UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~October 31, 2008~~April 30, 2009


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period fromto

Commission file number: 000-50303

Hayes Lemmerz International, Inc.

(Exact name of registrant as specified in its charter)


Delaware		32-0072578
(State or other jurisdiction of		(IRS Employer
incorporation or organization)		Identification No.)

15300 Centennial Drive		48168
Northville, Michigan		(Zip Code)
(Address of principal executive offices)

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. Yesþ Noo

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yeso Noo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the ~~definitions~~definition of “large accelerated ~~filer,”~~filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filero	Accelerated filerþ	Non-accelerated filero	Smaller reporting companyo
	(Do not check if a smaller reporting company)			~~Smaller reporting company~~o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yeso Noþ

~~APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY~~
~~PROCEEDINGS DURING THE PRECEDING FIVE YEARS:~~

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yesþ Noo

As of ~~December 3, 2008,~~June 18, 2009, the number of shares of common stock outstanding of Hayes Lemmerz International, Inc., was ~~101,774,690~~101,819,597 shares.

HAYES LEMMERZ INTERNATIONAL, INC.

QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS


	Page	~~Page~~
	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Consolidated Statements of Operations	3
	Condensed Consolidated Balance Sheets	4
	Consolidated Statements of Cash Flows	5
	Consolidated Statements of Changes in Stockholders’ Equity	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2624
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	3633
Item 4.	Controls and Procedures	3733

	PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	3734
Item 1A.	Risk Factors	3734
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3742
Item 3.	Defaults upon Senior Securities	3742
Item 4.	Submission of Matters to a Vote of Security Holders	3742
Item 5.	Other Information	3842
Item 6. Exhibits	~~Exhibits~~	3843
Signature		3844
EX-31.1
EX-31.2
EX-32.1
EX-32.2

Unless otherwise indicated, references to “we,” “us,” or “our” mean Hayes Lemmerz International, Inc., a Delaware corporation, and its subsidiaries. References to fiscal year means the 12-month period commencing on February 1^stof that year and ending January 31^stof the following year (e.g., fiscal ~~2008~~2009 means the period beginning February 1, ~~2008~~2009 and ending January 31, ~~2009)~~2010). This report contains forward looking statements with respect to our financial condition, results of operations, and business. All statements other than statements of historical fact made in this Quarterly Report onForm 10-Q are forward-looking. Such forward-looking statements include, among others, those statements including the words “expect,” “anticipate,” “intend,” “believe,” and similar language. These forward looking statements involve certain risks and uncertainties. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward looking statements include, among others: (1) competitive pressure in our industry; (2) fluctuations in the price of steel, aluminum, and other raw material and our ability to maintain credit terms with our suppliers; (3) changes in general economic conditions; (4) our dependence on the automotive industry (which has historically been cyclical) and on a small number of major customers for the majority of our sales; (5) pricing pressure from automotive industry customers and the potential for re-sourcing of business to lower-cost providers; (6) changes in the financial markets or our debt ratings affecting our financial structure and our ~~cost~~ability to borrow money or find alternative sources of ~~capital and borrowed~~additional money; (7) the uncertainties inherent in international operations and foreign currency fluctuations;(8) the outcome and consequences of our ~~ability to obtain an amendment to the financial covenants in our senior secured credit facilities;~~Chapter 11 bankruptcy filing; and (9) the risks described in ~~our Annual~~this Quarterly Report onForm ~~10-K for the fiscal year ended January 31, 2008.~~10-Q. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this Quarterly Report onForm ~~10-Q.~~10-Q. We have no duty to update the forward looking statements in this Quarterly Report onForm 10-Q and we do not intend to provide such updates

.Item 1.Financial Statements

HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

Three Months Ended October 31, Nine Months Ended October 31,
2008 2007 2008 2007
(Dollars in millions, except per share amounts)
Net sales $ 497.0 $ 554.9 $ 1,634.3 $ 1,597.6
Cost of goods sold 440.4 496.8 1,442.1 1,430.2

Gross profit 56.6 58.1 192.2 167.4
Marketing, general, and administrative 34.1 35.8 112.8 116.6
Amortization of intangibles 2.6 2.5 8.3 7.5
Asset impairments and other restructuring charges 2.7 50.0 11.8 54.0
Other (income) expense, net (3.4 ) (2.6 ) 27.3 4.9

Earnings (loss) from operations 20.6 (27.6 ) 32.0 (15.6 )
Interest expense, net 12.2 13.9 39.8 47.8
Loss on early extinguishment of debt — — — 21.5
Other non-operating expense (income) 0.1 (1.4 ) 2.8 (1.4 )

Earnings (loss) from continuing operations before taxes and minority interest 8.3 (40.1 ) (10.6 ) (83.5 )
Income tax expense 12.5 16.7 40.1 38.5

Loss from continuing operations before minority interest (4.2 ) (56.8 ) (50.7 ) (122.0 )
Minority interest 3.9 5.9 17.2 15.4

Loss from continuing operations (8.1 ) (62.7 ) (67.9 ) (137.4 )

Discontinued operations:
Income (loss) from operations, net of tax of $0.0, $0.2, $0.0, $0.5, respectively 0.1 (1.1 ) 0.1 2.3
(Loss) gain on sale of business, net of tax of $0.0 for all periods (2.4 ) 1.1 (2.4 ) (30.0 )

Loss from discontinued operations (2.3 ) — (2.3 ) (27.7 )

Net loss $ (10.4 ) $ (62.7 ) $ (70.2 ) $ (165.1 )

Loss per common share data

Basic and diluted:

Loss from continuing operations $ (0.08 ) $ (0.62 ) $ (0.67 ) $ (1.87 )
Loss from discontinued operations (0.02 ) — (0.02 ) (0.38 )

Net loss $ (0.10 ) $ (0.62 ) $ (0.69 ) $ (2.25 )

Weighted average shares outstanding (in thousands) 101,417 100,382 101,198 73,414


		Three Months Ended April 30,
		2009			2008
		(Dollars in millions, except per
		share amounts)
Net sales		$	258.2		$	573.8
Cost of goods sold			258.6			510.1

Gross profit			(0.4	)		63.7
Marketing, general, and administrative			35.4			39.3
Amortization of intangibles			2.0			2.8
Asset impairments and other restructuring charges	Note 7		4.2			3.3
Other income, net			(1.0	)		(3.4	)

(Loss) earnings from operations			(41.0	)		21.7
Interest expense, net			22.0			13.3
Other non-operating (income) expense			(2.3	)		1.7

(Loss) earnings from operations before taxes			(60.7	)		6.7
Income tax (benefit) expense	Note 9		(1.6	)		13.0

Consolidated net loss			(59.1	)		(6.3	)
Less: Net (loss) income attributable to noncontrolling interest	Note 11		(0.6	)		6.5

Net loss attributable to Hayes Lemmerz International, Inc.		$	(58.5	)	$	(12.8	)


Loss per common share data
Basic and diluted:
Net loss attributable to Hayes Lemmerz International, Inc.		$	(0.57	)	$	(0.13	)
Weighted average shares outstanding (in thousands)	Note 8		101,820			101,071

See accompanying notes to consolidated financial statements.

HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES

~~CONDENSED~~ CONSOLIDATED BALANCE SHEETS


	October 31,			January 31,				April 30,			January 31,
	2008			2008				2009			2009
	(Dollars in millions)							(Dollars in millions)
	(Unaudited)							(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	57.1		$	160.2			$	56.7		$	107.5
Receivables, net of allowance of $1.1 and $1.5 at October 31, 2008 and January 31, 2008, respectively		225.0			305.6
Receivables, net of allowance of $0.8 and $0.3 at April 30, 2009 and January 31, 2009, respectively									136.8			157.3
Other receivables		39.4			48.3				28.9			15.4
Inventories		194.6			179.1		Note 3		151.8			156.9
Assets held for sale		31.2			21.4		Note 4		8.6			8.1
Deferred tax assets		4.3			5.0		Note 9		2.9			3.2
Prepaid expenses		4.8			7.2				8.6			7.7

Total current assets		556.4			726.8				394.3			456.1
Property, plant, and equipment, net of accumulated depreciation of $406.7 and $385.0 as of October 31, 2008 and January 31, 2008, respectively		535.1			616.8
Goodwill		212.4			240.5
Customer relationships, net of amortization of $20.4 and $19.7 at October 31, 2008 and January 31, 2008, respectively		89.8			103.7
Other intangible assets, net of amortization of $40.3 and $40.2 at October 31, 2008 and January 31, 2008, respectively		53.4			65.0
Deferred tax assets		1.6			4.2
Property, plant, and equipment, net of accumulated depreciation of $430.2 and $398.3 as of April 30, 2009 and January 31, 2009, respectively									496.4			499.2
Customer relationships, net of amortization of $22.5 and $21.0 at April 30, 2009 and January 31, 2009, respectively									89.0			87.8
Other intangible assets, net of amortization of $43.3 and $41.2 at April 30, 2009 and January 31, 2009, respectively									24.2			24.6
Other assets		41.2			48.9				20.2			28.5

Total assets	$	1,489.9		$	1,805.9			$	1,024.1		$	1,096.2


LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Bank borrowings and other notes	$	46.4		$	32.9		Note 5	$	34.5		$	46.6
Current portion of long-term debt		4.2			4.8		Note 5		635.3			622.1
Accounts payable		263.4			372.0				116.5			133.0
Accrued payroll and employee benefits		64.3			76.4				56.6			53.2
Liabilities held for sale		8.3			8.2
Other accrued liabilities		62.9			61.6				66.4			66.3

Total current liabilities		449.5			555.9				909.3			921.2
Long-term debt, net of current portion		519.1			572.2		Note 5		1.6			1.4
Deferred tax liabilities		66.2			76.1		Note 9		43.6			46.7
Pension and other long-term liabilities		290.0			328.9		Note 6		350.1			354.0
Minority interest		66.7			70.5
Commitments and contingencies
Stockholders’ equity:
Preferred stock, 1,000,000 shares authorized, none issued or outstanding at October 31, 2008 or January 31, 2008		—			—

Total liabilities									1,304.6			1,323.3

Stockholders’ deficit:
Preferred stock, 1,000,000 shares authorized, none issued or outstanding at April 30, 2009 or January 31, 2009									—			—
Common stock, par value $0.01 per share:
200,000,000 shares authorized; 101,743,162 and 101,057,966 issued and outstanding at October 31, 2008 and January 31, 2008, respectively		1.0			1.0
200,000,000 shares authorized; 101,819,597 issued and outstanding at April 30, 2009 and January 31, 2009									1.0			1.0
Additional paid in capital		885.8			882.0				887.7			887.1
Accumulated deficit		(1,000.5	)		(928.7	)			(1,360.7	)		(1,302.1	)
Accumulated other comprehensive income		212.1			248.0				129.0			121.1

Total stockholders’ equity		98.4			202.3
Total Hayes Lemmerz International, Inc. stockholders’ deficit									(343.0	)		(292.9	)
Noncontrolling interests							Note 11		62.5			65.8

Total liabilities and stockholders’ equity	$	1,489.9		$	1,805.9
Total stockholders’ deficit									(280.5	)		(227.1	)

Total liabilities and stockholders’ deficit								$	1,024.1		$	1,096.2

HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Nine Months Ended October 31,						Three Months Ended April 30,
	2008			2007			2,009.0			2,008.0
	(Dollars in millions)						(Dollars in millions)
Cash flows from operating activities:
Net loss	$	(70.2	)	$	(165.1	)	$	(58.5	)	$	(12.8	)

Adjustments to reconcile net loss from operations to net cash provided by (used for) operating activities:
Net loss from discontinued operations		2.3			27.7
Depreciation and amortization		81.8			82.8			22.5			27.8
Amortization of deferred financing fees and accretion of discount		1.7			2.8
Amortization and write-off of deferred financing fees								9.5			0.6
Asset impairments		7.8			50.3			0.6			2.7
Interest rate swap adjustments								(3.5	)		—
Deferred income taxes		1.4			22.5			(4.7	)		(0.8	)
Minority interest		17.2			15.4
Noncontrolling interests								(0.6	)		6.5
Equity compensation expense		3.6			8.8			0.6			1.0
Loss on sale of assets and businesses		35.5			12.8
Loss on early extinguishment of debt		—			21.5
Loss (gain) on sale of assets								0.2			(0.1	)
Changes in operating assets and liabilities that increase (decrease) cash flows:
Receivables		43.4			(69.0	)		26.0			(16.8	)
Other receivables		8.9			(30.6	)		(13.5	)		0.6
Inventories		(38.0	)		(28.4	)		10.0			(15.2	)
Prepaid expenses and other		(14.8	)		5.8			(1.5	)		(9.0	)
Accounts payable and accrued liabilities		(101.7	)		80.1			(20.2	)		(16.3	)


Cash (used for) provided by operating activities		(21.1	)		37.4

Cash used for operating activities								(33.1	)		(31.8	)

Cash flows from investing activities:
Purchase of property, plant, equipment, and tooling		(67.1	)		(64.1	)		(2.5	)		(19.2	)
Sale of assets		(23.4	)		1.5

Proceeds from sale of assets								0.2			0.5

Cash used for investing activities		(90.5	)		(62.6	)		(2.3	)		(18.7	)


Cash flows from financing activities:
Changes in bank borrowings and credit facilities		20.8			0.9			(12.2	)		2.1
Bank finance fees paid		—			(14.8	)
Proceeds from revolving credit facility		16.0			—
Proceeds from long-term debt								0.2			—
Repayment of long-term debt		(2.6	)		(136.3	)		(0.1	)		(0.1	)
Dividends paid to minority shareholders		(12.9	)		(10.1	)		(3.7	)		(7.3	)
Proceeds from issuance of common stock		—			193.1
Call premium on redemption of Senior Notes		—			(9.0	)
Fees paid for Rights Offering		—			(7.7	)


Cash provided by financing activities		21.3			16.1

Cash used for financing activities								(15.8	)		(5.3	)

Cash flows of discontinued operations:
Net cash provided by operating activities		1.3			12.7
Net cash (used for) provided by investing activities		(2.4	)		42.5
Net cash used for operating activities								(0.7	)		—
Net cash used for investing activities								—			—
Net cash used for financing activities		—			(10.1	)		—			—


Net cash (used for) provided by discontinued operations		(1.1	)		45.1

Net cash used for discontinued operations								(0.7	)		—
Effect of exchange rate changes on cash and cash equivalents		(11.7	)		4.1			1.1			2.4


(Decrease) increase in cash and cash equivalents		(103.1	)		40.1

Decrease in cash and cash equivalents								(50.8	)		(53.4	)
Cash and cash equivalents at beginning of period		160.2			38.5			107.5			160.2


Cash and cash equivalents at end of period	$	57.1		$	78.6		$	56.7		$	106.8


Supplemental data:
Cash paid for interest	$	36.7		$	42.6		$	12.7		$	9.4
Cash paid for income taxes	$	39.8		$	17.2		$	3.5		$	9.3

HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)


					Additional					Accumulated Other																					Accumulated
					Paid in		Accumulated			Comprehensive																Additional					Other
																					Comprehensive			Common		Paid in		Accumulated			Comprehensive			Noncontrolling
																Shares		Total			Income			Stock		Capital		Deficit			Income			Interest
																(Dollars in millions, except share amounts)
Balance at January 31, 2009																	101,819,597	$	(227.1	)				$	1.0	$	887.1	$	(1,302.1	)	$	121.1		$	65.8
Preferred stock dividends accrued																	—		(0.1	)					—		—		(0.1	)		—			—
Comprehensive income:
Net loss																	—		(59.1	)	$	(59.1	)		—		—		(58.5	)		—			(0.6	)
Currency translation adjustment																	—		8.9			8.9			—		—		—			7.9			1.0
Dividend paid																	—		(3.7	)		(3.7	)		—		—		—			—			(3.7	)

Total comprehensive loss																	—		(53.9	)	$	(53.9	)		—		—		—			—			—

Equity compensation expense																	—		0.6						—		0.6		—			—			—

Balance at April 30, 2009																	101,819,597	$	(280.5	)				$	1.0	$	887.7	$	(1,360.7	)	$	129.0		$	62.5
	Shares		Par Value		Capital		Deficit			Income			Total
	(Dollars in millions, except share amounts)
Balance at January 31, 2008		101,057,966	$	1.0	$	882.0	$	(928.7	)	$	248.0		$	202.3			101,057,966	$	272.8					$	1.0	$	882.0	$	(928.7	)	$	248.0		$	70.5
Preferred stock dividends accrued		—		—		—		(0.4	)		—			(0.4	)		—		(0.2	)					—		—		(0.2	)		—			—
Comprehensive income:
Net loss		—		—		—		(70.2	)		—			(70.2	)		—		(6.3	)	$	(6.3	)		—		—		(12.8	)		—			6.5
Currency translation adjustment, net of tax $1.0		—		—		—		—			(36.0	)		(36.0	)
Unrealized loss on derivatives		—		—		—		—			0.7			0.7
Currency translation adjustment																	—		8.3			8.3			—		—		—			5.6			2.7
Dividend paid																	—		(7.3	)		(7.3	)		—		—		—			—			(7.3	)
Pension measurement date adjustment																	—		(1.8	)		(1.8	)		—		—		(1.2	)		(0.6	)		—
Change in unrealized gain/(loss) on derivatives																	—		3.0			3.0			—		—		—			3.0			—

Total comprehensive loss		—		—		—		—			—			(105.5	)		—		(4.1	)	$	(4.1	)		—		—		—			—			—
Shares of redeemable preferred stock of subsidiary converted into common stock		14,152		—		0.2		—			—			0.2

Shares issued for vested RSUs		671,044		—		—		—			—			—			20,687		—						—		—		—			—			—
Pension measurement date adjustment		—		—		—		(1.2	)		(0.6	)		(1.8	)
Equity compensation expense		—		—		3.6		—			—			3.6			—		1.0						—		1.0		—			—			—

Balance at October 31, 2008		101,743,162	$	1.0	$	885.8	$	(1,000.5	)	$	212.1		$	98.4
Balance at April 30, 2008																	101,078,653	$	269.5					$	1.0	$	883.0	$	(942.9	)	$	256.0		$	72.4


Balance at January 31, 2007		38,470,434	$	0.4	$	678.6	$	(733.6	)	$	156.4		$	101.8
Preferred stock dividends accrued		—		—		—		(0.5	)		—			(0.5	)
Comprehensive income:
Net loss		—		—		—		(165.1	)		—			(165.1	)
Currency translation adjustment, net of tax $0.0		—		—		—		—			54.2			54.2
Unrealized gain on derivatives		—		—		—		—			(2.2	)		(2.2	)

Total comprehensive loss		—		—		—		—			—			(113.1	)
Shares of redeemable preferred stock of subsidiary converted into common stock		89,932		—		2.1		—			—			2.1
Shares issued for vested RSUs		1,782,811		—		—		—			—			—
Common stock issued to note holders		1,049,020		—		5.3		—			—			5.3
Common stock issued, net of fees		59,423,077		0.6		184.8		—			—			185.4
Equity compensation expense		—		—		8.9		—			—			8.9

Balance at October 31, 2007		100,815,274	$	1.0	$	879.7	$	(899.2	)	$	208.4		$	189.9

HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three ~~and nine~~ months ended ~~October 31,~~April 30, 2009 and 2008 ~~and 2007~~

(Unaudited)

(Dollars in millions, unless otherwise stated)

Note 1. Description of Business

These financial statements should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended January 31, ~~2008~~2009 as filed with the Securities and Exchange Commission on ~~April 10, 2008.~~May 11, 2009.

Description of Business

Unless otherwise indicated, references to “us,” “we,” or “our” mean Hayes Lemmerz International, Inc., a Delaware corporation, and our subsidiaries, and references to “fiscal year” mean our fiscal year commencing on February 1 of that year and ending on January 31 of the following year (e.g., “fiscal 2009” refers to the period beginning February 1, 2009 and ending January 31, 2010, “fiscal 2008” refers to the period beginning February 1, 2008 and ending January 31, ~~2009, “fiscal 2007” refers to the period beginning February 1, 2007 and ending January 31, 2008)~~2009).

Originally founded in 1908, Hayes Lemmerz International, Inc. is a leading worldwide producer of aluminum and steel wheels for passenger cars and light trucks and of steel wheels for commercial trucks and trailers. We are also a supplier of automotive powertrain components. We have global operations with 23 facilities, including business and sales offices and manufacturing facilities located in 1312 countries around the world. We sell our products to every major North American, Japanese, and European manufacturer of passenger cars and light trucks and to commercial highway vehicle customers throughout the world.

On May 11, 2009, we and certain of our subsidiaries (collectively, the Debtors) filed voluntary petitions for reorganization under Chapter 11 of Title 11 of the United States Code (Bankruptcy Code) in the United States Bankruptcy Court for the District of Delaware (Bankruptcy Court). The cases are being jointly administered under Case No. 09-11655 (MFW). With the exception of Hayes Lemmerz Finance LLC—Luxembourg S.C.A. (Hayes Luxembourg), a borrower under our secured credit facility and the issuer of our 8.25% Senior Notes due 2015 (Senior Notes), the Company’s subsidiaries and operations outside the United States were not included in the filing, are not debtors in the Chapter 11 cases or any other proceeding outside the United States, and are expected to and will continue to operate in the ordinary course of business outside and unaffected by the Chapter 11 cases and process.

The filing of the Chapter 11 petitions constituted an event of default under certain of our debt obligations, and those debt obligations became automatically and immediately due and payable, subject to an automatic stay of any action to collect, assert, or recover a claim against the Debtors and the application of applicable bankruptcy law.

In connection with the Chapter 11 filing, we, HLI Operating Company, Inc. (HLI Opco), Hayes Luxembourg, the Lenders party thereto, Deutsche Bank AG New York Branch, as DIP Administrative Agent, Deutsche Bank Securities Inc. and General Electric Capital Corporation, as Joint Book-Running Lead Managers, Joint Lead Arrangers, and Joint Syndication Agents for the Debtor in Possession (DIP) Facilities, and Deutsche Bank Securities Inc., as Documentation Agent for the DIP Facilities, entered into Amendment No. 2, dated as of May 12, 2009, and amendment No. 3 dated as of May 19, 2009, to our Second Amended and Restated Credit Agreement, dated as of May 30, 2007, as amended by Amendment No. 1, dated as of January 30, 2009, with the lenders party thereto (Credit Agreement). Pursuant to the amended Credit Agreement (DIP Credit Agreement) debtor-in-possession loan tranches (DIP Loans) were added to the Credit Agreement, including up to $100 million of additional liquidity to provide operating funds to us and our subsidiaries during the restructuring.

The DIP Loans consist of a senior secured debtor-in-possession new money term loan facility (New Money DIP Loans) in an aggregate principal amount of up to $100 million and a senior secured debtor-in-possession roll-up loan facility (Roll-up Loans) in an aggregate principal amount of up to $100 million. The Roll-up Loans will be issued to the pre-petition lenders under the Credit Agreement who make New Money DIP Loans in exchange for the pre-petition loans such lenders hold under the Credit Agreement; the Roll-up Loans will be deemed issued to the lenders upon the occurrence of a triggering event in the future. The DIP Loans benefit from a super-priority claim and lien on the assets of the Borrowers pursuant to a Bankruptcy Court order.

Market following our filings under Chapter 11. We believe that our currently outstanding common stock will have no value and will be cancelled under any plan of reorganization we may propose under Chapter 11. We also believe that the holders of our Senior Notes are unlikely to receive more than a de minimis distribution on account of their interests in the Senior Notes and that such interests could be cancelled under any plan of reorganization the Company may propose under Chapter 11.

There can be no assurance, however, that we will be able to develop, propose, and implement a successful plan of reorganization. Should we be unable to develop, propose, and implement a successful plan of reorganization, we may be forced to discontinue operations and liquidate the Company.

Note 2. Basis of Presentation

Our unaudited interim consolidated financial statements do not include all of the disclosures required by U.S. generally accepted accounting principles (GAAP) for annual financial statements. In our opinion, all adjustments considered necessary for a fair presentation of the interim period results have been included. Operating results for the fiscal ~~2008~~2009 interim period presented are not necessarily indicative of the results that may be expected for the full fiscal year ending January 31, ~~2009.~~2010.

The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Considerable judgment is often involved in making these determinations; the use of different assumptions could result in significantly different results. We believe our assumptions and estimates are reasonable and appropriate; however, actual results could differ from those estimates.

