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UNITEDSTATES SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C.20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TOSECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR QUARTERLY PERIOD ENDED OCTOBER 3, 2004 COMMISSIONFILE NUMBER 1-12068

METALDYNE CORPORATION

(Exact name of registrant as specified in itscharter)

|                                                                              |  |                                    |  |  |  |  |
|------------------------------------------------------------------------------|--|------------------------------------|--|--|--|--|
| Delaware                                                                     |  | 38-2513957                         |
| (Stateor other jurisdiction ofincorporation ororganization)                  |  | (I.R.S. EmployerIdentificationNo.) |
| 47659Halyard Drive, Plymouth, Michigan(Address ofprincipal executiveoffices) |  | 48170-2429(ZipCode)                |
|                                                                              |

(734)207-6200

(Registrant's telephonenumber)

Indicate by check mark whether the registrant(1) has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements forthe past 90days.    Yes      X       No            

Indicate by check mark whether the registrant is anaccelerated filer (as defined in Rule 12b-2 of the ExchangeAct).    Yes               No      X   

There is currently no public market for theregistrant's common stock.

Indicate the number ofshares outstanding of each of the issuer's classes of commonstock, as of the latest practicaldate.

|                                     |  |                                        |            |        |  |  |
|-------------------------------------|--|----------------------------------------|------------|--------|--|--|
| Class                               |  | Sharesoutstanding at November 15, 2004 |
| Common stock,par value $1 per share |  |                                   | 42,844,760 |   |
|                                |  |
|                                     |

|  |
|--|
|  |
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|  |
|  |

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METALDYNE CORPORATION

INDEX

|          |  |                                                                                                                                       |  |         |        |        |  |  |  |  |
|----------|--|---------------------------------------------------------------------------------------------------------------------------------------|--|---------|--------|--------|--|--|--|--|
|     |  |                                                                                                                                  |  | PageNo. |
| PartI.   |  | FinancialInformation                                                                                                                  |  |
| Item 1.  |  | FinancialStatements                                                                                                                   |  |    |   |   |
|     |  | Consolidated BalanceSheets – October 3, 2004 and December 28, 2003                                                              |  |    | 3      |   |
|     |  | Consolidated Statements of Operationsfor the Three and Nine Months     Ended October 3, 2004 andSeptember 28,2003 |  |    | 4      |   |
|     |  | ConsolidatedStatements of Cash Flows for the Nine Months     Ended October3, 2004 and September 28, 2003          |  |    | 5      |   |
|     |  | Notesto Consolidated Financial Statements                                                                                             |  |    | 6-29   |   |
| Item 2.  |  | Management'sDiscussion and Analysis of Financial Condition and    Results ofOperations                            |  |    | 30-55  |   |
| Item3.   |  | Quantitative and Qualitative Disclosure About MarketRisk                                                                              |  |    | 55     |   |
| Item 4.  |  | Controls andProcedures                                                                                                                |  |    | 55-58  |   |
| Part II. |  | OtherInformation and Signature                                                                                                        |  |    | 59-60  |   |
|          |

2

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PART I. FINANCIAL INFORMATION ITEM 1.Financial Statements

METALDYNE CORPORATION CONSOLIDATEDBALANCE SHEET October 3, 2004 and December 28, 2003 (DollarsIn Thousands Except Per ShareAmounts)

|                                                                                                             |  |                |           |                 |  |        |           |         |  |  |
|-------------------------------------------------------------------------------------------------------------|--|----------------|-----------|-----------------|--|--------|-----------|---------|--|--|
|                                                                                                        |  | October3, 2004 |           | December28,2003 |
|                                                                                                        |  | (Unaudited)    |           |
| **ASSETS**                                                                                                  |  |
| Currentassets:                                                                                              |  |
| Cash and cashequivalents                                                                                    |  | $              | 1,190     |            |  | $      | 13,820    |    |
| Receivables:                                                                                                |  |
| Trade,net of allowance for doubtfulaccounts                                                                 |  |           | 126,820   |            |  |   | 139,330   |    |
| TriMas                                                                                                      |  |           | 7,230     |            |  |   | 15,350    |    |
| Other                                                                                                       |  |           | 10,370    |            |  |   | 26,440    |    |
| Totalreceivables,net                                                                                        |  |           | 144,420   |            |  |   | 181,120   |    |
| Inventories                                                                                                 |  |           | 117,520   |            |  |   | 83,680    |    |
| Deferredand refundable incometaxes                                                                          |  |           | 8,110     |            |  |   | 9,110     |    |
| Prepaidexpenses and otherassets                                                                             |  |           | 48,920    |            |  |   | 36,280    |    |
| Totalcurrentassets                                                                                          |  |           | 320,160   |            |  |   | 324,010   |    |
| Equity andother investments inaffiliates                                                                    |  |           | 131,080   |            |  |   | 148,830   |    |
| Propertyand equipment,net                                                                                   |  |           | 915,060   |            |  |   | 707,450   |    |
| Excess of costover net assets of acquiredcompanies                                                          |  |           | 584,540   |            |  |   | 584,390   |    |
| Intangibleand otherassets                                                                                   |  |           | 218,180   |            |  |   | 247,180   |    |
| Totalassets                                                                                                 |  | $              | 2,169,020 |            |  | $      | 2,011,860 |    |
| **LIABILITIESAND SHAREHOLDERS' EQUITY**                                                                     |  |
| Currentliabilities:                                                                                         |  |
| Accountspayable                                                                                             |  | $              | 263,890   |            |  | $      | 201,240   |    |
| Accruedliabilities                                                                                          |  |           | 116,450   |            |  |   | 136,840   |    |
| Currentmaturities, long-termdebt                                                                            |  |           | 8,450     |            |  |   | 10,880    |    |
| Totalcurrentliabilities                                                                                     |  |           | 388,790   |            |  |   | 348,960   |    |
| Long-termdebt                                                                                               |  |           | 856,080   |            |  |   | 766,930   |    |
| Deferred incometaxes                                                                                        |  |           | 112,550   |            |  |   | 121,520   |    |
| Minorityinterest                                                                                            |  |           | 800       |            |  |   | 800       |    |
| Other long-termliabilities                                                                                  |  |           | 141,860   |            |  |   | 153,760   |    |
| Redeemablepreferred stock (aggregate liquidation value $154.2million)                                       |  |           | 152,390   |            |  |   | —   |    |
| Totalliabilities                                                                                            |  | $              | 1,652,470 |            |  | $      | 1,391,970 |    |
| Redeemablepreferred stock (aggregate liquidation value $76.0million)                                        |  |           | —   |            |  |   | 73,980    |    |
| Preferredstock (non-redeemable), $1 par, Authorized: 25 million; Outstanding:None                           |  |           | —   |            |  |   | —   |    |
| Common stock,$1 par, Authorized: 250 million; Outstanding: 42.8 million and 42.7million shares,respectively |  |           | 42,830    |            |  |   | 42,730    |    |
| Paid-incapital                                                                                              |  |           | 693,540   |            |  |   | 692,400   |    |
| Accumulateddeficit                                                                                          |  |           | (260,540  | )          |  |   | (234,750  | )  |
| Accumulatedother comprehensiveincome                                                                        |  |           | 40,720    |            |  |   | 45,530    |    |
| Totalshareholders'equity                                                                                    |  |           | 516,550   |            |  |   | 545,910   |    |
| Totalliabilities, redeemable stock and shareholders'equity                                                  |  | $              | 2,169,020 |            |  | $      | 2,011,860 |    |
|                                                                                                             |

Seeaccompanying notes to the consolidated financialstatements.

3

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METALDYNE CORPORATION CONSOLIDATEDSTATEMENT OF OPERATIONS (Dollars In Thousands Except Per ShareAmounts)

|                                                              |  |                   |          |                    |  |                |          |                   |  |        |            |         |  |        |           |         |  |  |
|--------------------------------------------------------------|--|-------------------|----------|--------------------|--|----------------|----------|-------------------|--|--------|------------|---------|--|--------|-----------|---------|--|--|
|                                                         |  | ThreeMonths Ended |          | Nine MonthsEnded   |
|                                                         |  | (Unaudited)       |          | (Unaudited)        |
|                                                         |  | October3, 2004    |          | September 28, 2003 |  | October 3,2004 |          | September 28,2003 |
|                                                         |  |              |          | (Restated)         |  |           |          | (Restated)        |
| Netsales                                                     |  | $                 | 501,680  |               |  | $              | 346,680  |              |  | $      | 1,504,710  |    |  | $      | 1,119,140 |    |
| Costof sales                                                 |  |              | (467,500 | )             |  |           | (313,260 | )            |  |   | (1,365,930 | )  |  |   | (994,850  | )  |
| Grossprofit                                                  |  |              | 34,180   |               |  |           | 33,420   |              |  |   | 138,780    |    |  |   | 124,290   |    |
| Selling,general and administrative expenses                  |  |              | (35,880  | )             |  |           | (27,020  | )            |  |   | (98,350    | )  |  |   | (84,300   | )  |
| Restructuringcharges                                         |  |              | (220     | )             |  |           | (3,220   | )            |  |   | (1,930     | )  |  |   | (7,080    | )  |
| Losson disposition of manufacturing facilities               |  |              | —  |               |  |           | —  |              |  |   | (7,600     | )  |  |   | —   |    |
| Operatingprofit                                              |  |              | (1,920   | )             |  |           | 3,180    |              |  |   | 30,900     |    |  |   | 32,910    |    |
|                                                         |  |              |     |               |  |           |     |              |  |   |       |    |  |   |      |    |
| Otherexpense, net:                                           |  |
| Interest expense                                             |  |              | (21,740  | )             |  |           | (18,690  | )            |  |   | (61,490    | )  |  |   | (53,890   | )  |
| Preferredstock dividends                                     |  |              | (4,860   | )             |  |           | —  |              |  |   | (13,830    | )  |  |   | —   |    |
| Non-cashgain on maturity of interest rate arrangements       |  |              | —  |               |  |           | —  |              |  |   | 6,590      |    |  |   | —   |    |
| Equitygain (loss) from affiliates, net                       |  |              | 760      |               |  |           | 1,130    |              |  |   | 5,200      |    |  |   | (1,580    | )  |
| Other,net                                                    |  |              | (1,470   | )             |  |           | (770     | )            |  |   | (4,890     | )  |  |   | (6,540    | )  |
| Otherexpense, net                                            |  |              | (27,310  | )             |  |           | (18,330  | )            |  |   | (68,420    | )  |  |   | (62,010   | )  |
|                                                         |  |              |     |               |  |           |     |              |  |   |       |    |  |   |      |    |
| Lossbefore income taxes                                      |  |              | (29,230  | )             |  |           | (15,150  | )            |  |   | (37,520    | )  |  |   | (29,100   | )  |
| Incometax benefit                                            |  |              | (11,860  | )             |  |           | (4,810   | )            |  |   | (11,730    | )  |  |   | (8,760    | )  |
| Netloss                                                      |  |              | (17,370  | )             |  |           | (10,340  | )            |  |   | (25,790    | )  |  |   | (20,340   | )  |
| Preferredstock dividends                                     |  |              | —  |               |  |           | 2,340    |              |  |   | —    |    |  |   | 6,840     |    |
| Lossattributable to common stock                             |  | $                 | (17,370  | )             |  | $              | (12,680  | )            |  | $      | (25,790    | )  |  | $      | (27,180   | )  |
| Basicand diluted loss per share attributable to common stock |  | $                 | (0.41    | )             |  | $              | (0.30    | )            |  | $      | (0.60      | )  |  | $      | (0.64     | )  |
|                                                              |

Seeaccompanying notes to consolidated financial statements.

4

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METALDYNE CORPORATION CONSOLIDATEDSTATEMENT OF CASH FLOWS (Dollars InThousands)

|                                                                               |  |                 |          |                   |  |        |          |         |  |  |
|-------------------------------------------------------------------------------|--|-----------------|----------|-------------------|--|--------|----------|---------|--|--|
|                                                                          |  | NineMonthsEnded |
|                                                                          |  | (Unaudited)     |
|                                                                          |  | October3,2004   |          | September 28,2003 |
|                                                                          |  |            |          | (Restated)        |
| Operatingactivities:                                                          |  |            |     |              |  |   |     |    |
| Net loss                                                                      |  | $               | (25,790  | )            |  | $      | (20,340  | )  |
| Adjustmentsto reconcile net loss to net cash provided by operatingactivities: |  |            |     |              |  |   |     |    |
| Depreciationand amortization                                                  |  |            | 95,360   |              |  |   | 78,300   |    |
| Non-cash stockaward expense                                                   |  |            | 600      |              |  |   | 2,480    |    |
| Debtfee amortization                                                          |  |            | 2,010    |              |  |   | 1,540    |    |
| Fixed assetlosses                                                             |  |            | 1,540    |              |  |   | 2,200    |    |
| Loss ondisposition of manufacturing facilities                                |  |            | 7,600    |              |  |   | —  |    |
| Deferredincome taxes                                                          |  |            | (9,050   | )            |  |   | (29,550  | )  |
| Preferredstock dividends                                                      |  |            | 13,830   |              |  |   | —  |    |
| Non-cashinterest expense (interest accretion)                                 |  |            | —  |              |  |   | 5,340    |    |
| Non-cash gainon maturity of interest rate arrangements                        |  |            | (6,590   | )            |  |   | —  |    |
| Equity(earnings) losses from affiliates, net of dividends                     |  |            | (5,200   | )            |  |   | 1,580    |    |
| Other, net                                                                    |  |            | (70      | )            |  |   | (2,250   | )  |
| Changes inassets and liabilities, net of acquisition/disposition ofbusiness:  |  |            |     |              |  |   |     |    |
| Receivables, net                                                              |  |            | (56,250  | )            |  |   | 3,630    |    |
| Net proceedsof accounts receivable securitization facility                    |  |            | 87,290   |              |  |   | —  |    |
| Inventories                                                                   |  |            | (23,420  | )            |  |   | (3,690   | )  |
| Refundableincome taxes                                                        |  |            | —  |              |  |   | 31,420   |    |
| Prepaidexpenses and other assets                                              |  |            | (12,880  | )            |  |   | (10,330  | )  |
| Accountspayable and accrued liabilities                                       |  |            | 23,010   |              |  |   | (19,530  | )  |
| Netcash provided by operatingactivities                                       |  |            | 91,990   |              |  |   | 40,800   |    |
| Investingactivities:                                                          |  |            |     |              |  |   |     |    |
| Capitalexpenditures                                                           |  |            | (105,250 | )            |  |   | (74,370  | )  |
| Proceedsfrom sale/leaseback of fixed assets                                   |  |            | 72,530   |              |  |   | 8,460    |    |
| Proceeds ondisposition of manufacturing facilities                            |  |            | (500     | )            |  |   | 22,570   |    |
| Proceeds fromsale of TriMas shares                                            |  |            | —  |              |  |   | 20,000   |    |
| Acquisitionof business                                                        |  |            | (217,850 | )            |  |   | (7,650   | )  |
| Proceedson sale of joint venture                                              |  |            | 1,260    |              |  |   | —  |    |
| Investment injoint venture                                                    |  |            | —  |              |  |   | (20,000  | )  |
| Netcash used for investing activities                                         |  |            | (249,810 | )            |  |   | (50,990  | )  |
| Financingactivities:                                                          |  |            |     |              |  |   |     |    |
| Principalpayments of term loan facilities                                     |  |            | (880     | )            |  |   | (1,000   | )  |
| Proceeds ofrevolving credit facility                                          |  |            | 181,960  |              |  |   | 180,000  |    |
| Principalpayments of revolving credit facility                                |  |            | (125,910 | )            |  |   | (180,000 | )  |
| Proceedsof senior subordinated notes, due 2014                                |  |            | 31,750   |              |  |   | —  |    |
| Proceeds ofother debt                                                         |  |            | 1,220    |              |  |   | 1,660    |    |
| Principalpayments of other debt                                               |  |            | (7,400   | )            |  |   | (7,350   | )  |
| Capitalizationof debt refinancing fees                                        |  |            | —  |              |  |   | (2,250   | )  |
| Issuance ofSeries A-1 preferred stock                                         |  |            | 64,450   |              |  |   | —  |    |
| Netcash provided by (used for) financing activities                           |  |            | 145,190  |              |  |   | (8,940   | )  |
| Netdecrease in cash                                                           |  |            | (12,630  | )            |  |   | (19,130  | )  |
| Cash and cashequivalents, beginning of period                                 |  |            | 13,820   |              |  |   | 19,130   |    |
| Cashand cash equivalents, end of period                                       |  | $               | 1,190    |              |  | $      | —  |    |
| Supplementarycash flow information:                                           |  |            |     |              |  |   |     |    |
| Cashrefunded for income taxes, net                                            |  | $               | (15,050  | )            |  | $      | (27,700  | )  |
| Cashpaid for interest                                                         |  | $               | 48,690   |              |  | $      | 39,590   |    |
|                                                                               |

Seeaccompanying notes to consolidated financialstatements.

5

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METALDYNECORPORATIONNOTES TO CONSOLIDATED FINANCIALSTATEMENTS

|          |                               |
|----------|-------------------------------|
| 1.  | Business and OtherInformation |

|        |                                                                                                                                                                                                                                                                                                                     |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Metaldyne Corporation("Metaldyne" or "theCompany") is a leading global manufacturer of highlyengineered metal components for the global light vehicle market. Ourproducts include metal-formed and precision-engineered components andmodular systems used in vehicle transmission, engine and chassisapplications. |

|        |                                                                                                                                                                                                                                                                                                                                                  |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The Company maintains afifty-two/fifty-three week fiscal year ending on the Sunday nearest toDecember 31. Fiscal years 2004 and 2003 each comprise fifty-two weeksand end on January 2, 2005 and December 28, 2003, respectively. Allyear and quarter references relate to the Company's fiscal yearand fiscal quarters unless otherwise stated. |

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | In the opinion of Company management, theunaudited financial statements contain all adjustments, includingadjustments of a normal recurring nature, necessary to present fairlythe financial position, results of operations and cash flows for theperiods presented. These statements should be read in conjunction withthe Company's financial statements included in the Annual Reporton Form 10-K for the fiscal year ended December 28, 2003 (the"2003 Form 10-K"). The results of operationsfor the period ended October 3, 2004 are not necessarily indicative ofthe results for the full year. |

|        |                                                                                         |
|--------|-----------------------------------------------------------------------------------------|
|   | Certainprior year amounts have been reclassified to reflect current yearclassification. |

|          |             |
|----------|-------------|
| 2.  | Restatement |

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | In September 2004, the Company announced thecompletion of an independent investigation into certain accountingmatters ("Independent Investigation") and itsdetermination that certain previously issued financial statementsrequired restatement. The Company's financial statements forfiscal years 2001 and 2002 have been restated in the 2003 Form 10-K. Inaddition, the Company's quarterly financial information for thefirst three fiscal quarters of 2003 also has been restated to reflectadjustments to previously reported information on Form 10-Q, asdescribed elsewhere herein. |

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The restatementarose primarily out of information obtained through an investigationconducted by a special committee of the board of directors which wascomprised of one independent director of the Company. The specialcommittee retained independent counsel, Sidley Austin Brown & WoodLLP ("Sidley"), and in turn Sidley retainedDeloitte & Touche LLP ("D&T"), a firmwith forensic accounting expertise, to assist Sidley in theinvestigation. The Independent Investigation was initiated as a resultof certain admissions made by an employee of the Company andinformation obtained by the Company's internal audit staff. Theinvestigation expanded beyond its initial focus on thisemployee's admissions of intentional overstatements andunderstatements of income at the Company's Sintered division intoaccounting practices in other areas of the Company concerning thesmoothing of earnings through the use of accrual and allowance accountsand the recognition of tooling income. The restatement resulting fromthe Independent Investigation was limited to the periods from November30, 2000 through 2003. |

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Specifically, aformer Sintered division controller admitted that, following theacquisition of the Company in November 2000, income at the Sintereddivision from 2000 through 2003 was deliberately understated in aneffort to disguise this employee's previous overstatements ofincome at the Sintered division during the period from 1996 through1999. There were three primary admissions from the former Sintereddivisional controller related to the period 1996 to 1999. During thistime, he asserted that income was overstated by (1) overstating fixedassets, (2) understating liabilities (notably accounts payable), and(3) using a complex set of manual journal entries every month to"disguise" the effects of (1) and (2). Therestatement adjustments reflect the Company's correction of thesematters, based upon the findings of the Independent Investigation. Thecorrections of these Sintered division accounts indicate thatcumulative net losses for the periods investigated were actuallyunderstated as a result of these intentional actions. |

6

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METALDYNECORPORATIONNOTES TO CONSOLIDATED FINANCIALSTATEMENTS (Continued)

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Based upon certainfindings within the Sintered division, the investigation was expandedto encompass accounting practices in other areas of the Companyconcerning the use of accrual and allowance accounts and therecognition of tooling income for the period from 2001 through 2003.This investigation involved an extensive review of journal entries ofover a specified amount made over a three year period. As a result ofthe expanded investigation, the Company became aware of instances ofinappropriate accounting relating to allowances and accruals, which hadthe effect of "smoothing" earnings forcertain periods. Specifically, the Company concluded from theinvestigative findings that there were instances when accruals had beenestablished to cover unanticipated expenses, accruals had beenincreased or decreased based upon performance, and/or accruals had beenrecorded different from estimated or analyzed amounts. The Company alsoidentified from the investigative findings a few instances of incorrecttiming in the recognition of tooling income. The investigationcategorized journal entries from the relevant periods for analysis bythe Company and review by the Company with its current and formerindependent auditors. The Company analyzed those categories of entries,which the investigation determined to be either potentially inaccurate(i.e., warranting further review) or unknown (i.e., insufficientdocumentation for third party evaluation). |

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The restatement adjustments address (1)inappropriate actions taken at the Sintered division by correctingoverstated balances for property, plant and equipment, recognizinglower related depreciation expense and recognizing the continuingeffect of adjustments made in prior periods on previously reportedbalances of other accounts such as accounts payable and accountsreceivable; (2) the correction of certain journal entries, primarilyrelating to certain reserve and tooling accounts, identified as aresult of the Independent Investigation; and (3) certain otheradjustments not related to the Sintered investigation or the review ofthe accrual and tooling accounts. |

|        |                                                                                                                                                                                    |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | TotalAdjustments.    The following table presents the impact on netincome of the restatement adjustments for the three and nine monthsended September 28,2003: |

|                                          |  |                                     |         |                                     |  |        |         |         |  |  |
|------------------------------------------|--|-------------------------------------|---------|-------------------------------------|--|--------|---------|---------|--|--|
|                                     |  | (Inthousands)                       |
|                                     |  | Three MonthsEndedSeptember 28, 2003 |         | Nine Months Ended September28, 2003 |
| Net loss as previouslyreported           |  | $                                   | (9,570  | )                              |  | $      | (18,460 | )  |
| Sinteredadjustments                      |  |                                | (870    | )                              |  |   | (2,150  | )  |
| Tooling,accrual and allowanceadjustments |  |                                | 100     |                                |  |   | (190    | )  |
| Otheradjustments                         |  |                                | (460    | )                              |  |   | (680    | )  |
| Income taxeffect                         |  |                                | 460     |                                |  |   | 1,140   |    |
| Restatednetloss                          |  | $                                   | (10,340 | )                              |  | $      | (20,340 | )  |
|                                          |

7

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METALDYNECORPORATIONNOTES TO CONSOLIDATED FINANCIALSTATEMENTS (Continued)

|        |                                                                                                                                                                                        |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The following tablesummarizes the impact on net income of the restatement adjustments onthe consolidated statement of operations for the three and nine monthsended September 28,2003: |

|                                                             |  |                                      |          |                                    |  |            |         |                      |  |              |          |            |  |        |           |         |  |        |         |         |  |        |           |         |  |  |
|-------------------------------------------------------------|--|--------------------------------------|----------|------------------------------------|--|------------|---------|----------------------|--|--------------|----------|------------|--|--------|-----------|---------|--|--------|---------|---------|--|--------|-----------|---------|--|--|
|                                                        |  | (Inthousands)                        |
|                                                        |  | ThreeMonths Ended September 28, 2003 |          | Nine Months EndedSeptember 28,2003 |
|                                                        |  | AsPreviouslyReported                 |          | Restatements                       |  | AsRestated |         | AsPreviouslyReported |  | Restatements |          | AsRestated |
| Netsales                                                    |  | $                                    | 346,280  |                               |  | $          | 400     |                 |  | $            | 346,680  |       |  | $      | 1,117,890 |    |  | $      | 1,250   |    |  | $      | 1,119,140 |    |
| Costof goodssold                                            |  |                                 | (311,160 | )                             |  |       | (2,100  | )               |  |         | (313,260 | )     |  |   | (992,940  | )  |  |   | (1,910  | )  |  |   | (994,850  | )  |
| Grossprofit                                                 |  |                                 | 35,120   |                               |  |       | (1,700  | )               |  |         | 33,420   |       |  |   | 124,950   |    |  |   | (660    | )  |  |   | 124,290   |    |
| Selling,general and administrativeexpenses                  |  |                                 | (27,020  | )                             |  |       | — |                 |  |         | (27,020  | )     |  |   | (84,300   | )  |  |   | — |    |  |   | (84,300   | )  |
| Restructuringcharges                                        |  |                                 | (3,220   | )                             |  |       | — |                 |  |         | (3,220   | )     |  |   | (7,080    | )  |  |   | — |    |  |   | (7,080    | )  |
| Operatingprofit                                             |  |                                 | 4,880    |                               |  |       | (1,700  | )               |  |         | 3,180    |       |  |   | 33,570    |    |  |   | (660    | )  |  |   | 32,910    |    |
| Otherexpense,net:                                           |  |                                 |     |                               |  |       |    |                 |  |         |     |       |  |   |      |    |  |   |    |    |  |   |      |    |
| Interestexpense                                             |  |                                 | (18,690  | )                             |  |       | — |                 |  |         | (18,690  | )     |  |   | (53,810   | )  |  |   | (80     | )  |  |   | (53,890   | )  |
| Equityloss from affiliates,net                              |  |                                 | 1,130    |                               |  |       | — |                 |  |         | 1,130    |       |  |   | (1,580    | )  |  |   | — |    |  |   | (1,580    | )  |
| Other,net                                                   |  |                                 | (1,250   | )                             |  |       | 460     |                 |  |         | (770     | )     |  |   | (4,260    | )  |  |   | (2,280  | )  |  |   | (6,540    | )  |
| Otherexpense,net                                            |  |                                 | (18,810  | )                             |  |       | 460     |                 |  |         | (18,330  | )     |  |   | (59,650   | )  |  |   | (2,360  | )  |  |   | (62,010   | )  |
| Lossbefore incometaxes                                      |  |                                 | (13,930  | )                             |  |       | (1,220  | )               |  |         | (15,150  | )     |  |   | (26,080   | )  |  |   | (3,020  | )  |  |   | (29,100   | )  |
| Incometaxbenefit                                            |  |                                 | (4,360   | )                             |  |       | (450    | )               |  |         | (4,810   | )     |  |   | (7,620    | )  |  |   | (1,140  | )  |  |   | (8,760    | )  |
| Netloss                                                     |  | $                                    | (9,570   | )                             |  | $          | (770    | )               |  | $            | (10,340  | )     |  | $      | (18,460   | )  |  | $      | (1,880  | )  |  | $      | (20,340   | )  |
| Basicand diluted loss per share attributable to commonstock |  | $                                    | (0.28    | )                             |  | $          | (0.02   | )               |  | $            | (0.30    | )     |  | $      | (0.59     | )  |  | $      | (0.05   | )  |  | $      | (0.64     | )  |
|                                                             |

