item 14 exhibits financial statement schedules reports form 8k following documents filed part report 1 financial statements financial statements filed part form 10k part ii item 8 2 financial statement schedules valuation qualifying accounts years ended december 31 2001 2000 1999 3 exhibits list exhibits required filed part form 10k included heading exhibit index form 10k incorporated herein reference b company file reports form 8k quarter ended december 31 2001 signatures pursuant requirements section 13 15 securities act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized venture holdings company llc date april 15 2002 larry j winget larry j winget chairman vemco inc venture industries corporation venture mold engineering corporation venture leasing company vemco leasing inc venture service company venture holdings corporation experience management llc venture europe inc venture eu corporation date april 15 2002 michael g torakis michael g torakis president pursuant requirements securities act 1934 report signed following persons behalf registrant capacities indicated april 15 2002 index exhibits 21 share purchase transfer agreement klockner mercator maschinenbau gmbh one hand venture beteiligungs gmbh venture holdings trust hand dated march 8 1999 filed exhibit 21 issuers annual report form 10k year ended december 31 1998 file 33334475 incorporated herein reference schedules agreement listed last two pages agreement filed provided commission supplementary upon request 22 share purchase transfer agreement among neptuno verwaltungsundtreuhandgesellschaft mbh venture verwaltungs gmbh venture holdings trust dated march 8 1999 filed exhibit 22 ventures current report form 8k june 11 1999 file 33334475 incorporated herein reference 23 trust contribution agreement made 27th day may 1999 venture holdings trust venture holdings company llc filed exhibit 23 ventures current report form 8k june 11 1999 file 33334475 incorporated herein reference 31 restated articles organization venture holdings company llc filed exhibit 31 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 32 restated articles incorporation vemco inc filed exhibit 31 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 33 restated articles incorporation venture industries corporation filed exhibit 32 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 34 restated articles incorporation venture mold engineering corporation filed exhibit 33 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 35 restated articles incorporation venture leasing company filed exhibit 34 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 36 restated articles incorporation vemco leasing inc filed exhibit 35 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 37 restated articles incorporation venture holdings corporation filed exhibit 36 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 38 restated articles incorporation venture service company filed exhibit 37 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 39 articles organization experience management llc filed exhibit 39 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 310 articles incorporation venture europe inc filed exhibit 310 ventures registration statement form s4 effective october 21 1999 registration 333 82617 incorporated herein reference 311 articles incorporation venture eu corporation filed exhibit 31 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 312 amended restated operating agreement venture holdings company llc filed exhibit 312 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 313 bylaws vemco inc filed exhibit 39 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 314 bylaws venture industries corporation filed exhibit 310 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 315 bylaws venture mold engineering corporation filed exhibit 311 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 316 bylaws venture leasing company filed exhibit 312 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 317 bylaws vemco leasing inc filed exhibit 313 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 318 bylaws venture holdings corporation filed exhibit 314 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 319 bylaws venture service company filed exhibit 315 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 320 operating agreement experience management llc filed exhibit 320 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 321 bylaws venture europe inc filed exhibit 321 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 322 bylaws venture eu corporation filed exhibit 322 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 41 indenture dated may 27 1999 venture holdings trust huntington national bank trustee regarding 11 senior notes due 2007 including form notes filed exhibit 41 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 411 first supplemental indenture incorporated herein exhibit 41 made 27th day may 1999 among venture holdings trust huntington national bank trustee filed exhibit 411 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 42 indenture dated may 27 1999 venture holdings trust huntington national bank trustee regarding 12 senior subordinated notes due 2009 including form notes filed exhibit 42 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 421 first supplemental indenture filed exhibit 42 made 27th day may 1999 among venture holdings trust huntington national bank trustee filed exhibit 421 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 43 indenture 9 12 senior notes due 2005 including form notes filed exhibit 41 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 431 first amendment indenture incorporated reference exhibit 43 among venture holdings trust vemco inc vemco leasing inc venture industries corporation venture holdings corporation venture leasing company venture mold engineering corporation venture service company issuers huntington national bank trustee made 27th day may 1999 filed exhibit 431 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 432 first supplemental indenture incorporated reference exhibit 43 among venture holdings trust vemco inc vemco leasing inc venture industries corporation venture holdings corporation venture leasing company venture mold engineering corporation venture service company issuers venture holdings company llc experience management llc venture europe inc venture eu corporation guarantors huntington national bank trustee made may 27 1999 filed exhibit 432 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 433 second amendment indenture incorporated reference exhibit 43 among venture holdings trust vemco inc vemco leasing inc venture industries corporation venture holdings corporation venture leasing company venture mold engineering corporation venture service company issuers huntington national bank trustee made may 27 1999 filed exhibit 433 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 434 second supplemental indenture incorporated reference exhibit 43 among venture holdings trust vemco inc vemco leasing inc venture industries corporation venture holdings corporation venture leasing company venture mold engineering corporation venture service company issuers venture holdings company llc huntington national bank trustee made may 27 1999 filed exhibit 434 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 435 guarantee executed venture holdings company llc 27th day may 1999 pursuant terms indenture incorporated reference exhibit 43 including trustees certificate authorization filed exhibit 435 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 436 guarantee executed experience management llc 27th day may 1999 pursuant terms indenture incorporated reference exhibit 43 including trustees certificate authorization filed exhibit 436 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 437 guarantee executed venture europe inc 27th day may 1999 pursuant terms indenture incorporated reference exhibit 43 including trustees certificate authorization filed exhibit 437 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 438 guarantee executed venture eu corporation 27th day may 1999 pursuant terms indenture incorporated reference exhibit 43 including trustees certificate authorization filed exhibit 438 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 44 registrant rights agreement made entered may 27 1999 among venture holdings trust vemco inc vemco leasing inc venture industries corporation venture holdings corporation venture leasing company venture mold engineering corporation venture service company venture europe inc venture eu corporation experience management llc venture holdings company llc issuers banc one capital markets inc goldman sachs co initial purchasers filed exhibit 44 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 101 credit agreement dated may 27 1999 among venture holdings trust lenders defined therein first national bank chicago administrative agent filed exhibit 101 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 1011 first amendment dated june 4 1999 credit agreement incorporated reference exhibit 101 filed exhibit 1011 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 1012 second amendment dated june 29 2000 credit agreement incorporated reference exhibit 101 filed exhibit 1012 ventures quarterly report form 10q quarter ended june 30 2000 file 33386217 incorporated herein reference 1013 third amendment dated march 29 2002 credit agreement 102 isda master agreement dated may 27 1999 venture holdings company llc first national bank chicago filed exhibit 102 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 1021 schedules agreement incorporated reference exhibit 102 filed exhibit 1021 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 103 corporate opportunity agreement made entered 27th day may 1999 larry j winget huntington national bank indenture trustee filed exhibit 103 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 104 corporate opportunity agreement dated february 16 1994 larry j winget comerica bank indenture trustee filed exhibit 103 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 1041 agreement dated october 21 1997 larry j winget bound terms corporate opportunity agreement filed exhibit 103 benefit holders issuers 9 12 senior notes due 2005 filed exhibit 1031 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 105 service agreement dated january 1 1992 venture industries corporation vemco inc venture mold engineering corporation venture leasing company vemco leasing inc deluxe pattern corporation venture automotive corp venture sales engineering corp venture service company filed exhibit 1011 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 106 lease dated november 1 1990 among venture industries corporation venture technical development company venture mold engineering corporation vemco inc deluxe pattern company venture automotive corp larry j winget alicia winget acropolis resort filed exhibit 1014 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 107 real estate lease agreement dated december 7 1988 harper properties clinton township limited partnership venture industries corporation harper lease filed exhibit 1015 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1071 first amendment real estate lease agreement dated december 30 1993 harper properties clinton township limited partnership venture industries corporation harper lease filed exhibit 10151 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 108 machinery equipment lease agreement dated december 7 1988 realven corporation venture industries corporation realven lease filed exhibit 1016 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1081 first amendment machinery equipment lease agreement dated december 30 1993 realven corporation venture industries corporation realven lease filed exhibit 10161 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 109 real estate lease agreement dated january 27 1989 venture real estate inc venture mold engineering corporation commerce road facility filed exhibit 1017 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1010 real estate lease agreement dated august 1 1992 venture real estate inc venture industries corporation 17400 malyn filed exhibit 1018 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1011 real estate lease agreement dated august 1 1992 venture real estate inc venture industries corporation 17350 malyn filed exhibit 1019 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1012 farm country real estate company vemco inc real estate availability usage agreement dated april 24 1992 filed exhibit 1020 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1013 sales representation agreement vemco inc venture sales engineering corporation filed exhibit 1021 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 10131 sales representation agreement venture industries corporation venture sales engineering corporation filed exhibit 10211 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 10132 amendment salesmanagement representative agreements dated october 1 2000 venture industries corporation vemco inc venture holdings corporation venture sales engineering corporation filed exhibit 10132 ventures annual report form 10 k year ended december 31 2000 file number 33386217 incorporated herein reference 10133 amendment salesmanagementrental usage agreements dated december 12 2001 venture industries corporation venture holdings corporation vemco venture sales engineering corp venture heavy machinery llc realven inc venture real estate inc venture real estate acquisition company venture equipment acquisition company venture automotive corp 1014 manufacturing agreement venture automotive corp vemco inc filed exhibit 1022 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1015 machinery usage agreements larry j winget living trust venture industries corporation filed exhibit 1023 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 10151 machinery usage agreement larry j winget living trust vemco inc filed exhibit 10231 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1016 machinery usage agreement deluxe pattern corporation venture mold engineering filed exhibit 1024 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1017 form machinery equipment lease agreement venture industries corporation nova industries inc filed exhibit 1025 ventures registration statement form s1 effective february 8 1994 registration no3372826 incorporated herein reference 1018 form machinery equipment lease agreement venture industries corporation nova industries inc filed exhibit 1026 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1019 indemnification agreement company larry j winget filed exhibit 1019 filed exhibit 1019 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 1020 indemnification agreement company michael g torakis filed exhibit 1020 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 1021 indemnification agreement company james schutz filed exhibit 1021 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 1022 insurance policies issued pompo insurance indemnity company ltd registrants affiliated companies filed exhibit 1032 ventures registration statement form s1 effective february 8 1994 registration no3372826 incorporated herein reference 1023 real estate usage agreement venture real estate acquisition company venture industries corporation dated february 15 1995 filed exhibit 1023 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 1024 machinery usage agreement venture equipment acquisition company venture industries corporation dated february 15 1995 filed exhibit 1024 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 1025 venture industries group participation agreement venture industries corporation venture asia pacific pty ltd filed exhibit 1029 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 1026 license agreement proprietary technologies processes dated july 2 1997 larry j winget venture industries corporation vemco inc venture mold engineering corporation venture industries canada ltd vemco leasing inc venture leasing company venture service company venture holdings corporation venture holdings trust filed exhibit 1030 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 1027 license agreement patents dated july 2 1997 larry j winget venture industries corporation vemco inc venture mold engineering corporation venture industries canada ltd vemco leasing inc venture leasing company venture service company venture holdings corporation venture holdings trust filed exhibit 1031 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 1028 purchase agreement dated may 25 1999 relating 125000000 11 senior notes due 2007 125000000 12 senior subordinated notes due 2009 filed exhibit 104 ventures quarterly report form 10q quarter ended june 30 1999 file 33334475 incorporated herein reference 1029 purchase agreement entered effective 15th day october 1999 among venture mold engineering corporation shelby american inc filed exhibit 1029 ventures annual report form 10k year ended december 31 1999 registration 33382617 incorporated herein reference 1030 agreement tooling purchases north american entered december 12 2001 venture holdings company llc venture industries corporation venture mold engineering corporation vemco inc vemco leasing inc venture leasing company venture europe inc venture eu corporation venture holdings corporation venture service company experience management llc deluxe pattern corporation 121 statement regarding computation ratio earnings fixed charges 14a2 valuation qualifying accounts 211 subsidiaries registrants filed exhibit 211 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference item 14 exhibits financial statement schedules reports form 8k following documents filed part report 1 financial statements financial statements filed part form 10k listed part ii item 8 2 financial statement schedules valuation qualifying accounts years ended december 31 1999 1998 1997 3 exhibits list exhibits required filed part form 10k included heading exhibit index form 10k incorporated herein reference b company file reports form 8k quarter ended december 31 1999 signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized venture holdings company llc date march 30 2000 larry j winget larry j winget chairman vemco inc venture industries corporation venture mold engineering corporation venture leasing company vemco leasing incventure service company venture holdings corporation experience management llc venture europe inc venture eu corporation date march 30 2000 michael g torakis michael g torakis president pursuant requirements securities exchange act 1934 report signed following persons capacities indicated march 30 2000 index exhibits 21 share purchase transfer agreement klockner mercator maschinenbau gmbh one hand venture beteiligungs gmbh venture holdings trust hand dated march 8 1999 filed exhibit 21 issuers annual report form 10k year ended december 31 1998 file 33334475 incorporated herein reference schedules agreement listed last two pages agreement filed provided commission supplementally upon request 22 share purchase transfer agreement among neptuno verwaltungsundtreuhandgesellschaft mbh venture verwaltungs gmbh venture holdings trust dated march 8 1999 filed exhibit 22 ventures current report form 8k june 11 1999 file 33334475 incorporated herein reference 23 trust contribution agreement made 27th day may 1999 venture holdings trust venture holdings company llc filed exhibit 23 ventures current report form 8k june 11 1999 file 33334475 incorporated herein reference 31 restated articles organization venture holdings company llc filed exhibit 31 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 32 restated articles incorporation vemco inc filed exhibit 31 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 33 restated articles incorporation venture industries corporation filed exhibit 32 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 34 restated articles incorporation venture mold engineering corporation filed exhibit 33 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 35 restated articles incorporation venture leasing company filed exhibit 34 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 36 restated articles incorporation vemco leasing inc filed exhibit 35 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 37 restated articles incorporation venture holdings corporation filed exhibit 36 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 38 restated articles incorporation venture service company filed exhibit 37 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 39 articles organization experience management llc filed exhibit 39 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 310 articles incorporation venture europe inc filed exhibit 310 ventures registration statement form s4 effective october 21 1999 registration 333 82617 incorporated herein reference 311 articles incorporation venture eu corporation filed exhibit 31 ventures registration statement form s4 effective october 21 1999 registration 333 82617 incorporated herein reference 312 amended restated operating agreement venture holdings company llc filed exhibit 312 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 313 bylaws vemco inc filed exhibit 39 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 314 bylaws venture industries corporation filed exhibit 310 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 315 bylaws venture mold engineering corporation filed exhibit 311 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 316 bylaws venture leasing company filed exhibit 312 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 317 bylaws vemco leasing inc filed exhibit 313 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 318 bylaws venture holdings corporation filed exhibit 314 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 319 bylaws venture service company filed exhibit 315 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 320 operating agreement experience management llc filed exhibit 320 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 321 bylaws venture europe inc filed exhibit 321 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 322 bylaws venture eu corporation filed exhibit 322 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 41 indenture dated may 27 1999 venture holdings trust huntington national bank trustee regarding 11 senior notes due 2007 including form notes filed exhibit 41 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 411 first supplemental indenture incorporated herein exhibit 41 made 27th day may 1999 among venture holdings trust huntington national bank trustee filed exhibit 411 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 42 indenture dated may 27 1999 venture holdings trust huntington national bank trustee regarding 12 senior subordinated notes due 2009 including form notes filed exhibit 42 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 421 first supplemental indenture filed exhibit 42 made 27th day may 1999 among venture holdings trust huntington national bank trustee filed exhibit 421 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 43 indenture 9 12 senior notes due 2005 including form notes filed exhibit 41 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 431 first amendment indenture incorporated reference exhibit 43 among venture holdings trust vemco inc vemco leasing inc venture industries corporation venture holdings corporation venture leasing company venture mold engineering corporation venture service company issuers huntington national bank trustee made 27th day may 1999 filed exhibit 431 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 432 first supplemental indenture incorporated reference exhibit 43 among venture holdings trust vemco inc vemco leasing inc venture industries corporation venture holdings corporation venture leasing company venture mold engineering corporation venture service company issuers venture holdings company llc experience management llc venture europe inc venture eu corporation guarantors huntington national bank trustee made may 27 1999 filed exhibit 432 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 433 second amendment indenture incorporated reference exhibit 43 among venture holdings trust vemco inc vemco leasing inc venture industries corporation venture holdings corporation venture leasing company venture mold engineering corporation venture service company issuers huntington national bank trustee made may 27 1999 filed exhibit 433 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 434 second supplemental indenture incorporated reference exhibit 43 among venture holdings trust vemco inc vemco leasing inc venture industries corporation venture holdings corporation venture leasing company venture mold engineering corporation venture service company issuers venture holdings company llc huntington national bank trustee made may 27 1999 filed exhibit 434 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 435 guarantee executed venture holdings company llc 27th day may 1999 pursuant terms indenture incorporated reference exhibit 43 including trustees certificate authorization filed exhibit 435 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 436 guarantee executed experience management llc 27th day may 1999 pursuant terms indenture incorporated reference exhibit 43 including trustees certificate authorization filed exhibit 436 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 437 guarantee executed venture europe inc 27th day may 1999 pursuant terms indenture incorporated reference exhibit 43 including trustees certificate authorization 438 guarantee executed venture eu corporation 27th day may 1999 pursuant terms indenture incorporated reference exhibit 43 including trustees certificate authorization filed exhibit 438 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 44 registrant rights agreement made entered may 27 1999 among venture holdings trust vemco inc vemco leasing inc venture industries corporation venture holdings corporation venture leasing company venture mold engineering corporation venture service company venture europe inc venture eu corporation experience management llc venture holdings company llc issuers banc one capital markets inc goldman sachs co initial purchasers filed exhibit 44 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 101 credit agreement dated may 27 1999 among venture holdings trust lenders defined therein first national bank chicago administrative agent filed exhibit 101 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 1011 first amendment dated june 4 1999 credit agreement incorporated reference exhibit 101 filed exhibit 1011 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 102 isda master agreement dated may 27 1999 venture holdings company llc first national bank chicago filed exhibit 102 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 1021 schedules agreement incorporated reference exhibit 102 filed exhibit 1021 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 103 corporate opportunity agreement made entered 27th day may 1999 larry j winget huntington national bank indenture trustee filed exhibit 103 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 104 corporate opportunity agreement dated february 16 1994 larry j winget comerica bank indenture trustee filed exhibit 103 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 1041 agreement dated october 21 1997 larry j winget bound terms corporate opportunity agreement filed exhibit 103 benefit holders issuers 912 senior notes due 2005 filed exhibit 1031 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 105 service agreement dated january 1 1992 venture industries corporation vemco inc venture mold engineering corporation venture leasing company vemco leasing inc deluxe pattern corporation venture automotive corp venture sales engineering corp venture service company filed exhibit 1011 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 106 lease dated november 1 1990 among venture industries corporation venture technical development company venture mold engineering corporation vemco inc deluxe pattern company venture automotive corp larry j winget alicia winget acropolis resort filed exhibit 1014 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 107 real estate lease agreement dated december 7 1988 harper properties clinton township limited partnership venture industries corporation harper lease filed exhibit 1015 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 107 first amendment real estate lease agreement