Accuride 10Q 2015 Q2 Quarterly report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

	Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2015.

	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from __________ to ___________.

Commission file number 001-32483

ACCURIDE CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Delaware		61-1109077
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

7140 Office Circle, Evansville, IN		47715
(Address of Principal Executive Offices)		(Zip Code)

Registrant's Telephone Number, Including Area Code: (812) 962-5000

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer 

Accelerated Filer 

Non-Accelerated Filer 

Smaller Reporting Company 

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

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes  No 

As of July 23, 2015, 47,950,118 shares of Accuride Corporation common stock, par value $.01 per share, were outstanding.

ACCURIDE CORPORATION

Table of Contents

Part I. FINANCIAL INFORMATION

Item 1.

Condensed Consolidated Financial Statements (Unaudited)

ACCURIDE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands, except for share and per share data)	June 30, 2015			December 31, 2014
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	30,847		$	29,773
Customer receivables, net of allowance for doubtful accounts of $437 and $327 in 2015 and 2014, respectively		71,263			56,271
Other receivables		6,428			7,299
Inventories		40,724			43,065
Deferred income taxes		2,687			2,687
Prepaid expenses and other current assets		10,899			10,785
Total current assets		162,848			149,880
PROPERTY, PLANT AND EQUIPMENT, net		206,174			212,183
OTHER ASSETS:
Goodwill		100,697			100,697
Other intangible assets, net		113,884			117,963
Deferred financing costs, net of accumulated amortization of $5,791 and $5,077 in 2015 and 2014, respectively		4,313			5,012
Deferred income taxes		2,797			1,289
Pension asset		11,048			9,518
Other		1,939			1,880
TOTAL	$	603,700		$	598,422
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	65,573		$	56,452
Accrued payroll and compensation		8,375			10,620
Accrued interest payable		12,462			12,428
Accrued workers compensation		2,961			3,137
Accrued and other liabilities		14,374			14,434
Total current liabilities		103,745			97,071
LONG-TERM DEBT		316,760			323,234
DEFERRED INCOME TAXES		16,704			14,837
NON-CURRENT INCOME TAXES PAYABLE		6,534			6,534
OTHER POSTRETIREMENT BENEFIT PLAN LIABILITY		63,092			82,157
PENSION BENEFIT PLAN LIABILITY		30,321			32,348
OTHER LIABILITIES		10,112			11,438
COMMITMENTS AND CONTINGENCIES (Note 6)		—			—
STOCKHOLDERS' EQUITY:
Preferred Stock, $0.01 par value; 10,000,000 shares authorized		—			—
Common Stock, $0.01 par value; 80,000,000 shares authorized, 47,950,118 and 47,718,818 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively, and additional paid-in-capital		443,669			442,631
Accumulated other comprehensive loss		(30,798	)		(49,638	)
Accumulated deficiency		(356,439	)		(362,190	)
Total stockholders' equity		56,432			30,803
TOTAL	$	603,700		$	598,422

See notes to unaudited condensed consolidated financial statements.

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ACCURIDE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands except per share data)	2015			2014			2015			2014

NET SALES	$	185,380		$	181,575		$	369,039		$	348,359
COST OF GOODS SOLD		159,474			159,153			322,202			308,914
GROSS PROFIT		25,906			22,422			46,837			39,445
OPERATING EXPENSES:
Selling, general and administrative		11,722			10,118			23,325			20,572
INCOME FROM OPERATIONS		14,184			12,304			23,512			18,873
OTHER INCOME (EXPENSE):
Interest expense, net		(8,354	)		(8,487	)		(16,704	)		(16,907	)
Other loss, net		(84	)		(169	)		(1,256	)		(699	)
INCOME BEFORE INCOME TAXES FROM CONTINUING OPERATIONS		5,746			3,648			5,552			1,267
INCOME TAX (BENEFIT) EXPENSE		(378	)		(1,461	)		8			(557	)
INCOME FROM CONTINUING OPERATIONS		6,124			5,109			5,544			1,824
DISCONTINUED OPERATIONS, NET OF TAX		215			186			207			(102	)
NET INCOME	$	6,339		$	5,295		$	5,751		$	1,722
OTHER COMPREHENSIVE INCOME, NET OF TAX:
Defined benefit plans		17,566			140			18,840			473
COMPREHENSIVE INCOME	$	23,905		$	5,435		$	24,591		$	2,195
Weighted average common shares outstanding—basic		47,991			47,737			47,907			47,667
Basic income per share-continuing operations		0.13			0.11			0.12			0.04
Basic income per share-discontinued operations		—			—			—			—
Basic income per share	$	0.13		$	0.11		$	0.12		$	0.04
Weighted average common shares outstanding—diluted		49,286			49,003			48,554			48,299
Diluted income per share-continuing operations		0.13			0.11			0.12			0.04
Diluted income per share-discontinued operations		—			—			—			—
Diluted income per share	$	0.13		$	0.11		$	0.12		$	0.04

See notes to unaudited condensed consolidated financial statements.

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ACCURIDE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)

(In thousands)	Common Stock and Additional Paid-in- Capital			Accumulated Other Comprehensive Income (Loss)			Accumulated Deficiency			Total Stockholders' Equity

BALANCE April 1, 2014	$	440,725		$	(18,379	)	$	(363,456	)	$	58,890
Net income		—			—			5,295			5,295
Share-based compensation expense		710			—			—			710
Tax impact of forfeited vested shares		(51	)		—			—			(51	)
Other comprehensive income, net of tax		—			140			—			140
BALANCE—June 30, 2014	$	441,384		$	(18,239	)	$	(358,161	)	$	64,984

BALANCE—April 1, 2015	$	442,931		$	(48,364	)	$	(362,778	)	$	31,789
Net income		—			—			6,339			6,339
Share-based compensation expense		786			—			—			786
Tax impact of forfeited vested shares		(48	)		—			—			(48	)
Other comprehensive income, net of tax		—			17,566			—			17,566
BALANCE—June 30, 2015	$	443,669		$	(30,798	)	$	(356,439	)	$	56,432

(In thousands)	Common Stock and Additional Paid-in- Capital			Accumulated Other Comprehensive Income (Loss)			Accumulated Deficiency			Total Stockholders' Equity

BALANCE— January 1, 2014	$	440,479		$	(18,712	)	$	(359,883	)	$	61,884
Net income		—			—			1,722			1,722
Share-based compensation expense		1,209			—			—			1,209
Tax impact of forfeited vested shares		(304	)		—			—			(304	)
Other comprehensive income, net of tax		—			473			—			473
BALANCE—June 30, 2014	$	441,384		$	(18,239	)	$	(358,161	)	$	64,984

BALANCE—January 1, 2015	$	442,631		$	(49,638	)	$	(362,190	)	$	30,803
Net income		—			—			5,751			5,751
Share-based compensation expense		1,449			—			—			1,449
Tax impact of forfeited vested shares		(411	)		—			—			(411	)
Other comprehensive income, net of tax		—			18,840			—			18,840
BALANCE—June 30, 2015	$	443,669		$	(30,798	)	$	(356,439	)	$	56,432

See notes to unaudited condensed consolidated financial statements.

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ACCURIDE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Six Months Ended June 30,
(In thousands)	2015			2014

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	5,751		$	1,722
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property, plant and equipment		16,930			16,443
Amortization – deferred financing costs and debt discount		1,239			1,239
Amortization – other intangible assets		4,079			4,059
Loss on disposal of assets		98			406
Provision for deferred income taxes		(463	)		(15	)
Non-cash share-based compensation		1,449			1,209
Changes in certain assets and liabilities:
Receivables		(14,121	)		(21,651	)
Inventories		2,341			(6,887	)
Prepaid expenses and other assets		(1,642	)		(4,389	)
Accounts payable		7,346			16,098
Accrued and other liabilities		(4,387	)		(3,974	)
Net cash provided by operating activities		18,620			4,260
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment		(9,244	)		(14,748	)
Proceeds from sale of property, plant, and equipment		—			1,235
Purchase of intangible asset		—			(671	)
Net cash used in investing activities		(9,244	)		(14,184	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from revolver		16,000			10,000
Payments on revolver		(23,000	)		—
Principal payments on capital leases		(1,288	)		(1,599	)
Other		(14	)		—
Net cash (used in) provided by financing activities		(8,302	)		8,401
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		1,074			(1,523	)
CASH AND CASH EQUIVALENTS—Beginning of period		29,773			33,426
CASH AND CASH EQUIVALENTS—End of period	$	30,847		$	31,903

Supplemental cash flow information:
Cash paid for interest	$	15,394		$	15,683
Cash paid for income taxes	$	1,629		$	1,137
Non-cash transactions:
Purchases of property, plant and equipment in accounts payable	$	4,168		$	3,388

See notes to unaudited condensed consolidated financial statements.

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ACCURIDE CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(AMOUNTS IN THOUSANDS, UNLESS OTHERWISE NOTED, EXCEPT SHARE AND PER SHARE DATA)

Note 1 - Summary of Significant Accounting Policies

Basis of Presentation – The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"), except that the unaudited condensed consolidated financial statements do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. However, in the opinion of Accuride Corporation ("Accuride" or the "Company"), all adjustments (consisting primarily of normal recurring accruals) considered necessary to present fairly the condensed consolidated financial statements have been included. Certain operating results from prior periods have been reclassified to discontinued operations to conform to the current year presentation.

The results of operations for the three and six months ended June 30, 2015 are not necessarily indicative of the results to be expected for the year ending December 31, 2015. The unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto disclosed in Accuride's Annual Report on Form 10-K for the year ended December 31, 2014.

Management's Estimates and Assumptions – The preparation of 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 disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Earnings Per Common Share – Basic and diluted earnings per common share were computed as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands except per share data)	2015		2014		2015		2014
Numerator:
Net income from continuing operations	$	6,124	$	5,109	$	5,544	$	1,824
Net income (loss) from discontinued operations		215		186		207		(102	)
Net income	$	6,339	$	5,295	$	5,751	$	1,722
Denominator:
Weighted average shares outstanding – Basic		47,991		47,737		47,907		47,667
Weighted average shares outstanding – Diluted		49,286		49,003		48,554		48,299

Basic income per common share
From continuing operations	$	0.13	$	0.11	$	0.12	$	0.04
From discontinued operations		—		—		—		—
Basic income per common share	$	0.13	$	0.11	$	0.12	$	0.04

Diluted income per common share
From continuing operations	$	0.13	$	0.11	$	0.12	$	0.04
From discontinued operations		—		—		—		—
Diluted income per common share	$	0.13	$	0.11	$	0.12	$	0.04

As of June 30, 2015, there were options exercisable for 144,095 shares that were not included in the computation of diluted earnings per share because the effect would be anti-dilutive. As of June 30, 2014, there were options exercisable for 149,094 shares that were not included in the computation of diluted earnings per share because the effect would be anti-dilutive.