8

----

METALDYNECORPORATIONNOTES TO CONSOLIDATED FINANCIALSTATEMENTS (Continued)

|        |                                                                                                                                   |
|--------|-----------------------------------------------------------------------------------------------------------------------------------|
|   | The following tablesummarizes the impact on cash flow for the restatement adjustments forthe nine months ended September 28,2003: |

|                                                    |  |                      |          |              |  |            |         |         |  |        |          |         |  |  |
|----------------------------------------------------|--|----------------------|----------|--------------|--|------------|---------|---------|--|--------|----------|---------|--|--|
|                                               |  | (Inthousands)        |
|                                               |  | AsPreviouslyReported |          | Restatements |  | AsRestated |
| Cash flows from operatingactivities:               |  |
| Net cash used for operatingactivities              |  | $                    | 44,000   |         |  | $          | (3,200  | )  |  | $      | 40,800   |    |
| Cashflows from investing activities:               |  |
| Capitalexpenditures                                |  |                 | (77,600  | )       |  |       | 3,230   |    |  |   | (74,370  | )  |
| Proceedsfrom sale/leaseback of fixedassets         |  |                 | 8,460    |         |  |       | — |    |  |   | 8,460    |    |
| Dispositionof businesses to a relatedparty         |  |                 | 22,570   |         |  |       | — |    |  |   | 22,570   |    |
| Proceedsform sale of TriMasshares                  |  |                 | 20,000   |         |  |       | — |    |  |   | 20,000   |    |
| Acquisitionof business,net                         |  |                 | (7,650   | )       |  |       | — |    |  |   | (7,650   | )  |
| Investmentin jointventure                          |  |                 | (20,000  | )       |  |       | — |    |  |   | (20,000  | )  |
| Netcash provided by (used for) investingactivities |  |                 | (54,220  | )       |  |       | 3,230   |    |  |   | (50,990  | )  |
| Cashflows from financing activities:               |  |
| Principal paymentsof term loanfacilities           |  |                 | (1,000   | )       |  |       | — |    |  |   | (1,000   | )  |
| Proceedsof revolving creditfacility                |  |                 | 180,000  |         |  |       | — |    |  |   | 180,000  |    |
| Principalpayments of revolving creditfacility      |  |                 | (180,000 | )       |  |       | — |    |  |   | (180,000 | )  |
| Proceedsof otherdebt                               |  |                 | 1,660    |         |  |       | — |    |  |   | 1,660    |    |
| Principalpayments of otherdebt                     |  |                 | (7,320   | )       |  |       | (30     | )  |  |   | (7,350   | )  |
| Capitalizationof debt refinancingfees              |  |                 | (2,250   | )       |  |       | — |    |  |   | (2,250   | )  |
| Netcash used for financingactivities               |  |                 | (8,910   | )       |  |       | (30     | )  |  |   | (8,940   | )  |
| Netdecrease incash                                 |  |                 | (19,130  | )       |  |       | — |    |  |   | (19,130  | )  |
| Cashand cash equivalents, beginning ofperiod       |  |                 | 19,130   |         |  |       | — |    |  |   | 19,130   |    |
| Cashand cash equivalents, end ofperiod             |  | $                    | —  |         |  | $          | — |    |  | $      | —  |    |
|                                                    |

9

----

METALDYNECORPORATIONNOTES TO CONSOLIDATED FINANCIALSTATEMENTS (Continued)

3.    Stock Options and Awards

|        |                                                                                                                                                                                                                                                                                          |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The following disclosure for the financialstatements for the period ended October 3, 2004 is based on the Companycontinuing to account for stock-based employee compensation using theintrinsic value method under Accounting Principles Board("APB") No. 25 and relatedinterpretations. |

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The Company has astock-based employee compensation plan and has issued restricted stockunits discussed below. No stock-based employee compensation cost isreflected in net income for the stock option plan, as all optionsgranted under this plan had an exercise price equal to the market valueof the underlying common stock on the date of grant. The followingtable illustrates the effect on net income and earnings per share ifthe Company had applied the fair value recognition provisions of SFASNo. 123, "Accounting for Stock-BasedCompensation," to stock-based employeecompensation. |

|                                                                                                                                          |  |                                       |         |                    |  |                |         |                   |  |        |         |         |  |        |         |         |  |  |
|------------------------------------------------------------------------------------------------------------------------------------------|--|---------------------------------------|---------|--------------------|--|----------------|---------|-------------------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                                                                                                                     |  | (Inthousands except per shareamounts) |
|                                                                                                                                     |  | Three MonthsEnded                     |         | Nine MonthsEnded   |
|                                                                                                                                     |  | October 3,2004                        |         | September 28, 2003 |  | October 3,2004 |         | September 28,2003 |
|                                                                                                                                     |  |                                  |         | (Restated)         |  |           |         | (Restated)        |
| Netloss attributable to common stock, asreported                                                                                         |  | $                                     | (17,370 | )             |  | $              | (12,680 | )            |  | $      | (25,790 | )  |  | $      | (27,180 | )  |
| Deduct:Total stock-based employee compensation expense determined under fairvalue based method for all awards, net of related taxeffects |  |                                  | (40     | )             |  |           | (400    | )            |  |   | (210    | )  |  |   | (1,340  | )  |
| Proforma net loss attributable to commonstock                                                                                            |  | $                                     | (17,410 | )             |  | $              | (13,080 | )            |  | $      | (26,000 | )  |  | $      | (28,520 | )  |
| Lossper share:                                                                                                                           |  |                                  |    |               |  |           |    |              |  |   |    |    |  |   |    |    |
| Basicand diluted – asreported                                                                                                      |  | $                                     | (0.41   | )             |  | $              | (0.30   | )            |  | $      | (0.60   | )  |  | $      | (0.64   | )  |
| Basicand diluted – pro forma for stock-basedcompensation                                                                           |  | $                                     | (0.41   | )             |  | $              | (0.31   | )            |  | $      | (0.61   | )  |  | $      | (0.67   | )  |
|                                                                                                                                     |  |                                  |    |               |  |           |    |              |  |   |    |    |  |   |    |    |
|                                                                                                                                          |

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Beginningin 2004, the Company offered eligible employees the opportunity toparticipate in a new Voluntary Stock Option Exchange Program (the"Program"), to exchange all of theiroutstanding options to purchase shares of the Company's commonstock granted under the Long Term Equity Incentive Plan (the"Plan") for new stock options and restrictedstock units to be granted under the Plan. Participation in the Programis voluntary; however, elections were required to be received byJanuary 14, 2004, with new stock options to be granted on or after July15, 2004 and restricted stock units granted on January 15, 2004.Non-eligible participants in the existing Plan and those eligibleemployees not electing to participate in the new Program will continueto be eligible to participate in the existing Plan. Stock compensationexpense for the nine months ended October 3, 2004 was $0.6 million. |

4.    Accounts Receivable Securitization and FactoringAgreements

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The Company has entered into anarrangement to sell, on an ongoing basis, the trade accounts receivableof substantially all domestic business operations to MTSPC, Inc.("MTSPC"), a wholly owned subsidiary of theCompany. MTSPC from time to time may sell an undivided fractionalownership interest in the pool of receivables up to approximately $150million to a third party multi-seller receivables funding company. Thenet proceeds of sale are less than the face amount of accountsreceivable sold by an amount that approximates the purchaser'sfinancing costs, which amounted to a total of $3.0 million and $2.4million for the nine months ended October 3, 2004 |

10

----

METALDYNECORPORATIONNOTES TO CONSOLIDATED FINANCIALSTATEMENTS (Continued)

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | and September 28, 2003 (as restated),respectively, and is included in other expense, net in theCompany's consolidated statement of operations. At October 3,2004, the Company's funding under the facility was $87.3 millionwith no additional amounts available. The discount rate at October 3,2004 was 2.78% compared to 2.14% at December 28, 2003.The usage fee under the facility is 1.5%. In addition, theCompany is required to pay a fee of 0.5% on the unused portionof the facility. This facility expires in November 2005. |

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The Company has entered into agreements withinternational invoice factoring companies to sell customer accountsreceivable of Metaldyne foreign locations in France, Germany, Spain,United Kingdom and Mexico on a non-recourse basis. As of October 3,2004, the Company had available approximately $67 million from thesecommitments, and approximately $52.6 million of receivables were soldunder these programs. The Company pays a commission to the factoringcompany plus interest from the date the receivables are sold to thedate of customer payment. Commission expense related to theseagreements are recorded in other expense, net on the Company'sconsolidated statement of operations. The net expense for theseprograms was approximately $3.4 million for the nine months endedOctober 3, 2004. |

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | To facilitate thecollection of funds from operating activities, the Company has enteredinto accelerated payment collection programs with its largestcustomers. At October 3, 2004, the Company received approximately $51.6million under the accelerated collection programs. The Company wasrecently notified that a portion of this program would expire in 2004,with the majority of the program expiring in 2005. While the impact ofthe discontinuance of these programs may be partially offset by agreater utilization of the accounts receivable securitization facility,the Company is examining other alternative programs in the marketplace,as well as enhanced terms directly from its customers. However, theCompany may not be able to reach a favorable resolution in a timelymanner, and the new arrangements may be less advantageous to theCompany. If the Company is unable to replace these arrangements, itcould adversely affect its liquidity and future covenant complianceunder its senior secured credit facility. In addition, if the Companyfails to renew its accounts receivable securitization agreement, whichexpires in November 2005, it could have adverse effects on theCompany's liquidity and future covenant compliance. However, theCompany had approximately $60 million of undrawn and availablecommitments on its revolving credit facility at October 3, 2004. |

5.    Inventories

|        |                                        |
|--------|----------------------------------------|
|   | Inventories bycomponent are asfollows: |

|                |  |                |         |                   |  |        |        |        |  |  |
|----------------|--|----------------|---------|-------------------|--|--------|--------|--------|--|--|
|           |  | (Inthousands)  |
|           |  | October 3,2004 |         | December 28, 2003 |
| Finishedgoods  |  | $              | 37,670  |              |  | $      | 25,710 |   |
| Work inprocess |  |           | 33,960  |              |  |   | 29,480 |   |
| Rawmaterials   |  |           | 45,890  |              |  |   | 28,490 |   |
|           |  | $              | 117,520 |              |  | $      | 83,680 |   |
|                |

6.    Goodwilland Other Intangible Assets

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | At October 3,2004, the goodwill balance was approximately $585 million. For purposesof testing this goodwill for potential impairment, fair values weredetermined based upon the discounted cash flows of the reporting unitsusing a 9.5% discount rate as of December 28, 2003. Thisassessment was completed for the year ended December 28, 2003, whichindicated that the fair value of these units exceeded their carryingvalues. |

11

----

METALDYNECORPORATIONNOTES TO CONSOLIDATED FINANCIALSTATEMENTS (Continued)

|        |                           |
|--------|---------------------------|
|   | Acquired IntangibleAssets |

|        |                                                                                                                                            |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------|
|   | The change in the gross carryingamount of acquired intangible assets is primarily attributable to theexchange impact from foreigncurrency. |

|                                                           |  |                                            |         |                         |  |                     |         |                     |  |                         |  |                     |         |        |  |        |         |         |  |           |  |  |  |  |  |  |
|-----------------------------------------------------------|--|--------------------------------------------|---------|-------------------------|--|---------------------|---------|---------------------|--|-------------------------|--|---------------------|---------|--------|--|--------|---------|---------|--|-----------|--|--|--|--|--|--|
|                                                      |  | (Inthousands, except weighted averagelife) |
|                                                      |  | As ofOctober 3, 2004                       |         | As of December 28,2003  |
|                                                      |  | GrossCarryingAmount                        |         | AccumulatedAmortization |  | WeightedAverageLife |         | GrossCarryingAmount |  | AccumulatedAmortization |  | WeightedAverageLife |
| AmortizedIntangibleAssets:                                |  |                                       |    |                    |  |                |    |                |  |                    |  |                |    |   |  |   |    |    |  |      |
| CustomerContracts                                         |  | $                                          | 93,350  |                    |  | $                   | (39,300 | )              |  | 8.2years                |  | $                   | 94,420  |   |  | $      | (31,050 | )  |  | 8.2years  |
| Technology andOther                                       |  |                                       | 163,260 |                    |  |                | (43,100 | )              |  | 14.9years               |  |                | 165,280 |   |  |   | (35,290 | )  |  | 14.9years |
| Total                                                     |  | $                                          | 256,610 |                    |  | $                   | (82,400 | )              |  | 13.6years               |  | $                   | 259,700 |   |  | $      | (66,340 | )  |  | 13.6years |
| Aggregate Amortization Expense(Included in Cost ofSales): |  |                                       |    |                    |  |                |    |                |  |                    |  |                |    |   |  |   |    |    |  |      |
| Forthe nine months endedOctober 3,2004                    |  |                                       |    |                    |  | $                   | 17,850  |                |  |                    |  |                |    |   |  |   |    |    |  |      |
| EstimatedAmortizationExpense:                             |  |                                       |    |                    |  |                |    |                |  |                    |  |                |    |   |  |   |    |    |  |      |
| Forthe year ending January 2,2005                         |  |                                       |    |                    |  |                | 23,500  |                |  |                    |  |                |    |   |  |   |    |    |  |      |
| Forthe year ending December 31,2005                       |  |                                       |    |                    |  |                | 23,100  |                |  |                    |  |                |    |   |  |   |    |    |  |      |
| Forthe year ending December 31,2006                       |  |                                       |    |                    |  |                | 23,100  |                |  |                    |  |                |    |   |  |   |    |    |  |      |
| Forthe year ending December 31,2007                       |  |                                       |    |                    |  |                | 22,300  |                |  |                    |  |                |    |   |  |   |    |    |  |      |
| Forthe year ending December 31,2008                       |  |                                       |    |                    |  |                | 21,600  |                |  |                    |  |                |    |   |  |   |    |    |  |      |
|                                                           |

|        |          |
|--------|----------|
|   | Goodwill |

|        |                                                                                                        |
|--------|--------------------------------------------------------------------------------------------------------|
|   | The changes in the carrying amount of goodwillfor the nine months ended October 3, 2004 are asfollows: |

|                                     |  |               |         |           |  |        |         |         |  |        |         |        |  |        |         |         |  |  |
|-------------------------------------|--|---------------|---------|-----------|--|--------|---------|---------|--|--------|---------|--------|--|--------|---------|---------|--|--|
|                                |  | (Inthousands) |
|                                |  | Chassis       |         | Driveline |  | Engine |         | Total   |
| Balanceas of December 28,2003       |  | $             | 61,630  |      |  |   | 371,010 |    |  |   | 151,750 |   |  |   | 584,390 |    |
| Exchangeimpact from foreigncurrency |  |          | — |      |  |   | 420     |    |  |   | 180     |   |  |   | 600     |    |
| Other                               |  |          | — |      |  |   | (450    | )  |  |   | — |   |  |   | (450    | )  |
| Balanceas of October 3,2004         |  | $             | 61,630  |      |  | $      | 370,980 |    |  | $      | 151,930 |   |  | $      | 584,540 |    |
|                                |  |          |    |      |  |   |    |    |  |   |    |   |  |   |    |    |
|                                     |

7.    DerivativeFinancial Instruments

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The Company managesits exposure to changes in interest rates through the use of interestrate protection agreements. These interest rate derivatives aredesignated as cash flow hedges. The effective portion of eachderivative's gain or loss is initially reported as a component ofother comprehensive income (loss) and subsequently reclassified intoearnings when the forecasted transaction affects earnings. The Companydoes not use derivatives for speculative purposes. |

|        |                                                                                                                                                                                                                                                                                                    |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | In February 2001, the Company entered intointerest rate protection agreements with various financial institutionsto hedge a portion of its interest rate risk related to the term loanborrowings under its credit facility. These agreements include twointerest rate collars with a term of three |

12

----

METALDYNECORPORATIONNOTES TO CONSOLIDATED FINANCIALSTATEMENTS (Continued)

|        |                                                                                                                                                                                                                                                                                                                                         |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | years, a total notional amount of $200million as of December 28, 2003, and a three-month LIBOR interest ratecap and floor of 7% and approximately 4.5%, respectively.The agreements also include four interest rate caps at a three-monthLIBOR interest rate of 7% with a total notional amount of $301million as of December 28, 2003. |

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | All of theCompany's interest rate protection arrangements matured inFebruary 2004 and, as a result of their maturity, a cumulative pre-taxnon-cash gain of $6.6 million was recorded and is reflected as anon-cash gain on maturity of interest rate arrangements in theCompany's consolidated statement of operations for the ninemonths ended October 3, 2004. Prior to their maturity, $6.6 million wasincluded in accumulated other comprehensive income related to thesearrangements. Prior to the expiration of these agreements, the Companyrecognized additional interest expense of $1.1 million during the ninemonths ended October 3, 2004. |

8.    Segment Information

|        |                                                                                                                                                                                                                                                                                                          |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The Company has defined a segment as acomponent with business activity resulting in revenue and expense thathas separate financial information evaluated regularly by theCompany's chief operating decision maker and its board ofdirectors in determining resource allocation and assessingperformance. |

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The Company has establishedAdjusted Earnings Before Interest Taxes Depreciation and Amortization("Adjusted EBITDA") as a key indicator offinancial operating performance. The Company defines Adjusted EBITDA asnet income (loss) before cumulative effect of accounting change andbefore interest, taxes, depreciation, amortization, asset impairment,non-cash losses on sale-leaseback of property and equipment andnon-cash restricted stock award expense. Adjusted EBITDA is a non-GAAPmeasure and therefore caution must be exercised in using AdjustedEBITDA as an analytical tool and should not be used in isolation or asa substitute for analysis of our results as reported under GAAP. Inevaluating Adjusted EBITDA, management deems it important to considerthe quality of the Company's underlying earnings by separatelyidentifying certain costs undertaken to improve the Company'sresults, such as costs related to consolidating facilities andbusinesses in an effort to eliminate duplicative costs or achieveefficiencies, costs related to integrating acquisitions andrestructuring costs related to expense reduction efforts. |

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The Company is comprised of three reportablesegments: Chassis, Driveline and Engine. In 2003, the Company moved oneof its European operations that had historically been part of theChassis segment to the Engine segment, and moved one of its domesticoperations that had historically been part of the Driveline segment tothe Engine segment. In 2004, the Company moved one of its NorthAmerican operations that had historically been part of the Enginesegment to the Chassis segment. The prior year amounts have beenrestated to reflect these changes for comparison purposes. |

|        |                                                                                                                                                                                                                                                                                                                                    |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | CHASSIS — Manufactures components,modules and systems used in a variety of engineered chassisapplications, including fittings, wheel-ends, axle shaft, knuckles andmini-corner assemblies. This segment utilizes a variety of processesincluding hot, warm and cold forging, powder metal forging andmachinery and assembly. |

|        |                                                                                                                                                                                                                                                                                                                                                              |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | DRIVELINE —Manufactures components, modules and systems, including precisionshafts, hydraulic controls, hot and cold forgings and integratedprogram management used in a broad range of transmission applications.These applications include transmission and transfer case shafts,transmission valve bodies, cold extrusion and Hatebur hot forgings. |

|        |                                                                                                                                                                                                                                                                                  |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ENGINE — Manufactures a broad range ofengine components, modules and systems, including sintered metal,powder metal, forged and tubular fabricated products used for a varietyof applications. These applications include balance shaft modules andfront cover assemblies. |

13

----

METALDYNECORPORATIONNOTES TO CONSOLIDATED FINANCIALSTATEMENTS (Continued)

|        |                                                                                                                       |
|--------|-----------------------------------------------------------------------------------------------------------------------|
|   | Segment activity forthe three and nine months ended October 3, 2004 and September 28, 2003(as restated) is asfollows: |

|                                               |  |                   |         |                    |  |                |         |                   |  |        |           |         |  |        |           |         |  |  |
|-----------------------------------------------|--|-------------------|---------|--------------------|--|----------------|---------|-------------------|--|--------|-----------|---------|--|--------|-----------|---------|--|--|
|                                          |  | (Inthousands)     |
|                                          |  | Three MonthsEnded |         | Nine MonthsEnded   |
|                                          |  | October 3,2004    |         | September 28, 2003 |  | October 3,2004 |         | September 28,2003 |
|                                          |  |              |         | (Restated)         |  |           |         | (Restated)        |
| **Sales**                                     |  |              |    |               |  |           |    |              |  |   |      |    |  |   |      |    |
| Chassis                                       |  | $                 | 148,480 |               |  | $              | 31,170  |              |  | $      | 432,730   |    |  | $      | 108,640   |    |
| Driveline                                     |  |              | 198,840 |               |  |           | 186,710 |              |  |   | 597,080   |    |  |   | 589,890   |    |
| Engine                                        |  |              | 154,360 |               |  |           | 128,800 |              |  |   | 474,900   |    |  |   | 420,610   |    |
| Totalsales                                    |  | $                 | 501,680 |               |  | $              | 346,680 |              |  | $      | 1,504,710 |    |  | $      | 1,119,140 |    |
|                                          |  |              |    |               |  |           |    |              |  |   |      |    |  |   |      |    |
| **AdjustedEBITDA**                            |  |              |    |               |  |           |    |              |  |   |      |    |  |   |      |    |
| Chassis                                       |  | $                 | 11,100  |               |  | $              | 2,490   |              |  | $      | 35,710    |    |  | $      | 9,960     |    |
| Driveline                                     |  |              | 10,200  |               |  |           | 16,720  |              |  |   | 50,580    |    |  |   | 58,200    |    |
| Engine                                        |  |              | 19,030  |               |  |           | 14,050  |              |  |   | 73,190    |    |  |   | 58,670    |    |
| Centralizedresources("Corporate")             |  |              | (10,800 | )             |  |           | (2,830  | )            |  |   | (24,660   | )  |  |   | (15,120   | )  |
| TotalAdjustedEBITDA                           |  |              | 29,530  |               |  |           | 30,430  |              |  |   | 134,820   |    |  |   | 111,710   |    |
| Depreciation&amortization                 |  |              | (31,360 | )             |  |           | (26,060 | )            |  |   | (95,360   | )  |  |   | (78,300   | )  |
| Non-cashstock awardexpense                    |  |              | (130    | )             |  |           | (950    | )            |  |   | (600      | )  |  |   | (2,480    | )  |
| Losson disposition of manufacturingfacilities |  |              | — |               |  |           | — |              |  |   | (7,600    | )  |  |   | —   |    |
| Other,net included in AdjustedEBITDA          |  |              | 40      |               |  |           | (240    | )            |  |   | (360      | )  |  |   | 1,980     |    |
| Operatingprofit                               |  | $                 | (1,920  | )             |  | $              | 3,180   |              |  | $      | 30,900    |    |  | $      | 32,910    |    |
|                                               |

|                 |  |                |           |                   |  |        |           |        |  |  |
|-----------------|--|----------------|-----------|-------------------|--|--------|-----------|--------|--|--|
|            |  | (Inthousands)  |
|            |  | October 3,2004 |           | December 28, 2003 |
| **TotalAssets** |  |           |      |              |  |   |      |   |
| Chassis         |  | $              | 383,030   |              |  | $      | 121,260   |   |
| Driveline       |  |           | 950,430   |              |  |   | 953,520   |   |
| Engine          |  |           | 748,270   |              |  |   | 733,920   |   |
| Corporate       |  |           | 87,290    |              |  |   | 203,160   |   |
| Total           |  | $              | 2,169,020 |              |  | $      | 2,011,860 |   |
|                 |

|                         |  |                  |         |                    |  |        |        |        |  |  |
|-------------------------|--|------------------|---------|--------------------|--|--------|--------|--------|--|--|
|                    |  | NineMonths Ended |
|                    |  | October 3,2004   |         | September 28, 2003 |
| **CapitalExpenditures** |  |             |    |               |  |   |   |   |
| Chassis                 |  | $                | 28,250  |               |  | $      | 10,390 |   |
| Driveline               |  |             | 32,950  |               |  |   | 29,640 |   |
| Engine                  |  |             | 42,600  |               |  |   | 29,690 |   |
| Corporate               |  |             | 1,450   |               |  |   | 4,650  |   |
| Total                   |  | $                | 105,250 |               |  | $      | 74,370 |   |
|                         |

|        |                                                                                                                                                                                                                                                                                                                                                                               |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Intercompanysales for the quarter ended October 3, 2004 were $1.9 million and $0.6million for the Driveline and Engine segments, respectively.Intercompany sales for the quarter ended September 28, 2003 were $0.6million for the Engine segment. Intercompany sales for the nine monthsended October 3, 2004 were $5.9 million and $2.2 million for theDriveline and Engine |

14

----

METALDYNECORPORATIONNOTES TO CONSOLIDATED FINANCIALSTATEMENTS (Continued)

|        |                                                                                                                                 |
|--------|---------------------------------------------------------------------------------------------------------------------------------|
|   | segments, respectively. Intercompany salesfor the nine months ended September 28, 2003 were $2.2 million for theEngine segment. |

9.    Acquisitions

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | In the first quarter of 2004, effectiveDecember 31, 2003, the Company completed a transaction withDaimlerChrysler Corporation("DaimlerChrysler") that transferred fullownership of the New Castle Machining and Forge ("NewCastle") manufacturing operations to Metaldyne. FromJanuary 2003 until the transaction at December 31, 2003, New Castle wasmanaged as a joint venture between Metaldyne and DaimlerChrysler; atDecember 28, 2003, the Company's investment in this joint venturewas approximately $20 million (before fees and expenses ofapproximately $2 million). The New Castle facility manufacturessuspension and powertrain components for Chrysler, Jeep and Dodgevehicles; additionally, Metaldyne has launched initiatives to expandthe customer base beyond DaimlerChrysler. The New Castle manufacturingoperations are part of the Company's Chassis segment. |

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | As part of the New Castle transaction,Metaldyne acquired Class A and Class B units representingDaimlerChrysler's entire joint venture interest in New Castle. Inexchange, Metaldyne delivered to DaimlerChrysler $215 million (beforefees and expenses of approximately $3 million), comprised of $118.8million in cash; $31.7 million in aggregate principal amount of a newissue of its 10% senior subordinated notes; and $64.5 million inaggregate liquidation preference of its Series A-1 preferred stock.Included in the $5 million fees and expenses is a $2.4 milliontransaction fee paid to Heartland Industrial Partners(Heartland")pursuant to the acquisition of New Castle. The cash portion of theconsideration was funded in part by the net cash proceeds ofapproximately $65 million from the sale-leaseback of certain machineryand equipment with a third-party lessor, with the remainder fundedthrough Metaldyne's revolving credit facility. |

|        |                                                                                                        |
|--------|--------------------------------------------------------------------------------------------------------|
|   | The assets and liabilities of New Castle atDecember 31, 2003 consisted of the following (inthousands): |

|                            |  |        |         |        |  |  |
|----------------------------|--|--------|---------|--------|--|--|
| Currentassets              |  | $      | 13,370  |   |
| Property and equipment,net |  |   | 240,720 |   |
| Totalassets                |  |   | 254,090 |   |
| Totalliabilities           |  |   | 14,110  |   |
| Netassets                  |  | $      | 239,980 |   |
|                            |

|        |                                                                                                                                                   |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Theabove assets and liabilities at the acquisition date, and are subjectto change based upon the final valuation and allocation of purchaseprice. |

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | On May 30, 2003, the Companyacquired a facility in Greensboro, North Carolina, from DanaCorporation ("Dana") for approximately $7.7million at closing and agreed to pay an additional $1.4 million in cashover a period of time ending on December 31, 2004. The Company may alsobe obligated to pay up to an additional $1.4 million in cash onDecember 31, 2004 depending upon the extent of new business awards atthe facility. The Greensboro facility became part of the Drivelinesegment's Transmission and Program Management division. TheGreensboro operation, which employs approximately 150 people, machinescast iron and aluminum castings, including various steering knucklesand aluminum carriers for light truck applications. The results ofoperations of the facility have been included in the consolidatedfinancial statements since that date. |

15

----

METALDYNECORPORATIONNOTES TO CONSOLIDATED FINANCIALSTATEMENTS (Continued)

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | As part of theagreement with Dana, the Company agreed to obtain a third party buyerof the Greensboro facility and agreed to sign a lease agreement withthis party. If the Company failed to obtain a third party buyer forthis property within 60 days of the acquisition, it agreed to pay Dana$10 million to purchase the facility. To secure this arrangement, theCompany gave Dana a letter of credit of $10 million. On July 14, 2003,the Company subsequently entered in a long-term lease agreement with athird party, thereby releasing the Company from the $10 million letterof credit. |

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | In addition, the Company signeda seven-year supply agreement with Dana covering all existing businessat Greensboro, including a right of last refusal on successor programs,as well as a commitment to award $20 million of new forging business tothe Company. Dana has also issued purchase orders, to be satisfied atother of our facilities, for incremental other tube, gear and carrierbusiness for a number of platforms. In September 2004, the Companyprovided notice to Dana that it had considered the supply agreementrelated explicitly to the supply of differential gears terminated.Since that time, and based on commercial negotiations between Dana andthe Company, the Company has agreed to rescind its notice oftermination, and Dana and the Company have agreed to develop a newsupply agreement to cover the future and continued supply ofdifferential gears. |

