##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



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Form 10-Q

|            |  |                                                                                         
|----------- |  | ----------------------------------------------------------------------------------------
|(Mark One)x |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 
|            |  |                                                                                         
|            |  | For the quarterly period ended October 31, 2002
or                                      
|o           |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
|           
|            |  | For the transition period from        to                                                

Commission file number: 1-11592



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HAYES LEMMERZ INTERNATIONAL, INC.(Exact name of registrant as specified in its charter)

|                                                                                    |  |                                            
|----------------------------------------------------------------------------------- |  | -------------------------------------------
|Delaware(State or other jurisdiction of
incorporation or organization)              |  | 13-3384636(IRS Employer
Identification No.)
|                                                                                    |  |                                            
|15300 Centennial Drive
Northville, Michigan(Address of principal executive offices) |  | 48167(Zip Code)                            

Registrants telephone number, including area code:
(734) 737-5000

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 file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes x No o

The number of shares of common stock outstanding as of December 16, 2002
was 28,455,995 shares.







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TABLE OF CONTENTS



|                                                 |                                                                                               |                                            |  |  |  |  |  | 
|------------------------------------------------ | --------------------------------------------------------------------------------------------- | ------------------------------------------ |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION                   
|                                                 | Item 1. Financial Statements                                                                 
|                                                 |                                                                                               | Consolidated Statements of Operations     
|                                                 |                                                                                               | Consolidated Balance Sheets               
|                                                 |                                                                                               | Consolidated Statements of Cash Flows     
|                                                 |                                                                                               | Notes to Consolidated Financial Statements
|                                                 | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                                 | Item 3. Quantitative and Qualitative Disclosures about Market Risk                           
|                                                 | Item 4. Controls and Procedures                                                              
|PART II. OTHER INFORMATION                      
|                                                 | Item 1. Legal Proceedings                                                                    
|                                                 | Item 2. Changes in Securities and Use of Proceeds                                            
|                                                 | Item 3. Defaults Upon Senior Securities                                                      
|                                                 | Item 4. Submission of Matters to a Vote of Security Holders                                  
|                                                 | Item 5. Other Information                                                                    
|                                                 | Item 6. Exhibits and Reports on Form 8-K                                                     
|Signatures                                      
|Certifications                                  
|Certification of Chief Executive Officer/Sec 906
|Certification of Chief Financial Officer/Sec 906



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

|                              |  |                                                                                       |  |  |    |  |      | 
|----------------------------- |  | ------------------------------------------------------------------------------------- |  |  | -- |  | ---- | 
|                              |  |                                                                                       |  |  |    |  | Page | 
|                              |  |                                                                                       |  |  |    |  |     
|PART I. FINANCIAL INFORMATION | 
|Item 1                        |  | Financial Statements                                                                  |  |  |    | 
|                              |  | Consolidated Statements of Operations                                                 |  |  | 2  | 
|                              |  | Consolidated Balance Sheets                                                           |  |  | 3  | 
|                              |  | Consolidated Statements of Cash Flows                                                 |  |  | 4  | 
|                              |  | Notes to Consolidated Financial Statements                                            |  |  | 5  | 
|Item 2                        |  | Management's Discussion and Analysis of Financial Condition
and Results of Operations |  |  | 21 | 
|Item 3                        |  | Quantitative and Qualitative Disclosures about Market Risk                            |  |  | 34 | 
|Item 4                        |  | Controls and Procedures                                                               |  |  | 34 | 
|                              |  |                                                                                       |  |  |    |  |      | 
|PART II. OTHER INFORMATION    |  |                                                                                       |  |  |   
|Item 1                        |  | Legal Proceedings                                                                     |  |  | 36 | 
|Item 2                        |  | Changes in Securities and Use of Proceeds                                             |  |  | 36 | 
|Item 3                        |  | Defaults upon Senior Securities                                                       |  |  | 36 | 
|Item 4                        |  | Submission of Matters to a Vote of Security Holders                                   |  |  | 36 | 
|Item 5                        |  | Other Information                                                                     |  |  | 36 | 
|Item 6                        |  | Exhibits and Reports on Form 8-K                                                      |  |  | 36 | 
|Signatures                    |  |                                                                                       |  |  |    |  | 38   | 
|Certifications                |  |                                                                                       |  |  |    |  | 39   | 

UNLESS OTHERWISE INDICATED, REFERENCES TO THE COMPANY MEAN HAYES LEMMERZ
INTERNATIONAL, INC., AND ITS SUBSIDIARIES AND REFERENCE TO A FISCAL YEAR MEANS
THE COMPANYS YEAR ENDED JANUARY 31 OF THE FOLLOWING YEAR (E.G., FISCAL 2002
MEANS THE PERIOD BEGINNING FEBRUARY 1, 2002, AND ENDING JANUARY 31, 2003). THIS
REPORT CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995 WITH RESPECT TO THE FINANCIAL
CONDITION, RESULTS OF OPERATIONS, AND BUSINESS OF THE COMPANY. THESE FORWARD
LOOKING STATEMENTS INVOLVE CERTAIN RISKS AND UNCERTAINTIES. NO ASSURANCE CAN BE
GIVEN THAT ANY OF SUCH MATTERS WILL BE REALIZED. FACTORS THAT MAY CAUSE ACTUAL
RESULTS TO DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY SUCH FORWARD LOOKING
STATEMENTS INCLUDE, AMONG OTHERS, THE FOLLOWING POSSIBILITIES: (1) THE OUTCOME
AND CONSEQUENCES OF THE COMPANYS CHAPTER 11 PROCEEDINGS; (2) COMPETITIVE
PRESSURE IN THE COMPANYS INDUSTRY INCREASES SIGNIFICANTLY; (3) GENERAL
ECONOMIC CONDITIONS ARE LESS FAVORABLE THAN EXPECTED; (4) THE COMPANYS
DEPENDENCE ON THE AUTOMOTIVE INDUSTRY (WHICH HAS HISTORICALLY BEEN CYCLICAL);
(5) CHANGES IN THE FINANCIAL MARKETS AFFECTING THE COMPANYS FINANCIAL
STRUCTURE AND THE COMPANYS COST OF CAPITAL AND BORROWED MONEY; AND (6) THE
UNCERTAINTIES INHERENT IN INTERNATIONAL OPERATIONS AND FOREIGN CURRENCY
FLUCTUATIONS. THE COMPANY HAS NO DUTY UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995 TO UPDATE THE FORWARD LOOKING STATEMENTS IN THIS QUARTERLY
REPORT ON FORM 10-Q AND THE COMPANY DOES NOT INTEND TO PROVIDE SUCH UPDATES.

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HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
(Debtor-in-Possession as of December 5, 2001)

CONSOLIDATED STATEMENTS OF OPERATIONS
(Millions of dollars, except share amounts)
(Unaudited)

|                                                                                                                                                                                             |                                                                                  |   |                   |      |  |                   |       |       |      |   |         |       |   |   |         |        |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------- | - | ----------------- | ---- |  | ----------------- | ----- | ----- | ---- | - | ------- | ----- | - | - | ------- | ------ | -
|                                                                                                                                                                                             |                                                                                  |   | Three Months      |      |  | Nine Months       |      
|                                                                                                                                                                                             |                                                                                  |   | Ended October 31, |      |  | Ended October 31, |      
|                                                                                                                                                                                             |                                                                                  |   |                   |      |  |                   |      
|                                                                                                                                                                                             |                                                                                  |   | 2002              |      |  | 2001              |       |       | 2002 |   |         | 2001  |  
|                                                                                                                                                                                             |                                                                                  |   |                   |      |  |                   |       |       |      |   |         |       |  
|Net sales                                                                                                                                                                                    |                                                                                  | $ | 535.4             |      |  | $                 | 515.0 |       |      | $ | 1,526.1 |       |   | $ | 1,574.5 |       
|Cost of goods sold                                                                                                                                                                           |                                                                                  |   | 465.2             |      |  |                   | 476.0 |       |      |   | 1,372.6 |       |   |   | 1,444.2 |       
|                                                                                                                                                                                             |                                                                                  |   |                   |      |  |                   |       |       |      |   |         |      
|                                                                                                                                                                                             | Gross profit                                                                     |   |                   | 70.2 |  |                   |       | 39.0  |      |   |         | 153.5 |   |   |         | 130.3  |  
|Marketing, general and administration                                                                                                                                                        |                                                                                  |   | 23.5              |      |  |                   | 27.7  |       |      |   | 74.1    |       |   |   | 79.9    |       
|Engineering and product development                                                                                                                                                          |                                                                                  |   | 5.1               |      |  |                   | 5.3   |       |      |   | 15.6    |       |   |   | 16.9    |       
|Amortization of goodwill                                                                                                                                                                     |                                                                                  |   |                  |      |  |                   | 6.7   |       |      |   |        |       |   |   | 20.0    |       
|Equity in losses of joint ventures                                                                                                                                                           |                                                                                  |   |                  |      |  |                   | 0.4   |       |      |   |        |       |   |   | 0.9     |       
|Asset impairments and other restructuring charges                                                                                                                                            |                                                                                  |   | 11.0              |      |  |                   | 4.6   |       |      |   | 36.3    |       |   |   | 42.6    |       
|Loss on investment in joint venture                                                                                                                                                          |                                                                                  |   |                  |      |  |                   |      |       |      |   |        |       |   |   | 3.8     |       
|Other (income) expense, net                                                                                                                                                                  |                                                                                  |   | (3.3              | )    |  |                   | (5.0  | )     |      |   | (7.0    | )     |   |   | (3.7    | )     
|Reorganization items                                                                                                                                                                         |                                                                                  |   | 7.0               |      |  |                   |      |       |      |   | 34.9    |       |   |   |        |       
|                                                                                                                                                                                             |                                                                                  |   |                   |      |  |                   |       |       |      |   |         |      
|                                                                                                                                                                                             | Earnings (loss) from operations                                                  |   |                   | 26.9 |  |                   |       | (0.7  | )    |   |         | (0.4  | ) |   |         | (30.1  | )
|Interest expense, net (excluding $29.6 million and $87.9 million
not accrued on
liabilities subject to compromise for the three months and nine
months ended
October 31, 2002, respectively) |                                                                                  |   | 19.0              |      |  |                   | 49.1  |       |      |   | 53.7    |       |   |   | 142.0   |       
|                                                                                                                                                                                             |                                                                                  |   |                   |      |  |                   |       |       |      |   |         |      
|                                                                                                                                                                                             | Earnings (loss) before taxes on income, minority interest and
extraordinary gain |   |                   | 7.9  |  |                   |       | (49.8 | )    |   |         | (54.1 | ) |   |         | (172.1 | )
|Income tax provision                                                                                                                                                                         |                                                                                  |   | 3.0               |      |  |                   | 4.2   |       |      |   | 0.6     |       |   |   | 14.6    |       
|                                                                                                                                                                                             |                                                                                  |   |                   |      |  |                   |       |       |      |   |         |      
|                                                                                                                                                                                             | Earnings (loss) before minority interest and extraordinary gain                  |   |                   | 4.9  |  |                   |       | (54.0 | )    |   |         | (54.7 | ) |   |         | (186.7 | )
|Minority interest                                                                                                                                                                            |                                                                                  |   | 1.2               |      |  |                   | 0.8   |       |      |   | 2.7     |       |   |   | 2.6     |       
|                                                                                                                                                                                             |                                                                                  |   |                   |      |  |                   |       |       |      |   |         |      
|                                                                                                                                                                                             | Earnings (loss) before extraordinary gain                                        |   |                   | 3.7  |  |                   |       | (54.8 | )    |   |         | (57.4 | ) |   |         | (189.3 | )
|Extraordinary gain, net of tax                                                                                                                                                               |                                                                                  |   |                  |      |  |                   |      |       |      |   |        |       |   |   | 2.7     |       
|                                                                                                                                                                                             |                                                                                  |   |                   |      |  |                   |       |       |      |   |         |      
|                                                                                                                                                                                             | Net income (loss)                                                                |   | $                 | 3.7  |  |                   | $     | (54.8 | )    |   | $       | (57.4 | ) |   | $       | (186.6 | )
|                                                                                                                                                                                             |                                                                                  |   |                   |      |  |                   |       |       |      |   |         |      
|Basic net income (loss) per share:                                                                                                                                                           |                                                                                  |   |                   |      |  |                   |       |       |      |   |         |       |   |   |         |       
|                                                                                                                                                                                             | Earnings (loss) before extraordinary gain                                        |   | $                 | 0.13 |  |                   | $     | (1.92 | )    |   | $       | (2.02 | ) |   | $       | (6.65  | )
|                                                                                                                                                                                             | Extraordinary gain, net of tax                                                   |   |                   |     |  |                   |       |      |      |   |         |      |   |   |         | 0.09   |  
|                                                                                                                                                                                             |                                                                                  |   |                   |      |  |                   |       |       |      |   |         |      
|Basic net income (loss) per share                                                                                                                                                            |                                                                                  | $ | 0.13              |      |  | $                 | (1.92 | )     |      | $ | (2.02   | )     |   | $ | (6.56   | )     
|                                                                                                                                                                                             |                                                                                  |   |                   |      |  |                   |       |       |      |   |         |      
|Diluted net income (loss) per share:                                                                                                                                                         |                                                                                  |   |                   |      |  |                   |       |       |      |   |         |       |   |   |         |       
|                                                                                                                                                                                             | Earnings (loss) before extraordinary gain                                        |   | $                 | 0.13 |  |                   | $     | (1.92 | )    |   | $       | (2.02 | ) |   | $       | (6.56  | )
|                                                                                                                                                                                             | Extraordinary gain, net of tax                                                   |   |                   |     |  |                   |       |      |      |   |         |      |   |   |         | 0.09   |  
|                                                                                                                                                                                             |                                                                                  |   |                   |      |  |                   |       |       |      |   |         |      
|Diluted net income (loss) per share                                                                                                                                                          |                                                                                  | $ | 0.13              |      |  | $                 | (1.92 | )     |      | $ | (2.02   | )     |   | $ | (6.56   | )     
|                                                                                                                                                                                             |                                                                                  |   |                   |      |  |                   |       |       |      |   |         |      

See accompanying notes to consolidated financial statements.

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HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
(Debtor-in-Possession as of December 5, 2001)

CONSOLIDATED BALANCE SHEETS
(Millions of dollars, except share amounts)

|                                        |                                                                           |                                                                                                |                                             |                                       |     |             |         |        |             |         |   | 
|--------------------------------------- | ------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------- | ------------------------------------------- | ------------------------------------- | --- | ----------- | ------- | ------ | ----------- | ------- | - | 
|                                        |                                                                           |                                                                                                |                                             |                                       |     | October 31, |         |        | January 31, |        
|                                        |                                                                           |                                                                                                |                                             |                                       |     | 2002        |         |        | 2002        |        
|                                        |                                                                           |                                                                                                |                                             |                                       |     |             |         |        |             |        
|                                        |                                                                           |                                                                                                |                                             |                                       |     | (Unaudited) |         |        |             |         |  
|                                        |                                                                           |                                                                                                |                                             | ASSETS                                |     |             |         |        |             |         |   | 
|Current assets:                         |                                                                           |                                                                                                |                                             |                                       |     |             |         |       
|                                        | Cash and cash equivalents                                                 |                                                                                                | $                                           | 45.4                                  |     |             | $       | 45.2   |            
|                                        | Receivables                                                               |                                                                                                |                                             | 324.1                                 |     |             |         | 266.2  |            
|                                        | Inventories                                                               |                                                                                                |                                             | 165.1                                 |     |             |         | 155.2  |            
|                                        | Prepaid expenses and other                                                |                                                                                                |                                             | 40.4                                  |     |             |         | 36.3   |            
|                                        |                                                                           |                                                                                                |                                             |                                       |     |            
|                                        |                                                                           |                                                                                                | Total current assets                        |                                       |     | 575.0       |         |        |             | 502.9   |  
|Property, plant and equipment, net      |                                                                           |                                                                                                | 935.7                                       |                                       |     |             | 965.4   |       
|Goodwill and other assets               |                                                                           |                                                                                                | 904.7                                       |                                       |     |             | 889.8   |       
|                                        |                                                                           |                                                                                                |                                             |                                       |     |            
|                                        |                                                                           |                                                                                                | Total assets                                |                                       | $   | 2,415.4     |         |        | $           | 2,358.1 |  
|                                        |                                                                           |                                                                                                |                                             |                                       |     |             |        
|                                        |                                                                           |                                                                                                |                                             | LIABILITIES AND STOCKHOLDERS DEFICIT |     |             |         |        |             |         |   | 
|Current liabilities:                    |                                                                           |                                                                                                |                                             |                                       |     |             |         |       
|                                        | DIP facility                                                              |                                                                                                | $                                           | 42.1                                  |     |             | $       |       |            
|                                        | Bank borrowings and other notes                                           |                                                                                                |                                             | 22.0                                  |     |             |         | 25.1   |            
|                                        | Current portion of long-term debt                                         |                                                                                                |                                             | 37.0                                  |     |             |         | 14.5   |            
|                                        | Accounts payable and accrued liabilities                                  |                                                                                                |                                             | 297.5                                 |     |             |         | 250.0  |            
|                                        |                                                                           |                                                                                                |                                             |                                       |     |            
|                                        |                                                                           |                                                                                                | Total current liabilities                   |                                       |     | 398.6       |         |        |             | 289.6   |  
|Long-term debt, net of current portion  |                                                                           |                                                                                                | 54.7                                        |                                       |     |             | 83.5    |       
|Pension and other long-term liabilities |                                                                           |                                                                                                | 310.6                                       |                                       |     |             | 312.2   |       
|Minority interest                       |                                                                           |                                                                                                | 15.4                                        |                                       |     |             | 11.8    |       
|Liabilities subject to compromise       |                                                                           |                                                                                                | 2,139.9                                     |                                       |     |             | 2,121.0 |       
|Commitments and contingencies           |                                                                           |                                                                                                |                                             |                                       |     |             |         |       
|Stockholders deficit:                  |                                                                           |                                                                                                |                                             |                                       |     |             |         |       
|                                        | Preferred stock, 25,000,000 shares authorized, none issued
or outstanding |                                                                                                |                                             |                                      |     |             |         |       |            
|                                        | Common stock, par value $0.01 per share:                                  |                                                                                                |                                             |                                       |     |             |         |        |            
|                                        |                                                                           | Voting  authorized 99,000,000 shares; 27,708,419
shares issued; 25,806,969 shares outstanding |                                             |                                       | 0.3 |             |         |        | 0.3         |        
|                                        |                                                                           | Nonvoting  authorized 5,000,000 shares; issued and
outstanding, 2,649,026 shares              |                                             |                                       |    |             |         |        |            |        
|                                        | Additional paid in capital                                                |                                                                                                |                                             | 235.1                                 |     |             |         | 235.1  |            
|                                        | Common stock in treasury at cost, 1,901,450 shares                        |                                                                                                |                                             | (25.7                                 | )   |             |         | (25.7  | )          
|                                        | Accumulated deficit                                                       |                                                                                                |                                             | (599.8                                | )   |             |         | (542.4 | )          
|                                        | Accumulated other comprehensive loss                                      |                                                                                                |                                             | (113.7                                | )   |             |         | (127.3 | )          
|                                        |                                                                           |                                                                                                |                                             |                                       |     |            
|                                        |                                                                           |                                                                                                | Total stockholders deficit                 |                                       |     | (503.8      | )       |        |             | (460.0  | )
|                                        |                                                                           |                                                                                                |                                             |                                       |     |            
|                                        |                                                                           |                                                                                                | Total liabilities and stockholders deficit |                                       | $   | 2,415.4     |         |        | $           | 2,358.1 |  
|                                        |                                                                           |                                                                                                |                                             |                                       |     |             |        

See accompanying notes to consolidated financial statements.

