11.


Executive
    Compensation


97Item 12.


Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


97Item 13.


Certain
    Relationships and Related Transactions


98Item 14.


Principal
    Accountant Fees and Services


98PART IVItem 15.


Exhibits and
    Financial Statement Schedules


98Signatures


101Computation of Ratio of Earnings to Fixed ChargesHayes SubsidiariesConsent of Independent Registered Public Accounting FirmSection 302 Certification of Curtis J. ClawsonSection 302 Certification of James A. YostSection 906 Certification of Curtis J. ClawsonSection 906 Certification of James A. Yost    FORWARD-LOOKING
    STATEMENTS
  This Annual Report on
    Form 10-K,
    including Managements Discussion and Analysis of
    Financial Condition and Results of Operations, includes
    forward-looking statements within the meaning of the
    Securities Act and Section 21E of the Securities Exchange
    Act of 1934, as amended (Exchange Act). All statements included
    in this Annual Report on
    Form 10-K
    regarding our industry, prospects, plans, financial position and
    business strategy, other than statements of historical facts,
    may constitute forward-looking statements. Forward-looking
    statements generally can be identified by the use of
    forward-looking terminology such as may,
    will, expect, intend,
    estimate, anticipate, plan,
    foresee, believe, or
    continue, or the negatives of these terms or
    variations of them or similar terminology. Although we believe
    that the expectations reflected in these forward-looking
    statements are reasonable, these expectations may not prove to
    be correct. All subsequent written and oral forward-looking
    statements attributable to us or persons acting on our behalf
    are expressly qualified in their entirety by the cautionary
    statements included in this document. These forward-looking
    statements speak only as of the date of this Annual Report on
    Form 10-K.
    We will not update these statements unless the securities laws
    require us to do so. Important factors that could cause our
    actual results to differ materially from our expectations are
    disclosed in this Annual Report on
    Form 10-K,
    including in Section 1A, Risk Factors.
 1




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##### Table of Contents



PART I  Item 1.
    Business  Business
    Overview and Development
  1
              1 12-month
 2




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##### Table of Contents



Segment
    Information
        Automotive
    Wheels Products
    Cast
    Aluminum Wheels for Passenger Cars and Light
    Trucks
  ®
  North America.
  Customers.
 3




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##### Table of Contents



Competition.
  Manufacturing.
  Europe.
  Customers.
  Competition.
  Manufacturing.
  South America, South Africa, and Asia.
  Customers.
  Competition.
  Manufacturing.
  Fabricated
    Wheels for Passenger Cars and Light Trucks
    North America.
 4




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##### Table of Contents



Customers.
  Competition.
  Manufacturing.
  Europe.
  Customers.
  Competition.
  Manufacturing.
  South America.
  Customers.
  Competition.
  Manufacturing.
  Commercial
    Highway Wheels
    North America.
  Customers.
  Competition.
 5




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##### Table of Contents



Manufacturing.
  Europe.
  Customers.
  Competition.
  Manufacturing.
  South America and Asia.
  Customers.
  Competition.
  Manufacturing.
  Components
    Products
    Automotive
    Brake Components
    Customers.
  Competition.
  Manufacturing.
 6




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##### Table of Contents



Powertrain
    Components
    Customers.
  Competition.
  Manufacturing.
  Suspension
    Components
    Aluminum Structural Components.
  Customers.
  Competition.
  Manufacturing.
  Wheel-End Attachments and Assemblies.
  Customers.
  Competition.
  Manufacturing.
  Other
    Cast Aluminum Products
   7




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Material
    Source and Supply
            Intellectual
    Property
      Seasonality
   8




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##### Table of Contents



Customer
    Dependence
      Backlog
    Competition
    Research
    and Development
    Environmental
    Compliance
    Employees
   9




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##### Table of Contents



Financial
    Information about Geographic Areas
    Year Ended


Year Ended


Year EndedJanuary 31,


January 31,


January 31,2006


2005


2004Revenues:United States

$
985.7


$
992.4


$
1,040.3All foreign countries


1,291.5



1,144.6



927.4Total

$
2,277.2


$
2,137.0


$
1,967.7   January 31,


January 31,2006


2005Total long lived
    assets:United States

$
298.9


$
460.1All foreign countries


883.8



1,207.3Total

$
1,182.7


$
1,667.4   We
    have significant international operations that subject us to
    risks not faced by domestic competitors.
  Available
    Information
  Form 10-K, Form 10-Q, Form 8-K,
  Item 1A.
    Risk
    Factors.  Industry
    Risks
  Cyclical
    demand in the automotive industry may adversely affect our
    business.
   10




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##### Table of Contents



We
    depend on a small number of significant customers.
    Our
    customers cost cutting efforts and purchasing practices
    may adversely impact our business.
      We
    operate in the highly competitive automotive supply
    industry.
      Financial
    Risks
  We
    have substantial levels of debt and debt service that will
    divert a significant amount of cash from our business
    operations.
  1 2
 11




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##### Table of Contents




    requiring a substantial portion of our cash flow from operations
    to be dedicated to debt service and therefore not available for
    our operations, capital expenditures, and future business
    opportunities;
    increasing our vulnerability to a downturn in general economic
    conditions or in our business;
    limiting our ability to adjust to changing market conditions,
    placing us at a competitive disadvantage compared to our
    competitors that have relatively less debt; and
    limiting our ability to obtain additional financing or access
    additional funds under our Credit Facility for capital
    expenditures, working capital, or general corporate purposes.  Restrictions
    and covenants in the indenture governing the Senior Notes and
    the Credit Facility limit our ability to take certain actions
    and may limit access to our revolving credit
    facility.
    
    declare dividends or redeem or repurchase capital stock;
    prepay, redeem, or purchase debt, including the Senior Notes;
    incur liens and engage in sale-leaseback transactions;
    make loans and investments;
    incur additional debt, including borrowings under our Credit
    Facility;
    amend or otherwise alter certain debt documents;
    make capital expenditures;
    engage in mergers, acquisitions, and asset sales;
    enter into transactions with affiliates; and
    alter the business we conduct.    We may
    not generate sufficient cash flow to fund required capital
    expenditures and for that and other reasons we may need
    additional financing in the future, which we may be unable to
    obtain.
   12




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##### Table of Contents



We may
    suffer future asset impairments and other restructuring charges,
    including write downs of goodwill or intangible
    assets.
      Our
    exposure to variable interest rates and foreign currency
    fluctuations may negatively affect our results.
      period-to-period
  We may
    be unable to maintain trade credit with our
    suppliers.
    Our
    failure to achieve and maintain effective internal controls in
    accordance with Section 404 of the Sarbanes-Oxley Act of
    2002 could have a material adverse effect on our business and
    the price of our common stock.
   13




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##### Table of Contents



The
    nature of our business exposes us to product liability, recall,
    and warranty claims and other legal proceedings.
    Our
    pension and other postretirement employee benefits expense could
    materially increase.
      We are
    being investigated by the SEC in connection with the restatement
    of our fiscal 1999, 2000, and fiscal quarter ended
    April 30, 2001 consolidated financial
    statements.
    We
    have recently experienced downgrades to our credit ratings and
    we may experience further downgrades in the
    future.
   14




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Operational
    Risks
  Increased
    cost of supplies and raw materials, especially steel and iron,
    could affect our financial health.
      Unexpected
    equipment failures, delays in deliveries, or catastrophic loss
    at any of our manufacturing facilities could lead to production
    curtailments or shutdowns.
    We
    have significant international operations that subject us to
    risks not faced by domestic competitors.
    
    agreements may be difficult to enforce and receivables difficult
    to collect through a foreign countrys legal system;
    foreign customers may have longer payment cycles;
    foreign countries may impose additional withholding taxes or
    otherwise tax our foreign income, impose tariffs or adopt other
    restrictions on foreign trade or investment, including foreign
    exchange controls;
    foreign laws or regulations may restrict our ability to
    repatriate cash from foreign operations;
    necessary export licenses or customs clearances may be difficult
    to obtain;
    intellectual property rights may be more difficult to enforce in
    foreign countries;
    political or economic conditions or exposure to local social
    unrest, including any resultant acts of war, terrorism or
    similar events in the countries in which we operate could have
    an adverse effect on our earnings from operations in those
    countries; 15




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##### Table of Contents




    unexpected adverse changes in foreign laws or regulatory
    requirements may occur;
    compliance with a variety of foreign laws and regulations may be
    difficult;
    in certain countries we are subject to nationwide collective
    labor agreements that we did not negotiate;
    labor laws in certain countries may make it more difficult or
    expensive to reduce our labor force in response to reduced
    demand; and
    differing foreign tax structures may subject us to additional
    taxes or affect our ability to repatriate cash from our foreign
    subsidiaries.    We may
    not be able to successfully implement our planned operational
    improvements or realize the benefits of those plans already
    implemented.
    We may
    be unable to successfully launch production at our newly
    expanded facilities.
    We may
    not be able to timely or successfully launch new
    products.
    Our
    success will depend on our ability to attract and retain
    qualified employees.
   16




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We
    might fail to adequately protect our intellectual property or
    third parties might assert that our technologies infringe on
    their intellectual property.
    Our
    products may be rendered obsolete or less attractive by changes
    in regulatory requirements or competitive
    technologies.
    A high
    percentage of our customers employees and certain of our
    employees are unionized or covered by collective bargaining
    agreements.
    We are
    subject to potential exposure to environmental
    liabilities.
      Item 1B.
    Unresolved
    Staff Comments   17




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##### Table of Contents



Item 2.
    Properties      Owned/Location

Segment

Purpose

LeasedNorth AmericaAkron, OH

Automotive Wheels

Manufacturing

OwnedBristol, IN

Components

Manufacturing

OwnedChihuahua, Mexico

Automotive Wheels

Manufacturing

OwnedFerndale, MI

Components and Other

Technical Center, Offices

OwnedGainesville, GA

Automotive Wheels

Manufacturing

OwnedHomer, MI

Components

Manufacturing

OwnedHuntington, IN*

Automotive Wheels

Manufacturing

OwnedLaredo, TX

Components

Offices and Warehouse

LeasedMontague, MI

Components

Manufacturing

OwnedMonterrey, Mexico

Components

Manufacturing

LeasedNorthville, MI

Other

World Headquarters, R&D

OwnedNuevo Laredo, Mexico

Components

Manufacturing

OwnedSedalia, MO

Automotive Wheels

Manufacturing

OwnedSouthfield, MI

Components

Manufacturing

OwnedWabash, IN

Components

Manufacturing

OwnedEuropeBarcelona, Spain

Automotive Wheels

Manufacturing

OwnedBergen, Netherlands

Components

Manufacturing

OwnedDello, Italy

Automotive Wheels

Manufacturing

OwnedHoboken, Belgium
    (2 facilities)

Automotive Wheels and Components

Manufacturing

OwnedKönigswinter, Germany
    (2 facilities)

Automotive Wheels

Manufacturing

OwnedManisa, Turkey (3 facilities)

Automotive Wheels

Manufacturing

OwnedManresa, Spain

Automotive Wheels

Manufacturing

OwnedOstrava, Czech Republic
    (2 facilities)

Automotive Wheels

Manufacturing

OwnedTegelen, Netherlands

Components

Manufacturing

OwnedRest of the WorldBangkok, Thailand

Automotive Wheels

Manufacturing

LeasedJohannesburg, S. Africa

Automotive Wheels

Manufacturing

OwnedPune, India

Automotive Wheels

Manufacturing

LeasedSao Paulo, Brazil
    (2 facilities)

Automotive Wheels

Manufacturing

OwnedYokohama, Japan

Automotive Wheels

Sales Office

Leased  18




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##### Table of Contents



*
    
    We have announced that this facility will be closed during 2006.  Item 3.
    Legal
    Proceedings    Rule 10b-5 Rules 12b-20
       19




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##### Table of Contents



20




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##### Table of Contents



Item 4.
    Submission
    of Matters to a Vote of Security Holders   21




---



##### Table of Contents



PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder
    Matters, and Issuer Purchases of Equity Securities      High


LowFiscal 2005:First quarter

$
8.04


$
3.98Second quarter


8.37



5.02Third quarter


7.99



3.42Fourth quarter


4.61



2.55   High


LowFiscal 2004:First quarter

$
18.50


$
13.48Second quarter


15.50



12.15Third quarter


13.55



8.19Fourth quarter


9.72



6.80     Item 6.
    Selected
    Financial Data  Position 90-7, (SOP 90-7),
   22




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##### Table of Contents



Successor


PredecessorEight


FourYear


Year


Months


Months


Year


YearEnded


Ended


Ended


Ended


Ended


EndedJanuary 31,


January 31,


January 31,


May 31,


January 31,


January 31,2006


2005


2004


2003


2003


2002Income statement data:Net sales

$
2,277.2


$
2,137.0


$
1,306.6


$
661.1


$
1,912.1


$
1,940.6Depreciation and amortization


165.1



172.2



107.0



45.2



127.9



151.2Asset impairments and other
    restructuring charges


203.3



9.2



28.9



6.4



43.0



141.4Goodwill impairments


185.5



















Loss on investment in joint venture






















3.8Interest expense, net(1, 2)


65.9



43.6



40.7



21.6



68.9



166.3Subsidiary preferred stock dividends


0.8



0.8



0.5











Reorganization items














45.0



43.6



47.8Fresh start accounting
    adjustments(3)














(63.1
)






Income tax (benefit) expense


(1.2
)


17.3



10.9



60.3



3.6



11.9Loss from continuing operations
    before cumulative effect of a change in accounting principle and
    extraordinary gain


(468.1
)


(64.1
)


(45.3
)


(33.3
)


(80.1
)


(390.3
)Income (loss) from discontinued
    operations, net of tax of $1.5, $2.4, $0.0, $0.0, $0.0 and $0.0,
    respectively


2.0



(0.8
)


(1.2
)


(0.4
)


(45.1
)


(6.4
)Gain on sale of discontinued
    operations, net of tax of $3.8


8.6



















Cumulative effect of change in
    accounting principle, net of tax of $0.8, and $0.0,
    respectively(4)






2.6











(509.3
)


Extraordinary gain, net of tax of
    $0(3)














1,076.7







Net (loss) income

$
(457.5
)

$
(62.3
)

$
(46.5
)

$
1,043.0


$
(634.5
)

$
(396.7
)Balance sheet data:Total assets

$
1,799.2


$
2,290.2


$
2,265.5






$
1,831.1


$
2,346.2DIP facility, bank borrowings and
    current portion of long-term debt(1)


44.7



11.1



25.5







103.3



40.5Long-term debt


684.3



631.1



752.4







60.9



91.7Liabilities subject to compromise


















2,130.9



2,116.6Stockholders equity (deficit)


183.3



701.3



595.9







(1,074.4
)


(460.0
)Per Share Data:Loss from continuing operations
    before cumulative effect of a change in accounting principle and
    extraordinary gain