10.   Asset Impairments andRestructuring Related Integration Actions

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | In the first nine months of fiscal 2004, theCompany has entered into several restructuring arrangements whereby itincurred approximately $1.9 million of costs associated with severancefor the nine months ended October 3, 2004. Charges incurred by segmentare as follows: Chassis Group $0.1 million relating to headcountreduction initiatives; Driveline Group $1.2 million primarily relatingto charges associated with the closure of a facility in Europe; andCorporate $0.6 million primarily relating to headcount reductions. Infiscal 2003, the Company entered into several restructuringarrangements whereby it incurred approximately $13.1 million of costsassociated with severance and facility closures. These actions includethe completion of the Engine segment's European operationreorganization that was initiated in fiscal 2002 and completed in thefirst quarter of 2003 and actions within the Driveline segment'sforging operations and administrative departments to eliminateredundant headcount and adjust costs to reflect the decline in theCompany's forging revenue in 2003. Also included in this chargewere severance costs to replace certain members of the Company'sexecutive management team and the costs to restructure severaldepartments in the Company's corporate office, including thesales, human resources and information technology departments. |

|        |                                                                                                                                                                                                                                                         |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The Company expects to realize additionalsavings from the 2004 and 2003 restructuring actions, described above,in 2004 as reductions in employee-related expenses recognized in bothcost of goods sold and selling, general and administrative expense. |

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | In the fourth quarter of 2003, the Companyperformed its FAS 144 long-lived asset impairment test and recorded apre-tax, non-cash impairment write-down of $4.9 million. This chargewas recorded to reduce the net book value of two facilities withnegative operating performance to their current fair market value.These two facilities were sold on February 1, 2004 to an independentthird party of whom this sales price was used to determine the fairmarket value of these two facilities. This assessment did not result inany asset impairment for the remaining Metaldyne locations (see Note 11to the consolidated financial statements). |

|        |                                                                                                                                     |
|--------|-------------------------------------------------------------------------------------------------------------------------------------|
|   | The table below provides a rollforward of therestructuring accrual related to the above restructuring actions as ofOctober 3, 2004. |

16

----

METALDYNECORPORATIONNOTES TO CONSOLIDATED FINANCIALSTATEMENTS (Continued)

|                              |  |                                  |         |                                           |  |                                           |         |                                           |  |        |         |         |  |        |         |         |  |        |        |         |  |  |
|------------------------------|--|----------------------------------|---------|-------------------------------------------|--|-------------------------------------------|---------|-------------------------------------------|--|--------|---------|---------|--|--------|---------|---------|--|--------|--------|---------|--|--|
|                         |  |                             |         |                                      |  | (Inthousands)                             |         |
|                         |  | AcquisitionRelatedSeveranceCosts |         | 2002AdditionalSeveranceandOtherExit Costs |  | 2003AdditionalSeveranceandOtherExit Costs |         | 2004AdditionalSeveranceandOtherExit Costs |  | Total  |
| Balance atDecember 28, 2003  |  | $                                | 1,380   |                                      |  | $                                         | 360     |                                      |  | $      | 7,310   |    |  | $      | — |    |  | $      | 9,050  |    |
| Chargestoexpense             |  |                             | — |                                      |  |                                      | — |                                      |  |   | — |    |  |   | 1,930   |    |  |   | 1,930  |    |
| Cashpayments                 |  |                             | (250    | )                                    |  |                                      | (320    | )                                    |  |   | (3,790  | )  |  |   | (1,080  | )  |  |   | (5,440 | )  |
| Reversalof unutilizedamounts |  |                             | (360    | )                                    |  |                                      | — |                                      |  |   | — |    |  |   | — |    |  |   | (360   | )  |
| Balanceat October 3,2004     |  | $                                | 770     |                                      |  | $                                         | 40      |                                      |  | $      | 3,520   |    |  | $      | 850     |    |  | $      | 5,180  |    |
|                              |

|        |                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Theamounts above represent total estimated cash payments, of which $4.4million and $6.6 million are recorded in accrued liabilities, with $0.8million (which will primarily be paid out in fourth quarter 2005 andfiscal 2006) and $2.6 million recorded in other long-term liabilitiesin the Company's consolidated balance sheet at October 3, 2004and December 28, 2003, respectively. |

11.   Dispositions

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | On February 1, 2004, the Company sold itsownership of its Bedford Heights, Ohio and Rome, Georgia manufacturingoperations to Lester PDC, a Kentucky-based aluminum die casting andmachining company. These two plants had combined 2003 sales ofapproximately $62 million and an operating loss of approximately $14million. For the first nine months of 2003, these plants had sales ofapproximately $46 million and an operating loss of approximately $5million. The Company retained an interest in approximately $5.6 millionin working capital (principally accounts receivable). Cash paid in thetransaction to buy out the remaining portion of the equipment that hadpreviously been sold under an operating lease arrangement by theCompany was approximately $6.1 million, net of proceeds from Lester PDCof $4.1 million. The buyer also agreed to sub-lease both the BedfordHeights, Ohio and the Rome, Georgia facilities from the Company for anannual lease payment of approximately $600,000. Both manufacturingoperations were part of the Company's Driveline segment. Inconnection with the disposition of these manufacturing facilities, theCompany recognized a charge of $7.6 million on the Company'sconsolidated statement of operations as of October 3, 2004. The chargerepresents the book value of approximately $12 million in fixed assetsand deferred financing fees offset by the $4.1 million in cashconsideration paid by Lester PDC for the assets. |

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | On May 9, 2003, the Company sold its ChassisGroup's Fittings division to TriMas Corporation("TriMas") for $22.6 million plus theassumption of an operating lease. This transaction was accounted for asa sale of entities under common control, due to common ownershipbetween TriMas and the Company. Therefore, the proceeds, in excess ofthe book value, amounting to $6.3 million were recorded as equity andother investments in affiliates in the Company's consolidatedbalance sheet as of December 28, 2003. The Fittings division, which isa leading manufacturer of specialized fittings and cold-headed partsused in automotive and industrial applications, became part of theTriMas Fastening Systems Group. |

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | In April2003, TriMas exercised its right to repurchase 1 million shares of itscommon stock from the Company at $20 per share, the same price that itwas valued on June 6, 2002, the date of the Company's sale ofTriMas. As a result of this repurchase by TriMas, and as a result ofacquisitions performed by TriMas in 2003, the Company's ownershipin TriMas decreased to 5.75 million shares or approximately 28%of TriMas as of October 3, 2004. |

12.   MandatorilyRedeemable Preferred Stock

|        |                                                                                                                                                                                            |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | As part of theNew Castle transaction, Metaldyne issued 644,540 shares of $64.5million in liquidation value of redeemable Series A-1 preferred stockin exchange for interests in New Castle |

17

----

METALDYNECORPORATIONNOTES TO CONSOLIDATED FINANCIALSTATEMENTS (Continued)

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | held by DaimlerChrysler Corporation. Theredeemable Series A-1 preferred shares are mandatorily redeemable onDecember 31, 2013. The Series A-1 preferred stockholders are entitledto receive, when, as and if declared by the Company's Board ofDirectors, cumulative quarterly cash dividends at a rate of 11%per annum plus 2% per annum for any period for which there areany accrued and unpaid dividends. The preferred stock issued was valuedat $64.5 million as a preliminary estimate of the fair value of thissecurity, pending the final valuation. |

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | TheCompany has outstanding 361,001 shares of $36.1 million in liquidationvalue ($34.2 million estimated carrying value for accounting purposes)of Series A preferred stock par value $1 and authorized 370,000 sharesto Masco Corporation. The Company will accrete from the carrying valueto the liquidation value ratably over the twelve-year period. Thepreferred stock is mandatorily redeemable on December 31, 2012. SeriesA preferred stockholders are entitled to receive, when, as and ifdeclared by the Company's board of directors, cumulativequarterly cash dividends at a rate of 13% per annum for periodsending on or prior to December 31, 2005 and 15% per annum forperiods after December 31, 2005 plus 2% per annum for any periodfor which there are any accrued and unpaid dividends. |

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The Company has outstanding 184,153 sharesvalued at $18.5 million of redeemable Series B preferred stock inexchange for interests in GMTI. The redeemable Series B preferredshares issued are mandatory redeemable on June 15, 2013. The Series Bpreferred stockholders are entitled to receive, when, as and ifdeclared by the Company's Board of Directors, cumulativesemi-annual cash dividends at a rate of 11.5% per annum. OnDecember 31, 2003, Heartland Industrial Partners, L.P.,Metaldyne's parent company, purchased all of the outstanding184,153 shares of redeemable Series B preferred stock from former GMTIshareholders. |

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Preferred stock dividendswere $13.8 million and $6.8 million, while dividend cash payments werezero, for the nine months ended October 3, 2004 and September 28, 2003,respectively. Cumulative unpaid accrued dividends were $35.3 millionand $21.5 million as of October 3, 2004 and December 28, 2003,respectively. Redeemable preferred stock, consisting of outstandingshares and unpaid dividends, was $152.4 million and $74.0 million inthe Company's consolidated balance sheet at October 3, 2004 andDecember 28, 2003, respectively. As a result of the Company'simplementation of SFAS No. 150, "Accounting for CertainFinancial Instruments with Characteristics of both Liabilities andEquity," redeemable preferred stock has been reclassifiedas a long-term liability and dividends have been included in thedetermination of net loss effective beginning in 2004. |

18

----

METALDYNECORPORATIONNOTES TO CONSOLIDATED FINANCIALSTATEMENTS (Continued)

13.   Loss Per Share

|        |                                                                                                                                |
|--------|--------------------------------------------------------------------------------------------------------------------------------|
|   | The following reconciles the numerators anddenominators used in the computations of basic and diluted earnings percommonshare: |

|                                                              |  |                                       |         |                    |  |                |         |                   |  |        |         |         |  |        |         |         |  |  |
|--------------------------------------------------------------|--|---------------------------------------|---------|--------------------|--|----------------|---------|-------------------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                                         |  | (Inthousands except per shareamounts) |
|                                                         |  | Three MonthsEnded                     |         | Nine MonthsEnded   |
|                                                         |  | October 3,2004                        |         | September 28, 2003 |  | October 3,2004 |         | September 28,2003 |
|                                                         |  |                                  |         | (Restated)         |  |           |         | (Restated)        |
| Weightedaverage number of sharesoutstanding                  |  |                                  | 42,800  |               |  |           | 42,730  |              |  |   | 42,800  |    |  |   | 42,730  |    |
| Netloss                                                      |  | $                                     | (17,370 | )             |  | $              | (10,340 | )            |  | $      | (25,790 | )  |  | $      | (20,340 | )  |
| Less:Preferred stockdividends                                |  |                                  | — |               |  |           | 2,340   |              |  |   | — |    |  |   | 6,840   |    |
| Lossused for basic and diluted earnings per sharecomputation |  | $                                     | (17,370 | )             |  | $              | (12,680 | )            |  | $      | (25,790 | )  |  | $      | (27,180 | )  |
| Basicloss per share attributable to commonstock              |  | $                                     | (0.41   | )             |  | $              | (0.30   | )            |  | $      | (0.60   | )  |  | $      | (0.64   | )  |
| Totalshares used for basic earnings per sharecomputation     |  |                                  | 42,800  |               |  |           | 42,730  |              |  |   | 42,800  |    |  |   | 42,730  |    |
| Contingentlyissuableshares                                   |  |                                  | — |               |  |           | — |              |  |   | — |    |  |   | — |    |
| Totalshares used for diluted earnings per sharecomputation   |  |                                  | 42,800  |               |  |           | 42,730  |              |  |   | 42,800  |    |  |   | 42,730  |    |
| Dilutedloss per share attributable to commonstock            |  | $                                     | (0.41   | )             |  | $              | (0.30   | )            |  | $      | (0.60   | )  |  | $      | (0.64   | )  |
|                                                              |

|        |                                                                                                                                                                                                                            |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Excludedfrom the calculation of diluted loss per share are stock optionsrepresenting 911,100 and 2,470,000 of common shares as they areanti-dilutive at October 3, 2004 and September 28, 2003 (as restated),respectively. |

|        |                                                                                                                                                                                                                                                          |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Contingently issuable shares,representing approximately 50,000 and 890,000 restricted common shares,have an anti-dilutive effect on loss per share for the three and ninemonths ended October 3, 2004 and September 28, 2003 (as restated),respectively. |

14.   Comprehensive Income (Loss)

|        |                                                                              |
|--------|------------------------------------------------------------------------------|
|   | The Company's total comprehensive income(loss) for the period was asfollows: |

|                                                                  |  |                   |         |                    |  |                |         |                   |  |        |         |         |  |        |         |         |  |  |
|------------------------------------------------------------------|--|-------------------|---------|--------------------|--|----------------|---------|-------------------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                                             |  | (Inthousands)     |
|                                                             |  | Three MonthsEnded |         | Nine MonthsEnded   |
|                                                             |  | October 3,2004    |         | September 28, 2003 |  | October 3,2004 |         | September 28,2003 |
|                                                             |  |              |         | (Restated)         |  |           |         | (Restated)        |
| Netloss                                                          |  | $                 | (17,370 | )             |  | $              | (10,340 | )            |  | $      | (25,790 | )  |  | $      | (20,340 | )  |
| Othercomprehensive income(loss):                                 |  |              |    |               |  |           |    |              |  |   |    |    |  |   |    |    |
| Foreigncurrency translationadjustment                            |  |              | 6,810   |               |  |           | (150    | )            |  |   | 1,920   |    |  |   | 27,360  |    |
| Increasein TriMas investment                                     |  |              | 1,480   |               |  |           | — |              |  |   | (140    | )  |  |   | — |    |
| Interestrate agreements fair value adjustments (realized in2004) |  |              | — |               |  |           | 980     |              |  |   | (6,590  | )  |  |   | 1,370   |    |
| Totalother comprehensive income(loss)                            |  |              | 8,290   |               |  |           | 830     |              |  |   | (4,810  | )  |  |   | 28,730  |    |
| Totalcomprehensive income(loss)                                  |  | $                 | (9,080  | )             |  | $              | (9,510  | )            |  | $      | (30,600 | )  |  | $      | 8,390   |    |
|                                                                  |

19

----

METALDYNECORPORATIONNOTES TO CONSOLIDATED FINANCIALSTATEMENTS (Continued)

15.   Employee Benefit Plans

|        |                  |
|--------|------------------|
|   | PensionBenefits: |

|                                            |  |                   |         |                    |  |                |         |                   |  |        |         |         |  |        |         |         |  |  |
|--------------------------------------------|--|-------------------|---------|--------------------|--|----------------|---------|-------------------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                       |  | (Inthousands)     |
|                                       |  | Three MonthsEnded |         | Nine MonthsEnded   |
|                                       |  | October 3,2004    |         | September 28, 2003 |  | October 3,2004 |         | September 28,2003 |
| **Components of Net Periodic BenefitCost** |  |              |    |               |  |           |    |              |  |   |    |    |  |   |    |    |
| Servicecost                                |  | $                 | 760     |               |  | $              | 800     |              |  | $      | 2,320   |    |  | $      | 2,400   |    |
| Interestcost                               |  |              | 4,340   |               |  |           | 4,280   |              |  |   | 13,020  |    |  |   | 12,840  |    |
| Expectedreturn on planassets               |  |              | (4,220  | )             |  |           | (4,140  | )            |  |   | (12,920 | )  |  |   | (12,420 | )  |
| Amortizationof prior servicecost           |  |              | 30      |               |  |           | 30      |              |  |   | 110     |    |  |   | 90      |    |
| Amortizationof netloss                     |  |              | 550     |               |  |           | 170     |              |  |   | 1,790   |    |  |   | 510     |    |
| Curtailmentgain                            |  |              | — |               |  |           | — |              |  |   | (1,470  | )  |  |   | — |    |
| Netperiodic benefitcost                    |  | $                 | 1,460   |               |  | $              | 1,140   |              |  | $      | 2,850   |    |  | $      | 3,420   |    |
|                                            |

|        |                |
|--------|----------------|
|   | OtherBenefits: |

|                                            |  |                   |         |                    |  |                |         |                   |  |        |         |         |  |        |         |         |  |  |
|--------------------------------------------|--|-------------------|---------|--------------------|--|----------------|---------|-------------------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                       |  | (Inthousands)     |
|                                       |  | Three MonthsEnded |         | Nine MonthsEnded   |
|                                       |  | October 3,2004    |         | September 28, 2003 |  | October 3,2004 |         | September 28,2003 |
| **Components of Net Periodic BenefitCost** |  |              |    |               |  |           |    |              |  |   |    |    |  |   |    |    |
| Servicecost                                |  | $                 | 410     |               |  | $              | 260     |              |  | $      | 1,010   |    |  | $      | 780     |    |
| Interestcost                               |  |              | 700     |               |  |           | 750     |              |  |   | 2,260   |    |  |   | 2,250   |    |
| Expectedreturn on planassets               |  |              | — |               |  |           | — |              |  |   | — |    |  |   | — |    |
| Amortizationof prior servicecost           |  |              | (70     | )             |  |           | (30     | )            |  |   | (190    | )  |  |   | (90     | )  |
| Amortizationof netloss                     |  |              | 100     |               |  |           | 70      |              |  |   | 380     |    |  |   | 210     |    |
| Curtailmentgain                            |  |              | — |               |  |           | — |              |  |   | (480    | )  |  |   | — |    |
| Netperiodic benefitcost                    |  | $                 | 1,140   |               |  | $              | 1,050   |              |  | $      | 2,980   |    |  | $      | 3,150   |    |
|                                            |

|        |                                                                                                                                                                                                                                                                                                              |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Thepension benefits curtailment gain of $1.5 million relates to thedisposition of the manufacturing facilities discussed in Note 11 to theconsolidated financial statements. The other benefits curtailment gainof $0.5 million relates to the Medicare Prescription Drug, Improvementand Modernization Act. |

|        |                       |
|--------|-----------------------|
|   | EmployerContributions |

|        |                                                                                                                                                                                                                                                                             |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Metaldyne previouslydisclosed in its financial statements for the year ended December 28,2003, that it expected to contribute $17.5 million to its definedbenefit pension plans in 2004. As of October 3, 2004, approximately$13.8 million of contributions have been made. |

|        |                                                                                                                                                                                                                                                                                                                                                           |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The Company also disclosed in its financialstatements for the year ended December 28, 2003, that it expected tocontribute approximately $9.1 million to its defined contribution(profit-sharing and 401(k) matching contribution) plans in 2004. TheCompany has funded approximately $7.4 million to its definedcontribution plans as of October 3, 2004. |

16.   Commitmentsand Contingencies

|        |                                                                                                                                                                                                                                    |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The Company is subjectto claims and litigation in the ordinary course of its business, butdoes not believe that any such claim or litigation will have a materialadverse effect on its financial position or results of operation. |

20

----

METALDYNECORPORATIONNOTES TO CONSOLIDATED FINANCIALSTATEMENTS (Continued)

|        |                                                                                                                                                                                                                                                        |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | There are nomaterial pending legal proceedings, other than ordinary routinelitigation incidental to the Company's business, to which it isaware that would have a material adverse effect on the Company'sfinancial position or results of operations. |

17.   NewAccounting Pronouncements

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | In May 2003, theFASB issued SFAS No. 150, "Accounting for CertainFinancial Instruments with Characteristics of both Liabilities andEquity." This Statement establishes standards for how anissuer classifies and measures certain financial instruments withcharacteristics of both liabilities and equity. This Statement iseffective for financial instruments entered into or modified after May31, 2003, and otherwise is effective at the beginning of the firstinterim period beginning after June 15, 2003, except for mandatorilyredeemable financial instruments of nonpublic entities, for which it iseffective for the first fiscal period beginning after December 15,2003. Due to the Company being a nonpublic entity as defined in SFASNo. 150, it has adopted this Statement effective for the quarter endedMarch 28, 2004. As a result of the Company's adoption of SFAS No.150, the Company's redeemable preferred stock is classified as along-term liability on the Company's consolidated balance sheeteffective as of the quarter ended March 28, 2004, and preferred stockdividends associated with this redeemable preferred stock areclassified as other expense, net on the Company's consolidatedstatement of operations beginning with the quarter ended March 28,2004. |

18.   Subsequent Event

|        |                                                                                                                                                                                                                                                                                                                                                              |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | OnNovember 12, 2004, the Company sold approximately 924,000 shares of itsTriMas stock to Masco Corporation for $23 per share, or a total of$21.3 million. Metaldyne continues to own 4.83 million shares of TriMasstock, reducing the Company's ownership to approximately24%. Masco Corporation owns approximately 5.8% of theCompany's outstanding Shares. |

19.   CondensedConsolidating Financial Statements of Guarantors of Senior SubordinatedNotes

|        |                                                                      |
|--------|----------------------------------------------------------------------|
|   | The following condensedconsolidating financial information presents: |

|        |     |                                                                                                                                                                                                                                                                                                                                                            |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (1) | Condensed consolidatingfinancial statements as of October 3, 2004 and December 28, 2003, andfor the three and nine months ended October 3, 2004 and September 28,2003 (as restated) of (a) Metaldyne Corporation, the parent and issuer,(b) the guarantor subsidiaries, (c) the non-guarantor subsidiaries and(d) the Company on a consolidated basis, and |

|        |     |                                                                                                                              |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------|
|   | (2) | Elimination entriesnecessary to consolidate Metaldyne Corporation, the parent, withguarantor and non-guarantor subsidiaries. |

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The condensed consolidating financialstatements are presented on the equity method. Under this method, theinvestments in subsidiaries are recorded at cost and adjusted for theCompany's share of the subsidiaries' cumulative results ofoperations, capital contributions, distributions and other equitychanges. The principal elimination entries eliminate investments insubsidiaries and intercompany balances and transactions. |

|        |                                                                                                                                                                                                                                                                                                                  |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | All investments in non-domestic subsidiariesare held directly at Metaldyne Company LLC, a wholly owned subsidiaryof Metaldyne Corporation and the guarantor subsidiaries. Equity innon-domestic subsidiary investees is included in the guarantor columnof the accompanying consolidating financial information. |

21

----

METALDYNECORPORATIONNOTES TO CONSOLIDATED FINANCIALSTATEMENTS    (Continued)

Guarantor/Non-GuarantorCondensedConsolidating Balance Sheets October 3, 2004(Unaudited)

|                                                            |  |               |          |           |  |               |           |              |  |              |         |        |  |        |          |         |  |        |           |         |  |  |
|------------------------------------------------------------|--|---------------|----------|-----------|--|---------------|-----------|--------------|--|--------------|---------|--------|--|--------|----------|---------|--|--------|-----------|---------|--|--|
|                                                       |  | (Inthousands) |
|                                                       |  | Parent        |          | Guarantor |  | Non-Guarantor |           | Eliminations |  | Consolidated |
| **Assets**                                                 |  |          |     |      |  |          |      |         |  |         |    |   |  |   |     |    |  |   |      |    |
| Currentassets:                                             |  |          |     |      |  |          |      |         |  |         |    |   |  |   |     |    |  |   |      |    |
| Cashand cashequivalents                                    |  | $             | —  |      |  | $             | (3,620    | )       |  | $            | 4,810   |   |  | $      | —  |    |  | $      | 1,190     |    |
| Totalreceivables,net                                       |  |          | —  |      |  |          | 84,750    |         |  |         | 59,670  |   |  |   | —  |    |  |   | 144,420   |    |
| Inventories                                                |  |          | —  |      |  |          | 80,700    |         |  |         | 36,820  |   |  |   | —  |    |  |   | 117,520   |    |
| Deferredand refundable incometaxes                         |  |          | —  |      |  |          | 6,900     |         |  |         | 1,210   |   |  |   | —  |    |  |   | 8,110     |    |
| Prepaidexpenses and otherassets                            |  |          | —  |      |  |          | 42,500    |         |  |         | 6,420   |   |  |   | —  |    |  |   | 48,920    |    |
| Totalcurrentassets                                         |  |          | —  |      |  |          | 211,230   |         |  |         | 108,930 |   |  |   | —  |    |  |   | 320,160   |    |
| Equityinvestments inaffiliates                             |  |          | 131,080  |      |  |          | —   |         |  |         | — |   |  |   | —  |    |  |   | 131,080   |    |
| Propertyand equipment,net                                  |  |          | —  |      |  |          | 674,490   |         |  |         | 240,570 |   |  |   | —  |    |  |   | 915,060   |    |
| Excessof cost over net assets of acquiredcompanies         |  |          | —  |      |  |          | 443,370   |         |  |         | 141,170 |   |  |   | —  |    |  |   | 584,540   |    |
| Investmentinsubsidiaries                                   |  |          | 537,860  |      |  |          | 229,010   |         |  |         | — |   |  |   | (766,870 | )  |  |   | —   |    |
| Intangibleand otherassets                                  |  |          | —  |      |  |          | 198,310   |         |  |         | 19,870  |   |  |   | —  |    |  |   | 218,180   |    |
| Totalassets                                                |  | $             | 668,940  |      |  | $             | 1,756,410 |         |  | $            | 510,540 |   |  | $      | (766,870 | )  |  | $      | 2,169,020 |    |
| **LiabilitiesAnd Shareholders'Equity**                     |  |          |     |      |  |          |      |         |  |         |    |   |  |   |     |    |  |   |      |    |
| Currentliabilities:                                        |  |          |     |      |  |          |      |         |  |         |    |   |  |   |     |    |  |   |      |    |
| Accountspayable                                            |  | $             | —  |      |  | $             | 182,920   |         |  | $            | 80,970  |   |  | $      | —  |    |  | $      | 263,890   |    |
| Accruedliabilities                                         |  |          | —  |      |  |          | 82,930    |         |  |         | 33,520  |   |  |   | —  |    |  |   | 116,450   |    |
| Currentmaturities, long-termdebt                           |  |          | —  |      |  |          | 3,810     |         |  |         | 4,640   |   |  |   | —  |    |  |   | 8,450     |    |
| Totalcurrentliabilities                                    |  |          | —  |      |  |          | 269,660   |         |  |         | 119,130 |   |  |   | —  |    |  |   | 388,790   |    |
| Long-termdebt                                              |  |          | 431,750  |      |  |          | 419,350   |         |  |         | 4,980   |   |  |   | —  |    |  |   | 856,080   |    |
| Deferredincometaxes                                        |  |          | —  |      |  |          | 90,230    |         |  |         | 22,320  |   |  |   | —  |    |  |   | 112,550   |    |
| Minorityinterest                                           |  |          | —  |      |  |          | —   |         |  |         | 800     |   |  |   | —  |    |  |   | 800       |    |
| Otherlong-termliabilities                                  |  |          | —  |      |  |          | 134,990   |         |  |         | 6,870   |   |  |   | —  |    |  |   | 141,860   |    |
| Redeemablepreferredstock                                   |  |          | 152,390  |      |  |          | —   |         |  |         | — |   |  |   | —  |    |  |   | 152,390   |    |
| Intercompanyaccounts,net                                   |  |          | (431,750 | )    |  |          | 304,320   |         |  |         | 127,430 |   |  |   | —  |    |  |   | —   |    |
| Totalliabilities                                           |  |          | 152,390  |      |  |          | 1,218,550 |         |  |         | 281,530 |   |  |   | —  |    |  |   | 1,652,470 |    |
| Shareholders'equity:                                       |  |          |     |      |  |          |      |         |  |         |    |   |  |   |     |    |  |   |      |    |
| Preferredstock                                             |  |          | —  |      |  |          | —   |         |  |         | — |   |  |   | —  |    |  |   | —   |    |
| Commonstock                                                |  |          | 42,830   |      |  |          | —   |         |  |         | — |   |  |   | —  |    |  |   | 42,830    |    |
| Paid-incapital                                             |  |          | 693,540  |      |  |          | —   |         |  |         | — |   |  |   | —  |    |  |   | 693,540   |    |
| Accumulateddeficit                                         |  |          | (260,540 | )    |  |          | —   |         |  |         | — |   |  |   | —  |    |  |   | (260,540  | )  |
| Accumulatedother comprehensiveincome                       |  |          | 40,720   |      |  |          | —   |         |  |         | — |   |  |   | —  |    |  |   | 40,720    |    |
| InvestmentbyParent/Guarantor                               |  |          | —  |      |  |          | 537,860   |         |  |         | 229,010 |   |  |   | (766,870 | )  |  |   | —   |    |
| Totalshareholders'equity                                   |  |          | 516,550  |      |  |          | 537,860   |         |  |         | 229,010 |   |  |   | (766,870 | )  |  |   | 516,550   |    |
| Totalliabilities, redeemable stock and shareholders'equity |  | $             | 668,940  |      |  | $             | 1,756,410 |         |  | $            | 510,540 |   |  | $      | (766,870 | )  |  | $      | 2,169,020 |    |
|                                                            |