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Share-Based Compensation – Compensation expense for share-based compensation programs recognized as a component of operating expenses was $0.8 million and $0.7 million for the three months ended June 30, 2015 and June 30, 2014, respectively. Compensation expense for share-based compensation programs recognized as a component of operating expenses was $1.4 million and $1.2 million for the six months ended June 30, 2015 and June 30, 2014, respectively.

As of June 30, 2015, there was approximately $5.0 million of unrecognized pre-tax compensation expense related to share-based awards not yet vested that will be recognized over a weighted-average period of 1.8 years.

Income Tax – Under Interim Financial Reporting, we compute on a quarterly basis an estimated annual effective tax rate considering ordinary income and related income tax (benefit) expense. Ordinary income refers to income (loss) before income tax expense excluding significant, unusual, or infrequently occurring items. The tax effect of an unusual or infrequently occurring item is recorded in the interim period in which it occurs. Other items included in income tax expense in the periods in which they occur include the cumulative effect of changes in tax laws or rates, foreign exchange gains and losses, adjustments to uncertain tax positions, and adjustments to our valuation allowance due to changes in judgment in the realizability of federal and state deferred tax assets in future years.

We have assessed the need to maintain a valuation allowance for deferred tax assets based on an assessment of whether it is more likely than not that deferred tax benefits will be realized through the generation of future taxable income. Appropriate consideration is given to all available evidence, both positive and negative, in assessing the need for a valuation allowance. Due to our recent history of U.S. operating and taxable losses, the inconsistency of income, and the uncertainty of our financial outlook, we continue to maintain a full valuation allowance against our domestic deferred tax assets. Deferred tax assets in our foreign jurisdictions are more likely than not to be recognized, therefore, no valuation allowance has been recorded for these assets.

Recent Accounting Pronouncements – On May 28, 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue From Contracts With Customers. The amendments in this update create Topic 606, Revenue from Contracts with Customers, and supersede the revenue recognition requirements in Topic 605. The objective of the amendment is to clarify the principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP and International Financial Reporting Standards ("IFRS"). The amendment is effective for annual reporting periods beginning after December 15, 2016, and interim periods therein. Early adoption is not permitted. The Company is evaluating the effect, if any, on its financial statements.

On June 19, 2014, the FASB issued ASU 2014-12, Compensation-Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide that a Performance Target Could Be Achieved after the Requisite Service Period. This update is intended to resolve the diverse accounting treatment of those awards in practice. The amendment is effective for annual and interim periods within those annual periods beginning after December 15, 2015. Early adoption is permitted. The Company is evaluating the effect, if any, on its financial statements.

On August 27, 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements-Going Concern. The amendments in this update provide guidance in U.S. GAAP about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. In doing so, the amendments should reduce diversity in the timing and content of footnote disclosures. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company is evaluating the effect, if any, on its financial statements.

On January 9, 2015 , the FASB issued ASU 2015-01, Income Statement-Extraordinary and Unusual Items (Topic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items. The update eliminates from GAAP the concept of extraordinary items. The amendment is effective for fiscal years beginning after December 15, 2015. Early adoption is permitted. The Company is evaluating the effect, if any, on its financial statements.

On February 18, 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. This update is intended to change the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The amendment is effective for annual and interim periods within those annual periods beginning after December 15, 2015. Early adoption is permitted. The Company is evaluating the effect, if any, on its financial statements.

On April 15, 2015, the FASB issued ASU 2015-05, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement. The amendments in this update provide guidance to customers about whether a cloud computing arrangement includes a software license. The amendment is effective for annual and interim periods within those annual periods beginning after December 15, 2015. Early adoption is permitted. The Company is evaluating the effect, if any, on its financial statements.

On April 7, 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. FASB is issuing this update as part of its initiative to reduce complexity in accounting standards (the Simplification Initiative).

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To simplify presentation of debt issuance costs, the amendments in this update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. The amendments in this update are effective for annual and interim periods within those annual periods beginning after December 15, 2015. Early adoption is permitted. The Company is evaluating the effect, if any, on its financial statements.

Note 2 – Discontinued Operations

The Company has recognized certain operating results related to its Imperial Group business in Discontinued Operations.

The following table presents sales and income attributable to Discontinued Operations.

	Three Months Ended June 30,								Six Months Ended June 30,
(In thousands)	2015				2014				2015				2014

Net sales		$	—			$	—			$	—			$	—

Loss from operations			(11	)			(10	)			(21	)			(21	)
Other income (expense)			226				196				228				(81	)
Discontinued Operations		$	215			$	186			$	207			$	(102	)

Note 3 - Inventories

Inventories at June 30, 2015 and December 31, 2014, on a first-in, first-out ("FIFO") basis, were as follows:

(In thousands)	June 30, 2015		December 31, 2014
Raw materials	$	7,844	$	8,244
Work in process		12,198		14,073
Finished manufactured goods		20,682		20,748
Total inventories	$	40,724	$	43,065

Note 4 - Goodwill and Other Intangible Assets

The following represents the carrying amount of goodwill, on a reportable segment basis:

(In thousands)	Wheels		Brillion Iron Works		Total
Balance as of December 31, 2014	$	96,283	$	4,414	$	100,697
Balance as of June 30, 2015	$	96,283	$	4,414	$	100,697

The changes in the carrying amount of other intangible assets for the period December 31, 2014 to June 30, 2015, by reportable segment, are as follows:

(In thousands)	Wheels			Brillion Iron Works			Total
Balance as of December 31, 2014	$	115,465		$	2,498		$	117,963
Amortization		(3,995	)		(84	)		(4,079	)
Balance as of June 30, 2015	$	111,470		$	2,414		$	113,884

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The changes in the carrying amount of other intangible assets for the period December 31, 2013 to June 30, 2014, by reportable segment, are as follows:

(In thousands)	Wheels			Brillion Iron Works			Total
Balance as of December 31, 2013	$	122,764		$	2,666		$	125,430
Additions		671			—			671
Amortization		(3,975	)		(84	)		(4,059	)
Balance as of June 30, 2014	$	119,460		$	2,582		$	122,042

The summary of goodwill and other intangible assets is as follows:

			As of June 30, 2015						As of December 31, 2014
(In thousands)	Weighted Average Useful Lives		Gross Amount		Accumulated Amortization		Carrying Amount		Gross Amount		Accumulated Amortization		Carrying Amount
Goodwill		—	$	100,697	$	—	$	100,697	$	100,697	$	—	$	100,697
Other intangible assets:
Trade names		—	$	25,200	$	—	$	25,200	$	25,200	$	—	$	25,200
Technology		10.6		39,169		24,671		14,498		39,169		23,158		16,011
Customer relationships		16.8		127,304		53,118		74,186		127,304		50,552		76,752
Other intangible assets			$	191,673	$	77,789	$	113,884	$	191,673	$	73,710	$	117,963

We estimate that our annual amortization expense for our other intangible assets for 2015 through 2019 will be approximately $8.2 million.

Note 5 - Pension and Other Postretirement Benefit Plans

Components of net periodic benefit cost for the three and six months ended June 30:

	For the Three Months ended June 30,								For the Six Months ended June 30,
	Pension Benefits				Other Benefits				Pension Benefits				Other Benefits
(In thousands)	2015		2014		2015		2014		2015		2014		2015		2014
Service cost-benefits earned during the period	$	179	$	270	$	101	$	87	$	356	$	534	$	204	$	172
Interest cost on projected benefit obligation		2,370		2,697		754		883		4,724		5,351		1,614		1,759
Expected return on plan assets		(2,785)		(3,213)		—		—		(5,557)		(6,368)		—		—
Amortization of prior service (credit) cost		11		11		(93)		(9)		22		22		(102)		(18)
Amortization of loss		320		51		94		80		631		101		195		157
Total benefit cost charged (credited) to income	$	95	$	(184)	$	856	$	1,041	$	176	$	(360)	$	1,911	$	2,070

As of June 30, 2015, $3.2 million has been contributed in 2015 to our sponsored pension plans. We presently anticipate contributing an additional $4.5 million to fund our pension plans during 2015 for a total of $7.7 million.

Certain of our post-retirement benefit programs were re-measured as of May 31, 2015 to reflect post-65 health benefits transitioning from a self-insured plan to a Medicare Advantage Plan. The transition to the Medicare Advantage plan will provide comparable benefits while taking advantage of certain government subsidies which help manage the continually rising costs of medical and prescription drug coverage. The re-measurement resulted in a liability reduction of $17.9 million and corresponding gain in Accumulated Other Comprehensive Income. This re-measurement takes into account the impact of the anticipated future program cost savings and current interest rate environments.

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Note 6 – Commitments and Contingencies

We are from time to time involved in various legal proceedings of a character normally incidental to our business. We do not believe that the outcome of these proceedings will have a material adverse effect on our consolidated financial condition or results of our operations and cash flows.

In addition to environmental laws that regulate our ongoing operations, we are also subject to environmental remediation liability. Under the federal Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") and analogous state laws, we may be subject to joint and several liability without regard to fault or the legality of the original conduct as a result of the release or threatened release of hazardous materials into the environment regardless of when the release occurred. We are currently involved in several matters relating to the investigation and/or remediation of locations where we have arranged for the disposal of foundry wastes. Such matters include situations in which we have been named or are believed to be potentially responsible parties in connection with the contamination of these offsite disposal locations. Additionally, environmental remediation may be required to address soil and groundwater contamination identified at certain of our facilities.