dated december 30 1993 harper properties clinton township limited partnership venture industries corporation harper lease filed exhibit 10151 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 108 machinery equipment lease agreement dated december 7 1988 realven corporation venture industries corporation realven lease filed exhibit 1016 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1081 first amendment machinery equipment lease agreement dated december 30 1993 realven corporation venture industries corporation realven lease filed exhibit 10161 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 109 real estate lease agreement dated january 27 1989 venture real estate inc venture mold engineering corporation commerce road facility filed exhibit 1017 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1010 real estate lease agreement dated august 1 1992 venture real estate inc venture industries corporation 17400 malyn filed exhibit 1018 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1011 real estate lease agreement dated august 1 1992 venture real estate inc venture industries corporation 17350 malyn filed exhibit 1019 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1012 farm country real estate company vemco inc real estate availability usage agreement dated april 24 1992 filed exhibit 1020 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1013 sales representation agreement vemco inc venture sales engineering corporation filed exhibit 1021 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 10131 sales representation agreement venture industries corporation venture sales engineering corporation filed exhibit 10211 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1014 manufacturing agreement venture automotive corp vemco inc filed exhibit 1022 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1015 machinery usage agreements larry j winget living trust venture industries corporation filed exhibit 1023 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 10151 machinery usage agreement larry j winget living trust vemco inc filed exhibit 10231 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1016 machinery usage agreement deluxe pattern corporation venture mold engineering filed exhibit 1024 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1017 form machinery equipment lease agreement venture industries corporation nova industries inc filed exhibit 1025 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1018 form machinery equipment lease agreement venture industries corporation nova industries inc filed exhibit 1026 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1019 indemnification agreement company larry j winget filed exhibit 1019 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 1020 indemnification agreement company michael g torakis filed exhibit 1020 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 1021 indemnification agreement company james schutz filed exhibit 1021 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 1022 insurance policies issued pompo insurance indemnity company ltd registrants affiliated companies filed exhibit 1032 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1023 real estate usage agreement venture real estate acquisition company venture industries corporation dated february 15 1995 filed exhibit 1023 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 1024 machinery usage agreement venture equipment acquisition company venture industries corporation dated february 15 1995 filed exhibit 1024 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 1025 venture industries group participation agreement venture industries corporation venture asia pacific pty ltd filed exhibit 1029 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 1026 license agreement proprietary technologies processes dated july 2 1997 larry j winget venture industries corporation vemco inc venture mold engineering corporation venture industries canada ltd vemco leasing inc venture leasing company venture service company venture holdings corporation venture holdings trust filed exhibit 1030 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 1027 license agreement patents dated july 2 1997 larry j winget venture industries corporation vemco inc venture mold engineering corporation venture industries canada ltd vemco leasing inc venture leasing company venture service company venture holdings corporation venture holdings trust filed exhibit 1031 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 1028 purchase agreement dated may 25 1999 relating 125000000 11 senior notes due 2007 125000000 12 senior subordinated notes due 2009 filed exhibit 104 ventures quarterly report form 10q quarter ended june 30 1999 file 33334475 incorporated herein reference 1029 purchase agreement entered effective 15th day october 1999 among venture mold engineering corporation shelby american inc 121 statement regarding computation ratio earnings fixed charges 211 subsidiaries registrants filed exhibit 211 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 271 financial data schedule item 14 exhibits financial statement schedules reports form 8k following documents filed part report 1 financial statements financial statements filed part form 10k part ii item 8 2 financial statement schedules valuation qualifying accounts years ended december 31 2000 1999 1998 3 exhibits list exhibits required filed part form 10k included heading exhibit index form 10k incorporated herein reference b company file reports form 8k quarter ended december 31 2000 signatures pursuant requirements section 13 15 securities act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized venture holdings company llc date april 2 2001 larry j winget larry j winget chairman vemco inc venture industries corporation venture mold engineering corporation venture leasing company vemco leasing inc venture service company venture holdings corporation experience management llc venture europe inc venture eu corporation date april 2 2001 michael g torakis michael g torakis president pursuant requirements securities act 1934 report signed following persons behalf registrant capacities indicated april 2 2001 signatures title larry j winget chairman principal executive officer special advisor venture director larry j winget registrant michael g torakis president principal executive officer director registrant michael g torakis james schutz director registrant venture james schutz james e butler jr principal financial officer principal accounting officer registrant james e butler jr director venture holdings corporation index exhibits 21 share purchase transfer agreement klockner mercator maschinenbau gmbh one hand venture beteiligungs gmbh venture holdings trust hand dated march 8 1999 filed exhibit 21 issuers annual report form 10k year ended december 31 1998 file 33334475 incorporated herein reference schedules agreement listed last two pages agreement filed provided commission supplementally upon request 22 share purchase transfer agreement among neptuno verwaltungsundtreuhandgesellschaft mbh venture verwaltungs gmbh venture holdings trust dated march 8 1999 filed exhibit 22 ventures current report form 8k june 11 1999 file 33334475 incorporated herein reference 23 trust contribution agreement made 27th day may 1999 venture holdings trust venture holdings company llc filed exhibit 23 ventures current report form 8k june 11 1999 file 33334475 incorporated herein reference 31 restated articles organization venture holdings company llc filed exhibit 31 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 32 restated articles incorporation vemco inc filed exhibit 31 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 33 restated articles incorporation venture industries corporation filed exhibit 32 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 34 restated articles incorporation venture mold engineering corporation filed exhibit 33 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 35 restated articles incorporation venture leasing company filed exhibit 34 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 36 restated articles incorporation vemco leasing inc filed exhibit 35 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 37 restated articles incorporation venture holdings corporation filed exhibit 36 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 38 restated articles incorporation venture service company filed exhibit 37 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 39 articles organization experience management llc filed exhibit 39 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 310 articles incorporation venture europe inc filed exhibit 310 ventures registration statement form s4 effective october 21 1999 registration 333 82617 incorporated herein reference 311 articles incorporation venture eu corporation filed exhibit 31 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 312 amended restated operating agreement venture holdings company llc filed exhibit 312 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 313 bylaws vemco inc filed exhibit 39 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 314 bylaws venture industries corporation filed exhibit 310 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 315 bylaws venture mold engineering corporation filed exhibit 311 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 316 bylaws venture leasing company filed exhibit 312 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 317 bylaws vemco leasing inc filed exhibit 313 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 318 bylaws venture holdings corporation filed exhibit 314 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 319 bylaws venture service company filed exhibit 315 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 320 operating agreement experience management llc filed exhibit 320 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 321 bylaws venture europe inc filed exhibit 321 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 322 bylaws venture eu corporation filed exhibit 322 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 41 indenture dated may 27 1999 venture holdings trust huntington national bank trustee regarding 11 senior notes due 2007 including form notes filed exhibit 41 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 411 first supplemental indenture incorporated herein exhibit 41 made 27th day may 1999 among venture holdings trust huntington national bank trustee filed exhibit 411 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 42 indenture dated may 27 1999 venture holdings trust huntington national bank trustee regarding 12 senior subordinated notes due 2009 including form notes filed exhibit 42 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 421 first supplemental indenture filed exhibit 42 made 27th day may 1999 among venture holdings trust huntington national bank trustee filed exhibit 421 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 43 indenture 9 12 senior notes due 2005 including form notes filed exhibit 41 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 431 first amendment indenture incorporated reference exhibit 43 among venture holdings trust vemco inc vemco leasing inc venture industries corporation venture holdings corporation venture leasing company venture mold engineering corporation venture service company issuers huntington national bank trustee made 27th day may 1999 filed exhibit 431 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 432 first supplemental indenture incorporated reference exhibit 43 among venture holdings trust vemco inc vemco leasing inc venture industries corporation venture holdings corporation venture leasing company venture mold engineering corporation venture service company issuers venture holdings company llc experience management llc venture europe inc venture eu corporation guarantors huntington national bank trustee made may 27 1999 filed exhibit 432 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 433 second amendment indenture incorporated reference exhibit 43 among venture holdings trust vemco inc vemco leasing inc venture industries corporation venture holdings corporation venture leasing company venture mold engineering corporation venture service company issuers huntington national bank trustee made may 27 1999 filed exhibit 433 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 434 second supplemental indenture incorporated reference exhibit 43 among venture holdings trust vemco inc vemco leasing inc venture industries corporation venture holdings corporation venture leasing company venture mold engineering corporation venture service company issuers venture holdings company llc huntington national bank trustee made may 27 1999 filed exhibit 434 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 435 guarantee executed venture holdings company llc 27th day may 1999 pursuant terms indenture incorporated reference exhibit 43 including trustees certificate authorization filed exhibit 435 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 436 guarantee executed experience management llc 27th day may 1999 pursuant terms indenture incorporated reference exhibit 43 including trustees certificate authorization filed exhibit 436 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 437 guarantee executed venture europe inc 27th day may 1999 pursuant terms indenture incorporated reference exhibit 43 including trustees certificate authorization filed exhibit 437 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 438 guarantee executed venture eu corporation 27th day may 1999 pursuant terms indenture incorporated reference exhibit 43 including trustees certificate authorization filed exhibit 438 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 44 registrant rights agreement made entered may 27 1999 among venture holdings trust vemco inc vemco leasing inc venture industries corporation venture holdings corporation venture leasing company venture mold engineering corporation venture service company venture europe inc venture eu corporation experience management llc venture holdings company llc issuers banc one capital markets inc goldman sachs co initial purchasers filed exhibit 44 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 101 credit agreement dated may 27 1999 among venture holdings trust lenders defined therein first national bank chicago administrative agent filed exhibit 101 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 1011 first amendment dated june 4 1999 credit agreement incorporated reference exhibit 101 filed exhibit 1011 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 1012 second amendment dated june 29 2000 credit agreement incorporated reference exhibit 101 filed exhibit 101 ventures quarterly report form 10q quarter ended june 30 2000 file 33386217 incorporated herein reference 102 isda master agreement dated may 27 1999 venture holdings company llc first national bank chicago filed exhibit 102 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 1021 schedules agreement incorporated reference exhibit 102 filed exhibit 1021 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 103 corporate opportunity agreement made entered 27th day may 1999 larry j winget huntington national bank indenture trustee filed exhibit 103 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 104 corporate opportunity agreement dated february 16 1994 larry j winget comerica bank indenture trustee filed exhibit 103 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 1041 agreement dated october 21 1997 larry j winget bound terms corporate opportunity agreement filed exhibit 103 benefit holders issuers 9 12 senior notes due 2005 filed exhibit 1031 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 105 service agreement dated january 1 1992 venture industries corporation vemco inc venture mold engineering corporation venture leasing company vemco leasing inc deluxe pattern corporation venture automotive corp venture sales engineering corp venture service company filed exhibit 1011 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 106 lease dated november 1 1990 among venture industries corporation venture technical development company venture mold engineering corporation vemco inc deluxe pattern company venture automotive corp larry j winget alicia winget acropolis resort filed exhibit 1014 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 107 real estate lease agreement dated december 7 1988 harper properties clinton township limited partnership venture industries corporation harper lease filed exhibit 1015 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1071 first amendment real estate lease agreement dated december 30 1993 harper properties clinton township limited partnership venture industries corporation harper lease filed exhibit 10151 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 108 machinery equipment lease agreement dated december 7 1988 realven corporation venture industries corporation realven lease filed exhibit 1016 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1081 first amendment machinery equipment lease agreement dated december 30 1993 realven corporation venture industries corporation realven lease filed exhibit 10161 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 109 real estate lease agreement dated january 27 1989 venture real estate inc venture mold engineering corporation commerce road facility filed exhibit 1017 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1010 real estate lease agreement dated august 1 1992 venture real estate inc venture industries corporation 17400 malyn filed exhibit 1018 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1011 real estate lease agreement dated august 1 1992 venture real estate inc venture industries corporation 17350 malyn filed exhibit 1019 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1012 farm country real estate company vemco inc real estate availability usage agreement dated april 24 1992 filed exhibit 1020 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1013 sales representation agreement vemco inc venture sales engineering corporation filed exhibit 1021 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 10131 sales representation agreement venture industries corporation venture sales engineering corporation filed exhibit 10211 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 10132 amendment salesmanagement representative agreements dated october 1 2000 venture industries corporation vemco inc venture holdings corporation venture sales engineering corporation 1014 manufacturing agreement venture automotive corp vemco inc filed exhibit 1022 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1015 machinery usage agreements larry j winget living trust venture industries corporation filed exhibit 1023 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 10151 machinery usage agreement larry j winget living trust vemco inc filed exhibit 10231 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1016 machinery usage agreement deluxe pattern corporation venture mold engineering filed exhibit 1024 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1017 form machinery equipment lease agreement venture industries corporation nova industries inc filed exhibit 1025 ventures registration statement form s1 effective february 8 1994 registration no3372826 incorporated herein reference 1018 form machinery equipment lease agreement venture industries corporation nova industries inc filed exhibit 1026 ventures registration statement form s1 effective february 8 1994 registration 3372826 incorporated herein reference 1019 indemnification agreement company larry j winget filed exhibit 1019 filed exhibit 1019 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 1020 indemnification agreement company michael g torakis filed exhibit 1020 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 1021 indemnification agreement company james schutz filed exhibit 1021 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference 1022 insurance policies issued pompo insurance indemnity company ltd registrants affiliated companies filed exhibit 1032 ventures registration statement form s1 effective february 8 1994 registration no3372826 incorporated herein reference 1023 real estate usage agreement venture real estate acquisition company venture industries corporation dated february 15 1995 filed exhibit 1023 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 1024 machinery usage agreement venture equipment acquisition company venture industries corporation dated february 15 1995 filed exhibit 1024 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 1025 venture industries group participation agreement venture industries corporation venture asia pacific pty ltd filed exhibit 1029 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 1026 license agreement proprietary technologies processes dated july 2 1997 larry j winget venture industries corporation vemco inc venture mold engineering corporation venture industries canada ltd vemco leasing inc venture leasing company venture service company venture holdings corporation venture holdings trust filed exhibit 1030 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 1027 license agreement patents dated july 2 1997 larry j winget venture industries corporation vemco inc venture mold engineering corporation venture industries canada ltd vemco leasing inc venture leasing company venture service company venture holdings corporation venture holdings trust filed exhibit 1031 ventures registration statement form s4 effective october 27 1997 registration 33334475 incorporated herein reference 1028 purchase agreement dated may 25 1999 relating 125000000 11 senior notes due 2007 125000000 12 senior subordinated notes due 2009 filed exhibit 104 ventures quarterly report form 10q quarter ended june 30 1999 file 33334475 incorporated herein reference 1029 purchase agreement entered effective 15th day october 1999 among venture mold engineering corporation shelby american inc filed exhibit 1029 ventures annual report form 10k year ended december 31 1999 registration 33382617 incorporated herein reference 121 statement regarding computation ratio earnings fixed charges 14a2 valuation qualifying accounts 211 subsidiaries registrants filed exhibit 211 ventures registration statement form s4 effective october 21 1999 registration 33382617 incorporated herein reference item 7 managements discussion analysis financial condition results operations results operations following discussion analysis contains number forward looking statements within meaning securities exchange act 1934 subject number risks uncertainties factors include among others following international national local political economic market conditions incremental costs slowed automobile production effects may occur result september 2001 terrorist attacks world trade center pentagon reactions thereto us suppliers customers possible future terrorist attacks demographic changes size growth automobile market plastic automobile component market ability sustain manage forecast growth size timing mix purchases products ability realize savings focus reducing controlling costs ability realize benefits general tax reduction plans new product development introduction existing government regulations changes failure comply government regulations adverse publicity dependence upon original equipment manufacturers liability claims asserted us competition loss significant customers suppliers fluctuations difficulty forecasting operating results unfavorable currency exchange rates relative us dollar changes business strategy development plans business disruptions product recalls warranty costs ability attract retain qualified personnel ability protect technology retention earnings control level affiliated transactions may 28 1999 acquired peguform gmbh leading international designer manufacturer complete interior modules door panels dashboards exterior modules structural plastic body parts including bumper fascias hatchback doors following table sets forth periods indicated consolidated statements income expressed percentage net sales table subsequent discussion read conjunction consolidated financial statements notes thereto included elsewhere herein year ended december 31 2001 compared year ended december 31 2000 net sales increased 323 million year ended december 31 2001 18 18623 million compared net sales 18299 million year ended december 31 2000 foreign sales increased 851 million 68 due higher tooling sales increased volume content per vehicle increase offset decrease 28 average currency exchange rate fiscal years 2000 2001 resulted reduction foreign sales approximately 38 million domestically sales decreased 495 million 85 due general softening north american automotive market included net sales 85 million recovered oem due program delays incurred 2000 2001 foreign operations gross profit year ended december 31 2001 increased 16 million 7 2292 million compared 2276 million year ended december 31 2000 percentage net sales gross profit decreased 124 year ended december 31 2000 123 year ended december 31 2001 domestically gross profit percent sales 125 result implementation lean manufacturing techniques despite decrease sales compared 98 year ended december 31 2000 internationally gross profit percent sales 118 year ended december 31 2001 compared 135 year ended december 31 2000 decrease 17 decease due start manufacturing inefficiencies average lower margins increased tooling sales expect maintain current efficiencies obtain manufacturing efficiencies 2002 selling general administrative expense year ended december 31 2001 decreased 164 million 126 1140 million compared 1304 million year ended december 31 2000 percentage net sales selling general administrative expense decreased 61 year ended december 31 2001 compared 71 year ended december 31 2000 decrease percent net sales absolute dollars primarily attributable cost control efforts involving increased review expenses reduction salaried employees venture sales engineering related party irrevocably forgave 46 million management fees charged us accounting approximately 02 decrease done inducement us lower quoted price prospective new program oem expectation receiving new program expect selling general administrative expenses lower fiscal 2002 due adoption fasb statement 142 wherein cease amortizing goodwill begin periodically evaluate goodwill impairment amortization expense goodwill amortization fiscal 2001 44 million result foregoing income operations year ended december 31 2001 increased 178 million 185 1138 million compared 960 million year ended december 31 2000 percentage net sales income operations increased 61 fiscal 2001 52 fiscal 2000 interest expense decreased 48 million 977 million fiscal 2001 compared 1025 million fiscal 2000 decrease due overall reduction interest rates mitigated higher average borrowings decrease interest expense offset increase 27 million related noncash amortization termination interest rate swaps increased 25 million year ended december 31 2000 52 million year ended december 31 2001 expense income primarily consists 187 million unrealized currency exchange losses intercompany loans 14 million non cash write deposits made shelby american inc fiscal years 2000 1999 see item 13 certain relationships related transactionbusiness relationships offset approximately 7 million income due settlement related pricing issues arising subsequent prior acquisition domestic operations see item 3 legal proceedings income expense year ended december 31 2000 consisted 349 million net realized unrealized gains crosscurrency interest rate swap foreign exchange collar derivative transactions third party interest income 40 million offset realized unrealized currency exchange losses 333 million see note 8 notes consolidated financial statements year ended december 31 2001 reported net tax benefit 131 million 187 million tax benefit result decreasing currency exchange rates related euro offset 56 million income tax expense charged normal operations venture holdings corporation peguform group companies due foregoing net income year ended december 31 2001 10 million compared net income 90 million year ended december 31 2000 decrease 80 million percentage net sales net income decreased 04 01 year ended december 31 2000 compared year ended december 31 1999 net sales increased 4638 million year ended december 31 2000 339 18299 million compared net sales 13662 million year ended december 31 1999 increase mainly due addition peguforms net