$
(12.35
)

$
(1.71
)

$
(1.51
)










Net (loss)

$
(12.07
)

$
(1.66
)

$
(1.55
)










Average number of shares
    outstanding (in thousands)


37,942



37,605



30,011











     (1)
    
    See Note 1, Description of Business, Chapter 11
    Filings, and Emergence from Chapter 11, to the
    consolidated financial statements included herein. 23




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##### Table of Contents



(2)
    
    For the four months ended May 31, 2003 and fiscal years
    ended January 31, 2003 and 2002, interest expense, net,
    excludes approximately $38.7 million, $117.6 million
    and $18.7 million, respectively, of interest expense that
    would have accrued during those periods with respect to certain
    long-term debt classified as liabilities subject to compromise.(3)
    
    See Note 3, Fresh Start Accounting, to the
    consolidated financial statements included herein.(4)
    
    See Note 2, Basis of Presentation and Summary of
    Significant Accounting Policies, to the consolidated
    financial statements included herein.  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operation    Executive
    Summary
  Company
    Overview
           24




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##### Table of Contents



Results
    of Operations
  Consolidated
    Results  Comparison of Fiscal 2005 to Fiscal
    2004
    2005


2004


$ Change


% ChangeNet sales:Automotive Wheels

$
1,594.4


$
1,440.6


$
153.8



10.7
%Components


682.8



696.4



(13.6
)


(2.0
)%Total

$
2,277.2


$
2,137.0


$
140.2



6.6
%Gross profit

$
174.2


$
190.5


$
(16.3
)


(8.6
)%Marketing, general, and
    administrative


164.2



156.4



7.8



5.0
%Amortization of intangible assets


17.3



13.8



3.5



25.4
%Asset impairments and other
    restructuring charges


203.3



9.2



194.1Goodwill impairment


185.5







185.5Other income, net


(0.7
)


(8.7
)


8.0



(92.0
)%(Loss) earnings from operations


(395.4
)


19.8



(415.2
)Interest expense, net


65.9



43.6



22.3



51.1
%Other non-operating expense


0.8



1.7



(0.9
)


(52.9
)%Loss on early extinguishment of
    debt






12.2



(12.2
)


(100.0
)%Income tax (benefit) expense


(1.2
)


17.3



(18.5
)


(106.9
)%Minority interest


7.2



9.1



(1.9
)


(20.9
)%Loss from continuing operations
    before cumulative effect of change in accounting principle


(468.1
)


(64.1
)


(404.0
)


630.3
%Income from discontinued
    operations, net of tax of $1.5 and $2.4, respectively


2.0



(0.8
)


2.8



(350.0
)%Gain on sale of discontinued
    operations, net of tax of $3.8


8.6







8.6Cumulative effect of change in
    accounting principle, net of tax of $0.8






2.6



(2.6
)


(100.0
)%Net loss

$
(457.5
)

$
(62.3
)

$
(395.2
)


634.3
%   Net
    sales
    Gross
    profit
   25




---



##### Table of Contents



Marketing,
    general, and administrative
    Asset
    impairments and other restructuring charges
      Goodwill
    impairment
    Interest
    expense, net
     26




---



##### Table of Contents



Income
    taxes
    Discontinued
    Operations
      Net
    loss
    Segment
    Results  Comparison of Fiscal 2005 to Fiscal
    2004
  Automotive
    Wheels
    2005


2004


$ ChangeNet sales

$
1,594.4


$
1,440.6


$
153.8Asset impairments and other
    restructuring charges:Facility closure costs

$
3.3


$
4.8


$
(1.5
)Impairment of machinery,
    equipment, and tooling


9.3



2.2



7.1Impairment of goodwill


185.5







185.5Severance and other restructuring
    costs


5.0



1.4



3.6Total asset impairments and other
    restructuring charges

$
203.1


$
8.4


$
194.7(Loss) earnings from operations

$
(150.4
)

$
63.4


$
(213.8
)   Net
    sales
   27




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##### Table of Contents



Asset
    impairments and other restructuring charges
      Goodwill
    impairments
    Earnings
    from operations
    Components
    2005


2004


$ ChangeNet sales

$
682.8


$
696.4


$
(13.6
)Asset impairments and other
    restructuring charges:Facility closure costs

$



$
(0.2
)

$
0.2Impairment of land, building,
    machinery, equipment, tooling and definite lived intangible
    assets


185.7







185.7Severance and other restructuring
    costs






0.6



(0.6
)Total asset impairments and other
    restructuring charges

$
185.7


$
0.4


$
185.3Loss from operations

$
(215.2
)

$
(25.6
)

$
(189.6
)   Net
    sales
   28




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##### Table of Contents



Asset
    impairments and other restructuring charges
      Loss
    from operations
    Other
    2005


2004


$ ChangeLoss from operations

$
(29.8
)

$
(18.0
)

$
(11.8
)   Loss
    from operations
   29




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##### Table of Contents



Consolidated
    Results  Comparison of Fiscal 2004 to Fiscal
    2003
    2004


2003


$ Change


% ChangeNet sales:Automotive Wheels

$
1,440.6


$
1,259.4


$
181.2



14.4
%Components


696.4



708.3



(11.9
)


(1.7
)%Total

$
2,137.0


$
1,967.7


$
169.3



8.6
%Gross profit

$
190.5


$
209.5


$
(19.0
)


(9.1
)%Marketing, general, and
    administrative


156.4



129.4



27.0



20.9
%Amortization of intangibles


13.8



10.0



3.8



38.0
%Asset impairments and other
    restructuring charges


9.2



35.3



(26.1
)


(73.9
)%Reorganization items






45.0



(45.0
)


(100.0
)%Fresh start accounting adjustments






(63.1
)


63.1



(100.0
)%Other (income) expense, net


(8.7
)


(8.2
)


(0.5
)


6.1
%Earnings from operations


19.8



61.1



(41.3
)


(67.6
)%Interest expense, net


43.6



62.3



(18.7
)


(30.0
)%Other non-operating expense


1.7



1.1



0.6



54.5
%Loss on early extinguishment of
    debt


12.2







12.2Income tax expense


17.3



71.2



(53.9
)


(75.7
)%Minority interest


9.1



5.1



4.0



78.4
%Loss from continuing operations
    before cumulative effect of change in accounting principle


(64.1
)


(78.6
)


14.5



(18.4
)%(Income) loss from discontinued
    operations, net of tax of $2.4 and $0.0, respectively


(0.8
)


(1.6
)


0.8



(50.0
)%Cumulative effect of change in
    accounting principle, net of tax of $0.8


2.6







2.6Extraordinary gain on debt
    discharge, net of tax






1,076.7



(1,076.7
)


(100.0
)%Net (loss) income

$
(62.3
)

$
996.5


$
(1,058.8
)


(106.3
)%   Net
    sales
    Gross
    profit
   30




---



##### Table of Contents



Marketing,
    general, and administrative
    Reorganization
    items and fresh start accounting adjustments
  SOP 90-7,
  Asset
    impairments and other restructuring charges
      Interest
    expense, net
      Income
    taxes
   31




---



##### Table of Contents



Discontinued
    operations
      Extraordinary
    gain on debt discharge, net of tax
  SOP 90-7,
  Net
    loss
    Segment
    Results  Comparison of Fiscal 2004 to Fiscal
    2003
  Automotive
    Wheels
    2004


2003


$ ChangeNet sales

$
1,440.6


$
1,259.4


$
181.2Earnings from operations excluding
    fresh start accounting adjustments and reorganization items

$
63.4


$
57.7


$
5.7Fresh start accounting adjustments

$



$
57.9


$
(57.9
)Reorganization items

$



$
(0.1
)

$
0.1Asset impairments and other
    restructuring charges:Facility closure costs

$
4.8


$
0.9


$
3.9Impairment of manufacturing
    facilities


2.2



1.5



0.7Impairment of machinery,
    equipment, and tooling






21.4



(21.4
)Severance and other restructuring
    costs


1.4



0.6



0.8Total asset impairments and other
    restructuring charges

$
8.4


$
24.4


$
(16.0
)   Net
    sales
   32




---



##### Table of Contents



Asset
    impairments and other restructuring charges
    Earnings
    from operations
    Components
    2004


2003


$ ChangeNet sales

$
696.4


$
708.3


$
(11.9
)Earnings (loss) from operations
    excluding fresh start accounting adjustments and reorganization
    items

$
(25.6
)

$
9.4


$
(34.9
)Fresh start accounting adjustments

$



$
27.7


$
(27.7
)Reorganization items

$



$
0.2


$
(0.2
)Asset impairments and other
    restructuring charges:Facility closure costs

$
(0.2
)

$



$
(0.2
)Impairment of manufacturing
    facilities






0.9



(0.9
)Impairment of machinery,
    equipment, and tooling






10.0



(10.0
)Severance and other restructuring
    costs


0.6







0.6Total asset impairments and other
    restructuring charges

$
0.4


$
10.9


$
(10.5
)   Net
    sales
    Asset
    impairments and other restructuring charges
   33




---



##### Table of Contents



Earnings
    from operations
    Other
    2004


2003


$ ChangeLoss from operations excluding
    fresh start accounting adjustments and reorganization items

$
(18.0
)

$
(24.0
)

$
5.9   Loss
    from operations
    Liquidity
    and Capital Resources
  Cash
    Flows
  Operating Activities:
  Investing Activities:
  Financing Activities:
   34




---



##### Table of Contents



Sources
    of Liquidity
      Other
    Liquidity Matters
       35




---



##### Table of Contents



Credit
    Ratings
  S&P


MoodysCorporate and bank debt rating


B



B3Senior Note rating


B



Caa3   Postretirement
    Benefits
  Position FAS 106-2
  Off
    Balance Sheet Arrangements
      Contractual
    Obligations
    Payment Due by PeriodLess Than


1-3


4-5


After1 Year


Years


Years


5 Years


TotalShort-term borrowings

$
25.5


$



$



$



$
25.5Long-term debt


15.6



13.9



633.0







662.5Mortgage note payable


0.2



21.8











22.0Capital lease obligations


3.4



7.5



8.1







19.0Operating leases


14.8



16.6



7.1



1.1



39.6Redeemable preferred stock of
    subsidiary














12.1



12.1Capital expenditures


24.6















24.6United States pension contributions


16.2



19.7



0.9







36.8Total obligations

$
100.3


$
79.5


$
649.1


$
13.2


$
842.1  36




---



##### Table of Contents



Other
    Cash Requirements
    Interest

$
70.2Taxes


23.0Pension and other post-retirement
    benefits funding


40.5Restructuring costs


7.7   Other
    Matters
  Inflation
    Critical
    Accounting Policies
    Asset
    impairment losses and other restructuring charges
     37




---



##### Table of Contents



Pension
    and postretirement benefits other than pensions
      Position 90-7,
  Goodwill
    impairment testing
      Allowance
    for uncollectible accounts
   38




---



##### Table of Contents



Income
    Taxes
        New
    Accounting Pronouncements
  Issue 05-5, (EITF 05-5). EITF 05-5 EITF 05-5.
    (SFAS 123-R). SFAS 123-R SFAS 123-R SFAS 123-R
 39




---



##### Table of Contents



SFAS 123-R SFAS 123-R. SFAS 123-R
  FAS 109-1, FAS 109-1). FAS 109-1
  FAS 109-2, FAS 109-2). FAS 109-2 FAS 109-2
    Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk  Market
    Risks
    Foreign
    Exchange
     40




---



##### Table of Contents



Interest
    Rates
    Commodities
   41




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  HAYES
    LEMMERZ INTERNATIONAL, INC.
  INDEX TO
    FINANCIAL STATEMENTS
  PageReport of
    Independent Registered Public Accounting Firm


43Consolidated
    Statements of Operations


44Consolidated
    Balance Sheets


45Consolidated
    Statements of Cash Flows


46Consolidated
    Statements of Changes in Stockholders Equity (Deficit)


47Notes to
    Consolidated Financial Statements


48  42




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm           Internal Control  Integrated Framework
  Position 90-7, (SOP 90-7).
        43




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF OPERATIONS
  Successor


PredecessorYear


Year


Eight Months


Four MonthsEnded


Ended


Ended


EndedJanuary 31,


January 31,


January 31,


May 31,2006


2005


2004


2003(Dollars in millions, except per
    share amounts)Net sales

$
2,277.2


$
2,137.0


$
1,306.6


$
661.1Cost of goods sold


2,103.0



1,946.5



1,171.5



586.7Gross profit


174.2



190.5



135.1



74.4Marketing, general, and
    administrative


164.2



156.4



90.7



38.7Amortization of intangible assets


17.3



13.8



8.5



1.5Asset impairments and other
    restructuring charges


203.3



9.2



28.9



6.4Goodwill impairment


185.5











Other income, net


(0.7
)


(8.7
)


(4.3
)


(3.9
)Reorganization items














45.0Fresh start accounting adjustments














(63.1
)Earnings (loss) from operations


(395.4
)


19.8



11.3



49.8Interest expense, net (excluding
    $38.7 million not accrued on liabilities subject to
    compromise during the four months ended May 31, 2003)


65.9



43.6



40.7



21.6Other non-operating expense


0.8



1.7



1.1



Loss on early extinguishment of debt






12.2







(Loss) income from continuing
    operations before taxes, minority interest, cumulative effect of
    change in accounting principle, and extraordinary gain


(462.1
)


(37.7
)


(30.5
)


28.2Income tax (benefit) expense


(1.2
)


17.3



10.9



60.3Loss from continuing operations
    before minority interest, cumulative effect of change in
    accounting principle, and extraordinary gain


(460.9
)


(55.0
)


(41.4
)


(32.1
)Minority interest


7.2



9.1



3.9



1.2Loss from continuing operations
    before cumulative effect of change in accounting principle and
    extraordinary gain


(468.1
)


(64.1
)


(45.3
)


(33.3
)Discontinued operations:Income (loss) from discontinued
    operations, net of tax of $1.5, $2.4, $0.0 and $0.0, respectively


2.0



(0.8
)


(1.2
)


(0.4
)Gain on sale of discontinued
    operations, net of tax of $3.8


8.6











Total income (loss) from
    discontinued operations, net of tax


10.6



(0.8
)


(1.2
)


(0.4
)Cumulative effect of change in
    accounting principle, net of tax of $0.8






2.6







Extraordinary gain on debt
    discharge, net of tax














1,076.7Net (loss) income

$
(457.5
)

$
(62.3
)

$
(46.5
)

$
1,043.0Loss per common share dataBasic and diluted:Loss from continuing operations
    before cumulative effect of change in accounting principle and
    extraordinary gain

$
(12.35
)

$
(1.71
)

$
(1.51
)Income (loss) from discontinued
    operations, net of tax


0.05



(0.02
)


(0.04
)Gain on sale of discontinued
    operations, net of tax of $3.8


0.23







Cumulative effect of change in
    accounting principle, net of tax






0.07



Net loss

$
(12.07
)

