10-K

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

Form 10-K

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

For the fiscal year ended:
December 31, 2018 Commission file number:
001-34903

TOWER INTERNATIONAL, INC.

(Exact name of Registrant as specified in its charter)

Delaware	27-3679414
(State of Incorporation)	(IRS Employer Identification Number)

17672 Laurel Park Drive North, Suite 400 E
Livonia, Michigan
(Address of Principal Executive Offices) 48152
(Zip Code)

Registrant’s telephone number, including area code: (248) 675-6000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, par value $.01 per share	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:
None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15d of the Act. Yes ☐ No ☒

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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). Yes ☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☒

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

Large accelerated filer ☐	Accelerated filer ☒
Non-accelerated filer ☐	Smaller reporting company ☐
​	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of the common stock held by non-affiliates of the registrant, computed by reference to the closing price of the common stock as of the closing of trading on June 30, 2018, was approximately $625,903,277.

There were 20,611,952 shares of the registrant’s common stock outstanding at February 19, 2019.

DOCUMENTS INCORPORATED BY REFERENCE

Certain portions, as expressly described in this report, of the Registrant’s Proxy Statement for the 2019 Annual Meeting of Stockholders are incorporated by reference into Part III.

TOWER INTERNATIONAL, INC. — FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2018

TABLE OF CONTENTS

​	10-K Pages
PART I	​	​
Item 1. Business	​	1
Item 1A. Risk Factors	​	13
Item 1B. Unresolved Staff Comments	​	21
Item 2. Properties	​	21
Item 3. Legal Proceedings	​	22
Item 4. Mine Safety Disclosures	​	22
PART II	​	​
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities	​	23
Item 6. Selected Financial Data	​	25
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations	​	27
Item 7A. Quantitative and Qualitative Disclosures about Market Risk	​	48
Item 8. Financial Statements and Supplementary Data	​	50
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	​	98
Item 9A. Controls and Procedures	​	98
Item 9B. Other Information	​	100
PART III	​	​
Item 10. Directors, Executive Officers, and Corporate Governance	​	101
Item 11. Executive Compensation	​	101
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	​	101
Item 13. Certain Relationships and Related Transactions, and Director Independence	​	102
Item 14. Principal Accounting Fees and Services	​	102
PART IV	​	​
Item 15. Exhibits, Financial Statement Schedules	​	103
Item 16. Form 10-K Summary	​	111
Signatures	​	112

Exhibit Index
EX-10.66
EX-10.67
EX-10.70
EX-10.71
EX-10.72
EX-10.73
EX-10.74
EX-21.1
EX-23.1
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-101.INS
EX-101.SCH
EX-101.CAL
EX-101.DEF
EX-101.LAB
EX-101.PRE

i

PART I

Item 1.   Business

Our Company

We are a leading manufacturer of engineered automotive structural metal components and assemblies primarily serving original equipment manufacturers (“OEMs”). We offer our automotive customers a broad product portfolio, supplying body-structure stampings, frame and other chassis structures, and complex welded assemblies for small and large cars, crossovers, pickups, and sport utility vehicles.

After giving effect to the pending sale of our European operations and the retention of our Brazilian operations, (see “Our History and Corporate Structure — Europe Discontinued Operations”), our products are manufactured at 14 facilities, strategically located near our customers in the United States, Mexico, and Brazil. We support our manufacturing operations through five engineering and sales locations around the world. We are a disciplined, process-driven company with an experienced management team that has a history of implementing sustainable operational improvements. For the year ended December 31, 2018, in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), we generated revenues of  $1.6 billion and net income attributable to Tower International, Inc. (the “Company”) of  $48.9 million. In addition, we had Adjusted EBITDA of  $177.7 million and an Adjusted EBITDA margin of 11.3% for the year ended December 31, 2018. (Item 7 of this Annual Report includes a discussion of Adjusted EBITDA as a non-GAAP measure).

We believe that our engineering, manufacturing, and program management capabilities, our competitive cost and quality, our financial discipline, and our colleague engagement position us for long-term success.

Our History and Corporate Structure

Our Corporate History

On October 15, 2010, our common stock began trading on the New York Stock Exchange following our initial public offering (“IPO”). On July 31, 2013, Tower International Holdings, LLC, an affiliate of Cerberus, completed the sale of 7,888,122 shares of our common stock in a secondary public offering. Upon completion of the sale, Cerberus no longer controlled a majority of our outstanding common stock and therefore, we ceased being a “controlled company” within the meaning of the New York Stock Exchange corporate governance standards. On November 6, 2013, Tower International Holdings, LLC, completed the sale of 3,000,000 shares of our common stock in another secondary public offering. In addition, Tower International Holdings, LLC completed multiple transactions during the fourth quarter of 2013 whereby it sold additional shares of our common stock in the open market. As a result of these sales, Tower International Holdings, LLC and Cerberus held no shares of our common stock at December 31, 2013.

Europe Discontinued Operations

During the fourth quarter of 2018, our subsidiaries Tower Automotive Holdings III Cooperatie U.A. and Tower Automotive Holdings USA, LLC entered into a Memorandum of Understanding and Stock Purchase Agreement with Financière SNOP Dunois S.A. (the “Purchaser”). Pursuant to these agreements, the Purchaser will acquire all of the stock of TA Holdings Europe B.V., our indirect wholly owned subsidiary, and an intercompany loan, for a purchase price of  €255 million on a cash free, debt free basis, subject to working capital and other customary adjustments and a reduction to the extent that capital expenditures for our European operations for calendar year 2018 were less than €45 million. Approval of the transaction is subject to (i) the approval of the European Commission and (ii) the absence of a material breach in any of the seller parties’ fundamental representations (e.g., title, authority and absence of insolvency). On February 13, 2019, we obtained the required approvals from the European Commission. During the first quarter of 2019, we expect to consummate the transaction and receive net sale proceeds of approximately $250 million after payment of transaction costs and the repayment of our cross currency swap.

1

Our European operations are considered held for sale in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 360, Property, Plant, and Equipment, and have been presented as discontinued operations in our Consolidated Financial Statements in accordance with FASB ASC No. 205, Discontinued Operations. The anticipated purchase price less expected transaction related costs is less than the carrying value as of December 31, 2018; therefore, we recorded a fair value adjustment of  $44 million during the fourth quarter of 2018. Included in the fair value adjustment is the required recognition of the cumulative translation adjustment that will be reclassified to earnings. During the year ended December 31, 2018, our European operations had revenues of  $650.3 million.

Brazil Operations

During the second quarter of 2016, our Board of Directors approved a plan to sell our remaining business operations in Brazil, at which time we recorded a $15 million impairment charge upon classifying our Brazilian operations as held for sale. In prior filings, the Brazilian operations have been presented as discontinued operations in our Consolidated Financial Statements, in accordance with FASB ASC No. 205, Discontinued Operations. During the year ended December 31, 2018, our Brazilian operations had revenues of  $53 million.

During the fourth quarter of 2018, we reclassified the Brazilian operations as held and used; therefore, the Brazilian operations are no longer presented as discontinued operations in accordance with FASB ASC No. 360, Property, Plant, and Equipment.

Sale of China Joint Ventures

In October of 2016, we entered into an agreement to sell our joint venture in Wuhu, China: Tower Automotive Company, Ltd. (“Wuhu”). The sale agreement provided for the purchase of our equity in the joint venture for approximately $21 million, net of tax. We received proceeds of  $4.5 million in the fourth quarter of 2016. On May 9, 2017, we completed the sale of our equity interest in Wuhu. During the second quarter of 2017, we received total net proceeds of  $15.9 million related to the sale, which resulted in a total sales price that was less than the carrying value of the net assets of Wuhu. In addition, we incurred certain transaction related costs; therefore, a net loss of  $2.6 million was recorded in the second quarter of 2017.

Also, in October of 2016, we entered into an agreement to sell our joint venture in Ningbo, China: Tower DIT Automotive Products Co., Ltd. (“Ningbo”). The sale agreement provided for the purchase of our equity in the joint venture for approximately $4 million, net of tax. We completed the sale of Ningbo during the second quarter of 2018 and received proceeds of  $4.3 million, net of tax.

Wuhu and Ningbo have been presented as discontinued operations in our Consolidated Financial Statements, in accordance with FASB ASC No. 205, Discontinued Operations.

Our Industry

We believe OEMs produce a majority of their structural metal components and assemblies internally. While OEM policies differ and may be especially impacted by their own capacity utilization, the capital expenditures associated with internal production of the types of parts and assemblies Tower manufactures can be substantial. As fuel efficiency and emissions regulations tighten globally, the continued lightweighting and electrification of vehicles is expected. Due to the capital investment and fixed cost requirements for the OEMs related to these trends, as well as the evolution toward autonomous vehicles, we believe that longer term, OEMs will outsource a greater proportion of their stamping requirements and we may benefit from this shift. We also believe that our products are relatively agnostic to vehicle autonomy because the stampings and assemblies we produce are critical to the structural integrity of a vehicle and not dependent upon the powertrain or how vehicles are driven. In addition, we believe OEMs will increasingly favor larger, more capable, financially strong regional suppliers. Given our manufacturing, engineering, and operational program management capabilities, we believe we are particularly well-positioned to take advantage of these potential opportunities.

2

Our Strategy

We seek to:

•

Execute a business model that generates sustainable ongoing free cash flow, providing flexibility for capital allocation and resilience during cyclical downturns;

•

Achieve organic growth above industry levels through strong competitive capabilities in engineering, manufacturing, and program management that contribute to leading positions in cost and quality;

•

Opportunistically pursue accretive acquisitions;

•

Achieve and maintain appropriate net debt leverage of about 1 times Adjusted EBITDA, which we consider to be integral to a financially strong and capable automotive parts supplier;

•

Return capital to shareholders through regular growing dividends, stock repurchases and, when appropriate, other actions; and

•

Manage risk through financial discipline.

Execute Business Model Focused on Free Cash Flow

Free cash flow (defined as net cash provided by operating activities less cash disbursed for purchases of property, plant and equipment) is one of our most important financial metrics. Our focus on sustainable ongoing free cash flow keeps us disciplined regarding product pricing and margins, as well as determining and prioritizing affordable capital expenditures. To further our alignment with our business model, free cash flow is a major component of our annual bonus program for salaried and hourly colleagues. (Item 7 of this Annual Report includes a discussion of free cash flow as a non-GAAP measure).

Achieve Organic Growth Above Industry and Opportunistically Pursue Accretive Acquisitions

We have demonstrated the ability to win significant net new business from our customers from a combination of share gains from competitors via conquest wins and OEM outsourcing. In addition, the increased use of aluminum, higher strength steels and hot forming (i.e., “light weighting”) with complex joining technologies is providing us with higher value-add opportunities. We believe our ability to win new business at a return in excess of our cost of capital is a direct reflection of our core engineering strength, competitive cost and quality, and proven ability to manage complex new-model launches for OEM customers. We use processes such as Lean Six Sigma, labor best practices standardization, and advanced product quality planning (“APQP”) to drive productivity and quality while managing new programs on time and on budget.

We believe Tower is positioned for organic growth well above industry from 2019 through at least 2020 as a result of major new business awards primarily in North America that are anticipated to provide approximately $250 million of annual ongoing net revenue. We also believe there can be future upside growth opportunities from accretive acquisitions. Our projections regarding future performance constitute forward-looking statements. For information regarding the risks associated with forward looking statements, see “Disclosure Regarding Forward-Looking Statements.”

Achieve and Maintain Appropriate Leverage

Achieving and maintaining net debt leverage (defined as total debt less cash and cash equivalents divided by annual Adjusted EBITDA) at our target of 1 times Adjusted EBITDA is an important business priority for optimizing cost of capital and maintaining appropriate financial strength. As of December 31, 2018, our net debt was $230.5 million, representing net debt leverage of 1.3 times, before application of the expected net proceeds from the sale of our European operations. (Item 7 of this Annual Report includes a discussion of net debt as a non-GAAP measure).

During the last two years, we have entered into operating leases to fund a portion of the capital expenditures necessary to achieve growth above industry average. We believe that these operating leases provide a diversified capital source for financing capital expenditures at competitive rates. These leasing arrangements bear a weighted average fixed interest rate of 5.6%. As of December 31, 2018, the effective interest rate on our Term Loan Credit Facility (the “Term Loan”) was 5.2%.

3

Beginning in 2019, FASB ASC No. 842, Leases, will change the financial reporting for leases. Certain of our manufacturing equipment leases currently classified as operating leases will be considered financing leases under the new standard. As a result, we will be required to record a right-of-use (“ROU”) asset as additional property, plant, and equipment and the associated liability as lease debt.

As of December 31, 2018 and 2017, the associated liability from these leases would have been approximately $157 million and $72 million, respectively. Including our net debt of  $230.5 million, our pro-forma net debt leverage including these leases would have been 2.2 times as of December 31, 2018, but would have been reduced to approximately 1.1 times including the expected net proceeds from the sale of our European operations.

In addition, we have numerous real estate and equipment leases currently classified as operating that we believe will continue to be classified as operating under the new standard. We estimate that the ROU assets and lease liabilities associated with these leases will be approximately $100 million, and is estimated to increase approximately $10 million during the first quarter of 2019 upon the extension of certain leases of production facilities.

Return Capital to Shareholders

With our long-term leverage target in sight, we have begun returning capital to shareholders. In the fourth quarter of 2018, we raised our regular quarterly dividend per common share for the third consecutive year. In addition, on June 17, 2016, we announced our Board of Directors’ authorization to repurchase up to $100 million of our issued and outstanding common stock from time to time in the open market, or in privately negotiated transactions (the “Repurchase Program”). As of December 31, 2018, we have returned approximately $50 million to shareholders, on a cumulative basis, including dividend payments and shares repurchased under the Repurchase Program.

Manage Risk

We consider risk management to be an important part of our ability to operate predictably and successfully in the cyclical automotive parts industry. Foremost in managing risk is financial discipline, beginning during the evaluation and approval of new programs to ensure sound assumptions and projected returns in excess of our cost of capital. During each year, we carefully monitor and manage all elements of cost, with an objective of achieving productivity and other savings that offset customer price reductions and labor and overhead inflation. Through our commercial agreements, we are largely shielded from changes in steel prices.

Composition of Revenues

Customers

The following table summarizes our customer mix as a percent of revenues for the year ended December 31, 2018 (excluding revenues from discontinued operations).

Customer	​
Ford	47%
Fiat – Chrysler	22%
Nissan	12%
Toyota	8%
BMW	5%
Volkswagen Group	2%
Honda	2%
Other	2%
Total	100%

4

Platforms

We believe we are well positioned in the North American market due to the continued shift away from passenger cars to light trucks (which includes SUVs, Pickups, Vans, and MPVs). Our percentage of revenue related to passenger cars only represents 12% of our 2018 revenue. In addition, based on 2018 production volumes, we supply products for approximately 75% of the top 20 platforms in the North American market. The following table summarizes our vehicle platform mix as a percent of revenues for the year ended December 31, 2018 (excluding revenues from discontinued operations).

Vehicle Platform	​
SUV	53%
Pickup	27%
Van	4%
MPV	2%
Light trucks	86%
Large Car	7%
Small Car	5%
All Other	2%
Total	100%

IHS Automotive® (“IHS”) Global Sales Sub-Segment and Global Production Segment include the following references:

•

“SUV” refers to Global Sales Sub-Segment “SUV” (sport-utility vehicles);

•

“Pickup” refers to Global Sales Sub-Segment “PUP” (pickup trucks);

•

“Large car” refers to Global Sales Sub-Segment and Global Production Segment (D-E Segment);

•

“Small car” refers to Global Sales Sub-Segment and Global Production Segment (A-C Segment);

•

“Van” refers to Global Sales Sub-Segment “Van”;

•

“MPV” refers to Global Sales Sub-Segment “MPV” (multi-purpose vehicles); and

•

“All Other” refers to Heavy truck, Non-Auto (Racks), Offload, Service, and Other (primarily Tier 2)

The reports prepared by IHS referred to in this Annual Report are subscription-based. All references in this report to historical industry production volumes, projections, estimates, or other data attributable to IHS, are based on data available from the IHS January 2019 forecast.

Our Products

We produce a broad range of structural components and assemblies, many of which are critical to the structural integrity of a vehicle. Images of some of the products we offer are presented below.

5

Product Offerings

Body structures and assemblies

Body structures and assemblies form the basic upper body structure of the vehicle and include structural metal components such as body pillars, roof rails, and side sills. This category also includes Class A surfaces and assemblies, which are components of the “exterior skin” of the vehicle — body sides, hoods, doors, fenders, and pickup truck boxes. These components form the appearance of the vehicle, requiring flawless surface finishes.

Chassis and lower vehicle structures

Lower vehicle frames and structures include chassis structures that make up the “skeleton” of a vehicle and which are critical to overall performance, particularly in the areas of noise, vibration and harshness, handling, and crash management. These products include pickup truck and SUV full frames, automotive engine and rear suspension cradles, floor pan components, and cross members that form the basic lower body structure of the vehicle. These heavy gauge metal stampings carry the load of the vehicle, provide crash integrity, and are critical to the strength and safety of vehicles.

Complex body-in-white assemblies

Complex body-in-white assemblies are comprised of multiple components and sub-assemblies welded to form major portions of the vehicle’s body structure. We refer to body-in-white as the manufacturing stage in which the vehicle body sheet metal has been assembled but before the components and trim have been added. Examples of complex assemblies include front and rear floor pan assemblies and door/pillar assemblies.

Product mix

The following table summarizes our product group mix as a percent of revenues for the year ended December 31, 2018 (excluding revenues from discontinued operations):

Product Group	​
Body structures and assemblies	47%
Chassis and lower vehicle structures	36%
Complex body-in-white assemblies	17%
Total	100%

6

The following table presents the major vehicle models for which we supply products:

OEM	Models	Product Type
North America	​	​
Ford	Econoline	Frame Assembly
​	Explorer	Complex Assembly
​	Expedition/Navigator	Body Structures
​	F-Series	Frame Assembly/Body Structures
​	Taurus/MKS	Complex Assembly
​	Escape	Body Structures & Complex Assembly
Chrysler	Caravan	Body Structures
​	Grand Cherokee/Durango	Body Structures
​	Wrangler	Frame Assembly
​	Cherokee	Body Structures
​	Ram Pickup	Body Structures
Nissan	Frontier	Body Structures & Frame Assembly
​	NV Series	Frame Assembly
​	Titan	Frame Assembly
​	Altima	Body Structures
Toyota	Camry	Body Structures
​	Corolla	Body Structures
​	Tacoma	Body Structures
​	Tundra	Body Structures
BMW	X3	Body Structures & Complex Assembly
​	X4	Body Structures & Complex Assembly
​	X5	Body Structures & Complex Assembly
​	X6	Body Structures & Complex Assembly
Brazil	​	​
VW	Gol	Body Structures
​	Saveiro	Body Structures
​	Fox	Body Structures
​	Up!	Body Structures
Honda	Fit	Body Structures
​	Vezel	Body Structures
​	Civic	Body Structures
​	City	Body Structures
PSA	Picasso	Body Structures

Manufacturing and Operations

Our manufacturing operations consist primarily of stamping and welding operations, system and modular assembly operations, cold and hot forming, coating, and other ancillary operations. Stamping involves passing metal through dies in a stamping press to form the metal into three-dimensional parts. We produce stamped parts using precision single-stage, progressive, and transfer presses, ranging in size from 100 to 4,500 tons, which perform multiple functions to convert raw material into finished products. We invest in our press technology to increase flexibility, improve safety, and minimize die changeover time.

7

We feed stampings into assembly operations that produce complex assemblies through the combination of multiple parts that are welded or fastened together. Our assembly operations are performed either on dedicated, high-volume welding/fastening machines or on flexible, cell-oriented robotic lines. The assembly machines attach additional parts, fixtures, or stampings to the original metal stampings. In addition to standard production capabilities, our assembly machines are also able to perform various statistical control functions and identify improper welds and attachments.

Our products use various grades and thicknesses of steel and aluminum, including high-strength, hot- andcold-rolled, galvanized, organically coated, stainless, and aluminized steel. Although changing steel prices affect our results, we seek to be neutral with respect to steel pricing over time, with the intention of neither making nor losing money as steel prices fluctuate. The pricing of our products includes a component for steel, which can increase as steel prices increase and decrease as steel prices decrease. For our North American customers and several of our other customers, we purchase steel through our customers’ resale programs, where our customers actually negotiate the cost of steel for us. In other cases, we procure steel directly from the mills, negotiating our own price and seeking to pass through steel price increases and decreases to our customers.

Our hot forming technology provides customers with ultra-high strength steels (“UHSS”) for automotive body structures. Demand for UHSS is increasing to allow conformance to additional regulatory requirements for fuel economy — through mass reduction — while maintaining vehicle safety.

We focus on achieving superior product quality at the lowest operating costs possible and concentrate on improving our manufacturing processes to drive out inefficiencies. We seek to continually improve our processes through efforts to improve our cost competitiveness and achieve higher quality.

We are committed to sustaining Lean Six Sigma principles throughout our manufacturing processes and as of December 31, 2018, we employed 77 certified black belts. We utilize Lean Six Sigma principles to increase the efficiency of our operations and to reduce operating costs, thereby improving our cost competitiveness. We have accomplished efficiency improvements, while at the same time improving our quality.

Supply Base — Manufactured Components and Raw Materials

We purchase various manufactured components and raw materials for use in our manufacturing processes. All of these components and raw materials are available from numerous sources. We employ just-in-time manufacturing and sourcing systems, enabling us to meet customer requirements for faster deliveries, while minimizing our need to carry significant inventory levels. The primary raw material used to produce the majority of our products is steel. A portion of our steel is purchased from certain of our customers through various OEM resale programs. The remainder of our steel purchasing requirements are met through contracts with steel producers and market purchases. In addition, we procure small- and medium-sized stampings, fasteners, tubing, and rubber products.

Sales, Marketing, and Distribution

Our sales and marketing efforts are designed to create awareness of our engineering, program management, manufacturing and assembly expertise, and to translate our leadership position into contract wins. We have developed a sales team that consists of an integrated group of professionals, including skilled engineers and program managers, whom we believe provide the appropriate mix of operational and technical expertise needed to interface successfully with OEMs. We sell directly to OEMs through our sales and engineering teams at our technical centers, which are strategically located around the world. Bidding on automotive OEM platforms typically encompasses many months of engineering and business development activity. We integrate our sales force directly into our operating team and work closely with our customers throughout the process of developing and manufacturing a product. Our proximity to our customer base enables us to enjoy close relationships with our customers and positions us well to seek future business awards.

8

Customers

We have developed long-standing business relationships with our automotive customers. We work together with our customers in various stages of production, including development, component sourcing, quality assurance, manufacturing, and delivery. With a diverse mix of products and facilities, we believe we are well-positioned to meet customer needs. We believe we have a strong, established reputation with customers for providing high-quality products at competitive prices, as well as for timely delivery and customer service. Given that the automotive OEM business involves long-term production contracts awarded on a platform-by-platform basis, we believe that we can leverage our strong customer relationships to obtain new platform awards. Contracts are typically sole-sourced to one supplier for individual platforms.

Customer Support

We have five engineering and sales locations around the world, including a 24-hour engineering support center in India. We believe that we provide effective customer solutions, products, and service to our customers. Our customer service group is organized into customer-dedicated teams within regions to provide more focused service to our customers.

Seasonality

Our customers in North America typically shut down vehicle production during portions of July – August and for one week in late December. Our quarterly results of operations, cash flows, and liquidity may be impacted by these seasonal practices. For example, working capital is typically a use of cash during the first quarter of the year and a source of cash generation in the fourth quarter. See Management’s Discussion and Analysis of Financial Condition and Results of Operations for further discussion on working capital.

Competition

We principally compete for new business at the beginning of the development of new models and on the redesign of existing models. New-model development generally begins two to three years before the marketing of such models to the public. Once a supplier has been designated to supply parts for a new program, an OEM will usually continue to purchase those parts from the designated producer for the life of the program, although not necessarily for a major redesign. OEMs typically evaluate suppliers based on many criteria such as quality, price/cost competitiveness, system and product performance, reliability and timeliness of delivery, new product and technology development capability, excellence and flexibility in operations, location relative to the customer’s assembly plant, effectiveness of customer service, and overall management capability.

We believe that we compete effectively with other leading suppliers in our sector. Our main tier one competitors include: Magna International, Inc. (Cosma division), Gestamp Automocion, Martinrea International, and Metalsa, S.A. de C.V. We compete with other competitors with respect to certain of our products. The number of our competitors has decreased in recent years and we believe that number will continue to decline due to supplier consolidation. In addition, most of our OEM customers manufacture similar products that compete with our products. We believe the recent trend has been for OEMs, on average, to increase outsourcing, and we expect that trend to continue, which may provide above-industry growth opportunities for key suppliers like Tower.

Joint Ventures

In the fourth quarter of 2016, we entered into agreements in principle to sell our two remaining joint ventures in China: Wuhu and Ningbo. We completed the sale of Wuhu during 2017 and the sale of Ningbo during the second quarter of 2018.

Employees

As of December 31, 2018, our continuing operations had approximately 5,700 employees worldwide, of whom approximately 3,500 were covered under collective bargaining agreements that expire at various times. Additionally, our discontinued European operations had approximately 2,300 employees, of whom approximately 1,600 were covered under collective bargaining agreements. We are not aware of any

9

significant work stoppages since the formation of Tower Automotive Inc., our predecessor (the “Predecessor Company”), in 1993. A prolonged strike or slow-down by one of our unions could have a material adverse effect on our business. We believe that our relations with our employees are satisfactory.

Environmental Matters

We are subject to various domestic and foreign Federal, state and local laws and regulations governing the protection of the environment and health and safety, including those regulating the following: soil, surface water, and groundwater contamination; the generation, storage, handling, use, disposal, and transportation of hazardous materials; the emission and discharge of materials, including greenhouse gases (“GHGs”) into the environment; and the health and safety of our employees. We are also required to obtain environmental permits from governmental authorities for certain operations. We have taken steps to comply with the numerous and sometimes complex laws, regulations, and permits. We have also achieved ISO 14001 registration for substantially all of our facilities, which means we have implemented environmental management systems to improve our environmental performance. Compliance with environmental requirements has not had a material impact on our capital expenditures, earnings, or competitive position and we have made, and will continue to make, capital and other expenditures pursuant to such requirements. If we violate or fail to comply with these requirements, we could be subject to fines, penalties, enforcement actions, or lawsuits.

Environmental laws, regulations, and permits, and the enforcement thereof, change frequently and have become more stringent over time. In particular, more rigorous GHG emission requirements are in various stages of development. For example, the United States Environmental Protection Agency (“U.S. EPA”) has promulgated the GHG Reporting Rule, which requires reporting of GHG data and other relevant information from large sources and suppliers in the United States and the GHG Tailoring Rule, which requires certain facilities with significant GHG emissions to obtain emissions permits under the authority of the Clean Air Act (typically limited to only the largest stationary sources of GHGs.) The United States Congress has also considered imposing additional restrictions on GHG emissions. Any additional regulation of GHG emissions by either the United States Congress and/or the U.S. EPA could include a cap-and-trade system, technology mandate, emissions tax, reporting requirement, or other program, and could subject us to significant costs, including those relating to emission credits, pollution control equipment, monitoring, and reporting, as well as increased energy and raw material prices. In addition, our OEM customers may seek price reductions from us to account for their increased costs resulting from GHG regulations. Further, growing pressure to reduce GHG emissions from mobile sources could reduce automobile sales, thereby reducing demand for our products, and ultimately our revenues. At this time, none of our facilities are required to report GHG emissions or participate in any cap-and-trade system programs under the existing regulatory scheme. However, there is still significant uncertainty surrounding the scope, timing, and effect of future GHG regulation, and any changes to the current laws or regulations could have a material adverse impact on our business, financial condition, results of operations, reputation, product demand, and liquidity.

We are also responsible for certain costs relating to contamination at our, or the Predecessor Company’s, current or formerly owned or operated properties or third party waste disposal sites, even if we are not at fault. Certain locations have been impacted by environmental releases and soil or groundwater contamination is being addressed at certain of these sites. In addition to potentially significant investigation and remediation costs, contamination can give rise to third party claims, including fines or penalties, natural resource damages, personal injury, or property damage. Our costs and liabilities associated with environmental contamination could be substantial and may be material to our business, financial condition, results of operations, or cash flows. Refer to Note 14 to our Consolidated Financial Statements for information regarding our environmental liabilities.

Segment Overview

Refer to Note 13 to our Consolidated Financial Statements for information regarding our operating and reportable segments.

10

Public Information

We maintain a website at http://www.towerinternational.com. We will make available on our website, free of charge, the proxy statements and reports on Forms 8-K, 10-K, and 10-Q that we file with the United States Securities and Exchange Commission (“SEC”) as soon as reasonably practicable, after such material is electronically filed with, or furnished to, the SEC. Additionally, we have adopted and posted on our website a Code of Business Conduct and Ethics that applies to, among other people, our principal executive officer, principal financial officer, and principal accounting officer. We intend to disclose any waivers of the Code of Business Conduct and Ethics on our website. We will provide, free of charge, a copy of our Code of Business Conduct and Ethics to any person who requests a copy. All such requests should be directed to our Executive Director, Investor & External Relations, c/o Tower International, Inc., 17672 Laurel Park Drive North, Suite 400 E, Livonia, Michigan 48152. Except as otherwise stated, the information contained on our website or available by hyperlink from our website is not incorporated into this Annual Report on Form 10-K or other documents we file with, or furnish to, the SEC.

Disclosure Regarding Forward-Looking Statements

This Annual Report contains statements which constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements relating to trends in the operations, financial results, business and products of our Company, and anticipated production trends. The forward-looking statements can be identified by words such as “anticipate”, “believe”, “plan”, “estimate”, “expect”, “intend”, “project”, as well as other similar expressions and statements regarding our intent, belief, current plans, or expectations. Our forward looking statements also include, without limitation, statements regarding our anticipated future financial condition, operating results, free cash flows, adjusted free cash flows, net debt leverage, Adjusted EBITDA, and business and financing plans and models. Forward-looking statements are made as of the date of this report and are based upon management’s current expectations and beliefs concerning future developments and their potential effects on us. Such forward-looking statements are not guarantees of future performance. The following important factors, as well as those important factors described elsewhere in this Annual Report, including the matters set forth under the captions entitled “Risk Factors” and “Quantitative and Qualitative Disclosures About Market Risk”, could cause our actual results to differ materially from estimates or expectations reflected in such forward-looking statements:

•

global automobile production volumes;

•

the financial condition of our customers and suppliers;

•

our ability to make scheduled payments of principal or interest on our indebtedness and comply with the covenants and restrictions contained in the instruments governing our indebtedness;

•

our ability to refinance our indebtedness;

•

any increase in the expense and funding requirements of our pension and postretirement benefits;

•

our customers’ ability to obtain equity and debt financing for their businesses;

•

our dependence on our largest customers;

•

pricing pressure from our customers;

•

changes to U.S. or international trade and tariff policies and the reaction of other countries thereto;

•

our ability to integrate acquired businesses;

•

our ability to take advantage of emerging secular trends relating to lightweighting, outsourcing, replacement, electrification, and autonomous vehicles;

•

risks associated with non-U.S. operations, including foreign exchange risks and economic uncertainty in some regions;

11

•

risks associated with business divestitures including volatility in the capital markets, the capacity of potential bidders to finance transactions and the difficulty of predicting the outcome of negotiations; and

•

costs or liabilities related to environmental and safety regulations.

Any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.

This Annual Report also contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other data about our industry. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. We have not independently verified the statistical and other industry data generated by independent parties that are contained in this Annual Report and, accordingly, we cannot assure you of the accuracy or completeness of such data. In addition, projections, assumptions, and estimates of our future performance and the future performance of the industries in which we operate are necessarily subject to a high degree of uncertainty and risk.

12

Item 1A.   Risk Factors

Our business is subject to a number of risks. In addition to the various risks described elsewhere in this Annual Report, the following risk factors should be considered. Unless otherwise expressly indicated, information with respect to discontinued operations has been excluded from the risk factor disclosures set forth below.

Risk Factors Relating to Our Industry and Our Business

A downturn in the North American economy could adversely affect demand for automobiles that are manufactured with our products and therefore, could adversely affect our business, financial condition, results of operations, and cash flows.

During the year ended December 31, 2018, approximately 97% of our revenues were derived from operations in North America. The level of demand for our products depends primarily upon the level of consumer demand for new vehicles that are manufactured with our products. An economic recession can have a significant adverse effect on our business, customers, and suppliers, and can contribute to delayed and reduced purchases of automobiles, including those manufactured with our products. If the North American economy were to undergo a significant downturn, depending upon its length, duration, and severity, our financial condition, results of operations, and cash flow could be materially adversely affected.

Demand for and pricing of our products is also subject to economic conditions and other factors (e.g., energy costs, fuel costs, climate change concerns, vehicle age, consumer spending and preferences, materials used in production, changing technology, etc.) present in the various markets in which our products are sold.

We are dependent upon large customers and specific customer programs for current and future revenues. The loss of any of these customers or programs, or the loss of market share by these customers or programs, could have a material adverse effect on us.

Our customers are major vehicle manufacturers. During 2018, our largest volume customers, Ford, Fiat-Chrysler, Nissan, Toyota, and BMW accounted for 47%, 22%, 12%, 8%, and 5% of our revenues, respectively. The loss of all or a substantial portion of our sales to any of our large-volume customers could have a material adverse effect on our business, financial condition, results of operations, and cash flows by reducing cash flows and limiting our ability to spread our fixed costs over a larger revenue base. A variety of reasons could lead to a reduction of sales to our customers, including, but not limited to:

•

loss of awarded business;

•

reduced or delayed customer requirements;

•

OEMs’ choosing to insource business that has been traditionally outsourced to us;

•

strikes or other work stoppages affecting customer production; or

•

reduced demand for our customers’ products.

We may be unable to realize revenues represented by our awarded business, which could materially and adversely affect our business, financial condition, results of operations and cash flows.

The realization of future revenues from awarded business is inherently subject to a number of important risks and uncertainties, including the number of vehicles that our customers will actually produce, the timing of that production, and the mix of options that our customers may choose.

In addition to not having a commitment from our customers regarding the minimum number of products they must purchase from us if we obtain awarded business, the terms and conditions of the agreements with our customers typically provide that they have the contractual right to unilaterally terminate our contracts with them without notice or with only limited notice. If such contracts are terminated by our customers, our ability to obtain compensation from our customers for such termination is generally limited to the direct out-of-pocket costs that we incurred for raw materials and work-in-progress, and in certain instances, un-depreciated capital expenditures.

13

We base a substantial part of our planning on the anticipated lifetime revenues of particular products. We calculate the lifetime revenues of a product by multiplying our expected price for a product by the forecasted production volume for that product during the length of time we expect the related vehicle to be in production. In addition to applying our experienced judgment to customer projections, we use IHS, a third-party forecasting service, to provide long-term forecasts, which allow us to determine how long a vehicle is expected to be in production. If we over-estimate the production units or if a customer reduces its level of anticipated purchases of a particular platform as a result of reduced demand, our actual revenues for that platform may be substantially less than the lifetime revenues we had anticipated for that platform.

Typically, it takes two to three years from the time a manufacturer awards a program until the program is launched and production begins. In many cases, we must commit substantial resources in preparation for production under awarded customer business well in advance of the customer’s production start date. We cannot provide assurance that our results of operations will not be materially adversely affected in the future if we are unable to recover these types of pre-production costs related to our customers’ cancellation of awarded business or if projected volumes are not attained.

The automobile industry is highly cyclical and a downturn would adversely affect our business, financial condition, results of operations, and cash flows.

Our business is directly related to the volume of automotive production. Automotive production and sales are highly cyclical and depend on general economic conditions and other factors, including interest rates, consumer confidence, consumer preferences, patterns of consumer spending, fuel costs, and the automobile replacement cycle. Automotive production and sales may fluctuate significantly from year-to-year and such fluctuations may give rise to changes in demand for our products. Because we have significant fixed production costs, declines in our customers’ production levels can have a significant adverse effect on our results of operations.

The highly cyclical nature of the automotive industry presents a risk that is outside our control and that cannot be accurately predicted. Moreover, a number of factors that we cannot reasonably predict could affect cyclicality in the automotive industry, and have affected cyclicality in the past. Decreases in demand for automobiles generally, or decreases in demand for our products in particular, could materially and adversely affect our business, financial condition, results of operations, and cash flows.

Any acquisitions or divestitures we make could disrupt our business and materially harm our financial condition, results of operations and cash flows.

We may, from time to time, consider certain acquisitions or divestitures. Acquisitions and divestitures involve numerous risks, including identifying attractive target acquisitions, undisclosed risks affecting the target, difficulties integrating acquired businesses, the assumption of unknown liabilities, potential adverse effects on existing business relationships with current customers and suppliers, the diversion of our management’s attention from other business concerns, and decreased geographic or customer diversification.

During the fourth quarter of 2018, our subsidiaries Tower Automotive Holdings III Cooperatie U.A. and Tower Automotive Holdings USA, LLC entered into a Memorandum of Understanding and Stock Purchase Agreement with Financière SNOP Dunois S.A. (the “Purchaser”). Pursuant to these agreements, the Purchaser will acquire all of the stock of TA Holdings Europe B.V., our indirect wholly owned subsidiary, and an intercompany loan, for a purchase price of  €255 million on a cash free, debt free basis, subject to working capital and other customary adjustments and a reduction to the extent that capital expenditures for our European operations for calendar year 2018 were less than €45 million. Approval of the transaction is subject to (i) the approval of the European Commission and (ii) the absence of a material breach in any of the seller parties’ fundamental representations (e.g., title, authority and absence of insolvency). On February 13, 2019, we obtained the required approvals from the European Commission. During the first quarter of 2019, we expect to consummate the transaction and receive net sale proceeds of approximately $250 million after payment of transaction costs and the repayment of our cross currency swap.

Pursuant to the agreement, the Company and its subsidiaries have made customary representations to the Purchaser, including representations regarding general corporate matters, due authorization, absence of

14

insolvency, financial statements and other financial matters, compliance with law, employment matters, real property, litigation, taxes, material contracts and environmental matters. The agreement provides for indemnification by the Company and its subsidiaries with respect to its representations, subject, in general, to customary minimum and maximum thresholds. However, with respect to the environmental representations, the agreement provides for a layering of responsibilities over the applicable minimum threshold: (i) the Purchaser and Tower Automotive Holdings III Cooperatie U.A. will share in the first €5 million of damages, (ii) for damages between €5 million and €10 million, Tower Automotive Holdings III Cooperatie U.A. will have exclusive responsibility and (iii) for damages in excess of  €10 million, the Purchaser will have exclusive responsibility.

We cannot provide assurance that the sale of our European operations will be consummated or, if consummated, that the closing will occur on schedule. We also cannot provide assurances that any acquisitions will perform as planned or that we will be able to successfully integrate any acquisitions that we undertake. In addition, we cannot provide assurances that any acquisitions or divestitures will prove to be beneficial to our operations and cash flow, or that we will be able to successfully integrate any acquisitions that we undertake. Any such failure could seriously harm our financial condition, results of operations and cash flows.

The Trump Administration could make substantial changes to regulatory, fiscal, trade, and other policies that could adversely affect our business.

The Trump Administration has called for substantial changes to regulatory, fiscal and other policies, which may include significant changes to trade agreements currently in effect. We cannot predict the impact, if any, of these changes to our business. However, it is possible that these changes could adversely affect our business. It is likely that some policies adopted by the Administration will benefit us and others will negatively affect us. Until we know what new changes are enacted, we will not know whether in total we benefit from, or are negatively affected by such changes.

Deterioration in the United States and world economies could adversely affect our customers’ and suppliers’ ability to access the capital markets, which may affect our business, financial condition, results of operations, and cash flows.

The capital and credit markets provide companies with liquidity to help operate and grow their businesses, beyond that which is provided by operating cash flows. Disruptions in the capital and credit markets could adversely affect our customers by making it increasingly difficult for them to obtain financing for their businesses and for their customers to obtain financing for automobile purchases. Our OEM customers typically require significant financing for their respective businesses. In addition, our OEM customers typically have related finance companies that provide financing to their dealers and customers. These finance companies have historically been active participants in the securitization markets, which have experienced severe disruptions during global economic crises. Our suppliers, as well as the other suppliers to our customers, may face similar difficulties in obtaining financing for their businesses. If capital is not available to our customers or suppliers, or if the cost of capital is prohibitively high, their businesses would be adversely affected, which could result in their restructuring or even reorganization or liquidation under applicable bankruptcy laws. Any such adverse effect on our customers or suppliers could materially and adversely affect our Company, either through loss of revenues from any of our customers so affected, or due to our inability to meet our commitments without excess expense, as a result of disruptions in supply caused by the suppliers so affected.

Financial difficulties experienced by any of our major customers could have a material adverse effect on us if such customer were unable to pay for the products we provide or if we experienced a loss of, or material reduction in, business from such customer. As a result of such difficulties, we could experience lost revenues, significant write-offs of accounts receivable, significant impairment charges, or additional restructurings beyond the steps we have taken to date.

15

We sponsor a defined benefit pension plan that is underfunded and requires annual cash payments. If the performance of the assets in our pension plan does not meet our expectations, or if other actuarial assumptions are modified, our required contributions may be higher than we expect.

We sponsor a defined benefit pension plan that is underfunded. While this plan is frozen as benefit accruals under the plan have ceased, the plan will require annual cash payments in order to meet our funding obligations, which adversely affects our cash flow.

Additionally, our earnings may be affected by the amount of income or expense recorded for our pension plan. GAAP requires that income or expense of a pension plan be calculated at the annual measurement date using actuarial assumptions, the most significant of which relate to the capital markets, interest rates, and other economic conditions. Changes in key economic indicators can change these assumptions. These assumptions, along with the actual value of assets at the measurement date, will impact the calculation of pension expense for the year. Although GAAP expense and pension contributions are not directly related, the key economic indicators that affect GAAP expense also affect the amount of cash that we would contribute to our pension plan. The investment portfolio of the pension plan has experienced volatility. Because the values of these pension plan assets have fluctuated, and will fluctuate in response to changing market conditions, the amount of gains or losses that will be recognized in subsequent periods, the impact on the funded status of the pension plan, and the future minimum required contributions, if any, could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

The decreasing number of automotive parts suppliers and pricing pressures from our automotive customers could make it more difficult for us to compete in the highly competitive automotive industry.

The automotive parts industry is highly competitive and bankruptcies and consolidation among automotive parts suppliers are reducing the number of competitors and resulting in larger competitors who benefit from purchasing and distribution economies of scale. Our inability to compete with these larger suppliers in the future could result in a reduction of, or inability to increase, revenues, which would materially adversely affect our business, financial condition, results of operations, and cash flows.

Although the overall number of competitors is decreasing due to ongoing industry consolidation, we face significant competition within each of our major product areas. The principal competitive factors include quality, global presence, service, cost, product performance, design and engineering capabilities, new product innovation, and timely delivery. We also face significant competitive pricing pressures from our automotive customers. Because of their purchasing size, our automotive customers can influence market participants to compete on price terms. If we are not able to offset pricing reductions resulting from these pressures by improving operating efficiencies and reducing expenditures, those pricing reductions may have a material adverse effect on our business.

We cannot provide assurance that we will be able to continue to compete in the highly competitive automotive industry or that increased competition will not have a material adverse effect on our business.

Disruptions in the automotive supply chain could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Automotive industry conditions could adversely affect the original equipment supply base. The automotive supply chain is subject to disruptions because, among other things, we, along with our customers and suppliers, attempt to maintain low inventory levels.

Disruptions could result from a multitude of potential problems, such as the closure of one of our or our suppliers’ plants or critical manufacturing lines due to strikes, mechanical breakdowns, electrical outages, fires, explosions, or political upheaval. Disruptions could also result from logistical complications due to weather, earthquakes, or other natural or nuclear disasters, mechanical failures, technology disruptions, or delayed customs processing.

If we are the cause for a customer being forced to halt production, the customer may seek to recoup all or a substantial portion of its losses and expenses from us. Any disruptions affecting us or caused by us could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

16

The volatility of steel prices may adversely affect our results of operations.

We utilize steel and various purchased steel products in virtually all of our products. We refer to the “net steel impact” as the combination of the change in steel prices that are reflected in the price of our products, the change in the cost to procure steel from mills, and the change in our recovery of scrap steel (which we refer to as “offal”). Our strategy is to be economically neutral to steel pricing by having these factors offset each other. While we strive to achieve a neutral net steel impact, we are not always successful in achieving that goal, in large part due to timing differences. The timing of a change in the price for steel may occur in separate periods and if a change occurs, that change may have a disproportionate effect on our liquidity because of the time difference between our payment for steel and our collection of cash from customers. We tend to pay for replacement materials, which are more expensive when steel prices are rising, over a much shorter period. As a result, rising steel prices may cause us to draw greater than anticipated amounts from our credit lines to cover the cash flow cycle from our steel purchases to cash collection for related accounts receivable. This cash requirement for working capital is higher in periods when we are increasing our inventory quantities.

A by-product of our production process is the generation of offal. We typically sell offal in secondary markets, which are similar to the steel markets. We generally share our recoveries from sales of offal with our customers either through scrap sharing agreements, in cases in which we are participating in resale programs, or through product pricing, in cases in which we purchase steel directly from steel mills. In either situation, we may be affected by the fluctuation in scrap steel prices, either positively or negatively, in relation to our various customer agreements. As offal prices generally increase and decrease as steel prices increase and decrease, our sale of offal may mitigate the impact of the volatility of steel price increases, as well as limit the benefits reaped from steel price declines. Any volatility in offal and steel prices could materially adversely affect our business, financial condition, results of operations, and cash flows.

Our international operations make us vulnerable to risks associated with doing business in foreign countries.

Our international operations include manufacturing facilities in Mexico and Brazil. For the year ended December 31, 2018, approximately 6% of our revenues were derived from operations outside the United States. Our international operations are subject to various risks such as exposure to local economic and political conditions, local tax requirements and obligations, legal and regulatory concerns, controls on the repatriation of cash, and labor disruptions or operational shutdowns. The occurrence of any of these risks could have an adverse effect on our international operations and our business as a whole. In addition, the economic instability in Mexico and Brazil could adversely affect our business, financial condition, results of operations and cash flows, as well as adversely affect our access to, and cost of, capital.

The inability for us, our customers, or our suppliers to obtain and maintain sufficient credit insurance or capital financing, including working capital lines, may adversely affect the liquidity and financial condition of us, our customers, and our suppliers.

Our working capital requirements can vary significantly, depending, in part, on the level, variability and timing of our customers’ vehicle production and the payment terms we have with our customers and suppliers. Our liquidity could also be adversely affected if our suppliers were to suspend normal trade credit terms and require payment in advance or payment on delivery. If our available cash flows from operations are not sufficient to fund our ongoing cash needs, we would be required to look to our cash balances and borrowing availability under our credit facilities to satisfy those needs, as well as look to potential sources of additional capital, which may not be available on satisfactory terms or in adequate amounts, if at all.

There can be no assurance that we, our customers, or our suppliers will continue to have the ability to maintain sufficient capital financing. This may increase the risk of not being able to produce our products or having to pay higher prices for our inputs that may not be recovered in our selling prices. Our suppliers often seek to obtain credit insurance based on our consolidated financial condition and strength, which may be less robust. If we were to experience liquidity issues, our suppliers may not be able to obtain credit insurance and, in turn, would likely not be able to offer us payment terms that we have historically received, which could have a material adverse effect on our liquidity.

17

We may incur costs of a material nature related to plant closings, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

If we must close manufacturing locations because of lost business or consolidation of manufacturing facilities, the employee termination costs, asset retirements, and other exit costs associated with the closure of these facilities may be significant. In certain circumstances, we may close a manufacturing facility that is operated under a lease agreement and we may continue to incur material costs in accordance with the lease agreement. We attempt to align production capacity with demand; however, we cannot provide assurance that plants will not have to be closed.

We are subject to environmental risks and requirements and we may incur significant costs, liabilities, and obligations associated with those risks and requirements.

We are subject to a variety of environmental and pollution control laws, regulations, and permits that govern, among other things, soil, surface water, and groundwater contamination; the generation, storage, handling, use, disposal, and transportation of hazardous materials; the emission and discharge of materials, including GHGs, into the environment; and health and safety. If we fail to comply with these laws, regulations, or permits, we could be fined or otherwise sanctioned by regulators or become subject to litigation. Environmental and pollution control laws, regulations, and permits, and the enforcement thereof, change frequently, have tended to become more stringent over time, and may necessitate substantial capital expenditures or operating costs.

Under certain environmental requirements, we could be responsible for costs relating to any contamination at our, or the Predecessor Company’s, currently or formerly owned or operated properties or third-party waste-disposal sites, even if we were not at fault. Soil and groundwater contamination is being addressed at certain of these locations. In addition to potentially significant investigation and cleanup costs, contamination can give rise to third-party claims for fines or penalties, natural resource damages, personal injury, or property damage.

We cannot provide assurance that our costs, liabilities, and obligations relating to environmental matters will not have a material adverse effect on our business, financial condition, results of operations, and cash flows.

A disruption in our information technology systems, including a disruption related to cybersecurity, could adversely affect our financial performance.

We rely on the accuracy, capacity and security of our information technology systems. Despite the security measures that we have implemented, including those measures related to cybersecurity, our systems could be breached or damaged by computer viruses, natural or man-made incidents or disasters or unauthorized physical or electronic access. A breach could result in business disruption, theft of our intellectual property, trade secrets or customer information and unauthorized access to personnel information. To the extent that our business is interrupted or data is lost, destroyed or inappropriately used or disclosed, such disruptions could materially and adversely affect our competitive position, relationships with our customers, financial condition, operating results and cash flows. In addition, we may be required to incur significant costs to protect against the damage caused by these disruptions or security breaches in the future.

Risk Factors Relating to Our Indebtedness

We have a substantial amount of indebtedness, which could have a material adverse effect on our financial health and our ability to fund our operations, obtain financing in the future, and react to changes in our business.

As of December 31, 2018, our total debt, net of debt issue costs, was $298.6 million. That indebtedness could:

•

adversely affect our stock price;

•

make it more difficult for us to satisfy our obligations under our financing arrangements;

18

•

increase our vulnerability to adverse economic and general industry conditions, including interest rate fluctuations, because a portion of our borrowings have, and will continue to have, variable interest rates;

•

require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, which would reduce the availability of our cash flow from operations to fund working capital, capital expenditures or other general corporate purposes;

•

limit our flexibility in planning for, or reacting to, changes in our business and industry;

•

place us at a disadvantage compared to competitors that may have proportionately less debt;

•

limit our ability to obtain additional debt or equity financing due to financial and restrictive covenants included in our debt agreements; and

•

increase our cost of borrowing.

Our primary debt instrument is the Term Loan Credit Facility which bears interest at (i) the Alternate Base Rate plus a margin of 1.75% or (ii) the Adjusted LIBO Rate (calculated by multiplying the applicable LIBOR by a statutory reserve rate, with a floor of 1.00%) plus a margin of 2.75%. As of December 31, 2018, the balance on the term loan was $303.5 million (net of a $1.7 million discount). If the LIBOR rates increase in excess of 1%, we will incur higher debt service requirements, which could adversely affect our cash flow and operating results. While we periodically enter into agreements designed to limit our exposure to higher interest rates, any such agreements do not offer complete protection from this risk.

We may not be able to refinance our debt on commercially reasonable terms, if at all.

We cannot provide assurance that we will be able to refinance, extend the maturity of, or otherwise amend the terms of our existing indebtedness, or that any refinancing, extension, or amendment will be on commercially reasonable terms. The indebtedness issued in any refinancing of our existing indebtedness could have a significantly higher rate of interest and greater costs than our existing indebtedness. There can be no assurance that the financial terms or covenants of any new credit facility or other indebtedness issued to refinance our existing indebtedness will be the same or as favorable as those under our existing indebtedness.

Our ability to complete a refinancing of our existing indebtedness prior to their respective maturities is subject to a number of conditions beyond our control. For example, if a disruption in the financial markets were to occur at the time that we intended to refinance this indebtedness, we might be restricted in our ability to access the financial markets. Also, if we were unable to make payments or refinance our debt or obtain new financing under these circumstances, we would have to consider other options, such as:

•

sales of assets;

•

sales of equity; or

•

negotiations with lenders and their respective agents to restructure the applicable debt.

Our debt instruments may restrict, and market or business conditions may limit, our ability to employ some of our options.

In addition, under our credit agreements, a change in control may lead the lenders to exercise remedies such as acceleration of the loan, termination of their obligations to fund additional advances and collection against the collateral securing such loan.

We may be unable to generate sufficient cash to service all of our indebtedness and we may be forced to take other actions to satisfy our obligations under such indebtedness, which may not be successful.

Our ability to make scheduled payments on or to refinance our debt obligations, certain of which have short-term maturities, depends on our financial condition and operating performance, which is subject to prevailing economic and competitive conditions, as well as financial, business, and other factors beyond our control. We cannot provide assurance that we will maintain a level of cash flows from operating activities sufficient to permit us to pay or refinance our indebtedness.

19

Our debt instruments restrict our current and future operations.

The financing agreements governing our indebtedness impose significant operating and financial restrictions on us. These restrictions limit our ability and the ability of our subsidiaries to, among other things:

•

incur or guarantee additional debt, incur liens, or issue certain equity;

•

declare or make distributions to our stockholders, repurchase equity, or prepay certain debt;

•

make loans or certain investments;

•

make certain acquisitions of equity or assets;

•

enter into certain transactions with affiliates;

•

enter into mergers, acquisitions, or other business combinations;

•

consolidate, transfer, sell, or otherwise dispose of certain assets;

•

use the proceeds from sales of assets and stock;

•

enter into sale and leaseback transactions;

•

enter into restrictive agreements;

•

make capital expenditures;

•

change our fiscal year;

•

amend or modify organizational documents; and

•

engage in businesses other than the businesses we currently conduct.

In addition to the restrictions and covenants listed above, certain of our financing documents require us, under certain circumstances, to comply with specified financial maintenance covenants. Any of these restrictions or covenants could limit our ability to plan for or react to market conditions or meet certain capital needs and could otherwise restrict our corporate activities.

Substantially all of our subsidiaries’ assets are pledged as collateral under our secured financing arrangements.

As of December 31, 2018, we had $298.6 million (net of a $1.7 million discount and $6 million of debt issue costs) of secured debt. Substantially all of our subsidiaries’ assets are pledged as collateral for our borrowings under our secured financing arrangements. Most of our domestic subsidiaries are either primary obligors or guarantors under a secured financing arrangement. Substantially all of our domestic subsidiaries’ assets are pledged as collateral for these obligations. If we are unable to repay all secured borrowings when due, whether at maturity or if declared due and payable following a default, the agent or the lenders, as applicable, would have the right to proceed against the collateral pledged to secure the indebtedness and may sell the assets pledged as collateral in order to repay those borrowings, which could have a material adverse effect on our businesses, financial condition, results of operations, and cash flows.

Risk Factors Relating to Our Common Stock

The price of our common stock may be volatile.

The price at which our common stock trades may be volatile due to a number of factors, including:

•

actual or anticipated fluctuations in our financial condition or annual or quarterly results of operations;

•

changes in investors’ or financial analysts’ perception of our business risks or condition of our business;

•

changes in, or our failure to meet, earnings estimates or other performance expectations of investors or financial analysts;

20

•

unfavorable commentary or downgrades of our stock by equity research analysts;

•

our success or failure in implementing our growth plans;

•

changes in the market valuations of companies viewed as similar to us;

•

changes or proposed changes in governmental regulations affecting our business;

•

changes in key personnel;

•

volume of our common stock trading in the market;

•

failure of securities analysts to cover our common stock;

•

future sales of our common stock; and

•

the granting or exercise of employee stock options or other equity awards.

Broad market fluctuations may result in a material decline in the market price of our common stock and you may not be able to sell your shares at prices you deem acceptable. In the past, following periods of volatility in the equity markets, securities class action lawsuits have been instituted against public companies. Such litigation, if instituted against us, could result in substantial cost and the diversion of management attention.

Shares eligible for future sale may cause the market price of our common stock to decline, even if our business is doing well.

Sales of substantial amounts of our common stock in the public market, or the perception that these sales may occur, could adversely affect the price of our common stock and could impair our ability to raise capital through the sale of additional equity securities. Our certificate of incorporation authorizes us to issue up to 350,000,000 shares of common stock and as of February 19, 2019 we had 20,611,952 shares of common stock outstanding.

Item 1B.   Unresolved Staff Comments

None.

Item 2.   Properties

We are headquartered in Livonia, Michigan in a 76,000 square foot facility, which we lease. This facility is utilized for management offices, as well as certain accounting, customer service, engineering, human resources, information technology, finance, purchasing, and treasury functions. We believe that this facility is suitable for the activities conducted there.

The disclosures below in this Item 2 exclude discontinued operations.

Our manufacturing is conducted in 14 manufacturing facilities strategically located throughout the United States, Mexico, and Brazil. Our manufacturing facilities are supported by five engineering and sales locations throughout the world.

21

The following table sets forth selected information regarding each of our facilities:

Facility	Country	Description of Use	Square Feet	Ownership
U.S. Locations	​	​	​	​
Auburn, Indiana	United States	Manufacturing	162,800	Leased
Bardstown, Kentucky (2 locations)	United States	Manufacturing	519,000	Owned/Leased(1)
Bellevue, Ohio (2 locations)	United States	Manufacturing	377,450	Leased
Bluffton, Ohio	United States	Manufacturing	196,200	Leased
Chicago, Illinois	United States	Manufacturing	418,200	Leased
Clinton Township, Michigan	United States	Manufacturing	392,300	Leased
Elkton, Michigan	United States	Manufacturing	1,100,000	Owned
Grand Rapids, Michigan	United States	Office	5,900	Leased
Fountain Inn, South Carolina	United States	Manufacturing	274,385	Leased
Livonia, Michigan	United States	Corporate Office/Technical Center	76,300	Leased
Madison, Mississippi	United States	Manufacturing	270,000	Leased
Meridian, Mississippi	United States	Manufacturing	420,000	Leased
Plymouth, Michigan	United States	Manufacturing	315,133	Leased
Shepherdsville, Kentucky	United States	Manufacturing	311,878	Leased
Non-U.S. Locations	​	​	​	​
Mexico City (4 locations)	Mexico	Manufacturing	192,663	Leased
Shanghai	China	Corporate Office/Technical Center	475	Leased
Hyderabad	India	Technical Center	8,700	Leased
Yokohama	Japan	Technical Center	2,500	Leased
Aruja	Brazil	Manufacturing/​Technical Center	334,880	Owned

(1)

Facility consists of two buildings — one building is leased and one building is owned.

Item 3.   Legal Proceedings

From time to time, we are involved in legal proceedings, claims, or investigations that are incidental to the conduct of our business. We vigorously defend ourselves against such claims. In future periods, we could be subject to cash costs or non-cash charges to earnings if a matter is resolved on unfavorable terms. However, although the ultimate outcome of any legal matter cannot be predicted with certainty, based on current information, including our assessment of the merits of the particular claims, we do not expect that our pending legal proceedings or claims will have a material impact on our future consolidated financial condition, results of operations, or cash flows.

Item 4.   Mine Safety Disclosures

Not applicable.

22

PART II

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

Market Information — Our common stock trades on the New York Stock Exchange under the symbol “TOWR”. As of February 19, 2019, we had 20,611,952 shares of common stock ($0.01 par value) outstanding, 4,351 beneficial shareholders, and three holders of record of our common stock. The transfer agent and registrar for our common stock is Broadridge Financial Solutions, Inc.

The following table presents the reported high and low closing prices per share of our common stock during 2018 and 2017:

​

2018

2017

High and Low Closing Prices per Share

High Price

Low Price

High Price

Low Price

Fourth Quarter

​

$

31.31

​

$

23.77

​

$

33.05

​

$

27.45

Third Quarter

​

​

35.45

​

​

30.25

​

​

27.45

​

​

21.55

Second Quarter

​

​

34.30

​

​

26.50

​

​

27.90

​

​

21.10

First Quarter

​

​

32.45

​

​

25.30

​

​

28.75

​

​

24.75

Performance Graph — The following chart shows the cumulative total stockholder return for our common stock from December 31, 2013 to December 31, 2018. The graph also shows the cumulative returns of the S&P 500 Index and the S&P Supercomposite Auto Parts and Equipment Index. The comparison assumes $100 was invested on December 31, 2013. Each of the indices shown assumes that all dividends paid were reinvested.

​

12/31/2013

12/31/2014

12/31/2015

12/31/2016

12/31/2017

12/31/2018

Tower International, Inc.

​

$

100.00

​

$

119.39

​

$

133.99

​

$

135.41

​

$

142.76

​

$

111.21

S&P 500

​

​

100.00

​

​

111.39

​

​

120.39

​

​

134.78

​

​

144.65

​

​

135.63

S&P 500 Supercomposite Auto Parts and Equipment Index

​

​

100.00

​

​

102.01

​

​

100.09

​

​

105.59

​

​

126.23

​

​

85.59

23

Dividends

Declaration Date	Cash Amount			Record Date	Payment Date
2018	​	​	​	​	​
October 18, 2018	​	$	0.13	November 8, 2018​	December 7, 2018​
July 17, 2018	​	​	0.12	August 9, 2018​	September 7, 2018​
April 19, 2018	​	​	0.12	May 10, 2018​	June 8, 2018​
January 26, 2018	​	​	0.12	February 9, 2018​	February 28, 2018​
2017	​	​	​	​	​
October 20, 2017	​	$	0.12	November 10, 2017​	December 8, 2017​
July 21, 2017	​	​	0.11	August 10, 2017​	September 8, 2017​
April 21, 2017	​	​	0.11	May 10, 2017​	June 9, 2017​
January 27, 2017	​	​	0.11	February 10, 2017​	February 28, 2017​
2016	​	​	​	​	​
October 21, 2016	​	$	0.11	November 10, 2016​	December 9, 2016​
July 22, 2016	​	​	0.10	August 10, 2016​	September 9, 2016​
April 22, 2016	​	​	0.10	May 10, 2016​	June 10, 2016​
January 29, 2016	​	​	0.10	February 10, 2016​	February 29, 2016​

The payment of future quarterly dividends is subject to the discretion of our Board of Directors and depends on various factors, including our net earnings, financial condition, cash requirements, future prospects, and other factors that our Board of Directors deems relevant to its analysis and decision making.

Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Equity Securities

The following table presents information regarding shares of our common stock repurchased during the fourth quarter of 2018.

Period	Total Number of Shares (or Units) Purchased		Weighted Average Price Paid per Share (or Unit)			Total Number of Shares (or Units) Purchased as of Publicly Announced Plan or Program		Dollar Value of Shares that May Yet Be Purchased Under Plan or Program(1)
October 1 to October 31, 2018	​	—	​	$	—	​	—	​	$	81,056,732
November 1 to November 30, 2018	​	—	​	$	—	​	—	​	$	81,056,732
December 1 to December 31, 2018	​	—	​	$	—	​	—	​	$	81,056,732
Total	​	—	​	$	—	​	—	​	​	​

(1)

This column includes the approximate dollar value of shares that remain authorized for repurchase under the Company’s Repurchase Program announced on June 17, 2016. Subject to applicable legal restrictions, shares may be repurchased in open market transactions, privately negotiated transactions, or in such other manner as shall be determined by the Chief Executive Officer, the Chief Financial Officer (the “Proper Officers”), or their designee. The timing, manner, price, and amount of repurchases will be determined at the Proper Officer’s discretion and the Repurchase Program shall terminate on the earlier of  (i) the first date on which a total of  $100 million of the Company’s shares of common stock shall have been purchased and (ii) such other date as shall be determined by the Company’s Board of Directors.

24

Item 6.   Selected Financial Data

The following tables set forth selected consolidated balance sheet data as of December 31, 2018 and 2017 and selected consolidated statement of operations data for the years ended December 31, 2018, 2017, and 2016, which have been derived from our audited Consolidated Financial Statements and related notes that are included in this Annual Report. The selected consolidated balance sheet data as of December 31, 2016, 2015, and 2014 and the selected consolidated statement of operations data for the years ended December 2014 and 2013 set forth below, have been derived from previously filed audited consolidated financial statements that are not presented in this Annual Report. As with our Consolidated Financial Statements for the years ended December 31, 2018, 2017, and 2016, we adjusted the information in the consolidated financial statements for the years ended December 31, 2015 and 2014, where appropriate, to account for discontinued operations.

You should read the following selected historical consolidated financial data in conjunction with the more detailed information contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations and our Consolidated Financial Statements and the related notes that we have presented elsewhere in this Annual Report.

​

2018

2017

2016

2015

2014

​

(in millions except share and per share data)

Statements of Operations Data:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Revenues

​

$

1,571.9

​

$

1,382.5

​

$

1,319.0

​

$

1,230.8

​

$

1,225.6

Cost of sales

​

​

1,378.0

​

​

1,193.3

​

​

1,144.9

​

​

1,083.4

​

​

1,073.3

Gross profit

​

​

193.9

​

​

189.2

​

​

174.1

​

​

147.4

​

​

152.3

Gross profit margin

​

​

12.3%

​

​

13.7%

​

​

13.2%

​

​

12.0%

​

​

12.4%

Selling, general, and administrative expenses

​

$

89.5

​

$

87.8

​

$

102.1

​

$

100.7

​

$

98.8

Amortization expense

​

​

0.4

​

​

0.4

​

​

0.4

​

​

0.2

​

​

0.4

Restructuring and asset impairment charges, net(a)

​

​

3.4

​

​

9.1

​

​

20.9

​

​

8.5

​

​

10.3

Operating income

​

​

100.6

​

​

91.9

​

​

50.7

​

​

38.0

​

​

42.8

Operating income margin

​

​

6.4%

​

​

6.6%

​

​

3.8%

​

​

3.1%

​

​

3.5%

Interest expense, net

​

$

18.8

​

$

9.7

​

$

17.2

​

$

19.9

​

$

30.0

Net periodic benefit income/(expense)(b)

​

​

(2.4)

​

​

2.2

​

​

(6.3)

​

​

(5.2)

​

​

(2.8)

Other expense

​

​

1.0

​

​

0.6

​

​

4.8

​

​

—

​

​

0.1

Income before provision for income taxes

​

​

78.4

​

​

83.8

​

​

22.5

​

​

12.8

​

​

9.8

Provision/(benefit) for income taxes(c)(d)(e)

​

​

1.3

​

​

44.1

​

​

8.8

​

​

(131.8)

​

​

(7.3)

Income from continuing operations

​

​

77.1

​

​

39.7

​

​

13.7

​

​

144.6

​

​

17.1

Income/(loss) from discontinued operations, net of tax(f)

​

​

(28.2)

​

​

8.0

​

​

25.6

​

​

51.2

​

​

10.0

Net income

​

​

48.9

​

​

47.7

​

​

39.3

​

​

195.8

​

​

27.1

Net income attributable to the noncontrolling interests

​

​

—

​

​

0.1

​

​

0.7

​

​

1.7

​

​

5.6

Net income attributable to Tower International, Inc.

​

$

48.9

​

$

47.6

​

$

38.6

​

$

194.1

​

$

21.5

Basic income/(loss) per share:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Income per share from continuing operations

​

$

3.75

​

$

1.93

​

$

0.62

​

$

6.77

​

$

0.56

Income/(loss) per share from discontinued operations

​

​

(1.38)

​

​

0.39

​

​

1.23

​

​

2.43

​

​

0.48

25

​

2018

2017

2016

2015

2014

​

(in millions except share and per share data)

Net income attributable to Tower International, Inc. per share

​

​

2.37

​

​

2.32

​

​

1.85

​

​

9.20

​

​

1.04

Weighted average basic shares outstanding (in thousands)

​

​

20,592

​

​

20,499

​

​

20,864

​

​

21,093

​

​

20,662

Diluted income/(loss) per share:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Income per share from continuing operations

​

$

3.67

​

$

1.90

​

$

0.61

​

$

6.67

​

$

0.54

Income/(loss) per share from discontinued operations

​

​

(1.34)

​

​

0.39

​

​

1.21

​

​

2.39

​

​

0.47

Net income attributable to Tower International, Inc. per share

​

​

2.33

​

​

2.29

​

​

1.82

​

​

9.06

​

​

1.01

Weighted average diluted shares outstanding (in thousands)

​

​

20,996

​

​

20,829

​

​

21,222

​

​

21,408

​

​

21,391

Balance Sheets Data:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Cash and cash equivalents

​

$

68.1

​

$

96.3

​

$

49.0

​

$

93.2

​

$

104.8

Total assets(g)

​

​

1,170.4

​

​

1,260.9

​

​

1,162.5

​

​

1,215.5

​

​

1,165.2

Total debt(g)(h)

​

​

298.6

​

​

350.8

​

​

359.8

​

​

411.6

​

​

441.9

Total stockholders’ equity

​

​

300.9

​

​

269.9

​

​

213.9

​

​

206.7

​

​

99.8

(a)

Included in 2016 is a $15 million fair value adjustment related to the planned sale of our Brazilian operations. During 2018, we reclassified the Brazilian operations as held and used.

(b)

During the years ended December 31, 2018, 2016, 2015 and 2014, non-cash actuarial pension losses of $5.2 million, $8.3 million, $9.1 million and $4.2 million, respectively, were recorded.

(c)

During the year ended December 31, 2015, included a $131 million deferred tax benefit primarily due to the release of the valuation allowance in the United States and Italy. Refer to Note 8 of our Consolidated Financial Statements for further information regarding our valuation allowances.

(d)

During the year ended December 31, 2017, included $27.2 million of deferred tax expense related to the revaluation of our U.S. deferred tax assets due to a reduction in the federal income tax rate as a result of U.S. Tax Reform and $2.4 million deferred tax expense to establish a valuation allowance on certain European deferred tax assets. Refer to Note 8 of our Consolidated Financial Statements for further discussion.

(e)

During the year ended December 31, 2018, included a $14.4 million deferred tax benefit due to the release of the valuation allowance in Brazil. Refer to Note 8 of our Consolidated Financial Statements for further discussion regarding our valuation allowances.

(f)

During the years ended December 31, 2018, 2016 and 2014, the Company recorded a loss in discontinued operations (net of tax) of  $44 million, $3.1 million and $22.9 million, respectively, related to the sale of discontinued operations.

(g)

For all years presented, total assets and total debt have been adjusted to reflect the adoption of FASB ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs, which changed the presentation of debt issuance costs from an asset to a direct deduction from long-term debt, and FASB ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, which changed the classification of all deferred tax assets and liabilities, along with any related valuation allowance, to noncurrent, rather than current.

(h)

Consists of short-term and long-term debt (net of debt issue costs), current portion of long-term debt, and capital lease obligations.

26

Item 7.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless otherwise expressly indicated, information with respect to discontinued operations has been excluded from the disclosures set forth in this Item 7.

Company Overview

We are a leading integrated manufacturer of engineered structural metal components and assemblies primarily serving original equipment manufacturers (“OEMs”). We offer our automotive customers a broad product portfolio, supplying body-structure stampings, frame and other chassis structures, as well as complex welded assemblies, for small and large cars, crossovers, pickups, and sport utility vehicles. Our products are manufactured at 14 facilities strategically located near our customers in the United States, Mexico, and Brazil. We support our manufacturing operations through five engineering and sales locations around the world. Our products are offered on a diverse mix of vehicle platforms.

We believe that our engineering, manufacturing, and program management capabilities, our competitive cost, our financial discipline, and our colleague engagement position us for long-term success.

Factors Affecting Our Industry

Our business and our revenues are primarily driven by the strength of the automotive industry, which tends to be cyclical and highly correlated to general macroeconomic conditions. The strength of the automotive market dictates the volume of purchases of our products by our OEM customers to ultimately satisfy consumer demand. We manufacture products pursuant to written agreements with each of our OEM customers. However, those agreements do not dictate the volume requirements of our customers; instead, OEMs monitor their inventory and the inventory levels of their dealers and adjust the volume of their purchases from us based on consumer demand for their products.

During 2018, industry production volumes decreased slightly from 2017 in the North American market, but increased in the Brazilian market. According to IHS, industry production is projected to remain relatively consistent in 2019 in the North American market and increase in the Brazilian market. Any such changes may be offset by changes in production levels for our customers’ products.

Factors Affecting Our Revenues

While overall production volumes are largely driven by economic factors outside of our direct control, we believe that the following elements of our business also impact our revenues:

•

Life cycle of our agreements:   Agreements for new models of vehicles normally cover the lifetime of the platform, often awarded two to three years before these models are marketed to the public, while agreements covering design improvements to existing automobiles have shorter expected life cycles, typically with shorter pre-production and development periods. Typically, once a supplier has been designated to supply components for a new platform, an OEM will continue to purchase those parts from the designated manufacturer for the life of the program. For any given agreement, our revenues depend, in part, upon the life cycle status of the applicable product platform.

•

Product pricing:Generally, our customers negotiate annual price reductions with us during the term of their contracts. When negotiated price reductions are expected to be retroactive, we accrue for such amounts as a reduction of revenues as products are shipped. The extent of our price reductions negatively affects our revenues. We have also been able to negotiate year-over-year price increases in select circumstances.

•

Steel pricing:   We require significant quantities of steel and aluminum in the manufacture of our products. The pricing of our products includes a component for these metals which increases as prices for these metals increase and decreases as prices for these metals decrease. Depending upon when a price change occurs, that change may have a disproportionate effect on our revenues within any particular fiscal period. We purchase a portion of our steel and aluminum from certain of our customers through various OEM resale programs, where our customers actually negotiate the cost for us. The purchases through customer resale programs have buffered the impact of price

27

swings associated with the procurement of these metals. The remainder of our steel and aluminum purchasing requirements are met through contracts with mills, in which we negotiate our own price and seek to pass through price increases and decreases to our customers.

•

Foreign exchange:Our foreign exchange transaction risk is limited because we generally purchase materials and produce products in the same currency in which we sell those products to our final customers. However, the translation of foreign currencies, primarily the Mexican Peso and Brazilian Real, back to U.S. dollars may have an impact on our revenues, results of operations, cash flows, or stockholders’ equity. Foreign exchange has an unfavorable impact on revenues when the U.S. dollar is relatively strong when compared to foreign currencies and a favorable impact on revenues when the U.S. dollar is relatively weak when compared to foreign currencies. The results of operations and financial condition of our businesses outside of the U.S. are principally measured in their respective local currency and translated into U.S. dollars. Assets and liabilities of our foreign operations are translated into U.S. dollars at foreign currency exchange rates in effect as of the end of each reporting period. Results of operations are translated at applicable average rates prevailing throughout the period. Translation gains or losses are reported as a separate component of accumulated other comprehensive income/(loss) in our Consolidated Statements of Equity/(Deficit). Gains and losses resulting from foreign currency transactions, the amounts of which were not material in any of the periods presented in this Annual Report, are included in net income.

Factors Affecting Our Expenses

Our largest expense is steel material, which is driven by the following factors:

•

Cost of steel:   We utilize steel and various purchased steel products in virtually all of our products. We refer to the “net steel impact” as the combination of the change in steel prices that are reflected in the price of our products, the change in the cost to procure steel from mills, and the change in our recovery of offal. Our strategy is to be economically neutral to steel pricing by having these factors offset each other. While we strive to achieve a neutral net steel impact, we are not always successful in achieving that goal, in large part due to timing differences. The timing of a change in the price for steel may occur in separate periods and if a change occurs, that change may have a disproportionate effect, within any particular fiscal period, on our product pricing, our steel costs, and the results of our sales of offal. Net imbalances in any one particular fiscal period may be reversed in a subsequent fiscal period, although we cannot provide assurances that, or when, these reversals will occur. Over the past several years, we have not experienced a material net impact from these factors.

•

Purchase of steel:   As noted above, we purchase a portion of our steel from certain of our customers through various OEM resale programs and the remaining portion of our steel directly from steel mills. Whether our customer negotiates the cost of steel for us in a customer resale program or we negotiate the cost of steel with the mills, the price we pay is charged directly to our cost of sales, just as the component of product pricing relating to steel is included within our revenues.

•

Sale of offal:A by-product of our production process is the generation of offal. We typically sell offal in secondary markets, which are influenced by similar market forces. We generally share our recoveries from sales of offal with our customers either through scrap sharing agreements, in cases in which we are participating in resale programs, or through product pricing, in cases in which we purchase steel directly from steel mills. In either situation, we may be affected by the fluctuation in scrap steel prices, either positively or negatively, in relation to our various customer agreements. As offal prices generally increase or decrease as steel prices increase or decrease, our sale of offal may mitigate the impact of the volatility of steel price increases, as well as limit the benefits reaped from steel price declines. Recoveries related to the sales of offal reduce cost of sales.

Adjusted EBITDA

We use the term Adjusted EBITDA throughout this Annual Report. We define Adjusted EBITDA as net income/(loss) before interest, taxes, depreciation, amortization, restructuring items, and other adjustments

28

described in the reconciliations provided in this report. Adjusted EBITDA is not a measure of performance defined in accordance with U.S. GAAP. We use Adjusted EBITDA as a supplement to our GAAP results in evaluating our business.

Adjusted EBITDA is included in this Annual Report because it is one of the principal factors upon which our management assesses performance. Our Chief Executive Officer measures the performance of our segments on the basis of Adjusted EBITDA. As an analytical tool, Adjusted EBITDA assists us in comparing our performance over various reporting periods on a consistent basis because it excludes items that we do not believe reflect our core operating performance.

We believe that Adjusted EBITDA is useful in evaluating our performance as it is a commonly used financial metric for measuring and comparing the operating performance of companies in our industry. We believe that the disclosure of Adjusted EBITDA offers an additional financial metric that, when coupled with the GAAP results and the reconciliation to GAAP results, provides a more complete understanding of our results of operations and the factors and trends affecting our business.

Adjusted EBITDA should not be considered as an alternative to net income/(loss) as an indicator of our performance, as an alternative to net cash provided by operating activities as a measure of liquidity, or as an alternative to any other measure prescribed by GAAP. There are limitations to using non-GAAP measures such as Adjusted EBITDA. Although we believe that Adjusted EBITDA may make an evaluation of our operating performance more consistent because it removes items that do not reflect our core operations, other companies in our industry may define Adjusted EBITDA differently than we do and, as a result, it may not be comparable to similarly titled measures used by other companies in our industry, and Adjusted EBITDA excludes certain financial information that some may consider important in evaluating our performance.

We compensate for these limitations by providing disclosure of the differences between Adjusted EBITDA and GAAP results, including a reconciliation of Adjusted EBITDA to GAAP results, to enable investors to perform their own analysis of our operating results. For a reconciliation of consolidated Adjusted EBITDA to its most directly comparable GAAP measure, net income/(loss), see “Results of Operations” below.

Because of these limitations, Adjusted EBITDA should not be considered as a measure of the income generated by our business or discretionary cash available to us to invest in the growth of our business. Our management compensates for these limitations by analyzing both our GAAP results and Adjusted EBITDA.

Our Segments

Our management reviews our operating results and makes decisions based upon two operating segments, North America and Brazil, which we aggregate into one reportable segment. Refer to Note 13 to our Consolidated Financial Statements for further information regarding our operating and reportable segments.

Results of Operations — Year Ended December 31, 2018 Compared with the Year Ended December 31, 2017

Automobile production volumes remained consistent in our major market during the year ended December 31, 2018 compared to the year ended December 31, 2017. The following table presents production volumes in specified regions according to IHS for the year ended December 31, 2018 compared to the year ended December 31, 2017 (in millions of units produced):

​	North America		Brazil
2018 production volumes	​	17.0	​	2.7
2017 production volumes	​	17.1	​	2.6
Increase/(decrease)	​	(0.1)	​	0.1
Percentage change	​	(0.6)%	​	4.0%

29

The following table presents selected financial information for the years ended December 31, 2018 and 2017 (in millions).

​	Year Ended December 31,
​	2018			2017
Revenues	​	$	1,571.9	​	$	1,382.5
Cost of sales	​	​	1,378.0	​	​	1,193.3
Gross profit	​	​	193.9	​	​	189.2
Selling, general, and administrative expenses	​	​	89.5	​	​	87.8
Amortization expense	​	​	0.4	​	​	0.4
Restructuring and asset impairment charges	​	​	3.4	​	​	9.1
Operating income	​	​	100.6	​	​	91.9
Interest expense, net	​	​	18.8	​	​	9.7
Net periodic benefit income/(expense)	​	​	(2.4)	​	​	2.2
Other expense	​	​	1.0	​	​	0.6
Provision for income taxes	​	​	1.3	​	​	44.1
Income/(loss) from discontinued operations, net of tax	​	​	(28.2)	​	​	8.0
Noncontrolling interest, net of taxes	​	​	—	​	​	0.1
Net income attributable to Tower International, Inc.	​	$	48.9	​	$	47.6

Comparison of Periods — GAAP Analysis of Consolidated Results

Revenues

Total revenues increased during the year ended December 31, 2018 by $189.4 million, or 13.7%, from the year ended December 31, 2017, reflecting primarily higher volume ($184.7 million) and favorable pricing ($11.5 million), primarily related to steel, offset partially by unfavorable foreign exchange ($6.8 million). We have experienced revenue growth in excess of industry production volumes due to major new business awards.

Gross Profit

When we analyze our total gross profit, we separately categorize external factors — volume, product mix, and foreign exchange — from all other factors that impact gross profit, which we refer to as “other factors”. When we refer to “mix” we are referring to the relative composition of revenues and profitability of the products we sell in any given period. When we refer to “pricing and economics” we are referring to (i) the impact of adjustments in the pricing of particular products, which we refer to as product pricing; (ii) the impact of steel price changes, taking into account the component of our product pricing attributable to steel, the cost of steel included in our cost of sales, and the amounts recovered on the sale of offal, which in total we refer to as the net steel impact; and (iii) the impact of inflation and changes in operating costs, such as labor, utilities, and fuel, which we refer to as economics.

Total gross profit increased by $4.7 million from the year ended December 31, 2017 while our gross profit margin decreased from 13.7% during 2017 to 12.3% during 2018. The increase in gross profit reflected higher volume ($43.8 million) offset partially by higher fixed costs to support new business ($9.2 million), unfavorable product mix ($6 million), and unfavorable foreign exchange ($0.6 million, excluding the impact on depreciation). All other factors were net unfavorable by $23.3 million. Unfavorable pricing and economics ($14.2 million), lease expense related to certain manufacturing equipment ($11.1 million), higher launch costs ($7.5 million), and higher depreciation ($4.8 million), were offset partially by favorable efficiencies ($9.2 million) and favorable timing of commercial and vendor settlements. The increase in depreciation was due to increased levels of capital spending in 2017 and 2018. The decrease in gross profit margin was attributable primarily to lease expense related to certain manufacturing equipment and higher depreciation, as described above.

30

Selling, General, and Administrative Expenses (“SG&A”)

Total SG&A increased $1.7 million from the year ended December 31, 2017, reflecting primarily higher compensation expense.

Restructuring and Asset Impairment Expense

Total restructuring and asset impairment expense decreased $5.7 million from the year ended December 31, 2017, which reflects the charges incurred related to severance charges to reduce corporate overhead and fixed costs. During 2018 and 2017, we took numerous actions to better align the management teams to the remaining footprint of the continuing operations. These actions included a shift in composition of the executive leadership team as well as certain changes within the Corporate and Regional management teams.

Interest Expense, net

Interest expense, net increased $9.1 million from the year ended December 31, 2017, reflecting primarily favorable non-cash mark-to-market changes of  $4.9 million on our derivative financial instruments in 2017, higher interest expense of  $1.8 million related to the funding of certain equipment leases, and the acceleration of the amortization of debt issue costs and original issue discount of  $1 million in connection with the $50 million payment on the Term Loan Credit Facility during 2018.

Net Periodic Benefit Income/(Expense)

We recorded net periodic benefit expense of  $2.4 million for the year ended December 31, 2018, as compared with income of  $2.2 million for the year ended December 31, 2017, reflecting primarily a mark-to-market actuarial loss of  $5.2 million on our Pension Plan in 2018. As discussed in Note 2 to the Consolidated Financial Statements, we adopted Accounting Standard Update (“ASU”) No. 2017-07 on January 1, 2018. The new standard requires that net periodic pension cost and net periodic postretirement benefit cost be reported within net periodic benefit income in the Consolidated Statement of Operations.

Other Expense

Other expense increased $0.4 million from the year ended December 31, 2017, reflecting $1 million in costs incurred during 2018 to support the investigation of potential corporate transactions that did not transpire. Costs of  $0.6 million were incurred during 2017 to support the refinancing of the Company’s long-term debt.

Provision for Income Taxes

Income tax expense from continuing operations decreased $42.8 million from the year ended December 31, 2017, for an overall effective tax rate of 1.6%. In 2018, we recorded a tax benefit of  $14.4 million related to the release of valuation allowances on the deferred tax assets of our Brazilian operations. Excluding the $14.4 million tax benefit, our effective tax rate for 2018 was 16.1%. In 2017, we recorded a one-time deferred tax expense of  $27.2 million relating to the revaluation of our U.S. deferred tax assets after the enactment of the Tax Cuts and Jobs Act (the “TCJA”). Excluding this charge, our adjusted 2017 effective tax rate was 20.2%. The adjusted effective tax rate decreased in 2018 related primarily to the enactment of the TCJA which reduced the federal statutory tax rate from 35% to 21%.

In 2018, we continued to generate significant research tax credits from new launch activities in the U.S., which reduced our effective tax rate compared to the statutory rate. We do not expect to generate a similar amount of credits in 2019; therefore, we estimate that our effective tax rate will be higher in 2019 compared to 2018.

The availability of U.S. net operating loss carryforwards generated in 2007 – 2013 has effectively eliminated our U.S. cash tax liability, except for immaterial payments for state income taxes. We do not expect to incur a material U.S. cash tax liability until at least 2022 due to the utilization of remaining net operating losses carryforwards, research credits, and by electing to deploy favorable machinery and equipment expensing provisions that are allowed under the TCJA.

31

In 2017, the Internal Revenue Service (“IRS”) performed an examination of the 2015 tax year, which was completed in January 2018, resulting in no adjustments. As of December 31, 2018, there are no open audits.

Income from Discontinued Operations

As noted above, during the fourth quarter of 2018 we entered into an agreement to sell our European operations. We also completed the sale of our remaining Chinese business operations during the second quarter of 2018. Our European and Chinese business operations have been presented as discontinued operations in our Consolidated Financial Statements in accordance with FASB ASC No. 205, Discontinued Operations. We recorded a loss from discontinued operations, net of tax, of  $28.2 million for the year ended December 31, 2018, as compared with income of  $8 million for the year ended December 31, 2017. The $28.2 million loss incurred during 2018 includes a fair value adjustment related to Europe of  $44 million upon classification as discontinued operations.

Noncontrolling Interest, Net of Tax

The adjustment to our earnings required to give effect to the elimination of noncontrolling interests decreased by $0.1 million from the year ended December 31, 2017, reflecting decreased earnings in our consolidated Chinese joint venture during 2017 as a result of the sale in the second quarter of 2017.

Comparison of Periods — Non-GAAP Analysis of Adjusted EBITDA

A reconciliation of net income attributable to Tower International, Inc. to Adjusted EBITDA, for the periods presented is set forth below (in millions):

​	Year Ended December 31,
​	2018			2017
Net income attributable to Tower International, Inc.	​	$	48.9	​	$	47.6
Interest expense, net	​	​	18.8	​	​	9.7
Net periodic benefit (income)/expense	​	​	2.4	​	​	(2.2)
Other expenses	​	​	1.0	​	​	0.6
Provision for income taxes	​	​	1.3	​	​	44.1
(Income)/loss from discontinued operations, net of tax	​	​	28.2	​	​	(8.0)
Noncontrolling interest, net of taxes	​	​	—	​	​	0.1
Operating income	​	​	100.6	​	​	91.9
Restructuring and asset impairment charges, net	​	​	3.4	​	​	9.1
Depreciation and amortization	​	​	54.8	​	​	50.5
Acquisition costs and other	​	​	0.2	​	​	0.2
Long-term compensation expense(a)	​	​	7.7	​	​	5.6
Lease expenses(b)	​	​	11.1	​	​	—
Adjusted EBITDA	​	$	177.7	​	$	157.3

(a)

Represents the compensation expense related to stock options, restricted stock units, and accruals from certain compensation programs intended to benefit our long-term success and growth. The compensation charges are incurred during the applicable vesting periods of each program.

(b)

Represents lease expense incurred related to certain manufacturing equipment that is being leased. Beginning in 2019, FASB ASC No. 842, Leases, will change the financial reporting for leases. Certain of our manufacturing equipment leases currently classified as operating leases will be considered financing leases under the new standard which will require us to record the ROU asset as additional property, plant, and equipment and the associated liability as lease debt.

32

The following table presents revenues (a GAAP measure) and Adjusted EBITDA (a non-GAAP measure) for the years ended December 31, 2018 and 2017 (in millions) as well as explanations of variances:

​	Revenues			Adjusted EBITDA(c)
2018 results	​	$	1,571.9	​	$	177.7
2017 results	​	​	1,382.5	​	​	157.3
Variance	​	$	189.4	​	$	20.4
Variance attributable to:	​			​
Volume and mix	​	$	184.7	​	$	28.6
Foreign exchange	​	​	(6.8)	​	​	(0.6)
Pricing and economics	​	​	11.5	​	​	(14.4)
Efficiencies	​	​	—	​	​	9.2
Selling, general, and administrative expenses and other items(d)	​	​	—	​	​	(2.4)
Total	​	$	189.4	​	$	20.4

(c)

We have presented a reconciliation of net income attributable to Tower International, Inc. to Adjusted EBITDA above.

(d)

When we refer to “selling, general, and administrative expenses and other items”, the “other items” refer to (i) savings which we generate after implementing restructuring actions, (ii) the costs associated with launching new products, and (iii) one-time items which may include reimbursement of costs.

Adjusted EBITDA

When we analyze Adjusted EBITDA, we separately categorize external factors — volume, product mix, and foreign exchange — and all other factors which impact Adjusted EBITDA, which we refer to as “other factors.”

Adjusted EBITDA increased by $20.4 million, or 13%, from the year ended December 31, 2017, reflecting primarily higher volume and mix ($28.6 million) offset partially by unfavorable foreign exchange ($0.6 million). Volume and mix consisted of higher volume ($43.8 million) offset partially by higher fixed costs to support new business ($9.2 million) and unfavorable mix ($6 million). All other factors were net unfavorable by $7.6 million. Unfavorable pricing and economics ($14.4 million) and unfavorable SG&A expenses and other items ($2.4 million), were offset partially by favorable efficiencies ($9.2 million). SG&A expenses and other items reflected primarily higher launch costs to support new business ($7.5 million) offset partially by favorable commercial and vendor settlements.

Results of Operations — Year Ended December 31, 2017 Compared with the Year Ended December 31, 2016

Automobile production volumes decreased during the year ended December 31, 2017 in our major market compared to the year ended December 31, 2016. The following table presents production volumes in specified regions according to IHS for the year ended December 31, 2017 compared to the year ended December 31, 2016 (in millions of units produced):

​	North America		Brazil
2017 production volumes	​	17.1	​	2.6
2016 production volumes	​	17.8	​	2.1
Increase/(decrease)	​	(0.8)	​	0.5
Percentage change	​	(4.3)%	​	26.1%

33

The following table presents select financial information for the years ended December 31, 2017 and 2016 (in millions).

​	Year Ended December 31,
​	2017			2016
Revenues	​	$	1,382.5	​	$	1,319.0
Cost of sales	​	​	1,193.3	​	​	1,144.9
Gross profit	​	​	189.2	​	​	174.1
Selling, general, and administrative expenses	​	​	87.8	​	​	102.1
Amortization	​	​	0.4	​	​	0.4
Restructuring and asset impairments	​	​	9.1	​	​	20.9
Operating income	​	​	91.9	​	​	50.7
Interest expense, net	​	​	9.7	​	​	17.2
Net periodic benefit income/(expense)	​	​	2.2	​	​	(6.3)
Other expense	​	​	0.6	​	​	4.8
Provision for income taxes	​	​	44.1	​	​	8.8
Income from discontinued operations, net of tax	​	​	8.0	​	​	25.6
Noncontrolling interest, net of taxes	​	​	0.1	​	​	0.7
Net income attributable to Tower International, Inc.	​	$	47.6	​	$	38.6

Comparison of Periods — GAAP Analysis of Consolidated Results

Revenues

Total revenues increased during the year ended December 31, 2017 by $63.5 million, or 4.8%, from the year ended December 31, 2016, reflecting higher volume ($60.1 million) and favorable foreign exchange ($4.3 million), offset partially by unfavorable pricing ($0.9 million). We have experienced revenue growth in excess of industry production volumes due to major new business awards.

Gross Profit

Total gross profit increased by $15.1 million from the year ended December 31, 2016 and our gross profit margin increased from 13.2% during 2016 to 13.7% during 2017. The increase in gross profit reflected higher volume ($17.4 million), favorable mix ($1.7 million), and favorable foreign exchange ($0.2 million), offset partially by higher fixed costs to support new programs ($3.1 million). All other factors were net unfavorable ($1.1 million). Unfavorable pricing and economics ($11.3 million), higher depreciation ($2.6 million), higher launch costs ($2.2 million), and unfavorable commercial and vendor settlements, were offset partially by favorable efficiencies ($20.4 million). The increase in depreciation was due to increased levels of capital spending in 2016 and 2017.

Selling, General, and Administrative Expenses (“SG&A”)

Total SG&A decreased $14.3 million from the year ended December 31, 2016, reflecting primarily lower long-term incentive compensation costs primarily related to non-recurring CEO retirement expenses that were accrued in 2016 and lower compensation costs primarily due to restructuring actions described below.

Restructuring and Asset Impairment Expense

Total restructuring and asset impairment expense decreased $11.8 million from the year ended December 31, 2016. During 2017, the charges incurred related to severance charges to reduce corporate overhead and ongoing maintenance expense of facilities closed as a result of prior actions. Additionally, we took numerous actions to better align the management teams to the remaining footprint of the continuing operations. These actions included a shift in composition of the executive leadership team as well as certain

34

changes within the Corporate and Regional management teams. During 2016, the charges incurred related to the buyout of a lease on a previously closed facility, ongoing maintenance expense of facilities closed as a result of prior actions, and severance charges to reduce fixed costs. Additionally, we recorded a $15 million impairment charge during 2016 upon classifying our Brazilian operations as held for sale. During 2018, we reclassified the Brazilian operations as held and used.

Interest Expense, net

Interest expense, net decreased $7.5 million, or 43.2%, from the year ended December 31, 2016, reflecting primarily favorable non-cash mark-to-market changes of  $7.3 million on our derivative financial instruments.

Net Periodic Benefit Income/(Expense)

We recorded net periodic benefit income of  $2.2 million for the year ended December 31, 2017, as compared with expense of  $6.3 million for the year ended December 31, 2016, reflecting primarily a mark-to-market actuarial loss of  $8.3 million on our Pension Plan in 2016. As discussed in Note 2 to the Consolidated Financial Statements, we adopted ASU No. 2017-07 on January 1, 2018. The new standard requires that net periodic pension cost and net periodic postretirement benefit cost be reported within net periodic benefit income in the Consolidated Statement of Operations.

Other Expense

Other expense decreased $4.2 million from the year ended December 31, 2016, reflecting the non-recurrence of costs incurred during 2016 to support a potential divestiture that did not occur. The costs incurred in 2017 related to certain costs incurred to support the amendment of our Term Loan.

Provision for Income Taxes

Income tax expense from continuing operations increased $35.3 million from the year ended December 31, 2016, for an overall effective tax rate of 52.6%. Our adjusted effective rate was 20.2% after excluding the one-time charge of  $27.2 million due to the revaluation of our deferred tax assets as described below. The overall effective tax rate for 2016 was 39%; however, we did not record a deferred tax benefit on the impairment charge recorded related to our Brazilian operations because it was more likely than not we would not obtain a future benefit for these losses. Our adjusted effective rate for 2016 would have been 16.3% if we had recorded a tax benefit on the $15 million impairment charge recorded in 2016.

On December 22, 2017, the TCJA was enacted into federal law. The TCJA includes significant changes to the U.S. corporate income tax system. Among other items, the TCJA lowered the corporate income tax rate from 35% to 21% causing a revaluation of deferred tax assets and created a new modified territorial tax system exempting foreign profits from U.S. taxation with some exceptions. It also required a one-time deemed repatriation of accumulated foreign earnings for the year ended December 31, 2017. To determine the amount of the deemed repatriation and any associated repatriation tax, we had to determine, in addition to other factors, the amount of post-1986 profits or losses of each foreign subsidiary, as well as the amount of foreign income taxes paid on such profits or losses. We have filed our 2017 federal income tax return and have determined that no transition tax inclusion is necessary. Based on current law and guidelines issued by the IRS, we do not believe that a measurement-period adjustment is required. In 2018, the FASB issued guidance under ASU 2018-02 that permits companies to reclassify stranded tax effects caused by the TCJA from accumulated other comprehensive income to retained earnings. The ASU is not required to be adopted and we elected not to adopt this ASU.

The availability of U.S. net operating loss carryforwards generated in 2007 – 2013 has enabled the Company to effectively eliminate our U.S. cash tax liability, except for immaterial amounts for U.S. alternative minimum tax and state income taxes. We are also generating significant federal research credits related to U.S. launch activities.

35

Income from Discontinued Operations

As noted above, during the fourth quarter of 2018 we entered into an agreement to sell our European operations. We also completed the sale of our remaining Chinese business operations during the second quarter of 2018. Our European and Chinese business operations have been presented as discontinued operations in our Consolidated Financial Statements in accordance with FASB ASC No. 205, Discontinued Operations. We recorded income from discontinued operations, net of tax, of  $8 million for the year ended December 31, 2017, as compared with income of  $25.6 million for the year ended December 31, 2016.

Noncontrolling Interest, Net of Tax

The adjustment to our earnings required to give effect to the elimination of noncontrolling interests decreased by $0.6 million from the year ended December 31, 2016, reflecting decreased earnings in our consolidated Chinese joint venture during 2017 as a result of the sale in the second quarter of 2017.

Comparison of Periods — Non-GAAP Analysis of Adjusted EBITDA

A reconciliation of Adjusted EBITDA to net income/(loss) attributable to Tower International, Inc. for the periods presented is set forth below (in millions):

​	Year Ended December 31,
​	2017			2016
Net income attributable to Tower International, Inc.	​	$	47.6	​	​	38.6
Interest expense, net	​	​	9.7	​	​	17.2
Net periodic benefit (income)/expense	​	​	(2.2)	​	​	6.3
Other expenses(a)	​	​	0.6	​	​	4.8
Provision for income taxes	​	​	44.1	​	​	8.8
Income from discontinued operations, net of tax	​	​	(8.0)	​	​	(25.6)
Noncontrolling interest, net of taxes	​	​	0.1	​	​	0.7
Operating income	​	​	91.9	​	​	50.7
Restructuring and asset impairments(b)	​	​	9.1	​	​	20.9
Depreciation and amortization	​	​	50.5	​	​	47.9
Acquisition costs and other	​	​	0.2	​	​	0.1
Long-term compensation expense(c)	​	​	5.6	​	​	13.6
Adjusted EBITDA	​	$	157.3	​	$	133.2

(a)

The expense recorded in 2016 represents costs incurred to support an investigation into a potential divestiture that did not occur.

(b)

Included in 2016 is a $15 million fair value adjustment related to the planned sale of our Brazilian operations. During 2018, we reclassified the Brazilian operations as held and used.

(c)

Represents the compensation expense related to stock options, restricted stock units, one-time CEO compensation awards, and certain compensation programs intended to benefit our long-term success and growth. The compensation charges are incurred during the applicable vesting periods of each program.

36

The following table presents revenues (a GAAP measure) and Adjusted EBITDA (a non-GAAP measure) for the years ended December 31, 2017 and 2016 (in millions) as well as an explanation of variances:

​	Revenues			Adjusted EBITDA(d)
2017 results	​	$	1,382.5	​	$	157.3
2016 results	​	​	1,319.0	​	​	133.2
Variance	​	$	63.5	​	$	24.1
Variance attributable to:	​	​	​	​	​	​
Volume and mix	​	$	60.1	​	$	16.0
Foreign exchange	​	​	4.3	​	​	0.2
Pricing and economics	​	​	(0.9)	​	​	(9.2)
Efficiencies	​	​	—	​	​	20.4
Selling, general, and administrative expenses and other items(e)	​	​	—	​	​	(3.3)
Total	​	$	63.5	​	$	24.1

(d)

We have presented a reconciliation of net income attributable to Tower International, Inc. to Adjusted EBITDA above.

(e)

When we refer to “selling, general, and administrative expenses and other items”, the “other items” refer to (i) savings which we generate after implementing restructuring actions, (ii) the costs associated with launching new products, and (iii) one-time items which may include reimbursement of costs.

Adjusted EBITDA

Adjusted EBITDA increased by $24.1 million, or 18.1%, from the year ended December 31, 2016, reflecting higher volume and mix ($16 million) and favorable foreign exchange ($0.2 million). Volume and mix consisted of higher volume ($20.1 million) offset partially by higher fixed costs to support new programs ($4.1 million). All other factors were net favorable ($7.9) million. Favorable efficiencies ($20.4 million) were offset partially by unfavorable pricing and economics ($9.2 million) and unfavorable SG&A expenses and other items ($3.3 million). SG&A expenses and other items reflected primarily higher launch costs ($2.2 million).

Restructuring and Asset Impairments

The following table sets forth our net restructuring and asset impairment charges by type for the periods presented (in millions):

​	Year Ended December 31,
​	2018			2017			2016
Employee termination costs	​	$	3.1	​	$	7.9	​	$	1.3
Other exit costs	​	​	0.3	​	​	1.2	​	​	4.6
Asset impairment charges	​	​	—	​	​	—	​	​	15.0
Total restructuring and asset impairment charges, net	​	$	3.4	​	$	9.1	​	$	20.9

We restructure our global operations in an effort to align our capacity with demand and to reduce our costs. Restructuring costs include employee termination benefits and other incremental costs resulting from restructuring activities. These incremental costs principally include equipment and personnel relocation costs. Restructuring costs are recognized in our Consolidated Financial Statements in accordance with FASB ASC No. 420, Exit or Disposal Obligations, and are presented in our Consolidated Statements of Operations as restructuring and asset impairment charges, net. We believe the restructuring actions discussed below will help our efficiency and results of operations on a going forward basis.