sales twelve months 2000 compared seven months 1999 proforma basis sales decreased 966 million 1999 743 million decrease due euro devaluation offset net increases european volumes domestically sales decreased 224 million 37 due general softening automotive market gross profit year ended december 31 2000 increased 769 million 510 2276 million compared 1507 million year ended december 31 1999 percentage net sales gross profit increased 110 year ended december 31 1999 124 year ended december 31 2000 dollar increase mainly due addition peguforms activity twelve months 2000 compared seven months 1999 domestically gross profit percent sales increased 10 due implementation lean manufacturing techniques despite sales reductions internationally gross profit percent sales increased 10 due manufacturing efficiencies expect continue achieve manufacturing efficiencies 2001 effective january 1 2001 granted daimlerchrysler corporation north america 5 sales price reduction attempting recover either suppliers operating efficiencies may able fully offset reduction could reduce margins selling general administrative expense year ended december 31 2000 increased 212 million 194 1304 million compared 1092 million year ended december 31 1999 percentage net sales selling general administrative expense decreased 71 year ended december 31 2000 compared 80 year ended december 31 1999 overall dollar increase mainly due addition peguforms activity twelve months 2000 compared seven months 1999 decrease percent net sales primarily attributable peguforms lower selling general administrative expense percentage net sales relative ventures venture sales engineering related party eliminated 26 million management fees relating sales commissions charged us done due slow automotive industry ensure remained competitive result foregoing income operations year ended december 31 2000 increased 548 million 1329 960 million compared 412 million year ended december 31 1999 percentage net sales income operations increased 52 fiscal 2000 30 fiscal 1999 interest expense increased 299 million 1025 million fiscal 2000 compared 726 million fiscal 1999 increase result incurring interest twelve months 2000 opposed seven months 1999 related increased debt associated acquisition peguform rising interest rates 25 million expense noncash amortization termination interest rate swaps income expense includes 758 million realized gains 409 million unrealized losses related crosscurrency interest rate swap foreign exchange collar transactions third party interest income 40 million income expense also includes unrealized currency losses 419 million offset realized currency gains 86 million see note 8 notes consolidated financial statements year ended december 31 2000 reported net tax benefit 113 million tax benefit generated result finalizing restructuring peguform companies 31 million reduction tax rates germany 227 million recognition benefit nol carryforwards 145 million income tax expense charged normal operations venture holdings corporation peguform group companies due foregoing net income year ended december 31 2000 90 million compared net loss 145 million year ended december 31 1999 liquidity capital resources consolidated working capital 1415 million december 31 2001 compared 1295 million december 31 2000 increase 120 million working capital ratio 13x december 31 2001 2000 respectively net cash provided operating activities 631 million year ended december 31 2001 compared net cash provided operating activities 613 million year ended december 31 2000 increase caused net increase working capital requirements approximately 230 million consisting increase current assets accounts payable deferred taxes offset decreases accounts receivables inventory accrued expenses liabilities addition net increase 169 million fiscal year 2001 associated currency hedging transaction losses compared year ended december 31 2000 changes offset increase net income adding back noncash charges 79 million capital expenditures 772 million year ended december 31 2001 compared 857 million year ended december 31 2000 continue upgrade machinery equipment paint lines facilities handle expected increased volumes general reconditioning equipment 2000 received 785 million termination derivatives resulted net use cash 65 million investment activities ordinary course business seek additional business existing new customers continue compete right supply new components could material us require substantial capital investment machinery equipment tooling facilities date hereof however formal commitments respect material business assuming constant currency relative us dollar expect increasing sales next several years slight increase 2002 however subject certain expectations product demand currency movements thus give assurance increased sales expectations achieved volume assumptions based upon information obtain customers generally assuming currency movements average current levels later years may required replace update paint lines handle expected volumes decision made late 2002 would reflected 2003 expenditures net cash provided financing activities 168 million year ended december 31 2001 compared net cash used financing activities 434 million year ended december 31 2000 years reflects scheduled paydown debt offset increased net borrowings revolving credit agreement fund operations senior credit facility provides borrowings 1 1750 million revolving credit facility addition matters described used working capital general corporate purposes 2 750 million five year term loan 3 2000 million six year term loan b credit facility also originally provided 1250 million 18 month interim term loan repaid full november 2000 senior credit facility amended 2000 extend date required issue 125 million principal amount securities rank pari passu right payment junior 12 senior subordinated notes due 2009 described march 31 2002 march 29 2002 senior credit facility amended extend deadline requirement june 30 2003 see note 6 notes consolidated financial statements revolving credit facility permits us borrow lesser borrowing base computed percentage accounts receivable inventory 175 million less amount letters credit issued credit agreement pursuant borrowing base formula december 31 2001 could borrowed additional 284 million revolving credit facility obligations senior credit facility jointly severally guaranteed domestic subsidiaries secured first priority security interests substantially assets domestic subsidiaries also rely nonrecourse sale certain european automotive company receivables fund operations credit agreement documents governing 205 million 9 12 senior notes due 2005 1997 senior notes documents governing 125 million 11 unsecured senior notes 1999 senior notes 12 unsecured senior subordinated notes 1999 senior subordinated notes together 1999 senior notes 1999 notes contain restrictive covenants relating cash flow fixed charges debt members equity distributions leases liens assets debt obligations also contain various restrictive covenants require us maintain stipulated financial ratios including minimum consolidated net worth adjusted yearly fixed charge coverage ratio interest coverage ratio total indebtedness ratio part march 29 2002 amendment credit agreement additional restrictive covenant added limits net related party receivables 650 million december 31 2001 requires reductions next several years maximum 35 million december 31 2003 time thereafter december 31 2002 net related party receivables balance must exceed 55 million december 31 2001 compliance debt covenants connection senior credit facility 1999 notes entered two fiveyear euro dollar crosscurrency interest rate swap agreements one threeyear euro dollar crosscurrency interest rate swap agreement 1999 net impact earnings due crosscurrency swap agreements unrealized gain 271 million march 2000 terminated crosscurrency swap agreements realized cash gain 420 million result termination crosscurrency swap agreements net impact earnings twelve months ended december 31 2000 realized gain 149 million crosscurrency swap agreements replaced twelvemonth zerocost foreign exchange collar result foreign exchange collar transactions net impact earnings twelve months ended december 31 2000 income 168 million march 16 2001 original call side foreign currency exchange collar expired unexercised interest rate swap agreement within one crosscurrency swap agreements accounted using settlement accounting resulted interest expense 05 million 2000 july 2000 paid 149 million terminate interest portion cross currency swap agreement amount capitalized amortized original term cross currency interest rate swap agreements 2000 2001 interest expense includes 25 million 52 million respectively deferred interest amortization interest rate swap agreements meet criteria settlement accounting net impact earnings 1999 increase income 110 million july 2000 terminated financial instruments realized cash gain 169 million plus interest income 01 million net impact earnings 2000 increase income 36 million also entered interest rate swap agreements total notional value 550 million mitigate risk associated changing interest rates certain floating rate debt 2000 2001 interest rate swaps agreements expired interest rate swap agreements accounted using settlement accounting impact interest rate swap agreements resulted 04 million 01 million 08 million additional interest expense 2001 2000 1999 respectively january 1 2001 result adoption sfas 133 accounting derivative instruments hedging activities recorded 02 million cumulative effect change accounting principle entered new hedging agreements since described transactions completed consequently ability service various debt obligations may effected exposure fluctuations various foreign currencies relative us dollar well fluctuations interest rates see item 7a item 7 managements discussion analysis financial condition results operations results operations following discussion analysis contains number forward looking statements within meaning securities exchange act 1934 subject number risks uncertainties factors include among others following international national local general economic market conditions demographic changes size growth automobile market plastic automobile component market ability us sustain manage forecast growth size timing mix purchases products new product development introduction existing government regulations changes failure comply government regulations adverse publicity dependence upon original equipment manufacturers liability claims asserted us competition loss significant customers suppliers fluctuations difficulty forecasting operating results changes business strategy development plans business disruptions product recalls warranty costs ability attract retain qualified personnel ability protect technology retention earnings control level affiliated transactions may 28 1999 company acquired peguform gmbh leading international designer manufacturer complete interior modules door panels dashboards exterior modules structural plastic body parts including bumper fascias hatchback doors following table sets forth periods indicated consolidated statements income expressed percentage net sales table subsequent discussion read conjunction consolidated financial statements notes thereto included elsewhere herein year ended december 31 1999 compared year ended december 31 1998 net sales increased 7210 million year ended december 31 1999 1117 13662 million compared net sales 6452 million year ended december 31 1998 increase due addition peguforms net sales since acquisition second quarter domestically sales decreased 396 million 61 due primarily lower tooling sales compared prior year net sales year also reduced 64 million retroactive sales price reduction negotiated major customer awarded company significant new program described production scheduled begin 2001 gross profit year ended december 31 1999 increased 383 million 341 1507 million compared 1124 million year ended december 31 1998 percentage net sales gross profit decreased 174 year ended december 31 1998 110 year ended december 31 1999 decrease part due contribution peguforms lower margin business included consolidated sales since acquisition second quarter however primary reason reduction gross profit margin domestic operations 174 1998 95 1999 decrease margin arose result several items including 1 lower tooling sales historically higher margins 2 sales price reductions described offset productivity improvements manufacturing plants 3 establishment 11 million reserve fourth quarter relating environmental costs 4 several significant new model launch problems sustained third quarter new model launch problems also negatively impacted fourth quarter gross profit margin however new model launch problems substantially resolved year end selling general administrative expense year ended december 31 1999 increased 495 million 830 1092 million compared 597 million year ended december 31 1998 percentage net sales selling general administrative expense decreased 80 year ended december 31 1999 compared 92 year ended december 31 1998 decrease primarily attributable peguforms lower selling general administrative expense percentage net sales relative ventures included operating results since acquisition peguform second quarter domestically selling general administrative expense negatively impacted 39 million wage increases bonuses granted management employees third quarter ongoing effect wage increase annual basis approximately 12 million result foregoing income operations year ended december 31 1999 decreased 109 million 210 412 million compared income 522 million year ended december 31 1998 percentage net sales income operations decreased 30 fiscal 1999 81 fiscal 1998 interest expense increased 360 million 726 million fiscal 1999 compared 366 million fiscal 1998 increase result increased debt associated acquisition peguform offset reduced overall cost capital new capital structure consideration crosscurrency interest rate swap agreements income expense primarily comprised 405 million unrealized gains 59 million realized gains portions crosscurrency interest rate swap agreements entered second quarter economically hedge portion companys exposure foreign exchange interest rate risk associated peguform acquisition financial instruments serve reduce overall cost capital company also providing economic hedge fluctuations foreign exchange rates income expense also comprised unrealized currency losses 174 million offset part realized currency gains 27 million march 20 2000 terminated three crosscurrency swap agreements see note 16 notes consolidated financial statements connection issuance 1999 notes redeemed 9 34 senior subordinated notes due 2004 redemption price 104875 plus accrued interest resulted extraordinary loss 56 million 38 million prepayment penalty plus unamortized deferred financing costs 18 million year ended december 31 1999 due foregoing company incurred net loss year ended december 31 1999 145 million compared net income 136 million year ended december 31 1998 year ended december 31 1998 compared year ended december 31 1997 net sales increased 211 million year ended december 31 1998 34 6452 million compared net sales 6241 million year ended december 31 1997 increase net sales 1998 primarily result increased volumes comparable business offset planned price reductions mandated customers solesource arrangements product life cycles productivity improvements products partially offset planned price reductions net sales second third quarters 1998 impacted negatively due strikes certain general motors plants believe portion lost sales recouped fourth quarter 1998 gm accelerated production refill distribution channels gross profit year ended december 31 1998 increased 97 million 94 1124 million compared 1027 million year ended december 31 1997 percentage net sales gross profit increased 165 174 year ended december 31 1998 part due increased volumes associated product rationalizations among facilities continued cost cutting efforts fourth quarter 1998 resolved several commercial issues resulted recovery gross profit lost current prior years resolution issues resulted additional 74 million gross profit gross profits continue pressure attributable selling price reductions oems continue expect annual productivity improvements part suppliers selling general administrative expense 1998 597 million 93 net sales comparable selling general administrative expense 572 million 92 net sales 1997 result foregoing income operations year ended december 31 1998 increased 71 million 158 522 million compared 451 million fiscal 1997 percentage net sales income operations increased 81 fiscal 1998 72 fiscal 1997 interest expense increased 64 million 366 million fiscal 1998 compared 302 million fiscal 1997 increase result additional borrowing prior bank credit facility fund increased working capital needs due foregoing net income year ended december 31 1998 increased 21 million 136 million compared 115 million year ended december 31 1997 liquidity capital resources consolidated working capital 1827 million december 31 1999 compared 1687 million december 31 1998 increase 140 million working capital ratio decreased 15x december 31 1999 31x december 31 1998 decrease due increase current liabilities primarily accounts payable accrued expenses current portion long term debt offset like increase current assets result acquisition peguform net cash provided operating activities 1293 million year ended december 31 1999 compared net cash used operations 54 million year ended december 31 1998 increase cash provided operations due primarily collection accounts receivable sales inventories acquired connection acquisition peguform capital expenditures 532 million year ended december 31 1999 compared 247 million year ended december 31 1998 company continues upgrade machinery equipment paint lines facilities handle expected increased volumes general reconditioning equipment ordinary course business company seeks additional business existing new customers company continues compete right supply new components could material company require substantial capital investment machinery equipment tooling facilities date hereof however company formal commitments respect material business except noted august 1999 company awarded letter intent significant new program one major customers new program projected annual revenues approximately 100 million production scheduled start ramp late 2001 result award company may required make capital expenditures range 400 800 million payable next several years addition normal capital expenditures size scope expenditures associated new program still defined net cash provided financing activities 4169 million year ended december 31 1999 compared net cash provided financing activities 288 million year ended december 31 1998 fluctuation relates refinancing certain existing debt issuance new debt make peguform acquisition aggregate purchase price peguform acquisition approximately dem 850 million approximately 463 million subject postclosing adjustments addition purchase price company 316 million fees expenses company still conducting review postclosing adjustments associated acquisition peguform know concluded however company expect material impact operations cash flows connection acquisition peguform company entered new credit agreement new credit agreement new credit agreement provides borrowings 1 1750 million revolving credit facility addition matters described used working capital general corporate purposes 2 750 million fiveyear term loan 3 2000 million sixyear term loan b 4 125 million 18month interim term loan march 20 2000 company applied prepayment 42 million 18month interim term loan see note 16 notes consolidated financial statements new credit agreement requires remaining 830 million principal amount outstanding respect 18month interim term loan refinanced november 27 2000 using proceeds sale securities rank pari passu right payment junior companys 12 senior subordinated notes due 2009 described company intends refinance remaining principal balance 18month interim term loan ability use proceeds revolving credit facility revolving credit facility permits company borrow lesser borrowing base computed percentage accounts receivable inventory 1750 million less amount letters credit issued new credit agreement december 31 1999 company 55 million outstanding 1665 million still available revolving credit facility new credit agreement documents governing companys 9 12 senior notes due 2005 11 senior notes due 2007 12 senior subordinated notes due 2009 contain various covenants december 31 1999 company compliance covenants december 31 1999 companys interest rates new credit agreement based london interbank offer rate libor alternate base rate abr larger banks corporate base rate interest announced timetotime federal funds rate plus 12 per annum case nondollar denominated loans euro currency reference rate interest rates determined reference relevant interest rate option plus applicable margin defined based companys consolidated ratio total debt ebitda obligations new credit agreement jointly severally guaranteed companys domestic subsidiaries secured first priority security interests substantially assets company domestic subsidiaries new credit agreement became effective may 27 1999 contemporaneously completion peguform acquisition also issued 1250 million unsecured senior notes due 2007 1250 million unsecured senior subordinated notes due 2009 may 27 1999 proceeds issuance notes together borrowings new credit agreement used 1 fund cash consideration paid acquisition 2 redeem companys 9 34 senior subordinated notes due 2004 peguform redemption price 104875 plus accrued interest 3 refinance amounts outstanding companys prior senior credit facility 4 pay certain fees expenses related acquisition peguform offering notes 5 fund working capital general corporate purposes connection issuance debt finance peguform acquisition venture entered two fiveyear euro dollar crosscurrency interest rate swap agreements one threeyear euro dollar cross currency interest rate swap agreement two fiveyear crosscurrency interest rate swap agreements company received interest based fixed us dollar interest rate 115 paid fixed euro dollar rate 90 outstanding notional principal amounts us dollars euro dollars respectively held maturity company would paid 237 million euro dollars exchange 250 million see note 16 notes consolidated financial statements relating termination crosscurrency swap agreements threeyear crosscurrency interest rate swap agreement company received interest based fixed us dollar interest rate 95 paid fixed euro dollar rate 71 outstanding notional principal amounts us dollars euro dollars respectively held maturity company would paid 194 million euro dollars exchange 205 million see note 16 notes consolidated financial statements relating termination crosscurrency swap agreements crosscurrency interest rate swap agreement comprised three separate financial instruments consisting two interest rate swap agreements crosscurrency swap agreement combined underlying fixed us dollar interest rate debt match debt economically converted fixed euro dollar interest rate debt one interest rate swap agreements within crosscurrency interest rate swap agreements accounted using settlement accounting cash flows interest rate swap agreements accounted adjustments interest expense 1999 interest rate swap agreements resulted reduction interest expense 09 million interest rate swap agreements within crosscurrency interest rate swap agreements meet criteria settlement accounting generally accepted accounting principles cash flows interest rate swap agreements included income 1999 interest rate swap agreements resulted realized loss reduction income 24 million estimated fair market value financial instruments 134 million recorded investment balance sheet december 31 1999 corresponding 134 million noncash change estimated fair market value recorded income 1999 crosscurrency swap agreements within crosscurrency interest rate swap agreements meet criteria hedge accounting generally accepted accounting principles 1999 crosscurrency swap agreements resulted realized gain increase income 83 million estimated fair market value financial instruments 271 million recorded investment balance sheet december 31 1999 corresponding 271 million noncash change estimated fair market value recorded income 1999 company also entered interest rate swap agreements notional value 55 million mitigate risk associated changing interest rates certain floating rate debt interest rate swap agreements accounted using settlement accounting impact interest rate swap agreements resulted 08 million 06 million additional interest expense 1999 1998 respectively fair value financial instruments estimated 02 million 20 million december 31 1999 1998 respectively noncash impact mark market adjustments quarter earnings current assets may significant positively negatively future depending currency interest rate movements see item 3 quantitative qualitative disclosure market risk discussion company believes existing cash balances operating cash flow borrowings bank credit facility short term arrangements sufficient fund working capital needs normal capital expenditures required operation existing business end 2000 company obligated refinance interim term loan portion new credit agreement prior end 2000 company exploring options scope new program defined company may seek new amended credit arrangements fund capital expenditures working capital requirements may address connection refinancing interim term loan year 2000 compliance case companies using computers operations addressed year 2000 problem year 2000 issue result computer programs written using two digits rather four digits define applicable year systems equipment hardware date sensitive software embedded chips may recognize date using 00 year 1900 rather year 2000 could resulted system failure miscalculations causing disruption operations including among things temporary inability properly manufacture products process transactions send invoices engage similar normal business activities based initial assessments determined needed modify replace certain portions equipment hardware software affected systems would properly utilize dates beyond december 31 1999 presently believe modifications made replacement existing equipment hardware software year 2000 risk substantially reduced date significant year 2000 issues prevented us operating normal business activities phases plan resolve year 2000 issues inventory testing completed prior december 31 1999 year 2000 inventory potentially affected items segregated four categories business application developed software customized extensions purchased software systems interfaces tools platforms purchased commercial products hardware software intelligent devices manufacturing laboratory office facilities equipment external business partners suppliers customers service providers business applications tools platforms considered information technology systems intelligent devices external business partners considered nonit systems concerning systems applications upgraded year 2000 compliant versions nonit systems dedicated resources assist identifying potentially affected intelligent devices determination compliance status remediation testing devices difficult systems manufacturers potentially affected equipment longer business however based assessment nonit systems appear year 2000 compliant external business partners category potentially affected items primarily includes process identifying prioritizing critical suppliers customers communicating plans progress addressing year 2000 problem developed questionnaire used obtain information key existing business partners contacted 100 key existing business partners 85 responded 98 responded indicating year 2000 compliant based responses questionnaires alternative evidence obtained aware problems would materially impact results operations liquidity capital resources however means ensuring parties year 2000 compliant key business partners initial assessments evaluated deemed necessary followup assessments made developed contingency plans address potential year 2000 exposure plans included purchase addition supplies raw materials year end use pull systems rely computers utilized internal external resources repair replace test implement software operating equipment year 2000 modifications unable estimate certainty total cost year 2000 project however seen significant increase cost normal overhead cost associated facilities primarily costs