e11vk
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
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ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 |
For the fiscal year ended December 31, 2005
OR
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TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 |
For the transition period from to
Commission file number 1-12733
Tower Automotive Products Employee 401(k) Savings Plan
Tower Automotive, Inc.
27175 Haggerty Road
Novi, Michigan 48377
Tower Automotive Products Employee 401(k) Savings Plan
Financial Report
December 31, 2005
Tower Automotive Products
Employee 401(k) Savings Plan
Contents
Report of Independent Registered Public Accounting Firm
To the Administrative Committee
Tower Automotive Products Employee
401(k) Savings Plan
Novi, Michigan
We have audited the accompanying statement of net assets available for benefits of the Tower
Automotive Products Employee 401(k) Savings Plan as of December 31, 2005 and 2004, and the related
statement of changes in net assets available for benefits for the years then ended. These
financial statements are the responsibility of the Plan’s management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material
respects, the net assets available for benefits of the Tower Automotive Products Employee 401(k)
Savings Plan as of December 31, 2005 and 2004, and the changes in net assets available for benefits
for the years then ended in conformity with accounting principles generally accepted in the United
States of America.
Our audits were performed for the purpose of forming an opinion on the financial statements taken
as a whole. The supplemental schedule of assets held at end of year as of December 31, 2005 is
presented for the purpose of additional analysis and is not a required part of the basic financial
statements but is supplementary information required by the Department of Labor’s Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974.
The supplemental schedule is the responsibility of the Plan’s management. The supplemental
schedule has been subjected to the auditing procedures applied in the audits of the basic financial
statements and, in our opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Plante & Moran, PLLC
Grand Rapids, Michigan
May 19, 2006
Tower Automotive Products
Employee 401(k) Savings Plan
Statement of Net Assets Available for Benefits
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December 31 |
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2005 |
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2004 |
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Assets |
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|
|
|
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Participant-directed investments: |
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|
|
|
|
|
|
|
|
|
|
|
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|
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Money market fund |
|
$ |
22,365 |
|
|
$ |
110,972 |
|
|
|
|
|
|
|
|
|
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Pooled separate account |
|
|
22,084,367 |
|
|
|
23,794,745 |
|
|
|
|
|
|
|
|
|
|
Mutual funds |
|
|
30,566,799 |
|
|
|
34,065,097 |
|
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|
|
|
|
|
|
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Tower Automotive, Inc. common stock |
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55,295 |
|
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2,085,481 |
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Participant loans |
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404,453 |
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712,164 |
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Total participant-directed investments |
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53,133,279 |
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60,768,459 |
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Employee contributions receivable |
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8,172 |
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25,100 |
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|
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Net Assets Available for Benefits |
|
$ |
53,141,451 |
|
|
$ |
60,793,559 |
|
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|
|
|
|
|
|
See Notes to Financial Statements.
2
Tower Automotive Products
Employee 401(k) Savings Plan
Statement of Changes in Net Assets Available for Benefits
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Year Ended December 31 |
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2005 |
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2004 |
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Additions to Net Assets Available for Benefits |
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Investment income: |
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Interest and dividends |
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$ |
1,463,962 |
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$ |
547,703 |
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Net appreciation (depreciation) in fair value
of investments in: |
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Mutual funds |
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667,352 |
|
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2,701,019 |
|
|
|
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|
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Employer common stock |
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(2,165,024 |
) |
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(2,616,265 |
) |
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Pooled separate account |
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878,863 |
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956,855 |
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Total investment income |
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845,153 |
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1,589,312 |
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Contributions: |
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|
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Employee |
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1,429,274 |
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2,108,519 |
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Rollover |
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1,952 |
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2,839 |
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|
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|
|
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Total contributions |
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1,431,226 |
|
|
|
2,111,358 |
|
|
|
|
|
|
|
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|
|
|
|
|
|
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Total additions |
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2,276,379 |
|
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3,700,670 |
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Deductions from Net Assets Available for Benefits |
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Benefits paid directly to participants |
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9,917,870 |
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9,348,155 |
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Administrative expenses |
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10,617 |
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87,286 |
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Total deductions |
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9,928,487 |
|
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9,435,441 |
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Net Decrease in Net Assets |
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(7,652,108 |
) |
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(5,734,771 |
) |
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Net Assets Available for Benefits |
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Beginning of year |
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60,793,559 |
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66,528,330 |
|
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|
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|
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End of year |
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$ |
53,141,451 |
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|
$ |
60,793,559 |
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|
|
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See Notes to Financial Statements.