22

----

METALDYNECORPORATIONNOTES TO CONSOLIDATED FINANCIALSTATEMENTS    (Continued)

Guarantor/Non-Guarantor CondensedConsolidating Balance Sheets December 28, 2003

|                                                            |  |               |          |           |  |               |           |              |  |              |         |        |  |        |          |         |  |        |           |         |  |  |
|------------------------------------------------------------|--|---------------|----------|-----------|--|---------------|-----------|--------------|--|--------------|---------|--------|--|--------|----------|---------|--|--------|-----------|---------|--|--|
|                                                       |  | (Inthousands) |
|                                                       |  | Parent        |          | Guarantor |  | Non-Guarantor |           | Eliminations |  | Consolidated |
| **Assets**                                                 |  |          |     |      |  |          |      |         |  |         |    |   |  |   |     |    |  |   |      |    |
| Currentassets:                                             |  |          |     |      |  |          |      |         |  |         |    |   |  |   |     |    |  |   |      |    |
| Cashand cashequivalents                                    |  | $             | —  |      |  | $             | 10,750    |         |  | $            | 3,070   |   |  | $      | —  |    |  | $      | 13,820    |    |
| Totalreceivables,net                                       |  |          | —  |      |  |          | 151,940   |         |  |         | 29,180  |   |  |   | —  |    |  |   | 181,120   |    |
| Inventories                                                |  |          | —  |      |  |          | 54,080    |         |  |         | 29,600  |   |  |   | —  |    |  |   | 83,680    |    |
| Deferredand refundable incometaxes                         |  |          | —  |      |  |          | 7,900     |         |  |         | 1,210   |   |  |   | —  |    |  |   | 9,110     |    |
| Prepaidexpenses and otherassets                            |  |          | —  |      |  |          | 27,880    |         |  |         | 8,400   |   |  |   | —  |    |  |   | 36,280    |    |
| Totalcurrentassets                                         |  |          | —  |      |  |          | 252,550   |         |  |         | 71,460  |   |  |   | —  |    |  |   | 324,010   |    |
| Equityand other investments inaffiliates                   |  |          | 148,830  |      |  |          | —   |         |  |         | — |   |  |   | —  |    |  |   | 148,830   |    |
| Propertyand equipment,net                                  |  |          | —  |      |  |          | 478,760   |         |  |         | 228,690 |   |  |   | —  |    |  |   | 707,450   |    |
| Excessof cost over net assets of acquiredcompanies         |  |          | —  |      |  |          | 441,920   |         |  |         | 142,470 |   |  |   | —  |    |  |   | 584,390   |    |
| Investmentinsubsidiaries                                   |  |          | 471,060  |      |  |          | 229,590   |         |  |         | — |   |  |   | (700,650 | )  |  |   | —   |    |
| Intangibleand otherassets                                  |  |          | —  |      |  |          | 225,400   |         |  |         | 21,780  |   |  |   | —  |    |  |   | 247,180   |    |
| Totalassets                                                |  | $             | 619,890  |      |  | $             | 1,628,220 |         |  | $            | 464,400 |   |  | $      | (700,650 | )  |  | $      | 2,011,860 |    |
| **LiabilitiesAnd Shareholders'Equity**                     |  |          |     |      |  |          |      |         |  |         |    |   |  |   |     |    |  |   |      |    |
| Currentliabilities:                                        |  |          |     |      |  |          |      |         |  |         |    |   |  |   |     |    |  |   |      |    |
| Accountspayable                                            |  | $             | —  |      |  | $             | 128,960   |         |  | $            | 72,280  |   |  | $      | —  |    |  | $      | 201,240   |    |
| Accruedliabilities                                         |  |          | —  |      |  |          | 96,040    |         |  |         | 40,800  |   |  |   | —  |    |  |   | 136,840   |    |
| Currentmaturities, long-termdebt                           |  |          | —  |      |  |          | 4,820     |         |  |         | 6,060   |   |  |   | —  |    |  |   | 10,880    |    |
| Totalcurrentliabilities                                    |  |          | —  |      |  |          | 229,820   |         |  |         | 119,140 |   |  |   | —  |    |  |   | 348,960   |    |
| Long-termdebt                                              |  |          | 400,000  |      |  |          | 360,740   |         |  |         | 6,190   |   |  |   | —  |    |  |   | 766,930   |    |
| Deferredincometaxes                                        |  |          | —  |      |  |          | 95,530    |         |  |         | 25,990  |   |  |   | —  |    |  |   | 121,520   |    |
| Minorityinterest                                           |  |          | —  |      |  |          | —   |         |  |         | 800     |   |  |   | —  |    |  |   | 800       |    |
| Otherlong-termliabilities                                  |  |          | —  |      |  |          | 148,620   |         |  |         | 5,140   |   |  |   | —  |    |  |   | 153,760   |    |
| Intercompanyaccounts,net                                   |  |          | (400,000 | )    |  |          | 322,450   |         |  |         | 77,550  |   |  |   | —  |    |  |   | —   |    |
| Totalliabilities                                           |  |          | —  |      |  |          | 1,157,160 |         |  |         | 234,810 |   |  |   | —  |    |  |   | 1,391,970 |    |
| Redeemablepreferredstock                                   |  |          | 73,980   |      |  |          | —   |         |  |         | — |   |  |   | —  |    |  |   | 73,980    |    |
| Shareholders'equity:                                       |  |          |     |      |  |          |      |         |  |         |    |   |  |   |     |    |  |   |      |    |
| Preferredstock                                             |  |          | —  |      |  |          | —   |         |  |         | — |   |  |   | —  |    |  |   | —   |    |
| Commonstock                                                |  |          | 42,730   |      |  |          | —   |         |  |         | — |   |  |   | —  |    |  |   | 42,730    |    |
| Paid-incapital                                             |  |          | 692,400  |      |  |          | —   |         |  |         | — |   |  |   | —  |    |  |   | 692,400   |    |
| Accumulateddeficit                                         |  |          | (234,750 | )    |  |          | —   |         |  |         | — |   |  |   | —  |    |  |   | (234,750  | )  |
| Accumulatedother comprehensiveincome                       |  |          | 45,530   |      |  |          | —   |         |  |         | — |   |  |   | —  |    |  |   | 45,530    |    |
| InvestmentbyParent/Guarantor                               |  |          | —  |      |  |          | 471,060   |         |  |         | 229,590 |   |  |   | (700,650 | )  |  |   | —   |    |
| Totalshareholders'equity                                   |  | $             | 545,910  |      |  | $             | 471,060   |         |  | $            | 229,590 |   |  | $      | (700,650 | )  |  | $      | 545,910   |    |
| Totalliabilities, redeemable stock and shareholders'equity |  | $             | 619,890  |      |  | $             | 1,628,220 |         |  | $            | 464,400 |   |  | $      | (700,650 | )  |  | $      | 2,011,860 |    |
|                                                            |

23

----

METALDYNECORPORATIONNOTES TO CONSOLIDATED FINANCIALSTATEMENTS    (Continued)

Guarantor/Non-GuarantorCondensedConsolidating Statement Of OperationsThree Months Ended October 3,2004(Unaudited)

|                                            |  |               |         |           |  |               |          |              |  |              |         |         |  |        |         |        |  |        |          |         |  |  |
|--------------------------------------------|--|---------------|---------|-----------|--|---------------|----------|--------------|--|--------------|---------|---------|--|--------|---------|--------|--|--------|----------|---------|--|--|
|                                       |  | (Inthousands) |
|                                       |  | Parent        |         | Guarantor |  | Non-Guarantor |          | Eliminations |  | Consolidated |
| Netsales                                   |  | $             | — |      |  | $             | 396,040  |         |  | $            | 105,640 |    |  | $      | — |   |  | $      | 501,680  |    |
| Costofsales                                |  |          | — |      |  |          | (383,440 | )       |  |         | (84,060 | )  |  |   | — |   |  |   | (467,500 | )  |
| Grossprofit                                |  |          | — |      |  |          | 12,600   |         |  |         | 21,580  |    |  |   | — |   |  |   | 34,180   |    |
| Selling,general and administrativeexpenses |  |          | — |      |  |          | (30,030  | )       |  |         | (5,850  | )  |  |   | — |   |  |   | (35,880  | )  |
| Restructuringcharges                       |  |          | — |      |  |          | (210     | )       |  |         | (10     | )  |  |   | — |   |  |   | (220     | )  |
| Operatingprofit(loss)                      |  |          | — |      |  |          | (17,640  | )       |  |         | 15,720  |    |  |   | — |   |  |   | (1,920   | )  |
| Otherexpense,net:                          |  |          |    |      |  |          |     |         |  |         |    |    |  |   |    |   |  |   |     |    |
| Interestexpense                            |  |          | — |      |  |          | (21,060  | )       |  |         | (680    | )  |  |   | — |   |  |   | (21,740  | )  |
| Preferredstockdividends                    |  |          | (4,860  | )    |  |          | —  |         |  |         | — |    |  |   | — |   |  |   | (4,860   | )  |
| Equityincome (loss) from affiliates,net    |  |          | 760     |      |  |          | —  |         |  |         | --      |    |  |   | — |   |  |   | 760      |    |
| Other,net                                  |  |          | — |      |  |          | (1,270   | )       |  |         | (200    | )  |  |   | — |   |  |   | (1,470   | )  |
| Otherexpense,net                           |  |          | (4,100  | )    |  |          | (22,330  | )       |  |         | (880    | )  |  |   | — |   |  |   | (27,310  | )  |
| Income(loss) before incometaxes            |  |          | (4,100  | )    |  |          | (39,970  | )       |  |         | 14,840  |    |  |   | — |   |  |   | (29,230  | )  |
| Incometax expense(benefit)                 |  |          | — |      |  |          | (19,180  | )       |  |         | 7,320   |    |  |   | — |   |  |   | (11,860  | )  |
| Equityin net income ofsubsidiaries         |  |          | (13,270 | )    |  |          | 7,520    |         |  |         | — |    |  |   | 5,750   |   |  |   | —  |    |
| Earnings(loss) attributable to commonstock |  | $             | (17,370 | )    |  | $             | (13,270  | )       |  | $            | 7,520   |    |  | $      | 5,750   |   |  | $      | (17,370  | )  |
|                                            |

24

----

METALDYNECORPORATIONNOTES TO CONSOLIDATED FINANCIALSTATEMENTS    (Continued)

Guarantor/Non-Guarantor CondensedConsolidating Statement Of Operations Three Months Ended September28, 2003 (Unaudited) (Restated)

|                                            |  |               |         |           |  |               |          |              |  |              |         |         |  |        |                                                         |        |  |        |          |         |  |  |
|--------------------------------------------|--|---------------|---------|-----------|--|---------------|----------|--------------|--|--------------|---------|---------|--|--------|---------------------------------------------------------|--------|--|--------|----------|---------|--|--|
|                                       |  | (Inthousands) |
|                                       |  | Parent        |         | Guarantor |  | Non-Guarantor |          | Eliminations |  | Consolidated |
| Netsales                                   |  | $             | — |      |  | $             | 264,570  |         |  | $            | 82,110  |    |  | $      |         — |   |  | $      | 346,680  |    |
| Costofsales                                |  |          | — |      |  |          | (246,070 | )       |  |         | (67,190 | )  |  |   | —                                                 |   |  |   | (313,260 | )  |
| Grossprofit                                |  |          | — |      |  |          | 18,500   |         |  |         | 14,920  |    |  |   | —                                                 |   |  |   | 33,420   |    |
| Selling,general and administrativeexpenses |  |          | — |      |  |          | (20,070  | )       |  |         | (6,950  | )  |  |   | —                                                 |   |  |   | (27,020  | )  |
| Restructuringcharges                       |  |          | — |      |  |          | (3,220   | )       |  |         | — |    |  |   | —                                                 |   |  |   | (3,220   | )  |
| Operatingprofit                            |  |          | — |      |  |          | (4,790   | )       |  |         | 7,970   |    |  |   | —                                                 |   |  |   | 3,180    |    |
| Otherexpense,net:                          |  |          |    |      |  |          |     |         |  |         |    |    |  |   |                                                    |   |  |   |     |    |
| Interestexpense                            |  |          | — |      |  |          | (16,130  | )       |  |         | (2,560  | )  |  |   | —                                                 |   |  |   | (18,690  | )  |
| Equityincome (loss) from affiliates,net    |  |          | 1,130   |      |  |          | —  |         |  |         | — |    |  |   | —                                                 |   |  |   | 1,130    |    |
| Other,net                                  |  |          | — |      |  |          | (2,600   | )       |  |         | 1,830   |    |  |   | —                                                 |   |  |   | (770     | )  |
| Otherincome (expense),net                  |  |          | 1,130   |      |  |          | (18,730  | )       |  |         | (730    | )  |  |   | —                                                 |   |  |   | (18,330  | )  |
| Income(loss) before incometaxes            |  |          | 1,130   |      |  |          | (23,520  | )       |  |         | 7,240   |    |  |   | —                                                 |   |  |   | (15,150  | )  |
| Incometax expense(benefit)                 |  |          | — |      |  |          | (910     | )       |  |         | (3,900  | )  |  |   | —                                                 |   |  |   | (4,810   | )  |
| Equityin net income ofsubsidiaries         |  |          | (11,470 | )    |  |          | 11,140   |         |  |         | — |    |  |   | 330                                                     |   |  |   | —  |    |
| Netincome(loss)                            |  | $             | (10,340 | )    |  | $             | (11,470  | )       |  | $            | 11,140  |    |  | $      | 330                                                     |   |  | $      | (10,340  | )  |
| Preferredstockdividends                    |  |          | 2,340   |      |  |          | —  |         |  |         | — |    |  |   | —                                                 |   |  |   | 2,340    |    |
| Earnings(loss) attributable to commonstock |  | $             | (12,680 | )    |  | $             | (11,470  | )       |  | $            | 11,140  |    |  | $      | 330                                                     |   |  | $      | (12,680  | )  |
|                                            |

25

----

METALDYNECORPORATIONNOTES TO CONSOLIDATED FINANCIALSTATEMENTS    (Continued)

Guarantor/Non-Guarantor CondensedConsolidating Statement Of Operations Nine Months Ended October 3,2004 (Unaudited)

|                                                         |  |               |         |           |  |               |            |              |  |              |          |         |  |        |         |         |  |        |            |         |  |  |
|---------------------------------------------------------|--|---------------|---------|-----------|--|---------------|------------|--------------|--|--------------|----------|---------|--|--------|---------|---------|--|--------|------------|---------|--|--|
|                                                    |  | (Inthousands) |
|                                                    |  | Parent        |         | Guarantor |  | Non-Guarantor |            | Eliminations |  | Consolidated |
| Netsales                                                |  | $             | — |      |  | $             | 1,190,900  |         |  | $            | 313,810  |    |  | $      | — |    |  | $      | 1,504,710  |    |
| Costofsales                                             |  |          | — |      |  |          | (1,116,290 | )       |  |         | (249,640 | )  |  |   | — |    |  |   | (1,365,930 | )  |
| Grossprofit                                             |  |          | — |      |  |          | 74,610     |         |  |         | 64,170   |    |  |   | — |    |  |   | 138,780    |    |
| Selling,general and administrativeexpenses              |  |          | — |      |  |          | (81,550    | )       |  |         | (16,800  | )  |  |   | — |    |  |   | (98,350    | )  |
| Restructuringcharges                                    |  |          | — |      |  |          | (1,060     | )       |  |         | (870     | )  |  |   | — |    |  |   | (1,930     | )  |
| Proceedson disposition of manufacturingfacilities       |  |          | — |      |  |          | (7,600     | )       |  |         | —  |    |  |   | — |    |  |   | (7,600     | )  |
| Operatingprofit                                         |  |          | — |      |  |          | (15,600    | )       |  |         | 46,500   |    |  |   | — |    |  |   | 30,900     |    |
| Otherexpense,net:                                       |  |          |    |      |  |          |       |         |  |         |     |    |  |   |    |    |  |   |       |    |
| Interestexpense                                         |  |          | — |      |  |          | (56,360    | )       |  |         | (5,130   | )  |  |   | — |    |  |   | (61,490    | )  |
| Preferredstockdividends                                 |  |          | (13,830 | )    |  |          | —    |         |  |         | —  |    |  |   | — |    |  |   | (13,830    | )  |
| Non-cashgain on interest rate arrangements uponmaturity |  |          | — |      |  |          | 6,590      |         |  |         | —  |    |  |   | — |    |  |   | 6,590      |    |
| Equityincome (loss) from affiliates,net                 |  |          | 5,200   |      |  |          | —    |         |  |         | —  |    |  |   | — |    |  |   | 5,200      |    |
| Other,net                                               |  |          | — |      |  |          | (3,440     | )       |  |         | (1,450   | )  |  |   | — |    |  |   | (4,890     | )  |
| Otherexpense,net                                        |  |          | (8,630  | )    |  |          | (53,210    | )       |  |         | (6,580   | )  |  |   | — |    |  |   | (68,420    | )  |
| Income(loss) before incometaxes                         |  |          | (8,630  | )    |  |          | (68,810    | )       |  |         | 39,920   |    |  |   | — |    |  |   | (37,520    | )  |
| Incometax expense(benefit)                              |  |          | — |      |  |          | (26,380    | )       |  |         | 14,650   |    |  |   | — |    |  |   | (11,730    | )  |
| Equityin net income ofsubsidiaries                      |  |          | (17,160 | )    |  |          | 25,270     |         |  |         | —  |    |  |   | (8,110  | )  |  |   | —    |    |
| Earnings(loss) attributable to commonstock              |  | $             | (25,790 | )    |  | $             | (17,160    | )       |  | $            | 25,270   |    |  | $      | (8,110  | )  |  | $      | (25,790    | )  |
|                                                         |

26

----

METALDYNECORPORATIONNOTES TO CONSOLIDATED FINANCIALSTATEMENTS    (Continued)

Guarantor/Non-Guarantor CondensedConsolidating Statement Of Operations Nine Months Ended September28, 2003 (Unaudited) (Restated)

|                                            |  |               |         |           |  |               |          |              |  |              |          |         |  |        |                                                         |         |  |        |           |         |  |  |
|--------------------------------------------|--|---------------|---------|-----------|--|---------------|----------|--------------|--|--------------|----------|---------|--|--------|---------------------------------------------------------|---------|--|--------|-----------|---------|--|--|
|                                       |  | (Inthousands) |
|                                       |  | Parent        |         | Guarantor |  | Non-Guarantor |          | Eliminations |  | Consolidated |
| Netsales                                   |  | $             | — |      |  | $             | 860,130  |         |  | $            | 259,010  |    |  | $      |         — |    |  | $      | 1,119,140 |    |
| Costofsales                                |  |          | — |      |  |          | (787,390 | )       |  |         | (207,460 | )  |  |   | —                                                 |    |  |   | (994,850  | )  |
| Grossprofit                                |  |          | — |      |  |          | 72,740   |         |  |         | 51,550   |    |  |   | —                                                 |    |  |   | 124,290   |    |
| Selling,general and administrativeexpenses |  |          | — |      |  |          | (71,830  | )       |  |         | (12,470  | )  |  |   | —                                                 |    |  |   | (84,300   | )  |
| Restructuringcharges                       |  |          | — |      |  |          | (5,550   | )       |  |         | (1,530   | )  |  |   | —                                                 |    |  |   | (7,080    | )  |
| Operatingprofit                            |  |          | — |      |  |          | (4,640   | )       |  |         | 37,550   |    |  |   | —                                                 |    |  |   | 32,910    |    |
| Otherexpense,net:                          |  |          |    |      |  |          |     |         |  |         |     |    |  |   |                                                    |    |  |   |      |    |
| Interestexpense                            |  |          | — |      |  |          | (50,470  | )       |  |         | (3,420   | )  |  |   | —                                                 |    |  |   | (53,890   | )  |
| Equityincome (loss) from affiliates,net    |  |          | (1,580  | )    |  |          | —  |         |  |         | —  |    |  |   | —                                                 |    |  |   | (1,580    | )  |
| Other,net                                  |  |          | — |      |  |          | (3,130   | )       |  |         | (3,410   | )  |  |   | —                                                 |    |  |   | (6,540    | )  |
| Otherincome (expense),net                  |  |          | (1,580  | )    |  |          | (53,600  | )       |  |         | (6,830   | )  |  |   | —                                                 |    |  |   | (62,010   | )  |
| Income(loss) before incometaxes            |  |          | (1,580  | )    |  |          | (58,240  | )       |  |         | 30,720   |    |  |   | —                                                 |    |  |   | (29,100   | )  |
| Incometax expense(benefit)                 |  |          | — |      |  |          | (14,120  | )       |  |         | 5,360    |    |  |   | —                                                 |    |  |   | (8,760    | )  |
| Equityin net income ofsubsidiaries         |  |          | (18,760 | )    |  |          | 25,360   |         |  |         | —  |    |  |   | (6,600                                                  | )  |  |   | —   |    |
| Netincome(loss)                            |  | $             | (20,340 | )    |  | $             | (18,760  | )       |  | $            | 25,360   |    |  | $      | (6,600                                                  | )  |  | $      | (20,340   | )  |
| Preferredstockdividends                    |  |          | 6,840   |      |  |          | —  |         |  |         | —  |    |  |   | —                                                 |    |  |   | 6,840     |    |
| Earnings(loss) attributable to commonstock |  | $             | (27,180 | )    |  | $             | (18,760  | )       |  | $            | 25,360   |    |  | $      | (6,600                                                  | )  |  | $      | (27,180   | )  |
|                                            |

27

----

METALDYNECORPORATIONNOTES TO CONSOLIDATED FINANCIALSTATEMENTS    (Continued)

Guarantor/Non-Guarantor CondensedConsolidating Statement Of Cash Flows Nine Months Ended October 3,2004 (Unaudited)

|                                                    |  |               |         |           |  |               |          |              |  |              |         |         |  |        |         |        |  |        |          |         |  |  |
|----------------------------------------------------|--|---------------|---------|-----------|--|---------------|----------|--------------|--|--------------|---------|---------|--|--------|---------|--------|--|--------|----------|---------|--|--|
|                                               |  | (Inthousands) |
|                                               |  | Parent        |         | Guarantor |  | Non-Guarantor |          | Eliminations |  | Consolidated |
| Cashflows from operatingactivities:                |  |          |    |      |  |          |     |         |  |         |    |    |  |   |    |   |  |   |     |    |
| Netcash provided by (used for) operatingactivities |  | $             | — |      |  | $             | 83,980   |         |  | $            | 8,010   |    |  | $      | — |   |  | $      | 91,990   |    |
| Cashflows from investingactivities:                |  |          |    |      |  |          |     |         |  |         |    |    |  |   |    |   |  |   |     |    |
| Capitalexpenditures                                |  |          | — |      |  |          | (80,300  | )       |  |         | (24,950 | )  |  |   | — |   |  |   | (105,250 | )  |
| Proceedsfrom sale/leaseback of fixedassets         |  |          | — |      |  |          | 72,530   |         |  |         | — |    |  |   | — |   |  |   | 72,530   |    |
| Proceedson disposition of manufacturingfacilities  |  |          | — |      |  |          | (500     | )       |  |         | — |    |  |   | — |   |  |   | (500     | )  |
| Acquisitionofbusiness                              |  |          | — |      |  |          | (217,850 | )       |  |         | — |    |  |   | — |   |  |   | (217,850 | )  |
| Dispositionof jointventure                         |  |          | — |      |  |          | 1,260    |         |  |         | — |    |  |   | — |   |  |   | 1,260    |    |
| Netcash used for investingactivities               |  |          | — |      |  |          | (224,860 | )       |  |         | (24,950 | )  |  |   | — |   |  |   | (249,810 | )  |
| Cashflows from financingactivities:                |  |          |    |      |  |          |     |         |  |         |    |    |  |   |    |   |  |   |     |    |
| Principalpayments of term loanfacilities           |  |          | — |      |  |          | (880     | )       |  |         | — |    |  |   | — |   |  |   | (880     | )  |
| Proceedsof revolving creditfacility                |  |          | — |      |  |          | 181,960  |         |  |         | — |    |  |   | — |   |  |   | 181,960  |    |
| Principalpayments of revolving creditfacility      |  |          | — |      |  |          | (125,910 | )       |  |         | — |    |  |   | — |   |  |   | (125,910 | )  |
| Proceedsof senior subordinated notes, due2014      |  |          | 31,750  |      |  |          | —  |         |  |         | — |    |  |   | — |   |  |   | 31,750   |    |
| Proceedsof otherdebt                               |  |          | — |      |  |          | —  |         |  |         | 1,220   |    |  |   | — |   |  |   | 1,220    |    |
| Principalpayments of otherdebt                     |  |          | — |      |  |          | (3,550   | )       |  |         | (3,850  | )  |  |   | — |   |  |   | (7,400   | )  |
| Issuanceof Series A-1 preferredstock               |  |          | 64,450  |      |  |          | —  |         |  |         | — |    |  |   | — |   |  |   | 64,450   |    |
| Changein intercompanyaccounts                      |  |          | (96,200 | )    |  |          | 74,890   |         |  |         | 21,310  |    |  |   | — |   |  |   | —  |    |
| Netcash provided by financingactivities            |  |          | — |      |  |          | 126,510  |         |  |         | 18,680  |    |  |   | — |   |  |   | 145,190  |    |
| Netincrease (decrease) incash                      |  |          | — |      |  |          | (14,370  | )       |  |         | 1,740   |    |  |   | — |   |  |   | (12,630  | )  |
| Cashand cash equivalents, beginningofperiod        |  |          | — |      |  |          | 10,750   |         |  |         | 3,070   |    |  |   | — |   |  |   | 13,820   |    |
| Cashand cash equivalents, end ofperiod             |  | $             | — |      |  | $             | (3,620   | )       |  | $            | 4,810   |    |  | $      |         |   |  | $      | 1,190    |    |
|                                                    |

28

----

METALDYNECORPORATIONNOTES TO CONSOLIDATED FINANCIALSTATEMENTS (Concluded)

Guarantor/Non-Guarantor CondensedConsolidating Statement Of Cash Flows Nine Months Ended September28, 2003 (Unaudited) (Restated)

|                                                    |  |               |         |           |  |               |          |              |  |              |         |         |  |        |                                                         |        |  |        |          |         |  |  |
|----------------------------------------------------|--|---------------|---------|-----------|--|---------------|----------|--------------|--|--------------|---------|---------|--|--------|---------------------------------------------------------|--------|--|--------|----------|---------|--|--|
|                                               |  | Parent        |         | Guarantor |  | Non-Guarantor |          | Eliminations |  | Consolidated |
|                                               |  | (Inthousands) |
| Cash flows from operatingactivities:               |  |          |    |      |  |          |     |         |  |         |    |    |  |   |                                                    |   |  |   |     |    |
| Netcash provided by (used for) operatingactivities |  | $             | — |      |  | $             | 52,580   |         |  | $            | (11,780 | )  |  | $      |         — |   |  | $      | 40,800   |    |
| Cashflows from investingactivities:                |  |          |    |      |  |          |     |         |  |         |    |    |  |   |                                                    |   |  |   |     |    |
| Capitalexpenditures                                |  |          | — |      |  |          | (57,490  | )       |  |         | (16,880 | )  |  |   | —                                                 |   |  |   | (74,370  | )  |
| Proceedsfrom sale/leaseback of fixedassets         |  |          | — |      |  |          | 8,460    |         |  |         | — |    |  |   | —                                                 |   |  |   | 8,460    |    |
| Dispositionofbusinesses                            |  |          | — |      |  |          | —  |         |  |         | 22,570  |    |  |   | —                                                 |   |  |   | 22,570   |    |
| Proceedsfrom sale of TriMasshares                  |  |          | 20,000  |      |  |          | —  |         |  |         | — |    |  |   | —                                                 |   |  |   | 20,000   |    |
| Acquisitionof business, net of cashreceived        |  |          | — |      |  |          | (7,650   | )       |  |         | — |    |  |   | —                                                 |   |  |   | (7,650   | )  |
| Investmentin jointventure                          |  |          | — |      |  |          | (20,000  | )       |  |         | — |    |  |   | —                                                 |   |  |   | (20,000  | )  |
| Netcash provided by (used for) investingactivities |  |          | 20,000  |      |  |          | (76,680  | )       |  |         | 5,690   |    |  |   | —                                                 |   |  |   | (50,990  | )  |
| Cashflows from financingactivities:                |  |          |    |      |  |          |     |         |  |         |    |    |  |   |                                                    |   |  |   |     |    |
| Principalpayments of term loanfacilities           |  |          | — |      |  |          | (1,000   | )       |  |         | — |    |  |   | —                                                 |   |  |   | (1,000   | )  |
| Proceedsof revolving creditfacility                |  |          | — |      |  |          | 180,000  |         |  |         | — |    |  |   | —                                                 |   |  |   | 180,000  |    |
| Principalpayments of revolving creditfacility      |  |          | — |      |  |          | (180,000 | )       |  |         | — |    |  |   | —                                                 |   |  |   | (180,000 | )  |
| Proceedsof otherdebt                               |  |          | — |      |  |          | —  |         |  |         | 1,660   |    |  |   | —                                                 |   |  |   | 1,660    |    |
| Principalpayments of otherdebt                     |  |          | — |      |  |          | (3,030   | )       |  |         | (4,320  | )  |  |   | —                                                 |   |  |   | (7,350   | )  |
| Capitalizationof debt financing fees               |  |          | — |      |  |          | (2,250   | )       |  |         | — |    |  |   | —                                                 |   |  |   | (2,250   | )  |
| Changein intercompanyaccounts                      |  |          | (20,000 | )    |  |          | 15,770   |         |  |         | 4,230   |    |  |   | —                                                 |   |  |   | —  |    |
| Netcash provided by (used for) financingactivities |  |          | (20,000 | )    |  |          | 9,490    |         |  |         | 1,570   |    |  |   | —                                                 |   |  |   | (8,940   | )  |
| Netincrease (decrease) incash                      |  |          | — |      |  |          | (14,610  | )       |  |         | (4,520  | )  |  |   | —                                                 |   |  |   | (19,130  | )  |
| Cashand cash equivalents, beginning ofperiod       |  |          | — |      |  |          | 14,610   |         |  |         | 4,520   |    |  |   | —                                                 |   |  |   | 19,130   |    |
| Cashand cash equivalents, end ofperiod             |  | $             | — |      |  | $             | —  |         |  | $            | — |    |  | $      | —                                                 |   |  | $      | —  |    |
|                                                    |

29

----

|              |                                                                                      |
|--------------|--------------------------------------------------------------------------------------|
| ITEM2.  | MANAGEMENT'S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS |

ExecutiveSummary

We are a leading global manufacturer of highlyengineered metal components for the global light vehicle market with2003 sales of approximately $1.5 billion. We operate three segmentsfocused on the global light vehicle market. The Chassis, Driveline andEngine segments manufacture, design, engineer and assemble metal-formedand precision-engineered components and modular systems used in thetransmissions, engines and chassis of vehicles. We serve approximately200 automotive and industrial customers and our top ten customersrepresent approximately 65% of total 2003 sales. Prior toNovember 2000, we were a public company. Since we were acquired inNovember 2000 by a private investor group, we have actively pursuedopportunities for internal growth and strategic acquisitions that wereunavailable to us when the majority of our shares were publicly traded.Since November 2000, we have completed four acquisitions —Simpson in December 2000, GMTI effective January 2001, DanaCorporation's Greensboro, NC operation in May 2003, andDaimlerChrysler's New Castle operation at the beginning of ourfiscal 2004. Each of these acquisitions has added to the full service,integrated metal supply capabilities of our automotive operations.Additionally we split off our non-automotive operations, divesting ourformer TriMas subsidiary in June 2002 and our Fittings operation inApril 2003.