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HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
(Debtor-in-Possession as of December 5, 2001)

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions of dollars)
(Unaudited)

|                                                                                           |                                                                        |                                                                                  |                                          |       |                   |       |      |        |        |       |  
|------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------- | -------------------------------------------------------------------------------- | ---------------------------------------- | ----- | ----------------- | ----- | ---- | ------ | ------ | ----- | -
|                                                                                           |                                                                        |                                                                                  |                                          |       | Nine Months       |      
|                                                                                           |                                                                        |                                                                                  |                                          |       | Ended October 31, |      
|                                                                                           |                                                                        |                                                                                  |                                          |       |                   |      
|                                                                                           |                                                                        |                                                                                  |                                          |       | 2002              |       |      | 2001   |       
|                                                                                           |                                                                        |                                                                                  |                                          |       |                   |       |      |        |       
|Cash flows from operating activities:                                                      |                                                                        |                                                                                  |                                          |       |                   |       |      |       
|                                                                                           | Net loss                                                               |                                                                                  | $                                        | (57.4 | )                 |       | $    | (186.6 | )     
|Adjustments to reconcile net loss to net cash provided by
(used for) operating activities: |                                                                        |                                                                                  |                                          |       |                   |       |      |       
|                                                                                           |                                                                        | Depreciation and amortization                                                    |                                          |       | 96.2              |       |      |        | 93.2   |      
|                                                                                           |                                                                        | Amortization of goodwill                                                         |                                          |       |                  |       |      |        | 20.0   |      
|                                                                                           |                                                                        | Amortization of deferred financing fees                                          |                                          |       | 3.9               |       |      |        | 5.9    |      
|                                                                                           |                                                                        | Change in deferred income taxes                                                  |                                          |       | 0.5               |       |      |        | 5.3    |      
|                                                                                           |                                                                        | Asset impairments and other restructuring charges                                |                                          |       | 36.3              |       |      |        | 42.6   |      
|                                                                                           |                                                                        | Loss on investment in joint venture                                              |                                          |       |                  |       |      |        | 3.8    |      
|                                                                                           |                                                                        | Minority interest                                                                |                                          |       | 2.7               |       |      |        | 2.6    |      
|                                                                                           |                                                                        | Equity in losses of joint ventures                                               |                                          |       |                  |       |      |        | 0.9    |      
|                                                                                           |                                                                        | Gain on sale of assets and businesses                                            |                                          |       | (0.9              | )     |      |        | (0.6   | )    
|                                                                                           |                                                                        | Extraordinary gain                                                               |                                          |       |                  |       |      |        | (2.7   | )    
|                                                                                           |                                                                        | Changes in operating assets and liabilities that increase
(decrease) cash flows: |                                          |       |                   |       |      |        |        |      
|                                                                                           |                                                                        |                                                                                  | Receivables                              |       |                   | (52.9 | )    |        |        | 21.8  |  
|                                                                                           |                                                                        |                                                                                  | Inventories                              |       |                   | (9.9  | )    |        |        | 31.3  |  
|                                                                                           |                                                                        |                                                                                  | Prepaid expenses and other               |       |                   | (3.8  | )    |        |        | 5.0   |  
|                                                                                           |                                                                        |                                                                                  | Accounts payable and accrued liabilities |       |                   | 21.9  |      |        |        | (36.1 | )
|                                                                                           |                                                                        | Chapter 11 items:                                                                |                                          |       |                   |       |      |        |        |      
|                                                                                           |                                                                        |                                                                                  | Reorganization items                     |       |                   | 34.9  |      |        |        |      |  
|                                                                                           |                                                                        |                                                                                  | Interest accrued on Credit Agreement     |       |                   | 36.0  |      |        |        |      |  
|                                                                                           |                                                                        |                                                                                  | Payments related to Chapter 11 Filings   |       |                   | (56.2 | )    |        |        |      |  
|                                                                                           |                                                                        |                                                                                  |                                          |       |                   |      
|                                                                                           | Cash provided by operating activities                                  |                                                                                  |                                          | 51.3  |                   |       |      | 6.4    |       
|                                                                                           |                                                                        |                                                                                  |                                          |       |                   |      
|Cash flows from investing activities:                                                      |                                                                        |                                                                                  |                                          |       |                   |       |      |       
|                                                                                           | Purchase of property, plant, equipment and tooling                     |                                                                                  |                                          | (69.9 | )                 |       |      | (114.2 | )     
|                                                                                           | Proceeds from sale of assets and businesses                            |                                                                                  |                                          | 9.1   |                   |       |      | 9.5    |       
|                                                                                           | Purchase of businesses                                                 |                                                                                  |                                          | (7.2  | )                 |       |      |       |       
|                                                                                           | Net proceeds from termination of cross-currency swap
agreements        |                                                                                  |                                          |      |                   |       |      | 10.1   |       
|                                                                                           | Other, net                                                             |                                                                                  |                                          | (7.4  | )                 |       |      | (9.6   | )     
|                                                                                           |                                                                        |                                                                                  |                                          |       |                   |      
|                                                                                           |                                                                        | Cash used for investing activities                                               |                                          |       | (75.4             | )     |      |        | (104.2 | )    
|                                                                                           |                                                                        |                                                                                  |                                          |       |                   |      
|Cash flows from financing activities:                                                      |                                                                        |                                                                                  |                                          |       |                   |       |      |       
|                                                                                           | Change in borrowings under DIP facility                                |                                                                                  |                                          | 41.1  |                   |       |      |       |       
|                                                                                           | Changes in bank borrowings and revolving facility                      |                                                                                  |                                          | (20.1 | )                 |       |      | 246.7  |       
|                                                                                           | Proceeds from refinancing, net of related fees                         |                                                                                  |                                          |      |                   |       |      | 435.4  |       
|                                                                                           | Repayment of bank borrowings and revolving facility from
refinancing   |                                                                                  |                                          |      |                   |       |      | (381.3 | )     
|                                                                                           | Repayment of long-term debt from refinancing                           |                                                                                  |                                          |      |                   |       |      | (36.6  | )     
|                                                                                           | Payments on accounts receivable securitization                         |                                                                                  |                                          |      |                   |       |      | (71.6  | )     
|                                                                                           | Fees to amend Credit Agreement                                         |                                                                                  |                                          |      |                   |       |      | (2.7   | )     
|                                                                                           |                                                                        |                                                                                  |                                          |       |                   |       |     
|                                                                                           |                                                                        | Cash provided by financing activities                                            |                                          |       | 21.0              |       |      |        | 189.9  |      
|                                                                                           |                                                                        |                                                                                  |                                          |       |                   |      
|Effect of exchange rate changes on cash and cash equivalents                               |                                                                        |                                                                                  | 3.3                                      |       |                   |       | (1.0 | )     
|                                                                                           |                                                                        |                                                                                  |                                          |       |                   |      
|                                                                                           | Increase in cash and cash equivalents                                  |                                                                                  |                                          | 0.2   |                   |       |      | 91.1   |       
|Cash and cash equivalents at beginning of period                                           |                                                                        |                                                                                  | 45.2                                     |       |                   |       |     |       
|                                                                                           |                                                                        |                                                                                  |                                          |       |                   |       |     
|Cash and cash equivalents at end of period                                                 |                                                                        | $                                                                                | 45.4                                     |       |                   | $     | 91.1 |       
|                                                                                           |                                                                        |                                                                                  |                                          |       |                   |      
|Supplemental data:                                                                         |                                                                        |                                                                                  |                                          |       |                   |       |      |       
|                                                                                           | Cash paid for interest, excluding adequate protection
payments in 2002 |                                                                                  | $                                        | 12.7  |                   |       | $    | 102.8  |       
|                                                                                           | Cash
paid for income taxes, net                                        |                                                                                  | $                                        | 6.1   |                   |       | $    | 9.8    |       

See accompanying notes to consolidated financial statements.

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HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
Nine Months Ended October 31, 2002 and 2001
(Unaudited)
(Millions of Dollars Unless Otherwise Stated)

(1) Description of Business and Chapter 11 Filings

These financial statements should be read in conjunction with the
Companys Annual Report on Form 10-K for the fiscal year 2001, the Quarterly
Report on Form 10-Q for the fiscal quarter ended April 30, 2002 and the
Quarterly Report on Form 10-Q for the fiscal quarter ending July 31, 2002, as
filed with the Securities and Exchange Commission on May 1, 2002, June 16, 2002
and September 16, 2002, respectively.

Description of Business

Unless otherwise indicated, references to Company mean Hayes Lemmerz
International, Inc. and its subsidiaries and references to fiscal year means
the Companys year ended January 31 of the following year (e.g., fiscal 2002
refers to the period beginning February 1, 2002 and ending January 31, 2003,
fiscal 2001 refers to the period beginning February 1, 2001 and ending
January 31, 2002).

The Company is a leading supplier of wheels, wheel-end attachments,
aluminum structural components and automotive brake components. The Company is
the worlds largest manufacturer of automotive wheels. In addition, the Company
also designs and manufactures wheels and brake components for commercial
highway vehicles, and powertrain components and aluminum non-structural
components for the automotive, commercial highway, heating and general
equipment industries.

Chapter 11 Filings

On December 5, 2001, Hayes Lemmerz International, Inc., 30 of its
wholly-owned domestic subsidiaries and one wholly-owned Mexican subsidiary
(collectively, the Debtors) filed voluntary petitions for reorganization
relief (the Chapter 11 Filings or the Filings) under Chapter 11 of the
Bankruptcy Code in the United States Bankruptcy Court for the District of
Delaware (the Bankruptcy Court). The Chapter 11 Filings are being jointly
administered, for procedural purposes only, before the Bankruptcy Court under
Case No. 01-11490-MFW. During the pendency of these Filings, the Debtors remain
in possession of their properties and assets and management of the Company
continues to operate the businesses of the Debtors as debtors-in-possession. As
a debtor-in-possession, the Company is authorized to operate the business of
the Debtors, but may not engage in transactions outside of the ordinary course
of business without the approval of the Bankruptcy Court, after notice and the
opportunity for a hearing.

Under the Bankruptcy Code, actions to collect pre-petition indebtedness,
as well as most other pending litigation, are stayed and other contractual
obligations against the Debtors generally may not be enforced. Absent an order
of the Bankruptcy Court, substantially all pre-petition liabilities are subject
to settlement under a plan of reorganization to be voted upon by creditors and
equity holders proposed to receive distributions thereunder (under the
Bankruptcy Code, parties not receiving a distribution are deemed to reject and
are not entitled to vote) and approved by the Bankruptcy Court. A plan of
reorganization must be confirmed by the Bankruptcy Court, upon certain findings
being made by the Bankruptcy Court which are required by the Bankruptcy Code.
The Bankruptcy Court may confirm a plan notwithstanding the non-acceptance of
such plan by an impaired class of creditors or equity security holders if
certain requirements of the Bankruptcy Code are met.

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Pursuant to an order entered by the Bankruptcy Court on August 19, 2002,
the period during which the Company has the exclusive right to propose a plan
of reorganization expires on December 16, 2002. Although the current exclusive
period may be extended at the discretion of the Bankruptcy Court upon request,
the Debtors currently expect to file a proposed plan of reorganization with the
Bankruptcy Court prior to the expiration of the current exclusive period. There
can, however, be no assurance that such a reorganization plan or plans will be
proposed by the Debtors or confirmed by the Bankruptcy Court, or that any such
plan(s) will be consummated.

The Company currently expects that any plan of reorganization it might
propose likely will provide that the existing common stock of the Company would
be cancelled and that certain creditors of the Company would be issued new
common stock in the reorganized Company. Although there can be no assurance
that a plan of reorganization proposed by the Debtors would be confirmed by the
Bankruptcy Court or consummated, holders of common stock of the Company should
assume that they could receive little or no value as part of any plan of
reorganization. In light of the foregoing, the Company considers the value of
the common stock to be highly speculative.

Accordingly, the Company urges that appropriate caution be exercised with
respect to existing and future investments in common stock of the Company or in
claims relating to pre-petition liabilities and/or other securities of the
Company.

Under the priority scheme established by the Bankruptcy Code,
substantially all post-petition liabilities and pre-petition liabilities need
to be satisfied before shareholders are entitled to receive any distribution.
The ultimate recovery, if any, to creditors and/or shareholders will not be
determined until confirmation of a plan or plans of reorganization and
substantial completion of claims reconciliation by the Company and claims
allowance by the Bankruptcy Court.

On January 31, 2002, the Debtors filed with the Bankruptcy Court schedules
and statements of financial affairs setting forth, among other things, the
assets and liabilities of the Debtors as shown on the Companys books and
records, subject to the assumptions contained in certain notes filed in
connection therewith. The Debtors subsequently amended the schedules and
statements on March 21, 2002 and July 12, 2002. All of the schedules are
subject to further amendment or modification. On March 26, 2002, the Bankruptcy
Court established June 3, 2002 as the deadline for filing proofs of claim with
the Bankruptcy Court. The Debtors mailed notice of the proof of claim deadline
to all known creditors. Differences between amounts scheduled by the Debtors
and claims by creditors currently are being investigated and resolved in
connection with the Debtors claims resolution process. Although that process
has commenced and is ongoing, in light of the number of creditors of the
Debtors and certain claims objection blackout periods, the claims resolution
process may take considerable time to complete. Accordingly, the ultimate
number and amount of allowed claims is not presently known and the ultimate
distribution with respect to allowed claims is not presently ascertainable.

In addition to any plan of reorganization it may file, the Company
currently expects to file a disclosure statement intended to provide
information sufficient to enable holders of claims or interests to make an
informed judgment about the plan. The disclosure statement would set forth,
among other things, the Companys proposed plan of reorganization, proposed
distributions that would be made to the Companys stakeholders under the
proposed plan, certain effects of confirmation of the plan, and various risk
factors associated with the plan and confirmation thereof. It would also
contain information regarding, among other matters, significant events that
occurred during the Companys Chapter 11 proceedings, the anticipated
organization, operation and financing of the reorganized Company, as well as
the confirmation process and the voting procedures holders of claims and/or
interests must follow for their votes to be counted.

Although the Debtors expect to file a reorganization plan or plans that
provide for emergence from bankruptcy during the second quarter of fiscal 2003,
there can be no assurance that such a reorganization plan or plans will be
proposed by the Debtors or confirmed by the Court, or that any such plan(s)
will be consummated in that time period or at any later time. Currently, it is
not possible to predict the length of time the Company will operate under the
protection of Chapter 11 and the supervision of the Bankruptcy Court, the
outcome of the Chapter 11 proceedings in general, or the effect of the
proceedings on the business of the Company or on the interest of the various
creditors and stakeholders.

Pursuant to AICPA Statement of Position 90-7 Financial Reporting by
Entities in Reorganization under the Bankruptcy Code, (SOP 90-7), the
accounting for the effects of the reorganization will occur once a plan of
reorganization is confirmed by the Bankruptcy Court and there are no remaining
contingencies material to

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completing the implementation of the plan. The fresh start accounting
principles pursuant to SOP 90-7 provide, among other things, for the Company to
determine the value to be assigned to the equity of the reorganized Company as
of a date selected for financial reporting purposes. The accompanying
consolidated financial statements do not reflect: (a) the requirements of SOP
90-7 for fresh start accounting, (b) the realizable value of assets on a
liquidation basis or their availability to satisfy liabilities; (c) aggregate
pre-petition liability amounts that may be allowed for unrecorded claims or
contingencies, or their status or priority; (d) the effect of any changes to
the Debtors capital structure or in the Debtors business operations as the
result of an approved plan of reorganization; or (e) adjustments to the
carrying value of assets (including goodwill and other intangibles) or
liability amounts that may be necessary as the result of future actions by the
Bankruptcy Court.

On May 30, 2002, the Bankruptcy Court entered an order approving, among
other things, the critical employee retention plan filed with the Bankruptcy
Court in February 2002 which is designed to compensate certain critical
employees in order to assure their retention and availability during the
Companys restructuring. The plan has two components which will (i) reward
critical employees who remain with the Company (and certain affiliates of the
Company who are not directly involved in the restructuring) during and through
the completion of the restructuring (the Retention Bonus) and (ii) provide
additional incentives to a more limited group of the most senior critical
employees if the enterprise value upon completing the restructuring exceeds an
established baseline (the Restructuring Performance Bonus).

The maximum possible aggregate amount of Retention Bonus is approximately
$8.5 million and is payable in cash upon the consummation of the restructuring.
Pursuant to plan provisions, thirty-five percent, or approximately $3.2
million, of such Retention Bonus was paid on October 1, 2002. The maximum
possible aggregate amount of any Restructuring Performance Bonus is $37.5
million and will be payable as soon as reasonably practicable after the
consummation of the restructuring. Up to 70% of the amount by which a
Restructuring Performance Bonus exceeds a participants Retention Bonus may be
paid in restricted shares or units of any common stock of the Company that is
issued as part of a confirmed plan of reorganization in connection with the
restructuring, if the Companys Board of Directors elects, within the time
period specified in the plan. The amount of any Restructuring Performance
Bonus to be earned is not currently estimable and will not be determined until
confirmation of a plan or plans of reorganization.

As of October 31, 2002, there were $42.1 million of outstanding borrowings
and $4.7 million in letters of credit issued under the Companys
Debtor-In-Possession revolving credit facility (the DIP Facility). As of
December 13, 2002, there were $23.3 million of outstanding borrowings and $4.7
million in letters of credit issued in connection with the DIP Facility. The
amount of availability under the DIP Facility as of December 13, 2002 was $74.4
million, net of the aforementioned borrowings and issued letters of credit.

Reorganization items as reported in the accompanying consolidated
statement of operations for the three months and nine months ended October 31,
2002 is comprised of:

|                                                                          |       |   |              |     |  |             |      |      | 
|------------------------------------------------------------------------- | ----- | - | ------------ | --- |  | ----------- | ---- | ---- | 
|                                                                          |       |   | Three Months |     |  | Nine Months |     
|                                                                          |       |   | Ended        |     |  | Ended       |     
|                                                                          |       |   |              |     |  |             |     
|Critical employee retention plan provision                                |       | $ | 0.8          |     |  | $           | 6.0  |     
|Estimated accrued liability for rejected prepetition
leases and contracts |       |   |             |     |  |             | 9.5  |     
|Professional fees directly related to the Filing                          |       |   | 6.3          |     |  |             | 20.9 |     
|Gain on settlement of prepetition liabilities                             |       |   |             |     |  |             | (1.2 | )   
|Interest earned during Chapter 11 reorganization
proceedings              |       |   | (0.1         | )   |  |             | (0.3 | )   
|                                                                          |       |   |              |     |  |            
|                                                                          | Total |   | $            | 7.0 |  |             | $    | 34.9 | 
|                                                                          |       |   |              |     |  |            

Cash payments with respect to such reorganization items of $10.5 million
and $21.5 million made during the three months and nine months ended October
31, 2002, respectively, consisted of professional fees and the Retention Bonus.

The condensed financial statements of the Debtors are presented in Note
10, Condensed Consolidating Financial Statements.

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(2) Basis of Presentation

As discussed in Note 1, the Company filed a voluntary petition for
reorganization relief under Chapter 11 of the Bankruptcy Code in December 2001.
The accompanying consolidated financial statements have been prepared in
accordance with SOP 90-7 and on a going concern basis. Continuing as a going
concern contemplates continuity of operations, realization of assets, and
payment of liabilities in the ordinary course of business. The accompanying
consolidated financial statements do not reflect adjustments that might result
if the Company is unable to continue as a going concern. The Companys recent
history of significant losses, deficit in stockholders equity and issues
related to non-compliance with debt covenants raise substantial doubt about the
Companys ability to continue as a going concern. Continuing as a going concern
is dependent upon, among other things, the Companys formulation of a plan of
reorganization that is confirmed by the Bankruptcy Court, the success of future
business operations, and the generation of sufficient cash from operations and
financing sources to meet the Companys obligations. SOP 90-7 requires the
segregation of liabilities subject to compromise by the Bankruptcy Court as of
the bankruptcy filing date, and identification of all transactions and events
that are directly associated with the reorganization of the Company.

The Companys unaudited interim consolidated financial statements do not
include all of the disclosures required by accounting principles generally
accepted in the United States of America for annual financial statements. In
the opinion of management, all adjustments considered necessary for a fair
presentation of the interim period results have been included. Operating
results for the nine months ended October 31, 2002 are not necessarily
indicative of the results that may be expected for the full fiscal year ending
January 31, 2003.

Certain prior period amounts have been reclassified to conform to the
current year presentation.

(3) Inventories

The major classes of inventory are as follows:

|                         |       |   |             |       |  |             |      |       | 
|------------------------ | ----- | - | ----------- | ----- |  | ----------- | ---- | ----- | 
|                         |       |   | October 31, |       |  | January 31, |     
|                         |       |   | 2002        |       |  | 2002        |     
|                         |       |   |             |       |  |             |     
|Raw materials            |       | $ | 34.9        |       |  | $           | 38.7 |      
|Work-in-process          |       |   | 49.0        |       |  |             | 39.2 |      
|Finished goods           |       |   | 44.8        |       |  |             | 41.4 |      
|Spare parts and supplies |       |   | 36.4        |       |  |             | 35.9 |      
|                         |       |   |             |       |  |            
|                         | Total |   | $           | 165.1 |  |             | $    | 155.2 | 
|                         |       |   |             |       |  |            

(4) Property, Plant and Equipment

The major classes of property, plant and equipment are as follows:

|                         |                                    |   |             |       |  |             |         |       | 
|------------------------ | ---------------------------------- | - | ----------- | ----- |  | ----------- | ------- | ----- | 
|                         |                                    |   | October 31, |       |  | January 31, |        
|                         |                                    |   | 2002        |       |  | 2002        |        
|                         |                                    |   |             |       |  |             |        
|Land                     |                                    | $ | 29.9        |       |  | $           | 29.9    |      
|Buildings                |                                    |   | 255.2       |       |  |             | 240.6   |      
|Machinery and equipment  |                                    |   | 1,091.3     |       |  |             | 1,063.3 |      
|                         |                                    |   |             |       |  |            
|                         |                                    |   | 1,376.4     |       |  |             | 1,333.8 |      
|Accumulated depreciation |                                    |   | (440.7      | )     |  |             | (368.4  | )    
|                         |                                    |   |             |       |  |            
|                         | Property, plant and equipment, net |   | $           | 935.7 |  |             | $       | 965.4 | 
|                         |                                    |   |             |       |  |            

(5) Asset Impairments and Other Restructuring Charges

Asset impairments and other restructuring charges recorded by the Company
during the three months and nine months ended October 31, 2002 and 2001 are as
follows (millions of dollars):

|                                       |       |   |              |      |  |              |     |     |      |   |      |      |  |   |      |      | 
|-------------------------------------- | ----- | - | ------------ | ---- |  | ------------ | --- | --- | ---- | - | ---- | ---- |  | - | ---- | ---- | 
|                                       |       |   | Three        |      |  | Nine         |    
|                                       |       |   | Months Ended |      |  | Months Ended |    
|                                       |       |   |              |      |  |              |    
|                                       |       |   | 2002         |      |  | 2001         |     |     | 2002 |   |      | 2001 | 
|                                       |       |   |              |      |  |              |     |     |      |   |      |      | 
|Impairment of manufacturing facilities |       | $ | 0.3          |      |  | $            |    |     |      | $ | 0.6  |      |  | $ | 28.5 |     
|Impairment of machinery and equipment  |       |   | 5.3          |      |  |              | 4.6 |     |      |   | 22.6 |      |  |   | 13.5 |     
|Facility closures                      |       |   |             |      |  |              |    |     |      |   | 6.7  |      |  |   | 0.6  |     
|Other restructuring                    |       |   | 5.4          |      |  |              |    |     |      |   | 6.4  |      |  |   |     |     
|                                       |       |   |              |      |  |              |     |     |      |   |      |     
|                                       | Total |   | $            | 11.0 |  |              | $   | 4.6 |      |   | $    | 36.3 |  |   | $    | 42.6 | 
|                                       |       |   |              |      |  |              |     |     |      |   |      |     

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Impairment of Manufacturing Facilities

Based on current real estate market conditions, the Company recorded an
asset impairment charge of $0.3 million in the third quarter of fiscal 2002 to
write down its Somerset, Kentucky facility to fair value.