year 2000 project expensed funded normal operating cash flow bank borrowings failure remediate material year 2000 problem could result interruption failure certain normal business activities operations including ability produce deliver products customers failures could materially adversely affect results operations liquidity financial condition year 2000 plan designed significantly reduce level uncertainty year 2000 problem believe executing year 2000 plan possibility significant interruptions normal operations reduced believe reasonably likely worst case scenario certain suppliers able supply us key materials thus disrupting manufacture sale products customers experienced significant year 2000 disruptions operations able process transactions engage normal business activities issues encountered anticipated would material impact us new accounting standards april 1998 accounting standards executive committee published accounting statement position sop 985 reporting costs startup activities sop 985 establishes standards financial reporting startup costs organization costs requires costs expensed incurred adopted sop 985 provisions sop applicable us fiscal year beginning january 1 1999 adoption standard material impact financial position results operations june 1998 fasb approved sfas 133 accounting derivative instruments hedging activities establishes accounting reporting standards derivative instruments including certain derivative instruments embedded contracts hedging activities requires entity recognize derivatives either assets liabilities statement financial position measure instruments fair value standard apply first quarter fiscal year beginning january 1 2000 july 1999 fasb approved sfas 137 delayed implementation date sfas 133 one year currently analyzing impact standard financial position results operations september 1999 emerging issues task force eitf reached consensus issue 995 accounting preproduction costs related longterm supply arrangements issue addresses preproduction costs incurred oem suppliers perform certain services related design development parts supply oem well design development costs build molds dies tools used producing parts consensus generally requires design development costs products sold longterm supply arrangements expensed unless contractual guarantee provides specific required payments design development costs task force concluded provisions consensus may applied prospectively costs incurred december 31 1999 december 31 1999 assets includes approximately 201 million program costs customer reimbursement anticipated contractually guaranteed costs continue amortized future periods reimbursed customers comply provisions consensus expensing program costs incurred december 31 1999 qualify capitalization item 7a item 7 managements discussion analysis financial condition results operations results operations following discussion analysis contains number forward looking statements within meaning securities exchange act 1934 subject number risks uncertainties factors include among others following international national local general economic market conditions demographic changes size growth automobile market plastic automobile component market ability sustain manage forecast growth size timing mix purchases products new product development introduction existing government regulations changes failure comply government regulations adverse publicity dependence upon original equipment manufacturers liability claims asserted us competition loss significant customers suppliers fluctuations difficulty forecasting operating results changes business strategy development plans business disruptions product recalls warranty costs ability attract retain qualified personnel ability protect technology retention earnings control level affiliated transactions may 28 1999 acquired peguform gmbh leading international designer manufacturer complete interior modules door panels dashboards exterior modules structural plastic body parts including bumper fascias hatchback doors following table sets forth periods indicated consolidated statements income expressed percentage net sales table subsequent discussion read conjunction consolidated financial statements notes thereto included elsewhere herein year ended december 31 2000 compared year ended december 31 1999 net sales increased 4638 million year ended december 31 2000 339 18299 million compared net sales 13662 million year ended december 31 1999 increase mainly due addition peguforms net sales twelve months 2000 compared seven months 1999 proforma basis sales decreased 966 million 1999 743 million decrease due euro devaluation offset net increases european volumes domestically sales decreased 224 million 37 due general softening automotive market gross profit year ended december 31 2000 increased 769 million 510 2276 million compared 1507 million year ended december 31 1999 percentage net sales gross profit increased 110 year ended december 31 1999 124 year ended december 31 2000 dollar increase mainly due addition peguforms activity twelve months 2000 compared seven months 1999 domestically gross profit percent sales increased 10 due implementation lean manufacturing techniques despite sales reductions internationally gross profit percent sales increased 10 due manufacturing efficiencies expect continue achieve manufacturing efficiencies 2001 effective january 1 2001 granted daimlerchrysler corporation north america 5 sales price reduction attempting recover either suppliers operating efficiencies may able fully offset reduction could reduce margins selling general administrative expense year ended december 31 2000 increased 212 million 194 1304 million compared 1092 million year ended december 31 1999 percentage net sales selling general administrative expense decreased 71 year ended december 31 2000 compared 80 year ended december 31 1999 overall dollar increase mainly due addition peguforms activity twelve months 2000 compared seven months 1999 decrease percent net sales primarily attributable peguforms lower selling general administrative expense percentage net sales relative ventures venture sales engineering related party eliminated 26 million management fees relating sales commissions charged us done due slow automotive industry ensure remained competitive result foregoing income operations year ended december 31 2000 increased 548 million 1329 960 million compared 412 million year ended december 31 1999 percentage net sales income operations increased 52 fiscal 2000 30 fiscal 1999 interest expense increased 299 million 1025 million fiscal 2000 compared 726 million fiscal 1999 increase result incurring interest twelve months 2000 opposed seven months 1999 related increased debt associated acquisition peguform rising interest rates 25 million expense noncash amortization termination interest rate swaps income expense primarily comprised 790 million realized gains 411 million unrealized losses related termination crosscurrency interest rate swap agreements portion foreign exchange collars income expense also comprised unrealized currency losses 419 million offset part realized currency gains 86 million see note 7 notes consolidated financial statements year ended december 31 2000 reported net tax benefit 113 million tax benefit generated result finalizing restructuring peguform companies 31 million reduction tax rates germany 227 million recognition benefit nol carryforwards 145 million income tax expense charged normal operations venture holdings corporation peguform group companies due foregoing net income year ended december 31 2000 90 million compared net loss 145 million year ended december 31 1999 year ended december 31 1999 compared year ended december 31 1998 net sales increased 7210 million year ended december 31 1999 1117 13662 million compared net sales 6452 million year ended december 31 1998 increase due addition peguforms net sales since acquisition second quarter domestically sales decreased 396 million 61 due primarily lower tooling sales compared prior year net sales year also reduced 64 million retroactive sales price reduction negotiated major customer awarded us significant new program described subsequently cancelled program gross profit year ended december 31 1999 increased 383 million 341 1507 million compared 1124 million year ended december 31 1998 percentage net sales gross profit decreased 174 year ended december 31 1998 110 year ended december 31 1999 decrease part due contribution peguforms lower margin business included consolidated sales since acquisition second quarter however primary reason reduction gross profit margin domestic operations 174 1998 95 1999 decrease margin arose result several items including 1 lower tooling sales historically higher margins 2 sales price reductions described offset productivity improvements manufacturing plants 3 establishment 11 million reserve fourth quarter relating environmental costs 4 several significant new model launch problems sustained third quarter new model launch problems also negatively impacted fourth quarter gross profit margin however new model launch problems substantially resolved year end selling general administrative expense year ended december 31 1999 increased 495 million 830 1092 million compared 597 million year ended december 31 1998 percentage net sales selling general administrative expense decreased 80 year ended december 31 1999 compared 92 year ended december 31 1998 decrease primarily attributable peguforms lower selling general administrative expense percentage net sales relative ventures included operating results since acquisition peguform second quarter domestically selling general administrative expense negatively impacted 39 million wage increases bonuses granted management employees third quarter ongoing effect wage increase annual basis approximately 12 million result foregoing income operations year ended december 31 1999 decreased 109 million 210 412 million compared income 522 million year ended december 31 1998 percentage net sales income operations decreased 30 fiscal 1999 81 fiscal 1998 interest expense increased 360 million 726 million fiscal 1999 compared 366 million fiscal 1998 increase result increased debt associated acquisition peguform offset reduced overall cost capital new capital structure consideration crosscurrency interest rate swap agreements income expense primarily comprised 405 million unrealized gains 59 million realized gains portions crosscurrency interest rate swap agreements entered second quarter economically hedge portion companys exposure foreign exchange interest rate risk associated peguform acquisition financial instruments serve reduce overall cost capital company also providing economic hedge fluctuations foreign exchange rates income expense also comprised unrealized currency losses 174 million offset part realized currency gains 27 million march 20 2000 terminated three crosscurrency swap agreements see note 7 notes consolidated financial statements connection issuance 1999 notes redeemed 9 34 senior subordinated notes due 2004 redemption price 104875 plus accrued interest resulted extraordinary loss 56 million 38 million prepayment penalty plus unamortized deferred financing costs 18 million year ended december 31 1999 due foregoing incurred net loss year ended december 31 1999 145 million compared net income 136 million year ended december 31 1998 liquidity capital resources consolidated working capital 1297 million december 31 2000 compared 1827 million december 31 1999 decrease 530 million working capital ratio 13x 15x december 31 2000 1999 respectively net cash provided operating activities 613 million year ended december 31 2000 compared net cash provided operations 888 million year ended december 31 1999 decrease cash provided operations due primarily increases inventory assets partially offset increases accounts payable accrued expenses capital expenditures 857 million year ended december 31 2000 compared 532 million year ended december 31 1999 continue upgrade machinery equipment paint lines facilities handle expected increased volumes general reconditioning equipment 2000 received 785 million termination derivatives resulted net use cash 65 million investment activities 1999 4968 million used primarily related peguform acquisition ordinary course business seek additional business existing new customers continue compete right supply new components could material us require substantial capital investment machinery equipment tooling facilities date hereof however formal commitments respect material business august 1999 awarded letter intent significant new program ford ranger new program projected annual revenues approximately 225 million production scheduled start ramp late 2002 result award would required make capital expenditures range 400 800 million payable next several years addition normal capital expenditures program cancelled longer need make additional expenditures seeking cancellation costs ford connection termination program net cash used financing activities 434 million year ended december 31 2000 compared net cash provided financing activities 4169 million year ended december 31 1999 reflects debt incurred peguform acquisition 2000 reflects scheduled paydown debt senior credit facility provides borrowings 1 1750 million revolving credit facility addition matters described used working capital general corporate purposes 2 750 million five year term loan 3 2000 million six year term loan b credit facility also originally provided 1250 million 18 month interim term loan october 2000 applied payments 612 million 18 month interim term loan november 2000 company repaid remaining principal 638 primarily proceeds revolving credit agreement senior credit facility amended 2000 requires issue 125 million principal amount securities rank pari passu right payment junior 12 senior subordinated notes due 2009 described march 31 2002 amendment senior credit facility also added 100 million nonrecourse factoring program amended various restrictive covenants provide us additional flexibility stipulated financial ratios see note 6 notes consolidated financial statements revolving credit facility permits us borrow lesser borrowing base computed percentage accounts receivable inventory 175 million less amount letters credit issued credit agreement pursuant borrowing base formula december 31 2000 could borrowed additional 540 million revolving credit facility obligations credit agreement jointly severally guaranteed domestic subsidiaries secured first priority security interests substantially assets domestic subsidiaries senior credit agreement documents governing 205 million 9 12 senior notes due 2005 1997 senior notes documents governing 125 million 11 unsecured senior notes 1999 senior notes 12 unsecured senior subordinated notes 1999 senior subordinated notes together 1999 senior notes 1999 notes contain restrictive covenants relating cash flow fixed charges debt members equity distributions leases liens assets debt obligations also contain various restrictive covenants require us maintain stipulated financial ratios including minimum consolidated net worth adjusted yearly fixed charge coverage ratio interest coverage ratio total indebtedness ratio december 31 2000 compliance debt covenants connection senior credit facility 1999 notes entered two fiveyear euro dollar crosscurrency interest rate swap agreements one threeyear euro dollar crosscurrency interest rate swap agreement march 2000 terminated crosscurrency swap agreements within three original crosscurrency interest rate swap agreements realized cash gain 420 million entire cash proceeds applied prepayment 125 million interim term loan december 31 1999 financial instruments estimated fair market value 271 million recorded investment balance sheet corresponding unrealized gain 271 million recorded income accordingly result termination crosscurrency swap agreements net impact earnings twelve months ended december 31 2000 increase income 149 million comprised realized gain 420 million offset unrealized loss 271 million crosscurrency swap agreements replaced twelvemonth zerocost foreign exchange collar originally designed reduce economic risk us euro us dollar exchange movements notional amount put call sides foreign currency exchange collar originally 500000000 euros july 2000 terminated put side foreign currency exchange collar received 109 million used 27 million proceeds purchase replacement put protect additional devaluations euro us dollar exchange rate applied 80 million net cash proceeds prepayment 18month interim term loan notional amount replacement put 400000000 euros november 2000 terminated put side foreign currency exchange collar received 92 million used proceeds along additional borrowings revolving credit agreement repay remaining portion 18month interim term loan december 31 2000 original call side foreign currency exchange collar remains outstanding estimated fair market value financial instrument 06 million recorded investment balance sheet december 31 2000 accordingly result foreign exchange collar transactions net impact earnings twelve months ended december 31 2000 increase income 195 million comprised realized gain 201 million offset unrealized loss 06 million march 16 2001 original call side foreign currency exchange collar expired unexercised currently foreign currency derivative transactions place protect us currency movements continuing review situation take actions deemed proper one interest rate swap agreements within original crosscurrency interest rate swap agreements accounted using settlement accounting cash flows interest rate swap agreements accounted adjustments interest expense 2000 interest rate swap agreements resulted increase interest expense 05 million 1999 interest rate swap agreements resulted reduction interest expense 09 million july 2000 paid 149 million terminate financial instruments amount capitalized amortized interest expense terms original interest rate swap agreements 2000 interest expense includes 25 million deferred interest asset amortization interest rate swap agreements within original crosscurrency interest rate swap agreements meet criteria settlement accounting generally accepted accounting principles cash flows interest rate swap agreements included income 2000 1999 interest rate swap agreements resulted realized loss reduction expense income 03 million 24 million respectively estimated fair market value financial instruments december 31 1999 134 million recorded investment balance sheet corresponding 134 million noncash change estimated fair market value recorded income 1999 july 2000 terminated financial instruments realized cash gain 169 million plus interest income 01 million accordingly result termination interest rate swap agreements net impact earnings 2000 increase income 36 million comprised realized gain 169 million interest income 01 million offset unrealized loss 134 million july 2000 applied 20 million net cash proceeds terminations interest rate swap agreements additional prepayment 18month interim term loan also entered interest rate swap agreements total notional value 55 million mitigate risk associated changing interest rates certain floating rate debt 2000 certain interest rate swaps agreements notional value 25 million expired interest rate swap agreements accounted using settlement accounting impact interest rate swap agreements resulted 01 million 08 million additional interest expense 2000 1999 respectively believe existing cash balances operating cash flow borrowings bank credit facility short term arrangements sufficient fund working capital needs normal capital expenditures required operation existing business end 2002 2001 may seek new amended credit arrangements address currency exposure related existing financing structure also deal need issue new debt required current credit agreement outlined new accounting standards june 1998 fasb approved sfas 133 accounting derivative instruments hedging activities establishes accounting reporting standards derivative instruments including certain derivative instruments embedded contracts hedging activities requires entity recognize derivatives either assets liabilities statement financial position measure instruments fair value standard apply first quarter fiscal year beginning january 1 2000 july 1999 fasb approved sfas 137 delayed implementation date sfas 133 one year analyzed impact standard financial position results operations 2001 effect record liability 02 million adjustment recorded cumulative effect change accounting principle item 7a item 7a quantitative qualitative disclosures market risks exposed various market risks including changes foreign currency exchange rates interest rates order manage risk arising exposures selectively entered variety foreign exchange interest rate financial instruments discussion accounting policies derivative financial instruments found organization summary significant accounting policies financial instruments footnotes financial statements found item 8 item 7a quantitative qualitative disclosures market risks exposed various market risks including changes foreign currency exchange rates interest rates order manage risk arising exposures venture selectively entered variety foreign exchange interest rate financial instruments discussion accounting policies derivative financial instruments found organization summary significant accounting policies financial instruments footnotes financial statements found item 8 item 7a quantitative qualitative disclosures market risks exposed various market risks including changes foreign currency exchange rates interest rates order manage risk arising exposures selectively entered variety foreign exchange interest rate financial instruments discussion accounting policies derivative financial instruments found organization summary significant accounting policies financial instruments footnotes financial statements found item 8 item 8 financial statements supplementary data venture holdings company llc index consolidated financial statements independent auditors report member venture holdings company llc fraser michigan audited accompanying consolidated balance sheets venture holdings company llc subsidiaries venture december 31 2001 2000 related consolidated statements operations comprehensive income loss changes members equity cash flows three years period ended december 31 2001 audits also included consolidated financial statement schedule listed index item 14 consolidated financial statements consolidated financial statement schedule responsibility ventures management responsibility express opinion consolidated financial statements consolidated financial statement schedule based audits conducted audits accordance auditing standards generally accepted united states america standards require plan perform audit obtain reasonable assurance whether consolidated financial statements free material misstatement audit includes examining test basis evidence supporting amounts disclosures consolidated financial statements audit also includes assessing accounting principles used significant estimates made management well evaluating overall consolidated financial statement presentation believe audits provide reasonable basis opinion consolidated financial statements present fairly material respects consolidated financial position venture holdings company llc subsidiaries december 31 2001 2000 results operations cash flows three years period ended december 31 2001 conformity accounting principles generally accepted united states america also opinion consolidated financial statement schedule considered relation basic consolidated financial statements taken whole presents fairly material respects information set forth therein deloitte touche llp april 8 2002 detroit michigan venture holdings company llc consolidated balance sheets dollars thousands see notes consolidated financial statements venture holdings company llc consolidated statements operations comprehensive income loss dollars thousands consolidated statements changes members equity dollars thousands see notes consolidated financial statements venture holdings company llc consolidated statements cash flows dollars thousands see notes consolidated financial statements venture holdings company llc notes consolidated financial statements 1 organization summary accounting policies organization 1987 sole shareholder venture group companies contributed common stock companies venture holdings trust simultaneously certain property plant equipment contributed sole shareholder certain companies owned trust exchange shareholder named sole beneficiary trust may 1999 trust effected trust contribution contributing assets including capital stock companies owned trust membership interest venture holdings company llc venture wholly owned subsidiary trust also assumed obligations trust sole member venture principles consolidation consolidated financial statements include accounts venture ventures subsidiaries wholly owned majorityowned collectively referred company companys investments less majorityowned businesses accounted equity method intercompany accounts transactions eliminated business company worldwide fullservice supplier systems integrator manufacturer plastic components modules systems company provides stateoftheart design advanced engineering services around world company also extensive tool making capabilities estimates preparation companys financial statements conformity accounting principles generally accepted united states america requires management make estimates assumptions affect reported amounts assets liabilities disclosures contingent assets liabilities date financial statements reported amounts revenues expenses reporting period actual results could differ estimates cash equivalents highly liquid investments initial maturity three months less classified cash equivalents inventories manufactured parts inventories stated lower cost market using firstin firstout method inventory also includes costs progress payments associated building molds contract molds owned company used companys manufacturing operations transferred tooling property plant equipment molds operational progress payments tooling built related party recorded inventory property depreciation property plant equipment recorded cost depreciation computed straightline method estimated useful lives various classes assets tooling amortized piece price straight line basis related production contract generally 3 7 years principal estimated useful lives follows leasehold improvements amortized useful life term lease whichever shorter expenditures maintenance repairs charged expense incurred assets deferred financing costs included assets amortized life related financing arrangement companys interest subsidiaries controlled company accounted equity method program costs program costs include costs incurred design components design building tooling included assets prior january 1 2000 costs capitalized supported purchase order signed customer recovered future production volumes subsequent january 1 2000 costs incurred design components capitalized contractual guarantee reimbursement customer exists costs incurred design building tooling capitalized company unconditional right use tooling term supply arrangement intangible assets purchase price companies excess fair value net identifiable assets acquired goodwill amortized 30 years using straightline method amount goodwill reported december 31 2001 2000 1061 million 1193 million respectively net accumulated amortization longlived assets longlived assets disposed longlived assets certain identifiable intangibles held used company reviewed impairment whenever events changes circumstances indicate carrying amount asset may recoverable company periodically evaluates carrying value impairment evaluations based principally undiscounted cash flows operations asset related derivative financial instruments hedging activities company party number derivative agreements entered connection management exposure fluctuations foreign exchange rates interest rates gains losses interest rate swaps options designated effective hedges underlying debt obligations used adjust interest expense recognized lives underlying debt agreements gains losses terminated hedge contracts deferred amortized remaining period original swap remaining term underlying exposure whichever shorter derivative instruments hedging activities recognized either assets liabilities statement financial position measured fair value related gains losses included net income see note 8derivative financial instruments risk management revenue recognition revenue