37

The charges incurred during 2018 related to severance charges to reduce corporate overhead and ongoing maintenance expense of facilities closed as a result of prior actions. During the second quarter of 2018, we amended the lease agreements related to closed facilities. As a result of these amendments, we will no longer record material restructuring expense related to the closed facilities.

The charges incurred during 2017 related to severance charges to reduce corporate overhead and ongoing maintenance expense of facilities closed as a result of prior actions. During 2017, we took numerous actions to better align the management teams to the remaining footprint of the continuing operations. These actions included a shift in composition of the executive leadership team as well as certain changes within the corporate and regional management teams.

The charges incurred during 2016 related to the buyout of a lease on a previously closed facility, ongoing maintenance expense of facilities closed as a result of prior actions and severance charges to reduce fixed costs. Additionally, we recorded a $15 million impairment charge upon classifying our remaining Brazilian operations as held for sale. During 2018, we reclassified the Brazilian operations as held and used.

Liquidity and Capital Resources

General

We generally expect to fund expenditures for operations, administrative expenses, capital expenditures, and debt service obligations with internally generated funds from operations and we generally expect to satisfy working capital needs from time-to-time with borrowings under our revolving credit facility or cash on hand. As of December 31, 2018, we had available liquidity of  $259.9 million, which we believe is adequate to fund our working capital requirements for at least the next twelve months. We believe that we will be able to meet our debt service obligations and fund operating requirements for at least the next twelve months with cash flow from operations, cash on hand, potential operating lease arrangements, and borrowings under our revolving credit facility.

On June 17, 2016, we announced our Board of Directors’ authorization to repurchase up to $100 million of the Company’s issued and outstanding common stock from time to time in the open market, or in privately negotiated transactions. We expect to fund such repurchases from cash flow from operations, cash on hand, asset dispositions, and borrowings under our revolving credit facility. To date, the Company repurchased a total of 829,648 shares of common stock at an aggregate cost of  $18.9 million; all such purchases occurred during the year ended December 31, 2016.

Cash Flows and Working Capital

The following table shows the components of our cash flows from continuing operations for the periods presented (in millions):

​	Year Ended December 31,
​	2018			2017			2016
Net cash provided by/(used in):	​	​	​	​	​	​	​	​	​
Operating activities	​	$	98.2	​	$	127.0	​	$	97.2
Investing activities	​	​	(63.9)	​	​	(51.3)	​	​	(67.6)
Financing activities	​	​	(60.5)	​	​	(28.4)	​	​	(75.3)

Net Cash Provided by Operating Activities

During the year ended December 31, 2018, we generated $98.2 million of cash flow from operations, compared with $127 million during the year ended December 31, 2017. The decrease in cash provided was attributable primarily to lower tooling reimbursements from customers.

During the year ended December 31, 2017, we generated $127 million of cash flow from operations, compared with $97.2 million during the year ended December 31, 2016. The primary reasons for this increase were increased pre-tax earnings and a favorable net tooling position.

38

Net Cash Used in Investing Activities

Net cash utilized in investing activities was $63.9 million during 2018, compared to $51.3 million during 2017. The $12.6 million increase in cash utilized was attributable primarily to higher capital expenditures for new programs and lower proceeds received from the sale of our Chinese joint ventures compared to 2017, offset partially by the net proceeds received for the sale-leaseback of one of our manufacturing facilities.

Net cash utilized in investing activities was $51.3 million during 2017, compared to $67.6 million during 2016. The $16.3 million decrease in cash utilized reflects decreased capital expenditures, related primarily to the timing of program launches, and the proceeds received from the sale of a China joint venture.

Net Cash Used In Financing Activities

Net cash used in financing activities was $60.5 million during 2018 compared to $28.4 million during 2017. The $32.1 million increase in cash utilized was attributable primarily to the $50 million repayment of our Term Loan Credit Facility offset partially by lower borrowings on our other debt instruments in 2018.

Net cash used in financing activities was $28.4 million during 2017, compared to $75.3 million during 2016. The $46.9 million decrease in cash utilized was attributable primarily to the non-recurrence of a $50 million repayment on the Term Loan Credit facility during the first quarter of 2016 and lower treasury stock purchases during 2017.

Working Capital

We manage our working capital by monitoring key metrics principally associated with inventory, accounts receivable, and accounts payable. Our quarterly average inventory days on hand increased from 19 days during the fourth quarter of 2017 to 20 days during the fourth quarter of 2018; and our inventory increased from $57.5 million at December 31, 2017 to $69.4 million at December 31, 2018, reflecting primarily the ramp up of production on recently awarded business.

Our accounts receivable balance decreased from $124 million as of December 31, 2017 to $113.1 million as of December 31, 2018. The decreased accounts receivable reflects primarily timing of revenue within the fourth quarter.

Our accounts payable balance decreased from $213.3 million as of December 31, 2017 to $188.8 million as of December 31, 2018. The change reflects primarily a decrease due to the timing of payments related to capital expenditures and customer-owned tooling and a decrease of trade accounts payable.

Our working capital usage is seasonal in nature. During the first half of the year, production and sales typically increase substantially, which causes our working capital to increase because our accounts receivable and inventory increase. In addition, we make our annual incentive bonus plan payments during the second quarter. In the second half of the year, production and sales typically decline as a result of scheduled customer shutdowns. The lower production and sales generally results in a reduction of accounts receivables and inventory, which decreases our working capital.

Our working capital is also impacted by our net position in regard to tooling owned by our customers. Tooling costs represent costs incurred by us in the development of new tooling used in the manufacture of our products. Generally, when a customer awards a contract to us, the customer agrees to reimburse us for certain of our tooling costs. As the tooling is developed, we experience cash outflows because we bear the costs and we typically do not receive reimbursement from our customers until the manufacture of the particular program commences. This timing delay causes our working capital to fluctuate between periods due to the timing of the cash inflows and outflows. We define our net tooling position as tooling in progress (see Note 3 of our Consolidated Financial Statements) plus accounts receivable related to tooling less accounts payable related to tooling. During 2018 our net tooling position increased by $3.2 million from $11.8 million at December 31, 2017 to $15 million at December 31, 2018. This increase reflects spending on customer-owned tooling that exceeded reimbursements from customers.

On December 31, 2018 and 2017, we had working capital balances (excluding discontinued operations held for sale) of  $1 million and $29.6 million, respectively.

39

Sources and Uses of Liquidity

Our available liquidity at December 31, 2018 was $259.9 million, which consisted of  $68.1 million of cash on hand, and unutilized borrowing availability under our U.S. credit facilities of  $191.8 million. A portion of our cash balance is located at foreign subsidiaries and is presently being used to fund operations at and investment in those locations. As of December 31, 2017 and 2016, we had available liquidity of approximately $288.3 million and $240 million, respectively, excluding the cash and unutilized borrowing availability at our discontinued operations.

As of December 31, 2018, we had short-term debt of  $4.1 million, of which $3.6 million related to current maturities of our Term Loan Credit Facility and $0.5 million related to debt in Brazil. Historically, we have been successful in renewing the Brazil debt as it becomes due, but we cannot provide assurance that this debt will continue to be renewed or, if renewed, that this debt will continue to be renewed under the same terms.

We are currently experiencing organic growth well above industry as a result of major new business awards primarily in North America. To fund this growth, we continue to incur significant capital investment requirements for the purchase and installation of the machinery and equipment necessary to manufacture the awarded products. We have entered into operating leases to assist with a portion of the funding requirements for the related capital investments. We believe that these operating leases provide a diversified capital source for financing the capital investment requirements at competitive rates in relation to our existing debt arrangements and help to maintain our strong liquidity profile. These leasing arrangements bear a weighted average fixed interest rate of 5.6%.

Pursuant to the Board of Directors’ declaration on October 16, 2015, the Company commenced payment of a quarterly dividend of  $0.10 per common share. This dividend was raised to $0.11 per common share on October 21, 2016, $0.12 per common share on October 20, 2017, and $0.13 per common share on October 18, 2018. During the years ended December 31, 2018, 2017, and 2016, the Company paid dividends of  $10.1 million, $9.2 million, and $8.6 million, respectively.

As noted above, on June 17, 2016, the Company announced its Board of Directors’ authorization to repurchase up to $100 million of the Company’s issued and outstanding common stock from time to time in the open market, or in privately negotiated transactions. As of December 31, 2018, 829,648 shares have been purchased under the Repurchase Program at an aggregate cost of  $18.9 million with no additional shares being purchased under that program during the year ended December 31, 2018.

Free Cash Flow

Free cash flow is a non-GAAP measure. Free cash flow is defined as cash provided by continuing operating activities less cash disbursed for purchases of property, plant, and equipment. We believe this metric provides useful information to our investors because management regularly reviews this metric as an important indicator of how much cash is generated by our normal business operations, net of capital expenditures, and makes decisions based upon this metric. Management also views this metric as a measure of cash available to reduce debt and grow the business. Free cash flow is calculated as follows (in millions):

​	Year Ended December 31,
​	2018			2017			2016
Net cash provided by continuing operating activities	​	$	98.2	​	$	127.0	​	$	97.2
Cash disbursed for purchases of property, plant, and equipment, net	​	​	(83.1)	​	​	(67.2)	​	​	(72.2)
Free cash flow	​	$	15.1	​	$	59.8	​	$	25.0

Free cash flow was $15.1 million during 2018, compared to $59.8 million during 2017. The $44.7 million decrease in free cash flow reflects primarily lower tooling reimbursements from customers, higher capital spending, and higher lease payments related to certain manufacturing equipment, offset partially by higher adjusted EBITDA.

40

Free cash flow was $59.8 million during 2017, compared to $25 million during 2016. The $34.8 million increase in free cash flow reflects primarily a favorable fluctuation in our net tooling position, higher adjusted EBITDA, and lower capital spending.

Debt

As of December 31, 2018, we had outstanding indebtedness of approximately $298.6 million, which consisted of the following:

•

$303.5 million (net of a $1.7 million discount) indebtedness outstanding under our Term Loan Credit Facility

•

$1.1 million of foreign subsidiary indebtedness

•

$6 million of debt issue costs netted against our indebtedness

Term Loan Credit Facility

On April 23, 2013, we and our subsidiaries, Tower Automotive Holdings USA, LLC, Tower Automotive Holdings I, LLC, Tower Automotive Holdings II (a) LLC, Tower Automotive Holdings II (b) LLC and the domestic subsidiary and domestic affiliate guarantors named therein, entered into a Term Loan and Guaranty Agreement (the “Term Loan Credit Agreement”) whereby we obtained a term loan of  $420 million. The maturity date for the initial term loan disbursed under the Term Loan Credit Agreement was April 23, 2020.

On January 31, 2014, we amended the Term Loan Credit Agreement by entering into the Second Refinancing Term Loan Amendment and Additional Term Loan Amendment (the “Second Term Loan Amendment”), pursuant to which, among other things, the outstanding term loans under the Term Loan Credit Agreement were refinanced in full, and additional term loans in an aggregate principal amount of approximately $33 million (the “Additional Term Loans”) were disbursed. After giving effect to the disbursement of the Additional Term Loans, there were term loans (the “Term Loans”) in the aggregate principal amount of  $450 million outstanding under the Term Loan Credit Agreement. The term loans bear interest at (i) the Alternate Base Rate plus a margin of 2.00% or (ii) the Adjusted LIBO Rate (calculated by multiplying the applicable LIBOR rate by a statutory reserve rate, with a floor of 1.00%) plus a margin of 3.00%.

On March 7, 2017, we amended the Term Loan Credit Agreement by entering into the Third Refinancing Term Loan Amendment and Restatement Agreement (“Third Term Loan Amendment”), pursuant to which, among other things, the outstanding term loans under the Term Loan Credit Agreement were refinanced in full. There were no additional borrowings associated with this refinancing. The aggregate principal amount of  $358.9 million was outstanding under the Term Loan Credit Agreement upon amendment. The maturity date of the Term Loan Credit Facility is March 7, 2024 and the Term Loans bear interest at (i) the Alternate Base Rate plus a margin of 1.75% or (ii) the Adjusted LIBO Rate (calculated by multiplying the applicable LIBOR rate by a statutory reserve rate) plus a margin of 2.75%.

On December 14, 2018, we amended the Third Term Loan Amendment by entering into a Consent and Amendment (the “Term Loan Agreement”), pursuant to which, among other things, substantially simultaneously with the consummation of the sale of our European operations, we shall prepay outstanding Loans (as defined in the Term Loan Agreement) in an aggregate principal amount of  $50 million in accordance with the Term Loan Agreement.

Our Term Loan Credit Facility contains customary covenants applicable to certain of our subsidiaries, including a financial covenant (the “Total Net Leverage Ratio”) based on the ratio of Total Net Debt to Consolidated EBITDA (each as defined in the Term Loan Credit Agreement). As of the last day of each fiscal quarter, we are required to maintain a Total Net Leverage Ratio of not more than 3.75 to 1.00 on a rolling four quarter basis. Our financial condition and liquidity would be adversely impacted by the violation of any of our covenants.

Amended Revolving Credit Facility

On September 17, 2014, we entered into a Third Amended and Restated Revolving Credit and Guaranty Agreement (“Third Amended Revolving Credit Facility Agreement”), by and among Tower Automotive

41

Holdings USA, LLC, the Company, Tower Automotive Holdings I, LLC, Tower Automotive Holdings II(a), LLC, Tower Automotive Holdings II(b), LLC, the subsidiary guarantors named therein, the financial institutions from time to time party thereto as Lenders, and JPMorgan Chase Bank, N.A. as Issuing Lender, as Swing Line Lender, and as Administrative Agent for the Lenders. The Third Amended Revolving Credit Facility Agreement amended and restated, in its entirety, the Second Amended Revolving Credit Facility Agreement, dated as of June 19, 2013, by and among Tower Automotive Holdings USA, LLC (“the Borrower”), its domestic affiliate and domestic subsidiary guarantors named therein, and the lenders party thereto, and the Agent. The Third Amended Revolving Credit Facility Agreement provided for a cash flow revolving credit facility (the “Amended Revolving Credit Facility”) in the aggregate amount of up to $200 million. The Third Amended Revolving Credit Facility Agreement also provided for the issuance of letters of credit in an aggregate amount not to exceed $50 million, provided that the total amount of credit (inclusive of revolving loans and letters of credit) extended under the Third Amended Revolving Credit Facility Agreement was subject to an overall cap, on any date, of  $200 million.

On March 7, 2017, we entered into a Fourth Amended and Restated Revolving Credit and Guaranty Agreement (“Fourth Amended Revolving Credit Facility Agreement”), by and among Tower Automotive Holdings USA, LLC, the Company, Tower Automotive Holdings I, LLC, Tower Automotive Holdings II(a), LLC, the subsidiary guarantors named therein, the financial institutions from time to time party thereto as Lenders, and JPMorgan Chase Bank, N.A. as Issuing Lender, as Swing Line Lender, and as Administrative Agent for the Lenders.

The Fourth Amended Revolving Credit Facility Agreement amended and restated, in its entirety, the Third Amended Revolving Credit Facility Agreement, dated as of September 17, 2014, by and among the Borrower, its domestic affiliate and domestic subsidiary guarantors named therein, and the lenders party thereto, and the Agent. The Fourth Amended Revolving Credit Facility Agreement provides for a cash flow revolving credit facility (the “Amended Revolving Credit Facility”) in the aggregate amount of up to $200 million. The Fourth Amended Revolving Credit Facility Agreement also provides for the issuance of letters of credit in an aggregate amount not to exceed $30 million, provided that the total amount of credit (inclusive of revolving loans and letters of credit) extended under the Fourth Amended Revolving Credit Facility Agreement is subject to an overall cap, on any date, of  $200 million. We may request the issuance of Letters of Credit denominated in Dollars or Euros. As of December 31, 2018, we had no borrowings outstanding under our Amended Revolving Credit Facility and $8.2 million of letters of credit outstanding under the Fourth Amended Revolving Credit Facility Agreement. Thus, we could have borrowed an additional $191.8 million under the Fourth Amended Revolving Credit Facility Agreement as of December 31, 2018, calculated as follows (in millions):

Total Revolving Credit Commitment	$	200.0
Letter of credit outstanding	​	(8.2)
Availability on Fourth Amended Revolving Credit Facility Agreement	$	191.8

Advances under the Amended Revolving Credit Facility bear interest at an alternate base rate plus a base rate margin or LIBOR plus a Eurodollar margin. The applicable margins are determined by the Company’s Total Net Leverage Ratio (as defined in the Fourth Amended Revolving Credit Facility Agreement). As of December 31, 2018, the applicable margins were 1% per annum and 2% per annum for base rate and LIBOR based borrowings, respectively. Borrowings outstanding under our Amended Revolving Credit Facility may vary significantly from time to time, depending on our cash needs at any given time. Our Amended Revolving Credit Facility matures on March 7, 2022.

On December 14, 2018, we amended the Fourth Amended Revolving Credit Facility Agreement by entering into a Consent and Amendment (the “Revolver Amendment”), pursuant to which, among other things, substantially simultaneously with the consummation of the sale of our European operations, extends the expiration date for the Fourth Amended Revolving Credit Facility Agreement to March 7, 2023.

42

Our Fourth Amended Revolving Credit Facility Agreement contains customary covenants applicable to certain of our subsidiaries, including financial maintenance covenant ratios requiring the Borrower and the Guarantors to maintain a ratio, as of the last day of any fiscal quarter, of  (i) consolidated adjusted EBITDA to consolidated interest charges of not less than 2.75 to 1.00 on a rolling four quarter basis; and (ii) total net debt to consolidated adjusted EBITDA not to exceed 3.50 to 1.00 on a rolling four quarter basis.

Foreign Subsidiary Indebtedness

Our foreign subsidiary indebtedness consists of borrowings in Brazil.

Capital and Operating Leases

We maintain capital leases primarily for a manufacturing facility and certain manufacturing equipment. We have several operating leases, including leases for office and manufacturing facilities, as well as certain equipment, with lease terms expiring between the years 2019 and 2026. As of December 31, 2018, our total future operating lease payments amounted to $340.2 million. As of December 31, 2018, we were committed to making lease payments during 2019 of not less than $42.3 million on our operating leases.

Beginning in 2019, FASB ASC No. 842, Leases, will change the financial reporting for leases. Certain of our manufacturing equipment leases currently classified as operating leases will be considered financing leases under the new standard which will require us to record the right-of-use (“ROU”) asset as additional property, plant, and equipment and the associated liability as lease debt. As of December 31, 2018 and 2017 the ROU asset and liability associated with these leases would be approximately $157 million and $72 million, respectively.

In addition, we have numerous real estate and equipment leases currently classified as operating that will continue to be classified as operating under the new standard. We estimate that the ROU asset and lease liability associated with these leases will be approximately $100 million, and is estimated to increase approximately $10 million during the first quarter of 2019 upon the extension of certain leases of production facilities.

Capital Expenditures

In general, we are awarded new automotive business two to three years prior to the launch of a particular program. During the pre-launch period, we typically invest significant resources in the form of capital expenditures for the purchase and installation of the machinery and equipment necessary to manufacture the awarded products. Capital expenditures for the years ended December 31, 2018 and 2017 were $83.1 million and $67.2 million, respectively. The increase reflects primarily the timing of customer program launches. Our capital spending for 2019 is expected to be approximately $110 million.

Off-Balance Sheet Obligations

In addition to the operating leases described above, our off-balance sheet obligations consist of obligations under our Fourth Amended Revolving Credit Facility. As of December 31, 2018, letters of credit outstanding were $8.2 million under our Fourth Amended Revolving Credit Facility.

Covenants

As of December 31, 2018, the Company was in compliance with all financial covenants that govern its credit agreements.

Net Debt

Net debt is a non-GAAP financial measure that represents total debt less cash and cash equivalents. We believe that the presentation of net debt provides useful information because we understand that our investors perceive net debt as part of the management of our overall liquidity, financial flexibility, capital structure and leverage. Furthermore, certain debt rating agencies, creditors and credit analysts monitor our

43

net debt as part of their assessments of our business. Net debt is used by management to help assess our exposure to our funding sources and to evaluate future needs for additional liquidity. Our use of the term “net debt” should not be understood to mean that we will use any cash on hand to repay debt. Net debt is calculated as follows (in millions):

​	As of December 31,
​	2018			2017			2016
Total debt, including capital leases and net of debt issue costs	​	$	298.6	​	$	350.8	​	$	359.8
Less: Cash and cash equivalents	​	​	(68.1)	​	​	(96.3)	​	​	(49.0)
Net debt	​	$	230.5	​	$	254.4	​	$	310.8

As of December 31, 2018, our net debt was $230.5 million, compared to $254.4 million as of December 31, 2017. The $23.9 million change reflects primarily favorable free cash flow and cash received from the sale-leaseback of one of our manufacturing facilities, offset partially by the remittance of dividends to our shareholders.

As of December 31, 2016, our net debt was $310.8 million. The $56.4 million change from 2016 to 2017 reflects primarily favorable free cash flow and proceeds received from the sale of our discontinued operations, offset partially by the remittance of dividends to our shareholders and debt issuance costs.

Contractual Obligations and Commercial Commitments

Our contractual obligations and commercial commitments as of December 31, 2018 are summarized below (in millions):

Contractual Obligations

Total

Less than 1 Year

2  – 3 Years

4  – 5 Years

After 5 Years

Long-term debt (including current portion):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Term Loan Credit Facility

​

$

303.5

​

$

3.6

​

$

7.2

​

$

7.2

​

$

285.5

Other subsidiary indebtedness

​

​

1.0

​

​

0.5

​

​

0.5

​

​

—

​

​

—

Cash interest payments

​

​

81.5

​

​

16.0

​

​

31.3

​

​

30.5

​

​

3.7

Pension contributions(a)

​

​

31.6

​

​

5.9

​

​

13.4

​

​

10.9

​

​

1.4

Expected tax payments(b)

​

​

4.5

​

​

—

​

​

0.1

​

​

—

​

​

4.4

Capital and tooling purchase obligations(c)

​

​

112.9

​

​

112.9

​

​

—

​

​

—

​

​

—

Operating leases

​

​

340.2

​

​

42.3

​

​

97.0

​

​

89.0

​

​

111.9

Total contractual obligations at December 31, 2018

​

$

875.2

​

$

181.2

​

$

149.5

​

$

137.6

​

$

406.9

(a)

Represents expected future contributions required to fund our pension plan, based on current actuarial assumptions.

(b)

Represents payments expected to be made to various governmental agencies relating to certain tax positions taken pursuant to FASB ASC No. 740, Income Taxes.

(c)

Represents obligations under executory purchase orders related to capital and tooling expenditures.

Our purchase orders for inventories are based on demand and do not require us to purchase minimum quantities.

Critical Accounting Policies and Estimates

The preparation of our Consolidated Financial Statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of our assets and liabilities and disclosure of our contingent assets and liabilities at the date of the Consolidated Financial Statements, as well as the reported amounts of our revenues and expenses during the reporting period. Considerable judgment is often involved in making these estimates and assumptions. Critical estimates are those that require the most difficult, subjective, or complex judgments in the preparation of our financial statements and the

44

accompanying notes. We evaluate these assumptions and estimates on a regular basis and we believe that they are reasonable and appropriate. However, actual results could differ from our estimates and the use of different assumptions could result in significantly different results. The following discussion of accounting estimates is intended to supplement the Summary of Significant Accounting Policies section of Note 3 to our Consolidated Financial Statements. Policies that are excluded from the discussion below are deemed to be either immaterial or not critical for the periods presented in this Annual Report.

Fair Value Measurements

FASB ASC No. 820, Fair Value Measurements, 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 (an exit price). The exit price is based upon the amount that the holder of the asset or liability would receive or need to pay in an actual transaction or in a hypothetical transaction if an actual transaction does not exist, at the measurement date. In some circumstances, the entry and exit price may be the same; however, they are conceptually different.

Fair value is generally determined based upon quoted market prices in active markets for identical assets or liabilities. If quoted market prices are not available, we use valuation techniques that place greater reliance on observable inputs and less reliance on unobservable inputs. In measuring fair value, we may make adjustments for risks and uncertainties, if a market participant would include such an adjustment in its pricing.

Periodically, the Company uses derivative financial instruments to manage interest rate risk and net investment risk in foreign operations, and to limit exposure of foreign currency fluctuations related to certain intercompany payments. Under FASB ASC No. 815, Derivatives and Hedging, all derivatives are recorded at fair value.

At December 31, 2018 and 2017, our derivative financial instruments include interest rate and cross currency swaps. These instruments are recorded in other assets, net or other non-current liabilities in our Consolidated Balance Sheets and the fair value is measured using Level 2 observable inputs such as foreign currency exchange rates, swap rates, cross currency basis swap spreads and interest rate spreads. At December 31, 2018, the foreign currency exchange hedge (net investment hedge of our European subsidiaries) and the interest rate swap had liability fair values of  $19.9 million and $5 million, respectively. At December 31, 2017, the foreign currency exchange hedge (net investment hedge of our European subsidiaries) had a liability fair value of  $27 million. The interest rate swap had a liability fair value of  $8.9 million. Refer to Note 7 to our Consolidated Financial Statements for further information regarding derivatives.

Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of net assets acquired. Goodwill is not amortized, but it is tested for impairment on, at a minimum, an annual basis. In accordance with FASB ASC No. 350, Intangibles — Goodwill and Other, we qualitatively assess the goodwill assigned to each of our reporting units annually at year-end. This qualitative assessment evaluates various factors, such as macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, and other relevant events, that may impact a reporting unit’s fair value. Using this qualitative assessment, we determine whether it is more-likely-than-not that the reporting unit’s fair value exceeds its carrying value. If it is determined that it is not more-likely-than-not that the reporting unit’s fair value exceeds the carrying value, we perform a quantitative goodwill impairment analysis by comparing the carrying amount of the reporting unit to its fair value. We will also test goodwill for impairment when an event occurs or circumstances change such that it is reasonably possible that impairment may exist.

The evaluation of goodwill for possible impairment includes estimating the fair market value of each of the reporting units which have goodwill associated with their operations using discounted cash flow and multiples of cash earnings valuation techniques, plus valuation comparisons to recent public sale transactions of similar businesses, if any. These valuation methods require us to make estimates and assumptions regarding future operating results, cash flows, changes in working capital and capital expenditures, selling prices, profitability, and the cost of capital. Although we believe that the estimates and assumptions used were reasonable, actual results could differ from those estimates and assumptions.

45

The results of our 2018 and 2017 annual goodwill impairment analysis indicated that the fair values of our continuing operations were substantially in excess of carrying value; thus, no impairment existed at December 31, 2018 or December 31, 2017.

During the fourth quarter of 2018, we entered into an agreement to sell our European operations and recorded a total fair value adjustment of  $44 million, of which $36 million was related to an impairment of goodwill. We performed a quantitative goodwill impairment analysis that determined the carrying value of the Europe reporting unit was less than its estimated fair value. Our European operations are considered held for sale in accordance with FASB ASC No. 360, Property, Plant, and Equipment, and presented as discontinued operations in the Consolidated Financial Statements, in accordance with FASB ASC No. 205, Discontinued Operations.

Income Taxes

We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the Consolidated Financial Statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. We record net deferred tax assets to the extent we believe that these assets will more likely than not be realized. In making such determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. Valuation allowances have been recorded where it has been determined that it is more likely than not that we will not be able to realize the net deferred tax assets. Previously established valuation allowances are reversed into income when there is compelling evidence, typically three or more consecutive years of cumulative profit or other positive evidence, that the future tax profitability will be sufficient to utilize the deferred tax asset. Due to the significant judgment involved in determining whether deferred tax assets will be realized, the ultimate resolution of these items may be materially different from the previously estimated outcome.

On December 22, 2017, the U.S. government enacted the Tax Cut and Jobs Act Bill. Effective January 1, 2018, the new tax law results in a reduction to the statutory federal income tax rate for U.S. corporate taxable income from 35% to 21%. Upon enactment, we recorded a one-time deferred tax expense of  $27.2 million related to the revaluation of our U.S. deferred tax assets. Additional changes in tax laws and rates could also affect recorded deferred tax assets and liabilities in the future. Management is not aware of any such changes, other than as described above, that would have a material effect on our results of operations, cash flows, or financial position.

The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across our global operations.

FASB ASC No. 740, Income Taxes, provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. FASB ASC No. 740 also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

We recognize tax liabilities in accordance with FASB ASC No. 740 and adjust these liabilities when our judgment changes as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the tax liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which they are determined.

Pension and Other Postretirement Benefits

We recognize net actuarial gains or losses in excess of 10% of the greater of the market-related value of the Tower International Consolidated Pension Plan (the “Pension Plan”) assets or the Pension Plan’s projected benefit obligation (“the corridor”) annually, in the fourth quarter of each fiscal year, or at the date of a measurement event.

46

The calculations of the projected pension benefit obligation and other postretirement benefits obligation and the associated expenses are based upon certain assumptions made by third party actuaries. These assumptions include, among others, the discount rate, expected long-term rate of return on plan assets, mortality rates, and expected increases in compensation and healthcare costs. Refer to Note 9 to our Consolidated Financial Statements for a description of assumptions made. In accordance with GAAP, actual results that differ from these assumptions are accumulated and amortized over future periods and therefore, generally affect the expense recognized and obligation recorded in future periods. While we believe the current assumptions are appropriate based on available information, significant differences in actual experience or significant changes in assumptions may materially affect the projected pension obligation and other postretirement obligations, as well as the related future expenses.

Our Pension Plan and other postretirement costs are calculated based upon a number of actuarial assumptions, most notably the discount rates used to calculate our projected pension benefit obligations in 2018 and 2017, which were 4.09% and 3.42%, respectively, and the discount rates used in the calculation of our postretirement benefit obligations in 2018 and 2017, which were 4.14% and 3.47%, respectively. The discount rates used in the calculations are established based upon the results of a yield curve analysis performed annually by a third party, which calculates a yield to maturity that mirrors the timing and amounts of future benefit payments. The measurement dates of our post retirement plans are December 31 of each year.

The expected long-term rate of return assumptions are based upon modeling studies completed with the assistance of our actuaries and investment consultants. These models take into account inflation, asset class returns, and bond yields for both domestic and foreign markets. These studies, along with the history of returns for the Pension Plan, indicate that expected future returns, weighted by asset allocation, supported an expected long-term asset return assumption of 7.4% for 2018 and 2017.

Based on our assumptions as of December 31, 2018, a change in the discount rate or the expected long-term rate of return assumptions, holding all other assumptions constant, would have the following impact on our projected pension benefit obligation and net periodic benefit cost on an annual basis (in millions):

​	Impact on Net Periodic Benefit Cost
​	Increase			Decrease
.25% change in discount rate	​	$	0.4	​	$	0.4
.25% change in expected long-term rate of return	​	​	(0.5)	​	​	0.5

​	Impact on Projected Pension Benefit Obligation
​	Increase			Decrease
.25% change in discount rate	​	$	(5.2)	​	$	5.4

Our Pension Plan provides benefits for certain current and former U.S. employees. Benefits under the Pension Plan were frozen in October 2006. We incurred expense of  $1.7 million during the year ended December 31, 2018, which includes the actuarial pension loss recorded in the fourth quarter of 2018 of $5.2 million. We recognized income of  $2.9 million during the year ended December 31, 2017. We incurred expenses of  $5.6 million during the year ended December 31, 2016, which includes the actuarial pension loss recorded in the fourth quarter of 2016 of  $8.3 million. We anticipate that we will have approximately $0.8 million of pension income in 2019, excluding any actuarial gain or loss, and we expect to contribute $5.9 million to our Pension Plan in 2019. It is difficult to reliably forecast whether a mark-to-market adjustment for net actuarial gains or losses will be required in 2019 and the amount of such an adjustment, if one is required. Mark-to-market adjustments are primarily driven by events and circumstances beyond our control, including changes in interest rates and the performance of financial markets. To the extent discount rates decrease or the value of our Pension Plan’s investments decrease, mark-to market charges to operations may be recorded during the fourth quarter of 2019, if the actuarial gain or loss is in excess of the corridor.

47

We anticipate our other post-employment benefit expense to be approximately $0.7 million and we expect to make benefit payments of  $0.6 million in 2019. Refer to Note 9 to our Consolidated Financial Statements for further information regarding pension and other postretirement benefits.

Recent Accounting Pronouncements

For information regarding recent accounting pronouncements, refer to Note 2 to our Consolidated Financial Statements.

Item 7A.   Quantitative and Qualitative Disclosures about Market Risk

Market risk is the potential loss arising from adverse changes in market rates and prices. We are exposed to market risk throughout the normal course of our business operations due to our purchases of steel, our sales of scrap steel, our ongoing investing and financing activities, and our exposure to foreign currency exchange rates. We have established policies and procedures to govern our management of market risks.

Commodity Pricing Risk

Steel is the primary raw material that we use. We purchase a portion of our steel from certain of our customers through various OEM resale programs. The purchases through customer resale programs have buffered the impact of price swings associated with the procurement of steel. The remainder of our steel purchasing requirements is met through contracts with steel mills. At times, we may be unable to either avoid increases in steel prices or pass through any price increases to our customers. We refer to the “net steel impact” as the combination of the change in steel prices that are reflected in the price of our products, the change in the cost to procure steel from the mill, and the change in our recovery of offal. Our strategy is to be economically neutral to steel pricing by having these factors offset each other. While we strive to achieve a neutral net steel impact, we are not always successful in achieving that goal, in large part due to timing differences. The timing of a change in the price of steel may occur in separate periods and if a change occurs, that change may have a disproportionate effect, within any fiscal period, on our product pricing. Depending upon when a steel price change or offal price change occurs, that change may have a disproportionate effect, within any particular fiscal period, on our product pricing, our steel costs and the results of our sales of offal. Net imbalances in any one particular fiscal period may be reversed in a subsequent fiscal period, although we cannot provide assurances that, or when, these reversals will occur. Over the past several years, we have not experienced a material net impact from these factors.

Interest Rate Risk

At December 31, 2018, we had total debt, excluding capital leases, of  $298.6 million (net of a $1.7 million discount and $6 million of debt issue costs), consisting of floating rate debt of  $111.5 million (37%) and fixed rate debt of  $187.1 million (63%) taking into account our $186.1 million variable rate to fixed rate swap (See Note 7 of our Consolidated Financial Statements for further information relating to our swaps). Assuming no changes in the monthly average variable rate debt levels of  $146.4 million for the year ended December 31, 2018, we estimate that a hypothetical change of 100 basis points in the LIBOR and alternative base rate would not have a significant impact on interest expense due to the LIBOR floor in our Term Loan.

In addition, we have certain manufacturing equipment leases currently classified as operating leases that will be considered financing leases upon adoption of FASB ASC No. 842, Leases. As of December 31, 2018, the associated lease debt from these leases would have been approximately $157 million. Including this amount, our fixed rate debt would have been approximately 75% and our variable rate debt would have been approximately 25%.

Foreign Exchange Risk

A portion of our revenues is derived from manufacturing operations in Mexico and Brazil. The results of operations and financial condition of our non-United States businesses are principally measured in their respective local currency and translated into U.S. dollars. The effects of foreign currency fluctuations in Mexico and Brazil are mitigated by the fact that expenses are generally incurred in the same currency in

48

which revenues are generated, since we strive to manufacture our products in close proximity to our customers. Nevertheless, the reported income of our foreign subsidiaries will be higher or lower depending on a weakening or strengthening of the U.S. dollar against the respective foreign currencies.

Assets located in our foreign facilities are translated into U.S. dollars at foreign currency exchange rates in effect as of the end of each reporting period. The effect of such translations is reflected as a separate component of consolidated stockholders’ equity. As a result, our consolidated stockholders’ equity will fluctuate, depending upon the weakening or strengthening of the U.S. dollar against the respective foreign currencies.

Our strategy for managing currency risk relies primarily upon conducting business in a foreign country in that country’s currency. We may, from time to time, also participate in hedging programs intended to reduce our exposure to currency fluctuations (See Note 7 of our Consolidated Financial Statements for further information relating to our swaps). We believe that the effect of a 100 basis point movement in foreign currency rates against the U.S. dollar would not have materially impacted the results of our operations, our cash flows, or our stockholders’ equity for the year ended December 31, 2018.

Inflation

Despite recent declines, we have experienced a continued rise over time in inflationary pressures impacting certain commodities, such as petroleum-based products, ferrous metals, base metals, and certain chemicals. Additionally, because we purchase various types of equipment, raw materials, and component parts from our suppliers, we may be adversely impacted by their inability to adequately mitigate inflationary, industry, or economic pressures. The overall condition of our supply base may possibly lead to delivery delays, production issues, or delivery of non-conforming products by our suppliers in the future. As such, we continue to monitor our vendor base for the best sources of supply and we continue to work with those vendors and customers to mitigate the impact of inflationary pressures.

49

Item 8.   Financial Statements and Supplementary Data

Index to Consolidated Financial Statements and Supplementary Data

​	Form 10-K Page
Audited Financial Statements for the Three Years Ended December 31, 2018:	​	​
Report of Independent Registered Public Accounting Firm	​	51
Consolidated Balance Sheets as of December 31, 2018 and 2017	​	52
Consolidated Statements of Operations for the Years Ended December 31, 2018, 2017, and 2016	​	53
Consolidated Statements of Comprehensive Income/(Loss) for the Years Ended December 31, 2018, 2017, and 2016	​	54
Consolidated Statements of Cash Flows for the Years Ended December 31, 2018, 2017, and 2016	​	55
Consolidated Statements of Equity/(Deficit) for the Years Ended December 31, 2018, 2017, and 2016	​	56
Notes to Consolidated Financial Statements	​	57
Supplementary Data	​	​
Quarterly Financial Information (Unaudited) — Refer to Note 16 of the Notes to Consolidated Financial Statements	​	97

50

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of
Tower International, Inc.
Livonia, MI

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Tower International, Inc. and subsidiaries (the “Company”) as of December 31, 2018 and 2017, the related consolidated statements of operations, comprehensive income/(loss), equity/(deficit), and cash flows for each of the three years in the period ended December 31, 2018, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2018, based on the criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 27, 2019 expressed an unqualified opinion on the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ DELOITTE & TOUCHE LLP

Detroit, MI
February 27, 2019

We have served as the Company’s auditor since 2002.

51

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)

​	December 31, 2018			December 31, 2017
ASSETS	​	​	​	​	​	​
Cash and cash equivalents	​	$	68,066	​	$	96,313
Accounts receivable, net of allowance of  $823 and $556	​	​	113,128	​	​	123,958
Inventories (Note 3)	​	​	69,434	​	​	57,495
Assets held for sale (Note 5)	​	​	431,613	​	​	517,783
Prepaid tooling, notes receivable, and other	​	​	27,552	​	​	43,986
Total current assets	​	​	709,793	​	​	839,535
Property, plant, and equipment, net	​	​	347,803	​	​	323,199
Goodwill (Note 3)	​	​	7,453	​	​	7,424
Deferred tax asset	​	​	82,832	​	​	82,077
Other assets, net	​	​	22,511	​	​	8,638
Total assets	​	$	1,170,392	​	$	1,260,873
LIABILITIES AND EQUITY	​	​	​	​	​	​
Short-term debt (Note 6)	​	$	4,148	​	$	4,744
Accounts payable	​	​	188,760	​	​	213,333
Accrued liabilities	​	​	84,306	​	​	74,040
Liabilities held for sale (Note 5)	​	​	167,882	​	​	210,905
Total current liabilities	​	​	445,096	​	​	503,022
Long-term debt, net of current maturities (Note 6)	​	​	294,457	​	​	346,011
Pension liability (Note 9)	​	​	45,762	​	​	47,813
Other non-current liabilities	​	​	84,163	​	​	94,155
Total non-current liabilities	​	​	424,382	​	​	487,979
Total liabilities	​	​	869,478	​	​	991,001
Commitments and contingencies (Note 14)	​	​	​	​	​	​
Stockholders’ equity:	​	​	​	​	​	​
Preferred stock, $0.01 par value, 50,000,000 authorized and 0 issued and outstanding	​	​	—	​	​	—
Common stock, $0.01 par value, 350,000,000 authorized, 22,400,074 issued and 20,606,736 outstanding at December 31, 2018, and 22,317,671 issued and 20,542,397 outstanding at December 31, 2017	​	​	224	​	​	223
Additional paid in capital	​	​	347,816	​	​	344,153
Treasury stock, at cost, 1,793,338 and 1,775,274 shares as of December 31, 2018 and December 31, 2017	​	​	(36,882)	​	​	(36,408)
Retained earnings	​	​	64,676	​	​	29,712
Accumulated other comprehensive loss (Note 3)	​	​	(74,920)	​	​	(67,808)
Total stockholders’ equity	​	​	300,914	​	​	269,872
Total liabilities and stockholders’ equity	​	$	1,170,392	​	$	1,260,873

The accompanying notes are an integral part of these Consolidated Financial Statements.

52

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per share amounts)

​	Year Ended December 31, 2018			Year Ended December 31, 2017			Year Ended December 31, 2016
Revenues (Note 3)	​	$	1,571,853	​	$	1,382,474	​	$	1,319,046
Cost of sales	​	​	1,377,955	​	​	1,193,311	​	​	1,144,914
Gross profit	​	​	193,898	​	​	189,163	​	​	174,132
Selling, general, and administrative expenses	​	​	89,527	​	​	87,756	​	​	102,058
Amortization expense (Note 3)	​	​	435	​	​	443	​	​	449
Restructuring and asset impairment charges, net (Note 4)	​	​	3,380	​	​	9,098	​	​	20,913
Operating income	​	​	100,556	​	​	91,866	​	​	50,712
Interest expense	​	​	19,856	​	​	10,882	​	​	18,259
Interest income	​	​	1,058	​	​	1,138	​	​	1,097
Net periodic benefit income/(expense)	​	​	(2,403)	​	​	2,245	​	​	(6,324)
Other expense	​	​	977	​	​	575	​	​	4,754
Income before provision for income taxes and income/(loss) from discontinued operations	​	​	78,378	​	​	83,792	​	​	22,472
Provision for income taxes (Note 8)	​	​	1,259	​	​	44,089	​	​	8,768
Income from continuing operations	​	​	77,119	​	​	39,703	​	​	13,704
Income/(loss) from discontinued operations, net of tax (Note 5)	​	​	(28,219)	​	​	8,032	​	​	25,576
Net income	​	​	48,900	​	​	47,735	​	​	39,280
Less: Net income attributable to noncontrolling interests	​	​	—	​	​	110	​	​	701
Net income attributable to Tower International, Inc.	​	$	48,900	​	$	47,625	​	$	38,579
Weighted average basic shares outstanding	​	​	20,591,674	​	​	20,498,668	​	​	20,864,321
Weighted average diluted shares outstanding	​	​	20,996,068	​	​	20,828,888	​	​	21,222,183
Basic income per share attributable to Tower International, Inc. (Note 10):	​	​	​	​	​	​	​	​	​
Income per share from continuing operations	​	$	3.75	​	$	1.93	​	$	0.62
Income/(loss) per share from discontinued operations	​	​	(1.38)	​	​	0.39	​	​	1.23
Income per share	​	​	2.37	​	​	2.32	​	​	1.85
Diluted income per share attributable to Tower International, Inc. (Note 10):	​	​	​	​	​	​	​	​	​
Income per share from continuing operations	​	$	3.67	​	$	1.90	​	$	0.61
Income/(loss) per share from discontinued operations	​	​	(1.34)	​	​	0.39	​	​	1.21
Income per share	​	​	2.33	​	​	2.29	​	​	1.82

The accompanying notes are an integral part of these Consolidated Financial Statements.

53

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
(Amounts in thousands)

​	Year Ended December 31,
​	2018			2017			2016
Net income	​	$	48,900	​	$	47,735	​	$	39,280
Other comprehensive income/(loss), net of tax	​	​	​	​	​	​	​	​	​
Foreign currency translation adjustments, net of tax expense/(benefit) of $1.8 million, ($10 million), and $2.5 million	​	​	(14,784)	​	​	19,602	​	​	(4,401)
Change in defined benefit plans net of tax expense/(benefit) of  ($0.1) million, $0.8 million, and $0.7 million	​	​	64	​	​	723	​	​	1,030
Unrealized gain/(loss) on qualifying cash flow hedge, net of tax expense/(benefit) of  $1.3 million, ($2.8 million), and $0 million	​	​	3,760	​	​	(4,698)	​	​	—
Other comprehensive income/(loss), net of tax	​	​	(10,960)	​	​	15,627	​	​	(3,371)
Comprehensive income	​	​	37,940	​	​	63,362	​	​	35,909
Less: Comprehensive income attributable to noncontrolling interests	​	​	—	​	​	162	​	​	221
Comprehensive income attributable to Tower International, Inc.	​	$	37,940	​	$	63,200	​	$	35,688

The accompanying notes are an integral part of these Consolidated Financial Statements.

54

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)

​	Year Ended December 31,
​	2018			2017			2016
OPERATING ACTIVITIES:	​	​	​	​	​	​	​	​	​
Net income	​	$	48,900	​	$	47,735	​	$	39,280
Less: Income/(loss) from discontinued operations, net of tax	​	​	(28,219)	​	​	8,032	​	​	25,576
Income from continuing operations	​	​	77,119	​	​	39,703	​	​	13,704
Adjustments required to reconcile income from continuing operations to net cash provided by continuing operating activities:	​	​	​	​	​	​	​	​	​
Non-cash restructuring and asset impairment charges, net	​	​	—	​	​	—	​	​	15,000
Deferred income tax provision	​	​	(3,334)	​	​	41,702	​	​	6,547
Depreciation and amortization	​	​	54,815	​	​	50,471	​	​	47,861
Non-cash share-based compensation	​	​	3,413	​	​	2,219	​	​	2,455
Pension income, net of contributions	​	​	(4,270)	​	​	(11,512)	​	​	(1,999)
Change in working capital and other operating items	​	​	(29,496)	​	​	4,408	​	​	13,608
Net cash provided by continuing operating activities	​	$	98,247	​	$	126,991	​	$	97,176
INVESTING ACTIVITIES:	​	​	​	​	​	​	​	​	​
Cash disbursed for purchases of property, plant, and equipment, net	​	$	(83,141)	​	$	(67,240)	​	$	(72,194)
Proceeds from disposition of China joint ventures, net	​	​	4,314	​	​	15,944	​	​	4,546
Net proceeds from sale of property, plant, and equipment	​	​	14,883	​	​	—	​	​	—
Net cash used in continuing investing activities	​	$	(63,944)	​	$	(51,296)	​	$	(67,648)
FINANCING ACTIVITIES:	​	​	​	​	​	​	​	​	​
Proceeds from borrowings	​	$	104,303	​	$	485,368	​	$	494,442
Repayments of borrowings	​	​	(104,508)	​	​	(498,553)	​	​	(491,849)
Voluntary repayments on Term Loan Credit Facility	​	​	(50,000)	​	​	—	​	​	(50,000)
Debt financing costs	​	​	—	​	​	(4,747)	​	​	—
Original issuance discount	​	​	—	​	​	(1,808)	​	​	—
Dividend payment to Tower shareholders	​	​	(10,088)	​	​	(9,221)	​	​	(8,570)
Proceeds from stock options exercised	​	​	251	​	​	1,313	​	​	305
Purchase of treasury stock	​	​	(474)	​	​	(763)	​	​	(19,578)
Net cash used in continuing financing activities	​	$	(60,516)	​	$	(28,411)	​	$	(75,250)
Discontinued operations:	​	​	​	​	​	​	​	​	​
Net cash from discontinued operating activities	​	$	74,455	​	$	26,645	​	$	61,117
Net cash used in discontinued investing activities	​	​	(47,587)	​	​	(39,504)	​	​	(47,678)
Net cash from/(used in) discontinued financing activities	​	​	(26,456)	​	​	8,649	​	​	(11,347)
Net cash from/(used in) discontinued operations	​	$	412	​	$	(4,210)	​	$	2,092
Effect of exchange rate changes on continuing cash and cash equivalents	​	$	(2,446)	​	$	4,256	​	$	(623)
NET CHANGE IN CASH AND CASH EQUIVALENTS	​	$	(28,247)	​	$	47,330	​	$	(44,253)
CASH AND CASH EQUIVALENTS:	​	​	​	​	​	​	​	​	​
Beginning of period	​	$	96,313	​	$	48,983	​	$	93,236
End of period	​	$	68,066	​	$	96,313	​	$	48,983
Supplemental Cash Flow Information:	​	​	​	​	​	​	​	​	​
Interest paid, net of amounts capitalized	​	$	20,949	​	$	20,553	​	$	17,217
Income taxes paid	​	​	5,665	​	​	2,580	​	​	2,255
Non-cash Investing Activities:	​	​	​	​	​	​	​	​	​
Capital expenditures in liabilities for purchases of property, plant, and equipment	​	$	19,399	​	$	9,746	​	$	6,372

The accompanying notes are an integral part of these Consolidated Financial Statements.

55

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY/(DEFICIT)
(Amounts in thousands, except per share data)

​

Common Stock Units/Shares

Amount

Additional Paid-in Capital

Treasury Stock

Retained Earnings/​ (Deficit)

Accumulated Other Comprehensive Loss

Total Stockholders’ Equity Attributable to Tower International, Inc.

Noncontrolling Interest Amount

Total Equity

Balance at December 31, 2015

​

21,111,610

​

$

220

​

$

337,864

​

$

(16,067)

​

$

(44,030)

​

$

(80,492)

​

$

197,495

​

$

9,224

​

$

206,719

Net income

​

—

​

​

—

​

​

—

​

​

—

​

​

38,579

​

​

—

​

​

38,579

​

​

701

​

​

39,280

Other comprehensive income/(loss)

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

(2,891)

​

​

(2,891)

​

​

(480)

​

​

(3,371)

Total comprehensive income

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

35,688

​

​

221

​

​

35,909

Vesting of RSUs

​

77,912

​

​

1

​

​

(1)

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Stock options exercised

​

25,670

​

​

—

​

​

305

​

​

—

​

​

—

​

​

—

​

​

305

​

​

—

​

​

305

Treasury stock

​

(856,061)

​

​

—

​

​

—

​

​

(19,578)

​

​

—

​

​

—

​

​

(19,578)

​

​

—

​

​

(19,578)

Share-based compensation expense

​

—

​

​

—

​

​

2,455

​

​

—

​

​

—

​

​

—

​

​

2,455

​

​

—

​

​

2,455

Dividend paid

​

—

​

​

—

​

​

—

​

​

—

​

​

(8,570)

​

​

—

​

​

(8,570)

​

​

—

​

​

(8,570)

Noncontrolling interest sold

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Noncontrolling interest dividends – Wuhu

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

(3,301)

​

​

(3,301)

Balance at December 31, 2016

​

20,359,131

​

$

221

​

$

340,623

​

$

(35,645)

​

$

(14,021)

​

$

(83,383)

​

$

207,795

​

$

6,144

​

$

213,939

Net income

​

—

​

​

—

​

​

—

​

​

—

​

​

47,625

​

​

—

​

​

47,625

​

​

110

​

​

47,735

Other comprehensive income/(loss)

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

15,575

​

​

15,575

​

​

52

​

​

15,627

Total comprehensive income

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

63,200

​

​

162

​

​

63,362

Vesting of RSUs

​

101,478

​

​

1

​

​

(1)

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Stock options exercised

​

108,791

​

​

1

​

​

1,312

​

​

—

​

​

—

​

​

—

​

​

1,313

​

​

—

​

​

1,313

Treasury stock

​

(27,003)

​

​

—

​

​

—

​

​

(763)

​

​

—

​

​

—

​

​

(763)

​

​

—

​

​

(763)

Share-based compensation expense

​

—

​

​

—

​

​

2,219

​

​

—

​

​

—

​

​

—

​

​

2,219

​

​

—

​

​

2,219

Dividend paid

​

—

​

​

—

​

​

—

​

​

—

​

​

(9,221)

​

​

—

​

​

(9,221)

​

​

—

​

​

(9,221)

Noncontrolling interest sold

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

(6,306)

​

​

(6,306)

Cumulative effect of the adoption of ASU No. 2016-09

​

—

​

​

—

​

​

—

​

​

—

​

​

5,329

​

​

—

​

​

5,329

​

​

—

​

​

5,329

Balance at December 31, 2017

​

20,542,397

​

$

223

​

$

344,153

​

$

(36,408)

​

$

29,712

​

$

(67,808)

​

$

269,872

​

$

—

​

$

269,872

Net income

​

—

​

​

—

​

​

—

​

​

—

​

​

48,900

​

​

—

​

​

48,900

​

​

—

​

​

48,900

Other comprehensive income/(loss)

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

(10,960)

​

​

(10,960)

​

​

—

​

​

(10,960)

Total comprehensive income

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

37,940

​

​

—

​

​

37,940

Vesting of RSUs

​

62,225

​

​

1

​

​

(1)

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Stock options exercised

​

20,178

​

​

—

​

​

251

​

​

—

​

​

—

​

​

—

​

​

251

​

​

—

​

​

251

Treasury stock

​

(18,064)

​

​

—

​

​

—

​

​

(474)

​

​

—

​

​

—

​

​

(474)

​

​

—

​

​

(474)

Share-based compensation expense

​

—

​

​

—

​

​

3,413

​

​

—

​

​

—

​

​

—

​

​

3,413

​

​

—

​

​

3,413

Dividend paid

​

—

​

​

—

​

​

—

​

​

—

​

​

(10,088)

​

​

—

​

​

(10,088)

​

​

—

​

​

(10,088)

Cumulative effect of the adoption of ASU No. 2017-12

​

—

​

​

—

​

​

—

​

​

—

​

​

(3,848)

​

​

3,848

​

​

—

​

​

—

​

​

—

Balance at December 31, 2018

​

20,606,736

​

$

224

​

$

347,816

​

$

(36,882)

​

$

64,676

​

$

(74,920)

​

$

300,914

​

$

—

​

$

300,914

The accompanying notes are an integral part of these Consolidated Financial Statements.

56

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Nature of Business

Tower International, Inc. and its subsidiaries (collectively referred to as the “Company” or “Tower International”), is a leading integrated manufacturer of engineered automotive structural metal components and assemblies, primarily serving original equipment manufacturers (“OEMs”), including Ford, Fiat-Chrysler, Nissan, Toyota, BMW, Volkswagen Group, and Honda. Products include body structures, assemblies and other chassis, structures, and lower vehicle systems and suspension components for small and large cars, crossovers, pickups, and sport utility vehicles. Including both wholly owned subsidiaries and majority owned subsidiaries, the Company has strategically located production facilities in the United States, Mexico, and Brazil, supported by engineering and sales locations in the United States, Brazil, Japan, China, and India.

Note 2. Basis of Presentation and Organizational History

On October 14, 2010, the Company completed its initial public offering (the “IPO”), whereby Tower Automotive, LLC was converted into a Delaware corporation named Tower International, Inc. (the “Corporate Conversion”). Pursuant to the Company’s IPO, the Company’s common stock began trading on the New York Stock Exchange on October 15, 2010.

All references to the Company in these notes for periods prior to the effective date of the Corporate Conversion are to Tower Automotive, LLC and its subsidiaries. All references to the Company in these notes for periods subsequent to the effective date of the Company’s Corporate Conversion are to Tower International, Inc. and its subsidiaries.

The results of the Company’s European operations, along with the Company’s Tower Automotive Company, Ltd. (“Wuhu”) and Tower DIT Automotive Products Co., Ltd. (“Ningbo”) joint ventures in China are presented as discontinued operations in the Company’s Consolidated Financial Statements, in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 205, Discontinued Operations. Refer to Note 5 for additional information regarding the Company’s discontinued operations.

The results of the Company’s Brazilian operations are no longer presented as discontinued operations since these operations are considered held and used in accordance with FASB ASC 360, Property, Plant, & Equipment.

Accounting Pronouncements

Recently Adopted

Revenue Recognition

On May 28, 2014, the FASB issued Accounting Standard Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU outlines a single comprehensive model for entities to utilize to recognize revenue when it transfers goods or services to customers in an amount that reflects the consideration that will be received in exchange for the goods and services. Additional disclosures are also required to enable users to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In 2016, the FASB issued ASU No. 2016-08, ASU No. 2016-10, ASU No. 2016-12, and ASU No. 2016-20, all of which amend the implementation guidance and illustrations in the new revenue standard.

The Company implemented the new standard effective January 1, 2018 using the modified retrospective approach. Implementation of the standard did not have a material impact on the Company’s Consolidated Financial Statements as the Company’s method for recognizing revenue subsequent to the implementation

57

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

of ASC No. 606 does not vary significantly from its revenue recognition practices under the prior revenue standard. The Company has included the additional disclosures required by the ASUs above (Refer to Note 3).

Retirement Benefits

On March 10, 2017, the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This ASU is designed to increase the transparency and usefulness of information about defined benefit costs for pension plans and other post-retirement benefit plans presented in employer financial statements. Effective October 1, 2006, the Company’s pension plan was frozen and the Company ceased accruing any additional benefits. The Company adopted the new standard effective January 1, 2018 and applied the guidance retrospectively, as required. As a result of adoption, the Company’s net periodic pension cost and net periodic postretirement benefit cost are reported within net periodic benefit income on the Consolidated Statement of Operations. The Company has included the disclosures required by ASU No. 2017-07.

Hedge Accounting

On August 28, 2017, the FASB issued ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities. This ASU is designed to better align hedge accounting with an organization’s risk management activities in the financial statements. In addition, this ASU simplifies the application of hedge accounting guidance in areas where practice issues exist. The Company early adopted this ASU as of January 1, 2018. Upon adoption, the Company recorded a cumulative effect adjustment of  $5.1 million and corresponding tax effect adjustment of  $1.3 million to Accumulated Other Comprehensive Income (“AOCI”) from accumulated earnings. This adjustment is intended to ensure that the resulting AOCI balance represents the cumulative change in the hedging instruments’ fair value since hedge inception, less any amounts that should have been recognized in earnings under this ASU. Going forward, the earnings effect of the hedged items will be recorded in the same line item in the Consolidated Statements of Operations in which the earnings effect of the hedged item is reported when the hedged item affects earnings.

Goodwill Impairment

On January 26, 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. This ASU simplifies the accounting for goodwill impairments by eliminating step 2 from the goodwill impairment test, and is effective for annual and any interim impairment tests for periods beginning after December 15, 2019. Early adoption of the ASU is allowed for all entities beginning with any goodwill impairment test occurring and performed after January 1, 2017. The Company adopted this standard during 2018 and utilized the standard for its goodwill impairment test that was performed during the fourth quarter of 2018. Refer to Note 3 for results of the testing performed.

Pending Adoption

Leases

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This ASU introduces a lessee model that brings most leases on the balance sheet. The new standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize an ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as financing or operating, with balance sheet classification affecting the pattern and classification of expense recognition in the income statement. Subsequent to initial issuance of ASU No. 2016-02, the FASB has issued numerous ASU’s that contain targeted improvements to the original standard.

This ASU is effective for annual periods beginning after December 15, 2018, and interim periods within those fiscal years. The Company expects to adopt the new standard on its effective date. The new standard allows for two different transition approaches that are required for leases existing at, or entered into after,

58

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

the beginning of the earliest comparative period presented in the Consolidated Financial Statements. The Company will utilize the transition method that allows entities to initially apply the new lease standard at the adoption date (January 1, 2019) and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company estimates that it will record a cumulative effect adjustment of approximately $6 million.

The new standard also provides certain practical expedients for an entity’s ongoing accounting. The Company does not expect to utilize the package of practical expedients available. However, the Company currently expects to elect the short-term lease recognition exemption for all leases that qualify, which means the Company will not recognize ROU assets or lease liabilities for short-term leases.

The Company expects that this standard will have a material effect on its Consolidated Financial Statements. To assess the impact of the new standard, the Company has reviewed all leasing agreements, reassessed the classification of its leases, evaluated significant contracts for embedded leases, and compared its historical accounting policies and practices to the requirements of the new standard. The Company is currently evaluating whether certain customer contracts contain embedded leases.

Based on the assessments performed thus far, the Company believes that it has certain manufacturing equipment leases currently classified as operating leases that will be classified as finance leases under the new standard. As of December 31, 2018 and 2017, the Company estimates that the ROU asset and liability associated with these leases would be approximately $157 million and $72 million, respectively. This estimate is based upon the present value of the remaining minimum lease payments for equipment that is subject to lease agreements as of December 31, 2018 and 2017.

In addition, the Company has numerous real estate and equipment leases currently classified as operating that the Company believes will continue to be classified as operating under the new standard. The Company estimates that the ROU assets and lease liabilities associated with these leases will be approximately $100 million.

There are certain considerations related to internal control over financial reporting that are associated with implementing the new guidance under ASC No. 842 and the Company is currently implementing the necessary changes to its control framework. Disclosure requirements under the new guidance in ASC No. 842 have been significantly expanded in comparison to the disclosure requirements under the current guidance. The Company is currently concluding its assessment of the new disclosure requirements and is in the process of drafting disclosures for both interim and annual periods in 2019 under ASC No. 842.

Stock Compensation

On June 20, 2018, the FASB issued ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting. This ASU simplifies the accounting for share based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. This ASU is effective for annual and interim periods beginning after December 15, 2018 and early adoption is permitted. The Company does not expect a material financial statement impact related to the adoption of this ASU.

Fair Value Measurement

On August 28, 2018, the FASB issued ASU No. 2018-13, Changes to the Disclosure Requirements for Fair Value Measurement. This ASU modifies the disclosure requirements on fair value measurements. This ASU is effective for annual and interim periods beginning after December 15, 2019 and early adoption is permitted. The Company does not expect a material financial statement impact related to the adoption of this ASU.

59

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

Retirement Benefits

On August 28, 2018, the FASB issued ASU No. 2018-14, Changes to the Disclosure Requirements for Defined Benefit Plans. This ASU modifies the disclosure requirements related to defined benefit pension or other postretirement benefit plans. This ASU is effective for annual and interim periods beginning after December 15, 2020 and early adoption is permitted. The Company does not expect a material financial statement impact related to the adoption of this ASU.

Note 3. Significant Accounting Policies

Financial Statement Presentation

a. Principles of Consolidation

The Consolidated Financial Statements include the accounts of the Company and all subsidiaries over which the Company exercises control. The Company’s share of earnings or losses of nonconsolidated affiliates are included in the consolidated operating results using the equity method of accounting when the Company is able to exercise significant influence over the operating and financial decisions of the affiliates. All intercompany transactions and balances have been eliminated upon consolidation.

b. Cash and Cash Equivalents

All highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. Cash equivalents are stated at cost, which approximates fair value because of the short maturity of these instruments.

c. Allowance for Doubtful Accounts

The Company maintains an allowance for doubtful accounts receivable, which represents its estimate of losses inherent in trade receivables. The Company provides an allowance for specific customer accounts where collection is doubtful based on historical collection and write-off experience. The Company will also take into consideration unique factors and provide an allowance, if necessary. Bad debt expense is not material for any period presented.

d. Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is determined by the first-in, first-out method. Maintenance, repair, and non-productive inventory, which are considered consumables, are expensed when acquired and included in the Consolidated Statements of Operations as cost of sales. Inventories consist of the following (in thousands):

​	December 31, 2018			December 31, 2017
Raw materials	​	$	29,752	​	$	23,566
Work in process	​	​	13,008	​	​	12,914
Finished goods	​	​	26,674	​	​	21,015
Total inventory	​	$	69,434	​	$	57,495

60

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

e. Tooling

Tooling represents costs incurred by the Company in the development of new tooling used in the manufacture of the Company’s products. All pre-production tooling costs incurred for tools that the Company will not own and that will be used in producing products supplied under long-term supply agreements are expensed as incurred, unless the supply agreement provides the Company with the noncancellable right to use the tools or the reimbursement of such costs is contractually guaranteed by the customer. Generally, the customer agrees to reimburse the Company for certain of its tooling costs at the time the customer awards a contract to the Company.

When the part for which tooling has been developed reaches a production-ready status, the Company is reimbursed by its customer for the cost of the tooling, at which time the tooling becomes the property of the customer. The Company has certain other tooling costs related to tools the Company has the contractual right to use during the life of the supply arrangement, which are capitalized and amortized over the life of the related product program. Customer-owned tooling is included in the Consolidated Balance Sheets in prepaid tooling, notes receivable, and other, while company-owned and other tooling is included in other assets, net.

The components of capitalized tooling costs are as follows (in thousands):

​	December 31, 2018			December 31, 2017
Customer-owned tooling, net	​	$	14,758	​	$	33,332
Company-owned tooling	​	​	507	​	​	277
Total tooling, net	​	$	15,265	​	$	33,609

Any gain recognized, which is defined as the excess of reimbursement over cost, is amortized over the life of the program. If estimated costs are expected to be in excess of reimbursement, a loss is recorded in the period in which the loss is estimated.

f. Property, Plant, and Equipment

Property, plant, and equipment are recorded at cost, less accumulated depreciation. Depreciation expense was $54.4 million, $50 million, and $47.4 million for the years ended December 31, 2018, 2017, and 2016, respectively. Depreciation is computed using the straight-line method over the following estimated useful lives of assets:

Buildings and improvements	32 to 40 years​
Machinery and equipment	3 to 20 years​

Leasehold improvements are amortized over the shorter of ten years or the remaining lease term at the date of acquisition of the leasehold improvement.

Costs of maintenance and repairs are charged to expense as incurred and included in cost of sales. Spare parts are considered capital in nature when purchased during the initial investment of a fixed asset. Amounts relating to significant improvements, which extend the useful life or utility of the related asset, are capitalized and depreciated over the remaining life of the asset. Upon disposal or retirement of property, plant, and equipment, the cost and related accumulated depreciation are eliminated from the respective accounts and the resulting gain or loss is recognized in cost of sales in the Consolidated Statements of Operations.

61

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

Property, plant, and equipment consist of the following (in thousands):

​	December 31, 2018			December 31, 2017
Cost:	​	​	​	​	​	​
Land	​	$	5,329	​	$	7,383
Buildings and improvements	​	​	106,594	​	​	118,893
Machinery and equipment	​	​	656,084	​	​	623,291
Construction in progress	​	​	74,490	​	​	33,633
Property, plant, and equipment, gross	​	​	842,497	​	​	783,200
Less: accumulated depreciation	​	​	(494,694)	​	​	(460,001)
Property, plant, and equipment, net	​	$	347,803	​	$	323,199

The Company recorded capitalized interest on its construction in progress of  $1.7 million, $3.3 million, and $2.2 million during the years ended December 31, 2018, 2017, and 2016, respectively.

g. Asset Retirement Obligations

FASB ASC No. 410, Asset Retirement and Environmental Obligations, requires the recognition of a liability for the fair value of a conditional asset retirement obligation if the fair value can be reasonably estimated. An asset retirement obligation is a legal obligation to perform certain activities in connection with the retirement, disposal, or abandonment of tangible long-lived assets. The fair value of a conditional asset retirement obligation should be recognized when incurred, generally upon acquisition, construction, or development and through the normal operation of the asset. Uncertainty about the timing or method of settlement of a conditional asset retirement should be factored into the measurement of the liability. The liability is measured at fair value and is adjusted to its present value in subsequent periods. The Company’s asset retirement obligations are primarily associated with renovating, upgrading, and returning leased property to the lessor, in accordance with the requirements of the lease.

Asset retirement obligations are included in other non-current liabilities in the Consolidated Balance Sheets. The following table reconciles the Company’s asset retirement obligations as of December 31, 2018 and 2017 (in thousands):

​	December 31, 2018			December 31, 2017
Beginning balance	​	$	16,687	​	$	16,676
Liabilities incurred	​	​	1,378	​	​	3,698
Accretion expense	​	​	1,182	​	​	1,338
Liabilities settled	​	​	—	​	​	—
Change in estimate	​	​	(4,751)	​	​	(5,025)
Ending balance	​	$	14,496	​	$	16,687

The changes in estimate for the years ended December 31, 2018 and 2017 relate primarily to revisions of the expected settlement dates for certain leased facilities.

h. Impairment of Long-Lived Assets

The Company monitors its long-lived assets for impairment on an ongoing basis in accordance with FASB ASC No. 360, Property, Plant, and Equipment. If an impairment indicator exists, the Company will perform the required analysis and record an impairment charge, if necessary. In conducting its impairment analysis, the Company compares the undiscounted cash flows expected to be generated from a long-lived asset to its

62

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

net book value. If the net book value of an asset exceeds its undiscounted cash flows, an impairment loss is measured and recognized. An impairment loss is measured as the difference between net book value and fair value. Fair value is estimated based upon discounted cash flow analyses using cash flow projections based on recent sales data, and independent automotive production volume estimates, and customer commitments. Changes in economic or operating conditions impacting these estimates and assumptions could result in impairment of long-lived assets. Refer to Note 4 for a discussion regarding impairment charges for the periods presented.

Long-lived assets held for sale are recorded at the lower of their carrying amount or estimated fair value less cost to sell and depreciation is ceased.

i. Goodwill and Other Intangible Assets

Goodwill represents the excess of the cost of an acquisition over the fair value of net assets acquired. Goodwill is not amortized, but it is tested for impairment on, at a minimum, an annual basis. In accordance with FASB ASC No. 350, Intangibles — Goodwill and Other, the Company qualitatively assesses its goodwill assigned to each of its reporting units annually at year-end. This qualitative assessment evaluates various factors, such as macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, and other relevant events, that may impact a reporting unit’s fair value. Using this qualitative assessment, the Company determines whether it is more-likely-than-not that the reporting unit’s fair value exceeds its carrying value. If it is determined that it is not more-likely-than-not that the reporting unit’s fair value exceeds the carrying value, the Company performs a quantitative goodwill impairment analysis by comparing the carrying amount of the reporting unit to its fair value. The Company will also test goodwill for impairment when an event occurs or circumstances change such that it is reasonably possible that impairment may exist.

The evaluation of goodwill for possible impairment includes estimating the fair market value of each of the reporting units which have goodwill associated with their operations using discounted cash flow and multiples of cash earnings valuation techniques, plus valuation comparisons to recent public sale transactions of similar businesses, if any. These valuation methods require the Company to make estimates and assumptions regarding future operating results, cash flows, changes in working capital and capital expenditures, selling prices, profitability, and the cost of capital. Although the Company believes that the estimates and assumptions used were reasonable, actual results could differ from those estimates and assumptions.

The results of the Company’s 2018 and 2017 annual goodwill impairment analysis for its continuing operations indicated that the fair value of the Company’s reporting unit was in excess of carrying value: thus, no impairment existed at December 31, 2018 and 2017.

The change in the carrying amount of goodwill for the Company’s reportable segment is set forth below (in thousands):

Balance at December 31, 2016	$	7,090
Currency translation adjustment	​	334
Balance at December 31, 2017	​	7,424
Currency translation adjustment	​	29
Balance at December 31, 2018	$	7,453

During the fourth quarter of 2018, the Company entered into an agreement to sell its European operations (see Note 5) and recorded a total fair value adjustment of  $44 million, of which $36 million was related to an impairment of goodwill. The Company performed a quantitative goodwill impairment analysis that determined the carrying value of the Europe reporting unit was less than its estimated fair value. The

63

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

Company’s European operations are considered held for sale in accordance with FASB ASC No. 360, Property, Plant, and Equipment, and presented as discontinued operations in the Consolidated Financial Statements, in accordance with FASB ASC No. 205, Discontinued Operations.

The Company recorded a $3.6 million intangible asset during the third quarter of 2015 related to the acquisition of a facility in Mexico. This intangible asset has a definite life and is being amortized on a straight-line basis over seven years, the estimated life of the related asset, which approximates the recognition of related revenues.

The Company incurred amortization expense related to intangible assets of  $0.4 million, $0.4 million, and $0.4 million for the years ended December 31, 2018, 2017, and 2016, respectively.

j. Derivative Financial Instruments

Periodically, the Company uses derivative financial instruments to manage interest rate risk and net investment risk in foreign operations, and to limit exposure of foreign currency fluctuations related to certain intercompany payments. The Company is not a party to leveraged derivatives and does not enter into derivative financial instruments for trading or speculative purposes. Under FASB ASC No. 815, Derivatives and Hedging, all derivatives are recorded at fair value.

The Company formally documents hedge relationships, including the identification of the hedging instruments and the hedged items, as well as the risk management objectives and strategies for undertaking the hedge transaction. To the extent that derivative instruments qualify, and are designated as, cash flow or net investment hedges, the effective portion is recorded as a component of AOCI and the ineffective portion is recorded as interest expense. All hedges are presented in the Consolidated Balance Sheets at fair value as other assets, net or other non-current liabilities with a corresponding offset to AOCI. The Company also formally assesses whether a derivative used in a hedging transaction is highly effective in offsetting changes in either the fair value or cash flows of the hedged item at inception and on a quarterly basis, thereafter. If the Company determines that a derivative ceases to be an effective hedge, it will discontinue hedge accounting.

k. Fair Value of Financial Instruments

FASB ASC No. 820, Fair Value Measurements, 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 (i.e., the exit price). The exit price is based upon the amount that the holder of the asset or liability would receive or need to pay in an actual transaction or in a hypothetical transaction if an actual transaction does not exist at the measurement date. In some circumstances, the entry and exit price may be the same; however, they are conceptually different.

The Company generally determines fair value based upon quoted market prices in active markets for identical assets or liabilities. If quoted market prices are not available, the Company uses valuation techniques that place greater reliance on observable inputs and less reliance on unobservable inputs. In measuring fair value, the Company may make adjustments for risks and uncertainties, if a market participant would include such an adjustment in its pricing.

FASB ASC No. 820 establishes a fair value hierarchy that distinguishes between assumptions based upon market data, referred to as observable inputs, and the Company’s assumptions, referred to as unobservable inputs. Determining where an asset or liability falls within that hierarchy depends on the lowest level input that is significant to the fair value measurement as a whole. An adjustment to the pricing method used within either Level 1 or Level 2 inputs could generate a fair value measurement that effectively falls in a lower level in the hierarchy. The hierarchy consists of three broad levels as follows:

Level 1:

Quoted market prices in active markets for identical assets and liabilities;

Level 2:

Inputs, other than Level 1 inputs, that are either directly or indirectly observable; and

64

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

Level 3:

Unobservable inputs developed using estimates and assumptions that reflect those that market participants would use.

At December 31, 2018, the carrying value and estimated fair value of the Company’s total debt was $304.6 million and $290.1 million, respectively. At December 31, 2017, the carrying value and estimated fair value of the Company’s total debt was $358.9 million and $361.5 million, respectively. The majority of the Company’s debt at December 31, 2018 and 2017 was comprised of the Term Loan Credit Facility, which can be traded between financial institutions. Accordingly, this debt has been classified as Level 2. The fair value was determined based upon quoted values. The remainder of the Company’s debt, primarily consisting of foreign subsidiary indebtedness, is asset-backed and is classified as Level 3. As this debt carries variable rates and minimal credit risk, the book values approximate the fair values.

The Company has foreign currency exchange hedges and an interest rate swap that were measured at fair value on a recurring basis at December 31, 2018 and 2017. These instruments are recorded in other assets, net or other non-current liabilities in the Company’s Consolidated Balance Sheets and the fair value is measured using Level 2 observable inputs such as foreign currency exchange rates, swap rates, cross currency basis swap spreads and interest rate spreads. At December 31, 2018, the foreign currency exchange hedge (net investment hedge of the Company’s European subsidiaries) and the interest rate swap had liability fair values of  $19.9 million and $5 million respectively. At December 31, 2017, the foreign currency exchange hedge (net investment hedge of our European subsidiaries) and the interest rate swap had liability fair values of  $27 million and $8.9 million, respectively.

The following table provides each major category of assets and liabilities measured at fair value on a nonrecurring basis during the year ended December 31, 2018 (in millions):

​	Quoted prices in active markets for identical assets	Significant other observable inputs	Significant unobservable inputs			Total gains/(losses)
​	Level 1	Level 2	Level 3
Long-lived assets held for sale	Not applicable	Not applicable	​	$	263.7	​	$	(44.0)

In accordance with FASB ASC No. 360, Property, Plant, & Equipment, the long-lived assets held for sale related to the Company’s European operations, with a carrying amount of  $307.7 million were written down to their fair value of  $263.7 million, resulting in a loss of  $44 million, which was included in the Company’s Consolidated Statements of Operations for the year ended December 31, 2018 as income/(loss) from discontinued operations, net of tax. The fair value of the assets was determined based upon consideration of the negotiated sales price in the sales agreement compared to the carrying value of the European operations. The carrying value also includes the cumulative translation adjustment that will need to be reclassified into earnings.

The following table provides each major category of assets and liabilities measured at fair value on a nonrecurring basis during the year ended December 31, 2017 (in millions):

​	Quoted prices in active markets for identical assets	Significant other observable inputs	Significant unobservable inputs			Total gains/(losses)
​	Level 1	Level 2	Level 3
Long-lived assets held for sale	Not applicable	Not applicable	​	$	4.3	​	$	(0.3)

In accordance with FASB ASC No. 360, Property, Plant, & Equipment, the long-lived assets held for sale related to the Ningbo joint venture in China, with a carrying amount of  $4.6 million were written down to their fair value of  $4.3 million, resulting in a loss of  $0.3 million, which was included in the Company’s Consolidated Statements of Operations for the twelve months ended December 31, 2017 as income/(loss) from discontinued operations, net of tax. The fair value of the assets was determined based upon consideration of the negotiated sales price in the sales agreement.

65

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

The following table provides each major category of assets and liabilities measured at fair value on a nonrecurring basis during the year ended December 31, 2016 (in millions):

​	Quoted prices in active markets for identical assets	Significant other observable inputs	Significant unobservable inputs			Total gains/(losses)
​	Level 1	Level 2	Level 3
Long-lived assets held for sale	Not applicable	Not applicable	​	$	4.6	​	$	(3.1)
Asset impairment	Not applicable	Not applicable	​	​	18.6	​	​	(15.0)

In accordance with FASB ASC No. 360, Property, Plant, & Equipment, the long-lived assets held for sale related to the Ningbo joint venture in China, with a carrying amount of  $7.7 million were written down to their fair value of  $4.6 million, resulting in a loss of  $3.1 million, which was included in the Company’s Consolidated Statements of Operations for the twelve months ended December 31, 2016 as income/(loss) from discontinued operations, net of tax. The fair value of the assets was determined based upon consideration of the negotiated sales price in the sales agreement.

In accordance with FASB ASC No. 360, Property, Plant, & Equipment, the long-lived assets held for sale related to the Company’s remaining Brazilian operations, with a carrying amount of  $33.6 million were written down to their fair value of  $18.6 million, resulting in a loss of  $15 million, which was included in the Company’s Consolidated Statements of Operations for the twelve months ended December 31, 2016 as income/(loss) from discontinued operations, net of tax. This fair value adjustment of  $15 million reflected that upon the sale of the Brazilian operations, the cumulative translation adjustment would be reclassified to earnings. During 2018, the Company reclassified the Brazilian operations as held and used.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate fair value because of the short maturity of these instruments.

l. Revenue Recognition

On January 1, 2018, the Company adopted FASB ASC No. 606, Revenue from Contracts with Customers, using the modified retrospective method as applied to customer contracts that were not completed as of January 1, 2018. As a result, financial information for reporting periods beginning on or after January 1, 2018 are presented in accordance with FASB ASC No. 606, while comparative financial information has not been adjusted and continues to be reported in accordance with the Company’s revenue recognition policies prior to the adoption of FASB ASC No. 606.

The Company enters into contracts with its customers that create enforceable rights and obligations. Each such contract requires the Company to supply products for specific vehicle programs. The Company has determined that each unit produced represents a separate performance obligation. The Company satisfies its performance obligations and recognizes revenue at a point in time when the customer has obtained control of the unit. Determining when control transfers requires management to make judgments that affect the timing of revenue recognized. The Company has determined that control has transferred when its products are shipped to its customers because the Company has a present right to payment at that time, legal title and risk of loss have passed to the customer and the customer is able to direct the use of, and obtain substantially all of the benefits from, the products. Invoices are generated upon shipment to the customer and are based on contractually agreed upon unit prices. The Company has payment terms with its customers that generally require payment within 30 to 60 days of invoice date. FASB ASC No. 606 provides a practical expedient that allows companies to exclude from the transaction price any amounts collected from customers for all sales (and other similar) taxes. We do not include sales and other taxes in our transaction price and thus do not recognize these amounts as revenue. Shipping and handling costs are accounted for as fulfillment costs and are included in cost of sales.

It is common for the Company to negotiate pricing with its customers on an annual basis which can result in price adjustments over the program lives or other variable consideration adjustments. Based on extensive historical experience, the Company has concluded its estimate of variable consideration is not constrained.

66

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

Therefore the Company accrues for these items using the most likely amount method in accordance with FASB ASC No. 606-10-32 and records adjustments to revenue throughout the year as negotiations progress and are finalized. In certain cases, the Company provides lump sum payments to its customers that are directly related to awarded programs. These payments are expected to be recovered over the life of the associated program; therefore, the Company capitalizes these payments and amortizes them into revenue over the life of the associated program.

The Company participates in certain of its customers’ steel repurchase programs, under which it purchases steel directly from a customer’s designated steel supplier, for use in manufacturing products for that customer. The Company takes delivery and title to such steel and bears the risk of loss and obsolescence. The Company invoices its customers based upon annually negotiated selling prices, which inherently include a component for steel under such repurchase programs. Under guidance provided in FASB ASC No. 606-10-55, Principal versus Agent Considerations, the Company has risks and rewards of a principal and therefore, for sales transactions in which the Company participates in a customer’s steel resale program, revenue is recognized on a gross basis for the entire amount of the sales, including the component for purchases under that customer’s steel resale program. The purchases through customer resale programs have buffered the impact of price swings associated with the procurement of these metals. The remainder of the Company’s steel and aluminum purchasing requirements are met through contracts with mills, in which the Company negotiates its own price and seeks to pass through price increases and decreases to the Company’s customers.

The Company enters into agreements to produce products for its customers at the beginning of a given vehicle program’s life. Once such agreements are entered into by the Company, it is obligated to fulfill the customers’ purchasing requirements for the entire production period of the vehicle programs, which range from three to ten years, and generally, the Company has no provisions to terminate such contracts. These contracts may be terminated by the Company’s customers at any time. Historically, terminations of these contracts have been minimal.

Additionally, the Company monitors the aging of uncollected billings and adjusts its accounts receivable allowance on a quarterly basis, as necessary, based upon its evaluation of the probability of collection. The adjustments made by the Company due to the write-off of uncollectible amounts have been immaterial for all periods presented. At December 31, 2018, the Company’s accounts receivable, net of allowances, were $113.1 million and the Company did not have any material unbilled or deferred revenue recorded on the Consolidated Balance Sheet.

For the year ended December 31, 2018, revenue recognized from performance obligations related to prior periods (for example, due to changes in transaction price) was not material.

Revenue expected to be recognized in any future period related to remaining performance obligations, excluding revenue pertaining to contracts that have an original expected duration of one year or less or contracts where revenue is recognized as invoiced, is not material.

67

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

The following table summarizes the Company’s customer mix as a percent of revenues for the year ended December 31, 2018:

Customer	​
Ford	47%
Fiat – Chrysler	22%
Nissan	12%
Toyota	8%
BMW	5%
Volkswagen Group	2%
Honda	2%
Other	2%
Total	100%

The following table summarizes the Company’s vehicle platform mix as a percent of revenues for the year ended December 31, 2018:

Vehicle Platform	​
SUV	53%
Pickup	27%
Van	4%
MPV	2%
Light trucks	86%
Large Car	7%
Small Car	5%
All Other	2%
Total	100%

Prior to January, 1, 2018, the Company recognized revenue in accordance with FASB ASC No. 605, Revenue Recognition. The Company recognized revenue once the following criteria were met: persuasive evidence of an arrangement existed; delivery had occurred or services had been rendered; the Company’s price to the buyer was fixed or determinable; and collectability was reasonably assured.

m. Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the Consolidated Financial Statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company records net deferred tax assets to the extent it believes that these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. Valuation allowances have been recorded where it has been determined that it is more likely than not that the Company will not be able to realize the net deferred tax assets. Previously established valuation allowances are reversed into income when there is compelling evidence, typically three or more consecutive years of cumulative profit or other positive

68

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

evidence, that the future tax profitability will be sufficient to utilize the deferred tax asset. Due to the significant judgment involved in determining whether deferred tax assets will be realized, the ultimate resolution of these items may be materially different from the previously estimated outcome.

Changes in tax laws and rates could also affect recorded deferred tax assets and liabilities in the future. The Company recorded a one-time deferred tax expense of  $27.2 million in the fourth quarter of 2017 in order to revalue the Company’s U.S. deferred tax assets to the new lower U.S. Federal statutory rate of 21% due to U.S. Tax Reform.

The calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across the Company’s operations.

FASB ASC No. 740, Income Taxes, provides that a tax benefit from an uncertain tax position be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. FASB ASC No. 740 also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company has elected to recognize interest and penalties related to unrecognized tax benefits as income tax expense.

The Company recognizes tax liabilities in accordance with FASB ASC No. 740 and adjusts these liabilities when its judgment changes as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different than the Company’s current estimate of the tax liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which they are determined.

n. Segment Reporting

The Company determines its reportable segments based upon the guidance in FASB ASC No. 280, Segment Reporting. The Company defines its operating segments as components of its business where separate financial information is available. Based on these criteria, the Company has determined that it has two operating segments, North America and Brazil, which have been aggregated into one reportable segment.

o. Foreign Currency Translation

The functional currency of the Company’s foreign operations is the local currency in which they operate. Assets and liabilities of the Company’s foreign operations are translated into U.S. dollars using the applicable period-end exchange rates. Results of operations are translated at applicable average rates prevailing throughout the period. Gains or losses resulting from foreign currency translation are reported as foreign currency translation adjustments, a separate component of AOCI, in the Consolidated Statements of Comprehensive Income/(Loss). Gains and losses resulting from foreign currency transactions are recognized in net income/(loss) in the Consolidated Statements of Operations and were immaterial for all periods presented.

p. Exit or Disposal Activities

Costs to idle, consolidate, or close facilities and provide postemployment benefits to employees are accrued based on management’s best estimate of the wage and benefit costs that will be incurred. Costs related to idling of employees that is expected to be temporary are expensed as incurred. Costs to terminate a contract without economic benefit to the Company are expensed at the time the contract is terminated. One-time termination benefits that are not subject to contractual arrangements, provided to employees who are involuntarily terminated, are recorded after management commits to a detailed plan of termination, communicates the plan to employees, and when actions required to complete the plan indicate that significant changes are not likely. If employees are required to render services until they are terminated in order to earn termination benefits, the benefits are recognized ratably over the future service period.

69

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

q. Share-based Compensation

The Company measures compensation cost arising from the grant of share-based awards to employees at fair value. The Company recognizes such costs in income over the period during which the requisite service is provided. Refer to Note 11 for further discussion regarding share-based compensation.

r. Accumulated Other Comprehensive Income/(Loss)

The following table presents the components of accumulated other comprehensive loss (in thousands):

​	As of December 31, 2018			As of December 31, 2017
Foreign currency translation adjustments, net of tax expense of  $2.9 million and $0.1 million	​	$	(36,531)	​	$	(24,861)
Defined benefit plans, net of tax expense of  $14.9 million and $15 million	​	​	(38,185)	​	​	(38,249)
Unrealized loss on qualifying cash flow hedge, net of tax (benefit) of ($1.3 million) and ($2.8 million)	​	​	(204)	​	​	(4,698)
Accumulated other comprehensive loss	​	$	(74,920)	​	$	(67,808)

The following table presents the changes in accumulated other comprehensive loss, net of tax, by component for the year ended December 31, 2018 (in thousands):

​	Unrealized Losses on Qualifying Cash Flow Hedge			Defined Benefit Plans			Foreign Currency Translation Adjustments			Total
Balance at December 31, 2017	​	$	(4,698)	​	$	(38,249)	​	$	(24,861)	​	$	(67,808)
Other comprehensive income/(loss) before reclassification	​	​	3,760	​	​	64	​	​	(14,784)	​	​	(10,960)
Amounts reclassified from accumulated other comprehensive income	​	​	734	​	​	—	​	​	3,114	​	​	3,848
Net current-period other comprehensive income/(loss)	​	​	4,494	​	​	64	​	​	(11,670)	​	​	(7,112)
Balance at December 31, 2018	​	$	(204)	​	$	(38,185)	​	$	(36,531)	​	$	(74,920)

The following table presents the changes in accumulated other comprehensive loss, net of tax, by component for the year ended December 31, 2017 (in thousands):

​	Unrealized Gains on Qualifying Cash Flow Hedge			Defined Benefit Plans			Foreign Currency Translation Adjustments			Total
Balance at December 31, 2016	​	$	—	​	$	(38,972)	​	$	(44,411)	​	$	(83,383)
Other comprehensive income/(loss) before reclassification	​	​	(4,698)	​	​	723	​	​	19,550	​	​	15,575
Net current-period other comprehensive income/(loss)	​	​	(4,698)	​	​	723	​	​	19,550	​	​	15,575
Balance at December 31, 2017	​	$	(4,698)	​	$	(38,249)	​	$	(24,861)	​	$	(67,808)

70

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

s. Estimates

The preparation of the Company’s financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures related to contingent assets and liabilities at the reporting date and the reported amounts of revenues and expenses during the reporting period. Generally, matters subject to estimation and judgment include amounts related to accounts receivable realization, fair value measurements, pension and other postretirement benefit plan assumptions, restructuring reserves, asset valuation reserves and accruals related to environmental remediation costs, asset retirement obligations, and income taxes. Actual results may differ from those estimates and assumptions and changes in such estimates and assumptions may affect amounts reported in future periods.

Note 4. Restructuring and Asset Impairment Charges

As of December 31, 2018, the Company has executed various restructuring plans and may execute additional plans in the future to realign manufacturing capacity to prevailing global automotive production and to improve the utilization of remaining facilities. Estimates of restructuring charges are based on information available at the time such charges are recorded. Due to the inherent uncertainty involved in estimating restructuring expenses, actual amounts paid for such activities may differ from amounts initially recorded. Accordingly, the Company may record revisions of previous estimates by adjusting previously established reserves.

Restructuring Charges

The following table sets forth the Company’s net restructuring and asset impairment charges by type for the periods presented (in thousands):

​	Year Ended December 31,
​	2018			2017			2016
Employee termination costs	​	$	3,059	​	$	7,862	​	$	1,335
Other exit costs	​	​	321	​	​	1,236	​	​	4,578
Asset impairments	​	​	—	​	​	—	​	​	15,000
Total restructuring expense	​	$	3,380	​	$	9,098	​	$	20,913

The charges incurred during 2018, 2017, and 2016 primarily related to the following actions:

2018 Actions

During the year ended December 31, 2018, the charges incurred related to severance charges to reduce corporate overhead and ongoing maintenance expense of facilities closed as a result of prior actions. During the second quarter of 2018, the Company amended the lease agreements related to closed facilities. As a result of these amendments, the Company will no longer record material restructuring expense related to the closed facilities.

2017 Actions

During the year ended December 31, 2017, the charges incurred related to severance charges to reduce corporate overhead and ongoing maintenance expense of facilities closed as a result of prior actions. During 2017, the Company took numerous actions to better align the management teams to the remaining footprint of the continuing operations. These actions included a shift in composition of the executive leadership team as well as certain changes within the corporate and regional management teams. All estimated costs related to these actions have been recorded during 2017.

71

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

2016 Actions

During the year ended December 31, 2016, the charges incurred related to the buyout of a lease on a previously closed facility, ongoing maintenance expense of facilities closed as a result of prior actions and severance charges to reduce fixed costs. Additionally, the Company recorded a $15 million impairment charge upon classifying Brazilian operations as held for sale. During 2018, the Company reclassified the Brazilian operations as held and used.

Restructuring Reserve

The following table summarizes the activity in the restructuring reserve, which is included in the Consolidated Balance Sheets in accrued liabilities, for the above-mentioned actions through December 31, 2018 (in thousands):

Balance at December 31, 2016	$	197
Payments	​	(3,989)
Increase in liability	​	7,862
Balance at December 31, 2017	​	4,070
Payments	​	(4,421)
Increase in liability	​	3,059
Balance at December 31, 2018	$	2,708

Except as disclosed in the table above, the Company does not anticipate incurring additional material cash charges associated with the actions described above. The increase in the restructuring reserve set forth in the table above does not agree with the restructuring charges for the period, as certain items are expensed as incurred related to the actions described.

The restructuring reserve decreased during the year ended December 31, 2018, reflecting primarily payments related to 2018 restructuring actions and prior accruals, offset partially by accruals for severance. The restructuring reserve increased during the year ended December 31, 2017, reflecting primarily accruals for severance, offset partially by payments related to 2017 restructuring actions and prior accruals.

During the year ended December 31, 2018, the Company incurred payments related to prior accruals of $4.4 million. During the year ended December 31, 2017, the Company incurred payments related to prior accruals of  $4 million.

Note 5. Discontinued Operations and Assets Held for Sale

The following table discloses select financial information of the discontinued operations of the Company’s European operations and Chinese joint ventures (in thousands):

​	Year Ended December 31,
​	2018			2017			2016
Revenues	​	$	650,294	​	$	683,487	​	$	714,381
Loss from sale of discontinued operations	​	​	(44,000)	​	​	(2,896)	​	​	(3,100)
Income/(loss) from discontinued operations:	​	​	​	​	​	​	​	​	​
Income before provision for income taxes	​	​	(20,968)	​	​	19,769	​	​	36,568
Provision for income taxes	​	​	7,251	​	​	11,737	​	​	10,992
Income/(loss) from discontinued operations, net of tax	​	$	(28,219)	​	$	8,032	​	$	25,576

72

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

Europe Operations

During the fourth quarter of 2018, the Company’s subsidiaries Tower Automotive Holdings III Cooperatie U.A. and Tower Automotive Holdings USA, LLC entered into a Memorandum of Understanding and Stock Purchase Agreement with Financière SNOP Dunois S.A. (the “Purchaser”). Pursuant to the agreement, the Purchaser will acquire all of the stock of TA Holdings Europe B.V., an indirect wholly owned subsidiary of the Company, and an intercompany loan, for a purchase price of  €255 million on a cash free, debt free basis, subject to working capital and other customary adjustments and a reduction to the extent that capital expenditures for the Company’s European operations for calendar year 2018 were less than €45 million. Approval of the transaction is subject to (i) the approval of the European Commission and (ii) the absence of a material breach in any of the seller parties’ fundamental representations (e.g., title, authority and absence of insolvency). On February 13, 2019, the Company obtained the required approvals from the European Commission. During the first quarter of 2019, the Company expects to consummate the transaction and receive the net sale proceeds of approximately $250 million after payment of transaction costs and the repayment of the Company’s cross currency swap. The anticipated purchase price less expected transaction related costs is less than the carrying value as of December 31, 2018; therefore, the Company recorded a fair value adjustment of  $44 million during the fourth quarter of 2018. Included in the fair value adjustment is the required recognition of the cumulative translation adjustment that will be reclassified to earnings.

The Company’s European operations are considered held for sale in accordance with FASB ASC No. 360, Property, Plant, and Equipment, and have been presented as discontinued operations in the Company’s Consolidated Financial Statements in accordance with FASB ASC No. 205, Discontinued Operations.

Brazil Operations

During the fourth quarter of 2018, the Company reclassified its Brazilian operations from held for sale to held and used in accordance with FASB ASC No. 360, Property, Plant, and Equipment. Therefore, the Brazilian operations are no longer presented as discontinued operations.

China Joint Ventures

In October of 2016, the Company entered into an agreement to sell its joint venture in Wuhu, China: Tower Automotive Company, Ltd (“Wuhu”). The sale agreement provided for the purchase of the Company’s equity in the joint venture for approximately $21 million, net of tax. The Company received proceeds of $4.5 million in the fourth quarter of 2016. On May 9, 2017, the Company completed the sale of its equity interest in Wuhu. During the second quarter of 2017, the Company received total net proceeds of $15.9 million related to the sale, which resulted in a total sales price that was less than the carrying value of the net assets of Wuhu. In addition, the Company incurred certain transaction related costs; therefore, a net loss of  $2.6 million was recorded in the second quarter of 2017.

Also, in October of 2016, the Company entered into an agreement to sell its joint venture in Ningbo, China: Tower DIT Automotive Products Co., Ltd (“Ningbo”). The sale agreement provided for purchase of the Company’s equity in the joint venture for approximately $4 million, net of tax. The Company completed the sale of Ningbo during the second quarter of 2018 and received proceeds of  $4.3 million, net of tax.

Wuhu and Ningbo have been presented as discontinued operations in the Company’s Consolidated Financial Statements, in accordance with FASB ASC No. 205, Discontinued Operations.

73

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

The following table summarizes assets and liabilities held for sale by category (in thousands):

​	December 31, 2018			December 31, 2017
ASSETS	​	​	​	​	​	​
Current assets	​	$	175,774	​	$	222,505
Property, plant, and equipment, net	​	​	239,023	​	​	226,312
Other assets, net	​	​	7,072	​	​	16,125
Goodwill	​	​	17,744	​	​	56,241
Fair value adjustment	​	​	(8,000)	​	​	(3,400)
Total assets held for sale	​	$	431,613	​	$	517,783
LIABILITIES	​	​	​	​	​	​
Short-term debt and current maturities of capital lease obligations	​	$	14,890	​	$	38,383
Accounts payable and accrued liabilities	​	​	142,638	​	​	161,724
Total current liabilities	​	​	157,528	​	​	200,107
Long-term debt, net of current maturities	​	​	—	​	​	—
Other non-current liabilities	​	​	10,354	​	​	10,798
Total non-current liabilities	​	​	10,354	​	​	10,798
Total liabilities held for sale	​	$	167,882	​	$	210,905

Note 6. Debt

Debt consists of the following (in thousands):

​	December 31, 2018			December 31, 2017
Term Loan Credit Facility (net of discount of  $1,653 and $2,288)	​	$	303,521	​	$	356,501
Amended Revolving Credit Facility	​	​	—	​	​	—
Other foreign subsidiary indebtedness	​	​	1,044	​	​	2,352
Debt issue costs	​	​	(5,960)	​	​	(8,098)
Total debt	​	​	298,605	​	​	350,755
Less: Current maturities of debts	​	​	(4,148)	​	​	(4,744)
Total long-term debt	​	$	294,457	​	$	346,011

Future maturities of long-term debt as of December 31, 2018 are as follows (in thousands):

2019	$	4,148
2020	​	3,894
2021	​	3,806
2022	​	3,656
2023	​	3,615
Thereafter	​	285,446
Total	​	304,565
Less: Debt issue costs	​	(5,960)
Total, net of debt issue costs	$	298,605

74

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

Term Loan Credit Facility

On April 23, 2013, the Company entered into a Term Loan and Guaranty Agreement (the “Term Loan Credit Agreement”) by and among Tower Automotive Holdings USA, LLC (the “Term Loan Borrower”), the Company, Tower Automotive Holdings I, LLC (“Term Loan Holdco”), Tower Automotive Holdings II(a), LLC, Tower Automotive Holdings II(b), LLC, the subsidiary guarantors named therein, the Lenders from time to time party thereto and Citibank, N.A., as administrative agent for the Lenders (the credit facility evidenced by the Term Loan Credit Agreement and related documentation, the “Term Loan Credit Facility”).

On January 31, 2014, we amended the Term Loan Credit Agreement by entering into the Second Refinancing Term Loan Amendment and Additional Term Loan Amendment, pursuant to which, among other things, the outstanding term loans under the Term Loan Credit Agreement were refinanced in full, and additional term loans in an aggregate principal amount of approximately $33 million (the “Additional Term Loans”) were disbursed. After giving effect to the disbursement of the Additional Term Loans, there were term loans (the “Term Loans”) in the aggregate principal amount of  $450 million outstanding under the Term Loan Credit Agreement.

On March 7, 2017, the Company amended the Term Loan Credit Agreement by entering into the Third Refinancing Term Loan Amendment and Restatement Agreement (“Third Term Loan Amendment”), pursuant to which, among other things, the outstanding term loans under the Term Loan Credit Agreement were refinanced in full. There were no additional borrowings associated with this refinancing. The aggregate principal amount of  $358.9 million was outstanding under the Term Loan Credit Agreement upon amendment. The maturity date of the Term Loan Credit Facility is March 7, 2024 and the Term Loans bear interest at (i) the Alternate Base Rate plus a margin of 1.75% or (ii) the Adjusted LIBO Rate (calculated by multiplying the applicable LIBOR rate by a statutory reserve rate) plus a margin of 2.75%.

On December 14, 2018, the Company amended the Third Term Loan Amendment by entering into a Consent and Amendment (the “Term Loan Agreement”), pursuant to which, among other things, substantially simultaneously with the consummation of the sale of the Company’s European operations, the Company shall prepay outstanding Loans (as defined in the Term Loan Agreement) in an aggregate principal amount of  $50 million in accordance with the Term Loan Agreement.

The Term Loan Borrower’s obligations under the Term Loan Credit Facility are guaranteed by the Company on an unsecured basis and guaranteed by Term Loan Holdco and certain of the Company’s other direct and indirect domestic subsidiaries on a secured basis (the “Subsidiary Guarantors”). The Term Loan Credit Facility is secured by (i) a first priority security interest in certain assets of the Term Loan Borrower and the Subsidiary Guarantors, other than, inter alia, accounts, chattel paper, inventory, cash deposit accounts, securities accounts, machinery, equipment and real property and all contract rights, and records and proceeds relating to the foregoing and (ii) on a second priority basis to all other assets of the Term Loan Borrower and the Subsidiary Guarantor which have been pledged on a first priority basis to the agent for the benefit of the lenders under the Amended Revolving Credit Facility described below.

The Term Loan Credit Agreement includes customary covenants applicable to certain of the Company’s subsidiaries and includes customary events of default and amounts due there under may be accelerated upon the occurrence of an event of default.

On January 15, 2016, the Company made a $50 million voluntary repayment on its Term Loan Credit Facility. In connection with this prepayment, the Company accelerated the amortization of the original issue discount and the associated debt issue costs by $0.7 million.