As a consequence of the notifications received in April 2001 by the
Company from certain customers of its Petersburg, Michigan manufacturing
facility regarding significantly lower future product orders and the failure to
obtain adequate customer support required to relocate production, management
revised its estimate of future undiscounted cash flows expected to be generated
by the facility. The Company concluded that this estimated amount was less than
the carrying value of the long-lived assets related to the Petersburg facility
and, accordingly, recognized an impairment charge of $28.5 million in the first
nine months of fiscal 2001. An additional impairment charge of $0.3 million
was recorded in the second quarter of fiscal 2002 to further write down the
Petersburg facility to fair value based on current real estate market
conditions.

Impairment of Machinery and Equipment

During the third quarter of fiscal 2002, the Company recognized asset
impairment losses of $5.3 million on certain machinery and equipment in the
Automotive Wheel segment due to a change in managements plan for the future
use of idled machinery and equipment and the discontinuance of certain
machinery and equipment due to changes in product mix. Such investments in
fixed assets were written down to fair value based on the expected scrap value,
if any, of such machinery and equipment.

In the second quarter of fiscal 2002, the Company determined, based on its
most recent sales projections for the facility, that its current estimate of
the future undiscounted cash flows from its manufacturing facility in La
Mirada, California would not be sufficient to recover the carrying value of the
facilitys fixed assets and production tooling. Accordingly, the Company
recorded an estimated impairment loss of $15.5 million in the second quarter of
fiscal 2002 on those assets. During the second quarter of fiscal 2002, the
Company also recognized asset impairment losses of $1.8 million on certain
machinery and equipment due primarily to a change in managements plan for the
future use of idled machinery and equipment. Such investments in fixed assets
were written down to fair value based on the expected scrap value, if any, of
such machinery, equipment and tooling.

During the third quarter of fiscal 2001 the Company recognized asset
impairment losses of $4.6 million related principally to $2.3 million due to
the discontinuance of the Companys Equipment and Engineering business located
in Montague, Michigan, $0.9 million related to the abandonment of a greenfield
project in Thailand, and impairments of investments in other fixed assets.
Such investments in fixed assets were written down to fair value based on the
expected scrap value, if any, of such machinery, equipment and tooling.

During the second quarter of fiscal 2001, the company recognized an
impairment loss of $6.4 million related principally to a change in managements
plan for future use of idled machinery and equipment in the Automotive Wheel
segment, and to investments in machinery, equipment and tooling at its
Somerset, Kentucky facility. Such assets were written down to fair value based
on the expected scrap value, if any, of such machinery, equipment, and tooling.
During the first quarter of fiscal 2001, the Company recognized an asset
impairment loss of $2.5 million related to the abandonment of plans to continue
to invest in the start-up of certain single-purpose equipment.

Facility Closures

In February 2002, the Company committed to a plan to close its
manufacturing facility in Somerset, Kentucky. In connection with the closure of
the Somerset facility (which commenced during February 2002), the Company
recorded an estimated restructuring charge of $6.7 million in the first quarter
of fiscal 2002. This charge includes amounts related to lease termination costs
and other closure costs including security and maintenance costs subsequent to
the shut down date. The amount of the charge related to lease terminations of
$3.5 million has been classified as a liability subject to compromise at
October 31, 2002 and has been excluded from the table below. Of the other
closure costs, approximately $1.8 million remained unpaid at October 31, 2002,
and is expected to be paid during fiscal 2002 and fiscal 2003.

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In the fourth quarter of fiscal 2001, the Company committed to a plan to
close its manufacturing facility in Bowling Green, Kentucky and recorded a
restructuring charge of $10.7 million. This charge relates to the termination
of leases and other closure costs, including security and maintenance costs
subsequent to the shutdown date. Originally planned to begin during July 2002,
the closure of the plant has been temporarily delayed, and as such, no costs
have been paid related to the shutdown. The closure costs are expected to be
paid in fiscal 2003.

In June 2001, the Company committed to a plan to close the Petersburg
facility, and accordingly recorded an estimated restructuring charge of $0.6
million. This charge includes amounts related to security and other
maintenance costs subsequent to the shutdown date. Of this charge, $0.6
million remained unpaid at October 31, 2002, and is expected to be paid during
fiscal 2002 and fiscal 2003.

Other Restructuring Charges

In fiscal 2002, the Company offered an early retirement option to
approximately 30 employees, of whom 24 accepted by the respective acceptance
date. In connection with this early retirement offer, the Company recorded a
charge of $3.4 million primarily related to supplemental retirement benefits
and continued medical benefits. The retirement benefit portion of the charge
is recorded as a component of the Companys accrued benefit cost of the
applicable defined benefit plans, and will be funded as part of the
requirements of those entire plans.

During the third quarter of fiscal 2002, the Company recorded a charge of
$1.0 million related to the shutdown of its Petersburg facility. Additionally,
as part of ongoing restructuring and rationalization of its operations, the
Company recorded severance costs of $1.0 million in the third quarter of fiscal
2002, all of which had been paid by October 31, 2002.

The following table describes the activity in the balance sheet accounts
affected by the severance and other restructuring charges noted above during
the nine months ended October 31, 2002:

|                    |       |   |                  |      |  |               |           |     |                  |   |      |          |      |   |         |                  |   |   |      |      | 
|------------------- | ----- | - | ---------------- | ---- |  | ------------- | --------- | --- | ---------------- | - | ---- | -------- | ---- | - | ------- | ---------------- | - | - | ---- | ---- | 
|                    |       |   |                  |      |  |               | Severance |     |                  |   |      |          |      |   |         |                  |   |   |      |     
|                    |       |   |                  |      |  |               | and Other |     |                  |   |      |          |      |   |         |                  |   |   |      |     
|                    |       |   | January 31, 2002 |      |  | Restructuring |           |     |                  |   |      |          | Cash |   |         | October 31, 2002 |  
|                    |       |   | Accrual          |      |  | Charges       |           |     | Reclassification |   |      | Payments |      |   | Accrual |                 
|                    |       |   |                  |      |  |               |           |     |                  |   |      |          |      |   |         |                 
|Facility exit costs |       | $ | 11.7             |      |  | $             | 6.7       |     |                  | $ | (3.5 | )        |      | $ | (1.4    | )                |   | $ | 13.5 |     
|Severance           |       |   | 6.0              |      |  |               | 2.0       |     |                  |   |     |          |      |   | (4.7    | )                |   |   | 3.3  |     
|                    |       |   |                  |      |  |               |           |     |                  |   |      |          |      |   |        
|                    | Total |   | $                | 17.7 |  |               | $         | 8.7 |                  |   | $    | (3.5     | )    |   | $       | (6.1             | ) |   | $    | 16.8 | 
|                    |       |   |                  |      |  |               |           |     |                  |   |      |          |      |   |        

(6) Earnings Per Share

Basic earnings (loss) per share are calculated by dividing net income
(loss) by the weighted average number of common shares outstanding. Diluted
earnings (loss) per share are computed by dividing net income (loss) by the
diluted weighted average shares outstanding. Diluted weighted average shares
assume the exercise of stock options and warrants, so long as they are not
anti-dilutive.

Shares outstanding for the three months and nine months ended October 31,
2002 and 2001, were as follows (thousands of shares):

|                                        |  |                    |        |  |                   |  |        |      |  |  |        |  |  |  |        | 
|--------------------------------------- |  | ------------------ | ------ |  | ----------------- |  | ------ | ---- |  |  | ------ |  |  |  | ------ | 
|                                        |  | Three Months Ended |        |  | Nine Months Ended | 
|                                        |  |                    |        |  |                   | 
|                                        |  | 2002               |        |  | 2001              |  |        | 2002 |  |  | 2001   | 
|                                        |  |                    |        |  |                   |  |        |      |  |  |        | 
|Weighted average shares outstanding     |  |                    | 28,456 |  |                   |  | 28,456 |      |  |  | 28,456 |  |  |  | 28,456 | 
|Dilutive effect of options and warrants |  |                    |       |  |                   |  |       |      |  |  |       |  |  |  |       | 
|                                        |  |                    |        |  |                   |  |        |      |  |  |        | 
|Diluted shares outstanding              |  |                    | 28,456 |  |                   |  | 28,456 |      |  |  | 28,456 |  |  |  | 28,456 | 
|                                        |  |                    |        |  |                   |  |        |      |  |  |        | 

For the three month and nine month periods ending October 31, 2002 and
2001, respectively, all options and warrants were excluded from the calculation
of diluted earnings (loss) per share as the effect was anti-dilutive.

(7) Comprehensive Income

The components of comprehensive loss for the nine months ended October 31,
2002 and 2001 are as follows:

|                                 |                          |   |       |       |   |      |        |        |  
|-------------------------------- | ------------------------ | - | ----- | ----- | - | ---- | ------ | ------ | -
|                                 |                          |   | 2002  |       |   | 2001 |       
|                                 |                          |   |       |       |   |      |       
|Net loss                         |                          | $ | (57.4 | )     |   | $    | (186.6 | )     
|Currency translation adjustments |                          |   | 13.6  |       |   |      | (19.6  | )     
|                                 |                          |   |       |       |   |     
|                                 | Total comprehensive loss |   | $     | (43.8 | ) |      | $      | (206.2 | )
|                                 |                          |   |       |       |   |     

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(8) Liabilities Subject to Compromise

The principal categories of claims classified as liabilities subject to
compromise under reorganization proceedings are identified below. Under the
Bankruptcy Code, actions to collect pre-petition indebtedness, as well as most
other pending litigation, are stayed and other contractual obligations against
the Debtors generally may not be enforced. Absent an order of the Bankruptcy
Court, substantially all pre-petition liabilities are subject to settlement
under a plan of reorganization to be voted upon by creditors and equity holders
and approved by the Bankruptcy Court. A plan of reorganization must be
confirmed by the Bankruptcy Court, upon certain findings being made by the
Bankruptcy Court which are required by the Bankruptcy Code. The Bankruptcy
Court may confirm a plan notwithstanding the non-acceptance of such plan by an
impaired class of creditors or equity security holders if certain requirements
of the Bankruptcy Code are met.

On January 31, 2002, the Debtors filed with the Bankruptcy Court schedules
and statements of financial affairs setting forth, among other things, the
assets and liabilities of the Debtors as shown on the Companys books and
records, subject to the assumptions contained in certain notes filed in
connection therewith. The Debtors subsequently amended the schedules and
statements on March 21, 2002 and July 12, 2002. All of the schedules are
subject to further amendment or modification. On March 26, 2002, the Bankruptcy
Court established June 3, 2002 as the deadline for filing proofs of claim with
the Bankruptcy Court. The Debtors mailed notice of the proof of claim deadline
to all known creditors. Differences between amounts scheduled by the Debtors
and claims by creditors currently are being investigated and resolved in
connection with the Debtors claims resolution process. Although that process
has commenced and is ongoing, in light of the number of creditors of the
Debtors and certain claims objection blackout periods, the claims resolution
process may take considerable time to complete. Accordingly, the ultimate
number and amount of allowed claims is not presently known and the ultimate
distribution with respect to allowed claims is not presently ascertainable.

Recorded Liabilities

On a consolidated basis, recorded liabilities subject to compromise under
Chapter 11 proceedings consisted of the following (millions of dollars):

|                                                            |                    |       |       |             |         |   |             |         |         | 
|----------------------------------------------------------- | ------------------ | ----- | ----- | ----------- | ------- | - | ----------- | ------- | ------- | 
|                                                            |                    |       |       | October 31, |         |   | January 31, |        
|                                                            |                    |       |       | 2002        |         |   | 2002        |        
|                                                            |                    |       |       |             |         |   |             |        
|Accounts payable and accrued liabilities, principally
trade |                    | $     | 153.0 |             |         | $ | 156.9       |        
|Credit Agreement:                                           |                    |       |       |             |         |   |             |        
|                                                            | Term loans         |       |       | 176.8       |         |   |             | 176.8   |        
|                                                            | Revolving facility |       |       | 573.8       |         |   |             | 572.1   |        
|                                                            | Accrued interest   |       |       | 34.5        |         |   |             | 13.4    |        
|Senior Notes and Senior Subordinated Notes:                 |                    |       |       |             |         |   |             |        
|                                                            | Face value         |       |       | 1,152.8     |         |   |             | 1,152.8 |        
|                                                            | Accrued interest   |       |       | 49.0        |         |   |             | 49.0    |        
|                                                            |                    |       |       |             |         |  
|                                                            |                    | Total |       | $           | 2,139.9 |   |             | $       | 2,121.0 | 
|                                                            |                    |       |       |             |         |  

During the first nine months of fiscal 2002, there were $1.7 million in
letters of credit drawn against the Credit Agreement. Accordingly, the
pre-petition claim under the Credit Agreement was increased by this amount.
While any additional availability under the Credit Agreement has been
terminated, letters of credit amounting to approximately $9.7 million remain
outstanding.

The Bankruptcy Code generally disallows the payment of interest that would
otherwise accrue post-petition with respect to unsecured or undersecured
claims. Lazard Freres & Co. LLC, the Companys financial advisors and
investment bankers, has recently provided the Company with a preliminary
estimate of the value of the Companys operations for reorganization plan
purposes. The preliminary valuation supports the Companys previous estimate
that, under certain circumstances, the claims under the Credit Agreement may be
fully secured or oversecured. There may also be circumstances in
which the claims under the Credit Agreement may be undersecured.

The Company has continued to record interest expense accruing
postpetition with respect to the Credit Agreement. The amount of such unpaid
interest recorded at October 31, 2002 was $34.5 million, net of the second and
third quarter payments noted below. This amount has been classified as a
liability subject to compromise in the

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accompanying consolidated balance sheet. The Company has not continued to
record interest expense accruing postpetition with respect to the Senior Notes
and the Senior Subordinated Notes. The amount of such interest accruing
postpetition that has not been recorded at October 31, 2002 was $106.6 million.
The recorded amount of prepetition accrued interest with respect to the Senior
Notes and the Senior Subordinated Notes was $49.0 million, which has been
classified as a liability subject to compromise in the accompanying
consolidated balance sheet at October 31, 2002.

As discussed above, it is not possible to predict the outcome of the
Chapter 11 proceedings in general. The ultimate recovery with respect to these
and other claims, if any, will not be determined until confirmation of a plan
or plans of reorganization.

The DIP Facility provides for the postpetition cash payment at certain
intervals of interest and fees accrued at the filing date and accruing
postpetition under the Companys prepetition credit agreements, if certain
tests are satisfied relating to the liquidity position and earnings of the
Company and its subsidiaries, and the repatriation of funds from foreign
subsidiaries. During the second and third quarters of fiscal 2002, payments of
$12.1 million and $8.3 million, respectively, were made for a portion of
accrued interest and fees with respect to this provision. Further, the Company
paid $2.9 million on November 1, 2002 with respect to this provision.

During the third quarter of fiscal 2002, the Company and the lenders to
the DIP Credit Agreement discovered that the applicable period(s) during which
certain liquidity and earnings tests thereunder are measured had not been
properly memorialized therein and the parties intentions were frustrated
thereby. Accordingly, on
December 4, 2002, the Bankruptcy Court granted authority to the Debtors and the
lenders to enter into a Third Amendment
of the DIP Credit Agreement to correct the measurement period definition. As
modified by the Third Amendment, the DIP Credit Agreement would allow the
Company to make a $13.8 million payment that is currently
prohibited under the DIP Credit Agreement.

Contingent Liabilities

Contingent liabilities of the Debtors as of the Chapter 11 Filing date are
also subject to compromise. The Company is a party to litigation matters and
claims that are normal in the course of its operations. Generally, litigation
related to prepetition claims, as defined by the Bankruptcy Code, is stayed.
Also, as a normal part of their operations, the Companys subsidiaries
undertake certain contractual obligations, warranties and guarantees in
connection with the sale of products or services. The effect of the bankruptcy
process on these matters cannot be predicted with certainty.

(9) Segment Reporting

The Company is organized based primarily on markets served and products
produced. Under this organization structure, the Companys operating segments
have been aggregated into three reportable segments: Automotive Wheels,
Components, and Other. The Other category includes Commercial Highway products,
the corporate office and elimination of intercompany activities, none of which
meet the requirements of being classified as an operating segment.

The following table represents revenues and other financial information by
business segment as of and for the nine months ended October 31:

|                  |       |   |         |         |  |                   |       |         |              |   |       |       |   |   |        |        |   |      |         |         |  |   |         |         | 
|----------------- | ----- | - | ------- | ------- |  | ----------------- | ----- | ------- | ------------ | - | ----- | ----- | - | - | ------ | ------ | - | ---- | ------- | ------- |  | - | ------- | ------- | 
|                  |       |   | Revenue |         |  | Net Income (Loss) |       |         | Total Assets |  
|                  |       |   |         |         |  |                   |       |         |              |  
|                  |       |   | 2002    |         |  | 2001              |       |         | 2002         |   |       | 2001  |   |   | 2002   |        |   | 2001 |        
|                  |       |   |         |         |  |                   |       |         |              |   |       |       |   |   |        |        |   |      |        
|Automotive Wheels |       | $ | 878.4   |         |  | $                 | 952.0 |         |              | $ | (21.5 | )     |   | $ | (51.4  | )      |   | $    | 1,214.7 |         |  | $ | 1,282.0 |        
|Components        |       |   | 568.6   |         |  |                   | 503.1 |         |              |   | 3.8   |       |   |   | (19.2  | )      |   |      | 900.6   |         |  |   | 884.7   |        
|Other             |       |   | 79.1    |         |  |                   | 119.4 |         |              |   | (39.7 | )     |   |   | (116.0 | )      |   |      | 300.1   |         |  |   | 437.6   |        
|                  |       |   |         |         |  |                   |       |         |              |   |       |       |   |   |        |        |   |     
|                  | Total |   | $       | 1,526.1 |  |                   | $     | 1,574.5 |              |   | $     | (57.4 | ) |   | $      | (186.6 | ) |      | $       | 2,415.4 |  |   | $       | 2,604.3 | 
|                  |       |   |         |         |  |                   |       |         |              |   |       |       |   |   |        |        |   |     

The net income (loss) amounts for the nine months ended October 31, 2002
presented in the above table include reorganization items of $9.3 million,
$(1.0) million and $26.6 million in Automotive Wheels, Components and Other,
respectively.

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(10) Condensed Consolidating Financial Statements

The following condensed consolidating financial statements present in one
format the financial information required for entities that have filed for
reorganization relief under Chapter 11 of the Bankruptcy Code pursuant to SOP
90-7, and the financial information required with respect to those entities
which guarantee certain of the Companys debt.

The condensed consolidating financial statements are presented on the
equity method. Under this method, the investments in subsidiaries are recorded
at cost and adjusted for the Companys share of the subsidiaries cumulative
results of operations, capital contributions, distributions and other equity
changes. The principal elimination entries eliminate investments in
subsidiaries and intercompany balances and transactions.

Guarantor and Nonguarantor Financial Statements

The senior subordinated notes and senior notes are guaranteed by certain
of the Companys domestic subsidiaries. Certain other domestic subsidiaries and
the foreign subsidiaries (the Non-Guarantor Subsidiaries) do not guarantee
the senior subordinated notes and the senior notes. In the third quarter of
fiscal 2001, amendments were entered into by the Company and holders of the
Companys 8 1/4% and 9 1/8% Senior Subordinated Notes (the 8 1/4% Notes and
the 9 1/8% Notes). Such amendments conformed the lists of guarantor
subsidiaries of the respective senior subordinated notes to that list of
subsidiaries guaranteeing the Companys 11 7/8% Senior Notes (the Conformed
Guarantor Subsidiaries). The list of guarantor subsidiaries of the Companys
11% Senior Subordinated Notes (the 11% Notes) was not conformed.

The condensed consolidating financial information as of and for the nine
months ended October 31, 2002 for those guarantor subsidiaries of the 11% Notes
(the Guarantor Subsidiaries) has been presented separately below as the 11%
Notes are not guaranteed by the Conformed Guarantor Subsidiaries. Collectively,
the Guarantor Subsidiaries and the Conformed Guarantor Subsidiaries guarantee
the 8 1/4% Notes, the 9 1/8% Notes, and the 11 7/8% Senior Notes.

Financial Statements for Entities in Reorganization Under Chapter 11

As discussed in Note 1, Hayes Lemmerz International, Inc. (the Parent),
30 of its wholly-owned domestic subsidiaries, and one wholly-owned Mexican
subsidiary filed voluntary petitions for reorganization relief under Chapter
11. In accordance with SOP 90-7, condensed consolidating financial information
is presented below as of and for the nine months ended October 31, 2002.