As of June 30, 2015, we had an environmental reserve of approximately $1.5 million, related primarily to our foundry operations. This reserve is based on management's review of potential liabilities as well as cost estimates related thereto. Any expenditure required for us to comply with applicable environmental laws and/or pay for any remediation efforts will not be reduced or otherwise affected by the existence of the environmental reserve. Our environmental reserve may not be adequate to cover our future costs related to the sites associated with the environmental reserve, and any additional costs may have a material adverse effect on our business, results of operations or financial condition. The discovery of additional environmental issues, the modification of existing laws or regulations or the promulgation of new ones, more vigorous enforcement by regulators, the imposition of joint and several liability under CERCLA or analogous state laws, or other unanticipated events could also result in a material adverse effect on our consolidated financial statements.

The Iron and Steel Foundry National Emission Standard for Hazardous Air Pollutants ("NESHAP") was developed pursuant to Section 112(d) of the Clean Air Act and requires major sources of hazardous air pollutants to achieve compliance with emission limits representative of maximum achievable control technology. Based on currently available information, we do not anticipate material costs regarding ongoing compliance with the NESHAP; however if we are found to be out of compliance with NESHAP, we could incur a liability that could have a material adverse effect on our consolidated financial statements.

Management does not believe that the outcome of any currently pending environmental proceeding will have a material adverse effect on our consolidated financial statements.

As of June 30, 2015, we had approximately 2,186 employees, of which 496 were salaried employees with the remainder paid hourly. Unions represent approximately 1,438 of our employees, which is approximately 66 percent of our total employees. Each of our unionized facilities has a separate contract with the union that represents the workers employed at such facility. The union contracts expire at various times over the next few years with the exception of our union contract that covers the hourly employees at our Monterrey, Mexico, facility, which expires on an annual basis in January unless otherwise renewed. The 2015 negotiations in Monterrey were completed prior to the expiration of our union contract. In 2014, we successfully negotiated new bargaining agreements for our Erie, Pennsylvania and Rockford, Illinois facilities, which will expire on September 3, 2018 and March 25, 2019, respectively. The previous contract at our London, Ontario facility expired on March 12, 2015, but our previously negotiated successor agreement became effective on March 13, 2015 and runs through March 12, 2018. No other collective bargaining agreements expire in 2015.

Note 7 – Financial Instruments

We have determined the estimated fair value amounts of financial instruments using available market information and other appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop the estimates of fair value. A fair value hierarchy accounting standard exists for those instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and our own assumptions (unobservable inputs). Determining which category an asset or liability falls within the hierarchy requires significant judgment. We evaluate our hierarchy disclosures each quarter.

The hierarchy consists of three levels:

Level 1

Quoted market prices in active markets for identical assets or 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 developed by us, which reflect those that a market participant would use.

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The carrying amounts of cash and cash equivalents, customer receivables, and accounts payable approximate fair value because of the relatively short maturity of these instruments. The fair value of our 9.5% senior secured notes based on market quotes, which we determined to be Level 1 inputs, at June 30, 2015 was approximately $319.2 million compared to the carrying amount of $306.8 million. The fair value of our 9.5% senior secured notes based on market quotes, which we determined to be Level 1 inputs, at December 31, 2014 was approximately $319.2 million compared to the carrying amount of $306.2 million. The Company believes the fair value of our variable interest rate Asset Based Loan ("ABL") facility at June 30, 2015 and December 31, 2014 equals the carrying value of $10.0 million and $17.0 million, respectively. As of June 30, 2015 and December 31, 2014 we had no other financial instruments.

Note 8 – Segment Reporting

Based on our continual monitoring of the long-term economic characteristics, products and production processes, class of customer, and distribution methods of our operating segments, we have identified each of our operating segments below as reportable segments. We believe this segmentation is appropriate based upon operating decisions and performance assessments by our President and Chief Executive Officer. The accounting policies of the reportable segments are the same as described in Note 1, Summary of Significant Accounting Policies of our Annual Report on Form 10-K for the year ended December 31, 2014.

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2015			2014			2014			2014
Net sales:
Wheels	$	114,356		$	101,155		$	222,692		$	193,373
Gunite		47,006			48,304			84,746			92,277
Brillion Iron Works		24,018			32,116			61,601			62,709
Consolidated total	$	185,380		$	181,575		$	369,039		$	348,359

Operating income (loss):
Wheels	$	17,405		$	11,857		$	30,657		$	21,599
Gunite		7,338			7,243			10,079			10,521
Brillion Iron Works		(1,470	)		489			726			1,764
Corporate / Other		(9,089	)		(7,285	)		(17,950	)		(15,011	)
Consolidated total	$	14,184		$	12,304		$	23,512		$	18,873

Excluded from net sales above, are inter-segment sales from Brillion Iron Works to Gunite, as shown in the table below:

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2015			2014			2015			2014
Inter-segment sales		$	1,733		$	3,929		$	3,908		$	7,770

	As of
(In thousands)	June 30, 2015			December 31, 2014
Total assets:
Wheels		$	447,532		$	441,835
Gunite			62,553			59,600
Brillion Iron Works			52,155			55,226
Corporate / Other			41,460			41,761
Consolidated total		$	603,700		$	598,422

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Note 9 - Debt

As of June 30, 2015, total debt was $316.8 million consisting of $306.8 million of our outstanding 9.5% senior secured notes, net of discount, and a $10.0 million draw on our ABL facility. As of December 31, 2014, total debt was $323.2 million consisting of $306.2 million of our outstanding 9.5% senior secured notes, net of discount, and a $17.0 million draw on our ABL facility.

Our credit documents (the ABL Facility and the indenture governing the senior secured notes) contain operating covenants that limit the discretion of management with respect to certain business matters. These covenants place significant restrictions on, among other things, the ability to incur additional debt, to pay dividends, to create liens, to make certain payments and investments and to sell or otherwise dispose of assets and merge or consolidate with other entities. In addition, the ABL Facility contains a fixed charge coverage ratio covenant which will be applicable if the availability under the ABL Facility is less than 10.0% of the amount of the ABL Facility. If applicable, that covenant requires us to maintain a minimum ratio of adjusted EBITDA less capital expenditures made during such period (other than capital expenditures financed with the net cash proceeds of asset sales, recovery events, incurrence of indebtedness and the sale or issuance of equity interests) to fixed charges of 1.00 to 1.00. We are not currently in a compliance period, and we do not expect to be in a compliance period during the next twelve months. However, we continue to operate in a challenging commercial environment and our ability to maintain liquidity and comply with our debt covenants may be affected by changes in economic or other conditions that are beyond our control and which are difficult to predict.

The ABL Facility provides for loans and letters of credit in an amount up to the aggregate availability under the facility, subject to meeting certain borrowing base conditions, with sub-limits of up to $10.0 million for swingline loans and $20.0 million for letters of credit. Borrowings under the ABL Facility bear interest through maturity at a variable rate based upon, at our option, either LIBOR or the base rate (which is the greatest of one-half of 1.00% in excess of the federal funds rate, 1.00% in excess of the one-month LIBOR rate and the Agent's prime rate), plus, in each case, an applicable margin. The applicable margin for loans under the first-in last-out term facility that are (i) LIBOR loans ranges, based on the our average excess availability, from 2.75% to 3.25% per annum and (ii) base rate loans ranges, based on our average excess availability, from 1.00% to 1.50%. The applicable margin for other advances under the ABL Facility that are (i) LIBOR loans ranges, based on our average excess availability, from 1.75% to 2.25% and (ii) base rate loans ranges, based on our average excess availability, from 0.00% to 0.50%.

We must also pay an unused line fee equal to 0.25% per annum to the lenders under the ABL Facility if utilization under the facility is greater than or equal to 50.0% of the total available commitments under the facility, or an unused line fee equal to 0.375% per annum if utilization under the facility is less than 50.0% of the total available commitments under the facility. Customary letter of credit fees are also payable, as applicable.

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Note 10 – Guarantor and Non-guarantor Financial Statements

Our senior secured notes are, jointly and severally, fully and unconditionally guaranteed, on a senior basis, by all of our existing and future 100% owned domestic subsidiaries ("Guarantor Subsidiaries"). The non-guarantor subsidiaries are our foreign subsidiaries and discontinued operations. The following condensed financial information illustrates the composition of the combined Guarantor Subsidiaries:

CONDENSED CONSOLIDATING BALANCE SHEETS

	June 30, 2015
(In thousands)	Parent		Guarantor Subsidiaries		Non-guarantor Subsidiaries		Eliminations			Total
ASSETS
Cash and cash equivalents	$	21,713	$	—	$	9,134	$	—		$	30,847
Customer and other receivables, net		51,354		20,783		5,554		—			77,691
Intercompany receivable		—		32,364		86,585		(118,949	)		—
Inventories		20,373		17,397		3,362		(408	)		40,724
Other current assets		6,774		2,037		4,775		—			13,586
Total current assets		100,214		72,581		109,410		(119,357	)		162,848
Property, plant and equipment, net		78,031		97,703		30,440		—			206,174
Goodwill		96,283		4,414		—		—			100,697
Other intangible assets, net		111,470		2,414		—		—			113,884
Investments in and advances to subsidiaries and affiliates		165,788		—		—		(165,788	)		—
Deferred income taxes		—		35,640		4,819		(37,662	)		2,797
Other non-current assets		5,907		345		11,048		—			17,300
TOTAL	$	557,693	$	213,097	$	155,717	$	(322,807	)	$	603,700
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	$	17,395	$	36,894	$	11,284	$	—		$	65,573
Intercompany payable		87,645		—		31,712		(119,357	)		—
Accrued payroll and compensation		1,278		6,011		1,086		—			8,375
Accrued interest payable		12,462		—		—		—			12,462
Accrued and other liabilities		4,309		9,956		3,070		—			17,335
Total current liabilities		123,089		52,861		47,152		(119,357	)		103,745
Long term debt		316,760		—		—		—			316,760
Deferred and non-current income taxes		47,326		10,615		2,959		(37,662	)		23,238
Other non-current liabilities		14,086		71,875		17,564		—			103,525
Stockholders' equity		56,432		77,746		88,042		(165,788	)		56,432
TOTAL	$	557,693	$	213,097	$	155,717	$	(322,807	)	$	603,700