~~Note 3. Stock-Based Compensation~~

We The accompanying consolidated financial statements have been prepared on a ~~Long Term Incentive Plan (LTIP) that provides for~~going concern basis which contemplates continuity of operations, realization of assets, and payment of liabilities in the ~~grant~~ordinary course of ~~incentive stock options (ISOs), stock options that~~business and do not ~~qualify~~reflect adjustments that might result if we are unable to continue as ISOs, restricted shares of common stock, and restricted stock units (collectively, the awards). Any officer, director, or key employee of Hayes Lemmerz International, Inc. or any of its subsidiaries is eligible to be designated a ~~participant in the LTIP. We follow the provisions of the Statement of Financial Accounting Standards (SFAS) 123R, “Share-Based Payment.”~~

In July 2008 we issued 914,364 restricted stock units and 180,006 shares of restricted stock to our key employees and members of our Board of Directors. The 914,364 restricted stock units were issued to our key employees and will vest in February 2011. The 180,006 shares of restricted stock were issued to our Board of Directors and will vest in December 2008. As of October 31, 2008 there was $1.6 million of these unvested restricted stock and restricted stock units outstanding, which will be expensed based on the respective vesting dates.

In July 2008 we issued 1,268,984 stock options to our key employees and members of our Board of Directors. There were 144,384 stock options issued to our Board of Directors, which will vest in December 2008. The remaining stock options were issued to our key employees and will vest as to one-third of the options in each of February 2009, 2010, and 2011. As of October 31, 2008 there was $1.0 million of these unvested stock options outstanding, which will be expensed based on the respective vesting dates.

As of April 30, 2009, we reclassified our ~~Other segment. This~~Howell, Michigan facility ~~met the criteria for an asset~~as held for sale ~~during~~as we anticipate the ~~last quarter~~sale of ~~fiscal 2007 in accordance with~~the building to be complete within one year as per Statement of Financial Accounting ~~Standards SFAS~~Standard (SFAS) 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (SFAS 144). ~~Also included in the balance are land and idle buildings in Huntington, Indiana and Howell, Michigan, which we are currently marketing for sale.~~

~~The assets and liabilities of our Nuevo Laredo facility were as follows (dollars in millions):~~

October 31, January 31,
2008 2008
Receivables $ 19.5 $ 11.3
Inventories 6.5 4.1
Prepaid expenses 0.2 0.1
Property, plant, and equipment, net 1.8 0.5

Total assets held for sale $ 28.0 $ 16.0

Accounts payable and accrued liabilities $ 8.3 $ 8.0

Total liabilities held for sale $ 8.3 $ 8.0

On June 13, 2008 we sold our Hoboken, Belgium subsidiary to BBS International GmbH (BBS), a subsidiary of Punch International nv (Punch). Under the agreement, BBS acquired all of the outstanding shares of stock of Hayes Lemmerz Belgie B.V.B.A., which had operations in Hoboken (near Antwerp, Belgium). The Hoboken factory produced cast aluminum wheels for passenger cars and employed approximately 315 people. The purchase price of the transaction was not material to either party. We recorded a loss on the sale of approximately $35.7 million through October 31, 2008 and contributed $27.0 million in cash as part of the transaction.

~~Note 6. Discontinued Operations~~

On November 9, 2007 we completed the sale of our Brakes business to Brembo North America, Inc. Under the agreement, Brembo North America, Inc., a subsidiary of Brembo S.p.A., acquired all of the stock of two subsidiary companies that ran our brake manufacturing operations in Homer, Michigan and Monterrey, Mexico, and certain assets used in connection with the division’s sales, marketing, and engineering group located at our headquarters in Northville, Michigan. Proceeds from the sale were $57.0 million. We recognized a gain on the sale of approximately $16.8 million.

~~Operating results for the Brakes business were as follows (dollars in millions):~~

Three Months Ended October 31, Nine Months Ended October 31,
2008 2007 2008 2007
Net sales $ — $ 24.9 $ — $ 81.8

Earnings (Loss) before income tax expense $ — $ (0.6 ) $ — $ 4.5
Income tax expense — 0.2 — 1.2

Net income (loss) $ — $ (0.8 ) $ — $ 3.3

On June 29, 2007 we completed the sale of all of the issued and outstanding shares of capital stock of MGG Group B.V. (MGG Group) to an affiliate of ECF Group, a privately held company based in the Netherlands and Switzerland. MGG Group and its subsidiaries operate aluminum casting and machining facilities located in Tegelen and Nieuw Bergen, the Netherlands and in Antwerp, Belgium, and represented our International Components business. We received proceeds of $17.5 million. We recorded a loss on the sale of $29.8 million through October 31, 2008. During the third quarter of fiscal 2008, we settled certain disputes arising out of the share purchase agreement with MGG Group resulting in a loss of $2.4 million.

~~Operating results for MGG Group were as follows (dollars in millions):~~

Three Months Ended October 31, Nine Months Ended October 31,
2008 2007 2008 2007
Net sales $ — $ — $ — $ 55.5

Loss before income tax expense $ (2.4 ) $ — $ (2.4 ) $ (27.4 )
Income tax benefit — — — (0.7 )

Net loss $ (2.4 ) $ — $ (2.4 ) $ (26.7 )

In the beginning of fiscal 2007 we divested Hayes Lemmerz International — Bristol, Inc. and Hayes Lemmerz International — Montague, Inc., which operated our suspension business operations in Bristol, Indiana and Montague, Michigan. We received consideration for the sale of $26.2 million, which consisted of $21.1 million in cash plus the assumption of $5.1 million of debt under capital leases for equipment at the facilities. The loss recorded on the sale through October 31, 2008 was $3.2 million. In October 2006 we sold the outstanding shares of stock of Hayes Lemmerz International — Southfield, Inc., our Southfield, Michigan iron suspension components machining plant. We received net cash proceeds of $18.0 million and recorded a loss on the sale through October 31, 2008 of $2.1 million. In fiscal 2005 we sold our suspension facility in Cadillac, Michigan. These facilities made up our suspension components business (Suspension business) and were part of our previous reported Components segment We divested these operations in order to streamline our business in North America, provide us with greater financial flexibility, and focus our global resources on core businesses.

~~As of January 31, 2008, we had a balance of $0.2 million in accrued liabilities for our Suspension business. Operating results for the Suspension business were as follows (dollars in millions):~~

Three Months Ended October 31, Nine Months Ended October 31,
2008 2007 2008 2007
Net sales $ — $ — $ — $ 6.8

Earning (loss) before income tax expense $ 0.1 $ 0.8 $ 0.1 $ (4.3 )
Income tax expense — — — —

Net income (loss) $ 0.1 $ 0.8 $ 0.1 $ (4.3 )

~~The operating results of the Brakes business, MGG Group, and Suspension business were classified as discontinued operations and prior periods have been reclassified in accordance with SFAS 144.~~

Note 7.5. Bank Borrowings, Other Notes, and Long-Term Debt

Short term bank borrowings and other notes were ~~$46.4~~$34.5 million as of ~~October 31, 2008~~April 30, 2009 with a weighted average interest rate of ~~7.2%~~4.7% and ~~$32.9~~$46.6 million as of January 31, ~~2008~~2009 with a weighted average interest rate of ~~6.0%~~5.4%. These consist primarily of short-term credit facilities at our foreign subsidiaries.

Long-term debt consists of the following (dollars in millions):

October 31, January 31,
2008 2008
Various foreign bank and government loans, weighted average interest rates of 4.8% and 4.0% at October 31, 2008 and January 31, 2008, respectively $ 2.4 $ 3.3
Term Loan maturing 2014, weighted average interest rate of 7.3% and 7.4% at October 31, 2008 and January 31, 2008, respectively 335.2 381.5
8.25% New Senior Notes due 2015 169.7 192.2
Revolving Credit Facility, weighted average interest rate of 6.0% at October 31, 2008 16.0 —

523.3 577.0
Less current portion of long-term debt (4.2 ) (4.8 )

Total long-term debt $ 519.1 $ 572.2


	April 30,		January 31,
	2009		2009
Various foreign bank and government loans, weighted average interest rates of 3.5% and 3.9% at April 30, 2009 and January 31, 2009, respectively	$	2.5	$	2.3
Term Loan, weighted average interest rate of 10.5% and 10.2% at April 30, 2009 and January 31, 2009, respectively		337.6		328.9
8.25% Senior Notes		171.8		167.3
Revolving Credit Facility, weighted average interest rate of 8.5% at both April 30, 2009 and January 31, 2009		125.0		125.0

		636.9		623.5
Less current portion of long-term debt		635.3		622.1

Total long-term debt	$	1.6	$	1.4

Classification of Debt

In January 2009, we favorably modified the leverage ratio and interest coverage ratio covenants under our Pre-petition Credit Facilities for the fourth quarter of fiscal 2008 and for each quarter of fiscal 2009. Absent the amendment, we would have been in default of our covenants as of January 31, 2009. In addition, due to the continuing deterioration in the global economy and the automotive industry in particular, it will be increasingly difficult for us to achieve continued compliance in subsequent periods without repaying borrowings under the Revolving Credit Facility, absent a waiver or a further amendment from our lenders. In accordance with Emerging Issues Task Force 86-30, “Classification of Obligations When a Violation Is Waived by the Creditor,” we reclassified our debt to current as of January 31, 2009.

Euro Denominated Debt

The balance of our Term Loan, ~~maturing 2014~~which is described more fully below, was approximately ~~€256.8~~€255.4 million ~~and €258.1 million as of October 31, 2008~~at both April 30, 2009 and January 31, ~~2008 respectively.~~2009. The balance of our ~~8.25% New~~ Senior Notes ~~due 2015~~ was ~~€130~~€130 million ~~as of October 31, 2008~~at both April 30, 2009 and January 31, ~~2008.~~2009. The US ~~Dollar~~dollar balance of the Term Loan ~~maturing 2014 decreased~~increased from ~~$381.5~~$328.9 million as of January 31, ~~2008~~2009 to ~~$335.2~~$337.6 million as of ~~October 31, 2008,~~April 30, 2009, which was ~~primarily~~ due to the fluctuation of foreign currency exchange rates. The US ~~Dollar~~dollar balance of the 8.25% ~~New~~ Senior Notes ~~due 2015 decreased~~increased from ~~$192.2~~$167.3 million as of January 31, ~~2008~~2009 to ~~$169.7~~$171.8 million as of ~~October 31, 2008~~April 30, 2009 due to the fluctuation of foreign currency exchange rates. As a result of our Chapter 11 filings, we are in default under both our Term Loan, which is scheduled to mature in 2014, and our Senior Notes, which are scheduled to mature in 2015, subject to an automatic stay of any action to collect, assert, or recover a claim against us under applicable bankruptcy law.

~~Rights Offering~~

On March 16, 2007 we announced that our Board of Directors approved a Rights Offering of up to $180 million of common stock to our stockholders at a subscription price of $3.25 per share. The Board of Directors set the record date of April 10, 2007 for determining the stockholders entitled to participate in the Rights Offering. On April 16, 2007, the Board of Directors amended the Rights Offering, reducing the number of shares available to Deutsche Bank Securities subject to its Direct Investment option at a price of $3.25 per share from a maximum of 5,538,462 shares to a maximum of 4,038,462 shares. In addition, Deutsche Bank agreed that shares exercised pursuant to the Direct Investment would be in addition to, and not reduce the number of shares of the Company’s Common Stock offered in the Rights Offering, raising the total value of the Rights Offering and Direct Investment to $193.1 million. The Rights Offering and the Direct Investment were approved at a special meeting of stockholders held on May 4, 2007.

In May 2007, we distributed to stockholders of record as of April 10, 2007 non-transferable subscription rights to purchase shares of our common stock in connection with the Rights Offering. Stockholders on the record date received 1.3970 rights for each share of our common stock held on the record date. The Rights Offering included an oversubscription privilege entitling holders of the rights to subscribe for additional shares not purchased upon exercise of rights. The Rights Offering was fully subscribed and Deutsche Bank Securities, Inc. exercised the Direct Investment. On May 30, 2007 we closed on the Rights Offering and Direct Investment and issued 59,423,077 new shares of common stock. Net proceeds of $185.4 million, after fees and expenses of $7.7 million, were used to repurchase the outstanding 10¹/2~~% Senior Notes due 2010 (Old Notes) pursuant to the tender offer described below, with the excess being used to provide working capital and for general corporate purposes.~~

~~Old Notes~~

As of January 31, 2007, HLI Operating Company, Inc. (HLI Opco) had $162.5 million aggregate principal amount of Old Notes that were to mature on June 15, 2010. Interest on the Old Notes accrued at a rate of 10¹/2% per annum and was payable semi-annually in arrears on June 15 and December 15. During the first quarter of fiscal 2007, we issued common stock in exchange for $5.0 million of the Old Notes, reducing the principal amount outstanding from $162.5 million to $157.5 million. During the second quarter of fiscal 2007 these notes were repurchased by HLI Opco pursuant to the tender offer.

Except as set forth below, the Old Notes were not redeemable at the option of HLI Opco prior to June 15, 2007. Starting on that date, HLI Opco could redeem all or any portion of the Old Notes, at once or over time, upon the terms and conditions set forth in the senior note indenture agreement (Old Indenture). At any time prior to June 15, 2007, HLI Opco could redeem all or any portion of the Old Notes, at once or over time, at a redemption price equal to 100% of the principal amount of the Old Notes to be redeemed, plus a specified “make-whole” premium.

The Old Indenture provided for certain restrictions regarding additional debt, dividends and other distributions, additional stock of subsidiaries, certain investments, liens, transactions with affiliates, mergers, consolidations, and the transfer and sales of assets. The Indenture also provided that a holder of the Old Notes could, under certain circumstances, have the right to require that we repurchase such holder’s Old Notes upon a change of control of the Company. The Old Notes were unconditionally guaranteed as to the payment of principal, premium, if any, and interest, jointly and severally on a senior, unsecured basis by us and substantially all of our domestic subsidiaries.

~~Tender Offer for~~ Senior Notes

On May 8, 2007, HLI Opco commenced a cash tender offer to repurchase all of its outstanding Old Notes, which had an aggregate principal amount outstanding of $157.5 million. Concurrently with the tender offer, HLI Opco solicited consents to amend the indenture governing the Old Notes. The tender offer expired at 11:59 p.m., Eastern Standard time, on Tuesday, June 5, 2007. The purchase price for the tendered Old Notes was based on a fixed spread of 50 basis points over the yield on the 3.625% U.S. Treasury Note due June 30, 2007. Holders who validly tendered their Old Notes and delivered their consents to the proposed amendments to the indenture on or prior to 5:00 p.m., Eastern Standard time, on May 21, 2007, were paid, in addition to the purchase price for the Old Notes, a consent payment equal to $30.00 per $1,000 in principal amount of Old Notes. Holders of approximately $154.2 million principal amount tendered their Old Notes and consented to the amendments to the Indenture. On June 6, 2007 the remaining $3.3 million inOur Senior Notes ~~were tendered for redemption.~~

~~New Senior Notes~~

~~On May 30, 2007 we closed on a new offering~~consist of ~~€130~~€130 million 8.25% of senior unsecured notes ~~(New Notes)~~ issued by Hayes Lemmerz Finance LLC — Luxembourg ~~S.C.A., a newly formed European subsidiary~~S.C.A (Hayes Luxembourg)., an indirect, wholly-owned subsidiary of the Company. The ~~New~~Senior Notes are scheduled to mature in 2015 ~~and contain customary covenants and restrictions.~~but, as a result of our Chapter 11 filings, are currently in default, subject to an automatic stay of any action to collect, assert, or recover a claim against us under applicable bankruptcy law. The New Notes and the related Indenture restrict our ability to, among other things, make certain restricted payments, incur debt and issue preferred stock, incur liens, permit dividends and other distributions by our subsidiaries, merge, consolidate, or sell assets, and engage in transactions with affiliates. The New Notes and the Indenture also contain customary events of default, including failure to pay principal or interest on the Notes or the guarantees when due, among others. The NewSenior Notes are fully and unconditionally guaranteed on a senior unsecured basis by us and substantially all of our direct and indirect domestic subsidiaries and certain of our indirect foreign subsidiaries. Proceeds from the issuance of the New Notes, together with the proceeds from the New Credit Facilities (as described below), were used to refinance obligations under our Amended and Restated Credit Agreement, dated as of April 11, 2005, to repay in full the approximately $21.8 million mortgage note on our headquarters building in Northville, Michigan, to pay related fees and expenses, and for working capital and other general corporate purposes.

119

We were required to exchange the New Senior Notes for substantially identical senior notes that have been registered with the SEC (Exchange Notes). In connection with this obligation, we were required to file a registration statement with the SEC with respect to the Exchange Notes on or prior to August 28, 2007, to cause such registration statement to be declared effective on or prior to November 26, 2007 and to complete the exchange offering by December 26, 2007. We failed to meet the obligations to cause the registration statement to be declared effective and the exchange offer to be completed by the required dates. The registration statement was ultimately declared effective on April 11, 2008 and the exchange offer was completed on May 12, 2008. As a result, additional interest has accrued on the principal amount of the New Senior Notes at a rate of 0.25% per annum from and including November 27, 2007 through February 24, 2008 and a rate of 0.50% per annum from and including February 25, 2008 through the date on which the exchange offer was completed. The amount of additional interest expense was not material to our consolidated financial statements.

Credit Facility

On June 3, 2003 HLI Opco entered into a $550 million senior secured credit facility ~~(Old~~(Original Credit Facility), which initially consisted of a $450 million six-year amortizing term loan ~~(Term Loan B)~~ and a five-year $100 million revolving credit facility.

On April 11, 2005 we amended and restated the ~~Old~~Original Credit Facility to establish a new second lien $150 million term loan, ~~(Term Loan C),~~ from which 50% of the net proceeds were to be used for general corporate purposes, with the remainder of the net proceeds used to repay a portion of the ~~Term Loan B. The Term Loan C principal balance of $150 million was due on June 3, 2010.~~existing term loan.

On May 30, 2007 we amended and restated the ~~credit facility~~Original Credit Facility to establish three new senior secured credit facilities in an amount of approximately $495 million ~~(New~~(Pre-petition Credit Facilities). The proceeds from the New Credit Facilities, together with the proceeds of other financing activities, were used to refinance our obligations under the Old Credit Facility. Additional proceeds were used to replace existing letters of credit and to provide for working capital and other general corporate purposes, and to pay the fees and expenses associated with the New Credit Facilities.

~~The New~~Pre-petition Credit Facilities consist of a term loan facility of ~~€260~~€260 million ~~maturing in 2014~~ borrowed by Hayes Luxembourg (Term Loan), a revolving credit facility of $125 million ~~maturing in 2013~~ available to HLI Opco and Hayes Luxembourg (Revolving Credit Facility), and a synthetic letter of credit facility of ~~€15~~€15 million available to both borrowers. The interest rate for the ~~term loan~~Term Loan and synthetic letter of credit facility is ~~generally~~ the EURIBOR rate plus ~~2.75%~~6.0% per annum ~~until the first date after October 31, 2007 that our leverage ratio is equal to or less than 2.5 to 1.0 and, thereafter, the~~with a EURIBOR ~~rate plus 2.50% per annum.~~floor of 3.5%. The interest rate for the Revolving Credit Facility is ~~generally either~~ the ~~LIBOR~~Citibank base rate plus 5.25% per annum. Prior to the January 2009 amendment to the Pre-petition Credit Facilities, the interest rate for the Term Loan and synthetic letter of credit facility was EURIBOR plus 2.75% per annum ~~(for borrowings by HLI Opco) or~~and the ~~EURIBOR~~interest rate for the Revolving Credit Facility was the Citibank base rate plus ~~2.75%~~2.0%. As a result of our failure to comply with certain financial covenants under the Pre-petition Credit Facilities, the interest rates above were increased by 2.0% per annum ~~(for borrowings by Hayes Luxembourg).~~from and after the date of default.

~~The~~As of April 30, 2009, the obligations of HLI Opco and Hayes Luxembourg under the ~~New~~Pre-petition Credit ~~Facility are~~Facilities were guaranteed by us and substantially all of our direct and indirect domestic subsidiaries. In addition, the obligations of Hayes Luxembourg under the ~~New~~Pre-petition Credit Facilities ~~are~~were guaranteed, subject to certain exceptions, by certain of our foreign subsidiaries. ~~The~~As of April 30, 2009, the obligations of HLI Opco and Hayes Luxembourg under the ~~New~~Pre-petition Credit Facilities and the guarantors’ obligations under their respective guarantees of the ~~New~~Pre-petition Credit Facilities ~~are,~~were, subject to certain exceptions, secured by a first priority perfected pledge of substantially all capital stock owned by the borrowers and the guarantors (but not more than 65% of the capital stock of Hayes Luxembourg or any foreign subsidiary can secure HLI Opco’s obligations) and substantially all of the other assets owned by the borrowers and the guarantors. The guarantees and security for the Pre-petition Credit Facilities are subordinated to priming liens granted by the Bankruptcy Court in connection with the DIP Financing and other liens granted as security for the DIP Loans. All foreign guarantees and collateral are subject to applicable restrictions on cross-stream and upstream guarantees and other legal restrictions, including financial assistance rules, thin capitalization rules, and corporate benefit rules.

~~The New~~As of April 30, 2009, the Pre-petition Credit Facilities ~~contain~~contained negative covenants restricting our ability and the ability of our subsidiaries to, among other actions, declare dividends or repay or repurchase capital stock, cancel, prepay, redeem or repurchase debt, incur liens and engage in sale-leaseback transactions, make loans and investments, incur indebtedness, amend or otherwise alter certain debt documents, engage in mergers, acquisitions and asset sales, engage in transactions with affiliates, and alter their respective businesses. The financial covenants under the ~~New~~Pre-petition Credit Facilities include covenants regarding a maximum total leverage ratio, a minimum interest coverage ratio and a maximum capital expenditures amount. ~~The New~~These covenants have been supplemented by the covenants in the DIP Credit Facilities contain customary events of default including, without limitation, failure to pay principal and interest when due, material inaccuracy of any representation or warranty, failure to comply with any covenant, cross-defaults, failure to satisfy or stay execution of judgments in excess of specified amounts, bankruptcy or insolvency, the existence of certain materially adverse employee benefit liabilities in excess of a certain specified amount, the invalidity or impairment of any loan documents and a change of control.Agreement.

As of ~~October 31, 2008~~April 30, 2009 there were ~~$16.0~~$125 million of borrowings and ~~$0.8 million in~~no letters of credit issued under the Revolving Credit Facility, and ~~$19.1~~$15.7 million in letters of credit issued under the synthetic letter of credit facility. As of January 31, ~~2008 there were no outstanding borrowings, approximately $0.8~~2009 we had borrowed $125 million ~~in letters of credit issued~~ under the Revolving Credit Facility and ~~approximately $20.8~~had issued $19.1 million in letters of credit ~~issued~~ under the synthetic letter of credit facility. ~~The amount~~HLI Opco is restricted from repaying current borrowings of $125 million under the Revolving Credit Facility unless we have achieved EBITDA of at least $200 million for the twelve months preceding the date of the repayment. There were no funds available to borrow under the Revolving Credit Facility at ~~October 31, 2008 and~~April 30 or January 31, ~~2008~~2009. There was ~~$108.2 million and $124.2 million, respectively. The~~no amount available ~~to borrow~~for the issuance of letters of credit under the synthetic letter of credit at ~~October 31, 2008~~April 30, 2009 and $0.3 million available at January 31, ~~2008 was $0.5 million and $1.3 million, respectively.~~2009.

Covenant Compliance

As of ~~October 31, 2008,~~April 30, 2009, we were in ~~compliance with all applicable~~violation the leverage ratio and interest coverage ratio covenants of our Pre-petition Credit Facilities. The failure to meet these covenants and ~~restrictions~~our subsequent Chapter 11 filings were events of our New Credit Facilities, although we will be increasingly unlikely to achieve compliance in subsequent periods, absent a waiver or amendment from our lenders. We are currently pursuing an amendment to the New Credit Facilities to enable us to comply with the covenants in future periods and to continue to access the Revolving Credit Facility without restrictions. We can give no assurance that we will obtain such an amendment to the covenants or that such an amendment, if obtained, would enable us to continue to access the Revolving Credit Facility without restrictions. If we are unable to obtain such an amendment, we will be restricted in our ability to access the Revolving Credit Facility and will likely violate the covenants in future periods. Such a violation could result in the acceleration of amounts duedefault under the ~~New~~Pre-petition Credit Facilities and also resulted in a default under the ~~New~~Senior Notes. As a result, those long-term debt obligations became automatically and immediately due and payable, subject to an automatic stay of any action to collect, assert, or recover a claim against the Debtors and the application of applicable bankruptcy law. In accordance with Emerging Issues Task Force 86-30, “Classification of Obligations When a Violation Is Waived by the Creditor,” we reclassified our debt to current as of January 31, 2009 due to the anticipation of the likely covenant violation as of April 30, 2009.