3
Tower Automotive Products
Employee 401(k) Savings Plan
Notes to Financial Statements
December 31, 2005 and 2004
Note 1 — Description of the Plan
The following description of the Tower Automotive Products Employee 401(k) Savings
Plan (the “Plan”) provides only general information. Participants should refer to the
plan agreement for a more complete description of the Plan’s provisions.
General
— The Plan is a defined contribution profit-sharing plan covering certain union
employees of Tower Automotive Products Company, Inc. (the “Company”). The Plan is
sponsored by R.J. Tower Corporation (the “Sponsor”), the parent of the Company.
Eligible employees can become participants in the Plan at any time after completion of
a collectively bargained probationary period. The Plan is subject to the provisions of
the Employee Retirement Income Security Act of 1974 (ERISA).
On February 2, 2005, Tower Automotive, Inc. (the Parent of the Sponsor) and its US
subsidiaries, including the Company and the Sponsor (collectively “the Debtors”), filed
a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code
in the United States Bankruptcy Court Southern District of New York. The Debtors are
operating their businesses as debtors-in-possession pursuant to the Bankruptcy Code.
An official committee of unsecured creditors has been appointed.
The Debtors have requested that the Bankruptcy Court approve payment of certain
pre-petition liabilities including employee wages and benefits. Since the filing, all
orders sufficient to enable the Debtors to conduct normal business activities,
including the approval of the Debtors’ financing have been entered by the Bankruptcy
Court. While the Debtors are subject to Chapter 11, all transactions of the Debtors
outside the ordinary course of business will require the prior approval of the
Bankruptcy Court.
It is unclear what impact, if any, this will have on the Company’s workforce and the
Plan. These financial statements do not include any adjustments or disclosure
appropriate for a terminating plan as the Sponsor has no intention nor has taken any
actions necessary to terminate the Plan.
Contributions
— Participants may elect to make contributions to the Plan through
payroll deductions of 1 percent to 90 percent of the participant’s compensation, as
defined. The Plan also allows participants to transfer funds from other qualified
4
Tower Automotive Products
Employee 401(k) Savings Plan
Notes to Financial Statements
December 31, 2005 and 2004
plans into the Plan. There were no transfers during the plan year ended December 31,
2005 or December 31, 2004.
The Company may make a matching contribution based on the participant’s contributions.
This matching contribution amount is determined by a collective bargaining agreement
with the covered union. There was no such contribution for 2005 and 2004.
Plan
Operations — The Company appointed New York Life Trust Company to act as trustee
of the Plan. The Company has also appointed a committee of employees of the Company to
act as plan administrator. The trustee is responsible for holding the investment
assets of the Plan, executing investment transactions and making distributions to
participants. The plan administrator interprets and communicates the provisions of the
Plan, ensures that all government and participant reporting requirements are fulfilled,
and approves certain distributions from the Plan to participants.
Participant
Accounts —Individual accounts are maintained for each participant, with
benefits limited to the amount contributed to the participant’s account plus or minus
any allocation of income,
expenses, gains, or losses. Participants direct the investment of their accounts among
various investment options offered by the Plan. Allocations to participant accounts
are based on compensation or account balances, as specified by the plan agreement. The
benefit to which a participant is entitled is the benefit that can be provided from the
participant’s vested account.