On July 27, 2018, the Company made a $50 million voluntary repayment on its Term Loan Credit Facility. In connection with this prepayment, the Company accelerated the amortization of the original issue discount and the associated debt issue costs by $1 million.

75

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

As of December 31, 2018, the outstanding principal balance of the Term Loan Credit Facility was $303.5 million (net of a remaining $1.7 million original issue discount) and the effective interest rate was 5.19% per annum.

Amended Revolving Credit Facility

On September 17, 2014, the Company entered into a Third Amended and Restated Revolving Credit and Guaranty Agreement (“Third Amended Revolving Credit Facility Agreement”), by and among Tower Automotive Holdings USA, LLC, the Company, Tower Automotive Holdings I, LLC, Tower Automotive Holdings II(a), LLC, Tower Automotive Holdings II(b), LLC, the subsidiary guarantors named therein, the financial institutions from time to time party thereto as Lenders, and JPMorgan Chase Bank, N.A. as Issuing Lender, as Swing Line Lender, and as Administrative Agent for the Lenders. The Third Amended Revolving Credit Facility Agreement amended and restated, in its entirety, the Second Amended Revolving Credit Facility Agreement, dated as of June 19, 2013, by and among Tower Automotive Holdings USA, LLC (“the Borrower”), its domestic affiliate and domestic subsidiary guarantors named therein, and the lenders party thereto, and the Agent. The Third Amended Revolving Credit Facility Agreement provided for a cash flow revolving credit facility (the “Amended Revolving Credit Facility”) in the aggregate amount of up to $200 million. The Third Amended Revolving Credit Facility Agreement also provided for the issuance of letters of credit in an aggregate amount not to exceed $50 million, provided that the total amount of credit (inclusive of revolving loans and letters of credit) extended under the Third Amended Revolving Credit Facility Agreement was subject to an overall cap, on any date, of  $200 million.

On March 7, 2017, the Company entered into a Fourth Amended and Restated Revolving Credit and Guaranty Agreement (“Fourth Amended Revolving Credit Facility Agreement”), by and among Tower Automotive Holdings USA, LLC, the Company, Tower Automotive Holdings I, LLC, Tower Automotive Holdings II(a), LLC, the subsidiary guarantors named therein, the financial institutions from time to time party thereto as Lenders, and JPMorgan Chase Bank, N.A. as Issuing Lender, as Swing Line Lender, and as Administrative Agent for the Lenders. The Fourth Amended Revolving Credit Facility Agreement amended and restated, in its entirety, the Third Amended Revolving Credit Facility Agreement, dated as of September 17, 2014, by and among the Borrower, its domestic affiliate and domestic subsidiary guarantors named therein, and the lenders party thereto, and the Agent.

The Fourth Amended Revolving Credit Facility Agreement provides for a cash flow revolving credit facility (the “Amended Revolving Credit Facility”) in the aggregate amount of up to $200 million. The Fourth Amended Revolving Credit Facility Agreement also provides for the issuance of letters of credit in an aggregate amount not to exceed $30 million, provided that the total amount of credit (inclusive of revolving loans and letters of credit) extended under the Fourth Amended Revolving Credit Facility Agreement is subject to an overall cap, on any date, of  $200 million. The Company may request the issuance of Letters of Credit denominated in Dollars or Euros. The expiration date for the Amended Revolving Credit Facility is March 7, 2022.

On December 14, 2018, the Company amended the Fourth Amended Revolving Credit Facility Agreement by entering into a Consent and Amendment (the “Revolver Amendment”), pursuant to which, among other things, substantially simultaneously with the consummation of the sale of the Company’s European operations, the expiration date for the Fourth Amended Revolving Credit Facility Agreement will be extended to March 7, 2023.

Advances under the Amended Revolving Credit Facility bear interest at an alternate base rate plus a base rate margin or LIBOR plus a Eurodollar margin. The applicable margins are determined by the Company’s Total Net Leverage Ratio (as defined in the Fourth Amended Revolving Credit Facility Agreement). As of December 31, 2018, the applicable margins were 1% per annum and 2% per annum for base rate and LIBOR based borrowings, respectively. The Company will pay a commitment fee at a rate equal to 0.50% per annum on the average daily unused total revolving credit commitment.

76

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

The Amended Revolving Credit Facility is guaranteed by the Company on an unsecured basis and is guaranteed by certain of the Company’s other direct and indirect domestic subsidiaries on a secured basis. The Amended Revolving Credit Facility is secured (i) by a first priority security interest in certain assets of the Borrower and the Subsidiary Guarantors, including accounts, inventory, chattel paper, cash, deposit accounts, securities accounts, machinery, equipment and real property and all contract rights, and records and proceeds relating to the foregoing and (ii) on a second priority basis to all other assets of the Borrower and the Subsidiary Guarantors. The Borrower’s and each Subsidiary Guarantor’s pledge of such assets as security for the obligations under the Amended Revolving Credit Facility is evidenced by a Revolving Credit Security Agreement dated as of March 17, 2017, among the Borrower, the guarantors party thereto, and the Agent.

The Fourth Amended Revolving Credit Facility Agreement contains customary covenants applicable to certain of the Company’s subsidiaries, including financial maintenance covenant ratios requiring the Borrower and the Guarantors to maintain a ratio, as of the last day of any fiscal quarter, of  (i) consolidated adjusted EBITDA to consolidated interest charges of not less than 2.75 to 1.00 on a rolling four quarter basis; and (ii) total net debt to consolidated adjusted EBITDA not to exceed 3.50 to 1.00 on a rolling four quarter basis.

As of December 31, 2018, there was $191.8 million of borrowing availability under the Amended Revolving Credit Facility, of which no borrowings were outstanding and $8.2 million letters of credit were outstanding.

Other Foreign Subsidiary Indebtedness

As of December 31, 2018, other foreign subsidiary indebtedness of  $1 million consisted of borrowings in Brazil.

The change in foreign subsidiary indebtedness from December 31, 2017 to December 31, 2018 is explained by the following (in thousands):

​	Brazil
Balance at December 31, 2017	​	$	2,352
Maturities of indebtedness	​	​	(963)
Change in borrowings on credit facilities, net	​	​	—
Foreign exchange impact	​	​	(345)
Balance at December 31, 2018	​	$	1,044

Generally, borrowings of foreign subsidiaries are made under credit agreements with commercial lenders and are used to fund working capital and other operating requirements.

Brazil

As of December 31, 2018, the Company’s Brazilian subsidiary had borrowings of  $1 million (R$4.1 million), which have annual interest rates ranging from 5.50% to 8.70% and maturity dates ranging from November 2019 to July 2022. As of December 31, 2018, the weighted average interest rate on the borrowings in Brazil was 7.28% per annum. The loans are provided through bilateral agreements with two local banks and are secured by certain fixed and current assets. Periodic interest and principal payments are required.

Covenants

As of December 31, 2018, the Company was in compliance with all financial covenants that govern its credit agreements.

77

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

Debt Issue Costs

The Company had debt issuance costs, net of amortization, of  $6 million and $8.1 million as of December 31, 2018 and December 31, 2017, respectively. These amounts are reflected in the Consolidated Balance Sheets as a direct deduction from long-term debt, net of current maturities, rather than as an asset, in accordance with ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs.

The Company incurred interest expense related to the amortization of debt issue costs of  $2.1 million, $1.9 million, and $2.5 million for the years ended December 31, 2018, 2017, and 2016, respectively.

Note 7. Derivative Financial Instruments

The Company’s derivative financial instruments include interest rate and cross currency swaps. The Company does not enter into derivative financial instruments for trading or speculative purposes. On an on-going basis, the Company monitors counterparty credit ratings. The Company considers credit non-performance risk to be low because the Company enters into agreements with commercial institutions that have at least an S&P, or equivalent, investment grade credit rating. On October 17, 2014, the Company entered into a $200 million variable rate to fixed rate interest rate swap for a portion of the Company’s Term Loan and a €157.1 million cross currency swap based on the U.S. dollar/Euro exchange spot rate of $1.2733 which was the prevailing rate at the time of the transaction. The maturity date for both swap instruments was April 16, 2020. During the year ended December 31, 2015, the Company reduced the notional amount of the interest rate swap from $200 million to $186.1 million and increased the notional amount on the cross currency swap from €157.1 million to €178 million.

On March 7, 2017, the Company amended the variable rate to fixed rate interest rate swap, for a portion of the Company’s Term Loan, entered into on October 17, 2014. The U.S. dollar notional amount remained the same at $186.1 million, the fixed interest rate was changed from 5.09% to 5.628% per annum, and the maturity date was extended from April 16, 2020 to March 7, 2024.

Also on March 7, 2017, the Company amended the cross currency swap, entered into on January 23, 2015, into a new cross currency swap, to hedge its net investment in Europe, based on the U.S. dollar/Euro exchange spot rate of  $1.04795. The Euro notional amount remained the same at €178 million, the interest rate was lowered from 3.40% to 2.85%, and the maturity date was extended from April 16, 2020 to March 7, 2024.

Both swaps were amended and restated in conjunction with the March 7, 2017 amendment to the Company’s Term Loan Credit Agreement.

On August 31, 2017, the Company amended certain of its variable rate to fixed rate interest rate swaps, for a portion of the Company’s Term Loan, entered into on March 7, 2017. The U.S. dollar notional amount remained the same at $186.1 million, the fixed interest rate was changed from 5.628% to 5.878% per annum for certain swaps, and the maturity date remained at March 7, 2024. The fair value of the swap will fluctuate with changes in interest rates. This amendment was considered a termination event per FASB ASC No. 815, Derivatives and Hedging; therefore, the balance within AOCI was frozen and is being recognized in results of operations over the remaining term of the hedged transaction. As of December 31, 2018, $5.8 million was recorded in AOCI and $1.1 million was recognized in interest expense during the year ended December 31, 2018.

78

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

At December 31, 2018 (when the U.S. dollar/Euro exchange spot rate was $1.1457) and December 31, 2017 (when the U.S. dollar/Euro exchange spot rate was $1.2009), the following amounts were recorded in the Consolidated Balance Sheets as being receivable from or payable to counterparties under FASB ASC No. 815, Derivatives and Hedging (in thousands):

​	Location	December 31, 2018			December 31, 2017
Net investment hedge	Other non-current liabilities	​	$	19,903	​	$	27,001
Interest rate swap	Other non-current liabilities	​	​	5,034	​	​	8,918

All derivative instruments are recorded at fair value. Effectiveness for net investment and cash flow hedges is initially assessed at the inception of the hedging relationship and on a quarterly basis thereafter. To the extent that derivative instruments are deemed to be effective, changes in the fair value of derivatives are recognized in the Consolidated Balance Sheets as AOCI, and to the extent they are ineffective or were not designated as part of a hedge transaction, they are recorded in the Consolidated Statements of Operations as interest expense, net. The cross currency swap qualifies as a net investment hedge of the Company’s European subsidiaries. The interest rate swap qualifies as a cash flow hedge of the interest payments related to the Company’s Term Loan. Prior to March 7, 2017, the Company had not accounted for the interest rate swap as a cash flow hedge, and all changes in fair value were recognized in the Consolidated Statements of Operations as interest expense, net.

The following table presents deferred gains/(losses) reported in AOCI at December 31, 2018 and December 31, 2017, respectively (in thousands):

​	Deferred gain/(loss) in AOCI Year Ended December 31,
​	2018			2017
Net investment hedge	​	$	21,099	​	$	9,849
Interest rate hedge	​	​	(1,546)	​	​	(7,537)
Total	​	$	19,553	​	$	2,312

Derivative instruments held during the period resulted in the following expense recorded in income during the year ended December 31, 2018 (in thousands):

​	Year Ended December 31, 2018
Interest expense	​	$	19,856
Effect of hedging	​	​	(1,563)

Note 8. Income Taxes

Tax Summary

The Company’s income tax expense, deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect management’s best assessments of estimated current and future taxes to be paid. The Company is subject to income taxes in numerous foreign jurisdictions. Significant judgments and estimates are required in determining the consolidated income tax expense.

79

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

The summary of income/(loss) before provision for income taxes and noncontrolling interests consisted of the following (in thousands):

​	Year Ended December 31,
​	2018			2017			2016
Domestic	​	$	73,274	​	$	72,967	​	$	29,454
Foreign	​	​	5,104	​	​	10,825	​	​	(6,982)
Total	​	$	78,378	​	$	83,792	​	$	22,472

The provision/(benefit) for income taxes consisted of the following (in thousands):

​	Year Ended December 31,
​	2018			2017			2016
Current:	​	​	​	​	​	​	​	​	​
Domestic – Federal	​	$	(461)	​	$	352	​	$	152
Domestic – State	​	​	2,147	​	​	(364)	​	​	925
Foreign	​	​	2,907	​	​	2,399	​	​	1,144
Total	​	​	4,593	​	​	2,387	​	​	2,221
Deferred and other:	​	​	​	​	​	​	​	​	​
Domestic – Federal	​	​	10,784	​	​	40,819	​	​	3,912
Domestic – State	​	​	1,779	​	​	637	​	​	807
Foreign	​	​	(15,897)	​	​	246	​	​	1,828
Total	​	​	(3,334)	​	​	41,702	​	​	6,547
Total provision/(benefit) for income taxes	​	$	1,259	​	$	44,089	​	$	8,768

A reconciliation of income tax expense from continuing operations and the U.S. federal statutory income tax expense were as follows (in thousands):

​	Year Ended December 31,
​	2018			2017			2016
Taxes at U.S. federal statutory rate	​	$	16,459	​	$	29,327	​	$	7,865
State tax expense	​	​	3,112	​	​	88	​	​	1,297
Foreign tax rate differential	​	​	544	​	​	(522)	​	​	316
Valuation allowance	​	​	(11,365)	​	​	(1,380)	​	​	6,502
Permanent differences	​	​	724	​	​	(1,340)	​	​	235
U.S. Tax Reform – Deferred Tax Asset Revaluation	​	​	—	​	​	27,163	​	​	​
Increase/(decrease) in uncertain tax positions	​	​	(393)	​	​	1,236	​	​	779
Tax credits	​	​	(8,191)	​	​	(10,365)	​	​	(7,855)
Other	​	​	369	​	​	(118)	​	​	(371)
Total income tax expense/(benefit)	​	$	1,259	​	$	44,089	​	$	8,768

On December 22, 2017, the Tax Cuts and Jobs Act (the “TCJA”) was enacted into federal law. The Company recorded expense of  $27.2 million during the fourth quarter of 2017, primarily due to the remeasurement of its net deferred tax assets. The TCJA includes significant changes to the U.S. corporate income tax system. Among other items, the TCJA lowered the corporate income tax rate from 35% to 21% and created a new modified territorial tax system exempting foreign profits from U.S. taxation with some exceptions. It also required a one-time deemed repatriation of accumulated foreign earnings for the year

80

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

ended December 31, 2017. To determine the amount of the deemed repatriation and any associated repatriation tax, the Company must determine, in addition to other factors, the amount of post-1986 profits or losses of each foreign subsidiary, as well as the amount of foreign income taxes paid on such profits or losses. The Company has filed its 2017 federal income tax return and has determined that no transition tax inclusion is necessary. Based on current law and guidelines issued by the Internal Revenue Service (“IRS”), the Company does not believe that a measurement-period adjustment is required. In 2018, the FASB issued guidance under ASU 2018-02 that permits companies to reclassify stranded tax effects caused by the TCJA from AOCI to retained earnings. The ASU is not required to be adopted and the Company has elected not to adopt this ASU.

Deferred income taxes are primarily provided for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities. The tax effects of each type of temporary difference and carryforward that give rise to a significant portion of deferred tax assets/(liabilities) are summarized as follows (in thousands):

​	December 31, 2018			December 31, 2017
Deferred tax assets are attributable to:	​	​	​	​	​	​
Net operating loss carryforwards and tax credits	​	$	108,720	​	$	113,865
Non-deductible reserves and other accruals	​	​	26,881	​	​	25,323
Accrued pension and postretirement benefit obligations	​	​	12,652	​	​	13,140
Hedging	​	​	6,165	​	​	8,976
Capitalized leases	​	​	2,375	​	​	2,841
Other	​	​	1,748	​	​	—
Total gross deferred tax assets	​	​	158,541	​	​	164,145
Less: valuation allowances	​	​	(48,712)	​	​	(63,300)
Net deferred tax assets	​	$	109,829	​	$	100,845
Deferred tax liabilities are attributable to:	​	​	​	​	​	​
Long lived assets	​	$	(18,394)	​	$	(6,115)
Prepaid tooling development costs	​	​	(3,110)	​	​	(7,784)
Prepaid Expense	​	​	(5,480)	​	​	(1,619)
Deferred cancellation of indebtedness income	​	​	—	​	​	(2,236)
Other	​	​	(13)	​	​	(1,014)
Total gross deferred tax liabilities	​	​	(26,997)	​	​	(18,768)
Net deferred tax asset/(liability)	​	$	82,832	​	$	82,077

As of December 31, 2018 and 2017, the valuation allowance recorded was $48.7 million and $63.3 million, respectively. The valuation allowance decreased $14.6 million during 2018 related primarily to a valuation allowance release of  $14.4 million due to historical and projected future profitability at the Company’s Brazilian operations. In addition, the Company expensed certain foreign tax credits (“FTCs”) that previously had a valuation allowance recorded against them. The Company continually monitors all available evidence to determine if sufficient future taxable income will be generated to utilize the existing deferred tax assets. The Company also continues to maintain valuation allowances related to certain international jurisdictions and certain state tax credits, which the Company anticipates will expire before they can be utilized.

81

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

The Company has U.S. net operating loss (“NOLs”) carryforwards of  $52 million that expire during 2030 through 2033 and state NOL carryforwards of  $3 million and state credit carryforwards of  $24.4 million that expire during the years 2019 to 2036. The Company also has tax credit carryforwards of  $46.3 million related to federal research, alternative minimum tax (“AMT”), and foreign tax credits.

As of December 31 2018, the Company’s international subsidiaries have NOL carryforwards of  $116.3, of which $87.7 million relate to the Netherlands and begin to expire in 2019. The Company also has $22.1 million of NOL carryforwards in Brazil that do not have an expiration date, but whose utilization is limited to 30% of current year taxable income.

In 2018, the Company received a favorable court ruling regarding the unconstitutionality of calculating Brazilian gross receipt taxes that has the potential to generate significant tax credits for the Company. The Brazilian tax authorities have issued official guidance that significantly limits the potential credits. The Company disagrees with the government’s current guidance and plans to file a claim with the Brazilian government during the first quarter of 2019. Utilization of these tax credits are subject to government approval. Given the significant uncertainty regarding the potential value of these tax credits, the Company has not recorded any benefit during the year ended December 31, 2018 in accordance with FASB ASC 450, Contingencies.

The Company has not made a provision for foreign income or withholding taxes related to investments in foreign subsidiaries that are indefinitely reinvested. Any excess of the amount for financial reporting over the tax basis in these investments is not significant as of December 31, 2018.

Unrecognized Tax Benefits

A reconciliation of the beginning and ending amounts of unrecognized tax benefits are as follows (in thousands):

​	Year Ended December 31,
​	2018			2017			2016
Unrecognized tax benefit – January 1	​	$	4,973	​	$	3,682	​	$	2,880
Increase in prior year tax positions	​	​	—	​	​	247	​	​	—
Decrease in prior year tax positions	​	​	—	​	​	—	​	​	(164)
Increase in current year tax positions	​	​	188	​	​	1,039	​	​	1,000
Audit settlements	​	​	(638)	​	​	—	​	​	—
Lapse in statute of limitations	​	​	—	​	​	—	​	​	(25)
Foreign currency translation	​	​	1	​	​	5	​	​	(9)
Liabilities held for sale	​	​	—	​	​	—	​	​	—
Total	​	$	4,524	​	$	4,973	​	$	3,682

Included in the balance of unrecognized tax benefits at December 31, 2018, 2017, and 2016 are $4.5 million, $5 million, and $3.7 million, respectively, of tax benefits that, if recognized, would affect the effective tax rate. These amounts are primarily associated with uncertainty over qualifying research expenses that generate U.S. Federal research credits and U.S. transfer pricing charges to foreign affiliates. Also included in the balance of unrecognized tax benefits at December 31, 2018, 2017, and 2016 are $4.4 million, $4.9 million, and $3.6 million, respectively, of tax benefits that, if recognized, would result in adjustments to other tax accounts, primarily deferred taxes.

The Company recognizes interest and penalties related to tax benefits as income tax expense. The Company does not believe it has any significant exposure related to interest or penalties.

82

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

During 2017, the Company completed an IRS audit for the 2015 tax year that did not result in any tax adjustments. During 2015, the Company concluded an IRS audit for the tax years 2011 through 2013. As of December 31, 2018, there are no further IRS audits scheduled. The U.S. statute of limitations is still open for tax years 2008, 2009, 2010, and 2013, to the extent of the losses generated in those years. The statute of limitations is closed for the 2011, 2012, and 2014 tax years. The 2016, 2017, and 2018 tax years remain subject to audit. The Company believes appropriate provisions for all outstanding tax issues have been made for all jurisdictions and all open years.

Note 9. Employee Benefit Plans

The Company sponsors a pension and various other postretirement benefit plans for its employees.

Defined Benefit Retirement Plans

The Pension Plan provides benefits for certain current and former U.S. employees. Benefits under the Pension Plan are based on years of service and compensation, as well as other factors. Effective October 1, 2006, the Pension Plan was frozen and the Company ceased accruing any additional benefits. Contributions by the Company are intended to fund benefits that accrued through October 1, 2006.

The Company’s funding policy is to annually contribute amounts to the Pension Plan’s related trust, sufficient to meet the minimum funding requirements of the Employee Retirement Income Security Act of 1974 (“ERISA”) and the Internal Revenue Code of 1986 (the “Code”). The Company expects minimum contribution requirements to the Pension Plan of  $5.9 million during 2019. Benefit payments under the Pension Plan are estimated to be $16.7 million, $16.7 million, $16.7 million, $16.7 million, and $16.1 million for the years ending December 31, 2019, 2020, 2021, 2022, and 2023, respectively, for a total of $82.9 million during that five-year period. Aggregate benefit payments under the Pension Plan for the years 2024 through 2028 are estimated to be $74.4 million.

The following table provides a reconciliation of the changes in the fair value of Pension Plan assets and the change in the projected benefit obligation (in thousands):

​	Year Ended December 31, 2018			Year Ended December 31, 2017
Reconciliation of fair value of Pension Plan assets:	​	​	​	​	​	​
Fair value of assets, beginning of period	​	$	201,522	​	$	186,473
Actual return	​	​	(12,070)	​	​	28,660
Employer contributions	​	​	6,019	​	​	8,600
Expenses paid from Pension Plan assets	​	​	(3,341)	​	​	(3,491)
Benefits paid	​	​	(16,953)	​	​	(18,720)
Fair value of assets, end of period	​	$	175,177	​	$	201,522
Change in projected benefit obligation:	​	​	​	​	​	​
Projected benefit obligation, beginning of period	​	$	249,335	​	$	248,100
Service cost	​	​	17	​	​	19
Interest cost	​	​	7,155	​	​	7,493
Actuarial (gain)/loss	​	​	(18,615)	​	​	12,443
Benefits paid	​	​	(16,953)	​	​	(18,720)
Projected benefit obligation, end of period	​	$	220,939	​	$	249,335
Funded status of the Pension Plan	​	$	(45,762)	​	$	(47,813)

83

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

At December 31, 2018 and 2017, the funded status of the Pension Plan is recorded as other non-current liabilities in the Consolidated Balance Sheets.

At the December 31, 2018 and 2017 measurement dates, the accumulated benefit obligation of the Pension Plan was approximately $221 million and $249 million, respectively.

The following table presents the components of the net periodic pension benefit cost/(income) of the Pension Plan (in thousands):

​	Year Ended December 31,
​	2018			2017			2016
Service cost	​	$	17	​	$	19	​	$	21
Interest cost	​	​	7,155	​	​	7,493	​	​	7,708
Expected return on plan assets	​	​	(10,562)	​	​	(10,329)	​	​	(10,316)
Amortization of prior service credit	​	​	(95)	​	​	(95)	​	​	(95)
Actuarial loss	​	​	5,234	​	​	—	​	​	8,330
Net periodic benefit cost/(income)	​	$	1,749	​	$	(2,912)	​	$	5,648

Pre-tax amounts recognized in other comprehensive income/(loss) for the years ended December 31, 2018, 2017, and 2016 consist of the following (in thousands):

​	Year Ended December 31,
​	2018			2017			2016
Unrecognized gain/(loss)	​	$	(2,124)	​	$	2,398	​	$	2,091
Amortization of prior service credit	​	​	(95)	​	​	(95)	​	​	(95)
Amount recognized	​	$	(2,219)	​	$	2,303	​	$	1,996

The following table summarizes the amounts included in accumulated other comprehensive loss, net of tax, related to the Pension Plan (in thousands):

​	As of December 31,
​	2018			2017
Unrecognized loss	​	$	(24,901)	​	$	(22,777)
Net prior service credit	​	​	1,570	​	​	1,665
Deferred tax impact	​	​	(13,364)	​	​	(13,919)
Accumulated other comprehensive loss	​	$	(36,695)	​	$	(35,031)

The significant assumptions used in measuring the Company’s projected benefit obligation at the December 31, 2018 and 2017 measurement dates are as follows:

​	Year Ended December 31,
​	2018		2017
Discount rate	​	4.09%	​	3.42%
Annual rate of increase in compensation	​	4.5%	​	4.5%

84

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

The assumptions used in determining net periodic benefit cost are shown below:

​	Year Ended December 31,
​	2018		2017		2016
Discount rate	​	3.42%	​	3.84%	​	4.01%
Expected long-term rate of return on plan assets	​	7.4%	​	7.4%	​	7.4%
Annual rate of increase in compensation	​	4.5%	​	4.5%	​	4.5%

The present value of the Company’s projected benefit obligation is calculated annually with the assistance of third party actuaries. The discount rates used in the calculations are established based upon the results of a yield curve analysis, which calculates a yield to maturity that mirrors the timing and amounts of future benefit payments. The Company utilizes a full yield curve approach in the estimation of these components by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows.

The Company invests the assets of the Pension Plan in a diversified portfolio, which consists of an array of asset classes and attempts to maximize returns while minimizing volatility. The allocation of Pension Plan assets at December 31, 2018 and 2017, as well as the Company’s 2018 target allocations, are as follows:

​	Year Ended December 31,
Asset Classes:	2018		2017		2018 Target
Equity securities	​	43%	​	45%	​	50%
Non-equity investments	​	12%	​	12%	​	5%
Fixed income investments	​	36%	​	34%	​	40%
Cash and cash equivalents	​	1%	​	2%	​	—%
Real estate	​	8%	​	7%	​	5%
Total	​	100%	​	100%	​	100%

The expected long-term rate of return on the Pension Plan’s assets assumptions are based upon modeling studies completed with the assistance of the Company’s actuaries and investment consultants. The models take into account inflation, asset class returns, and bond yields for both domestic and foreign markets. These studies, along with the history of returns for the Pension Plan, indicate that expected future returns, weighted by asset allocation, supported an expected long-term asset return assumption of 7.4% for 2018 and 2017.

The Company’s investment goals are to achieve returns in excess of the Pension Plan’s actuarial assumptions, commensurate with the Pension Plan’s risk tolerance; to invest in a prudent manner in accordance with fiduciary requirements of ERISA and to ensure that Pension Plan assets will meet the obligations of the Pension Plan as they come due.

Investment management of the Pension Plan is delegated to a professional investment management firm that must adhere to policy guidelines and objectives. An independent investment consultant is used to measure and report on investment performance, perform asset/liability modeling studies, recommend changes to objectives, guidelines, managers, or asset class structure, and keep the Company informed of current investment trends and issues.

The investment policy, as established by the Company’s Benefit Plans Committee (the “Committee”), allows for effective supervision, monitoring, and evaluating of the investment of the Company’s retirement plan assets. This includes setting forth an investment structure for managing assets and providing guidelines for each portfolio to control the level of overall risk and liquidity. The cash inflows and outflows of the Pension Plan will be deployed in a manner consistent with the above target allocations. If the Committee determines

85

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

cash flows to be insufficient within the strategic allocation target ranges, the Committee shall decide whether to effect transactions to bring the strategic allocation within the threshold ranges. Pension Plan assets do not include equity securities of the Company.

Based on consideration of the Pension Plan’s projected benefit obligation, the Pension Plan’s ability to tolerate risk is in the moderate range. Asset allocation is consistent with this level of risk, with assets being a mix of equities and fixed income. Equity investments are diversified across U.S. and non-U.S. stocks. Minimum and maximum ranges are established for each asset class to control risk and maximize the effectiveness of the Pension Plan’s asset allocation strategy. Asset allocation is reviewed quarterly and rebalanced if necessary. Specific investment guidelines, restrictions, and investment return objectives exist for each asset class and corresponding investment manager.

Pension Plan assets are recorded at fair value. Fixed income and equity securities may each be combined into commingled fund investments, which are valued to reflect the Company’s interest in the fund, based upon the reported year-end net asset value. The estimated fair values of debt securities held are based upon quoted market prices and/or market data for the same or comparable instruments. Because of the nature of these fixed income securities and commingled fixed income funds, some of these instruments are classified as Level 2 or Level 3 investments within the fair value hierarchy, as defined in Note 3. Fair value estimates for publicly-traded equity securities are based upon quoted market prices and/or other market data for the same or comparable instruments. Collective trusts that hold securities directly are stated at fair value of the underlying securities, as determined by the administrator, based on readily determinable market values and as such, are classified as Level 2 or Level 3 investments. Non-equity investments include investments in hedge funds and are valued based upon their year-end reported net asset values. The funded status of the Pension Plan represents the difference between the Company’s projected benefit obligation and fair value of Pension Plan assets and is presented as pension liability in the Consolidated Balance Sheets.

The following table summarizes the Pension Plan assets measured at fair value as of December 31, 2018 and 2017 (in millions). Refer to Note 3 for definitions of Level 1, 2, and 3 financial instruments within the fair value hierarchy and the methods and assumptions used to estimate the fair value of marketable securities.

​

Fair Value Measurements at December 31, 2018

Asset Classes

Total

Quoted Prices in Active Markets for Identical Assets (Level 1)

Significant Observable Inputs (Level 2)

Significant Unobservable Inputs (Level 3)

Cash and cash equivalents

​

$

2

​

$

2

​

$

—

​

$

—

Equity securities

​

​

75

​

​

—

​

​

75

​

​

—

Mutual funds(a)

​

​

21

​

​

12

​

​

9

​

​

—

Corporate bonds

​

​

47

​

​

—

​

​

47

​

​

—

Government bonds

​

​

15

​

​

—

​

​

15

​

​

—

Real estate investment funds

​

​

15

​

​

—

​

​

—

​

​

15

Total

​

$

175

​

$

14

​

$

146

​

$

15

86

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

​

Fair Value Measurements at December 31, 2017

Asset Classes

Total

Quoted Prices in Active Markets for Identical Assets (Level 1)

Significant Observable Inputs (Level 2)

Significant Unobservable Inputs (Level 3)

Cash and cash equivalents

​

$

3

​

$

2

​

$

1

​

$

—

Equity securities

​

​

91

​

​

—

​

​

91

​

​

—

Mutual funds(a)

​

​

26

​

​

16

​

​

10

​

​

—

Corporate bonds

​

​

51

​

​

—

​

​

51

​

​

—

Government bonds

​

​

17

​

​

—

​

​

17

​

​

—

Real estate investment funds

​

​

14

​

​

—

​

​

—

​

​

14

Total

​

$

202

​

$

18

​

$

170

​

$

14

(a)

This category consists of mutual fund investments that are focused on fixed income and international equity securities.

For Pension Plan assets with fair value measurements using significant unobservable inputs (Level 3), reconciliations of beginning and ending balances are as follows (in millions):

​	Real Estate Investment Funds
Balance at December 31, 2016	​	$	14
Return on plan assets held at the reporting date	​	​	—
Purchases	​	​	—
Redemptions	​	​	—
Balance at December 31, 2017	​	$	14
Return on plan assets held at the reporting date	​	​	1
Purchases	​	​	—
Redemptions	​	​	—
Balance at December 31, 2018	​	$	15

Defined Contribution Retirement Plans

The Company sponsors various qualified defined contribution retirement plans. Each plan serves a defined group of employees and has varying levels of Company contributions. The Company’s contributions to certain plans may be required by the terms of the Company’s collective bargaining agreements. During 2018, 2017, and 2016, the Company contributed $6.8 million, $6.2 million, and $5.6 million, respectively, to its defined contribution retirement plans.

Other Postretirement Plans

Life Insurance Plans

As of July 31, 2007, the Company assumed life insurance benefits for certain U.S. retirees and the benefit plans pursuant to which such life insurance benefits are provided. Expected future life insurance benefit payments amount to $0.6 million, $0.6 million, $0.6 million, $1 million, and $1.1 million for the years ending December 31, 2019, 2020, 2021, 2022, and 2023, respectively, for a total of  $3.9 million during the five-year period. Aggregate expected benefit payments for the years 2024 through 2028 are $5.3 million.

87

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

The following table provides a reconciliation of the changes in the benefit obligation and funded status of the Company’s life insurance plans (in thousands):

​	Year Ended December 31, 2018			Year Ended December 31, 2017
Reconciliation of fair value of life insurance plan assets:	​	​	​	​	​	​
Fair value of assets, beginning of period	​	$	—	​	$	—
Employer contributions	​	​	729	​	​	744
Benefits paid	​	​	(729)	​	​	(744)
Fair value of assets, end of period	​	$	—	​	$	—
Change in benefit obligation:	​	​	​	​	​	​
Benefit obligation, beginning of period	​	$	16,892	​	$	16,200
Service cost	​	​	6	​	​	5
Interest cost	​	​	516	​	​	530
Actuarial loss/(gain)	​	​	(2,062)	​	​	901
Benefits paid	​	​	(729)	​	​	(744)
Benefit obligation, end of period	​	$	14,623	​	$	16,892
Funded status of life insurance plans	​	$	(14,623)	​	$	(16,892)

At December 31, 2018 and 2017, the funded status of the Company’s life insurance plans is recorded as accrued liabilities and other non-current liabilities in the Consolidated Balance Sheets.

The following table provides the components of the net periodic benefit cost of the Company’s life insurance plans for the years ended December 31, 2018, 2017, and 2016 (in thousands):

​	Year Ended December 31, 2018			Year Ended December 31, 2017			Year Ended December 31, 2016
Service cost	​	$	6	​	$	5	​	$	5
Interest cost	​	​	516	​	​	530	​	​	539
Amortization of prior service credit	​	​	132	​	​	132	​	​	132
Net periodic benefit cost	​	$	654	​	$	667	​	$	676

Pre-tax amounts recognized in other comprehensive income/(loss) at December 31, 2018, 2017, and 2016 consist of the following (in thousands):

​	Year Ended December 31,
​	2018			2017			2016
Net actuarial gain/(loss)	​	$	2,062	​	$	(901)	​	$	(393)
Amortization of prior service cost	​	​	132	​	​	132	​	​	132
Amount recognized	​	$	2,194	​	$	(769)	​	$	(261)

The following table summarizes the amounts included in accumulated other comprehensive loss, net of tax, related to the Company’s life insurance plans (in thousands):

​	As of December 31,
​	2018			2017
Unrecognized gain/(loss)	​	$	1,388	​	$	(674)
Net prior service credit	​	​	(1,315)	​	​	(1,447)
Deferred tax impact	​	​	(1,563)	​	​	(1,097)
Accumulated other comprehensive loss	​	$	(1,490)	​	$	(3,218)

88

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

The present value of the Company’s postretirement benefit obligation is calculated annually with the assistance of third party actuaries. The discount rates used in the calculations are established based upon the results of a yield curve analysis, which calculates a yield to maturity that mirrors the timing and amounts of future benefit payments. The discount rate used to measure the Company’s postretirement benefit obligation in 2018 and 2017 was 4.14% and 3.47%, respectively. The discount rates used to determine the net periodic benefit cost was 3.45%, 3.91%, and 4.1% in 2018, 2017, and 2016, respectively. The measurement dates of the Company’s post retirement plans are December 31 of each year.

Note 10. Earnings per Share (“EPS”)

Basic earnings/(loss) per share is calculated by dividing the net income/(loss) attributable to Tower International, Inc. by the weighted average number of common shares outstanding.

The share count for diluted earnings/(loss) per share is computed on the basis of the weighted average number of common shares outstanding plus the effects of dilutive common stock equivalents (“CSEs”) outstanding during the period. CSEs, which are securities that may entitle the holder to obtain common stock, include outstanding stock options and restricted stock units. When the average price of the common stock during the period exceeds the exercise price of a stock option, the options are considered potentially dilutive CSEs. When there is a loss from continuing operations, potentially dilutive shares are excluded from the computation of earnings per share, as their effect would be anti-dilutive.

The Company did not exclude any potentially anti-dilutive shares for the years ended December 31, 2018, 2017, and 2016, respectively.

A summary of the information used to compute basic and diluted net income/(loss) per share attributable to Tower International, Inc. is shown below (in thousands — except share and per share amounts):

​	Year Ended December 31,
​	2018			2017			2016
Income from continuing operations	​	$	77,119	​	$	39,703	​	$	13,704
Income/(loss) from discontinued operations, net of tax	​	​	(28,219)	​	​	8,032	​	​	25,576
Net income	​	​	48,900	​	​	47,735	​	​	39,280
Less: Net income attributable to the noncontrolling interests	​	​	—	​	​	110	​	​	701
Net income attributable to Tower International, Inc.	​	$	48,900	​	$	47,625	​	$	38,579
Basic income/(loss) per share:	​	​	​	​	​	​	​	​	​
Continuing operations	​	$	3.75	​	$	1.93	​	$	0.62
Discontinued operations	​	​	(1.38)	​	​	0.39	​	​	1.23
Net income attributable to Tower International, Inc.	​	​	2.37	​	​	2.32	​	​	1.85
Basic weighted average shares outstanding	​	​	20,591,674	​	​	20,498,668	​	​	20,864,321
Diluted income/(loss) per share:	​	​	​	​	​	​	​	​	​
Continuing operations	​	$	3.67	​	$	1.90	​	$	0.61
Discontinued operations	​	​	(1.34)	​	​	0.39	​	​	1.21
Net income attributable to Tower International, Inc.	​	​	2.33	​	​	2.29	​	​	1.82
Diluted weighted average shares outstanding	​	​	20,996,068	​	​	20,828,888	​	​	21,222,183

89

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

The following table presents information regarding our quarterly dividends per common share.

Declaration Date	Cash Amount			Record Date	Payment Date
2018	​	​	​	​	​
October 18, 2018	​	$	0.13	November 8, 2018​	December 7, 2018​
July 17, 2018	​	​	0.12	August 9, 2018​	September 7, 2018​
April 19, 2018	​	​	0.12	May 10, 2018​	June 8, 2018​
January 26, 2018	​	​	0.12	February 9, 2018​	February 28, 2018​
2017	​	​	​	​	​
October 20, 2017	​	$	0.12	November 10, 2017​	December 8, 2017​
July 21, 2017	​	​	0.11	August 10, 2017​	September 8, 2017​
April 21, 2017	​	​	0.11	May 10, 2017​	June 9, 2017​
January 27, 2017	​	​	0.11	February 10, 2017​	February 28, 2017​
2016	​	​	​	​	​
October 21, 2016	​	$	0.11	November 10, 2016​	December 9, 2016​
July 22, 2016	​	​	0.10	August 10, 2016​	September 9, 2016​
April 22, 2016	​	​	0.10	May 10, 2016​	June 10, 2016​
January 29, 2016	​	​	0.10	February 10, 2016​	February 29, 2016​

Note 11. Share-Based and Long-Term Compensation

Share-Based Compensation

2010 Equity Incentive Plan (“the Plan”)

The Company adopted an equity incentive plan in connection with its 2010 initial public offering that allows for the grant of stock options, restricted stock awards, other equity-based awards, and certain cash-based awards to be made pursuant to the Plan. The eligibility requirements and terms governing the allocation of any common stock and the receipt of other consideration under the Plan are determined by the Board of Directors and/or its Compensation Committee.

On April 25, 2014, the Plan was amended and restated and further amended on December 1, 2016. The number of shares of common stock available for issuance pursuant to new awards under the 2010 Equity Incentive Plan was reduced to 850,000 shares. At December 31, 2018, 585,287 shares were available for future grants of options and other types of awards under the 2010 Equity Incentive Plan. Forfeited shares, in addition to certain other shares, as defined by the Plan, may be re-issued under the Plan up to the maximum amount to be issued.

90

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

The following table summarizes the Company’s award activity during the years ended December 31, 2018, 2017, and 2016:

​	Options					Restricted Stock Units
Outstanding at:	Shares		Weighted Average Exercise Price			Shares		Weighted Average Grant Date Fair Value
December 31, 2015	​	500,138	​	$	12.17	​	187,498	​	$	23.59
Granted	​	—	​	​	—	​	105,468	​	​	23.26
Options exercised or RSUs vested	​	(25,670)	​	​	11.90	​	(77,912)	​	​	19.92
Forfeited	​	—	​	​	—	​	(1,532)	​	​	25.26
December 31, 2016	​	474,468	​	$	12.18	​	213,522	​	$	24.77
Granted	​	—	​	​	—	​	106,312	​	​	28.09
Options exercised or RSUs vested	​	(108,791)	​	​	12.07	​	(101,478)	​	​	24.99
Forfeited	​	—	​	​	—	​	(5,335)	​	​	25.47
December 31, 2017	​	365,677	​	$	12.22	​	213,022	​	$	26.30
Granted	​	—	​	​	—	​	242,531	​	​	26.35
Options exercised or RSUs vested	​	(20,178)	​	​	12.45	​	(62,225)	​	​	26.32
Forfeited	​	(4,155)	​	​	12.04	​	(5,281)	​	​	26.21
December 31, 2018	​	341,344	​	$	12.21	​	388,047	​	$	26.33

Stock options

The exercise price of each stock option equals the market price of the Company’s common stock on its grant date. Compensation expense is recorded at the grant date fair value, less an estimated forfeiture amount, and is recognized on a straight-line basis over the applicable vesting periods. The Company’s stock options generally vest over three years, with a maximum term of ten years.

The Company calculates the weighted average grant date fair value of each option granted using a Black-Scholes valuation model. There was zero option expense in the years ended December 31, 2018, 2017 and 2016. As of December 31, 2015, the Company had recognized all of the compensation expense associated with these stock options.

As of December 31, 2018, the Company had an aggregate of 341,344 stock options that had been granted, but had not yet been exercised. As of December 31, 2018, the remaining average contractual life for these options is approximately three years. During the year ended December 31, 2018, 20,178 options were exercised, which had an aggregate intrinsic value of  $0.4 million. As of December 31, 2018, 341,344 stock options were exercisable, which had an aggregate intrinsic value of  $4 million. During the year ended December 31, 2018, no stock options were granted and 4,155 stock options were forfeited or expired.

Restricted stock units (“RSUs”)

The grant date fair value of each RSU equals the market price of the Company’s common stock on its date of grant. Compensation expense is recorded at the grant date fair value, less an estimated forfeiture amount, and is recognized on a straight-line basis over the applicable vesting periods.

During the years ended December 31, 2018, 2017, and 2016, the Company recognized an expense of $3.4 million, $2.2 million, and $2.5 million, respectively, relating to all of the RSUs granted. As of December 31, 2018, the Company had $4.9 million of unrecognized compensation expense associated with these RSUs, which will be amortized on a straight-line basis over the next 16 months, on a weighted average basis. The Company’s RSUs generally vest over a three year period.

91

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

As of December 31, 2018, the Company had an aggregate of 388,047 RSUs that have been granted, but have not yet vested. During the year ended December 31, 2018, 242,531 RSUs were granted and 5,281 RSUs were forfeited or expired.

During 2018, a total of 62,225 RSUs vested, resulting in the issuance of 62,225 shares at a fair value of $1.6 million. This total was reduced by shares repurchased to provide payment for certain individuals’ minimum statutory withholding tax. The Company paid $0.5 million to acquire 18,064 vested shares to cover the minimum statutory withholding taxes. After offsets for withholding taxes, a net total of 44,161 shares of common stock were issued.

During 2017, a total of 101,478 RSUs vested, resulting in the issuance of 101,478 shares at a fair value of $2.8 million. This total was reduced by shares repurchased to provide payment for certain individuals’ minimum statutory withholding tax. The Company paid $0.8 million to acquire 27,003 vested shares to cover the minimum statutory withholding taxes. After offsets for withholding taxes, a net total of 74,475 shares of common stock were issued.

During 2016, a total of 77,912 RSUs vested, resulting in the issuance of 77,912 shares at a fair value of $1.8 million. This total was reduced by shares repurchased to provide payment for certain individuals’ minimum statutory withholding tax. The Company paid $0.6 million to acquire 26,413 vested shares to cover the minimum statutory withholding taxes. After offsets for withholding taxes, a net total of 51,499 shares of common stock were issued.

The RSUs held on and after November 10, 2015 earn dividend equivalents at the same rate as dividends paid on common stock. Dividend equivalents are subject to the same vesting conditions as the underlying RSUs and, therefore, are not considered participating securities.

Long-Term Compensation

Amended and Restated CEO Employment Agreement

On July 28, 2014, Mark M. Malcolm, the Company’s former President and Chief Executive Officer, entered into an amended and restated employment agreement (the “Agreement”), by which Mr. Malcolm’s employment was extended through December 31, 2016 (the “Retirement Date”). Mr. Malcolm retired from the Company on the Retirement Date. The Agreement provided for a $3 million transition bonus, for the successful delivery to Tower’s Board of Directors of a comprehensive chief executive officer succession and transition plan, and a $3 million retention bonus. These bonus awards were paid in cash, in the amount of $6.3 million, on July 14, 2017, and fall under the guidance of FASB ASC No. 450, Contingencies. As of December 31, 2017, the Company had no liability remaining relating to these awards.

During the years ended December 31, 2018, 2017, and 2016, the Company recorded expense of zero, $0.3 million, and $1.3 million, respectively, related to these awards.

Performance Award Agreements

Under the provisions of the 2010 Equity Incentive Plan, the Company grants certain awards annually in March pursuant to Performance Award Agreements to approximately 80 executives. These awards are designed to provide the executives with an incentive to participate in the long-term success and growth of the Company. The Performance Award Agreements provide for cash-based awards that vest upon payment. Pursuant to meeting the performance conditions set forth in the Performance Award Agreements, each award will be paid three years after it is granted. These awards are also subject to payment upon a change in control or termination of employment, if certain criteria are met. These awards represent unfunded, unsecured obligations of the Company.

92

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

2015 Awards

One half of the awards granted in 2015 were based upon the Company’s Adjusted EPS Growth Rate, which is defined as the Company’s cumulative Adjusted EPS for the performance period of the awards, stated in terms of a percentage growth rate. The Company’s EPS was adjusted to exclude the effect of unusual, and/​or nonrecurring items and then was divided by the number of fiscal years in the specified period, stated in terms of a percentage growth rate. The other half of the awards are based upon the Company’s percentile ranking of total shareholder return, compared to a peer group of companies, for the performance period.

Pursuant to meeting the performance conditions set forth in the Performance Award Agreements, the awards granted in 2015 were paid in the first quarter of 2018.

2016 and 2017 Awards

One half of the awards granted in 2016 and 2017 will be based upon the Company’s Adjusted EBIT Growth Rate, which is defined as the Company’s cumulative Adjusted EBIT (earnings before interest and taxes) for the performance period of the awards, stated in terms of a percentage growth rate. The Company’s EBIT will be adjusted to exclude the effect of extraordinary, unusual, and/or nonrecurring items and then will be divided by the number of fiscal years in the specified period, stated in terms of a percentage growth rate. The other half of the awards will be based upon the Company’s percentile ranking of total shareholder return, compared to a peer group of companies, for the performance period.

2018 Awards

One half of the awards granted in 2018 will be based upon the Company’s Adjusted EBITDA Growth Rate, which is defined as the Company’s cumulative Adjusted EBITDA for the performance period of the awards, stated in terms of a percentage growth rate. The other half of the awards will be based upon the Company’s percentile ranking of total shareholder return, compared to a peer group of companies, for the performance period.

The performance period of the awards granted in 2016 is January 1, 2016 through December 31, 2018. The performance period of the awards granted in 2017 is January 1, 2017 through December 31, 2019. The performance period of the awards granted in 2018 is January 1, 2018 through December 31, 2020.

During the years ended December 31, 2018, 2017, and 2016, the Company recorded expense related to these awards of  $4.4 million, $2.3 million, and $7.4 million, respectively. At December 31, 2018, the Company had a liability of  $6.4 million related to these awards. $2.9 million of this liability is payable in March of 2019 and is presented as other current liabilities in the Consolidated Balance Sheets, while the remaining $3.5 million of this liability is presented as other non-current liabilities in the Consolidated Balance Sheets.

Note 12. Related Party Transactions

During the year ended December 31, 2017, the Company sold its joint venture in Wuhu, China. Prior to the sale, the Company sold certain products from its Wuhu operations to its joint venture partner, Chery. The sales of these products to Chery were $14.8 million and $70.6 million for the years ended December 31, 2017 and 2016, respectively. The Company’s accounts receivable with Chery at December 31, 2017 was zero.

Note 13. Segment Information

The Company defines its operating segments as components of its business where separate financial information is available. The Company’s operating segments are routinely evaluated by management. The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer.

The Company produces engineered structural metal components and assemblies primarily serving the global automotive industry. The Company’s operations have similar economic characteristics and share fundamental characteristics, including the nature of the products, production processes, margins, customers,

93

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

and distribution channels. The Company’s products include body structures stampings, chassis structures (including frames), and complex welded assemblies for small and large cars, crossovers, pickups, and SUVs. The Company is comprised of two operating segments: North America and Brazil. These operating segments are aggregated into one reportable segment.

The following is a summary of select data for the Company’s reportable segment (in thousands):

Year Ended December 31, 2018:	​	​
Revenues	$	1,571,853
Net Income	​	48,900
Capital Expenditures(a)	​	83,141
Total assets(b)	​	1,170,392
Year Ended December 31, 2017:	​	​
Revenues	$	1,382,474
Net Income	​	47,625
Capital Expenditures(a)	​	67,240
Total assets(b)	​	1,260,873
Year Ended December 31, 2016:	​	​
Revenues	$	1,319,046
Net Income	​	38,579
Capital Expenditures(a)	​	72,194

(a)

Capital expenditures represent cash disbursed for purchases of property, plant, and equipment, as presented in the accompanying Consolidated Statements of Cash Flows.

(b)

Total assets as of December 31, 2018 and 2017 include assets held for sale.

Inter-segment sales are not significant for any period presented.

The following is a summary of revenues and long-lived assets by geographic location (in thousands):

​	Year Ended and End of Year December 31,
​	2018						2017						2016
​	Revenues			Long-Lived Assets			Revenues			Long-Lived Assets			Revenues			Long-Lived Assets
U.S.	​	$	1,470,772	​	$	332,086	​	$	1,273,442	​	$	305,127	​	$	1,222,120	​	$	276,892
Mexico	​	​	48,099	​	​	6,785	​	​	49,755	​	​	4,110	​	​	52,203	​	​	4,223
Brazil	​	​	52,982	​	​	9,439	​	​	59,277	​	​	14,239	​	​	44,723	​	​	15,340
Intercompany eliminations	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—
Total	​	$	1,571,853	​	$	348,310	​	$	1,382,474	​	$	323,476	​	$	1,319,046	​	$	296,455

Revenues are attributed to geographic locations based on the location of specific production. Long-lived assets consist of net property, plant, and equipment and company-owned tooling.

94

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

The following is a summary of the approximate composition of the Company’s revenues, by product category (in thousands):

​	Year Ended December 31,
​	2018		2017		2016
Body structures and assemblies	​	47%	​	44%	​	46%
Chassis, lower vehicle structures, and suspension components	​	36%	​	34%	​	30%
Complex body-in-white assemblies	​	17%	​	22%	​	24%
Total	​	100%	​	100%	​	100%

The Company sells its products directly to automotive manufacturers. The following table presents a summary of customers that accounted for 10% or more of consolidated revenues in any of the three years ended December 31:

​	2018		2017		2016
Ford	​	47%	​	51%	​	47%
Fiat – Chrysler	​	22%	​	18%	​	21%
Nissan	​	12%	​	15%	​	12%

All customers that accounted for 10% or more of consolidated revenues from the table above are customers in the automotive industry; therefore, the Company is subject to a concentration of credit risk.

Note 14. Commitments and Contingencies

Leases

The Company leases office space, manufacturing space, and certain equipment under noncancellable lease agreements, which require the Company to pay maintenance, insurance, taxes, and other expenses, in addition to rental payments. The Company has entered into leasing commitments with lease terms expiring between the years 2019 and 2035. The Company has options to extend the terms of certain leases in future periods. The properties covered under these leases include manufacturing and office equipment and facilities. Rent expense for all operating leases totaled $30 million, $18.6 million, and $16.8 million during the years ended December 31, 2018, 2017, and 2016, respectively.

On September 21, 2018, the Company completed the sale of one of its manufacturing facilities for $14.9 million. Simultaneously, the Company entered into a lease for the same facility for continued use in the Company’s ongoing operations. The lease agreement is for a term of approximately 15 years. The Company recorded a deferred gain of  $5.4 million, as the sale price was in excess of the Company’s net book value, which will be recognized over the lease term.

Future minimum operating lease payments at December 31, 2018 are as follows (in thousands):

Year	Operating Leases
2019	​	$	42,261
2020	​	​	49,615
2021	​	​	47,385
2022	​	​	45,831
2023	​	​	43,139
Thereafter	​	​	111,947
Total future lease payments	​	$	340,178

95

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

Purchase Commitments

As of December 31, 2018, the Company was obligated under executory purchase orders for approximately $54.7 million of tooling, $51.4 million of capital expenditures, and $6.8 million of other expenditures.

Environmental Matters

The Company owns properties which have been affected by environmental releases. The Company is actively involved in investigation and/or remediation at several of these locations.

Accruals for environmental matters are recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated. The established liability for environmental matters is based upon management’s best estimates, on an undiscounted basis, of expected investigation/​remediation costs related to environmental contamination. It is possible that actual costs associated with these matters will exceed the environmental reserves established by the Company. Inherent uncertainties exist in the estimates, primarily due to unknown environmental conditions, changing governmental regulations, and legal standards regarding liability and evolving technologies for handling site remediation and restoration. At December 31, 2018 and 2017, the Company had approximately $1.3 million and $1.3 million, respectively, accrued for environmental matters.

Contingent Matters

The Company will establish an accrual for matters in which losses are probable and can be reasonably estimated. These types of matters may involve additional claims that, if granted, could require the Company to pay penalties or make other expenditures in amounts that will not be estimable at the time of discovery of the matter. In these cases, a liability will be recorded at the low end of the range if no amount within the range is a better estimate in accordance with FASB ASC No. 450, Accounting for Contingencies.

Litigation

The Company is subject to various legal actions and claims incidental to its business, including potential lawsuits with customers or suppliers. Litigation is subject to many uncertainties and the outcome of individual litigated matters is not probable or estimable. After discussions with counsel litigating these matters, it is the opinion of management that the outcome of such matters will not have a material impact on the Company’s financial position, results of operations, or cash flows.

Note 15. Change in Working Capital and Other Operating Items

The following table summarizes the sources/(uses) of cash provided by changes in working capital and other operating items for continuing operations (in thousands):

​	Year Ended December 31,
​	2018			2017			2016
Accounts receivable	​	$	10,830	​	$	(21,357)	​	$	32,950
Inventories	​	​	(11,939)	​	​	(3,808)	​	​	(4,067)
Prepaid tooling and other current assets	​	​	16,435	​	​	20,729	​	​	(17,868)
Accounts payable and accrued liabilities	​	​	(23,960)	​	​	24,780	​	​	14,590
Other assets and liabilities	​	​	(20,862)	​	​	(15,936)	​	​	(11,997)
Change in working capital and other operating items	​	$	(29,496)	​	$	4,408	​	$	13,608

96

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

Note 16. Quarterly Financial Data (Unaudited)

The following table summarizes select quarterly financial data (in thousands):

Quarter

Net Sales

Gross Profit

Net Income/(Loss)

Net Income/(Loss) Attributable to Tower International, Inc.

Diluted Earnings/(Loss) per Share

2018

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

1st

​

$

407,233

​

$

48,184

​

$

17,300

​

$

17,300

​

$

0.83

2nd

​

​

395,929

​

​

50,822

​

​

22,376

​

​

22,376

​

​

1.07

3rd

​

​

391,421

​

​

52,166

​

​

22,580

​

​

22,580

​

​

1.07

4th(a)

​

​

377,270

​

​

42,726

​

​

(13,356)

​

​

(13,356)

​

​

(0.64)

Full Year

​

$

1,571,853

​

$

193,898

​

$

48,900

​

$

48,900

​

​

2.33

2017

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

1st

​

$

352,450

​

$

42,715

​

$

17,413

​

$

17,345

​

$

0.83

2nd

​

​

344,821

​

​

48,130

​

​

19,258

​

​

19,216

​

​

0.92

3rd(b)

​

​

330,397

​

​

47,179

​

​

14,931

​

​

14,931

​

​

0.72

4th(c)

​

​

354,806

​

​

51,139

​

​

(3,867)

​

​

(3,867)

​

​

(0.19)

Full Year

​

$

1,382,474

​

$

189,163

​

$

47,735

​

$

47,625

​

​

2.29

(a)

During the fourth quarter of 2018, net income included a fair value impairment charge in discontinued operations of  $44 million and a deferred tax benefit of  $14.4 million to release the valuation allowance in Brazil.

(b)

During the third quarter of 2017, net income included a $2.4 million deferred tax expense to establish a valuation allowance on certain European deferred tax assets.

(c)

During the fourth quarter of 2017, net income included a deferred tax expense of  $27.2 million related to the revaluation of U.S. deferred tax assets due to a reduction in the federal income tax rate as a result of U.S. Tax Reform.

97

Item 9.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A.   Controls and Procedures

Evaluation of Disclosure Controls and Procedures

James C. Gouin, our Chief Executive Officer (“CEO”), and Jeffrey L. Kersten, our Chief Financial Officer (“CFO”), have performed an evaluation of our disclosure controls and procedures, as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of December 31, 2018 and each has concluded that such disclosure controls and procedures were effective at a reasonable assurance level to ensure that information required to be disclosed in our periodic reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission’s rules and forms and such information is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow for timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the U.S.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or because the degree of compliance with policies or procedures may deteriorate.

Under the supervision and with the participation of our management, including our CEO and CFO, we conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2018. The assessment was based on criteria established in the framework “Internal Control — Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2018.

The effectiveness of our internal control over financial reporting as of December 31, 2018 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which follows.

98

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of
Tower International, Inc.
Livonia, MI

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Tower International, Inc. and subsidiaries (the “Company”) as of December 31, 2018, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements and financial statement schedule as of and for the year ended December 31, 2018, of the Company and our report dated February 27, 2019, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ DELOITTE & TOUCHE LLP

Detroit, MI
February 27, 2019

99

Changes in Internal Control over Financial Reporting

There has not been any change in our internal control over financial reporting during the quarter ended December 31, 2018, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B.   Other Information

None

100

PART III

Item 10.   Directors, Executive Officers, and Corporate Governance

The information required by Item 10 regarding executive officers and directors is incorporated by reference from the information under the captions “Directors and Executive Officers” and “The Board of Directors” in the Company’s definitive Proxy Statement for the 2019 Annual Meeting of the Stockholders (the “Proxy Statement”), or will be filed by amendment. The information required by Item 10 regarding the audit committee and audit committee financial expert disclosure is incorporated by reference from the information under the caption “The Board of Directors — Committees of the Board of Directors” and “Audit Committee Matters” in the Proxy Statement, or will be filed by amendment.

Disclosure of delinquent Section 16 filers required by Item 10, if any, pursuant to Item 405 of Regulation S-K is incorporated by reference from the information under the caption “Additional Information — Section 16(a) Beneficial Ownership Reporting Compliance” in the Proxy Statement, or will be filed by amendment.

The Company has adopted a Code of Business Conduct and Ethics that applies to, among other persons, our principal executive officer, principal financial officer, principal accounting officer, and other persons performing similar functions. A copy of our Code of Business Conduct and Ethics is available on our website, www.towerinternational.com, by following links to “Investor Relations,” “Corporate Governance,” “Governance Documents” and “Code of Business Conduct” or upon written request to the Company. In the event that we make any amendments to, or grant any waiver including an implicit waiver from, a provision of the Code of Conduct and Ethics that applies to our principal executive officer, principal financial officer or principal accounting officer that requires disclosure under applicable SEC rules, we intend to disclose the amendment or waiver and the reasons therefore on our website within four business days of the date of the amendment or waiver.

Item 11.   Executive Compensation

The information required by Item 11 is incorporated by reference from the information under the captions “Compensation Discussion and Analysis,” and “Compensation Tables” in the Proxy Statement, or will be filed by amendment.

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by Item 12 relating to security ownership is incorporated by reference from the information under the caption “Security Ownership” in the Proxy Statement, or will be filed by amendment.

Equity Compensation Plan Information — The following table provides information about our equity compensation plans as of December 31, 2018.

Plan Category	Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights		Weighted-Average Exercise Price of Outstanding Options, Warrants, and Rights			Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans
Equity compensation plans approved by security holders	​	729,391	​	$	19.72	​	585,287
Equity compensation plans not approved by security holders	​	N/A	​	​	N/A	​	N/A
Total	​	729,391	​	$	19.72	​	585,287

101

Item 13.   Certain Relationships and Related Transactions, and Director Independence

The information required by Item 13 regarding transactions with related persons is incorporated by reference from the information under the caption “Certain Relationships and Related Party Transactions” in the Proxy Statement, or will be filed by amendment.

The information required by Item 13 regarding director independence is incorporated by reference from the information under the caption “The Board of Directors” in the Proxy Statement, or will be filed by amendment.

Item 14.   Principal Accountant Fees and Services

The information required by Item 14 is incorporated by reference from the information under the caption “The Board of Directors — Audit Committee Matters” in the Proxy Statement, or will be filed by amendment.

102

PART IV

Item 15.   Exhibits and Financial Statement Schedules

(a)

List of documents filed as part of this Annual Report or incorporated herein by reference:

(1)

Financial Statements: The following financial statements of the Registrant as set forth under Part II, Item 8 of this report on Form 10-K on the pages indicated:

Audited Financial Statements for the Three Years Ended December 31, 2018:

​	Page
Report of Independent Registered Public Accounting Firm	​	51
Consolidated Balance Sheets as of December 31, 2018 and 2017	​	52
Consolidated Statements of Operations for the Years Ended December 31, 2018, 2017, and 2016	​	53
Consolidated Statements of Comprehensive Income/(Loss) for the Years Ended December 31, 2018, 2017, and 2016	​	54
Consolidated Statements of Cash Flows for the Years Ended December 31, 2018, 2017, and 2016	​	55
Consolidated Statements of Equity/(Deficit) for the Years Ended December 31, 2018, 2017, and 2016	​	56
Notes to Consolidated Financial Statements	​	57

(2)

Financial Statement Schedules:

(a)

Schedule II:

SCHEDULE II

Valuation and Qualifying Accounts for the years ended December 31, 2018, 2017, and 2016 (in thousands)

Column A

Column B

Column C

Column D

Column E

​

Balance at Beginning of Year

Additions

Deductions

Balance at End of Year

Description

Charged to Costs and Expenses

Charged to Other Accounts

Year Ended December 31, 2018

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Allowance for doubtful accounts

​

$

556

​

$

278

​

$

—

​

$

(11)(a)

​

$

823

Deferred tax asset valuation allowance

​

​

63,300

​

​

(11,367)

​

​

(3,221)

​

​

—

​

​

48,712

Year Ended December 31, 2017

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Allowance for doubtful accounts

​

$

602

​

$

(29)

​

$

—

​

$

(17)(a)

​

$

556

Deferred tax asset valuation allowance

​

​

58,985

​

​

(1,380)

​

​

5,695

​

​

—

​

​

63,300

Year Ended December 31, 2016

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Allowance for doubtful accounts

​

$

437

​

$

181

​

$

—

​

$

(16)(a)

​

$

602

Deferred tax asset valuation allowance

​

​

46,289

​

​

6,502

​

​

6,194

​

​

—

​

​

58,985

(a)

Write off of uncollectible accounts and collections of past due accounts.

All other schedules are omitted because they are inapplicable or not required or the information is included in the Company’s Consolidated Financial Statements or the notes thereto.

103

(3)

Exhibits

3.1	Form of Certificate of Incorporation of the Registrant (filed as Exhibit 3.1 to Amendment No. 4 to the Registrant’s Registration Statement on Form S-1 (No. 333-165200) and incorporated herein by reference).
3.2	Form of By-Laws of the Registrant (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed January 8, 2014 and incorporated herein by reference).
4.1	See Exhibits 3.1 and 3.2 for provisions of the Certificate of Incorporation and Bylaws of the Registrant defining the rights of holders of common stock of the Registrant.
4.2	Specimen stock certificate (filed as Exhibit 4.2 to Amendment No. 3 to the Registrant’s Registration Statement on Form S-1 (No. 333-165200) and incorporated herein by reference).
10.1	Amended and Restated Intercreditor Agreement, dated as of August 24, 2010, among JPMorgan Chase Bank, N.A., as representative with respect to certain agreements identified therein, Wilmington Trust FSB, as representative with respect to the notes agreement identified therein, each additional representative from time to time party thereto, Tower Automotive Holdings USA, LLC, the other loan parties party thereto and Tower Automotive, LLC (filed as Exhibit 10.9 to Amendment No. 6 to the Registrant’s Registration Statement on Form S-1 (No. 333-165200) and incorporated herein by reference).
10.2	Term Intercreditor Agreement, dated as of August 24, 2010, among JPMorgan Chase Bank, N.A., as synthetic letter of credit facility agent, Wilmington Trust FSB, as notes collateral agent, each additional term agent from time to time party thereto, each grantor from time to time party thereto and Tower Automotive, LLC (filed as Exhibit 10.10 to Amendment No. 6 to the Registrant’s Registration Statement on Form S-1 (No. 333-165200) and incorporated herein by reference).
10.3†	Registrant’s Compensation Agreement with Paul Radkoski (filed as Exhibit 10.31 to the Registrant’s Registration Statement on Form S-1 as originally filed on March 4, 2010 (No. 333-165200) and incorporated herein by reference).
10.4	Form of Indemnification Agreement (filed as Exhibit 10.24 to Amendment No. 8 to the Registrant’s Registration Statement on Form S-1 (No. 333-165200) and incorporated herein by reference).
10.5†	Form of 2010 Equity Incentive Plan (filed as Exhibit 10.28 to Amendment No. 9 to the Registrant’s Registration Statement on Form S-1 (No. 333-165200) and incorporated herein by reference).
10.6†	Form of Restricted Stock Award Agreement (filed as Exhibit 10.29 to Amendment No. 8 to the Registrant’s Registration Statement on Form S-1 (No. 333-165200) and incorporated herein by reference).
10.7†	Form of Restricted Stock Unit Award Agreement (filed as Exhibit 10.30 to Amendment No. 8 to the Registrant’s Registration Statement on Form S-1 (No. 333-165200) and incorporated herein by reference).
10.8†	Form of Restricted Stock Unit Award Agreement (filed as Exhibit 10.30.1 to Amendment No. 8 to the Registrant’s Registration Statement on Form S-1 (No. 333-165200) and incorporated herein by reference).
10.9†	Form of Nonqualified Stock Option Grant Agreement (filed as Exhibit 10.31 to Amendment No. 8 to the Registrant’s Registration Statement on Form S-1 (No. 333-165200) and incorporated herein by reference).

104

10.10†	Form of Nonqualified Stock Option Grant Agreement (filed as Exhibit 10.31.1 to Amendment No. 8 to the Registrant’s Registration Statement on Form S-1 (No. 333-165200) and incorporated herein by reference).
10.11†	Form of Incentive Stock Option Grant Agreement (filed as Exhibit 10.32 to Amendment No. 8 to the Registrant’s Registration Statement on Form S-1 (No. 333-165200) and incorporated herein by reference).
10.12†	Form of Award Letter, Tower Automotive, LLC 2010 Long-Term Incentive Program (filed as Exhibit 10.35 to Amendment No. 3 to the Registrant’s Registration Statement on Form S-1 (No. 333-165200) and incorporated herein by reference).
10.13†	Form of Award Letter, Tower Automotive, LLC Special Incentive Program (filed as Exhibit 10.36 to Amendment No. 3 to the Registrant’s Registration Statement on Form S-1 (No. 333-165200) and incorporated herein by reference).
10.14††	Lease Agreement, dated as of April 10, 2002, by and among Module (DE) Limited Partnership, Tower Automotive Products Company, Inc. and Tower Automotive Tool LLC (filed as Exhibit 10.37 to Amendment No. 2 to the Registrant’s Registration Statement on Form S-1 (No. 333-165200) and incorporated herein by reference).
10.15	Amendment No. 1 to Lease Agreement, dated as of November 15, 2002, by and among Module (DE) Limited Partnership, Tower Automotive Products Company, Inc. and Tower Automotive Tool LLC (filed as Exhibit 10.38 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 (No. 333-165200) and incorporated herein by reference).
10.16††	Amendment No. 2 to Lease Agreement, dated as of July 31, 2007, by and among Module (DE) Limited Partnership, Tower Automotive Products Company, Inc. and Tower Automotive Tool LLC (filed as Exhibit 10.39 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 (No. 333-165200) and incorporated herein by reference).
10.17††	Lease Agreement, dated as of April 10, 2002, by and among Chassis (DE) Limited Partnership, Tower Automotive Products Company, Inc. and Tower Automotive Tool LLC (filed as Exhibit 10.40 to Amendment No. 2 to the Registrant’s Registration Statement on Form S-1 (No. 333-165200) and incorporated herein by reference).
10.18	Amendment No. 1 to Lease Agreement, dated as of October 9, 2002, by and among Chassis (DE) Limited Partnership, Tower Automotive Products Company, Inc. and Tower Automotive Tool LLC (filed as Exhibit 10.41 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 (No. 333-165200) and incorporated herein by reference).
10.19††	Amendment No. 2 to Lease Agreement, dated as of July 31, 2007, by and among Chassis (DE) Limited Partnership, Tower Automotive Products Company, Inc. and Tower Automotive Tool LLC (filed as Exhibit 10.42 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 (No. 333-165200) and incorporated herein by reference).
10.20†	Form of Amendment to Form of Award Letter, Tower Automotive, LLC 2010 Long-Term Incentive Program (filed as Exhibit 10.53 to Amendment No. 9 to the Registrant’s Registration Statement on Form S-1 (No. 333-165200) and incorporated herein by reference).

105

10.21†††	Amendment No. 3 to Lease Agreement, dated as of January 24, 2011, by and among Chassis (DE) Limited Partnership, Tower Automotive USA Operations I, LLC and Tower Automotive USA Operations II, LLC (successors in interest to Tower Automotive Products Company, Inc. and Tower Automotive Tool LLC) (filed as Exhibit 10.60 to the Registrant’s Annual Report on Form 10-K filed March 8, 2012 and incorporated herein by reference).
10.22†††	Amendment No. 4 to Lease Agreement, dated as of October 3, 2011, by and among Chassis (DE) Limited Partnership, Tower Automotive USA Operations I, LLC and Tower Automotive USA Operations II, LLC (successors in interest to Tower Automotive Products Company, Inc. and Tower Automotive Tool LLC) (filed as Exhibit 10.61 to the Registrant’s Annual Report on Form 10-K filed March 8, 2012 and incorporated herein by reference).
10.23	Registrant’s Employment Agreement with Par Malmhagen (filed as Exhibit 10.65 to the Registrant’s Quarterly Report on Form 10-Q filed August 7, 2012 and incorporated herein by reference).
10.24	Stock Purchase Agreement between Tower Automotive Holdings Asia B.V., Tower Automotive International Holdings B.V., and SJ Holdings, Inc. (filed as Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed January 2, 2013 and incorporated herein by reference).
10.25†	Form of 2012 Bonus Plan (filed as Exhibit 10.67 to the Registrant’s Current Report on Form 10-K filed March 7, 2013 and incorporated herein by reference).
10.26†	Employment Agreement, dated as of March 4, 2013, between Tower Automotive Operations USA I, LLC and James Bernard (filed as Exhibit 10.71 to the Registrant’s Current Report on Form 10-K filed March 7, 2013 and incorporated herein by reference).
10.27†	Employment Agreement, dated as of March 4, 2013, between Tower Automotive Operations USA I, LLC and William Cook (filed as Exhibit 10.72 to the Registrant’s Current Report on Form 10-K filed March 7, 2013 and incorporated herein by reference).
10.28†	Amendment to Employment Agreement, dated as of March 4, 2013, between Tower Automotive Holding GmbH and Par Malmhagen (filed as Exhibit 10.73 to the Registrant’s Current Report on Form 10-K filed March 7, 2013 and incorporated herein by reference).
10.29†	Form of Performance Award Agreement (filed as Exhibit 10.74 to the Registrant’s Current Report on Form 10-K filed March 7, 2013 and incorporated herein by reference).
10.30	Term Loan and Guaranty Agreement, dated as of April 23, 2013, by and among Tower Automotive Holdings USA, LLC, as borrower, Tower International, Inc., Tower Automotive Holdings I, LLC, Tower Automotive Holdings II(a), LLC, Tower Automotive Holdings II (b), LLC and the subsidiary guarantors named therein, as Guarantors, each of the financial institutions from time to time party thereto as lenders, and Citibank, N.A., as administrative agent for the lenders (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed April 24, 2013 and incorporated herein by reference).
10.31	Second Amended and Restated Revolving Credit and Guaranty Agreement dated as of June 19, 2013 by and among Tower Automotive Holdings USA, LLC, Tower International, Inc., Tower Automotive Holdings I, LLC, Tower Automotive Holdings II(a), LLC, Tower Automotive Holdings II(b), LLC, the subsidiary guarantors named therein, JPMorgan Chase Bank, N.A., Wells Fargo Capital Finance, LLC and each of the other financial institutions from time to time party thereto, as Lenders and JPMorgan Chase Bank, N.A., as Issuing Lender, as Swing Line Lender and as Administrative Agent for the Lenders (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed June 20, 2013 and incorporated herein by reference).

106

10.32	Second Amended and Restated ABL Security Agreement dated as of June 19, 2013 among Tower Automotive Holdings USA, LLC, the guarantors named therein and JPMorgan Chase Bank, N.A., as Agent for the Lenders (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed June 20, 2013 and incorporated herein by reference).
10.33	First Refinancing Term Loan Amendment to Term Loan and Guaranty Agreement, dated as of July 29, 2013, by and among Tower Automotive Holdings USA, LLC, as borrower, Tower International, Inc., Tower Automotive Holdings I, LLC, Tower Automotive Holdings II(a), LLC, Tower Automotive Holdings II(b), LLC and the subsidiary guarantors named therein, as Guarantors, each of the financial institutions from time to time party thereto as lenders, and Citibank, N.A., as administrative agent for the lenders (filed as Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q filed July 31, 2013 and incorporated herein by reference).
10.34	Second Refinancing Term Loan Amendment and Additional Term Loan Amendment to Term Loan and Guaranty Agreement, dated as of January 31, 2014, by and among Tower Automotive Holdings USA, LLC, as borrower, Tower International, Inc., Tower Automotive Holdings I, LLC, Tower Automotive Holdings II(a), LLC, Tower Automotive Holdings II(b), LLC and the subsidiary guarantors named therein, as Guarantors, each of the financial institutions from time to time party thereto as lenders, and Citibank, N.A., as administrative agent for the lenders (filed as Exhibit 99.1 to the Registrant’s Current Report on Form 8-K filed January 21, 2014 and incorporated herein by reference).
10.35	Term Loan and Guaranty Agreement, dated as of April 23, 2013 (as amended pursuant to a First Refinancing Term Loan Amendment, dated as of July 29, 2013 and a Second Refinancing Term Loan Amendment and Additional Term Loan Amendment, dated as of January 31, 2014), by and among Tower Automotive Holdings USA, LLC, as borrower, Tower International, Inc., Tower Automotive Holdings I, LLC, Tower Automotive Holdings II(a), LLC, Tower Automotive Holdings II(b), LLC and the subsidiary guarantors named therein, as Guarantors, each of the financial institutions from time to time party thereto as lenders, and Citibank, N.A., as administrative agent for the lenders (filed as Exhibit 99.2 to the Registrant’s Current Report on Form 8-K filed January 21, 2014 and incorporated herein by reference).
10.36†	Form of Performance Award Agreement (filed as Exhibit 10.65 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2014 and incorporated herein by reference).
10.37†	Second Amended and Restated Employment Agreement, dated as of July 28, 2014, between Tower Automotive Operations USA I, LLC and Mark M. Malcolm (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed July 28, 2014 and incorporated herein by reference).
10.38	Third Amended and Restated Revolving Credit and Guaranty Agreement, by and among Tower Automotive Holdings USA, LLC, Tower International, Inc., Tower Automotive Holdings I, LLC, Tower Automotive Holdings II(a), LLC, Tower Automotive Holdings II (b), LLC, the subsidiary guarantors named therein, the financial institutions from time to time party thereto as Lenders, and JPMorgan Chase Bank, N.A. as Issuing Lender, as Swing Line Lender, and as Administrative Agent for the Lenders. (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed September 19, 2014 and incorporated herein by reference).
10.39	Revolving Credit Security Agreement, dated as of September 17, 2014, among Tower Automotive Holdings USA, LLC, the guarantors named therein, and JPMorgan Chase Bank, N.A. as Agent for the Lenders (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed September 19, 2014 and incorporated herein by reference).

107

10.40†	Second Amended and Restated Employment Agreement, dated as of August 31, 2016, between Tower Automotive Operations USA I, LLC and James C. Gouin (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated September 1, 2016 and incorporated herein by reference).
10.41†	Agreement to Extend Employment Term and Increase Base Salary, dated as of December 21, 2015, between Tower Automotive Operations USA I, LLC and James Bernard (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed December 21, 2015 and incorporated herein by reference).
10.42†	Second Amendment to the Service Agreement for Managing Director, dated as of December 21, 2015 between Tower Automotive Holding GmbH and Pär O.H. Malmhagen (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed December 21, 2015 and incorporated herein by reference).
10.43†	Form of Restricted Stock Unit Award Agreement for directors (filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 and incorporated herein by reference).
10.44†	Form of Restricted Stock Unit Award Agreement for employees (filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 and incorporated herein by reference).
10.45†	Amended and Restated Employment Agreement, dated as of August 31, 2016, between Tower Automotive Operations USA I, LLC and Jeffrey Kersten (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed September 1, 2016 and incorporated herein by reference).
10.46†	Amendment to the Tower International, Inc. 2010 Equity Incentive Plan (filed as Exhibit 10.71 to the Registrant’s Annual Report on Form 10-K filed February 28, 2017 and incorporated herein by reference).
10.47†	Letter Agreement between Mark Malcolm and the Company, dated January 10, 2017 (filed as Exhibit 10.72 to the Registrant’s Annual Report on Form 10-K filed February 28, 2017 and incorporated herein by reference).
10.48†	Second Amended and Restated Employment Agreement, dated as of January 19, 2017, between Tower Automotive Operations USA I, LLC and Michael Rajkovic (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K dated January 20, 2017 and incorporated herein by reference).
10.49†	Employment Agreement, dated as of January 19, 2017, between Tower Automotive Operations USA I, LLC and Pär O.H. Malmhagen (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated January 20, 2017 and incorporated herein by reference).
10.50	Fourth Amended and Restated Revolving Credit and Guaranty Agreement, dated as of March 7, 2017 among Tower Automotive Holdings USA, LLC, Tower International, Inc., Tower Automotive Holdings I, LLC, Tower Automotive Holdings II(a), LLC, the Subsidiary Guarantors, the financial institutions from time to time party thereto, as Lenders, and JPMorgan Chase Bank, N.A., as Issuing Lender, as Swing Line Lender and as administrative agent for the Lenders (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed March 10, 2017 and incorporated herein by reference).
10.51	Amended and Restated Revolving Credit Security Agreement, originally dated as of September 17, 2014 and amended and restated as of March 7, 2017, among Tower Automotive Holdings USA, LLC, the Guarantors party thereto and JPMorgan Chase Bank, N.A., as agent (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed March 10, 2017 and incorporated herein by reference).

108

10.52	Third Refinancing Term Loan Amendment and Amendment and Restatement Agreement, dated as of March 7, 2017, in respect of the Term Loan and Guaranty Agreement, dated as of April 23, 2013, among Tower Automotive Holdings USA, LLC, Tower International, Inc., Tower Automotive Holdings I, LLC, Tower Automotive Holdings II(a), LLC, and the other Guarantors party thereto, the Lenders party thereto and Citibank N.A., as administrative agent (filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed March 10, 2017 and incorporated herein by reference).
10.53	Amended and Restated Term Loan and Guaranty Agreement, originally dated as of April 23, 2013 and amended and restated as of March 7, 2017 among Tower Automotive Holdings USA, LLC, Tower International, Inc., Tower Automotive Holdings I, LLC, Tower Automotive Holdings II(a), the Subsidiary Guarantors, each of the financial institutions from time to time party thereto, as Lenders, and Citibank, N.A., as administrative agent for the Lenders (filed as Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed March 10, 2017 and incorporated herein by reference).
10.54	Amended and Restated Term Loan Security Agreement, originally dated as of April 23, 2013 and amended and restated as of March 7, 2017 among Tower Automotive Holdings USA, LLC, the Guarantors party thereto and Citibank, N.A., as agent (filed as Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed March 10, 2017 and incorporated herein by reference).
10.55†	Separation and General Release Agreement, dated as of August 7, 2017, between Tower Automotive Operations USA I, LLC and William Cook (filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed October 30, 2017 and incorporated herein by reference).
10.56†	Letter Agreement between James C. Gouin and the Company, dated January 30, 2018 (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated January 26, 2018 and incorporated herein by reference).
10.57†	Letter Agreement between Jeffrey Kersten and the Company, dated January 30, 2018 (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated January 26, 2018 and incorporated herein by reference).
10.58	Master Lease Agreement No. 100521 dated November 16, 2016 by and among Tower Automotive Holdings USA, LLC and Tower Automotive Operations USA I, LLC and MB Equipment Finance, LLC (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated February 23, 2018 and incorporated herein by reference).
10.59	Interim Funding Agreement, dated as of February 20, 2018, by and among Tower Automotive Holdings USA, LLC, Tower Automotive Operations USA I, LLC, MB Equipment Finance, LLC and the parties referred to therein as Participants (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K dated February 23, 2018 and incorporated herein by reference).
10.60†	Amendment to Employment Agreement, dated as of January 19, 2017, between Pär Malmhagen and Tower Automotive Operations USA I, LLC (filed as Exhibit 10.60 to the Registrant’s Annual Report on Form 10-K filed February 28, 2018 and incorporated herein by reference).
10.61†	Amendment to Employment Agreement, dated as of August 31, 2016, between Jeffrey Kersten and Tower Automotive Operations USA I, LLC(filed as Exhibit 10.61 to the Registrant’s Annual Report on Form 10-K filed February 28, 2018 and incorporated herein by reference).
10.62†	Form of Performance Award Agreement (filed as Exhibit 10.62 to the Registrant’s Annual Report on Form 10-K filed February 28, 2018 and incorporated herein by reference).

109

10.63	Fourth Amendment to Lease Agreement, dated as of May 18, 2018 by and between MODULE (DE) LIMITED PARTNERSHIP and TOWER AUTOMOTIVE OPERATIONS USA I, LLC (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated May 22, 2018 and incorporated herein by reference).
10.64	Guaranty and Surety Agreement, dated as of May 18, 2018, given by TOWER INTERNATIONAL, INC. to MODULE (DE) LIMITED PARTNERSHIP (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K dated May 22, 2018 and incorporated herein by reference).
10.65	Termination of Lease, dated as of May 18, 2018 by and between MODULE (DE) LIMITED PARTNERSHIP and TOWER AUTOMOTIVE OPERATIONS USA I, LLC (filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K dated May 22, 2018 and incorporated herein by reference).
10.66*	Memorandum of Understanding, dated as of November 20, 2018 by and among Tower Automotive Holdings III Cooperatie U.A., Tower Automotive Holdings USA, LLC and Financière SNOP Dunois S.A.
10.67*	Stock Purchase Agreement, dated as of December 6, 2018 by and among Tower Automotive Holdings III Cooperatie U.A., Tower Automotive Holdings USA, LLC and Financière SNOP Dunois S.A.
10.68	Consent and Amendment, dated as of December 14, 2018, among Tower Automotive Holdings USA, LLC, Tower International, Inc., Tower Automotive Holdings I, LLC, Tower Automotive Holdings II(a), LLC, the Subsidiary Guarantors, the financial institutions party thereto, as Lenders, and JPMorgan Chase Bank, N.A., as Issuing Lender, as Swing Line Lender and as administrative agent for the Lenders (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated December 19, 2018 and incorporated herein by reference).
10.69	Consent and Amendment, dated as of December 14, 2018, among Tower Automotive Holdings USA, LLC, Tower International, Inc., Tower Automotive Holdings I, LLC, Tower Automotive Holdings II(a), LLC, and the other Guarantors party thereto, the Lenders party thereto and Citibank N.A., as administrative agent (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K dated December 19, 2018 and incorporated herein by reference).
10.70†*	Separation and General Release Agreement between Michael Rajkovic and Tower Automotive Operations USA I, LLC, entered into on Decemer 24, 2018.
10.71†*	Employment Agreement, dated as of November 7, 2017, between Mark R. Flynn and Tower Automotive Operations USA I, LLC.
10.72†*	Amended and Restated Employment Agreement, dated as of December 18, 2018, between Nanette Dudek and Tower Automotive Operations USA I, LLC.
10.73†*	Letter Agreement between Mark R. Flynn and the Company, dated as of February 27, 2018.
10.74†*	Letter Agreement between Nanette Dudek and the Company, dated as of February 27, 2018.
11.1	A statement regarding the computation of earnings per share is omitted because such computation can be clearly determined from the material contained in this Report.
21.1*	Subsidiaries of Tower International, Inc.
23.1*	Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm

110

31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14 Securities Exchange Act Rules 13a-14(a) and 15d-14(a), pursuant to section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Chief Financial Officer pursuant to Rule 13a-14 Securities Exchange Act Rules 13a-14(a) and 15d-14(a), pursuant to section 302 of the Sarbanes-Oxley Act of 2002
32.1**	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002
32.2**	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Scheme Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

*

Filed herewith.

**

Furnished herewith.

†

Management contract or compensatory plan or arrangement.

††

Confidential treatment has been granted for certain provisions of this Exhibit pursuant to Rule 406 promulgated under the Securities Act of 1933, as amended.

†††

Portions of this exhibit have been omitted pursuant to the Company’s request to the Secretary of the Securities and Exchange Commission for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

Item 16.   Form 10-K Summary

None

111

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

Date: February 27, 2019 /s/ Jeffrey L. Kersten ​ Jeffrey L. Kersten
Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities indicated on the 27th day of February, 2019.

Signature	Title
/s/ James C. Gouin James C. Gouin	Chief Executive Officer and Director (Principal Executive Officer)
/s/ Jeffrey L. Kersten Jeffrey L. Kersten	Executive Vice President and Chief Financial Officer (Principal Financial Officer)
/s/ Gregory B. Guastella Gregory B. Guastella	Principal Accounting Officer
/s/ Thomas K. Brown Thomas K. Brown	Director
/s/ James Chapman James Chapman	Director
/s/ Frank E. English Frank E. English	Director
/s/ Alison Davis-Blake Alison Davis-Blake	Director
/s/ Dev Kapadia Dev Kapadia	Director
/s/ Mark M. Malcolm Mark M. Malcolm	Director

112

EX-10.66

Exhibit 10.66

MEMORANDUM OF UNDERSTANDING

By and among

Tower Automotive Holdings III Coöperatie U.A.

and

Tower Automotive Holdings USA, LLC

and

Financière SNOP Dunois S.A.

and

Tower International, Inc.

Dated 20 November 2018

TABLE OF CONTENTS

ARTICLE I
CONSULTATION WITH THE WORKS COUNCIL
Section 1.1	Initiation of consultation	2
Section 1.2	Cooperation	2
Section 1.3	Consultation Period	3
ARTICLE II
SPA
Section 2.1	No binding obligations on the Purchaser	3
Section 2.2	Commitment to sell the Shares and the Intercompany Loan	4
ARTICLE III
GUARANTEES AND COVENANTS
Section 3.1	Guarantees	4
Section 3.2	Covenants	5
Section 3.3	Exclusivity	5
ARTICLE IV
TERMINATION; EFFECT OF TERMINATION
Section 4.1	Termination	5
Section 4.2	Effect of termination	6
Section 4.3	Termination fee payable by the Purchaser	6
Section 4.4	Termination fee payable by the Seller’s Guarantor	6
Section 4.5	Nature and treatment of termination fee	7
ARTICLE V
MISCELLANEOUS
Section 5.1	Publicity	7
Section 5.2	Governing Law	8
Section 5.3	Applicability of certain clauses of the SPA	8
Section 5.4	Extension and waiver	8

i 

MEMORANDUM OF UNDERSTANDING

This memorandum of understanding (the Memorandum of Understanding) is entered into on 20 November 2018,

BY AND AMONG:

(1) Tower Automotive Holdings III Coöperatie U.A., a cooperative established under the laws of the Netherlands with registered seat in Baarn, the Netherlands, and address at Herikerbergweg 124, Luna ArenA, 1101 CM Amsterdam, the Netherlands, and registered with the Chamber of Commerce (Kamer van Koophandel) under registration number 32124774 (the Seller);

(2) Tower Automotive Holdings USA, LLC, a limited liability company established under the laws of the State of Delaware, United States of America, and registered under trade register number 26-0459108 (the Loan Seller);

(3) Financière SNOP Dunois S.A., a société anonyme established under the laws of France with registered seat in avenue d’Auvergne, 43100 Brioude, France, and registered with the Trade and Companies Register of le Puy en Velay under registration number 381 904 382 (the Purchaser); and

(4) Tower International, Inc., a corporation under the laws of the State of Delaware with registered seat in 17672 North Laurel Park Drive, Suite 400E, Livonia, MI 48152, United States of America, and registered with the Secretary of State of Delaware under registration number 27-3679414 (the Seller’s Guarantor);

(the Seller, the Loan Seller and the Seller’s Guarantor together, the Seller Parties, and together with the Purchaser, the Parties and each of them, a Party);

WHEREAS:

(A) The Parties have been discussing the commercial principles of a potential acquisition of the European business activities of the Tower International group by the Purchaser (the Proposed Transaction). Before the Purchaser is in a position to make a decision to bindingly agree upon the Proposed Transaction, it intends to consult its European works council (comité d’entreprise européen) (the Works Council) in connection therewith. The Seller and the Seller’s Guarantor are prepared to grant the Purchaser the opportunity to carry out such consultation, but – in particular as the Seller’s Guarantor, being a US stock market listed company, has to publicly disclose the entry into this Memorandum of Understanding and would incur a significant loss to its capital markets reputation and further significant, also financial damages in case the Proposed Transaction does ultimately not proceed – require certain protection and financial compensation should, at the end of such consultation, the Purchaser decide not to enter into the Proposed Transaction.

(B) The negotiations between the Parties in connection with the Proposed Transaction being sufficiently advanced, as set out in the draft share purchase agreement attached hereto as Exhibit 1 (together with its exhibits and schedules, the SPA), the Parties have decided to enter into this Memorandum of Understanding and the Purchaser shall initiate such information and consultation process of its Works Council in accordance with the terms set forth herein.

(C) Unless otherwise defined herein, capitalized terms used in this Memorandum of Understanding shall have the meanings ascribed to them in the SPA.

NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements set forth herein, the Parties agree as follows:

ARTICLE I
CONSULTATION WITH THE WORKS COUNCIL

Section 1.1           Initiation of consultation

(a)          Immediately following the execution and delivery by the Parties of this Memorandum of Understanding (and in any event no later than on 21 November 2018, with a first meeting with the Works Council taking place no later than on 28 November 2018) (21 November 2018 the Consultation Start Date), the Purchaser shall commence such procedure to inform and consult with its Works Council and shall exercise its best efforts (sich nach besten Kräften bemühen) to obtain an Opinion (as defined below) from the Works Council with respect to the Proposed Transaction as soon as possible following the Consultation Start Date with the view to obtaining an Opinion by 19 December 2018 due to the Christmas break; provided that nothing in this Memorandum of Understanding shall bind the Purchaser (or, for the avoidance of doubt, any other Party) to accept or commit or agree to any conditions or demands of the Works Council in connection with obtaining such Opinion (other than regarding the provision of reasonable information which is available and relevant for the purpose of understanding the Proposed Transaction, meetings or other standard procedural steps within the consultation process).

(b)          For purposes of this Memorandum of Understanding, “Opinion” means the opinion, whether positive, neutral or negative, of the Works Council with respect to the Proposed Transaction, which may be rendered orally or in writing or by any other action or omission (including the passage of time) which would cause the Works Council to be deemed to have been consulted in the meaning of French case law prior to the French law of 14 June 2013.

Section 1.2           Cooperation

(a)          The Purchaser shall (i) keep the Seller fully informed of the status of the Works Council information and consultation process (including providing the Seller with copies of any material correspondence or other material documentation received by the Purchaser from the Works Council no later than three (3) Business Days following the receipt of any such correspondence or documents) and (ii) provide the Seller with a copy of the Opinion (or, where no such copy is available, a reasonably detailed description of such Opinion) as promptly as reasonably practicable (and in any event, within two (2) Business Day) after the Purchaser’s receipt of such Opinion.

2

(b)          The Seller and the Seller’s Guarantor shall, and shall procure that the Group Companies will, (i) provide the Purchaser with reasonable assistance and cooperation in connection with the information and consultation process with the Works Council and (ii) in furtherance of the foregoing, as promptly as is reasonably practicable (and in any event, within three (3) Business Days) after any such request, furnish to the Purchaser such information as may be reasonably requested by the Purchaser in connection with such information and consultation process or the preparation of any filing or submission to the Works Council required in connection therewith, including answering any reasonable questions from the Works Council or any expert appointed thereby.

(c)          The Purchaser shall (i) permit the Seller to review in advance any material written correspondence, notices or communications (including the information document provided to the Works Council and any supporting materials) to be furnished or made available by the Purchaser to the Works Council, and (ii) (A) consult the Seller in connection with any such correspondence, notices or communications and give the Seller a reasonable opportunity to comment thereon and (B) take into account in good faith any comments that the Seller may make with respect thereto and (iii) support in all respects the Proposed Transaction throughout the information and consultation process with the Works Council.

(d)          The Purchaser has provided to the Seller, prior to the date hereof, the draft information document to be provided to the Works Council.

Section 1.3           Consultation Period

For purposes of this Memorandum of Understanding, “Consultation Period” means the period beginning on the Consultation Start Date and ending on the earlier of:

(a)          the date upon which the Opinion is obtained (or deemed to be obtained);

(b)          11:59 p.m. (CET) on 31 January 2019, provided that both the Purchaser and the Seller, each unilaterally, acting in good faith, may procure, by written notice to the respective other Party, that such date is replaced by 6 March 2019.

ARTICLE II
SPA

Section 2.1           No binding obligations on the Purchaser

The Parties acknowledge that nothing herein shall constitute in any manner whatsoever an undertaking by the Purchaser to acquire the Shares and the Intercompany Loan from the Seller and the Loan Seller, respectively, or be bound by any obligation of any nature whatsoever in connection with the Proposed Transaction (other than those obligations set forth in this Memorandum of Understanding).

3

Section 2.2           Commitment to sell the Shares and the Intercompany Loan

(a)          In the event the Opinion has been rendered (or is deemed to have been rendered) pursuant to Section 1.1, should the Purchaser wish to acquire the Shares and the Intercompany Loan from the Seller and the Loan Seller, respectively, the Purchaser shall notify such decision to the Seller’s Guarantor (the Acceptance Notice) on or prior to the date falling three (3) Business Days after the expiration of the Consultation Period (such date, the Expiry Date), in accordance with the provisions of clause 17 (Notices) of the SPA (as incorporated by reference pursuant to Section 5.3).

(b)          Subject to the Purchaser sending the Acceptance Notice on or prior to the Expiry Date in accordance with Section 2.2(a), (i) each of the Seller and the Loan Seller hereby irrevocably and unconditionally undertakes to sell the Shares and the Intercompany Loan, respectively, to the Purchaser, at the price and under the other terms and conditions set forth in the SPA, and (ii) each of the Seller Parties hereby irrevocably and unconditionally undertakes to execute the SPA as attached in Exhibit 1 within three (3) Business Days from the date of the Acceptance Notice (or any other date expressly agreed in writing between the Parties – such date, the Execution Date).

ARTICLE III
GUARANTEES AND COVENANTS

Section 3.1           Guarantees

(a)          Each of the guarantees set forth in clause 6 (Seller Parties’ guarantees), clause 9 (Purchaser’s guarantees) and clause 15 (Seller’s Guarantor and indemnification) of the SPA (including the corresponding disclosures set forth therein) are hereby incorporated by reference into this Memorandum of Understanding as if such guarantees were fully set forth herein and made as of the date hereof, mutatis mutandis.

(b)          In particular, and notwithstanding anything to the contrary contained herein, each of the Parties guarantees to the other Parties that, so far as it is concerned:

(i) it is a company duly established and validly existing under the laws of its jurisdiction of incorporation. It is not insolvent or subject to any insolvency, bankruptcy or similar proceedings;

(ii) it has all necessary corporate power and authority to enter into this Memorandum of Understanding and the SPA, to carry out its obligations hereunder and thereunder and to consummate the transactions set forth herein and therein;

(iii) the execution and delivery of this Memorandum of Understanding by it and the consummation of the transactions set forth herein have been duly authorized by all necessary corporate actions and no other corporate proceeding is necessary to authorize the execution or delivery of this Memorandum of Understanding, or the consummation of the transactions set forth herein;

4

(iv) this Memorandum of Understanding has been duly executed by or on behalf of it and, once signed, will constitute a legal, valid and binding obligation of it, enforceable against it in accordance with its terms; and

(v) the execution and performance by it of this Memorandum of Understanding shall not (i) breach any provision of its articles of association or other constitutional and organizational documents, or result in a breach of any laws or any order, decision, ruling or injunction of any court or other governmental entity applicable to or enforceable against it, or (iii) violate any contract or agreement to which it is a party, where (in each case) the breach would materially and adversely affect its ability to enter into and perform its obligations under this Memorandum of Understanding.

Section 3.2           Covenants

Clause 10 (Covenants) of the SPA is hereby incorporated by reference into this Memorandum of Understanding as if such covenants were fully set forth herein and in effect as of the date hereof, mutatis mutandis; provided however that, with respect to clause 10.1 (Merger control proceedings, other regulatory requirements) of the SPA, the timing for the submission of a case team allocation request and the draft Form RS to the European Commission shall be no earlier than five (5) Business Days after the date on which the first meeting of the Works Council is held.

Section 3.3           Exclusivity

The Seller, the Seller’s Guarantor and the Purchaser expressly and irrevocably agree to extend the Period, as such term is defined in the Exclusivity and Confidentiality Letter entered into between themselves on 26 October 2018, to and until the earlier of (i) the Execution Date, (ii) the termination date of this Memorandum of Understanding in accordance with the provisions of ARTICLE IV and (iii) any prior date on which they mutually agree to terminate the discussions relating to the Potential Transaction.

ARTICLE IV
TERMINATION; EFFECT OF TERMINATION

Section 4.1           Termination

(a)          This Memorandum of Understanding may be terminated by mutual written consent of the Parties, at any time prior to the execution of the SPA.

(b)          This Memorandum of Understanding shall terminate automatically upon the valid, binding and enforceable execution of the SPA by the Parties hereto.

(c)          Notwithstanding the provisions of Section 4.3 (Termination fee payable by the Purchaser) hereof, if the Acceptance Notice has not been sent by the Purchaser on or prior to the Expiry Date, at its sole discretion and in compliance with the provisions hereof, this Memorandum of Understanding shall terminate automatically as at the Expiry Date, unless the Parties mutually agree in writing to postpone such Expiry Date to a later date.

5

(d)          Notwithstanding the provisions of Section 4.4 (Termination fee payable by the Seller’s Guarantor) hereof, if, despite having received the Acceptance Notice, the Seller Parties have not executed the SPA as attached in Exhibit 1 on or prior to the Execution Date in accordance with the provisions of Section 2.2(b), at their sole discretion and in compliance with the provisions hereof, this Memorandum of Understanding shall terminate automatically as at the Execution Date, unless the Parties mutually agree in writing to postpone such Execution Date to a later date.

Section 4.2           Effect of termination

In the event of termination of this Memorandum of Understanding pursuant to ARTICLE IV, this Memorandum of Understanding (other than as set forth in this ARTICLE IV) shall become void and of no effect with no liability on the part of any Party (or of any of its directors, officers, employees, agents, legal and financial advisors or other representatives); provided however, that in such case the Parties shall cooperate with each other in connection with the withdrawal of any applications to or termination of proceedings before any merger control authorities or other public authorities in connection with the Proposed Transaction. A termination of or a withdrawal from this Memorandum of Understanding for reasons other than those expressly set out herein is excluded. Section 4.3, Section 4.4 and ARTICLE V of this Memorandum of Understanding shall in any event, in their entirety, remain in force and effect in case of and unaffected by any termination of this Memorandum of Understanding.

Section 4.3           Termination fee payable by the Purchaser

If, despite having obtained an Opinion from the Works Council (or where, for the avoidance of doubt, the Opinion may be deemed to have been obtained), this Memorandum of Understanding is terminated pursuant to Section 4.1(c), then the Purchaser shall promptly pay or cause to be paid (in any event, within twenty (20) Business Days after the Expiry Date) to the Seller’s Guarantor as compensation for costs and other financial damages incurred an amount of EUR 12,750,000.00 (in words: twelve million seven hundred and fifty thousand Euros) (the Purchaser Termination Fee) by wire transfer of same day funds, free of costs and charges, into a bank account to be notified to the Purchaser by the Seller’s Guarantor.