$
(1.66
)

$
(1.55
)Weighted average shares outstanding
    (in millions)


37.9



37.6



30.0    44




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  CONSOLIDATED BALANCE SHEETS
  SuccessorJanuary 31,


January 31,2006


2005(Dollars in millions,except per share
    amounts)ASSETSCurrent assets:Cash and cash equivalents

$
42.5


$
34.9Receivables, net of allowance of
    $4.2 million and $4.9 million at January 31, 2006
    and 2005, respectively


255.6



226.8Other receivables


101.0



77.0Inventories


179.9



205.0Deferred tax assets


3.5



2.2Prepaid expenses and other current
    assets


15.6



19.2Assets held for sale


4.4



47.9Total current assets


602.5



613.0Property, plant, and equipment, net


758.1



971.1Deferred tax assets


14.0



9.8Goodwill


197.8



417.9Customer relationships, net


110.5



135.9Other intangible assets, net


77.2



97.4Other assets


39.1



45.1Total assets

$
1,799.2


$
2,290.2LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent liabilities:Bank borrowings and other notes

$
25.5


$
0.6Current portion of long-term debt


19.2



10.5Accounts payable and accrued
    liabilities


367.8



394.7Total current liabilities


412.5



405.8Long-term debt, net of current
    portion


684.3



631.1Deferred tax liabilities


62.7



81.1Pension and other long-term
    liabilities


409.2



425.4Series A warrants and
    Series B warrants






0.5Redeemable preferred stock of
    subsidiary


12.1



11.3Minority interest


35.1



33.7Commitments and contingencies






Stockholders equity:Preferred stock,
    1,000,000 shares authorized, none issued or outstanding at
    January 31, 2006 or 2005






Common stock, par value
    $0.01 per share:100,000,000 shares
    authorized; 37,991,269 and 37,865,962 issued and outstanding at
    January 31, 2006 and 2005, respectively


0.4



0.4Additional paid in capital


675.9



670.6Accumulated deficit


(566.3
)


(108.8
)Accumulated other comprehensive
    income


73.3



139.1Total stockholders equity


183.3



701.3Total liabilities and
    stockholders equity

$
1,799.2


$
2,290.2    45




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CASH FLOWS  Successor


PredecessorYear


Year


Eight Months


Four MonthsEnded


Ended


Ended


EndedJanuary 31,


January 31,


January 31,


May 31,2006


2005


2004


2003(Dollars in millions)Cash flows from operating
    activities:Income (loss) from continuing
    operations

$
(468.1
)

$
(61.5
)

$
(45.3
)

$
1,043.4Adjustments to reconcile net income
    (loss) from operations to net cash provided by (used for)
    operating activities:Depreciation and tooling
    amortization


147.8



158.4



98.5



43.7Amortization of intangibles


17.3



13.8



8.5



1.5Amortization of deferred financing
    fees and accretion of discount


5.9



3.7



2.4



1.6Interest income resulting from fair
    value adjustment of Series A Warrants and Series B
    Warrants


(0.5
)


(7.7
)


(1.1
)


Change in deferred income taxes


(25.4
)


(9.4
)


(1.7
)


51.3Asset impairments


195.0



2.2



28.4



5.3Goodwill impairment


185.5











Minority interest


7.2



9.1



3.9



1.2Subsidiary preferred stock
    dividends accrued


0.8



0.8



0.5



Equity compensation expense


5.3



5.5



4.1



Loss on early extinguishment of debt






12.2







(Gain) loss on sale of assets and
    businesses


3.0



0.6



(0.4
)


(0.4
)Changes in operating assets and
    liabilities that increase (decrease) cash flows:Receivables


(41.0
)


95.1



6.7



(12.5
)Other receivables


(24.0
)


(77.0
)






Inventories


14.4



(13.7
)


13.7



(2.3
)Prepaid expenses and other


(4.0
)


(8.8
)


0.8



5.4Accounts payable and accrued
    liabilities


(38.3
)


35.3



3.4



(4.8
)Chapter 11 items:Reorganization items














45.0Fresh start accounting adjustments














(63.1
)Extraordinary gain on debt discharge














(1,076.7
)Interest accrued on Credit Agreement














16.9Payments related to Chapter 11
    filings


(0.1
)


(1.6
)


(45.2
)


(22.4
)Cash provided by (used for)
    operating activities


(19.2
)


157.1



77.2



33.1Cash flows from investing
    activities:Purchase of property, plant,
    equipment, and tooling


(123.5
)


(156.2
)


(104.3
)


(25.3
)Purchase of equipment previously
    leased














(23.6
)Purchase of businesses, net of cash
    acquired


(4.9
)






(19.8
)


Proceeds from disposal of assets
    and businesses


68.1



0.7



4.7



0.8Cash used for investing activities


(60.3
)


(155.5
)


(119.4
)


(48.1
)Cash flows from financing
    activities:Changes in bank borrowings and
    credit facilities


24.8



(0.7
)


(16.0
)


(59.7
)Proceeds from (redemption of)
    Senior Notes, net of discount and related fees






(96.7
)






242.8Proceeds from (redemption of) Term
    Loan B, net of related fees


(94.9
)


(16.0
)






436.1Proceeds from Term Loan C


150.0











Payment to prepetition lenders














(477.3
)Payment to holders of Old Senior
    Notes














(13.0
)Borrowings (repayment) of long-term
    debt


8.3



(17.5
)


(82.5
)


Repayment of notes payable issued
    in connection with purchases of businesses






(13.1
)






(2.0
)Dividends to minority shareholders


(3.6
)










Net proceeds from issuance of
    common stock






117.0







(1.3
)Cash provided by (used for)
    financing activities


84.6



(27.0
)


(98.5
)


125.6Net cash provided by operating
    activities (discontinued operations)


5.3



7.2



6.7



(1.4
)Net cash used for investing
    activities (discontinued operations)


(0.7
)


(2.5
)


(2.4
)


(1.6
)Net cash provided by (used for)
    financing activities (discontinued operations)










(1.4
)


1.3Effect of exchange rate changes on
    cash and cash equivalents


(2.1
)


5.7



7.2



4.1Increase (decrease) in cash and
    cash equivalents


7.6



(15.0
)


(130.6
)


113.0Adjustment for the elimination of
    the one month lag






1.4







Cash and cash equivalents at
    beginning of period


34.9



48.5



179.1



66.1Cash and cash equivalents at end of
    period

$
42.5


$
34.9


$
48.5


$
179.1    46




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF CHANGES IN
    STOCKHOLDERS EQUITY (DEFICIT)
  AccumulatedRetained


OtherEarnings


ComprehensivePar


Paid in


Treasury


(Accumulated


IncomeShares


Value


Capital


Stock


Deficit)


(Loss)


Total(Dollars in millions, except per
    share amounts)PredecessorBalance at January 31, 2003


28,455,995


$
0.3


$
235.1


$
(25.7
)

$
(1,176.9
)

$
(107.2
)

$
(1,074.4
)Comprehensive income:Net income


















1,043.0







1,043.0Currency translation adjustment,
    net of tax






















31.4



31.4Total comprehensive income


























1,074.4Elimination of Predecessor equity
    accounts under fresh start accounting


(28,455,995
)


(0.3
)


(235.1
)


25.7



133.9



75.8



Balance at May 31, 2003





$



$



$



$



$



$
SuccessorBalance at May 31, 2003





$



$



$



$



$



$
Distribution of new common stock
    upon emergence


30,000,000



0.3



544.1















544.4Comprehensive income:Net loss


















(46.5
)






(46.5
)Currency translation adjustment,
    net of tax






















93.9



93.9Total comprehensive income


























47.4Equity compensation expense










4.1















4.1Balance at January 31, 2004


30,000,000


$
0.3


$
548.2


$



$
(46.5
)

$
93.9


$
595.9Comprehensive income:Net loss





$



$



$



$
(62.3
)

$



$
(62.3
)Minimum pension liability
    adjustment, net of tax of $1.4






















(2.2
)


(2.2
)Currency translation adjustment,
    net of tax of $0.3






















47.4



47.4Total comprehensive loss


























(17.1
)Issuance of common stock


7,720,970



0.1



116.9















117.0Shares issued due to vesting of
    restricted stock units


144,992























Equity compensation expense










5.5















5.5Balance at January 31, 2005


37,865,962


$
0.4


$
670.6


$



$
(108.8
)

$
139.1


$
701.3Comprehensive income:Net loss





$



$



$



$
(457.5
)

$



$
(457.5
)Minimum pension liability
    adjustment, net of tax benefit of $4.7






















(7.3
)


(7.3
)Currency translation adjustment,
    net of tax expense of $7.5






















(56.6
)


(56.6
)Unrealized loss on derivatives






















(1.9
)


(1.9
)Total comprehensive loss


























(523.3
)Shares issued due to vesting of
    restricted stock units


125,307























Equity compensation expense










5.3















5.3Balance at January 31, 2006


37,991,269


$
0.4


$
675.9


$



$
(566.3
)

$
73.3


$
183.3    47




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  Year Ended January 31, 2006, Year Ended January 31,
    2005, Eight Months Ended
 January 31, 2004, and Four Months Ended May 31,
    2003
  Note 1.
    Description
    of Business, Chapter 11 Filings and Emergence from
    Chapter 11  Description
    of Business
  12-month
    Chapter 11
    Filings
      Emergence
    from Chapter 11
     48




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Rule 12g-3(a)
    1 2
    PredecessorFour MonthsEndedMay 31,2003Critical employee retention plan
    provision

$
11.7Professional fees related to the
    Filing


30.8Creditors Trust obligation


2.0Other


0.5Total

$
45.0  49




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
         
    one half of the restricted units vested on the first anniversary
    of the Effective Date; and
    one half of the restricted units vested on the second
    anniversary of the Effective Date.    Note 2.
    Basis of
    Presentation and Summary of Significant Accounting
    Policies  Basis
    of Presentation
    Position 90-7, (SOP 90-7). SOP 90-7 SOP 90-7,
 50




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Summary
    of Significant Accounting Policies
  Principles of Consolidation:
  st
  Cash and Cash Equivalents:
  Accounts Receivable:
  Inventories: first-in,
  Property, Plant and Equipment:
  Buildings


12-25 yearsMachinery and equipment


1-10 years     Special Tooling:
 51




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Goodwill and Other Intangible Assets:
  Impairment of Long-lived Assets:
  Financial Instruments: 1 2
  .
        Pension and Postretirement Benefits Other Than
    Pension:
 52




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      SOP 90-7,
  Accumulated Other Comprehensive
    Income:
    Revenue Recognition:
  Research and Development Costs:
  Asset Impairment Losses and Other Restructuring
    Charges:
   53




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Foreign Currency
    Translation/Transaction:
  Taxes on Income:
  Reclassifications:
  Weighted Average
    Shares Outstanding:
  SuccessorJanuary 31,


January 31,2006


2005Basic weighted average shares
    outstanding


37,942



37,605Dilutive effect of options and
    warrants






Diluted weighted average shares
    outstanding


37,942



37,605    54




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Statements of Cash Flows:
  Successor


PredecessorEight


FourYear


Year


Months


MonthsEnded


Ended


Ended


EndedJanuary 31,


January 31,


January 31,


May 31,2006


2005


2004


2003Supplemental cash flow disclosures:Cash paid for interest, excluding
    adequate protection payments in the four months ended
    May 31, 2003

$
58.0


$
51.2


$
37.7


$
5.8Cash paid for income taxes on
    continuing operations, net of refunds received


28.0



27.5



24.4



2.9Cash paid for income taxes on
    discontinued operations, net of refunds received


0.8



0.4



0.2



Non-cash investing and financing
    activity:Notes issued to purchase businesses










11.6



   Stock-Based Compensation: fair-value-based
    SuccessorYear


Year


Eight MonthsEnded


Ended


EndedJanuary 31,


January 31,


January 31,2006


2005


2004Net loss:As reported

$
(457.5
)

$
(62.3
)

$
(46.5
)Pro forma


(461.5
)


(67.4
)


(50.3
)Basic and diluted loss per share:As reported

$
(12.07
)

$
(1.66
)

$
(1.55
)Pro forma


(12.16
)


(1.79
)


(1.68
)     Note 3.
    Fresh
    Start Accounting  SOP 90-7,
 55




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  SOP 90-7
  SOP 90-7,
    Note 4.
    Acquisitions
    and Divestitures of Businesses         56




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Note 5.
    Inventories    SuccessorJanuary 31,


January 31,2006


2005Raw materials

$
41.5


$
53.4Work-in-process


38.8



47.0Finished goods


61.5



68.5Spare parts and supplies


38.1



36.1Total

$
179.9


$
205.0   Note 6.
    Property,
    Plant, and Equipment    SuccessorJanuary 31,


January 31,2006


2005Land

$
39.8


$
45.4Buildings


192.7



225.4Machinery and equipment


764.2



923.0Capital lease assets


19.6



8.41,016.3



1,202.2Accumulated depreciation


(258.2
)


(231.1
)Property, plant, and equipment, net

$
758.1


$
971.1     Successor


PredecessorYear


Year


Eight Months


Four MonthsEnded


Ended


Ended


EndedJanuary 31,


January 31,


January 31,


May 31,2006


2005


2004


2003Depreciation expense

$
135.0


$
142.5


$
91.1


$
38.7Tooling amortization


12.8



15.9



7.4



5.0Total

$
147.8


$
158.4


$
98.5


$
43.7   Note 7.
    Assets
    Held for Sale   57




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Note 8.
    Discontinued
    Operations        Successor


PredecessorYear


Year


Eight Months


Four MonthsEnded


Ended


Ended


EndedJanuary 31,


January 31,


January 31,


May 31,2006


2005


2004


2003Net sales

$
88.8


$
107.5


$
60.0


$
28.7Income (loss) before income tax
    expense

$
15.9


$
1.6


$
(1.2
)

$
(0.4
)Income tax expense


5.3



2.4







Net income (loss)

$
10.6


$
(0.8
)

$
(1.2
)

$
(0.4
)   Note 9.
    Goodwill
    and Other Intangible Assets    SuccessorJanuary 31, 2006


January 31, 2005Weighted


Gross





Net


Gross





NetAverage


Carrying


Accumulated


Carrying


Carrying


Accumulated


CarryingUseful Life


Amount


Amortization


Amount


Amount


Amortization


AmountAmortized intangible assets:Customer relationships


30 years


$
120.7


$
(10.2
)

$
110.5


$
142.6


$
(6.7
)

$
135.9Customer contracts


6 years



24.5



(10.9
)


13.6



30.2



(8.4
)


21.8Unpatented technology


8 years



36.3



(12.7
)


23.6



41.1



(8.6
)


32.5$
181.5


$
(33.8
)

$
147.7


$
213.9


$
(23.7
)