sale manufactured parts recognized parts shipped revenue mold sales recognized using completed contract method due reasonably short build cycle accounts receivable includes unbilled receivables mold contracts substantially complete amounts billed final approval received customer accordance contract terms provision estimated losses uncompleted contracts made period losses identified income taxes amounts financial statements relating income taxes relate subsidiaries limited liability companies elected corporation status calculated using sfas 109 accounting income taxes significant subsidiaries elected taxed corporations limited liability companies taxed partnership internal revenue code beneficiary venture holdings trust required report income gains losses deductions credits corporations limited liability companies included trust individual tax returns foreign currencies currency translation based upon sfas 52 foreign currency translation whereby assets liabilities foreign subsidiaries functional currency local currency generally translated using period end exchange rates income statements translated using average exchange rates period differences arising translation assets liabilities comparison translation previous periods included separate component stockholders equity reclassifications certain reclassifications made 2000 financial statements order conform 2001 presentation recent accounting pronouncements july 2001 fasb issued statement 141 business combinations statement replaces accounting principles board apb opinion 16 business combinations statement business combinations initiated june 30 2001 accounted using purchase method company adopted statement material impact results operations financial position june 2001 fasb issued statement 142 goodwill intangible assets establishes new standards goodwill acquired business combinations beginning january 1 2002 company longer amortize goodwill periodically evaluate impairment company amortized 44 million goodwill year 2001 company process completing transitional goodwill impairment testing expect adoption statement result impairment goodwill august 2001 fasb issued statement 143 accounting asset retirement obligations requires entity record fair value liability asset retirement obligation period incurred corresponding increase related longlived asset liability adjusted present value period asset depreciated useful life gain loss may incurred upon settlement liability statement 143 effective fiscal years beginning june 15 2002 company currently assessing impact adopting statement company expect material effect results operations financial position due adoption statement october 2001 fasb issued statement 144 accounting impairment disposal longlived assets replaces statement 121 provisions apb opinion 30 disposal segments business statement creates accounting model based framework established statement 121 applied longlived assets including discontinued operations statement 144 effective fiscal years beginning december 15 2001 january 1 2002 company adopted statement material impact results operations financial position 2 acquisition may 28 1999 company purchased peguform gmbh peguform leading european supplier high performance interior exterior plastic modules systems components european oems peguform acquisition approximately 4630 million second quarter 2000 agreement reached post closing adjustments related peguform acquisition reducing consideration paid peguform 180 million 4450 million company used proceeds final settlement reduce outstanding borrowings following unaudited pro forma financial data presented illustrate estimated effects peguform acquisition transaction occurred beginning period presented 3 accounts receivable excluding receivables related parties substantially receivables companies operating automotive industry 4 inventories included following thousands included workinprocess tools molds progress payments 474 99 million years ended december 31 2001 2000 respectively amounts progress payments tooling built related party see note 9 5 property plant equipment property plant equipment consisted following thousands included property plant equipment buildings held capitalized leases assets cost basis 489 million accumulated depreciation relating assets 106 million december 31 2001 december 31 2000 assets cost basis 391 million accumulated depreciation 59 million 6 debt consisted following thousands june 29 2000 credit agreement amended several purposes first requirement company issue 1250 million securities rank pari passu right payment junior companys 12 senior subordinated notes due 2009 described extended november 27 2000 march 31 2002 second credit agreement amended allow 1000 million nonrecourse factoring program third certain restrictive covenants amended provide company additional flexibility stipulated financial ratios credit agreement modified march 29 2002 extend requirement issuance 1250 million securities june 30 2003 revolving credit facility permits company borrow lesser borrowing base computed percentage accounts receivable inventory 1750 million less amount letters credit issued credit agreement pursuant borrowing base formula december 31 2001 company could borrowed additional 284 million revolving credit facility obligations credit agreement jointly severally guaranteed ventures domestic subsidiaries secured first priority security interests substantially assets venture domestic subsidiaries credit agreement documents governing companys 9 12 senior notes due 2005 1997 senior notes documents governing companys 11 unsecured senior notes 1999 senior notes 12 unsecured senior subordinated notes 1999 senior subordinated notes together 1999 senior notes 1999 notes contain restrictive covenants relating cash flow fixed charges debt members equity distributions leases liens assets companys debt obligations also contain various restrictive covenants require company maintain stipulated financial ratios including minimum consolidated net worth adjusted yearly fixed charge coverage ratio interest coverage ratio total indebtedness ratio part amendment credit agreement march 29 2002 company also subject new financial covenant limiting net related party receivables 650 million december 31 2001 requires reduction next several years maximum 350 million december 31 2003 time thereafter december 31 2002 net related party receivables balance must exceed 550 million december 31 2001 company compliance debt covenants scheduled maturities debt december 31 2001 follows thousands 7 fair value financial instruments carrying values cash equivalents accounts receivable accounts payable accrued expenses approximate fair market value due shortterm maturities instruments debt instruments estimated fair values companys debt instruments determined using available market information however considerable judgment required interpreting market data develop estimates fair value accordingly estimates presented herein may indicative amounts company could realize current market exchange use different assumptions valuation methodologies may material effect estimated fair value amounts fair value longterm debt estimated using quoted market prices thousands 8 derivative financial instruments risk management various times company may party various derivative contracts entered connection management companys exposure fluctuations foreign exchange rates interest rates primary classes derivatives used foreign exchange forward contracts interest rate swaps instruments involve varying degrees market risk instruments subject rate price fluctuations derivative transactions used hedge underlying business exposures market risk instruments offset opposite movements underlying exposure cash receipts payments contracts normally occur maturity interest rate swap agreements periodic contractually defined intervals gains losses interest rate swaps options designated effective hedges underlying debt obligations used adjust interest expense recognized lives underlying debt agreements gains losses terminated hedge contracts deferred amortized remaining period original swap remaining term underlying exposure whichever shorter derivative instruments qualify hedge accounting treatments marked market related gains losses included net income foreign exchange forward contracts twelve months ended december 31 1999 result fair value crosscurrency swap agreements net impact earnings unrealized gain 271 million march 2000 company terminated crosscurrency swap agreements realized cash gain 420 million result termination crosscurrency swap agreements net impact earnings twelve months ended december 31 2000 realized gain 149 million crosscurrency swap agreements replaced twelve month zerocost foreign exchange collar july 2000 company terminated put side original collar received 109 million company used 27 million proceeds purchase replacement put november 2000 company terminated put side replacement put received 92 million december 31 2000 original call side foreign currency exchange collar remained outstanding estimated fair market value financial instrument 06 million recorded investment balance sheet december 31 2000 accordingly result foreign exchange collar transactions net impact earnings twelve months ended december 31 2000 realized gain 168 million march 16 2001 original call side foreign currency exchange collar expired unexercised recorded unrealized gain 06 million interest rate swap agreement within one companys crosscurrency swap agreements accounted using settlement accounting resulted decreasedincreased interest expense 1999 2000 09 million 05 million respectively july 2000 company paid 149 million terminate interest portion cross currency swap agreement amount capitalized amortized original terms cross currency swap agreements 2000 2001 interest expense includes 25 million 52 million respectively noncash deferred interest asset amortization interest rate swap agreements within original cross currency swap agreements terminated july 2000 company realized cash gain 169 million plus interest income 01 million meet criteria settlement accounting 2000 1999 interest rate swap agreements resulted income 36 million 110 million respectively interest rate swaps company entered interest rate swap agreements total notional value 55 million mitigate risk associated changing interest rates certain floating rate debt 2000 2001 interest rate swaps agreements expired interest rate swap agreements accounted using settlement accounting impact interest rate swap agreements resulted 04 million 01 million 08 million additional interest expense 2001 2000 1999 respectively result adoption sfas 133 accounting derivative instruments hedging activities company recorded 02 million cumulative effect change accounting principle january 1 2001 9 related party transactions company entered various transactions entities sole beneficiary trust owns controls transactions include leases real estate usage machinery equipment facilities purchases sales inventory performance manufacturing related services administrative services insurance activities payment receipt sales commissions addition employees company made available certain entities services design model tool building since trust sole member venture holdings company llc terms transactions result armslength bargaining however company believes transactions terms less favorable company would obtained transactions arrangements armslength transactions nonaffiliated persons transactions reviewed fairness committee required various loan agreements company provides arranges others provide certain related parties various administrative professional services including employee group insurance benefit coverage property insurance financial cash management administrative services data processing related parties charged fees premiums services administrative services allocated entity incurred certain entities charged management fee connection cash management services company pays administrative operating expenses behalf certain related parties charges amounts paid results receivables related parties pompo insurance indemnity company ltd company purchased pompo insurance indemnity company ltd pompo corporation indirectly owned sole beneficiary trust insurance cover certain medical claims companys covered employees certain workers compensation claims company remains obligor amounts excess insurance coverage amounts paid pompo coverages liability settled less amount premium portion excess available premium credit future insurance company accounted arrangement using deposit method wherein full amount estimated liability claims recorded liabilities premiums paid pompo recorded assets time claims settled company made payments 16 million 09 million 08 million pompo 2001 2000 1999 respectively december 31 2001 2000 1999 company approximately 51 million 37 million 37 million period respectively deposit pompo shelby american inc 1999 company entered agreement purchase vehicles shelby american inc shelby entity sole beneficiary trust 75 ownership interest company made deposits approximately 26 million 13 million years ended december 31 2000 1999 vehicles deposits recorded assets companys december 31 2001 2000 consolidated balance sheets companys expectation receive repayment deposits proceeds sale vehicles third parties april 1 2002 company recovered deposits sales results date proven difficult achieve anticipated due quality marketing pricing environmental overall management issues resulted operating losses shelby past years based upon past sales performance consultation independent third party appraisers company recorded impairment charge deposit fourth quarter 2001 amount 14 million impairment charge determined based upon estimate future cash flows expected result sale vehicles discount appraised liquidation value shelby assets time original deposits shelby company entered security agreement obtained security interest assets shelby company believes perfected security interest shelbys assets could foreclosed means recovery event proceeds sales vehicles provide full recovery deposits events dictate taking action presently company believe foreclosure best interest company continuing monitor situation may take action future december 31 2001 company approximately 14 million tooling capitalized tools fixtures used production vehicle parts 1999 company sold certain parts shelby use manufacturing vehicles performed engineering services totaling 38 million deluxe pattern corporation company contracts deluxe pattern corporation deluxe entity wholly owned sole beneficiary trust provide company design prototype tooling fixture work currently deluxe generates majority revenue company generates minimal revenue third parties years ended december 31 2001 2000 1999 company charged 755 million 189 million 110 million respectively arrangement deluxe paid accordance agreed upon contract terms require progress payments various stages work initial payment terms range 30 90 based upon program timing pricing agreement parties accordance terms december 31 2001 2000 company made progress payments deluxe 702 million 99 million respectively 295 million 2001 settled reduction related party receivable december 31 2001 2000 474 99 million progress payments remain tools mold inventory tools yet complete year ended december 31 2001 344 million progress payments expensed part costs products sold tooling completed sold outside third parties deluxe also buys services company principally labor materials however services significantly reduced 2001 reduced future years ended december 31 2001 2000 1999 respectively deluxe made purchases amount 10 million 91 million 129 million addition transactions deluxe also charged company approximately 11 million years ended december 31 2000 1999 equipment rental services equipment rentals ceased end 2000 net effect transactions deluxe company receivable balance deluxe 144 million 302 million 111 million 33 million recorded long term receivable assets december 31 2001 2000 respectively venture sales engineering venture sales engineering vse entity wholly owned sole beneficiary trust serves companys sales management representative currently vse generates majority sales management fees company generates minimal sales management fees third parties company pays venture sales engineering sales management fee 3 north american production sales vse conducted sales marketing activities around world company advanced certain funds order carry activities behalf company 2000 company amended agreements allow flexibility reduce expense vse agreed forego approximately 26 million management fees relating sales commissions fourth quarter 2000 46 million fourth quarter 2001 2000 done due slowing automotive industry ensure company remained competitive 2001 done inducement company reduce quoted prices future oem program bidding part transaction additional consideration vse entities owned controlled sole beneficiary trust required company also agree prepay one years management fee rental usage fees cash exchanged result portion transaction parties agreed set related party receivable balances total offset approximately 239 million 146 million management fee 93 million rentals usage fees annual prepayments continue 2006 transaction presented approved fairness committee activities result net receivable vse 140 million applicable set 255 million december 31 2001 2000 respectively 66 million december 31 2001 155 million december 31 2000 recorded long term receivable assets venture africa 1999 company advanced approximately 55 million venture africa entity wholly owned sole beneficiary trust construction refurbishment paint line amount repaid early 2001 2000 company began selling raw material venture africa sale agreement included established repayment terms sales raw materials years ended december 31 2001 2000 331 million 103 million respectively december 31 2001 2000 account receivable due transactions 123 million 160 million respectively classified shortterm time company makes certain employees available sole beneficiary trust purposes performing services companies controlled beneficiary indebted company amount 11 million 05 million december 31 2000 1999 respectively amounts repaid 2001 1999 company contracted mm flow systems llc mm entity owned son sole beneficiary trust manufacture certain machinery equipment used companys grand blanc facility company purchased three machines mm cost 965000 addition company contracts mm dispose scrap parts previously rejected automotive original equipment manufacturers companys sales parts mm year december 31 1999 approximately 200000 2001 mm provided part reclamation services company paid 26 million 1999 company leased buildings machinery equipment entity sole beneficiary trust owns significant equity interest company received 02 million connection agreement company provided management services venture asia pacific pty ltd vap subsidiaries corporations wholly owned sole beneficiary trust company billed management fees commissions totaling 49 million 45 million vap 2000 1999 respectively addition company made advances vap performed tooling build design work vap result transactions vap owes company 150 million 203 million december 31 2001 2000 respectively 140 million 147 million classified longterm receivable assets company entered contract supercart holdings pty ltd supercart company sole beneficiary trust minority interest design produce sell shopping carts supercart affiliate company produced sold shopping carts south africa number years 2001 company designed built tooling supercart costs recovered piece price shopping carts sold supercart agreed unconditionally reimburse company tooling costs collected piece price year ended december 31 2001 company sales 04 million december 31 2001 supercart owed company 69000 unamortized tooling 08 million part efforts meet oem minority development initiatives company arrangement universal venture automotive uva company sole beneficiary trust 49 interest provide certain plastic manufacturing sub assembly operations company addition uva buys certain raw materials company needed manufacturing operations years ending december 31 2001 2000 company raw material sales 15 million 04 million respectively uva addition uva sold certain products company amount 12 04 million years ended december 31 2001 2000 respectively december 31 2001 2000 company owed uva net amount 98000 111000 respectively following summary transactions related parties december 31 2001 2000 1999 thousands related party transactions result following accounts receivable balances companys consolidated balance sheets thousands related party transactions also result following asset balances companys consolidated balance sheets thousands amounts generally entities wholly owned sole beneficiary trust management believes amounts fully recoverable recoverability certain amounts dependent upon company providing future business entities 10 commitments contingencies operating leases company leases certain machinery equipment operating leases initial remaining terms one year december 31 2001 future minimum lease commitments including related party leases follows thousands rent expense operating leases agreements term greater one month including amounts paid related parties 168 million 174 million 109 million years ended december 31 2001 2000 1999 respectively usage fees paid based monthly usage certain machinery equipment facilities 98 million 70 million 67 million years ended december 31 2001 2000 1999 respectively exception 03 million paid 2000 1999 usage fees paid related parties part transaction described footnote 9 relating vse approximately 93 million rental usage fees related parties prepaid december 31 2001 set related party receivables environmental costs company subject potential liability government regulations various claims legal actions pending may asserted company concerning environmental matters estimates future costs environmental matters necessarily imprecise due numerous uncertainties including enactment new laws regulations development application new technologies identification new sites company may remediation responsibility apportionment collectibility remediation costs among responsible parties company establishes reserves environmental matters loss probable reasonably estimable companys reserves environmental matters totaled 07 million december 31 2001 17 million december 31 2000 company involved legal proceedings michigan department environmental quality mdeq concerning emissions grand blanc paint facility october 1999 parties litigation reached agreement principle settle case installation full pollution abatement equipment grand blanc facility payment 11 million company entered consent decree january 2001 settle matter fourth quarter 1999 company established reserve amount 11 million relating payment made payment february 2001 ongoing compliance requirements company substantially completed conditions consent decree believes matter resolved december 1999 mdeq contacted grand blanc facility relating classification waste leaving facility company discussing issue mdeq conducting tests waste result contact avoid future liability company voluntarily changed classification waste subsequent disposals even though company disagreed mdeq addition company changed materials certain processes remove concern mdeq changing classification waste disposal subsequent contact company limited potential liability disposals prior contact however company may exposed liability past disposal march 20 2000 company received notice warning mdeq regarding matter result notice received grand blanc facility company voluntarily undertook actions grand rapids facility reduce risk potential damage claims procedures methods used grand rapids grand blanc facilities present time possible estimate effect resolution issues management believes range exposure would appear 20000 11 million company established reserve 20000 item 1998 1999 mdeq issued 3 letters violation companys grand rapids michigan facility alleging violations certain emission limitations coating solvent content requirements facilitys state air use permit late 2000 company filed suit mdeq contesting violations 2001 jointly mdeq company suspended proceedings suit presently reviewing discussing alleged violations attempt resolve matter without litigation possible violations may result computation reporting discrepancies mdeq december 2001 company received notice violation environmental protection agency epa regarding violation matters years covered mdeqs prior notices year 2001 company continues meet mdeq epa regarding violations possible mdeq epa may seek administrative penalties connection resolution matters result operational changes made grand rapids facility mid 2001 major source violations ceased company believe amount penalties material adverse effect operations resolution matters require material capital expenditures although assurance case late 2000 company notified union carbide corporation based upon usage paint application equipment grand blanc facility company obligated pay certain royalties related patent infringements informed union carbide modifications made believe infringed upon applicable patents received response union carbide december 2001 company agreed settlement lawsuit filed relating pricing issues arising subsequent acquisition made 1996 statement operations year ended december 31 2001 company included 70 million income result settlement company party various contractual legal environmental proceedings assert claims large amounts although ultimate cost resolving matters could precisely determined december 31 2001 management believes based currently known facts circumstances disposition matters material adverse effect companys consolidated financial position results operations matters subject many uncertainties outcome individual matters predictable assurance remote less likely final resolution matters may require company make expenditures excess established reserves extended period time range amounts cannot reasonably estimated companys reserves set based upon review costs may incurred considering creditworthiness guarantors andor indemnification third parties company received company covered insurance unfavorable environmental outcomes relies established reserves guarantees indemnifications received 11 concentrations companys sales audi general motors corporation gm daimlerchrysler corporation daimlerchrysler volkswagen expressed percentage sales 16 12 respectively 2001 2000 percentages 14 13 11 audi gm daimlerchrysler volkswagen respectively 1999 percentages 18 13 12 11 9 gm audi daimlerchrysler ford motor company ford volkswagen respectively many companys automotive industry customers unionized work stoppages slowdowns experienced employee relations policies could adverse effect companys results operations approximately 38 companys north american workforce covered collective bargaining agreements portion european workforce covered collective bargaining agreements uaw contract lancaster facility renegotiated 2001 extending contract 2006 uaw contract seabrook facility expires june 2002 negotiations begun new agreement seabrook company expects reach agreement seabrook employees prior expiration date current contract union contracts expire mid 2003 12 pensions profitsharing salary reduction plan north america company sponsors profitsharing salary reduction 401k plans cover substantially north american employees plans provide company contribute discretionary amount year contributions 18 million 23 million 23 million years ended december 31 2001 2000 1999 venture holdings corporation bailey corporation bailey merged july 1997 various retirement plans covering substantially north american employees including two defined benefit pension plans covering fulltime hourly salaried employees benefits payable plans generally determined based employees length service earnings plans funding policy make least minimum annual contributions required federal law regulation change benefit obligation years ended december 31 2001 2000 follows thousands change market value plan assets years ended december 31 2001 2000 follows thousands funded status defined benefit plans december 31 2001 follows thousands funded status defined benefit plans december 31 2000 follows thousands net periodic pension expense years ended december 31 2001 2000 included following components thousands date used measure plan assets liabilities september 30 year weightedaverage assumed discount rate 75 80 2001 2000 respectively assumed rate return plan assets 85 2001 2002 respectively salary based plans expected rate increase compensation levels 00 salaried plans frozen december 31 