Section 4.4           Termination fee payable by the Seller’s Guarantor

If this Memorandum of Understanding is terminated pursuant to Section 4.1(d), then the Seller’s Guarantor shall promptly pay or cause to be paid (in any event, within twenty (20) Business Days after the Acceptance Notice has been sent) to the Purchaser an amount of EUR 12,750,000.00 (in words: twelve million seven hundred and fifty thousand Euros) as compensation for transaction costs of the Purchaser (the Seller Termination Fee) by wire transfer of same day funds, free of costs and charges, into a bank account to be notified to the Seller’s Guarantor by the Purchaser.

6

Section 4.5           Nature and treatment of termination fee

(a)          The Parties shall use their respective best efforts (sich nach besten Kräften bemühen) to secure that any sum payable under Section 4.3 or Section 4.4 will not be subject to any VAT.

(b)          The Parties acknowledge and agree that neither the Purchaser Termination Fee, nor the Seller Termination Fee, is a penalty but rather, absent a willful (vorsätzlich) or fraudulent (betrügerisch) behavior, a reasonable estimate of damages necessary to compensate and protect the interests of the Purchaser, on the one hand, or the Seller Parties, on the other hand, in the circumstances in which the Purchaser Termination Fee or the Seller Termination Fee, as applicable, is payable. The Parties hereby acknowledge and agree that the amount of the Purchaser Termination Fee or the Seller Termination Fee, as applicable, is fair, after taking into account all the costs and expenses already incurred by the Parties before entering into this Memorandum of Understanding, the time spent to work on this Proposed Transaction, the exclusivity granted and the consequences on their respective businesses of the termination of the Proposed Transaction, in particular for the Seller’s Guarantor as a US stock market listed company. In no event shall the Purchaser or the Seller’s Guarantor, as applicable, be required to pay more than one time the Purchaser Termination Fee or the Seller Termination Fee, as applicable.

(c)          In the event that the Purchaser Termination Fee or the Seller Termination Fee, as applicable, is paid by or on behalf of the Purchaser to the Seller’s Guarantor or the Seller’s Guarantor to the Purchaser, respectively, in accordance with this ARTICLE IV, the payment thereof shall be the sole and exclusive remedy of the Seller Parties against the Purchaser, on the one hand, or the Purchaser against the Seller Parties, on the other hand, in each case including for any and all losses, claims, damages, liabilities, costs, fees, expenses (including reasonable attorney’s fees and disbursements), judgments, inquiries and fines suffered as a result of any breach of any representation, warranty, covenant or obligation in this Memorandum of Understanding, and neither the Purchaser and its affiliates in the case of the Purchaser Termination Fee, nor the Seller Parties and their affiliates in the case of the Seller Termination Fee, nor any of their respective former, current or future representatives, agents, partners, managers, stockholders or assignees shall have any further liability or obligations relating to or arising out of this Memorandum of Understanding.

ARTICLE V
MISCELLANEOUS

Section 5.1           Publicity

The initial press release regarding this Memorandum of Understanding and the Proposed Transaction to be issued by the Seller’s Guarantor on the date hereof shall be the press release in the form attached hereto as Exhibit 2. Subject to the foregoing sentence, the provisions of clause 13 (Confidentiality and press releases) of the SPA are hereby incorporated by reference into this Memorandum of Understanding as if such provisions were fully set forth herein and made as of the date hereof, mutatis mutandis.

7

Section 5.2           Governing Law

This Memorandum of Understanding and the SPA shall be governed by, and construed in accordance with, the substantive laws of Germany. The form of the transfer of the Shares shall be governed by Dutch law. The form of this Memorandum of Understanding shall be governed by French law. For the avoidance of doubt, notarization provisions of German law and other provisions of German law regarding the form of the transfer of the Shares which are not otherwise applicable to transfers of shares in Dutch companies shall not apply to this Memorandum of Understanding and to the SPA.

Section 5.3           Applicability of certain clauses of the SPA

Clause 17 (Notices) and clause 18 (Miscellaneous) of the SPA – other than clause 18.1 of the SPA, which is replaced by Section 5.2 above – are hereby incorporated by reference into this Memorandum of Understanding as if such provisions were fully set forth herein, mutatis mutandis.

Section 5.4           Extension and waiver

The Parties may (i) extend the time for the performance of any of the obligations or other acts of the other Parties, (ii) waive any inaccuracies in the guarantees contained in this Memorandum of Understanding (including as incorporated by reference pursuant to Section 3.1), or (iii) waive compliance with any covenants and agreements contained in this Memorandum of Understanding (including as incorporated by reference pursuant to Section 3.2). Any agreement on the part of a Party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such Party. The failure of any Party to this Memorandum of Understanding to assert any of its rights under this Memorandum of Understanding or otherwise shall not constitute a waiver of such rights.

[Signature Page Follows]

8

Executed in counterparts, on 20 November 2018.

Tower Automotive Holdings III Coöperatie U.A.,		Tower Automotive Holdings USA, LLC,
in Livonia, Michigan, USA		in Livonia, Michigan, USA
/s/ Dennis C. Pike		/s/ Jeffrey L. Kersten
By:	Dennis C. Pike	By:	Jeffrey L. Kersten
Title:	Managing Director	Title :	Vice President
/s/ Jeffrey L. Kersten
By:	Jeffrey L. Kersten
Title:	Managing Director
Financière SNOP Dunois S.A.,		Tower International, Inc.,
in Brussels (Belgium)		in Livonia, Michigan, USA
/s/ Michel Henri Pinaire		/s/ James C. Gouin
By:	Michel Henri Pinaire	By:	James C. Gouin
Title:	President and CEO	Title:	Chief Executive Officer

EX-10.67

Exhibit 10.67

Agreement

on the Sale and Purchase of all shares in

Tower Automotive Holdings Europe B.V.

TABLE OF CONTENTS

1.	Corporate structure	13
1.1	Tower Automotive Holdings Europe B.V.	13
1.2	Group Companies	13
1.3	Cash pooling agreements; shareholder financing	14
1.4	Effective Date	14
2.	Sale of the Shares; condition precedent; approvals	14
2.1	Sale of the Shares and the Intercompany Loan; right to profits	14
2.2	Condition precedent	15
2.3	Debt Financing Agreements	15
2.4	Approvals; Approval by the Company	15
3.	Purchase Price; conditions of payment	16
3.1	Purchase Price	16
3.2	Due date of Estimated Purchase Price; reductions to Estimated Purchase Price	17
3.3	Seller’s payment for Leakage	18
3.4	Conditions of payment	19
3.5	No set-off	19
4.	Closing Date; rescission right; Closing actions	19
4.1	Closing; Closing Date	19
4.2	Closing Condition	20
4.3	Rescission Right	21
4.4	Actions on and after the Closing Date	22
5.	Effective Date Statement/Settlement Payments	25
6.	Seller Parties’ guarantees	25
6.1	Form and scope of the guarantees	25
6.2	Guarantees	25
6.3	No other Seller’s guarantees	35
6.4	Seller’s Knowledge	35
7.	Remedies for breach by Seller or Loan Seller	35
7.1	General/recoverable damages	35
7.2	De Minimis Amount, Threshold	37
7.3	Overall scope of Seller’s liability pursuant to this agreement	38
7.4	Exclusion of claims due to Purchaser’s knowledge	38
7.5	Notification of Seller, procedure in case of third-party claims	39

1

7.6	Mitigation	42
7.7	Limitation periods	43
7.8	Exclusion of further remedies	43
7.9	Payments	44
7.10	Zwickau specific indemnity	45
8.	Tax indemnity	46
8.1	Definitions	46
8.2	Tax Indemnification	49
8.3	Tax Refunds	51
8.4	Reverse Indemnity	51
8.5	Cooperation on Tax matters	52
8.6	Tax Proceedings after Closing	53
8.7	CIT Group	56
8.8	Limitations	56
8.9	Miscellaneous	57
9.	Purchaser’s guarantees	57
9.1	Guarantees	57
9.2	Remedies	59
10.	Covenants	59
10.1	Merger control proceedings; other regulatory requirements	59
10.2	Access to financial information	61
10.3	No deviation from ordinary course of business; no Leakage	61
10.4	Insurance coverage	67
10.5	Use of names, trademarks and trade names	67
10.6	Retention of records	68
10.7	Seller release	69
10.8	Non-competition	69
10.9	Third-party consents and notices	70
10.10	Capital expenditures	70
10.11	Steering Committee	71
11.	Termination of intra-group relationships; transitional services	71
11.1	Intra-group relationships	71
11.2	Transitional and Engineering Services	72
12.	Release of Securities/Replacement as Contract Counterparty	73
12.1	Definitions	73

2

12.2	Assumption and discharge of Security Liabilities	73
13.	Confidentiality and press releases	74
13.1	Confidentiality; press releases; public disclosure	74
13.2	Seller’s confidentiality	75
13.3	Purchaser’s confidentiality; return of documents	75
14.	Assignment of rights and obligations	75
15.	Seller’s Guarantor and indemnification	76
15.1	Guarantee	76
15.2	Indemnification	76
16.	Transfer taxes and costs, costs of advisors	76
16.1	Transfer taxes and costs	76
16.2	VAT	77
16.3	Costs of advisors	77
17.	Notices	77
17.1	Form of notices	77
17.2	Notices to the Seller	77
17.3	Notices to Loan Seller	78
17.4	Notices to the Purchaser	78
17.5	Notices to the Seller’s Guarantor	79
17.6	Change of address	80
17.7	Copies to advisors	80
18.	Miscellaneous	80
18.1	Governing law	80
18.2	Disputes	80
18.3	Business Day	81
18.4	Amendments to this agreement	81
18.5	Third-party enforcement rights	81
18.6	Acknowledgement of Notary	81
18.7	Headings; references to German legal terms; interpretation; references to clauses	82
18.8	Annexes	82
18.9	Entire Agreement	82
18.10	Severability	82

3

Index of Definitions

Term	Defined in clause
Accounting Firm	as defined in para. (f) of Annex 5 (Effective Date Statement/Settlement Payments)
Acknowledgement Notice	as defined in clause 7.5.3
Affiliates	as defined in clause 8.1
AktG	as defined in clause 1.3.1
Announcement Date	as defined in Preamble (D)
Anti-Bribery Law	as defined in clause 6.2.4(b)
Assignment Agreement	as defined in clause 4.4.1(g)
Basis Debt	as defined in Annex 3.1.2 (Cash, Debt and Net Working Capital)
BGB	as defined in clause 6.1
Breach	as defined in clause 7.1.1
Business	as defined in Preamble (A)
Business Day	as defined in clause 18.3
Business Plan	as defined in clause 10.3.2
Capex Shortfall Amount	as defined in clause 10.10
Cash	as defined in Annex 3.1.2 (Cash, Debt and Net Working Capital)
Cash Pooling Agreement	as defined in clause 1.3.1
Cash Pooling Agreement Liabilities	as defined in clause 1.3.1
CIT Group	as defined in clause 8.1
Claim	as defined in clause 7.2
Claim Notice	as defined in clause 7.5.1
Closing	as defined in clause 4.1
Closing Actions	as defined in clause 4.4.1
Closing Conditions	as defined in clause 4.2.1
Closing Date	as defined in clause 4.1
Closing Memorandum	as defined in clause 4.4.1(j)
Company	as defined in clause 1.1.1
Compensatory Amount	as defined in clause 3.3.1
Confidentiality Agreement	as defined in clause 13.1.1
Damages	as defined in clause 7.1.1
Data Room	means the virtual data room for the transaction referred to in clause 7.4.1, containing documents and information relating to the Group Companies, the contents of which are filed on the USB enclosed hereto as Annex (A) (Data Room USB);

4

De Minimis Amount	as defined in clause 7.2
Debt	as defined in Annex 3.1.2 (Cash, Debt and Net Working Capital)
Debt Financing	as defined in clause 2.3
Debt Financing Agreements	as defined in clause 2.3
Debt Financing Sources	as defined in clause 2.3
Deed of Transfer	as defined in clause 4.4.1(d)
Disclosed Information	as defined in clause 7.4.1
Draft Estimated Statement	as defined in para. (a) of Annex 5
Effective Date	as defined in clause 1.4
Effective Date Statement	as defined in para. (c) of Annex 5 (Effective Date Statement/Settlement Payments)
Engineering Services Agreement	as defined in clause 11.2.5
Enterprise Value	as defined in clause 3.1.1(a)

Estimated Cash	as defined in para. (a) of Annex 5 (Effective Date Statement/Settlement Payments)
Estimated Debt	as defined in para. (a) of Annex 5 (Effective Date Statement/Settlement Payments)
Estimated Net Working Capital	as defined in para. (a) of Annex 5 (Effective Date Statement/Settlement Payments)
Estimated Purchase Price	as defined in para. (a) of Annex 5 (Effective Date Statement/Settlement Payments)

EUMR	as defined in clause 4.2.1(a)(i)
Filings	as defined in clause 10.1.1

Final Estimated Statement as defined in para. (b) of Annex 5 (Effective Date Statement/Settlement Payments)

Financial Information	as defined in clause 6.2.3(a)
Firm	as defined in clause 7.5.4
Formal Notice	as defined in clause 7.5.4
Group Companies	as defined in clause 1.2.2
Group Companies’ Shares	as defined in clause 1.2.2

5

Hazardous Substance	as defined in clause 6.2.14(a)
Information Technology	as defined in clause 11.2.2
Intercompany Loan	as defined in Preamble (H)
Intra-Group Agreements	as defined in clause 11.1.1
IT Transfers	as defined in clause 11.2.2
IT TSA	as defined in clause 11.2.3
IT Standalone Costs	as defined in clause 11.2.2
Key Employee(s)	as defined in clause 6.2.6(b)
Known	as defined in clause 7.4.2
Leakage	as defined in clause 10.3.4(b)
Leakage Certificate	as defined in clause 3.3.1
Liability Cap	as defined in clause 7.3
Loan Price	as defined in clause 3.1.3
Loan Seller	as defined in the Parties section
Loan Seller’s Account	as defined in clause 3.4.1(b)
Long Stop Date	as defined in clause 4.3.1
Other Debts	as defined in Annex 3.1.2 (Cash, Debt and Net Working Capital)
Majority Entities	as defined in clause 1.2.1
Management Presentation	as defined in clause 7.4.1
Material Contracts	as defined in clause 6.2.11
Member State	as defined in clause 4.2.1(a)(ii)
Negative Pledge Certificate	as defined in clause 10.3.3
Net Working Capital	as defined in Annex 3.1.2 (Cash, Debt and Net Working Capital)
Notary	as defined in clause 4.4.1(a)
Notary Account	as defined in clause 4.4.1(a)
Notary Letter	as defined in clause 4.4.3

Notice of Disagreement as defined in para. (e) of Annex 5 (Effective Date Statement/Settlement Payments)

Notices	as defined in clause 17.1
Party/Parties	as defined in the Parties section
Permitted Leakage	as defined in clause 10.3.4(c)
Power of Attorney	as defined in clause 4.4.1(d)
Pre-Effective Date Period	as defined in clause 8.1
Pre-Effective Date Straddle Period	as defined in clause 8.1
Pre-Effective Date Tax	as defined in clause 8.1
Pre-Effective Date Tax Refund	as defined in clause 8.1
Pre-Sale Restructuring	as defined in Preamble (G)
Public Aid	as defined in clause 6.2.5
Purchase Price	as defined in clause 3.1.4

6

Purchase Price Adjustment as defined in para. (c) of Annex 5 (Effective Date Statement/Settlement Payments)

Purchaser	as defined in the Parties section
Purchaser Indemnified Parties	as defined in clause 7.1.1
Q&A Process	as defined in clause 7.4.1
Real Property	as defined in clause 6.2.7(a)
Relevant Tax Proceeding	as defined in clause 8.1
Restricted Area	as defined in clause 10.8.1
Restricted Period	as defined in clause 10.8.1
Securities	as defined in clause 12.1.1
Security Liabilities	as defined in clause 12.1.2
Security Release Period	as defined in clause 12.2.1
Seller	as defined in the Parties section
Seller Parties	as defined in the Parties section
Seller’s Account	as defined in clause 3.4.1(a)
Seller’s Affiliates	as defined in clause 1.3.1
Seller’s Guarantor	as defined in the Parties section
Seller’s Knowledge	as defined in clause 6.4
Share Price	as defined in clause 3.1.1
Shares	as defined in clause 1.1.3
Signing Date	as defined in Preamble (E)
Straddle Period	as defined in clause 8.1
Target Net Working Capital	as defined in Annex 3.1.2 (Cash, Debt and Net Working Capital)
Tax Acknowledgement Notice	as defined in clause 8.6.2
Tax Allocation Agreement	as defined in clause 6.2.10(e)
Tax Authority	as defined in clause 8.1
Tax Benefit	as defined in clause 8.1
Tax Firm	as defined in clause 8.6.3
Tax Formal Notice	as defined in clause 8.6.3
Tax Indemnification Claim	as defined in clause 8.2.1
Tax Indemnification Due Date	as defined in clause 8.2.1(e)(i)
Tax Matters	as defined in clause 6.2.10
Tax Proceeding	as defined in clause 8.1
Tax Refund	as defined in clause 8.1
Tax Return	as defined in clause 8.1
Tax(es)	as defined in clause 8.1
Threshold	as defined in clause 7.2
Tooling Losses	as defined in Annex 3.1.2 (Cash, Debt and Net Working Capital)
Tower Asia	as defined in clause 10.3.5(a)(i)

7

Tower Asia Group	as defined in clause 10.3.5(a)(i)
Tower Designations	as defined in clause 10.5.2
Tower Europe Group	as defined in clause 1.2.2
Tower Holdings Europe	as defined in clause 1.1.1
Tower International Group	as defined in Preamble (A)
Transaction	as defined in Preamble (F)
Transaction Expenses	as defined in clause 10.3.4(b)(ix)

Unaudited Financial Statements as defined in para. (a) of Annex 5 (Effective Date Statement/Settlement Payments)

US GAAP	means United States generally accepted accounting principles and practices in effect from time to time
VAT	as defined in clause 8.1
Zwickau Complaints	as defined in clause 7.10
Zwickau Costs	as defined in clause 7.10
Zwickau Facility	as defined in clause 7.10

8

Annexes referred to in this agreement

Annex	Description
Annex (A)	Data Room USB
Annex (G)	Pre-Sale Restructuring
Annex 1.2.1	Majority Entities
Annex 1.3.1	Cash Pooling Agreement
Annex 2.1.2	Copy of Company’s consent regarding sale and assignment of Intercompany Loan
Annex 2.3	Debt Financing Agreements
Annex 2.4.1	Copies of Board Approvals
Annex 2.4.2	Copy of Shareholder's Resolution regarding approval of sale and transfer of Shares

Annex 3.1.2 Cash, Debt and Net Working Capital

Annex 3.3.1	Leakage Certificate
Annex 4.4.1(d)	Power of Attorney for Deed of Transfer; Deed of Transfer
Annex 4.4.1(f)(i)	Resignation Letters
Annex 4.4.1(j)	Closing Memorandum
Annex 4.4.3	Notary Letter

Annex 5 Effective Date Statement/Settlement Payments

Annex 6.2.1(a)	List of Articles of Association (or equivalent documents) of the Group Companies
Annex 6.2.3(a)	Financial Information
Annex 6.2.6(a)	Collective Bargaining Agreements
Annex 6.2.6(b)	Key Employees
Annex 6.2.6(c)	Labor Disputes
Annex 6.2.7(a)	List of Real Property
Annex 6.2.7(c)	Real Property notice or claim
Annex 6.2.9	Deviations from Ordinary Course of Business of Group Companies
Annex 6.2.11	Material Contracts

9

Annex 6.2.12	Major customers
Annex 10.3.2(o)	Third-Party Financing Agreements
Annex 10.3.3	Negative Pledge Certificate
Annex 10.3.4(c)(ii)	Permitted Leakage
Annex 10.3.5(a)(i)	Tower Asia Group
Annex 10.10	2018 Capex Budget
Annex 11.1.1	Intra-Group Agreements
Annex 11.2.3	IT TSA
Annex 12.1.1	List of Securities
Annex 13.1.1	Press release

10

Agreement on the sale and purchase  

of all shares in Tower Automotive Holdings Europe B.V.

Parties:

(5) Tower Automotive Holdings III Coöperatie U.A., a cooperative incorporated under the laws of the Netherlands with registered seat in Baarn, the Netherlands, and address at Herikerbergweg 124, Luna ArenA, 1101 CM Amsterdam, the Netherlands, and registered with the Chamber of Commerce (Kamer van Koophandel) under registration number 32124774 (the Seller);

(6) Tower Automotive Holdings USA, LLC, a limited liability company incorporated under the laws of the State of Delaware, United States of America, and registered under trade register number 26-0459108 (the Loan Seller);

(7) Financière SNOP Dunois S.A., a société anonyme incorporated under the laws of France with registered seat in avenue d’Auvergne, 43100 Brioude, France, and registered with the Trade and Companies Register of le Puy en Velay under registration number 381 904 382 (the Purchaser);

(the Seller, the Loan Seller and the Purchaser together, the Parties, and each of them, a Party); and

(8) Tower International, Inc., a corporation under the laws of the State of Delaware with registered seat in 17672 North Laurel Park Drive, Suite 400E, Livonia, MI 48152, United States of America, and registered with the Secretary of State of Delaware under registration number 27-3679414 (the Seller’s Guarantor);

(the Seller, the Loan Seller and the Seller’s Guarantor together, the Seller Parties, and each of them, a Seller Party).

Whereas:

(A) The Seller is an indirect wholly owned subsidiary of the Seller’s Guarantor. The Seller’s Guarantor and its subsidiaries (together, the Tower International Group) are leading global suppliers of engineered automotive structural metal components and assemblies to original equipment manufacturers. The European operations of Tower International Group supply the automotive industry with body-structure stampings, class A stampings, hot-formed structures and complex welded assemblies (the Business). The Seller is a holding company within the Tower International Group.

11

(B) The Purchaser is a leading global supplier to the automotive industry with administrative seat in Villepinte, France. The Purchaser is active in the field of, inter alia, designing and manufacturing interior and engine compartment parts and automatic presses.

(C) On 5 and 23 October 2018, the Purchaser issued, respectively, an initial and a revised non-binding letter of intent expressing its interest in purchasing all shares in the Company.

(D) On 20 November 2018, the Parties entered into a memorandum of understanding to grant the Purchaser the opportunity to inform and consult its European works council (comité d’entreprise européen) in connection with the Transaction, following which, on the same date, the Seller’s Guarantor publicly announced the Transaction (the Announcement Date).

(E) Prior to the date of this agreement (the Signing Date), the Purchaser has informed and consulted its European works council and its positive opinion was obtained on 28 November 2018.

(F) The Seller intends to sell to the Purchaser all shares in the Company, and the Purchaser intends to purchase these shares, at a price, under the terms and subject to the conditions set forth in this agreement (the Transaction).

(G) On or prior to the Effective Date, the Seller intends to implement a pre-sale restructuring, through which the Tower Asia Group (as defined below) will be carved-out from the group of companies currently held by the Seller (the Pre-Sale Restructuring). Further details of the Pre-Sale Restructuring are attached to this agreement as Annex (G).

(H) On 1 October 2017, the Loan Seller and the Company entered into the Third Amended and Restated Intercompany Loan Agreement with a nominal amount of USD 178,144,689.41 (in words: one hundred seventy-eight million, one hundred forty-four thousand, six hundred eighty-nine US dollars and forty-one cents) as per 31 December 2018, with the Company as borrower and the Loan Seller as lender (any rights and claims of the lender thereunder the Intercompany Loan). The Loan Seller intends to sell and transfer the Intercompany Loan to the Purchaser.

12

(I) The Seller’s Guarantor has agreed to guarantee, for the benefit of the Purchaser, the full, due and punctual performance by the Seller and the Loan Seller of their respective obligations under this agreement.

It is agreed:

1. Corporate structure

1.1 Tower Automotive Holdings Europe B.V.

1.1.1 Tower Automotive Holdings Europe B.V. (Tower Holdings Europe or the Company) is a limited liability company incorporated under the laws of the Netherlands with registered seat in Baarn, the Netherlands, and registered with the Chamber of Commerce (Kamer van Koophandel) under registration number 32125032. The Company is the holding company of Tower International Group’s European operations.

1.1.2 The registered share capital (Geplaatst kapitaal) of Tower Holdings Europe amounts to EUR 18,000.00 (in words: eighteen thousand euros) and is divided into 18,000 (in words: eighteen thousand) shares in the nominal value of EUR 1 (in words: one euro) each, held by the Seller.

1.1.3 In this agreement, all shares the Seller holds in the Company are collectively referred to as the Shares, regardless of whether number, nominal amounts and consecutive numbering of the shares or the registered share capital of Tower Holdings Europe correspond to the aforementioned details.

1.2 Group Companies

1.2.1 The Company holds, directly or indirectly, the majority of the voting rights in, or otherwise controls within the meaning of sec. 290 para. 2 or para. 3 of the German Commercial Code (HGB), the entities listed in Annex 1.2.1 (the Majority Entities). The Company does not hold, directly or indirectly, minority participations in any entities.

1.2.2 The Majority Entities and the Company are collectively also referred to as the Group Companies or as the Tower Europe Group, and the shares in these entities as the Group Companies’ Shares.

13

1.3 Cash pooling agreements; shareholder financing

1.3.1 As of the Effective Date, only the Cash Pooling Agreement listed in Annex 1.3.1 (Cash Pooling Agreement) will exist within the group formed by the Company, and there will be no cash pooling agreements between the Seller and its affiliated companies within the meaning of sec. 15 et. seqq. of the German Stock Corporation Act (AktG) (except for the Group Companies) (the Seller’s Affiliates) on the one hand, and any of the Group Companies on the other hand (the Cash Pooling Agreement). The participation of Tower Asia, Tower Automotive International Holdings B.V. and Tower Automotive Holdings VI B.V. in the Cash Pooling Agreement will be terminated with effect as of the Effective Date at the latest. Any balance under their participation in the Cash Pooling Agreement shall be settled between the respective parties on the Closing Date at the latest (the Cash Pooling Agreement Liabilities).

1.3.2 Other than the Cash Pooling Agreement and the Intercompany Loan, at Closing there will be no further loan agreements between the Seller and the Seller’s Affiliates (other than the Group Companies) on the one hand and the Group Companies on the other hand.

1.4 Effective Date

For the purposes of this agreement, the Effective Date shall mean 31 December 2018, 24:00 hours (Central European Time).

2. Sale of the Shares; condition precedent; approvals

2.1 Sale of the Shares and the Intercompany Loan; right to profits

2.1.1 Upon the terms and subject to the conditions set out in this agreement, the Seller hereby sells (verkauft), and the Purchaser hereby purchases (kauft), the Shares with any and all rights associated with or otherwise pertaining to them, including, without limitation, the right to receive dividends for any fiscal year prior to the Closing Date to the extent such dividends have not been distributed to the Seller (or any then current shareholder(s)) prior to the Effective Date.

2.1.2 Upon the terms and subject to the conditions set out in this agreement, the Loan Seller hereby sells (verkauft), and the Purchaser hereby purchases (kauft), any claims, other rights and any obligations arising from or in connection with the Intercompany Loan. The Company has irrevocably consented to the sale and assignment of the claims, other rights and any obligations arising from or in connection with the Intercompany Loan. A copy of such declaration of consent is attached hereto as Annex 2.1.2 (Copy of Company’s consent regarding sale and assignment of Intercompany Loan).

14

2.1.3 Subject to the terms and conditions of this agreement, the Shares shall be transferred to the Purchaser with economic effect (mit wirtschaftlicher Wirkung) as of the expiry of the Effective Date, notwithstanding that (i) legal title to the Shares and the Intercompany Loan shall only be transferred to the Purchaser with in rem effect (mit dinglicher Wirkung) by separate Deed of Transfer (as set forth in clause 4.4.1(d)) and Assignment Agreement (as set forth in clause 4.4.1(g)) and that (ii) specific terms and conditions of this agreement may stipulate a risk distribution between the Seller and the Purchaser with economic effect before or after the Effective Date.

2.2 Condition precedent

The transfer of the Shares and the assignment of the Intercompany Loan each with in rem effect shall be subject to the condition precedent (aufschiebend bedingt) of (i) the Closing Conditions being fulfilled or waived, as applicable, and (ii) the Estimated Purchase Price having been paid to the Seller and the Loan Seller by the Notary pursuant to clause 4.4.2(a) below.

2.3 Debt Financing Agreements

Each of the Seller and the Loan Seller has received from the Purchaser executed copies of the binding and fully documented debt financing agreements dated 19 November 2018 pursuant to which the lenders named therein (Debt Financing Sources) have committed, subject to the terms and conditions set forth therein, to lend the amounts set forth therein for the purposes of financing the transactions contemplated by this Agreement and related fees and expenses (the Debt Financing) and attached hereto as Annex 2.3 (the Debt Financing Agreements).

2.4 Approvals; Approval by the Company

2.4.1 The boards of the Seller, the Loan Seller and the Purchaser, as well as the board of the Seller’s Guarantor, have approved this agreement and the transactions contemplated hereby. Copies of such approvals are attached hereto as Annex 2.4.1 (Copies of Board Approvals).

15

2.4.2 A copy of the resolution of the shareholder of the Company approving the sale and transfer of the Shares to the Purchaser is attached hereto as Annex 2.4.2 (Copy of Shareholder’s Resolution regarding approval of sale and transfer of Shares).

3. Purchase Price; conditions of payment

3.1 Purchase Price

3.1.1 The price to be paid by the Purchaser to the Seller for the sale and transfer of the Shares shall be the amount resulting from the following calculation:

(a) an amount equal to EUR 255,000,000 (in words: two hundred fifty-five million euros) (the Enterprise Value);

plus

(b) an amount equal to Cash;

minus

(c) an amount equal to Debt (which includes, for the avoidance of doubt, an amount equal to the Loan Price);

plus

(d) if the Net Working Capital exceeds the Target Net Working Capital, the amount by which the Net Working Capital exceeds the Target Net Working Capital;

minus

(e) if the Net Working Capital falls short of the Target Net Working Capital, the amount by which the Net Working Capital falls short of the Target Net Working Capital;

as determined in accordance with this clause 3 and Annex 5 (Effective Date Statement/Settlement Payments) (the Share Price).

16

3.1.2 For purposes of clause 3.1.1 and throughout this agreement, items of Cash, Debt, Net Working Capital and Target Net Working Capital shall be determined in accordance with Annex 3.1.2 (Cash, Debt and Net Working Capital) (taking into account the accompanying narrative).

3.1.3 The price to be paid by the Purchaser to the Loan Seller for the Intercompany Loan (the Loan Price) shall be the nominal value of the outstanding claims of the Loan Seller under the Intercompany Loan as of the Closing Date, including any interest accrued thereunder until and including the Closing Date. The U.S. dollar currency Loan Price shall be converted into euros at the spot rate of exchange for euros as published on the website of the European Central Bank on the fifth (5^th) Business Day before the Closing Date.

3.1.4 The aggregate of the Share Price, as reduced by, as the case may be, the Capex Shortfall Amount and the Compensatory Amount in accordance with the provisions of clause 3.2.2 and Annex 5 (Effective Date Statement/Settlement Payments) and the Loan Price, shall be referred to as the Purchase Price.

3.2 Due date of Estimated Purchase Price; reductions to Estimated Purchase Price

3.2.1 The Estimated Purchase Price shall be due and payable by the Purchaser in accordance with the terms set out in this clause 3, clause 4.4.1 and Annex 5 (Effective Date Statement/Settlement Payments).

3.2.2 The Estimated Purchase Price shall be reduced by, as the case may be, (i) the Capex Shortfall Amount in accordance with clause 10.10, and (ii) the Compensatory Amount in accordance with clause 3.3, if any, provided that in case the Parties disagree on the Capex Shortfall Amount or the Compensatory Amount to be deducted from the Estimated Purchase Price, Purchaser’s payment on the Closing Date shall be determined on the basis of the Capex Shortfall Amount stated in the Unaudited Financial Statements and the Compensatory Amount mentioned in the Leakage Certificate, and the final determination of the Capex Shortfall Amount and the Compensatory Amount, as the case may be, shall be made after Closing in accordance with the provisions of para. (f) of Annex 5 (Effective Date Statement/Settlement Payments) applied mutatis mutandis.

17

3.2.3 For the avoidance of doubt, the Parties agree that all Transaction Expenses, if any, incurred by the Group Companies and unpaid as of the Effective Date, shall be the sole and exclusive responsibility of the Seller and the Seller’s Guarantor, and the Purchaser and the Group Companies shall incur no liability whatsoever in respect thereto. In case transaction bonuses and other types of compensation are to be paid by the Seller or any of the Seller’s Affiliates following the Closing Date to management or employees of the Group Companies, the Purchaser shall cause the Group Companies to facilitate such payment through the Group Companies’ payrolls, provided that the Purchase Price shall be reduced by any Damages and Taxes which may have been suffered or incurred by any of them as a result of such payments by way of a post Closing payment from the Seller or the Seller’s Guarantor to the Purchaser, to be made within five (5) Business Days after the respective payments to management or employees of the Group Companies have been made.

3.3 Seller’s payment for Leakage

3.3.1 The Seller shall on the Closing Date deliver to the Purchaser a Leakage certificate in the form attached as Annex 3.3.1 (Leakage Certificate) signed by a duly authorized representative of the Seller (the Leakage Certificate) confirming that as of the Closing Date, other than as may be indicated in the Leakage Certificate, there has been no Leakage between the Effective Date and the Closing Date or, to the extent there has been any Leakage between the Effective Date and the Closing Date, confirming the nature and amount of such Leakage. The amount of the Leakages mentioned in the Leakage Certificate (the Compensatory Amount) shall be deducted from the Estimated Purchase Price in accordance with the provisions of clause 3.2.2. For the avoidance of doubt, the delivery by the Seller of the Leakage Certificate does not constitute a limitation of the liability of the Seller under this agreement.

3.3.2 The Seller undertakes to the Purchaser that, if there is any such breach of clause 10.3.4 (No Leakage) other than properly specified and evaluated in the Leakage Certificate and deducted from the Estimated Purchase Price in accordance with the provisions of clause 3.2.2, the Seller shall pay, or procure the payment in cash to the Purchaser or, if the Purchaser so directs, to the Company of the Compensatory Amount for such Leakage. The Compensatory Amount shall be treated as a reduction of the Purchase Price.

3.3.3 For the avoidance of doubt, none of the limitations set forth in clause 7.2 and clause 7.3 shall apply to any liability of the Seller due under this clause 3.3.

18

3.4 Conditions of payment

3.4.1 Unless otherwise provided in this agreement, all payments owed to the Seller and the Loan Seller under this agreement, with the exception of, for the avoidance of doubt, payment of the Estimated Purchase Price by the Purchaser in accordance with clause 3.2 and clause 4.4.1(a), shall be made by wire transfer – to be credited on the same day – to the following accounts:

(a) payments owed to the Seller shall be made to the Seller’s account: IBAN XXXXXXXXXXXXXXXXXX at Citibank (BIC CITIGB2L) (the Seller’s Account);

(b) payments owed to the Loan Seller shall be made to the Loan Seller’s account: IBAN  XXXXXXXXXXXXXXXXXX at Citibank (BIC CITIGB2L) (the Loan Seller’s Account).

Any costs and charges relating to the wire transfer shall be borne by the Purchaser.

3.4.2 Unless otherwise provided in this agreement, all payments owed to the Purchaser under this agreement shall be made by wire transfer – to be credited on the same day – to the following Purchaser’s account: IBAN XXXXXXXXXXXXXXXXXX at BNP Paribas bank (BIC BNPAFRPPAEA). Any costs and charges relating to the wire transfer shall be borne by the Seller.

3.5 No set-off

Any right of the Purchaser to set-off and/or to withhold any payments due to the Seller and/or the Loan Seller under this agreement is hereby expressly waived and excluded, except for Claims which are undisputed or the subject matter of a final, binding and un-appealable judgment by a competent court or arbitral tribunal.

4. Closing Date; rescission right; Closing actions

4.1 Closing; Closing Date

The consummation of the transactions contemplated by this agreement (the Closing) shall take place at the offices of De Brauw Blackstone Westbroek N.V. in Amsterdam, five (5) Business Days after the date on which the Closing Conditions set forth in clause 4.2.1 below has been fulfilled or waived, or at any other time or place which the Seller and the Purchaser will mutually agree upon (such date, the Closing Date).

19

4.2 Closing Condition

4.2.1 The obligations of the Parties to carry out the Closing shall be subject to the satisfaction of the conditions (the Closing Conditions) that:

(a) the European Commission or each of the relevant national competition authorities in Czech Republic, Germany, Poland and Slovakia has cleared the acquisition of the Shares by the Purchaser. This Closing Condition shall be deemed satisfied if:

(i) the European Commission is competent to examine the Transaction according to article 4 para. 5 of the European Union Merger Regulation (EUMR) and has declared the Transaction compatible with the Common Market pursuant to article 6 para. 1 lit. b or article 8 para. 1 or 2 of the EUMR; or

(ii) in the event where at least one (1) member state of the European Union (Member State) has expressed its disagreement as regards the request to refer the case to the European Commission according to article 4 para. 5 of the EUMR, each of the relevant national competition authorities in Czech Republic, Germany, Poland and Slovakia has cleared or are deemed to have cleared the Transaction; or

(iii) the Transaction is deemed to be compatible with the Common Market pursuant to article 10 para. 6 of the EUMR since the European Commission has (i) neither made a decision pursuant to article 6 para. 1 of the EUMR within the time limits set forth in article 10 para. 1 or 3 of the EUMR, (ii) nor made a decision pursuant to article 8 para. 1, 2, or 3 of the EUMR within the time limits set forth in article 10 para. 3 of the EUMR; or

(iv) (A) the European Commission has decided pursuant to article 9 para. 3 of the EUMR or article 4 para. 4 of the EUMR to refer the case, in full or in part, to the competent authorities of the relevant Member State or the European Commission is deemed to have made such referral pursuant to article 9 para. 5 of the EUMR or article 4 para. 4 subpara. 4 of the EUMR and (B) the European Commission has made or is deemed to have made a decision as described in para. (i) or (iii) of this clause 4.2.1(a) concerning that part of the case not referred or not deemed to have been referred as described in (A) of this clause 4.2.1(a)(iv), and, (C) as concerns that part of the case that has been or is deemed to have been referred to a Member State as described in (A) of this clause 4.2.1(a)(iv), the proposed concentration has been cleared by the competent Member State authority or is deemed to have been cleared under the applicable national merger control provisions.

20

(b) there shall be no breach of the Seller’s guarantees set out in clause 6.2.1 (Corporate matters, authority and valid obligations) which would, individually or in the aggregate, reasonably be expected to have a material adverse effect on the Group Companies, taken as a whole;

it being specified that the Closing Condition (b) is for the sole benefit of the Purchaser which may (to the extent permitted by law) waive it, in whole or in part, by written notice to the Seller.

4.2.2 Each Party shall notify the respective other Party immediately when learning that the Closing Condition set out in clause 4.2.1(a) has been fulfilled.

4.3 Rescission Right

4.3.1 If the Closing Condition pursuant to clause 4.2.1 above has not been satisfied by (and including) 30 June 2019 (the Long Stop Date), each of the Seller and the Purchaser shall have the right to rescind (zurücktreten von) this agreement by written notice to the other Party, provided that no Party shall be entitled to terminate this agreement unilaterally on the basis of this clause 4.3.1 whose failure to comply with any covenant or obligation pursuant to this agreement caused the non-fulfilment of the Closing Condition to occur.

4.3.2 If this agreement is rescinded in accordance with clause 4.3.1 or by mutual written consent of the Parties, this agreement shall cease to have force and effect and shall not create any binding obligation between the Parties except that (i) this clause 4.3, clause 0 (Confidentiality and press releases), clause Section 3.1(a) (Seller’s Guarantor and indemnification), clause 16 (Transfer taxes and costs, costs of advisors), clause 17 (Notices) and clause 18 (Miscellaneous) shall remain in force and effect and (ii) no Party shall have any claim under this agreement of any nature whatsoever against the other Party except in respect of any rights and liabilities which have accrued before termination or pursuant to any of the surviving clauses set forth in (i).

21

4.4 Actions on and after the Closing Date

4.4.1 At the Closing, the Parties shall, in the sequence set out below, take the following actions (the Closing Actions):

(a) On the Business Day immediately before the Closing Date, the Purchaser shall pay an amount equal to the Estimated Purchase Price minus the Capex Shortfall Amount (if any) and the Compensatory Amount (if any), into the notarial third-party account in the name of De Brauw Blackstone Westbroek N.V. and with the account number set out in the Notary Letter (the Notary Account), with reference to “Project Atlas”. Such amount due (A) must be credited to the Notary Account on the Business Day immediately before the Closing Date and with value of that date and (B) shall be held by the civil law notary Mr. M.G. Rebergen or any other civil law notary of De Brauw Blackstone Westbroek N.V., or such notary’s substitute (the Notary), and paid out from the Notary Account as set out further below.

(b) On the Closing Date, the Notary shall, by not later than 10:00 a.m. CET, confirm to the Parties and the Seller’s Guarantor in writing that an amount equal to the Estimated Purchase Price minus the Capex Shortfall Amount (if any) and the Compensatory Amount (if any) has been received into the Notary Account.

(c) Thereafter, the Seller or the respective Seller’s Affiliates on the one hand and the respective Company on the other hand shall enter into the IT TSA and, as the case may be, the Engineering Services Agreement.

(d) Thereafter, executed, and to the extent required by the Notary compliant with any additional requirements, powers of attorney substantially in the form attached hereto as Annex 4.4.1(d) (Power of Attorney for Deed of Transfer; Deed of Transfer) (each such power of attorney a Power of Attorney) shall be delivered to the Notary by each of the Seller, the Purchaser and the Company, thereby authorizing the Notary to execute, on their behalf, the notarial deed of transfer of the Shares, substantially in the form attached hereto as Annex 4.4.1(d) (Power of Attorney for Deed of Transfer; Deed of Transfer) (the Deed of Transfer).

(e) Immediately thereafter, the Seller shall deliver to the Notary the original shareholders register of the Company.

(f) Immediately thereafter, the Seller shall deliver to the Purchaser:

22

(i) duly executed resignation letters, effective at the execution of the Deed of Transfer, of Dennis C. Pike and Jeffrey L. Kersten as members of the management board of the Company in the form set out in Annex 4.4.1(f)(i) (Resignation Letters);

(ii) a duly executed written resolution of the general meeting of the Company to grant full discharge to Robert M. Forterie, Dennis C. Pike, Jeffrey L. Kersten and Timo J. van Rijn as members of the management board of the Company effective as per the execution of the Deed of Transfer;

(iii) one (1) original copy of a certificate signed by the Seller, bearing the date of the Closing Date, stating that the Closing Condition set out in clause 4.2.1(b) is satisfied;

(iv) all books and records of the Company to the extent they are not already in its possession or under its control, except where such delivery would conflict with statutory retention obligations under applicable law and provided that the Seller shall have the right to retain copies of such books and records; and

(v) one (1) duly signed original copy of the Leakage Certificate.

(g) Immediately thereafter, the Loan Seller shall assign the Intercompany Loan to the Purchaser by means of execution of an assignment agreement in respect of the Intercompany Loan (the Assignment Agreement).

(h) Thereafter, the Seller shall transfer the Shares to the Purchaser by means of execution of the Deed of Transfer by the Notary on behalf of the Seller, the Purchaser and the Company.

(i) Thereafter, the Notary shall update the shareholders register of the Company to reflect the transfer of the Shares by the Seller to the Purchaser.

23

(j) Finally, after all Closing Actions have been performed, the Parties shall execute (at least in duplicate) a closing memorandum substantially in the form attached hereto as Annex 4.4.1(j) (Closing Memorandum) (the Closing Memorandum), confirming the satisfaction or waiver, as the case may be, of the Closing Conditions and the performance of the Closing Actions (subject only to the payment of the Estimated Purchase Price to the Seller and the Loan Seller and the further actions by the Notary as set out in clause 4.4.2 below). For the avoidance of doubt, the legal effect of the Closing Memorandum shall be limited to serving as evidence that all Closing Conditions have been satisfied or waived and all Closing Actions have been performed and that the Closing has occurred, but the execution of the Closing Memorandum shall not limit or prejudice the rights of the Parties arising under this agreement or under applicable law.

4.4.2 By not later than 2:00 p.m. CET on the first Business Day following the Closing, the Notary shall:

(a) pay the Estimated Purchase Price as reduced, as the case may be, by the Capex Shortfall Amount and the Compensatory Amount as set forth in the Final Estimated Statement, to the Seller into the Seller’s Account and to the Loan Seller into the Loan Seller’s Account;

(b) shall confirm to the Parties in writing that such aforementioned amounts have been paid into the Seller’s Account and the Loan Seller’s Account;

(c) attach such confirmation to the Closing Memorandum and provide authenticated copies of the Closing Memorandum with such attachment to each of the Parties;

whereby, for the avoidance of doubt, the actions of the Notary set out in this clause 4.4.2 shall not be subject to any (pre-)conditions whatsoever, other than the Notary having performed the required insolvency checks in respect of the Seller and having assured himself, prior to making the payment under clause 4.4.2(a) above into the Seller’s Account and into the Loan Seller’s Account, that the actions required for transfer as set out in the Notary Letter have been taken.

4.4.3 Further details of the notarial process set out in clauses 4.4.1 and 4.4.2 above are set out in the draft notarial letter attached to this agreement as Annex 4.4.3 (Notary Letter) (the Notary Letter). As soon as reasonably practicable after the Signing Date and no later than two (2) Business Days before the consummation of the transactions is envisaged to take place pursuant to clause 4.1 above, the Parties shall finalize the Notary Letter to confirm the flow of funds at Closing. On or one (1) Business Day prior to the Closing Date, the Parties shall, and the Purchaser shall procure that its financing bank(s) shall, execute the Notary Letter. The Notary Letter shall, where inconsistencies arise with this agreement, have precedence over this agreement.

24

5. Effective Date Statement/Settlement Payments

The Parties shall determine the final Purchase Price, and settle any difference between the Estimated Purchase Price and the final Purchase Price, in accordance with the principles and procedures set forth in clause 3.2.2, clause 3.3 and Annex 5 (Effective Date Statement/Settlement Payments).

6. Seller Parties’ guarantees

6.1 Form and scope of the guarantees

The Seller and, with regard to clauses 6.2.1(c), (d), (e), (f), (g), the Loan Seller and the Seller’s Guarantor and, with regard to clause 6.2.2 below, the Loan Seller only, and, with regard to clause 6.2.3(d), the Seller’s Guarantor only, hereby guarantee to the Purchaser, subject to the requirements and limitations provided for in clause 7 (Remedies for breach by Seller or Loan Seller) below or otherwise in this agreement, by way of an independent promise of guarantee (selbständiges Garantieversprechen) within the meaning of sec. 311 para. 1 of the German Civil Code (BGB) that the following statements are true and correct as of the Announcement Date, and, unless explicitly provided otherwise in this clause 6, on the Signing Date and on the Closing Date. The Parties agree and explicitly confirm that the guarantees in this clause 6 shall neither be qualified and construed as quality guarantees concerning the object of the purchase (Garantien für die Beschaffenheit der Sache) within the meaning of sec. 443, 444 of the BGB nor as quality agreements (Beschaffenheitsvereinbarungen) within the meaning of sec. 434 para. 1 sentence 1 of the BGB and that sec. 444 of the BGB (with respect to its provisions regarding quality guarantees concerning the object of the purchase (Garantien für die Beschaffenheit der Sache)) shall not and does not apply to the guarantees contained herein.

6.2 Guarantees

6.2.1 Corporate matters, authority and valid obligations

(a) The statements in clause 1 (Corporate structure) regarding each of the Group Companies are true and correct. Each of the Group Companies has been duly incorporated and is validly existing under the laws of their respective jurisdictions. Annex 6.2.1(a) (List of Articles of Association (or equivalent documents) of the Group Companies) contains a correct list of the current articles of association (or equivalent documents) of each of the Group Companies.

25

(b) The Group Companies’ Shares have been validly issued, are fully paid in, either in cash or in kind, and have not been repaid. They are free from any encumbrances or other rights of third-parties. The Group Companies’ Shares constitute the whole of the issued share capital and voting rights of the respective Group Companies and none of the Group Companies has approved any resolution to issue any other securities or shares in any of the Group Companies. There are no pre-emptive rights, options, voting arrangements or other rights of third-parties (exercisable now or in the future and whether contingent or not) to acquire or call for the issue of any of the Group Companies’ Shares, in each case except under statutory law or under the articles of association or equivalent documents or the agreements listed in Annex 6.2.1(a) (List of Articles of Association (or equivalent documents) of the Group Companies).

(c) Each of the Seller Parties has been duly incorporated and is validly existing under the laws of the jurisdiction of its organization.

(d) The execution and performance by each of the Seller Parties of this agreement and the consummation of the transactions contemplated by this agreement are within the corporate powers of each of them and have been duly authorized by all necessary corporate action on part of the Seller Parties. Clause 2.4.1 shall remain unaffected. No authorization or consent by a governmental entity or other third-party is required to be made or obtained by any of the Seller Parties (and not also by the Purchaser) prior to the Closing in connection with (i) the entering into of this agreement, (ii) the performance of their respective obligations hereunder or (iii) the consummation of any of the transactions contemplated by this agreement.

(e) The execution and performance by each of the Seller Parties of this agreement and the consummation of the transactions contemplated by this agreement do not (i) violate their respective articles of association or by-laws, (ii) violate, subject to the fulfillment of the Closing Condition set out in clause 4.2.1(a) above, any applicable law, regulation, judgment, injunction or order binding on the Seller Parties. There is no action, law suit, investigation or proceeding pending against, or to the Seller’s Knowledge threatened against, the Seller Parties before any court, arbitration panel or administrative authority which in any manner challenges or seeks to prevent, alter or delay the transactions contemplated by this agreement.

26

(f) None of the Seller Parties and none of the Group Companies is insolvent or, to the Seller’s Knowledge, subject to any bankruptcy, insolvency or equivalent proceedings. With respect to any of the Seller Parties and Group Companies, no circumstances exist which would require an application for any bankruptcy, insolvency or equivalent proceedings in other jurisdictions, nor do any circumstances exist according to any applicable bankruptcy or insolvency laws which would justify the avoidance of this agreement.

(g) This agreement has been duly executed by each of the Seller Parties and, once signed, this agreement will constitute legal, valid and binding obligations of the Seller Parties, enforceable against each of them in accordance with its terms.

6.2.2 Intercompany Loan

The Loan Seller is the sole holder of the Intercompany Loan.

6.2.3 Financial Information

(a) The Seller has delivered to the Purchaser certain financial information out of the Tower International Group’s internal management information system as attached hereto as Annex 6.2.3(a) (Financial Information) (the Financial Information).

(b) The Financial Information and the Unaudited Financial Statements, as of the date on which the respective information was or will be created prior to the Closing Date, as the case may be, (i) are or will be derived from and are or will be consistent in all material respects with the books and records of the Group Companies and has or will have been prepared in all material respects in compliance with the internal control procedures of the Group Companies as set forth in Annex 6.2.3(a), (Financial Information) and (ii) are or will be prepared in accordance with a standard that give a true and fair view of the consolidated financial condition, cash flows, results of operations and change in shareholders’ equity of the Group Companies, in each case as of the dates thereof and for the periods referred to therein, in compliance with US GAAP.

27

(c) On the Announcement Date, there are no off-balance-sheet commitments as would have to be disclosed in US GAAP financial statements, attributable to the Group Companies which would, individually or in the aggregate, reasonably be expected to have a material adverse effect on the financial condition or results of operations of the Group Companies, taken as a whole.

(d) The Seller’s Guarantor maintains a system of internal accounting controls as described in its Form 10-K for the fiscal year 2017 which shall apply to the Group Companies.

6.2.4 Compliance with laws and permits

(a) To the Seller’s Knowledge, each of the Group Companies holds, and is in compliance with, all material permits, authorizations and licenses which are required, if any, under applicable public laws (öffentliches Recht) in order to conduct its business as presently conducted in all material respects. To the Seller’s Knowledge, such permits, authorizations and licenses are in full force and effect and there are, as of the Announcement Date, no implications or threats of any revocation or restriction or subsequent orders (nachträgliche Anordnungen) relating to any of them which would, individually or in the aggregate, reasonably be likely to materially affect the respective businesses of the Group Companies after the Closing Date.

(b) The Seller’s Guarantor has instituted policies and procedures designed to ensure compliance by the Group Companies with the US Foreign Corrupt Practices Act of 1977, as amended (Anti-Bribery Law). To the Seller’s Knowledge, the Group Companies have complied in all material respects with such procedures and none of the Group Companies nor any persons acting on behalf of any of the Group Companies has committed a violation of any Anti-Bribery Law.

28

6.2.5 Public Aid

To the Seller’s Knowledge, none of Tower Automotive Holding GmbH and Tower Automotive Presswerk Zwickau GmbH is in breach or default under the terms and conditions of the public aid granted by Sächsische AufbauBank – Förderbank on 25 February 2014 under the joint scheme for improving regional economic structures (Gemeinschaftsaufgabe “Verbesserung der regionalen Wirtschaftsstruktur”) (the Public Aid) which would entitle Sächsische AufbauBank – Förderbank to withdraw the Public Aid, including, but not limited to: (x) the plan to expand the Tower Automotive Presswerk Zwickau GmbH facility (including the acquisition of new forming technology and the creation of fifty-seven (57) permanent employment positions and one (1) trainee position) has been implemented prior to 13 March 2016, (y) the Public Aid has not been received due to fraud, threat, bribery or materially incorrect or incomplete information, and (z) the new forming technology is still used and there are at least four hundred and four (404) permanent employee and nine (9) trainee positions at the Tower Automotive Presswerk Zwickau GmbH facility. To the Seller’s Knowledge, Sächsische AufbauBank – Förderbank has not threatened in writing to withdraw the Public Aid and the consummation of the Closing will not trigger the withdrawal of the Public Aid or the amendment or acceleration of any material provision under the terms and conditions of the Public Aid, including, for the avoidance of doubt, as a result of the direct and indirect change of control of the Group Companies.

6.2.6 Employment matters

(a) To the Seller’s Knowledge, Annex 6.2.6(a) (Collective Bargaining Agreements) contains, as of the Announcement Date, a true and correct list of all material collective bargaining agreements and works agreements by which any of the Group Companies, as of the Announcement Date, is bound. A collective bargaining agreement or works agreement shall be “material” for the purposes of this agreement if it triggers direct future financial obligations of EUR 50,000.00 (in words: fifty thousand euros) or more per financial year.

(b) Annex 6.2.6(b) (Key Employees) contains, as of the Announcement Date, a true and correct list of all employees and managing directors of the Group Companies who form part of the so-called European Leadership Team (such employees collectively the Key Employees and each a Key Employee). Except as set forth in Annex 6.2.6(b) (Key Employees), as of the Announcement Date, none of the Key Employees has given notice of termination of his or her employment or is under notice of dismissal or had his or her employment terminated without notice. To the Seller’s Knowledge, no Key Employee communicated in writing his or her intention to terminate his or her employment relationship.

29

(c) Annex 6.2.6(c) (Labor Disputes) contains, as of the Announcement Date, a true and correct list of all pending (rechtshängig) labor disputes with employees and former employees and managing directors with respect to each of the Group Companies and – to the Seller’s Knowledge – labor disputes against the Group Companies which have been threatened in writing, in each case with an (expected) amount in dispute in excess of EUR 50,000.00 (in words: fifty thousand euros). No material claims for remuneration or working time adjustments and no claims under the German Equal Treatment Act (AGG) and similar claims in other jurisdictions exist on the part of employees or former employees.

(d) Each of the Group Companies is in compliance with all applicable labor laws, including notably working time regulations, functioning of employee representation bodies, negotiations with unions, use of temporary workers and contractual relationships with subcontractors, and is not engaged in any unfair labor practices, except where non-compliance with such labor laws is not reasonably likely to have a material adverse impact on the Tower Europe Group as a whole.

6.2.7 Real Property

(a) Annex 6.2.7(a) (List of Real Property) contains a true and correct list of all real property rights equivalent to real property (Grundstücke und grundstücksgleiche Rechte) to which the Group Companies hold title or rights of use (the Real Property).

(b) Any other real property used by the Group Companies but not listed in Annex 6.2.7(a) (List of Real Property) is not material for the nature or extent of the operation of the business of the Group Companies as conducted on the Announcement Date.

(c) Except as set forth in Annex 6.2.7(c) (Real Property notice or claim), no written notice has been received from any governmental entity or any third-party, and there is no claim from any governmental entity or any third-party pending against any of the Group Companies concerning the Real Property, including, but not limited to, the twenty-six (26) buildings and thirty-five (35) items of land recorded as plots of the register “C” with total area of 111,015 m² registered in ownership certificate No. 2921, maintained by the District Office Bratislava, cadastral department, for the district: Malacky, municipality: Malacky, cadastral area: Malacky. There is no outstanding claim, judgment, order, decree, arbitral award or similar decision of a court, tribunal arbitrator or governmental agency materially adversely affecting the Real Property.

30

6.2.8 Litigation

(a) There are no law suits, court actions or similar proceedings before a court of justice, arbitration panel or an administrative authority on the Announcement Date pending (rechtshängig) or, seriously threatened in writing against any of the Group Companies involving an amount in dispute (Streitwert) exceeding EUR 400,000.00 (in words: four hundred thousand euros) in each individual case.

(b) As of the Announcement Date, none of the Group Companies is subject to any judgment, order, decree, arbitral award or decision of a court, tribunal arbitrator or governmental agency which would, individually or in the aggregate, reasonably be expected to have a material adverse effect on the Group Companies, taken as a whole, or that imposes any material limitation on the ability of any of the Group Companies to operate its business as presently conducted.

6.2.9 Ordinary course of business

Except as set forth in Annex 6.2.9 (Deviations from Ordinary Course of Business of Group Companies), as from 1 January 2018 until the Announcement Date, the business operations of the Group Companies have been conducted in the ordinary course of business and substantially in the same manner as before, and none of the actions prohibited by clauses 10.3.2(d) and 10.3.2(e) have taken place.

6.2.10 Taxes

As of the Announcement Date:

(a) all material Tax Returns required to be filed by the Group Companies with any Tax Authority with respect to any Pre-Effective Date Tax have been timely filed;

(b) the Group Companies have timely paid all Pre-Effective Date Taxes shown as payable by them in a valid and enforceable Tax assessment notice issued by a Tax Authority or on a Tax Return regarded as a Tax assessment filed by a Group Company except for Taxes to the extent contested in good faith;

(c) no court proceedings and, as of 15 November 2018 and to the Seller’s Knowledge, no material Tax audits are currently pending or have been threatened in writing with respect to any Pre-Effective Date Tax of the Group Companies or a particular Group Company;

31

(d) there are no rulings or requests for rulings by any Group Company which could materially adversely affect the Taxes of the Group Companies for any period after the Closing Date; and

(e) no agreement the primary focus of which is Taxes was entered into by a Group Company in consequence of which Group Companies are or may be, after the Closing Date, held liable for or to indemnify any person other than a Group Company in respect of any Tax which is primarily or directly chargeable against or attributable to any person other than the Group Companies (the Tax Allocation Agreement).

The abovementioned guarantees are the only ones given in relation to Tax or any related claims, liabilities or other matters (Tax Matters) and no other warranty is given in relation to Tax Matters. For the avoidance of doubt, this does not preclude claims under clause 8 (Tax indemnity).

6.2.11 Material contracts

(a) Annex 6.2.11 (Material Contracts) contains, as of the Announcement Date, a true and correct list of all the contracts, including all amendments or modifications thereto, to which any of the Group Companies is a party that is one of the following types of contracts (collectively, the Material Contracts):

(i) any joint venture, partnership, shareholder or cooperation agreements relating to the Group Companies which are of material importance for the Tower Europe Group as a whole;

(ii) rental and lease agreements which relate to the Real Property;

(iii) license agreements (whether as licensor or licensee) regarding any intellectual property rights or know-how material for the business of the Group Companies (other than license agreements for application software, entered into in the ordinary course of business);

(iv) agreements with distributors, sales agents and other resellers or sales representatives who each account for more than two (2) per cent of the consolidated sales of the Group Companies (based on the Company’s consolidated sales in 2017); and

32

(v) any third-party loan or credit agreement, hedging or swap agreement, security agreement, mortgage, pledge or other contract or instrument evidencing financial indebtedness of any of the Group Companies in excess of EUR 1,000,000.00 (in words: one million euros).

(b) A correct and complete copy of each Material Contract as currently effective has been provided to the Purchaser in the Data Room, to the extent any such incorrectness or incompleteness would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the Group Companies, taken as a whole.

(c) To the Seller’s Knowledge, and except as set forth in Annex 6.2.11 (Material Contracts), none of the Group Companies is bound by a change of control (excluding customer contracts), exclusivity, most-favored nation or any right having a similar effect which would, individually or in the aggregate, reasonably be expected to have a material adverse effect on the Group Companies, taken as a whole.

6.2.12 Major customers

Annex 6.2.12 (Major customers) sets forth as of the Announcement Date a true and correct list of each customer of the Tower Europe Group which contributed more than five per cent (5%) to the Tower Europe Group’s annual revenues in either of the calendar years 2016 and 2017.

6.2.13 Business

To the Seller’s Knowledge, none of the Group Companies is excluded or restricted from manufacturing or developing body-structure stampings, class A stampings, hot-formed structures and complex welded assemblies for third-party customers by exclusivity or non-competition or similar contractual obligations.

6.2.14 Environmental matters

(a) To the Seller’s Knowledge, no property currently owned, occupied or operated by any of the Group Companies (including soils, subsoils, groundwater, surface water, indoor air, buildings or other structures) is contaminated with any substance that is: (i) listed, classified or regulated as hazardous pursuant to any environmental law, any occupational health and safety law or public health law; (ii) any petroleum product or by-product, asbestos-containing material, lead-containing paint, polychlorinated biphenyls, radioactive material or radon; or (iii) any other substance that is the subject of regulatory action by any governmental entity in connection with any environmental law, any occupational health and safety law, or public health law due to its potential hazardousness (Hazardous Substance), and there has been no releases of Hazardous Substances by any of such Group Companies.

33

(b) Seller’s liability under this clause 6.2.14 shall be limited to environmental liabilities relating to Hazardous Substances which are incurred by the Purchaser after the Closing Date arising out of any investigation, monitoring or remediation measures in relation to Hazardous Substances resulting from:

(i) any enforceable order, decree or request issued by a competent governmental authority against the Purchaser; or

(ii) a remediation contract agreed between the Purchaser and any competent governmental authority with the consent of the Seller, such consent not to be unreasonably delayed, conditioned or withheld; or

(iii) any private party claim or notification (including by employees, neighbours or local non-governmental entities); or

(iv) an imminent danger to human health or life or to the environment; or

(v) discovery of Hazardous Substances during the operation of the business of the Group Companies in the ordinary course consistent with past practices of the Seller; or

(vi) any inadvertent discovery of contamination in the course of any customer driven major expansion, repair or maintenance.

(c) Any liability of the Seller under this clause 6.2.14 is excluded if and to the extent that an environmental liability is incurred in connection with (i) any activity after the Closing Date that is not substantially in accordance with past practice, in particular any material change of use or cessation of business operations; or (ii) the coming into force of, or the change in, any laws after the Closing Date.

34

6.3 No other Seller’s guarantees

6.3.1 The Purchaser explicitly acknowledges to purchase and acquire the Shares and the Business associated therewith in the condition they are in on the Announcement Date based upon its own inspection, examination and determination with respect thereto, and to undertake the acquisition based upon its own inspection, examination and determination without reliance upon any express or implied representations, warranties or guarantees of any nature made by the Seller except for the guarantees explicitly given by the Seller under this agreement.

6.3.2 Without limiting the generality of the foregoing, the Purchaser acknowledges that the Seller gives no representation, warranty or guarantee with respect to:

(a) any projections, estimates or budgets delivered or made available to the Purchaser of future revenues, future results of operations (or any component thereof), future cash flows or future financial condition (or any component thereof) or the future business operations of the Group Companies; and

(b) any Tax Matters except as provided for in clause 6.2.10.

6.4 Seller’s Knowledge

In this agreement, the knowledge of the Seller (the Seller’s Knowledge) shall solely encompass the actual knowledge within the scope of their respective responsibility at their employing entity, as of the Announcement Date, of Jeffrey L. Kersten, Pär O. Malmhagen, Nanette Dudek, Andreas Meyer and Gerrit Kotterman.

7. Remedies for breach by Seller or Loan Seller

7.1 General/recoverable damages

7.1.1 In the event of:

(a) any breach of any of the guarantees pursuant to clause 6 (Seller Parties’ guarantees) above; or

(b) any breach by the Seller, the Loan Seller or the Seller’s Guarantor of any of their respective covenants or obligations contained in this agreement (except for covenants or obligations pursuant to clause 8 (Tax indemnity) below);

35

(each, a Breach),

the Seller shall put the Purchaser or, at the request of the Purchaser (but, for the avoidance of doubt, without any of them accruing any rights or claims which they would not already otherwise have out of or in connection with this agreement), any Group Company (the Purchaser Indemnified Parties), into the position such Purchaser Indemnified Parties would have been in had no Breach occurred (restitution in kind – Naturalrestitution). If the Seller is unable to provide restitution in kind within three (3) months after having been notified by the Purchaser of the Breach, the Seller shall pay to the Purchaser the amount of monetary damages (Schadenersatz in Geld) as would be necessary to hold harmless the Purchaser Indemnified Party from and against any and all Damages suffered or incurred by any of them as a result of the Breach. For purposes of this agreement, Damages shall mean all actual damages (including, from the point of view of an objective third-party, foreseeable consequential damages (Folgeschäden) and foreseeable indirect damages, but excluding losses of profits (entgangener Gewinn), internal administration and overhead costs) incurred by the Purchaser Indemnified Parties.

7.1.2 The Seller shall not be liable for, and the Purchaser shall not be entitled to claim for, any Damages of the Purchaser Indemnified Parties under or in connection with this agreement:

(a) if the matter to which the Claim relates is (i) specifically provided for in the Financial Information or in the financial statements for the fiscal year ending on 31 December 2017 of any of the Group Companies and (ii) sufficiently detailed to identify the nature of the corresponding Loss, and up to the amount of such provision;

(b) up to the amount of such Damages that are covered by the proceeds of an insurance policy actually received by the Purchaser Indemnified Parties;

(c) if any of the Purchaser Indemnified Parties after the Closing Date has voluntarily participated in causing (mitverursacht) such Claim within the meaning of sec. 254 para. 1 of the BGB or has failed to comply with its duty (Obliegenheit) to mitigate Damages pursuant to clause 7.6 (Mitigation) below, in which case the Seller shall not be liable for the portion of such Damage that could have been avoided had the Purchaser complied with such mitigating duties; or

36

7.1.3 Where the Seller has made a payment to the Purchaser in relation to any Claim and, after reception of such payment, the Purchaser actually recovers (whether by insurance, payment, discount, credit, relief or otherwise) from a third-party a sum which indemnifies or compensates the Purchaser Indemnified Parties (in whole or in part) in respect of the Damage which is the subject of the Claim, the Purchaser shall pay to the Seller as soon as reasonably possible after receipt, an amount equal to (i) the amount recovered from the third-party less any reasonable costs and expenses incurred in obtaining such recovery, or (ii) if less, the amount previously paid by the Seller to the Purchaser (taking into account the threshold set forth in clause 7.2).

7.2 De Minimis Amount, Threshold

The Purchaser shall only be entitled to any claim in respect of a Breach (a Claim) to the extent each individual Claim exceeds an amount of EUR 300,000.00 (in words: three hundred thousand euros) (provided, however, that for the purpose of determining whether a Claim is de minimis, several Claims arising out of similar or related matters, facts, events or circumstances shall be aggregated and deemed to form one single Claim – the De Minimis Amount) and the aggregate amount of all such individual Claims exceeds EUR 3,000,000.00 (in words: three million euros) (the Threshold). For the avoidance of doubt, in the event the Threshold is exceeded, the Purchaser is entitled to recovery for all Damages (excluding any De Minimis Amount) and not just the excess amount. The De Minimis Amount and the Threshold shall not apply with respect to the liability of the Seller under clause 3.3 (Seller’s payment for Leakage), clause 6.2.1 (Corporate matters, authority and valid obligations), clause 6.2.14 (Environmental matters) (with respect to the Threshold only), clause 7.10 (Zwickau specific indemnity), clause 8 (Tax indemnity), clause 10.3 (No deviation from ordinary course of business; no Leakage), clause 10.3.5 (Pre-Sale Restructuring), clause 10.8 (Non-competition) and clause 10.10 (Capital expenditures). Notwithstanding the foregoing, with respect to the liability of the Seller under clause 6.2.14 (Environmental matters), the Parties agree that the applicable Threshold shall be EUR 2,000,000.00 (in words: two million euros), it being specified that, once such Threshold is exceeded, any Damages to be recovered by the Purchaser:

37

(a) between EUR 0.00 (in words: zero euros) and EUR 5,000,000.00 (in words: five million euros) (exclusive) shall be equally borne between the Seller and the Purchaser;

(b) for the portion between EUR 5,000,000.00 (in words: five million euros) and EUR 10,000,000.00 (in words: ten million euros) (exclusive) shall be borne exclusively by the Seller; and

(c) in excess of EUR 10,000,000.00 (in words: ten million euros) shall be borne exclusively by the Purchaser.

7.3 Overall scope of Seller’s liability pursuant to this agreement

Subject to the following sentences, the Seller’s aggregate liability under this agreement shall be limited to EUR 35,000,000.00 (in words: thirty-five million euros) (the Liability Cap). With regard to claims pursuant to clause 8 (Tax indemnity) below, the Seller’s aggregate liability shall be limited to EUR 50,000,000.00 (in words: fifty million euros). The Liability Cap shall not apply with respect to any Claims made pursuant to clause 3.3 (Seller’s payment for Leakage), clause 6.2.1 (Corporate matters, authority and valid obligations), clause 6.2.14 (Environmental matters), clause 7.10 (Zwickau specific indemnity), clause 10.3 (No deviation from ordinary course of business; no Leakage), clause 10.3.5 (Pre-Sale Restructuring), clause 10.8 (Non-competition) and clause 10.10 (Capital expenditures); provided, however, that the overall liability of the Seller under this agreement shall in no event exceed the Purchase Price.

7.4 Exclusion of claims due to Purchaser’s knowledge

7.4.1 In preparation of the Transaction, a virtual data room operated by Intralinks, Inc. made available to the Purchaser and its advisors in the time period from 9 September until 17 November 2018 (the Data Room), a Q&A process with the Seller and the Group Companies in the same time period (the Q&A Process), as well as the management presentation held on 25 September 2018 (the Management Presentation; the Management Presentation, the Data Room and the Q&A Process together referred to as the Disclosed Information).

38

7.4.2 The Purchaser shall not be entitled to bring any Claim for any Breach of guarantees of the Seller or the Loan Seller, as applicable, pursuant to clause 6 (Seller Parties’ guarantees) if the underlying facts or circumstances on which such Claim is based were Known by the Purchaser as of the Announcement Date, taking into account that the Purchaser, prior to entering into this agreement, has been given the opportunity to a review of the condition and status of the Group Companies and their respective businesses from a commercial, financial and legal perspective; it being specified however, for the avoidance of doubt, that the Unaudited Financial Statements have not been made available to the Purchaser prior to the Announcement Date. Shall be considered as “Known” by the Purchaser, facts and circumstances that could reasonably be concluded from the Disclosed Information, as well as facts and circumstances that were expressly identified in this agreement or its exhibits. Any facts and circumstances shall be deemed “to be reasonably be concluded from the Disclosed Information”, if the disclosure was made in a manner that (i) the significance of the respective information disclosed could have reasonably been appreciated by the Purchaser on the face of the respective document and (ii) the disclosure was not misleading. Facts and circumstances Known by the Purchaser’s managing directors, advisors and those of its employees who were engaged in carrying out the due diligence examination undertaken with regard to entering into this agreement shall be imputed to the Purchaser. This clause 7.4.2 shall not apply with respect to any claims made pursuant to clause 3.3 (Seller’s payment for Leakage), clause 6.2.1 (Corporate matters, authority and valid obligations), clause 6.2.14 (Environmental matters), clause 7.10 (Zwickau specific indemnity), clause 10.3 (No deviation from ordinary course of business; no Leakage), clause 10.3.5 (Pre-Sale Restructuring), clause 10.8 (Non-competition) and clause 10.10 (Capital expenditures).

7.4.3 Ten (10) identical copies reflecting the contents of the Data Room on USB have been produced by IntraLinks, Inc. and have been provided to the Seller and the Purchaser on 19 November 2019, at 7:00 pm CET.

7.5 Notification of Seller, procedure in case of third-party claims

7.5.1 In the event of an actual or potential Breach, the Purchaser shall without undue delay from becoming aware of the matter notify the Seller of such alleged Breach in writing, describing the potential claim in reasonable detail and, to the extent practicable, state the estimated amount of such Claim and give the Seller the opportunity to remedy the Breach in accordance with clause 7.1.1 above (the Claim Notice).

7.5.2 In the event that in connection with a breach of a guarantee under clause 6 (Seller Parties’ guarantees) above, except for clause 6.2.10 (Taxes) and clause 8 (Tax indemnity) in application of which the procedure is described under clause 8.6 (Tax proceedings after Closing), any claim or demand of a third-party is asserted against any of the Purchaser Indemnified Parties, the Claim Notice shall give the Seller the opportunity to fully participate, at its own expense, from the beginning in all proceedings.

39

7.5.3 If the Seller gives formal notice to the Purchaser of its willingness to control a proceeding, which notice shall acknowledge that (i) the Seller has an indemnification obligation under clause 6 (Seller Parties’ guarantees) and clause 7 (Remedies for breach by Seller or Loan Seller) resulting from such proceeding (but only on its merits, not in a specific amount) and (ii) to the Seller’s Knowledge as of the time the notice is given, the exclusions provided in clause 7.1.2 and 7.4 (Exclusion of claim due to Purchaser’s knowledge) are not applicable in respect of such proceeding (the Acknowledgement Notice), the Seller shall lead such proceeding on its own or through counsel of its choice and at its expenses and the Purchaser shall fully cooperate and shall cause the Group Companies and their representatives to: (i) promptly forward any correspondence existing in written form and any information requests of a court or the third-party in respect of such proceeding to the Seller for evaluation and comments; (ii) give the Seller the opportunity to challenge and litigate such proceeding; (iii) comply with any reasonable instructions given by the Seller in relation to the conduct of such proceeding referred; (iv) upon Seller’s request, promptly authorize, (by power-of-attorney and such other documentation as may be necessary or appropriate) the designated representative of the Seller to represent the Purchaser and the respective Group Companies in the proceeding, provided that the Seller shall fully indemnify the Purchaser (or any of the Group Companies, as applicable) for all costs (together with any irrecoverable VAT thereon) reasonably and properly incurred by the Purchaser (or any of the Group Companies) in connection with this designation; and (v) see that no document or information related to proceeding is submitted to any court or the third-party without the prior consent of the Seller in written form, which shall not be unreasonably withheld. The Seller together with its representative and advisers, shall act at all times, reasonably taking into account the interest of the Group Companies, and exercise good faith judgment. In no event shall the Seller be entitled to acknowledge or settle a claim or permit any such acknowledgement or settlement without the Purchaser’s prior written consent (which shall not be unreasonably withheld or delayed), unless and solely to the extent it results in (A) a complete and unconditional release of each of the Purchaser Indemnified Parties from any and all liabilities in respect of such third-party claim, not involving any finding or admission of any violation of law and (B) the Seller commits to fully indemnify the Purchaser for the Damages with respect to such settlement.

40

7.5.4 If the Seller gives formal notice to the Purchaser of its willingness to control a proceeding but gives no Acknowledgement Notice (the Formal Notice), the Parties shall mutually agree to appoint a law firm within ten (10) Business Days from the receipt by the Purchaser of the Formal Notice (the Firm). Failing to reach a mutual agreement, a Firm shall be appointed, upon request of either Party, by the president of the local chamber of commerce in Frankfurt am Main, Germany. The Firm so appointed shall be an internationally recognized firm and must not have a conflict of interest in acting in this capacity. The Firm shall act as an expert and not as an arbitrator and shall lead and control the proceeding in the interest of both Parties for a period of two (2) months. If at the end of the two (2) month period, the Firm determines that it is more likely than 50% that (i) the Seller has an indemnification obligation under clause 6 (Seller Parties’ guarantees) or clause 7 (Remedies for breach by Seller or Loan Seller) resulting from such proceeding and (ii) the exclusions provided in clause 7.1.2 and 7.4 (Exclusion of claim due to Purchaser’s knowledge) are not applicable in respect of such proceeding, the Seller shall have the lead on the relevant proceeding according to clause 7.5.3. Such determination by the Firm shall not affect the rights and obligations of the Parties under this clause 7 (Remedies for breach by Seller or Loan Seller) and shall only have an impact on the conduct of the relevant proceeding. If the Purchaser has received a Formal Notice in respect of a proceeding, the Purchaser shall give the Seller the opportunity to challenge and litigate such proceeding at Seller’s costs, if such proceeding would otherwise become non-appealable until the Firm is formally appointed pursuant to this clause 7.5.4.

7.5.5 For the avoidance of doubt, the Purchaser shall control the conduct of the proceeding (i) if the Purchaser has not received an Acknowledgement Notice or a Formal Notice or (ii) if the Purchaser has received a Formal Notice but the Firm determined that it is less likely than fifty per cent (50%) that (A) the Seller has an indemnification obligation under clause 6 (Seller Parties’ guarantees) or clause 7 (Remedies for breach by Seller or Loan Seller) resulting from such proceeding or (B) the exclusions provided in clause 7.1.2 and 7.4 (Exclusion of claim due to Purchaser’s knowledge) are not applicable in respect of such proceeding. Such determination by the Firm shall not affect the rights and obligations of the Parties under this clause 7 (Remedies for breach by Seller or Loan Seller) and shall only have an impact on the conduct of the relevant proceeding. In no event shall the Purchaser be entitled to acknowledge or settle a claim or permit any such acknowledgement or settlement without the Seller’s prior written consent (which shall not be unreasonably withheld or delayed) to the extent that such claims may result in a liability of the Seller under this agreement.

41

7.5.6 The Parties shall fully cooperate, and the Purchaser shall cause the Group Companies and their representatives to fully cooperate, at their own expense, with the respective other Party with respect to all proceedings. On request of the Seller, the Purchaser shall in particular provide any document or information which:

(a) can be useful for the Seller to avoid or mitigate any liability under this clause 7 (Remedies for breach by Seller or Loan Seller), or to enforce a claim under this clause 7 (Remedies for breach by Seller or Loan Seller); or

(b) can be required for accounting purposes (in particular reporting requirements) of the Seller or its present or former direct or indirect shareholders;

provided that the respective document or information is reasonably accessible for one of the Group Companies or the Purchaser. The Purchaser shall procure that the Group Companies store all records, documents and information relating to the proceedings until the expiration of any applicable statute of limitations.

7.5.7 The Seller and any environmental expert retained by the Seller shall be given access to the relevant properties (including the opportunity to investigate the properties, e.g. taking of soil/groundwater samples) to the extent that such access is reasonably required to assess any environmental liability being incurred.

7.5.8 To the extent that the Seller is in breach of a guarantee provided for under clause 6 (Seller Parties’ guarantees) above, all costs and expenses incurred by the Seller or the Purchaser in defending such claim shall be borne by the Seller. If it turns out that the Seller was not in breach, any costs and expenses reasonably incurred by the Seller in connection with the defense (including advisors’ fees) shall be borne by the Purchaser and the Group Companies. The Purchaser shall procure that the Group Companies fully comply with their obligations under this clause 7.5.

7.5.9 The failure of the Purchaser to comply with its obligations under clause 7.5.1 shall not release the Seller from its respective obligations under clause 6 (Seller Parties’ guarantees) above and this clause 7, except up to and to the extent that the Seller is actually and materially prejudiced by such failure.

7.6 Mitigation

Sec. 254 of the BGB shall remain unaffected, i.e. the Purchaser is in particular obliged to prevent the occurrence of any Damages that they may reasonably expect to suffer in consequence of any Breach by the Seller, and to limit the scope of any Damages incurred, to the extent possible.

42

7.7 Limitation periods

All Claims for any Breach of guarantees of the Seller pursuant to clause 6 (Seller Parties’ guarantees) above shall become time-barred (verjähren) on the second (2^nd) year anniversary of the Closing Date, except for Claims based on a Breach of the guarantees given under (i) clause 6.2.1 (Corporate matters, authority and valid obligations) which shall become time-barred on the fifth (5^th) year anniversary of the Closing Date and (ii) clause 6.2.14 (Environmental matters) which shall become time-barred on the third (3^rd) year anniversary of the Closing Date. Claims pursuant to clause 8 (Tax indemnity) shall become time-barred in accordance with clause 8.8 (Limitations). All other claims arising out of or in connection with this agreement shall become time-barred on the third (3^rd) year anniversary of the Closing Date. Sec. 203 of the BGB shall not apply.

7.8 Exclusion of further remedies

7.8.1 To the extent permitted by law, any further claims and remedies other than explicitly provided for under clauses 6 (Seller Parties’ guarantees) through 8 (Tax indemnity) of this agreement, irrespective of which nature, amount or legal basis, are hereby expressly waived and excluded (except for actions for specific performance or other equitable remedies), in particular, without limitation, claims under pre-contractual fault (sec. 311 para. 2 and 3, 241 para. 2 of the BGB (vorvertragliche Pflichtverletzung)), for breach of contract (Pflichtverletzung aus dem Schuldverhältnis), on the basis of statutory warranty provisions (gesetzlicher Gewährleistungsbestimmungen) or tort (unerlaubter Handlung) as well as any and all other claims, which could, due to a withdrawal (Rücktritt), challenging (Anfechtung), reduction of the purchase price (Minderung) or any other reasons result in the termination (Beendigung), invalidity (Unwirksamkeit) or winding up (Rückabwicklung) of this agreement, an amendment of its content or a repayment or reduction of the Purchase Price, unless such claim is based on fraud, willful act (vorsätzliche Handlung) or fraudulent misrepresentation (arglistige Täuschung) of the Seller, the Loan Seller or the Seller’s Guarantor, as applicable.

7.8.2 Notwithstanding the foregoing, the Parties agree that the responsibility of the Seller with respect to environmental matters shall be exclusively governed by clause 6.2.14 (environmental matters) and that, except for the claim expressly set forth in clause 6.2.14, no environmental matters shall give rise to any claims by the Purchaser or any other third-party against the Seller on any legal basis.

43

Any compensation claims against Seller pursuant to Section 24 (2) of the Federal Soil Protection Act (Bundes-Bodenschutzgesetz – BBodSchG), Section 9 (2) Environmental Damages Act (Umweltschadensgesetz) or comparable provisions under the laws of any other jurisdiction or any similar compensation claims shall be excluded. The Purchaser shall pass the exclusion of any such claims on to any onward buyer or user of the relevant properties and shall ensure that any such onward buyer or user waives any claims it may have against the Seller or any of their legal successors.

7.9 Payments

7.9.1 The Seller shall pay to the Purchaser all amounts payable pursuant to this clause 7, in immediately available funds, in accordance with the written instructions of the Purchaser notified to the Seller by the Purchaser within twenty (20) Business Days of the notice sent by the Purchaser to the Seller stating the amount of the Claim or, if the Claim is contested by the Seller, within fifteen (15) Business Days of an agreement between the Parties regarding the amount of the Claim or of a final, binding and non-appealable decision regarding the amount due pursuant to clause 18.2 (Disputes). The Purchaser shall pay to the Seller all amounts payable pursuant to this clause 7, in immediately available funds, in accordance with the written instructions of the Seller notified to the Purchaser by the Seller within twenty (20) Business Days of the notice sent by the Seller to the Purchaser stating the amount owed by the Purchaser or, if the amount is contested by the Purchaser, within fifteen (15) Business Days of an agreement between the Parties regarding the amount of the claim or of a final, binding and non-appealable decision regarding the amount due pursuant to clause 18.2 (Disputes).

7.9.2 Any payment to be made pursuant to this agreement shall be treated as an adjustment of the Purchase Price in the relationship between the Seller and the Purchaser. Upon request of the Purchaser, any payments to be made under this agreement by the Seller shall directly be effected to the relevant Group Company as a capital contribution or loan on behalf of the Purchaser, provided that the Purchaser holds the Seller harmless any negative effects and risks this may have in comparison to a straight forward payment to the Purchaser.

44

7.9.3 Any amount payable to any Party under clause 3.3 (Seller’s payment for Leakage), clause 6 (Seller Parties’ guarantees), this clause 7 (Remedies for breach by Seller or Loan Seller), clause 8 (Tax indemnity) and clause 9 (Purchaser’s guarantees) shall be made free and clear and without any deduction or withholding for or on account of Taxes, save only as may be required by law. If any deduction or withholding is required by law, such payment shall be increased by the amount of such Tax withheld or deducted from the payment (net of any corresponding Tax credits actually used) such that the amount the recipient effectively receives is equal to the amount the recipient would have received in the absence of such Taxes.

7.10 Zwickau specific indemnity

The Parties acknowledge that certain individuals neighboring the premises of the planned new logistics center on the newly acquired Real Property in Zwickau, Germany (the Zwickau Facility) have filed complaints (Widersprüche) in the course of the administrative proceedings against the construction permit (Baugenehmigung) that Tower Automotive Presswerk Zwickau GmbH has received on 28 September 2018 (such complaints, together with any and all undisclosed or new complaints filed prior to the Effective Date, the Zwickau Complaints). Notwithstanding anything to the contrary contained herein, and in particular clause 10.7 (Seller release), the Seller shall indemnify (entschädigen) and hold harmless (schadlos halten) the Purchaser and the Group Companies from and against any and all Damages that may arise out of (i) the legally mandatory dismantling of any buildings or building structures or any other results of construction action that have been undertaken at the Zwickau Facility, as a result of such Zwickau Complaints, (ii) any law suits, court actions or other proceedings with the respective neighbors (either directly or indirectly) regarding such Zwickau Complaints, including reasonable attorney’s fees and disbursements or any other processing costs or expenses, and (iii) any neighboring agreements or comparable settlements entered into by the Purchaser of the relevant Group Companies to settle any such Zwickau Complaints with the consent of the Seller, which shall not be unreasonably withheld or delayed; in each case of (i), (ii) and (iii) above, to the extent not already specifically provided for in the Unaudited Financial Statements and up to the amount of such provision. None of the limitations set forth in clause 7.2 (De Minimis Amount, Threshold), clause 7.3 (Overall scope of Seller’s liability pursuant to this agreement) and clause 7.4 (Exclusion of claims due to Purchaser’s knowledge) shall apply to any indemnification due under this clause 7.10, provided, however, that the Purchaser and the Group Companies can only raise claims under this clause 7.10 if the aggregate of any Damages indemnifiable hereunder and exceeding the respective provisions, if any, in the Unaudited Financial Statements exceeds ten per cent (10%) of the overall costs, fees and expenses in connection with the development and construction of the Zwickau Facility as currently planned by the Group Companies (the Zwickau Costs) (for the avoidance of doubt, in the event such threshold is exceeded, the Purchaser is entitled to recovery for all Damages and not just the excess amount) and, provided further, that the overall liability of the Seller under this clause 7.10 shall in no event exceed the Zwickau Costs, estimated according to the Seller as of the Announcement Date at approximately EUR 5,000,000.00 (in words: five million euros). Clauses 7.5 (Notification of Seller, procedure in case of third-party claims), 7.6 (Mitigation) and 7.7 (ii) (Limitation periods) shall apply mutatis mutandis to the indemnity contained in this clause 7.10.

45

8. Tax indemnity

8.1 Definitions

For the purposes of this agreement:

Affiliates shall mean the affiliated companies within the meaning of sec. 15 et. seq. of the AktG.

CIT Group shall mean the fiscal unity (fiscale eenheid) existing between the Seller and the Company for purposes of Dutch corporate income tax.

Pre-Effective Date Period shall mean any time period ending on or before the Effective Date.

Pre-Effective Date Straddle Period shall mean the part of the Straddle Period starting at the beginning of the first calendar day of the Straddle Period and ending at the Effective Date.

Pre-Effective Date Tax (i) shall mean any Tax related to the Pre-Effective Date Period and (ii) shall be – if the Effective Date deviates from the end of a calendar year – calculated as if the last business and fiscal year (Geschäftsjahr und Wirtschaftsjahr) starting prior to the Effective Date and the respective tax assessment period (Veranlagungs- und Erhebungszeitraum) ceased at the end of the Effective Date. The amount of Taxes attributable to the Pre-Effective Date Straddle Period shall be calculated as follows:

(a) in the case of any Taxes based upon or related to income, sales, gross receipts or any similar Tax base, the Pre-Effective Date Tax shall be deemed equal to the amount that would be payable as if the Pre-Effective Date Period were a separate Tax assessment period and as if the fiscal year of the relevant Group Company ended on the Effective Date (“as-if-assessment”);

46

(b) without limiting the generality of (a) above, in the case of transfer Taxes other than VAT (such as real estate transfer tax, stamp duty), any amounts attributable to business transactions (Geschäftsvorfälle) that occur on or prior to the Effective Date shall be a Pre-Effective Date Tax;

(c) without limiting the generality of (a) and (b) above, in the case of Taxes other than Taxes mentioned under (a) and (b) above, the Taxes shall be allocated on a pro rata temporis basis. The amount allocated to the Pre-Effective Date Straddle Period shall be regarded as Pre-Effective Date Tax.

Pre-Effective Date Tax Refund shall mean any Tax Refund of a Pre-Effective Date Tax (including, for the avoidance of doubt, any Tax Refund (in particular refund of corporate income tax (Körperschaftsteuer), trade tax (Gewerbesteuer) and withholding tax (Kapitalertragsteuer) received by Tower Automotive Holding GmbH or any other Group Company as a result of or in connection with the ruling of the German Federal Tax Court (Bundesfinanzhof) dated 7 September 2018, reference no. I R 11/14).

Relevant Tax Proceeding shall mean any Tax Proceeding (i) relating fully or partly to Pre-Effective Date Taxes or Pre-Effective Date Periods or (ii) which gives rise or could give rise to obligations of the Seller under clause 6.2.10 (Taxes) or under this clause 8 (Tax indemnity) and/or rights under clauses 8.3.1 or 8.4.2.

Straddle Period shall mean a Tax assessment period starting on or prior to and ending after the Effective Date.

Tax(es) shall mean any tax (Steuern) within the meaning of Section 3 para. (1) to (3) of the German Tax Code (AO), tax related ancillary obligations (steuerliche Nebenleistungen) within the meaning of Section 3 para. (4) of the German Tax Code and social security contributions (Sozialversicherungsbeiträge) or any equivalent tax, tax related ancillary obligations or social security contributions under the laws of any other jurisdiction including, without limitation to, income taxes, trade taxes, wage taxes, payroll taxes, stamp duties, value added taxes, energy taxes, customs duties, real estate transfer taxes as well as social security contributions (Sozialversicherungsbeiträge) together with any interest, penalty, fine, special charge for late payment, special charge for late filing levied according to German or any other comparable applicable foreign law and regardless of whether the amount is owed as primarily liable tax-payer, as secondary liability, as pre-payment or as a joint or several liability, is assessed, to be withheld, to be disbursed or payable by law. The term Tax shall include any liabilities from or payment under a Tax Allocation Agreement. For the avoidance of doubt, Taxes shall not include deferred Taxes and/or notional Taxes such as reductions of Tax loss carry-forwards and/or back and future depreciation.

47

Tax Authority shall mean any competent governmental authority or public body in charge of imposing or collecting any Tax.

Tax Benefit shall mean (i) Tax Refund, Tax credit and Tax saving, (ii) any Tax item that can be carried forward and/or back to reduce any Tax and (iii) any other Tax advantage, in each case caused by reciprocal effects (Wechselwirkungen), e.g. resulting from the extension of depreciation periods or higher allowances (Phasenverschiebung) or the transfer of items relevant for Taxes into another period or year or the transfer of Tax items from one entity to another entity.

Tax Proceeding shall mean any administrative and judicial proceeding or action relating to Taxes including preparatory measures (e.g., Tax assessments, Tax audits, objections, appeals, meetings and correspondence with any Tax Authority and courts).

Tax Refund shall mean any effectively received and reasonably certain that it will be retained payment of any Tax (including by way of refund, set-off or deduction) made by a Tax Authority.

Tax Return shall mean any and all returns, declarations, reports, notices, or forms relating to any Tax required to be filed under applicable Tax laws, decrees or regulations to any Tax Authority.

VAT shall mean (i) any Tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112) and (ii) any other tax of a similar nature, whether imposed in a Member State in substitution for, or levied in addition to, such tax referred to in (i) above, or imposed elsewhere.

The Seller, the Purchaser, the Party/Parties and the Group Companies shall have the meaning as defined for the entire agreement, but shall – for the purpose of this clause 8 – also include any legal successor.

48

8.2 Tax Indemnification

8.2.1 The Seller shall indemnify the Purchaser from any Pre-Effective Date Tax due by any of the Group Companies after the Effective Date (a Tax Indemnification Claim), but only if and to the extent, that:

(a) the Pre-Effective Date Tax has not been paid on or prior to the Effective Date;

(b) neither the Purchaser, nor any Affiliates of the Purchaser including, after the Closing, the Group Companies (i) are entitled to an indemnification, reimbursement or any other kind of recovery with respect to the respective Pre-Effective Date Tax against a party other than a Group Company or (ii) have already received a corresponding indemnification payment;

(c) the Pre-Effective Date Tax is not caused or triggered by (i) any measure with retroactive effect on the Pre-Effective Date Period initiated by the Purchaser or the Group Companies after the Closing Date or (ii) any change of a Tax Return relating to a Pre-Effective Date Tax or in the exercise of any Tax election right for a Pre-Effective Date Period, unless required under mandatory law or requested and approved in writing by the Seller following the Closing Date;

(d) the Pre-Effective Date Tax cannot or could not be avoided by offsetting taxable profits against any Tax loss carrybacks or Tax loss carryforwards created in the Pre-Effective Date Period;

(e) the Pre-Effective Date Tax does not correspond to or cannot be offset against a Tax Benefit related to periods after the Effective Date which can also arise at a different type of Tax and which is based on a circumstance having triggered the Tax Indemnification Claim and occurring at the tier of a Group Company or at the tier of the Purchaser or an Affiliate of the Purchaser; whereby it is understood that the amount of the Tax Benefit, by which the Tax Indemnification Claim shall be reduced, shall be equal to the aggregate of:

(i) the amount of all Tax Benefits (without discounting) that have already been received (including, but not limited to, by way of set-off, deduction or Tax credit) by a Group Company or at the tier of the Purchaser or an affiliate of the Purchaser when the Tax Indemnification Claim would have fallen in principle due pursuant to clause 8.2.2 (Tax Indemnification Due Date); plus

49

(ii) the net present value of all remaining Tax Benefits after the Tax Indemnification Due Date, whereby the net present value shall be determined by applying a discount rate of nine point one per cent (9.1%) per annum for the period commencing on the Tax Indemnification Due Date until the time on which the respective Tax Benefit is likely to occur and by assuming that the respective Group Company, the Purchaser and its affiliates (as the case may be) are taxed on a stand-alone basis, are sufficiently profitable and that Tax rates as applicable on the Tax Indemnification Due Date apply for the entire relevant period;

(f) this agreement does not provide otherwise that the Tax shall be borne by the Purchaser;

(g) the Tax does not arise or is not increased as a result of a change in law after the Effective Date; and

(h) the aggregate amount of all Pre-Effective Date Taxes paid by a Group Company after the Effective Date and not already excluded under any provision of this clause 8.2 above exceeds the aggregate amount of all Tax liabilities and Tax accruals included in item “Accrued Liabilities” listed under “Net Working Capital” in Annex 3.1.2 (Cash, Debt and Net Working Capital).

8.2.2 A Tax Indemnification Claim shall become due and payable fifteen (15) Business Days after the Seller has been notified in writing by the Purchaser about the payment obligation and the corresponding payment date if any and has received a copy of the underlying Tax assessment or payment order of the Tax Authority (including sufficient documents and information to review and assess the amount of the tax indemnification payment to be made including any qualifications under clauses 8.2.1(a) through 8.2.1(h)), but in no case earlier than three (3) Business Days prior to the date at which the Tax to be indemnified is due and payable to the Tax Authority.

8.2.3 If the Tax underlying the Tax Indemnification Claim is subsequently reduced, the difference between the higher payment on the Tax Indemnification Claim and the lower Tax amount shall be reimbursed by the Purchaser to the Seller, including all interests related thereto, within fifteen (15) Business Days after the reduction has become effective. Clause 8.3.2 below shall apply mutatis mutandis.

50

8.3 Tax Refunds

8.3.1 The Purchaser shall – unless and to the extent the amount has already excluded the indemnification pursuant to clause 8.2.1 above – reimburse to the Seller any Pre-Effective Date Tax Refund effectively received (including by way of set-off, deduction and Tax credit) by the Purchaser or any Group Company after the Effective Date.

8.3.2 The Purchaser shall, and shall procure that the Group Companies will (i) promptly notify the Seller in writing of the receipt of any Pre-Effective Date Tax Refund within the meaning of clause 8.3.1 above and (ii) at the Seller’s request, deliver to the Seller, at the Seller’s expense, within six months following the end of each calendar year a written statement of a German certified accounting firm (Wirtschaftsprüfungsgesellschaft) to confirm that the Purchaser has complied fully with its notification obligations under this clause 8.3.2. Clause 8.6.4 below shall apply mutatis mutandis to such review or investigation.

8.3.3 Any amount payable to Seller pursuant to this clause 8.3 shall be due and payable fifteen (15) Business Days after the Pre-Effective Date Tax Refund has been refunded (including – but not limited to – by way of set-off or deduction) to the Purchaser or one of the Group Companies. Clause 8.2.3 shall apply mutatis mutandis regarding a subsequent reduction of a Pre-Effective Date Tax Refund paid to the Seller.

8.4 Reverse Indemnity

8.4.1 The Purchaser shall pay to the Seller an amount equal to any Tax Benefit occurring after the Effective Date at the level of any Group Company if and to the extent:

(a) such Tax Benefit results from an increase of taxable income of any Group Company regarding Pre-Effective Date Periods; and

(b) such increase does not result in an actual Tax payment of the respective Group Company due to the fact that the taxable income of the respective Group Company is attributed to or Taxes on such income are assessed against the Seller or any other former direct or indirect shareholders of the respective Group Company.

In respect of the calculation of such Tax Benefit, clause 8.2.1(e)(ii) second half sentence shall apply mutatis mutandis.

51

8.4.2 The Purchaser shall pay to the Seller an amount equal to the amount of Taxes which are imposed on (i) the Seller or, (ii) any former direct or indirect shareholder of any Group Company which are directly or indirectly caused or triggered:

(a) by an increase of taxable income of any Group Company regarding Pre-Effective Date Periods due to a change of law after the Effective Date; or

(b) by (i) any measure with retroactive effect on the Pre-Effective Date Period initiated by the Purchaser or the Group Companies after the Closing Date or (ii) any change of a Tax Return relating to a Pre-Effective Date Tax or in the exercise of any Tax election right for a Pre-Effective Date Period, unless required under mandatory law or requested and approved in writing by the Seller following the Closing Date; or

(c) relating to taxable income of any Group Company regarding the period starting on the Effective Date until the Closing Date.

8.4.3 Clause 8.2.2 above shall apply mutatis mutandis to payment obligations under this clause 8.4 (Reverse Indemnity).

8.5 Cooperation on Tax matters

8.5.1 In between the Announcement Date and the Closing Date, the Seller shall procure that (i) Tax Returns of the Group Companies are prepared in accordance with past practice and filed in a timely manner and (ii) all Taxes payable are paid in a timely manner.

8.5.2 Any Tax Return relating to any Relevant Tax Proceedings shall be subject to the review and written consent of the Seller not to be unreasonably withheld. The Purchaser shall procure that no such Tax Return is submitted to any Tax Authority without approval of the Seller in written form not to be unreasonably withheld. The Purchaser shall ensure that any Tax Return to be reviewed and approved by the Seller will be sent to the Seller no later than thirty-five (35) Business Days prior to the due filing date of the relevant Tax Return and that all Taxes payable under such Tax Return are paid in a timely manner. The Seller shall be deemed to have given its consent to any Tax Return furnished to the Seller in a timely manner for review if the Seller has not provided any comment with respect to the respective Tax Return to the Purchaser or the relevant Group Company within thirty (30) Business Days following the receipt (Zugang) of the respective Tax Return. If the Parties fail to reach an agreement on the content of a Tax Return relating to the Pre-Effective Date Period, the respective Tax Return shall be filed according to the instructions of the Seller, unless such instructions do not comply with mandatory law. The procedure in this clause 8.5.2 shall apply mutatis mutandis to any amendment of a Tax Return relating to the Pre-Effective Date Period.

52

8.5.3 The Purchaser shall or shall procure the Group Companies to (i) inform the Seller of any material changes to be applied within a period of three (3) years after the Closing Date to the transfer pricing policy that was in place within the Group Companies at the Closing Date and (ii) give the Seller the opportunity to provide comments on such contemplated material changes. For the avoidance of doubt, the Purchaser shall fully control the management of the Group Companies’ transfer pricing policy for periods after the Closing Date and shall be free to proceed or not to any change in respect of the Group Companies’ transfer pricing policy after the Closing Date and to take or not into account any Seller’s comments in respect thereof.

8.6 Tax Proceedings after Closing

8.6.1 The Purchaser shall (i) notify the Seller of any announcement and commencement of a Relevant Tax Proceeding in written form promptly (unverzüglich) after the Purchaser or any Group Company become aware of such event and with all relevant factual information describing the object of the Relevant Tax Proceeding to a reasonable level of detail and shall include copies of any assessment, notice or other document received from any Tax Authority related to the respective Tax, (ii) give the Seller the opportunity to fully participate, at its own expense, from the beginning in all Relevant Tax Proceedings, and (iii) upon request of the Seller, procure that the respective Group Company uses its best efforts to achieve a deferred payment date for the relevant Tax at Seller’s costs.