Note 8.6. Pension Plans and Postretirement Benefits Other Than Pensions

We sponsor several defined benefit pension plans (Pension Benefits) and health care and life insurance benefits (Other Benefits) for certain employees around the world. We fund the Pension Benefits based upon the funding requirements of United States and international laws and regulations in advance of benefit payments and the Other Benefits as benefits are provided to the employees.

The fiscal ~~2008~~2009 and fiscal ~~2007~~2008 amounts shown below present the Pension Benefits and Other Benefits expense for the three ~~and nine~~ months ended ~~October 31,~~April 30, 2009 and 2008 ~~and 2007~~ (dollars in millions):

Pension Benefits - US Other Benefits - US Pension Benefits - International
Three Months Ended October 31,
2008 2007 2008 2007 2008 2007
Service cost $ 0.2 $ 0.3 $ — $ — $ 0.1 $ 0.3
Interest cost 2.5 2.6 2.4 2.5 1.8 1.6
Expected return on plan assets (3.3 ) (3.0 ) — — (0.2 ) (0.2 )
Amortization of net loss (0.1 ) — (0.4 ) (0.1 ) — —

Net periodic benefit cost $ (0.7 ) $ (0.1 ) $ 2.0 $ 2.4 $ 1.7 $ 1.7


	Pension Benefits - US						Other Benefits - US						Pension Benefits - International						Pension Benefits - US						Other Benefits - US						Pension Benefits - International
	Nine Months Ended October 31,																		Three Months Ended April 30,
	2008			2007			2008			2007			2008			2007			2009			2008			2009			2008			2009			2008
Service cost	$	0.8		$	0.8		$	—		$	—		$	0.5		$	0.6		$	0.3		$	0.3		$	—		$	—		$	0.1		$	0.2
Interest cost		7.7			7.8			7.0			7.2			5.6			4.9			2.8			2.6			2.5			2.3			1.7			1.9
Expected return on plan assets		(9.9	)		(9.0	)		—			—			(0.8	)		(0.6	)		(1.9	)		(3.3	)		—			—			(0.1	)		(0.3	)
Amortization of net loss		(0.7	)		—			(1.1	)		(0.3	)		—			—
Amortization of net loss (gain)																				0.7			(0.2	)		(1.0	)		(0.4	)		—			—
Amortization of prior service cost																				—			—			—			—			0.1			—

Net periodic benefit cost	$	(2.1	)	$	(0.4	)	$	5.9		$	6.9		$	5.3		$	4.9		$	1.9		$	(0.6	)	$	1.5		$	1.9		$	1.8		$	1.8

In May 2008 we announced the closure of our Gainesville, Georgia aluminum wheels facility. We also announced that Punch Property International nv (Punch Property), the property investment company of the Punch group, entered into a definitive agreement with Hayes Lemmerz International - Georgia, Inc. to purchase the real estate and certain equipment from Gainesville. This acquisition is expected to be completed following cessation of production in connection with the closure of the facility. The purchase price of the transaction was not material to either party. We incurred $1.2 million in one-time termination benefits and severance related to this closure.

Asset Impairment Losses and Other Restructuring Charges for the Three Months Ended ~~October 31, 2008~~April 30, 2009

During the ~~third~~first quarter of fiscal ~~2008,~~2009, we recorded facility closure, employee restructuring charges, and asset impairments of ~~$2.7~~$4.2 million.

In the Automotive Wheels segment we recorded expense of ~~$2.6~~$3.6 million. Facility closure costs of ~~$1.1~~$0.6 million were related to ongoing costs for our idle aluminum wheel facilities in Howell, Michigan, which was reclassified as an asset held for sale as of April 30, 2009, and Huntington, Indiana, as well as our aluminum wheel facility in Gainesville, ~~Georgia.~~Georgia, which is subject to a definitive agreement of the facility to for the sale with Punch Property International NV for the sale (seeNote 4, Asset Held for Salefor additional information). Asset impairments of $0.6 million ~~was~~were related to our idle aluminum wheel facility in ~~Gainesville, Georgia, which was written down to fair value~~Howell, Michigan, based on ~~current market conditions.~~an offer received from an interested buyer with whom we are in negotiations for the sale of the facility. Severance and other restructuring costs of ~~$0.9~~$2.4 million were related to headcount reductions at our facilities in ~~Gainesville, Georgia; Dello, Italy;~~Manresa, Spain; Chihuahua, Mexico; Königswinter, Germany; Manisa, Turkey; and ~~Königswinter, Germany.~~Alrode, South Africa facilities in order to align headcount with the lower sales volumes.

Expense of $0.1 million in the Other segment was related to facility closure costs for our Ferndale, Michigan technical center, which was closed in fiscal 2007. Expense of $0.5 million in Other segment was related to severance and other restructuring costs for our powertrain facility in Nuevo Laredo, Mexico.

Asset Impairment Losses and Other Restructuring Charges for the Three Months Ended ~~October 31, 2007~~

~~During the third quarter of fiscal 2007, we recorded facility closure, employee restructuring charges, and asset impairments of $50.0 million.~~

In the Automotive Wheels segment we recorded expense of $49.0 million. Facility closure costs of $0.1 million were related to ongoing costs for our idle aluminum wheel facilities in Howell, Michigan and Huntington, Indiana. Asset impairments of $11.2 million were related to our aluminum wheel facility in Hoboken, Belgium, which was sold on June 13, 2008 to BBS International GmbH (BBS). Asset impairments of $20.0 million were related to our aluminum wheel facility in Gainesville, Georgia, and the remainder of $17.7 million was primarily related to our aluminum wheel facility in Chihuahua, Mexico.

The Other segment expense of $1.0 million was primarily related to machinery and equipment impairments and severance expense at our facility in Nuevo Laredo, Mexico, as well as severance expense at our corporate offices.

~~Asset Impairment Losses and Other Restructuring Charges for the Nine Months Ended October 31,~~April 30, 2008

During the first ~~nine months~~quarter of fiscal 2008, we recorded facility closure, employee restructuring charges, and asset impairments of ~~$11.8~~$3.3 million.

In the Automotive Wheels segment we recorded expense of ~~$11.4~~$3.1 million. Facility closure costs of ~~$1.7~~$0.3 million were related to ongoing costs for our ~~idle~~ aluminum wheel facilities in Howell, Michigan and Huntington, ~~Indiana, as well as our aluminum wheel facility in Gainesville, Georgia.~~Indiana. Asset impairments of ~~$7.8~~$2.7 million were related to our aluminum wheel facilities in ~~Gainesville, Georgia; Huntington, Indiana;~~ Howell, ~~Michigan; Hoboken, Belgium;~~Michigan and Chihuahua, ~~Mexico. These facilities~~Mexico, which were ~~written down~~impaired to the fair value ~~based on current market conditions.~~in accordance with SFAS 144, and Hoboken, Belgium, which was sold during the second quarter of fiscal 2008. Severance and other restructuring costs of ~~$1.9~~$0.1 million were related to our ~~facilities~~aluminum wheel facility in ~~Gainesville, Georgia;~~ Dello, ~~Italy; and Königswinter, Germany.~~Italy.

Expense of ~~$0.4~~$0.2 million in the Other segment ~~was related to~~consists of $0.1 million for facility closure ~~costs~~cost and severance of $0.1 million for our Ferndale, Michigan technical center, which was closed in fiscal 2007.

~~Asset Impairment Losses and Other Restructuring Charges for the Nine Months Ended October 31, 2007~~

~~During the first nine months of fiscal 2007, we recorded facility closure, employee restructuring charges, and asset impairments of $54.0 million.~~

In the Automotive Wheels segment we recorded expense of $52.3 million. Facility closure costs of $2.9 million were related to ongoing costs for our idle aluminum wheel facilities in Howell, Michigan and Huntington, Indiana. Asset impairments of $11.2

1512

We have 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 federal income tax benefit recorded against current losses incurred ~~at those locations.~~in the United States.

Effective February 1, 2007, we adopted Financial Accounting Standards Board Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109” (FIN 48). FIN 48 provides guidance on financial statement recognition and measurement of tax positions taken, or expected to be taken, in tax returns. The ~~initial adoption of FIN 48 did not have a material impact on our financial statements. As of January 31, 2008, the~~ amount of unrecognized tax benefits was ~~$11.1~~$4.9 million ~~including $1.3~~and $4.8 million ofat April 30, 2009 and January 31, 2009 respectively, without related accrued interest and penalties. As of October 31, 2008, the amount of unrecognized tax benefits was $4.8 million, including $0.3 million of related accrued interest and penalties. The decrease relates to tax payments made and expiration of statute of limitations for certain international locations.

The amount of unrecognized tax benefits may increase or decrease in the future for various reasons including adding amounts for current tax year positions, expiration of open income tax returns due to the statutes of limitation, changes in management’s judgment about the level of uncertainty, status of examinations, litigation and legislative activity, and the addition or elimination of uncertain tax positions. Our policy is to report interest related to unrecognized tax benefits in interest expense and penalties, if any, related to unrecognized tax benefits in income tax expense in our Consolidated Statements of Operations.

We have open tax years from primarily ~~2000~~2001 to ~~2007~~2008 with various significant taxing jurisdictions including the United States, Germany, Italy, Brazil, Turkey, Spain and Czech Republic. These open years contain matters that could be subject to differing interpretations of applicable tax laws and regulations as they relate to the amount, timing or inclusion of revenue and expenses or the sustainability of income tax credits for a given audit cycle. We have recorded a tax benefit only for those positions that meet the more-likely-than-not standard.

Note ~~12.~~10. Segment Reporting

We are organized based primarily on markets served and products produced. Under this organizational structure, our operating segments have been aggregated into two reportable segments: Automotive Wheels and Other. The Automotive Wheels segment includes results from our operations that primarily design and manufacture fabricated steel and cast aluminum wheels for original equipment manufacturers in the global passenger car, light vehicle, and commercial vehicle markets. The Other segment includes results from our operations that primarily design and manufacture powertrain components for the passenger car and light vehicle markets as well as financial results related to the corporate office and the elimination of certain intercompany activities.

The following tables present revenues and other financial information by business segment (dollars in millions):


	Three Months Ended October 31, 2008						Three Months Ended April 30, 2009
	Automotive						Automotive
	Wheels		Other		Total		Wheels			Other			Total
Net sales	$	475.6	$	21.4	$	497.0	$	247.1		$	11.1		$	258.2
Asset impairments and other restructuring charges		2.6		0.1		2.7		3.6			0.6			4.2
Earnings from operations		14.4		6.2		20.6
Loss from operations								(30.2	)		(10.8	)		(41.0	)

Nine Months Ended October 31, 2008
Automotive
Wheels Other Total
Net sales $ 1,587.7 $ 46.6 $ 1,634.3
Asset impairments and other restructuring charges 11.4 0.4 11.8
Earnings from operations 19.0 13.0 32.0

Nine Months Ended October 31, 2007
Automotive
Wheels Other Total
Net sales $ 1,531.3 $ 66.3 $ 1,597.6
Asset impairments and other restructuring charges 52.3 1.7 54.0
Earnings (loss) from operations 24.4 (40.0 ) (15.6 )

As of October 31, 2008
Automotive
Wheels Other Total
Total assets $ 1,636.3 $ (146.4 ) $ 1,489.9

As of January 31, 2008
Automotive
Wheels Other Total
Total assets $ 1,956.6 $ (150.7 ) $ 1,805.9

Note ~~13. Minority~~11. Noncontrolling Interest in ~~Equity~~Consolidated Financial Statements

In December 2007, the FASB issued SFAS 160, “Noncontrolling Interests in Consolidated Financial Statements” (SFAS 160). SFAS 160 became effective for fiscal years beginning on or after December 15, 2008. We adopted SFAS 160 on a prospective basis on February 1, 2009, except for the presentation and disclosure requirements which were applied retrospectively for all periods presented. The adoption of ~~Consolidated Subsidiaries~~SFAS 160 had an impact on the presentation and disclosure of noncontrolling interests in the consolidated financial statements. The former “minority interest” is now called “noncontrolling interest” in the consolidated financial statements. The presentation of the mezzanine section of the minority interest is now part of the equity on the consolidated balance sheet. Additionally, the adoption of SFAS 160 had the effect of reclassifying income (loss) attributable to the noncontrolling interest in the consolidated statements of operations from minority interest to separate line items and net income (loss) be adjusted to include net income (loss) attributable to both noncontrolling interest and controlling interest.

The consolidated financial statements include the accounts of our majority-owned subsidiaries in which we have control. The balance sheet and results of operations of controlled subsidiaries where ownership is greater than 50 percent ~~but less than 100 percent,~~ are included in the consolidated financial statements and are offset by a related ~~minority~~adjustment to equity and interest expense ~~and liability recorded~~ for the ~~minority~~noncontrolling interest ownership.

~~Minority~~Noncontrolling interest includes common shares in consolidated subsidiaries where our ownership is less than 100 percent and preferred stock issued by HLI Opco. The preferred stock is redeemable by HLI Opco at any time after June 3, 2013, and may be exchanged at the option of the holders at any time for shares of our common stock. The holders of the preferred stock are entitled to cash dividends of 8% of the liquidation preference per annum when, as, and if declared by the Board of Directors of HLI Opco. Dividends accrue without interest from the date of issuance until declared and paid or until the shares are redeemed by HLI Opco or exchanged by the holders thereof.

The balance of ~~minority~~noncontrolling interest is summarized as follows (dollars in millions):

October 31, January 31,
2008 2008
Minority interest in consolidated affiliates $ 55.3 $ 59.3
Minority interest in preferred stock 11.4 11.2

Total minority interest $ 66.7 $ 70.5


	April 30,		January 31,
	2009		2009
Noncontrolling interest in consolidated affiliates	$	50.8	$	54.3
Noncontrolling interest in preferred stock		11.7		11.5

Total noncontrolling interest	$	62.5	$	65.8

Note 12. Fair Value Measurement

On February 1, 2008 we adopted SFAS 157 for fair value measurements of financial assets and financial liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. In February 2008, the FASB issued FASB Staff Position 157-2, “Effective Date of FASB Statement No. 157” (FSP 157-2). This FSP delays the effective date of SFAS 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The effective date for nonfinancial assets and nonfinancial liabilities has been delayed by one year to fiscal years beginning after November 15, 2008 and interim periods within those fiscal years. We adopted FSP 157-2 on February 1, 2009.

SFAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS 157 also establishes a framework for measuring fair value and expands disclosures about fair value measurements. As a basis for considering market participant assumptions in fair value measurements, SFAS 157 establishes a fair-value hierarchy that prioritizes inputs for valuation techniques used to measure fair value as follows:

Level 1: Observable inputs, such as quoted market prices in active markets, for identical assets or liabilities that are accessible at the measurement date.

Level 2: Inputs, other than quoted market prices included in Level 1, that are observable either directly or indirectly for the asset or liability.

Level 3: Unobservable inputs that reflect the entity’s own assumptions about the exit price of the asset or liability. Unobservable inputs may be used if there is little or no market data for the asset or liability at the measurement date.

Assets and liabilities measured at fair value are based on one or more of the following three valuation techniques noted in SFAS 157:


		Market approach:		Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

		Income approach:		Uses valuation techniques to convert future amounts to a single present value amount based on current market expectations.

		Cost approach:		The amount that would be required to replace the service capacity of the asset (replacement costs).

Our financial instruments include cash, marketable securities, trade receivables, other receivables, trade payables, and short-term debt. Due to the short-term nature of these instruments, the book value approximates fair value.

We generally manage our interest rate risks associated with interest rate movements through the use of a combination of variable and fixed rate debt. From time to time, we have entered into interest rate swap arrangements to further hedge against interest rate fluctuations (cash flow hedge). As of April 30, 2009 and January 31, 2009, we had four interest rate swaps, two with Deutsche Bank and two with UBS Bank.

The following table provides a summary of the interest rate swaps as of April 30 and January 31, 2009 (in millions):


		Notional
	Hedge Type	Amount	Maturity
Deutsche Bank Swap	Cash flow hedge	€ 40.0	8/28/2012
Deutsche Bank Swap	Cash flow hedge	€ 30.0	8/28/2012
UBS Swap	Cash flow hedge	€ 25.0	9/30/2012
UBS Swap	Cash flow hedge	€ 25.0	9/30/2012

The fair value related to the interest rate swaps as shown in the following table are included in other accrued liabilities on the Consolidated Balance Sheets for the years indicated (dollars in millions):


	April 30, 2009					January 31, 2009
	Carrying				Fair Value	Carrying				Fair Value
	Value		Fair Value		Hierarchy	Value		Fair Value		Hierarchy
Deutsche Bank Swap,€40 million	$	1.0	$	1.0	Level 3	$	1.9	$	1.9	Level 2
Deutsche Bank Swap,€30 million		0.7		0.7	Level 3		1.4		1.4	Level 2
UBS Swap,€25 million		0.2		0.2	Level 3		1.2		1.2	Level 2
UBS Swap,€25 million		0.2		0.2	Level 3		1.1		1.1	Level 2

Total swaps	$	2.1	$	2.1		$	5.6	$	5.6

The fair values of the financial instruments shown in the above table as of April 30 and January 31, 2009 represent management’s best estimates of the amounts that would be paid to transfer those liabilities in an orderly transaction between market participants at those dates. Those fair value measurements maximize the use of unobservable inputs as of April 30, 2009 and observable inputs as of January 31, 2009. The inputs used in calculating the fair value of the interest rate swaps as of April 30, 2009 were based on ongoing restructuring negotiations with our creditors. For the three months ended April 30, 2009, we recorded income of 3.5 million due to the fair value adjustment, which is included in interest expense, net in our consolidated statements of operations.

Note 13. Derivative Instruments and Hedging Activities

In March 2008 the FASB issued SFAS 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133” (SFAS 161). This statement is intended to improve transparency in financial reporting by requiring enhanced disclosures of an entity’s derivative instruments and hedging activities and their effects on the entity’s financial position, financial performance, and cash flows. SFAS 161 applies to all derivative instruments within the scope of SFAS 133, “Accounting for Derivative Instruments and Hedging Activities” (SFAS 133) as well as related hedged items, bifurcated derivatives, and nonderivative instruments that are designated and qualify as hedging instruments. Entities with instruments subject to SFAS 161 must provide more robust qualitative disclosures and expanded quantitative disclosures. SFAS 161 is effective prospectively for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application permitted. The adoption of this statement did not have a material effect on the Company’s financial statements.

We generally manage our risk associated with interest rate movements through the use of a combination of variable and fixed rate debt. We have from time to time entered into interest rate swap arrangements to further hedge against interest rate fluctuations.

We are exposed to fluctuations in interest rates on our variable rate debt. During the second quarter of fiscal 2007, we entered into interest rate swaps with total notional amount of€70 million. The swaps became effective on August 28, 2007 and were scheduled to mature on August 28, 2012. During the third quarter of fiscal 2007, we entered into interest rate swaps with total notional amount of€50 million. The swaps became effective on September 30, 2007 and were scheduled to mature on September 30, 2012. Due to the amendment to our credit agreement in January 2009, our swaps were not effective during the quarter ended April 30, 2009 and income of $3.5 million was recognized in the consolidated statements of operations as interest expense, net. We recorded a gain of $3.0 million to other comprehensive income for the quarter ended April 30, 2008 as the swaps were effective at that time. In May 2009, these interest rate swap agreements were terminated due to our bankruptcy filing on May 11, 2009, which was in violation of the swap agreements.

SeeNote 12, Fair Value Measurementfor the fair value calculations of our interest rate swaps.

Note 14. New Accounting Pronouncements

In ~~March 2008~~June 2009 the FASB issued SFAS ~~161, “~~~~Disclosures about Derivative Instruments~~167, “Amendments to FASB Interpretation No. 46(R)” (SFAS 167). SFAS 167 eliminates Interpretation 46(R)’s exceptions to consolidating qualifying special-purpose entities, contains new criteria for determining the primary beneficiary, and ~~Hedging Activities~~increases the frequency of required reassessments to determine whether a company is the primary beneficiary of a variable interest entity. SFAS 167 also contains a new requirement that any term, transaction, or arrangement that does not have a substantive effect on an entity’s status as a variable interest entity, a company’s power over a variable interest entity, or a company’s obligation to absorb losses or its right to receive benefits of an entity must be disregarded in applying Interpretation 46(R)’s provisions. The elimination of the qualifying special-purpose entity concept and its consolidation exceptions means more entities will be subject to consolidation assessments and reassessments. SFAS 167 will be effective for our fiscal year beginning February 1, 2010. We are currently assessing the potential impacts, if any, on our consolidated financial statements.

In June 2009 the FASB issued SFAS 166, “Accounting for Transfers of financial Assets — an amendment of FASB Statement No. ~~133”~~(140” (SFAS 166). SFAS ~~161). This standard requires enhanced disclosures about an entity’s derivative~~166 eliminates the concept of a qualifying special-purpose entity, creates more stringent conditions for reporting a transfer of a portion of a financial asset as a sale, clarifies other sale-accounting criteria, and ~~hedging activities.~~changes the initial measurement of a transferor’s interest in transferred financial assets. SFAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. This standard is166 will be effective for ~~financial statements issued for~~our fiscal ~~years and interim periods~~year beginning ~~after November 15, 2008 and only requires disclosures for earlier periods presented for comparative purposes beginning in~~February 1, 2010. We are currently assessing the ~~first year after the year of initial adoption. We do not anticipate that the adoption of SFAS 161 will have a significant impact~~potential impacts, if any, on our consolidated financial ~~condition or results of operations.~~statements.

In ~~December 2007~~May 2009 the FASB issued SFAS ~~141R, “~~~~Business Combinations”~~(165, “Subsequent Events” (SFAS 165). SFAS ~~141R). This standard~~165 establishes ~~principles~~general standards of accounting for and ~~requirements for how~~disclosure of events that occur after the ~~acquirer recognizes and measures the acquired identifiable assets, assumed liabilities, noncontrolling interest~~balance sheet date but before financial statements are issued or are available to be issued. It should not result in significant changes in the ~~acquiree,~~subsequent events that an entity reports, either through recognition or disclosure in its financial statements. SFAS 165 introduces the concept of financial statements beingavailable to be issued.It requires the disclosure of the date through which an entity has evaluated subsequent events and ~~acquired goodwill or gain from a bargain purchase. SFAS 141R also determines what information~~ the ~~acquirer must disclose to enable users of~~basis for that date, that is, whether that date represents the date the financial statements were issued or were available to ~~evaluate~~be issued. This disclosure should alert all users of financial statements that an entity has not evaluated subsequent events after that date in the ~~nature~~set of financial statements being presented. SFAS 165 will apply to both interim financial statements and annual financial ~~effects of the business combination. SFAS 141R applies prospectively to business combinations for which the acquisition date is on or~~statements after ~~January 1,~~June 15, 2009. We do not anticipate that the adoption of SFAS ~~141R~~165 will have a significant impact on our financial condition or results of operations.

In December ~~2007 the FASB issued SFAS 160,~~~~“Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51”~~(SFAS 160). This standard establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS 160 clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. SFAS 160 is effective for us as of February 1, 2009 with early adoption prohibited. SFAS 160 shall be applied prospectively as of the beginning of the fiscal year in which this standard is initially applied. The presentation and disclosure requirements of this standard shall be applied retrospectively for all periods presented and will impact how we present and disclose noncontrolling interests and income from noncontrolling interests in our financial statements.

~~In September 2006 the FASB issued SFAS 157,~~~~“Fair Value Measurements”~~(SFAS 157). SFAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements. The changes to current practice resulting from the application of SFAS 157 relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. We adopted the provisions of SFAS 157 with our fiscal year beginning February 1, 2008. The adoption of SFAS 157 did not have an impact on our consolidated financial statements. SFAS 157 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value should be determined based on assumptions that market participants would use in pricing an asset or liability. SFAS 157 uses a three-tier hierarchy that classifies assets and liabilities based on the inputs used in the valuation methodologies. In accordance with SFAS 157, we measured our interest rate derivative contracts at fair value and classified as level 2 liabilities based upon models utilizing market observable inputs and credit risk. The fair value of our interest rate derivative contracts was $5.4 million as of October 31, 2008.

