e11vk
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
| |
|
|
| þ |
|
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 |
For the fiscal year ended December 31, 2005
OR
| |
|
|
| o |
|
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 Retirement Plan
Tower Automotive, Inc.
27175 Haggerty Road
Novi, Michigan 48377
Tower Automotive
Retirement Plan
Financial Report
December 31, 2005
Tower Automotive Retirement Plan
Report of Independent Registered Public Accounting Firm
To the Administrative Committee
Tower Automotive Retirement Plan
Novi, Michigan
We have audited the accompanying statement of net assets available for benefits of the Tower
Automotive Retirement 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 Retirement 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.
Grand Rapids, Michigan
May 19, 2006
1
Tower Automotive Retirement Plan
Statement of Net Assets Available for Benefits
| |
|
|
|
|
|
|
|
|
| |
|
December 31 |
|
| |
|
2005 |
|
|
2004 |
|
| |
|
|
Assets |
|
|
|
|
|
|
|
|
Participant-directed investments: |
|
|
|
|
|
|
|
|
| |
Money market fund |
|
$ |
26,667 |
|
|
$ |
336,927 |
|
| |
Mutual funds |
|
|
90,381,828 |
|
|
|
94,327,625 |
|
| |
Tower Automotive, Inc. common stock |
|
|
167,781 |
|
|
|
6,202,604 |
|
| |
Pooled separate account |
|
|
24,240,536 |
|
|
|
24,483,881 |
|
| |
Participant loans |
|
|
3,799,168 |
|
|
|
3,814,646 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total participant-directed investments |
|
|
118,615,980 |
|
|
|
129,165,683 |
|
|
|
|
|
|
|
|
|
|
Receivables: |
|
|
|
|
|
|
|
|
| |
Employer contributions |
|
|
10,489 |
|
|
|
131,066 |
|
| |
Employee contributions |
|
|
195,106 |
|
|
|
238,184 |
|
|
|
|
|
|
|
|
| |
Total receivables |
|
|
205,595 |
|
|
|
369,250 |
|
|
|
|
|
|
|
|
| |
Net Assets Available for Benefits |
|
$ |
118,821,575 |
|
|
$ |
129,534,933 |
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
2
Tower Automotive Retirement Plan
Statement of Changes in Net Assets Available for Benefits
| |
|
|
|
|
|
|
|
|
| |
|
Year Ended December 31 |
|
| |
|
2005 |
|
|
2004 |
|
| |
|
|
Additions to Net Assets Available for Benefits |
|
|
|
|
|
|
|
|
Investment income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and dividends |
|
$ |
3,730,285 |
|
|
$ |
1,599,615 |
|
Net appreciation (depreciation) in fair value
of investments in: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mutual funds |
|
|
2,298,478 |
|
|
|
7,732,854 |
|
|
|
|
|
|
|
|
|
|
Pooled separate account |
|
|
946,760 |
|
|
|
969,584 |
|
Tower Automotive, Inc.
common stock |
|
|
(6,030,239 |
) |
|
|
(7,644,763 |
) |
|
|
|
|
|
|
|
| |
Total investment income |
|
|
945,284 |
|
|
|
2,657,290 |
|
|
|
|
|
|
|
|
|
|
Contributions: |
|
|
|
|
|
|
|
|
| |
Employer |
|
|
2,050,732 |
|
|
|
3,738,605 |
|
| |
Employee |
|
|
7,406,751 |
|
|
|
8,272,117 |
|
| |
Rollover |
|
|
361,587 |
|
|
|
495,181 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total contributions |
|
|
9,819,070 |
|
|
|
12,505,903 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total additions |
|
|
10,764,354 |
|
|
|
15,163,193 |
|
|
|
|
|
|
|
|
|
|
Deductions from Net Assets Available for Benefits |
|
|
|
|
|
|
|
|
| |
Benefits paid directly to participants |
|
|
21,448,278 |
|
|
|
14,222,287 |
|
| |
Administrative expenses |
|
|
44,898 |
|
|
|
139,760 |
|
|
|
|
|
|
|
|
| |
Total deductions |
|
|
21,493,176 |
|
|
|
14,362,047 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Decrease)/Increase in Net Assets Prior to Transfers |
|
|
(10,728,822 |
) |
|
|
801,146 |
|
| |
Transfers (Note 1) |
|
|
15,464 |
|
|
|
77,911 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Decrease)/Increase in Net Assets |
|
|
(10,713,358 |
) |
|
|
879,057 |
|
| |
Net Assets Available for Benefits |
|
|
|
|
|
|
|
|
| |
Beginning of year |
|
|
129,534,933 |
|
|
|
128,655,876 |
|
|
|
|
|
|
|
|
| |
End of year |
|
$ |
118,821,575 |
|
|
$ |
129,534,933 |
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
3
Tower Automotive Retirement Plan
Note 1 — Description of the Plan
The following description of the Tower Automotive Retirement 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 and 401(k) plan covering
substantially all nonunion employees and certain union employees of R. J. Tower
Corporation and its subsidiaries (the “Company”), the Plan’s sponsor. Eligible
employees can become participants in the 401(k) portion of the Plan on the first day
of the month following the completion of 60 days of employment and attaining age 18.