53

8.6.2 If the Seller gives formal notice to the Purchaser of its willingness to control a Relevant Tax Proceeding, which notice shall acknowledge that (i) the Seller has an indemnification obligation under clause 6.2.10 (Taxes) or this clause 8 (Tax indemnity) in respect of any Pre-Effective Date Tax resulting from such Relevant Tax Proceeding (but only on its merits, not in a specific amount) and (ii) to the Seller’s Knowledge as of the time the notice is given the exclusions provided in clause 8.2.1 (except for 8.2.1(e)) are not applicable in respect of such Relevant Tax Proceeding (the Tax Acknowledgement Notice), the Seller shall lead such Relevant Tax Proceeding on its own or through counsel of its choice and at its expenses and the Purchaser shall fully cooperate and shall cause the Group Companies and their representatives to (i) promptly forward any correspondence existing in written form and any information requests of a Tax Authority or court in respect of such Relevant Tax Proceeding to the Seller for evaluation and comments, (ii) give the Seller the opportunity to challenge and litigate such Relevant Tax Proceeding, (iii) comply with any reasonable instructions given by the Seller in relation to the conduct of such Relevant Tax Proceeding referred, (iv) upon Seller’s request, promptly authorize, (by power-of-attorney and such other documentation as may be necessary or appropriate) the designated representative of the Seller to represent the Purchaser and the respective Group Companies in the Relevant Tax Proceeding, provided that the Seller shall fully indemnify the Purchaser (or any of the Group Companies, as applicable) for all costs (together with any irrecoverable VAT thereon) reasonably and properly incurred by the Purchaser (or any of the Group Companies) in connection with this designation and (v) see that no document or information related to Pre-Effective Date Taxes or Relevant Tax Proceeding is submitted to any Tax Authority or court without the prior consent of the Seller in written form, which shall not be unreasonably withheld.

8.6.3 If the Seller gives formal notice to the Purchaser of its willingness to control a Relevant Tax Proceeding but gives no Tax Acknowledgement Notice (the Tax Formal Notice), the Parties shall mutually agree to appoint a tax firm within ten (10) Business Days from the receipt by the Purchaser of the Tax Formal Notice (the Tax Firm). Failing to reach a mutual agreement, a Tax Firm shall be appointed, upon request of either Party, by the president of the local chamber of commerce in Frankfurt am Main, Germany. The Tax Firm so appointed shall be an internationally recognized firm and must not have a conflict of interest in acting in this capacity. The Tax Firm shall act as an expert and not as an arbitrator and shall lead and control the Relevant Tax Proceeding in the interest of both Parties for a period of two (2) months. If at the end of the two (2) month period, the Tax Firm determines that it is more likely than 50% that (i) the Seller has an indemnification obligation under clause 6.2.10 (Taxes) or this clause 8 (Tax indemnity) in respect of any Pre-Effective Date Tax resulting from such Relevant Tax Proceeding and (ii) the exclusions provided in clause 8.2.1 (except for 8.2.1(e)) are not applicable in respect of such Relevant Tax Proceeding, the Seller shall have the lead on the Relevant Tax Proceeding according to clause 8.6.3. Such determination by the Tax Firm shall not affect the rights and obligations of the Parties under clauses 7 (Remedies for breach by Seller or Loan Seller) and 8.2 through 8.4 (Tax indemnification), and shall only have an impact on the conduct of the Relevant Tax Proceeding. If the Purchaser has received a Formal Notice in respect of a Relevant Tax Proceeding, the Purchaser shall give the Seller the opportunity to challenge and litigate such Relevant Tax Proceeding at Seller’s costs, if such Tax Proceeding would otherwise become non-appealable until the Tax Firm is formally appointed pursuant to this clause 8.6.3.

54

8.6.4 For the avoidance of doubt, the Purchaser shall control the conduct of the Relevant Tax Proceeding (i) if the Purchaser has not received a Tax Acknowledgement Notice or a Tax Formal Notice or (ii) if the Purchaser has received a Tax Formal Notice but the Tax Firm determined that it is less likely than 50% that (A) the Seller has an indemnification obligation under clause 6.2.10 (Taxes) or this clause 8 (Tax indemnity) in respect of Pre-Effective Date Tax resulting from such Relevant Tax Proceeding or (B) the exclusions provided in clause 8.2.1 (except for 8.2.1(e)) are not applicable in respect of such Relevant Tax Proceeding. Such determination by the Tax Firm shall not affect the rights and obligations of the Parties under clauses 7 (Remedies for breach by Seller or Loan Seller) and 8.2 through 8.4 (Tax indemnification), and shall only have an impact on the conduct of the Relevant Tax Proceeding. In no event shall the Purchaser be entitled to acknowledge or settle a Relevant Tax Proceeding or permit any such acknowledgement or settlement without the Seller’s prior written consent (which shall not be unreasonably withheld or delayed) to the extent that such Relevant Tax Proceeding may result in a liability of the Seller under this agreement.

8.6.5 For the avoidance of doubt, if a Relevant Tax Proceeding relates only in part to Pre-Effective Date Taxes and/or the Seller’s rights under clauses 8.3.1 and/or 8.4.2 above, (i) this clause 8.6 shall be applicable to Pre-Effective Date Tax Periods and the Seller’s rights under clauses 8.3.1 and/or 8.4.2 and (ii) the Purchaser shall control the conduct of such Relevant Tax Proceeding in respect of any other relevant taxable periods or aspects other than the Seller’s rights under clauses 8.3.1 and/or 8.4.2 and shall be free to settle such Relevant Tax Proceeding to this extent.

8.6.6 The Parties shall fully cooperate, and the Purchaser shall cause the Group Companies and their representatives to fully cooperate, at their own expense, with the respective other Party with respect to all Relevant Tax Proceedings. On request of the Seller, the Purchaser shall in particular provide any document or information which:

(a) can be useful for the Seller to avoid or mitigate any liability under this clause 8 (Tax indemnity), to protect a Tax Benefit of the Seller or to enforce a claim under this clause 8 (Tax indemnity), or

55

(b) can be required for tax and accounting purposes (in particular reporting requirements) of the Seller or its present or former direct or indirect shareholders,

provided that the respective document or information is reasonably accessible for one of the Group Companies or the Purchaser. The Purchaser shall procure that the Group Companies store all records, documents and information relating to Relevant Tax Proceedings until the expiration of any applicable statute of limitations. Clause 10.6 (Retention of records) shall apply mutatis mutandis to Tax records of the Group Companies relating to the Pre-Effective Date Period.

8.7 CIT Group

8.7.1 The Seller shall use, and shall procure that the Company uses, reasonable efforts to cause that the Company is separated from the CIT Group with effect as of the Closing, including filing a request with the Dutch Tax Authority to the effect that the Company is not separated from the CIT Group with effect as of the date of this agreement.

8.7.2 As soon as reasonably practicable following the Closing, the Seller shall provide the Purchaser with opening balance sheets as at the Closing in respect of the Company as well as explanatory notes thereto. The Seller shall provide the Purchaser such information and render the Purchaser such assistance as is necessary and reasonable for the Purchaser’s review of such opening balance sheets. The Seller shall accept all reasonable comments that it receives from the Purchaser within twenty (20) Business Days of providing such opening balance sheets.

8.8 Limitations

8.8.1 To the extent that a claim under this clause 8 (Tax indemnity) refers to any Group Company in which the Seller holds (directly or indirectly) less than one hundred (100) per cent of the shares or interest as of Closing, the indemnification obligations under this clause 8 (Tax indemnity) shall be limited pro rata to the Seller’s participation in the shares or interests of such Group Company.

8.8.2 Any claims of the Purchaser under this clause 8 (Tax indemnity) shall be time-barred upon expiration of a period of six months after the respective Pre-Effective Date Tax has become final, binding and un-appealable (formell und materiell bestandskräftig). The Seller’s rights under this clause 8 shall not become time-barred prior to six months after the Seller has been notified in writing about its payment claim under this clause 8 (Tax indemnity). In any event, the claims of the Purchaser and the Seller under this clause 8 shall become time-barred at the latest 5 (five) years following the Closing Date.

56

8.8.3 If the Purchaser fails to comply with any of its obligations under this clause 8 (Tax indemnity), the Seller shall not be liable under this clause 8 (Tax indemnity) unless and to the extent such non-compliance or such breach did not (i) substantially prejudice the Seller in its capability to avoid the corresponding Pre-Effective Date Tax to be indemnified under this clause 8 or (ii) result in or increase the Pre-Effective Date Tax to be indemnified under this clause 8 (Tax indemnity).

8.8.4 The Parties agree that the limitations set forth in clauses 7.2 (De Minimis, Threshold) and 7.3 (Overall scope of Seller’s liability pursuant to this agreement) shall also apply with regard to the liability of the Seller and the Purchaser under this clause 8 (Tax indemnity), provided that the applicable De Minimis Amount shall be EUR 30,000.00 (in words: thirty thousands euros) and no Threshold will be applicable with regard to the liability of the Seller and the Purchaser under this clause 8 (Tax indemnity).

8.9 Miscellaneous

8.9.1 Clause 7.9.2 above shall apply mutatis mutandis to this clause 8 (Tax indemnity).

8.9.2 The liability of the Seller with respect to Taxes under this Agreement shall be governed exclusively by this clause 8 (Tax indemnity), unless specifically provided otherwise (e.g. clause 6.2.10 (Taxes)).

8.9.3 For the avoidance of doubt, no provision in this clause 8 (Tax indemnity) shall apply to transfer Taxes, stamp duties and similar Taxes triggered by the consummation of the Transactions contemplated by this agreement. Such Taxes shall be exclusively dealt with in clause 16.1 of this agreement.

9. Purchaser’s guarantees

9.1 Guarantees

The Purchaser hereby guarantees by way of an independent promise of guarantee (selbständiges Garantieversprechen) pursuant to sec. 311 para. 1 of the BGB as follows:

9.1.1 The Purchaser is duly incorporated and validly existing under the laws of France.

57

9.1.2 The execution and performance by the Purchaser of this agreement and the consummation of the transactions contemplated hereby are within the corporate powers of the Purchaser and have been duly authorized by all necessary corporate action on part of the Purchaser.

9.1.3 The execution and performance by the Purchaser of this agreement and the consummation of the transactions contemplated herein do not violate the articles of association or by-laws of the Purchaser or violate, subject to the fulfilment of the Closing Condition set out in clause 4.2.1(a) above, any applicable law, regulation, judgment, injunction or order binding on the Purchaser, and there is no action, law suit, investigation or proceeding pending against, or to the knowledge of the Purchaser threatened against, the Purchaser before any court, arbitration panel or administrative authority which in any manner challenges or seeks to prevent, alter or delay the transactions contemplated herein.

9.1.4 The Purchaser is not insolvent or, to the knowledge of the Purchaser, subject to any bankruptcy, insolvency or equivalent proceedings. With respect to the Purchaser, no circumstances exist which would require an application for any bankruptcy, insolvency or equivalent proceedings in other jurisdictions nor do any circumstances exist according to any applicable bankruptcy or insolvency laws which would justify the avoidance of this agreement.

9.1.5 This agreement has been duly executed by the Purchaser and, once signed, this agreement will constitute legal, valid and binding obligations of the Purchaser and shall be enforceable in accordance with its terms.

9.1.6 As of the Announcement Date, the Purchaser is not actually aware of facts which result in a guarantee provided under clause 6 (Seller Parties’ guarantees) as being breached, it being provided that this clause 9.1.6 shall not apply to any Claim made by the Purchaser in connection with clause 6.2.14 (Environmental matters) and clause 7.10 (Zwickau specific indemnity).

9.1.7 The Purchaser has obtained all necessary financings from reputable financial institutions (together with its own cash resources) allowing, in a timely manner, the consummation of all the transactions contemplated under this agreement and the compliance with its obligations hereunder. The Purchaser has delivered to the Seller’s Guarantor the Debt Financing Agreements and confirms that they contain all the material terms and conditions relating to the availability of any debt financings required by the Purchaser to fulfil its obligations hereunder.

58

9.2 Remedies

9.2.1 In the event that the Purchaser is in breach of any guarantee pursuant to clause 9.1 (Guarantees), the Purchaser shall put the Seller into the position the Seller would have been in had such breach not occurred (restitution in kind – Naturalrestitution). If the Purchaser is unable to provide restitution in kind within three (3) months after having been notified by the Seller of such breach, the Purchaser shall pay to the Seller the amount of monetary damages (Schadenersatz in Geld) as would be necessary to hold harmless the Purchaser Indemnified Party from and against any and all Damages suffered or incurred by any of them as a result of the breach. Any amount of monetary damages due by the Purchaser under clause 9.2 (Remedies) shall be paid in accordance with the procedure set forth in clause 7.5 (Notification of Seller, procedure in case of third-party claims) above and clause 7.9 (Payments) above, applied mutatis mutandis.

9.2.2 All claims of the Seller arising under clause 9 (Purchaser’s guarantees) shall become time-barred on the second (2^nd) year anniversary of the Closing Date. Clause 7.2 (De Minimis Amount, Threshold), clause 7.6 (Mitigation) and clause 7.8 (Exclusion of further remedies) shall apply mutatis mutandis to the indemnification obligation of the Purchaser.

10. Covenants

10.1 Merger control proceedings; other regulatory requirements

10.1.1 The Purchaser shall ensure that any filings to be made with the competent merger control authorities or other public authorities (the Filings), to the extent they have not already been made prior to the Signing Date, will be made within seven (7) Business Days after the Signing Date, unless the applicable laws and regulations require an earlier filing. Such Filings shall be made by the Purchaser on behalf of all Parties, provided, however, that the Purchaser shall not make any Filing without first consulting with the Seller and taking due account of all reasonable comments or suggestions made by the Seller in this respect, provided that nothing in this clause 10.1.1 shall require or oblige the Purchaser to accept such comments or suggestions.

59

10.1.2 The Seller and the Purchaser shall closely cooperate, in good faith, in the preparation of such Filings as well as in any discussions and negotiations with the competent merger control or other public authorities with the objective to obtain clearance for the transactions contemplated by this agreement in the shortest time period possible. In particular, the Seller, to the extent permissible under applicable law, (i) shall supply, or cause the Group Companies to supply, any information and documentary material (subject to any confidentiality undertakings or legal or regulatory requirements which may prevent such disclosure) that may be reasonably required for the preparation of all necessary Filings, as well as any additional information requested by the relevant merger control authorities or other public authorities in connection with the examination of the Filings or that is necessary in order to respond to questions raised by the merger control authorities or other public authorities, (ii) where permitted by the competent merger control authorities or other public authorities and upon the Purchaser’s request, shall ensure its availability to, or cause the Group Companies to, attend meetings and participate in telephone conference calls and other conversations with the competent merger control authorities or other public authorities, and (iii) shall not, and shall cause the Group Companies not to, take any action inconsistent with this clause 10.1.2 or which would prevent the Purchaser from obtaining the Closing Condition set out in clause 4.2.1 above.

10.1.3 Each Party shall without undue delay provide all other Parties with copies of any material correspondence with the merger control authorities or other public authorities and with copies of any written statement, order or decision of such authorities; provided that all privileged or commercially sensitive information relating to the Parties or their Affiliates may, unless provided on a counsel-to-counsel basis, first be removed. The Purchaser may withdraw (zurücknehmen) Filings with the competent authorities or agree with such authorities on the extension of any examination period only with the express prior written consent of the Seller (which consent shall not be unreasonably withheld or delayed).

10.1.4 If the competent merger control authorities are prepared to grant clearance only subject to the satisfaction of conditions or preconditions (Bedingungen oder Auflagen) by the Purchaser, the Purchaser shall, without undue delay and at its own costs and risk, take any action that may be necessary to:

(a) resolve any objections asserted by the competent merger control authorities and fulfil such conditions or preconditions; and

(b) prevent the opening of proceedings or entry of any decision or order, and to have vacated, lifted, reversed or overturned any decree, judgment, injunction or other decision or order that would prevent, prohibit, restrict or delay Closing by the Long Stop Date.

60

10.2 Access to financial information

Subject to compliance with applicable data protection laws and for a period of five (5) years as from Closing, or for such longer period of time if, before the expiration of such five year period, the Seller or any of the Seller’s Affiliates is subject to any investigation or audit by or demand from any authority competent to assess, control or collect any Tax and sends a notice to the Purchaser to that effect, the Purchaser shall procure that, upon the reasonable request of the Seller or its concerned Affiliate, the Seller and its representatives are given access to or are provided with, as the case may be, and are allowed, at the Seller’s cost, to make copies of:

(a) the annual books of accounts of the Group Companies for all fiscal years up to the Effective Date,

(b) the annual book of accounts of the Group Companies for the fiscal year 2019 (for the period up to and including the Closing Date), as well as any other financial information required to achieve the deconsolidation of the Group Companies on the Closing Date or, if the payment of the Estimated Purchase Price does not occur on the last day of a month, on the end of month following the Closing Date, and

(c) any information the Seller reasonably requires with regard to any Tax matters,

during working hours on a Business Day and upon reasonable notice and subject to the Seller and its representatives agreeing in such form as the Purchaser or the Group Companies may reasonably require to keep all such information confidential and use it only for such purpose.

10.3 No deviation from ordinary course of business; no Leakage

10.3.1 Between the Announcement Date and the Closing Date, the Seller shall, subject to the provisions of clause 10.3.5 and to the extent permissible under applicable law, cause the Group Companies to (i) conduct their respective business operations in the ordinary course of business and substantially in the same manner as before, (ii) use commercially reasonable efforts to preserve their business organizations intact and maintain existing relations and goodwill with customers, suppliers and other third-parties, and (iii) maintain their respective books and records in the usual, regular and ordinary manner, on a basis consistent with past practice.

61

10.3.2 Between the Announcement Date and the Closing Date, except where (x) expressly permitted elsewhere in this agreement, in particular clause 10.3.5 below, or necessary to implement the transactions contemplated by this agreement or to implement certain transactions specifically set forth in the business plan of the Group Companies covering the fiscal years 2018 and 2019 as disclosed to the Purchaser prior to the signing of this agreement and contained in folder 1.4.1 of the Data Room (the Business Plan), (y) necessary to comply with applicable laws or (z) consented to in writing by the Purchaser (which consent shall not be unreasonably withheld or delayed, having due consideration for the interests of the Company and the Purchaser), the Seller shall not, and shall cause each of the Group Companies not to:

(a) except, as in the ordinary course of business or, if applicable, in order to implement certain transactions specifically set forth in the Business Plan, make any investment or capital expenditure in excess of EUR 500,000 (in words: five hundred thousand euros) in the aggregate during any period of twelve (12) months;

(b) act in a manner which is inconsistent with the provisions of this agreement or the performance of the obligations contemplated hereunder;

(c) authorize, effect or propose any amendment to, or change in, its articles of association (or equivalent documents);

(d) issue any share capital, debt securities or similar interest to any third-party (other than the Companies);

(e) undertake any merger, spin-off, contribution of assets, complete or partial liquidation, dissolution, restructuring, recapitalization or other form of similar reorganization;

(f) except, as in the ordinary course of business or, if applicable, in order to implement certain transactions specifically set forth in the Business Plan, acquire or dispose of any fixed assets relating to its business in excess of EUR 500,000.00 (in words: five hundred thousand euros);

(g) create or incur any encumbrance on the properties, rights or assets (including the Shares) of the Group Companies and to maintain such properties, rights or assets in good conditions;

62

(h) incur any indebtedness vis-à-vis third-parties except as in the ordinary course of business;

(i) make or extend any loan, advance or capital contributions to any third-party (other than any of the Group Companies), or incur a material amount of additional indebtedness for borrowed money or guarantee any such liabilities, outside the ordinary course of business;

(j) make or agree to make any material change in the terms and conditions of employment or engagement (including compensation) of any Key Employee, or hire or terminate the employment of any Key Employee;

(k) enter into any agreements or arrangements with unions (including IG Metall), employees’ representatives or employees that could reasonably (i) materially impede a restructuring or dismissal, or (ii) grant special rights to employees in case of a change of control of any of the Group Companies, (iii) result in deviation from terms and conditions of employment (including remuneration and benefits) as applicable on the Signing Date which would, individually or in the aggregate, reasonably be expected to have a material adverse effect on the Group Companies, taken as a whole, or (iv) taken as a whole, increase the total staff costs of the Group Companies by 2.5% (two point five per cent) or more per annum, unless such increase is market practice or results from the implementation of an agreement or arrangement by the German industry association relevant for the Business;

(l) materially amend any existing or institute any new employee benefits, including any pension, healthcare or welfare plan and any stock incentive plan;

(m) initiate or settle any individual claim, action, arbitration, dispute or other proceeding which would reasonably be expected to result in a payment or receipt by any of the Group Companies of EUR 500,000.00 (in words: five hundred thousand euros) or more in the aggregate during any period of twelve (12) months;

(n) enter into any hedging agreement or other derivative contract, other than non-speculative cash flow and/or balance sheet hedging that (A) is in the ordinary course of business consistent with past practice and (B) does not terminate as a result of the consummation of the transactions contemplated by this agreement;

63

(o) as of the Closing Date, incur, create, maintain or permit to be outstanding any indebtedness under the financing agreements entered into between the Group Companies and the third-parties set out in Annex 10.3.2(o) (Third-Party Financing Agreements);

(p) enter into any commitment or arrangement to do any of the actions set forth in the foregoing paragraphs (a) to (o).

10.3.3 The Seller shall, no later than three (3) Business Days prior to the Closing Date, deliver to the Purchaser a certificate in the form attached as Annex 10.3.3 (Negative Pledge Certificate) signed by the Seller confirming that it has complied and each of the Companies has complied, and that as of the Closing Date it will have complied and each of the Companies will have complied, with the provisions of clauses 10.3.1 and 10.3.2 (the Negative Pledge Certificate), provided that, if the Seller, or any of the Companies, has failed to comply with any of such provisions, the Negative Pledge Certificate shall set out the violations that have been committed (and for the avoidance of doubt, the delivery of the Negative Pledge Certificate does not constitute a limitation of the liability of the Seller under this agreement).

10.3.4 No leakage

(a) The Seller shall procure (x) that no Leakage, other than Permitted Leakage, will occur between the Effective Date and the Closing Date that has not been remedied prior to or on the Closing Date, and (y) that no arrangement or agreement has been made or will until the Closing Date be made that will result in any Leakage that has not been remedied prior to or on the Closing Date.

(b) Leakage shall mean:

(i) any payment or declaration of any interim, exceptional or other dividend or similar distribution of profits (whether in cash or in kind) of the Group Companies;

(ii) any asset transfer, purchase or disposal, other than under the Intra-Group Agreements, which is not made within the ordinary course of business and at arms’ length;

(iii) any payment in connection with services provided under the IT TSA and the Engineering Services Agreement at a price exceeding the current terms and conditions agreed upon between the Seller’s Affiliates and the Group Companies or not consistent with past practice, excluding the impact of any foreign exchange movement;

64

(iv) any return of capital (whether by repurchase, repayment, reduction, redemption, cancellation of any share capital, loan capital or other securities);

(v) any encumbrance created over any of the assets of the Group Companies other than by operation of law;

(vi) the grant of a waiver, release or deferral in respect of any sum due or obligation owed;

in each case of paragraphs (i) to (vi) above, by or on behalf of any of the Group Companies to, or on behalf of, or for the benefit of the Seller or any of the Seller’s Affiliates (except payments to other Group Companies);

(vii) any transaction with, or payment (whether in cash or in kind) to, or to the benefit of the Seller or any of the Seller’s Affiliates by, or on behalf of any of the Group Companies (except payments to other Group Companies) which is not made within the ordinary course of business and at arms’ length terms, provided that Intra-Group Agreements disclosed in the Data Room shall be deemed to be within the ordinary course of business and at arms’ length terms;

(viii) any option entitling the Seller and/or any of the Seller’s Affiliates to receive payments or to acquire assets from Tower Europe Group after the Closing Date, with the exception of payments in connection with services provided under the IT TSA and the Engineering Services Agreement;

(ix) any payment of Transaction Expenses by any of the Group Companies. Transaction Expenses shall mean the amount of, without duplication, (a) the fees, costs and expenses owed by the Group Companies to their investment bankers, attorneys, accountants, advisors, brokers and other professionals payable in connection with or relating to the negotiation of this agreement or the consummation of the transactions contemplated hereby (including the Pre-Sale Restructuring), and (b) the aggregate amount of any transaction bonuses, transaction commissions, transaction-related incentive payments, change of control, transaction-related retention, stay or similar compensatory payments owed by the Group Companies to any former or current director, officer, manager, consultant, or employee thereof (in such capacity) (in each case, including any social security, unemployment or other employment, withholding or payroll Taxes or similar amounts owed by or imposed on the Company, or for which the Company may otherwise be liable, in each case, triggered in connection with, as a result of, or arising from the payment of such aggregate amount); in each case undertaken or committed on or before the Closing Date; or

65

(x) any undertaking or commitment before or on the Closing Date to do, make or pay any of the above;

but, for the avoidance of doubt, does not include any Permitted Leakage.

(c) Permitted Leakage shall mean:

(i) any payments by the Company under or in connection with the Intercompany Loan;

(ii) any payment or commitment to pay as set forth in Annex 10.3.4(c)(ii) (Permitted Leakage).

10.3.5 Pre-Sale Restructuring

(a) The following measures shall not be considered a deviation from the ordinary course of business pursuant to clause 10.3.1 above:

(i) the carve-out, sale and transfer and any other measures in connection therewith prior to or on the Effective Date of all shares in Tower Automotive Holdings Asia B.V., a limited liability company incorporated under the laws of the Netherlands with registered seat in Baarn, the Netherlands, and address at Herikerbergweg 124, Luna ArenA, 1101 CM Amsterdam, the Netherlands, and registered with the Chamber of Commerce (Kamer van Koophandel) under registration number 34122239 (Tower Asia) and thereby indirectly of the direct and indirect subsidiaries and participations of Tower Asia set out in Annex 10.3.5(a)(i) (Tower Asia Group) (Tower Asia together with the aforementioned entities, the Tower Asia Group); and

66

(ii) the transfer, by means of contribution or other, and any other measures in connection therewith prior to or on the Effective Date, of the Intercompany Loan Consolidation Agreement dated 30 December 2014 and entered into on between the Company as lender and Tower Asia as borrower, to a newly-formed holding company outside the Tower Europe Group.

(b) For the avoidance of doubt, the Group Companies and the Purchaser shall incur no liability or responsibility whatsoever in respect of the measures to be implemented pursuant to clause 10.3.5(a) and the Seller shall indemnify and hold harmless the Purchaser against any and all Damages that may arise in connection with the Pre-Sale Restructuring; it being specified that none of the limitations set forth in clause 7.2 (De Minimis Amount, Threshold) and clause 7.3 (Overall scope of Seller’s liability pursuant to this agreement) shall apply to any indemnification due under this clause 10.3.5.

10.4 Insurance coverage

10.4.1 The Seller shall procure that the Group Companies and their business remain insured from the Signing Date until the Closing Date in substantially the same way as they are on the Signing Date and that all premiums due for such insurances are duly and timely paid.

10.4.2 The Purchaser shall procure that the Group Companies obtain insurance coverage in line with general industry standards effective from the Closing Date, it being understood that the insurance coverage provided to the Group Companies under Tower International Group insurance policies will cease with effect as of the Closing Date. The new insurance coverage shall also include any risks relating to the period prior to the Closing Date to the extent the existing insurance coverage is on a “claims made” basis.

10.5 Use of names, trademarks and trade names

10.5.1 The Purchaser shall or shall procure that as soon as reasonably practicable after the Closing Date and in any event within six (6) weeks after the Closing Date, the name of any Company that consists of or includes the word “Tower” is changed to a name which does not include that word.

67

10.5.2 The Purchaser shall ensure that without unreasonable delay after the Closing Date, however at the latest six (6) months thereafter, all Group Companies cease to use the “Tower” name or any logo, trademark, trade name or other derivation therefrom (together the Tower Designations). The Purchaser shall cause the Group Companies to remove or obliterate the Tower Designations from their signs, purchase orders, invoices, sales orders, labels, letterheads, shipping documents, internet websites and other items and materials of the business and otherwise six (6) months after the Closing Date at the latest, and shall procure that no such items and materials are put into use thereafter which bear similarity to the Tower Designations.

10.5.3 The Purchaser acknowledges that the Seller shall have no responsibility for claims by third-parties arising out of, or relating to, the use of the “Tower” name or marks by the Purchaser or the Group Companies or any of their affiliated companies within the meaning of sec. 15 of the AktG after the Closing Date, and the Purchaser undertakes to indemnify and hold harmless the Seller from and against any such third-party claims.

10.6 Retention of records

10.6.1 Subject to compliance with applicable data protection laws and for a period of seven (7) years as from Closing, or for such longer period as may be prescribed by law, the Purchaser shall, and shall procure that the Group Companies shall, retain any books, records and other written information relating to the Group Companies in respect of the period up to and including the Closing Date which are located at the offices of any of the Group Companies or which are held by or on behalf of, following the Closing Date, any Affiliates of the Purchaser within the meaning of sec. 15 of the AktG. The Seller shall notify the Purchaser, no later than three (3) months before the expiration of the period mentioned in sentence 1 of this clause, should it want to take at the expiration of such period, at its own cost, copies of any or all of the books, records and other written information relating to the Group Companies in respect of the period up to and including the Closing Date.

10.6.2 Subject to compliance with applicable data protection laws and for a period of seven (7) years as from Closing, or for such longer period as may be prescribed by law, the Seller and the Seller’s Affiliates shall retain any books, records and other written information relating to the Group Companies which they hold as of the Closing Date (to the extent these are, as of the Closing Date, not held by the Group Companies, the Purchaser or any Affiliates of the Purchaser within the meaning of sec. 15 of the AktG). The Purchaser shall notify the Seller, no later than three (3) months before the expiration of the period mentioned in sentence 1 of this clause, should it want to take at the expiration of such period, at its own cost, copies of any or all of the books, records and other written information relating to the Group Companies in respect of the period up to and including the Closing Date.

68

10.7 Seller release

Effective as of the Closing Date (but only if the Closing actually occurs), except for any rights or obligations under this agreement or any of the other transaction documents, to the fullest extent permitted by applicable law, the Purchaser, on behalf of itself and each of the Group Companies, hereby releases and discharges (i.e., would not raise any claim against) the Seller or any of the Seller’s Affiliates or any of its or their successors, officers, directors, employees or agents from any and all suffered damages the Purchaser or any of the Group Companies now has or may have in the future against such persons for or by reason of any matter, cause or thing related to actions or omissions occurring prior to or as of the Closing Date; in each case, unless and to the extent (i) such liability is based on fraud, willful act (vorsätzliche Handlung) or fraudulent misrepresentation (arglistige Täuschung) or (ii) the Purchaser has the right to claim damages or indemnification from the Seller in respect to such damages under the terms of this agreement.

10.8 Non-competition

10.8.1 For a period of eighteen (18) months commencing on the Closing Date (the Restricted Period), the Seller shall not, and shall cause the Seller’s Affiliates not to, directly or indirectly, (i) engage in the Business in those countries of the European Union where the Group Companies are currently active (the Restricted Area) or (ii) acquire an interest in, control, manage or operate any person or entity that engages directly or indirectly in the Business in the Restricted Area.

10.8.2 During the Restricted Period and with regard to Business in the Restricted Area, the Seller shall not, and shall not permit any of the Seller’s Affiliates to, directly or indirectly, solicit or entice, or attempt to solicit or entice, any clients or customers of the Group Companies for purposes of diverting their business or services from the Group Companies in the Restricted Area.

69

10.8.3 Clauses 10.8.1 and 10.8.2 above do not apply to (i) any ownership of securities constituting not more than 5% (five per cent) of the outstanding voting power of any person that is listed on any national or international securities exchange or traded actively in a national over-the-counter market and to (ii) the acquisition by the Seller, the Seller’s Guarantor or any Seller’s Affiliates of any person that is not headquartered in the European Union. Furthermore, clause 10.8.1 does not apply to an acquisition of securities (including via a takeover, merger or other type of transaction) in the Seller’s Guarantor, and clauses 10.8.1 and 10.8.2 above immediately cease to apply in case of a change-of-control, i.e. a case where a third-party (other than a Seller’s Affiliate) acquires a majority of the securities or voting rights, in the Seller’s Guarantor.

10.9 Third-party consents and notices

10.9.1 The Seller and/or any of the relevant Seller’s Affiliates or Group Companies, on the one hand, and the Purchaser, on the other hand, shall approach together, as soon as practicable after the Announcement Date, certain customers, suppliers, vendors and other business relations in order to introduce the Purchaser to such counterparties and, if applicable, obtain their consents, approvals, authorizations or waivers required under the terms of the agreements entered into with them as a result of the transactions contemplated by this agreement.

10.9.2 The Seller shall, without incurring any liability in this respect, use reasonable best efforts to give all notices necessary to consummate the transactions contemplated by this agreement without resulting in any breach or violation of, a default under, or an acceleration of any obligations under any of the Material Contracts or the creation of a lien on any of the material assets (whether tangible or intangible) necessary for the continued operations of the Business, taken as a whole.

10.10 Capital expenditures

The Group Companies intend to have purchased and added in the Property, Plant and Equipment captions of the balance sheet of the Unaudited Financial Statements an amount of capital expenditure for the fiscal year 2018 at least equal to EUR 45,000,000 (in words: forty five million euros) in accordance with the Capex Budget of the Group Companies attached hereto as Annex 10.10 (2018 Capex Budget). In the event of a shortfall between the amount of capital expenditure for the fiscal year 2018 as set out in the Unaudited Financial Statements and EUR 45,000,000 (in words: forty five million euros), the Purchase Price shall be reduced by such shortfall amount (the Capex Shortfall Amount). The Seller will procure that the Unaudited Financial Statements expressly set out the Capex Shortfall Amount, if any. For the avoidance of doubt, none of the limitations set forth in clause 7.2 (De Minimis Amount, Threshold) and clause 7.3 (Overall scope of Seller’s liability pursuant to this agreement) shall apply to any liability of the Seller due under this clause 10.10.

70

10.11 Steering Committee

Promptly following the Announcement Date, the Seller’s Guarantor and the Purchaser shall establish a joint steering committee (the Steering Committee) to discuss in good faith and reasonably cooperate with respect to (i) planning and preparing for the integration of the Group Companies with the Purchaser and (ii) any requests by the Group Companies to take any of the actions set forth in clause 10.3.2 (No deviation from ordinary course of business; no leakage), in each case in a manner that is fully consistent with and in compliance with all relevant antitrust and competition laws and regulations. The Seller’s Guarantor and the Purchaser will each designate two (2) representatives to the Steering Committee, one of which will be designated as the lead contact member for each of them. Each of such parties may (i) from time to time, in its sole discretion and upon notice to the other parties, designate other individuals to serve as its representative on the Steering Committee, and (ii) designate a substitute employee to temporarily attend and perform the functions of such party’s designee at any meeting of the Steering Committee. It is anticipated that, to the extent reasonably practicable, the Steering Committee shall meet on a weekly basis (other than during holiday periods) by videoconference, teleconference or in person. Meetings of the Steering Committee shall be effective only if at least one (1) representative of each of the Seller’s Guarantor and the Purchaser is present or participating in such meeting.

11. Termination of intra-group relationships; transitional services

11.1 Intra-group relationships

11.1.1 The Seller and the Purchaser agree that (i) all agreements between the Seller or any of the Seller’s Affiliates on the one hand and any of the Group Companies on the other hand and (ii) all other services provided by the Seller or any of the Seller’s Affiliates to any of the Group Companies, and in each case which are listed in Annex 11.1.1 (Intra-Group Agreements) ((i) and (ii) herein collectively Intra-Group Agreements) shall be terminated and settled as of the Closing Date at the latest without any prepayment penalty or other costs arising from such termination for any of the Group Companies, the Seller or any of the Seller’s Affiliates.

71

11.1.2 In the event any Intra-Group Agreements cannot be terminated as provided for in clause 11.1.1 above, such Intra-Group Agreements shall be terminated as soon as reasonably possible after the Closing Date at no cost for any of the Group Companies. The Purchaser shall cooperate, and shall procure that the Group Companies cooperate, with the Seller and the Seller’s Affiliates to effect such termination of the Intra-Group Agreement.

11.2 Transitional and Engineering Services

11.2.1 Each of the Seller’s Guarantor and the Purchaser shall discuss in good faith how to co-operate with one another and to perform such actions that are reasonably necessary to ensure a smooth transition of the Group Companies and the Business at Closing.

11.2.2 The Seller’s Guarantor shall ensure that, no later than on the Closing Date, the Group Companies validly own or lease, or are otherwise authorized to use the Information Technology as from the Closing and, to this end, shall validly transfer, in compliance with applicable laws (including the Regulation (EU) 2016/679 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data), any and all Information Technology to the Tower Europe Group or, if necessary, cause the Group Companies to purchase such new licenses (collectively, the IT Transfers). Any costs, fees and expenses incurred by any of the Group Companies in connection with the performance of this covenant (the IT Standalone Costs) shall be treated as Debt for the purposes of this agreement and reduce the Purchase Price accordingly. Furthermore, the Seller’s Guarantor shall fully indemnify and hold harmless any of the Group Companies for any Damages (going beyond the IT Standalone Costs) which may have been suffered or incurred by any of them as a result of the IT Transfers. For the purposes of this agreement, Information Technology shall mean the computers, software, data, archives, databases, firmware, middleware, servers, workstations, routers, hubs, switches, data communication lines and all other tangible information technology and hosting equipment and/or systems necessary for the Group Companies to conduct on a standalone basis their respective operations and Business as currently conducted.

11.2.3 On the Closing Date, the Seller or the relevant Seller’s Affiliates on the one hand and the relevant Group Company on the other hand will enter into an IT transitional services agreement substantially in the form as set out in Annex 11.2.3 (IT TSA) (the IT TSA).

72

11.2.4 Within six (6) months after the Announcement Date, the Purchaser and the Seller’s Guarantor shall jointly prepare and implement in good faith an IT migration plan which shall detail the steps, procedures, responsible persons within the Group Companies and periods needed to complete the separation of the Group Companies from the IT services provided under the IT TSA by the Seller’s Guarantor and/or the respective Seller’s Affiliates. Furthermore, during that six (6) month period referred to above, (i) the Seller’s Guarantor shall cooperate with the Purchaser in the preparation and implementation of the migration plan and provide it and its representatives (including, for the avoidance of doubt, its advisors), as soon as reasonably practicable, with all information and other assistance (including access to its relevant personnel and allocating to such preparation and implementation all necessary personnel and resources) as may be reasonably required by the Purchaser for the preparation and implementation of such migration plan and (ii) such cooperation from the Seller’s Guarantor in the preparation and implementation of the IT migration plan shall be at no cost for the Purchaser or any of its Affiliates.

11.2.5 Upon the Purchaser’s request, the Parties shall negotiate in good faith the terms and conditions of an engineering services agreement to be entered into among themselves on the Closing Date at terms and conditions substantially equivalent to the ones currently in place (Engineering Services Agreement).

12. Release of Securities/Replacement as Contract Counterparty

12.1 Definitions

12.1.1 Securities shall mean all guarantees, suretyships, letters of comfort, letters of support or other securities of any kind which the Seller or the Seller’s Affiliates have issued or will issue with respect to the Group Companies prior to the Announcement Date listed in Annex 12.1.1 (List of Securities).

12.1.2 Security Liabilities shall mean collectively all present and future obligations and liabilities of the Seller and the Seller’s Affiliates under or in connection with the Securities.

12.2 Assumption and discharge of Security Liabilities

12.2.1 With effect as of the Closing Date, the Purchaser hereby assumes with full discharge (befreiende Schuldübernahme) of the Seller and the Seller’s Affiliates the Security Liabilities arising from the Securities. The Purchaser shall use commercially reasonable efforts that within two (2) months after the Closing Date (Security Release Period) (i) the Seller and the Seller’s Affiliates are fully released from any Security Liabilities and (ii) any documents or instruments evidencing the Securities are returned to the Seller or the relevant Seller’s Affiliates, as the case may be, provided that the Seller and the Seller’s Affiliates shall fully cooperate and support the Purchaser using commercially reasonable efforts. It is understood that the Purchaser’s obligation to procure for (einstehen für) such release from Security Liabilities shall continue to exist after the Security Release Period to the extent such release has not yet been achieved.

73

12.2.2 In the event that the Purchaser is not able to procure (dafür einstehen) that the Seller and the Seller’s Affiliates are released by the beneficiaries from all Security Liabilities three (3) months after the end of the Security Release Period, Purchaser agrees to approach jointly with the Seller and/or the relevant Seller’s Affiliate the respective beneficiaries that did not yet release Seller or the relevant Seller’s Affiliates in order to achieve a release. Purchaser shall report at the end of each month on the measures undertaken to procure Seller’s and Seller’s Affiliates release from the Security Liabilities. The Purchaser shall respond in reasonable detail to any questions the Seller may have with respect to the Purchaser’s efforts undertaken and beneficiaries’ attitude with respect to the release from the Security Liabilities.

13. Confidentiality and press releases

13.1 Confidentiality; press releases; public disclosure

13.1.1 The Parties and the Seller’s Guarantor agree that, except as may be required to comply with the requirements of any applicable laws, and the rules and regulations of any stock exchange to which any Party or its Affiliate is subject, the contents of this agreement and all information obtained in connection with this agreement and the transactions contemplated hereby shall be treated in accordance with the terms of the confidentiality agreement entered into between the Seller’s Guarantor and the Purchaser on 16 July 2018 (the Confidentiality Agreement). No press release or other public announcement concerning the transactions contemplated by this agreement shall be made by either Party unless the form and text of such announcement shall first have been approved in writing by the other Parties (which approval shall not be unreasonably withheld or delayed) except that the Parties have already agreed that they shall be authorized to issue on the Closing Date a press release substantially in the form attached as Annex 13.1.1 (Press release). The foregoing shall not restrict or prohibit the Purchaser or any of its Affiliates from disclosing the contents of this agreement and all information obtained in connection with this agreement and the transactions contemplated hereby to their respective shareholders, Board members, employee representative body members, employees, customers, suppliers, vendors and other business relations to the extent the Purchaser reasonably determines in good faith that such announcement is necessary or advisable.

74

13.1.2 From and after the Closing Date, the Parties and the Seller’s Guarantor mutually agree that the Confidentiality Agreement will terminate without further action by the parties thereto. Its incorporation by reference into this agreement shall, however, remain unaffected.

13.2 Seller’s confidentiality

Unless previously permitted by the Purchaser or any of the Group Companies, for a period of three (3) years after the Closing Date, the Seller and the Seller’s Guarantor shall keep confidential and not disclose to any third-party and not use any information received or held by the Seller, the Seller’s Guarantor or any of their respective Affiliates, representatives or advisers relating to the Tower Europe Group (including business or trade secrets of the Group Companies and their business), other than those which have become publicly known without any violation of a confidentiality obligation towards the Purchaser or the Group Companies, or which the Seller is required to disclose as necessary to comply with any legal requirements.

13.3 Purchaser’s confidentiality; return of documents

In the event that either Party withdraws (tritt zurück) from this agreement pursuant to clause 4.3 (Rescission Right) above, the Purchaser undertakes to keep confidential all information received from the Seller in connection with the transaction contemplated by this agreement and to return or destroy in accordance with the applicable provisions of the Confidentiality Agreement all documents and information embodied otherwise which it received from the Seller, together with any copies thereof.

14. Assignment of rights and obligations

This agreement and any rights and obligations hereunder may not be assigned and transferred, in whole or in part, without the prior written consent of the other Parties hereto; provided, that nothing in the foregoing shall prohibit the Purchaser from making any assignment of rights (but, for the avoidance of doubt, not obligations) under this agreement to any of its Affiliates so long as such Affiliate agrees in writing towards the Seller to be bound by all of the terms, conditions and provisions contained in this agreement prior to such transfer of rights, provided, further, no such assignment shall release the Purchaser from its obligations under this agreement. Any purported assignment, hypothecation or transfer in breach of this clause 14 shall be null and void.

75

15. Seller’s Guarantor and indemnification

15.1 Guarantee

15.1.1 The Seller’s Guarantor hereby irrevocably and unconditionally guarantees, and shall be jointly and severally liable with the Seller and the Loan Seller regarding their obligations under this agreement (gesamtschuldnerische Haftung), by way of an independent promise of guarantee (selbständiges Garantieversprechen) pursuant to sec. 311 para. 1 of the BGB, the full, due and proper fulfilment of all of the obligations of the Seller and the Loan Seller pursuant to this agreement and any other agreement or instrument executed pursuant to this agreement, regardless of any alternations, waivers or extensions to any such agreement or instrument, and further agrees that it shall not be necessary to institute or exhaust remedies or causes of action against the Seller as a condition of the obligations of the Seller’s Guarantor pursuant to this clause 15.1.

15.1.2 The Seller Parties are jointly and severally liable (gesamtschuldnerische Haftung) for the guarantees made by the relevant Seller Party pursuant to clause 6 (Seller Parties’ guarantees).

15.2 Indemnification

Subject to the limitations set forth in this agreement, the Seller’s Guarantor shall (i) indemnify and hold harmless on first demand the Purchaser from any claims brought by the Purchaser against the Seller and/or the Loan Seller and (ii) indemnify the Purchaser or any other members of the Purchaser’s group against any Damages suffered or incurred by any of them as a result of the Seller and/or the Loan Seller’s failure to comply properly and punctually with its obligations under this agreement.

16. Transfer taxes and costs, costs of advisors

16.1 Transfer taxes and costs

All transfer taxes, including real estate transfer taxes (Grunderwerbsteuer), resulting from the execution or consummation of this agreement shall be borne by the Purchaser. The same shall apply to all fees and other costs in connection with antitrust proceedings and compliance with other regulatory regulations.

76

16.2 VAT

The sale of the Shares and the Intercompany Loan shall not be subject to VAT and the Seller shall not opt for VAT or waive the applicable VAT exemption.

If, however, the sale of the Shares and/or of the Intercompany Loan were subject to VAT, the Purchaser shall pay VAT in addition to the Purchase Price.

16.3 Costs of advisors

Apart from what is set out in clause 16.1 above, each of the Parties and the Seller’s Guarantor shall bear its own costs and expenses incurred in connection with the preparation, execution and consummation of this agreement, including, without limitation, any professional fees, charges and expenses of its advisors. The Seller and the Seller’s Guarantor shall ensure that none of the fees and expenses for which they are responsible will be charged to the Group Companies.

17. Notices

17.1 Form of notices

Any legal statements and other notices in connection with this agreement (collectively the Notices) shall be made in writing (Schriftform) unless notarisation or any other specific form is required by mandatory law. The written form shall include transmission by electronic mail with acknowledgement of receipt from the recipient by electronic mail, registered post or courier using an internationally recognized courier company. A notice shall be effective upon receipt and shall be deemed to have been received (i) at the time of delivery, if delivered by hand, (ii) at the time of first delivery, if delivered by registered post or courier or (iii) at the time of transmission if delivered by electronic mail; provided that in either case, where delivery occurs outside working hours, notice shall be deemed to have been received at the start of working hours on the next following Business Day.

17.2 Notices to the Seller

Any Notices to be delivered to the Seller hereunder shall be addressed as follows:

Tower Automotive Holdings III Coöperatie U.A.

c/o Tower International, Inc.

Attn.: Jeffrey L. Kersten and Nanette Dudek

17672 N. Laurel Park Drive, Suite 400E

77

Livonia, MI 48152

USA

Email: kersten.jeff@towerinternational.com / dudek.nanette@towerinternational.com (for information purposes only)

with a copy to its advisor (for information purposes only):

Freshfields Bruckhaus Deringer LLP

Attn.: Dr. Kai Hasselbach / Dr. Ralph Kogge

Maximiliansplatz 13

80333 München

Germany

Email: kai.hasselbach@freshfields.com / ralph.kogge@freshfields.com

17.3 Notices to Loan Seller

Any Notices to be delivered to the Loan Seller hereunder shall be addressed as follows:

Tower Automotive Holdings USA, LLC

c/o Tower International, Inc.

Attn.: Jeffrey L. Kersten and Nanette Dudek

17672 N. Laurel Park Drive, Suite 400E

Livonia, MI 48152

USA

Email: kersten.jeff@towerinternational.com / dudek.nanette@towerinternational.com (for information purposes only)

with a copy to its advisor (for information purposes only):

Freshfields Bruckhaus Deringer LLP

Attn.: Dr. Kai Hasselbach / Dr. Ralph Kogge

Maximiliansplatz 13

80333 München

Germany

Email: kai.hasselbach@freshfields.com / ralph.kogge@freshfields.com

17.4 Notices to the Purchaser

Any Notices to be delivered to the Purchaser hereunder shall be addressed as follows:

78

Financière Snop-Dunois

Attn.: Michel-Henri Pinaire / Jean-François Le Bos

22 avenue des Nations

BP 56314 Villepinte

95940 Roissy CDG Cedex

France

Email: michel.henri.pinaire@snop.eu / jflebos@snop.eu

with a copy to its advisor (for information purposes only):

Sullivan & Cromwell LLP

Attn.: Olivier de Vilmorin / Dr. York Schnorbus

51 rue La Boétie

75008 Paris

France

Email: devilmorino@sullcrom.com / schnorbusy@sullcrom.com

17.5 Notices to the Seller’s Guarantor

Any Notices to be delivered to the Seller’s Guarantor hereunder shall be addressed as follows:

Tower International, Inc.

Attn.: Jeff Kersten and Nanette Dudek

17672 N. Laurel Park Drive, Suite 400E

Livonia, MI 48152

USA

Email: kersten.jeff@towerinternational.com / dudek.nanette@towerinternational.com (for information purposes only)

with a copy to its advisor (for information purposes only):

Freshfields Bruckhaus Deringer LLP

Attn.: Dr. Kai Hasselbach / Dr. Ralph Kogge

Maximiliansplatz 13

80333 München

Germany

Email: kai.hasselbach@freshfields.com / ralph.kogge@freshfields.com

79

17.6 Change of address

The Parties and the Seller’s Guarantor shall communicate in writing changes in any of the addresses set forth in clauses 17.2 through 17.5 as soon as possible to the other Party and the Seller’s Guarantor. In the absence of such communication, the address stated above shall remain in place.

17.7 Copies to advisors

The receipt of copies of Notices hereunder by the advisors of the Parties and the Seller’s Guarantor shall not constitute or substitute the receipt of such communication by the Parties and the Seller’s Guarantor themselves, irrespective of whether the delivery of such copy was mandated by this agreement.

18. Miscellaneous

18.1 Governing law

This agreement shall be governed by, and construed in accordance with, the laws of Germany except for the transfer in rem of the Shares which shall be governed by the laws of the Netherlands and the assignment of the Intercompany Loan which shall be governed by the laws of the State of Delaware (USA). The form of this agreement shall be governed by French law. For the avoidance of doubt, notarization provisions of German law and other provisions of German law regarding the form of the transfer of the Shares which are not otherwise applicable to transfers of shares in Dutch companies shall not apply.

18.2 Disputes

18.2.1 Unless the Parties agree otherwise in writing, all disputes arising out of or in connection with this agreement or its validity shall be finally settled in accordance with the Arbitration Rules of the German Arbitration Institute (DIS), as in effect from time to time, without recourse to the ordinary courts of law. The arbitral tribunal shall be comprised of three members. The seat of arbitration is Frankfurt am Main, Germany. The language of the arbitration shall be English. Written evidence may be submitted in English or German. The rules of law applicable to the merits shall be German law.

80

18.2.2 The award rendered by the arbitration shall be final and binding upon the Parties. Any judgment upon the award of the arbitration may be entered in any court having jurisdiction thereof. Notwithstanding the foregoing, the right of either Party to file for temporary relief at the ordinary courts remains unaffected and place of jurisdiction in such case shall be Frankfurt am Main, Germany. In the event that mandatory law requires the adjudication of a dispute arising out of or in connection with the agreement by an ordinary court, exclusive jurisdiction – to the extent legally permissible – shall be with the competent courts in Frankfurt am Main, Germany.

18.3 Business Day

Business Day means a day (other than a Saturday or Sunday) on which banks are open for business in Paris (France), Amsterdam (the Netherlands), Cologne (Germany), Frankfurt am Main (Germany) and New York (USA).

18.4 Amendments to this agreement

Any amendment, supplement (Ergänzung) or termination (Aufhebung) of this agreement, including this provision, shall be valid only if made in writing, except where notarisation or any other stricter form is required by law. Clause 17.1 sentences 2 and 3 above shall apply mutatis mutandis.

18.5 Third-party enforcement rights

Except as expressly stipulated in this agreement, this agreement shall not grant any right to persons who are not a party to this agreement. To the extent this agreement expressly grants rights to third-parties, the Parties and the Seller’s Guarantor shall be permitted to change or exclude such rights at any time without the consent of the respective third-party.

18.6 Acknowledgement of Notary

The Parties acknowledge and agree that with reference to the Rules of Professional Conduct (Verordening beroeps- en gedragsregels) of the Royal Dutch Organisation of Civil Law Notaries (Koninklijke Notariële Beroepsorganisatie), (i) the Notary will execute the notarial deeds connected with this agreement and that (ii) the Notary is related to De Brauw Blackstone Westbroek N.V. as civil law notary.

81

18.7 Headings; references to German legal terms; interpretation; references to clauses

18.7.1 The headings and sub-headings of the clauses and paragraphs contained in this agreement are for convenience and reference purposes only. They shall be disregarded for purposes of interpretation of this agreement.

18.7.2 Where a set of facts is to be analyzed by reference to the laws of a foreign jurisdiction, any reference in this agreement to any German legal term shall be deemed to include a reference to the equivalent (funktionsgleich) legal term under the laws of such jurisdiction. Where foreign law does not provide for any corresponding legal term, such legal term as functionally comes closest to the German legal term shall be used instead.

18.7.3 Where the English wording of this agreement is followed by a German legal term set in parenthesis and in italics, the German legal term shall prevail.

18.7.4 Unless the context requires otherwise, the phrases “including”, “including, in particular” and “in particular” shall be interpreted to be non-restrictive and without limitation.

18.7.5 Any reference made in this agreement to any clauses without further indication of a law or an agreement shall mean clauses of this agreement.

18.8 Annexes

All exhibits to this agreement form an integral part of this agreement.

18.9 Entire Agreement

This agreement constitutes the entire agreement between the Parties with respect to the subject matter covered thereby and supersedes all previous agreements and understandings, whether written or verbal, between the Parties with respect to the subject matter of this agreement or parts thereof.

18.10 Severability

Should any provision of this agreement be or become, in whole or in part, void (nichtig), ineffective (unwirksam) or unenforceable (undurchsetzbar), the validity, effectiveness and enforceability of the remaining provisions of this agreement shall not be affected. Any such invalid, ineffective or unenforceable provision shall be deemed replaced by such valid, effective and enforceable provision as comes closest to the economic intent and purpose of the invalid, ineffective or unenforceable provision as regards the subject-matter, extent (Maß), time, place and scope (Geltungsbereich) of the relevant provision. The aforesaid shall apply mutatis mutandis to any gap (Lücke) that may be found to exist in this agreement.

[signature pages to follow]

82

Executed in counterparts, on 6 December 2018.

Tower Automotive Holdings III Coöperatie U.A.,		Tower Automotive Holdings USA, LLC,
in Livonia, Michigan, USA		in Livonia, Michigan, USA
/s/ Dennis C. Pike		/s/ Jeffrey L. Kersten
By:	Dennis. C. Pike	By:	Jeffrey L. Kersten
Title:	Managing Director	Title:	Vice President
/s/ Jeffrey L. Kersten
By:	Jeffrey L. Kersten
Title:	Managing Director
Financière SNOP Dunois S.A.,		Tower International, Inc.,
in Cologne (Germany)		in Livonia, Michigan, USA
/s/ Michel Henri Pinaire		/s/ Jeffrey L. Kersten
By:	Michel Henri Pinaire	By:	Jeffrey L. Kersten
Title:	President and CEO	Title:	Executive Vice President and CFO

83

EX-10.70

Exhibit 10.70

SEPARATION AND GENERAL RELEASE AGREEMENT

THIS SEPARATION AND GENERAL RELEASE AGREEMENT (this “Separation Agreement”) is entered into between Michael Rajkovic (“Employee”) and Tower Automotive Operations USA I, LLC (the “Employer”). For purposes of this Separation Agreement, “Company Group” means the Employer and its Affiliates which shall include any entity that directly or indirectly controls, is controlled by, or is under common control with the Employer and provided that, for purposes of this Release, Affiliate shall include Tower International, Inc. and any entity owned or controlled, directly or indirectly, by Tower International, Inc.

1.          Separation from Employment. The parties agree that the reason for Employee’s separation of employment with the Employer and/or the Company Group is due to Employee’s retirement, effective December 14, 2018 (the “Separation Date”). Effective as of the Separation Date, Employee hereby resigns from all positions (including any board seats) that he holds with the Company Group effective as of the Separation Date and agrees to take all actions that may be necessary or appropriate to effectuate such resignations. Although Employee would not otherwise be eligible for any of the severance payments or benefits set forth in the Employment Agreement, dated as of January 19, 2017, by and between Employee and Employer (the “Employment Agreement”), in consideration of, and subject to, the terms and conditions set forth in this Separation Agreement, the Employer is willing to provide Employee with the payments and benefits set forth in Section 4 hereof.

2.          Employee General Release of the Released Parties. In consideration of the payments to be made and the benefits to be received by Employee pursuant to Section 4 of this Separation Agreement, subject to Employee’s execution of this Separation Agreement in accordance with Section 12 hereof, and provided Employee does not revoke this Separation Agreement within the period of time permitted for revocation under Section 12(B) of this Separation Agreement, Employee, on his own behalf and for Employee’s spouse, heirs, successors, assigns, executors and representatives of any kind (collectively, “Releasors”) hereby irrevocably and unconditionally releases and forever discharges the Employer, the Company Group, and their respective successors and assigns (collectively “Tower”) and each of their respective present and former employees, directors, officers, agents, partners, shareholders, and insurers, including without limitation all persons acting by, through, under or in concert with any of them (collectively, “Releasees”), from any and all claims, actions, demands, causes of action, costs, expenses, attorney fees, and all liabilities whatsoever of any kind or nature, known or unknown, fixed or contingent, which Employee has, had, or may ever have against the Releasees relating to or arising or having arisen out of or in connection with Employee’s employment or separation from employment with Tower, from the beginning of time up to and including the date Employee executes this Release, excepting only claims or rights that, as a matter of law cannot be released.

1

This release includes, without limitation, (a) law or equity claims; (b) contract (express or implied), breach of contract, or tort claims; (c) claims for wrongful discharge, retaliatory discharge, whistle blowing, libel, slander, defamation, unpaid compensation, wage and hour violations, intentional infliction of emotional distress, fraud, public policy contract or tort, and implied covenant of good faith and fair dealing, whether based in common law or any federal, state or local statute; (d) claims under or associated with any of the Employer’s or Company Group’s equity compensation plans or arrangements, including without limitation stock options, expenses, salary, bonuses, profit sharing or fringe benefits; (e) claims arising under any federal, state, or local laws of any jurisdiction that prohibit age, sex, race, national origin, color, disability, religion, veteran, military status, sexual orientation, or any other form of discrimination, harassment, or retaliation (including without limitation under Title VII of the Civil Rights Act of 1964; the Civil Rights Action of 1991; the Rehabilitation Act; the Americans with Disabilities Action of 1990; the Equal Pay Act; the Fair Labor Standards Act, except as prohibited by law; the Age Discrimination in Employment Act of 1967; the Older Workers Benefit Protection Act; the Worker Adjustment and Retraining Notification Act; the Family and Medical Leave Act, except as prohibited by law; the Sarbanes-Oxley Act; the Uniformed Services Employment and Reemployment Rights Act of 1994, the Lilly Ledbetter Fair Pay Act or any other foreign, federal, state or local law or judicial decision); (f) claims arising under the Employee Retirement Income Security Act of 1974, as amended; and (g) any other statutory or common law claims related to Employee’s employment or the separation of Employee’s employment. Employee understands and agrees that this release is intended to waive all claims of every kind and nature, whether known or unknown, actual or contingent, asserted or unasserted, arising under common law, statutory law or otherwise; no claim of any sort is reserved. Employee also waives any claim to reinstatement or re-employment with the Employer or any member of the Company Group following the Separation Date.

Without limiting the foregoing paragraph, Employee understands and acknowledges that the release set forth above specifically releases and waives any claims of age discrimination, known or unknown, and any rights he may have under the Age Discrimination in Employment Act of 1967 (“ADEA”), as amended by the Older Workers Benefit Protection Act (“OWBPA”) arising prior to the effective date of this Separation Agreement, and that this waiver and release is knowing and voluntary.

Notwithstanding anything contained herein to the contrary, this Separation Agreement does not release any indemnification or other rights Employee may have in accordance with the governing instruments of the Company Group or under any director and officer liability insurance maintained by the Company Group with respect to liabilities arising as a result of Employee’s service as an officer or director of the Company or an Affiliate.

Employee represents that Employee is not aware of and has not engaged in any activity that would constitute wrongful conduct including, but not limited to, fraud, misrepresentation, or any conduct contrary to existing policies of the Employer or the Company Group.

3.          Representations; Covenant Not to Sue. Employee hereby represents and warrants that (A) Employee has not filed, caused or permitted to be filed any pending proceeding (nor has Employee lodged a complaint with any governmental or quasi-governmental authority) against any of the Releasees, nor has Employee agreed to do any of the foregoing, (B) Employee has not assigned, transferred, sold, encumbered, pledged, hypothecated, mortgaged, distributed, or otherwise disposed of or conveyed to any third party any right or claim against any of the Releasees which has been released in this Separation Agreement, and (C) Employee has not directly or indirectly assisted any third party in filing, causing or assisting to be filed, any claim against any of the Releasees. Except as set forth in Section 9 below, Employee covenants and agrees that Employee shall not encourage or solicit or voluntarily assist or participate in any way in the filing, reporting or prosecution by himself or any third party of a proceeding or claim against any of the Releasees based upon or relating to any claim released by Employee in this Separation Agreement.

2

4.          Payments, Benefits. As good consideration for Employee’s execution, delivery and non-revocation of this Separation Agreement, and subject to Employee’s compliance with the provisions of Section 6 of this Separation Agreement, Employer shall provide Employee (or Employee’s estate in the event of Employee’s death) with the following:

a) continued payment of Employee’s current rate of base salary ($650,000 per annum) through December 31, 2018.

b) separation pay in the cumulative amount of $650,000, which shall be equal to the “Base Severance Amount” that would have been payable pursuant to Section 5.2.1(b)(i)(A) of the Employment Agreement had Employee terminated employment in accordance with the terms thereof, and which will be paid, subject to the last paragraph of this Section 4, in twelve (12) equal monthly installments, less applicable tax withholdings.

c) an additional separation payment payable, subject to the last paragraph of this Section 4, in a lump sum (less applicable tax withholdings),which shall be equal to the “Bonus Severance Amount” that would have been payable pursuant to Section 5.2.1(b)(i)(B) of the Employment Agreement had Employee terminated employment in accordance with the terms thereof, in the amount of (i) $731,700, plus (ii) an amount equal to the bonus, if any, that is earned by Employee for 2018. The bonus amount for 2018, if any, will be based on the level of achievement of performance for bonuses paid to active employees for 2018 and assuming Employee was employed for all of 2018.

d) Employee’s outstanding restricted stock units (21,644 units) shall continue to vest in accordance with the regularly scheduled vesting schedule applicable to such units, i.e. without acceleration of the regular vesting schedule; provided, however, that such units shall become fully vested in the event that a “Change in Control” (as defined in the Tower International, Inc. 2010 Equity Incentive Plan, as amended and restated effective as of March 6, 2014 (the “Equity Incentive Plan”)) occurs prior to expiration of such vesting schedule.

e) Employee’s Performance Awards granted in 2016, 2017 and 2018 shall continue to vest and be paid in accordance with the regularly scheduled vesting and payment schedules applicable thereto; provided that to the extent that any performance period would have extended past December 31, 2019 (the “Retirement Date” under the Employment Agreement), performance shall be determined as though the performance period ended on December 31, 2019, without proration of the amount payable. Notwithstanding the foregoing, if a Change in Control (as defined above) occurs before all of such Performance Awards are paid, the Performance Awards that are then outstanding shall thereupon vest and be paid based on target level performance, without proration of the amount payable.

3

f) Subject to Employee’s (or Employee’s covered dependents’) timely election of, and continued eligibility for, continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA Coverage”) under the Employer’s group health plan(s) which cover Employee as of the date of the Separation Date, the Employer shall waive (or reimburse the Employee on a monthly basis for) the cost of such COBRA Coverage to the extent that that such cost exceeds the cost that the Employer charges active employees for similar coverage until the earlier of (x) the date that such COBRA Coverage terminates (but for not longer than twelve (12) months of COBRA Coverage), or (y) the date that the Employee is covered under another group health plan.

For purposes of this Separation Agreement, the items listed in a) through f) above are referred to collectively as the “Separation Payments”. Employee acknowledges that Employee is not otherwise entitled to receive the Separation Payments. Employee further acknowledges that nothing in this Separation Agreement shall be deemed to be an admission of liability on the part of any of the Releasees. Employee agrees that Employee will not seek anything further from any of the Releasees.

The amount referenced in clause (ii) of c) above shall be paid on or before March 15, 2019. The payments set forth in b) and clause (i) of c) above shall be made or commence with the first payroll period ending after June 15, 2019, and the first installment of amounts payable under b) shall include the cumulative amount of all installments that would have been paid prior thereto had such installments commenced immediately following January 1, 2019.

5.          Final Pay Check. Employee will receive his final pay check on the regular pay date on or next following the Separation Date. The final pay check will include payment for all earned, but unpaid, base salary through and including the Separation Date, together with payment of any unused accrued vacation time that Employee had as of the Separation Date (in each case, less applicable tax withholdings).

6.          Survival of Employment Agreement Covenants. Employee represents and warrants that he has complied with the Employment Agreement and shall continue to be bound by the terms of the provisions thereof that survive the termination of Employee’s employment with the Employer (the “Surviving Covenants”). Without limiting the foregoing, Employee acknowledges and agrees that all of the provisions of Section 6 of the Employment Agreement shall survive the termination of the Employee’s employment and be considered Surviving Covenants. Employee also agrees to timely and properly complete Tower’s 2018 D&O Questionnaire for purposes of assisting Tower prepare its next proxy statement. For avoidance of doubt, for purposes of Section 6.2 and Section 6.3 of the Employment Agreement, the Employee’s employment shall be deemed to have terminated pursuant to Section 5.2.1 of the Employment Agreement. In the event of a breach by the Employee of any of the provisions of Section 6 of the Employment Agreement, as amended above, the Employer shall have the remedies and relief set forth in Section 6.7 of the Employment Agreement. Nothing in this Section 6 is intended to, nor shall interfere with Employee’s exercise of his preserved rights described in Section 9 of this Separation Agreement.

4

7.          Company Property. Employee represents that he has returned to Employer all of Employer’s and its affiliates’ property in Employee’s possession, custody and/or control, including, but not limited to, all equipment, vehicles, computers, personal digital assistants, pass codes, keys, swipe cards, credit cards, documents or other materials, in whatever form or format, that Employee received, prepared, or helped prepare. Employee further represents that Employee has not retained any copies, duplicates, reproductions, computer disks, or excerpts thereof of Employer’s or its affiliates’ documents. Employee agrees to disclose to the Employer all passwords necessary or desirable to enable the Employer to access all information which Employee has password-protected on any of its computer equipment or on its computer network or system.

8.          Construction of Agreement. In the event that one or more of the provisions contained in this Separation Agreement shall for any reason be held unenforceable in any respect under the law of any state of the United States or the United States, such unenforceability shall not affect any other provision of this Separation Agreement, but this Separation Agreement shall then be construed as if such unenforceable provision or provisions had never been contained herein provided, however, that if any court were to find that the waiver and release of claims set forth in Section 2 of this Separation Agreement is unlawful or unenforceable, or was not entered into knowingly or voluntarily, Employee agrees to execute a waiver and release of claims in a form satisfactory to Employer that is lawful and enforceable. If it is ever held that any restriction hereunder is too broad to permit enforcement of such restriction to its fullest extent, such restriction shall be enforced to the maximum extent permitted by applicable law. This Separation Agreement and any and all matters arising directly or indirectly herefrom shall be governed under the laws of the State of Michigan without reference to choice of law rules. Employer and Employee consent to the sole jurisdiction of the federal and state courts of Michigan. EMPLOYER AND EMPLOYEE HEREBY WAIVE THEIR RESPECTIVE RIGHT TO TRIAL BY JURY IN ANY ACTION CONCERNING THIS SEPARATION AGREEMENT OR ANY AND ALL MATTERS ARISING DIRECTLY OR INDIRECTLY HEREFROM, AND REPRESENT THAT THEY HAVE CONSULTED WITH COUNSEL OF THEIR CHOICE OR HAVE CHOSEN VOLUNTARILY NOT TO DO SO SPECIFICALLY WITH RESPECT TO THIS WAIVER.

9.          Acknowledgments. Employer and Employee acknowledge and agree that:

(A) By entering in this Separation Agreement, Employee does not waive any rights or claims that may arise after the date that Employee executes and delivers this Separation Agreement to Employer in accordance with Section 12 hereof;

(B) This Agreement is not intended to, and shall not in any way prohibit, limit or otherwise interfere with Employee’s protected rights under federal, state or local law to without notice to the Employer: (i) communicate or file a charge with a government regulator; (ii) participate in an investigation or proceeding conducted by a government regulator; or (iii) receive an award paid by a government regulator for providing information;

(C) Notwithstanding anything set forth in this Separation Agreement to the contrary, nothing in this Separation Agreement shall affect or be used to interfere with Employee’s protected right to test in any court, under the OWBPA, or like statute or regulation, the validity of the waiver of rights under ADEA set forth in this Separation Agreement; and

5

(D) Nothing in this Separation Agreement shall preclude Employee from exercising Employee’s rights, if any (i) under Section 601-608 of the Employee Retirement Income Security Act of 1974, as amended, popularly known as COBRA, (ii) under the Employer’s 401(k) plan, or (iii) to exercise vested stock options granted under the Equity Incentive Plan, to the extent exercisable as of the Separation Date (and to the extent such options may be exercised under such Equity Incentive Plan and the related option grant agreements).

10.        Bar. Employee acknowledges and agrees that if Employee makes any claim or demand or commence or threaten to commence any action, claim or proceeding against the Releasees with respect to any cause, matter or thing which is the subject of this Separation Agreement, this Separation Agreement may be raised as a complete bar to any such action, claim or proceeding, and the applicable Releasee may recover from Employee all costs incurred in connection with such action, claim or proceeding, including attorneys’ fees, along with the consideration.

11.        Miscellaneous. This Separation Agreement constitutes the entire agreement and understanding between Employee and Employer concerning the subject matter of this Separation Agreement and, except as provided by Section 6 hereof, all prior and contemporaneous representations, understandings, and agreements concerning the subject matter of this Separation Agreement have been superseded by the terms of this Separation Agreement. This Separation Agreement shall inure to the benefit of, and shall be binding upon, the Employee and the Employer, and their respective successors, assigns, heirs and legal representatives, including any entity with which the Employer may merge or consolidate or to which all or substantially all of its assets may be transferred.

12.        Opportunity For Review.

(A)         Employee is hereby advised and encouraged by Employer to consult with his own independent counsel before signing this Agreement. Employee represents and warrants that Employee (i) has had sufficient opportunity to consider this Separation Agreement, (ii) has read this Separation Agreement, (iii) understands all the terms and conditions hereof, (iv) is not incompetent or had a guardian, conservator or trustee appointed for Employee, (v) has entered into this Separation Agreement of Employee’s own free will and volition, (vi) has duly executed and delivered this Separation Agreement, (vii) understands that Employee is responsible for Employee’s own attorneys’ fees and costs, (viii) has been advised and encouraged by Employer to consult with Employee's own independent counsel before signing this Separation Agreement (ix) has had the opportunity to review this Separation Agreement with counsel of his choice or has chosen voluntarily not to do so, (x) understands that Employee has been given twenty-one (21) days to review this Separation Agreement before signing this Separation Agreement, and understands that he is free to use as much or as little of the 21-day period as Employee wishes or considers necessary before deciding to sign this Separation Agreement, (xi) understands that if Employee does not sign and return this Separation Agreement to Employer (attention: Mark Flynn) within 21-days after the Separation Date, Employee shall not be entitled to receive the payments and benefits provided for under Section 4 of this Separation Agreement, and the Separation Date shall be unaltered, and (xii) understands that this Separation Agreement is valid, binding, and enforceable against the parties hereto in accordance with its terms.

6

(B)         The parties hereto understand and agree that Employee may revoke this Separation Agreement after having executed it by delivering a written notice of revocation to Employer (attention: Mark Flynn) by no later than 11:59 p.m. on the seventh (7th) day after Employee’s execution of this Separation Agreement. If Employee revokes this Separation Agreement, it shall not be effective or enforceable, Employee shall not be entitled to receive the payments and benefits provided for under Section 4 of this Separation Agreement, and the Separation Date shall be unaltered. If Employee does not revoke this Separation Agreement within the foregoing time period, this Separation Agreement shall be effective and enforceable on the eighth (8th) day after execution and delivery to Employer (Attn: Mark Flynn) by Employee.

[signature page follows]

7

Agreed to and accepted on this 24^th day of December, 2018.

Witness:	EMPLOYEE:
/s/ Mark R. Flynn	/s/ Michael Rajkovic
	Michael Rajkovic

Agreed to and accepted on this 24^th day of December, 2018.

EMPLOYER:
TOWER AUTOMOTIVE OPERATIONS USA I, LLC
BY:	/s/ Mark R. Flynn

8

EX-10.71

Exhibit 10.71

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) dated as of November 7, 2017 is between Tower Automotive Operations USA I, LLC, a Delaware limited liability company (the “Company”) and Mark R. Flynn, an individual (the “Employee”). (The Company and the Employee are each a “Party” and, collectively, the “Parties”.)

WHEREAS, effective as of December 4, 2017 (the “Effective Date”), the Company desires that Employee serve as Senior Vice President, Global Human Resources, and Employee desires to serve in such capacity; and

WHEREAS, the Parties wish to establish the terms and conditions of the Employee’s employment as Senior Vice President, Global Human Resources;

NOW, THEREFORE, the Parties agree as follows:

1.          Effectiveness. Effective upon the Effective Date, the Company agrees to employ the Employee, and the Employee accepts such employment with the Company, subject to, and in accordance with, the terms of this Agreement.

2.         Term. Subject to earlier termination pursuant to Section 5 below, this Agreement and the employment relationship hereunder shall continue from the Effective Date until December 31, 2018 (the “Initial Term”). The term of employment shall on each January 1 thereafter be deemed to be automatically extended, upon the same terms and conditions, for successive periods of one year, unless either Party, at least sixty (60) calendar days prior to the expiration of the Initial Term or any extended term, shall give written notice to the other of its or his intention not to renew such employment term. As used in this Agreement, “Term” shall refer to the period beginning on the Effective Date and ending on the date on which the Employee’s employment terminates in accordance with this Section 2 or Section 5. Upon the expiration of the Term or earlier termination of this Agreement and the employment relationship hereunder, the Company shall have no further obligations to the Employee under this Agreement or otherwise, except as specifically set forth in Section 5.

3.          Duties and Title.

3.1           Title. The Company shall employ the Employee to render exclusive and full-time services to the Company and the other members of the Company Group (as defined below). The Employee shall serve in the capacity of Senior Vice President, Global Human Resources and in such other positions or capacities commensurate with his position as may be requested by the Board of Directors of Tower (the “Board”), the Chairman of the Board and/or the Chief Executive Officer of Tower (the “CEO”) (including, without limitation, serving as an officer of, or in another capacity for, one or more members of the Company Group). As used in this Agreement: (a) “Company Group” means the Company and its Affiliates; and (b) “Affiliate” of any individual or entity means any other individual or entity that directly or indirectly controls, is controlled by, or is under common control with, the individual or entity; provided that, for purposes of this Agreement, an “Affiliate” of the Company means Tower and any entity that is owned or controlled by Tower.

1

3.2          Duties. During the Term, the Employee shall have such authority and responsibilities and shall perform such executive duties as may be assigned to the Employee by the CEO, the Board and/or the Chairman of the Board, including such duties as are customarily performed by a Senior Vice President, Global Human Resources of a company in similar lines of business as the Company and its Affiliates and, without limitation, performing services for the other members of the Company Group. Notwithstanding, anything contained herein to the contrary, the Employee’s authority and responsibilities shall be limited to the extent determined by the Board, the Chairman of the Board and/or the CEO. During the Term, the Employee shall devote all of his full working-time and attention to the performance of such duties and to the promotion of the business and interests of the Company Group; provided, however, that the Employee may serve as a director of an entity with the written approval of the Board, engage in charitable activities and manage his own personal investments so long as such activities do not interfere with his duties and responsibilities hereunder.

3.3           Location. The Employee shall perform his full-time services to the Company Group in the Company’s Livonia, Michigan office; provided, however, that the Employee shall be required to travel as necessary to perform his duties hereunder.

4.         Compensation and Benefits by the Company. As compensation for all services rendered pursuant to this Agreement (including, without limitation, services as an officer, director or member of any committee of any member of the Company Group or any division of a member of the Company Group), the Company shall provide the Employee with the following during the Term:

4.1           Base Salary. During the Term, the Company shall pay the Employee a base salary of $360,000 on an annualized basis, payable in accordance with the customary payroll practices of the Company (“Base Salary”). The Base Salary shall be subject to periodic review and adjustments as the Compensation Committee of the Board (the “Committee”) deems appropriate, in its discretion. Except to the extent commensurate with “across the board” reductions to base salaries made applicable to similarly situated officers of the Company, the Employee’s Base Salary may not be decreased.

4.2          Annual Bonus. Subject to Section 7.16 below, for each fiscal year ending during the Term, the Employee shall be eligible to receive, under the Company’s annual incentive program pursuant to the Tower International, Inc. 2010 Equity Incentive Plan (or any successor plan thereto) (the “2010 Plan”), an annual variable bonus payment with a target gross amount of eighty percent (80%) of the Employee’s annualized Base Salary (as in effect as of the beginning of the applicable fiscal year) (the “Annual Bonus”), subject to market evaluation and adjustment of such target amounts at the discretion of the Committee. The precise amount of the Annual Bonus shall be based on work performance and achievement of targets as determined by the Committee at the beginning of the applicable fiscal year. If such targets are fully achieved, the Employee shall be eligible for one hundred percent (100%) of the target Annual Bonus. If the targets are under-achieved or over-achieved, the Annual Bonus shall be reduced or increased, as applicable, as determined by the Committee. The Annual Bonus payment shall be due and payable at such time or times as the Committee determines (the “Annual Bonus Approval Date”), but not later than the later of May 1 of the year following the fiscal year to which the Annual Bonus relates or thirty (30) days following approval by the Board (or committee thereof) of the audited financial statements of the Company Group for such fiscal year. To be eligible to receive any Annual Bonus (or portion thereof), the Employee must be employed by the Company on the Annual Bonus Approval Date, except as provided in Section 5.

4.3           LTI Awards. Subject to Section 7.16 below, for each fiscal year ending during the Term, the Employee shall be eligible to receive an annual long term incentive (LTI) award pursuant to the 2010 Plan with a target gross amount of fifty percent (50%) of the Employee’s annualized Base Salary (as in effect as of the beginning of the applicable fiscal year), subject to market evaluation and adjustment of such target amounts at the discretion of the Committee.

2

4.4          Participation in Employee Benefit Plans. The Employee shall be entitled during the Term, if and to the extent eligible, to participate in all of the applicable benefit plans (excluding severance plans, if any) of the Company, which may be available to other senior executives of the Company. The Company may at any time or from time to time amend, modify, suspend or terminate any employee benefit plan, program or arrangement for any reason without the Employee’s consent if such amendment, modification, suspension or termination is consistent with the amendment, modification, suspension or termination for other executives of the Company.

4.5           Expense Reimbursement.

(a)           During the Term, the Employee shall be entitled to receive reimbursement for all appropriate business expenses incurred by him in connection with his duties under this Agreement in accordance with the policies of the Company as in effect from time to time.

(b)           All reimbursements and in-kind benefits provided under this Agreement that constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), shall be made or provided in accordance with Code Section 409A, and: (i) in no event shall reimbursements by the Company under this Agreement be made later than the end of the calendar year next following the calendar year in which such fees and expenses were incurred (and then only to the extent the Employee has submitted an invoice for such fees or expenses at least thirty (30) days before the end of the calendar year next following the calendar year in which such fees and expenses were incurred, and the Employee has complied with all Company policies regarding such reimbursements); (ii) the amount of in-kind benefits or expenses that the Company is obligated to reimburse in any given calendar year (other than medical reimbursements described in Treas. Reg. Section 1.409A-3(i)(1)(iv)(B)) shall not affect the in-kind benefits or expenses eligible for reimbursement by the Company in any other calendar year; (iii) the Employee’s right to have the Company pay or provide such reimbursements and in-kind benefits may not be liquidated or exchanged for any other benefit; and (iv) in no event shall the Company’s obligation to make such reimbursements or to provide such in-kind benefits apply later than the periods set forth in this Agreement.

4.6           Equity Awards. Upon the consummation of a Change in Control, all then outstanding equity-based awards granted to the Employee pursuant to the 2010 Plan shall immediately become fully vested. For purposes of this Agreement, “Change in Control” shall be defined as set forth in Section 2.6 of the 2010 Plan on the Effective Date of this Agreement.         

5.           Termination of Employment.

5.1          By the Company for Cause or by the Employee. If: (i) the Company terminates the Employee’s employment with the Company for Cause; or (ii) the Employee terminates his employment with the Company for any reason or no reason, then the Employee shall be entitled to receive, and the Company’s sole obligation under this Agreement or otherwise shall be to pay or provide to the Employee, the following (collectively, the “Accrued Benefits”):

(a)        the Employee’s earned, but unpaid, Base Salary through the effective date of termination (payable in accordance with Section 4.1 above) and any amounts or benefits (if any) that are vested amounts or vested benefits or that the Employee is otherwise entitled to receive under the express provision of any plan, program, policy or practice on the effective date of termination (excluding, without limitation, severance pay plans (if any) and any amounts or benefits (if any) that are forfeited in the event of a termination for Cause, termination by the Employee for any reason or no reason, or other termination in accordance with the terms of the applicable plan, program, policy, or practice), which amounts and/or benefits shall be payable or provided in accordance with the terms of such plan, program, policy or practice;

3

(b)        any Annual Bonus (or portion thereof), if any, relating to the fiscal year prior to the fiscal year in which the effective date of the Employee’s termination occurs that was earned on the applicable Annual Bonus Approval Date, but unpaid, as of the date of termination, which unpaid Annual Bonus (or portion thereof) shall be payable in accordance with Section 4.2; and

(c)          expenses reimbursable under Section 4.5 incurred, but not yet reimbursed to the Employee, to the date of termination.

For the purposes of this Agreement, “Cause” means, as determined by a majority of the Board and/or the CEO, in the Board’s and/or the CEO’s reasonable business judgment acting in good faith and engaging in fair dealing with the Employee, with respect to conduct during the Employee’s employment with the Company, whether or not committed during the Term: (i) commission of a felony by the Employee; (ii) acts of dishonesty by the Employee resulting or intending to result in personal gain or enrichment at the expense of any member of the Company Group or any of their respective Affiliates; (iii) the Employee’s appropriation (or attempted appropriation) of any business opportunity of any member of the Company Group or any of their respective Affiliates, including, without limitation, attempting to secure or securing any personal profit or benefit in connection with any transaction entered into by or on behalf of any member of the Company Group or any of their respective Affiliates; (iv) the Employee’s material breach of any of his duties, representations, warranties, covenants or other obligations under this Agreement; (v) conduct by the Employee in connection with his duties hereunder that is fraudulent or grossly negligent or that the Employee knew or reasonably should have known to be unlawful, provided that any action taken by the Employee on the advice of the Company’s General Counsel (or his/her designee) shall not be treated as unlawful for purposes of this clause (v); (vi) engaging in personal conduct by the Employee (including, but not limited to, employee harassment or discrimination, or the use or possession at work of any illegal controlled substance) which seriously discredits or damages any member of the Company Group or any of their respective Affiliates; (vii) contravention of specific lawful direction of the Board and/or the CEO, failure to adhere to any applicable policy or procedure of the Company of which the Employee has knowledge or which has been provided to the Employee in writing, or inattention to or failure to attempt, in good faith, to perform the material duties to be performed by the Employee under the terms of this Agreement; or (viii) breach of the Employee’s covenants set forth in Section 6 below before termination of employment; provided, that, with respect to clauses (iv) and (vii) only, the Employee shall have thirty (30) days after notice from the Company, which notice shall set forth in reasonable detail a description of the deficiency determined by the Board and/or the CEO to constitute Cause, to cure the deficiency leading to the Cause determination, if curable. A termination for “Cause” shall be effective immediately (or on such other date set forth by the Company).

5.2           By the Company Without Cause or Due to the Company’s Decision Not to Extend a Term or By the Employee for Good Reason or Due to Death or Disability. If, during the Term, (i) the Company terminates the Employee’s employment without Cause (which may be done at any time with or without prior notice) or elects not to extend the Term per Section 2 above; (ii) the Employee terminates his employment for Good Reason upon at least thirty (30) days prior written notice and opportunity to cure; (iii) the Employee’s employment terminates due to his death; or (iv) the Company terminates the Employee’s employment due to the Employee’s Disability (as defined below), then the Employee (or, in the event of the Employee’s death or incapacity, the Employee’s legal representative) shall be entitled to receive, and the Company’s sole obligation under this Agreement or otherwise shall be to pay or provide:

(a)        the Accrued Benefits; and

4

(b)        subject to the Employee’s (or, in the event of the Employee’s death or incapacity, the Employee’s legal representative’s) execution, delivery and non-revocation of a general release in a form satisfactory to the Company (the “Release”), which Release, among other things, shall include a general release of the members of the Company Group, each of their respective direct and indirect parent entities and direct and indirect subsidiaries, each of their respective Affiliates, and each of their respective officers, directors, employees, shareholders, members, managers, partners, plan administrators, and agents, as well as the predecessors, past and future successors and assigns or estates of any of the foregoing, from all liability; provided, however, that the Release shall preserve the Employee’s rights, if any: (i) to indemnification under the Company Group’s Bylaws (as amended from time to time), applicable law or otherwise, and coverage under the Company Group’s Directors and Officers liability insurance policies for any claims arising out of or relating to the Employee’s employment with the Company; (ii) to the Accrued Benefits; (iii) under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”); and (iv) under any provisions of this Agreement that are intended to survive the termination of this Agreement and the Employee’s employment hereunder (including, without limitation, the Company’s obligations under this Section 5.2):

(i)           an aggregate amount equal to:

(A)         one (1) times the Employee’s annualized rate of Base Salary as of the effective date of termination (the “Base Severance Amount”); plus

(B)         the average of the Employee’s bonuses paid for the three (3) consecutive fiscal years immediately prior to the year of employment termination, plus a pro-rated bonus for the year of the Employee’s employment termination based on the actual bonus awards earned and paid for the fiscal year of the Employee’s termination (in the aggregate, the “Bonus Severance Amount”). The pro-rated amount will be based on the number of days in the fiscal year up to and including the date of employment termination in relation to the total number of days in the fiscal year; and

(ii)          if the Employee (or, if eligible for continuation coverage under the terms of such plans and applicable law, the Employee’s legal representatives) elects continuing group coverage pursuant to COBRA, the Company (on a taxable basis) shall waive (or reimburse the Employee on a monthly basis for) the cost of such coverage to the extent that such cost exceeds the cost that the Company charges active employees for similar coverage until the earlier of (x) the completion of the first twelve (12) months of COBRA coverage, or (y) the date that the Employee (or the Employee’s legal representatives, if applicable) is covered under another group health plan, subject to the terms of the plans and applicable law. The Company may modify its obligation to provide such benefit to the extent reasonably necessary to avoid any penalty or excise taxes imposed on it under the Patient Protection and Affordable Care Act of 2010, as amended, provided that it does so in a manner that to the extent possible, as determined by the Company in its discretion, preserves the economic benefit and original intent of such benefit but does not cause such a penalty or excise tax.

5

For the purposes of this Agreement, “Disability” means a determination by the Company in accordance with applicable law that, as a result of a physical or mental injury or illness, the Employee is unable to perform the essential functions of his job (with or without reasonable accommodation) for a period of (i) ninety (90) consecutive days, or (ii) one hundred twenty (120) days in any twelve-month period.

The Base Severance Amount, less standard income and payroll tax withholdings and other authorized deductions, shall be payable in twelve (12) equal monthly installments, commencing within seventy-five (75) days following the Employee’s date of termination, but in no event later than March 15 of the year following the year in which the Employee’s date of termination occurs; provided, however, that payment of the Base Severance Amount shall not commence unless the statutory period during which the Employee is entitled to revoke the Release has expired during the 75-day period following the Employee’s date of termination and provided further that any payments provided hereunder shall be made in the second taxable year if the 75-day period begins in one taxable year of the Employee and ends in the subsequent taxable year. Each installment of the Base Severance Amount shall be treated as a separate payment for purposes of Code Section 409A.

The Bonus Severance Amount, less standard income and payroll tax withholdings and other authorized deductions, shall be payable in a single lump sum between January 1 and March 15 of the year following the year in which the Employee’s date of termination occurs; provided, however, that payment of the Bonus Severance Amount shall not be made unless the statutory period during which the Employee is entitled to revoke the Release has expired.

The Company shall have no obligation to provide the payments and benefits (other than Accrued Benefits) set forth above in the event that the Employee breaches the provisions of Section 6.

5.3           By the Company without Cause or by the Employee for Good Reason Following a Change in Control. If, within two (2) years following the consummation of a Change in Control, (i) the Company terminates the Employee’s employment without Cause (which may be done at any time with or without prior notice and, for the avoidance of doubt, includes a termination by the Company without Cause that occurs simultaneous with or immediately prior to the consummation of a Change in Control); or (ii) the Employee terminates his employment for Good Reason (as defined below), upon at least thirty (30) days prior written notice and opportunity to cure; then, in lieu of any amounts or benefits otherwise payable pursuant to Section 5.2, the Employee shall be entitled to receive, and the Company’s sole obligation under this Agreement or otherwise shall be to pay or provide:

(a)         the Accrued Benefits; and

(b)        subject to the Employee’s execution, delivery and non-revocation of a Release, the terms of which are described in Section 5.2(b) above:

(i)           an aggregate amount equal to:

(A)         two (2) times the Employee’s annualized rate of Base Salary as of the effective date of her employment termination (the “CIC Base Severance Amount”); plus

(B)         two (2) times the Employee’s target bonus for the year of employment termination, plus a pro-rated bonus for the year of the Employee’s employment termination based on the actual bonus awards for the fiscal year of the Employee’s termination (in the aggregate, the “CIC Bonus Severance Amount”). The pro-rated amount will be calculated based on the number of days in the fiscal year up to and including the date of employment termination in relation to the total number of days in the fiscal year; and

6

(ii)           if the Employee (or, if eligible for continuation coverage under the terms of such plans and applicable law, the Employee’s legal representatives) elects continuing group coverage pursuant to COBRA, the Company (on a taxable basis) shall waive (or reimburse the Employee on a monthly basis for) the cost of such coverage to the extent that such cost exceeds the cost that the Company charges active employees for similar coverage until the earlier of (x) the completion of the first eighteen (18) months of COBRA coverage, or (y) the date that the Employee (or the Employee’s legal representatives, if applicable) is covered under another group health plan, subject to the terms of the plans and applicable law. The Company may modify its obligation to provide such benefit to the extent reasonably necessary to avoid any penalty or excise taxes imposed on it under the Patient Protection and Affordable Care Act of 2010, as amended, provided that it does so in a manner that to the extent possible, as determined by the Company in its discretion, preserves the economic benefit and original intent of such benefit but does not cause such a penalty or excise tax.

(c)          The CIC Base Severance Amount, less standard income and payroll tax withholdings and other authorized deductions, shall be payable in twenty-four (24) equal monthly installments, commencing within seventy-five (75) days following the Employee’s date of employment termination, but in no event later than March 15 of the year following the year in which the Employee’s date of termination occurs; provided, however, that payment of the CIC Base Severance Amount shall not commence unless the statutory period during which the Employee is entitled to revoke the Release has expired during the 75-day period following the Employee’s termination and provided further that any payments provided hereunder shall be made in the second taxable year if the 75-day period begins in one taxable year of the Employee and ends in the subsequent taxable year. Each installment of the CIC Base Severance Amount shall be treated as a separate payment for purposes of Code Section 409A.

(d)          The CIC Bonus Severance Amount, less standard income and payroll tax withholdings and other authorized deductions, shall be payable in a single lump sum between January 1 and March 15 of the year following the year in which the Employee’s date of termination occurs; provided, however, that payment of the CIC Bonus Severance Amount shall not be made unless the statutory period during which the Employee is entitled to revoke the Release has expired.

(e)          If the payment of any of the foregoing amounts or benefits under Section 5.3 (when added to any other payments or benefits provided to the Employee in the nature of compensation under Code Section 280G(b)(2)) (the “Total Payments”) shall be subject to the excise tax imposed by Code Section 4999, the aggregate Present Value of the Payments (defined below) under this Agreement shall be reduced (but not below zero) to the Reduced Amount, but only if reducing the Payments shall provide the Employee with a Net After-Tax Benefit that is greater than if the reduction is not made. The reduction of amounts payable hereunder, if applicable, shall be determined by the Accounting Firm (defined below) in an amount that has the least economic cost to the Employee and, to the extent the economic cost is equivalent, then all Payments, in the aggregate, shall be reduced in the inverse order of when the Payments, in the aggregate, would have been made to the Employee until the specified reduction is achieved. For purposes of this Agreement, the following definitions apply:

7

“Net After-Tax Benefit” means the Present Value of a Payment, net of all federal, state and local income, employment and excise taxes, determined by applying the highest marginal rate(s) applicable to an individual for the Employee’s taxable year in which Payment is made.

“Payment” means any payment or distribution in the nature of compensation (within the meaning of Code Section 280G(b)(2)) to or for the benefit of the Employee, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise.

“Present Value” means the value determined in accordance with Code Section 280G.

“Reduced Amount” means an amount expressed in Present Value that maximizes the aggregate Present Value of Payments without causing any Payment to be subject to excise tax under Code Section 4999 or the corporate deduction limitation under Code Section 280G.

The Code Section 280G calculations under this Agreement and the determination that Payments shall be reduced or not reduced based on the Net After-Tax Benefit shall be made by a nationally recognized independent public accounting firm selected by the Company (the “Accounting Firm”), which shall provide its determination and any supporting calculations to the Company and the Employee within ten (10) days after the Employee’s employment termination. The reasonable costs and expenses of the Accounting Firm shall be borne by the Company. The determination by the Accounting Firm shall be binding upon the Company and the Employee. In making its determination, the Accounting Firm shall take into account (if applicable) the value of the Employee’s non-competition covenant set forth in Section 6 of this Agreement, which value shall be determined by the independent appraisal of a nationally-recognized business valuation firm selected by the Company, and a portion of the Payments shall, to the extent of the appraised value, be specifically allocated as reasonable compensation for such non-competition covenant and shall not be treated as a parachute payment. If the Accounting Firm’s determination is disputed by the Internal Revenue Service, the Company shall reimburse the Employee for the cost of the Employee’s reasonable attorneys’ fees for counsel selected by the Company, and any tax penalties (including excise tax) and interest ultimately incurred by the Employee upon resolution of the dispute. Reimbursement shall be made in accordance with the Code Section 409A procedures set forth in Section 4.5(b) hereof.

The Company shall have no obligation to provide the payments and benefits (other than Accrued Benefits) set forth above in the event that Employee breaches the provisions of Section 6.

For the purposes of this Agreement, “Good Reason” means, without the Employee’s consent, (i) a material reduction in Employee’s compensation; or (ii) the Company’s change of the Employee’s primary work location to a location that is beyond a thirty (30) mile radius of Livonia, Michigan; or (iii) subject to a reasonable opportunity to cure, the Company’s ongoing material breach of the terms of this Agreement; (iv) the Employee’s direct reporting relationship is changed to other than the CEO; provided that a suspension of the requirement that the Employee not report to work shall not constitute “Good Reason” if the Employee continues to receive the compensation and benefits required by this Agreement.

8

The Employee shall be deemed to have consented to any act or event that would otherwise give rise to “Good Reason,” unless the Employee provides written notice to the Company specifying the act or event within thirty (30) days following the occurrence of such act or event. The Company shall have thirty (30) days after receipt of notice from the Employee specifying the act or event otherwise constituting Good Reason to cure the act or event that otherwise would constitute Good Reason.

5.4          No Mitigation; No Offset. The Employee shall be under no obligation to seek other employment after his termination of employment with the Company and the obligations of the Company to the Employee which arise upon the termination of his employment pursuant to this Section 5 shall not be subject to mitigation or offset.

5.5          Resignation from any Boards and Position. If the Employee’s employment is terminated for any reason under this Agreement, unless otherwise agreed by the Parties, he shall be deemed to resign (i) if a member, from the Board or board of directors of any other member of the Company Group or any other board to which he has been appointed or nominated by or on behalf of the Company or any other member of the Company Group, and (ii) from any position with any member of the Company Group, including, but not limited to, as an officer of any member of the Company Group; and the Employee agrees to take all further actions that are deemed reasonably necessary by the Company to effectuate or evidence such resignations.

6.           Restrictions and Obligations of the Employee.

6.1          Confidentiality.

(a)          During the course of the Employee’s employment by the Company (prior to and during the Term) or otherwise, the Employee has had and will have access to certain trade secrets and confidential information relating to the Company and its Affiliates, its and their respective direct and indirect parent entities and direct and indirect subsidiaries and each of their respective Affiliates, as well as their respective predecessors, successors and assigns (collectively, the “Protected Parties”) which is not readily available from sources outside the Protected Parties. The confidential and proprietary information and trade secrets of the Protected Parties are among their most valuable assets, including but not limited to, their customer, supplier and vendor lists, databases, competitive strategies, computer programs, frameworks, or models, their marketing programs, their sales, financial, marketing, training and technical information, their product development (and proprietary product data) and any other information, whether communicated orally, electronically, in writing or in other tangible forms concerning how the Protected Parties create, develop, acquire or maintain their products and marketing plans, target their potential customers and operate their retail and other businesses. The Protected Parties invested, and continue to invest, considerable amounts of time and money in their process, technology, know-how, obtaining and developing the goodwill of their customers, their other external relationships, their data systems and data bases, and all the information described above (hereinafter collectively referred to as “Confidential Information”), and any misappropriation or unauthorized disclosure of Confidential Information in any form would irreparably harm the Protected Parties. The Employee acknowledges that such Confidential Information constitutes valuable, highly confidential, special and unique property of the Protected Parties. The Employee shall hold in a fiduciary capacity for the benefit of the Protected Parties all Confidential Information relating to the Protected Parties and their businesses, which shall have been obtained by the Employee during the Employee’s employment by the Company or its Affiliates or otherwise and which shall not be or become public knowledge (other than by acts by the Employee or representatives of the Employee in violation of this Agreement). Except as required by law or an order of a court or governmental agency with jurisdiction, the Employee shall not, during the period the Employee is employed by the Company or its Affiliates or at any time thereafter, disclose any Confidential Information, directly or indirectly, to any person or entity for any reason or purpose whatsoever, nor shall the Employee use it in any way, except in the course of the Employee’s employment with, and for the benefit of, the Protected Parties or to enforce any rights or defend any claims hereunder or under any other agreement with any Protected Party to which the Employee is a party, provided that such disclosure is relevant to the enforcement of such rights or defense of such claims and is only disclosed to the extent necessary in the formal proceedings related thereto. The Employee shall take all reasonable steps to safeguard the Confidential Information and to protect it against disclosure, misuse, espionage, loss and theft. The Employee understands and agrees that the Employee shall acquire no rights to any such Confidential Information. Notwithstanding the foregoing or anything else contained herein to the contrary, this Agreement shall not preclude the Employee from disclosing Confidential Information to a governmental body or agency or to a court if and to the extent that a restriction on such disclosure would limit the Employee from exercising any protected right afforded the Employee under applicable law, including the ability to receive an award for information provided to a governmental body.

9

(b)          Employee acknowledges receipt of the following notice under the Defend Trade Secrets Act: An individual will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret if he (i) makes such disclosure in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney and such disclosure is made solely for the purpose of reporting or investigating a suspected violation of law; or (ii) such disclosure was made in a complaint or other document filed in a lawsuit or other proceeding if such filing is made under seal.

(c)         All files, records, documents, drawings, specifications, data, computer programs, evaluation mechanisms and analytics and similar items relating thereto or to the Business (for the purposes of this Agreement, “Business” shall be as defined in Section 6.3 hereof), as well as all customer lists, specific customer information, compilations of product research and marketing techniques of the Protected Parties, whether prepared by the Employee or otherwise coming into the Employee’s possession, shall remain the exclusive property of the Company or other Protected Parties, as applicable, and the Employee shall not remove any such items from the premises of the Company or other Protected Parties, except in furtherance of the Employee’s duties under this Agreement.