Vesting
— Participants are immediately vested in their voluntary contributions
plus actual earnings thereon. Vesting in Company-matching contribution accounts is
based on years of continuous service, as follows:
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Vesting |
| Years of Service |
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Percentage |
Less than 2 years |
|
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0 |
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2 years |
|
|
40 |
|
3 years |
|
|
60 |
|
4 years |
|
|
80 |
|
5 years or more |
|
|
100 |
|
5
Tower Automotive Products
Employee 401(k) Savings Plan
Notes to Financial Statements
December 31, 2005 and 2004
Loans
to Participants — Under certain conditions, a participant may obtain a loan from
the Plan. A participant’s loan cannot exceed the lesser of $50,000 or one-half of the
participant’s non-forfeitable interest in the Plan. The loan will bear a reasonable
interest rate, be adequately secured, and not exceed a period of five years. Principal
and interest is paid ratably through payroll deductions.
Payment
of Benefits — On termination of service, a participant may elect to receive
either a lump-sum amount equal to the value of the participant’s vested interest in his
or her account, or periodic payments, at least annually, of equal amounts of at least
$600 over a period not to exceed 15 years. In-service withdrawals are also allowed
under the terms of the Plan under certain circumstances.
Forfeited
Accounts — Forfeited balances of terminated participants’ non-vested accounts
are used to pay the administrative expenses of the Plan for the plan year in which the
forfeiture occurs or the following plan year.
Note 2 — Summary of Accounting Policies
Assets
and Liabilities — Accounting policies relative to the basis of recording
assets and liabilities conform to Department of Labor guidelines. The fair value of
the pooled separate account is based on the quoted market prices of the underlying
assets. Money market and mutual funds and shares of common stock are valued at market
value as determined by quoted market prices. Participant loans are valued at their
outstanding balance, which approximates fair value.
The underlying asset of the pooled separate account is the Stable Value Account which
is provided by New York Life Insurance Company. The Stable Value Account is valued at
contract value, which approximates fair value due to the short maturity of the
contract. Contract value represents investments at cost plus accrued interest income
less amounts withdrawn to pay benefits.
The Stable Value Account is invested mostly in collateralized mortgage obligations,
corporate and agency bonds, and mortgage backed securities.
Amounts contributed to the Stable Value Account earn a guaranteed interest rate as
determined by New York Life Insurance Company and is guaranteed to be no less than 0
percent before any deduction for expenses. During the plan years ended December 31,
2005 and 2004, the crediting interest rate on the Stable Value Account was 4.43 percent
and 4.38 percent, respectively.
6
Tower Automotive Products
Employee 401(k) Savings Plan
Notes to Financial Statements
December 31, 2005 and 2004
Benefits
Paid — Benefits are recorded when paid.
Administrative
Expenses — Certain administrative expenses and withdrawal fees charged
by the Plan’s trustee are paid out of plan assets. All other expenses incurred in
conjunction with the Plan are paid by the Company.
Use
of Estimates — The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America requires
management 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
financial statements and the reported amounts of additions and deductions during the
reporting period. Actual results could differ from those estimates.
Risks
and Uncertainties — The Plan invests in various investment securities.
Investment securities are exposed to various risks, such as interest rate, market and
credit. Due to the level of risk associated with certain investment securities, it is
at least reasonably possible that changes in the values of investment securities will
occur in the near term and that such changes could materially affect participants’
account balances and the amounts reported in the statement of net assets available for
benefits.
New
Accounting Pronouncements — In December 2005, the Financial Accounting Standards
Board (FASB) issued FASB Staff Position AAG INV-1 and SOP 94-4-1, Reporting of Fully
Benefit-Responsive Investment Contracts Held by Certain Investment Companies Subject to
the AICPA Investment Company Guide and Defined-Contribution Health and Welfare and
Pension Plans (FSP). This FSP makes the definition of benefit-responsive more
restrictive so that certain investment contracts currently reported at contract value
may be reported at fair value. Management has not yet determined the impact this
standard, which is effective for the plan year ending December 31, 2006, will have on
the Plan’s financial statements.