$
190.2Non amortized intangible assets:Tradenames





$
40.0










$
43.1Goodwill





$
197.8










$
417.9    58




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     SuccessorAutomotiveWheels


Components


Other


TotalBalance as of January 31, 2005

$
417.9


$



$



$
417.9Effects of currency translation


(35.2
)










(35.2
)Impairment of goodwill


(185.5
)










(185.5
)Income tax adjustments


(1.4
)










(1.4
)Acquisitions and purchase
    accounting adjustments


2.0











2.0Balance as of January 31, 2006

$
197.8


$



$



$
197.8            59




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 10.
    Other
    Assets    SuccessorJanuary 31,


January 31,2006


2005Production tooling

$
22.4


$
25.8Unamortized debt issuance costs


15.5



16.2Investments in joint ventures


0.1



1.8Other


1.1



1.3Total

$
39.1


$
45.1   Note 11.
    Accounts
    Payable and Accrued Liabilities    SuccessorJanuary 31,


January 31,2006


2005Accounts payable

$
237.4


$
251.1Employee costs


84.0



84.3Other accrued liabilities


46.4



59.3Total

$
367.8


$
394.7   Note 12.
    Bank
    Borrowings, Other Notes and Long-Term Debt      SuccessorJanuary 31,


January 31,2006


2005Various foreign bank and
    government loans maturing through 2006, weighted average
    interest rates of 5.6% and 6.4% at January 31, 2006 and
    2005, respectively

$
18.4


$
18.6Term Loan B maturing 2009,
    weighted average interest rate of 7.7% and 6.2% at
    January 31, 2006 and 2005, respectively


332.4



427.3Term Loan C maturing 2010,
    weighted average interest rate of 9.9% at January 31, 2006


150.0



101/2% Senior
    Notes due 2010, net of discount of $0.8 million at
    January 31, 2006 and 2005, respectively


161.7



161.7Mortgage note payable maturing
    June 3, 2008


22.0



22.2Capital lease obligations


19.0



11.8703.5



641.6Less current portion of long-term
    debt


19.2



10.5Long-term debt

$
684.3


$
631.1  60




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Credit
    Facility
          Senior
    Notes
  1 2 1 2 1 2
     61




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Early
    Repayment of Long-Term Debt
        Note 13.
    Pension
    Plans and Postretirement Benefits Other Than Pensions   62




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     SuccessorUnited States Plans


International PlansPension Benefits


Other Benefits


Pension Benefits2006


2005


2006


2005


2006


2005Change in Benefit
    Obligation:Benefit obligation at beginning of
    year

$
193.8


$
186.8


$
191.8


$
190.9


$
142.5


$
134.6Service cost


1.0







0.1



0.1



0.7



0.8Interest cost


10.7



11.2



10.6



10.7



6.7



7.1Employee contributions


















0.2



Plan curtailments


















0.2



Actuarial loss


13.5



13.0



5.8



7.8



13.7



4.3Benefits and expense paid


(18.4
)


(17.2
)


(16.5
)


(17.7
)


(18.9
)


(8.6
)Benefit obligation at end of year

$
200.6


$
193.8


$
191.8


$
191.8


$
145.1


$
138.2Change in Plan
    Assets:Fair value of plan assets at
    beginning of year

$
123.3


$
127.0


$



$



$
10.5


$
8.4Actual return on plan assets


20.8



9.6











1.2



(2.0
)Company contributions


11.0



5.0











8.6



0.4Employee contributions


















0.2



Benefits paid and plan expenses


(18.4
)


(18.3
)










(9.1
)


(0.1
)Fair value of plan assets at end
    of year

$
136.7


$
123.3


$



$



$
11.4


$
6.7Funded Status:Funded status of plan

$
(63.9
)

$
(70.5
)

$
(191.8
)

$
(191.8
)

$
(133.7
)

$
(131.5
)Unrecognized net actuarial (gain)
    loss


(1.9
)


(3.9
)


(6.7
)


(12.4
)


15.0



2.8Adjustment to recognize additional
    minimum liability






















(3.6
)Company contributions


3.4



1.3



3.2



4.3







Accrued benefit cost

$
(62.4
)

$
(73.1
)

$
(195.3
)

$
(199.9
)

$
(118.7
)

$
(132.3
)Amount recognized in
    Consolidated Balance Sheet:Prepaid benefit cost

$



$



$



$



$
0.1


$
1.5Accrued benefit cost


(62.4
)


(73.1
)


(195.3
)


(199.9
)


(134.4
)


(130.8
)Accumulated other comprehensive
    loss


















15.6



3.6Net amount recognized

$
(62.4
)

$
(73.1
)

$
(195.3
)

$
(199.9
)

$
(118.7
)

$
(125.7
)  63




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     United States PlansPension Benefits


Other BenefitsSuccessor


Predecessor


Successor


PredecessorEight


Four








Eight


FourYear


Year


Months


Months


Year


Year


Months


MonthsEnded


Ended


Ended


Ended


Ended


Ended


Ended


EndedJanuary 31,


January 31,


January 31,


May 31,


January 31,


January 31,


January 31,


May 31,2006


2005


2004


2003


2006


2005


2004


2003Components of net periodic
    benefit cost (income):Service cost

$
1.0


$
0.2


$
0.3


$
0.1


$
0.1


$
0.1


$
0.1


$
Interest cost


10.7



11.2



7.4



3.8



10.6



10.7



7.8



4.0Expected return on plan assets


(9.4
)


(9.6
)


(6.0
)


(3.0
)














Net amortization and deferral














1.0







(1.2
)






2.1Net benefit cost

$
2.3


$
1.8


$
1.7


$
1.9


$
10.7


$
9.6


$
7.9


$
6.1   International
    Plans Pension BenefitsSuccessor


PredecessorEight


FourYear


Year


Months


MonthsEnded


Ended


Ended


EndedJanuary 31,


January 31,


January 31,


May 31,2006


2005


2004


2003Components of net periodic
    benefit cost (income):Service cost

$
0.7


$
0.7


$
0.2


$
0.1Interest cost


6.7



6.8



4.5



2.2Expected return on plan assets


(0.5
)


(2.1
)


(0.1
)


(0.1
)Net amortization and deferral


0.1











0.2Curtailment/Settlement loss
    recognized


0.3











Net benefit cost

$
7.3


$
5.4


$
4.6


$
2.4     SuccessorUnited States Plans


International PlansPension Benefits


Other Benefits


Pension Benefits2006


2005


2006


2005


2006


2005Weighted average
    assumptions:Discount rate


5.75
%


5.75
%


5.75
%


5.75
%


5.00
%


5.00
%Expected return on plan assets


8.00
%


8.00
%


N/A



N/A







5.00
%Rate of compensation increase


N/A



N/A



N/A



N/A



2.50
%


2.10
%  64




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Expected
    Return on Assets
    Pension
    Plan Contributions
    Projected
    United States Benefit Payments
    Successor2006


2007


2008


2009


2010


TotalPension plans

$
14.9


$
14.5


$
14.1


$
13.8


$
13.6


$
70.9Health care and life insurance
    benefit plans


14.9



15.4



15.8



15.9



15.9



77.9   Pension
    Benefit Asset Information
    Successor2005


2004Asset Category:Domestic equity


54.4
%


55.0
%International equity


15.9
%


15.4
%Fixed income


26.8
%


22.9
%Guaranteed investment contract


0.9
%


1.7
%Cash


2.0
%


5.0
%Total


100.0
%


100.0
%     
    Fixed income investments are oriented toward risk averse,
    investment grade securities. With the exception of
    U.S. Government securities, in which the plan may invest
    the entire fixed income allocation, fixed income investments are
    required to be diversified among individual securities and
    sectors. There is no limit on the maximum maturity of securities
    held. Short sales, margin purchases and similar speculative
    transactions are prohibited. 65




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   
    Equity investments are diversified among capitalization and
    style and are required to be diversified among industries and
    economic sectors. Limitations are placed on the overall
    allocation to any individual security. Short sales, margin
    purchases, and similar speculative transactions are prohibited.    SuccessorPolicy Target


Policy RangeAsset Class:Domestic equity


55.0
%


35-75
%International equity


15.0
%


10-20
%Fixed income


30.0
%


25-35
%     Medicare
    Prescription Drug, Improvement, and Modernization
    Act
    Other
    Benefits
   66




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 14.
    Asset
    Impairments and Other Restructuring Charges    SuccessorYear Ended January 31,
    2006AutomotiveWheels


Components


Other


TotalFacility closure costs

$
3.3


$



$



$
3.3Impairment of land, building,
    machinery, equipment, tooling and definite lived intangible
    assets


9.3



185.7







195.0Severance and other restructuring
    costs


5.0











5.0Total

$
17.6


$
185.7


$



$
203.3   Year Ended January 31,
    2005AutomotiveWheels


Components


Other


TotalFacility closure costs

$
4.8


$
(0.2
)

$



$
4.6Impairment of machinery,
    equipment, and tooling


2.2











2.2Severance and other restructuring
    costs


1.4



0.6



0.4



2.4Total

$
8.4


$
0.4


$
0.4


$
9.2   Eight Months Ended
    January 31, 2004AutomotiveWheels


Components


Other


TotalImpairment of manufacturing
    facilities

$
1.0


$
0.8


$



$
1.8Impairment of machinery,
    equipment, and tooling


19.9



6.7







26.6Severance and other restructuring
    costs


0.5











0.5Total

$
21.4


$
7.5


$



$
28.9   PredecessorFour Months Ended May 31,
    2003AutomotiveWheels


Components


Other


TotalFacility closure costs

$
0.9


$



$



$
0.9Impairment of manufacturing
    facilities


0.5



0.1







0.6Impairment of machinery,
    equipment, and tooling


1.5



3.3







4.8Severance and other restructuring
    costs


0.1











0.1Total

$
3.0


$
3.4


$



$
6.4   Asset
    Impairment Losses and Other Restructuring Charges for the Year
    Ended January 31, 2006
     67




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Asset
    Impairment Losses and Other Restructuring Charges for the Year
    Ended January 31, 2005
    Asset
    Impairment Losses and Other Restructuring Charges for the Eight
    Months Ended January 31, 2004
    Asset
    Impairment Losses and Other Restructuring Charges for the Four
    Months Ended May 31, 2003
    Facility
    Exit Cost and Severance Accruals
    SuccessorAccrual ofSeverance


Cash PaymentsJanuary 31,


and Other


and Effects


January 31,2005


Restructuring


of Foreign


2006Accrual


Charges


Currency


AccrualFacility exit costs

$
0.2


$
3.3


$
(3.5
)

$
Severance


0.7



5.0



(4.9
)


0.8Total

$
0.9


$
8.3


$
(8.4
)

$
0.8  68




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 15.
    Commitments
    and Contingencies  Matters
    Related to Restatement of Financial Statements
    Rule 10b-5 Rules 12b-20
    Legal
    Proceedings
     69




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
           70




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
                71




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Leases
    SuccessorCapital


Operating2007

$
5.7


$
14.82008


4.1



9.52009


4.0



7.12010


4.0



5.12011 and later years


5.7



3.1Total minimum payments required

$
23.5


$
39.6Less amount representing interest


(4.5
)Present value of net minimum
    capital lease payments


19.0Less current installments of
    obligations under capital leases


(3.4
)Obligations under capital leases,
    excluding current installments

$
15.6     Note 16.
    Taxes on
    Income    Successor


PredecessorEight


FourYear


Year


Months


MonthsEnded


Ended


Ended


EndedJanuary 31,


January 31,


January 31,


May 31,2006


2005


2004


2003U.S.

$
(290.0
)

$
(106.9
)

$
(67.5
)

$
(310.1
)Foreign


(172.1
)


69.2



37.0



338.3Total

$
(462.1
)

$
(37.7
)

$
(30.5
)

$
28.2  72




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Successor


PredecessorEight


FourYear


Year


Months


MonthsEnded


Ended


Ended


EndedJanuary 31,


January 31,


January 31,


May 31,2006


2005


2004


2003Current:Federal

$
0.2


$



$



$
State and local


1.2



1.9



1.0



7.1Foreign


22.8



24.8



11.6



1.924.2



26.7



12.6



9.0Deferred:Federal


(6.5
)


(1.4
)






State and local


(0.7
)










Foreign


(18.2
)


(8.0
)


(1.7
)


51.3(25.4
)


(9.4
)


(1.7
)


51.3Income tax (benefit) expense

$
(1.2
)

$
17.3


$
10.9


$
60.3       Successor


PredecessorEight


FourYear


Year


Months


MonthsEnded


Ended


Ended


EndedJanuary 31,


January 31,


January 31,


May 31,2006


2005


2004


2003Federal tax expense (benefit)
    computed at statutory rate

$
(161.7
)

$
(13.3
)

$
(10.7
)

$
9.9Increase (decrease) resulting from:State taxes


0.6



1.1



1.0



7.1Goodwill impairment


68.4











Non-deductible expenses


2.4



2.6



1.2



Foreign statutory tax rate
    differential


(11.6
)


(7.0
)


(1.9
)


2.5Change in foreign tax rates


0.4



(0.6
)


(2.6
)


Tax holidays


(4.3
)


(5.1
)


(2.2
)


(0.8
)Deductible reorganization expenses














(21.6
)Loss on sale of subsidiary stock


(14.7
)










Intercompany financing


(4.8
)


(4.3
)


(1.4
)


Recognition of goodwill in fresh
    start accounting














(67.4
)Tax exempt income


(0.3
)


(2.8
)






Parent taxation of subsidiary
    earnings


0.8



2.3







87.5Change in valuation allowance


128.4



45.4



26.7



43.3All other items


(4.8
)


(1.0
)


0.8



(0.2
)Income tax (benefit) expense

$
(1.2
)

$
17.3


$
10.9


$
60.3  73




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          SuccessorJanuary 31,


January 31,2006


2005Deferred tax assets attributable
    to:Accrued liabilities

$
22.7


$
32.9Operating loss carryforwards


173.8



90.1Property, plant, and equipment


40.1



10.7Pension


59.0



43.9Inventories


6.1



5.1Other


8.3



6.9Total gross deferred tax assets


310.0



189.6Less valuation allowance


(236.3
)


(107.9
)Net deferred tax assets


73.7



81.7Deferred tax liabilities
    attributable to:Property, plant, and equipment


(48.9
)


(53.2
)Intangible assets


(60.5
)


(76.9
)Intercompany notes


(2.9
)


(16.3
)Other


(7.4
)


(4.4
)Total gross deferred tax
    liabilities


(119.7
)


(150.8
)Net deferred tax liabilities

$
(46.0
)

$
(69.1
)     SuccessorJanuary 31,


January 31,2006


2005Current assets

$
3.5


$
2.2Current liabilities


(0.8
)


Non current assets


14.0



9.8Non current liabilities


(62.7
)


(81.1
)Net deferred tax liabilities

$
(46.0
)

$
(69.1
)  74




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
               Note 17.
    Investments
    in Joint Ventures     75