	December 31, 2014
(In thousands)	Parent		Guarantor Subsidiaries			Non-guarantor Subsidiaries		Eliminations			Total
ASSETS
Cash and cash equivalents	$	22,710	$	—		$	7,063	$	—		$	29,773
Customer and other receivables, net		35,630		20,994			6,543		403			63,570
Intercompany receivables		191,272		5,086			53,055		(249,413	)		—
Inventories		18,693		21,352			3,423		(403	)		43,065
Other current assets		4,970		3,386			5,116		—			13,472
Total current assets		273,275		50,818			75,200		(249,413	)		149,880
Property, plant and equipment, net		78,603		101,648			31,932		—			212,183
Goodwill		96,283		4,414			—		—			100,697
Other intangible assets, net		115,465		2,498			—		—			117,963
Investments in and advances to subsidiaries and affiliates		128,372		—			—		(128,372	)		—
Other non-current assets		3,118		3,774			10,807		—			17,699
TOTAL	$	695,116	$	163,152		$	117,939	$	(377,785	)	$	598,422
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	$	15,209	$	31,931		$	9,312	$	—		$	$56,452
Intercompany payable		249,407		—			6		(249,413	)		—
Accrued payroll and compensation		4,002		5,458			1,160		—			10,620
Accrued interest payable		12,428		—			—		—			12,428
Accrued and other liabilities		4,183		10,060			3,328		—			17,571
Total current liabilities		285,229		47,449			13,806		(249,413	)		97,071
Long term debt		323,234		—			—		—			323,234
Deferred and non-current income taxes		41,775		(20,736	)		332		—			21,371
Other non-current liabilities		14,075		93,245			18,623		—			125,943
Stockholders' equity		30,803		43,194			85,178		(128,372	)		30,803
TOTAL	$	695,116	$	163,152		$	117,939	$	(377,785	)	$	598,422

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CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

	Three Months Ended June 30, 2015
(In thousands)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Total
Net sales	$	135,630		$	78,921		$	32,116		$	(61,287	)	$	185,380
Cost of goods sold		123,642			67,974			28,737			(60,879	)		159,474
Gross profit		11,988			10,947			3,379			(408	)		25,906
Operating expenses		11,434			250			38			—			11,722
Income (loss) from operations		554			10,697			3,341			(408	)		14,184
Other income (expense):
Interest income (expense), net		(8,754	)		(51	)		451			—			(8,354	)
Equity in earnings of subsidiaries		14,299			—			—			(14,299	)		—
Other income (expense), net		290			—			(374	)		—			(84	)
Income (loss) before income taxes from continuing operations		6,389			10,646			3,418			(14,707	)		5,746
Income tax (benefit) provision		50			(490	)		62			—			(378	)
Income (loss) from continuing operations		6,339			11,136			3,356			(14,707	)		6,124
Discontinued operations, net of tax		—			—			215			—			215
Net income (loss)	$	6,339		$	11,136		$	3,571		$	(14,707	)	$	6,339

Comprehensive income (loss)	$	23,905		$	28,034		$	3,727		$	(31,761	)	$	23,905

	Three Months Ended June 30, 2014
(In thousands)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries		Eliminations			Total
Net sales	$	123,044		$	76,532		$	33,669	$	(51,670	)	$	181,575
Cost of goods sold		108,284			69,982			32,065		(51,178	)		159,153
Gross profit		14,760			6,550			1,604		(492	)		22,422
Operating expenses		9,843			222			53		—			10,118
Income (loss) from operations		4,917			6,328			1,551		(492	)		12,304
Other income (expense):
Interest income (expense), net		(8,766	)		(59	)		338		—			(8,487	)
Equity in earnings of subsidiaries		8,388			—			—		(8,388	)		—
Other income (expense), net		(800	)		63			568		—			(169	)
Income (loss) before income taxes from continuing operations		3,739			6,332			2,457		(8,880	)		3,648
Income tax (benefit) provision		(1,556	)		—			95		—			(1,461	)
Income (loss) from continuing operations		5,295			6,332			2,362		(8,880	)		5,109
Discontinued operations, net of tax		—			—			186		—			186
Net income (loss)	$	5,295		$	6,332		$	2,548	$	(8,880	)	$	5,295

Comprehensive income (loss)	$	5,435		$	6,322		$	2,687	$	(9,009	)	$	5,435

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	Six Months Ended June 30, 2015
(In thousands)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Total
Net sales	$	255,129		$	168,164		$	63,886		$	(118,140	)	$	369,039
Cost of goods sold		230,878			149,991			58,764			(117,431	)		322,202
Gross profit		24,251			18,173			5,122			(709	)		46,837
Operating expenses		22,737			504			84			—			23,325
Income (loss) from operations		1,514			17,669			5,038			(709	)		23,512
Other income (expense):
Interest income (expense), net		(17,442	)		(105	)		843			—			(16,704	)
Equity in earnings of subsidiaries		21,912			—			—			(21,912	)		—
Other income (expense), net		(279	)		—			(977	)		—			(1,256	)
Income (loss) before income taxes from continuing operations		5,705			17,564			4,904			(22,621	)		5,552
Income tax (benefit) provision		(46	)		(347	)		401			—			8
Income (loss) from continuing operations		5,751			17,911			4,503			(22,621	)		5,544
Discontinued operations, net of tax		—			—			207			—			207
Net income (loss)	$	5,751		$	17,911		$	4,710		$	(22,621	)	$	5,751

Comprehensive income (loss)	$	24,591		$	34,899		$	6,028		$	(40,927	)	$	24,591

	Six Months Ended June 30, 2014
(In thousands)	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Total
Net sales	$	231,575		$	150,834		$	66,323		$	(100,373	)	$	348,359
Cost of goods sold		207,166			139,686			61,504			(99,442	)		308,914
Gross profit		24,409			11,148			4,819			(931	)		39,445
Operating expenses		19,965			502			105			—			20,572
Income (loss) from operations		4,444			10,646			4,714			(931	)		18,873
Other income (expense):
Interest income (expense), net		(17,423	)		(120	)		636			—			(16,907	)
Equity in earnings of subsidiaries		14,061			—			—			(14,061	)		—
Other income (expense), net		(877	)		126			52			—			(699	)
Income (loss) before income taxes from continuing operations		205			10,652			5,402			(14,992	)		1,267
Income tax (benefit) provision		(1,517	)		143			817			—			(557	)
Income (loss) from continuing operations		1,722			10,509			4,585			(14,992	)		1,824
Discontinued operations, net of tax		—			—			(102	)		—			(102	)
Net income (loss)	$	1,722		$	10,509		$	4,483		$	(14,992	)	$	1,722

Comprehensive income (loss)	$	2,195		$	10,486		$	4,957		$	(15,443	)	$	2,195

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CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

	Six Months Ended June 30, 2015
(In thousands)	Parent Company			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Total
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	5,751		$	17,911		$	4,710		$	(22,621	)	$	5,751
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation		5,558			9,418			1,954			—			16,930
Amortization – deferred financing costs		1,239			—			—			—			1,239
Amortization – other intangible assets		3,995			84			—			—			4,079
Loss on disposal of assets		123			37			(62	)		—			98
Deferred income taxes		27			(490	)		—			—			(463	)
Non-cash stock-based compensation		1,449			—			—			—			1,449
Equity in earnings of subsidiaries and affiliates		(21,912	)		—			—			21,912			—
Change in other operating items		18,869			(29,152	)		(889	)		709			(10,463	)
Net cash provided by (used in) operating activities		15,099			(2,192	)		5,713			—			18,620

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and equipment		(4,776	)		(3,990	)		(478	)		—			(9,244	)
Proceeds from notes receivable		(48,107	)		(19,700	)		—			67,807			—
Payments on notes receivable		67,829			46,892			—			(114,721	)		—
Other		—			—			—			—			—
Net cash provided by (used in) investing activities		14,946			23,202			(478	)		(46,914	)		(9,244	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable		35,700			48,107			—			(67,807	)		16,000
Payments on notes payable		(69,892	)		(67,829	)		—			114,721			(23,000	)
Principal payments on capital leases		3,164			(1,288	)		(3,164	)		—			(1,288	)
Other		(14	)		—			—			—			(14	)
Net cash provided by (used in) financing activities		(31,042	)		(21,010	)		(3,164	)		46,914			(8,302	)
Net increase (decrease) in cash and cash equivalents		(997	)		—			2,071			—			1,074
Cash and cash equivalents, beginning of period		22,710			—			7,063			—			29,773
Cash and cash equivalents, end of period	$	21,713		$	—		$	9,134		$	—		$	30,847

	Six Months Ended June 30, 2014
(In thousands)	Parent Company			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Total
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	1,722		$	10,509		$	4,483		$	(14,992	)	$	1,722
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation		5,488			8,864			2,091			—			16,443
Amortization – deferred financing costs		1,239			—			—			—			1,239
Amortization – other intangible assets		3,975			84			—			—			4,059
(Gain) loss on disposal of assets		322			57			27			—			406
Deferred income taxes		(292	)		—			277			—			(15	)
Non-cash stock-based compensation		1,209			—			—			—			1,209
Equity in earnings of subsidiaries and affiliates		(14,061	)		—			—			14,061			-
Change in other operating items		9,268			(29,191	)		(1,811	)		931			(20,803	)
Net cash provided by (used in) operating activities		8,870			(9,677	)		5,067			—			4,260

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and equipment		(6,236	)		(8,356	)		(156	)		—			(14,748	)
Proceeds from notes receivable		(64,880	)		(66,615	)		(45	)		131,540			—
Payment on notes receivable		25,568			45,700			45			(71,313	)		—
Other		(671	)		1,235			—			—			564
Net cash provided by (used in) investing activities		(46,219	)		(28,036	)		(156	)		60,227			(14,184	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable		76,615			64,925			—			(131,540	)		10,000
Payments on notes payable		(45,700	)		(25,613	)		—			71,313			—
Other		—			(1,599	)		—			—			(1,599	)
Net cash provided by (used in) financings activities		30,915			37,713			—			(60,227	)		8,401
Net increase (decrease) in cash and cash equivalents		(6,434	)		—			4,911			—			(1,523	)
Cash and cash equivalents, beginning of period		31,018			—			2,408			—			33,426
Cash and cash equivalents, end of period	$	24,584		$	—		$	7,319		$	—		$	31,903

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Note 11 – Changes in Accumulated Other Comprehensive Income (Loss) by Component