(d)          It is understood that while employed by the Company or any of its Affiliates, the Employee will promptly disclose to the Company and to no one else, any idea, invention, technique, modification, process, or improvement (whether patentable or not, any industrial design (whether registrable or not), any mask work, however fixed or encoded, that is suitable to be fixed, embedded or programmed in a product (whether recordable or not) and any work of authorship (whether or not copyright protection may be obtained for it) created, conceived, or developed by the Employee or the Employee’s Affiliate (“Inventions”), either solely or in conjunction with others, during Employee’s employment with the Company or any of its Affiliates, that relates in any way to, or is useful in any manner to, the business then being conducted or proposed to be conducted by any member of the Company Group or any of their respective Affiliates and any such item created by the Employee or the Employee’s Affiliate, either solely or in conjunction with others, that is based upon or uses Confidential Information. Employee agrees that (i) each Invention belongs, or shall belong, exclusively to the Company from conception, (ii) all of the Employee’s writings, works of authorship, specially commissioned works, and other Inventions are works made for hire and are the exclusive property of the Company, including any copyrights, patents, or other intellectual property rights pertaining thereto, and (iii) if it is determined that any such Inventions are not works made for hire, the Employee hereby irrevocably assigns to the Company all of the Employee’s right, title and interest, including rights of copyright, patent, and other intellectual property rights, to or in such Inventions. The Employee covenants that the Employee shall promptly (i) provide a separate written irrevocable assignment to the Company, or to an individual or entity designated by the Company, at the Company’s request and without additional compensation, all of the Employee’s right to any Inventions in the United States and all foreign jurisdictions, (ii) at the Company’s expense, execute and deliver to the Company such applications, assignments, and other documents as the Company may request in order to apply for and obtain patents or other registrations with respect to any Invention in the United States and any foreign jurisdictions, (iii) at the Company’s expense, execute and deliver all other papers deemed necessary by the Company to carry out the above obligations, and (iv) give testimony and render any other assistance in support of the Company’s rights to any Invention (with the Company paying the Employee a reasonable fee for the Employee’s time if the Employee’s employment with the Company or any of its Affiliates has ended at the time of such testimony or assistance). In the event that the Company is unable to secure the Employee’s signature after reasonable effort in connection with any patent, trademark, copyright or other similar protection relation to an Invention, the Employee irrevocably designates and appoints the Company and its respective officers and agents as the Employee’s agent and attorney-in-fact, to act for and on the Employee’s behalf and stead to execute and file any such application and to do all other lawfully permitted acts to further the prosecution and issuance of patents, trademarks, copyrights or similar protection thereon with the same legal force and effect as if executed by the Employee. At all times during and after the Employee’s employment by the Company, the Employee shall assist the Company in obtaining, maintaining, and renewing patent, copyright, trademark and other appropriate protection for any Invention, in the United States and in any foreign jurisdictions, at the Company’s expense.

10

(e)         As requested by the Company, from time to time and upon the termination of the Employee’s employment with the Company for any reason or no reason, the Employee shall promptly deliver to the Company all copies and embodiments, in whatever form, of all Confidential Information in the Employee’s possession or within his control (including, but not limited to, memoranda, records, notes, plans, photographs, manuals, notebooks, documentation, program listings, flow charts, magnetic media, disks, diskettes, tapes and all other materials containing any Confidential Information) irrespective of the location or form of such material. If requested by the Company, the Employee will provide the Company with written confirmation that all such materials have been delivered to the Company as provided herein.

6.2          Non-Solicitation or Hire. During the Term and for a period of twelve (12) months following the Employee’s employment termination if such employment termination was pursuant to Section 5.1 or Section 5.2, or twenty-four (24) months following the Employee’s employment termination if such employment termination was pursuant to Section 5.3 (the “Non-Solicit Period”), the Employee shall not, directly or indirectly, solicit or attempt to solicit or induce or attempt to induce, directly or indirectly, (a) any individual or entity who or which is a customer of the Company or any of the other Protected Parties, or who or which was a customer of the Company or any of the other Protected Parties at any time during the twelve (12) month period immediately prior to the date of the Employee’s employment termination, for the purpose of marketing, selling or providing to any such individual or entity any services or products offered by or available from the Company or any of the other Protected Parties (provided that if the Employee intends to solicit any such party for any other purpose, he shall notify the Company of such intention and receive prior written approval from the Company), (b) any supplier to or customer or client of the Company or any of the other Protected Parties to terminate, reduce or alter negatively its relationship with the Company or any of the other Protected Parties or in any manner interfere with any agreement or contract between the Company and/or any of the other Protected Parties and such supplier, customer or client, or (c) any employee or agent of the Company or any of the other Protected Parties or any individual or entity who or which was an employee or agent of the Company or any of the other Protected Parties during the twelve (12) month period immediately prior to the date of the Employee’s employment termination, to terminate such individual’s or entity’s employment relationship with, or engagement to perform services for, the Protected Parties in order, in either case, to enter into a similar relationship with the Employee, or any other person or entity in competition with the Business of the Company or any of the other Protected Parties. The Employee further agrees that, during the Non-Solicit Period, he shall not, directly or indirectly, (i) hire or engage (or assist in the hiring or engaging of) any employee or agent of the Company or any of the other Protected Parties or any individual or entity who or which was an employee or agent of the Company or any of the other Protected Parties during the twelve (12) month period immediately prior to the date of the Employee’s employment termination to enter into a similar relationship with the Employee or any other person or entity in competition with the Business of the Company or any of the other Protected Parties, (ii) solicit, divert with the intention to take away, or attempt to divert with the intention to take away, any investment opportunity considered by the Company or any other Protected Party, or (iii) interfere with, disrupt, or attempt to interfere with or disrupt, or assist others to disrupt or interfere with, the relationship, contractual or otherwise, between the Company or of the other Protected Parties and any of their respective customers, clients, accounts, investors, suppliers, lessors, consultants, independent contractors, agents, or employees.

11

6.3           Non-Competition. During the Term and for a period of twelve (12) months following the termination of the Employee’s employment if such employment termination was pursuant to Section 5.1 or Section 5.2, or twenty-four (24) months following the termination of the Employee’s employment termination if such employment termination was pursuant to Section 5.3 (the “Non-Compete Period”), the Employee shall not, directly or indirectly, whether individually, as a director, manager, member, stockholder, partner, owner, employee, consultant or agent of any business, or in any other capacity, other than on behalf of the Company or its Affiliates, organize, establish, own, operate, manage, control, engage in, participate in, invest in, permit his name to be used by, act as a consultant or advisor to, render services for (alone or in association with any person, firm, corporation or business organization), or otherwise assist any person or entity that engages in or owns, invests in, operates, manages or controls any venture or enterprise which engages or proposes to engage in (a) the sale, distribution, manufacturing and/or design of structural metal components and assemblies for the automotive industry, or (b) any other business conducted by the Company, any other member of the Company Group or any of their respective Affiliates on the date of the Employee’s termination of employment or within twelve (12) months after the Employee’s employment termination if such employment termination was pursuant to Section 5.1 or Section 5.2, or twenty-four (24) months after the Employee’s employment termination if such employment termination was pursuant to Section 5.3, in the geographic locations where the Company, the other members of the Company Group and/or their respective Affiliates engage or propose to engage in such business (the “Business”). Notwithstanding the foregoing, nothing in this Agreement shall prevent the Employee from owning for passive investment purposes not intended to circumvent this Agreement, less than five percent (5%) of the publicly traded common equity securities of any company engaged in the Business (so long as the Employee has no power to manage, operate, advise, consult with or control the competing enterprise and no power, alone or in conjunction with other affiliated parties, to select a director, manager, general partner, or similar governing official of the competing enterprise other than in connection with the normal and customary voting powers afforded the Employee in connection with any permissible equity ownership).

6.4           Nondisparagement. The Employee agrees that he shall not at any time (whether during or after the Term) publish or communicate to any person or entity any Disparaging (as defined below) remarks, comments or statements concerning the Company, any of the other Protected Parties or any of their present or former respective members, partners, directors, officers, shareholders, employees, agents, attorneys, successors and assigns. “Disparaging” remarks, comments or statements are those that impugn the character, honesty, integrity or morality or business acumen or abilities in connection with any aspect of the operation of business of the individual or entity being disparaged. Nothing herein shall restrict or limit the Employee from exercising any protected right afforded under applicable law, including reporting information to a governmental body in accordance with applicable law.

12

6.5          Property. The Employee acknowledges that all originals and copies of materials, records and documents generated by him or coming into his possession or control during his employment by the Company or its Affiliates are the sole property of the Company and/or the other Protected Parties, as applicable (“Company Property”). During the Term, and at all times thereafter, the Employee shall not remove, or cause to be removed, from the premises of the Company or any of the other Protected Parties, copies of any record, file, memorandum, document, computer related information or equipment, or any other item relating to the business of the Company or any of the other Protected Parties, except in furtherance of his duties under the Agreement. When the Employee’s employment with the Company terminates, or upon request of the Company at any time, the Employee shall promptly deliver to the Company all copies of Company Property in his possession or control.

6.6           Cooperation. During the Term and thereafter, the Employee shall cooperate with the Company and its Affiliates in any internal investigation or administrative, regulatory or judicial proceeding as reasonably requested by the Company (including, without limitation, the Employee making himself available to the Company upon reasonable notice for interviews and factual investigations, appearing to give testimony at the Company’s request without requiring service of a subpoena or other legal process, volunteering to the Company all pertinent information and turning over to the Company all relevant documents which are or may come into the Employee’s possession, all at times and on schedules that are reasonably consistent with the Employee’s other permitted activities and commitments). In the event that the Company requires the Employee’s cooperation in connection with this Section 6.6, the Company shall pay the Employee a reasonable fee if the Employee’s employment with the Company or any of its Affiliates has ended at the time of such testimony or assistance, and the Company shall reimburse the Employee for reasonable expenses incurred in connection herewith (including lodging and meals, upon acceptable substantiation, including receipts). Nothing herein shall restrict or limit the Employee from exercising any protected right afforded under applicable law, including reporting information to a governmental body in accordance with applicable law.

6.7          Remedies; Specific Performance; Calculation of Time Period. The Parties acknowledge and agree that the Employee’s breach or threatened breach of any of the restrictions set forth in Section 6 will result in irreparable and continuing damage to the Protected Parties for which there may be no adequate remedy at law and that the Protected Parties shall be entitled to equitable relief, including specific performance and temporary, preliminary and permanent injunctive relief (without being obligated to post a bond or other collateral) and to an equitable accounting of all earnings, profits and other benefits arising, directly or indirectly, from such violation, as remedies for any such breach or threatened or attempted breach. The Employee hereby consents to the grant of an injunction (temporary or otherwise) against the Employee or the entry of any other court order against the Employee prohibiting and enjoining him from violating, or directing him to comply with, any provision of Section 6. The Employee also agrees that such remedies shall be in addition to any and all remedies, including damages, available to the Protected Parties against him for such breaches or threatened or attempted breaches. In addition, without limiting the Protected Parties’ remedies for any breach of any restriction on the Employee set forth in Section 6, except as required by law, the Employee shall not be entitled to any payments set forth in Sections 5.2 and 5.3 hereof if the Employee has breached the covenants applicable to the Employee contained in Section 6, and the Employee agrees to immediately return to the Company any such payments previously received under Sections 5.2 or 5.3 upon such a breach. Further, in the event of such breach, the Company shall have no obligation to pay any of the amounts that remain payable by the Company under Sections 5.2 and 5.3. The Employee also agrees that, without limiting the Protected Parties’ remedies for any breach or threatened breach of his obligations under Section 6, the Employee shall be responsible for payment (in an amount not to exceed $100,000 in the aggregate) of the attorneys’ and experts’ fees and expenses of the Protected Parties, as well as court or other forum costs, pertaining to any suit, arbitration, mediation, action or other proceeding (including the costs of any investigation related thereto) arising directly or indirectly out of the Employee’s violation or threatened violation of any of the provisions of Section 6. Further, without limiting the Protected Parties’ remedies for any breach of any restriction on the Employee set forth in Section 6, the Employee agrees that if he breaches any of restrictions set forth in Sections 6.2 or 6.3, the running of the time period of such provision(s) shall be extended from the end of the original Non-Solicit Period or Non-Compete Period, as applicable, for the period of time the Employee was in breach of the provision(s).

13

7.           Other Provisions.

7.1         Notices. Any notice or other communication required or which may be given hereunder shall be in writing and shall be delivered personally, telegraphed, telexed, sent by facsimile transmission or sent by certified, registered or express mail, postage prepaid or overnight mail and shall be deemed given when so delivered personally, telegraphed, telexed, or sent by facsimile transmission or, if mailed, four (4) days after the date of mailing or one (1) day after overnight mail, as follows:

(a)          If the Company, to:

Tower Automotive Operations USA I, LLC

17672 N. Laurel Park Drive, Suite 400E

Livonia, Michigan 48152

Attn: Chief Executive Officer

Telephone: (248) 675-6000

Facsimile: (248) 675-6801

and

Lowenstein Sandler LLP

1251 Avenue of the Americas

New York, New York 10020

Attn: Robert G. Minion, Esq.

Telephone: (212) 262-6700
Facsimile: (212) 262-7402

(b)        If the Employee, to the Employee’s home address reflected in the Company’s records.

7.2          Entire Agreement. This Agreement contains the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, written or oral, with respect thereto, including the Prior Severance Agreement.

7.3         Representations and Warranties by the Employee. The Employee represents and warrants to the Company that: (a) he has the legal authority to execute and perform this Agreement; (b) this Agreement is a valid and binding agreement enforceable against himccording to its terms; (c) he has consulted his attorneys and financial advisors with respect to the terms of this Agreement (specifically, including, without limitation, the provisions of Sections 6.2 and 6.3); and (d) he is not a party to or subject to any restrictive covenants, legal restrictions or other agreements in favor of any entity or person which would in any way preclude, inhibit, impair or limit the Employee’s ability to perform his obligations under this Agreement, including, but not limited to, non-competition agreements, non-solicitation agreements or confidentiality agreements. The Employee shall not disclose to the Company or to any of the other Protected Parties, or induce the Company or any of the other Protected Parties to use, any proprietary, secret, or confidential information or material belonging to any other individual or entity, including, without limitation, any former employers.

14

7.4         Waiver and Amendments. This Agreement may be amended, modified, superseded, canceled, renewed or extended, and the terms and conditions hereof may be waived, only by a written instrument signed by the Parties or, in the case of a waiver, by the Party waiving compliance. No delay on the part of any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any right, power or privilege hereunder, nor any single or partial exercise of any right, power or privilege hereunder, preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

7.5          Governing Law, Dispute Resolution and Venue.

(a)        Any and all actions or controversies arising out of this Agreement or the termination thereof, including, without limitation, tort claims, shall be governed and construed in accordance with the laws of the State of New York applicable to agreements made and not to be performed entirely within such state, without regard to conflicts of laws principles.

(b)        The Parties agree irrevocably to submit to the exclusive jurisdiction of the federal courts or, if no federal jurisdiction exists, the state courts, located in the City of New York, Borough of Manhattan, for the purposes of any suit, action or other proceeding brought by any Party arising out of any breach of any of the provisions of this Agreement and hereby waive, and agree not to assert by way of motion, as a defense or otherwise, in any such suit, action, or proceeding, any claim that it is not personally subject to the jurisdiction of the above-named courts, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper, or that the provisions of this Agreement may not be enforced in or by such courts. In addition, the Parties irrevocably waive any right to request a trial by jury in any such actions or controversies and represent that such Party has had the opportunity to consult with counsel specifically with respect to this waiver.

7.6          Benefit of Agreement; Delegation of Duties Prohibited. This Agreement shall inure to the benefit of, and shall be binding upon, the Parties and their respective successors, permitted assigns, heirs, and legal representatives, including any entity with which the Company may merge or consolidate or to which all or substantially all of its assets may be transferred. This Agreement also shall inure to the benefit of the Protected Parties, as well as their respective successors and permitted assigns, including any entity with which any Protected Party may merge or consolidate or to which all or substantially all of its or their assets may be transferred. The duties and covenants of the Employee under this Agreement, being personal, may not be assigned or delegated.

7.7           Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument.

7.8          Headings; Construction. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning of terms contained herein. All references to “Section” or “Sections” refer to the corresponding Section or Sections of this Agreement unless otherwise specified. All words used in this Agreement shall be construed to be of such gender or number as the circumstances require. Unless otherwise expressly provided, the work “including” does not limit the preceding words or terms. Given the full and fair opportunity provided to each Party to consult with their respective counsel with respect to the terms of this Agreement, ambiguities shall not be construed against either Party by virtue of such Party having drafted the subject provision.

15

7.9           Severability. If any term, provision, covenant or restriction of this Agreement, or any part thereof, is held by a court of competent jurisdiction of any foreign, federal, state, county or local government or any other governmental, regulatory or administrative agency or authority to be invalid, void, unenforceable or against public policy for any reason, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected or impaired or invalidated. The Employee acknowledges that the restrictive covenants contained in Section 6 are a condition of this Agreement and are reasonable and valid in temporal scope and in all other respects.

7.10         Judicial Modification. If any court of competent jurisdiction determines that any of the covenants in Section 6, or any part of any of them, is invalid or unenforceable, the remainder of such covenants and parts thereof shall not thereby be affected and shall be given full effect, without regard to the invalid portion. If any court of competent jurisdiction determines that any of such covenants, or any part thereof, is invalid or unenforceable because of the geographic or temporal scope of such provision, such court shall reduce such scope to the minimum extent necessary to make such covenants valid and enforceable.

7.11        Compliance with Law. This Agreement is intended to comply with the requirements of Code Section 409A and the regulations promulgated thereunder. To the extent that any provision in this Agreement is ambiguous as to its compliance with Code Section 409A, the provision shall be read in such a manner so that all payments under Sections 4 and 5 shall comply with Code Section 409A. For purposes of this Agreement, the terms “employment termination,” “termination of employment” and terms of like meaning are intended to constitute a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h)(1). If necessary to comply with Code Section 409A(a)(2)(B) concerning payments to a “specified employee,” any payment on account of the Employee’s separation from service that would otherwise be due hereunder within six (6) months after such separation shall nonetheless be delayed until the first business day of the seventh month following the Employee’s separation from service, or the Employee’s death, if earlier, at which time all delayed payments shall be aggregated and paid in a lump sum. Notwithstanding the foregoing, the Employee shall be responsible for any taxes, interest and penalties imposed on the Employee under or as a result of Code Section 409A in connection with the receipt of payments and benefits under this Agreement.

7.12         Tax Withholding. The Employee authorizes the Company to withhold from any benefit provided or payment due hereunder, the amount of withholding taxes due any federal, state or local authority in respect of such benefit or payment and to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such withholding taxes.

7.13        Notice of New Employment or Engagement. The Employee shall, during the Non-Compete Period and Non-Solicit Period, give written notice to the Company, within ten (10) calendar days after accepting any employment or other engagement to perform services, of the identity of the individual or entity by whom or which the Employee has been employed or engaged. The Company may notify such individual or entity that the Employee is bound by this Agreement and, at the Company’s election, furnish such individual or entity with a copy or summary of this Agreement (in whole or in part).

7.14         Indemnification. The Company shall indemnify and hold the Employee harmless, to the extent permitted by the Company’s Bylaws (as amended from time to time), against all liability, expense or loss (including reasonable attorneys’ fees and penalties) incurred by the Employee by reason of the fact that the Employee is an officer of the Company acting within the scope of the Employee’s duties and authorities.

7.15        Survival. The provisions of Sections 5, 6, and 7 of this Agreement shall survive the termination of this Agreement and the employment relationship hereunder.

16

7.16         Recoupment. The Company’s recoupment policies shall apply to all bonuses and awards, if any, payable to the Employee under this Agreement. If the Company restates its financial statements due to material noncompliance with any financial reporting requirements under applicable securities laws, any payments pursuant to this Agreement for or in respect of the year that is restated, may be recovered to the extent the payments made exceed the amount that would have been paid as a result of the restatement. Additionally, without limitation of the foregoing, any amounts paid hereunder shall be subject to recoupment in accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act and any implementing regulations or policies thereunder or as is otherwise required by applicable law or stock exchange listing conditions. Without limitation of the foregoing, all bonuses and other incentives payable under this Agreement will be forfeited by the Employee or recouped in their entirety by the Company if it is determined that (i) the Employee engaged in, or knowingly permitted, intentional misconduct pertaining to any financial reporting requirement under the Federal securities laws resulting in the Company being required to prepare and file an accounting restatement with the Securities and Exchange Commission as a result of such misconduct; or (ii) the Employee engaged in, or knowingly permitted, any fraud, theft, misappropriation, embezzlement or dishonesty to the material detriment of the Company’s financial results as filed with the Securities and Exchange Commission. If triggered, then to the fullest extent permitted by law, the Company may require the Employee to reimburse the Company for, or surrender to the Company, all or a portion of any bonus or other incentive compensation under this Agreement received in cash or shares of Common Stock within the last twelve (12) months, and remit to the Company any profits realized from the sale of Common Stock within the last twelve (12) months.

[Signatures on Following Page]

17

IN WITNESS WHEREOF, the Parties hereto, intending to be legally bound hereby, have executed this Agreement as of the day and year first above mentioned.

EMPLOYEE:

/s/ Mark R. Flynn

Mark R. Flynn

TOWER AUTOMOTIVE OPERATIONS USA I, LLC
By:	/s/ James C. Gouin
	Name:  James C. Gouin
	Title:  President and CEO

18

EX-10.72

Exhibit 10.72

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) dated as of December 18, 2018 is between Tower Automotive Operations USA I, LLC, a Delaware limited liability company (the “Company”) and Nanette Dudek, an individual (the “Employee”). (The Company and the Employee are each a “Party” and, collectively, the “Parties”.) This Agreement amends and restates in its entirety the employment agreement between the Parties dated February 1, 2017, as amended February 27, 2018.

WHEREAS, the Parties wish to establish the terms of the Employee’s continuing employment with the Company.

NOW, THEREFORE, the Parties agree as follows:

1.           Employment and Acceptance. The Company shall continue to employ the Employee, and the Employee shall continue to accept employment with the Company, subject to the terms of this Agreement, effective as of January 1, 2019 (the “Effective Date”).

2.           Term. Subject to earlier termination pursuant to Section 5 below, this Agreement and the employment relationship hereunder shall continue from the Effective Date until December 31, 2019 (the “Extended Term”). The term of employment shall on each January 1 thereafter be deemed to be automatically extended, upon the same terms and conditions, for successive periods of one year, unless either Party, at least sixty (60) calendar days prior to the expiration of the Extended Term or any subsequent extended term, shall give written notice to the other of its or her intention not to renew such employment term. As used in this Agreement, “Term” shall refer to the period beginning on the Effective Date and ending on the date on which the Employee’s employment terminates in accordance with this Section 2 or Section 5. Upon the expiration of the Term or earlier termination of this Agreement and the employment relationship hereunder, the Company shall have no further obligations to the Employee under this Agreement or otherwise, except as specifically set forth in Section 5.

3.           Duties and Title.

3.1           Title. The Company shall employ the Employee to render exclusive and full-time services to the Company and the other members of the Company Group (as defined below). The Employee shall serve in the capacity of Corporate Secretary & Vice President, Legal Affairs and Compliance of Tower and in such other positions or capacities commensurate with her position as may be requested by the Board of Directors of Tower (the “Board”), the Chairman of the Board and/or the Chief Executive Officer of Tower (the “CEO”) (including, without limitation, serving as an officer of, or in another capacity for, one or more members of the Company Group). As used in this Agreement: (a) “Company Group” means the Company and its Affiliates; and (b) “Affiliate” of any individual or entity means any other individual or entity that directly or indirectly controls, is controlled by, or is under common control with, the individual or entity; provided that, for purposes of this Agreement, an “Affiliate” of the Company means Tower and any entity that is owned or controlled by Tower.

1

3.2           Duties. During the Term, the Employee shall have such authority and responsibilities and shall perform such executive duties as may be assigned to the Employee by the CEO, the Board and/or the Chairman of the Board, including such duties as are customarily performed by a corporate secretary of a company in similar lines of business as the Company and its Affiliates and, without limitation, performing services for the other members of the Company Group. Notwithstanding, anything contained herein to the contrary, the Employee’s authority and responsibilities shall be limited to the extent determined by the Board, the Chairman of the Board and/or the CEO. During the Term, the Employee shall devote all of her full working-time and attention to the performance of such duties and to the promotion of the business and interests of the Company Group; provided, however, that the Employee may serve as a director of an entity with the written approval of the Board, engage in charitable activities and manage her own personal investments so long as such activities do not interfere with her duties and responsibilities hereunder.

3.3           Location. The Employee shall perform her full-time services to the Company Group in the Company’s Livonia, Michigan office; provided, however, that the Employee shall be required to travel as necessary to perform her duties hereunder.

4.           Compensation and Benefits by the Company. As compensation for all services rendered pursuant to this Agreement (including, without limitation, services as an officer, director or member of any committee of any member of the Company Group or any division of a member of the Company Group), the Company shall provide the Employee with the following during the Term:

4.1           Base Salary. During the Term, the Company shall pay the Employee a base salary of $280,000 on an annualized basis, payable in accordance with the customary payroll practices of the Company (“Base Salary”). The Base Salary shall be subject to periodic review and adjustments as the Compensation Committee of the Board (the “Committee”) deems appropriate, in its discretion. Except to the extent commensurate with “across the board” reductions to base salaries made applicable to similarly situated officers of the Company, the Employee’s Base Salary may not be decreased.

4.2           Annual Bonus. Subject to Section 7.16 below, for each fiscal year ending during the Term, the Employee shall be eligible to receive, under the Company’s annual incentive program pursuant to the Tower International, Inc. 2010 Equity Incentive Plan (or any successor plan thereto) (the “2010 Plan”), an annual variable bonus payment with a target gross amount of seventy percent (70%) of the Employee’s annualized Base Salary (as in effect as of the beginning of the applicable fiscal year) (the “Annual Bonus”), subject to market evaluation and adjustment of such target amounts at the discretion of the Committee. The precise amount of the Annual Bonus shall be based on work performance and achievement of targets as determined by the Committee at the beginning of the applicable fiscal year. If such targets are fully achieved, the Employee shall be eligible for one hundred percent (100%) of the target Annual Bonus. If the targets are under-achieved or over-achieved, the Annual Bonus shall be reduced or increased, as applicable, as determined by the Committee. The Annual Bonus payment shall be due and payable at such time or times as the Committee determines (the “Annual Bonus Approval Date”), but not later than the later of May 1 of the year following the fiscal year to which the Annual Bonus relates or thirty (30) days following approval by the Board (or committee thereof) of the audited financial statements of the Company Group for such fiscal year. To be eligible to receive any Annual Bonus (or portion thereof), the Employee must be employed by the Company on the Annual Bonus Approval Date, except as provided in Section 5.

4.3           LTI Awards. Subject to Section 7.16 below, for each fiscal year ending during the Term, the Employee shall be eligible to receive an annual long term incentive (LTI) award pursuant to the 2010 Plan with a target gross amount of forty percent (40%) of the Employee’s annualized Base Salary (as in effect as of the beginning of the applicable fiscal year), subject to market evaluation and adjustment of such target amounts at the discretion of the Committee.

2

4.4           Participation in Employee Benefit Plans. The Employee shall be entitled during the Term, if and to the extent eligible, to participate in all of the applicable benefit plans (excluding severance plans, if any) of the Company, which may be available to other senior executives of the Company. The Company may at any time or from time to time amend, modify, suspend or terminate any employee benefit plan, program or arrangement for any reason without the Employee’s consent if such amendment, modification, suspension or termination is consistent with the amendment, modification, suspension or termination for other executives of the Company.

4.5           Expense Reimbursement.

(a)           During the Term, the Employee shall be entitled to receive reimbursement for all appropriate business expenses incurred by her in connection with her duties under this Agreement in accordance with the policies of the Company as in effect from time to time.

(b)           All reimbursements and in-kind benefits provided under this Agreement that constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), shall be made or provided in accordance with Code Section 409A, and: (i) in no event shall reimbursements by the Company under this Agreement be made later than the end of the calendar year next following the calendar year in which such fees and expenses were incurred (and then only to the extent the Employee has submitted an invoice for such fees or expenses at least thirty (30) days before the end of the calendar year next following the calendar year in which such fees and expenses were incurred, and the Employee has complied with all Company policies regarding such reimbursements); (ii) the amount of in-kind benefits or expenses that the Company is obligated to reimburse in any given calendar year (other than medical reimbursements described in Treas. Reg. Section 1.409A-3(i)(1)(iv)(B)) shall not affect the in-kind benefits or expenses eligible for reimbursement by the Company in any other calendar year; (iii) the Employee’s right to have the Company pay or provide such reimbursements and in-kind benefits may not be liquidated or exchanged for any other benefit; and (iv) in no event shall the Company’s obligation to make such reimbursements or to provide such in-kind benefits apply later than the periods set forth in this Agreement.

4.6           Accelerated Vesting of Equity and LTI Awards. Notwithstanding anything in the 2010 Plan or any award agreement issued thereunder to the contrary, all then outstanding awards granted to the Employee pursuant to the 2010 Plan, including equity-based awards, performance awards (payable in cash and/or stock) and awards granted prior to February 1, 2017 (the “2010 Plan Awards”), shall immediately become fully vested upon the consummation of a Change in Control (as defined below) (assuming, in the case of each performance award, target level performance for the entire performance period (without proration of the amount payable thereto). For purposes of this Agreement, “Change in Control” shall be defined as set forth in Section 2.6 of the 2010 Plan on the earlier of February 1, 2017 or the Effective Date of this Agreement.         

5.           Termination of Employment.

5.1           By the Company for Cause or by the Employee. If: (i) the Company terminates the Employee’s employment with the Company for Cause; or (ii) the Employee terminates her employment with the Company for any reason or no reason, then the Employee shall be entitled to receive, and the Company’s sole obligation under this Agreement or otherwise shall be to pay or provide to the Employee, the following (collectively, the “Accrued Benefits”):

3

(a)        the Employee’s earned, but unpaid, Base Salary through the effective date of termination (payable in accordance with Section 4.1 above) and any amounts or benefits (if any) that are vested amounts or vested benefits or that the Employee is otherwise entitled to receive under the express provision of any plan, program, policy or practice on the effective date of termination (excluding, without limitation, severance pay plans (if any) and any amounts or benefits (if any) that are forfeited in the event of a termination for Cause, termination by the Employee for any reason or no reason, or other termination in accordance with the terms of the applicable plan, program, policy, or practice), which amounts and/or benefits shall be payable or provided in accordance with the terms of such plan, program, policy or practice;

(b)        any Annual Bonus (or portion thereof), if any, relating to the fiscal year prior to the fiscal year in which the effective date of the Employee’s termination occurs that was earned on the applicable Annual Bonus Approval Date, but unpaid, as of the date of termination, which unpaid Annual Bonus (or portion thereof) shall be payable in accordance with Section 4.2; and

(c)          expenses reimbursable under Section 4.5 incurred, but not yet reimbursed to the Employee, to the date of termination.

For the purposes of this Agreement, “Cause” means, as determined by a majority of the Board and/or the CEO, in the Board’s and/or the CEO’s reasonable business judgment acting in good faith and engaging in fair dealing with the Employee, with respect to conduct during the Employee’s employment with the Company, whether or not committed during the Term: (i) commission of a felony by the Employee; (ii) acts of dishonesty by the Employee resulting or intending to result in personal gain or enrichment at the expense of any member of the Company Group or any of their respective Affiliates; (iii) the Employee’s appropriation (or attempted appropriation) of any business opportunity of any member of the Company Group or any of their respective Affiliates, including, without limitation, attempting to secure or securing any personal profit or benefit in connection with any transaction entered into by or on behalf of any member of the Company Group or any of their respective Affiliates; (iv) the Employee’s material breach of any of her duties, representations, warranties, covenants or other obligations under this Agreement; (v) conduct by the Employee in connection with her duties hereunder that is fraudulent or grossly negligent or that the Employee knew or reasonably should have known to be unlawful, provided that any action taken by the Employee on the advice of the Company’s General Counsel (or his/her designee) shall not be treated as unlawful for purposes of this clause (v); (vi) engaging in personal conduct by the Employee (including, but not limited to, employee harassment or discrimination, or the use or possession at work of any illegal controlled substance) which seriously discredits or damages any member of the Company Group or any of their respective Affiliates; (vii) contravention of specific lawful direction of the Board and/or the CEO, failure to adhere to any applicable policy or procedure of the Company of which the Employee has knowledge or which has been provided to the Employee in writing, or inattention to or failure to attempt, in good faith, to perform the material duties to be performed by the Employee under the terms of this Agreement; or (viii) breach of the Employee’s covenants set forth in Section 6 below before termination of employment; provided, that, with respect to clauses (iv) and (vii) only, the Employee shall have thirty (30) days after notice from the Company, which notice shall set forth in reasonable detail a description of the deficiency determined by the Board and/or the CEO to constitute Cause, to cure the deficiency leading to the Cause determination, if curable. A termination for “Cause” shall be effective immediately (or on such other date set forth by the Company).

4

5.2           By the Company Without Cause or Due to the Company’s Decision Not to Extend a Term or By the Employee for Good Reason or Due to Death or Disability. If, during the Term, (i) the Company terminates the Employee’s employment without Cause (which may be done at any time with or without prior notice) or elects not to extend the Term per Section 2 above; (ii) the Employee terminates her employment for Good Reason upon at least thirty (30) days prior written notice and opportunity to cure; (iii) the Employee’s employment terminates due to her death; or (iv) the Company terminates the Employee’s employment due to the Employee’s Disability (as defined below), then the Employee (or, in the event of the Employee’s death or incapacity, the Employee’s legal representative) shall be entitled to receive, and the Company’s sole obligation under this Agreement or otherwise shall be to pay or provide:

(a)         the Accrued Benefits; and

(b)        subject to the Employee’s (or, in the event of the Employee’s death or incapacity, the Employee’s legal representative’s) execution, delivery and non-revocation of a general release in a form satisfactory to the Company (the “Release”), which Release, among other things, shall include a general release of the members of the Company Group, each of their respective direct and indirect parent entities and direct and indirect subsidiaries, each of their respective Affiliates, and each of their respective officers, directors, employees, shareholders, members, managers, partners, plan administrators, and agents, as well as the predecessors, past and future successors and assigns or estates of any of the foregoing, from all liability; provided, however, that the Release shall preserve the Employee’s rights, if any: (i) to indemnification under the Company Group’s Bylaws (as amended from time to time), applicable law or otherwise, and coverage under the Company Group’s Directors and Officers liability insurance policies for any claims arising out of or relating to the Employee’s employment with the Company; (ii) to the Accrued Benefits; (iii) under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”); and (iv) under any provisions of this Agreement that are intended to survive the termination of this Agreement and the Employee’s employment hereunder (including, without limitation, the Company’s obligations under this Section 5.2):

(i)            an aggregate amount equal to:

(A)        one (1) times the Employee’s annualized rate of Base Salary as of the effective date of termination (the “Base Severance Amount”); plus

(B)         the average of the Employee’s bonuses paid for the three (3) consecutive fiscal years immediately prior to the year of employment termination, plus a pro-rated bonus for the year of the Employee’s employment termination based on the actual bonus awards earned and paid for the fiscal year of the Employee’s termination (in the aggregate, the “Bonus Severance Amount”). The pro-rated amount will be based on the number of days in the fiscal year up to and including the date of employment termination in relation to the total number of days in the fiscal year; and

5

(ii)         if the Employee (or, if eligible for continuation coverage under the terms of such plans and applicable law, the Employee’s legal representatives) elects continuing group coverage pursuant to COBRA, the Company (on a taxable basis) shall waive (or reimburse the Employee on a monthly basis for) the cost of such coverage to the extent that such cost exceeds the cost that the Company charges active employees for similar coverage until the earlier of (x) the completion of the first twelve (12) months of COBRA coverage, or (y) the date that the Employee (or the Employee’s legal representatives, if applicable) is covered under another group health plan, subject to the terms of the plans and applicable law. The Company may modify its obligation to provide such benefit to the extent reasonably necessary to avoid any penalty or excise taxes imposed on it under the Patient Protection and Affordable Care Act of 2010, as amended, provided that it does so in a manner that to the extent possible, as determined by the Company in its discretion, preserves the economic benefit and original intent of such benefit but does not cause such a penalty or excise tax.

For the purposes of this Agreement, “Disability” means a determination by the Company in accordance with applicable law that, as a result of a physical or mental injury or illness, the Employee is unable to perform the essential functions of her job (with or without reasonable accommodation) for a period of (i) ninety (90) consecutive days, or (ii) one hundred twenty (120) days in any twelve-month period.

The Base Severance Amount, less standard income and payroll tax withholdings and other authorized deductions, shall be payable in twelve (12) equal monthly installments, commencing within seventy-five (75) days following the Employee’s date of termination, but in no event later than March 15 of the year following the year in which the Employee’s date of termination occurs; provided, however, that payment of the Base Severance Amount shall not commence unless the statutory period during which the Employee is entitled to revoke the Release has expired during the 75-day period following the Employee’s date of termination and provided further that any payments provided hereunder shall be made in the second taxable year if the 75-day period begins in one taxable year of the Employee and ends in the subsequent taxable year. Each installment of the Base Severance Amount shall be treated as a separate payment for purposes of Code Section 409A.

The Bonus Severance Amount, less standard income and payroll tax withholdings and other authorized deductions, shall be payable in a single lump sum between January 1 and March 15 of the year following the year in which the Employee’s date of termination occurs; provided, however, that payment of the Bonus Severance Amount shall not be made unless the statutory period during which the Employee is entitled to revoke the Release has expired.

The Company shall have no obligation to provide the payments and benefits (other than Accrued Benefits) set forth above in the event that the Employee breaches the provisions of Section 6.

5.3           By the Company without Cause or by the Employee for Good Reason Following a Change in Control. If, within two (2) years following the consummation of a Change in Control, (i) the Company terminates the Employee’s employment without Cause (which may be done at any time with or without prior notice and, for the avoidance of doubt, includes a termination by the Company without Cause that occurs simultaneous with or immediately prior to the consummation of a Change in Control); or (ii) the Employee terminates her employment for Good Reason (as defined below), upon at least thirty (30) days prior written notice and opportunity to cure; then, in lieu of any amounts or benefits otherwise payable pursuant to Section 5.2, the Employee shall be entitled to receive, and the Company’s sole obligation under this Agreement or otherwise shall be to pay or provide:

6

(a)         the Accrued Benefits; and

(b)        subject to the Employee’s execution, delivery and non-revocation of a Release, the terms of which are described in Section 5.2(b) above:

(i)           an aggregate amount equal to:

(A)        two (2) times the Employee’s annualized rate of Base Salary as of the effective date of her employment termination (the “CIC Base Severance Amount”); plus

(B)         two (2) times the Employee’s target bonus for the year of employment termination, plus a pro-rated bonus for the year of the Employee’s employment termination based on the actual bonus awards for the fiscal year of the Employee’s termination (in the aggregate, the “CIC Bonus Severance Amount”). The pro-rated amount will be calculated based on the number of days in the fiscal year up to and including the date of employment termination in relation to the total number of days in the fiscal year; and

(ii)         if the Employee (or, if eligible for continuation coverage under the terms of such plans and applicable law, the Employee’s legal representatives) elects continuing group coverage pursuant to COBRA, the Company (on a taxable basis) shall waive (or reimburse the Employee on a monthly basis for) the cost of such coverage to the extent that such cost exceeds the cost that the Company charges active employees for similar coverage until the earlier of (x) the completion of the first eighteen (18) months of COBRA coverage, or (y) the date that the Employee (or the Employee’s legal representatives, if applicable) is covered under another group health plan, subject to the terms of the plans and applicable law. The Company may modify its obligation to provide such benefit to the extent reasonably necessary to avoid any penalty or excise taxes imposed on it under the Patient Protection and Affordable Care Act of 2010, as amended, provided that it does so in a manner that to the extent possible, as determined by the Company in its discretion, preserves the economic benefit and original intent of such benefit but does not cause such a penalty or excise tax.

(c)          The CIC Base Severance Amount, less standard income and payroll tax withholdings and other authorized deductions, shall be payable in twenty-four (24) equal monthly installments, commencing within seventy-five (75) days following the Employee’s date of employment termination, but in no event later than March 15 of the year following the year in which the Employee’s date of termination occurs; provided, however, that payment of the CIC Base Severance Amount shall not commence unless the statutory period during which the Employee is entitled to revoke the Release has expired during the 75-day period following the Employee’s termination and provided further that any payments provided hereunder shall be made in the second taxable year if the 75-day period begins in one taxable year of the Employee and ends in the subsequent taxable year. Each installment of the CIC Base Severance Amount shall be treated as a separate payment for purposes of Code Section 409A.

7

(d)          The CIC Bonus Severance Amount, less standard income and payroll tax withholdings and other authorized deductions, shall be payable in a single lump sum between January 1 and March 15 of the year following the year in which the Employee’s date of termination occurs; provided, however, that payment of the CIC Bonus Severance Amount shall not be made unless the statutory period during which the Employee is entitled to revoke the Release has expired.

(e)          If the payment of any of the foregoing amounts or benefits under Section 5.3 (when added to any other payments or benefits provided to the Employee in the nature of compensation under Code Section 280G(b)(2)) (the “Total Payments”) shall be subject to the excise tax imposed by Code Section 4999, the aggregate Present Value of the Payments (defined below) under this Agreement shall be reduced (but not below zero) to the Reduced Amount, but only if reducing the Payments shall provide the Employee with a Net After-Tax Benefit that is greater than if the reduction is not made. The reduction of amounts payable hereunder, if applicable, shall be determined by the Accounting Firm (defined below) in an amount that has the least economic cost to the Employee and, to the extent the economic cost is equivalent, then all Payments, in the aggregate, shall be reduced in the inverse order of when the Payments, in the aggregate, would have been made to the Employee until the specified reduction is achieved. For purposes of this Agreement, the following definitions apply:

“Net After-Tax Benefit” means the Present Value of a Payment, net of all federal, state and local income, employment and excise taxes, determined by applying the highest marginal rate(s) applicable to an individual for the Employee’s taxable year in which Payment is made.

“Payment” means any payment or distribution in the nature of compensation (within the meaning of Code Section 280G(b)(2)) to or for the benefit of the Employee, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise.

“Present Value” means the value determined in accordance with Code Section 280G.

“Reduced Amount” means an amount expressed in Present Value that maximizes the aggregate Present Value of Payments without causing any Payment to be subject to excise tax under Code Section 4999 or the corporate deduction limitation under Code Section 280G.

The Code Section 280G calculations under this Agreement and the determination that Payments shall be reduced or not reduced based on the Net After-Tax Benefit shall be made by a nationally recognized independent public accounting firm selected by the Company (the “Accounting Firm”), which shall provide its determination and any supporting calculations to the Company and the Employee within ten (10) days after the Employee’s employment termination. The reasonable costs and expenses of the Accounting Firm shall be borne by the Company. The determination by the Accounting Firm shall be binding upon the Company and the Employee. In making its determination, the Accounting Firm shall take into account (if applicable) the value of the Employee’s non-competition covenant set forth in Section 6 of this Agreement, which value shall be determined by the independent appraisal of a nationally-recognized business valuation firm selected by the Company, and a portion of the Payments shall, to the extent of the appraised value, be specifically allocated as reasonable compensation for such non-competition covenant and shall not be treated as a parachute payment. If the Accounting Firm’s determination is disputed by the Internal Revenue Service, the Company shall reimburse the Employee for the cost of the Employee’s reasonable attorneys’ fees for counsel selected by the Company, and any tax penalties (including excise tax) and interest ultimately incurred by the Employee upon resolution of the dispute. Reimbursement shall be made in accordance with the Code Section 409A procedures set forth in Section 4.5(b) hereof.

8

The Company shall have no obligation to provide the payments and benefits (other than Accrued Benefits) set forth above in the event that Employee breaches the provisions of Section 6.

For the purposes of this Agreement, “Good Reason” means, without the Employee’s consent, (i) a material reduction in Employee’s compensation; or (ii) the Company’s change of the Employee’s primary work location to a location that is beyond a thirty (30) mile radius of Livonia, Michigan; or (iii) subject to a reasonable opportunity to cure, the Company’s ongoing material breach of the terms of this Agreement; (iv) the Employee’s direct reporting relationship is changed to other than the CEO, President, COO, CFO, CHRO or General Counsel of the Company; provided that a suspension of the requirement that the Employee not report to work shall not constitute “Good Reason” if the Employee continues to receive the compensation and benefits required by this Agreement.

The Employee shall be deemed to have consented to any act or event that would otherwise give rise to “Good Reason,” unless the Employee provides written notice to the Company specifying the act or event within thirty (30) days following the occurrence of such act or event. The Company shall have thirty (30) days after receipt of notice from the Employee specifying the act or event otherwise constituting Good Reason to cure the act or event that otherwise would constitute Good Reason.

5.4           No Mitigation; No Offset. The Employee shall be under no obligation to seek other employment after her termination of employment with the Company and the obligations of the Company to the Employee which arise upon the termination of her employment pursuant to this Section 5 shall not be subject to mitigation or offset.

5.5           Resignation from any Boards and Position. If the Employee’s employment is terminated for any reason under this Agreement, unless otherwise agreed by the Parties, she shall be deemed to resign (i) if a member, from the Board or board of directors of any other member of the Company Group or any other board to which she has been appointed or nominated by or on behalf of the Company or any other member of the Company Group, and (ii) from any position with any member of the Company Group, including, but not limited to, as an officer of any member of the Company Group; and the Employee agrees to take all further actions that are deemed reasonably necessary by the Company to effectuate or evidence such resignations.

9

6.           Restrictions and Obligations of the Employee.

6.1           Confidentiality.

(a)          During the course of the Employee’s employment by the Company (prior to and during the Term) or otherwise, the Employee has had and will have access to certain trade secrets and confidential information relating to the Company and its Affiliates, its and their respective direct and indirect parent entities and direct and indirect subsidiaries and each of their respective Affiliates, as well as their respective predecessors, successors and assigns (collectively, the “Protected Parties”) which is not readily available from sources outside the Protected Parties. The confidential and proprietary information and trade secrets of the Protected Parties are among their most valuable assets, including but not limited to, their customer, supplier and vendor lists, databases, competitive strategies, computer programs, frameworks, or models, their marketing programs, their sales, financial, marketing, training and technical information, their product development (and proprietary product data) and any other information, whether communicated orally, electronically, in writing or in other tangible forms concerning how the Protected Parties create, develop, acquire or maintain their products and marketing plans, target their potential customers and operate their retail and other businesses. The Protected Parties invested, and continue to invest, considerable amounts of time and money in their process, technology, know-how, obtaining and developing the goodwill of their customers, their other external relationships, their data systems and data bases, and all the information described above (hereinafter collectively referred to as “Confidential Information”), and any misappropriation or unauthorized disclosure of Confidential Information in any form would irreparably harm the Protected Parties. The Employee acknowledges that such Confidential Information constitutes valuable, highly confidential, special and unique property of the Protected Parties. The Employee shall hold in a fiduciary capacity for the benefit of the Protected Parties all Confidential Information relating to the Protected Parties and their businesses, which shall have been obtained by the Employee during the Employee’s employment by the Company or its Affiliates or otherwise and which shall not be or become public knowledge (other than by acts by the Employee or representatives of the Employee in violation of this Agreement). Except as required by law or an order of a court or governmental agency with jurisdiction, the Employee shall not, during the period the Employee is employed by the Company or its Affiliates or at any time thereafter, disclose any Confidential Information, directly or indirectly, to any person or entity for any reason or purpose whatsoever, nor shall the Employee use it in any way, except in the course of the Employee’s employment with, and for the benefit of, the Protected Parties or to enforce any rights or defend any claims hereunder or under any other agreement with any Protected Party to which the Employee is a party, provided that such disclosure is relevant to the enforcement of such rights or defense of such claims and is only disclosed to the extent necessary in the formal proceedings related thereto. The Employee shall take all reasonable steps to safeguard the Confidential Information and to protect it against disclosure, misuse, espionage, loss and theft. The Employee understands and agrees that the Employee shall acquire no rights to any such Confidential Information. Notwithstanding the foregoing or anything else contained herein to the contrary, this Agreement shall not preclude the Employee from disclosing Confidential Information to a governmental body or agency or to a court if and to the extent that a restriction on such disclosure would limit the Employee from exercising any protected right afforded the Employee under applicable law, including the ability to receive an award for information provided to a governmental body.

(b)          Employee acknowledges receipt of the following notice under the Defend Trade Secrets Act: An individual will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret if he/she (i) makes such disclosure in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney and such disclosure is made solely for the purpose of reporting or investigating a suspected violation of law; or (ii) such disclosure was made in a complaint or other document filed in a lawsuit or other proceeding if such filing is made under seal.

10

(c)        All files, records, documents, drawings, specifications, data, computer programs, evaluation mechanisms and analytics and similar items relating thereto or to the Business (for the purposes of this Agreement, “Business” shall be as defined in Section 6.3 hereof), as well as all customer lists, specific customer information, compilations of product research and marketing techniques of the Protected Parties, whether prepared by the Employee or otherwise coming into the Employee’s possession, shall remain the exclusive property of the Company or other Protected Parties, as applicable, and the Employee shall not remove any such items from the premises of the Company or other Protected Parties, except in furtherance of the Employee’s duties under this Agreement.

(d)        It is understood that while employed by the Company or any of its Affiliates, the Employee will promptly disclose to the Company and to no one else, any idea, invention, technique, modification, process, or improvement (whether patentable or not, any industrial design (whether registrable or not), any mask work, however fixed or encoded, that is suitable to be fixed, embedded or programmed in a product (whether recordable or not) and any work of authorship (whether or not copyright protection may be obtained for it) created, conceived, or developed by the Employee or the Employee’s Affiliate (“Inventions”), either solely or in conjunction with others, during Employee’s employment with the Company or any of its Affiliates, that relates in any way to, or is useful in any manner to, the business then being conducted or proposed to be conducted by any member of the Company Group or any of their respective Affiliates and any such item created by the Employee or the Employee’s Affiliate, either solely or in conjunction with others, that is based upon or uses Confidential Information. Employee agrees that (i) each Invention belongs, or shall belong, exclusively to the Company from conception, (ii) all of the Employee’s writings, works of authorship, specially commissioned works, and other Inventions are works made for hire and are the exclusive property of the Company, including any copyrights, patents, or other intellectual property rights pertaining thereto, and (iii) if it is determined that any such Inventions are not works made for hire, the Employee hereby irrevocably assigns to the Company all of the Employee’s right, title and interest, including rights of copyright, patent, and other intellectual property rights, to or in such Inventions. The Employee covenants that the Employee shall promptly (i) provide a separate written irrevocable assignment to the Company, or to an individual or entity designated by the Company, at the Company’s request and without additional compensation, all of the Employee’s right to any Inventions in the United States and all foreign jurisdictions, (ii) at the Company’s expense, execute and deliver to the Company such applications, assignments, and other documents as the Company may request in order to apply for and obtain patents or other registrations with respect to any Invention in the United States and any foreign jurisdictions, (iii) at the Company’s expense, execute and deliver all other papers deemed necessary by the Company to carry out the above obligations, and (iv) give testimony and render any other assistance in support of the Company’s rights to any Invention (with the Company paying the Employee a reasonable fee for the Employee’s time if the Employee’s employment with the Company or any of its Affiliates has ended at the time of such testimony or assistance). In the event that the Company is unable to secure the Employee’s signature after reasonable effort in connection with any patent, trademark, copyright or other similar protection relation to an Invention, the Employee irrevocably designates and appoints the Company and its respective officers and agents as the Employee’s agent and attorney-in-fact, to act for and on the Employee’s behalf and stead to execute and file any such application and to do all other lawfully permitted acts to further the prosecution and issuance of patents, trademarks, copyrights or similar protection thereon with the same legal force and effect as if executed by the Employee. At all times during and after the Employee’s employment by the Company, the Employee shall assist the Company in obtaining, maintaining, and renewing patent, copyright, trademark and other appropriate protection for any Invention, in the United States and in any foreign jurisdictions, at the Company’s expense.

11

(e)        As requested by the Company, from time to time and upon the termination of the Employee’s employment with the Company for any reason or no reason, the Employee shall promptly deliver to the Company all copies and embodiments, in whatever form, of all Confidential Information in the Employee’s possession or within her control (including, but not limited to, memoranda, records, notes, plans, photographs, manuals, notebooks, documentation, program listings, flow charts, magnetic media, disks, diskettes, tapes and all other materials containing any Confidential Information) irrespective of the location or form of such material. If requested by the Company, the Employee will provide the Company with written confirmation that all such materials have been delivered to the Company as provided herein.

6.2           Non-Solicitation or Hire. During the Term and for a period of twelve (12) months following the Employee’s employment termination if such employment termination was pursuant to Section 5.1 or Section 5.2, or twenty-four (24) months following the Employee’s employment termination if such employment termination was pursuant to Section 5.3 (the “Non-Solicit Period”), the Employee shall not, directly or indirectly, solicit or attempt to solicit or induce or attempt to induce, directly or indirectly, (a) any individual or entity who or which is a customer of the Company or any of the other Protected Parties, or who or which was a customer of the Company or any of the other Protected Parties at any time during the twelve (12) month period immediately prior to the date of the Employee’s employment termination, for the purpose of marketing, selling or providing to any such individual or entity any services or products offered by or available from the Company or any of the other Protected Parties (provided that if the Employee intends to solicit any such party for any other purpose, she shall notify the Company of such intention and receive prior written approval from the Company), (b) any supplier to or customer or client of the Company or any of the other Protected Parties to terminate, reduce or alter negatively its relationship with the Company or any of the other Protected Parties or in any manner interfere with any agreement or contract between the Company and/or any of the other Protected Parties and such supplier, customer or client, or (c) any employee or agent of the Company or any of the other Protected Parties or any individual or entity who or which was an employee or agent of the Company or any of the other Protected Parties during the twelve (12) month period immediately prior to the date of the Employee’s employment termination, to terminate such individual’s or entity’s employment relationship with, or engagement to perform services for, the Protected Parties in order, in either case, to enter into a similar relationship with the Employee, or any other person or entity in competition with the Business of the Company or any of the other Protected Parties. The Employee further agrees that, during the Non-Solicit Period, she shall not, directly or indirectly, (i) hire or engage (or assist in the hiring or engaging of) any employee or agent of the Company or any of the other Protected Parties or any individual or entity who or which was an employee or agent of the Company or any of the other Protected Parties during the twelve (12) month period immediately prior to the date of the Employee’s employment termination to enter into a similar relationship with the Employee or any other person or entity in competition with the Business of the Company or any of the other Protected Parties, (ii) solicit, divert with the intention to take away, or attempt to divert with the intention to take away, any investment opportunity considered by the Company or any other Protected Party, or (iii) interfere with, disrupt, or attempt to interfere with or disrupt, or assist others to disrupt or interfere with, the relationship, contractual or otherwise, between the Company or of the other Protected Parties and any of their respective customers, clients, accounts, investors, suppliers, lessors, consultants, independent contractors, agents, or employees.

12

6.3           Non-Competition. During the Term and for a period of twelve (12) months following the termination of the Employee’s employment if such employment termination was pursuant to Section 5.1 or Section 5.2, or twenty-four (24) months following the termination of the Employee’s employment termination if such employment termination was pursuant to Section 5.3 (the “Non-Compete Period”), the Employee shall not, directly or indirectly, whether individually, as a director, manager, member, stockholder, partner, owner, employee, consultant or agent of any business, or in any other capacity, other than on behalf of the Company or its Affiliates, organize, establish, own, operate, manage, control, engage in, participate in, invest in, permit her name to be used by, act as a consultant or advisor to, render services for (alone or in association with any person, firm, corporation or business organization), or otherwise assist any person or entity that engages in or owns, invests in, operates, manages or controls any venture or enterprise which engages or proposes to engage in (a) the sale, distribution, manufacturing and/or design of structural metal components and assemblies for the automotive industry, or (b) any other business conducted by the Company, any other member of the Company Group or any of their respective Affiliates on the date of the Employee’s termination of employment or within twelve (12) months after the Employee’s employment termination if such employment termination was pursuant to Section 5.1 or Section 5.2, or twenty-four (24) months after the Employee’s employment termination if such employment termination was pursuant to Section 5.3, in the geographic locations where the Company, the other members of the Company Group and/or their respective Affiliates engage or propose to engage in such business (the “Business”). Notwithstanding the foregoing, nothing in this Agreement shall prevent the Employee from owning for passive investment purposes not intended to circumvent this Agreement, less than five percent (5%) of the publicly traded common equity securities of any company engaged in the Business (so long as the Employee has no power to manage, operate, advise, consult with or control the competing enterprise and no power, alone or in conjunction with other affiliated parties, to select a director, manager, general partner, or similar governing official of the competing enterprise other than in connection with the normal and customary voting powers afforded the Employee in connection with any permissible equity ownership).

6.4           Nondisparagement. The Employee agrees that she shall not at any time (whether during or after the Term) publish or communicate to any person or entity any Disparaging (as defined below) remarks, comments or statements concerning the Company, any of the other Protected Parties or any of their present or former respective members, partners, directors, officers, shareholders, employees, agents, attorneys, successors and assigns. “Disparaging” remarks, comments or statements are those that impugn the character, honesty, integrity or morality or business acumen or abilities in connection with any aspect of the operation of business of the individual or entity being disparaged. Nothing herein shall restrict or limit the Employee from exercising any protected right afforded under applicable law, including reporting information to a governmental body in accordance with applicable law.

6.5           Property. The Employee acknowledges that all originals and copies of materials, records and documents generated by her or coming into her possession or control during her employment by the Company or its Affiliates are the sole property of the Company and/or the other Protected Parties, as applicable (“Company Property”). During the Term, and at all times thereafter, the Employee shall not remove, or cause to be removed, from the premises of the Company or any of the other Protected Parties, copies of any record, file, memorandum, document, computer related information or equipment, or any other item relating to the business of the Company or any of the other Protected Parties, except in furtherance of her duties under the Agreement. When the Employee’s employment with the Company terminates, or upon request of the Company at any time, the Employee shall promptly deliver to the Company all copies of Company Property in her possession or control.

13

6.6           Cooperation. During the Term and thereafter, the Employee shall cooperate with the Company and its Affiliates in any internal investigation or administrative, regulatory or judicial proceeding as reasonably requested by the Company (including, without limitation, the Employee making himself available to the Company upon reasonable notice for interviews and factual investigations, appearing to give testimony at the Company’s request without requiring service of a subpoena or other legal process, volunteering to the Company all pertinent information and turning over to the Company all relevant documents which are or may come into the Employee’s possession, all at times and on schedules that are reasonably consistent with the Employee’s other permitted activities and commitments). In the event that the Company requires the Employee’s cooperation in connection with this Section 6.6, the Company shall pay the Employee a reasonable fee if the Employee’s employment with the Company or any of its Affiliates has ended at the time of such testimony or assistance, and the Company shall reimburse the Employee for reasonable expenses incurred in connection herewith (including lodging and meals, upon acceptable substantiation, including receipts). Nothing herein shall restrict or limit the Employee from exercising any protected right afforded under applicable law, including reporting information to a governmental body in accordance with applicable law.

6.7           Remedies; Specific Performance; Calculation of Time Period. The Parties acknowledge and agree that the Employee’s breach or threatened breach of any of the restrictions set forth in Section 6 will result in irreparable and continuing damage to the Protected Parties for which there may be no adequate remedy at law and that the Protected Parties shall be entitled to equitable relief, including specific performance and temporary, preliminary and permanent injunctive relief (without being obligated to post a bond or other collateral) and to an equitable accounting of all earnings, profits and other benefits arising, directly or indirectly, from such violation, as remedies for any such breach or threatened or attempted breach. The Employee hereby consents to the grant of an injunction (temporary or otherwise) against the Employee or the entry of any other court order against the Employee prohibiting and enjoining her from violating, or directing her to comply with, any provision of Section 6. The Employee also agrees that such remedies shall be in addition to any and all remedies, including damages, available to the Protected Parties against her for such breaches or threatened or attempted breaches. In addition, without limiting the Protected Parties’ remedies for any breach of any restriction on the Employee set forth in Section 6, except as required by law, the Employee shall not be entitled to any payments set forth in Sections 5.2 and 5.3 hereof if the Employee has breached the covenants applicable to the Employee contained in Section 6, and the Employee agrees to immediately return to the Company any such payments previously received under Sections 5.2 or 5.3 upon such a breach. Further, in the event of such breach, the Company shall have no obligation to pay any of the amounts that remain payable by the Company under Sections 5.2 and 5.3. The Employee also agrees that, without limiting the Protected Parties’ remedies for any breach or threatened breach of her obligations under Section 6, the Employee shall be responsible for payment (in an amount not to exceed $100,000 in the aggregate) of the attorneys’ and experts’ fees and expenses of the Protected Parties, as well as court or other forum costs, pertaining to any suit, arbitration, mediation, action or other proceeding (including the costs of any investigation related thereto) arising directly or indirectly out of the Employee’s violation or threatened violation of any of the provisions of Section 6. Further, without limiting the Protected Parties’ remedies for any breach of any restriction on the Employee set forth in Section 6, the Employee agrees that if she breaches any of restrictions set forth in Sections 6.2 or 6.3, the running of the time period of such provision(s) shall be extended from the end of the original Non-Solicit Period or Non-Compete Period, as applicable, for the period of time the Employee was in breach of the provision(s).

7.           Other Provisions.

7.1           Notices. Any notice or other communication required or which may be given hereunder shall be in writing and shall be delivered personally, telegraphed, telexed, sent by facsimile transmission or sent by certified, registered or express mail, postage prepaid or overnight mail and shall be deemed given when so delivered personally, telegraphed, telexed, or sent by facsimile transmission or, if mailed, four (4) days after the date of mailing or one (1) day after overnight mail, as follows:

14

(a)          If the Company, to:

Tower Automotive Operations USA I, LLC

17672 N. Laurel Park Drive, Suite 400E

Livonia, Michigan 48152

Attn: Chief Executive Officer

Telephone: (248) 675-6000

Facsimile: (248) 675-6801

and

Lowenstein Sandler LLP

1251 Avenue of the Americas

New York, New York 10020

Attn: Robert G. Minion, Esq.

Telephone: (212) 262-6700
Facsimile: (212) 262-7402

(b)        If the Employee, to the Employee’s home address reflected in the Company’s records.

7.2           Entire Agreement. This Agreement contains the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, written or oral, with respect thereto, including the Prior Severance Agreement.

7.3           Representations and Warranties by the Employee. The Employee represents and warrants to the Company that: (a) she has the legal authority to execute and perform this Agreement; (b) this Agreement is a valid and binding agreement enforceable against her according to its terms; (c) she has consulted her attorneys and financial advisors with respect to the terms of this Agreement (specifically, including, without limitation, the provisions of Sections 6.2 and 6.3); and (d) she is not a party to or subject to any restrictive covenants, legal restrictions or other agreements in favor of any entity or person which would in any way preclude, inhibit, impair or limit the Employee’s ability to perform her obligations under this Agreement, including, but not limited to, non-competition agreements, non-solicitation agreements or confidentiality agreements. The Employee shall not disclose to the Company or to any of the other Protected Parties, or induce the Company or any of the other Protected Parties to use, any proprietary, secret, or confidential information or material belonging to any other individual or entity, including, without limitation, any former employers.

7.4           Waiver and Amendments. This Agreement may be amended, modified, superseded, canceled, renewed or extended, and the terms and conditions hereof may be waived, only by a written instrument signed by the Parties or, in the case of a waiver, by the Party waiving compliance. No delay on the part of any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any right, power or privilege hereunder, nor any single or partial exercise of any right, power or privilege hereunder, preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

15

7.5          Governing Law, Dispute Resolution and Venue.

(a)        Any and all actions or controversies arising out of this Agreement or the termination thereof, including, without limitation, tort claims, shall be governed and construed in accordance with the laws of the State of New York applicable to agreements made and not to be performed entirely within such state, without regard to conflicts of laws principles.

(b)        The Parties agree irrevocably to submit to the exclusive jurisdiction of the federal courts or, if no federal jurisdiction exists, the state courts, located in the City of New York, Borough of Manhattan, for the purposes of any suit, action or other proceeding brought by any Party arising out of any breach of any of the provisions of this Agreement and hereby waive, and agree not to assert by way of motion, as a defense or otherwise, in any such suit, action, or proceeding, any claim that it is not personally subject to the jurisdiction of the above-named courts, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper, or that the provisions of this Agreement may not be enforced in or by such courts. In addition, the Parties irrevocably waive any right to request a trial by jury in any such actions or controversies and represent that such Party has had the opportunity to consult with counsel specifically with respect to this waiver.

7.6           Benefit of Agreement; Delegation of Duties Prohibited. This Agreement shall inure to the benefit of, and shall be binding upon, the Parties and their respective successors, permitted assigns, heirs, and legal representatives, including any entity with which the Company may merge or consolidate or to which all or substantially all of its assets may be transferred. This Agreement also shall inure to the benefit of the Protected Parties, as well as their respective successors and permitted assigns, including any entity with which any Protected Party may merge or consolidate or to which all or substantially all of its or their assets may be transferred. The duties and covenants of the Employee under this Agreement, being personal, may not be assigned or delegated.

7.7           Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument.

7.8           Headings; Construction. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning of terms contained herein. All references to “Section” or “Sections” refer to the corresponding Section or Sections of this Agreement unless otherwise specified. All words used in this Agreement shall be construed to be of such gender or number as the circumstances require. Unless otherwise expressly provided, the work “including” does not limit the preceding words or terms. Given the full and fair opportunity provided to each Party to consult with their respective counsel with respect to the terms of this Agreement, ambiguities shall not be construed against either Party by virtue of such Party having drafted the subject provision.

7.9           Severability. If any term, provision, covenant or restriction of this Agreement, or any part thereof, is held by a court of competent jurisdiction of any foreign, federal, state, county or local government or any other governmental, regulatory or administrative agency or authority to be invalid, void, unenforceable or against public policy for any reason, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected or impaired or invalidated. The Employee acknowledges that the restrictive covenants contained in Section 6 are a condition of this Agreement and are reasonable and valid in temporal scope and in all other respects.

16

7.10         Judicial Modification. If any court of competent jurisdiction determines that any of the covenants in Section 6, or any part of any of them, is invalid or unenforceable, the remainder of such covenants and parts thereof shall not thereby be affected and shall be given full effect, without regard to the invalid portion. If any court of competent jurisdiction determines that any of such covenants, or any part thereof, is invalid or unenforceable because of the geographic or temporal scope of such provision, such court shall reduce such scope to the minimum extent necessary to make such covenants valid and enforceable.

7.11        Compliance with Law. This Agreement is intended to comply with the requirements of Code Section 409A and the regulations promulgated thereunder. To the extent that any provision in this Agreement is ambiguous as to its compliance with Code Section 409A, the provision shall be read in such a manner so that all payments under Sections 4 and 5 shall comply with Code Section 409A. For purposes of this Agreement, the terms “employment termination,” “termination of employment” and terms of like meaning are intended to constitute a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h)(1). If necessary to comply with Code Section 409A(a)(2)(B) concerning payments to a “specified employee,” any payment on account of the Employee’s separation from service that would otherwise be due hereunder within six (6) months after such separation shall nonetheless be delayed until the first business day of the seventh month following the Employee’s separation from service, or the Employee’s death, if earlier, at which time all delayed payments shall be aggregated and paid in a lump sum. Notwithstanding the foregoing, the Employee shall be responsible for any taxes, interest and penalties imposed on the Employee under or as a result of Code Section 409A in connection with the receipt of payments and benefits under this Agreement.

7.12        Tax Withholding. The Employee authorizes the Company or other payor to withhold from any benefit provided or payment due hereunder, the amount of withholding taxes due any federal, state or local authority in respect of such benefit or payment and to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such withholding taxes.

7.13        Notice of New Employment or Engagement. The Employee shall, during the Non-Compete Period and Non-Solicit Period, give written notice to the Company, within ten (10) calendar days after accepting any employment or other engagement to perform services, of the identity of the individual or entity by whom or which the Employee has been employed or engaged. The Company may notify such individual or entity that the Employee is bound by this Agreement and, at the Company’s election, furnish such individual or entity with a copy or summary of this Agreement (in whole or in part).

7.14         Indemnification. The Company shall indemnify and hold the Employee harmless, to the extent permitted by the Company’s Bylaws (as amended from time to time), against all liability, expense or loss (including reasonable attorneys’ fees and penalties) incurred by the Employee by reason of the fact that the Employee is an officer of the Company acting within the scope of the Employee’s duties and authorities.

7.15        Survival. The provisions of Sections 5, 6, and 7 of this Agreement shall survive the termination of this Agreement and the employment relationship hereunder.

7.16         Recoupment. The Company’s recoupment policies shall apply to all bonuses and awards, if any, payable to the Employee under this Agreement. If the Company restates its financial statements due to material noncompliance with any financial reporting requirements under applicable securities laws, any payments pursuant to this Agreement for or in respect of the year that is restated, may be recovered to the extent the payments made exceed the amount that would have been paid as a result of the restatement. Additionally, without limitation of the foregoing, any amounts paid hereunder shall be subject to recoupment in accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act and any implementing regulations or policies thereunder or as is otherwise required by applicable law or stock exchange listing conditions. Without limitation of the foregoing, all bonuses and other incentives payable under this Agreement will be forfeited by the Employee or recouped in their entirety by the Company if it is determined that (i) the Employee engaged in, or knowingly permitted, intentional misconduct pertaining to any financial reporting requirement under the Federal securities laws resulting in the Company being required to prepare and file an accounting restatement with the Securities and Exchange Commission as a result of such misconduct; or (ii) the Employee engaged in, or knowingly permitted, any fraud, theft, misappropriation, embezzlement or dishonesty to the material detriment of the Company’s financial results as filed with the Securities and Exchange Commission. If triggered, then to the fullest extent permitted by law, the Company may require the Employee to reimburse the Company for, or surrender to the Company, all or a portion of any bonus or other incentive compensation under this Agreement received in cash or shares of Common Stock within the last twelve (12) months, and remit to the Company any profits realized from the sale of Common Stock within the last twelve (12) months.

[Signatures on Following Page]

17

IN WITNESS WHEREOF, the Parties hereto, intending to be legally bound hereby, have executed this Agreement as of the day and year first above mentioned.

EMPLOYEE:

/s/ Nanette Dudek

Nanette Dudek

TOWER AUTOMOTIVE OPERATIONS USA I, LLC

By:	/s/ James C. Gouin
	Name:  James C. Gouin
	Title:  President and CEO

18

EX-10.73

Exhibit 10.73

	17672 N. Laurel Park Drive
	Suite 400 E
	Livonia, MI  48152

February 27, 2018

Mark R. Flynn

17672 Laurel Park Drive N.

Livonia, MI 48152

Re: Amendment to Employment Agreement With Respect to Vesting of LTI Awards

Dear Mark,

Reference is made to the Employment Agreement, dated as of November 7, 2017, between you and Tower Automotive Operations USA I, LLC (the “Employment Agreement”).

This is to confirm that, effective the date hereof, Section 4.6 of the Employment Agreement is hereby amended in its entirety, to read as follows:

“4.6           Accelerated Vesting of Equity and LTI Awards. Notwithstanding anything in the 2010 Plan or any award agreement issued thereunder to the contrary, all then outstanding awards granted to the Employee pursuant to the 2010 Plan, including equity-based awards and performance awards (payable in cash and/or stock) (the “2010 Plan Awards”), shall immediately become fully vested upon the consummation of a Change in Control (as defined below) (assuming, in the case of each performance award, target level performance for the entire performance period (without proration of the amount payable thereto). For purposes of this Agreement, “Change in Control” shall be defined as set forth in Section 2.6 of the 2010 Plan on the Effective Date of this Agreement.”

Except as provided by this letter, the provisions of the Employment Agreement shall remain in full force and effect.

Please acknowledge your agreement with the foregoing by countersigning this letter below and returning it to me.

Regards,

/s/ James C. Gouin

James C. Gouin

Chief Executive Officer

Acknowledged and agreed:

/s/ Mark R. Flynn

Mark R. Flynn

Date: February 27, 2018

EX-10.74

Exhibit 10.74

	17672 N. Laurel Park Drive
	Suite 400 E
	Livonia, MI  48152

February 27, 2018

Nanette Dudek

17672 Laurel Park Drive N.

Livonia, MI 48152

Re: Amendment to Employment Agreement With Respect to Vesting of LTI Awards

Dear Nanette,

Reference is made to the Employment Agreement, dated as of February 1, 2017, between you and Tower Automotive Operations USA I, LLC (the “Employment Agreement”).

This is to confirm that, effective the date hereof, Section 4.6 of the Employment Agreement is hereby amended in its entirety, to read as follows:

“4.6           Accelerated Vesting of Equity and LTI Awards. Notwithstanding anything in the 2010 Plan or any award agreement issued thereunder to the contrary, all then outstanding awards granted to the Employee pursuant to the 2010 Plan, including equity-based awards, performance awards (payable in cash and/or stock) and awards granted prior to the Effective Date (the “2010 Plan Awards”), shall immediately become fully vested upon the consummation of a Change in Control (as defined below) (assuming, in the case of each performance award, target level performance for the entire performance period (without proration of the amount payable thereto). For purposes of this Agreement, “Change in Control” shall be defined as set forth in Section 2.6 of the 2010 Plan on the Effective Date of this Agreement.”

Except as provided by this letter, the provisions of the Employment Agreement shall remain in full force and effect.

Please acknowledge your agreement with the foregoing by countersigning this letter below and returning it to me.

Regards,

/s/ James C. Gouin

James C. Gouin

Chief Executive Officer

Acknowledged and agreed:

/s/ Nanette Dudek

Nanette Dudek

Date: February 27, 2018

EX-21.1

Exhibit 21.1​

Subsidiaries of the Company

Tower International, Inc. had domestic and international subsidiaries shown below as of December 31, 2018. Certain U.S. subsidiaries and international subsidiaries are not named because they were not significant in the aggregate.

Name of Subsidiary	Jurisdiction of Organization	Percentage Owned
U.S. Subsidiaries:	​	​
Tower Automotive Holdings I, LLC	Delaware	100%
Tower Automotive Holdings USA, LLC	Delaware	100%
Tower Automotive Holdings II(a), LLC	Delaware	100%
Tower Automotive Operations USA I, LLC	Delaware	100%
TA Holdings Finance, Inc.	Delaware	100%
International Subsidiaries:	​	​
Tower Automotive do Brasil, Ltda.	Brazil	100%
Herrajes y Acabados Metálicos, S.A. de C.V.	Mexico	100%
Tower Automotive Mexico, S.de R.L. de C.V.	Mexico	100%
Tower Automotive Italy S.r.l.	Italy	100%
Tower Automotive Belgium B.V.B.A.	Belgium	100%
Tower Automotive Czech Republic, s.r.o.	Czech Republic	100%
Tower Automotive Umformtechnik, GmbH	Germany	100%
Tower Automotive Holding GmbH	Germany	100%
Tower Automotive Presswerk Zwickau GmbH	Germany	100%
Tower Automotive Presswork Artern GmbH	Germany	100%
Tower Automotive Duisburg GmbH	Germany	100%
MT Stahl Handelsgesellschaft mbH	Germany	100%
Tower Automotive Polska Sp. zo.o.	Poland	100%
Tower Automotive ASA Holdings B.V.	The Netherlands	100%
Tower Automotive Holdings Asia B.V.	The Netherlands	100%
Tower Automotive Holdings VI B.V.	The Netherlands	100%
Tower Automotive International Holdings B.V.	The Netherlands	100%
Tower Automotive Holdings III Cooperative U.A.	The Netherlands	100%
Tower Automotive Holdings Europe B.V.	The Netherlands	100%
Tower Automotive A.S.	Slovakia	100%
Tower (Shanghai) Automotive Tech Service Co. Ltd.	China	100%
Tower Automotive Japan Co., Ltd.	Japan	100%
Tower Automotive India Private, Ltd.	India	100%
Tower Automotive Far East Holdings Co. Ltd.	Hong Kong	100%

EX-23.1

Exhibit 23.1​

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 333-169950 on Form S-8 of our reports dated February 27, 2019 relating to the consolidated financial statements and financial statement schedule of Tower International, Inc. and subsidiaries (the “Company”), and the effectiveness of the Company’s internal control over financial reporting, appearing in this Annual Report on Form 10-K of Tower International, Inc. for the year ended December 31, 2018.

/s/ DELOITTE & TOUCHE LLP

Detroit, MI
February 27, 2019

EX-31.1

Exhibit 31.1​

CERTIFICATION

I, James C. Gouin, certify that:

1.

I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2018 of Tower International, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 27, 2019

By:

/s/ James C. Gouin

James C. Gouin
Chief Executive Officer

EX-31.2

Exhibit 31.2​

CERTIFICATION

I, Jeffrey L. Kersten, certify that:

1.

I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2018 of Tower International, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 27, 2019

By:

/s/ Jeffrey L. Kersten

Jeffrey L. Kersten
Chief Financial Officer

EX-32.1

Exhibit 32.1​

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350

In connection with the Annual Report on Form 10-K for the year ended December 31, 2018 of Tower International, Inc. (the “Company”) as filed with the Securities and Exchange Commission on the date hereof  (the “Report”), I, James C. Gouin, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

February 27, 2019

/s/ James C. Gouin

James C. Gouin
Chief Executive Officer

EX-32.2

Exhibit 32.2​

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350

In connection with the Annual Report on Form 10-K for the year ended December 31, 2018 of Tower International, Inc. (the “Company”) as filed with the Securities and Exchange Commission on the date hereof  (the “Report”), I, Jeffrey L. Kersten, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

February 27, 2019

/s/ Jeffrey L. Kersten

Jeffrey L. Kersten
Chief Financial Officer

XML

Document And Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2018	Feb. 19, 2019	Jun. 30, 2018
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Entity Registrant Name	Tower International, Inc.
Entity Central Index Key	0001485469
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Trading Symbol	towr
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		20,611,952
Entity Public Float			$ 625,903,277

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
ASSETS
Cash and cash equivalents	$ 68,066	$ 96,313
Accounts receivable, net of allowance of $823 and $556	113,128	123,958
Inventories (Note 3)	69,434	57,495
Assets held for sale (Note 5)	431,613	517,783
Prepaid tooling, notes receivable, and other	27,552	43,986
Total current assets	709,793	839,535
Property, plant, and equipment, net	347,803	323,199
Goodwill (Note 3)	7,453	7,424
Deferred tax asset	82,832	82,077
Other assets, net	22,511	8,638
Total assets	1,170,392	1,260,873
LIABILITIES AND EQUITY
Short-term debt (Note 6)	4,148	4,744
Accounts payable	188,760	213,333
Accrued liabilities	84,306	74,040
Liabilities held for sale (Note 6)	167,882	210,905
Total current liabilities	445,096	503,022
Long-term debt, net of current maturities (Note 6)	294,457	346,011
Pension liability (Note 9)	45,762	47,813
Other non-current liabilities	84,163	94,155
Total non-current liabilities	424,382	487,979
Total liabilities	869,478	991,001
Commitments and contingencies (Note 14)
Tower International, Inc.'s stockholders' equity
Preferred stock, $0.01 par value, 50,000,000 authorized and 0 issued and outstanding
Common stock, $0.01 par value, 350,000,000 authorized, 22,400,074 issued and 20,606,736 outstanding at December 31, 2018, and 22,317,671 issued and 20,542,397 outstanding at December 31, 2017	224	223
Additional paid in capital	347,816	344,153
Treasury stock, at cost, 1,793,338 and 1,775,274 shares as of December 31, 2018 and December 31, 2017	(36,882)	(36,408)
Retained earnings	64,676	29,712
Accumulated other comprehensive loss (Note 3)	(74,920)	(67,808)
Total stockholders' equity	300,914	269,872
Total liabilities and stockholders' equity	$ 1,170,392	$ 1,260,873

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Statement Of Financial Position [Abstract]
Allowance for accounts receivable (in dollars)	$ 823	$ 556
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	350,000,000	350,000,000
Common stock, shares issued	22,400,074	22,317,671
Common stock, shares outstanding	20,606,736	20,542,397
Treasury stock, shares	1,793,338	1,775,274

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract]
Revenues (Note 3)	$ 1,571,853	$ 1,382,474	$ 1,319,046
Cost of sales	1,377,955	1,193,311	1,144,914
Gross profit	193,898	189,163	174,132
Selling, general, and administrative expenses	89,527	87,756	102,058
Amortization expense (Note 3)	435	443	449
Restructuring and asset impairment charges, net (Note 4)	3,380	9,098	20,913
Operating income	100,556	91,866	50,712
Interest expense	19,856	10,882	18,259
Interest income	1,058	1,138	1,097
Net periodic benefit income / (expense)	(2,403)	2,245	(6,324)
Other expense	977	575	4,754
Income before provision for income taxes and income / (loss) from discontinued operations	78,378	83,792	22,472
Provision for income taxes (Note 8)	1,259	44,089	8,768
Income from continuing operations	77,119	39,703	13,704
Income / (loss) from discontinued operations, net of tax (Note 5)	(28,219)	8,032	25,576
Net income	48,900	47,735	39,280
Less: Net income attributable to the noncontrolling interests		110	701
Net income attributable to Tower International, Inc.	$ 48,900	$ 47,625	$ 38,579
Weighted average basic shares outstanding	20,591,674	20,498,668	20,864,321
Weighted average diluted shares outstanding	20,996,068	20,828,888	21,222,183
Basic income per share attributable to Tower International, Inc. (Note 10):
Income per share from continuing operations	$ 3.75	$ 1.93	$ 0.62
Income / (loss) per share from discontinued operations	(1.38)	0.39	1.23
Income per share	2.37	2.32	1.85
Diluted income per share attributable to Tower International, Inc. (Note 10):
Income per share from continuing operations	3.67	1.90	0.61
Income / (loss) per share from discontinued operations	(1.34)	0.39	1.21
Income per share	$ 2.33	$ 2.29	$ 1.82

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME / (LOSS) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract]
Net income	$ 48,900	$ 47,735	$ 39,280
Other comprehensive income / (loss), net of tax
Foreign currency translation adjustments, net of tax expense / (benefit) of $1.8 million, ($10 million), and $2.5 million	(14,784)	19,602	(4,401)
Change in defined benefit plans net of tax expense / (benefit) of ($0.1) million, $0.8 million, and $0.7 million	64	723	1,030
Unrealized gain / (loss) on qualifying cash flow hedge, net of tax expense / (benefit) of $1.3 million, ($2.8 million), and $0 million	3,760	(4,698)
Other comprehensive income / (loss), net of tax, Total	(10,960)	15,627	(3,371)
Comprehensive income	37,940	63,362	35,909
Less: Comprehensive income attributable to noncontrolling interests		162	221
Comprehensive income attributable to Tower International, Inc.	$ 37,940	$ 63,200	$ 35,688

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME / (LOSS) (Parenthetical) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract]
Foreign currency translation adjustment, tax (benefit), increase (decrease)	$ 1.8	$ (10.0)	$ 2.5
Defined benefit plans, tax	(0.1)	0.8	0.7
Unrealized gain / (loss) on qualifying cash flow hedge, tax	$ (1.3)	$ 2.8	$ 0.0

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
OPERATING ACTIVITIES:
Net income	$ 48,900	$ 47,735	$ 39,280
Less: Income / (loss) from discontinued operations, net of tax	(28,219)	8,032	25,576
Income from continuing operations	77,119	39,703	13,704
Adjustments required to reconcile income from continuing operations to net cash provided by continuing operating activities:
Non-cash restructuring and asset impairment charges, net			15,000
Deferred income tax provision	(3,334)	41,702	6,547
Depreciation and amortization	54,815	50,471	47,861
Non-cash share-based compensation	3,413	2,219	2,455
Pension income, net of contributions	(4,270)	(11,512)	(1,999)
Change in working capital and other operating items	(29,496)	4,408	13,608
Net cash provided by continuing operating activities	98,247	126,991	97,176
INVESTING ACTIVITIES:
Cash disbursed for purchases of property, plant, and equipment, net	(83,141)	(67,240)	(72,194)
Proceeds from disposition of China JVs, net	4,314	15,944	4,546
Net proceeds from sale of property, plant, and equipment	14,883
Net cash used in continuing investing activities	(63,944)	(51,296)	(67,648)
FINANCING ACTIVITIES:
Proceeds from borrowings	104,303	485,368	494,442
Repayments of borrowings	(104,508)	(498,553)	(491,849)
Voluntary repayments on Term Loan Credit Facility	(50,000)		(50,000)
Debt financing costs		(4,747)
Original issuance discount		(1,808)
Dividend payment to Tower stockholders	(10,088)	(9,221)	(8,570)
Proceeds from stock options exercised	251	1,313	305
Purchase of treasury stock	(474)	(763)	(19,578)
Net cash used in continuing financing activities	(60,516)	(28,411)	(75,250)
Discontinued operations:
Net cash from discontinued operating activities	74,455	26,645	61,117
Net cash used in discontinued investing activities	(47,587)	(39,504)	(47,678)
Net cash from / (used in) discontinued financing activities	(26,456)	8,649	(11,347)
Net cash from / (used in) discontinued operations	412	(4,210)	2,092
Effect of exchange rate changes on continuing cash and cash equivalents	(2,446)	4,256	(623)
NET CHANGE IN CASH AND CASH EQUIVALENTS	(28,247)	47,330	(44,253)
CASH AND CASH EQUIVALENTS:
Beginning of period	96,313	48,983	93,236
End of period	68,066	96,313	48,983
Supplemental Cash Flow Information:
Interest paid, net of amounts capitalized	20,949	20,553	17,217
Income taxes paid	5,665	2,580	2,255
Non-cash Investing Activities:
Capital expenditures in liabilities for purchases of property, plant, and equipment	$ 19,399	$ 9,746	$ 6,372

XML

CONSOLIDATED STATEMENTS OF EQUITY/(DEFICIT) - USD ($) $ in Thousands	Tower International [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member]	Retained Earnings (Accumulated Deficit) [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Noncontrolling Interest [Member]	Total
Balance at Dec. 31, 2015	$ 197,495	$ 220	$ 337,864	$ (16,067)	$ (44,030)	$ (80,492)	$ 9,224	$ 206,719
Balance (in shares) at Dec. 31, 2015		21,111,610
Net income	38,579				38,579		701	39,280
Other comprehensive income / (loss) before reclassification	(2,891)					(2,891)	(480)	(3,371)
Total comprehensive income/(loss)	35,688						221	35,909
Vesting of RSUs		$ 1	(1)
Vesting of RSUs (in shares)		77,912
Stock options exercised	305		305					$ 305
Stock options exercised (in shares)		25,670						25,670
Treasury stock	(19,578)			(19,578)				$ (19,578)
Treasury stock (in shares)		(856,061)
Share-based compensation expense	2,455		2,455					2,455
Dividend paid	(8,570)				(8,570)			(8,570)
Noncontrolling interest dividends							(3,301)	(3,301)
Balance at Dec. 31, 2016	207,795	$ 221	340,623	(35,645)	(14,021)	(83,383)	6,144	213,939
Balance (in shares) at Dec. 31, 2016		20,359,131
Net income	47,625				47,625		110	47,735
Other comprehensive income / (loss) before reclassification	15,575					15,575	52	15,627
Total comprehensive income/(loss)	63,200						162	63,362
Vesting of RSUs		$ 1	(1)
Vesting of RSUs (in shares)		101,478
Stock options exercised	1,313	$ 1	1,312					$ 1,313
Stock options exercised (in shares)		108,791						108,791
Treasury stock	(763)			(763)				$ (763)
Treasury stock (in shares)		(27,003)
Share-based compensation expense	2,219		2,219					2,219
Dividend paid	(9,221)				(9,221)			(9,221)
Noncontrolling interest sold							$ (6,306)	(6,306)
Cumulative effect of the adoption of ASU No. 2016-09/ASU No. 2017-12	5,329				5,329			5,329
Balance at Dec. 31, 2017	269,872	$ 223	344,153	(36,408)	29,712	(67,808)		$ 269,872
Balance (in shares) at Dec. 31, 2017		20,542,397						22,317,671
Net income	48,900				48,900			$ 48,900
Other comprehensive income / (loss) before reclassification	(10,960)					(10,960)		(10,960)
Total comprehensive income/(loss)	37,940							37,940
Vesting of RSUs		$ 1	(1)
Vesting of RSUs (in shares)		62,225
Stock options exercised	251		251					$ 251
Stock options exercised (in shares)		20,178						20,178
Treasury stock	(474)			(474)				$ (474)
Treasury stock (in shares)		(18,064)
Share-based compensation expense	3,413		3,413					3,413
Dividend paid	(10,088)				(10,088)			(10,088)
Cumulative effect of the adoption of ASU No. 2016-09/ASU No. 2017-12					(3,848)	3,848
Balance at Dec. 31, 2018	$ 300,914	$ 224	$ 347,816	$ (36,882)	$ 64,676	$ (74,920)		$ 300,914
Balance (in shares) at Dec. 31, 2018		20,606,736						22,400,074

XML

Nature of Business

12 Months Ended

Dec. 31, 2018

Nature of Business [Abstract]

Nature of Business

Note 1.  Nature of Business

Tower International, Inc. and its subsidiaries (collectively referred to as the “Company” or “Tower International”), is a leading integrated manufacturer of engineered automotive structural metal components and assemblies, primarily serving original equipment manufacturers (“OEMs”), including Ford, Fiat-Chrysler, Nissan, Toyota, BMW, Volkswagen Group, and Honda. Products include body structures, assemblies and other chassis, structures, and lower vehicle systems and suspension components for small and large cars, crossovers, pickups, and sport utility vehicles. Including both wholly owned subsidiaries and majority owned subsidiaries, the Company has strategically located production facilities in the United States, Mexico, and Brazil, supported by engineering and sales locations in the United States, Brazil, Japan, China, and India.

XML

Basis of Presentation and Organizational History

12 Months Ended

Dec. 31, 2018

Nature of Business [Abstract]

Basis of Presentation and Organizational History

Note 2.  Basis of Presentation and Organizational History

On October 14, 2010, the Company completed its initial public offering (the “IPO”), whereby Tower Automotive, LLC was converted into a Delaware corporation named Tower International, Inc. (the “Corporate Conversion”). Pursuant to the Company’s IPO, the Company’s common stock began trading on the New York Stock Exchange on October 15, 2010.

All references to the Company in these notes for periods prior to the effective date of the Corporate Conversion are to Tower Automotive, LLC and its subsidiaries. All references to the Company in these notes for periods subsequent to the effective date of the Company’s Corporate Conversion are to Tower International, Inc. and its subsidiaries.

The results of the Company’s European operations, along with the Company’s Tower Automotive Company, Ltd. (“Wuhu”) and Tower DIT Automotive Products Co., Ltd. (“Ningbo”) joint ventures in China are presented as discontinued operations in the Company’s Consolidated Financial Statements, in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 205, Discontinued Operations. Refer to Note 5 for additional information regarding the Company’s discontinued operations.

The results of the Company’s Brazilian operations are no longer presented as discontinued operations since these operations are considered held and used in accordance with FASB ASC 360, Property, Plant, & Equipment.

Accounting Pronouncements

Recently Adopted

Revenue Recognition

On May 28, 2014, the FASB issued Accounting Standard Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU outlines a single comprehensive model for entities to utilize to recognize revenue when it transfers goods or services to customers in an amount that reflects the consideration that will be received in exchange for the goods and services. Additional disclosures are also required to enable users to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In 2016, the FASB issued ASU No. 2016-08, ASU No. 2016-10, ASU No. 2016-12, and ASU No. 2016-20, all of which amend the implementation guidance and illustrations in the new revenue standard.

The Company implemented the new standard effective January 1, 2018 using the modified retrospective approach. Implementation of the standard did not have a material impact on the Company’s Consolidated Financial Statements as the Company’s method for recognizing revenue subsequent to the implementation of ASC No. 606 does not vary significantly from its revenue recognition practices under the prior revenue standard. The Company has included the additional disclosures required by the ASUs above (Refer to Note 3).

Retirement Benefits

On March 10, 2017, the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This ASU is designed to increase the transparency and usefulness of information about defined benefit costs for pension plans and other post-retirement benefit plans presented in employer financial statements. Effective October 1, 2006, the Company’s pension plan was frozen and the Company ceased accruing any additional benefits. The Company adopted the new standard effective January 1, 2018 and applied the guidance retrospectively, as required. As a result of adoption, the Company’s net periodic pension cost and net periodic postretirement benefit cost are reported within net periodic benefit income on the Consolidated Statement of Operations. The Company has included the disclosures required by ASU No. 2017-07.

Hedge Accounting

On August 28, 2017, the FASB issued ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities. This ASU is designed to better align hedge accounting with an organization’s risk management activities in the financial statements. In addition, this ASU simplifies the application of hedge accounting guidance in areas where practice issues exist. The Company early adopted this ASU as of January 1, 2018. Upon adoption, the Company recorded a cumulative effect adjustment of $5.1 million and corresponding tax effect adjustment of $1.3 million to Accumulated Other Comprehensive Income (“AOCI”) from accumulated earnings. This adjustment is intended to ensure that the resulting AOCI balance represents the cumulative change in the hedging instruments’ fair value since hedge inception, less any amounts that should have been recognized in earnings under this ASU. Going forward, the earnings effect of the hedged items will be recorded in the same line item in the Consolidated Statements of Operations in which the earnings effect of the hedged item is reported when the hedged item affects earnings.

Goodwill Impairment

On January 26, 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. This ASU simplifies the accounting for goodwill impairments by eliminating step 2 from the goodwill impairment test, and is effective for annual and any interim impairment tests for periods beginning after December 15, 2019. Early adoption of the ASU is allowed for all entities beginning with any goodwill impairment test occurring and performed after January 1, 2017. The Company adopted this standard during 2018 and utilized the standard for its goodwill impairment test that was performed during the fourth quarter of 2018. Refer to Note 3 for results of the testing performed.

Pending Adoption

Leases

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842).This ASU introduces a lessee model that brings most leases on the balance sheet. The new standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize an ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as financing or operating, with balance sheet classification affecting the pattern and classification of expense recognition in the income statement. Subsequent to initial issuance of ASU No. 2016-02, the FASB has issued numerous ASU's that contain targeted improvements to the original standard.

This ASU is effective for annual periods beginning after December 15, 2018, and interim periods within those fiscal years. The Company expects to adopt the new standard on its effective date. The new standard allows for two different transition approaches that are required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the Consolidated Financial Statements. The Company will utilize the transition method that allows entities to initially apply the new lease standard at the adoption date (January 1, 2019) and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company estimates that it will record a cumulative effect adjustment of approximately $6 million.

The new standard also provides certain practical expedients for an entity’s ongoing accounting. The Company does not expect to utilize the package of practical expedients available. However, the Company currently expects to elect the short-term lease recognition exemption for all leases that qualify, which means the Company will not recognize ROU assets or lease liabilities for short-term leases.

The Company expects that this standard will have a material effect on its Consolidated Financial Statements. To assess the impact of the new standard, the Company has reviewed all leasing agreements, reassessed the classification of its leases, evaluated significant contracts for embedded leases, and compared its historical accounting policies and practices to the requirements of the new standard. The Company is currently evaluating whether certain customer contracts contain embedded leases.

Based on the assessments performed thus far, the Company believes that it has certain manufacturing equipment leases currently classified as operating leases that will be classified as finance leases under the new standard. As of December 31, 2018 and 2017, the Company estimates that the ROU asset and liability associated with these leases would be approximately $157 million and $72 million, respectively. This estimate is based upon the present value of the remaining minimum lease payments for equipment that is subject to lease agreements as of December 31, 2018 and 2017.

In addition, the Company has numerous real estate and equipment leases currently classified as operating that the Company believes will continue to be classified as operating under the new standard. The Company estimates that the ROU assets and lease liabilities associated with these leases will be approximately $100 million.

There are certain considerations related to internal control over financial reporting that are associated with implementing the new guidance under ASC No. 842 and the Company is currently implementing the necessary changes to its control framework. Disclosure requirements under the new guidance in ASC No. 842 have been significantly expanded in comparison to the disclosure requirements under the current guidance. The Company is currently concluding its assessment of the new disclosure requirements and is in the process of drafting disclosures for both interim and annual periods in 2019 under ASC No. 842.

Stock Compensation

On June 20, 2018, the FASB issued ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting. This ASU simplifies the accounting for share based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. This ASU is effective for annual and interim periods beginning after December 15, 2018 and early adoption is permitted. The Company does not expect a material financial statement impact related to the adoption of this ASU.

Fair Value Measurement

On August 28, 2018, the FASB issued ASU No. 2018-13, Changes to the Disclosure Requirements for Fair Value Measurement. This ASU modifies the disclosure requirements on fair value measurements. This ASU is effective for annual and interim periods beginning after December 15, 2019 and early adoption is permitted. The Company does not expect a material financial statement impact related to the adoption of this ASU.

Retirement Benefits

On August 28, 2018, the FASB issued ASU No. 2018-14, Changes to the Disclosure Requirements for Defined Benefit Plans. This ASU modifies the disclosure requirements related to defined benefit pension or other postretirement benefit plans. This ASU is effective for annual and interim periods beginning after December 15, 2020 and early adoption is permitted. The Company does not expect a material financial statement impact related to the adoption of this ASU.

XML

Significant Accounting Policies

12 Months Ended

Dec. 31, 2018

Significant Accounting Policies [Abstract]

Significant Accounting Policies

Note 3.  Significant Accounting Policies

Financial Statement Presentation

a. Principles of Consolidation

The Consolidated Financial Statements include the accounts of the Company and all subsidiaries over which the Company exercises control. The Company’s share of earnings or losses of nonconsolidated affiliates are included in the consolidated operating results using the equity method of accounting when the Company is able to exercise significant influence over the operating and financial decisions of the affiliates. All intercompany transactions and balances have been eliminated upon consolidation.

b. Cash and Cash Equivalents

All highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. Cash equivalents are stated at cost, which approximates fair value because of the short maturity of these instruments.

c. Allowance for Doubtful Accounts

The Company maintains an allowance for doubtful accounts receivable, which represents its estimate of losses inherent in trade receivables. The Company provides an allowance for specific customer accounts where collection is doubtful based on historical collection and write-off experience. The Company will also take into consideration unique factors and provide an allowance, if necessary. Bad debt expense is not material for any period presented.

d. Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is determined by the first-in, first-out method. Maintenance, repair, and non-productive inventory, which are considered consumables, are expensed when acquired and included in the Consolidated Statements of Operations as cost of sales. Inventories consist of the following (in thousands):

	December 31, 2018		December 31, 2017
Raw materials	$	29,752	$	23,566
Work in process		13,008		12,914
Finished goods		26,674		21,015
Total inventory	$	69,434	$	57,495

e. Tooling

Tooling represents costs incurred by the Company in the development of new tooling used in the manufacture of the Company’s products. All pre-production tooling costs incurred for tools that the Company will not own and that will be used in producing products supplied under long-term supply agreements are expensed as incurred, unless the supply agreement provides the Company with the noncancellable right to use the tools or the reimbursement of such costs is contractually guaranteed by the customer. Generally, the customer agrees to reimburse the Company for certain of its tooling costs at the time the customer awards a contract to the Company.

When the part for which tooling has been developed reaches a production-ready status, the Company is reimbursed by its customer for the cost of the tooling, at which time the tooling becomes the property of the customer. The Company has certain other tooling costs related to tools the Company has the contractual right to use during the life of the supply arrangement, which are capitalized and amortized over the life of the related product program. Customer-owned tooling is included in the Consolidated Balance Sheets in prepaid tooling, notes receivable, and other, while company-owned and other tooling is included in other assets, net.

The components of capitalized tooling costs are as follows (in thousands):

	December 31, 2018		December 31, 2017
Customer-owned tooling, net	$	14,758	$	33,332
Company-owned tooling		507		277
Total tooling, net	$	15,265	$	33,609

Any gain recognized, which is defined as the excess of reimbursement over cost, is amortized over the life of the program. If estimated costs are expected to be in excess of reimbursement, a loss is recorded in the period in which the loss is estimated.

f. Property, Plant, and Equipment

Property, plant, and equipment are recorded at cost, less accumulated depreciation. Depreciation expense was $54.4 million, $50 million, and $47.4 million for the years ended December 31, 2018,  2017, and 2016, respectively. Depreciation is computed using the straight-line method over the following estimated useful lives of assets:  

Buildings and improvements	32 to 40 years
Machinery and equipment	3 to 20 years

Leasehold improvements are amortized over the shorter of ten years or the remaining lease term at the date of acquisition of the leasehold improvement.  

Costs of maintenance and repairs are charged to expense as incurred and included in cost of sales. Spare parts are considered capital in nature when purchased during the initial investment of a fixed asset. Amounts relating to significant improvements, which extend the useful life or utility of the related asset, are capitalized and depreciated over the remaining life of the asset. Upon disposal or retirement of property, plant, and equipment, the cost and related accumulated depreciation are eliminated from the respective accounts and the resulting gain or loss is recognized in cost of sales in the Consolidated Statements of Operations.

Property, plant, and equipment consist of the following (in thousands): 

	December 31,		December 31,
	2018		2017
Cost:
Land	$	5,329	$	7,383
Buildings and improvements		106,594		118,893
Machinery and equipment		656,084		623,291
Construction in progress		74,490		33,633
Property, plant, and equipment, gross		842,497		783,200
Less: accumulated depreciation		(494,694)		(460,001)
Property, plant, and equipment, net	$	347,803	$	323,199

The Company recorded capitalized interest on its construction in progress of $1.7 million, $3.3 million, and $2.2 million during the years ended December 31, 2018,  2017, and 2016, respectively.

g. Asset Retirement Obligations

FASB ASC No. 410, Asset Retirement and Environmental Obligations, requires the recognition of a liability for the fair value of a conditional asset retirement obligation if the fair value can be reasonably estimated. An asset retirement obligation is a legal obligation to perform certain activities in connection with the retirement, disposal, or abandonment of tangible long-lived assets. The fair value of a conditional asset retirement obligation should be recognized when incurred, generally upon acquisition, construction, or development and through the normal operation of the asset. Uncertainty about the timing or method of settlement of a conditional asset retirement should be factored into the measurement of the liability. The liability is measured at fair value and is adjusted to its present value in subsequent periods. The Company’s asset retirement obligations are primarily associated with renovating, upgrading, and returning leased property to the lessor, in accordance with the requirements of the lease.