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Note 18.
    Stock
    Based Benefit Plans               76




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       SuccessorWeightedNumber of


AverageShares


Exercise PriceOutstanding at January 31,
    2003






Granted


1,982,906


$
13.97Exercised






Forfeited


(114,141
)


13.93Outstanding at January 31,
    2004


1,868,765


$
13.98Granted


146,411



13.06Exercised






Forfeited


(154,995
)


13.91Outstanding at January 31,
    2005


1,860,181


$
13.91Granted


82,827



6.33Exercised






Forfeited


(217,147
)


13.87Outstanding at January 31,
    2006


1,725,861


$
13.55Balance exercisable at:January 31, 2004


619,936


$
13.98January 31, 2005


468,061


$
13.98January 31, 2006


1,725,861


$
13.55     SuccessorOutstanding


ExercisableWeighted


Weighted





WeightedAverage


Average





AverageNumber of


Remaining


Exercise


Number of


ExerciseRange of Exercisable
    Prices:

Shares


Life


Price


Shares


Price$ 1.89 - $ 3.79


7,945



9.9


$
3.53



7,945


$
3.53$ 3.79 - $ 5.68


35,416



9.3



5.14



35,416



5.14$ 5.68 - $ 7.57


35,220



9.4



7.15



35,220



7.15$ 7.57 - $ 9.47


17,798



8.7



8.51



17,798



8.51$ 9.47 - $11.36


9,350



7.2



10.45



9,350



10.45$11.36 - $13.25


21,895



8.5



12.62



21,895



12.62$13.25 - $15.14


1,557,724



7.2



13.93



1,557,724



13.93$15.14 - $17.04


17,135



8.0



16.07



17,135



16.07$17.04 - $18.93


23,378



6.1



17.81



23,378



17.811,725,861



7.32


$
13.55



1,725,861


$
13.55  77




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     SuccessorJanuary 31, 2006


January 31, 2005Risk free interest rate


4.06-4.46
%


3.33-4.78
%Expected life


6.0



6.0Expected volatility


49.0
%


49.0
%Expected dividends


0
%


0
%       Note 19.
    Common
    Stock Offering    Note 20.
    Prior
    Period Accounting Errors   78




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Impact on BasicImpact on


and Diluted NetInterim Period

Net Loss


Loss per SharePredecessorThree Months Ended April 30,
    2003

$
(0.3
)One Month Ended May 31, 2003


Four Months Ended May 31, 2003

$
(0.3
)SuccessorTwo Months Ended July 31, 2003

$
(0.2
)

$
(0.01
)Three Months Ended
    October 31, 2003


(0.3
)


(0.01
)Three Months Ended
    January 31, 2004


(0.3
)


(0.01
)Eight Months Ended
    January 31, 2004

$
(0.8
)

$
(0.03
)Three Months Ended April 30,
    2004

$
(0.3
)

$
(0.01
)Three Months Ended July 31,
    2004


(0.3
)


(0.01
)Three Months Ended
    October 31, 2004


(0.3
)


(0.01
)Three Months Ended
    January 31, 2005


(0.4
)


(0.01
)Year Ended January 31, 2005

$
(1.3
)

$
(0.04
)Three Months Ended April 30,
    2005

$
(0.7
)

$
(0.02
)Three Months Ended July 31,
    2005


3.1



0.08Six Months Ended July 31, 2005

$
2.4


$
0.06      79




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Impact on BasicImpact on


and Diluted NetInterim Period

Net Loss


Loss Per SharePredecessorThree Months Ended April 30,
    2003

$
One Month Ended May 31, 2003


(0.1
)Four Months Ended May 31, 2003

$
(0.1
)SuccessorTwo Months Ended July 31, 2003

$
(0.4
)

$
(0.01
)Three Months Ended
    October 31, 2003


(0.1
)


Three Months Ended
    January 31, 2004


(0.3
)


(0.01
)Eight Months Ended
    January 31, 2004

$
(0.8
)

$
(0.02
)   Note 21.
    Off
    Balance Sheet Arrangements          Note 22.
    Segment
    Information   80




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            Successor


PredecessorEight


FourYear


Year


Months


MonthsEnded


Ended


Ended


EndedJanuary 31,


January 31,


January 31,


May 31,2006


2005


2004


2003Revenues:Automotive Wheels

$
1,594.4


$
1,440.6


$
846.4


$
413.0Components


682.8



696.4



460.2



248.1Total

$
2,277.2


$
2,137.0


$
1,306.6


$
661.1Earnings (loss) from operations:Automotive Wheels

$
(150.4
)

$
63.4


$
30.7


$
27.0Components


(215.2
)


(25.6
)


(0.1
)


9.5Other


(29.8
)


(18.0
)


(19.3
)


13.3Total

$
(395.4
)

$
19.8


$
11.3


$
49.8Depreciation and amortization:Automotive Wheels

$
105.9


$
110.3


$
65.7


$
26.2Components


54.5



59.0



40.0



18.2Other


4.7



2.9



1.3



0.8Total

$
165.1


$
172.2


$
107.0


$
45.2Capital expenditures:Automotive Wheels

$
78.6


$
94.1


$
53.2


$
13.7Components


44.3



55.6



44.0



11.2Other


0.6



6.5



7.1



0.4Total

$
123.5


$
156.2


$
104.3


$
25.3 81




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Successor


PredecessorEight


FourYear


Year


Months


MonthsEnded


Ended


Ended


EndedJanuary 31,


January 31,


January 31,


May 31,2006


2005


2004


2003Extraordinary gain on debt
    discharge:Automotive Wheels

$



$



$



$
81.1Components














58.3Other














937.3Total

$



$



$



$
1,076.7     SuccessorJanuary 31,


January 31,2006


2005Total assets:Automotive Wheels

$
1,247.7


$
1,378.8Components


321.5



541.4Other


230.0



370.0Total

$
1,799.2


$
2,290.2Goodwill:Automotive Wheels

$
197.8


$
417.9Components






Other






Total

$
197.8


$
417.9     Successor


PredecessorEight


FourYear


Year


Months


MonthsEnded


Ended


Ended


EndedJanuary 31,


January 31,


January 31,


May 31,2006


2005


2004


2003Net revenues:United States

$
985.7


$
992.4


$
664.7


$
375.6All foreign countries


1,291.5



1,144.6



641.9



285.5Total

$
2,277.2


$
2,137.0


$
1,306.6


$
661.1  82




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     SuccessorJanuary 31,


January 31,2006


2005Total long lived assets:United States

$
298.9


$
460.1All foreign countries


883.8



1,207.3Total

$
1,182.7


$
1,667.4   Customer
    Concentration
    Successor


PredecessorEight


FourYear


Year


Months


MonthsEnded


Ended


Ended


EndedJanuary 31,


January 31,


January 31,


May 31,2006


2005


2004


2003Ford Motor Company


21.0
%


19.7
%


26.3
%


15.8
%DaimlerChrysler


14.0
%


13.6
%


19.5
%


8.2
%General Motors Corporation


15.0
%


13.0
%


15.1
%


3.6
%   Note 23.
    Selected
    Quarterly Financial Data (Unaudited)    SuccessorQuarter


Quarter


Quarter


QuarterEnded


Ended


Ended


EndedJanuary 31,


October 31,


July 31,


April 30,2006(1)


2005


2005


2005Net sales

$
528.0


$
604.0


$
556.0


$
589.2Gross profit


25.5



55.3



35.5



57.9Loss from continuing operations
    before cumulative effect of change in accounting principle


(373.3
)


(14.3
)


(71.4
)


(9.1
)Net loss


(366.2
)


(13.3
)


(70.3
)


(7.7
)Basic and diluted net loss per
    share from continuing operations before cumulative effect of
    change in accounting principle

$
(9.85
)

$
(0.38
)

$
(1.88
)

$
(0.24
)Basic and diluted net loss per
    share

$
(9.67
)

$
(0.35
)

$
(1.85
)

$
(0.20
)     (1)
    
    Fourth quarter of fiscal 2005 results include the following
    significant items:  (a)
    
    Goodwill impairment charge of $185.5 million as described
    in Note 9, Goodwill and Other Intangible Assets.(b)
    
    Asset impairment losses and other restructuring charges of
    $203.3 million as described in Note 14, Asset
    Impairments and Other Restructuring Charges.  83




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  SuccessorQuarter


Quarter


Quarter


QuarterEnded


Ended


Ended


EndedJanuary 31,


October 31,


July 31,


April 30,2005


2004


2004


2004Net sales

$
524.4


$
546.0


$
501.4


$
565.2Gross profit


20.5



54.3



45.7



70.0Loss from continuing operations
    before cumulative effect of change in accounting principle


(45.1
)


(5.1
)


(11.1
)


(2.8
)Net income (loss)


(48.3
)


(5.3
)


(9.8
)


1.1Basic and diluted net loss per
    share from continuing operations before cumulative effect of
    change in accounting principle

$
(1.21
)

$
(0.13
)

$
(0.29
)

$
(0.08
)Basic and diluted net (loss)
    income per share

$
(1.28
)

$
(0.14
)

$
(0.26
)

$
0.02   Note 24.
    Condensed
    Consolidating Financial Statements      Guarantor
    and Nonguarantor Financial Statements
   84




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   CONDENSED
    CONSOLIDATING STATEMENTS OF OPERATIONS
    SUCCESSOR COMPANY
    For the Year Ended January 31, 2006
  Guarantor


NonguarantorParent


Issuer


Subsidiaries


Subsidiaries


Eliminations


Total(Dollars in millions)Net sales

$



$
3.4


$
931.6


$
1,378.5


$
(36.3
)

$
2,277.2Cost of goods sold


0.2



23.5



903.5



1,212.1



(36.3
)


2,103.0Gross profit (loss)


(0.2
)


(20.1
)


28.1



166.4







174.2Marketing, general, and
    administrative






3.7



81.9



78.6







164.2Equity in (earnings) losses of
    subsidiaries and joint ventures


457.8



400.6



(2.2
)






(856.2
)


Asset impairments and other
    restructuring charges






1.5



163.0



224.3







388.8Other (income) expense, net






3.7



4.0



8.9







16.6Earnings (loss) from operations


(458.0
)


(429.6
)


(218.6
)


(145.4
)


856.2



(395.4
)Interest (income) expense, net


(0.5
)


38.5



1.1



26.8







65.9Other non-operating expense






(0.7
)






1.5







0.8Earnings (loss) from continuing
    operations before taxes on income and minority interest


(457.5
)


(467.4
)


(219.7
)


(173.7
)


856.2



(462.1
)Income tax (benefit) expense






(5.8
)


0.1



4.5







(1.2
)Earnings (loss) from continuing
    operations before minority interest


(457.5
)


(461.6
)


(219.8
)


(178.2
)


856.2



(460.9
)Minority interest














7.2







7.2Earnings (loss) from continuing
    operations


(457.5
)


(461.6
)


(219.8
)


(185.4
)


856.2



(468.1
)Income from discontinued
    operations, net of tax










9.5



1.1







10.6Net income (loss)

$
(457.5
)

$
(461.6
)

$
(210.3
)

$
(184.3
)

$
856.2


$
(457.5
)  85




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   CONDENSED
    CONSOLIDATING STATEMENTS OF OPERATIONS
    SUCCESSOR COMPANY
    For the Year Ended January 31, 2005
  Guarantor


NonguarantorParent


Issuer


Subsidiaries


Subsidiaries


Eliminations


Total(Dollars in millions)Net sales

$



$
3.1


$
944.0


$
1,217.5


$
(27.6
)

$
2,137.0Cost of goods sold






25.3



902.4



1,046.0



(27.2
)


1,946.5Gross profit (loss)






(22.2
)


41.6



171.5



(0.4
)


190.5Marketing, general, and
    administrative






3.6



83.2



69.6







156.4Equity in (earnings) losses of
    subsidiaries and joint ventures


70.0



7.9



(4.0
)






(73.9
)


Asset impairments and other
    restructuring charges






1.0



5.7



2.5







9.2Other (income) expense, net






(1.3
)


0.2



4.7



1.5



5.1Earnings (loss) from operations


(70.0
)


(33.4
)


(43.5
)


94.7



72.0



19.8Interest (income) expense, net


(7.7
)


23.8



0.4



27.1







43.6Other non-operating expense






0.8







0.9







1.7Loss on early extinguishment of
    debt






12.2















12.2Earnings (loss) from continuing
    operations before taxes on income and minority interest


(62.3
)


(70.2
)


(43.9
)


66.7



72.0



(37.7
)Income tax expense






0.7



(0.2
)


16.8







17.3Earnings (loss) from continuing
    operations before minority interest


(62.3
)


(70.9
)


(43.7
)


49.9



72.0



(55.0
)Minority interest














9.1







9.1Loss from continuing operations
    before cumulative effect of change in accounting principle


(62.3
)


(70.9
)


(43.7
)


40.8



72.0



(64.1
)Income (loss) from discontinued
    operations, net of tax










2.0



(2.8
)






(0.8
)Cumulative effect of change in
    accounting principle














2.6







2.6Net income (loss)

$
(62.3
)

$
(70.9
)

$
(41.7
)

$
40.6


$
72.0


$
(62.3
)  86




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   CONDENSED
    CONSOLIDATING STATEMENTS OF OPERATIONS
    PREDECESSOR COMPANY
    For the Eight Months Ended January 31, 2004
  Guarantor


NonguarantorParent


Issuer


Subsidiaries


Subsidiaries


Eliminations


Total(Dollars in millions)Net sales

$



$
2.6


$
662.8


$
670.4


$
(29.2
)

$
1,306.6Cost of goods sold






20.8



611.4



568.5



(29.2
)


1,171.5Gross profit (loss)






(18.2
)


51.4



101.9







135.1Marketing, general, and
    administrative






1.5



51.9



37.3







90.7Equity in (earnings) losses of
    subsidiaries and joint ventures


47.6







1.1







(48.7
)


Asset impairments and other
    restructuring charges










28.4



0.5







28.9Other (income) expense, net






(2.1
)


(1.2
)


7.5







4.2Earnings (loss) from operations


(47.6
)


(17.6
)


(28.8
)


56.6



48.7



11.3Interest (income) expense, net


(1.1
)


(0.6
)


23.5



18.9







40.7Other non-operating expense






0.5







0.6







1.1Earnings (loss) from continuing
    operations before taxes on income and minority interest


(46.5
)


(17.5
)


(52.3
)


37.1



48.7



(30.5
)Income tax expense










1.0



9.9







10.9Earnings (loss) from continuing
    operations before minority interest


(46.5
)


(17.5
)


(53.3
)


27.2



48.7



(41.4
)Minority interest














3.9







3.9Income (loss) from continuing
    operations


(46.5
)


(17.5
)


(53.3
)


23.3



48.7



(45.3
)Income (loss) from discontinued
    operations, net of tax










0.5



(1.7
)