	Defined Benefit Pension			Defined Benefit Post-Retirement			Total
Balance as of March 31, 2014 (In thousands)	$	(20,433	)	$	2,054		$	(18,379	)
Amounts reclassified from accumulated other comprehensive loss:
Actuarial costs (reclassified to salaries, wages, and benefits)		51			80			131
Prior service costs (reclassified to salaries, wages, and benefits)		11			(9	)		2
Foreign currency translation related to pension and postretirement plans		237			(241	)		(4	)
Income Tax (Expense) or Benefit	$	(178	)	$	189		$	11
Other comprehensive income (loss), net of tax		121			19			140
Balance as of June 30, 2014 (In thousands)	$	(20,312	)	$	2,073		$	(18,239	)

	Defined Benefit Pension			Defined Benefit Post-Retirement			Total
Balance as of December 31, 2013 (In thousands)	$	(20,429	)	$	1,717		$	(18,712	)
Amounts reclassified from accumulated other comprehensive loss:
Actuarial costs (reclassified to salaries, wages, and benefits)		101			157			258
Prior service costs (reclassified to salaries, wages, and benefits)		22			(18	)		4
Foreign currency translation related to pension and postretirement plans		261			28			289
Income Tax (Expense) or Benefit	$	(267	)	$	189		$	(78	)
Other comprehensive income (loss), net of tax		117			356			473
Balance as of June 30, 2014 (In thousands)	$	(20,312	)	$	2,073		$	(18,239	)

	Defined Benefit Pension			Defined Benefit Post-Retirement			Total
Balance as of March 31, 2015 (In thousands)	$	(39,209	)	$	(9,155	)	$	(48,364	)
Amounts reclassified from accumulated other comprehensive loss:
Actuarial costs (reclassified to salaries, wages, and benefits)		320			94			414
Prior service costs (reclassified to salaries, wages, and benefits)		11			(93	)		(82	)
Foreign currency translation related to pension and postretirement plans		(180	)		(51	)		(231	)
Remeasurements		—			17,871			17,871
Income Tax (Expense) or Benefit	$	62		$	(468	)	$	(406	)
Other comprehensive income (loss), net of tax		213			17,353			17,566
Balance as of June 30, 2015 (In thousands)	$	(38,996	)	$	8,198		$	(30,798	)

	Defined Benefit Pension			Defined Benefit Post-Retirement			Total
Balance as of December 31, 2014 (In thousands)	$	(40,160	)	$	(9,478	)	$	(49,638	)
Amounts reclassified from accumulated other comprehensive loss:
Actuarial costs (reclassified to salaries, wages, and benefits)		631			195			826
Prior service costs (reclassified to salaries, wages, and benefits)		22			(102	)		(80	)
Foreign currency translation related to pension and postretirement plans		705			270			975
Remeasurements		-			17,871			17,871
Income Tax (Expense) or Benefit	$	(194	)	$	(558	)	$	(752	)
Other comprehensive income (loss), net of tax		1,164			17,676			18,840
Balance as of June 30, 2015 (In thousands)	$	(38,996	)	$	8,198		$	(30,798	)

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Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations.

The accompanying unaudited condensed consolidated financial statements are prepared in conformity with U.S. GAAP and such principles are applied on a basis consistent with the information reflected in our Annual Report on Form 10-K for the year ended December 31, 2014 filed with the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations promulgated by the SEC. In the opinion of management, the interim financial information includes all adjustments and accruals, consisting primarily of normal recurring adjustments, which are necessary for a fair presentation of results for the respective interim periods. The results of operations for the three and six months ended June 30, 2015 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2015 or any interim period. Except for the historical information contained herein, this quarterly report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those indicated by such forward-looking statements.

Overview

We are a leading North American manufacturer and supplier of commercial vehicle components. Our products include commercial vehicle wheels, wheel-end components and assemblies, and ductile and gray iron castings. We market our products under some of the most recognized brand names in the industry, including Accuride, Gunite, and Brillion. We serve the leading OEMs and their related aftermarket channels in most major segments of the commercial vehicle market, including heavy- and medium-duty trucks, commercial trailers, light trucks, buses, as well as specialty and military vehicles.

Our primary product lines are standard equipment used by many North American heavy- and medium-duty truck OEMs as well as commercial trailer OEMs.

Our diversified customer base includes substantially all of the leading commercial vehicle OEMs, such as Daimler Truck North America, LLC, with its Freightliner and Western Star brand trucks, PACCAR, Inc., with its Peterbilt and Kenworth brand trucks, Navistar, Inc., with its International brand trucks, and Volvo/Mack, with its Volvo and Mack brand trucks. Our primary commercial trailer customers include leading commercial trailer OEMs, such as Great Dane Limited Partnership, Wabash National, Inc., and Utility Trailer Manufacturing Company. Our largest aftermarket customer is Advanced Wheel Sales, LLC. Our major light truck customer is General Motors Corporation. Our product portfolio is supported by strong sales, marketing and design engineering capabilities and is manufactured in eight strategically located, technologically-advanced facilities across the United States, Mexico and Canada.

The heavy- and medium-duty truck and commercial trailer markets, the related aftermarket, and the global industrial, construction, and mining markets are the primary drivers of our sales. The commercial vehicle manufacturing and replacement part markets are, in turn, directly influenced by conditions in the North American truck industry and generally by conditions in other industries which indirectly impact the truck industry, such as the home-building industry, and by overall economic growth and consumer spending. The global industrial, construction, and mining markets are driven by more macro- and global economic conditions, such as coal, oil and gas exploration, demand for mined products that are converted into industrial raw materials such as steel, iron and copper, and global construction trends. Industry forecasts predict modest growth in class 5-8 commercial vehicle production in 2015 compared to 2014 as customers focus on replacing older commercial vehicles. With respect to trailer production, industry experts also expect year-over-year production in 2015 to increase over 2014. Industry experts predict flat to marginal growth in the commercial vehicle aftermarket. Our Brillion castings business, driven more by global industrial, construction, and mining markets expects to face continued headwinds from broader economic weakness, particularly in the oil and gas end-markets that it serves.

Our markets and those of our customers are becoming increasingly competitive as the global and North American economic recoveries remain modest. In the North American commercial vehicle market, OEMs are competing to maintain or increase market share in the face of evolving regulations, increasing customer emphasis on light weight and fuel efficient platforms and an economic recovery that is holding new equipment purchases at or near replacement levels. Shifts in the market share held by each of our OEM customers impact our business to varying degrees depending on whether our products are designated as standard or optional equipment on the various platforms at each OEM. Approximately 70 percent of our wheel business is tied to the OEM market with the remaining 30 percent tied to the aftermarket. Approximately 75 percent of our Gunite business is tied to the North American Aftermarket, with the remaining 25 percent tied to the North American Class 8 OEM segment. We are also continuing to see the impacts of low cost country sourced products in our markets, which has particularly impacted the aftermarket for steel wheels and brake drums. Further, broader economic weaknesses in industrial manufacturing and oil and gas exploration impacted our Brillion business through reduced customer orders beginning in March 2015. We expect that recent substantial reductions in commodity prices will continue to impact demand in Brillion's end markets in 2015 and continue into 2016.

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In response to these conditions, we are working to continue to increase our market share and to control costs while positioning our businesses to compete at current demand levels and maintain capacity to meet further recoveries in our markets. We continue to implement lean manufacturing practices across our facilities, which have resulted in significant reductions in working capital. These reductions have freed up cash for other opportunities and priorities. We are also committed and focused on driving these lean practices into our functional/administrative areas. We have completed substantially all of our previously disclosed capital investment projects that have selectively increased our manufacturing capacity on core products, reduced labor and manufacturing costs and improved product quality. Additionally, we have introduced and will continue to develop and roll-out new products and technologies that we believe offer better value to customers. Further, we have been pursuing new business opportunities with both OEM and aftermarket customers and will work towards increasing our market share at OEMs by developing our relationships with large fleets in order to "pull through" our products when fleets order new equipment. We continue to monitor competition from products manufactured in low cost countries and will take steps to combat unfair trade practices, as warranted, such as filing anti-dumping petitions with the United States government.

Certain of our post-retirement benefit programs were re-measured as of May 31, 2015 to reflect adjustments made to the health benefit plan design. The re-measurement resulted in a liability reduction of $17.9 million and corresponding gain in Accumulated Other Comprehensive Income. This re-measurement takes into account the impact of the anticipated future program cost savings and current interest rate environments.

We believe that cash from operations, existing cash reserves, and our ABL revolving credit facility will provide adequate funds for our working capital needs, planned capital expenditures and cash interest payments through 2015 and the foreseeable future.

Results of Operations

The following tables set forth certain income statement information for Accuride for the three months ended June 30, 2015 and June 30, 2014:

	Three Months Ended June 30,
(In thousands)	2015			2014
Net sales	$	185,380		$	181,575
Cost of goods sold		159,474			159,153
Gross profit		25,906			22,422
Operating expenses		11,722			10,118
Income from operations		14,184			12,304
Interest expense, net		(8,354	)		(8,487	)
Other loss, net		(84	)		(169	)
Income tax benefit		(378	)		(1,461	)
Income from continuing operations		6,124			5,109
Discontinued operations, net of tax		215			186
Net Income	$	6,339		$	5,295

Net Sales

	Three Months Ended June 30,
(In thousands)	2015		2014
Wheels	$	114,356	$	101,155
Gunite		47,006		48,304
Brillion		24,018		32,116
Total	$	185,380	$	181,575

Net sales for the three months ended June 30, 2015, were $185.4 million, which was an increase of 2.1 percent, compared to net sales of $181.6 million for the three months ended June 30, 2014. Of the total increase, approximately $8.0 million was attributable to an increase in volume demand due to increased production levels in the commercial vehicle market and its aftermarket segments in North America. The increased commercial vehicle demand is a result of continued recovery in the commercial vehicle end-market. The increase in net sales was partially offset by $4.2 million in pricing related decreases that reflect a pass-through of fluctuating raw material and commodity costs.