As discussed elsewhere in this filing or in our 2003Form 10K, an independent investigation into certain accounting mattersat the Company was completed in late September 2004. TheCompany's quarterly financial information for the first threefiscal quarters of 2003 have been restated to reflect adjustments tothe Company's previously reported financial information on Form10-Q for the first three fiscal quarters of 2003. The restatement aroseprimarily out of information obtained through an independentinvestigation. The investigation was initiated as a result of certainallegations made by an employee of the Company and information obtainedby the Company's internal audit staff. This investigationexpanded beyond its initial allegations into overstatements andunderstatements of income at the Company's Sintered Division intoaccounting practices in other areas of the Company concerning the useof reserves and accrual accounts and the recognition of tooling income.Refer to Item 4 for a discussion of the investigation, its findings andactions taken and to be taken by the Company in responsethereto.

Key Factors Affectingour Reported Results

We operate in extremely competitivemarkets. Our customers select us based upon numerous factors includingtechnology, quality and price. Supplier selection is generallyfinalized several years prior to the start of vehicle production, andas a result business that we win will generally not start productionfor two years or beyond. In addition, our results are heavily dependenton global vehicle production, and in particular the North Americanvehicle production of the Big 3 domestic manufacturers (GM, Ford, andDaimlerChrysler). Our customers generally require that we offer annualproductivity and efficiency related price decreases on products we sellthem. Critical factors to be successful in this market include globallow cost production facilities, leading service and parts quality, anddifferentiated product and process technology. Thus, we focus onmanaging our global manufacturing footprint in line with our customerneeds and local market manufacturing cost differences, improvingoperating efficiency and production quality of our plants, fixing oreliminating unprofitable facilities and reducing our overall materialcosts. In addition, we spend considerable time and resources developingnew technology and products to enhance performance and/or decrease costof the products we sell to our customers. See "Results ofOperations" for more details as to the factors that driveyear over year performance.

The rise in material costs,especially steel, continues to negatively impact our results. This andother increases in our raw material costs increased our cost of goodssold by approximately $29 million through the third quarter of 2004(approximately $20 million related to steel increases). Note that thesteel price increases primarily relate to our Forging operations withinthe Driveline Group 

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while the remaining increases are spreadacross all of our other businesses and is related to numerous rawmaterial increases such as energy, Molybdenum and casting components wepurchase. Raw material costs have continued to increase throughout theyear and we currently expect these costs to increase our cost of goodssold by approximately $53 million in 2004. However, we currentlyanticipate recovering approximately $30 million of this increasethrough steel scrap sales, steel resourcing efforts and negotiated orcontractual price recovery from our customers. Our ability to fullyexecute this recovery, though, is not guaranteed. Additionally, itappears that raw material costs will continue to increase in 2005 andalthough we have initiatives in place to offset these expectedincreases, there is no guarantee that these efforts will besuccessful.

Our strategy is centered on growth through newbusiness awards and acquisitions. We have a significant new projectbacklog and have completed several recent acquisitions that we believewill enable us to better serve our customer base and provide enhancedreturns for our stakeholders. In order to finance a large portion ofthis activity, we incurred significant new debt. As such, we havesignificant leverage and are constrained by various covenantlimitations (see "— FinancialCovenants" for more details surrounding these covenants).As we continue to invest in the resources to produce our new businessbacklog and thus grow our business, a significant portion of ouroperating cash flow will be used to buy new capital equipment, expandproduction capacity and invest in new technology in addition toservicing principal and interest payments on our debt obligations.Therefore, we are focused on our cash generation ability.

Netsales for the first nine months of 2004 net sales were $1,505 millionversus $1,119 million for the first nine months of 2003 (as restated).The primary source of the increase in our 2004 sales was our New Castleacquisition, which contributed $327 million in the first nine months of2004. In addition, we had approximately $87 million in additionalvolume related to new product launches and ramp up of existing programsas well as a $22 million benefit from foreign exchange movements.However, these increases were partially offset by approximately $46million related to our divestiture of two aluminum die castingfacilities within our Driveline segment and a 3.3% decrease inNorth American vehicles production from our three largest customers(Ford, GM and DaimlerChrysler). Operating profit for the first ninemonths decreased from $32.9 million in 2003 (as restated) to $30.9million in 2004. Our 2004 operating profit decreased despite anapproximate $16 million contribution from our New Castle acquisitionand improvements in our Engine segment driven primarily by increasedsales activity due to an approximate $15 million in fees and expensesrelating to the Independent Investigation described in Note 2 to theconsolidated financial statements included herein and a $7.6 millioncharge taken in connection with our divestiture of two manufacturingfacilities within our Driveline segment.

Key Indicators ofPerformance (Non-GAAP Financial Measures)

In evaluating ourbusiness, our management considers Adjusted EBITDA as a key indicatorof financial operating performance and as a measure of cash generatingcapability.

We define Adjusted EBITDA as net income (loss)before cumulative effect of accounting change and before interest,taxes, depreciation, amortization, asset impairment, preferred stockdividends, non-cash losses on sale-leaseback of property and equipmentand non-cash restricted stock award expense. In evaluating AdjustedEBITDA, our management deems it important to consider the quality ofour underlying earnings by separately identifying certain costsundertaken to improve our results, such as costs related toconsolidating facilities and business in an effort to eliminateduplicative costs or achieve efficiencies, costs related to integratingacquisitions and restructuring costs related to expense reductionefforts. Although our consolidation, restructuring and integrationefforts are continuing and driven in part by our acquisition activity,our management eliminates these costs to evaluate underlying businessperformance. Caution must be exercised in eliminating these items asthey include substantially (but not necessarily entirely) cash costsand there can be no assurance that we will ultimately realize thebenefits of these efforts. Moreover, even if the anticipated benefitsare realized, they may be offset by other business performance orgeneral economic issues.

We use Adjusted EBITDA as a keyperformance measure because we believe it facilitates operatingperformance comparisons from period to period and company to company bybacking out 

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potential differences caused by variations incapital structures (affecting interest expense), tax positions (such asthe impact on periods or companies of changes in effective tax rates ornet operating losses) and the impact of purchase accounting and SFASNo. 142 (affecting depreciation and amortization expense). BecauseAdjusted EBITDA facilitates internal comparisons of our historicaloperating performance on a more consistent basis, we also use AdjustedEBITDA for business planning purposes, to incent and compensate ourmanagement personnel, in measuring our performance relative to that ofour competitors and in evaluating acquisition opportunities. Inaddition, we believe Adjusted EBITDA or similar measures are widelyused by investors, securities analysts, ratings agencies and otherinterested parties as a measure of financial performance anddebt-service capabilities. Our use of Adjusted EBITDA has limitationsas an analytical tool, and you should not consider it in isolation oras a substitute for analysis of our results as reported under GAAP.Some of these limitations are:

|              |                                                                                            |
|--------------|--------------------------------------------------------------------------------------------|
| •  | It does not reflect our cashexpenditures for capital equipment or contractual commitments; |

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|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Although depreciation andamortization are non-cash charges, the assets being depreciated andamortized may have to be replaced in the future, and Adjusted EBITDAdoes not reflect cash requirements for such replacements; |

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|--------------|-------------------------------------------------------------------------------------|
| •  | It does not reflect changes in,or cash requirements for, our working capital needs; |

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|--------------|------------------------------------------------------------------------------------------------------------------------------------------|
| •  | It does not reflect the interestexpense or the cash requirements necessary to service interest orprincipal payments on our indebtedness; |

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|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | It includes amounts resultingfrom matters we consider not to be indicative of underlying performanceof our fundamental business operations, as discussed in"Management's Discussion and Analysis of FinancialCondition and Results of Operations"; and |

|              |                                                                                                                                                              |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Other companies, includingcompanies in our industry, may calculate these measures differentlythan we do, limiting their usefulness as a comparative measure. |

Because of these limitations, Adjusted EBITDA should not beconsidered a measure of discretionary cash available to us to invest inthe growth of our business. We compensate for these limitations byrelying primarily on our GAAP results and using Adjusted EBITDA onlysupplementally. We carefully review our operating profit margins(operating profit as a percentage of net sales) at a segment level,which are discussed in detail in our year-to-year comparison ofoperating results.

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The following is a reconciliation of ourAdjusted EBITDA to net loss for the three and nine months ended October3, 2004 and September 28, 2003 (asrestated):

|                                                       |  |                   |         |                  |  |        |         |            |  |        |         |         |  |        |         |         |  |  |
|-------------------------------------------------------|--|-------------------|---------|------------------|--|--------|---------|------------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                                  |  | (Inthousands)     |
|                                                  |  | Three MonthsEnded |         | Nine MonthsEnded |
|                                                  |  | 2004              |         | 2003             |  | 2004   |         | 2003       |
|                                                  |  |              |         | (Restated)       |  |   |         | (Restated) |
| Netloss                                               |  | $                 | (17,370 | )           |  | $      | (10,340 | )     |  | $      | (25,790 | )  |  | $      | (20,340 | )  |
| Incometaxbenefit                                      |  |              | (11,860 | )           |  |   | (4,810  | )     |  |   | (11,730 | )  |  |   | (8,760  | )  |
| Interestexpense                                       |  |              | 21,740  |             |  |   | 18,690  |       |  |   | 61,490  |    |  |   | 53,890  |    |
| Depreciationand amortization in operatingprofit       |  |              | 31,360  |             |  |   | 26,060  |       |  |   | 95,360  |    |  |   | 78,300  |    |
| Non-cashstock awardexpense                            |  |              | 130     |             |  |   | 950     |       |  |   | 600     |    |  |   | 2,480   |    |
| Preferredstockdividends                               |  |              | 4,860   |             |  |   | — |       |  |   | 13,830  |    |  |   | — |    |
| Non-cashgain on maturity of interest ratearrangements |  |              | — |             |  |   | — |       |  |   | (6,590  | )  |  |   | — |    |
| Losson disposition of manufacturingfacilities         |  |              | — |             |  |   | — |       |  |   | 7,600   |    |  |   | — |    |
| Equity(gain) loss fromaffiliates                      |  |              | (760    | )           |  |   | (1,130  | )     |  |   | (5,200  | )  |  |   | 1,580   |    |
| Certainitems within Other,Net(1)                      |  |              | 1,430   |             |  |   | 1,010   |       |  |   | 5,250   |    |  |   | 4,560   |    |
| AdjustedEBITDA                                        |  | $                 | 29,530  |             |  | $      | 30,430  |       |  | $      | 134,820 |    |  | $      | 111,710 |    |
|                                                       |

|  |
|--|
|  |  |
|  |

|     |                               |
|-----|-------------------------------|
| (1) | Reconciliationof OtherExpense |

|                                                                                                                       |  |                   |       |                  |  |        |       |            |  |        |       |         |  |        |       |        |  |  |
|-----------------------------------------------------------------------------------------------------------------------|--|-------------------|-------|------------------|--|--------|-------|------------|--|--------|-------|---------|--|--------|-------|--------|--|--|
|                                                                                                                  |  | (Inthousands)     |
|                                                                                                                  |  | Three MonthsEnded |       | Nine MonthsEnded |
|                                                                                                                  |  | 2004              |       | 2003             |  | 2004   |       | 2003       |
|                                                                                                                  |  |              |       | (Restated)       |  |   |       | (Restated) |
| Itemsdeducted from net loss in determining Adjusted EBITDA (amortization offinancing fees and A/R securitizationfees) |  | $                 | 1,430 |             |  | $      | 1,010 |       |  | $      | 5,250 |    |  | $      | 4,560 |   |
| Itemsincluded in determining Adjusted EBITDA (includes foreign currency,royalties and interestincome)                 |  |              | 40    |             |  |   | (240  | )     |  |   | (360  | )  |  |   | 1,980 |   |
| Totalother,net                                                                                                        |  | $                 | 1,470 |             |  | $      | 770   |       |  | $      | 4,890 |    |  | $      | 6,540 |   |
|                                                                                                                       |

Thefollowing details certain items relating to our consolidation,restructuring and integration efforts and other charges not eliminatedin determining Adjusted EBITDA, but that we would eliminate inevaluating the quality of our AdjustedEBITDA:

|                               |  |                   |        |                  |  |        |         |            |  |        |         |         |  |        |         |         |  |  |
|-------------------------------|--|-------------------|--------|------------------|--|--------|---------|------------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                          |  | (Inthousands)     |
|                          |  | Three MonthsEnded |        | Nine MonthsEnded |
|                          |  | 2004              |        | 2003             |  | 2004   |         | 2003       |
|                          |  |              |        | (Restated)       |  |   |         | (Restated) |
| Restructuringcharges          |  | $                 | (220   | )           |  | $      | (3,220  | )     |  | $      | (1,930  | )  |  | $      | (7,080  | )  |
| Fixedasset disposallosses     |  |              | (790   | )           |  |   | — |       |  |   | (1,540  | )  |  |   | (2,220  | )  |
| Foreigncurrency gains(losses) |  |              | 160    |             |  |   | 260     |       |  |   | (560    | )  |  |   | (1,170  | )  |
| IndependentInvestigationfees  |  |              | (8,600 | )           |  |   | — |       |  |   | (15,030 | )  |  |   | — |    |
|                               |

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Results of Operations

QuarterEnded October 3, 2004 versus September 28, 2003 (As Restated)

Net Sales.    Net sales by segment and in totalfor the three months ended October 3, 2004 and September 28, 2003 (asrestated)were:

|                                      |  |                                  |         |                                     |  |        |         |        |  |  |
|--------------------------------------|--|----------------------------------|---------|-------------------------------------|--|--------|---------|--------|--|--|
|                                 |  | (Inthousands)                    |
|                                 |  | Three MonthsEndedOctober 3, 2004 |         | Three Months EndedSeptember 28,2003 |
|                                 |  |                             |         | (Restated)                          |
| **Segment**                          |  |                             |    |                                |  |   |    |   |
| ChassisSegment                       |  | $                                | 148,480 |                                |  | $      | 31,170  |   |
| DrivelineSegment                     |  |                             | 198,840 |                                |  |   | 186,710 |   |
| EngineSegment                        |  |                             | 154,360 |                                |  |   | 128,800 |   |
|     TotalCompany |  | $                                | 501,680 |                                |  | $      | 346,680 |   |
|                                      |

Ourthird quarter 2004 net sales were $502 million versus third quarter2003 (as restated) net sales of $347 million. The primary source of theincrease in our 2004 sales was our New Castle acquisition, whichcontributed $115 million in the third quarter of 2004. In addition wehad approximately $50 million in additional volume related to newproduct launches and ramp up of existing programs, a $5 million benefitfrom foreign exchange movements, and approximately $3 million of priceincreases (net of price reductions we regularly provide our customersrelated to the ongoing productivity improvements in our manufacturingprocesses). However, these increases were partially offset by anapproximate $14 million decrease related to our divestiture of twoaluminum die casting facilities within our Driveline segment and a3.8% decrease in North American vehicles production from ourthree largest customers (Ford, General Motors and DaimlerChrysler). Thespecific sales differences are further explained in the segmentinformation section.

Gross profit.    Grossprofit by segment and in total for the three months ended October 3,2004 and September 28, 2003 (as restated)were:

|                                |  |                                  |        |                                     |  |        |        |         |  |  |
|--------------------------------|--|----------------------------------|--------|-------------------------------------|--|--------|--------|---------|--|--|
|                           |  | (Inthousands)                    |
|                           |  | Three MonthsEndedOctober 3, 2004 |        | Three Months EndedSeptember 28,2003 |
|                           |  |                             |        | (Restated)                          |
| **Segment**                    |  |                             |   |                                |  |   |   |    |
| ChassisSegment                 |  | $                                | 7,640  |                                |  | $      | 2,580  |    |
| DrivelineSegment               |  |                             | 10,270 |                                |  |   | 16,720 |    |
| EngineSegment                  |  |                             | 20,160 |                                |  |   | 16,460 |    |
| Corporate/centralizedresources |  |                             | (3,890 | )                              |  |   | (2,340 | )  |
| TotalCompany                   |  | $                                | 34,180 |                                |  | $      | 33,420 |    |
|                                |

Ourgross profit was $34.2 million, or 6.8% of net sales for 2004compared to $33.4 million, or 9.6% of net sales for 2003 (asrestated). The $0.8 million increase was primarily due to the salesincrease noted above. The 2.8% margin decline is primarilyexplained by a $6 million year over year decline in our North Americanforging operation (primarily related to an approximate $9 millionincrease in steel prices during the third quarter offset byapproximately $3 million in price increases to our customers), which ispart of our Driveline segment, and an approximate $4 million of otherraw material price increases across all our businesses for commoditiessuch as energy, casting components, and Molybdenum.

Selling, General andAdministrative.    Selling, general and administrative expenseswere $35.9 million or 7.2% of net sales for 2004 compared to$27.0 million, or 7.8% of net sales for 2003. The $8.9 millionincrease from 2003 to 2004 is primarily related to approximately $9million of expense associated with the Independent Investigationdescribed in Note 2 to the consolidated financial statements includedherein. These expenses relate to fees paid to our bank group forwaivers, 

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professional fees and severance expense forindividuals terminated as a result of the Independent Investigation. Inaddition, higher health care expenses for the quarter were offset byother one-time benefits recognized in the quarter. The reduction inselling, general and administrative expenses as a percentage of netsales reflects the benefits from restructuring efforts initiated in2003 and the fact that the New Castle facility was able to integrateinto our operation without significant additional investment in theseactivities.

Depreciation andAmortization.    Depreciation and amortization expense bysegment and in total for the three months ended October 3, 2004 andSeptember 28, 2003 (as restated)were:

|                                |  |                                  |        |                                     |  |        |        |        |  |  |
|--------------------------------|--|----------------------------------|--------|-------------------------------------|--|--------|--------|--------|--|--|
|                           |  | (Inthousands)                    |
|                           |  | ThreeMonths EndedOctober 3, 2004 |        | Three Months EndedSeptember 28,2003 |
|                           |  |                             |        | (Restated)                          |
| **Segment**                    |  |
| ChassisSegment                 |  | $                                | 7,030  |                                |  | $      | 1,690  |   |
| DrivelineSegment               |  |                             | 11,910 |                                |  |   | 13,490 |   |
| EngineSegment                  |  |                             | 9,030  |                                |  |   | 8,550  |   |
| Corporate/centralizedresources |  |                             | 3,390  |                                |  |   | 2,330  |   |
| TotalCompany                   |  | $                                | 31,360 |                                |  | $      | 26,060 |   |
|                                |

Thenet increase in depreciation and amortization of approximately $5.3million is principally explained by $4.9 million of depreciation andamortization expense associated with our New Castle acquisition.

Restructuring Charges.    We incurred $0.2million of restructuring charges in the third quarter of 2004 comparedto $3.2 million incurred in the third quarter of 2003. Of the 2004charges, approximately $0.1 million related to our Driveline segment,where the majority of the charge related to headcount reductions in ourForging operation. An additional $0.1 million relates to costs toreduce headcount in our Corporate center. Net restructuring activity inthe second quarter of 2004 is asfollows:

|                          |  |                |        |         |  |  |
|--------------------------|--|----------------|--------|---------|--|--|
|                     |  | (Inthousands)  |
|                     |  | SeveranceCosts |
| Balance June 27,2004     |  | $              | 5,650  |    |
| Charges toexpense        |  |           | 220    |    |
| Cashpayments             |  |           | (1,460 | )  |
| Balanceat October 3,2004 |  | $              | 4,410  |    |
|                          |

OperatingProfit.    Operating loss was $1.9 million for the third quarterof 2004 compared to an operating proft of $3.2 million for the sameperiod in 2003 (as restated). The $5.1 million decrease is principallyexplained by an approximate $3 million contribution from our New Castleacquisition (before corporate expense allocations to the segmentsrelating to services performed at Corporate for the benefit of theoperations), approximately $3 million decrease in restructuringexpense, and $9 million from new launches and ramp up from existingprograms. However, these improvements were offset by $6 millionreduction from our forging operations (primarily related to anapproximate $9 million increase in steel prices during the secondquarter), an approximate $4 million increase in raw material costsother than steel across all our business, and approximately $9 millionin fees and expenses for professional services provided related to theIndependent Investigation and restatement described in Note 2 to theconsolidated financial statements included herein. These items arefurther explained in the sections above and in the segment discussionthat follows. Operating profit by segment for the three months endedOctober 3, 2004 and September 28, 2003 (as restated) is as follows:

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|                                |  |                                  |         |                                     |  |        |        |         |  |  |
|--------------------------------|--|----------------------------------|---------|-------------------------------------|--|--------|--------|---------|--|--|
|                           |  | (Inthousands)                    |
|                           |  | Three MonthsEndedOctober 3, 2004 |         | Three Months EndedSeptember 28,2003 |
|                           |  |                             |         | (Restated)                          |
| **Segment**                    |  |                             |    |                                |  |   |   |    |
| ChassisSegment                 |  | $                                | 4,070   |                                |  | $      | 800    |    |
| DrivelineSegment               |  |                             | (1,820  | )                              |  |   | 3,010  |    |
| EngineSegment                  |  |                             | 10,000  |                                |  |   | 5,500  |    |
| Corporate/centralizedresources |  |                             | (14,170 | )                              |  |   | (6,130 | )  |
| TotalCompany                   |  | $                                | (1,920  | )                              |  | $      | 3,180  |    |
|                                |

AdjustedEBITDA.    Management reviews our segment operating resultsbased upon the Adjusted EBITDA definition as discussed in the"Key Indicators of Performance (Non-GAAP FinancialMeasures)" section. Accordingly, we have separatelypresented such amounts in the table below. Adjusted EBITDA decreased to$29.5 million in 2004 from $30.4 million in 2003 (as restated). Theprimary drivers of this decrease are explained above in the operatingprofit and depreciation and amortization discussions, and will befurther detailed in the segment detail that follows. Additionally, in"Segment Information" below, we provide areconciliation between Adjusted EBITDA and operatingprofit.

|                                                                                            |  |                                  |         |                                     |  |        |         |         |  |  |
|--------------------------------------------------------------------------------------------|--|----------------------------------|---------|-------------------------------------|--|--------|---------|---------|--|--|
|                                                                                       |  | (Inthousands)                    |
|                                                                                       |  | Three MonthsEndedOctober 3, 2004 |         | Three Months EndedSeptember 28,2003 |
|                                                                                       |  |                             |         | (Restated)                          |
| **Segment**                                                                                |  |
| ChassisSegment                                                                             |  | $                                | 11,100  |                                |  | $      | 2,490   |    |
| DrivelineSegment                                                                           |  |                             | 10,200  |                                |  |   | 16,720  |    |
| EngineSegment                                                                              |  |                             | 19,030  |                                |  |   | 14,050  |    |
| Corporate/centralizedresources                                                             |  |                             | (10,800 | )                              |  |   | (2,830  | )  |
| TotalCompany                                                                               |  | $                                | 29,530  |                                |  | $      | 30,430  |    |
| Memo:Fixed asset losses included in calculation of both operating profit andAdjustedEBITDA |  | $                                | (790    | )                              |  | $      | — |    |
| Memo:Other, net gain (loss) included in calculation of AdjustedEBITDA                      |  | $                                | (40     | )                              |  | $      | 240     |    |
|                                                                                            |

InterestExpense.    Interest expense increased from $18.7 million in thethird quarter of 2003 (as restated) to approximately $21.7 million in2004. The increase is principally due to $0.8 million in interestarising from the 10% senior subordinated notes from our NewCastle acquisition and $3.8 million in interest arising from our10% senior notes issued in October 2003. These increases wereoffset by a decrease of $1.1 million in interest expense related to theredemption of the $98.5 million outstanding balance on the 4.5%subordinated debentures and a decrease of $0.6 million in interestexpense related to the repayment of $46.6 million of term loan debt inthe fourth quarter of 2003.

Equity Earnings (Loss)from Affiliates.    Equity earnings from affiliates were $0.8million in the third quarter of 2004. The decline versus our thirdquarter 2003 income of $1.1 million reflects a slight decline in theoperating results of our equity affiliates.

Other,Net.    Other, net was a loss of $1.5 million in the thirdquarter of 2004 versus a loss of approximately $0.8 million in thethird quarter of 2003 (as restated). The increase is primarily due toadditional debt fee amortization expense and an increase in fees forthe accounts receivable securitization facility due to additional usageof the facility during the quarter compared to the prior year.

Preferred Stock Dividends.    Preferred stockdividends were $4.9 million in the third quarter of 2004 as compared to$2.3 million for the same period in 2003. This increase is due todividends on the $64.5 million of preferred stock issued in connectionwith the New Castle acquisition and compounded interest on preexistingpreferred stock. Due to our adoption of SFAS No. 150,"Accounting for 

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Certain Financial Instruments withCharacteristics of both Liabilities and Equity" in thefirst quarter of 2004, preferred stock dividends are included as otherexpense, net on our consolidated statement of operations beginning in2004.