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CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the Nine Months Ended October 31, 2002
(Unaudited)

|                                                               |                                                              |   |         |       |   |              |           |       |              |           |           |              |        |              |              |              |   |              |       |      |       |   |              |      |   |   |         |       |  
|-------------------------------------------------------------- | ------------------------------------------------------------ | - | ------- | ----- | - | ------------ | --------- | ----- | ------------ | --------- | --------- | ------------ | ------ | ------------ | ------------ | ------------ | - | ------------ | ----- | ---- | ----- | - | ------------ | ---- | - | - | ------- | ----- | -
|                                                               |                                                              |   | Debtors |       |   | Non-Debtors  |           |       |              |           |           |              |        |              |             
|                                                               |                                                              |   |         |       |   |              |           |       |              |           |           |              |        |              |             
|                                                               |                                                              |   |         |       |   |              |           |       |              |           | Conformed |              |        | Nonguarantor |              |              |   |              |       |      |       |   |              |      |   |   |        
|                                                               |                                                              |   |         |       |   |              | Guarantor |       |              | Guarantor |           |              | Debtor |              |              | Nonguarantor |   |              |       |      |       |   | Consolidated |     
|                                                               |                                                              |   | Parent  |       |   | Subsidiaries |           |       | Subsidiaries |           |           | Subsidiaries |        |              | Subsidiaries |              |   | Eliminations |       |      | Total |  
|                                                               |                                                              |   |         |       |   |              |           |       |              |           |           |              |        |              |              |              |   |              |       |      |       |  
|Net sales                                                      |                                                              | $ | 180.6   |       |   | $            | 352.0     |       |              | $         | 402.1     |              |        | $            | 33.4         |              |   | $            | 581.1 |      |       | $ | (23.1        | )    |   | $ | 1,526.1 |      
|Cost of goods sold                                             |                                                              |   | 180.6   |       |   |              | 322.7     |       |              |           | 368.0     |              |        |              | 36.7         |              |   |              | 488.1 |      |       |   | (23.5        | )    |   |   | 1,372.6 |      
|                                                               |                                                              |   |         |       |   |              |           |       |              |           |           |              |        |              |              |              |   |              |       |      |      
|                                                               | Gross profit (loss)                                          |   |         |      |   |              |           | 29.3  |              |           |           | 34.1         |        |              |              | (3.3         | ) |              |       | 93.0 |       |   |              | 0.4  |   |   |         | 153.5 |  
|Marketing, general and
administration                          |                                                              |   | 11.3    |       |   |              | 19.5      |       |              |           | 13.4      |              |        |              |             |              |   |              | 29.9  |      |       |   |             |      |   |   | 74.1    |      
|Engineering and product
development                            |                                                              |   | 3.5     |       |   |              | 5.5       |       |              |           | 2.1       |              |        |              |             |              |   |              | 4.5   |      |       |   |             |      |   |   | 15.6    |      
|Amortization of
goodwill                                       |                                                              |   |        |       |   |              |          |       |              |           | (0.4      | )            |        |              |             |              |   |              | 0.4   |      |       |   |             |      |   |   |        |      
|Equity in (earnings)
losses of subsidiaries
and joint ventures |                                                              |   | 14.5    |       |   |              | (9.1      | )     |              |           | (10.5     | )            |        |              | (0.7         | )            |   |              | (0.8  | )    |       |   | 6.6          |      |   |   |        |      
|Asset impairments and
other restructuring
charges              |                                                              |   | 5.7     |       |   |              | 19.4      |       |              |           | 9.0       |              |        |              | 0.4          |              |   |              | 1.8   |      |       |   |             |      |   |   | 36.3    |      
|Other expense (income),
net                                    |                                                              |   | 3.8     |       |   |              | (0.6      | )     |              |           | (4.4      | )            |        |              |             |              |   |              | (5.8  | )    |       |   |             |      |   |   | (7.0    | )    
|Reorganization items                                           |                                                              |   | 26.6    |       |   |              | 9.3       |       |              |           | (1.0      | )            |        |              |             |              |   |              |      |      |       |   |             |      |   |   | 34.9    |      
|                                                               |                                                              |   |         |       |   |              |           |       |              |           |           |              |        |              |              |              |   |              |       |      |      
|                                                               | Earnings (loss) from
operations                              |   |         | (65.4 | ) |              |           | (14.7 | )            |           |           | 25.9         |        |              |              | (3.0         | ) |              |       | 63.0 |       |   |              | (6.2 | ) |   |         | (0.4  | )
|Interest expense, net                                          |                                                              |   | 5.8     |       |   |              | 18.1      |       |              |           | 13.4      |              |        |              |             |              |   |              | 16.4  |      |       |   |             |      |   |   | 53.7    |      
|                                                               |                                                              |   |         |       |   |              |           |       |              |           |           |              |        |              |              |              |   |              |       |      |      
|                                                               | Earnings (loss) before
taxes on income and
minority interest |   |         | (71.2 | ) |              |           | (32.8 | )            |           |           | 12.5         |        |              |              | (3.0         | ) |              |       | 46.6 |       |   |              | (6.2 | ) |   |         | (54.1 | )
|Income tax provision
(benefit)                                 |                                                              |   | (13.8   | )     |   |              | 0.5       |       |              |           | 0.9       |              |        |              | 0.6          |              |   |              | 12.4  |      |       |   |             |      |   |   | 0.6     |      
|                                                               |                                                              |   |         |       |   |              |           |       |              |           |           |              |        |              |              |              |   |              |       |      |      
|                                                               | Earnings (loss) before
minority interest                     |   |         | (57.4 | ) |              |           | (33.3 | )            |           |           | 11.6         |        |              |              | (3.6         | ) |              |       | 34.2 |       |   |              | (6.2 | ) |   |         | (54.7 | )
|Minority interest                                              |                                                              |   |        |       |   |              |          |       |              |           |          |              |        |              |             |              |   |              | 2.7   |      |       |   |             |      |   |   | 2.7     |      
|                                                               |                                                              |   |         |       |   |              |           |       |              |           |           |              |        |              |              |              |   |              |       |      |      
|                                                               | Net income (loss)                                            |   | $       | (57.4 | ) |              | $         | (33.3 | )            |           | $         | 11.6         |        |              | $            | (3.6         | ) |              | $     | 31.5 |       |   | $            | (6.2 | ) |   | $       | (57.4 | )
|                                                               |                                                              |   |         |       |   |              |           |       |              |           |           |              |        |              |              |              |   |              |       |      |      

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CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

For the Nine Months Ended October 31, 2001
(Unaudited)

|                                                             |                                                                                   |   |        |        |   |              |           |       |              |           |           |              |              |   |              |       |  |       |        |              |  |   |         |        |  
|------------------------------------------------------------ | --------------------------------------------------------------------------------- | - | ------ | ------ | - | ------------ | --------- | ----- | ------------ | --------- | --------- | ------------ | ------------ | - | ------------ | ----- |  | ----- | ------ | ------------ |  | - | ------- | ------ | -
|                                                             |                                                                                   |   |        |        |   |              |           |       |              |           | Conformed |              |              |   |              |       |  |       |        |              |  |   |         |       
|                                                             |                                                                                   |   |        |        |   |              | Guarantor |       |              | Guarantor |           |              | Nonguarantor |   |              |       |  |       |        | Consolidated | 
|                                                             |                                                                                   |   | Parent |        |   | Subsidiaries |           |       | Subsidiaries |           |           | Subsidiaries |              |   | Eliminations |       |  | Total |       
|                                                             |                                                                                   |   |        |        |   |              |           |       |              |           |           |              |              |   |              |       |  |       |       
|Net sales                                                    |                                                                                   | $ | 199.3  |        |   | $            | 389.6     |       |              | $         | 379.1     |              |              | $ | 614.2        |       |  | $     | (7.7   | )            |  | $ | 1,574.5 |       
|Cost of goods sold                                           |                                                                                   |   | 185.6  |        |   |              | 364.8     |       |              |           | 387.8     |              |              |   | 513.7        |       |  |       | (7.7   | )            |  |   | 1,444.2 |       
|                                                             |                                                                                   |   |        |        |   |              |           |       |              |           |           |              |              |   |              |       |  |      
|                                                             | Gross profit (loss)                                                               |   |        | 13.7   |   |              |           | 24.8  |              |           |           | (8.7         | )            |   |              | 100.5 |  |       |        |             |  |   |         | 130.3  |  
|Marketing, general and
administration                        |                                                                                   |   | 14.5   |        |   |              | 18.9      |       |              |           | 15.4      |              |              |   | 31.1         |       |  |       |       |              |  |   | 79.9    |       
|Engineering and product
development                          |                                                                                   |   | 2.8    |        |   |              | 5.6       |       |              |           | 2.1       |              |              |   | 6.4          |       |  |       |       |              |  |   | 16.9    |       
|Amortization of intangibles                                  |                                                                                   |   | 0.9    |        |   |              | 5.8       |       |              |           | 8.0       |              |              |   | 5.3          |       |  |       |       |              |  |   | 20.0    |       
|Equity in (earnings) loss of
subsidiaries and joint ventures |                                                                                   |   | 122.8  |        |   |              | 35.0      |       |              |           | 3.5       |              |              |   | (0.1         | )     |  |       | (160.3 | )            |  |   | 0.9     |       
|Asset impairments and other
restructuring charges            |                                                                                   |   | 4.7    |        |   |              | 0.7       |       |              |           | 36.4      |              |              |   | 0.8          |       |  |       |       |              |  |   | 42.6    |       
|Loss on investment in joint venture                          |                                                                                   |   | 3.8    |        |   |              |          |       |              |           |          |              |              |   |             |       |  |       |       |              |  |   | 3.8     |       
|Other (income) expense, net                                  |                                                                                   |   | (1.4   | )      |   |              |          |       |              |           | (0.8      | )            |              |   | (1.5         | )     |  |       |       |              |  |   | (3.7    | )     
|                                                             |                                                                                   |   |        |        |   |              |           |       |              |           |           |              |              |   |              |       |  |      
|                                                             | Earnings (loss) from
operations                                                   |   |        | (134.4 | ) |              |           | (41.2 | )            |           |           | (73.3        | )            |   |              | 58.5  |  |       |        | 160.3        |  |   |         | (30.1  | )
|Interest expense, net                                        |                                                                                   |   | 56.0   |        |   |              | 32.8      |       |              |           | 29.5      |              |              |   | 23.7         |       |  |       |       |              |  |   | 142.0   |       
|                                                             |                                                                                   |   |        |        |   |              |           |       |              |           |           |              |              |   |              |       |  |      
|                                                             | Earnings (loss) before taxes on
income, minority interest,
and extraordinary gain |   |        | (190.4 | ) |              |           | (74.0 | )            |           |           | (102.8       | )            |   |              | 34.8  |  |       |        | 160.3        |  |   |         | (172.1 | )
|Income tax (benefit) provision                               |                                                                                   |   | (1.1   | )      |   |              | 0.5       |       |              |           | 0.8       |              |              |   | 14.4         |       |  |       |       |              |  |   | 14.6    |       
|                                                             |                                                                                   |   |        |        |   |              |           |       |              |           |           |              |              |   |              |       |  |      
|                                                             | Earnings (loss) before minority
interest and extraordinary
gain                   |   |        | (189.3 | ) |              |           | (74.5 | )            |           |           | (103.6       | )            |   |              | 20.4  |  |       |        | 160.3        |  |   |         | (186.7 | )
|Minority interest                                            |                                                                                   |   |       |        |   |              |          |       |              |           |          |              |              |   | 2.6          |       |  |       |       |              |  |   | 2.6     |       
|                                                             |                                                                                   |   |        |        |   |              |           |       |              |           |           |              |              |   |              |       |  |      
|                                                             | Earnings (loss) before
extraordinary gain                                         |   |        | (189.3 | ) |              |           | (74.5 | )            |           |           | (103.6       | )            |   |              | 17.8  |  |       |        | 160.3        |  |   |         | (189.3 | )
|Extraordinary gain, net of tax                               |                                                                                   |   | 2.7    |        |   |              |          |       |              |           |          |              |              |   |             |       |  |       |       |              |  |   | 2.7     |       
|                                                             |                                                                                   |   |        |        |   |              |           |       |              |           |           |              |              |   |              |       |  |      
|                                                             | Net income (loss)                                                                 |   | $      | (186.6 | ) |              | $         | (74.5 | )            |           | $         | (103.6       | )            |   | $            | 17.8  |  |       | $      | 160.3        |  |   | $       | (186.6 | )
|                                                             |                                                                                   |   |        |        |   |              |           |       |              |           |           |              |              |   |              |       |  |      

-15-



---



##### Table of Contents



CONDENSED CONSOLIDATING BALANCE SHEETS
As of October 31, 2002
(Unaudited)

|                                         |                                                      |   |         |         |   |              |           |       |              |           |           |              |        |              |              |              |  |              |       |         |       |   |              |        |   |   |         |         |  
|---------------------------------------- | ---------------------------------------------------- | - | ------- | ------- | - | ------------ | --------- | ----- | ------------ | --------- | --------- | ------------ | ------ | ------------ | ------------ | ------------ |  | ------------ | ----- | ------- | ----- | - | ------------ | ------ | - | - | ------- | ------- | -
|                                         |                                                      |   | Debtors |         |   | Non-Debtors  |           |       |              |           |           |              |        |              |             
|                                         |                                                      |   |         |         |   |              |           |       |              |           |           |              |        |              |             
|                                         |                                                      |   |         |         |   |              |           |       |              |           | Conformed |              |        | Nonguarantor |              |              |  |              |       |         |       |   |              |        |   |   |        
|                                         |                                                      |   |         |         |   |              | Guarantor |       |              | Guarantor |           |              | Debtor |              |              | Nonguarantor |  |              |       |         |       |   | Consolidated |       
|                                         |                                                      |   | Parent  |         |   | Subsidiaries |           |       | Subsidiaries |           |           | Subsidiaries |        |              | Subsidiaries |              |  | Eliminations |       |         | Total |  
|                                         |                                                      |   |         |         |   |              |           |       |              |           |           |              |        |              |              |              |  |              |       |         |       |  
|Cash and cash
equivalents                |                                                      | $ | 11.9    |         |   | $            | 0.1       |       |              | $         | 0.3       |              |        | $            | 0.3          |              |  | $            | 32.8  |         |       | $ |             |        |   | $ | 45.4    |        
|Receivables                              |                                                      |   | 36.5    |         |   |              | 38.5      |       |              |           | 83.8      |              |        |              | 1.9          |              |  |              | 163.4 |         |       |   |             |        |   |   | 324.1   |        
|Inventories                              |                                                      |   | 22.9    |         |   |              | 22.2      |       |              |           | 45.1      |              |        |              | 1.6          |              |  |              | 73.3  |         |       |   |             |        |   |   | 165.1   |        
|Prepaid expenses and
other               |                                                      |   | 13.3    |         |   |              | 5.3       |       |              |           | 13.1      |              |        |              | 0.3          |              |  |              | 18.2  |         |       |   | (9.8         | )      |   |   | 40.4    |        
|                                         |                                                      |   |         |         |   |              |           |       |              |           |           |              |        |              |              |              |  |              |       |         |      
|                                         | Total current
assets                                 |   |         | 84.6    |   |              |           | 66.1  |              |           |           | 142.3        |        |              |              | 4.1          |  |              |       | 287.7   |       |   |              | (9.8   | ) |   |         | 575.0   |  
|Net property, plant
and equipment        |                                                      |   | 112.0   |         |   |              | 154.7     |       |              |           | 244.5     |              |        |              | 7.3          |              |  |              | 415.8 |         |       |   | 1.4          |        |   |   | 935.7   |        
|Goodwill and other
assets                |                                                      |   | 920.5   |         |   |              | 234.7     |       |              |           | 387.5     |              |        |              | 24.8         |              |  |              | 298.6 |         |       |   | (961.4       | )      |   |   | 904.7   |        
|                                         |                                                      |   |         |         |   |              |           |       |              |           |           |              |        |              |              |              |  |              |       |         |      
|                                         | Total assets                                         |   | $       | 1,117.1 |   |              | $         | 455.5 |              |           | $         | 774.3        |        |              | $            | 36.2         |  |              | $     | 1,002.1 |       |   | $            | (969.8 | ) |   | $       | 2,415.4 |  
|                                         |                                                      |   |         |         |   |              |           |       |              |           |           |              |        |              |              |              |  |              |       |         |      
|DIP facility                             |                                                      | $ | 42.1    |         |   | $            |          |       |              | $         |          |              |        | $            |             |              |  | $            |      |         |       | $ |             |        |   | $ | 42.1    |        
|Bank borrowings and
other notes          |                                                      |   |        |         |   |              | 2.0       |       |              |           |          |              |        |              |             |              |  |              | 20.0  |         |       |   |             |        |   |   | 22.0    |        
|Current
portion of
long-term debt        |                                                      |   |        |         |   |              |          |       |              |           |          |              |        |              |             |              |  |              | 37.0  |         |       |   |             |        |   |   | 37.0    |        
|Accounts payable and
accrued liabilities |                                                      |   | 67.9    |         |   |              | 29.3      |       |              |           | 40.0      |              |        |              | 2.6          |              |  |              | 170.5 |         |       |   | (12.8        | )      |   |   | 297.5   |        
|                                         |                                                      |   |         |         |   |              |           |       |              |           |           |              |        |              |              |              |  |              |       |         |      
|                                         | Total current
liabilities                            |   |         | 110.0   |   |              |           | 31.3  |              |           |           | 40.0         |        |              |              | 2.6          |  |              |       | 227.5   |       |   |              | (12.8  | ) |   |         | 398.6   |  
|Long-term debt, net of
current portion   |                                                      |   |        |         |   |              |          |       |              |           |          |              |        |              |             |              |  |              | 54.7  |         |       |   |             |        |   |   | 54.7    |        
|Pension and other
long-
term liabilities |                                                      |   | 75.4    |         |   |              | 42.2      |       |              |           | 11.7      |              |        |              |             |              |  |              | 181.3 |         |       |   |             |        |   |   | 310.6   |        
|Minority interest                        |                                                      |   |        |         |   |              |          |       |              |           |          |              |        |              |             |              |  |              | 15.4  |         |       |   |             |        |   |   | 15.4    |        
|Intercompany accounts                    |                                                      |   | (593.1  | )       |   |              | 356.3     |       |              |           | 50.6      |              |        |              | (4.0         | )            |  |              | 190.2 |         |       |   |             |        |   |   |        |        
|Liabilities subject to
compromise        |                                                      |   | 2,028.6 |         |   |              | 51.8      |       |              |           | 57.9      |              |        |              | 1.6          |              |  |              |      |         |       |   |             |        |   |   | 2,139.9 |        
|Common stock                             |                                                      |   | 0.3     |         |   |              |          |       |              |           |          |              |        |              |             |              |  |              |      |         |       |   |             |        |   |   | 0.3     |        
|Additional paid-in
capital               |                                                      |   | 235.1   |         |   |              | 197.2     |       |              |           | 905.3     |              |        |              | 53.5         |              |  |              | 317.1 |         |       |   | (1,473.1     | )      |   |   | 235.1   |        
|Common stock in
treasury at cost         |                                                      |   | (25.7   | )       |   |              |          |       |              |           |          |              |        |              |             |              |  |              |      |         |       |   |             |        |   |   | (25.7   | )      
|Retained earnings
(accumulated
deficit)  |                                                      |   | (599.8  | )       |   |              | (206.8    | )     |              |           | (206.0    | )            |        |              | (18.9        | )            |  |              | 99.4  |         |       |   | 332.3        |        |   |   | (599.8  | )      
|Accumulated other
comprehensive loss     |                                                      |   | (113.7  | )       |   |              | (16.5     | )     |              |           | (85.2     | )            |        |              | 1.4          |              |  |              | (83.5 | )       |       |   | 183.8        |        |   |   | (113.7  | )      
|                                         |                                                      |   |         |         |   |              |           |       |              |           |           |              |        |              |              |              |  |              |       |         |      
|                                         | Total
stockholders
equity
(deficit)                 |   |         | (503.8  | ) |              |           | (26.1 | )            |           |           | 614.1        |        |              |              | 36.0         |  |              |       | 333.0   |       |   |              | (957.0 | ) |   |         | (503.8  | )
|                                         |                                                      |   |         |         |   |              |           |       |              |           |           |              |        |              |              |              |  |              |       |         |      
|                                         | Total
liabilities and
stockholders
equity
(deficit) |   | $       | 1,117.1 |   |              | $         | 455.5 |              |           | $         | 774.3        |        |              | $            | 36.2         |  |              | $     | 1,002.1 |       |   | $            | (969.8 | ) |   | $       | 2,415.4 |  
|                                         |                                                      |   |         |         |   |              |           |       |              |           |           |              |        |              |              |              |  |              |       |         |      