Note 3 — Investments
The fair value of significant individual investments at December 31, 2005 and 2004
is as follows:
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|
|
| |
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2005 |
|
2004 |
Pooled separate account — New York Life
|
|
|
|
|
|
|
|
|
Anchor Account |
|
$ |
22,084,367 |
|
|
$ |
23,794,745 |
|
Mutual funds: |
|
|
|
|
|
|
|
|
Franklin Balance Sheet Investment Fund |
|
|
3,248,556 |
|
|
|
2,852,271 |
|
AIM Basic Value Fund |
|
|
3,029,216 |
|
|
|
3,675,693 |
|
MainStay
S&P 500 Index Fund Class A |
|
|
3,714,515 |
|
|
|
4,677,493 |
|
AIM Small Cap Growth Fund |
|
|
6,867,691 |
|
|
|
7,882,279 |
|
Goldman Sachs Mid Cap Value Fund Class A |
|
|
2,736,176 |
|
|
|
2,000,943 |
|
7
Tower Automotive Products
Employee 401(k) Savings Plan
Notes to Financial Statements
December 31, 2005 and 2004
Note 4 — Related Party Transactions
Certain plan investments are shares of a pooled separate account, mutual funds,
and a money market fund managed by New York Life Trust Company. New York Life Trust
Company is the trustee, as defined by the Plan; therefore, these transactions qualify
as party-in-interest transactions.
Until February 7, 2005, participants could elect to invest in Tower Automotive, Inc.
common stock. Effective February 7, 2005, additional investments in Tower Automotive,
Inc. common stock were suspended. Tower Automotive, Inc. is the parent of the Sponsor
of the Plan.
Note 5 — Plan Termination
Although it has not expressed any intent to do so, the Company has the right under
the Plan to discontinue its contributions at any time and to terminate the Plan subject
to the provisions of ERISA. In the event of termination, participants will become 100
percent vested and amounts credited to participants’ accounts will be distributed to
participants in accordance with the Plan’s provisions.
The Company has closed several of its business units associated with the Plan between
2004 and 2006 as part of its operational restructuring to reduce excess capacity and
improve operational efficiency. Due to these closures, a partial plan termination has
occurred. All participants affected by these closures will become 100 percent vested
in their account balances.
Note 6 — Tax Status
The Plan obtained its latest determination letter dated November 6, 2001, in which
the Internal Revenue Service stated that the Plan, as then designed, was in compliance
with the applicable requirements of the Internal Revenue Code. The Plan has been
amended since receiving the determination letter. However, after consulting with legal
counsel, the plan administrator believes that the Plan is currently designed and being
operated in compliance with the applicable requirements of the Internal Revenue Code.
Therefore, no provision for income taxes has been included in the Plan’s financial
statements.
Note 7 — Reconciliation with Form 5500
The following is a reconciliation of net assets available for plan benefits per
the financial statements to Form 5500 at December 31, 2005 and 2004:
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|
|
|
|
|
|
|
| |
|
2005 |
|
|
2004 |
|
Net assets available for benefits per financial
Statements |
|
$ |
53,141,451 |
|
|
$ |
60,793,559 |
|
Less contributions receivable at December 31 |
|
|
(8,172 |
) |
|
|
(25,100 |
) |
|
|
|
|
|
|
|
Net assets available for
benefits per Form 5500 |
|
$ |
53,133,279 |
|
|
$ |
60,768,459 |
|
|
|
|
|
|
|
|
8
Tower Automotive Products
Employee 401(k) Savings Plan
Notes to Financial Statements
December 31, 2005 and 2004
The following is a reconciliation of employee contributions per the financial
statements to Form 5500 for the year ended December 31, 2005:
| |
|
|
|
|
Employee contributions per financial statements |
|
$ |
1,429,274 |
|
Less employee contributions receivable at December 31, 2005 |
|
|
(8,172 |
) |
Plus contributions receivable at December 31, 2004 |
|
|
25,100 |
|
|
|
|
|
| |
Employee contributions per Form 5500 |
|
$ |
1,446,202 |
|
|
|
|
|
The following is a reconciliation of employee contributions per the financial
statements to Form 5500 for the year ended December 31, 2004:
| |
|
|
|
|
Employee contributions per financial statements |
|
$ |
2,108,519 |
|
Less employee contributions receivable at December 31, 2004 |
|
|
(25,100 |
) |
Plus contributions receivable at December 31, 2003 |
|
|
38,192 |
|
|
|
|
|
| |
Employee contributions per Form 5500 |
|
$ |
2,121,611 |
|
|
|
|
|
Contributions made after year-end were accrued as receivables on the financial
statements as of December 31. Contributions are recognized when received on Form 5500.