~~In February~~ 2008 the FASB issued FASB Staff Position ~~(FSP) 157-2, “Effective Date~~SFAS 132(R)-1, “Employers’ Disclosures about Postretirement Benefit Plan Assets” (FSP SFAS 132(R)-1). FSP SFAS 132(R)-1 provides enhanced disclosures with regard to assets held by postretirement plans, including how investment allocations are made, the major categories of ~~FASB Statement No. 157” (FSP 157-2). This FSP delays~~plan assets, the ~~effective date~~inputs and valuation techniques used to measure the fair value of plan assets, the effect of fair value measurements using Level 3 inputs, as defined in SFAS 157, ~~for all nonfinancial assets~~“Fair Value Measurements” (SFAS 157) and ~~nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The~~an understanding of significant concentrations of risk within plan assets. FSP SFAS 132(R)-1 is effective ~~date~~ for ~~nonfinancial assets and nonfinancial liabilities has been delayed by one year to~~ fiscal years ~~beginning~~ending after ~~November~~December 15, ~~2008 and interim periods within those fiscal years.~~2009, with early application permitted. We ~~do not anticipate that~~are currently assessing the ~~adoption of FSP 157-2 will have a significant impact~~potential impacts, if any, on our consolidated financial ~~condition and results of operations.~~statements.

Note 15. Condensed Consolidating Financial Statements

The following condensed consolidating financial statements present the financial information required with respect to those entities that guarantee certain of our debt.

The condensed consolidating financial statements are presented based on the equity method of accounting. Under this method, the investments in subsidiaries are recorded at cost and adjusted for our 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

As of ~~October 31, 2008~~April 30, 2009 Hayes Lemmerz International, Inc. (Hayes), HLI Parent Company, Inc. (Parent), HLI Opco, and substantially all of our domestic subsidiaries and certain of our foreign subsidiaries (collectively, excluding Hayes, the Guarantors) fully and unconditionally guaranteed, on a joint and several basis, the ~~New~~Senior Notes. This guarantor structure is a result of the restructuring of our debt ~~as discussed~~ in ~~Note 7, Bank Borrowings, Other Notes, and Long-term Debt.~~May of 2007. At ~~October 31, 2008~~April 30, 2009 certain of our foreign subsidiaries were not obligated to guaranty the ~~New~~Senior Notes, nor were our domestic subsidiaries that are special purpose entities formed for domestic accounts receivable securitization programs (collectively, the Nonguarantor Subsidiaries). In lieu of providing separate unaudited financial statements for each of the Guarantors, we have included the unaudited supplemental guarantor condensed consolidating financial statements. We do not believe that separate financial statements for each of the Guarantors are material to investors. Therefore, separate financial statements and other disclosures concerning the Guarantors are not presented. ~~In order to present comparable financial statements, we have presented them as if~~

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the ~~current guarantor structure had been in place for all periods presented.~~Three Months Ended April 30, 2009
(Unaudited)


							Guarantor			Nonguarantor
	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Total
	(Dollars in millions)
Net sales	$	—		$	—		$	172.5		$	88.7		$	(3.0	)	$	258.2
Cost of goods sold		—			—			174.4			87.0			(2.8	)		258.6

Gross profit		—			—			(1.9	)		1.7			(0.2	)		(0.4	)
Marketing, general, and administrative		—			0.3			30.1			5.0			—			35.4
Equity in losses (earnings) of subsidiaries and joint ventures		58.4			—			—			—			(58.4	)		—
Amortization of intangibles		—			—			0.2			1.8			—			2.0
Asset impairments and other restructuring charges		—			—			2.6			1.6			—			4.2
Other income, net		—			—			(0.9	)		(0.1	)		—			(1.0	)

(Loss) earnings from operations		(58.4	)		(0.3	)		(33.9	)		(6.6	)		58.2			(41.0	)
Interest expense (income), net		—			17.0			2.5			2.5			—			22.0
Other non-operating income		—			(0.1	)		(1.5	)		(0.7	)		—			(2.3	)

(Loss) earnings from operations before taxes		(58.4	)		(17.2	)		(34.9	)		(8.4	)		58.2			(60.7	)
Income tax expense (benefit)		—			0.3			(1.0	)		(0.9	)		—			(1.6	)

Consolidated net (loss) income		(58.4	)		(17.5	)		(33.9	)		(7.5	)		58.2			(59.1	)
Less: Net loss attributable to noncontrolling interest		—			—			—			(0.6	)		—			(0.6	)

Net loss (income) attributable to Hayes Lemmerz International, Inc		(58.4	)		(17.5	)		(33.9	)		(6.9	)		58.2			(58.5	)

1918

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the ~~Nine~~Three Months Ended ~~October 31,~~April 30, 2008
(Unaudited)

Guarantor Nonguarantor
Parent Issuer Subsidiaries Subsidiaries Eliminations Total
(Dollars in millions)
Net sales $ — $ — $ 1,023.2 $ 673.8 $ (62.7 ) $ 1,634.3
Cost of goods sold 0.1 929.4 575.3 (62.7 ) 1,442.1

Gross (loss) profit (0.1 ) — 93.8 98.5 — 192.2
Marketing, general, and administrative — 0.6 79.3 32.9 — 112.8
Equity in (earnings) losses of subsidiaries and joint ventures 70.1 — — — (70.1 ) —
Amortization of intangibles — — 0.4 7.9 — 8.3
Asset impairments and other restructuring charges — — 10.6 1.2 — 11.8
Other (income) expense, net — — (3.4 ) 11.6 19.1 27.3

(Loss) earnings from operations (70.2 ) (0.6 ) 6.9 44.9 51.0 32.0
Interest expense (income), net — 61.5 (31.3 ) 9.6 — 39.8
Other non-operating expense — — 0.5 1.6 0.7 2.8

(Loss) earnings from continuing operations before taxes and minority interest (70.2 ) (62.1 ) 37.7 33.7 50.3 (10.6 )
Income tax expense — 1.9 19.5 18.7 — 40.1

(Loss) earnings from continuing operations before minority interest (70.2 ) (64.0 ) 18.2 15.0 50.3 (50.7 )
Minority interest — — — 17.2 — 17.2

(Loss) earnings from continuing operations (70.2 ) (64.0 ) 18.2 (2.2 ) 50.3 (67.9 )
Loss from discontinued operations . — — (2.3 ) — — (2.3 )

Net (loss) income $ (70.2 ) $ (64.0 ) $ 15.9 $ (2.2 ) $ 50.3 $ (70.2 )


							Guarantor			Nonguarantor
	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Total
	(Dollars in millions)
Net sales	$	—		$	—		$	360.3		$	237.2		$	(23.7	)	$	573.8
Cost of goods sold		—			—			328.7			205.1			(23.7	)		510.1

Gross profit		—			—			31.6			32.1			—			63.7
Marketing, general, and administrative		—			0.3			27.5			11.5			—			39.3
Equity in losses (earnings) of subsidiaries and joint ventures		12.8			—			—			—			(12.8	)		—
Amortization of intangibles		—			—			0.2			2.6			—			2.8
Asset impairments and other restructuring charges		—			—			2.4			0.9			—			3.3
Other income, net		—			—			(2.2	)		(1.2	)		—			(3.4	)

(Loss) earnings from operations		(12.8	)		(0.3	)		3.7			18.3			12.8			21.7
Interest expense, net		—			20.2			(9.8	)		2.9			—			13.3
Other non-operating expense		—			—			0.9			—			0.8			1.7

(Loss) earnings from operations before taxes		(12.8	)		(20.5	)		12.6			15.4			12.0			6.7
Income tax expense		—			—			7.5			5.5			—			13.0

Consolidated net (loss) income		(12.8	)		(20.5	)		5.1			9.9			12.0			(6.3	)
Less: Net income attributable to noncontrolling interest		—			—			—			6.5			—			6.5

Net loss (income) attributable to Hayes Lemmerz International, Inc		(12.8	)		(20.5	)		5.1			3.4			12.0			(12.8	)

CONDENSED CONSOLIDATING BALANCE SHEETS
As of ~~October 31, 2008~~April 30, 2009
(Unaudited)


							Guarantor			Nonguarantor															Guarantor			Nonguarantor
	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Total			Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Total
							(Dollars in millions)												(Dollars in millions)
Current Assets:
Cash and cash equivalents	$	—		$	15.8		$	11.7		$	29.6		$	—		$	57.1		$	—		$	5.8		$	28.1		$	22.8		$	—		$	56.7
Receivables, net		—			—			116.8			108.2			—			225.0			—			—			71.9			64.9			—			136.8
Other receivables		—			—			39.4			39.4			(39.4	)		39.4			—			—			28.9			28.9			(28.9	)		28.9
Inventories		—			—			128.7			65.9			—			194.6			—			—			98.3			53.5			—			151.8
Assets held for sale .		—			—			31.2			—			—			31.2
Assets held for sale																				—			—			8.6			—			—			8.6
Prepaid expenses and other current assets		—			—			5.3			4.6			(0.8	)		9.1			—			—			8.4			3.9			(0.8	)		11.5

Total current assets		—			15.8			333.1			247.7			(40.2	)		556.4			—			5.8			244.2			174.0			(29.7	)		394.3
Property, plant, and equipment, net		—			—			323.4			211.7			—			535.1			—			—			290.4			206.1			(0.1	)		496.4
Goodwill and other assets, net		98.3			715.2			45.1			299.6			(759.8	)		398.4
Intangible and other assets, net																				(343.0	)		716.7			530.1			47.4			(817.8	)		133.4

Total assets	$	98.3		$	731.0		$	701.6		$	759.0		$	(800.0	)	$	1,489.9		$	(343.0	)	$	722.5		$	1,064.7		$	427.5		$	(847.6	)	$	1,024.1


Current Liabilities:
Bank borrowings and other notes	$	—		$	—		$	36.7		$	9.7		$	—		$	46.4		$	—		$	—		$	17.8		$	16.7		$	—		$	34.5
Current portion of long-term debt		—			3.4			0.1			0.7						4.2			—			509.4			125.2			0.7			—			635.3
Liabilities held for sale		—			—			8.3			—			—			8.3
Accounts payable and other accrued liabilities		—			9.3			239.9			180.8			(39.4	)		390.6			—			10.7			172.5			82.6			(26.3	)		239.5

Total current liabilities		—			12.7			285.0			191.2			(39.4	)		449.5			—			520.1			315.5			100.0			(26.3	)		909.3
Long-term debt, net of current portion		—			501.5			16.5			1.1			—			519.1			—			—			0.8			0.8			—			1.6
Pension and other long-term liabilities		—			—			267.9			92.7			(4.4	)		356.2			—			—			324.5			73.6			(4.4	)		393.7
Minority interest		—			—			11.4			56.3			(1.0	)		66.7
Parent loans		—			425.8			(526.7	)		120.8			(19.9	)		—			—			5.5			(134.2	)		151.4			(22.7	)		—

Total liabilities																				—			525.6			506.6			325.8			(53.4	)		1,304.6

Stockholders’ Deficit:
Common stock		1.0			—			—			—			—			1.0			1.0			—			—			—			—			1.0
Additional paid-in capital		885.8			(54.3	)		1,125.2			330.5			(1,401.4	)		885.8			887.7			399.9			1,127.6			327.7			(1,855.2	)		887.7
Retained earnings (accumulated deficit)		(1,000.6	)		(213.5	)		(555.9	)		(124.4	)		893.9			(1,000.5	)		(1,360.7	)		(255.3	)		(622.5	)		(373.2	)		1,251.0			(1,360.7	)
Accumulated other comprehensive income (loss)		212.1			58.8			78.2			90.8			(227.8	)		212.1			129.0			52.3			41.3			95.4			(189.0	)		129.0

Total stockholders’ equity		98.3			(209.0	)		647.5			296.9			(735.3	)		98.4
Total Hayes lemmerz International, Inc. stockholders’ (deficit) equity																				(343.0	)		196.9			546.4			49.9			(793.2	)		(343.0	)
Noncontrolling interest																				—			—			11.7			51.8			(1.0	)		62.5

Total liabilities and stockholders’ equity	$	98.3		$	731.0		$	701.6		$	759.0		$	(800.0	)	$	1,489.9
Total stockholders’ (deficit) equity																				(343.0	)		196.9			558.1			101.7			(794.2	)		(280.5	)

Total liabilities and stockholders’ (deficit) equity																			$	(343.0	)	$	722.5		$	1,064.7		$	427.5		$	(847.6	)	$	1,024.1

CONDENSED CONSOLIDATING BALANCE SHEETS
As of January 31, ~~2008~~2009


							Guarantor			Nonguarantor															Guarantor			Nonguarantor
	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Total			Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Total
							(Dollars in millions)												(Dollars in millions)
Current Assets:
Cash and cash equivalents	$	—		$	84.7		$	30.3		$	45.2		$	—		$	160.2		$	—		$	5.8		$	61.2		$	40.5		$	—		$	107.5
Receivables, net		—			—			151.1			154.5			—			305.6			—			—			84.6			72.7			—			157.3
Other receivables		—			—			48.3			48.3			(48.3	)		48.3			—			—			15.4			15.4			(15.4	)		15.4
Inventories		—			—			111.3			67.8			—			179.1			—			—			100.5			56.4			—			156.9
Assets held for sale		—			—			21.4			—			—			21.4			—			—			8.1			—			—			8.1
Prepaid expenses and other current assets		—			—			7.0			5.3	��		(0.1	)		12.2			—			—			7.4			4.3			(0.8	)		10.9


Total current assets		—			84.7			369.4			321.1			(48.4	)		726.8			—			5.8			277.2			189.3			(16.2	)		456.1
Property, plant, and equipment, net		—			—			376.5			240.4			(0.1	)		616.8			—			—			293.1			206.2			(0.1	)		499.2
Goodwill and other assets, net		202.3			811.0			112.6			346.3			(1,009.9	)		462.3
Intangible and other assets, net																				(292.9	)		702.7			496.2			48.4			(813.5	)		140.9

Total assets	$	202.3		$	895.7		$	858.5		$	907.8		$	(1,058.4	)	$	1,805.9		$	(292.9	)	$	708.5		$	1,066.5		$	443.9		$	(829.8	)	$	1,096.2


Current Liabilities:
Bank borrowings and other notes	$	—		$	—		$	29.6		$	3.3		$	—		$	32.9		$	—		$	—		$	25.3		$	21.3		$	—		$	46.6
Current portion of long-term debt		—			3.8			—			1.0			—			4.8			—			496.1			125.2			0.8			—			622.1
Liabilities held for sale		—			—			8.2			—			—			8.2			—			—			—			—			—			—
Accounts payable and other accrued liabilities		—			6.2			288.5			263.7			(48.4	)		510.0			—			6.6			166.3			92.4			(12.8	)		252.5


Total current liabilities		—			10.0			326.3			268.0			(48.4	)		555.9			—			502.7			316.8			114.5			(12.8	)		921.2
Long-term debt, net of current portion		—			569.9			0.6			1.7			—			572.2			—			—			0.6			0.8			—			1.4
Pension and other long-term liabilities		—			—			287.8			117.2			—			405.0			—			—			331.4			73.6			(4.3	)		400.7
Minority interest		—			—			11.2			60.5			(1.2	)		70.5
Parent loans		—			487.9			(543.3	)		78.1			(22.7	)		—			—			(3.2	)		(50.4	)		143.4			(89.8	)		—

Total liabilities																				—			499.5			598.4			332.3			(106.9	)		1,323.3

Stockholders’ Deficit:
Common stock		1.0			—			—			—			—			1.0			1.0			—			—			—			—			1.0
Additional paid-in capital		882.0			(54.3	)		1,249.4			304.5			(1,499.6	)		882.0			887.1			399.9			1,077.8			334.9			(1,812.6	)		887.1
Retained earnings (accumulated deficit)		(928.7	)		(149.2	)		(590.4	)		(101.5	)		841.1			(928.7	)		(1,302.1	)		(237.8	)		(590.7	)		(364.0	)		1,192.5			(1,302.1	)
Accumulated other comprehensive income (loss)		248.0			31.4			116.9			179.3			(327.6	)		248.0			121.1			46.9			(30.6	)		85.5			(101.8	)		121.1

Total stockholders’ equity		202.3			(172.1	)		775.9			382.3			(986.1	)		202.3
Total Hayes lemmerz International, Inc. stockholders’ (deficit)��equity																				(292.9	)		209.0			456.5			56.4			(721.9	)		(292.9	)
Noncontrolling interest																				—			—			11.6			55.2			(1.0	)		65.8

Total liabilities and stockholder’s equity	$	202.3		$	895.7		$	858.5		$	907.8		$	(1,058.4	)	$	1,805.9
Total stockholders’ (deficit) equity																				(292.9	)		209.0			468.1			111.6			(722.9	)		(227.1	)

Total liabilities and stockholder’s (deficit) equity																			$	(292.9	)	$	708.5		$	1,066.5		$	443.9		$	(829.8	)	$	1,096.2

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the ~~Nine~~Three Months Ended ~~October 31, 2008~~April 30, 2009
(Unaudited)


							Guarantor			Nonguarantor															Guarantor			Nonguarantor
	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Total			Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Total
							(Dollars in millions)												(Dollars in millions)
Cash flows (used for) provided by operating activities	$	(0.1	)	$	(59.2	)	$	26.6		$	12.2		$	(0.6	)	$	(21.1	)
Cash flows used for operating activities																			$	—		$	(8.9	)	$	(14.8	)	$	(9.4	)	$	—		$	(33.1	)

Cash flows from investing activities:
Purchase of property, plant, equipment, and tooling		—			—			(25.0	)		(42.1	)		—			(67.1	)		—			—			(1.0	)		(1.5	)		—			(2.5	)
Investments in subsidiaries		0.1			(0.5	)		(29.6	)		75.6			(45.6	)		—			(0.6	)		(0.2	)		4.2			(1.6	)		(1.8	)		—
Sale of assets		—			—			0.8			(27.4	)		3.2			(23.4	)
Proceeds from sale of assets																				—			—			0.2			—			—			0.2

Cash provided by (used for) investing activities		0.1			(0.5	)		(53.8	)		6.1			(42.4	)		(90.5	)		(0.6	)		(0.2	)		3.4			(3.1	)		(1.8	)		(2.3	)

Cash flows from financing activities:
Changes in bank borrowings and credit facilities		—			—			12.4			8.4			—			20.8			—			—			(8.2	)		(4.0	)		—			(12.2	)
Proceeds from revolving credit facility		—			—			16.0			—			—			16.0
Proceeds from long term debt																				—			—			0.2			—			—			0.2
Repayment of long-term debt		—			(2.0	)		—			(0.6	)		—			(2.6	)		—			—			—			(0.1	)					(0.1	)
Dividends paid to minority shareholders		—			—			—			(12.9	)		—			(12.9	)		—			—			—			(3.7	)		—			(3.7	)
Proceeds from parent investments		—			—			39.4			(82.8	)		43.4			—			0.6			—			(0.6	)		—			—			—

Cash (used for) provided by financing activities		—			(2.0	)		67.8			(87.9	)		43.4			21.3			0.6			—			(8.6	)		(7.8	)		—			(15.8	)

(Decrease) increase in parent loans and advances		—			(6.1	)		(56.6	)		63.1			(0.4	)		—			—			8.3			(12.7	)		2.6			1.8			—
Cash flows from discontinued operations		—			—			(1.1	)		—			—			(1.1	)		—			—			(0.7	)		—			—			(0.7	)
Effect of exchange rates on cash and cash equivalents		—			(1.1	)		(1.5	)		(9.1	)		—			(11.7	)		—			0.8			0.3						—			1.1

(Decrease) increase in cash and cash equivalents		—			(68.9	)		(18.6	)		(15.6	)		—			(103.1	)		—			—			(33.1	)		(17.7	)		—			(50.8	)
Cash and cash equivalents at beginning of period		—			84.7			30.3			45.2			—			160.2			—			5.8			61.2			40.5			—			107.5

Cash and cash equivalents at end of period	$	—		$	15.8		$	11.7		$	29.6		$	—		$	57.1		$	—		$	5.8		$	28.1		$	22.8		$	—		$	56.7

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the ~~Nine~~Three Months Ended ~~October 31, 2007~~April 30, 2008
(Unaudited)


							Guarantor			Nonguarantor														Guarantor			Nonguarantor
	Parent			Issuer			Subsidiaries			Subsidiaries			Eliminations			Total			Parent		Issuer			Subsidiaries			Subsidiaries			Eliminations			Total
							(Dollars in millions)												(Dollars in millions)
Cash flows (used for) provided by operating activities	$	(0.1	)	$	(10.3	)	$	(1.9	)	$	67.8		$	(18.1	)	$	37.4
Cash flows used for operating activities																			$	—	$	(14.8	)	$	(9.3	)	$	(6.9	)	$	(0.8	)	$	(31.8	)

Cash flows from investing activities:
Purchase of property, plant, equipment, and tooling		—			—			(29.6	)		(34.5	)		—			(64.1	)		—		—			(7.4	)		(11.8	)		—			(19.2	)
Investments in subsidiaries		—			(429.0	)		745.6			(188.6	)		(128.0	)		—			—		(0.6	)		(29.3	)		(35.4	)		65.3			—
Sale of assets		—			—			1.3			0.2			—			1.5
Proceeds from sale of assets																				—		—			0.3			0.2			—			0.5

Cash (used for) provided by investing activities		—			(429.0	)		717.3			(222.9	)		(128.0	)		(62.6	)		—		(0.6	)		(36.4	)		(47.0	)		65.3			(18.7	)

Cash flows from financing activities:
Changes in bank borrowings and credit facilities		—			—			(0.6	)		1.5			—			0.9			—		—			—			2.1			—			2.1
Bank finance fees paid		—			(9.2	)		(5.6	)		—			—			(14.8	)
Borrowing (Repayment) of long-term debt		—			525.7			(661.2	)		(0.8	)		—			(136.3	)
Repayment of long-term debt																				—		—			—			(0.1	)		—			(0.1	)
Dividends paid to minority shareholders		—			—			—			(10.1	)					(10.1	)		—		—			—			(7.3	)		—			(7.3	)
Proceeds from issuance of common stock		193.1			—			—			—			—			193.1
Proceeds from parent investments		—			—			442.8			(392.2	)		(50.6	)		—			—		—			38.7			27.8			(66.5	)		—
Call premium on Senior Notes		—			—			(9.0	)		—			—			(9.0	)
Fees paid for Rights Offering		—			—			(7.7	)		—			—			(7.7	)

Cash provided by (used for) financing activities		193.1			516.5			(241.3	)		(401.6	)		(50.6	)		16.1			—		—			38.7			22.5			(66.5	)		(5.3	)

(Decrease) increase in parent loans and advances		(193.0	)		(52.9	)		(441.0	)		490.2			196.7			—			—		(25.9	)		(5.4	)		29.3			2.0			—
Cash flows from discontinued operations		—			—			(21.3	)		66.4			—			45.1
Effect of exchange rates on cash and cash equivalents		—			—			0.9			3.2			—			4.1			—		2.3			0.6			(0.5	)		—			2.4

Increase in cash and cash equivalents		—			24.3			12.7			3.1			—			40.1
Decrease in cash and cash equivalents																				—		(39.0	)		(11.8	)		(2.6	)		—			(53.4	)
Cash and cash equivalents at beginning of period		—			—			8.7			29.8			—			38.5			—		84.7			30.3			45.2			—			160.2

Cash and cash equivalents at end of period	$	—		$	24.3		$	21.4		$	32.9		$	—		$	78.6		$	—	$	45.7		$	18.5		$	42.6		$	—		$	106.8

Note 16. Subsequent Events

On May 11, 2009, the Debtors filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code. On May 12, 2009 and May 19, 2009 we, HLI Opco and Hayes Luxembourg, entered into amendments to the Credit Agreement to provide up to $100 million in New Money DIP Loans and $100 million in Roll-up Loans, respectively. The Bankruptcy Court granted final approval of the DIP Credit Agreement on June 15, 2009. With the exception of Hayes Luxembourg, the Company’s subsidiaries and operations outside the United States were not included in the filing are not debtors in the Chapter 11 cases or any other proceeding outside the United States, and are expected to continue to operate in the ordinary course of business outside and unaffected by the Chapter 11 cases process.

We cannot provide any assurance as to what values, if any, will be ascribed in our bankruptcy proceedings to our various pre-petition liabilities, common stock, and other securities. On June 8, 2009, our common stock was delisted from the NASDAQ Global Market following our filings under Chapter 11. We believe that our currently outstanding common stock will have no value and will be cancelled under any plan of reorganization we may propose under Chapter 11. We also believe that the holders of our Senior Notes are unlikely to receive more than a de minimis distribution on account of their interests in the Senior Notes and that such interests could be cancelled under any plan of reorganization the Company may propose under Chapter 11. There can, however, be no assurance, however, that the Company will be able to develop, propose, and implement a successful plan of reorganization.