2001 company recorded intangible pension asset 14 million offset recording additional minimum pension liability additional amount 02 million recorded net tax members equity december 31 2001 represented minimum pension liability excess unrecognized prior service cost plan assets consist principally cash equivalents listed common stocks debentures fixed income securities salaried pension plan frozen since 1992 service liability accrue plan 1998 additional salaried pension plan hourly pension plan frozen service liability accrue plans effective january 1 1999 three frozen plans merged one plan merged plan terminated 2000 europe peguform germany maintains one defined benefit pension plan covering fulltime hourly salaried employees plus individual defined benefit pension agreements managers members board benefits payable plans generally determined based employees length service earnings benefit plans funded change benefit obligation year ended december 31 2001 2000 follows thousands funded status defined benefit plans december 31 2001 follows thousands funded status defined benefit plans december 31 2000 follows thousands net periodic pension expense year ended december 31 2001 2000 included following components thousands date used measure plan assets liabilities december 31 2001 2000 weightedaverage assumed discount rate 60 2001 2000 salary based plans expected rate increase compensation levels 15 25 2001 20 2000 part acquisition made european operations fourth quarter 2001 assumed pension liability 12 million liability included benefit obligation end year 13 income taxes amounts financial statements related income taxes operations venture holdings corporation peguform subsidiaries significant subsidiaries elected corporation flow tax status internal revenue code incur domestic foreign income tax member required report income gains losses deductions credits corporations flow entities included llc individual tax returns provision income tax benefit expense period ended thousands company provide us income taxes foreign withholding taxes cumulative undistributed earnings foreign subsidiaries considered permanently reinvested outside us effective tax rate venture holdings corporation pretax income 454 year ended december 31 2001 52 relates permanent differences deductible income taxes primarily goodwill amortization 52 state local income taxes net federal tax benefit effective rate foreign entities pretax income 641 year ended december 31 2001 effective tax rate venture holdings corporation pretax income 74 year ended december 31 2000 328 relates permanent differences deductible income taxes primarily goodwill amortization 52 state local income taxes net federal tax benefit effective tax rate foreign entities pretax income 952 year ended december 31 2000 effective tax rate venture holdings corporation pretax income 653 year ended december 31 1999 242 relates permanent differences deductible income taxes primarily goodwill amortization 52 state local income taxes net federal tax benefit effective tax rate foreign entities pretax income 368 year ended december 31 1999 tax benefits generated 2001 primarily result currency exchange movements due decrease euro tax benefits generated 2000 primarily result finalizing restructuring peguform group companies reduction tax rates germany recognition benefit nol carryforwards taxeffected temporary differences carryforwards comprised deferred assets liabilities follows thousands current portion deferred tax assets 77 million 92 million included prepaid current assets december 31 2001 2000 respectively current portion deferred tax liabilities 04 million 05 million included accrued expenses december 31 2001 2000 respectively result restructuring peguform group companies deferred tax liabilities goodwill reduced 219 million december 31 2000 venture holdings corporation us net operating loss carryforwards totaled 152 million 334 million december 31 2001 2000 respectively begins expire year 2011 peguform france net operating loss carryforwards approximately 156 million 119 million december 31 2001 2000 respectively unlimited expiration period peguform brazil net operating loss carryforwards approximately 243 million 185 million december 31 2001 2000 respectively unlimited expiration period venture germany net operating loss carryforwards approximately 1211 million 622 million december 31 2001 2000 respectively unlimited expiration period alternative minimum tax credit carryforwards totaled 12 million 08 million december 31 2001 2000 respectively expiration date management believes net operating loss carryforwards december 31 2001 realizable based forecasted earnings available tax planning strategies 14 segment reporting operating segments defined components enterprise separate financial information available evaluated regularly chief operating decision maker deciding allocate resources assessing performance third quarter 2001 company implemented new organization structure closer alignment significant customer base consistent new organization company one reportable segment automotive one reportable segment replaces previous geographicoriented reportable segments following table presents net sales longlived assets geographic area twelve months ended december 31 thousands 15 condensed consolidating financial statements venture successor venture holdings trust certain whollyowned domestic subsidiaries jointly severally liable 1997 senior notes issued july 9 1997 may 27 1999 certain 100owned domestic subsidiaries venture became guarantors 1997 senior notes guarantees full unconditional joint several venture issued 1999 notes may 27 1999 connection peguform acquisition result venture acquired certain additional foreign subsidiaries 1999 notes guaranteed ventures 100owned domestic subsidiaries guarantees 100owned domestic subsidiaries full unconditional joint several principal elimination entries eliminate investments subsidiaries intercompany balances transactions 1997 senior notes following condensed consolidating financial information presents 1 condensed consolidating financial statements years ended december 31 2001 2000 venture coissuer 1997 senior notes b subsidiaries coissuers 1997 senior notes c guarantor subsidiaries nonguarantor subsidiaries e company consolidated basis 2 elimination entries necessary consolidate venture issuers guarantor subsidiaries nonguarantor subsidiaries condensed consolidating balance sheet december 31 2001 dollars thousands condensed consolidating statements income year ended december 31 dollars thousands condensed consolidating statements cash flows year ended december 31 dollars thousands condensed consolidating balance sheet december 31 2000 dollars thousands condensed consolidating statements income year ended december 31 dollars thousands condensed consolidating statements cash flows year ended december 31 dollars thousands condensed consolidating statements income year ended december 31 dollars thousands condensed consolidating statements cash flows year ended december 31 dollars thousands 1999 notes following condensed consolidating financial information presents 1 condensed consolidating financial statements years ended december 31 2001 2000 venture sole issuer 1999 notes b guarantor subsidiaries c nonguarantor subsidiaries company consolidated basis 2 elimination entries necessary consolidate venture guarantor subsidiaries nonguarantor subsidiaries condensed consolidating balance sheet december 31 2001 dollars thousands condensed consolidating statements income year ended december 31 dollars thousands condensed consolidating statements cash flows year ended december 31 dollars thousands condensed consolidating balance sheet december 31 2000 dollars thousands condensed consolidating statements income year ended december 31 dollars thousands condensed consolidating statements cash flows year ended december 31 dollars thousands condensed consolidating statements income year ended december 31 dollars thousands condensed consolidating statements cash flows year ended december 31 dollars thousands item 9 item 8 financial statements supplementary data venture holdings company llc index consolidated financial statements independent auditors report trustee venture holdings company llc fraser michigan audited accompanying consolidated balance sheets venture holdings company llc december 31 1999 1998 related consolidated statements operations comprehensive income members equity cash flows three years period ended december 31 1999 audits also included financial statement schedule listed index item 14 financial statements financial statement schedule responsibility companys management responsibility express opinion financial statements financial statement schedule based audits conducted audits accordance auditing standards generally accepted united states america standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement audit includes examining test basis evidence supporting amounts disclosures financial statements audit also includes assessing accounting principles used significant estimates made management well evaluating overall financial statement presentation believe audits provide reasonable basis opinion financial statements present fairly material respects consolidated financial position venture holdings company llc december 31 1999 1998 results operations cash flows three years period ended december 31 1999 conformity accounting principles generally accepted united states america also opinion financial statement schedule considered relation basic consolidated financial statements taken whole presents fairly material respects information set forth therein deloitte touche llp march 30 2000 detroit michigan venture holdings company llc consolidated balance sheets dollars thousands see notes consolidated financial statements venture holdings company llc consolidated statements operations comprehensive income dollars thousands see notes consolidated financial statements venture holdings company llc consolidated statements changes members equity dollars thousands see notes consolidated financial statements venture holdings company llc consolidated statements cash flows dollars thousands see notes consolidated financial statements venture holdings company llc notes consolidated financial statements 1 organization summary accounting policies organization 1987 sole shareholder venture group companies contributed common stock companies venture holdings trust simultaneously certain property plant equipment contributed sole shareholder certain companies owned trust exchange shareholder named sole beneficiary trust may 1999 trust effected trust contribution contributing assets including capital stock companies owned trust membership interest venture holdings company llc venture whollyowned subsidiary trust also assumed obligations trust sole member venture principles consolidation consolidated financial statements include accounts venture ventures domestic foreign subsidiaries whollyowned majorityowned collectively referred company companys investment less majorityowned business accounted equity method intercompany accounts transactions eliminated estimates preparation companys financial statements conformity generally accepted accounting principles requires management make estimates assumptions affect reported amounts assets liabilities disclosures contingent assets liabilities date financial statements reported amounts revenues expenses reporting period actual results could differ estimates cash equivalents highly liquid investments initial maturity three months less classified cash equivalents inventories manufactured parts inventories stated lower cost market using firstin firstout method inventory also includes costs associated building molds contract molds owned company used companys manufacturing operations transferred tooling property plant equipment molds operational property depreciation property plant equipment recorded cost depreciation computed straightline method estimated useful lives various classes assets tooling amortized piece price straight line basis related production contract generally 3 7 years principal estimated useful lives follows leasehold improvements amortized useful life term lease whichever shorter expenditures maintenance repairs charged expense incurred assets deferred financing costs included assets amortized life related financing arrangement company holds 50 interest celulosa fabril cefa sa zaragozaspain investment accounted equity method program costs certain costs incurred design components built customers recorded deferred program costs included assets costs recovered based units produced year term production contracts see recent accounting pronouncements intangible assets purchase price companies excess fair value net identifiable assets acquired goodwill amortized 30 years using straightline method amount goodwill reported december 31 1999 1998 1684 million 520 million respectively net accumulated amortization longlived assets longlived assets disposed effective january 1 1996 statement financial accounting standards sfas 121 accounting impairment longlived assets longlived assets disposed adopted statement establishes accounting standards impairment longlived assets certain identifiable intangibles goodwill related assets held used longlived certain identifiable intangibles disposed statement requires longlived assets certain identifiable intangibles held used entity reviewed impairment whenever events changes circumstances indicate carrying amount asset may recoverable addition statement requires certain longlived assets identifiable intangibles disposed reported lower carrying amount fair value less cost sell company periodically evaluates carrying value impairment evaluations based principally undiscounted cash flows operations asset related derivative financial instruments company party number interest rate crosscurrency swap agreements company accounts certain interest rate swap agreements using settlement accounting alter characteristics liabilities matched cash flows interest rate swap agreements accounted adjustments interest expense certain interest rate swap agreements meet criteria settlement accounting principles generally accepted united states america cash flows interest rate swap agreements included income estimated fair market value financial instruments recorded investment balance sheet noncash change estimated fair market value recorded income companys crosscurrency swap agreements meet criteria hedge accounting principles generally accepted united states america cash flows crosscurrency swap agreements included income estimated fair market value financial instruments recorded investment balance sheet noncash change estimated fair market value recorded income see note 7 derivative financial instruments risk management see note 16 subsequent event revenue recognition revenue sale manufactured parts recognized parts shipped revenue mold sales recognized using completed contract method due reasonably short build cycle accounts receivable includes unbilled receivables mold contracts substantially complete amounts billed final approval received customer accordance contract terms provision estimated losses uncompleted contracts made period losses identified income taxes amounts financial statements relating income taxes relate subsidiaries limited liability companies elected corporation status calculated using statement financial accounting standards board 109 accounting income taxes sfas 109 significant subsidiaries elected taxed corporations limited liability companies taxed partnership internal revenue code beneficiary venture holdings trust required report income gains losses deductions credits corporations limited liability companies included trust individual tax returns foreign currencies currency translation based upon statement financial accounting standards sfas 52 foreign currency translation whereby assets liabilities foreign subsidiaries functional currency local currency generally translated using period end exchange rates income statements translated using average exchange rates period differences arising translation assets liabilities comparison translation previous periods included separate component stockholders equity reclassifications certain reclassifications made 1998 financial statements order conform 1999 presentation recent accounting pronouncements april 1998 accounting standards executive committee published accounting statement position sop 985 reporting costs startup activities sop 985 establishes standards financial reporting startup costs organization costs requires costs expensed incurred company adopted sop 985 provisions sop applicable company fiscal year beginning january 1 1999 adoption standard material impact companys financial position results operations june 1998 fasb approved sfas 133 accounting derivative instruments hedging activities establishes accounting reporting standards derivative instruments including certain derivative instruments embedded contracts hedging activities requires entity recognize derivatives either assets liabilities statement financial position measure instruments fair value standard effective january 1 2001 company currently analyzing impact standard financial position results operations september 1999 emerging issues task force eitf reached consensus issue 995 accounting preproduction costs related longterm supply arrangements issue addresses preproduction costs incurred oem suppliers perform certain services related design development parts supply oem well design development costs build molds dies tools used producing parts consensus generally requires design development costs products sold longterm supply arrangements expensed unless contractual guarantee provides specific required payments design development costs consensus effective costs incurred december 31 1999 december 31 1999 assets includes approximately 201 million program costs customer reimbursement anticipated contractually guaranteed costs continue amortized future periods reimbursed companys customers venture comply provisions consensus expensing program costs incurred december 31 1999 qualify capitalization 2 acquisition may 28 1999 company purchased peguform gmbh peguform leading european supplier high performance interior exterior plastic modules systems components european oems peguform acquisition approximately 463 million consideration paid peguform subject adjustment based upon final negotiation closing statements peguform acquisition accounted purchase accordingly assets purchased liabilities assumed acquisition reflected accompanying consolidated balance sheets estimated fair market value operating results peguform included consolidated financial statements since date acquisition preliminary purchase price related allocation follows millions excess purchase price fair market value net assets acquired goodwill estimated approximately 126 million amortized straightline basis 30 years adjustments purchase price related allocation may occur result obtaining information regarding liabilities assumed outcome final negotiations former owner revisions preliminary estimates fair values made date purchase company believe revisions original purchase price allocation significant uncertainties could result adjustment goodwill 30 million net effect adjustments described reported adjustment purchase price related allocation described following unaudited pro forma financial data presented illustrate estimated effects peguform acquisition transaction occurred beginning periods presented 3 accounts receivable excluding receivables related parties substantially receivables companies operating automobile industry 4 inventories included following thousands 5 property plant equipment property plant equipment consisted following thousands included property plant equipment buildings held capitalized leases assets cost basis 575 million accumulated depreciation relating assets 48 million december 31 1999 december 31 1998 assets cost basis 94 million accumulated depreciation 26 million 6 debt consisted following thousands may 27 connection peguform acquisition company entered new credit agreement amended june 4 1999 credit agreement credit agreement provides borrowings 1 175 million revolving credit facility addition matters described used working capital general corporate purposes 2 75 million fiveyear term loan 3 200 million sixyear term loan b 4 125 million 18month interim term loan march 20 2000 company applied prepayment 42 million 18month interim term loan see note 16 notes consolidated financial statements company intends refinance remaining principal balance 18month interim term loan ability use proceeds revolving credit facility revolving credit facility permits company borrow lesser borrowing base computed percentage accounts receivable inventory 175 million less amount letters credit issued credit agreement pursuant borrowing base formula december 31 1999 company could borrowed additional 1665 million revolving credit facility interest rates credit agreement based london interbank offer rate libor alternate base rate abr larger banks corporate base rate interest announced timetotime federal funds rate plus 12 per annum case nondollar denominated loans euro currency reference rate interest rates determined reference relevant interest rate option plus applicable margin defined based companys consolidated ratio total debt ebitda obligations credit agreement jointly severally guaranteed ventures domestic subsidiaries secured first priority security interests substantially assets venture domestic subsidiaries may 27 1999 venture issued 125 million 11 unsecured senior notes 1999 senior notes 125 million 12 unsecured senior subordinated notes 1999 senior subordinated notes together 1999 senior notes 1999 notes net proceeds issuances 243 million together borrowings credit agreement used 1 fund cash consideration 463 million paid peguform acquisition 2 redeem companys 9 34 senior subordinated notes due 2004 redemption price 104875 plus accrued interest 3 refinance amounts outstanding previous credit agreements 4 pay certain fees expenses related peguform acquisition offering 1999 notes 5 fund working capital corporate purposes see note 13 extraordinary item information related early extinguishment debt credit agreement documents governing companys 9 12 senior notes due 2005 1997 senior notes 1999 notes contain restrictive covenants relating cash flow fixed charges debt members equity distributions leases liens assets companys debt obligations contain various restrictive covenants require company maintain stipulated financial ratios including minimum consolidated net worth adjusted yearly fixed charge coverage ratio interest coverage ratio total indebtedness ratio december 31 1999 company compliance debt covenants scheduled maturities debt december 31 1999 follows thousands simultaneously issuance 1999 notes reduce companys exposure fluctuations foreign exchange rates reduce companys overall cost capital company entered various financial instrument transactions refer note 7 derivative financial instruments risk management see note 16 subsequent event related repayment portion interim term loan 7 derivative financial instruments risk management carrying values cash equivalents accounts receivable accounts payable credit agreement approximate fair market value due shortterm maturities instruments debt instruments estimated fair values companys debt instruments determined using available market information however considerable judgment required interpreting market data develop estimates fair value accordingly estimates presented herein may indicative amounts company could realize current market exchange use different assumptions valuation methodologies may material effect estimated fair value amounts fair value longterm debt estimated using quoted market prices thousands derivative financial instruments connection issuance debt finance peguform acquisition venture entered two fiveyear euro dollar crosscurrency interest rate swap agreements one threeyear euro dollar crosscurrency interest rate swap agreement agreements executed major international financial institutions company anticipate institutions fail perform two fiveyear crosscurrency interest rate swap agreements company receives interest based fixed us dollar interest rate 115 pays fixed euro dollar rate 90 outstanding notional principal amounts us dollars euro dollars respectively held maturity company would paid 237 million euro dollars exchange 250 million see note 16 subsequent event relating termination crosscurrency swap agreements threeyear crosscurrency interest rate swap agreement company receives interest based fixed us dollar interest rate 95 pays fixed euro dollar rate 71 outstanding notional principal amounts us dollars euro dollars respectively held maturity company would paid 194 million euro dollars exchange 205 million see note 16 subsequent event relating termination crosscurrency swap agreements crosscurrency interest rate swap agreement comprised three separate financial instruments consisting two interest rate swap agreements crosscurrency swap agreement combined underlying fixed us dollar interest rate debt match debt economically converted fixed euro dollar interest rate debt one interest rate swap agreements within crosscurrency interest rate swap agreements accounted using settlement accounting cash flows interest rate swap agreements accounted adjustments interest expense 1999 interest rate swap agreements resulted reduction interest expense 09 million interest rate swap agreements within crosscurrency interest rate swap agreements meet criteria settlement accounting generally accepted accounting principles cash flows interest rate swap agreements included income 1999 interest rate swap agreements resulted realized loss reduction income 24 million estimated fair market value financial instruments 134 million recorded investment balance sheet december 31 1999 corresponding 134 million noncash change estimated fair market value recorded income 1999 crosscurrency swap agreements within crosscurrency interest rate swap agreements meet criteria hedge accounting generally accepted accounting principles 1999 crosscurrency swap agreements resulted realized gain increase income 83 million estimated fair market value financial instruments 271 million recorded investment balance sheet december 31 1999 corresponding 271 million noncash change estimated fair market value recorded income 1999 company also entered interest rate swap agreements notional value 55 million mitigate risk associated changing interest rates certain floating rate debt interest rate swap agreements accounted using settlement accounting impact interest rate swap agreements resulted 08 million 06 million additional interest expense 1999 1998 respectively fair value financial instruments estimated 02 million 20 million december 31 1999 1998 respectively 8 related party transactions company entered various transactions entities sole beneficiary trust owns controls transactions include leases real estate usage machinery equipment facilities purchases sales inventory performance manufacturing related services administrative services insurance activities payment receipt sales commissions addition employees company made available certain entities services design model tool building since trust sole member venture holdings company llc terms transactions result armslength bargaining however company believes transactions terms less favorable company would obtained transactions arrangements armslength transaction nonaffiliated persons company provides arranges others provide certain related parties various administrative professional services including employee group insurance benefit coverage property insurance financial cash management administrative services data processing related parties charged fees premiums services administrative services allocated entity incurred certain entities charged management fee connection cash management services company pays administrative operating expenses behalf certain related parties charges amounts paid results receivables related parties connection mentioned cash management services company pays administrative operating expenses behalf certain related parties charges amounts paid results receivables related parties company purchased pompo insurance indemnity company ltd pompo corporation indirectly owned sole beneficiary trust insurance cover certain medical claims companys covered employees certain workers compensation claims company remains obligor amounts excess insurance coverage amounts paid pompo coverages liability settled