(1.2
)Net income (loss)

$
(46.5
)

$
(17.5
)

$
(52.8
)

$
21.6


$
48.7


$
(46.5
)  87




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   CONDENSED
    CONSOLIDATING STATEMENTS OF OPERATIONS
    PREDECESSOR COMPANY
    For the Four Months Ended May 31, 2003
  Guarantor


NonguarantorParent


Subsidiaries


Subsidiaries


Eliminations


Total(Dollars in millions)Net sales

$
61.0


$
307.7


$
300.9


$
(8.5
)

$
661.1Cost of goods sold


61.3



278.8



255.1



(8.5
)


586.7Gross profit (loss)


(0.3
)


28.9



45.8







74.4Marketing, general, and
    administrative


5.5



16.8



17.9



(1.5
)


38.7Equity in (earnings) losses of
    subsidiaries and joint ventures


(132.1
)


(7.9
)


(0.1
)


140.1



Asset impairments and other
    restructuring charges


0.3



4.9



1.2







6.4Fresh start accounting adjustments






253.4



(316.5
)






(63.1
)Reorganization items


13.3



31.7











45.0Other (income) expense, net


(0.3
)


(1.7
)


(1.2
)


0.8



(2.4
)Earnings (loss) from operations


113.0



(268.3
)


344.5



(139.4
)


49.8Interest (income) expense, net


2.8



15.4



3.4







21.6Earnings (loss) from continuing
    operations before taxes on income, minority interest, and
    extraordinary gain on debt discharge


110.2



(283.7
)


341.1



(139.4
)


28.2Income tax expense


(0.3
)


7.4



53.2







60.3Earnings (loss) from continuing
    operations before minority interest and extraordinary gain on
    debt discharge


110.5



(291.1
)


287.9



(139.4
)


(32.1
)Minority interest










1.2







1.2Earnings (loss) from continuing
    operations before extraordinary gain on debt discharge


110.5



(291.1
)


286.7



(139.4
)


(33.3
)Extraordinary gain on debt
    discharge


932.5



142.9



1.3







1,076.7Income (loss) from discontinued
    operations, net of tax






0.2



(0.6
)






(0.4
)Net income (loss)

$
1,043.0


$
(148.0
)


287.4


$
(139.4
)

$
1,043.0  88




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   CONDENSED
    CONSOLIDATING BALANCE SHEETS
    SUCCESSOR COMPANY
    As of January 31, 2006
  Guarantor


NonguarantorParent


Issuer


Subsidiaries


Subsidiaries


Eliminations


Total(Dollars in millions)Cash and cash equivalents

$



$
(4.1
)

$
0.6


$
46.0


$



$
42.5Receivables






(112.1
)


126.6



241.1







255.6Other receivables






101.0















101.0Inventories






1.3



66.0



112.6







179.9Prepaid expenses and other






4.7



9.3



9.5







23.5Total current assets






(9.2
)


202.5



409.2







602.5Property, plant, and equipment, net






34.1



173.1



550.9







758.1Goodwill and other assets


183.5



840.6



(102.4
)


384.5



(867.6
)


438.6Total assets

$
183.5


$
865.5


$
273.2


$
1,344.6


$
(867.6
)

$
1,799.2Bank borrowings and other notes

$



$



$
1.0


$
24.5


$



$
25.5Current portion of long-term debt






4.6



3.0



11.6







19.2Accounts payable and accrued
    liabilities






68.7



70.0



229.1







367.8Total current liabilities






73.3



74.0



265.2







412.5Long-term debt, net of current
    portion






661.7



15.5



7.1







684.3Pension and other long-term
    liabilities






236.6



0.6



234.7







471.9Redeemable preferred stock of
    subsidiary






12.1















12.1Minority interest














35.1







35.1Parent loans


0.2



(265.3
)


(30.4
)


292.3



3.2



Common stock


0.4



















0.4Additional paid-in capital


675.9



685.6



519.0



570.6



(1,775.2
)


675.9Retained earnings (accumulated
    deficit)


(566.3
)


(549.3
)


(305.5
)


(122.1
)


976.9



(566.3
)Accumulated other comprehensive
    income (loss)


73.3



10.8







61.7



(72.5
)


73.3Total stockholders equity


183.3



147.1



213.5



510.2



(870.8
)


183.3Total liabilities and
    stockholders equity

$
183.5


$
865.5


$
273.2


$
1,344.6


$
(867.6
)

$
1,799.2  89




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   CONDENSED
    CONSOLIDATING BALANCE SHEETS
    SUCCESSOR COMPANY
    As of January 31, 2005
  Guarantor


NonguarantorParent


Issuer


Subsidiaries


Subsidiaries


Eliminations


Total(Dollars in millions)(Unaudited)Cash and cash equivalents

$



$
(9.3
)

$
(0.2
)

$
44.4


$



$
34.9Receivables






(135.0
)


140.2



221.6







226.8Other receivables






77.0















77.0Inventories






4.6



82.5



117.9







205.0Prepaid expenses and other






8.2



7.6



5.6







21.4Assets held for sale






3.2



34.0



10.7







47.9Total current assets






(51.3
)


264.1



400.2







613.0Property, plant, and equipment, net






38.9



321.0



611.2







971.1Goodwill and other assets


702.0



1,214.9



52.4



640.2



(1,903.4
)


706.1Total assets

$
702.0


$
1,202.5


$
637.5


$
1,651.6


$
(1,903.4
)

$
2,290.2Bank borrowings and other notes

$



$



$



$
0.6


$



$
0.6Current portion of long-term debt






4.6



1.3



4.6







10.5Accounts payable and accrued
    liabilities






76.1



80.3



238.3







394.7Total current liabilities






80.7



81.6



243.5







405.8Long-term debt, net of current
    portion






606.6



7.1



17.4







631.1Pension and other long-term
    liabilities






251.9



(0.6
)


255.2







506.5Series A warrants and
    Series B warrants


0.5



















0.5Redeemable preferred stock of
    subsidiary






11.3















11.3Minority interest














33.7







33.7Parent loans


0.2



(373.0
)


27.0



345.5



0.3



Common stock


0.4



















0.4Additional paid-in capital


670.6



680.3



617.4



588.0



(1,885.7
)


670.6Retained earnings (accumulated
    deficit)


(108.8
)


(87.7
)


(95.2
)


62.2



120.7



(108.8
)Accumulated other comprehensive
    income (loss)


139.1



32.4



0.2



106.1



(138.7
)


139.1Total stockholders equity


701.3



625.0



522.4



756.3



(1,903.7
)


701.3Total liabilities and
    stockholders equity

$
702.0


$
1,202.5


$
637.5


$
1,651.6


$
(1,903.4
)

$
2,290.2  90




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   CONDENSED
    CONSOLIDATING STATEMENTS OF CASH FLOWS
    SUCCESSOR COMPANY
    For the Year Ended January 31, 2006
   Guarantor


NonguarantorParent


Issuer


Subsidiaries


Subsidiaries


Eliminations


Total(Dollars in millions)(Unaudited)Cash flows provided by (used for)
    operating activities

$



$
(113.4
)

$
(9.5
)

$
103.7


$



$
(19.2
)Cash flows from investing
    activities:Purchase of property, plant,
    equipment and tooling






(0.5
)


(56.9
)


(66.1
)






(123.5
)Purchase of businesses, net of
    cash acquired














(4.9
)






(4.9
)Proceeds from disposal of assets
    and businesses






68.1















68.1Cash provided by (used for)
    investing activities






67.6



(56.9
)


(71.0
)






(60.3
)Cash flows from financing
    activities:Changes in bank borrowings and
    credit facility










1.0



23.8







24.8Repayment of Term Loan B, net of
    related fees






(94.9
)














(94.9
)Borrowings from Term Loan C






150.0















150.0Borrowings (repayment) of long
    term debt










10.2



(1.9
)






8.3Dividends paid to minority
    shareholders














(3.6
)






(3.6
)Cash provided by financing
    activities






55.1



11.2



18.3







84.6Increase (decrease) in parent
    loans and advances






8.4



40.7



(49.1
)






Net cash provided by discontinued
    operations






(12.5
)


15.3



1.8







4.6Effect of exchange rates on cash
    and cash equivalents














(2.1
)






(2.1
)Increase in cash and cash
    equivalents






5.2



0.8



1.6







7.6Cash and cash equivalents at
    beginning of period






(9.3
)


(0.2
)


44.4







34.9Cash and cash equivalents at end
    of period

$



$
(4.1
)

$
0.6


$
46.0


$



$
42.5  91




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   CONDENSED
    CONSOLIDATING STATEMENTS OF CASH FLOWS
    SUCCESSOR COMPANY
    For the Year Ended January 31, 2005
  Guarantor


NonguarantorParent


Issuer


Subsidiaries


Subsidiaries


Eliminations


Total(Dollars in millions)(Unaudited)Cash flows provided by (used for)
    operating activities

$



$
(0.9
)

$
(4.4
)

$
162.4


$



$
157.1Cash flows from investing
    activities:Purchase of property, plant,
    equipment and tooling






(6.5
)


(58.1
)


(91.6
)






(156.2
)Proceeds from sale of assets






0.3



0.4











0.7Cash used for investing activities






(6.2
)


(57.7
)


(91.6
)






(155.5
)Cash flows from financing
    activities:Changes in bank borrowings and
    credit facility














(0.7
)






(0.7
)Net proceeds from issuance of
    common stock


117.0



















117.0Capital contribution


(117.0
)


117.0















Proceeds from (redemption of)
    Senior Notes, net of discount and related fees






(96.7
)














(96.7
)Proceeds from (redemption of) Term
    Loan, net of related fees






(16.0
)














(16.0
)Repayment of long-term debt






(4.2
)






(13.3
)






(17.5
)Repayment of notes payable issued
    in connection with purchases of businesses














(13.1
)






(13.1
)Cash provided by (used for)
    financing activities






0.1







(27.1
)






(27.0
)Increase (decrease) in parent
    loans and advances






0.9



57.7



(58.6
)






Net cash provided by discontinued
    operations










4.8



(0.1
)






4.7Effect of exchange rates on cash
    and cash equivalents














5.7







5.7Increase (decrease) in cash and
    cash equivalents






(6.1
)


0.4



(9.3
)






(15.0
)Adjustment for the elimination of
    the one month lag














1.4







1.4Cash and cash equivalents at
    beginning of period






(3.2
)


(0.6
)


52.3







48.5Cash and cash equivalents at end
    of period

$



$
(9.3
)

$
(0.2
)

$
44.4


$



$
34.9  92




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   CONDENSED
    CONSOLIDATING STATEMENTS OF CASH FLOWS
    PREDECESSOR COMPANY
    For the Eight Months Ended January 31, 2004
  Guarantor


NonguarantorParent


Issuer


Subsidiaries


Subsidiaries


Eliminations


Total(Dollars in millions)(Unaudited)Cash flows provided by (used for)
    operating activities

$
(47.6
)

$
(26.1
)

$
25.4


$
125.5


$



$
77.2Cash flows from investing
    activities:Purchase of property, plant,
    equipment and tooling






(7.7
)


(46.1
)


(50.5
)






(104.3
)Purchase of businesses














(19.8
)






(19.8
)Proceeds from sale of assets






1.1



0.5



3.1







4.7Cash used for investing activities






(6.6
)


(45.6
)


(67.2
)






(119.4
)Cash flows from financing
    activities:Changes in bank borrowings and
    credit facility














(16.0
)






(16.0
)Repayment of bank borrowings,
    revolving facility and long term debt






(2.2
)






(80.3
)






(82.5
)Cash used for financing activities






(2.2
)






(96.3
)






(98.5
)Increase (decrease) in parent
    loans and advances


47.6



(76.3
)


13.7



15.0







Net cash provided by discontinued
    operations










6.2



(3.3
)






2.9Effect of exchange rates on cash
    and cash equivalents














7.2







7.2Decrease in cash and cash
    equivalents






(111.2
)


(0.3
)


(19.1
)






(130.6
)Cash and cash equivalents at
    beginning of period






108.0



(0.3
)


71.4







179.1Cash and cash equivalents at end
    of period

$



$
(3.2
)

$
(0.6
)

$
52.3


$



$
48.5  93




---



##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   CONDENSED
    CONSOLIDATING STATEMENTS OF CASH FLOWS
    PREDECESSOR COMPANY
    For the Four Months Ended May 31, 2003
  Guarantor


NonguarantorParent


Subsidiaries


Subsidiaries


Eliminations


Total(Dollars in millions)(Unaudited)Cash flows provided by (used for)
    operating activities

$
(7.5
)

$
15.2


$
25.4


$



$
33.1Cash flows from investing
    activities:Purchase of property, plant,
    equipment and tooling


(24.9
)


(13.8
)


(10.2
)






(48.9
)Proceeds from sale of assets






0.5



0.3







0.8Cash used for investing activities


(24.9
)


(13.3
)


(9.9
)






(48.1
)Cash flows from financing
    activities:Changes in bank borrowings, credit
    facilities, DIP facility and other notes


(59.7
)


(2.0
)


(1.3
)






(63.0
)Net proceeds from debt issuance


678.9















678.9Prepetition lenders payment


(477.3
)














(477.3
)Payment to holders of Old Senior
    Notes


(13.0
)














(13.0
)Cash provided by (used for)
    financing activities


128.9



(2.0
)


(1.3
)






125.6Increase (decrease) in parent
    loans and advances


(1.9
)


2.2



(0.3
)






Net cash provided by discontinued
    operations






(2.1
)


0.4







(1.7
)Effect of exchange rates on cash
    and cash equivalents










4.1







4.1Increase in cash and cash
    equivalents


94.6







18.4







113.0Cash and cash equivalents at
    beginning of period


13.3







52.8







66.1Cash and cash equivalents at end
    of period

$
107.9


$



$
71.2


$



$
179.1   Note 25.
    Subsequent
    Events     94




---



##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  a.
    Evaluation
    of Disclosure Controls and Procedures    b.
    Managements
    Annual Report on Internal Control over Financial
    Reporting.  Rule 13a-15(f).
           95




---



##### Table of Contents



c.
    Changes
    in Internal Control Over Financial Reporting      d.
    Report of
    Independent Registered Public Accounting Firm     Managements Annual Report on Internal
    Control over Financial Reporting Internal
    Control  Integrated Framework
         96




---



##### Table of Contents



Internal Control-Integrated Framework Internal Control-Integrated Framework
    Detroit, Michigan  Item 9B.Other
    Information   PART III  Item 10.
    Directors
    and Executive Officers of the Registrant    Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters   97




---



##### Table of Contents



Item 13.
    Certain
    Relationships and Related Transactions    Item 14.
    Principal
    Accountant Fees and Services   PART IV  Item 15.
    Exhibits,
    Financial Statement Schedules  Financial Statement Schedule
      Exhibits
  2
.1