Taxes.     The provision for incometaxes for the third quarter of 2004 was a benefit of $11.9 million ascompared with a benefit of $4.8 million for the third quarter of 2003(as restated). The primary reasons for the Company's effectivetax rate being different from its statutory rate are non-deductiblepreferred stock dividends, foreign losses for which tax benefits arenot recognized and foreign tax rates in excess of the U.S. rate as wellas the provision for unremitted earnings of a foreign subsidiary. Inaddition, in July 2004, the Company received a $27 million tax refundfrom the IRS that resulted from a claim filed by the Company in 2002.This claim was based on a 2002 change in the U.S. Treasury Regulations,which permitted the Company to utilize a previously disallowed capitalloss that primarily resulted from the sale of a subsidiary in 2000. Theamount received in excess of the refund previously recorded wasconsidered in the tax provision for the third quarter of 2004.

Segment Information

ChassisSegment.    Sales for our Chassis Segment increased in the thirdquarter of 2004 to $148.5 million versus $31.2 million in the priorperiod (as restated). The primary driver of the approximate $117million increase in sales was the New Castle acquisition, whichcontributed $115 million during the period. Adjusted EBITDA for thesegment increased from $2.5 million in the third quarter of 2003 (asrestated) to $11.1 million in 2004. The increase is primarily due to anapproximate $8 million increase from our New Castle acquisition(results are net of approximately $2.5 million in operating leases usedto finance the acquisition). Approximately $2.5 million in raw materialcost increases for this group were primarily offset by cost reductionactivities within the operations. Operating profit increased by $3.3million in the third quarter of 2004 primarily due to the above factorsand reflects an increase of $5.3 million in depreciation andamortization expense that primarily relates to the New Castleacquisition.

|                                                                                           |  |                                  |         |                                      |  |        |         |        |  |  |
|-------------------------------------------------------------------------------------------|--|----------------------------------|---------|--------------------------------------|--|--------|---------|--------|--|--|
|                                                                                      |  | (Inthousands)                    |
|                                                                                      |  | Three MonthsEndedOctober 3, 2003 |         | Three Months Ended September 28,2003 |
|                                                                                      |  |                             |         | (Restated)                           |
| **ChassisSegment**                                                                        |  |
| Sales                                                                                     |  | $                                | 148,480 |                                 |  | $      | 31,170  |   |
| Operatingprofit                                                                           |  | $                                | 4,070   |                                 |  | $      | 800     |   |
| Depreciation andamortization                                                              |  |                             | 7,030   |                                 |  |   | 1,690   |   |
| AdjustedEBITDA                                                                            |  | $                                | 11,100  |                                 |  | $      | 2,490   |   |
| Memo:Fixed asset gains included in calculation of both operating profit andAdjustedEBITDA |  | $                                | 370     |                                 |  | $      | — |   |
|                                                                                           |

DrivelineSegment.    Sales for our Driveline segment were $198.8 millionin the second quarter of 2004 versus $186.7 million in 2003 (asrestated). Sales decreased $14 million related to the divestiture oftwo aluminum die casting facilities but was more than offset by a $3million benefit in foreign exchange fluctuations, $23 million benefitfrom new launches and ramp up of existing business and approximately $3million in net price increases from its customers. The remaining effectwas a reduction in sales primarily related to the 3.8% decreasein North American production volumes from our Big 3 customers in 2004versus the comparable period in 2003. Adjusted EBITDA for the segmentdecreased to $10.2 million from $16.7 million in the prior year.Approximately $6 million of the decrease relates to our forgingoperation's issues surrounding steel price increases (approximate$9 million increase during the second quarter offset by an approximate$3 million net customer price increase). The remaining decrease inAdjusted EBITDA is explained by a $0.5 million fixed asset disposalloss in 2004 versus no losses in the comparable period. Operatingprofit decreased from $3.0 million in 2003 (as restated) to a loss of$1.8 million in 2004. Offsetting the factors discussed above

37

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influencing Adjusted EBITDA, depreciation andamortization expense decreases by approximately $1.6 million in 2004versus 2003.

|                                                                                            |  |                                  |         |                                    |  |        |         |        |  |  |
|--------------------------------------------------------------------------------------------|--|----------------------------------|---------|------------------------------------|--|--------|---------|--------|--|--|
|                                                                                       |  | (Inthousands)                    |
|                                                                                       |  | ThreeMonths EndedOctober 3, 2004 |         | Three Months EndedSeptember28,2003 |
|                                                                                       |  |                             |         | (Restated)                         |
| **DrivelineSegment**                                                                       |  |
| Sales                                                                                      |  | $                                | 198,840 |                               |  | $      | 186,710 |   |
| Operatingprofit                                                                            |  | $                                | (1,820  | )                             |  | $      | 3,010   |   |
| Depreciationandamortization                                                                |  |                             | 11,910  |                               |  |   | 13,490  |   |
| Non-cashrestricted stock awardexpense                                                      |  |                             | 110     |                               |  |   | 220     |   |
| AdjustedEBITDA                                                                             |  | $                                | 10,200  |                               |  | $      | 16,720  |   |
| Memo:Fixed asset losses included in calculation of both operating profit andAdjustedEBITDA |  | $                                | (500    | )                             |  | $      | — |   |
|                                                                                            |

EngineSegment.    Sales for our Engine Segment increased to $154.4million in the third quarter of 2004 or 20% over 2003 (asrestated) sales of $128.8 million**.**The $25.6 million increaseprimarily reflects approximately $26 million in additional volume fromnew product launches and a $2 million benefit related to foreignexchange movements. Adjusted EBITDA increased from $14.1 million in thethird quarter of 2003 (as restated) to $19.0 million in 2004. Theincrease primarily relates to profit from the additional $26 millionsales volume discussed above but was slightly offset by an increase of$0.4 million in fixed asset disposal losses in 2004. Approximately $1.3million in raw material cost increases for this group were primarilyoffset by profit on incremental sales volume and cost reductionactivities within the operations. Operating profit increased to $10.0million in the third quarter of 2004 from $5.5 million in 2003 (asrestated). In addition to the factors discussed above, operating profitwas negatively affected by a $0.5 million increase in depreciation andamortizationexpense.

|                                                                                            |  |                                  |         |                                    |  |        |         |        |  |  |
|--------------------------------------------------------------------------------------------|--|----------------------------------|---------|------------------------------------|--|--------|---------|--------|--|--|
|                                                                                       |  | (Inthousands)                    |
|                                                                                       |  | ThreeMonths EndedOctober 3, 2004 |         | Three Months EndedSeptember28,2003 |
|                                                                                       |  |                             |         | (Restated)                         |
| **EngineSegment**                                                                          |  |
| Sales                                                                                      |  | $                                | 154,360 |                               |  | $      | 128,800 |   |
| Operatingprofit                                                                            |  | $                                | 10,000  |                               |  | $      | 5,500   |   |
| Depreciationandamortization                                                                |  |                             | 9,030   |                               |  |   | 8,550   |   |
| AdjustedEBITDA                                                                             |  | $                                | 19,030  |                               |  | $      | 14,050  |   |
| Memo:Fixed asset losses included in calculation of both operating profit andAdjustedEBITDA |  | $                                | (380    | )                             |  | $      | — |   |
|                                                                                            |

Corporate/CentralizedResources.    Adjusted EBITDA for Corporate/CentralizedResources was a loss of $10.8 million in the third quarter of 2004versus a loss of $2.8 million in the prior period (as restated). Thisincreased loss is primarily attributable to the approximate $9 millionin fees incurred in the quarter surrounding the IndependentInvestigation described in Note 2 to the consolidated financialstatements included herein. After adjusting for these one-time fees,Corporate expenses decreased by approximately $0.6 million. Thisreduction is principally explained by restructuring activitiesinitiated in 2003, but is somewhat offset by additional losses of $0.3million related to fixed asset disposals and an approximate decrease inother net income of $0.3 million. Operating profit decreased by $8.0million in 2004, which is explained by the factors described above andan increase of approximately $1.1 million in depreciation andamortization expense.

38

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|                                                                                            |  |                                  |         |                                     |  |        |         |         |  |  |
|--------------------------------------------------------------------------------------------|--|----------------------------------|---------|-------------------------------------|--|--------|---------|---------|--|--|
|                                                                                       |  | (Inthousands)                    |
|                                                                                       |  | Three MonthsEndedOctober 3, 2004 |         | Three Months EndedSeptember 28,2003 |
|                                                                                       |  |                             |         | (Restated)                          |
| **Corporate/CentralizedResources**                                                         |  |
| Operatingprofit                                                                            |  | $                                | (14,170 | )                              |  | $      | (6,130  | )  |
| Non-cashstock awardexpense                                                                 |  |                             | 20      |                                |  |   | 730     |    |
| Depreciation andamortization                                                               |  |                             | 3,390   |                                |  |   | 2,330   |    |
| Other,net                                                                                  |  |                             | (40     | )                              |  |   | 240     |    |
| AdjustedEBITDA                                                                             |  | $                                | (10,800 | )                              |  | $      | (2,830  | )  |
| Memo:Fixed asset losses included in calculation of both operating profit andAdjustedEBITDA |  | $                                | (280    | )                              |  | $      | — |    |
| Memo:Other, net income (loss) included in calculation of AdjustedEBITDA                    |  | $                                | (40     | )                              |  | $      | 240     |    |
|                                                                                            |

NineMonths Ended October 3, 2004 versus September 28, 2003 (AsRestated)

Net Sales.    Net sales bysegment and in total for the nine months ended October 3, 2004 andSeptember 28, 2003 (as restated)were:

|                  |  |                                 |           |                                    |  |        |           |        |  |  |
|------------------|--|---------------------------------|-----------|------------------------------------|--|--------|-----------|--------|--|--|
|             |  | (Inthousands)                   |
|             |  | Nine MonthsEndedOctober 3, 2004 |           | Nine Months EndedSeptember 28,2003 |
|             |  |                            |           | (Restated)                         |
| **Segment**      |  |
| ChassisSegment   |  | $                               | 432,730   |                               |  | $      | 108,640   |   |
| DrivelineSegment |  |                            | 597,080   |                               |  |   | 589,890   |   |
| EngineSegment    |  |                            | 474,900   |                               |  |   | 420,610   |   |
| TotalCompany     |  | $                               | 1,504,710 |                               |  | $      | 1,119,140 |   |
|                  |

Netsales for the first nine months of 2004 were $1,505 million versus$1,119 million for the first nine months of 2003 (as restated). Theprimary driver of the increase in our 2004 sales was our New Castleacquisition, which contributed $327 million in the first nine months of2004. In addition we had approximately $87 million in additional volumerelated to new product launches and ramp up of existing programs aswell as a $22 million benefit from foreign exchange movements. However,these increases were partially offset by approximately $46 millionrelated to our divestiture of two aluminum die casting facilitieswithin our Driveline segment, and a 3.3% decrease in NorthAmerican vehicle production from our three largest customers (Ford,General Motors and DaimlerChrysler).

Grossprofit.    Gross margin by segment and in total for the ninemonths ended October 3, 2004 and September 28, 2003 (as restated)were:

|                                |  |                                 |         |                                    |  |        |         |         |  |  |
|--------------------------------|--|---------------------------------|---------|------------------------------------|--|--------|---------|---------|--|--|
|                           |  | (Inthousands)                   |
|                           |  | Nine MonthsEndedOctober 3, 2004 |         | Nine Months EndedSeptember 28,2003 |
|                           |  |                            |         | (Restated)                         |
| **Segment**                    |  |
| ChassisSegment                 |  | $                               | 27,480  |                               |  | $      | 10,430  |    |
| DrivelineSegment               |  |                            | 47,420  |                               |  |   | 60,030  |    |
| EngineSegment                  |  |                            | 75,580  |                               |  |   | 62,970  |    |
| Corporate/centralizedresources |  |                            | (11,700 | )                             |  |   | (9,140  | )  |
| TotalCompany                   |  | $                               | 138,780 |                               |  | $      | 124,290 |    |
|                                |

Ourgross profit was $138.8 million, or 9.2% of net sales, for 2004compared to $124.3 million or 11.1% of net sales for 2003 (asrestated). The increase of $14.5 million was primarily due to the sales

39

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increase noted above. The 1.9% margindecline is primarily explained by two issues within our Drivelinesegment. The first issue surrounds a $16 million decline in our forgingoperations (primarily relates to an $20 million increase in steel costduring the first nine months of 2004 offset by approximately $3 millionin price increases to our customers) and the second issue involves a $3million one-time payment made to one of our customers relating to a newbusiness award. Both these items are further explained in the segmentdiscussion that follows. In addition to these factors, we have alsoexperienced raw material price increases across our Engine and Chassisoperations of approximately $9 million during the first nine months of2004. Although we have been able to offset much of these cost increaseswith manufacturing and administrative cost reductions, a portion ofthese increases have also contributed to reducing our gross profitmargin.

Selling, General andAdministrative.    Selling, general and administrative expenseswere $98.4 million, or 6.5% of net sales, for 2004 compared to$84.3 million or 7.5% of sales in 2003. The $14.1 millionincrease from 2003 to 2004 is primarily explained by the approximately$15 million in fees relating to the Independent Investigation describedin Note 2 to the consolidated financial statements included herein andis also benefited by an approximate $1.5 million pension curtailmentrelated to the disposition of two manufacturing facilities discussedearlier. The reduction in selling, general and administrative expensesas a percentage of net sales additionally reflects the fact that theNew Castle facility was able to integrate into our operation withoutsignificant additional investment in these activities, and reflects thebenefits of our restructuring activity initiatives in late 2003

Depreciation and Amortization.    Depreciationand amortization expense by segment and in total for the nine monthsended October 3, 2004 and September 28, 2003 (as restated)were:

|                                |  |                                 |        |                                    |  |        |        |        |  |  |
|--------------------------------|--|---------------------------------|--------|------------------------------------|--|--------|--------|--------|--|--|
|                           |  | (Inthousands)                   |
|                           |  | Nine MonthsEndedOctober 3, 2004 |        | Nine Months EndedSeptember 28,2003 |
|                           |  |                            |        | (Restated)                         |
| **Segment**                    |  |
| ChassisSegment                 |  | $                               | 19,830 |                               |  | $      | 5,390  |   |
| DrivelineSegment               |  |                            | 39,860 |                               |  |   | 39,270 |   |
| EngineSegment                  |  |                            | 27,940 |                               |  |   | 27,490 |   |
| Corporate/centralizedresources |  |                            | 7,730  |                               |  |   | 6,150  |   |
| TotalCompany                   |  | $                               | 95,360 |                               |  | $      | 78,300 |   |
|                                |

Thenet increase in depreciation and amortization of approximately $17.1million is principally explained by $14 million of depreciation andamortization expense associated with our New Castle acquisition.Additionally, for the past several years capital spending has been inexcess of our depreciation expense. Thus, the additional capitalspending accounts for the remaining increase in depreciationexpense.

Restructuring Charges.    Weincurred $1.9 million of additional restructuring charges in the firstnine months of 2004 compared to $7.1 million incurred in the first ninemonths of 2003. Of the 2004 charges, approximately $1.2 million relatesto our Driveline segment, where the majority of the charge relates tothe closure of a facility in Europe and headcount reduction activitiesin our Forging operations. An additional $0.6 million relates to coststo reduce headcount in our Corporate center, and the remaining $0.1million relates to headcount reductions in our Chassis segment. Netrestructuring activity in the first six months of 2004 is asfollows:

|                          |  |                |        |         |  |  |
|--------------------------|--|----------------|--------|---------|--|--|
|                     |  | (Inthousands)  |
|                     |  | SeveranceCosts |
| Balance December 28,2003 |  | $              | 7,670  |    |
| Charges toexpense        |  |           | 1,930  |    |
| Cashpayments             |  |           | (5,190 | )  |
| Balanceat October 3,2004 |  | $              | 4,410  |    |
|                          |

40

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Disposition ofManufacturing Facilities.    In connection with our sale of twoaluminum die casting facilities in our Driveline segment, we incurred a$7.6 million charge in the first nine months of 2004. This chargerepresents approximately a book value of $12 million in fixed assetsand deferred financing fees offset by the $4.1 million in cashconsideration paid by Lester PDC for the assets. See Note 11 to theconsolidated financial statements included herein.

Operating Profit.    Operating profit was $30.9million, or 2.1% of sales, for the first nine months of 2004compared to $32.9 million, or 2.9% of sales, for the same periodin 2003 (as restated). This includes a $7.6 million charge relating tothe disposition of two manufacturing facilities discussed above from2004. This resulting increase is principally explained by thesignificant increase in sales and the decrease in selling, general andadministrative expenses as a percentage of sales offset by the rawmaterial cost increases noted above. The makeup of each of thesedifferences is discussed in greater detail above and in the segmentdiscussion that follows. Operating profit by segment for the ninemonths ended October 3, 2004 and September 28, 2003 (as restated) is asfollows:

|                                |  |                                 |         |                                    |  |        |         |         |  |  |
|--------------------------------|--|---------------------------------|---------|------------------------------------|--|--------|---------|---------|--|--|
|                           |  | (Inthousands)                   |
|                           |  | Nine MonthsEndedOctober 3, 2004 |         | Nine Months EndedSeptember 28,2003 |
|                           |  |                            |         | (Restated)                         |
| **Segment**                    |  |                            |    |                               |  |   |    |    |
| ChassisSegment                 |  | $                               | 15,880  |                               |  | $      | 4,570   |    |
| DrivelineSegment               |  |                            | 3,010   |                               |  |   | 18,710  |    |
| EngineSegment                  |  |                            | 45,250  |                               |  |   | 31,180  |    |
| Corporate/centralizedresources |  |                            | (33,240 | )                             |  |   | (21,550 | )  |
| TotalCompany                   |  | $                               | 30,900  |                               |  | $      | 32,910  |    |
|                                |

AdjustedEBITDA.    Management reviews our segment operating resultsbased upon the Adjusted EBITDA definition as discussed in the"Key Indicators of Performance (Non-GAAP FinancialMeasures)" section. Accordingly, we have separatelypresented such amounts in the table below. Adjusted EBITDA increased to$134.8 million in 2004 from $111.7 million in 2003 (as restated) Theprimary drivers of this increase are explained above in the operatingprofit and depreciation and amortization discussions, and will befurther detailed in the segment detail that follows. Additionally, in"Segment Information" below, we provide areconciliation between Adjusted EBITDA and operatingprofit.

|                                                                                            |  |                                 |         |                                    |  |        |         |         |  |  |
|--------------------------------------------------------------------------------------------|--|---------------------------------|---------|------------------------------------|--|--------|---------|---------|--|--|
|                                                                                       |  | (Inthousands)                   |
|                                                                                       |  | Nine MonthsEndedOctober 3, 2004 |         | Nine Months EndedSeptember 28,2003 |
|                                                                                       |  |                            |         | (Restated)                         |
| **Segment**                                                                                |  |
| ChassisSegment                                                                             |  | $                               | 35,710  |                               |  | $      | 9,960   |    |
| DrivelineSegment                                                                           |  |                            | 50,580  |                               |  |   | 58,200  |    |
| EngineSegment                                                                              |  |                            | 73,190  |                               |  |   | 58,670  |    |
| Corporate/centralizedresources                                                             |  |                            | (24,660 | )                             |  |   | (15,120 | )  |
| TotalCompany                                                                               |  | $                               | 134,820 |                               |  | $      | 111,710 |    |
| Memo:Fixed asset losses included in calculation of both operating profit andAdjustedEBITDA |  | $                               | (1,540  | )                             |  | $      | (2,200  | )  |
| Memo:Other, net income (loss) included in calculation of AdjustedEBITDA                    |  | $                               | 360     |                               |  | $      | (1,980  | )  |
|                                                                                            |

InterestExpense.    Interest expense increased from $53.9 million in thefirst nine months of 2003 (as restated) to approximately $61.5 millionin 2004. The increase is principally due to $2.4 million in interestarising from the 10% senior subordinated notes from our NewCastle acquisition and $11.3 million in interest arising from our10% senior notes issued in October 2003. These increases were

41

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offset by a decrease of $3.3 million ininterest expense related to the redemption of the $98.5 millionoutstanding balance on the 4.5% subordinated debentures and adecrease of approximately $1.9 million in interest expense related tothe repayment of $46.6 million of term loan debt in the fourth quarterof 2004.

Equity Loss fromAffiliates.    Equity earnings from affiliates were $5.2 millionin the first nine months of 2004. The improvement versus our 2003 lossof $1.6 million reflects the improved operating results of our equityaffiliates.

Other, Net.    Other, netexpense decreased to a $4.9 million loss in the first nine months of2004 versus a loss of approximately $6.5 million in the first ninemonths of 2003 (as restated). This decrease is primarily due to areduction in foreign currency losses in 2004 versus 2003 and a $1.2million gain on the disposition of a joint venture in Korea during thesecond quarter of 2004.

Preferred StockDividends.    Preferred stock dividends were $13.8 million inthe first nine months of 2004 as compared to $6.8 million for the sameperiod in 2003 . This increase is due to dividends on the $64.5 millionof preferred stock issued in connection with the New Castle acquisitionand compounded interest on preexisting preferred stock. Due to ouradoption of SFAS No. 150, "Accounting for CertainFinancial Instruments with Characteristics of both Liabilities andEquity" as of the first quarter of 2004, preferred stockdividends are included as "other expense,net" on our consolidated statement of operations beginningin 2004.

Taxes.    The tax provision for the firstnine months of 2004 was a benefit of $11.7 million as compared to $8.8million benefit for the same period of 2003 (as restated). The primaryreasons for the Company's effective tax rate being different fromits statutory rate are non-deductible preferred stock dividends,foreign losses for which tax benefits are not recognized and foreigntax rates in excess of the U.S. rate as well as the provision forunremitted earnings of a foreign subsidiary. In addition, in July 2004,the Company received a $27 million tax refund from the IRS thatresulted from a claim filed by the Company in 2002. This claim wasbased on a 2002 change in the U.S. Treasury Regulations, whichpermitted the Company to utilize a previously disallowed capital lossthat primarily resulted from the sale of a subsidiary in 2000. Theamount received in excess of the refund previously recorded wasconsidered in the tax provision for the third quarter of 2004.

Segment Information

ChassisSegment.    Sales for our Chassis Segment increased in the firstnine months of 2004 to $432.7 million versus $108.6 million in theprior period (as restated). The primary driver of the approximate$324.1 million increase in sales is a $327 million increase from theacquisition of New Castle offset by $6 million decrease due to thedivestiture of our Fittings operation in April 2003. Adjusted EBITDAfor the segment increased from $10.0 million in the first nine monthsof 2003 (as restated) to $35.7 million in 2004. The increase isprimarily due to an approximate $29 million increase from our NewCastle acquisition (results are net of approximately $7.5 million inoperating leases used to finance the acquisition) and approximately a$1.0 million increase in fixed asset gains, but was offset partially byapproximately $1.5 million from the divestiture of our Fittingsoperation, $2 million in customer price concessions, and approximately$1.5 million of additional lease expense related to sale leasebackactivities completed in 2003. Of the approximate $6 million of rawmaterial price increases experienced in these operations, the majorityhas been offset with cost reduction activities within the operations.Operating profit increased by $11.3 million in the first nine months of2004 due to the above factors and reflects an increase of $14.4 millionin depreciation and amortization expense primarily relating to the NewCastle acquisition.

42

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|                                                                                                    |  |                                 |         |                                    |  |        |         |         |  |  |
|----------------------------------------------------------------------------------------------------|--|---------------------------------|---------|------------------------------------|--|--------|---------|---------|--|--|
|                                                                                               |  | (Inthousands)                   |
|                                                                                               |  | Nine MonthsEndedOctober 3, 2004 |         | Nine Months EndedSeptember 28,2003 |
|                                                                                               |  |                            |         | (Restated)                         |
| **ChassisSegment**                                                                                 |  |                            |    |                               |  |   |    |    |
| Sales                                                                                              |  | $                               | 432,730 |                               |  | $      | 108,640 |    |
| Operatingprofit                                                                                    |  | $                               | 15,880  |                               |  | $      | 4,570   |    |
| Depreciationandamortization                                                                        |  |                            | 19,830  |                               |  |   | 5,390   |    |
| AdjustedEBITDA                                                                                     |  | $                               | 35,710  |                               |  | $      | 9,960   |    |
| Memo:Fixed asset gains (losses) included in calculation of both operatingprofit and AdjustedEBITDA |  | $                               | 900     |                               |  | $      | (140    | )  |
|                                                                                                    |

DrivelineSegment.    Sales for our Driveline segment were $597.1 millionin the first nine months of 2004 versus $589.9 million in 2003 (asrestated). Sales decreased $46 million related to the divestiture oftwo aluminum die casting facilities but were offset by a $12 millionbenefit in foreign exchange fluctuations and a $39 million benefit fromnew launches and ramp up of existing business. Adjusted EBITDA for thesegment decreased $7.6 million to $50.6 million as compared with theprior year (as restated). Cost savings and profits from new businesswere not able to offset the issues within the Forging operation(primary issue was an approximate $20 million increase in the price toprocure steel during the first nine months of 2004 compared to the sameperiod in 2003 offset by approximatley $3 million in price increases toour customers). Additionally, there was an increase in fixed assetdisposal losses of approximately $0.7 million in 2004 versus 2003.Operating profit decreased from $18.7 million in 2003 (as restated) to$3.0 million in 2004. This decrease is primarily attributable to theissues discussed above, the $7.6 million disposition of twomanufacturing facilities discussed earlier and approximately $0.6million of incremental depreciation and amortizationexpense.

|                                                                                                    |  |                                 |         |                                    |  |        |         |        |  |  |
|----------------------------------------------------------------------------------------------------|--|---------------------------------|---------|------------------------------------|--|--------|---------|--------|--|--|
|                                                                                               |  | (Inthousands)                   |
|                                                                                               |  | Nine MonthsEndedOctober 3, 2004 |         | Nine Months EndedSeptember 28,2003 |
|                                                                                               |  |                            |         | (Restated)                         |
| **DrivelineSegment**                                                                               |  |
| Sales                                                                                              |  | $                               | 597,080 |                               |  | $      | 589,890 |   |
| Operatingprofit                                                                                    |  | $                               | 3,010   |                               |  | $      | 18,710  |   |
| Assetimpairment                                                                                    |  |                            | 7,600   |                               |  |   | — |   |
| Non-cashstock awardexpense                                                                         |  |                            | 110     |                               |  |   | 220     |   |
| Depreciation andamortization                                                                       |  |                            | 39,860  |                               |  |   | 39,270  |   |
| AdjustedEBITDA                                                                                     |  | $                               | 50,580  |                               |  | $      | 58,200  |   |
| Memo:Fixed asset gains (losses) included in calculation of both operatingprofit and AdjustedEBITDA |  | $                               | (690    | )                             |  | $      | 10      |   |
|                                                                                                    |

EngineSegment.    Sales for our Engine Segment increased to $474.9million in the first nine months of 2004 or 12.9% over 2003 (asrestated) sales of $420.6 million**.**The $54.3 million increaseprimarily reflects $51 million in additional volume from new productlaunches and an approximate $10 million benefit related to foreignexchange movements. Adjusted EBITDA increased from $58.7 million in thefirst nine months of 2003 (as restated) to $73.2 million in 2004. Theincrease primarily relates to additional sales volume, but is alsoaided by an approximate $0.5 million benefit related to foreignexchange movements. Of the approximate $3 million of raw material priceincreases experienced in these operations, the majority has been offsetwith cost reduction activities within the operations and the additionalsales volume over prior year. Operating profit increased to $45.3million in the first nine months of 2004 from $31.2 million in 2003 (asrestated). The explanations for this change are describedabove.