less amount premium portion excess available premium credit future insurance company accounted arrangement using deposit method wherein full amount estimated liability claims recorded liabilities premiums paid pompo recorded assets time claims settled company made additional payments 08 million 06 million pompo 1999 1998 respectively payments 1997 december 31 1999 1998 company approximately 37 million 34 million respectively deposit pompo portion amount invested short term basis related party 1999 company entered agreement purchase vehicles shelby american inc shelby entity sole beneficiary trust 75 ownership interest venture put deposit 13 million vehicles pay additional 10 million vehicles complete company intends market vehicles parties deposit recorded current assets december 31 1999 addition company sold certain parts shelby use manufacturing vehicles performed engineering services sales shelby year ended december 31 1999 38 million company contracts deluxe pattern corporation deluxe entity wholly owned sole beneficiary trust provide company design prototype fixture work year ended december 31 1999 1998 1997 company charged 110 million 66 million 92 million arrangement majority amounts capitalized assets amortized term respective program company production contract remainder amounts billed collected outside third parties 2000 company may required expense costs incurred due recently issued accounting pronouncement deluxe also buys services company principally labor materials years ended december 31 1999 1998 1997 deluxe made purchases company recognized revenue amount 129 million 173 million 46 million addition transactions deluxe also charged company approximately 11 million years ended december 31 1999 1998 1997 equipment rental services net effect transactions deluxe company receivable balance deluxe 323 million 200 million december 31 1999 1998 respectively 1999 company advanced approximately 55 million venture africa entity wholly owned sole beneficiary trust construction refurbishment paint line amount included receivables related parties december 31 1999 time company makes certain employees available sole beneficiary trust purposes performing services golf club owned companies controlled beneficiary performing construction services personal residence beneficiary indebted company amount 05 million 09 million december 31 1999 1998 1999 company contracted mm flow systems llc mm entity owned son sole beneficiary trust manufacture certain machinery equipment used companys grand blanc facility company purchased three different machines mm approximate cost 965000 addition company contracts mm dispose scrap parts previously rejected automotive original equipment manufacturers companys sales parts mm year december 31 1999 approximately 200000 approximates recovery material cost producing parts company leases buildings machinery equipment book value approximately 05 million entity sole beneficiary trust owns significant equity interest 1999 1998 1997 company received 02 million per year connection agreement venture sales engineering vse venture foreign sales corporation corporations wholly owned sole beneficiary trust serve companys sales representatives company pays venture sales engineering venture foreign sales corporation aggregate sales commission 3 production sales vse conducted sales marketing activities around world company advanced certain funds order carry work behalf company activities result net receivable vse company provided management services venture asia pacific pty ltd vap subsidiaries corporations wholly owned sole beneficiary company billed management fees commissions totaling 45 40 million vap 1999 1998 1997 respectively addition vap also liable company expenditures made behalf including tooling costs associated longterm program launched 1999 company expects receive payment receivables 2000 production longterm program increases anticipated volumes following summary transactions related parties december 31 1999 1998 1997 thousands result related party transactions net receivable included accounts receivable follows thousands 9 commitments contingencies operating leases company leases certain machinery equipment operating leases initial remaining terms one year december 31 1999 future minimum lease commitments including related party leases follows thousands rent expense operating leases agreements term greater one month including amounts paid related parties 109 million 55 63 million years ended december 31 1999 1998 1997 respectively usage fees paid based monthly usage certain machinery equipment facilities 67 40 36 million years ended december 31 1999 1998 1997 respectively exception 03 million paid 1999 usage fees paid related parties litigation december 1997 company settled litigation contractor built paint line vemco inc 20 million amount 08 million recorded reduction carrying value paint line 12 million recorded miscellaneous income resolution commercial issues fourth quarter 1998 company resolved several commercial issues resulted recovery gross profit lost current prior years resolution issues resulted additional 74 million gross profit environmental costs company subject potential liability government regulations various claims legal actions pending may asserted company concerning environmental matters estimates future costs environmental matters necessarily imprecise due numerous uncertainties including enactment new laws regulations development application new technologies identification new sites company may remediation responsibility apportionment collectibility remediation costs among responsible parties company establishes reserves environmental matters loss probable reasonably estimable companys reserves environmental matters totaled 18 million december 31 1999 13 million december 31 1998 company involved legal proceedings michigan department environmental quality concerning emissions grand blanc paint facility october 1999 parties litigation reached agreement principle settle case installation full pollution abatement equipment grand blanc facility payment us 11 million agreement subject several conditions primarily rezoning property january 2000 rezoning approval granted new equipment february 2000 company applied new permits installation equipment company currently negotiating consent decree michigan department environmental quality expects completed third quarter 2000 fourth quarter 1999 established reserve amount 11 million relating payment december 1999 michigan department environmental quality contacted grand blanc facility relating classification wastes leaving facility company discussing issue michigan department environmental quality conducting tests waste result contact avoid future liability company voluntarily changed classification waste subsequent disposals even though company disagrees michigan department environmental quality addition company changing materials certain processes remove concern michigan department environmental quality changing classification waste disposal subsequent contact company limited potential liability disposals prior contact however company may exposed liability past disposal march 20 2000 company received notice warning michigan department environmental quality regarding matter present time company unable quantify qualify liability disposals company party various contractual legal environmental proceedings assert claims large amounts although ultimate cost resolving matters could precisely determined december 31 1999 management believes based currently known facts circumstances disposition matters material adverse effect companys consolidated financial position results operations matters subject many uncertainties outcome individual matters predictable assurance remote less likely final resolution matters may require company make expenditures excess established reserves extended period time range amounts cannot reasonably estimated companys reserves set based upon review costs may incurred considering creditworthiness guarantors andor indemnification third parties company received company covered insurance unfavorable environmental outcomes relies established reserves guarantees indemnifications received 10 concentrations companys sales general motors corporation gm ford motor company ford daimlerchrysler corporation daimlerchrysler expressed percentage sales 40 27 less 10 respectively 1997 1998 percentages 38 23 15 gm ford daimlerchrysler respectively 1999 percentages 18 13 12 11 9 gm audi daimlerchrysler ford volkswagen respectively many companys automotive industry customers unionized work stoppages slowdowns experienced employee relations policies could adverse effect companys results operations net sales second third quarters 1998 impacted negatively due strikes certain general motors plants company believes portion lost sales recouped fourth quarter 1998 gm accelerated production refill distribution channels approximately 30 companys north american workforce covered collective bargaining agreements portion european workforce covered collective bargaining agreements 11 pensions profitsharing salary reduction plan north america company sponsors profitsharing salary reduction 401k plans cover substantially north american employees plans provide company contribute discretionary amount year contributions 23 22 million years ended december 31 1999 1998 1997 respectively venture holdings corporation bailey corporation bailey merged july 1997 various retirement plans covering substantially north american employees including three defined benefit pension plans covering fulltime hourly salaried employees benefits payable plans generally determined based employees length service earnings plans funding policy make least minimum annual contributions required federal law regulation change benefit obligation years ended december 31 1999 1998 follows thousands change market value plan assets years ended december 31 1999 1998 follows thousands funded status defined benefit plans december 31 1999 follows thousands funded status defined benefit plans december 31 1998 follows thousands net periodic pension expense benefit years ended december 311999 1998 included following components thousands date used measure plan assets liabilities september 30 year weightedaverage assumed discount rate 775 65 1999 1998 respectively assumed rate return plan assets 85 1999 1998 respectively salary based plans expected rate increase compensation levels 00 salaried plans frozen 55 1999 1998 respectively plan assets consist principally cash equivalents listed common stocks debentures fixed income securities salaried pension plan frozen since 1992 service liability accrue plan 1998 additional salaried pension plan hourly pension plan frozen service liability accrue plans freezing salaried pension plan resulted curtailment gain approximately 648000 included calculation net periodic pension benefit year ended december 31 1998 freezing hourly plan result curtailment gain loss since accumulated projected benefit obligation plan equal effective january 1 1999 three frozen plans merged one plan merged plan eventually terminated europe peguform gmbh maintains one defined benefit pension plan covering fulltime hourly salaried employees plus individual defined benefit pension agreements managers members board benefits payable plans generally determined based employees length service earnings benefit plans funded change benefit obligation year ended december 31 1999 follows thousands funded status defined benefit plans december 31 1999 follows thousands net periodic pension benefit expense year ended december 31 1999 included following components thousands date used measure plan assets liabilities december 31 1999 weightedaverage assumed discount rate 60 1999 salary based plans expected rate increase compensation levels 15 1999 12 income taxes amounts financial statements related income taxes operations venture holdings corporation peguform gmbh significant subsidiaries elected corporation flow tax status internal revenue code incur domestic foreign income tax beneficiary required report income gains losses deductions credits corporations flow entities included trust individual tax returns provision income tax expense period ended thousands company provide us income taxes foreign withholding taxes cumulative undistributed earnings foreign subsidiaries considered permanently reinvested outside us effective tax rate venture holdings corporation pretax income 6527 year ended december 31 1999 2417 relates permanent differences deductible income taxes primarily goodwill amortization 52 state local income taxes net federal tax benefit effective tax rate peguform gmbh pretax income 368 year ended december 31 1999 effective tax rate pretax income 704 year ended december 31 1998 299 relates permanent differences deductible income taxes 52 state local income taxes net federal tax benefit effective tax rate pretax income 583 year ended december 31 1997 181 relates permanent differences deductible income taxes 52 state local income taxes net federal tax benefit taxeffected temporary differences carryforwards comprised deferred assets liabilities follows thousands current portion deferred tax assets 107 69 million included prepaid expense december 31 1999 1998 respectively current portion deferred tax liabilities 12 million included accrued expenses december 31 1999 venture holdings corporation us net operating loss carryforwards totaled 308 264 million december 31 1999 1998 begin expire year 2011 peguform france net operating loss carryfowards approximately 16 million december 31 1999 unlimited expiration period alternative minimum tax credit carryforwards totaled 764 thousand december 31 1999 expiration date management believes net operating loss carryforwards december 31 1999 realizable based forecasted earnings available tax planning strategies 13 extraordinary item connection issuance 1999 notes company redeemed 9 34 senior subordinated notes due 2004 redemption price 104875 plus accrued interest resulted extraordinary loss 56 million 38 million prepayment penalty plus unamortized deferred financing costs 18 million 14 segment reporting prior peguform acquisition may 28 1999 company organized operated one reporting segment result peguform acquisition company organized managed based primarily geographic markets served organizational structure companys operating segments reported two reportable segments north america europe following table presents net sales financial information business segment twelve months ended december 31 1999 thousands 15 condensed consolidating financial statements venture successor venture holdings trust certain whollyowned domestic subsidiaries jointly severally liable 1997 senior notes issued july 9 1997 may 27 1999 certain whollyowned domestic subsidiaries venture became guarantors 1997 senior notes guarantees full unconditional joint several venture issued 1999 notes may 27 1999 connection peguform acquisition result venture acquired certain additional foreign subsidiaries 1999 notes guaranteed ventures whollyowned domestic subsidiaries guarantees whollyowned domestic subsidiaries full unconditional joint several condensed consolidating financial information periods prior june 30 1999 presented prior may 27 1999 nonguarantors nonissuers 1997 senior notes nonguarantors 1999 notes periods inconsequential individually aggregate consolidated financial statements management believe separate financial statements issuer subsidiaries guarantor subsidiaries material investors 1997 senior notes 1999 notes principal elimination entries eliminate investments subsidiaries intercompany balances transactions 1997 senior notes following condensed consolidating financial information presents 1 condensed consolidating financial statements twelve months ended december 31 1999 venture coissuer 1997 senior notes b subsidiaries coissuers 1997 senior notes c guarantor subsidiaries nonguarantor subsidiaries e company consolidated basis 2 elimination entries necessary consolidate venture issuers guarantor subsidiaries nonguarantor subsidiaries condensed consolidating balance sheet december 31 1999 dollars thousands condensed consolidating statements income year ended december 31 1999 dollars thousands condensed consolidating statements cash flows year ended december 31 1999 dollars thousands 1999 notes following condensed consolidating financial information presents 1 condensed consolidating financial statements year ended december 31 1999 venture sole issuer 1999 notes b guarantor subsidiaries c nonguarantor subsidiaries company consolidated basis 2 elimination entries necessary consolidate venture guarantor subsidiaries nonguarantor subsidiaries condensed consolidating balance sheet december 31 1999 dollars thousands condensed consolidating statements income year ended december 31 1999 dollars thousands condensed consolidating statements cash flows year ended december 31 1999 dollars thousands 16 subsequent event march 20 2000 company terminated three crosscurrency swap agreements realized cash gain 42 million entire cash proceeds applied prepayment companys 125 million interim term loan crosscurrency swap agreements replaced twelvemonth foreign exchange collar item 9 item 8 report foreign currency exchange rate risk foreign currency exposures related buying selling financing currencies local currencies operate significant foreign currency exposures relate germany spain france czech republic mexico brazil canada december 31 2000 net fair value asset financial instruments exposure foreign currency risk approximately 06 million potential loss fair value financial instruments hypothetical 10 adverse change quoted foreign currency exchange rates would approximately 57000 model assumes parallel shift foreign exchange currency exchange rates exchange rates rarely move direction assumption exchange rates change parallel fashion may overstate impact changing exchange rates assets liabilities denominated foreign currency portion assets based foreign operations translated u dollars foreign currency exchange rates effect end period effect translation reflected separate component members equity accordingly consolidated members equity fluctuate depending upon weakening strengthening u dollar respective foreign currency interest rate risk exposure interest rate risk portion debt obligations one percent change interest rates floating rate debt would result approximately 38 million change earnings item 8 financial statements supplementary data venture holdings company llc index consolidated financial statements page report independent public accountants 21 consolidated balance sheets 22 consolidated statements operations comprehensive income 23 consolidated statements changes members equity 24 consolidated statements cash flow 25 notes consolidated financial statements 26 independent auditors report trustee venture holdings company llc fraser michigan audited accompanying consolidated balance sheets venture holdings company llc december 31 2000 1999 related consolidated statements operations comprehensive income members equity cash flows three years period ended december 31 2000 audits also included financial statement schedule listed index item 14 financial statements financial statement schedule responsibility ventures management responsibility express opinion financial statements financial statement schedule based audits conducted audits accordance auditing standards generally accepted united states america standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement audit includes examining test basis evidence supporting amounts disclosures financial statements audit also includes assessing accounting principles used significant estimates made management well evaluating overall financial statement presentation believe audits provide reasonable basis opinion financial statements present fairly material respects consolidated financial position venture holdings company llc december 31 2000 1999 results operations cash flows three years period ended december 31 2000 conformity accounting principles generally accepted united states america also opinion financial statement schedule considered relation basic consolidated financial statements taken whole present fairly material respects information set forth therein deloitte touche llp march 31 2001 detroit michigan venture holdings company llc consolidated balance sheets dollars thousands see notes consolidated financial statements venture holdings company llc consolidated statements operations comprehensive income dollars thousands see notes consolidated financial statements venture holdings company llc consolidated statements changes members equity dollars thousands see notes consolidated financial statements venture holdings company llc consolidated statements cash flows dollars thousands see notes consolidated financial statements venture holdings company llc notes consolidated financial statements 1 organization summary accounting policies organization 1987 sole shareholder venture group companies contributed common stock companies venture holdings trust simultaneously certain property plant equipment contributed sole shareholder certain companies owned trust exchange shareholder named sole beneficiary trust may 1999 trust effected trust contribution contributing assets including capital stock companies owned trust membership interest venture holdings company llc venture wholly owned subsidiary trust also assumed obligations trust sole member venture principles consolidation consolidated financial statements include accounts venture ventures domestic foreign subsidiaries wholly owned majorityowned collectively referred company companys investment less majorityowned business accounted equity method intercompany accounts transactions eliminated estimates preparation companys financial statements conformity generally accepted accounting principles requires management make estimates assumptions affect reported amounts assets liabilities disclosures contingent assets liabilities date financial statements reported amounts revenues expenses reporting period actual results could differ estimates cash equivalents highly liquid investments initial maturity three months less classified cash equivalents inventories manufactured parts inventories stated lower cost market using firstin firstout method inventory also includes costs associated building molds contract molds owned company used companys manufacturing operations transferred tooling property plant equipment molds operational property depreciation property plant equipment recorded cost depreciation computed straightline method estimated useful lives various classes assets tooling amortized piece price straight line basis related production contract generally 3 7 years principal estimated useful lives follows leasehold improvements amortized useful life term lease whichever shorter expenditures maintenance repairs charged expense incurred assets deferred financing costs included assets amortized life related financing arrangement company holds 50 interest celulosa fabril cefa sa zaragozaspain investment accounted equity method program costs certain costs incurred design components built customers recorded deferred program costs included assets costs recovered based units produced year term production contracts intangible assets purchase price companies excess fair value net identifiable assets acquired goodwill amortized 30 years using straightline method amount goodwill reported december 31 2000 1999 1193 million 1684 million respectively net accumulated amortization see note 12 longlived assets longlived assets disposed effective january 1 1996 statement financial accounting standards sfas 121 accounting impairment longlived assets longlived assets disposed adopted statement establishes accounting standards impairment longlived assets certain identifiable intangibles goodwill related assets held used longlived certain identifiable intangibles disposed statement requires longlived assets certain identifiable intangibles held used entity reviewed impairment whenever events changes circumstances indicate carrying amount asset may recoverable addition statement requires certain longlived assets identifiable intangibles disposed reported lower carrying amount fair value less cost sell company periodically evaluates carrying value impairment evaluations based principally undiscounted cash flows operations asset related derivative financial instruments company party number interest rate collar crosscurrency swap agreements company accounts certain interest rate swap agreements using settlement accounting alter characteristics liabilities matched cash flows interest rate swap agreements accounted adjustments interest expense certain interest rate swap agreements meet criteria settlement accounting principles generally accepted united states america cash flows interest rate swap agreements included income estimated fair market value financial instruments recorded investment balance sheet noncash change estimated fair market value recorded income companys crosscurrency swap agreements meet criteria hedge accounting principles generally accepted united states america cash flows crosscurrency swap agreements included income estimated fair market value financial instruments recorded investment balance sheet noncash change estimated fair market value recorded income see note 7derivative financial instruments risk management revenue recognition revenue sale manufactured parts recognized parts shipped revenue mold sales recognized using completed contract method due reasonably short build cycle accounts receivable includes unbilled receivables mold contracts substantially complete amounts billed final approval received customer accordance contract terms provision estimated losses uncompleted contracts made period losses identified income taxes amounts financial statements relating income taxes relate subsidiaries limited liability companies elected corporation status calculated using sfas 109 accounting income taxes significant subsidiaries elected taxed corporations limited liability companies taxed partnership internal revenue code beneficiary venture holdings trust required report income gains losses deductions credits corporations limited liability companies included trust individual tax returns foreign currencies currency translation based upon sfas 52 foreign currency translation whereby assets liabilities foreign subsidiaries functional currency local currency generally translated using period end exchange rates income statements translated using average exchange rates period differences arising translation assets liabilities comparison translation previous periods included separate component stockholders equity reclassifications certain reclassifications made 1999 financial statements order conform 2000 presentation recent accounting pronouncements june 1998 fasb approved sfas 133 accounting derivative instruments hedging activities establishes accounting reporting standards derivative instruments including certain derivative instruments embedded contracts hedging activities requires entity recognize derivatives either assets liabilities statement financial position measure instruments fair value standard effective january 1 2001 company analyzed impact standard financial position results operations 2001 effect record additional liability 02 million adjustment recorded cumulative effect change accounting principle 2 acquisition may 28 1999 company purchased peguform gmbh peguform leading european supplier high performance interior exterior plastic modules systems components european oems peguform acquisition approximately 463 million second quarter 2000 agreement reached post closing adjustments related peguform acquisition reducing consideration paid peguform 18 million 445 million company used proceeds final settlement reduce outstanding borrowings following unaudited pro forma financial data presented illustrate estimated effects peguform acquisition transaction occurred beginning periods presented 3 accounts receivable excluding receivables related parties substantially receivables companies operating automobile industry 4 inventories included following thousands 5 property plant equipment property plant equipment consisted following thousands included property plant equipment buildings held capitalized leases assets cost basis 391 million accumulated depreciation relating assets 59 million december 31 2000 december 31 1999 assets cost basis 391 million accumulated depreciation 48 million 6 debt consisted following thousands march 2000 company applied prepayment 42 million 18month interim term loan