-16-



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##### Table of Contents



CONDENSED CONSOLIDATING BALANCE SHEETS
As of January 31, 2002

|                                         |                                                      |   |         |         |   |              |           |       |              |           |           |              |        |              |              |              |  |              |       |       |       |   |              |        |   |   |         |         |  
|---------------------------------------- | ---------------------------------------------------- | - | ------- | ------- | - | ------------ | --------- | ----- | ------------ | --------- | --------- | ------------ | ------ | ------------ | ------------ | ------------ |  | ------------ | ----- | ----- | ----- | - | ------------ | ------ | - | - | ------- | ------- | -
|                                         |                                                      |   | Debtors |         |   | Non-Debtors  |           |       |              |           |           |              |        |              |             
|                                         |                                                      |   |         |         |   |              |           |       |              |           |           |              |        |              |             
|                                         |                                                      |   |         |         |   |              |           |       |              |           | Conformed |              |        | Nonguarantor |              |              |  |              |       |       |       |   |              |        |   |   |        
|                                         |                                                      |   |         |         |   |              | Guarantor |       |              | Guarantor |           |              | Debtor |              |              | Nonguarantor |  |              |       |       |       |   | Consolidated |       
|                                         |                                                      |   | Parent  |         |   | Subsidiaries |           |       | Subsidiaries |           |           | Subsidiaries |        |              | Subsidiaries |              |  | Eliminations |       |       | Total |  
|                                         |                                                      |   |         |         |   |              |           |       |              |           |           |              |        |              |              |              |  |              |       |       |       |  
|Cash and cash
equivalents                |                                                      | $ | 11.3    |         |   | $            | 0.1       |       |              | $         | 0.3       |              |        | $            | 0.4          |              |  | $            | 33.1  |       |       | $ |             |        |   | $ | 45.2    |        
|Receivables                              |                                                      |   | 19.0    |         |   |              | 48.6      |       |              |           | 57.0      |              |        |              | 10.2         |              |  |              | 131.4 |       |       |   |             |        |   |   | 266.2   |        
|Inventories                              |                                                      |   | 16.2    |         |   |              | 27.1      |       |              |           | 39.9      |              |        |              | 0.3          |              |  |              | 71.7  |       |       |   |             |        |   |   | 155.2   |        
|Prepaid expenses and
other               |                                                      |   | 10.9    |         |   |              | 6.5       |       |              |           | 5.2       |              |        |              | 0.2          |              |  |              | 18.9  |       |       |   | (5.4         | )      |   |   | 36.3    |        
|                                         |                                                      |   |         |         |   |              |           |       |              |           |           |              |        |              |              |              |  |              |       |       |      
|                                         | Total current assets                                 |   |         | 57.4    |   |              |           | 82.3  |              |           |           | 102.4        |        |              |              | 11.1         |  |              |       | 255.1 |       |   |              | (5.4   | ) |   |         | 502.9   |  
|Net property, plant and
equipment        |                                                      |   | 120.9   |         |   |              | 183.1     |       |              |           | 244.0     |              |        |              | 7.3          |              |  |              | 410.1 |       |       |   |             |        |   |   | 965.4   |        
|Goodwill and other
assets                |                                                      |   | 932.4   |         |   |              | 230.2     |       |              |           | 395.6     |              |        |              | 22.1         |              |  |              | 282.2 |       |       |   | (972.7       | )      |   |   | 889.8   |        
|                                         |                                                      |   |         |         |   |              |           |       |              |           |           |              |        |              |              |              |  |              |       |       |      
|                                         | Total assets                                         |   | $       | 1,110.7 |   |              | $         | 495.6 |              |           | $         | 742.0        |        |              | $            | 40.5         |  |              | $     | 947.4 |       |   | $            | (978.1 | ) |   | $       | 2,358.1 |  
|                                         |                                                      |   |         |         |   |              |           |       |              |           |           |              |        |              |              |              |  |              |       |       |      
|Bank borrowings                          |                                                      | $ |        |         |   | $            |          |       |              | $         |          |              |        | $            |             |              |  | $            | 25.1  |       |       | $ |             |        |   | $ | 25.1    |        
|Current portion of
long-term debt        |                                                      |   |        |         |   |              |          |       |              |           |          |              |        |              |             |              |  |              | 14.5  |       |       |   |             |        |   |   | 14.5    |        
|Accounts payable and
accrued liabilities |                                                      |   | 69.4    |         |   |              | 8.9       |       |              |           | 26.0      |              |        |              | 3.2          |              |  |              | 167.7 |       |       |   | (25.2        | )      |   |   | 250.0   |        
|                                         | Total current
liabilities                            |   |         | 69.4    |   |              |           | 8.9   |              |           |           | 26.0         |        |              |              | 3.2          |  |              |       | 207.3 |       |   |              | (25.2  | ) |   |         | 289.6   |  
|Long-term debt, net of
current portion   |                                                      |   | 1.0     |         |   |              |          |       |              |           |          |              |        |              |             |              |  |              | 82.5  |       |       |   |             |        |   |   | 83.5    |        
|Pension and other
long-term liabilities  |                                                      |   | 65.7    |         |   |              | 61.3      |       |              |           | 11.9      |              |        |              |             |              |  |              | 173.3 |       |       |   |             |        |   |   | 312.2   |        
|Minority interest                        |                                                      |   |        |         |   |              |          |       |              |           |          |              |        |              |             |              |  |              | 11.8  |       |       |   |             |        |   |   | 11.8    |        
|Intercompany accounts                    |                                                      |   | (570.5  | )       |   |              | 364.6     |       |              |           | 38.7      |              |        |              | (3.7         | )            |  |              | 170.9 |       |       |   |             |        |   |   |        |        
|Liabilities subject
to compromise        |                                                      |   | 2,005.1 |         |   |              | 48.7      |       |              |           | 63.2      |              |        |              | 4.0          |              |  |              |      |       |       |   |             |        |   |   | 2,121.0 |        
|Common stock                             |                                                      |   | 0.3     |         |   |              |          |       |              |           |          |              |        |              |             |              |  |              |      |       |       |   |             |        |   |   | 0.3     |        
|Additional paid-in
capital               |                                                      |   | 235.1   |         |   |              | 197.2     |       |              |           | 905.4     |              |        |              | 53.4         |              |  |              | 323.8 |       |       |   | (1,479.8     | )      |   |   | 235.1   |        
|Common stock in
treasury at cost         |                                                      |   | (25.7   | )       |   |              |          |       |              |           |          |              |        |              |             |              |  |              |      |       |       |   |             |        |   |   | (25.7   | )      
|Retained earnings
(accumulated deficit)  |                                                      |   | (542.4  | )       |   |              | (173.2    | )     |              |           | (202.9    | )            |        |              | (15.7        | )            |  |              | 55.5  |       |       |   | 336.3        |        |   |   | (542.4  | )      
|Accumulated other
comprehensive loss     |                                                      |   | (127.3  | )       |   |              | (11.9     | )     |              |           | (100.3    | )            |        |              | (0.7         | )            |  |              | (77.7 | )     |       |   | 190.6        |        |   |   | (127.3  | )      
|                                         |                                                      |   |         |         |   |              |           |       |              |           |           |              |        |              |              |              |  |              |       |       |      
|                                         | Total stockholders
equity (deficit)                 |   |         | (460.0  | ) |              |           | 12.1  |              |           |           | 602.2        |        |              |              | 37.0         |  |              |       | 301.6 |       |   |              | (952.9 | ) |   |         | (460.0  | )
|                                         |                                                      |   |         |         |   |              |           |       |              |           |           |              |        |              |              |              |  |              |       |       |      
|                                         | Total liabilities and
stockholders
equity
(deficit) |   | $       | 1,110.7 |   |              | $         | 495.6 |              |           | $         | 742.0        |        |              | $            | 40.5         |  |              | $     | 947.4 |       |   | $            | (978.1 | ) |   | $       | 2,358.1 |  
|                                         |                                                      |   |         |         |   |              |           |       |              |           |           |              |        |              |              |              |  |              |       |       |      

-17-



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##### Table of Contents



CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the Nine Months Ended October 31, 2002
(Unaudited)

|                                                       |                                                                                          |                                                  |       |         |      |   |              |           |      |              |           |           |              |        |              |              |              |   |              |       |       |       |   |              |   |   |      |       |       |  
|------------------------------------------------------ | ---------------------------------------------------------------------------------------- | ------------------------------------------------ | ----- | ------- | ---- | - | ------------ | --------- | ---- | ------------ | --------- | --------- | ------------ | ------ | ------------ | ------------ | ------------ | - | ------------ | ----- | ----- | ----- | - | ------------ | - | - | ---- | ----- | ----- | -
|                                                       |                                                                                          |                                                  |       | Debtors |      |   | Non-Debtors  |           |      |              |           |           |              |        |              |             
|                                                       |                                                                                          |                                                  |       |         |      |   |              |           |      |              |           |           |              |        |              |             
|                                                       |                                                                                          |                                                  |       |         |      |   |              |           |      |              |           | Conformed |              |        | Nonguarantor |              |              |   |              |       |       |       |   |              |   |   |      |      
|                                                       |                                                                                          |                                                  |       |         |      |   |              | Guarantor |      |              | Guarantor |           |              | Debtor |              |              | Nonguarantor |   |              |       |       |       |   | Consolidated |  
|                                                       |                                                                                          |                                                  |       | Parent  |      |   | Subsidiaries |           |      | Subsidiaries |           |           | Subsidiaries |        |              | Subsidiaries |              |   | Eliminations |       |       | Total |  
|                                                       |                                                                                          |                                                  |       |         |      |   |              |           |      |              |           |           |              |        |              |              |              |   |              |       |       |       |  
|Cash flows provided by (used
for) operating activities |                                                                                          | $                                                | (12.9 | )       |      | $ | 17.3         |           |      | $            | (10.0     | )         |              | $      | 0.1          |              |              | $ | 56.8         |       |       | $     |  |              |   | $ | 51.3 |      
|Cash flows from investing
activities:                  |                                                                                          |                                                  |       |         |      |   |              |           |      |              |           |           |              |        |              |              |              |   |              |       |       |       |   |              |   |   |      |      
|                                                       | Purchase of property,
plant, equipment, and
tooling                                      |                                                  |       | (6.6    | )    |   |              | (6.0      | )    |              |           | (27.4     | )            |        |              |             |              |   |              | (29.9 | )     |       |   |             |   |   |      | (69.9 | )    
|                                                       | Proceeds from sale of
assets and businesses                                              |                                                  |       |        |      |   |              | 0.2       |      |              |           | 0.6       |              |        |              |             |              |   |              | 8.3   |       |       |   |             |   |   |      | 9.1   |      
|                                                       | Purchase of businesses                                                                   |                                                  |       |        |      |   |              | (2.1      | )    |              |           |          |              |        |              |             |              |   |              | (5.1  | )     |       |   |             |   |   |      | (7.2  | )    
|                                                       | Other, net                                                                               |                                                  |       | 1.2     |      |   |              | (1.0      | )    |              |           | 0.4       |              |        |              |             |              |   |              | (8.0  | )     |       |   |             |   |   |      | (7.4  | )    
|                                                       |                                                                                          |                                                  |       |         |      |   |              |           |      |              |           |           |              |        |              |              |              |   |              |       |      
|                                                       |                                                                                          | Cash provided by
(used for) investing
activities |       |         | (5.4 | ) |              |           | (8.9 | )            |           |           | (26.4        | )      |              |              |             |   |              |       | (34.7 | )     |   |              |  |   |      |       | (75.4 | )
|Cash flows from financing
activities:                  |                                                                                          |                                                  |       |         |      |   |              |           |      |              |           |           |              |        |              |              |              |   |              |       |       |       |   |              |   |   |      |      
|                                                       | Increase (decrease) in
Bank borrowings,
revolving facility, DIP
facility and other notes |                                                  |       | 41.1    |      |   |              |          |      |              |           |          |              |        |              |             |              |   |              | (20.1 | )     |       |   |             |   |   |      | 21.0  |      
|                                                       | Dividends (paid) received                                                                |                                                  |       |        |      |   |              |          |      |              |           | 1.0       |              |        |              |             |              |   |              | (1.0  | )     |       |   |             |   |   |      |      |      
|                                                       |                                                                                          |                                                  |       |         |      |   |              |           |      |              |           |           |              |        |              |              |              |   |              |       |      
|                                                       |                                                                                          | Cash provided by
(used for) financing
activities |       |         | 41.1 |   |              |           |     |              |           |           | 1.0          |        |              |              |             |   |              |       | (21.1 | )     |   |              |  |   |      |       | 21.0 
|Increase (decrease) in
parent
loans and advances       |                                                                                          |                                                  | (22.2 | )       |      |   | (8.4         | )         |      |              | 35.4      |           |              |        | (0.2         | )            |              |   | (4.6         | )     |       |       |  |              |   |   |     |      
|Effect of exchange rates of
cash and cash equivalents  |                                                                                          |                                                  |      |         |      |   |             |           |      |              |          |           |              |        |             |              |              |   | 3.3          |       |       |       |  |              |   |   | 3.3  |      
|                                                       |                                                                                          |                                                  |       |         |      |   |              |           |      |              |           |           |              |        |              |              |              |   |              |       |      
|                                                       |                                                                                          | Increase (decrease) in
cash and cash
equivalents |       |         | 0.6  |   |              |           |     |              |           |           |             |        |              |              | (0.1         | ) |              |       | (0.3  | )     |   |              |  |   |      |       | 0.2   |  
|Cash and cash equivalents
at beginning of period       |                                                                                          |                                                  | 11.3  |         |      |   | 0.1          |           |      |              | 0.3       |           |              |        | 0.4          |              |              |   | 33.1         |       |       |       |  |              |   |   | 45.2 |      
|                                                       |                                                                                          |                                                  |       |         |      |   |              |           |      |              |           |           |              |        |              |              |              |   |              |       |      
|Cash and cash equivalents
at end of period             |                                                                                          | $                                                | 11.9  |         |      | $ | 0.1          |           |      | $            | 0.3       |           |              | $      | 0.3          |              |              | $ | 32.8         |       |       | $     |  |              |   | $ | 45.4 |      
|                                                       |                                                                                          |                                                  |       |         |      |   |              |           |      |              |           |           |              |        |              |              |              |   |              |       |      

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CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the Nine Months Ended October 31, 2001
(Unaudited)

|                                                       |                                                                                       |                                                  |        |        |       |   |              |           |       |              |           |           |              |           |      |              |       |   |       |   |              |   |      |        |        |  
|------------------------------------------------------ | ------------------------------------------------------------------------------------- | ------------------------------------------------ | ------ | ------ | ----- | - | ------------ | --------- | ----- | ------------ | --------- | --------- | ------------ | --------- | ---- | ------------ | ----- | - | ----- | - | ------------ | - | ---- | ------ | ------ | -
|                                                       |                                                                                       |                                                  |        |        |       |   |              |           |       |              |           | Conformed |              |           | Non- |              |       |   |       |   |              |   |      |       
|                                                       |                                                                                       |                                                  |        |        |       |   |              | Guarantor |       |              | Guarantor |           |              | guarantor |      |              |       |   |       |   | Consolidated |  
|                                                       |                                                                                       |                                                  |        | Parent |       |   | Subsidiaries |           |       | Subsidiaries |           |           | Subsidiaries |           |      | Eliminations |       |   | Total |  
|                                                       |                                                                                       |                                                  |        |        |       |   |              |           |       |              |           |           |              |           |      |              |       |   |       |  
|Cash flows provided by (used for) operating
activities |                                                                                       | $                                                | (4.8   | )      |       | $ | (10.9        | )         |       | $            | (41.4     | )         |              | $         | 63.5 |              |       | $ |      |   |              | $ | 6.4  |       
|Cash flows from investing activities:                  |                                                                                       |                                                  |        |        |       |   |              |           |       |              |           |           |              |           |      |              |       |   |       |   |              |   |      |       
|                                                       | Purchase of property, plant and equipment,
and tooling                                |                                                  |        | (6.3   | )     |   |              | (13.9     | )     |              |           | (33.0     | )            |           |      | (61.0        | )     |   |       |  |              |   |      | (114.2 | )     
|                                                       | Proceeds from sale of joint venture                                                   |                                                  |        | 9.5    |       |   |              |          |       |              |           |          |              |           |      |             |       |   |       |  |              |   |      | 9.5    |       
|                                                       | Other, net                                                                            |                                                  |        | (1.4   | )     |   |              | (0.2      | )     |              |           | (5.0      | )            |           |      | 7.1          |       |   |       |  |              |   |      | 0.5    |       
|                                                       |                                                                                       |                                                  |        |        |       |   |              |           |       |              |           |           |              |           |      |              |       |  
|                                                       |                                                                                       | Cash provided by (used for) investing
activities |        |        | 1.8   |   |              |           | (14.1 | )            |           |           | (38.0        | )         |      |              | (53.9 | ) |       |   |             |   |      |        | (104.2 | )
|                                                       |                                                                                       |                                                  |        |        |       |   |              |           |       |              |           |           |              |           |      |              |       |  
|Cash flows from financing activities:                  |                                                                                       |                                                  |        |        |       |   |              |           |       |              |           |           |              |           |      |              |       |   |       |   |              |   |      |       
|                                                       | Increase (decrease) in bank borrowings
and revolving facility                         |                                                  |        | 242.1  |       |   |              |          |       |              |           | (0.5      | )            |           |      | 5.1          |       |   |       |  |              |   |      | 246.7  |       
|                                                       | Proceeds from refinancing, net of
related fees                                        |                                                  |        | 435.4  |       |   |              |          |       |              |           |          |              |           |      |             |       |   |       |  |              |   |      | 435.4  |       
|                                                       | Repayment of bank borrowings, revolving
facility, and long term debt from
refinancing |                                                  |        | (370.9 | )     |   |              |          |       |              |           |          |              |           |      | (47.0        | )     |   |       |  |              |   |      | (417.9 | )     
|                                                       | Proceeds (payments) on accounts receivable
securitization                             |                                                  |        | 43.1   |       |   |              | (47.1     | )     |              |           | (67.6     | )            |           |      |             |       |   |       |  |              |   |      | (71.6  | )     
|                                                       | Capital contribution                                                                  |                                                  |        |       |       |   |              |          |       |              |           | (44.0     | )            |           |      | 44.0         |       |   |       |  |              |   |      |       |       
|                                                       | Fees to amend Credit Agreement                                                        |                                                  |        | (2.7   | )     |   |              |          |       |              |           |          |              |           |      |             |       |   |       |  |              |   |      | (2.7   | )     
|                                                       |                                                                                       |                                                  |        |        |       |   |              |           |       |              |           |           |              |           |      |              |       |  
|                                                       |                                                                                       | Cash provided by (used for) financing
activities |        |        | 347.0 |   |              |           | (47.1 | )            |           |           | (112.1       | )         |      |              | 2.1   |   |       |   |             |   |      |        | 189.9  |  
|                                                       |                                                                                       |                                                  |        |        |       |   |              |           |       |              |           |           |              |           |      |              |       |  
|Increase (decrease) in parent loans and advances       |                                                                                       |                                                  | (257.8 | )      |       |   | 72.0         |           |       |              | 191.4     |           |              |           | (5.6 | )            |       |   |      |   |              |   |     |       
|Effect of exchange rates on cash and cash
equivalents  |                                                                                       |                                                  |       |        |       |   |             |           |       |              |          |           |              |           | (1.0 | )            |       |   |      |   |              |   | (1.0 | )     
|                                                       |                                                                                       |                                                  |        |        |       |   |              |           |       |              |           |           |              |           |      |              |       |  
|                                                       | Increase (decrease) in cash and cash
equivalents                                      |                                                  |        | 86.2   |       |   |              | (0.1      | )     |              |           | (0.1      | )            |           |      | 5.1          |       |   |       |  |              |   |      | 91.1   |       
|Cash and cash equivalents at beginning of period       |                                                                                       |                                                  | (19.3  | )      |       |   | 0.2          |           |       |              | 1.9       |           |              |           | 17.2 |              |       |   |      |   |              |   |     |       
|                                                       |                                                                                       |                                                  |        |        |       |   |              |           |       |              |           |           |              |           |      |              |       |  
|Cash and cash equivalents at end of period             |                                                                                       | $                                                | 66.9   |        |       | $ | 0.1          |           |       | $            | 1.8       |           |              | $         | 22.3 |              |       | $ |      |   |              | $ | 91.1 |       
|                                                       |                                                                                       |                                                  |        |        |       |   |              |           |       |              |           |           |              |           |      |              |       |  

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(11) Income Tax Law Changes

On March 9, 2002, the Jobs Creation and Worker Assistance Act of 2002 was
signed into law. Among other provisions, the law permits a five-year carryback
for tax losses generated in tax years ending in 2001 and 2002. As a result of
this tax law change, the Company has filed claims for refund of federal income
taxes. The Company recorded $13.0 million related to the estimated refund
claims through the second quarter. All claims have been filed with the actual
refund expected to be $14.3 million. The additional amount of $1.3 million has
been recorded during the third quarter of fiscal 2002 and has reduced the
provision for income taxes in the consolidated statement of operations.

(12) Goodwill and Other Intangible Assets

Effective February 1, 2002, the Company adopted SFAS No. 142, Goodwill
and Other Intangible Assets. SFAS No. 142 requires that goodwill and
indefinite-lived intangible assets be reviewed for impairment annually, rather
than amortized into earnings, and that any impairment to the amount of goodwill
existing at the date of adoption be recognized as a cumulative effect of a
change in accounting principle on that date. The Company has discontinued
amortizing goodwill and indefinite-lived intangible assets into earnings. As of
February 1, 2002, the Company had unamortized goodwill and other intangibles of
approximately $822.4 million that will be subject to the transition provisions
of SFAS No. 142. Management has determined that it will incur a significant
write-down in the value of its goodwill upon completion of the adoption of SFAS
No. 142. This write-down will be recorded in the fourth quarter of fiscal 2002
consistent with the transitional provisions of SFAS No. 142 as a cumulative
effect as described above.

The pro forma effect of SFAS No. 142 on the Companys earnings for the
three months and nine months ended October 31, 2002 and 2001 is as follows:

|                                          |  |                    |      |  |                   |   |       |      |  |   |       |   |  |   |        |  
|----------------------------------------- |  | ------------------ | ---- |  | ----------------- | - | ----- | ---- |  | - | ----- | - |  | - | ------ | -
|                                          |  | Three Months Ended |      |  | Nine Months Ended |  
|                                          |  |                    |      |  |                   |  
|                                          |  | 2002               |      |  | 2001              |   |       | 2002 |  |   | 2001  |  
|                                          |  |                    |      |  |                   |   |       |      |  |   |       |  
|Reported net income (loss)                |  | $                  | 3.7  |  |                   | $ | (54.8 | )    |  | $ | (57.4 | ) |  | $ | (186.6 | )
|Addback goodwill amortization             |  |                    |     |  |                   |   | 6.7   |      |  |   |      |   |  |   | 20.0   |  
|                                          |  |                    |      |  |                   |   |       |      |  |   |       |  
|Adjusted net income (loss)                |  | $                  | 3.7  |  |                   | $ | (48.1 | )    |  | $ | (57.4 | ) |  | $ | (166.6 | )
|                                          |  |                    |      |  |                   |   |       |      |  |   |       |  
|Basic and diluted income (loss)per share: |  |                    |      |  |                   |   |       |      |  |   |       |   |  |   |        |  
|Reported net income (loss)                |  | $                  | 0.13 |  |                   | $ | (1.92 | )    |  | $ | (2.02 | ) |  | $ | (6.56  | )
|Addback goodwill amortization             |  |                    |     |  |                   |   | 0.23  |      |  |   |      |   |  |   | 0.70   |  
|                                          |  |                    |      |  |                   |   |       |      |  |   |       |  
|Adjusted net income (loss)                |  | $                  | 0.13 |  |                   | $ | (1.69 | )    |  | $ | (2.02 | ) |  | $ | (5.86  | )
|                                          |  |                    |      |  |                   |   |       |      |  |   |       |  

(13) New Accounting Pronouncements

In July 2002, the Financial Accounting Standards Board (FASB) issued
SFAS No. 146, Accounting for Costs Associated with Exit or Disposal
Activities. SFAS No. 146 requires companies to recognize costs associated
with exit or disposal activities when they are incurred rather than at the date
of a commitment to an exit or disposal plan. Examples of costs covered by this
standard include lease termination costs and certain employee severance costs
associated with a restructuring or plant closing, or other exit or disposal
activity. Previous guidance for such costs was provided by EITF Issue No.
94-3, Liability Recognition for Certain Employee Termination Benefits and
Other Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring) (EITF 94-3). SFAS No. 146 replaces EITF 94-3, and is to be
applied prospectively to exit or disposal activities initiated after December
31, 2002. Liabilities recorded under EITF 94-3 prior to adoption of SFAS No.
146 are grandfathered, and thus, adoption of this standard is not anticipated
to have a material effect on the Companys financial position or results of
operations.