43

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|                                                                                            |  |                                 |         |                                    |  |        |         |         |  |  |
|--------------------------------------------------------------------------------------------|--|---------------------------------|---------|------------------------------------|--|--------|---------|---------|--|--|
|                                                                                       |  | (Inthousands)                   |
|                                                                                       |  | Nine MonthsEndedOctober 3, 2004 |         | Nine Months EndedSeptember 28,2003 |
|                                                                                       |  |                            |         | (Restated)                         |
| **EngineSegment**                                                                          |  |
| Sales                                                                                      |  | $                               | 474,900 |                               |  | $      | 420,610 |    |
| Operatingprofit                                                                            |  | $                               | 45,250  |                               |  | $      | 31,180  |    |
| Depreciationandamortization                                                                |  |                            | 27,940  |                               |  |   | 27,490  |    |
| AdjustedEBITDA                                                                             |  | $                               | 73,190  |                               |  | $      | 58,670  |    |
| Memo:Fixed asset losses included in calculation of both operating profit andAdjustedEBITDA |  | $                               | (540    | )                             |  | $      | (1,170  | )  |
|                                                                                            |

Corporate/CentralizedResources.    Adjusted EBITDA for Corporate/CentralizedResources was a loss of $24.7 million in the first nine months of 2004versus a loss of $15.1 million in the prior period. We incurredapproximately $15 million of expenses associated with our IndependentInvestigation discussed in Note 2 to the consolidated financialstatements contained herein. After adjusting for these one timeexpenses, corporate expenses decreased by approximately $5 million. Theremaining reduction is principally explained by restructuringactivities initiated in 2003, a pension curtailment gain ofapproximately $1.5 million recognized in the second quarter of 2004, anincrease of $0.3 million in fixed asset losses, and a decrease of $2.3million in Other, Net. Operating profit decreased by $11.7 million in2004, which is also explained by the factors described above.

|                                                                                            |  |                                 |         |                                    |  |        |         |         |  |  |
|--------------------------------------------------------------------------------------------|--|---------------------------------|---------|------------------------------------|--|--------|---------|---------|--|--|
|                                                                                       |  | (Inthousands)                   |
|                                                                                       |  | Nine MonthsEndedOctober 3, 2004 |         | Nine Months EndedSeptember 28,2003 |
|                                                                                       |  |                            |         | (Restated)                         |
| **Corporate/CentralizedResources**                                                         |  |                            |    |                               |  |   |    |    |
| Operatingprofit                                                                            |  | $                               | (33,240 | )                             |  | $      | (21,550 | )  |
| Non-cashstock awardexpense                                                                 |  |                            | 490     |                               |  |   | 2,260   |    |
| Depreciation andamortization                                                               |  |                            | 7,730   |                               |  |   | 6,150   |    |
| Other,net                                                                                  |  |                            | 360     |                               |  |   | (1,980  | )  |
| AdjustedEBITDA                                                                             |  | $                               | (24,660 | )                             |  | $      | (15,120 | )  |
| Memo:Fixed asset losses included in calculation of both operating profit andAdjustedEBITDA |  | $                               | (1,210  | )                             |  | $      | (900    | )  |
| Memo:Other, net income (loss) included in calculation of AdjustedEBITDA                    |  | $                               | 360     |                               |  | $      | (1,980  | )  |
|                                                                                            |

Liquidityand Capital Resources

Overview of CapitalStructure.    Our objective is to appropriately finance ourbusiness through a mix of long-term and short-term debt and to ensurethat we have adequate access to liquidity. Our principal sources ofliquidity are cash flow from operations, our revolving credit facilityand our accounts receivable securitization facility. We have unutilizedcapacity under our revolving credit facility that may be utilized foracquisitions, investments or capital expenditure needs. Our cash flowsduring the year are impacted by the volume and timing of vehicleproduction, which includes a halt in our North American customers forapproximately two weeks in July and one week in December and reducedproduction in July and August for certain European customers. Webelieve that our liquidity and capital resources including anticipatedcash flow from operations will be sufficient to meet debt service,capital expenditure and other short-term and long-term obligations andneeds, but we are subject to unforeseeable events and the risk that weare not successful in implementing our business strategies.

Tofacilitate the collection of funds from operating activities, we havesold receivables under our accounts receivable facility and haveentered into accelerated payment collection programs with our

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largest customers. If these additionalliquidity sources were to become unavailable or limited by customerconcentration, credit quality or otherwise, we would require additionalborrowing capacity through similar means or other lines of credit. AtOctober 3, 2004, we received approximately $51.6 million under theaccelerated collection programs. We were recently notified that aportion of this program will expire in 2004, with the majority of theprogram expiring in 2005. While the impact of the discontinuance ofthese programs may be partially offset by a greater utilization of ouraccounts receivable securitization facility, we are examining otheralternative programs in the marketplace, as well as enhanced termsdirectly from our customers. However, we may not be able to reach afavorable resolution in a timely manner, and the new arrangements maybe less advantageous to the Company. If we are unable to replace thesearrangements, it could adversely affect our liquidity and futurecovenant compliance under our senior secured credit facility. Inaddition, if we fail to renew our accounts receivable securitizationagreement, which expires in November 2005, we could have adverseeffects on our liquidity and future covenant compliance. However, wehad approximately $60 million of undrawn and available commitments onour revolving credit facility at October 3, 2004.

Our capitalplanning process is focused on ensuring that we use our cash flowgenerated from our operations in ways that enhance the value of ourcompany. Historically, we have used our cash for a mix of activitiesfocused on revenue growth, cost reduction and balance sheetstrengthening. In the first six months of 2004, we have used our cashprimarily to service our debt obligations, fund our capital expenditurerequirements, and make the New Castle acquisition.

Liquidity.    At October 3, 2004, we hadapproximately $77 million of undrawn commitments from our revolvingcredit facility and no additional amounts available from our accountsreceivable facility. However, due to covenant constraints within ourcredit agreement, our availability from these two facilities totalsapproximately $60 million at October 3, 2004.

Effect of Independent Investigation on Covenants andLiquidity.    Due to the delay in filing our financialstatements, as a result of the Independent Investigation and therestatement (see Note 2 to the consolidated financial statementsincluded herein), we were required to seek a waiver from our seniorbank group, accounts receivable financing providers and certain lessorsunder sale-leaseback arrangements. Upon the recent filings of our 2003Form 10-K and first two quarters of 2004 Form 10-Q filings, we nolonger required these waivers.

TriMas CommonStock.    As of October 3, 2004, our remaining sharesoutstanding in TriMas were 5.75 million, representing a book value of$131.1 million that are recorded as equity and other investments inaffiliates in the Company's consolidated balance sheet as ofOctober 3, 2004. We continue to monitor opportunities to liquidate allor a portion of this interest to assist in funding operations, repayingdebt and making strategic investments and/or acquisitions. See Note 18to the consolidated financial statements for a discussion on the saleof 924,000 shares of TriMas stock to Masco Corporation on November 12,2004.

Debt, Capitalization and Available FinancingSources.    On October 20, 2003, we issued $150 million of10% senior notes due 2013 in a private placement under Rule 144Aand Regulation S of the Securities Act of 1933, as amended. As thesenotes were not registered within 210 days from the closing date, theannual interest rate increased by 1% and will remain so untilthe registration statement is declared effective. The net proceeds fromthis offering were used to redeem the balance of the $98.5 millionaggregate principal amount of the outstanding 4.5% subordinateddebentures that were due in December 2003 and to repay $46.6 million ofterm loan debt under our credit facility. As a result of this term loanrepayment, our semi-annual principal installments on the term loanfacility were decreased to $0.4 million with the remaining outstandingbalance due December 31, 2009. Due to this financing, we agreed withour banks to decrease our revolver facility to $200million.

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|                                                                            |  |                |     |                   |  |        |         |        |  |  |
|----------------------------------------------------------------------------|--|----------------|-----|-------------------|--|--------|---------|--------|--|--|
|                                                                       |  | (Inthousands)  |
|                                                                       |  | October 3,2004 |     | December 28, 2003 |
| Seniorcredit facilities:                                                   |  |
| Termloan                                                                   |  | $              | 352 |              |  | $      | 352     |   |
| Revolvingcreditfacility                                                    |  |           | 56  |              |  |   | — |   |
| Totalsenior creditfacility                                                 |  | $              | 408 |              |  | $      | 352     |   |
| 11% seniorsubordinated notes, with interest payable semi-annually, due2012 |  |           | 250 |              |  |   | 250     |   |
| 10% seniornotes, with interest payable semi-annually, due2013              |  |           | 150 |              |  |   | 150     |   |
| 10% seniorsubordinated notes, with interest payable semi-annually, due2014 |  |           | 32  |              |  |   | — |   |
| Otherdebt                                                                  |  |           | 24  |              |  |   | 26      |   |
| Total                                                                      |  | $              | 864 |              |  | $      | 778     |   |
| Lesscurrentmaturities                                                      |  |           | 8   |              |  |   | 11      |   |
| Long-termdebt                                                              |  | $              | 856 |              |  | $      | 767     |   |
|                                                                            |

AtOctober 3, 2004, we were contingently liable for standby letters ofcredit totaling $65.9 million issued on our behalf by financialinstitutions. These letters of credit are used for a variety ofpurposes, including meeting requirements to self-insure workers'compensation claims.

Our senior credit facility containscovenants and requirements affecting us and our subsidiaries, includinga financial covenant requirement for an EBITDA to cash interest expensecoverage ratio to exceed 2.25 through July 3, 2005; and a debt toEBITDA leverage ratio not to exceed 4.75 for the quarter ended October3, 2004. The accounts receivable facility is included in computing debtfor the purposes of these covenant calculations. We were in compliancewith the preceding financial covenants throughout the quarter andobtained waivers associated with the timely submission of financialstatements and associated representations and warranties throughNovember 15, 2004. Our most restrictive covenant is the leverage ratio.The permitted leverage ratio (as modified on September 30, 2004)becomes more restrictive in future periods, is 5.00 in the secondfiscal quarter of 2004, declining to 4.75 in the third and fourthfiscal quarters of 2004, 4.50 in the first fiscal quarter of 2005, 4.25in the third fiscal quarter of 2005, 3.75 in the fourth fiscal quarterof 2005, 3.00 in the first fiscal quarter of 2006 and 2.75 in thefourth fiscal quarter of 2006 and thereafter.

NewCastle Acquisition.    We successfully completed our purchase ofDaimlerChrysler's common and preferred interests in NC-M Chassis("New Castle") on December 31, 2003(subsequent to our 2003 year end of December 28). We financed thisacquisition with $118.8 million in cash, $31.7 million in aggregateprincipal amount of a new issue of 10% senior subordinated notesheld by DaimlerChrysler and $64.5 million in aggregate liquidationpreference Series A-1 redeemable preferred stock also held byDaimlerChrysler. The cash portion of the consideration was funded inpart with the net cash proceeds of approximately $65 million from thesale to and subsequent leaseback of certain equipment from GeneralElectric Capital Corporation, and the remainder was funded through theCompany's revolving credit facility.

Interest Rate Hedging Arrangements.    InFebruary 2001, we entered into interest rate protection agreements withvarious financial institutions to hedge a portion of our interest raterisk related to the term loan borrowings under our credit facility.These agreements included two interest rate collars with a term ofthree years, a total notional amount of $200 million and a three monthLIBOR interest rate cap and floor of 7% and 4.5%,respectively, and four interest rate caps at a three month LIBORinterest rate of 7% with a total notional amount of $301million. As a result of our early retirement of our term loans in June2002, we recorded a cumulative non-cash loss of $7.5 million, which isincluded in our consolidated statement of operations for the year endedDecember 29, 2002. The two interest rate collars and two of theinterest rate caps totaling $200 million were immediately redesignatedto our new term loan borrowings in June 2002. The remaining twointerest rate caps totaling $101 million no longer qualify for hedgeaccounting. Therefore, any unrealized gain or loss is recorded as otherincome or expense in the consolidated statement of operations beginningJune 20, 2002.

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The two interest rate collars expired inthe first quarter of 2004, and accordingly we recognized a pre-taxnon-cash gain of approximately $6.6 million, which reflects thereversal of the majority of the non-realized charge reflected in our2002 results and explained in the above paragraph. Prior to theexpiration of these interest rate collars, we recognized approximately$1.1 million as additional interest expense in 2004. Prior to theirmaturity, $6.6 million was included in accumulated other comprehensiveincome related to these arrangements.

Off-Balance SheetArrangements

Our Receivables Facility.    Wehave entered into an agreement to sell, on an ongoing basis, the tradeaccounts receivable of certain business operations to abankruptcy-remote, special purposes subsidiary, MTSPC, wholly owned byus. MTSPC has sold and, subject to certain conditions, may from time totime sell an undivided fractional ownership interest in the pool ofdomestic receivables, up to approximately $150 million, to a thirdparty multi-seller receivables funding company, or conduit. Upon saleto the conduit, MTSPC holds a subordinated retained interest in thereceivables. Under the terms of the agreement, new receivables areadded to the pool as collections reduce previously sold receivables. Weservice, administer and collect the receivables on behalf of MTSPC andthe conduit. The facility is an important source of liquidity to theCompany. The receivables facility resulted in net expense of $3 millionin 2004.

The facility is subject to customary terminationevents, including, but not limited to, breach of representations orwarranties, the existence of any event that materially adverselyaffects the collectibility of receivables or performance by a sellerand certain events of bankruptcy or insolvency. At October 3, 2004, wehad utilized $87.3 million of the facility with no additional amountsavailable. The proceeds of sale are less than the face amount ofaccounts receivable sold by an amount that approximates thepurchaser's financing costs. The agreement expires in November2005. If we are unable to renew or replace this facility, it couldadversely affect our liquidity and capital resources.

We haveentered into agreements with international invoice factoring companiesto sell customer accounts receivable of Metaldyne foreign locations inFrance, Germany, Spain, United Kingdom and Mexico on a non-recoursebasis. As of October 3, 2004, we had available approximately $67million from these commitments, and approximately $52.6 million ofreceivables were sold under these programs. We pay a commission to thefactoring company plus interest from the date the receivables are soldto the date of customer payment. Commission expense related to theseagreements are recorded in other expense, net on the Company'sconsolidated statement of operations.

CertainOther Commitments.    We have other cash commitments notrelating to debt as well, such as those in respect of leases andredeemable preferred stock.

Sale-LeasebackArrangements.    On June 17, 2004, the Company entered into asale-leaseback transaction for machinery and equipment with a thirdparty lessor. The Company received $7.5 million cash as part of thistransaction. In the first quarter of 2004, we entered into twosale-leaseback arrangements. On December 31, 2003 we entered into asale-leaseback with proceeds of approximately $4.5 million. This leasewas accounted for as a capital lease and the present value of our leasepayments is therefore reflected in our debt balance. We also enteredinto a $65 million sale-leaseback on December 31, 2003, as part of ourfinancing related to the purchase of New Castle. This lease for NewCastle equipment is accounted for as an operating lease and the annuallease expense is approximately $10 million.

In March 2003, weentered into a sale-leaseback transaction with respect to certainmanufacturing equipment for proceeds of approximately $8.5 million, andin October 2003, we entered into a sale-leaseback transaction formachinery and equipment for additional proceeds of $8.5 million. InJuly 2003, we entered into an approximate $10 million operating leaseassociated with the acquisition of our Greensboro, North Carolinafacility. The proceeds from this lease were used to finance a portionof the acquisition of this facility from Dana Corporation. All of theseleases are accounted for as operating leases. The sale-leasebacksinitiated in 2003 contribute an additional $3.8 million in annualizedlease expense going forward, which is included in our"Contractual Cash Obligations," below. Wecontinue to look to sale-leaseback and other leasing opportunities as asource of cash for 

47

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debt reduction and other uses. Our totalobligations under lease agreements are summarized in the ContractualCash Obligation table that follows.

RedeemablePreferred Stock.    We have outstanding $154.2 million inaggregate liquidation value of Series A, B and A-1 redeemable preferredstock in respect of which we have the option to pay cash dividends,subject to the terms of our debt instruments, at rates of 13%,11.5% and 11%, respectively, per annum initially and toeffect a mandatory redemption in December 2012, June 2013 and December2013, respectively. For periods that we do not pay cash dividends onthe Series A and Series A-1 preferred stock, an additional 2%per annum of dividends is accrued. No cash dividends were paid in 2003or 2004. In the event of a change in control or certain qualifiedequity offerings, we may be required to make an offer to repurchase ouroutstanding preferred stock. We may not be permitted to do so and maylack the financial resources to satisfy these obligations.Consequently, upon these events, it may become necessary torecapitalize our company or secure consents.

Saturn-Related Obligations.    In the November2000 recapitalization of the Company, our shares were converted intothe right to receive $16.90 in cash plus additional cash amounts basedupon the net proceeds of the disposition of the stock of SaturnElectronics & Engineering Inc. held by Metaldyne. We hold 1,796,800shares of Class A common stock and 1,796,800 shares of Class B commonstock of Saturn, a privately held corporation. As such, there is noreadily available market value of these shares. However, the value ofthis investment as recorded on the Company's books was $6.0million as of December 28, 2003 and $7.5 million at October 3, 2004. Wehave not identified any indicators of impairment.

Although nodisposition of the stock of Saturn was made prior to therecapitalization or has been made to date, former holders of our commonstock as of the merger will be entitled to amounts based upon the netproceeds, if any, from any future disposition of that stock if and whena disposition is completed. The amount which will be paid to suchformer stockholders will equal the proceeds in excess of $18 millionand less than or equal to $40 million, any proceeds in excess of $55.7million and less than or equal to $56.7 million as well as 60%of any such proceeds in excess of $56.7 million. We are not responsibleto disburse any funds to the previous holders of the Company'scommon stock if the sale proceeds are less than $18 million. Any saleof the stock of Saturn requires approval from a committee representingthe interests of the former shareholders of the Company. Consequently,the Company does not control the timing of the sale of the stock ofSaturn. It is possible that the Company may choose to agree to acceptan amount less than that indicated above in order to accelerate adisposition of the holdings of the stock of Saturn.

Credit Rating.    Metaldyne is rated byStandard & Poor's and Moody's Ratings. We currentlyhave long-term ratings of BB/B2 on our senior credit facility, B/B3 onour 10% senior notes due 2013 and B/Caa1 on our 11%senior subordinated notes due 2012. Our goal is to decrease our totalleverage and thus improve our credit ratings. In the event of a creditdowngrade, we believe we would continue to have access to additionalcredit sources. However, our borrowing costs would further increase andour ability to tap certain financial markets may be limited.

Capital Expenditures.    Our capitalexpenditure program promotes our growth-oriented business strategy byinvesting in our core areas, where efficiencies and profitability canbe enhanced. Capital expenditures by product segment for the periodspresentedwere:

|                      |  |                |         |                   |  |        |        |        |  |  |
|----------------------|--|----------------|---------|-------------------|--|--------|--------|--------|--|--|
|                 |  | (Inthousands)  |
|                 |  | October 3,2004 |         | September 28,2003 |
|                 |  |           |         | (Restated)        |
| CapitalExpenditures: |  |           |    |              |  |   |   |   |
| Chassis              |  | $              | 28,250  |              |  | $      | 10,390 |   |
| Driveline            |  |           | 32,950  |              |  |   | 29,640 |   |
| Engine               |  |           | 42,600  |              |  |   | 29,690 |   |
| Corporate            |  |           | 1,450   |              |  |   | 4,650  |   |
| Total                |  | $              | 105,250 |              |  | $      | 74,370 |   |
|                      |

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Cash Flows

Operatingactivities — Net cash provided by operating activitiestotaled $92 million for the nine months ended October 3, 2004, comparedto a $40.8 million increase in 2003 (as restated). Adjusting 2004results by the $87 million increased use of the accounts receivablesecuritization facility, the 2004 operating cash flow would haveapproximated a $4.7 million inflow, or an approximate $36 milliondecrease versus 2003 (as restated). The primary driver of this declineis an approximate $70 million increase in investment in working capital(excluding accounts receivable securitization facility). This increasein working capital is explained by the 35% increase in sales in2004 (driven largely by the New Castle acquisition as accountsreceivable was not acquired), higher inventory levels (largely drivenby the increase in raw material pricing combined with higher safetystock to compensate for the decrease in supply) and an increase in ouraccounts receivable (due to the increase in our sales, slower paymentpractices from our customers, and an approximate $5 million decline inour ability to use our accelerated payment collection programs).

Investing activities — Cash flows used in investingactivities totaled $249.8 million for the nine months ended October 3,2004, compared to a use of cash of $51.0 million in 2003 (as restated).Capital expenditures were higher in 2004 by approximately $30.9 millionthan in 2003 (as restated) primarily related to increased new businesslaunch activity. Additionally, we acquired the New Castle facility in2004 for approximately $218 million including fees and offset byproceeds from a sale-leaseback of approximately $65 million on acquiredNew Castle's equipment. In 2003, we invested $20 million in NC-MChassis Systems, LLC, a joint venture with DaimlerChrysler Corporation.Proceeds from sale-leaseback transactions with respect to otherequipment and real property represented a source of cash of $8.5million in 2003.

Financing activities — Cash flowsfrom financing activities totaled $145.2 million for the nine monthsended October 3, 2004, compared to a use of cash of $8.9 million in2003 (as restated). In 2004, we issued $96 million in new debt andpreferred stock to acquire New Castle and ended the quarter withapproximately $56 million outstanding on our revolving credit andswingline facilities versus zero outstanding at December 28, 2003.

Outlook

Automotive vehicle production in 2004 is expectedto be slightly below 2003 production levels in North America andslightly higher in Europe, but there are several factors that couldalter this outlook, including a change in interest rates or an increasein vehicle incentives offered to consumers.

Our principal use offunds from operating activities and borrowings for the next severalyears are expected to fund interest and principal payments on ourindebtedness, growth related capital expenditures and working capitalincreases, strategic acquisitions and lease expense. Managementbelieves cash flow from operations and debt financing and refinancingthat occurred in October 2003 will provide us with adequate sources ofliquidity for the foreseeable future. However, our sources of liquiditymay be inadequate if we are unable to obtain operating targets, whichwould cause us to seek covenant relief from existing lenders in thenear future. In addition, matters affecting the credit quality of oursignificant customers could adversely impact the availability of ourreceivables arrangements and our liquidity. We continue to exploreother sources of liquidity, including additional debt, but existingdebt instruments may limit our ability to incur additional debt.Therefore, we may be unable to secure equity or other financing. Wewere recently notified that a portion of the accelerated accountsreceivable programs with our largest customers will expire in 2004,while the majority will expire in 2005. These programs acceleratedapproximately $51.6 million at October 3, 2004. We are actively workingto find substitutes to replace these programs, but there is nocertainty that we will be successful. However, we had approximately $60million of undrawn and available commitments on our revolving creditfacility at October 3, 2004.

On December 31, 2003, we completedour acquisition of DaimlerChrysler's New Castle facility. Basedon our new, more favorable agreement with the UAW and the supplycontract with Daimler Chrysler, we anticipate 2004 Adjusted EBITDA forthis facility of between $35 and $40 million, net of approximately $10million in operating lease expense associated with a $65 millionsale-leaseback of New Castle equipment used to finance theacquisition.

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Two of our largest suppliers haverecently declared bankruptcy and are in the process of reorganizing.Additionally several other of our suppliers have announced financialdifficulties. The effect on the Company from these bankruptcies andother troubled suppliers is unknown, but they could result in theCompany paying higher prices, having less favorable payment termsand/or having interrupted supply of parts.

Consistent withoperating in the global vehicle industry, we anticipate competitivepressures and thus expect to face significant price reduction pressuresfrom our customer base. In 2003, though, we invested significantly inautomation and underwent restructuring activities to help offset thesepricing pressures. In addition, we are facing significant increases inthe cost to procure certain materials utilized in our manufacturingprocesses such as steel, energy, Molybdenum and nickel. In general,steel prices have recently risen by as much as 60-100% and havethus created significant tension between steel producers, suppliers andend customers. Based on current prices, our steel costs could increaseapproximately $50 million in 2004. However, we anticipate severalinitiatives such as steel scrap sales, steel resourcing efforts,contractual steel surcharge pass through agreements with customers andreducing or eliminating 2004 scheduled price downs to our customerswill offset approximately $30 million of these increased costs.Additionally, we are actively working with our customers to 1) obtainadditional business to help offset these prices through betterutilization of our capacity, 2) negotiate a surcharge to reflect theincreased material costs, and/or 3) resource certain of our productsmade unprofitable by these increases in material costs. We willactively work to mitigate the effect of these steel increasesthroughout 2004.

Contractual Cash Obligations

Undervarious agreements, we are obligated to make future cash payments infixed amounts. These include payments under our long-term debtagreements, rent payments required under lease agreements and variousseverance obligations undertaken. The following table summarizes ourfixed cash obligations over various future periods as of October 3,2004.

|                                                       |  |        |       |                       |  |          |         |          |  |             |         |        |  |        |         |        |  |        |         |        |  |  |
|-------------------------------------------------------|--|--------|-------|-----------------------|--|----------|---------|----------|--|-------------|---------|--------|--|--------|---------|--------|--|--------|---------|--------|--|--|
|                                                  |  |   |       | (Inmillions)          |
|                                                  |  |   |       | PaymentsDue byPeriods |
|                                                  |  | Total  |       | LessThanOneYear       |  | 1-3Years |         | 3-5Years |  | After5Years |
| Long-termdebt                                         |  | $      | 407   |                  |  | $        | 1       |     |  | $           | 2       |   |  | $      | 58      |   |  | $      | 346     |   |
| 11%Senior subordinated notes due2012                  |  |   | 250   |                  |  |     | — |     |  |        | — |   |  |   | — |   |  |   | 250     |   |
| 10%Senior notes due2013                               |  |   | 150   |                  |  |     | — |     |  |        | — |   |  |   | — |   |  |   | 150     |   |
| 10%Senior subordinated notes due2014                  |  |   | 32    |                  |  |     | — |     |  |        | — |   |  |   | — |   |  |   | 32      |   |
| Otherdebt                                             |  |   | 15    |                  |  |     | 3       |     |  |        | 4       |   |  |   | — |   |  |   | 8       |   |
| Capitalleaseobligations                               |  |   | 10    |                  |  |     | 4       |     |  |        | 3       |   |  |   | 3       |   |  |   | — |   |
| Operatinglease obligations(1)                         |  |   | 330   |                  |  |     | 45      |     |  |        | 81      |   |  |   | 74      |   |  |   | 130     |   |
| Redeemablepreferred stock, including accrueddividends |  |   | 154   |                  |  |     | — |     |  |        | — |   |  |   | — |   |  |   | 154     |   |
| Pensioncontributions (data available through2004)     |  |   | 38    |                  |  |     | 18      |     |  |        | 20      |   |  |   | — |   |  |   | — |   |
| Contractualseverance                                  |  |   | 7     |                  |  |     | 5       |     |  |        | 2       |   |  |   | — |   |  |   | — |   |
| Totalcontractual obligations(2)                       |  | $      | 1,393 |                  |  | $        | 76      |     |  | $           | 112     |   |  | $      | 135     |   |  | $      | 1,070   |   |
|                                                       |

|  |
|--|
|  |  |
|  |

|     |                                                                            |
|-----|----------------------------------------------------------------------------|
| (1) | Operatinglease expense is included in the determination of AdjustedEBITDA. |

|     |                                                                                |
|-----|--------------------------------------------------------------------------------|
| (2) | Total contractual obligationsexclude accounts payable and accrued liabilities. |

AtOctober 3, 2004, we were contingently liable for standby letters ofcredit totaling $66 million issued on our behalf by financialinstitutions. We are also contingently liable for future productwarranty claims. We believe that our product warranty exposure isimmaterial; however, it is continuously monitored for potentialwarranty implications of new and current business.

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Critical Accounting Policies

Theexpenses and accrued liabilities or allowances related to certainpolicies are initially based on our best estimates at the time oforiginal entry in our accounting records. Adjustments are recorded whenour actual experience differs from the expected experience underlyingthe estimates. We make frequent comparisons of actual versus expectedexperience to mitigate the likelihood of material adjustments.

Goodwill.    In June 2001, the FinancialAccounting Standards Board ("FASB") approvedStatement of Financial Accounting Standards("SFAS") No. 142 "Goodwill andOther Intangible Assets" which was effective for us onJanuary 1, 2002. Under SFAS No. 142, we ceased the amortization ofgoodwill. Beginning in 2002, we test goodwill for impairment on anannual basis, unless conditions exist which would require a morefrequent evaluation. In assessing the recoverability of goodwill,projections regarding estimated future cash flows and other factors aremade to determine the fair value of the respective assets. We may berequired to record impairment charges for goodwill if these estimatesor related projections change in the future.

At adoption andagain during 2002 and 2003, we determined that our goodwill was notimpaired as fair values continue to exceed their carrying value. Fairvalue of our goodwill is determined based upon the discounted cashflows of the reporting units using a 9.5% discount. Assuming anincrease in the discount rate to 12%, fair value would continueto exceed the respective carrying value of each automotive segment.

Receivables And Revenue Recognition.

The Company recognizesrevenue when there is evidence of a sale, the delivery has occurred orservices have been rendered, the sales price is fixed or determinableand the collectibility of receivables is reasonably assured.Consequently, sales are generally recorded upon shipment of product tocustomers and transfer of title under standard commercial terms.Significant retroactive price adjustments are recognized in the periodin which such amounts become probable.