Net sales for our Wheels segment increased 13.1 percent during the three months ended June 30, 2015 compared to the same period in 2014 primarily due to increased production volume from our OEM customers and increased demand from aftermarket customers. Net sales for our Gunite segment decreased 2.7 percent primarily due to decreased OEM demand for its hub-related assemblies, as well as lower year-over-year pricing for aftermarket drums. Our Gunite products have a higher

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concentration of aftermarket demand, primarily due to the brake drum products that Gunite produces, which are replaced more often than our other products. Our Brillion segment's net sales decreased by 25.2 percent due to lower demand in industrial and oil and gas markets stemming from recent substantial reductions in commodity prices.

North American commercial vehicle industry production builds as reported by ACT Publications were as follows:

	For the Three Months ended June 30,
	2015	2014
Class 8	88,635	73,653
Classes 5-7	59,815	59,521
Trailer	79,537	69,223

While we serve the commercial vehicle aftermarket segment, there is no industry data to compare our aftermarket sales to industry demand from period to period. Approximately 70 percent of our Wheels business is tied to the OEM markets, with the remaining 30 percent tied to the aftermarket. Approximately 75 percent of our Gunite business is tied to the North American Aftermarket, with the remaining 25 percent tied to the North American Class 8 segment. We expect to continue to experience competition from low-cost country sourced products that compete with products produced by our Wheels and Gunite operating segments. We expect softness in Brillion's end markets for the remainder of 2015 given the current outlook in the oil and gas industry and commodity pricing.

Cost of Goods Sold

The table below represents the significant components of our cost of goods sold.

	Three Months Ended June 30,
(In thousands)	2015		2014
Raw materials	$	79,126	$	78,842
Depreciation		8,358		8,174
Labor and other overhead		71,990		72,137
Total	$	159,474	$	159,153

Raw materials costs increased by $0.3 million, or 0.4 percent, during the three months ended June 30, 2015 due mainly to increased production volume partially offset by decreased raw material commodity costs.

Depreciation increased by $0.2 million, or 2.3 percent during the three months ended June 30, 2015 primarily due to the age of fixed assets in relation to the amount of new capital spending.

Labor and overhead costs decreased by $0.1 million, or 0.2 percent, due to savings created by operational efficiencies partially offset by increased production.

Operating Expenses

	Three Months Ended June 30,
(In thousands)	2015		2014
Selling, general, and administrative	$	8,032	$	6,564
Research and development		1,646		1,508
Depreciation and amortization		2,044		2,046
Total	$	11,722	$	10,118

Selling, general, and administrative costs increased by $1.5 million in 2015 compared to the same period in 2014. This increase was related to planned growth in our sales and marketing area, planned year-over-year increases in research and development, and the pursuit of strategic growth initiatives.

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Operating Income (Loss)

	Three Months Ended June 30,
(In thousands)	2015			2014
Wheels	$	17,405		$	11,857
Gunite		7,338			7,243
Brillion		(1,470	)		489
Corporate/Other		(9,089	)		(7,285	)
Total	$	14,184		$	12,304

Operating income for the Wheels segment was 15.2 percent of its net sales for the three months ended June 30, 2015 compared to 11.7 percent for the three months ended June 30, 2014. This increased operating income is a result of the contribution to earnings from higher revenue in the current period compared to the same period in the prior year.

Operating income for the Gunite segment was 15.6 percent of its net sales for the three months ended June 30, 2015 and 15.0 percent for the three months ended June 30, 2014. During the three months ended June 30, 2015, Gunite showed higher contribution on decreased sales due mainly to savings created by operational efficiencies and decreased raw material commodity costs.

The operating loss for the Brillion segment was 6.1 percent of its net sales for the three months ended June 30, 2015 compared to 1.5 percent for same period in 2014 primarily due to volume decreases resulting from weakening oil and gas industry related sales in the second quarter of 2015.

The operating loss for the Corporate segment was 4.9 percent of consolidated net sales for the three months ended June 30, 2015 as compared to 4.0 percent for the comparative period in 2014. This increase was related to planned growth in our sales and marketing area as well as planned year-over-year increases in research and development.

Interest Expense

Net interest expense decreased by $0.1 million to $8.4 million in the three months ended June 30, 2015 from $8.5 million for the three months ended June 30, 2014 due to decreased debt from 2014 to 2015.

Income Tax Provision

We recognized an income tax benefit of $0.4 million in the three months ended June 30, 2015, compared to an income tax benefit of $1.5 million for the three months ended June 30, 2014.

Our effective tax rate is (6.6) percent and (40.0) percent for the three months ended June 30, 2015 and 2014, respectively. The effective tax rate for the quarter is impacted by the relative impact of discrete items, which are accounted for as they occur, as well as the recognition of a full valuation against deferred tax assets for our U.S. operations, and the exception provided in ASC740, which is discussed below.

Income tax expense or benefit from continuing operations is generally determined without regard to other categories of earnings, such as discontinued operations and Other Comprehensive Income ("OCI"). An exception is provided in ASC 740, Accounting for Income Taxes, when there is aggregate income from categories other than continuing operations and a loss from continuing operations in the current year. In this case, the tax benefit allocated to continuing operations is the amount by which the loss from continuing operations reduces the tax expenses recorded with respect to the other categories of earnings, even when a valuation allowance has been established against the deferred tax assets. In instances where a valuation allowance is established against current year losses, income from other sources, including unrealized gains from pension and post-retirement benefits recorded as a component of OCI, is considered when determining whether sufficient future taxable income exists to realize the deferred tax assets. As a result, for the three months ended June 30, 2015 we recognized a U.S. tax expense of $0.5 million in OCI related to the unrealized gains on pension and post-retirement benefits, and recognized a corresponding U.S. tax benefit of $0.5 million in our results from continuing operations, before discrete items.

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Comparison of Financial Results for the Six Months Ended June 30, 2015 and 2014

The following tables set forth certain income statement information for Accuride for the six months ended June 30, 2015 and June 30, 2014:

	Six Months Ended June 30,
(In thousands)	2015			2014
Net sales	$	369,039		$	348,359
Cost of goods sold		322,202			308,914
Gross profit		46,837			39,445
Operating expenses		23,325			20,572
Income from operations		23,512			18,873
Interest expense, net		(16,704	)		(16,907	)
Other loss, net		(1,256	)		(699	)
Income tax expense (benefit)		8			(557	)
Income from continuing operations		5,544			1,824
Discontinued operations, net of tax		207			(102	)
Net Income	$	5,751		$	1,722

Net Sales

	Six Months Ended June 30,
(In thousands)	2015		2014
Wheels	$	222,692	$	193,373
Gunite		84,746		92,277
Brillion		61,601		62,709
Total	$	369,039	$	348,359

Net sales for the six months ended June 30, 2015, were $369.0 million, which was an increase of 5.9 percent, compared to net sales of $348.4 million for the six months ended June 30, 2014. Of the total increase, approximately $22.8 million was the result of an increase in volume demand due to increased production levels in the commercial vehicle market and its aftermarket segments in North America. The increased commercial vehicle demand is a result of continued recovery in the commercial vehicle end-market. The increase in net sales was partially offset by $2.1 million in pricing decreases, which primarily represented a pass-through of fluctuating raw material and commodity costs.

Net sales for our Wheels segment increased 15.2 percent during the six months ended June 30, 2015 compared to the same period in 2014 primarily due to increased production volume from our OEM customers and increased demand from aftermarket customers. Net sales for our Gunite segment decreased 8.2 percent primarily due to decreased OEM demand for hub-related assemblies, as well as lower year-over-year pricing for aftermarket drums. Our Gunite products have a higher concentration of aftermarket demand, primarily due to the brake drum products that Gunite produces, which are replaced more often than our other products. Our Brillion segment's net sales decreased by 1.8 percent due to a lower demand in industrial and oil and gas markets.

North American commercial vehicle industry production builds as reported by ACT Publications were as follows:

	For the Six Months ended June 30,
	2015	2014
Class 8	167,955	140,645
Classes 5-7	117,013	110,349
Trailer	153,566	127,463

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Cost of Goods Sold

The table below represents the significant components of our cost of goods sold.

	Six Months Ended June 30,
(In thousands)	2015		2014
Raw materials	$	163,028	$	152,821
Depreciation		16,899		16,411
Labor and other overhead		142,275		139,682
Total	$	322,202	$	308,914

Raw materials costs increased by $10.2 million, or 6.7 percent, during the six months ended June 30, 2015 due mainly to increased production volumes.

Depreciation increased by $0.5 million, or 3.0 percent during the six months ended June 30, 2015 primarily due to the age of fixed assets in relation to the amount of new capital spending.

Labor and overhead costs increased by $2.6 million, or 1.9 percent, due to increased production partially offset by savings created by operational efficiencies.

Operating Expenses

	Six Months Ended June 30,
(In thousands)	2015		2014
Selling, general, and administrative	$	16,027	$	13,674
Research and development		3,209		2,828
Depreciation and amortization		4,089		4,070
Total	$	23,325	$	20,572

Selling, general, and administrative costs increased by $2.4 million in 2015 compared to the same period in 2014. This increase was related to planned growth in our sales and marketing area, planned year-over-year increases in research and development, and the pursuit of strategic growth initiatives.

Operating Income (Loss)

	Six Months Ended June 30,
(In thousands)	2015			2014
Wheels	$	30,657		$	21,599
Gunite		10,079			10,521
Brillion		726			1,764
Corporate/Other		(17,950	)		(15,011	)
Total	$	23,512		$	18,873

Operating income for the Wheels segment was 13.8 percent of its net sales for the six months ended June 30, 2015 compared to 11.2 percent for the six months ended June 30, 2014. The increased operating income is a result of the contribution to earnings from higher revenue in the current period compared to the same period in the prior year.

Operating income for the Gunite segment was 11.9 percent of its net sales for the six months ended June 30, 2015 and 11.4 percent for the six months ended June 30, 2014. During the six months ended June 30, 2015, Gunite showed higher contribution on decreased sales due mainly to savings created by operational efficiencies and decreased raw material commodity costs.

Operating income for the Brillion segment was 1.2 percent of its net sales for the six months ended June 30, 2015 compared to 2.8 percent for same period in 2014 primarily due to volume decreases resulting from weakening oil and gas industry related sales in the second quarter of 2015.

The operating losses for the Corporate segment were 4.9 percent of consolidated net sales for the six months ended June 30, 2015 as compared to 4.3 percent for the comparative period in 2014. This increase was related to planned growth in our sales and marketing area as well as planned year-over-year increases in research and development.