In May 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements
No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
Corrections. SFAS No. 145 eliminates the requirement that gains and losses
from the extinguishment of debt be aggregated and, if material, classified as
an extraordinary item, net of the related income tax effect. However, an entity
is not prohibited from classifying such gains and losses as extraordinary
items, so long as they meet the criteria outlined in Accounting Principles
Board Opinion No. 30, Reporting the Results of Operations  Reporting the
Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions. SFAS No. 145 also eliminates
the inconsistency between the accounting for sale-leaseback transactions and
certain lease modifications that have economic effects that are similar to
sale-leaseback transactions. This statement is effective for financial
statements

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issued for fiscal years beginning after May 15, 2002. The Company will
adopt SFAS No. 145 in the fiscal year beginning February 1, 2003, and adoption
of this standard is not anticipated to have a material effect on the Companys
financial position or results of operations.

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset
Retirement Obligations. SFAS No. 143 requires that the fair value of a
liability for an asset retirement obligation be recognized in the period in
which it is incurred if a reasonable estimate of fair value of the liability
can be made. Such associated asset retirement costs are to be capitalized as
part of the carrying amount of the long-lived asset. SFAS No. 143 also contains
additional disclosure requirements regarding descriptions of the asset
retirement obligations and reconciliation of changes therein. The provisions of
this Statement are effective for fiscal years beginning after June 15, 2002.
The Company has not yet completed its analysis of the impact of SFAS No. 143 on
its consolidated financial position or results of operations upon adoption.




Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

Business and Chapter 11 Filings

This discussion should be read in conjunction with the Companys Annual
Report on Form 10-K for the fiscal year 2001, the Quarterly Report on Form 10-Q
for the fiscal quarter ended April 30, 2002 and the Quarterly Report on Form
10-Q for the fiscal quarter ending July 31, 2002, as filed with the Securities
and Exchange Commission on May 1, 2002, June 16, 2002 and September 16, 2002,
respectively.

Description of Business

Unless otherwise indicated, references to Company mean Hayes Lemmerz
International, Inc. and its subsidiaries and references to fiscal year means
the Companys year ended January 31 of the following year (e.g., fiscal 2002
refers to the period beginning February 1, 2002 and ending January 31, 2003,
fiscal 2001 refers to the period beginning February 1, 2001 and ending
January 31, 2002.

The Company is a leading supplier of wheels, wheel-end attachments,
aluminum structural components and automotive brake components. The Company is
the worlds largest manufacturer of automotive wheels. In addition, the Company
also designs and manufactures wheels and brake components for commercial
highway vehicles, and powertrain components and aluminum non-structural
components for the automotive, commercial highway, heating and general
equipment industries.

Chapter 11 Filings

On December 5, 2001, Hayes Lemmerz International, Inc., 30 of its
wholly-owned domestic subsidiaries and one wholly-owned Mexican subsidiary
(collectively, the Debtors) filed voluntary petitions for reorganization
relief (the Chapter 11 Filings or the Filings) under Chapter 11 of the
Bankruptcy Code in the United States Bankruptcy Court for the District of
Delaware (the Bankruptcy Court). The Chapter 11 Filings are being jointly
administered, for procedural purposes only, before the Bankruptcy Court under
Case No. 01-11490-MFW. During the pendency of these Filings, the Debtors remain
in possession of their properties and assets and management of the Company
continues to operate the businesses of the Debtors as debtors-in-possession. As
a debtor-in-possession, the Company is authorized to operate the business of
the Debtors, but may not engage in transactions outside of the ordinary course
of business without the approval of the Bankruptcy Court, after notice and the
opportunity for a hearing.

Under the Bankruptcy Code, actions to collect pre-petition indebtedness,
as well as most other pending litigation, are stayed and other contractual
obligations against the Debtors generally may not be enforced. Absent an order
of the Bankruptcy Court, substantially all pre-petition liabilities are subject
to settlement under a plan of reorganization to be voted upon by creditors and
equity holders proposed to receive distributions thereunder (under the
Bankruptcy Code, parties not receiving a distribution are deemed to reject and
are not entitled to vote) and approved by the Bankruptcy Court. A plan of
reorganization must be confirmed by the Bankruptcy Court, upon certain findings
being made by the Bankruptcy Court which are required by the Bankruptcy Code.
The Bankruptcy Court may confirm a plan notwithstanding the non-acceptance of
such plan by an impaired class of creditors or equity security holders if
certain requirements of the Bankruptcy Code are met.

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Pursuant to an order entered by the Bankruptcy Court on August 19, 2002,
the period during which the Company has the exclusive right to propose a plan
of reorganization expires on December 16, 2002. Although the current exclusive
period may be extended at the discretion of the Bankruptcy Court upon request,
the Debtors currently expect to file a proposed plan of reorganization with the
Bankruptcy Court prior to the expiration of the current exclusive period. There
can, however, be no assurance that such a reorganization plan or plans will be
proposed by the Debtors or confirmed by the Bankruptcy Court, or that any such
plan(s) will be consummated.

The Company currently expects that any plan of reorganization it might
propose likely will provide that the existing common stock of the Company would
be cancelled and that certain creditors of the Company would be issued new
common stock in the reorganized Company. Although there can be no assurance
that a plan of reorganization proposed by the Debtors would be confirmed by the
Bankruptcy Court or consummated, holders of common stock of the Company should
assume that they could receive little or no value as part of any plan of
reorganization. In light of the foregoing, the Company considers the value of
the common stock to be highly speculative.

Accordingly, the Company urges that appropriate caution be exercised with
respect to existing and future investments in common stock of the Company or in
claims relating to pre-petition liabilities and/or other securities of the
Company.

Under the priority scheme established by the Bankruptcy Code,
substantially all post-petition liabilities and pre-petition liabilities need
to be satisfied before shareholders are entitled to receive any distribution.
The ultimate recovery, if any, to creditors and/or shareholders will not be
determined until confirmation of a plan or plans of reorganization and
substantial completion of claims reconciliation by the Company and claims
allowance by the Bankruptcy Court.

On January 31, 2002, the Debtors filed with the Bankruptcy Court schedules
and statements of financial affairs setting forth, among other things, the
assets and liabilities of the Debtors as shown on the Companys books and
records, subject to the assumptions contained in certain notes filed in
connection therewith. The Debtors subsequently amended the schedules and
statements on March 21, 2002 and July 12, 2002. All of the schedules are
subject to further amendment or modification. On March 26, 2002, the Bankruptcy
Court established June 3, 2002 as the deadline for filing proofs of claim with
the Bankruptcy Court. The Debtors mailed notice of the proof of claim deadline
to all known creditors. Differences between amounts scheduled by the Debtors
and claims by creditors currently are being investigated and resolved in
connection with the Debtors claims resolution process. Although that process
has commenced and is ongoing, in light of the number of creditors of the
Debtors and certain claims objection blackout periods, the claims resolution
process may take considerable time to complete. Accordingly, the ultimate
number and amount of allowed claims is not presently known and the ultimate
distribution with respect to allowed claims is not presently ascertainable.

In addition to any plan of reorganization it may file, the Company
currently expects to file a disclosure statement intended to provide
information sufficient to enable holders of claims or interests to make an
informed judgment about the plan. The disclosure statement would set forth,
among other things, the Companys proposed plan of reorganization, proposed
distributions that would be made to the Companys stakeholders under the
proposed plan, certain effects of confirmation of the plan, and various risk
factors associated with the plan and confirmation thereof. It would also
contain information regarding, among other matters, significant events that
occurred during the Companys Chapter 11 proceedings, the anticipated
organization, operation and financing of the reorganized Company, as well as
the confirmation process and the voting procedures holders of claims and/or
interests must follow for their votes to be counted.

Although the Debtors expect to file a reorganization plan or plans that
provide for emergence from bankruptcy during the second quarter of fiscal 2003,
there can be no assurance that such a reorganization plan or plans will be
proposed by the Debtors or confirmed by the Court, or that any such plan(s)
will be consummated in that time period or at any later time. Currently, it is
not possible to predict the length of time the Company will operate under the
protection of Chapter 11 and the supervision of the Bankruptcy Court, the
outcome of the Chapter 11 proceedings in general, or the effect of the
proceedings on the business of the Company or on the interest of the various
creditors and stakeholders.

Pursuant to AICPA Statement of Position 90-7 Financial Reporting by
Entities in Reorganization under the Bankruptcy Code, (SOP 90-7), the
accounting for the effects of the reorganization will occur once a plan of
reorganization is confirmed by the Bankruptcy Court and there are no remaining
contingencies material to

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completing the implementation of the plan. The fresh start accounting
principles pursuant to SOP 90-7 provide, among other things, for the Company to
determine the value to be assigned to the equity of the reorganized Company as
of a date selected for financial reporting purposes. The accompanying
consolidated financial statements do not reflect: (a) the requirements of SOP
90-7 for fresh start accounting, (b) the realizable value of assets on a
liquidation basis or their availability to satisfy liabilities; (c) aggregate
pre-petition liability amounts that may be allowed for unrecorded claims or
contingencies, or their status or priority; (d) the effect of any changes to
the Debtors capital structure or in the Debtors business operations as the
result of an approved plan of reorganization; or (e) adjustments to the
carrying value of assets (including goodwill and other intangibles) or
liability amounts that may be necessary as the result of future actions by the
Bankruptcy Court.

On May 30, 2002, the Bankruptcy Court entered an order approving, among
other things, the critical employee retention plan filed with the Bankruptcy
Court in February 2002 which is designed to compensate certain critical
employees in order to assure their retention and availability during the
Companys restructuring. The plan has two components which will (i) reward
critical employees who remain with the Company (and certain affiliates of the
Company who are not directly involved in the restructuring) during and through
the completion of the restructuring (the Retention Bonus) and (ii) provide
additional incentives to a more limited group of the most senior critical
employees if the enterprise value upon completing the restructuring exceeds an
established baseline (the Restructuring Performance Bonus).

The maximum possible aggregate amount of Retention Bonus is approximately
$8.5 million and is payable in cash upon the consummation of the restructuring.
Pursuant to plan provisions, thirty-five percent, or approximately $3.2
million, of such Retention Bonus was paid on October 1, 2002. The maximum
possible aggregate amount of any Restructuring Performance Bonus is $37.5
million and will be payable as soon as reasonably practicable after the
consummation of the restructuring. Up to 70% of the amount by which a
Restructuring Performance Bonus exceeds a participants Retention Bonus may be
paid in restricted shares or units of any common stock of the Company that is
issued as part of a confirmed plan of reorganization in connection with the
restructuring, if the Companys Board of Directors elects, within the time
period specified in the plan. The amount of any Restructuring Performance
Bonus to be earned is not currently estimable and will not be determined until
confirmation of a plan or plans of reorganization.

As of October 31, 2002, there were $42.1 million of outstanding borrowings
and $4.7 million in letters of credit issued under the Companys
Debtor-In-Possession revolving credit facility (the DIP Facility). As of
December 13, 2002, there were $23.3 million of outstanding borrowings and $4.7
million in letters of credit issued in connection with the DIP Facility. The
amount of availability under the DIP Facility as of December 13, 2002 was $74.4
million, net of the aforementioned borrowings and issued letters of credit.

Reorganization items as reported in the accompanying consolidated
statement of operations for the three months and nine months ended October 31,
2002 is comprised of:

|                                                                          |       |   |              |     |  |             |      |      | 
|------------------------------------------------------------------------- | ----- | - | ------------ | --- |  | ----------- | ---- | ---- | 
|                                                                          |       |   | Three Months |     |  | Nine Months |     
|                                                                          |       |   | Ended        |     |  | Ended       |     
|                                                                          |       |   |              |     |  |             |     
|Critical employee retention plan provision                                |       | $ | 0.8          |     |  | $           | 6.0  |     
|Estimated accrued liability for rejected prepetition
leases and contracts |       |   |             |     |  |             | 9.5  |     
|Professional fees directly related to the Filing                          |       |   | 6.3          |     |  |             | 20.9 |     
|Gain on settlement of prepetition liabilities                             |       |   |             |     |  |             | (1.2 | )   
|Interest earned during Chapter 11 reorganization
proceedings              |       |   | (0.1         | )   |  |             | (0.3 | )   
|                                                                          |       |   |              |     |  |            
|                                                                          | Total |   | $            | 7.0 |  |             | $    | 34.9 | 
|                                                                          |       |   |              |     |  |            

Cash payments with respect to such reorganization items of $10.5 million
and $21.5 million made during the three months and nine months ended October
31, 2002, respectively, consisted of professional fees and the Retention Bonus.

The condensed financial statements of the Debtors are presented in Note
10, Condensed Consolidating Financial Statements to the accompanying
consolidated financial statements.

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Results of Operations

Sales of the Companys wheels, wheel-end attachments, aluminum structural
components and brake components produced in North America are directly affected by the overall level of
passenger car, light truck and commercial highway vehicle production of
original equipment manufacturers (OEMs) in North America and the relative
performance of its customers product lines in the North American market. The
Companys sales of its wheels and automotive castings in foreign locations are
directly affected by the overall vehicle production in those locations and the
relative performance of its customers product lines in the those markets. The
North American and European automotive industries are sensitive to the overall
strength of their respective economies.

The Company is organized based primarily on markets served and products
produced. Under this organization structure, the Companys operating segments
have been aggregated into three reportable segments: Automotive Wheels,
Components and Other. The Automotive Wheels segment includes results from the
Companys operations that primarily design and manufacture fabricated steel and
cast aluminum wheels for OEMs in the global passenger car and light vehicle
markets. The Components segment includes results from the Companys operations
that primarily design and manufacture suspension, brake and powertrain
components for OEMs and Tier 1 suppliers in the global passenger car and light
vehicle markets. The Other segment includes results from the Companys
operations that primarily design and manufacture wheel and brake products for
commercial highway and aftermarket customers in North America. The Other
category includes Commercial Highway products, the corporate office and
elimination of intercompany activities, none of which meet the requirements of
being classified as an operating segment.

Three Months Ended October 31, 2002 Compared to Three Months Ended October 31, 2001

Net Sales

|                  |       |   |            |       |  |      |       |       |          |  |       |     |  
|----------------- | ----- | - | ---------- | ----- |  | ---- | ----- | ----- | -------- |  | ----- | --- | -
|                  |       |   | 2002       |       |  | 2001 |       |       | % Change | 
|                  |       |   |            |       |  |      |       |       |          | 
|                  |       |   | (millions)
|                 
|                 
|                 
|                 
|Automotive Wheels |       | $ | 305.8      |       |  | $    | 315.2 |       |          |  | (3.0  | %) 
|Components        |       |   | 203.7      |       |  |      | 163.3 |       |          |  | 24.7  | %  
|Other             |       |   | 25.9       |       |  |      | 36.5  |       |          |  | (29.0 | %) 
|                  |       |   |            |       |  |      |       |       |         
|                  | Total |   | $          | 535.4 |  |      | $     | 515.0 |          |  |       | 3.9 | %
|                  |       |   |            |       |  |      |       |       |         

Net sales for the Company increased $20.4 million to $535.4 million in the
three months ended October 31, 2002 from $515.0 million in the three months
ended October 31, 2001.

The Companys Automotive Wheels operations recorded $9.4 million lower net
sales during the third quarter of fiscal 2002 compared to the same period in
fiscal 2001 primarily due to lower sales in its North American operations.
Lower unit sales from the Companys North American operations combined with the
closure of the Companys Somerset, Kentucky facility during the first quarter
of fiscal 2002 accounted for approximately $25 million of this decrease. This
decrease was partially offset by higher net sales from the Companys
international wheel operations due primarily to higher unit volumes and the
impact of foreign exchange fluctuations, which increased net sales by
approximately $16 million and $9 million, respectively, in the third quarter of
fiscal 2002. The remainder of the net decrease in sales was primarily due to
the impact of lower aluminum pass-through pricing and the sale of the Companys
Brazilian agricultural wheel business during the first quarter of fiscal 2002.

Net sales from Components increased $40.4 million to $203.7 million in the
third quarter of fiscal 2002 from $163.3 million in the same period in fiscal
2001. This increase is primarily due to approximately $37 million of new
suspension program launches at the Companys Montague, Michigan facility and at
certain of the Companys other component operations. The closure of the
Companys Petersburg, Michigan facility and Equipment and Engineering business
in Montague, Michigan combined with the sale of the Companys Maulbronn,
Germany foundry during the second quarter of fiscal 2002 resulted in
approximately $17 million lower net sales in the third quarter of fiscal 2002
compared to the same period in the prior year. Higher net sales from the
Companys powertrain and brakes operations are the primary drivers of the
remaining increase in net sales for Components.

Other net sales decreased $10.6 million to $25.9 million in the third
quarter of fiscal 2002 from $36.5 million in the third quarter of fiscal 2001.
The sale of the Companys European System Service business during the fourth
quarter of fiscal 2001 reduced Other net sales by approximately $7 million in
the third quarter of fiscal 2002 compared to the same period in fiscal 2001.
Abnormally high military shipments in the third quarter of fiscal 2001 combined
with the bankruptcy filing of a key trailer wheel customer in the fourth
quarter of fiscal 2001 reduced Other net sales by approximately $4 million.

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Gross Profit

The Companys gross profit increased $31.2 million to $70.2 million in the
third quarter of fiscal 2002 from $39.0 million in the third quarter of fiscal
2001.

Gross profit from the Companys Wheels operations increased by $25.1
million during the third quarter of fiscal 2002 compared to the same period in
fiscal 2001 due primarily to the successful execution of certain strategic
initiatives in the Companys North American operations and favorable
performance from its international wheel operations. First, the Company closed
its Somerset, Kentucky facility during the first quarter of fiscal 2002. This
closure resulted in approximately $6 million higher gross profit in the third
quarter of fiscal 2002 due to the significantly large losses recorded at that
facility during the third quarter of fiscal 2001. Second, the Company
announced the downsizing and closure of its Bowling Green, Kentucky facility
during the fourth quarter of fiscal 2001. Although the closure of the plant
has been temporarily delayed, the Company did record approximately $2 million
higher gross profit due to cost savings realized by the downsizing of that
facility subsequent to the closure announcement. Third, gross profit from the
Companys international wheel operations improved by approximately $9 million
due primarily to higher volumes, favorable foreign exchange fluctuations and
improved performance.

Gross profit from Components increased $11.7 million during the third
quarter of fiscal 2002 compared to the same period in fiscal 2001. This
increase was primarily due to higher production volumes and improved operating
performance at the Companys North American Components operations. Also
contributing to the year-over-year improvement in Components gross profit, the
Company incurred substantial program launch and start-up costs at certain
suspension facilities during the third quarter of fiscal 2001 which negatively
impacted gross profit during that period.

Other gross profit decreased $5.6 million during the third quarter of
fiscal 2002 compared to the same period in fiscal 2001. Higher retiree medical
costs during the third quarter of fiscal 2002 combined with the sale of the
Companys European Systems Service business during the fourth quarter of fiscal
2001 accounted for most of the change in Other gross profit.

Marketing, General and Administrative Expenses

Marketing, general and administrative expenses decreased $4.2 million to
$23.5 million in the three months ended October 31, 2002 from $27.7 million in
the three months ended October 31, 2001. This decrease is primarily due to
abnormally high professional fees, relocation and recruiting costs recorded
during the third quarter of fiscal 2001.

Engineering and Product Development Expenses

The Companys engineering and product development expenses decreased $0.2
million to $5.1 million in the three months ended October 31, 2002 from $5.3
million in the three months ended October 31, 2001. This decrease is primarily
due to lower engineering expenses in the Companys wheel operations.

Equity in Losses (Earnings) of Joint Ventures

The Company did not record equity in losses of joint ventures in the third
quarter of fiscal 2002 due to previous permanent impairment and sale of such
investments.

Asset Impairments and Other Restructuring Charges

Asset impairments and other restructuring charges recorded by the Company
during the three months ended October 31, 2002 and 2001 are as follows
(millions of dollars):

|                                       |       |   |      |      |  |      |     |     | 
|-------------------------------------- | ----- | - | ---- | ---- |  | ---- | --- | --- | 
|                                       |       |   | 2002 |      |  | 2001 |    
|                                       |       |   |      |      |  |      |    
|Impairment of manufacturing facilities |       | $ | 0.3  |      |  | $    |    |    
|Impairment of machinery and equipment  |       |   | 5.3  |      |  |      | 4.6 |    
|Facility closures                      |       |   |     |      |  |      |    |    
|Other restructuring                    |       |   | 5.4  |      |  |      |    |    
|                                       |       |   |      |      |  |     
|                                       | Total |   | $    | 11.0 |  |      | $   | 4.6 | 
|                                       |       |   |      |      |  |     

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Impairment of Manufacturing Facilities

Based on current real estate market conditions, the Company recorded an
asset impairment charge of $0.3 million in the third quarter of fiscal 2002 to
write down its Somerset, Kentucky facility to fair value.

Impairment of Machinery and Equipment

During the third quarter of fiscal 2002, the Company recognized asset
impairment losses of $5.3 million on certain machinery and equipment in the
Automotive Wheel segment due to a change in managements plan for the future
use of idled machinery and equipment and the discontinuance of certain
machinery and equipment due to changes in product mix. Such
investments in fixed assets were written down to fair value based on
the expected scrap value, if any, of such machinery and equipment.

During the third quarter of fiscal 2001 the Company recognized asset
impairment losses of $4.6 million related principally to $2.3 million due to
the discontinuance of the Companys Equipment and Engineering business located
in Montague, Michigan, $0.9 million related to the abandonment of a greenfield
project in Thailand, and impairments of investments in other fixed assets.
Such investments in fixed assets were written down to fair value based on the
expected scrap value, if any, of such machinery, equipment and tooling.