Valuationof Long-Lived Assets.    Metaldyne periodically evaluates thecarrying value of long-lived assets to be held and used includingintangible assets, when events or circumstances warrant such a review.The carrying value of a long-lived asset to be held and used isconsidered impaired when the anticipated separately identifiableundiscounted cash flows from such an asset are less than the carryingvalue of the asset. In that event, a loss is recognized based on theamount by which the carrying value exceeds that fair value of thelong-lived asset. Fair value is determined primarily using theanticipated cash flows discounted at a rate commensurate with the riskinvolved. Impairment losses on long-lived assets are held for sale aredetermined in a similar manner, except that fair values are reduced forthe cost to dispose of the assets.

Pension andPostretirement Benefits Other Than Pensions.    Thedetermination of our obligation and expense for our pension andpostretirement benefits, such as retiree healthcare and life insurance,is dependent on our selection of certain assumptions used by actuariesin calculating such amounts. These assumptions are described in Note25, Employee Benefit Plans, of our consolidated financial statementsfor the year ended December 28, 2003, which include, among others,discount rate, expected long-term rate of return on plan assets andrate of increase in compensation and health care costs. While webelieve that our assumptions are appropriate, significant differencesin our actual experience or assumptions may materially affect ourpension and postretirement benefits other than benefits and our futureexpense. Our actual return on pension plan assets was 6.5% forthe year ended December 28, 2003. In comparison, our expected long-termreturn on pension plan assets was 8.96% for the year endedDecember 28, 2003. The expected return on plan assets was establishedby analyzing the long-term returns for similar assets, and as such, norevisions have been made to adjust to actual performance of the planassets.

New Accounting Pronouncements.

In May 2003, theFASB issued SFAS No. 150, "Accounting for CertainFinancial Instruments with Characteristics of both Liabilities andEquity." This Statement establishes standards for how anissuer 

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classifies and measures certain financialinstruments with characteristics of both liabilities and equity. ThisStatement is effective for financial instruments entered into ormodified after May 31, 2003, and otherwise is effective at thebeginning of the first interim period beginning after June 15, 2003,except for mandatorily redeemable financial instruments of nonpublicentities, for which it is effective for the first fiscal periodbeginning after December 15, 2003. Due to the Company being a nonpublicentity as defined in SFAS No. 150, we adopted this Statement effectivefor the quarter ended March 28, 2004. As a result of theCompany's adoption of SFAS No. 150, the Company'sredeemable preferred stock is classified as a long-term liability onthe Company's consolidated balance sheet effective as of thequarter ended March 28, 2004, and preferred stock dividends associatedwith this redeemable preferred stock are classified as other expense,net on the Company's consolidated statement of operationsbeginning with the quarter ended March 28, 2004.

On December 8,2003, the Medicare Prescription Drug, Improvement and Modernization Actwas signed into law. This law provides for a federal subsidy tosponsors of retiree health care benefit plans that provide a benefitthat is at least actuarially equivalent to the benefit established bythe law. The Company provides retiree drug benefits that exceed thevalue of the benefits that will be provided by Medicare Part D, and theCompany's eligible retirees generally pay a premium for thisbenefit that is less than the Part D premium. Therefore, the Companyhas concluded that these benefits are at least actuarially equivalentto the Part D program so that Metaldyne will be eligible for the basicMedicare Part D subsidy.

In the second quarter of 2004, aFinancial Accounting Standards Board (FASB) Staff Position (FSP FAS106-2, "Accounting and Disclosure Requirements Related tothe Medicare Prescription Drug Improvement and Modernization Act of2003") was issued providing guidance on the accounting forthe effects of the Act for employers that sponsor postretirement healthcare plans that provide prescription drug benefits. The FSP iseffective for the first interim or annual period beginning after June15, 2004. The Company estimates the federal subsidy included in the lawwill ultimately result in an approximate $4.5 million to $6.0 millionreduction in Metaldyne's postretirement benefit obligation.However, the reduction is not reflected in the Company'spostretirement benefit obligation at the balance sheet date, since thisinformation is as of the Company's September 30, 2003 measurementdate. For 2004, the Company expects a net reduction in ourpostretirement expense when compared to 2003. This decrease reflectsthe favorable impact of the Medicare legislation and changes to theplans that eliminated some coverage, offset by a 50 basis point declinein the discount rate and adverse experience in health care trends.

Other Matters

Fiscal Year

Our fiscal year will endon the Sunday nearest to December 31.

Caution ConcerningForward Looking Statements and Certain Risks Related to Our Businessand Our Company — Safe Harbor Statements

This reportcontains statements reflecting the Company's views about itsfuture performance, its financial condition, its markets and many othermatters that constitute "forward-lookingstatements." These views involve risks and uncertaintiesthat are difficult to predict and may cause the Company's actualresults and/or expectations about various matters to differsignificantly from those discussed in such forward-looking statements.All statements, other than statements of historical fact included inthis quarterly report, regarding our strategy, future operations,financial condition, expected results and costs, new business,estimated revenues and losses, prospects and plans are forward-lookingstatements. When used in this quarterly report, the words"will," "believe,""anticipate,""intend,""estimate,""expect," "project"and similar expressions are intended to identify forward-lookingstatements, although not all forward-looking statements contain suchidentifying words. You should not place undue reliance on theseforward-looking statements. All forward-looking statements speak onlyas of the date of this quarterly report and we undertake no obligationto update such 

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information. Readers should consider thatvarious factors may affect whether actual results and experiencecorrespond with our forward-looking statements and that many of thesefactors also represent risks attendant to owning securities in theCompany, including the following:

|              |                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Dependence on AutomotiveIndustry and Industry Cyclicality — The industries in whichwe operate depend upon general economic conditions and are highlycyclical. Our performance is affected particularly by new vehiclesales, which can be highly sensitive to changes in interest rates,consumer confidence and fuel costs. We experience sales declines duringthe third calendar quarter as a result of scheduled OEM shutdowns. |

|              |                                                                                                                                                                                                                                                                                                                                                                         |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Customer Concentration— Our base of customers is concentrated among original equipmentmanufacturers in North America, particularly the large automotivemanufacturers, and the loss of business from a major customer, thediscontinuance of particular vehicle models or a change in regulationsor auto consumer preferences could materially adversely affect us. |

|              |                                                                                                                                                                                                                                                                                                                                                                                           |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Ability to Finance CapitalRequirements — Our business is capital intensive. We havemade substantial capital investments to improve capacity andproductivity and to meet customer requirements. More investment isrequired to maintain and expand our future business awards. If we areunable to meet future capital requirements, our business may bematerially adversely affected. |

|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Increases in Costs Due to OurSupply Base and Raw Materials — Increases in our raw materialor energy costs or the loss of a substantial number of our supplierscould negatively affect our financial health and results. Inparticular, we have been recently adversely impacted by steel costs,which we have been unable to wholly mitigate. In addition, certain ofour suppliers have suffered financial distress, which may materiallyadversely impact us as well in terms of the potential for interruptedsupply, unfavorable payment terms and/or higher prices. Specifically,two of our largest suppliers have recently declared bankruptcy, and arein the process of reorganizing. The effect on the Company from thesebankruptcies is unknown, but they could result in the Company payinghigher prices, having less favorable payment terms and/or havinginterrupted supply of parts. |

|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Our Industries are HighlyCompetitive — Continuing trends among our customers willincrease competitive pressures in our businesses. Certain of ourcompetitors have greater financial resources and, in some cases, wecompete with our own customers. The continuing trend towards limitingoutside suppliers involves significant risks, as well as opportunities,and has increased competition. We have experienced and may continue toexperience adverse pricing pressures as a result. |

|              |                                                                                                                                                                                                                                                                                                                                                                         |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Changing Technology— Our products are subject to changing technology, which couldplace us at a competitive disadvantage relative to alternative productsintroduced by competitors. We may require significant ongoing andrecurring additional capital expenditures and investment in researchand development, manufacturing and other areas to remaincompetitive. |

|              |                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Challenges ofAcquisition Strategy — We intend to actively pursueacquisitions and/or joint ventures but we may not be able to identifyattractive acquisition and/or joint venture candidates, successfullyintegrate our acquired operations or realize the intended benefits ofour acquisitions and/or joint ventures, particularly with respect toany acquisitions outside North America. |

|              |                                                                                                                                                                                                                                                                                                                                  |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Dependence on Key Personneland Relationships — We depend on the services of keyindividuals, particularly our executive officers, and our relationshipwith our controlling stockholder. The loss of any key individual orchange in our relationship with our controlling stockholder couldmaterially and adversely harm us. |

|              |                                                                                                                                                                                           |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Labor Stoppages AffectingOEMs — We may be subject to work stoppages at our facilitiesor those of our principal customers or suppliers, which couldmaterially and adversely harm us. |

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|              |                                                                                                                                                                                                                                                            |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | OutsourcingTrend — Our strategies may not succeed if anticipatedoutsourcing among automotive manufacturers fails to materialize to theextent we have assumed. Principal risks to continued outsourcing areunion/labor considerations and objections. |

|              |                                                                                                                                                                                                                                                                                 |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | International Sales— A growing portion of our revenue may be derived frominternational sources, which exposes us to certain risks, such asforeign trade restrictions, government embargoes, tariffs, foreigncurrency risks, expatriation risks and political instability. |

|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Product Liability and WarrantyClaims — We may incur material losses and costs as a resultof product liability and warranty claims that may be brought against usin the event that the use of our current and formerly manufactured orsold products results, or is alleged to result, in bodily injury and/orproperty damage. In addition, claims may be asserted against us inrespect of formerly owned operations, such as TriMas, for which we areindemnified. In the event of financial difficulties, TriMas may beunable to satisfy indemnification claims. |

|              |                                                                                                                                                                      |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Environmental Matters— Our business may be materially and adversely affected bycompliance obligations and liabilities under environmental laws andregulations. |

|              |                                                                                                                                                             |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Control byPrincipal Stockholder — We are controlled by Heartland, whoseinterests in our business may be different than other investors in theCompany. |

|              |                                                                                                                                                                                                                                                                                                                                                               |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Terms ofStockholders Agreement — Provisions of a stockholdersagreement among the majority of our stockholders impose significantoperating and financial restrictions on our business without certainstockholder agreement. In the event our significant stockholders areunable to agree on certain actions, we may be materially and adverselyimpacted. |

|              |                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Leverage;Ability to Service Debt — We may not be able to manage ourbusiness as we might otherwise do so due to our high degree ofleverage. Our high degree of leverage means that we must dedicatesignificant cash flow to debt service. By doing so, we will havegreater difficulty in meeting other important commercial and financialobligations or in pursuing various strategies and opportunities. |

|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Substantial Restrictions andCovenants — Restrictions in our debt instruments limit ourability to take certain actions, including to incur further debt,finance capital expenditures, pay dividends and sell or acquire assetsor businesses. These restrictions may prevent us from taking actions inthe interests of our securityholders. In addition, our ability tocomply with our financial covenants in our debt instruments may beimpacted by numerous matters, including matters beyond our control. Inthe event, we are in default, we may be materially and adverselyimpacted. |

|              |                                                                                                                                                                                                                                                                                                                                                               |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Implementationof Control Improvements — We have not yet completedimplementation of our current plans to improve our internal controlsand may be unable to remedy certain internal control weaknessesidentified by our independent auditors and take other actions to meetour 2005 compliance deadline for Section 404 of the Sarbanes-Oxley Actof 2002. |

|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Impact ofRestatement — The disclosure of the restatement andweaknesses in our internal control over financial reporting mayadversely impact the confidence of those with whom we have commercialor financial relationships. Our conclusions and actions relative to therestatement and our control weaknesses is subject to scrutiny in thefuture, including review by the Securities and Exchange Commission inconnection with its ordinary course review of our public filings anddisclosures or otherwise. |

We undertake no obligation to updatepublicly any forward-looking statements, whether as a result of newinformation, future events or otherwise.

There are few publishedindependent sources for data related to the markets for many of ourproducts. To the extent we are able to obtain or derive data fromindependent sources, we have done so. In particular, we used a reportproduced by the Ducker Research Company, Inc. profiling North AmericanForging, Foundry and Machinery Industries prepared in 2000 forHeartland Industrial Partners, L.P., our largest shareholder. To theextent information in the Ducker Report is dated, we 

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have expressed our belief by extrapolatingdata from the Ducker Report using other publicly available informationabout the competitors and products addressed in the Ducker Report. Tothe extent information is otherwise not obtained or derived fromindependent sources, we have expressed our belief based on our owninternal analyses and estimates of our and our competitors'products and capabilities. We note that many of the industries in whichwe compete are characterized by competition among a small number oflarge suppliers. Industry publications and surveys and forecasts thatwe have used generally state that the information contained therein hasbeen obtained from sources believed to be reliable. We have notindependently verified any of the data from third-party sources norhave we ascertained the underlying assumptions or bases for any suchinformation. In general, when we say we are a"leader" or a"leading" manufacturer or make similarstatements about ourselves, we are expressing our belief that weformulated principally from our estimates and experiences in, andknowledge of, the markets in which we compete. In some cases, wepossess independent data to support our position, but that data may notbe sufficient in isolation for us to reach the conclusions that we havereached without our knowledge of our markets and businesses.

Inaddition to the foregoing, readers of this quarterly report arecautioned that, prior to the announcement of the IndependentInvestigation referred to herein, the Commission provided the Companywith comments in the ordinary course on its filings under theSecurities Exchange Act of 1934 as amended. The Company believes thatit has supplementally or in this report adequately responded to theStaff's comments on the Company's filings. However, it isentirely possible that disclosure may change as a result of theCommission's review of this filing and the Company'sresponses to those comments. Further, the Company has not includedcertain historical selected financial data in its Annual Report, andthe Commission may comment that the Company's Form 10-K must beamended for the inclusion of such information.

|              |                                                           |
|--------------|-----------------------------------------------------------|
| ITEM3.  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUTMARKET RISK |

In the normal course of business, we are exposed tomarket risk associated with fluctuations in foreign exchange rates. Weare also subject to interest risk as it relates to long-term debt. See"Management's Discussion and Analysis of FinancialCondition and Results of Operations" for details about ourprimary market risks, and the objectives and strategies used to managethese risks. Also see Note 15 "Long-TermDebt" in the notes to the consolidated financialstatements for additional information in our 2003 Form 10-K.

|               |                         |
|---------------|-------------------------|
| ITEM 4.  | CONTROLS AND PROCEDURES |

TheCompany's quarterly financial information has been restated toreflect adjustments to the Company's previously reportedfinancial information on Form 10-Q for the first three fiscal quartersof 2003. Reference is made to Note 2 to the Company's financialstatements, and Note 2 to our 2003 Form 10K, for greater detail on therestatement adjustments.

The restatement arose primarily out ofinformation obtained through an investigation conducted by anindependent director of the Company, Marshall Cohen, with theassistance of an independent counsel, Sidley Austin Brown & WoodLLP, and the forensic accounting group of Deloitte & Touche LLP.The investigation was initiated as a result of certain allegations madeby an employee of the Company and information obtained by theCompany's internal audit staff. As discussed below, the Companyhas implemented, or adopted plans to implement, a number of measuresintended to address matters of concern that have been identifiedthrough the investigation and is continuing to consider furthermeasures.

In 2003, a plant controller at the Sintereddivision's St. Mary's, Pennsylvania facility encountereddifficulties in understanding certain accounting practices anddocumentation. In December 2003, he notified the Company'sindependent auditors, KPMG LLP, that, among other things, he was unableto reconcile certain of the plant's general ledger accounts andto find appropriate documentation for certain entries and indicatedthat he had concerns regarding the division controller. TheCompany's Chief Financial Officer initiated an immediate reviewby the Company's internal audit department of accountingprocedures and financial accounting at the domestic plants within theSintered division. 

55

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Shortly thereafter, the Company and itsBoard of Directors authorized the independent investigation intocertain accounting practices at the Sintered division from 2001 through2003.

During the initial stages of the investigation, theCompany was made aware of errors with respect to the recording ofcertain entries which it attempted to analyze. While the Company wasperforming these analyses, in February 2004, the Sintered divisioncontroller made the following allegations concerning actions in whichhe admittedly participated. He alleged that, following the acquisitionof the Company in November 2000, income at the Sintered division from2000 through 2003 was deliberately understated by up to approximately$10 million in the aggregate. He alleged that these understatementswere part of an effort to disguise previous overstatements of income byapproximately $20 million in aggregate at the Sintered division duringthe period from 1996 through 1999, which was prior to the acquisition.There were three primary allegations from the former Sintereddivisional controller related to the period 1996 to 1999. During thistime, he stated income was overstated by (1) overstating fixed assets,(2) understating liabilities (notably accounts payable), and (3) usinga complex set of manual journal entries every month to"disguise" the effects of (1) and (2).Following the acquisition in late 2000, he stated that income wasunderstated through similar actions. The Company concluded that theSintered division controller's allegations concerning theseactions were correct, although the amounts impacted by the actionsfollowing the Acquisition vary from the allegations. The Sintereddivision investigation revealed deficiencies, circumventions andbreakdowns that occurred in controls and procedures at the Company.

Based upon certain findings within the Sintered division, theinvestigation was expanded to encompass accounting practices in otherareas of the Company concerning the use of reserves and accrualaccounts and the recognition of tooling income for the period from 2001through 2003. This investigation involved an extensive review by thoseconducting the investigation of journal entries of over a specifiedamount made over a three year period. As a result of the expandedinvestigation, the Company became aware of instances of inappropriateaccounting relating to reserves and accruals, which had the effect of"smoothing" earnings for certain periods.Specifically, the Company concluded from the investigative findingsthat there were instances when reserves had been established to coverunanticipated expenses, reserves had been increased or decreased basedupon performance, and/or accruals or reserves had been recordeddifferent from estimated or analyzed amounts. The Company alsoidentified from the investigative findings a few instances of incorrecttiming in the recognition of tooling income. The investigationcategorized journal entries from the relevant periods for analysis bythe Company and review by the Company with its current and formerindependent auditors. The Company analyzed those categories of entrieswhich the investigation determined to be either potentially inaccurate(i.e., warranting further review) or unknown (i.e., insufficientdocumentation for third party evaluation). Based upon theCompany's review of these categories of entries, the Companybelieves that the net impact on pretax earnings of the entriesdetermined to be inappropriate and the tooling income issue discussedabove was less than $0.6 million in 2003 and no quarter was affected bymore than that amount.

Through the work of the investigation, anumber of concerns with financial controls and procedures have beenidentified. Control concerns specifically identified by thoseconducting the investigation include, but are not limited to, instancesof disregard for, or lack of understanding of, proper accrualaccounting under GAAP, particularly in relation to reserve accounts;inconsistent policies and procedures concerning the recognition oftooling income; inadequate training of personnel within key accountingand operations functions; undue pressure on certain accountingpersonnel relative to operating results; issues in properly reviewinginternal reporting packages and questionnaires; a failure to properlyaccount for fixed assets; a lack of timely and adequate monitoring ofintercompany balances, management review of general ledger, accountreconciliation and manual journal entries; and insufficient informationsystems safeguards and security controls.

In October 2004, KPMGadvised the Company that the following items constituted materialweaknesses: management's focus on internal controls, specificallyreferencing those control issues identified by the investigation; theextent to which manual journal entries were able to be made withoutappropriate review or supporting documentation; the extent to whichmanual corporate level adjustments were required in the consolidationand financial reporting/close process; the need to 

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improve controls to limit access to accountspayable and vendor files; and the need to enhance controls related tofixed and leased assets to ensure, among other things, timely assetclassifications. These material weaknesses, if unaddressed, couldresult in material errors in the Company's financial statements.In addition, KPMG advised the Company that it had identified reportableconditions relating to intercompany account reconciliation; the need toreduce decentralization relative to international subsidiaries; and theneed to devote greater resources to income tax accounting. KPMG hasmade a number of business recommendations relating to theabove-referenced reportable conditions and material weaknesses. TheCompany has implemented several remedial measures to compensate forthese weaknesses, including additional oversight, centralizedreconciliations and personnel reassignments.

The Companybelieves that certain of the issues highlighted by the investigationderive from the Company's history of acquisitions and theattendant employment of personnel from different predecessor companieswho continued prior accounting practices. In some instances, theCompany believes control issues have been exacerbated by thepredecessor companies' previously highly decentralized structurewhich current management has been addressing over time since theacquisition.

The Company has devoted substantial resources tothe improvement and review of its control processes and procedures andsuch review is ongoing. Those conducting the investigation have madeobservations concerning corrective actions based on the matters thathave come to their attention, which the Company has reviewed. TheCompany has taken actions or considered actions to address concerns andissues referred to above, and intends to continue taking actions asnecessary to further address such concerns and issues, by (1) makingpersonnel and organizational changes; (2) improving communications andinternal reporting; (3) simplifying and making consistent variousaccounting policies and procedures and enhancing related documentation;(4) significantly expanding its training programs for both accountingand non-accounting employees related to accounting matters; (5)increasing management's focus on internal controls and improvingthe extent and timing of management oversight in a number of areas; and(6) implementing processes and procedures to reduce manualinterventions and adjustments and more appropriately limit access tocertain files and systems. The Company's Audit Committee and itsBoard of Directors have reviewed the actions undertaken to date inresponse to the findings arising from the accounting investigation andauthorized other actions to improve control processes and procedures.Specific remedial actions have been undertaken since the beginning of2004 and include the following:

|              |                                                   |
|--------------|---------------------------------------------------|
| •  | the termination or resignation ofseven employees; |

|              |                                                                                                                                                 |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | theupgrading of various personnel, including hiring a new Sintereddivision controller, a new corporate controller and a new fixed assetmanager; |

|              |                                                                                                           |
|--------------|-----------------------------------------------------------------------------------------------------------|
| •  | substantialadditional training of accounting personnel and non-accountingpersonnel in accounting matters; |

|              |                                                                                                                          |
|--------------|--------------------------------------------------------------------------------------------------------------------------|
| •  | revised incentive compensationsystem to eliminate plant specific performance criteria in favor ofdivision-wide criteria; |

|              |                                                                                                 |
|--------------|-------------------------------------------------------------------------------------------------|
| •  | instituted a number of fixedasset inventory and construction-in-progress analysis improvements; |

|              |                                                                     |
|--------------|---------------------------------------------------------------------|
| •  | improved corporate accountingpolicies and procedures documentation; |

|              |                                              |
|--------------|----------------------------------------------|
| •  | enhanced validation ofintercompany balances; |

|              |                                                                                                                  |
|--------------|------------------------------------------------------------------------------------------------------------------|
| •  | separated assignments,responsibility and access between the accounts payable group andcentral procurement group; |

|              |                                                                                             |
|--------------|---------------------------------------------------------------------------------------------|
| •  | expanded review processes ofinformation supplied by plant and division level personnel; and |

|              |                                                                            |
|--------------|----------------------------------------------------------------------------|
| •  | improved procedures and review ofrelative to plant manual journal entries. |

The Company willcontinue to evaluate the effectiveness of its controls and procedureson an ongoing basis, including consideration of internal controlweaknesses and business recommendations 

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identified by its auditors and suggestionsmade by those that conducted the investigation, and, consequently,intends to implement further actions in its continuing efforts tostrengthen the control process.

In addition, the Company isundertaking a thorough review of its internal controls, includinginformation technology systems and financial reporting as part of theCompany's preparation for compliance with the requirements ofSection 404 of the Sarbanes-Oxley Act. Given the need to fully remedythe internal control weaknesses identified by KPMG, there can be noassurance that the Company will be able to remedy these weaknesses andtake other actions required for compliance with Section 404 of theSarbanes-Oxley Act by the required compliance date, the filing date forits fiscal 2005 audit in early 2006.

Disclosure Controls andProcedures

The evaluation and investigation described aboveincluded an evaluation by management with the participation of ourChief Executive Officer and Chief Financial Officer, of theeffectiveness of our disclosure controls and procedures (as such termis defined in Rule 13a-15(e) and Rule 15d-15(e) of the SecuritiesExchange Act of 1934) pursuant to Rule 13a-15 of the Exchange Act. Ourdisclosure controls and procedures are designed only to providereasonable assurance that they will meet their objectives. Based uponthat evaluation, and the investigation, the Chief Executive Officer andChief Financial Officer concluded that (a) as of October 3, 2004, theCompany's disclosure controls and procedures were not effectiveto provide reasonable assurance that they would meet their objectives,and (b) taking into account the remedial measures implemented by theCompany, as of November 10, 2004, notwithstanding the materialweaknesses and reportable conditions summarized above, theCompany's disclosure controls and procedures are effective toprovide reasonable assurance that they will meet their objectives.

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PART II. OTHERINFORMATION

METALDYNE CORPORATION

Items 1, 2,3, 4 and 5 are not applicable.

Item 6.Exhibits.

|              |  |                                                                                                                       |  |  |  |  |
|--------------|--|-----------------------------------------------------------------------------------------------------------------------|--|--|--|--|
| Exhibit3.1   |  | RestatedCertificate of Incorporation of MascoTech,Inc.(1)                                                             |
| Exhibit 3.2  |  | Bylaws ofMetaldyne Corporation.(2)                                                                                    |
| Exhibit12    |  | Computation of Ratio of Earnings to Combined Fixed Chargesand Preferred Stock Dividends.                              |
| Exhibit31.1  |  | Certification pursuant to 18 U.S.C. Section 1350, asadopted pursuant to Section 302 of the Sarbanes-Oxley Act of2002. |
| Exhibit 31.2 |  | Certification pursuant to18 U.S.C. Section 1350, as adopted pursuant to Section 302 of theSarbanes-Oxley Act of 2002. |
| Exhibit32.1  |  | Certification pursuant to 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the Sarbanes-Oxley Act of2002. |
| Exhibit 32.2 |  | Certification pursuant to18 U.S.C. Section 1350, as adopted pursuant to Section 906 of theSarbanes-Oxley Act of2002.  |
|              |

|  |
|--|
|  |  |
|  |

|     |                                                                                                                                              |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------|
| (1) | Incorporated byreference from the Exhibits filed with Metaldyne Corporation'sAnnual Report on Form 10-K for the year ended December 31,2000. |

|     |                                                                                                                                                                        |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Incorporated by reference from theExhibits filed with MascoTech, Inc.'s (now known as MetaldyneCorporation) Registration Statement on Form S-1 filed December 27,2000. |

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SIGNATURE

Pursuant to therequirements of the Securities Exchange Act of 1934, the registrant hasduly caused this report to be signed on its behalf by the undersigned,thereunto duly authorized.

|  | METALDYNE CORPORATION(Registrant) |
|--|-----------------------------------|

Date: November 17, 2004

BY: /s/ Jeffrey M. Stafeil

|  | Jeffrey M. Stafeil Executive Vice Presidentand Chief Financial Officer (Chief Accounting Officer andAuthorized Signatory) |
|--|---------------------------------------------------------------------------------------------------------------------------|

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METALDYNE CORPORATION

EXHIBITINDEX

|             |  |                                                                                                                       |  |  |  |  |
|-------------|--|-----------------------------------------------------------------------------------------------------------------------|--|--|--|--|
| Exhibit     |  |                                                                                                                  |
| Exhibit3.1  |  | RestatedCertificate of Incorporation of MascoTech,Inc.(1)                                                             |
| Exhibit3.2  |  | Bylaws of MetaldyneCorporation.(2)                                                                                    |
| Exhibit12   |  | Computation of Ratio of Earnings to Combined Fixed Chargesand Preferred StockDividends.                               |
| Exhibit31.1 |  | Certification pursuant to 18 U.S.C. Section 1350, asadopted pursuant to Section 302 of the Sarbanes-Oxley Act of2002. |
| Exhibit31.2 |  | Certification pursuant to 18 U.S.C. Section 1350, asadopted pursuant to Section 302 of the Sarbanes-Oxley Act of2002. |
| Exhibit32.1 |  | Certification pursuant to 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the Sarbanes-Oxley Act of2002. |
| Exhibit32.2 |  | Certification pursuant to 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the Sarbanes-Oxley Act of2002. |
|             |

|  |
|--|
|  |  |
|  |

|     |                                                                                                                                              |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------|
| (1) | Incorporated byreference from the Exhibits filed with Metaldyne Corporation'sAnnual Report on Form 10-K for the year ended December 31,2000. |

|     |                                                                                                                                                                        |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Incorporated by reference from theExhibits filed with MascoTech, Inc.'s (now known as MetaldyneCorporation) Registration Statement on Form S-1 filed December 27,2000. |

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