Modified First Amended Joint Plan
    of Reorganization of Hayes Lemmerz International, Inc. and Its
    Affiliated Debtors and Debtors in Possession, as Further
    Modified (incorporated by reference to Exhibit 2.1 to our
    Current Report on
    Form 8-K,
    filed May 21, 2003).2
.2

Agreement and Plan of Merger,
    dated as of June 3, 2003, by and between Hayes Lemmerz
    International, Inc. and HLI Operating Company, Inc.
    (incorporated by reference to Exhibit 2.3 to our Current
    Report on
    Form 8-K
    filed, June 3, 2003).3
.1

Certificate of Incorporation of
    HLI Holding Company, Inc., effective as of May 6, 2003
    (incorporated by reference to Exhibit 3.1 to our
    Form 8-A/A,
    filed June 4, 2003).3
.2

Amendment to the Certificate of
    Incorporation of HLI Holding Company, Inc., effective as of
    June 3, 2003 (incorporated by reference to Exhibit 3.2
    to our
    Form 8-A/A,
    filed June 4, 2003).3
.3

By-Laws of Hayes Lemmerz
    International, Inc. (formerly known as HLI Holding Company,
    Inc.), effective as of May 30, 2003 (incorporated by
    reference to Exhibit 3.3 to our
    Form 8-A/A,
    filed June 4, 2003).4
.1

Purchase Agreement, dated as of
    May 22, 2003, by and between Hayes Lemmerz International,
    Inc., its subsidiaries named therein, and the Initial Purchasers
    of the $250,000,000 of
    101/2% Senior
    Notes due 2010 to be issued by HLI Operating Company, Inc.
    (incorporated by reference to Exhibit 4.1 to our Quarterly
    Report on
    Form 10-Q
    for the quarterly period ended April 30, 2003, filed
    June 16, 2003).4
.2

Indenture, dated as of
    June 3, 2003, regarding $250,000,000 of
    101/2%
    Senior Notes due 2010, by and between HLI Operating Company,
    certain listed Guarantors, and U.S. Bank National
    Association, as Trustee (incorporated by reference to
    Exhibit 4.2 to our Quarterly Report on
    Form 10-Q
    for the quarterly period ended April 30, 2003, filed
    June 16, 2003).4
.3

Form of
    101/2% Senior
    Notes due 2010 (attached as Exhibit A to the Indenture
    filed as Exhibit 4.2 to our Quarterly Report on
    Form 10-Q
    for the quarterly period ended April 30, 2003, filed
    June 16, 2003).4
.4

First Supplemental Indenture,
    dated as of June 19, 2003, by and between HLI Operating
    Company, Inc. certain listed Guarantors, and U.S. Bank
    National Association, as Trustee (incorporated by reference to
    Exhibit 4.2 to our Registration statement No.
    333-107539
    on
    Form S-4,
    filed on July 31, 2003, as amended).4
.5

Registration Rights Agreement,
    dated as of June 3, 2003, by and between HLI Operating
    Company, Inc. and the Initial Purchasers of the
    101/2% Senior
    Notes due 2010 (incorporated by reference to Exhibit 4.3 to
    our Quarterly Report on
    Form 10-Q
    for the quarterly period ended April 30, 2003, filed
    June 16, 2003).4
.6

Series A Warrant Agreement,
    dated as of June 2, 2003, by and between Hayes Lemmerz
    International, Inc. and Mellon Investor Services LLC, as Warrant
    Agent (incorporated by reference to Exhibit 4.1 to our
    Form 8-A,
    filed June 4, 2003).4
.7

Series B Warrant Agreement,
    dated as of June 2, 2003, by and between Hayes Lemmerz
    International, Inc. and Mellon Investor Services LLC, as Warrant
    Agent (incorporated by reference to Exhibit 4.2 to our
    Form 8-A,
    filed June 4, 2003). 98




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##### Table of Contents



4
.8

Exchange Agreement, dated as of
    June 3, 2003, by and between Hayes Lemmerz International,
    Inc., HLI Parent Company, Inc. and HLI Operating Company,
    Inc. regarding the Series A Exchangeable Preferred Stock
    issued by HLI Operating Company, Inc. (incorporated by reference
    to Exhibit 4.3 to our Quarterly Report on
    Form 10-Q
    for the quarterly period ended April 30, 2003, filed
    June 16, 2003).4
.9

Registration Rights Agreement,
    dated as of July 1, 2004, by and between Hayes Lemmerz
    International, Inc., and AP Wheels, LLC (incorporated by
    reference to Exhibit 4.9 to our Quarterly Report on
    Form 10-Q
    for the quarterly period ended July 31, 2004, filed
    September 8, 2004).10
.1

Form of Severance Agreement, dated
    June 15, 2000, between Hayes and certain of its officers
    (incorporated by reference from our Quarterly Report on
    Form 10-Q
    for the quarter ended October 31, 2000, filed on
    December 15, 2000).10
.2

Amended and Restated Employment
    Agreement between Hayes and Curtis J. Clawson, dated
    September 26, 2001 (incorporated by reference from our
    Quarterly Report on
    Form 10-Q
    for the quarter ended October 31, 2001, filed on
    April 18, 2002).10
.3

Form of Employment Agreement
    between Hayes and certain of its officers (incorporated by
    reference from our Quarterly Report on
    Form 10-Q
    for the quarter ended October 31, 2001, filed on
    April  18, 2002).10
.4

Hayes Lemmerz International, Inc.
    Long Term Incentive Plan (incorporated by reference to
    Exhibit 10.1 to our Registration Statement
    No. 333-110684
    on
    Form S-8,
    filed on November 21, 2003).10
.5

Hayes Lemmerz International, Inc.
    Critical Employee Retention Plan (incorporated by reference to
    Exhibit 10.2 to our Registration Statement
    No. 333-110684
    on
    Form S-8,
    filed on November 21, 2003).10
.6

Form of Directors Indemnification
    Agreement (incorporated by reference to Exhibit 10.49 to
    our Quarterly Report on
    Form 10-Q
    for the quarterly period ended July 31, 2003, filed
    September 15, 2003, as amended).10
.7

Receivables Financing Agreement,
    dated as of December 9, 2004 among HL Funding II,
    Inc., a Delaware corporation, CAFCO, LLC, a Delaware limited
    liability company, as an investor, Citibank, N.A., as a bank,
    Citicorp North America, Inc., a Delaware corporation, as program
    agent for the investors and the banks and as an investor agent,
    the other investors, banks and investor agents (each as defined
    below) from time to time party hereto, HLI Operating Company,
    Inc., a Delaware corporation, as servicer, and the disbursement
    agent named therein (incorporated by reference to
    Exhibit 10.1 to our Current Report on
    Form 8-K
    filed December 15, 2004).10
.8

Originator Purchase Agreement ,
    dated as of December 9, 2004 among HL Funding I, LLC,
    a Delaware limited liability company, and the wholly-owned
    subsidiaries of Hayes named therein as Originators , dated as of
    December 9, 2004 between HL Funding I, LLC, a Delaware
    limited liability company, and HL Funding II, Inc., a
    Delaware corporation (incorporated by reference to
    Exhibit 10.2 to our Current Report on
    Form 8-K
    filed December 15, 2004).10
.9

Secondary Purchase Agreement,
    dated as of December 9, 2004 between HL Funding I,
    LLC, a Delaware limited liability company, and HL
    Funding II, Inc., a Delaware corporation(incorporated by
    reference to Exhibit 10.3 to our Current Report on
    Form 8-K
    filed December  15, 2004).10
.10

Amended and Restated Credit
    Agreement, dated as of April 11, 2005 by and among HLI
    Operating Company, Inc., as Borrower, Hayes Lemmerz
    International, Inc., the Lenders and Issuers listed therein,
    Citicorp North America, Inc., as First Lien Agent, Second Lien
    Agent and Collateral Agent, Lehman Commercial Paper, Inc.,
    as Syndication Agent, and General Electric Capital Corporation,
    as Documentation Agent (incorporated by reference to
    Exhibit 10.1 to our Current Report on
    Form 8-K
    filed April 14, 2005).10
.11

Amended and Restated Guaranty
    dated as of April 11, 2005, by and among Hayes Lemmerz
    International, Inc., HLI Parent Company, Inc., the other
    Guarantors party thereto, and Citicorp North America, Inc., as
    Collateral Agent (incorporated by reference to Exhibit 10.2
    to the our current Report on
    Form 8-K
    filed April 14, 2005).10
.12

Amended and Restated Pledge and
    Security Agreement dated as of April 11, 2005, among Hayes
    Lemmerz International, Inc., HLI Operating Company, Inc., each
    other grantor from time to time party thereto, and Citicorp
    North America, Inc., as Collateral Agent (incorporated by
    reference to Exhibit 10.3 to the our current Report on
    Form 8-K
    filed April 14, 2005)10
.13

Intercreditor and Collateral
    Agency Agreement dated as of April 11, 2005, among Citicorp
    North America, Inc., as Administrative Agent for the first lien
    lenders, as Administrative Agent for the Term C lenders and as
    Collateral Agent, HLI Operating Company, Inc., Hayes Lemmerz
    International, Inc., and each other grantor party thereto
    (incorporated by reference to Exhibit 10.4 to our current
    Report on
    Form 8-K
    filed April 14, 2005). 99




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##### Table of Contents



10
.14

First Amendment dated as of
    February 7, 2005 amending Receivables Financing Agreement,
    dated as of December 9, 2004 among HL Funding II, Inc.,
    CAFCO, LLC, Citibank, N.A., Citicorp North America, Inc., the
    other investors, banks and investor agents from time to time
    party thereto, and HLI Operating Company, Inc. (incorporated by
    reference to Exhibit 10.21 to our Quarterly Report on
    Form 10-Q
    filed on September 9, 2005).10
.15

Second Amendment dated as of
    May 27, 2005 amending each of (i) Receivables
    Financing Agreement, dated as of December 9, 2004 (as
    amended February 2, 2005) among HL Funding II,
    Inc., CAFCO, LLC, Citibank, N.A., Citicorp North America, Inc.,
    the other investors, banks and investor agents from time to time
    party thereto, and HLI Operating Company, Inc.;
    (ii) Originator Purchase Agreement, dated as of
    December 9, 2004 among HL Funding I, LLC, and the
    wholly-owned subsidiaries of the Company named therein as
    Originators; and (iii) Secondary Purchase Agreement, dated
    as of December 9, 2004 between HL Funding I, LLC,
    and HL Funding II, Inc. (incorporated by reference to
    Exhibit 10.22 to our Quarterly Report on
    Form 10-Q
    filed on September 9, 2005).10
.16

Hayes Lemmerz International, Inc.
    Officer Bonus Plan (incorporated by reference to Exhibit 10.1 to
    our Current Report on Form 8-K dated June 17, 2005).10
.17

Award Agreement under Hayes
    Lemmerz International, Inc. Officer Bonus Plan (incorporated by
    reference to Exhibit 10.2 to our Current Report on Form 8-K
    dated June 17, 2005).10
.18

Amendment No. 1, Waiver and
    Consent to Amended and Restated Credit Agreement dated as of
    October 10, 2005 among HLI Operating Company, Inc., Hayes
    Lemmerz International, Inc. and Citicorp North America,
    Inc. as Administrative Agent on behalf of each Lender executing
    a Lender Consent (incorporated by reference to
    Exhibit 10.23 to our Quarterly Report on
    Form 10-Q
    filed on December 9, 2005).10
.19

Framework Agreement on the Ongoing
    Purchase of Receivables dated as of October 10, 2005 by and
    between Hayes Lemmerz Werke GmbH and MHB Financial Services
    GmbH & Co. KG (incorporated by reference to
    Exhibit 10.24 to our Quarterly Report on
    Form 10-Q
    filed on December 9, 2005).10
.20

Stock Purchase Agreement dated as
    of October 14, 2005 by and among HLI Operating Company,
    Inc., HLI Commercial Highway Holding Company, Inc., and Hayes
    Lemmerz International  Commercial Highway, Inc.
    and Precision Partners Holding Company, as amended by an
    Amendment to Stock Purchase Agreement dated November 11,
    2005 (incorporated by reference to Exhibit 10.25 to our
    Quarterly Report on
    Form 10-Q
    filed on December 9, 2005).10
.21

Amendment No. 2 to Amended
    and Restated Credit Agreement dated as of March 31, 2006
    among HLI Operating Company, Inc., Hayes Lemmerz International,
    Inc., and Citicorp North America, Inc. as Administrative Agent
    on behalf of each lender executing a Lender Consent
    (incorporated by reference to Exhibit 10.1 to our Current
    Report on
    Form 8-K
    filed on April 3, 2006).12


Computation of Ratio of Earnings
    to Fixed Charges.*14


Code of Ethics (incorporated by
    reference to Exhibit 10.8 to our Annual Report on
    Form 10-K
    filed on April 12, 2004).21


Hayes Subsidiaries.*23


Consent of Independent Registered
    Public Accounting Firm.*24


Powers of Attorney.31
.1

Certification of Curtis J.
    Clawson, Chairman of the Board, President and Chief Executive
    Officer, pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.*31
.2

Certification of James A. Yost,
    Vice President, Finance, and Chief Financial Officer, pursuant
    to Section 302 of the Sarbanes-Oxley Act of 2002.*32
.1

Certification of Curtis J.
    Clawson, Chairman of the Board, President and Chief Executive
    Officer, Pursuant to 18 U.S.C. Section 1350, as
    Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002.*32
.2

Certification of James A. Yost,
    Vice President, Finance, and Chief Financial Officer, Pursuant
    to 18 U.S.C. Section 1350, as Adopted Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.*99
.1

Amended and Restated Certificate
    of Incorporation of HLI Operating Company, Inc., effective as of
    May 30, 2003 (incorporated by reference to Exhibit 4.3
    to our Quarterly Report on
    Form 10-Q
    for the quarterly period ended April 30, 2003, filed
    June 16, 2003).     *
    
    Filed electronically herewith. 100




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##### Table of Contents



SIGNATURES      By:
    /s/  JAMES
    A. YOST   Vice President, Finance, and
 Chief Financial Officer
      Signature

Title

Date/s/  CURTIS
    J. CLAWSONCurtis
    J. Clawson

Chairman of the Board of
    Directors
    Chief Executive Officer,
    President and Director/s/  JAMES
    A. YOSTJames
    A. Yost

Vice President, Finance, and
    Chief Financial Officer/s/  MARK
    A. BREBBERMANMark
    A. Brebberman

Corporate Controller/s/  WILLIAM
    C. CUNNINGHAM *William
    C. Cunningham

Director/s/  GEORGE
    T. HAYMAKER, JR. *George
    T. Haymaker, Jr.