On June 8 2009 we were delisted from the NASDAQ Stock Market following the filing of our Chapter 11 proceeding. We believe that our currently outstanding common stock will have no value and will be cancelled under any plan of reorganization we may propose under Chapter 11.

In May 2009 our interest rate swap agreements were terminated due to our bankruptcy filing on May 11, 2009.

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

Executive Summary and Chapter 11 Matters

This discussion should be read in conjunction with the our Annual Report on Form 10-K for the fiscal year ended January 31, ~~2008~~2009 as filed with the Securities and Exchange Commission on ~~April 10, 2008,~~May 11, 2009, and the other information included herein.

~~Company Overview~~

Unless otherwise indicated, references to “we,” “us,” or “our” mean Hayes Lemmerz International, Inc., a Delaware corporation, and its subsidiaries. References to a fiscal year means the 12-month period commencing on February 1 of that year and ending on January 31 of the following year (i.e., “fiscal 2009” refers to the period beginning February 1, 2009 and ending January 31, 2010, “fiscal 2008” refers to the period beginning February 1, 2008 and ending January 31, ~~2009, “fiscal 2007” refers to the period beginning February 1, 2007 and ending January 31, 2008)~~2009).

Company Overview

Originally founded in 1908, we are a leading worldwide producer of aluminum and steel wheels for passenger cars and light trucks and of steel wheels for commercial trucks and trailers. We are also a supplier of automotive powertrain components. We have global operations with 23 facilities, including business and sales offices and manufacturing facilities located in 1312 countries around the world. We sell our products to every major North American, Japanese, and European manufacturer of passenger cars and light trucks and to commercial highway vehicle customers throughout the world.

Sales of our wheels and powertrain components produced in North America are directly affected by the overall level of passenger car, light truck, and commercial highway vehicle production of North American OEMs, while sales of our wheels in Europe are directly affected by the overall vehicle production in Europe. The North American and European automotive industries are sensitive to the overall strength of their respective economies.

We are organized based primarily on markets served and products produced. Under this organizational structure, our operating segments have been aggregated into two reportable segments: Automotive Wheels and Other. The Automotive Wheels segment includes results from our operations that primarily design and manufacture fabricated steel and cast aluminum wheels for original equipment manufacturers in the global passenger car, light vehicle, and commercial vehicle markets. The Other segment includes results from our operations that primarily design and manufacture powertrain components for passenger car and light vehicle markets as well as financial results related to the corporate office and the elimination of certain intercompany activities.

In the first ~~nine~~three months of fiscal 2009 we had net sales of $258.2 million with approximately 74% derived from international markets. In the three months of fiscal 2008 we had net sales of ~~$1.6 billion~~$573.8 million with approximately ~~83% derived from international markets. In the nine months of fiscal 2007 we had net sales of $1.6 billion with approximately 77%~~84% derived from international markets. We had loss from operations of $41.0 million for the first three months of fiscal 2009 compared to earnings from operations of ~~$32.0~~$21.7 million for the first ~~nine~~three months of fiscal ~~2008 compared~~2008.

Chapter 11 Bankruptcy Filings

On May 11, 2009, we and certain of our subsidiaries (together with us, Debtors) filed voluntary petitions for reorganization under Chapter 11 of Title 11 of the United States Code (Bankruptcy Code) in the United States Bankruptcy Court for the District of Delaware (Bankruptcy Court). The cases are being jointly administered under Case No. 09-11655 (MFW). With the exception of Hayes Lemmerz Finance LLC—Luxembourg S.C.A. (Hayes Luxembourg), the Company’s subsidiaries and operations outside the United States were not included in the filing, are not debtors in the Chapter 11 cases or any other proceeding outside the United States, and are expected to continue to operate in the ordinary course of business outside and unaffected by the Chapter 11 cases and process.

We cannot provide any assurance as to what values, if any, will be ascribed in our bankruptcy proceedings to our various pre-petition liabilities, common stock, and other securities. We believe that our currently outstanding common stock will have no value and will be canceled under any plan of reorganization we may propose under Chapter 11. We also believe that the holders of our Senior Notes are unlikely to receive more than a de minimis distribution on account of their interests in the Senior Notes and that such interests could be cancelled under any plan of reorganization the Company may propose under Chapter 11. There can, however, be no assurance, that the Company will be able to develop, propose, and implement a successful plan of reorganization. Accordingly, caution should be exercised with respect to existing and future investments in any of these liabilities or securities. Trading of our common stock on the NASDAQ Stock Market was suspended on May 21, 2009, and our common stock was delisted from the NASDAQ Stock Market on June 8, 2009.

The following discussion provides general background information regarding our Chapter 11 proceedings and is not intended to be an exhaustive summary. Additional information about our bankruptcy filings may be obtained at our web site, www.hayeslemmerzreorg.com, and Bankruptcy Court filings and claims information can also be accessed through this web site. Information contained on our web sites is not incorporated into this Quarterly Report on Form 10-Q.

Chapter 11 Process

The Debtors are currently operating as “debtors in possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. In general, as debtors in possession, we are authorized under Chapter 11 to continue to operate as an ongoing business, but we may not engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court.

The Bankruptcy Court has approved payment of certain of the Debtors’ pre-petition obligations, including, among other things, employee wages, salaries, and benefits, and the Bankruptcy Court has approved the Company’s payment of vendors and other providers in the ordinary course for goods and services received from and after the Petition Date and other business-related payments necessary to maintain the operation of our businesses. The Debtors have retained, subject to Bankruptcy Court approval, legal and financial professionals and certain other “ordinary course” professionals to advise the Debtors on the bankruptcy proceedings. From time to time, the Debtors may seek Bankruptcy Court approval for the retention of additional professionals.

Shortly after the Petition Date, the Debtors began notifying all known current or potential creditors of the Chapter 11 filing. Subject to certain exceptions under the Bankruptcy Code, the Debtors’ Chapter 11 filing automatically enjoined, or stayed, the continuation of any judicial or administrative proceedings or other actions against the Debtors or their property to recover on, collect, or secure a claim arising prior to the Petition Date. Thus, for example, most creditor actions to obtain possession of property from the Debtors, or to create, perfect, or enforce any lien against the property of the Debtors, or to collect on monies owed or otherwise exercise rights or remedies with respect to a ~~loss~~pre-petition claim are enjoined unless and until the Bankruptcy Court lifts the automatic stay. Vendors are being paid for goods furnished and services provided after the Petition Date in the ordinary course of ~~$15.6 million~~business.

As required by the Bankruptcy Code, the United States Trustee for the ~~first nine months~~District of ~~fiscal 2007.~~Delaware appointed an official committee of unsecured creditors (Creditors’ Committee). The Creditors’ Committee and its legal representatives have a right to be heard on all matters that come before the Bankruptcy Court with respect to the Debtors. There can be no assurance that the Creditors’ Committee will support the Debtors’ positions on matters to be presented to the Bankruptcy Court in the future or on any plan of reorganization, once proposed. Disagreements between the Debtors and the Creditors’ Committee could protract the Chapter 11 proceedings, adversely affect the Debtors’ ability to operate, and delay the Debtors’ emergence from the Chapter 11 proceedings.

Under Section 365 and other relevant sections of the Bankruptcy Code, we may assume, assume and assign, or reject certain executory contracts and unexpired leases, including, without limitation, leases of real property and equipment, subject to the approval of the Bankruptcy Court and certain other conditions. Any description of an executory contract or unexpired lease in this report, including when applicable our express termination rights or a quantification of our obligations, must be read in conjunction with, and is qualified by, any overriding rejection rights we have under Section 365 of the Bankruptcy Code.

In order to successfully exit the Chapter 11 proceedings, the Debtors will need to propose, and obtain confirmation by the Bankruptcy Court of a plan of reorganization that satisfies the requirements of the Bankruptcy Code. A plan of reorganization would, among other things, resolve the Debtors’ pre-petition obligations, set forth the revised capital structure of the newly reorganized entity, and provide for corporate governance subsequent to exit from bankruptcy.

The Debtors have the exclusive right for 120 days after the Petition Date to file a plan of reorganization and, if we do so, 60 additional days to obtain necessary acceptances of our plan. We may file one or more motions to request extensions of these periods. If the Debtors’ exclusivity period lapses, any party in interest will be able to file a plan of reorganization for any of the Debtors. In addition to being voted on by holders of impaired claims and equity interests, a plan of reorganization must satisfy certain requirements of the Bankruptcy Code and must be approved, or confirmed, by the Bankruptcy Court in order to become effective.

The timing of filing a plan of reorganization by us will depend on the timing and outcome of numerous other ongoing matters in the Chapter 11 proceedings. There can be no assurance at this time that a plan of reorganization will be confirmed by the Bankruptcy Court or that any such plan will be implemented successfully. If we are unable to successfully recapitalize the Company and restructure our indebtedness under Chapter 11, we may be forced to liquidate the Company.

We have incurred and will continue to incur significant costs associated with our reorganization. The amount of these costs, which are being expensed as incurred, are expected to significantly affect our results of operations.

Under the priority scheme established by the Bankruptcy Code, unless creditors agree otherwise, pre-petition liabilities and post-petition liabilities must be satisfied in full before our stockholders are entitled to receive any distribution or retain any property under a plan of reorganization. The ultimate recovery to creditors and stockholders, if any, will not be determined until confirmation of a plan or plans of reorganization. No assurance can be given as to what values, if any, will be ascribed in the Chapter 11 cases to each of these constituencies or what types or amounts of distributions, if any, they would receive. We believe that our currently outstanding common stock will have no value and will be cancelled under any plan of reorganization we may propose under Chapter 11. We also believe that the holders of our Senior Notes are unlikely to receive more than a de minimis distribution on account of their interests in the Senior Notes and that such interests could be cancelled under any plan of reorganization the Company may propose. Because of such possibilities, the value of our liabilities and securities, including our common stock, is highly speculative. Appropriate caution should be exercised with respect to existing and future investments in any of the liabilities and securities of the Debtors. At this time there is no assurance we will be able to restructure as a going concern or successfully propose or implement a plan of reorganization.

Chapter 11 Financing

In connection with the Chapter 11 filing, the Company, HLI Operating Company, Inc., (HLI Opco) and Hayes Luxembourg, the Lenders party thereto, Deutsche Bank AG New York Branch, as DIP Administrative Agent, Deutsche Bank Securities Inc. and General Electric Capital Corporation, as Joint Book-Running Lead Managers, Joint Lead Arrangers, and Joint Syndication Agents for the DIP Facilities, and Deutsche Bank Securities Inc., as Documentation Agent for the DIP Facilities, entered into Amendment No. 2, dated as of May 12, 2009, and Amendment No. 3, dated as of May 19, 2009, to the Company’s Second Amended and Restated Credit Agreement, dated as of May 30, 2007, as amended by Amendment No. 1, dated as of January 30, 2009, with the lenders party thereto (Credit Agreement). Pursuant to the amended Credit Agreement (DIP Credit Agreement) debtor-in-possession loan tranches (DIP Loans) were added to the Credit Agreement, including up to $100 million of additional liquidity to provide operating funds to the Company and its subsidiaries during the restructuring.

The initial DIP Loans consisted of a committed senior secured debtor-in-possession new money term loan facility (New Money DIP Loans) in an aggregate principal amount of up to $100 million and a senior secured debtor-in-possession roll-up loan facility (Roll-up Loans) in an aggregate principal amount of up to $100 million. The Roll-up Loans will be issued to the pre-petition lenders under the Credit Agreement who make New Money DIP Loans in exchange for the pre-petition loans such lenders hold under the Credit Agreement; the Roll-up Loans will be deemed issued to the lenders upon the occurrence of a triggering event in the future. The DIP Loans benefit from a super-priority claim and lien on the assets of the Borrowers pursuant to a Bankruptcy Court order. On May 14, 2009, the Bankruptcy Court approved an interim order (Interim DIP Order) that authorized the borrowing of up to $30 million of New Money DIP Loans, which was borrowed on May 14, 2009.

On May 14, 2009, the Honorable Judge Mary F. Walrath of the Bankruptcy Court approved an interim order that authorized the borrowing of up to $30 million of New Money DIP Loans. On June 15, 2009, the Bankruptcy Court granted final approval of the DIP Credit Agreement. As a result, an additional $70 million of New Money DIP Loans has become available to the Borrowers.

The proceeds of the New Money DIP Loans incurred under the DIP Credit Agreement will be used (i) to pay costs, fees, and expenses related to the execution and delivery of the DIP Credit Agreement, (ii) to repay certain of the pre-petition loans (through the exchange of Roll-up Loans), (iii) to provide working capital from time to time for the Debtors and the Company’s non-U.S. subsidiaries, (iv) for other general corporate purposes of the Debtors and the Company’s non-U.S. subsidiaries, and (v) to pay administrative costs of the Chapter 11 cases and claims or amounts approved by the Bankruptcy Court. The proceeds of the DIP Loan are deposited in depositary accounts and can be withdrawn no more than twice per week and then only to the extent needed to pay permitted expenses payable in the five business days following each withdrawal in accordance with approved budgets.

The New Money DIP Loans will bear cash interest at the rate of LIBOR (with a floor of 6.00% per annum), plus 14% per annum, and interest paid-in-kind (PIK Interest) at a rate of 6.00% per annum. After the Roll-up Loans are deemed to be borrowed, borrowings under the New Money DIP Loans and Roll-up Loans will bear cash interest at the rate of LIBOR (with a floor of 3.00% per annum), plus 7% per annum, plus PIK Interest of 3.00% per annum. During the continuance of an event of default under the DIP Credit Agreement, borrowings will bear interest at an additional 2.00% per annum. In addition, the DIP Credit Agreement obligates the Debtors to pay certain fees to the agents and lenders thereunder.

Obligations under the DIP Credit Agreement are secured by a lien on substantially all of the assets of the Debtors (which lien will have a first priority with respect to substantially all of the Debtors’ assets) and a super-priority administrative expense claim in each of the Chapter 11 cases. The obligations under the DIP Credit Agreement are guaranteed by the Company and its domestic subsidiaries pursuant to a Guaranty, dated as of May 12, 2009. Subject to local law and other impediments, certain of the Company’s foreign subsidiaries are required to take commercially reasonable actions to guarantee the obligations under the DIP Credit Agreement and grant liens on their assets in support of those guarantees.

The maturity date of the obligations under the DIP Credit Agreement will be the earliest of: (i) six months following the date on which the Bankruptcy Court grants interim approval of the DIP Credit Agreement (which may be extended by up to three months by a majority of the DIP lenders); (ii) the effective date of a plan of reorganization for any Debtor; (iii) forty days after the date on which the Bankruptcy Court granted interim approval of the DIP Credit Agreement, if the Bankruptcy Court has not granted final approval of the DIP Credit Agreement; and (iv) the acceleration of obligations under the DIP Credit Agreement or termination of the new money term loan commitments under the DIP Credit Agreement, including, without limitation, as a result of the occurrence of an event of default.

Results of Operations

Consolidated Results — Comparison of the Three Months Ended ~~October 31, 2008~~April 30, 2009 to the Three Months Ended ~~October 31, 2007~~April 30, 2008

The following table presents selected information about our consolidated results of operations for the periods indicated (dollars in millions):

contemplated by a purchase and sale agreement and we have commenced litigation seeking specific performance of the agreement and damages, which is currently subject to the automatic stay in our Chapter 11 proceeding. The remainder of the current quarter expense is related to continuing closure costs at our Huntington, Indiana and Ferndale, Michigan technical center facilities.

During the first quarter of fiscal 2008, we recorded facility closure, employee restructuring charges, and asset impairments of $3.3 million. Facility closure costs of $0.3 million were related to our idle facilities in Howell, Michigan and Huntington, Indiana. Asset impairments of $2.7 million were related to our aluminum wheel facilities in ~~Gainesville, Georgia;~~Howell, Michigan; Hoboken, ~~Belgium; and Chihuahua, Mexico. We announced the closure of our Gainesville facility in May 2008, and expect the facility to be closed by the end of fiscal 2008. The Hoboken facility~~Belgium, which was sold during the second quarter of fiscal ~~2008.~~2008; and Chihuahua, Mexico. Severance and other restructuring costs of $0.1 million were related to our aluminum wheel facility in Dello, Italy. Expense of $0.2 million in the Other segment consists of $0.1 million for facility closure cost and severance of $0.1 million for our Ferndale, Michigan technical center, which was closed in fiscal 2007.

Other income, net

Other income, net decreased from the prior year by $2.4 million from $3.4 million during the first quarter of fiscal 2008 to $1.0 million during the first quarter of fiscal 2009. The decrease in income is primarily attributable to realized foreign currency exchange losses. The items recorded to other income includes license and royalty income, gains or losses on tooling sales, realized exchange gains or losses, export incentives, and other miscellaneous items that are not considered part of cost of goods sold. None of these items individually or in the aggregate were considered material.

Interest expense, net

Interest expense ~~decreased $1.7~~increased $8.7 million to ~~$12.2~~$22.0 million for the ~~third~~first quarter of fiscal ~~2008~~2009 from ~~$13.9~~$13.3 million for the ~~third~~first quarter of fiscal ~~2007. The decrease was driven by~~2008. Due to the ~~restructuring~~violation of our debt ~~during~~covenants as of April 30, 2009, we expensed the ~~second~~remainder of our unamortized debt costs of approximately $9 million to interest expense for the quarter ended April 30, 2009. Partially offsetting the unamortized debt expense was $3.5 million of interest income due to the mark-to-market and fair value adjustments recorded for our interest rate swaps. The remainder of the variance is due to higher interest expense due to the January 30, 2009 credit amendment.

Other non-operating (income) expense

During the first quarter of fiscal ~~2007, which resulted~~2009 we recognized $2.3 million of other non-operating income as compared to $1.7 million of expense in ~~lower debt levels and interest rates on~~the prior year. The expense for the first quarter of fiscal 2009 includes a $1.3 million decrease in the liability recognized for a put option agreement with the minority shareholders at our Kalyani, India joint venture, as compared to an increase in the liability of $1.6 million in the previous year. The remainder of the (income) expense in both ~~fixed and variable rate debt.~~years is related to realized foreign currency exchange (gains) losses.

Income ~~taxes~~tax (benefit) expense

Income tax ~~expense~~benefit was ~~$12.5~~$1.6 million for the ~~third~~first quarter of fiscal ~~2008~~2009 compared to ~~$16.7~~expense of $13.0 million for the ~~third~~first quarter of fiscal ~~2007.~~2008. The ~~decrease was~~tax benefit in the current quarter primarily ~~due~~relates to ~~lower profitability~~international tax losses generated, which we expect to utilize in ~~jurisdictions where we pay taxes, without an offsetting~~the future, partially offset by withholding tax ~~benefit.~~expense in the US. The tax expense recorded in the prior year quarter relates to taxable income. The income tax rate varies from the United States statutory income tax rate of 35% due primarily to losses in the United States ~~and certain foreign jurisdictions~~ without recognition of a corresponding income tax benefit, as well as effective income tax rates in certain foreign jurisdictions that are different than the United States statutory rates. Accordingly, our worldwide tax expense may not bear a normal relationship to earnings before taxes on income.

~~Discontinued operations~~

The loss from discontinued operations for the three months ended October 31, 2008 is related to subsequent loss adjustments recorded on the sale of our MGG Group B.V. business (MGG Group), which was sold in June 2007. The MGG Group had aluminum casting and machining facilities located in Tegelen and Nieuw Bergen, the Netherlands and in Antwerp, Belgium, and represented our International Components business. During the third quarter of fiscal 2008, we settled certain disputes arising out of the share purchase agreement with MGG Group resulting in a loss of $2.4 million.

Net loss

Due to the factors mentioned above, the net loss during the ~~third~~first quarter of fiscal ~~2008~~2009 was ~~$10.4~~$58.5 million compared to ~~$62.7~~$12.8 million in the ~~third~~first quarter of fiscal ~~2007.~~2008.

~~Earnings (loss)~~(Loss) earnings from operations

We recorded ~~earnings~~a loss from operations of ~~$14.4~~$30.2 million for the quarter ended ~~October 31, 2008~~April 30, 2009 as compared to ~~a loss~~earnings of ~~$21.8~~$16.8 million during the same period of time in the prior year. ~~The $36.2~~Gross profit was $62.9 million ~~improvement~~lower, primarily due to the decrease in volumes as well as mix. Employee costs were approximately $3 million lower during the first quarter of 2009 as compared to the prior year due to reductions in personnel in order to align headcount with the lower production volumes. Fluctuations in foreign currency exchange rates improved earnings from operations by approximately $3 million. Changes in expenses allocated from the corporate offices decreased expenses by $3 million. The remainder of the variance is primarily due to ~~lower impairment and restructuring~~decreased controllable expenses as a result of ~~$46.4 million, partially offset by the impact of foreign currency exchange fluctuations as well as higher utility costs. Higher utility costs were more than offset by manufacturing efficiencies.~~cost savings initiatives.

Other

The following table presents net sales, total asset impairments and other restructuring charges, and (loss) earnings ~~(loss)~~ from operations for the Other segment for the periods indicated (dollars in millions):


	Three Months Ended October 31,								Three Months Ended April 30,
	2008		2007			$ Change			2009			2008		$ Change
Net sales	$	21.4	$	11.6		$	9.8		$	11.1		$	11.8	$	(0.7	)
Total asset impairments and other restructuring charges		0.1		1.0			(0.9	)		0.6			0.2		0.4
Earnings (loss) from operations		6.2		(5.8	)		12.0
(Loss) earnings from operations										(10.8	)		4.9		(15.7	)

~~Consolidated Results — Comparison of the Nine Months Ended October 31, 2008 to the Nine Months Ended October 31, 2007~~

~~The following table presents selected information about our consolidated results of operations for the periods indicated (dollars in millions):~~

Nine Months Ended October 31,
2008 2007 $ Change % Change
Net sales:
Automotive Wheels $ 1,587.7 $ 1,531.3 $ 56.4 3.7 %
Other 46.6 66.3 (19.7 ) (29.7 %)

Total $ 1,634.3 $ 1,597.6 $ 36.7 2.3 %

Gross profit $ 192.2 $ 167.4 $ 24.8 14.8 %
Marketing, general, and administrative 112.8 116.6 (3.8 ) (3.3 %)
Amortization of intangibles 8.3 7.5 0.8 10.7 %
Asset impairments and other restructuring charges 11.8 54.0 (42.2 ) (78.1 %)
Other expense, net 27.3 4.9 22.4 457.1 %

Earnings (loss) from operations 32.0 (15.6 ) 47.6 305.1 %
Interest expense, net 39.8 47.8 (8.0 ) (16.7 %)
Loss on early extinguishment of debt — 21.5 (21.5 ) (100.0 %)
Other non-operating expense (income) 2.8 (1.4 ) 4.2 300.0 %
Income tax expense 40.1 38.5 1.6 4.2 %
Minority interest 17.2 15.4 1.8 11.7 %

Loss from continuing operations (67.9 ) (137.4 ) 69.5 50.6 %
Loss from discontinued operations, net of tax (2.3 ) (27.7 ) 25.4 91.7 %

Net loss $ (70.2 ) $ (165.1 ) $ 94.9 57.5 %

~~Sales~~

Our net sales increased 2.3% or $36.7 million to $1,634.3 million in the first nine months of fiscal 2008 from $1,597.6 million in the first nine months of fiscal 2007. Favorable foreign currency exchange rates relative to the US Dollar increased sales by $118.1 million due to favorable exchange rates during the first half of fiscal 2008 as compared to the prior year. Lower volumes decreased sales by $67.7 million due to the trends and conditions facing North American and European vehicle manufacturers, which have been negatively impacted due to the global credit crisis, troubled capital markets, volatile commodity prices, and plunging consumer confidence. The impact of lower sales volumes were partially offset by favorable mix of $34.1 million. Sales declined $47.7 million due to lower pricing with our customers and the sale of our Hoboken, Belgium facility in June 2008, which were partially offset by higher metal pass-through pricing.

~~Gross profit~~

Our gross profit increased 14.8% or $24.8 million in the first nine months of fiscal 2008 to $192.2 million from $167.4 million in the first nine months of fiscal 2007. Favorable fluctuations in foreign currency exchange rates increased gross profit by $10.6 million. Lower volumes decreased gross profit by $18.9 million, which was offset by favorable scrap price increases due to higher spot market scrap steel pricing early in the year. The sale of the Hoboken, Belgium facility in June 2008 improved gross profit by $7.3 million. The remainder of the improvement is primarily due to lower depreciation costs and other manufacturing efficiencies as compared to the prior year.