Upon participation in the 401(k) portion of the Plan, employees become eligible to
receive discretionary matching contributions from the Company. Employees become
eligible to receive discretionary annual profit-sharing contributions from the Company
on the first day of the month following the completion of one year of service with at
least 1,000 total hours. 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 in the plan agreement. The Plan also allows
4
Tower Automotive Retirement Plan
participants to transfer funds from other qualified plans into the Plan. During the
plan years ended December 31, 2005 and 2004, $15,464 and $77,911, respectively, was
transferred from other Company qualified plans into the Plan.
The Company makes a discretionary matching contribution based on the participant’s
contribution. This matching contribution amount is determined annually. In 2005 and
2004, the Company elected to make safe harbor matching contributions of 100 percent of
the first 3 percent of each employee’s eligible wages deferred, plus 50 percent of the
next 2 percent of each employee’s eligible wages deferred. The Company suspended
matching contributions to the Plan on July 1, 2005 except for matching contributions
made to unionized colleagues.
The Company also may make an annual discretionary profit-sharing contribution in an
amount determined by the Board of Directors of the Company. No discretionary
contributions were made in 2004 or 2005.
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’ contributions to the Plan and employer-matching contributions
are always fully vested and non-forfeitable. Participants become fully vested in the
Company’s discretionary profit-sharing contributions after the completion of three
years of service, as defined in the Plan.
5
Tower Automotive Retirement Plan
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 (15 years
for purchase of a primary residence). Principal and interest is paid ratably through
payroll deductions.
Payment of Benefits — Upon termination of service, a participant may receive the value
of the vested interest in his or her account as a lump-sum distribution. In-service
withdrawals are also allowed under the terms of the Plan under certain circumstances.
Forfeited Accounts — Forfeited balances of terminated participants’ nonvested 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.
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.
Investments in 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 value, 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.
Note 2 — Summary of Accounting Policies
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 Retirement Plan
Benefits
Paid — Benefits are recorded when paid.
Administrative Expenses — Certain administrative expenses and withdrawal fees charged
by the 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.
7
Tower Automotive Retirement Plan
Note 3 — Investments
The fair value of significant individual investments at December 31, 2005 and
2004, is as follows:
| |
|
|
|
|
|
|
|
|
| |
|
2005 |
|
2004 |
Pooled separate account — New York |
|
|
|
|
|
|
|
|
Life Anchor Account |
|
$ |
24,240,536 |
|
|
$ |
24,483,881 |
|
Mutual funds: |
|
|
|
|
|
|
|
|
PIMCO Total Return Fund |
|
|
8,434,568 |
|
|
|
9,028,363 |
|
AIM Basic Value Fund |
|
|
11,201,679 |
|
|
|
12,593,694 |
|
MainStay
S&P 500 Index Fund |
|
|
11,183,307 |
|
|
|
13,347,863 |
|
AIM Small Cap Growth Fund |
|
|
7,816,626 |
|
|
|
8,994,769 |
|
Federated Capital Appreciation Fund |
|
|
7,626,947 |
|
|
|
8,866,367 |
|
Artisan International Fund |
|
|
8,479,193 |
|
|
|
7,460,347 |
|
Franklin Balance Sheet Investment Fund |
|
|
6,952,237 |
|
|
|
5,932,828 |
|
Goldman Sachs Mid Cap Value Fund |
|
|
7,596,067 |
|
|
|
5,270,068 |
|
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.