Facility Closures

In February 2002, the Company committed to a plan to close its
manufacturing facility in Somerset, Kentucky. In connection with the closure of
the Somerset facility (which commenced during February 2002), the Company
recorded an estimated restructuring charge of $6.7 million in the first quarter
of fiscal 2002. This charge includes amounts related to lease termination costs
and other closure costs including security and maintenance costs subsequent to
the shutdown date. The amount of the charge related to lease terminations of
$3.5 million has been classified as a liability subject to compromise at
October 31, 2002 and has been excluded from the table below. Of the other
closure costs, approximately $1.8 million remained unpaid at October 31, 2002,
and is expected to be paid during fiscal 2002 and 2003.

In the fourth quarter of fiscal 2001, the Company committed to a plan to
close its manufacturing facility in Bowling Green, Kentucky and recorded a
restructuring charge of $10.7 million. This charge relates to the termination
of leases and other closure costs, including security and maintenance costs
subsequent to the shutdown date. Originally planned to begin during July 2002,
the closure of the plant has been temporarily delayed, and as such, no costs
have been paid related to the shutdown. The closure costs are expected to be
paid in fiscal 2003.

In June 2001, the Company committed to a plan to close the Petersburg
facility, and accordingly recorded an estimated restructuring charge of $0.6
million. This charge includes amounts related to security and other
maintenance costs subsequent to the shutdown date. Of this charge, $0.6
million remained unpaid at October 31, 2002, and is expected to be paid during
fiscal 2002.

Other Restructuring Charges

In fiscal 2002, the Company offered an early retirement option to
approximately 30 employees, of whom 24 accepted by the respective acceptance
date. In connection with this early retirement offer, the Company recorded a
charge of $3.4 million primarily related to supplemental retirement benefits
and continued medical benefits. The retirement benefit portion of the charge
is recorded as a component of the Companys accrued benefit cost of the
applicable defined benefit plans, and will be funded as part of the
requirements of those entire plans.

During the third quarter of fiscal 2002, the Company recorded a charge of
$1.0 million related to the shutdown of its Petersburg facility. Additionally,
as part of ongoing restructuring and rationalization of its operations, the
Company recorded severance costs of $1.0 million in the third quarter of fiscal
2002, all of which had been paid by October 31, 2002.

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The following table describes the activity in the balance sheet accounts
affected by the severance and other restructuring charges noted above during
the three months ended October 31, 2002:

|                    |       |   |          |      |  |               |           |     |          |   |      |         |             |   |      |      | 
|------------------- | ----- | - | -------- | ---- |  | ------------- | --------- | --- | -------- | - | ---- | ------- | ----------- | - | ---- | ---- | 
|                    |       |   |          |      |  |               | Severance |     |          |   |      |         |             |   |      |     
|                    |       |   | July 31, |      |  | and Other     |           |     |          |   |      |         | October 31, |  
|                    |       |   | 2002     |      |  | Restructuring |           |     | Cash     |   |      | 2002    |            
|                    |       |   | Accrual  |      |  | Charges       |           |     | Payments |   |      | Accrual |            
|                    |       |   |          |      |  |               |           |     |          |   |      |         |            
|Facility exit costs |       | $ | 13.8     |      |  | $             |          |     |          | $ | (0.3 | )       |             | $ | 13.5 |     
|Severance           |       |   | 4.1      |      |  |               | 1.0       |     |          |   | (1.8 | )       |             |   | 3.3  |     
|                    |       |   |          |      |  |               |           |     |          |   |      |        
|                    | Total |   | $        | 17.9 |  |               | $         | 1.0 |          |   | $    | (2.1    | )           |   | $    | 16.8 | 
|                    |       |   |          |      |  |               |           |     |          |   |      |        

Other Income, net

For three months ended October 31, 2002, Other income, net in the
consolidated statement of operations of $3.3 million includes export sales
incentives of $0.6 million, net gains on sales of various non-core assets of
$0.6 million, the recovery of tooling costs of $0.3 million, various licensing
and technical assistance fees of $1.4 million and other
miscellaneous income.

Interest Expense, net

Interest expense was $19.0 million for the third quarter of fiscal 2002
compared to $49.1 million for the third quarter of fiscal 2001. This decrease
reflects the discontinuation of interest accrued on the Companys subordinated
debt as well as lower interest rates.

Income Taxes

The income tax expense for the quarter is the result of tax expense in
foreign jurisdictions and various states reduced by the remaining benefit
recorded for loss carryback claims resulting from United States Federal income
tax law changes. The Company has determined that a valuation allowance is
required against all net deferred tax assets in the United States and certain
deferred tax assets in foreign jurisdictions. As such, there is no United
States federal income tax benefit recorded against current losses.

On March 9, 2002, the Jobs Creation and Worker Assistance Act of 2002 was
signed into law. Among other provisions, the law permits a five-year carryback
for tax losses generated in tax years ending in 2001 and 2002. As a result of
this tax law change, the Company has filed claims for refund of federal income
taxes. The Company recorded $13.0 million related to the estimated refund
claims through the second quarter. All claims have been filed with the actual
refund expected to be $14.3 million. The additional amount of $1.3 million has
been recorded during the third quarter of fiscal 2002 and has reduced the
provision for income taxes in the consolidated statement of operations.

Nine Months Ended October 31, 2002, Compared to Nine Months Ended October 31, 2001

Net Sales

|                  |       |   |            |         |  |      |       |         |          |  |       |      |   
|----------------- | ----- | - | ---------- | ------- |  | ---- | ----- | ------- | -------- |  | ----- | ---- | --
|                  |       |   | 2002       |         |  | 2001 |       |         | % Change | 
|                  |       |   |            |         |  |      |       |         |          | 
|                  |       |   | (millions) |         |  |      |       |        
|Automotive Wheels |       | $ | 878.4      |         |  | $    | 952.0 |         |          |  | (7.7  | %)  
|Components        |       |   | 568.6      |         |  |      | 503.1 |         |          |  | 13.0  | %   
|Other             |       |   | 79.1       |         |  |      | 119.4 |         |          |  | (33.7 | %)  
|                  |       |   |            |         |  |      |       |         |          | 
|                  | Total |   | $          | 1,526.1 |  |      | $     | 1,574.5 |          |  |       | (3.1 | %)
|                  |       |   |            |         |  |      |       |         |          | 

Net sales for the Company decreased $48.4 million to $1,526.1 million in
the nine months ended October 31, 2002 from $1,574.5 million in the nine months
ended October 31, 2001.

The Companys Wheels operations recorded $73.6 million lower net sales
during the first nine months of fiscal 2002 compared to the same period in
fiscal 2001. The Companys North American Wheel operations recorded
approximately $64 million lower net sales due primarily to lower unit volumes,
the closure of the Companys Somerset, Kentucky facility, and increased
customer pricing pressures during the first nine months of fiscal 2002. The
Companys international wheel operations also recorded approximately $9 million
lower net sales during the first nine months of fiscal 2002 compared to the
same period in fiscal 2001 due primarily to the impact of lower aluminum pass
through pricing, the sale of the Companys Brazilian agricultural wheel
operation, increased customer pricing pressures and slightly lower unit
volumes. The decrease was partially offset by the net impact of favorable
product mix.

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Net sales from Components increased $65.5 million to $568.6 million in the
first nine months of fiscal 2002 from $503.1 million in the same period in
fiscal 2001. This increase is primarily due to new program launches at the
Companys Montague, Michigan facility and at the Companys other suspension
component operations that increased sales by approximately $76.0 million. This
was partially offset by the impact of the closure of the Companys Petersburg,
Michigan facility and the sale of the Maulbronn, Germany foundry during the
second quarter of fiscal 2002, which reduced net sales by approximately $33.0
million during the first nine months of fiscal 2002. The remainder of the
increase in Components net sales is primarily due to higher volumes on existing
platforms in those operations.

Other net sales decreased $40.3 million to $79.1 million in the nine
months ended October 31, 2002 from $119.4 million in the nine months ended
October 31, 2001. Net sales from the Companys commercial highway and
aftermarket operations were approximately $20.0 million lower during the first
nine months of fiscal 2002 compared to the same period in fiscal 2001 due
primarily to abnormally high military wheel shipments in fiscal 2001 and lower
North American heavy duty trailer production in fiscal 2002. The remaining
decrease in Other net sales is due primarily to the sale of the Companys
European System Service business during the fourth quarter of fiscal 2001.

Gross Profit

The Companys gross profit increased $23.2 million to $153.5 million in
the nine months ended October 31, 2002 from $130.3 million in the nine months
ended October 31, 2001.

Gross profit from the Companys Wheels operations increased by $38.2
million during the first nine months of fiscal 2002 compared to the same period
in fiscal 2001. Wheels gross profit increased by approximately $47 million
primarily due to the closure of the Companys Somerset, Kentucky facility
during the first quarter of fiscal 2002 and the downsizing of its Bowling
Green, Kentucky facility. The remaining difference in Automotive Wheels gross
profit from the first nine months of fiscal 2001 to fiscal 2002 is due
primarily to lower operating performance at certain North American facilities,
lower production volumes and unfavorable pricing.

Gross profit from Components increased $2.7 million during the first nine
months of fiscal 2002 compared to the same period in fiscal 2001. Improved
operating performance and higher volumes at certain Component operations more
than offset substantial program launch and start-up costs recorded at the
Companys Montague, MI facility during the first half of fiscal 2002.

Other gross profit decreased $17.7 million during the first nine months of
fiscal 2002 compared to the same period in fiscal 2001. The impact of lower
sales in the Companys commercial highway operations negatively impacted gross
profit in the first nine months of fiscal 2002 compared to the same period in
fiscal 2001. The Company also recorded higher operating costs due primarily to
higher post-retiree medical expenses related to the Companys North American
operations, which decreased Other gross profit. The remaining decrease in
Other gross profit is due to the sale of the Companys European Systems Service
business during the fourth quarter of fiscal 2001.

Marketing, General and Administrative

Marketing, general and administrative expenses decreased $5.8 million to
$74.1 million in the nine months ended October 31, 2002 from $79.9 million in
the nine months ended October 31, 2001. This decrease is primarily due to
abnormally high professional fees, relocation and recruiting costs recorded
during the third quarter of fiscal 2001.

Engineering and Product Development

The Companys engineering and product development expenses decreased $1.3
million to $15.6 million in the nine months ended October 31, 2002 from $16.9
million in the nine months ended October 31, 2001. This decrease is due
primarily to lower engineering expenses in the Companys Wheel operations.

Equity in Losses (Earnings) of Joint Ventures

The Company did not record equity in losses (earnings) of joint ventures
during the first nine months of fiscal 2002 due to previous permanent
impairment and sale of such investments.

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Asset Impairments and Other Restructuring Charges

Asset impairments and other restructuring charges recorded by the Company
during the nine months ended October 31, 2002 and 2001 are as follows (millions
of dollars):

|                                       |       |   |      |      |  |      |      |      | 
|-------------------------------------- | ----- | - | ---- | ---- |  | ---- | ---- | ---- | 
|                                       |       |   | 2002 |      |  | 2001 |     
|                                       |       |   |      |      |  |      |     
|Impairment of manufacturing facilities |       | $ | 0.6  |      |  | $    | 28.5 |     
|Impairment of machinery and equipment  |       |   | 22.6 |      |  |      | 13.5 |     
|Facility closures                      |       |   | 6.7  |      |  |      | 0.6  |     
|Other restructuring                    |       |   | 6.4  |      |  |      |     |     
|                                       |       |   |      |      |  |     
|                                       | Total |   | $    | 36.3 |  |      | $    | 42.6 | 
|                                       |       |   |      |      |  |     

Impairment of Manufacturing Facilities

Based on current real estate market conditions, the Company recorded an
asset impairment charge of $0.3 million in the third quarter of fiscal 2002 to
write down its Somerset, Kentucky facility to fair value.

As a consequence of the notifications received in April 2001 by the
Company from certain customers of its Petersburg, Michigan manufacturing
facility regarding significantly lower future product orders and the failure to
obtain adequate customer support required to relocate production, management
revised its estimate of future undiscounted cash flows expected to be generated
by the facility. The Company concluded that this estimated amount was less than
the carrying value of the long-lived assets related to the Petersburg facility
and, accordingly, recognized an impairment charge of $28.5 million in the first
nine months of fiscal 2001. An additional impairment charge of $0.3 million
was recorded in the second quarter of fiscal 2002 to further write down the
Petersburg facility to fair value based on current real estate market
conditions.

Impairment of Machinery and Equipment

During the third quarter of fiscal 2002, the Company recognized asset
impairment losses of $5.3 million on certain machinery and equipment in the
Automotive Wheel segment due to a change in managements plan for the future
use of idled machinery and equipment and the discontinuance of certain
machinery and equipment due to changes in product mix. Such investments in
fixed assets were written down to fair value based on the expected scrap value,
if any, of such machinery and equipment.

In the second quarter of fiscal 2002, the Company determined, based on its
most recent sales projections for the facility, that its current estimate of
the future undiscounted cash flows from its manufacturing facility in La
Mirada, California would not be sufficient to recover the carrying value of the
facilitys fixed assets and production tooling. Accordingly, the Company
recorded an estimated impairment loss of $15.5 million in the second quarter of
fiscal 2002 on those assets. During the second quarter of fiscal 2002, the
Company also recognized asset impairment losses of $1.8 million on certain
machinery and equipment due primarily to a change in managements plan for the
future use of idled machinery and equipment. Such investments in fixed assets
were written down to fair value based on the expected scrap value, if any, of
such machinery, equipment and tooling.

During the third quarter of fiscal 2001 the Company recognized asset
impairment losses of $4.6 million related principally to $2.3 million due to
the discontinuance of the Companys Equipment and Engineering business located
in Montague, Michigan, $0.9 million related to the abandonment of a greenfield
project in Thailand, and impairments of investments in other fixed assets.
Such investments in fixed assets were written down to fair value based on the
expected scrap value, if any, of such machinery, equipment and tooling.

During the second quarter of fiscal 2001, the company recognized an
impairment loss of $6.4 million related principally to a change in managements
plan for future use of idled machinery and equipment in the Automotive Wheel
segment, and to investments in machinery, equipment and tooling at its
Somerset, Kentucky facility. Such assets were written down to fair value based
on the expected scrap value, if any, of such machinery, equipment, and tooling.
During the first quarter of fiscal 2001, the Company recognized an asset
impairment loss of $2.5 million related to the abandonment of plans to continue
to invest in the start-up of certain single-purpose equipment.

Facility Closures

In February 2002, the Company committed to a plan to close its
manufacturing facility in Somerset, Kentucky. In connection with the closure of
the Somerset facility (which commenced during February 2002), the Company

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recorded an estimated restructuring charge of $6.7 million in the first
quarter of fiscal 2002. This charge includes amounts related to lease
termination costs and other closure costs including security and maintenance
costs subsequent to the shut down date. The amount of the charge related to
lease terminations of $3.5 million has been classified as a liability subject
to compromise at October 31, 2002 and has been excluded from the table below.
Of the other closure costs, approximately $1.8 million remained unpaid at
October 31, 2002, and is expected to be paid during fiscal 2002 and fiscal
2003.

In the fourth quarter of fiscal 2001, the Company committed to a plan to
close its manufacturing facility in Bowling Green, Kentucky and recorded a
restructuring charge of $10.7 million. This charge relates to the termination
of leases and other closure costs, including security and maintenance costs
subsequent to the shutdown date. Originally planned to begin during July 2002,
the closure of the plant has been temporarily delayed, and as such, no costs
have been paid related to the shutdown. The closure costs are expected to be
paid in fiscal 2003.

In June 2001, the Company committed to a plan to close the Petersburg
facility, and accordingly recorded an estimated restructuring charge of $0.6
million. This charge includes amounts related to security and other
maintenance costs subsequent to the shutdown date. Of this charge, $0.6
million remained unpaid at October 31, 2002, and is expected to be paid during
fiscal 2002 and fiscal 2003.

Other Restructuring Charges

In fiscal 2002, the Company offered an early retirement option to
approximately 30 employees, of whom 24 accepted by the respective acceptance
date. In connection with this early retirement offer, the Company recorded a
charge of $3.4 million primarily related to supplemental retirement benefits
and continued medical benefits. The retirement benefit portion of the charge
is recorded as a component of the Companys accrued benefit cost of the
applicable defined benefit plans, and will be funded as part of the
requirements of those entire plans.

During the third quarter of fiscal 2002, the Company recorded a charge of
$1.0 million related to the shutdown of its Petersburg facility. Additionally,
as part of ongoing restructuring and rationalization of its operations, the
Company recorded severance costs of $1.0 million in the third quarter of fiscal
2002, all of which had been paid by October 31, 2002.

The following table describes the activity in the balance sheet accounts
affected by the severance and other restructuring charges noted above during
the three months ended October 31, 2002:

|                    |       |   |          |      |  |               |           |     |          |   |      |         |             |   |      |      | 
|------------------- | ----- | - | -------- | ---- |  | ------------- | --------- | --- | -------- | - | ---- | ------- | ----------- | - | ---- | ---- | 
|                    |       |   |          |      |  |               | Severance |     |          |   |      |         |             |   |      |     
|                    |       |   | July 31, |      |  | and Other     |           |     |          |   |      |         | October 31, |  
|                    |       |   | 2002     |      |  | Restructuring |           |     | Cash     |   |      | 2002    |            
|                    |       |   | Accrual  |      |  | Charges       |           |     | Payments |   |      | Accrual |            
|                    |       |   |          |      |  |               |           |     |          |   |      |         |            
|Facility exit costs |       | $ | 13.8     |      |  | $             |          |     |          | $ | (0.3 | )       |             | $ | 13.5 |     
|Severance           |       |   | 4.1      |      |  |               | 1.0       |     |          |   | (1.8 | )       |             |   | 3.3  |     
|                    |       |   |          |      |  |               |           |     |          |   |      |        
|                    | Total |   | $        | 17.9 |  |               | $         | 1.0 |          |   | $    | (2.1    | )           |   | $    | 16.8 | 
|                    |       |   |          |      |  |               |           |     |          |   |      |        

Other Income, net

For the nine months ended October 31, 2002, Other income, net in the
consolidated statement of operations of $7.0 million includes the recovery of
tooling costs of $1.8 million, various licensing and technical assistance fees
of $1.9 million, various export sales incentives of $1.3 million and other
miscellaneous income. Other Income, net also includes net gains on
sales of various non-core assets and businesses of $0.9 million. The Company received
$9.1 million in cash in connection
with these sales.

Interest Expense, net

Interest expense was $53.7 million for the first nine months of fiscal
2002 compared to $142.0 million for the same period of fiscal 2001. This
decrease reflects the discontinuation of interest accrued on the Companys
subordinated debt, as well as lower interest rates.

Income Taxes

The income tax expense for the first nine months of fiscal 2002 is the
result of tax expense in foreign jurisdictions and various states reduced by
the $14.3 million tax benefit recorded for loss carryback claims resulting

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from United States Federal income tax law changes. The Company has
determined that a valuation allowance is required against all net deferred tax
assets in the United States and certain deferred tax assets in foreign
jurisdictions. As such, there is no United States federal income tax benefit
recorded against current losses.

Liquidity and Capital Resources

Chapter 11 Filings

As discussed above, the Company and certain subsidiaries filed voluntary
petitions for reorganization relief under Chapter 11 of the Bankruptcy Code.
The matters described under this caption Liquidity and Capital Resources, to
the extent that they relate to future events or expectations, may be
significantly affected by the Chapter 11 Filings. Those proceedings will
involve, or result in, various restrictions on the Companys activities,
limitations on financing, the need to obtain Bankruptcy Court approval for
various matters and uncertainty as to relationships with vendors, suppliers,
customers and others with whom the Company may conduct or seek to conduct
business.

Cash Flows

The Companys cash provided by operating activities in the first nine
months of fiscal 2002 was $51.3 million compared to $6.4 million in the first
nine months of fiscal 2001. This improvement resulted primarily from the
effect of lower interest payments during the current period due to the stay on
most prepetition liabilities and improved profitability. These improvements
were partially offset by the investment in working capital on higher volumes in
the third quarter of fiscal 2002, as well as payments associated with the
Chapter 11 proceedings.

The principal sources of liquidity for the Companys future operating,
capital expenditure, facility closure, restructuring and reorganization
requirements are expected to be (i) cash flows from operations, (ii) proceeds
from the sale of non-core assets and businesses, (iii) borrowings under various
foreign bank and government loans, (iv) borrowings under the DIP Facility, and
(v) any exit financing associated with the Companys emergence from the Chapter
11 proceedings resulting from a confirmed plan or plans of reorganization. The
DIP Facility is scheduled to terminate on the earlier of (a) the date of
substantial consummation of a plan of reorganization or (b) June 5, 2003. As
more fully discussed above, while the Company expects to emerge from Chapter 11
prior to the termination of the DIP Facility, there can be no assurances that
the emergence will occur prior to such date, or that the Company will be able
to extend the term of or replace the existing DIP facility in the event that
the Company has not emerged by June 5, 2003. Moreover, while the Company
expects that such sources will meet these requirements, there can be no
assurances that such sources will prove to be sufficient, in part, due to
inherent uncertainties about applicable future capital market conditions.

Capital expenditures and tooling purchases for the first nine months of
fiscal 2002 were $69.9 million. These expenditures were primarily for
additional machinery and equipment to improve productivity and reduce costs, to
meet demand for new vehicle platforms and to meet expected requirements for the
Companys products. The Company anticipates capital expenditures and tooling
purchases for fiscal 2002 will be approximately $110 to $115 million relating
primarily to new vehicle platforms and maintenance and cost reduction programs.
While the Company has not yet completed the process of approving its capital
expenditure programs for fiscal year 2003, it anticipates that its requirements
might be moderately increased from fiscal 2002.

Other Liquidity Matters

As of October 31, 2002, there were $42.1 million of outstanding borrowings
and $4.7 million in letters of credit issued under the Companys DIP Facility.
As of December 13, 2002, there were $23.3 million of outstanding borrowings and
$4.7 million in letters of credit issued in connection with the DIP Facility.
The amount of availability under the DIP Facility as of December 13, 2002 was
$74.4 million, net of the aforementioned borrowings and issued letters of
credit.