~~Marketing, general, and administrative~~

Our marketing, general, and administrative expense decreased $3.8 million to $112.8 million during the first nine months of fiscal 2008 from $116.6 million in the first nine months of fiscal 2007. The improvement is primarily due to a decrease in audit costs, lower bank fees, and lower employee stock compensation expense, partially offset by unfavorable fluctuations in foreign currencies.

~~Asset impairments and other restructuring charges~~

Impairments and restructuring charges were reduced by $42.2 million as compared to the same period in the prior year. The prior year consisted primarily of asset impairments related to our aluminum wheel facilities in Gainesville, Georgia; Hoboken,

Belgium; Santo Andre, Brazil; and Chihuahua, Mexico. We announced the closure of our Gainesville facility in May 2008, and expect the facility to be closed by the end of fiscal 2008. The Hoboken facility was sold during the second quarter of fiscal 2008.

The current year expense consists primarily of asset impairments related to our aluminum wheel facilities in Gainesville, Georgia; Huntington, Indiana; Howell, Michigan; Hoboken, Belgium; and Chihuahua, Mexico. These facilities were written down to fair value based on current market conditions. The Huntington and Howell facilities are currently being marketed for sale.

~~Other expense, net~~

The increase in other expense is primarily due to the loss recorded for the sale of our Hoboken, Belgium facility, which was sold during the second quarter of fiscal 2008. The prior year balance consisted primarily of the loss on the sale of our Wabash, Indiana facility, which was sold during the second quarter of fiscal 2007.

~~Interest expense, net~~

Interest expense decreased $8.0 million to $39.8 million for the first nine months of fiscal 2008 from $47.8 million for the first nine months of fiscal 2007. The decrease was driven by the restructuring of our debt during the second quarter of fiscal 2007, which resulted in lower debt levels and interest rates on both fixed and variable rate debt.

~~Income taxes~~

Income tax expense was $40.1 million for the first nine months of fiscal 2008 compared to $38.5 million for the first nine months of fiscal 2007. The increase was primarily due to higher profitability in jurisdictions where we pay taxes, without an offsetting tax benefit. The income tax rate varies from the United States statutory income tax rate of 35% due primarily to losses in the United States and certain foreign jurisdictions without recognition of a corresponding income tax benefit, as well as effective income tax rates in certain foreign jurisdictions that are different than the United States statutory rates. Accordingly, our worldwide tax expense may not bear a normal relationship to earnings before taxes on income.

~~Discontinued operations~~

The loss during the first nine months of fiscal 2008 was primarily due to adjustments recorded on the sale of our MGG Group business, which we sold in June 2007. The loss during the first nine months of fiscal 2007 primarily consists of a loss of $26.7 million for MGG Group; a loss of $4.3 million for our Suspension business, which we sold in the first quarter of fiscal ~~2007; and income from our Brakes Business~~2009 of ~~$3.3~~$10.8 million ~~which we sold~~compared to earnings of $4.9 million during the ~~fourth~~first quarter of fiscal ~~2007. During~~2008. Higher professional service fees related to our ongoing restructuring increased expenses during the ~~third~~first quarter of fiscal 2008 ~~we settled certain disputes arising out of the share purchase agreement with MGG Group resulting in a loss of $2.4~~by $8.9 million.

~~Net loss~~

~~Due to the factors mentioned above, net loss during the first nine months of fiscal 2008~~ Royalty and trademark fee income was ~~$70.2 million compared to $165.1 million in the first nine months of fiscal 2007, which is an improvement of $94.9 million.~~

~~Segment Results — Comparison of the Nine Months Ended October 31, 2008 to the Nine Months Ended October 31, 2007~~

~~Automotive Wheels~~

~~The following table presents net sales, earnings from operations, and other information for the Automotive Wheels segment for the periods indicated (dollars in millions):~~

Nine Months Ended October 31,
2008 2007 $ Change
Net sales $ 1,587.7 $ 1,531.3 $ 56.4
Asset impairments and other restructuring charges:
Facility closure costs $ 1.7 $ 2.9 $ (1.2 )
Impairment of facility, machinery, and equipment 7.8 49.4 (41.6 )
Severance and other restructuring costs 1.9 — 1.9

Total asset impairments and other restructuring charges $ 11.4 $ 52.3 $ (40.9 )

Earnings from operations $ 19.0 $ 24.4 $ (5.4 )

~~Net sales~~

Net sales from our Automotive Wheels segment increased $56.4 million to $1,587.7 million in the first nine months of fiscal 2008 from $1,531.3 million during the first nine months of fiscal 2007. Favorable foreign currency exchange rates relative to the US dollar in the first half of fiscal 2008 increased sales by $118.1 million. Lower volumes decreased sales by $74.9 million, which was partially offset by favorable mix of $34.1 million. Our sales were $20.9$3.9 million lower due to the ~~sale of our Hoboken, Belgium facility~~decrease in ~~June 2008 and unfavorable pricing with our customers, partially offset by higher metal pass-through pricing.~~

~~Asset impairments and other restructuring charges~~

~~Impairments and restructuring charges were reduced by $40.9 million as compared~~sales volumes. Changes in expenses allocated to the same period in the prior year. The prior year consisted primarily of asset impairments related to our aluminum wheel facilities in Gainesville, Georgia; Hoboken, Belgium; Santo Andre, Brazil; and Chihuahua, Mexico. We announced the closure of our Gainesville facility in May 2008, and expect the facility to be closed by the end of fiscal 2008. The Hoboken facility was sold during the second quarter of fiscal 2008.

~~Earnings from operations~~

~~Earnings from operations from our~~ Automotive Wheels segment decreased $5.4 million to $19.0 million in the first nine months of fiscal 2008 from $24.4 million in the first nine months of fiscal 2007. The loss on the sale of the Hoboken, Belgium facility reduced earnings from operations in the current yearincreased expenses by $27.7 million, however this was more than offset by reduced impairments as compared to the prior year of $41.5 million. Higher utility costs reduced earnings from operations by $12.3 million. We also experienced favorable mix of $8.1 million and favorable foreign currency exchange fluctuations of $10.6 million. Intercompany royalty and trademark fees decreased earnings from operations by $17.5 million, which is eliminated in the consolidated financial statements. The remainder of the reduction is due to lower volumes and pricing, which was mitigated by lower material costs.

~~Other~~

The following table presents net sales, total asset impairments and other restructuring charges, and earnings (loss) from operations for the Other segment for the periods indicated (dollars in millions):

Nine Months Ended October 31,
2008 2007 $ Change
Net sales $ 46.6 $ 66.3 $ (19.7 )
Total asset impairments and other restructuring charges 0.4 1.7 (1.3 )
Earnings (loss) from operations 13.0 (40.0 ) 53.0

~~Net Sales~~

Net sales decreased by $19.7 million from $66.3 million in the first nine months of fiscal 2007 to $46.6 million in the first nine months of fiscal 2008. We had lower sales of $28.3 million due to the sale of our Wabash, Indiana facility, which we sold in the second quarter of fiscal 2007. This decrease was partially offset by a $7.1 million increase in sales due to a new program in the current year for intake manifold sales for the GMC Acadia, which is produced at our powertrain plant in Nuevo Laredo, Mexico.

~~Asset impairments and other restructuring charges~~

During the first nine months of fiscal 2008, we recorded expense of $0.4 of facility closure costs and severance for our Ferndale, Michigan technical center, which was closed in fiscal 2007. During the first nine months of fiscal 2007, we recorded expense of $1.7 million, which consisted of $0.1 million of facility closure cost and severance expense at our Ferndale, Michigan technical center and $1.6 of asset impairment and severance expense at our Nuevo Laredo facility in Mexico and our corporate offices.

~~Earnings (loss) from operations~~

Earnings from operations in the first nine months of fiscal 2008 were $13.0 million compared to a loss of $40.0 million during the first nine months of fiscal 2007, which is a $53.0 million improvement. Intercompany royalty and trademark fees increased earnings from operations by $17.5 million, which is eliminated in the consolidated financial statements. Earnings from operations were $12.8 million higher due to the sale of the Wabash, Indiana facility in the prior year, which had been experiencing operating losses and was also sold at a loss. Lower employee costs, decreased audit services, and lower bank fees also improved earnings from operations by $14.4 million. Improved sales and mix at the Nuevo Laredo, Mexico plant increased earnings from operations by $2.8$3 million.

Liquidity and Capital Resources

Sources of Liquidity

The principal sources of liquidity for our ~~future~~ operating, capital expenditure, facility closure, restructuring, and reorganization requirements during the Chapter 11 proceedings are expected to be (i) proceeds of the New Money DIP Loans, (ii) cash flows from continuing operations, ~~(ii)~~(iii) cash and cash equivalents on hand, ~~(iii)~~and (iv) proceeds related to our international trade receivable ~~securitization and~~ financing ~~programs, and (iv) borrowings~~programs.

We will need to obtain additional financing in order to emerge from our New Credit Facilities. Borrowings under our New Credit Facilities could be restricted by the financial covenants of the New Credit Facilities, and violations of financial covenants could have significant negative consequences for our business. We intend to seek amendments to the covenants to continue to allow us access to borrowings under our New Credit Facilities.Chapter 11 bankruptcy proceedings. There can be no ~~assurances~~assurance that such ~~a covenant amendment~~financing will be ~~obtained~~available on acceptable terms or at all. If we are unable to obtain additional financing, we would unlikely be able to successfully complete our restructuring and continue as a going concern.

The filing of our Chapter 11 petitions constituted an event of default under our Pre-petition Credit Facilities and Senior Notes and the obligations under those debt instruments became automatically and immediately due and payable, subject to an automatic stay of any action to collect, assert, or recover a claim against the Debtors and the application of applicable bankruptcy law. The filing of the Chapter 11 petitions was also an event of termination under our domestic accounts receivable program.

On June 15, 2009, the Bankruptcy Court issued a final order approving the DIP Credit Agreement. The DIP Credit Agreement provides for an aggregate commitment for New Money DIP Loans of up to $100 million. The proceeds of the New Money DIP Loans are deposited in depositary accounts and can be withdrawn no more than twice per week and then only to the extent needed to pay permitted expenses payable in the five business days following each withdrawal in accordance with budgets approved in the sole discretion of the lenders under the DIP Credit Agreement. There can be no assurance that ~~such sources~~the amounts of cash from operations and amounts made available under our DIP Credit Agreement will ~~prove~~be sufficient to befund our operations. In the event that cash flows and available borrowings under the DIP Credit Agreement are not sufficient to meet our ~~future~~liquidity requirements, ~~in part, due~~our operations would be adversely affected and we may not be able to ~~inherent uncertainties about applicable future business and capital market conditions. See Item 1A, Risk Factors, for more~~continue as a going concern. For additional information on ~~our New~~the DIP Credit ~~Facilities.~~Agreement, seeExecutive Summary and Chapter 11 Matters—Chapter 11 Financing.

Capital Resources

We ~~have~~had a domestic accounts receivable securitization facility with aan interest rate equal to LIBOR plus 2.25% at April 30, 2009. The facility limit was reduced to $5.0 million in April 2009 and no additional advances were made under the program ~~limit~~beyond the $5.0 million advanced. The facility was terminated upon our filing of ~~$25 million. Due to concentration limits and restrictions on financing certain receivables, the entire program limit is not available.~~Chapter 11 bankruptcy proceedings in May 2009. There were ~~$15~~$5.0 million and $6.0 million of borrowings under this program as of ~~October 31, 2008~~April 30 and ~~no borrowings under this program as of~~ January 31, ~~2008.~~2009, respectively.

We have an accounts receivable financing program in Germany with a local financial institution. The program limit was ~~€25~~€25 million as of ~~October 31, 2008~~April 30 and ~~€20 million as of~~ January 31, ~~2008.~~2009. Borrowings under this program of approximately ~~€25~~€12.3 million or ~~$32.6~~$16.3 million and ~~€20~~€19.7 million or ~~$29.6~~$25.3 million at ~~October 31, 2008~~April 30, 2009 and January 31, ~~2008,~~2009, respectively, are included in short term bank borrowings.

We also have an accounts receivable factoring program in the Czech Republic with a local financial institution. The program limit is 480 million Czech Crown or approximately ~~$26~~$24 million and ~~$28~~$22 million as of ~~October 31, 2008~~April 30, 2009 and January 31, ~~2008,~~2009, respectively.

As of ~~October 31, 2008~~April 30, 2009 and January 31, ~~2008,~~2009, approximately ~~341.9~~240.8 million Czech Crown or ~~$18.4~~$11.9 million and ~~344.0~~246.4 million Czech Crown or ~~$19.7~~$11.4 million, respectively, was factored under this program. The transactions are accounted for as sales of receivables under the provisions of SFAS 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities” (SFAS 140) and the receivables are removed from the Consolidated Balance Sheets.

Cash Flows

Operating Activities:Cash used for operations was ~~$21.1~~$33.1 million in the first ~~nine~~three months of fiscal ~~2008~~2009 compared to ~~cash provided by operations of $37.4~~$31.8 million in the first ~~nine~~three months of fiscal ~~2007.~~2008. The ~~$58.5~~$1.3 million increased use of cash ~~resulted from decreased accounts payable~~is primarily due to lower profits offset by a decrease in working capital, both attributable to lower sales volumes during the ~~expiration of special year end payment terms at the end~~first quarter of fiscal ~~2007~~2009 as ~~well as lower volumes. This was partially offset by cash provided by operations as our receivables have decreased from the prior year due~~compared to the ~~drop in sales volumes. The increased use~~first quarter of cash for accounts payable purposes was also somewhat offset by use of our accounts receivable securitization programs in the current year, whereas in the prior year our availability and use of the securitization facilities decreased due to the sale of businesses.fiscal 2008.

Investing Activities:Cash used for investing activities was ~~$90.5~~$2.3 million during the first ~~nine~~three months of fiscal ~~2008~~2009 compared to ~~$62.6~~$18.7 million in the first ~~nine~~three months of fiscal ~~2007.~~2008. The ~~increased~~decreased use of cash was primarily due to lower capital expenditures for property, plant, and equipment, which declined from $19.2 million in the ~~disposition of the Hoboken, Belgium facility during the second~~first quarter of fiscal ~~2008.~~2008 to $2.5 million in the first quarter of fiscal 2009.

Financing Activities:Cash ~~provided by~~used for financing activities was ~~$21.3~~$15.8 million in the first ~~nine~~three months of fiscal ~~2008~~2009 compared to ~~$16.1~~$5.3 million in the first ~~nine~~three months of fiscal ~~2007.~~2008. During the ~~second~~first quarter of fiscal ~~2007, proceeds~~2009, we reduced the outstanding balances of our short term debt borrowings from local banks at our international locations. Dividends paid to minority shareholders were also lower during the ~~Rights Offering, net of fees, of $161.6 million were used to pay off $133.3 million of long-term debt. During fiscal 2008, we increased short-term~~

~~borrowings by $20.8 million mainly through securitization and factoring of accounts receivable. We also utilized our revolving credit facility in the third~~first quarter of fiscal ~~2008, resulting in higher proceeds from financing activities of $16.0 million. We have restricted cash of $4.7 and $3.0 million~~2009 as ~~of October 31, 2008 and January 31, 2008 primarily related~~compared to ~~the German securitization program as well as the collateral at our Spain facility for our steel supplier in order to get favorable pricing.~~fiscal 2008.

Off Balance Sheet Arrangements

~~We have~~As of April 30, 2009, we had a ~~$25 million~~ domestic accounts receivable securitization ~~facility.~~facility with a program limit of $5 million as of April 30, 2009 and $25 million as of January 31, 2009. The facility ~~has an expiration date of May 30, 2013 and~~had an interest rate equal to LIBOR plus 2.25%. ~~The actual amount of funding available at any given time is based on availability of eligible receivables and other customary factors.~~

~~Pursuant to the securitization facility, certain~~This program was terminated in May 2009 as a result of our consolidated subsidiaries sell substantially all U.S. short term receivables to a non-consolidated special purpose entity (SPE I) at face value and no gains or losses are recognized in connection with the sales. The purchase price for the receivables sold to SPE I is paid in a combination of cash and short term notes. The short term notes appear in Other Receivables on our Consolidated Balance Sheets and represent the difference between the face amount of accounts receivables sold and the cash received for the sales. SPE I resells the receivables to a non-consolidated qualifying special purpose entity (SPE II) at an annualized discount of 2.4% to 4.4%. SPE II pays the purchase price for the receivables with cash received from borrowings and a short term note to SPE I for the excess of the purchase price of the receivables over the cash payment. SPE II pledges the receivables to secure borrowings from commercial lenders. This debt is not included in our consolidated financial statements.

Collections for the receivables are held by HLI Opco, and deposited into an account controlled by the program agent. The servicing fees payable to HLI Opco are set off against interest and other fees payable to the program agent and lenders. The program agent uses the proceeds to pay off the short term borrowings from commercial lenders and returns the excess collections to SPE II, which in turn pays down the short term note issued to SPE I. SPE I then pays down the short term notes issued to the consolidated subsidiaries.Chapter 11 filings.

The securitization transactions are accounted for as sales of the receivables under the provisions of SFAS 140 and are removed from the Consolidated Balance Sheets. The proceeds received are included in cash flows from operating activities in the Consolidated Statements of Cash Flows. Costs associated with the receivables facility are recorded as other expense in the Consolidated Statements of Operations.

At ~~October 31, 2008~~April 30, 2009 and January 31, ~~2008~~2009 the outstanding balances of receivables sold to special purpose entities were ~~$54.4~~$33.9 million and ~~$48.3~~$21.4 million, respectively. Our net retained interests at ~~October 31, 2008~~April 30, 2009 and January 31, ~~2008~~2009 were ~~$39.4~~$28.9 million and ~~$48.3~~$15.4 million, respectively, which are disclosed as Other Receivables on the Consolidated Balance Sheets and in cash flows from operating activities in the Consolidated Statements of Cash Flows. There was ~~$15.0~~$5.0 million and $6.0 million in advances from lenders at ~~October 31, 2008~~April 30, 2009 and ~~no advances at~~ January 31, ~~2008.~~2009, respectively.

Credit Ratings

As of ~~October 31, 2008~~April 30, 2009 our credit ratings were as follows:


	S&P	Moody’s	Fitch
Corporate rating	BCCC+	B3Caa3	BC
Bank debt ~~rating~~	~~BB-~~	B2	~~BB/RR1~~
~~New Senior Note~~ rating	B-	Caa2	~~B-/RR5~~CC/RR3
Senior Notes rating	CCC-	Ca	C/RR6

In May 2009 S&P downgraded our corporate rating from CCC+ to CC; bank debt rating from B- to CCC-; and Senior Notes rating from CCC- to C. After we filed for bankruptcy on May 11, 2009, S&P further downgraded our corporate rating from CC to D; bank debt rating from CCC- to D; and Senior Notes rating from C to D.

After we filed for bankruptcy on May 11, 2009, Moody downgraded our corporate rating from Caa3 to Ca; bank debt rating from Caa2 to Caa3; and Senior Notes rating from Ca to C.

3432

~~Contractual Obligations~~

~~The following table identifies~~ After we filed for bankruptcy on May 11, 2009, Fitch downgraded our ~~significant contractual obligations as of October 31, 2008 (dollars in millions):~~

Payment Due by Period
Less than 1
Year 2-3 Years 4-5 Years After 5 Years Total
Short-term borrowings $ 46.4 $ — $ — $ — $ 46.4
Long-term debt 4.2 7.9 22.8 488.4 523.3
Operating leases 3.9 2.1 0.6 0.1 6.7
Capital expenditures 11.9 — — — 11.9
United States pension contribution 4.4 7.4 4.2 — 16.0
Tax reserves — 0.1 — 4.7 4.8

Total obligations $ 70.8 $ 17.5 $ 27.6 $ 493.2 $ 609.1

~~Other Cash Requirements~~

~~We anticipate the following significant cash requirements~~corporate rating from C to ~~be paid during the remainder of fiscal 2008 (dollars in millions):~~

Interest $ 16.1
Taxes 6.6
International pension and other post-retirement benefits funding 5.7
D; bank debt rating from CC/RR3 to C/RR4; and Senior Notes affirmed at C/RR6.

New Accounting Pronouncements

In ~~March 2008~~June 2009 the ~~Financial Accounting Standards Board~~FASB issued SFAS ~~161, “~~~~Disclosures about Derivative Instruments~~167, “Amendments to FASB Interpretation No. 46(R)” (SFAS 167). SFAS 167 eliminates Interpretation 46(R)’s exceptions to consolidating qualifying special-purpose entities, contains new criteria for determining the primary beneficiary, and ~~Hedging Activities –~~increases the frequency of required reassessments to determine whether a company is the primary beneficiary of a variable interest entity. SFAS 167 also contains a new requirement that any term, transaction, or arrangement that does not have a substantive effect on an entity’s status as a variable interest entity, a company’s power over a variable interest entity, or a company’s obligation to absorb losses or its right to receive benefits of an entity must be disregarded in applying Interpretation 46(R)’s provisions. The elimination of the qualifying special-purpose entity concept and its consolidation exceptions means more entities will be subject to consolidation assessments and reassessments. SFAS 167 will be effective for our fiscal year beginning February 1, 2010. We are currently assessing the potential impacts, if any, on our consolidated financial statements.

In June 2009 the FASB issued SFAS 166, “Accounting for Transfers of financial Assets — an amendment of FASB Statement No. ~~133”~~(140” (SFAS 166). SFAS ~~161). This standard requires enhanced disclosures about an entity’s derivative~~166 eliminates the concept of a qualifying special-purpose entity, creates more stringent conditions for reporting a transfer of a portion of a financial asset as a sale, clarifies other sale-accounting criteria, and ~~hedging activities.~~changes the initial measurement of a transferor’s interest in transferred financial assets. SFAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. This standard is166 will be effective for our fiscal year beginning February 1, 2010. We are currently assessing the potential impacts, if any, on our consolidated financial statements.

In May 2009 the FASB issued SFAS 165, “Subsequent Events” (SFAS 165). SFAS 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued ~~for fiscal years and interim periods beginning after November 15, 2008 and only requires disclosures for earlier periods presented for comparative purposes beginning~~or are available to be issued. It should not result in significant changes in the ~~first year~~subsequent events that an entity reports, either through recognition or disclosure in its financial statements. SFAS 165 introduces the concept of financial statements beingavailable to be issued.It requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date, that is, whether that date represents the date the financial statements were issued or were available to be issued. This disclosure should alert all users of financial statements that an entity has not evaluated subsequent events after that date in the ~~year~~set of ~~initial adoption.~~financial statements being presented. SFAS 165 will apply to both interim financial statements and annual financial statements after June 15, 2009. We do not anticipate that the adoption of SFAS ~~161~~165 will have a significant impact on our financial condition or results of operations.

In December ~~2007 the FASB issued SFAS 141R, “~~~~Business Combinations”~~(SFAS 141R). This standard establishes principles and requirements for how the acquirer recognizes and measures the acquired identifiable assets, assumed liabilities, noncontrolling interest in the acquiree, and acquired goodwill or gain from a bargain purchase. SFAS 141R also determines what information the acquirer must disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS 141R applies prospectively to business combinations for which the acquisition date is on or after January 1, 2009. We do not anticipate that the adoption of SFAS 141R will have a significant impact on our financial condition or results of operations.

~~In December 2007 the FASB issued SFAS 160, “~~~~Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51~~” (SFAS 160). This standard establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS 160 clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. SFAS 160 is effective for us as of February 1, 2009 with early adoption prohibited. SFAS 160 shall be applied prospectively as of the beginning of the fiscal year in which this standard is initially applied. The presentation and disclosure requirements of this standard shall be applied retrospectively for all periods presented and will impact how we present and disclose noncontrolling interests and income from noncontrolling interests in our financial statements.

Item 3.Quantitative and Qualitative Disclosures About Market Risk

In the normal course of business we are exposed to market risks arising from changes in foreign exchange rates, interest rates, raw material, and utility prices. We selectively use derivative financial instruments to manage these risks, but do not enter into any derivative financial instruments for trading purposes.

~~Foreign Exchange~~

We There have ~~global operations and thus make investments and enter into transactions in various foreign currencies. In order~~been no significant changes to ~~minimize the risks associated with foreign currency fluctuations, we first seek to internally net~~our foreign exchange ~~exposures,~~ and may use derivative financial instruments to hedge any remaining net exposure. We use forward foreign currency exchange contracts on a limited basis to reduce the earnings and cash flow impact of non-functional currency denominated transactions. The gains and lossescommodities risks from ~~these hedging instruments generally offset the gains or losses from the hedged items and are recognized~~those previously disclosed in ~~the same period the hedged items are settled.~~

~~The value of~~ our consolidated assets and liabilities located outside the United States (translated at period-end exchange rates) and income and expenses (translated using average rates prevailing during the period), generally denominated in the Euro, Czech Crown, and the Brazilian Real, are affected by the translation into our reporting currency (the U.S. Dollar). Such translation adjustments are reportedForm 10-K as a separate component of stockholders’ equity. In future periods, foreign exchange rate fluctuations could have an increased impact on our reported results of operations. However, due to the self-sustaining nature of our foreign operations, we believe we can effectively manage the effect of these currency fluctuations. In addition, in order to further hedge against such currency rate fluctuations, we have, from time to time, entered into certain foreign currency swap arrangements.