matured november 27 2000 july 2000 company applied additional 8 million 2 million prepayments 18month interim term loan reducing principal balance 73 million november 2000 company repaid remaining principal balance 18month interim term loan 92 million received termination put side foreign exchange collar proceeds revolving credit facility june 29 2000 credit agreement amended several purposes first requirement company issue 125 million securities rank pari passu right payment junior companys 12 senior subordinated notes due 2009 described extended november 27 2000 march 31 2002 second credit agreement amended allow 100 million nonrecourse factoring program third certain restrictive covenants amended provide company additional flexibility stipulated financial ratios revolving credit facility permits company borrow lesser borrowing base computed percentage accounts receivable inventory 175 million less amount letters credit issued credit agreement pursuant borrowing base formula december 31 2000 company could borrowed additional 540 million revolving credit facility obligations credit agreement jointly severally guaranteed ventures domestic subsidiaries secured first priority security interests substantially assets venture domestic subsidiaries credit agreement documents governing companys 9 12 senior notes due 2005 1997 senior notes documents governing companys 11 unsecured senior notes 1999 senior notes 12 unsecured senior subordinated notes 1999 senior subordinated notes together 1999 senior notes 1999 notes contain restrictive covenants relating cash flow fixed charges debt members equity distributions leases liens assets companys debt obligations also contain various restrictive covenants require company maintain stipulated financial ratios including minimum consolidated net worth adjusted yearly fixed charge coverage ratio interest coverage ratio total indebtedness ratio december 31 2000 company compliance debt covenants scheduled maturities debt december 31 2000 follows thousands 7 derivative financial instruments risk management carrying values cash equivalents accounts receivable accounts payable credit agreement approximate fair market value due shortterm maturities instruments debt instruments estimated fair values companys debt instruments determined using available market information however considerable judgment required interpreting market data develop estimates fair value accordingly estimates presented herein may indicative amounts company could realize current market exchange use different assumptions valuation methodologies may material effect estimated fair value amounts fair value longterm debt estimated using quoted market prices thousands derivative financial instruments connection issuance debt finance peguform acquisition venture entered two fiveyear euro dollar crosscurrency interest rate swap agreements one threeyear euro dollar crosscurrency interest rate swap agreement march 2000 company terminated crosscurrency swap agreements within three original crosscurrency interest rate swap agreements realized cash gain 420 million entire cash proceeds applied prepayment companys 125 million interim term loan december 31 1999 financial instruments estimated fair market value 271 million recorded investment balance sheet corresponding unrealized gain 271 million recorded income accordingly result termination crosscurrency swap agreements net impact earnings twelve months ended december 31 2000 increase income 149 million comprised realized gain 420 million offset unrealized loss 271 million crosscurrency swap agreements replaced twelvemonth zerocost foreign exchange collar originally designed reduce economic risk company euro us dollar exchange movements notional amount put call sides foreign currency exchange collar originally 500000000 euros july 2000 company terminated put side foreign currency exchange collar received 109 million company used 27 million proceeds purchase replacement put protect additional devaluations euro us dollar exchange rate applied 80 million net cash proceeds prepayment 18month interim term loan notional amount replacement put 400000000 euros november 2000 company terminated put side foreign currency exchange collar received 92 million company used proceeds along additional borrowings revolving credit agreement repay remaining portion 18month interim term loan december 31 2000 original call side foreign currency exchange collar remains outstanding estimated fair market value financial instrument 06 million recorded investment balance sheet december 31 2000 accordingly result foreign exchange collar transactions net impact earnings twelve months ended december 31 2000 increase income 195 million comprised realized gain 201 million offset unrealized loss 06 million march 16 2001 original call side foreign currency exchange collar expired unexercised company currently foreign currency derivative transactions place protect currency movements company continuing review situation take actions deems proper one interest rate swap agreements within original crosscurrency interest rate swap agreements accounted using settlement accounting cash flows interest rate swap agreements accounted adjustments interest expense 2000 interest rate swap agreements resulted increase interest expense 05 million 1999 interest rate swap agreements resulted reduction interest expense 09 million july 2000 company paid 149 million terminate financial instruments amount capitalized amortized interest expense terms original interest rate swap agreements 2000 interest expense includes 25 million deferred interest asset amortization interest rate swap agreements within original crosscurrency interest rate swap agreements meet criteria settlement accounting generally accepted accounting principles cash flows interest rate swap agreements included income 2000 1999 interest rate swap agreements resulted realized loss reduction expense income 03 million 24 million respectively estimated fair market value financial instruments december 31 1999 134 million recorded investment balance sheet corresponding 134 million noncash change estimated fair market value recorded income 1999 july 2000 company terminated financial instruments realized cash gain 169 million plus interest income 01 million accordingly result termination interest rate swap agreements net impact earnings 2000 increase income 36 million comprised realized gain 169 million interest income 01 million offset unrealized loss 134 million july 2000 company applied 20 million net cash proceeds terminations interest rate swap agreements additional prepayment 18month interim term loan company also entered interest rate swap agreements total notional value 55 million mitigate risk associated changing interest rates certain floating rate debt 2000 certain interest rate swaps agreements notional value 25 million expired interest rate swap agreements accounted using settlement accounting impact interest rate swap agreements resulted 01 million 08 million additional interest expense 2000 1999 respectively 8 related party transactions company entered various transactions entities sole beneficiary trust owns controls transactions include leases real estate usage machinery equipment facilities purchases sales inventory performance manufacturing related services administrative services insurance activities payment receipt sales commissions addition employees company made available certain entities services design model tool building since trust sole member venture holdings company llc terms transactions result armslength bargaining however company believes transactions terms less favorable company would obtained transactions arrangements armslength transactions nonaffiliated persons company provides arranges others provide certain related parties various administrative professional services including employee group insurance benefit coverage property insurance financial cash management administrative services data processing related parties charged fees premiums services administrative services allocated entity incurred certain entities charged management fee connection cash management services company pays administrative operating expenses behalf certain related parties charges amounts paid results receivables related parties company purchased pompo insurance indemnity company ltd pompo corporation indirectly owned sole beneficiary trust insurance cover certain medical claims companys covered employees certain workers compensation claims company remains obligor amounts excess insurance coverage amounts paid pompo coverages liability settled less amount premium portion excess available premium credit future insurance company accounted arrangement using deposit method wherein full amount estimated liability claims recorded liabilities premiums paid pompo recorded assets time claims settled company made additional payments 09 million 08 million 06 million pompo 2000 1999 1998 respectively december 31 2000 1999 1998 company approximately 37 million 37 million 34 million respectively deposit pompo portion amount invested short term basis related party 1999 1998 1999 company entered agreement purchase vehicles shelby american inc shelby entity sole beneficiary trust 75 ownership interest venture made deposits approximately 13 million years ended december 31 2000 1999 vehicles company intends market vehicles parties however sales results date proven difficult achieve anticipated due quality pricing issues company currently addressing issues updated marketing plan selling vehicles company secured interest assets shelby vehicles sold planned company believes deposit 26 million fully recoverable deposit recorded assets december 31 2000 1999 company sold certain parts shelby use manufacturing vehicles performed engineering services sales shelby year ended december 31 1999 38 million company contracts deluxe pattern corporation deluxe entity wholly owned sole beneficiary trust provide company design prototype fixture work years ended december 31 2000 1999 1998 company charged 189 million 110 million 66 million arrangement majority amounts 1999 1998 capitalized assets amortized term respective program company production contract remainder amounts billed collected outside third parties 2000 company expensed certain design costs incurred due recently issued accounting pronouncement deluxe continue provide design prototype fixture work deluxe paid accordance standard contract terms accordance terms december 31 2000 company made progress payments deluxe 99 million reduction related party receivable deluxe also buys services company principally labor materials however services significantly reduced 2001 future years ended december 31 2000 1999 1998 deluxe made purchases company recognized revenue amount 91 million 129 million 173 million addition transactions deluxe also charged company approximately 11 million years ended december 31 2000 1999 1998 equipment rental services charges ceased end 2000 net effect transactions deluxe company receivable balance deluxe 302 million 323 million december 31 2000 1999 respectively 33 million recorded long term receivable assets december 31 2000 1999 company advanced approximately 55 million venture africa entity wholly owned sole beneficiary trust construction refurbishment paint line amount included receivables related parties december 31 1999 amount substantially settled early 2001 2000 company began selling raw material south africa amounting 103 million established repayment terms december 31 2000 1999 amount outstanding 160 million 55 million respectively time company makes certain employees available sole beneficiary trust purposes performing services companies controlled beneficiary performing construction services personal residence beneficiary indebted company amount 11 million 05 million december 31 2000 1999 respectively amounts repaid early 2001 1999 company contracted mm flow systems llc mm entity owned son sole beneficiary trust manufacture certain machinery equipment used companys grand blanc facility company purchased three different machines mm approximate cost 965000 addition company contracts mm dispose scrap parts previously rejected automotive original equipment manufacturers companys sales parts mm year december 31 1999 approximately 200000 approximates recovery material cost producing parts company leased buildings machinery equipment entity sole beneficiary trust owns significant equity interest 1999 1998 company received 02 million per year connection agreement venture sales engineering vse venture foreign sales corporation corporations wholly owned sole beneficiary trust serve companys sales management representatives company pays venture sales engineering venture foreign sales corporation aggregate sales management commission 3 production sales company entered amendment agreements vse allow company flexibility reduce expense cooperation vse eliminated approximately 26 million management fees relating sales commissions fourth quarter 2000 done due slowing automotive industry ensure company remained competitive vse conducted sales marketing activities around world company advanced certain funds order carry work behalf company activities result net receivable vse 255 million 242 million december 31 2000 1999 respectively 155 million recorded long term receivable assets december 31 2000 company provided management services venture asia pacific pty ltd vap subsidiaries corporations wholly owned sole beneficiary company billed management fees commissions totaling 49 45 million vap 2000 1999 1998 respectively fees commissions ceased december 31 2000 addition vap reimbursed venture certain expenditures made behalf assigned certain tooling contracts venture arrangements continue result negotiations australian customer venture asia pacific granted increased piece price cover excess tooling program associated costs agreement facilitated repayment terms company venture asia pacific outstanding accounts receivable balance related management fees commissions tooling expenditures conjunction agreement 147 million 203 million reclassified current receivable longterm receivable assets following summary transactions related parties december 31 2000 1999 1998 thousands total related party transactions follows thousands 2000 company reassessed collectibility classification related party receivables based assessment finalization certain repayment agreements 336 million amount reclassed assets amounts generally entities wholly owned sole beneficiary company management believes amounts fully recoverable 9 commitments contingencies operating leases company leases certain machinery equipment operating leases initial remaining terms one year december 31 2000 future minimum lease commitments including related party leases follows thousands rent expense operating leases agreements term greater one month including amounts paid related parties 174 million 109 55 million years ended december 31 2000 1999 1998 respectively usage fees paid based monthly usage certain machinery equipment facilities 70 67 40 million years ended december 31 2000 1999 1998 respectively exception 03 million paid 2000 1999 usage fees paid related parties resolution commercial issues fourth quarter 1998 company resolved several commercial issues resulted recovery gross profit lost current prior years resolution issues resulted additional 74 million gross profit 1998 environmental costs company subject potential liability government regulations various claims legal actions pending may asserted company concerning environmental matters estimates future costs environmental matters necessarily imprecise due numerous uncertainties including enactment new laws regulations development application new technologies identification new sites company may remediation responsibility apportionment collectibility remediation costs among responsible parties company establishes reserves environmental matters loss probable reasonably estimable companys reserves environmental matters totaled 15 million december 31 2000 18 million december 31 1999 company involved legal proceedings michigan department environmental quality mdeq concerning emissions grand blanc paint facility october 1999 parties litigation reached agreement principle settle case installation full pollution abatement equipment grand blanc facility payment us 11 million agreement subject several conditions primarily rezoning property january 2000 rezoning approval granted new equipment february 2000 company applied new permits installation equipment company entered consent decree january 2001 settle matter fourth quarter 1999 company established reserve amount 11 million relating payment made payment february 2001 required decree company plans make certain capital expenditures approximately 85 million current grand blanc systems december 1999 mdeq contacted grand blanc facility relating classification waste leaving facility company discussing issue mdeq conducting tests waste result contact avoid future liability company voluntarily changed classification waste subsequent disposals even though company disagrees mdeq addition company changed materials certain processes remove concern mdeq changing classification waste disposal subsequent contact company limited potential liability disposals prior contact however company may exposed liability past disposal march 20 2000 company received notice warning mdeq regarding matter result notice received grand blanc facility company voluntarily undertook actions grand rapids facility reduce risk potential damage claims procedures methods used grand rapids grand blanc facilities present time company unable quantify liability disposals late 2000 company notified union carbide corporation based upon usage paint application equipment grand blanc facility company obligated pay certain royalties related patent infringements company currently reviewing matter attorney present time company unable reach conclusion possible infringements modifications made amount royalty would owed company use union carbide equipment seabrook facility without modifications paying royalty location company party various contractual legal environmental proceedings assert claims large amounts although ultimate cost resolving matters could precisely determined december 31 2000 management believes based currently known facts circumstances disposition matters material adverse effect companys consolidated financial position results operations matters subject many uncertainties outcome individual matters predictable assurance remote less likely final resolution matters may require company make expenditures excess established reserves extended period time range amounts cannot reasonably estimated companys reserves set based upon review costs may incurred considering creditworthiness guarantors andor indemnification third parties company received company covered insurance unfavorable environmental outcomes relies established reserves guarantees indemnifications received 10 concentrations companys sales general motors corporation gm ford motor company ford daimlerchrysler corporation daimlerchrysler expressed percentage sales 38 23 15 respectively 1998 1999 percentages 18 13 12 11 9 gm audi daimlerchrysler ford volkswagen respectively 2000 percentages 14 13 11 audi general motors daimlerchrysler volkswagon respectively many companys automotive industry customers unionized work stoppages slowdowns experienced employee relations policies could adverse effect companys results operations net sales second third quarters 1998 impacted negatively due strikes certain general motors plants company believes portion lost sales recouped fourth quarter 1998 gm accelerated production refill distribution channels approximately 35 companys north american workforce covered collective bargaining agreements portion european workforce covered collective bargaining agreements uaw contract lancaster facility expires june 2001 formal negotiations begun 11 pensions profitsharing salary reduction plan north america company sponsors profitsharing salary reduction 401k plans cover substantially north american employees plans provide company contribute discretionary amount year contributions 23 million years ended december 31 2000 1999 1998 venture holdings corporation bailey corporation bailey merged july 1997 various retirement plans covering substantially north american employees including three defined benefit pension plans covering fulltime hourly salaried employees benefits payable plans generally determined based employees length service earnings plans funding policy make least minimum annual contributions required federal law regulation change benefit obligation years ended december 31 2000 1999 follows thousands change market value plan assets years ended december 31 2000 1999 follows thousands funded status defined benefit plans december 31 2000 follows thousands funded status defined benefit plans december 31 1999 follows thousands net periodic pension expense benefit years ended december 31 2000 1999 included following components thousands date used measure plan assets liabilities september 30 year weightedaverage assumed discount rate 80 775 2000 1999 respectively assumed rate return plan assets 85 2000 2001 respectively salary based plans expected rate increase compensation levels 00 salaried plans frozen plan assets consist principally cash equivalents listed common stocks debentures fixed income securities salaried pension plan frozen since 1992 service liability accrue plan 1998 additional salaried pension plan hourly pension plan frozen service liability accrue plans effective january 1 1999 three frozen plans merged one plan merged plan terminated 2000 europe peguform germany maintains one defined benefit pension plan covering fulltime hourly salaried employees plus individual defined benefit pension agreements managers members board benefits payable plans generally determined based employees length service earnings benefit plans funded change benefit obligation year ended december 31 2000 1999 follows thousands funded status defined benefit plans december 31 2000 follows thousands funded status defined benefit plans december 31 1999 follows thousands net periodic pension expense year ended december 31 2000 1999 included following components thousands date used measure plan assets liabilities december 31 2000 1999 weightedaverage assumed discount rate 60 2000 1999 salary based plans expected rate increase compensation levels 20 15 2000 1999 respectively 12 income taxes amounts financial statements related income taxes operations venture holdings corporation peguform subsidiaries significant subsidiaries elected corporation flow tax status internal revenue code incur domestic foreign income tax member required report income gains losses deductions credits corporations flow entities included llc individual tax returns provision income tax benefit expense period ended thousands company provide us income taxes foreign withholding taxes cumulative undistributed earnings foreign subsidiaries considered permanently reinvested outside us effective rate venture holdings corporation pretax income 74 year ended december 31 2000 328 relates permanent differences deductible income taxes primarily goodwill amortization 52 state local income taxes net federal tax benefit effective rate foreign entities pretax income 952 year ended december 31 2000 effective tax rate venture holdings corporation pretax income 6527 year ended december 31 1999 2417 relates permanent differences deductible income taxes primarily goodwill amortization 52 state local income taxes net federal tax benefit effective tax rate foreign entities pretax income 368 year ended december 31 1999 effective tax rate pretax income 704 year ended december 31 1998 299 relates permanent differences deductible income taxes 52 state local income taxes net federal tax benefit tax benefits generated 2000 primarily result finalizing restructuring peguform group companies reduction tax rates germany recognition benefit nol carryforwards taxeffected temporary differences carryforwards comprised deferred assets liabilities follows thousands current portion deferred tax assets 92 107 million included prepaid expense december 31 2000 1999 respectively current portion deferred tax liabilities 05 million 12 million included accrued expenses december 31 2000 1999 respectively result restructuring peguform group companies deferred tax liabilities goodwill reduced 219 million december 31 2000 venture holdings corporation us net operating loss carryforwards totaled 334 308 million december 31 2000 1999 respectively begin expire year 2011 peguform france net operating loss carryforwards approximately 119 16 million december 31 2000 1999 respectively unlimited expiration period peguform brazil net operating loss carryforwards approximately 95 million december 31 2000 unlimited expiration period venture germany net operating loss carryforwards approximately 622 million december 31 2000 unlimited expiration period alternative minimum tax credit carryforwards totaled 824 thousand december 31 2000 expiration date management believes net operating loss carryforwards december 31 2000 realizable based forecasted earnings available tax planning strategies 13 segment reporting prior peguform acquisition may 28 1999 company organized operated one reporting segment result peguform acquisition company organized managed based primarily geographic markets served organizational structure companys operating segments divided two reportable segments north america europe following table presents net sales financial information business segment twelve months ended december 31 2000 thousands following table presents net sales financial information business segment twelve months ended december 31 1999 thousands 14 condensed consolidating financial statements venture successor venture holdings trust certain whollyowned domestic subsidiaries jointly severally liable 1997 senior notes issued july 9 1997 may 27 1999 certain 100owned domestic subsidiaries venture became guarantors 1997 senior notes guarantees full unconditional joint several venture issued 1999 notes may 27 1999 connection peguform acquisition result venture acquired certain additional foreign subsidiaries 1999 notes guaranteed ventures 100owned domestic subsidiaries guarantees 100owned domestic subsidiaries full unconditional joint several condensed consolidating financial information periods prior june 30 1999 presented prior may 27 1999 nonguarantors nonissuers 1997 senior notes nonguarantors 1999 notes periods minor subsidiaries individually aggregate management believe separate financial statements issuer subsidiaries guarantor subsidiaries material investors 1997 senior notes 1999 notes principal elimination entries eliminate investments subsidiaries intercompany balances transactions 1997 senior notes following condensed consolidating financial information presents 1 condensed consolidating financial statements years ended december 31 2000 1999 venture coissuer 1997 senior notes b subsidiaries coissuers 1997 senior notes c guarantor subsidiaries nonguarantor subsidiaries e company consolidated basis 2 elimination entries necessary consolidate venture issuers guarantor subsidiaries nonguarantor subsidiaries condensed consolidating balance sheet december 31 2000 dollars thousands condensed consolidating statements income year ended december 31 2000 dollars thousands condensed consolidating statements cash flows year ended december 31 2000 dollars thousands condensed consolidating balance sheet december 31 1999 dollars thousands condensed consolidating statements income year ended december 31 1999 dollars thousands condensed consolidating statements cash flows year ended december 31 1999 dollars thousands 1999 notes following condensed consolidating financial information presents 1 condensed consolidating financial statements years ended december 31 2000 1999 venture sole issuer 1999 notes b guarantor subsidiaries c nonguarantor subsidiaries company consolidated basis 2 elimination entries necessary consolidate venture guarantor subsidiaries nonguarantor subsidiaries condensed consolidating balance sheet december 31 2000 dollars thousands condensed consolidating statements income year ended december 31 2000 dollars thousands condensed consolidating statements cash flows year ended december 31 2000 dollars thousands condensed consolidating balance sheet december 31 1999 dollars thousands condensed consolidating statements income year ended december 31 1999 dollars thousands condensed consolidating statements cash flows year ended december 31 1999 dollars thousands item 9 