8
Tower Automotive Retirement Plan
Note 6 — Tax Status
The Plan obtained its latest determination letter dated March 22, 2002, in which
the Internal Revenue Service stated that the Plan, as then designed, and was in
compliance with the applicable requirements of the Internal Revenue Code. The Plan
has been amended and restated since receiving the determination letter. However,
after consultation 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 benefits per the
financial statements to Form 5500 at December 31, 2005 and 2004:
| |
|
|
|
|
|
|
|
|
| |
|
2005 |
|
|
2004 |
|
Net assets available for benefits per financial
Statements |
|
$ |
118,821,575 |
|
|
$ |
129,534,933 |
|
Less contributions receivable at December 31 |
|
|
(205,595 |
) |
|
|
(369,250 |
) |
|
|
|
|
|
|
|
Net assets available for
benefits per Form 5500 |
|
$ |
118,615,980 |
|
|
$ |
129,165,683 |
|
|
|
|
|
|
|
|
The following is a reconciliation of contributions per the financial statements to
Form 5500 for the year ended December 31, 2005:
| |
|
|
|
|
|
|
|
|
| |
|
Employee |
|
|
Employer |
|
Contributions per financial statements |
|
$ |
7,406,751 |
|
|
$ |
2,050,732 |
|
Less contributions receivable at December 31, 2005 |
|
|
(195,106 |
) |
|
|
(10,489 |
) |
Plus contributions receivable at December 31, 2004 |
|
|
238,184 |
|
|
|
131,066 |
|
|
|
|
|
|
|
|
Contributions per
Form 5500 |
|
$ |
7,449,829 |
|
|
$ |
2,171,309 |
|
|
|
|
|
|
|
|
The following is a reconciliation of contributions per the financial statements
to Form 5500 for the year ended December 31, 2004:
| |
|
|
|
|
|
|
|
|
| |
|
Employee |
|
|
Employer |
|
Contributions per financial statements |
|
$ |
8,272,117 |
|
|
$ |
3,738,605 |
|
Less contributions receivable at December 31, 2004 |
|
|
(238,184 |
) |
|
|
(131,066 |
) |
Plus contributions receivable at December 31, 2003 |
|
|
300,594 |
|
|
|
3,854,737 |
|
|
|
|
|
|
|
|
Contributions per
Form 5500 |
|
$ |
8,334,527 |
|
|
$ |
7,462,276 |
|
|
|
|
|
|
|
|
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.
9
Schedule of Assets Held at End of Year
Form 5500, Schedule H, Item 4i
EIN 38-1521832, Plan 002
December 31, 2005
| |
|
|
|
|
|
|
|
|
|
|
|
|
| (a)(b) |
|
|
|
|
|
|
|
|
|
|
| Identity of Issuer, |
|
|
|
|
|
|
|
|
|
|
| Borrower, |
|
|
(c) |
|
|
|
|
|
(e) |
|
| Lessor, or Similar |
|
|
Description of Investment (Including Maturity 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 |
|
|
* |
|
|
$ |
24,240,536 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
Mutual funds: |
|
|
|
|
|
|
|
|
| |
|
|
|
PIMCO Total Return Fund |
|
|
* |
|
|
|
8,434,568 |
|
| |
|
|
|
MainStay Asset Manager Fund |
|
|
* |
|
|
|
5,412,196 |
|
| |
|
|
|
AIM Basic Value Fund |
|
|
* |
|
|
|
11,201,679 |
|
| |
|
|
|
MainStay
S&P 500 Index Fund |
|
|
* |
|
|
|
11,183,307 |
|
| |
|
|
|
Franklin Balance Sheet Investment Fund |
|
|
* |
|
|
|
6,952,237 |
|
| |
|
|
|
MainStay A MAP Fund |
|
|
* |
|
|
|
2,618,953 |
|
| |
|
|
|
Artisan Mid Cap Fund |
|
|
* |
|
|
|
5,183,724 |
|
| |
|
|
|
AIM Small Cap Growth Fund |
|
|
* |
|
|
|
7,816,626 |
|
| |
|
|
|
Federated Capital Appreciation Fund |
|
|
* |
|
|
|
7,626,947 |
|
| |
|
|
|
Fidelity Advisor Value Strategies Fund |
|
|
* |
|
|
|
3,878,954 |
|
| |
|
|
|
Goldman Sachs Mid Cap Value Fund |
|
|
* |
|
|
|
7,596,067 |
|
| |
|
|
|
Oppenheimer Capital Appreciation Fund |
|
|
* |
|
|
|
3,997,377 |
|
| |
|
|
|
Artisan International Fund |
|
|
* |
|
|
|
8,479,193 |
|
| |
|
|
|
Money market fund — MainStay Cash Reserves Fund |
|
|
* |
|
|
|
26,667 |
|
| Tower Automotive, Inc. |
|
Common stock — Tower Automotive, Inc. |
|
|
* |
|
|
|
167,781 |
|
| Participants |
|
Participant loans — Bearing interest at rates
ranging from 5.00 percent to 10.50 percent |
|
|
— |
|
|
|
3,799,168 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
Total investments |
|
|
|
|
|
$ |
118,615,980 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| * |
|
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.
| |
|
|
|
|
|
|
Tower Automotive Retirement Plan
|
|
|
|
|
|
|
|
DATE: June 20, 2006
|
|
/s/ Christopher T. Hatto |
|
|
|
|
|
|
|
|
|
Christopher T. Hatto, Corporate Controller and |
|
|
|
|
Chief Accounting Officer of Tower
Automotive, Inc. |
|
|
EXHIBIT INDEX
| |
|
|
| Exhibit No. |
|
Description |
23
|
|
Consent of Independent Registered Public Accounting Firm |