In January 2006 we entered into a foreign currency swap agreement in Euros with a total notional value of $50 million to hedge our net investment in certain of our foreign subsidiaries. During the first quarter of fiscal 2007 the foreign currency swap agreement was effective. During the second quarter of 2007 we terminated the swap due to our debt restructuring. During the fourth quarter of fiscal 2007 we recognized the loss associatedfiled with the ~~swap due to the liquidation of the related foreign subsidiaries.~~

~~At October 31, 2008~~Securities and ~~January 31, 2008 approximately €417 million or $544 million and €410 million or $607 million, respectively, of our debt was denominated in Euros.~~

~~Interest Rates~~

~~We generally manage our risk associated with~~Exchange Commission on May 11, 2009. Our interest rate ~~movements through the use~~risks as of ~~a combination of variable and fixed rate debt. We~~April 30, 2009 have not changed significantly from ~~time to time entered into~~those disclosed in our Form 10-K, although our interest rate swap ~~arrangements~~agreements were terminated in May 2009 (seeNote 13, Derivative Instruments and Hedging Activitiesin the notes to ~~further hedge against interest rate fluctuations. In January 2006 we entered into an~~the consolidated financial statements included herein for additional detail on the termination of our interest rate swap agreement with a total notional value of $50 million to hedge the variability of interest payments associated with our variable-rate term debt. The swap agreement was expected to settle in January 2009, and qualified for cash flow hedge accounting treatment. During the first quarter of fiscal 2007 the swap was effective. During the second quarter of 2007 we terminated the swap due to our debt restructuring and recognized the loss associated with the swap. During the second quarter of fiscal 2007 we entered into interest rate swaps with total notional amount of €70 million. The swaps became effective on August 28, 2007 and mature on August 28, 2012. During the third quarter of fiscal 2007 we entered into interest rate swaps with total notional amount of €50 million. The swaps became effective on September 30, 2007 and mature on September 30, 2012. During the first quarter of fiscal 2008 we entered into interest rate swaps with total notional amount of €50 million. The swaps became effective on February 28, 2008 and mature on February 28, 2012.

~~At October 31, 2008 and January 31, 2008 approximately $162 million and $234 million, respectively, of our debt was variable rate debt after considering the impact of the swaps.~~

~~Commodities~~

We rely on the supply of certain raw materials and other inputs in our production process, including aluminum, steel, and natural gas. We manage the exposure associated with these commitments primarily through the terms of our supply and procurement

contracts. We have entered into firm purchase commitments or other arrangements for substantially all of our aluminum and steel requirements for fiscal 2008, although as prices increase, suppliers may seek to impose surcharges or other price increases above those in our purchase agreements. Additionally, in accordance with industry practice, we generally pass through fluctuations in the price of aluminum to our customers. We have also been successful in negotiating with some of our customers to pass through a portion of fluctuations in the price of steel. If our costs for steel increase, we will attempt to mitigate the impact of the higher material costs through pricing actions with our customers, although those actions may not be sufficient to offset increased costs. We typically use forward-fixed contracts to hedge against changes in commodity prices for a majority of our outstanding purchase commitments. We also enter into forward purchase commitments for natural gas to mitigate market fluctuations in natural gas prices.agreements).

Item 4.Controls and Procedures

We maintain a disclosure committee (the Disclosure Committee) reporting to our Chief Executive Officer to assist the Chief Executive Officer and Chief Financial Officer in fulfilling their responsibility in designing, establishing, maintaining, and reviewing our Disclosure Controls and Procedures. The Disclosure Committee is currently chaired by our Vice President and Chief Financial Officer and includes our Chief Operating Officer and President, Global Wheel Group; Vice President, General Counsel and Secretary; Director of Compensation and Benefits; Treasurer; Assistant General Counsel; Director of Internal Audit; Director of Tax; and Corporate Controller as its other members.

As of the end of the period covered by this report, our Chief Executive Officer and Chief Financial Officer, along with the Disclosure Committee, evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of ~~October 31, 2008~~April 30, 2009 to ensure that information required to be disclosed by the Company in the reports that it files and submits under the Securities Exchange Act of 1934 is accumulated and submitted to the Company’s management as appropriate to allow timely decisions regarding required disclosure.

PART II. OTHER INFORMATION

Item 1.Legal Proceedings

In general, all pending litigation involving the Debtors was stayed upon the filing of our Chapter 11 proceedings and, absent further order of the Bankruptcy Court, no party, subject to certain exceptions, may take any action, also subject to certain exceptions, to recover on pre-petition claims against the Debtors. At this time, it is not possible to predict the outcome of the Chapter 11 cases or their effect on our business. There have been no other material developments to our legal proceedings since our Annual Report on Form 10-K filed on ~~April 10, 2008.~~May 11, 2009.

Item 1A.Risk Factors

~~There have been no material changes from the~~The risk factors as previously disclosed in our most recent Annual Report on Form 10-K ~~other than~~filed on May 11, 2009 are superseded in their entirety as set forth in this Quarterly Report on Form 10-Q:

Risks Related to our Bankruptcy Filings

We filed for protection under Chapter 11 of the ~~risk relating~~Bankruptcy Code on May 11, 2009.

During our Chapter 11 proceedings, our operations, including our ability to ~~compliance~~execute our business plan, are subject to the risks and uncertainties associated with our ~~debt covenants. As~~bankruptcy. Risks and uncertainties associated with our Chapter 11 proceedings include the following:

	•		Actions and decisions of our creditors and other third parties with interests in our Chapter 11 proceedings, which may be inconsistent with our plans;

	•		Our ability to obtain court approval with respect to motions in the Chapter 11 proceedings made from time to time;

	•		Our ability to develop, prosecute, confirm, and consummate a plan of reorganization with respect to the Chapter 11 proceedings;

	•		Our ability to obtain and maintain commercially reasonable terms with vendors and service providers;

	•		Our ability to maintain contracts that are critical to our operations;

	•		Our ability to retain management and other key individuals; and

	•		Risks associated with third parties’ seeking and obtaining court approval to terminate or shorten the exclusivity period for us to propose and confirm a plan of reorganization, to appoint a trustee under Chapter 11, or to convert the cases into liquidations under Chapter 7 of the Bankruptcy Code.

These risks and uncertainties could affect our business and operations in various ways. For example, negative events or publicity associated with our Chapter 11 proceedings could adversely affect our sales and relationships with our customers, as well as with vendors and employees, which in turn could adversely affect our operations and financial condition, particularly if the Chapter 11 proceedings are protracted. Also, transactions outside the ordinary course of ~~October 31, 2008, we were~~business are subject to the prior approval of the Bankruptcy Court, which may limit our ability to respond timely to certain events or take advantage of certain opportunities. In addition, in ~~compliance with all applicable covenants and restrictions of~~order to successfully emerge from our ~~New Credit Facilities, although we~~Chapter 11 proceedings, our senior management will be ~~increasingly unlikely~~required to ~~achieve compliance in subsequent periods, absent~~spend significant amounts of time developing a ~~waiver or amendment from~~comprehensive plan of reorganization, instead of concentrating exclusively on our ~~lenders. We are currently pursuing an amendment to the New Credit Facilities to enable us to comply with the covenants in future periods~~business operations. Further, we have made, and towill continue to ~~access~~make, judgments as to whether we should limit investment in, exit, or dispose of certain businesses. Our Chapter 11 proceedings and development of a plan of reorganization may result in the ~~Revolving Credit Facility without restrictions. We~~sale or divestiture of

assets or businesses, but we can ~~give~~provide no assurance that we will ~~obtain~~be able to complete any sale or divestiture on acceptable terms or at all. Any decision by our management to further limit investment in, exit, or dispose of businesses may result in the recording of additional charges.

Because of the risks and uncertainties associated with our Chapter 11 proceedings, the ultimate impact that events that occur during these proceedings will have on our business, financial condition and results of operations cannot be accurately predicted or quantified. We cannot provide any assurance as to what values, if any, will be ascribed in our bankruptcy proceedings to our various pre-petition liabilities, common stock, and other securities. We believe that our currently outstanding common stock will have no value and will be cancelled under any plan of reorganization we may propose under Chapter 11. We also believe that the holders of our Senior Notes are unlikely to receive more than a de minimis distribution on account of their interests in the Senior Notes and that such ~~an amendment~~interests could be cancelled under any plan of reorganization the Company may propose under Chapter 11.

Our liquidity position imposes significant challenges to our ability to continue our operations.

As global economic conditions have deteriorated since September 2008, we have experienced significant pressure on our business, including our liquidity position. Our Chapter 11 proceedings may increase this pressure. Because of the public disclosure of our liquidity constraints, our ability to maintain normal credit terms with our suppliers has become impaired. The terms of the trade credit we receive from suppliers has been reduced. If liquidity problems persist, our suppliers could refuse to provide key products and services in the future. Our financial condition and results of operations, in particular with regard to our potential failure to meet our debt obligations, may lead some customers to become reluctant to enter into long-term agreements with us. In addition to the ~~covenants~~cash requirements necessary to fund our continuing operations, we anticipate that we will incur significant professional fees and other restructuring costs in connection with the Chapter 11 proceedings and the restructuring of our business operations.

We are currently operating under the DIP Credit Agreement, which provides for an aggregate commitment for New Money DIP Loans of up to $100 million. The proceeds of the loans under the DIP Credit Agreement are deposited in depositary accounts and can be withdrawn no more than twice per week and then only to the extent needed to pay permitted expenses payable in the five business days following each withdrawal in accordance with budgets approved in the sole discretion of the lenders under the DIP Credit Agreement. There can be no assurance that the amounts of cash from operations and amounts made available under our DIP Credit Agreement will be sufficient to fund our operations. In the event that cash flows and available borrowings under the DIP Credit Agreement are not sufficient to meet our liquidity requirements, our operations would be adversely affected and we may not be able to continue as a going concern. For additional information on the DIP Credit Agreement, seeItem 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Executive Summary and Chapter 11 Matters—Chapter 11 Financing.

Our stock is no longer listed on a national securities exchange. It will likely be more difficult for stockholders and investors to sell our common stock or to obtain accurate quotations of the share price of our common stock.

Effective June 8, 2009, the NASDAQ Stock Market delisted our common stock from trading, and, as a result, stockholders and investors will likely find it more difficult to sell our common stock or to obtain an accurate quotation of the price of our common stock. We can provide no assurance that we will re-list our common stock on a national securities exchange or that the stock will continue to be traded on an over-the-counter market. As a result of the delisting of our common stock, our suppliers, customers, and employees may lose confidence in the Company, and institutional investors may lose interest in our common stock. We believe that our currently outstanding common stock will have no value and will be cancelled under any plan of reorganization we may propose under Chapter 11. The opportunity for any recovery by holders of our common stock under such reorganization plan is unlikely and our shares are likely to be cancelled without any compensation pursuant to such plan.

During the pendency of our Chapter 11 proceedings, our financial results may be unstable and may not reflect historical trends.

During the pendency of our Chapter 11 proceedings, our financial results may fluctuate as they reflect asset impairments, asset dispositions, restructuring activities, contract terminations and rejections, and claims assessments. As a result, our historical financial performance may not be indicative of our financial performance following the Petition Date. Further, we may sell or otherwise dispose of assets or businesses and liquidate or settle liabilities, with court approval, for amounts other than those reflected in our historical financial statements. Any such sale or disposition and any comprehensive restructuring plan could materially change the amounts and classifications reported in our historical consolidated financial statements, which do not give effect to any adjustments to the carrying value of assets or amounts of liabilities that might be necessary as a consequence of a comprehensive restructuring plan.

Any “ownership change” of the Company could limit our ability to use our net operating loss carryforwards.

Under United States federal income tax law, a corporation is generally permitted to deduct from taxable income in any year net operating losses carried forward from prior years. As of January 31, 2009, we had approximately $707.5 of federal and state net operating loss carryforwards. We expect to undergo an ~~amendment,~~“ownership change” for purposes of Section 382 of the Internal Revenue Code of 1986, as amended, during or as a result of our Chapter 11 proceedings. As a result, our ability to deduct net operating loss carryforwards could be subject to significant limitations.

Risks Related to our Business

Our business depends on the automotive industry, and reductions in the demand for new vehicles will adversely affect our business.

Most of our sales are to automotive and commercial vehicle original equipment manufacturers (OEMs). Therefore, our financial performance is subject to conditions in the automotive industry, which are cyclical and depend on conditions in the U.S. and global economies generally. In North America and elsewhere, the automotive industry is currently characterized by significant overcapacity, fierce competition, rapidly declining sales and production volumes, and high fixed costs. During the second half of fiscal 2008, the weakening of the U.S. and global economies and limited availability of commercial and consumer credit resulted in significant reductions in consumer and capital spending and in the demand for automobiles, light trucks, and commercial vehicles. These conditions have led to decreased production by our customers, which in turn has adversely affected our sales and financial performance during fiscal 2008 and the first quarter of fiscal 2009. Demand for new vehicles may be adversely affected by other factors that are beyond our control, such as interest rates, the availability of credit and levels of disposable income. Our sales are also affected by our customers’ inventory levels and production schedules. Because of the present uncertainty in the economy, some of our customers have been reducing their forecasts for new vehicle production in future periods and have announced significant production shut downs during the second and third quarters of fiscal 2009. Decreases in demand for new vehicles or in new vehicle production may have a significant negative impact on our business. Because we have high fixed production costs, relatively small declines in our customers’ production could significantly reduce our profitability. A prolonged downturn in the North American or European automotive industries or a significant change in product mix due to consumer demand, including as a result of our Chapter 11 proceedings, could require us to further slow production in, or shut down, plants or incur impairment charges.

We depend on a small number of significant customers.

We derived approximately 29% of our fiscal 2008 sales from direct sales to Ford and General Motors and their subsidiaries globally and 12% of our fiscal 2008 sales from sales to these OEM’s in the United States. In addition, our five largest customers (Ford, General Motors, Renault/Nissan, Daimler, and Toyota) and their subsidiaries accounted for approximately 54% of our global sales in fiscal 2008. We may not be able to maintain our current relationships with these customers or continue to supply them at current levels. Our filing for protection under Chapter 11 of the Bankruptcy Code and the associated risks and uncertainties of the Chapter 11 proceedings may affect our customers’ perception of our business and increase the possibility of our losing key customers. Our sales also depend on the particular vehicle platforms that include our products. If production of those vehicle platforms were to be decreased or discontinued, our sales would be reduced. The loss of a significant portion of sales to any of our significant customers could have a material adverse effect on our business. In addition, certain of our customers are currently facing significant financial challenges. General Motors and Chrysler have recently filed for bankruptcy protection and others may do so in the future. The bankruptcy filings could result in adverse changes in these customers’ production levels, pricing, and payment terms and could limit our ability to collect receivables, which could harm our business or results of operations.

Our customers’ cost cutting efforts and purchasing practices may adversely impact our business.

Our customers are continually seeking to lower their costs of manufacturing, particularly in light of their current financial challenges. These cost reductions may reduce the amount we receive for sales of our products and may include relocation of our customers’ operations to countries with lower production costs. Customers might find it less costly to manufacture themselves at relocated facilities or to rely on foreign suppliers with lower production costs, whether or not the customers’ production is relocated, either of which may have a significant negative impact on our business. Changes in our customers’ purchasing policies or payment practices could also have an adverse effect on our business.

We operate in the highly competitive automotive supply industry.

The automotive supply industry is highly competitive, both domestically and internationally, with a large number of suppliers competing to provide products to a relatively small number of OEMs. Competition is based primarily on price, quality, timely delivery, and overall customer service. Many of our competitors are larger and have greater financial and other resources than we do. Further consolidation in the industry may result in fewer, larger suppliers who benefit from purchasing and distribution economies of scale. We may not be able to compete successfully with these or other companies. In addition, there is a trend toward OEMs expanding their business relationships with a smaller number of “preferred” suppliers. If we are not designated as a preferred supplier, we could lose sales to competitors that are preferred suppliers.

Furthermore, the rapidly evolving nature of the automotive industry may attract new entrants, particularly in low cost countries such as China. We may not be able to offer our products at prices competitive with those of competitors in low-cost countries and pricing pressure created by such competitors could reduce our sales and margins. These factors have led to a re-sourcing of certain future business to foreign competitors in the past and may continue to do so in the future. In addition, any of our competitors may develop superior products, produce similar products at a lower cost than we do, or adapt more quickly to new technologies or evolving customer requirements. As a result, our products may not be able to compete successfully.

A number of our competitors have been forced to seek bankruptcy protection partially as a result of highly competitive market conditions in our industry. In addition, our filing for protection under Chapter 11 of the Bankruptcy Code and the associated risks and uncertainties of the Chapter 11 proceedings may be used by our competitors to attract our existing customers or may discourage our customers from purchasing products under long-term arrangements or designating us a “preferred” supplier.

We may be unable to maintain trade credit with our suppliers.

We currently maintain trade credit with certain of our key suppliers and utilize such credit to purchase significant amounts of raw material and other supplies with payment terms. As conditions in the automotive supply industry have become less favorable, credit insurance, which is used by suppliers to manage their payment risk in connection with providing payment terms, has become significantly more expensive or unavailable. As a result, key suppliers have been seeking to shorten trade credit terms, reduce credit limits or require cash in advance for payment. Because we have filed for protection under Chapter 11 of the Bankruptcy Code, our key suppliers may seek to further restrict or eliminate our ability to obtain trade credit, or they may require payment on more restricted terms. If a significant number of our key suppliers were to shorten or eliminate our trade credit, our inability to finance large purchases of key supplies and raw materials would increase our costs and negatively impact our liquidity and cash flow, which could have a material adverse effect on our business, results of operations, or financial condition and on our ability to emerge from the Chapter 11 proceedings.

Increased cost of supplies and raw materials could affect our financial health.

Our business is subject to the risk of price increases and periodic delays in the delivery of raw materials and supplies. The availability and price of these commodities are subject to market forces largely beyond our control. Fluctuations in prices or availability of these raw materials or supplies will affect our profitability and could have a material adverse effect on our business, results of operations, or financial condition. In addition, if ~~obtained, would enable~~any of our suppliers seek bankruptcy relief or otherwise cannot continue their business as anticipated, the availability or price of raw materials could be adversely affected.

In recent periods there has been significant volatility in the global prices of steel, aluminum, and natural gas, which have had an impact on our business. Continued volatility in the price of steel, aluminum, natural gas, or other key materials and supplies may have a material adverse effect on our business, results of operations, or financial condition. Although we have been able to pass some of the supply and raw material cost increases onto our customers in the past, current competitive and marketing pressures may prevent us from doing so in the future. In addition, our customers are not contractually obligated to accept certain of these price increases, and in light of current market conditions, they may be less likely to accept the increases than they have been in the past. Moreover, we sometimes use fixed-forward contracts to hedge against fluctuation in the prices of certain commodities, which could result in our paying greater than market prices for these commodities. Where we pass through the costs of raw materials to our customers, customer pricing will decrease as raw material market prices decrease, regardless of the cost of our fixed forward contracts. For example, we generally enter into fixed-forward contracts for aluminum based on volume projections from our customers that coincide with the applicable pass through pricing adjustment periods. In recent periods, customer volumes have decreased significantly relative to their projections while at the same time market prices for aluminum have fallen sharply. As a result, we have fixed-forward

contracts for aluminum based on projected volumes at prices that are well above current market levels, while the amount of the cost we can pass through to the customer has decreased to reflect the lower market cost. This potential inability to pass on price increases to our customers could adversely affect our operating margins and cash flow, and result in lower operating income and profitability.

The financial distress of our suppliers could harm our results of operations.

The conditions in the automotive industry have adversely affected our supplier base. Several large suppliers have filed for bankruptcy protection or ceased operations. Continued financial distress among our supply base could lead to commercial disputes, write offs and possibly supply chain interruptions. The continuation or worsening of conditions in the supply base could have a material adverse effect on our business, financial condition or results of operations.

We have significant international operations that subject us to risks not faced by domestic competitors.

Approximately 82% of our consolidated net sales in fiscal 2008 were from operations outside the United States. We expect sales from our international operations to continue to ~~access~~represent a substantial and growing portion of our business. Risks inherent in international operations include the ~~Revolving Credit Facility without restrictions.~~following:

	•		agreements may be difficult to enforce and receivables difficult to collect through a foreign country’s legal system;

	•		foreign customers may have longer payment cycles;

	•		foreign countries may impose additional withholding taxes or otherwise tax our foreign income, impose tariffs or adopt other restrictions on foreign trade or investment, including foreign exchange controls;

	•		foreign laws or regulations may restrict our ability to repatriate cash from foreign operations;

	•		necessary export licenses or customs clearances may be difficult to obtain;

	•		intellectual property rights may be more difficult to enforce in foreign countries;

	•		political or economic conditions or exposure to local social unrest, including any resultant acts of war, terrorism or similar events in the countries in which we operate could have an adverse effect on our earnings from operations in those countries;

	•		unexpected adverse changes in foreign laws or regulatory requirements may occur;

	•		compliance with a variety of foreign laws and regulations may be difficult;

	•		in certain countries we are subject to nationwide collective labor agreements that we did not negotiate;

	•		labor laws in certain countries may make it more difficult or expensive to reduce our labor force in response to reduced demand;

	•		differing foreign tax structures may subject us to additional taxes or affect our ability to repatriate cash from our foreign subsidiaries;

	•		fluctuations in exchange rates between the operating currencies of our international operations relative to the US dollar may adversely affect the value of our international assets and results of operations as reported in US dollars, as well as the comparability of period-to-period results of operations; and

	•		an inability to use the financing provided by the DIP Credit Agreement to fund our foreign operations could result in local insolvency proceedings in certain foreign jurisdictions.

Any of these factors could have a material adverse effect on our business, cash flows, financial condition, and results of operations.

Unexpected equipment failures, delays in deliveries, or catastrophic loss at any of our manufacturing facilities could lead to production curtailments or shutdowns.

Equipment failure, interruption of supply, labor disputes, or other causes could significantly reduce production of our products, which would reduce our sales and earnings for the affected period. In addition, we generally produce our products on a “just in time” basis and do not hold large inventories. If production is interrupted at any of our manufacturing facilities, even if only temporarily or as a result of events that are beyond our control, delivery times could be severely affected. Any significant delay in deliveries to our customers could lead to returns or cancellations and cause us to lose future sales, as well as expose us to claims for damages. Our manufacturing facilities are also subject to the risk of catastrophic loss due to unanticipated events such as fires, explosions, or violent weather conditions. We have in the past and may in the future experience plant shutdowns or periods of reduced production as a result of equipment failure, power outages, and delays in deliveries, or catastrophic loss, which could have a material adverse effect on our results of operations or financial condition.

We may not be able to successfully implement our planned operational improvements or realize the benefits of those plans already implemented.

As part of our ongoing focus on being a low-cost provider of high quality products, we continually analyze our business to further improve our operations and identify cost-cutting measures. If we ~~are~~do not identify and implement operational improvements or if implemented improvements do not generate the expected benefits, we may be unable to offer products at a competitive price and generate sufficient operating funds to service our debt or make necessary capital expenditures. If that were to happen, alternative sources of financing may not be available to us on commercially reasonable terms or at all, and our ability to emerge from the Chapter 11 proceedings could be materially and adversely affected.

We may not be able to timely or successfully launch new products.

In order to effectively compete in the automotive supply industry, we must be able to launch new products to meet our customers’ demand. As a result of our current liquidity condition and covenants limiting the amount of our capital expenditures, we may not be able to make the investments needed to launch production of new products. We may not be able to install and obtain customer approval of the equipment needed to produce products for new programs in time for the start of production. In addition, transitioning our manufacturing facilities and resources to full production under new product programs may impact production rates or other operational efficiency measures. Moreover, our customers may delay or cancel the launch of new product programs or actual production may be below planned quantities. Our failure to successfully launch new products, or a failure by our customers to successfully launch new programs in the quantities anticipated, could adversely affect our results.

Our success will depend on our ability to attract and retain qualified employees.