The DIP Facility provides for the postpetition cash payment at certain
intervals of interest and fees accrued at the filing date and accruing
postpetition under the Companys prepetition credit agreements, if certain
tests are satisfied relating to the liquidity position and earnings of the
Company and its subsidiaries, and the repatriation of funds from foreign
subsidiaries. During the second and third quarters of fiscal 2002, payments of
$12.1 million and $8.3 million, respectively, were made for a portion of
accrued interest and fees with respect to this provision. Further, the Company
paid $2.9 million on November 1, 2002 with respect to this provision.

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During the third quarter of fiscal 2002, the Company and the lenders to
the DIP Credit Agreement discovered that the applicable period(s) during which
certain liquidity and earnings tests thereunder are measured had not been
properly memorialized therein and the parties intentions were frustrated
thereby. Accordingly, on
December 4, 2002, the Bankruptcy Court granted authority to the
Debtors and the lenders to enter into a Third Amendment
of the DIP Credit Agreement to correct the measurement period definition. As
modified by the Third Amendment, the DIP Credit Agreement would allow the
Company to make a $13.8 million payment that is currently
prohibited under the DIP Credit Agreement.

As of October 31, 2002, there were $111.7 million in outstanding
borrowings under various foreign bank credit facilities. A portion of these
credit facilities are secured by compensating balance arrangements. In
addition, the Company maintains cash deposits at certain locations in order to
assure the continuation of vendor trade terms. As of October 31, 2002, the
total amount of cash deposits maintained for these purposes was approximately
$8.0 million.

During the first nine months of fiscal 2002, the Company received $9.1
million in cash proceeds from the sale of certain non-core assets and
businesses, primarily the sale of the Companys Brazilian agricultural wheel
business, a foundry located in Maulbronn, Germany and the Companys interest in
a Portuguese joint venture. During the first nine months of fiscal 2002, the
Company paid $5.1 million for the remaining 24% interest in its South African
subsidiary, and $2.1 million in cash and an additional $2.0 million note
payable for the facility and assets of a foundry in Chattanooga, Tennessee.

Certain of the operating leases covering leased assets with an original
cost of approximately $68.0 million, contain provisions which, if certain
events occur or conditions are met, including termination of the lease, might
require the Company to purchase or re-sell the leased assets within a specified
period of time, generally one year, based on amounts specified in the lease
agreements. On July 18, 2001, the Company received notification of termination
from a lessor with respect to leased assets having approximately $25.0 million
of original cost (which termination was not to be effective for one year). The
Company has not agreed with the lessor that a termination has occurred at the
time of the notice and has continued to use the leased assets.

Critical Accounting Policies

Asset impairment losses and other restructuring charges

The Companys consolidated statements of operations included herein
reflect an element of operating expenses described as asset impairments and
other restructuring charges. The Company periodically evaluates whether events
and circumstances have occurred that indicate that the remaining useful life of
any of its long-lived assets may warrant revision or that the remaining balance
might not be recoverable. When factors indicate that the long-lived assets
should be evaluated for possible impairment, the Company uses an estimate of
the future undiscounted cash flows generated by the underlying assets to
determine if a write-down is required. If a write-down is required, the Company
adjusts the book value of the impaired long-lived assets to their estimated
fair values. Fair value is determined, generally, through third party
appraisals or discounted cash flow calculations. The related charges are
recorded as asset impairments or, in the case of certain exit costs in
connection with a plant closure or restructuring, restructuring or other
charges in the consolidated statements of operations.

The Company believes that the Chapter 11 Filings in December 2001 and the
ongoing comprehensive review of all of its operations as part of formulating
its plan or plans of reorganization in order to emerge from Chapter 11 will
take some time to complete. As discussed above and in the notes to the
Companys consolidated financial statements included herein, a number of
decisions have occurred or other factors have indicated that these types of
charges are required to be currently recognized. As the review continues during
the Companys reorganization, there can be no assurance that there will not be
additional charges based on future events and that the additional charges would
not have a materially adverse impact on the Companys financial position and
results of operations.

See discussion of SFAS No. 142 below.

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Valuation allowances on deferred income tax assets

In assessing the realizability of deferred tax assets, management
considers whether it is more likely than not that some portion or all of the
deferred tax assets will not be realized. Management considers the scheduled
reversal of deferred tax liabilities, projected future taxable income, and tax
planning strategies in making this assessment. The Company expects the deferred
tax assets, net of the valuation allowance to be realized as a result of the
reversal of existing taxable temporary differences in the United States and as
a result of projected future taxable income and the reversal of existing
taxable temporary differences in certain foreign locations. As a result of
managements assessment, a valuation allowance was recorded. In view of the
substantial doubt regarding the Companys ability to continue as a going
concern, the Company determined that it could not conclude that it was more
likely than not that the benefits of certain deferred income tax assets would
be realized. The valuation allowance recorded by the Company fully reserves for
all domestic and certain foreign net deferred tax assets.

Use of Estimates

Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial statements in
conformity with accounting principles generally accepted in the United States
of America. Actual results could differ from those estimates.

Generally, assets and liabilities which are subject to managements
estimation and judgment include long-lived assets, due to the use of estimated
economic lives for depreciation purposes and future expected cash flow
information used to evaluate the recoverability of the long-lived assets,
inventory, accounts receivable, deferred tax asset valuation reserves, pension
and post retirement costs, restructuring reserves, self insurance accruals and
environmental remediation accruals.

Under SFAS No. 87, Employers Accounting for Pensions, an additional
minimum pension liability may need to be recorded at the end of the current
fiscal year of a plan sponsor based on an annual measurement requirement as of
that date. As of January 31, 2002, the Company recorded an additional minimum
pension liability with regard to its defined benefit pensions plans of
approximately $35 million. This additional liability resulted in an increase
to the accumulated other comprehensive loss for fiscal 2001. Due to recent
market conditions, the fair value of the plans assets has declined since the
beginning of fiscal 2002. In view of the current market conditions, the
Company anticipates that there will be a requirement to increase the additional
minimum liability as of January 31, 2003.

Recently Adopted Accounting Pronouncements

Effective February 1, 2002, the Company adopted SFAS No. 142, Goodwill
and Other Intangible Assets. SFAS No. 142 requires that goodwill and
indefinite-lived intangible assets be reviewed for impairment annually, rather
than amortized into earnings, and that any impairment to the amount of goodwill
existing at the date of adoption be recognized as a cumulative effect of a
change in accounting principle on that date. The Company has discontinued
amortizing goodwill and indefinite-lived intangible assets into earnings. As of
February 1, 2002, the Company had unamortized goodwill and other intangibles of
approximately $822.4 million that will be subject to the transition provisions
of SFAS No. 142. Management has determined that it will incur a significant
write-down in the value of its goodwill upon completion of the adoption of SFAS
No. 142. This write-down will be recorded in the fourth quarter of fiscal 2002
consistent with the transitional provisions of SFAS No. 142 as a cumulative
effect as described above.

The pro forma effect of SFAS No. 142 on the Companys earnings for the
three and nine months ended October 31, 2002 and 2001 is as follows:

|                                           |  |                    |      |  |                   |   |       |      |  |   |       |   |  |   |        |  
|------------------------------------------ |  | ------------------ | ---- |  | ----------------- | - | ----- | ---- |  | - | ----- | - |  | - | ------ | -
|                                           |  | Three Months Ended |      |  | Nine Months Ended |  
|                                           |  |                    |      |  |                   |  
|                                           |  | 2002               |      |  | 2001              |   |       | 2002 |  |   | 2001  |  
|                                           |  |                    |      |  |                   |   |       |      |  |   |       |  
|Reported net income (loss)                 |  | $                  | 3.7  |  |                   | $ | (54.8 | )    |  | $ | (57.4 | ) |  | $ | (186.6 | )
|Addback goodwill amortization              |  |                    |     |  |                   |   | 6.7   |      |  |   |      |   |  |   | 20.0   |  
|                                           |  |                    |      |  |                   |   |       |      |  |   |       |  
|Adjusted net income (loss)                 |  | $                  | 3.7  |  |                   | $ | (48.1 | )    |  | $ | (57.4 | ) |  | $ | (166.6 | )
|                                           |  |                    |      |  |                   |   |       |      |  |   |       |  
|Basic and diluted income
(loss) per share: |  |                    |      |  |                   |   |       |      |  |   |       |   |  |   |        |  
|Reported net income (loss)                 |  | $                  | 0.13 |  |                   | $ | (1.92 | )    |  | $ | (2.02 | ) |  | $ | (6.56  | )
|Addback goodwill amortization              |  |                    |     |  |                   |   | 0.23  |      |  |   |      |   |  |   | 0.70   |  
|                                           |  |                    |      |  |                   |   |       |      |  |   |       |  
|Adjusted net income (loss)                 |  | $                  | 0.13 |  |                   | $ | (1.69 | )    |  | $ | (2.02 | ) |  | $ | (5.86  | )
|                                           |  |                    |      |  |                   |   |       |      |  |   |       |  

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New Accounting Pronouncements

In July 2002, the Financial Accounting Standards Board (FASB) issued
SFAS No. 146, Accounting for Costs Associated with Exit or Disposal
Activities. SFAS No. 146 requires companies to recognize costs associated
with exit or disposal activities when they are incurred rather than at the date
of a commitment to an exit or disposal plan. Examples of costs covered by this
standard include lease termination costs and certain employee severance costs
associated with a restructuring or plant closing, or other exit or disposal
activity. Previous guidance for such costs was provided by EITF Issue No.
94-3, Liability Recognition for Certain Employee Termination Benefits and
Other Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring) (EITF 94-3). SFAS No. 146 replaces EITF 94-3, and is to be
applied prospectively to exit or disposal activities initiated after December
31, 2002. Liabilities recorded under EITF 94-3 prior to adoption of SFAS No.
146 are grandfathered, and thus, adoption of this standard is not anticipated
to have a material effect on the Companys financial position or results of
operations.

In May 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements
No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
Corrections. SFAS No. 145 eliminates the requirement that gains and losses
from the extinguishment of debt be aggregated and, if material, classified as
an extraordinary item, net of the related income tax effect. However, an entity
is not prohibited from classifying such gains and losses as extraordinary
items, so long as they meet the criteria outlined in Accounting Principles
Board Opinion No. 30, Reporting the Results of Operations  Reporting the
Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions. SFAS No. 145 also eliminates
the inconsistency between the accounting for sale-leaseback transactions and
certain lease modifications that have economic effects that are similar to
sale-leaseback transactions. This statement is effective for financial
statements issued for fiscal years beginning after May 15, 2002. The Company
will adopt SFAS No. 145 in the fiscal year beginning February 1, 2003, and
adoption of this standard is not anticipated to have a material effect on the
Companys financial position or results of operations.

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset
Retirement Obligations. SFAS No. 143 requires that the fair value of a
liability for an asset retirement obligation be recognized in the period in
which it is incurred if a reasonable estimate of fair value of the liability
can be made. Such associated asset retirement costs are to be capitalized as
part of the carrying amount of the long-lived asset. SFAS No. 143 also contains
additional disclosure requirements regarding descriptions of the asset
retirement obligations and reconciliation of changes therein. The provisions of
this Statement are effective for fiscal years beginning after June 15, 2002.
The Company has not yet completed its analysis of the impact of SFAS No. 143 on
its consolidated financial position or results of operations upon adoption.




Item 3. Quantitative and Qualitative Disclosures about Market Risk

For the period ended October 31, 2002, the Company did not experience any
material change in market risk exposures affecting the quantitative and
qualitative disclosures as presented in the Companys Annual Report on Form
10-K for the year ended January 31, 2002.




Item 4. Controls and Procedures

On February 19, 2002, the Company issued restated consolidated financial
statements included in its filings with the Securities and Exchange Commission
(the SEC) as of and for the fiscal years ended January 31, 2001 and 2000, and
related quarterly periods (the 10-K/A), and for the fiscal quarter ended
April 30, 2001 (the 10-Q/A). The restatement was the result of failure by
the Company to properly apply certain accounting standards generally accepted
in the United States of America, and because certain accounting errors and
irregularities in the Companys financial statements were identified. As
discussed in the Companys Annual Report On Form 10-K for the fiscal year 2001
filed with the SEC on May 1, 2002, the Company has been advised that the SEC is
conducting an investigation into the facts and circumstances giving rise to the
restatement, and the Company has been and intends to continue cooperating with
the SEC. The Company cannot predict the outcome of such an investigation.

Following the commencement of an internal review of its accounting records
and procedures and the investigation initiated by the Companys Audit Committee
of the Board of Directors in connection with the restatement process (the
Audit Committee Investigation), the Company initiated a significant
restructuring which included, among other things, (i) a new management team
under the leadership of a new chief executive officer and the hiring of a new
chief financial officer (initially an interim chief financial officer), (ii) a
number of key operating initiatives including an ongoing process to rationalize
the manufacturing capacity of the Company on a global basis

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and (iii) the Chapter 11 Filings. These activities, while critical to the
successful restructuring of the Company, complicate the Companys ability to
assess the overall effectiveness of (i) disclosure controls and procedures, as
defined in Exchange Act Rules 13a-14 and 15d-14 (the Disclosure Controls and
Procedures) and (ii) internal controls, including those internal controls and
procedures for financial reporting (the Internal Controls).

Since the inception of the restatement process and Audit Committee
Investigation, the Company has made a number of significant changes that
strengthened its Disclosure Controls and Procedures and Internal Controls.
These changes included, but were not necessarily limited to, (i) communicating
clearly and consistently a tone from new senior management regarding the proper
conduct in these matters, (ii) terminating or reassigning key managers, (iii)
hiring (or retaining on an interim basis), in addition to the chief financial
officer position noted above, a new chief accounting officer, chief information
officer, and several new experienced business unit controllers, (iv)
strengthening the North American financial management organizational reporting
chain, (v) requiring stricter account reconciliation standards, (vi)
establishing an anonymous TIPLINE monitored by the general counsel of the
Company, (vii) updating and expanding the distribution of the Companys
business conduct questionnaire, (viii) conducting more face-to-face quarterly
financial reviews with business unit management, (ix) requiring quarterly as
well as annual plant and business unit written representations, (x) expanding
the financial accounting procedures in the current year internal audit plan,
(xi) temporarily supplementing the Companys existing staff with additional
contractor-based support to collect and analyze the information necessary to
prepare the Companys financial statements, related disclosures and other
information requirements contained in the Companys SEC periodic reporting
until the Company implements changes to the current organization and staffing,
and (xii) commencing a comprehensive, team-based process to further assess and
enhance the efficiency and effectiveness of the Companys financial processes,
including support efforts which better integrate current and evolving financial
information system initiatives, and addressing any remaining critical
weaknesses including any reported by the Companys internal audit function and
independent public accountants.

The Company will continue the process of identifying and implementing
corrective actions where required to improve the effectiveness of its
Disclosure Controls and Procedures and Internal Controls. Significant
supplemental resources will continue to be required to prepare the required
financial and other information during this process, particularly in view of
the Companys current stage of restructuring. The changes made to date as
discussed above have enabled the Company to restate its previous filings where
required, as well as subsequently prepare and file the remainder of the
required periodic reports for fiscal 2001 and 2002 on a current basis.

Evaluation of Disclosure Controls and Procedures

Within 90 days prior to the date of filing this report, the Company has
formed a disclosure committee reporting to the Chief Executive Officer of the
Company to assist the Chief Executive Officer and Chief Financial Officer in
fulfilling their responsibility in designing, establishing, maintaining and
reviewing the Companys Disclosure Controls and Procedures (the Disclosure
Committee). The Disclosure Committee is currently chaired by the Companys
Chief Financial Officer and includes the Companys Chief Accounting Officer,
Interim General Counsel, Vice President of Human Resources and Administration,
Corporate Controller, Treasurer and Senior Counsel as its other members. The
Companys Chief Executive Officer and Chief Financial Officer along with the
Disclosure Committee have evaluated the Disclosure Controls and procedures
within this 90-day period. The Companys Chief Executive Officer and Chief
Financial Officer have concluded that the Disclosure Controls and Procedures
are effective.

Changes in Internal Controls

Since the date of the Companys last quarterly filing, a number of actions
have occurred which, together with the continuing use of extensive compensating
control procedures, have improved the Companys Internal Controls taken as a
whole. In addition to the formation of a Disclosure Committee as discussed
above (including formalizing and expanding its process and procedures), the
Company has, among other things, (i) recently completed and issued a number of
new or expanded accounting policies and procedures, (ii) commenced in earnest,
a revised and reinvigorated internal audit program and (iii) expanded its use
of company-wide account reconciliations and reviews. Other than the
aforementioned items, there were no other significant changes in the Companys
Internal Controls or in other factors that could significantly affect Internal
Controls.

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PART II. OTHER INFORMATION




Item 1. Legal Proceedings

On May 3, 2002, a group of purported purchasers of the Companys bonds
commenced a putative class action lawsuit against thirteen present or former
directors and officers of the Company (but not the Company) and KPMG LLP, the
Companys independent auditor, in the United States District Court for the
Eastern District of Michigan. The complaint seeks damages for an alleged class
of persons who purchased Company bonds between June 3, 1999 and September 5,
2001 and claim to have been injured because they relied on the Companys
allegedly materially false and misleading financial statements. On June 27,
2002, the plaintiffs filed an amended class action complaint adding CIBC World
Markets Corp. and Credit Suisse First Boston Corporation, underwriters for
certain bonds issued by the Company, as defendants.

Additionally, before the date the Company commenced its Chapter 11
Bankruptcy case, four other putative class actions were filed in the United
States District Court for the Eastern District of Michigan against the Company
and certain of its directors and officers, on behalf of a class of purchasers
of Company common stock from June 3, 1999 to December 13, 2001, based on
similar allegations of securities fraud. On May 10, 2002, the plaintiffs filed
a consolidated and amended class action complaint seeking damages against the
Companys present and former officers and directors (but not the Company) and
KPMG.

On June 13, 2002, the Company filed an adversary complaint and motion for
a preliminary injunction in the Bankruptcy Court requesting the Court to stay
the class action litigation commenced by the bond purchasers and equity
purchasers. Additionally, on July 25, 2002, the Company filed with the
Bankruptcy Court a motion to lift the automatic stay in the Chapter 11 Filings
to allow the insurance company that provides officer and director liability
insurance to the Company to pay the defense costs of the Companys present and
former officers and directors in such litigation. The Bankruptcy Court has
since entered an order permitting the insurance company to pay up to $500,000
in defense costs incurred by the Companys present and former officers and
directors in the litigation subject to certain conditions, and the Company has
withdrawn its motion for a preliminary injunction.




Item 2. Changes in Securities and Use of Proceeds

None




Item 3. Defaults Upon Senior Securities

In accordance with the Senior Notes, the Senior Subordinated Notes and the
note under the Credit Agreement, interest accrues at default rates. However,
the payment of such interest is subject to the Bankruptcy Code and a plan or
plans of reorganization as may be approved by the Bankruptcy Court. See Note
(8), Liabilities Subject To Compromise, to the Consolidated Financial
Statements herein.




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

None




Item 5. Other Information

None




Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits

|     |  |                                                                                                                                                                                                            
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|99.1 |  | Certification of Curtis J. Clawson, Chairman of the Board, President
and Chief Executive Officer, Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|     |  |                                                                                                                                                                                                            
|99.2 |  | Certification of James A. Yost, Vice President, Finance, and Chief
Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.            

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(b) Reports on Form 8-K

None

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SIGNATURES

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

| |  |                                                                                                                                                                                              
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | HAYES LEMMERZ INTERNATIONAL, INC.
 
 
/s/ James A. Yost
James A. Yost
Vice President, Finance, and Chief Financial Officer
 
 
/s/ Herbert S. Cohen
Herbert S. Cohen
Chief Accounting Officer

December 16, 2002

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CERTIFICATIONS

I, Curtis J. Clawson, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of Hayes Lemmerz
International, Inc.;                                                                                                                                                                                                                                      
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present
in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented
in this quarterly report;                   
|  
|4. |  | The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:                                                                                                      



| | a. |  | designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b. |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the
Evaluation Date); and                                                                                                  
|
| | c. |  | presented in this quarterly report our conclusions
about the effectiveness of the disclosure controls and procedures
based on our evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrants auditors and
the audit committee of registrants board of directors (or persons
performing the equivalent function):
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a. |  | all significant deficiencies in the design or operation
of internal controls which could adversely affect the
registrants ability to record, process, summarize and report
financial data and have identified for the registrants auditors
any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b. |  | any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrants internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officer and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: December 16, 2002

| |  |                                                                                                     
| |  | ----------------------------------------------------------------------------------------------------
| |  | /s/ Curtis J. Clawson
Curtis J. Clawson
Chairman of the Board, President and Chief Executive Officer

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##### Table of Contents



I, James A. Yost, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of Hayes Lemmerz
International, Inc.;                                                                                                                                                                                                                                      
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present
in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented
in this quarterly report;                   
|  
|4. |  | The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:                                                                                                      



| | a. |  | designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b. |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the
Evaluation Date); and                                                                                                  
|
| | c. |  | presented in this quarterly report our conclusions
about the effectiveness of the disclosure controls and procedures
based on our evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrants auditors and
the audit committee of registrants board of directors (or persons
performing the equivalent function):
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a. |  | all significant deficiencies in the design or operation
of internal controls which could adversely affect the
registrants ability to record, process, summarize and report
financial data and have identified for the registrants auditors
any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b. |  | any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrants internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officer and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: December 16, 2002

| |  |                                                                                     
| |  | ------------------------------------------------------------------------------------
| |  | /s/ James A. Yost
James A. Yost
Vice President, Finance, and Chief Financial Officer

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##### Table of Contents



Exhibit Index

|       |  |                                                                                                                                                                                                            
|------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |  | Description                                                                                                                                                                                                
|       |  |                                                                                                                                                                                                            
|99.1   |  | Certification of Curtis J. Clawson, Chairman of the Board, President
and Chief Executive Officer, Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|99.2   |  | Certification of James A. Yost, Vice President, Finance, and Chief
Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.