Asset retirement obligations are included in other non-current liabilities in the Consolidated Balance Sheets. The following table reconciles the Company’s asset retirement obligations as of December 31, 2018 and 2017 (in thousands):

	December 31,		December 31,
	2018		2017
Beginning balance	$	16,687	$	16,676
Liabilities incurred		1,378		3,698
Accretion expense		1,182		1,338
Liabilities settled		-		-
Change in estimate		(4,751)		(5,025)
Ending balance	$	14,496	$	16,687

The changes in estimate for the years ended December 31, 2018 and 2017 relate primarily to revisions of the expected settlement dates for certain leased facilities.

h. Impairment of Long-Lived Assets

The Company monitors its long-lived assets for impairment on an ongoing basis in accordance with FASB ASC No. 360, Property, Plant, and Equipment. If an impairment indicator exists, the Company will perform the required analysis and record an impairment charge, if necessary. In conducting its impairment analysis, the Company compares the undiscounted cash flows expected to be generated from a long-lived asset to its net book value. If the net book value of an asset exceeds its undiscounted cash flows, an impairment loss is measured and recognized. An impairment loss is measured as the difference between net book value and fair value. Fair value is estimated based upon discounted cash flow analyses using cash flow projections based on recent sales data, and independent automotive production volume estimates, and customer commitments. Changes in economic or operating conditions impacting these estimates and assumptions could result in impairment of long-lived assets. Refer to Note 4 for a discussion regarding impairment charges for the periods presented.

Long-lived assets held for sale are recorded at the lower of their carrying amount or estimated fair value less cost to sell and depreciation is ceased.

i. Goodwill and Other Intangible Assets

Goodwill represents the excess of the cost of an acquisition over the fair value of net assets acquired. Goodwill is not amortized, but it is tested for impairment on, at a minimum, an annual basis. In accordance with FASB ASC No. 350, Intangibles—Goodwill and Other, the Company qualitatively assesses its goodwill assigned to each of its reporting units annually at year-end.This qualitative assessment evaluates various factors, such as macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, and other relevant events, that may impact a reporting unit's fair value. Using this qualitative assessment, the Company determines whether it is more-likely-than-not that the reporting unit's fair value exceeds its carrying value. If it is determined that it is not more-likely-than-not that the reporting unit's fair value exceeds the carrying value, the Company performs a quantitative goodwill impairment analysis by comparing the carrying amount of the reporting unit to its fair value. The Company will also test goodwill for impairment when an event occurs or circumstances change such that it is reasonably possible that impairment may exist.

The evaluation of goodwill for possible impairment includes estimating the fair market value of each of the reporting units which have goodwill associated with their operations using discounted cash flow and multiples of cash earnings valuation techniques, plus valuation comparisons to recent public sale transactions of similar businesses, if any. These valuation methods require the Company to make estimates and assumptions regarding future operating results, cash flows, changes in working capital and capital expenditures, selling prices, profitability, and the cost of capital. Although the Company believes that the estimates and assumptions used were reasonable, actual results could differ from those estimates and assumptions.

The results of the Company’s 2018 and 2017 annual goodwill impairment analysis for its continuing operations indicated that the fair value of the Company’s reporting unit was in excess of carrying value: thus, no impairment existed at December 31, 2018 and 2017.

The change in the carrying amount of goodwill for the Company’s reportable segment is set forth below (in thousands):

Balance at December 31, 2016	$	7,090
Currency translation adjustment		334
Balance at December 31, 2017		7,424
Currency translation adjustment		29
Balance at December 31, 2018	$	7,453

During the fourth quarter of 2018, the Company entered into an agreement to sell its European operations (see Note 5) and recorded a total fair value adjustment of $44 million, of which $36 million was related to an impairment of goodwill. The Company performed a quantitative goodwill impairment analysis that determined the carrying value of the Europe reporting unit was less than its estimated fair value. The Company’s European operations are considered held for sale in accordance with FASB ASC No. 360, Property, Plant, and Equipment, and presented as discontinued operations in the Consolidated Financial Statements, in accordance with FASB ASC No. 205, Discontinued Operations.

The Company recorded a $3.6 million intangible asset during the third quarter of 2015 related to the acquisition of a facility in Mexico. This intangible asset has a definite life and is being amortized on a straight-line basis over seven years, the estimated life of the related asset, which approximates the recognition of related revenues.

The Company incurred amortization expense related to intangible assets of $0.4million, $0.4 million, and $0.4million for the years ended December 31, 2018,  2017, and 2016, respectively.

j. Derivative Financial Instruments

Periodically, the Company uses derivative financial instruments to manage interest rate risk and net investment risk in foreign operations, and to limit exposure of foreign currency fluctuations related to certain intercompany payments. The Company is not a party to leveraged derivatives and does not enter into derivative financial instruments for trading or speculative purposes. Under FASB ASC No. 815, Derivatives and Hedging, all derivatives are recorded at fair value.

The Company formally documents hedge relationships, including the identification of the hedging instruments and the hedged items, as well as the risk management objectives and strategies for undertaking the hedge transaction. To the extent that derivative instruments qualify, and are designated as, cash flow or net investment hedges, the effective portion is recorded as a component of AOCI and the ineffective portion is recorded as interest expense. All hedges are presented in the Consolidated Balance Sheets at fair value as other assets, net or other non-current liabilities with a corresponding offset to AOCI. The Company also formally assesses whether a derivative used in a hedging transaction is highly effective in offsetting changes in either the fair value or cash flows of the hedged item at inception and on a quarterly basis, thereafter. If the Company determines that a derivative ceases to be an effective hedge, it will discontinue hedge accounting.

k. Fair Value of Financial Instruments

FASB ASC No. 820, Fair Value Measurements, 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 (i.e., the exit price). The exit price is based upon the amount that the holder of the asset or liability would receive or need to pay in an actual transaction or in a hypothetical transaction if an actual transaction does not exist at the measurement date. In some circumstances, the entry and exit price may be the same; however, they are conceptually different.

The Company generally determines fair value based upon quoted market prices in active markets for identical assets or liabilities. If quoted market prices are not available, the Company uses valuation techniques that place greater reliance on observable inputs and less reliance on unobservable inputs. In measuring fair value, the Company may make adjustments for risks and uncertainties, if a market participant would include such an adjustment in its pricing.

FASB ASC No. 820 establishes a fair value hierarchy that distinguishes between assumptions based upon market data, referred to as observable inputs, and the Company’s assumptions, referred to as unobservable inputs. Determining where an asset or liability falls within that hierarchy depends on the lowest level input that is significant to the fair value measurement as a whole. An adjustment to the pricing method used within either Level 1 or Level 2 inputs could generate a fair value measurement that effectively falls in a lower level in the hierarchy. The hierarchy consists of three broad levels as follows:

Level 1:Quoted market prices in active markets for identical assets and liabilities;

Level 2:Inputs, other than Level 1 inputs, that are either directly or indirectly observable; and

Level 3:Unobservable inputs developed using estimates and assumptions that reflect those that market participants would use.

At December 31, 2018, the carrying value and estimated fair value of the Company’s total debt was $304.6 million and $290.1 million, respectively. At December 31, 2017, the carrying value and estimated fair value of the Company’s total debt was $358.9 million and $361.5 million, respectively. The majority of the Company’s debt at December 31, 2018 and 2017 was comprised of the Term Loan Credit Facility, which can be traded between financial institutions. Accordingly, this debt has been classified as Level 2. The fair value was determined based upon quoted values. The remainder of the Company’s debt, primarily consisting of foreign subsidiary indebtedness, is asset-backed and is classified as Level 3. As this debt carries variable rates and minimal credit risk, the book values approximate the fair values.

The Company has foreign currency exchange hedges and an interest rate swap that were measured at fair value on a recurring basis at December 31, 2018 and 2017. These instruments are recorded in other assets, net or other non-current liabilities in the Company’s Consolidated Balance Sheets and the fair value is measured using Level 2 observable inputs such as foreign currency exchange rates, swap rates, cross currency basis swap spreads and interest rate spreads. At December 31, 2018, the foreign currency exchange hedge (net investment hedge of the Company’s European subsidiaries) and the interest rate swap had liability fair values of $19.9 million and $5 million respectively. At December 31, 2017, the foreign currency exchange hedge (net investment hedge of our European subsidiaries) and the interest rate swap had liability fair values of $27 million and $8.9 million, respectively.

The following table provides each major category of assets and liabilities measured at fair value on a nonrecurring basis during the year ended December 31, 2018 (in millions):

	Quoted prices in active	Significant other	Significant
	markets for identical	observable	unobservable
	assets	inputs	inputs
	Level 1	Level 2	Level 3		Total gains / (losses)
Long-lived assets held for sale	Not applicable	Not applicable	$	263.7	$	(44.0)

In accordance with FASB ASC No. 360, Property, Plant, & Equipment, the long-lived assets held for sale related to the Company’s European operations, with a carrying amount of $307.7 million were written down to their fair value of $263.7 million, resulting in a loss of $44 million, which was included in the Company’s Consolidated Statements of Operations for the year ended December 31, 2018 as income / (loss) from discontinued operations, net of tax. The fair value of the assets was determined based upon consideration of the negotiated sales price in the sales agreement compared to the carrying value of the European operations. The carrying value also includes the cumulative translation adjustment that will need to be reclassified into earnings.

The following table provides each major category of assets and liabilities measured at fair value on a nonrecurring basis during the year ended December 31, 2017 (in millions):

	Quoted prices in active	Significant other	Significant
	markets for identical	observable	unobservable
	assets	inputs	inputs
	Level 1	Level 2	Level 3		Total gains / (losses)
Long-lived assets held for sale	Not applicable	Not applicable	$	4.3	$	(0.3)

In accordance with FASB ASC No. 360, Property, Plant, & Equipment, the long-lived assets held for sale related to the Ningbo joint venture in China, with a carrying amount of $4.6 million were written down to their fair value of $4.3 million, resulting in a loss of $0.3 million, which was included in the Company’s Consolidated Statements of Operations for the twelve months ended December 31, 2017 as income / (loss) from discontinued operations, net of tax. The fair value of the assets was determined based upon consideration of the negotiated sales price in the sales agreement.

The following table provides each major category of assets and liabilities measured at fair value on a nonrecurring basis during the year ended December 31, 2016 (in millions):

	Quoted prices in active	Significant other	Significant
	markets for identical	observable	unobservable
	assets	inputs	inputs
	Level 1	Level 2	Level 3		Total gains / (losses)
Long-lived assets held for sale	Not applicable	Not applicable	$	4.6	$	(3.1)
Asset impairment	Not applicable	Not applicable		18.6		(15.0)

In accordance with FASB ASC No. 360, Property, Plant, & Equipment, the long-lived assets held for sale related to the Ningbo joint venture in China, with a carrying amount of $7.7 million were written down to their fair value of $4.6 million, resulting in a loss of $3.1 million, which was included in the Company’s Consolidated Statements of Operations for the twelve months ended December 31, 2016 as income / (loss) from discontinued operations, net of tax. The fair value of the assets was determined based upon consideration of the negotiated sales price in the sales agreement.

In accordance with FASB ASC No. 360, Property, Plant, & Equipment, the long-lived assets held for sale related to the Company’s remaining Brazilian operations, with a carrying amount of $33.6 million were written down to their fair value of $18.6 million, resulting in a loss of $15 million, which was included in the Company’s Consolidated Statements of Operations for the twelve months ended December 31, 2016 as income / (loss) from discontinued operations, net of tax. This fair value adjustment of $15 million reflected that upon the sale of the Brazilian operations, the cumulative translation adjustment would be reclassified to earnings. During 2018, the Company reclassified the Brazilian operations as held and used.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate fair value because of the short maturity of these instruments.

l. Revenue Recognition

On January 1, 2018, the Company adopted FASB ASC No. 606, Revenue from Contracts with Customers, using the modified retrospective method as applied to customer contracts that were not completed as of January 1, 2018. As a result, financial information for reporting periods beginning on or after January 1, 2018 are presented in accordance with FASB ASC No. 606, while comparative financial information has not been adjusted and continues to be reported in accordance with the Company’s revenue recognition policies prior to the adoption of FASB ASC No. 606.

The Company enters into contracts with its customers that create enforceable rights and obligations. Each such contract requires the Company to supply products for specific vehicle programs. The Company has determined that each unit produced represents a separate performance obligation. The Company satisfies its performance obligations and recognizes revenue at a point in time when the customer has obtained control of the unit. Determining when control transfers requires management to make judgments that affect the timing of revenue recognized. The Company has determined that control has transferred when its products are shipped to its customers because the Company has a present right to payment at that time, legal title and risk of loss have passed to the customer and the customer is able to direct the use of, and obtain substantially all of the benefits from, the products. Invoices are generated upon shipment to the customer and are based on contractually agreed upon unit prices. The Company has payment terms with its customers that generally require payment within 30 to 60 days of invoice date. FASB ASC No. 606 provides a practical expedient that allows companies to exclude from the transaction price any amounts collected from customers for all sales (and other similar) taxes. We do not include sales and other taxes in our transaction price and thus do not recognize these amounts as revenue.Shipping and handling costs are accounted for as fulfillment costs and are included in cost of sales.

It is common for the Company to negotiate pricing with its customers on an annual basis which can result in price adjustments over the program lives or other variable consideration adjustments. Based on extensive historical experience, the Company has concluded its estimate of variable consideration is not constrained. Therefore the Company accrues for these items using the most likely amount method in accordance with FASB ASC No. 606-10-32 and records adjustments to revenue throughout the year as negotiations progress and are finalized. In certain cases, the Company provides lump sum payments to its customers that are directly related to awarded programs. These payments are expected to be recovered over the life of the associated program; therefore, the Company capitalizes these payments and amortizes them into revenue over the life of the associated program. 

The Company participates in certain of its customers’ steel repurchase programs, under which it purchases steel directly from a customer’s designated steel supplier, for use in manufacturing products for that customer. The Company takes delivery and title to such steel and bears the risk of loss and obsolescence. The Company invoices its customers based upon annually negotiated selling prices, which inherently include a component for steel under such repurchase programs. Under guidance provided in FASB ASC No. 606-10-55, Principal versus Agent Considerations, the Company has risks and rewards of a principal and therefore, for sales transactions in which the Company participates in a customer’s steel resale program, revenue is recognized on a gross basis for the entire amount of the sales, including the component for purchases under that customer’s steel resale program. The purchases through customer resale programs have buffered the impact of price swings associated with the procurement of these metals. The remainder of the Company’s steel and aluminum purchasing requirements are met through contracts with mills, in which the Company negotiates its own price and seeks to pass through price increases and decreases to the Company’s customers. 

The Company enters into agreements to produce products for its customers at the beginning of a given vehicle program’s life. Once such agreements are entered into by the Company, it is obligated to fulfill the customers’ purchasing requirements for the entire production period of the vehicle programs, which range from three to ten years, and generally, the Company has no provisions to terminate such contracts. These contracts may be terminated by the Company’s customers at any time. Historically, terminations of these contracts have been minimal.

Additionally, the Company monitors the aging of uncollected billings and adjusts its accounts receivable allowance on a quarterly basis, as necessary, based upon its evaluation of the probability of collection. The adjustments made by the Company due to the write-off of uncollectible amounts have been immaterial for all periods presented. At December 31, 2018, the Company’s accounts receivable, net of allowances, were $113.1 million and the Company did not have any material unbilled or deferred revenue recorded on the Consolidated Balance Sheet.

For the year ended December 31, 2018, revenue recognized from performance obligations related to prior periods (for example, due to changes in transaction price) was not material.

Revenue expected to be recognized in any future period related to remaining performance obligations, excluding revenue pertaining to contracts that have an original expected duration of one year or less or contracts where revenue is recognized as invoiced, is not material.

The following table summarizes the Company’s customer mix as a percent of revenues for the year ended December 31, 2018:

Customer
Ford	47	%
Fiat - Chrysler	22	%
Nissan	12	%
Toyota	8	%
BMW	5	%
Volkswagen Group	2	%
Honda	2	%
Other	2	%
Total	100	%

The following table summarizes the Company’s vehicle platform mix as a percent of revenues for the year ended December 31, 2018:

Vehicle Platform
SUV	53	%
Pickup	27	%
Van	4	%
MPV	2	%
Light trucks	86	%
Large Car	7	%
Small Car	5	%
All Other	2	%
Total	100	%

Prior to January, 1, 2018, the Company recognized revenue in accordance with FASB ASC No. 605, Revenue Recognition. The Company recognized revenue once the following criteria were met: persuasive evidence of an arrangement existed; delivery had occurred or services had been rendered; the Company’s price to the buyer was fixed or determinable; and collectability was reasonably assured.

m. Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the Consolidated Financial Statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company records net deferred tax assets to the extent it believes that these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. Valuation allowances have been recorded where it has been determined that it is more likely than not that the Company will not be able to realize the net deferred tax assets. Previously established valuation allowances are reversed into income when there is compelling evidence, typically three or more consecutive years of cumulative profit or other positive evidence, that the future tax profitability will be sufficient to utilize the deferred tax asset. Due to the significant judgment involved in determining whether deferred tax assets will be realized, the ultimate resolution of these items may be materially different from the previously estimated outcome.

Changes in tax laws and rates could also affect recorded deferred tax assets and liabilities in the future. The Company recorded a one-time deferred tax expense of $27.2 million in the fourth quarter of 2017 in order to revalue the Company’s U.S. deferred tax assets to the new lower U.S. Federal statutory rate of 21% due to U.S. Tax Reform.

The calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across the Company’s operations.

FASB ASC No. 740, Income Taxes, provides that a tax benefit from an uncertain tax position be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. FASB ASC No. 740 also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company has elected to recognize interest and penalties related to unrecognized tax benefits as income tax expense.

The Company recognizes tax liabilities in accordance with FASB ASC No. 740 and adjusts these liabilities when its judgment changes as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different than the Company’s current estimate of the tax liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which they are determined.

n. Segment Reporting

The Company determines its reportable segments based upon the guidance in FASB ASC No. 280, Segment Reporting. The Company defines its operating segments as components of its business where separate financial information is available. Based on these criteria,  the Company has determined that it has two operating segments, North America and Brazil, which have been aggregated into one reportable segment.

o. Foreign Currency Translation

The functional currency of the Company’s foreign operations is the local currency in which they operate. Assets and liabilities of the Company’s foreign operations are translated into U.S. dollars using the applicable period-end exchange rates. Results of operations are translated at applicable average rates prevailing throughout the period. Gains or losses resulting from foreign currency translation are reported as foreign currency translation adjustments, a separate component of AOCI, in the Consolidated Statements of Comprehensive Income / (Loss). Gains and losses resulting from foreign currency transactions are recognized in net income / (loss) in the Consolidated Statements of Operations and were immaterial for all periods presented.

p. Exit or Disposal Activities

Costs to idle, consolidate, or close facilities and provide postemployment benefits to employees are accrued based on management’s best estimate of the wage and benefit costs that will be incurred. Costs related to idling of employees that is expected to be temporary are expensed as incurred. Costs to terminate a contract without economic benefit to the Company are expensed at the time the contract is terminated. One-time termination benefits that are not subject to contractual arrangements, provided to employees who are involuntarily terminated, are recorded after management commits to a detailed plan of termination, communicates the plan to employees, and when actions required to complete the plan indicate that significant changes are not likely. If employees are required to render services until they are terminated in order to earn termination benefits, the benefits are recognized ratably over the future service period.

q. Share-based Compensation

The Company measures compensation cost arising from the grant of share-based awards to employees at fair value. The Company recognizes such costs in income over the period during which the requisite service is provided. Refer to Note 11 for further discussion regarding share-based compensation.

r. Accumulated Other Comprehensive Income / (Loss)

The following table presents the components of accumulated other comprehensive loss (in thousands):

	As of December 31, 2018		As of December 31, 2017
Foreign currency translation adjustments, net of tax expense of $2.9 million and $0.1 million	$	(36,531)	$	(24,861)
Defined benefit plans, net of tax expense of $14.9 million and $15 million		(38,185)		(38,249)
Unrealized loss on qualifying cash flow hedge,
net of tax (benefit) of ($1.3 million) and ($2.8 million)		(204)		(4,698)
Accumulated other comprehensive loss	$	(74,920)	$	(67,808)

The following table presents the changes in accumulated other comprehensive loss, net of tax, by component for the year ended December 31, 2018 (in thousands):

	Unrealized Losses				Foreign Currency
	on Qualifying		Defined Benefit		Translation
	Cash Flow Hedge		Plans		Adjustments		Total
Balance at December 31, 2017	$	(4,698)	$	(38,249)	$	(24,861)	$	(67,808)
Other comprehensive income / (loss) before reclassification		3,760		64		(14,784)		(10,960)
Amounts reclassified from accumulated other
comprehensive income		734		-		3,114		3,848
Net current-period other comprehensive income / (loss)		4,494		64		(11,670)		(7,112)
Balance at December 31, 2018	$	(204)	$	(38,185)	$	(36,531)	$	(74,920)

The following table presents the changes in accumulated other comprehensive loss, net of tax, by component for the year ended December 31, 2017 (in thousands):

		Unrealized Gains			Foreign Currency
		on Qualifying	Defined Benefit		Translation
		Cash Flow Hedge	Plans		Adjustments		Total
Balance at December 31, 2016	$	-	$	(38,972)	$	(44,411)	$	(83,383)
Other comprehensive income / (loss) before reclassification		(4,698)		723		19,550		15,575
Net current-period other comprehensive income / (loss)		(4,698)		723		19,550		15,575
Balance at December 31, 2017	$	(4,698)	$	(38,249)	$	(24,861)	$	(67,808)

s. Estimates

The preparation of the Company’s financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures related to contingent assets and liabilities at the reporting date and the reported amounts of revenues and expenses during the reporting period. Generally, matters subject to estimation and judgment include amounts related to accounts receivable realization, fair value measurements, pension and other postretirement benefit plan assumptions, restructuring reserves, asset valuation reserves and accruals related to environmental remediation costs, asset retirement obligations, and income taxes. Actual results may differ from those estimates and assumptions and changes in such estimates and assumptions may affect amounts reported in future periods.

XML

Restructuring and Asset Impairment Charges

12 Months Ended

Dec. 31, 2018

Restructuring and Asset Impairment Charges [Abstract]

Restructuring and Asset Impairment Charges

Note 4.  Restructuring and Asset Impairment Charges

As of December 31, 2018, the Company has executed various restructuring plans and may execute additional plans in the future to realign manufacturing capacity to prevailing global automotive production and to improve the utilization of remaining facilities. Estimates of restructuring charges are based on information available at the time such charges are recorded. Due to the inherent uncertainty involved in estimating restructuring expenses, actual amounts paid for such activities may differ from amounts initially recorded. Accordingly, the Company may record revisions of previous estimates by adjusting previously established reserves.

Restructuring Charges

The following table sets forth the Company’s net restructuring and asset impairment charges by type for the periods presented (in thousands):

	Year  Ended December 31,
	2018		2017		2016
Employee termination costs	$	3,059	$	7,862	$	1,335
Other exit costs		321		1,236		4,578
Asset impairments		-		-		15,000
Total restructuring expense	$	3,380	$	9,098	$	20,913

The charges incurred during 2018,  2017, and 2016 primarily related to the following actions:

2018 Actions

During the year ended December 31, 2018, the charges incurred related to severance charges to reduce corporate overhead and ongoing maintenance expense of facilities closed as a result of prior actions. During the second quarter of 2018, the Company amended the lease agreements related to closed facilities. As a result of these amendments, the Company will no longer record material restructuring expense related to the closed facilities.

2017 Actions

During the year ended December 31, 2017, the charges incurred related to severance charges to reduce corporate overhead and ongoing maintenance expense of facilities closed as a result of prior actions.During 2017, the Company took numerous actions to better align the management teams to the remaining footprint of the continuing operations. These actions included a shift in composition of the executive leadership team as well as certain changes within the corporate and regional management teams. All estimated costs related to these actions have been recorded during 2017.

2016 Actions

During the year ended December 31, 2016, the charges incurred related to the buyout of a lease on a previously closed facility, ongoing maintenance expense of facilities closed as a result of prior actions and severance charges to reduce fixed costs. Additionally, the Company recorded a $15 million impairment charge upon classifying Brazilian operations as held for sale. During 2018, the Company reclassified the Brazilian operations as held and used.

Restructuring Reserve

The following table summarizes the activity in the restructuring reserve, which is included in the Consolidated Balance Sheets in accrued liabilities, for the above-mentioned actions through December 31, 2018 (in thousands):

Balance at December 31, 2016	$	197
Payments		(3,989)
Increase in liability		7,862
Balance at December 31, 2017		4,070
Payments		(4,421)
Increase in liability		3,059
Balance at December 31, 2018	$	2,708

Except as disclosed in the table above, the Company does not anticipate incurring additional material cash charges associated with the actions described above. The increase in the restructuring reserve set forth in the table above does not agree with the restructuring charges for the period, as certain items are expensed as incurred related to the actions described.

The restructuring reserve decreased during the year ended December 31, 2018,  reflecting primarily payments related to 2018 restructuring actions and prior accruals, offset partially by accruals for severance. The restructuring reserve increased during the year ended December 31, 2017, reflecting primarily accruals for severance, offset partially by payments related to 2017 restructuring actions and prior accruals.

During the year ended December 31, 2018, the Company incurred payments related to prior accruals of $4.4 million. During the year ended December 31, 2017, the Company incurred payments related to prior accruals of $4 million.

XML

Discontinued Operations and Assets Held for Sale

12 Months Ended

Dec. 31, 2018

Discontinued Operations and Assets Held for Sale [Abstract]

Discontinued Operations and Assets Held for Sale

Note 5.  Discontinued Operations and Assets Held for Sale

The following table discloses select financial information of the discontinued operations of the Company’s European operations and Chinese joint ventures (in thousands):

	Year  Ended December 31,
	2018		2017		2016
Revenues	$	650,294	$	683,487	$	714,381
Loss from sale of discontinued operations		(44,000)		(2,896)		(3,100)
Income / (loss) from discontinued operations:
Income before provision for income taxes		(20,968)		19,769		36,568
Provision for income taxes		7,251		11,737		10,992
Income / (loss) from discontinued operations, net of tax	$	(28,219)	$	8,032	$	25,576

Europe Operations

During the fourth quarter of 2018, the Company’s subsidiaries Tower Automotive Holdings III Cooperatie U.A. and Tower Automotive Holdings USA, LLC entered into a Memorandum of Understanding and Stock Purchase Agreement with Financière SNOP Dunois S.A. (the “Purchaser”). Pursuant to the agreement, the Purchaser will acquire all of the stock of TA Holdings Europe B.V., an indirect wholly owned subsidiary of the Company, and an intercompany loan, for a purchase price of €255 million on a cash free, debt free basis, subject to working capital and other customary adjustments and a reduction to the extent that capital expenditures for the Company’s European operations for calendar year 2018 were less than €45 million. Approval of the transaction is subject to (i) the approval of the European Commission and (ii) the absence of a material breach in any of the seller parties’ fundamental representations (e.g., title, authority and absence of insolvency). On February 13, 2019, the Company obtained the required approvals from the European Commission. During the first quarter of 2019, the Company expects to consummate the transaction and receive the net sale proceeds of approximately $250 million after payment of transaction costs and the repayment of the Company’s cross currency swap. The anticipated purchase price less expected transaction related costs is less than the carrying value as of December 31, 2018; therefore, the Company recorded a fair value adjustment of $44 million during the fourth quarter of 2018. Included in the fair value adjustment is the required recognition of the cumulative translation adjustment that will be reclassified to earnings.

The Company’s European operations are considered held for sale in accordance with FASB ASC No. 360, Property, Plant, and Equipment, and have been presented as discontinued operations in the Company’s Consolidated Financial Statements in accordance with FASB ASC No. 205, Discontinued Operations.  

Brazil Operations

During the fourth quarter of 2018, the Company reclassified its Brazilian operations from held for sale to held and used in accordance with FASB ASC No. 360, Property, Plant, and Equipment. Therefore, the Brazilian operations are no longer presented as discontinued operations.

China Joint Ventures

In October of 2016, the Company entered into an agreement to sell its joint venture in Wuhu, China: Tower Automotive Company, Ltd (“Wuhu”). The sale agreement provided for the purchase of the Company’s equity in the joint venture for approximately $21 million, net of tax. The Company received proceeds of $4.5 million in the fourth quarter of 2016. On May 9, 2017, the Company completed the sale of its equity interest in Wuhu. During the second quarter of 2017, the Company received total net proceeds of $15.9 million related to the sale, which resulted in a total sales price that was less than the carrying value of the net assets of Wuhu. In addition, the Company incurred certain transaction related costs; therefore, a net loss of $2.6 million was recorded in the second quarter of 2017.

Also, in October of 2016, the Company entered into an agreement to sell its joint venture in Ningbo, China: Tower DIT Automotive Products Co., Ltd (“Ningbo”). The sale agreement provided for purchase of the Company’s equity in the joint venture for approximately $4 million, net of tax. The Company completed the sale of Ningbo during the second quarter of 2018 and received proceeds of $4.3 million, net of tax.

Wuhu and Ningbo have been presented as discontinued operations in the Company’s Consolidated Financial Statements, in accordance with FASB ASC No. 205, Discontinued Operations.

The following table summarizes assets and liabilities held for sale by category (in thousands):

	December 31, 2018		December 31, 2017
ASSETS
Current assets	$	175,774	$	222,505
Property, plant, and equipment, net		239,023		226,312
Other assets, net		7,072		16,125
Goodwill		17,744		56,241
Fair value adjustment		(8,000)		(3,400)
Total assets held for sale	$	431,613	$	517,783
LIABILITIES
Short-term debt and current maturities of capital lease obligations	$	14,890	$	38,383
Accounts payable and accrued liabilities		142,638		161,724
Total current liabilities		157,528		200,107
Long-term debt, net of current maturities		-		-
Other non-current liabilities		10,354		10,798
Total non-current liabilities		10,354		10,798
Total liabilities held for sale	$	167,882	$	210,905

XML

Debt

12 Months Ended

Dec. 31, 2018

Debt [Abstract]

Debt

Note 6.  Debt

Debt consists of the following (in thousands):

	December 31, 2018		December 31, 2017
Term Loan Credit Facility (net of discount of $1,653 and $2,288)	$	303,521	$	356,501
Amended Revolving Credit Facility		-		-
Other foreign subsidiary indebtedness		1,044		2,352
Debt issue costs		(5,960)		(8,098)
Total debt		298,605		350,755
Less: Current maturities of debts		(4,148)		(4,744)
Total long-term debt	$	294,457	$	346,011

Future maturities of long-term debt as of December 31, 2018 are as follows (in thousands):

2019	$	4,148
2020		3,894
2021		3,806
2022		3,656
2023		3,615
Thereafter		285,446
Total		304,565
Less: Debt issue costs		(5,960)
Total, net of debt issue costs	$	298,605

Term Loan Credit Facility

On April 23, 2013, the Company entered into a Term Loan and Guaranty Agreement (the “Term Loan Credit Agreement”) by and among Tower Automotive Holdings USA, LLC (the “Term Loan Borrower”), the Company, Tower Automotive Holdings I, LLC (“Term Loan Holdco”), Tower Automotive Holdings II(a), LLC, Tower Automotive Holdings II(b), LLC, the subsidiary guarantors named therein, the Lenders from time to time party thereto and Citibank, N.A., as administrative agent for the Lenders (the credit facility evidenced by the Term Loan Credit Agreement and related documentation, the “Term Loan Credit Facility”).

On January 31, 2014, we amended the Term Loan Credit Agreement by entering into the Second Refinancing Term Loan Amendment and Additional Term Loan Amendment, pursuant to which, among other things, the outstanding term loans under the Term Loan Credit Agreement were refinanced in full, and additional term loans in an aggregate principal amount of approximately $33 million (the “Additional Term Loans”) were disbursed. After giving effect to the disbursement of the Additional Term Loans, there were term loans (the “Term Loans”) in the aggregate principal amount of $450 million outstanding under the Term Loan Credit Agreement.

On March 7, 2017, the Company amended the Term Loan Credit Agreement by entering into the Third Refinancing Term Loan Amendment and Restatement Agreement (“Third Term Loan Amendment”), pursuant to which, among other things, the outstanding term loans under the Term Loan Credit Agreement were refinanced in full. There were no additional borrowings associated with this refinancing. The aggregate principal amount of $358.9 million was outstanding under the Term Loan Credit Agreement upon amendment. The maturity date of the Term Loan Credit Facility is March 7, 2024 and the Term Loans bear interest at (i) the Alternate Base Rate plus a margin of 1.75% or (ii) the Adjusted LIBO Rate (calculated by multiplying the applicable LIBOR rate by a statutory reserve rate) plus a margin of 2.75%.

On December 14, 2018, the Company amended the Third Term Loan Amendment by entering into a Consent and Amendment (the “Term Loan Agreement”), pursuant to which, among other things, substantially simultaneously with the consummation of the sale of the Company’s European operations, the Company shall prepay outstanding Loans (as defined in the Term Loan Agreement) in an aggregate principal amount of $50 million in accordance with the Term Loan Agreement.

The Term Loan Borrower’s obligations under the Term Loan Credit Facility are guaranteed by the Company on an unsecured basis and guaranteed by Term Loan Holdco and certain of the Company's other direct and indirect domestic subsidiaries on a secured basis (the “Subsidiary Guarantors”). The Term Loan Credit Facility is secured by (i) a first priority security interest in certain assets of the Term Loan Borrower and the Subsidiary Guarantors, other than, inter alia, accounts, chattel paper, inventory, cash deposit accounts, securities accounts, machinery, equipment and real property and all contract rights, and records and proceeds relating to the foregoing and (ii) on a second priority basis to all other assets of the Term Loan Borrower and the Subsidiary Guarantor which have been pledged on a first priority basis to the agent for the benefit of the lenders under the Amended Revolving Credit Facility described below.

The Term Loan Credit Agreement includes customary covenants applicable to certain of the Company’s subsidiaries and includes customary events of default and amounts due there under may be accelerated upon the occurrence of an event of default.

On January 15, 2016, the Company made a $50 million voluntary repayment on its Term Loan Credit Facility. In connection with this prepayment, the Company accelerated the amortization of the original issue discount and the associated debt issue costs by $0.7 million.

On July 27, 2018, the Company made a $50 million voluntary repayment on its Term Loan Credit Facility. In connection with this prepayment, the Company accelerated the amortization of the original issue discount and the associated debt issue costs by $1 million.

As of December 31, 2018, the outstanding principal balance of the Term Loan Credit Facility was $303.5 million (net of a remaining $1.7 million original issue discount) and the effective interest rate was 5.19% per annum.

Amended Revolving Credit Facility

On September 17, 2014, the Company entered into a Third Amended and Restated Revolving Credit and Guaranty Agreement (“Third Amended Revolving Credit Facility Agreement”), by and among Tower Automotive Holdings USA, LLC, the Company, Tower Automotive Holdings I, LLC, Tower Automotive Holdings II(a), LLC, Tower Automotive Holdings II(b), LLC, the subsidiary guarantors named therein, the financial institutions from time to time party thereto as Lenders, and JPMorgan Chase Bank, N.A. as Issuing Lender, as Swing Line Lender, and as Administrative Agent for the Lenders. The Third Amended Revolving Credit Facility Agreement amended and restated, in its entirety, the Second Amended Revolving Credit Facility Agreement, dated as of June 19, 2013, by and among Tower Automotive Holdings USA, LLC (“the Borrower”), its domestic affiliate and domestic subsidiary guarantors named therein, and the lenders party thereto, and the Agent. The Third Amended Revolving Credit Facility Agreement provided for a cash flow revolving credit facility (the “Amended Revolving Credit Facility”) in the aggregate amount of up to $200 million. The Third Amended Revolving Credit Facility Agreement also provided for the issuance of letters of credit in an aggregate amount not to exceed $50 million, provided that the total amount of credit (inclusive of revolving loans and letters of credit) extended under the Third Amended Revolving Credit Facility Agreement was subject to an overall cap, on any date, of $200 million.

On March 7, 2017, the Company entered into a Fourth Amended and Restated Revolving Credit and Guaranty Agreement (“Fourth Amended Revolving Credit Facility Agreement”), by and among Tower Automotive Holdings USA, LLC, the Company, Tower Automotive Holdings I, LLC, Tower Automotive Holdings II(a), LLC, the subsidiary guarantors named therein, the financial institutions from time to time party thereto as Lenders, and JPMorgan Chase Bank, N.A. as Issuing Lender, as Swing Line Lender, and as Administrative Agent for the Lenders. The Fourth Amended Revolving Credit Facility Agreement amended and restated, in its entirety, the Third Amended Revolving Credit Facility Agreement, dated as of September 17, 2014, by and among the Borrower, its domestic affiliate and domestic subsidiary guarantors named therein, and the lenders party thereto, and the Agent.

The Fourth Amended Revolving Credit Facility Agreement provides for a cash flow revolving credit facility (the “Amended Revolving Credit Facility”) in the aggregate amount of up to $200 million. The Fourth Amended Revolving Credit Facility Agreement also provides for the issuance of letters of credit in an aggregate amount not to exceed $30 million, provided that the total amount of credit (inclusive of revolving loans and letters of credit) extended under the Fourth Amended Revolving Credit Facility Agreement is subject to an overall cap, on any date, of $200 million. The Company may request the issuance of Letters of Credit denominated in Dollars or Euros. The expiration date for the Amended Revolving Credit Facility is March 7, 2022.

On December 14, 2018, the Company amended the Fourth Amended Revolving Credit Facility Agreement by entering into a Consent and Amendment (the “Revolver Amendment”), pursuant to which, among other things, substantially simultaneously with the consummation of the sale of the Company’s European operations, the expiration date for the Fourth Amended Revolving Credit Facility Agreement will be extended to March 7, 2023.

Advances under the Amended Revolving Credit Facility bear interest at an alternate base rate plus a base rate margin or LIBOR plus a Eurodollar margin. The applicable margins are determined by the Company’s Total Net Leverage Ratio (as defined in the Fourth Amended Revolving Credit Facility Agreement). As of December 31, 2018, the applicable margins were 1% per annum and 2% per annum for base rate and LIBOR based borrowings, respectively. The Company will pay a commitment fee at a rate equal to 0.50% per annum on the average daily unused total revolving credit commitment.

The Amended Revolving Credit Facility is guaranteed by the Company on an unsecured basis and is guaranteed by certain of the Company’s other direct and indirect domestic subsidiaries on a secured basis. The Amended Revolving Credit Facility is secured (i) by a first priority security interest in certain assets of the Borrower and the Subsidiary Guarantors, including accounts, inventory, chattel paper, cash, deposit accounts, securities accounts, machinery, equipment and real property and all contract rights, and records and proceeds relating to the foregoing and (ii) on a second priority basis to all other assets of the Borrower and the Subsidiary Guarantors. The Borrower’s and each Subsidiary Guarantor’s pledge of such assets as security for the obligations under the Amended Revolving Credit Facility is evidenced by a Revolving Credit Security Agreement dated as of March 17, 2017, among the Borrower, the guarantors party thereto, and the Agent.

The Fourth Amended Revolving Credit Facility Agreement contains customary covenants applicable to certain of the Company’s subsidiaries, including financial maintenance covenant ratios requiring the Borrower and the Guarantors to maintain a ratio, as of the last day of any fiscal quarter, of (i) consolidated adjusted EBITDA to consolidated interest charges of not less than 2.75 to 1.00 on a rolling four quarter basis; and (ii) total net debt to consolidated adjusted EBITDA not to exceed 3.50 to 1.00 on a rolling four quarter basis.

As of December 31, 2018,  there was $191.8 million of borrowing availability under the Amended Revolving Credit Facility, of which no borrowings were outstanding and $8.2 million letters of credit were outstanding.

Other Foreign Subsidiary Indebtedness

As of December 31, 2018, other foreign subsidiary indebtedness of $1million consisted of borrowings in Brazil.

The change in foreign subsidiary indebtedness from December 31, 2017 to December 31, 2018 is explained by the following (in thousands):

	Brazil
Balance at December 31, 2017	$	2,352
Maturities of indebtedness		(963)
Change in borrowings on credit facilities, net		-
Foreign exchange impact		(345)
Balance at December 31, 2018	$	1,044

Generally, borrowings of foreign subsidiaries are made under credit agreements with commercial lenders and are used to fund working capital and other operating requirements.

Brazil

As of December 31, 2018, the Company’s Brazilian subsidiary had borrowings of $1 million (R$4.1 million), which have annual interest rates ranging from 5.50% to 8.70% and maturity dates ranging from November 2019 to July 2022. As of December 31, 2018, the weighted average interest rate on the borrowings in Brazil was 7.28% per annum. The loans are provided through bilateral agreements with two local banks and are secured by certain fixed and current assets. Periodic interest and principal payments are required.

Covenants

As of December 31, 2018, the Company was in compliance with all financial covenants that govern its credit agreements.

Debt Issue Costs

The Company had debt issuance costs, net of amortization, of $6 million and $8.1 million as of December 31, 2018 and December 31, 2017, respectively. These amounts are reflected in the Consolidated Balance Sheets as a direct deduction from long-term debt, net of current maturities, rather than as an asset, in accordance with ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs.

The Company incurred interest expense related to the amortization of debt issue costs of $2.1 million, $1.9 million, and $2.5 million for the years ended December 31, 2018,  2017, and 2016, respectively.

XML

Derivative Financial Instruments

12 Months Ended

Dec. 31, 2018

Derivative Financial Instruments[Abstract]

Derivative Financial Instruments

Note 7. Derivative Financial Instruments

The Company’s derivative financial instruments include interest rate and cross currency swaps. The Company does not enter into derivative financial instruments for trading or speculative purposes. On an on-going basis, the Company monitors counterparty credit ratings. The Company considers credit non-performance risk to be low because the Company enters into agreements with commercial institutions that have at least an S&P, or equivalent, investment grade credit rating. On October 17, 2014, the Company entered into a $200 million variable rate to fixed rate interest rate swap for a portion of the Company’s Term Loan and a €157.1 million cross currency swap based on the U.S. dollar / Euro exchange spot rate of $1.2733 which was the prevailing rate at the time of the transaction. The maturity date for both swap instruments was April 16, 2020.  During the year ended December 31, 2015, the Company reduced the notional amount of the interest rate swap from $200 million to $186.1 million and increased the notional amount on the cross currency swap from €157.1 million to €178 million.

On March 7, 2017, the Company amended the variable rate to fixed rate interest rate swap, for a portion of the Company’s Term Loan, entered into on October 17, 2014. The U.S. dollar notional amount remained the same at $186.1 million, the fixed interest rate was changed from 5.09% to 5.628% per annum, and the maturity date was extended from April 16, 2020 to March 7, 2024.

Also on March 7, 2017, the Company amended the cross currency swap, entered into on January 23, 2015, into a new cross currency swap, to hedge its net investment in Europe, based on the U.S. dollar / Euro exchange spot rate of $1.04795. The Euro notional amount remained the same at €178 million, the interest rate was lowered from 3.40% to 2.85%, and the maturity date was extended from April 16, 2020 to March 7, 2024.

Both swaps were amended and restated in conjunction with the March 7, 2017 amendment to the Company’s Term Loan Credit Agreement.

On August 31, 2017, the Company amended certain of its variable rate to fixed rate interest rate swaps, for a portion of the Company’s Term Loan, entered into on March 7, 2017. The U.S. dollar notional amount remained the same at $186.1 million, the fixed interest rate was changed from 5.628% to 5.878% per annum for certain swaps, and the maturity date remained at March 7, 2024. The fair value of the swap will fluctuate with changes in interest rates. This amendment was considered a termination event per FASB ASC No. 815, Derivatives and Hedging; therefore, the balance within AOCI was frozen and is being recognized in results of operations over the remaining term of the hedged transaction. As of December 31, 2018,  $5.8 million was recorded in AOCI and $1.1 million was recognized in interest expense during the year ended December 31, 2018.

At December 31, 2018 (when the U.S. dollar / Euro exchange spot rate was $1.1457) and December 31, 2017 (when the U.S. dollar / Euro exchange spot rate was $1.2009), the following amounts were recorded in the Consolidated Balance Sheets as being receivable from or payable to counterparties under FASB ASC No. 815, Derivatives and Hedging (in thousands):

	Location	December 31, 2018		December 31, 2017
Net investment hedge	Other non-current liabilities	$	19,903	$	27,001
Interest rate swap	Other non-current liabilities		5,034		8,918

All derivative instruments are recorded at fair value. Effectiveness for net investment and cash flow hedges is initially assessed at the inception of the hedging relationship and on a quarterly basis thereafter. To the extent that derivative instruments are deemed to be effective, changes in the fair value of derivatives are recognized in the Consolidated Balance Sheets as AOCI, and to the extent they are ineffective or were not designated as part of a hedge transaction, they are recorded in the Consolidated Statements of Operations as interest expense, net. The cross currency swap qualifies as a net investment hedge of the Company’s European subsidiaries. The interest rate swap qualifies as a cash flow hedge of the interest payments related to the Company’s Term Loan. Prior to March 7, 2017, the Company had not accounted for the interest rate swap as a cash flow hedge, and all changes in fair value were recognized in the Consolidated Statements of Operations as interest expense, net.

The following table presents deferred gains / (losses) reported in AOCI at December 31, 2018 and December 31, 2017, respectively (in thousands):

	Deferred gain / (loss) in AOCI
	Year  Ended December 31,
	2018		2017
Net investment hedge	$	21,099	$	9,849
Interest rate hedge		(1,546)		(7,537)
Total	$	19,553	$	2,312

Derivative instruments held during the period resulted in the following expense recorded in income during the year ended December 31, 2018(in thousands):

	Year  Ended December 31,
	2018
Interest expense	$	19,856
Effect of hedging		(1,563)

XML

Income Taxes

12 Months Ended

Dec. 31, 2018

Income Taxes [Abstract]

Income Taxes

Note 8. Income Taxes

Tax Summary

The Company’s income tax expense, deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect management's best assessments of estimated current and future taxes to be paid. The Company is subject to income taxes in numerous foreign jurisdictions. Significant judgments and estimates are required in determining the consolidated income tax expense.

The summary of income / (loss) before provision for income taxes and noncontrolling interests consisted of the following (in thousands):

	Year  Ended December 31,
	2018		2017		2016
Domestic	$	73,274	$	72,967	$	29,454
Foreign		5,104		10,825		(6,982)
Total	$	78,378	$	83,792	$	22,472

The provision / (benefit) for income taxes consisted of the following (in thousands):

	Year  Ended December 31,
	2018		2017		2016
Current:
Domestic – Federal	$	(461)	$	352	$	152
Domestic – State		2,147		(364)		925
Foreign		2,907		2,399		1,144
Total		4,593		2,387		2,221
Deferred and other:
Domestic – Federal		10,784		40,819		3,912
Domestic – State		1,779		637		807
Foreign		(15,897)		246		1,828
Total		(3,334)		41,702		6,547
Total provision / (benefit) for income taxes	$	1,259	$	44,089	$	8,768

A reconciliation of income tax expense from continuing operations and the U.S. federal statutory income tax expense were as follows (in thousands):

	Year  Ended December 31,
	2018		2017		2016
Taxes at U.S. federal statutory rate	$	16,459	$	29,327	$	7,865
State tax expense		3,112		88		1,297
Foreign tax rate differential		544		(522)		316
Valuation allowance		(11,365)		(1,380)		6,502
Permanent differences		724		(1,340)		235
U.S. Tax Reform - Deferred Tax Asset Revaluation		-		27,163
Increase / (decrease) in uncertain tax positions		(393)		1,236		779
Tax credits		(8,191)		(10,365)		(7,855)
Other		369		(118)		(371)
Total income tax expense / (benefit)	$	1,259	$	44,089	$	8,768

On December 22, 2017, the Tax Cuts and Jobs Act (the “TCJA”) was enacted into federal law. The Company recorded expense of $27.2 million during the fourth quarter of 2017, primarily due to the remeasurement of its net deferred tax assets. The TCJA includes significant changes to the U.S. corporate income tax system. Among other items, the TCJA lowered the corporate income tax rate from 35% to 21% and created a new modified territorial tax system exempting foreign profits from U.S. taxation with some exceptions. It also required a one-time deemed repatriation of accumulated foreign earnings for the year ended December 31, 2017. To determine the amount of the deemed repatriation and any associated repatriation tax, the Company must determine, in addition to other factors, the amount of post-1986 profits or losses of each foreign subsidiary, as well as the amount of foreign income taxes paid on such profits or losses. The Company has filed its 2017 federal income tax return and has determined that no transition tax inclusion is necessary. Based on current law and guidelines issued by the Internal Revenue Service (“IRS”), the Company does not believe that a measurement-period adjustment is required. In 2018, the FASB issued guidance under ASU 2018-02 that permits companies to reclassify stranded tax effects caused by the TCJA from AOCI to retained earnings. The ASU is not required to be adopted and the Company has elected not to adopt this ASU.

Deferred income taxes are primarily provided for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities. The tax effects of each type of temporary difference and carryforward that give rise to a significant portion of deferred tax assets / (liabilities) are summarized as follows (in thousands):

	December 31,		December 31,
	2018		2017
Deferred tax assets are attributable to:
Net operating loss carryforwards and tax credits	$	108,720	$	113,865
Non-deductible reserves and other accruals		26,881		25,323
Accrued pension and postretirement benefit obligations		12,652		13,140
Hedging		6,165		8,976
Capitalized leases		2,375		2,841
Other		1,748		-
Total gross deferred tax assets		158,541		164,145
Less: valuation allowances		(48,712)		(63,300)
Net deferred tax assets	$	109,829	$	100,845
Deferred tax liabilities are attributable to:
Long lived assets	$	(18,394)	$	(6,115)
Prepaid tooling development costs		(3,110)		(7,784)
Prepaid Expense		(5,480)		(1,619)
Deferred cancellation of indebtedness income		-		(2,236)
Other		(13)		(1,014)
Total gross deferred tax liabilities		(26,997)		(18,768)
Net deferred tax asset / (liability)	$	82,832	$	82,077

As of December 31, 2018 and 2017, the valuation allowance recorded was $48.7 million and $63.3 million, respectively. The valuation allowance decreased $14.6 million during 2018 related primarily to a valuation allowance release of $14.4 million due to historical and projected future profitability at the Company’s Brazilian operations. In addition, the Company expensed certain foreign tax credits (“FTCs”) that previously had a valuation allowance recorded against them. The Company continually monitors all available evidence to determine if sufficient future taxable income will be generated to utilize the existing deferred tax assets. The Company also continues to maintain valuation allowances related to certain international jurisdictions and certain state tax credits, which the Company anticipates will expire before they can be utilized.

The Company has U.S. net operating loss (“NOLs”) carryforwards of $52 million that expire during 2030 through 2033 and state NOL carryforwards of $3 million and state credit carryforwards of $24.4 million that expire during the years 2019 to 2036. The Company also has tax credit carryforwards of $46.3 million related to federal research, alternative minimum tax (“AMT”), and foreign tax credits.

As of December 31 2018, the Company’s international subsidiaries have NOL carryforwards of $116.3, of which $87.7 million relate to the Netherlands and begin to expire in 2019. The Company also has $22.1 million of NOL carryforwards in Brazil that do not have an expiration date, but whose utilization is limited to 30% of current year taxable income.

In 2018, the Company received a favorable court ruling regarding the unconstitutionality of calculating Brazilian gross receipt taxes that has the potential to generate significant tax credits for the Company. The Brazilian tax authorities have issued official guidance that significantly limits the potential credits. The Company disagrees with the government’s current guidance and plans to file a claim with the Brazilian government during the first quarter of 2019. Utilization of these tax credits are subject to government approval. Given the significant uncertainty regarding the potential value of these tax credits, the Company has not recorded any benefit during the year ended December 31, 2018 in accordance with FASB ASC 450, Contingencies.

The Company has not made a provision for foreign income or withholding taxes related to investments in foreign subsidiaries that are indefinitely reinvested. Any excess of the amount for financial reporting over the tax basis in these investments is not significant as of December 31, 2018.

Unrecognized Tax Benefits

A reconciliation of the beginning and ending amounts of unrecognized tax benefits are as follows (in thousands):

	Year  Ended December 31,
	2018		2017		2016
Unrecognized tax benefit – January 1	$	4,973	$	3,682	$	2,880
Increase in prior year tax positions		-		247		-
Decrease in prior year tax positions		-		-		(164)
Increase in current year tax positions		188		1,039		1,000
Audit settlements		(638)		-		-
Lapse in statute of limitations		-		-		(25)
Foreign currency translation		1		5		(9)
Liabilities held for sale		-		-		-
Total	$	4,524	$	4,973	$	3,682

Included in the balance of unrecognized tax benefits at December 31, 2018, 2017, and 2016 are $4.5 million, $5 million, and $3.7 million, respectively, of tax benefits that, if recognized, would affect the effective tax rate. These amounts are primarily associated with uncertainty over qualifying research expenses that generate U.S. Federal research credits and U.S. transfer pricing charges to foreign affiliates. Also included in the balance of unrecognized tax benefits at December 31, 2018, 2017, and 2016 are $4.4 million, $4.9 million, and $3.6 million, respectively, of tax benefits that, if recognized, would result in adjustments to other tax accounts, primarily deferred taxes.

The Company recognizes interest and penalties related to tax benefits as income tax expense. The Company does not believe it has any significant exposure related to interest or penalties.

During 2017, the Company completed an IRS audit for the 2015 tax year that did not result in any tax adjustments. During 2015, the Company concluded an IRS audit for the tax years 2011 through 2013. As of December 31, 2018, there are no further IRS audits scheduled. The U.S. statute of limitations is still open for tax years 2008, 2009, 2010, and 2013, to the extent of the losses generated in those years. The statute of limitations is closed for the 2011, 2012, and 2014 tax years. The 2016, 2017, and 2018 tax years remain subject to audit. The Company believes appropriate provisions for all outstanding tax issues have been made for all jurisdictions and all open years.

XML

Employee Benefit Plans

12 Months Ended

Dec. 31, 2018

Employee Benefit Plans [Abstract]

Employee Benefit Plans

Note 9.  Employee Benefit Plans

The Company sponsors a pension and various other postretirement benefit plans for its employees.

Defined Benefit Retirement Plans

The Pension Plan provides benefits for certain current and former U.S. employees. Benefits under the Pension Plan are based on years of service and compensation, as well as other factors. Effective October 1, 2006, the Pension Plan was frozen and the Company ceased accruing any additional benefits. Contributions by the Company are intended to fund benefits that accrued through October 1, 2006.

The Company’s funding policy is to annually contribute amounts to the Pension Plan’s related trust, sufficient to meet the minimum funding requirements of the Employee Retirement Income Security Act of 1974 (“ERISA”) and the Internal Revenue Code of 1986 (the “Code”). The Company expects minimum contribution requirements to the Pension Plan of $5.9 million during 2019. Benefit payments under the Pension Plan are estimated to be $16.7 million, $16.7 million, $16.7 million, $16.7 million, and $16.1 million for the years ending December 31, 2019, 2020, 2021, 2022, and 2023, respectively, for a total of $82.9 million during that five-year period. Aggregate benefit payments under the Pension Plan for the years 2024 through 2028 are estimated to be $74.4 million.

The following table provides a reconciliation of the changes in the fair value of Pension Plan assets and the change in the projected benefit obligation (in thousands):

	Year  Ended		Year  Ended
	December 31,		December 31,
	2018		2017
Reconciliation of fair value of Pension Plan assets:
Fair value of assets, beginning of period	$	201,522	$	186,473
Actual return		(12,070)		28,660
Employer contributions		6,019		8,600
Expenses paid from Pension Plan assets		(3,341)		(3,491)
Benefits paid		(16,953)		(18,720)
Fair value of assets, end of period	$	175,177	$	201,522
Change in projected benefit obligation:
Projected benefit obligation, beginning of period	$	249,335	$	248,100
Service cost		17		19
Interest cost		7,155		7,493
Actuarial (gain) / loss		(18,615)		12,443
Benefits paid		(16,953)		(18,720)
Projected benefit obligation, end of period	$	220,939	$	249,335
Funded status of the Pension Plan	$	(45,762)	$	(47,813)

At December 31, 2018 and 2017, the funded status of the Pension Plan is recorded as other non-current liabilities in the Consolidated Balance Sheets.

At the December 31, 2018 and 2017 measurement dates, the accumulated benefit obligation of the Pension Plan was approximately $221 million and $249 million, respectively.

The following table presents the components of the net periodic pension benefit cost / (income) of the Pension Plan (in thousands):

	Year  Ended December 31,
	2018		2017		2016
Service cost	$	17	$	19	$	21
Interest cost		7,155		7,493		7,708
Expected return on plan assets		(10,562)		(10,329)		(10,316)
Amortization of prior service credit		(95)		(95)		(95)
Actuarial loss		5,234		-		8,330
Net periodic benefit cost / (income)	$	1,749	$	(2,912)	$	5,648

Pre-tax amounts recognized in other comprehensive income / (loss) for the years ended December 31, 2018,  2017, and 2016 consist of the following (in thousands):

	Year  Ended December 31,
	2018		2017		2016
Unrecognized gain / (loss)	$	(2,124)	$	2,398	$	2,091
Amortization of prior service credit		(95)		(95)		(95)
Amount recognized	$	(2,219)	$	2,303	$	1,996

The following table summarizes the amounts included in accumulated other comprehensive loss, net of tax, related to the Pension Plan (in thousands):

	As of December 31,
	2018		2017
Unrecognized loss	$	(24,901)	$	(22,777)
Net prior service credit		1,570		1,665
Deferred tax impact		(13,364)		(13,919)
Accumulated other comprehensive loss	$	(36,695)	$	(35,031)

The significant assumptions used in measuring the Company’s projected benefit obligation at the December 31, 2018 and 2017 measurement dates are as follows:

	Year  Ended December 31,
	2018			2017
Discount rate		4.09	%		3.42	%
Annual rate of increase in compensation		4.5	%		4.5	%

The assumptions used in determining net periodic benefit cost are shown below:

	Year  Ended December 31,
	2018			2017			2016
Discount rate		3.42	%		3.84	%		4.01	%
Expected long-term rate of return on plan assets		7.4	%		7.4	%		7.4	%
Annual rate of increase in compensation		4.5	%		4.5	%		4.5	%

The present value of the Company’s projected benefit obligation is calculated annually with the assistance of third party actuaries. The discount rates used in the calculations are established based upon the results of a yield curve analysis, which calculates a yield to maturity that mirrors the timing and amounts of future benefit payments. The Company utilizes a full yield curve approach in the estimation of these components by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows.

The Company invests the assets of the Pension Plan in a diversified portfolio, which consists of an array of asset classes and attempts to maximize returns while minimizing volatility. The allocation of Pension Plan assets at December 31, 2018 and 2017, as well as the Company’s 2018 target allocations, are as follows:

	Year Ended December 31,
Asset Classes:	2018			2017			2018 Target
Equity securities		43	%		45	%		50	%
Non-equity investments		12	%		12	%		5	%
Fixed income investments		36	%		34	%		40	%
Cash and cash equivalents		1	%		2	%		-	%
Real estate		8	%		7	%		5	%
Total		100	%		100	%		100	%

The expected long-term rate of return on the Pension Plan’s assets assumptions are based upon modeling studies completed with the assistance of the Company’s actuaries and investment consultants. The models take into account inflation, asset class returns, and bond yields for both domestic and foreign markets. These studies, along with the history of returns for the Pension Plan, indicate that expected future returns, weighted by asset allocation, supported an expected long-term asset return assumption of 7.4% for 2018 and 2017.

The Company’s investment goals are to achieve returns in excess of the Pension Plan’s actuarial assumptions, commensurate with the Pension Plan’s risk tolerance; to invest in a prudent manner in accordance with fiduciary requirements of ERISA and to ensure that Pension Plan assets will meet the obligations of the Pension Plan as they come due.

Investment management of the Pension Plan is delegated to a professional investment management firm that must adhere to policy guidelines and objectives. An independent investment consultant is used to measure and report on investment performance, perform asset/liability modeling studies, recommend changes to objectives, guidelines, managers, or asset class structure, and keep the Company informed of current investment trends and issues.

The investment policy, as established by the Company’s Benefit Plans Committee (the “Committee”), allows for effective supervision, monitoring, and evaluating of the investment of the Company’s retirement plan assets. This includes setting forth an investment structure for managing assets and providing guidelines for each portfolio to control the level of overall risk and liquidity. The cash inflows and outflows of the Pension Plan will be deployed in a manner consistent with the above target allocations. If the Committee determines cash flows to be insufficient within the strategic allocation target ranges, the Committee shall decide whether to effect transactions to bring the strategic allocation within the threshold ranges. Pension Plan assets do not include equity securities of the Company.

Based on consideration of the Pension Plan’s projected benefit obligation, the Pension Plan’s ability to tolerate risk is in the moderate range. Asset allocation is consistent with this level of risk, with assets being a mix of equities and fixed income. Equity investments are diversified across U.S. and non-U.S. stocks. Minimum and maximum ranges are established for each asset class to control risk and maximize the effectiveness of the Pension Plan’s asset allocation strategy. Asset allocation is reviewed quarterly and rebalanced if necessary. Specific investment guidelines, restrictions, and investment return objectives exist for each asset class and corresponding investment manager.

Pension Plan assets are recorded at fair value. Fixed income and equity securities may each be combined into commingled fund investments, which are valued to reflect the Company’s interest in the fund, based upon the reported year-end net asset value. The estimated fair values of debt securities held are based upon quoted market prices and/or market data for the same or comparable instruments. Because of the nature of these fixed income securities and commingled fixed income funds, some of these instruments are classified as Level 2 or Level 3 investments within the fair value hierarchy, as defined in Note 3. Fair value estimates for publicly-traded equity securities are based upon quoted market prices and/or other market data for the same or comparable instruments. Collective trusts that hold securities directly are stated at fair value of the underlying securities, as determined by the administrator, based on readily determinable market values and as such, are classified as Level 2 or Level 3 investments. Non-equity investments include investments in hedge funds and are valued based upon their year-end reported net asset values. The funded status of the Pension Plan represents the difference between the Company’s projected benefit obligation and fair value of Pension Plan assets and is presented as pension liability in the Consolidated Balance Sheets.

The following table summarizes the Pension Plan assets measured at fair value as of December 31, 2018 and 2017 (in millions). Refer to Note 3 for definitions of Level 1, 2, and 3 financial instruments within the fair value hierarchy and the methods and assumptions used to estimate the fair value of marketable securities.

	Fair Value Measurements at December 31, 2018
			Quoted Prices in		Significant		Significant
			Active Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
Asset Classes	Total		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents	$	2	$	2	$	-	$	-
Equity securities		75		-		75		-
Mutual funds(a)		21		12		9		-
Corporate bonds		47		-		47		-
Government bonds		15		-		15		-
Real estate investment funds		15		-		-		15
Total	$	175	$	14	$	146	$	15

	Fair Value Measurements at December 31, 2017
			Quoted Prices in		Significant		Significant
			Active Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
Asset Classes	Total		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents	$	3	$	2	$	1	$	-
Equity securities		91		-		91		-
Mutual funds(a)		26		16		10		-
Corporate bonds		51		-		51		-
Government bonds		17		-		17		-
Real estate investment funds		14		-		-		14
Total	$	202	$	18	$	170	$	14

 __________ 

(a)This category consists of mutual fund investments that are focused on fixed income and international equity securities.

For Pension Plan assets with fair value measurements using significant unobservable inputs (Level 3), reconciliations of beginning and ending balances are as follows (in millions):

	Real Estate
	Investment Funds
Balance at December 31, 2016	$	14
Return on plan assets held at the reporting date		-
Purchases		-
Redemptions		-
Balance at December 31, 2017	$	14
Return on plan assets held at the reporting date		1
Purchases		-
Redemptions		-
Balance at December 31, 2018	$	15

Defined Contribution Retirement Plans

The Company sponsors various qualified defined contribution retirement plans. Each plan serves a defined group of employees and has varying levels of Company contributions. The Company’s contributions to certain plans may be required by the terms of the Company’s collective bargaining agreements. During 2018,  2017, and 2016, the Company contributed $6.8 million, $6.2 million, and $5.6 million, respectively, to its defined contribution retirement plans.

Other Postretirement Plans

Life Insurance Plans

As of July 31, 2007, the Company assumed life insurance benefits for certain U.S. retirees and the benefit plans pursuant to which such life insurance benefits are provided. Expected future life insurance benefit payments amount to $0.6 million, $0.6 million, $0.6 million, $1 million, and $1.1 million for the years ending December 31, 2019, 2020, 2021, 2022, and 2023, respectively, for a total of $3.9 million during the five-year period. Aggregate expected benefit payments for the years 2024 through 2028 are $5.3 million.

The following table provides a reconciliation of the changes in the benefit obligation and funded status of the Company’s life insurance plans (in thousands):

	Year  Ended		Year  Ended
	December 31,		December 31,
	2018		2017
Reconciliation of fair value of life insurance plan assets:
Fair value of assets, beginning of period	$	—	$	—
Employer contributions		729		744
Benefits paid		(729)		(744)
Fair value of assets, end of period	$	—	$	—
Change in benefit obligation:
Benefit obligation, beginning of period	$	16,892	$	16,200
Service cost		6		5
Interest cost		516		530
Actuarial loss / (gain)		(2,062)		901
Benefits paid		(729)		(744)
Benefit obligation, end of period	$	14,623	$	16,892
Funded status of life insurance plans	$	(14,623)	$	(16,892)

At December 31, 2018 and 2017, the funded status of the Company’s life insurance plans is recorded as accrued liabilities and other non-current liabilities in the Consolidated Balance Sheets.

The following table provides the components of the net periodic benefit cost of the Company’s life insurance plans for the years ended December 31, 2018,  2017, and 2016 (in thousands):

	Year  Ended		Year  Ended		Year  Ended
	December 31,		December 31,		December 31,
	2018		2017		2016
Service cost	$	6	$	5	$	5
Interest cost		516		530		539
Amortization of prior service credit		132		132		132
Net periodic benefit cost	$	654	$	667	$	676

Pre-tax amounts recognized in other comprehensive income / (loss) at December 31, 2018,  2017, and 2016 consist of the following (in thousands):

	Year  Ended December 31,
	2018		2017		2016
Net actuarial gain / (loss)	$	2,062	$	(901)	$	(393)
Amortization of prior service cost		132		132		132
Amount recognized	$	2,194	$	(769)	$	(261)

The following table summarizes the amounts included in accumulated other comprehensive loss, net of tax, related to the Company’s life insurance plans (in thousands):

	As of December 31,
	2018		2017
Unrecognized gain / (loss)	$	1,388	$	(674)
Net prior service credit		(1,315)		(1,447)
Deferred tax impact		(1,563)		(1,097)
Accumulated other comprehensive loss	$	(1,490)	$	(3,218)

The present value of the Company’s postretirement benefit obligation is calculated annually with the assistance of third party actuaries. The discount rates used in the calculations are established based upon the results of a yield curve analysis, which calculates a yield to maturity that mirrors the timing and amounts of future benefit payments. The discount rate used to measure the Company’s postretirement benefit obligation in 2018 and 2017 was 4.14% and 3.47%, respectively. The discount rates used to determine the net periodic benefit cost was 3.45%,  3.91%, and 4.1% in 2018,  2017, and 2016, respectively. The measurement dates of the Company’s post retirement plans are December 31 of each year.

XML

Earnings per Share ("EPS")

12 Months Ended

Dec. 31, 2018

Earnings per Share ("EPS") [Abstract]

Earnings per Share ("EPS")

Note 10.  Earnings per Share (“EPS”)

Basic earnings / (loss) per share is calculated by dividing the net income / (loss) attributable to Tower International, Inc. by the weighted average number of common shares outstanding.

The share count for diluted earnings / (loss) per share is computed on the basis of the weighted average number of common shares outstanding plus the effects of dilutive common stock equivalents (“CSEs”) outstanding during the period. CSEs, which are securities that may entitle the holder to obtain common stock, include outstanding stock options and restricted stock units. When the average price of the common stock during the period exceeds the exercise price of a stock option, the options are considered potentially dilutive CSEs. When there is a loss from continuing operations, potentially dilutive shares are excluded from the computation of earnings per share, as their effect would be anti-dilutive.

The Company did not exclude any potentially anti-dilutive shares for the years ended December 31, 2018,  2017, and 2016, respectively.

A summary of the information used to compute basic and diluted net income / (loss) per share attributable to Tower International, Inc. is shown below (in thousands – except share and per share amounts): 

	Year  Ended December 31,
	2018		2017		2016
Income from continuing operations	$	77,119	$	39,703	$	13,704
Income / (loss) from discontinued operations, net of tax		(28,219)		8,032		25,576
Net income		48,900		47,735		39,280
Less: Net income attributable to the noncontrolling interests		-		110		701
Net income attributable to Tower International, Inc.	$	48,900	$	47,625	$	38,579
Basic income / (loss) per share:
Continuing operations	$	3.75	$	1.93	$	0.62
Discontinued operations		(1.38)		0.39		1.23
Net income attributable to Tower International, Inc.		2.37		2.32		1.85
Basic weighted average shares outstanding		20,591,674		20,498,668		20,864,321
Diluted income / (loss) per share:
Continuing operations	$	3.67	$	1.90	$	0.61
Discontinued operations		(1.34)		0.39		1.21
Net income attributable to Tower International, Inc.		2.33		2.29		1.82
Diluted weighted average shares outstanding		20,996,068		20,828,888		21,222,183

The following table presents information regarding our quarterly dividends per common share.

Declaration Date		Cash Amount	Record Date	Payment Date
2018
October 18, 2018	$	0.13	November 8, 2018	December 7, 2018
July 17, 2018		0.12	August 9, 2018	September 7, 2018
April 19, 2018		0.12	May 10, 2018	June 8, 2018
January 26, 2018		0.12	February 9, 2018	February 28, 2018
2017
October 20, 2017	$	0.12	November 10, 2017	December 8, 2017
July 21, 2017		0.11	August 10, 2017	September 8, 2017
April 21, 2017		0.11	May 10, 2017	June 9, 2017
January 27, 2017		0.11	February 10, 2017	February 28, 2017
2016
October 21, 2016	$	0.11	November 10, 2016	December 9, 2016
July 22, 2016		0.10	August 10, 2016	September 9, 2016
April 22, 2016		0.10	May 10, 2016	June 10, 2016
January 29, 2016		0.10	February 10, 2016	February 29, 2016

XML

Share-Based and Long-Term Compensation

12 Months Ended

Dec. 31, 2018

Share-Based and Long-Term Compensation [Abstract]

Share-Based and Long-Term Compensation

Note 11.  Share-Based and Long-Term Compensation

Share-Based Compensation

2010 Equity Incentive Plan (“the Plan”)

The Company adopted an equity incentive plan in connection with its 2010 initial public offering that allows for the grant of stock options, restricted stock awards, other equity-based awards, and certain cash-based awards to be made pursuant to the Plan. The eligibility requirements and terms governing the allocation of any common stock and the receipt of other consideration under the Plan are determined by the Board of Directors and/or its Compensation Committee.

On April 25, 2014, the Plan was amended and restated and further amended on December 1, 2016. The number of shares of common stock available for issuance pursuant to new awards under the 2010 Equity Incentive Plan was reduced to 850,000 shares. At December 31, 2018,  585,287 shares were available for future grants of options and other types of awards under the 2010 Equity Incentive Plan. Forfeited shares, in addition to certain other shares, as defined by the Plan, may be re-issued under the Plan up to the maximum amount to be issued.

The following table summarizes the Company’s award activity during the years ended December 31, 2018,  2017, and 2016:

	Options			Restricted Stock Units
		Weighted			Weighted
		Average			Average Grant
Outstanding at:	Shares	Exercise Price		Shares	Date Fair Value
December 31, 2015	500,138	$	12.17	187,498	$	23.59
Granted	-		-	105,468		23.26
Options exercised or RSUs vested	(25,670)		11.90	(77,912)		19.92
Forfeited	-		-	(1,532)		25.26
December 31, 2016	474,468	$	12.18	213,522	$	24.77
Granted	-		-	106,312		28.09
Options exercised or RSUs vested	(108,791)		12.07	(101,478)		24.99
Forfeited	-		-	(5,335)		25.47
December 31, 2017	365,677	$	12.22	213,022	$	26.30
Granted	-		-	242,531		26.35
Options exercised or RSUs vested	(20,178)		12.45	(62,225)		26.32
Forfeited	(4,155)		12.04	(5,281)		26.21
December 31, 2018	341,344	$	12.21	388,047	$	26.33

Stock options

The exercise price of each stock option equals the market price of the Company’s common stock on its grant date. Compensation expense is recorded at the grant date fair value, less an estimated forfeiture amount, and is recognized on a straight-line basis over the applicable vesting periods. The Company’s stock options generally vest over three years, with a maximum term of ten years.

The Company calculates the weighted average grant date fair value of each option granted using a Black-Scholes valuation model. There was zero option expense in the years ended December 31, 2018,  2017 and 2016. As of December 31, 2015, the Company had recognized all of the compensation expense associated with these stock options.

As of December 31, 2018, the Company had an aggregate of 341,344 stock options that had been granted, but had not yet been exercised. As of December 31, 2018, the remaining average contractual life for these options is approximately three years. During the year ended December 31, 2018,  20,178 options were exercised, which had an aggregate intrinsic value of $0.4 million. As of December 31, 2018,  341,344 stock options were exercisable, which had an aggregate intrinsic value of $4 million. During the year ended December 31, 2018,  no stock options were granted and 4,155stock options were forfeited or expired.

Restricted stock units (“RSUs”)

The grant date fair value of each RSU equals the market price of the Company’s common stock on its date of grant. Compensation expense is recorded at the grant date fair value, less an estimated forfeiture amount, and is recognized on a straight-line basis over the applicable vesting periods.

During the years ended December 31, 2018,  2017, and 2016, the Company recognized an expense of $3.4 million, $2.2 million, and $2.5 million, respectively, relating to all of the RSUs granted.As of December 31, 2018, the Company had $4.9 million of unrecognized compensation expense associated with these RSUs, which will be amortized on a straight-line basis over the next 16 months, on a weighted average basis. The Company’s RSUs generally vest over a three year period.

As of December 31, 2018, the Company had an aggregate of 388,047 RSUs that have been granted, but have not yet vested. During the year ended December 31, 2018,  242,531RSUs were granted and 5,281 RSUs were forfeited or expired.

During 2018, a total of 62,225 RSUs vested, resulting in the issuance of 62,225 shares at a fair value of $1.6 million. This total was reduced by shares repurchased to provide payment for certain individuals’ minimum statutory withholding tax. The Company paid $0.5 million to acquire 18,064 vested shares to cover the minimum statutory withholding taxes. After offsets for withholding taxes, a net total of 44,161 shares of common stock were issued.

During 2017, a total of 101,478 RSUs vested, resulting in the issuance of 101,478 shares at a fair value of $2.8 million. This total was reduced by shares repurchased to provide payment for certain individuals’ minimum statutory withholding tax. The Company paid $0.8 million to acquire 27,003 vested shares to cover the minimum statutory withholding taxes. After offsets for withholding taxes, a net total of 74,475 shares of common stock were issued.

During 2016, a total of 77,912 RSUs vested, resulting in the issuance of 77,912 shares at a fair value of $1.8 million. This total was reduced by shares repurchased to provide payment for certain individuals’ minimum statutory withholding tax. The Company paid $0.6 million to acquire 26,413 vested shares to cover the minimum statutory withholding taxes. After offsets for withholding taxes, a net total of 51,499 shares of common stock were issued.

The RSUs held on and after November 10, 2015 earn dividend equivalents at the same rate as dividends paid on common stock. Dividend equivalents are subject to the same vesting conditions as the underlying RSUs and, therefore, are not considered participating securities.

Long-Term Compensation

Amended and Restated CEO Employment Agreement

On July 28, 2014, Mark M. Malcolm, the Company’s former President and Chief Executive Officer, entered into an amended and restated employment agreement (the “Agreement”), by which Mr. Malcolm’s employment was extended through December 31, 2016 (the “Retirement Date”). Mr. Malcolm retired from the Company on the Retirement Date. The Agreement provided for a $3 million transition bonus, for the successful delivery to Tower’s Board of Directors of a comprehensive chief executive officer succession and transition plan, and a $3 million retention bonus. These bonus awards were paid in cash, in the amount of $6.3 million, on July 14, 2017, and fall under the guidance of FASB ASC No. 450, Contingencies. As of December 31, 2017, the Company had no liability remaining relating to these awards.

During the years ended December 31, 2018,  2017, and 2016, the Company recorded expense of zero, $0.3 million, and $1.3 million, respectively, related to these awards.

Performance Award Agreements

Under the provisions of the 2010 Equity Incentive Plan, the Company grants certain awards annually in March pursuant to Performance Award Agreements to approximately 80 executives. These awards are designed to provide the executives with an incentive to participate in the long-term success and growth of the Company. The Performance Award Agreements provide for cash-based awards that vest upon payment. Pursuant to meeting the performance conditions set forth in the Performance Award Agreements, each award will be paid three years after it is granted. These awards are also subject to payment upon a change in control or termination of employment, if certain criteria are met. These awards represent unfunded, unsecured obligations of the Company.

2015 Awards

One half of the awards granted in 2015 were based upon the Company's Adjusted EPS Growth Rate, which is defined as the Company’s cumulative Adjusted EPS for the performance period of the awards, stated in terms of a percentage growth rate. The Company's EPS was adjusted to exclude the effect of unusual, and/or nonrecurring items and then was divided by the number of fiscal years in the specified period, stated in terms of a percentage growth rate. The other half of the awards are based upon the Company's percentile ranking of total shareholder return, compared to a peer group of companies, for the performance period.

Pursuant to meeting the performance conditions set forth in the Performance Award Agreements, the awards granted in 2015 were paid in the first quarter of 2018.

2016 and 2017 Awards

One half of the awards granted in 2016 and 2017 will be based upon the Company’s Adjusted EBIT Growth Rate, which is defined as the Company’s cumulative Adjusted EBIT (earnings before interest and taxes) for the performance period of the awards, stated in terms of a percentage growth rate. The Company's EBIT will be adjusted to exclude the effect of extraordinary, unusual, and/or nonrecurring items and then will be divided by the number of fiscal years in the specified period, stated in terms of a percentage growth rate. The other half of the awards will be based upon the Company's percentile ranking of total shareholder return, compared to a peer group of companies, for the performance period.

2018 Awards

One half of the awards granted in 2018 will be based upon the Company’s Adjusted EBITDA Growth Rate, which is defined as the Company’s cumulative Adjusted EBITDA for the performance period of the awards, stated in terms of a percentage growth rate. The other half of the awards will be based upon the Company's percentile ranking of total shareholder return, compared to a peer group of companies, for the performance period

The performance period of the awards granted in 2016 is January 1, 2016 through December 31, 2018. The performance period of the awards granted in 2017 is January 1, 2017 through December 31, 2019. The performance period of the awards granted in 2018 is January 1, 2018 through December 31, 2020.

During the years ended December 31, 2018,  2017, and 2016, the Company recorded expense related to these awards of $4.4 million, $2.3 million, and $7.4 million, respectively. At December 31, 2018, the Company had a liability of $6.4 million related to these awards. $2.9 million of this liability is payable in March of 2019 and is presented as other current liabilities in the Consolidated Balance Sheets, while the remaining $3.5 million of this liability is presented as other non-current liabilities in the Consolidated Balance Sheets.

XML

Related Party Transactions

12 Months Ended

Dec. 31, 2018

Related Party Transactions [Abstract]

Related Party Transactions

Note 12.  Related Party Transactions

During the year ended December 31, 2017, the Company sold its joint venture in Wuhu, China. Prior to the sale, the Company sold certain products from its Wuhu operations to its joint venture partner, Chery. The sales of these products to Chery were $14.8 million and $70.6 million for the years ended December 31, 2017 and 2016, respectively. The Company’s accounts receivable with Chery at December 31, 2017 was zero.  

XML

Segment Information

12 Months Ended

Dec. 31, 2018

Segment Information [Abstract]

Segment Information

Note 13.  Segment Information

The Company defines its operating segments as components of its business where separate financial information is available. The Company’s operating segments are routinely evaluated by management. The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer.

The Company produces engineered structural metal components and assemblies primarily serving the global automotive industry. The Company’s operations have similar economic characteristics and share fundamental characteristics, including the nature of the products, production processes, margins, customers, and distribution channels. The Company’s products include body structures stampings, chassis structures (including frames), and complex welded assemblies for small and large cars, crossovers, pickups, and SUVs. The Company is comprised of two operating segments: North America and Brazil. These operating segments are aggregated into one reportable segment.

The following is a summary of select data for the Company’s reportable segment (in thousands):

Year  Ended December 31, 2018:
Revenues	$	1,571,853
Net Income		48,900
Capital Expenditures (a)		83,141
Total assets (b)		1,170,392
Year  Ended December 31, 2017:
Revenues	$	1,382,474
Net Income		47,625
Capital Expenditures (a)		67,240
Total assets (b)		1,260,873
Year  Ended December 31, 2016:
Revenues	$	1,319,046
Net Income		38,579
Capital Expenditures (a)		72,194

(a) Capital expenditures represent cash disbursed for purchases of property, plant, and equipment, as presented in the accompanying Consolidated Statements of Cash Flows. 

(b) Total assets as of December 31, 2018 and 2017 include assets held for sale.

Inter-segment sales are not significant for any period presented.

The following is a summary of revenues and long-lived assets by geographic location (in thousands):

	Year Ended and End of Year December 31,
	2018				2017				2016
			Long-Lived				Long-Lived				Long-Lived
	Revenues		Assets		Revenues		Assets		Revenues		Assets
U.S.	$	1,470,772	$	332,086	$	1,273,442	$	305,127	$	1,222,120	$	276,892
Mexico		48,099		6,785		49,755		4,110		52,203		4,223
Brazil		52,982		9,439		59,277		14,239		44,723		15,340
Intercompany eliminations		-		-		-		-		-		-
Total	$	1,571,853	$	348,310	$	1,382,474	$	323,476	$	1,319,046	$	296,455

Revenues are attributed to geographic locations based on the location of specific production. Long-lived assets consist of net property, plant, and equipment and company-owned tooling.

The following is a summary of the approximate composition of the Company’s revenues, by product category (in thousands):

	Year  Ended December 31,
	2018			2017			2016
Body structures and assemblies		47	%		44	%		46	%
Chassis, lower vehicle structures, and suspension components		36	%		34	%		30	%
Complex body-in-white assemblies		17	%		22	%		24	%
Total		100	%		100	%		100	%

The Company sells its products directly to automotive manufacturers. The following table presents a summary of customers that accounted for 10% or more of consolidated revenues in any of the three years ended December 31:

	2018			2017			2016
Ford		47	%		51	%		47	%
Fiat - Chrysler		22	%		18	%		21	%
Nissan		12	%		15	%		12	%

All customers that accounted for 10% or more of consolidated revenues from the table above are customers in the automotive industry; therefore, the Company is subject to a concentration of credit risk.

XML

Commitments and Contingencies

12 Months Ended

Dec. 31, 2018

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Note 14.  Commitments and Contingencies

Leases

The Company leases office space, manufacturing space, and certain equipment under noncancellable lease agreements, which require the Company to pay maintenance, insurance, taxes, and other expenses, in addition to rental payments. The Company has entered into leasing commitments with lease terms expiring between the years 2019 and 2035. The Company has options to extend the terms of certain leases in future periods. The properties covered under these leases include manufacturing and office equipment and facilities. Rent expense for all operating leases totaled $30 million, $18.6 million, and $16.8 million during the years ended December 31, 2018,  2017, and 2016, respectively.

On September 21, 2018, the Company completed the sale of one of its manufacturing facilities for $14.9 million. Simultaneously, the Company entered into a lease for the same facility for continued use in the Company’s ongoing operations.  The lease agreement is for a term of approximately 15 years. The Company recorded a deferred gain of $5.4 million, as the sale price was in excess of the Company’s net book value, which will be recognized over the lease term.

Future minimum operating lease payments at December 31, 2018 are as follows (in thousands):

	Operating
Year	Leases
2019	$	42,261
2020		49,615
2021		47,385
2022		45,831
2023		43,139
Thereafter		111,947
Total future lease payments	$	340,178

Purchase Commitments

As of December 31, 2018, the Company was obligated under executory purchase orders for approximately $54.7million of tooling, $51.4million of capital expenditures, and $6.8 million of other expenditures.

Environmental Matters

The Company owns properties which have been affected by environmental releases. The Company is actively involved in investigation and/or remediation at several of these locations.

Accruals for environmental matters are recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated. The established liability for environmental matters is based upon management’s best estimates, on an undiscounted basis, of expected investigation/ remediation costs related to environmental contamination. It is possible that actual costs associated with these matters will exceed the environmental reserves established by the Company. Inherent uncertainties exist in the estimates, primarily due to unknown environmental conditions, changing governmental regulations, and legal standards regarding liability and evolving technologies for handling site remediation and restoration. At December 31, 2018 and 2017, the Company had approximately $1.3 million and $1.3 million, respectively, accrued for environmental matters.

Contingent Matters

The Company will establish an accrual for matters in which losses are probable and can be reasonably estimated. These types of matters may involve additional claims that, if granted, could require the Company to pay penalties or make other expenditures in amounts that will not be estimable at the time of discovery of the matter. In these cases, a liability will be recorded at the low end of the range if no amount within the range is a better estimate in accordance with FASB ASC No. 450, Accounting for Contingencies.

Litigation

The Company is subject to various legal actions and claims incidental to its business, including potential lawsuits with customers or suppliers. Litigation is subject to many uncertainties and the outcome of individual litigated matters is not probable or estimable. After discussions with counsel litigating these matters, it is the opinion of management that the outcome of such matters will not have a material impact on the Company’s financial position, results of operations, or cash flows.

XML

Change in Working Capital and Other Operating Items

12 Months Ended

Dec. 31, 2018

Change in Working Capital and Other Operating Items Abstract]

Change in Working Capital and Other Operating Items

Note 15.  Change in Working Capital and Other Operating Items

The following table summarizes the sources / (uses) of cash provided by changes in working capital and other operating items for continuing operations (in thousands):

	Year  Ended December 31,
	2018		2017		2016
Accounts receivable	$	10,830	$	(21,357)	$	32,950
Inventories		(11,939)		(3,808)		(4,067)
Prepaid tooling and other current assets		16,435		20,729		(17,868)
Accounts payable and accrued liabilities		(23,960)		24,780		14,590
Other assets and liabilities		(20,862)		(15,936)		(11,997)
Change in working capital and other operating items	$	(29,496)	$	4,408	$	13,608

XML

Quarterly Financial Data

12 Months Ended

Dec. 31, 2018

Quarterly Financial Data [Abstract]

Quarterly Financial Data

Note 16.  Quarterly Financial Data (Unaudited)

The following table summarizes select quarterly financial data (in thousands):

							Net Income/(Loss)		Diluted
							Attributable		Earnings/
					Net Income/		to Tower		(Loss) per
Quarter	Net Sales		Gross Profit		(Loss)		International, Inc.		Share
2018
1st	$	407,233	$	48,184	$	17,300	$	17,300	$	0.83
2nd		395,929		50,822		22,376		22,376		1.07
3rd		391,421		52,166		22,580		22,580		1.07
4th(a)		377,270		42,726		(13,356)		(13,356)		(0.64)
Full Year	$	1,571,853	$	193,898	$	48,900	$	48,900		2.33
2017
1st	$	352,450	$	42,715	$	17,413	$	17,345	$	0.83
2nd		344,821		48,130		19,258		19,216		0.92
3rd(b)		330,397		47,179		14,931		14,931		0.72
4th(c)		354,806		51,139		(3,867)		(3,867)		(0.19)
Full Year	$	1,382,474	$	189,163	$	47,735	$	47,625		2.29

(a) During the fourth quarter of 2018, net income included a fair value impairment charge in discontinued operations of $44 million and a deferred tax benefit of $14.4 million to release the valuation allowance in Brazil.

(b) During the third quarter of 2017, net income included a $2.4 million deferred tax expense to establish a valuation allowance on certain European deferred tax assets.

(c) During the fourth quarter of 2017, net income included a deferred tax expense of $27.2 million related to the revaluation of U.S. deferred tax assets due to a reduction in the federal income tax rate as a result of U.S. Tax Reform.

XML

Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2018

Valuation and Qualifying Accounts [Abstract]

Valuation and Qualifying Accounts

(2) Financial Statement Schedules:

(a) Schedule II:

SCHEDULE II

Valuation and Qualifying Accounts for the years ended December 31, 2018,  2017, and 2016 (in thousands)

Column A	Column B		Column C				Column D			Column E
			Additions
	Balance at		Charged to		Charged to					Balance at
	Beginning of		Costs and		Other					End of
Description	Year		Expenses		Accounts		Deductions			Year
Year  Ended December 31, 2018
Allowance for doubtful accounts	$	556	$	278	$	-	$	(11)	(a)	$	823
Deferred tax asset valuation allowance		63,300		(11,367)		(3,221)		-			48,712
Year  Ended December 31, 2017
Allowance for doubtful accounts	$	602	$	(29)	$	-	$	(17)	(a)	$	556
Deferred tax asset valuation allowance		58,985		(1,380)		5,695		-			63,300
Year  Ended December 31, 2016
Allowance for doubtful accounts	$	437	$	181	$	-	$	(16)	(a)	$	602
Deferred tax asset valuation allowance		46,289		6,502		6,194		-			58,985

_______________

(a) Write off of uncollectible accounts and collections of past due accounts.

All other schedules are omitted because they are inapplicable or not required or the information is included in the Company's Consolidated Financial Statements or the notes thereto.

XML

Significant Accounting Policies (Policy)

12 Months Ended

Dec. 31, 2018

Significant Accounting Policies [Abstract]

Principles of Consolidation

a. Principles of Consolidation

The Consolidated Financial Statements include the accounts of the Company and all subsidiaries over which the Company exercises control. The Company’s share of earnings or losses of nonconsolidated affiliates are included in the consolidated operating results using the equity method of accounting when the Company is able to exercise significant influence over the operating and financial decisions of the affiliates. All intercompany transactions and balances have been eliminated upon consolidation.

Cash and Cash Equivalents

b. Cash and Cash Equivalents

All highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. Cash equivalents are stated at cost, which approximates fair value because of the short maturity of these instruments.

Allowance for Doubtful Accounts

c. Allowance for Doubtful Accounts

The Company maintains an allowance for doubtful accounts receivable, which represents its estimate of losses inherent in trade receivables. The Company provides an allowance for specific customer accounts where collection is doubtful based on historical collection and write-off experience. The Company will also take into consideration unique factors and provide an allowance, if necessary. Bad debt expense is not material for any period presented.

Inventories

d. Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is determined by the first-in, first-out method. Maintenance, repair, and non-productive inventory, which are considered consumables, are expensed when acquired and included in the Consolidated Statements of Operations as cost of sales. Inventories consist of the following (in thousands):

	December 31, 2018		December 31, 2017
Raw materials	$	29,752	$	23,566
Work in process		13,008		12,914
Finished goods		26,674		21,015
Total inventory	$	69,434	$	57,495

Tooling

e. Tooling

Tooling represents costs incurred by the Company in the development of new tooling used in the manufacture of the Company’s products. All pre-production tooling costs incurred for tools that the Company will not own and that will be used in producing products supplied under long-term supply agreements are expensed as incurred, unless the supply agreement provides the Company with the noncancellable right to use the tools or the reimbursement of such costs is contractually guaranteed by the customer. Generally, the customer agrees to reimburse the Company for certain of its tooling costs at the time the customer awards a contract to the Company.

When the part for which tooling has been developed reaches a production-ready status, the Company is reimbursed by its customer for the cost of the tooling, at which time the tooling becomes the property of the customer. The Company has certain other tooling costs related to tools the Company has the contractual right to use during the life of the supply arrangement, which are capitalized and amortized over the life of the related product program. Customer-owned tooling is included in the Consolidated Balance Sheets in prepaid tooling, notes receivable, and other, while company-owned and other tooling is included in other assets, net.

The components of capitalized tooling costs are as follows (in thousands):

	December 31, 2018		December 31, 2017
Customer-owned tooling, net	$	14,758	$	33,332
Company-owned tooling		507		277
Total tooling, net	$	15,265	$	33,609

Any gain recognized, which is defined as the excess of reimbursement over cost, is amortized over the life of the program. If estimated costs are expected to be in excess of reimbursement, a loss is recorded in the period in which the loss is estimated.

Property, Plant, and Equipment

f. Property, Plant, and Equipment

Property, plant, and equipment are recorded at cost, less accumulated depreciation. Depreciation expense was $54.4 million, $50 million, and $47.4 million for the years ended December 31, 2018,  2017, and 2016, respectively. Depreciation is computed using the straight-line method over the following estimated useful lives of assets:  

Buildings and improvements	32 to 40 years
Machinery and equipment	3 to 20 years

Leasehold improvements are amortized over the shorter of ten years or the remaining lease term at the date of acquisition of the leasehold improvement.  

Costs of maintenance and repairs are charged to expense as incurred and included in cost of sales. Spare parts are considered capital in nature when purchased during the initial investment of a fixed asset. Amounts relating to significant improvements, which extend the useful life or utility of the related asset, are capitalized and depreciated over the remaining life of the asset. Upon disposal or retirement of property, plant, and equipment, the cost and related accumulated depreciation are eliminated from the respective accounts and the resulting gain or loss is recognized in cost of sales in the Consolidated Statements of Operations.

Property, plant, and equipment consist of the following (in thousands): 

	December 31,		December 31,
	2018		2017
Cost:
Land	$	5,329	$	7,383
Buildings and improvements		106,594		118,893
Machinery and equipment		656,084		623,291
Construction in progress		74,490		33,633
Property, plant, and equipment, gross		842,497		783,200
Less: accumulated depreciation		(494,694)		(460,001)
Property, plant, and equipment, net	$	347,803	$	323,199

The Company recorded capitalized interest on its construction in progress of $1.7 million, $3.3 million, and $2.2 million during the years ended December 31, 2018,  2017, and 2016, respectively.

Asset Retirement Obligations

g. Asset Retirement Obligations

FASB ASC No. 410, Asset Retirement and Environmental Obligations, requires the recognition of a liability for the fair value of a conditional asset retirement obligation if the fair value can be reasonably estimated. An asset retirement obligation is a legal obligation to perform certain activities in connection with the retirement, disposal, or abandonment of tangible long-lived assets. The fair value of a conditional asset retirement obligation should be recognized when incurred, generally upon acquisition, construction, or development and through the normal operation of the asset. Uncertainty about the timing or method of settlement of a conditional asset retirement should be factored into the measurement of the liability. The liability is measured at fair value and is adjusted to its present value in subsequent periods. The Company’s asset retirement obligations are primarily associated with renovating, upgrading, and returning leased property to the lessor, in accordance with the requirements of the lease.

Asset retirement obligations are included in other non-current liabilities in the Consolidated Balance Sheets. The following table reconciles the Company’s asset retirement obligations as of December 31, 2018 and 2017 (in thousands):

	December 31,		December 31,
	2018		2017
Beginning balance	$	16,687	$	16,676
Liabilities incurred		1,378		3,698
Accretion expense		1,182		1,338
Liabilities settled		-		-
Change in estimate		(4,751)		(5,025)
Ending balance	$	14,496	$	16,687

The changes in estimate for the years ended December 31, 2018 and 2017 relate primarily to revisions of the expected settlement dates for certain leased facilities.

Impairment of Long-Lived Assets

h. Impairment of Long-Lived Assets

The Company monitors its long-lived assets for impairment on an ongoing basis in accordance with FASB ASC No. 360, Property, Plant, and Equipment. If an impairment indicator exists, the Company will perform the required analysis and record an impairment charge, if necessary. In conducting its impairment analysis, the Company compares the undiscounted cash flows expected to be generated from a long-lived asset to its net book value. If the net book value of an asset exceeds its undiscounted cash flows, an impairment loss is measured and recognized. An impairment loss is measured as the difference between net book value and fair value. Fair value is estimated based upon discounted cash flow analyses using cash flow projections based on recent sales data, and independent automotive production volume estimates, and customer commitments. Changes in economic or operating conditions impacting these estimates and assumptions could result in impairment of long-lived assets. Refer to Note 4 for a discussion regarding impairment charges for the periods presented.

Long-lived assets held for sale are recorded at the lower of their carrying amount or estimated fair value less cost to sell and depreciation is ceased.

Goodwill and Other Intangible Assets

i. Goodwill and Other Intangible Assets

Goodwill represents the excess of the cost of an acquisition over the fair value of net assets acquired. Goodwill is not amortized, but it is tested for impairment on, at a minimum, an annual basis. In accordance with FASB ASC No. 350, Intangibles—Goodwill and Other, the Company qualitatively assesses its goodwill assigned to each of its reporting units annually at year-end.This qualitative assessment evaluates various factors, such as macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, and other relevant events, that may impact a reporting unit's fair value. Using this qualitative assessment, the Company determines whether it is more-likely-than-not that the reporting unit's fair value exceeds its carrying value. If it is determined that it is not more-likely-than-not that the reporting unit's fair value exceeds the carrying value, the Company performs a quantitative goodwill impairment analysis by comparing the carrying amount of the reporting unit to its fair value. The Company will also test goodwill for impairment when an event occurs or circumstances change such that it is reasonably possible that impairment may exist.

The evaluation of goodwill for possible impairment includes estimating the fair market value of each of the reporting units which have goodwill associated with their operations using discounted cash flow and multiples of cash earnings valuation techniques, plus valuation comparisons to recent public sale transactions of similar businesses, if any. These valuation methods require the Company to make estimates and assumptions regarding future operating results, cash flows, changes in working capital and capital expenditures, selling prices, profitability, and the cost of capital. Although the Company believes that the estimates and assumptions used were reasonable, actual results could differ from those estimates and assumptions.

The results of the Company’s 2018 and 2017 annual goodwill impairment analysis for its continuing operations indicated that the fair value of the Company’s reporting unit was in excess of carrying value: thus, no impairment existed at December 31, 2018 and 2017.

The change in the carrying amount of goodwill for the Company’s reportable segment is set forth below (in thousands):

Balance at December 31, 2016	$	7,090
Currency translation adjustment		334
Balance at December 31, 2017		7,424
Currency translation adjustment		29
Balance at December 31, 2018	$	7,453

During the fourth quarter of 2018, the Company entered into an agreement to sell its European operations (see Note 5) and recorded a total fair value adjustment of $44 million, of which $36 million was related to an impairment of goodwill. The Company performed a quantitative goodwill impairment analysis that determined the carrying value of the Europe reporting unit was less than its estimated fair value. The Company’s European operations are considered held for sale in accordance with FASB ASC No. 360, Property, Plant, and Equipment, and presented as discontinued operations in the Consolidated Financial Statements, in accordance with FASB ASC No. 205, Discontinued Operations.

The Company recorded a $3.6 million intangible asset during the third quarter of 2015 related to the acquisition of a facility in Mexico. This intangible asset has a definite life and is being amortized on a straight-line basis over seven years, the estimated life of the related asset, which approximates the recognition of related revenues.

The Company incurred amortization expense related to intangible assets of $0.4million, $0.4 million, and $0.4million for the years ended December 31, 2018,  2017, and 2016, respectively.

Derivative Financial Instruments

j. Derivative Financial Instruments

Periodically, the Company uses derivative financial instruments to manage interest rate risk and net investment risk in foreign operations, and to limit exposure of foreign currency fluctuations related to certain intercompany payments. The Company is not a party to leveraged derivatives and does not enter into derivative financial instruments for trading or speculative purposes. Under FASB ASC No. 815, Derivatives and Hedging, all derivatives are recorded at fair value.

The Company formally documents hedge relationships, including the identification of the hedging instruments and the hedged items, as well as the risk management objectives and strategies for undertaking the hedge transaction. To the extent that derivative instruments qualify, and are designated as, cash flow or net investment hedges, the effective portion is recorded as a component of AOCI and the ineffective portion is recorded as interest expense. All hedges are presented in the Consolidated Balance Sheets at fair value as other assets, net or other non-current liabilities with a corresponding offset to AOCI. The Company also formally assesses whether a derivative used in a hedging transaction is highly effective in offsetting changes in either the fair value or cash flows of the hedged item at inception and on a quarterly basis, thereafter. If the Company determines that a derivative ceases to be an effective hedge, it will discontinue hedge accounting.

Fair Value of Financial Instruments

k. Fair Value of Financial Instruments

FASB ASC No. 820, Fair Value Measurements, 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 (i.e., the exit price). The exit price is based upon the amount that the holder of the asset or liability would receive or need to pay in an actual transaction or in a hypothetical transaction if an actual transaction does not exist at the measurement date. In some circumstances, the entry and exit price may be the same; however, they are conceptually different.

The Company generally determines fair value based upon quoted market prices in active markets for identical assets or liabilities. If quoted market prices are not available, the Company uses valuation techniques that place greater reliance on observable inputs and less reliance on unobservable inputs. In measuring fair value, the Company may make adjustments for risks and uncertainties, if a market participant would include such an adjustment in its pricing.

FASB ASC No. 820 establishes a fair value hierarchy that distinguishes between assumptions based upon market data, referred to as observable inputs, and the Company’s assumptions, referred to as unobservable inputs. Determining where an asset or liability falls within that hierarchy depends on the lowest level input that is significant to the fair value measurement as a whole. An adjustment to the pricing method used within either Level 1 or Level 2 inputs could generate a fair value measurement that effectively falls in a lower level in the hierarchy. The hierarchy consists of three broad levels as follows:

Level 1:Quoted market prices in active markets for identical assets and liabilities;

Level 2:Inputs, other than Level 1 inputs, that are either directly or indirectly observable; and

Level 3:Unobservable inputs developed using estimates and assumptions that reflect those that market participants would use.

At December 31, 2018, the carrying value and estimated fair value of the Company’s total debt was $304.6 million and $290.1 million, respectively. At December 31, 2017, the carrying value and estimated fair value of the Company’s total debt was $358.9 million and $361.5 million, respectively. The majority of the Company’s debt at December 31, 2018 and 2017 was comprised of the Term Loan Credit Facility, which can be traded between financial institutions. Accordingly, this debt has been classified as Level 2. The fair value was determined based upon quoted values. The remainder of the Company’s debt, primarily consisting of foreign subsidiary indebtedness, is asset-backed and is classified as Level 3. As this debt carries variable rates and minimal credit risk, the book values approximate the fair values.