Lead Director/s/  LAURIE
    SIEGEL *Laurie
    Siegel

Director/s/  MOHSEN
    SOHI *Mohsen
    Sohi

Director/s/  HENRY
    D.G. WALLACE *Henry
    D.G. Wallace

Director/s/  RICHARD
    F. WALLMAN *Richard
    F. Wallman

Director*
    /s/  PATRICK
    C. CAULEYPatrick
    C. CauleyAttorney-in-fact  101




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##### Table of Contents



HAYES
    LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
  SCHEDULE II  VALUATION
    AND QUALIFYING ACCOUNTS
  AdditionsBalance at


Charged to





BalanceBeginning


Costs and





at Endof Year


Expenses


Deductions


of Year(Dollars in millions)Year ended January 31, 2006Allowance for doubtful accounts

$
4.9



2.8



(3.5
)

$
4.2Year ended January 31, 2005Allowance for doubtful accounts

$
6.1



3.6



(4.8
)

$
4.9Year ended January 31, 2004Allowance for doubtful accounts

$
6.2



1.3



(1.4
)

$
6.1  102




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##### Table of Contents



EXHIBIT INDEX
  2
.1

Modified First Amended Joint Plan
    of Reorganization of Hayes Lemmerz International, Inc. and Its
    Affiliated Debtors and Debtors in Possession, as Further
    Modified (incorporated by reference to Exhibit 2.1 to our
    Current Report on
    Form 8-K,
    filed May 21, 2003).2
.2

Agreement and Plan of Merger,
    dated as of June 3, 2003, by and between Hayes Lemmerz
    International, Inc. and HLI Operating Company, Inc.
    (incorporated by reference to Exhibit 2.3 to our Current
    Report on
    Form 8-K
    filed, June 3, 2003).3
.1

Certificate of Incorporation of
    HLI Holding Company, Inc., effective as of May 6, 2003
    (incorporated by reference to Exhibit 3.1 to our
    Form 8-A/A,
    filed June 4, 2003).3
.2

Amendment to the Certificate of
    Incorporation of HLI Holding Company, Inc., effective as of
    June 3, 2003 (incorporated by reference to Exhibit 3.2
    to our
    Form 8-A/A,
    filed June 4, 2003).3
.3

By-Laws of Hayes Lemmerz
    International, Inc. (formerly known as HLI Holding Company,
    Inc.), effective as of May 30, 2003 (incorporated by
    reference to Exhibit 3.3 to our
    Form 8-A/A,
    filed June 4, 2003).4
.1

Purchase Agreement, dated as of
    May 22, 2003, by and between Hayes Lemmerz International,
    Inc., its subsidiaries named therein, and the Initial Purchasers
    of the $250,000,000 of
    101/2% Senior
    Notes due 2010 to be issued by HLI Operating Company, Inc.
    (incorporated by reference to Exhibit 4.1 to our Quarterly
    Report on
    Form 10-Q
    for the quarterly period ended April 30, 2003, filed
    June 16, 2003).4
.2

Indenture, dated as of
    June 3, 2003, regarding $250,000,000 of
    101/2%
    Senior Notes due 2010, by and between HLI Operating Company,
    certain listed Guarantors, and U.S. Bank National
    Association, as Trustee (incorporated by reference to
    Exhibit 4.2 to our Quarterly Report on
    Form 10-Q
    for the quarterly period ended April 30, 2003, filed
    June 16, 2003).4
.3

Form of
    101/2% Senior
    Notes due 2010 (attached as Exhibit A to the Indenture
    filed as Exhibit 4.2 to our Quarterly Report on
    Form 10-Q
    for the quarterly period ended April 30, 2003, filed
    June 16, 2003).4
.4

First Supplemental Indenture,
    dated as of June 19, 2003, by and between HLI Operating
    Company, Inc. certain listed Guarantors, and U.S. Bank
    National Association, as Trustee (incorporated by reference to
    Exhibit 4.2 to our Registration statement No.
    333-107539
    on
    Form S-4,
    filed on July 31, 2003, as amended).4
.5

Registration Rights Agreement,
    dated as of June 3, 2003, by and between HLI Operating
    Company, Inc. and the Initial Purchasers of the
    101/2% Senior
    Notes due 2010 (incorporated by reference to Exhibit 4.3 to
    our Quarterly Report on
    Form 10-Q
    for the quarterly period ended April 30, 2003, filed
    June 16, 2003).4
.6

Series A Warrant Agreement,
    dated as of June 2, 2003, by and between Hayes Lemmerz
    International, Inc. and Mellon Investor Services LLC, as Warrant
    Agent (incorporated by reference to Exhibit 4.1 to our
    Form 8-A,
    filed June 4, 2003).4
.7

Series B Warrant Agreement,
    dated as of June 2, 2003, by and between Hayes Lemmerz
    International, Inc. and Mellon Investor Services LLC, as Warrant
    Agent (incorporated by reference to Exhibit 4.2 to our
    Form 8-A,
    filed June 4, 2003).4
.8

Exchange Agreement, dated as of
    June 3, 2003, by and between Hayes Lemmerz International,
    Inc., HLI Parent Company, Inc. and HLI Operating Company, Inc.
    regarding the Series A Exchangeable Preferred Stock issued
    by HLI Operating Company, Inc. (incorporated by reference to
    Exhibit 4.3 to our Quarterly Report on
    Form 10-Q
    for the quarterly period ended April 30, 2003, filed
    June 16, 2003).4
.9

Registration Rights Agreement,
    dated as of July 1, 2004, by and between Hayes Lemmerz
    International, Inc., and AP Wheels, LLC (incorporated by
    reference to Exhibit 4.9 to our Quarterly Report on
    Form 10-Q
    for the quarterly period ended July 31, 2004, filed
    September 8, 2004).10
.1

Form of Severance Agreement, dated
    June 15, 2000, between Hayes and certain of its officers
    (incorporated by reference from our Quarterly Report on
    Form 10-Q
    for the quarter ended October 31, 2000, filed on
    December 15, 2000).10
.2

Amended and Restated Employment
    Agreement between Hayes and Curtis J. Clawson, dated
    September 26, 2001 (incorporated by reference from our
    Quarterly Report on
    Form 10-Q
    for the quarter ended October 31, 2001, filed on
    April 18, 2002).10
.3

Form of Employment Agreement
    between Hayes and certain of its officers (incorporated by
    reference from our Quarterly Report on
    Form 10-Q
    for the quarter ended October 31, 2001, filed on
    April  18, 2002).10
.4

Hayes Lemmerz International, Inc.
    Long Term Incentive Plan (incorporated by reference to
    Exhibit 10.1 to our Registration Statement
    No. 333-110684
    on
    Form S-8,
    filed on November 21, 2003). 103




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##### Table of Contents



10
.5

Hayes Lemmerz International, Inc.
    Critical Employee Retention Plan (incorporated by reference to
    Exhibit 10.2 to our Registration Statement
    No. 333-110684
    on
    Form S-8,
    filed on November 21, 2003).10
.6

Form of Directors Indemnification
    Agreement (incorporated by reference to Exhibit 10.49 to
    our Quarterly Report on
    Form 10-Q
    for the quarterly period ended July 31, 2003, filed
    September 15, 2003, as amended).10
.7

Receivables Financing Agreement,
    dated as of December 9, 2004 among HL Funding II,
    Inc., a Delaware corporation, CAFCO, LLC, a Delaware limited
    liability company, as an investor, Citibank, N.A., as a bank,
    Citicorp North America, Inc., a Delaware corporation, as program
    agent for the investors and the banks and as an investor agent,
    the other investors, banks and investor agents (each as defined
    below) from time to time party hereto, HLI Operating Company,
    Inc., a Delaware corporation, as servicer, and the disbursement
    agent named therein (incorporated by reference to
    Exhibit 10.1 to our Current Report on
    Form 8-K
    filed December 15, 2004).10
.8

Originator Purchase Agreement ,
    dated as of December 9, 2004 among HL Funding I, LLC,
    a Delaware limited liability company, and the wholly-owned
    subsidiaries of Hayes named therein as Originators, dated as of
    December 9, 2004 between HL Funding I, LLC, a Delaware
    limited liability company, and HL Funding II, Inc., a
    Delaware corporation (incorporated by reference to
    Exhibit 10.2 to our Current Report on
    Form 8-K
    filed December 15, 2004).10
.9

Secondary Purchase Agreement,
    dated as of December 9, 2004 between HL Funding I,
    LLC, a Delaware limited liability company, and HL
    Funding II, Inc., a Delaware corporation(incorporated by
    reference to Exhibit 10.3 to our Current Report on
    Form 8-K
    filed December  15, 2004).10
.10

Amended and Restated Credit
    Agreement, dated as of April 11, 2005 by and among HLI
    Operating Company, Inc., as Borrower, Hayes Lemmerz
    International, Inc., the Lenders and Issuers listed therein,
    Citicorp North America, Inc., as First Lien Agent, Second Lien
    Agent and Collateral Agent, Lehman Commercial Paper, Inc.,
    as Syndication Agent, and General Electric Capital Corporation,
    as Documentation Agent (incorporated by reference to
    Exhibit 10.1 to our Current Report on
    Form 8-K
    filed April 14, 2005).10
.11

Amended and Restated Guaranty
    dated as of April 11, 2005, by and among Hayes Lemmerz
    International, Inc., HLI Parent Company, Inc., the other
    Guarantors party thereto, and Citicorp North America, Inc., as
    Collateral Agent (incorporated by reference to Exhibit 10.2
    to the our current Report on
    Form 8-K
    filed April 14, 2005).10
.12

Amended and Restated Pledge and
    Security Agreement dated as of April 11, 2005, among Hayes
    Lemmerz International, Inc., HLI Operating Company, Inc., each
    other grantor from time to time party thereto, and Citicorp
    North America, Inc., as Collateral Agent (incorporated by
    reference to Exhibit 10.3 to the our current Report on
    Form 8-K
    filed April 14, 2005).10
.13

Intercreditor and Collateral
    Agency Agreement dated as of April 11, 2005, among Citicorp
    North America, Inc., as Administrative Agent for the first lien
    lenders, as Administrative Agent for the Term C lenders and as
    Collateral Agent, HLI Operating Company, Inc., Hayes Lemmerz
    International, Inc., and each other grantor party thereto
    (incorporated by reference to Exhibit 10.4 to our current
    Report on
    Form 8-K
    filed April 14, 2005).10
.14

First Amendment dated as of
    February 7, 2005 amending Receivables Financing Agreement,
    dated as of December 9, 2004 among HL Funding II, Inc.,
    CAFCO, LLC, Citibank, N.A., Citicorp North America, Inc., the
    other investors, banks and investor agents from time to time
    party thereto, and HLI Operating Company, Inc. (incorporated by
    reference to Exhibit 10.21 to our Quarterly Report on
    Form 10-Q
    filed on September 9, 2005).10
.15

Second Amendment dated as of
    May 27, 2005 amending each of (i) Receivables
    Financing Agreement, dated as of December 9, 2004 (as
    amended February 2, 2005) among HL Funding II,
    Inc., CAFCO, LLC, Citibank, N.A., Citicorp North America, Inc.,
    the other investors, banks and investor agents from time to time
    party thereto, and HLI Operating Company, Inc.;
    (ii) Originator Purchase Agreement, dated as of
    December 9, 2004 among HL Funding I, LLC, and the
    wholly-owned subsidiaries of the Company named therein as
    Originators; and (iii) Secondary Purchase Agreement, dated
    as of December 9, 2004 between HL Funding I, LLC,
    and HL Funding II, Inc. (incorporated by reference to
    Exhibit 10.22 to our Quarterly Report on
    Form 10-Q
    filed on September 9, 2005).10
.16

Hayes Lemmerz International, Inc.
    Officer Bonus Plan (incorporated by reference to Exhibit 10.1 to
    our Current Report on Form 8-K dated June 17, 2005).10
.17

Award Agreement under Hayes
    Lemmerz International, Inc. Officer Bonus Plan (incorporated by
    reference to Exhibit 10.2 to our Current Report on Form 8-K
    dated June 17, 2005). 104




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##### Table of Contents



10
.18

Amendment No. 1, Waiver and
    Consent to Amended and Restated Credit Agreement dated as of
    October 10, 2005 among HLI Operating Company, Inc., Hayes
    Lemmerz International, Inc. and Citicorp North America,
    Inc. as Administrative Agent on behalf of each Lender executing
    a Lender Consent (incorporated by reference to
    Exhibit 10.23 to our Quarterly Report on
    Form 10-Q
    filed on December 9, 2005).10
.19

Framework Agreement on the Ongoing
    Purchase of Receivables dated as of October 10, 2005 by and
    between Hayes Lemmerz Werke GmbH and MHB Financial Services
    GmbH & Co. KG (incorporated by reference to
    Exhibit 10.24 to our Quarterly Report on
    Form 10-Q
    filed on December 9, 2005).10
.20

Stock Purchase Agreement dated as
    of October 14, 2005 by and among HLI Operating Company,
    Inc., HLI Commercial Highway Holding Company, Inc., and Hayes
    Lemmerz International  Commercial Highway, Inc.
    and Precision Partners Holding Company, as amended by an
    Amendment to Stock Purchase Agreement dated November 11,
    2005 (incorporated by reference to Exhibit 10.25 to our
    Quarterly Report on
    Form 10-Q
    filed on December 9, 2005).10
.21

Amendment No. 2 to Amended
    and Restated Credit Agreement dated as of March 31, 2006
    among HLI Operating Company, Inc., Hayes Lemmerz International,
    Inc., and Citicorp North America, Inc. as Administrative Agent
    on behalf of each lender executing a Lender Consent
    (incorporated by reference to Exhibit 10.1 to our Current
    Report on
    Form 8-K
    filed on April 3, 2006.12


Computation of Ratio of Earnings
    to Fixed Charges.*14


Code of Ethics (incorporated by
    reference to Exhibit 10.8 to our Annual Report on
    Form 10-K filed on April 12, 2004).21


Hayes Subsidiaries.*23


Consent of Independent Registered
    Public Accounting Firm.*24


Powers of Attorney.31
.1

Certification of Curtis J.
    Clawson, Chairman of the Board, President and Chief Executive
    Officer, pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.*31
.2

Certification of James A. Yost,
    Vice President, Finance, and Chief Financial Officer, pursuant
    to Section 302 of the Sarbanes-Oxley Act of 2002.*32
.1

Certification of Curtis J.
    Clawson, Chairman of the Board, President and Chief Executive
    Officer, Pursuant to 18 U.S.C. Section 1350, as
    Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002.*32
.2

Certification of James A. Yost,
    Vice President, Finance, and Chief Financial Officer, Pursuant
    to 18 U.S.C. Section 1350, as Adopted Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.*99
.1

Amended and Restated Certificate
    of Incorporation of HLI Operating Company, Inc., effective as of
    May 30, 2003 (incorporated by reference to Exhibit 4.3
    to our Quarterly Report on
    Form 10-Q
    for the quarterly period ended April 30, 2003, filed
    June 16, 2003).     *
    
    Filed electronically herewith. 105