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Interest Expense

Net interest expense decreased by $0.2 million to $16.7 million for the six months ended June 30, 2015 from $16.9 million for the six months ended June 30, 2014 due to decreased debt from 2014 to 2015.

Income Tax Provision

We recognized income tax expense of $0.01 million in the six months ended June 30, 2015, compared to an income tax benefit of $0.6 million for the six months ended June 30, 2014.

Our effective tax rate is 0.1 percent and (44.0) percent for the six months ended June 30, 2015 and 2014, respectively. The effective tax rate for the quarter is impacted by the relative impact of discrete items, which are accounted for as they occur, as well as the recognition of a full valuation against deferred tax assets for our U.S. operations, and the exception provided in ASC740, which is discussed below.

Income tax expense or benefit from continuing operations is generally determined without regard to other categories of earnings, such as discontinued operations and Other Comprehensive Income ("OCI"). An exception is provided in ASC 740, Accounting for Income Taxes, when there is aggregate income from categories other than continuing operations and a loss from continuing operations in the current year. In this case, the tax benefit allocated to continuing operations is the amount by which the loss from continuing operations reduces the tax expenses recorded with respect to the other categories of earnings, even when a valuation allowance has been established against the deferred tax assets. In instances where a valuation allowance is established against current year losses, income from other sources, including unrealized gains from pension and post-retirement benefits recorded as a component of OCI, is considered when determining whether sufficient future taxable income exists to realize the deferred tax assets. As a result, for the six months ended June 30, 2015 we recognized a U.S. tax expense of $0.5 million in OCI related to the unrealized gains on pension and post-retirement benefits, and recognized a corresponding U.S. tax benefit of $0.5 million in our results from continuing operations, before discrete items.

Changes in Financial Condition

As of June 30, 2015, we had total assets of $603.7 million, compared to total assets of $598.4 million at December 31, 2014. The $5.3 million, or 0.9%, an increase in total assets primarily resulted from changes in working capital, offset by a decrease in noncurrent assets. We define working capital as current assets (excluding cash) less current liabilities.

We use working capital and cash flow measures to evaluate the performance of our operations and our ability to meet our financial obligations. We define working capital as current assets (excluding cash) less current liabilities. We require working capital investment to maintain our position as a leading manufacturer and supplier of commercial vehicle components. We continue to strive to align our working capital investment with our customers' purchase requirements and our production schedules.

The following table summarizes the major components of our working capital as of the periods listed below:

(In thousands)	June 30, 2015			December 31, 2014
Accounts receivable	$	77,691		$	63,570
Inventories		40,724			43,065
Deferred income taxes (current)		2,687			2,687
Other current assets		10,899			10,785
Accounts payable		(65,573	)		(56,452	)
Accrued payroll and compensation		(8,375	)		(10,620	)
Accrued interest payable		(12,462	)		(12,428	)
Accrued workers compensation		(2,961	)		(3,137	)
Other current liabilities		(14,374	)		(14,434	)
Working capital	$	28,256		$	23,036

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Significant changes in working capital included:

•

an increase in receivables of $14.1 million due to the comparative increase in revenue in the months leading up to the respective period-end dates;

•

a decrease in inventory of $2.3 million due to lean initiatives; and

•

an increase in accounts payable of $9.1 million primarily due to timing of purchases leading into the end of the respective periods.

Capital Resources and Liquidity

Our primary sources of liquidity during the six months ended June 30, 2015 were cash from operations and cash reserves. We believe that cash from operations, existing cash reserves, and our ABL facility will provide adequate funds for our working capital needs, planned capital expenditures and cash interest payments through 2015 and the foreseeable future.

As of June 30, 2015, we had $30.8 million of cash plus $59.4 million in availability under our ABL Facility for a total liquidity of $90.2 million. As of December 31, 2014, we had $29.8 million in cash plus $40.5 million in availability under our ABL credit facility for total liquidity of $70.3 million.

Our ability to fund working capital needs, planned capital expenditures, scheduled semi-annual interest payments, and to comply with any financial covenants under our ABL Facility depends on our future operating performance and cash flow, which in turn, are subject to prevailing economic conditions and to financial, business and other factors, some of which are beyond our control.

Operating Activities

Net cash provided by operating activities during the six months ended June 30, 2015 amounted to $18.6 million compared to $4.3 million for the period ended June 30, 2014. The cash provided by operating activities in the first six months of 2015 was a result of our positive net income offset by increased working capital requirements, primarily receivables, which are expected in an environment of increasing product demand.

Investing Activities

Net cash used in investing activities totaled $9.2 million for the six months ended June 30, 2015 compared to a use of $14.2 million for the period ended June 30, 2014. Our most significant cash outlays for investing activities are the purchases of property, plant and equipment. In this category, the Company spent $9.2 million during the six months ended June 30, 2015, compared to $14.7 million during the six months ended June 30, 2014. Capital expenditures for 2015 are currently expected to be approximately $25 million to $28 million, which we expect to fund through existing cash from operations, cash reserves, or from our ABL facility.

Financing Activities

Net cash used in financing activities for the six months ended June 30, 2015 was $8.3 million compared to cash provided by financing activities of $8.4 million for the six months ended June 30, 2014. The decrease resulted primarily from payments made and draws on our ABL facility during 2015 compared to 2014.

Bank Borrowing

The ABL Facility

The ABL Facility is a senior secured asset based credit facility in an aggregate principal amount of up to $100.0 million, consisting of a $90.0 million revolving credit facility and a $10.0 million first-in last-out term facility, with the right, subject to certain conditions, to increase the availability under the facility by up to $50.0 million in the aggregate. The ABL Facility currently matures on the earlier of (i) July 11, 2018 and (ii) 90 days prior to the maturity date of the Company's 9.5% first priority senior security notes due August 1, 2018, but may be extended under certain circumstances pursuant to the terms of the ABL Facility.

The ABL Facility provides for loans and letters of credit in an amount up to the aggregate availability under the facility, subject to meeting certain borrowing base conditions, with sub-limits of up to $10.0 million for swingline loans and $20.0 million for letters of credit. Borrowings under the ABL Facility bear interest through maturity at a variable rate based upon, at our option, either LIBOR or the base rate (which is the greatest of one-half of one percent in excess of the federal funds rate, 1.00% in excess of the one-month LIBOR rate and the Agent's prime rate), plus, in each case, an applicable margin. The applicable margin for loans under the first-in last-out term facility that are (i) LIBOR loans ranges, based on the our average excess availability, from 2.75% to 3.25% per annum and (ii) base rate loans ranges, based on our average excess availability, from 1.00% to 1.50%. The applicable

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margin for other advances under the ABL Facility that are (i) LIBOR loans ranges, based on our average excess availability, from 1.75% to 2.25% and (ii) base rate loans ranges, based on our average excess availability, from 0.00% to 0.50%.

The obligations under the ABL Facility are secured by (i) first-priority liens on substantially all of the Company's accounts receivable and inventories, subject to certain exceptions and permitted liens (the "ABL Priority Collateral") and (ii) second-priority liens on substantially all of the Company's owned real property and tangible and intangible assets other than the ABL Priority Collateral, including all of the outstanding capital stock of our domestic subsidiaries, subject to certain exceptions and permitted liens (the "Notes Priority Collateral").

Senior Secured Notes

On July 29, 2010, we issued $310.0 million aggregate principal amount of senior secured notes. Under the terms of the indenture governing the senior secured notes, the senior secured notes bear interest at a rate of 9.5% per year, paid semi-annually in February and August, and mature on August 1, 2018. Prior to maturity we may redeem the senior secured notes on the terms set forth in the indenture governing the senior secured notes. The senior secured notes are guaranteed by the Guarantors, and the senior secured notes and the related guarantees are secured by first priority liens on the Notes Priority Collateral and second priority liens on the ABL Priority Collateral. On February 15, 2011, we completed an exchange offer pursuant to which all our outstanding senior secured notes were exchanged for registered securities with identical terms (other than terms related to registration rights) to the senior secured notes issued July 29, 2010.

Restrictive Debt Covenants.

However, we continue to operate in a challenging commercial environment and our ability to maintain liquidity and comply with our debt covenants may be affected by changes in economic or other conditions that are beyond our control and which are difficult to predict.

Off-Balance Sheet Arrangements.

We do not currently have any off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. From time to time we may enter into operating leases, letters of credit, or take-or-pay obligations related to the purchase of raw materials that would not be reflected in our balance sheet.

Critical Accounting Policies and Estimates.

We have made a number of estimates and assumptions relating to the reporting of results of operations and financial position in the preparation of our financial statements in conformity with accounting principles generally accepted in the United States of America. Actual results could differ significantly from those estimates under different assumptions and conditions. We included in our Form 10-K for the year ended December 31, 2014 a discussion of our most critical accounting policies, which are those that have a material impact on our financial condition or operating performance and require management's most difficult, subjective and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

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Cautionary Statements Regarding Forward-Looking Statements

In this report, we have made various statements regarding current expectations or forecasts of future events, which speak only as of the date the statements, are made. These statements are "forward-looking statements" within the meaning of that term in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are also made from time-to-time in press releases and in oral statements made by the officers of Accuride. Forward-looking statements are identified by the words "estimate," "project," "anticipate," "will continue," "will likely result," "expect," "intend," "believe," "plan," "predict" and similar expressions. Forward looking statements also include, but are not limited to, statements regarding the commercial vehicle market, projections of revenue, income, loss, or working capital, capital expenditure levels, ability to mitigate rising raw material costs through increases in selling prices, plans for future operations, financing needs, the ultimate outcome and impact of any litigation involving Accuride, the sufficiency of our capital resources and plans and assumptions relating to the foregoing.