The Company has foreign currency exchange hedges and an interest rate swap that were measured at fair value on a recurring basis at December 31, 2018 and 2017. These instruments are recorded in other assets, net or other non-current liabilities in the Company’s Consolidated Balance Sheets and the fair value is measured using Level 2 observable inputs such as foreign currency exchange rates, swap rates, cross currency basis swap spreads and interest rate spreads. At December 31, 2018, the foreign currency exchange hedge (net investment hedge of the Company’s European subsidiaries) and the interest rate swap had liability fair values of $19.9 million and $5 million respectively. At December 31, 2017, the foreign currency exchange hedge (net investment hedge of our European subsidiaries) and the interest rate swap had liability fair values of $27 million and $8.9 million, respectively.

The following table provides each major category of assets and liabilities measured at fair value on a nonrecurring basis during the year ended December 31, 2018 (in millions):

	Quoted prices in active	Significant other	Significant
	markets for identical	observable	unobservable
	assets	inputs	inputs
	Level 1	Level 2	Level 3		Total gains / (losses)
Long-lived assets held for sale	Not applicable	Not applicable	$	263.7	$	(44.0)

In accordance with FASB ASC No. 360, Property, Plant, & Equipment, the long-lived assets held for sale related to the Company’s European operations, with a carrying amount of $307.7 million were written down to their fair value of $263.7 million, resulting in a loss of $44 million, which was included in the Company’s Consolidated Statements of Operations for the year ended December 31, 2018 as income / (loss) from discontinued operations, net of tax. The fair value of the assets was determined based upon consideration of the negotiated sales price in the sales agreement compared to the carrying value of the European operations. The carrying value also includes the cumulative translation adjustment that will need to be reclassified into earnings.

The following table provides each major category of assets and liabilities measured at fair value on a nonrecurring basis during the year ended December 31, 2017 (in millions):

	Quoted prices in active	Significant other	Significant
	markets for identical	observable	unobservable
	assets	inputs	inputs
	Level 1	Level 2	Level 3		Total gains / (losses)
Long-lived assets held for sale	Not applicable	Not applicable	$	4.3	$	(0.3)

In accordance with FASB ASC No. 360, Property, Plant, & Equipment, the long-lived assets held for sale related to the Ningbo joint venture in China, with a carrying amount of $4.6 million were written down to their fair value of $4.3 million, resulting in a loss of $0.3 million, which was included in the Company’s Consolidated Statements of Operations for the twelve months ended December 31, 2017 as income / (loss) from discontinued operations, net of tax. The fair value of the assets was determined based upon consideration of the negotiated sales price in the sales agreement.

The following table provides each major category of assets and liabilities measured at fair value on a nonrecurring basis during the year ended December 31, 2016 (in millions):

	Quoted prices in active	Significant other	Significant
	markets for identical	observable	unobservable
	assets	inputs	inputs
	Level 1	Level 2	Level 3		Total gains / (losses)
Long-lived assets held for sale	Not applicable	Not applicable	$	4.6	$	(3.1)
Asset impairment	Not applicable	Not applicable		18.6		(15.0)

In accordance with FASB ASC No. 360, Property, Plant, & Equipment, the long-lived assets held for sale related to the Ningbo joint venture in China, with a carrying amount of $7.7 million were written down to their fair value of $4.6 million, resulting in a loss of $3.1 million, which was included in the Company’s Consolidated Statements of Operations for the twelve months ended December 31, 2016 as income / (loss) from discontinued operations, net of tax. The fair value of the assets was determined based upon consideration of the negotiated sales price in the sales agreement.

In accordance with FASB ASC No. 360, Property, Plant, & Equipment, the long-lived assets held for sale related to the Company’s remaining Brazilian operations, with a carrying amount of $33.6 million were written down to their fair value of $18.6 million, resulting in a loss of $15 million, which was included in the Company’s Consolidated Statements of Operations for the twelve months ended December 31, 2016 as income / (loss) from discontinued operations, net of tax. This fair value adjustment of $15 million reflected that upon the sale of the Brazilian operations, the cumulative translation adjustment would be reclassified to earnings. During 2018, the Company reclassified the Brazilian operations as held and used.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate fair value because of the short maturity of these instruments.

Revenue Recognition

l. Revenue Recognition

On January 1, 2018, the Company adopted FASB ASC No. 606, Revenue from Contracts with Customers, using the modified retrospective method as applied to customer contracts that were not completed as of January 1, 2018. As a result, financial information for reporting periods beginning on or after January 1, 2018 are presented in accordance with FASB ASC No. 606, while comparative financial information has not been adjusted and continues to be reported in accordance with the Company’s revenue recognition policies prior to the adoption of FASB ASC No. 606.

The Company enters into contracts with its customers that create enforceable rights and obligations. Each such contract requires the Company to supply products for specific vehicle programs. The Company has determined that each unit produced represents a separate performance obligation. The Company satisfies its performance obligations and recognizes revenue at a point in time when the customer has obtained control of the unit. Determining when control transfers requires management to make judgments that affect the timing of revenue recognized. The Company has determined that control has transferred when its products are shipped to its customers because the Company has a present right to payment at that time, legal title and risk of loss have passed to the customer and the customer is able to direct the use of, and obtain substantially all of the benefits from, the products. Invoices are generated upon shipment to the customer and are based on contractually agreed upon unit prices. The Company has payment terms with its customers that generally require payment within 30 to 60 days of invoice date. FASB ASC No. 606 provides a practical expedient that allows companies to exclude from the transaction price any amounts collected from customers for all sales (and other similar) taxes. We do not include sales and other taxes in our transaction price and thus do not recognize these amounts as revenue.Shipping and handling costs are accounted for as fulfillment costs and are included in cost of sales.

It is common for the Company to negotiate pricing with its customers on an annual basis which can result in price adjustments over the program lives or other variable consideration adjustments. Based on extensive historical experience, the Company has concluded its estimate of variable consideration is not constrained. Therefore the Company accrues for these items using the most likely amount method in accordance with FASB ASC No. 606-10-32 and records adjustments to revenue throughout the year as negotiations progress and are finalized. In certain cases, the Company provides lump sum payments to its customers that are directly related to awarded programs. These payments are expected to be recovered over the life of the associated program; therefore, the Company capitalizes these payments and amortizes them into revenue over the life of the associated program. 

The Company participates in certain of its customers’ steel repurchase programs, under which it purchases steel directly from a customer’s designated steel supplier, for use in manufacturing products for that customer. The Company takes delivery and title to such steel and bears the risk of loss and obsolescence. The Company invoices its customers based upon annually negotiated selling prices, which inherently include a component for steel under such repurchase programs. Under guidance provided in FASB ASC No. 606-10-55, Principal versus Agent Considerations, the Company has risks and rewards of a principal and therefore, for sales transactions in which the Company participates in a customer’s steel resale program, revenue is recognized on a gross basis for the entire amount of the sales, including the component for purchases under that customer’s steel resale program. The purchases through customer resale programs have buffered the impact of price swings associated with the procurement of these metals. The remainder of the Company’s steel and aluminum purchasing requirements are met through contracts with mills, in which the Company negotiates its own price and seeks to pass through price increases and decreases to the Company’s customers. 

The Company enters into agreements to produce products for its customers at the beginning of a given vehicle program’s life. Once such agreements are entered into by the Company, it is obligated to fulfill the customers’ purchasing requirements for the entire production period of the vehicle programs, which range from three to ten years, and generally, the Company has no provisions to terminate such contracts. These contracts may be terminated by the Company’s customers at any time. Historically, terminations of these contracts have been minimal.

Additionally, the Company monitors the aging of uncollected billings and adjusts its accounts receivable allowance on a quarterly basis, as necessary, based upon its evaluation of the probability of collection. The adjustments made by the Company due to the write-off of uncollectible amounts have been immaterial for all periods presented. At December 31, 2018, the Company’s accounts receivable, net of allowances, were $113.1 million and the Company did not have any material unbilled or deferred revenue recorded on the Consolidated Balance Sheet.

For the year ended December 31, 2018, revenue recognized from performance obligations related to prior periods (for example, due to changes in transaction price) was not material.

Revenue expected to be recognized in any future period related to remaining performance obligations, excluding revenue pertaining to contracts that have an original expected duration of one year or less or contracts where revenue is recognized as invoiced, is not material.

The following table summarizes the Company’s customer mix as a percent of revenues for the year ended December 31, 2018:

Customer
Ford	47	%
Fiat - Chrysler	22	%
Nissan	12	%
Toyota	8	%
BMW	5	%
Volkswagen Group	2	%
Honda	2	%
Other	2	%
Total	100	%

The following table summarizes the Company’s vehicle platform mix as a percent of revenues for the year ended December 31, 2018:

Vehicle Platform
SUV	53	%
Pickup	27	%
Van	4	%
MPV	2	%
Light trucks	86	%
Large Car	7	%
Small Car	5	%
All Other	2	%
Total	100	%

Prior to January, 1, 2018, the Company recognized revenue in accordance with FASB ASC No. 605, Revenue Recognition. The Company recognized revenue once the following criteria were met: persuasive evidence of an arrangement existed; delivery had occurred or services had been rendered; the Company’s price to the buyer was fixed or determinable; and collectability was reasonably assured.

Income Taxes

m. Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the Consolidated Financial Statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company records net deferred tax assets to the extent it believes that these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. Valuation allowances have been recorded where it has been determined that it is more likely than not that the Company will not be able to realize the net deferred tax assets. Previously established valuation allowances are reversed into income when there is compelling evidence, typically three or more consecutive years of cumulative profit or other positive evidence, that the future tax profitability will be sufficient to utilize the deferred tax asset. Due to the significant judgment involved in determining whether deferred tax assets will be realized, the ultimate resolution of these items may be materially different from the previously estimated outcome.

Changes in tax laws and rates could also affect recorded deferred tax assets and liabilities in the future. The Company recorded a one-time deferred tax expense of $27.2 million in the fourth quarter of 2017 in order to revalue the Company’s U.S. deferred tax assets to the new lower U.S. Federal statutory rate of 21% due to U.S. Tax Reform.

The calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across the Company’s operations.

FASB ASC No. 740, Income Taxes, provides that a tax benefit from an uncertain tax position be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. FASB ASC No. 740 also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company has elected to recognize interest and penalties related to unrecognized tax benefits as income tax expense.

The Company recognizes tax liabilities in accordance with FASB ASC No. 740 and adjusts these liabilities when its judgment changes as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different than the Company’s current estimate of the tax liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which they are determined.

Segment Information

n. Segment Reporting

The Company determines its reportable segments based upon the guidance in FASB ASC No. 280, Segment Reporting. The Company defines its operating segments as components of its business where separate financial information is available. Based on these criteria,  the Company has determined that it has two operating segments, North America and Brazil, which have been aggregated into one reportable segment.

Foreign Currency Translation

o. Foreign Currency Translation

The functional currency of the Company’s foreign operations is the local currency in which they operate. Assets and liabilities of the Company’s foreign operations are translated into U.S. dollars using the applicable period-end exchange rates. Results of operations are translated at applicable average rates prevailing throughout the period. Gains or losses resulting from foreign currency translation are reported as foreign currency translation adjustments, a separate component of AOCI, in the Consolidated Statements of Comprehensive Income / (Loss). Gains and losses resulting from foreign currency transactions are recognized in net income / (loss) in the Consolidated Statements of Operations and were immaterial for all periods presented.

Exit or Disposal Activities

p. Exit or Disposal Activities

Costs to idle, consolidate, or close facilities and provide postemployment benefits to employees are accrued based on management’s best estimate of the wage and benefit costs that will be incurred. Costs related to idling of employees that is expected to be temporary are expensed as incurred. Costs to terminate a contract without economic benefit to the Company are expensed at the time the contract is terminated. One-time termination benefits that are not subject to contractual arrangements, provided to employees who are involuntarily terminated, are recorded after management commits to a detailed plan of termination, communicates the plan to employees, and when actions required to complete the plan indicate that significant changes are not likely. If employees are required to render services until they are terminated in order to earn termination benefits, the benefits are recognized ratably over the future service period.

Share-based Compensation

q. Share-based Compensation

The Company measures compensation cost arising from the grant of share-based awards to employees at fair value. The Company recognizes such costs in income over the period during which the requisite service is provided. Refer to Note 11 for further discussion regarding share-based compensation.

Accumulated Other Comprehensive Income / (Loss)

r. Accumulated Other Comprehensive Income / (Loss)

The following table presents the components of accumulated other comprehensive loss (in thousands):

	As of December 31, 2018		As of December 31, 2017
Foreign currency translation adjustments, net of tax expense of $2.9 million and $0.1 million	$	(36,531)	$	(24,861)
Defined benefit plans, net of tax expense of $14.9 million and $15 million		(38,185)		(38,249)
Unrealized loss on qualifying cash flow hedge,
net of tax (benefit) of ($1.3 million) and ($2.8 million)		(204)		(4,698)
Accumulated other comprehensive loss	$	(74,920)	$	(67,808)

The following table presents the changes in accumulated other comprehensive loss, net of tax, by component for the year ended December 31, 2018 (in thousands):

	Unrealized Losses				Foreign Currency
	on Qualifying		Defined Benefit		Translation
	Cash Flow Hedge		Plans		Adjustments		Total
Balance at December 31, 2017	$	(4,698)	$	(38,249)	$	(24,861)	$	(67,808)
Other comprehensive income / (loss) before reclassification		3,760		64		(14,784)		(10,960)
Amounts reclassified from accumulated other
comprehensive income		734		-		3,114		3,848
Net current-period other comprehensive income / (loss)		4,494		64		(11,670)		(7,112)
Balance at December 31, 2018	$	(204)	$	(38,185)	$	(36,531)	$	(74,920)

The following table presents the changes in accumulated other comprehensive loss, net of tax, by component for the year ended December 31, 2017 (in thousands):

		Unrealized Gains			Foreign Currency
		on Qualifying	Defined Benefit		Translation
		Cash Flow Hedge	Plans		Adjustments		Total
Balance at December 31, 2016	$	-	$	(38,972)	$	(44,411)	$	(83,383)
Other comprehensive income / (loss) before reclassification		(4,698)		723		19,550		15,575
Net current-period other comprehensive income / (loss)		(4,698)		723		19,550		15,575
Balance at December 31, 2017	$	(4,698)	$	(38,249)	$	(24,861)	$	(67,808)

Estimates

s. Estimates

The preparation of the Company’s financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures related to contingent assets and liabilities at the reporting date and the reported amounts of revenues and expenses during the reporting period. Generally, matters subject to estimation and judgment include amounts related to accounts receivable realization, fair value measurements, pension and other postretirement benefit plan assumptions, restructuring reserves, asset valuation reserves and accruals related to environmental remediation costs, asset retirement obligations, and income taxes. Actual results may differ from those estimates and assumptions and changes in such estimates and assumptions may affect amounts reported in future periods.

XML

Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2018

Significant Accounting Policies [Abstract]

Schedule of Inventories

Inventories consist of the following (in thousands):

	December 31, 2018		December 31, 2017
Raw materials	$	29,752	$	23,566
Work in process		13,008		12,914
Finished goods		26,674		21,015
Total inventory	$	69,434	$	57,495

Components of Capitalized Tooling Costs

The components of capitalized tooling costs are as follows (in thousands):

	December 31, 2018		December 31, 2017
Customer-owned tooling, net	$	14,758	$	33,332
Company-owned tooling		507		277
Total tooling, net	$	15,265	$	33,609

Estimated Useful Lives of Property, Plant and Equipment

Depreciation is computed using the straight-line method over the following estimated useful lives of assets:  

Buildings and improvements	32 to 40 years
Machinery and equipment	3 to 20 years

Schedule of Property, Plant and Equipment

Property, plant, and equipment consist of the following (in thousands): 

	December 31,		December 31,
	2018		2017
Cost:
Land	$	5,329	$	7,383
Buildings and improvements		106,594		118,893
Machinery and equipment		656,084		623,291
Construction in progress		74,490		33,633
Property, plant, and equipment, gross		842,497		783,200
Less: accumulated depreciation		(494,694)		(460,001)
Property, plant, and equipment, net	$	347,803	$	323,199

Schedule of Asset Retirement Obligations

The following table reconciles the Company’s asset retirement obligations as of December 31, 2018 and 2017 (in thousands):

	December 31,		December 31,
	2018		2017
Beginning balance	$	16,687	$	16,676
Liabilities incurred		1,378		3,698
Accretion expense		1,182		1,338
Liabilities settled		-		-
Change in estimate		(4,751)		(5,025)
Ending balance	$	14,496	$	16,687

Schedule of Goodwill

The change in the carrying amount of goodwill for the Company’s reportable segment is set forth below (in thousands):

Balance at December 31, 2016	$	7,090
Currency translation adjustment		334
Balance at December 31, 2017		7,424
Currency translation adjustment		29
Balance at December 31, 2018	$	7,453

Fair Value Measurements, Nonrecurring

The following table provides each major category of assets and liabilities measured at fair value on a nonrecurring basis during the year ended December 31, 2018 (in millions):

	Quoted prices in active	Significant other	Significant
	markets for identical	observable	unobservable
	assets	inputs	inputs
	Level 1	Level 2	Level 3		Total gains / (losses)
Long-lived assets held for sale	Not applicable	Not applicable	$	263.7	$	(44.0)

The following table provides each major category of assets and liabilities measured at fair value on a nonrecurring basis during the year ended December 31, 2017 (in millions):

	Quoted prices in active	Significant other	Significant
	markets for identical	observable	unobservable
	assets	inputs	inputs
	Level 1	Level 2	Level 3		Total gains / (losses)
Long-lived assets held for sale	Not applicable	Not applicable	$	4.3	$	(0.3)

The following table provides each major category of assets and liabilities measured at fair value on a nonrecurring basis during the year ended December 31, 2016 (in millions):

	Quoted prices in active	Significant other	Significant
	markets for identical	observable	unobservable
	assets	inputs	inputs
	Level 1	Level 2	Level 3		Total gains / (losses)
Long-lived assets held for sale	Not applicable	Not applicable	$	4.6	$	(3.1)
Asset impairment	Not applicable	Not applicable		18.6		(15.0)

Summary of Vehicle Platform Mix as a Percentage of Revenue

The following table summarizes the Company’s customer mix as a percent of revenues for the year ended December 31, 2018:

Customer
Ford	47	%
Fiat - Chrysler	22	%
Nissan	12	%
Toyota	8	%
BMW	5	%
Volkswagen Group	2	%
Honda	2	%
Other	2	%
Total	100	%

The following table summarizes the Company’s vehicle platform mix as a percent of revenues for the year ended December 31, 2018:

Vehicle Platform
SUV	53	%
Pickup	27	%
Van	4	%
MPV	2	%
Light trucks	86	%
Large Car	7	%
Small Car	5	%
All Other	2	%
Total	100	%

Components of Accumulated Other Comprehensive Loss

The following table presents the components of accumulated other comprehensive loss (in thousands):

	As of December 31, 2018		As of December 31, 2017
Foreign currency translation adjustments, net of tax expense of $2.9 million and $0.1 million	$	(36,531)	$	(24,861)
Defined benefit plans, net of tax expense of $14.9 million and $15 million		(38,185)		(38,249)
Unrealized loss on qualifying cash flow hedge,
net of tax (benefit) of ($1.3 million) and ($2.8 million)		(204)		(4,698)
Accumulated other comprehensive loss	$	(74,920)	$	(67,808)

Schedule of Amounts Recognized in Other Comprehensive Income (Loss)

The following table presents the changes in accumulated other comprehensive loss, net of tax, by component for the year ended December 31, 2018 (in thousands):

	Unrealized Losses				Foreign Currency
	on Qualifying		Defined Benefit		Translation
	Cash Flow Hedge		Plans		Adjustments		Total
Balance at December 31, 2017	$	(4,698)	$	(38,249)	$	(24,861)	$	(67,808)
Other comprehensive income / (loss) before reclassification		3,760		64		(14,784)		(10,960)
Amounts reclassified from accumulated other
comprehensive income		734		-		3,114		3,848
Net current-period other comprehensive income / (loss)		4,494		64		(11,670)		(7,112)
Balance at December 31, 2018	$	(204)	$	(38,185)	$	(36,531)	$	(74,920)

The following table presents the changes in accumulated other comprehensive loss, net of tax, by component for the year ended December 31, 2017 (in thousands):

		Unrealized Gains			Foreign Currency
		on Qualifying	Defined Benefit		Translation
		Cash Flow Hedge	Plans		Adjustments		Total
Balance at December 31, 2016	$	-	$	(38,972)	$	(44,411)	$	(83,383)
Other comprehensive income / (loss) before reclassification		(4,698)		723		19,550		15,575
Net current-period other comprehensive income / (loss)		(4,698)		723		19,550		15,575
Balance at December 31, 2017	$	(4,698)	$	(38,249)	$	(24,861)	$	(67,808)

XML

Restructuring and Asset Impairment Charges (Tables)

12 Months Ended

Dec. 31, 2018

Restructuring and Asset Impairment Charges [Abstract]

Schedule of Restructuring Charges and Asset Impairment Charges

The following table sets forth the Company’s net restructuring and asset impairment charges by type for the periods presented (in thousands):

	Year  Ended December 31,
	2018		2017		2016
Employee termination costs	$	3,059	$	7,862	$	1,335
Other exit costs		321		1,236		4,578
Asset impairments		-		-		15,000
Total restructuring expense	$	3,380	$	9,098	$	20,913

Schedule of Restructuring Liability by Segment

The following table summarizes the activity in the restructuring reserve, which is included in the Consolidated Balance Sheets in accrued liabilities, for the above-mentioned actions through December 31, 2018 (in thousands):

Balance at December 31, 2016	$	197
Payments		(3,989)
Increase in liability		7,862
Balance at December 31, 2017		4,070
Payments		(4,421)
Increase in liability		3,059
Balance at December 31, 2018	$	2,708

XML

Discontinued Operations and Assets Held for Sale (Tables)

12 Months Ended

Dec. 31, 2018

Discontinued Operations and Assets Held for Sale [Abstract]

Financial Information of the Discontinued Operations

The following table discloses select financial information of the discontinued operations of the Company’s European operations and Chinese joint ventures (in thousands):

	Year  Ended December 31,
	2018		2017		2016
Revenues	$	650,294	$	683,487	$	714,381
Loss from sale of discontinued operations		(44,000)		(2,896)		(3,100)
Income / (loss) from discontinued operations:
Income before provision for income taxes		(20,968)		19,769		36,568
Provision for income taxes		7,251		11,737		10,992
Income / (loss) from discontinued operations, net of tax	$	(28,219)	$	8,032	$	25,576

Disclosure of Long Lived Assets Held for Sale

The following table summarizes assets and liabilities held for sale by category (in thousands):

	December 31, 2018		December 31, 2017
ASSETS
Current assets	$	175,774	$	222,505
Property, plant, and equipment, net		239,023		226,312
Other assets, net		7,072		16,125
Goodwill		17,744		56,241
Fair value adjustment		(8,000)		(3,400)
Total assets held for sale	$	431,613	$	517,783
LIABILITIES
Short-term debt and current maturities of capital lease obligations	$	14,890	$	38,383
Accounts payable and accrued liabilities		142,638		161,724
Total current liabilities		157,528		200,107
Long-term debt, net of current maturities		-		-
Other non-current liabilities		10,354		10,798
Total non-current liabilities		10,354		10,798
Total liabilities held for sale	$	167,882	$	210,905

XML

Debt (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of Long-term Debt

Debt consists of the following (in thousands):

	December 31, 2018		December 31, 2017
Term Loan Credit Facility (net of discount of $1,653 and $2,288)	$	303,521	$	356,501
Amended Revolving Credit Facility		-		-
Other foreign subsidiary indebtedness		1,044		2,352
Debt issue costs		(5,960)		(8,098)
Total debt		298,605		350,755
Less: Current maturities of debts		(4,148)		(4,744)
Total long-term debt	$	294,457	$	346,011

Schedule of Maturities of Long-term Debt

Future maturities of long-term debt as of December 31, 2018 are as follows (in thousands):

2019	$	4,148
2020		3,894
2021		3,806
2022		3,656
2023		3,615
Thereafter		285,446
Total		304,565
Less: Debt issue costs		(5,960)
Total, net of debt issue costs	$	298,605

Subsidiaries [Member] | Foreign Line of Credit [Member]

Schedule of Long-term Debt

The change in foreign subsidiary indebtedness from December 31, 2017 to December 31, 2018 is explained by the following (in thousands):

	Brazil
Balance at December 31, 2017	$	2,352
Maturities of indebtedness		(963)
Change in borrowings on credit facilities, net		-
Foreign exchange impact		(345)
Balance at December 31, 2018	$	1,044

XML

Derivative Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2018

Derivative Financial Instruments[Abstract]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

At December 31, 2018 (when the U.S. dollar / Euro exchange spot rate was $1.1457) and December 31, 2017 (when the U.S. dollar / Euro exchange spot rate was $1.2009), the following amounts were recorded in the Consolidated Balance Sheets as being receivable from or payable to counterparties under FASB ASC No. 815, Derivatives and Hedging (in thousands):

	Location	December 31, 2018		December 31, 2017
Net investment hedge	Other non-current liabilities	$	19,903	$	27,001
Interest rate swap	Other non-current liabilities		5,034		8,918

Derivative Instruments, Gain (Loss)

The following table presents deferred gains / (losses) reported in AOCI at December 31, 2018 and December 31, 2017, respectively (in thousands):

	Deferred gain / (loss) in AOCI
	Year  Ended December 31,
	2018		2017
Net investment hedge	$	21,099	$	9,849
Interest rate hedge		(1,546)		(7,537)
Total	$	19,553	$	2,312

Derivative Instruments Held and Expense Recorded

Derivative instruments held during the period resulted in the following expense recorded in income during the year ended December 31, 2018(in thousands):

	Year  Ended December 31,
	2018
Interest expense	$	19,856
Effect of hedging		(1,563)

XML

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Income Taxes [Abstract]

Summary of Income / (Loss) Before Provision for Income Taxes and Noncontrolling Interests

The summary of income / (loss) before provision for income taxes and noncontrolling interests consisted of the following (in thousands):

	Year  Ended December 31,
	2018		2017		2016
Domestic	$	73,274	$	72,967	$	29,454
Foreign		5,104		10,825		(6,982)
Total	$	78,378	$	83,792	$	22,472

Provision / (Benefit) for Income Taxes

The provision / (benefit) for income taxes consisted of the following (in thousands):

	Year  Ended December 31,
	2018		2017		2016
Current:
Domestic – Federal	$	(461)	$	352	$	152
Domestic – State		2,147		(364)		925
Foreign		2,907		2,399		1,144
Total		4,593		2,387		2,221
Deferred and other:
Domestic – Federal		10,784		40,819		3,912
Domestic – State		1,779		637		807
Foreign		(15,897)		246		1,828
Total		(3,334)		41,702		6,547
Total provision / (benefit) for income taxes	$	1,259	$	44,089	$	8,768

Reconciliation of Income Tax Expense from Continuing Operations and the U.S. Federal Statutory Income Tax Expense

	Year  Ended December 31,
	2018		2017		2016
Current:
Domestic – Federal	$	(461)	$	352	$	152
Domestic – State		2,147		(364)		925
Foreign		2,907		2,399		1,144
Total		4,593		2,387		2,221
Deferred and other:
Domestic – Federal		10,784		40,819		3,912
Domestic – State		1,779		637		807
Foreign		(15,897)		246		1,828
Total		(3,334)		41,702		6,547
Total provision / (benefit) for income taxes	$	1,259	$	44,089	$	8,768

A reconciliation of income tax expense from continuing operations and the U.S. federal statutory income tax expense were as follows (in thousands):

	Year  Ended December 31,
	2018		2017		2016
Taxes at U.S. federal statutory rate	$	16,459	$	29,327	$	7,865
State tax expense		3,112		88		1,297
Foreign tax rate differential		544		(522)		316
Valuation allowance		(11,365)		(1,380)		6,502
Permanent differences		724		(1,340)		235
U.S. Tax Reform - Deferred Tax Asset Revaluation		-		27,163
Increase / (decrease) in uncertain tax positions		(393)		1,236		779
Tax credits		(8,191)		(10,365)		(7,855)
Other		369		(118)		(371)
Total income tax expense / (benefit)	$	1,259	$	44,089	$	8,768

Schedule of Deferred Tax Assets and Liabilities

Deferred income taxes are primarily provided for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities. The tax effects of each type of temporary difference and carryforward that give rise to a significant portion of deferred tax assets / (liabilities) are summarized as follows (in thousands):

	December 31,		December 31,
	2018		2017
Deferred tax assets are attributable to:
Net operating loss carryforwards and tax credits	$	108,720	$	113,865
Non-deductible reserves and other accruals		26,881		25,323
Accrued pension and postretirement benefit obligations		12,652		13,140
Hedging		6,165		8,976
Capitalized leases		2,375		2,841
Other		1,748		-
Total gross deferred tax assets		158,541		164,145
Less: valuation allowances		(48,712)		(63,300)
Net deferred tax assets	$	109,829	$	100,845
Deferred tax liabilities are attributable to:
Long lived assets	$	(18,394)	$	(6,115)
Prepaid tooling development costs		(3,110)		(7,784)
Prepaid Expense		(5,480)		(1,619)
Deferred cancellation of indebtedness income		-		(2,236)
Other		(13)		(1,014)
Total gross deferred tax liabilities		(26,997)		(18,768)
Net deferred tax asset / (liability)	$	82,832	$	82,077

Reconciliation of the Beginning and Ending Amounts of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amounts of unrecognized tax benefits are as follows (in thousands):

	Year  Ended December 31,
	2018		2017		2016
Unrecognized tax benefit – January 1	$	4,973	$	3,682	$	2,880
Increase in prior year tax positions		-		247		-
Decrease in prior year tax positions		-		-		(164)
Increase in current year tax positions		188		1,039		1,000
Audit settlements		(638)		-		-
Lapse in statute of limitations		-		-		(25)
Foreign currency translation		1		5		(9)
Liabilities held for sale		-		-		-
Total	$	4,524	$	4,973	$	3,682

XML

Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2018

Employee Benefit Plans [Abstract]

Reconciliation of the Changes in the Fair Value of Pension Plan Assets and the Change in the Projected Benefit Obligation

The following table provides a reconciliation of the changes in the fair value of Pension Plan assets and the change in the projected benefit obligation (in thousands):

	Year  Ended		Year  Ended
	December 31,		December 31,
	2018		2017
Reconciliation of fair value of Pension Plan assets:
Fair value of assets, beginning of period	$	201,522	$	186,473
Actual return		(12,070)		28,660
Employer contributions		6,019		8,600
Expenses paid from Pension Plan assets		(3,341)		(3,491)
Benefits paid		(16,953)		(18,720)
Fair value of assets, end of period	$	175,177	$	201,522
Change in projected benefit obligation:
Projected benefit obligation, beginning of period	$	249,335	$	248,100
Service cost		17		19
Interest cost		7,155		7,493
Actuarial (gain) / loss		(18,615)		12,443
Benefits paid		(16,953)		(18,720)
Projected benefit obligation, end of period	$	220,939	$	249,335
Funded status of the Pension Plan	$	(45,762)	$	(47,813)

Components of Net Periodic Pension Benefit and Other Post-retirement Benefit Costs

The following table presents the components of the net periodic pension benefit cost / (income) of the Pension Plan (in thousands):

	Year  Ended December 31,
	2018		2017		2016
Service cost	$	17	$	19	$	21
Interest cost		7,155		7,493		7,708
Expected return on plan assets		(10,562)		(10,329)		(10,316)
Amortization of prior service credit		(95)		(95)		(95)
Actuarial loss		5,234		-		8,330
Net periodic benefit cost / (income)	$	1,749	$	(2,912)	$	5,648

Schedule of Defined Benefit Plans Recognized in Other Comprehensive Income / (Loss)

Pre-tax amounts recognized in other comprehensive income / (loss) for the years ended December 31, 2018,  2017, and 2016 consist of the following (in thousands):

	Year  Ended December 31,
	2018		2017		2016
Unrecognized gain / (loss)	$	(2,124)	$	2,398	$	2,091
Amortization of prior service credit		(95)		(95)		(95)
Amount recognized	$	(2,219)	$	2,303	$	1,996

Schedule of Defined Benefit Plan Amounts Recognized in Accumulated Other Comprehensive Income Loss

The following table summarizes the amounts included in accumulated other comprehensive loss, net of tax, related to the Pension Plan (in thousands):

	As of December 31,
	2018		2017
Unrecognized loss	$	(24,901)	$	(22,777)
Net prior service credit		1,570		1,665
Deferred tax impact		(13,364)		(13,919)
Accumulated other comprehensive loss	$	(36,695)	$	(35,031)

Significant Assumptions Used in Measuring the Company's Projected Benefit Obligation

The significant assumptions used in measuring the Company’s projected benefit obligation at the December 31, 2018 and 2017 measurement dates are as follows:

	Year  Ended December 31,
	2018			2017
Discount rate		4.09	%		3.42	%
Annual rate of increase in compensation		4.5	%		4.5	%

Assumptions Used in Determining Net Periodic Benefit

The assumptions used in determining net periodic benefit cost are shown below:

	Year  Ended December 31,
	2018			2017			2016
Discount rate		3.42	%		3.84	%		4.01	%
Expected long-term rate of return on plan assets		7.4	%		7.4	%		7.4	%
Annual rate of increase in compensation		4.5	%		4.5	%		4.5	%

Schedule of Allocation of Plan Assets

The allocation of Pension Plan assets at December 31, 2018 and 2017, as well as the Company’s 2018 target allocations, are as follows:

	Year Ended December 31,
Asset Classes:	2018			2017			2018 Target
Equity securities		43	%		45	%		50	%
Non-equity investments		12	%		12	%		5	%
Fixed income investments		36	%		34	%		40	%
Cash and cash equivalents		1	%		2	%		-	%
Real estate		8	%		7	%		5	%
Total		100	%		100	%		100	%

Summary the Pension Plan Assets Measured at Fair Value

The following table summarizes the Pension Plan assets measured at fair value as of December 31, 2018 and 2017 (in millions). Refer to Note 3 for definitions of Level 1, 2, and 3 financial instruments within the fair value hierarchy and the methods and assumptions used to estimate the fair value of marketable securities.

	Fair Value Measurements at December 31, 2018
			Quoted Prices in		Significant		Significant
			Active Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
Asset Classes	Total		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents	$	2	$	2	$	-	$	-
Equity securities		75		-		75		-
Mutual funds(a)		21		12		9		-
Corporate bonds		47		-		47		-
Government bonds		15		-		15		-
Real estate investment funds		15		-		-		15
Total	$	175	$	14	$	146	$	15

	Fair Value Measurements at December 31, 2017
			Quoted Prices in		Significant		Significant
			Active Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
Asset Classes	Total		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents	$	3	$	2	$	1	$	-
Equity securities		91		-		91		-
Mutual funds(a)		26		16		10		-
Corporate bonds		51		-		51		-
Government bonds		17		-		17		-
Real estate investment funds		14		-		-		14
Total	$	202	$	18	$	170	$	14

 __________ 

(a)This category consists of mutual fund investments that are focused on fixed income and international equity securities.

Pension Plan Assets with Fair Value Measurements Using Significant Unobservable Inputs

For Pension Plan assets with fair value measurements using significant unobservable inputs (Level 3), reconciliations of beginning and ending balances are as follows (in millions):

	Real Estate
	Investment Funds
Balance at December 31, 2016	$	14
Return on plan assets held at the reporting date		-
Purchases		-
Redemptions		-
Balance at December 31, 2017	$	14
Return on plan assets held at the reporting date		1
Purchases		-
Redemptions		-
Balance at December 31, 2018	$	15

Reconciliation of the Changes in the Benefit Obligation and Funded Status of the Life Insurance Plans

The following table provides a reconciliation of the changes in the benefit obligation and funded status of the Company’s life insurance plans (in thousands):

	Year  Ended		Year  Ended
	December 31,		December 31,
	2018		2017
Reconciliation of fair value of life insurance plan assets:
Fair value of assets, beginning of period	$	—	$	—
Employer contributions		729		744
Benefits paid		(729)		(744)
Fair value of assets, end of period	$	—	$	—
Change in benefit obligation:
Benefit obligation, beginning of period	$	16,892	$	16,200
Service cost		6		5
Interest cost		516		530
Actuarial loss / (gain)		(2,062)		901
Benefits paid		(729)		(744)
Benefit obligation, end of period	$	14,623	$	16,892
Funded status of life insurance plans	$	(14,623)	$	(16,892)

Components of the Net Periodic Benefit Cost of the Life Insurance Plans

The following table provides the components of the net periodic benefit cost of the Company’s life insurance plans for the years ended December 31, 2018,  2017, and 2016 (in thousands):

	Year  Ended		Year  Ended		Year  Ended
	December 31,		December 31,		December 31,
	2018		2017		2016
Service cost	$	6	$	5	$	5
Interest cost		516		530		539
Amortization of prior service credit		132		132		132
Net periodic benefit cost	$	654	$	667	$	676

Pre-Tax Amounts Recognized in Other Comprehensive Income (Loss)

Pre-tax amounts recognized in other comprehensive income / (loss) at December 31, 2018,  2017, and 2016 consist of the following (in thousands):

	Year  Ended December 31,
	2018		2017		2016
Net actuarial gain / (loss)	$	2,062	$	(901)	$	(393)
Amortization of prior service cost		132		132		132
Amount recognized	$	2,194	$	(769)	$	(261)

Summary of Amounts Included in Accumulated Other Comprehensive Loss Related to Life Insurance Plans

The following table summarizes the amounts included in accumulated other comprehensive loss, net of tax, related to the Company’s life insurance plans (in thousands):

	As of December 31,
	2018		2017
Unrecognized gain / (loss)	$	1,388	$	(674)
Net prior service credit		(1,315)		(1,447)
Deferred tax impact		(1,563)		(1,097)
Accumulated other comprehensive loss	$	(1,490)	$	(3,218)

XML

Earnings per Share ("EPS") (Tables)

12 Months Ended

Dec. 31, 2018

Earnings per Share ("EPS") [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

A summary of the information used to compute basic and diluted net income / (loss) per share attributable to Tower International, Inc. is shown below (in thousands – except share and per share amounts): 

	Year  Ended December 31,
	2018		2017		2016
Income from continuing operations	$	77,119	$	39,703	$	13,704
Income / (loss) from discontinued operations, net of tax		(28,219)		8,032		25,576
Net income		48,900		47,735		39,280
Less: Net income attributable to the noncontrolling interests		-		110		701
Net income attributable to Tower International, Inc.	$	48,900	$	47,625	$	38,579
Basic income / (loss) per share:
Continuing operations	$	3.75	$	1.93	$	0.62
Discontinued operations		(1.38)		0.39		1.23
Net income attributable to Tower International, Inc.		2.37		2.32		1.85
Basic weighted average shares outstanding		20,591,674		20,498,668		20,864,321
Diluted income / (loss) per share:
Continuing operations	$	3.67	$	1.90	$	0.61
Discontinued operations		(1.34)		0.39		1.21
Net income attributable to Tower International, Inc.		2.33		2.29		1.82
Diluted weighted average shares outstanding		20,996,068		20,828,888		21,222,183

Schedule of Quarterly Dividends per Common Share

The following table presents information regarding our quarterly dividends per common share.

Declaration Date		Cash Amount	Record Date	Payment Date
2018
October 18, 2018	$	0.13	November 8, 2018	December 7, 2018
July 17, 2018		0.12	August 9, 2018	September 7, 2018
April 19, 2018		0.12	May 10, 2018	June 8, 2018
January 26, 2018		0.12	February 9, 2018	February 28, 2018
2017
October 20, 2017	$	0.12	November 10, 2017	December 8, 2017
July 21, 2017		0.11	August 10, 2017	September 8, 2017
April 21, 2017		0.11	May 10, 2017	June 9, 2017
January 27, 2017		0.11	February 10, 2017	February 28, 2017
2016
October 21, 2016	$	0.11	November 10, 2016	December 9, 2016
July 22, 2016		0.10	August 10, 2016	September 9, 2016
April 22, 2016		0.10	May 10, 2016	June 10, 2016
January 29, 2016		0.10	February 10, 2016	February 29, 2016

XML

Share-Based and Long-Term Compensation (Tables)

12 Months Ended

Dec. 31, 2018

Share-Based and Long-Term Compensation [Abstract]

Disclosure of Share-based Compensation Arrangements by Share-based Payment Award

The following table summarizes the Company’s award activity during the years ended December 31, 2018,  2017, and 2016:

	Options			Restricted Stock Units
		Weighted			Weighted
		Average			Average Grant
Outstanding at:	Shares	Exercise Price		Shares	Date Fair Value
December 31, 2015	500,138	$	12.17	187,498	$	23.59
Granted	-		-	105,468		23.26
Options exercised or RSUs vested	(25,670)		11.90	(77,912)		19.92
Forfeited	-		-	(1,532)		25.26
December 31, 2016	474,468	$	12.18	213,522	$	24.77
Granted	-		-	106,312		28.09
Options exercised or RSUs vested	(108,791)		12.07	(101,478)		24.99
Forfeited	-		-	(5,335)		25.47
December 31, 2017	365,677	$	12.22	213,022	$	26.30
Granted	-		-	242,531		26.35
Options exercised or RSUs vested	(20,178)		12.45	(62,225)		26.32
Forfeited	(4,155)		12.04	(5,281)		26.21
December 31, 2018	341,344	$	12.21	388,047	$	26.33

XML

Segment Information (Tables)

12 Months Ended

Dec. 31, 2018

Segment Information [Abstract]

Schedule of Segment Reporting Information, by Segment

The following is a summary of select data for the Company’s reportable segment (in thousands):

Year  Ended December 31, 2018:
Revenues	$	1,571,853
Net Income		48,900
Capital Expenditures (a)		83,141
Total assets (b)		1,170,392
Year  Ended December 31, 2017:
Revenues	$	1,382,474
Net Income		47,625
Capital Expenditures (a)		67,240
Total assets (b)		1,260,873
Year  Ended December 31, 2016:
Revenues	$	1,319,046
Net Income		38,579
Capital Expenditures (a)		72,194

(a) Capital expenditures represent cash disbursed for purchases of property, plant, and equipment, as presented in the accompanying Consolidated Statements of Cash Flows. 

(b) Total assets as of December 31, 2018 and 2017 include assets held for sale.

Summary of Revenues and Long-Lived Assets by Geographic Location

The following is a summary of revenues and long-lived assets by geographic location (in thousands):

	Year Ended and End of Year December 31,
	2018				2017				2016
			Long-Lived				Long-Lived				Long-Lived
	Revenues		Assets		Revenues		Assets		Revenues		Assets
U.S.	$	1,470,772	$	332,086	$	1,273,442	$	305,127	$	1,222,120	$	276,892
Mexico		48,099		6,785		49,755		4,110		52,203		4,223
Brazil		52,982		9,439		59,277		14,239		44,723		15,340
Intercompany eliminations		-		-		-		-		-		-
Total	$	1,571,853	$	348,310	$	1,382,474	$	323,476	$	1,319,046	$	296,455

Summary of the Approximate Composition of Revenues, by Product Category

The following is a summary of the approximate composition of the Company’s revenues, by product category (in thousands):

	Year  Ended December 31,
	2018			2017			2016
Body structures and assemblies		47	%		44	%		46	%
Chassis, lower vehicle structures, and suspension components		36	%		34	%		30	%
Complex body-in-white assemblies		17	%		22	%		24	%
Total		100	%		100	%		100	%

Summary of Revenue by Major Customers

The following table presents a summary of customers that accounted for 10% or more of consolidated revenues in any of the three years ended December 31:

	2018			2017			2016
Ford		47	%		51	%		47	%
Fiat - Chrysler		22	%		18	%		21	%
Nissan		12	%		15	%		12	%

XML

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2018

Commitments and Contingencies [Abstract]

Schedule of Future Minimum Lease Payments for Capital and Operating Leases

Future minimum operating lease payments at December 31, 2018 are as follows (in thousands):

	Operating
Year	Leases
2019	$	42,261
2020		49,615
2021		47,385
2022		45,831
2023		43,139
Thereafter		111,947
Total future lease payments	$	340,178

XML

Change in Working Capital and Other Operating Items (Tables)

12 Months Ended

Dec. 31, 2018

Change in Working Capital and Other Operating Items Abstract]

Summary of Sources/(Uses) of Cash Provided by Changes in Working Capital and Other Operating Items

The following table summarizes the sources / (uses) of cash provided by changes in working capital and other operating items for continuing operations (in thousands):

	Year  Ended December 31,
	2018		2017		2016
Accounts receivable	$	10,830	$	(21,357)	$	32,950
Inventories		(11,939)		(3,808)		(4,067)
Prepaid tooling and other current assets		16,435		20,729		(17,868)
Accounts payable and accrued liabilities		(23,960)		24,780		14,590
Other assets and liabilities		(20,862)		(15,936)		(11,997)
Change in working capital and other operating items	$	(29,496)	$	4,408	$	13,608

XML

Quarterly Financial Data (Tables)

12 Months Ended

Dec. 31, 2018

Quarterly Financial Data [Abstract]

Schedule of Quarterly Financial Information

The following table summarizes select quarterly financial data (in thousands):

							Net Income/(Loss)		Diluted
							Attributable		Earnings/
					Net Income/		to Tower		(Loss) per
Quarter	Net Sales		Gross Profit		(Loss)		International, Inc.		Share
2018
1st	$	407,233	$	48,184	$	17,300	$	17,300	$	0.83
2nd		395,929		50,822		22,376		22,376		1.07
3rd		391,421		52,166		22,580		22,580		1.07
4th(a)		377,270		42,726		(13,356)		(13,356)		(0.64)
Full Year	$	1,571,853	$	193,898	$	48,900	$	48,900		2.33
2017
1st	$	352,450	$	42,715	$	17,413	$	17,345	$	0.83
2nd		344,821		48,130		19,258		19,216		0.92
3rd(b)		330,397		47,179		14,931		14,931		0.72
4th(c)		354,806		51,139		(3,867)		(3,867)		(0.19)
Full Year	$	1,382,474	$	189,163	$	47,735	$	47,625		2.29

(a) During the fourth quarter of 2018, net income included a fair value impairment charge in discontinued operations of $44 million and a deferred tax benefit of $14.4 million to release the valuation allowance in Brazil.

(b) During the third quarter of 2017, net income included a $2.4 million deferred tax expense to establish a valuation allowance on certain European deferred tax assets.

(c) During the fourth quarter of 2017, net income included a deferred tax expense of $27.2 million related to the revaluation of U.S. deferred tax assets due to a reduction in the federal income tax rate as a result of U.S. Tax Reform.

XML

Basis of Presentation and Organizational History (Narrative) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Mar. 31, 2019	Dec. 31, 2017
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Initial public offering period	On October 14, 2010, the Company completed its initial public offering
Deferred finance costs, net	$ 5,960		$ 8,098
ROU asset and liability associated with finance leases	$ 100,000
Accounting Standards Update 2016-02 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Finance Lease, Liability, Statement of Financial Position [Extensible List]	us-gaap:FinanceLeaseLiability		us-gaap:FinanceLeaseLiability
ROU asset and liability associated with finance leases	$ 157,000		$ 72,000
Accounting Standards Update 2016-02 [Member] | Scenario, Forecast [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Effect of new ASU adoption		$ 6,000
Accounting Standards Update 2017-12 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative effect adjustment of adoption of new ASU	5,100
Tax effect adjustments	$ 1,300

XML

Significant Accounting Policies (Narrative) (Details) $ in Thousands	3 Months Ended		12 Months Ended
	Dec. 31, 2018 USD ($)	Sep. 30, 2015 USD ($)	Dec. 31, 2018 USD ($) segment	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Depreciation			$ 54,400	$ 50,000	$ 47,400
Amortization of intangible assets			435	443	449
Long-term Debt, Total	$ 298,605		298,605	350,755
Long-term debt and capital lease obligations	304,600		304,600	358,900
Long-term debt, fair value	290,100		290,100	361,500
U.S. Tax Reform -Deferred Tax Asset Revaluation				27,163
Accounts Receivable, Net, Current, Total	113,128		113,128	123,958
Fair value adjustments on assets					15,000
Interest costs capitalized			1,700	3,300	2,200
Goodwill	7,453		$ 7,453	$ 7,424	7,090
Federal statutory tax rate			21.00%	35.00%
Number of reportable segments | segment			1
Number of operating segments | segment			2
Long term debt maturities repayments of principal total	304,565		$ 304,565
Subsidiaries [Member] | Hamsa [Member]
Finite-lived intangible assets acquired		$ 3,600
Finite-lived intangible assets, amortization method			straight-line basis
Finite-lived intangible assets, amortization period			7 years
Foreign Exchange Option [Member] | Net Investment Hedging [Member]
Net investment hedge, liability	19,900		$ 19,900	$ 27,000
Interest Rate Swap [Member] | Net Investment Hedging [Member]
Net investment hedge, liability	5,000		5,000	8,900
Brazil [Member] | Subsidiaries [Member]
Long-term Debt, Total	1,000		1,000
Tower Automotive Holdings Europe B.V [Member]
Goodwill, impairment loss			36,000
Fair value adjustments on assets	44,000		44,000
Goodwill impairment loss			36,000
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | Brazil Operations [Member]
Asset held for sale, carrying amount					33,600
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | Ningbo Joint Venture [Member]
Asset held for sale, carrying amount				4,600	7,700
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | Fair Value, Measurements, Nonrecurring [Member] | Europe [Member]
Asset held for sale, carrying amount	307,700		307,700
Gain (loss) on disposition of assets			(44,000)
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | Fair Value, Measurements, Nonrecurring [Member] | Brazil Operations [Member]
Gain (loss) on disposition of assets					(15,000)
Fair value adjustments on assets					15,000
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | Fair Value, Measurements, Nonrecurring [Member] | Ningbo Joint Venture [Member]
Gain (loss) on disposition of assets				(300)	(3,100)
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 3 [Member] | Europe [Member]
Assets, fair value disclosure	263,700		263,700
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 3 [Member] | Brazil Operations [Member]
Long-lived assets held for sale					18,600
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 3 [Member] | Ningbo Joint Venture [Member]
Long-lived assets held for sale	$ 263,700		$ 263,700	$ 4,300	$ 4,600

XML

Significant Accounting Policies (Schedule of Inventories) (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Significant Accounting Policies [Abstract]
Raw materials	$ 29,752	$ 23,566
Work in process	13,008	12,914
Finished goods	26,674	21,015
Total inventory	$ 69,434	$ 57,495

XML

Significant Accounting Policies (Components of Capitalized Tooling Costs) (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Significant Accounting Policies [Abstract]
Customer-owned tooling, net	$ 14,758	$ 33,332
Company-owned tooling	507	277
Total tooling, net	$ 15,265	$ 33,609

XML

Significant Accounting Policies (Estimated Useful Lives of Property, Plant and Equipment) (Details)	12 Months Ended
	Dec. 31, 2018
Minimum [Member] | Building and Building Improvements [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life	32 years
Minimum [Member] | Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life	3 years
Maximum [Member] | Building and Building Improvements [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life	40 years
Maximum [Member] | Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life	10 years
Maximum [Member] | Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life	20 years

XML

Significant Accounting Policies (Schedule of Property, Plant and Equipment) (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Property, plant, and equipment, gross	$ 842,497	$ 783,200
Less: accumulated depreciation	(494,694)	(460,001)
Property, plant, and equipment, net	347,803	323,199
Land [Member]
Property, plant, and equipment, gross	5,329	7,383
Building and Building Improvements [Member]
Property, plant, and equipment, gross	106,594	118,893
Machinery and Equipment [Member]
Property, plant, and equipment, gross	656,084	623,291
Construction in Progress [Member]
Property, plant, and equipment, gross	$ 74,490	$ 33,633

XML

Significant Accounting Policies (Schedule of Asset Retirement Obligations) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Significant Accounting Policies [Abstract]
Beginning Balance	$ 16,687	$ 16,676
Liabilities incurred	1,378	3,698
Accretion expense	1,182	1,338
Change in estimate	(4,751)	(5,025)
Ending Balance	$ 14,496	$ 16,687

XML

Significant Accounting Policies (Schedule of Goodwill) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Significant Accounting Policies [Abstract]
Balance beginning	$ 7,424	$ 7,090
Currency translation adjustment	29	334
Balance ending	$ 7,453	$ 7,424

XML

Significant Accounting Policies (Fair Value Measurements, Nonrecurring) (Details) - Fair Value, Measurements, Nonrecurring [Member] - Disposal Group, Held-for-sale, Not Discontinued Operations [Member] - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Brazil Operations [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Gain (loss) on disposition of property plant equipment			$ (15.0)
Brazil Operations [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets held-for-sale, long lived, fair value disclosure			18.6
Ningbo Joint Venture [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Gain (loss) on disposition of property plant equipment	$ (44.0)	$ (0.3)	(3.1)
Ningbo Joint Venture [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets held-for-sale, long lived, fair value disclosure	$ 263.7	$ 4.3	$ 4.6

XML

Significant Accounting Policies (Summary of Vehicle Platform Mix as a Percentage of Revenue) (Details) - Sales Revenue, Net [Member]	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Percentage of consolidated revenue	100.00%	100.00%	100.00%
Customer Concentration Risk [Member]
Percentage of consolidated revenue	100.00%
Product Concentration Risk [Member]
Percentage of consolidated revenue	100.00%
Light Trucks [Member] | Product Concentration Risk [Member]
Percentage of consolidated revenue	86.00%
SUV (Sport Utility Vehicles) [Member] | Product Concentration Risk [Member]
Percentage of consolidated revenue	53.00%
Pickup [Member] | Product Concentration Risk [Member]
Percentage of consolidated revenue	27.00%
Van [Member] | Product Concentration Risk [Member]
Percentage of consolidated revenue	4.00%
MPV (Multi-Purpose Vehicles) [Member] | Product Concentration Risk [Member]
Percentage of consolidated revenue	2.00%
Large Car [Member] | Product Concentration Risk [Member]
Percentage of consolidated revenue	7.00%
Small Car [Member] | Product Concentration Risk [Member]
Percentage of consolidated revenue	5.00%
All Other [Member] | Product Concentration Risk [Member]
Percentage of consolidated revenue	2.00%
Ford [Member]
Percentage of consolidated revenue	47.00%	51.00%	47.00%
Ford [Member] | Customer Concentration Risk [Member]
Percentage of consolidated revenue	47.00%
Fiat - Chrysler [Member]
Percentage of consolidated revenue	22.00%	18.00%	21.00%
Fiat - Chrysler [Member] | Customer Concentration Risk [Member]
Percentage of consolidated revenue	22.00%
Nissan [Member]
Percentage of consolidated revenue	12.00%	15.00%	12.00%
Nissan [Member] | Customer Concentration Risk [Member]
Percentage of consolidated revenue	12.00%
Toyota [Member] | Customer Concentration Risk [Member]
Percentage of consolidated revenue	8.00%
BMW [Member] | Customer Concentration Risk [Member]
Percentage of consolidated revenue	5.00%
Volkswagen Group [Member] | Customer Concentration Risk [Member]
Percentage of consolidated revenue	2.00%
Honda [Member] | Customer Concentration Risk [Member]
Percentage of consolidated revenue	2.00%
Other [Member] | Customer Concentration Risk [Member]
Percentage of consolidated revenue	2.00%

XML

Significant Accounting Policies (Components of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Significant Accounting Policies [Abstract]
Foreign currency translation adjustments, net of tax expense of $2.9 million and $0.1 million	$ (36,531)	$ (24,861)
Defined benefit plans, net of tax expense of $14.9 million and $15 million	(38,185)	(38,249)
Unrealized loss on qualifying cash flow hedge, net of tax (benefit) of ($1.3 million) and ($2.8 million)	(204)	(4,698)
Accumulated other comprehensive loss	(74,920)	(67,808)
Foreign currency translation adjustment, tax expense / (benefit)	2,900	100
Defined benefit plans, tax	14,900	15,000
Unrealized gain / (loss) on qualifying cash flow hedge, tax	$ (1,300)	$ (2,800)

XML

Significant Accounting Policies (Schedule of Amounts Recognized in Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Unrealized Losses on Qualifying Cash Flow Hedges, Beginning Balance	$ (4,698)
Unrealized Losses on Qualifying Cash Flow Hedges, Other comprehensive income / loss before reclassification	3,760	$ (4,698)
Unrealized Losses on Qualifying Cash Flow Hedges, Ending Balance	(204)	(4,698)
Defined Benefit Plan, beginning balance	(38,249)
Defined Benefit Plans, Other comprehensive income / (loss) before reclassification	64	723	$ 1,030
Defined Benefit Plan, ending balance	(38,185)	(38,249)
Foreign Currency Translation Adjustments, beginning balance	(24,861)
Foreign Currency Translation Adjustments, Other comprehensive income / (loss) before reclassification	(14,784)	19,602	(4,401)
Foreign Currency Translation Adjustments, ending balance	(36,531)	(24,861)
Beginning Balance, Total	(67,808)
Other comprehensive income / (loss), net of tax, Total	(10,960)	15,627	(3,371)
Ending balance, Total	(74,920)	(67,808)
Tower International [Member]
Unrealized Losses on Qualifying Cash Flow Hedges, Beginning Balance	(4,698)
Unrealized Losses on Qualifying Cash Flow Hedges, Other comprehensive income / loss before reclassification	3,760	(4,698)
Unrealized Losses on Qualifying Cash Flow Hedges, Net current-period other comprehensive income / (loss)	734
Unrealized Losses on Qualifying Cash Flow Hedges, Net current-period other comprehensive income / (loss)	4,494	(4,698)
Unrealized Losses on Qualifying Cash Flow Hedges, Ending Balance	(204)	(4,698)
Defined Benefit Plan, beginning balance	(38,249)	(38,972)
Defined Benefit Plans, Other comprehensive income / (loss) before reclassification	64	723
Defined Benefit Plan, Net current-period other comprehensive income	64	723
Defined Benefit Plan, ending balance	(38,185)	(38,249)	(38,972)
Foreign Currency Translation Adjustments, beginning balance	(24,861)	(44,411)
Foreign Currency Translation Adjustments, Other comprehensive income / (loss) before reclassification	(14,784)	19,550
Foreign Currency Translation Adjustments, Amounts reclassified from accumulated other comprehensive income	3,114
Foreign Currency Translation Adjustments, Net current-period other comprehensive income / (loss)	(11,670)	19,550
Foreign Currency Translation Adjustments, ending balance	(36,531)	(24,861)	(44,411)
Beginning Balance, Total	(67,808)	(83,383)
Other comprehensive income / (loss), net of tax, Total	(10,960)	15,575	(2,891)
Amounts reclassified from accumulated other comprehensive income/ (loss), Tota	3,848
Other comprehensive income / (loss), net of tax, Total	(7,112)	15,575
Ending balance, Total	$ (74,920)	$ (67,808)	$ (83,383)

XML

Restructuring and Asset Impairment Charges (Narrative) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Restructuring and Asset Impairment Charges [Abstract]
Payments for restructuring	$ 4,421	$ 3,989
Fair value adjustments on assets			$ 15,000

XML

Restructuring and Asset Impairment Charges (Schedule of Restructuring Charges and Asset Impairment Charges) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Restructuring and Asset Impairment Charges [Abstract]
Employee termination costs	$ 3,059	$ 7,862	$ 1,335
Other exit costs	321	1,236	4,578
Fair value adjustments on assets			15,000
Total restructuring expense	$ 3,380	$ 9,098	$ 20,913

XML

Restructuring and Asset Impairment Charges (Schedule of Restructuring Liability by Segment) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Restructuring and Asset Impairment Charges [Abstract]
Beginning Balance	$ 4,070	$ 197
Payments	(4,421)	(3,989)
Increase in liability	3,059	7,862
Ending Balance	$ 2,708	$ 4,070

XML

Discontinued Operations and Assets Held for Sale (Narrative) (Details) $ in Thousands, € in Millions		1 Months Ended	3 Months Ended					12 Months Ended
	Oct. 31, 2016 USD ($)	Oct. 31, 2016 USD ($)	Dec. 31, 2018 EUR (€)	Dec. 31, 2018 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from disposition of joint venture, net								$ 4,314	$ 15,944	$ 4,546
Fair value adjustments on assets										15,000
Dividends								10,088	$ 9,221	8,570
Tower Automotive Holdings Europe B.V [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Stock purchase agreement, purchase price | €			€ 255
Equity method investment purchase price adjustments | €			€ 45
Fair value adjustments on assets				$ 44,000				44,000
Tower Automotive Holdings Europe B.V [Member] | Scenario, Plan [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from sale of assets								$ 250,000
Ningbo Joint Venture [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from disposition of joint venture, net		$ 4,000			$ 4,300
Tower Automotive (Wuhu) Company Limited and Tower (Ningbo) DIT Automotive Productions Company Limited [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from disposition of joint venture, net	$ 21,000						$ 4,500
Proceeds from issuance or sale of equity						$ 15,900
Gain (loss) on sale of equity investments						$ 2,600
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | Fair Value, Measurements, Nonrecurring [Member] | Brazil Operations [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Fair value adjustments on assets										$ 15,000

XML

Discontinued Operations and Assets Held for Sale (Financial Information of the Discontinued Operations) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Discontinued Operations and Assets Held for Sale [Abstract]
Revenues	$ 650,294	$ 683,487	$ 714,381
Loss from sale of discontinued operations	(44,000)	(2,896)	(3,100)
Income / (loss) from discontinued operations:
Income before provision for income taxes	(20,968)	19,769	36,568
Provision for income taxes	7,251	11,737	10,992
Income / (loss) from discontinued operations	$ (28,219)	$ 8,032	$ 25,576

XML

Discontinued Operations and Assets Held for Sale (Disclosure of Long Lived Assets Held-for-sale) (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
ASSETS
Current assets	$ 175,774	$ 222,505
Property, plant, and equipment, net	239,023	226,312
Other assets, net	7,072	16,125
Goodwill	17,744	56,241
Fair value adjustment	(8,000)	(3,400)
Total assets held for sale	431,613	517,783
LIABILITIES
Short-term debt and current maturities of capital lease obligations	14,890	38,383
Accounts payable and accrued liabilities	142,638	161,724
Total current liabilities	157,528	200,107
Long-term debt, net of current maturities
Other non-current liabilities	10,354	10,798
Total non-current liabilities	10,354	10,798
Total liabilities held for sale	$ 167,882	$ 210,905

XML

Debt (Narrative) (Details) R$ in Millions				12 Months Ended
	Jul. 27, 2018 USD ($)	Mar. 07, 2017 USD ($)	Jan. 15, 2016 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2018 BRL (R$)	Dec. 31, 2018 USD ($)	Sep. 17, 2014 USD ($)	Jan. 31, 2014 USD ($)
Debt [Line Items]
Line of credit facility, covenant compliance				As of December 31, 2018, the Company was in compliance with all financial covenants that govern its credit agreements.
Amortization of debt issuance costs				$ 2,100,000	$ 1,900,000	$ 2,500,000
Debt issuance costs					8,098,000			$ 5,960,000
Total debt					350,755,000			298,605,000
Letter of Credit [Member]
Debt [Line Items]
Long-term line of credit								8,200,000
Term Loans [Member]
Debt [Line Items]
Long-term debt, gross		$ 358,900,000								$ 450,000,000
Line of credit facility, expiration date		Mar. 07, 2024
Debt instrument, interest rate terms				the Term Loans bear interest at (i) the Alternate Base Rate plus a margin of 1.75% or (ii) the Adjusted LIBO Rate (calculated by multiplying the applicable LIBOR rate by a statutory reserve rate) plus a margin of 2.75%
Term Loans [Member] | Base Rate [Member]
Debt [Line Items]
Debt instrument, basis spread on variable rate		1.75%
Term Loans [Member] | Adjusted London Interbank Offered Rate [Member]
Debt [Line Items]
Debt instrument, basis spread on variable rate		2.75%
Term Loan Credit Facility [Member]
Debt [Line Items]
Repayments of debt	$ 50,000,000		$ 50,000,000
Debt instrument, unamortized discount					2,288,000			$ 1,653,000
Debt instrument, interest rate, basis for effective rate							5.19%	5.19%
Amortization of debt issuance costs	$ 1,000,000		$ 700,000
Total debt					356,501,000			$ 303,521,000
Term Loan Credit Facility [Member] | Scenario, Plan [Member]
Debt [Line Items]
Repayments of debt				$ 50,000,000
Additional Term Loan [Member]
Debt [Line Items]
Long-term debt, gross										$ 33,000,000
Revolving Credit Facility [Member]
Debt [Line Items]
Line of credit facility, maximum borrowing capacity									$ 200,000,000
Debt instrument, maturity date				Mar. 07, 2022
Line of credit facility, unused capacity, commitment fee percentage				0.50%
Line of credit facility, current borrowing capacity		$ 200,000,000						191,800,000
Long-term line of credit								0
Revolving Credit Facility [Member] | Letter of Credit [Member]
Debt [Line Items]
Line of credit facility, maximum borrowing capacity		$ 30,000,000							$ 50,000,000
Revolving Credit Facility [Member] | Base Rate [Member]
Debt [Line Items]
Debt instrument, basis spread on variable rate				1.00%
Revolving Credit Facility [Member] | LIBOR [Member]
Debt [Line Items]
Debt instrument, basis spread on variable rate				2.00%
Revolving Credit Facility [Member] | Minimum [Member]
Debt [Line Items]
Consolidated adjusted EBITDA to consolidated interest charges ratio				2.75
Revolving Credit Facility [Member] | Maximum [Member]
Debt [Line Items]
Total net debt to consolidated adjusted EBITDA ratio				3.50
Subsidiaries [Member] | Brazil [Member]
Debt [Line Items]
Total debt								1,000,000
Subsidiaries [Member] | Foreign Line of Credit [Member]
Debt [Line Items]
Line of credit facility, interest rate				7.28%
Total debt					$ 2,352,000		R$ 4.1	$ 1,044,000
Subsidiaries [Member] | Foreign Line of Credit [Member] | Minimum [Member]
Debt [Line Items]
Line of credit facility, expiration date				Nov. 01, 2019
Line of credit facility, interest rate				5.50%
Subsidiaries [Member] | Foreign Line of Credit [Member] | Maximum [Member]
Debt [Line Items]
Line of credit facility, expiration date				Jul. 01, 2022
Line of credit facility, interest rate				8.70%

XML

Debt (Schedule of Long-term Debt) (Details) $ in Thousands, R$ in Millions	Dec. 31, 2018 BRL (R$)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Debt Instrument [Line Items]
Long-term Debt, Total		$ 298,605	$ 350,755
Less: Current maturities of debts (excluding capital leases)		(4,148)	(4,744)
Total long-term debt		294,457	346,011
Debt issue costs		(5,960)	(8,098)
Term Loan Credit Facility [Member]
Debt Instrument [Line Items]
Long-term Debt, Total		303,521	356,501
Debt instrument, unamortized discount		1,653	2,288
Amended Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Long-term Debt, Total
Subsidiaries [Member] | Foreign Line of Credit [Member]
Debt Instrument [Line Items]
Long-term Debt, Total	R$ 4.1	$ 1,044	$ 2,352

XML

Debt (Schedule of Future Maturities of Long-term Debt) (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Debt [Abstract]
2019	$ 4,148
2020	3,894
2021	3,806
2022	3,656
2023	3,615
Thereafter	285,446
Total	304,565
Debt issue costs	(5,960)	$ (8,098)
Long-term Debt, Total	$ 298,605	$ 350,755

XML

Debt (Schedule of Debt - Other Foreign Subsidiary) (Details) - 12 months ended Dec. 31, 2018 $ in Thousands, R$ in Millions	BRL (R$)	USD ($)
Line of Credit Facility [Line Items]
Balance at December 31, 2017		$ 350,755
Balance at December 31, 2018		298,605
Foreign Line of Credit [Member] | Subsidiaries [Member]
Line of Credit Facility [Line Items]
Balance at December 31, 2017		2,352
Maturities of indebtedness		(963)
Change in borrowings on credit facilities, net
Foreign exchange impact		(345)
Balance at December 31, 2018	R$ 4.1	$ 1,044

XML

Derivative Financial Instruments (Narrative) (Details) $ in Thousands, € in Millions							12 Months Ended
	Jul. 27, 2018 USD ($)	Aug. 31, 2017 USD ($)	Mar. 07, 2017 EUR (€) $ / item	Jan. 15, 2016 USD ($)	Jan. 23, 2015 EUR (€)	Oct. 17, 2014 EUR (€) $ / item	Dec. 31, 2018 USD ($) $ / item	Dec. 31, 2017 USD ($) $ / item	Dec. 31, 2016 USD ($)	Mar. 07, 2017 USD ($) $ / item	Dec. 31, 2015 EUR (€)	Dec. 31, 2015 USD ($)	Oct. 17, 2014 USD ($) $ / item
Foreign currency exchange rate, remeasurement								1.1457
Accumulated other comprehensive income							$ (204)	$ (4,698)
Interest expense							19,856	$ 10,882	$ 18,259
Interest Rate Swap [Member]
Derivative, notional amount		$ 186,100								$ 186,100	€ 178.0	$ 186,100	$ 200,000
Derivative, maturity date		Mar. 07, 2024	Mar. 07, 2024			Apr. 16, 2020
Derivative, fixed interest rate		5.878%	5.628%			5.09%				5.628%			5.09%
Accumulated other comprehensive income							5,800
Interest expense							$ 1,100
Currency Swap [Member]
Derivative, notional amount | €			€ 178.0		€ 178.0	€ 157.1
Derivative, forward exchange strike price | $ / item			1.04795			1.2733	1.1457	1.2009		1.04795			1.2733
Derivative, maturity date			Mar. 07, 2024		Apr. 16, 2020		Apr. 16, 2020
Derivative, fixed interest rate			2.85%		3.40%					2.85%
Term Loan Credit Facility [Member]
Repayments of debt	$ 50,000			$ 50,000

XML

Derivative Financial Instruments (Schedule of Derivative Instruments in Statement of Financial Position, Fair Value) (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Interest Rate Swap [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative liability	$ 5,034	$ 8,918
Net Investment Hedging [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative liability	$ 19,903	$ 27,001

XML

Derivative Financial Instruments (Derivative Instruments, Gain (Loss) -Deferred Gain in AOCI) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Total deferred gain / (loss) in AOCI	$ 19,553	$ 2,312
Interest Rate Swap [Member]
Total deferred gain / (loss) in AOCI	(1,546)	(7,537)
Net Investment Hedging [Member]
Total deferred gain / (loss) in AOCI	$ 21,099	$ 9,849

XML

Derivative Financial Instruments (Derivative Instrument Held and Expense Recorded) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Derivative Financial Instruments[Abstract]
Interest expense	$ 19,856	$ 10,882	$ 18,259
Effect of hedging	$ (1,563)

XML

Income Taxes (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Deferred tax assets, valuation allowance	$ 48,712	$ 48,712	$ 63,300
U.S. Tax Reform -Deferred Tax Asset Revaluation			27,163
Valuation allowance, deferred tax asset, explanation of change		The valuation allowance decreased $14.6 million during 2018 related primarily to a valuation allowance release of $14.4 million due to historical and projected future profitability at the Company's Brazilian operations.
Valuation allowance, deferred tax asset, increase (decrease), amount		$ 14,600
Unrecognized tax benefits that would impact effective tax rate	4,500	4,500	5,000	$ 3,700
Unrecognized tax benefits that would result in adjustments to other tax accounts	4,400	$ 4,400	$ 4,900	$ 3,600
Federal statutory tax rate		21.00%	35.00%
Income tax examination, description		During 2017, the Company completed an IRS audit for the 2015 tax year that did not result in any tax adjustments. During 2015, the Company concluded an IRS audit for the tax years 2011 through 2013. As of December 31, 2018, there are no further IRS audits scheduled. The U.S. statute of limitations is still open for tax years 2008, 2009, 2010, and 2013, to the extent of the losses generated in those years. The statute of limitations is closed for the 2011, 2012, and 2014 tax years
Domestic [Member]
Deferred tax assets, federal NOL carryforwards	52,000	$ 52,000
Foreign [Member]
Deferred tax assets, federal research and foreign tax credit	46,300	46,300
State and Local Jurisdiction [Member]
Tax credit carryforwards	24,400	24,400
Deferred tax assets, state NOL carryforwards	3,000	3,000
Subsidiaries [Member]
Valuation allowance, deferred tax asset, increase (decrease), amount	14,400	14,400
Deferred tax assets, foreign NOL carryforwards	116,300	$ 116,300
Subsidiaries [Member] | Netherlands [Member]
Operating loss carryforwards, expiration date		Dec. 31, 2019
Deferred tax assets, foreign NOL carryforwards	87,700	$ 87,700
Subsidiaries [Member] | Brazil [Member]
Deferred tax assets, foreign NOL carryforwards	$ 22,100	$ 22,100
Deferred tax assets operating loss carryforwards, utilization rate		30.00%
Minimum [Member] | Domestic [Member]
Operating loss carryforwards, expiration date		Dec. 31, 2030
Minimum [Member] | State and Local Jurisdiction [Member]
Operating loss carryforwards, expiration date		Dec. 31, 2019
Maximum [Member] | Domestic [Member]
Operating loss carryforwards, expiration date		Dec. 31, 2033
Maximum [Member] | State and Local Jurisdiction [Member]
Operating loss carryforwards, expiration date		Dec. 31, 2036

XML

Income Taxes (Summary of Income / (Loss) Before Provision for Income Taxes and Noncontrolling Interests) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Total	$ 78,378	$ 83,792	$ 22,472
Domestic [Member]
Total	73,274	72,967	29,454
Foreign [Member]
Total	$ 5,104	$ 10,825	$ (6,982)

XML

Income Taxes (Provision / (Benefit) for Income Taxes) (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Current:
Domestic - Federal			$ (461)	$ 352	$ 152
Domestic - State			2,147	(364)	925
Foreign			2,907	2,399	1,144
Total			4,593	2,387	2,221
Deferred and other:
Domestic - Federal			10,784	40,819	3,912
Domestic - State			1,779	637	807
Foreign			(15,897)	246	1,828
Total	$ 27,200	$ 2,400	(3,334)	41,702	6,547
Total income tax expense/(benefit)			$ 1,259	$ 44,089	$ 8,768

XML

Income Taxes (Reconciliation of Income Tax Expense from Continuing Operations and the U.S. Federal Statutory Income Tax Expense) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Income Taxes [Abstract]
Taxes at U.S. federal statutory rate	$ 16,459	$ 29,327	$ 7,865
State tax expense	3,112	88	1,297
Foreign tax rate differential	544	(522)	316
Valuation allowance	(11,365)	(1,380)	6,502
Permanent differences	724	(1,340)	235
U.S. Tax Reform -Deferred Tax Asset Revaluation		27,163
Increase/(decrease) in uncertain tax positions	(393)	1,236	779
Tax credits	(8,191)	(10,365)	(7,855)
Other	369	(118)	(371)
Total income tax expense/(benefit)	$ 1,259	$ 44,089	$ 8,768

XML

Income Taxes (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Deferred income tax assets are attributable to:
Net operating loss carryforwards and tax credits	$ 108,720	$ 113,865
Non-deductible reserves and other accruals	26,881	25,323
Accrued pension and postretirement benefit obligations	12,652	13,140
Hedging	6,165	8,976
Capitalized leases	2,375	2,841
Other	1,748
Total gross deferred income tax assets	158,541	164,145
Less: valuation allowance	(48,712)	(63,300)
Net deferred income tax assets	109,829	100,845
Deferred income tax liabilities are attributable to:
Long lived assets	(18,394)	(6,115)
Prepaid tooling development costs	(3,110)	(7,784)
Prepaid Expense	(5,480)	(1,619)
Deferred cancellation of indebtedness income		(2,236)
Other	(13)	(1,014)
Total gross deferred income tax liabilities	(26,997)	(18,768)
Net deferred income tax asset	$ 82,832	$ 82,077

XML

Income Taxes (Reconciliation of the Beginning and Ending Amounts of Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Income Taxes [Abstract]
Unrecognized tax benefit - January 1	$ 4,973	$ 3,682	$ 2,880
Increase in prior year tax positions		247
Decrease in prior year tax positions			(164)
Increase in current year tax positions	188	1,039	1,000
Audit settlements	(638)
Lapse in statute of limitations			(25)
Foreign currency translation	1	5
Foreign currency translation			(9)
Liabilities held for sale
Total	$ 4,524	$ 4,973	$ 3,682

XML

Employee Benefit Plans (Narrative ) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Defined Benefit Plan Disclosure [Line Items]
Defined benefit plans, estimated future employer contributions in next fiscal year	$ 5.9
Defined benefit plan, payment 2019	16.7
Defined benefit plan, payment 2020	16.7
Defined benefit plan, payment 2021	16.7
Defined benefit plan, payment 2022	16.7
Defined benefit plan, payment 2023	16.1
Defined benefit plan, payment, aggregate	82.9
Defined benefit plan, payment, 2024 through 2028, aggregate	74.4
Defined benefit plan, accumulated benefit obligation	221.0	$ 249.0
Defined contribution plan, employer discretionary contribution amount	$ 6.8	$ 6.2	$ 5.6
Defined benefit plan, assumptions used calculating net periodic benefit cost, expected long-term return on assets	7.40%	7.40%	7.40%
Discount rate	4.09%	3.42%
Pension Plan, Defined Benefit [Member]
Defined Benefit Plan Disclosure [Line Items]
Discount rate	3.45%	3.91%	4.10%
Other Postretirement Benefit Plan, Defined Benefit [Member]
Defined Benefit Plan Disclosure [Line Items]
Discount rate	4.14%	3.47%
Postretirement Life Insurance [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined benefit plan, payment 2019	$ 0.6
Defined benefit plan, payment 2020	0.6
Defined benefit plan, payment 2021	0.6
Defined benefit plan, payment 2022	1.0
Defined benefit plan, payment 2023	1.1
Defined benefit plan, payment, aggregate	3.9
Defined benefit plan, payment, 2024 through 2028, aggregate	$ 5.3

XML

Employee Benefit Plans (Reconciliation of the Changes in the Fair Value of Pension Plan Assets and the Change in the Projected Benefit Obligation) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Reconciliation of fair value of Pension Plan assets:
Fair value of assets, beginning of period	$ 201,522	$ 186,473
Actual return	(12,070)	28,660
Employer contributions	6,019	8,600
Expenses paid from Pension Plan assets	(3,341)	(3,491)
Benefits paid	(16,953)	(18,720)
Fair value of assets, end of period	175,177	201,522
Change in projected benefit obligation:
Projected benefit obligation, beginning of period	249,335	248,100
Service cost	17	19
Interest cost	7,155	7,493
Actuarial loss/(gain)	(18,615)	12,443
Benefits paid	(16,953)	(18,720)
Projected benefit obligation, end of period	220,939	249,335
Funded status of the Pension Plan	$ (45,762)	$ (47,813)

XML

Employee Benefit Plans (Components of Net Periodic Pension Benefit and Other Post-retirement Benefit Costs) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 17	$ 19
Interest cost	7,155	7,493
Amortization of prior service credit	95	95	$ 95
Net periodic benefit cost	2,403	(2,245)	6,324
Pension Plan, Defined Benefit [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	17	19	21
Interest cost	7,155	7,493	7,708
Expected return on plan assets	(10,562)	(10,329)	(10,316)
Amortization of prior service credit	(95)	(95)	(95)
Actuarial loss	5,234		8,330
Net periodic benefit cost	$ 1,749	$ (2,912)	$ 5,648

XML

Employee Benefit Plans (Schedule of Defined Benefit Plans Recognized in Other Comprehensive Income / (Loss)) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Employee Benefit Plans [Abstract]
Unrecognized gain/(loss)	$ (2,124)	$ 2,398	$ 2,091
Amortization of prior service credit	(95)	(95)	(95)
Amount recognized	$ (2,219)	$ 2,303	$ 1,996

XML

Employee Benefit Plans (Schedule of Defined Benefit Plan Amounts Recognized in Accumulated Other Comprehensive Income Loss) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Employee Benefit Plans [Abstract]
Unrecognized gain/(loss)	$ (24,901)	$ (22,777)
Net prior service credit	1,570	1,665
Deferred tax impact	(13,364)	(13,919)
Accumulated other comprehensive loss	$ (36,695)	$ (35,031)

XML

Employee Benefit Plans (Significant Assumptions Used in Measuring the Company's Projected Benefit Obligation) (Details)	Dec. 31, 2018	Dec. 31, 2017
Employee Benefit Plans [Abstract]
Discount rate	4.09%	3.42%
Annual rate of increase in compensation	4.50%	4.50%

XML

Employee Benefit Plans (Assumptions Used in Determining Net Periodic Benefit) (Details)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Employee Benefit Plans [Abstract]
Discount rate	3.42%	3.84%	4.01%
Expected long-term rate of return on plan assets	7.40%	7.40%	7.40%
Annual rate of increase in compensation	4.50%	4.50%	4.50%

XML

Employee Benefit Plans (Schedule of Allocation of Plan Assets) (Details)	Dec. 31, 2018	Dec. 31, 2017
Defined Benefit Plan Disclosure [Line Items]
Allocations of pension plan assets	100.00%	100.00%
Target allocations of pension plan assets	100.00%
Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Allocations of pension plan assets	43.00%	45.00%
Target allocations of pension plan assets	50.00%
Non-equity Investments [Member]
Defined Benefit Plan Disclosure [Line Items]
Allocations of pension plan assets	12.00%	12.00%
Target allocations of pension plan assets	5.00%
Fixed Income Investments [Member]
Defined Benefit Plan Disclosure [Line Items]
Allocations of pension plan assets	36.00%	34.00%
Target allocations of pension plan assets	40.00%
Cash and Cash Equivalents [Member]
Defined Benefit Plan Disclosure [Line Items]
Allocations of pension plan assets	1.00%	2.00%
Real Estate Investment Funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Allocations of pension plan assets	8.00%	7.00%
Target allocations of pension plan assets	5.00%

XML

Employee Benefit Plans (Summary the Pension Plan Assets Measured at Fair Value) (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	$ 175,177	$ 201,522	$ 186,473
Fair Value, Inputs, Level 1 [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	14,000	18,000
Fair Value, Inputs, Level 2 [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	146,000	170,000
Fair Value, Inputs, Level 3 [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	15,000	14,000
Cash and Cash Equivalents [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	2,000	3,000
Cash and Cash Equivalents [Member] | Fair Value, Inputs, Level 1 [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	2,000	2,000
Cash and Cash Equivalents [Member] | Fair Value, Inputs, Level 2 [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets		1,000
Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	75,000	91,000
Equity Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	75,000	91,000
Mutual Fund [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	21,000	26,000
Mutual Fund [Member] | Fair Value, Inputs, Level 1 [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	12,000	16,000
Mutual Fund [Member] | Fair Value, Inputs, Level 2 [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	9,000	10,000
Corporate Bonds [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	47,000	51,000
Corporate Bonds [Member] | Fair Value, Inputs, Level 2 [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	47,000	51,000
Government Bonds [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	15,000	17,000
Government Bonds [Member] | Fair Value, Inputs, Level 2 [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	15,000	17,000
Real Estate Investment Funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	15,000	14,000
Real Estate Investment Funds [Member] | Fair Value, Inputs, Level 3 [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	$ 15,000	$ 14,000	$ 14,000

XML

Employee Benefit Plans (Pension Plan Assets with Fair Value Measurements Using Significant Unobservable Inputs) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Defined Benefit Plan Disclosure [Line Items]
Fair value of assets, beginning of period	$ 201,522	$ 186,473
Fair value of assets, end of period	175,177	201,522
Real Estate Investment Funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of assets, beginning of period	14,000
Fair value of assets, end of period	15,000	14,000
Fair Value, Inputs, Level 3 [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of assets, beginning of period	14,000
Fair value of assets, end of period	15,000	14,000
Fair Value, Inputs, Level 3 [Member] | Real Estate Investment Funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of assets, beginning of period	14,000	14,000
Return on plan assets held at the reporting date	1,000
Purchases
Redemptions
Fair value of assets, end of period	$ 15,000	$ 14,000

XML

Employee Benefit Plans (Reconciliation of the Changes in the Benefit Obligation and Funded Status of the Life Insurance Plans) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Reconciliation of fair value of life insurance plan assets [Abstract]
Fair value of assets, beginning of period	$ 201,522	$ 186,473
Employer contributions	6,019	8,600
Benefits paid	(16,953)	(18,720)
Fair value of assets, end of period	175,177	201,522	$ 186,473
Change in projected benefit obligation:
Projected benefit obligation, beginning of period	249,335	248,100
Service cost	17	19
Interest cost	7,155	7,493
Actuarial loss/(gain)	(18,615)	12,443
Benefits paid	(16,953)	(18,720)
Projected benefit obligation, end of period	220,939	249,335	248,100
Funded status of the life insurance Plan	(45,762)	(47,813)
Postretirement Life Insurance [Member]
Reconciliation of fair value of life insurance plan assets [Abstract]
Fair value of assets, beginning of period
Employer contributions	729	744
Benefits paid	(729)	(744)
Fair value of assets, end of period
Change in projected benefit obligation:
Projected benefit obligation, beginning of period	16,892	16,200
Service cost	6	5	5
Interest cost	516	530	539
Actuarial loss/(gain)	(2,062)	901
Benefits paid	(729)	(744)
Projected benefit obligation, end of period	14,623	16,892	$ 16,200
Funded status of the life insurance Plan	$ (14,623)	$ (16,892)

XML

Employee Benefit Plans (Components of the Net Periodic Benefit Cost of the Life Insurance Plans) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 17	$ 19
Interest cost	7,155	7,493
Amortization of prior service credit	95	95	$ 95
Net periodic benefit cost	2,403	(2,245)	6,324
Postretirement Life Insurance [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	6	5	5
Interest cost	516	530	539
Amortization of prior service credit	132	132	132
Net periodic benefit cost	$ 654	$ 667	$ 676

XML

Employee Benefit Plans (Amounts Recognized in Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Employee Benefit Plans [Abstract]
Net actuarial gain/(loss)	$ 2,062	$ (901)	$ (393)
Amortization of prior service cost	132	132	132
Amount recognized	$ 2,194	$ (769)	$ (261)

XML

Employee Benefit Plans (Summary of Amounts Included in Accumulated Other Comprehensive Loss Related to Life Insurance Plans) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Defined Benefit Plan Disclosure [Line Items]
Unrecognized gain/(loss)	$ (24,901)	$ (22,777)
Net prior service credit	1,570	1,665
Deferred tax impact	(13,364)	(13,919)
Accumulated other comprehensive loss	(36,695)	(35,031)
Postretirement Life Insurance [Member]
Defined Benefit Plan Disclosure [Line Items]
Unrecognized gain/(loss)	1,388	(674)
Net prior service credit	(1,315)	(1,447)
Deferred tax impact	(1,563)	(1,097)
Accumulated other comprehensive loss	$ (1,490)	$ (3,218)

XML

Earnings per Share ("EPS") (Schedule of Earnings Per Share, Basic and Diluted) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Earnings per Share ("EPS") [Abstract]
Income from continuing operations									$ 77,119	$ 39,703	$ 13,704
Income / (loss) from discontinued operations, net of tax									(28,219)	8,032	25,576
Net income	$ (13,356)	$ 22,580	$ 22,376	$ 17,300	$ (3,867)	$ 14,931	$ 19,258	$ 17,413	48,900	47,735	39,280
Less: Net income attributable to the noncontrolling interests										110	701
Net income / (loss) attributable to Tower International, Inc.	$ (13,356)	$ 22,580	$ 22,376	$ 17,300	$ (3,867)	$ 14,931	$ 19,216	$ 17,345	$ 48,900	$ 47,625	$ 38,579
Basic income / (loss) per share:
Continuing operations									$ 3.75	$ 1.93	$ 0.62
Discontinued operations									(1.38)	0.39	1.23
Net income / (loss) attributable to Tower International, Inc.									$ 2.37	$ 2.32	$ 1.85
Basic weighted average shares outstanding									20,591,674	20,498,668	20,864,321
Diluted income / (loss) per share:
Continuing operations									$ 3.67	$ 1.90	$ 0.61
Discontinued operations									(1.34)	0.39	1.21
Net income attributable to Tower International, Inc.	$ (0.64)	$ 1.07	$ 1.07	$ 0.83	$ (0.19)	$ 0.72	$ 0.92	$ 0.83	$ 2.33	$ 2.29	$ 1.82
Diluted weighted average shares outstanding									20,996,068	20,828,888	21,222,183

XML

Earnings per Share ("EPS") (Schedule of Quarterly Dividends per Common Share) (Details) - $ / shares	3 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016
Earnings per Share ("EPS") [Abstract]
Dividends payable, declaration date	Oct. 18, 2018	Jul. 17, 2018	Apr. 19, 2018	Jan. 26, 2018	Oct. 20, 2017	Jul. 21, 2017	Apr. 21, 2017	Jan. 27, 2017	Oct. 21, 2016	Jul. 22, 2016	Apr. 22, 2016	Jan. 29, 2016
Dividends payable, cash amount	$ 0.13	$ 0.12	$ 0.12	$ 0.12	$ 0.12	$ 0.11	$ 0.11	$ 0.11	$ 0.11	$ 0.10	$ 0.10	$ 0.10
Dividends payable, record date	Nov. 08, 2018	Aug. 09, 2018	May 10, 2018	Feb. 09, 2018	Nov. 10, 2017	Aug. 10, 2017	May 10, 2017	Feb. 10, 2017	Nov. 10, 2016	Aug. 10, 2016	May 10, 2016	Feb. 10, 2016
Dividends payable, payment date	Dec. 07, 2018	Sep. 07, 2018	Jun. 08, 2018	Feb. 28, 2018	Dec. 08, 2017	Sep. 08, 2017	Jun. 09, 2017	Feb. 28, 2017	Dec. 09, 2016	Sep. 09, 2016	Jun. 10, 2016	Feb. 29, 2016

XML

Share-Based and Long-Term Compensation (Narrative) (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Mar. 31, 2019	Jul. 14, 2017	Apr. 25, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding	341,344	365,677	474,468	500,138
Options, exercised	20,178	108,791	25,670
Other than options, nonvested	388,047	213,022	213,522	187,498
Other than option, granted	242,531	106,312	105,468
Other than options, forfeited	5,281	5,335	1,532
Other than options, issued	62,225	101,478	77,912
Deferred compensation, description		Mr. Malcolm retired from the Company on the Retirement Date. The Agreement provided for a $3 million transition bonus, for the successful delivery to Tower's Board of Directors of a comprehensive chief executive officer succession and transition plan, and a $3 million retention bonus. These bonus awards were paid in cash, in the amount of $6.3 million, on July 14, 2017, and fall under the guidance of FASB ASC No. 450, Contingencies.
Share based compensation expense	$ 3,413,000	$ 2,219,000	$ 2,455,000
Other liabilities, noncurrent	$ 84,163,000	$ 94,155,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
President and Chief Executive Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation expense			300,000	$ 1,300,000
Deferred compensation, cash amount						$ 6,300,000
President and Chief Executive Officer [Member] | Transition Bonus [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Deferred compensation, cash amount			3,000,000
President and Chief Executive Officer [Member] | Retention Bonus [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Deferred compensation, cash amount			3,000,000
Equity Incentive Plan 2010 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized for grant							850,000
Number of shares available for grant (in shares)	585,287
Employee Stock Option [Member] | Equity Incentive Plan 2010 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
Expiration period	10 years
Weighted average grant date fair value, model used	Black-Scholes valuation
Stock or unit option plan expense	$ 0	$ 0	0
Options outstanding	341,344
Options, exercised	20,178
Options, exercised, intrinsic value	$ 400,000
Options forfeited or expired	4,155
Options, exercisable, intrinsic value	$ 4,000,000
Restricted Stock Units (RSUs) [Member] | Equity Incentive Plan 2010 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period, other than options	3 years
Restricted stock or unit expense	$ 3,400,000	$ 2,200,000	$ 2,500,000
Unrecognized compensation expense	$ 4,900,000
Unrecognized compensation expense, period of recognition	12 months
Other than options, nonvested	388,047
Other than option, granted	242,531
Other than options, forfeited	5,281
Other than options, vested	62,225	101,478	77,912
Other than options, issued	62,225	101,478	77,912
Other than options, issued, value	$ 1,600,000	$ 2,800,000	$ 1,800,000
Restricted stock, shares issued net of shares for tax withholdings	44,161	74,475	51,499
Stock repurchased during period, value	$ 500,000	$ 800,000	$ 600,000
Stock repurchased during period, shares	18,064	27,003	26,413
Performance Award [Member] | Equity Incentive Plan 2010 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Deferred compensation, expense	$ 4,400,000	$ 2,300,000	$ 7,400,000
Other liabilities	6,400,000
Other liabilities, noncurrent	$ 3,500,000
Subsequent Event [Member] | Performance Award [Member] | Equity Incentive Plan 2010 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Other liabilities, current					$ 2,900,000

XML

Share-Based and Long-Term Compensation (Disclosure of Share-based Compensation Arrangements by Share-based Payment Award) (Details) - $ / shares	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Shares, Outstanding, Beginning	365,677	474,468	500,138
Options Shares, Options exercised or RSUs issued	(20,178)	(108,791)	(25,670)
Options Shares, Forfeited	(4,155)
Options Shares, Outstanding, Ending	341,344	365,677	474,468
Options, Weighted Average Exercise Price, Outstanding, Beginning (in dollars per share)	$ 12.22	$ 12.18	$ 12.17
Options, Weighted Average Exercise Price, Options exercised or RSUs issued (in dollars per share)	12.45	12.07	11.90
Options, Weighted Average Exercise Price, Forfeited (in dollars per share)	12.04
Options, Weighted Average Exercise Price, Outstanding, Ending (in dollars per share)	$ 12.21	$ 12.22	$ 12.18
Restricted Stock Units, Outstanding, Beginning	213,022	213,522	187,498
Other than option, granted	242,531	106,312	105,468
Restricted Stock Units, Options exercised or RSUs issued	(62,225)	(101,478)	(77,912)
Restricted Stock Units, Forfeited	(5,281)	(5,335)	(1,532)
Restricted Stock Units, Outstanding, Ending	388,047	213,022	213,522
Restricted Stock Units, Weighted Average Grant Date Fair Value, Outstanding, Beginning (in dollars per share)	$ 26.30	$ 24.77	$ 23.59
Restricted Stock Units, Weighted Average Grant Date Fair Value, Granted (in dollars per share)	26.35	28.09	23.26
Restricted Stock Units, Weighted Average Grant Date Fair Value, Options exercised or RSUs issued (in dollars per share)	26.32	24.99	19.92
Restricted Stock Units, Weighted Average Grant Date Fair Value, Forfeited (in dollars per share)	26.21	25.47	25.26
Restricted Stock Units, Weighted Average Grant Date Fair Value, Outstanding, Ending (in dollars per share)	$ 26.33	$ 26.30	$ 24.77

XML

Related Party Transactions (Narrative) (Details) - Chery [Member] - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Revenue from related parties	$ 14.8	$ 70.6
Accounts receivable, related parties	$ 0.0

XML

Segment Information (Narrative) (Details)	12 Months Ended
	Dec. 31, 2018 segment
Segment Information [Abstract]
Number of operating segments	2
Number of reportable segments	1

XML

Segment Information (Schedule of Segment Reporting Information, by Segment) (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Segment Information [Abstract]
Revenues (Note 3)	$ 377,270	$ 391,421	$ 395,929	$ 407,233	$ 354,806	$ 330,397	$ 344,821	$ 352,450	$ 1,571,853	$ 1,382,474	$ 1,319,046
Net Income	(13,356)	$ 22,580	$ 22,376	$ 17,300	(3,867)	$ 14,931	$ 19,216	$ 17,345	48,900	47,625	38,579
Capital Expenditures									83,141	67,240	$ 72,194
Total assets	$ 1,170,392				$ 1,260,873				$ 1,170,392	$ 1,260,873

XML

Segment Information (Summary of Revenues and Long-Lived Assets by Geographic Location) (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Segment Reporting Information [Line Items]
Revenues	$ 377,270	$ 391,421	$ 395,929	$ 407,233	$ 354,806	$ 330,397	$ 344,821	$ 352,450	$ 1,571,853	$ 1,382,474	$ 1,319,046
Long-Lived Assets	348,310				323,476				348,310	323,476	296,455
Intercompany Eliminations [Member]
Segment Reporting Information [Line Items]
Revenues
Long-Lived Assets
U.S. [Member]
Segment Reporting Information [Line Items]
Revenues									1,470,772	1,273,442	1,222,120
Long-Lived Assets	332,086				305,127				332,086	305,127	276,892
Mexico [Member]
Segment Reporting Information [Line Items]
Revenues									48,099	49,755	52,203
Long-Lived Assets	6,785				4,110				6,785	4,110	4,223
Brazil [Member]
Segment Reporting Information [Line Items]
Revenues									52,982	59,277	44,723
Long-Lived Assets	$ 9,439				$ 14,239				$ 9,439	$ 14,239	$ 15,340

XML

Segment Information (Summary of the Approximate Composition of Revenues, by Product Category) (Details)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Sales Revenue, Net [Member]
Revenue from External Customer [Line Items]
Percentage of consolidated revenue	100.00%	100.00%	100.00%
Body Structures and Assemblies [Member] | Sales Revenue, Net [Member]
Revenue from External Customer [Line Items]
Percentage of consolidated revenue	47.00%	44.00%	46.00%
Chassis, Lower Vehicle Structures, and Suspension Components [Member]
Revenue from External Customer [Line Items]
Percentage of consolidated revenue	36.00%	34.00%	30.00%
Complex Body-in-White Assemblies [Member] | Sales Revenue, Net [Member]
Revenue from External Customer [Line Items]
Percentage of consolidated revenue	17.00%	22.00%	24.00%

XML

Segment Information (Summary of Revenue by Major Customers) (Details) - Sales Revenue, Net [Member]	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Revenue, Major Customer [Line Items]
Percentage of consolidated revenue	100.00%	100.00%	100.00%
Ford [Member]
Revenue, Major Customer [Line Items]
Percentage of consolidated revenue	47.00%	51.00%	47.00%
Fiat - Chrysler [Member]
Revenue, Major Customer [Line Items]
Percentage of consolidated revenue	22.00%	18.00%	21.00%
Nissan [Member]
Revenue, Major Customer [Line Items]
Percentage of consolidated revenue	12.00%	15.00%	12.00%

XML

Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Thousands		12 Months Ended
	Sep. 21, 2018	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Commitments and Contingencies [Abstract]
Operating leases, rent expense, net		$ 30,000	$ 18,600	$ 16,800
Tooling expenditures, committed		54,700
Executory purchase capital expenditures, committed		51,400
Executory purchase other expenditures		6,800
Proceeds from sale of property, plant and equipment	$ 14,900	14,883
Deferred gain on sale of manufacturing facility	$ 5,400
Lease agreement term	15 years
Environmental exit costs, costs accrued to date		$ 1,300	$ 1,300

XML

Commitments and Contingencies (Future Minimum Operating Lease Payments) (Details) $ in Thousands	Dec. 31, 2018 USD ($)
Commitments and Contingencies [Abstract]
2019, operating leases	$ 42,261
2020, operating leases	49,615
2021, operating leases	47,385
2022, operating leases	45,831
2023, operating leases	43,139
Thereafter, operating leases	111,947
Total future lease payments, operating leases	$ 340,178

XML

Change in Working Capital and Other Operating Items (Summary of Sources/(Uses) of Cash Provided by Changes in Working Capital and Other Operating Items) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Change in Working Capital and Other Operating Items Abstract]
Accounts receivable	$ 10,830	$ (21,357)	$ 32,950
Inventories	(11,939)	(3,808)	(4,067)
Prepaid tooling and other current assets	16,435	20,729	(17,868)
Accounts payable and accrued liabilities	(23,960)	24,780	14,590
Other assets and liabilities	(20,862)	(15,936)	(11,997)
Change in working capital	$ (29,496)	$ 4,408	$ 13,608

XML

Quarterly Financial Data (Schedule of Quarterly Financial Data) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Revenues	$ 377,270	$ 391,421	$ 395,929	$ 407,233	$ 354,806	$ 330,397	$ 344,821	$ 352,450	$ 1,571,853	$ 1,382,474	$ 1,319,046
Gross Profit	42,726	52,166	50,822	48,184	51,139	47,179	48,130	42,715	193,898	189,163	174,132
Net income	(13,356)	22,580	22,376	17,300	(3,867)	14,931	19,258	17,413	48,900	47,735	39,280
Net income / (loss) attributable to Tower International, Inc.	$ (13,356)	$ 22,580	$ 22,376	$ 17,300	$ (3,867)	$ 14,931	$ 19,216	$ 17,345	$ 48,900	$ 47,625	$ 38,579
Income per share	$ (0.64)	$ 1.07	$ 1.07	$ 0.83	$ (0.19)	$ 0.72	$ 0.92	$ 0.83	$ 2.33	$ 2.29	$ 1.82
Valuation allowance, deferred tax asset, increase (decrease), amount									$ 14,600
Deferred Income Tax Expense (Benefit)					$ 27,200	$ 2,400			(3,334)	$ 41,702	$ 6,547
Subsidiaries [Member]
Valuation allowance, deferred tax asset, increase (decrease), amount	$ 14,400								$ 14,400
Impairment loss of discontinued operations loss	$ 44,000

XML

Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Allowance for Doubtful Accounts [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Valuation Allowances and Reserves, Balance, Beginning Balance	$ 556	$ 602	$ 437
Valuation Allowances and Reserves, Additions for Charges to Cost and Expense	278	(29)	181
Valuation Allowances and Reserves, Deductions	(11)	(17)	(16)
Valuation Allowances and Reserves, Balance, Ending Balance	823	556	602
Valuation Allowance of Deferred Tax Assets [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Valuation Allowances and Reserves, Balance, Beginning Balance	63,300	58,985	46,289
Valuation Allowances and Reserves, Additions for Charges to Cost and Expense	(11,367)
Valuation Allowances and Reserves, Period Increase (Decrease)		(1,380)	6,502
Valuation Allowances and Reserves, Additions for Charges to Other Accounts	(3,221)
Valuation Allowance and Reserves, Reduction Adjustments		5,695	6,194
Valuation Allowances and Reserves, Balance, Ending Balance	$ 48,712	$ 63,300	$ 58,985