Note 8
— Subsequent Events
Substantially all participants in the Plan were employed at the company’s
Milwaukee, WI, manufacturing facility. On March 31, 2006, all manufacturing operations
at the Milwaukee facility ceased and substantially all participants were laid off.
9
Tower Automotive Products
Employee 401(k) Savings Plan
Schedule of Assets Held at End of Year
Form 5500, Schedule H, Item 4i
EIN 38-1521832, Plan 014
December 31, 2005
| |
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|
| (a)(b) |
|
|
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|
|
|
| Identity of Issuer, |
|
(c) |
|
|
|
|
|
| Borrower, |
|
Description of Investment (Including Maturity |
|
|
|
(e) |
|
| Lessor, or Similar |
|
Date, |
|
(d) |
|
Current |
|
| Party |
|
Rate of Interest, Par, or Maturity Value) |
|
Cost |
|
Value |
|
| New York Life Trust |
|
Pooled separate account — New York Life Anchor |
|
|
|
|
|
|
| Company |
|
Account |
|
* |
|
$ |
22,084,367 |
|
| |
|
|
|
|
|
|
|
|
| |
|
Mutual funds: |
|
|
|
|
|
|
| |
|
PIMCO Total Return Fund |
|
* |
|
|
2,223,291 |
|
| |
|
AIM Basic Value Fund |
|
* |
|
|
3,029,216 |
|
| |
|
MainStay Income Manager Fund Class A |
|
* |
|
|
1,458,667 |
|
| |
|
Franklin Balance Sheet Investment Fund |
|
* |
|
|
3,248,556 |
|
| |
|
MainStay A MAP Fund |
|
* |
|
|
638,472 |
|
| |
|
MainStay
S&P 500 Index Fund Class A |
|
* |
|
|
3,714,515 |
|
| |
|
AIM Small Cap Growth Fund |
|
* |
|
|
6,867,691 |
|
| |
|
Federated Capital Appreciation Fund Class A |
|
* |
|
|
2,445,235 |
|
| |
|
Fidelity Advisor Value Strategies Fund T Shares |
|
* |
|
|
1,109,838 |
|
| |
|
Artisan International Fund |
|
* |
|
|
1,462,614 |
|
| |
|
Oppenheimer Capital Appreciation Fund |
|
* |
|
|
429,575 |
|
| |
|
Goldman Sachs Mid Cap Value Fund Class A |
|
* |
|
|
2,736,176 |
|
| |
|
Artisan Mid Cap Fund |
|
* |
|
|
1,202,953 |
|
| |
|
|
|
|
|
|
|
|
| |
|
Money market fund — MainStay Cash Reserves Fund |
|
* |
|
|
22,365 |
|
| |
|
|
|
|
|
|
|
|
| Tower Automotive, Inc. |
|
Common stock — Tower Automotive, Inc. |
|
* |
|
|
55,295 |
|
| |
|
|
|
|
|
|
|
|
| Participants |
|
Participant loans — Bearing interest at rates
ranging from 5.00 percent to 10.50 percent |
|
— |
|
|
404,453 |
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
Total investments |
|
|
|
$ |
53,133,279 |
|
| |
|
|
|
|
|
|
|
|
|
|
| * |
|
Cost information not required |
10
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or
other persons who administer the employee benefit plan) have duly caused this annual report to be
signed on its behalf by the undersigned hereunto duly authorized.
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Tower Automotive Products Employee 401(k) Savings Plan
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/s/Christopher T. Hatto |
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| DATE June 20, 2006 |
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Christopher T. Hatto, Corporate Controller and
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Chief Accounting Officer of Tower Automotive, Inc.
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EXHIBIT INDEX
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| Exhibit No. |
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Description |
23
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Consent of Independent Registered Public Accounting Firm |