Our success will depend in part on our ability to attract, hire, train, and retain qualified engineering, managerial, technical, sales, and marketing personnel. We face significant competition for these types of employees. Our current financial condition and Chapter 11 proceedings create uncertainty that may lead to an increase in unwanted attrition and may affect our ability to attract and retain qualified new employees. Additionally, as conditions in the automotive industry decline and we implement measures to improve our cost structure, employee morale may suffer. We may be unsuccessful in attracting and retaining the personnel we require and key personnel may leave and compete against us. We may be unsuccessful in replacing key managers who either resign or retire. The loss of any member of our senior management team or other experienced, senior employees could impair our ability to execute our business plan and emerge from the Chapter 11 proceedings, cause us to lose customers and reduce our sales, or lead to the loss of other key employees. In any such ~~an amendment,~~event, our financial condition, results of operations, and cash flows could be adversely affected.

We might fail to adequately protect our intellectual property or third parties might assert that our technologies infringe on their intellectual property.

We rely on a combination of patents, trade secrets, trademarks and copyrights to protect our intellectual property, but this protection might be inadequate. For example, our pending or future patent applications might not be approved or, if allowed, they might not be of sufficient strength or scope. Conversely, third parties might assert that our technologies infringe their proprietary rights. We are currently involved in litigation in which the plaintiff has asserted that we have infringed on its patents. This litigation, and possible future litigation, could result in substantial costs and diversion of our efforts and could adversely affect our business, whether or not we are ultimately successful. For more information on this litigation, see the section entitledLegal Proceedings.

Our products may be rendered obsolete or less attractive by changes in regulatory requirements or competitive technologies.

Changes in legislative, regulatory or industry requirements or in competitive technologies may render certain of our products obsolete or less attractive. Our ability to anticipate changes in technology and regulatory standards and to successfully develop and introduce new and enhanced products on a timely basis will be ~~restricted~~a significant factor in our ability to ~~access~~remain competitive. Certain of our products may become obsolete and we may not be able to achieve the ~~Revolving Credit Facility~~technological advances necessary for us to remain competitive. We are also subject to the risks generally associated with new product introductions and ~~will likely violate~~applications, including lack of market acceptance, delays in product development, and failure of products to operate properly.

A high percentage of our customers’ employees and certain of our employees are unionized or covered by collective bargaining agreements.

Many employees of our major customers and certain of our employees are unionized. Certain of our employees in the ~~covenants~~United States are represented by the United Steel Workers Union, all of whom are employed at our facility in ~~future periods. Such~~Akron, Ohio. Our current contract with the United Steel Workers Union expires in fiscal 2010, and, as part of our Chapter 11 proceedings, we must determine whether to accept or reject this contract. As is common in Mexico and many European jurisdictions, substantially all of our employees in Europe and Mexico are covered by country-wide collective bargaining agreements, which are subject to negotiations on an annual basis. Although we believe that our relations with our employees are good, a ~~violation~~dispute between us and our employees could have a material adverse effect on our business. In addition, significant percentages of the workforces at certain of our major customers and their suppliers are unionized. Strikes or labor disputes at a major customer or one of their key suppliers could result in reduced production of vehicles incorporating our products. This would reduce demand for our products and could have a material adverse effect on our sales and results of operations during the ~~acceleration~~affected periods.

We are subject to potential exposure to environmental liabilities.

We are subject to various foreign, federal, state, and local environmental laws, ordinances, and regulations, including those governing discharges into the air and water, the storage, handling and disposal of solid and hazardous wastes, the remediation of contaminated soil and groundwater, and the health and safety of our employees. We are also required to obtain permits from governmental authorities for certain operations. We may not be in complete compliance with these permits at all times. If we fail to comply with these permits, we could be fined or otherwise sanctioned by regulators and the fine or sanction could be material. The nature of our operations and the history of industrial uses at some of our facilities expose us to the risk of environmental liabilities that could have a material adverse effect on our business. For example, we may be liable for the costs of removal or remediation of contamination that may be present on our property, even if we did not know about or cause the contamination and even if the practices that resulted in the contamination were legal when they occurred.

We may suffer future asset impairments and other restructuring charges, including write downs of intangible assets.

We record asset impairment losses when we determine that our estimates of the future undiscounted cash flows from an operation will not be sufficient to recover the carrying value of that facility’s building, fixed assets, and production tooling. During fiscal 2008 we recorded asset impairment losses, other restructuring charges, and facility exit costs of $22.2 million and goodwill and other intangible asset impairments of $238 million and we may incur significant similar losses and charges in the future. In connection with our emergence from Chapter 11 in 2003 and the application of fresh start accounting, we recorded significant increases in goodwill and intangible assets. At April 30, 2009 we had no goodwill and approximately $113.2 million of other intangible assets recorded on our consolidated balance sheets. We are required to evaluate annually whether our other intangible assets have been impaired or are not recoverable. Future market conditions may indicate that these assets are not recoverable based on changes in forecasts of future business performance and the estimated useful life of these assets, and this may trigger further write-downs of these assets. Any future write-off of a significant portion of our intangible assets would have an adverse effect on our financial condition and results of operations.

The nature of our business exposes us to product liability, recall, and warranty claims and other legal proceedings.

We are subject to litigation in the ordinary course of our business. The risk of product liability, recall, and warranty claims are inherent in the design, manufacture, and sale of automotive products, the failure of which could result in property damage, personal injury, or death. Although we currently maintain what we believe to be suitable and adequate product liability insurance, we may not be able to maintain this insurance on acceptable terms and this insurance may not provide adequate protection against potential liabilities. In addition, we may be required to participate in a recall involving our products. Such a recall would not be covered by our insurance. Furthermore, our customers can initiate a recall of our products without our agreement and offset their costs of the recall against payments due to us for other products. A successful product liability claim in excess of available insurance coverage or a requirement to participate in a product recall could have a material adverse effect on our business. In addition, we are involved in other legal proceedings, which could adversely affect our cash flows, financial condition, or results of operations.

Our pension and other postretirement employee benefits expense could materially increase.

Certain of our current and former employees participate in defined benefit pension plans. The plans are currently underfunded. Declines in interest rates or the market values of the securities held by the plans, or certain other changes, could materially increase the amount by which the plans are underfunded, affect the level and timing of required contributions, and significantly increase our pension expenses and reduce profitability. The values of the securities held by the plans has decreased significantly during the past fiscal year, significantly increasing the amount by which the plans are underfunded. We also sponsor other postretirement employee

benefit plans that cover certain current and former employees and eligible dependents. We fund these obligations on a pay-as-you-go basis. Increases in the expected cost of the benefits, particularly health care, in excess of our assumptions could increase our actuarially determined liability and related expense along with future cash outlays.

Risks Related to Our Capital Structure

We have substantial levels of debt and debt service that will divert a significant amount of cash from our business operations.

We have substantial levels of debt, including debt under our Pre-petition Credit Facilities and Senior Notes, and we are no longer in compliance with the covenants of these debt instruments. As of April 30 and January 31, 2009, we had approximately $715.4 million and $731.5 million of total indebtedness and approximately $56.7 million and $107.5 million of cash and cash equivalents, respectively. The filing of our Chapter 11 petitions constituted an event of default under our Pre-petition Credit Agreement and the Senior Notes, and those debt obligations became automatically and immediately due and payable, subject to an automatic stay of any action to collect, assert, or recover a claim against the Debtors and the application of applicable bankruptcy law. In addition to the debt under our Pre-petition Credit Agreement and under the Senior Notes, we may incur up to $200 million of additional debt under the DIP Loans, and we may incur significant additional debt in the future, including financing required to develop a plan of reorganization and successfully emerge from the Chapter 11 proceedings. The degree to which we will be leveraged could have important consequences, including:

	•		requiring a substantial portion of our cash flow from operations to be dedicated to debt service and therefore not available for our operations, capital expenditures, and future business opportunities;

	•		increasing our vulnerability to a downturn in general economic conditions or in our business;

	•		limiting our ability to adjust to changing market conditions, placing us at a competitive disadvantage compared to our competitors that have relatively less debt; and

	•		limiting our ability to obtain additional financing or access additional funds under the DIP New Credit Agreement for capital expenditures, working capital, or general corporate purposes.

We are currently operating under the DIP Credit Agreement, which provides up to $100 million of New Money DIP ALoans. The DIP Credit Agreement contains certain highly restrictive covenants that require us, among other things, to maintain our corporate existence, make certain payments, perform our obligations under existing agreements, purchase insurance, and provide financial records. The DIP Credit Agreement also limits or prohibits our ability to make capital expenditures, incur indebtedness, make prepayments on or purchase indebtedness in whole or in part, pay dividends, make investments, lease properties, create liens, consolidate or merge with another entity (or allow one of our subsidiaries to do so), sell assets, and acquire facilities or other businesses. The DIP Credit Agreement also requires us to maintain minimum net cash flow after restructuring expenses, EBITDA, interest coverage ratios, and liquidity. There can be no assurance that we will be able to comply with these and other covenants in our DIP Credit Agreement.

The proceeds of the New Money DIP Loan are deposited in depositary accounts and can be withdrawn no more than twice per week and then only to the extent needed to pay permitted expenses payable in the five business days following each withdrawal in accordance with budgets approved in the sole discretion of the DIP lenders. The DIP Credit Agreement also contains numerous events of default, many of which may be triggered by circumstances beyond our ability to control. If we were to default on the DIP Credit Agreement, all amounts due thereunder including the New Money DIP Loans and the Roll-up Loans could become immediately due and payable. In that event, if we were not able to obtain alternative financing to repay the indebtedness outstanding under the ~~New~~DIP Credit Agreement, we may be forced to discontinue operations and liquidate the Company.

We may not be able to fund required capital expenditures, and for that and other reasons we may need additional financing in the future, which we may be unable to obtain.

Our business requires us to make significant capital expenditures to acquire equipment needed to produce products for new customer programs, maintain existing equipment, and implement technologies to reduce production costs in response to customer pricing pressure. In addition, lower sales or unanticipated expenses could give rise to additional financing requirements. We may not generate sufficient cash flow from operations to fund our capital expenditure requirements. In that event, we may need to obtain additional financing or take other steps to reduce expenses or generate cash. There can, however, be no assurance that additional financing will be available or, if it is available, that it will be offered on acceptable terms. Any additional financing would require the consent of the DIP lenders, which we may not be able to obtain. We may be unable to obtain financing on favorable terms, or at all. If adequate funds are not available on acceptable terms, we may be required to make significant reductions in expenses and capital

expenditures, which could significantly restrict our operations and limit our ability to enhance our products, fund capital investments, respond to competitive pressures, or take advantage of business opportunities. As a result of our filing for protection under Chapter 11 of the Bankruptcy Code, our access to additional financing is, and for the foreseeable future will likely continue to be, very limited. Our long-term liquidity requirements and the adequacy of our capital resources are difficult to predict at this time and ultimately cannot be determined until a plan of reorganization has been developed and is confirmed by the Bankruptcy Court.

Our exposure to variable interest rates and foreign currency fluctuations may negatively affect our results.

A portion of our debt, including our borrowings under our Pre-petition Credit Facilities and the ~~New Notes.~~DIP Credit Agreement, bears interest at variable rates. Any increase in the interest rates will increase our expenses and reduce funds available for our operations and future business opportunities. Increases in interest rates will also increase the risks resulting from our significant debt levels. Due to the increase in our operations outside the United States, we have experienced increased foreign currency exchange gains and losses in the ordinary course of our business. Fluctuations in exchange rates may have a material impact on our financial condition, since Euro-denominated debt is converted into US dollars for financial reporting, and cash flows generated in other currencies will be used, in part, to service the dollar-denominated portion of our debt. This fluctuation could result in an increase in our overall leverage and could result in less cash flow available for our operations, capital expenditures, and repayment of our obligations. In addition, fluctuations in foreign currency exchange rates may affect the value of our foreign assets as reported in US dollars and may adversely affect reported earnings and, accordingly, the comparability of period-to-period results of operations. Changes in currency exchange rates may affect the relative prices at which we and foreign competitors sell products in the same market. In addition, changes in the value of the relevant currencies may affect the cost of certain items required in our operations. Although we attempt to hedge against fluctuations in interest rates or exchange rates, such fluctuations may have a material adverse effect on our financial condition or results of operations, or cause significant fluctuations in quarterly and annual results.

Our credit rating may be downgraded in the future.

Our debt is rated by nationally recognized statistical rating organizations. Our debt ratings were recently downgraded and, as a result of our filing for protection under Chapter 11 of the Bankruptcy Code, such ratings may be further downgraded in the future. While these actions do not affect our current cost of borrowing, they could significantly affect our ability to obtain or maintain trade credit with suppliers, reduce our access to the debt markets and increase the cost of incurring additional debt. There can be no assurance that we will be able to maintain our current credit ratings. Should we be unable to maintain our current credit ratings, we could experience a reduction in credit terms, an increase in our borrowing costs or difficulty accessing capital markets. Such a development could adversely affect our financial condition and results of operations.

Item 2.Changes in Securities and Use of Proceeds

None.

Item 3.Defaults upon Senior Securities

~~None.~~The Company has defaulted on the Pre-petition Credit Facilities, which consist of the Term Loan with a principal balance of €254.8 million, the Revolving Credit Facility with a principal balance of $125 million and a €15 million synthetic letter of credit facility. The defaults resulted from our failure to comply with the financial covenants of the Pre-petition Credit Facilities for the period ending April 30, 2009 and the filing of the Chapter 11 proceedings.

The Company has also defaulted on the Senior Notes, which have a principal balance of €130 million. The defaults resulted from the filing of the Chapter 11 proceedings, and the failure to make the payment of interest due June 15, 2009.

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

None.

Item 6.Exhibits


10.17		Amendment No. 2, dated as of May 12, 2009, to Second Amended and Restated Credit Agreement, dated as of May 30, 2007, as amended by Amendment No. 1, dated as of January 30, 2009, by and among Hayes Lemmerz International, Inc., HLI Operating Company, Inc., Hayes Lemmerz Finance LLC—Luxembourg S.C.A., the Lenders named therein, Deutsche Bank AG, New York Branch, as DIP Administrative Agent, Deutsche Bank Securities Inc. and General Electric Capital Corporation, as Joint Book-Running Lead Managers, Joint Lead Arrangers, and Joint Syndication Agents for the DIP Facilities, and Deutsche Bank Securities Inc., as Documentation Agent for the DIP Facilities (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K, filed on May 29, 2009).

10.18		Second Amended and Restated Credit Agreement, dated as of May 30, 2007, as amended by Amendment No. 1, dated as of January 30, 2009, as further amended by Amendment No. 2, dated as of May 12, 2009, by and among HLI Operating Company, Inc., as U.S. Borrower, Hayes Lemmerz Finance LLC—Luxembourg S.C.A., as Luxembourg Borrower, Hayes Lemmerz International, Inc. and the other Debtors, each Lender party thereto, each DIP Lender named therein, Citicorp North America, Inc., as Pre-petition Administrative Agent, Deutsche Bank Trust Company Americas, as DIP Administrative Agent, Deutsche Bank Securities Inc., as Pre-petition Syndication Agent, Citicorp North America, Inc., as Pre-petition Documentation Agent, Citigroup Global Markets Inc. and Deutsche Bank Securities Inc., as Joint Book-Running Lead Managers and Joint Lead Arrangers for the Pre-petition Facilities, and Deutsche Bank Securities Inc. and General Electric Capital Corporation, as Joint Book-Running Lead Managers, Joint Lead Arrangers, and Syndication Agents (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K, filed on May 29, 2009).

10.19		Guaranty, dated as of May 12, 2009, by and between the Debtors named therein and Deutsche Bank AG, New York Branch, as DIP Administrative Agent (incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K, filed on May 29, 2009).

10.20		Depositary Agreement, dated as of May 12, 2009, by and among HLI Operating Company, Inc., as U.S. Borrower, Hayes Lemmerz Finance LLC—Luxembourg, S.C.A., as Luxembourg Borrower, Deutsche Bank AG, New York Branch, as DIP Administrative Agent, and Deutsche Bank Trust Company Americas, as Depositary (incorporated by reference to Exhibit 10.4 to our Current Report on Form 8-K, filed on May 29, 2009).

10.21		Amendment No. 3, dated as of May 19, 2009, to Second Amended and Restated Credit Agreement, dated as of May 30, 2007, as amended by Amendment No. 1, dated as of January 30, 2009, as further amended by Amendment No. 2, dated as of May 12, 2009, by and among Hayes Lemmerz International, Inc., HLI Operating Company, Inc., Hayes Lemmerz Finance LLC—Luxembourg S.C.A., the Lenders named therein, Deutsche Bank AG, New York Branch, as DIP Administrative Agent, Deutsche Bank Securities Inc. and General Electric Capital Corporation, as Joint Book-Running Lead Managers, Joint Lead Arrangers, and Joint Syndication Agents for the DIP Facilities, and Deutsche Bank Securities Inc., as Documentation Agent for the DIP Facilities (incorporated by reference to Exhibit 10.5 to our Current Report on Form 8-K, filed on May 29, 2009).

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

31.2		Certification Mark A. Brebberman, Vice President, Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

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

~~32.2~~		Certification of Mark A. Brebberman, Vice President, Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*


*		~~Filed electronically herewith.~~

~~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/ MARK A. BREBBERMAN~~
	~~Mark A. Brebberman~~
	~~Vice President and Chief Financial Officer~~

~~December 5, 2008~~

HAYES LEMMERZ INTERNATIONAL, INC.

10-Q EXHIBIT INDEX


10.17		Amendment No. 2, dated as of May 12, 2009, to Second Amended and Restated Credit Agreement, dated as of May 30, 2007, as amended by Amendment No. 1, dated as of January 30, 2009, by and among Hayes Lemmerz International, Inc., HLI Operating Company, Inc., Hayes Lemmerz Finance LLC—Luxembourg S.C.A., the Lenders named therein, Deutsche Bank AG, New York Branch, as DIP Administrative Agent, Deutsche Bank Securities Inc. and General Electric Capital Corporation, as Joint Book-Running Lead Managers, Joint Lead Arrangers, and Joint Syndication Agents for the DIP Facilities, and Deutsche Bank Securities Inc., as Documentation Agent for the DIP Facilities (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K, filed on May 29, 2009).

10.18		Second Amended and Restated Credit Agreement, dated as of May 30, 2007, as amended by Amendment No. 1, dated as of January 30, 2009, as further amended by Amendment No. 2, dated as of May 12, 2009, by and among HLI Operating Company, Inc., as U.S. Borrower, Hayes Lemmerz Finance LLC—Luxembourg S.C.A., as Luxembourg Borrower, Hayes Lemmerz International, Inc. and the other Debtors, each Lender party thereto, each DIP Lender named therein, Citicorp North America, Inc., as Pre-petition Administrative Agent, Deutsche Bank Trust Company Americas, as DIP Administrative Agent, Deutsche Bank Securities Inc., as Pre-petition Syndication Agent, Citicorp North America, Inc., as Pre-petition Documentation Agent, Citigroup Global Markets Inc. and Deutsche Bank Securities Inc., as Joint Book-Running Lead Managers and Joint Lead Arrangers for the Pre-petition Facilities, and Deutsche Bank Securities Inc. and General Electric Capital Corporation, as Joint Book-Running Lead Managers, Joint Lead Arrangers, and Syndication Agents (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K, filed on May 29, 2009).

10.19		Guaranty, dated as of May 12, 2009, by and between the Debtors named therein and Deutsche Bank AG, New York Branch, as DIP Administrative Agent (incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K, filed on May 29, 2009).

10.20		Depositary Agreement, dated as of May 12, 2009, by and among HLI Operating Company, Inc., as U.S. Borrower, Hayes Lemmerz Finance LLC—Luxembourg, S.C.A., as Luxembourg Borrower, Deutsche Bank AG, New York Branch, as DIP Administrative Agent, and Deutsche Bank Trust Company Americas, as Depositary (incorporated by reference to Exhibit 10.4 to our Current Report on Form 8-K, filed on May 29, 2009).

10.21		Amendment No. 3, dated as of May 19, 2009, to Second Amended and Restated Credit Agreement, dated as of May 30, 2007, as amended by Amendment No. 1, dated as of January 30, 2009, as further amended by Amendment No. 2, dated as of May 12, 2009, by and among Hayes Lemmerz International, Inc., HLI Operating Company, Inc., Hayes Lemmerz Finance LLC—Luxembourg S.C.A., the Lenders named therein, Deutsche Bank AG, New York Branch, as DIP Administrative Agent, Deutsche Bank Securities Inc. and General Electric Capital Corporation, as Joint Book-Running Lead Managers, Joint Lead Arrangers, and Joint Syndication Agents for the DIP Facilities, and Deutsche Bank Securities Inc., as Documentation Agent for the DIP Facilities (incorporated by reference to Exhibit 10.5 to our Current Report on Form 8-K, filed on May 29, 2009).

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

31.2		Certification Mark A. Brebberman, Vice President, Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

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

32.2		Certification of Mark A. Brebberman, Vice President, Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*


*		Filed electronically herewith.


	Three Months Ended October 31, 2007						Three Months Ended April 30, 2008
	Automotive						Automotive
	Wheels		Other		Total		Wheels		Other		Total
Facility closure costs	$	0.1	$	—	$	0.1	$	0.3	$	0.1	$	0.4
Impairment of facility, machinery, and equipment		48.9		0.9		49.8		2.7		—		2.7
Severance and other restructuring costs		—		0.1		0.1		0.1		0.1		0.2

Total	$	49.0	$	1.0	$	50.0	$	3.1	$	0.2	$	3.3


	Nine Months Ended October 31, 2008
	Automotive
	Wheels		Other		Total
Facility closure costs	$	1.7	$	0.3	$	2.0
Impairment of facility, machinery, and equipment		7.8		—		7.8
Severance and other restructuring costs		1.9		0.1		2.0

Total	$	11.4	$	0.4	$	11.8


	Nine Months Ended October 31, 2007
	Automotive
	Wheels		Other		Total
Facility closure costs	$	2.9	$	0.1	$	3.0
Impairment of facility, machinery, and equipment		49.4		0.9		50.3
Severance and other restructuring costs		—		0.7		0.7

Total	$	52.3	$	1.7	$	54.0


					Cash
					Payments and					Three Months Ended April 30, 2009
					Effects of					January 31,				Cash Payments and			April 30,
	January 31,				Foreign			October 31,		2009				Effects of Foreign			2009
	2008 Accrual		Expense		Currency			2008 Accrual		Accrual		Expense		Currency			Accrual
Facility closure costs	$	—	$	2.0	$	(1.3	)	$	0.7	$	0.2	$	0.7	$	(0.7	)	$	0.2
Severance and other restructuring costs		0.2		2.0		(0.8	)		1.4		4.0		2.9		(3.2	)		3.7

Total	$	0.2	$	4.0	$	(2.1	)	$	2.1	$	4.2	$	3.6	$	(3.9	)	$	3.9


	As of April 30, 2009
	Automotive
	Wheels		Other			Total
Total assets	$	1,156.1	$	(132.0	)	$	1,024.1


	As of January 31, 2009
	Automotive
	Wheels		Other			Total
Total assets	$	1,171.8	$	(75.6	)	$	1,096.2


	As of October 31, 2008
	Automotive
	Wheels		Other			Total
Total assets	$	1,636.3	$	(146.4	)	$	1,489.9


	As of January 31, 2008
	Automotive
	Wheels		Other			Total
Total assets	$	1,956.6	$	(150.7	)	$	1,805.9


	Payment Due by Period
	Less than 1
	Year		2-3 Years		4-5 Years		After 5 Years		Total
Short-term borrowings	$	46.4	$	—	$	—	$	—	$	46.4
Long-term debt		4.2		7.9		22.8		488.4		523.3
Operating leases		3.9		2.1		0.6		0.1		6.7
Capital expenditures		11.9		—		—		—		11.9
United States pension contribution		4.4		7.4		4.2		—		16.0
Tax reserves		—		0.1		—		4.7		4.8

Total obligations	$	70.8	$	17.5	$	27.6	$	493.2	$	609.1


Interest	$	16.1
Taxes		6.6
International pension and other post-retirement benefits funding		5.7

~~31.1~~		Certification of Curtis J. Clawson, Chairman of the Board, President, and Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

~~31.2~~		Certification Mark A. Brebberman, Vice President, Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

~~32.1~~		Certification of Curtis J. Clawson, Chairman of the Board, President, and Chief Executive Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

32.2		Certification of Mark A. Brebberman, Vice President, Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*


		HAYES LEMMERZ INTERNATIONAL, INC.

		/s/MARK A. BREBBERMAN

		Mark A. Brebberman
		Vice President and Chief Financial Officer