Such forward-looking statements are based on assumptions and estimates, which although believed to be reasonable, may turn out to be incorrect. Therefore, undue reliance should not be placed upon these estimates and statements. We cannot assure that any of these statements, estimates, or beliefs will be realized and actual results may differ from those contemplated in these "forward-looking statements." We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise. You are advised to consult further disclosures we may make on related subjects in our filings with the SEC. In addition to other factors discussed in this report, some of the important factors that could cause actual results to differ materially from those discussed in the forward-looking statements include, without limitation, the following:

•	a reversal of recent improvements in, or less robust than anticipated commercial vehicle industry recovery in 2015 and 2016 could have a material adverse effect on our business;

•	further demand reductions in the global oil and gas, industrial, and agricultural industries in 2015 and 2016 could have a material adverse effect on our business;

•	the loss of a major customer could have a material adverse effect on our business;

•	competition from products sourced in low cost countries could have an adverse effect on our business;

•	the demands of original equipment manufacturers for price reductions may adversely affect profitability;

•	we use a substantial amount of raw steel, aluminum, cast scrap, and foundry steel and are vulnerable to industry shortages, significant price increases, and surcharges, some of which we may not be able to pass through to our customers;

•

our credit documents contain significant financial and operating covenants that may limit the discretion of management with respect to certain business matters. We must also meet certain financial ratios and tests as described above. Failure to comply with the obligations contained in the debt agreements could result in an event of default, and possibly the acceleration of the related debt and the acceleration of debt under other instruments evidencing debt that may contain cross-acceleration or cross-default provisions;

•	a labor strike may disrupt our supply of products to our customer base;

•	we may encounter increased competition in the future from existing competitors or new competitors;

•	our significant indebtedness may have important consequences, including, but not limited to, impairment of our ability to obtain additional financing, reduction of funds available for operations and business opportunities or limitations on our ability to dispose of assets;

•	significant volatility in the foreign currency markets could have an adverse effect on us;

•	our ability to service our indebtedness is dependent upon operating cash flow;

•	an interruption of performance of our machinery and equipment could have an adverse effect on us;

•	an interruption in supply of metals could reduce our ability to obtain favorable sourcing of such raw materials;

•	any product quality issue or an adverse judgment in legal proceedings could have an adverse effect on our business;

•	we may be subject to liability under certain environmental laws and the cost of compliance with these regulations could have a material adverse effect on our financial condition and may adversely affect our ability to sell or rent such property or to borrow using such property as collateral; and

•	our success depends largely upon the abilities and experience of certain key management personnel and the loss of the services of one or more of these key personnel could have a negative impact on our business.

For further information, refer to the business description and additional risk factors sections included in our Form 10-K for the year ended December 31, 2014, as filed with the SEC.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

In the normal course of doing business, we are exposed to risks associated with changes in foreign exchange rates, raw material/commodity prices, and interest rates. We use derivative instruments to manage these exposures. The objectives for holding derivatives are to minimize the risks using the most effective methods to eliminate or reduce the impacts of these exposures.

Foreign Currency Risk

Certain forecasted transactions, assets, and liabilities are exposed to foreign currency risk. We monitor our foreign currency exposures to maximize the overall effectiveness of our foreign currency derivatives. The principal currencies of exposure are the Canadian Dollar and Mexican Peso. From time to time, we use foreign currency financial instruments to offset the impact of the variability in exchange rates on our operations, cash flows, assets and liabilities. At June 30, 2015, there were open foreign exchange contracts of $10.0 million. The counterparty to the foreign exchange contracts is a financial institution with an investment grade credit rating. The use of forward contracts protects our cash flows against unfavorable movements in exchange rates, to the extent of the amount under contract.

Foreign currency derivative contracts provide only limited protection against currency risks. Factors that could impact the effectiveness of our currency risk management programs include accuracy of sales estimates, volatility of currency markets and the cost and availability of derivative instruments.

Raw Material/Commodity Price Risk

We rely upon the supply of certain raw materials and commodities in our production processes, and we have entered into firm purchase commitments for certain metals and natural gas. Additionally, from time to time, we use commodity price swaps and futures contracts to manage the variability in certain commodity prices on our operations and cash flows. At June 30, 2015 we had no open commodity price swaps or futures contracts.

Interest Rate Risk

We use long-term debt as a primary source of capital. The following table presents the principal cash repayments and related weighted average interest rates by maturity date for our long-term fixed-rate debt and other types of long-term debt at June 30, 2015:

(Dollars in thousands)	2015		2016		2017		2018			2019		Thereafter		Total			Fair Value
Long-term Debt:
Fixed Rate		—		—		—	$	310,000			—		—	$	310,000		$	319,232
Average Rate		—		—		—		9.5	%		—		—		9.5	%
Variable Rate		—		—		—	$	10,000			—		—	$	10,000		$	10,000
Average Rate		—		—		—		2.2	%		—		—		2.2	%

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Item 4.

Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by SEC Rule 13a-15(b), we carried out an evaluation, under the supervision and with the participation of the Company's management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There have been no changes to our internal controls over financial reporting that have materially affected or are reasonably likely to materially affect our internal control over financial reporting during our most recent quarter.

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PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

Neither Accuride nor any of our subsidiaries is a party to any legal proceeding which, in the opinion of management, would have a material adverse effect on our business or financial condition. However, we from time-to-time are involved in ordinary routine litigation incidental to our business, including actions related to premises liability, product liability, contractual liability, intellectual property, workplace safety and environmental claims. We establish reserves for matters in which losses are probable and can be reasonably estimated. While we believe that we have established adequate accruals for our expected future liability with respect to our pending legal actions and proceedings, we cannot assure you that our liability with respect to any such action or proceeding would not exceed our established accruals. Further, we cannot assure that litigation having a material adverse effect on our financial condition will not arise in the future.

Item 6.

Exhibits

Exhibit No.		Description

2.1	—	Agreement and Plan of Merger, dated as of December 24, 2004, by and among Accuride Corporation, Amber Acquisition Corp., Transportation Technologies Industries, Inc., certain signing stockholders and the Company Stockholders Representatives. Previously filed as an exhibit to the Form 8-K filed on December 30, 2004 and incorporated herein by reference.
2.2	—	Amendment to Agreement and Plan of Merger, dated as of January 28, 2005, by and among Accuride Corporation, Amber Acquisition Corp., Transportation Technologies Industries, Inc. certain signing stockholders and the Company Stockholders Representatives. Previously filed as an exhibit to the Form 8-K filed on February 4, 2005 and incorporated herein by reference.
2.3	—	Third Amended Joint Plan of Reorganization for Accuride Corporation, et al. Previously filed as an exhibit to the Form 8-K filed on February 22, 2010, and incorporated herein by reference.
2.4	—	Confirmation Order for Third Amended Plan of Reorganization. Previously filed as an exhibit to the Form 8-K filed on February 22, 2010, and incorporated herein by reference.
2.5	—	Stock Purchase Agreement by and among Accuride Corporation, Truck Components, Inc., Fabco Automotive Corporation and Fabco Holdings Inc., dated September 26, 2011. Previously filed as an exhibit to the Form 8-K filed on September 30, 2011, and incorporated herein by reference.
3.1	—	Amended and Restated Certificate of Incorporation of Accuride Corporation. Previously filed as an exhibit to the Form 8-K (Acc. No. 0001104659-10-012168) filed on March 4, 2010, and incorporated herein by reference.
3.2	—	Certificate of Amendment to the Amended and Restated Certificate of Incorporation. Previously filed as an exhibit to the Form 8-K (ACC No. 0001104659-10-059191) filed on November 18, 2010, and incorporated herein by reference.
3.3	—	Amended and Restated Bylaws of Accuride Corporation. Previously filed as an exhibit to the Form 8-K (Acc. No. 0001104659-10-004054) filed on February 1, 2011, and incorporated herein by reference.
4.1	—	Registration Rights Agreement, dated February 26, 2010, by and between Accuride Corporation and each of the Holders party thereto. Previously filed as an exhibit to the Form 8-K (Acc. No. 0001104659-10-012168) filed on March 4, 2010 and incorporated herein by reference.
4.2	—	Indenture, dated as of July 29, 2010, by and among Accuride Corporation, the guarantors named therein, Wilmington Trust FSB, as trustee and Deutsche Bank Trust Company Americas, with respect to 9.5% First Priority Senior Secured Notes due 2018. Previously filed as an exhibit to the Form 8-K filed on August 2, 2010 (Acc. No. 0001104659-10-012168) and incorporated herein by reference.
4.3	—	Form of 9.5% First Priority Senior Secured Notes due 2018. Previously filed as an exhibit to Form 8-K filed on August 2, 2010 and incorporated herein by reference.
4.4	—	Intercreditor Agreement, dated as of July 29, 2010, among Deutsche Bank Trust Company Americas, as initial ABL Agent, and Deutsche Bank Trust Company Americas, as Senior Secured Notes Collateral Agent. Previously filed as an exhibit to the Form 8-K filed on August 2, 2010 (Acc. No. 0001104659-10-012168) and incorporated herein by reference.
4.5	—	Joinder and Amendment to Intercreditor Agreement, dated July 11, 2013, by and among Wells Fargo, National Association, a national banking association, as the New ABL Agent and Deutsche Bank Trust Company Americas, as Senior Secured Notes Collateral Agent. Previously filed as an exhibit to the Form 8-K filed on July 12, 2013 and incorporated herein by reference.
10.1	—	First Amendment to Sublease, entered into as of May 14, 2015, by and between Accuride Corporation and Menlo Logistics, Inc. Previously filed as an exhibit to the Form 8-K filed on May 15, 2015 and incorporated herein by reference.

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31.1†	—	Section 302 Certification of Richard F. Dauch in connection with the Quarterly Report on Form 10-Q on Accuride Corporation for the period ended June 30,2015.
31.2†	—	Section 302 Certification of Gregory A. Risch in connection with the Quarterly Report on Form 10-Q of Accuride Corporation for the period ended June 30, 2015.
32.1††	—	Certifications Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code.
101.INS†	—	XBRL Instance Document
101.SCH†	—	XBRL Taxonomy Extension Schema Document
101.CAL†	—	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB†	—	XBRL Taxonomy Extension Label Linkbase Document
101.PRE†	—	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF†	—	XBRL Taxonomy Extension Definition Linkbase Document

†	Filed herewith
††	Furnished herewith
*	Management contract or compensatory agreement

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SIGNATURES

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

ACCURIDE CORPORATION

/s/ RICHARD F. DAUCH		Dated: July 27, 2015
Richard F. Dauch
President and Chief Executive Officer
(Principal Executive Officer)

/s/ GREGORY A. RISCH		Dated: July 27, 2015
Gregory A. Risch
Senior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)

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Accuride (ACUZW) Inactive 10-Q2015 Q2 Quarterly report

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